Bate Refrigerating Co. v. Gillett

30 F. 685, 1887 U.S. App. LEXIS 2279
CourtUnited States Circuit Court
DecidedApril 22, 1887
StatusPublished
Cited by1 cases

This text of 30 F. 685 (Bate Refrigerating Co. v. Gillett) is published on Counsel Stack Legal Research, covering United States Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bate Refrigerating Co. v. Gillett, 30 F. 685, 1887 U.S. App. LEXIS 2279 (uscirct 1887).

Opinion

Wales, J.

This is an application for an attachment for contempt against Vernon II. Brown, who is the accredited agent of the Cunard Steam-Ship Company, Limited, at the port of New York, and has the entire control and management of its business at that place, for the violation of an injunction granted in the above suit. The hill in ibis cause was hied on the fifth of February, 1878, against the Cunard Steam-Ship Company, which was impleaded with certain individuals named therein, for the infringement of letters patent No. 197,314, dated November 27, 1877, for “improvement in processes for preserving meats during transportation and storage.” The answer of that company was filed on the thirtieth of March, 1878, and a decree, sustaining the validity of the patent, and ordering an injunction, ivas entered November 14, 1881. This decree was vacated on September 29,1882, and reinstated March 29, 1883. •"

[686]*686At the time of filing the bill, and putting in the answer, the Cunard Steam-Ship Company, as it was then known and called, was an association or partnership of four persons, transacting business under the name and style of the British & North American Royal Mail Steam-Packet Company, but the association appeared to the suit, and answered, without taking exception to the misnomer. The Cunard Steam-Ship Company, Limited, was incorporated on the twenty-third of May, 1878, under the British Company act of 1862, and on or about July 1, 1878, succeeded to the property and business of the British & North American Royal Mail Steam-Packet Company. On the organization of the incorporated company, the four individuals, constituting the old association or partnership,, became four of the six shareholders of the corporation, and were the controlling owners and managers of it. Other purchasers of shares came in afterwards; so that prior to April 25, 1885, the partners owned not more than one-fourth of the stock, and were represented by only three members in a board of eight directors.

By an agreement made between the partnership and the corporation, at the-time of the sale and transfer of the partnership property, business, and good-will, the corporation agreed to “pay, satisfy, and discharge all the debts, liabilities, and obligations of the vendors whatsoever, and adopt, perform, and fulfill,all contracts and engagements binding on them, and at all times keep the vendors indemnified against such debts, liabilities, obligations, contracts, and agreements, and against all actions, proceedings, costs, damages, claims, and demands in respect thereof.”

The alleged disobedience of the injunction was the transportation of covered meat by the Pavonia, one of the vessels of the Cunard SteamShip Company, Limited, on or about A]nil 25,1885. , The Pavonia. was a new vessel, built by the corporation, and never belonged to the old partnership. According to the statement of Mr. Brown, the company rented certain cubic space in that vessel to a third person, at so much per cubic ton, which space was occupied by a refrigerating box put into the vessel by the shipper at his own expense, in which box, on one occasion, to-wit, April 25, 1885, he shipped covered meat in a manner claimed to be an infringement of the complainant’s patent. The company had nothing to do with the covering, shipment, or caring for the meat, except that the ship’s tackles hoisted it from the wharf to the deck, and that a certain quantity of steam was furnished from the vessel’s boilers to compress the air used in the refrigerating process. The use of steam for compressing air in the refrigerating process is not, by itself, an infringement, but becomes so, it is claimed, when used in combination with the complainants’ process for preserving meat. It is not claimed that the partners sold and transferred their property to the company, or that it was accepted by the latter, with any fraudulent intent, on either part, to evade a decree in this suit; .nor is it denied that the complainant had knowledge of the sale and transfer.at, or about, the time they were made. Mr. Brown never acted as agent for the partnership. He was appointed agent of the corporation, on October 1, 1886,

On these facts, in support of the motion, it is contended (1) that, [687]*687where there is simply a transfer of all its property and business, by and from the individual members of a partnership to the same individuals organized as a corporation, the corporation is immediately and directly bound, and becomes, ipso fado, a substituted party to any litigation which may be pending against the partnership; (2) that, even if this is not so always, it is certainly so under the peculiar circumstances of the assumption of obligations which exist in the present case, and in which the corporation agrees with itself to fulfill every engagement, and to perform every duty, of the old partnership; (3) that if the corporation does not become, by its act of incorporation, a substituted party in the original litigation, yet it is so far affected by the injunction as to be bound by it, and a violation of such injunction by it is to be treated by the court in the same way as a violation by the original party.

The Cunard Steam-Ship Company, Limited, is not and never was a party to the record in this suit, and can ho hound, by the decree rendered, only as a privy to one or more of the defendants in the suit, or as purchaser, pendente lile. A judgment binds all parties to the record, and also those whom they represent, or who are in privity with them, and claim under them. By ‘'‘privity” is meant the mutual or successive relationship to the rights of property; and therefore a judgment, to be binding on one who is not a [¡arty to the record, must bind him in relation to some specific light of property which is directly affected by the judgment. 3 Bouv. Inst. 373; 1 Greenl. Ev. § 139; Hunt v. Haven, 52 N. H. 162; Consolidated Fruit-Jar Co. v. Whitney, 2 Ban. & A. 30.

The interlocutory decree rendered in this suit is against the parties defendant on the record, who have been adjudged guilty of the tort complained of in the bill, that is, of acts committed by them prior to the filing of the bill, and restrains and prohibits any repetition by them of such acts m the future; but in no manner does it relate to, or affect the title to, or interest in, any property which the corporation now holds, as vendees of the defendants. Identity of interest, in the property affected by the judgment, makes the grantee or vendee of that property privy to bis grantor or vendor, whenever the sale or transfer is made after the judgment has been rendered. But here, the corporation acquired all its rights of property before the decree was entered, and it has not been shown how, or in what way, that decree concerns, or directly affects, any of the property which was assigned or transferred by the partnership to the corporation. Until this has been clone, the corporation cannot bo said to be in “privity” with the defendants, in the proper sense of that term. Tiiis is not the case of a fraudulent transfer of property to avoid the effect of a decree. Such eases have occurred, and some of them were cited-on the argument, where a court of equity was able to see through the disguise, and to disregard it.

In Mayor v. Staten Island Ferry Co., 64 N. Y. 622, where it was evident that the transfer was colorable, and for the purpose of avoiding an injunction, it was not allowed to prevent the issuing of an attachment against the fraudulent transferee.

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Cite This Page — Counsel Stack

Bluebook (online)
30 F. 685, 1887 U.S. App. LEXIS 2279, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bate-refrigerating-co-v-gillett-uscirct-1887.