Troy Iron & Nail Factory v. Winslow

24 F. Cas. 239, 11 Blatchf. 513, 1 Ban. & A. 98, 1874 U.S. App. LEXIS 1978
CourtU.S. Circuit Court for the District of Northern New York
DecidedMarch 17, 1874
StatusPublished
Cited by2 cases

This text of 24 F. Cas. 239 (Troy Iron & Nail Factory v. Winslow) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Northern New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Troy Iron & Nail Factory v. Winslow, 24 F. Cas. 239, 11 Blatchf. 513, 1 Ban. & A. 98, 1874 U.S. App. LEXIS 1978 (circtndny 1874).

Opinion

WOODRUFF, Circuit Judge.

A suit was begun, and has hitherto been prosecuted, against Erastus Corning, John F. Winslow and James Homer, doing business as copart-ners, and, as such copartners, being the proprietors of, and carrying on their business at, what was known as the Albany Iron Works, for.an injunction to restrain the use by them of a machine for which the complainant held letters patent- theretofore granted to Henry Burden, and to compel the said defendants to account for and pay to the complainant the profits realized by the defendants from the. use of the said machine by them at the .works aforesaid. The complainant had an interlocutory -decree therein, declaring the rights of the complainant, awarding an injunction, and decreeing that the defendants account for such gains and profits. [Case No. 14,195.] For the purposes of such accounting, a reference was ordered, to ascertain the amount of .such gains and profits, Buch accounting was had, and the master’s report filed. Exceptions to such report were filed and were argued, and the opinion of the court upon the exceptions has been filed [Id. 14,196], but no final decree has been entered. Afterwards, Erastus Corning, one of the defendants, died, leaving a last will and testament, wherein he appoints Erastus Coming, Junior, executor.- Thereupon, the complainant, preparatory to a final decree, and with a view to an appeal ■ therefrom, moved this court that the said executor be substituted as defendant in the place of his testator, and that the cause proceed against such executor, and the other defendants in .the suit, “in the same manner that it would proceed, were the said Erastus Corning, deceased, still living.” That motion was denied. The complainant has now filed a bill of revivor, setting out the proceedings ■in such .suit, alleging its abatement by the death of the said Erastus Corning, and praying that the same be revived against the said executor, &c. The executor has answered, and, by stipulation, the parties have agreed upon certain facts, and the case has been brought to a hearing upon pleadings and proofs.

Upon consideration of the facts disclosed by the pleadings and proofs, in substance as above recited, I adhere to the views which governed the decision of the motion heretofore made in the principal cause. The theory of the case made by the complainant, and by the proofs, &c., is, that the original defendants, as copartners, by the unlawful use of the invention, the exclusive right to the use of which was vested in the complainant, have realized gains and profits which rightfully and in equity belong to the complainant; that, in equity, they were liable to be treated as trustees, receiving those profits to the use and for [240]*240the benefit of the complainant; and that the defendants were, therefore; in equity, debtors of the complainant to the amount of such gains and profits. No question of damages sustained by the complainant by the wrong done arises in such ease. When the original bill was filed, and when the decretal order was made, the law did not permit the recovery of damages in such a suit. To recover damages, a patentee must go to a court of law, treat the defendants as tort-feasors, and establish his damages, which, being proved, might be recovered, whether the defendants had made any profits by their infringement ■of the patent or not. The subsequent alteration of the law by a statute which enables the complainant in a suit in equity to recover damages, does not apply to this case nor affect the present litigation. The original defendants then, as copartners in the business of manufacturing, &c., have received gains and profits, for which they have been required to account to the complainant, and for which he is entitled to ask a final decree. Those gains and profits constitute a debt due by the copartnership to the complainant. The liability is, in equity, in its nature, ex contractu, and a copartnership liability or obligation. On the death of Erastus Corning, his two copart-ners survived him. The copartnership property became, on such decree, vested in them, and the copartnership liabilities devolved upon them, as survivors. The suit, therefore, did not abate. Nothing was necessary but a suggestion of the death of Erastus Corning, and the suit would thereupon proceed against the others. This is a familiar elementary principle, and there is nothing in an equity suit founded on letters patent, and a prayer for an account of the profits arising from the infringement thereof, which withdraws this case from its operation. The fact, that the infringement was a tortious act, and the original defendants were tort-feasors, and might have been so treated, will not help the complainant. He did not so treat them, and, so far as the tortious nature of the defendants’ acts gave character to the defendants or their liability, the inference is the other way. As tort-feasors, they may have been severally liable, and, being so, it would be even more plain that the suit did not abate, and that the survivors are separately liable. There is no allegation or claim that those survivors are not solvent, or that the copartnership assets are not entirely sufficient for the satisfaction of the complainant’s demand. Some modern English cases have held that a creditor of a copartnership may proceed in equity against the survivors and the representatives of a deceased copartner, in the same suit, for the recovery of a copartnership debt, and indicate that this may be done without first resorting to the copartnership fund or the surviving partners, and without showing that they are insolvent. See Wilkinson v. Henderson. 1 Mylne & K. 582: Devaynes v. Noble. 2 Russ. & M. 495. In other cases, the creditor was held entitled to pursue the estate of the deceased where the survivors had become bankrupt, and without reference to the state of the accounts between the partners or the fund in the hands of the assignees of the bankrupt survivors. See Devaynes v. Noble, 1 Mer. 529; Vulliamy v. Noble, 3 Mer. 592. The case of Wilkinson v. Henderson is pointed in its declaration that, in a suit in equity by a creditor of the copartnership against the representatives of a deceased partner and the survivor, the complainant is entitled to satisfaction out of the assets of the deceased, although it be not shown that the surviving partner is insolvent; and it was held that, in that suit, no decree could be made against the surviving partner, but against the assets of the deceased only, because the liability of such survivor was at law, and, when that was the «ase. equity could not 'even render a decree against such survivor and the representatives of the deceased jointly, but the decree must be, against the estate of the deceased alone. The decision was by the master of the rolls, and his opinion does not, it seems to me, very satisfactorily meet the grounds upon which the contrary doctrine rests. The copartnership property is the primary fund for the payment of the copartnership debts. That fund has passed to, .and the title therein has become vested in, the survivors, and, in their hands, it is held, in equity, in trust for the payment of those' debts. At law, confessedly, the representatives of the deceased are not liable at all, and the survivors are solely liable, and there is, in ordinary cases, no reason for going into equity until legal remedies have been exhausted, or, at least, until- it is shown that they will be unavailing; and this latter consideration has the same force, in an original suit in equity, to charge the copartnership with a debt, as if the original remedy was at law. Non constat, that a decree against the survivors, and, through them, to reach the fund presumptively in their- hands, will not be completely effectual.

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Bluebook (online)
24 F. Cas. 239, 11 Blatchf. 513, 1 Ban. & A. 98, 1874 U.S. App. LEXIS 1978, Counsel Stack Legal Research, https://law.counselstack.com/opinion/troy-iron-nail-factory-v-winslow-circtndny-1874.