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23 F.(2d) 3

the letter. The consequences which might follow any construction of the letter of credit, calling for documents, that would permit the delivery of documents in which some one else has an interest are many and obvious.

We are of opinion that the court was right in instructing a verdict for the defendant. Judgment affirmed.

DUNCAN v. UNITED STATES.

TILTON V. SAME.

Circuit Court of Appeals, Seventh Circuit. November 29, 1927.

Rehearing Denied January 23, 1928.

Nos. 3939, 3940.

1. Criminal law 778(5)-Charge requiring defendant to explain possession of forged check to jury's satisfaction held erroneous, as creating impression burden of proof had shifted.

In prosecution for defrauding and conspiring to defraud United States, and forging and passing a forged check drawn by Treasury Department, charge requiring defendant to explain to satisfaction of jury how he obtained possession of check held erroneous, in that it left jury with impression that burden had shifted to accused to satisfy jury of his inno

cence.

2. Criminal law 327-Burden of proof in criminal case never shifts.

In a criminal case, the burden of proof never shifts, and government is required to establish its case beyond a reasonable doubt.

3. Criminal law 1186(1)-Defendant, convicted as joint participant with other defendant granted reversal for error in charge, held entitled to reversal also.

In case of reversal of conviction for defrauding and conspiring to defraud the United States, and forging a check drawn by Treasury Department, and passing check drawn by Treasury Department, because of error in charge, defendant, convicted as joint participant in crime, is also entitled to reversal.

In Error to the District Court of the United States for the District of Indiana.

Russell V. Duncan and Charles W. Tilton were convicted of defrauding the United States, conspiring to defraud the United States, forging a check drawn by Treasury Department, and passing a forged check drawn by Treasury Department, and they separately bring error. Reversed and remanded for a new trial.

Milton L. Clawson and John F. Robbins, both of Indianapolis, Ind., for plaintiffs in

error.

Albert Ward, of Indianapolis, Ind., for the United States.

Before ALSCHULER, EVANS, and PAGE, Circuit Judges.

EVAN A. EVANS, Circuit Judge. Both plaintiffs in error were charged in an indictment containing seven counts with having defrauded the United States, conspired to defraud the United States, forged a check drawn by the Treasury Department of the United States government, passed a forged check drawn by the Treasury Department, etc., and were convicted on all counts. Two other parties were named as codefendants, but they were both acquitted. Separate writs of error were prosecuted by the above-named plaintiffs in error. Both cases were argued together, and one opinion will suffice to dispose of the two writs.

It

Error is assigned because the court refused a continuance of the case, necessitated by the absence of a material witness. was also argued that the evidence was insufficient to support a conviction, and error, too, is assigned because of the court's charge to the jury. It will be necessary to consider only the last-named error. As a proper background for the consideration of this assignment of error, only a brief statement of facts is necessary.

The government issued a check to John W. Smith for $3,094.91. It was duly presented to a bank by plaintiff in error Duncan, with three indorsements on the back thereof: "J. W. Smith. John W. Smith. R. V. Duncan." The check was cashed by the bank, and later by the United States government. This check was issued by the goverament to a taxpayer who had overpaid his income tax the preceding year. When received by Smith, it was sent to the Indiana internal revenue collector as part payment of his next year's income tax. It was never indorsed by the payee, John W. Smith, and while in the possession of the internal revenue collector it was stolen, and subsequently presented by Duncan to the bank. Duncan testified that he received the check in part payment of the purchase price of certain real estate that he sold to a man calling himself John W. Smith, and that he (Duncan) presented the check to the bank, believing the signatures were the genuine signatures of the

payee.

Tilton was a law student, studying and working in the office of Duncan, and there was testimony from handwriting experts to the effect that the two "Smith" indorsements on the back of the check were written by Til

ton. This was denied by Tilton, and his testimony was corroborated by the testimony of a handwriting expert. His counsel also confidently calls our attention to the signatures to support Tilton's denial. It will thus be seen that defendants did not controvert that part of the government's case which necessitated proof that the check had been forged, that Duncan had possession of it, indorsed his name thereon, and presented it to the bank for payment.

In the course of the charge to the jury the following occurred:

"Court: Further, gentlemen, with reference to this check, as I stated before, the defendant Duncan admits that he had possession of it. If you believe that that check was a stolen check, and that it was found in the possession of the defendant Duncan, then, gentlemen, it becomes the duty of the defendant Duncan to explain to you, to your satisfaction, how he obtained possession of that check.

"Mr. Clawson: If the court please, does the court mean, by that, that the burden is on the defendant Duncan to show how he came into the possession of that check?

"Court: I didn't say that. But you will have an opportunity to except at the proper

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the check was indorsed by Mr. Duncan and presented by him to the bank. He never disputed the indorsement, but at all times recognized it as his own, and explained how the check came into his possession through a real estate deal, wherein one purporting to be John W. Smith was the purchaser, and presented the check in part payment of the purchase price.

[2] However, the more serious criticism of this charge is to be found in the next clause: "Then, gentlemen, it becomes the duty of the defendant to explain to you to your satisfaction how he obtained possession of that check." In a criminal case, the burden of proof never shifts. The government is required to establish its case beyond a reasonable doubt. When the evidence is sufficient to convince the jury beyond a reasonable doubt that property recently stolen is found in the possession of the accused, such accused person naturally carries the duty of explaining its possession. This, however, does not mean that in a criminal case the burden of proof shifts.

In explaining the possession of such recently stolen property, the accused is only required to offer such a rational explanation as will raise in the minds of the jury a reasonable doubt as to his innocence. To require him to explain to the satisfaction of the jury is to impose upon him a burden greater than the law requires. At least, it seems to us that such language, without further explanation, was sufficient to leave with the jury the impression that the burden had shifted to the accused to satisfy the jury of his innocence. For innocence or guilt, upon the disclosed facts, depended upon the explanation the accused offered respecting this possession of the check. Upon this narrow

"Mr. Slack: I have no objection to it, your issue of fact the accused was merely required honor.

[1] This charge may well be criticized in several respects. We think the use of the word "admits," while not particularly prejudicial, was unfortunate. Likewise the statement, "if you believe that the check was a stolen check, and that it was found in the possession of the defendant Duncan," suggests that the defendant in some way concealed his participation in the negotiation of the check until the check was found by an investigator, or by some one else, in his (Duncan's) possession. The undisputed evidence showed that

to raise a reasonable doubt as to his innocence, rather than "satisfy" the jury as to such innocent possession. We conclude that error was committed in giving this charge and that it was prejudicial to the defendant. [3] Inasmuch as Tilton, who was charged as a joint participant in the crime, suffered to the same extent and in the same respect, the judgment as to both plaintiffs in error must be reversed. Feder v. U. S. (C. C. A.) 257 F. 694, 697, 5 A. L. R. 370.

The judgment is reversed, and the cause remanded for a new trial.

23 F.(2d) 5
HUMANE STANCHION WORKS v. MITCH-
ELL MFG. CO.

Circuit Court of Appeals, Seventh Circuit.
December 5, 1927.

Rehearing Denied January 19, 1928.

No. 3952.

1. Patents 328-1,215,569, for guard for cow stalls, held valid.

Mitchell patent, No. 1,215,569, February 13, 1917, for guard for cow stalls, held valid, as combination of elements producing useful result, over prior devices.

2. Patents

328-1,215,569, claims 6 to 10, for guard for cow stalls, should be limited to guards pivotally attached to cross-bars, which, intermediate their ends, are pivoted to standard, enabling parallelogram formed to be collapsed.

Claims 6 to 10, inclusive, patent No. 1,215,569, to Mitchell, February 13, 1917, for guard for cow stalls, should be limited to guards pivotally attached to cross-bars, which, intermediate their ends, are pivoted to standard, thus enabling parallelogram thus formed to be collapsed to bring the two guards into and out of guarding position.

3. Patents 118-Patent held not invalid for alleged violation by primary examiner of Patent Office rule respecting binding effect of recommendation of examiner in chief (Patent Office rule 139).

Patent No. 1,215,569, to Mitchell, February 13, 1917, for guard for cow stalls, held not invalid because of alleged transgression of Patent Office rule 139, where primary examiner allowed certain claims and disallowed others, and examiners in chief who affirmed decision of primary examiner in rejecting claims stated in decision that many claims allowed were not substantially different from those under rejection and recommended that examiner revise claims, and in accordance with their recommendation, primary examiner reconsidered allowed claims and rejected certain claims, since decision of examiners in chief did not amount to rejection of all claims, requiring a showing of new facts.

Appeal from the District Court of the United States for the Western District of

Wisconsin.

fringement of United States patent to Mitchell, No. 1,215,569, February 13, 1917, for a guard for cow stalls. Following Fig. 1 of the patent drawings shows the invention:

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10 is the upright standard between stalls. 11 shows one member of the stanchion in which the cow inserts her head, the opposite member of the stanchion being shown open, resting against 10. The guard of the patent resides in the vertical rods, 14, which, when the stanchion is open, are in the position shown to prevent the cow from putting its head in the spaces between the standard and the member of the stanchion, or from walking through the open stanchion, as shown. When the cow is in place and the stanchion closed, the guards are brought out of the way and next to the standard by moving the members, 13, which are pivoted to the standard at 16 and to the guards at 18 and 19, causing one of the guards to move downward and the other upward, taking them out of the way to enable the cow to turn its head sideways and backwards without meeting this obstruction.

Invalidity of the patent is claimed mainly upon United States patent to James, No. 1,002,275, September 5, 1911; to Simons, No. 679,431, 1901; and to Ball, No. 46,985, 1865. Simons recognizes the need of such a guard and secures it by attaching rigidly to the outside of each stanchion member a rod to serve as a guard between the stanchion and the standard. This construction is open for general use, but is claimed to be objectionable, in that it cannot be withdrawn when the cow is in position and the stanchion closed, but reFrank E. Dennett, of Milwaukee, Wis., mains permanently, and more or less an obfor appellant.

Patent infringement suit between the Humane Stanchion Works and the Mitchell

Manufacturing Company. From the decree, the Humane Stanchion Works appeals. Affirmed, with claims limited.

Arthur L. Morsell and Curtis B. Morsell, both of Milwaukee, Wis., for appellee.

Before ALSCHULER, PAGE, and ANDERSON, Circuit Judges.

ALSCHULER, Circuit Judge. Appellant complains of a decree finding its in

struction to the free movement of the head. No other contrivance appears until the James application in 1910. His device shows a single guard in each stall, between the standard and the fixed member of the stanchion. This guard is pivotally attached below to the stall floor and above to the frame or rod connecting the division standards, so that when the

stanchion is open to receive the head, the guard is swung around to stand in the space between the standard and the upright member of the stanchion. When the stanchion is closed, the guard is then swung back to stand out of the way against the standard. To prevent the cow passing through between the open stanchion, there is shown a chain between the two at about the middle, and to prevent its disturbing the stanchion member which, when opened, rests against the standard stanchion member, there is a chain connection to the standard to hold it there until the stanchion is ready to be closed.

James' device no doubt served the purpose of guarding the one opening into which it was swung, and it might involve no patentable invention over James to provide another such guard for the space on the other side of the stanchion, although this would mean a double mechanism, in each of which there is a bolting to the floor and to the cross-bar between the tops of the standards. Ball is shown to indicate want of novelty in a collapsible gate. This shows a gate collapsible as it is raised, and with a counterweight to help raise it.

[1] It might be said that if, instead of pivoting James' guard member to the floor and the top member, to swing it into and out of position, it were pivoted to the standard to raise or lower it into and out of guard position, this would not indicate patentable advance over James. But Mitchell went further. He pivoted both guards to bars 13, which he pivotally attached to the standard at 16, and in these further particulars did something that does not seem to have been conceived before. There is evidence that this produced some useful result over the prior devices, and we are of opinion that it shows such a combination of elements, however old, as is in this art entitled to recognition and to such reward as should come to those who, by the exercise of the inventive faculty, first combine various old elements and bring about an improved result.

[2] Some of the claims, notably 6 to 10, inclusive, seem to us to be somewhat broader than the invention discloses, in that they might be construed to cover any combination whereby through any means movable guards are introduced on both sides of the stanchion. Such claims should be limited to guards pivotally attached to cross-bars which, intermediate their ends, are pivoted to the standard, thus enabling the parallelogram thus formed to be collapsed to bring the two guards into and out of the guarding position as shown.

The contention of a prior use by Grubb

.

is not warranted by the evidence, which wholly fails to establish such use with the definiteness that the law requires.

[3] It is urgently contended for appellant that the patent has no validity, because of alleged transgression of Patent Office rule 139. It seems that the primary examiner allowed certain claims and disallowed others, and that from the disallowance an appeal was taken to the examiners in chief, who affirmed the decision of the primary examiner in rejecting the claims, stating in their decision: "We note that many of the claims already allowed are not substantially different from those under rejection, and recommend that the examiner revise these claims in view of our decision." An unsigned pencil note upon the decision is: "Exr. note and carefully reconsider allowed cls. to rej. thosę not allowable.”

Rule 139 prescribes that if the examiners in chief discover grounds, not involved in the appeal, for granting or refusing letters patent, they shall annex a statement to that effect with such recommendation as they deem proper, and that in case they recommend refusal of letters patent in the form claimed, their recommendation will stand as a rejection "and will reopen the case for amendment or showing of fact, or both, before the primary examiner, responsive to that rejection. The recommendation of the examiners in chief is binding upon the primary examiner unless an amendment or showing of facts not previously of record be made which, in the opinion of the primary examiner, overcomes the recommendation."

The contention is that the decision of the examiners in chief amounts to a rejection of all the claims, and that since no amendment was made or showing of facts not previously of record, the primary examiner was wholly without power to grant letters patent, which are therefore void. Following the report of the examiners in chief, it is stated in the file wrapper: "In accordance with the recommendation of the Board of Examiners in Chief, the allowed claims have been reconsidered, and claims 11 and 18 are rejected as follows," and the other claims were ordered to "stand allowed." Subsequently, some of the claims thus ordered to stand allowed were canceled, and the numerals of those remaining changed, and the claims of the patent allowed.

Without considering whether transgression of the rule would alone affect the validity of a subsequently granted patent, we are of opinion that no such transgression here appears. The decision of the examiners in chief was not that all of the claims were im

23 F.(2d) 7

properly allowed, but that many of the claims did not differ substantially from those under rejection, and their direction to the primary examiner still left him with discretion to allow even such claims, for their recommenda

tion was that the claims be revised, and the pencil note was that he carefully reconsider

the claims. The record shows that he did re

consider them, and disallowed certain ones of them, which he evidently regarded as complying with the recommendation of the examiners in chief. Upon such a record it would be a far cry to find invalidity of the patent.

With the claims limited as above indicated, the decree of the District Court is affirmed.

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1. Bankruptcy 375-On acceptance of com

position, referee should suspend further proceedings pending determination of question of confirmation.

After composition has been accepted by creditors, referee should suspend further proceedings until question of confirmation has been determined by judge. 2. Bankruptcy

375-Before confirmation of composition creditors have no interest in allowance or disallowance of claims.

Pending confirmation of a composition, creditors ordinarily have no interest in allowance or disallowance of claims of others.

3. Bankruptcy 375-Object of composition is to get going business back into hands of business managers.

A leading object of composition is to get a going business back into control of business managers, and speed is important.

4. Bankruptcy 375-Pending composition proceedings, trustee cannot contest claims at expense of estate.

Pending composition proceedings, after adjudication, trustee has no standing to contest claims at expense of estate.

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Appeals from the District Court of the` United States for the District of Massachusetts; James Arnold Lowell, Judge.

In the matter of Murphy, Gorman & Waterhouse, Inc., bankrupt; Starr Parsons and his claim as a creditor, confirming a composiothers, trustees. From decrees disallowing tion, and from an order permitting bankrupt to intervene, James P. Phelan brings separate appeals. Reversed and remanded on first two appeals, and third appeal dismissed.

Edward J. Flynn, of Boston, Mass. (John V. Phelan, of Lynn, Mass., and Augustus L. Baker, of Boston, Mass., on the brief), for appellant.

Lee M. Friedman, of Boston, Mass. (Friedman, Atherton, King & Turner, of Boston, Mass., on the brief), for trustees.

Alexander G. Gould, of Boston, Mass., for bankrupt.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

ANDERSON, Circuit Judge. These three appeals grow out of a controversy over a claim of James P. Phelan against the bankrupt estate of Murphy, Gorman & Waterhouse, Inc. No. 2159 is an appeal from a final decree disallowing Phelan's claim. This record contains a summary of the evidence before the referee, which the bankrupt, by motion to diminish, seeks to have eliminated.

No. 2164 is Phelan's appeal from a confirmation of a composition. As his objections were overruled on the sole ground that he was not a creditor, there is before us no evidence to sustain his objections, even if in this court he be held a creditor.

No. 2173 is Phelan's appeal from an order permitting the bankrupt to intervene in No. 2159, made after appeal taken and citation served on the trustees as the only appellees.

The proceedings were inexcusably irregular and involved. The records omit parts necessary for the clear presentation of some of the questions raised, but contain much repetition and surplusage. Wasting delay and needless and futile litigation have accrued from disregard of well-settled principles, perfectly familiar to at least some of the experienced and learned counsel in this

case.

On an involuntary petition filed on December 13, 1926, Murphy, Gorman & Waterhouse, Inc., was, on January 10, 1927, adjudicated a bankrupt, and the case then sent to the referee. On January 19, Phelan filed

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