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fications, "is accomplished by imparting to the blank à substantially uniform speed of rotation throughout all those portions of it in the grip of the working surfaces of the disks. At the point X, X, where the pass is most contracted, and the grip of the disks on the blank the greatest, the radii, x, x', of the two disks is the same and consequently the speed of rotation imparted to the blank at this point by both disks is the same. At the line, Y, Y, in the pass, while the radius, y, of one disk is smaller than the common radii, x, x', of both disks, the opposing radius, y', of the other disk is proportionately greater than the common radii, x, x', so that the mean effective rotative action imparted to the blank by the two disks at the line, Y, Y, is the same as that imparted to it at the line, X, X; or, to express it in another way, the circumferential speed of the disk A is slower at its radius, y, than at its radius, x, and consequently its rotative action on the blank is slower at Y than it is at X, but the circumferential speed of the other disk, B, at its opposing radius, y', is as much greater than at x' as y is slower than x, so that the mean effective rotative action upon the blank of the smaller and larger radii, y, y', of the two disks respectively is the same as that of the common radii, x, x'. Consequently that portion of the blank lying within the grip of the disks at the line, Y, Y, is rotated at substantially the same speed as that portion at the line, X, X. As this condition prevails in every point in the grip of the disks between the lines, X, X, and, Y, Y, a larger radius' and greater circumferential speed of one disk being opposed by a smaller radius and slower circumferential speed of the other, there is practically no twisting of the blank within the grip of the disks by reason of one portion of the blank being rotated faster than another portion. There inight, if there were no slippage, be a slight difference of speed of rotation of portions of the blank within the grip of the rolls, due to the fact that the diameter of the blank is slightly smaller at X, X, than it is at Y, Y, but owing to the slippage this does not occur, and the blanks, when they leave the pass between the disks, have their fibres substantially straight and parallel throughout."
This full and clear exposition leaves little to be said, either with regard to the principle of the invention or the mechanical means by which it is sought to be carried out. And it is the mechanical means, of course, and not the method or process-much less the result—that is patented, and is to be looked to in determining whether infringement exists. The defendants are supposed to escape, because, as it is said, the inventor is confined by the prior art to the precise construction claimed, and has committed himself, in both the converging and diverging lines of the pass, to a plane or flat surface on one disk, opposed to and coacting with a beveled surface on the other, which the defendants, admittedly, do not have. The drawings of the patent lend support to this contention; but they are expressly declared in the specifications to be more or less diagrammatic, and not intended to represent “the exact proportions and relations of the disks and their working surfaces, to be followed under all circumstances”; a reservation which allows of not a little latitude. But, more than this, the controlling and distinguishing feature and principlc of the invention consists not so much in having a plane or flat surface—that is to say, one in the exact plane of rotation, at right angles to the axis of the disk-opposed to one that is beveled, converging to, as well as diverging from, the center of the pass, as that at different points, other than the center, the diameters and so the circumferential speed of the disks shall be unequal. It is this counterbalance that preserves the fiber from distortion, and it is secured by the placing and functional relation of the disks, and not by having the opposing surfaces plane or beveled, which merely provides the necessary convergent and divergent lines to draw in and compress the blank. Nor is just what is meant by a “plane surface," except, perchance, as it is contrasted with a bevel, particularly defined in the patent.
The machine in use by the defendants, which is put in evidence, shows each of the disks with a flattened central portion at right angles to the axis; then a slight incline or bevel of about three degrees for the space of some four inches; and then a sharp bevel of ten degrees the rest of the way to the edge; the rolls being so set that the lesser bevel of the one disk is opposite the sharper bevel of the other. It is upon this variation that the defendants rely to escape infringement; beveled surface being opposed to bevel, as it is pointed out, and not bevel to fiat, as specified in the patent. But this evidently studious avoidance of the terms, while obtaining the benefit of the principle of the patent, cannot be sustained. Except where form is of the essence of the invention, it has little weight. Machine Co. v. Murphy, 97 U. S. 120, 24 L. Ed. 935. And changes much more significant have been many times held of no importance; the principle and mode of operation being maintained. Ives v. Hamilton, 92 U. S. 431, 23 L. Ed. 494; Elizabeth v. Pavement Co., 97 U. S. 127, 24 L. Ed. 1000; Hoyt v. Horne, 145 U. S. 302, 12 Sup. Ct. 922, 36 L. Ed. 713; Diamond State Iron Co. v. Goldie, 84 Fed. 972, 28 C. C., A. 589. The spirit rather than the letter governs, having regard to which, the claims in the present instance must be held to be fulfilled by a relatively flat or flattened surface opposed to a bevel; the operative result remaining unchanged. The slight inclination which is given in the defendants' machine to a fractional part of the inner flattened portion of the disks is the full mechanical and functional equivalent of the plane or flat surface called for by the patent, of which it is a mere plausible variation, being hardly distinguishable from it to the eye, and playing identically the same part. By it and the opposing bevel of the other disk the necessary converging lines, to grip and compress the billet, are supplied; and, the two disks being so positioned with respect to each other that the opposite diameters, at different points, whether flat or beveled, are unequal, the distorting effect on the surface of the billet is avoided, which would otherwise be produced. This is the whole principle of the invention, which is thus appropriated bodily; the same mechanical means, substantially, if not literally, being made use of, to carry it out.
It is said, however, that a twist is made by the defendants' machine (which still, as it seems, is claimed as an advantage, because it discloses flaws, and saves the putting out of defective work); and that judged by the product the two machines are not thus alike. The inventor, as it is argued, differentiated his machine in the patent office by the result, and, having so characterized it, and obtained a patent upon the strength of the representations as to what it would do, he is now tied up to a no-twist tube, which, if not produced by the natural operation of the defendants' machine, it does not infringe. But the patent, as already stated, is not for the product, but the mechanical apparatus for making it; and the object to be attained is to be carefully distinguished from the means taken for doing so. And while it is true that the purpose of the invention was to avoid a twist, and it might well be claimed that a machine which was not arranged to, and did not do this, did not come within its scope, where, on the other hand, the mechanism employed is substantially the same, that, for some reason, designed or otherwise, its operative effect is made to vary, cannot be altogether accepted as the test. That is particularly the case, where it is shown, as it has been here, that, if the tubing turned out by the defendants is not what it might be with respect to a twist, it is the result of not doing al with it that might be done. Whatever the form of the machine, in order to do the best work, the mandrel must be set so as to meet and pierce the billet at the narrowest point of the pass, and, if it is not, there will be more or less of a twist, due to the greater resistance of the mandrel when it is withdrawn to a point, where the piercing of the billet is relieved. This is a well-known effect, common to all mills, and within the control of the operator. Being a mere matter of how the machine is run, it does not enter into the case. The patent does not prescribe how or where the mandrel shall be set (except as a preference is expressed for locating the axial line of the pass a little below the center of the rolls), and, if its terms are otherwise fulfilled, it is of no consequence that the mandrel is not so adjusted longitudinally as to bring about the best results. If a perfect or imperfect product is to determine the question, in
any case, infringement would be made to vary according to the skill of the operator, and whether the machine was well or badly run. This is not, of course, the criterion. A misuse, detracting from its utility, does not change the mechanical combination or the essential character of the device. Penfield v. Chambers, 92 Fed. 630, 34 C. C. A. 579; King v. Hubbard, 97 Fed. 795, 38 C. C. A. 423. The mechanism being substantially the same, it is the possibilities that reside in it, under ordinary and proper use, that is to decide; and as to that there can be no question here. The defendants, if they desire, may retract the mandrel, so as to produce a twist, but to do so is a perversion, the natural operation being the other way; and the resultant product, when the machine is correctly and normally run, being the same as that of the complainants, the last pretense for distinguishing it is removed and infringement is made out. This applies not only to the company, but also to the defendant Driscoll, who has been an active agent in promoting the infringement, although not to the other defendants, who are not so involved.
Let a decree be drawn sustaining the patent and finding that it has been infringed, with the usual relief incident thereto, with costs.
GUTTERSON & GOULD v. LEBANON IRON & STEEL CO.
(Circuit Court, M. D. Pennsylvania. January 8, 1907.) 1. RECEIVERS-MANAGING RECEIVERSHIP-PURPOSE OF.
A managing receivership of a private business corporation is never undertaken, except with the view of winding up its affairs and the sale of its property; the business being taken over and continued in order that
the whole may be disposed of in the end as a going concern. 2. SAMEJURISDICTION-BILL BY GENERAL CREDITORS.
Doubted, therefore, whether a court has jurisdiction of a bill brought by general creditors of an insolvent iron and steel company, the sole purpose of which, as judged by the sequel, was to get receivers appointed and stave off lien creditors; the case in four years not having advanced a step beyond the filing of the bill and friendly answer made by the corporation confessing it, and the appointment of receivers under it, and the bill not being one to foreclose, nor justified as a proceeding to compel liquidation, and there being no winding-up statute of the state on which to predicate
it, nor any general equity jurisdiction outside of that. 3. SAME-ACCOUNTING-BURDEN OF PROOF.
On an accounting by receivers, the burden rests upon them to justify and vouch their accounts, so far, at least, as they are questioned by ex
ceptions. (4. SAME-LIABILITY OF RECEIVERS-MISMANAGEMENT.
While receivers are trustees, and, according to the established rule, are not liable individually unless they are shown to have been in positive fault, yet, when their management has resulted in a large loss and the creation of indebtedness which they have no means of paying, it hardly meets the charge to simply say to those whom they owe that they have
nothing with which to pay, without any attempted explanation. 5. SAME-PERSONAL LIABILITY-UNWARRANTED EXPENDITURES.
Receivers appointed merely to carry on the business of a corporation and keep it going concern at suit of creditors will be charged with personal liability for money paid out in satisfaction of debts of the company, hav.
ing no relation to the conduct of the business, although such payments, were authorized by the court on their ex parte application, where their representations that they were in funds to make the payments without detriment to the business were untrue, and they were in fact conducting the business at a loss, and contracting indebtedness which they had no means of paying.
(Ed. Note.-For cases in point, see Cent. Dig. vol. 42, Receivers, & 201.). & SAME-MISMANAGEMENT.
Receivers appointed to carry on the business of a private manufacturing corporation, who conducted the same for eleven months at a loss, contracting a large indebtedness which they have no means of paying, and who failed to keep cost sheets which would have shown the condition of the business and as were kept by like concerns, will be charged with personal liability for so much of such indebtedness as might have been prevented by
of [Ed. Note.-For cases in point, see Cent. Dig. vol. 42, Receivers, $ 169.) 1. SAME-PREFERENCES TO CREDITORS.
It is the duty of receivers on ascertaining that the business of the receivership is being conducted at a loss to make no payments to its creditors except pro rata, and for preferences given after that time they will be held personally accountable to other creditors.
[Ed. Note.-For cases in point, see Cent. Dig. Fol. 42, Receivers, 88 312, 169, 183.] On Exceptions to Report of Master, Passing Upon the Accounts of Abram Hess and J. Lansing Mines, Receivers.
L. L. Smith (Howard C. Shirk, with him), for exceptions.
ARCHBALD, District Judge. The receivers, whose accounts are in controversy, were appointed upon a bill filed December 2, 1902, by the general creditors of the Lebanon Iron & Steel Company, the appointment being secured upon the representation that the company was doing an extensive and profitable business, and that the value of its property largely exceeded the bonded and other indebtedness against it, all of which could be saved to the unsecured creditors and stockholders by proper management, under the direction of the court, but would otherwise be speedily foreclosed and sacrificed. Notwithstanding the views which were so expressed, the outlook, when carefuliy considered, was not altogether a promising one. The authorized bond issue of the company was $200,000, of which only $61,000 had been placed outright, the balance ($139,000) having been pledged to secure loans of $41,000, and the floating indebtedness being $163,000 beyond that; and, far from the expectations with regard to the receivership being realized, it has only ended in piling up additional obligations, which the receivers have practically nothing to satisfy. Starting out with available assets of some $10,000 ($8,982.72 of accounts receivable and $30,845 of personal property and materials), they are compelled to confess an indebtedness of their own contracting of over $32,000, to say nothing of an increase of secured loans of $2,000—$13,000 in place of $11,000 at the time of their appointment. To meet this they have only some $7,300 cash in hand and collectible accounts, together with possibly $4,516 of personal property with which they should be credited, making a net loss, as the result of 11 months' operations, of fully $60,000. This showing is somewhat relieved by payments which were made by