*240

Company, when they replied to the inquiry made to them as to price, etc., understood that the contract proposed was on behalf of the United States, we think is deducible from their reply. Besides, the subsequent correspondence and dealings which we shall hereafter consider in determining whether the paper was delivered under the contract prior to the happening of the damage, we think will serve to make clear the fact that both parties deemed the contract was one made in the name of and for account of the United States. Especially is this so when it is borne in mind that the findings, either directly or by necessary implication, establish that in October, 1901, soon after the goods were shipped, a bill for the amount of the total purchase price, including the freight to Manila, was rendered by Andrews & Company to the Division of Insular Affairs, and there is nothing in the findings warranting even an implication that that division made any objection upon the ground that the bill should have been made out against the Philippine government as the purchaser, and have been transmitted to that government for payment. Yet further, is is apparent from the letter written by the division to Andrews & Company, after it was learned that the paper had been damaged or lost, that the Division of Insular Affairs was solicitous, not because a bill had been mistakenly rendered, but as to whether the loss should fall upon the United States or upon Andrews & Company.

The statement in the proposal of the Division of Insular Affairs of August 17, 1901, by which the negotiation was commenced, "F. O. B. Manila," might give rise, if standing alone, to the implication that it was intended that the goods should be delivered at the cost of the seller at Manila. But the further statement in the letter, that the freight from New York to Manila was to be a part of the purchase price, and to be paid as such by the purchaser, rebuts the implication that the words "F. O. B. Manila" were understood as implying that the amount of the freight charges for the shipment of the goods to Manila should be at the cost of the seller. These words not therefore having been used in their ordinary commercial sense, their meaning must be sought in the context of the proposal in which they are found. Considering that context, it would seem most reasonable to conclude that the words implied that, as the government desired the freight to Manila to be included in the purchase price, the freight therefore to Manila was to be primarily defrayed by the seller. That this was the understanding of Andrews & Company we think results from their reply, in which no reference whatever 2. That, as a general rule, the delivery of was made to the F. O. B. Manila clause, but goods by a consignor to a common carrier, a willingness was expressed to furnish the for account of a consignee, has effect as de- paper at a price to be fixed by the price paid livery to such consignee, is elementary. That by the government in Washington for like where a purchaser of goods directs their de- paper, with the addition of the freight rate livery for his account to a designated car- to the Philippine Islands, thereby saving the rier, the latter becomes the agent of the pur-seller from bearing the burden of the freight chaser, and delivery to such carrier is a le-to Manila, and at the same time securing to gal delivery to the purchaser, is also beyond question. Certain also is it that when, on the delivery of goods to a carrier, bills of lading are issued for the delivery of the goods to the consignee or his order, the acceptance by the consignee of such bills of lading constitutes a delivery. Of course, the presumption of delivery arising from the application of any or all of these elementary rules would not control in a case where, by contract, it clearly appeared that, despite the shipment, the goods should remain at the risk of the consignor until arrival at the point of ultimate destination. And such in effect is the contention here made on behalf of the government. We come briefly, then, to consider the findings concerning the contract, for the purpose of showing that this contention is without merit.

In considering the matter, it is to be conceded that the contract is not to be deduced

the government the delivery of the paper at Manila without the payment there to the carrier of the cost of the freight as such, since that item would become a part of and be included in the price. It is certain, when the subsequent correspondence is considered, that this construction, which the reply of Andrews & Company put upon the words "F. O. B. Manila," as used in the proposal, was deemed by the Division of Insular Affairs to be the correct one, since that reply was, in the subsequent correspondence, treated by the division as being directly responsive to and an acceptance of the proposal submitted. Moreover, we think the subsequent correspondence, when considered in other aspects, makes certain the conclusion that the words "F. O. B. Manila," as used in the proposal, meant precisely what we have stated the context of the proposal indicated that those words were intended to im

⚫243

contract in question had not been executed because there had been no delivery is disposed of by what we have already said.

As the views which we have expressed concerning the delivery dispose also of many subsidiary contentions based upon isolated provisions of the contract, such as the right to verify the contents of the package at Manila, etc., it follows that the judgment below was right, and it is therefore affirmed.

(207 U. S. 196)

MARY V. CORTELYOU and James G. Cortelyou, Administrators of the Estate of John G. Cortelyou, Deceased; Neostyle Company and Brodrick Copygraph Company of New Jersey, Petitioners,

V.

CHARLES ENEU JOHNSON & COM.

PANY.

Evidence -
sufficiency notice of li-
cense restriction of use of patented
article.

ply. This we think results from the provi- | Sup. Ct. Rep. 47. The contention that the sions of the letter of August 28, selecting a particular firm to whom the goods were to be delivered for transport to Manila, and of all the other directions contained in the letter, since they are inconsistent with the theory that the words "F. O. B. Manila" were used as meaning that the goods should not be delivered as directed, but should remain the property of Andrews & Company, and| be under their control and subject to their risk until delivered at Manila. Especially is it impossible to attribute to the words "F. O. B. Manila," used in the original proposal and reiterated in the letter of August 28, any other meaning than that which we have affixed to them, when the note which was expressly referred to in the letter of August 28, and which was inclosed therein, is considered. By the terms of that note not only were the previous specific directions as to the mode of shipment confirmed, but it was expressly provided that the delivery to the agent selected by the Division of Insular Affairs should be "F. O. B. Jersey City," thus making clear the distinction between Evidence of notice of a license restriction the sense in which the words "F. O. B. Ma- as to the use of ink on a patented stencil nila" were used in the proposal and their duplicating machine, disclosed on the base meaning applied to the final delivery at Jer- board of each machine, is not sufficient sey City in consummation of the contract by because of a sale of its own ink for use to charge a corporation with infringement which the sum of the freight to Manila had on such a machine, where it does not apbeen included in the purchase price. So, pear that it ever solicited an order for ink also, the same implications arise from the to be so used, although it may have filled final instruction, shifting the place of de-a few such orders, or that it was ever noti livery from Jersey City and directing that the merchandise should be delivered to the agent selected, "F. O. B. Brooklyn." We think the contention made in argument, that the letter of August 28 and the acceptance by Andrews & Company of the terms of that letter, should be alone held to constitute the contract, disregarding the note inclosed in the letter as a part thereof, is refuted by its mere statement. In any event, taking the most favorable view possible for the government of the contract, we think it cannot be said that the presumption which arises from the delivery of the goods to the carrier designated by the government, and the acceptance by the government of the bills of lading made to the consignee or his order, is rebutted by the contract.

Lastly, it is urged that, in any event, the court below erred, since the contract in question was not "reduced to writing and signed by the contracting parties with their names at the end thereof," as required by Rev. Stat. 3744, U. S. Comp. Stat. 1901, p. 2510. But it is settled that the invalidity of a contract because of a noncompliance with the section referred to is immaterial after the contract has been performed. St. Louis Hay & Grain Co. v. United States, 191 U. S. 159, 163, 48 L. ed. 130, 132, 24

fied by the manufacturers of the rights which they claimed, or that anything which it did was considered an infringement, and where none of the chief executive officers of the corporation had knowledge of this restriction.

[No. 32.]

Argued October 31 and November 1, 1907.
Decided December 2, 1907.

N WRIT of Certiorari to the United

States Circuit Court of Appeals for the Second Circuit to review a decree which reversed a decree of the Circuit Court for the Southern District of New York for an injunction and an accounting in a patent infringement suit, and remanded the case to the Circuit Court with instructions to dismiss the bill. Affirmed.

See same case below, 76 C. C. A. 455, 145 Fed. 933.

The facts are stated in the opinion.
Messrs. Edmond Wetmore and Samuel
Owen Edmonds for petitioners.
Mr. Francis T. Chambers for respond-
ent.

*Mr. Justice Brewer delivered the opinion of the court:

This is a suit to restrain an alleged in

*198

use or sell the

fringement of a patent granted June 22, | right to manufacture or 1897, for the stencil duplicating machine article, will be upheld by the courts," it is known as the rotary Neostyle. The plain- unnecessary to consider how far a stipulatiffs below, petitioners here, represent the entire interest in the patent. There is no claim of any infringement by using or sell ing the patented machines, but of an indirect infringement in the following manner: For the last few years the rotary Neostyle has been sold subject to this license, which was plainly disclosed on the baseboard of the machine: "License agreement. This machine is sold by the Neostyle Company with the license restriction that it can be used only with stencil paper, ink, and other supplies made by the Neostyle Company, New York city."

The defendant company (which is engaged in the manufacture and sale of ink) is, it is contended, engaged in selling ink to the purchasers of these machines for use thereon; that it is thus inducing a breach of the license contracts, and is responsible as indirectly infringing the patent rights of plaintiffs. The circuit court sustained the contention and entered an interlocutory decree for an injunction and an accounting: 138 Fed. 110. On appeal the circuit court of appeals for the second circuit reversed this decree and remanded the case to the circuit court, with instructions to dismiss

the bill (76 C. C. A. 455, 145 Fed. 933), whereupon the case was brought here on certiorari.

The three judges of the circuit court of appeals concurred in reversing the decree of the circuit court on the ground that the evidence was not sufficient to show that the defendant had notice that the machines for which the ink was ordered had been sold un

der any restrictions, but they differed upon the question whether there was any liability in case sufficient notice of the license agreement had been brought home to the defendant. The majority were of the opinion that the doctrine of contributory infringement, which they conceded to exist, should not be extended beyond those articles which are either parts of a patented combination or device, or which are produced for the sole purpose of being so used, and should not be applied to the staple articles of commerce. In that view of the case, the article supplied being ink, a thing of common use, its sale to a purchaser of the Neostyle machine would be no infringe

ment.

While in E. Bement & Sons v. National Harrow Co. 186 U. S. 70, 46 L. ed. 1058, 22 Sup. Ct. Rep. 747, this court held, in respect to patent rights, that, with few exceptions, "any conditions which are not in their very nature illegal with regard to this kind of property, imposed by the patentee and agreed to by the licensee for the

tion in a contract between the owner of
a patent right and the purchaser from him
of a machine manufactured under that
right, that it should be used only in a cer-
tain way, will sustain an action in favor
of the vendor against the purchaser in case
of a breach of that stipulation.
So, al-
though "if one maliciously interferes in
a contract between two parties, and in-
duces one of them to break that contract
to the injury of the other, the party injured
can maintain an action against the wrong-
doer" (Angle v. Chicago, St. P. M. & Ŏ.
R. Co. 151 U. S. 1, 13, 38 L. ed. 55, 62, 14
Sup. Ct. Rep. 240), it is also unnecessary
to determine whether this states the full
measure of liability resting upon a party
interfering and inducing the breaking of a
contract, for we concur in the views ex-
pressed by all the judges of the court of
appeals, that there is no sufficient evidence
of notice. True, the defendant filled a few
orders for ink to be used on a rotary Neo-
solicited an order for ink to be so used, that
style, but it does not appear that it ever
it was ever notified by the plaintiffs of the
rights which they claimed, or that anything
which it did was considered by them an in-
fringement upon those rights. Further,

The

none of the chief executive officers of the company had knowledge of the special character of the rotary Neostyle machine or the restrictions on the purchase of supplies. The case of the plaintiffs in this respect rests mainly on the testimony of the witness Gerber, who testified that, at the instance of the manager of the Neostyle Com. pany, he wrote to the defendant for a onepound can of black ink for use on the rotary Neostyle, saying: "I will be at my office Friday afternoon, between 1:30 and 3:30, and, if convenient, have your representative call at that time." A salesman of the defendant, named Randall, did call. witness directed Randall's attention to the restrictions on the single machine he had in his office, and asked if he would have any trouble with the Neostyle Company if he used the defendant's ink; Randall replied in the negative, and added that "the ink in question was not patented, that anybody could make or use it; that no trouble would come to me from the use of the ink which he sold." The restriction on the machine shown to Randall was one formerly used by plaintiffs, but which had been discarded prior to this transaction, and for it the present license agreement had been substituted. The restriction shown to Randall stated that the machine was sold "with the express understanding that it is licensed to be used only with stencil paper

661.

and ink (both of which are patented) made | Gauge Railroad Company. The amount of by the Neostyle Company of New York the bonds and the conditions of exchange city." Evidently from his reply Randall's were specified in the act. One hundred and attention was not drawn to the question of fifty thousand dollars of bonds were so exa patent on the ink. Further, he was not changed. Pima county denied its liability an officer or general agent of the defendant on the bonds, refused to pay the interest company, but simply a salesman, and it coupons, and an action was brought thereon, cannot be that this talk with him is notice which finally reached this court. Lewis v. to and binding on his principal in respect to Pima County, 155 U. S. 54, 39 L. ed. 67, 15 Sup. Ct. Rep. 22. The act was held to be in violation of the restrictions imposed upon territorial legislatures by U. S. Rev. Stat. § 1889, as amended by the act of Congress of June 8, 1878, chap. 168 (20 Stat. at L.

all future transactions.

After reviewing all the minor considerations to which our attention has been called by the plaintiffs, we see no sufficient reason for disagreeing with the unanimous opinion of the Circuit Court of Appeals in respect to the matter of notice, and its de101), and the bonds were adjudged void.

cree is affirmed.

(207 U. S. 201)

E. L. VAIL, Phil S. Hughes, and C. F. Richardson, as Supervisors of Pima County, Arizona, Appts.,

Courts

V.

TERRITORY OF ARIZONA.

stare decisis.

lation under which territorial bonds are is

Subsequently, by acts of Congress and the territorial legislature, provision was made for the issue of territorial in exchange for these bonds and for the payment of the principal and interest thereof by the county. The validity of this legislation came before us in Utter v. Franklin, 172 U. S. 416, 43 L. ed. 498, 19 Sup. Ct. Rep. 183, where the different acts are fully stated. We sustained it, and adjudged that it was the duty of the loan commissioners to refund the

Decisions affirming the validity of legis- bonds. In Murphy v. Utter, 186 U. S. 95, sued in exchange for county bonds, and 46 L. ed. 1070, 22 Sup. Ct. Rep. 776, the which provides for the payment of the ruling was reaffirmed, and it was held that principal and interest thereof by the county, neither a change in the personnel of the even if not binding on such county, which loan commission nor an act of the legislawas not nominally a party, should be up-ture of Arizona, abolishing the commission, held as against it on the doctrine of stare decisis after such bonds have gone into the

channels of trade.

[No. 67.]

put an end to the duty of refunding.

The refunding having been made, the territory thereafter called upon Pima county to pay the interest which the territory had paid on the funded bonds. Upon its refusal

Argued November 15, 1907. Decided De- to pay this, application was made to the su

preme court of the territory and it granted a mandamus, and from that decision the appellants have brought the case here. They challenge the validity of the refunding leg islation, while the appellee contends that the matter is res judicata, or, if not, should, upon the doctrine of stare decisis, be regarded as foreclosed. In the two cases, 172 and 186 U. S., in which the validity of the refunding legislation was considered, Pima county was not nominally a party. The actions were brought by the holders of the

Messrs. William C. Prentiss, Horace F. bonds against the loan commission. WhethClark, and E. S. Clark for appellee.

er the county was technically bound by the decisions may be a question. It was heard

*Mr. Justice Brewer delivered the opin- by its attorney in the litigation, and was ion of the court: the party ultimately to be affected by the This was an application by the appellee, refunding. Gunter v. Atlantic Coast Line the territory of Arizona, for a mandamus to R. Co. 200 U. S. 273, 50 L. ed. 477, 26 Sup. corapel the appellants, the supervisors of Ct. Rep. 252. But, if it be not so bound, Pima county, to levy a tax to pay the in-still, under the doctrine of stare decisis, the terest due on certain bonds. The facts are question should no longer be considered an these: In 1883 an act was passed by the open one. The county had full knowledge territorial legislature (Ariz. Laws 1883, p. of the entire litigation, having been a party 61), directing Pima county to exchange its in the first action and been represented by bonds for those of the Arizona Narrow its attorney in the last two. Any defense

•203

*205

certain officers and employees of a carrier charged with violations of the interstate commerce act to produce certain relevant books and papers. Reversed and remanded with directions to dismiss the writ of error to the Circuit Court.

See same case below, 150 Fed. 48.

which could be made to the refunding of | Eastern District of Pennsylvania, requiring the bonds and the validity of the refunding legislation could have been raised in the last cases. This court considered every question that was presented, determined that the legislation was valid, and ordered that the bonds should be refunded. They have been refunded. They have gone into the channels of trade, and now, after many years, for the case of Utter v. Franklin was decided in 1899,-and when it is fair to presume that many have bought, relying upon the conclusiveness of the adjudication by this court, it might work a grievous wrong to overthrow those decisions and hold the bonds void. Stare decisis is a wholesome doctrine. It is not of universal application, and there have been cases where a ruling once made was wisely changed; but when the decision is one affirming the validity of bonds, notes, or bills of a limited amount, the issue of which had been in terms authorized by statute, such decision should generally be held conclusive, even as to those not strictly parties to the litigation; for otherwise, as we have said, much wrong might be done to innocent holders who bought in reliance upon the decision. We are of the opinion that the Supreme Court of Arizona was right, and its judg

ment is affirmed.

(207 U. S. 181)

Statement by Mr. Chief Justice Fuller: The Webster Coal & Coke Company commenced an action at law in the circuit court of the United States for the eastern district of Pennsylvania against the Pennsyl vania Railroad Company, defendant, to recover damages for its alleged violation of the interstate commerce act of February 4, 1887 [24 Stat. at L. 379, chap. 104, U. S. Comp. Stat. 1901, p. 3154], by discrimi nating against plaintiff in the allowance of freight rates on coal and coke. The defendant pleaded not guilty.

In the opinion below it is stated:

"After issue was thus joined, and before the time for the trial of the action, the plaintiff filed in the circuit court a petition in which, after setting forth the nature of the action at law, and declaring that the defendant and Alexander J. Cassatt, presiand ten other specifically-named officers and dent, John B. Thayer, fourth vice president, employees of the defendant, had in their possession or power certain books and papers containing evidence pertinent to

WEBSTER COAL & COKE COMPANY, the issue, there was a prayer for an order requiring the defendant and its said offi. cers and employees to produce said books

Petitioner,

V.

A. J. CASSATT, John B. Thayer, Charles and papers at the trial, and also for inE. Pugh, et al.

Appeal and error-finality of judgment.

An order entered in an action to recover damages from a carrier for violations of the interstate commerce act of February 4, 1887 (24 Stat. at L. 379, chap. 104, U. S. Comp. Stat. 1901, p. 3154), requiring certain specified officers and employees who are not parties to produce relevant books and papers, is not, as to those persons, a final decree within the meaning of the provision of the act of March 3, 1891 (26 Stat. at L. 828, chap. 517, U. S. Comp. Stat. 1901, p. 549), § 6, governing writs of error from circuit courts of appeals to the circuit courts, and hence will not sustain a writ of error sued out by them.

spection by the plaintiff's representatives before trial. The application for the order was based on § 724 of the Revised Statutes (U. S. Comp. Stat. 1901, p. 583), which is as follows:

"In the trial of actions at law, the courts of the United States may, on motion and due notice thereof, require the parties to produce books or writings in their possession or power which contain evidence pertinent to the issue, in cases and under cir cumstances where they might be compelled to produce the same by the ordinary rules of proceeding in chancery. If a plaintiff fails to comply with such order, the court may, on motion, give the like judgment for the defendant as in cases of nonsuit; and, if a defendant fails to comply with such order, the court may, on motion, give judgment against him by default.'

"On presentation of the petition to the circuit court, a rule was allowed requiring the defendant and its officers and employees named in the petition to show cause before the court on a certain day why they 'should not produce on the trial of this cause' the books and writings above referred to; and

182