[Supreme Court of the United States.]

THE HART STEEL COMPANY AND GUILFORD S. WOOD V. THE RAILROAD SUPPLY COMPANY.

1. RES ADJUDICATA.

Decided May 21, 1917.

239 O. G., 654; 244 U. S., 294.

"The doctrine of res judicata is not a mere matter of practice or procedure inherited from a more technical time than ours. It is a rule of fundamental and substantial justice, 'of public policy and of private peace,' which should be cordially regarded and enforced by the courts to the end that rights once established by the final judgment of a court of competent jurisdiction shall be recognized by those who are bound by it in every way, wherever the judgment is entitled to respect."

2. SAME

SUITS IN DIFFERENT CIRCUITS-SUBJECT-MATTER THE SAME AND PARTIES IN PRIVITY.

When the identity of the subject-matter and issues of two suits brought in different circuits is admitted and the privity of the defendants is clear and the ruling effect of the decree in one circuit is properly presented to the court of coördinate jurisdiction, Held to be error in the court not to sustain the motion to affirm the decree.

ON WRIT of certiorari to the United States Circuit Court of Appeals for the Seventh Circuit.

Mr. Frank F. Reed, Mr. Francis M. Phelps, Mr. Edward S. Rogers, and Mr. Frederick P. Fish for the petitioners.

Mr. Taylor E. Brown, Mr. C. C. Linthicum, and Mr. Clarence E. Melhope for the respondent.

Mr. Justice CLARKE delivered the opinion of the Court.

This suit is here on certiorari to review the decision of the Circuit Court of Appeals for the Seventh Circuit.

On December 9, 1908, the respondent herein, The Railroad Supply Company, as owner of three United States patents, viz., Nos. 538,809, 691,332 and 721,644, filed a bill in the District Court for the Northern District of Illinois against The Hart Steel Company and Guilford S. Wood, praying that the defendants be restrained from infringing certain designated claims of its patents, which are described in their specifications as covering new and useful improvements in railway-tie plates. This case will be hereinafter referred to as the First Case.

Three months later, on March 26, 1909, the same plaintiff commenced a second suit against The Elyria Iron & Steel Company in the District Court for the Northern District of Ohio, praying for the same relief with respect to the same claims of the same patents as in the First Case.

The two bills differed only as to the parties defendant. The Elyria Iron & Steel Company, the defendant in the Second Case, was a manufacturing corporation and was the owner of all of the capital stock of the Hart Steel Company, the defendant in the First Case, which was the selling agent of the Elyria Company, and Wood was its manager.

The same defenses being relied upon in the two cases, the evidence was taken in the first one, and by stipulation a carbon copy of it was filed in the second, and the same exhibits were used in the two.

The claimed infringement consisted in the manufacture of a single order of tie-plates by the Elyria Company and the sale of them by the Hart Company, with Wood as its manager, to the Atchison, Topeka & Santa Fe Railroad Company.

Such proceedings were had in the First Case that on December 18, 1911, the Circuit Court for the Northern District of Illinois decided that the construction or device sold by the defendants did not infringe the claims of the plaintiff's patents relied upon, and dismissed the bill for want of equity.

In the Second Case such proceedings were had that on March 4, 1912, the District Court for the Northern District of Ohio entered precisely the same decree as was entered in the First Case.

Each case was appealed to the appropriate circuit court of appeals and on April 7, 1914, that court for the sixth circuit, in a carefullyconsidered opinion, found the claims of the patents relied upon void for want of novelty and invention and affirmed the decision of the district court. A petition for rehearing was denied on the 30th day of the following June.

On the 6th day of October, 1914, the first day of the next ensuing term of the Circuit Court of Appeals for the Seventh Circuit, the defendants in the first suit, which was still pending undetermined, filed a motion praying that court to affirm the decree of the circuit court, upon the ground that all of the issues in the case had been fully and finally determined and adjudicated by the Circuit Court of Appeals of the Sixth Circuit in the Second Case between the plaintiff and The Elyria Iron & Steel Company, with which the moving de-. fendants The Hart Steel Company and Guilford S. Wood were in privity. In support of this motion a copy of the record and journal entries in the Second Case was filed which showed that the two records were "identical.”

The record shows that this motion to affirm the decree of the circuit court was argued orally on October 6, 1914, and was on the same day denied, but no reason appears in the record for such denial.

Subsequently the case was argued on its merits and on January 5, 1915, the Circuit Court of Appeals for the Seventh Circuit found the plaintiff's patents valid and infringed and, reversing the decision of

the circuit court (then the district court) remanded the case with an order for an accounting.

The Hart Steel Company and Wood as petitioners in this Court, assign as error the overruling by the Circuit Court of Appeals of the Seventh Circuit of their motion to affirm the decision of the circuit court in their favor.

It is apparent from the foregoing statement that the question presented to the Circuit Court of Appeals of the Seventh Circuit by the petitioner's motion to affirm was whether or not the decree of the Circuit Court of Appeals of the Sixth Circuit was a final determination of the issues presented in the case pending and not yet argued in the Circuit Court of Appeals of the Seventh Circuit so as to be res judicata and binding on that court because of the identity of the subject-matter and the claims and because of the privity of the parties.

The doctrine of res judicata is fully applicable to cases of patent infringement, (Rob. on Pats., sec. 983; Walk. on Pats., sec. 468,) and while the record does not show the grounds upon which the motion to affirm was overruled, it does show that the motion was argued, was considered by the court and denied. If authority be needed to the point that the claim thus made for the effect of the judgment of the Circuit Court of Appeals of the Sixth Circuit was presented properly and in time it may be found in Stout v. Lye, (103 U. S., 66;) Sheldon v. Patterson, (55 Ill., 507;) Howard v. Mitchell, (14 Mass., 241.)

There can be no doubt from the record before us that the Elyria Company owned all of the capital stock of the Hart Company, that the latter company was a mere sales agent of the former, that Wood was the salaried manager of the latter, that both the Hart Company and Wood were agents subject to the control of the Elyria Company and that in selling the tie-plates and as defendants in the litigation they acted wholly under the authority and in the interest of their principal. Identity of interest could not be clearer or closer than it was between the defendants in the two cases they represented precisely the same, single interest, and the Hart Company and Wood as agents of the Elyria Company were obviously and necessarily privies to the judgment rendered against it. (Bank of Kentucky v. Stone, 88 Fed. Rep., 383, affirmed Kentucky Bank Cases, 174 U. S., 408; Emery v. Fowler, 39 Me., 329; Castle v. Noyes, 14 N. Y., 326; Emma, &c., Co. v. Emma & Co. of New York, 7 Fed. Rep., 401.)

With the identity of the subject-matter and issues of the two cases admitted, the privity of parties to them clear, and the question of the ruling effect of the decree of the Circuit Court of Appeals for the Sixth Circuit presented in an appropriate manner to the Circuit

Court of Appeals of the Seventh Circuit, a court of coördinate jurisdiction, we cannot doubt that the latter court fell into error in not sustaining the motion of the petitioners to affirm the decision of the circuit court. The defendants should not have been put to further expense, delay, and trouble after the motion was presented. The question is ruled by Kessler v. Eldred, (C. D., 1907, 696; 128 O. G., 1690; 206 U. S., 285;) Brill v. Washington R. & E. Co., (C. D., 1910, 505; 151 O. G., 196; 215 U. S., 527,) and Russell v. Place, (C. D., 1877, 301; 12 O. G., 53; 94 U. S., 606.)

This doctrine of res judicata is not a mere matter of practice or procedure inherited from a more technical time than ours. It is a rule of fundamental and substantial justice, " of public policy and of private peace," which should be cordially regarded and enforced by the courts to the end that rights once established by the final judgment of a court of competent jurisdiction shall be recognized by those who are bound by it in every way, wherever the judgment is entitled to respect. (Kessler v. Eldred, supra.)

The conclusion which we have reached in the Second Case, (The Railroad Supply Company, petitioner, v. Elyria Iron & Steel Company, respondent, post, 420; 239 O. G., 656; 244 U. S., 285, with respect to the merits of the patents involved in this litigation is such that it leaves our decision in this case uncomplicated by the one in that.

The decree of the Circuit Court of Appeals is reversed.

Mr. Justice DAY did not take any part in the decision of this case.

[Supreme Court of the United States.]

THE RAILROAD SUPPLY COMPANY, Petitioner, v. THE ELYRIA IRON AND STEEL Co.

Decided May 21, 1917.

239 O. G., 656; 244 U. S., 285.

1. PATENTS-INVENTION-RAILROAD-TIE PLATES.

The Wolhaupter patents, Nos. 538,809, 691,332, and 721,644, reviewd in connection with the prior art and Held to be wanting in patentable invention thereover.

2. PATENTABILITY-INVENTION-CHANGE IN FORM.

The patents in suit give a somewhat different form to features which are perfectly familiar in the prior art and similarly grouped in prior patents, but without giving them any new function or accomplishing any new result. Held this is a mere carrying forward of the original thought and does not constitute patentable invention.

ON WRIT of certiorari to the United States Circuit Court of Appeals for the Sixth Circuit.

Mr. Taylor E. Brown, Mr. C. C. Linthicum, and Mr. Clarence E. Melhope for the petitioner.

Mr. Frank F. Reed, Mr. Edward S. Rogers, and Mr. Frederick P. Fish for the respondent.

Mr. Justice CLARKE delivered the opinion of the court.

On March 26, 1909, The Railroad Supply Company, petitioner, commenced this suit against The Elyria Iron & Steel Company in the Circuit (now District) Court for the Northern District of Ohio, claiming infringement, of claim No. 8 of United States Letters Patent No. 538,809, granted May 7, 1895, of claims No. 1, 2, and 3 of Patent No. 691,332, granted January 14, 1902, and of claims No. 7 and 9 of Patent No. 721,644, granted February 24, 1903. All of these patents granted to B. Wolhaupter were acquired by the petitioner, and each of the three purported to describe a new and useful improvement in railroad-tie plates.

Such proceedings were had in the case that on March 4, 1912, the district court decided that the petitioner's patents were not infringed by the device manufactured and sold by the defendant.

On appeal to the Circuit Court of Appeals for the Sixth Circuit, that court on April 7, 1912, affirmed the decree of the district court dismissing the bill, and held in its opinion that the claims of the patents relied upon were void for want of patentable novelty. This decree is now here for review on certiorari.

A railroad-tie plate, sometimes called a "wear-plate," is a rectangular piece of metal, originally with both surfaces flat, designed to be placed upon the tie immediately under the rail, for the purpose of protecting the tie from the wear, which in soft wood is very great, incident to the vibration of the rail caused by passing engines and trains and for the purpose of holding the rail more firmly in place than it could otherwise be held by the spikes without the plate, thereby preserving the gage of the track.

In the early days of railroading when engines and cars were small and light, when speed was comparatively slow, and when hardwood, which held the spikes firmly in place, was abundant and cheap, such plates were little used; but the increase in weight of rails and rollingstock, the higher speed of trains, and the necessary use of the cheaper soft woods for ties have brought them into extensive use. The general use of these plates with heavy rolling-stock and traffic presented the problem of making them as strong and inexpensive as possible and in a form such that they would adhere firmly to the ties while doing the least possible damage to the fiber of the wood.