Sidor som bilder


(198 U. S. 280) state court, the averments would not have | FIRST NATIONAL BANK OF CHICAGO, brought it within $ 709 of the Revised Stat- H. W. Rogers and James C. Rogers, as H. utes (U. S. Comp. Stat. 1901, p. 575). If it W. Rogers & Brother, Petitioners, had been a direct appeal from the circuit court under § 5 of the act of March 3, 1891 CHICAGO TITLE & TRUST COMPANY, [26 Stat. at L. 827, chap. 517, U. S. Comp. Trustee of Alexander Rodgers, Bankrupt, Stat. 1901, p. 549], it could not have been

The National Storage Company, James A. sustained, because the construction or ap

Patten, Frank E. Winans, and E. W. plication of the Constitution of the United

Bailey & Company. States was not distinctly presented for decision in the court below.

Courts-jurisdiction of court of bankruptcy And as an appeal from the circuit court to determine adverse claim-consent-apof appeals under $ 6 of the act of 1891, it peal to circuit court of appeals. cannot be sustained because it falls within the settled rule that: “Where the jurisdic-1. The failure of adverse claimants to abandon tion of the circuit court is invoked on the their claims to property not in the posses. ground of diverse citizenship, it will not be

sion of the receiver in bankruptcy, after their

objections to the jurisdiction of a court of held to rest also on the ground that the

bankruptcy to act on the receiver's petition suit arose under the Constitution of the for directions respecting a sale have been United States, unless it really and substan- overruled, does not amount to a waiver of

their objections, or a consent to an exercise tially involves a dispute or controversy as

of this jurisdiction. to the effect or construction of the Consti

2. A court of bankruptcy, after adjudging, in tution, upon the determination of which

a proceeding begun by the receiver's petition the result depends, and which appears on for directions respecting a sale, that the rethe record by a statement in legal and logi- ceiver was not in possession of the property, cal form, such as good pleading requires;

has no jurisdiction to decree the sale, and

determine the rights of adverse claimants to and where the case is not brought within

the proceeds. this rule the decree of the circuit court of 3. No appeal lies from a decree of a court of appeals is final." Arbuckle v. Blackburn,

bankruptcy in a proceeding begun by the re191 U. S. 405, 48 L. ed. 239, 24 Sup. Ct. ceiver's petition for directions respecting a Rep. 148; Western U. Teleg. Co. v. Ann Ar

sale, by which the question of his possession

of the property was decided, a sale decreed, bor R. Co. 178 U. S. 238, 44 L. ed. 1.052, 20

and the rights of adverse claimants deterSup. Ct. Rep. 867.

mined, since this is a proceeding in bankIf the allegation of diversity of citizen- ruptcy, and not an independent suit, and can ship had been omitted from the bill, the

only be reviewed by the circuit court of ap

peals by the revision in matter of law aujurisdiction could not have been main

thorized under the bankrupt act of July 1, tained.

1898 (30 Stat. at L. 553, chap. 541, U. S. The decisions of the courts below did not Comp. Stat. 1901, p. 3432), § 246, "on due

notice and petition." turn on any Federal question. The circuit court held that Hanley had no title to the one-third interest because the Idaho stat

[No. 139.] ute relating to probate sales had not been

Argued January 19, 20, 1905. Decided May complied with; the court of appeals, that

15, 1905. Hanley was not entitled to the aid of a court of equity in respect of that interest, because of his conduct at the time of the ONS WRIT of Certiorari to the United

States Circuit Court of Appeals for the transaction.

Seventh Circuit to review a decree which Appellants succeeded in their defense as reversed, on appeal, a decree of the District to the one-third interest, and Hanley_ac- Court for the Northern District of Illinois, cepted the result on the second appeal. They by which rights of adverse claimants to the now make a grievance of their own success, proceeds of a sale, in proceedings begun by and ask that the supposed constitutional the receiver's petition for directions respectquestion as to the third interest only being such sale, were determined after adjudgmade the basis of jurisdiction here, al- ing that the receiver was not in the possesthough, if the decree disposed of any such sion of the property. Reversed with direcquestion, it was in their favor. In our opin- tions to dismiss the appeal and remand the ion this cannot be permitted. Anglo-Ameri- cause to the District Court for the modificacan Provision Co. v. Davis Provision Co. tion of its decree by directing that the re191 U. S. 376, 48 L. ed. 227, 24 Sup. Ct. turn of the proceeds of sale should be withRep. 92; Lampasas v. Bell, 180 U. S. 276, out prejudice. 45 L. ed. 527, 21 Sup. Ct. Rep. 268.

See same case below, 60 C. C. A. 567, 125 Appeal dismissed.

Fed. 169.

Statement by Mr. Chief Justice Fuller: and said petitioners, at the time said RodThe petition for certiorari represented: gers was adjudged a bankrupt, held and

“1. That for some years prior to the 10th still hold said warehouse receipts as secuday of May, 1901, Alexander Rodgers was a rity for said loans respectively. wholesale dealer in seeds in the city of Chi- “3. That on the 13th day of May, 1901, cago, Illinois, and that on said day he was said Chicago Title & Trust Company, as said adjudged a bankrupt by the district court receiver, filed in said district court a petiof the United States for the northern dis- tion reciting that it had taken possession of trict of Illinois, and the Chicago Title & the seed mentioned in said warehouse reTrust Company, respondent herein, was duly ceipts, and asking the court's directions in appointed receiver, and subsequently trus- respect to a sale thereof. That to said petitee, of the estate of said bankrupt.

tion each of these petitioners filed a special “2. That the National Storage Company, appearance, specially objecting to the jurisrespondent, is a corporation organized un- diction of said district court over said seed, der the laws of Illinois to do, and is en- and such petitioner, as, did also said Nagaged in doing, a warehousing business in tional Storage Company. That thereupon the state of Illinois and elsewhere. That the court referred said petition to a referee some months prior to said 10th day of May, to take proof and report his conclusions; ; said storage company issued to said Alexan- that the referee took proof and reported der Rodgers sundry warehouse receipts that the seed covered by said warehouse rewhich were similar except as to the quanti- ceipts was, at the time of the adjudication ties and dates; one of which said receipts in bankruptcy, in the possession of said is in the words and figures following: storage company, that the district court was

without jurisdiction, and recommending a 66'Warrant No. 8401. Lot No. 1.

dismissal of said petition. “ 'The National Storage Company, office

“That subsequently exceptions to said re217 First National Bank Building, Chicago, port were heard by said district court, and hereby acknowledges to have received two it confirmed the referee's finding as to poshundred and fifty (250) bags timothy seed, session, but overruled his finding as to jusaid to weigh 31,751 pounds, contained in risdiction, and held it had jurisdiction, and div. B. sec. 1, fifth floor, at its warehouse ordered (the petitioner First National Bank premises No. 281, located at 220-230 John-consenting) that said seed be sold and the son street, Chicago, Illinois, and will sur- proceeds thereof be deposited with said First render the same to the order hereon of Alex- National Bank, subject to the further order ander Rodgers upon payment of charges and of said court; that said seed was sold, and delivery of this warrant, at its office in Chi-| the amount realized therefrom was in excago, duly indorsed.

cess of the amounts of petitioners' said “ 'It is agreed that this company is not claims, and this money is still in the hands responsible for loss or damage to property of the petitioner the First National Bank. occasioned by fire, water, leakage, vermin, "That said petitioners thereupon severalratage, shrinkage, accidental or providentially filed petitions in said court, asking paycauses, riot or insurrection, frost or changement of their said claims out of said proof weather, or from being perishable while ceeds. That said Chicago Title & Trust in storage, and that this company shall, in Company, as trustee, and the respondents the custody of the above property, be the James A. Patten, and E. W. Bailey & Comagent of the holder of this warrant.

pany, as creditors, answered said petitions, “ 'Storage and charges as per contract on denying the right of your petitioners to said file with this company.

fund; and thereupon said petitions were re“ 'Chicago, Aug. 31, 1900.'

ferred to said referee to take additional “[Signed by the National Storage Com- proof and report the same to the court, and pany by its president and treasurer, and the the said matter again coming before the corporate seal affixed.]

court upon the report of said referee and ex

ceptions thereto, said petitions of your peti“That immediately thereafter said Rod- tioners were consolidated, and the court congers indorsed and hypothecated thirteen of firmed said report of said referee, except so said receipts to your petitioner the First far as it found a lack of jurisdiction in said National Bank of Chicago, to secure loans district court, and adjudged that said dismade by it to him aggregating about $12, trict court had jurisdiction; that said de000, and indorsed and hypothecated five of cree also found that said storage company said receipts to your petitioner, H. W. Rog- was, at the time of the filing of the bankrupters & Brother, to secure a loan by them to cy petition herein, in the possession of, and him of $5,000, and that said loans are still entitled to the possession of, said seed, and unpaid and due to petitioners respectively, 'decreed that petitioner First National Bank


retain out of said proceeds the sum of $9,- | rari was granted, and thereafter a motion to 854.15 on account of its claim, and pay quash the writ was filed on the ground that therefrom to petitioners H. W. Rogers & the matters involved and determined in the Brother $5,000.

cause were controversies arising in bank“That thereupon said Chicago Title & ruptcy proceedings, as distinguished from Trust Company, as trustee, and said James proceddings in bankruptcy, and that the A. Patten, severally perfected appeals from remedy was by error or appeal rather than said order or decree to the circuit court of by certiorari. Consideration of this moappeals of the seventh circuit.

tion was postponed to the hearing on the “That thereafter said two appeals were merits. duly filed in said circuit court of appeals, The case in the circuit court of appeals and were there, by order of court, consoli- is reported 60 C. C. A. 567, 125 Fed. 169. dated and heard as one case. "That said circuit court of appeals there

Messrs. Henry S. Robbins, Wallace after filed its opinion in said consolidated Hecloman, and James G. Elsdon for petitioncauses, reviewing the question of fact whether the storage company was in possession of Messrs. Joseph E. Paden, Newton said seed at the time of the proceedings in Wyeth, James H. Reed, James H. Beal, bankruptcy, and held that said district and Reed, Smith, Shaw, & Beal for respondcourt had erred in deciding this question of ents. fact, and overruled said district court upon said question of fact, and decided that said

Mr. Chief Justice Fuller delivered the storage company was not in possession of

opinion of the court: said seed, and remanded said cause, with

In the view we take of the case, the petidirections to enter a decree for said trustee. tion for certiorari sufficiently discloses the "That thereafter these petitioners filed a

facts. If the proceeding in the district petition for rehearing in said cause, which court was a proceeding in bankruptcy, and was subsequently denied.

not an independent suit, no appeal lay to “That your petitioners are advised by the circuit court of appeals, and the juriscounsel that there existed in law no right. diction of that court was confined to reviof appeal by said trustee or said Patten sion in matter of law “on due notice and from said order of said district court, and petition” under clause b of $ 24. that, if said alleged attempts to appeal

The distinction between steps in bank. should be treated strictly as appeals, said

ruptcy proceedings proper and controversies circuit court of appeals was without juris- arising out of the settlement of the estates diction of the subject-matter, and its said of bankrupts is recognized in $$ 23, 24, and order reversing said decree of the district 25 of the present act, and the provisions as court was null and void.

to revision in matter of law and appeals "That your petitioners are also advised

were framed and must be construed in view by counsel that, if said appeals rightly of that distinction. Holden v. Stratton, 191 could be, and were, treated by said circuit U. S. 115, 48 L. ed. 116, 24 Sup. Ct. Rep. court of appeals as, in effect, petitions for 45; First Nat. Bank v. Klug, 186 U. S. 202, , revision, said circuit court of appeals, by | 46 L. ed. 1127, 22 Sup. Ct. Rep. 899; Elliott the express terms of the bankruptcy stat

v. Toeppner, 187 U. S. 327, 333, 334, 47 L. ute, was limited in its jurisdiction to a revi- | ed. 200, 203, 23 Sup. Ct. Rep. 133. sion of the decision of the district court in

This distinction existed under the prior matter of law, and that said circuit court of bankruptcy law, and the then decisions in appeals, in reversing said district court up respect of a proceeding in bankruptcy and on the said question of fact, proceeded with

an independent suit are applicable. It was out jurisdiction, and in violation of the said settled that the bankruptcy court was withstatute."

out jurisdiction to determine adverse claims The granting of the writ was objected to, to property not in the possession of the asand it was stated that Alexander Rodgers, signee in bankruptcy, by summary proceedthe bankrupt, filed his petition in bankrupt- ings, whether absolute title or only a lien cy May 8, 1901; that the Chicago Title &

was asserted. Smith v. Mason, 14 Wall. Trust Company was appointed receiver the 419, 20 L. ed. 748; Marshall v. Knox, 16 same day; and that the bankrupt turned Wall. 551, 21 L. ed. 481; Re Bonesteel, 7 over his property, including the seed in dis-Blatchf. 175, Fed. Cas. No. 1,627, Mr. Juspute, to the receiver. And it was insisted tice Nelson; Knight v. Cheney, 5 Nat. that the proceeding was a plenary suit, to Bankr. Reg. 305, Fed. Cas. No. 7,883, Mr. the institution of which, in the district Justice Clifford; Re Ballou, 4 Ben. 135, Fed. court sitting in bankruptcy, the petitioners, Cas. No. 818, Mr. Justice Blatchford, then as adverse parties, had consented. Certio- district judge; Re Marter, 12 Nat. Bankr.

Reg. 185, Fed. Cas. No. 9,143, Mr. Justice “The proceeding was purely summary.
Brown, then district judge.

The present act was plainly framed in "The question is whether the district
recognition of the principle of these cases. court had jurisdiction to finally adjudicate
Subdivision 7 of § 2 confers jurisdiction on the merits in this proceeding
the district courts as courts of bankruptcy "In many cases jurisdiction may depend
to "cause the estates of bankrupts to be col- on the ascertainment of facts involving the
lected, reduced to money, and distributed, merits, and in that sense the court exercises
and determine controversies in relation jurisdiction in disposing of the preliminary
thereto, except as herein otherwise provid- inquiry, although the result may be that it
ed;" and we held in Bardes v. First Nat. finds that it cannot go farther. And where,
Bank, 178 U. S. 524, 44 L. ed. 1175, 20 Sup. in a case like that before us, the court erro-
Ct. Rep. 1000, that this exception referred neously retains jurisdiction to adjudicate
to clause b of g 23 of the act, which pro- the merits, its action can be corrected on re-
vides: “Suits by the trustee shall only be view.
brought or prosecuted in the courts where “We are of opinion that even if Comingor
the bankrupt whose estate is being adminis- could have conserted to be pursued in this
tered by such trustee might have brought or manner, he did not so consent. He was
prosecuted them if proceedings in bankrupt- ruled to show cause, and the cause he
cy had not been instituted, unless by con- showed defeated jurisdiction over the sub-
sent of the proposed defendant." [30 Stat. ject-matter,—that is, jurisdiction to proceed
at L. pp. 546, 552, chap. 541, U. S. Comp. summarily. He did not come in volunta-
Stat. 1901, pp. 3422, 3431.] And that the rily, but in obedience to peremptory orders; ;
district courts had no jurisdiction of such and although he participated in the proceed-
plenary suit without consent.

ings before the referee, he had pleaded his Petitioners asserted this express statu-claims in the outset, and he made his formal tory limitation on jurisdiction, and objected protest to the exercise of jurisdiction before that the district court could not proceed, the final order was entered." but their objections were overruled. That And since, as elaborately expounded in they then did not abandon their claims did Bardes v. First Nat. Bank, the district not amount to a waiver of their objections court had no jurisdiction of an independent or to a consent to an exercise of jurisdic-suit, it follows that the proceeding in that tion against which they protested. Louis-court could not be held to have been such, ville Trust Co. v. Comingor, 184 U. S. 18, as, indeed, in form, on reason, and on au46 L. ed. 413, 22 Sup. Ct. Rep. 293. In that thority, it manifestly was not. But, nevercase, to a rule entered in the bankruptcy theless, the district court had jurisdiction court, requiring an adverse claimant in pos- to determine whether it could or could not session of a fund to pay it to the trustee in proceed further. Louisville Trust Co. v. bankruptcy, the claimant tendered a formal Comingor, 184 U. S. 18, 46 L. ed. 413, 22 response, denying jurisdiction, which the Sup. Ct. Rep. 293; Mueller v. Nugent, 184 court refused to entertain, and he then par-U. S. 1, 46 L. ed. 405, 22 Sup. Ct. Rep. 269; ticipated in a hearing upon the merits. The Schweer v. Brown, 195 U. S. 171, ante, 15, bankruptcy court sustained its jurisdiction 25 Sup. Ct. Rep. 15. upon the ground that, by his "acquiescence In the present case, the receiver filed a pein that mode of procedure,” he had assented tition reciting that he had taken possession to its jurisdiction. Upon petition for re

Upon petition for re- of the property. This was denied. The disview the circuit court of appeals reversed trict court adjudged that the receiver had the bankruptcy court, and this court, upon not, at the time of filing its petition, the certiorari, affirmed the circuit court of ap- right of possession, and that the National peals. We said:

Storage Company, at that date, and also at “This brought the controversy within the the time of the filing of the petition in bankruling in Bardes v. First Nat. Bank, 178 U. ruptcy, was entitled to possession and had S. 524, 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000, possession. Nevertheless it retained jurisand the questions attempted to be litigated diction and decreed payment to petitioners before the referee and in the district court out of the proceeds of the sale. as to the allowance of the two amounts The sale in the circumstances did not could only be raised in the district court by change the situation. The proceeds stood consent, and then only by plenary suit. If in place of the property, and the order rethe jurisdiction of the district court was not turning the proceeds was equivalent to an consented to, then the state court, under the order returning the property. This it was circumstances of this case, was the proper proper to do, whether the court had held forum, and the matters in dispute were to that it lacked jurisdiction, or ruled in fabe disposed of there.

vor of petitioners on the merits. The court

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of appeals sustained the jurisdiction of the Argued March 17, 1905. Decided May 15, district court upon the ground that it had

1905. acquired a fund, and had jurisdiction to dis

N pose of it; but we do not think that a court OMS WRIT: Pof Certiorari to the United

States Circuit of bidden by statute. And, in any view, the Third Circuit to review a decree which reproceeding was a proceeding in bankruptcy. versed a decree of the Circuit Court for the Being such, an appeal from the decree of District of New Jersey, enjoining an alleged the district court, under § 25a, did not lie, infringement of a patent for an improveand parties aggrieved could only invoke the ment upon machines for plucking furs, and supervisory power under § 246. Holden v. remanded the cause to the Circuit Court Stratton, 191 U. S. 115, 48 L. ed. 116, 24 with directions to dismiss the bill. AfSup. Ct. Rep. 45; Hutchinson v. Otis, 190 firmed. U. S. 552, 47 L. ed. 1179, 23 Sup. Ct. Rep.

See same case below, 59 C. C. A, 357, 123 778.

Fed. 869. But this was an appeal, and not a peti

The facts are stated in the opinion. tion for revision, and hence it was that the

Messrs. Louis C. Raegener and John circuit court of appeals reviewed the ques. W. Griggs for petitioners. tions of fact, and declined to accept the

Mr. Henry Schreiter for respondents. findings of the referee and the district court. In the exercise of supervisory power, it

Mr. Justice Day delivered the opinion of would have been confined to matter of law. the court: We are clear that an appeal would not lie,

This action was begun in the circuit court and the decrees of the circuit court of ap- of the United States for the district of peals must be reversed, with a direction to New Jersey for the purpose of enjoining the dismiss the appeals, and remand the cause alleged infringement of certain letters patto the district court for further proceed- ent of the United States, issued to John W. ings in conformity with this opinion.

Sutton, and bearing date of May 28, 1888, In our view the district court should have number 383,258, for a certain new and usedeclined, upon its findings, to retain juris

ful invention or improvement upon machines diction; and in that event the decrees for

for plucking furs. the return of the money should have been

In the circuit court a decree was rendered without prejudice to the right of respond- granting an injunction (120 Fed. 672); upents to litigate in a proper court, which on appeal to the circuit court of appeals modification we direct to be made.

for the third circuit this judgment was reOrdered accordingly.

versed, and the cause was remanded to the circuit court with directions to dismiss the

bill. 59 C. C. A. 357, 123 Fed. 869. (198 U. S. 399)

The case was brought here upon writ of CIMIOTTI UNHAIRING COMPANY and certiorari to review the judgment of the John W. Sutton, Petitioners, circuit court of appeals.

The patent in controversy has been freAMERICAN FUR REFINING COMPANY quently sustained in the Federal courts (95 and Max Mischke.

Fed. 474; 108 Fed. 82; 53 C. C. A. 2301,

115 Fed. 498; and 53 C. C. A. 161, 115 Patents infringement of combination Fed. 507), and its validity is not contested

claim-mechanical departure-nonuse of here. The question presented to us is one essential element.

of infringement. The invention which is 1. No infringement of the combination claim in the subject-matter of the controversy relates

the Sutton patent, No. 383,258, for an im- to machinery for unhairing pelts, and parprovement upon machines for plucking furs, ticularly, and perhaps, exclusively, so far results from the use of a machine which, in as practical use is concerned, sealskins or lieu of the "fixed stretcher bar” made a dis- coney” skins.

The latter are skins of tinct feature of the claim, substitutes a movaable one, operated by an entirely different French or Belgian rabbits, which, under the

, mechanism, capable of accomplishing a much name of “electric” sealskins, have been put

larger amount of work within a given time.* upon the market, and have been largely sold 2. A machine which has no mechanical equiv- and used as substitutes for the genuine seal

alent of the stationary toothed card above the skin. It is said that only an expert can stretcher bar, which is made an essential part tell the difference between the finished coney of the mechanism described by the combination claim of the Sutton patent, No. 383,258,

and the genuine sealskin. for an improvement upon machines for pluck

It is disclosed in the testimony that seal. ing furs, does not infringe such claim.

skins, before they are fit for the market, are

required to be submitted to a process by [No. 192.]

which the long hairs, sometimes called "wa


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•Ed. Note.-For cases in point, see vol. 38, Cent. Dig. Patents, $$ 371, 383.

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