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such a request should come from the district judge and not from the party." Thereupon this motion was formally made.

As I understand, when the District Court has decided an equity cause and entered a decree in accordance with its decision, and an appeal therefrom is taken to the Circuit Court of Appeals, and the record is made up and transmitted to that court and filed therein, the District Court loses jurisdiction in the case for the time being, as jurisdicion of the cause has then been transferred to the Circuit Court of Appeals. After the Circuit Court of Appeals has heard the appeal and decided the case, and sent down its mandate to the District Court in accordance with its decision, it becomes the duty of the District Court to enter a decree or judgment as the case may be in accordance with the direction of the Circuit Court of Appeals and in compliance therewith. It then resumes jurisdiction of the case for that purpose. To that end, on the coming in of the report of the special master on the accounting, its jurisdiction, not to change its decision affirmed, as in this case, by the Circuit Court of Appeals, but to enter a final decree is reinstated. In this cause this court has obeyed the instructions and mandate of the Circuit Court of Appeals and has made the judgment of that court the judgment of this the District Court. The District Court has the right in its discretion, I assume, to request the Circuit Court of Appeals to make an order permitting it to open and vacate its judgment or decree made in obedience to and in compliance with the mandate of the Circuit Court of Appeals, and also requesting the Circuit Court of Appeals to recall its mandate and vacate it and return the record to the District Court, if that be necessary, and it seems to me that it is necessary, to the end that the District Court may be at liberty to reopen the trial and hearing of the case, and receive newly discovered or additional evidence, and make a new and a different decision, if such new evidence warrants such action. All that this court can now do is to address such a request to the Circuit Court of Appeals, on being satisfied that such course will bring about a full consideration of the case and a more just decision.

The defendant in this case sells the cars containing the alleged infringing device made by the Reo Company of Michigan. This is the alleged infringement complained of. The Reo Company of New York sells the same device, and that was the infringement complained of in that suit. It would be unfortunate, I think, at least confusing, to have a decision and final decree in this suit holding the claims of the patent valid and infringed by the device in question, and another final decree in the suit tried before Judge Hazel, holding the patent either invalid or not infringed by the same device. The Barber patent and the claims in issue, especially the one finally in issue before Judge Hazel, are either valid or invalid and the device complained of made by the Reo Company of Michigan either infringes or it does not infringe and all suits involving those particular questions or the particular question of infringement ought to be in accord. This court ought not to have such pride of opinion that it is not willing, if leave is granted, to open its decree heretofore made and admit the patents

referred to, alleged prior art, and reconsider the case, and then make such decree as it thinks the facts and the law warrant and demand.

It is contended by the defendant in this suit, Otis Motor Sales Company, that this court should make the request referred to of the Circuit Court of Appeals and in so doing indicate its purpose to reopen the case and receive the alleged newly discovered and the additional evidence and reconsider the case, without the imposition of terms and without imposing as a condition the payment of counsel fees, etc., for the labor expended already in the trial of this cause and on appeal to the Circuit Court of Appeals on the record heretofore made. This contention may as well be disposed of in the very beginning.

When this suit was instituted in May, 1915, it was the duty of the defendant to carefully, systematically, and thoroughly examine the prior art as disclosed by the records in the Patent Office and otherwise and elsewhere. All or substantially all of the patents now offered and proposed to be introduced on a rehearing or retrial of this cause are in, and then were in, the United States Patent Office, and were discoverable and obtainable. There is no claim that they were hidden or concealed or in any out of the way place or places. Just why they were not then discovered does not satisfactorily appear. They were not pleaded, and were not introduced in evidence in this cause, nor in any cause, until the trial before Judge Hazel in the case against the Reo Motor Car Company of New York, Incorporated. The complainant here contends that for this reason, or these reasons, these patents do not constitute newly discovered evidence, and that the proposed action on the part of this court ought not to be taken because of the laches of the defendant in this suit in not discovering and presenting such patents. Ordinarily, and in ordinary actions at law, such would be the conclusion. The evidence was in existence, and where it ought to be, and where it naturally would be, and where all searchwould look for it. If the search had been sufficiently thorough and exhaustive, these patents would have been discovered. But they were not discovered.

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I am not satisfied that this application ought to be denied, on the ground that the defendant in this suit failed to discover and present these patents, provided it is willing to pay to the complainant or

his attorneys the expense the complainant has been put to in the trial of this case and on appeal to the Circuit Court of Appeals with the record in its present condition. The complainant here employed counsel at great expense, subpoenaed witnesses, and attended court on the trial and final hearing, and also employed counsel on the appeal to the Circuit Court of Appeals, and proceeded all the way through without knowledge of the defense, or claim of defense, now sought to be introduced into the case. To reopen this case, and allow the introduction of these patents at this stage, without imposing what may seem to be harsh terms on the defendant, would be grossly unjust to the complainant. After a careful examination of the record, and the proceedings heretofore had in the Circuit Court of Appeals, and the decision of Judge Hazel, and the patents sought to be introduced on a rehearing of this case, I am of opinion that the ends of justice

will be best served by making the request to and asking the permission of the Circuit Court of Appeals referred to, to the end that the cause may be reopened, and these patents and other evidence introduced into the case, on condition that the defendant pay to the special master his fees and expenses, which fees are fixed at $25 per day, and the further sum of $3,000 counsel fees and expenses of counsel on the trial and final hearing of this case and the hearing in the Circuit Court of Appeals heretofore had, and in attendance before the special master on the accounting. There is no hardship to the defendant in the imposition of this condition, for the reason that the manufacturer of these infringing devices, the Reo Motor Car Company of Michigan, is the real defendant here.

If this condition is complied with, within 20 days after the entry of an order in compliance herewith, there will be an order requesting the Circuit Court of Appeals to grant permission to this court to set aside and vacate its decree made in obedience to the mandate of that court, and requesting that court to recall its mandate and take such measures as may be necessary to fully reinvest the District Court with jurisdiction to open the case and receive such further evidence as may be offered by either party, and when that is done, if done, this cause will be reopened, to the end that such evidence may be introduced. If the parties fail to agree on the number of days' service to which the special master is entitled and the amount of his expenses, then same may be taxed on motion before the District Court.

LANDON v. PUBLIC UTILITIES COMMISSION OF KANSAS et al. (District Court, D. Kansas, First Division. August 13, 1917.) No. 136-N.

1. COMMERCE 15-"INTERSTATE COMMERCE"-TRANSPORTATION And Sale of NATURAL GAS.

The piping of natural gas from one state, where it is produced, into another state, where it is distributed to consumers, constitutes interstate commerce; and its character is not changed by the fact that the gas is stored in the latter state merely as a necessary incident to its proper and efficient transportation.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Interstate Commerce.]

4. COMMERCE

MERCE.

12-VALIDITY OF STATE REGULATIONS-INTERSTATE COM

The power of a state to control public utilities doing business within its boundaries may not be so exercised as to impose a direct burden on interstate commerce.

3. COMMERCE 57-INTERSTATE COMMERCE-INTERFERENCE WITH BY STATE. The action of a state commission in assuming jurisdiction to fix and regulate rates to be charged to consumers by the receiver of a corporation engaged in piping natural gas into such state from another and distributing it to consumers held unconstitutional, as a direct interference with interstate commerce, and as depriving the receiver of his property without due process of law.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

4. RECEIVERS 90-ASSUMPTION OF CONTRACTS.

A contract made by a corporation is not binding on its receiver, unless affirmatively adopted by him; and while, ordinarily, he is required to indicate his election within a reasonable time, it is not necessary, where an order has been made that the contract should not be binding on the receiver, unless expressly so ordered by the court.

In Equity. Suit by John M. Landon, receiver of the Kansas Natural Gas Company, against Public Utilities Commission of Kansas and others. On final hearing for injunction against the Missouri defendants. Granted.

See, also, 242 Fed. 658; 234 Fed. 152.

Chester I. Long, of Wichita, Kan., John H. Atwood, of Kansas City, Mo., and Robert Stone, of Topeka, Kan., for complainant.

H. O. Caster and F. S. Jackson, both of Topeka, Kan., for Public Utilities Commission of Kansas.

James D. Lindsay, of Jefferson City, Mo., for Public Service Commission of Missouri.

T. S. Salathiel, of Independence, Kan., for Kansas Natural Gas Co. J. A. Harzfeld and A. F. Evans, both of Kansas City, Mo., for city of Kansas City, Mo.

H. J. Smith, of Kansas City, Kan., for city of Kansas City, Kan. W. E. Stringfellow, of St. Joseph, Mo., for St. Joseph Gas Co.

T. F. Doran, of Topeka, Kan., for Consumers' Light, Heat & Pow

er Co.

Charles Blood Smith, of Topeka, Kan., for Fidelity Title & Trust Co. and Sharitt, receiver.

Charles L. Faust, of St. Joseph, Mo., for city of St. Joseph, Mo. E. F. Cameron, of Joplin, Mo., for city of Carl Junction, Mo. M. T. January, of Nevada, Mo., for city of Nevada, Mo. George J. Grayston, of Joplin, Mo., for Joplin Gas Co.

JW. Dana, of Kansas City, Mo., for Wyandotte Gas Co. and Kansas City Gas Co.

BOOTH, District Judge. I had supposed until this morning that there was to be simply an informal conference by the receiver and his counsel in case No. 1351 Equity with reference to the question of the advisability of making a change in the rates for the coming winter and as to what those rates should be; but I am advised that other parties interested have been notified, and I think wisely so, as the conference might well take a broader scope than what I had supposed it was to take, because the question of rates is one in which a good many parties are interested. It is also a question upon which the court desires to get all the light possible before making any definite order. It might very likely be of advantage, if not to all, at least to some of you, to know what decision has been reached upon the issues touching the Missouri defendants which were tried and submitted at Kansas City a few weeks ago in case 136-N Equity. I have not been able to prepare a written opinion for filing with regard to these issues; but I have, however, reached certain conclusions, and I think, perhaps, it For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

would be just as well that I should state what these conclusions are at this time, and then, if I think it advisable, I will reduce them later to writing and have them filed. If this is the desire of the attorneys, I will follow this plan, because I think it may have some bearing upon the discussion as to what rates the court may order, and also have some bearing as to the position the attorneys may take upon one side or the other, and especially those representing Missouri defendants. By a former decision, which was filed in April, and by a decree that was entered upon that decision, the issues in case No. 136-N, so far as they related specially to the Kansas defendants were disposed of, but the issues so far as they related specially to the Missouri defendants, and also the issue as to the status of the supply contracts, were held open for taking further evidence and for further consideration.

The jurisdictional questions raised by the Missouri defendants do not require further discussion. They have been disposed of by the former decisions, viz. the decision of the enlarged court, found in 234 Fed. 152, and the decision of this court filed April 21, 1917 (242 Fed. 658).

The principal issues in which the Missouri defendants are interested involve two main questions: First. Whether the acts of the Missouri Commission and of the Missouri defendants, or of certain of them, have been of such a character as to call for an injunction against them on behalf of the receiver. That question resolves itself into two subordinate questions: (a) Whether the business which is being carried on by the receiver, viz. the transportation of natural gas from Oklahoma and sale thereof in Missouri constitutes interstate commerce; (b) whether the acts of the Missouri Commission, or any of them, can be held to be acts which in effect deprive the receiver of the property of the company without due process of law. The second main question, and one in which not only the Missouri defendants, but also the Kansas defendants, are interested, is the question as to the status of the supply contracts originally made by the Kansas Natural Gas Company, or its predecessor, with various distributing companies, or their predecessors. This question, again, is divisible into two subordinate questions: (a) As to the status of the supply contracts as between the original parties or their assignees; and (b) the status of the supply contracts as to the receiver.

The relief sought by the receiver is: First, by way of injunction against the defendants, and especially against the Missouri Commis sion, restraining them from interfering with the carrying on of the business of transportation and selling of natural gas from Oklahoma into Missouri. The claim of the plaintiff is that the business thus carried on is interstate commerce, and that the Missouri Commission and some of the other defendants have attempted to unduly and directly burden this interstate commerce and to place restrictions upon it; and further it is claimed that the acts of the Missouri Commission in effect take away the property of the receiver without due process of law. Secondly, by way of injunction as against all of the defendants. to prevent them or any of them from instituting any suits or proceedings or taking any steps without the consent of this court to enforce the provisions of the so-called supply contracts, which they

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