We are unable to see that differential power, as defined by the complainant, releases the current-varying apparatus of either complainant or defendant. If differential power does not arise until after the coils have been neutralized, the differential power merely actuates, and does not release. The new definition of differential power does not accord with the claims, which require that it should perform a function which, by the complainant's own definition, it cannot perform. Chapman does not release his apparatus by the difference between unequally wound coils. He releases his apparatus by the action of the relay, which occurs before differential power is developed. The operation which moves his core does not correspond at all with that which moves Bradford's wheel 15 into contact with the middle pulley.

Considering also claim 5, this employs the language, "opposing the action of said current-varying apparatus by alternation of said power." We fail to see how this language is applicable, if we are to use the term "differential power" as defined by complainant's counsel. We are of the opinion that the theory upon which the case was argued to this court is a departure from the patent, and from the true interpretation of the claims.

We are also of the opinion that infringement cannot be based upon the fact that Chapman uses a solenoid with differential winding. Bradford testifies that Chapman suggested to him the use of winding consisting of two equal coils running in opposite directions; that when but one of the coils received current magnetic force would result, but that when both of the coils received current at the same time they simply neutralized each other, and no action resulted. He testifies that, after considering the plan of causing action by a single electro-magnetic force, that is, a force not differentiated by another electric current, he abandoned that idea.

We think, upon this evidence, that Chapman was entitled to use differential winding for his working solenoid, and to use one magnetic force to neutralize the other. This involved a division of the current and the use of the relay. Chapman added to what he had suggested to Bradford a second coil at each end, whose function it was to neutralize the action of the first coil at that end. Bradford was compelled to neutralize an electric force for an entirely different reason. He was obliged to put in magnetic repulsion for a purpose entirely foreign to anything in Chapman's device. It was necessary, before his relay could operate as an active factor, that he should neutralize this force. He cannot monopolize the idea of neutralizing one force in order that another force may act. Upon his own admission, Chapman suggested to him the neutralizing of one force by another, and the idea is applied in a substantially different way in each machine. It is also in evidence that differential winding for the purpose of preventing sparking was old, and Chapman was entitled to use it for this purpose. It appears, moreover, that differential magnets and a relay current were old in the art.

There is no suggestion in Bradford's specification that his method was applicable without auxiliary mechanical power. He used differential winding to neutralize magnetic repulsion and to secure magnetic

attraction. While his ultimate object was to govern the action of the current, his immediate object was to govern the application of mechanical power by an ingenious electric clutch.

We do not think that Bradford's patent can fairly be construed to cover broadly all methods of governing an electrical current through the use of electrical magnetism which operates after the current has overcome other magnetism; but that his patent must be limited substantially to the combination therein described, which includes, as essential elements, an auxiliary mechanical power and an electric clutch to apply the power.

We think there are the following substantial differences: The defendant divides its normal current for the purpose of storing up energy in both ends of the working solenoid core, intending to use this energy to move the rheostat arm. The complainant divides his main current to create energy to hold the parts of an electric clutch out of contact. The complainant introduces his relay current to release the mechanical parts, and also for the purpose of producing positive action by his unequally wound coils. The defendant uses the relay current for the purpose of neutralizing one of the two forces which move the rheostat arm, thereby permitting the other force to act. The complainant's method does not involve the neutralizing of one of the forces, either mechanical or electrical, which is to move the lever arm. The action of the defendant's apparatus does not arise from energizing additional turns, but from neutralizing one coil of a differentially wound magnet. The general considerations which require a limited construction of the patent are sufficiently dealt with in the opinion of the circuit court. We have, therefore, in this opinion, dwelt more particularly upon the method claims and the complainant's limited definition of "differential power."

Upon the whole case, we adopt the view of the defendant's experts that the complainant and defendant were proceeding upon opposite and diverging lines of experiment, and that each has produced an essentially different combination.

As a result, we regard the defendant's device as an independent invention, which does not embody the substance of what the complainant is entitled to monopolize, and therefore there is no infringement. The judgment of the circuit court is affirmed, and the costs of appeal are awarded to the appellee.

(115 Fed. 669.)

AMERICAN STEEL BARGE CO. v. CHESAPEAKE & O. COAL

AGENCY CO.

(Circuit Court of Appeals, First Circuit. April 16, 1902.)

No. 391.

1. SHIPPING-TIME CHARTER-RESERVATION OF LIEN ON SUBFREIGHT. A provision of a charter party that "the owners shall have a lien on all * * subfreight for charter money due under this charter" cannot be applied, as against a cargo owner other than the charterer, beyond the amount of freight stipulated in the bill of lading; but to

such extent it is valid and enforceable, as creating an admiralty lien on the freight, even where the charter is a demise of the ship. 2. SAME.

It is competent for a time charterer, by a provision in the charter, whether it is or is not a demise of the vessel, to pledge the freight to be earned by her during the term to secure the payment of the charter hire; and such a provision gives the owner an equitable lien in admiralty, as of the date of the charter, on any freight subsequently stipulated to be paid under a bill of lading, and subrogates him to the lien of the charterer for the freight, and to the remedies of the charterer to enforce its payment.

3. SAME-PROCEEDING TO ENFORCE LIEN-ARREST of Cargo.

The proper proceeding by a shipowner to enforce the lien given by such charter provision is by a libel, in conformity to admiralty rule 38, against the subfreight alone, with process requiring the holder of the bill of lading or owner of the cargo to bring the amount of the freight into court. If not so brought in, a summary process may issue against the owner of the cargo, or against the cargo. A proceeding against the cargo is not justified until after an order to pay in the freight; but, if a warrant of arrest has prematurely issued, and it is afterward ascertained that there is a contest which would probably have ultimately resulted in its issuance, the arrest will be retained, and compensation made in costs for the fact that it was premature.

4. SAME-PAYMENT OF FREIGHT TO CHARTERER.

A cargo owner, who, on the issuance to it of a bill of lading, paid to the charterer a portion of the freight, in good faith, is protected in such payment as against a lien on subfreight reserved by the shipowner in the charter, of which the shipper had no knowledge or notice.

5. SAME-PRIORITY AS BETWEEN LIEN AND RIGHT OF SET-OFF.

A lien on subfreights reserved by a shipowner in a time charter will be given preference over a general right of set-off existing in favor of a cargo owner against the charterer, especially where, so far as appears, his lien, which relates back to the date of the charter, is prior to the charterer's indebtedness to the cargo owner.

Appeal from the District Court of the United States for the District of Massachusetts.

For opinion below, see 107 Fed. 964.

Frederic Dodge, for appellant.

Joseph B. Warner, for appellee.

Before COLT and PUTNAM, Circuit Judges, and WEBB, District Judge.

PUTNAM, Circuit Judge. This appeal will be found not to concern the cargo of coal, as the title of the case would indicate, but the freight thereon.

The steamer City of Everett, belonging to the American Steel Barge Company, the libelant, was chartered by it, under a time charter, on March 1, 1898, to the Atlantic Transportation Company; the charter money being payable in monthly installments in advance. The controversy now existing arose over the installment due on December 5, 1898, which remains unpaid. At or about that time the Atlantic Transportation Company became insolvent and went into the hands of a receiver, and has since so remained. The charter, barring its formal parts, is given at length in the opinion of the learned judge of the district court. That opinion discusses very fully the question whether its legal effect is merely a chartering of

the entire space of the steamer, or a proper demise, and the same question has been argued before us at great length. The libel alleges that the owners "let" the steamer to the charterers, which, in a libel, or in other judicial pleading, can be properly construed. only as a demise. If it were important to the case, we would have no question that the libel properly construed the charter in this respect.

Whether or not the charter operated as a demise, the master was, for all the purposes of this case, the agent of the charterer. This is particularly emphasized by the fact that the charter closed a provision that the master should be under the orders and direction of the charterer, as follows:

"And the charterer hereby agrees to indemnify the owners from all consequences and liabilities that may arise from the captain signing bills of lading, or not otherwise complying with the same."

Indeed, the libel alleges, and it is not controverted, that the bill of lading covering the cargo in question was signed by the master "by the direction of said charterer or its agents.' There can be no question that, so far as the controversy before us is concerned, the master was the agent of the charterer, and the bill of lading of the cargo in question was given by him as such agent.

The case turns on the following expression in the charter: "That the owners [meaning the owners of the vessel] shall have a lien upon all cargoes and all subfreight for charter money due under this charter." In Baumwoll Manufactur von Carl Scheibler v. Furness [1893] App. Cas. 8, Lord Chancellor Herschell spoke of this clause as one "which is a provision as between charterer and shipowner," apparently having in mind in that connection the case where only a ship's space is chartered. Neither the origin nor the history. of the clause on which this case turns can be clearly traced. The learned judge of the district court suggested that it was framed when charterers intended ordinarily to freight ships with their own property; but it is to be noted, however, in this connection, that it attempts to give a lien on cargo, and also a lien on subfreights. The former (that is, on the cargo) was originally regarded as existing merely at common law. It has been largely so discussed in the case at bar. It is now held that the relation of the vessel to the cargo does not create a merely common-law lien, but an admiralty lien, good until it is either expressly or impliedly waived. This was explained by us in Wellman v. Morse, 22 C. C. A. 318, 76 Fed. 573. Nevertheless it may be that it was because of the old impression that the lien for freight arises at common law, and so depends on possession, that, so far as this clause gave a lien on the cargo, it was thought by some applicable only to a charter for space, or to cases where the charterer owns the cargo. That, however, it was not framed simply with reference to furnishing a lien on a cargo belonging to a charterer, seems to follow from Paul v. Birch, 2 Atk. 621, where, as early as 1743, it was held sufficient to bind to the owner of the ship a cargo in which the charterer had no interest.

Bearing in mind, however, that the clause gives a lien on subfreights as well as a lien on cargo, it will be found that we are relieved on this appeal from any investigation of the rules of the common law with reference to liens, so extensively argued before us, or from any investigation of the nature of liens for freight, further than referring to Wellman v. Morse, as we have done. We must also add that, whatever obscurity attends the origin and history of the clause in question, there is none in that portion of it which relates to subfreights, and no difficulty in its application to the case at bar, whatever the character of the charter in question. It is certain, however, that this clause cannot be applied, as against the cargo owner, beyond the amount of freight stipulated in the bill of lading. We understand that this is conceded by the libelant; but, in any event, the rule is fully established by Scrutton on Charter Parties and Bills of Lading (4th Ed.) at pages 285 and 286, and by the decisions cited in the note thereto, as well as by many other cases not there cited, among which are Paul v. Birch, ubi supra; Shand v. Sanderson, 4 Hurl. & N. 381; and Gilkison v. Middleton, 2 C. B. (N. S.) 134. Paul v. Birch is very badly reported, as is well said in Carv. Car. by Sea (3d Ed.) 774. It was, however, carefully explained in Abb. Shipp. (5th Eng. Ed.; the last edition, revised by Lord Tenterden), at page 171, and is there shown to be clear on this point.

Inasmuch as the clause in question is clear so far as relates to subfreights, and can receive to that extent full effect without difficulty, no legal tribunal is authorized to strike it out of this charter, even though it was primarily intended for use in one which did not demise the ship. It is true that in all the English cases which we have found, including especially those cited in the note to page 286 of Scrutton's Charter Parties and Bills of Lading, the charter was to load the vessel, which, of course, is only a contract for space; yet Leggett's Charter Parties (1894) 530, lays down a broad rule, that it never seems to have been disputed that a shipowner can hold the goods to the extent of the bill of lading freight, and that, "Where the vessel has been put up by the charterer as a general ship, the same rule holds good." While probably this must be qualified with reference to the shipowner who has demised a ship, so far as holding the goods by a common-law possessory lien is concerned, it need not be qualified where he has been given by the charterer an interest in the bill of lading freight, thus carrying the incidental admiralty right to pursue the goods for that freight in the event it remains unpaid.

Strictly speaking, the charter money of a ship chartered on time is not freight. Yet it is such in common parlance, and also such in the law of insurance. This fact is sufficiently explained in Abb. Merch. Ships (14th Ed.) 662, 663. Therefore it cannot reasonably be questioned that "subfreights," which is an expression in common use and easily understood, embraces all freights which a charterer stipulates to receive for the carriage of goods, whether he takes the ship by demise or otherwise. It follows that we must hold that the parties to this charter intended to bind to the owner