value of plaintiff's property, there is little the sum of $32,504.71, as of December 31, controversy between the parties. The valuation as placed by the Public Service Commission took into account the original cost of the property, whereas the plaintiff claimed that a valuation of the property, as of December 31, 1922, should be used independently of original costs. The appraisals made on behalf of the plaintiff fixed the total value of the company's property as of December 31, 1922, at $1,179,495. This valuation was based upon current costs, and made no allowance for depreciation either for obsolescence or use. This might be designated as replacement cost. The chief engineer for the Public Service Commission acquiesced in the accuracy of these figures as to reproduction or replacement cost as of December 31, 1922, but denied that the figure represented the value of the property as of that date. The testimony in the matter of depreciation showed that there was in fact no deterioration in the plant, but that, on the contrary, it was in 100 per cent. condition. Some of the experts who testified for plaintiff even asserted "that the present plant is better than a new one," and that "in a wellmaintained plant, such as the Springfield plant, deterioration is almost negligible in its influence on value." There was offered in evidence a number of sections of cast iron and steel pipes, or mains, used as conduits for gas. These were taken at random over the system. No effect of use was observable, and the testimony showed that some of the sections had been in the ground for a long period of years. It appeared that long use has practically no effect on wrought iron or steel gas mains, or service pipes, and that such equipment can be used indefinitely. There was testimony, however, on behalf of the plaintiff, that a perfect rehabilitation of the plant would involve an expenditure of $24,214. The testimony of the defendants was that the original cost of the plant would not exceed $800,000. A controversy arose on the item of $52,077, included in the figures of $1,179,495. This is the amount set apart by plaintiff for working capital. It was contended by the defendant that such an amount is excessive. The testimony tended to show that there was no segregation of the working capital of the Springfield Gas & Electric Company with respect to its gas department, apart from the other utility departments. The accountants, by allocating various items of working capital to the several departments, apportioned 1911, which amount it was stated rose to $107,190.52 on December 31, 1921, and then decreased until, on December 31, 1923, it amounted to $59,952.61. The testimony supported the amount fixed by the company at $52,077 as a proper sum. Another item in controversy was that of going value. This was fixed by the commission at $40,000, whereas the plaintiff claims $117,949. There was testimony that this would be a proper allowance. The maximum value of the plant fixed by plaintiff in its testimony was $1,297,444, as against a value of $800,000 claimed by defendants. There was also testimony as to a proper rate of return. Other facts will be noted and discussed, if they become pertinent, in the course of the opinion. [1] 1. Defendants say that this court is without jurisdiction, because plaintiff has not exhausted its remedy at law in the state courts of Missouri. It was held in Bacon v. Rutland R. R. Co., 232 U. S. 134, that under circumstances like this the plaintiff would have a right to resort to the courts of the United States at once. [2] 2. It is urged by the defendants that the order of October 10, 1923, was invalid on its face, and that therefore a decree should go for plaintiff, without regard to other questions raised. The Missouri statutes provide that the commission will only have authority to prescribe just and reasonable rates and charges when it shall appear to the commission that adopted rates "are unjust, unreasonable, unjustly discriminatory, or unduly preferential, or in any wise in violation of any provisions of law." Rev. St. Mo. 1919, § 10456. The commission by its report and order found in substance that the new schedule of rates would be reasonable, but did not find the previous schedules were unreasonable or otherwise offensive to the rule laid down by the statute. Undoubtedly the commission should have made a finding of facts upon which to rest the order. Wichita R. R. v. Public Utilities Commission, 260 U. S. 48, loc. cit. 58, 59, 43 S. Ct. 51, 67 L. Ed. 124. Plaintiff does not urge, however, that the opinion shall rest upon this contention, and the court would be unwilling to say, on examination of the report and order of the commission, that an inference might not be drawn of such facts as would sustain the order. [3] 3. The parties are in substantial agreement that the base for rate-making is the 10 F.(2d) 252 present fair value of the property devoted to the service of the public, and, moreover, both parties are in agreement that various, factors may be used to aid the court in reaching a conclusion as to what is the present fair value. No artificial rule would be permitted to defeat a correct conclusion in this regard. Neither "prudent investment nor historic cost" will become controlling factors, although probably relevant facts. The rule of "fair present value" is established by a long line of decisions, beginning with Smyth v. Ames, 169 U. S. 466, 18 S. Ct. 418, 42 L. Ed. 819, and has been followed down to the more recent cases. of Missouri ex rel. Southwest Telephone Co. v. Public Service Commission, 262 U. S. 276, 43 S. Ct. 544, 67 L. Ed. 981, 31 A. L. R. 807. [4] Adverting, therefore, to the facts in the case, the testimony not only predominated, but was practically one way, that the fair present value of plaintiff's property, used and useful in the public service on December 31, 1922, was $1,273,230. This includes an item of going value in the sum of $117,949. The parties in like manner are in agreement that some sum should be allowed for going value. Des Moines Gas Co. v. City of Des Moines, 238 U. S. 153, loc. cit. 169, 35 S. Ct. 811, 59 L. Ed. 1244; Galveston Electric Co. v. City of Galveston et al., 258 U. S. 388, 42 S. Ct. 351, 66 L. Ed. 678; City of Minneapolis v. Rand et al. (C. C. A.) 285 F. 818, loc. cit. 830. Plaintiff's testimony tended to show that this item should be allowed at the above figure. This is approximately 10 per cent. of the cost of the reproduction or replacement cost. The usual percentage allowed by the courts and Public Service Commissions varies from 27.9 per cent. to 7.5 per cent. of the cost of reproduction. According to the testimony, the average in all of the court cases was 10.4 per cent., whereas the average in all public utilities cases was 15.4 per cent. It was in evidence that the Public Service Commission of Missouri, in the case of City of Kansas City v. Kansas City Telephone Co., 11 Mo. Pub. Service Com. Rep. 1. c. 749, allowed 10 per cent. of the reproduction cost for going value, and that such an allowance has been made in other cases. Upon the testimony, the court must accept plaintiff's claim as reasonable and proper. [5] 4. Plaintiff was permitted to prove the fair present value of its property by testimony of an actual appraisement thereof, and by other methods designed to inform the court as to its actual fair present value. This Plaintiff is entitled to relief in this court, and a decree will be entered in accordance with its prayer. The concern of the court is only with confiscation, and not with ratemaking. Pacific Gas Co. v. San Francisco, 265 U. S. 403, 44 S. Ct. 537, 68 L. Ed. 1075. 256 10 FEDERAL REPORTER, 2d SERIES affd 16 (24) £10 FED. BUSH v. THE CONEJO. UNITED STATES v. SAME. as representative of the owner. The present owner was afterward allowed to intervene. The United States filed a libel of informa (District Court, D. Massachusetts. December tion, alleging that she had committed a 30, 1925.) Nos. 3219, 3221. 1. Admiralty 25-Owner of yacht libeled, having by possessory libel invoked court's aid, his successor, intervening, may not question jurisdiction. Even though court's jurisdiction of libel of information to forfeit yacht depends on there having been a valid seizure, yet, the owner at time of seizure having then filed libel for possession, thus invoking aid of the court, the present owner and claimant, who intervened, cannot now be heard to deny jurisdiction. breach of her license and praying for forfeiture. The evidence at the hearing established the facts related above, and further showed to my satisfaction that the vessel had carried liquor into Portland and South Freeport, Me. [1] The chief objection of the claimant as set forth in his exceptions to the libel of information is that the vessel was improperly seized. He relies on The Silver Spring, Fed. Cas. No. 12,858, a decision by Judge Sprague, in this district, which follows The 2. Customs duties 130-Yacht subject to Brig Ann, 9 Cranch, 289, 3 L. Ed. 734. forfeiture for violating revenue laws. Under Comp. St. §§ 7804, 7805, yacht is subject to forfeiture for violation of revenue laws. 3. Customs duties 133-Court not required to shut its eyes to well-known facts relative to forfeiture for violating revenue laws. Though there be no direct evidence that duty had not been paid on liquor brought in by yacht libeled for violating revenue laws, and forfeiture should not be lightly decreed, the court need not shut its eyes to well-known facts. This raises a a very interesting question, which, however, need not be decided in the present case. The cases referred to, and many others which might be cited (see The Fideliter, Fed. Cas. No. 4,755, and cases cited), hold that the District Court has no jurisdiction in such cases, unless there is a valid seizure. The claimant contends that the seizure was invalid, and therefore this court has no jurisdiction; but the former owner filed a libel for possession, thus invoking the aid of the court, and the present claimant, who intervened, cannot now be heard to deny the court's jurisdiction. The Abby, Fed. Cas. No. 14; The Lewellen, Fed. Cas. No. 8,307; The Idaho (D. C.) 29 F. 187. [2, 3] The remaining question is whether the yacht is subject to forfeiture. In The Herreshoff (D. C.) 6 F. (2d) 414, Judge Morton decreed the forfeiture of a yacht for a George R. Farnum, Asst. U. S. Atty., of breach of her license in transporting merchandise for pay. Boston, Mass., for the United States. Possessory libel by Lynom A. Bush, and libel of information by the United States, against the gas screw yacht Conejo. Decree of forfeiture. In No. 3219: Wm. J. Gould, Daniel A. Shea, and John W. Lowrance, all of Boston, Mass., for libel ant Bush. In No. 3221: U. S. Comp. St. § 7804, provides, among other things, that a yacht "shall be liable to seizure and forfeiture for any violation of the provisions of this title" (title 48). The next section of the Compiled Statutes (§ 7805), which comes under the same title, provides that a yacht shall not violate the revenue laws of the United States. While there was no direct evidence that the duty on the liquor imported had not been paid, there is no doubt that such was the case. While forfeiture should not lightly be decreed, it does not seem incumbent on a court to shut its eyes to well-known facts. See The Esther M. Rendle (C. C. A.) 7 F. (2d) 545. Let a decree of forfeiture be entered. 2712 6 73,79 FRENCH V. BUCKEYE IRON & BRASS WORKS FRENCH et al. v. BUCKEYE IRON & BRASS WORKS. (Circuit Court of Appeals, Sixth Circuit. February 16, 1926.) No. 4051. 1. Patents 328-No. 1,140,808, for apparatus for cooking oil-bearing material, held valid. French patent, No. 1,140,808, claims 2, 3, 6, 7, 11, 12, 15-21, for apparatus for cooking oil-bearing material, held valid. 2. Patents 17-That device merely does au tomatically what formerly has been done manually held not to invalidate patent. That device merely does automatically what formerly has been done manually held not to invalidate patent, where conception is new, means not obvious, and utility great. 3. Patents 283 (1)—That patented device has never been manufactured held not to affect its validity. That patented device has never been manufactured held not to affect its validity. 4. Patents 167(1)-Patent held not confined to particular form shown in drawings to be preferred one. Patent held not confined to particular form shown in drawings to be preferred one. 5. Patents 83-That patentee permitted prior application to lapse and transferred claims to subsequent application held not to show abandonment of claims. That patentee, after claims of prior application were allowed, permitted prior application to lapse and transferred its worth-while claims to subsequent application, held not to show abandonment of such claims, in absence of intervening rights creating estoppel. 6. Patents 167(1)-That specification sets out particular method impossible of attainment held not to prevent protection for results accomplished. That specifications of patent sets out additional particular method and advantage, perhaps impossible of attainment, held not to prevent protection for results accomplished. 7. Patents 328—No. 1,140,808, claims 17-20, held infringed. French patent, No. 1,140,808, claims 17-20. for apparatus for cooking oil-bearing material, held infringed. 8. Patents 112(4) — Manufacture of device under later patent held not to negative in fringement. Manufacture of device under later patent held not to negative infringement. 257 Appeal from the District Court of the United States for the Southern District of Ohio; John E. Sater, Judge. Suit by Alfred W. French and another against the Buckeye Iron & Brass Works. Decree for defendant, and plaintiffs appeal. Reversed and remanded, with directions. Barton A. Bean, Jr., of Buffalo, N. Y. (Charles W. Parker, of Buffalo, N. Y., on the brief), for appellants. H. A. Toulmin, Jr., of Dayton, Ohio (H. A. Toulmin, of Dayton, Ohio, on the brief), for appellee. Before DENISON, MACK, and DONAHUE, Circuit Judges. DENISON, Circuit Judge. [1] The court below dismissed, for lack of infringement, the bill brought by the French Company, based upon patent 1,140,808, issued to A. W. French, May 25, 1915, upon an application filed April 17, 1911, for a method of and apparatus for cooking oil-bearing material. Cotton seed meal required cooking to prepare it for extracting by pressure its contained oil. It had been found desirable to cook a batch of the meal in successive kettles at differing temperatures. This required manual, or manually assisted, re moval from one kettle to the next. This in turn required either the skill of the expert cooker, in determining the proper time for each removal or, at least, the constant attention of the operator, if the time of cooking in a particular kettle had been predetermined. Prior to the developments to be mentioned, the pertinent art had progressed to the point where, for the saving of floor space and to get the aid of gravity, the several receptacles or kettles had been placed one above another, with a door-closed opening in the bottom of each, so that, when the tents would fall into the kettle below. This door was opened by the operator, the conwas known as a stack cooker; but the element of personal attention by the operator, and usually the dependence upon his skill, were not eliminated. As the art has now developed, it has very generally adopted an automatic or semiautomatic stack cooker, in which when the lowermost receptacle containing the completely cooked meal is emptied, or sufficiently emptied, mechanism is set in motion which, without further attention or manual aid, successively passes each one Limitation of harrow claims of patent held of the cooking batches along one step from kettle to kettle. The record indicates sev 9. Patents 165-Limitation of narrow claims held not to affect broad claims not so limited. not to affect broad claims not so limited. 10 F. (2d)-17 eral great commercial utilities in this automatic process, and so general an adoption of it and discarding of the old manual methods that it must be recognized as having worked a substantial revolution in the meal-cooking art. In determining the place which the patent in suit should take in this development, we must examine both the patent art and the commercial art. Looking into the former, it seems that French was the first ever to express the conception of an automatically continuous step by step stack cooker. Some years before the actual solution of the problem, he stated it and the great benefits to be had from answering it, though the answer which he then gave was not the right one. For convenience of reference, we will speak of the successive kettles, numbered from the bottom up, as 1, 2, 3, and 4. French's first patent was 852,058, filed in 1905. In this patent he described the advantage in decreased expense and increased quality which would be had by automatically controlling the progress of the meal from one kettle to another, and he said: "The cooker is automatic in its action and the services of skilled meal cookers are unnecessary." He placed his kettles in staggered vertical relation, so that the discharge was from the lower outer edge of 4 into the upper outer edge of 3, through a depending spout. When kettle 1, for example, was emptied, there was no obstacle to the downward flow of the meal through the spout from 2 into 1, and this would continue until the meal accumulating in 1 rose to the level where it closed the spout inlet; and the corresponding transfers were taking place in the upper kettles. It is at once apparent that this was not a step by step progresssion, but that, as soon as, for any reason, the level of meal in 1 fell below the spout inlet, meal would begin to pass from 2 into 1, and from 3 into 2, and from 4 into 3, and the transfers between the different kettles would be simultaneous, and mixtures of the batches with each other would result. French did not, in this patent, obtain any claims upon the automatic process in any broad way, but confined himself to these spouts, extending into the kettle below, so as to be choked by the rising material. Clearly he did not disclose what is now said to be the essential element of the successful process, viz. that the openings from 2 to 1, and from 3 to 2, etc., should remain closed until the kettle below is emptied, and that the bottom door of each kettle, after being opened, should be closed again before the one at the top is opened, so that in this way there can be no mixture of the batches or transfer of any material through one kettle until it has remained therein the predetermined time. The next step in the patent art was also taken by French (patent 909,778, filed April 23, 1908), and he provided a baffle plate or dam, adjacent to the opening and depending into the lower kettle, which aided the tendency of the meal in the lower kettle to pile up and choke the opening. Still the necessity of preserving the integrity of the batches was not observed, or means therefor provided. The next patent in this branch of the art is that of Faherty (patent 909,773, filed May 2, 1908). Faherty seems to have been commercially associated with French. The Faherty patent recited that it was an improvement upon French's patent 852,058, and it was issued to French as Faherty's assignee. It provided, for the first time, controlling gates which positively closed the bottom openings in the kettles. The gates were pivoted at one side of the opening, depended into the kettle below, and it was the action of the rising meal accumulating in the lower kettle that pushed up the gates and held them closed-hence "float gates"; but, as soon as the level of the meal in the lower kettle fell even a very little, the gate dropped by gravity into a partially open position, and the progressive operation and the confusion of batches were substantially the same as French's. French tried again, by patent 1,000,675, filed November 17, 1908. This, however, was a division of his application, which resulted in patent 909,778, and shows only the means shown in that patent for controlling the flow of meal, although it says that other suitable means, like those of the Faherty application of May, 1908, may be used instead. This was the state of the patent art in April, 1911, when the application for the patent in suit was filed. There had been no attempt by any one at any time, except by French and Faherty, to produce an automatically progressive step by step batch meal cooker. In the commercial fieid, French or his company evidently regarded the above-described Faherty form, having the swinging gates, called "float gates," as being for that or some other reason most suitable for sale, and the French Company began to manufacture that form. The first sales do not appear, but in the summer of 1911 several of these stack cookers, built by the French Com |