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 The fact that defendant is manufactur- structure wherein a falling float in the boting the structure shown in the later patents tom kettle automatically trips into action the to Trace is of no importance upon the ques- ' mechanism for opening and closing the suction of infringement. See, e. g., our de- cessive gate doors. It is quite impossible to cisions in Herman v. Youngstown, 191 F. accept this argument. The French specifi579, 584, 112 C. C. A. 185, Curry v. Union cation and drawing showed this construcCo., 230 F. 422, 429, 144 C. C. A. 564, and tion, but we find that the specification exGeneral Co. v. Electric Co., 243 F. 188, 193, pressly stated that, instead of this full au1007, 156 C. C. A. 54, 664, and that of the tomatic action, the starting gear might be Second C. C. A. in Gordon v. Turco Co., 247 manually operated, if desired, and then we F. 487, 490, 159 C. C. A. 541. Indeed, find that the patent contains a group of narseldom does the fallacy of the theory that row claims limited to this full automatic acmanufacture by defendant under a later pat- tion, and a group of broader claims not so ent tends to negative infringement appear limited. Under familiar principles the limso clearly as in this case. When Trace filed itations of the former cannot be imported his application for patent, he made several into the latter. claims which were probably broad enough to
Claims 18 and 19 of the first group, 17 of read upon the French patent now in suit. the third, and 20 of the fourth are clearly They were rejected on reference to French, infringed, if given what we think their propand Trace amended them, so as to limit them
This the defendant's expert adto the combination of the fundamental mits. Claims 7 and 11, which are in terms French conception with the specific improve- of process, are infringed (contributorily); ments devised by Trace, and in this plainly but it may be suggested that they are in form tributary form the Trace patent issued. In which covers the old hand process, excepting his specification Trace sums up his device, as they contain a general limitation to autoabout in French's language, when he says matic mechanism. Whether a valid process that it is “positive in its operation, and in- patent may rest alone upon that distinction sures that the gates will be actuated succes- would require consideration, if it were a sively in a prearranged order, and that each controlling question; but, in view of the gate will be held open a predetermined length broad claims for means, which we sustain, of time.”
we do not see that it is now important to the The contents of the French file. wrapper parties, from any point of view, whether or have been carefully examined, Instead of not defendant also infringes claims 7 and justifying limitations
11, and this we do not decide. scope of the broad claims, the Patent Office
We take the same course as to those of history shows that the theory of the inven- the second group—those which are charactertion, which we have earlier stated, was con
ized by the "cycle and stop" action. The sistently pressed upon the Patent Office, and Trace patent indicates a construction which was finally accepted by it. Indeed, the Ex- would infringe; the testimony indicates that aminer took affirmative part in getting the upon most or all of the machines put out claims into final shape.?
by defendant this structure was modified,  The effect of the argument made by so that the action would normally be continuappellee against infringement is that the ous, but so that the operator might adjust claims in suit must be limited to the specific it to get the “cycle and stop" effect, and
also indicates that the operator would be 2 He said: “The claims do not seem to bring expected to do this at least occasionally. out with sufficient clearness the fact emphasized We do not see that it is worth while to in pages 6 and 7 of the last argument, namely, follow this to a conclusion; and, while we that, when a predetermined quantity of mate
are satisfied that these "cycle and stop” rial has been discharged from a kettle, the gate controlling the discharge port is positively claims are valid, the question of infringement closed before a charge begins to feed into this is left open. The same course, also, is takkettle from the one above. In other words, the en as to claims 2 and 12. claims do not seem to clearly recite the positive interruption of the discharge before the
The decree below is reversed, and the case filling begins, and, further, this fact seems to remanded for the entry of the usual interlocdistinguish from the patents of record." utory decree in compliance with this opinion.
10 F.(20) 263 LANDON V. KANSAS CITY GAS CO. against the Wyandotte County Gas Company, SAME v. WYANDOTTE COUNTY GAS
Judgments for plaintiff on part of claim, and co.
for defendants on part (300 F. 351), and
plaintiff brings error. Reversed and re(Circuit Court of Appeals, Eighth Circuit. January 4, 1926.)
Robert Stone, of Topeka, Kan. (T. S. Nos. 6906, 6907.
Salathiel, of Independence, Kan., George T. 1. Gas aw14(1)-Court's prior refusal of re: McDermott, of Topeka, Kan., R. L. Webb, ceiver's application for permission to shut off gas held rot waiver or estoppel, available of Williamstown, Kan., and Beryl R. Johnagainst receiver.
son, of Topeka, Kan., on the brief), for Court's prior refusal of application by re- plaintiff in error. ceiver of natural gas company for permission to Charles H. Mayer, of St. Joseph, Mo., shut off gas to distributers refusing to pay in- for defendants in error. creased rates ordered by court held not waiver or estoppel, available against receiver.
Before STONE and VAN VALKEN
BURGH, Circuit Judges, and WILLIAMS, 2. Contracts 4—"Contracts implied in law"
District Judge. defined.
Implied contracts are those implied in fact and those implied in law, which latter are obli
VAN VALKENBURGH, Circuit Judge. gations imposed by law, without regard to as- These two cases were presented and may be Bent of party bound, for purpose of remedy. considered together, because the questions in-'
(Ed. Note. For other definitions, see Words volved are identical; differences existing and Phrases, Contract Implied in Law.]
merely as to amounts and dates. The suits 3. Gas C 14(1)-Customers held liable on im
are ancillary to certain equity causes pendplied contract for increased rates fixed by ing in the District Court of the United States court.
for the District of Kansas, in which the Where court directed receiver for natural above-named receiver was appointed, which gas company to charge increased price to dis
cases have been consolidated, and the prestributing companies, and such companies, with
ent actions are brought for the purpose of notice of finality of rates fixed, refused to pay any increased prices, held, that receiver was protecting property then in the potential entitled to recover on implied contract for gas possession of the court and to enforce its thereafter furnished, for which he received jurisdiction. By them plaintiff in error seeks and retained payment at former rates; rule that promise will not be implied against ex
to recover certain amounts claimed to be due pressed declaration of party to be charged not under an implied contract to pay for gas being applicable, since companies could have re- furnished the defendants at a price fixed by fused to accept gas.
order of court in the receivership cases. The 4. Gas 14(1)-Customer dealing with re. plaintiff in error was the receiver duly apceiver held bound by knowledge of law limit. pointed, qualified, and in charge of the proping powers.
erties of the Kansas Natural Gas Company, Distributing company, dealing with receiv- from which the two defendants received the er for natural gas company, held bound by supply of gas which they distributed to their knowledge of law limiting powers and authority of receivers.
consumers, the one in Kansas City, Mo., and
the other in Kansas City, Kan. The admin5. Gas 14(1)-Receiver, whose previous ap- istration of these receivership cases was in
plication for permission to shut off gas to con. sumers refusing to pay increased rates was
the hands of Hon. Wilbur F. Booth, duly asrefused, held entitled to recover on implied signed to the district of Kansas for that purcontract without renewing application. pose. The receivership began in 1916. Prior
Where previous application by receiver of to July 14, 1919, the price fixed by the court natural gas company for permission to shut off for gas furnished by the receiver, in so far as gas to distributers refusing to pay increased rates ordered by court was refused, receiver is material to this controversy, was 28 cents was not bound thereafter to make similar appli- per 1,000 cubic feet at the point of delivery. cation in order to hold distributers liable on On that date the court issued its order raising implied contract.
the price to 35 cents. The receiver was diIn Error to the District Court of the rected to notify the several distributing com
panies of this order, with the statement that United States for the District of Kansas; John C. Pollock, Judge.
they were at liberty to make such representa
tions to the court as they might desire. DeSeparate actions by John M. Landon, re- fendants in error appeared, offered evidence, ceiver of the Kansas Natural Gas Company, and made oral arguments, suggesting a rate against the Kansas City Gas Company and of 26 cents, and advising the court that they
would not pay the rate demanded. On Au- after March 25th was not billed until a later gust 5th the court made a further order in date, approximately A pril 25th, for that curpart sustaining the order of July 14th, but rent month, and payment was not expected in lieu thereof fixing a rate of 28 cents per nor made until the 1st of the following 1,000 cubic feet at the city gates.
month, to wit, May 1st. As has been stated, After August 5th the receiver billed all the distributing companies had theretofore the distributing companies on the basis of withheld large amounts due under former the 28-cent rate. Defendants in error re- rates, including the 28-cent rate established fused and failed to pay for gas delivered to by order of court, and had paid principally them at that price, but made monthly pay- upon the basis of a division of their receipts ments on a former basis, which had prevailed from the ultimate consumers.
Suits were before the issuance of the orders to which then pending between the receiver and the reference has been made, and which was distributing companies for the collection of considerably less than the rates fixed by the such arrearages. On or about April 29, order of August 5, 1919, aforesaid. There- 1919, these suits were settled and dismissed, upon the receiver applied to the court for by the terms of which settlement the Kansas leave to cut off the supply of gas from de- City Gas Company paid to the receiver the fendants in error unless they complied with
sum of $297,570.13, and the Wyandotte the court's order; this application was re- County Gas Company paid to the receiver fused. October 13, 1919, the receiver made the sum of $74,704.13. During the existence application for an order to set aside the order of the disagreement which led to the filing of of August 5th and to restore the order of the suits thus settled, payments had been July 14th, which fixed the rate at 35 cents. made in much the same manner as above set The entire matter was again presented in an
out; the distributing companies contending extended hearing, at which the defendants that they owed only the amounts paid, and appeared, examined witnesses, made oral ar
the receiver insisting upon the then existing guments, and filed briefs. The court took the 28-cent rate, but receiving and applying paymatter under advisement, and on January ments on account. As a part of the settle20, 1920, issued its final order fixing the rate ment of this prior litigation and on the said at 35 cents per 1,000 cubic feet at the city 29th day of April, 1919, the following stipe gates, the same to become effective on and ulation was entered into: after March 25, 1920. As reason therefor it “The Kansas City Gas Company and the stated, in effect, that under the existing rate. Wyandotte County Gas Company shall forthwhich, in part, the defendants in error had with file with the Public Service Commission refused to pay, the business was being op- of Missouri and the Court of Industrial Reerated at a loss, and that, to enable the court lations of Kansas, respectively, and press to and receiver to discharge their obligations, early hearing, applications requesting said minister to the wants of the public, and re- Public Service Commission of Missouri and ceive a fair and reasonable return, it was the Court of Industrial Relations of Kansas, necessary to charge the increased rate.
respectively, to fix rates to be charged to conTwo days before the order was to go sumers of gas by said Kansas City Gas Cominto effect, to wit, March 23, 1920, the presi- pany and the Wyandotte County Gas Comdent of the Kansas City Gas Company wrote pany, respectively, said rates to be based to the receiver, declining to pay the 35-cent upon such price as said gas companies rate fixed and proffering the old rate of 28 shall be required by the receiver and the cents. It is assumed that the same attitude Kansas Natural Gas Company to pay for was taken by the Wyandotte County Gas gas at the gates of the cities from March Company. To this letter, so far as the record 25, 1920. Upon the hearing of such apdiscloses, the receiver made no reply; but plications, the receiver and the Kansas from and after the date on which the new Natural Gas Company agreed that they will, rate became effective gas was furnished and if called upon, produce and have available billed to the defendants at the 35-cent rate. for use by the Kansas City Gas Company Defendants in error accepted the gas and re- and the Wyandotte County Gas Company or mitted at the 28-cent rate. These remittances their attorneys such witnesses and exhibits were applied by the receiver upon the price as may be necessary to show the basis for fixed by the order. The readings of the fixing the gate rate charged by the receiver meters, by which the amount of gas furnished and the Kansas Natural Gas Company. It was determined, were made upon the 25th is agreed however, that nothing herein conof each month; consequently gas from and tained shall obligate the receiver or the Kan10 F.(20) 263 sas Natural Gas Company to submit to the states had permitted the distributing comjurisdiction of said Public Service Commis- panies to increase their rates to consumers, sion of the state of Missouri or the Court of the 35-cent rate was paid. Industrial Relations of the state of Kansas, The case was tried to the court upon an or be deemed to be a waiver of their rights to agreed statement of facts, and upon the question any order of said Public Service third count of the complaints, which sought Commission or of said Court of Industrial recovery as upon implied contract. There Relations."
were included other claims made by the plainIt will thus be seen that both defendants tiff, arising out of the manner in which the in error agreed to apply to their respective gas was metered to defendant companies. public service tribunals for authority to raise These claims amounted to the sum of $22,their rates to consumers; the same to be based 111.88, with interest, in the case against the "upon such price as said gas companies shall Kansas City Gas Company, and to the sum be required by the receiver and the Kansas of $4,396.84, with interest, against the WyanNatural Gas Company to pay for gas at dotte County Gas Company. These claims the gates of the cities from March 25, 1920.” were conceded by defendants to be correct, It was especially provided that the receiver and the trial court awarded judgment against should in no wise be conceived to submit to the defendants for these amounts. In its the jurisdiction of said state tribunals. The judgment entry, however, the court omitted course of business between the receiver and to allow interest thereon. With respect to the two companies then proceeded as it had the main cause of action, the court was of theretofore proceeded, when there had been the opinion that, inasmuch as the defendants, contentions between them as to the rates to be through their notice to the receiver, had recharged and paid for gas furnished. Gas was fused to pay the 35-cent rate, the minds of furnished by the receiver and received by de- the parties had not met, and plaintiff could fendants in error. Each was supplied with not recover as upon implied contract. The physical instrumentalities whereby the gas finding, therefore, was for defendants upcould have been shut off by the receiver at on this phase of the cases, and costs were the gates of the city, and whereby the receipt awarded in their favor. The determination of gas could have been excluded by the dis- of the cases, therefore, involves the considtributing companies at the same points; eration of this single proposition. neither had exercised this power in the past,
The District Court having charge of the and neither exercised it then. Under the receivership, in the exercise of its recognized situation theretofore prevailing, to which and conceded power, after exhaustive conreference has been made, but two months be- sideration, and in the exercise of striking fore the hearing, which resulted in establish- forbearance, all parties having been invited ing the 35-cent rate, the receiver had made to appear, the invitation being accepted, and application to the court for permission to the opportunity availed of, found that, to shut off the gas unless his rates were com
enable the receiver to discharge his obligaplied with; this the court refused, in the in- tion and minister to the wants of the public, terest of the convenience, comfort, and health the charge in this zone must be 35 cents per of the large communities served as ultimate 1,000 feet at the gates of each city, and a final consumers. In due course the distributing order upon the receiver was entered to that companies were permitted, by their respec- effect. This requirement was made uniform tive public service tribunals, to raise their by the spirit, if not the letter, of existing law rates in conformity with the situation con- throughout the zone. Both defendants in ers' fronting them, as disclosed by the stipulation ror appeared at the hearings leading up to and by the application they themselves made. this order, and were thoroughly conversant As stated by the trial court, this condition of with its terms and with the finality of the acaffairs continued from and after March 25, tion taken. It will be remembered that two 1920, until October 15, 1920, a period of such hearings had been held. At the first some seven months. For the purposes of this of these hearings, in the summer of 1919, the opinion the precise dates are not necessary to court modified its former order, reducing the be stated. It is sufficient that the plaintiff rate from 35 cents, by that order established, in error sues to recover against each company to 28 cents. At that time the defendants rethe difference between the price of gas fixed fused to pay even this 28-cent rate, and all by the court and that paid by defendants in arrearages therefor were subsequently aderror. Ultimately, some time after the Pub- justed upon the dismissal of the suits to lic Service Commissions of the respective recover the same, to which reference has been
made. Experience of operation demon- We have, then, only to consider whether the strated that the receiver was operating with- plaintiff can recover upon the theory of imout return and at a loss. He therefore ap- plied contract. plied to the court to reopen the matter and  Implied contracts are of two classes : to restore the 35-cent rate. The court held an (1) Those implied in fact; and (2) those imextended hearing, at which these defendants plied in law. The rule as to the latter is thus appeared by invitation and presented their stated in Corpus Juris, vol. 13, p. 244, par. objections to this proposed action. After 10: very careful consideration Judge Booth de- “Contracts implied in law, or more propcided that the increase was necessary, and erly quasi or constructive contracts, are a made his final order of January 20, 1920, the class of obligations which are imposed or same to become effective on the 25th day of created by law without regard to the assent the following March; but two days prior of the party bound, on the ground that they to this effective date the president of the are dictated by reason and justice, and which Kansas City Gas Company wrote the receive are allowed to be enforced by an action ex er, as heretofore stated, and on April 29th, contractu.
They are clothed with before payment upon the first monthly in- the semblance of contract for the purpose
of stallment of the increased rate was due, the the remedy, and the obligation arises, not stipulation above quoted was entered into. from consent, as in the case of true contracts, It is the contention of the defendants that but from the law or natural equity. So this notice to the receiver was a sufficient re- when the party to be bound is under a legal fusal on their part to pay the increased rate obligation to perform the duty from which to relieve them from any contractual liability his promise is inferred, the law may infer a thereunder; that, if the receiver continued promise even as against his intention.” to furnish gas thereafter, he did so at his By counsel for defendants in error and peril; and that, if he did not intend to accept by the trial court chief reliance is placed the 28 cents per 1,000 tendered, he should upon the rule announced in Municipal Water have shut off the gas at the gates of the city Works Co. v. City of Ft. Smith (D. C.) and have refused to furnish unless his de- 216 F. 431, which is that no promise to pay mands were complied with.
can be implied contrary to the express dec Under the situation theretofore prevail. laration of the party sought to be charged. ing, but two months before the hearing which This rule, where applicable, is well estabresulted in the 35-cent rate, the receiver had lished. In the case cited the waterworks commade application to the court for permission pany was an individual contractor, conductto shut off the gas unless his rates then es- ing its business as such, without interference tablished were complied with; this the court from paramount authority of court or otherrefused in the interest of the convenience, wise. It was dealing with the city direct, as comfort, and health of the large communities distinguished from ultimate consumers served served as ultimate consumers. This action, by the city. It had the power to make such in the exercise of a wise public policy, can contracts, compromises, or concessions as it hardly be urged in the nature of waiver or saw fit, and if, under such circumstances, it estoppel. It was but a cumulative and highly chose to furnish the city with city water in drastic method of collection. The question the face of the express declination on the of whether the rate fixed by the court was part of the city to pay therefor, it did so at reasonable is not in this case. Upon the rec- its own peril. The cases cited in support of ord, however, and upon the implied admis- this decision, and of the doctrine there ansion of the defendants in their application to nounced, go no farther than this. the Public Service Commissions, the rate was (3-5] No case is produced, analogous to that reasonable; but incidentally it may be ques- at bar, where a receiver is acting under the tioned whether an order of a court, entered express direction of a court, speaking in the exercise of its conceded powers, over through a specific order. In this case the rea subject-matter exclusively within its juris- ceiver was bound by that order. He had neidiction, may be subjected to the question, in ther power nor authority to furnish gas at divers and sundry jurisdictions, of whether a rate less than that fixed by the court; of the exercise of its judicial discretion was this the distributing companies had full nosound. However, as we have said, this ques- tice, and for that purpose the proceedings at tion does not here obtrude itself upon us. the hearings, in which the gas companies parUpon final refusal to pay, these suits were ticipated, were evidentiary. The distributing instituted at the direction of Judge Booth. companies were also bound by knowledge of