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10 F.(28) 396 tained a sublicense, and on or about May referee). Up to what time did you receive 14, 1921, began the distribution of "Whistle,” that per month? A. Up to the time we which it continued to distribute until June stopped buying Whistle. Q. When you were 15, 1921. Thereafter it ceased to distribute handling Whistle, you received $3,000 or "Whistle," and used its plant and machinery $4,000 per monthA. Yes. Q. Why did

? at No. 1360 Lafayette avenue, in the Bronx, you stop? A. We were not making any for the bottling and distribution of other money.' Do you remember those questions kinds of syrup.

and answers on pages 68 and 69; they were [1] The damages which the alleged bank- true when they were made? A. Yes, sir; we rupts attempted to prove were as to (a) did not make enough money, cash investments, aggregating $13,614.84; "Q. I didn't ask you that; I have read (b) value of good will $24,207.12; (c) loss your testimony. Let me read your further: of profits, $9,463.99. It is to be noted that 'Q. (by the referee). Your $3,000 or $4,000 the alleged bankrupts were only doing any a month was eaten up with overhead exbusiness which they claimed to have been penses? A. Yes; our money was spent for profitable for about two months. Under salesmen, doing missionary work, among rethese circumstances, and after a careful opin- tailers, painting signs, wall boards, and so ion, the master held that there was no basis forth. Q. You were not receiving $3,000 or established for valuing the good will, and he $4,000 per month profit? A. No, sir; that likewise held that there was insufficient proof is what we took in each month.' A. That that there would have been any profits in was the figure I gave and remembered at that the enterprise during the period between time; but to-day these are the figures which the filing of the petition and the dismissal were taken from the books, and are corof the bankruptcy proceeding. The machin- rect, absolutely. At that time I did not ery and trucks furnished for the enterprise look at any books, and did not refer to them, were only partly paid for, and were pur- and did not even have a correct idea of what chased upon conditional sale. The alleged we had.” bankrupts, after distributing "Whistle" for

Elgot maintained that there was a net only one month, voluntarily gave it up, be- profit of 30 cents per case after taking praccause the sale of it was not profitable, un- tically everything into account upon sales of less accompanied by the distribution of other “Whistle” between May 14 and June 15. He syrups, and the licensor would not accede to kept no ledger or cash book (see testimony of a license, if other syrups were to be handled Yardley, minutes, p. 50), and the only books by the licensee.

offered tending to show sales of syrups and When Elgot, one of the alleged bankrupts, payments for wages and salaries were memwas under examination before the master, orandum books, Exhibits 21 and 27. The he was confronted with his former testimony, amount received for the syrup is based upand the following appears from the minutes: on the testimony of Elgot and his bookkeep

“Cross-examination by Mr. Hauser: er, Yardley, from memory, and the outgo for

"Q. Mr. Elgot, do you remember your wages and salaries was attempted to be testimony on the main case, when it was here proved by the memorandum book, Exhibit before the referee, before to-day? A. I have 21. The cost of purchasing, bottling, and some idea of it.

delivering "Whistle" is avowedly an estimate "Q. I read you from page 68 of your tes- of Elgot, to some extent fortified by Exhibtimony: 'Q. What was your income per its 21 and 27. These exhibits the master did month you received from this business? A. not regard as books of original entry; but, About $3,000 or $1,000 per month.' Do you whether or not that be the case, there is no remember that? A. Well, that was

sufficient evidence of the outgo of the busi"Q. Do you remember that question and ness, no check or cash book was produced, answer? A. I have some idea of that answer. showing what was done with the moneys re

"Q. You recognize, of course, these are ceived for the alleged sales of syrup, and the the official minutes ? A. I don't doubt you testimony as it stands is based upon the memare reading correctly from the paper before ory of two witnesses, supported as to certain you.

details by Exhibits 21 and 27. "Q. If you so testified at that time, it was It is, moreover, to be noted that the paytrue, wasn't it? A. No, sir; it was just ments for salesmen's salaries to advertise simply an offhand guess of what I was doing and push the sales, which are really carried at that time, without looking at the books. in the capital account, were some of them

“Q. Let me ask you this: 'Q. (by the made to men who were evidently also drivers, who made the deliveries, and it is very ques. He testified that the Glory Bottling Company tionable whether payments to so-called sales- was willing to pay $15,000, "and take over men were not, most of them, for current ex- the obligations of the plant,” and place the penses necessary to keep the business going, alleged bankrupts on a certain salary for a and not properly chargeable to a capital ac- certain time. He also stated that he "excount. The only books put in evidence were amined over the plant” and “found that for payments on account of machinery and there was—they had very little merchandise bottles, with the exception of 16 checks, ag- which belonged to them.” This $15,000 was gregating $417.49, alleged to have been pay- to be paid, $5,000 on taking possession of the ments of salaries to so-called salesmen. It plant, and the balance. bimonthly. Elgot seems quite unlikely that a profitable busi- did not accept the offer, because he was disness, which, as the alleged bankrupts claim, satisfied with the salary offered. was making net earnings at the rate of about It is true that this offer is some evidence $54,000 a year, should have been conducted of value of the business as a going concern with so little method, and it seems quite im- to a man already in the business. If Koppossible to justify charging large amounts elman was a good business man, he might of damages upon third parties with such a well get some substantial advantage out of slender foundation.

a list of customers and an assembled plant, After the alleged bankrupts ceased to sell when added to his own business. It does not "Whistle," and went into the business of follow that the business which he bought had selling other syrups at a lower price of 80 made, or could make, any profits under the cents per case, they contend that a still great- management of the alleged bankrupts. Moreer profit could have been made than on over, he proposed to pay two-thirds of the "Whistle," because they manufactured the purchase money by installment and to hire syrup themselves, and it only cost them 8 the bankrupts (who had been drawing, accents per case for syrup, instead of 29 cents, cording to their books, $75 a week) for only which they had paid for “Whistle.” During $40. If the story of this unaccepted offer is this latter experiment, as well as while they true, it still was an offer to pay only $5,000 distributed "Whistle,” no charge is made for down, coupled with a benefit to the purchasbottles, breakage, or deposits (to secure the er of officers' salaries at about half the existreturn of bottles made by customers), and ing rate. I think this offer can have little there is the same failure to charge any of the bearing on the value of the property and activities of salesmen to income account, or business. to furnish any ledger, cash book or check We last come to the loss caused by dambook showing in the usual way the disposi- age to the so-called cash investment, classition of moneys received and paid out. fied in the master's report as A, items 1, 2,

We have in this case a new business, 3, 4 and 5. The first item of advertising exwhich Elgot testified he had never been in pense, the master correctly disallowed. The before, instituted with little capital, all the business, in my opinion, had no value outmachinery purchased on conditional sale, the side of its tangible property. If loss of cusdistribution of “Whistle” abandoned after tomers was a marketable commodity, any one month because it was unsatisfactory, a sum which could be obtained for it would be business in general syrups then instituted in wholly speculative. I regard a part of this the hope that the old customers of "Whistle” so-called advertising as nothing more than would purchase other syrups, and Elgot tes- payments to truckmen who were instructed tifying at a former hearing that the receipts to “talk up”.wares while they were on the of "Whistle” were eaten up by overhead ex- road making deliveries. A large part of penses and "salesmen doing missionary work, them also seem to have been, in effect, curpainting signs, and wall boards.” I think it rent income disbursements, and whatever clear that there is no sufficient proof that a legal attribute they may have had, the result profitable business was ever conducted by seems to have been a profitless business. the alleged bankrupts. The good will and [2] Items 2, 3, 4, and 5, in subdivision A, prospective profits are therefore not items of representing equities in the machinery and legal damage.

trucks, cost of hauling, freight and installaI think the master was entirely justified in tion in the plant, security deposited under rejecting the item of advertising expense. lease, and moneys in bank, aggregate $7,814.It will doubtless be suggested that there must 84, and are prima facie items of damage to have been some good will, if the witness the corporeal property of the alleged bankKopelman offered $15,000 for the business. rupts. It is quite certain that machinery and

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10 F.(20) 399 equipment, which has been used for a month

in re ELGOT et al. or two, and was consequently secondhand,

(Circuit Court of Appeals, Second Circuit. would not have a market value equivalent to

December 7, 1925.) the purchase price, plus the cost of trans

No. 92. portation and installation. The value of such property is always a matter of estimate, Petition to Revise Order of the District whether or not the court has the aid of an Court of the United States for the Southern expert. I think the master made a reason- District of New York. able estimate when he fixed $5,000 as the

Joseph G. M. Browne, of New York City, amount of physical damage occasioned by for petitioners. the seizure. The machinery, though new,

Epstein & Smith, of New York City secondhand; the business was making no

(Henry Epstein and Maurice Smith, both money, and large payments remained to be of New York City, of counsel), for National made before title would be complete in the Box & Lumber Co. alleged bankrupts.

Paul Englander, of New York City, pro Upon the machinery itself only $5,780

se and for Sheffield Glass Bottle Co. had been paid. It is very doubtful to my

Before mind whether the transportation and installa

ROGERS, MANTON, and tion expense had added anything to its mar- HAND, Circuit Judges. ket value, and the fact that it was secondhand

PER CURIAM. Order 10 F.(20) 396, had almost inevitably rendered it worth con

affirmed. siderably less than cost. If the cash items 4 and 5, which are allowed in full, be deducted from the $5,000 (the amount allowed by the master), there is a balance applicable to

1. B. KLEINERT RUBBER CO. v. POLKASE the equity in the machinery and trucks of

MFG. CO. et al. $3,895. This is a little more than two-thirds of the amounts paid upon the purchase price (District Court, S. D. New York. March 25,

1925.) for the machinery and trucks.

It is to be noted that the landlord applied Patents em 328–1,314,799, for moisture-proof the deposit of $750 toward his unpaid rent, garment for infants, held invalid. the cash in bank-$355—was consumed by Guinzburg patent, No. 1,314,799, for moisthe expenses of the receivership, and the ture-proof garment for infants, held invalid. chattels sold on conditional sale were taken by the vendors, so that the property of the the I. B. Kleinert Rubber Company against

In Equity. Patent infringement suit by respondents was dissipated.

the Polkase Manufacturing Company and [3] Inasmuch as section 3e of the Bank

another. Bill dismissed. ruptcy Act only allows "costs, counsel fees,

Decree affirmed 10 F.(20) 400. expenses and damages occasioned by such seizure, taking or detention of property,” Joseph L. Levy, of New York City (0. the liability can only be enforced against the Ellery Edwards, of New York City, of counWhistle Bottling Company, Inc., of New sel), for complainant. York, which alone applied for and secured Schechter & Lotsch, of New York City the appointment of the receiver. In re La- (J. Schechter and John L. Lotsch, both of cov, 142 F. 960, 74 C. C. A. 130; In re New York City, of counsel), for defendants. Aschenbach Co., 183 F. 305, 105 C. C. A. 517; In re Ward (D. C.) 203 F. at page AUGUSTUS N. HAND, District Judge. 773; In re Independent Machine & Tool This is a suit for infringement of United Corporation, 251 F. 484, 163 C. C. A. 478; States letters patent No. 1,314,799, to George In re Hurlburt Motors Co., Inc. (D. C.) 275 K. Guinzburg, for a moisture-proof garment F. 62.

worn by infants over the ordinary absorbent An order will be made overruling the ex- diaper. The original claims were rejected in ceptions and confirming the master's report the Patent Office on the patents No. 36,125 and providing that the alleged bankrupts to Higgins, No. 462,965 to Darby, and No. recover from the Whistle Bottling Company, 833,849 to Schiff. They were then amended Inc., of New York, damages in the amount so as to provide that the elastic strip surof $5,000, counsel fees in the amount of rounding the leg and waist openings should $850, together with the costs of the proceed- be unshirred. As thus amended, the claims ing, to be taxed by the clerk.

were twice rejected upon the former refer

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ences, but finally, for reasons which do not such material. Rubber is preferred. So it appear, were allowed.

was by Higgins. Now, there can be no doubt that the gar- The question seems to be whether the apment has met with a very considerable com- plication of the flat elastic band of the Darmercial success. There has been ample ad- by patent to the inner face of the leg of the vertising, and there have been on the market garment disclosed in the Higgins patent is a other rubber garments made for similar use, critical matter of sufficient importance to inExhibits B, M, and N, not within the terms volve invention. The patent in suit got of the claims of the patent in suit. The ques- through the Patent Office with difficulty, and tion may well arise whether the success is apparently only succeeded because a flat not due to the popularity of rubber garments, band was used to line the shirred openings. which are light, cleanly, and readily washed, I can see no reason to believe such a matter rather than to the peculiar features of the is of great importance, or that the Higgins Guinzburg garment.

model, with a flat band inside a rubber pockThe leg bands (4) of the Darby patent, et, would not have been as safe and useful No. 462,965, show flat elastic bands in con

as that of Guinzburg. Exhibits B, M, and tact with the legs used for a similar purpose. N, now on the market, seem to be practical There is no shirring, and the full surface of models, and they have the rubber pocket of the band is not apparently stitched on the the Higgins model. But if Guinzburg's garinner face of the leg of the garment, as shown ment is slightly better, because a shirred in the patent in suit.

pocket would chafe the body of the child, In the patent to Schiff, No. 833,849, the the change to a smooth flat band was an obelastic thigh bands (16) are “disposed in vious step for any who desired to take it and pockets formed for the purpose,

involved no invention. in order to avoid injury when the garment is The bill is dismissed, with costs. washed,” but they serve a similar purpose to those of the Guinzburg garment.

In the patent No. 36,125 to Higgins, the elastic bands are said to "fit sufficiently close to the child's thighs to prevent water from

1. B. KLEINERT RUBBER CO., Plaintiff-Ap. running over its own clothes or the dress of

pellant, v. POLKASE MFG. CO., Inc., and its nurse.” This patent is a very close ref- Nathan Kase, Defendants-Appellees. erence, and contemplates a garment of "thin

(Circuit Court of Appeals, Second Circuit. India rubber cloth,” though it is not clear

December 7, 1925.) that the bands are on the inner face of the

No. 116. leg or the waist openings. Indeed, the leg bands are apparently designed to be inserted

Appeal from the District Court of the in a sort of pocket. As the specification says, United States for the Southern District of the elastic of the bands of the legs is stitched New York. to the garment; "the fullness of the material

Archibald Cox, Joseph L. Levy, and C. being properly gathered around the band."

In the earlier Guinzburg patent, No. 1, Ellery Edwards, all of New York City, for 033,097, drawing strings are used to tighten appellant. up the edges of the waist and leg openings,

Schechter & Lotsch, of New York City instead of the elastic band with a shirred (J. Schechter and John L. Lotsch, both of backing. These drawing strings, rather than New York City, of counsel), for appellees. elastic bands at the openings, are the main Before ROGERS, MANTON, and differences between the earlier and later pat- HAND, Circuit Judges. ent of Guinzburg. It is to be noted that the patent in suit is not limited to a rubber gar- PER CURIAM. Decree (10 F.[20] 399) ment, and only claim 6 specifically calls for affirmed.

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COLBECK v. UNITED STATES

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10 F.(20) 401 COLBECK et al. v. UNITED STATES, and show that defendants were not at places where, three other cases. *

at times when, evidence tended to show they

were aiding and abetting, crime, as charged, by (Circuit Court of Appeals, Seventh Circuit. assisting in preparations for it, they were not December 8, 1925. Rehearing Denied injured if instructions "belittled and disparJanuary 13, 1926.)

aged" such defense. Nos. 3558, 3560, 3562, 3618.

9. Criminal law Ow117012(1)-Witnesses en 1. Criminal law em 1 149 Indictment and in

357–Exclusion of impeaching witnesses' tesformation 136–Motion to quash indict.

timony that they would not believe witness ment addressed to court's discretion, and

under oath, not error, and not prejudicial. decision not reviewable on writ of error.

Refusal to permit impeaching witnesses to Motion to quash indictment is always ad

state whether they would believe witness under dressed to discretion of court, and a decision dicial, where he was admitted convict, and ad

oath held not error, and in any event not prejuthereon cannot be reviewed on writ of error.

mitted his guilt in instant case, other witnesses 2. Indictment and information om 10_Convict had testified that his general reputation for

not incompetent witness, on whose testimony truth and veracity was bad, and no contrary indictment cannot be found.

testimony was offered by government. A person convicted of an infamous crime 10. Criminal law Om789(2)-Instruction deis not an incompetent witness, on whose testi- fining reasonable doubt held not erroneous. mony indictment cannot be found.

Instruction defining reasonable doubt held

not erroneous. 3. Indictment and information w 138—Motion to quash held bad as alleging mere conclu

11. Criminal, law ew1059(1)-Exception to in. sions and no facts.

struction held insufficient. Motion to quash indictment because it "was

Exception to "supplemental instruction not found

on legal and competent upon the subject of reasonable doubt" held inevidence, but was found and based wholly and sufficient to present any question for review. entirely on illegal, incompetent, and hearsay evidence,held bad on its face as alleging mere 12. Post office w49–Evidence held to sustain conclusions and no facts.

conviction of robbing persons in charge of

mail. 4. Criminal law Om 301-Indictment and infor.

Evidence of defendant's activity in preparamation mw 139—Refusal to permit withdrawal

tion for mail robbery, to be committed when of pleas of not guilty and filing of motion to quash indictment held within court's discre.

conditions warranted, justified conviction under tion,

Criminal Code, $$ 194, 197 (Comp. St. $8 Refusal to permit defendants, just before mail, though his presence at time of robbery,

10364, 10367), of robbing persons in charge of trial, to withdraw pleas of not guilty and file after date first intended, was not shown, and motion, sworn to on information and belief, to

court's instruction and refusal of defendant's quash indictment, returned on illegal, incompetent, and insufficient evidence, held within him were not erroneous.

instruction as to abandonment of enterprise by court's discretion. 5. Criminal law Om572-Essentials of defense In Error to the District Court of the of “alibi” stated.

United States for the Southern Division of Defense of “alibi” means that defendant the Southern District of Illinois. was away from scene when crime was committed, and hence could have taken no part in it,

William P. Colbeck, Oliver Daugherty, and, to be effective, it must appear that de Stephen Ryan, David Robinson, Charles fendant was elsewhere during all activities going to make up crime and show his connection Smith, Charles Lanham, Gustav B. Dietmeywith it.

er, Frank Hackethal, and Frank Eppelsheim(Ed. Note.-For other definitions, see Words

er were convicted of violations of Criminal and Phrases, First and Second Series, Alibi.] Code, SS 194, 197, and they bring error. 6. Criminal law m69-Accessories before the

Affirmed. fact are principals.

James E. Carroll and William Baer, both Under Criminal Code, $ 332 (Comp. St. § of St. Louis, Mo., and L. S. Harvey, of Kan10506), accessories before the fact are princi

sas City, Kan., for plaintiffs in error Colpals.

beck and others. 7. Criminal law Om 59(5)-Actual presence Thomas J. Rowe, Sr., of St. Louis, Mo.,

when crime is committed not essential to for plaintiffs in error Lanham and another. guilt of aiding and abetting.

Edmund Burke, of Springfield, Ill., for Actual presence when crime is committed is not essential to guilt of aiding and abetting plaintiff in error Hackethal. its commission.

Edward Pree, of Springfield, Ill., for 8. Criminal law ew 1172(1)— Instructions be. plaintiff in error Eppelsheimer. littling defense of alibi held not prejudicial.

Thomas Williamson, of Springfield, Ill., Where evidence of alibi went only to time and Horace L. Dyer, of St. Louis, Mo., for of actual robbery, ard no effort was made to the United States. *Petition of Hackethal for certiorari denied 46 S. Ct. 474, 70 L. Ed.

10 F.(20)-26

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