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UNITED STATES v. ASHCROFT MFG. CO.
(Circuit Court of Appeals, Second Circuit. February 8, 1910.)
No. 144 (2,041).

CUSToxis DUTIES (§ 25*)—CLAssi FICATION.—PRISMATIC GLAss. In Tariff Act July 24, 1897, c. 11, § 1, Schedule B, par. 110, 30 Stat. 158 (U. S. Comp. St. 1901, p. 1635), the provision for strips of glass ground or polished to “prismatic form” is not limited to strips so ground that a side in itself forms a prism, but includes also strips that fulfill the functions of a prism, as where there are ground in one side fine parallel longitudinal incisions forming prisms. [Ed. Note.—For other cases, see Customs Duties, Dec. Dig. § 25.”]

Appeal from the Circuit Court of the United States for the District of Connecticut.

For decision below, see 172 Fed. 449, which affirmed a decision by the Board of General Appraisers, which had reversed the assessment of duty by the collector of customs at the port of Bridgeport.

The merchandise in question consists of articles of glass which are designated in the record as “prismatic gauge glasses.” They are about 5% inches long, 11% inches wide, and five-eighths of an inch thick. The edges are ground, and one side is plain and polished. The reverse side is also polished, and contains fine parallel longitudinal incisions for prisms. These articles are used as parts of water gauges on steam boilers. The side having the incision is placed against a dark background, and as water rises in the spaces formed by the incisions it shows black, and its level is clearly indicated. The refraction of the light by the prisms is different when the spaces are filled with air and when they are filled with water. The collector assessed the articles under paragraph 100 of the tariff act of 1897 (Act July 24, 1897, c. 11, § 1, Schedule B, 30 Stat. 157 [U. S. Comp. St. 1901, p. 1633]), which reads as follows: “100. Glass bottles, decanters, or other vessels, or articles of glass, cut, engraved, painted, colored, stained, silvered, gilded, etched, frosted, printed in any manner or otherwise ornamented, decorated, or ground (except such grindings as is necessary for fitting stoppers), and any articles of which such glass is the component material of chief value, and porcelain, opal and other blown glassware; all the foregoing, filled or unfilled, and whether their contents be dutiable or free, sixty per centum ad valorem.” The Board of General Appraisers overruled the collector, and assessed the articles under paragraph 110 of said act, which reads as follows: “110. Strips of glass, not more than three inches wide, ground or polished on one or both sides to a cylindrical or prismatic form, and glass slides for magic lanterns, forty-five per centum ad valorem.” The Circuit Court affirmed the action of the Board of General Appraisers, and the government has appealed to this court.

D. Frank Lloyd, Deputy Asst. Atty. Gen. (John A. Kemp, Asst. • Atty., of counsel), for the United States.

McLaughlin, Russell, Coe & Sprague (Frederick C. McLaughlin, of counsel, and Edward P. Sharretts, on the brief), for the importers.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

NOYES, Circuit Judge (after stating the facts as above). The article in question is a “strip” of glass. It is “a narrow piece comparatively long.” Standard Dictionary. While not so ground that any sides in themselves form a prism, yet one side is so ground that prismatic forms are produced upon it. The strip of glass, though not a prism, fulfills the functions of one. That is its essential feature. As, then, this article is a strip of glass ground so as to constitute a prism and possesses optical properties, we think that it is more specifically described in paragraph 110, which is among the paragraphs relating to glass articles possessing such properties, than it is in paragraph 100, which would include it only because it is ground glass. The decision of the Circuit Court is affirmed.

*For other cases see same topic & S NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

MALDONADO & CO. v. UNITED STATES.
HENSEL. BRUCEMANN & LORBACHER v. SAME.
(Circuit Court of Appeals, Second Circuit. February 8, 1910.)
Nos. 121, 125 (4,448, 4,679).

CUSToxts DUTIEs 26*)—CLAssification—STEEL ForMs AND SHAPEs—HoRSESHOE CALKs—BALL BEARINGs. The provision for “steel in all forms and shapes,” in Tariff Act July 24, 1897, c. 11, § 1, Schedule C, par. 135, 30 Stat. 161 (U. S. Comp. St. 1901, p. 1638), does not include completed articles, such as horseshoe calks and ball bearings, to which nothing needs to be done to fit them for immediate use.

[Ed. Note—For other cases, see Customs Duties, Dec. Dig. § 26.”
For other definitions, see Words and Phrases, vol. 7, p. 6656.]

Appeals from the Circuit Court of the United States for the Southern District of New York.

For decision below, see 172 Fed. 170, in which the Circuit Court affirmed decisions by the Board of United States General Appraisers, which had affirmed the assessment of duty by the collector of customs at the port of New York.

The importations in dispute had been classified as manufactures of metal under Tariff Act July 24, 1897, c. 11, § 1, par. 193, 30 Stat. 167 (U. S. Comp. St. 1901, p. 1645), against the importers' contention for classification under the provision in paragraph 135, 30 Stat. 161 (U. S. Comp. St. 1901, p. 1638), for steel in all forms and shapes.

Brooks & Brooks (Frederick W. Brooks, of counsel), for importers.

D. Frank Lloyd, Deputy Asst. Atty. Gen. (William K. Payne, Asst. Atty., of counsel), for the United States.

Before LACOMBE, WARD, and NOYES, Circuit Judges (Maldonado Case), and LACOMBE and WARD, Circuit Judges, and HAND, District Judge (Hensel Case).

PER CURIAM. In these two cases, arising under the tariff act of 1897, the articles imported are, respectively, steel calks, for insertion in horseshoes, and ball bearings, consisting of raceways and balls, for use in automobiles. Nothing needs to be done to either to fit it for immediate use. The calk is merely screwed into the threaded hole provided in the shoe; the ball bearing is merely assembled with the

"For other cases see same topic & 5 NUMBER in Dec. & Am. Digs, 1907 to date, & Rep'r Indexes 176 F.—47

[graphic]

other parts to make up an automobile. We are satisfied that both are covered by our recent decision in Morris & Co. v. U. S., 174 Fed. 656 (Dec. 7, 1909), and not to be included within the provisions of paragraph 135.

The decisions in both cases are affirmed.

JOHNS-PRATT CO. v. SACHS CO. et al.
(Circuit Court, D. Connecticut. March 4, 1910.)
Nos. 1,305, 1,306.

1. Monopolies (§ 21*)—INFRINGEMENT—SUIT IN EQUITY-DEFENSES. That a holder of a patent is a party to an unlawful conspiracy, which tends to restrain trade and oppress the defendants in their business, does not afford a defense to a suit for infringement of the patent. [Ed. Note.—For other cases, see Monopolies, Dec. Dig. § 21.*]

2. EQUITY (§ 264*)—PLEADING—MoTIon to STRIKE OUT PART of PLEADING. In a suit in equity for infringement of a patent, a paragraph of the answer alleging that complainant is a party to an unlawful conspiracy, which tends to oppress defendants in their business, will be stricken out on motion. | Ed. Note.—For other cases, see Equity, Cent. Dig. §§ 536—540: Dec. Dig. $ 264.”]

In Equity. Action by the Johns-Pratt Company against the Sachs Company and another. Heard on motion to strike out a paragraph of the answer. Granted.

See, also, 168 Fed. 311.

The following is one of the paragraphs of the answer:

“(15) And these defendants, further answering on information and belief, say: That since November 14, 1905, and in or about the year 1907, the complainant, said the Johns-Pratt Company, wrongfully and illegally combined, conspired, and confederated against these defendants, and each of them for the purpose of wrongfully harassing and oppressing them in their lawful trade and business, diminishing the profits thereof, and destroying the same, with the General Electric Company, a corporation of New York, doing business at Schenectady, New York, the Westinghouse Electric & Manufacturing Company, a corporation of Pennsylvania, doing business at Pittsburg, Pennsylvania, the Bryant Electric Company, a corporation of Connecticut, doing business at Bridgeport, Connecticut, and the D. & W. Fuse Company, a corporation of Rhode Island, doing business at Providence, Rhode Island. That said complainant company, together with said named confederating companies, are all engaged in the manufacture and sale of protective devices similar in their general kind to the manufacture of defendants, and that said companies control a large proportion, to wit, about seventy-five per cent. of all the goods of that class sold in the United States. That pursuant to such wrongful conspiracy and confederation said named confederating companies entered into an agreement with each other by which, among other things, it was agreed in substance that the entire business of the said parties should be allotted to them severally, each to have its certain percentage of the whole, whether in any given period it actually sold more or less than such percentage; that uniform prices should be obligatory upon all of said parties; that any and all letters patent pertaining to the said fuse or protective device business of said parties should be amalgamated in the joint interest, and licenses thereunder from each of said parties to the others be interchanged at nominal figures; that a commissioner should be, and was, designated, who

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

should have and receive reports as to prices, business done, etc., and have power to control said business and to settle disputes, if any, between the parties; that a fund should be established by payment thereinto by each of said parties severally of sums agreed upon ; that alleged infringers of said patents, or any of them, might be sued; that the expenses of such litigation should be borne by such common fund ; that the recoveries from such litigation, if any, should be divided among said parties severally pro rata to the contribution severally to said common fund; that the title to said letters patent should remain as it was in said parties severally, but that the entire control. of litigation under said patents, as to the instigation of the same, settlement, etc., should be and was vested in a committee made up of representatives of said parties, or some of them; that the question as to whether such suits should or should not be brought was relinquished by said parties severally and vested in said committee. That pursuant to said wrongful conspiracy and confederation said named companies wrongfully agreed and conspired together and fixed prices, not only on fuses and fuse appliances alleged to embody such letters patent, or any of them, but on such devices as did not embody the inventions of any existing patent. That pursuant to said unlawful conspiracy and confederation it has been the purpose of said named parties, avowed to the trade and customers of these defendants, to put these defendants out of business by the establishment and maintenance of ruinous prices, by the instigation and maintenance through various counsel of a multiplicity of suits simultaneously against said defendants or the customers of said defendant corporation, and by threats and intimidation. That pursuant to said unlawful conspiracy and confederation said named companies, acting jointly as herein set forth, have maintained and brought some thirteen suits against said defendant corporation or its customers. That pursuant to said conspiracy and unlawful confederation said named companies, acting jointly, have for the time being ruinously lowered prices on the goods involved, for the purpose of and with the intent of depriving defendants of their trade and business and wrongfully destroying the same, said prices to be thereafter by said parties raised to normal or higher level. That pursuant to said conspiracy threats have been made against the customers of said defendant corporation, and false reports as to said defendant corporation and its business have been spread. That the bringing and prosecution of said suits, including this suit, is the result of and for the purpose of carrying out said unlawful conspiracy and the unlawful agreements thereunder. That said unlawful conspiracy and confederation, and the acts thereunder, has caused and is causing these defendants, and each of them, great and irreparable damage and injury. That the object of said unlawful conspiracy and confederation is the wrongful crippling of said defendants in their said business and its ultimate destruction, the unlawful restraint of trade in the devices and appliances referred to, and the wrongful and illegal monopolizing in said named Companies of all, or substantially all, of the said business in the United States. Wherefore said bill of complaint is without equity and should be dismissed.”

Wetmore & Jenner and Oscar W. Jeffery, for complainant. Bartlett, Brownell & Mitchell and Henry B. Brownell, for defendants.

PLATT, District Judge. The paragraph of the answer above set forth is the cause of this contention. It has been excepted to as impertinent, and a motion to strike it out has also been entered, charg— ing that it is impertinent, immaterial, and irrelevant. ... The question of law which stares us in the face is this: Does an allegation that the complainant is a party to an unlawful conspiracy, which tends to restrain trade and oppress the defendant in its business, afford any defense to a suit for the infringement of letters patent, the title to which is vested in the complainant?

This question has been answered in the negative by the courts with

such unanimity and decisiveness that it would be wasted energy for me to do more than cite National Folding Box & Paper Co. v. Robertson (C. C.) 99 Fed. 985, in which my very dear friend, the late Judge Townsend, examined the matter with care. I trust that no one will deem it indelicate on my part to avail myself of his efforts. At the hearing last fall no attempt was made by counsel for the defendants to analyze and explain the weakness of the decisions; but it was contended that, if the paragraph should be stricken out, the rights of the defendants on final hearing would be curtailed.

I am not of that opinion. To leave the paragraph in, because it sets up an alleged substantive defense, which has been, time and again, decided by the courts to be a futile defense, would be, to my mind, an idle thing and a travesty. If it shall so happen that upon final hearing the issues shall be decided against the defendants, it seems to me to be obvious that the action of the court with regard to the objectionable paragraph, if wrong, could be remedied on appeal.

The motion to strike out is granted.

This ruling applies, mutatis mutandis, to the similar motion in No. 1,306.

In re EAGLE STEAM LAUNDRY CO. OF QUEENS COUNTY.
(District Court, E. D. New York. February 4, 1910.)

BANKRUPTCY (§ 184*)—SECURED CREDItoRs—VALIDITY OF MORTGAGE.

Chapter 6SS of the Laws of New York of 1892, as amended by chapter 354 of the Laws of 1901 (now section 6, c. 59, Consol. Laws [Laws 1909, c. 61]), provides that a stock corporation may borrow money and mortgage its property on the consent of not less than two-thirds of the capital stock in writing, and that a certificate of consent shall be filed and recorded in the office of the clerk or register of the county wherein the corporation has its principal place of business. The owner of a laundry business transferred his business to a corporation organized by him, subject to a chattel mortgage held by his wife. Thereafter the mortgage was renewed, but no consent of two-thirds of the stockholders was obtained, and the new mortgage was given within four months prior to bankruptcy. Held, that the mortgagee must be left as a general creditor of the estate.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 184.”]

Proceeding in the matter of the Eagle Steam Laundry Company of Queens County, a bankrupt. A mortgagee determined to have no rights save as a general creditor.

Wyckoff, Clarke & Frost, for claimant.
Robert McC. Robinson, for trustee. o

CHATFIELD, District Judge. One Thomas Meany organized a laundry corporation, now in bankruptcy, and transferred his own business to that corporation, subject to a chattel mortgage of $1,500 held by his wife. The original validity of this chattel mortgage is not disputed. At the time of the transfer Mrs. Meany took $1,000 in stock for an additional claim held by her, and apparently agreed to renew her mortgage when the time of expiration came around. The or

*For other cases see same topic & S NUMBER in Dec. & Ann. Digs. 1907 to date, & Rep’r indexes

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