« ForrigeFortsett »
husband had understood about the reduction, accepted the money, signed a receipt upon the certificate for that sum, and delivered the instrument for cancellation. This suit is brought to recover the difference between the amount thus received and the face of the certificate; the ground of recovery being that the by-law has been declared unlawful by the Court of Appeals of this circuit, and that the settlement was invalid, because the plaintiff was deceived by a statement that her husband had agreed to the reduction, while the fact was that he had always paid the assessments at the reduced rate under protest. At the trial the certificate was produced by the defendant under compulsion of a subpoena, and the plaintiff attempted to offer it in evidence against the defendant's objection, which went not only to the paper itself, but to the whole of the evidence that sought to invalidate the receipt. I admitted it provisionally, reserving the further consideration of the objection until the matter could be more fully argued. The argument has now been had, and the result has been, as I have already stated, to satisfy my mind that the plaintiff should have proceeded by bill in equity to attack directly the receipt and the cancellation of the certificate. Even in the courts of Pennsylvania, where equitable defenses are freely permitted in actions at law, the remedy by bill has been decided to be the proper proceeding under such circumstances as are now presented. Blair v. Supreme Council, etc. (a case recently decided, and not yet officially reported) 57 Atl. 564, was almost identical in its facts, and offered the Supreme Court of the state an opportunity to say that, although an action at law might perhaps be sustained, nevertheless such an action would not be an adequate remedy, while a bill in equity would afford complete and appropriate relief. As is well known, the distinction between law and equity is much more carefully preserved in the federal courts, and the power of a court of law to hear evidence of the character offered by the plaintiff has been expressly denied by the Supreme Court of the United States. In George v. Tate, 102 U. S. 570, 26 L. Ed. 232, where, in an action upon a bond, it was set up as a defense that the obligors had been induced to sign the instrument by fraudulent representations concerning a suit in attachment, the court said:
"Proof of fraudulent representations by Myers & Green, beyond the recitals in the bond, to induce its execution by the plaintiff in error, was properly rejected.
"It is well settled that the only fraud permissible to be proved at law in these cases is fraud touching the execution of the instrument, such as misreading, the surreptitious substitution of one paper for another, or obtaining by some other trick or device an instrument which the party did not intend to give. Hartshorn et al. v. Day, 19 How. 211, 15 L. Ed. 605; Osterhout v. Shoemaker and others, 3 Hill, 513; Belden v. Davies, 2 Hall, 433; Franchot v. Leach, 5 Cow. 506. The remedy is by a direct proceeding to avoid the instrument. Irving v. Humphrey, 1 Hopk. 284."
This is a decisive authority upon the question, and requires me to set aside the verdict and grant a new trial. It is unnecessary, therefore, to consider the further question whether the plaintiff can attack the receipt without offering to return the money already paid. In
an action of tort, where it was charged that a settlement had been obtained by fraud, it has been held that an offer to return the money paid must be proved before the settlement can be avoided (Hill v. Railway Co., 113 Fed. 914, 51 C. C. A. 544); but the rule may not apply where the money paid is conceded to be due in any event.
A new trial is granted. The plaintiff may suffer a voluntary nonsuit, or discontinue on payment of costs, without prejudice in either case to her right to sue in equity.
ENCYCLOPÆDIA BRITANNICA CO. v. AMERICAN NEWSPAPER ASS'N et al.
(Circuit Court, D. New Jersey. June 28, 1904.)
1. COPYRIGHT VIOLATION OF INJUNCTION AGAINST INFRINGEMENT-CONTEMPT PROCEEDINGS.
One defendant company was publisher of an encyclopædia, and the other was engaged in soliciting orders for the same, which were filled by it with books obtained from the publisher. A temporary order was granted against both defendants, restraining them from selling or delivering sets containing certain articles alleged to infringe complainant's copyright, and no more of such volumes were thereafter shipped by the publisher. The second company had agencies in different cities, each in charge of a manager, whose duty it was to report each order taken to the company, without whose approval no delivery was authorized to be made thereon. At once on service of the order all managers were notified not to make further deliveries of the volumes involved, but that they might continue to take orders, which would be filled as to such volumes after the court's order should be vacated or the infringing matter eliminated by the publisher. Within the week following service of the order, certain persons employed for the purpose by complainant obtained from such defendant delivery of four sets or parts of sets containing articles within the prohibition, each in a different city, two through a misunderstanding of the manager as to the volumes affected, and two from subordinate employés, having no knowledge of the order, in the absence of the manager, and in each case in violation of the rules of the defendant, and without waiting for the usual instructions, because of urgent demand for immediate delivery. Held, that such facts did not warrant an adjudication that either defendant was guilty of contempt, in the absence of any evidence tending to show that the violation of the order was intentional.
In Equity. On rule to show cause why defendants should not be punished for contempt.
Frederic R. Kellogg and John M. Dickinson, for complainant.
LANNING, District Judge. On June 2, 1904, upon application of the complainant, a rule was allowed requiring the defendants, the American Newspaper Association and the Werner Company, to show cause why a preliminary injunction should not be issued against them. With the rule went an ad interim order restraining the defendants from offering for sale or selling any sets of the Encyclopædia Britannica, heretofore published and sold by the defendants, containing certain
articles on "Galveston," "Georgia," and 17 other subjects, like or substantially like other articles on the same subjects copyrighted under the laws of the United States and published in the complainant's edition of the Encyclopædia Britannica. The affidavits used on the hearing show that, after the restraining order was served on the defendant corporations, four sets of the enjoined volumes were sold and delivered to four persons, one in Philadelphia, one in Pittsburgh, one in Washington, and one in Chicago. The question now to be considered is whether either of the defendant corporations has violated the restraining order and contemned the authority of this court.
The Werner Company has its factory in Akron, Ohio. Paul E. Werner, the president and general manager of the company, first learned of the existence of the restraining order at 2 o'clock in the afternoon of June 3d, in the city of New York. He immediately telegraphed to the factory at Akron to make no shipments of the enjoined books until further instructions from him. The telegram was received by the assistant superintendent about 7 o'clock in the evening of June 3d, and he immediately communicated its contents to the employé having sole charge of the shipping department. It appears, further, that, by the Werner Company's method of conducting its business, no one is authorized to deliver any volume or volumes of the Encyclopædia except upon a written order from Otto G. Schultz to the person in whose charge such volume or volumes may be, and that Schultz gave no order to any person whomsoever for any of the enjoined volumes after June 3d. These statements are sworn to by Paul E. Werner, the president, Edward P. Werner, the assistant superintendent, Otto G. Schultz, the order clerk, and Herman Werner, the shipping clerk. Other statements are sworn to by them, none of which are controverted, which make it clear that the persons who sold and delivered the inhibited volumes did not represent the Werner Company, and that none of these volumes were sold or delivered with the consent or knowledge of any of the officers or employés of the Werner Company.
The business of the American Newspaper Association is, amongst other things, the securing of orders for the Encyclopædia Britannica published by the Werner Company. It has offices in 11 of the principal cities of the United States. Each of these offices is in charge of a manager who hires salesmen to solicit subscription contracts for the Encyclopædia. Every contract received is turned over to the proper manager, who forwards it to the central office of the Newspaper Association in New York City. From this office instructions are forwarded to the managers, and no manager or other person has authority to deliver books upon any contract until after instructions concerning such contract are received. The restraining order was served on the association on June 3d, and on the same day it sent a letter to each of its 11 managers, advising them of the issue of a "temporary injunction,' and saying:
"If the case cannot be brought up for decision in court immediately, The Werner Company will simply hold back the six or seven volumes in which the copyrighted articles appear, when making shipments to subscribers, and will prepare entirely new articles to take the place of these few pages, and the
volumes referred to will be shipped later. It is not necessary for the managers to send notice to all the agents or say anything to the agents about it unless the agents mention it to the managers. The agents can go right ahead and take orders just the same as before, and The Werner Company will explain to the subscriber when shipment is made that the other volumes will follow in a short time. This should not in any way interfere with the book."
This letter has been severely criticised by the counsel for the complainant. But it violates neither the letter nor the spirit of the restraining order. Nothing was prohibited by that order except the sale and delivery of volumes containing the articles which the complainant insisted were infringements of its copyrighted articles. The letter shows conclusively that those volumes were to be withheld from sale and delivery until a decision favorable to the defendants should be had, or until new articles should be substituted for the alleged infringing ones. The proofs do not show whether the managers keep on hand a supply of the sets of defendants' Encyclopædia. It is quite probable they do. But even so, they had no authority to deliver any sets except upon instructions from the New York office to do so. At the time the restraining order was served, this rule of business concerning the delivery of books had never been departed from. I am satisfied that neither the officers of the American Newspaper Association, nor its agents at the central office in New York, had any reason to suspect that it would be departed from after such service.
The suggestion of complainant's counsel that it was the duty of the association, immediately upon receiving notice of the restraining order, to telegraph its managers and agents in other cities not to deliver the books in question, is answered by these facts: James L. Armstrong, the manager of the Philadelphia office, understanding that the injunction applied only to the last 6 volumes of the set of 31 volumes, caused the first 25 volumes of the set to be delivered to Walter G. Mulliner on June 6th. In Washington, on June 9th, a full set of 31 volumes was delivered to Lewis T. Hooper by a lady clerk in the Washington office, who had no knowledge of the restraining order, and who made the delivery during the absence of the manager of that office in Richmond, On June 7th the bookkeeper at the Chicago office, having no knowledge of the restraining order, and while the manager of that office was absent on account of the sickness of his father, delivered a full set of 31 volumes to Olinius Olson. And on June 10th William H. Pittenger, the manager at the Pittsburgh office, understanding that the restraining order applied only to the last five or six volumes of the set, delivered the remaining volumes of the set to Thomas M. Reed. Each of the four persons making these deliveries swears that no authority for such deliveries existed, and that they were made, without waiting for the usual orders or instructions from New York, only be cause of urgent demands for immediate delivery. They each further swear that they have never delivered any other sets or parts of sets to any persons whomsoever without the customary authority. The complainant admits that it employed Mulliner and Olson to purchase the books that were delivered to them. The books obtained by Hooper and Reed were doubtless purchased by like authority. In each of these four sales the circumstances were unusual, and were made so by the com
plainant alone. Such sales were unprecedented in the business of the American Newspaper Association, and as soon as its officers learned of the sales they telegraphed instructions to all their managers not to deliver any sets of the Encyclopædia except on explicit orders from the New York office.
The facts do not warrant an adjudication that either of the defendant corporations is guilty of contempt, and the rule to show cause will be dismissed, with costs.
MUNFORD RUBBER TIRE CO. v. CONSOLIDATED RUBBER TIRE CO. et al.
(Circuit Court, S. D. New York. May 12, 1904.)
1. REMOVAL OF CAUSES-REMOVAL BY ONE OF SEVERAL DEFENDANTS.
An action brought in a state court against a number of defendants, all of whom are citizens of other states, is removable by any one of the defendants, although it involves but a single controversy.
On Motion to Remand to State Court.
Wallach & Cook, for the motion.
Mr. Humes and C. W. Stapleton, opposed.
COXE, Circuit Judge. The plaintiff is a citizen of Georgia; the defendants are citizens of other states, none of them being a citizen of Georgia. We have then a controversy wholly between citizens of different states. I am unable to distinguish this case from Ins. Co. v. Champlin (C. C.) 21 Fed. 85. Subsequently followed in this circuit in Garner v. Bank (C. C.) 66 Fed. 369, and Trust Co. v. Mackay, 70 Fed. 801.
The motion to remand is denied.
1. Diverse citizenship as ground of federal jurisdiction, see notes to Shipp v. Williams, 10 C. C. A. 244; Mason v. Dullagham, 27 C. C. A. 298.
See Removal of Causes, vol. 42, Cent. Dig. § 90.