[94]

pole of this battery-I think the negative pole
-is connected to the earth.

A conductor is attached to the other or positive
pole of the battery, consisting of an insulated wire
extending along parallel with the track upon
poles. This wire which I examined extended
toward Boston, the end remote from Chelsea
being disconnected, or, as it is termed, open.
A second conductor, consisting of another simi-
lar wire insulated and attached to the same
poles, was arranged parallel to the first one.
The second wire was open at Chelsea and con-
nected with the earth at its remote end.

Mr. Moses G. Farmer, an expert witness o behalf of the complainants, makes the sam comparison, with the result, according to hi opinion, of establishing that the defendan system is essentially the invention described i the patent.

On the other hand Prof. Henry Morton, a expert witness on behalf of the defendants points out two particulars in which the pla as practiced by the defendants and shown i Exhibit C differs from that of the Pope paten so materially that they cannot be considered substantially the same.

The first of these is that, in the patent, insu lated sections of the railroad track, used, whe covered by a locomotive or cars, as a circui closer, are made essential to the combination claimed, while they are dispensed with in th Hall system, other and independent circui closers being employed.

The second is thus described by Prof. Mo ton in his testimony:

The first mentioned wire I have shown in the diagram, and marked 'positive conductor;' the second wire is marked negative conductor.' At a short distance from the station a semaphoric signal is placed, consisting of a red disk balanced upon a lever. This was placed in the cupola of a small building at the side of the track. An electro-magnet was arranged with its armature attached to said lever, so that when brought into action the red disk on the other "I also find a difference between the pla end of the lever would be moved into a position described in the patent and that shown in Ex to render it visible through an opening in the hibit C in another regard: in the plan of th cupola. A latch or detent was placed in a po- patent the conductors C and Z are connecte sition to fasten the lever after the action of the respectively with the positive and negative pole magnet had ceased, and thus continue the ex-of the battery, or, as the patent itself states hibition of the signal. A circuit closer was 'are virtually prolongations of the positive an placed upon the track at a point near the sig-negative poles of the battery.' nal, which consisted of a lever so placed as to In the plan shown in Exhibit C, however be depressed by the wheels of a passing train, the conductor C, or positive conductor only, which movement caused the circuit to be closed connected with the battery, the other conduc by pressing two springs together. When the or Z, or, as it is called, negative conductor, hay circuit was thus closed by a passing train a con- ing no connection with the battery. In cons nection was formed between the positive and quence of this difference of arrangement, i negative conductors, and the electric current, the system of the patent, the positive conducto in passing from one to the other, passed through C carries the positive current in one directio and operated the magnet by which the signal away from the battery; and the other, or nega was displayed. At a point perhaps a mile dis- tive conductor Z, brings the positive current i tant, another signal was arranged in precisely the opposite direction, or back to the battery the same manner, in connection with a second and thereby involves the production of circui eircuit closer and the same positive and nega- of different resistance for each station. In th tive conductors. An additional circuit closer, placed upon the track in the vicinity of this, fast named signal, was arranged to form & connection from the positive to the negative conductor by the way of a third wire running up on the poles back to the signal first mentioned, where it passed through and operated a second magnet, which lifted the latch or detent and allowed the disk to return to a position concosling it from view. Lexamined two of these signals and saw many others along the line of road.

I find in this arrangement thus described the ombination claimed in the first chars of said parent, consisting of a battery in combination with positive and negative conductors, rice er more oloctro-magneis for opening VisaL, SA nals and two or mor occult closes piscet si intervals along the line of the railroad sise the combination olsimed in the second cisim of the parent, consisting of a batteme ir combine tion with postave and negator contactors, zwe. or more electromagnes for SEVERAL VISIE stensis, and (wo or more Ecreuit closers placed #intervals along the line of the macbat. « nisë find the cow dinsdor, ol, moč in the thiri cisim. of a dadog, poslove and neghíve conductas, ★ olteni olaser, and electro-Magnet Že seraie ing a signal with 1 seconě, čiroïni olase, wires, and a magnet for reversing sač signs.”

system represented in Exhibit C, on the othe hand, both the conductors C and Z serve t carry the positive current in the same dire tion away from the battery, and should there fore properly be both called positive condu tors As a result of this arrangement the cu rent always passes through the same or equal ci cats no maiter at which station the connectio is made, simply changing from one to the othe of these equal parallel wires at the station wher the contact is effected.

It is for this reason that in this system n equalization of resistance, in the sense involve in the description of the patent, is required."

It is upon these two points that the questio of infrin gement depends.

In considering them it is important to bea în mind that the patent is for a combinatio meray, in which all the elements were know and open to public use. No one of them clamed to be the invention of the patented He does not claim them himself as separat in vendons. It is simply a new combination o oìà små well-known devices, for the accom pishment of a new and useful result, that cis met to be the invention secured by th patent. And the well-seded principles of la heretoftet sonded to the construction of paten faz combinsitions merely, must apply and go ern. 1. the present case.

f the patented combination was shment of a particular result, that 45 exetric signals on what was known system, by means of circuits, gle battery instead of many. or idea is not monopolized by The thing patented is the particudevised by the inventor by which ained, leaving it open to any to accomplish the same result by To constitute identity of inven**▲ Lefte infringement, not only must aaed be the same, but in case the for its attainment is a combination ements, the elements combined in must be the same, and combined ay, so that each element shall perfunction, provided, however,

2

every

railroad track thus repeatedly appears in
part of the specifications as an unchangeable and
characteristic feature of the invention, and there
is nothing in the state of the art at that date, as
disclosed in the evidence, to show that the pa-
tentee would have been justified in applying,
or that, if he had applied, an application would
have been sanctioned by a grant of a patent for
a combination as large and undefined as that
now claimed by implication and construction,
so as to cover every form of a circuit-closer
then known or thereafter invented. For that
employed by the defendants as part of the Hall
system was not only not known and in use at
the date of the patent, but was a device invent-
ed by Hall himself or one by Snow, for which
the latter obtained a patent dated October 21,
1873. It dispenses altogether with the use of
s alleged are not merely col-insulated sections of the track, and employs in-
2 to the rule forbidding the use stead a separate instrument placed near the
equivalents.
track, and worked by means of a lever con-
nected with the track, so that the wheels of lo-
comotives and cars passing on the track depress
the outer end, the lever being raised again and
held up after the train has passed by means of
a spring which holds it in place.

estion we have to consider upon
fringement is, whether insu-
cf the rails, as circuit closers, con-
al element in the combinations
the patent. And that question we
crazed to answer in the affirmative.
ated sections of track are shown
on the drawing which accompa-
cation, and in its descriptive part
erred to as parts of the arrange
"At intervals of, say a mile,
sections of the said track, a, a, a,
ly insulated from the remainder in
⚫ vel understood, and therefore re-
detailed description." And again:
of the insulated sections of track, a, a1,
raced at some point at or near which
erect a signal, and any required
may be employed to meet the
of any particular case." And in
he operation of the apparatus, it
Upon reaching the point a, the
Axles of the train will form an
ection between the opposite in-
On the second branch of the issue as to in-
Upon reaching the point a', fringement, we think the case is quite as clearly
the circuit by the train will in like for the defendants. In the patent, the entire
the signal attached to M' to be circuit, operated by the single battery, and which
d the signal last displayed by M is closed at intermediate points for the purpose
It is true that the patentee of displaying and concealing the signals, is de-
the specification: "I do not de- scribed as formed by means of two wires or
elf to the use of any partic- other conductors, C and Z, attached to the posi
real or audible signals, nor to the tive and negative poles of the battery,extended
Lerein described for closing to any required distance in a direction parallel,
at points from which a signal or nearly so, to the line of the railroad. These
but that he does not thereby wires may be placed on poles, it is said, and
mention of dispensing with insu- should be suitably insulated from each other and
of the tract, as a necessary part from the earth, and they are declared to be vir-
ming and closing the circuit, tually prolongations of the positive and negative
at immediately follows: "In- poles of the battery. Throughout the two con-
being closed automatically ductors are designated as metallic, and insulat-
may be closed by a signal-ed from the earth, and they are embraced under
fakey, or switch, or other- that description in each of the claims. On the
Are evidently implies that the other hand, the defendants' plan does not in-
of the track are constant fac- clude a metalic circuit, composed of two con-
the only alternatives proposed ductors, as thus described, but uses a circuit com-
frace, net tó a substitute for them, posed in part of the earth itself. The material
her mode of using them in difference in the principle or mode of operation
So in each of the three of the two plans, as distinguished in this par-
arui ci sers a, a', a', or one or ticular, is indicated by Prof. Morton in the ex-
en are expressly named as part of tract from his testimony already quoted. It will
Camed as the invention of the become more apparent on further explanation.
* The ase of insulated sections of the The object proposed by the plan of the pa-

Upon this point, the case seems to fall clearly within the rule declared in Prouty v. Ruggles, 16 Pet.,336; Silsby v. Foote, 14 How., 217; McCormick v. Talcott, 20 How.,402 [61 U. S., bk. 15, L. ed. 930]; Vance v. Campbell, 1 Black, 427 [66 U. S., bk. 17, L. ed. 168]; Eames v. Godfrey, 1 Wall., 78 [68 U. S., bk. 17, L. ed. 547]; Dunbar v. Meyers, 94 U. S. 187 [Bk. 24, L. ed. 34]; Fuller v. Yentzer, 94 U. S. 288 [Bk. 24, L. ed. 103]; Imhaeuser v. Buerk, 101 U. S., 647 [Bk. 25, L. ed. 945]; Gage v. Herring, 107 U. S., 640 [Bk. 27, L. ed. 601]; Seymour v. Osborne, 11 Wall., 516 [78 U. S., bk. 20, L. ed. 33]; Gould v. Reese, 15 Wall., 194 [82 U. S., bk. 21, L. ed.41]; Gill v. Wells, 22 Wall., 1 [89 U. S., bk. 22, L. ed. 699]; McMurray v. Mallory, 111 U. S., 97 [Bk. 28, L. ed. 365]; Fay v. Cordesman, 109 U. S., 408 [Bk. 27, L. ed. 979].

[98]

[99]

and a new result. The two wire conducto are not the same, for, in the patent, one con ducts positive electricity, the other retur the current and completes the circuit, while, i the other, both the metallic conductors carr the current forward while the earth returns i and in this mode the desideratum is obtained o securing equality of resistance by making a the circuits equal in size.

The device cannot be regarded as a substitut or an equivalent for anything contained in th complainants' patent. It is of itself an ind pendent invention, and, as such, forms the sol subject of a patent granted to Hall and Snow July 13, 1875. To explain more satisfactoril the mode of its operation, so as to show that differs substantially from the arrangement the complainants, the descriptive parts of th Hall and Snow patent and the attached drav ings are here given:

tent is, to operate with one battery instead of several, along the line of a railroad, an electric circuit of considerable length, divisible into a number of subsidiary circuits, for the display of signals at many stations, by means of circuit closers operated automatically by passing trains, in definite and predetermined succession. It is obvious that the battery must have sufficient power, being placed at one end of the entire circuit, to operate efficiently at the other extremity. The force necessary for that purpose would be much greater than would be needed for the subsidiary circuits, all of which, it will be observed, are different in length; and this difference of force in the battery might be so great, owing to the required length of the whole circuit, as, when expended upon a shorter intermediate circuit, to destroy its capacity for working the signals by overheating. It becomes, therefore, a matter of importance, in some way, to equalize the resistance of these varying circuits. The patent itself contemplates "In the drawing, the letters A this necessity, and undertakes to make pro-B designate two wires which exvision for it. It is said in the specification that tend along the line of a railroad "the respective resistances of the several circuits track, or in other words form the should be so adjusted that they will be as nearly line wires of a telegraph line. as possible equal to each other, as a much more The wire A connects by a wire, perfect action of the apparatus will be secured 10, with one-say, the positive thereby." The specification does not point out-pole of a galvanic battery, G. any particular methods for that purpose, but it is stated in the evidence of experts that such means were well known at the time and in common use; such as by varying the dimensions of the wire on the magnets, or the introduction of resistance coils into the nearer circuits. These devices would be independent of the apparatus [100] described in the patent, and would have to be adjusted to the peculiar situation of each line of signals in practical use.

and the other pole of this battery
connects by a wire, 11, with the
ground. The battery G is sup-
posed to be situated at one end of
the line, and at the opposite end
of said line the wire B is made to
connect by a wire, 12, with the
ground. Along the line are dis-
tributed a series of keys or cir-
cuit closers, C D, each of which
In the Hall system, as used by the defendants, is connected with the line wires,
no such necessity exists. According to that A B, the connection of the cir
plan, there is no necessity of equalizing the re-cuit closer C being effected by
sistance of the several sub-circuits, for they are
all exactly equal by their construction, as the
electric fluid in working the signal at any point,
when a sub-circuit has been formed by a circuit
closer, nevertheless traverses the whole extent
of the large circuit, and returns by means of the
connections formed by the earth to the battery.
So that, in effect, the Hall plan forms its appa-
ratus, counting the connection through the
earth, as though it were a continuous wire, as
it might be, by means of three lines of con-
ductors, of which two are combined by con-
necting wires with the magnets which oper-
ate the signals, at points where the circuit is
closed for that purpose, carrying the positive
electricity throughout the whole distance to the
extreme point of the entire circuit, and then re-
turning it by the third line, which is the con-
nection by means of the earth. And, inasmuch
as a wire might be used for this purpose, in-
stead of the earth, it would then show three
metallic conductors; and Mr. Farmer, the
complainant's expert, is quite right in saying,
as he does, that the equalization of the resis-
tances in the several sub-circuits, accomplished
in the plan of Hall, "is due to the arrangement
of the wires wholly, and not at all to the fact that
the earth is used as a portion of the conductor."
This arrangement is altogether unlike that of
the patent. It introduces into the plan of the
defendants new elements, a new combination,

wires 13 and 14, and that of the circuit close
D by wires 15 and 16. If the circuit is close
through the circuit closer C, the current passe
from the battery through wire 10, line wire
wire 13, circuit closer C, wire 14, line wire H
and wire 12 to the ground, and through th
ground and wire 11 back to the battery. If th
circuit is closed through the circuit closer I
the current from the battery passes throug
wires 10, A, 15, circuit closer D, wires 16, E
and 12 to the ground, and through the groun
and wire 11 back to the battery.

"From these two examples it will be seen the whenever the circuit is closed along the line th electric current has to traverse the whole circui and consequently the resistance is the same i all cases."

It thus clearly appears that the difference i this particular between the invention claime by the complainants and the alleged infringe ment is a difference in the arrangement of th parts and in the principle of the combination with different elements performing differer functions; and that the difference is somethin more than the mere substitution of a connectio by means of the earth for one of the conductin wires. The case is, therefore, clearly distin guishable from that of Electric Tel. Co. v. Bret 10 C. B., 838, cited and relied on by counsel fc the appellants as in point, where the substitu tion of the earth for a wire as a conductor, be

*** difference, was held, under the patent laws, not to be sufficient to dety between the two competing sie zstituted in that case the intrnet auered, although the patent itself fretallic conductors. Were that bence between the two plans under in the present case, there might view of our own patent laws, pentee had not made a wholly a necessary part of his combidetermined by considerations which thought it necessary to bring into * Mangapon that point. For, as we erence on which we ground that the defendants are shown frisged the complainants' patent, Lar, is, not merely that they have for the return of the current that the fruit, instead of a metallic conLey have arranged their conree to the battery, the magnets, the earth, upon such a system, nis à relations and connections, that, eber signals by a single battery the

alized as to resistance; while

securities which a customer wanted to buy. His
statement to a person who was in treaty to pur
chase, that the bank was not the owner of a certain
security in his manual possession as cashier, was
clearly within the line of his duty, and was binding
on the bank.

its cashier and appearing with reasonable certain-
3. A letter, written upon the paper of a bank by
ty to have referred to its business, is admissible in
evidence against the bank.

4. Proof of the insolvency of a debtor is no more
competent to show non-payment, than proof of his
solvency is competent to show the payment of his
debts.

of his debtor as agent, trustee or bailee, cannot,
5. A creditor having possession of the property
without legal process or the consent of the debtor,
dispose of the property and apply the proceeds
upon the debt.

6. A bank, having in its possession shares of its
own stock which belong to one who is indebted to
it, cannot sell such stock and apply the proceeds to
the payment of the debt.
[No. 1251.]

Submitted Mar. 9, 1885. Decided Mar. 30, 1885.

IN ERROR to the Circuit Court of the United

States for the Southern District of Ohio.
The history and facts appear in the

Statement of the case by Mr. Justice Woods: intiffs the circuits are of un- The defendants in error were the plaintiffs in resistance, requiring for success- the Circuit Court. They alleged in their petimase tue equalization of the resist- tion that the plaintiff in error, The First NationTeated by means of independent and al Bank of Xenia, Ohio, being in possession of teries. One plan proceeds upon the thirty shares of its own capital stock belonging a circuits, to be afterwards equal to their intestate, Daniel McMillan, on October ter adopts and embodies the idea of 24, 1876, sold them for $4,200 in cash, and Lecessity of subsequent rectifi- unlawfully appropriated the proceeds of the rial adjustment of equal resist-sale to its own use. They therefore demanded e difference is inherent in the two judgment against the Bank for $4,200, with in“uits and is substantial. terest from October 24, 1876. mend that, in the two points menDefendants' system of signaling is to be an infringement of that deparent of the appellants, the de« Arruit Court dismissing the bill is

,.

The defendant answered that McMillan, the
intestate, in April, 1876, was owing it, upon a
debt previously contracted, a sum greater than
the value of the stock, and, being so indebted,
delivered to it the certificates of stock as collat-
eral security therefor, and that on October 24,
1876, the debt being still unsatisfied, the defend-
H.M. Kenney, Clerk, Sup. Court U. S. ant sold the stock at its market value and ap-

plied the proceeds as a credit on the debt, leav-
ing a balance due and unpaid.

The plaintiffs replying denied that their intes-
NATIONAL BANK of XENIA, OHIO, tate delivered the certificates of stock to the

Pf. in Err.,

Bank as collateral security for such debt, and denied the right of the Bank to receive the cerSTEWART AND MARTHA A. stock or apply its proceeds to the payment of tificates as collateral security, or to sell the

AN Admrs, of the Estate of DAN-
LAN, Deceased.

S&C. Reporter's ed., 224-233.)

the debt.

Upon this issue the jury returned a verdict for the plaintiffs, and assessed their damages at $6.035.50 upon which the court rendered the judgment which the present writ of error brings under review.

Mr. John Little. for plaintiff in error:
The declarations of McClure were incompe-
tent, being the mere declarations of an agent
concerning a past transaction.

Wharton's Ev., § 415 and note 6; Morse,
Bkg., ed. of 1870, pp. 179, 180; 37 Me. 519; 2
Hill, 445; 10 Vesey, 123; 52 Me., 531; Ander-
son v. R. R. Co., 54 N. Y., 334; 1 Greenl. Ev.,
S 113; Luby v. R. R. Co, 17 N. Y., 131; First
Baptist Church v. B. F. Ins. Co., 28 N. Y., 153;
Packet Co. v. Clough, 20 Wall., 540 (87 U. S.,
bk. 22, L. ed. 408); Burnside v. R. Co., 47 N.
H., 554; C. C. & C. R. R. Co. v. Mara, 26 Ohio
St., 185.

[225]

[100]

tent is, to operate with one battery instead of
several, along the line of a railroad, an electric
circuit of considerable length, divisible into a
number of subsidiary circuits, for the display of
signals at many stations, by means of circuit
closers operated automatically by passing trains,
in definite and predetermined succession. It is
obvious that the battery must have sufficient
power, being placed at one end of the entire
circuit, to operate efficiently at the other ex-
tremity. The force necessary for that purpose
would be much greater than would be needed
for the subsidiary circuits, all of which, it will
be observed, are different in length; and this
difference of force in the battery might be so
great, owing to the required length of the whole
circuit, as, when expended upon a shorter in-
termediate circuit, to destroy its capacity for
working the signals by overheating. It be-
comes, therefore, a matter of importance, in
some way, to equalize the resistance of these
varying circuits. The patent itself contemplates "In the drawing, the letters A
this necessity, and undertakes to make pro- B designate two wires which ex-
vision for it. It is said in the specification that tend along the line of a railroad
"the respective resistances of the several circuits track, or in other words form the
should be so adjusted that they will be as nearly line wires of a telegraph line.
as possible equal to each other, as a much more The wire A connects by a wire,
perfect action of the apparatus will be secured 10, with one-say, the positive
thereby." The specification does not point out-pole of a galvanic battery, G.
any particular methods for that purpose, but it
is stated in the evidence of experts that such
means were well known at the time and in com-
mon use; such as by varying the dimensions of
the wire on the magnets, or the introduction of
resistance coils into the nearer circuits. These
devices would be independent of the apparatus
described in the patent, and would have to be
adjusted to the peculiar situation of each line
of signals in practical use.

and a new result. The two wire conductors
are not the same, for, in the patent, one con-
ducts positive electricity, the other returns
the current and completes the circuit, while, in
the other, both the metallic conductors carry
the current forward while the earth returns it,
and in this mode the desideratum is obtained of
securing equality of resistance by making all
the circuits equal in size.

The device cannot be regarded as a substitute or an equivalent for anything contained in the complainants' patent. It is of itself an inde pendent invention, and, as such, forms the sole subject of a patent granted to Hall and Snow, July 13, 1875. To explain more satisfactorily the mode of its operation, so as to show that it differs substantially from the arrangement of the complainants, the descriptive parts of the Hall and Snow patent and the attached drawings are here given:

and the other pole of this battery
connects by a wire, 11, with the
ground. The battery G is sup-
posed to be situated at one end of
the line, and at the opposite end
of said line the wire B is made to
connect by a wire, 12, with the
ground. Along the line are dis-
tributed a series of keys or cir-
cuit closers, C D, each of which
is connected with the line wires,
A B, the connection of the cir-
cuit closer C being effected by
wires 13 and 14, and that of the circuit closer
D by wires 15 and 16. If the circuit is closed
through the circuit closer C, the current passes
from the battery through wire 10, line wire A,
wire 13, circuit closer C, wire 14, line wire B,
and wire 12 to the ground, and through the
ground and wire 11 back to the battery. If the
circuit is closed through the circuit closer D,
the current from the battery passes through
wires 10, A, 15, circuit closer D, wires 16, B,
and 12 to the ground, and through the ground
and wire 11 back to the battery.

"From these two examples it will be seen that whenever the circuit is closed along the line the electric current has to traverse the whole circuit, and consequently the resistance is the same in

In the Hall system, as used by the defendants,
no such necessity exists. According to that
plan, there is no necessity of equalizing the re-
sistance of the several sub-circuits, for they are
all exactly equal by their construction, as the
electric fluid in working the signal at any point,
when a sub-circuit has been formed by a circuit
closer, nevertheless traverses the whole extent
of the large circuit, and returns by means of the
connections formed by the earth to the battery.
So that, in effect, the Hall plan forms its appa-
ratus, counting the connection through the
earth, as though it were a continuous wire, as
it might be, by means of three lines of con-
ductors, of which two are combined by con-
necting wires with the magnets which oper-
ate the signals, at points where the circuit is
closed for that purpose, carrying the positive
electricity throughout the whole distance to the
extreme point of the entire circuit, and then re-all_cases."
turning it by the third line, which is the con-
nection by means of the earth. And, inasmuch
as a wire might be used for this purpose, in-
stead of the earth, it would then show three
metallic conductors; and Mr. Farmer, the
complainant's expert, is quite right in saying,
as he does, that the equalization of the resis-
tances in the several sub-circuits, accomplished
in the plan of Hall, ❝is due to the arrangement
of the wires wholly, and not at all to the fact that
the earth is used as a portion of the conductor."
This arrangement is altogether unlike that of
the patent. It introduces into the plan of the
defendants new elements, a new combination,

It thus clearly appears that the difference in this particular between the invention claimed by the complainants and the alleged infringement is a difference in the arrangement of the parts and in the principle of the combination, with different elements performing different functions; and that the difference is something more than the mere substitution of a connection by means of the earth for one of the conducting wires. The case is, therefore, clearly distinguishable from that of Electric Tel. Co. v. Brett, 10 C. B., 838, cited and relied on by counsel for the appellants as in point, where the substitu tion of the earth for a wire as a conductor, be

[101]

[10%