2. BANKRUPTCY (§ 36*)-PROCEEDINGS-ANCILLARY Order.

Where bankruptcy proceedings against a corporation were pending in Massachusetts, and the treasurer resided in New York, an order from the federal court in New York, requiring the treasurer to file schedules and authorizing service thereof on him, was not dependent on the validity of a similar order in Massachusetts, providing for servce without the state; the New York being dependent only on sufficient proof to satisfy the court making it that there was reasonable ground for the exercise of its ancillary jurisdiction.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. § 36; Dec. Dig. § 36.*]

3. BANKRUPTCY (§ 28*)—ANCILLARY PROCEEDINGS-FILING SCHEDULES.

Where bankruptcy proceedings were pending against a corporation in Massachusetts, and the treasurer of the corporation, who was cognizant of the bankrupt's affairs, resided in New York, such facts were sufficient to sustain ancillary proceedings in New York, requiring the treasurer to file schedules.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. § 27; Dec. Dig. § 28.*]

4. BANKRUPTCY (§ 28*)—ANCILLARY PROCEEDINGS-FILING SCHEDULES-CredITOR'S RIGHT TO SUE.

Where the treasurer of a corporation, the affairs of which were being administered in bankruptcy proceedings in Massachusetts, resided in New York, and the trustee had not taken steps to obtain schedules, a creditor was authorized to institute ancillary proceedings in New York against the treasurer for that purpose.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. § 27; Dec. Dig. § 28.*]

Petition for Revision of Proceedings of the District Court of the United States for the Southern District of New York, in Bankruptcy; George C. Holt, Judge.

In the matter of bankruptcy proceedings of the Brockton Ideal Shoe Company. Petition of Ignatz Roth to revise an order denying a motion to vacate a prior order and directing the petitioner, as treasurer of the bankrupt corporation, to file schedules as required by the Bankruptcy Act, entered in proceedings ancillary to bankruptcy proceedings pending in the District Court for the District of Massachusetts. Affirmed.

Rosenberg & Lewis, of New York City (J. Rosenberg, of New York City, of counsel), for petitioner.

Lesser Bros., of New York City (W. Lesser, of New York City, of counsel), for respondent.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

NOYES, Circuit Judge. [1, 2] The first contention of the petitioner is that as the order of the Massachusetts referee requiring the filing of schedules was void, the order of the District Court based thereon was also invalid. We perceive, however, no ground either for the premises or the conclusion. The fact that the Massachusetts order provided that service should be made on the treasurer of the bankrupt corporation outside the state did not invalidate it, especially as it directed an application for an ancillary order authorizing such service.

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

The order sought to be revised would not be void if the Massachusetts order were invalid because the former was not dependent upon the latter. The Massachusetts order might have been without effect as such and yet, coupled with the other proof, quite sufficient to satisfy the court here that the exercise of its ancillary jurisdiction to obtain the schedules was called for.

[3] The second contention is that there was an abuse of discretion. in making the order in question. We think, however, that the court below acted very properly. Roth was the one person who knew all about the affairs of the bankrupt corporation. He should have filed. the schedules without any order. There was every reason why he should have been required to do his duty. If he be handicapped by the absence of books he can apply to the court below for consideration.

[4] The additional contention that the ancillary proceedings were invalid because they were instituted by a creditor instead of by the trustees is without foundation. Ordinarily the trustee would be the proper person to set the machinery in motion to obtain the schedules, but in the absence of such action there is no reason why a creditor should not proceed. With respect to proceedings of this kind there. is no possibility of a diversity of interests among creditors. The order of the District Court is affirmed with costs.

DUFFY v. CHARAK.

In re JULES & FREDERIC CO.

(Circuit Court of Appeals, First Circuit. November 26, 1912.)

Nos. 970 and 982.

1. CHATTEL MORTGAGES (§ 188*)-DELIVERY OF POSSESSION-CREDITORS. An agreement between the parties to an unrecorded chattel mortgage on a stock of goods that they should be considered in the possession of a clerk of the mortgagor as agent of the mortgagee did not constitute a delivery to and retention of possession by the mortgagee, necessary to render the mortgage valid as against third persons, under Rev. Laws Mass. c. 198, § 1, when there was no actual change of possession or in the conduct of the business.

[Ed. Note. For other cases, see Chattel Mortgages, Cent. Dig. §§ 393404; Dec. Dig. § 188.*]

2. CHATTEL MORTGAGES (§ 198*)-DELIVERY OF POSSESSION-CREDITORS.

Where property covered by an unrecorded chattel mortgage was seized from the possession of the mortgagor under an attachment against him, the possession of the officer while so holding it was exclusive, and the mortgagee could not during such time take possession, in such sense as to sustain his mortgage, without an actual or symbolical delivery by the mortgagor.

[Ed. Note. For other cases, see Chattel Mortgages, Cent. Dig. §§ 442449; Dec. Dig. § 198.*]

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1997 to date, & Rep'r Indexes

Appeal from and Petition to Revise Proceedings of the District Court of the United States for the District of Massachusetts; Frederic Dodge, Judge.

In the matter of the Jules & Frederic Company, bankrupt. From an order of the District Court (193 Fed. 533), James H. Duffy appeals and petitions to revise the same. Affirmed on appeal, and petition dismissed.

Charles H. Donahue, of Boston, Mass. (James H. Duffy, of Boston, Mass., on the brief), for appellant.

William Charak, of Boston, Mass., for appellee.

Before COLT and PUTNAM, Circuit Judges, and BROWN, District Judge

COLT, Circuit Judge. We do not think it necessary to add anything in this case to the exhaustive opinion of the court below, which is reported, under the title of In re Jules & Frederic Co., in 193 Fed. 533.

[1] It is stipulated by counsel that the findings of fact disclosed in that opinion shall be accepted on this appeal. Assuming, therefore, the truth of these findings, we fully concur in the conclusion of the District Court that the mortgaged property was never "delivered to and retained by the mortgagee," as provided by Revised Laws Mass. c. 198, § 1. To hold that the possession of Miss Mazur, a clerk in the employ of the mortgagor, was a compliance with the statute, would be, as the court below said, "to enable the parties to practice the very fraud which the statute as to unrecorded mortgages of personal property was intended to prevent."

[2] As to the subsequent possession of the property by the deputy sheriff on a writ of attachment, it is clear that his possession was exclusive under the authorities as applied to the facts of this case. It might have been otherwise if there had been an actual or symbolical delivery of the property subject to the attachment, in which both the mortgagee and the mortgagor took part. In the absence, however, of any such delivery, no title would pass to the mortgagee under the Massachusetts decisions. Dempsey v. Gardner, 127 Mass. 381, 382, 34 Am. Rep. 389; Fettyplace v. Dutch, 13 Pick. (Mass.) 388, 392, 23 Am. Dec. 688; Benjamin on Sales (7th Ed.) p. 725.

We therefore fully concur with the ruling of the District Court that "the deputy sheriff's possession while it lasted was exclusive, and that it continued until the filing of the petition in bankruptcy under which there has been adjudication."

In No. 970, Duffy v. Charak, Trustee, the decree of the District Court is affirmed, and the appellee recovers his costs of appeal.

In No. 982, Duffy, Petitioner, let there be a decree dismissing the petition, with costs to the respondent.

1. JUDGMENT (§ 675*)-RES JUDICATA-PERSONS COncluded.

Where a suit for infringement of a patent, brought against a user of the alleged infringing device, was defended by the manufacturer, which became the real defendant therein, and resulted in a decree expressly adjudging the validity of the patent, which decree was affirmed on appeal, the validity of the claims in issue became res judicata, and cannot be again litigated by the manufacturer in a subsequent action directly against it, and especially on a ground which was directly raised by a petition for a bill of review in the prior litigation, and passed on by the Circuit Court of Appeals.

[Ed. Note. For other cases, see Judgment, Cent. Dig. §§ 1190, 1191, 1194; Dec. Dig. § 675.*

Operation and effect of decision in equitable suit for infringement, see note to Westinghouse Electric & Mfg. Co. v. Stanley Instrument Co., 68 C. C. A. 541.]

2. PATENTS (§ 328*)—VALIDITY AND INFRINGEMENT-CAR AXLE BOX.

The Bemis patent, No. 239,702, for a car axle box, claim 1, held valid and infringed by the device of the Brill patent, No. 418,439.

8. APPEAL AND ERROR (§ 1017*)-FINDINGS OF FACT BY REFEREE-REVIEW. Findings of fact by a referee by consent in an action at law, even under Act Pa. 1889 (P. L. 80), which gives the court an unusually large power to review and reverse or alter such findings on exceptions, are entitled to great weight, and should be accepted by the court until overthrown by a clear conviction of error, the burden of showing which rests on the party excepting.

[Ed. Note. For other cases, see Appeal and Error, Cent. Dig. §§ 39964005; Dec. Dig. § 1017.*]

4. PATENTS (§ 274*)-INFRINGEMENT DAMAGES.

Findings of a referee of the amount of damages recoverable for infringement of a patent held sustained by the evidence, whether the damages should be measured by the rule of profits or of reasonable royalty. [Ed. Note.—For other cases, see Patents, Cent. Dig. §§ 419–421; Dec. Dig. § 274.*]

5. PATENTS (§ 275*)-INFRINGEMENT-COMPUTATION OF DAMAGES.

Where plaintiff and defendant were the principal competitors in the sale of a car axle box, covered by a patent owned by plaintiff, which for some years defendant purchased from plaintiff and afterwards made in infringement of the patent, during which latter years the selling price declined owing to the competition, a referee, in fixing the selling price, for the purpose of determining plaintiff's damages from the competition, properly included with the infringing years the years immediately preceding, and took the average selling price during all such years.

[Ed. Note. For other cases, see Patents, Cent. Dig. §§ 422-431; Dec. Dig. 275.*]

6. PATENTS (§ 275*)-INFRINGEMENT DAMAGES RECOVERABLE.

The owner of a patent, whose business is established, successful, and well equipped, may recover from an infringer in an action at law the profits he would probably have made on sales of the infringing device, For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

and those profits are determined by the average profits made by plaintiff during a reasonable period.

[Ed. Note. For other cases, see Patents, Cent. Dig. §§ 422-431; Dec. Dig. 275.*

Accounting by infringer for profits, see note to Brickill v. Mayor, etc., of City of New York, 50 C. C. A. 8.]

In Error to the District Court of the United States for the Eastern District of Pennsylvania; James B. Holland, Judge.

Action at law by the Bemis Car Box Company against the J. G. Brill Company. Judgment for plaintiff, and defendant brings error. Affirmed:

Francis Rawle and Alexander Simpson, Jr., both of Philadelphia, Pa., and J. Edgar Bull, of New York City, for plaintiff in error. Antonio Knauth, of New York City, and Henry P. Brown and John G. Johnson, both of Philadelphia, Pa., for defendant in error. Before GRAY, BUFFINGTON, and MCPHERSON. Circuit Judges.

BUFFINGTON, Circuit Judge. In the court below the Bemis Car Box Company, owner of patent No. 239,702, issued April, 1881, to Sumner A. Bemis, for a car axle box, brought an action at law against the J. G. Brill Company to recover the alleged damages suffered by it through infringement of said patent. The case having proceeded to issue, it was by consent referred to a referee, who by stipulation was

to

"hear and determine the case and report his conclusions thereon to the court. His rulings on the admission or rejection of testimony and his findings of fact and conclusions of law shall be reviewable on exception by the United States Circuit Court, and his findings of fact shall have the same force and effect as the verdict of a jury."

After taking proofs, the referee found the plaintiff had sustained damages in $186,642.24. The parties consented to a pro forma judgment in favor of plaintiff, the Brill Company sued out this writ, and the court now hears the case as if at first instance.

[1] From the proofs in the case it appears that in June, 1890, the Bemis Company brought a suit in equity against a street railway company in the Circuit Court of the United States for the District of Massachusetts, charging it with infringing said patent in the use of certain axle boxes made by the Brill Company. Thereafter the latter defended the suit and became the real defendant therein. The case was so proceeded with that in August, 1896, a decree was entered adjudging said patent valid and that the boxes in question infringed the same. Bemis Car Box Co. v. Boston & R. Electric St. Ry. Co., 75 Fed. 403. From such decree the Brill Company caused an appeal to be entered to the Circuit Court of Appeals of the First Circuit, which court in April, 1897, affirmed the decree below. 80 Fed. 287, 25 C. C. A. 420. Thereafter the latter court (98 Fed. 121, 38 C. C. A. 661) denied a petition of the Brill Company for leave to file a bill of re*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes