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jurisdiction affirmatively before we can proceed, the writ is dismissed.

THE RUBBER COATED HARNESS TRIMMING COMPANY et al., Appts.,

V.

WILLIAM M. WELLING.

(See S. C., Reporters' ed., 7-12.)

Patent, when void for want of novelty.

A patent for the manufacture of a metal ring en

veloped in a composition of ivory or similar material, is void for the want of novelty.

[No. 221.]

Argued Feb. 13, 1878. Decided Mar. 25, 1878.

Appeal from the Circuit Court of the United States for the District of New Jersey.

The case is stated by the court. Messrs. J. C. Clayton and A. Q. Keasby, for appellants.

Mr. Frederic H. Betts, for appellee.

Mr. Justice Hunt delivered the opinion of the court:

Wm. M. Welling brought his action in the circuit court against the plaintiff in error, alleging an infringement of patent, for an improvement in rings for martingales, and recovered his damages.

Welling's patent bears date of March 17, 1863, and recites that a previous patent to him described a particular mode of making factitious ivory, out of which billiard-balls and rings of various kinds were manufactured, and states that his present invention does not relate to that particular compensation, but that "The nature of my said invention consists in the employment 8] *of a metallic ring within a ring formed of artificial ivory or similar materials, for giving strength to the same, thereby producing a new

article of manufacture."

His method of proceeding is as follows: "In order to make my improved rings, I take a ring of metal, such as shown at a, or said ring may be formed by punching out a washer from a sheet of metal, or in any other suitable way. I take the amount of artificial ivory composition and by dies or by hand cause the said composition to completely envelop the said ring with as much uniformity as possible, as at b; and, to give the exterior finish to the same, press and solidify the mass of composition around the ring by means of dies, and in so doing any plain or more or less ornamental shape may be given to the said ring, or the surface thereof. My ring is thus made of the desired ornamental appearance, while great strength is attained at very little cost."

His claim is in these words:

"What I claim and desire to secure by letters patent is the ring for martingales, etc., manufactured as set forth, with a metal ring enveloped in composition, as and for the purposes specified."

In ascertaining the construction to be put upon this patent, the state of the art is a legitimate and necessary subject of consideration.

1. The fact that metallic rings covered with a composition such as lacquer or varnish, rubber, enamel or glass, had been in use for many years before plaintiff's invention, is clearly proved, and is conceded in the briefs on both sides. In most instances, these coverings were applied and secured, first by the hand of the operator and then by machinery.

2. It is proved by witnesses and shown by the patents hereafter referred to, that prior to the plaintiff's invention dies were also made use of in the manufacture of pipes or rings upon iron cores. Mr. Elliot, an expert witness, says: "Is it a part of your knowledge of the state of the art of manufacturing articles of composition or plastic materials, that pipes of lead composition have been formed upon iron cores by pressure in dies?" Ans.: "It is." Again he says: "Do you mean to say, in the manufacture of rings, that dies were well known prior to the invention in suit? Ans. I believe rings were formed in dies prior to that time, but without metal

cores.

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*Mr. Hedrick says: "It was not new two [9 years before the date of Welling's application to make a martingale ring by covering a metallic ring with a shell of plastic material which could be molded or pressed thereupon and afterwards hardened."

The English patent issued to Moses Poole, fication is dated March 30, 1853, was referred dated October 1, 1852, and of which the specito by a witness, but was not given in evidence. We therefore pass it without comment.

The English patent of 1851, to Newton, referred to in the testimony, recites:

caoutchouc or gutta-percha shall serve as a cov"When it is desired that the compound of ering to the iron or other substance, a thin sheet of the compound, sometimes one thirty-second part of an inch in thickness, or less, is pressed with great care upon the iron or other substance, so as to expel all air from between the adjoining surface, and to cause the most perfect union and adhesion; the coated article is bound with strips or ribbons of cloth, or other suitable material, whereby the compound is kept in close contact with the article during the process of hardening. The combined materials thus treated will be found to possess the qualities desired, the iron or other substance giving strength, and the compound giving a hard and durable surface. In this way may be produced many articles used in and about harness or carriages, such as saddle-trees, buckles, terrets, bits, stirrups, martingale rings, dasher irons, and articles intended to be used as furniture," etc.

*

"Another plan consists in so treating the compositions while in a plastic state that they will harden into any desired shape. For this purpose, the compounds of caoutchouc or gutta-percha, before described, are taken in the plastic state, and cut or pressed or otherwise formed into the exact shapes which it is desired they shall retain after vulcanization."

In the English patent to Edward Benton, of 1843, the rings, terrets and other parts are cov ered with an enamel or vitreous composition. of which the composition and the manner of applying to the ring is described; and in speaking of these linings it is said, "The said linings are formed in molds by processes well understood," etc.

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Similar language is used in the English pat- | merely illustrative of, or supplemental to the 10] ent to Barnwell *& Rollauson, dated 1860: main idea. "We make toys, etc., by employing molds or dies of any suitable material for which our composition has no affinity, or to which it will not adhere."

A die is a piece of metal on which is cut a device which, by pressure, is to be placed upon some softer body. A mold is a receptacle into which a softer material is injected, to take its shape when hardened. Both dies and molds are there spoken of; and it thus appears that not only were there well known and in extensive use, before Welling's patent, iron rings, tubes, pipes, toys and other articles of manufacture, enveloped in and surrounded by glass, enamel, rubber and other like substances, but these coverings had been applied and ornamented by means of molds or dies.

As we read Welling's patent of 1863, it is for a product, and not for a process.

In 1857, he obtained a patent for the manufacture of artificial ivory. He gives the proportions of white shellac, of impalpable white, of ivory dust and camphor, which are to be heated, thoroughly incorporated and brought into heated molds for the manufacture of various articles. His claim in that patent is for forming artificial ivory, by thoroughly mixing the articles specified, or others having equivalent properties, while under the operation of heat, substantially as specified. No. 17999. The patent was for a product resulting from the materials and proportions described, to wit: factitious ivory.

Having the advantages of his manufactured ivory strongly impressed upon his mind, he makes, in 1863, a more specific application of this invention of ivory to the production of martingale-rings.

He says in his description, "I have invented and applied to use a certain new and useful improvement in rings for martingales." He does not here claim to have invented a substance or material or composition; he claims no benefit of any process to reach his result, but claims a ring only. He claims a product; and all else is a description of the mode of obtaining that product, which would enable a skilled mechanic to make the article, and which the law requires him to set forth in his specification. Of this character is the statement that the composition envelopes the ring by means of dies or the hand, 11] and *that an exterior finish and ornament is produced by solidifying by the means of dies. Again, he says: "The nature of my invention consists in the employment of a metallic ring within a ring formed of artificial ivory, or similar materials for giving strength to the same, thereby producing a new article of manufacture," etc.

A metallic ring within a ring of factitious ivory is the article to be produced, and that is the nature of the invention.

What, then, is the product thus secured by his patent?

The plaintiff, Welling, gives this construction to his patent: "I claim (under my patent) all compositions for covering martingale rings or rings for harness." "Do you claim that all metallic harness rings covered with composition of any kind are subject to your patent? I do most certainly."

If this is the true construction of the patent, it cannot be sustained, under the evidence showing the use of covering of harness rings by various compositions, and patents providing for such use, prior to Welling's patent.

Another construction claims that the patent covers a ring having an iron core covered with a plastic composition, if and provided the article is finished by dies. This is the view of the appellee's expert witness, Mr. Elliot, who states expressly that, if made without the use of dies, he does not consider the article within the patent.

Nearly allied to this idea, if not identical with it, is that of the Judge who tried this case at the circuit. He says of Welling's patent: "His instrumentalities were all old: an iron ring, a plastic composition, and a die; but, so far as appears in the case, they were new in combina- . tion. If his patent had been simply for a metallic ring, covered with any compound capable of being molded, or with factitious ivory or similar *materials, it would have been void [12 for want of novelty. If it had been for the use of the die in pressing and solidifying plastic substances generally, it would have been probably anticipated in this regard by the English letters patent to Barnwell & Rollauson of 1860, in which such use of dies is plainly indicated. But the invention is for a combination; and the combination is a metal ring surrounded with some plastic composition, like artificial ivory, of such a nature that it is capable of being compressed, solidified and polished by the action of the dies, and which is in fact subjected to such action, whereby a martingale ring is produced with an exterior surface more durable and more highly polished than had before been obtained by different processes of manufacture, and at greater cost."

We think the evidence shows that this combination, if it is entitled to that rank in mechanics, as well as the ring and the compound, is old. There is, in truth, no combined action. The iron core is used as a basis; the covering is of a pliable composition, and it is pressed or stamped by dies or molds. All this is done separately, by no combined action. This is just as much, and nothing more, than is described by the wit nesses, and by the patents prior to Welling's. It is simply the application and the action of old and well known modes and materials in an accustomed manner. It is a case of aggregation, not of combination.

Nothing can be more specific than the summing up as to the nature of his invention by the Can the appellee recover in this action upon patentee, when he says, "What I claim and de-a patent for this product, to wit: a metal ring sire to secure by letters patent is the ring for enveloped in a composition of artificial ivory or martingales, manufactured as set forth, with a a similar material?

metal ring enveloped in composition, as and for It is evident, from what has already been said, the purposes specified." A metal ring enveloped that a patent for the manufacture of a metal in composition would seem to be the plain sub-ring enveloped in a composition of ivory or simject of the monopoly, the other language being ilar material is void for the want of novelty.

Such is the testimony of the expert witnesses on both sides, as well as the inevitable result from an examination of the English patents heretofore referred to. Indeed, we do not understand the counsel as contending that the patent can be sustained if this is held to be its construction.

Upon the whole case, we are of the opinion that the decree must be reversed and the case remitted to the Circuit Court, with directions to enter a decree dismissing the bill of complaint, with costs.

171] *WILLIAM GODFREY, Receiver of the Merchants' Bank of South Carolina at Cheraw, et al., Appts.,

V.

HARVEY TERRY.

(See S. C., Reporters' ed., 171-180.) Jurisdiction as to parties-erroneous decree

stockholders-limitations.

1. Where a bill in the circuit court does not allege the citizenship of the parties, that court has no Jurisdiction.

2. Where there were only twenty out of the sixtyfour individuals against whom a decree was rendered who were served with process, or who appeared in the proceeding, the decree is erroneous. 3. A joint decree against stockholders of a bank, for debts of the bank, whose liability is several only depending upon the number of shares held by

each, cannot be sustained.

4. Where a bank failed in Nov. 1860, the charter of which provided that those who were stockholders at its failure, or had been within twelve months previous thereto, should be liable for its debts, those who were then shareholders, or who had been within twelve months before, are at once liable for

such debts; and where a suit was not brought against them until Dec. 1870, the Statute of Limitations of four years was a bar thereto.

[No. 168.]

State of Virginia; and he prays for subpœna against William Godfrey, receiver of the bank, John Mattison, cashier, and five others, as directors of the bank, and some sixty others, as stockholders. The bank is not made a party, and no allegation is found in the bill, or anywhere else in the record, of the citizenship of any of the defendants. Of the persons made defendants by the bill, service was only obtained upon twenty, and no appearance was made for anyone else.

The bill charges, among other matters, "That on the first day of March, A. D., 1865, and, indeed, at an earlier date, the said bank had failed, being then indebted to an amount far exceeding its assets; and that, in consequence of such failure, in accordance with the provisions of the said Act, the stockholders, copartnerships and bodies politic, holding shares in said bank, or who had been interested therein within twelve months previous to such failure, became liable for the debts of the said bank for sums not exceeding twice the amount of the shares held by them respectively."

State of South Carolina enacted for that purAnd it was alleged that, under statutes of the pose, the bank and all its property were, by the proper state court, placed in the hands of William Godfrey, as receiver, who was then in charge of the same. It then prays for an account of the assets, furnishes a schedule of the stockholders, which plaintiff says is the best he can obtain, and calls for a discovery of the names of all who were stockholders at the date of the failure, and for twelve months *next pre- [173 ceding that date. and that, when ascertained, they may be made defendants, and charged with liability for his debt against the bank.

Answers were filed for all or nearly all who were served; but no replications to any of these answers are found in the record.

The answers generally set up a plea of the

Argued Jan. 11, 15, 16, 1878. Decided Mar. 25, four years' Statute of Limitation. Several of

1878.

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The Merchants' Bank of South Carolina, at 172] Cheraw, was chartered in 1833, and the charter was renewed for twenty years in 1852. Both statutes provided that, "In case of the failure of the said bank, each stockholder, copartnership, or body politic, having a share or shares in the said bank at the time of such failure, or who shall have been interested therein at any time within twelve months previous to such failure, shall be liable and held bound individually for any sum not exceeding twice the amount of his, her or their share or shares."

In December, 1870, Harvey Terry filed a bill in equity, in the Circuit Court of the United States for the District of South Carolina, to enforce this provision as to certain bills of the bank, of which he claimed to be the holder and owner. He alleges himself to be a citizen of the

the answers aver that the failure of the bank took place November 13, 1860, when this bank, in common with all the banks of South Carolina, suspended specie payment of their obligations, and never afterwards resumed.

The only answers which admit the ownership of shares in the bank, and fix the time of said ownership, are the separate answers of A. Bax ter Springs and R. A. Springs, each of whom admits that he held sixty shares of the bank in 1854, and has held the same ever since.

In December, 1872, the court made an order of reference to a master, with instructions to ascertain and report who were stockholders in the bank on the first day of March, 1865, and for twelve months previous thereto, and how many shares they held; also, to ascertain and report who were the creditors and bill holders of the bank, and the amount due to them respectively.

This order, it will be seen, fixed the day of the failure of the bank at March 1, 1865. What evidence was before the court, or whether there was any, of the date of failure, the record does not show, except the following agreed statement of facts, which, as far as they show any thing on that subject, support the allegations of the answers, that the failure occurred in November, 1860:

"In this case the following facts are agreed

to by counsel in the cause, and to be considered as testimony in the same before the court:

1. The Merchants' Bank of South Carolina, at Cheraw, suspended specie payment at the same time with the other banks in the State; was so suspended in November, 1860, and never after resumed specie payments.

2. The said bank ceased to pay out its bills 174] as soon as the Confederate *currency began to circulate. The last time at which any of its bills were paid out was on the 6th of August, 1861.

3. In his regular business as banker and broker, the complainant, Harvey Terry, bought the notes and bills of the said Merchants' Bank of South Carolina, as proved by him in this case, amounting to over $20,000, at prices ranging from twenty cents to five cents on the dollar of their face value. Most of these purchases were made in 1868 and 1869, at about fifteen cents on the dollar.

4. That the Circuit Court of the United States for the District of South Carolina was held in Charleston on the 12th day of June, A. D. 1866. D. T. Corbin,

for D. H. Chamberlain,

Solicitor for Plff."

The order, however, was binding on the master, and the date fixed by it controlled his action and all subsequent proceedings in the case. The master reported that there were sixty-four shareholders liable for various sums, taking the date of the failure mentioned in the order, and giving their names; that Harvey Terry, the plaintiff, was a creditor of the bank, on account of its circulating notes held by him, to the amount of $28,040.36, and Simonton and Barker to the amount of $26,760, and four other persons, whose claims in the aggregate were about $500.

The court made a final decree, which, reciting the names of the stockholders and the sums for which each of them was liable, says, "It is further ordered, adjudged and decreed that the clerk of this court do enter up judgment for complainants to the amounts of their respective bills proven in this cause, as herein after stated." The names of the creditors and the sums due each of them is then stated, and the decree closes as follows: "And it is ordered that said bill holders respectively have execution against said defendants, stockholders above named, for the several amounts above stated and costs. It is further ordered that as to the defendant, Richard Lathers, the bill be dismissed with costs."

This whole proceeding is a very extraordinary one. It is a case in which, if the Circuit Court of the United States had any jurisdiction at all, it must have been on the ground of the citizenship of the parties. But the only allegation or evidence in the whole record on that 175] subject is that plaintiff, Terry, is a *citizen of State of Virginia. What is the citizenship of five or six other parties, who by the decree are called complainants and bill holders, and who are awarded execution for their debts against sixty-four defendants, we are not informed. Nor is there a word said about the citizenship of any of the defendants. Upon what principle the court could entertain jurisdiction and proceed to decree in the case, we are utterly at a loss to understand. If the bank had been

a party, its citizenship might possibly have been inferred. But it was not made a party; and the defendants have a decree rendered against them personally, by reason of an obligation which the statute imposes upon him individually. The court clearly had no jurisdiction of the case. But suppose it had jurisdiction of the case as to the defendants who were served with process or who appeared. There were only twenty out of the sixty-four individuals against whom the decree was rendered who were served with process, or who appeared in any stage of the proceeding. As to the other forty-four persons against whom this decree is rendered, they have had no day in court, and were served with no process.

The master seems to have called before him a cashier or clerk of the bank, and obtained from him a list of the stockholders, whose names and the number of shares held by each he reported to the court; and on this the court rendered a decree against them. It is impossible to sustain such a decree, if it was shown they were all citizens of the State of South Carolina. The liability of each one of these stockholders, if liable at all, is his several liability. It is a liability depending upon the statutory contract. It depends on the fact of the failure of the bank, and his holding shares in the bank when it failed, or within twelve months before its failure. His liability depends in every instance on facts peculiar to his own case; for, if the failure of the bank and the date of the failure may be common to al! parties charged, it still remains that the ownership of shares, the number of shares and the time when they were owned, are facts to be established against each man charged, and with which no other defendant has any connection. And in regard to which, if a prima facie case is made, each man may have a distinct defense depending on different testimony. These remarks are not made with a view of showing that the stockholders [176 must each be sued in a different action, but to show what is one of the most elementary principles of the law, that no judgment can be rendered against a man who is not brought within the jurisdiction of the court, because somebody else is on a similar liability.

If, however, we examine the decree on the basis that relief in this action could be afforded to each creditor against the stockholders named, we do not think the present decree can be supported.

The first relief granted by it is, that "It is ordered that the clerk of this court do enter up judgment for the complainants to the amounts of their respective bills proven in this cause, as hereinafter stated."

Was any such judgment ever entered up? If so, it is not found in the record. Was it intended that any judgment except this decree should be entered? No necessity for it is to be seen. Who are the complainants that are to have this judgment? There is but one man named in the bill, or named anywhere else, as complainant.

But treating this as surplusage, the real relief granted is that in the close of the decree, in which it is ordered that the bill holders respectively have execution against the stockholders for the amounts found due them. Six executions, to be issued against the same parties on the same liability, in a chancery decree. How are they to be enforced?

One of the stockholders, Allan McFarlan, is | 1865, though both state their belief that it was held liable for $100,000. He is not served with insolvent for some time before. All this, howprocess, did not make any appearance, may reside in another State. Is all the money due to all the creditors to be made out of him, if his property can be found in the State? If so, what remedy has he against the others? Must he begin a new suit? Must he get another execution against all the others, by another proceeding in this suit?

If there is any reason why this suit should be sustained in chancery instead of a separate suit at law against each stockholder, it is that the burden may be equalized and properly distributed as to the shareholders, and the benefits among the creditors. This decree does nothing of the kind. It leaves the marshal of the court to collect the whole of each execution out 177] *of one man, out of two men, out of ten men, as he pleases. It may be asked: how can this be avoided? The answer is easy. It was no trouble to take the sum due to each creditor and the sums due from each stockholder, give a decree nisi with time for each man to pay the sum assessed. Against such as did not pay let execution issue; and if nulla bona was returned, there must be a new assessment against the others until all is paid or the sum of the several liabilities were exhausted. On the other hand, the whole benefit of the chancery remedy, namely: the power to do justice to all by equalizing and properly distributing the relief and the burden, was not exercised by this decree. Pollard v. Bailey, 20 Wall., 520, 22 L. ed., 376; Hornor v. Henning, 93 U. S., 228, 23 L. ed., 879. But there is a well founded objection to the decree which is fatal to the relief sought by the bill under any circumstances.

We are of opinion that the court erred in fixing the date of the failure of the bank at March 1, 1865. If we should look into this record to discover on what evidence the court fixed that

date, we find that there was none at all. No evidence on this subject or any other was taken, at least none is found in the record prior to the order of the court referring the case to the master. That order fixed the first day of March, 1865, as the day of failure, and peremptorily directed the master to ascertain and report who were liable as stockholders, with reference solely to that date. The bill alleges that on that day, “and, indeed, at an earlier day, the bank had failed." The answer of every defendant who did answer says the bank failed in 1860. On what evidence, then, did the court, in its order of reference, fix that as the date of the failure? There is literally none in the record.

It is true that the master reports that in his examination of one or two witnesses "The fact was elicited that the bank failed on or about the first day of March, A. D. 1865." But this matter was not referred to him. He had no right to decide it, or to take testimony about it, or to report upon it. Exception was taken to this part of the report, on the ground that the evidence showed that the bank suspended specie payments in November, 1860, and never after178] wards resumed, and that there was no other evidence by which the date of actual failure could be determined.

The evidence which he reports on that subject is that of the receiver and cashier, who stated that the bank finally closed March 1,

ever, was improper testimony, because that issue had been decided by the court, and was not open before the master. Neither plaintiff nor defendant had any right to give evidence before him on that subject.

But there is evidence in the agreed statement of facts, not filed before the master but in the open court, which we have already copied, that the bank failed on the 13th of November, 1860, and never after resumed; that on that day it suspended specie payments, and never afterwards paid; that the last time it paid out any of its own bills was August 6, 1861; after that it only paid its debts, whether due to depositors or holders of its bills, in Confederate money. What is meant by "failure of the bank," in the clause of its charter which makes the stockholders liable? If a partnership, engaged in any mercantile or manufacturing business fails to meet and pay when demanded its current business paper as it falls due, that firm is said, in popular language, to have failed. And unless it compromises with its creditors, or makes arrangement for extension of time, it has failed in all senses of the word. If it continues to dishonor its paper. it has failed. If any business man or business firm does the same thing, they are, by the express terms of every bankrupt law, bankrupts. By the Bankrupt Law of England and of the United States, and by the insolvency laws of Massachusetts and many other States, the person or the partnership in business which is no longer able to pay its current debts as they fall due is insolvent. Here, then, in all these instances, what the bank at Cheraw did is called in others bankruptcy, insolvency, failIf there be any difference, it should be in favor Why is it not so with regard to a bank? of the rule which brings into action the remedies for bank failures. They are more trusted than individuals; their functions are more important; their failures more disastrous to those who deal with them.

ure.

*It is argued that the suspension of [179 specie payments in 1860, by the banks of South Carolina, was legalized by her Legislature. The Legislature did no more and could do no more than to relieve them from the penalty of the forfeitures of their charters. It could not relieve them from the obligation to pay their debts in specie, nor extend the time for such payment. It could not do this, because any such law would impair the obligation of the creditor's contract. It could say: we won't forfeit your charter, we won't close your door; we won't prevent you from doing business if any one will trust you. But it could not and did not say: we relieve you from the obligation to pay your existing debts. If they did not pay them, they failed. are the principal functions of a bank? They are: (1) To receive and pay deposits; (2) to issue notes of circulation redeemable on presentation at its counter; (3) to buy and sell exchange; and (4) to loan money. Now, of these functions the first two are, as to the public, by far the most important; and as to these the bank at Cheraw failed emphatically in 1860, and never resumed. That is to say, it failed to pay the deposits then held, or the circulating notes it had then out, according to its legal obligations to do so. It was not able to do so and, therefore, was insolvent. It did not do so, and

What

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