cation to the court, a revocation of the order for the might possibly have been obtained. But this course was not taken, and to the consummated settlement such effect must be given as is oonsistent with fair dealing. Now, by no just interpretation of the terms of the settlement can it be held to have extinguished or affectedtheB6 certificates. Under the evidence and findings, it is not to be doubted that they are valid and subsisting claims. 4. The settlement is expressed to be in full of all claiQ1.B of the bank against W. H. H. Riddle. This would embrace his liability on the notes mentioned in the eighth finding, and such, undoubtedly, was the intention; so that, on thi,a ground, the defense of set-off to certifi. cate B fails, even if otherwise it could have prevailed as against the plaintiff. 5. While it is true that the plaintiff will be entitled ·to a dividend only upon the basis of the debt and interest as of the day when the busineS8 of the bank was suspended by order of the comptroller, (White v. Knox, 111 U. S. 784, S. C. 4 Sup. Ct. Rep. 686,) still the finding here must include interest to this date, (ld.) Upon the facts found, I am of the opinion that the plaintiff is entitled to recover the amount of his claim; and, accordingly, the court finds in favor of the plaintiff the sum of $2,751.32. Let judgment for the plaintiff be entered upon the finding of the court.
NOTE. Where a receipt for money declares that the sum named therein is "dneon demand," and is "especially deposited," it is lIot a promissory note, but a certificate of deposit, and the statute of limitations will not begin to run until demand has been made. Smiley v. Fry, (N. Y.) 3 N. E. Rep. 186. A right to sue a bank upon a general deposit does not accrue nor the statute of lim. itations begin to run, until a demand of l,ayment, unless the demand is in some way dispensed with. Branch v. Dawson, (Minn.) 23 N. W. Rep. 552. Semble, the statute of limitatiollll begins to run from t,he date of a certificate of deposit. payable on demand. Tripp v. Curtenius, 36 Mich. 494.
Assignee, etc., v.
(District Court, No D. New York. May 21, 1886.)
BANKRUPTCY - FRAUDULENT TRANSACTION OF JUDGMENT. EFFECT OF DISCHARGE -
In an action for the cancellation of a judgment, or perpetual stay of execu· tion thereon, on the ground that the debtor has been discharged in bankruptcy, if the holder of the judgment was a party to the fraudulent transaction out of which the judgment has arisen, he cannot plead that the judgment, being founded on a fraudulent transaction, is not affected by the discharge, even though he has acquired his right from one to whom the plea might have been competent.
On the twelfth or December, 1876, Henry M. Davis and David Morse were adjudicated bankrupts. On the second day of February, 1877, the above-named plaintiff, Aaron F. Balliett, was duly appointed their assignee. In April, 1877, he commenced this against
Benjamin Dearborn and Hezekiah Seeley, alleging that the said bankrupts, within three months prior to the filing of the petition against them, being then insolvent, had fraudulently transferred their stock of general merchandise, valued at $7,000, to the said Dearborn and Seeley, they knowing, or having reasonable cause to believe, that the transfer was made by the bankrupts to defeat the provisions of the bankrupt act, and hinder and defraud their creditors. The plaintiff having recovered a verdict, judgment was entered on the fifth day of February, 1878, in his favor for $4,936.92. After the verdict against them, but prior to the entry of judgment, Dear· born and Seeley filed their petition in .this court, and were duly adjudicated bankrupts. On the sixth of March, 1878, Balliett proved the judgment as a debt against their estate, and thereafter received a dividend of $1,236.25. On the twenty.first of March, 1881, the said judgment was sold at public auction, and purchased by one John W. Chipman for the sum of $41. Chipman afterwards sold it to Henry M. Davis, one of the above-named bankrupts, who is now seek· ing to enforce it against the said Hezekiah Seeley, and has procured an execution to be issued to the marshal, who is about to levy upon the property of the said Seeley by virtue thereof. On the twenty. eighth of February, 1882, the said Seeley was discharged from his debts in bankruptcy. He now moves that the said judgment, as against him, be canceled, or that a perpetual stay of execution be granted. The motion is resisted upon the ground that the judgment, founded upon a fraudulent transfer, is not affected by the discharge. Daniel Jlclntosh, for the motion. Flenry llf. Davis, pro se, opposed.
COXE, J. The motion for a perpetual stay should be granted. The only ground upon which it is resisted is that the judgment was recovered in an action for fraud, and is therefore not affected by the discnarge. Even if this proposition were well founded, the party who now owns, and is seeking to enforce, the judgment, is not in a position to avail himself of it, for he is one of the bankrupts, whose fraudulent and collusive transfer made the judgment possible. If the defendants, Dearborn and Seeley, were guilty of fraud in receiving the property of the bankrupts, Davis and Morse were at least equally culpable in making the transfer upon the eve of their bankfuptCY; they were the originn.tors and active promoters of the unlawful proceedings. The verdict established their fraud as conclusively as that of the defendants. In the course of time Davis comeH into possession of the judgment which his assignee recovered against his companions in fraud. To compel Seeley to pay Davis the amount thus ascertained to be due the estate in bankruptcy as the result of t11eir joint fraud, would be inequitable and unjust. No one should be permitted in this way to profit by his own wrong-doing. The motion is granted.
BRAGG V. CITY OF STOL'XTON.
BRAGG 'V. CITY OF STOCKTON.
(Oircuit DOU'l't, lJ. Oalifornia. May 10, 1886.) 1.
PATENTS FOR INVENTIONS-INFRINGEMENT-ELECTION OF REMEDIES FOB FRINGEMENT OF PATENTS.
The patentee may sue at law for his royalty or patent fee, one who infringes by using his invention; or, at his election, sue in equity for the profits arising from such infringement, and for an injunction against further use. .
SAME-NOVELTY-GONG ATTACHMENTS FOR FIRE-ENGINE HOUSES.
Claims 3 and 4, in patent No. 6,831, re-issued to Robert Bragg, for gong attachments for fire-engines, sustained.
3. SAME-REGISTERING STROKE OF ALARM.
The third claim of patent No. 173,261, issued to Robert Bragg, for an invention registering the number of strokes for giving a fire alarm, sustained. Testimony taken before the examiner, under objection, tendin$ to show prior use, will be rejected by the court, when no notice of such prIOr use haa been given, and it has not been set up in the answer.
In Equity. Joseph Leggett and Montague R. Severson, for complainant. P. H. Smith, for defendant.
SA.WYER, J., (orally.) In this case I have had some difficulty in determining, under the decisions in the circuit courts on the subject, whether or not the bill in equity should be maintained. See Smith v. Sands, 24 Fed. Rep. 470, and cases cited. It does not appear this defendant has ever made or sold any machines including the invention in question, or that it intends to do anything of the kind, but has only used some three or four machines which other parties made for it, there being no evidence of an intention to use any other machines than those it now has. As compensation for the machines used is prayed for, the question arises whether complainant will be entitled to an injunction. As said in the case of Spaulding v. Page, 1 Sawy. 703, I think the complainant may waive a license fee, and elect as his remedy an injunction against the further or continued use of the machines. Of course, if he can do that, he can maintain his suit in equity. But in order to do that he cannot recover a royalty upon those machines; for by paying the royalty the defendant would be entitled to use them until worn out, and should not be enjoined from so doing; and for the royalty his remedy at law is simple. Complainant would have to be limited to. the profits and damages arising from the use of those particular machines, up to the time of the restraining of their further use, if a perpetual injunction against further use is sought. In that aspect, I think it is a proper case for equity jurisdiction, on the ground that the complainant is entitled to an injunction, without dam-