the circuit 01' supreme court, and it is fair to presume that they were not regarded by learned counsel for complainant as subject to objection on that account. Mr. Cmtis, in his work on Patents, § 215, says:
"The taking of a naked license or permission to work under a patent does not, withont some recitals or covenants amounting to an admission, estop the licensee from denying the validity of the patent, or of the fact that he has used the patented thing or process, if he is subsequently proceeded against for infringement. It is necessary to look into the instrument and ascertain that there are recitals or covenants that will deprivt;l a licensee of the defences to which all other persons may resort. If, by his agreement, the licensee has admitted that the process or thing which he uses is the patented process or thing, and he is afterwards proceeded against for not complying with the terms of his agreement, he will not be permitted to show that he did not use the patented thing or process, So, too, if the deed contain recitals or statements amounting to an admission of validity of the patent, either as to the novelty or utility of the supposed invention, or the sufficiency of the specification, the licensee will be estopped, in an action of covenant for the rent or license due, to deny the validity of the patent by setting up anything contrary to the admissions of the deed. "
The case of Brooks v. Stolly, 3 McLean, 523, may seem to be opposed to this view, but, upon principle and the weight of authority, we think these defences are not inconsistent. The motion will therefore be overruled. Mr. Justice MATTHEWS, of the supreme court, concurred.
BUCKLEY and others
SAWYER MANUF'G Co.
January 3, 1881.)
(Circuit Cow·t, Eo D. Jfi88ou1'i.
CON'l'HACT-REVERTER OF PA'l'ENT RIGHT.
A patent owned 'by A. and B, was assigned by them, as to certain states, to E., a corporation. The consideration of the assignment was the payment to the grantors of $8,500 cash, and the issuing of a prescribed number of shares of stock in E. to them. 'I'he cash was paid and the slml'cs issued. The condition of the contract required the payment of a royalty to A. and B. and also exacted, under penalty of forfeiture, the use by E. of reas0nable diligence, and its hest endeavors to make the' corporate scheme a success, the corporation having been organizeJ to the patented article. On the other A. aud B. agreed to exel'cise reasonable diligcnce to promote
BUCKLEY V. SAWYEn.
the success of the enterprise, under the' penalty of forfeiture of all rights of reversion. F. was a large stockholder in E., and, as such, furnished the required capital. The corporation W8.IJ· organized in 1872,failed in 1873, and F. purchased its assets, including the patentright, but did Dot subsequently comply with the condition as to diligence, etc. Suit was brought 'by A. and B. to have the right acquired by F. declared forfeited. He!d, that, .a9 it appeared that the plaintiffs had received the full value of their patent-right, and were stockholders in E., which they had caused to be formed, and that as there was a failure on their part to comply with their promises as to making the business a success, no right of reverter or forfeiture existed.
In Equity. Seneca N. Taylor, for plaintiffs. W. G. Raney, for respondent. TREAT, D. J. A patent owned by plaintiffs was assigned, as to designated states, to the defendant company, on payment of $8,500 cash, and the. issue of a prescribed number of shares in the defendant corporation. The cash was received and the shares issued. The conditions of the contract required the payment of a royalty, and also exacted, under penalty of forfeiture, the use by defendant company of "reasonable diligence" and "its best endeavors" to make the corporate scheme a success. On the other hand, the granting party agreed to exercise reasonable diligence to promote the success of the enterprise, under the penalty of forfeiture of all right of reversion. The scheme proved a failure, for reasons which are disputed. The defendant Givens paid his money as a stockholder, which seems to have been the cash required, and when the corporate scheme failed the purchaser of the assets of the corporation, including the patent-right. The organization of this corporation was in 1872, and its failure in 1873. The defendant Givens, who seems to have been the principal capitalist, became the purchaser of its assets to o,tve for himself something from the wreck. The present contest is as to the forfeiture of the grant. If the defendant corporation did not do what it promised, then the transfer of the patents to it was to be void. If, on the other hand, the plaintiffs in this suit did not perform what they agreed to do,
the right of forfeiture or reverter was at end. The strugglethroagh the evidence is to show which of the respective parties was delinquent. It is clear that the scheme was to ol:gan,ize a corporation to operate plaintiffs' patent, the pat· ent itO be assigued for designated states at the price of $8,500 cash, (which wRspaid,) and a prescribed number of shares in said corporation to be issued to said plaintiffs, with a royalty. Hence, the plaintiffs not only received the cash, butth.e shares, and became, as such shareholders, interested in the proper conduct of the corporation. It appears from the evidence that the plaintiffs were the promoters of the scheme, and that the strangers who embarked in it did so on the faith that the plaintiffs would push the same to a success. The defendant Givens, who seems to have been the victim of this corporate enterprise, became finally the owner of the assets of the corporation, including the right to the patents. He has not operated under them, nor paid any royalty. The contest is whether, as assignee of the corporate assets, he can hold them discharged of all right of reverter, or whether, from non-fulfilment of the original agreement, it ought to be rescinded. It must be remembered that the original transaction was in 1872, and the failure of the enterprise in 1873. The excuse for delay in instituting this suit is that negotiations for compromise were pending. There is, however, a barrenness of testimony upon matters which might shed some light on the case. A company in Connecticut, which was identified with the defendant company, mayor may not have pursued the enterprise with success, and no proper evidence is produced whereby it can be determined what is the real amount in controversy. A sharp analysis of the pleadings and evidence shows that the plaintiffs have received more than the full value of the patent right; that they were large stockholders in the defendant corporation, which they causecl to be formed on their representations-a speculative scheme; and that through their failure to do what they promised no right of reverter, forfeiture, or rescission exists. The bill will be dismissed at plaintiff's costs.
(District Court, E. D. Michigan.
Ships and other tangible personal property are U effects," within the meaning of the second general admiralty rule, and may be reached by a writ of garnishment when in the hands of a third person.
In Admiralty. This was a libel by William B. Slayton, administrator of the estate of Montgomery Crossman, against the Goodrich Transportation Company, owner of the steamer Alpena,' to recover damages for the death of Crossman, occasioned by the foundering of the Alpena in Lake Michigan.
Upon the filing of the libel a writ of garnishment was issued requiring the Detroit Dry Dock Oompany to appear and make return concerning the II property" of the respondent in its possession or under its control. The garnishee appcared and moved to quash the writ, upon the ground that the rules of this court did not authorize the issuing of the same, and that said rules only require garnishees to answer as to the" credits and effects" of the principal defendant in their hands. Prior to the making of this motion, however, the dry dock company made return to the writ of garnishment that it was constructing certain vessels for the Goodrich Transportation Company, the present value of which was over $100,000.
Carpenter « McLaughlin, H. M. Campbell, and Alfred Rl£Bsell, for libellant. Wisner «Speed, for garnishee. BROWN, D. J. The sole question in this case is whether the practice of courts of admiralty in this country will au·· thorize a garnishee to be held liable for ships, or other personalpropertyof like nature, in his hands, belonging to the principal defendant. The second general· admiralty rule allows, in suits in personam, a warrant of arrest, with a clause therein that, if the defendant cannot be found, to attach his "goods and chattels" to the amount sued for; or, if sueh property cannot be found, to attach "his credits and effects," to the amount sued for, in the hands of the garnishees named therein. The second admiralty rule of the district court contains language of similar import. District court rule 14,.