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are Gibson v. United States (C. C. A.) 208 F. 534, on bond of postmaster; United States v. Abeel (C. C. A.) 174 F. 12, on clerk's bond; National Surety Co. v. United States, 129 F. 70 (C. C. A. 8), on bond of letter carrier.

While we entertain the very highest regard for the Circuit Court of Appeals of the Seventh Circuit, and accord to its decisions the utmost deference; yet, in view of the ruling of the Supreme Court in the case above cited (Illinois Surety Co. v. United States, 240 U. S. 214, 36 S. Ct. 321, 60 L. Ed. 609) relative to suits on bonds of contractors; in view of the almost uniform practice in cases under the act here in question (section 50 [h] of the Bankruptcy Act); and in view of the absence of any facts or circumstances requiring equitable jurisdiction in the instant case, we are constrained to hold that the trial court had jurisdic

tion to entertain the action at law on the bond.

Finding no error in any of the matters which have been called to our attention, we think the judgment below should be affirmed. It is so ordered.

HYMAN v. SEMMES.

Circuit Court of Appeals, Sixth Circuit. May 15, 1928.

No. 4966.

1. Contracts 143-Issue involving transaction depends on its nature, effect, and party's intention, not on name given transaction.

Proper determination of issue involving

transaction or agreement does not depend upon the name given to the transaction by the parties, or upon the express terms of any contract between them, but upon the nature of transaction, its legal effect, and the intention of the parties.

2. Bankruptcy 467 (4)-Concurrent findings of referee and judge as to questions of fact are conclusive unless error is plain. Questions of intent, purpose, possession, and precise nature of dealings with bankrupt are questions of fact, or at best, mixed questions of law and fact, as to which concurrent findings of referee and judge, or master and judge, will not be set aside on appeal unless plain mistake or error in applying the law is shown. 3. Bankruptcy 184 (25%)—Bankrupt lumber dealer's unrecorded bill of sale to investment company, financing purchases, with possession retained held invalid as to trustee.

Transaction by which bankrupt lumber dealer, making purchases and sales of lumber in his own name, gave bills of sale to investment company financing purchases, held not to constitute bona fide purchase as against trustee in bank

ruptcy, but merely transfer of security title subordinate to rights of trustee, where agree

ment was unrecorded, in view of fact that bankrupt retained sole possession of the lumber, and fixed compensation was to be paid the investment company for financing purchase.

4. Bankruptcy 184 (25%)-Cards affixed to lumber, showing ownership of creditor given bill of sale as security, held not to give creditor interest against dealer's trustee in bankruptcy.

Fact that investment company financing lumber dealer's purchases of lumber and taking bills of sale placed cards or notices on lumber to the effect that it was its property, held not to give investment company interest in lumber as where bills of sale were given merely for seagainst trustee in bankruptcy of the dealer, curity, and possession of lumber was surrendered to bankrupt, and cards were affixed to lumber in irregular manner, without effort to maintain notices or notify third parties.

United States for the Western District of Appeal from the District Court of the Tennessee; Harry B. Anderson, Judge.

In the matter of A. B. Speight, bankrupt. Proceedings by B. J. Semmes, trustee, against H. W. Hyman, to require defendant to turn over certain lumber, in which defendant filed a reclamation petition. An order of the referee requiring defendant to turn over the property to the trustee and denying defendant relief under his reclamation petition was approved by the District Court, and, from the judgment, defendant appeals. Affirmed.

Wils Davis, of Memphis, Tenn. (Davis Costen & Wallace, of Memphis, Tenn., on the brief), for appellant.

W. H. Borsje, of Memphis, Tenn. (Labrief), for appellee. mar Heiskell, of Memphis, Tenn., on the

Before DONAHUE and MOORMAN, Circuit Judges, and HICKENLOOPER, District Judge.

HICKENLOOPER, District Judge. For a number of years prior to January 1, 1924, the bankrupt, A. B. Speight, had carried on the business of buying and selling hardwood lumber, principally hickory cut to required dimensions, in the city of Memphis, Tenn. For the purpose of so conducting his business, he had leased and occupied a building at No. 883 North Front street in said city, where portions of the lumber were bundled and stored, and where such lumber would, when necessary, be trimmed or sawed to meet the requirements of the customer. Prior to January 1, 1924, the bankrupt had become largely indebted to appellant, H. W. Hyman, doing business as the Capital In

26 F.(2d) 10

vestment Company, through the of accounts receivable and the credit failure or bankruptcy of customers whose accounts were so discounted.

discount to be reclaimed bore small hand-written cards or labels in the words, "This is the property of the Capital Investment Co." These cards had been removed from the lumber shipped, which, upon shipment, bore only a metal tag carrying the name of A. B. Speight Company. Upon petition for review, the court below approved the turnover order and upon report of the standing master the court denied relief to Hyman under his reclamation petition. The appeal is prosecuted as to both branches of this judgment of the District Court.

Being so indebted, the bankrupt entered into a new agreement with the Capital Investment Company, on or about January 1, 1924, whereby it was agreed that the bankrupt would continue to secure orders for dimension stock, and would from time to time procure the lumber to fill such orders from various mills. All such purchases and sales, with possibly only an occasional exception, were made in the name of A. B. Speight Company; all purchases being made on the basis of sight draft with bill of lading attached. Upon the arrival of the draft in Memphis, the draft, freight, and switching and handling charges would be paid by the Capital Investment Company, and a bill of sale given by A. B. Speight to that company covering the specific consignment. Nearly all of such consignments were handled by immediate reconsignment to purchasers, without unloading, but a number of cars which could not be immediately reshipped upon orders were unloaded and stored in the building of the bankrupt. The agreement of January, 1924, contemplated and provided that from the proceeds of sale of all lumber handled thereunder the Capital Investment Company was to receive reimbursement for the amount of its disbursements plus a fixed profit of $5 per thousand feet of lumber. Any profits in excess of $5 per thousand feet were to be credited to the open account of the bankrupt representing the old indebtedness and any subsequent advances made to the bankrupt for living expenses, etc.

On October 27, 1925, A. B. Speight was duly adjudicated a bankrupt upon his voluntary petition filed the same day. On October 28th and 29th there were shipped and billed two cars of lumber from the stock on hand in the A. B. Speight Company building. The proceeds of sale of these two cars amounted to the sum of $1,511.14, as found by the referee in bankruptcy who, under appropriate proceedings, issued an order upon H. W. Hyman, doing business as the Capital Investment Company, to turn over this sum to the trustee in bankruptcy of A. B. Speight. The present appeal involves not only the validity of this turnover order but also the question of ownership of the remaining stock on hand in the A. B. Speight Company building at the time of bankruptcy, as to which latter stock a reclamation petition was filed by H. W. Hyman. At the time of bankruptcy all the stock on hand and sought

The correct determination of the issue here presented depends upon the construction to be given the contract between the appellant and the bankrupt. If the bills of sale given in pursuance of that contract were intended to convey title absolute, and if such bills of sale and the contract, under all the surrounding circumstances of the case, constituted a bona fide purchase by and sale to the Capital Investment Company of the lumber here in question, and such lumber was thereupon separately held and marked as belonging to the buyer, the right to pos session as against the trustee may be conceded. Stelling v. G. W. Jones Lumber Co., 116 F. 261 (C. C. A. 7); In re Ozark Cooperage & Lumber Co., 180 F. 105 (C. C. A. 8). But if, on the other hand, such title as passed to the Capital Investment Company was intended to have, or in law had, effect only as security for the repayment of advances, past or coincident, then, under the law of Tennessee, such security title is subordinate to the rights of the trustee in bankruptcy, since the agreements and instruments by which it was obtained were unrecorded. Southern Bank & Tr. Co. v. Folsom (C. C. A.) 75 F. 929; Tennessee Nat. Bank v. Ebbert & Co., 56 Tenn. (9 Heisk.) 153; Snyder v. Yates, 112 Tenn. 309, 79 S. W. 796, 64 L. R. A. 353, 105 Am. St. Rep. 941; Wilkins v. McCorkle, 112 Tenn. 688, 80 S. W. 834; Williams v. First National Bank, 150 Tenn. 15, 261 S. W. 973; Shannon's Tennessee Code, § 3752.

[1] In such case, it has been repeatedly held that the proper determination of the issue does not depend upon the name given to the transaction by the parties nor upon the express terms of any contract between them, but upon the nature of the transaction, the legal effect of it as a whole, and the intention of the parties as evidenced thereby. Herryford v. Davis, 102 U. S. 235, 26 L. Ed. 160; Keystone Finance Corp. v. Krueger, 17 F. (2d) 904 (C. C. A. 3); In re Bettman-Johnson Co., 250 F. 657, 664

(C. C. A. 6); Le Sueur v. Manufacturers' the fact that, some time prior to bankruptcy,

Finance Co., 285 F. 490 (C. C. A. 6); Vander Lei v. Blakely, 284 F. 516 (C. C. A. 6); Tennessee Finance Co. v. Thompson, 278 F. 597 (C. C. A. 6). Compare also Home Bond Co. v. McChesney, Trustee, 239 U. S. 568, 36 S. Ct. 170, 60 L. Ed. 444.

[2, 3] These questions of intent, purpose, possession, and the precise nature of the dealings between the parties are questions of fact, or, at best, mixed questions of law and fact, and the concurrent findings of referee and judge, or of master and judge, will not be set aside on appeal on anything less than a demonstration of plain mistake or error in applying the law. In re Maki, 18 F. (2d) 89 (C. C. A. 6); Bergougnan Rubber Corp. v. Bell, 8 F. (2d) 702 (C. C. A. 6); Grossberger v. B. F. Goodrich Rubber Co., 8 F. (2d) 964 (C. C. A. 6); Tennessee Finance Co. v. Thompson, supra, at page 600, and numerous other cases there cited. But we find no difficulty in arriving at the same conclusion as that reached by the District Court. The building in which the lumber was stored was leased and maintained by the bankrupt as his place of business. Practically all purchases and sales of lumber were made by the bankrupt in his own name. The lumber was in the custody and under the sole domination and control (that is to say, possession) of the bankrupt. Hyman was not engaged in the lumber trade as such, but in the financing of other enterprises. It is by no means the least significant of the features of the case that, as to transactions subsequent to January, 1924, a fixed and definite compensation was to be paid to Hyman for financing purchases, viz. $5 per thousand feet of lumber handled, nor that all sums secured from the sale of lumber in excess of such compensation were to be credited to the bankrupt upon past or future indebtedness. Finding himself heavily involved in January, 1924, the plan was quite manifestly devised to decrease the total of such indebtedness while retaining current and future purchases of lumber as security not only for contemporaneously created indebtedness, but, to the extent of any surplus profits, also for past indebtedness. We see no escape from the position that the appellant either became a partner, engaged in a joint enterprise with the bankrupt, after January, 1924, or that the interest which he secured in the stock of the bankrupt was intended to be and was solely in the nature of security. The first of these positions is denied; the second seems to us manifest. [4] The situation is in no way changed by

cards or notices were placed upon the lumber to the effect that such lumber was the property of the Capital Investment Company. As was so tersely stated by Judge Warrington in Cincinnati Equipment Co. v. Degnan (C. C. A.) 184 F. 834, 845: "The claim really means that the will of the lessor" (Hyman) "may be substituted for that expressed by the lawmaking power itself. No decision is cited in support of the claim." The bills of sale having been given for the purpose of securing the appellant, and possession of the lumber having been surrendered to the bankrupt, and the concurrent finding of the master and the District Court having been that the cards or notices of ownership were affixed to the lumber "in an indefinite and irregular manner, apparently without any effort to maintain the notices upon the lumber or to notify third parties of the ownership of the same," we are constrained to hold that such notices could not make effective an agreement or contract expressly declared null and void as to existing and subsequent creditors by the statutes of Tennessee. Whether in case of a bona fide sale such placarding would be sufficient appropriation of the goods to the sale to justify considering it as executed under the Tennessee law, we need not here determine.

The judgment of the District Court is affirmed.

EISLER et al. v. GENERAL ELECTRIC CO. GENERAL ELECTRIC CO. v. EISLER et al. Circuit Court of Appeals, Third Circuit. May 12, 1928.

Nos. 3725, 3748.

1. Patents 328-1,128,120 for electric light bulb filament support wire-inserting machine held not infringed.

for inserting wire in glass buttons of electric Fagan patent, No. 1,128,120, for machine light bulbs to form a frame to support filament, held not infringed.

2. Patents 328-1,220,836, claims 1-5, for electric light bulb filament support wire-inserting machine, held invalid.

Patent No. 1,220,836, claims 1-5, for machine for inserting wires in glass buttons of electric light bulbs to form frame to support

filament, held invalid for lack of invention.

Appeal from the District Court of the United States for the District of New Jersey; Joseph L. Bodine, Judge.

Patent infringement suit by the General Electric Company against Charles Eisler and

26 F.(2d) 12

another. From the decree, both parties appeal. Reversed in part, and in part affirmed. Richard Eyre and Charles H. Keel, both of New York City, for Eisler.

Hubert Howson, of New York City, John

H. Anderson and Charles McClair, both of Schenectady, N. Y., and Howson & Howson, of New York City, for General Electric Co. Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

BUFFINGTON, Circuit Circuit Judge. [1] This case concerns the insertion by machinery of wires in the glass buttons of electric light bulbs to form a spider or frame to support the filament. In the earlier art this was a tedious, laborious, and somewhat unsatisfactory process. The glass button was first formed. It was then moved by hand to a position where a flame struck the spot where a wire was meant to be inserted and heated to softness, and the delicate wire was then picked up by nippers and its point pushed into the yielding glass at this spot. The button was then rotated until another desired spot was reached, where the process was repeated, and another wire was put in by hand, and so on one at a time until the desired number of wires were successively and individually inserted. This hand process the General Electric Company, as assignee of John T. Fagan, sought to improve upon by a machine shown in an application made by Fagan on June 12, 1908, which resulted in the grant on February 9, 1915, of patent No. 1,128,120, for a "machine for manipulating glass rods and forming spiders therewith." The prior hand art from which Fagan sought to depart, its method and its faults, were stated by him in his specification as follows:

"These spiders have heretofore been made by hand, and their production has been subject to those obvious disabilities which attend the manufacture by hand of articles of this nature. With the individual factor of the operator entering into the equation, the production of fused zones, ordinarily in the form of buttons, has not always been properly done, and it frequently has happened that the anchor wires inserted into the buttons are not properly spaced and touch at their inner ends, so that a shunting of the current results. It will be apparent also that hand production is comparatively slow."

The significant departure and contemplated improvement by Fagan in the way of output quantity was in concentrating the making of a spider into a single, mechanical operation which consisted in heating the entire

desired button circumference and driving the wires simultaneously into such softened circumference. In other words, he gave up spot heating of the button and successive driving

in of the wires. It is quite evident that if Fagan's unitary heating of the button and this simultaneous driving in of all the wires proved workable, the quantity production of this rapid machine operation would be a great advance over the hand process with its series of successive tedious wire insertions. Moreover, it will be apparent that the depth of wire insertion by Fagan's machine's precision would be so uniform and accurate that the short-circuiting incident to wires being inserted to an undue depth by the hand process would be avoided. In view of these asserted advantages, the office granted the patent in question, not for a process, but for the machine Fagan described in his specification. Whatever may have been the cause, Fagan's machine, so far as the proofs in this case disclose, never made any impress on the art, or indeed was put into practical use. In view of the fact of the large use of electric bulbs and the great quantities of such articles required in business of his assignee, the General Electric Company, and its large resources which enabled it to utilize Fagan's machine, it is significant that it was not put into use; and this tends to warrant the belief that, while theoretically promising, it was disappointing practically, or at least that, if patentable, its claims should be limited to covering substantial duplications thereof.

So regarding it, we are of opinion the defendant's machine does not infringe. It has gone back to the old hand art, and, instead of discarding that art as Fagan did, has utilized it, and has simply transformed the method and means of that hand art, and embodied that hand method in two separate, nonco-operating machines. In one of such machines it forms the button just as the old hand method formed the button initially. Then it swings the cooled button around to a point where a separate mechanism utilizes the old successive hand method of spot-heating a single place on the button and inserting by machinery instead of by hand a single wire at that spot-heated part of the button. This done, the machine then spot-heats another point of the button, and then and there inserts another wire just as the hand worker did. And this operation of spot-heating and successive wire insertion is carried on until the spider is finished. In other words, the defendants' machine simply does by machinery what the old art did by hand, and it does what Fagan got his patent for discarding;

namely, spot-heating of the button and successive insertions of successive wires. It will' thus be seen there was no identity of operation in Fagan's and the defendants' machines, On the contrary, they worked on two divergent and indeed contrasted methods. The defendants' machine uses the old hand method, while Fagan discards that hand method and substitutes therefor a machine method which it is physically impossible to do by hand because both hands and the most concentrated attention were required to fuse the glass and insert one wire at a time in such hand method. And it is significant that the plaintiff's machine, which it is contended embodies Fagan's patent, resembles the defendant's machine, in that it heats the button in spots and inserts single wires successively. [2] Seeing then, that Fagan's machine did not embody the old hand process, we note the fact that shortly thereafter, to wit, on November 22, 1909, George W. Beadle applied for, and on December 10, 1912, was granted, patent No. 1,046,724, for a machine for manufacturing supports for incandescent lamp filaments. Without entering into details, it suffices to say that his specification discloses a mechanism which utilizes and automatically uses, without manual aid, the old hand operations of heating successive spots on the button and inserting successive wires at such spots. Such being the case, it is apparent that when Fagan, in conjunction with Frech, on October 1, 1913, applied for their patent No. 1,220,836 for a filament support wire-inserting machine, which utilized the hand process, the disclosure in Beadle's patent of a mechanical adaptation of the hand process gave Fagan and Frech a secondary and minor place in the art of adapting the hand process to machine operation. And, as the defendants' machine follows the particular mechanism of Beadle more closely than it does that of Fagan and Frech, it is not an infringement, unless it uses some valid detail of the latter's device. Such infringement is alleged of claims 3, 4, and 5, which embody the use of a cold blast jet after the wire is inserted. This feature is thus described in their specification: "Moreover, means are provided for fusing that portion of the button which is to receive a wire, and a cooling means is provided which is brought into action immediately after the insertion of the wire to cause the rapid solidification of the glass around the end of the said wire." No such blast was shown in the Beadle device, but the court below held it was nevertheless invalid, saying: "The claims 3, 4, and 5 relate to a cooling blast feature, after

the wire is inserted. I fail to see anything new in this. There certainly cannot be patentable novelty in cooling glass after it has been heated and the wire fused. This makes it unnecessary to consider the patents cited in anticipation of this feature"-conclusions in which we concur.

Another detail of Fagan and Frech's patent was the delivery of the fusing gas flame angularly which is embodied in claims 1 and 2, and which is thus described in their specification: "The glass-fusing means comprises means for directing a flame against a portion of the edge of the button on the glass rod, and the said means is angularly disposed relative to the plane of the said button so that there is no danger of injuring wires previously inserted in the button." In view of the advanced state of development of this art of glass blowing, of the high grade of engineering skill employed therein, we are of opinion that, when the old hand process was sought to be employed mechanically, such angular disposition of the flame was a natural and evolutionary mechanical advance, and involved no invention.

Summarizing our conclusion, we hold patent No. 1,128,120 has not been infringed, and claims 1, 2, 3, 4, and 5 of patent No. 1,220,836 are invalid; the costs here and below to be paid by the plaintiff.

LOUISIANA OIL REFINING CORPORATION v. REED.*

Circuit Court of Appeals, Fifth Circuit. May 12, 1928.

No. 5274.

1. Explosives 9-Seller's furnishing solvent with low flash point does not give right of action to buyer's employee unless proximately causing injury.

Seller's breach of duty in furnishing buyer a solvent having a flash point substantially lower than 96 degrees Fahrenheit, pursuant to

agreement, does not give rise to a right of action in favor of buyer's employee for injuries unless such breach of duty was a proximate cause of injury.

2. Explosives 9-Buyer's employee, claiming injury because of seller's furnishing solvent with low flash point, had burden of proving injury was caused thereby.

In action by buyer's employee against seller of solvent for injuries alleged to have been sustained by reason of seller's failure to furnish solvent with a flash point at temperature of not less than 96 degrees Fahrenheit, burden was on plaintiff to prove that explosion and consequent injury were due to flash point's being less than 96 degrees Fahrenheit.

"Rehearing denied June 29, 1928.

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