206 F. 278 | 6th Cir. | 1913
P'crrell and Prame were in partnership; Ferrell bought Prame’s interest, and Frame agreed not to engage in a competing business. He violated this agreement, and Ferrell secured an injunction, the issue of which was affirmed by this court. Prame v. Ferrell, 166 Fed. 702, 92 C. C. A. 374, q. v., for fuller statement of facts. Thereupon friends of Prame organized the International Manufacturing Company, which bought his machinery and conducted a business like that in which he had been engaged. Ferrell filed a supplemental bill against this corporation and its stockholders and Frame, alleging violation and evasion of the decree; this bill was finally dismissed ; and Ferrell now appeals.
In the view which we take of the case, it becomes immaterial now to determine whether such degree of succession by the new company to Prame’s established business as appears by the record is sufficient of itself, and though in good faith, to entitle plaintiff to any relief, and also whether the dependency of the new business upon the patents, issued to Prame as described in the former opinion, makes it obnoxious to Ferrell’s rights. Both these inquiries become unimportant if in fact the transfer from Prame to the new company was dominantly color-able; and so we come to consider, as the presently controlling question, whether the new business is what it purports to be, one wholly independent from Prame, or whether it is materially still Prame’s business under false colors.
But the present case was left to depend upon whether the story of Prame’s alleged transfer was, in any material part, too doubtful to be -accepted, unless further corroborated. Without now passing upon other features (like the Dick brothers’ subscription), which we assume will-be persuasively either confirmed or disputed, we think there was one subject upon which, as the record stood, the burden was upon defendants to furnish corroboration. Defendant Monteith testifies that he purchased the two patents from Prame for $6,000; that he subscribed for the same amount of stock in.the new company; that he -turned the patents over to the company in payment of his subscription; and that he paid Prame by giving his note for $6,000. It also appears that Mr. Monteith is a banker and a man of business experience and pe-cuniarily responsible; that he did not pay the note, but gave a renewal, without interest; that he made no investigation regarding the validity or scope of the patents; that he had no particular knowledge of the business in which he was taking stock; that he had a longstanding acquaintance with Prame, who was also a banker in a nearby town; that, as stockholder, he executed to Kaylor a power of attorney; and that he has never paid any attention to the business. The sum of all these things is possibly reconcilable with a real and actual purchase by him oí these patents from Prame and with a real and actual interest by Monteith in the new business to the extent of $6,000; but they require further explanation and support before they can be accepted at their face valüe. The natural presumption from these things is that the transaction was a subterfuge and that the stock in fact belongs to Prame.