16 F. 560 | U.S. Circuit Court for the District of Southern New York | 1883
As stated by the master, the evidence upon the accounting before him was wholly directed to the question of the gains, profits, and advantages which have accrued to the defendants by the use of the invention secured by his patent to the complainant. The master finds that the gains and. profits for which the defendants are liable are such as arise from a saving of time and labor by the use of-the, complainant’s bond-register beyond that which could have been obtained by the use of the several systems of registration open to them to use. He finds this saving to be equal to two and a half cents per bond per year, and, at this rate, that the total profits derived by defendants up to the time of the accounting, and for which they are liable to the complainant, is the sum-of $6,202.40. The defendants. have filed exceptions to his finding, which bring up the whole question of the liability of the defendant for profits.
. The complainant’s patent is for “the preserving, filing, and verifying of bonds, coupons, certificates, and all similar documents by the means and in the manner” substantially as described in the specification.- The means or system consists in the employment of a book for the registration of bonds and coupons after they are paid. Each page of the book is adapted, by printing and ruling, dio present the paid bond and coupons in their original order of annexation. Spaces are ruled for the bond and for the coupons, and the spaces for the latter are numbered in the inverse order of the time of maturity. When a coupon is paid it is pasted over the ruled space designated for that particular coupon. When all have been paid and the bond
The defendants employed 119 of these registers, constructed for the registry of nearly 30,000 bonds and a vast number of coupons. Obviously, the defendants regarded this system of registration as convenient, and as possessing advantages which commended it to them, and it is to be assumed that some benefit must have accrued from its use. The question is, however, whether the defendants derived any pecuniary profits or advantage from the use of the registers, so far as has been made to appear by the evidence before the master.
Several other methods of preserving and filing paid bonds and coupons were open to the use of the public, and the defendants are liable only for the pecuniary advantages which accrued to them by the use of the complainant’s system beyond that which would have resulted from the use of the other systems which they had the right to employ in attaining the same end. These pecuniary advantages, as found by the master, consist in economy of time and labor. If there was no saving of time and labor resulting from the use of the complainant’s system, there were no profits. Whether there was such a saving is the precise question of fact to be determined upon the proofs. In determining this question it is well at the start to disincumber tho case of all the testimony which bears upon the theory that the complainant’s system provides a more effectual safeguard against loss from the overpayment of coupons than is secured by the use of the other systems. There was a good deal of speculative assertion to this effect in the testimony of the witnesses. The theory may be true; but, conceding it to be so, the complainant did not prove, or attempt to prove, the pecuniary advantages arising therefrom; and from the nature of the case it would seem impossible to show this unless some data can be obtained as to the percentage of loss that arises from the overpayment of coujoons by the municipalities or corporations that issue such obligations. Until this can be shown, the first factor in the problem is wanting. The master properly limited his inquiry to tho question of the comparative economy of time and labor in the use of the several systems
There was also the system in use in the treasury department of the United States. There books were used upon- each right-hand page of which were ruled spaces for coupons, and the coupons of a given bond when paid were pasted on such page in the order in which they would appear as originally attached to the bond. The blank spaces assigned for a particular coupon would indicate that such coupon had not been paid. When the bond was paid it could be pasted on the left-hand page opposite the page for the coupons of that bond; but in practice this was not done, but the bonds when paid were destroyed.
If there was a saving of time and labor by the use of the complainant’s system, it arose in one or both of two ways. A certain outlay of time and labor was expended under each of the several systems in filing away or registering the bonds and coupons. A further outlay of time and labor was required after this in ascertaining whether a given bond or coupon had been paid or not, whenever occasion for investigation arose. The proofs are destitute of evidence to show what the expense of this outlay is under any system. This may have arisen, and probably did, from the intrinsic difficulty of making .any such proof. It may very well be conjectured that quite a clerical force would be needed by a corporation which has issued a great number of bonds of different series, and that a less force could do the work under one system than under another. But conjecture does not supply the place of evidence, and will not satisfy the law. The complainant’s case fails to present the necessary elements of comparison by which the amount of pecuniary advantage can be ascertained.
The master reached his finding upon the testimony of Mr.'Hall, a witness who had been the treasurer of a railroad corporation, and had used the complainant’s system. Prior to using this system he
Irrespective of the fallacious standard of comparison adopted by Mr. Hall and accepted by the master, the opinion expressed by Mr. Hall was not founded on any specific or definite basis of fact. Under any system of registration the expense would depend upon the number of bonds and coupons to be registered. One employe might do the required work for one corporation, while many might be required by another corporation. One eorooration might be served at a small expense, while another might be required to incur a large expense. The system that might be less expensive and more convenient with some corporations might be found more expensive and less convenient in others. The experience of a witness in the use of the
The exceptions are sustained.