1. Under the Act of September 6, 1916, this Court has no
jurisdiction to review on certiorari the merits of a final decree
entered by the circuit court of appeals more than three months
before the certiorari was applied for. P.
261 U. S.
417.
2. Applications made to the circuit court of appeals after it
had affirmed a decree upholding a patent and ordering an
accounting, and renewed upon the appeal from the accounting,
whereby the defendant sought to reopen the case upon the ground of
newly discovered evidence of prior discovery, manufacture, sale,
and use of the invention, were addressed to the sound discretion of
the court, and properly overruled where the failure to discover the
evidence in time for the original hearing in the district court was
due to the applicant's lack of diligence. P.
261 U. S.
419.
3. To justify setting aside a decree for fraud, extrinsic or
intrinsic, it must appear that the fraud charged prevented the
party complaining from making a full and fair defense. P.
261 U. S.
421.
4. A party suing on a patent is under no duty to furnish his
opponent evidence of an anticipation of the invention, nor does his
silence concerning such evidence, unaccompanied by acts preventing
the
Page 261 U. S. 400
opponent from finding and availing himself of it, constitute
such a fraud as will sustain a suit to enjoin execution of a decree
enforcing the patent. P.
261 U. S.
423.
5. A decree of a district court enjoining obedience to a decree
of a circuit court of appeals of another circuit, upon an issue and
evidence of fraud, which, except for immaterial adjuncts of malice
and conspiracy, had been presented to and rejected by the latter
court as a basis for reopening the decree,
held an
unwarranted review of that court's discretion, and not a decree
founded on extrinsic fraud. P.
261 U. S.
423.
6. The principle requiring due diligence in discovering and
presenting evidence, to avoid protraction of litigation, cannot be
set aside to avoid hardship in a particular case. P.
261 U. S.
424.
7. The fact that the sureties on a supersedeas bond in a circuit
court of appeals, and the banks with which their principal made
deposits for their indemnification, have been erroneously enjoined
from complying with that court's decree by a district court of
another circuit does not relieve them from obedience to a proper
and final order of the former court directing summary judgment
against them. Their remedy is by appeal from the decree of the
district court. P.
261 U. S.
425.
8. Under Jud.Code § 262, the circuit court of appeals has power
to issue all writs not specifically provided for by statute which
may be necessary to the exercise of its appellate jurisdiction. P.
261 U. S.
426.
9. To protect the execution of its decree, the circuit court of
appeals may direct the district court to enjoin a party from
prosecuting a suit in another jurisdiction.
Id.
10. A defeated party who seeks by a suit in another jurisdiction
to enjoin the sureties on his supersedeas bond and his opponent
from executing a decree of the circuit court of appeals is guilty
of contempt of that court which it may punish by directing the
district court to enter a summary decree for expenses occasioned by
such injunction suit and a reasonable attorney's fee. P.
261 U. S.
426.
281 F. 488 affirmed.
This case comes here by writs of certiorari granted to the
Circuit Court of Appeals of the Seventh Circuit to review the
proceedings of that court in enforcement of a final decree in a
suit to enjoin infringement of a patent and for an accounting of
profits. The patent had expired pending the litigation, but the
accounting resulted
Page 261 U. S. 401
in a decree of the District Court for Northern Illinois for
profits of more than $400,000 in favor of the Computing Scale
Company against the Toledo Scale Company. The circuit court of
appeals, which had sustained the patent (208 F. 410), affirmed the
decree for profits (279 F. 648), but stayed the mandate to permit
an application to this Court for a writ of certiorari, which was
denied January 9, 1922 (257 U.S. 657). On the same day, the Toledo
Company, a corporation of New Jersey, filed a bill in the District
Court for the Northern District of Ohio against the Computing
Company, a corporation of Ohio, to enjoin it from enforcing the
decree of the Circuit Court of Appeals of the Seventh Circuit on
the ground that it was obtained by fraud. The Computing Scale
Company filed an answer, raising first a special plea to the
jurisdiction and then responding on the merits, denying fraud, and
pleading
res judicata. The bill also made parties
defendant the sureties on the supersedeas bond in the circuit court
of appeals, the Fidelity Deposit Company and the United States
Fidelity & Guaranty Company, both corporations of Maryland, as
well as three Toledo banks, citizens of Ohio, which held money
deposited to the credit of the surety companies by the Toledo
Company as indemnity, and asked that they all be enjoined from in
any way satisfying or aiding to satisfy the decree. The Computing
Company then filed in the circuit court of appeals a petition for a
rule against the Toledo Company, to show cause why it should not be
enjoined from maintaining the bill in Ohio, and why a summary
decree should not issue against the sureties. Pending a hearing as
to this rule, the Ohio court granted a temporary injunction
restraining the Computing Scale Company, and the sureties and the
banks as prayed by the Toledo Company. The circuit court of appeals
thereafter heard the petition for the rule to which the Toledo
Company
Page 261 U. S. 402
had made answer, in which by way of exhibit to its averments it
set up as a defense the complete record in the injunction suit in
Ohio. The circuit court of appeals then made the order which is
here for review. It reads as follows:
"We now receive from the Computing Company the certified copy of
the Supreme Court's order denying Toledo Company's petition for
writ of certiorari, and we direct the clerk to file it in this
cause."
"Unless the mandate which we now formulate be stayed on Toledo
Company's motion filed within five days, the clerk is directed to
issue and transmit to the court below the following mandate:"
"(1) Enter of record our affirmance of the final decree on
accounting."
"(2) Enjoin Toledo Company from further maintaining its Ohio
bill and from filing elsewhere any similar bill."
"(3) Enter summary decree against the sureties on the
supersedeas bonds for the amount due upon the accounting decree,
including all costs in both courts, but not exceeding the penalties
of the bonds."
"(4) Ascertain Computing Company's expenses in this matter,
including reasonable attorney's fees, paid or incurred since the
Supreme Court's denial of the petition for writ of certiorari on
January 9, 1922, and enter summary decree therefor against Toledo
Company, but not against the sureties on the supersedeas
bonds."
281 F. 488.
The patent, the subject of controversy in this case, was for an
automatic computing scale, issued to one Smith in September, 1895,
and reissued April 28, 1896. It related to improvements in weighing
scales wherein the weight and selling price could be seen by the
weigher at a glance, without mental calculation. It consisted of a
pan weighing device attached to an indicator drum inside of a
casing with a slot through which the figures on the drum as it
Page 261 U. S. 403
revolved in response to the effect of the weight would so
coordinate with figures on the casing as to show the weight and
correct price on the same line. The patentee in his specifications
admitted that the general combination was an old one, but said that
the object of his improvement was to provide scales,
extraordinarily sensitive to weights of small amount, and
accurately registering them. He explained that an essential feature
of the indicator drum in his improvement was that it should be made
of very light material, because scales of this kind theretofore
would not weigh alike successively, due to the inertia of the
revolving drum, the force required to operate it, and the
difficulty of stopping, and so he had constructed his drum of a
skeleton frame of aluminum with a periphery of a thin sheet of
paper.
The claims in controversy were:
"5. An indicator drum for weighing mechanism consisting of a
spindle provided with a plurality of skeleton frames of light
material and secured to said spindle, and having secured to their
periphones a sheet of paper forming a cylinder."
"6. An indicator drum for weighing mechanism consisting of a
spindle provided with a plurality of skeleton disks or frames of
thin aluminum, having a sheet of paper extending around and secured
to their periphones to form a cylinder."
The Computing Scale Company and the Toledo Scale Company were
competitors in business. The former had acquired the Smith patent
by the purchase of the assets of the Boston Computing Scale
Company, and before 1906 was manufacturing scales using the Smith
cylindrical drum in competition with scales of the Toledo Company
having a fan-shaped registering dial. There had been patent suits
between them concerning other parts of the weighing mechanism than
the indicator. Each had other patents in this field. In 1906, the
Toledo Company
Page 261 U. S. 404
did not give up its fan-shaped scales, but began the manufacture
of scales with an indicator drum of skeleton aluminum frame and
paper periphery, and so increased its sales of them, so that they
ultimately constituted the larger part of its business. This led to
two suits by the Computing Scale Company in 1907 against the Toledo
Company in the District Court for the Northern District of Ohio.
Nothing was done with them until the suit at bar was brought in the
District Court for Northern Illinois in 1910. Then, as a condition
of getting extension of time to take evidence herein, the Computing
Scale Company was required by the court to dismiss the Ohio suits.
In its answer to the bill in this case, filed in August, 1910, the
Toledo Company alleged that the Smith patent and the Claims 5 and 6
had been anticipated by a patent granted to one Phinney in 1870,
and further averred anticipation
"by reason of prior public use and sale by various persons at
various places, and, among others, at Pawtucket by William H.
Phinney, then and now, as defendant is informed and believed,
residing at said Pawtucket."
On the trial, the Toledo Company's expert testified that he had
built a Phinney scale following the patent to Phinney, but that he
could not get it to stop twice within an ounce of the same weight,
and that a scale which would not weigh within a very small fraction
of an ounce was not an instrument of precision, and not a
commercial article at all. It should be said that the
specifications of the Phinney patent made no reference to the
material of which the cylinder of the scales was to be made or its
weight, or the importance of those features. The district court
held that the fourth and fifth claims of the Smith patent were
valid, and this was affirmed by the circuit court of appeals, April
15, 1913 (208 F. 410, 413), holding that Smith had put in the hands
of the world's vendors of commodities the first usable computing
scale,
Page 261 U. S. 405
that, long before the "paper" art, including a patent to Phinney
in 1870, had proposed to teach practical scale makers how to build
automatic computing scales, but all attempts to make them were
failures, that, in the 25 years between Phinney and Smith, the
brightest and most skillful men had sought the necessarily
tremendous commercial success of a reliable computing scale, but
had not found it until Smith had the happy conception that the
lightest possible drum would secure the required accuracy of
revolution and stopping.
On May 14, 1913, the Toledo Company made a motion in the circuit
court of appeals that the court include in its mandate, affirming
the decree of the district court for an accounting leave to rehear
the cause and to permit the Toledo Company to introduce proof that
computing scales had been made and sold and introduced into use by
the patentee Phinney of Pawtucket, Rhode Island, which had a
cylinder drum of light wood skeleton covered with thin paper and
anticipated the drum of Smith. Three Phinney scales and thirteen
supporting affidavits were introduced. These included one of the
son of Phinney, the patentee, who had been with his father during
his manufacture and sale of the scales until his death and who
still lived at Pawtucket, of Phinney's widow, and also those of
residents of Pawtucket who said they had bought and used the
scales. The affidavits also disclosed that, in a suit against the
Federal Company for infringement of the Smith patent brought by the
Computing Scale Company in Philadelphia, which never came to trial,
all this evidence had been taken, and was on file. The three
Phinney scales which were exhibits there had been in the custody of
Church & Church, who had been counsel for the Computing Scale
Company in Philadelphia. It was also shown that the Computing Scale
Company had three or four of these scales and drums in their
possession at Dayton. It also appeared from young Phinney's
Page 261 U. S. 406
affidavit that the Boston Computing Company, which owned the
Smith patent and which subsequently was bought out by the
complainant Computing Scale Company, was trying to buy the scales
which Phinney had. The evidence tended to show that only 20 scales
had been made by Phinney, and that no scales were made after 1895.
The president of the Toledo Company, in his affidavit, excused
failure earlier to discover this evidence by saying that the
company made every effort to learn of prior use. His counsel
explained that he had been led away from investigation into
manufacture of Phinney scales at Pawtucket, which was not visited
by agents of the Toledo Company till after June, 1912, by the fact
that the model of the Phinney patent at the Patent Office was only
a small one of solid wood, and not of light material, and that he
only acquired knowledge of Phinney's manufacture and use of scales
with indicator drums by accident after June, 1912, from counsel for
defendant in a suit brought by the Computing Company against the
Standard Company in 1911. There was no direct charge in these 1913
affidavits that the Computing Scale Company was purchasing and
gathering in these Phinney scales to conceal them, but there were
averments in the affidavits which were only relevant to sustain
such a charge, and were evidently inserted for that purpose. The
1913 motion for a rehearing was overruled by the circuit court of
appeals.
The case went back for an accounting, and, in 1917, the Toledo
Company took depositions of the witnesses whose affidavits had been
filed in 1913, and sought to use the evidence to reduce the damages
by showing what kind of a scale might have been constructed by the
Toledo Company without infringing the Smith patent, but the
evidence was not given weight for that purpose. The expert of the
Toledo Company in these depositions said he did not test the
Phinney scales of wood and paper cylinders
Page 261 U. S. 407
when they were in the custody of the Toledo Company, because he
did not think they would weigh properly. The district court
confirmed the master's report of the accounting, and made a decree
accordingly for $420,000. This was carried on appeal to the circuit
court of appeals, which affirmed it in October, 1921. 279 F.
648.
The Toledo Company, at the same time, again made a motion for
leave to open up the case that it might introduce the evidence
contained in the affidavits presented in May, 1913, and the
depositions taken in 1917, and retry the issue of validity of the
patent and show its invalidity by reason of the Phinney prior
manufacture, sale and use. In brief of counsel urging the granting
of this motion for the Toledo Company, it was said:
"To refuse to consider the evidence in the present record
respecting the Phinney scale, as affecting the validity of the
patent in suit, would be to permit the plaintiff to take advantage
of essential facts known to it and unknown to the defendant or the
court and its consequent imposition on both."
In the subsequently filed petition for certiorari to this Court,
counsel for the Toledo Company, in discussing this same issue,
said:
"The affidavits further showed that plaintiff had full knowledge
of the Phinney scales for more than ten years, that evidence and
numerous samples of them had been introduced in a suit which
plaintiff had brought at Philadelphia ten years earlier upon the
reissued patent here in suit, that the prosecution of said suit had
been abandoned because of such evidence, and that plaintiff had
suppressed and concealed such fact from the court and defendant
throughout the litigation in the present cause."
The motion to reopen the case was denied by the circuit court of
appeals. 279 F. 674. An application to review this October, 1921,
decree by certiorari was made and was denied by this Court January
9, 1922. 257 U.S. 657.
Page 261 U. S. 408
At once, the Toledo Company filed its bill in the United States
Court for the Northern District of Ohio, which is summarized by the
circuit court of appeals in its opinion. 281 F. 488, 491. It
charged that, since 1901, the Computing Company had formed a
conspiracy with certain of its officers and agents to monopolize
the computing scale business of the country, and to put the Toledo
Company out of business; that, in 1902, it built and sold a
dishonest scale that the Toledo Company exposed in circulars, which
the Computing Company sought, but failed, to enjoin, which
increased its malicious hatred toward the Toledo Company; that then
the Toledo Company was making a fan scale, which, on the strength
of patents held by it, the Computing Company sought unsuccessfully
to enjoin, but dismissed the suits without a trial; that, in 1901,
the Computing Company brought suit in the Eastern Pennsylvania
District to enjoin the Federal Company from infringing the Smith
patent, and introduced three Phinney scales as exhibits in evidence
and depositions already referred to; that the suit was dismissed,
because the Computing Company was advised by counsel that the
Phinney defense was dangerous, and that the exhibits were by
stipulation retained by counsel for the Federal Company, who lent
them to counsel for Computing Company, in whose custody they were
until after the issue of validity had been decided in Chicago in
favor of the Computing Company; that a suit brought against one
Randall in Pennsylvania in 1901, and against the Standard Company
in Wisconsin in 1911, on the Smith patent, by the Computing
Company, had been dismissed after production of similar evidence of
the Phinney prior use; that, after 1906, the Computing Company
secretly purchased and took into its possession all the Phinney
scales it could get, being all of the 20 which Phinney ever made
except one or two then in the hands of users and except those in
the Federal, Randall, and Standard
Page 261 U. S. 409
suits; that these purchases were made in pursuance of the
conspiracy, secretly and fraudulently, for the purpose of
preventing the Toledo Company and the District Court of Northern
Illinois and the Circuit Court of Appeals of the Seventh Circuit
from learning of the Phinney commercial practice; that the Toledo
Company made diligent effort and investigation to find the Phinney
commercial practice, and also evidence of the Computing Company's
fraudulent suppression of evidence thereof; that, while Toledo
Company had had knowledge of the Phinney commercial practice since
1913, it had no knowledge of Computing Company's fraudulent
suppression thereof until December 20, 1921, which was after the
affirmance of the accounting decree. The bill further averred that
counsel for the Computing Company in 1913, in their brief on appeal
from the district court in this case, said that Phinney had never
made a successful scales or put it on the market, which the
Computing Company knew to be false, and that this deceived the
Toledo Company and its counsel into damaging admissions in the
circuit court of appeals as to the material of which Phinney's
scales were actually made.
This bill was supported by the same evidence used in the Seventh
Circuit applications of 1913 and 1921, and also by the affidavit of
one Koehne, who said that he was a patent lawyer and solicitor, and
had been in the employ of the Computing Company for a number of
years; that he was privy to the conspiracy charged in the bill and
a participant in it, but that the counsel employed to defend the
various patent suits referred to in the bill were not, and that the
agents and managers of the Computing Company with whom he worked
and talked were dead.
Page 261 U. S. 417
MR. CHIEF JUSTICE TAFT, after stating the case as above,
delivered the opinion of the Court.
It is insisted by counsel for the petitioner that it is within
our power, and it is our duty on this writ, to go into the merits
of the issue of the validity of the Smith patent and of the
correctness of the money decree for profits. We were asked to do
this by an application for writ of certiorari, which we denied
January 9, 1922. 257 U.S. 657. The decree then sought to be
reviewed was entered in October, 1921. The application for this
second writ of certiorari, which we are now considering, was not
made until May 22, 1922, more than three months after
Page 261 U. S. 418
the final decree in the circuit court of appeals for the payment
of profits. Section 6 of Act of September 6, 1916, c. 448, 39 Stat.
726, 727, directs:
"That no writ of error, appeal, or writ of certiorari intended
to bring up any cause for review by the Supreme Court shall be
allowed or entertained unless duly applied for within three months
after entry of the judgment or decree complained of."
This deprives us of jurisdiction to consider the merits of the
decree of October, 1921.
The case of
Hamilton Shoe Co. v. Wolf Brothers,
240 U. S. 251, is
cited to sustain a contrary view, but it fails to do so. In that
case, a writ of certiorari had been applied for to this Court to
review an interlocutory decree of the circuit court of appeals, and
denied. The case went back to the district court for a final
accounting for infringement of a trademark, and, after a final
decree for profits, came again to the circuit court of appeals and
was affirmed. Then a second application was made for a certiorari,
and it was allowed. The respondent contended that this Court could
not review the whole case, including the merits of the
interlocutory decree, because of the denial of the first
application for certiorari. We held that the denial constituted no
bar, because the decree sought then to be reviewed was not final.
Our power to grant writs of certiorari extends to interlocutory, as
well as final, decrees, and a mere denial of the writ to an
interlocutory ruling of the circuit court of appeals does not limit
our power to review the whole case when it is brought here by our
certiorari on final decree. In the case before us, the decree of
October, 1921, which we declined to review in January, 1922, was a
final decree, and we are expressly denied power to review it after
three months.
What we are to consider on this writ is whether the circuit
court of appeals, on the petition for a rule against
Page 261 U. S. 419
the Toledo Company, had anything presented to it in the record
in the Ohio court which required it to stay its hand in using
available process to enforce its final decree. We are very clear
that it had not. It has been necessary to make an elaborate
statement to show the complicated facts, but, when they are arrayed
in order so as to be understood, there is no escape from the
conclusion that the action of the Ohio court could not, and should
not, interfere with or stay the due course of proceedings of
enforce the Seventh Circuit decree.
The application to the circuit court of appeals in 1913 to frame
its mandate so as to permit that court to rehear the issue on the
merits of the validity of the patent already found and affirmed by
both courts was addressed to the discretion of that court, and it
was exercised to deny the application, presumably because the
application showed on its face a lack of the due diligence in not
producing the alleged newly discovered evidence in time to have
presented it to the trial court at the hearing on the merits in
June, 1912. The Toledo Company had been advised of the claim of its
infringement of the Smith patent within a year after it began to
make and sell the aluminum cylinder scale in 1906 by two suits of
the Computing Scale Company, and its attention had been directed to
the necessity of preparing for a defense. This was further
stimulated by the Chicago suit, the one at bar, in 1910, in which
the Toledo Company filed an answer averring, among other defenses,
that the Smith patent had been anticipated not only by the Phinney
patent itself, but by prior manufacture, sale, and commercial use
by Phinney of scales which embraced the device whose invention was
claimed by Smith, and that this prior use was at Pawtucket, Rhode
Island.
In spite of this, the agents and counsel of the Toledo Company
never visited Pawtucket before the hearing on the validity of the
Smith patent in June, 1912. The only
Page 261 U. S. 420
reason for this failure is the suggestion that the model of the
cylinder deposited by Phinney in the Patent Office with his
application was a small solid wooden cylinder, not full-size, which
led counsel to think that no practice under the patent would show
lightness of material and weight. It was a matter of equitable
discretion for the circuit court of appeals to determine whether
this was sufficient excuse.
Hopkins v. Hebard,
235 U. S. 287.
Certainly it was not an abuse of its discretion to hold that it was
not a good one. The natural and obvious course of one tracing out
evidence of prior commercial use of Phinney, which was formally
averred in the Toledo Company's bill to have taken place at
Pawtucket, would have been to go to Pawtucket and look up Phinney,
or, if dead, his family and successors. Had this course been
pursued, Phinney's widow and son would have been found there, and
several of those whose affidavits and depositions are now produced
who say that they bought and used the Phinney scales made with
light wood and paper cylinders. From those witnesses, too, the
investigator would have been led directly to the proceedings in
Federal Company suit in Philadelphia, the record of which contained
all this evidence, and he would have found without difficulty the
three original Phinney scales that were exhibits in that case. Nor
can we say that it was an abuse of discretion for the circuit court
of appeals to refuse a similar application, made in October, 1921,
to open up the case to permit a rehearing of an issue, settled nine
years before, when the evidence as to the lack of diligence of the
Toledo Company was just the same.
It is unnecessary to determine whether the applications of 1913
and 1921 come within the proper definition of a bill of review in a
court of chancery. It is enough to say that whether they were
merely motions for rehearing, like a motion for new trial at law,
or were applications in the nature of a bill of review, they were
addressed to the
Page 261 U. S. 421
sound discretion of the court, and, based as they were upon the
ground of newly discovered evidence, the indispensable condition of
their being granted was that the failure to discover the evidence
in time for the trial was not due to a lack of diligence on the
part of the applicant. That condition precedent was not
fulfilled.
Do the additional facts averred in the bill filed in the Ohio
court change the situation? It is said they show extrinsic fraud
committed by the Computing Scale Company upon proof of which a
court of equity, although in another jurisdiction, having
jurisdiction of the parties, may enjoin the one guilty of the fraud
from profiting by a decree so obtained. There has been much
discussion as to whether extrinsic fraud is here alleged, and the
case of
United States v. Throckmorton, 98 U. S.
61, is cited, and numerous other authorities since that
case. We do not find ourselves obliged to enter upon a
consideration of the sometimes nice distinctions made between
intrinsic and extrinsic frauds in the application of the rule,
because, in any case, to justify setting aside a decree for fraud,
whether extrinsic or intrinsic, it must appear that the fraud
charged really prevented the party complaining from making a full
and fair defense. If it does not so appear, then proof of the
ultimate fact -- to-wit, that the decree was obtained by fraud --
fails. That is the case here.
The allegations of the bill and of the affidavits are of a
conspiracy by the inner circle of the Computing Scale Company's
agents commenced in 1902, years before the Toledo Company began to
make and sell cylinder drum scales, to monopolize the business of
making and selling scales, to put the Toledo Company out of
business, and after it began to make cylinder scales, to prevent it
from so doing by suits brought on the Smith patent, which it knew
to be invalid because of the Phinney prior use. In pursuance of the
conspiracy, it is charged that it proceeded to buy up and keep from
the Toledo Company knowledge
Page 261 U. S. 422
of, and access to, the Phinney scales. Proof is adduced to show
that the Computing Scale Company did buy up as many of the Phinney
scales as it could secure. But there is not anywhere in the record,
which we can find or which has been pointed out to us, any real
evidence that the Toledo Company was in the slightest degree
interfered with by acts of the Computing Company in its search for
evidence of the Phinney prior use. Had the Toledo Company found, as
it might easily have done, the witnesses in Pawtucket, it would
have found the oral evidence as to the existence of the Phinney
scales, and would have been led directly to the Philadelphia suit,
where it would have found the cylinders it did find after June,
1912. Moreover, there were the Randall suit in Philadelphia in 1901
and the Standard suit in Wisconsin, where other Phinney scales were
also exhibits and open to inspection by the Toledo Company before
1912. There is not a scintilla of evidence to show any effort on
the part of the Computing Scale Company to induce any witnesses not
to testify, or to spirit them away from contact with the Toledo
Company. There is nothing to show that, if the Computing Scale
Company had not bought the Phinney scales, the Toledo Company would
have found them any earlier. The passages in the brief on behalf of
the Computing Company in the first hearing of the case on appeal in
the circuit court of appeals which stated that Phinney had not made
scales for commercial use had reference, of course, to the record
before the court, were made after the trial in the district court,
and so could not have misled the Toledo Company in its preparation
for that trial. The conclusion is unavoidable that the only cause
of the failure of the Toledo Company to produce this Phinney
evidence was the mistake of the counsel for the Toledo Company in
assuming that an inadequate model in the Patent Office filed by
Phinney showed no relevant prior use by him, and the failure of the
Toledo Company's agents
Page 261 U. S. 423
to take the ordinary and obvious course to make adequate inquiry
at Pawtucket as to the prior use which it had averred in the bill.
Certainly the Computing Scale Company was not responsible for the
inadequacy of Phinney's model, or for the failure of the Toledo
Company to make the inquiry before June, 1912. The averments as to
conspiracy to monopolize and to drive the Toledo Company out of
business, and the details of the purchase of Phinney scales, are
all irrelevant, because they are not shown to have had any causal
connection with the failure of the Toledo Company to find out
earlier what it did stumble on in 1913.
We do not understand it to be contended that there was any
relation between the Computing Scale Company and the Toledo Company
which made it the duty of the former to furnish evidence to the
latter to weaken its own case, or that silence in respect to the
Phinney scales constituted that kind of fraud which would
invalidate the decree unless it was accompanied by acts which
actually prevented the Toledo Company's finding and availing itself
of such evidence. Clearly there is no such rule of law in a case
like this.
Another aspect of this record leads to the same conclusion.
However nice the distinction between extrinsic and intrinsic fraud,
we have been cited to no case where it has been held that fraud is
extrinsic when the court rendering the decree attacked had before
it the same issue of fraud on the same facts, only a little more
elaborated as to the motive of the party charged with committing
it. The necessary inference from the affidavits filed in May, 1913,
by the Toledo Company, and its depositions in 1917, and its motion
and briefs in 1921 in the circuit court of appeals, was that the
Computing Scale Company had been securing Phinney scales with a
view of concealing them from the Toledo Company, and these were all
before the circuit court of appeals when it finally refused
Page 261 U. S. 424
to open the decree on its merits in 1921 to let in the evidence.
It did not add to the weight of that evidence, for the purpose for
which it could be used in either court, that this was the result of
a conspiracy to monopolize trade, or that it grew out of malicious
feeling toward the Toledo Company. What the District Court for
Northern Ohio was doing in hearing the injunction suit and issuing
a temporary injunction was merely reviewing the discretion of the
Circuit Court of Appeals of the Seventh Circuit in dealing with the
same ultimate facts and reaching a different conclusion. This was
beyond its province.
Embry v. Palmer, 107 U. S.
3,
107 U. S. 11;
Telford v. Brinkerhoff, 163 Ill. 439, 443;
Marine Ins. Co. v.
Hodgson, 7 Cranch 332.
It is pressed upon us that the amount of this decree, which by
reason of growing interest will considerably exceed half a million
dollars, is such that its enforcement may be ruinous to the Toledo
Company, and yet that company has never had an opportunity to bring
to a hearing this evidence of the Phinney prior commercial use
which, on the showing and argument, is clearly a complete defense
to a suit prosecuted by an unscrupulous competitor, conscious all
the time of its falsity and injustice. This view of the case is not
a fair one. The Toledo Company had a chance to make a defense of
the Phinney prior use, and failed to do so because of its own lack
of diligence. As it did not secure a hearing of the Phinney
defense, its opponent had no chance to meet it, as possibly it
might have done by showing that the use relied on was a futile one
because the Phinney scale as made was not practical, or did not
weigh accurately, or accomplish the purpose of the Smith patent.
The fact that but 20 machines were made, and that these ceased to
be used years ago or were destroyed suggests the probability of
such an answer. We cannot know what the result of the hearing would
have been on this
Page 261 U. S. 425
issue if tried, because only one side is presented. We are
prevented from knowing it by a most salutary rule of law which,
after parties have had a full and fair opportunity to prepare their
case, refuses to permit them to drag out litigation by bringing in
new evidence which with due diligence they ought to have discovered
before the hearing. The apparent hardship of particular cases
should not and cannot weigh against the application of this sound
principle. As Mr. Justice Story remarked in
Ocean Insurance Co.
v. Fields, 2 Story, 59, 18 Fed.Cas. No. 10,406
"It is for the public interest and policy to make an end to
litigation, or, as was pointedly said by a great jurist, that suits
may not be immortal, while men are mortal."
The surety companies object to the order of the circuit court of
appeals, directing the district court to enter summary judgment
against them for the amount due on the decree, because it causes
them to pay a decree which the Toledo Company, their principal,
deposited in Toledo banks enough money to their order to pay, but
which a court of competent jurisdiction enjoins them from paying,
or from using this money to pay. They say they are to be ground
between the upper and the nether millstones. They say they are
indifferent between the parties, and only wish to be protected. The
order which the circuit court of appeals directed against them was
within its jurisdiction.
Pease v. Rathbun-Jones Engineering
Co., 243 U. S. 273,
243 U. S. 278.
It was right, was final, and they must obey it. They can appeal
from the order of the Ohio court. Indeed, we are advised that the
cause is now pending on appeal in the Circuit Court of Appeals of
the Sixth Circuit. If they satisfy the decree of the Seventh
Circuit, they can be reasonably confident that they will not be
required to suffer a double burden. The Circuit Court of Appeals of
the Sixth Circuit is not likely to ignore the ruling of this Court
in the premises, and the cause pending in the Sixth Circuit can be
brought within the jurisdiction of this Court at any time by
certiorari.
Page 261 U. S. 426
It is objected that the circuit court of appeals had no power to
direct the district court to enjoin the Toledo Company from further
maintaining its Ohio bill or from filing elsewhere any similar
bill. It is also objected that it cannot direct the district court
to assess the Computing Company's expenses, including a reasonable
attorney's fee, in the matter of the Ohio bill, and to enter a
summary decree therefor. We think these orders were within the
power of the circuit court of appeals. This Ohio proceeding was
instituted to halt and defeat the decree of the circuit court of
appeals while that decree was still in that court to be enforced by
mandate to the lower court. Under § 262 of the Judicial Code, that
court had the right to issue all writs not specifically provided
for by statute which might be necessary for the exercise of its
appellate jurisdiction. It could therefore itself have enjoined the
Toledo Company from interfering with the execution of its own
decree,
Merrimack River Savings Bank v. Clay Center,
219 U. S. 527,
219 U. S. 535;
or it could direct the district court to do so, as it did,
Supreme Tribe of Ben Hur v. Cauble, 255 U.
S. 356;
Steel Co. v. R. Co. Supply Co.,
244 U. S. 294,
244 U. S. 299;
Kessler v. Eldred, 206 U. S. 285.
Moreover, when the character of the proceeding initiated by the
Toledo Company, a party before it, to stop the execution of its
decree was disclosed on a full hearing on the petition for a rule
against the Toledo Company, it had jurisdiction to determine
whether the filing and maintenance of the bill was in contempt of
its jurisdiction,
New Orleans v. New York S.S.
Co., 20 Wall. 387,
87 U. S. 392;
Swift v. Black Panther Oil & Gas Co., 244 F. 20, 29,
and, finding it to be so, to punish it by a compensatory
imposition,
Merrimack River Savings Bank v. Clay Center,
219 U. S. 527,
219 U. S. 535,
or to remand it to the district court to do so.
What we are considering here is the rightful course of a court
which, having entered a final decree, is proceeding
Page 261 U. S. 427
upon the application of the successful party in the decree to
put it into lawful execution. It is advised by this party that the
quasi parties, the sureties who have made themselves
directly liable upon summary process for prompt payment of the
decree, have been enjoined from complying with their obligation to
the court by a court of another jurisdiction, that the successful
party has also been enjoined from seeking enforcement of the
decree, and all this at the suit of the party condemned in the
decree to pay and on the ground of fraud exercised upon the court
itself in obtaining the decree. If the successful party, though
thus enjoined, is willing to risk punishment for contempt by the
enjoining court, and applies for enforcement of the decree, the
court whose decree it is is clearly not ousted of jurisdiction to
proceed to execute it. The proceeding in the enjoining court is
solely
in personam, and does not affect the power or
functions of the court whose decree is in question. If advised that
there is real ground for impeachment of its decree, it may, in its
discretion, stay its hand until the issue is determined in another
court of competent jurisdiction; but if, upon examination, it finds
no such ground advanced, it may properly proceed to secure to the
successful party the fruits of his litigation. If the defeated
party, in his suit in another jurisdiction, only seeks to restrain
the successful party from prosecuting his decree to payment, there
should be unusual circumstances of disrespect to the court entering
the decree to justify punishment for contempt. But, when he unites
in his new suit for an injunction the sureties who, as
quasi parties, are obliged to respond to the decree in the
course of execution, he puts himself in contempt of the court whose
decree it is, and may be punished for it. In the former case, he is
merely restraining a party who, without disobedience or disrespect
to any obligation to the court making the decree, has full
discretion and liberty to withhold his hand in pressing it to
Page 261 U. S. 428
execution. In the latter case, he is obstructing the process of
the court in a proceeding in which its action has been properly and
lawfully invoked. The degree of punishment for contempt in such
case is in the discretion of the court whose dignity has been
offended, and whose process has been obstructed.
New
Orleans v. New York Steamship Co., 20 Wall. 387.
Certainly it was not an abuse of discretion in this case to impose
as a penalty compensation for the expenses incurred by the
successful party to the decree in defending its rights in the Ohio
court.
Decree affirmed.
