court below in this respect should not be di turbed. [11] As to increase of damages: By a fo mal finding of fact, the master declared th he was not satisfied "that plaintiffs have su tained the burden of proving, by a fair pr ponderance of the evidence, their claim tha defendant has been guilty of willful infringe ment." The District Court affirmed the mas ter's report as against specific objections by plaintiffs, to the refusal to increase the dam This concurrent action should no lightly be set aside. Considering the entir case, we are not prepared to find that the infringement was willful or wanton. [12] About 95 per cent. of the rods embraced in the accounting were installed in cars already sold. The remaining 5 per cent. consisted of three classes-(1) rods in cars on hand June 4, 1924; (2) on hand on that date, but not yet incorporated in cars; and (3) rods sold to defendant's service stations. In computing damages on the basis of reasonable royalty, we see no sufficient reason why rods in unsold cars or not yet installed in cars should not be accounted for. Had defendant taken a license to manufacture, presumably it would have been required to pay for all manufactured; and had it bought from a lawful source, the result would have been the same. As to the third class mentioned: Had it appeared that the rods were intended for use in replacing worn out parts, they were not includable. Heyer v. Duplicator Co., 263 U. S. 100, 44 S. Ct. 31, 68 L. Ed. 189; Davis Elec. Works v. Edison Elec. Light Co. (C. C. A. 1) 60 F. 276. Cf. Tilghman v. Proctor, 125 U. S. 136, 8 S. Ct. 894, 31 L. Ed. 664. But we do not understand that it so appears here, and we think it a not unnatural presumption that the substantial curtain rods of the patent were not liable to actually wear out. We see no substantial basis for the contention that plaintiffs have been guilty of such laches in instituting this suit as to defeat right of recovery. The decree of the District Court is affirmed. Neither party will recover costs of this court. pre eir claim that Ellful infringermed the masobjections by -ease the damn should not ng the entire find that the ton. ods embraced d in cars al Der cent. conAs in cars on and on that In cars; and vice stations. sis of reasonreason why alled in cars d defendant presumably pay for all ght from a ave been the ed: Had it tended for they were icator Co., L. Ed. 189; . Light Co. ilghman v. 894, 31 L. and that it a not unantial curE liable to r the conguilty of as to de is affirmts of this VENERI V. DRAPER. MARIOTTI v. SAME. VENERI V. DRAPER 22 F.(2d) 33 Circuit Court of Appeals, Fourth Circuit. October 18, 1927. 1. Courts Nos. 2638, 2639. 352(7)—Under federal practice, District Judge may in proper case refer cause to auditor. Under federal practice, District Court judge has power in proper case to refer a cause to an auditor for the purpose of simplifying issues, and thereby enabling the court and jury to more readily determine matters in dispute. 2. Courts 352(7)—State statutes authorizing reference to master for determination of issues will not be followed by federal court (Conformity Act [28 USCA, § 724]; Const. Amend. 7). Practice prescribed by state statutes, authorizing reference to master for determination of issues in case, will not be followed by the federal courts under the Conformity Act (28 USCA § 724 [Comp. St. § 1537]), because of requirement of the Seventh Amendment to the Constitution that trial by jury be preserved. 3. Jury 31 (8)-Appointing auditor and receiving report in evidence held not unconstitutional (Const. Amend. 7). Appointing an auditor and allowing his report to be received in evidence held not to constitute a violation of Const. Amend. 7. 4. Reference 8(3)—Trial court properly referred case involving examination of bank accounts. In case involving examination of banking accounts, extending over period of years and embracing large number of deposits and checks, the trial court properly exercised its power to refer case to auditor. 5. Reference 29-Order of reference in case involving examination of bank accounts properly directed auditor to report findings as to indebtedness. Order of reference, in case involving examination of bank accounts extending over a number of years and embracing numerous deposits and checks, properly directed auditor to report his findings as to the indebtedness of the parties; he being required to take, state, and report an account which would show, not only amount due by party found to be indebted, but also the facts on which such finding could be predicated. 6. Reference 99(6)-Auditor's report was properly admitted in evidence, with charge that it was prima facie correct. Where case involving examination of bank account, extending over period of years and embracing numerous deposits and checks, was referred to auditor, report of auditor was prop erly admitted in evidence, with charge that it was prima facie correct. 7. Courts 352(7)-Procedure prescribed by state law on reference, being similar under federal practice, may properly be followed by federal court (Barnes' Code W. Va. c. 129, § 10; Conformity Act [28 USCA § 724]). Procedure prescribed by Barnes' Code W. Va. c. 129, § 10, in case of reference being 22 F. (2d)-3 33 practically the same as that followed under federal practice, may properly be followed by federal courts of West Virginia under the Conformity Act (28 USCA § 724 [Comp. St. § 1537]). 8. Appeal and error 260 (1)-Appellate court will consider point relating to admission of testimony, which is not based on exception, only in exceptional cases. Point relating to admission of evidence, which is not based on an exception in record, will not be considered by appellate court, except in very exceptional cases. 9. Appeal and error 260(1)—Assignment of error will not take place of exception. An assignment of error will not take the place of an exception to admission of evidence. 10. Evidence 353 (2), 354(5)-In receiver's action to recover moneys paid on checks and not charged to account, checks and ledger sheets covering accounts held admissible. In action by receiver of bank against depositors to recover for moneys paid out on checks of defendants and not charged to respective accounts, checks and ledger sheets covering accounts were admissible in evidence as showing that checks in controversy had not been charged against account. 11. Banks and banking 77(6)—Instruction, in receiver's action against depositors, that bank statements showing balance was binding, held properly refused, In action by receiver of bank against depositors to recover for moneys, paid out on checks and not charged to their account, requested instruction to effect that, if bank rendered statements showing balance in favor of defendants up to time of its closing, those statements would be binding on parties, held properly refused, in that it would mean sending of statements concluded rights of parties, notwithstanding testimony that bank had paid out large sums for defendants on checks not charged to their accounts. 12. Account stated 6(3)-Generally statement of account sent by bank to customer becomes account stated. Generally, where statement of account is sent by bank to one of its customers, together with his canceled checks or vouchers, and customer retains them, and does not object to it within a reasonable time, it becomes account stated between bank and depositor. 13. Account stated 8-Bank statements sent customer are not conclusive, even after they have been retained and acquiesced in. Bank statements sent customer are not conclusive, even after they have been retained and acquiesced in by customer, thereby becoming an account stated, since an account stated may be impeached for fraud, mistake, or error. 14. Account stated 12-Account stated, as defense in action at law, may be impeached without resorting to bill in equity. Where account stated is asserted as a defense in an action at law, it may be impeached there, without resorting to a bill in equity. 34 22 FEDERAL REPORTER, 2d SERIES 15. Banks and banking 77 (6)-Evidence as to statements furnished bank depositor being erroneous held sufficient to make question of effect one for jury. In action by receiver of bank against depositors to recover moneys paid out on defendants' checks and not charged to their accounts, evidence relative to statements rendered by bank being erroneous held sufficient to make question as to their effect one for jury. In Error to the District Court of the United States for the Southern District of West Virginia, at Bluefield; George W. McClintic, Judge. Separate actions by Charles H. Draper, receiver of and for the First National Bank of Matoaka, against Lorenzo Veneri and against Ermin Mariotti, which cases were tried together in lower court and argued together. Judgments for plaintiff, and defendants separately bring error. Affirmed. John Kee, of Bluefield, W. Va. (A. J. Lubliner, of Bluefield, W. Va., on the brief), for plaintiffs in error. D. M. Easley, of Bluefield, W. Va. (D. E. French and J. W. Easley, both of Bluefield, W. Va., on the brief), for defendant in error. Before PARKER, Circuit Judge, and SOPER and ERNEST F. COCHRAN, District Judges. were such that an account should be taken and stated between the parties, and for that purpose referred them to an auditor or "commissioner," with directions that, in addition to an account showing the indebtedness of the parties, he report all of the facts upon which his findings as to indebtedness should be predicated. The auditor, after hearing evidence, made a report in each case, stating the account between the bank and the defendant therein, and showing that Veneri owed a balance of $1,961.11, and Mariotti one of $6,720.73. In the case of each of the defendants, he reported that they were entitled to certain minor credits, which did not appear on the account of the bank, but that the checks shown in the bill of particulars had been paid by the bank and not charged against them. He found that Veneri had been a depositor from June 6, 1922, to February 25, 1925, during which time he had made 177 deposits and drawn 894 checks, including the 21 checks not charged against him, and that Mariotti had been a depositor from March 1, 1919, to February 25, 1925, and had made 404 deposits and drawn 2,044 checks, including the 47 not charged. With the report in each case he sent the evidence taken and the exhibits. The report of the auditor was dated the 14th day of January, 1927, and no exceptions seem to have been filed thereto by defendants. On the 7th day of February following the case was heard in the District Court before a jury. The receiver introduced the report of the auditor and testified that the checks described in the bills of particulars had been paid by the bank, but had not been charged against the accounts of defendants. The checks themselves were introduced in evidence, as were the accounts of defendants kept by the bank, showing that the checks had not been charged. Each of the defendants took the stand and testified generally that he had not overdrawn his account, and each introduced a number of statements sent him by the bank showing balances to his credit. Veneri introduced, among others, one showing that on February 25, 1925, he had a balance in the bank of $94.40. Mariotti introduced one showing a balance in his favor on January 31, 1925, of $346.04. Both, however, admitted signing the checks described in the bills of particulars, and neither testified to any deposit with which he was not properly credited in the report of the auditor. The judge, among other things, charged the jury that the report of the auditor was prima facie correct. The District Judge found that the cases Defendants requested him to charge that, if PARKER, Circuit Judge. These cases were tried together in the court below and argued together here. They were instituted by the receiver of the First National Bank of Matoaka, W. Va., against Lorenzo Veneri and Ermin Mariotti, to recover for moneys paid out by the bank on the checks of these defendants and not charged to their respective accounts. Bills of particulars were filed, setting forth the checks and showing when and to whom they were paid. In Veneri's case, there were 21 of these checks, totaling $2,053.59, paid at various times between July 17, 1922, and January 26, 1925. In Mariotti's case, there were 47 checks, totaling $7,113.84, paid at various times between July 21, 1920, and February 19, 1925. Under the practice prevailing in West Virginia, the defendants filed specifications of defense, denying that the checks were in fact paid, alleging that defendants at all times had on deposit sufficient funds to meet all checks drawn on their accounts, and pleading that the bank was bound by statements which it had sent defendants from time to time, showing the state of their respective accounts and balances to their credit. taken that 'comlition Ess of upon hould aring ating. e deeneri riotti -f the e en d not = that -ticu - not eneri 2, to e had ecks, ainst sitor 1925, 2,044 With ence the cep-de fol trict uced that Licu not de in unts that of fied ac ate bal red, pru ank ing 25, ing cu ith the ong re ect. if the jury should find that monthly statements termination of issues of fact by the jury is Under their assignments of error the defendants make four contentions: (1) That the judge erred in referring the case to an auditor over their objection; (2) that he erred in admitting in evidence the report of the auditor, and in charging the jury that it was prima facie correct; (3) that he erred in admitting in evidence the checks which are the basis of the controversy, and the accounts of the defendants as kept by the bank; and (4) that he erred in refusing the instruction requested. [1-3] There can be no question, we think, that under the federal practice the judge has the power in a proper case to refer a cause to an auditor for the purpose of simplifying the issues and thereby enabling the court and the jury to more readily determine the matters in dispute. It is true that the practice prescribed by state statutes which authorize reference to a master for determination of the issues in a case will not be followed by the federal courts under the Conformity Act (28 USCA § 724 [Comp. St. § 1537]) because of the requirement of the Seventh Amendment to the Constitution that trial by jury be preserved. But the power is in herent in the federal courts independently of any statute to refer cases involving long accounts or complicated questions of fact to an auditor in advance of a jury trial to "present the case to the court in such manner that intelligent action may be there had." Ex parte Peterson, 253 U. S. 300, 40 S. Ct. 543, 64 L. Ed. 919; Chicago, Milwaukee, etc., Ry. v. Tompkins, 176 U. S. 167, 180, 20 S. Ct. 336, 44 L. Ed. 417; Peterson v. Davison (D. C.) 254 F. 625; U. S. v. Wells (D. C.) 203 F. 146 (opinion by Judge, now Mr. Justice, Sanford); Vermeule v. Reilly (D. C.) 196 F. 226; Craven v. Clark (C. C.) 186 F. 959. And it is settled that appointing an auditor and allowing his report to be received in evidence does not violate the Seventh Amendment. Ex parte Peterson, supra, 253 U. S. at pages 309-312 (40 S. Ct. 546). In that case Mr. Justice Brandeis, in delivering the opinion of the court, pointed out that the Seventh Amendment does not require that old forms of practice and procedure be retained nor prohibit the introduction of new methods for determining what facts are actually in issue so long as the right of trial by jury is not obstructed and the ultimate de "In view of these decisions, it cannot be deemed an undue obstruction of the right to a jury trial to require a preliminary hearing before an auditor. Nor can the order be held unconstitutional, as unduly interfering with the jury's determination of issues of fact, because it directs the auditor to form and express an opinion upon facts and items in dispute. The report will, unless rejected by the court, be admitted at the jury trial as evidence of facts and findings embodied therein; but it will be treated, at most, as prima facie evidence thereof. The parties will remain as free to call, examine, and cross-examine witnesses as if the report had not been made. No incident of the jury trial is modified or taken away either by the preliminary, tentative hearing before the auditor or by the use to which his report may be put. An order of a court, like a statute, is not unconstitutional because it endows an official act or finding with a presumption of regularity or of verity." [4] And we think it is equally clear that the power to refer the case to an auditor was properly exercised in this case. As said in the Peterson Case, whether the power shall be exercised is ordinarily a matter resting in the sound discretion of the trial judge; but undoubtedly it is the better practice to refer the case to an auditor, where complex and intricate accounts are to be examined, or where extensive computations are to be made. Veneri's Case involved the examination of a bank account extending over 22 years and embracing 177 deposits and 894 checks; Mariotti's involved an account extending over approximately 6 years and embracing 404 deposits and 2,044 checks. The case seems comparatively simple, since it has been simplified by the auditor; but it was not simple in the beginning. The payment of the checks in controversy was denied by the specifications of defense, and payment had to be proved, by tracing each check through the dealings between the bank and its correspondents. The allegation that ample funds were deposited to meet the checks necessitated a minute examination of the accounts, for the purpose of determining that deposits were properly credited and that the checks in controversy were not charged. It would have been practically impossible to try the case before a jury, without having the con fact therein set forth. The report, evidence sufficient to satisfy the burd proof (Wyman v. Whicher, 179 Mass. 27 N. E. 612]), would tend to dispense the introduction at the trial before the of evidence on any matter not actual dispute." And further in the opinion it said: report will, unless rejected by the cou admitted at the jury trial as evidence of and findings embodied therein; but i be treated, at most, as prima facie evi thereof. The parties will remain as f call, examine, and cross-examine witnes if the report had not been made. The reasons for holding an auditor's admissible as evidence are, in one re stronger than for giving such effect report of an independent tribunal li Interstate Commerce Commission. The tor is an officer of the court which ap him. The proceedings before him ar ject to its supervision, and the repor be used only if, and so far as, accepta the court." [7] The point that the judge, in maki order of reference, in admitting the of the auditor in evidence and in charg to its effect, professed to follow the s of West Virginia, is without merit. statute (chapter 129, § 10, of Barnes' Virginia Code) prescribes practicall same procedure as is approved by th preme Court in the Peterson Case. is no conflict, therefore, between tha ute and the Constitution and statutes United States, and no reason why the tice which it prescribes should not b lowed by the federal courts of West V under the Conformity Act. But, apar this, the procedure followed was pro we have seen, under the federal practic where the judge has done the right it will not be held for error that he ma given a wrong reason for doing it. [8-10] The next contention of defe relates to the admission in evidence checks in controversy and the ledger showing bank accounts of the defen but the record does not show that defe objected to the admission of either the or the ledger sheets, or took any exce to their admission. The assignments ror challenge the admission of the chec not that of the ledger sheets. Only exceptional cases, of which this is n will we consider a point relating to mission of testimony which is not base an exception in the record; and it is that an assignment of error will not t |