BICKLEY V. DROSTE & SNYDER, Inc. Circuit Court of Appeals, Third Circuit. June 21, 1928. No. 3771. 1. Compromise and settlement 15(1)-Compromise agreement held not to provide either for suit to finish or compromise in action to be instituted by defendant. In action for damage accruing on defendant's guaranty of performance by third parties of certain contracts which defendant, assigned to plaintiff, compromise agreement, in which plaintiff reassigned contracts and released defendant from guaranty, and defendant agreed to institute and prosecute suit against third parties, proceeds to be distributed between plaintiff and defendant, held not to permit either party to compel course of action unfair to the other in conduct of suit, since contract, by use of words "recovery by said suit or otherwise," did not provide either for suit to finish or compromise. 24-Whether 2. Compromise and settlement defendant violated plaintiff's rights in compromising action against third persons provided for in settlement agreement held for jury. In suit in which plaintiff averred that defendant failed to prosecute suit against third parties to finish, as agreed in compromise agreement in settlement of another action between plaintiff and defendant, and that defendant thereby became liable to plaintiff for full amount to be sued for, question whether defendant, in compromising such suit against third parties, violated rights of plaintiff, held for jury. Appeal from the District Court of the United States for the Eastern District of Pennsylvania; Oliver B. Dickinson, Judge. Suit by Droste & Snyder, Inc., against I. W. Bickley, trading as A. F. Bickley & Son. From the decree, defendant appeals. Accounting vacated, and cause remanded, with instructions. written agreement, in which Droste reassigned the contracts absolutely to Bickley and released him from his guarantee thereof. On his part Bickley paid Droste $10,000 cash and agreed as follows: "The party of the second part agrees to institute and prosecute at his own proper cost and expense, except as hereinafter provided, suit against Bowman & Company, Inc., Chicago, on the said contracts, for the amount of twenty-one thousand six hundred dollars ($21,600) with interest from December 31, 1917. "In the event of recovery by said suit or otherwise of the sum of twenty-one thousand six hundred dollars ($21,600), or of any sum, upon the said contracts or either of them, the proceeds thereof are to be distributed as follows: "The first ten thousand dollars ($10,000) are to be paid to the party of the second part and in addition thereto the party of the second part is to receive the expense of travel and other expenses incident to the suit, plus his attorney's fees in the suit." Save the closing stipulation, viz.: "After the above amounts have been paid to the parties of the first and second parts, any sums remaining in excess of the aforementioned amounts will be divided and paid fifty (50%) per cent. to the party of the first part and fifty (50%) per cent. to the party of the second part," other details of the agreement need not be here stated. In pursuance of his agreement, Bickley instituted suit in the court of the Northern District of Illinois, which suit was defended on the alleged ground that before the time for performance of the contract the Lever Act was passed, and prohibited performance by the defendant. On trial this defense was sustained, and a verdict rendered for defendant. On review by the Circuit Court of Appeals for the Seventh Circuit, judgment was reversed and a new trial granted. Thereafter it appeared that the Circuit Court of Appeals for the Sixth Circuit had held a contrary view on a similar contract between other parties, and that the Supreme Court had granted a certiorari in the latter case. In this situation Bickley, as is alleged, under the advice of experienced counsel and in good faith, compromised his case for $15,000. Thereupon Droste filed a bill in equity in the court below against Bickley, averring in substance that Bickley stood in a trust relation, that he was bound to prosecute the suit in Illinois to a finish, and by his failure so to do became liable and was bound to account for $21,600, the 27 F.(24) 25 full amount of the claim. On the other hand Bickley contended the agreement did not restrict him to prosecuting the case to a finish, but by the alternative provision, "in the event of recovery by suit or otherwise of the sum of twenty-one thousand six hundred dollars ($21,600) or of any sum upon the said contracts or either of them," he had a right to compromise, in view of the situation that confronted him. On hearing the late Judge McKeehan agreed with Droste's contention and ordered an accounting, which was had under the directions of Judge Dickinson, who felt constrained, as did also the master, to follow Judge McKeehan's construction of the contract, with the result that a decree was entered on the basis of Bickley accounting for the full amount of the claim, to wit, $21,600. From a decree accordingly, Bickley appeals, and the whole case comes before us for review. contract, and each party insisting wrongfully, as we think, on the absolute and unqualified right of Droste, on the one hand, to compel prosecution of suit to a finish, and of Bickley, on the other, to settle as he saw fit, it is evident the issue between them was one either of alleged breach of the agree ment with consequent damage, or alleged compliance with the contract. This was therefore an issue to be settled by a jury in an action at law for breach of contract. We therefore feel Judge McKeehan fell into error in holding that Droste had the unqualified right to compel Bickley to prosecute the suit to a finish, and on his failure so to do became liable to account as a trustee to the full amount of $21,600. The accounting made in pursuance of that view must therefore be vacated. The cause will be remanded to the court below for such action, either by transferring the case to the law side of the court or by proceeding before the master, as shall determine several rights and liabilities of the parties-whether, on the one hand, under the circumstances of the case, Bickley did not act with good faith and with due regard to Droste's rights, and so broke the contract by not litigating the case to a finish, and, if so, the damage suffered by Droste thereby; or whether, on the other hand, the compromise was made by Bickley with due regard to Droste's rights. H. LINEAWEAVER CO. Circuit Court of Appeals, Third Circuit. No. 3803. [1,2] As we view the agreement made in settlement of the original suit, both parties had rights under it, but those rights each was to exercise with a due regard to the rights of the other party. It provided Bickley should at once pay Droste $10,000, and his right to first recoup this $10,000 in case the claim against the third party was recovered was recognized. On the other hand, Droste gave Bickley an absolute release from the balance of the claim of $21,600, and provision was accordingly made for Droste's participating in the balance of the claim in case of recovery. Such being the general CENTRAL R. CO. OF NEW JERSEY v. H. purpose and aim of the settlement, it follows that, in carrying out the plan of procuring a recovery "by said suit or otherwise," neither party would so unreasonably or unfairly insist on his own rights as to unreasonably and unfairly affect the rights of the other. In other words, Droste should not so arbitrarily insist on the suit being prosecuted to a finish, if thereby Bickley was made to lose the fruit of the agreement to be initially recouped for the $10,000 paid Droste; and, on the other hand, Bickley should not so arbitrarily stop the prosecution of the suit to a finish, if thereby Droste was made to lose the fruit of the agreement which made him a later participant. From this it will be seen that, in our view, the words "recovery by said suit or otherwise" provided both for suit to a finish or a compromise, but that neither party could compel a course along either line that, under all the circumstances of the case, was unfair to the other. Carriers 196-Whether seller, directing shipment by another, was consignor, and liable for freight charges, held for jury. Whether seller of coal, directing mining company's foreman to make shipment, was consignor, held a question for the jury, in railroad company's suit against him for freight charges. In Error to the District Court of the United States for the Eastern District of Pennsylvania; J. Whitaker Thompson, Judge. Action by the Central Railroad Company of New Jersey against the H. H. Lineaweaver Company. From a judgment for defendant, plaintiff brings error. Judgment vacated, and case remanded, with directions. Edwin A. Lucas and Arthur G. Dickson, both of Philadelphia, Pa., for plaintiff in er Such being the proper construction of the ror. Isaac A. Pennypacker, Alfred G. Muench, and Pepper, Bodine, Stokes & Schoch, all of Philadelphia, Pa., for defendant in error. Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges. BUFFINGTON, Circuit Judge. In the court below the Central Railroad Company of New Jersey, a corporation of that state, brought suit against H. H. Lineaweaver Company, Inc., a corporation of Pennsylvania, hereafter called Lineaweaver, to recover some $3,800, being the freight and demurrage charges on certain cars of coal alleged to have been shipped by Lineaweaver, and which the consignee refused to accept. On conclusion of the defendant's testimony the court granted a compulsory nonsuit, whereupon this appeal was taken, and the question involved is: Was it, under the evidence, the right of the court or the province of the jury to determine whether Lineaweaver was the consignor of the coal? After considering the proofs, we are of opinion they were such that this question was one of fact, upon which men of reasonable mind, and therefore the jury, might draw different conclusions. In reaching that conclusion we note these elements of proof: On December 1, 1921, Lineaweaver sold the coal in question to Pattison & Bowns, of New York, hereafter called Pattison. The sale was evidenced by a letter from Lineaweaver to Pattison, which acknowledged "order given us to-day, which has been entered, ⚫ 10 cars of Mahanoy Plane barley at $1.00 per gross ton mines. Consigned to: C. Pardee Works, Perth Amboy, New Jersey, via C. N. J. R. R. Ship one car per day. Terms of payment: 15th of the month following shipment." The letter further referred to Lineaweaver and Pattison, respectively, as buyer and seller, and provided that "originating bill of lading weights or originating railway scale weights, as the case may be, to govern all settlements." It further provided: "Every effort will be made for the prompt and faithful performance of this contract, but seller will not be responsible for delivery hereunder, if prevented by strikes," etc. Standing by itself this paper tended to show that Lineaweaver sold the coal in question, fixed the price and time of payment, specified the carrier, made provision for the carrier's scales determining a weight binding on both, recognized seller's obligation to ship, and for a release in case shipment was prevented by strikes, car shortage, etc. Being thus under contract to ship and deliver a specified carrier, this paper tended to show asserted ownership of the coal by Lineaweaver and agreement to deliver the coal so sold to the named railway for carriage. On the same day Lineaweaver wrote Eisenhart, foreman Mahanoy Plane Coal Co.: "Dear Sir: We are inclosing you herewith an order for ten cars of barley coal to be shipped at the rate of one car per day to C. Pardee Wks., Perth Amboy, N. J., via P. & R., Bound Brook Jct., C. R. R. of N. J. The order for Pardee Wks. is a sample shipment and one that will result in large tonnages, providing the coal we ship them is satisfactory." This letter and the accompanying order were in keeping with the sales contract above recited, and tend to show that Lineaweaver was complying with its obligation as seller, viz. ordering the specified barley coal from a mine, directing shipment on the specified. railroad, and by its general purport and the language "providing the coal we ship them is satisfactory," indicating Lineaweaver was the shipper of the coal. Acting on this order, and using four printed forms Lineaweaver furnished, the coal was reported to Lineaweaver as shipped, the form stating: "Shipped by Mahanoy Plane Coal Co., per P. & R. Ry., account H. H. Lineaweaver & Co., Inc., the following cars of Hudson coal for C. Pardee Wks., Perth Amboy, N. J., via P. R., Bound Brook Jet., C. R. R. of N. J." Three of these forms as above filled out, were delivered to the railroad, the coal was later weighed, and one form delivered to Lineaweaver, after the weighmaster had entered on them the scale weights of the coal. The original was retained by the weighmaster and one copy retained by the railroad for billing purposes. No bill of lading was issued, and the course pursued was evidently a practice recognized by Lineaweaver's stipulation in the contract of sale, viz.: "Originating bills of sale, or originating railway scale weights, as the case may be, to govern." From the above it will be seen that there was evidence tending to show that, by their several courses of conduct, both the railroad and Lineaweaver acted toward each other as carrier and consignor, and that beyond the physical delivery of the coal, which by Lineaweaver's own form was "account of H. H. Lineaweaver & Co., Inc.," the mining company had no connection with the shipment, and the routing, ascertainment of weight, and report thereof were made by the railroad to Lineaweaver and to no other person or party. The consignee refused to take the coal, and the railroad notified Lineaweaver and Pattison, but both disclaimed responsibility 27 F.(2d) 27 application or amendment must be supported by new affidavit, and application takes filing date only from that embodiment. If new matter is embodied either in division for freight or demurrage. These are other 3. Patents 109-New matter in divisional elements-bills rendered by Lineaweaver to Pattison for the coal, and letters asserting Lineaweaver's right to recover the value on the basis of its sale contract, etc.; but, without referring to them in detail, it suffices to say we regard the proofs were such as made it the right of the railroad to have the jury determine the issue whether, as to it, Lineaweaver was the consignor of the coal. We have not overlooked or disregarded the testimony that Lineaweaver was the sales agent of the Mahanoy Plane Coal Company, on which the court based its action in taking the case from the jury; but, apart from the fact of what the nature of that agency was, whether it consisted of selling the coal for the account of the colliery, or Lineaweaver's taking all the product of the mine for sale on its own account, and of the further fact that the proof was that Lineaweaver owned all the stock of the Mahanoy Plane Coal Company and kept its books, we do not see how the general fact of the existence of an agency could affect the railroad, and render of no moment the proof of the relation of sole consignor and shipper, which the documents and acts of the parties quoted above tended to show. The judgment below will therefore be vacated, and the case remanded, with directions to vacate the nonsuit, reinstate the case, and proceed in due course. al application or an amendment, new matter must be supported by new affidavit, and will take its filing date only from that embodiment, and, as to anything which is not new matter, tinues to have benefit of first filing date. application, whether parent or divisional, con 4. Patents 109-Divisional application Is limited to invention disclosed by original, save instances of permitted new matter. There is no right to file a divisional application, except for an invention which is disclosed by the original, save instances of permitted new matter. 5. Patents 328-1,509,382, for demountable rim for automobile wheels, held not invalid for delay in filing divisional application on which it was based, in view of complete disclosure by original application. Wagenhorst patent, No. 1,509,382, for demountable rim for automobile wheels, based on a divisional application, held not invalid for delay in filing divisional application, since pat entee was entitled to make divisional application and carry his invention back to date of first filing, in view of fact that disclosure was complete by first drawing of invention and by general description, which was given, and no additional disclosure as to construction and operation of device was made by divisional application. 6. Patents 90 (5)-That which is disclosed in application duly filed is reduction to practice, and evidences completed invention at such date, even though not then claimed. What is disclosed in a patent application duly filed is a reduction to practice, and evidences completed invention at that date, even WAGENHORST v. HYDRAULIC STEEL CO. though it was not then claimed. 7. Patents 99-What clearly appears by drawing may be sufficient disclosure, though not fully described. What clearly appears by a drawing of an invention, though not fully described, may be a sufficient disclosure. 8. Patents 109-Inserting by amendment fuller description of what completely appears by original drawing is not insertion of new matter. To insert by amendment a fuller description of what completely appears by the original drawing of an invention and was intelligently described is not to insert new matter. 9. Patents 99-Where construction and operation are obvious, applicant need not describe advantages or know them. Where the construction and mechanical operation of an invention are obvious, it is not necessary that the applicant should describe the advantages or should know them. 10. Patents 109-That applicant, did not realize claims were inadequate until seeing competing device does not preclude amendment of claim, so long as applicant does not depart from or unduly enlarge invention shown by specifications and drawings. So long as patent applicant does not depart from or unduly enlarge invention actually shown by his specifications and drawings, he may at any time amend his claim, so as to secure his real invention, and it is not controlling that he did not realize his claims were inadequate until he saw competing device. Wagenhorst patent, No. 1,509,382, for demountable rim for automobile wheels, held invalid for lack of invention. Appeal from the District Court of the United States for the Northern District of Ohio; D. C. Westenhaver, Judge. Patent infringement by James H. Wagenhorst against the Hydraulic Steel Company and others. Decree dismissing bill, and plaintiff appeals. Affirmed. C. B. Des Jardins and Melville Church, both of Washington, D. C., for appellant. John F. Oberlin, of Cleveland, Ohio (Baker, Hostetler & Sidlo, Fay, Oberlin & Fay, and Jos. C. Hostetler, all of Cleveland, Ohio, on the brief), for appellees. Before DENISON and MOORMAN, Circuit Judges, and HICKS, District Judge. DENISON, Circuit Judge. Infringement suit on the Wagenhorst patent, No. 1,509,382, issued September 23, 1924, upon a demountable rim for automobile wheels. The patent was based upon a divisional application, filed December 21, 1923, in the course of prosecuting an original application, filed April 2, 1921. The District Court dismissed the bill because he thought the patent invalid, both for lack of invention and because of delay in filing the divisional application. [1-3] Since, if the latter reason were sound, the case might well be affirmed on that ground without attention to the former reason, we think it appropriate to consider the effect of this delay. There is no particular statutory regulation as to what may be contained in a single patent application; the inference that one application should be confined to one invention is fair enough, but this does not affect the difficulty of distinguishing be tween what are, and what are not, parts of the same invention. Any rule on this subject must be largely arbitrary and of convenience. Such rules as have been established do not seem entirely consistent. Method or process, and machine or apparatus, and product or article of manufacture, may be separate inventions, and yet they often have been allowed to be united in one patent. Where a somewhat complex machine or structure includes details of part A and details of part B, and both need not always be embodied, there is no inherent reason why there might not be in one patent a generic claim covering both and specific claims respectively to the two alternative forms; but the practice is firmly established that a single patent may contain the generic and relatively generic claims and a specific claim to one form only of the concrete embodiment. Accordingly, where the application presents specific claims to alternative forms, the applicant is required to amend by confining his claims in that application to one form and by filing a divisional application for the other form if he wishes to insist upon it. Such a division involves no new matter, and is nothing but a portion of the required amendment. The applicant may retain the generic claim and specific claim A in the parent application and file the divisional application for specific claim B, or he may do the converse, as he prefers. A divisional application is a form of an amendment, and we see no basis for distinction in the principles applicable to a divisional application and to any other kind of an amendment. If what is technically new matter is embodied in either, that new matter must be supported by a new affidavit, and will take its filing date only from that embodiment. As to anything which is not new matter, the application, whether parent or divisional, continues to have the benefit of the first filing date.1 The patent statute prescribes that the right to a patent is abandoned and the patent is invalid if the patentee, even though the first inventor, has delayed his application until two years after the invention has been put into public use or has been described in any printed application. By analogy to this statutory rule, the Supreme Court long ago held that a delay of two years in filing a reissue application, for the purpose of |