Source: https://supreme.justia.com/cases/federal/us/114/104/
Timestamp: 2019-04-22 06:08:59+00:00

Document:
Under the rules and practice of this Court in equity, a decree pro confesso is not a decree as of course according to the prayer of the bill, nor as the complainant chooses to make it, but it should be made by the court according to what is proper to be decreed upon the statements of the bill, assumed to be true.
The difference between former rules in equity and those now in force pointed out.
Whether, after a bill is taken pro confesso, the defendant is entitled to an order permitting him to appear before the master is not now decided.
After entry of a decree pro confesso, and while it stands unrevoked, the defendant cannot set up anything in opposition to it, either below or in this Court on appeal, except what appears on the face of the bill.
In a suit in equity to restrain the infringement of a patent and for an account, the defendant cannot question the validity of the patent after a decree pro confesso establishing its validity.
A delay in applying for the reissue of a patent which appears on the face of the proceedings, and which, unexplained, might be regarded as unreasonable, cannot be set up against the patent by a defendant after a decree pro confesso has been taken in a suit in equity which is founded on and sets up the patent and seeks to restrain him from infringing it.
It is irregular to introduce, pending an appeal, an original patent not introduced below.
Affidavits before a master or the court below as grounds of application to reopen proofs form no part of the evidence before the Court on appeal.
In proceedings before a master after the bill in a suit to restrain infringement of a patent has been taken pro confesso, it is not proper to inquire into the cost of producing a result by other processes or machines; the proper inquiry relates to the profits enjoyed by defendants by reason of using the patented invention.
in December, 1872. The suit was brought on the reissued patent, a copy of which was annexed to the bill, which contained allegations that the invention patented had gone into extensive use not only on the part of the complainant, but by his licensees, and that many suits had been brought and sustained against infringers. The bill further alleged that the defendants, from the time when the patent was reissued down to the commencement of the suit, wrongfully and without license, made, sold, and used, or caused to be made, sole, and used, on or more folding guides, each and all containing the said improvement secured to the complainant by the said reissued letters be made, sold, and used, one or more folding guides, great gain and profits from such use, but to what amount the complainant was ignorant, and prayed a disclosure thereof, and an account of profits, and damages, and a perpetual injunction.
The bill of complaint was accompanied with affidavits verifying the principal facts and certain decrees or judgments obtained on the patent against other parties, and Douglass' original application for the patent, made in April, 1856, a copy of which was annexed to the affidavits. These affidavits and documents were exhibited for the purpose of obtaining a preliminary injunction, which was granted on notice.
and state an account of said profits, and to assess said damages, with directions to the defendants to produce their books and papers and submit to an oral examination if required. It was also decreed that a perpetual injunction issue to restrain the defendants from making, using, or vending any folding guides made as theretofore used by them containing any of the inventions described and claimed in the patent, and from infringing the patent in any way.
damages. The evidence taken by the master was filed with his report.
By a supplemental report, filed at the same time, the master stated the fact of the application made to him to open the proofs on the ground of surprise and newly discovered evidence (as before stated), and that after hearing said application upon the affidavits presented (which were appended to the report), he was unable to discover any just ground therefor.
1. That instead of the double guide or folder claimed in the complainant's patent being the only means for folding cloth or strips on each edge during the period of the infringement (other than that of folding by hand), the master should have found that such strips could have been folded by means of a single guide or folder, and that the use of such guides was known and open to the public long before 1877, and that such guides were not embraced in the complainant's patent.
2. That the amount of profits found by the master was erroneous, because it appeared that folded strips, such as those used by the defendants, were an article of merchandise, cut and folded by different parties at a charge of 25 cents for 144 yards.
3. That the profits should not have been found greater than the saving made by the use of the double guide as compared with the use of a single guide, or greater than the amount for which the strips could have been cut and folded by persons doing such business.
4. That the damages found were erroneous.
Other exceptions were subsequently filed, but were overruled for being filed out of time.
Before the argument of the exceptions, the defendants gave notice of a motion to the court to refer the cause back to the master to take further testimony in reference to the question of profits and damages chargeable against them under the order of reference. In support of this motion, further affidavits were presented.
The exceptions to the report and the application to refer the cause back to the master were argued together. The court denied the motion to refer the cause back, overruled the exceptions to the report, and made a decree in favor of the complainant for the profits, but disallowed the damages. That decree is now brought here by appeal.
The appellants have assigned fourteen reasons or grounds for reversing the decree. The first nine relate to the taking of the account before the master and his report thereon; the last five relate to the validity of the letters patent on which the suit was brought. It will be convenient to consider the last reasons first.
account to the complainant for the profits made by them by such infringement and for the damages he had sustained thereby, and it was referred to a master to take and state an account of such profits and to ascertain said damages.
The defendants are concluded by that decree, so far at least as it is supported by the allegations of the bill, taking the same to be true. Being carefully based on these allegations and not extending beyond them, it cannot now be questioned by the defendants unless it is shown to be erroneous by other statements contained in the bill itself. A confession of facts properly pleaded dispenses with proof of those facts, and is as effective for the purposes of the suit as if the facts were proved, and a decree pro confesso regards the statements of the bill as confessed.
"Where a man appears by his clerk in court, and after lies in prison, and is brought up three times to court by habeas corpus, and has the bill read to him, and refuses to answer, such public refusal in court does amount to the confession of the whole bill. Secondly. When a person appears and departs without answering, and the whole process of the court has been awarded against him after his appearance and departure, to the sequestration, there also the bill is taken pro confesso because it is presumed to be true when he has appeared, and departs in despite of the court, and withstands all its process without answering."
"the method in equity of taking a bill pro confesso is consonant to the rule and practice of the courts at law, where, if the defendant makes default by nil dicit, judgment is immediately given in debt, or in all cases where the thing demanded is certain; but where the matter sued for consists in damages, a judgment interlocutory is given, after which a writ of inquiry goes to ascertain the damages, and then the judgment follows."
The strict analogy of this proceeding in actions of law to a general decree pro confesso in equity in favor of the complainant, with a reference to a master to take a necessary account, or to assess unliquidated damages, is obvious and striking.
"where the allegations of a bill are indefinite, or the demand of the complainant is in its nature uncertain, the certainty requisite to a proper decree must be afforded by proofs. The bill, when confessed by the default of the defendant, is taken to be true in all matters alleged with sufficient certainty, but in respect to matters not alleged with due certainty or subjects which from their nature and the course of the court require an examination of details, the obligation to furnish proofs rests on the complainant."
to set it aside for fraud." 1 Daniell, Ch.Pr. 696, 1st ed. *; Ogilvie v. Herne, 13 Ves. 563.
Such being the general nature and effect of an order taking a bill pro confesso and of a decree pro confesso regularly made thereon, we are prepared to understand the full force of our rules of practice on the subject. Those rules, of course, are to govern so far as they apply, but the effect and meaning of the terms which they employ are necessarily to be sought in the books of authority to which we have referred.
"at the bottom of the subpoena shall be placed a memorandum that the defendant is to enter his appearance in the suit in the clerk's office on or before the day at which the writ is returnable, otherwise the bill may be taken pro confesso."
his appearance, and in default thereof, the plaintiff may, at his election, enter an order as of course in the order book that the bill be taken pro confesso, and thereupon the cause shall be proceeded in ex parte, and the matter of the bill may be decreed by the court at any time after the expiration of thirty days from the entry of said order, if the same can be done without an answer, and is proper to be decreed, or the plaintiff, if he requires any discovery or answer to enable him to obtain a proper decree, shall be entitled to process of attachment against the defendant to compel an answer, etc. And the 19th Rule declares that the decree rendered upon a bill taken pro confesso shall be deemed absolute unless the court shall at the same term set aside the same or enlarge the time for filing the answer upon cause shown upon motion and affidavit of the defendant.
"Where the bill is thus taken pro confesso and the cause is set down for hearing, the course (says Lord Eldon in Geary v Sheridan, 8 Ves. 192) is for the court to hear the pleadings and itself to pronounce the decree, and not to permit the plaintiff to take at his own discretion, such a decree as he could abide by, as in the case of default by the defendant at the hearing."
the decree is applied for, so that the court may see that the decree is a proper one. The binding character of the decree, as declared in Rule 19, renders it proper that this degree of precaution should be taken.
We have been more particular in examining this subject because of the attempt made by the defendants on this appeal to overthrow the decree by matters outside of the bill, which was regularly taken pro confesso. From the authorities cited and the express language of our own rules in equity, it seems clear that the defendants, after the entry of the decree pro confesso and while it stood unrevoked, were absolutely barred and precluded from alleging anything in derogation of or in opposition to the said decree, and that they are equally barred and precluded from questioning its correctness here on appeal unless on the face of the bill it appears manifest that it was erroneous and improperly granted. The attempt on the hearing before the master to show that the reissued patent was for a different invention from that described in the original patent or to show that there was such unreasonable delay in applying for it as to render it void under the recent decisions of this Court was entirely inadmissible because repugnant to the decree. The defendants could not be allowed to question the validity of the patent which the decree had declared valid. The fact that the reissue was applied for and granted fourteen years after the date of the original patent would undoubtedly, had the cause been defended and the validity of the reissued patent been controverted, been strongly presumptive of unreasonable delay; but it might possibly have been explained, and the court could not say as matter of law, and certainly, under the decree of the court, the master could not say, that it was insusceptible of explanation. And on this appeal it is surely irregular to question the allegations of the bill. If anything appears in these allegations themselves going to show that the decree was erroneous, of course, it is assignable for error; but any attempt to introduce facts not embraced in those allegations for the purpose of countervailing the decree is manifestly improper. The introduction of the original patent, pending the appeal, was clearly irregular.
"10th. For that, on the face of the bill and the patent, the reissued patent in suit was illegally granted, and therefore void, and the court should have so held, and this Court is now asked to so hold, because the bill avers that during the fourteen years of the original term of the patent, the validity of said letters patent was established in numerous suits in the circuit courts of the United States, and that all persons sued took licenses and paid therefor, as well as many others not sued, thereby averring in substance that the original letters patent were valid and operative;"
"Wherefore appellants ask this court to hold that the original letters patent, having been valid and operative, as averred by complainant, for over fourteen years, no reissue thereafter could be legally obtained, because invalidity or inoperativeness are conditions precedent to the grant of a reissue."
The answer to this assignment is obvious. The suits brought on the original patent may have been for infringements committed against particular parts of the invention, or modes of using it and putting it into operation, as to which the specification was clear, full, and sufficient, while at the same time there may have been certain other parts of the invention or modes of using it and putting it into operation as to which the specification was defective or insufficient, and which were not noticed until the application for reissue was made, or, in the original patent, the patentee may have claimed as his own invention more than he had a right to claim as new -- a mistake which might be corrected at any time. At all events, the court cannot say as mere matter of law that this might not have been the case.
We think that the objection to the decree going to the validity of the patent and the whole cause of action cannot be sustained.
First. That the master allowed the complainant all the profits made by the defendants by the use of the patented machine in folding cloths and strips as compared with doing the same thing by hand, whereas he should only have allowed the profits of using the complainant's patented machine as compared with a single folder, which the defendants allege was open to the public before their infringement commenced.
Secondly. That the master, in allowing profits, took no account of the fact that folded strips, such as those used by the defendants, were an article of merchandise, cut and folded by different parties at a charge of only 25 cents for 144 yards, or about one-sixth of a cent per yard, whereas the defendants were charged with a profit of one half of a cent per yard.
either on one or both edges."
The complainant also testified that there was no other way known to him (and he testified that he had large experience on the subject) to do work like that done by the defendants except by hand, or in the use of another patent owned by him, namely, the Robjohn patent, dated April 19, 1864 (which was produced in evidence), which consisted of a folding guide, folding one edge in combination with a device for pressing said fold to an edge, and then passing said folded strip through a narrower folder, folding the other edge, and pressing said fold by a pressing device. No evidence was adduced by the defendants to contradict this testimony.
It is proper to remark here that the affidavits presented to the master and those afterwards presented to the court as grounds of the respective applications to reopen the proofs cannot be looked into on this hearing. They form no part of the evidence taken before the master on the reference, and no error is assigned (even if error could be assigned) to the refusal of the court to refer the case back to the master for the purpose of taking further testimony.
defendants. There is something singular about this part of the case. If folded strips, suitable for the defendants' purpose, could have been procured in the market by them at such a low price as is pretended, why did they not procure them in that way after being enjoined against using the complainant's machine, instead of making them by the disadvantageous method of using a single folder and folding one edge at a time? Was it from a knowledge of the fact that the persons who folded such strips were infringing the complainant's patent, and a consequent unwillingness to become further complicated in such infringements? At all events, since the defendants chose to make their own folded strips in their own factory, instead of going outside to purchase them or have them made by others, they cannot justly complain of being accountable for the profits realized in using the complainant's machine for that purpose. It might have been a better financial operation to have bought of others or employed others to make the folded strips which they required, just as, in the case of the Cawood Patent, the railroad company would have done better not to have mended the ends of their battered rails, but to have had them cut off; but as they chose to perform the operation, they became responsible to the patentee for the advantage derived from using his machine. Cawood Patent, 94 U. S. 710. We do not think that the objection is well taken.
It follows that all the reasons of appeal must be overruled.
does not convince us that a further inquiry should have been ordered.
In thus considering the case on its merits, as presented by the evidence taken before the master, his report thereon, and the exceptions to such report we have deemed it unnecessary to make any remarks as to the status of a defendant before a master on a reference under a decree pro confesso. Both parties in this case seem to have taken for granted that the rights of the defendants were the same as if the decree had been made upon answer and proofs. In the English practice, it is true, as it existed at the time of the adoption of our present rules (in 1842), the defendant, after a decree pro confesso and a reference for an account, was entitled to appear before the master and to have notice of and take part in the proceedings, provided he obtained and order of the court for that purpose, which would be granted on terms. 2 Daniell Ch.Pr. 804, 1st. ed.; ditto, 1358, 2d ed. by Perkins; Heyn v. Heyn, Jacob 49. The former practice in the Court of Chancery of New York was substantially the same. 1 Hoffman Ch.Pr. 520; 1 Barb.Ch.Pr. 479. In New Jersey, except in plain cases of decree for foreclosure of a mortgage (where no reference is required), the matter is left to the discretion of the court. Sometimes notice is ordered to be given to the defendant to attend before the master, and sometimes not, as it is also in the chancellor's discretion to order a bill to be taken pro confesso for a default or to order the complainant to take proofs to sustain the allegations of the bill. Nixon Dig., Art. Chancery, § 21; Gen.Orders in Chancery XIV., 3-7; Brundage v. Goodfellow, 4 Halst.Ch. 513.
and that the matter thereof should be decreed accordingly, the decree to be absolute unless cause should be shown at the next term. See Equity Rules VI and X of 1882, 7 Wheat. vii., and Rendleton v. Evans, 4 Wash.C.C. 336; O'Hara v. MacConnell, 93 U. S. 150. Under these rules, the English practice was left to govern the subsequent course of proceeding, by which, as we have seen, the defendant might have an order to permit him to appear before the master and be entitled to notice. Whether under the present rules a different practice was intended to be introduced is a question which it is not necessary to decide in this case.
* Reference is made to the first edition of Daniell (published 1837) as being, with the second edition of Smith's Practice (published the same year), the most authoritative work on English Chancery Practice in use in March, 1842, when our equity rules were adopted. Supplemented by the general orders made by Lords Cottenham and Langdale in August, 1841 (many of which were closely copied in our own rules), they exhibit that "present practice of the High Court of Chancery in England," which, by our 90th rule, was adopted as the standard of equity practice in cases where the rules prescribed by this Court or by the circuit court do not apply. The second edition of Mr. Daniell's work, published by Mr. Headlam in 1846, was much modified by the extensive changes introduced by the English orders of May 8, 1845, and the third edition by the still more radical changes introduced by the orders of April, 1850, the Statute of 15 & 16 Vict., c. 86, and the general orders afterwards made under the authority of that statute. Of course, the subsequent editions of Daniell are still further removed from the standard adopted by this Court in 1842, but as they contain a view of the later decisions bearing upon so much of the old system as remains, they have on that account a value of their own, provided one is not misled by the new portions.

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