plied to stock transactions has been adopted in England and in several of the States in this country; whilst in some others it has not obtained. The form and extent of the rule have been the subject of much discussion and conflict of opinion. The cases will be found collected in Sedgwick on the Measure of Damages [479], Vol. 2, 7th ed. p. 379, note (b); Mayne, Damages, 83 (92 Law Lib.); 1 Sm. Lead. Cas. 7th Am. ed. 367. The English cases usually referred to are Cud v. Rutter, 1 P. Wms. 572, 4th ed. note (3); Owen v. Routh, 14 C. B. 327; Loder v. Kekulé, 3 C. B. N. S. 128; France v. Gaudet, L. R. 6 Q. B. 199. It is laid down in these cases that where there has been a loan of stock and a breach of the agreement to replace it, the measure of damages will be the value of the stock at its highest price on or before the day of trial.

The same rule was approved by the Supreme Court of Pennsylvania in Bank of Montgomery v. Reese, 2 Casey (26 Pa.) 143, and Musgrave v. Beckendorff, 3 P. F. Smith (53 Pa.) 310. But it has been restricted in that State to cases in

which a trust relation exists between the parties -a relation which would probably be deemed to exist between a stock broker and his client. See Wilson v. Whitaker, 13 Wright (49 Pa.) 114; Huntingdon & B. T. R. & Coal Co. v. English, 86 Pa. 247.

(See S. C. Reporter's ed. 202-206.)

Patent law-right to use machine constructed bo
fore patent granted.

1. After a machine has been constructed by any
person, with the inventor's knowledge and consent,
before the application for a patent, every other
person who either sells or uses that machine is
within the protection of section 4899 of the Revised
Statutes, and needs no new consent or permission
of the inventor.

2. That section sets the specific machine, so constructed, free from the monopoly of the patent in the hands of any person who sells or uses it just as ing the machine under a purchase or an express if that person was the lawful assignee of one holdand unrestricted license from the inventor.

Rhode Island, and William McCleery, a citizen
of Massachusetts, alleging that letters patent,
numbered 228,233, granted to the plaintiff
June 1, 1880, upon his application filed July
26, 1879, for improvements in machines for
making buttons, had been infringed by the de-
fendants' use of forty-eight machines embody-
ing such improvements. At the hearing upon
pleadings and proofs, the case, so far as it is
material to be stated, appeared to be as follows:

Perhaps more transactions of this kind arise Statement by Mr. Justice Gray: in the State of New York than in all other parts This was a bill in equity, filed December 4, of the country. The rule of highest interme- 1880, by William W. Wade, a citizen of Massadiate value up to the time of trial formerly pre-chusetts, against Heury B. Metcalf, a citizen of vailed in that State, and may be found laid down in Romaine v. Van Allen, 26 N. Y. 309, and Markham v. Jaudon, 41 N. Y. 235, and other cases, -although the rigid application of the rule was deprecated by the New York Superior Court in an able opinion by Judge Duer, in Suydam v. Jenkins, 3 Sandf. 614. The hardship which arose from estimating the damages by the highest price up to the time of trial, which might be years after the transaction occurred, was often so great that the Court of Appeals of The parties to this suit, owning earlier paNew York was constrained to introduce a ma- tents for improvements in buttons, were in partterial modification in the form of the rule, and nership in the business of making and selling to hold the true and just measure of damages buttons, under the name of the Boston Button in these cases to be the highest intermediate Company, from January, 1875, until the dissovalue of the stock between the time of its con-lution of the partnership in October, 1880. By version and a reasonable time after the owner has received notice of it to enable him to replace the stock. This modification of the rule was very ably enforced in an opinion of the court of appeals delivered by Judge Rapallo, in the case of Baker v. Drake, 53 N. Y. 211, which was subsequently followed in the same case in 66 N. Y. 518, and in Gruman v. Smith, 81 N. Y. 25; Colt v. Owens, 90 N. Y. 368, and Wright v. Bank of Metropolis. 110 N. Y. 237 [13 Cent. Rep. 415].

It would be a herculean task to review all the various and conflicting opinions that have been delivered on this subject. On the whole it seems to us that the New York rule, as finally settled by the court of appeals, has the most reasons in its favor, and we adopt it as a correct view of the law.

The judgment is reversed, and the cause remanded to the Supreme Court of Utah, with instructions to enter judgment in conformity with this opinion.

the copartnership agreement, certain salaries
were to be paid to the plaintiff for improving
and developing the machinery, to the defendant
Metcalf for assistance in financial matters, and
to the defendant McCleery for general superin-
tendence; and the profits of the business were to
belong one half to Metcalf and one fourth each
to the plaintiff and McCleery. The forty-eight
machines, with the improvements in question,
were constructed by the partnership, with the
knowledge and consent of the plaintiff, before
the application for the patent sued on, and
were used by the partnership during its con-
tinuance, and by the defendants after its disso-
lution. The partnership was dissolved October
30, 1880, by an agreement in writing executed
by the three partners, the terms of which were as
follows:

"First. It is agreed that the firm composed
of said Metcalf, McCleery and Wade, and do-
ing business under the style of the Boston
Button Company, shall be this day dissolved.

[202]

[203]

[204]

Section 4899, R. S., only gives protection to the person who purchases the machine from the inventor, or who constructs it with his knowledge and consent prior to his application for a patent.

"Second. The said William W. Wade, in con- | 419; Burr v. De la Vergne, 102 N. Y. 415, 3 sideration of the payment to him of the sum of Cent. Rep. 423. twelve thousand dollars by the said Metcalf and McCleery, receipt of which is hereby acknowledged, hereby sells and conveys to the said Metcalf and McCleery all his interest in the property and assets of every name and nature of said firm of the Boston Button Company, together with the good will of the same, with authority to use his name if necessary in the premises, saving him harmless from all costs in the same.

That the protection given to the person under this section is that of an implied license, seems to be clearly established.

Kendall v. Windsor, 62 U. S. 21 How. 322 (16: 165); Bloomer v. Millinger, 68 U. S. 1 Wall. 340 (17:581); Black v. Hubbard, 3 Bann. & Ard. 39; Am. Tube Works v. Bridgewater Iron Co. 26 Fed. Rep. 334; Chabot v. Am. Buttonhole & O. Co. 6 Fish. Pat. Cas. 71; Herman v. Herman, 29 Fed. Rep. 92.

Rights to use and to vend are the only rights given by the statute, or that can be properly inferred from the acts of the parties.

When, as in this case, the patent is for a machine the implied license is only to use and vend the specific machines.

"And whereas, certain machines, forty-eight in number, with a certain improvement thereon, manufactured by said firm, have been and are now in use by said firm, and the same Metcalf and McCleery claim the right as members of said firm, by virtue of the manufacture and use by said firm of said machines with said improvements, to continue such use, and the said Wade reserves the right to deny such claim: Curran v. Craig, 22 Fed. Rep. 101; Montross "Therefore, nothing in this sale and convey-v. Mabie, 30 Fed. Rep. 237; Brooks v. Byam, 2 ance shall operate as an assent on the part of Story, 525; Consolidated Fruit Jar Co. v. Whitsaid Wade to the right to use said improve-ney, 1 Bann. & Ard. 356. ments upon said machines, or as granting any rights for such use, other than said Metcalf and McCleery now have, whatever they may be; and nothing in this reservation shall be construed to lessen or impair any rights which the said Metcalf and McCleery may have to such use. "It being further understood that each party shall have the right to manufacture and use machines under patents for improvements in buttons, one dated March 23, 1869, and numbered 88,099, and one dated April 27, 1869, and numbered 89,450; but neither party shall vend to others the right to use or manufacture under said patents without mutul consent, except as the same may be necessary in the reorganization or liquidation of their own business.

"The said Metcalf and McCleery hereby as-
sume the payment of the debts of said Boston
Button Company, and agree to indemnify and
save harmless the said Wade therefrom."

The circuit court dismissed the bill. 16 Fed.
Rep. 130. The plaintiff appealed to this court.

Mr. George F. Betts, for appellant:
Defendants failed to establish that the inven-
tion had been in public use for more than two
years before application for the patent.

The burden of proof is on the defendants to establish this defense.

Washburn & M. Mfg. Co. v. Haish, 10 Biss. 65; Adams & W. Mfg. Co. v. Rathbone, 26 Fed. Rep. 262; Birdsall v. McDonald, 1 Bann. & Ard. 165; McCormick v. Seymour, 2 Blatchf. 256; Comstock v. Sandusky Seat Co. 3 Bann. & Ard. 188.

These facts show the use not to have been public.

Elizabeth v. Nicholson Pavement Co. 97 U. S. 134 (24:1004); Jennings v. Pierce, 15 Blatchf. 42; Sinclair v. Backus, 5 Bann. & Ard. 81; Sprague v. Smith & G. Mfg. Co. 12 Fed. Rep. 721.

The defendants must show that the use was of the combined improvements as patented. Draper v. Wattles, 3 Bann. & Ard. 621; Graham v. McCormick, 10 Biss. 42.

Any claim of the defendants to any interest in
the patent would be untenable.

Hapgood v. Hewitt, 119 U. S. 227 (30: 370);
Mc Williams Mfg. Co. v. Blundell, 11 Fed. Rep.

Keller v. Stolzenbach, 20 Fed. Rep. 49; Brickill v. N. Y. 7 Fed. Rep. 479; Magoun v. N. E. Glass Co. 3 Bann. & Ard. 114; Wilkens v. Spafford, Id. 274.

The defendants, being only two out of three members of the firm, cannot claim the right to continue to use this partnership property as their own, after the dissolution of the firm.

Lindley, Partn. 554, 587; 1 Schouler, Pers. Prop. SS 189, 193; Bell v. Morrison, 26 U. S. 1 Pet. 351 (7: 174); Rogers v. Batchelor, 37 U. S. 12 Pet. 221 (9: 1063).

The mere sale of an article by the patentee does not necessarily carry with it the license to use, unless such sale is unqualified.

Porter Needle Co. v. Nat. Needle Co. 17 Fed. Rep. 536.

The use of the article purchased may be restricted or withheld to any extent that the parties to the sale may agree, and the only question is; What is the contract?

Providence Rubber Co. v. Goodyear, 76 U. S. 9 Wall. 788 (19:566); Mitchell v. Hawley, 83 U. S. 16 Wall. 544 (21: 322); Consolidated Fruit Jar Co. v. Whitney, 1 Bann. & Ard. 356; Wicke v. Kleinknecht, Id. 608; Searls v. Bouton, 20 Blatchf. 426, 429; Gibbs v. Hoefner, 22 Blatchf. 36.

Messrs. Edward W. Hutchings, and Henry Wheeler, for appellees:

The defendants have the right, under section 4899 R. S. to use the forty-eight machines with the improvements thereon.

Pennock v. Dialogue, 27 U. S. 2 Pet. 1 (7:327);
McClurg v. Kingsland, 42 U. S. 1 How. 202 (11:
102); Chabot v. Am. Buttonhole & O. Co. 6 Fish.
Pat. Cas. 71; Bloomer v. McQuewan, 55 U. S.
14 How. 539 (14:532); Mitchell v. Hawley, 83 U.
S. 16 Wall. 544 (21:322); Duffy v. Reynolds, 24
Fed. Rep. 855; Keller v. Stolzenbach, 20 Fed.
Rep. 47; Wade v. Metcalf, 18 Fed. Rep. 131;
Montross v. Mabie, 30 Fed. Rep. 237; Barry v.
Crane Brothers Mfg. Co. 22 Fed. Rep. 396;
Wilkens v. Spafford, 3 Bann. & Ard. 274; Am.
Tube Works v. Bridgewater Iron Co. 26 Fed.
| Rep 334.

[205]

[206]

Mr. Justice Gray delivered the opinion of | defendants, that a sale or a license from the in-
the court:
ventor to two or more partners or tenants in
common confers upon each a right to use and
to sell the subject of the sale or license, and that
the defendants, therefore, come within the sec-
ond class of persons defined in the statute. But
it is unnecessary to determine whether that is so
or not, because if it is not, the defendants clear-
ly come within the fourth class, being persons
who use machines which have been constructed
with the knowledge and consent of the invent-
or before his application for a patent.

The decision of this case turns upon section 4899 of the Revised Statutes, by which it is enacted that "Every person who purchases of the inventor or discoverer, or with his knowledge and consent constructs any newly invented or discovered machine or other patentable article, prior to the application by the inventor or discoverer for a patent, or who sells or uses one so constructed, shall have the right to use and vend to others to be used the specific thing so made or purchased, without liability therefor."

This section clearly defines four classes of persons who shall have the right to use, and to vend to others to be used, a specific patentable machine:

First. Every person "who purchases of the inventor" the machine before his application for a patent.

Second. Every person who "with his knowledge and consent constructs" the machine before the application.

Third. Every person "who sells" a machine "so constructed," that is to say, which has been

The peculiar provisions of the agreement by
which the partnership between the plaintiff and
the defendants was dissolved did not, in
terms or in legal effect, enlarge or diminish the
rights of either party, independently of that
agreement, in the machines in question.
Decree affirmed.

JONATHAN Q. BARTON, Appt.,

v.

UNITED STATES.

(See S. C. Reporter's ed. 249-252.)

constructed with the knowledge and consent of Paymaster in navy-additional pay-Act of
the inventor by another person.

Fourth. Every person who "uses one so constructed," that is to say, constructed with the inventor's knowledge and consent by another person.

In order to entitle a person of any of these four classes to use and vend the machine, under this section, the machine must originally have been either purchased from the inventor, or else constructed with his knowledge and consent, before his application for a patent; and it may well be that a fraudulent or surreptitious purchase or construction is insufficient. Kendall v. Winsor, 62 U. S. 21 How. 322 [16:165]; Andrews v. Hovey, 124 U. S. 694, 708 [31: 557, 560].

But after a machine has been constructed by any person with the inventor's knowledge and consent before the application for a patent, every other person who either sells or uses that machine is within the the protection of the

section, and needs no new consent or permis

sion of the inventor.

1883.

1. Under the Acts of August 5, 1882, and March 3, 1883, a paymaster in the navy is not entitled to allowance for the sum which he would have received had he entered the regular navy when he entered the volunteer navy; and had he been promoted from time to time under the rule of promotion provided by sections 1880, 1458 and 1496 of the Revised Statutes and previous statutes embodied therein.

2. An officer, thus situated, while denied rank
and commissions under the statutes, has not the
have reached if his appointment in the regular
right to the pay of the several grades he might
navy is treated as having been made at the date of
his entry into the volunteer navy.

service and the additional pay which arises there-
3. The Act of 1883 deals with credit for length of
from, and not with the matter of regular salary,
and has no reference to benefits derived from pro-
motion to different grades, but is confined to the
lowest grade having graduated pay.
[No. 1184.]
Submitted Jan. 2, 1889. Decided Jan. 21, 1889.

A Claims, dismissing a petition of a pay-
master in the navy for additional pay. ˆÃƒ

PPEAL from a judgment of the Court of

The facts are stated in the opinion.

Mr. Geo. S. Boutwell for appellant.
Messrs. A. H. Garland, Atty-Gen., R. A.
Howard, Assist. Atty-Gen., and F. P.
Dewees, Assist. Atty., for the United States,
appellee.

If the first two clauses of the section, taken
by themselves, leave the matter in any doubt,firmed.
the succeeding clause, including every person
"who sells or uses one so constructed," makes
it perfectly clear that the implied license con-
ferred by the section sets the specific machine
free from the monopoly of the patent in the
hands of any person, just as if that person were
the lawful assignee of one holding the machine
under a purchase or an express and unrestrict-
ed license from the inventor. McClurg v. Kings-
land, 42 U. S. 1 How. 202 [11: 102]; Bloomer
v. McQuewan, 55 U. S. 14 How. 539, 549 [14:
532]; Bloomer v. Millinger, 68 U. S. 1 Wall. 340
[17: 581]; Adams v. Burke, 84 U. S. 17 Wall,
453 [21: 700]; Birdsell v. Shaliol, 112 U. S. 485,
487 [28: 768, 769].

In the case at bar, the machines of the plaint-
iff's invention were not purchased from him
by the defendants. But they were constructed
with his knowledge and consent by a partner-
ship, of which he and the defendants were
the members. It was strongly argued for the
129 U. S. U. S., Book 32.

Mr. Chief Justice Fuller delivered the opin-
ion of the court:

This is an appeal from a judgment of the
Court of Claims finding in favor of the United
States, and dismissing the petition of the claim-
ant, Barton.

The findings of fact and conclusion of law
were as follows:

"I. The claimant was appointed acting assistant paymaster in the volunteer navy of the United States, January 30, 1864; assistant paymaster, March 2, 1867; passed assistant paymaster, February 10, 1870; and paymaster in the regular navy, May 29, 1882. He has been

43

613

[249]

[250]

[251]

continuously in the navy from his first appoint- | and his second five years' service in the regular
ment to the present time.

"II. He has received the salary and graduated or longevity pay allowed by the Act of July 17, 1861 (12 Stat. at L. 258), and the Act of March 2, 1867, chap. 197, § 3 (14 Stat. at L. 516, now R. S. 1412), and the benefit of all laws in force during the time he has held the offices mentioned in the preceding finding, except that he has received no additional benefits under the Acts of August 5, 1882, chap. 391 (22 Stat. at L. 287), and March 3, 1883, chap. 97 (22 Stat. at L. 473).

navy commenced after the expiration of the
five years preceding, including therein the
volunteer service; and he has consequently re-
ceived all the benefits, under the Longevity
Pay Acts, of his whole service, "as if all such
service had been continuous and in the regular
navy.'

But he contends that if he had been ap-
pointed in the regular navy January 30, 1864,
he would have been promoted from time to
time earlier than he was, and that he is entitled
to pay in the several grades of service as if he
"III. If he be entitled under said last men- had received such earlier promotion. And by
tioned Acts of 1882 and 1883 to allowance for his petition he claims that the difference be-
the sums which he would have received had tween what he has received and what he would
he entered the regular navy when he entered have received if he had been commissioned as
the volunteer navy, and had he been promoted assistant paymaster January 30, 1864, when he
from time to time, under the rule of promotion entered the volunteer navy, amounts to
provided by the Revised Statutes, SS 1380,$7,672.40, made up of the differences of pay
1458, 1496, and the previous statutes embodied in the several grades if he had attained them
therein, the defendant would be indebted to as early as he believes he would if his service
him to an amount which, for reasons which had commenced in the regular navy.
appear in the opinion, we do not compute.

"Conclusion of Law.

"Upon the foregoing findings of fact the court decides, as a conclusion of law, that the claimant is not entitled to recover, and his petition must be dismissed."

The Acts of Congress of 1882 and 1883 read thus:

"And all officers of the navy shall be credited with the actual time they have served as officers or enlisted men in the regular or volunteer army or navy, or both, and shall receive all the benefits of such actual service in all respects in the same manner as if all said service had been continuous and in the regular navy; Provided, That nothing in this clause shall be so construed as to authorize any change in the dates of commissions or in the relative rank of such officers." (August 5, 1882, chap. 391, 22 Stat. at L. 287.)

And all officers of the navy shall be credited with the actual time they may have served as officers or enlisted men in the regular or volunteer army or navy, or both, and shall receive all the benefits of such actual service in all respects in the same manner as if all said service had been continuous and in the regular navy, in the lowest grade having graduated pay held by such officer since last entering the service; Provided, That nothing in this clause shall be so construed as to authorize any change in the dates of commissions or in the relative rank of such officers; Provided, further, That nothing herein contained shall be so construed as to give any additional pay to any such officer during the time of his service in the volunteer army or navy." (March 3, 1883, chap. 97, 22 Stat. at L. 473.)

Under the provisions of the Act of July 17, 1861, entitled "An Act to Provide for the Appointment of Assistant Paymasters in the Navy" (12 Stat. at L. 258), assistant paymasters were entitled to receive graduated pay. And under the provisions of section 8 of the Act of March 2, 1867 (14 Stat. at L. 516, R. S. § 412), Barton received a credit as assistant paymaster for three years and thirty-one days' service in the volunteer navy as acting assistant paymaster,

The argument is that under the Act of 1883,
which amended and superseded that of 1882,
officers so situated as Barton, while denied
rank and commissions under the statute, have
the right to the pay of the several grades they
might have reached if their appointments in
the regular navy are treated as having been
made at the date of their entry into the volun-
teer service.

the Act, which, in our opinion, deals with
We cannot concur in this interpretation of
credit for length of service and the additional
pay which arises therefrom, and not with the
to benefits derived from promotion to different
matter of regular salary, and has no reference
grades, but is confined to the lowest grade hav-
ing graduated pay.

United States v. Rockwell, 120 U. S. 60 [30:561], [252]
It was upon this view that it was held in
that the effect of the Act was to lengthen the
time of service in the lowest grade having
ices for the purpose only of increasing lon-
graduated pay by crediting all previous serv
gevity pay in that grade.

It follows that the Court of Claims was right
in its conclusion in the premises; and we need
not enter upon the consideration of what the
learned Chief Justice of that court correctly
terms "the complicated problem of promotion
which he (Barton) might have had, involving,
as it does, the promotion of many other offi
cers above and below him in rank, who would
in like manner be affected by the provisions of
the statute, and whose promotion, dependent
upon previous service not found in this case,
would materially affect his own."

The judgment appealed from is affirmed.

SARAH S. SUTTON.

(See 8. C. Reporter's ed. 288-248.)
Verbal promise to convey land—payment of con
sideration-specific performance.

in his own name but with the intention and under
Where one purchased and took the litle of land
the verbal promise to convey it to another, upon

Even a parol gift of land is protected in equity, equally with a parol agreement to sell it In a court of equity part performance of a-if accompanied by possession, and the donee, parol contract for the conveyance of lands may take the contract out of the Statute of Frauds, and render it capable of being enforced by way of specific performance.