WRIGHT t1. THOMAS.
'717
by virtue of judgments obtained against them. A demurrer was interposed to the bill, which was sustained, and the bill dismissed, from which decree the plaiIitiffs took an appeal to this court. The principal facts alleged in the bill, and upon which the controversy must turn, are these: E. Nutting & Co., on the twentieth day of July, 1875, being in straightened circumstances, conveyed all thei! property to certain persons in trust for the benefit of all their creditors equally. This conveyance was made under the act of the general assembly of this state, which provided for the voluntary assignment of personal and real property in trust for the benefit of creditors, and regulated the mode of administering the same. The grantees in this deed accepted the trust, and, submitting the matter to the Marion civil circuit court, assumed the execution of the trust under the order and jurisdiction of that court. This deed of trust was duly recorded in the several counties in which the property assigned was situated. After this took place, and before the commencement of proceedings in bankruptcy, various creditors of E. Nutting & Co. instituted suits and recovered judgments against them in several courts, which judgments, if the deed of trust before referred to is invalid, became a lien on the real property of the bankrupts. In January, 1876, E. Nutting & Co. were adjudicated bankrupts by the district court of the United States for this district, and the plaintiffs became, by virtue of the proper proceedings in bankruptcy, the assignees of the bankrupts, and by operation ot law became vested with all the property of the bankrupts. After this action of the district court the Marion civil circuit court made an order directing the trustees in the deed of trust before mentioned to convey all the property of the bankrupts to the assignees in bankruptcy, who, this being done, took possession of the property, and ever since have held the same. Among other suits that have been commenced in the circuit court of the state was one by some of the judgment creditors to set aside the deed of trust on the ground that it was fraudulent and void under the law of the state; and the bill
718
FEDERAL REPORTER.
now under consideration alleges that it is claimed on the part of the creditors that the deed of trust of the twentieth of July, 1875, is fraudulent and void ,°01' various reasonsFirst, because the bankrupts did not make the oath that the indentures and schedules required by the law contained a statement of all the property belonging to them, and because they did not make oath to other facts named in the statute; second, because the trustees, before entering upon their trust, did not make oath that they would faithfully execute the same, together with other things named in the statute; third, because the bankrupts reserved in the deed of trust the right to instructthe trustees as to their duties; fonrth, because they reserved the right, with the consent of two-thirds in ,:alue of their creditors, to remove one or all of the trustees; fifth, because they authorized the trustee to sell the property on credit, or in any other manner that might seem for the best interests of all the creditors. The general question in the case is whether the assignmentmade by the bankrupts in trust for the benefit of all their creditors was valid, or whether, on account of any or all the reasons named in the bill or presented in the argument on the demurrer by the defendants, it is fraudulent and void. Independent of the bankrupt law of the United States, there can be no doubt that it was competent for the bankrupts to make such an assignment as that named in the bill. Being insolvent, it was .the most equitable distribution that could be made of their property to divide it equally among all their creditors. Then, unless the assignment was rendered invalid by virtue of the bankrupt law of the United States or of the provisions of the state law already referred to, it must be considered a valid assignment. If it was inoperative, by virtue of the bankrupt law, then the property, being all in the possession of the assignees in bankruptcy, the object of the bankrupt law is accomplished, and it is ready for distribution to the creditors of the bankrupts according to the terms of that law; and so there coula be no objection to the bill on the ground that the assignment was invalid under the operation of a bankrupt law.
WRIGHT V. THOMAS.
719
We proceed to consider whether it was invalid under the law of the state. Unless there was something in the law of the state which declared either expressly or by necessary implication that the assignment was invalid, then it must stand. The law of the state is "that any debtor or debtors in embarrassed or failing circumstances may make a general assignment of all his or their property in trust for all his or their bona· fide creditors." What is the meaning of the words "make a. general assignment?" The second section of the act declares the assignment must be made by indenture, duly signed and acknowledged before some person duly authorized to take the acknowledgment of deeds. "The indenture of assignment shall contain a full description of all the real estate assigned." This is all the language there is in the statute as to making the assignment which the first section says the failing debtor may do. These are undoubtedly essential elements in the making of the assignment: It must be by deed; it must be duly signed and acknowledged before some person duly authorized to take the acknowledgment; and if there is real estate to convey, then it must be described. That being so, we are prepared to consider the effect of the last clause of the first section of the statute, which is: "All assignments hereafter made by such person or persons for such purposes, except as provided for in this act, shall be deemed fraudulent and void." This simply refers to the making of the assignment. It does not declare that if some things are not done which are afterwards required to be done, by the assignor or by the trustee in the deed of assignment, that it shall be fraudulent and For example, the second section of the act provides that within 10 days after the execution of the deed of assignment it shall be filed with the recorder of the county in which the, assignor resides, whose duty it shall be to record the same. And it is then declared that until the assignment is recorded it shall not convey any interest in the property so assigned. Now, here is an unmistakable condition precedent to the assignment taking effect. It is not so in relation to many other matters which are required to be done. In the same
720
section it is declared , that the assignor shall make oath, befor6 some person authorized to administer oaths, in relation to some facts, and that the assignment shall be accompanied with a schedule containing a particular description of the personal property assigned. The making of the oath and the schedule of the personal property thus required are clearly no part of the assignment itself. They do not constitute any part of the making of the assignment. It is true that the statute declares that the schedule shall accompany the assignment, but the supreme court of this state has held that it constitutes no part of the assignment. Black v. Weathers, 26 Ind. 242. And, if the schedule is no part of the assignment, it is difficult to understand how the oath which is to be taken is flo part of the assignment, especially when the statute requires that the schedule shall accompany the assignment, and makes no such requisition in direct terms as to the oath. It seems to me that the true meaning of the last clause of the first section of the statute is that it is to be confined, when it declares that all assignments made, except as provided for in the act, shall be deemed fraudulent and void, to that which by the terms of the act constitutes the making of the assignment, or indenture, as the statute calls it. There are other sections which require certain things to be done by the person to whom the property has been assigned, and who holds it in trust for the benefit of all the creditors. It seems clear that an omission on the part of the trustee to perform his duty in respect to any act required of him by the statute cannot render the assignment itself fraudulent and that if the trustee fails void, because the legislature to comply with the provisions of certain portions of the law other disposition shall be made of the property by the appointment of a more competent and faithful trustee. There does not Beem to be any other clause in the law, except that which is contained in the latter part of the first section, which declares under what circumstances the assignment shall be fuudulent and void. Undoubtedly it was competent for the legislature to provide, if in any respect where a demand was made by the law !twas not complied with, that the assign-
72J.
ment should thereby become inoperative a.nd void. It has not seen fit so to declare, and I do not think that in the absence of such a declaration this court can declare that it is fraudulent and void, unless the assignment is not made in the way required by the statute. Some language used in the opinion of the cQurt in the case already referred to is significant: "The intent of the act is to secure an equitable distribution of a debtor's estate, and to prevent one creditor from obtaining undue advantage over others. When, therefore, the instrument upon its face conforms to the requirements of the act, and a substantial compliance has also been made by the trustee, this court should not, by technical construction of the language of the law, defeat the evident legislative purpose." There is nothing in the case of Brown v. Foster, 2 Met. 152; Hardeman v. Brown, 39 N. Y. 196, or of Britton v. Lorenz, 45 N. Y. 51, inconsistent with this view. Some of the objections which are made to the deed of trust, as, for example, It certain right reserved by the assignor to give instructions to the trustee, and sell the property on credit, do not, I think; in a case like this, constitute badges of fraud per se, so as to render the assignment void; but, as the statute entrusts a court with the administration by the trustee of the estate, and it is entirely under its direction, undoubtedly the court would have power over any such provisions as these in the deed of assignment, so as to prevent them from operating to the prejudice of any of the creditors. The main controversy, as it seems to me, must depend upon this: Whether or not the assignors had, in good faith, assigned all their property, real and personal, for the benefit of all their creditors. That was the kind of assignment that the statute declared should be made, and that was the kind of assignment which the second clause of the first section declared, if not made, was fraudulent and void. The result is that the decree of the district court, sustain. ing the demurrer and dismissing the bill, must be reversed. v.l.no.9-·4:6
729 McMILLAN (Oircuit Oourt,
and others v.
BEES
and others.
w: D. Pen1UJlI&fJania.
March 22, 1880.)
Two PATENTS FOR SAME INVENTION. - Of two patents for the samd invention the one last granted is void, although it may have been first applied for. SAME - How IDENTITY OF INVENTION IS DETERMINED. - Whether two patents cover the same invention must be determined by the tenor and Bcope of their claims, not by the description in the specifications. SEPARATE PA:rENTS FOR SEVERABLE PARTS OF SAME INVENTION.-Separate patents for severable parts of the same invention may be pat. ented, although the whole invention is fully described in each of them, to explain the purpose and mode of operation of the parts covered by the claims in such patents. COMBINATION OF PATENTED DEVICE WITH OTHER DEVICES. - The connection or combination of a patented device or improvement with other devices may be the subject of a valid subsequent patent.
In Equity. Bakewell J: Kerr, for complainants. Rowland Cox, for respondents. McKENNAN, J. In McMillan v. Barclay the patent upon
which the present bill is founded was contested upon various grounds, all of which were fully considered by the court, and a decree was rendered in favor of the complainant. No question is now made touching any of the specific defences set up in that case, but the patent is assailed for a reason not before suggested. It is urged that the patent, No. 63,917, set up in this case, is a duplicate of patent 52,730, granted to the same persons and for the same invention. On the twenty-third of July, 1855, the patent involved i;n this case was applied for, and was disallowed by the commissioner of patents on the twenty-fifth of August, 1866. After repeated efforts to obtain a rehearing, in the early part of 1867, the applicant amended his specification, and again pressed his application for consideration. This amendment consisted in a modification of the claim, the body of the specification and the drawings remaining unchanged. A re-examination was finally made, and a patent granted on the sixteenth of April, 1867. This patent is for "an improved application of steam power to the capstans of
U'l\lILLAN V. REES.
723
vessels," and the claim is for "rotating a capstan placed on deck of a boat by means of an auxiliary engine, when said engine and capstan are placed forward of the steam boilers of said boat, substantially as herein before described, and for the purposes set forth." Without having amended the application for this patent, the complainant McMillan, on the twenty-fifth of April, 1865, filed an application for a patent for a "mode for working a capstan by steam," which was allowed and issued February 20, 1866, numbered 52,730. The claim in this patent is for "the arrangement of the wheell, rn, n, 0, k, j, i, h, e, and ai shafts 6, 5, 4, 3 and B; capstan barrel p; heads q and r, and pins Q; the whole being constructed, arranged and operated substantially as herein before described, and for the purpose set forth." Are these patents, then, for the same in vention? 1. In McMillan v. Barclay, 5 Fisher, 189, the import of the claim of the patent of 1867 was held to be "operating the capstan of a steamboat by certain mechanical means, actuated by steam derived from an auxiliary engine, where both the engine and the capstan are stationed on the deck of the boat forward of the steam boilers. The mere effect indicated is not claimed, for that would be clearly unallowable, but it is this effect produced by means substantially as described and employed under the conditions stated." In other words, it is for a metlwd of producing a useful result to bf. practiced by the use of mechanism described in the specifica.tion, under conditions therein prescribed. 2. The claim of the patent of 1866 is for an arrangement or combination of specific devices, which embraces only some of the devices described in the patent of 1867, and adds others which are not th.erein described. The specification contemplates the use of this combination in practicing the method described in the patent of 1867, and it is treated and described throughout as an improvement in the arrangement and combination of the mechanical appliances by which that method is to be effectnated by securing new and better re-
