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Charles F. Hall and Arthur W. Blakemore, for petitioner.
LOWELL, Circuit Judge. On July 14th Littlefield, the bankrupt, mortgaged real estate to Hall for $6,000, payable in five years. Note and mortgage were in the usual form. Payment of interest to July 14, 1905, was duly made and indorsed on the note, as were sundry payments of principal, the last in 1899 amounting in all to $4,800. Hall died before October 1, 1901, and on that day Littlefield borrowed from Hall's estate $3,500. The following indorsement was then made on the note:
“Boston, October 1, 1901. "I have this day borrowed of the estate of Joseph E. Hall the sum of $3500, making the amount of the principal of this note the sum of $4700.
“Warren H. Littlefield.”
On July 26, 1902, Littlefield borrowed $1,300 more, and a corresponding indorsement was made. Littlefield was adjudged bankrupt October 16, 1905, on a creditor's petition filed September 27th.
Thereafter the trustee in bankruptcy filed a petition with the referee, praying for leave to sell the real estate free from the incumbrance of the mortgage. The referee ordered a sale for not less than $7,500, which sum was to be deposited in a separate account to meet the claims of the mortgagee, Hall's administratrix. This order was affirmed by the district judge ,and the mortgagee has filed in this court an original petition to revise the order of the District Court in matter of law. This is the question presented in No. 675.
Beside these proceedings, and without prejudice thereto, the mortgagee filed a petition with the referee, asking that her lien be satisfied from the proceeds of the sale. The referee ruled that the lien of the mortgage was valid only to the extent of $1,200 and interest, but the learned district judge held it valid for $6,000 and interest, and from his decree the trustee took an appeal to this court. This is the question presented in No. 676.
The petition for revision is easily disposed of. The court of bankruptcy has jurisdiction to order a sale of the estate of the bankrupt upon which a lien is asserted, without first determining either the validity or amount of the lien. In re Union Trust Co., 122 Fed. 937, 59 C. Č. A. 461; Mason v. Wolkowich (decided by this court October 9, 1906) 150 Fed. 699; Marion E. Tucker, Petitioner (decided October 31, 1906) 153 Fed. 91. The petition for revision, therefore, must be dismissed with costs for the respondent.
We pass to the question presented by the appeal. It will be convenient to set out certain statutes of Massachusetts and certain sections of the bankrupt act which have been supposed to be material.
Rev. Laws, Mass. C. 127, § 4:
"A conveyance of an estate in fee simple, fee tail or for life, or a lease for more than seven years from the making thereof, shall not be valid as against any person, except the grantor or lessor, his heirs and devisees and persons having actual notice of it, unless it, or an office copy as provided in section fifteen of chapter twenty-two, is recorded in the registry of deeds for the county or district in which the land to which it relates is situated."
Mass. Rev. Laws, c. 163, § 37:
"A mortgage of land recorded more than four months after its date shall not be valid against an assignee of the estate of the mortgagor if proceedings in insolvency are commenced within one year from the recording of such mortgage."
Bankr. Act July 1, 1898, c. 541, § 67a, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3449]:
"Claims which for want of record or for other reasons would not have been valid liens as against the claims of the creditors of the bankrupt shall not be liens against his estate.'
Bankr. Act, $ 70a (5):
• be vest ed by operation of law with the discharge of the bankrupt *
to all (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him."
Where the trustee in bankruptcy and a transferee of the bankrupt both claim certain property which once belonged to the bankrupt, it may be difficult to decide how far the title to the property in question depends upon the state law which determines the effect of the bankrupt's conveyance, and how far upon the bankrupt act which declares what property the trustee shall take. The one law regulates the passage of title from the bankrupt, and is interpreted by the state court. The other law regulates its passage to the trustee, and is interpreted by the federal court. Concerning the questions raised in the case at bar both courts have reached the same conclusion.
That the payment made on the mortgage operated pro tanto to discharge it at law is not disputed. No oral agreement, and, indeed, nothing but a deed duly executed, could thereafter make the mortgage valid in a court of law as security for a sum larger than the balance left due upon it. But in Upton v. National Bank of South Reading, 120 Mass. 153, where the mortgagor and mortgagee had attempted by oral agreement to increase the amount for which a mortgage of real estate stood as security after it had been partly paid, the Supreme Court of Massachusetts, sitting in equity, refused to allow an assignee in bankruptcy under the act of 1867 to redeem the property, except upon payment of the money secured by the oral agreement. If the rights of the trustee in bankruptcy here depend upon the statutes of Massachusetts governing the title to real estate, there is no material difference between the Upton case and the case at bar. It is true that the trustee's proceeding here is not in the form of a bill to redeem, but a court of bankruptcy is a court of equity, and the form of proceeding in unimportant. It is true, also, that the registry statute of Massachusetts was not cited in the Upton case, but it was then in existence, and, if the state court deemed it material, doubtless it would have been noticed. We mention St. 1888, p. 402, c. 393, passed after the decision in the Upton case and embodied in Rev. Laws Mass. c. 163, § 37, only to show that we have not overlooked it. Although the rights of a trustee in bankruptcy and those of an assignee in insolvency under the statutes of Massachusetts are defined in similar language, yet a statute making a certain transfer void as against the latter eo nomine does not make it void as against the former.
The bankrupt act of 1898, it is true, defines the rights in property which pass to the trustee in language different from that used in the act of 1867 to define the rights which passed thereunder to an assignee in bankruptcy. In this respect, as has been said, there is much similarity between the bankrupt act of 1898 and the insolvent law of Massachusetts. Section 70a (5) of the bankrupt act vests in the trustee property which the bankrupt "could by any means have transferred or which might have been levied upon or sold under judicial process. Pub. St. c. 157, § 46, vested in the assignee in insolvency the property of the debtor "which he could have lawfully sold, assigned or conveyed, or which might have been taken on execution upon a judgment against him.” See Rev. Laws, c. 163, § 54. In Smythe v. Sprague, 149 Mass. 310, 21 N. E. 383, 3 L. R. A. 822, the Supreme Court of Massachusetts held that land conveyed by a deed unrecorded until after the assignment in insolvency did not pass to the assignee. It follows that the state statutes before us, as construed by the courts of Massachusetts, allow an unrecorded deed to pass to the grantee thereunder a title valid as against a trustee in bankruptcy appointed under the existing federal law. The Supreme Court of Massachusetts has in effect construed the statutes before us in favor of the appellee in this case.
The Supreme Court of the United States has reached the same conclusion in its interpretation of the present bankrupt act. eral principles of equity, as recognized in the federal courts, give effect to the intention of parties who intend to create a lien under the circumstances of this case, notwithstanding that their agreement by reason of its informality is invalid at law. In York Mfg. Co. v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782, the Supreme Court had to deal with an unrecorded conveyance in a state whose statutes required a record, and the title of the transferee was held to be superior to that of the trustee in bankruptcy. The statute there in question, as construed by the state court, made an unrecorded mortgage void as against certain classes of creditors, while leaving it valid as against other class
The state statute before us makes the unrecorded conveyance void as against creditors without notice, leaving it valid as against. those creditors who have notice of it.
To whatever extent the title of the trustee in bankruptcy to the property here in question depends, either upon the statute of Massachusetts as interpreted by the state courts, or upon the bankrupt act as interpreted by the Supreme Court, or upon both, we find that all the statutes in question have been construed by the courts which have ultimate authority to fix their meaning as giving to the mortgagee in the case at bar a lien superior to the rights of the trustee in bankruptcy.
In No. 675, Loveland, Petitioner, let there be a decree that the petition be dismissed, with costs for the respondent.
In No. 676, Putnam v. Loveland, the decree of the District Court is affirmed, and the appellee recovers costs in this court.
UNITED SHOE MACHINERY CO. V. DUPLESSIS SHOE
1. PATENTS-TERM-EXPIRATION OF FOREIGN PATENT.
The claim that a British patent covering an invention also patented in the United States was taken out by an intermeddler, and was unauthorized, and therefore that its expiration did not affect the term of the American patent, cannot be sustained, where the American patentees authorized the taking out of a patent in England, and under the other circumstances named in the opinion, did not repudiate the one in fact obtained until aft
er its expiration. 2. TREATIES-CONSTRUCTION AND EFFECT-RELATION TO STATUTES.
Treaties and statutes of the United States have always been practically put in the same class, so far as judicial action is concerned, to the extent that a later treaty has the same effect on a prior statute that a later statute has, and may supersede it as a later statute may supersede a prior treaty. Nor is there any practical distinction as between a statute and a treaty with regard to its becoming presently effective without awaiting
further legislation which depends entirely upon its terms. 3. STATUTES-CONSTRUCTION-RESORT TO TITLE.
When a legislative act is general in its terms, the title may be resorted to for the purpose of ascertaining its proper limitations.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 44, Statutes, 8 288.) 4. PATENTS-TERM-EFFECT OF TREATY.
Article 4 bis, inserted in the international convention for the protection of industrial property of March 20, 1883, by the additional convention or act of December 14, 1900, proclaimed by the President August 25, 1902 (32 Stat. 1936, 1939), as controlled and construed by Act March 3, 1903, c. 1019, 32 Stat. 1225 [U. S. Comp. St. Supp. 1905, p. 663], "to effectuate the provisions" of such additional act of convention, did not have the effect of changing the term of an existing United States patent as fixed by statute at the time of its issuance; and such a patent granted prior to January 1, 1898, and which is limited by the provisions of Rev. St. § 4887 [U. S. Comp. St. 1901, p. 3382], to the term of a prior foreign pat
ent, is not extended by such additional act. 5. SAME-SOLE SEWING MACHINE.
The French and Meyer patent, No. 412,704, for a sole sewing machine, expired September 17, 1902, with the expiration of the term of the prior British patent, No. 13,366, of 1888, granted to the same patentees for substantially the same invention. Appeal from the Circuit Court of the United States for the District of Massachusetts.
For opinion below, see 148 Fed. 31.
Before COLT and PUTNAM, Circuit Judges, and BROWN, District Judge.
PUTNAM, Circuit Judge. This is a bill in equity based on an alleged infringement of letters patent No. 412,704, covering an invention for an alleged improvement in sewing machines, and issued to Zachary T. French and William C. Meyer on October 8, 1889, on an application filed on July 30, 1888. The bill was filed on December 21, 1903, and it alleged infringements on and after October 1, 1903. The decree below was for the respondent.
The only question we need consider is whether, under section 4887 of the Revised Statutes, with its various amendments, the patent in suit was terminated on September 17, 1902, by reason of the termination of a certain British patent on that day. The legal questions involved relating to the identity of the patenting were fully discussed by us in Westinghouse Electric Co. v. Stanley Instrument Co., 138 Fed. 823, 71 C. C. A. 189, in an opinion passed down on June 14, 1905, and in Thomson-Houston Electric Co. v. McLean, in an opinion passed down on April 11, 1907, 153 Fed. 883. The learned judge of the Circuit Court correctly applied the principles stated in those opinions to the facts of this case. We have no occasion to reconsider anything said by him on that issue. This especially applies to his observation, not limited to any particular claim in either patent, but relating to the whole of each patent, to the effect as follows:
"I can find in neither patent here in question evidence of 'an essential, novel, and patentable improvement on what was claimed in the other."
The complainant maintains that the British patent was taken out by an intermeddler. The position on this point is as follows: It is not questioned that Mr. Gregory, a patent solicitor, was authorized to represent the inventor in England, and that he sent instructions to Brooks, his correspondent there, the purpose of which was to secure simultaneous patenting. At some time, not named, a letter was discovered from one Munyon and one Goodyear to Brooks of September 14, 1888, directing Brooks to disregard Gregory's instructions, and to file the application in each country as soon as possible. There is a failure to directly prove any authority of Munyon and Goodyear to thus override Gregory. Nevertheless the Circuit Court, and we on appeal, proceeding on a bill in equity of this character as finders of the facts, have as wide a range for drawing inferences as a jury. There is no evidence that the inventor, or whoever controlled the invention, ever repudiated the British patent until after this suit was commenced, or attempted to do so. As he, whoever he was, knew that there was to be an application for a British patent, and that there was a purpose to take it out, it is beyond reasonable probability to assume that he never informed himself as to the issue of such a patent. On the other hand, the Circuit Court, and we, are entitled to assume that he obtained knowledge of what was done and acquiesced therein. Any hypothesis which would reject the conclusion of the Circuit Court in this respect, to the effect that the British patent was properly taken out, would be unreasonable.
The only other topic which we need consider is covered by the proposition of the complainant based on a series of conventions, or treaties, for the “international protection of industrial property,” by which is meant especially trade-marks and patents. The first was signed at Paris on March 20, 1883, between various nations, to which ratification by the United States was completed on March 29, 1887. Articles 3, 4, and 5 of this treaty relate to patents for inventions. A subsequent