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tion for which patent he had assigned to his codefendant, held, on de— murrer, to state a cause of action.
[Ed. Note—For cases in point, see Cent. Dig. vol. 44, Specific Performance, §§ 356-372.]
In Equity. On demurrer to bill.
Duncan & Duncan, for complainant.
'Griggs, Baldwin & Pierce (Arthur J. Baldwin, of counsel), for defendants.
CHATFIELD, District Judge. The defendant the Automatic Fire Protection Company has demurred to the bill of complaint filed in this cause, and states as its grounds of demurrer (1) that the complaint does not show a case which ought to entitle the complainant to such discovery or relief as is prayed for; (2) that the allegations of the bill of complaint are too uncertain, vague, and indefinite to authorize a court of equity to grant any relief.
Generally stated, the alleged cause of action appears to be as follows: The complainant is a resident of the state of New jersey, and the defendant Shipman a resident of the city of New York and county of Kings, while the Automatic Fire Protection Company was organized under the laws Of the state Of Maine and has an Office in the state of Illinois. The complainant, Thompson, is alleged to be the managing head of a corporation known as the Manufacturers’ Automatic Sprinkler Company, doing business in New York City. The defendant Shipman was a workman in the employment of that company. Prior to the year 1901 Thompson had obtained certain patents upon automatic sprinklers, and between the years 1901 and 1903 made arrangements with Shipman by which Shipman was to work out of his regular hours of employment for Thompson upon the machines relating to these patents. Thompson agreed to pay Shipman the reasonable value Of the work done by him, and, if Thompson saw fit, a further sum, in return for which Shipman was to work out further practical developments of said inventions. Any inventions or improvements devised jointly or separately by Shipman and Thompson were to be disclosed and assigned tO Thompson, including any patents that Shipman himself might Obtain thereon. The complaint alleges performance, and that Shipman, during the time of the employment, invented a certain automatic alarm valve, which he refused and neglected to disclose to Thompson, and refused to assign to him. In the month of April, 1903, Shipman left Thompson’s employment, and on May 2d filed an application for a patent on the invention of his own. Subsequently Shipman made arrangements with certain other individuals, and assigned his applica— tion and patents to the Automatic Fire Protection Company, the codefendant, in furtherance, as it is alleged, of the scheme on the part of Shipman to defraud Thompson of his rights thereto.
No application has been made to make the complaint more definite and certain. The demurrer is based upon objections which, if further information is desired by the defendants, might be sufficient for the granting of such motion. But it would seem that the allegations are sufficient to show a cause of action, and the complainant demands specific performance and an injunction. The defendant Shipman herein, according to the bill of complaint, seems to have been employed upon a quantum meruit, and the defendant Shipman urges that the arrangement set forth would be a practical mortgage in perpetuity of his labor and talents. The fact that the defendant Shipman ter— minated the employment and left the service of the complainant seems to answer this objection; and there does not seem to be any reason for distinguishing this case from those in which a workman has been hired, in consideration of his employment at a stated salary, to work upon inventions or machines which are in process Of improvement, and to assign any patentable improvements that he may make. Thibodeau v. Hildreth, 124 Fed. 892, 60 C. C. A. 78, 63 L. R. A. 480, Mississippi Glass CO. v. Franzen, 143 Fed. 501, 74 C. C. A. 135, and Hulse v. Bonsack Machine Co., 65 Fed. 864, 13 C. C. A. 180, do not seem to be materially different in principle.
As to the further ground, that the Automatic Fire Protection Company is a purchaser for value without notice of the equitable claims to the patent rights, that a court of equity cannot interfere with these rights, and that no relief can be given in relation to disclosures by Thompson to Shipman, which had been merged in a patent granted to Shipman, it would appear that the complaint alleges sufficient to raise the issue, and that this question should be disposed of upon the merits at final hearing.
The other objection, that there is no direct allegation that the patent obtained by Shipman was connected with the subject-matter of the contract between Thompson and Shipman, does not seem to be well founded. No other inference can be drawn from the allegations of the complaint, and, if this theory is not the basis of the action, the final hearing may be fatal to the complainant.
It is considered, therefore, that the bill of complaint is sufficient for the purposes of the action, subject to any motions which the defendants may be advised tO make with reference to making the bill Of complaint more definite and certain, if defendants need further information.
The demurrer will be overruled, with leave to defendants to answer over.
1. BANKRUPTCY—GARNIBHMENT 0F TRUSTEE—PROCEEDS OF EXEMPT PROPERTY. An attachment execution issued on a judgment on a note waiving exemptions and served on the debtor’s trustee in bankruptcy, who holds proceeds of exempt property sold, is invalid and ineffective to create any lien or claim upon the fund, which is in custodia legis, and not subject to
attachment. [Ed. Note—For cases in point, see Cent. Dig. v01. 6, Bankruptcy, § 677.]
2. SAME—EXEMPTION—ADMINIsTRATrON OF EXEMPT PROPERTY. - A court of bankruptcy has no jurisdiction to administer property set aside to a bankrupt under his claim for exemption.
In Bankruptcy. On certificate from referee.
George C. Lewis, for bankrupt.
EWING, District Judge. The question certified by the referee is whether the bankrupt is entitled to his exemption claimed, or whether the same should be distributed to George Altmeyer, claiming the sum due by virtue of writs of execution issued upon a certain judgment in favor of Altmeyer waiving the benefit of the exemption law. A cred— itors’ petition was filed against Sorg on the 3lst of July, 1906, and on the same day James F. Richards was appointed receiver, and on his petition setting forth, inter alia, that George Altmeyer had issued execution against the said Albert M. Sorg, at No. 170, August term, 1906, on a judgment confessed July 26, 1906, a restraining order was issued and the property levied upon taken possession of by the receiver and subsequently sold. Sorg was adjudicated a bankrupt October 10, 1906, and in his schedules filed October 30th he claimed $300 exemp— tion out of the funds arising from the sale of his estate by the receiver on August 15th preceding. Subsequently Altmeyer issued an attachment execution, and served the same on Richards, who had then been elected trustee of the estate as garnishee, claiming to attach this exemption fund in his hands, and he now seeks by virtue of his judgment and levy and said attachment execution to have the trustee pay to him the $300 exemption claimed by the bankrupt, instead of delivering the same to the bankrupt.
The judgment and levy made prior to the filing of the petition in this case were avoided by section 67f of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3450]). In re Richards, 3 Am. Bankr.- Rep. 145, 96 Fed. 935; In re Wilkes, '7 Am. Bankr. Rep. 574, 112 Fed. 975; In re Tome, 8 Am. Bankr. Rep. 285, 115 Fed. 906. And the attachment execution served on the trustee subsequently is invalid and ineffective, because the fund was then in custodia legis. In re Renda, 17 Am. Bankr. Rep. 521, 149 Fed. 614. Moreover, the bankrupt court has no jurisdiction to administer property set aside to the bankrupt under his claim for exemption. Lockwood v. Exchange Bank, 190 U. S. 294, 23 Sup. Ct. 751, 47 L. Ed. 1061.
The referee was of opinion that the bankrupt was entitled to his exemption, and awarded the same to him; and his action therein is af:firmed.
In re‘ GEMMELL.
A diamond ring, worth several hundred dollars. and worn by a bankrupt himself, is not exempt under a state statute as “wearing apparel."
[Ed. Note—For cases in point, see Cent. Dig. vol. 6, Bankruptcy, 5 659.]
J. H. Longenecker, for trustee.
EWING. District Judge. On January 9, 1907, the trustee of the estate of said bankrupt presented his petition to the court, praying for an attachment of said bankrupt for his neglect and refusal, after notice by the trustee, to surrender a diamond ring alleged to belong to his estate, and thereupon the petition was referred to S. R. Longe— necker to take testimony and make report, with the form of decree he recommended.
From the report of the referee, who recommends that an attachment issue against the said bankrupt, and from the testimony taken on the hearing had before him, it appears that at the time the petition in bankruptcy was filed and subsequent thereto the bankrupt was the owner of a diamond ring, the value Of which was variously estimated at from $400 to $1,000, which ring he did not include in his schedules, but which at the time of his examination before the referee he agreed to deliver up in case it was not exempt under the wearing apparel provision of the exemption law of this state. The bankrupt filed exceptions to the referee’s finding and the decree he recommends, and the whole contest here is as to whether or not said ring is properly included within the provisions of the exemption law of Pennsylvania of 1849 as wearing apparel.
This ring was worn and owned by the bankrupt himself, not by his wife, nor any other member of his family; and, if there be anything about a gentleman’s attire more unnecessary and less worthy to be included within the phrase “wearing apparel” than a diamond ring, I do not know what it can be. Watches of moderate value have been held to be included among “wearing apparel,” and in one instanceeven a diamond stud of the value of $250, but that only after it had been conclusively shown that the owner had worn it for a number of years to fasten his shirt bosom together and apparently had nothing to take its place. The financial condition of this bankrupt for a considerable time prior to this proceeding was not such as to warrant him in indulging in such extravagances.
He made no claim for exemption, “except petitioner’s personal effects, wearing apparel, and such items belonging to the person as are exempt by the laws of the state of Pennsylvania, relating either to himself or members of his family.” Pursuant to this claim no list of exempt property was ever made or requested, and no enumeration thereof asked, by the bankrupt. It might be, if this were an heirloom or a ring of comparatively little value, that it would be allowed as “wearing apparel”; but to permit persons in straitened financial circumstances to invest large sums of money in articles of value only for mere personal adornment at the expense of their creditors would be rank injustice. The bankrupt himself values this ring at from $7501 upwards, and states that on several occasions he had made presents to his wife of diamonds for which he had paid from $100 to $200 at a time, and yet his creditors have been during all this time deprived of» payment largely because of such expenditures by him. In Dox’s Appeal, 30 Pa. Super. Ct. 393, it was decided that a diamond ring could not properly be classed as wearing apparel under a bequest in a will, and, if not wearing apparel under these circumstances, I do not think a ring of this value could properly be classed as wearing apparel under the exemption law.
The exceptions to the report of the referee are therefore overruled and dismissed, and it is nowdirected that the bankrupt deliver up to the trustee, within 10 days after notice of this order, the said diamond ring, or pay him the fair value thereof.
In re HAASE.
BANKRUPTCY—DISCHARGE—FOBMER DISCHARGE WITHIN SIx YEARS.
Under Bankr. Act July 1, 1898, c. 541, § 14b, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427], as amended by Act Feb. 5, 1903, c. 487, § 4b, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 684], which provides that the judge shall discharge a bankrupt unless he has "(5) in voluntary proceedings been granted a discharge in bankruptcy within six years.” the six years is measured backward from the time of the hearing on the application for the second discharge. and not from the time of the commencement of the second proceeding.
In Bankruptcy. Discharge. Qn exception to objections.
Stern, Singer & Barr (William J. Barr), for creditor.
HOUGH, District Judge. The specifications of objection declare that the bankrupt was granted a discharge in this court on the 19th of December, 1900, and “within six years before the commencement of this proceeding.” By “this proceeding” is meant the filing of the present petition in bankruptcy. It is argued that (section 14b, subd. 5, Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427]), under the Ray amendment the discharge now prayed for cannot be granted (Act Feb. 5, 1903, c. 487, § 4b, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 684]). As section 14b now stands, the words applicable to the present contention are these:
“The judge shall * * * discharge the applicant unless he has in voluntary proceedings been granted a discharge in bankruptcy Within six years.”
I cannot perceive how this language bears any construction other than that the six years is measured backward from the time of hearing. This is the View taken in the last edition of Collier on Bankruptcy, and in Re Jordan, 15 Am. Bankr. Rep. 449, 142 Fed. 292. That case was not decided upon the facts of In re Little, 13 Am. Bankr. Rep. 640, 137 Fed. 521, but upon the reasoning thereof, and both the reasoning of the Little Case and the decision in the Jordan Case appear to me correct interpretations of the section under consideration. It is to be remembered that prior to the amendment of 1903 there was nothing to prevent successive petitions being filed by habitual bankrupts within a few months of each other, and there is still nothing to prevent such petitions being presented. The effect of the Ray