Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (1916)

AMERICAN WELL WORKS COMPANY v. LAYNE AND BOWLER COMPANY.

error to the dist rict court of the united states FOR THE EASTERN DISTRICT OF ARKANSAS.

No. 376. Argued May 5, 1916.—Decided May 22, 1916.

A suit for damages to business caused by a threat to sue under the patent law is not in itself a suit under the patent law, of which the state court cannot take jurisdiction. Whether a wrong is committed by one making statements to effect

that an article sold by another infringes the former’s patent depends upon the law of the State where the act is done and not upon the patent law of the United States; and, in this case held that the state court had jurisdiction of a suit for libel or slander based on such statements.

The facts, which involve the jurisdiction of the District Court, are stated in the opinion.

Mr. David A. Gates,for plaintiff in error,submitted.

Mr. Paul Synnestvedt, with whom Mr. J. M. Moore and Mr. Coke K. Burns were on the brief, for defendants in error.

Mr . Justi ce Holmes delivered the opinion of the court.

This is a suit begun in a state court, removed to the United States Court, and then, on motion to remand by the plaintiff, dismissed by the latter court, on the ground that the cause of action arose under the patent laws of the United States, that the state court had no jurisdiction, and that therefore the one to which it was removed had none. There is a proper certificate and the case comes here direct from the District Court.

Of course the question depends upon the plaintiff’s declaration. The Fair v. Kohler Die Co., 228 U. S. 22, 25. That may be summed up in a few words. The plaintiff alleges that it owns, manufactures and sells a certain pump, has or has applied for a patent for it, and that the pump is known as the best in the market. It then alleges that the defendants have falsely and maliciously libeled and slandered the plaintiff’s title to the pump by stating that the pump and certain parts thereof are infringements upon the defendant’s pump and certain parts thereof and that without probable cause they have brought suits against some parties who are using the plaintiff’s pump and that they are threatening suits against all who use it. The allegation of the defendants’ libel or slander is repeated in slightly varying form but it all comes to statements to various people that the plaintiff was infringing the defendants’ patent and that the defendant

AMERICAN WELL WORKS v. LAYNE. 259

would sue both seller and buyer if the plaintiff’s pump was used. Actual damage to the plaintiff in its business is alleged to the extent of $50,000 and punitive damages to the same amount are asked.

It is evident that the claim for damages is leased upon conduct, or, more specifically, language, tending to persuade the public to withdraw its custom from the plaintiff and having that effect to its damage. Such conduct having such effect is equally actionable whether it produces the result by persuasion, by threats or by falsehood, Moran v. Dunphy, 177 Massachusetts, 485, 487, and it is enough to allege and prove the conduct and effect, leaving the defendant to justify if he ean. If the conduct complained of is persuasion, it may be justified by the fact that the defendant is a competitor, or by good faith and reasonable grounds. If it is a statement of fact, it may be justified, absolutely or with qualifications, by proof that the statement is true. But all such justifications are defences and raise issues that are no part of the plaintiff’s case. In the present instance it is part of the plaintiff’s case that it had a business to be damaged; whether built up by patents or without them does not matter. It is no part of it to prove anything concerning the defendants’ patent or that the plaintiff did not infringe the same—still less to prove anything concerning any patent of its own. The material statement complained of is that the plaintiff infringes—which may be true notwithstanding the plaintiff’s patent. That is merely a piece of evidence. Furthermore, the damage alleged presumably is rather the consequence of the threat to sue than of the statement that the plaintiff’s pump infringed the defendants’ rights.

Mr . Just ice Mc Kenna dissents, being of the opinion that the case involves a direct and substantial controversy under the patent laws.

LOUISVILLE AND NASHVILLE RAILROAD COMPANY v. STEWART, ADMINISTRATRIX OF STEWART.

STEWART, AS ADMINISTRATRIX OF STEWART, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY.

Nos. 485, 904. Argued April 19, 20, 1916.—Decided May 22, 1916.

A verdict and judgment thereon in a state court in a suit by an administrator under the Employers’ Liability Act, based on an instruction that the jury should find, if anything, such a sum as will fairly compensate the intestate’s estate for his death, and which has been set aside for error of such instruction by the state appellate court, cannot be reinstated by this court on a writ of error to the appellate court of the State after judgment for a lesser amount on the second trial has been affirmed by that court.

Quaere, whether such a verdict and judgment could be reinstated had there been no error in law in the instructions given at the first trial. Minn. & St. Louis R. R. v. Bombolis, ante, p. 211, followed to effect that the verdict of a jury, legal under the state law but which would not be legal in a Federal court, is not a denial of Federal right under the Seventh Amendment in a suit brought in a state court under the Employers’ Liability Act.

The due process provision of the Fourteenth Amendment does not require a State to provide for suspension of judgment pending appeal nor prevent its making it costly in case the judgment is upheld; nor is due process denied by adding ten per cent., as is done under the statute of Kentucky, on the amount of judgment if the same is affirmed. The opinion of both courts below being against defendant’s contention that this case should have been withdrawn from the jury, this court not disagreeing with them, affirms the judgment.

163 Kentucky, 823, affirmed.

The facts, which involve the validity of a verdict and judgment in an action in the state court under the Employers’ Liability Act, are stated in the opinion.

Mr. Benjamin D. Warfield, with whom Mr. James C. Sims and Mr. John B. Rodes were on the brief, for Louisville and Nashville Railroad.

Mr. George H. Lamar, with whom Mr. B. F. Procter, Mr. C. U. McEllory and Mr. D. W. Wright were on the brief, for Stewart.

Mr . Justice Holmes delivered the opinion of the court.

This is an action brought under the Employers’ Liability Act of April 22, 1908, c. 149, 35 Stat. 65, against the Railroad Company for negligently causing the death of the plaintiff’s intestate, her husband. There were two trials. A verdict and judgment for the plaintiff at the first were set aside by the Court of Appeals. 156 Kentucky, 550; 157 Kentucky, 642. A judgment for a less amount at the second trial was sustained. 163 Kentucky, 823. The Railroad Company seeks to overthrow the last judgment; the plaintiff by her cross writ seeks to reinstate the first, but failing that contends that the last should be affirmed, denying, that is, that there are any grounds for the Railroad Company’s writ.

The Railroad Company had for its principal object in bringing the case here to set up the Seventh Amendment, and to deny jurisdiction in any state court wh$re a verdict of nine or more out of the twelve men on the jury was allowed by the local law. The notion that a substantive right vesting under the law of one jurisdiction cannot be recognized and enforced in another, at least as between the United States and a State, unless by procedure identical with that of the first is disposed of in Minneapolis &c. R. R. v. Bombolis, ante, p. 211.

The first of the other objections is that the Court of Appeals was not authorized to add ten per cent, damages on the amount of the judgment,, as it did. But the Railroad Company obtained a supersedeas, and the law of the State makes ten per cent, the cost of it to all persons if the judgment is affirmed. There was no obligation upon the State to provide for a suspension of the judgment and nothing to prevent its making it costly in cases where ultimately the judgment is upheld. So the State may allow interest upon a judgment from the time when it is rendered, if it provides appellate proceedings and the judgment is affirmed, as but for such proceedings interest would run as of course until the judgment was paid.

Opinion of the Court. 241 Ü. 8.

train and the cars more than filled the siding. Therefore they pushed forward onto the main track to the rear of the south-bound train and the latter went on its way. It still, however, was necessary to keep the main track clear for another south-bound train, and therefore Stewart’s train began to back so as to free the main track north of the switch which would be the first point reached by the expected train. While it was backing and approaching the southerly end of the switch the rear brakeman suddenly applied the airbrakes and the sudden shock caused the engineer to strike his head against the cab, by reason of which he died. The conductor in charge of the movement testified that he intended not to cross the southerly point of the switch and it could be found that the brakeman’s act, was a breach of duty, that it manifestly would cause a sudden shock, and that although the particular position of, or specific damage to Stewart was unknown to the brakeman, generically it was the kind of thing that was likely to happen, and that he and his employers were liable for consequences of that sort. The jury was instructed that Stewart assumed the risks incident to his employment and that if the application of the airbrakes was made upon a reasonable belief that it was necessary to apply them in order to avoid injury to property, they should find for the defendant unless they found that the emergency was brought about by the defendant’s servants in the negligent operation of the train before the brakes were applied. As an abstract proposition the qualification was correct, and the jury might have found that the conductor did not manage the train with due care and so made the application necessary. Whatever might have been our opinion had we been in the jury’s place we do not feel warranted in saying that they had no evidence to go upon or that the instructions were wrong.