In order that there may be a preference under section 60a of the bankruptcy act, there must be an existing creditor to whom a preference can then be given. Thus, in Tiffany v. Boatman's Institution, 18 Wall. 375, 21 L. Ed. 868, it is said: "The preference at which this law is directed can only arise in case of an antecedent debt. To secure such a debt would be a fraud on the act, as it would work an unequal distribution of the bankrupt's property, and therefore the debtor and creditor are alike prohibited from giving or receiving any security whatever for a debt already incurred if the creditor had good reason to believe the debtor to be insolvent. But the giving securities when the debt is created is not within the law, and, if the transaction be free from fraud in fact, the party who loans the money can retain them until the debt is paid." It does not appear that the mortgage in question was withheld from record by agreement between Sanders and the bankrupt, or that any fraud was intended by so withholding it, or that any debt was incurred by the bankrupt after the date of the mortgage and before it was filed for record. As to the $395, the mortgage was therefore a lien given by the bankrupt for a present consideration in good faith advanced by the mortgagee at its date, within the meaning of section 67d, and was not a preference to a prior creditor under section 60a of the act; and, having been recorded before the commencement of the bankruptcy proceedings, is not affected by them. Again, the certificate of the referee is silent as to whether or not Clifford was insolvent either at the date of the mortgage or at the time it was filed for record. To constitute a preference, the mortgagor must have been insolvent. Section 60a, Bankr. Act. And to be invalid as against the trustee the person receiving the mortgage or to be benefited thereby must have had reasonable cause to believe that a preference was intended. Section 60b. In the absence of all proof, and of any finding of the referee as to the insolvency of the mortgagor, or that the mortgagee had reasonable cause to believe that a preference was intended, it could not, in any event, be held that this mortgage, having been duly recorded, so far as it secures the purchase price of the cattle, is in violation of any of the provisions of the bankruptcy law. The order of the referee is approved. G. & C. MERRIAM CO. v. STRAUS et al. (Circuit Court, S. D. New York. December 9, 1904.) 1. UNFAIR COMPETITION-INJUNCTION-PLEA. The plea to a bill for injunction presenting a case of unfair competition in trade, arising from the manner in which defendants have used the word "Webster's" to lead the public to believe their dictionaries are those manufactured by complainants, is insufficient, it not denying explicitly the averments that the term when used on such dictionaries had acquired a meaning in the trade and with the public as signifying editions which were the product of complainants, and that defendants have used the word without any qualifying descriptive matter tending to show that their dictionaries are not the product of complainants; as, if such averments are true, the word has acquired a secondary meaning, and complainants are entitled to protection against the misleading use of it, though any publishers, by reason of the expiration of the copyright on the literary product, are at liberty to use the word in a manner which distinguishes their dictionaries from those of complainants. [Ed. Note.-Unfair competition, see notes to Scheuer v. Muller, 20 C. C. A. 165; Lare v. Harper & Bros., 30 C. C. A. 376.] 2. SAME-COPYING CHARACTERISTICS. The principles which interdict unfair competition in trade will protect a publisher who has imparted to his books peculiar characteristics, which enable the public to distinguish them from books published by others and containing the same literary matter, against the copying of the characteristics, though the copyright on the literary matter has expired. 3. SAME-PLEAS-SUBSTITUTE FOR ANSWER. A plea to a bill for unfair competition which amounts substantially to a denial, with an allegation of evidential facts to disprove the charges of the bill, is improper, an answer being sufficient, E. E. Wise and Mr. Banning, for the plea WALLACE, Circuit Judge. The elaborate briefs which have been filed upon the argument of the plea invite discussion of many questions which are not involved in deciding whether the plea which has been set down for argument is good upon its face. The facts set forth in the bill present a case of unfair competition in trade by the defendants, arising from the manner in which they have used the word "Webster's," to lead the public to believe that their dictionaries are the dictionaries which are produced and manufactured by the complainants. The plea is a purely negative plea, except that it sets forth facts which show that the word as applied to dictionaries which reproduce the definitions. of which Noah Webster was the author was publici juris, as a generic descriptive term for such dictionaries, at the time of its alleged wrongful use by them. The plea does not deny explicitly the averments of the bill which assert that the term when used on such dictionaries had acquired a meaning in the trade and with the public as signifying editions which were the product of the complainants, and assert that the defendants have used the word without any qualifying descriptive matter tending to show that their dictionaries are not the product of the complainants. If these averments are true, the word had acquired a secondary meaning, and the complainants are entitled to protection against the misleading use of it, notwithstanding the defendants are. at liberty to use it in a manner which distinguishes their dictionaries from those of the complainants. Because the denials in the plea do not fully meet the averments in the bill of evidential facts which should be either traversed or admitted, the objections to the plea are well taken. The exhibits annexed to the bill suggest grave doubt whether the books sold by the defendants, notwithstanding the use of the word "Webster's" thereon, are not sufficiently distinguished from those published by the complainants to repel the charge of unfair competition; but any present discussion of the merits would be out of place. It is proper, however, to say that the bill is in part an attempt to protect the literary property in the dictionaries which became publici juris upon the expiration of the copyrights. This attempt must prove futile. But there may be a commercial property in books as well as a literary property, and when a publisher has imparted to his books peculiar characteristics which enable the public to distinguish them from other books embodying the same literary property, and to recognize them as his particular product, there is no reason why the principles which interdict unfair competition in trade should not afford him protection against the copying of the characteristics by rivals. So far as the bill proceeds upon this theory it presents a meritorious case. The defense sought to be interposed by the plea could as well have been presented by an answer. If it is true that the word had become a generic descriptive term for dictionaries such as the defendants have sold and threaten to sell, and that the defendants have made no misleading use of it, the case made by the bill is fully met, and the defendants by their answer can narrow the controversy to these issues. It is doubtful whether such a defense is the proper subject of a plea. The new facts which it brings forward are merely evidential facts which go to disprove the charges in the bill of the unfair use of the word by the defendants. It is not the province of a plea to interpose defenses which can be raised by denying some of the statements of the bill without bringing forward any new fact which creates a bar to the suit or to that part of the bill to which the plea is addressed. Thus, in a suit brought to restrain infringement of a patent, the defense of noninfringement is not properly interposed by a plea, and should be presented by an answer. Sharp v. Reissner (C. C.) 9 Fed. 445; Korn v. Wiebusch (C. C.) 33 Fed. 50; Union Switch & Signal Co. v. Philadelphia & R. R. Co. (C. C.) 69 Fed. 833. The defense set up in the present plea amounts substantially to a denial that the complainants have any exclusive right to the use of the word, or that the defendants have used it unfairly. In other words, it amounts to a denial of infringement of the rights of the complainants. The plea is overruled, and the defendants are directed to answer. THE THREE BROTHERS. THE STAMFORD. (District Court, S. D. New York. March 18, 1905.) COLLISION-TUGS MEETING-IMPROPER MANEUVER FOR PASSING. A tug passing up about the center of East river in the evening held on conflicting evidence solely in fault for a collision with a meeting tug on the ground that she attempted to cross the bows of the other tug and pass starboard to starboard, contrary to the proper signal given by the descending tug, and when the situation was such as to render a port to port passing the proper maneuver. In Admiralty. Cross-suits for collision. James J. Macklin, for the Stamford. ADAMS, District Judge. The first of the above entitled actions was brought by William E. Barber, the managing owner of the steamtug Stamford, to recover from the steamtug Three Brothers, the damages. caused to his tug by a collision in the East River, abreast of Newtown Creek, on the 6th day of December, 1902. The second action was brought by John D. Dailey, the owner of the Three Brothers, to recover the damages he suffered in the collision. The Stamford was proceeding down the river on a trip from Whitestone and alleges that she observed the red light of the Three Brothers on her own port bow and sounded a signal of one whistle to which the Three Brothers replied with a signal of two whistles and the latter swung to port, whereupon the Stamford blew a second signal of one. whistle, which was followed by alarm whistles and the stopping of the Stamford but the Three Brothers came on and struck the former about amidships on the port side. The Three Brothers was bound up the river, destined for 130th Street, Harlem, and alleges that she was navigated in the middle of the stream; that when abreast of 20th Street she slowed down to permit a steamer bound up stream to pass ahead and then proceeded on her voyage; that shortly thereafter, a green light, which was being set, suddenly loomed up a little off the starboard bow of the Three Brothers, which immediately blew a signal of two whistles and starboarded; that she received a reply of one whistle and the red light of the Stamford came into view; that the Three Brothers immediately blew an alarm signal and stopped and reversed her engines but the Stamford ran into her carrying away her stem and doing other damage. The collision happened in about the center of the river opposite Newtown Creek by the stem of the Three Brothers striking the port side of the Stamford. The tide was ebb. The testimony, as well as the pleadings, is in direct conflict, and apparently there is no way of reconciling the accounts of the collision and one side or the other must be adopted. The account given by the Stamford seems to be the more credible. The Three Brothers insisted that the lights of the Stamford were being put up at the time of, or just before, the collision but it satisfactorily appears that they were duly set when the tug was near Whitestone and were brightly burning thereafter and continued to do so up and subsequent to the collision. It appears that the Stamford was bound down the river, and the Three Brothers up the river. The latter was nearer the Long Island shore than the Stamford and the vessels would naturally show each other their red lights. Such being the situation, it was proper that they should exchange a signal of one whistle and pass port to port. The Stamford gave the correct signal and endeavored to conform thereto, until it was observed by her that the Three Brothers was endeavoring to cross her bow from port to starboard, giving a signal of two blasts to indicate her intention in such respect. The latter says that at first she was heading up the river but towards the Long Island shore. Under these circumstances she could not have been showing the Stamford her green light, as she urges, but must have been showing her red. This accords with the Stamford's contention and is inconsistent with the Three Brothers'. The only thing that tends to implicate the Stamford in the matter is her admission that the bearing of the vessels to each other continued about the same, indicating that instead of passing some distance apart, as they should, they were drawing together with danger of collision. This rendered it necessary for the Stamford to take some precautionary measures but about the time it would have become actually incumbent upon her to do so, it appeared to her that the Three Brothers was trying to cross her bow and she then stopped and backed. Her navigation can not be said to be free from criticism but I do not find that she was guilty of any fault which contributed to the collision, which can be fully accounted for by the Three Brothers' improper attempt to cross the Stamford's bow in order to pass on the starboard side. Decree for the libellant Barber, with an order of reference. The libel of Dailey is dismissed. DENNIS v. HOME INS. CO. (District Court, S. D. New York. March 8, 1905.) * * * MARINE INSURANCE-EQUIPMENT OF YACHT-BOATS "OF AND IN" VESSEL. A marine policy insured "in port and at sea, at all times, in all places and on all occasions, * upon the hull, spars, sails, materials fittings, boats (including launches, steam or otherwise, if any), furniture, provisions, stores, boilers, etc., of and in the schoon er yacht Rosemary,” against all manner of marine perils, and the furniture and boats against fire when laid up on shore. Held, that a naptha launch, part of the equipment of the yacht, carried on davits when she was under way, and used as a means of communication with the shore when in port, while being so used in the usual way between the yacht and shore was "of and in" the yacht, and covered by the policy. In Admiralty. Action on marine insurance policy. ADAMS, District Judge. This action was brought by John B. Dennis, the owner of the schooner yacht Rosemary, to recover from the Home Insurance Company the loss suffered by the sinking of a naptha launch, on the 6th of August, 1902. The yacht at the time was insured under a policy of insurance covering a period of a year from the 21st day of September, 1901, which, among other things, provided as follows: "As employment may offer, in port and at sea, in docks and graving docks, and on ways, gridirons and pontoons, at all times, in all places and on all occasions, services and trades whatsoever and wheresoever, under steam or sail, upon the hull, spars, sails, materials, fittings, boats (including launches, steam or otherwise, if any), furniture, provisions, stores (electric light installation and plant, if any), machinery, boilers, etc., of and in the Schooner Yacht Rosemary." "Touching the adventure and perils which we, the said assurers, are contented to bear and take upon us, they are of the Seas, Men-of-War, Fire, Ene mies, Pirates, Rovers, Thieves, Jettisons, Letters of Mart and Countermart, Surprisals, Takings at Sea, Arrests, Restraints, and Detainments of all Kings, Princes and People, of what nation, condition or quality soever, Barratry of the Master and Mariners, and all other perils, losses and misfortunes that 136 F.-31 |