THIS case was brought up, by writ of error, from the circuit court of the United States for the eastern district of Pennsylvania.
The case is stated in the opinion of the court.
It was argued by Mr. J. Mason Campbell, and Mr. Johnson, for the plaintiff in error, and by Mr. St. George T. Campbell, and Mr. Latrobe, for the defendant.
The points made by the counsel for the plaintiff in error, were the following:––
The court below (Judge Kane) charged the jury, in substance, that, as the infraction complained of was committed on the road of the plaintiff in error, though the cars were owned by the Baltimore and Susquehanna Railroad Company, the plaintiff in error was responsible in this action, because the profits accruing from the use of the cars were divided between the two companies.
He also charged the jury, that in estimating the amount of damages, they were to be guided by the sum which had been fixed by the witnesses as the fair compensation for an annual license for each car, and were to allow such sum annually, for each car, for a period of six years antecedently to the institution of the suit.
The plaintiff in error will contend that the learned judge below erred in both parts of his charge:––
1. As to the liability of the plaintiff in error. The cars, which were assumed to be made in violation of the patent of the defendant in error, were not built by, and did not belong to, the plaintiff in error. It is not liable, therefore, for their construction, nor is it pretended that it has sold any. If liable at all, it is for a use of the cars.
Now, in point of fact, it did not run the cars in question over its road.
The whole transportation was done by the Baltimore and Susquehanna Railroad Company; and if there has been any user by the plaintiff in error of cars, in violation of the patent of the defendant in error, it is a constructive user, growing out of the agreement between it and the Baltimore and Susquehanna Railroad Company, by which one third of the net revenue from transportation is credited to it, and a user in fact, under that agreement, by the Baltimore and Susquehanna Railroad Company.
This agreement is supposed, by the learned judge below, to do one of two things; either to constitute the relation of principal and agent between the two corporations, or to make them partners.
As to the first view, it may be observed, that the subject of the agency being the running of the cars, and the plaintiff in error having nothing to do with the running, it can hardly be deemed an agent, in the face of the fact that it does nothing in the agency. With still less plausibility can it be regarded as a principal; its supposed agent in that case, the Baltimore and Susquehanna Railroad Company, not only owning and running the obnoxious cars itself, but doing so by force of its own power in the premises.
As to the other view, to wit, that of a partnership between the plaintiff in error and the Baltimore and Susquehanna Railroad Company, a more extended examination is necessary.
In the first place, it seems impossible to establish this hypothesis, without conceding that these two corporations would have had a right to form a partnership expressly. Whether the partnership be express or implied, only relates to the nature of the evidence by which it is shown. The thing is the same, however proved. Now, the power to form a partnership is one which corporations do not possess, unless it be given in express terms, or by necessary implication. Sharon Canal Co. v. Fulton Bank, 7 Wend. 412; Canal Bridge v. Gordon, 1 Pick. 305.
There are neither such words nor implication in the present instance, and, of consequence, no partnership can be deduced where the power to create that relation is wanting.
If, however, the power be conceded, and no partnership has been in terms formed, it is only to be implied, in law, from the division of the net profits of transportation between the two corporations, provided for by their agreement.
But the reception of a part of the profits is not always attended with this consequence. Seamen and clerks may receive their pay in this form without becoming partners thereby, either inter se or as to third persons. So a landlord may get his rent in the shape of profits, and not be made a partner by such receipt. The test seems to be in the animus of the parties as to the reservation of profits, and not in the reservation itself. If their purpose be compensation, merely, to one furnishing something necessary to the business, a partnership is not held to be created. Such is the present case, where it is plain that the object was merely to compensate the plaintiff in error for the use of its road, and to make the rent therefor commensurate with the use. Story on Part. §§ 36, 38; 3 Kent's Comm. 33; Perrine v. Hankenson, 6 Halsted, 181; Heimstreet v. Howland, 5 Denio, 68; Heckert v. Fegely, 6 Watts and Serg. 143; Boyer v. Anderson, 2 Leigh, 550; Loomis v. Marshall, 12 Conn. 69; Collyer on Part. § 44, and note.
Conceding, however, argumenti grati a, that the relation of principal and agent, or of partners, existed between the two corporations, it cannot be denied that the infringements complained of were not committed by the plaintiff in error, but by the Baltimore and Susquehanna Railroad Company.
Now, the tortious acts of the company last named cannot be considered as acts done in the ordinary course of the business between it and the plaintiff in error, whatever be the relation between these parties; and to make the plaintiff in error responsible, it must be shown to be privy to their commission, before or after. Story on Agency, § 455; Collyer on Part. § 457; Keplinger v. Young, 10 Wheat. 358, 363.
But the learned judge below excludes altogether this element of accountability, and makes the plaintiff in error liable, without putting the fact of privity to the jury.
2. The charge below is also erroneous as to the amount of damages recoverable.
It gave the jury to understand, that they could find against the plaintiff in error for a user of the patent of the defendant in error, for six years preceding the commencement of the suit.
But the declaration only charged (Record 4) a user during the term of seven years, for which the extension of the patent had been granted.
Now, the seven years' extension began only on the 1st October, 1848, and all, therefore, that was recoverable under the declaration, was for a user from the 1st October, 1848, to the time of suit brought, (April, 1851,) a period of less than three years, instead of six, as charged.
3. The suit being only for infringements committed during the extension of the patent, it is further submitted, that the extension being by the acting commissioner of patents, is unavailing to give the defendant in error any rights.
If this court, in 4 How. 646, meant to affirm the validity of the acts of such a functionary, as is supposed by Mr. Justice Woodbury, in 1 Woodbury and Minot, 248, this point is not now open; but if it be open, the plaintiff in error relies on the first and second sections of the patent act of 1846, as governing the patent-office, to the exclusion of the acts of 1792 and 1795. 1 Stat. at Large, 281, 415.
The counsel for the defendant in error made the following points:––
1. The extension of the patent by the acting commissioner, &c. (The argument upon this head is omitted.)The remaining exceptions to the charge ...