so far as concerns the so-called electel device.
The plaintiff's tax-refund money which J. Rogers Flannery misappropriated went through many hands. If the plaintiff can trace defendants' funds into the inventions and patents which it is seeking to recover in the instant case, it certainly would now, in equity, be entitled to relief by requiring the assignment to the plaintiff from the present holder of these inventions and patents. We do not see here a case of joint liability at law by the defendants. Their accountability to the plaintiff rests upon different grounds. J. Rogers Flannery made the first misappropriation by securing the payment of tax-refund money, so he could convert it into Government Treasury notes, then placed it in the hands of his brother-in-law in Pittsburgh, had it taken out from time to time at his direction, and put into corporate agencies under his control, and persons under his control. Therefore, the accountability as to the several defendants rests upon different grounds, J. Rogers Flannery resting upon his acting in misappropriation, and the others as the agencies through which that misappropriation was made, and which are separately accountable for their own part in carrying out the misappropriation.
The release of Mrs. Flannery is not like the release of a joint trespasser or a joint contractor. In equity, we are of the opinion that it is specifically limited to Mrs. Flannery alone. Veazie v. Williams, 49 U.S. 134, 156, 8 How. 134, 12 L. Ed. 1018. We regard this case as conclusive on that point. The release of Mrs. Flannery does not satisfy and extinguish the cause of action, for she played only one part, and received only a portion of the originally misappropriated funds.
The defendants in this case raise another objection to the maintenance of this suit. They suggest that the plaintiff is barred from obtaining any relief in the instant case, because of its failure to observe the well-established legal maxim that he who comes into a court of equity, must come with clean hands. The facts on which defendants base this contention are these. During the trial, when Paul Friday, a witness called by the defendants, was on the witness-stand and was being examined by plaintiff's counsel, there was shown by that counsel to the witness a paper, and the witness was asked if it was a photostatic copy of his Federal inome-tax return for the year 1933. The witness refused to identify the paper as such. The witness was then asked if he would furnish the plaintiff with an office-copy of his return, and he said he would look to see if he had such a copy. Some days later he was again called to the witness-stand by the plaintiff and asked if he had produced a copy, and he replied "no." The witness was then again shown by plaintiff's counsel the document in question, and was asked if it was a photostatic copy of his Federal income-tax return; he declined to identify it as his income-tax return. Later on in the trial, Friday, the witness, was again called to the witness-stand, this time as witness for the defendants; and then testified that the document shown to him by the plaintiff's counsel was a photostatic copy of his income-tax return for the year 1933.
We believe these facts would not bar the plaintiff from having relief in the instant case. As we understand the law, the doctrine of clean hands is available only when the plaintiff has been guilty of unconscionable or unlawful conduct in respect of the transaction which is before the court. Many authorities sustain this view. See Cunningham v. Pettigrew, 8 Cir., 169 F. 335; Shaver v. Heller & Merz Co., 8 Cir., 108 F. 821, 65 L.R.A. 878; Knights of the Ku Klux Klann v. Strayer, 3 Cir., 34 F.2d 432; Chute v. Wisconsin Chemical Co., C.C., 185 F. 115.
In the instant case, the witness Friday is not a party to this litigation. If there was any misconduct on the part of counsel of the plaintiff in having in his possession a copy of Friday's income-tax return for the year 1933, that is not a matter which affects the merits of this litigation in any way. The transaction did not occur until the instant case was on trial, and had, and could have no effect upon the cause of action in which the plaintiff was suing. The income-tax return was not offered in evidence in this case. The plaintiff called Friday as a witness, and of course he would be bound by his answers. There is no reason at all for barring this action on account of an occurrence with reference to the examination of the witness Friday as to the alleged copy of his income-tax return for the year 1933.
On the whole case, therefore, we conclude that the plaintiff was entitled to have assigned to it the inventions, patents, and applications involved.
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