Petitioners Brief — Edwards v. Bingham Pump Co.

In the

Supreme Court of the United States.

OCTOBER TERM, 1941.

No.

LEONARD L. EDWARDS,

Petitioner,

v.

BINGHAM PUMP COMPANY, Ine., A Corporation,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE

NINTH CIRCUIT.

BRIEF FOR PETITIONER

IN SUPPORT OF PETITION FOR WRIT OF CERTIORARL

This Petition is brought to review a decision of the Cir-

cuit Court of Appeals for the Ninth Cireuit in a patent in-

fringement suit. The decision, written by Judge Haney,

and reported in 118 F. (2d) 338 (R. p. 786), reversed the

decision of the District Court holding the patent valid and

infringed, on respondent’s appeal from the final decree

after accounting, despite respondent’s failure to appeal

from the interlocutory decree after final hearing and before

accounting, as respondent could have done until Tit. 28

U.S.C. Sees. 227 and 227a, and despite respondent’s failure

to except to the Master’s findings as to validity of the pat-

14

ent. The Court of Appeals held the patent invalid and dis-

missed the bill.

A sufficient statement of the case, we believe, appears in

the Petition, under Summary and Short Statement of the

Matter Involved.

JURISDICTION.

The date of the judgment to be reviewed is the date of

the judgment of the Cirenit Court of Appeals denying peti-

tioner’s petition for rehearing, May 18, 1941 (R. p. 794).

The statute giving jurisdiction is See. 240a of the Judicial

Code, Tit. 28 U.S.C. See. 347, as amended by the Act of

Feb. 13, 1925. Jurisdiction of patent infringement suits is

sustained in Simmons v. Grier, 258 U.S. 82.

SPECIFICATION OF ERRORS.

1. The Cireuit Court of Appeals erred in considering

the questions of validity and infringement of the patent on

defendant’s appeal from the final decree after accounting,

these questions having been waived by respondent’s failure

to appeal from the interlocutory decree after final hearing

and before accounting. )

2. The Circuit Court of Appeals erred in not holding

that it had no jurisdiction to consider the questions of va-

lidity and infringement of the patent, by reason of respond-

ent’s failure to appeal from the interlocutory decree grant-

ing the injunction and accounting after final hearing.

3. The Cireuit Court of Appeals erred in holding that

it was not precluded from considering the question of va-

lidity of the patent because of respondent’s failure to ex-

cept to the Master’s findings as to validity.

4. The Cireuit Court of Appeals erred in reversing and

in not affirming the District Court as to validity and in-

fringement of the patent.

15

SUMMARY OF ARGUMENT.

The argument is summarized in the Petition, in the Rea-

sons Relied on for the Allowance of the Writ, page 9.

ARGUMENT.

A. THE EFFECT OF FAILURE TO APPEAL FROM THE IN-

TERLOCUTORY DECREE (FINAL EXCEPT FOR ACCOUNTING).

As to this, the Court of Appeals, by Judge Haney

(Opinion R. pp. 789-790) said:

‘With respect to the suggestion that the question

as to the validity of the patent is not open because of a

failure to appeal from the interlocutory decree as per-

mitted by 28 USCA See. 227a, we think the same rule

is applicable, to that section as is applicable to See. 227,

and that therefore appellant was not required to ap-

peal from the interlocutory decree. Victor Talking

Mach. Co. v. George, 3 Cir., 105 F. (2d) 697, 699.”’

Point 1. The Court of Appeals has Construed Title 28

U.S.C. Secs. 227 and 227a in a Manner Contrary

to the Express Intent of Congress, and as to Defeat

the Purpose of Congress in Permitting Appeals

from Interlocutory Decrees in Specified Instances,

and from Decrees which are Final Except for

Accounting.

See. 227. The intent and purpose of Congress in permit-

ting appeals from interlocutory decrees granting injune-

tions in Title 28 U.S.C. See. 227 was to prevent the great

delay and expense to the parties of unnecessary accountings,

if the Court of Appeals should find the plaintiff’s bill with-

out merit.

Prior to the establishment of the Cireuit Courts of Ap-

peal in 1891, this Court had no jurisdiction to entertain an

appeal from an interlocutory decree, even after final hear-

16

ing, as in a patent case, when an accounting of damages

and profits was ordered.* Appeals could be taken only

from final decrees,** after accounting.

The result was a great hardship to the defendant against

whom an erroneous decree was rendered in the Circuit

Court, in that he was put to the needless expenditure of a

prolonged accounting, as well as being kept under injune-

tion, before the Supreme Court could reverse the Circuit

Court on appeal from the final decree after accounting.***

Congress endeavored to remedy this situation in the Act

of March 3, 1891, c. 517, 26 Stat. 828, establishing the Cir-

cuit Courts of Appeals, in See. 7 thereof, which permitted

an appeal from an interlocutory deeree ‘ granting or con-

tinuing’ an injunction, if taken within 30 days from the

entry of the decree.

Thus the appeal, with complete review on the merits, was

permitted before the accounting, instead of after. The ac-

counting (necessary to a final decree) was eliminated as a pre-

requisite to the appeal and complete review on the merits—

but otherwise the situation was unchanged. There still had

been a complete trial and final hearing in the District Court;

the decree entered was in fact final, except for accounting

(although still “interlocutory”, because the accounting re-

mained). But, the appeal on the merits was merely advanced

—to eliminate a useless accounting—if the Court of Appeals

* Barnard v. Gibson, 7 How. 650 (1849).

Humiston v. Stainthorp, 2 Wall. 106 (1864).

Keystone Iron Company v. Martin, 132 U.S. 91 (1889).

McGourkey v. Toledo & Ohio Railway Co., 146 U.S. 586 at 545

(1892).

Smith v. Vulcan Iron Works, 165 U.S. 518 at 524 (1896).

** The Judiciary Act of 1879, Act of Sept. 24, 1879, C. 20, Secs. 18, 22;

1 Stat. 81, 84.

Act of March, 1803, C. 40, 2 Stat, 244.

Rev. Stats. Secs. 691, 692, 699, 701.

*** An example of this situation is Clark Thread Company V. Willi-

mantic Linen Co., 140 U.S. 481, 482 (1890) where the interlocutory decree

was entered in the Circuit Court in May, 1879, the accounting continued

until June, 1886 when damages of $150,000 were awarded with attendant

large legal expense. The Supreme Court on appeal from the final

decree then reversed the Circuit Court and dismissed the bill, holding the

patent invalid.

17

should not sustain validity or infringement of the patent.

Two opportunities for appeal on the merits, before and after

the accounting, were not intended to be provided—as the

Court of Appeals herein has ruled.

The purpose of Section 7 was thus stated by Mr. Justice

Gray in Smith v. Vulcan Iron Works, 165 U.S. 518 at page

529:

“The manifest intent of this provision, read in the

light of the previous practice in the courts of the United

States, contrasted with the practice in courts of equity

of the highest authority elsewhere, appears to this

Court to have been, not only to permit the defendant

to obtain immediate relief from an injunction, the con-

tinuance of which throughout the progress of the cause

might seriously affect his interests; but also to save

both parties from the expense of further litigation, should

the appellate court be of opinion that the plaintiff was not

entitled to an injunction because his bill had no equity to

support it.”

Appellant’s brief in Richmond v. Atwood, printed in 52

F. 10 at pages 15-16 (C.C.A. 1, 1892), thus states the situa-

tion:

‘*No compensation could ever be awarded to the de-

fendant in the above ease (Clark Thread Co. v. William-

antic Linen Co., 140 U.S. 481) for being unjustly de-

prived by injunction of the use of a valuable construe-

tion for seven years, nor could any of the large sums

expended in useless fees during the accounting be re-

covered, This hardship has long been a matter of com-

plaint among the members of the bar who practice in

patent cases; and it was a cause of general satisfac-

tion that congress, in section 7 of this act, had at-

tempted, as was supposed by the bar, to remedy this

hardship by allowing an appeal to be taken at once

18

from the interlocutory decree granting the injunction.

We submit that there can be little doubt of the inten-

tion of congress. The evil complained of was the great

delay of appeals during the accounting before the

master ... Congress certainly intended to provide

that the action of a circuit court in granting an injunc-

tion at final hearing may be reviewed by the appellate

court before the long and expensive process of taking

accounts before the master is completed, as ts the estab-

lished practice of the English court of chancery and

many other equity courts.”’

See also Judge Aldrich’s statement in the same case, 52

F. 10 at page 22.

The very purpose of Congress in permitting appeals from

interlocutory decrees in the instances now specified in Tit.

28 U.S.C. Sec. 227 is defeated, however, if the construction

placed upon the statute by the Circuit Court of Appeals

herein is permitted. The present case is a grievous illustra-

tion of it. Here respondent could have appealed within 30

days from the interlocutory decree, entered after final hear-

ing, granting the injunction and accounting, and secured a

complete review on the merits in the Court of Appeals. But

it failed to appeal. Petitioner, of course, could not appeal

from the favorable decree. Respondent thus compelled

petitioner to proceed with the accounting, at a cost of $3250

to petitioner—an expense which is wholly wasted and a

great hardship to petitioner if respondent can now question

the validity and infringement of the patent, on appeal from

the final decree after accounting. By failing to appeal from

the interlocutory decree, respondent should be held to have

waived his right to be heard on the questions of validity

and infringement, in accordance with settled principles of

appellate procedure. Merely by failing to appeal from the

interlocutory decree, a defendant compels the same unneces-

sary accounting as he did prior to 1891, when he could not

19

appeal, except from the final decree. Congress remedied

that situation by providing the opportunity to appeal. It

remains for the Courts now to give effect to the intent of

Congress in the situation where the defendant, who fails to

appeal, causes the same unnecessary accounting.

See. 227a. By various amendments to Section 227, either

party could appeal from interlocutory decrees granting

or denying an injunction, and fragmentary appeals could

be prevented in all situations—except where the patent

had expired pending suit, and hence no injunction could

be granted. To remedy this situation, Title 28, U.S.C. See.

227a was enacted in 1927.

The intent of Congress in passing this legislation is

clearly shown in Senate Report 1319, 69th Congress, 2d

Sess. (accompanying Senate Bill 4957, which became Title

28, U.S.C. See. 227a), which states in part:

**Under the present statutes where an equity suit for

infringement of letters patent results in a decree for

the plaintiff, if the patent at the time of entry of the

deeree is still alive, the court orders an injunction to

issue to restrain further infringement, and refers the

cause to a Master to ascertain plaintiff’s damages and

defendant’s profits. Upon the entry of such a decree

an appeal from the Order granting the injunction may

be taken immediately and it is the general practice to

suspend all proceedings under the accounting until the

court of appeals has determined the questions of valid-

ity of the patent and infringement. If the court holds

against the plaintiff on either of those questions, it

reverses the decree of the lower court, and there is, of

course, no accounting.

If the patent expires before the entry of the decree

is ordered, there can be under the present statutes, no

appeal until after the accounting is completed and a

final decree is entered. If then on appeal, the court

20

of appeals determines that the patent is invalid, or is

not infringed, the whole cxpense of the accounting is

wasted.

This bill . . . has been prepared for the purpose of

permitting an appeal to be taken immediately in those

cases where the patent has expired before the decree

is entered in the trial court.”’

See also:

House Report 1890 (69th Congress, Second Session)

reporting corresponding House Bill 11840.

Brick v. A. I. Namm & Sons, 21 F. (2d) 179 at 180

(D.C.E.D. New York, 1927).

The language of Section 227a is broad enough, however, to

permit any defendant, as here, to appeal from the decree

(final except for the accounting) even though the patent has

not expired and an injunction is granted.

The defendant, who fails to appeal in such a situation

and compels the plaintiff to proceed with the accounting,

defeats the purpose of Sec. 227a as well as See. 227.

Point 2. The Decision of the Court of Appeals Is In Con-

flict with the Decision of This Court in Ensten v.

Simon, Ascher & Co., 282 U.S. 445 (1930) in an

Analogous Situation.

In this case, a patent infringement suit, the District Court

had entered an interlocutory deeree after final hearing hold-

ing certain claims valid and infringed and another claim

invalid, and ordering an injunction and accounting. The de-

fendant appealed from the interlocutory decree, but the

plaintiff, who could have done so under Title 28, U.S.C. See.

927 failed to appeal. The Court of Appeals approved the

decree so far as challenged. The plaintiff failed to disclaim

the invalid claim until after the accounting, and the validity

of the patent was then challenged for unreasonable neglect |

or delay to enter a disclaimer under the disclaimer statute

21

(Title 35, U.S.C. Sees. 65, 71). The plaintiff argued that

Title 28, U.S.C. Sec. 227 gave it the right or option to await

the final decree after accounting before appealing or dis-

claiming. This Court rejected the argument and said (by

Mr. Justice McReynolds, pp. 457-8) :

“*Certainly, in this case where an appeal was taken

by the defendants, it would have entailed no unreason-

able hardship upon the patent owner promptly to have

submitted the legality of the rejected claim for deter-

mination by the appellate court. The route to that end

was obvious, easy, inexpensive. He deliberately failed

to defend his assertion of right by appealing. He has

been guilty of unreasonable delay and has not brought

himself within the beneficient provisions of the stat-

ute.”’

See to the same effect:

Ensten v. Rich-Sampliner Co., 13 Fed. (2d) 132,

(D.C.N.D. Ohio E.D. 1926), reversed on another

point 19 Fed. (2d) 66 (C.C.A. 6, 1927).

In other words, the plaintiff’s alleged option of two

opportunities to appeal on the merits was not permitted

to conflict with the policy of the disclaimer statute. By

failing to appeal from the interlocutory decree, the plain-

tiff lost the benefits of the disclaimer statutes. By the

same token, the respondent here, by failing to appeal from

the interlocutory decree, and putting petitioner to the ex-

pense of a needless accounting, has lost and waived the

benefits of an appeal on the merits and the right to be

heard on the questions of validity and infringement of

the patent.

22

Point 3. The Decision of the Court of Appeals Is In Con-

flict with a Decision of the Circuit Court of Ap-

peals for the Eighth Circuit, and Even with One of

Its Own Previous Decisions Not Overruled.

(a) In the 8th Circuit.

In Austin-Western Machinery Co. v. Disc Grader Co.,

291 Fed. 301 (C.C.A. 8, 1923), the defendant failed to appeal

from the interlocutory decree finding the patent valid and

infringed and ordering an injunction and accounting. After |

the accounting the defendant appealed from the final de-

cree and attempted to raise the point that there had been

no proof of notice of infringement nor of marking ‘‘pat-

ented’? on plaintiff’s devices. The Court of Appeals held

the defendant had waived this point by failing to appeal

from the interlocutory decree entered pursuant to mandate

(the District Court having been previously reversed on the

merits). Judge Johnson said (p. 303) :

‘‘By this long-continued silence appellant waived the |

point; besides, appellant is concluded by the decree of |

the court below entered upon the mandate of this

court. . . . That decree, entered on the 21st day of

February, 1919, appellant has not appealed from.

Appellant has only appealed from the judgment on the |

accounting entered on the 29th day of March, 1922.”

(b) The 9th Circuit.

In O’Nate v. Bahr, 67 F. (2d) 180 (C.C.A. 9, 1933) the |

defendant failed to appeal from the interlocutory decree |

finding the patent valid and infringed and ordering an ac-

counting. On appeal from the final decree the Court of”

Appeals (Judges Wilbur, Sawtelle and Garrecht) refused |

to hear anything but questions arising from the accounting. |

Judge Wilbur said (p. 181):

“The first question of importance which presents |

23

itself upon the question of damages is the effect of the

adjudication in the interlocutory decree that the de-

fendant has infringed the patent. In this connection

it should be stated that the statement of evidence in

the record contains the evidence which was adduced at

the time of the hearing prior to the issuance of the

interlocuto -y decree. This evidence, we think, has no

place in the record, in view of the fact that the inter-

locutory decree was not appealed from, and is conclu-

sive upon the parties.’’

Here is a conflict even within the Circuit. O’Nate v.

Bahr was not referred to in the decision of the Court of

Appeals herein, nor expressly overruled. It was decided by

a different set of Judges (Judges Haney and Stephens)

with the exception of Judge Garrecht.

Point 4. The Decision of the Court of Appeals Construes

Title 28, U.S.C. Secs. 227 and 227a in a Manner

Conflicting with Fundamental and Settled Prin-

ciples of Appellate Procedure.

(a) The Decision is in Conflict with the Settled Rule of Federal

Appellate Practice that a Party Who Fails to Appeal from an

Appealable Decree, or Who Fails to Raise Questions on a

Previous Appeal Which He Could Have Raised, Waives His

Right to be Heard Thereon and Cannot Raise the Same

Questions in Any Subsequent Appeal.

This rule is based on the common law rule that every

man is entitled to his day in court, but that does not mean

two days in the Court of Appeals—the construction the

Court of Appeals has given to Sees. 227 and 227a.

See:

Hill v. Chicago & Evanston Railroad Co., 140 U.S. 52

at 53-55 (1890).

Sutton v. Gulf Smokeless Coal Co., 77 Fed. (2d) 439

at 441 (C.C.A. 4, 1935).

24

United States v. Van Blargen, 60 F. (2d) 874 at

875 (C.C.A. 3, 1932).

Casals v. Fernandez, 40 Fed. (2d) 831 at 832 (C.C.A

1, 1930).

Sun Co. v. Vinton Petroleum Co., 248 Fed. 623 at

625 (C.C.A. 5, 1918).

Guaranty Trust Company v. International Pump Co.,

242 Fed. 920 at 921 (C.C.A. 2, 1917).

Quinton v. Neville, 154 Fed. 482 at 454 (C.C.A. 8,

1907).

Burns v. Cooper, 153 Fed. 148 at 151 (C.C.A. 8,

1907).

Chase v. Driver, 92 Fed. 780 (C.C.A. 8, 1899).

Congress, in permitting appeals from interlocutory de-

crees in certain instances and decrees which are final except

for accounting, intended to avoid the expense of unneces-

sary accountings, not to give a defendant an option of two

appeals on the merits. The Appeal Statutes should not be

construed contrary to this settled rule.

(b) The Decision is in Conflict with the Settled Rule of Federal

Appellate Practice That Where Separate Appeals Are Per-

mitted in Various Stages of a Litigation, Questions Decided

on the First Appeal (or Which Could Have Been Decided)

Will Not Be Re-Examined on the Second Appeal. The Sec-

ond Appeal Brings Up Nothing but the Proceedings Subse-

quent to the Mandate on the First Appeal.

See for instance:

Illinois v. Illinois Central Railroad Co., 184 U.S. 77

at 91-93 (1901) and cases cited therein.

United States v. Camou, 184 U.S. 572, 575 (1901).

In re Potts, 166 U.S. 263, 267 (1896).

Smith v. Vulcan Iron Works, 165 U.S. 518 at 525-

526 (1896).

In re Sanford Fork & Tool Co., 160 U.S. 247 at 255

(1895).

25

Roberts v. Cooper, 20 How. 467 at 481 (1857).

United States v. Bollman, 81 F. (2d) 1009 at 1010

(C.C.A. 8, 1936).

Keeler v. Fred T. Ley & Co., 65 F. (2d) 499 at 501

(C.C.A. 1, 1933).

Turner v. Kirkwood, 62 F. (2d) 256 (C.C.A. 10,

1932).

Bissell Carpet Sweeper Co. v. Goshen Sweeper Co.,

72 F. 545, 555 (C.C.A. 6, 1896).

Gregory v. Pike, 77 Fed. 241 (C.C.A. 1, 1896).

°. Corpus Juris Secundum, See. 1830 (p. 1286).

The Court of Appeals herein has construed Title 28,

U.S.C. Sees. 227 and 227a contrary to this settled principle.

Congress did not intend to abrogate this fundamental rule

by permitting appeals from certain interlocutory and final

decrees in Sections 227 and 227a.

(c) The Decision is in Conflict with the Settled Rule of Federal

Appellate Practice that Fragmentary or Piecemeal Appeals

in the Same Litigation Raising Different Points Successively

in Different Appeals on the Same Record Will Not be

Permitted.

This rule is fundamental. It was for this reason that

originally appeals could be had only from final decrees.

It was not the intention of Congress to weaken or to make

exceptions to this rule in any way, in permitting appeals

from an interlocutory decree under See. 227. The Court of

Appeals herein should have construed the statute in a

manner to prevent conflict with this fundamental principle.

In McLish v. Roff, 141 U.S. 661 (1891), for instance, this

Court construed an appeal statute to avoid conflict with

this fundamental rule. There Mr. Justice Lamar said (p.

665) :

“From the very foundation of our judicial system

the object and policy of the acts of Congress in rela-

tion to appeals and writs of error (with the single

26

exception of a provision in the act of 1875 in relation

to cases of removal, which was repealed by the act of

1887), have been to save the expense and delays of

repeated appeals in the same suit, and to have the

whole case and cvery matter in controversy im it

decided in « single appeal. Forgay v. Conrad, 6 How.

901, 204. The construction contended for would render

the act under consideration inconsistent with this long

established object and policy. More than this, i

would defeat the very object for which that act was

passed.’’

Additional eases are:

Heike v. United States, 217 U.S. 423, 429.

Forgay v. Conrad, 6 How. 201 at 206 (1848).

Arnold vy. United States, 263 U.S. 427 (1923).

Collins v. Miller, 252 U.S. 364-370 (1919).

Rexford v. Brunswick, Balke Company, 228 U.S. 339

at 346 (1912).

Covington v. Covington First National Bank, 185

U.S. 270 at 277 (1901).

Southern Railway Company v. Postal Telegraph

Company, 179 U.S. 641 at 644 (1900).

Cole v. Rustgard, 68 F. (2d) 316 (C.C.A. 9, 1933).

Wright v. Taft-Peirce Mfg. Co., 287 Fed. 131 (C.C.A.

1, 1923).

Satterlee v. Harris, 60 F. (2d) 490 at 491 (C.C.A. 10,

1932).

The decision of the Circuit Court of Appeals herein, if

permitted to become settled law, will promote fragmentary

or piecemeal appeals rather than prevent them. This is

particularly shown by those cases where the decree in the

District Court is split, and in favor of both plaintiff and

defendant, in both granting and refusing an injunction, as

where certain claims of patent are held invalid, and others —

27

valid and infringed. Under Tit. 28, U.S.C. See. 227 as it

now reads, both parties may appeal from the interlocutory

decree before accounting. But if the decision of the Court

of Appeals herein becomes law, if only one party appeals

from the interlocutory decree, he may have the merits

considered by the Court of Appeals. The merits of appel-

lee’s case, not appealed, are not considered.* If plaintiff’s

claim is sustained, the accounting proceeds. Thereatter the

other party may appeal from the final decree after ac-

counting, and raise the same questions as to the merits

he might have raised had he also appealed. The result is

two appeals on the merits in the same case before it ean

be finally disposed of—the very fragmentary or piecemeal

appeals the Courts ordinarily will not permit.

Cases permitting this are:

Stromberg Motor Devices Co. v. Arnson, 239 Fed.

891 (C.C.A. 2, 1917—suit for infringement of two

patents).

Groblewski v. John Chmicell Co., 264 Fed. 325 (C.C.A.

1, 1919—suit for infringement of four trademarks

and unfair competition).

Kelsey Wheel Co. v. Universal Rim Co., 296 Fed. 616

(C.C.A. 6, 1924—suit for infringement of two pat-

ents).

Draper Corp. v. Stafford Co., 255 Fed. 554 (C.C.A.

1, 1918—suit for infringement of a patent—two

claims held valid, three claims invalid).

These cases present a ‘‘much debated and troublesome

question.’’** This evil is entirely avoided, if the party fail-

* Examples are:

— v. lodent Chemical Company, 41 F. (2d) 637 at 638 (C.C.A. 3,

Ward Baking Co. v. Weber Bros., 230 Fed. 142 (C.C.A,. 8, 1916).

Ensten v. Simon, Ascher & Co., 282 U.S. 445, at 448 (1930).

** Denison C. J. in Kelsey Wheel Co. v. Universal Rim Co., 296 Fed.

616 at 619 (C.C.A. 6, 1924).

28

ing to appeal from the interlocutory decree after final hear-

ing under Secs. 227 and 227a be held to have waived his

right to be heard on the merits of the matters deeided by

such interlocutory decree. There should be but one appeal

on the merits in the Court of Appeals—exactly as when ap-

peals were permitted only from final decrees. Congress did

not intend to change that fundamental rule, in permitting

appeals from interlocutory decrees before accounting. f

The Rules of Civil Procedure (Rules 13 and 18) now per- |

mit and require each party to state as many claims or |

counterclaims as he may have against the opposing party—

to enable the District Court to decide all controversies be-

tween the parties at one trial, so far as feasible. By the

same token, the merits of all controversies between the |

parties should also be heard in one hearing in the Court of |

Appeals as well, and not in fragmentary and piecemeal ap-

peals. The decision of the Court of Appeals herein, if it

becomes law, will prevent this.

The number of such split decrees in the District Courts

will necessarily increase under the enlarged scope of the

new Rules of Civil Procedure. Fragmentary appeals there-

from may well be expected to overburden the dockets of the

Circuit Courts of Appeal, now already overcrowded in sev-

eral instances,* if the decision of the Court of Appeals

herein is not reversed by this Court.

—

~

—_—

B. THE EFFECT OF FAILURE TO EXCEPT TO THE

MASTER’S REPORT AS TO VALIDITY.

As to this, the Court said (R. p. 790):

‘* Appellee contends that since appellant failed to ex-

cept to the master’s findings that the patent was not

anticipated, or wanting in novelty and was valid, such

findings are now conclusive. Appellant contends that

* The Court of Appeals for the Sixth Circuit is already nearly two |

years behind in its hearing of cases after docketing. "

a

29

the findings are really conclusions of law and excep-

tions thereto are unnecessary. This court holds to the

contrary. Reinharts, Inc. v. Caterpillar Tractor Co.,

9 Cir. 85 F. (2d) 628, 630, cert. den. 302 U.S. 694. How-

ever, pursuant to Federal Rules of Civil Procedure,

Rule 52(b) ‘the question of the sufficiency of the evi-

dence to support the findings may thereafter be raised

whether or not the party raising the question has made

in the district court an objection to such findings’. We

think such question may be raised here.”’

The Court of Appeals in so ruling is so clearly wrong

and has so far departed from the accepted and usual course

of judicial proceedings as to require the exercise of this

Court’s power of supervision, we respectfully submit.

It was, of course, settled beyond any dispute, prior to

the Rules of Civil Procedure, that a party cannot raise ques-

tions in a Court of Appeals to which he has failed to except

in the Master’s report.

Kquity Rule 66, in effect September 4, 1935, the date of

the Master’s report, expressly provided:

“The master, as soon as his report is ready, shall

return the same into the clerk’s office and the day of

the return shall be entered by the clerk in the Equity

Docket. The parties shall have twenty days from the

time of the filing of the report to file exceptions thereto,

and if no exceptions are within that period filed by

either party, the report shall stand confirmed.’’

See, for instance:

Underwood Typewriter Co. v. E. C. Stearns & Co.,

227 F. 74 at 83 (C.C.A. 2, 1915).

Topliff v. Topliff, 145 U.S. 156 at 173 (1891).

Burns v. Rosenstein, 135 U.S. 449 at 455-6 (1889).

Tennessee Publishing Co. v. Carpenter, 100 F. (2d)

728, 732 (C.C.A. 6, 1938).

“inte eRe ba REO EEC OSD LRAT CRE

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AS

rae

oS te ah i ae

SS.

SRE eS ye

30

Savage v. Monarch Royalty Co., 64 F. (2d) 650 at

651 (C.C.A. 10, 1933).

Cromwell v. Skinner, 62 F. (2d) 432 at 485 (C.C.A.

10, 1933).

Evans v. Crown Gas & Oil Co., 245 F. 933 (C.C.A,

3, 1917).

The Court of Appeals did not question this previously

required procedure in equity, but held that Rule 52b of the

Rules of Civil Procedure had intervened to relieve respond-

ent from the necessity of excepting the Master’s report as

to validity. But the Rules of Civil Procedure did not be-

come effective until September 16, 1938—three years after

Respondent failed to file the exceptions required by the then

existing Equity Rules! The Rules of Civil Procedure have

no retroactive effect. Under Rule 86 they were to

‘‘govern all proceedings in actions brought after they

take effect and also all further proceedings in actions

then pending.”’

Point 1. The Decision of the Court of Appeals in Giving

the Rules of Civil Procedure a Retroactive Effect

of Three Years Is In Conflict with Previous Deci-

sions of That Court and of Other Circuit Courts

of Appeals.

In Hill v. Ohio Casualty Ins. Co., 104 F. (2d) 695, (C.C.A.

6, 1939), an action at law tried without a jury to recover

upon an insurance policy, the plaintiff failed to request any

special findings of fact or conclusions of law. The only

question was whether the intervening Rules of Civil Pro-

cedure (Rule 52) relieved the plaintiff from the necessity

of so doing. The Court said (p. 696) :

‘‘The difficulty is that as applicable to this case the rule

was not effective. The action was brought on January

23, 1937, or more than nineteen months before the effec-

tive date...

31

‘*Appellant’s case was not pending in the District

Court on September 16, 1938. It had long since been

terminated there, being dismissed on May 31, 1937.

The appeal was allowed and the bill of exceptions was

filed on July 23, 1937, and the transcript was filed in

this court on September 21 following.’’

In Nielson v. Utah Construction Co., 104 F. (2d) 887

(C.C.A. 9, 1939), the same Judges made a ruling contrary

to their decision herein as to the retroactive effect of the

Rules of Civil Procedure, in a suit in equity to determine

water rights. The Court of Appeals affirmed the District

Court in dismissing an amended petition, which joined de-

fendant’s successor in title, for lack of joint liability, under

Equity Rule 26—despite the fact that such joinder was then

permissible under Rule 18 of the Rules of Civil Procedure,

(p. 892).

As to the District Court’s action in transferring the case

from equity to the law side, although the Rules of Civil

Procedure in the meantime had abolished the distinction

between law and equity, the Court (by Judge Garrecht) said

(p. 892):

‘‘The order of the Court at the time it was entered

(March 10, 1938) conformed to the rules then in force

and should not now be abrogated.’’

The same Court, composed of the same judges, has thus

ruled oppositely on the same point in two different eases!

In Leach v. Ross Heater & Mfg. Co., 104 F. (2d) 88

(C.C.A. 2, 1939), a suit for patent infringement, the plain-

tiff moved to voluntarily dismiss prior to September 16,

1938, but the decision thereon was not rendered until later.

Judge Paterson said (p. 90):

**We are of opinion that the motion to dismiss was

governed by the practice in equity prevailing when the

32

motion was argued and submitted for decision. Rule

86 of the present rules provides:

* * * * * *

‘“The effective date for the new rules was September

16, 1938. As to actions pending when the rules took

effect, only ‘further proceedings’ in an action are

governed by the new rules. The motion to dismiss, a

motion made, argued and submitted for decision in

August, 1938, was a past proceeding on September 16,

1938, not a further proceeding. See Weber v. Hartzell,

8 Cir., 230 F. 965; Lyon v. Pennsylvania R. Co., 119

Mise. 380, 196 N.Y.S. 562.”’

In Schlaefer v. Schlaefer, 112 F. (2d) 177 at 181-182,

(C.A.D.C. 1940) a proceeding for sequestration of prop-

erty, the Court held that jurisdiction acquired over the de-

fendant by acts constituting a general appearance, made

prior to September 16, 1938, was not defeated because such

acts could not constitute a general appearance under the

Rules of Civil Procedure—which had no retroactive effect.

To the same effect are:

City of El Paso v. West, 104 F. (2d) 96 at 97 (C.C.A.

5, 1939).

Taylor v. Merrill, 104 F. (2d) 710 at 712 (C.C.A. 9,

1939).

George Allison & Co. v. I. C. C., 107 F. (2d) 180 at

181 (C.A.D.C. 1939).

Tighe v. Maryland Casualty Co., 99 F. (2d) 727 at

728 (C.C.A. 9, 1938).

The Act* authorizing the promulgation of the Rules of

Civil Procedure further expressly provided that they

‘‘shall neither abridge, enlarge, nor modify the sub-

stantive rights of any litigant.”’

— of June 19, 1934, c. 651, Sec. 1; 48 Stat. 1064; 28 U.S.C. Sec.

723b.

33

The petitioner here, by respondent’s failure to except to

the Master’s report in Sept., 1935, acquired the substantive

right that respondent could not further question the validity

of the patent. This right has been abridged by the deci-

sion of the Court of Appeals herein, in violation of the

statute authorizing the Rules of Civil Procedure.

CONCLUSION.

We respectfully submit the Petition for Writ of Cer-

tiorari should be granted, because:

1. The public interest in the avoidance of unnecessary

accountings, and the great expense and waste caused there-

by, and of fragmentary and piecemeal appeals, which

already overburden the dockets of the Circuit Courts of

Appeal, urgently requires a decision by this Court, con-

struing Title 28, U.S.C. Sees. 227 and 227a, and determining

the effect of a failure to appeal from an interlocutory de-

cree granting an injunction after final hearing, and which

is final except for accounting. This important question,

although frequently arising and resulting in conflicting

decisions, has never been, but should be, expressly decided

by this Court.

2. The decision of the Court of Appeals herein as to re-

spondent’s failure to except to the Master’s Report on

validity of the patent, is contrary to and in conflict with the

decisions of that Court and other Circuit Courts of Appeal,

and so far a departure from the accepted and usual course

of judicial proceedings, as to plainly require the exercise

of the Court’s powers of supervision.

3. If respect for the law and the courts is to be main-

tained, the conduct of judicial proceedings by adherence to

the established rules of procedure, and the decision of

cases according to applicable law, is essential. The pres-

ent case, we submit, is a flagrant instance wherein a court

has ignored the established rules of procedure, the set-

34

tled rules of statutory construction, including the intent

of Congress, and the previous decisions of this and other

Courts, to reach a desired—but, under the circumstances,

an improper—result, because the question was not before

the Court; and it clearly calls for the exercise of this

Court’s powers of supervision.

Wuenerorg, it is prayed that the Court grant the Peti-

tion for Writ of Certiorari to the Cireuit Court of Appeals

for the Ninth Circuit herein.

Respectfully submitted,

GEORGE P. DIKE,

CEDRIC W. PORTER.

Joun F. McCartuy,

of Counsel.

August 6, 1941.