*1 WOOD, S. DISTRICT QUEEN, INC., DAIRY U. JUDGE, et al. Argued February 19-20, April 30,
No. 244. 1962. Decided *2 Egnal argued Michael H. the cause for petitioner. him With on the briefs was D. Newcomb. Wallace argued respondents. Owen J. Ooms the cause for With him on D. Alspach. the briefs was Mark
Mr. Justice Black opinion delivered the the Court. States District for the Eastern United Court Pennsylvania granted peti- District of a motion to strike tioner’s demand for a trial in an action now pending before it on grounds the alternative that either the action “purely equitable” ifor, purely equi- not table, legal whatever issues that were raised were “inci- equitable dental” to in issues, and, right either case, by to trial jury existed.1 The sought then mandamus in the Court of Appeals for the Third Circuit to compel the district to vacate this order. When that court denied this request granted without opinion, we certiorari because the action of the Court Appeals seemed inconsistent with protections already clearly recognized for important constitutional to trial by in jury previous our decisions.2
At the outset, may dispose we of one of grounds upon which the trial in court acted striking the demand for trial by jury based the view that the right —that trial by jury may be lost as legal issues where those issues are characterized as “incidental” equitable issues—for previous our decisions make plain it that no such may applied rule be in the federal courts. In Scott
1 McCullough
Dairy Queen, Inc.,
Supp.
v.
194 F.
2
by legal jury preserved.5 Quite claims must be the con trary, (a) Rule expressly reaffirms that constitutional principle, declaring: “The right by of trial jury de by clared the Seventh Amendment to the Constitution as given by or a statute of the pre United States shall be served the parties to inviolate.” Nonetheless, after the adoption of the Rules, attempts Federal were made indi rectly to right by having undercut that federal courts involving cases both legal claims were filed decide the equitable claim first. The result of procedure those cases which it was followed that issue common to both the and equitable finally claims was by determined party the court and the seeking by trial on the claim was deprived of right that as to these common issues. This procedure finally Theatres, Inc., came before us Beacon v. Westo ver,6 a case like this which, one, arose from the denial of petition for mandamus compel to a district vacate his order striking a by demand for trial jury.
Our decision reversing that case not emphasizes the responsibility of the Federal Appeals Courts of grant mandamus necessary where protect the con- right stitutional trial jury but also limits the open issues determination defining here pro- tection to which is entitled in involving cases both legal and equitable claims. The holding in Bea- *4 con Theatres was that where legal both equitable and presented issues are in a single case, “only under the imperative most circumstances, circumstances which 5 (b) “Subdivision Rule does not disturb the [of 18] doctrine of Neely those cases and expressly [Scott Cates v. but is bot Allen] principles. tomed their This is true because the Federal Rules abolish the distinction between equity, permit law and joinder of legal equitable claims, safeguard and right and to trial of legal Moore, issues.” Practice, 3 Federal 1831-1832. 6359 S.U. 500.
473 the Federal Rules of procedures flexible view right jury- can the anticipate, now we cannot determination through prior issues be lost legal of trial 7 course, applies of holding, claims.” That equitable of legal to characterize judge trial chooses whether the or not.8 equitable issues as “incidental” presented issues cannot as this where there a case such Consequently, circumstances,” “imperative a contention of such even be for legal issues requires any Theatres Beacon demanded be sub- timely properly and a trial of the timeli- being question There jury. mitted to the sole here, of the demand ness or correctness involved now decide is whether the action which we must question legal District contains issues. pending before the Court of a contro- proceeding The District Court arises out petitioner respondent owners versy between QUEEN” regard to a writ- the trademark “DAIRY with licensing ten contract made them December agreed pay $150,000 under which some por- the exclusive to use that trademark certain Pennsylvania.9 pro- The terms of the contract tions 7Id., at 510-511. stronger “It is therefore immaterial that the at bar contains a case equitable present
basis for relief than was in Beacon Theatres. It clearly outweighed if would make no difference cause cause so that the basic issue of the case taken as a whole is equitable. long jury rights As as cause is involved the it teaching Theatres, control. This is the we creates Beacon con Thermo-Stitch, Inc., Processing Corp., strue it.” v. Chemi-Cord F. 2d groups respondents There are two in this case addition formally respondent by who is district reason of the procedural posture McCullough of the case. H. A. and H. F. McCul lough, doing McCullough’s Dairy Queen, partnership business as are the trademark and are entitled under the the owners of contract to Myers, Rydeen, Montgomery, payment for its use. B. F. R. J. M. E. original through H. Dale are the licensees under the S. contract *5 remaining pay- payment initial with the vided for a small all amounts at rate of of ments to be made 50% franchises to deal with on sales and petitioner received that in order to make certain and, the trademark completed specified within a $150,000 payment would be provided further for minimum annual period time, of August In payments regardless petitioner’s receipts. of petitioner a letter respondents wrote had committed “a material that they petitioner claimed by defaulting contract” on the contract’s breach of that termi- payment provisions petitioner and notified petitioner’s nation of the contract and the cancellation of right to use the trademark unless this claimed default immediately.10 petitioner remedied continued to When despite with the trademark the notice of termination, deal brought an respondents action based their view that a had material breach occurred. .contract petitioner rights by assignment. group whom obtained its This latter respondents joined against petitioner grounds in the action on the (1) they responsible peti- that would be to the if trademark owners obligations (2) contract, tioner defaulted on its under the that they royalties assignment are themselves entitled to certain under the arrangement. portion involving Since of the group question latter issues raises no relevant to the to be determined part here which differ from those raised in that involving owners, the trademark the discussion can be restricted to “respondents” the issues raised the trademark owners and as used opinion group. in this will refer to that full text of the letter sent to is as follows: you your pay “This is letter to advise failure to the amounts required your McCullough’s Dairy Queen contract with for the ‘Dairy Queen’ Pennsylvania, for the franchise State as called for in your your assignors, opinion contract with constitutes in our a mate- rial breach of that contract. you completely
“This that unless this material is will advise breach owing, your ‘Dairy satisfied for the amount due and franchise for Queen’ Pennsylvania hereby cancelled. your
“Copies being assignors.” sent of this letter are *6 among alleged, in District Court filed The ... as paying had “ceased petitioner that things, other said “under the contract;” that the default in the required this that $60,000.00;” in . . . excess contract [was] contract; of that a “material breach” default constituted its failure by letter that notified had been petitioner that of a material breach alleged guilty made it to pay in an imme- result if not “cured” would contract not had that the breach contract; cancellation of the diate contesting the can- petitioner but that been cured an author- conduct business as continuing and to cellation after continue such business dealer; that ized infringement an constituted of the contract cancellation financial petitioner’s that respondents’ trademark; foregoing unstable; and that because condition was with irreparable were threatened allegations, respondents remedy at law. they adequate for which had no injury temporary per- for and prayed then both permanent and relief, including: (1) temporary manent petitioner any from future use injunctions restrain an dealing trademark; (2) franchise and the or owing accounting money to determine the exact amount of an by petitioner amount; (3) and a for that and judgment from pending accounting prevent petitioner injunction collecting any money “Dairy Queen” from stores territory.
In its answer to this a num- complaint, petitioner raised including: (1) ber of that had defenses, denial there apparently chiefly been breach of based contract, allegation January its 1955 the had parties agreement modifying original entered into oral written contract by removing provision requiring payments regardless minimum annual of petitioner’s receipts leaving petitioner’s only obligation thus that of turning of all receipts; (2) estop- over its and laches 50% their claim failure to' assert arising respondents’ from pel large expend promptly, permitting thus to use of its development in the money amounts of of the antitrust (3) alleged trademark; violations dealings with in connection with their by respondents laws answer a indorsed the trademark. Petitioner (b) with Rule 38 demand for trial in accordance of the Federal Rules of Civil Procedure.11 petition as set forth its contention,
Petitioner’s its Appeals mandamus to the Court of reiterated *7 complaint Court, briefs before this is that insofar as the money a it a claim which is requests judgment presents unquestionably legal. agree with that contention. We claim respondents’ The most natural construction of the money for a would that it is a claim judgment seem be that are was they entitled to recover whatever owed them under contract purported-termi- the as of the date of its plus damages infringement nation of their trademark since date. Alternatively, complaint that could be the upon construed to set forth a full claim based both of these theories —that a claim that the is, respondents were entitled to recover both the debt due under the contract damages infringement for trademark for the entire alleged period including breach that before the ter- might mination of the contract.12 it possibly Or be con- recovery strued to set forth a claim for completely based on either one of these two is, theories —that a claim
11“Any party may by jury any demand a trial issue triable of right by jury by serving upon parties a the other a demand therefor writing at time after the commencement of the action and not days later pleading than 10 after the service of the last directed to may such issue. pleading Such demand be indorsed party.” given complaint This seems to be the construction passing petitioner’s district on the motion to strike Supp., demand. See 194 F. at 687-688. both period entire for the the contract solely upon
based
on
termination
attempted
after
before
ignored, having been
termination,
that the
theory
charge
solely upon
claim based
or a
consequence,
having
contract,
theory that
on the
infringement
an
a defense to
not be used
breached, could
been
to its termi-
prior
period
for the
action even
infringement
ambiguity
this
resolve
unnecessary to
find it
nation.13 We
it plain
we think
because
respondents’
in the
wholly
is a claim
money judgment
for a
that their claim
is construed.
nature however
legal in its
it
contract,
allegedly due under
on a debt
As an action
of a more tradi-
of an action
to conceive
would be difficult
damages
an action for
character.14 And as
tionally legal
it would
infringement,
charge
of trademark
based
of law.15
cognizance by
court
subject to
be no less
money claim
contention
respondents’
fact that
upon the
primarily
is based
“purely equitable”
rather
“accounting,”
in terms of
complaint is cast
their
But
“damages.”
“debt” or
an action for
in terms of
than
made
cannot be
trial
right to
the constitutional
*8
13
accepted
complaint, though
possible
of the
construction
This last
actually
least
concurring opinion,
seems the
in the
as' the correct one
irrespective
else
of whatever
plain that
likely
it seems
of all. For
$60,000
judgment for the some
sought,
it did seek
the
Certainly, the district
allegedly owing under the contract.
relief, the
“Incidental to this
the ease:
that this was
had no doubt
owing
allegedly due and
$60,000 now
demands the
also
Supp., at 687.
194 F.
contract.”
plaintiffs under the aforesaid
14
complainants
in no
due the
us the debt
“In the case before
contract;
it was the sub
debt
respect
from
other
different
to a
were entitled
the defendants
legal
only, in which
ject
action
of a
Neely,
106, 110.
140 U. S.
Scott v.
jury
Federal courts.”
trial in the
Companies,
134.
6 Wall.
Thompson v. Railroad
See also
15
Hollzer,
464; Bruckman v.
Porter,
2d
154 F.
Cf., g., Arnstein v.
e.
478 pleadings. used the upon the choice of words depend to maintain right to the necessary prerequisite equi- like all other equitable accounting,
suit for
Theatres,
out Beacon
is,
pointed
as we
remedies,
table
remedy at
law.16 Con-
adequate
of an
the absence
a suit on a cause
maintain such
order to
sequently,
is,
plaintiff
as this one
the
cognizable
law,
at
of action
the “accounts between
must be able to show that
only
“complicated nature” that
parties” are of such a
In
satisfactorily unravel
them.17
equity
court of
can
by
to District
Federal
powers given
of the
Courts
view
(b)
appoint
53
masters to
Rule of Civil Procedure
exceptional
in those
cases where the
jury
assist the
complicated
jury adequately
too
for the
issues are
showing
burden of such a
is consider-
alone,18
handle
ably
and it will indeed be a rare case in which
increased
may,
certainly
it can be met.19 But be
as it
16
S.,
Thompson
359 U.
at 506-510. See also
v. Railroad Com
panies,
134, 137;
Neely,
106,
6 Wall.
Scott v.
140
S.
110.
U.
17Kirby
Michigan
Co.,
v. Lake Shore &
Southern R.
120 U. S.
“
this limited inroad
to trial
Even
‘should
”
made,
seldom be
and if at all
when unusual circumstances exist.’
Buy
Co.,
La
Howes Leather
In
U. S.
258. See also
re
Watkins,
not under readily if court, recovery, any, could determine the to had here, theory finally be whether the settled is of contract, infringe- breach of that of trademark ment, or any legal remedy combination of the two. cannot be characterized as inadequate merely because the damages may measure of necessitate look into peti- tioner’s business records.
Nor is the claim “purely equitable” here rendered petitioner. of the interposed by nature defenses to primary charge Petitioner’s defense of breach contract —-that that the is, contract was modified sub- sequent agreement presents question oral a purely legal — having nothing whatever to do with novation, either or suggested the district judge suggested, reformation, as by the respondents goes ques- here. Such defense to the of just what, tion under law, the contract between the respondents petitioner is in an and, action to collect a debt for breach peti- of contract between these parties, has a tioner to have the determine not whether has the contract been breached and the extent damages any if just but also is. what contract conclude
We therefore that the district erred refusing grant petitioner’s demand for a trial on the question factual issues related of whether there has been a breach of Since these contract. issues common with respondents’ are those claim to based, relief is claims involved in the be prior action must determined final court deter- mination respondents’ equitable claims.20 The Court not, course, This does power interfere with the District Court’s grant temporary pending adjudication relief a final on the merits. temporary already granted (see Such relief has been in this ease McCullough Dairy Queen, Inc., 871) part F. 2d the issues before this Court. *10 the error of the district have corrected Appeals should judg- petition for mandamus. by granting the remanded for reversed and the cause
ment is therefore opinion. consistent with this proceedings further remanded. Reversed and result. Mr. concurs Stewart Justice no in the decision part Mr. took Frankfurter Justice of this case. in the consideration no.part
Mr. Justice White took of this case. or decision Douglas Harlan, whom Mr. Justice
Mr. Justice joins, concurring. view, strongly pressed at disposed accept
I am for accounting bar, complaint this seeks rather than contract alleged infringement, trademark as for damages. though complaint this leaves the Even this does not end mally asking relief,* “accounting” sought The fact that an is is inquiry. dispositive not of itself trial issue. To render complaint truly aspect “equitable” it must claim is appear cognizable only that the substantive one equity parties” or that the “accounts between the are “complicated they of such nature” that can be satisfac torily only by Kirby a court of Lake equity. unraveled v. Co., Michigan Shore R. & Southern 120 U. S. 5 Moore, (1951), See Federal Practice It 198-202. is from the face of complaint manifest that the “account ing” sought in is not of variety. this instance either A from jury, proper under instructions could court, readily damages flowing alleged calculate the from this
*Except
damage
dispute
there is
claim
but that the
only equitable relief.
seeks
of law often do
infringement,
just
trademark
as courts
Tilgh
copyright
patent
g.,
cases.
e. Hartell v.
Cf.,
man,
Porter,
464;
154 F. 2d
547, 555;
S.
Arnstein v.
U.
Hollzer,
Bruckman
Consequently what is involved this case joinder prayers more than a one for both *11 circumstances, relief. In under such long principles established, Neely, since Scott v. 140 U. S. deprived cannot be of his consti- “legal” tutional to a trial on the claim contained complaint. in the I judgment
On this basis concur of the Court.