252 F. 443 | 6th Cir. | 1918
On July 30, 1913, appellee, claiming to be the assignee of the Lake Shore Film & Supply Company, brought suit at law against appellant in the court below for treble damages ($303,000), alleged to have accrued to the Lake Shore Company under
October 1, 1917, appellant filed a second bill in equity in the court below to permanently enjoin the prosecution of the pending suit at law, as well as the institution and maintenance of further suits for the same cause of action. The grounds on which the right to relief is based are: (1) That the suit at law is champertous, in that the sole consideration for the assignment from the Rake Shore Company to appellee was the discharge of the latter’s claim for legal services to the assignor of the alleged value of $5,000, and his agreement to render further legal services to his assignor if the same should be deemed necessary, the assignment being taken (as alleged) with knowledge that the assignor was unable to and would not pay or advance any of the costs and expenses of the proposed suit, that appellee would be obliged to make large advances of that nature, and in the belief that at least $75,000 damages could be proven in the action, that appellee’s acts were in violation, of both the statutes and common law of Ohio, forbidding the purchase of a claim by an attorney at law for the purpose of suit thereon, and that the claim in suit was thus not assignable to plaintiff; (2) the later institution by appellee (in January, 1917) of an action at law in the District Court of the United States for the Southern District of New York against the Motion Picture Patents Company and others (not including appellant) to recover $750,000 as treble damages for the same alleged violation of the Anti-Trust Act as involved in the suit at law pending in the court below, and the trial of the cause in the District Court in New York under the defense of champerty there presented, resulting in verdict and judgment (Tune 14, 1917) in favor of defendants therein and against appell'ee (243 Fed. 277), this judgment being alleged (through an asserted privity between appellant and the defendants in the New York suit) to work an equitable estoppel against the further prosecution of the action at law below;
From this latter decree of dismissal this appeal is taken. We think t the District Court clearly right in dismissing the bill as against the .grounds of jurisdiction specifically relied upon below.
3. The asserted effect of the New York judgment as an adjudication in favor of appellant here rests, in part, at least, upon an alleged privity between appellant and the Motion Picture Patents Company, the defendant in the New York suit, resulting from the alleged fact that appellant was “organized and controlled by said Patents Company and said licensed manufacturers,”
■We are referred to no' pertinent authorities which, to our minds, recognize any distinction in this regard between law and equity. The general principle that a question distinctly put in issue as a ground of recovery cannot be disputed in a subsequent suit between the same parties, or their privies — elaborately discussed in Southern Pacific R. R. Co. v. United States, 168 U. S. 1, 48, 18 Sup. Ct. 18, 42 L. Ed. 355, and following — is equally applicable to suits at law and in equity. The fact that one against whom an adjudication is urged was not a party to, or that his privity does not appear of record in, the previous suit does not prevent the application of the doctrine of res judicata or es-ioppel.
In Hart Steel Co. v. Railroad Supply Co., 244 U. S. 294, 37 Sup. Ct. 506, 61 L. Ed. 1148, the principle of res judicata was applied in the case of two patent infringement suits, -the defendant in one of which was a corporation which manufactured the alleged infringing articles, the other a second corporation whose shares were owned and whose conduct was controlled by the first corporation. In Penfield v. Potts, 126 Fed. 475, 61 C. C. A. 371, this court applied the same principle against defendants in a number of separate suits for infringement of the same patent who, with plaintiff’s knowledge, had joined in and contributed to the.defense in each suit. In Greenwich Ins. Co. v. Friedman, which was a suit at law, this court applied the doctrine of Pen-field v. Potts to the case of insurance companies which had united in making a common defense to actions upon the policies brought severally against them (142 Fed. 944, 74 C. C. A. 114), certiorari denied by the Supreme Court (2CO U. S. 621, 26 Sup. Ct. 758, 50 L. Ed. 624).
In Galion Iron Co. v. Ohio, etc., Culvert Co., 244 Fed. 427, 157 C. C. A. 53, an Ohio case in which a hill in equity was filed by a defendant in five actions at law by different licensees for infringement of the same patent, praying that all be stayed except one to be selected and tried as a test case, this court, in affirming the decree dismissing the bill, said (244 Fed. 428, 157 C. C. A. 53):
“If it bo true that all the licensees had a common interest in all the eass>s, in that each suit is in fact prosecuted for the benefit of all — as Is now claimed -this fact can be developed without difficulty as other facts arc proved in cases at law, and a judgment in one case would become an adjudication in the others.”
So far as appellant’s rights on its own account are concerned it clearly will be protected by a judgment in its favor in the pending action at law in the court below. The case as to these rights is ruled by Insurance Co. v. Bailey and Cable v. Insurance Co., supra. Appellant urges, however, that so long as the assignment from the Rake Shore Company to appellee of the former’s right of action against appellant and its associates is outstanding, it will constitute a well-founded source of anticipated danger to all of appellant’s associates in the as
“A careful examination of the authorities has failed to disclose any case similar in its facts to the ease at bar, and to that extent this application is novel.”
It is enough to say that, in the present juncture, the rights of appellant’s associates, and the danger that such rights will be wrongfully invaded, do not appear such as to demand for their protection the cancellation of the assignment in question. We think it will be time enough to consider their rights when, if ever, the New York judgment becomes a final adjudication against appellant, and when, if ever, that judgment shall be held, in the pending suit at law in the court below, to be an adjudication against appellee’s rights asserted therein, or when, if ever, new circumstances may arise requiring the cancellation of the assignment for the protection of innocent parties.
The decree of the District Court is accordingly affirmed with costs, but without prejudice to the future filing of new bill in equity in case it shall be justified by the contingencies just referred to.
Tlio alleged canse of action assigned to appellee ran against eleven corporations and individuals besides appellant. The New York suit was in form against all these parties except appellant. Among the defendants were included certain individuals alleged to be owners, officers, directors, or representatives of the parties, as well as of appellant. Not all seem to have peon served with process.
The bill in the New York suit includes in the term “licensed manufacturers” all those against whom the alleged cause of action ran ekeept appellant ^nd the Motion Picture Patents Cbmpany.
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