Ross v. City of Ft. Wayne, No. 147

No. 147 | 7th Cir. | Oct 1, 1894

WOODS, Circuit Judge

(after stating tke facts). In Clark v. Wooster, 119 U.S. 322" court="SCOTUS" date_filed="1886-12-06" href="https://app.midpage.ai/document/clark-v-wooster-91756?utm_source=webapp" opinion_id="91756">119 U. S. 322, 7 Sup. Ct. 217, tke suit was upon a patent wkick kad 15 days only to run wken tke bill was filed; no special ground for equitable relief was skown, except tke prayer for an injunction; and tkougk, by tke rules of tke court, only four days’ notice of an application was required, it does not appear tkat an injunction or restraining order was asked for; yet tke jurisdiction was upkeld, tke court saying tkat, “if tke case was one for equitable relief wken tké suit was instituted, tke mere fact tkat tke ground for such relief expired by the expiration of the patent would not take away the jurisdiction, and preclude the court from proceeding to grant the incidental relief which belongs to cases of that sort;” and a number of decisions are cited to show that this has often been done in patent cases. In Beedle v. Bennett, 122 U.S. 71" court="SCOTUS" date_filed="1887-05-23" href="https://app.midpage.ai/document/beedle-v-bennett-91961?utm_source=webapp" opinion_id="91961">122 U. S. 71, 7 Sup. Ct. 1090, where the suit was upon a patent which expired by its own limitation after the filing of the bill and before final decree, it is said that “as the patent was in force at the time the bill was filed, and the complainants were entitled to a preliminary injunction at that time, the jurisdiction of the court is not defeated by the expiration of the patent by lapse of time before final decree.” See, also, American Bell Tel. Co. v. Brown Tel. & Tel. Co., 58 Fed.. 409; American Bell Tel. Co. v. Western Tel. Const. Co., Id. 410. When this suit was commenced, the patent in question had two months and twenty-two days to run. It was therefore clearly within the power of the court to grant a temporary injunction, if not to enter a final decree, before the patent should expire; and though no restraining order was issued, or perhaps could have been after the patent had expired, jurisdiction of the case was not lost on that account.

Other objections to the original bill are urged, which are not tenable, or at least are not now available. A brief consideration of them will be enough.

The city of Ft. Wayne, respondent, is located in Allen county, Ind., but is described in the bill as “located in the county of Vigo;” and upon that ground it is contended that the suit, as begun, was against another party, and that an amendment of the bill was necessary to make it a suit against the respondent. The erroneous statement in respect to the location of the city was simply a matter of misdescription, not affecting or, at most, not determinative of the identity of the party. The fact that Ft. Wayne is in Allen county is probably a matter of judicial cognizance, notwithstanding the averment of the bill; but, to say the least, the respondent, having made a full appearance and pleaded to the merits of the bill, has waived the objection, and also the objection that the original complainant had an adequate remedy at law. Kilbourn v. Sunderland, 130 U.S. 505" court="SCOTUS" date_filed="1889-04-22" href="https://app.midpage.ai/document/kilbourn-v-sunderland-92494?utm_source=webapp" opinion_id="92494">130 U. S. 505, 9 Sup. Ct. 594.

Walker was competent to prosecute the suit in his individual name, either upon the averments of his own bill, which showed him to be the holder of the legal title to the patent, or upon the bill of Boss, which shows that he held the title for the benefit of himself and others, of whom Boss was one, “with full power to maintain suit to recover for infringement, and to take all steps proper and necessary for the protection and enforcement of the rights, legal and equitable, held under said letters patent.”

In Carey v. Brown, 92 U.S. 171" court="SCOTUS" date_filed="1875-12-18" href="https://app.midpage.ai/document/carey-v-brown-89260?utm_source=webapp" opinion_id="89260">92 U. S. 171, it is said:

“The general rule Is that In suits respecting trust property, brought either by or against the trustees, the cestuis que trust, as well as the trastees, are necessary parties. Story, Eq. Pl. § 207. To this rule there arc several exceptions. One of them is that where the suit is brought by the trustee to recover the trust property, or to reduce it to possession, and in no wise affects Ms relation -with his cestnis que trust, it is unnecessary to make the latter parties. Horsley v. Fawcett, 11 Beav. 569, was a case of this kind. The objection taken here was taken there. The master of the rolls said: ‘If the object of the bill were to recover the fund, with a view to its administration by the court, the parties interested must be represented. But it merely seeks to recover the trust moneys, so as to enable the trustee hereafter to distribute them agreeably to the trusts declared. It is therefore unnecessary to bring before the court the parties beneficially interested.’ Such is now the settled rule of equity pleading and practice.”

And in Kerrison v. Stewart, 93 U.S. 155" court="SCOTUS" date_filed="1876-11-13" href="https://app.midpage.ai/document/kerrison-v-stewart-89357?utm_source=webapp" opinion_id="89357">93 U. S. 155, 160:

“It cannot be doubted that under some circumstances a trustee may represent his beneficiaries in all things relating to their common interest in the trust property. He may be invested with such powers and subjected to such obligations that those for whom he holds will be bound by what is done against him, as well as by what is done by him. The difficulty lies in ascertaining whether he occupies such a x>osition, not in determining its effect if he does. If he has been made such a representative, it is well settled that his beneficiaries are not necessary parties to a suit by him against a stranger to enforce the trust (Shaw v. Railroad Co., 5 Gray, 171; Bifield v. Taylor, Beatty, 91; Campbell v. Railroad Co., 1 Woods, 376, Fed. Cas. No. 2,366; Ashton v. Atlantic Bank, 3 Allen, 220); or to one by a stranger against him to defeat it in whole or in part (Rogers v. Rogers, 3 Paige Ch., 379" court="None" date_filed="1831-07-09" href="https://app.midpage.ai/document/rogers-v-rogers-5547980?utm_source=webapp" opinion_id="5547980">3 Paige, 379; Wakeman v. Grover, 4 Paige, 34; Winslow v. Railroad Co., 4 Minn. 317 [Gil. 230]; Campbell v. Watson, 8 Ohio, 500). In such cases the trustee is in court for and on behalf of the beneficiaries; and' they, though not parties, are bound by the judgment, unless it is impeached for fraud or collusion between him and the adverse party.”

See, also, Tilghman v. Proctor, 125 U.S. 136" court="SCOTUS" date_filed="1888-03-19" href="https://app.midpage.ai/document/tilghman-v-proctor-92181?utm_source=webapp" opinion_id="92181">125 U. S. 136, 8 Sup. Ct. 894; Rude v. Westcott, 130 U.S. 152" court="SCOTUS" date_filed="1889-04-01" href="https://app.midpage.ai/document/rude-v-westcott-92457?utm_source=webapp" opinion_id="92457">130 U. S. 152, 9 Sup. Ct. 463.

Ross, it follows, having succeeded to the title and entire interest of Walker, was properly admitted as complainant, and was entitled to continue the prosecution of the suit, unless, by reason of the expiration of the patent, it was necessary that this suit should abate or be dismissed, and all subsequent remedies be sought in a court of law. Walker, having parted with all interest, and, with the consent of the other parties concerned, having divested himself of any trust in their favor, could not prosecute the suit further, and abatement was inevitable unless a new plaintiff could be substituted. The right to introduce new parties, or to substitute one party for another, in equity, when there has been a change of interest pending the suit, is so well recognized that the books treat not so much of the right as of the method of accomplishing the substitution. It is done either by a supplemental bill, or by an original bill in the nature of a supplemental bill,—the former being applicable properly to those cases where the same parties or the same interests remain before the court, while the latter "is properly applicable when new parties, with new interests arising from events since the institution of the suit, are brought before the court.” Story, Eq. Pl. § 345. If a complainant, suing in his own right, parts with less than his entire interest, or if he is deprived of his entire interest but he is not the sole complainant, the defect in either case may be supplied by means of a supplemental bill. Id. §§ 346-348. But if a sole complainant suing in his own right is deprived of his whole interest, as in the case of bankruptcy, or if be assigns Ms whole interest to another, he is no longer able to proseco te the suit, for want of interest, and the assignee may be made complainant in his stead; but, as the title of the latter may be litigated, the substitution must be accomplished by means of an original bill in the nature of a supplemental bill. Id. § 349; 2 Daniell, Oh. Pl. & Pr. c. 33. The dispute here, however, is not over the general rule. The contention is that, as the patent in this case had expired before Walker’s transfer to Boss, nothing remained which was capable of assignment, except the mere right of action for past infringements; that the patent right was incapable of transfer, since it had ceased to exist; and that Walker had no vested right in the remedy, which he could sell and assign to the present plaintilf. Broadly stated, that means that a complainant in equity may not transfer to another his interest in the subject-matter of the; contest, and confer upon the assignee the right to prosecute the suit to a decree upon the merits, if, by reason of events subsequent to' the bringing of the suit, the controversy has so changed as to be the subject' only of an action at law. The serious consequences of such a restriction upon the right of a complainant to sell his interest in the subject-matter of litigation, and to have the purchaser substituted as complainant, are obvious. In every such instance an assignment by a sole complainant, or by all of the complainants, to a stranger, would be followed necessarily by a dismissal of the suit at the complainant’s costs. If in a federal court, and the jurisdiction dependent on citizenship, the assignee might be compelled to go with his case at law into a state court; and if, pending the suit in equity, the right of action at law should have become barred by the lapse of time, the complainant, whatever his original equities, might as well abandon Ms case as attempt a transfer, which could benefit no one but Ms adversary in the litigation.

bio authority directly in point upon the question has been cited, or has come under onr observation, but an analogous question has been determined in numerous cases where the jurisdiction, dependent originally upon diverse citizenship, has been maintained notwithstanding changed relations of the parties, widen, if existing at. ilie beginning, would have made jurisdiction impossible. A bill of re livor, for instance,may be brought by one who could not have brought (.he original suit. Clarke v. Mathewson, 12 Pet. 164" court="SCOTUS" date_filed="1838-02-19" href="https://app.midpage.ai/document/clarke-v-mathewson-86040?utm_source=webapp" opinion_id="86040">12 Pet. 164. And supplemental or ancillary proceedings, though between parties of whom the court in the first instance could not have taken jurisdiction, art; treated as dependent upon the suits out of which they grew. Freeman v. Howe, 24 How. 450" court="SCOTUS" date_filed="1861-03-14" href="https://app.midpage.ai/document/freeman-v-howe-87425?utm_source=webapp" opinion_id="87425">24 How. 450; Minnesota Co. v. St. Paul Co., 2 Wall. 609" court="SCOTUS" date_filed="1865-03-10" href="https://app.midpage.ai/document/minnesota-co-v-st-paul-co-87676?utm_source=webapp" opinion_id="87676">2 Wall. 609; Krippendorf v. Hyde, 110 U.S. 276" court="SCOTUS" date_filed="1884-01-28" href="https://app.midpage.ai/document/krippendorf-v-hyde-91029?utm_source=webapp" opinion_id="91029">110 U. S. 276, 4 Sup. Ct. 27; Root v. Woolworth, 150 U.S. 401" court="SCOTUS" date_filed="1893-11-27" href="https://app.midpage.ai/document/root-v-woolworth-93714?utm_source=webapp" opinion_id="93714">150 U. S. 401, 14 Sup. Ct. 136. If, in this casi;, after the expiration of >.he patent, Walker had died, it is clear that the suit could have been revived and prosecuted in the name of the legal representative (Clarke v. Mathewson, supra,), or in case of bankruptcy the assignee, by means of a supplemental bill, could have taken the benefit and control of the proceedings; and we think it equally regular, where the complainant has made a voluntary transfer of his title and interest to one who is a stranger to the suit, that the latter shall be admitted into the place of the original complainant. The substitution of Ross as complainant, we think, would have been proper if Walker, besides holding the legal title, had owned the entire beneficial interest in the patent. Ross and the others beneficially interested, upon a full statement of the facts, would have been proper, though not necessary, co-complainants in the original bill. If they had been, and there had been the same transfer of interest which is shown to have occurred, a supplemental bill only would have been necessary in order to dismiss Walker from the record, and to enable the others interested to prosecute the suit; but Walker having brought the suit as if in his own right alone, and having transferred his interest and title to Ross, it was necessary and proper that the latter should come in under an original bill in the nature of a supplemental bill, and having done so he is, in our opinion, entitled to prosecute the action to the end, as if he had begun it. The decree below, therefore, should be reversed, and the order sustaining the demurrer to Ross’ bill set aside, and it is so ordered.