Source: https://supreme.justia.com/cases/federal/us/296/53/
Timestamp: 2019-04-19 08:21:09+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 296 › Chandler & Price Co. v. Brandtjen & Kluge, Inc.
1. On application to intervene in equity, it is the better practice to present the applicant's proposed answer. P. 296 U. S. 56.
2. In a patent infringement suit brought against the user of a machine, the manufacturer of the accused article was permitted to intervene.
It thereupon answered, jointly with the defendant, denying infringement and challenging the plaintiff's patent, and furthermore set up, separately, a counterclaim against the plaintiff for infringement of another patent, owned solely by the intervener. There was no suggestion that the defendant had any interest in the counterclaim, or that the issues tendered by or that might arise out of it could not be adjudged in a separate suit.
(1) That the facts alleged in the petition for intervention were insufficient to show that the intervener was the real party in interest or entitled to intervene as a matter of equitable right. P. 296 U. S. 56.
(2) The counterclaim was rightly dismissed; the intervener is limited to the field of litigation open to the original parties. P. 296 U. S. 57.
(3) Equity Rule 30 does not authorize one given the privilege to intervene as party defendant to set up and enforce against the plaintiff a counterclaim not available to the original defendant and in which that defendant has no interest. P. 296 U. S. 58.
(4) Equity Rule 37, declaring that anyone claiming "an interest in the litigation" may be permitted to assert his right by intervention, means an interest in matters then in controversy between the plaintiff and original defendant; the purpose for which permission to intervene may be given is that the applicant may be put in position to assert in that suit a right of his in respect of something there in dispute between the original parties. P. 296 U. S. 59.
Certiorari, 295 U.S. 724, to review the affirmance of a decree dismissing a counterclaim set up by an intervener in a patent infringement suit.
patent No. 1,363,200 for "Improvements in Automatic Feed and Delivery for Platen Presses," that defendant is using an infringing printing press, and prays injunction and accounting. Before answer by defendant, the Chandler & Price Company applied to the court for leave to intervene as a party defendant. The substance of the facts it alleges in order to show that it has an interest in the litigation (Equity Rule 37) is as follows: petitioner is engaged in manufacturing and selling printing presses. It made and sold to defendant the one of which the bill complains, and intends openly to defend this suit. After it put its machine upon the market, plaintiff threatened to sue users for infringement, and, as a consequence, petitioner's customers required it to give bonds for their protection. Before bringing this suit, plaintiff's counsel wrote defendant, enclosing a copy of plaintiff's patent, and asked defendant to respect their client's rights. That letter having been referred to petitioner, its counsel inquired of plaintiff's counsel whether suit would be brought against defendant (a user of one press) in the Eastern District of New York, rather than directly against petitioner (a manufacturer and seller) in the Northern District of Ohio. Plaintiff's counsel answered that decision to sue defendant in the New York district had been reached, and promised to serve a copy of the bill upon petitioner's counsel. Shortly after commencement of suit, that was done. Plaintiff's threats to bring infringement suits against users injured petitioner's business and unnecessarily harassed its customers. Although, long before commencement of the suit, its device had been shown to plaintiff's counsel and plaintiff knew that it was being sold throughout the United States, plaintiff did not sue petitioner. Defendant has not sufficient interest in the result of the litigation to defend this suit on its own account. Petitioner's intervention is necessary for the protection of its interest.
Contrary to the better practice, the application for intervention did not present a proposed answer. Cf. Toler v. East Tennessee v. & G. Ry. Co., 67 F. 168, 174; Stallings v. Conn, 74 F.2d 189, 191. It did not suggest that, independently of defendant or otherwise, petitioner sought opportunity in this suit to enforce a claim for patent infringement against the plaintiff. After hearing, the court granted the leave applied for. Thereupon, the defendant and intervener filed an answer in which jointly they deny infringement and assert invalidity of plaintiff's patent. And, in the same answer, the intervener separately sets up a counterclaim against the plaintiff for infringement of patent No. 1,849,314 for "Improvements in Sheet Transferring Mechanism for Printing Presses" owned solely by it, and prays decree against plaintiff for injunction and accounting. Maintaining that it states a cause of action to which the original defendant is a stranger, plaintiff moved to dismiss the intervener's counterclaim. The District Court granted the motion. The Circuit Court of Appeals affirmed. Brandtjen & Kluge, Inc. v. Joseph Freeman, Inc., 75 F.2d 472.
Hinge Last Co., 284 U. S. 448, 284 U. S. 451; General Elec. Co. v. Marvel Rare Metals Co., 287 U. S. 430, 287 U. S. 435. Here, plaintiff's alleged cause of action is use by the defendant of a single machine alleged to infringe patent No. 1,363,200 belonging to plaintiff. Defendant has no interest in patent No. 1,849,314, owned by intervener and made the basis of the counterclaim in question. The bill neither alleges any cause of action nor prays judgment against the intervener. Petitioner was not sued, and, until granted leave to intervene, it was a stranger to the suit. The facts alleged in its application were not sufficient to show that, as a matter of equitable right, petitioner is entitled to intervene. Western Union Telegraph Co. v. United States & M.T. Co., 221 F. 545, 552; United States Trust Co. of New York v. Chicago Terminal T. R. Co., 188 F. 292, 296; Toler v. East Tennessee v. & G. Ry. Co., supra, 67 F. 168, 171, 172; Chester v. Life Assn. of America, 4 F. 487, 491. The showing presents a situation familiar in patent infringement cases brought against a user where the maker of the accused article is upon its application and in the discretion of the court permitted to intervene. Curran v. St. Charles Car Co., 32 F. 835, 836; Foote v. Parsons Non-Skid Co., 196 F. 951, 953; Continuous Extracting P. Corp. v. Eastern Cotton Oil Co., 264 F. 340; Baldwin v. Abercrombie & Fitch Co., 227 F. 455; 228 F. 895, aff'd sub nom. Abercrombie & Fitch Co. v. Baldwin, 245 U. S. 198, 245 U. S. 200. See Angier v. Anaconda Wire & Cable Co., 48 F.2d 612, 613. The record discloses no foundation for the claim that the defendant sued is not, or that the intervener is, the real defendant in interest.
solely between it and plaintiff. Issues tendered by or arising out of plaintiff's bill may not by the intervener be so enlarged. It is limited to the field of litigation open to the original parties. Curran v. St. Charles Car Co. supra, 837; Powell v. Leicester Mills, 92 F. 115; Atlas Underwear Co. v. Cooper Underwear Co., 210 F. 347, 355; Leaver v. K. & L. Box & Lumber Co., 6 F.2d 666; De Sousa v. Crocker First Nat. Bank, 23 F.2d 118, 122; Board of Drainage Comm'rs v. Lafayette Southside Bank, 27 F.2d 286, 296; Tretolite Co. v. Darby Petroleum Corp., 5 F.Supp. 445, 446. The decisions of the District Court and the Circuit Court of Appeals in United States Expansion Bolt Co. v. H. G. Kroncke H. Co., 216 F. 186, 234 F. 868, are disapproved to the extent, if at all, that they tend to support intervener's contention that it is entitled to set up the counterclaim.
"The defendant by his answer shall set out . . . his defense to each claim asserted in the bill. . . . The answer must state . . . any counterclaim arising out of the transaction which is the subject matter of the suit, and may, without cross-bill, set up any set-off or counterclaim against the plaintiff which might be the subject of an independent suit in equity against him."
against construing the word "defendant," as used in the rule, to include one permitted to intervene. See Allington v. Shevlin-Hixon Co., 2 F.2d 747, 749. The statement that defendant shall set up his "defense to each claim asserted in the bill" is inconsistent with the construction for which the intervener here contends. Intervention necessarily is subsequent to the commencement of the suit. As shown above, this bill does not make the intervener a party, or allege aught against it. It is plain that the rule does not authorize one given the privilege to intervene as party defendant to set up and enforce against the plaintiff a counterclaim not available to the original defendant and in which it had no interest. Construction of the rule that denies intervener the right to set up the counterclaim in question is supported by Equity Rule 37, which declares: "Anyone claiming an interest in the litigation may at any time be permitted to assert his right by intervention." It is essential that the applicant shall claim an interest in the matters there in controversy between the plaintiff and original defendant. The purpose for which permission to intervene may be given is that the applicant may be put in position to assert in that suit a right of his in respect of something there in dispute between the original parties. Intervener's counterclaim, involving nothing in which defendant is concerned, does not constitute the interest referred to in Rule 37.
30 for which the intervener contends cannot reasonably be sustained. The counterclaim against the plaintiff was rightly dismissed.

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