Foote v. Parsons Non-Skid Co. , 118 C.C.A. 105 ( 1912 )

PER CURIAM.

[1] Where a dealer is sued for infringement in handling a given article, the right of the manufacturer of that article to intervene and defend, to the extent of exercising any control over the defense to the action, is not an absolute right. Such intervention is sometimes permitted and sometimes refused, according to the discretion of the court upon the facts appearing. The act of sale by the dealer is a tort independent from the manufacture, and the patentee is under no compulsion to sue the manufacturer; he may select the defendant, and he has an absolute right to sue the dealer alone, if he wishes to do so; he may not intend nor desire to submit to the court of the district of the dealer’s residence all ques - tions which may exist between patentee and infringing manufacturer. To compel the substitution, as defendant, of a party whom complainant has not sued and may not wish to sue, is something of an anomaly upon the theories of practice which are involved (Judge, now Mr. Justice, Eurton, in Toler v. East Tenn. R. R. [C. C.] 67 Fed. 168, 170); but yet it is sometimes permitted, if thought essential to simplify and completely administer justice under the facts of a particular case. Where so permitted, it is as matter of favor and not of right. (Ring, etc., Co. v. St Louis, etc., Co. (C. C.) 67 Fed. 535, 540. In any event, the defendant dealer would not be compelled to give up his control of the case and his right to make a satisfactory settlement and escape personal liability for further costs or for damages at any time he might desire, unless he was indemnified not only sufficiently but to his satisfaction. Indeed, it would he an extreme case which would justify saying to a defendant, against his protest, that he must not accept from the complainants a discharge in full of all damages and upon such terms as he might think for his interest, and in place thereof must rely upon anybody’s guaranty for his ultimate protection against costs and damages.

[2] With these conditions in mind, it must be clear that the manufacturer’s application to intervene and control the cause should be made promptly. If it is known to complainants that the manufacturer is participating in the defense of such a suit, he becomes privy to the suit, and is bound by, or may take advantage of, the decree; hjit, if such participation is not known to the complainants, then a decree binds neither. Lane v. Welds (C. C. A. 6), 99 Fed. 286, 288, 39 C. C. A. 528; Penfield v. Potts (C. C. A. 6), 126 Fed. 475, 480, 61 C. C. A. 371; Cramer v. Singer (C. C. A. 9), 93 Fed. 636, 35 C. C. A. 508; Hanks’ Ass’n v. International Co. (C. C. A. 2), 122 Fed. 74, 58 C. C. A. 180; Jefferson Co. v. Westinghouse Co. (C. C. A. 3), 139 Fed. 385, 71 C. C. A. 481. So long as such a manufacturer has not assumed open control of the action and the attorney, he is not a party, but only a “sympathetic and interested nonparticipant.” General Elec. Co. v. Morgan, etc., Co. (C. C. A. 7), 168 Fed. 52, 56, 93 C. C. A. 474.

It is thus evident that a manufacturer who, until after a decision by the court, delays not only his application to come on the record as a party, but even any notice to complainants that he is substantially a party, is, whether intentionally or not, experimenting with the court and maintaining himself in' a position where he will not be bound by the decree if it is against him, but where, if it is against the complainants, he can take advantage of it as the general public can in a patent case. It follows further that when patentees bring suit against a dealer, and so long, as they have neither notice nor knowledge that a manufacturer is participating in the defense, they may settle their controversy with the dealer upon any terms satisfactory to both; and that, whatever consideration might otherwise be given to the manufacturer’s application to intervene, it must be denied if it is delayed until after the known parties have settled the controversy. This conclusion makes it unnecessary to consider whether, in any event, intervention could be permitted in the appellate court upon application there first made.

We attach no importance to the fact that in this case Foote was, by the bill of complaint, said to be combining and confederating with others unknown, and that in some parts of the bill reference was made to the “defendants.” No other defendant was named, and there was none.

[3] We observe by the record that the Circuit Court struck from the files the stipulation for decree in that court, apparently upon the ground that when the stipulation was filed the case was pending in this court upon appeal. An appeal from a motion granting a preliminary injunction does not have the effect to remove the cause to this court, but the cause generally remains in the court below, and continues in the control of that court. Section 129, Judicial Code. The distinction in this particular between such appeals as this and appeals from final decree was doubtless overlooked by the District Judge, if, indeed, he was not intending to exercise his discretionary power under this section.

We think it clear, upon the facts here appearing, that the consent decree to be entered in the court below against Foote can have no effect upon the rights of the Atlas Company or the Perry Company; but, in order that the situation may certainly appear in this light, we will impose upon the complainants, appellees, the condition that they file in this court their written stipulation reciting that the entry of the final decree in the court ^ below and the dismissal of the appeal in this court are against the protest of the Atlas Company and of the Perry Company, and shall not be deemed, in any court or for any purpose, to be of any force whatever against the Atlas Company or the persons doing business as the Perry Company.

Upon the filing of this stipulation, the petition to intervene will be denied, and the motion to dismiss the appeal will be granted, without costs.