Automotive Equipment v. Trico Products Corporation

• Decision Date: 02 April 1935
• Citation: 10 F. Supp. 736
• Parties: AUTOMOTIVE EQUIPMENT, Inc., v. TRICO PRODUCTS CORPORATION, Inc.
• Court: U.S. District Court — Southern District of New York

10 F. Supp. 736

AUTOMOTIVE EQUIPMENT, Inc., v. TRICO PRODUCTS CORPORATION, Inc.

District Court, S. D. New York.

April 2, 1935.

Dean, Fairbank, Hirsch & Foster, of New York City (Franklin J. Foster, of New York City, of counsel), for petitioner.

Prindle, Bean & Mann, of New York City, for respondents.

PATTERSON, District Judge.

The motion is by the defendant to quash service of process for lack of jurisdiction.

The suit is brought under the Declaratory Judgment Act of June 14, 1934 (Jud. Code § 274d, 28 USCA § 400). The plaintiff's pleading, styled a petition, opens with allegations that the plaintiff is a New York corporation with its principal place of business in the Eastern District of New York; that the defendant is a New York corporation with a "principal or other" place of business in this district; that jurisdiction rests on the Declaratory Judgment Act and on the patent laws. For a cause of action, it is alleged that the plaintiff manufactures and sells windshield wipers that do not infringe any patents, some of such wipers being sold in this district; that the defendant also manufactures and sells windshield wipers, in competition with the plaintiff; that the defendant claims ownership of some fourteen patents for windshield wipers, but that such patents are actually invalid; that the defendant has threatened the plaintiff's customers with infringement suits, to the plaintiff's damage, but has refrained from suing the plaintiff itself although invited to do so; that there is an actual controversy relative to the defendant's patent rights; and that the plaintiff has no adequate or complete remedy save by suit for declaratory judgment. The relief prayed for is that there be declaratory judgment that the plaintiff's products do not infringe the defendant's claimed patents, that the defendant's claimed patents are invalid, and that the plaintiff has the right to manufacture and sell its products without molestation by the defendant.

On the motion to quash for lack of jurisdiction, both parties submitted affidavits relative to the defendant's course of business. As for the principal place of business, the showing is conclusive that it is not here but in Buffalo, that is to say, in the Western District of New York. The defendant's certificate of incorporation gives Buffalo as the principal place of business, and it is in Buffalo that the manufacturing, selling, and management are carried on. The facts as to the defendant's activities in this district are not so clear cut. No sales are made here, though orders are solicited here. There is an office at 149 Broadway in this city, which the plaintiff asserts is an office of the defendant. The defendant is listed in the telephone directory at that address; its name is also carried in the building directory at 149 Broadway. A bank at which the defendant keeps an account, as well as a concern furnishing financial information, have stated that the defendant has a New York office at 149 Broadway. But the defendant says that the office is in reality that of one Evans, who is secretary of the defendant; that Evans uses the office for his personal business and that of another concern; that the defendant does not pay the rent or the salaries of the persons working there, nor does it contribute to the upkeep of the office. Evans' name is on the door, not the defendant's. The defendant's products are not kept in stock or sold at this office; but the defendant does not say that none of its business is transacted in the office. The defendant's stationery carries Buffalo as its general office; it mentions an office at Detroit; it also has the statement: "Office of the Secretary, 149 Broadway, New York City." The defendant has a bank account in one of the local banks. A local trust company acts as transfer agent of its stock, which is listed on the New York Stock Exchange, and another local institution acts as registrar.

1. The Declaratory Judgment Act of June 14, 1934 (Judicial Code, § 274d, 28 USCA § 400), reads:

"(1) In cases of actual controversy the courts of the United States shall have power upon petition, declaration, complaint, or other appropriate pleadings to declare rights and other legal relations of any interested party petitioning for such declaration, whether or not further relief is or could be prayed, and such declaration shall have the force and effect of a final judgment or decree and be reviewable as such.

"(2) Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application shall be by petition to a court having jurisdiction to grant the relief. If the application be deemed sufficient, the court shall, on reasonable notice, require any adverse party, whose rights have been adjudicated by the declaration, to show cause why further relief should not be granted forthwith.

"(3) When a declaration of right or the granting of further relief based thereon shall involve the determination of issues of fact triable by a jury, such issues may be submitted to a jury in the form of interrogatories, with proper instructions by the court, whether a general verdict be required or not."

The act is, of course, limited in its operation to cases which from their nature or from diversity of citizenship of the parties are controversies of which the United States courts have jurisdiction. It will be assumed that the present case presents no difficulties on that score, on the ground that it is a case arising under the patent laws and therefore is within the jurisdictional limits of the District Court generally. Judicial Code, § 24 (7), 28 USCA § 41 (7). The constitutionality of the act may also be assumed for purposes of this case. The question raised here relates to the power of the District Court of this district to entertain the case over the defendant's protest. The act is silent as to what court shall have venue in cases brought under it.

2. The rule of venue in the federal courts, aside from exceptional cases governed by particular statutes and not involved here, is found in section 51 of the Judicial Code (28 USCA § 112). By virtue of that act the suit must be brought in the district whereof the defendant is "an inhabitant," with the qualification...