Davis v. American Foundry Equipment Co.
| Decision Date | 07 February 1938 |
| Docket Number | No. 6407.,6407. |
| Parties | DAVIS v. AMERICAN FOUNDRY EQUIPMENT CO. |
| Court | U.S. Court of Appeals — Seventh Circuit |
C. Lysle Smith and John Alden Powers, both of Chicago, Ill., for appellant.
Charles W. Bingham, of Mishawaka, Ind., for appellee.
Before SPARKS, and MAJOR, Circuit Judges, and LINDLEY, District Judge.
Plaintiff appeals from a judgment of the District Court dismissing his bill of complaint seeking a declaratory judgment, for want of jurisdiction.
In his bill plaintiff averred that he had in a certain contract licensed the defendant to manufacture and use certain patented devices; that thereby defendant agreed to pay plaintiff certain sums including $500 paid at the time of the execution of the agreement and $500 to be paid each year during the life of the patents. The suit was begun four years after the contract was executed and there was then due $2,000. The payments to be made in the future aggregated some $7,500. The bill alleged that defendant was insisting that the contract is void by reason of the failure of plaintiff to comply with the statute of the state of Indiana. Jurisdiction was invoked upon the ground of diversity of citizenship. Plaintiff alleged that the validity of the contract was in issue and that it had a value in excess of $3,000 exclusive of interest and costs, and prayed that the court might enter a declaratory decree finding the contract valid. The court below held and defendant contends here that the amount in controversy is the sum of money now due, while the plaintiff insists that the subject-matter in controversy is the validity of the contract, which under the averments of the bill has a value in excess of the requisite statutory amount. This is the only question presented.
The act, Jud.Code § 274d, 28 U.S. C.A. § 400, provides in part that: "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." By this legislation the Congress has not changed the jurisdictional requirements for suits in federal courts. There must exist, as heretofore, the essential grounds for federal jurisdiction, and in cases depending upon diversity of citizenship, more than $3,000 must be involved. The law created no new substantive rights or legal relationships but added to the remedies previously existing, an additional one for relief in the form of a judgment declaring, in cases of actual controversy, the rights of the parties. Though such relief was inherent in some situations previously, the statute extended the propriety of the procedure greatly, with the obvious intent to avoid delay and accrual of damages against one uncertain of his rights and to promote an early adjudication of the controversy between the parties without waiting until one of them should see fit to begin suit for coercive relief after damages had accrued. E. Edelmann & Co. v. Triple-A Specialty Co., 7 Cir., 88 F.2d 852.
Defendant insists that to grant the relief in the present instance is to do violence to these elementary premises and to extend the jurisdiction of the federal courts to situations where...
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