General Talking Pictures Corporation v. Stanley Co.

• Decision Date: 31 July 1930
• Docket Number: No. 735.,735.
• Citation: 42 F.2d 904
• Parties: GENERAL TALKING PICTURES CORPORATION et al. v. STANLEY CO. OF AMERICA.
• Court: U.S. District Court — District of Delaware

42 F.2d 904 (1930)

GENERAL TALKING PICTURES CORPORATION et al. v. STANLEY CO. OF AMERICA.

No. 735.

District Court, D. Delaware.

July 31, 1930.

Ward & Gray, of Wilmington, Del., Darby & Darby, of New York City (Samuel E. Darby, Jr., and Ephraim Berliner, both of New York City, of counsel), for plaintiffs.

William H. Foulk, of Wilmington, Del., and Henry R. Ashton (of Fish, Richardson & Neave), of New York City, for defendant.

AVIS, District Judge.

The petition in this case seeks to restrain the plaintiffs, their officers, agents, employees, and associates, from giving or sending out any misleading or untrue statements or notice relating to the opinion of the court in the above-stated cause, or to otherwise improperly and unlawfully advertise the said opinion. It also asks that plaintiffs be required to do such acts as will mitigate and remedy, so far as possible, any injury caused to Electrical Research Products, Inc., by any previous improper and unlawful statements.

The facts are that in a suit, entitled as above, Judge Morris, on June 30, 1930, entered a decree holding one of the patents in suit, known as the "Reis" patent, to be valid and infringed by the defendant, and the other patents in suit, known as the "DeForest" patents, if valid, were not infringed.

When this case was called for trial before Judge Morris, Electrical Research Products, Inc., which corporation was actually conducting and controlling the defense in this suit, was, by some kind of a stipulation entered upon the record, recognized to be appearing in that capacity. How this was accomplished is in dispute in the briefs; counsel for Electrical Research Products, Inc., insisting that counsel for plaintiffs requested the stipulation, and counsel for plaintiffs insisting that it was so stipulated only because he was ready to prove the fact.

The method and the reason are both immaterial. The fact is that it was so stipulated.

The first question is whether or not this made the Electrical Research Products, Inc., a party to the suit, authorizing it to obtain affirmative relief by way of injunction on an allegation that plaintiffs, through M. A. Schlessinger, president of the plaintiff, General Talking Pictures Corporation, had issued, and made, statements for publication, and had sent and authorized circulars, etc., tending to misrepresent the decision of the court.

Equity Rule 37 of the United States Supreme Court (28 USCA § 723), among other things, provides as follows: "Anyone claiming an interest in the litigation may at any time be permitted to assert his right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding."

One of the methods by which a party may intervene is by "motion to be allowed to intervene as a formal party, either plaintiff or defendant, to the suit." Equity Rule 37, note 561, 28 USCA p. 207. Anderson v. Jacksonville, P. & M. R. Co. (C. C. N. D. Fla.) 1 Fed. Cas. page 842, No. 358.

Rule 37 is merely declaratory of the established equity practice. Wenborne-Karpen Dryer Co. v. Dort Motor Car Co. (D. C. E. D. Mich. N. D.) 300 F. 404.

It has the same effect as a statute. Rhinehart v. Victor Talking Mach. Co. (D. C. N. J.) 261 F. 646.

There are numerous cases cited by counsel which hold that an intervening defendant is bound by the terms of the decree made in a suit of this character, and that the decree is res judicata, unless new facts are submitted in a subsequent suit involving the same question. This appears to be admitted by counsel for all parties interested.

In the case of Leaver v. K. & L. Box & Lumber Co. (D. C. N. D. Calif. 3rd Div.) 6 F. (2d) 666, 667, cited and submitted by counsel for the respondent in this motion, the fact that the intervener under Equity Rule 37 becomes a party is clearly stated. It is there limited, however, and "the interest he is thus permitted to assert must necessarily be as extensive as,...