Smith v. Dental Products Co., 9461.

• Decision Date: 08 June 1948
• Docket Number: No. 9461.,9461.
• Citation: 168 F.2d 516
• Parties: SMITH v. DENTAL PRODUCTS CO., Inc., et al.
• Court: U.S. Court of Appeals — Seventh Circuit

168 F.2d 516 (1948)

SMITH v. DENTAL PRODUCTS CO., Inc., et al.

No. 9461.

Circuit Court of Appeals, Seventh Circuit.

June 8, 1948.

Harry G. Fins, Ralph M. Schwartzberg and Mark T. Barnett, all of Chicago, Ill., for appellant.

James R. McKnight and Robert C. Comstock, both of Chicago, Ill., for appellees.

Before MAJOR and MINTON, Circuit Judges, and LINDLEY, District Judge.

LINDLEY, District Judge.

Following the mandate of this court, as ordered in Smith v. Dental Products Co., 7 Cir., 140 F.2d 140, the District Court, having entered a decree enjoining defendants from using the trade-marks of plaintiff and from continuing unfair competition, referred the cause to a master to take and report an accounting as to the profits and damages for infringement of trade-marks and unfair competition incurred by plaintiff during a period of some nine years following February 10, 1936. The Master heard evidence at various times and, according to the transcript, on January 18, 1946, the parties agreeing, declared the proofs closed. He remarked, however, that if, after he had been able to examine the record, he should deem the evidence insufficient, he would not foreclose himself from the right to require further evidence. This reservation, he said, he made because of the broad differences between the parties and the different conclusions of the respective auditors. Thereafter, before making any finding or report, the Master died. A transcript of the evidence submitted before him, certified as correct by a private reporter, was later lodged with the District Judge.

On September 13, 1946, the court entered an order referring the cause to another master but two months later vacated it. Thereafter, on June 25, 1947, after the respective parties had presented their written briefs and argument, the court, after considering the transcript then in its possession, entered final judgment against the corporate defendant, without special findings of fact or conclusions of law but including in the formal judgment a finding that "plaintiff is entitled to recover on the basis of reasonable royalties for the period" in question and is "hereby awarded the sum of $60,000 as profits and damages for trade-mark infringement and unfair competition," interest at 6% and costs.

Defendant now asserts that the District Court erred in failing to make special findings of fact and conclusions of law, as required by Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c; that, inasmuch as the Master to whom the cause had been referred died before making a report, findings or recommendations, it was the duty of the court either to refer the cause to a second master for the purpose of a hearing de novo or to hear evidence itself; that the entry of judgment upon the transcript of testimony before the Master and in the absence of findings by the Master constitutes deprivation of due process of law, and that the judgment is contrary to the law and the evidence.

Under the Federal Rules of Civil Procedure (52 (a) ) the court "shall find the facts specifically and state separately its conclusions of law thereon and direct the entry of the appropriate judgment." This rule has been considered in Mayo v. Lakeland Highlands Canning Co., 309 U.S. 310, 60 S.Ct. 517, 84 L.Ed. 774; Bowles v. Russell Packing Co., 7 Cir., 140 F.2d 354; Bank of Madison v. Graber et al., 7 Cir., 158 F.2d 137; Dearborn National Casualty Co. v. Consumers Petroleum Co., 7 Cir., 164 F.2d 332 and in various decisions in the different circuits in agreement with the announcements of the cases cited. It is clear from these decisions that the requirement of the Federal Rules of Civil Procedure that the District Court make findings of fact and state conclusions of law must be reasonably complied with. As this court has said, "a fair compliance with this rule is mandatory." 140 F.2d 355. "These are * * * mandatory provisions which should be respected; they are not meaningless words"; "findings of fact on every material issue are a statutory requirement." 158 F.2d 141 "There must be such subsidiary findings of fact as will support the ultimate conclusion reached by the court. Kelley et al. v. Everglades Drainage District, 319 U.S. 415, 420, 422, 63 S.Ct. 1141, 87 L.Ed. 1485." 164 F.2d 333 Clearly the ultimate finding of liability is not fair compliance and the failure of the District Court in this respect constitutes error under the facts of the case.

Plaintiff has submitted various citations to the effect that failure to comply with the rule is not fatal, if included in the judgment or opinion are findings and conclusions sufficient to constitute substantial compliance. Undoubtedly the rule does not require always the strictest technical compliance and the situation may be such that, by findings and conclusions in a memorandum of the trial court, substantial compliance is reflected, in which instance there is no error. Here there was no opinion, no memorandum of fact and law but only the ultimate finding.

We are confronted with another...