Topping v. Fry
| Decision Date | 07 March 1945 |
| Docket Number | No. 8691.,8691. |
| Citation | 147 F.2d 715 |
| Parties | TOPPING v. FRY et al. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Meyer Abrams, of Chicago, Ill., and Joseph Nemerov and Maurice Dix, both of New York City (Shulman, Shulman & Abrams, of Chicago, Ill., of counsel), for appellant.
Sigmund Livingston, Harry H. Kahn, and Archie H. Siegel, all of Chicago, Ill. (Lederer, Livingston, Kahn & Adsit, of Chicago, Ill., of counsel), for appellees.
Before SPARKS, MAJOR and KERNER, Circuit Judges.
This appeal is from an order of the District Court denying plaintiff's motion for oral argument, granting defendants' motions to dismiss, and dismissing the complaint with costs to defendants. The order does not show on what grounds the dismissal was based.
Plaintiff described his suit as one "to recover his damage from the failure to exploit plaintiff's patents for asphalt roofing shingles, and nationally to advertise, create a demand for and market asphalt roofing shingles produced under plaintiff's patents." Two corporations and an individual are named in the complaint as participating in the transactions which are alleged to have given rise to the cause of action, but plaintiff states in his complaint that he refrained from naming one of the corporations as a party defendant for the reason that joinder of it would have deprived the court of jurisdiction which was based on diversity of citizenship.
Attached to the complaint is a contract signed only by plaintiff and the individual defendant, Fry. Plaintiff asserts that this contract "fails to express the real and true interest and obligations of the two corporations and should be reformed by inserting" the two corporations as parties thereto. However, it pleads no mutual mistake, nor does it ask such relief in its prayer, asking only for damages.
According to the terms of the contract, dated January 20, 1936, plaintiff granted Fry an exclusive license to manufacture shingles under five patents owned by plaintiff. Fry agreed to grant a sublicense to the Fry Company for manufacture and sale of the shingles, "it being the intent of the parties to provide for National Distribution." Fry agreed to provide for national advertising through established advertising and sales mediums. Royalties were specified. The contract recited that plaintiff was already under contract with the Certainteed Products Corporation, dated March 27, 1934, according to the terms of which contract Certainteed was to have the right to accept or reject the terms of any offer made by any other dealer for exclusive license, and that if Certainteed elected to accept the offer under the same terms as offered by Fry, the contract (with Fry) "is immediately cancelled and becomes Null and Void." The contract further provided that should Certainteed reject the offer, plaintiff would cause it to execute a cancellation of its contract and release plaintiff from all obligations thereunder, and that, "If and When (within the time limit specified as of January 31st, 1936) Topping shall deliver the instrument cancelling the agreement of March 27th, 1934, in its entirety and releasing Topping and his assignees from all obligations thereunder, duly acknowledged * * * Then, and in that event, this agreement between Topping and Fry will be binding * * *."
The complaint is so poorly drafted that it is difficult to determine upon what theory the action is based. It contains ninety-nine paragraphs, par. 95 being an allegation that "Plaintiff has duly performed all the terms, covenants and conditions of the herein-described agreement on his part to be performed." Much of the matter is out of place in a bill of complaint based on any theory of action, and is particularly irrelevant in that it describes activities of a third party who is specifically excluded from the complaint for jurisdictional reasons. This matter was, of course, subject to being stricken had defendants filed their motion to that effect. The complaint certainly violates Rule 8(a) of the Federal Rules of Civil Procedure, 28 U.S. C.A. following section 723c, but that would not warrant a dismissal on the merits without an opportunity to amend.
Defendants filed separate motions to dismiss the complaint, directed both to jurisdiction and to the merits. The Company asserted four grounds for its motion: (1) That the complaint was based on a written contract to which it was not a party and, as shown by the complaint, was not intended to be a party; (2) laches; (3) that the complaint showed that damages, if any, would be purely speculative; and (4) that the complaint affirmatively showed failure to obtain an agreement with Certainteed alleged to constitute a condition precedent to the effectiveness of the contract. Fry's motion to dismiss asserted three grounds: (1) That the complaint was a gross and flagrant violation of Rule 8(a) of the Federal Rules of Civil Procedure; (2) that the damage claimed was so speculative as to render it impossible to calculate an amount, and that if any recovery were permitted it would be limited to nominal damages which would fall far short of the amount necessary to confer jurisdiction on the federal court; (3) that the complaint showed on its face that the agreement sued upon was without force or effect for failure of the condition precedent.
Without permitting oral argument or granting plaintiff an opportunity to amend his complaint if he so desired, the court dismissed the complaint summarily, making no statement as to which of the diverse grounds stated by the two defendants in their motions to dismiss it relied upon as a basis for its action. Of course this dismissal operated as a dismissal with prejudice, and that being the case, we think plaintiff was entitled to know on what grounds the action was based. At least one of the reasons asserted by Fry obviously and admittedly furnished no basis for dismissal with prejudice, and we cannot say that any of the grounds was so obviously good as to sustain such a motion to dismiss.
We first look at the jurisdictional issue, lack of jurisdictional amount, since if that were in fact lacking, the District Court should have dismissed on that ground and had no reason for dismissing on the merits. See Central Mexico Light & Power Co. v. Munch, 2 Cir., 116 F.2d 85. As to this, ...
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