Inland Steel Products Co. v. MPH Manufacturing Corp.

25 F.R.D. 238, 3 Fed. R. Serv. 2d 686, 126 U.S.P.Q. (BNA) 109, 1959 U.S. Dist. LEXIS 4067
District Court, N.D. Illinois·Decided December 29, 1959·No. Nos. 54 C 1449, 54 C 1471, 55 C 835·Published·Cited by 10 cases

Opinion

ROBSON, District Judge.

These three cases, consolidated for trial, involve a controversy over the title to inventions pertaining to the construction of metal arch type trussless buildings, as well as the validity and alleged infringement of patents on such structures. On June 28, 1957, an order was entered, pursuant to motion under Rule 39(b), Fed.Rules Civ.Proc. 28 U.S.C.A., ruling that all issues in these cases triable by jury as a matter of right be so tried. On January 29, 1958, at a pretrial conference, it was agreed that the parties would submit memoranda on the question as to which issues involved in these actions are triable of right by jury.

54 C 1449

This action was brought by Inland Steel Products Company (hereinafter called Products) against (1) MPH Manufacturing Corporation, Inc. (hereinafter called MPH), (2) Peter S. Pedersen, Peter S. Pedersen, Jr. and Edward Martin, d/b/a Central Farm Equipment Company (hereinafter called Central), (3) Peter S. Pedersen, individually, (4) LeRoy N. Hermann and (5) John F. Blaski. Involved is a dispute over the title to the inventions embodied in a building displayed by Products at the Milwaukee State Fair in August, 1954, as well as the title to patent applications covering these inventions, filed by Hermann and subsequently assigned to Products pursuant to an employment contract between Hermann and Products.

The complaint states that the defendants, except Hermann, claim rights in these inventions. It seeks (1) a declaratory judgment that these defendants have no interest in any subject matter covered by the employment contract between Hermann and Products and therefore have no right to prevent Products from making or selling the structure in question; (2) a declaratory judgment quieting title to the improvements or inventions embodied in the structure, and declaring that the defendants’ challenge to plaintiff’s title constitutes a slander to its title, and (3) an injunction against defendants (except Hermann) restraining them from slandering Products’ title to the inventions or improvements assigned to Products in the latter’s contract with Hermann.

The answers, except that of Hermann, deny that the inventions are those of Hermann and that Products has title thereto. It is claimed that the inventions are those of Edward Martin and that the Hermann patent applications are the property of MPH. It is alleged that Hermann, while in the employ of MPH and Central, developed these inventions from ideas orally conveyed to him by Martin; Hermann’s duties in his employment by MPH and Central, it is claimed, involved the development of these ideas for the benefit and use of the employer companies.

A counterclaim filed by MPH, Central and Peter S. Pedersen seeks a declaratory judgment that (1) the Hermann patent application and inventions described therein are the property of MPH; (2) that the inventions embodied in Products’ structure displayed at the Wisconsin State Fair are those of Martin, and (3) that neither Products nor Hermann has any rights or interest in the Hermann patent applications. The counterclaim seeks, in addition, damages arising from [242]*242Products’ and Hermann’s alleged wrongful use of the inventions of Martin.

Products contends that all issues on the counterclaim are equitable in nature and therefore not triable of right by a jury. The plaintiff notes that the action is one to quiet title to personal property and to enjoin further title slander wholly equitable in nature. Moreover its equitable character cannot be altered by the fact that the counterclaim is legal.

The defendants (except Hermann) argue that the plaintiff’s prayer for an injunction against alleged slander of title does not make the action equitable and that a court of equity has no jurisdiction to enjoin slander of title but will leave a complainant to his remedy at law. Therefore, no equitable cause is stated and the title issue involved in the slander action is purely legal in nature. Defendants do not make any argument as to the legal or equitable character of the plaintiff’s prayer that the court quiet title to the inventions in question.

Defendants further state that the counterclaim is legal, being for the illegal appropriation of a trade secret, for which damages, but no injunction, are sought. Defendants claim that even if the plaintiff’s action be regarded as equitable, the counterclaim, being legal, should be tried by a jury before the plaintiff’s claim is tried by the court. Otherwise, the defendants’ right to a jury trial on its legal counterclaim would be rendered nugatory, inasmuch as the issues common to both the plaintiff’s action and the defendants’ counterclaim would be res judicata, after trial to the court, precluding a jury trial of those questions on the counterclaim.

In determining what issues are triable of right by a jury, the Seventh Amendment is to be followed preserving the right to jury trial as it existed under the common law at the time when the Constitution was adopted. Beacon Theatres, Inc. v. Westover, U. S. District Judge, 1959, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988; National Labor Relations Board v. Jones & Laughlin Steel Corp., 1937, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893; Liberty Oil Company v. Condon National Bank, 1922, 260 U.S. 235, 243, 43 S.Ct. 118, 67 L.Ed. 232.

As to the plaintiff’s action, it is well settled that a declaratory judgment suit is neither legal nor equitable in and of itself; it is said to be sui generis, its character depending upon the nature of the issues involved in each specific action. State Farm Mutual Automobile Ins. Co. v. Mossey, 7 Cir., 1952, 195 F.2d 56, certiorari denied DuBois v. Mossey, 1952, 344 U.S. 869, 73 S.Ct. 109, 97 L.Ed. 674. See also Beacon Theatres, Inc. v. Westover, U. S. District Judge, supra. The plaintiff seeks a declaratory judgment quieting title to the inventions and determining that the defendants have slandered the plaintiff’s title. It also seeks an injunction against further slander to plaintiff’s title.

A bill to quiet title is equitable in nature, and neither party to the bill has a right to trial by jury of the issues involved therein. Humble Oil & Refining Co. v. Sun Oil Co., 5 Cir., 1951, 191 F.2d 705, certiorari denied, 1952, 342 U.S. 920, 72 S.Ct. 367, 96 L.Ed. 687. Although the remedy of quieting title is generally regarded as applicable only to cases involving real estate, 44 Am.Jur., Quieting Title § 3, precedent exists both in Illinois and in the Seventh Circuit for applying it as well to bills concerning personal property. See Chicago Auditorium Ass’n v. Willing, 7 Cir., 1927, 20 F.2d 837, reversed on other grounds, 1928, 277 U.S. 274, 48 S.Ct. 507, 72 L.Ed. 880; Stebbins v. Perry County, 1897, 167 Ill. 567, 47 N.E. 1048. Therefore, the issues involved in the quiet title aspect of the plaintiff’s case are equitable and not triable of right by jury.

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Inland Steel Products Co. v. MPH Manufacturing Corp., 25 F.R.D. 238, 3 Fed. R. Serv. 2d 686, 126 U.S.P.Q. (BNA) 109, 1959 U.S. Dist. LEXIS 4067 (N.D. Ill. 1959).

25 F.R.D. 238 (Inland Steel Products Co. v. MPH Manufacturing Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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