Schnell v. Peter Eckrich & Sons, Inc.

PETITIONER: Schnell
RESPONDENT: Peter Eckrich & Sons, Inc.
LOCATION: Convertible Top Replacement Co.

DOCKET NO.: 219
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 365 US 260 (1961)
ARGUED: Jan 11, 1961
DECIDED: Feb 20, 1961

Facts of the case

Question

Media for Schnell v. Peter Eckrich & Sons, Inc.

Audio Transcription for Oral Argument - January 11, 1961 in Schnell v. Peter Eckrich & Sons, Inc.

Earl Warren:

Carl Schnell et al., versus Peter Eckrich & Sons, Number 219.

Charles J. Merriam:

If the Court --

Earl Warren:

Mr. Merriam

Charles J. Merriam:

Thank you, Mr. Chief Justice and if the Court please, this case arose from two patent infringement cases brought in Fort Wayne, Indiana against Peter Eckrich & Sons, who were -- who were and are an Indiana corporation and resident in Fort Wayne and against the Allbright-Nell Company which was an Illinois corporation having its main place of business in Chicago and not normally subject to service of process in Indiana.

During the -- there -- there are two cases because one patent issued after the first and was started and was joined in the second case.

During the progress of the case was it developed that the Allbright-Nell Company was defending the litigation and controlling it in accordance with a contract which is set forth on Page 2 of the record.

Under that contract, it had the right to defend the case to the exclusion of Peter Eckrich and it agreed also to pay all of the damages and costs that might be awarded in that proceeding.

Because of that contract and because of the admission that it was in fact defending, proceedings were undertaken to force the Allbright-Nell Company to answer and it was served in Illinois.

And after that service, it moved to quash the service to the summons of subpoenaing and that motion was granted on the ground that merely defending the case did not constitute a general appearance and thereby bind Allbright-Nell Company to be sued in a District Court, it was not ordinarily subject to sue.

The Court however gave no opinion and granted an interlocutory appeal in both cases which were then taken to the Court of Appeals for the Seventh Circuit which decided two-to-one to affirm the District Court and the petition was taken from that decision of the Court.

It's our position here that a defendant so named, who after being named as a defendant in the case, continues to control its defense.

In this case, they even instituted a counter claim in the name of Peter Eckrich asking for attorney's fees, which would have come to the Allbright-Nell Company, is in fact a party and has entered a general appearance in the case.

It is conceded by our opponents and there's no dispute in the Court that Allbright-Nell Company would be bound by the decision under res judicata.

That is not contested and I think that perhaps the most pertinent thing in that point is to explore what this Court said way back in Lovejoy against Murray, in 3 Wall. 1,18, was the reason for finding a res judicata against a person who was not a named party.

And the language of the case which is -- the case is referred to by our opponents, it's not in our brief, but the language is so good that it appears to me that it might be well to read just a couple of sentences.

The Court in quoting from Greenleaf on evidence said, "Justice requires that every cause be once fairly and impartially tried, but the public tranquility demands that having once -- having been once so tried, all litigation of that question and between the same parties should be closed forever."

And then they, I skip a little bit, "Under the term “parties” in this connection, the law includes all who are directly interested in the subject matter and had a right to make defense or to control the proceedings and to appeal from a judgment."

This right involves also the right to adduce testimony and to cross examine it, examine the witnesses adduced on the other side.

Earl Warren:

What is that case Mr. --

Charles J. Merriam:

That is Lovejoy against Murray, 3 Wall. 1, 18.

It is cited in the brief of our opponents and it is also approved in another case cited by our opponents, the Souffront case in 217 U.S. 475.

In other words, if we go back to establish the basis upon which res judicata is established in this case, and it is admitted that it is here, is because the party who is so estopped is in fact a party and should be treated as one.

And if that is so, it is our position that when he comes into a case as the Allbright-Nell Company has done here, takes over the control of the defense, examines our witnesses and his own, he should be subject to the right of discovery on our part and he should be subject to the right not to be bothered by other suits brought by him.

And as was shown in -- in petition for certiorari 389 which is still pending before this Court, the Allbright-Nell Company did institute a declaratory judgment suit in Illinois on one of the -- on the reissue of one of the patents involved in this case.

And it's our position that that kind of thing ought not to be permitted merely by dodging behind the unanimity which the defendant has here in effect established by not intervening as he has a right to do under Rule 24 of the Rules of Civil Procedure.

Rule 17 of course says that the case shall be prosecuted in the name of the real party in interest and I gather from the language of the heading which applies both to plaintiffs and defendant that the word “prosecute” is intended to cover both a plaintiff and a defendant.

At any rate, the filing of a counter claim here asking relief for the benefit of the Allbright-Nell Company would seem to well bind it within Rule 17.

Felix Frankfurter:

Of the -- the respondent isn't a real party in interest, is he?

I mean he can -- if he is the real party in interest or -- and you try to sue him on that basis, you wouldn't have succeeded, would you?

Charles J. Merriam:

I think we would, Mr. Justice Frankfurter.