Appeal from the District Court of the United States for the Northern District of Illinois; Eastern Division; Charles Edgar Woodward, Judge.
Before SPARKS and MAJOR, Circuit Judges, and BRIGGLE, District Judge.
This is a suit for unfair competition brought by the Anchor Stove & Range Company, an Indiana corporation, against Montgomery Ward & Company, an Illinois corporation. The principal question for consideration is whether either the Illinois statute of limitations or the equitable doctrine of laches constitutes a bar to plaintiff's recovery.
Plaintiff filed its complaint in the District Court on August 18, 1939, alleging among other things that it was the manufacturer of a cabinet heater of a distinctive design, had established exclusive agencies for the sale of the same in many of the larger cities throughout the United States, and had created a demand on the part of the public for its heaters; that the defendant had in the year 1928 caused a certain manufacturer in the State of Tennessee to manufacturer for the use of the defendant a cabinet heater of identical design, directing the manufacturer to place the defendant's name plate thereon; that defendant illustrated this heater in its 1928-29 catalogue and caused the heaters to be placed in defendants branch houses throughout the territory in which the plaintiff was operating and that defendant thereby came in direct competition with the agents of the plaintiff in the sale of their cabinet heater. Plaintiff alleges that purchasers of defendant's heaters became purchasers under the impression and belief that the stoves were manufactured by the plaintiff, and plaintiff's exclusive agents were likewise led to believe that the plaintiff had broken faith with them. Plaintiff asserts that such conduct on the part of defendant amounts to unfair trade practice, and is in violation of a duty owed by the defendant to the plaintiff and to the public, and prays for an accounting of profits and damages for defendant's unfair and unlawful competition, including treble damages. No. injunctive relief is sought; and in view of plaintiff's assertion that the misconduct complained of was confined to the year 1928, it assumed that such practice did not continue after that date.
Plaintiff excuses its long delay in bringing usit against the defendant (1928 to 1939) by the assertion in its complaint that it brought a similar suit in 1930 against the Tennessee manufacturer of the stoves in question based upon the same cause of action as is here asserted.That proceeding was ultimately decided in favor of the plaintiff by the District Court, but plaintiff's recovery was limited to nominal damages; this decision was affirmed by the Circuit Court of Appeals of the Sixth Circuit, first in the case of Anchor Stove & Range Co. v. Rymer, 70 F.2d 386, and later after the accounting in 97 F.2d 689; Petition for Certiorari was denied by the United States Supreme Court on December 5, 1938, 305 U.S. 653, 59 S. Ct. 246, 83 L. Ed. 422, and on April 13, 1939, plaintiff notified the present defendant of its alleged infringement of plaintiff's rights.
To the present complaint defendant interposed a motion to dismiss, to strike certain parts of the complaint and to require plaintiff to make its complaint more specific and certain. The motion to dismiss challenged the sufficiency of the complaint as a whole. Defendant accompanied its motion to dismiss with a brief, pursuant to Rules 30a and 30b of the District Court. Under such rules plaintiff was required to file a reply brief within ten days after the filing of defendants's brief, and the rules provided that no oral argument would be heard on such motion unless directed by the court. Plaintiff failed to file a brief as required by said rules, and on November 1, 1939, the District Court allowed defendant's motion and dismissed the complaint. The court filed the following memorandum at the time of such order:
"On August 18, 1939, plaintiff filed its complaint against the defendant. On October 12, 1939, defendant filed its motion to dismiss and on October 16, 1939, acting under Rule 30A, filed its written brief in support thereof. Under that rule the reply of plaintiff was due on October 26, 1939. Plaintiff filed no brief and made no application for an extension of time.
"The Court is justified, therefore, in assuming that the motion of the defendant to dismiss the cause is confessed. However the court, from the argument submitted by defendant, is of the opinion that the complaint is without merit. The Court, therefore, is entering an order of dismissal."
It will thus be observed that the District Court did not rest its decision upon the failure of plaintiff to comply with its rules, but acted upon the complaint upon its merits, albeit without the benefit of presentation by the plaintiff. Plaintiff later filed a motion to vacate such order of dismissal, supported by affidavits seeking to excause its failure to complu with the rules of the District Court, which motion was denied.
It is from the order of dismissal that this appeal is prosecuted. Two issues are raised:
1. The validity of Rules 30a and 30b of the District Court.
2. The sufficiency of the complaint when challenged by the Illinois statute of limitations or the equitable bar of laches. Counsel assume that both of such questions are properly before the court on the motion to dismiss.
Plaintiff contends that this proceeding is one in equity and that, therefore, the statute of limitations is not applicable, as it concededly would be in a suit as law. Defendant asserts that this proceeding is in fact a suit at law, or in all events is a suit cognizable in either law or equity; that in either event the five year Illinois statute of limitations, Ill. Rev. Stat. 1939, c. 83, § 16, is a bar to recovery; that even though the court declines to ...