1. Equity Rule 75b, which prescribes the form and manner in
which the evidence in a suit in equity in the district court may be
made a part of the record therein for the purposes of an appeal, is
authorized by Rev.Stats. §§ 913, 917. P.
275 U. S.
381.
2. Equity Rule 75b applies to cases to be appealed to the
circuit court of appeals. The Act of February 13, 1911, which
relates to the manner of making up and printing the transcript of
record of every kind of action or suit where review is sought in
that court, and which provides that the transcript shall contain,
inter alia,
"such part or abstract of the proofs as the rules of such
circuit court of appeals may require, and in such form as the
Supreme Court of the United States may by rule prescribe,"
did not withdraw from this Court the power of regulation on
which Equity Rule 75b depends. P. 381.
Page 275 U. S. 373
3. The excepting clause of the Rule, providing that "if either
party desires it, and the court or judge so directs, any part of
the testimony shall be reproduced in the exact words of the
witness," applies only to such parts as need to be examined in that
form to be rightly understood; as to other parts of the evidence,
it neither qualifies nor relaxes the direction for condensation and
narration. P.
275 U. S.
383.
4. A total failure to comply with Rule 75b is not condoned by
the Act of Feb. 26, 1919, directing that technical errors and
defects not affecting the substantial rights of the parties shall
be disregarded. P.
275 U. S.
384.
5. The district court has jurisdiction to conform a transcript
to Equity Rule 75b when remitted to it for that purpose by the
circuit court of appeals after an appeal of the case. P.
275 U. S.
385.
6. Expiration of the term of the district court at which the
decree was entered without reservation of further time for settling
a statement of the evidence does not affect the power of the
district court to act under Rule 75b. P.
275 U. S.
385.
7. When evidence taken in a court cannot be identified by the
judge because of his death, and evidence taken by a master bears
neither his certificate nor the file mark of the clerk, resort may
be had to other means of identification. P.
275 U. S.
385.
8. Affirmance of the decree
held too severe a penalty
to be inflicted by the circuit court of appeals for failure to obey
the requirements of Equity Rule 75b concerning condensation and
narration in view of previous indulgence of such violations by that
court and the district courts of the circuit. P.
275 U. S.
386.
9. In such a case,
held that the transcript should be
remitted to the district court for compliance with the rule, upon
condition that the appellant pay a sum specified into the circuit
court of appeals to reimburse the appellee for counsel fees and
expenses incurred in securing elimination of the objectionable
statement of evidence, besides the costs here and in the circuit
court of appeals. P.
275 U. S.
387.
16 F.2d 751 reversed.
Certiorari, 274 U.S. 728, to a decree of the circuit court of
appeals, affirming a decree of the district court in a patent
infringement suit upon the ground that the evidence had not been
brought into the record in accordance with Equity Rule 75b.
Page 275 U. S. 374
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
The principal questions to be considered relate to the steps
whereby evidence in a suit in equity in a district court may be
made a part of the record for the purpose of an appeal, and to the
action which the appellate court appropriately may take where the
requirements in that regard are not followed. To show how the
questions arise and the circumstances bearing on their solution,
the case will be stated with some detail.
The suit was brought January 30, 1915, to obtain an injunction
against the infringement of letters patent and to recover profits
made out of the infringement. The answer put in issue the
plaintiff's title, the validity of the letters patent, and the
infringement. A hearing at which evidence, both oral and
documentary, was received resulted, February 20, 1917, in an
interlocutory decree whereby the issues were resolved in the
plaintiff's favor and the cause was referred to a master, with
directions to ascertain the profits, to take evidence to that end,
and to report his findings "together with all evidence" taken
before him.
See 240 F. 749. The decree recited that the
evidence underlying it was "filed" in the cause.
The defendant neither did nor could appeal from the
interlocutory decree, for it did not grant an injunction; the
letters patent having expired shortly before it was entered. To
have it reviewed, the defendant must await the
Page 275 U. S. 375
final decree and appeal from that, which would bring under
review the entire proceedings, if challenged in the assignments of
error.
Up to and including the entry of the interlocutory decree, the
proceedings were had while Judge Humphrey was holding the district
court. He died June 14, 1918, while the master was proceeding with
the accounting, and the subsequent proceedings in that court were
had before Judge FitzHenry.
January 6, 1921, the master filed his report finding that the
defendant's profits from the infringement were $650,044.83, and
recommending that the plaintiff recover that sum. When filing the
report, the master also turned in the evidence taken before him,
but omitted to say so in the report. He should have attached to the
evidence a certificate stating that it was the evidence, and all
the evidence, taken before him, but he failed to attach any
certificate. The clerk, although receiving the evidence as turned
in by the master, omitted to put a filing indorsement thereon.
Both parties files exceptions to the report; the exceptions
purporting to be based on the evidence and treating it as duly
reported. A hearing on the exceptions resulted, April 30, 1924, in
a final decree overruling the exceptions, confirming the report,
and awarding the plaintiff the sum reported by the master, with
interest and costs. In a memorandum opinion explaining the rulings,
the court indicated that the evidence taken by the master was
before it and was extensively examined.
July 1, 1924, the defendant sought and the district judge
allowed an appeal from the final decree to the circuit court of
appeals. Both that decree and the interlocutory decree were
challenged in the assignments of error, each as being without
support in and contrary to the evidence underlying it.
Page 275 U. S. 376
At the appellant's instance. the time for filing a transcript of
the record in the court of appeals was enlarged a year by
successive orders of the district judge. During that period, the
appellant, on its own responsibility, prepared, printed, and lodged
with the clerk for certification a proposed transcript. This
transcript was in nine volumes, about 5,000 pages, and consisted
mostly of evidence set forth without any approval or authentication
by the court or judge, and without appreciable attempt at
condensation or narration, save as some exhibits may have been
omitted.
April 24, 1925, after lodging the proposed transcript with the
clerk and delivering a printed copy thereof to the appellee, the
appellant filed with the clerk and served on the appellee a
praecipe designating what should be included in the certified
transcript -- the designation conforming to what the appellant had
embodied in the transcript proposed. The praecipe described the
evidence to be included as "printed pages 24 to 1215, inclusive,"
which were the pages of the proposed transcript purporting to set
forth the evidence underlying the interlocutory decree, and certain
other "printed pages," which were the pages of that transcript
purporting to contain the evidence taken before the master and
accompanying his report. The appellee made no objection to the
praecipe, to the designation of the evidence, or to the form in
which the same was set forth at the pages indicated, nor did it
file a praecipe for anything more. Accordingly, the clerk, on June
24, 1925, attached to the proposed transcript his certificate
stating that it was true, complete, and prepared in accordance with
the praecipe.
July 3, 1925, the appellant filed the certified transcript in
the court of appeals, but omitted to file therewith the requisite
copies. These were supplied four months later.
Page 275 U. S. 377
November 3, 1925, the appellant requested the circuit court of
appeals to divide the argument on the appeal by first hearing and
deciding the questions arising on the interlocutory decree and, if
it was sustained, then hearing and deciding the questions arising
on the final decree. The appellee objected to this, and in that
connection suggested (a) that all evidence appearing in the
transcript be stricken therefrom, because not stated in simple and
condensed form, and, where consisting of the testimony of
witnesses, not stated in narrative form, but set forth in full in
the original form, contrary to Rule 75b of the Equity Rules, and
(b) that the evidence received at the hearing which resulted in the
interlocutory decree be stricken from the transcript, for the
further reason that it was not approved or authenticated by the
court or judge as required by that rule. November 9, 1925, the
request to divide the argument was denied, and consideration of the
suggestions that the evidence be stricken from the transcript was
postponed until the hearing on the merits.
January 29, 1926, at the appellant's instance, the circuit court
of appeals remitted the transcript to the district court to enable
it to "amend its certificate of evidence," and to make
"such further amendment, correction, or amplification as the
district judge may, upon his attention's being brought to the
matter, see fit to make respecting the certification of the
record."
In this order, the circuit court of appeals expressly retained
jurisdiction of the appeal, directed that the transcript, when
corrected, be returned to that court, and reserved all questions
respecting the validity and effect of the correction until the
hearing on the merits.
March 29, 1926, the appellant presented to the district court a
motion asking it to "append its certificate of evidence" to the
remitted transcript, and further to amend, correct, or amplify the
certification of the record
Page 275 U. S. 378
as it might deem proper. The appellee had due notice of this
motion, appeared specially for the sole purpose of challenging the
court's power to grant the motion, and declined to take any further
part in that proceeding. The court called and examined some of its
officers respecting the identity of the evidence received and filed
at the time of the hearing before Judge Humphrey which resulted in
the interlocutory decree, and found from such examination that that
evidence was truly and completely set forth in the transcript. The
court further found that specified exhibits were put in evidence
before the master and reported by him, and, supposing that they
were not included in the original transcript, it ordered that they
be embodied in a supplemental transcript. Neither party made any
effort at that time to have the evidence condensed or the testimony
put in narrative form. On the contrary, it appears from the court's
order that the appellant requested, and the court directed, that
"all the testimony in this cause be reproduced in the exact words
of the witnesses, and not in narrative form." The order further
said:
"And pages 24 to 4872, inclusive, of the transcript of record
heretofore certified by the clerk of this Court on June 29, 1925,
amended and supplemented as herein directed, are hereby approved as
a true, complete, and properly prepared statement of the
evidence."
There was no other approval or authentication by the court or
judge.
April 13, 1926, the original transcript was returned to the
circuit court of appeals, accompanied by a supplemental transcript,
designated volume 10, setting forth the later proceedings in the
district court and the exhibits, which it directed to be included
as part of the evidence taken and reported by the master.
October 6, 1926, the cause was heard on the merits in the
circuit court of appeals. At this hearing, the appellee renewed its
prior suggestions that the evidence be stricken
Page 275 U. S. 379
from the transcript because not brought into the record
conformably to Rule 75b of the Equity Rules, and also insisted that
the situation had not been changed by the later proceeding in the
district court, because (a) that court was at the time without any
power to act in the matter, and (b) if having power, had not
conformed its action to the requirements of that rule.
December 13, 1926, the circuit court of appeals held that the
evidence had not been brought into the record in accordance with
Rule 75b, and for that reason declined to examine the evidence and
affirmed the decree of the district court. 16 F.2d 751. The
appellant promptly sought a rehearing on the ground, among others,
that, if Rule 75b applied and had not been followed, the
circumstances were such that the court, in the exercise of a sound
discretion, should not have affirmed the decree, but should have
remitted the transcript to the district court so that compliance
with the rule might be had. A rehearing was denied, and, on the
appellant's petition, a writ of certiorari was granted by this
Court to the end that it might consider and determine the
procedural questions involved.
To avoid possible confusion in the further reference to the
parties, they will be designated as they were in the circuit court
of appeals -- the petitioner as appellant, and the respondent as
appellee.
In the federal courts, evidence received in a suit in equity
usually has been regarded as becoming a part of the record only
where made so by some act of the court or judge. In the beginning,
either of two acts sufficed for the purpose. One was to make an
appropriate recital in the decree. The other was to state the
evidence or its substance in a separate writing, which was to be
filed and deemed a part of the record. Both courses were sanctioned
by a provision in the first practice statute. [
Footnote 1] That
Page 275 U. S. 380
provision remained in force only a short period, but the
practice continued to be recognized. [
Footnote 2]
In 1912, the matter was dealt with in the Equity Rules, which
rest largely on statutes [
Footnote
3] investing this Court with power "generally to regulate the
whole practice to be used in suits in equity" in the district
courts. Rule 75b (226 U.S. appendix, 23) provides:
"(b) The evidence to be included in the record shall not be set
forth in full, but shall be stated in simple and condensed form,
all parts not essential to the decision of the questions presented
by the appeal being omitted and the testimony of witnesses being
stated only in narrative form, save that, if either party desires
it, and the court or judge so directs, any part of the testimony
shall be reproduced in the exact words of the witness. The duty of
so condensing and stating the evidence shall rest primarily on the
appellant, who shall prepare his statement thereof and lodge the
same in the clerk's office for the examination of the other parties
at or before the time of filing his praecipe under paragraph (a) of
this rule. He shall also notify the other parties or their
solicitors of such lodgment, and shall name a time and place when
he will ask the court or judge to approve the statement, the time
so named to be at least ten days after such notice. At the
expiration of the time named or such further time as the court or
judge may allow, the statement, together with any objections made
or amendments proposed by any party, shall be presented to the
court or the judge, and if the statement be true, complete, and
properly prepared, it shall be approved by the court or judge, and
if it be not true, complete, or properly prepared, it shall be
made
Page 275 U. S. 381
so under the direction of the court or judge, and shall then be
approved. When approved, it shall be filed in the clerk's office
and become a part of the record for the purposes of the
appeal."
The appellant contends that this rule can have no application
where the appeal is to a circuit court of appeals, first, because
the Equity Rules rest on statutes which provide for regulating the
practice in the district courts, not that in the circuit courts of
appeals, and secondly because another statute has special and
exclusive application where the appeal is to a circuit court of
appeals. We think the contention must fail for reasons which will
be stated.
It is true that the Equity Rules are based largely on statutes
which authorize this Court to regulate the practice in suits in
equity in "the district courts." But plainly Rule 75b is within
that authorization. It prescribes the form and manner in which the
evidence in suits in equity in those courts may be made a part of
the record therein. The prior practice had varied, and experience
had shown there was need for uniformity and simplicity. The rule
was adopted to meet that need. That it is intended, like the prior
practice, to pave the way for an appellate review extending to the
evidence, does not make it any the less a regulation of proceedings
which are had in the district courts. Its status, therefore, is not
different from that of Rule 71, which requires that decrees be put
in direct and simple form and be free from any recital of the
pleadings, evidence, etc.
The statute which is cited as having special and exclusive
application was enacted February 13, 1911, c. 47, 36 Stat. 901, and
is now section 865 and 866, Title 28, U.S.Code. It relates to the
manner of making up and printing the transcript of the record, in
every kind of action or suit, where review is sought in a circuit
court of appeals. The provision particularly cited speaks first of
the printing and then says that the transcript shall include
among
Page 275 U. S. 382
other things,
"such part or abstract of the proofs as the rules of such
circuit court of appeals may require, and in such form as the
Supreme Court of the United States shall by rule prescribe."
The provision is loosely phrased, but its meaning is fairly
plain. What it says about including proofs doubtless refers to
evidence which has become a part of the record in the district
court through a settled bill of exceptions where the case is at
law, [
Footnote 4] or through an
approved statement where the case is in equity. Nothing in the
provision evinces a purpose to dispense with either mode of
authenticating and preserving the evidence as a part of the record.
The concluding clause, "in such form as the Supreme Court of the
United States shall by rule prescribe," obviously reserves to this
Court some power of regulation and is not lightly to be put aside.
The appellant treats it as relating merely to the form in which the
printing is to be done. But the context makes for a broader
application. The direction for the printing and that for making up
the transcript are both in a single sentence which ends with that
clause. Taken in its natural sense, the clause qualifies both
directions. We think that is the sense intended, and that the
clause makes it rather plain that there was no purpose to withdraw
from this Court the power of regulation on which Rule 75b depends.
The appellant cites our decision in
Rainey v. Grace &
Co., 231 U. S. 703, as
if it were to the contrary. But this is a mistaken view. The
question presented there related to the printing of the transcript
and to the fees to be charged in that connection. Nothing was
decided or said respecting the question presented here.
The appellant next, assuming the rule applies, contends that it
was complied with. We perceive no tenable basis for this
contention.
Page 275 U. S. 383
Up to the certification of the original transcript, nothing
required by the rule had been done. In that situation, the evidence
should not have been included.
After the transcript was remitted to the district court with a
view to action under the rule, that court entered an order (a)
directing at the appellant's request that "all the testimony" be
stated "in the exact words of the witnesses;" and (b) approving the
particular pages of the transcript where the evidence, oral and
documentary, was set forth -- 4,849 pages in all -- "as a true,
complete and properly prepared statement of the evidence." This
order is the asserted basis of the contention that the rule was
complied with. But it does not support the contention. It proceeds
on the erroneous assumption that, where either party so requests,
the court may dispense entirely with the condensation and narration
of the testimony of witnesses, and direct that it be stated in full
in their words. The rule says that the evidence "shall not be set
forth in full," but shall be stated "in simple and condensed form,"
that all that is not essential shall be omitted, and that the
testimony of witnesses shall be stated "only in narrative form,
save that, if either party desires it, and the court or judge so
directs, any part of the testimony shall be reproduced in the exact
words of the witness." Manifestly the excepting clause is intended
to have only a limited operation, and to be applied in the course
of the required condensation and narration, as special occasion
therefor arises. Its purpose is to provide for the exact
reproduction of such parts of the testimony as need to be examined
in that form to be rightly appreciated. As to other parts of the
evidence, it neither qualifies nor relaxes the direction for
condensation and narration.
Buckeye Cotton Oil Co. v.
Ragland, 11 F.2d 231, 232.
The transcript shows that in fact no part of the evidence was
condensed or put in narrative form, and also that, as to nearly all
of the testimony, there was no occasion for
Page 275 U. S. 384
reproducing it in the words of the witnesses. Had the rule been
complied with, the evidence would have been reduced in volume
two-thirds or more, and had this work been done at the outset, the
charge for printing would have been proportionally less -- probably
more than enough to offset the cost of compliance. One object of
the rule is to eliminate immaterial and redundant matter, and to
effect such a condensation and statement of what remains as will
simplify and facilitate the task of counsel in presenting, and of
the court in determining, questions turning on the evidence. Here,
the requirement looking to the attainment of that object was wholly
neglected.
The appellant invokes the statute which directs that technical
errors and defects not affecting the substantial rights of the
parties be disregarded. [
Footnote
5] But the error here is not merely abstract or formal. It
consists of a total failure to observe an important regulation in a
matter of substance. Nor is it harmless. It makes the case
difficult of presentation by counsel, and materially augments the
task of examination and decision by the court. Repetition of it in
other cases would soon congest the dockets of the appellate courts.
To condone such an error is not, we think, within the purpose of
the statute.
The next question is whether there were circumstances which
should have impelled the circuit court of appeals, in the exercise
of a sound discretion, to remit the transcript to the district
court again, so that full compliance might be had with the rule.
The pertinent circumstances are not in controversy, save as the
parties interpret them differently.
As a remission which necessarily must be futile would not be
proper, we shall notice at the outset three matters
Page 275 U. S. 385
which the appellee insists would prevent a remission from being
effective. The first is that jurisdiction of the cause passed from
the district court to the circuit court of appeals when the appeal
was perfected. From this it is argued that the district court would
be without power to take any action in the cause during the
pendency of the appeal. We recognize the principle intended to be
invoked, but think it does not go so far. The circuit court of
appeals, by remitting the transcript for compliance with the equity
rule, would be in effect directing action in aid of its appellate
jurisdiction, and the district court, in conforming to the
direction, would be recognizing, rather than encroaching, on that
jurisdiction. The second matter is that the term of the district
court at which the decree was entered expired shortly thereafter
without any reservation of further time for settling a statement of
the evidence. This, it is said, put an end to the district court's
power to act under the equity rule. We think otherwise. Power to
act under that rule is not confined to the term at which the decree
is rendered, nor to a period allowed during that term. Such a
restriction was not recognized in the early practice, and is not
expressed in the rule. Other rules, such as 69 and 72, show that,
where a restriction of that nature is intended, it is expressed.
This interpretation of the rule has been adopted by the circuit
court of appeals, so far as they have spoken on the subject.
[
Footnote 6] The third matter
is that, by reason of the death of Judge Humphrey, who presided at
the interlocutory hearing, the master's failure to attach a
certificate to the evidence taken before him, and the clerk's
failure to place a filing indorsement thereon, the usual and
favored means of identifying the evidence are not available.
Page 275 U. S. 386
We think what is said in the forepart of this opinion shows that
other adequate means of identification are at hand. The district
court experience no difficulty in this regard when it made the
order of approval under the first remission.
We come then to the circumstances bearing on the question of
discretion. The rule was promulgated in 1912. The requirement
respecting condensation and narration was not drawn from the
earlier practice, but was new. Its enforcement was slowly
approached. For a time, transgression was indulgently overlooked.
Then this Court and some of the circuit courts of appeals, having
called special attention to the requirement, began to give effect
to it. [
Footnote 7] The circuit
court of appeals for the Seventh Circuit continued to be uniformly
indulgent until it came to decide this case. There may have been
some scolding before, but not in the court's opinions. It was a
common practice in that circuit for the judges, circuit as well as
district, to direct that all the testimony be reproduced in the
words of the witnesses. In so directing in this case, the district
court followed that practice. Of course, the practice was in
contravention of the equity rule, and the circuit court of appeals
was right in giving effect to the rule by declining to examine the
mass of evidence wrongly reproduced. But the court did not stop
there. It also affirmed the decree, because of the transgression,
and this notwithstanding the transgression was largely due to its
own course of action. That was a very severe penalty to impose for
action which had the court's implied sanction
Page 275 U. S. 387
up to that time. The fact is not overlooked that, after the
original transcript was filed, the appellee called attention to the
requirement for condensation and narration and asked that the rule
be given effect. But regard also is had for the fact that, when the
transcript was remitted, the district court directed the
reproduction of the testimony without condensation or
narration.
When the particular situation in the Seventh Circuit is
considered, we think it is apparent that the circuit court of
appeals passed the bounds of a sound discretion in affirming the
decree, because of the transgression, and that, upon proper terms,
it should have remitted the transcript to the district court to the
end that a further opportunity might be had to comply with the
equity rule. Such a remission should still be made, care being
taken to require that the proceedings under the rule be conducted
with reasonable dispatch.
As the rule places the duty of condensing and narrating the
evidence primarily on the appellant, and most of the proceedings
since the appeal have been attributable to the failure to discharge
that duty, the appellant should be required, as one of the terms of
the remission, to pay into the circuit court of appeals $5,000 for
the benefit of the appellee, by way of reimbursing it for counsel
fees and expenses incurred in securing the elimination of the
irregular and objectionable statement of the evidence, and also to
pay, as one of such terms, the costs in this Court and those in the
circuit court of appeals up to the time our mandate reaches that
court.
The decree of the circuit court of appeals accordingly is
reversed, and the cause is remanded to that court for further
proceedings in conformity with this opinion.
Decree reversed.
[
Footnote 1]
Act Sept. 24, 1789, c. 20, § 19, 1 Stat. 83.
[
Footnote 2]
Conn v. Penn,
5 Wheat. 424;
Blease v. Garlington, 92 U. S.
1;
Watt v. Starke, 101 U.
S. 247,
101 U. S. 250;
Southern Building & Loan Assn. v. Carey, 117 F. 325,
333-334; 2 Street, Fed.Eq. Pr. §§ 1629, 1630;
Railway Co. v.
Stewart, 95 U. S. 279,
95 U. S.
284.
[
Footnote 3]
R.S. §§ 913, 917; U.S.Code, Tit. 28, §§ 723, 730.
[
Footnote 4]
See § 776, Title 28, U.S.Code; Rule 7, 266 U.S. 657;
Mussina v.
Cavazos, 6 Wall. 355,
73 U. S. 363.
[
Footnote 5]
Act Feb. 26, 1919, c. 48, 40 Stat. 1181; U.S.Code, Title 28, §
391.
[
Footnote 6]
In re General Equity Rule 75, 222 F. 884;
Struett
v. Hill, 269 F. 247;
Sussex Land & Live Stock Co. v.
Midwest Refining Co., 294 F. 597.
[
Footnote 7]
Louisville & Nashville R. Co. v. United States,
238 U. S. 1,
238 U. S. 10-11;
Newton v. Consolidated Gas Co., 258 U.
S. 165,
258 U. S. 173;
Houston v. Southwestern Bell Telephone Co., 259 U.
S. 318,
259 U. S. 325;
Patterson v. Mobile Gas Co., 271 U.
S. 131,
271 U. S. 132;
Brictson Mfg. Co. v. Close, 280 F. 297, 299;
Roxana
Petroleum Co. v. Rush, 295 F. 844, 846.