American Machine & Metals, Inc. v. DeBothezat Impeller Co.

United States Court of Appeals for the Second Circuit · Civil Procedure

173 F.2d 890 (1949)

Updated July 19, 2026

Civil ProcedureAppealabilityInterlocutory AppealsDeclaratory Judgmentinjunctionequitable defensepretrial orderinterlocutory appeal

Facts

Plaintiff brought a suit for declaratory judgment to determine whether it had the right to terminate its contract with defendant. Defendant pleaded that plaintiff had no right to terminate, and alternatively asserted that even if such a right otherwise existed, the court should not permit its exercise because of plaintiff's inequitable conduct; defendant also sought money damages based on that conduct. The district judge ordered that defendant's damages claim be tried later and that defendant's claim for equitable relief be rejected once and for all, without trial. Defendant appealed from that rejection, while plaintiff argued the order was not appealable.

Issue

Whether a pretrial order rejecting a defendant's claim for equitable relief in a declaratory judgment action that is effectively legal in character is appealable as an order refusing an injunction under 28 U.S.C. § 1292. Also, whether the absence of a formal motion to stay the legal issues and the use of pretrial procedure defeat appealability.

Rule

When a party asserts equitable relief that, before the 1915 statute permitting equitable defenses in actions at law, would have required a separate suit in equity to enjoin the action, an order granting or denying that relief is treated as one granting or refusing an injunction and is appealable under 28 U.S.C. § 1292. That rule applies even after the Federal Rules of Civil Procedure, and it applies in a declaratory judgment action if the action is in substance the equivalent of an action at law.

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In Denver, Alpine Forge Supply filed a declaratory judgment action against Mesa Turbine Parts seeking a ruling that it could cancel a distribution contract without incurring liability. Mesa answered that Alpine had no right to cancel and also alleged that, even if cancellation were otherwise allowed, Alpine's inequitable conduct should bar the court from permitting cancellation; the district judge entered a pretrial order permanently rejecting only that equitable contention before trial.

Is Mesa most likely entitled to an immediate appeal from the portion of the order rejecting its equitable contention?

Explanation. The majority held that when a party asserts equitable relief which, before the 1915 statute, would have required a separate suit in equity to enjoin the action, an order granting or denying that relief is treated as an order granting or refusing an injunction. If the underlying suit is in substance legal, that order is appealable under 28 U.S.C. § 1292 even though issued through pretrial procedure.