Central States Theatre Corporation v. Patz, 4563.

• Decision Date: 10 May 1935
• Docket Number: No. 4563.,4563.
• Citation: 11 F. Supp. 566
• Parties: CENTRAL STATES THEATRE CORPORATION v. PATZ et al.
• Court: U.S. District Court — Southern District of Iowa

11 F. Supp. 566

CENTRAL STATES THEATRE CORPORATION v. PATZ et al.

No. 4563.

District Court, S. D. Iowa, Central Division.

May 10, 1935.

Joseph Brody and L. A. Parker (of Brammer, Brody, Charlton & Parker), both of Des Moines, Iowa, for Central States Theatre Corporation.

James A. Treanor, Regional Litigation Atty., National Recovery Administration, E. G. Moon, U. S. Dist. Atty., of Des Moines, Iowa, and C. I. Level, Asst. U. S. Atty., of Denison, Iowa, for defendants.

DEWEY, District Judge.

On March 22, 1935, a bill in equity was filed in the above-entitled cause asking for a restraining order, a temporary injunction, and a permanent injunction against the defendants from interfering with a certain plan being operated by the plaintiff corporation in the conduct of its motion picture business. A restraining order was issued and the matter set down for hearing on the application for the temporary injunction. By agreement of parties, the hearing was had on the temporary injunction application beginning April 11, 1935, and evidence was submitted, the parties rested, and the matter argued and submitted to the court.

Plaintiff alleges, among other things, for the purpose of increasing interest in its theaters, for advertising and securing additional attendance, plaintiff is operating and conducting what is known as bank night under a contract with Affiliated Enterprises, Inc.; that said contract was entered into on the 1st day of December, 1934, and has been in effect since said time and by its terms continues until January 9, 1936; that said contract provides that plaintiff may conduct an entertainment one night for each week of the entire term of said contract to be known as bank night, for which plaintiff pays the Affiliated Enterprises, Inc., a fixed sum per week during the entire term of the contract.

That said plan consists of and is conducted as follows: "Plaintiff keeps and maintains in the lobby in front of said theatres, and open to the public, a registration book in which any individual may register his or her name, and consecutive numbers are assigned to said names as they are so registered; that on one night of each week at the close of the first performance of that night at approximately 9 o'clock P. M. plaintiff causes to be drawn a number at random from a box containing all of the numbers of said registrants and the registrant whose number is the same as that drawn at said time and place is entitled to, and does receive, the sum of $150.00 or more from the plaintiff; that the only condition attached to such drawing and to the payment of said sum is that the registrant, whose number is so drawn, shall be in or immediately outside of the theatre when such number is drawn and shall immediately present himself to the plaintiff and claim said number, and no registrant is required as a condition, either to the registering or to receiving said sum upon the drawing of his or her number to be inside said theatre, or to have purchased a ticket of admission thereto, or to have paid any sum or given anything of value whatsoever for the privilege of so registering or receiving said sum if and in the event his or her number is drawn at the place and time aforesaid."

The defendants admit that bank night is conducted substantially in the manner as above set forth, and allege, among other things, that "the plaintiff does not come into court with clean hands, because it is conducting a lottery in violation of the laws of the State of Iowa," and because "it is engaged in an enterprise which is contrary to public policy."

The defendants also allege that on or about January 11, 1934, the plaintiff agreed with the Code Authority for the Motion Picture Industry that it would conduct its business of exhibiting motion pictures in conformity with the terms of the Code of Fair Competition for the said industry, and that the conduct of the plaintiff in running bank night constitutes a violation of said code and subjects the plaintiff to the remedies...