Decca Records v. Republic Recording Company
| Decision Date | 01 August 1956 |
| Docket Number | No. 12656.,12656. |
| Parties | DECCA RECORDS, Inc., Appellant, v. The REPUBLIC RECORDING COMPANY, Inc., Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Henry Cohen, New York City, Charles P. Taft, Cincinnati, Ohio, on briefs for appellant.
Alexander & Alexander, Franklin, Tenn., Ward Hudgins, Nashville, Tenn., for appellee.
Before SIMONS, Chief Judge, and ALLEN and McALLISTER, Circuit Judges.
The Republic Recording Company brought suit against Decca Records, Inc., claiming that it had a contract dated February 9, 1953, for the exclusive services of Del Wood, a pianist; that it had expended considerable sums of money to record a number of her compositions for distribution and sale; that Decca, knowing of the existence of this contract, had released sales of recordings of Del Wood, which Decca had caused to be made prior to February 9, 1953, "thereby holding * * * out to the trade * * * that Decca had the right to the use of the services of said Del Wood," causing Republic irreparable injury for which it sought $25,000 in damages. At the same time that Republic sued Decca, Del Wood also sued Decca; and the two cases were consolidated for trial. We are not informed by the record of the basis of Del Wood's suit against Decca, but it probably was without any merit. The same lawyer represented Del Wood and Republic in the two suits, and at the conclusion of Republic's proofs, he moved that Del Wood's case be dismissed with prejudice. She never appeared in court, the explanation being that she was in the adjacent state of Alabama on a tour of seven or eight days' duration. Accordingly, her case was dismissed with prejudice on her own attorney's motion. Almost a year after filing its complaint in the instant case, Republic moved that the complaint be amended by increasing its claim for damages from $25,000 to $75,000; and its motion was granted.
Upon trial of the issues, and a further amendment of the complaint, the district court entered a judgment in favor of Republic against Decca in the amount of $6,455.04 as actual damages, and $40,000 as punitive damages; and Decca appeals.
The original complaint set forth that Decca, by releasing the records that had been recorded for it by Del Wood prior to her contract with Republic, thereby held out to the distributors and the public "that Decca had the right to the use of the services of said Del Wood" and that this holding out to the public had resulted in the damages suffered by Republic. It is doubtful whether this complaint stated a cause of action. However, on the last day of a three-day trial, appellee, Republic, moved to amend its complaint by an additional allegation to the effect that it had acquired by purchase all of the contractual rights existing between Del Wood and Tennessee Records, Inc., whose entire assets appellee had acquired by a purchase agreement dated February 9, 1953. By this amendment, which the trial court allowed, appellee sought to show that Decca had caused Del Wood to break her contract with Tennessee Records, Inc.; and that Republic was entitled to damages, as assignee of Tennessee Records, because of such breach of contract by Del Wood and because of its inducement by Decca.
In spite of the confusing background of the controversy and the variety and complexity of contentions advanced by the parties on appeal, we are of the view that the determination of a single issue is decisive of the case. That issue is: Did Decca induce Del Wood to break her contract with Tennessee Records? If Decca was not guilty of such inducement, Republic has no case, for it must rely upon the claimed breach of contract by Del Wood, and its inducement by Decca.
On November 29, 1950, Tennessee Records entered into a union contract with the American Federation of Musicians. This contract provided that if Tennessee Records were placed on the union's "unfair list," any members of the union employed by Tennessee Records "shall be free to accept and engage in other employment of the same or similar character * * * for other employers * * * without any restraint, hindrance, penalty, obligation or liability whatever."
On March 26, 1952, Tennessee Records was placed upon the union's "unfair list" after a hearing upon charges that it had violated union rules as to work periods and wage scales. Two days later, on March 28, 1952, the union ordered Del Wood to perform no further services for Tennessee Records.
Up to the time that the union placed Tennessee Records on its "unfair list" and ordered Del Wood to perform no further services for it, there is no claim that Del Wood had breached her contract, or that Decca had induced her to do so.
After Tennessee Records had been placed on the union's "unfair list," Del Wood, on March 29, 1952, made the recordings for Decca, here in question, which appellee contends constituted a breach of her contract with Tennessee Records, and which alleged breach, appellee further contends, was wrongfully induced by Decca.
The district court held that even though Tennessee Records had been placed on the union's "unfair list," the contract between Tennessee Records and the union was immaterial to this case, since there was no competent, credible evidence that Del Wood had ever been a member of the union. It may, perhaps, be true that if she had not been a member of the union, the contract between the union and Tennessee Records would not have affected her. In such a case, the fact that the company had been placed on the union's "unfair list" might not have had any bearing upon Del Wood's contract with Tennessee Records, as only a member of the union, in such circumstances, would, according to the union agreement, be freed from her contract with Tennessee Records, and at liberty to contract for her services with other parties.
The crucial question, therefore, is whether or not Del Wood was a member of the union. The contract between the union and Tennessee Records provided that its terms "be deemed a part of all contracts" between Tennessee Records and members of the union, and that any members who were affected by the contract, and whose services were suspended by reason of any "unfair list" promulgated by the union, should be free to accept and engage in other employment of the same character for other persons without penalty or liability. This third party beneficiary contract covered all union members by its terms, and contemplated the incorporation, in the separate contracts of employment of each member of the union, of the conditions of...
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