Film Enterprises, Inc. v. Selected Pictures, Inc.
| Decision Date | 02 February 1959 |
| Docket Number | No. 18121,18121 |
| Parties | FILM ENTERPRISES, INC., Plaintiff in Error, v. SELECTED PICTURES, INC., and John M. Wolfberg, Defendants in Error. |
| Court | Colorado Supreme Court |
Hodges, Silverstein, Hodges & Harrington, James B. Reed, Denver, for plaintiff in error.
Edward Miller, Denver, for defendants in error.
Plaintiff in error, plaintiff in the trial court, will be referred to herein as Film. Defendant in error Selected Pictures, Inc. will be referred to as Selected, and defendant in error John M. Wolfberg will be referred to as Wolfberg.
In Film Enterprises, Inc. v. Selected Pictures, 1957, 134 Colo. 451, 306 P.2d 252, we upheld the trial court in its denial of Film's motion in this case that the executrix of Harris P. Wolfberg's estate be made a party to this action, Harris P. Wolfberg having died on February 25, 1954. In Film Enterprises, Inc. v. Wolfberg, 1958, 137 Colo. 84, 321 P.2d 218, we held that there was no final judgment on Film's claim against the Harris P. Wolfberg estate pending final action in the case now before us.
In the instant case the trial court entered its findings of fact and judgment denying Film recovery upon a certain film rental contract and denied Film the right to proceed with the second phase of its case wherein it had alleged that the Wolfbergs as directors of Selected had improperly transferred assets from Selected so as to render it unable to pay a judgment if it obtained one in this action.
The record discloses that on March 25, 1948, six years before trial, a contract was executed with Film on behalf of Selected, in the manner hereinafter set forth. At that date Tom H. Bailey was president of Selected. Though the record is confused on this point it appears that at the time in question here John M. Wolfberg and Harris P. Wolfberg with Bailey constituted the Board of Directors and were the sole stockholders in Selected. The Wolfbergs in effect played the role of silent partners because of Bailey not wanting to be publicly associated with them--yet John Wolfberg testified they kept abreast of company affairs and dealt with it in placing and securing films. It appears that Bailey had borrowed $3,000 from a bank to help one H. V. George start Film for the purpose of distributing a film known as Sundown Riders and if George got back his investment of $36,500 in the film, then Bailey was to have a one-half stock ownership in Film. Only three qualifying shares of stock were issued in Film and George has never received his investment although sufficient rentals of Sundown Riders came in to repay Bailey's loan.
In the contract in question Selected agreed to purchase from Film the right to exhibit in a defined area of the United States the movie film in question and pay therefor the sum of $8,170. None of this price has been paid and Film alleges there was to be in addition (under the contract) a purchase of one print of said film by Selected for $108. Selected on the other hand now urges that the purchase of the print was a separate transaction.
We note that Selected's final 'Amended Answer and Counterclaim', in the numerous pleadings, states;
'5. It admits that one print of the motion picture known as 'Sundown Riders' was delivered to the defendant corporation, but denies the other allegations of Paragraph 5.
Film's final 'Amended Complaint' states:
'5. Pursuant to and in accordance with the provisions of Paragraphs 2 and 4 of said agreement, one print of said motion picture were (sic) ordered by the defendant corporation; said order was accepted by plaintiff; and delivery was made by the plaintiff.
The agreement in dispute as attached to the amended complaint reads in pertinent part in regard to the above matter:
'2. The Licensor agrees to furnish the Licensee as many positive prints of said motion picture as Licensor in its sole judgment may deem commercially profitable and necessary for use in said territory at prices hereinafter set forth. The Licensee hereby orders ten prints with respect to each such motion picture and the Licensor hereby accepts such orders. Such prints shall be delivered at the times hereinafter set forth, upon the terms and conditions hereinafter set forth, and delivery of such prints to the Licensee shall be deemed to be delivery of the motion pictures embraced herein, for all purposes, under this agreement.
'3. The Licensee agrees to pay to the Licensor, in consideration of the license herein mentioned, the total sum of $8,170.00 and no further payments or percentage.
'The licensee further agrees in addition to such license fee, to pay to the Licensor for each such motion picture, a sum equal to (.01958) market price per lineal foot for each print, based upon the prevailing market prices, and in case that at any time during the term of this license such prevailing market prices shall be increased, then the prices, hereinabove fixed, shall be increased proportionately. The Licensee shall also pay to the Licensor the cost of cans, containers, packing cases and the cost of handling.
'4. The Licensor shall deliver and the Licensee shall accept delivery of all prints at the laboratory, and such delivery shall be made F.O.B. such labbratory (sic) when tendered by the Licensor.
'Hollywood, California
'where such negative, or negatives, shall remain for a period not to exceed three years during which time the Licensee shall have the right to order positive prints therefrom for the purposes of this agreement to a maximum number of ___ prints, and no more, at the Licensee's sole cost and expense, without any responsibility for the payment therefor on the part of the Licensor.'
During the trial Film amended its complaint to indicate that the sum due Film was $5,000 and asked that its prayer for judgment be reduced accordingly. This arose because George, evidently through error, had written a letter before trial stating that the total sum due was $5,000; this difference had no relation to actual payments made for none had been made on the contract.
The evidence is that John Wolfberg and Bailey saw the picture exhibited in Denver and that thereafter the contract here challenged was entered into. The film was then distributed by Selected and undisclosed sums received therefor. The print of the film above referred to was retained by Selected in the Denver Film Exchange and produced by it from that source at the trial.
Two of Film's witnesses, Bailey and George, testified that they believed that Frank Childs, Selected's office manager, was present several times when the contract was discussed before its execution. Childs' testimony in regard to whether the contract was disucssed with him was 'I have no recollection that I was (consulted).'
The record does show that Tom Smiley assumed the duties of manager at Selected after Bailey and his employee there Frank Childs left and that he found no record of the contract in the company files 'two or three months' later. No witness seemed to know for sure whether Selected continued to distribute the film after Bailey left the company but that it did retain the proceeds from all showings is admitted.
The contract in question was executed on behalf of Film by George and on behalf of Selected by Bailey who signed the name of Childs thereto without disclosing on the contract or expressly disclosing to Childs his so doing. The undisputed evidence is that Childs was not present...
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