Glass v. Hoblitzelle

• Decision Date: 06 April 1935
• Docket Number: No. 11961.,11961.
• Citation: 83 S.W.2d 796
• Parties: GLASS v. HOBLITZELLE et al.
• Court: Texas Court of Appeals

83 S.W.2d 796

GLASS v. HOBLITZELLE et al.

No. 11961.

Court of Civil Appeals of Texas. Dallas.

April 6, 1935.

Rehearing Denied June 1, 1935.

Appeal from District Court, Dallas County; W. M. Taylor, Judge.

Suit by R. Z. Glass against Karl Hoblitzelle and others. From an interlocutory order refusing a temporary injunction, plaintiff appeals.

Affirmed.

Pat S. Russell, of Dallas, for appellant.

John R. Moroney, Thompson, Knight, Baker & Harris, and George S. Wright, all of Dallas, for appellees.

LOONEY, Justice.

This appeal is from an interlocutory order refusing a temporary injunction. R. Z. Glass, appellant, owner and operator of two second or subsequent run motion picture theaters in the city of Dallas, brought this suit for himself and others similarly situated, against appellees, owners and operators of class A theaters in Dallas, exhibiting first-run motion pictures.

Appellant alleged in substance that, since about June 1, 1934, he (and others similarly situated) had not been able to obtain from producers and distributors motion picture films with the privilege of exhibiting same in his theater at admission prices fixed by himself; that this interference with his right to manage his business in his own way was due to an unlawful agreement and conspiracy, between appellees and the major producing and distributing companies, originating as follows: That appellees threatened said major producing and distributing companies to discontinue taking their motion picture films for exhibition unless the latter in their contracts with the owners and operators of second-run theaters, including appellant, would obligate them to charge an admission price of at least 25 cents for all pictures for which appellees charge on first run an admission of at least 40 cents, and forbidding the exhibition of such pictures within 75 days after their first exhibition by appellees; that such an arrangement was consummated by appellees and said major producers and distributors, by reason of which appellant, and others similarly situated, have been unable to obtain from said producers and distributors picture films for exhibition, without first agreeing to said stipulations with reference to the admission fee and time of exhibition; that such arrangement constitutes and is a conspiracy violative of the anti-trust laws of the state; wherefore, appellant prayed for injunctive relief, temporary and permanent, enjoining appellees and each of them from continuing in force such agreements.

Appellees, answering, contended that the contracts with the distributors, under which they were licensed to exhibit motion pictures, being interstate in character, and simply the licensing of copyrighted motion picture films, the anti-trust statutes of the state of Texas were not applicable and that no conspiracy, in law or in fact, existed; that appellant failed to show such probable damage justifying the issuance either of a temporary or permanent injunction, and that the provisions of the National Industrial Recovery Act (48 Stat. 195), as applicable to the motion picture industry, furnished and furnishes appellant a complete remedy for redress of his grievances, if any, which remedy he failed to pursue.

After an exhaustive hearing, the trial court refused appellant's prayer for the temporary writ, and filed findings of fact and conclusions of law that, in our opinion, are fully sustained and are adopted as the holdings of this court on the issues presented. They are as follows: "1. That the contracts made by the several defendants with the distributing companies are made in reference to interstate commerce, and that the anti-trust laws of Texas have no application to such contracts or any alleged conspiracy in reference to the making of said contracts. 2. That the contracts complained of in plaintiff's petition show on their face that they were made for the licensing of copyrighted motion picture films, and the anti-trust laws of the State of Texas have no application to such contracts for the licensing of copyrighted motion picture films. 3. That it appears from the evidence that there was no conspiracy as alleged in plaintiff's petition. 4. That the plaintiffs have not shown such probable damage as would justify injunctive relief. 5. That the National Recovery Act for the motion picture industry furnishes a remedy to the plaintiffs."

Ordinarily, on appeals of this nature, the only question to be considered is whether the trial court abused its discretion in making the interlocutory order appealed from. This general rule was announced in Harding v. W. L. Pierson & Co. (Tex. Com. App.) 48 S.W.(2d) 964, 966, as follows: "The rule is also well established in this state that the granting or refusing of a temporary injunction is within the sound discretion of the district court, and that the court's action will not be disturbed on appeal, unless it clearly appears from the record that there has been an abuse of such discretion." However, as the case has been fully developed, and thoroughly and ably briefed by both sides, we are constrained to discuss at some length the questions presented.

The combined effect of a number of assignments urged by appellant is that the court erred in holding the agreements between appellees and the distributors, interstate in character, hence not amenable to the anti-trust statutes of this state (Vernon's Ann. Civ. St. art. 7426 et seq.). This holding is assailed on the ground that said agreements bear no direct relation to the use or exhibition of motion pictures by appellees, under their exhibition contracts, and even if said contracts originally were interstate in character, that the same was lost when the distributors shipped the picture films to their respective agencies in Texas, to be there serviced and supplied, successively, to appellees and other exhibitors operating under similar contracts.

The counter contention of appellee is that where the owner of a motion picture theater signs in Texas an application to a distributor outside the state of Texas for a license to exhibit a moving picture film, and the application is accepted outside the state and the picture film is shipped to the local representative of the distributor in the state and supplied by him to the exhibitor under the license contract and after being exhibited is returned to said representative, and then is supplied to other exhibitors under contracts similarly made, that the transaction is interstate in character, and the Texas anti-trust laws have no application thereto, or to any alleged conspiracy incident to the making of such contract.

Each of the contracts between the distributor and exhibitor was made and carried out substantially in the following manner: The exhibitor would sign in Dallas, Tex., an application for a license contract of a copyrighted motion picture film; the contract attached to the application provided that it should not become effective until accepted at the home office of the respective distributor, either in New York or some other place outside the state of Texas. After being signed in Texas, the application was forwarded to the home office of the respective distributor outside the state, where it was accepted or rejected. If accepted, it became a contract for the licensing of a copyrighted motion picture film for a certain period of time, giving the exhibitor merely the right to exhibit the picture during such time and obligating him to return the picture to the distributor. After the acceptance of the contract, the distributor would ship the picture films described in the contract to its local representative in Texas for delivery to the exhibitor having the license contract, who, after exhibiting same for the required time, would return it to said local representative of the distributor, who would then supply the film to other exhibitors having similar contracts.

As above shown, the trial court found that these contracts were interstate in character, and that the anti-trust laws of Texas had no application thereto. In Binderup v. Pathe Exchange, reported in 263 U. S. 291, 44 S. Ct. 96, 99, 68 L. Ed. 308, with reference to a similar contention as to the nature of the contracts there involved, the court said: "The film contracts were between residents of different states, and contemplated the leasing by one to the other of a commodity manufactured in one state and transported and to be transported to and used in another. The business of the distributors of which the arrangement with the exhibitor here was an instance, was clearly interstate. It consisted of manufacturing the commodity in one state, finding customers for it in other states, making contracts of lease with them, and transporting the commodity leased from the state of manufacture into the states of the lessees. If the commodity were consigned directly to the lessees, the interstate character of the commerce throughout would not be disputed. Does the circumstance that in the course of the process the commodity is consigned to a local agency of the distributors, to be by that agency held until delivery to the lessee in the same state, put an end to the interstate character of the transaction and transform it into one purely intrastate? We think not. The intermediate delivery to the agency did not end and was not intended to end the movement of the commodity. It was merely halted as a convenient step in the process of getting it to its final destination. The general rule is that where transportation has acquired an interstate character `it continues at least until the load reaches the point where the parties originally intended that the movement should finally end.' * * * Interstate commerce includes the interstate purchase, sale, lease, and exchange of commodities and any combination or conspiracy which unreasonably restrains such purchase, sale, lease or exchange is within the terms of the Anti Trust Act, denouncing as illegal every...