Krinsley v. United Artists Corp.
Decision Date | 10 August 1955 |
Docket Number | No. 11191.,11191. |
Citation | 225 F.2d 579 |
Parties | Lazarus KRINSLEY, Plaintiff-Appellee, v. UNITED ARTISTS CORP., Defendant-Appellee, and Frances Papas et al., Adm., etc., et al., Defendants-Cross-Claimants-Appellants. |
Court | U.S. Court of Appeals — Seventh Circuit |
Thomas C. McConnell, Chicago, Ill., James O. Smith, Chicago, Ill., for appellant.
David Levinson, Harold D. Shapiro, Raymond Harkrider, Chicago, Ill., Walter S. Beck, New York City, Harold D. Shapiro, Chicago, Ill., of counsel, for appellees.
Before DUFFY, Chief Judge, and FINNEGAN and SCHNACKENBERG, Circuit Judges.
In his interpleader action filed July 21, 1950, under 28 U.S.C. § 1355, plaintiff Krinsley joined as party defendants United Artists Corporation, C. J. Papas, Milwaukee Towne Corporation (formerly named Miller Theater Corporation), John S. Papas, Spiro J. Papas, Andrew M. Spheeris, Andrew J. Spheeris and George J. Spheeris. These defendants cross-claimed in their consolidated answer to Krinsley's complaint. The gist of the initial pleading pivots on Krinsley's position as escrowee established by an agreement, dated September 17, 1946, between himself, United Artists Corporation and C. J. Papas. These latter two parties deposited three executed contracts with their escrowee, all of which were dated June 11, 1946 and constituted three separate agreements between: (i) United Artists Corporation and John S. Papas, C. J. Papas, Spiro J. Papas, Andrew M. Spheeris, Andrew J. Spheeris, George J. Spheeris, (ii) Miller Theater Corporation and United Artists Corporation and, (iii) Miller Theater Corporation and C. J. Papas.
Stripped of all other commitments the pith of the problem engendered by the escrow arrangement lies in this provision of the escrow agreement:
(Italics supplied.)
United States v. Paramount Pictures, Inc., 1948, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260 precipitated Krinsley's dilemma because Papas directed him to tear off the signatures on all contracts deposited with him, on the theory they were unlawful under that decision. On the other hand Krinsley was instructed by United Artists to turn over the three contracts to it intact. Caught in this conflict, Krinsley sought construction of the escrow agreement below.
In their cross-claim, defendants (except United Artists Corporation) allege that United Artists, in combination with various other producers, exhibitors and distributors engaged in a conspiracy to monopolize the exhibition of motion pictures and the operation of motion picture theaters in Milwaukee, Wisconsin, violative of §§ 1-2, Sherman Anti-Trust Act. 15 U.S.C.A. §§ 1-2. That conspiracy, according to cross-claimants, supplied the economic coercion for and environment of duress under and by which the three contracts were executed. They also alleged that acquisition of stock contemplated in those agreements was illegal under the holding in United States v. Paramount Pictures, 1948, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260. Accordingly, cross-claimants sought a decree, below, enjoining enforcement of the three agreements, on deposit, and requiring cancellation of shares held by United Artists in Milwaukee Towne Corporation.
United Artists' motion to dismiss this cross-claim was denied after a hearing and briefing. Its attack on the cross-claim rested upon these grounds, summarized by the district judge 94 F. Supp. 480: "(1) It does not state a claim under the anti-trust laws of the United States; (2) It prays for cancellation of shares of stock allegedly acquired in violation of the anti-trust laws, which is not a remedy provided for in the pertinent statutes; (3) It fails to allege a claim for rescission of the transaction alleged; (4) It alleges facts showing that cross-claimants' remedy at law is adequate; (5) It does not allege a tender of, or make a tender of the consideration received by cross-claimants in the transaction alleged wherefore said cross-claim is wholly without equity." In his first memorandum, November 24, 1950, the district judge pretty well describes the contours of the terrain shaped by the pleadings:
Then follows rather detailed reasoning by the trial judge on which he rested his view of the case before him in the Paramount case setting. But because of the following aspects of the case, the court below thought invocation of Rule 53(b), Federal Rules of Civil Procedure, 28 U.S.C.A., to be appropriate:
After an extended hearing the master recommended issuance of an order finding the three deposited agreements illegal and void. His detailed report also culminated in suggestions that (i) Krinsley, by decree, be directed to mark those agreements "void" and tear off the signatures, (ii) United Artists be enjoined from making any further claim "to 200 shares of Class B stock of MT Corp.," (iii) the stock "be forthwith returned to MT Corp. upon the payment by it to UA of the sum of $10,000 plus accrued interest at the rate of 5%."
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