Meyer v. Washington Times Co.

• Decision Date: 11 March 1935
• Docket Number: No. 6198.,6198.
• Citation: 64 App. DC 218,76 F.2d 988
• Parties: MEYER v. WASHINGTON TIMES CO.
• Court: U.S. Court of Appeals — District of Columbia Circuit

64 App. DC 218, 76 F.2d 988 (1935)

MEYER v. WASHINGTON TIMES CO.

No. 6198.

United States Court of Appeals for the District of Columbia.

Argued December 3, 1934.

Decided March 11, 1935.

J. Harry Covington, Spencer Gordon, George E. Hamilton, John J. Hamilton, George E. Hamilton, Jr., and Henry R. Gower, all of Washington, D. C., for appellant.

Wilton J. Lambert, R. H. Yeatman, and William E. Leahy, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, HITZ, and GRONER, Associate Justices.

VAN ORSDEL, Associate Justice.

Appellant, the Washington Post Publishing Company, plaintiff below, publishes in Washington a morning paper known as the Washington Post; and defendant, the Washington Times Company, publishes a morning paper known as the Washington Herald. This action was brought to restrain defendant from publishing certain features agreed to be furnished by the Chicago Tribune Syndicate & Press Service, Inc., hereafter referred to as the Tribune Company of Chicago, to the plaintiff's predecessor, the Washington Post Company. From a decree dismissing the bill this appeal was taken.

It appears that the Tribune Company entered into a contract on February 9, 1932, to furnish the Washington Post Company with four comic strips for publication: The Gumps, Gasoline Alley, Winnie Winkle, Dick Tracy, and two articles, one by Dr. Evans and one by Westbrook Pegler, for a consideration of $305 per week. On March 25, 1933, a receiver was appointed for the Washington Post Company; and, under an arrangement with the receiver, the Tribune Company continued the service during the period of the receivership. The Post was sold under order of court at a receivership sale to the Washington Post Publishing Company, plaintiff, which sale was ratified on June 12, 1933. On the same date the receiver executed and delivered to plaintiff company a bill of sale for all the assets of the Washington Post Company, among which was its contract with the Tribune Company, and two days later delivered to plaintiff a separate assignment of the contract.

On June 13, 1933, the day after the receiver executed the bill of sale to the plaintiff company, and the day before he specially assigned the contract, the Tribune Company closed a contract with defendant company to furnish them, exclusively after July 15, 1933, the features involved in the Post Company contract. Plaintiff, by letters of June 17 and 24, 1933, addressed to the Tribune Company and the Chicago Tribune Syndicate & Press Service, Inc., insisted on the performance of its contract, and tendered payment in cash for the features without taking advantage of the credit allowed by the terms of the contract. The Tribune Company, however, ignored its contract with plaintiff, and defendant insisted on its right under its contract to publish the features.

On July 12, 1933, plaintiff brought the present suit for injunction to restrain defendant from interfering with its contract. A temporary restraining order was issued, which was subsequently dissolved by the final order from which this appeal was taken. Plaintiff also instituted in the Supreme Court of New York a suit against the Tribune Company and the Chicago Tribune Syndicate & Press Service, Inc., for specific performance of the contract of February 9, 1932, in which a permanent injunction was obtained. 240 App. Div. 960, 268 N. Y. S. 883. Later the case came to trial upon its merits before the Supreme Court of New York, where it was held that the contract was assignable and had passed to the plaintiff at the receiver's sale, and that plaintiff was entitled to a decree for specific performance of the contract. New York Law Journal of July 13, 1934, p. 118.

Among its conclusions of law, the court found as follows: "(1) The contract referred to in the complaint was assignable. (2) Said contract was included in the property directed to be sold by the decree of the Supreme Court of the District of Columbia, and was embraced in the bill of sale to this plaintiff. (3) The provision in said contract for the extension of credit did not prevent its assignment to or its enforcement by the plaintiff, in view of plaintiff's offer to pay cash. (4) At the time of said assignment, the contract had not been terminated and was in full force and effect."

The court below, in the present case, reached a different opinion than that rendered by the New York courts, holding that the contract was not assignable, and that it was not included in the property directed to be sold by the receiver, or embraced in the bill of sale from the receiver to appellant company; with a further additional reason for its decision, which was not involved in the New York case, to the effect that defendant company was not aware at the time it entered into its contract that plaintiff's contract was still in force. On this point it claims to have relied upon an opinion of counsel to the effect that the contract was not assignable and could be regarded as terminated by the Tribune Company. In other respects, the facts in this case are not different from those adduced in the New York case.

We agree with the holding of the New York court that the contract in the present case was assignable. As said by Mr. Justice Schmuck: "The contract is assignable unless of a personal character, as a promise to marry, or one requiring skill, science, or peculiar qualifications. The contract here considered requiring on the one hand forwarding of matrices and on the other use of ordinary mechanical appliances, for the purpose of manifold reproduction, cannot be said to call into play other than knowledge of the use of ordinary implements. Viewed from every angle, even with prejudiced eyes, this contract cannot be tagged as nonassignable. Considering the credit feature of the agreement, a like conclusion is reached. In re Niagara Radiator Co. (D. C.) 164 F. 102, it was held that if nonassignability is not inhibited, the credit extending to the vendee does not make it so, provided the assignee is ready to pay cash."

It is insisted, however, that this is not strictly a contract but in the nature of a license to use and publish copyrighted material. Whatever may be the effect of such a license between the Tribune Company and the artists producing the comics in question may be disregarded, since the contract involved is not with the artists but with the Tribune Company for the sale of the merchandise to one of its customers. There is nothing in the terms of the contract to forbid its assignment, nor is the contract of such a personal character as to prevent it from passing under the circumstances and terms of the receivership sale. There is nothing in this contract requiring the exercise of skill or peculiar qualifications on the part of the Post Company. It was merely a contract in the form employed by the Tribune Company in furnishing these comics to a multitude of publishers throughout the country. It amounted merely to one instance of a general series of transactions, divesting the contract of every element of nonassignability.

The test of assignability is well stated in Devlin v. Mayor, 63 N. Y. 8, 17, as follows: "The assignability of a contract must depend upon the nature of the contract and the character of the obligations assumed rather than the supposed intent of the parties, except as that intent is expressed in the agreement. Parties may, in terms, prohibit the assignment of any contract and declare that neither personal representatives nor assignees shall succeed to any rights in virtue of it, or be bound by its obligations. But when this has not been declared expressly or by implication, contracts other than such as are personal in their character, as promises to marry or engagements for personal services requiring skill, science or peculiar qualifications, may be assigned."

The contract here was in substance an agreement by the Chicago Tribune to furnish the Washington Post with certain comics and features, and the assignment, or rather sale of the contract, to plaintiff company was not a transfer of the contract rights to another and independent publication. It merely meant the continuation of the same publication. This distinction is emphasized in a leading English case, Talhurst v. Associated Portland Cement Manufacturers et al., 1903 A. C. 414, where the contract was by an owner of a quarry to supply chalk to be used by a nearby cement plant. The cement plant was later taken over by a new company, and, while it was held that the contract would not be assignable to another cement plant, the judges in the House of Lords held in effect that the contract was for the quarry to supply that particular cement works, and it made no difference to the owner of the quarry who owned or operated the cement works. The assignment was accordingly upheld.

In this case, as we have stated, the contract was with the Washington Post Company to publish these comics in the Washington Post, and it makes no difference to the Tribune Company whether it was published in that paper by the original company with which it contracted or plaintiff company. In Dunkley Co. v. California Packing Corporation (D. C.) 277 F. 989, 992, Judge Augustus Hand, in considering a case where, as in the present instance, a successor bought the entire business of the licensee, said: "The federal courts have treated situations like the present in a broad way and have allowed corporations succeeding to the business of a licensee to succeed to the license where the particular circumstances of the case warranted such a result."

The facts disclosed by the record in this case clearly establish the transfer of the contract as a part of the receivership sale. By the order appointing the receiver he was authorized "to consider and determine which of the contracts, leases, or other contractual arrangements between defendant, The Washington Post Company, and any and all other persons or...