Momand v. Twentieth-Century Fox Film Corporation

• Decision Date: 13 March 1941
• Docket Number: 6517.,No. 6516,6516
• Citation: 37 F. Supp. 649
• Parties: MOMAND v. TWENTIETH-CENTURY FOX FILM CORPORATION et al. SAME v. GRIFFITH AMUSEMENT CO. et al.
• Court: U.S. District Court — Western District of Oklahoma

37 F. Supp. 649

MOMAND v. TWENTIETH-CENTURY FOX FILM CORPORATION et al.

SAME v. GRIFFITH AMUSEMENT CO. et al.

Nos. 6516, 6517.

District Court, W. D. Oklahoma.

March 13, 1941.

COPYRIGHT MATERIAL OMITTED

Stanard, Carey & Stanard, of Shawnee, Okl., George Ryan, of Boston, Mass., and C. Ray Smith, of Santa Fe, N. M., for plaintiff.

Keaton, Wells & Johnston, Everest, McKenzie & Gibbens, and Henry Griffing, all of Oklahoma City, Okl., for defendants in both cases.

MURRAH, United States Circuit Judge, assigned and sitting as United States District Judge.

The plaintiff brings this suit as the assignee of certain causes of action, created and granted by Section 7 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 15. The defendants have challenged the right of the plaintiff to maintain the alleged causes of action, by a motion to dismiss. They contend that the alleged causes of action sound in tort and plaintiff cannot maintain the suits as assignee because Oklahoma law forbids the assignment of a cause of action sounding in tort.

This question was argued and submitted to the court and, after consideration, the motion to dismiss was overruled. The court, in its order overruling the motion, stated briefly his reasons. The same question is raised in the answer of the defendants and the defendants have earnestly petitioned the court to reconsider the question of the assignability of these causes of action. The question is of vital importance and has been earnestly presented and because I will not have further responsibility in connection with this case, it was thought proper to reconsider the motion to dismiss. The parties have again briefed this question; the briefs have been carefully considered and I have determined to set out my views in more detail.

The sole question is the assignability of the causes of action, created and granted by the Sherman Anti-Trust Act. The Act generally condemns certain combinations and agreements in restraint of trade and business affecting interstate commerce and derives its source of power from the interstate commerce clause of the Constitution. Section 7 of the Act grants to one injured in his business or property a right of action for damages against those found guilty of violation of the Act, and specifically provides exclusive jurisdiction in the United States District Courts to enforce the remedy created thereby.

The complaint herein alleges an unlawful combination and agreement to injure plaintiff's assignors in their business. It is alleged that by the unlawful combination and agreement the plaintiff's assignors were injured in their business and property. The complaint further alleges, in substance, that the injury was effected by certain contracts and agreements which the plaintiff's assignors were required to enter into with the defendants; that such contracts and agreements were the instruments by which the unlawful purposes were effected.

It will be assumed that the complaint states a cause of action on which relief can be granted, based upon these allegations. The Sherman Anti-Trust Act is silent on the question of the right to assign a cause of action growing out of acts condemned by the Act itself. The plaintiff earnestly contends that the right of action is one created by Congress, acting in a field in which it is paramount, if not exclusive. This being so, the question of assignability of a cause of action, created thereby, is governed and controlled by the decisions of the Federal courts, unrestrained by the laws of the states, and in this instance the laws of the state of Oklahoma.

Assignability and survivability are convertible terms and, for the purpose of considering the applicable law, cases involving survivorship are applicable here. State ex rel. Mitchell v. City of Shawnee, 167 Okl. 582, 31 P.2d 552, 92 A.L.R. 948; 1 American Jurisprudence, § 80, and 6 Corpus Juris Secundum, Assignments, § 32.

Under the broad common law rule, causes of action for torts, or sounding in tort, did not survive and were, therefore, not assignable. The maxim actio personalis moritur cum persona (personal action dies with the person) originally applied to most every form of action, whether arising out of contract or tort, but the common law was modified by the Statute of 4 Edward the III.¹

Under the interpretation of the common law, as modified by the Statute of 4 Edward the III, it has been generally held that a cause of action created by Section 7 of the Sherman Anti-Trust Act was assignable, on the theory that although the action was for a wrongful act and therefore tortious, the acts declared to be unlawful did not affect the person but the business or property of the assignor and it was, therefore, not ex delicto and came within the exception of the general rule forbidding the assignment of a thing in action, arising out of a tort. More accurately, this rule is limited to torts in the nature of personal wrongs. 1 American Jurisprudence, § 84. In Sullivan v. Associated Billposters and Distributors, 2 Cir., 6 F.2d 1000, 1004, 42 A. L.R. 503, it is stated: "* * * The real test, so far as tort actions were concerned, seems to have been whether the injury on which the cause of action was based affected property rights, or affected the person alone. * * *"²

The Federal courts were generally of the opinion that a right of action created by Section 7 of the Sherman Anti-Trust Act fell upon the "property and business" of the complaining party and was not personal in its nature in the sense of a tort which inflicted bodily harm, injury to the reputation, such as libel and slander, etc. See Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241. It is readily conceded that the definition given to the right of action by the Federal law is binding. Stated otherwise, the nature of the cause of action, created and granted by the Sherman Anti-Trust Act, is to be determined by the Federal decisions.

The defendants contend that after determining the nature of the cause of action under the notions of Federal law, the question of whether or not that particular type or kind of cause of action may be assigned and the assignee entitled to maintain an action in the courts of the United States, within the state of Oklahoma, is a question of local law, which the Federal courts must follow in the determination of that question.

To this extent, the Rules of Decision Act, 28 U.S.C.A. § 725,³ is invoked, and to the same extent, the answer lies in the construction and application of that statute to the particular question before us. The question is neither new nor novel but has been the legal battleground for controversies involving the interplay of Federal and state law almost since the establishment of American Jurisprudence. See Wheaton v. Peters, 8 Pet. 591, 8 L.Ed. 1055.

It, therefore, becomes our duty to decide the two-fold question: First, do the statutes of the state of Oklahoma, regulating the right to assign a chose in action, or a thing in action, apply in the instant case, and, Second, if they do apply, do they prohibit the assignment of the cause of action under consideration? The latter question involves the controlling effect of the decisions of the state of Oklahoma, which construe the statutes relating to the survivability of causes of action.

We are not concerned with the application or the controlling effect of the common law of the state of Oklahoma, as that subject was treated in the now famous case of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. No case is cited by the parties, neither has any party suggested that the common law of Oklahoma is applicable and controls the question of the assignability of this cause of action. If this question is to be decided under the law of the state of Oklahoma, it is decided by the applicable statutes.

We shall first consider whether or not the law of Oklahoma has any application to these causes of action created by the Sherman Anti-Trust Act.

The statutes of limitations have almost without exception been applied to causes of action created and granted by Federal law. The rule, and the determination of the application and its underlying logic was comprehensively discussed in Campbell v. Haverhill, 155 U.S. 610, 15 S.Ct. 217, 219, 39 L.Ed. 280, wherein it is stated: "* * * Indeed, to no class of state legislation has the above provision 28 U.S.C.A. § 725 been more steadfastly and consistently applied than to statutes prescribing the time within which actions shall be brought within its jurisdiction. It is insisted, however, that, by the express terms of section 721 28 U.S.C.A. § 725, the laws of the several states should be enforced only `in cases where they apply,' and that they have no application to causes of action created by congressional legislation and enforceable only in the federal courts. The argument is that the law of the forum can only apply to matters within the jurisdiction of the state courts, and that the recognition given by congress to the laws of the several states does not make such laws applicable to suits over which the state courts have no jurisdiction, because, for want of jurisdiction over the subject-matter of the suit, * * * in other words, that the states, having no power to create the right or enforce the remedy, have no power to limit such remedy or to legislate in any manner with respect to the subject-matter."

This is precisely the argument of the plaintiffs here. Justice Brown (Campbell v. Haverhill, supra) answered the perplexing and vexatious problem thusly: "* * * Doubtless such an argument would apply with peculiar emphasis to statutes, if any such existed, discriminating against causes of action enforceable only in the federal courts * * *. In such case it might be plausibly argued that it could never have been intended by congress that section 721 28 U.S.C.A. § 725 should apply to statutes passed in manifest...