Ring v. AUTHORS'LEAGUE OF AMERICA

• Decision Date: 09 January 1951
• Docket Number: No. 90,Docket 21712.,90
• Citation: 186 F.2d 637
• Parties: RING v. AUTHORS' LEAGUE OF AMERICA, Inc., et al.
• Court: U.S. Court of Appeals — Second Circuit

186 F.2d 637 (1951)

RING v. AUTHORS' LEAGUE OF AMERICA, Inc., et al.

No. 90, Docket 21712.

United States Court of Appeals Second Circuit.

Argued December 8, 1950.

Decided January 9, 1951.

Wittenberg, Carrington & Farnsworth, New York City (Philip Wittenberg, New York City, of counsel), for Spina and others.

Hays, St. John Abramson & Schulman, New York City (Arthur Garfield Hays, John Schulman, Osmond K. Fraenkel and William Klein, II, all of New York City, of counsel), for defendant-appellant Authors League of America.

Carl E. Ring, New York City (Edward A. Schaub, of counsel), for plaintiff-appellant Ring.

Alfred S. Julien, New York City, Greenbaum, Wolff & Ernst, New York City, for appellee-defendant.

Before L. HAND, Chief Judge, and SWAN and CHASE, Circuit Judges.

L. HAND, Chief Judge.

This cause comes on upon appeals by the plaintiff and the Authors' League of America, Inc., from the judgment in an action brought under the Anti-Trust Acts, 15 U.S. C.A. § 1 et seq., against the League and Spina, Heyman and Hannan to recover treble damages and for an injunction, because of a combination or conspiracy to restrain interstate commerce in plays. The complaint does not very clearly disclose the gist of the action, since for the most part it alleges only evidence; but the gravamen is that by means of such a conspiracy the defendants caused the failure of a musical play, "The Stovepipe Hat," in whose production the plaintiff had acquired an interest. The case was tried to a jury who answered two questions put to them by the judge as follows: "1. Have the defendants violated the Anti-Trust Laws? Yes." "2. Assuming defendants have violated the Anti-Trust Laws, has plaintiff suffered injury to his business or property by such violation of the Anti-Trust Laws? (a) By the Dramatists Guild? No. (b) By Spina? No. (c) By Heyman? No." (Hannan may be disregarded.) Upon these answers the judge dismissed the complaint so far as it asked for damages, but granted an injunction against the defendants, the important part of which forbad them to enforce against the plaintiff a contract known as the "Minimum Basic Agreement," and which directed the authors — if in the future they should seek to produce the play — to offer it to the plaintiff on as favorable terms as they offered it to others. The plaintiff appeals from the dismissal; the League appeals from the injunction. The basic question was whether the defendants by insisting upon the incorporation of the "Agreement" into the production contract became members of a conspiracy under the Anti-Trust Acts. We have already discussed that question in granting a temporary injunction in favor of the plaintiff.¹

The facts, so far as it is necessary to state them, were as follows. On February 7, 1944, Spina, Heyman and Hannan who had theretofore written and composed "The Stovepipe Hat," made a contract with one, Gaumont, by which he was to be its "Manager" and to advance the money which might be needed to "produce" it. This contract incorporated the "Minimum Basic Agreement" of the League, to which Gaumont had become a party, as was necessary by its terms before Spina and his associates could contract with him, for they were members of the League, and the "Agreement" forbad members to contract with a "Manager," not himself a member. We need not state the terms of Gaumont's contract in detail; for the purposes of this case it is enough that "the terms and provisions"of the "Agreement" "shall apply in all matters and instances not specifically covered and provided for by this agreement"; and that in case of any divergence between it and the "Agreement," the "Agreement" shall prevail. On March 13, 1944, Gaumont and the plaintiff formed a, partnership for the production of the play under this contract, and by May 4th the plaintiff had advanced $57,000 to the enterprise. There was a trial run which began in New Haven on May 18th, and ended in Boston on May 27th, when the production shut down and was never revived. Before the run began the plaintiff and Gaumont had drastically disagreed about the production of the play; and the plaintiff had unsuccessfully tried to get a contract with the authors eliminating Gaumont. Upon his failure he brought an action against Gaumont on May 6th, which was settled on the 12th by a stipulation, made in Spina's presence, by which Gaumont assigned to the plaintiff all his rights in the play and against the authors, together with any he might have against any of the "actors, theatres, builders, etc." In exchange the plaintiff agreed to pay Gaumont $6,659 and to save him harmless from any contracts or other obligations for which Gaumont might be liable. The plaintiff paid down $5,159 and he was to pay the balance, $1,500, either by Gaumont's securing redelivery of, or stopping payment upon, a cheque in favor of the authors which Gaumont had drawn and delivered to the League in escrow. The stipulation of settlement declared that the authors had already consented to this disposition of the cheque, whose origin was as follows. Gaumont's contract had provided that production should begin on May 7th, but that upon paying the authors $1,500 it might be delayed until October 7th. Some time before May 7th it had become apparent that the play would not be produced by that time, and to secure the extension Gaumont made out the cheque and delivered it to the League. On May 16th, four days after the action of Ring Y. Gaumont was settled, Spina wrote to the League asking that the money — apparently the cheque had been cashed — should be paid to Gaumont, and the plaintiff signed the letter as witness. The League did not answer this letter till the 29th when it wrote a reply to Spina, enclosing an agreement "supplementary" to the original contract between the authors and Gaumont by which they, the plaintiff, the League and its agent (the "Dramatists Guild") were all to consent to the payment of the money to Gaumont. What became of this proposed "supplementary agreement" does not appear except that it was never signed. The plaintiff finally paid Gaumont $1,500 by a cheque which Gaumont cashed on June 7th, and by so doing he became himself entitled to the money from the League as Gaumont's surrogate; but there is no testimony that he ever made any demand for the money before he filed the complaint on June 14, 1944.

First the plaintiff claims that he is entitled to three times $1,500 because the deposit was denied him in execution of the unlawful conspiracy, having its source in the "Minimum Basic Agreement." So far as we can understand the argument, the following is its most favorable statement. Gatimont's deposit of the cheque was in part performance of the contract between him and the authors, which was invalid in toto, since it incorporated the "Agreement." Therefore Gaumont might have reclaimed the money at once, repudiating a contract which was one only in form. When Spina wrote the letter of May 16th to the League demanding that it return the money to Gaumont, the League should have unconditionally complied with it, particularly as it should have been regarded as a demand of the plaintiff as well as of Spina, because the plaintiff "witnessed" it. The League refused this demand when on May 29th it required the authors and the plaintiff to sign the "supplementary agreement," for that imposed a condition. Such a condition was justified only in case the contract was valid. The answer to this is not difficult, even though we accept as a premise that the contract was an unlawful conspiracy, because it incorporated the "Agreement." For, if the contract was a nullity, Gaumont and Gaumont alone was entitled to the cheque; he had given it upon a consideration which failed. Even so, the League was not liable until Gaumont made a demand, because, although no valid contract with the authors existed, he might want to perform it; he was not bound to repudiate. Gaumont never did demand the cheque, for Spina's letter of May 16th did not constitute a demand by him for whom Spina had no right to speak, any more than had the plaintiff. The League was not guilty of any wrong to Gaumont, when it demanded a consent from the plaintiff and the authors before paying the money. We will assume that by the plaintiff's payment to Gaumont, he was substituted in Gaumont's place, and that he might then have made a demand with which the League would have been bound to comply unconditionally. (In fact that is not true, for the League even then would have been justified in satisfying itself that Gaumont had in fact transferred his right to the plaintiff.) But, that aside, the plaintiff never did demand payment after he had paid Gaumont. The testimony on which he relies was no more than that "an application or demand to the Guild to get the money" was made, which certainly referred to Spina's letter of May 16th. Thus it appears, even though we assume all the plaintiff's allegations to be true, that he did not prove that before June 14, 1944, the League had availed itself of the "Agreement" to impose any condition upon the return of the money. The judge was right in taking the item from the jury. It follows, however, that the judgment must not adjudicate any rights the plaintiff may have to the money, and it is to be understood that our affirmance leaves those rights unaffected.

The plaintiff next complains that the evidence was conclusive — contrary to the jury's verdict — that his business had suffered injury by reason of the defendants' violation of the Anti-Trust Acts, but to this it is a complete answer that he did not ask the judge so to direct the jury; and it is the well settled rule, which we have repeatedly applied, that, if a party does not ask the judge to withdraw an issue, the verdict is conclusive, save for a motion for a new trial.² The plaintiff's argument in the case at bar is indeed extraordinary, in view of his attorney's request at the trial for...