Robey v. Sun Record Company

• Decision Date: 25 April 1957
• Docket Number: No. 16197.,16197.
• Parties: Don D. ROBEY, Appellant, v. SUN RECORD COMPANY, Inc., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

242 F.2d 684 (1957)

Don D. ROBEY, Appellant, v. SUN RECORD COMPANY, Inc., Appellee.

No. 16197.

United States Court of Appeals Fifth Circuit.

March 21, 1957.

Rehearing Denied April 25, 1957.

COPYRIGHT MATERIAL OMITTED

Joel W. Cook, Houston, Tex., Merrill & Scott by Sam R. Merrill, Houston, Tex., for appellant.

Morris Pepper, Houston, Tex., Grover N. McCormick, Memphis, Tenn., for appellee.

Before CAMERON, JONES and BROWN, Circuit Judges.

JONES, Circuit Judge.

Herman Parker, known as "Little Junior", was a blues and rhythm singer with a limited reputation in and around Memphis, Tennessee. On June 18, 1953, he and four others known as "The Blue Flames," a group of instrumental musicians, made a contract with Sun Record Company, Inc., a Tennessee corporation having its principal place of business in that State. The Blue Flames are not involved in the matters before us. By the contract Parker agreed to record eight phonograph record sides and more if Sun should require. The agreement gave Sun the exclusive services of Parker in the record making field and contained an express covenant that, during the life of the agreement, he would not record for anyone else. The contract was for the period of a year, and Sun had the option to extend the term for an additional year. The renewal option was exercised. Four records (eight record sides) were made. The first of these, with "Feelin' Good" on one side and "Fussin' and Fightin' Blues" on the other, was released on July 18, 1953, and soon became listed as one of the top blues and rhythm records in popularity and sales.

On September 4, 1953, the appellant, Robey, a resident of Texas, entered into a contract with Parker. It had, in substance, the same terms as Parker's prior contract with Sun except that the amount which Parker was to receive for his services was somewhat more and the term was for a longer period. In November of 1953 Sun released the second of the Parker records and its initial sales were good. Sun did not then know but soon thereafter learned of the contract between Parker and Robey. On December 3, 1953, Sun advised Robey that Parker was under contract to it. Robey was then making or preparing to make the first of his Parker records. He declined to recognize the contract of Parker with Sun and thereafter made and released several Parker records. Sun brought suit in the United States District Court against Robey for wrongful interference with the contractual relationship between Parker and Sun and for wrongfully inducing the breach by Parker of his contract with Sun. The case was tried without a jury, findings of fact and conclusions of law were made, and judgment was entered in favor of Sun and against Robey for $17,500.00 actual damages. Exemplary damages were denied. A motion was made to set aside the judgment, for a new trial, and to amend the findings of fact. After denial of the motion this appeal was brought.

The contentions of the appellant, Robey, are (a) that the findings of the trial court, essential to its judgment, are unsupported by, or at least contrary to, the great weight of the evidence, (b) that the court erroneously awarded damages for anticipated profits which were speculative and conjectural both as to existence and amount, (c) that the trial court's failure to find the formulae by which the $17,500.00 award was settled upon is a procedural error in violation of the requirement of specific fact findings, (d) that the introduction of trade journals to prove the facts stated therein was error, (e) that the undisputed evidence shows that appellee failed to mitigate its damages, and (f) that the contract between Sun Record Co., Inc. and Parker was not valid and no liability existed for inducing a breach thereof.

This is a typical case calling for the application of the rule that recovery may be had for the wrongful procurement of a breach of contract by one not a party to it. The doctrine has roots in the medieval Ordinance of Labourers, 1349, 23 Edw. III Ch. 1. The leading English case and the one from which our present jurisprudence stems is Lumley v. Gye, 1853, 2 El. & Bl. 216, 118 Eng.Rep. 749, 1 Eng.Rul.Cas. 707. In Texas the rule was introduced in 1903 by Raymond v. Yarrington, 96 Tex. 443, 72 S.W. 580, 73 S.W. 800, 62 L.R.A. 962, 97 Am.St.Rep. 914, where Lumley v. Gye and a number of other cases are reviewed. The rule was announced that a person who induces a party to a contract to break it, intending thereby to injure another person or get a benefit for himself, commits an actionable wrong. From Temperton v. Russell, 1893, 1 Q. B. Div. 715, the Supreme Court of Texas quoted with approval the following, "I presume that the principle is this, viz., that the contract confers certain rights on the person with whom it is made, and not only binds the parties to it by the obligation entered into, but also imposes on all the world the duty of respecting that contractual obligation". The courts of Texas have applied the rule in many circumstances. 25 Tex.Jur., 31 et seq., Interference § 2.

The trial court found:

"Under date of June 18, 1953, the plaintiff Sun Record Company, Inc., of Memphis, Tennessee, entered into a contract with Herman Parker (together with certain other individuals, of no materiality here) which is in evidence and to which reference is made. Among other things, the contract provided for the exclusive services of Parker for the purpose of making phonograph records, and contained an express negative covenant to the effect that Parker would not perform (for the purpose of making phonograph records) for any other person, firm or corporation during the period of such contract. The contractual period was for one year, renewable for a second year at plaintiff\'s option. The necessary notice to exercise such option was given by the plaintiff April 30, 1954.

"At the time of such contract, Parker enjoyed a very limited reputation in and around Memphis. He was unknown as a recording artist or in the recording field. Due in large part to the recognition of certain talent in Parker, and training which Parker received from and under plaintiff, and as a result of the advertising which plaintiff provided, the first record which Parker made for plaintiff under its contract above mentioned met immediately with a high degree of success and, for a while at least, was among the top few records in the `Blues and Rhythm\' field in popularity and number of sales throughout the country. This record was released July 18, 1953.

"On September 4, 1953, the defendant Robey, signing as `Duke Records by Don D. Robey, President,\' entered into a contract with Parker providing for the making of phonograph records. The contract is in evidence and is referred to. In most particulars, it is similar to the earlier contract which Parker had with plaintiff. It provides a slightly higher remuneration for the musician and was to extend for a period of three years. The execution of this contract was not announced to the trade until a number of weeks thereafter.

"I find that at the time of making the contract with Parker, the defendant Robey knew of Parker\'s prior contract with plaintiff, and from well recognized practices and customs in the industry, he knew that in all reasonable probability such contract contained an express provision for the exclusive use of Parker\'s Services by plaintiff and a negative covenant that Parker would not make records for anyone else. Despite this knowledge, before the contract was signed with Parker, the defendant Robey made no effort, through plaintiff or any other source to ascertain the true facts in this regard. In fact, he was anxious to conceal from plaintiff his dealings with Parker. After the contract was entered into, and before incurring expense thereunder, Robey made no inquiry other than to `clear\' his contract with Parker with the musicians\' union. This `clearance\' meant (a) that Parker was in good standing with the union, (b) that Robey\'s business was affiliated with the union, and (c) that no prior contract for Parker\'s services was on file with the union.

"Without knowledge of defendant\'s contract with Parker, plaintiff released a second Parker record in November, 1953. This record met with considerable popularity, although not to the extent of the first.

"Defendant admittedly had actual knowledge of plaintiff\'s contract with Parker, on December 2 or December 3, 1953, by means of long distance telephone conversation with the president of the plaintiff corporation and with its attorney. At the time of receiving such phone call, the defendant Robey was in the process or had made definite arrangements looking toward the recording of his first record by Parker. As he had incurred an expense of several hundred dollars in connection therewith, and because of his contention that plaintiff\'s contract was invalid and unenforceable because plaintiff was not affiliated with the musicians\' union, defendant declined to recognize any exclusive right of plaintiff to Parker\'s services, and proceeded to make and release Parker\'s records during the next several months.

"Defendant\'s contracting with Parker when he either had actual knowledge or was chargeable with knowledge of plaintiff\'s contract and the terms thereof, and his recording and releasing of Parker\'s records under his own contract, was done

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