Samuel Goldwyn, Inc. v. United Artists Corporation

• Decision Date: 03 July 1940
• Citation: 35 F. Supp. 633
• Parties: SAMUEL GOLDWYN, Inc., et al. v. UNITED ARTISTS CORPORATION et al.
• Court: U.S. District Court — Southern District of New York

35 F. Supp. 633

SAMUEL GOLDWYN, Inc., et al. v. UNITED ARTISTS CORPORATION et al.

District Court, S. D. New York.

July 3, 1940.

Max D. Steuer, of New York City (Max D. Steuer and Henry Klein, both of New York City, of counsel), for plaintiffs.

O'Brien, Driscoll & Raftery, of New York City (Edward C. Raftery and Milton M. Rosenbloom, both of New York City, of counsel), for defendant United Artists Corporation.

Schwartz & Frohlich, of New York City (Louis D. Frohlich and Herman Finkelstein, both of New York City, of counsel), for defendants London Film Productions, Limited, and Alexander Korda.

LEIBELL, District Judge.

Three motions were made herein and submitted together. (A) Defendant United Artists moved, in the alternative, that the plaintiffs be required to separately state and number three alleged causes of action, or, that certain specified matter be stricken from the complaint, or for a bill of particulars in respect to certain enumerated paragraphs of the complaint. (B) Defendants London Film and Alexander Korda moved for a dismissal of the complaint as to them. (C) The plaintiffs moved, before issue joined, pursuant to Rule 26(a), Federal Rules of Civil Procedure, 28 U. S.C.A. following section 723c, for leave to take the depositions of Alexander Korda, and of London Film, Limited, by Alexander Korda, as adverse parties and/or witnesses, and of Alexander Korda Film Productions, Limited, by Alexander Korda as a witness.

The present action was filed in this court February 15, 1940. A somewhat similar suit was commenced in the United States District Court for the District of Delaware on April 11, 1939, in which the same plaintiffs sued United Artists Corporation and sought a declaratory judgment (1) that said defendant had breached the provisions of a certain "inducing contract" between Goldwyn, Inc., and United Artists by permitting modification, without the consent of Goldwyn, Inc., of a distribution contract between United and London Film and with The Elton Corporation, and by waiving strict performance by London Film and Korda of provisions of a distribution contract between United and London Film and Korda; (2) that plaintiffs' contracts of distribution and guarantee with United Artists be declared terminated by reason of the aforementioned alleged breaches of the "inducing contract" by United Artists; and (3) that judgment for an accounting between the parties be decreed. London Film and Korda were not made parties to the Delaware suit and on motion of the defendant the District Judge dismissed the complaint because of the absence of necessary parties, whose rights would be adjudicated by a declaratory judgment. On appeal the Circuit Court of Appeals for the Third Circuit reversed the order of the Delaware District Court and held that London Film and Korda were neither necessary nor proper parties, in fact, that "they can be made neither parties plaintiff or defendant." See opinion filed June 29, 1940, in Samuel Goldwyn, Inc., and Samuel Goldwyn v. United Artists Corporation, 3 Cir., 113 F.2d 703, 707. In its opinion the Circuit Court of Appeals thoroughly discussed and explained the various contracts and the relation of the parties thereto. I quote from the opinion as follows:

"The appellee, United Artists Corporation, on September 2, 1935, entered into a distribution contract with London Film Productions Limited, an English producing corporation, and with Alexander Korda, a motion picture director and a resident of London, England. The contents of this contract need not be detailed here. It is sufficient to state that it provided for the purchase of a unit of common stock of United by Korda and London Film, and required London Film to deliver and United to accept from London Film for distribution and to distribute a certain number of films produced, directed or supervised by Korda for a period of ten years commencing upon the date of the contract.

"On July 22, 1936, the appellant, Samuel Goldwyn, Inc., entered into a distribution contract with United, the performance of which by Goldwyn, Inc., was guaranteed by the appellant, Samuel Goldwyn, by a guarantee contract. Under the terms of this contract Goldwyn, Inc., was required to deliver and United was required to accept for distribution and to distribute a certain number of films, produced, directed and supervised by Goldwyn. It should be noted that the period of time covered by this contract was made coextensive with the distribution contract between United, London Film and Korda, to which we have just referred, the contract between Goldwyn, Inc., Goldwyn and United requiring the delivery of films and their acceptance for distribution for a period of ten years commencing as of September 12, 1935. The thirteenth paragraph of this contract provided that if United granted any other producer more favorable terms for the distribution of pictures than were granted to Goldwyn, Inc., by the contract, then the distribution contract between United and Goldwyn, Inc., should be deemed to be amended to the extent necessary to give Goldwyn, Inc., terms as favorable as those included in any other contract. However, before Goldwyn, Inc., and Goldwyn could be induced to enter with United into the contracts of distribution and guarantee another contract, known as the inducing contract, was required by Goldwyn, Inc., and Goldwyn to be executed by United. This inducing contract recites specifically that Goldwyn, Inc., is unwilling to enter into the distribution contract and Goldwyn individually is unwilling to enter into the guarantee contract unless the inducing contract be executed. It goes on to provide that United must enter into substantially identical distribution contracts with Pickford Corporation, The Elton Corporation, and with Charles Chaplin, these distribution contracts, other than the Chaplin contract (Chaplin acting as an individual and without the agency of a corporation) to be guaranteed as Goldwyn guaranteed the performance of Goldwyn, Inc., respectively by Mary Pickford and Douglas Fairbanks.

"The inducing contract specifically provided that United agreed that no amendment should be made or permitted in any of the provisions of the contracts of distribution except as provided in paragraph 13 of each or in the contracts of guarantee as entered into by United with Pickford Corporation, The Elton Corporation, London Film, Charles Chaplin, with Korda, Mary Pickford or Douglas Fairbanks, and that United would not waive the strict performance and observance of any of the provisions of the distribution and guarantee contracts referred to without in each instance obtaining first the express written consent of Pickford Corporation, The Elton Corporation, Charles Chaplin, Goldwyn, Inc., Mary Pickford, Douglas Fairbanks, and Samuel Goldwyn. The contemplated contracts of distribution and guarantee were actually entered into by United with the other corporations and individuals named in this paragraph, upon July 22, 1936, and Pickford Corporation, Samuel Goldwyn, Korda and London Film, The Elton Corporation and Charles Chaplin on July 22nd became and have remained the owners of all of the outstanding capital stock of United. Inducing contracts substantially similar to that between Goldwyn, Inc., and United were entered into between United, Pickford Corporation, Mary Pickford, The Elton Corporation, Douglas Fairbanks, and Charles Chaplin, and at a later date United entered into an inducing contract also with London Film and Korda."

The complaint in the present action is quite voluminous and a number of exhibits are annexed to it. It contains certain new matter, and alleges additional breaches of contract on the part of United Artists, that plaintiffs served on United Artists a notice of termination of their contracts, and that United Artists notwithstanding such termination have hindered and interfered with plaintiffs' attempts to enter into distributing agreements with other motion picture distributors, particularly in regard to plaintiffs' picture "The Westerner". Plaintiffs seek to enjoin United Artists from interfering with the distribution of any pictures that plaintiffs may produce. They also seek an accounting for all monies due them under the distribution contract, and damages for wrongful interference with the attempted distribution of "The Westerner" by the plaintiff, Samuel Goldwyn, Inc.

A. United Artists moves under Rules 10(b) and 12(e) and (f), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, (I) to have plaintiffs state separately and number their causes of action; (II) to strike matter from the complaint; and (III) for a bill of particulars.

I. I am of the opinion that the complaint pleads three claims or causes of action, which should be separately stated:

(1) An action for an injunction, restraining the defendant United Artists from interfering with the plaintiff corporation in the use, distribution and exhibition of motion picture photoplays which may be produced by it during the period from the date of the institution of the action up to September 2, 1945, the date when the distribution contract between plaintiff corporation and United Artists would, by its terms, expire. The injunction is sought because of United Artists' alleged wrongful conduct and continuing tortious acts — in refusing to recognize plaintiffs' notice of termination of said distribution contract, served in November,...