Stinnett v. Paramount-Famous Lasky Corporation

• Decision Date: 01 April 1931
• Docket Number: No. 1367-5519.,1367-5519.
• Citation: Stinnett v. Paramount-Famous Lasky Corporation, 37 S.W.2d 145 (Tex. 1931)
• Parties: STINNETT et al. v. PARAMOUNT-FAMOUS LASKY CORPORATION OF NEW YORK et al.
• Court: Texas Supreme Court

37 S.W.2d 145

STINNETT et al. v. PARAMOUNT-FAMOUS LASKY CORPORATION OF NEW YORK et al.

No. 1367-5519.

Commission of Appeals of Texas, Section A.

April 1, 1931.

Error to Court of Civil Appeals of Tenth Supreme Judicial District.

Suit by R. J. Stinnett and another against the Paramount-Famous Lasky Corporation of New York and others. Judgment for the plaintiffs was reversed, and cause remanded for a new trial by the Court of Civil Appeals [17 S.W.(2d) 125], and plaintiffs bring error.

Judgment of the Court of Civil Appeals affirmed.

Moroney & Moroney and W. M. Taylor, all of Dallas, for plaintiffs in error.

Cravath, deGersdorff, Swaine & Wood, of New York City, and Phillips & Phillips, M. W. Townsend, and Tom Scurry, all of Dallas, for defendants in error.

SHARP, J.

For a partial statement of the nature and result of this case, we adopt the admirable statement made by Chief Justice Gallagher in the opinion of the Court of Civil Appeals, 17 S.W.(2d) 125, which is as follows:

"This suit was instituted by appellees, R. J. Stinnett and S. Charninsky, against appellants, Paramount Famous Lasky Corporation and six subsidiary corporations, to recover $150,000 actual and $300,000 exemplary damages for the alleged `wanton, malicious, deliberate and unlawful destruction of plaintiffs' business, in violation of the laws against trusts and conspiracies in restraint of trade,' etc. They further alleged that they were forced to sell out and retire from the ownership of the Capitol Theater (in Dallas) and to retire as operators from the class A theater business, and that their business and livelihood as operators of such theaters had been wrongfully and illegally destroyed by appellants.

"Appellees, on September 30, 1923, owned the lease on a building in Dallas known as the Capitol Theater, which had theretofore been run as a second class moving picture house. They then organized the Capitol Amusement Company, a corporation, with $10,000 capital stock. Appellees each subscribed and paid for $3,000 of said stock, and H. Charninsky subscribed and paid for $500 thereof. The remainder thereof was sold to other parties. The annual rental on said lease was $30,000. Appellees, or one of them, had prior to the organization of said corporation deposited with the landlord the first month's rent. Immediately on perfecting such organization said deposit was replaced with money of the corporation and the original deposit returned. Thereafter the corporation paid the rental on said lease. Appellees Stinnett was president, H. Charninsky vice president, and appellee S. Charninsky secretary and treasurer of said corporation. Within a few months after the organization thereof, appellees Stinnett and S. Charninsky acquired all the capital stock of said corporation except one share, which was retained by H. Charninsky. Said corporation immediately upon its organization began the operation of said Capitol Theater as a class A moving picture show. Subsequently it bought and paid for the fixtures and equipment used therein and made necessary improvements on the building. Appellees together acted as managers of said theater. Each drew from the earnings thereof an annual salary of $10,800. H. Charninsky was also employed by said corporation and paid an annual salary of $5,200. After the payment of said salaries and other expenses, the remaining earnings of said corporation were distributed among the stockholders thereof as dividends. Appellees state in their testimony that they operated said theater `through' said corporation, and that they always treated the proposition as a partnership between them.

"Appellees from the first experienced some difficulty in securing high class films for exhibition in said theater. Some pictures were secured by them from Harold B. Franklin, alleged to have been agent and manager in the distribution of films for all the defendants, and some from other sources. In January, 1925, Franklin agreed with Charninsky to release to him for exhibition in said theater one-half of the pictures produced by First National and available for exhibition during the coming season of 1925-26. Shortly thereafter friction developed between said Franklin and appellees, and according to the testimony of Charninsky, Franklin attempted to evade compliance with said contract by refusing to meet him for the purpose of making selection of the pictures they were to have for exhibition, respectively. Finally, however, by subterfuge, Charninsky secured a meeting and the pictures available were apportioned according to said agreement. The increasing friction culminated a day or two later in a final interview between Charninsky and Franklin, in which Franklin became greatly excited and cursed and indicated a purpose to assault him. The conclusion of said interview was a declaration by Franklin that he would not renew said contract and would see that Charninsky did not get a decent picture to operate said theater. Appellees became alarmed at said threat, and notwithstanding they had under contract sufficient pictures to run said theater until the fall of 1926, they decided that they would sell the same. On November 7, 1925, they did sell the same to Universal Pictures Corporation for a net profit on their investment of $29,700. Said sale was effected by appellees transferring the lease, which remained in their name, to said corporation, and by also transferring to it their entire capital stock in said Capitol Amusement Company. H. Charninsky also transferred to it the share of stock held by him. Appellee Charninsky was thereupon employed by said corporation as manager to operate said theater, and continued as such until said corporation leased the theater to another company."

The case was submitted to the jury upon special issues, and they found that plaintiffs were entitled to actual damages sustained by them in the past in the sum of $60,000, and that the damages which they would sustain in the future amounted to $90,000, and they awarded plaintiffs the further sum of $187,500 as exemplary damages. The trial court, upon motion, required plaintiffs to remit certain amounts, and the judgment finally entered in favor of plaintiffs and against defendants amounted to the sum of $318,770, from which judgment the defendants appealed to the Court of Civil Appeals, and the judgment of the trial court was reversed. 17 S.W.(2d) 125.

At the conclusion of the testimony introduced by plaintiffs, the defendants and each of them requested the trial court to instruct the jury to return a verdict for each of the defendants. The trial court refused this instruction, and submitted the case to the jury upon special issues. Among others, the following special issues were submitted:

"Issue No. 3. In carrying out such agreement, if any, and in exercising such control, if any, did the defendants exclude or prevent the plaintiffs from procuring, by contract or otherwise, in advance, and in accordance with the custom, if any, in vogue among picture show operators, high-class films suitable and sufficient in number, for profitable use in the Capitol Theatre in Dallas, as then operated and intended to be operated in the future by plaintiffs, (if they did so intend) for exhibition in said theatre during the seasons of 1926 and 1927? Answer `Yes' or `No.'

"To which the Jury answered `Yes.'

"Issue No. 4. In pursuance of said agreement hereinbefore inquired about, and in carrying out the same, if any such agreement there was, did the defendants threaten the plaintiffs in substance and to the effect that the defendants would see to it that the plaintiffs got no more good pictures for their picture show business? Answer `Yes' or `No.'

"If you have answered Issues Nos. 3 and 4 in the affirmative, then answer—

"Issue No. 5. At the time said threat, or threats, if any was made, was it the intention of the defendants to carry out such threats, if such were made, and could and would the defendants have prevented the plaintiffs from procuring the class of pictures they desired to get in sufficient numbers necessary to operate said Capitol Theatre profitably in the future? Answer `Yes' or `No.'

"If you have answered Issue No. 5 in the affirmative, then answer—

"Issue No. 6. At the time the plaintiffs sold out the Capitol Theatre in Dallas, then by reason of the said agreement and control of high-class films by defendants, if such there was, or by reason of said threat or threats, if such were made, or by reason of such agreement, control, and threat or threats, if any, did the plaintiffs have reasonable grounds to fear and did they fear that they would be unable to procure high-class films in the future and would not be able to operate the Capitol Theatre as a profitable business after exhausting the films then on hand or under contract, and were they thereby caused to sell out said Capitol Theatre and cease to operate the same? Answer `Yes' or `No.'

"In this connection, I instruct you that in determining your answers to the foregoing issues you may look to all the facts and circumstances in evidence in this case; and, further, that if in response to Issue No. 1, and that in response to subsequent issues you have found that the defendants were attempting to carry out said agreement during the time in question, then during such time the acts or statements, if any, of any one of the defendants, through its authorized agent or officer, or agents or officers, in carrying out such agreement, and in furtherance thereof, would be binding on all, and in law would be deemed to have been said or done by them all.

"To which the Jury answered as follows:

"To Issue No. 4, we answer `Yes.'

"To Issue No. 5, we answer `Yes.'

"To Issue No. 6, we answer `Yes.'"

Objections were made by the defendants to the action of the trial court in giving special issues Nos. 5 and 6, above described, because, among other reasons, they were multifarious and duplicitous and embrace two separate...