Universal Film Exchanges, Inc. v. West

• Decision Date: 26 April 1932
• Docket Number: 29973
• Citation: 141 So. 293,163 Miss. 272
• Court: Mississippi Supreme Court
• Parties: UNIVERSAL FILM EXCHANGES, INC., v. WEST

141 So. 293

163 Miss. 272

UNIVERSAL FILM EXCHANGES, INC., v. WEST

No. 29973

Supreme Court of Mississippi, Division B

April 26, 1932

(Division B.)

1 PLEADING.

Pleadings must be taken most strongly against pleader.

2. CONTRACT. In determining whether illegal portion of contract it severable, question is whether there is vital connection between illegal and other portions.

It is not permissible to simply strike out and wholly disregard the illegal portion as if it had never been a part of the agreement, but the illegal as well as the legal portions must be considered with a view to determining whether there is a vital connection between them.

3 CONTRACTS.

Absent means for ascertaining whether promise was induced by legal or illegal portion of contract, entire contract will be held illegal, if material element thereof is unlawful.

4. MONOPOLIES. Where exhibition contract contained arbitration provision violating Anti-Trust Act, and providing that unless exhibitor complied with unlawful provision distributor could terminate contract, illegal part of contract was not severable from rest of contract (Sherman Anti-Trust Act [15 U.S.C. A., sections 1-7, 15]).

Since contract expressly provided that, unless the exhibitor were bound by and observed the illegal portion of the agreement, the distributor should not be bound by any of the contract, but might terminate it wholly, the illegal portion was inseparably and vitally connected with all other portions, and in consequence the illegal portion infected the entire contract with illegality.

HON. JNO. F. ALLEN, Judge.

APPEAL from circuit court of Winston county, HON. JNO. F. ALLEN, Judge.

Suit by the Universal Film Exchanges, Incorporated, against J. A. West. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

H. E. McCully, and H. L. Rodgers (of Rodgers & Priscock), both of Louisville, for appellant.

The contract is divisible and will be performed and the Arbitration clause never be called into effect. The invalidity of the Arbitration clause is no defense to an action against an exhibitor for breach of contract in failing to accept and use--or to pay for films furnished under the contract.

United Artist Corporation v. Spokane Theatres-- Wash.-- (No. 87986); Paramount Famous Lasky Corporation v. National Theatre Corporation, No. 3090; Columbia Picture Corporation v. Bi-Metallicia Investment Company--Colo. (No. 9198); Small Company v. Lambon & Company, 267 U.S. 245 at 252; Fox Film Corporation v. Aprile, -- N.Y. --.

Where a contract is severable, and if the right to recover can be established without a stipulation which is void, the recovery cannot be effected by a void stipulation or an illegal clause in the contract.

Riley v. Van-Houten, 4 How. 428; Wilkins & Co. v. Riley, 47 Miss. 313; Merrill v. Melchior, 30 Miss. 516; Clay v. Allen & Co., 63 Miss. 413; Knut v. Nutt, 83 Miss. 371, 35 So. 686, 102 A. S. R. 452; Newberry v. Stegal, 41 Miss. 142.

E. M. Livingston, of Louisville, for appellee.

The Standard Exhibition Contract as adopted with the arbitration clause, is evidence of a conspiracy in restraint of trade and void.

Paramount Famous Lasky Corp. v. United States, 51 S.Ct. 42; United States v. First National Picture, 51 S.Ct. 45.

No allegation in the declaration, shows delivery to appellee. It, therefore, results that appellant is simply undertaking to recover for what it terms a breach of a contract, without performance on its part, and the contract has been held to be void by the Supreme Court of the United States.

A recovery cannot be had on a void contract.

Grapico Bottling Company v. Ennis, 106 So. 97.

Transactions made in violation of the Sunday law are void, and no parties can recover on such contracts, when they are in pari delicto.

Miller v. Lynch, 38 Miss. 344; Koonce v. Price, 40 Miss. 341; Jones v. Brantley, 83 So. 802.

OPINION

Griffth, J.

Appellant, Universal Film Exchanges, is a corporation under the laws of Delaware, and is engaged in the business of the distribution of motion picture films in interstate commerce. One of its distribution branches is located in Memphis, Tenn., and the corporation through its said branch entered into three contracts with appellee, which contracts are the subject-matter of this action. Appellee is an exhibitor at Louisville, in this state. The contracts are annexed in full with the declaration.

The declaration, taking the pleadings strongest against the pleader, as the rule requires, does not aver that any of the films contracted for had been actually delivered to, and used by, the exhibitor; wherefore the cases, McCall Co. v. Hughes, 102 Miss. 375, 59 So. 794, 42 L.R.A. (N.S.) 63, and McCall Co. v. Parson, etc., Co., 107 Miss. 865, 66 So. 274, cannot be made to apply. The case must be considered therefore as involving a refusal to accept, and to pay for, the films, and for the other service contracted to be furnished. Nor does the declaration specify what amount of damage is to be laid to the account of each of the contracts sued on. The charge is that the defendant breached the contracts and the demand was for one sum of three hundred and sixty-eight dollars and seventy-eight cents for the breach of the said contracts without any apportionment to the three contracts severally considered.

All three of these contracts carried an arbitration section, and in one of them the arbitration section is in the identical words of the eighteenth or arbitration section which is copied in the margin of the report of the case, Paramount Famous Lasky Corporation v. United States, 282 U.S. 30, 51 S.Ct. 42, 43, 75 L.Ed. 145, and which section or arbitration provision was in that case declared by the federal Supreme Court to be in violation of the Sherman Anti-Trust Act (15 USCA secs. 1-7, 15). It is conceded by appellant, in the case at bar, that the said arbitration section is violative of law, but appellant contends that the said illegal portion of the contract can be severed from the legal portions, and the latter enforced without taking into consideration the illegal part. In order to obtain a clearer view of whether this may be done, we copy here the said eighteenth or arbitration section:

"Eighteenth. The parties hereto agree that before either of them shall resort to any court to determine, enforce or protect the legal rights of either hereunder, each shall submit to the Board of Arbitration (established or constituted pursuant to the Rules of Arbitration filed with the American Arbitration Association,...