Year book of motion pictures (1937)

EXHIBITION CONTRACTS Exhibition Contracts — Acceptance — Damages Paramount Pictures Distributing Corporation v. Gehring." A distributor accepted by wire, an exhibitor's applications for exhibition contracts. The wire Was delivered to the Western Union Telegraph Co. at 2 :30 p.m. At 2:45 p.m. of the same day (before he received the distributor's wire of acceptance), the exhibitor sent a wire cancelling his applications. The distributor demanded performance of the contracts. The exhibitor disclaimed responsibility claiming the offers were revoked before they were accepted. The distributor sued for the full amount of the unplayed contracts. The jury decided in favor of the exhibitor. The distributor appealed to the Appellate Court of Illinois, which ordered judgment for the distributor, in the full amount of the contract. COMMENT The Court simply restated the familiar rule of law that the acceptance of an offer becomes complete when it is sent, whereas the revocation becomes such when it is received. The Court also held that the rule of damages should be the same as for breach of contracts generally. He said, "If defendant had performed her contracts plaintiff would have been entitled to receive $3,073 as the total rent for its films, and we cannot perceive why her wrongful refusal to perform should absolve her. It is only by the payment of that amount that plaintiff yr'.U be placed in the position it would have been in had the contracts been performed." The Court then expressed the interesting opinion, that exhibition contracts are analogous to apartment leases, employment contracts and advertising contracts, in which the prima facia measure of damages is the contract price itself. The Court said that while it was the distributor's duty to mitigate (lessen) its damages, if possible, "it was up to the exhibitor to prove that the distributor could have mitigated the damages". The Court held the distributor entitled, not only under general principles of contract law, but under the contract itself; there was no proof that the damage clause provided for any illegal penalties and it was not unconscionable or inhibited by law. Exhibition Contracts — Arbitration — Compelling Identification of Party Liable In the Matter of Universal Film Exchanges, Inc.*5 An exhibition contract was signed by one, Bondi, in the name of a fictitious corporation. The contract contained an arbitration clause. The exhibitor discontinued performance under the contract. The distribu tor wished to enforce it, but was in a quandary. A notice of arbitration to the hctitious corporation and even a default judgment against that corporation would be worthless. On the other hand, the distributor felt that the arbitration board (composed of branch managers and exhibitors), would refuse to grant an award against anyone whose name was not on the contract. The distributor requested Bondi to state the actual person or corporation for whom he had signed it, but the request was ignored. The distributor then procured an order, directing Bondi to appear and submit to an examination, for the purpose of ascertaining and identifying the actual person or corporation, for whom the contract was made. Bondi's motion to vacate the order for his examination was denied and he was ordered to appear to testify, so that the proper party to the prospective arbitration proceeding could be thereby identified. COMMENT The Court said, that under the Xew York statutes, the examination of a third party for the purpose of identifying the proper party, in an action about to be commenced, was proper, (See C.I'. A. Sec. 295; Matter of Silverberg, 153 Misc. 126, 273 XYS 831, affid. 243 App. Div. 854, 278 NYS 1019), and held that such an examination could also be had in a special proceeding (CP. A. Sec. 308), and that arbitration was such a proceeding. (Arb. Law, Sec. 6a). The ruling is of practical importance and value. Contracts are often signed by an irresponsible agent for a financially responsible, but undisclosed, principal. Generally speaking, an arbitration proceeding brought against such an irresponsible person, results only in an award against that person. It may follow from this decision, that a person actually liable, can be identified, by examination of the person who signed the contract, thereby disclosing the proper party in enabling the arbitrators to render an award against that party. Such an application will not be granted in Xew York City (Matter of Hufstutler, 220 App. Div. 587). hut will be granted everywhere else in Xew York State, if Justice MacGregor's reasoning and analogv are accepted. ((Matter of Richey, 218 App. Div. 732, (2nd Dept.), Brooklvn, X. Y.) Matter of Kerwin, 246 App. Div. 668, (3rd Dept.)) I appeared for Universal and will forward copy of the briefs used, to any reader hereof, upon request. Exhibition Contracts — Arbitration — Award Against Undisclosed Principal Vitaqraph, Inc., v. High Amusement Co., Inc." An exhibition contract was signed, "L. Isenberg, Mgr." The theatre, was in fact, under lease to a then responsible corpora 748