Film year book : 1922-23 (1923)

lures to the plaintiff for purposes of sul)-rental by hull to other exhibitors, and the defendant iiotThed memljcrs of his circuit that thereafter their pictures could only be obtained through them. As a result of this the plaintiff claimed he had been ruined and driven out of business, and he brought suit in the Federal Court in Op-a'a. seeking to recover $750,000 as treble the damages he claimed to have sustained, by reason of the defendants' supposed violation of the Federal Anti Trust Statutes alleging that the defendants had entered into a conspiracy to put him out of business largely by refusing to deal with him. The trial court directed a verdict for the defendants upon two grounds first, that the transactions described by the plaintiff did not involve or disclose any restraint of interstate trade and commerce as claimed by plaintiff and second, that the alleged acts of the defendants were not in other respects unlawful. In the Circuit Court of Appeals tw^o judges were of the opinion that the transactions described did not involve interstate commerce and upon that ground the judgment in favor of the defendants was affirmed. One of the judges in the Circuit Court of Appeals dissented upon the ground that the transactions described did involve interstate commerce and the case is now pending in the Supreme Court of the United States. The Nebraska Advance Deposit Law In the latter part of the year 1921 the Attorney General of the State of Nebraska notified all of the National Distributors doing business in that State that unless they observed the provisions of the so-called Nebraska Advance Deposit Bill, he would be obliged to institute proceedings against them to compel its enforcement. Thereupon in December, 1921, The Goldwyn Distributing Corporation in conjunction with five other national distributing corporations, filed a suit in the Federal Court in that State to enjoin the Attorney General and all State officers charged with the enforcement of the laws of that State, from enforcing the provisions of the Advance Deposit Law against them or any other distributors, upon the ground that the statute violated several provisions of the Federal Constitution as well as certain provisions of the Constitution of the State of Nebraska and was for these reasons unenforceable and void. The complainants' application for a temporary injunction came on for hearing on February 27, 1922, before three Federal Judges sitting in Omaha, and resulted in a decision which declared the statute unconstitutional and in an order granting the injunction. Circuit Judge Lewis delivered the opinion ot the Court, in which he said in part : "Judge Munger and I are of the view that the provision of the act requiring that 'money deposited or advanced as security on a contract for the use or rental of motion picture films, reels or views and to secure the performance of the contract or to be applied to payments upon such contract when due, such money, with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person, association or corporation making such deposit or advance and shall be a trust fund,' is a valid exercise of the police power of the State, and that in that respect the act is constitutional. "Judge Woodrough is of the opinion that the purpose of the Act, considering its title, is broader in scope than to apply it simply to money advanced as security for the performance of a contract ; that its purpose is to require all payments on a contract to be kept within the State and declared as a trust fund, and so considering it in that respect, that it is an interference with the right of contract and is void. "We all agree, however, that the following provision of the statute, with reference to the deposit of these funds in any bank or trust company within the State of Nebraska, is not a permissible exercise of the police power, that it puts the hazard both upon the bailor and bailee of having the funds lost through the failure of the hank, without any provision for restitution to the party entitled to the funds. In other words, that it takes, as it were, in that event, the prope-ty of the party who might ultimately be entitled to the deposit without any consideration. The fund to be on deposit as a trust fund, named in the act, would ultimately belong to one or the other of the parties to the contract. It takes from the bailee the exercise of his judgment and responsibility in the keeping of that fund; it requires that he put that fund in some bank or trust company within the State of Nebraska. It makes no provision, by taxation or otherwise, in event of failure of the bank, for the restoration of that fund and its payment ultimately to the party who might be entitled to the fund. For that reason we agree that it is an interference with the constitutional right of property and the disposition of property." Judge Munger added the following: "My opinion is that the act is unconstitutional as it applies to the bailees mentioned in it, of whom the plaintiff and intervenors are some; that these bailees have the right to liberty and property granted to them by the Fourteenth Amend ment to the Constitution. I say this in that the money wh ch the act provides is or may be paid to them shall be deposited in a Nebraska bank, or a Nebraska trust company, instead of allowing them freedom of contract and of will, which are a part of liberty and property, by placing the money in such other place of deposit, or keeping it without deposit, as in the judgment of the bailees should be done with it under the circumstances. My impression also is that the Act offends against the interstate commerce clause of the United States Constitution, in that the plaintiff and intervenors, as such bailees, under these contracts, would have the right to take the money received as bailment to such other place without the State of Nebraska as in their judgment would be more suitable to its safety and the management of their business." Nothing further has been done in the case and counsel interested in it are of the opinion that the Court's decision finally disposes of the questions involved. The case is of great importance to the industry. Five states have passed so-called Advance Deposit laws, namely. New York, West Virginia, Nebraska, M ssouri and Kansas. The decision not only invalidates the Advance Deposit Law of Nebraska, but it indicates that a similar result would be obtained if the validity of the Advance Deposit Law of Missouri or Kansas should be drawn in question under similar circumstances. The Nebraska statute and the statute of Missouri and Kansas are very similar, and inasmuch as each of these states is within the Eighth Judicial Circuit in which the decision was rendered, it greatly strengthens the belief of many well informed counsel that the statutes of Missouri and Kansas are iust as vulnerable as the statute of Nebraska and that both would be declared invalid if their validity should ever be attacked. News Reels Held To Be Within The New York Censorship Law In May, 1922. the Pathe Exchange Tnc.. instituted a suit against the members of the Motion Picture Comm'ssion of the State of New York, to restrain the Commissinn from enforcng the provisions of the New York Censorship Statute in so far as the provisions of that statute appeared to be applicable to the news reels and "Current Events" in Film distributed by Pathe Exchange. The controversy was submitted to the Appellate Division in the Sunreme Court. Third D-oartment. upon an agreed statements of facts and was decided early in July. 1922. Pathe claimed that news reels were not like other motion pictures because news reels depicted actual hapoeriings and events as thev occurred and were not fictional or dramatic nroductions in the theatrical sense. but were a well-established method of transmitting news to the public in pictorial form and as such, that news reels were in the same class and category as newspapers, and consequently entitled to tl<e s.-mie ronstitntV al privileges and immunities as the press enioyed. That portion of the Constitution of the State of New York which gugrcVitQcs freedom of speech 370