The law of motion pictures (1918)

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DISTRIBUTOR — IN GENERAL 219 claim the amount so received. The plaintiff moved for judgment on that special defense, which was granted by the special term. On appeal the order of the special term was reversed and it was held that the defendants were entitled to set off such amounts received by the plaintiff.2 2 Goldberg v. Popular Pictures Corp. (1917), 178 A. D. (N. Y.) 86. Headnote: The plaintiff agreed to manufacture and deliver to the defendant a moving picture film which the defendant was to have the sole right to exhibit in the United States and Canada and on the delivery of the film the defendant was to advance to the plaintiff the actual cost of manufacture, not to exceed $14,000. The defendant also agreed to pay to the plaintiff fifty per cent of its gross receipts from the exhibition of the film, but the plaintiff was not to be entitled to said percentage until the defendant had first reimbursed itself out of the receipts for the manufacturing cost advanced to the plaintiff on delivery of the film, so that the original cost of manufacture was ultimately to be borne solely by the plaintiff out of its share of the receipts of the defendant. To secure performance the defendant gave a bond of the de fendant surety company, upon which this action is based, which recited and referred to the aforesaid agreement and provided that nothing therein contained shall modify the right of the defendant to repayment of the advances made to the plaintiff out of the moneys realized by the defendant on said production. The answer of the defendants alleged that acceptance of the film was refused because the plaintiff had delivered to another exhibitor substantially the same film under an agreement by which the plaintiff was to receive from the other exhibitor a percentage of its receipts from the production of the picture in the United States and Canada and that it had actually received certain sums of money from said exhibitor. Held, that the obligation of the defendant surety company to pay arose, not only when there was an acceptance of the film manufactured by the plaintiff,