The motion picture almanac (1932)

330 The MOTION PICTURE ALMANAC 1932 to the business done within the state, is valid, although including receipts from interstate commerce. Also, in other instances state taxation is valid against income derived from governmental sources. For example, in Educational Films Corporation of America v. Ward (51 S. Ct. 170), the New York Tax Law imposes an annual tax on every corporation within the state of certain classes "for the privilege of exercising its franchise in this state in a corporate or organized capacity." The tax is payable each year at the rate of 4^ per cent on the corporation's entire net income from any source, and "is presumably the same as the entire net income" reported for income taxation to the United States, "plus dividends on stocks or any interest received on bonds of any character." A film company filed suit to prevent collection of taxes on the grounds that it was the owner of copyrights granted by the United States upon motion picture films, and had received royalties from the licensing of them. It challenged the tax assessed against it under the statute for the amount of the royalties. It was argued that the copyrights and all income derived from them are immune from state taxation since they, like patents, are instrumentalities of the federal government, taxation of which the Constitution impliedly forbids. However, the higher court held the taxation valid, stating important taxation law, as follows: "So far as it concerns the power of a state to impose a tax on corporate franchises, the problem has long since ceased to be novel. While this court has consistently held that the instrumentalities of either government, or the income derived from them, may not be made the direct object of taxation by the other ... it has held with like consistency that the privilege of exercising the corporate franchise is no less an appropriate object of taxation by one government merely because the corporate property or net income, which is made the measure of the tax, may chance to include the obligations of the other, or the income derived from them. ... It cannot be said that the present tax was aimed at copyrights." Another important point of the law is that the constitutional principle of "equal rights to all and special priveleges to none" is recognized by all courts. Therefore, a tax levied by the General Assembly on trades, professions, franchises, incomes in violation of this constitutional provision results in unjust or arbitrary discriminations which is inconsistent with natural justice, and its collection will be restrained or, if paid, will be ordered refunded to the taxpayer. [See Great v. Doughton (196 N. C. 145).] On the other hand, in the case of Maxwell (154 S. E. 838), decided toward the close of 1931, a state law was held valid which provides that every person, firm or corporation engaged in the business of operating or maintaining in the state, under the same general management, supervision, or ownership, two or more places of businesses shall pay a license fee of fifty dollars on each and every business operated, provided more than one business was operated. It was contended this law was invalid, but the higher court upheld its validity. Usually, all money received by a theatre is taxable as "gross," although a portion of the receipts is received from a part of the business not intended to net a profit. For example, in State v. Chicago (232 N. W. 105), the state sued to collect on income from the parcel checking room and other concessions. Although it was contended that the parcel checking room was maintained for the convenience of the public, the higher court held the income therefrom taxable as gross receipts. TRADE FIXTURES Generally speaking, the owner of a building is entitled to retain all equipment known as "legal fixtures" which are permanently affixed to the building by a theatre operator. A legal fixture is anything that cannot be removed without injury to the building, but a trade fixture is theatre equipment which a theatre operator, who leases a building, may remove at the termination of a lease. In Connor v. Burns & Schaffer Amusement company (149 Atl. 66), a property owner and a theatre operator entered into a lease which contained the following clause: "It is agreed between the parties hereto that any alterations that the party of the second part (theatre operator) desires to make to the demised premises shall be made at its own expense . . . and all such alterations, additions and changes, which shall include the erection of any stages, electric wiring or lighting systems, are to immediately merge and become a permanent part of the realty." The theatre operator installed an expensive pipe organ in the theatre building and when the lease terminated the landlord contended that, in view of the above clause in the lease contract, the organ became a permanent part of the building. However, the court held the theatre operator rightfully entitled to remove the organ, saying: "It is quite clear that the pipe organ was a trade fixture, and, therefore, under the settled law, in relation to trade fixtures, as between landlord and tenant, the organ was removable, even though it was attached to the realty." MISCELLANEOUS It is well settled that a theatre owner may be held liable in damages for libelous or slanderous statements where it is shown that the complaining party actually is injured by such statements. This is true although the slanderous or libelous statement is not directed specifically to the complaining party. For instance, in Norman v. Stevenson Theatres (156 S. E. 357), it was disclosed that a theatre owner inserted in local papers the following notice: "To Whom It May Concern: It is the desire of the proprietors of the Stevenson Theatre that all employes pay cash for any and all purchases of every description for both personal and theatre use. Therefore, please take notice that this company will not become responsible for any debts incurred by anyone whether connected with this theatre or not, unless such merchant or person shall have written authority from the proprietors to establish a credit account. We have every confidence in our employes, but we wish to make our position clear. Dick Chastaine, Manager, Stevenson Theatres, Inc., Proprietors, Henderson, N. C." A person, who had been cashier at the theatre, sued the theatre owner for damages, contending that she had been injured by the publication of the above notice. Tn fact, she proved that she had been unable to obtain employment. She also proved that the theatre manager had made certain remarks which indicated that the notice had been published for her benefit. The jury held the theatre owner liable for $1,500 damages and the higher court upheld this verdict, saying "The language of the published notice, considered in the light of all the extrinsic facts and circumstances as testified to, was susceptible of more than one meaning, and whether the meaning was intended by the utterer to be innocent or defamatory was a question for the jury." Generally speaking, the higher court will not reverse a jury's decision, unless it is shown conclusively that its verdict is unfair. For example, in Enterprise Theatre corporation v. Stutz (156 S. E. 401), a theatre promoter named Stutz filed suit against the Enterprise Theatre corporation to recover the sum of $10,000 which he claimed to be due him for the breach of a written contract in which he contended the theatre corporation officials had agreed to pay Stutz a certain amount of money for promoting a theatre and if the corporation failed to A VERY NECESSARY PART OF THE PROJECTION EQUIPMENT Needed as an aid to lessen the probability of an abrupt termination of your show, with the resultant possibility of having to refund the evening's receipts. Absolutely helps to improve projection results. RICHARDSON'S HANDBOOKS ON PROJECTION Prices Volumes I and 2 $6.20 Volume 3 $5.10 or Combination rate (complete set). $10.20 Certified check or money order, or we will ship C.O.D. HERALD BOOKSHOP 1790 Broadway New York City fulfill its obligations it would pay to Stutz the sum of $10,000. During the trial certain officials testified that positive conditions were agreed upon when the contract was signed and which were believed to relieve the corporation from liability. However, the jury held Stutz entitled to a recovery, and the higher court upheld the verdict. fn all instances in which the municipality, or any co-ordinate branch of government acting for it, is given discretionary power of control and supervision over public property, the exercise of this discretion in determining what is fit and what is unfit cannot be decided by private persons such as theatre owners who seek to place permanent structures in the public highways or streets for their private accommodations. For this reason any reasonable law is valid by which a board is granted authority to refuse construction of theatre improvements. [See Walnut & Quince Streets corporation v. Mills (154 Atl. 29).] A recent higher United States court (GrandMorgan Theatre company v. Kearney, 40 F. [2d] 235), upheld a law which requires theatre owners to maintain the premises in safe condition. This law reads as follows : "The owner of a theatre, like the owner of every other sort of business, or most other sorts of business, is obligated to exercise ordinary care for the safety of people who visit the theatre, and a patron who goes to the theatre is under the same duty to exercise ordinary care for his own safety." Another important point is that all questions involving negligence of the theatre owner must be decided by a jury. The facts of this case are that a patron entered the balcony of a theatre at the time the picture was being shown. He testified that he stood a minute or two so as to accustom his eyes to the darkness, and, as no usher was there, decided to walk over and look for a seat. He was not able to see anything clearly, the steps and seats were more or less of an outline, but noticed there were quite a few empty seats. As he attempted to descend the steps he caught his right foot on the carpet and fell. After his fall he went back and examined the step, and discerned that the carpet was crumpled up to the edge; that there was a rise there of approximately an inch, and probably an inch and a half or two inches back from the front edge of the step; that it was either padding under the carpet that had become wadded up or the carpet had become loose. He had been to the theatre before, and knew where to go, but on the previous occasions he had always been led down to his seat by an usher who carried a flashlight and walked ahead of him holding the light. The chief engineer, employed by the theatre owner, testified that regular inspections were made of the carpet and the lights in the theatre and at the place where the patron fell, and that there was no roll in the carpet, but that it was smooth and in good condition. Also, the lights were in good condition and were bright enough to not only show the steps, but to enable one to see the figures in the carpet. During the trial the judge of the court stated the grounds of negligence submitted to the jury as follows: (1) That the theatre owner negligently permitted the left side of the balcony of the theatre to remain without sufficient light to guide patrons down the aisle and to enable them to clearly see the steps thereof; and (2) that the theatre owner failed to have an usher on the aisle of the balcony to direct the patron to his seat, and that by reason thereof his foot was caused to be caught on the edge of the steps of the aisle and the patron was injured. The jury considered the testimony and rendered a verdict in favor of the injured patron, allowing him a large sum as damages. The counsel for the theatre owner appealed to the higher court on the grounds that the decision was erroneously rendered because the jury was not permitted to determine whether the carpet was defective. Therefore, the higher court reversed the verdict of the jury, saying: "Nowhere in the instructions was the question of a defect in the carpet mentioned. . . . The evidence discloses an issue on the fact question of whether the carpet was in good condition. . . . The plaintiff entered the theatre as a patron and invitee, and it was the duty of the defendant (theatre owner) to construct and maintain the premises in a reasonably safe and suitable condition for the protection of patrons. In general, the duty to keep premises safe for invitees applies only to defects or conditions which are in the nature of hidden defects. ... It is also a general rule that, in order to impose liability for an injury to an invitee by reason of the dangerous condition of the premises, the condition must have been known to the owner or occupant or have existed for such time that it was the duty of the owner to know of it." * It is well established law that any theatre owner who builds a structure that projects over a sidewalk may be held liable in damages for injuries caused pedestrians who walk in contact with the structure. So held a higher court in the late case of Montgomery v. Nelson (295 Pac. 1034). In this case it was shown that a property owner built an advertising case on the front portion of his building. The case was provided with a door to he opened for inserting new advertising matter. One day a pedestrian bumped into the rod used to support the door and was seriously injured. Although the lower court held the property owner not liable, the higher court reversed this decision.