Motion Picture Herald (Jan-Mar 1932)

52 Better Theatres Section February 13, 1932 to represent the corporation in legal matters. The manager agreed that the corporation would pay the attorney $1,250 for the services to be rendered. Later the corporation refused to pay the bill presented by the attorney on the grounds that the manager had exceeded his authority when entering into the contract without having the approval of the board of directors of the corporation. The corporation further alleged that the manager had no authority to make employment contracts. The attorney contended that the manager was a local manager and in charge of the affairs of the company and, as such local manager, therefore had authority to employ him. The lower court held the corporation liable for services rendered by the attorney and the higher court upheld this decision. Effect of Law Violation MANY STATES have enacted laws which require corporations, whose headquarters are outside the state, to comply with certain requirements, such as filing certain informative papers with the Secretary of State. Usually, these laws specify that foreign corporations which fail to abide by these requirements forfeit their right to file suit against citizens of the state. The latest higher court case involving this point of the law is Short Films Syndicate Company v. Standard Film Service Company (176 N. E. 893). The facts are that a theatre owner and a film distributor entered into a written contract by the terms of which the latter leased the theatre owner certain moving picture films. The theatre owner failed to fulfill the obligations of the contract and the film distributor filed suit to recover damages. During the trial it was disclosed that the film distributor was located outside the state and had failed to comply with a state law which provided : "Before a foreign corporation for profit transacts business in this state it shall procure from the Secretary of State a certificate that it has complied with the requirements of law to authorize it to do business in this state. ... No such foreign corporation doing business in this state without such certificate shall maintain an action in this state upon a contract made by it in this state until it has such certificate." Therefore, the higher court held the theatre owner not liable, since the film distributor was not legally entitled to file suit within the state. Agreement to Sell Enforceable generally speaking, a contract is not rendered void because it contains two or more clauses under which the contracting parties assume varied kinds of obligations. This rule of the law is applicable with respect to leases and the sale of theatre equipment. For instance, in Seches v. Bard (4 P. [2d] 167), it was shown that a man named Bard was interested in the building of three theatres. Bard, together with other persons, decided to organize a corporation to acquire other motion picture theatres. Therefore, Bard contracted with a motion picture corporation wherein he agreed to assign his lease of the theatres to the corporation and sell certain of the theatre equipment and personal property in consideration of a certain amount in cash and a specified number of shares of corporation stock. Later litigation arose over the question whether a contract of this nature is valid and enforceable. In holding the contract valid, the court said : "The lease transferred was valid consideration for the stock. ... It is quite natural that the value of a lease should depend upon future returns from the property. . . . One part cannot be separated from the other. The agreement had as its object the consolidation of a number of theatres, and the provisions as to the three new theatres and the stock issued for their leases cannot be severed from the balance of the contract." Liability of Architect THE LAW requires an architect to exercise ordinary care in preparation of plans and specifications. Moreover, he must be reasonably competent {Continued on page 58) I i;h<S«onsBUc<ric Corporation TOLEDO, OHIO j5„, LAGRANGE ST.^.„ 5,., h v„k. N. V. Export Umce. t Projecting Sound Pictures by AARON NADELL Chapters on film and disc reproduction . . . amplifiers and rectifiers . . . vacuum tubes . . . motor-generator sets ... a complete treatise on the operation, maintenance and repair of sound equipment. It Is a Practical Textbook on Sound Projection Price $2:60 (including postage) MOTION PICTURE HERALD BOOKSHOP 1790 Broadway New York City