Variety (November 1923)

yWexaiSiy, Novefnber 22, 192S PICTURES VARIETY 23 HUDSON BAY CO. VS. FILM CO. urn. CASE iCharge in English Court "Call : L of North" Misrepresented '; . Traders London, Nor. IS. Before Mr. Justice Darling In the XlnC'a Bench Division, Nov. 12. the Hudson Bay Company brought an mcUon In which it was alleged the eompany had been libelled bf a film made by Famous-Lasky. The |»icture was "The Call of the North," ma adaptation of a novel "Con- Jurors Hou.se: a Romance of the , Forost," which defendant firm made ■ome eight years ago. All titles were taken from the novel and cer- tain 'Statements in the novel were made' statements in the film. It WAS staled the film indicated It wa« part of the Hudson B.iy Company's method to deprive peo- ple of the right to trade where they Uked. At that time the company took exception to it and the pro- ducer made IncLsions and altered the titles, but when the print was ■ent over to England it was the oM one containing the material complained of. Counsel stated Fa- mous-Lasky had behaved very handsomel.v. They admitted the libel and agreed to withdraw and alter the film and to pay all costs. Sir Edward Marshall-Hall K. C. •aid It seemed Incredible anything anyone could say would injure the Hudson Bay Company who stpod as high above stigma of libel as Nel- son did on his pedestal in Trafalgar Square. The judge said Famous- liasky was penitent and it wa.s In- teresting to note they stood in the •ame po.sitlon as the person who lon^ ago was forbidden to speak disrespectfully of the equator. This Is a reference to the wit, Sydney Smith, who lived It. the eii;hteenth century. Speaking of another man he said: 'No one minds what Jef- frey says—!t is not more than a weak ago that I heard him speak ttlsrespectfully of the equator." N. C. FACTIONS SETTLE Theatre Owners and Composers Reach Copyright Agreement. Charlotte, N. C, Nov. 21. Representatives of the North Carolina Theatre Owners' Associa- tion and the American Society of Composers, Authors and Publishers held an Impottatit conference here last week for the purpose of thresh- ing out difl'erencos relative to the rights of copyright proprietors in connection with the public perform- ance of musical works In the mo- tion picture theatres of the state. Representing the theatre owners were H«^. Varner, James A. Est- , ridge, and the following di-strlct rep- resentatives, A. F. Sams, C. A. Turnage, G. C. Gammon, It. D. . graver, M. If. Hill and J. E. Simp- son. For the American Soo'Cty of Composers, Authors and Publi.ihers were James Manning, Allan Davis and E. C. MiII.i. The outourne of the conference was an agreement governing the licensing, beginning Dec. 1. of the motion picture theatres of the state to publicly perform thereaftsr the copyrights of the composers under a sliding "scale of rates to be mu- tually agreed upon and taking into consideration the capacity of the theatre, population of the town and general conditions. The agreement contemplates readjustment of exist- ing licenses to conform with the re- vised schedule and al.so the with- drawal of some 50 or more cases which have been filed in K^ilelgh by the societ.v .".qaii-.st thcatrj owners for Intrlngcmoiit of copyright. The settleniont relieves the theatre owners of the severe restrictions heretofore existing and at the same time assures tho owners of co;iy- rights of due consideration from all theatre.-!. The coiimiitfee of the theatre owners' association also dcciJed to hold the next convention at the Robert E. I.ee Hotel in Winston- Salem, Doc. 13 and 19. PICTURES PROVE ERROR Pathe'e Slow Motion of Zev-ln Memorlam Show Judges Erred RUTH ROLAND TO WED ? I.OS -Vngolcs, Nov. CI, Ruth Roland, the screen si-rial star, who l.itoly was of the opinion that she winlod ti make nothing but feature proiluctions, and Cllfl.' Durant, the millionaire automobile racing driver, are reported engaged ■<o marry No dnt" for the eer^mony «nnou:ir^d The Blow motion pictures held ercluaiveiy by Pathe of the finish of Zev-In Memorlam match race at lyOUlsviUs show foncluslvely that the judges of the race erred in de- ciding that Zev was the victor in the contest. In addition to the proof of the pictures themselves tho Pathe people have had the situation worked out by a professor of mathematics who shows that had both the horses been on the outside rail In Memorlam would have won by four Inches and the further the distance that the horses were from the outer rail to the inside of the track, increases the margin by which the horse that was declared second really won the match. DETROIT'S SIXTH Kunaky Gets Downtown Site for 3,000-Seat Film House Detroit, Nov. 21. John H. Konsky, who now oper- ates the Madison, Adams and Capi- tol theatres exclusively for first-run motion pictures, haa secured an- other downtown location, on which he will erect a 3,000-seat house some time within the next 18 months. It will also be for pictures. This will give Detroit six first-run photoplay theatres. ALAN HOLUBAR DIES Director Passes Away After Opera- tion—Was III for Three Months Los Angeles. Nov. 21. Alan Holubar, 33, picture direc- tor, who was under contract to Metro to make throe features for that organization, died yesterday at his home here. lie had been ill for three months suffering from an in- ternal disorder and gall stones. Several weeks ago he wa:i operated on ^t a local hospital and recently left there for his home. He is survived by his wife who Is Dorothy Phillips on the screen, and a daughter, age six years. His career in pictures covers ten years, he originally having been with Universal. He has been on the speaking stage In stock and It was while both he and his wife were with the company of "Everywoman" on tour that they met and were married. The funeral took place here today with practically the entire industry as centered here represented and paying tribute to tho young director. GUEST'S POEMS IN FILM Boston. Nov. 21. The Atlas Studio In Xewtonville, Mass., has started Jllming Edgar Guest's poems and he was a gutst of honor at the studios last tiun- day. The first release, "The Man Who Couldn't Save," is on the way now and it is planned to incorporate fifteen of his poems into a feature named "Just Folks," which Is the name he uses in his column. FILM TRUST DECISION IN FULL (Continued from page 19) the motion and instructed the Jury to return a verdict for the dofend- f.nts, which was done. Thereupon judgment was entered upon the ver- dict dismissing the cause. In a memorandum opinion the trial Judge states that he had reached the conclusion that the motion should be sustaWked upon the grounds: (1) That tlie petition does not show with sutllcient clearness that the complaint is one over which the court has juri.<«11ctlon: (2) That it fails to show with sufficient clearness iiiiy combination or conspiracy sufficient to justify the court in proceeding further wltii the trial. The case w;w taken by writ of error to the Circuit Court of Appeals, where the judgment wai affirmed for want of jurisdiction in the District Court. 280 Fed. 301. First. Defendants in error have submitted a motion to dismiss the writ of error here. The statement on the ground is somewhat ambig- uous, but It is. In substance, that the motion in the trial court att.-ickcd the complaint for a failure to state a cause of action onder the Sher- man Act; that this constituted a challenge to the jurisdiction and, con- sequently, the writ of error should have been taken directly to this Court. But the motion below in terms was put uppn the ground thnt the complaint and the opening statement failed to state facts fUlTlelent to constitute a cause of action,—not that the court w.os without juris- diction,—and It is this motion that was sustained. The memorandum, It is true. Indicates that the trial Judge w.oa of opinion that the motion for a directed .-erdlct went to the Jurisdiction: but It is iipp;ircnt that, as to this, he assumed that an unsuccessful attempt to allege facts suf- ficient to constitute a cause of action under a feder.al statute constitutes a Jurisdictional defect. Section 2JS of the Judicial Code provides that appeals and writs of error may be t.aken from the district courts direct to this Court "In any case in which the jurisdiction of the [district] court Is in i.^sue." As it has been many times decided, the jurisdiction meant by the statute is that of the court as a federal court only, and not its jurisdiction upon general grounds of law or procedure. See. for example. I.ouUiillc Trust Companu v. Kiiott, 191 U. S. 225. The contention here seems to be broadly, that where the cause of action is based upon an .act <.f Congress, unless the complaint states a case within the terms of the act the federal court is without Jurisdiction. Jurisdiction I.^ the power to decide a Justiciable controversy, and in- cludes questions of law as well as of fact. A complaint, setting forth a substantial claim under a federal statute presents a cAse within the jurisdiction of the court as a federal court; and this Jurlsdletion cannot be made to stand or fall upon the woy the court may chance to decide an Issue as to the legal sufficiency of the facts aHeged any m.ore than upon the way it may deciae as to the legal sufficiency of the facts proven. Its decision either way upon either question is predlrated ui)on the existence of jurisdiction, not upon the ab.sence of it. Jurisilictlon, as distinguished from merits. Is wanting only where the claim set forth in the complaint is so unsubstantial as to be frivolous or. In other words. Is plainly without color of merit. ^Vciland v. PionFcr Irrigation Co., 259 U. S. 498 501; Newhvryport tl'nfcr Co. v. Nru^buruport, 193 U. S. 5(il. 576; .Wnftcrj V. Ilyan, 249 V. S. 375, 377; Flamtrrs v. Coloman, 250 U. H. 223. 227: L. d N. R. n Co. v. ICicc, 217 U. S. 201, 203: l^mpll v. Ncwmnn, 227 U. S. 412, 421; /)ciirer First National liank v. Klug 186 U. S. 202. 204; Louie V. Vnitcd states. 254 U. S. 518; Hart v. KcHh Hrrhanpr, 2G2 U. S 271. 273: The Fair v. Kohler Die Co., 228 U. S. 22, 25. In that event the claim of federal right under the statute. Is a mere pretence and, In efffct, is no claim at all. I'lalnly there is no such want of substance .asserted here. In the case last cited this Court said (p. 25): "We are speaking of a case where Jurisdiction is Incident to a federal statutory cause of action. Jurisdiction i.s authority to deride the case either way. l^nsucccs^ful as well as successful suits may be lirou>;lit upon the act, and a decision th.at a patent is bad, whether on the faets or the law, is as binding as one that it is good. See Fanntleroy i', Lum. 210 V. S. 230, 235. No doubt If it should appear that the plaintiff was not reall.v relying upon the patent law for his alleged riKlits. or if the claim ot right were frivolous, the case might be dismisFed. In the former Instance the suit would r.ut really and substantially involve a controversy within the jurisdirtion of the court. Excelsior Womlen I'ipe Co. i'. I'aeifie Ijridge Co., 185 K. S. 282, 287, 2SS, and In the latter the jurisilietion would not In denied, except possibly in form. Deming i-. Carlisle Park- ing Co.. 226 IT. S. 102, 109. Hut If the plaintiff really makes a substan- tial claim under an act of Congress there is jurisdiction whether the claim ultimately be held good or bad.' In I.amnr v. I'nitnl Htatcf, 240 V. S. <>n ti,l<i r'niirt de.-.It with the ques- tion whether the f iiltire of an indielnieul to eli.ii«e a < rime against ttie I'niled Stales presented a question of Jurlsdiitlon within the me.inlng of Section 238 of the Judicial Code. The court held In the negatlye. saying (i>. 644-; '■ ' ■Jurlsdii'tion is a m.atter of power and eovers wrong ns well as richt derisions Fauntleroy v. I.um. 210 I'. .M 2.10, 234, 23'.. Miirnet r. I)es- mornos. 226 l'. S. 145, 147. There may be instancen in which It Is Ii.ird to siiy whether .a law g'>es to the pf>wer or only to the duty of the court: but the argument is jnes.'^ed too far. A deelslon tl at a pnleiit is had. either on th ! ' icts or on the law, is as blniling a.? one th.it it is irood. The Fair ?'. Kililer Die Co.. 228 1'. S. 22, 25. And nothing can be clearer than that the District Court, which h.is jurisdiction of nil i rimes coif- nizahle under the authority of the I'nilcii States (.Iiidii i.ij Code of Marci, 3. 1911, e. 231. p.ir. 21. second), acts equally within its jurisilirli.m whether it decide., a ni.m to be guilty or innocei t under the triniin.il law. and whether its decision is rlijht or wrong. The objection that the Indictment does not chart'" a crime against the iriiileil Stitei soes only tr, the nierlls of the case," Our attention is directerl to certain decisions •of this Court which are said to supr>ort the poptenlion of <le£fijidaf(;t.< Ig orrof., \V,a thUtH tb''lr effoct Is misapprehended. In The Stii;n»ljip .lelTei.sfin, 2lti t', S. J Jo., the case had lioen dl.-misse.l 'lelow e.Tnri><iSlv' fop wiinr of iiir!i,iieii.>n It was asserted in support of a motion to disralae the appeal that while in form of expression the suit wag so dismissed, the action ot the lower court was "In substance alone based on the conclusion that the facts alleged were Insufllclent to authorize recovery, even although the case was within thj Jurisdiction of the court." it was iicid, however, that the conclusion of the District Court w.is one which went to the Jurisdic- tion, not to the sufficiency of the allegations of the bill; and there is no suggestion in the opinion that the two propositions are equivalent. In The Ira il. Hedges, 218 U. S. 204, where the aainu condition was presented, this Court, after pointing out tho dilficulty of sometimes distinguishing between matters going to the Jurisdiction and tho.so determining the merits and suggesting that It might be said that there the two con- siderations coalesced, rested its decision upon the form of the decree, saying (p. 270) "At all events, the form of the decree must be taken to express the meaning of the Judge. If the decree was founded, as It purports to be. on a dental of Jurisdiction In the court, this court has jurisdiction of the appeal. For all admiralty juri.sdictlon belongs to courts of the United States as such, and therefore the denial of jurisdiction brings the appeal within the established rule. See The Steamship Jefferson, 21S U. S. 130, 138." In Blumcnstock Brothers v. Curtis Publishing Co., 252 U. S. 438, 441, it Is said: "In any case alleged to come within the federal jurisdiction It is not enough to allege that questions of a federal character arise in the case. It must plainly apjiear that the averments attempting to bring the case within federal Jurisdiction are real and substantial." The only authority cited In support of this statement is Keioburyport 'Water Co. v. Newbiiryport, supra, where, at p. 676, the rule is stated thus: ". . . it is settled that Jurisdiction does not arise simply because an nvormcnt i.j made as to the existence of a constitutional question, if It plainly appears that such averment is not real and substantial, but is without color of merit." While the Blumenstock case seems to put the emphasis of the test in the opposite way, It cannot bo supposed that It was meant to modify the doctrine of the Nrnburi/iiort case, sinte its citation as authority is made without quaimcitlon. It follows that the motion to dismiss the writ of error must be denied. Second. AV,- come then to consider whether tho averments of the complaint are sufficient to constitute a cause of action under the Anti- Trust Act; and this Inquiry Involves two questions: (1) Are the alleged transactions in which the exhibitor was engaged matters of Interstate commerce, and (2) I.>o the alleged acts of the defendants in error con- stitute a combination or conspiracy in restraint thereof? ]. The film contracts were between residents of different States and contemplated the leasing by one to the other ot a commodity manu- factured In one State and transported and to be transported to and used ii> another. The business of the distributors Of which the arrangement with the exhibitor here was an instance, was clearly interstate. It con- sl.'ted of manufacturing the commodity In one State, finding customers for it in othor«States, making contracts of lease with them, and trans- portlug the commodity leased from the State of manufacture Into the .States of the lessees. If the commodity were consigned directly to the lessees, the Interstate character of the commerce throughout would not be disputed. Docs the circumstance that in the course of the process the commodity is consigned to a local agency of the distributors, to be by that agency held until delivery to the lessee In the same State, put an end to tha Interstate character ot the transaction and transform it into one puroTy Intrastate? We think not. Tho intermediate delivery to the agency did not end and was not Intended to end the movement of the commodity. It was merely halted as a convenient step in the process of getting It to Its lln.al destination. The ge«ieral rule Is that where transportation has acquired an Interstate character "It continues a' least until the load reaches the point where the parties originally Intended that the movement should finally end." Ill, Cent. H. H. v. Louisiana Jt. li. Com.. 236 V. S. 157, 103. And see. WcatemVnion Te\ Co. V. Foster, 247 L'. S. 105. 113; ll'Cilfrn Oil JXeflning Co. v. Liptcomb, 214 V. a. 346 349. In Biiift <f Co. V. Vniird f<tates. 19« TT. S. »78, 39». It was held that \vhere cattle were sent for sale from a place In one State, with the ex- pectation that the transit wnulil end after purchase In another State, the only Interruption being tint necessary to find a purchaser at the stockyards, and this was a typtotl. constantly recurring course, the whole transaction was- one in Interstate commerce and the purchase a part and incident pf It. It further appeared In that case that Swift A Com- pany were also engaged In shipping fresh ments to their respective agents at the iirlnclp,"!I markets in other cities for sale by such accents In those markets to dealers and consumers; and these sales were held tr, be part of the Interstate transaction upon the ground "that the same things which are sent to agents are sold by thein and . , . some at l^ast of the sales are of the original pu<'kages. Moreover the sa)es are by persons In one'.Strife to persons In another." In the skme case in tho court below, 122 Fed, Rep. 529, 533, upon this branch of the case, it is said: "I think the same Is true of meat sent to agents, and sold from their stores. The transaction. In such ca.se. In reality, is between the pur- chaser and the agents' principal. The agents represent the principal at the place where the exchange takes place; but the transaction, as a com- mercial entity. Includes the principal, and Includes him as dealing from his place of business." The most recent expresnion of this court is In Stafford v. Wallace, 258 I'. S. 495, 516, where, after ileMcriliing tho process by which livestock aro transported to the stockyards and thence to tho purchasers. It is snlil: "Such transactions can not be separ.ated from the movement to which they contribute and necessarily take on Its character. Tne commission men are essential in making the sales without which the fiow of the current would be obstructed, and this, whether they are made to pack- ers or dealers. The dealers are csttential to the sales to the stock farm- ers and feeders. The sales arc not in this aspect merely local transac- tions. They create a local change of title. It is true, but they do not stop the flow; they merely change the private Interests in the subject of the current, not It.terfering with, but on the contrary, being Indlspen^-able to Its continuity." Tho transactions hero are essentially the same as those Involved In the foregoing cases, substituting the word "film" for the word "livestock" or "cattle" or "moat." Whatever difference exists Is of degree and not In character. The cases cited by defendants In error, upholding state taxation as not constituting an Interference with Interstate commerce are of little value to th; inquiry here. It does not follow that because a thing Is subject to st.ate taxation It Is also Immune from federal regulation under the Commerce Clause. Stafford v. Wa'laee, supra, pp. 525-527; Addyston Pipe I.lne Co. v. Vniird States. 175 V. S. 211, 245. 2. The distributors, according to the allegations of the complaint, eniitrolled the distribution of all films In the United States and the exhlliilor could not procure them from others. The direct result ot the alleged conspiracy and combination not to sell to the exhibitor, there- fore, was to put an end to his partlclp.atlon in that business. Interstate coinmerie Includes the Interstate purchase, sale, lease, and exchange ot commodities and any combination or conspiracy which unreasonably restrains such purchase. Kale, lease, or exchange Is within the terms of the Anti-Trust Act, denouncing as Illegal every cimlrart, combination or (onsplracy "in restraint of tr.i.le or commerce among tho several states." Tie allegation of the complaii:t Is that Ihe exhibitor h.ad been procuring films from some of the distributor- but had refused to buy from others, who tlienupon Induced the former to eease dealing with him, and that nil then coinbitied and conspired. In restraint of Interstate tr.'de and commerce, to jirevenf him troin e.irrying on his said business; that they have ever since refused to funil-h him with film service and have caused unexpired contracts whicb he held with some of them to be Illegally can- celled. It Is dHtlcult to inKi(!ine how Inlir.Ml.ile trade could be more effectively r'stralned than by suppressing it and that, in effect, ao far .IS the exhihltor Is cr.ncerneil. Is what the d!«tributors In combination are charged Willi doing and Intending to do It Is doubtless true that each of the distributor.:, acting sejiaralely, cr.iild have refused to furnish films t» tb# 4>xbtWt<»r wl(l)«ti« »—.««(«(; nntonnMe to th» pr«vt«l"ns «f the act. but here It is alleged Ih.it they combined and con'plred together to prevent hini from le.ising from any of them. Tho illcgalUy consists, not In thj separate action of e.uh. but it. the consjilracy and (omblna- t.on of all to prevent iny of tlicni from dealing with lie exhibitor. See r iiifrif Sliilr.H V. ,'<rlnatlrr\i .Son liif, -."i:; I' .S .\.., 9'.): tinhhs-Merrill Cn v. .Stnii/.», 139 Fed Itip ir,.-, IIM. The contracts with these distributors contemplateii nnd provided tny trai.s.idions In Interstate commerce The business which was (lone uicb-, them- leasinj;. tran-porlalion and de- livery ot films was Inte.ti.itp commerce '1 he alleivd ptir|>o.ie .nnd direct elTe<t of the c,,nihiration and conspirai y was to put an end to these contracts and fuluie l.usiiuss of the s.ime char, icier and •'restrict. In that rei-'ard, llw lil><rl> of a ti.i.ler fo cni;: in business." I.oeire v. T.aiilnr. 208 I' S. 274. '."t;t and, as n n' -ess.iry corollirv. to restrain Inter- Ht.ile trade and commerce In v'eliiion of ih- Anli-Trost Act. The Judyments of liie muit h, :.nv aie lev. r-ed and Ihe case .-omande* ,' • /.■ ' <r ,"•',',■■ ', , I - • , < ■ • Hern-srtl. rVr,!-''.' '^ ' "^''' ,r,Hi;iiei ly, .•|lipi;< In K>ufortslly with this