Davis v. Epoch Producing Corp.

Plaintiff sues for the specific performance of an alleged contract for certain motion picture rights, and has obtained an order restraining, the defendants from disposing of the exhibition or producing rights to the film known as “The Birth of a Nation” in 17 states. This is a motion to have the injunction continued pendente lite, which would, in effect, amount to- compelling the specific performance sought in the final judgment. Plaintiff is a theatrical manager residing at) San Francisco, Cal. He there met David W. Griffith, vice president of the defendant Epoch Producing Corporation, on June 24, 1915, and, to use his own language—

“discussed with him the purchase of the exhibition rights of the said film (The Birth of a Nation). We discussed the territory in which I desired to secure such exhibition rights, the price that I was to pay therefor, and the number of prints of said moving picture film which I was to receive as an incident to said contract, and as to the means of exercising such exhibition rights.”

As a result of the discussion, Griffith sent two telegrams, which are substantially the same, one to- H. E. Aitlcen, president of the defendant corporation, the other to the treasurer. Plaintiff bases his claim upon these telegrams, which are as follows:

“June 24, 1915.

“H. E. Aitken, Masonic Temple Building, 23d & Sixth Ave., New York, N. Y.: George H. Davis, an associate of Belasco at Alcazar Theater, oilers ninety thousand dollars for the states of Oregon, Nevada, Arizona, Utah, Idaho, Montana, Washington, Wyoming, Colorado, New Mexico, Kansas, Nebraska, Iowa, North Dakota, South Dakota, Minnesota. This includes Washington after the present engagement of eight weeks, for which you have already received payment, are through. This also includes ten prints of the picture: Twenty thousand dollars upon signing the contracts, balance

within thirty days. Davis is experienced and capable man. If these terms are acceptable, he will come to New York immediately to make final arrangements. This is outright sale, and company has no share in profits.

If Brennan has not closed, wire me answer Alexandra Hotel Los Angeles.

“D. W. Griffith.”

“June 25, 1915.

“George H. Davis, Alcazar Theater, San Francisco, Calif.: Offer to Griffith accepted for Oregon, Nevada, Arizona, Utah, Idaho, North Dakota, South Dakota, Minnesota, Iowa, Montana, Washington, Wyoming, Colorado, New Mexico, Kansas, Nebraska, excluding eight weeks’ present engagement in Washington; includes ten prints, terms twenty thousand cash, seventy thousand thirty days. Wire when you expect to arrive in New York.

“Epoch Producing Corporation.

“Longacre Building.”

Plaintiff telegraphed, in reply:

“Will leave next Wednesday for New York, bringing required cash with me.

Will require four or five days at theater here to arrange matters so I can remain away length of time needed to consummate deal. Will see you immediately upon arrival. Geo. H. Davis.”

When plaintiff arrived in New York he found that the defendant corporation had, regardless of its acceptance of his offer, disposed of the purchasing rights of the film for the city of Portland, Or. Plaintiff was willing and anxious, nevertheless, to obtain a contract for the balance of the territory covered by the telegrams, but demanded an abatement in price because Portland was excluded. Although the defendant corporation had secured $8,000 for Portland, it flatly refused to abate the price. Plaintiff tendered his cash payment of $20,-000, which was refused, and then commenced this action.

[1 ] That plaintiff has been unfairly dealt with and that the equities are strongly in his favor is beyond doubt, and, if the law permitted, an injunction should issue. The matter must be determined, however, upon settled legal principles, in which sympathy for the party unfairly dealt with and reprobation for the course pursued by the defendant corporation have no part. In order to justify requiring specific performance of a contract, there must be no doubt as to the existence of the contract; it must have been concluded, and not in the process of negotiation, and none of the terms must be left to be settled by future negotiations. If it is doubtful whether an agreement has been concluded, specific performance will not be granted. Mayer v. McCreery, 119 N. Y. 434 , 23 N. E. 1045 ; Brown v. N. Y. C. R. R. Co,, 44 N. Y. 79 ; Petze v. Morse Dry Dock & Repair Co., 125 App. Div. 267 , 109 N. Y. Supp, 328 , affirmed without opinion 195 N. Y. 584 , 89 N. E. 1110 . Neither will a court of equity specifically enforce a contract unless its terms, covenants, and conditions are obviously complete, certain, well-defined, and unambiguous. Racich Asbestos Mfg. Co. v. Brooks, 146 App. Div. 14 , 130 N. Y. Supp. 382 ; Dalzell v. Dueber Watch Case Mfg. Co., 149 U. S. 315 , 13 Sup. Ct. 886 , 37 L. Ed. 749 ; Buckmaster v. Thompson, 36 N. Y. 558 ; Stanton v. Miller, 58 N. Y. 192 ; Shakespeare v. Markham, 72 N. Y. 400 .

[2] Moreover, an injunction which finally decides the litigation will not be granted where the right thereto is doubtful, and should only

“Will require four or five days at theater here to arrange matters so I can remain away length of time needed to consummate deal.”

In the telegram dated June 24, 1915, that Griffith sent at plaintiff’s request, it was said:

“If these terms are acceptable, he will come to New York immediately to make final arrangements.”

What was it that made it necessary for the plaintiff to come all the way across the continent, if the telegrams constituted a contract ? Certainly not to make the first payment, for a certified check sent by mail would have answered this purpose. Not to obtain the prints, for they were not ready, and, when ready, could be sent by express. The real reason is to' be found in plaintiff’s own telegram, namely, that he was coming to New York and going to remain the “length of time needed to consummate deal.”

A court cannot specifically enforce an unconsummated deal. This is not a case of buying horses, or grain, or securities, where all that is necessary is to agree on price, quantity, and delivery. The subject of this negotiation was not even stated in the telegrams, but it is conceded that it consisted of the “rights” to the motion picture film “The Birth of a Nation” for the states specified. What are these “rights”? The telegrams do not show, neither do the moving papers. There is no well-defined meaning attached to the words “producing rights,” or “state rights,” of a motion picture, that a court can take notice of. On the other hand, the defendant’s affidavits show that there are three ways of marketing a motion picture of this character: (1) The negative can be sold to some corporation, which will in turn arrange for the marketing of the film; or' (2) the owner of the negative can directly arrange for the exhibition of the pictures in theaters; or (3) the exhibition of the picture can be procured by the sale of territorial rights—that is to say, of the right to exhibit the picture in certain specified territory. It is further shown that "state rights” may merely permit the exhibition by the person acquiring the same of the picture in a particular territory, or they may generally authorize the person acquiring the same to deal with the picture as owner. It is further shown that there is no accepted form of contract for the acquisition or granting of “state rights,” and that there are no terms which are identical in all such contracts; that every such contract faces

Prior to the institution of this suit it is shown, without contradiction, none of these matters had been discussed between the parties, matters which were vital to both parties, and which doubtless afford a true explanation of plaintiff’s estimate of the length of time that it would require to “consummate the deal.” Any one who has ever drawn a license agreement for the production of motion pictures, or for the publication of a copyrighted book or the production of a play, must realize that, when the parties have merely reached an agreement as to price and territory, they are still miles apart on innumerable vital stipulations and covenants, failure to agree upon any one of which ends the negotiation. I am reluctantly brought to the conclusion that there was here no binding contract, because vitally important matters necessarily connected with it on account of the very nature of the subject-matter of the contract were all left open to future agreement. Not only are the terms set forth in the telegrams incomplete, but they are indefinite and uncertain. Does the plaintiff become the owner'of the prints free from any restriction ? Can he sell and dispose of them as he sees fit? If they are destroyed, upon whom does the loss fall? Can the plaintiff reproduce the prints and sell them indiscriminately ? These are some questions which the telegrams leave open and undecided, the importance of which is obvious. If the telegrams constitute a contract, then important and necessary terms are left undefined and ambiguous. As Mr. Justice Miller said in Racich Asbestos Co. v. Brooks, 146 App. Div. 14 , 130 N. Y. Supp. 382 :

“It is an elementary rule that a court of equity will not enjoin specific performance of an agreement unless it is definite and certain in its terms.”

Furthermore, a contract which cannot be specifically enforced against one party will not be specifically enforced against the other. Wadick v. Mace, 191 N. Y. 1 , 83 N. E. 571 . It is to be observed that the plaintiff has signed nothing whatever except the telegram announcing his intention of coming to New York to- consummate the deal. Assuming, however, that he actually made the offer which one officer of the defendant corporation communicated to another, plaintiff has bound himself to nothing except to pay a stipulated sum of money. If the telegrams constitute a complete contract, the defendant corporation has no protection at all against plaintiff taking the prints which he receives into any other territory and interfering with defendant itself, or with other customers of defendant. Plaintiff has bound himself to none of the stipulations that are usual and customary in such contracts. For lack of mutuality of the remedy, therefore, the motion would have to be denied.

[3, 4] Finally, even if there were a contract between the parties, it could not be specifically enforced, because the defendant corporation has already disposed of the Portland rights, which were part of the subject-matter of the alleged contract. It is, of course, apparent that an injunction would be tantamount to a decree for specific performance, where the injunction would affect the rights of producing this picture of great vogue in as many as 17 states. Equity will not decree specific performance where, because of then existing facts, the decree cannot be complied with. Pomeroy, Spec. Perf. Contr. (2d Ed.) §§ 292, 293; Beattie v. Burt, 122 App. Div. 473 , 107 N. Y. Supp. 153 ; Rosenberg v. Haggerty, 189 N. Y. 481 , 82 N. E. 503 ; Kennedy v. Hazelton, 128 U. S. 667 , 9 Sup. Ct. 202 , 32 L. Ed. 576 .

76For these reasons the motion for an injunction pendente lite must be denied, and the temporary injunction dissolved, but without costs.

Ordered accordingly.