Manners v. Morosco/Dissent Hessin Clarke

Mr. Justice CLARKE dissenting.

The decision of this case involves the construction of the written contract of January 19, 1912, as modified by that of July 20, 1914, and, centering its attention upon the claim of the defendant to moving picture rights the court dismisses in a single paragraph provisions in these contracts which seem to me to so clearly limit the rights of the defendant to a term expiring possibly in May, 1918, but certainly not later than May, 1919, that I cannot concur in the conclusion arrived at by my Associates.

'As to the duration of the defendant's rights we agree with     the Courts below. We see no ground for converting the     defendant's undertaking to continue the play for seventy-five      performances during the season of 1913-1914, and for each season thereafter for five years, into a limit      of the plaintiff's grant of rights. As was said in the     District Court, it is a statement of the least that defendant      was to do, not of the most that he was to have.'

This expression, that the third paragraph of the contract of January 19, 1912, 'is a statement of the least that defendant was to do, not of the most that he was to have,' is repeated in the opinion of each of the three courts as the sufficient reason for concluding, as the District Court said, that the contract gave to the defendant 'all the rights mentioned for all time.' It is not the first time that a catchy phrase has diverted attention from less picturesque realities.

My reasons for concluding that the rights of the defendant were limited, as the court says his obligations were limited, to a term expiring not later than the close of the theatrical season of 1918-1919, may be briefly stated.

The grant which it is concluded gave the defendant the exclusive license and liberty to 'produce, perform and represent' the play involved 'for all time' is in these words:

'First. The party of the first part hereby grants * *  * to      the party of the second part, subject to the terms,      conditions and limitations hereinafter expressed, the sole      and exclusive license and liberty to produce, perform and      represent the said play in the United States' and Canada.

In terms this is a 'license,' and in terms also it is subject to 'conditions and limitations' to follow in the contract, which are found in the third and fifth paragraphs.

'The party of the second part [defendant] agrees to produce     the play not later than January 1st, 1913, and to continue      said play for at least seventy-five performances during the season 1913-1914 and for each theatrical season      thereafter for a period of five years.'

The fifth paragraph provides that if the defendant shall fail to produce the play seventy-five times in any one theatrical year

'then all rights of the said party of the second part [the     defendant] shall cease and determine and shall immediately      revert to the said party of the first part.'

This third paragraph expresses the agreement of the parties as to what the defendant was to do in consideration of the grant by the plaintiff in the first paragraph, and reading it and the fifth paragraph together, as one, we have the extreme extent and time limit of the defendant's obligation and the penalty forfeiture, is provided for the failure to perform at any time within that limit. The court says that the third paragraph expresses 'the least (all) that the defendant was to do,' so that his obligation under the contract ended with the fv e-year period, which obviously would be not later than the close of the theatrical season of 1918-1919. This being true, when did the reciprocal obligation of the plaintiff expire?

That the obligation of the plaintiff continued 'for all time' is apparently derived wholly from the inference, as stated by the District Court, that the parties, if they had intended otherwise, 'could readily have fixed a time limit in the first paragraph by the addition of words such as 'for ____ years from' or 'until' a stated date.'

It is very true that the parties could have written their contract in a different form, and certainly with much more precision of statement, than that in which they did write it, but it is also true that in making it in their own way and terms they granted a general license in the first paragraph, but made it subject to the 'terms, conditions and limitations' thereinafter to be expressed, and that they then went forward and expressed in the third paragraph the five-year limitation as we have seen it. The court holds that this five-year limitation applies to the defendant's obligation to perform but that it does not apply to the plaintiff's license to produce. I think it applies to both. Plainly the parties were undertaking to set down in their contract the mutual obligations which each intended to assume-those of the one in consideration of those of the other. The author granted the privilege of producing the play and the defendant agreed to produce it for at least 75 performances during each of five years. After that, the court concludes, the defendant was no longer bound by the contract to do anything which could advantage the plaintiff and therefore, clearly, the plaintiff should not continue thereafter under obligation to the defendant, unless the intention to be so bound is unmistakably expressed in his contract. The 'natural and normal' inference is that when the obligation of one party to such a contract as we have here is ended it was the intention that the obligation of the other party should end also.

The inference that the license to produce continued after the obligation to produce expired, in my judgment, can be sustained only by neglecting the specific provision of the first paragraph, that the license granted is subject to the limitations which should follow, and which did follow in the third paragraph. It involves imposing, by judicial construction, heavy and unusual burdens upon the author of a successful dramatic composition in the interest of a commercial producer-a result which courts should not strain themselves to accomplish.

A penalty of forfeiture being provided for failure of the defendant to perform at any time, I cannot see any substantial reason for inserting the five-year limitation except to fix a limit for the expiration of all rights of both parties and this, it seems to me, was its only function.

The provision in the first contract that if the play should fail 'in New York and on the road,' and in the second that if the net profits for 'one theatrical season' should be less than $2,000, the play should be 'released for stock' and the royalties divided equally between the parties, would have ample scope for the application within the five-year period and therefore cannot properly be made the basis for the implied continuance of the license beyond that term.

For the reasons thus briefly stated, I think that the parties expressed with sufficient clearness their intention that their mutual relations should all terminate with the expiration of the five-year period, and therefore I dissent from the opinion of the court.

Mr. Justice PITNEY concurs in this opinion.