James L. Kernan Co. v. Wilson Amusement Co.

Bond, C. J., delivered the opinion of the Court. In the first of these cases, a licensee of the right to exhibit a copyrighted moving picture appeals from a preliminary injunction against the exhibition, issued at the instance of the owner of another theatre claiming an exclusive right or option to exhibit under an earlier contract with the distributor of the picture, under the authority of the producer and owner of the copyright. The second appeal is from an order refusing a petition of the defendant to cancel a bond previously required of it as a condition to the superseding of the injunction. The injunction was issued upon the bill of complaint and exhibits.

The complainant’s contract, made on September 23rd, 1929, for the ensuing theatrical season, is on a printed form, with a special typewritten section added, and contains the following relevant stipulation: Thirty projected pictures, fifteen of which the exhibitor may reject, are specified as the first subject of the contract. Twelve are specified by the names of the plays, and eighteen by the names of the prin ⁹ cipal performers, or stars, five of the eighteen by the names of two stars combined in their production, and thirteen by the names of single stars. The list contains: “2 La Plantes”; “2 John Boles”; and, on the other hand, “3 Tryon-Kennedy” and “2 Lewis-Kent.” There is in the contract a reservation to the distributor or owner of a right to withdraw any two plays from the contract and license, to be exhibited as what are called “road shows.” But except for that reservation, the complainant is given, in any of the plays which it might accept, the exclusive right arising from an agreement of the owner or distributor “not to exhibit or license the exhibition of any such photoplays in conflict with the ‘run’ or ‘protection period,’ ” provided for. The special typewritten section provides the rates of compensation or royalties, all of which are percentages of receipts of the theatre from exhibition; and the percentages differ with three groups of the 'listed pictures.

Eor a picture named “Broadway,” the distributor is to receive “35 per cent, of gross to the time the house breaks even, exhibitor then to receive a profit equivalent to one-half the film rental to that point and then distributor and exhibitor to share fifty-fifty”; and this is coupled with a stipulation that if gross receipts in the first three days of exhibition amount to $4,500, there shall be a second week’s showing of the picture at the same theatre, for which the distributor is to receive “20 per cent, to 5,000, 25 per cent, from 5,000 to 7,500, and 50/50 over 7,500.” For the next six of the named plays on the list, grouped as Laemmle Specials, the distributor is to receive “25 per cent, to 9,000 and then to share 50/50 in excess of that amount.” And for any of the remaining twenty-three pictures, called the Star Series, the distributor is to receive “20 per cent, to 4,000, 25 per cent, from 4,000 to 6,500, 30 per cent, from 6,500 to 9,000, and then to share 50/50 in excess of that amount.” After having specified these rates, the typewritten section concludes with these clauses: “Exhibitor is to select or reject pictures within seven weeks after screening. ¹⁰ “Exhibitor is to- have option on any additional pictures that Universal schedule to release during the 1929-30 season. “All pictures listed hereon are to be exhibited on a six day engagement.” The clauses respecting “road shows,” in the printed form, reserve to the distributor the right to exhibit or cause to be exhibited as road shows, at any time prior to éxhibition under the contract, such of the photoplays licensed under the contract (not exceeding two- in Baltimore City) as the distributor might from time to time select and determine. And the photoplays so “roadshown” are forthwith excepted and excluded from the license under the contract; and for each play'so- excluded the exhibitor, on its side, is to have an option to- except and exclude one of the licensed plays from its contract. While the contract so outlined was in existence, the distributor made a contract with the defendant, now appellant, giving it a license to produce at the Auditorium Treatre in Baltimore, beginning on April dth, 1930, a play named “The Captain of the Guard,” in which John Boles and Laura La Plante were the stars. .The complainant, seeing the advertisement of the production, protested to- the distributor, and the- distributor replied that the license to the Auditorium Theatre had been granted only after the play had been rejected by the complainant itself. The complainant denied that it had rejected.the- play.

And upon the facts so far recited, appearing in the- bill of complaint and exhibits) filed on the day fixed for production of the play at the Auditorium Theatre,-—and, it is to- be presumed, after the defendant had made preparations and commitments—-the court, on the same day, issued the preliminary injunction no-w attacked. Later on the same day the defendant filed its answer and demurrer, and entered an appeal from the order for the issue of the injunction. The bond for superseding the injunction was then fixed, and was given, and the injunction was superseded. On May 6th, 1930, the defendant, now appellant, ¹¹ filed a petition praying that its supersedeas bond might be cancelled because the injunction had been issued upon contentions since abandoned by the complainant.

It is from an order denying this petition that the second appeal is, taken. The bill of complaint proceeded upon the assumption that as John Boles appeared as a star in “The Captain of the Guard,” the play came within the specification of “2 John Boles” pictures. The defendant and appellant argues that as Laura La Plante also