Case Name: Katharine Corcoran Herne, Individually and as Executrix, etc., of James A. Herne, Deceased, Appellant, v. Theodore A. Liebler and Others, Copartners, Composing the Firm of Liebler & Company, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1902
Citations: 73 A.D. 194
Docket Number: 
Parties: Katharine Corcoran Herne, Individually and as Executrix, etc., of James A. Herne, Deceased, Appellant, v. Theodore A. Liebler and Others, Copartners, Composing the Firm of Liebler & Company, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 73
Pages: 194–200

Head Matter:
Katharine Corcoran Herne, Individually and as Executrix, etc., of James A. Herne, Deceased, Appellant, v. Theodore A. Liebler and Others, Copartners, Composing the Firm of Liebler & Company, Respondents.
Contract for the production of a play — injunction granted limiting its use to first-class theatres by companies organized by the contracting party, and not by stock companies—his remedy in case of its being unprofitable — effect of the death of the author.
' James A. Herne, being the author and owner of the manuscript of a play, entered, into a contract with the firm of Liebler & Co., which recited that Herne was desirous of having the play produced upon the stage and that Liebler & Co. were desirous of producing the said play in the manner and for the period stated, and that the parties were prepared to enter into an agreement, “which shall be limited, however, exclusively to matters in connection with the production. management and exhibition of said play on the terms and conditions hereinafter stated.” The contract then granted to Liebler & Co. the exclusive right to produce the play in the United States and Canada for a period of four years, commencing October 1,1899, and ending September 30, 1903, and it was agreed that during the said period the play should not be published, or in any manner dedicated to the public, but should remain in manuscript form and be used only for the stage production by Liebler & Co.
The contract provided that the defendant should give the first production of the play as soon as possible after October 1, 1899, and produce the play continuously during the regular theatrical seasons throughout the period of the contract; that the cost of production should be borne by Liebler & Co., and that the play should be produced in none but first-class theatres, and that the selection of actors and actresses for the production of the play was to be subject to the approval of Herne.
The contract further provided that Liebler & Co. might terminate the contract, if they should sustain a loss of §5,000, and that at the expiration or termination of the agreement, for any cause, the manuscript of the play should revert- and belong to Herne.
During the first season Liebler & Co. realized a profit, but during the second season they sustained a loss of §3,559.63. Herne died prior to the opening of the third season. Liebler & Co. produced the play for a portion of the third season, sustaining a loss amounting to §3,854.53. Thereafter, they granted to a firm of play agents the right to lease the play to stock companies, and such firm subsequently closed a contract for the production of the play in a stock theatre.
Herne’s executrix then brought an action against Liebler & Co. to restrain them, from making any contracts for the production of the play in anything but first- class theatres; from producing or permitting the play to be produced in any but first-class theatres; from transferring the manuscript of the play to any person, firm or corporation, or to any stock company for the purpose of production in any theatre whatsoever, or allowing the play to be produced by more than one company at one time or allowing the company to perform under any management other than that of Liebler & Co.
"Upon a motion for an injunction pendente lite made in that action affidavits were submitted tending to show that stock theatres are theatres which support stock companies, which produce the successes of first-class theatres after tlieir drawing powers have been exhausted on the stage of such theatres; that plays of the character of the one in question were invariably produced in first-class theatres for five or six seasons before being produced in stock theatres, and that if the right to produce the play was granted to stock companies it would seriously depreciate its value and that it would be impossible to estimate the damages which would result to the owner therefrom.
Held, that the plaintiff was entitled to an injunction pendente lite;
That the contract only granted to the defendants the right to produce the play by a company organized by themselves and under their control, and that they had no power to license other persons to produce the play or to deliver the manuscript to them for that purpose;
That the fact that the play proved unprofitable did not justify the defendants in using it for a purpose other than that contemplated by the agreement; Quaere, whether the contract was not terminated by the death of Herne.
Appeal by the plaintiff, Katharine Corcoran Herne, individually and as executrix, etc., of James A. Herne, deceased, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 27th day of March, 1902, denying the plaintiff’s motion for an injunction pendente lite restraining the defendants “from making any contracts for the production of the play ‘ Sag Harbor ’ at any but first class theatres, or from producing or permitting to be produced the said play ‘ Sag Harbor’ at any but first class theatres throughout the United States and Canada, or from transferring the said play or manuscript thereof, to any person, firm or corporation, or to any stock company for the purpose of production in any theatre whatsoever, or allowing the said play to be produced by more than one company at one time, or allowing the said company to perform under any management other than that of the defendants.”
William M. Mullen, for the appellant.
A. II Hummel, for the respondents.

Opinion:
Ingraham, J.:
The action is brought to restrain the defendants from violating a contract made between the plaintiff's testator and the defendants, by which the latter were given the exclusive right to produce a play written and owned by the plaintiff's intestate called " Sag Harbor," for a period of four years from the 1st day of October, 1899. The only relief asked for in the complaint is the injunction that the plaintiff claims she is entitled to. The contract dated August J, 1899, recites that " the party of the second part (plaintiff's testator) is the author and sole and absolute owner of the manuscript of the play known as ' Sag Harbor ' which he is desirous of having produced upon the stage," and the parties of the first part (defendants) are desirous of producing the said play in the manner and for the period stated, and tlte parties to the agreement are prepared to enter into an agreement which shall be limited, however, exclusively, to matters in connection with the production, management and exhibition of said play on the terms and conditions stated in the agreement. There was 'then granted to the defendants the exclusive right to produce the said play in the United States and Canada for the period of four years, commencing on the 1st day of October, 1899, and ending on the 30th day of September, 1903, who agreed that during the said period the said play should not be published or in any manner dedicated to the public, but should remain in manuscript form, and be used only for the stage production by the defendants; that they would give the first production of the said play as soon after October first as should be possible, in conformity with the terms of the contract (in any event, before January 1, 1900), and produce the said play continuously during the regular theatrical seasons throughout the period of this contract; the defendants to furnish such money as should be necessary for the production of the play. Tlie selection of actors and actresses for the production of the play were to be subject to the approval of the plaintiff's testator; but performances were to be given only at first class theatres. It was further agreed that at the expiration of the agreement, or its termination for any cause whatsoever, all rights and privileges in and to the said play " Sag Harbor," and the manuscript thereof thereby granted should revert and belong to the plaintiff's testator. It appeared that the parties proceeded under this agreement until the death of the plaintiff's testator which took place on the 2d of June, 1901; that subsequent to his death one of the defendants saw the plaintiff and stated to her that inasmuch as it xvas a question whether the death of the plaintiff's testator ended the contract betxveen them, he asked her to continue under the same terms and conditions as it had theretofore existed, to which the plaintiff consented; that on the 13tli day of January, 1902, the plaintiff received a letter from one of the defendants asking the plaintiff to consent to negotiate for the production of " Sag Harbor" in the Pike Opera House, Cincinnati, O., to which plaintiff refused to consent; that on the 20th of February, 1902, the plaintiff received a letter from one of the defendants which, after stating that the performance of the play by the defendants had not been successful, stated that it xvas his intention to close the season at Kansas City, or prior to its date there, xvhich xvas March sixteenth, and " try and place it satisfactory in stock," and asking the plaintiff to approve this determination, which the plaintiff refused to do. It is alleged by the plaintiff that the xvords " stock theatres " have a well-defined meaning in the theatrical world, meaning theatres supporting stock companies xvhich producé the successes of the first-class theatres after their draxving powers have been exhausted on the stage of such theatres; that if this play is once produced in " stock theatres " the commercial value of the said play will be destroyed. Other affidavits xvere submitted which tend to shoxv that the performance of this play in the " stock theatres " would seriously depreciate its value; that plays of this character xvere invariably produced in first-class theatres for five or six seasons before being produced in stock theatres and the rights therein are granted to stock companies only when the play can no longer command ¡Datronage in first-class houses; that a play named " Shore Acres," xvritten by the plaintiff's testator, was produced for a period of some seven years in the first-class houses and is now proving a great attraction in houses of the second class ; that if the right to exploit "Sag Harbor" is granted to stock companies its commercial value will be practically stopped in a short time and great damage xvill result to the oxvner thereof, damage xvhich is practically irreparable, the amount of xxdiieh it xvas impossible to estimate owing to the fact that the profits in the theatrical business are largely speculative. It further appeared that the defendants had granted to a firm called Darcy & Wolford, play agents, the right to lease this play " Sag Harbor " to stock companies; that this firm had closed a contract for this play with the Pike Opera House, Cincinnati, O., and that the manuscript and parts of the said play had been expressed to the proprietor of this firm, they to pay the royalty of $350 per week.
On behalf of the defendants it appeared that during the first season this play earned a profit of upwards of $28,000, of which the plaintiff's testator received a sum in excess of $12,000, and in addition thereto received $500 per week for each week during which he acted in the play; that during the second season there was a loss of $3,559.63, and that prior to the opening of the third season the plaintiff's testator died; that after the death of the plaintiff's testator the defendants continued the performance down to March first, during which period the loss amounted to $3,854.52; that the defendants thereupon determined that it was to the interest of the plaintiff as well as themselves, in order to recoup their losses so far as they were able during the remainder of the term of their rights to produce the play, to close the tour of their company and secure engagements for the play with stock companies. It is undoubtedly true that if the defendants are allowed to lease this play to theatres having stock companies all over the United States the interest of the plaintiff in the play will be seriously affected as, at the expiration of the contract, if the play is not performed in stock companies, she would then have the right to lease it to these companies and receive the full price paid for the right to produce it.
I do not think that this contract gave to the defendants the right to license this play to be produced in any theatres except where it was produced by a company to be organized by them. The agreement recited that the parties thereto were prepared to enter into an agreement " which shall be limited, however, exclusively to matters in connection with the production, management and exhibition, of said play on the terms and conditions hereinafter stated." The defendants were not granted the right to license others to produce the play, but the right that they had was to produce the play themselves, and the defendants agreed that during that period the said play should not be published, but should remain in manuscript form " and be used only for the stage production by the said parties of the first part." There was nothing in the contract that gave the defendants any right, except to produce the play, and it was to be used only for the stage production by them. It was agreed that the defendants would continue to produce the play continuously during the regular theatrical seasons during the time that the contract was in force. This clearly contemplated a production of the play by the defendants, not by stock companies that they should license to produce it, and the provision that was inserted, by which in the event that the production of the said play should result in a loss amounting to the sum of $5,000, the defendants, by notice to the other party, could terminate the agreement, gave the defendants the option to terminate the agreement if the production of the play should prove unprofitable, but the fact that the play did prove unprofitable did not justify them in using the play for a purpose other than that contemplated by the agreement. Undoubtedly, the parties contemplated that the plaintiff's testator would live during the period that the contract was to run, and there is a question whether the contract was not terminated by the death of the plaintiff's testator. However that might be, it was not contemplated that the defendants should have any right over the play except the exclusive right to produce it themselves. A delivery of this manuscript to other theatres and other actors than those forming a part of the company organized for the production of this play would be a direct violation of the provision by which it was expressly agreed that the play should remain in manuscript and be used only for the stage production by the defendants. The agreement clearly contemplated such a restriction of the use of this play by the defendants. Thus, it was provided that, if it was mutually deemed advisable, the defendants were authorized to form another theatrical company for the production of the play. . Certainly, if the defendants had the right to license other theatres to use this play, and to deliver the manuscript to such other theatres for that purpose, this clause would be entirely meaningless, and the further clause in the agreement, by which the plaintiff's testator was to have the right to supervise the management of the stage, and that the selection of the actors and actresses for the production of the play should be subject to his approval, clearly contemplated but one use to be made of this play during the four years, and that is the production of the play by a company formed by the defendants for that purpose. The defendants have now, as they had at any time during the continuance of the agreement, the right to terminate it when the loss should equal $5,000, but they had no right to use the play in any way, except that contemplated by the agreement; that is, the production of the play by a company or companies organized by themselves and under their control; and it seems to me clear that the licensing of other theatres to produce this play was a direct violation of the plaintiff's rights and would be a serious injury to her interest. The facts are substantially undisputed, the only real dispute being as to the construction-of the contract which was a question for the court, and we disagree with the court below as to the construction to be given to this contract and are of the opinion that the use which the defendants intended to make of this play was in violation of its terms and of the plaintiff's rights, and that the plaintiff was entitled to an injunction.
It follows that the order appealed from should be reversed, with ten dollars costs and disbursements, and the motion to continue the injunction granted, with ten dollars costs.
Patterson, O'Brien, McLaughlin and Hatch, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.