Court Opinion

ID: 5210695
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:12:01.560215+00
Date Added: 2024-06-11T08:27:21.950398
License: Public Domain

Spring, J. (concurring):
I agree with my associates that the judgment in this cáse should be reversed, but do not assent to the grounds upon which the decision is to be based.
. The Court Street Theatre, located in the city of Buffalo, had been *437in operation since 1895. It has been managed by one Wegefarth, and the stock of the company was owmed by him and his wife. The Wegefarths also carried on a theatre in Baltimore and one in the city of Washington. In September, 1901, the Wegefarths sold all their stock in the Court Street Theatre Corporation to Alphonse J. Meyer. There were booked and contracts made for the .season of 190-1-2 about twenty burlesque companies, each to run for one week, and several for a return trip of a week during the season.
The .Empire Circuit Company was engaged in booking burlesque companies for eight or nine theatres which were upon its list and also for some others not within its wheel or circuit. It was an important combination directly or indirectly regulating the burlesque shows in many cities. Any burlesque company was largely curtailed in its list of performances unless booked to some extent by the Empire Circuit Company.
The defendants Kernan and Rife were directors of this company and were prominent in the management of its affairs. Kernan owned a vaudeville theatre in Washington, one in Baltimore, and he and Rife the Lafayette Theatre, one of like class, in the city of Buffalo. The Wegefarth theatres in the first two cities and the Court Street Theatre in Buffalo were active competitors of the three named under the management of Kernan and Rife.
■ In the fall of 1901 the defendants induced each of the companies listed for exhibition at the Court Street Theatre during the ensuing season to cancel their respective contracts. The result of: this action was to deprive the Court Street Theatre Company of these advertised shows, and the Empire Circuit Company so extensively controlled the companies of this class that satisfactory substitutions could not be made, and the business was conducted at a loss and a receivership soon followed. This action was commenced charging the defendants with conspiring to destroy the business of the Court Street Theatre Company and that the cancellation of these contracts was wantonly and maliciously accomplished by. the defendants with the unlawful purpose to destroy or break the Court Street Theatre Company.
I think the jury were justified in finding that the charges contained in the complaint were sustained by the evidence.
A meeting was held in Pittsburg, Penn., in November, 1901, consisting chiefly of those operating theatres within the wheel or *438circuit of the defendant company with others who obtained some attractions through it. Meyer attended this gathering and learned of the cancellation of the contracts affecting his business. He remonstrated with Rife and Kernan, who were present representing the defendant company, and was advised that they proposed to break or destroy the Court Street Theatre Company and that there would be no burlesque entertainments for it after December ninth. The reason assigned for this position was that the Wegefartks had opened theatres in Baltimore and Washington. Meyer insisted that he was not responsible for Wegefartli’s conduct, but the excuse was not accepted. These defendants repeatedly stated that they intended to destroy the Court Street Theatre Company. They went at this scheme in a systematic manner. They wrote letters to the various burlesque companies and distributed circulars among all those likely to play at the Court Street Theatre to the effect that if these companies expected to be booked by the Empire Circuit Company they must not show at the Court Street Theatre. This threat was made persistently, and the jury was justified in finding that the companies were coerced into breaking, these contracts. The burlesque shows could not withstand the demands of the dominating combination in the vaudeville theatre business. For instance, the burlesque show of Rice & Barton was playing in Pittsburg when the [November meeting called by the defendants was in progress in that city and one of their managers was summoned, before the meeting. The defendant Rife, as he testified, “ wanted to know if I would cancel the Court Street Theatre in Buffalo, and I told him I thought it would bring on litigation and so forth, and they said, ‘We will take care of that. Will you do it ? ’ I said, ‘ I will have to do what you gentlemen say or I won’t have no show.’ ” The Rice & Barton Company was booked with the Court Street Theatre Company for the week of February 10, 1901. This company Was not provided for by the defendants for that week. It secured its own places of entertainments and it was not on the Empire circuit until the following season, and that was true of other companies whose contracts were canceled. The object of the [November meeting was not to arrange for the pending season. The companies had booked for that season long before. The plan was to arrange for the season of 1902-3. The companies which had agreed to play in the Court *439Street Theatre for 1901-2 and whose contracts were canceled made engagements with other theatre companies not under the control of the defendants. Those engagements for the season of 1901—2 were not canceled. The cancellation was limited to the Court Street Theatre.
The jury may have found that the termination of these contracts was not for the purpose of enabling the defendants the better to carry on their business. The booking of the Lafayette Company was completed in August, 1901, before the cancellation of any of these contracts with the Court Street Company. Of the twenty companies under contract with the Court Street Theatre Company only five played in the Lafayette Theatre during the season. Nor were these burlesque attractions forbidden to play for other companies outside of the pale of the Empire Circuit Company. The prohibition was confined to the Court Street Theatre Company.
Undoubtedly the Empire Circuit Company in order to develop its business had the right to insist that no company which played in the competing theatre would be included in its list. If that policy resulted to the injury or even the ruin of the Court Street Theatre Company no cause of action would lie against the defendants. Legitimate competition often brings disaster to one or both of the rivals. The court in his charge made the distinction plain to the jury. He distinctly stated that no recovery could be had unless they found that the defendants wantonly, unlawfully and with express malice to the Court Street Theatre Company induced the cancellation of these contracts. He said : “ So that in the conclusion of this case you have these particular questions to determine. If yon believe the purpose of the defendants was to injure the plain tiff in his business, without any design or intention to legitimately advance their own interest, then it is actionable and the plaintiff in this action may recover. If you believe that the defendants maliciously procured the breach of the contracts for the purpose of destroying the plaintiff’s business and in injuring him, then the plaintiff is entitled to recover. If you believe that the defendants wrongfully procured and induced the parties who were booked at plaintiff’s theatre, to break their contracts and refuse to play there, then the plaintiff can recover. If you believe that the arrangement between the Empire Circuit Company and the Traveling Managers *440Association was not- to protect themselves against legitimate competition but malicious interference intended to damage the plaintiff, then the plaintiff may recover. If yon believe, however, from all the testimony of the defendants that they did not cause or induce the Traveling Managers Association to break their contracts with the Court Street Theatre, then the plaintiff cannot recover and your verdict must be one of no cause of action.”
At the request of the defendants’ counsel the court further charged as follows: “ It is the law that either corporation has the right to enjoy the fruits and advantages of its own enterprise and credit and it lias no right to be protected against competition, but has the right to be free from malice and wanton interference, disturbance and annoyance; if disturbance or loss comes as a result of competition or the exercise of like rights by others it is a damage without legal remedy.”
It must be kept in mind that the action is conspiracy, the essence of which is to accomplish an unlawful purpose or a lawful purpose by wrongful means. The element of fraud is an ingredient of the cause of action. We must assume, therefore, that the defendants,, for the purpose of ruining the Court Street Theatre Company, induced the cancellation of these agreements by threats and coercion. In view of the verdict they were not engaged in lawful competition. They were not seeking to terminate these contracts for their own business advantage. The primary purpose was the extinction of the Court Street Theatre Company. They did not take over all the companies whose connection with the Court Street Theatre they required to be severed — not until after the full life of the contracts had -expired were they put on the list of the appellant company.
The leading case relied upon by the appellants is Ashley v. Dixon (48 N. Y. 430). One Patrick agreed in writing to sell land to one McEachron. McEachron agreed to sell to the defendant. Subsequently the defendant offered a larger price to Patrick, who was induced thereby not to perform his agreement with McEachron and convey to the defendant. McEacliron’s executors sued the defendant, charging conspiracy, and recovered. The court held that the judgment could not be sustained “ because there was not sufficient proof of such a conspiracy, and the motion to nonsuit the plaintiffs *441should have been granted. There was no evidence which would warrant the jury to find that Patrick absented himself from home, or refused to perform his contract with McEachron, at the instigation of the defendant.” This statement might have ended all discussion, for nothing else was necessary. The court added, however, that merely inducing Patrick to break his contract would not make the defendant liable in damages. Fraud or misrepresentation must be shown. There was an entire absence of proof showing any fraudulent misconduct. Patrick was not threatened or coerced into selling his land to the defendant. Fie received a better price, I assume, than McEachron agreed to pay, and the defendant purchased cheaper than he was under contract to pay McEachron.
In the present case the jury have found, on evidence warranting it, that the defendants wrongfully and fraudulently induced the cancellation of the contracts. The facts in the two cases are radically different. I have not been able to find any authority for the proposition that where men by concerted action maliciously destroy the business of another they are not liable in damages to him. Men may combine to do a lawful act, they may possibly enter into-a conspiracy to do such an act, and its consummation may not be attended by any legal liability in damages to the person injured. I do not, however, understand that they may form a conspiracy with the avowed purpose of destroying the business of another, and carry out that scheme, and escape liability for -the injuries which they have unlawfully accomplished. As I view it, that would not be a lawful act. If the combination is for an innocent purpose, I assume it cannot be diverted from its legitimate channels for the distinct purpose of ruining another’s business and be immune from liability. Competition is one thing; a scheme systematically developed to injure one’s business is quite another. Freedom of contract is one of the inviolable rights maintained by the courts to the fullest degree compatible with public policy. Malicious at-tenqits leading to the violation of contracts to the injury of the parties to them are illegal and will not be tolerated. (Beattie v. Callanan, 82 App. Div. 7; Curran v. Galen, 152 N. Y. 33; Jacobs v. Cohen, 183 id. 211; Rice v. Manley, 66 id. 82.)
It is not claimed that the Empire Circuit Company was organized for the purpose of destroying the Court Street Theatre Company as. *442a rival in the burlesque show business. It was organized and carried on generally for legitimate purposes. The claim is that its managers did maliciously single out the Court Street Theatre Company as the point of attack in order to destroy it. No such warfare was carried on against other companies. Burlesque companies booking with the Empire Company were not required to pass- by the other theatres not on the list of that company. The ban was against the Court Street Theatre alone. Mr. Swope testified as follows on this subject: “ I did not play the engagement at the Court Street Theatre that my contract called for. I never played at the Court Street Theatre after the Pittsburg meeting. Our Company became a •member of the Empire Circuit wheel for the season of 1902 and 1903, and played in that wheel under the Empire Circuit bookings. We did not cancel any other contracts that existed with any other theatres for the. season of 1901 and 1902. That is all we were asked to cancel. The others were carried out, I think.” Nor was it necessary to make this complete prohibition to secure business. There were forty-one of these companies, and they could exhibit in the aggregate- over 1,600 weeks in a year if each company was limited to forty weeks. At most, the Empire Circuit Company managed ten theatres, which meant 400 weeks of entertainments in the year, and with their listing companies not one-half the time of all these burlesque companies could be taken up.
It is also to be observed that when the scheme for the destruction of the Court Street Theatre ripened into a systematic conspiracy all the bookings for that season had been made by both of these companies ; and yet every company listed by the Court Street Company was coerced into canceling its engagement.
The finding of the jury here is that the purpose of these defendants was not to enhance their business, but deliberately and wantonly, and with malicious design, to ruin the Court Street Theatre. I think the plaintiff established the cause of action alleged in the complaint.
I am, however, in favor of a new trial, as it seems to me the damages awarded are largely disproportionate to the injuries sustained. Meyer paid for the $44,000 of par value stock $12,500. He purchased in September, 1901, and in six months the company was insolvent. He did not own the theatre building, simply holding it *443by lease. There were eighteen or twenty burlesque companies whose engagements with the Court Street Theatre Company may have been canceled at the instigation of the defendants. The verdict was for $66,750, and it is not probable, even with the most favorable view of the business, that it could have been so profitable as the verdict indicates.
I think the damages are grossly excessive, and for that reason I vote for a new trial.
Judgment and order reversed and new trial ordered, with costs to appellants to abide event.