Daly v. Stetson — 10 N.Y. St. Rep. 453

Majority

p. 453

Augustus Daly, Resp’t, v. John Stetson, App’lt.

(New York Superior Court, General Term,

Filed February 14, 1887.)

Headnote

1. Contract—Construction—Bight to perform plats.

One Neuendorf!: made a contract with a certain dramatic writer named L’Arronge, by which said writer assigned to him all plays, etc., composed or arranged by said writer, and which after the date of said contract would be written by him, and Neuendorff was authorized to act as Hie sole proprietor of the same. Afterward the said Neuendorff, in an agreement with the plaintiff, in which he recited that he was an agent of Arronge for the production, sale, etc., of his unprinted and unpublished plays, etc., agreed to deliver to the plaintiff any new and unpublished play of Arronge of which he may become the agent, and to assign to the plaintiff the sole right to perform, etc., such play; and the plaintiff

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■ agreed to pay him as a royalty a sum equal to five per cent of Ms gross receipts. After the making of said contracts, L’Arrouge composed and sent to Neuendorff a certain play which by his order Neuendorff gave to one Wallack, the manager of a theatre, for examination, etc Neuendorff informed plaintiff that he had done so pursuant to LArronge’s directions, Wallack having rejected said play returned it to Neuendorff, who then handed it over to the plaintiff. But while Wallack had the play plaintiff began negotiations with L Arrange. Before these negotiations ripened, as they finally did, into an agreement, by which 1/Arrange gave to plaintiff the right to perform the play, Neuendorff had handed plaintiff the copy returned by Wallack. Plaintiff produced the play, with large gross receipts, and paid L’Arrange a percentage under his agreement with him. Held, that the contract between Neuendorff and L’Arrange did not assign or grant said play by the execution thereof. That no title in it or interest in it could pass before it came into existence. That it was an executory agreement merely, that would give an equitable title to the play when completed by the author. That if the parties please they might refrain from specific performance and might vary or depart from the contract, I hat the equitable vendee might refuse to take title, and if he did so he could not set up a title.

2. Same—When third party bound by.

Held, that Neuendorff never became the owner of said play, and that the plaintiff was not hound to look upon him as the owner, and would not have been even if he were not ignorant of the agreement between Neuendorff and L’Arrange.

3. Same—When agent had an interest under.

By the aforesaid agreement between Neuendorff and L’Arrange, it was provided that “all other moneys which Mr. Neuendorff will receive by disposing of his property right to these plays to other theatres in the United States, are to be divided equally between Mr. Neuendorff and Mr. LArrange.” Held, that this part of said agreement referred only to money actually and competently collected by Neuendorff under his agreement with LArrange. That the money for said play was to be paid by the plaintiff directly to LArrange, and that in this, Neuendorff had no interest.

4. Same—When two contracts consistent.

Held, that the contract made by the plaintiff with UArrange was not inconsistent with the agreement made prior thereto with Neuendorff.

5. Same—When assignable.

The same Neuendorff was given, by smother author, “ the right and power, etc., to affix and determine the compensation and royalties, and to collect them for said author. Held, there was a personal confidence reposed in the agent, and a trust as to the collection, etc., of the money. That there could he no assignment of the right to collect.

Appeal by defendant from judgment entered upon verdict of jury.

A. J. Dittenhoefer, for app’lt; Stephen H. Olin, for resp’t.

The action was for damages for the breach of a written contract for the payment of money.

The answer did not make an issue of fact with the complaint, and there was no demurrer. The plaintiff was entitled to a judgment of course. As there was no issue, there was no trial of plaintiff’s claim, and the defendant was not entitled to make an objection as to the sufficiency

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of the complaint, which can be made properly only upon demurrer or upon trial. It is not necessary to go into the merits of the objection that was made farther than to say that the objection was incorrect in assuming that upon any construction of the agreement, payment by the defendant was to depend upon more than one performance being given by defendant. The defendant was to pay $200 each week for thirty weeks, and to commence to pay on the first Saturday “after said performance begins.” One performance would fix the beginning of the payments. After that the weekly payments were to continue without interruption. The complaint was sufficient in stating the defendant had begun the payments.

The other questions in the case relate to counter-claims by defendant.

The first counter-claim was made by the defendant as assignee of Schwartz, who was assignee of Hyatt, who was assignee of Neuendorff, of such rights as Neuendorff possessed under a written document made by him and the plaintiff, and another document made by Neuendorff and L’Arronge.

On June 15, 1878, Neuendorff made a written contract with L’Arronge, a dramatic writer. L’Arronge, among other things, assigns to Neuendorff “exclusively all property rights on all these plays,” namely: “all plays, dramas and comedies composed or arranged by Mr. A. L’Arrouge, and which from to-day forth will be written by Mr. A. L’Arronge” “for the United States of America, so that Mr. Neuendorff exclusively has the right to give to other stages in North America, German as well as English, the permission to perform said plays, to fix and determine the royalties for the same, and collect such royalties from the other managers, and furthermore to have the plays translated and adapted; in short, that Mr. Neuendorff is authorized to act as the sole proprietor of the same.”

As a ground of reversing the judgment below, the counsel for appellant makes the proposition that, by the terms of this contract, Neuendorff became the owner of the plays referred to, and, in particular, of one named in English “ Dollars and Sense.”

The learned judge below held, for the purposes of the trial, that Neuendorff was, in fact, the owner, but took the verdict of the jury as to the effect upon Neuendorff, of an agreement in writing that he made with the plaintiff.

That agreement was made December 27, 1881. If recited that “said Neuendorff is the agent of Adolph L’Arronge and several other dramatic authors residing on the continent of Europe for the production, sale and licensing the performances and translations of their unprinted and nn

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published plays and dramas throughout the United States,” and that the said Daly is a manager, and witnessed “that in consideration of one dollar, paid to said Neuendorf! individually, and of one dollar to him paid as agent of each of the above named persons and of other good and valuable considerations, the said Neuendorff agrees for himself and also as agent of the above named authors, to deliver to the said Daly a copy of every unpublished or unprinted play or dramatic composition written by said above named persons or either of them, or of any new and unpublished play of any other German author, of which said Neuendorf! may become the agent, and to give, assign and grant to said Daly the sole and exclusive right of making adaptations of such plays in English, of performing or causing and permitting to be performed such English adaptations throughout the United States, and the said Daly agrees to pay to said Neuendorff, as such agent as aforesaid, for every performance in the city of New York of either of such plays a royalty or sum equal to five .per cent of his gross receipts of such performances under his license, etc., and in the event of the failure of Daly to fully pay the royalty it is agreed that said Neuendorff, as agent for said authors and plays, shall have the right to stop and enjoin such performformances by Daly.”

After these agreements were made L’Arronge composed and sent to Neuendorff the play “Dollars and Sense.” Neuendorff, by the order of L’Arronge, first gave it to Wallack, a manager of a theatre, for examination and approval or rejection. L’Arronge had instructed Neuendorff not to deliver the play to Daly, because Daly had so many plays already and did not perform them. He told this to Daly. When Wallack had rejected the play he returned it to Neuendorff, who then handed it to Dalyi While Wallack had the play, Daly began negotiations with Bloch, acting for L’Arronge, for a right in the play. Before the negotiations ripened, as they finally did, into an agreement by which L’Arronge gave to Daly the right to perform the play, Neuendorff had handed to Daly the copy received from Wallack. Daly produced the play with large gross receipts and paid to L'Arronge a percentage upon them, under Daly’s agreement with L’Arronge.

The jury found, under the charge of the court, that Daly made his agreement with L’Arronge in ignorance of the terms of the agreement between L’Arronge and Neuendorff and in good faith to Neuendorff.

The defendant claims that the agreement between L’Arronge and Neuendorff made the latter the owner of the play; that his assignees took his right as owner, and

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that L’Arronge ceased to be owner and could not competently give the plaintiff a right to produce the play.

As to this it is to be said that the agreement last referred to did not assign or grant “Dollars and Sense” by the execution of the agreement. The play was not then in existence, and no title to it or interest in it could pass before it came into existence. Field v. The Mayor (6 Y. Y , 186), and other cases that need not be cited, recognize the law on this subject. It was an executory agreement purely, that would give an equitable title to the play when completed by the author. But this results from the parties being held to the specific performance of a contract. If the parties please, they may refrain from specific performance and may vary or depart from the contract. The equitable vendee may refuse to take the title, and if he do, he cannot set up a title. And the result will be clearer if the equitable vendor accedes to that position of the vendees.

The testimony of Yeuendorff gives facts that negative the idea that under the executory agreement Yeuendorff claimed or took from L’Arronge, or that L’Arronge ceased to be possessed of the title. Yeuendorff did not act as an owner or declare that he was. L’Arronge took the right of disposing of the play as if he were the owner, and gave instruction to Yeuendorff to act as his agent in withholding the play from Daly and delivering it to Wallack. Yeuendorff assumed the position of agent and obeyed the instructions. The agreement with Daly, as it affected this play, was an act of Yeuendorff, not as owner, but as an agent. The delivery of the play by Yeuendorff to Daly was not by the former as owner, but, under his earlier acts and declarations and the agreement, was an agent for L’Arronge. I am of opinion, therefore, that Yeuendorff never became the owner and that plaintiff was not bound to look upon him as the owner and would not have been, even if he were not ignorant of the agreement between Yeuendorff and L’Arronge.

The plaintiff did receive information of the agreement between Yeuendorff and L’Arronge before the representation of “DoEars and Sense” had ended and before he had paid over the royalties upon receipts from later performances.

In that agreement was the fofiowing provision: “AJI other moneys which Mr. Yeuendorff will receive by disposing of his property right to those plays to other theatres in the United States, are to be divided equally between Mr. Yeuendorff and Mr. L’Arronge.” It is claimed that this gave Yeuendorff one-half interest, at least, in the royalties to be paid for the right to perform “DoEars and

p. 458

Sense,” and that plaintiff was bound to pay, at least, the one half to Heuendorff’s assignee, after receiving notice of the provision referred to above.

It is manifest, however, that the amount to be divided between Heuendorff and L’Arronge, was not the same as the amount to be paid by Daly, the plaintiff, to L’Arronge. The former was money to be actually and competently collected by Heuendorff, under his agreement with L’Arronge. The money to be paid by Daly was to be paid to L’Arronge and not at all to Heuendorff, and in this money, Heuendorff had no interest.

The agreement made by Daly with L’Arronge, through Block and under which he paid, was not inconsistent with any obligation imposed upon him by the agreement he made with Heuendorff, the latter acting as agent for the authors. The obligation is entirely one of contract. It is that Daly “agrees to pay the said Heuendorff as such agent as aforesaid.” Heuendorff impliedly contracts that he is only agent. The legal consequence of this is that the principal is the party in interest and a payment to him discharges the obligation, and it is, therefore, within the power of the principal to vary or modify the payment, its amount, and the conditions upon which it is to be made.

There was no agreement that Daly should pay Heuendorff compensation for his services as agent of L’Arronge, nor was there any. lien upon the amount to be paid in favor of Heuendorff’s compensation.

I am of opinion that the verdict for plaintiff gave a correct disposition of the case as to the first counterclaim.

The second and third counterclaims related to ■ plays of a dramatic author. Von Schoenthan. The agreement between the plaintiff and Heuendorff, that has been recited above, embraced, it may be assumed, these plays. In these instances the plaintiff made an arrangement with Von Schoenthan directly after the making of the agreement with Heuendorff.

The court below held that the action of the plaintiff was justified by the terms of the agreement with Heuendorff to the effect that Heundorff was the agent of the author. The plaintiff’s refusal to pay to the assignees of Heuendorff was sustained by the court below. This ruling of the court below'was correct.

It may, in addition, be said that the power of Heuendorff to collect royalties under his agreement with Von Schoenthan was not assignable to the defendant and the mesne assignees. The contract between Von. Schoenthan gave the former “the right and power, etc., to affix and determine the compensation and royalties and to collect these for Mr. Von Schoenthan.”

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There was a personal confidence reposed in the agent and a trust as to the collection and remitting of the moneys. There could, therefore, be no delegation of the power to collect, or assignment of the right to collect. Story on Agency, 11-16; Devlin v. The Mayor, 63 N. Y., 8 .

There was no interest of Neuendorf! individually assigned, because until he had performed his duty, and had collected, he had no interest.

Under the views expressed by the learned court .below and that have been now given, there was no error upon the trial.

Judgment affirmed, with costs.

Freedman, J., concurs; Ingraham, J., concurs in the result.