Daly v. Stetson — 54 N.Y. Super. Ct. 202

Majority

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AUGUSTIN DALY, Respondent v. JOHN STETSON, Appellant.^[1]

Headnote

Complaint, insufficiency of when question as to cannot be raised at trial. Averments as to conditions precedent, sufficiency of. Things not in existence, no legal title can pass to by assignment or grant before they come into existence, but an equitable title to them when completed will pass, which may be relinquished or waived. Acts constituting a relinquishment or waiver. Agreements not inconsistent. Construction of agreements as constituting agency only. Power to collect not assignable.

Where the answer makes no issue of fact with the complaint, but merely sets up counterclaims, the defendant is not entitled to object to the sufficiency of the complaint.

Plaintiff sold to defendant the exclusive right to give performances of certain plays for thirty consecutive weeks, commencing about Monday, October 22d, 1883, one performance each night to be given during said period; the defendant agreed to pay plaintiff two hundred dollars each week for thirty consecutive weeks, commencing the first Saturday after the performances began.

■Held, that the only condition precedent to the weekly payments becoming • due was the giving of one performance; and that it was sufficient for the complaint to state that payments had been begun.

One L’Arrange and one Neuendorff entered into a contract whereby L’Arrange assigned to Neuendorff the exclusive right of performance at the Germania Theatre of “all plays, dramas and comedies composed or arranged by him, and which from to-day forth will be written by Mr. L’Arrange, and furthermore exclusively all property rights on all these plays for the United States with the exclusive right to give to other stages permission to perform such plays, fix the royalties and collect the same, and authorized Mr. Neuendorff to act as the sole proprietor of the same ”; and whereby it was agreed that Mr. Neuendorff should pay to L’Arrange for every performance of said plays at the Germania Theatre a royalty of five per cent, of the gross receipts, and that all other moneys which Neuendorff should receive by disposing of his property rights to said plays to other theatres of the United States, should be divided equally between Mr. Neuendorff and Mr. L’Arrange after mak- . ing certain deductions; the account and payment of all moneys due to

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Mr. L’Arrange to be made every year after the close of the season. After making this contract Neuendorf? entered into a contract with Daly, the defendant, whereby after reciting therein that he was the agent of L’Arrange, and other dramatic authors residing on the continent, he in consideration of one dollar paid to him individually and of one dollar paid to him as such agent agreed for himself, and as such agent, to deliver to said Daly a copy of every unpublished or unwritten play by said persons, and to give to him the exclusive right of performance or permitting or causing, to be performed on the stage the English version thereof throughout the United States, and Daly agreed to make to Neuendorf? as such agent as aforesaid certain payments for such delivery, and exclusive right in a certain specified manner. Thereafter said L’Arrange composed and wrote a play named in English “ Dollars and Sense.” He instructed Neuendorf? not to deliver this play to Daly, but to give it to Wallack, a manager of a theatre, for examination and approval or rejection. Neuendorf? so informed Daly. Daly then began negotiations with an agent of L’Arrange for a right in the play. Pending the negotiations between Daly and the agent of L’Arrange, Wallack rejected the play, and returned his copy to Neuendorf? who handed it to Daly. Thereafter the negotiations between Daly and the agent of L’Arrange ripened into an agreement by which L’Arrange gave Daly the right to perform the play, he making to L’Arrange certain payments of royalties therefor. Daly produced thp play with large gross receipts, and jjaid to L’Arrange the royalties thereon agreed on between them. Before the representations of the play had ended, and before Daly had paid the royalties on receipts from later performances, Daly had information of the agreement between Neuendorf? and L’Arrange. Neuendorf? claiming to have a demand against Daly for royalties on said play under the agreement between them, assigned such claim and by various mesne assignments it was assigned to defendant, who sought to counterclaim'it in this action.

Held, First, that the play not being then in existence the execution of the agreement between Neuendorf? and L Arrange could not pass any title to or interest in it before it came into existence; that that agreement was as to plays not then in existence executory, and gave only an equitable title to them when completed; that the equitable vendee might refuse to take title, and if he did so he could not afterwards set up a title; that the acts of Neuendorf? negatived the idea that he claimed or took title under the executory agreement; that he never became the owner, and that Daly was not bound to look upon him as the owner. Second, that the amount to be divided between Neuendorf? and L’Arrange under the agreement between them was not represented by the amount to be paid by Daly to L’Arrange under the agreement between them. Third, that tha agreement between Daly and L’Arrange was not inconsistent with any

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obligation imposed on Daly by the agreement between him and Neuendorff. Fourth, that there was no cause of action against Daly for royalties on said play; and that the counterclaim for such royalties was properly disallowed.

Neuendorff also had a contract with Mr. Von Schoenthan, whereby Von Schoenthan transferred to Neuendorff the right and power to grant to all other stages (that is other than the Germania Theatre, as to which other provisions were made) in the United States the right of production of all stage plays composed for the Germania Theatre, to affix and determine the compensation and royalties and to collect them for him, Von Schoenthan, Neuendorff to pay to Von Schoenthan fifty per cent, of the income received by him from such production on such other stages, after making certain specified deductions. Von Schoenthan composed certain plays, which it is assumed were embraced in the above agreement between Daly and Neuendorff. After the making of that agreement Daly made an arrangement with Von Schoenthan directly for their production. Daly did produce them with the result of large gross receipts. Defendant claiming by mesne assignments a demand asserted by Neuendorff for royalties on these plays under his agreement with Daly, sought to counterclaim that demand.

Held, 1. That under the terms of the agreement between Neuendorff and Von Schoenthan, Neuendorff was merely an agent of Von Schoenthan for the production of his plays on stages other than that of the Germania Theatre. 2. That the power to collect given to Neuendorff was a personal confidence reposed in him, and a trust, and was not assignable. 3. That there was no cause of action against Daly for royalties on such plays; and that the counterclaim for such royalties was properly disallowed.

Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

Decided February 14, 1887.

Appeal by defendant, from judgment entered upon verdict of jury. The complaint was as followá :

“ The plaintiff, by Olin, Bives & Montgomery, his attorneys, for complaint in this action, alleges :

That on or about the 1st day of October, 1883, the plaintiff and defendant made, signed, and delivered a certain agreement in writing, in the words and figures following, that is to say:

‘‘ Memorandum of agreement made this 1st day of

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October, 1883, by and between Augustin Daly, manager Daly’s Theatre, New York, and John Stetson, lessee Fifth Avenue Theatre of New York, for themselves and their respective executors, administrators and assigns to wit, viz.:

“ Said Daly hereby sells to said Stetson the exclusive right to give performances of the plays of Pique and Divorce for thirty consecutive weeks during the theatrical season of 1883-84, commencing on or about Monday, October 22d, 1883, in all cities and towns in the United States and Canadas, excepting the City of New York, and the towns and cities heretofore sold to Brown and Orenstein for Jane Coombs, a list of which is herewith appended, one performance each night to be given during said period.

a The said Stetson hereby agrees to pay said Daly the sum of two hundred (200) dollars each week for thirty consecutive weeks, commencing the first Saturday after said performances begin, payable to said Daly in the City of New York.

“ The said Stetson also agrees to print in a distinguishable manner the name of Augustin Daly, as author of said plays in each advertisement, poster and bill of said performances.

“ In witness whereof we have hereunto set our hands and seal.

Witness: JOHN STETSON,

B. E. Stevens.” AUGUSTIN DALY.

That the defendant, though often requested so to do, has not paid the sums of money due under the said agreement, nor any part thereof, except five sums of two hundred dollars each, paid respectively on the 30th day of October, and the 5th, 10th, 17th and 24th days of November, 1883.

That there is now due and owing from the defendant to the plaintiff by reason of the premises, the sum of five thousand dollars besides interest.

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Wherefore, the plaintiff demands judgment against the defendant for the sum of five thousand dollars, with interest thereon from the 1st day of December, 1888, together with the costs of this action.”

The answer was as follows :

“ The defendant, by A. J. Dittenhoefer, his attorney, answering the complaint of the plaintiff herein, respectfully shows:

First.—He denies that there is now due and owing from this defendant to the plaintiff the sum of five thousand dollars, besides interest, or any sum whatever.

For a further and separate answer and defence, and by way of counterclaim, this defendant alleges upon information and belief: ” He then set out several counterclaims.

The facts appearing on the trial are sufficiently set forth in the opinion, and in the head-note.

A. J. Dittenhoefer, attorney, and of counsel for appeallant..

Olin, Rives & Montgomery, attorneys, and Stephen H. Olin, of counsel for respondent.

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 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 further 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

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one performance being given by him. The defendant was to pay $200 each week for 30 weeks, and to commence to pay on the 1st Saturday “ after said performances begin.” 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 that the defendant had begun the payments.

The other questions in the case relate to counterclaims by defendant.

The first counterclaim 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 assigned to Neuendorff “ exclusively all property rights on all these plays ” namely , all plays, • dramas and comedies composed or arranged by Mr. A. L’Arronge, 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

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upon Neuendorff of an agreement in writing that he made with the plaintiff.

That agreement was made December 27, 1881. It 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 unpublished 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 Neuendorff 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 Neuendorff 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 that 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 5 per cent, of his gross receipts of such performances under his license,” etc., and in the event of a 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 performances 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 rej ection. L’Arronge, had instructed Neuendorff not to deliver the play to Daly, because Dal v

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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 Daly. 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 an agreement between them.

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 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 N. Y. 186 , and other cases that need not be cited, recognise 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 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 vendee.

The testimony of Neuendorff gives facts that negative

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the idea, that under the executory agreement Neuendorf! claimed or took title from L’Arronge, or that L’Arronge ceased to be possessed of the title. Neuendorf! 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 instructions to Neuendorf! to act as his agent, in withholding the play from Daly and delivering it to Waback. Neuendorf! assumed the position of agent and obeyed the instructions. The agreement with Daly, as it affected this play, was an act of Neuendorf!’s not as an owner, but as an agent. The delivery of the play by Neuendorif to Daly, was not by the former as owner, but under his earlier acts and declarations, and the agreement was as agent for L’Arronge.' I am of opinion therefore, that Neuendorif 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 Neuendorf! and L’Arronge.

The plaintiff did receive information of the agreement between Neuendorf! and L’Arronge before the representation of “ Dollars and Sense ” had ended, and before he had paid over the royalties upon receipts from later performances. In that agreement was the following provision : “ All other moneys which Mr. Neuendorif will receive by disposing of his property right to these plays to other theatres of the United States, are to be divided equally between Mr. Neuendorf! and Mr. L’Arronge.” It is claimed that this gave Neuendorf! one half interest, at least, in the royalties to be paid for the right to perform “ Dollars and Sense,” and that plaintiff was bound to pay ,at least the one half to Neuendorif’s assignee, after receiving notice of the provision referred to above.

It is manifest however, that the amount to be divided between Neuendorf! 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 Neuendorf! under his agreement

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with L’Arronge. The money to be paid by Daly was to be paid to L’Arronge and not at all to Neuendorf!, and in this money Neuendorf! had no interest.

The agreement made by Daly with L’Arronge, through Bloch, and under which he paid, was not inconsistent with' any obligation imposed upon him by the agreement he made with Neuendorf!, the latter acting as agent for the authors. The obligation is entirely one of contract. It is that Daly “ agrees to pay the said Neuendorif, as such agent as aforesaid.” Neuendorif impliedly contracts that he is only agent. The legal consequence of this is, that the principal is the party in interest, and 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 Neuendorf! compensation for his services as agent of L’Arronge, nor was there any lien upon the amount to be paid in favor of Neuendorf!’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, Yon Schoenthan. The agreement between the plaintiff and Neuendorif that has been recited above, embraced, it may be assumed, these plays. In these instances the plaintiff made an arrangement with Yon Schoenthan directly after the making of' the agreement with Neuendorf!. The court below held that the action of the plaintiff was justified by the terms of the agreement between Yon Schoenthan and Neuendorf!, to the effect that Neuendorff was the agent of the author. The plaintiff’s refusal to pay to the assignees of Neuendorf! was sustained by the court below. This ruling of the court below was correct.

It may in addition be said, that the power of Neuendorf! to collect royalties, under his agreement with Yon Schoenthan was not assignable to the defendant and the mesne

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assignees. The contract between Neuenclorff and Von Schoenthan gave the former “ the right and power &c., to affix and determine the compensation and royalties, and to collect these for Mr. Von Schoenthan.” 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 an assignment of the right to collect. Story on Agency, 11 to 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 and Ingraham, JJ., concurred.