Roseneau v. Empire Circuit Co.

McLennan, P. J.: The Court Street Theatre .Company, of which the plaintiff is receiver,, is a 'domestic corporation. From the time of its incorporation in the year 1895 until the 17th'day of March, 1902, when the plaintiff was appointed receiver of said company, it, as lessee, was engaged in the .city of Buffalo, 27. Y., in conducting the Court Street Theatre so called. Said company played and conducted at said theatre' burlesque performances only and during the time mentioned had practically no competitor in such city. Its business was run at a large profit and it had established the valuable reputation of being the leading and only burlesque theatre in the city of. Buffalo. The defendant, The Empire Circuit Company, is a foreign corporation, organized about the year 1900 under the laws of the State of Ohio, having its principal office and place of business in Cincinnati. At all the times in question its business was conducted by a board of nine directors, among whom were the defendants Kernan and Rife. Each of the directors of said defendant company was the owner, lessee or controlled one or more burlesque theatres, so called, and which were devoted exclusively to the accommodation of burlesque shows dr attractions. The stock of such company was owned by the directors in proportion to the number of theatres which they respectively owned, leased or controlled, and the business of such company was to contract with the persons, firms or corporations owning or controlling burlesque shows or attractions to play in its theatres, to the end that all of such theatres might be continuously occupied, or as nearly so as possible, during any theatrical season. The theatres owned, leased or controlled by the several directors of the defendant company were located in the cities of St. Louis, Kansas City,. Indianapolis, Louisville, Pittsburg, Cleveland, Cincinnati, Washington, Baltimore and the city of Buffalo, only one of such theatres being located in each of said cities. — 431 — As stated in respondents’ brief : “ The theatres managed by The Empire Company were the principal burlesque theatres in the cities in which they were located.” There were practically only forty-one burlesque shows or attractions in the middle and eastern parts of the United States which were suitable to be given or played in the defendant company’s, theatres or in the Court Street Theatre. It appears that said forty-one burlesque shows or attractions were not more than was reasonably necessary to supply the defendant company’s theatres with suitable attractions'. That being the situation the defendant company resolved that it would not book any burlesque show or attraction to play in its theatres except upon condition that the owners of such burlesque shows or attractions would agree not to play in any theatres other than those owned, leased or controlled by it, and pursuant to such resolution each of the owners of or persons controlling such burlesque shows or attractions were notified, in effect, that if they gave their shows or played in any theatre not owned or controlled by the defendant company they would not be permitted to give their shows in the theatres owned by it. As a result of such resolution and notice the owners of practically all of such burlesque shows or attractions voluntarily decided to show or play only in the theatres of the defendant company, and it appears that nineteen or twenty of such owners had contracted with the Court Street Theatre Company to play in its theatre, but because of the action taken by the defendant company and the defendants Kern an and Rife, each and all of such contracts were canceled, with the result that the Court Street Theatre Company, of which the plaintiff is receiver, could not obtain any suitable attractions to play in its theatre and, therefore, financial loss resulted to it. We may assume, at least there is evidence to support the conclusion, that the defendants knew or had reason to believe that if the plan adopted by them was carried out and acceded to by a considerable number of the owners of the burlesque shows financial loss would result to the plaintiff, and that it would be difficult, if not impossible, for it to secure suitable attractions to play in the Court Street Theatre. All other burlesque theatres which were not included in the defendants’ list would experience a like difficulty. — 432 — It is practically conceded that the method of doing business adopted by the defendants was of very great advantage to them and also to the owners of the burlesque shows or attractions. The burlesque shows or attractions were thus enabled to be booked in advance and to follow the circuit, so called, of theatres owned or controlled by the defendants, which, as we have seen, comprised the • principal burlesque theatres in the middle and eastern parts of the United States. Any one of such shows or attractions could be given in Washington or Baltimore and then in all the theatres owned'by the defendant company in regular order, thereby avoiding unnecessary travel and the expense incident thereto, and the theatres owned by the defendants were thereby assured of having their theatres continuously filled during any theatrical season. Before such plan was devised it was common for a burlesque show to be booked in a western city for one week, then in an eastern city for another week, then be obliged to return to a western city, and so the company was compelled to travel long distances, thereby incurring large expense in order to keep their engagements. It was also true that such theatres as afterwards were included in the defendant company were often closed because burlesque attractions could not be secured on account of the lack of method which prevailed. To meet that difficulty the defendant company was formed, • its prime purpose and intent being to provide its theatres constantly with shows and at the same time to enable the owners of the burlesque shows or attractions to keep their companies constantly employed after they had started upon the road, and so without incurring the expense of traveling a long distance to meet and keep their respective engagements. The .defendant company was an important corporation. When organized it was authorized to issue capital stock to the amount of $50,000, which it did, and such stock was practically all taken at its par value by the owners of the theatres which it controlled. Its business, from the outset, was successful and profitable, because, as we may assume, of the plan adopted by it which brought it and the owners of the theatres which it represented into harmonious relations with the owners of the principal burlesque shows or attractions, enabling them to give such shows at the minimum of expense. We conclude that the purpose and object of the defendants in the — 433 — premises was legal, and that they had a perfect legal right to adopt and carry out the plan which they did in order to accomplish such purpose, notwithstanding it resulted in financial loss to the plaintiff’s company and prevented it from procuring suitable attractions for the Court Street Theatre. The evidence does not support the conclusion that the defendant corporation was organized and its method of doing business adopted because of malice which it entertained toward the plaintiff company or toward its' principal owner, and there is no evidence from which it can be fairly concluded that the chief purpose which the defendants had in view was to ruin and destroy the business of the plaintiff’s company. The evidence does tend to show that ill-will existed between some of the defendants and the chief stockholder of the plaintiff company, and it is undoubtedly true that they desired to eliminate the competition which existed because of the ownership and operation of the Court Street Theatre. Such ill-will or feeling started because the owner of the Court Street Theatre established competing burlesque theatres in the cities of Washington and Baltimore, it being the defendants’ notion that there was only room for one such theatre in either of those cities, and because of such action on the part of the owner of the Court Street Theatre, the defendants Kern an and Rife opened a competing burlesque theatre in the city of Buffalo and adopted the plan to which attention has been called, which was acceded to by practically all the owners of burlesque attractions, with the result that the Court Street Theatre practically ceased to be a competitor. Concededly, the defendants, or either of them, had a right to open a theatre which would be a competitor of the Court Street Theatre in the city of Buffalo, the same as the plaintiff had a right to open and establish a competing theatre in the city of Washington or Baltimore. The contention of the plaintiff is that the defendants, in case they brought a burlesque attraction to the city of Buffalo and played it in their theatre, the Lafayette, were compelled to permit the owner of a burlesque show so playing in it to play in the Court Street Theatre, notwithstanding, perchance, the defendants had expended large sums of money in advertising and bringing the burlesque show played in the Lafayette Theatre to the attention of the people of the — 434 — city of .Buffalo. We consider that the defendants had the right to say to the owner of such burlesque show, “ If we incur the expense of booking your attraction for the Lafayette Theatre, you must agree not to play in the Court Street Theatre; ” that the defendant's had the right to say, 66 Tour time must be at our disposal and you shall not be permitted to make or enter into any agreement or contract ■ which will deprive us of playing any of your attractions in any of the theatres which we own or control, and at such time as we may desire.” May a corporation, not dealing in public necessities, utilities or food products, determine that it will not employ any individual, firm or corporation, except upon condition that such individual, firm or corporation will agree not to work for or to serve its competitors ? The owners of the burlesque shows or attractions desired to secure employment — desired that they might be permitted to give such shows in the theatres owned or controlled by the defendants, which comprise the principal theatres in the middle and eastern portions of the United States. The defendants were willing to give to the owners of such shows employment, but only upon condition that they would not serve the owners of theatres not owned or controlled by them. We think that the defendants, in insisting upon such condition, were strictly within their legal rights, and so notwithstanding such condition imposed resulted in or induced nineteen or twenty of the owners of burlesque shows or attractions to violate the contract entered into between them and the plaintiff company, and resulted in practically preventing the plaintiff company from obtaining.suitable attractions to be played therein. . In the case of Ashley v. Dixon (48 N. Y. 430) it was held that no liability was incurred by “ G ” because of the fact that he induced “B” to break a contract entered into by him with “ A ” for the purchase of “ A’s ” real property. The court in that case said: “ But even if defendant had induced Patrick not to perform his contract, that alone would not make him liable to the plaintiffs for damages. He could advise, and persuade Patrick not to convey the land, under his contract with McEachron, and could, by offering more, induce him to convey to himself, without incurring any liability to McEachron, t so long as he was guilty of no fraud or misrepresentation affecting McEachron.” In the case at bar it is not pretended that the defend — 435 — ant company or its directors, agents or representatives made any false statement respecting the Court Street Theatre which induced the burlesque show companies not to play or give their attractions in it. What the defendants did was open and above board. They simply said to the owners of burlesque shows, “ If yon play or show in the Court Street Theatre you cannot play in the theatres owned, leased or controlled by us,” and, as before said, we conclude that in adopting that plan and rule and in enforcing it, the defendants were acting within their legal rights. The purpose and .object of the adoption and enforcement of such rule was to secure financial advantage and profit to the defendants; it was for the purpose of enabling it to make provision by which its theatres should at all times during the theatrical season be occupied with suitable burlesque shows, and as before suggested, there is no basis for the conclusion or finding that this important corporation was actuated by malice as against the owner of the plaintiff’s company in organizing the defendant company and in adopting the rule which it did. Its chief purpose and object was' to conduct its business in such fashion so that it would be successful and yield a profit to its stockholders and a reasonable return for the money and property which they had invested therein. We, however, understand the law to be that if the means employed to do a certain act are legal and lawful, it is of no consequence that the motive which induced such act was malicious. (Park & Sons Co. v. National Druggists’ Assn., 175 N. Y. 20; National Protective Assn. v. Cumming, 170 id. 315; Reynolds v. Plumbers' Protective Assn., 30 Misc. Rep. 709; affd., 53 App. Div. 650.) Tt,.however, is suggested that the defendant company and its directors, Kernan and Rife, are liable to the plaintiff in this action because they conspired to bring about the ruin of the Court Street Theatre. The only conspiracy existing, if any, suggested by the evidence, is that they agreed among themselves and devised ways and means by which competitors in the city of Buffalo might be eliminated and it was proposed that such result should be accomplished, if at all, only by legal means, to wit, by saying to the owners of the burlesque shows whom the defendants desired to employ : “ If you desire to secure employment with us, you must refrain from — 436 — rendering like service to the plaintiff company or play in its theatre in the City of Buffalo.” If the defendants only did in the premises what they had a legal right to do, then no cause of action was created in favor of the Court Street Theatre Company. (National Protective Assn. v. Cumming, supra; Foster v. Retail Clerks' Protective Assn., 39 Misc. Rep. 48; Hutchins v. Hutchins, 7 Hill, 104; Wehle v. Conner, 83 N. Y. 231; Brackett v. Griswold, 112 id. 454; People ex rel. Burnham v. Flynn, 114 App. Div. 578.) The acts which are complained of as having been done by the defendant company were clearly for the financial-, advantage of the members of such corporation,, and, therefore, the defendants had a right to give force and effect to such plan of action, notwithstanding it resulted in loss and damage to the Court Street Theatre Company. A man may do or perform such legal acts as will result in advantage to him, and having done and performed them with that end in view it is unimportant that he may also be actuated by malice and a desire to injure another. (Park & Sons Co. v. National Druggists' Assn., supra, 20.) The conclusion is reached that under the decisions of the Court of Appeals and of the other courts in this State there is no authority for holding upon the evidence in this case that the defendant company or its directors, either or any of them, are liable to the Court Street Theatre Company, or its receiver, because of any of the acts tiomplained of, notwithstanding such action on their part resulted in serious damage and loss to the plaintiff company. Having reached such conclusion, it is unnecessary to consider the other questions presented by this appeal, except to say that I fully agree with brother Seeing in holding that in any event the damages awarded by the jury in this case are excessive. The judgment and order appealed from should be reversed and a new trial granted, with costs to the appellants to abide the-event. All concurred, Seeing, J"., in a separate opinion.