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A.L.K. CORP. v. COLUMBIA PICTURES INDUS.

December 28, 1970

A.L.K. CORPORATION, Plaintiff,
v.
COLUMBIA PICTURES INDUSTRIES, INC., Defendant


Vanartsdalen, District Judge.


The opinion of the court was delivered by: VANARTSDALEN

VANARTSDALEN, District Judge.

 The parties agree that defendant, a motion picture distributor, on or about April 27, 1970, granted plaintiff, the owner and operator of the 1812 Theatre -- a first class, downtown Philadelphia motion picture theatre -- a license for the exclusive first-run showing of the film, "HUSBANDS". Defendant contends that for reasons beyond its control, it could not deliver the film to plaintiff by the agreed upon opening date of "on or about July 8, 1970"; and, that, therefore, the licensing agreement, by its express language, terminated. Defendant admits it is about to re-solicit all Philadelphia area theatres for bids for an exclusive "first run" showing of the film to commence on or shortly after February 3, 1971. Plaintiff seeks to prevent this by a prohibitory injunction, and also a mandatory injunction to enforce specific performance of its claimed license agreement.

 A full hearing was held on plaintiff's motion for a preliminary injunction. Testimony was presented on behalf of plaintiff and defendant, oral argument and written briefs were presented immediately following the taking of testimony and supplemental briefs have been filed. Counsel agree that a prompt decision on the motion is of utmost importance to their respective clients.

 There is no question of jurisdiction over the person or subject matter, which is based on "diversity", 28 U.S.C. § 1332(a)(1). Plaintiff is a Pennsylvania corporation with its principal place of business in Philadelphia. Defendant is a Delaware corporation with its principal place of business in New York City. The amount in controversy exceeds Ten Thousand ($10,000) Dollars.

 Defendant's contention that the contract with plaintiff is terminated is based on the following clause of the agreement:

 
"PREVENTION OF PERFORMANCE -- TENTH: If Exhibitor shall be prevented from exhibiting or Distributor from delivering any picture for causes beyond their direct control, respectively, (including but not limited to inability to procure necessary materials or prints, laws, Governmental rules, regulations or orders or court decrees now or hereafter in effect, the failure of the producer of the picture to make timely delivery thereof to Distributor, Acts of God, sabotage, strike, or force majeur) then this license in respect to each such picture affected shall terminate and revert to Distributor without liability to either party."

 Considerable testimony dealt with the date and circumstances under which defendant notified plaintiff that it considered the contract terminated. However, if defendant's position is sound, notice would appear to be immaterial. It is clear that neither party ever agreed to or acquiesced in the others position.

 There was also considerable testimony as to what the parties may have done between themselves concerning other motion pictures that on other occasions were not delivered by the "on or about" date; but no uniform practice, understanding, or trade custom was established.

 The parties have agreed that the contract was regularly executed and since the situs of this contract is Pennsylvania, there is no question that Pennsylvania law applies. The sole question is the interpretation of the above-quoted portion of the contract.

 The law in this area is quite clear that the interpretation of a written contract is a matter of law to be determined by the entire contract. (Rest. Cont. 2d, Sec. 235(c), 236(a)).

 
"It is the law in Pennsylvania that in construing a contract the intention of the parties must be ascertained by the entire instrument, and each and every part of it must be taken into consideration and given effect if reasonably possible." Stevens v. Baltimore and Ohio Railroad Company, D.C., 290 F. Supp. 969, p. 970 (1967).

 Further, it must be noted that where the language in the contract is clear and unambiguous, it is the duty of the Court to construe the contract in its plain and ordinary meaning. Hall Motor Sales, Inc. v. Studebaker-Packard Corporation, 145 F. Supp. 430 (1956).

 The contract was a printed form prepared by defendant and presented to plaintiff. Whether the so-called "fine print" line of cases may be applicable (plaintiff's agents testified they never read the quoted clause), need not presently be decided. A reading of the entire contract leads to the conclusion that mere delay in making delivery of the film to plaintiff, irrespective of the cause of such delay, did not thereby terminate or make it terminable at defendant's option. This conclusion is supported by reading an ...


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