AUTRY v. REPUBLIC PRODUCTIONS INC

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District Court of Appeal, Second District, Division 3, California.

AUTRY v. REPUBLIC PRODUCTIONS, INC.

Civ. 15017.

Decided: July 09, 1946

Gang, Kopp & Tyre, of Los Angeles, and Samuel Williston, of Cambridge, Mass., for appellant. Loeb & Loeb, Finlayson, Bennett & Morrow, Milton H. Schwartz, Hubert T. Morrow, and John C. Morrow, all of Los Angeles, for respondent.

This is an action for a declaration of the rights and obligations of the parties under a contract of employment.

Plaintiff is by profession an actor in photoplays.

Under agreement of September 22, 1938, plaintiff's services were engaged by defendant for the period of the year July 1, 1938, to June 30, 1939, during which time he was to make ten pictures. Defendant was given four options, a, b, c, and d, to entend the contract by successive yearly periods, and plaintiff in each such extended period was to make eight additional photoplays. Each option was to be exercised by notice in writing given during the current yearly term. Option a was exercised by defendant and by agreement the term of that period was extended so as to run from June 30, 1939, to March 7, 1941. Succeeding yearly periods ran from the latter date. The findings were that options b, c, and d also were exercised. By another writing executed by the parties on May 11, 1942, defendant was given an additional option under which eight more photoplays were to be made after the expiration of the period covered by option d, and the finding was that defendant exercised this additional option. This final period expired March 7, 1945. It was further found that during the period when option c was operative, and which commenced March 6, 1942, plaintiff made three photoplays, which were finished, respectively, in April, June, and July, 1942.

Plaintiff rendered services as agreed until July, 1942. He entered the Army July 26, 1942, and at the time of trial of the action in March, 1945, was still serving in the armed forces of the United States. He has rendered no services to defendant and has received no compensation since July, 1942. On June 17, 1944, he served notice upon defendant that the contract was thereby terminated and that he was no longer in its employ, basing his action upon the stated grounds that further performance of the agreement had been rendered impossible and that the purposes of the agreement had been frustrated by reason of his military service. Defendant has at all times denied that the employment has been terminated and has demanded that plaintiff resume performance after his release from military service. Plaintiff's contention that his employment was terminated by reason of his service in the armed forces was rejected by the trial court, as evidenced by the following conclusions of law:

‘Said contracts have not nor has either of them been terminated or discharged nor has plaintiff been released or discharged from any of his duties or obligations thereunder.

‘By reason of plaintiff's unavailability to render services for the defendant because of his induction into and service in the armed forces of the United States, plaintiff's employment was suspended and the term thereof is extended for a period of time equal to the period of time from the date of said induction until the date when said unavailability ceases.’

The judgment declares that plaintiff is obligated to make twenty-one additional photoplays. These consist of the five that were not made under option c, and sixteen that were to be made under option d, and the May 11, 1942, agreement. The two agreements will be referred to in the singular.

The parties are in agreement upon the following points: (1) performance of plaintiff's services according to the agreement has been impossible and for that reason has been excused during the period of plaintiff's military service; (2) it will be possible upon plaintiff's release from military service for him to make the remaining twenty-one pictures, and (3) no more time or effort upon the part of plaintiff would be required to make the pictures after his release from the Army than would have been required if production had not been interrupted, and his compensation would be the same.

Plaintiff insists that the following are the only proper conclusions of law to be drawn from the facts which we have stated: (1) that his enlistment in the armed forces, ipso facto, terminated the contract, for the reason that further performance was rendered impossible and illegal; (2) that the objects and purposes of the parties have been frustrated and that he is thereby released from the duty to render further services, and (3) that he contracted to render services only up to March 7, 1945, and that the life of the contract therefore ended, by its own terms, while he was still in the service, and before the rendition of the judgment.

Defendant contends (1) that it had the right by the terms of the agreement to extend its life for a period equal to the entire time during which performance was prevented by reason of plaintiff's military service, and that it availed itself of this right; (2) that, independently of any express or implied provisions for extension, plaintiff is bound, under principles of equity, to resume and complete his services when he shall have been released from the Army, and (3) that if plaintiff ever had a right to declare the contract terminated by reason of his military service, he waived that right by his actions and conduct after he had enlisted.

The principles of law from which the parties evolve their opposing theories as to their rights under the contract are elaborately discussed in the briefs, and much care and research have been devoted to the arguments. We shall not have occasion to decide more than two of the propositions advanced by the parties, namely, the third one of plaintiff and the third one of the defendant, as we have stated them. The first question is whether plaintiff's obligation to render services was limited by the agreement to a period which expired while he was still in the military service. If it was so limited, his obligation came to an end when that date arrived.

March 6, 1945, was the last day upon which plaintiff was required to participate in the production of the agreed number of photoplays, unless the contingency of his entering the armed forces was one in which defendant was given the right to extend the term of the agreement. It is necessary to set out certain of the provisions for extensions at length. Under one of them plaintiff would have been required to spend a brief time in the completion of any picture under production at the expiration date of any of the yearly terms, but that provision is not here involved. Paragraphs 12, 13 and 14 of the agreement give defendant options to extend any yearly term under stated conditions. These paragraphs read as follows:

‘12. If the production of any photoplay in which the artist is appearing or is scheduled to appear hereunder is necessarily prevented, suspended or postponed during the employment period concerned by reason of any fire, casualty, lockout, strike, labor conditions, riot, war, act of God, or by the enactment of any municipal, state or federal ordinance or law, or by the issuance of any executive or judicial order or decree, whether municipal, state or federal, or by any other legally constituted authority, or if the majority of the motion picture theatres in the United States shall be closed for a week or any period in excess of a week, then and in any of said events, this agreement, at the option of the producer, may be suspended likewise during the continuance of such prevention, suspension and/or postponement, and the producer shall not be required to pay any compensation to the artist for or during such period of suspension or suspensions. The term of this agreement, and all of its provisions herein contained, may be extended, at the option of the producer, for a period equivalent to all or any part of the period of such suspension or suspensions. If such suspension or suspensions in connection with any particular employment period should continue for a period or aggregate of periods of four (4) weeks, the artist, at his option, may elect to terminate his employment hereunder; provided, however, that should the producer, within three (3) days after the expiration of such four (4) weeks, notify the artist in writing of its election to maintain this agreement in force, the artist shall not have the right to terminate his employment hereunder, but in such case the producer shall pay the artist weekly at the end of each week of such period of suspension, commencing with the fifth (5th) week, for so long during such period of suspension as it continues to maintain this agreement in force, compensation in an amount equivalent to one-fifth (1/515th) of the compensation which the producer is required to pay to the artist for the photoplay concerned. Such payment shall be in addition to the compensation which the producer is required to pay the artist for such photoplay. If such suspension or suspensions in connection with any particular employment period should continue for a period or aggregate of periods of four (4) weeks, the producer, at its option, may elect to terminate the artist's employment hereunder, and in such event it shall be released from all further obligations whatsoever hereunder, except to pay the artist reasonable compensation for the days, if any, on which the artist shall have actually rendered services for the producer during the employment period concerned.

‘13. In the event that by reason of mental or physical disability or otherwise, the artist shall be incapacitated from fully performing the terms hereof or from complying with each and all of his obligations hereunder, or in the event that the artist suffers any facial or physical disfigurement or material alteration or change in his present facial or physical appearance or any impairment of his voice, materially detracting from his appearance on the screen or interfering with his ability to perform properly his required services hereunder (all being hereinafter referred to as ‘disability or incapacity’), then in either or any of said events this agreement shall be suspended during the period of such disability or incapacity, and the producer shall not be required to pay any compensation to the artist for or during such period of suspension or suspensions. The term of this agreement, and all of its provisions herein contained, may be extended, at the option of the producer, for a period equivalent to all or any part of the period of such suspension or suspensions. If such disability or incapacity should continue during any employment period for a consecutive period of two (2) weeks or for an aggregate of periods of four (4) weeks, the producer, at its option, may cancel and terminate this agreement, and thereupon be released from all further obligations whatsoever hereunder. It is further agreed that if the artist alleges that he is incapacitated by illness or other disability from the full and faithful performance of this agreement, the producer shall have the right to have medical examinations of the artist made by such physician or physicians and at such reasonable time or times as it may disignate.

‘14. It is distinctly understood and agreed by and between the parties hereto that the services to be rendered by the artist under the terms hereof, and the rights and privileges granted to the producer by the artist under the terms hereof, are of a special, unique, unusual, extraordinary and intellectual character, which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law, and that a breach by the artist of any of the provisions contained in this agreement will cause the producer irreparable injury and damage. The artist hereby expressly agrees that the producer shall be entitled to injunctive and other equitable relief to prevent a breach of this agreement by the artist. Resort to such injunctive and other equitable relief, however, shall not be construed as a waiver of any other rights that the producer may have in the premises, for damages or otherwise. In the event of the failure, refusal or neglect of the artist to perform or observe any of his obligations hereunder to the full limit of his ability or as instructed, the producer, at its option, shall have the right to cancel and terminate this agreement or the employment period concerned, and, if the right to cancel and terminate this agreement is not exercised, shall have the right to extend the term of this agreement and all of its provisions for a period equivalent to all or any part of the period during which such failure, refusal or neglect continues. If the producer elects to terminate this agreement, it shall be released from all further obligations hereunder whatsoever. If the producer elects to terminate the employment period concerned, it shall be released from the obligation to pay any compensation whatsoever to the artist with respect to such employment period. If, at the time of such failure, refusal or negltect, the artist shall have been cast to portray a role in a photoplay, and if because of such failure, refusal or neglect on the part of the artist, another person should be engaged to portray such role, the producer shall have the right to extend the term of this agreement and all of its provisions for a period equivalent to all or any part of the time reasonably required for the completion of such role by such other artist. Should be producer notify the artist that the artist has been cast to portray a role in a photoplay, and should the artist thereupon or at any time prior to the designated date of commencement of the employment period concerned advise the producer that the artist does not intend to render such services, the producer (in addition to all other rights and remedies it may have in the premises) shall have the right to extend the term of this agreement for all or any part of the period commencing as of the date of receipt by the producer of such notice, and continuing until the expiration of the time which would have been reasonably required to complete the portrayal of such role, or, should another person be engaged to portray such role, continuing until the completion of such role by such other person. Each and all of the several rights, remedies and options of the producer contained in this agreement shall be construed as cumulative, and no one of them as exclusive of the others or of any right or priority allowed by law.’

Defendant urges a construction of paragraphs 13 and 14 which would make them applicable to suspension of performance due to plaintiff's military service and which would give it the right to extend the term of the contract for a time equal to the period of such interruption. The provisions which defendant relies upon are the following from paragraph 13: ‘In the event that by reason of mental or physical disability or otherwise, the artist shall be incapacitated from fully performing the terms hereof or from complying with each and all of his obligations hereunder, * * * then in either or any of said events this agreement shall be suspended during the period of such disability or incapacity, and the producer shall not be required to pay any compensation to the artist for or during such period of suspension or suspensions. The term of this agreement, and all of its provisions herein contained, may be extended, at the option of the producer, for a period equivalent to all or any part of the period of such suspension or suspensions,’ and the following from paragraph 14: ‘In the event of the failure, refusal or neglect of the artist to perform or observe any of his obligations hereunder to the full limit of his ability or as instructed, the producer, at its option, shall have the right to cancel and terminate this agreement or the employment period concerned, and, if the right to cancel and terminate this agreement is not exercised, shall have the right to extend the term of this agreement and all of its provisions for a period equivalent to all or any part of the period during which such failure, refusal or neglect continues.’

It appears clearly from a study of the three paragraphs that each of them was intended to cover situations to which neither of the others would apply. Paragraph 12 provides for extensions of time for causes beyond the control of the parties, such as fire, war, etc.; paragraph 13 provides for extensions in the event of plaintiff's incapacity to render the agreed services, and paragraph 14 provides for such extensions in the event production should be interrupted or prevented by reason of plaintiff's failure or refusal to render his services as agreed.

The court made the following findings:

‘VIII. Defendant did not at any time from and including March 7, 1942 to and including March 6, 1943 serve upon plaintiff any notice that it did exercise its right or option to extend the term of employment described in subdivision (c) of paragraph 20, which term of employment was for a period of one year commencing March 7, 1942 and expiring March 6, 1943.

XI. Defendant did on March 3, 1944, notify plaintiff of its election to extend the then current term of plaintiff's employment, to wit, the term of employment referred to in subdivision (d) of paragraph 20 of said contract, for a period of 51 weeks and 6 days.'

It appears from these findings that defendant did not attempt to avail itself of any rights of extension under paragraphs 12, 13 or 14 prior to March 3, 1944, but that it did on that date attempt to extend the then current term of plaintiff's employment under one or more of said paragraphs. Finding XI obviously does not refer to an attempted extension under paragraph 12. A notice given in March, 1944, of an election to continue the agreement in force, based upon plaintiff's having entered the military service in July, 1942, would not have been in compliance with the provisions of paragraph 12, nor does it appear in the record that defendant offered or intended to proceed under the provisions of that paragraph.

If defendant was attempting to exercise an option under paragraph 14, the notice which it gave was ineffective to extend the term of the agreement, for the reason that paragraph 14 relates only to ‘the failure, refusal or neglect of the artist to perform or observe any of his obligations hereunder to the full limit of his ability,’ etc. Plaintiff's military duties excused performance under his agreement, and the failure to render services in the production of photoplays during the period of such military service was not a failure to perform or observe any of his obligations to defendant.

Defendant relies heavily upon the first phrase of paragraph 13, namely, ‘In the event that by reason of mental or physical disability or otherwise, the artist shall be incapacitated,’ etc., and seeks to give to the words ‘or otherwise’ and ‘incapacitated’ exceedingly broad meanings. It is not contended that plaintiff's duties as a member of the armed forces constituted a mental or physical disability which incapacitated him from rendering the agreed services, but it is contended that by reason thereof he was ‘otherwise’ os ‘incapacitated,’ and that defendant therefore had the right to suspend him during the term of such military service, and to extend the term of the agreement for an equivalent period. Under defendant's theory, plaintiff would be ‘incapacitated’ by his military service even though he was merely prevented from giving his services to defendant. The situations in which production might be ‘prevented,’ ‘suspended’ or ‘postponed’ are specifically provided for in paragraph 12. If paragraph 13 should be interpreted to mean that plaintiff was incapacitated from performing hsi contract because he was prevented by his military duties from rendering services to defendant, it could also be said that he would be incapacitated in many of the situations specified in paragraph 12, for the reason that any one of a number of those situations might temporarily prevent his acting in photoplays. We cannot give to paragraph 13 any such meaning, for to do so would give defendant the right to suspend plaintiff and extend the term of the contract in any situation in which plaintiff, although mentally, physically and otherwise capable of performing his duties, would be prevented from performing them by causes beyond his control. Paragraph 12 makes special provision for all the anticipated contingencies in which performance might be interrupted by causes other than the incapacity or disability of plaintiff or by conduct constituting a breach of his obligations. Plaintiff's entering the armed forces is not among them and paragraph 12 cannot be broadened by a forced construction of the general language of paragraph 13. Plaintiff was prevented, but not ‘incapacitated’ nor ‘disabled’ from performing his contract by reason of his military duties, and paragraph 13 does not apply to that situation.

One of the provisions of the agreement read as follows: ‘This agreement contains the entire understanding and agreement of the parties hereto and it is acknowledged by both parties hereto that, except as expressly provided in this agreement, there are no representations or warranties or other agreements, express or implied, in any way relating to the provisions of this agreement.’ The agreement must be read as expressing the complete understanding of the parties as to all possible conditions which would operate to extend any yearly term of plaintiff's service, or which would give defendant an option to extend it. Nothing was left to implication. In view of the provisions quoted above, it can only be concluded that the parties intended that there should be no extension of the term of the contract in any event not specified therein. It therefore appears that there was no express agreement in paragraphs 13 or 14 for extension of the term of the employment beyond March 6, 1945, in the event of plaintiff's entering the armed forces. Defendant contends that, even so, the main purpose of the parties was to accomplish the production of a given number of photoplays and that the writings which they executed do not express a mutual understanding that time is of the essence of the agreement. From this premise it is argued that the judgment under which plaintiff would be required to make the twenty-one additional photoplays after his discharge from the service does not impose upon him any additional burden or an obligation substantially different from the one he originally undertook, and that under these circumstances plaintiff will be required to make the remaining photoplays after he has been released from the Army. Defendant relies upon the rule of the Restatement, Contracts, as follows: ‘Section 462. Temporary Impossibility. Temporary impossibility of such character that if permanent it would discharge a promisor's entire contractual duty, has that operation if rendering performance after the impossibility ceases would impose a burden on the promisor substantially greater than would have been imposed upon him had there been no impossibility; but otherwise such temporary impossibility suspends the duty of the promisor to render the performance promised only while the impossibility exists.’ And upon the following statements of Mr. Williston (6 Williston on Contracts (1938 Rev.Ed.), sec. 1957, pp. 5489, 5490): ‘* * * If the delay caused by impossibility is excusable and is of short duration, the promisor is still held bound by his promises, except to the extent of such delay. If the impossibility persists for a length of time sufficient to go to the essence of the contract (and only in that case) the temporary non-performance on one side will justify the other party in rescinding the contract altogether. But may the promisee in spite of long delay refuse to take advantage of his excuse and demand performance of the contract as soon as it becomes possible? This depends on whether the promisor would thereby be compelled to render performance substantially different from what he contracted for. If so, he is permanently excused.’ And from section 1931, pp. 5410, 5411: ‘The true distinction is not between difficulty and impossibility. A man may contract to do what is impossible, as well as what is difficult, and be liable for failure to perform. The important question is whether an unanticipated circumstance has made performance of the promise vitally different from what should reasonably have been within the contemplation of both parties when they entered into the contract. If so, the risk should not fairly be thrown upon the promisor.’

Plaintiff, also, relies upon these same principles. The question is whether they are applicable to the facts of the case and, if so, in what manner they apply. It is unquestionably the law that where performance has been rendered impossible temporarily, further performance will not be required if it would impose upon the promisor a substantially greater burden than the one he originally assumed. The court made the following finding: ‘No substantial [additional] burden has been or will be imposed upon plaintiff in connection with the performance of the services by him as an actor in photoplays produced by defendant, by reason of his service in the armed forces of the United States or by reason of any performance of the duties provided for in said employment contracts or will be imposed upon plaintiff as and when he may be discharged from the armed forces of the United States or may be permitted by such armed forces to participate as an actor in the production by defendant of the photoplays provided for in said employment contracts.’ Defendant says that the finding is one of fact and that it is conclusive upon the question of plaintiff's obligation to make twenty-one more pictures. The finding is favorable to defendant as far as it goes, but it is by no means conclusive. Performance by plaintiff of the agreed services after his discharge from the Army might not be more burdensome to him, but might constitute performance vitally different from that contemplated by the parties, with respect to the time of performance, and if this is shown to be the case he has been permanently excused. We must therefore inquire whether it was reasonably within the contemplation of the parties that plaintiff's services, if interrupted, would be resumed under such circumstances as have developed, that is to say, whether the making of the additional twenty-one photoplays in a period commencing at some indefinite date after March 20, 1945, when the judgment was rendered, would be performance reasonably within the contemplation of the parties when they made the agreement. This returns us to defendant's contention that time was not made of the essence of the agreement. Unless this position is sustainable, the completion of plaintiff's services after the date of the judgment would not be performance within the stated term of the employment, since there was no express provision for extending the term beyond March 6, 1945. Therefore, unless the stipulations as to time of performance were so elastic as to encompass performance after March 6, 1945, such performance would be outside anything reasonably within the contemplation of the parties and therefore outside the contract itself.

The provisions of the agreement quoted emphasize the importance which the parties accorded the time element. It is emphasized further by the obvious necessities of the business of producing motion pictures. The agreement is replete with additional provisions which indicate strongly that the parties were expected and required to adhere strictly to the stipulations as to time of performance. There was an ‘employment period’ for the production of each photoplay; the time after the expiration of each such period in which plaintiff was required to report for the purpose of making retakes was limited to 10 days; if a photoplay was in production at the expiration of any employment period, the same could be extended for not exceeding 15 days. Various options were given the respective parties to be effective under certain conditions, and the time when each might be exercised was specified in numbers of days. The time of performance, being strictly limited, was of the essence of the agreement. At the scheduled rate it would take more than two and a half years to make twenty-one photoplays. The agreed time for this work was between July, 1942, and March, 1945. Even if plaintiff had been discharged from the armed forces on the date of the judgment, the time required to render services as ordered by the judgment would extend to October, 1947. The parties specified the several periods of time to be devoted to the work, and thereby excluded all others. The fact that defendant is willing to accept plaintiff's services over an entirely different period does not change plaintiff's obligation. Performance of services as ordered by the judgment would be wholly outside the original agreement. The time which plaintiff has not contracted away belongs to him and he has a right to do with it as he pleases. When the time which he agreed to devote to defendant's work ran out he became free to work for whomever he pleased, or not to work at all.

The conclusion we have reached upon the main point takes the case beyond the principles which govern in situations where performance within the contemplation of the parties may be had after a condition of temporary impossibility has ended. Many such cases have been cited and discussed by the parties. A review of them would not be within the scope of our decision. It may be said, however, that in all the cases relied upon by defendant, in which it was held that temporary impossibility merely suspended performance, without terminating the contract, some degree of performance remained possible within the anticipated life of the contract.

One of the conclusions of law was that ‘By reason of his acts and conduct as found in Findings of Fact numbered XV hereinabove, plaintiff recognized and acquiesced in the continuance of his duties and obligations under said employment contracts and held himself to be still bound by them after he would enter the armed services and waived all right to claim any discharge from the duties and obligations imposed on him by said employment contracts and by each of them.’ Before discussing this conclusion, it should be mentioned that the March, 1942 contract contained a paragraph reading as follows: ‘24. In the event that the artist shall be required to serve in the armed forces of the United States pursuant to the Selective Service Act, or shall volunteer for such service, the parties hereto will agree upon their mutual rights and obligations hereunder in view of such military service.’ When it became apparent that plaintiff would join the armed forces, negotiations were entered into for the purpose of working out some plan under which plaintiff could make some pictures while he was in the military service. Finding number XV was substantially in the language of the allegations of the defense of waiver and it was alleged and found that in July, 1942, plaintiff orally agreed that after his entry into the armed forces he would act in three photoplays for defendant if the Army Air Force gave its consent; that the Army Air Force did give its consent to the production of the first photoplay; that defendant made preparations to produce the first and second proposed photoplays, incurring therein substantial costs and expense; that it notified plaintiff that production would commence August 15, 1942; that plaintiff was able to appear in said first photoplay but refused to do so unless defendant would consent to certain modifications of the 1938 and 1942 agreements; that defendant did not agree to the requested modifications and so said photoplays were not made. It would appear that this defense of alleged waiver was urged against plaintiff's contention that his entering the armed forces, ipso facto, terminated his employment for it is said in defendant's brief: ‘Autry by his conduct recognized and acquiesced in the continuance of his obligations under the contracts and waived any right to claim that the contracts were ended.’ It is immaterial whether plaintiff's alleged agreement to make the three photoplays was an admission that the original employment had not been terminated or a recognition of a duty under said paragraph 24 to endeavor to agree upon a plan for the making of some photoplays during the course of his military service. If plaintiff thereby conceded that his employment had not been terminated by his enlistment and also that it was his duty to endeavor in good faith to reach some agreement under said paragraph 24, such concessions did not deprive him of the right to discontinue his services when the term of his employment expired in March, 1945. Nothing but an express agreement between the parties could have extended the life of the contract beyond that date. The conclusion of the court on the point of waiver relates to services to be performed within the life of the contract. It is not pertinent to the ground of our decision and furnishes no support for the judgment. It follows from what we have said that the judgment should be reversed.

We necessarily leave undecided numerous questions which have been argued in the briefs. In view of the fact that the agreement which is the subject of the declaratory judgment had come to an end before the judgment was rendered, we do not feel called upon to answer any further questions with respect to the interpretation of the provisions which would have governed the rights and obligations of the parties if plaintiff had been discharged from the armed forces during the lifetime of the agreement. It should be added, however, that the judgment reserved for future determination the question whether, and to what extent, the term or terms of plaintiff's employment under the two writings was limited by the provisions of section 2855 of the Labor Code of the State of California.

The judgment is reversed with instructions that the conclusions of law be amended to provide that on March 7, 1945, all obligation of plaintiff to render further services under said contracts or either of them terminated, and to enter judgment in favor of plaintiff accordingly.

SHINN, Justice.

DESMOND, P. J., and WOOD, J., concur.

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