CONSOLIDATED THEATRES INC v. E. C. Powell and Oscar Ryan, Defendants and Appellants.

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

CONSOLIDATED THEATRES, INC., a corporation, Plaintiff, Cross-Defendant and Respondent, v. THEATRICAL STAGE EMPLOYEES UNION LOCAL 16, an unincorporated association, Defendant, Cross-Complainant and Appellant, E. C. Powell and Oscar Ryan, Defendants and Appellants.

Civ. 23752.

Decided: January 23, 1968

Bodkin, Breslin & Luddy, Michael G. Luddy, Harry A. Olivar, Henry G. Bodkin, Jr., Los Angeles, for appellants. Angell, Adams, Gochnauer & Holmes, San Francisco, for respondent.

Defendants appeal from judgment permanently enjoining them as hereinafter set forth and awarding plaintiff judgment for the sum of $27,841.00.

QUESTIONS PRESENTED

1. The court had jurisdiction to try the case.

2. The agreement of 1931 was still in effect.

3. Defendants' acts were not to accomplish a legitimate labor objective.

RECORD

The complaint was brought by plaintiff Consolidated Theatres, Inc. (Consolidated), owner and operator of the Royal Theatre in San Francisco, against Theatrical Stage Employees Union Local 16 (Local 16), an unincorporated association; E. C. Powell, its business agent, and Oscar Ryan, its business representative. The complaint alleged three causes of action, breach of contract, libel and tortious interference with the operation of business, all arising out of a labor dispute between Consolidated and Local 16. After a trial, the court found that Local 16 represents persons employed as stagehands at various theatres in San Francisco and that its members are sometimes referred to as ‘maintenance men’; that the agreement of March 6, 1931 between Local 16 and certain parties, including plaintiff, is now and has been ever since its execution, in full force and effect, but was breached by Local 16 on November 27, 1963; that Local 16's picketing activities hereinafter described were illegal and were an attempt to impose ‘featherbedding’ practices by said union and were an unlawful and tortious interference with plaintiff's rights; that the picketing placards carried by Local 16 pickets were libelous and untrue; that local 16's actions damaged plaintiff in the sum of $27,841, and that such actions should be permanently enjoined. Thereupon, the court entered judgment granting a permanent injunction restraining Local 16 from attempting to induce plaintiff to employ its members so long as plaintiff theatre is operated without a stage or stage performances, and granting plaintiff damages in said sum.

Although Local 16 filed timely notice of appeal from the judgment, it neglected to perfect the appeal. On motion of Consolidated, the appeal was dismissed. Thereafter, Local 16 petitioned the Court of Appeal to reinstate the appeal. The motion was denied. However, on petition for hearing in the Supreme Court, that court ordered the appeal reinstated.

THE EVIDENCE

This action arose out of a labor controversy between Consolidated and Local 16, resulting from the latter's demand that maintenance men be employed at Consolidated's Royal Theatre whenever it shows ‘first run’ pictures.

In the days silent pictures, Consolidated and other theatre owners, in addition to exhibiting silent films, employed musicians, organists and occasional singers. After the introduction of sound tracks with films, many theatres sought to eliminate musicians as employee. In 1929 a labor controversy arose in San Francisco between the Musicians' Union and various theatre owners. Other theatrical unions, including Local 16, joined in picketing the theatres, including the Royal. Local 16 then was and now is chartered by the International Alliance of Theatrical Stage Employees and is authorized to represent persons employed as stagehands and theatrical maintenance men.

In March 1931 Consolidated and another theatre owner filed a superior court action against a number of unions, including Local 16, and secured an injunction pendente lite prohibiting them from picketing the Royal and certain other theatres. A settlement of all controversies pending was reached by the parties. Local 16 did not enter into a formal writing, but ‘an understanding’ was reached with the theatre owners. Local 16 agreed that the terms embodied in a writing entitled ‘MEMORANDUM OF MISCELLANEOUS ELEMENTS THAT SHOULD ENTER INTO SETTLEMENT OF DIFFERENCES BETWEEN NASSER BROS.1 AND MUSICIANS UNION, ET AL’ correctly set forth its understanding. The memorandum stated in part that the injunction pendente lite would be made permanent. The action was dismissed March 16, 1931. The only reference in the memorandum to Local 16 (other than a reference to a release to be signed by it) or to employees represented by it appears in paragraph 8 which provides in pertinent part: ‘8. The following additional covenants are to be included as part of the adjustment * * *. (c) That no stage hand shall be required to be employed at the Castro Theatre. (d) That with reference to the employment of stage hands by the owners and operators of the Alhambra and Royal Theaftres, it shall be understood that the same conditions shall prevail as to each of said theatres as prevailed on March 1, 1929, namely, that if any stage presentations are offered for the public at the Alhambra Theatre, one stage hand shall be employed.’ No time deviation or limitation was stated in the memorandum.

Many years ago, Local 16 established a policy that certain theatres exhibiting first run movies would have maintenance men but that certain theatres which exhibited so-called ‘art’, ‘sex’ foreign and other first-run pictures, and theatres that ran subsequent-run movies need not do so. Although Royal at times ran first-run movies, it never hired maintenance men. This situation continued until 1963.

The stagehands or maintenance men used in the first-run theatres did certain repair work, inspected for fire and accident hazards and did other things to maintain the appearance of the theatre. Royal at no time, either before of after the memorandum, ever employed stagehands or maintenance men. Minor repairs, inspections, etc., were and are performed by the manager or assistant manager. Serious repairs are performed by independent contractors employing union labor.

At the time of the dispute in 1931 Royal had a small stage 6 to 8 feet in size, with no wings or scenery. The motion picture screen could not be removed. The theatre regularly had singers and occasionally kiddie shows on Saturday or Sunday afternoon, which consisted of single singing or dancing acts but no stage productions. Up to 1959 Royal could not obtain first-run pictures. From then through 1962 Royal sporadically showed first-run pictures. In 1961, in an effort to obtain a first-run status, the theatre theatre was completely renovated and the stage removed.

In January 1963, another first-run theatre operator complained that Royal had a competitive edge over other first-run houses which were hiring maintenance men, and Local 16 met with Consolidated, urging that maintenance men be employed at Royal whenever first-run pictures were used. Consolidated, which ran first-run pictures when it could get them, called attention to the memorandum which it considered to be still in effect. In November, Local 16 notified Consolidated that it was the only San Francisco theatre showing first-run pictures which did not employ maintenance men, and on Consolidated's refusal to employ such men, Local 16 placed informational pickets at the Royal. None of the union-member employees crossed the picket line. The theatre closed. On December 2, the picketing stopped. The theatre attempted to reopen. On December 7, the pickets were restored, remaining there until December 24, when the theatre reopened under a ‘second run policy.’

The pickets carried signs starting ‘This Theatre Does Not Operate on the Union Contract with Union Local 16 I.A.T.S.E. Theatrical Stage Union AFL and CIO.’ The theatre exhibited signs stating ‘Royal Theatre is being picketed due to the featherbedding demands of the Stagehands Union. All our employees are union members.’ The theatre ran ads in the papers to the same effect.

The court found that the labor controversy of 1931 was settled by the March 6, 1931 agreement to which the parties to this action were parties; that the agreement was valid is in full force and effect; that it provided that Consolidated need not employ stagehands or maintenance men at the Royal Theatre ‘so long as the same conditions continued to prevail at said theatre as prevailed on March 1, 1929.’ That the same conditions have prevailed there ever since; that maintenance men are not necessary or usable there, and the employment of them would constitute featherbedding; that Local 16 has breached the agreement continuously since November 27, 1963; that there is no difference in the requirements of the Royal Theatre ‘as to cleanliness, safety or any other incident of operation which depends on or is in any way related to whether the film being shown is first-run or subsequent run;’ that the placards carried by the pickets were intended to and did convey to persons who read them any or all of the following meanings: (2) that Royal Theatre has union employees concerning whom it refused to sign a union contract with Local 16; (b) that a labor dispute existed; (c) that Royal Theatre was employing non-union employees; (d) that Royal Theatre had necessary and useful work for Local 16 persons and was refusing to employ them for this work; that each of meanings was false, defamatory and libelous and was not a fair nor true statement; that because of such statements, Royal has been damaged by loss of patronage and good will; that Local 16's actions were conducted for an illegal purpose and constitute an unlawful and tortious interference with Royal's right to exhibit first-run pictures; that exhibition of first-run pictures at Royal constitutes interstate commerce and is an attempt by defendants, by means of word stoppage, to extort money from Consolidated by means of wages; that Consolidated has been damaged in the sum of $27,841. The court then found against defendants on their cross-complaint, alleging libel against Local 16 by Consolidated, and that Consolidated had truthfully asserted that defendants had demanded the hiring of unneeded personnel to fill nonexistent jobs.

The court thereupon gave plaintiff judgment for $27,841 and a permanent injunction restraining defendants from picketing or attempting to coerce plaintiff to employ persons represented by Local 16 and certain other actions, as long as Royal is operated without a stage or stage operations.

JURISDICTION

Defendants contend that while the superior court had jurisdiction to determine its jurisdiction in this matter, it did not have jurisdiction to proceed in the case, on the ground that federal statutes have pre-empted the field in labor relations so as to deprive state courts of jurisdiction to adjudicate controversies in that area.

As to the first cause of action, defendants contend that there is no contract between Consolidated and Local 16. Apparently Local 16 concedes that if the contract of 1931 was still in existence at the time of the picketing, the court would have jurisdiction to determine whether it had been breached.

Actions for breach of collective bargaining agreements are not pre-empted. In Retail Clerks Union Local 770, AFL–CIO v. Thriftimart, Inc. (1963) 59 Cal.2d 421, 30 Cal.Rptr. 12, 380 P.2d 421, 30 Cal.Rptr. 12, 380 P.2d 652, the court said: ‘Since both Thriftimart and MORE are engaged in interstate commerce, this litigation is within the purview of section 301(a) of the Labor Management Relations Act. (29 U.S.C. § 185(a).) The cases cited for the board's exclusive jurisdiction are not persuasive in view of the recent decision by the United States Supreme Court in Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 276, 9 L.Ed.2d 246 (1962). In that case an employee brought an action against his employer for damages resulting from the latter's alleged violation of a collective bargaining agreement. The trial court sustained the employer's motion to dismiss for want of jurisdiction on the ground that the allegations, if true, would make out an unfair labor practice and that therefore the subject matter was within the exclusive jurisdiction of the National Labor Relations Board. The Supreme Court reversed, holding that the pre-emption doctrine did not apply to cases arising under collective bargaining agreements, even though ‘the alleged conduct of the employer * * * concededly, is an unfair labor practice within the jurisdiction of the National Labor Relations Board. The authority of the board to deal with an unfair labor practice which also violates a collective bargaining contract is not displaced by § 301, but it is not exclusive and does not destroy the jurisdiction of the courts under § 301.’' (Pp. 423–424, 30 Cal.Rptr. p. 14, 380 P.2d p. 654.) Although the contract in the instant case, strictly speaking, is not a bargaining contract, it is contract between plaintiff and Local 16, and there has been no pre-emption of such contract by the National Labor Relations Act; the violation thereof, as hereinafter shown, not being a violation of that act.

Thus, the court had jurisdiction to determine whether there was a contract and whether it was breached.

1. Second cause of action.

As to the second cause of action, the rule is that ‘where either party to a labor dispute circulates false and defamatory statements during a union organizing campaign, the court does have jurisdiction to apply state remedies if the complaint pleads and proves that the statements were made with malice and injured him.’ (Linn v. United Plant Guard Wkrs. of Amer., Loc. 114, 383 U.S. 53, 55, 86 S.Ct. 657, 659, 15 L.Ed.2d 582, 584.) (Emphasis added.)

Plaintiff did allege that the placards which defendants displayed and which stated that Royal did not ‘Operate on the Union Contract with UNION LOCAL #16’ were maliciously composed and published and were a plaintiff was thereby injured. Thus, the conditions were alleged which Linn, supra, states are necessary to give the court jurisdiction to determine whether or not they were met by the proof.

The court had jurisdiction to consider the libel cause of action set forth in the second cause of action because that pleading met the requirements which were held kin Linn, supra, to be necessary to give a state court jurisdiction to hear a libel action against a union; namely, malice on the part of the union and injury to the plaintiff. However, the evidence in the court below fell short of proving the allegations of malice and injury. The evidence shows that the picking was for the purpose of what defendants erroneously considered to be a lawful labor objective, and the allegation on the placards of no union contract was based upon an attorney's advice that there was no contract in existence. The court made no specific finding of malice or of damages specifically directed to the effect of the libelous nature of the placards.2 All of the evidence that there was a loss of patronage and good will was that such loss was due to the picketing and to the fact that Royal's employees refused to cross the picket lines.

An examination of the record shows that actually there was no evidence offered or admitted to prove damage from the libel. The court's finding on damages reads: ‘That by reason of said demand and picketing activities, plaintiff has been damaged in the sum of $27,841.’ (Emphasis added.) What the court meant by ‘picketing activities' does not appear. It had previously found that the placards were ‘false, defamatory and libelous' and exposed plaintiff to ‘public scorn, hatred and ridicule.’ It is impossible to determine whether in the award of $27,841 any amount is included for the libel. As have pointed out, there being no showing and finding of malice, let alone no showing of damage referable to the libel, no sum could be awarded for the libel. As we cannot determine whether of not an award for libel was included in the judgment, the judgment will have to be reversed on the issue of damages.3

2. Third cause of action.

The test of whether federal statutes have pre-empted the field as to the matters set forth in the third cause of action so as to deprive the state court of jurisdiction to adjudicate those matters seems to depend upon whether defendant, in demanding what the trial court characterized as ‘featherbedding,’ was asserting a lawful labor objective, or one that arguably was prohibited by the National Labor Relations Act.

As said in James v. Marinship Corp. (1944) 25 Cal.2d 721, 155 P.2d 329 160 A.L.R. 900, ‘The federal act [the National Labor Relations Act] does not deprive a state of power to prevent unlawful conduct by labor unions where, as here, such conduct is not authorized or protected by the act.’ (P. 743, 155 P.2d p. 341)

Does the act protect featherbedding of the type in the case at bench? We do not think so, in view of the decisions in American Newspaper P. Ass'n v. National Labor Rel. Bd. (1952) 345 U.S. 100, 73 S.Ct. 552, 97 L.Ed. 842 and National Labor Relations Bd. v. Gamble Enterprises, 345 U.S. 117, 73 S.Ct. 560, 97 L.Ed. 864.

The so-called anti-featherbedding provision of the act provides: (Sec. 158, formerly sec. 8(b)(6)) ‘it shall be an unfair labor practice for a labor organization or its agents * * * ‘to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an exaction, for services which are not performed or not to be performed.’' Although a reading of this section indicates that it might cover the conduct of the union in the instant case, the United States Supreme Court has held in the two cases above cited that it is not an unfair labor practice nor a violation of the act for the union to require employment of employees whom the employer does not need nor want if the employees are to perform services, even if those services are not needed. According to the majority opinions in those cases, the act only applies when the union demands employment of ‘stand-by’ employees, that is, persons who are not to perform any work. Although Justice Clark in his dissenting opinion in Gamble Enterprises, supra, joined in by the Chief Justice (p. 127, 73 S.Ct. p. 565), calls services which the employer ‘does not want, does not need, and is not even willing to accept’ ‘boondoggles' the majority opinions in both cases hold that the act does not apply where the union ‘was seeking actual employment for its members and not mere ‘stand-by’ pay.' (Gamble, supra, at p. 123, 73 S.Ct. at p. 563)

No contention is made in the instant case that the union's purpose was to require Royal to employ ‘stand-by’ employees. Its purpose was to have persons employed to do work, although that work was not wanted or needed.4 Garmon v. San Diego Bldg. Trades Council (1955) 45 Cal.2d 657, 291 P.2d 1 is in point. That was a picketing to compel unionization of the plant—a matter clearly covered by the National Labor Relations Act. Thus, the National Labor Relations Act does not apply and there is no pre-emption.

3. The agreement of 1931.

Local 16 is bound by the agreement. The memorandum which constitutes the contract in this case was prepared by plaintiff's attorney and sent to Local 16's attorney. It was not the union's practice to enter into written agreements. The Nasser's attorney requested that Local 16's attorney obtain authority in writing from Local 16 to bind it to the covenants set forth in the agreement. This authority was given in the union's letter of March 6, 1931. Thereby the covenants se forth in the memorandum, undertaken by the attorney on plaintiff's behalf were adopted by the union. Pursuant to this agreement, legal actions were dismissed, releases exchanged and Local 16 made a public acknowledgment that all differences were resolved.

Although the agreement refers only to ‘stage hands,’ the discussions of the parties, the circumstance that stage hands in the first-run theatres were doing maintenance work, shows that it was contemplated that as to Royal, which had never employed stagehands of maintenance men, ‘stage hands' included maintenance men. Particularly is this so in view of the entries in the minutes of Local 16. Its minutes of February 12, 1931, showed that the parties to the labor controversy had met ‘in adjustments * * * [of] pending settlement of controversy in which our position was stated in event of settlement being made that if stage is used at the Alhambra or Royal Theatres, then a local of this union is to be used, that in the matter of maintenance, this would be left to further conference or adjustment.’ (Emphasis added.) After this meeting, the agreement was drafted and exchanged and agreed to. The agreement was entered into on March 6, 1931. The minutes of March 17 show that the president of Local 16 ‘gives a complete report of the settlement of the Nasser Brothers controversy to the membership.’ An announcement was made to the public by Local 16 that all differences between the employers and Local 16 had been resolved. Finally, the minutes of April 7 show that at the regular meeting of that date, a communication from the parent union, International Association of Theatrical Stage Employees, was received stating that the controversy ‘has been adjusted.’

Defendants contend that the agreement is silent as to how long it is to continue in effect and that it must be construed to mean that it is to exist for only a reasonable time, which they contend had long since expired. But the agreement does in effect express the time it is to exist—the duration of a contract is primarily a matter of intent of the parties and the circumstances under which the contract is made is to be considered. (Piedmont Publishing Co. v. Rogers (1961) 193 Cal.App.2d 171, 187, 14 Cal.Rptr. 133.) Bradner v. Vasquez (1951) 102 Cal.App.2d 338, 343, 227 P.2d 559, 562, quoting Miller v. Miller, 10 Cir., 134 F.2d 583 states as follows: ‘If, however, a period of duration can be fairly implied from the nature of the contract, its subject matter, and the relationship of the parties, the contract is not terminable at the pleasure of either party and the court will give effect to the manifest intent of the parties. 17 C.J.S. Contracts § 398.”

The agreement says, ‘The with reference to the employment of stagehands by the owners and operators of the Alhambra and Royal Theatres, it shall be understood that the same conditions shall prevail as to each of said theatres as prevailed on March 1, 1929, namely, that if any stage presentations are offered for the public at Alhambra Theatre, one stage hand shall be employed.’ (Emphasis added.) The agreement further provided for janitors and motion picture operators in all the theatres involved and placed a limitation of time upon the employment of musicians by on of the theatres involved. This fact indicates that the intention of the parties was that the other provisions of the contract were unlimited as to duration. The court may also look to the subsequent acts of the parties to ascertain their true intentions. (Anchor Cas. Co. v. Surety Bond Sav. & Loan Assn. (1962) 204 Cal.App.2d 175, 22 Cal. Rptr. 278.) For 32 years the parties indicated by their actions that as long as Royal did not have stage production, no maintenance men need be employed. Thus, it is clear that as to stagehands or maintenance men the agreement was to remain in effect as long as the conditions prevailing on March 1, 1929, existed. Those conditions, insofar as the question of employing maintenance men is concerned, still exist.

In view of the circumstances leading to the approval by Local 16 of the agreement of 1931, the implications in the wording of the agreement, and the actions of the parties, the court's interpretation that stagehands were not to be required at the Royal Theatre as long as conditions existing on March 1, 1929, existed is a reasonable one.

As stated in Universal Sales Corp. v. Cal. Press Mfg. Co. (1942) 20 Cal.2d 751, 760, 128 P.2d 665, 671: ‘The fundamental canon of construction which is applicable to contracts generally is the ascertainment of the intention of the parties (Civ.Code, § 1636), and in accordance with section 1638 of the Civil Code, the language of the agreement, if clear and explicit and not conducive to an absurd result, must govern its interpretation. * * *

‘As an aid discovering the all-important element of intent of the parties to the contract, the trial court may look to the circumstances surrounding the making of the agreement [citations], including the object, nature and subject matter of the writing [citations], and the preliminary negotiations between the parties [citations], and thus place itself in the same situation in which the parties found themselves at the time of contracting. [Citations.] Also applicable here is the familiar rule that when a contract is ambiguous, a construction given to it by the acts and conduct of the parties with knowledge of its terms, before any controversy has arisen as to its meaning, is entitled to great weight, and will, when reasonable, be adopted and enforced by the court [Citations.] The reason underlying the rule is that it is the duty of the court to give effect to the intention of the parties where it is not wholly at variance with the correct legal interpretation of the terms of the contract, and a practical construction placed by the parties upon the instrument is the best evidence of their intention.’ (Pp. 761–762, 128 P.2d p. 672)

Defendants contend that Zimco Restaurants, Inc. v. Bartenders, etc., Union (1958) 165 Cal.App.2d 235, 331 P.2d 789 is determinative of the length of the life of the contract of 1931. Zimco dealt with an agreement entered into in 1952 between certain restaurant owners and the Bartenders and Culinary Workers Union, the pertinent provision of which provided that an election should be held to determine whether the restaurant's employees desired to be represented by the union, and that if at the election the employees voted not to be so represented, the union for a period of three months would not make claims for representation, and that thereafter if such claim be made, the question should be solved by an election in the same manner as the first election. By 1956 all of the employees of Zimco were members of the union. The union notified Zimco that it terminated the agreement and sought a collective bargaining agreement. No time for the termination of the agreement was specified therein. Zimco claimed that the agreement was still in effect and demanded that, as provided in the agreement, an election be held to determine if the employees desired a collective bargaining agreement. The union contended that because no provision for termination was in the agreement, the union could and did terminate it. In affirming a trial court order denying Zimco an injunction to stop picketing by the union, the appellate court held the contract did not call for perpetual performance, thus requiring mutual consent to terminate but was one for an indefinite period and, therefore, terminable at will by either party. As said in Zimco at page 239, 331 P.2d p. 792, quoting from Miller v. Miller, supra, 134 F.2d 583, 588: “It is a fundamental and well recognized rule that in construing contracts, courts must look not only to the specific language employed, but also to the subject matter contracted about, the relationship of the parties, the circumstances surrounding the transaction, or in other words, place themselves in the same position the parties occupied when the contract was entered into, and view the terms and intent of the agreement in the same light in which the parties did when the same was formulated and accepted. [Citations.]” Also quoting from section 1643 of the Civil Code: ‘A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.’

In determining the intention of the parties in entering into the instant agreement, the circumstances which brought about the agreement and its terms must be considered. An injunction pendente lite against Local 16 had been issued and the case was about to go to trial on the claim for damages and for a permanent injunction. A settlement was negotiated under which the union, including Local 16, agreed that the injunction be made permanent.5 The only reasonable inference from this stipulation is that the parties intended the agreement to be permanent. For had the theatres obtained such permanent injunction,6 the effect would have been to perpetually enjoin Local 16 from demanding employment of its members as long as ‘the same conditions shall prevail * * * as prevailed on March 1, 1929.’ To hold that it was the intention of the parties to make the agreement terminable at will of either party would make the agreement meaningless. Plaintiff would have dismissed its suit, given up its right to an injunction, released the union of all claims and demands without any corresponding consideration. The union could have demanded employment of maintenance man the very next day.

It may very well be that the ‘dynamics of business and trade unionism make an interpretation of perpetual performance enforced by a permanent injunction impossible in the light of labor policies similar to those as set forth in California Labor Code section 923’ (Zimco Restaurants, Inc. v. Bartenders Union, supra, 165 Cal.App.2d 240, 331 P.2d 793), and that the right interpretation of the agreement is that it is, like many agreements providing for an indefinite term, terminable after a reasonable time has expired. If so, it could hardly be held that although a number of years has expired since the execution of the agreement, a reasonable time has elapsed in view of the fact that there has been no substantial change in circumstances either at Royal or at the other theatres in San Francisco. The situation as to the number of theatres employing maintenance men and the number of first-run theatres, as well as second run not employing them, has not substantially changed from the situation in 1931. Certainly if there has been no change of circumstances, it would be unreasonable to abrogate an agreement to bring about a situation not required of similar theatres which have no such agreement.

STATUTE OF FRAUDS.

In their reply brief, defendants for the first time raise the question of the applicability to the agreement of the statute of frauds (Civ.Code § 1624; Code Civ.Proc. § 1973). No objection to the introduction of evidence concerning the oral understandings of the parties, as well as the writing itself, was made. In fact, defendants themselves offered evidence on the subject. Failure to raise the issue in the trial court and permitting parol proof of the contract to be admitted without objection constituted a waiver of defendant's right to rely upon the statute. (Howard v. Adams (1940) 16 Cal.2d 253, 257, 105 P.2d 971, 130 A.L.R. 1003.) The exceptions to this rule do not apply to the instant case. In Ellis v. Klaff (1950) 96 Cal.App.2d 471, 216 P.2d 15, the court permitted the assertion of the statute of frauds on appeal for the first time, because a new trial had been ordered which the court stated restored the case ‘to the same situation as any other contested case prior to trial’ (p. 475, 216 P.2d p. 18) and hence the bar of the statute could be asserted. In Ellis v. Klaff, supra, at page 475, 216 P.2d at page 19, the court considered subdivision 4 of section 1624 of the Civil Code (the subdivision dealing with real estate contracts), although raised for the first time on appeal because ‘it is appropriate that the issue be determined upon this appeal in order, if possible, to reach a final determination of the controversy without the need for a retrial and possible additional appeal, with attendant expense and delay.’ No retrial will be necessary in the instant case.

The third cause of action alleged that defendants were guilty of tortious interference with plaintiff's operation of the Royal Theatre, that their demands and actions were attempts by defendants to extort money from plaintiff for unwarranted and superfluous services and violated Title 18, United States Code, section 1951 (Hobbs Antiracketeering Act) and were for an unlawful purpose.

That the Hobbs Act prohibits a union from compelling an employer to pay for ‘imposed, unwarranted and superfluous services' is held in United States v. Kemble, 198 F.2d 889 (3rd Cir.) cert. den. 344 U.S. 893, 73 S.Ct. 211, 97 L.Ed. 690 (1952); United States v. Sweeney (1959) 262 F.2d 272 (3rd Cir.); United States v. Green (1956) 350 U.S. 415, 76 S.Ct. 522, 100 L.Ed. 494.

4. Not a lawful labor objective.

However, the Hobbs Act only applies where the payment by the employer is induced by wrongful use ‘of actual or threatened force, violence or fear * * *.’ (See above cited cases.) The evidence in the instant case fails to disclose that the union used any such methods.

Although the third cause of action contains an allegation that defendants violated the Hobbs Act and the court so found, the gravamen of this cause of action and the one which is supported by the evidence is defendants' tortious interference with plaintiff's operation of the Royal Theatre for what is not a lawful labor objective.

It is clear that the picketing here was to require Royal to employ unneeded and unwanted help. No reason was given as to why theatres exhibiting first-run pictures were any different from those exhibiting subsequent-run pictures insofar as any necessity for employing maintenance men is concerned. Forcing cer tain theatres when they exhibit first-run pictures to employ maintenance men who are not required, or needed, when other theatres exhibiting first-run pictures and all theatres exhibiting subsequent-run pictures are not required to employ maintenance men is obviously featherbedding and unlawful. No good reason is shown for this discrimination. Picketing is lawful only if it is carried on by lawful means and for a lawful objective. (McKay v. Retail Auto. S. L. Union No. 1067 (1940) 16 Cal.2d 311, 106 P.2d 373; C. S. Smith Met. Market Co. v. Lyons (1949) 16 Cal.2d 389, 106 P.2d 414; James v. Marinship Corp., supra, 25 Cal.2d 721, 728, 155 P.2d 329.)

A case somewhat analogous to the one at bench is O'Shea v. Tile Layers Union (1957) 155 Cal.App.2d 373, 318 P.2d 102. There the plaintiff Tile Contractors Association refused to accept a contract provision that tile be installed with mortar and not by use of mastic adhesives. There was evidence that using mortar took more time. A neighboring employers' association had previously agreed to the requirement. The trial court granted a preliminary injunction on an alleged violation of the Cartwright Act after finding the mastic adhesive not to be inferior to mortar; in effect, finding that the union's objective was not ‘reasonably related to wages, hours or conditions of employment.’ (At p. 376, 318 P.2d at p. 105.)

In O'Shea the test of whether the union's action was reasonably so related seems to be whether the public interest would be served by the objective of the picketing. In the instant case the objective of the picketing was make work, as the services which the union desired its members to do had been performed by others for many years. It is difficult to see how forcing the employer to make unwanted and unneeded work would serve the public.

In Padden v. Local 90 United Ass'n of Journeymen Plumbers, 168 Pa.Super. 111, 82 A.2d 327, it was held that a complaint in trespass (intentional interference with contractual rights) alleging that the union's action in inducing a plumber to quit because the contractor put in iron bends instead of lead bends was only because lead bends took longer to install, stated a cause of action and a jury must decide whether the demands for make work were a legitimate objective. Here the trier of fact has found that the make work demanded was not a legitimate labor objective.

In James v. Marinship Corp., supra, 25 Cal.2d 721, 155 P.2d 329, holding that a closed shop cannot be enforced by a labor union which arbitrarily closed or partially closed union membership, the court held that picketing is lawful only if used ‘to enforce an objective that is reasonably related to any legitimate interest of organized labor.’ (At p. 728, 155 P.2d at p. 333.)

That there is not even an arguable showing that Local 16's purpose was a lawful union objective appears from the evidence. Defendants at no time represented any existing employees of the theatre nor were they seeking to represent such. The demand for placing maintenance men at the Royal Theatre was instigated at the request of the owner of one of the downtown picture houses, and in the first conversation between plaintiff and the union representative the latter stated that ‘he wanted to protect the downtown theatres' who ‘were being hurt’ because Royal when operating first-run pictures did not employ maintenance men. Other downtown theatres exerted pressure on the union to make demands on Royal. No reason is shown in the evidence why there is any difference in the matter of need for maintenance when a theatre shows first-run pictures and subsequent-run pictures. The union does not require maintenance men when second-run pictures are shown and in many instances when first-run pictures are shown. There are ten theatres which usually show first-run pictures and employ maintenance men. These are Market Street theatres. There is one Market Street theatre which usually shows second-run pictures and only employs maintenance men when showing first-run pictures. There are 18 so-called dis trict theatres which show first-run pictures predominantly or occasionally and do not employ maintenance men. Again, the evidence fails to disclose any more need for maintenance men at Royal than at the other district theatres.

Defendants attempt to distinguish 10 of the 18 theatres in the districts which exhibit first-run pictures as to which theatres the union does not require the employment of maintenance men by a specious and arbitrary designation of them as ‘art’ houses, and point out that they mainly exhibit sex, nude, and foreign films, although they do to some extent exhibit first-run Hollywood films. Defendants do not, however, show why theatres showing such alleged ‘art’ first-run films do not require maintenance men while a limited number of theatres showing first-run films do. Interestingly enough, in a letter to this court dated November 29, 1967, counsel for defendants, referring to 10 of the 18 above-mentioned theatres as ‘art houses,’ whose films are usually foreign produced with foreign language sound tracks, but also include ‘nude’ films and other comparable attraction refers to them as not seriously competitive with the type of films shown at the first-run theatres other than the ‘art houses.’ He also states that 7 of said 18 theatres have shown ‘combination first run features.’ The union is discriminating between certain first-run theatres and other first-run theatres on no reasonable or logical basis.

While, of course, the union, in addition to desiring to protect the downtown theatres from competition of Royal, also wants to protect its members in their jobs at the downtown theatres. But this cannot be a lawful labor objective because the evidence clearly shows that the work they do in most instances is unnecessary and part of a make-work project, to which the employers acquiesce under threat of being picketed. The classic instance of this occurred at the Stagedoor Theatre which had shown first-run pictures from 1946 on. In 1958 the union demanded employment of a stage hand maintenance man. To prevent the imposition of a picket line, the theatre employed a stage hand, although there was no work for him to perform. For 69 weeks he did nothing but sit on a sofa on the mezzanine. For two weeks of that time the theatre was required to give him two weeks vacation with pay. His replacement likewise sat on the sofa. Intermittently, for long periods at a time, although the Stagedoor was showing first-run pictures, it was not required by the union to hire a maintenance man. When required to employ such, the man did no work, simply sat on the sofa. At one time the theatre complained to the union and the latter agreed that the theatre need only employ a ‘half man,’ that is, a man for half a shift each day. The evidence shows that the Royal never had work for stage hands or maintenance men and that after a renovation in 1961 there was practically nothing for a maintenance man to do. The evidence shows that the purpose of the picketing by Local 16 was to protect the Market Street theatres from competition from Royal Theatre and to protect the union's members who are feather-bedding at the Market Street theatres. Neither purpose is a legitimate labor objective. This is the ‘crux’ (Directors Guild of America, Inc. v. Superior Court (1966) 64 Cal.2d 42, 45, 48 Cal.Rptr. 710, 409 P.2d 934) of the cause of action under the third count of the complaint.

In Kold Kist v. Amalgamated Meat Cutters (1950) 99 Cal.App.2d 191, 221 P.2d 724, it was contended that the purpose of the union in attempting to compel the plaintiffs to enter a certain contract with the union, was only to obtain uniform working hours for all employees. The court held, however, ‘the primary purpose of the defendants was and is to restrain and diminish trade in plaintiffs' products by preventing the sale hereof at times when the butchers are not selling the competing fresh foods and by this means to secure benefits for the union members through increased sales of fresh products.’ (P. 199, 221 P.2d p. 730.)

As we have pointed out, the contract may be of a type that could be terminated if there should be a change in the situation of the motion picture theatres in San Francisco from that prevailing on March 1, 1929. Therefore, the judgment ‘perpetually’ restraining defendants from the acts therein set forth is too broad. The judgment is hereby modified by striking from line 2 on page 51 of the clerk's transcript the word ‘perpetually’ and inserting in lieu thereof ‘until a change in the situation of the motion picture theatres in San Francisco from that prevailing in March 1, 1929.’ Jurisdiction is reserved in the superior court to determine when and if such change has occurred. The award of damages is reversed, and the case remanded to the trial court for the determination of the issue of damages alone.

In all other respects the judgment is affirmed.

FOOTNOTES

FOOTNOTE.  

1.  Nasser Bros. own and operate Consolidated, which owns and operates the Royal Theatre.

2.  The court did find that the placards were libelous. However, without proof and finding of malice the court had no jurisdiction to render judgment under the second count.

3.  However, the evidence supports the issuance of the injunction under the first and third causes of action—contract and tortious interference.

4.  This statement is true even though it is clear that at one time the members of Local 16 working at the Stagedoor Theatre did no work and were actually ‘stand-bys.’ Apparently the union did not offer them as standbys but the theatre could find no work for them to do.

5.  The agreement not only expressly stipulated that the injunction pendente lite might be issued ‘having precisely the same provisions therein which are now included in the injunction pendente lite,’ without requiring any bond, but further provided that a certain release to be given by the Nassers ‘shall not * * * release the right of the plaintiffs in the pending action to the maintenance of the injunction pendente lite which has heretofore been granted and to making that injunction permanent * * *’

6.  They did not think it necessary to obtain the injunction in view of the agreement of the union.

BRAY, Associate Justice.* FN* Retired Presiding Justice of the Court of Appeal, sitting under assignment by the Chairman of the Judicial Council.

DRAPER, P.J., and SALSMAN, J., concur. Hearing granted; Tobriner, J., not participating.