Boxoffice-January.07.1950

—
PERCENTAGE SUITS UPHELD
IN FEDERAL COURT RULING
Judge Nordbye Holds
Against View They
Are Unenforceable
MINNEAPOLIS — Percentage suits are
enforceable and distributor plaintiffs are
entitled to inspect defendants' books, according
to a ruling of U.S. District Judge
Gunnar H. Nordbye. The section on the
enforceability of percentage contracts is
regarded as an important precedent by distributors.
William and Sidney Volk, exhibitors,
brought suit against eight major distributors
the day after four of the distributors had
filed separate percentage fraud suits against
them in the same court. They made a motion
for separate advance trial, of their action
for a declaratory judgment that percentage
fraud claims are unenforceable and
for an injunction restraining the distributors
from attempting to enforce such claims.
INSPECTION PERIOD ALLOWED
In rejecting the Volk brothers' action,
Judge Nordbye granted a cross-motion of
the distributors for an inspection of the theatre
records of the plaintiffs, not only for
the period after the statutory court decision
in June 1946, in the antitrust case, but also
for the period from September 1941, as well.
The Volk action was similar to the 24-exhibitor
so-called Roth case just settled in
Pittsburgh.
Last month, by agreement of counsel, the
percentage suits of the distributors against the
Volks were merged with the latter's suit for
declaratory judgment and injunction, and
each of the distributor-defendants at the
same time filed counterclaims with their answers
for damages based on alleged underreporting.
Judge Nordbye's decision follows the lines
of the Roth case in 1945 and the decisions of
U.S. Judge Stone and U.S. Judge Moore in
1949 in the Miner cases in Wisconsin and
the Rogers and Shore cases in West Virginia.
Pointing out that there was no contention
that the distributor-defendants are now violating
the antitrust law. Judge Nordbye said:
"It seems clear that plaintiffs' only purpose
in seeking a declaratory judgment is to forestall
if possible defendants' request for an
inspection."
USE OF FINANCIAL DATA
As to the exhibitor-plaintiffs' claim that
financial data disclosed by the inspection
might be used by the distributors. Judge
Nordbye said: "Certainly, if these plaintiffs
are not guilty of fraud, they need not be
greatly concerned about the investigation of
theft- books and records, except the inconvenience
which may result and may be found in
any type of inspection under Rule 34 "
The motions were argued December 20 and
21 before Judge Nordbye by David Shearer
of the MinneapoUs law firm of Shearer,
Byard, Trogner & Peters, representing the
distributors, and by Benedict S. Deinard of
Leonard, Street & Deinard, representing the
exhibitors. Sargoy & Stein of New York were
counsel for the distributors.
Separated Para. Firms
Are Now in Operation
9 a. m. December 31.
In his statement. Balaban said: "Although
the consent judgment in U. S. vs. Paramount
provided that the reorganization be completed
by March 3, 1950, I am happy to an-
The final signing of papers that made two separate companies of what was formerly
Pairamount Pictures, Inc. Left to right: Leonard Goldenson, president of United Paramount
Theatres; Adolph Zukor, chairman of the board for Paramount Pictures Corp.,
and Barney Balaban, president of Paramount Pictures Corp.
NEW YORK—Paramount's new corporate nounce that it was consummated more than
setup went into effect December 31. On December
30 Barney Balaban made a formal
announcement on the dissolution of the old
Paramount Pictures, Inc., and the formation
of Paramount Pictm-es Corp. and United
Paramount Theatres.
The two new companies are so completely
separated that the theatre unit has a new
telephone number—LOngacre 3-1100. Paramount
Pictures retains the old number
BRyant 9-8700. These went into effect at
two months before that date."
Goldenson, as president of the new theatre
company, announced that the ending of joint
interests with certain co-owners of various
theatres, required by the consent judgment,
was still ahead of schedule. He said progress
was "highly satisfactory."
Because of the purchase of 1,057,720 shares
of common by the company on the open market,
the new distribution company started
with 3,263,276 shares. All the stock, purchased
between Nov. 11. 1946, and Dec. 30, 1949, was
canceled. The new theatre company's securities
are called certificates of interest for the
present. The total is the same as those of the
Paramount Pictures common.
Protestant Council Reports Films
'More Wholesome and Worthwhile
NEW YORK—Of 322 features previewed
during 1949 by the Protestant Motion Picture
Council 233, or 72 per cent, were classified as
suitable for both adults and young people.
Eighty-two were also singled out as recommended
for children.
The council states that this proves that
the industry "is succeeding in its endeavor
to give the public more wholesome and worthwhile
pictures."
Foreign as well as domestic films, documentaries
and those directly or indirectly
concerned with religious subject matter were
considered.
The council also chose 12 features, one for
each month, as "bests" for the year. They
were: "The Snake Pit" (20th-Fox), "Joan
of Ai-c" (RKOi, "The Boy With Green
Hair" iRKOi. "Command Decision" iMGM».
"Down to the Sea in Ships" i20th-Fox). "The
Stratton Story" (MGM), "Home of the
Brave" (UA\ "You're My Everything" (20th-
Fox), "Lost Boundaries" iFC\ "Christopher
Columbus" (U-Ii, "Jolson Sings Again" (ColK
and "Samson and DeUlah" (Para>.
Exceptional merit ratings were given to the
following: "Nanook of the North" (Royal
Pictures I, "Day of Wrath" (George Schaefer
Assoc, Inc.t, "Scott of the Antarctic" (EL),
"The Quiet One" (Mayer-BurstynK "The
Guinea Pig" (Variety Films), "Night Unto
Night" (WBi, "In the Good Old Summer
Time" (MGMi. "Roseanna McCoy" (Goldwyn-RKO).
and "Savage Splendor" (RKO>.
8 BOXOFFICE Januarj' 7, 1950