Gene v Republic

30 Cal.2d 144, 180 P.2d 888
Supreme Court of California, in Bank

GENE AUTRY
v.
REPUBLIC PRODUCTIONS, Inc.

May 23, 1947

SHENK, Justice. This is an appeal by the plaintiff from a judgment declaring the rights and obligations of the parties under contracts between them and in effect at the time of the plaintiff's enlistment in the United States Army in 1942.

Prior to his enlistment the plaintiff, Gene Autry, was a motion picture actor dramatizing western or cowboy roles. The defendant, Republic Productions, Inc., was a producer of western photoplays.

On September 22, 1938, the parties entered into a written agreement by which the defendant engaged the plaintiff's services as an actor in 10 photoplays during one year commencing July 1, 1938, the plaintiff to receive $6,000 for each of the first two, and $10,000 for each of the remaining eight. By paragraph 20 of the agreement four options were granted to the defendant, each of which, if exercised, would successively extend the contract for a year. Eight photoplays were to be produced each year. An annual increase of $1,000 per picture was also provided. Thus, in the year covered by the fourth option, the plaintiff's compensation for each photoplay would become $14,000.

*** Included in that agreement was a paragraph numbered 24, providing: ‘In the event that the Artist (plaintiff) 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.’

The plaintiff enlisted in the Army on July 26, 1942. At that time there remained five plays to be photographed under the third option. The plaintiff rendered no service to the defendant after his enlistment. ***

On June 17, 1944, the plaintiff served on the defendant a notice of termination of the agreements and employment thereunder by reason of military service. On June 27, 1944, while still serving in the armed forces, he filed the present action for a declaration of the rights and duties of the parties under their agreements. The trial court's decision was rendered in February, 1945, although not entered until March 20, 1945. The plaintiff's discharge from military service took place in July, 1945.

The judgment declares that the contracts between the parties had not been terminated; that the plaintiff's military service suspended performance for a time equal to the period of military service; that after his discharge from the Army the plaintiff would be bound to carry out the unperformed portion of the contracted employment by appearing in five and eight photoplays under the third and fourth options respectively of the 1938 agreement, and eight photoplays under the additional option of the 1942 agreement; and that no substantial burden would be placed upon the plaintiff by the completion of performance of the contracts following his discharge from military service. The court excluded from the force of the judgment the plaintiff's rights or privileges pursuant to section 2855 of the Labor Code limiting a contract of employment to a period of seven years. Also excluded from consideration herein is the possible obligation on the part of the defendant to re-employ the plaintiff as an ex-serviceman (Act of September 16, 1940, ch. 720, sec. 8, 54 Stat. 890, as amended, 50 U.S.C.A.Appendix, s 308). ***

The plaintiff places reliance in part on the doctrines of frustration and impossibility to sustain his contention that the court's conclusions and judgment are unsupported.

This court has recently considered the history and nature of the doctrine of frustration as an excuse for non-performance. Lloyd v. Murphy, 25 Cal.2d 48, 153 P.2d 47. There it was pointed out (25 Cal.2d at page 53, 153 P.2d 47) that although the doctrines of frustration and impossibility are akin, frustration is not a form of impossibility of performance. It more properly relates to the consideration for performance. Under it performance remains possible, but is excused whenever a fortuitous event supervenes to cause a failure of the consideration or a practically total destruction of the expected value of the performance. *** As stated in Lloyd v. Murphy, 25 Cal.2d at page 54, 153 P.2d 47, the purpose of contracts is to place the risks of performance upon the promisor. Without extended discussion, the foregoing authorities demonstrate that, strictly speaking, there is here not a failure of the consideration or the destruction of the value of performance in the sense contemplated by the doctrine of frustration. Furthermore, if the parties have contracted with reference to a state of war or have contemplated the risks arising from it they may not invoke the doctrine of frustration. Lloyd v. Murphy, supra, 25 Cal.2d at page 55, 153 P.2d 47, and cases cited.

‘Impossibility’ is defined in section 454 of the Restatement of Contracts, as not only strict impossibility but as impracticability because of extreme and unreasonable difficulty, expense, injury, or loss involved. Temporary impossibility of the character which, if it should become permanent, would discharge a promisor's entire contractual duty, operates as a permanent discharge if performance after the impossibility ceases would impose a substantially greater burden upon the promisor; otherwise the duty is suspended while the impossibility exists. (Section 462, Restatement of Contracts.) The trial court's judgment indicates that the controversy was resolved upon the theory of temporary impossibility and suspension due to military service. ***

The defendant contends that the notice of March 3, 1944, was in the exercise of certain privileges granted in the event of the plaintiff's failure to perform, and operated to extend the 1938 contract.

Paragraph 12 of that agreement provided that if the production of any photoplay in which the plaintiff was appearing or was scheduled to appear was necessarily prevented, suspended or postponed during the employment period by reason of fire, labor conditions, riot, war, act of God, or by the enactment of any law, municipal, state or federal, or other specified contingencies, the producer had the option to suspend the agreement during the continuance of such prevention, suspension or postponement without obligation to pay compensation during the period of suspension; but that if the period of suspension continued for four weeks, the plaintiff at his option might terminate the contract; or thereupon the producer might keep the agreement in force by electing to pay the plaintiff weekly at a rate specified.

Since there was no pretense of compliance with the terms of that paragraph, the defendant does not contend that the election to extend the period of performance was exercised pursuant to that provision. ***

Paragraph 14 stated the foundation for injunctive relief in the event of a breach of contract by the plaintiff, that is, in the event of the failure, refusal or neglect of the artist to perform or observe any of his obligations to the full limit of his ability or as instructed; or the defendant could terminate the agreement or the employment period, or extend the term of the agreement and all of its provisions for a period equivalent to the time during which such failure, refusal or neglect continued.

The right to injunctive relief in such event characterizes the failure, refusal or neglect encompassed within that paragraph as a voluntary failure, refusal or neglect on the part of the plaintiff, when otherwise he was in a position to perform services under his employment. It is no answer to say that the plaintiff enlisted, and that since his entry into the military service was in a sense voluntary, his ‘failure’ likewise was voluntary. His enlistment when his country was engaged in war may not be declared to be the voluntary failure, refusal or neglect to perform intended by the provisions of paragraph 14. *** Moreover, if paragraph 12 was intended to cover that contingency, then the defendant expressly refrained from proceeding thereunder, and the plaintiff's notice was an exercise of his right pursuant thereto.

Furthermore, if it is reasonable to conclude, as is indicated below, that the 1942 agreement was amendatory of and supplementary to the 1938 agreement, it may be said that paragraph 24 of the later agreement controlled the question of the defendant's rights in the event of the plaintiff's military service. That paragraph, being a specific provision governing the parties' rights on the happening of that contingency, is controlling over any general provision from which the defendant might have inferred some inconsistent right or privilege. Scudder v. Perce, 159 Cal. 429, 433, 114 P. 571; Restatement of Contracts, section 236(c).

The agreement *** contained the special provision (paragraph 24) that, in the event of military service by the plaintiff, the parties ‘will agree upon their mutual rights and obligations hereunder in view of such military service.’

It is the plaintiff's position that upon the happening of the contingency dealt with in paragraph 24, and in the absence of a new agreement concerning the parties' mutual rights and obligations, their relationship terminated. The defendant contends that the provision of that paragraph is meaningless and of no effect.

There is no dispute that neither law nor equity provides a remedy for breach of an agreement to agree in the future. Such a contract cannot be made the basis of a cause of action. *** But it does not follow that the provision of paragraph 24 has no meaning, nor any effect upon the parties mutual rights and obligations. That provision is not a naked agreement to agree. Being part of an undisputed contract between the parties, it must be given the meaning and effect which the written words and the conduct of the parties plainly indicate.

*** the provision which was included as paragraph 24 was accepted as a compromise, namely, that in the event the plaintiff entered military service the parties would leave for future agreement their mutual rights and obligations ‘in view of such military service.’ That the provision had meaning is disclosed by the conduct of the parties thereunder. Conferences were conducted in Chicago, and some preparations were undertaken looking toward photographing three plays after the plaintiff's entry into the armed forces. There is evidence that permission of the Army was obtained, although the compensation was required to go into the Army Relief Fund. The defendant offered to remunerate the plaintiff's wife for rental of horses and equipment, but the final outcome was a failure to agree and the pictures were not made. Subsequently there were unsuccessful attempts to negotiate a new contract between the parties to replace the outstanding agreements in the event of the plaintiff's discharge from the service. These attempts persisted until the filing of the present action.

It may be that the parties intended their agreements to remain in force during the period of military service. The language of paragraph 24 so indicates. Their conduct substantiates that mutual understanding. For instance, the request for a termination clause in the event of military service was based on the opinion of the plaintiff's attorney that military service would terminate the existing contract in any event. The compromise was reached in order ‘to leave the question open.’ The parties apparently intended paragraph 24 to bear upon their mutual rights and obligations ***. The trial court found that by reason of their acts and conduct both the plaintiff and the defendant recognized and acquiesced in the continuance of their contracts after the plaintiff's entry in the armed service, and at all times treated the contracts as valid, blinding and subsisting. ***

However, assuming, as the trial court concluded, that the plaintiff's military service constituted a temporary impossibility of performance, then it becomes necessary to determine the effect of paragraph 24 upon the rights and obligations of the parties following the plaintiff's discharge from military service. In this connection likewise the special provision must be given the force and effect intended, that is, as an abrogation of existing terms and a substitution of terms to be agreed upon in the event of military service; and any ineffectiveness inherent within it pertains only to the matter of its enforcement. The parties are not deprived of reliance thereon in the event of the happening of the contingency with which it expressly deals. On the contrary the special provision then becomes effective as a modification of their agreements. The mere failure to come to agreement did not operate to restore or revive the original terms which were abrogated.

It is clear that it was the intention of the parties to re-open negotiations and agree concerning their future rights and obligations in the event of the plaintiff's military service. That they so understood the effect of paragraph 24 upon their entire agreement is abundantly shown from the record of their conduct, including their attempts following the plaintiff's entry into military service to negotiate a contract which would be effective upon his discharge from military service. Implicit in their contracts was the mutual recognition that the plaintiff's artistic career and the quality of artistic performance might be affected by the passage of time. Their contracts stipulated the special, unique, unusual, extraordinary and intellectual nature and the special and peculiar value of the services to be performed by the plaintiff. The record shows that they were aware of the plaintiff's peak of popularity as a cinema actor; that his continued success and popular following depended on his special ability to enact cowboy roles; that the physical activity and agility required in the success of such roles indicated a limited period when the plaintiff might be at the peak of his performance; and that the loss of several years in military service might well affect the parties' mutual rights and obligations. These considerations, together with the great decrease in the purchasing power of the dollar, of which the court may take notice (Butler v. Allen, 73 Cal.App.2d 866, 870, 167 P.2d 488), and which had already commenced at the time of the 1942 agreement, would have a direct bearing on whether in their own opinion the parties should continue under the existing contracts or whether the contemplated services should be performed on different terms to be agreed upon.

*** Provision 24, ***, was intended to afford protection to both parties in the event of changes ensuing upon military service which might bear upon their mutual rights and obligations. The parties thereby consented that neither should be obliged to continue under a contract which might become inequitable. What specific changes were relevant or might create inequalities, it becomes unnecessary to determine. The parties took those factors into consideration and expressly undertook to agree thereon between themselves. They have written their contract. The courts will not rewrite it for them. Foley v. Euless, 214 Cal. 506, 6 P.2d 956. ***

The element of time in relation to the special nature of the services to be performed by the plaintiff, and as affected by the economic changes consequent upon the war, should be deemed to have a bearing on the question whether delayed performance would impose a substantially greater burden upon the plaintiff. The probative facts were found by the court; but the question whether those facts support its ultimate finding and conclusion that there would be no such burden is a question of law. Garrison v. Edward Brown & Sons, 25 Cal.2d 473, 478, 154 P.2d 377. Whether impossibility existed is also a question of law. Mitchell v. Ceazan Tires, Ltd., 25 Cal.2d 45, 48, 153 P.2d 53. The parties' contracts and their undisputed conduct, shown by the findings of the probative facts and otherwise by the record, indicate the substantial nature of the hardship in that respect. The trial court's conclusion that the plaintiff would suffer no substantially greater burden by delayed performance is therefore unsupported and in turn affords no support for the judgment.

From the foregoing it follows that the judgment should declare that in the absence of a new agreement to continue the relationship of the parties, there is no duty upon the plaintiff to perform services for the defendant after his discharge from military service.

The judgment is reversed.

GIBSON, C. J., and CARTER, TRAYNOR, and SCHAUER, JJ., concur.

This material was reprinted from Westlaw with permission of Thomson Reuters.