
    The Kirke La Shelle Company, Plaintiff, v. Paul Armstrong, Defendant.
    First Department,
    June 2, 1916.
    Contract — agreement to pay royalties to playwright—payment of royalties continued in reliance upon false representation that playwright was true author — limitation of actions — res adjudieata—judgment of Federal court establishing infringement of copyright—evidence —trial — failure to request that issue be submitted to jury.
    Where the plaintiff under a contract to pay royalties to the author of a play, was notified by another person that the play was an unlawful dramatization of a copyrighted story owned by him, continued to pay royalties on the assurance of the author of the play that the claim of the third person was false, and amounted to attempted blackmail, but said claimant subsequently established his rights in an action for an infringement of the copyright brought in the Federal courts, the Statute of Limitations on the plaintiff’s right to recover the royalties paid began to run, not from the time of the original contract with the playwright, but from the time it continued to pay royalties, relying upon his representations that he was the true author, and an action is timely when brought within six years of said representations.
    In such action the records of the Federal court were properly received in evidence to show that the fact that the playwright had plagiarized the story and was not the author, and also to show his participation in the Federal trial.
    It was proper to exclude testimony of witnesses who attempted to-testify upon the issues in the Federal action, as the judgment therein was res adjudieata against the defendant.
    The judgment of the Federal court in the infringement action necessarily established that the playwright knew that his representations were false, and that he knowingly plagiarized a copyrighted story.
    
      Where the defendant moved to dismiss the complaint and the plaintiff moved for a direction of a verdict, and after a denial of the defendant’s motion he did not ask to have any facts submitted to the jury, it was proper for the court to direct a verdict for the plaintiff.
    Reargument of the motion by the defendant, Paul Armstrong, for a new trial upon a case containing exceptions ordered to be heard at the Appellate Division in the first instance after the rendition of a verdict in plaintiff’s favor on a trial at the New York Trial Term in June, 1915.
    
      Phelan Beale, for the motion.
    
      Leavitt J. Limit, opposed.
   Page, J.:

The court directed a verdict and ordered the exceptions heard in the first instance at the Appellate Division. It transpired on the argument of the exceptions before this court on March 2, 1916, that the defendant had died after the rendition of the verdict and that an administratrix had been appointed, but was not represented before us. By appropriate proceedings she is now before the court and has appeared by attorney in open court and consented that the cause should be determined on the briefs and argument heretofore had. The facts briefly are that the defendant wrote a play entitled The Heir to the Hoorah.” On December 12, 1904, Kirke La Shelle entered into a contract with defendant whereby the defendant sold the play and all playing rights to Kirke La Shelle, who agreed to produce it on or before May 1, 1905, and to pay $2,500 down and $12,500 in installments of a specified amount for each of the seventy-five playing weeks that the play should be performed. On May 16, 1905, Kirke La Shelle died, having commenced the performance of the play and having paid defendant the amounts contracted to be paid up to that time. Thereafter his executrix performed the contract until the 11th day of July, 1905, when she sold and transferred the play to the plaintiff with the consent of the defendant, and plaintiff thereupon assumed the contract between the defendant and Kirke La Shelle and performed the same, paying the defendant installments to the amount of $9,328.60. In November, 1905, one Henry J. W. Dam notified the plaintiff by letter that the play “The Heir to the Hoorah” was an unlawful dramatization of his copyrighted story entitled “ The Transmogrification of Dan” published in “The Smart Set” for September, 1901, and forbade the plaintiff to further produce the play, and demanded an accounting. The plaintiff sent this letter to the defendant, who indorsed upon it “ The claim is preposterous — utterly and absolutely false. This letter, it seems to me, comes pretty close to attempted blackmail. Paul Armstrong,” and returned it so indorsed to plaintiff. Thereafter defendant insisted on the payments called for under the contract being made to him and the contract performed. Relying on these representations of the defendant that Dam’s claim was false the plaintiff continued to perform the play and paid to the defendant the remaining installments under the contract. Dam brought suit against the plaintiff in the United States District Court, and defendant’s attorney admits that the defendant was properly vouched in and took part in the defense.

The action resulted in a judgment wherein it was found that the play was an inf ringement of the copyright of the story and a judgment was awarded against plaintiff for $22,367.58. The decree was affirmed on appeal by the United States Circuit Court of Appeals. (See Dam v. Kirke La Shelle Co., 166 Fed. Rep. 589; affd., sub room. Dam v. Kirk La Shelle Co., 175 id. 902; 20 Am. Cas. 1173.) Plaintiff commenced this action against the defendant November 3, 1911, to recover among other things the said sum and $11,186.40 for expenses incurred in defending the suit. The judgment was settled for $8,000 and a supplemental complaint was served. At the close of the trial the plaintiff elected to stand on the second cause of action, to recover damages sustained by reason of the false representations made by the defendant after November 4, 1905, namely, the amount paid in settlement of the judgment and expenses in defending the suit in the United States court. The justice directed a verdict for $18,904.54 in plaintiff’s favor and the following exceptions are presented:

I. That the Statute of Limitations barred the action.
II. Improper amendment was allowed to the complaint.
III. In refusing to compel plaintiff to elect between two causes of action.
IV. Improper admission of the record of the United States District Court of Dam v. Kirke La Shelle Co.
V. Exclusion of the evidence of certain witnesses.
VI. That no fraud was shown.
VII. In directing a verdict.

The second and third of these require no discussion, as the trial justice properly exercised his discretion. We will consider the others.

I. The defendant assumes that the action was to recover for the original misrepresentation at the time the contract was made with Kirke La Shelle, whereas the cause of action upon which the verdict was directed was to recover for the damages sustained by the plaintiff in continuing the contract relying upon defendant’s false representations that he was the author of the play and that there was no foundation in Dam’s claim, and the action was to recover (in the last analysis) only for the damages that they had suffered from the suit of Dam. The action was brought within the six years from the making of these representations.

TV. The record in the United States court was properly received in evidence. It was shown thereby that the issue that was litigated therein was the same as that involved in this case, i. e., whether the defendant copied and plagiarized the story of Dam, or whether he was the author of the play as he claimed. It also showed the defendant’s participation in the trial.

V. The witnesses whose testimony was excluded attempted to testify upon the issue which had been settled in the United States court and was res adjudicata against the defendant.

VI. The defendant claims no fraud was shown, in that it was not proved that he knew the statements were false. But there could be no infringement of Dam’s copyright except the defendant copied and appropriated that story. A mere similarity of ideas would not be sufficient. The determination of the United States court necessarily found the fact that he had knowingly copied and plagiarized Dam’s copyrighted story after hearing this defendant and his witnesses.

VII. There was no disputed question of fact to send to the jury. The defendant moved to dismiss the complaint, and the plaintiff moved for a direction of the verdict. After his motion to dismiss the complaint was denied the defendant did not ask to have any fact submitted to the jury.

There was, therefore, no error presented by the exceptions. The defendant’s exceptions are overruled, with costs, and judgment directed to be entered upon the verdict as prescribed in section 763 of the Code of Civil Procedure.

Clarke, P. J., Laughlin, Scott and Smith, JJ., concurred.

Exceptions overruled and judgment directed to be entered on verdict. Order to be settled on notice. 
      
      See Dam v. Kirk La Shelle Co. (189 Fed. Rep. 842). —[Rep.
     