MINNESOTA TRIBUNE CO. v. ASSOCIATED PRESS, 83 F. 350

THAYEE, Circuit Judge, after stating the case ás above, delivered the opinion of the court. The briefs and arguments of counsel which have been filed in this case are principally devoted to a discussion of the proper

interpretation of the contract between the Associated Press and the Minnesota Tribune Company (hereafter termed the “Tribune Company”). On the part of the appellant, it is claimed that the ninth clause of the contract in express terms precludes the Associated Press from furnishing its news reports to the Journal Printing Company, its rival in business, because the latter company was not on. March 2, 1893, entitled to receive such news reports without the written consent of the Tribune Company. On the other hand, the appellee contends, and this view prevailed in the trial court (77 Fed. 354), that the ninth clause of the contract of March 2, 1893, is controlled by subdivision 2 of

article 7 of the by-laws of the Associated Press, relating to the admission of members, which provided, in substance, that newspapers which were entitled to a service of news on October 15, 1892, “under existing contracts with the Western Associated Press or the United Press,” should not be considered new members, but might be admitted to membership in the Associated Press without reference to that provision of the by-laws which requires the assent of the respective local boards to the admission of new members in the territory over which such local boards severally exercise jurisdiction.

It is claimed by the Associated Press that under the by-law it could lawfully admit the Journal Printing Company to membership without the consent of the Tribune Company, although the latter company was the only newspaper in the city of Minneapolis holding a press franchise in the Associated Press on September 27, 1894, because the Journal Printing Company on October 15, 1892, was entitled to press dispatches, both from the United Press and from the Western Associated Press, under then existing contracts, to which the Tribune Company was itself a party.

For the purpose of reaching a correct conclusion concerning the obligations imposed by the contract in question, it is clear, we think, that the contract should not be considered by itself, but should be construed in connection with the by-laws of the' Associated Press.

Eeference is made to the by-laws in the contract, and the seventh paragraph thereof expressly declares “that the rights, duties, and obligations of the parties hereto, except as herein-before specifically provided for, shall be controlled and governed by the by-laws of said party of the first part, now or hereafter in force during the life of this contract.” The necessary effect of this provision, of the contract was to make the subsequent provisions-thereof, including the ninth, subordinate to the b.v-laws.

But, taking a broader view of the case, we think it is obvious that the provisions of the by-laws relating to the admission of new members, and the provisions of the contract bearing on that subject, were intended to be harmonious, since it is hardly reasonable to suppose that the Associated Press intended to place restrictions upon its right to' admit new members in a particular locality that were contrary to general rules governing the admission of members which had been prescribed for other localities.

It must be held, therefore, that the language employed in paragraph 9 of the contract, on which the appellant company chiefly relies, cannot he construed literally, but is controlled and modified by subdivision 2 of

article 7 of the by-laws. Assuming the foregoing to be a correct view, the next question for consideraiion is whether the Minneapolis Times can he regarded as a newspaper which on October 15, 1892, was entitled to a service of news under existing contracts with the Western Associated Press or the United Press, within the fair intent and meaning of the by-law.

The facts pertinent to this inquiry, which are disclosed by the evidence, are as follows: When the Tribune Company, on June 29, 1891, entered into an agreement with the proprietor of the Minneapolis Times, whereby the latter paper secured the news reports of the Western Associated Press and the United Press for a period of three years, the Tribune Company was the owner of an exclusive news franchise for the city of Minneapolis in each of said news-gathering organizations.

The franchise theretofore granted to it by the United Press did not authorize the Tribune Company to sell the news reports which it received to any oilier newspaper, hut provided that it should be entitled to receive the night report of the United Press for publication in the Minneapolis Tribune, “and for no other purpose whatever.” Before the contract last referred to was executed, a conference was had between the Western manager of the United Press and a representative of the Tribune Company and a representative of the Minneapolis Times, at which conference the nature of the proposed contract between the two newspapers was made known to the Uni led Press, and its consent to the execution of the proposed agreement was obtained.

Buck consent was given, however, on condition that the Tribune Company should thereafter pay §90 per week to cover the extra expense of furnishing dispatches for both papers, in lieu of §75 per week, which it had theretofore paid. Immediately after this agreement was made and assented to, the United Press moved its telegraph instruments and operators from the office of the Tribune Company to the office of the Minneapolis Times, where the news dispatches of the United Press were thereafter delivered and received under the aforesaid arrangement until about July, 1898.

Tlie evidence does not show conclusively whether the Tribune Company had the right to sell the news reports of the Western Associated Press without the latter’s consent, but the fact is disclosed by the millonee that, before undertaking- to furnish such reports to the Minneapolis Times, it applied to the Western Associated Press for permission to do so, and obtained its consent.

It further appears that on October 15, 1892, and for some months thereafter, negotiations were pending- between the promoters of the present Associated Press, which liad not then been incorporated, and the United Press, with a view of dividing the United States between the two news-gathering associations, and enabling them to act in harmony with each other.

It was at first proposed, and an agreement to that effect was formulated, that tiie United Press should abandon the Western territory which it then occupied, and confine its operations to the country east of ttie Allegheny Mountains, while the new Associated Press should collect news in the Middle and Western states, and in most of the Southern states.

This scheme, which contemplated an end of rivalry between the two great news-gathering- associations, and the withdrawal of the United Press from much territory which it then occupied, had not been abandoned, but was still under consideration, on December 21, 1892, when the by-laws of the Associated Press were adopted; and it serves to explain, in a great measure, the provision found in subdivision 2 of

article 7 of its by-laws, heretofore quoted. It was doubtless supposed that in due course of time the United Press would vacate its Western territory, and that its old patrons in the West would desire to become customers of the Associated Press, and a provision was accordingly inserted in the .by-laws by which they might be admitted to membership without the consent of the local boards. In view of these facts, we are strongly inclined to the view that the Associated Press was at liberty to furnish its news reports to the Minneapolis Times without the consent of the Tribune Company.

The by-law to which reference has already been made is very broad, and does not, in terms, require that a newspaper should itself have entered into a contract with one of the news-gathering associations therein mentioned, to render it eligible to membership in the Associated Press without the consent of a local board.

It might with much reason be claimed that the peculiar language employed in the by-law was intentionally chosen so as to bring within its provisions newspapers that were receiving news reports from the Western Associated Press or the United Press on October 15, 1892, whether such service was being supplied under a contract with one of the associations, or under an arrangement with some third party who was entitled by contract to the news reports of either of said associations.

It is not necessary, however, on the present occasion, to adopt such an extreme view, since the evidence, as we think, fairly shows the existence of a tripartite agreement between the United Press, the Tribune Company, and the Minneapolis Times, under and by virtue of which the last-named paper on October 15, 1892, was directly supplied with news by the United Press.

It was essential that the United Press should have given its consent to the proposed contract between the Tribune Company and the Minneapolis Times, because the Tribune Company had no right, without such consent, to furnish the news reports of the United Press to- any other newspaper. The United Press did give its consent to that agreement, and received a consideration for so doing; and thereby direct contractual relations were established between the Minneapolis Times and the United Press, which were thereafter recognized and observed.

But another reason exists which is in itself sufficient to sustain the decree of the circuit court dismissing the bill of complaint. As has been heretofore stated, this is a suit to specifically enforce a contract of the Associated Press, by restraining it from violating one of the provisions of the contract.

It is questionable, to say the least, whether a court of equity could, in any event, grant the relief prayed for, because it is not clear that the damages which the Tribune Company will sustain by reason of the alleged breach are so far irreparable or difficult of ascertainment as to make the remedy at law inadequate.

But, waiving that question, it must be borne in mind that it is a well-established rule that courts of equity will not undertake to enforce an agreement if any of its provisions are so far indefinite or ambiguous as to render it uncertain what were the intentions of the parties, and what obligations they intended to assume. A suit for specific performance can only be maintained where the terms of the agreement are so precise that they cannot be reasonably misunderstood.

If the contract which a complainant seeks to enforce is vague or uncertain, a court of equity will not interfere, but will leave him to his legal remedy. Colson v. Thompson, 2 Wheat. 336, 311. And, where a contract is clearly susceptible of different reasonable

interpretations, a court of equity ought not to take the chances of decreeing its specific execution in a way which will possibly do violence to the intentions of the parties thereto. In all such cases, as well as where a contract is not fair and just in all its parts, or is tainted with illegality, the party seeking to enforce it should be remitted to his action for damages. Fry, Spec. Perf. §§ 317, 361, and cases there cited.

In view of what has already been said relative to the contract involved in the present suit, and the circumstances which attended its execution, and the by-laws under and subject to which it must be construed, we think that it must at least be conceded that the meaning of the contract, in the respect wherein a controversy as to its meaning has arisen, is beclouded with doubt and uncertainty.

It cannot: be said that the complainant has shown with the requisite certainty that the Associated Press is not entitled, under its contract with the Tribune Company, and under its by-laws, to furnish news reports to the Minneapolis Times, and that its action in that regard amounts to a breach of the agreement, because as good if not better reasons can be advanced in support of the contrary view, that the Associated Press reserved to itself, under its by-laws, the right to do precisely what it has undertaken to do, and is now doing.

Our conclusion is, therefore, that by reason of the difficulties encountered in construing the contract, and the doubtful and uncertain character of the right which the bill seeks to enforce, a court of equity is not the proper forum, and that such relief as the Tribune Company may consider itself entitled to can only be obtained at law. if we had not reached the conclusion heretofore announced, that the bill of complaint was properly dismissed, we should then feel compelled to consider a further question, which is not touched by the briefs or by the oral arguments; and that is whether a court of equity should in any event underlake to specifically enforce an agreement like the one at bar, which would seem to have an obvious tendency to create and perpetuate a monopoly of the news, by limiting the service of news reports to a single newspaper in a large city, and placing it within the power of the proprietor of such newspaper to prevent other newspapers from having access to the same sources of information.

The fact that counsel have not seen fit to raise or discuss this question, and the fact that the hill must he dismissed on other grounds, render it unnecessary to consider it, or to express any opinion thereon, The decree of the circuit court is affirmed.