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U.S. Supreme Court

Partmar Corp. v. Paramount Pictures Theatres Corp., 347 U.S. 89 (1954)

Partmar Corporation v. Paramount Pictures Theaters Corp.

No. 17

Argued October 13, 1953

Decided February 8, 1954

347 U.S. 89


Paramount leased a theater and granted a franchise to Partmar to exhibit first-run films of Paramount pictures, both for terms of ten years. The lease provided that it was terminable at Paramount's option if the franchise agreement "be cancelled or terminated for any reason whatever." In an antitrust suit by the Government against Paramount and others, a Federal District Court held that such franchise agreements were the product of an illegal conspiracy and enjoined their enforcement. Paramount then notified Partmar that it was terminating the franchise agreement because of the injunction and that it was terminating the lease because of termination of the franchise agreement. Partmar refused to vacate the theater, and Paramount sued in a Federal District Court to obtain possession and for a declaratory judgment that the lease had been properly terminated. Partmar answered, setting up various defenses, and filed counterclaims seeking treble damages resulting from a conspiracy respecting the franchise agreement in violation of the Sherman Act. Paramount's suit and the counterclaims were separated for trial. After this Court had overruled the District Court's finding that such franchise agreements violated the Sherman Act, the eviction suit was tried and the District Court found no substantial evidence of a conspiracy respecting the franchise agreement, and entered judgment for Partmar, but it also dismissed Partmar's treble-damage counterclaims, with prejudice and without trial. Partmar took no appeal from the District ,Court's judgment in the eviction suit, but it appealed from the judgment dismissing the treble-damage counterclaims.

Held: collateral estoppel bars further litigation by the parties of the issue of conspiracy in violation of the Sherman Act, and the judgment dismissing the counterclaims with prejudice is sustained. Pp. 347 U. S. 90-103

(a) A prior judgment between parties operates as an estoppel in a suit on a cause of action different from that forming the basis for the original suit only as to those matters in issue or points chanrobles.com-red

Page 347 U. S. 90

controverted, upon the determination of which the finding or verdict was rendered. P. 347 U. S. 91.

(b) The District Court did not err in dismissing Partmar's counterclaims with prejudice and without a separate trial as to their merits, and such dismissal did not deprive Partmar of due process of law. Pp. 347 U. S. 100-103.

(c) The power remained in the trial court until entry of its final judgment to set aside, for appropriate reasons, the former order for the separate trial of the counterclaims. P. 347 U. S. 100.

(d) A separate trial on the counterclaims would have been an improper procedure, as the judgment entered in Paramount's suit was a final disposition of the determinative issue on the counterclaim -- whether or not the terms of the lease were the product of an illegal conspiracy. Pp. 347 U. S. 100-101.

(e) Partmar was not prejudiced by the failure of the District Court to consider either the judgment or the decree in the Government's antitrust suit as evidence of the conspiracy alleged in the counterclaims. Pp. 347 U. S. 102-103.

200 F.2d 561 affirmed.

In a suit by respondents to declare a lease properly terminated and to regain possession of a theater, the District Court decided that issue in favor of petitioners, but dismissed petitioners' counterclaims for treble damages under the antitrust laws. 97 F.Supp. 552. The Court of Appeals affirmed. 200 F.2d 561. This Court granted certiorari. 345 U.S. 963. Affirmed, p. 347 U. S. 103.


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