Uproar Company v. National Broadcasting Company

United States Court of Appeals for the First Circuit · 1936 · Corporations

81 F.2d 373 (1st Cir. 1936)

Updated August 22, 2026

Corporationscontractsequitable defensesliterary propertyunfair interferenceimplied covenant of good faith and fair dealingequitable defenseinjunction

Facts

The Texas Company contracted with Ed Wynn to perform weekly radio broadcasts advertising its goods, and contracted with National Broadcasting Company for broadcasting services and for Graham McNamee's participation and name rights. After the broadcasts became successful, the plaintiff, under arrangements with Wynn and others, published weekly pamphlets called "Uproar" containing Wynn's broadcast material and attempted to advertise them over the radio immediately after the corresponding broadcast. The Texas Company objected that publication would injure the advertising value of the broadcasts, and National Broadcasting Company objected to the pamphlets' use of the name "Graham," which referred to Graham McNamee. The district court found the pamphlets were cheap and flashy, could be attributed to the Texas Company, and could injure the effect of its advertising.

Issue

Whether the defendants could properly assert equitable defenses and obtain injunctive relief in advance of the action at law, and whether Wynn's scripts belonged exclusively to the Texas Company or instead remained Wynn's literary property subject to limits on publication. Also at issue was whether the plaintiff's publication and use of "Graham" unlawfully interfered with the defendants' contractual rights.

Rule

Equitable defenses are properly pleaded in an action at law when the plaintiff's alleged conduct is illegal or tortious, interferes with the defendants' property rights, relates to the subject matter of the action, and affirmative equitable relief such as an injunction is sought. Literary property in scripts prepared under a performance contract remains with the author unless an implied assignment arises from the contract, but the author may not exercise that retained right in a way that destroys or injures the other party's right to receive the fruits of the contract; every contract carries an implied covenant of good faith and fair dealing.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Boston, Harbor Flame Media sued Pine Street Audio and Silver Basin Fuel for damages, alleging they conspired to block Harbor Flame's planned radio ads for booklets based on a performer's sponsored broadcasts. In their answers, the defendants alleged Harbor Flame's sales campaign was tortious because it infringed their contractual property rights and sought injunctions barring the campaign.

Should the court treat the defendants' pleadings as proper equitable defenses that may be heard before trial of the damages action?

Explanation. The majority held that equitable defenses are properly pleaded in an action at law when the plaintiff's conduct is alleged to be illegal or tortious, to interfere with the defendant's property rights, to relate to the subject matter of the action, and when affirmative equitable relief such as an injunction is sought. In that situation, the trial court may determine the equitable issues first.