Opposition Brief — Vargas v. Esquire, Inc.

No 57

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Supreme Court of the United States

Ocroszr Tzem, 1947.

ALBERTO VARGAS,

vs.

Petitioner,

ESQUIRE, INC.,

Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI.

/ . Envwarp R. Jounston,

James A. Sprow.,

Counsel for Respondent.

Auan R. JoHNsTON,

Of Counsel.

Scheffer Printing Company, Del. 7171

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- 2 ei PEE ETN EN IIT

SUBJECT INDEX.

PAGF

Statement of the Case 1

Argument ; 5

I, The review by the Circuit Court of Appeals of this

case was in accord with Rule 52(a) of the Fed-

eral Rules of Civil Procedure as interpreted by

this Court in U. S. v. U. S. Gypsum Co., 68 Sup.

Ct. 525, 92 L. Ed. 556, and in accord with the

decisions of the Circuit Courts of Appeals. ..........

II. Petitioner has advanced no reason for granting

certiorari cognizable under Rule 38(5) of this

CG, << sebiinintnnidistnshcnsdtpitisneienidiininbslinincaevexeenitentiinhintiione

Ill. The order of the Circuit Court of Appeals re-

manding the case with directions to dismiss the

complaint was & Proper OTP ...........cssssseseesseeeeees

lt et

TasLe or Cases CITEp.

Becker v. Loew’s Inc. (7th Cir., 1943), 183 Fed. (2d)

a TA winhccsinceciisehiceninseinsieb ais ainigadbionatintieatiansensaviontanin

Bell v. Porter, (7th Cir., 1946) 159 Fed. (2d) 117, at

SEMEN Rete Renee Sidi duiighasaitacateipsenidibanidiiiassnie

Borgardus v. Comm. of Int. Rev., (1937) 302 U. S. 34,

OE Bs BOG. Ch, Gh s GE De, Tb, BD vvscesscsesssenmcnnsrconanersezs

Bordner v. Kelso, (1920) 293 Ill. 175; 127 N. E. 337 ....

Boyar v. Krech, 73 P. (2d) 1218, 1220; 10 Cal. (2d)

a ca ia iad cdl dled acl gibi iechcninananmasananinnhipicienn ee

Bundeson v. Lewis, 368 Ill. 623, at 633; 15 N. E. (2d)

a Naa al aa eene manne tae ae tadiasliniaininiin

Doheny v. Lacey, (1901) 168 N. Y. 213; 61 N. E. 256 ....

Exmoor Country Club v. U. S., (7th Cir., 1940) 119

SO I WS GGT nna’ Nossersesinainionnanjaetiiesanigessbasistntnosiasenre

11

ORR PFS

ore Tier enn Fe

ii

PAGE

Finney v. White, 389 Ill. 374; 59 N. E. (2d) 869 ........ 9,10

Guffey v. Washburn, 382 Ill. 376; 46 N. E. (2d) 971... 10

Higgins v. Chicago Title and Trust Co., (1924) 312 Ill.

eee? Sg 5 ee ea ee ee 10

Johnson v. Lane, 369 Ill. 135; 15 N. E. (2d) 710 ............ 9

Morel v. Masalski, 333 Ill. 41, at 47; 164 N. E. 208 ........ 14

Ogilvie v. Knox Mach. Co., 59 U. 8. 577; 18 How. 577;

EE ee a EER 8

Stewart v. Sunagel, 394 Ill. 209 ; 68 N. E. (2d) 268 ........ 9

U. S. v. Anderson, (7th Cir., 1939) 108 Fed. (2d) 475,

TBs Bec AE LS ok) CI RC Bite BR ee cna Ee 9

U. S. v. U. S. Gypsum Co., 68 Sup. Ct. 525, 542; 92 L.

aE eee tele eeeteeenee 5, 8, 11

Upton v. Trebilcock, 91 U.S. 45, at 50; 23 L. Ed. 203 14

TABLE oF STaTUTES AND Court Ru tes Cirep.

Rules of Civil Procedure for the District Courts, 28

U. 8. C. following § 723(c), Rule 52(a) ............ 5, 9, 10,11

Rules of Supreme Court of United States, 28 U.S. C.

following § 354, Rulle 38(5) .......ccscssessscencneesenenneeneens ll

IN THE

Supreme Court of the United States

Ocroser Term, 1947.

ALBERTO VARGAS,

Petitioner,

vs.

ESQUIRE, INC.,

Respondent.

RESPONDENT’S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI.

STATEMENT.

Petitioner, Alberto Vargas, has lived continuously in

the United States for the past 32 years (R. 42). The

trial court found that he writes, understands and speaks

English very well. (Findings 6, 43; R. 776, 781.) Vargas

commenced working for Esquire in June of 1940 under a

written contract for three years, at a salary of $75.00 per

week, (PIf’s Ex. 1; R. 711-713, 52) Vargas agreed to de-

vote his entire time exclusively to Esquire. The contract

provided that Esquire might sell drawings made by Vargas

to outsiders, and, in the case Equire so elected, that Var-

gas would be paid, in addition to his salary, 50% of the

net receipts from the sale of such drawings to outsiders.

Under this contract, Esquire had an option to renew for

an additional three years commencing with July 1, 1943

iia

for a salary of $150.00 per week; and in case of such rp.

newal, Vargas was to receive 60% of the net receipts from

any Vargas drawings which Esquire might elect to sell to

outside companies. (R. 712)

Vargas’ drawings, as published by Esquire, were sue

cessful and popular, and a harmonious association devel.

oped between Vargas and Esquire. Vargas earned under

his first contract $8,225.00 for the year 1941 (Defd’s Ex.

21, R. 736) and a similar amount for the year 1942 (Defd’s

Ex. 21, R. 737, 739). Vargas continued to work under his

first contract until it expired on June 30, 1943. He was

told that Esquire would not exercise the option but would

work out and offer him a new contract more favorable

than if the option had been exercised (R. 82, 452).

Vargas continued to draw his salary of $75.00 a week

during the last half of 1943, but in addition asked for

and was given cash advances for various purposes. In

particular, Vargas, in June, 1943, requested that Esquire

advance him enough money to enable him to bring his

elderly mother and his sister from Peru to the United

States for a visit, which he stated would require $5,000.0

(R. 79-80). Esquire accordingly advanced him the $5,

000.00 and Vargas’ mother and sister made the visit (R.

289-290, 348). Primarily because of this unusual advance,

Vargas had, at the end of 1943, been advanced by Esquire

$5,699.80 more than he would have received had he been

paid strictly under the terms of his expired contract.

(Finding 14, R. 777.) In order to wipe out Vargas’ in

debtedness preparatory to making a new contract, a for-

mula was worked out by Esquire which credited Vargas

with salary and other compensation for the year 1943 sufi-

cient to wipe out this indebtedness and leave a small bal-

ance of $565.85 owing to Vargas, which was paid him.

ink Gite

(Finding 14, R. 777.) Because of this extra compensation,

which was tantamount to a bonus, Vargas’ earnings for

the year 1943 were $15,242.59, or almost double his earn-

ings for the previous year. (Def’s Ex. 21, R. 738, 616.)

Commencing January 1, 1944, Esquire began to pay

Vargas a salary at the rate of $1,000.00 per month (R.

82-83). On May 23, 1944, the parties signed their second

contract, the one here involved (Plf’s Ex. 2, R. 713-715,

100), which was by its terms retroactive to January 1,

1944. This contract in effect provided for Vargas a salary

of $1,000.00 a month for the first eighteen months, with sys-

tematic increases periodically, the final compensation be-

ing $1,500.00 a month for the last eighteen-month period.

The contract ran for ten and one-half years. Under it

Vargas agreed to furnish Esquire twenty-six drawings

each six months; to work exclusively for Esquire; and to

furnish no art work for anyone competing with Esquire

for three years after the termination of the contract. In

addition to the foregoing payments, Vargas was to receive

¥, of 1% of the gross receipts received by Esquire from

the sale of any calendars, playing cards or other by-prod-

ucts on which Vargas’ art work was used. The names

“Varga’’, ‘‘Varga Girl’’, and ‘‘Varga, Esq.’’, which

names had been previously used under the first contract,

were to belong exclusively to Esquire.

The contract was typewritten on letter size paper,

double-spaced, and only three and one-half pages in length.

All parts of the contract as to which Vargas now com-

plains were read to him before he signed it (Findings 31,

55, R. 779, 783); and, in addition, he was handed the

contract and he and his wife, who handled his business

affairs (R. 181, 217), had an opportunity to read it over

and study it before it was signed (Finding 44, R. 781).

pune Nee

Vargas signed the contract, and for nearly two years,

or until January, 1946, received his compensation and per.

formed his work in accordance with its terms without any

complaint or protest whatsoever (Finding 54, R. 783).

In fact, after it had been in force for a year and a half,

he himself testified that he told Esquire’s president he was

well satisfied with it. (RB. 121-122.) His earnings under

the new contract for 1944 were $13,827.87, slightly leas

than the total amount he had received from Esquire in

1943. His 1943 payments, however, had included the non-

recurring item of $5,000.00 advanced to him to bring his

mother and sister to the United States. Vargas’ earnings

under the new contract for 1945 were $15,245.83, which

exceeded his earnings for 1943. (Def’s Ex. 21, R. 740-

741.)

During the two years that Vargas worked under his

new contract, Esquire continued to make him advances oa

request; and the relations between Esquire and Vargas

were quite as cordial as they had been previously.

Suddenly on January 10, 1946, Vargas, after consulting

a lawyer, came to David Smart, President of Esquire, and

complained that his basic salary under the contract was

too small. (R. 126-131.) He testified he asked Mr. Smart

to write him’a new contract under which he would be

‘*happy’’. (R. 135.) Upon Mr. Smart’s refusal to grant

this request, Vargas rejected the contract and has furnished

no drawings to Esquire since that fime. (R. 132.)

Although the trial court concluded as a matter of law

that David Smart, president of Esquire, stood in a fiduciary

relation to Vargas (Conclusion 1, R. 784) and that the

contract should be cancelled, (R. 784, 785) it was respond-

ent Esquire’s contention in the Circuit Court of Appeals

that the testimony presented wholly failed to support the

Court’s conclusions. For this reason respondent Esquire’s

statement of facts in the Circuit Court of Appeals followed

the testimony of the Vargases and assumed that it was

true, except in those instances where the trial court made

express findings contrary to Vargas’ contentions. The

District Court, for example, found against Mr. Vargas as

to the most sharply disputed issue of fact in the case,

namely, the date on which the disputed second contract was

signed. Vargas and Mrs. Vargas testified that it was

signed on May 23, 1945, (R. 95-96, 201-202, 299, 349)

but the Court found (Finding 29, R. 779) as contended

by respondent’s witnesses, that the contract was actually

signed on May 23, 1944. The effect of this finding of the

District Court was to show that Vargas had worked and

been paid under the questioned contract without protest,

for a year and eight months after it was signed, and not

merely eight months as Vargas claimed.

a

Respondent’s contentions, that the evidence and findings

wholly failed to support the decree, were upheld by the

Cireuit Court of Appeals, which said:

‘*We are not unmindful of the fact that the trial

judge heard and saw the witnesses and that his decree

should not be disturbed unless clearly erroneous; ney-

ertheless, under the circumstances here appearing,

measured by the applicable law, we think the decree

is without evidence to support it; hence, it should not

be allowed to stand.”’ (R. 805)

Petitioner has summarized in his petition some of the

trial court’s findings (Pet’n p. 9, 10) in fifteen numbered

paragraphs. The findings summarized by petitioner in

paragraphs 1, 2, 6, 7, 8, 9, 10, 12 and 13 were not disputed

in either court below but are of no significance to petition-

er’s case. Some of them show that Vargas was well ani

generously treated by Esquire, particularly in the matter

of cash advances against future earnings, but this is

scarcely a matter to be held against Esquire.

Respondent contended in the Circuit Court of Appeals

that the other findings listed by petitioner (paragraphs 3,

4, 5, 11, 14 and 15) were not supported by the evidence, or

that they were erroneous conclusions of law.

Some of these ‘‘findings’’ go entirely beyond any testi-

mony in the case. There is no testimony that the Vargases

(Par. 4) always consulted Mr. Smart about their apart-

ments or furnishings; their own testimony is that while

at times they did, on other occasions they chose apart-

ments and furnishings without consulting him (R. 252,

336, 264). The court’s finding that David Smart was a

‘‘frequent visitor’’ at Vargas’ apartment (Par. 5) fails

to point out that Vargas’ home or apartment was also his

studio, where he drew his pictures; and is scarcely sup-

a e

ported by testimony that Smart did not visit the studio

as often as once every two months. (R. 340) Indeed Mra.

Vargas testified: ‘‘There were times when he would come

two or three times in succession to see how the work wus

progressing ; there were times when he didn’t come for

months.’’ (R. 340). It is certainly not extraordinary that

Mr. Smart called at the studio of one of his key artists five

or six times a year, if he did, to see how a picture was

progressing.

The Circuit Court of Appeals rejected as “clearly er-

roneous” the lower court’s conclusory finding challenged

by respondent, that Mr. Smart took an “unusual interest”

in everything pertaining to their lives. (Par. 3) Mrs. Var-

gas had herself characterized Mr. Smart’s interest in her

husband and herself as follows: ‘‘He seemed to take a

friendly interest in us.’’ (R. 348) It was respondent’s

contention that a friendly interest in a key artist under

contract is hardly peculiar, and does not give rise to a

fiduciary relation. The Court of Appeals agreed that

Esquire and its president had a legitimate interest in

Vargas; in seeing that he had an agreeable place in

which to do his work; and in seeing, if they could, that

the wants and desires of his artistic temperament were

satisfied. (R. 800, 801)

The trial court’s finding that David A. Smart “had

complete control of the work done by plaintiff for de-

fendant to be sold by others,” and that plaintiff for his

earnings from said work necessarily depended on the

judgment of Mr. Smart (Par. 11), failed to point out

that all this was according to the plain terms of Vargas’

frst contract with Esquire, which contract was never at

any time questioned by him. Under that contract, all art

work drawn by Vargas, the employee, belonged to Es-

ee oy

saab:

quire, the employer. When and if any was sold to ont.

siders, Vargas received his percentage, strictly under the

contract (Pif’s Ex. 1, R. 711-713). No claim is made that

he did not always receive what he was entitled to.

The conclusions summarized in paragraphs 14 and 15

(Pet’n, p. 10) to the effect that David Smart invited and

had the special trust and confidence of plaintiff far be.

yond that ordinarily existing between employer and em.

ployee (Finding 23, R. 779) and that at the time of the

signing of the contract plaintiff did not act as a “free

agent’’ (Finding 38, R. 781) are not proper findings of

fact. They are properly conclusions of law, which have no

presumption of correctness in the reviewing court, and

were properly labeled conclusions of law by the trial

court. (Conclusions 1 and 5, R. 784.) The Cireuit Court

of Appeals in discussing the trial court’s conclusion of

fiduciary relationship referred to it as a conclusion of

law. ({R. 799, 801.) At most, the conclusions that a

fiduciary relation existed here and that petitioner did not

ect as a free agent are conclusions of mixed law and fact.

As pointed out by this Court in the early case of Ogilvie

v. Knox Mach. Co., 59 U. S. 577, 18 How. 577, 15 L. Ed.

490, the question of the existence of fraud is always a

mixed question of law and fact.

It is well established, as recently held by this Court in

U. 8. v. U. 8S. Gypsum Co., 68 Sup. Ct. 525, 542, 92 L. Ed.

556, that in an equity action such as this, where the facts

are found by the Court without a jury, an Appellate

Court is not bourd by the determinations of the District

Court on a mixed question of law and fact. Other cases

announcing the same rule with regard to the scope of re-

view of questions of mixed law and fact are Bogardus v.

Comm. of Int. Rev. (1937), 302 U. S. 34, at 39; 58 S. Ct.

— - oe ———

61, 82 L. Ed. 32; Bell v. Porter (7th Cire., 1946), 159 Fed.

(2d) 117, at 120; Exmoor Country Club v. U. 8. (7th Cir.,

1940), 119 Fed. (2d) 961, at 963; Becker v. Loew’s Inc.

(7th Cir., 1943), 133 Fed. (2d) 889, at 894; U. 8. v. An-

derson (7th Cir., 1939), 108 Fed. (2d) 475, at 479.

Furthermore, the finding of a fiduciary relation is e. .a

more clearly one of law, or, at most, of mixed law and

fact under the law of Illinois, which holds that a fiduci-

ary relation may never be established, except by ‘‘proof

clear, convincing and so strong as to lead but to one pos-

sible conclusion’’. Stewart v. Sunagel, 394 Tl, 209, 68 N.

E. (2d) 268; Finney v. White, 389 Til. 374, 59 N. E. (2d)

859; and Johnson v. Lane, 369 Til. 135, 15 N. E. (2d) 710.

Whether the proof of fiduciary relation in this case was

indeed so clear, so convincing and so strong ‘‘as to lead

to but one possible conclusion’? was properly for the

Cireuit Court of Appeals to decide as to a question of law,

or of mixed law and fact. Although this Illinois rule as to

degree of proof in a case of this type is undisputed, the

trial court appears to have wholly disregarded it; at least

the trial court failed to include: such rule among its

conclusions of law.

It is therefore clear that the District Court’s conclusions

of law or of mixed law and fact as to the existence of a

fiduciary relation, and that there was fraud in the execu-

tion of the contract were not binding upon the Circuit

Court of Appeals, and in reaching contrary conclusions

the reviewing court was acting within its proper powers

of review as prescribed by Rule 52(a) of the Federal

Rules of Civil Procedure. It therefore did not apply or

construe Rule 52(a) contrary to the decisions of this court

or of other circuits, as petitioner contends.

—

As the Circuit Court of Appeals held, the evidence in

the record, together with the proper findings of eyi-

dentiary fact not found to be “clearly erroneous’’ show-

ing a friendly business relationship between David Smart

and Vargas, do not establish under Illinois law a rela-

tionship of special trust and confidence. Finney v. White,

389 Ill. 374, 59 N. E. (2d) 859.

Similarly, evidence of belief in the honesty and integ-

rity of a close and intimate friend has been held in-

sufficient to establish a fiduciary relation. Higgins v. Chi-

cago Title and Trust Co. (1924), 312 Tl. 11, at 18-19, 143

NE 482; Bordner v. Kelso (1920), 293 Ill. 175, 127 N. E.

337. And evidence of employer-employee and debtor-cred-

itor relationships is not sufficient to create a fiduciary rela-

tion. Doheny v. Lacy, (1901) 168 N. Y. 213, 61 N. E. 255;

Guffey v. Washburn, 382 Tll. 376, 46 N. E. (2d) 971.

It is readily apparent that the Circuit Court of Ap-

peals did not, as petitioner contends, try the ease de novo

and overrule all of the trial court’s findings of fact. It

obviously accepted most of the trial court’s evidentiary

findings; but found some of the findings discussed herein

clearly erroneous, and concluded that the high water-mark

of plaintiff’s evidence, viewed in the light of the supported

findings of the District Court, did not, as a matter of law,

establish a fiduciary relation by that high degree of proof

required by Illinois law. The Circuit Court of Appeal’s

conclusion (R. 801) that a fiduciary relationship did

not exist between plaintiff and David A. Smart, as a

matter of law, was of course, clearly in accord with Rule

52(a), which does not limit in any way the reviewing

court’s right to set aside conclusions of law of the trial

court.

a }

And even if these conclusions all be treated as pure find-

ings of fact, the Circuit Court of Appeals was authorized

by rule 52(a) to reverse them; for under the decisions

of this court, the Circuit Court of Appeals has a clear

right to set aside findings of evidentiary fact made by the

District Court, if on a review of the entire record, the

Cirenit Court of Appeals is convinced the lower court’s

findings are wrong. In the case of U. S. v. U. S. Gypswm

Co., 68 Sup. Ct. 525, this court said that rule 52(a) au-

thorized reviewing courts, in all actions tried upon the

facts without a jury, to ‘‘reverse findings of fact by a

trial court where ‘clearly erroneous’”. This court also

said: “A finding is ‘clearly erroneous’ when, although

there is evidence to support it, the reviewing court on the

entire evidence is left with the definite and firm conviction

that a mistake has been committed.’”’ (Emphasis added).

The action of the Circuit Court of Appeals was clearly

in accord with the rule.

II.

Petitioner has advanced no reason for granting certiorari

cognizable under rule 38(5) of this court.

Opposing counsel suggests that by the reversal of the

District Court some injustice may have been worked.

They talk of Vargas’ virtual ‘‘slavery’’ for ten and one-

half years under this contract. A condition of slavery

which provides to the slaving party an average salary of

$15,000.00 per year over the period of the contract, (Def’s.

Ex. 25, R. 750, 556) plus a probably average $5,000.00

additional per year from the sale of by-products, (R.

413) is at least the type of slavery for which many promi-

nent commercial artists are searching.

ee Ee a

J

—=- 19.

Petitioner seeks to create the impression that he was

overworked under the terms of the contract. He states

(Pet’n, p. 5) that it ordinarily took him from ten days to

two weeks to complete a drawing, although he did not

so testify at the trial and the Court made no such finding,

On the contrary, the Court found that in 1944 plaintiff

produced for respondent 49 drawings, (Finding 47, R.

782) without making any complaint at the time that he

was overworked. This was at the approximate rate of

one picture a week. Vargas also was able to get away

for his usual month’s vacation in 1944, as was his annual

custom during his association with Esquire. (R. 182) In

addition to the 49 drawings, Vargas testified that in the

same year he had sufficient time to make ‘‘very many”

original pictures to send to the boys in service overseas,

(R. 195.)

Petitioner’s statement that the new contract doubled his

work is also incorrect. Under both contracts it was ex-

pected that he would devote his entire time to the produe-

tion of pictures for Esquire. No particular number of

pictures was specified in Vargas’ first contract, this being

unnecessary since he was an employee, required to de-

vote his entire working time to Esquire. But as an in-

dependent contractor under the second contract, it was

necessary to stipulate as to the number of pictures re-

quired. However, the record shows that the number of

pictures produced under the second contract was not sub-

stantially larger than under the first contract (Finding 7,

R. 782), considering the additional number of pictures

Vargas drew for sale to outsiders under the first contract.

(R. 34)

Petitioner is again grossly inaccurate when he states

that his pay under the second contract was to be less than

he had received the last previous year of employment. As

——— - aaa 4

—~ JZ —

pointed out in our statement of the case, Vargas in 1943,

as the result of Esquire crediting to him sufficient money

to wipe out his overdrafts, received $15,242.59. (Def’s. Ex.

21, R. 738) It was during that year, however, that he

received the extraordinarily large advance of $5,000.00 to

bring his mother and sister from Peru to the United

States. He could scarcely have expected to receive such

an advance again during the next year. In the first year

under the second contract Vargas earned a total of $13,-

827.87 (Def’s. Ex. 21, R. 740), and in the second year he

earned $15,245.63 (Def’s. Ex. 21, R. 741). Each year there-

after his earnings would have necessarily increased, be-

cause of the sliding scale of earnings.

It is inaccurate to state, as petitioner does (Pet’n p. 5)

that he was required under this contract to give up the use

of his name at the end of the contract. The agreement pro-

vided that the names ‘‘ Varga’’, ‘‘ Varga Girl’, and ‘‘ Varga-

Esq.’’ were to belong exclusively to Esquire. These were

coed names, theretofore adopted and copyrighted by

Esquire for use in connection with the publication and pro-

motion of Vargas’ art work. Petitioner’s name is and has

always been ‘‘Vargas’’. At the end of the contract he,

of course, was free to use his name in connection with his

work and to advise that he had drawn the ‘‘Varga Girl’’

pictures for respondent’s magazine. He would in that way

reap substantial benefit from the advertising and promv-

tion he had received during his association with Esquire.

There is no evidence in the record to support the trial

court’s speculation (Finding 46, R. 781) that if the plain-

tiff had understood the terms of the contract he would

not have signed it. Furthermore, the finding is without

legal significance since the trial court found that Vargas

and his wife, who was born in the United States and

BSS ae

handled his business affairs, were “both capable of read.

ing and understanding the English language at the time

of the execution of the contract’’ (Finding 43, R. 781),

and “that prior to the signing of the contract the plain.

tiff was requested by David Smart to read the contract,

and both the plaintiff and his wife had an opportunity to

read the contract before the plaintiff signed it as a party

and his wife signed it as a witness’’. (Finding 44, R. 781)

It is well settled under Illinois law that unless a per.

son’s signature to a contract is secured by some fraudulent

trick, which was not here contended, he cannot complain

that the contract does not contain what he expected, when

he is capable of and has the opportunity to learn of its

provisions by reading it. Bundeson v. Lewis, 368 IIl. 623,

at 633, 15 N. E. (2d) 520; Upton v. Trebilcock, 91 U. §.

45, at 50, 23 L. Ed. 203; Morel v. Masalski, 333 Ill. 41, at

47, 164 N. E. 205.

In the instant case the Court, by implication at least

(Finding 33, R. 780), found as a fact that Smart read

the contract to Vargas down to the third paragraph. No

complaint is made by Vargas that Smart misread or mis-

represented the first two paragraphs of the contract. The

only terms of the contract about which the Court found

Vargas made complaint up to the time of filing suit (Find-

ing 55, R. 783), namely, the amount of basic salary and

the number of pictures to be produced, were contained in

the portions of the contract read to Vargas. Vargas tes-

tified that Smart gave him the contract and told hin,

‘*You can go over there and check up on what I say”,

and that he, Vargas, sat down with the contract in his

hand ‘‘to see what was what.’’ (R. 99.) This admission

on the part of Vargas eloquently demonstrates the ab-

sence of an essental element of fiduciary relationship, i. e.,

ns

witli

reliance by the subservient party on the dominant party.

Vargas admitted he was by himself with the simple three

and one-half page (letter size) double-spaced typewritten

contract in his hands for at least five minutes. (R. 101.)

Vargas’ own witness, Mr. Bartizal, testified that Var-

gas was asked, after studying the contract for some time,

whether he was ready to sign the contract and that he

answered ‘‘Yes’’. (R. 679.)

It is difficult to imagine what David Smart could have

done to inform plaintiff of the terms of the contract other

than what he did. He read to plaintiff the salient provi-

sions of the contract, including all of those provisions ob-

jected to by plaintiff at the time of repudiation. He

asked him whether or not he had any questions concerning

the provisions read to him. (R. 494). Vargas replied

that he had none. (R. 494.) He requested Vargas to

read the contract himself, and his United States born wife,

who handled many of his business affairs, was given an

opportunity to read the contract. (Finding 44, R. 781.)

It was our contention in both the trial court and the Cir-

cuit Court of Appeals that even if a fiduciary relation was

assumed to exist, still the defendant had met the burden

east upon it of showing that the contract was fairly

entered into.

Petitioner now asserts that the action of the Circuit

Court of Appeals, in holding him bound by a simple three

and one-half page contract, with no fine print; a contract

which petitioner willingly signed, after it was read to

him, and after he and his wife had checked it over; a con-

tract which petitioner has already performed for two

years with admitted satisfaction; a contract under which

he has earned over $15,000 a year and under which he

ay ru

me Nee

must necessarily earn at least $18,000 a year, in addition

to his percentage bonus, is a ‘‘gross miscarriage of

justice.’’

We submit, on the contrary, that any other result would

permit petitioner to walk out from under his obligations,

and appropriate for himself alone, all the benefits of the

tremendous promotional work which he had admittedly

received from Esquire. While petitioner would under-

standably prefer to do less work and receive even more

money than his contract provides, his own testimony

demonstrates the contract to be fair; and no effort what-

ever was made on the trial to show that Vargas’ services

were actually worth more than he had received under the

contract in question. We submit that not only the law, but

the equities of this case lie with the respondent, and that

the decision of the Circuit Court of Appeals is manifestly

just.

Ii.

The order of the Circuit Court of Appeals remanding the

case with directions to dismiss the complaint was a

proper order.

All of the relief sought by petitioner in his complaint

was based on the fundamental premise that the court

would declare the contract null and void. When the re-

viewing court by its decision declared the contract bind-

ing and in effect, all of the other relief sought by peti-

tioner fell. The Circuit Court of Appeals was entirely

correct in describing this action as one to declare null

and void or to set aside the contract. This was unmis-

takably the relief sought by the complaint. Therefore, the

Circuit Court of Appeals’ order, remanding this case with

directions to dismiss the complaint, is a proper order.

onc.

Petitioner’s prayer for relief asks (a) that the contract

be declared null and void; (b)that the plaintiff recover,

on the theory of quantum meruit, the reasonable value of

pictures furnished by plaintiff to defendant as part of his

1946 quota; (c) that plaintiff have an accounting; (d)

that defendant be enjoined from interfering with or pre-

venting the-employment of plaintiff by others; and (e)

that plaintiff have such other general relief as might be

deemed proper. (R. 13.)

Considering the relief sought, it is apparent that no ques-

tions are left for determination now that the contract has

been found to be valid and in effect.

Since the contract has been found to be in force, plain-

tiff has no right to be paid on a quantum meruit basis, for

pictures delivered under the contract as is sought in subsec-

tion (b) of the prayer for relief. All pictures have been

paid for in accordance with the provisions of the contract.

Furthermore, even under the decision of the trial court

cancelling the contract as of January 10, 1946 (R. 785)

plaintiff was not entitled to any of the relief sought under

this subsection. During 1945 plaintiff delivered to de-

fendant no more than his quota of drawings. (Finding

47, R. 782; Def’s. Ex. 27, R. 751-753, 586) Plaintiff was

compensated under the terms of the contract up to the

end of 1945, and no pictures were furnished by plain-

tiff to defendant thereafter.

Plaintiff is not entitled to an accounting, as sought

under subsection (c) of his prayer for relief. The terms

of the contract governed entirely the measure of his com-

pensation. Defendant’s Exhibit 21, Record 735-742, con-

tains a complete statement of account from July 1, 1940

to March 31, 1946. A subsequent statement of account

was furnished to petitioner’s counsel on May 12 1947,

———-

ith.

which showed the status of Vargas’ account with Esquire

as of March 31, 1947, and which also represents the status

of plaintiff’s account with defendant as of the present

time. The accuracy of these statements of account haye

never been questioned by plaintiff.

The relief sought under subsection (d), namely, that

defendant be enjoined from interfering with or prevent.

ing plaintiff from working for others, is also based on the

assumption that plaintiff’s contract with defendant would

be voided. When plaintiff advised defendant that he would

deliver no additional pictures, as alleged in his complaint

(R. 12), he was acting on the advice of counsel that his

contract was voidable. Since the Circuit Court of Appeals

reached the opposite conclusion, it must be assumed that

the plaintiff will now elect to perform the contract rather

than breach it. As alleged in our answer (R. 26), it is

unnecessary for plaintiff to seek work from others, since

the defendant stands ready to accept performance from

him under the contract here in question. The only real

controversy here was whether or not the contract was

valid and binding, which question has been fully decided

by the opinion and judgment of the court below.

Where the court has found the issues against plaintiff

in a declaratory judgment suit, after a full hearing on the

merits, it may either enter a decree so determining the

rights of the parties, or a decree dismissing the complaint,

Which form of decree is entered is a mere matt

which will not be rever

P. (2d) 1218, 1220; 10 Mal. (2d) 207.

intiff complains that the dismissal of

the complaint does not give him a declaration of rights.

This is not so The opinion of the Circuit Court of Ap-

peals is a cgfiplete declaration of the rights of the parties.

In essence the

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ins peaes

It becomes a mere matter of form as to whether the com-

plaint should be dismissed or the trial court should enter

a formal decree reiterating the declaration of rights by

the Circuit Court.

This court will not grant certiorari merely to correct

the judgment of the court below as to a matter of form.

CONCLUSION.

It is respectfully submitted that the petitioner has

shown no reason for the granting of a writ of certiorari

to the Circuit Court of Appeals to review this case, and

the issuance of the writ should be denied.

_ Respectfully submitted,

Epwarp R. Jounston,

James A. Sprowu,

Counsel for Respondent.

Auaw R. Jounston,

Of Counsel.

a