Speelman v. Pascal

FACTS In 1952, the estate of George Bernard Shaw granted to Gabriel Pascal Enterprises, Limited, the exclusive rights to produce a musical play and a motion picture based on Shaw’s play Pygmalion. The agreement contained a provision terminating the license if Gabriel Pascal Enterprises did not arrange for well-known composers, such as Lerner and Loewe, to write the musical and produce it within a specified period of time. George Pascal, owner of 98 percent of Gabriel Pascal Enterprises’ stock, attempted to meet these requirements but died in July 1954 before negotiations had been completed. In February 1954, however, while the license had two years yet to run, Pascal had sent a letter to Kingman, his executive secretary, granting to her certain percentages of his share of the profits from the expected stage and screen productions of Pygmalion. Subsequently, Pascal’s estate arranged for the writing and production of the highly successful My Fair Lady, based on Shaw’s Pygmalion. Kingman then sued to enforce Pascal’s gift assignment of the future royalties. The trial court entered judgment for Kingman.

DECISION Judgment for Kingman affirmed.

OPINION Assignments of rights to sums that are expected to become due to the assignor are enforceable. To make a gift of such an assignment, the donor need only demonstrate a present intent to transfer irrevocably his right to the donee. Although at the time of the delivery of the letter there was no musical play or motion picture in existence, Pascal’s letter was intended to transfer irrevocably by assignment a percentage of the royalties from the future productions to Kingman. Therefore, the assignment is enforceable as a valid gift.

INTERPRETATION A gratuitous assignment becomes irrevocable upon the assignor’s making an effective delivery of the assignment to the assignee.

CRITICAL THINKING QUESTION Should the law enforce assignments of contractual rights not in existence at the time of the assignment? Explain.

Question 5 (20 marks) The table below shows the demand and supply schedules for milk in Cowland. A subsidy on milk of $1 per gallon is proposed and the government asks you to examine the effects of the subsidy. Price (dollars gallon) Quantity demanded Kuantity supplied per millions of gallons (millions of gallons per year) per year) 320 10 2240 1160 80 80 160 240 0 a) Draw the demand and supply curves. If there is no subsidy, what is the price of milk and how many gallons are sold? (5 marks) b) With the subsidy, what is the price that consumers pay? What is the price that sellers receive? How many gallons of milk are sold? (5 marks) c) Assuming no external costs and benefits, what is the efficient level of milk production? (2 marks) d) With the subsidy, what is the marginal social benefit from milk? What is the marginal social cost of milk? If the subsidy is introduced, will the level of production be efficient? Why or why (8 marks) not? THE END Cscanned with CamScanner