John G. Underhill, Respondent v. Joseph M. Schenck, Defendants, and Richard G. Herndon, Appellant

Summary

The Court held that the state courts have jurisdiction because the plaintiff's claim rests on a breach of fiduciary duty arising from the contract, not on copyright infringement. It affirmed that Herndon owed a fiduciary duty not to compete by producing motion pictures without Underhill's consent and limited his accounting liability to the amount the plaintiff would have received under the contractual percentage if picture receipts were combined with stage receipts. Accordingly, the final judgment ordering a full accounting was reversed and the interlocutory judgment was modified to reflect the limited accounting.