Leo Feist, Inc. v. Young

• Decision Date: 25 August 1942
• Docket Number: 252,248,273.,247,No. 167,167
• Parties: LEO FEIST, Inc., v. YOUNG and four other cases.
• Court: U.S. District Court — Eastern District of Wisconsin

46 F. Supp. 622

LEO FEIST, Inc., v. YOUNG and four other cases.

Nos. 167, 247, 248, 252, 273.

District Court, E. D. Wisconsin.

August 25, 1942.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

E. S. Hartman, of Chicago, Ill., and Robert A. Hess, of Milwaukee, Wis., for plaintiffs.

Wright & Mayer, of Milwaukee, Wis., for defendants Wiley Young and Theodore Suszka.

Winter & Koehler, and Orville S. Luckenbach, all of Shawano, Wis., for defendant Victor Felts.

Jacob S. Rothstein, of Milwaukee, Wis., for defendant Joseph Molitor.

Patrick A. Dewane, of Manitowoc, Wis., for defendant Joe Pekel.

SCHWELLENBACH, District Judge.

By stipulation these cases were consolidated for trial. In each instance the plaintiffs, who are the owners of copyrights of certain popular songs, seek under title 17 U.S.C.A. § 25 to enjoin the defendants from infringement of their copyrights and each seeks damages in the sum of $250. The defendants all reside in the State of Wisconsin and each of them operates a tavern at which liquor or food is dispensed and music is played for the enjoyment of the guests. While in some of the cases effort was made to contest plaintiffs' testimony, the evidence in each case, coupled with the stipulations filed in some, proves conclusively that the defendants did, on the dates alleged in the various complaints without being licensed so to do by the copyright owners, play the copyrighted pieces named in such complaints. Prior to the commencement of each of the actions, each defendant received notification from the plaintiffs' agent that unless he desisted from making public use of the copyrighted music, action would be commenced for injunction and damages. The testimony shows that each of these plaintiffs is a member of the unincorporated association known as the American Society of Composers, Authors and Publishers (Ascap). Since 1927 Ascap has maintained an office in the City of Milwaukee, Wisconsin. Robert A. Hess is its representative within the State of Wisconsin. The arrangement made between these publisher plaintiffs and some 1,500 other composers, authors and publishers of copyrighted musical works is that each transfers and assigns over to Ascap the nondramatic public performance rights in and to the musical compositions copyrighted by such member. Ascap exists by virtue of the laws of the State of New York and its principal place of business is in the City of New York. Ascap has the exclusive right, under its agreements with its members, to license to any individual or corporation engaged in providing entertainment, upon payment of royalties in accordance with rates established by it, the right to publicly perform for profit the copyrighted musical works the licensing rights to which have been assigned to Ascap. The procedure used in the State of Wisconsin is that Mr. Hess has a small crew of solicitors and investigators who visit the various establishments where music is played for profit and, in those instances where music, the licensing rights to which have been assigned to Ascap, is played, they attempt to negotiate a licensing contract with the offending establishment proprietor. A regular series of form letters is sent out. Success in the negotiation of a contract results in the fixing of the license charges to be paid by the establishment upon the basis of a national formula promulgated in New York. Mr. Hess passes upon the correctness of the terms of such contracts, authorizes the agent or solicitor to have the contract signed by the licensee and to collect the first payment of money. This money is deposited in the bank in the name of Ascap at Milwaukee. The actual signature on behalf of Ascap prior to 1935 was affixed by Mr. Hess. After that, the contracts were sent to Chicago for signature. Mr. Hess testified that there had only been two or three cases on which the terms of the contracts approved by him had even been questioned by the Chicago office. Up until 1935, Ascap had its name on the door of Mr. Hess' office in Milwaukee. It was then removed. However, all of the notices which are sent out to licensees within the State are on Ascap letter heads showing the address of Ascap's Wisconsin office, payments of license fees are made to Ascap in Milwaukee. The official publication of Ascap showing the various offices maintained throughout the United States lists the one in Milwaukee. The contracts are wholly performed in Wisconsin. The solicitors and investigators are employed in Wisconsin, work in Wisconsin and are paid by Ascap in Wisconsin.

While these actions have been commenced in the names of the various plaintiffs, the real party plaintiff is Ascap. That this is true was made clear by the commendable frankness of the witness Hess when called adversely by defendants. He stated he had no connection with these plaintiffs, was never employed by any one of them. He was employed by Ascap to prosecute these actions, the costs were advanced by Ascap, any moneys collected upon the judgments would be retained by Ascap. He testified that the prime objective of these actions was to enable Ascap to force these defendants and other tavern operators in Wisconsin to sign license agreements with Ascap and to maintain the respect for Ascap and its rights under the copyright law so that others will respect the property rights of Ascap. He testified that if the court did enter judgment against these defendants, he would make no serious effort to collect the amount of the judgments. He said that he hadn't collected any judgments since 1935. He would use the judgment and decree for the purpose of forcing the defendants to enter into license agreements with Ascap or to stop playing Ascap music.

The defendants rely upon Chapter 177 of the Wisconsin statutes for their defenses in these cases. That statute, adopted in 1935 and amended in 1937, is printed in its entirety in the footnotes.¹ It is a tax statute which requires any person, firm, association or corporation other than the true or original composer of a copyrighted musical number which seeks to issue licenses for the public rendition of such numbers first to obtain a license from the State of Wisconsin, to file certain information with the Secretary of State, and to pay a tax equal to 25 per cent of the gross revenue received by it from such licenses in the State of Wisconsin. Violation is declared to be a misdemeanor punishable by fine. It also requires investigators employed by such persons, firms or composers to be licensed. Failure to comply with this provision is also a misdemeanor punishable by fine. Defendants' excuse for failure to secure licensing agreements from the plaintiffs was that neither the plaintiffs nor Ascap had complied with Chapter 177 and they feared that they might be charged with violation of the Wisconsin conspiracy statute, Wisc. Stat. 348.40, should they enter into such license agreements. They each asked for injunctive relief to prevent the plaintiffs from interfering with their rendition of copyrighted music. They asked this relief not only for themselves but for all persons in Wisconsin in a situation similar to theirs.

Defensively, the defendants advance three propositions:

First, that they are under the restraint of fear of violation of the state conspiracy statute and, therefore, justified in declining to negotiate contracts with Ascap. I cannot accept this contention. It is inconceivable to me that the court should hold that a person is justified in violating a Federal statute because of fear that if he complies with it he will violate a State statute. These defendants are under no compulsion to operate taverns. If, in order successfully to operate taverns, they must need violate a Federal law, it ill behooves them to complain that such violation is justified because of their apparent distaste for violating a State law.

Second, defendants contend that plaintiffs have been guilty of abuse of process. They urge that because plaintiffs admit their motive in the institution and prosecution of these suits is not the collection of the damages or the enforcement of the injunction that this constitutes such abuse of process as to prevent recovery. I see little merit in this argument. The motive, open or secret, which impels a litigant to seek the assistance of the court is not important as to the outcome so long as he has a legal and moral right upon which to sue. Connolly v. Union Sewer Pipe Company, 184 U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679; Sullivan v. Collins, 107 Wis. 291, 83 N.W. 310; 1 Corpus Juris, 971; 1 C.J.S., Actions, § 24.

Third, defendants' third contention is that these plaintiffs enter a court of equity with unclean hands. This for the reason that they admit that they have failed even to attempt to comply with Chapter 177 of the Wisconsin statutes. This is an action in equity. 18 C.J.S., Copyright and Literary Property, § 141, p. 254; L. A. Westermann v. Dispatch Printing Co., 6 Cir., 233 F. 609. I agree with plaintiffs' contention that it is not the function of the court of equity to interest itself in the general morals of the suitors who appear before it. The question is whether that lack of cleanliness infects the cause of action upon which the suit is based. One, by his past activities, may have so soiled his hands that "all the perfumes of Arabia could not sweeten" them and still the doors of equity would be open to him. Plaintiffs' counsel have cited many cases in support of this position. With them, I am in full accord. Where plaintiffs err on this point is in their contention that the rule is only applicable when the wrong done affects the defendant or directly prejudices him. That is not the law. A court of equity will not permit itself to be used as an instrumentality by which a party may effectuate a violation of positive law or for the evasion of the requirements of ethics and morality. Mitchell v. Board of Commissioners of Leavenworth County, Kansas, 91 U.S. 206, 208, 23...