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CALLAGHAN V. MYERS, 128 U. S. 617 (1888)
U.S. Supreme Court
Callaghan v. Myers, 128 U.S. 617 (1888)
Callaghan v. Myers
Argued November 8-9 1888
Decided December 17, 1888
128 U.S. 617
Although there can be no copyright in the opinions of the judges of a court, or in the work done by them in their official capacity as judges, there is no ground of public policy on which a reporter who prepares a volume of law reports of the usual character can be debarred from obtaining a copyright for the volume which will cover the matter which is the result of his intellectual labor.
He has a right to take such copyright when there is no legislation forbidding him to do so or directing that the proprietary right which would exist in him shall pass to the state, or that the copyright shall be taken out for or in the name of the state, as the assignee of such right, even though he is a sworn public officer with a fixed salary.
The copyright of the volume taken by the reporter, as author, will cover the parts of the book of which he is the author, although he has no exclusive right in the judicial opinions published.
Such copyright may cover the title page, the table of cases, the headnotes or syllabuses, the statements of facts, the arguments of counsel, and the index, comprehending also, the order of arrangement of the cases, the division of the reports into volumes, the numbering and paging of the volumes, the table of the cases cited in the opinions, and the subdivision of the index into appropriate condensed titles, involving the distribution of the subjects of the various headnotes, and cross-references.
The three conditions prescribed by the Copyright Act of February 3, 1831, c. 16, 4 Stat. 436 -- namely the deposit before publication of the printed copy of the title of the book, the giving of information of the copyright by the insertion of a notice thereof on the title page or the next page, and the depositing of a copy of the book within three months after the publication, are conditions precedent to the perfection of the copyright.
A certified copy, under the hand and seal of the clerk of the district court of the United States in whose office the copy of the title of the book was deposited, of the record of the same, the certificate bearing date the day of such deposit, with a memorandum underneath of the pact and date of the deposit of the work, signed by the same clerk, is sufficient prima facie evidence not only of the fact and date of the deposit of the title, but of the fact and date of the deposit of the work, and it will be presumed in the absence of evidence to the contrary that the deposit of the title was made before publication, and also that where the work purports to
have been deposited within three months after the date of the deposit of the title, it was deposited within three months after publication.
Where the deposit of the title and the deposit of the work purport to have been made on the same day, it will be presumed, in the absence of evidence to the contrary, that the deposit of the title was made before publication, and that the deposit of the work was not made prior to publication.
Where the work purports to have been deposited more than three months after the deposit of the title, it will not be presumed that the deposit of the work was made within three months after publication.
The case distinguished from Merrell v. Tice, 104 U. S. 557.
The delivery by the reporter of copies of a volume of reports to the prescribed officer of a state, under a statute, for its use, accompanied by the payment of the reporter therefor, was a publication of the book so as to require the deposit of the work in the clerk's office within three months after such publication, to make the copyright valid.
Where the copy of the title and the work were deposited in the clerk's office on the same day the copies were delivered by the reporter to the state, it will be presumed, in the absence of evidence to the contrary, that the deposit of the title preceded the publication, and that the delivery of the copies to the state preceded the deposit of the work.
Where the title was deposited in 1867 and the notice printed in the volume purported to show that the copyright was entered in 1866, the variance was immaterial.
Where the title was deposited by "E. B. Myers & Chandler," a firm, as proprietors, and the printed notice of entry of copyright in the volume stated that the copyright was entered by " E. B. Myers," a member of such firm, the variance was immaterial.
A written transfer of the manuscript of the volume from the reporter to the person taking out the copyright as proprietor was not necessary, and parol evidence was competent to show his ownership thereof at the time of the infringement.
On the evidence, it was held that the plaintiff had not consented to or acquiesced in the infringement or abandoned his copyright or been guilty of laches.
The question of infringement considered and decided in favor of the plaintiff.
It is proper, in an interlocutory decree for an accounting before a master in a copyright case, to direct that the defendant may be examined in regard to the subject matter of the accounting, and may be required to produce his account books and papers.
Although the bill prays fur a forfeiture to the plaintiff, under the statute, of copies in the possession of the defendant of the infringing volume and for their delivery to the plaintiff, yet if the final decree does not award any forfeiture, the defendant is not injured by anything done under such provision of the interlocutory decree; nor can the penalties given by § 7 of the act of 1831 be enforced in a suit in equity; nor can
evidence obtained from the defendant through his examination and the production by him of his books and papers be used against him in any other suit in which a forfeiture is sought.
The cost of stereotyping a volume is not a proper credit to be allowed to a defendant, nor is the amount paid to the members of a defendant firm for their services in the way of salaries during the time of infringement, as a part of the expense of conducting its business; nor is the cost of producing copies of the volume which were not sold; nor is the amount paid for editorial work in preparing the infringing volume.
It is proper to charge the defendant with his profit on the resale by him of copies once sold by him and then repurchased, although he is also charged with his profit on the original sale of such copies.
The lawful matter in the infringing volume being useless without the unlawful, and it being impossible to separate the profit on the latter from that on the former, and the volume being sold as a whole, the defendant is responsible for the consequences, and the plaintiff is entitled to recover the entire profit on the sale of the volume if he so elects.
In considering exceptions to a master's report in matters of fact, questioning his conclusions in respect to the amount of the defendant's profits, those conclusions, depending on the weighing of conflicting testimony, will not be set aside or modified unless there clearly appears to have been error or mistake on his part.
The case, as stated by the court, was as follows:
This is a suit in equity, brought in the Circuit Court of the United States for the Northern District of Illinois on the 17th of December, 1877, by Eugene B. Myers against Bernard Callaghan, Andrew Callaghan, Andrew P. Callaghan, and Sheldon A. Clark, composing the firm of Callaghan & Co., Marshall D. Ewell, and Van Buren Denslow.
The bill sets forth that the firm of E. B. Myers & Chandler, composed of the plaintiff and Horace P. Chandler, became the proprietors of volumes 32 to 38, both inclusive, of the reports of the Supreme Court of the State of Illinois, known as "Illinois Reports," prepared by Norman L. Freeman; that, as such proprietors, said firm, desiring to secure a copyright for the several volumes, under the statutes of the United States, deposited in the office of the Clerk of the District Court of the United States for the Northern District of Illinois, before publication, a printed copy of the title of the several volumes; and that they afterwards, and within three months of the publication of the volume, deposited in said office a copy of the
work. The dates of the deposit of the titles of the several volumes were as follows: volume 32, August 12, 1865; 33, April 21, 1866; 34, October 23, 1866; 35, January 28, 1867; 36, October 11, 1867; 37, December 31, 1866; 38, August 22, 1867. The alleged dates of the deposit in said office of a copy of the several volumes were as follows: volume 32, January 17, 1866; 33, June 8, 1866; 34, October volumes were as follows: volume 32, January 17, 1866; 33, June 8, 1866; 34, October 23, 1866; 35, March 5, 1867; 36, November 13, 1867; 37, January 28, 1867; 38, October 10, 1867.
The bill also alleges that the plaintiff became the proprietor of volumes 39 to 46, both inclusive, of the reports of the Supreme Court of the State of Illinois, known as "Illinois Reports," prepared by Norman L. Freeman; that, as such proprietor, he, desiring to secure a copyright for the several volumes under the statutes of the United States, deposited in the office of the Clerk of the District Court of the United States for the Northern District of Illinois, before publication, a printed copy of the title of the several volumes, and that he afterwards, and within three months of the publication of the volume, deposited in said office a copy of the work. The dates of the deposit of the titles of the several volumes were as follows: volume 39, June 10, 1868; 40, September 18, 1868; 41, December 22, 1868; 42, May 21, 1869; 43, June 21, 1869; 44, September 27, 1869; 45, October 6, 1869; 46, October 14, 1869. The alleged dates of the deposit in said office of a copy of the several volumes were as follows: volume 39, June 12, 1868; 40, November 6, 1868; 41, January 29, 1869; 42, July 7, 1869; 43, July 7, 1869; 44, October 2, 1869; 45, December 8, 1869; 46, December 8, 1869.
The bill further alleges that all the volumes were prepared by Mr. Freeman, and each contained a large amount of matter original with him, and a great number of the decisions and opinions of the Supreme Court of Illinois; that among other original matter, Mr. Freeman prepared for each case a syllabus or headnotes, and for many cases in each volume a statement of the facts of the case; that also in many of them he copied, or copied and arranged, the instructions ruled upon by the court below; that he also prepared and inserted, or gave,
in all or many of them, the stipulations made or made and filed therein, and in many of them he gave the errors assigned; that he also prepared for each of them a table of the cases cited therein and a table of the cases decided, and other original matter, and so arranged said decisions and the matter therein contained, or the matter in connection with the decisions, as to make each of the books, or each of the books and the matter therein contained, convenient and valuable to the persons using the decisions; that in respect of volumes 32 to 38, the firm of E. B. Myers & Chandler, and in respect of volumes 39 to 46, the plaintiff, purchased from Mr. Freeman all his proprietary rights in the volumes, and paid him a large consideration therefor, and for his labor and care in preparing them, and used the labor and matter of Mr. Freeman in publishing the books; that by the agreements with Mr. Freeman, the plaintiff and his partner were to have the copyright of volumes 32 to 38, and the plaintiff the copyright of volumes 39 to 46; that in respect of volumes 32 to 38, the said firm, and in respect of volumes 39 to 46, the plaintiff divided the decisions and the matter accompanying them into volumes and divided and arranged each of the volumes into pages; that the firm published over 1,500 copies of each of the volumes 32 to 38, and the plaintiff over 1,500 of each of the volumes 39 to 46; that on the 13th of June, 1868, said Chandler sold and assigned to the plaintiff, by a written assignment, all his interest in and to volumes 32 to 38, and the copyrights thereof, and that the plaintiff still has the exclusive right to volumes 32 to 46.
The bill further alleges that about July, 1877, the plaintiff reprinted volumes 37 and 38, and, as he made some changes in the arrangement of their pages, he did, before publication, deposit in the office of the Librarian of Congress a copy of the printed title of each volume, on the 20th of July, 1887; that afterwards, on the 28th of July, 1877, and within one month of the publication thereof, he deposited in said office two copies of each of the volumes as reprinted.
The bill also alleges as to all of the volumes that the plaintiff had the exclusive right to the arrangement of each of
them, and the exclusive right to publish the headnotes or syllabuses, and to the arrangement of the pages of the books, and to the division of the opinions into separate volumes, and to the table of cases cited and table of cases decided, as published in each of them, and to the arrangement of the decisions, as accompanied with the headnotes, stipulations, errors assigned, instructions, table of cases cited, table of cases reported, and indexes accompanying the same, and the exclusive right to all of said works, except to the matter contained in the opinions of the judges; that the defendants had full knowledge of the exclusive rights of the plaintiff, and attempted to buy them from him, but refused to pay the price charged by him, and thereupon proceeded to reprint and publish volumes 32 to 38, and, in doing so, used the decisions of the Supreme Court of Illinois only as published by the plaintiff, and prepared the volumes from the books of the plaintiff, and did not procure the matter from original sources, and in all of the books used the works of the plaintiff, and copied the title pages thereof, and used the division and arrangement of the plaintiff in the volumes, and the paging thereof, and copied the table of cases cited an the table of cases reported from each of the books of the plaintiff, and also copied from the same the stipulations, errors assigned, and instructions given by the court; that in publishing the statements of the cases, and in preparing the syllabuses, the defendants used the books of the plaintiff, and the changes they made were merely colorable, and were made only for the purpose of avoiding the claim of the plaintiff; that the books, as printed and published by the defendants, were all and each merely imitations of the volumes of the plaintiff, corresponding in number; that all and each of said republications by the defendants are piracies on the copyrights of the plaintiff, and the books have been made by them to take the place of, and, as far as they can, to supersede the books of the plaintiff; that the defendants are selling them to the persons who would otherwise buy the books of the plaintiff, to his great damage and loss; that the defendants threaten to republish volumes 39 to 46; and that the aggregate value of the copyrights of the plaintiff is not less than $20,000, and his damage is not less than that sum.
The bill waives an answer on oath, and prays for an injunction perpetually enjoining the defendants from publishing or selling or offering for sale any of the books and for a decree that all of them so published by the defendants are forfeited to the plaintiff and that they be delivered to him, and for an account of all published and sold and for a decree for damages.
The members of the firm of Callaghan & Co. put in an answer to the bill. It sets up that a printed copy of volume 32 was not deposited until more than three months after publication. It avers that but a small amount of original matter was prepared by Mr. Freeman for any of the volumes 32 to 46, and that but few statements of cases were prepared by him, and those few were drawn by him from the opinions of the court in the cases reported. It denies that he prepared any tables of cases cited for any of those volumes, and denies that he so arranged the decisions and matter contained in the volumes as to make the volumes convenient and of value to the persons using them. It avers that all matters contained in the volumes are public and common property, forming part of the law of the State of Illinois, and as such not susceptible of copyright or in any manner literary property in which a private citizen can have a monopoly under the act of Congress regulating the subject of copyright; that whatever labor, literary or otherwise, was done upon the volumes by Mr. Freeman was done in his official capacity as Reporter of the decisions of the Supreme Court of Illinois, a public office then existing under and by virtue of the laws of that state, and to which Mr. Freeman had been duly appointed; and that all labor, literary or otherwise, by Mr. Freeman in his capacity as official reporter upon the volumes was public and common property, not susceptible of copyright or of private literary ownership. The answer admits that the defendants had negotiations with the plaintiff concerning the purchase of his interest in volumes 39 to 46, consisting of the stereotype plates and printed stock of those volumes; that in such negotiations the plaintiff proposed to sell his copyrights in volumes 32 to
46, but no price or value was ever attached by either party to such copyrights and they were always treated as a mere incident to the proposed sale, and all offers made and received on either hand were made with reference to such stereotype plates and printed stock, and it was understood by all parties that if such sale were consummated, the copyrights should be "thrown in" without additional charge.
The answer also admits that in republishing volumes 32 to 38, the defendants have used the opinions of the Supreme Court of Illinois as published by the plaintiff, but avers that they have corrected errors in names, citations, and other matters therein and denies that they have prepared the books from those of the plaintiff or used the work of the plaintiff except insofar as plaintiff's books are free to the use of any and all persons, or have copied his title pages, or have used his paging, or have copied his tables of cases cited or reported, or the stipulations, errors assigned, or instructions given. It avers that the statements of cases and syllabuses in the volumes, as republished by the defendants, are wholly original and entirely different from and unlike those of the plaintiff except in the few instances where there is an apparent resemblance owing to the fact that those of the defendants have been drawn from the opinions of the court and those of the plaintiff in the same cases appear to have been drawn from the same source, and that the volumes so republished by the defendants contain large amounts of new, original, and valuable matter prepared expressly for those volumes and not contained in any of the volumes of the plaintiff. It admits that the defendants have under consideration the republication of volumes 39 to 46. It also avers that for many years before the filing of the bill, the plaintiff had abandoned volumes 32 to 38; that his stereotype plates and stock of those volumes were destroyed in October, 1871, and none of them was ever reproduced by him until about July or August, 1877, when he reprinted volumes 37 and 38; that prior thereto, he had for many years repeatedly announced that he should never reproduce those volumes; that more than a year before the filing of the bill, the defendants notified
the plaintiff of their intention to republish volumes 32 to 38, and frequently thereafter notified him of such intention and publicly announced the same by advertisement, and from time to time, as such republication progressed, during the spring and summer of 1877, notified him of the progress of the work, and, as the volumes appeared from time to time during the spring and summer of 1877, the plaintiff was constantly apprised thereof, and at divers times during that year, and before, the defendants received various propositions from the plaintiff for an exchange of volumes 32 to 38, so being republished, for volumes 39 to 46, which the plaintiff had for sale; that the plaintiff, down to the filing of the bill, never objected to such republication, but always appeared to acquiesce therein, and encouraged the defendants to proceed therewith, and from his conduct during such period the defendants always believed, down to the filing of the bill, that such republication was being done with his acquiescence and consent, and that the plaintiff, by his conduct, is estopped from receiving the relief asked. The answer also denies all the material allegations of the bill.
Ewell and Denslow each put in an answer disclaiming all interest in the publication of any volumes of the reports by Callaghan & Co. and all interest in such volumes.
Issue was joined and proofs were taken, and on the 10th of February, 1881, the circuit court entered an interlocutory decree finding that the plaintiff was the owner of the copyright or exclusive right of publication of volumes 32 to 38 and that Callaghan & Co. had violated such copyright by publishing, offering for sale, and selling copies of said seven volumes, and Ewell and Denslow by editing the same. The decree awarded a perpetual injunction against all of the defendants from further publishing or selling or transferring or removing any of said books, and ordered a reference to a master, Henry W. Bishop, to ascertain and report what number of each of the volumes had been printed, and what number sold, and at what prices, and directed that the members of the firm of Callaghan & Co. might be examined in regard thereto, and might be required to produce their account books
and papers, and that the master ascertain and report what was the market value of each of the books of the plaintiff prior to the illegal publication by the defendants, and what was the actual cost or value of reprinting and binding each of the volumes, and that, upon the making of the report, the plaintiff might apply for a further order in regard to the damages to be allowed to him for the illegal publication and sale of the volumes. The decree also gave leave to the plaintiff to file a supplemental bill based on the fact that since the filing of the original bill, Callaghan & Co. had proceeded to publish and sell copies of the books described in the bill as volumes 39 and 41 to 46.
The decision of the circuit court is reported in 5 F. 726. The ruling of the court was (1) that the volumes of reports were the proper subject of a copyright under the act of Congress for at least what was the work of the mind and hand of the reporter -- namely the headnotes and the statements of facts and of the arguments of counsel, notwithstanding he could have no copyright in the opinions of the court; (2) that there had been a compliance with the act of Congress in the procurement of the several copyrights; (3) that the defendants had, in preparing volumes 32 to 38, used the volumes of the plaintiff so as to interfere with his copyright; (4) that he had not consented to the publications made by the defendants or abandoned his rights by acquiescence, laches, or otherwise.
On the 14th of February, 1881, the plaintiff filed a supplemental bill against the same defendants, reciting the material allegations of the original bill, and averring that since it was filed the defendants had published and sold large numbers of volumes 39 and 41 to 46, and were threatening to publish volume 40; that in the volumes they had published, they had used the plaintiff's volumes, and had copied his arrangement or division into volumes of the matter contained in his volumes, and had copied his whole arrangement of each of them, and had used each of them to make, and had made, their books an imitation and copies of his books, and had advertised and sold their books as the same books as his, and had not
resorted to the records for the opinions and other matter contained in their books, but had copied the same from his books, using and copying considerable portions of the original matter furnished by Mr. Freeman -- in some instances copying exactly, and in others making merely colorable changes; that before any of the publications of the defendants were made, the plaintiff had advertised his books extensively; that the decisions of the Supreme Court of Illinois, as divided by plaintiff into volumes, had, by reason of what was done by him, become known by the name which had been applied to the classification so made by the plaintiff; that such division was the property of the plaintiff, and was valuable, and was covered and protected by his copyright; that the defendants had copied the title or name of each of the books; that each of the books of the defendants was made to supersede and take the place of one of the books of the plaintiff of corresponding number; and that they were being so sold, to his great damage.
The supplemental bill waives an answer on oath and prays for a perpetual injunction restraining the defendants from publishing, selling, offering for sale, or removing beyond the jurisdiction of the court any of said books, and for a decree that they pay to the plaintiff all his damages by reason of such publication and sale.
On the 18th of February, 1881, the members of the firm of Callaghan & Co. filed a cross-bill in the same court against Myers, reciting the proceedings on the original bill and the terms of the interlocutory decree of February 10, 1881. It averred that the discovery and accounting provided for thereby were in progress before the master, Mr. Bishop; that Bernard Callaghan, one of the firm, had been partially examined concerning the number of volumes printed by Callaghan & Co. and on hand, and had already been required to produce before the master, for the examination of Myers and his counsel, books and papers of Callaghan & Co. relating to the volumes and the number thereof printed; that such examination was still progressing; that Callaghan & Co. had in their possession certain copies of volumes 32 to 38, and Myers claimed that he was entitled to a forfeiture of the
same and a delivery thereof; that Myers, on the 11th of February, 1881, brought an action of replevin against Callaghan & Co. to recover those copies; that the writ was in the hands of the marshal for service; that Myers was ignorant of the precise number and whereabouts of the copies, but as soon as the examination and discovery then progressing before the master should have disclosed the number and location of the copies, Myers would instruct the marshal to seize them under the writ; that Myers was not entitled to any discovery from Callaghan & Co. in aid of his proceedings for a forfeiture of the copies; that Myers, having taken the decree for a discovery as to the copies, and having obtained a discovery thereunder, and having acquiesced in the publication of the volumes by the defendants, was estopped in equity from claiming any forfeiture or recovery of any of the copies; and that such decree, and the examination and discovery before the master, amounted to a waiver of the forfeiture or recovery by Myers.
The cross-bill waived an answer on oath, and prayed for a perpetual injunction to restrain strain Myers from further proceeding with the action of replevin and from instituting any further action for the forfeiture or recovery from Collaghan & Co. of any copies of volumes 32 to 38, and for an injunction to that effect pendente lite. Myers answered the cross-bill, setting forth the interlocutory decree made in the original suit and admitting that he claimed that the volumes in the possession of Callaghan & Co. became forfeited to him under the act of Congress, and alleging that the interlocutory decree did not provide for a discovery or an accounting, and that he was not seeking any discovery from Callaghan & Co. for the purpose of aiding him in procuring the possession of the books; that the volumes were not published by Callaghan & Co. with his knowledge, acquiescence, or consent; that he claimed the benefit of the forfeiture provided for by section 99 of the Act of July 8, 1870, c. 230, 16 Stat. 214, now section 4964 of the Revised Statutes, and that he had done nothing to waive or abandon the right given to him by that statute. A replication was filed to this answer.
The members of the firm of Callaghan & Co. filed an answer to the supplemental bill on the 22d of June, 1881. It admitted that the firm had published and sold volumes 39 and 41 to 46, and denied that in publishing those volumes, they had made any other use of the plaintiff's volumes than such fair and legitimate use, by way of reference, consultation, and otherwise, as might be made of any previous publication by a succeeding author or compiler treating of the same subject, and denied that they had copied the plaintiff's arrangement or division of matter other than that the cases reported in the defendants' volumes followed each other in the same order as in the plaintiff's volumes, and denied that they had used the plaintiff's volumes to make their books an imitation, or copies of them, or that their books had been made in imitation of those of the plaintiff. They denied that they had advertised or sold their books as the same books as those of the plaintiff, but admitted that they had used the name "Freeman's Reports" in their catalogues and circulars, and averred that such use was in accordance with the uniform usage of law publishers in indicating volumes of law reports by the name of the original reporter, and with no intention of announcing the volumes of the defendants as those of the plaintiff; that, as appeared by their catalogues and circulars, the defendants, by a note immediately following the words "Freeman's Reports," directed attention to the fact that the volumes of the defendants were a different, revised, and re-edited edition, and were all re-reported and edited by persons other than Mr. Freeman, whose names were stated in the note; that the plaintiff had no property in the name "Freeman's Reports," yet, as soon as the supplemental bill was filed, the defendants desisted from such use of the words "Freeman's Reports," and had corrected their catalogues and circulars by changing the words "Freeman's Reports" to "Illinois Reports;" and that although they had used the words "Freeman's Reports" in the manner described for several years prior to the filing of the supplemental bill, the plaintiff had not objected thereto prior to that time.
The answer admitted that the defendants, in making their
books, had taken the opinions of the court from the volumes as reported by Mr. Freeman, but stated that in all cases they had carefully compared each of the opinions with the original opinions of the court on file or recorded in the respective cases, and had made frequent corrections therein to correspond with the original; and that, except as to such use of the opinions, the remaining matter in the volumes of the defendants was obtained from the original records of the court, and was arranged, reported, compiled, and edited wholly by the original labor of the editors employed by the defendants for that purpose, and whose names appeared as such editors on the title page and cover of each of the volumes of the defendants. It also averred that the titles of the volumes of the defendants were so different from those claimed by the plaintiff that they could not be mistaken therefor even by a casual purchaser or observer, and that the volumes of the defendants were new and original productions, with new and original tables of cases, headnotes, statements of facts, abstracts of briefs of counsel, corrected opinions, footnotes, and indexes, and were in no manner copies of or infringements upon the volumes of the plaintiff. It also averred that the plaintiff could not have, under the acts of Congress or otherwise, any exclusive right in the opinions of the court, as published, or in their arrangement or division, or in the titles of the volumes. The answer also denied all the material allegations of the supplemental bill. A replication was filed to this answer.
Ewell and Denslow answered the supplemental bill by an answer disclaiming all interest in the publication of the volumes named in the supplemental bill and all interest in those volumes.
On the 2d of January, 1883, Meyers amended his supplemental bill by averring that the defendants had infringed his copyright by reprinting and publishing volume 40. An answer was put in to such amendment, and a replication to that answer.
Proofs were taken as to the supplemental bill, and on the 3d of March, 1884, the court made an interlocutory decree that the plaintiff was the owner of the copyright and of the exclusive
right of publication of volumes 39 to 46; that the defendants had in some particulars infringed said copyrights; and that the plaintiff recover the profits received or made or accrued therefrom and referring it to John I. Bennet, a master, to report such profits, and directing that the defendants might be examined in relation thereto, and might be required to produce before the master their books of account and papers relating to the publication and sale of such volumes, and that the master should report also the damages.
The decision of the court is found in 20 F. 441. The only question considered in the decision was that of infringement. The court held that in some respects in each case, the Freeman volume had been used by the defendants, in the headnotes, the statements of facts, and the arguments of counsel.
On the 17th of April, 1882, the master, Mr. Bishop, reported that the defendants had printed 4,313 of volumes 32 to 38, and had sold 2,909 of the same, the amount of the sales of the several volumes being as follows: volume 32, $1,990.91; 33, $1,971.73; 34, $1,884.24; 35, $1,945.09; 36, $1,933.47; 37, $1,878.68; 38, $1,847.07 -- being a total of $13,451.19, and an average of $4.62 1/2 per volume. He stated that no testimony had been offered as to the market value of the volumes before publication by the defendants. He also reported the cost or value of reprinting and binding the several volumes to be as follow: volume 32, $942.88; 33, $782.35; 34, $664.13; 35, $843.50; 36, $835.97; 37, $773.18; 38, $885.78 -- making a total of $5,727.79, not including the item of proofreading or the item of expense of selling or a charge for stereotyping. The defendants excepted to this report because the master had not allowed to the defendants the amount paid by them for proofreading and editorial work on the volumes or for stereotyping. The court, on a hearing on the report and exceptions, referred the cause back to the master, Mr. Bishop, to ascertain and report, on the evidence given and on further evidence, the total amount of the damages sustained by the plaintiff in consequence of the illegal publication and sale.
Mr. Bishop made a second report on the 2d of February, 1884, on the previous proofs and on new testimony. He
again reported the total number of copies printed of volumes 32 to 38 to have been 4,313, and the total number of them sold to have been 2,909. He reported the amount of sales, as before, by items, making a total of $13,451.19, and an average of $4.62 1/2 per volume. Excluding charges for stereotyping, counsel fees, editorial work, and proofreading, and including 12 7/8 percent of the gross sales as a legitimate item of expense in conducting the business of the defendants in the course of the publications, he reported the cost of reprinting and binding the several volumes to have been as follows: volume 32, $1,064.25; 33, $883.06; 34, $749.63; 35, $952.10; 36, $943.59; 37, $872.70; 38, $999.81 -- making the total cost of reprinting, binding, and disposing of the volumes $6,465.14. Deducting that from the $13,451.19 left a balance of $6,986.05, which he reported as the damages sustained by the plaintiff by reason of the illegal sale and publication.
The plaintiff filed sundry exceptions to the second report of Mr. Bishop, and the defendants filed three exceptions to it. The first exception of the defendants was that the master had not allowed them credit for the cost of stereotyping; the second that he had not allowed, as part of the expenses of conducting the business of the defendants, salaries paid to them for their services, the same amounting to about $12,000 a year; the third, that he had allowed to them only 12 7/8 percent of their gross sales as expenses incurred in effecting such sales, and had not allowed the salaries as a part of such expenses, whereas he should have allowed credit to them, on account of such expenses, for such additional percentage over and above 12 7/8 percent as the amount of such annual salaries bore to the gross annual sales during the period in question.
On the 24th of October, 1884, the master, Mr. Bennett, filed his report finding that the defendants had disposed of 2,292 copies of volumes 39 to 46. He stated that the plaintiff claimed that 156 more volumes had been sold, making 2,448 in all. The 156 volumes were volumes which, after being originally sold by the defendants, had again come to their hands and been resold once or oftener. The master disallowed these resales, but reported that if they were to be allowed, the sum
of $696.38 should be added as damages for such resales. He reported the average sale price of the volumes, received by the defendants, to have been $4.464, making a total sale price of $10,231.48. He reported that the cost of all the volumes sold was $4,679.55; that the defendants were entitled to a credit of $1,118.49 on account of the general expenses of conducting their business, being twelve percent of their gross sales; that the total cost of producing the volumes sold was $5,798.04; and that, deducting that amount from the $10,231.48, left $4,433.44 as the total amount of net receipts from sales, or damages to the plaintiff.
The plaintiff excepted, by his first and second exceptions, to the disallowance in respect of the 156 copies resold, and filed other exceptions. The defendants filed exceptions in regard to the number of volumes sold, the number of volumes on hand, the average price of the sales, the total gross receipts from the sales, the cost of the volumes sold, the amount of the credit for general expenses of conducting their business, the net receipts from the sales, the refusal of the master to allow them credit for the cost of producing the volumes unsold and remaining on hand, or credit for the sum expended by them for editorial work in preparing the volumes, or credit for the amount expended by them in stereotyping the volumes, or credit for the amount paid them as compensation for their services, or credit on account of sundry other matters.
The court, on a hearing on the reports of the masters and the exceptions thereto, sustained the first and second exceptions of the plaintiff to the report of the master, Mr. Bennett, and overruled all the other exceptions of both parties to both of the reports.
On the 9th of July, 1885, a final decree was entered adjudging that the plaintiff recover $340.70 as profits on the resales of the 156 volumes, in addition to the $4,433.44 reported by the master, Mr. Bennett, and the $6,986.05 reported by the master, Mr. Bishop, the three sums amounting to $11,760.19, and the costs of the suit. The decree granted a perpetual injunction as to volumes 32 to 46. It also restrained the defendants from selling or disposing of the stereotype plates of those
volumes and dismissed the bill as to Denslow and Ewell without costs. It further adjudged that the right of the plaintiff to recover the additional sum of $896.19, as claimed by the plaintiff, and referred to in the second report of the master, Mr. Bishop, in case the cost of composition and press work should be ratably distributed over the whole edition printed of volumes 32 to 38, and also the rights of all parties under the cross-bill, and the rights of all parties to the said action of replevin for the unsold copies of volumes 32 to 38, be reserved for determination on the hearing of the cross-bill.
The report of the decision of the circuit court on the exceptions to the reports of the masters is found in 24 F. 636.
From such final decree the defendants composing the firm of Callaghan & Co. have appealed to this Court.
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