CLARK, Circuit Judge.
We are presented with a question of statutory construction which has apparently never arisen before, though the general statutory provision has existed for over a hundred years. Simply stated, the problem is whether or not a copyright holder may assign his expectancy of the renewal right which arises under 17 U.S.C.A. § 23 at the expiration of the original twenty-eight year copyright grant. The district court upheld the validity of the assignment. 38 F.Supp. 72.
The question arose in connection with the renewal of the copyright on the song "When Irish Eyes Are Smiling." One of the defendants, George Graff, Jr., collaborated in the writing of this song in 1912, at which time he was acting under a general agreement to assign all copyrights to the plaintiff, M. Witmark & Sons, with a reservation of royalties. Five years later, Graff has stated, he was in financial difficulties; at any rate he then entered into a second agreement with the plaintiff by which for the consideration of $1,600 he released all his royalties on some sixty-nine songs, including "When Irish Eyes Are Smiling," and also made a further assignment of the renewal rights. This further assignment purported to bind Graff and his "heirs, executors, administrators and next of kin," and granted an irrevocable power of attorney to plaintiff to execute in Graff's name or that of his heirs, etc., all documents necessary to secure the renewal of the copyright and all rights therein for the term of the renewal. That is, the assignment was supported by the traditional power of attorney to enforce its terms, which has historically been the bridge whereby assignments anciently not recognized "at law" were actually made effective according to the intent of the parties. Cook, The Alienability of Choses in Action, 29 Harv.L.Rev. 816, 822, 824; Ames, Lectures on Legal History, 213, 214; 34 Yale L.J. 409; In re Barnett, 2 Cir., 124 F.2d 1005, 1008. This agreement, dated May 19, 1917, was duly recorded in the Copyright Office on November 19, 1935.
On August 12, 1939, the first day of the twenty-eighth year of the copyright in question — renewals must be applied for within that year — plaintiff entered an application for renewal in Graff's name, registered the renewal in Graff's name, assigned the renewal copyright to itself, and recorded the assignment. Eleven days later Graff applied for his renewal and assigned this renewal to defendant Fred Fisher Music Co.
We start with the statute. It says that "the author * * * if still living, or the widow, widower, or children of the author, if the author be not living, or if such author, widow, widower, or children be not living, then the author's executors, or in the absence of a will, his next of kin shall be entitled to a renewal and extension of the copyright * * * for a further term of twenty-eight years when application for such renewal and extension shall have been made * * * within one year prior to the expiration of the original term of copyright." 17 U.S.C.A. § 23. It is conceded by all concerned that this creates only an expectancy, and that in any event the author must be alive on the first day of the twenty-eighth year in order to obtain a renewal. An assignment of this expectancy likewise must rest also on survival. It is also apparent that the assignment here would not have cut off the rights of renewal extended to the widow, children, executors, or next of kin, in the event of Graff's death prior to the renewal period. See Fox Film Corp. v. Knowles, 261 U.S. 326, 43 S.Ct. 365, 67 L.Ed. 680. The only contested point is whether or not the statute absolutely forbids assignment. Certainly the passage does not say it does. There are no words that an assignment "shall be void and of no effect," as, for example, in 38 U.S. C.A. § 129, dealing with the pledge or transfer of a pension. If we had no more than the words of the statute to go on, we could hardly find in that a restraint on freedom of assignment.
Reliance is had, however, upon the statutory history. The Copyright Act of 1790 said that the "exclusive right shall be continued to [the author] * * * executors, administrators or assigns." 1 Stat. 124. In 1831, the Act was amended; and in changing the renewal provision to approximately its present form, the words "executors, administrators or assigns" dropped out. 4 Stat. 436. This, we are told, indicates
More to the point is the Congressional Report on the Act of March 4, 1909, which is the present statute, 17 U.S.C.A. § 23 — except for a slight textual change of 1940, here immaterial. The committee was supporting the decision to extend the right of renewal another fourteen years to make a total renewal period of twenty-eight years, and it stated its preference for this arrangement, rather than a single and longer term as for life or fifty years. So it said:
"Your committee, after full consideration, decided that it was distinctly to the advantage of the author to preserve the renewal period. It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum. If the work proves to be a great success and lives beyond the term of twenty-eight years, your committee felt that it should be the exclusive right of the author to take the renewal term, and the law should be framed as is the existing law, so that he could not be deprived of that right.
"The present term of twenty-eight years, with the right of renewal for fourteen years, in many cases is insufficient. The terms, taken together, ought to be long enough to give the author the exclusive right to his work for such a period that there would be no probability of its being taken away from him in his old age, when, perhaps, he needs it the most." H.R.Rep. No. 2220, 60th Cong., 2d Sess., p. 14. The House Report was adopted by the Senate Committee on Patents as its own. Sen.Rep. No. 1108, 60th Cong., 2d Sess.
We think it fair to say that defendants' case substantially depends on this quotation, as expressing a clear intent as to the statutory meaning and one to which we should give effect. But several observations must be made about it, for it contains its own ambiguities. Its direct purpose was clearly to explain the continuance of a renewal term as against the substitution of a single long term. In other words, it argued for an existing arrangement — "the existing law" — and so not necessarily or clearly for an absolute prohibition. If the committee had really meant the latter, they could easily have so drafted the statute. And they could easily have stated their purpose in unambiguous words in their report. As it is, their own words are almost as ambiguous as the statute itself. They said the author "could not be deprived of" the right to renew. Does this mean he could not be deprived of it if he "sells his copyright outright to a publisher"?
If we could find that the statute had been interpreted — in the light of the committee's report — to forbid such assignments as we find here, we might well be inclined to give the committee the benefit of any doubts as to the language they had chosen. Meaning is frequently obscure, and courts may well be sympathetic to clear Congressional statements of what they think they are doing. United States v. Dickerson, 310 U.S. 554, 60 S.Ct. 1034, 84 L.Ed. 1356; Hamilton and Braden, The Special Competence of the Supreme Court, 50 Yale L.J. 1319, 1357-1367; cf. Radin, Statutory Interpretation, 43 Harv.L.Rev. 863. But we do not find such interpretation; so far as we can ascertain, the general view has been to the contrary. Soon after passage of the Act, Assistant Attorney General Fowler observed that "no doubt it [the renewal] may be the subject of a valid contract before renewal, which would carry the equitable, if not the legal, title thereto when renewed." 28 Op.Atty. Gen. 162, 169. Such also appears to have been the attitude of the people affected by copyright law as manifested in the treatises on the subject. Four treatises published before 1909 are definite in stating that an author may validly assign his expectancy of renewal,
Here, then, is a substantial number of writers on the subject all tending to say the same thing: that only an author can renew, but that he can make binding agreements to renew for someone's benefit. It seems not unreasonable to conclude from this that such a belief doubtless exists throughout the trade. Naturally, neither this belief, if it exists, nor the authorities themselves in any way bind us. Yet some weight may be attached to the fact that an ambiguous statutory provision has fairly uniformly been interpreted one way, and presumably acted upon.
Perhaps even more persuasive is the history of further attempts to amend the copyright laws. The attempts were aimed at general revision, usually including a change in the duration of the copyright; but for our purposes only the provisions relative to the preservation of the status of copyrights existing at what would be the time of enactment of these bills are of interest.
In two bills we find this passage: "Provided, that where the author has * * * agreed to part therewith for the renewal term under said act" [with terms following to make the renewal contract fit the time periods of the proposed act]. H.R. 6990, 71st Cong., 2d Sess.; H.R. 10434, 69th Cong.,
Notwithstanding this history, we might well be moved by a demonstration that only by holding all assignments void could we further the policy of the act. But even this seems to us quite doubtful. True, it would be nice for an author to look forward to more money when the renewal time comes. But he can do that by not assigning. What we would be saying is that all authors who have already assigned can eat their cake and have it too. Only in the future would such a ruling be fair all around. Furthermore, it is not clear that authors wish to be deprived of the privilege of obtaining more money now, or that a widow whose husband dies penniless wishes to be deprived of the privilege of anticipating on her statutory renewal right. We are, in effect, asked to impose forced saving on authors and widows by requiring them to forego for twenty-eight years whatever additional money they could obtain by assignment of their expectancies. It should require more than an ambiguous committee report on an ambiguous statutory provision to produce such a drastic restriction on free assignability.
This conclusion is reinforced by the history of judicial disapproval of restraints on assignability. Thus lawyers discovered a way around the archaic rule against assignment of choses in action, courts of equity supported them directly, and courts of law winked at the result. Cook, op. cit. supra. Equally familiar are the general rules against restraints on alienation of property.
We are limiting our discussion, as did the parties before us, to the question of statutory interpretation. On this interlocutory issue we ought not to foreclose other contentions which the parties may wish and be entitled to raise on the merits, including possibly claims of inadequacy of consideration in 1917, so gross as to prevent negative enforcement of the assignment, with which would go the question of adequacy of damages as a remedy for breach. 2 Restatement, Contracts, §§ 358, 363, 367, 380. But we think we should say that the record contains no evidence which casts doubt on the consideration; certainly defendant Graff's statement that royalties on the songs covered by the assignment had amounted to as much as $5,000 annually (i.e., as a maximum) does not do so, particularly in view of the well-known ephemeral nature of popular song hits. Indeed, defendants base their assertion of the song's present value on the new developments of radio, electrical transcription, and sound motion pictures. And their advertising adds that sung by Olcott "for a year or two and then having lived its hour it seemed destined to be forgotten" until "a Dublin minstrel," returning "to his native isle," made it part of "the folk lore of Ireland," whence it came back here to a seemingly delayed, albeit considerable, present success.
FRANK, Circuit Judge (dissenting).
1. From most interlocutory orders there is no appeal. From an interlocutory injunction, because of its marked capacity for harm, Congress permits an appeal. Unusual caution should be exercised in the issuance of such an order. Cf. Watson v. Buck, 313 U.S. 387, 61 S.Ct. 962, 85 L.Ed. 1416. In the case at bar, the preliminary injunction seriously intrudes on defendants, restraining them from continuing sales — which had been going on for about a year — of the copyrighted song and adversely affecting their good will. That order was improper if, on the facts presented, assuming, for present purposes, that they will be the facts on final hearing, it seems unlikely that plaintiff will be granted the final relief sought, a decree for specific performance.
In 1917, when the contract was made, the plaintiff was a successful publisher, and
In considering those facts, we should take judicial notice of the economic capacities and business acumen of most authors. In ascertaining that certain persons, because "often under economic compulsion," constituted a "necessitous class," our present Chief Justice, in 1928, used, judicially, off-the-record knowledge which no casual inquiry would elicit — such as the contents of a report by the City Club of New York, of the Proceedings of the Association of Governmental Labor Officials, and the like.
Here, then, is a case where (a) the defendant was an author, one of a class of persons notoriously inexperienced in business, and the particular author was actually, at the time, in desperate financial straits, while the plaintiff was a successful and experienced publisher; (b) the property contracted for was of such a character that, when the contract was made, "neither party could know even approximately the value," so that "it was
That is not the kind of contract which equity will specifically enforce. Although Chancellor Kent, in a well-reasoned early case, Seymour v. Delancey, 6 Johns.Ch., N.Y., 222, concluded that inadequacy of consideration alone would bar specific performance of a contract, his views were rejected on appeal by a bare majority, 3 Cow., N. Y., 445, 15 Am.Dec. 270, in what became the leading American case. More recently, however, there has been a growing tendency to adopt Chancellor Kent's view. But we need not rely on such authorities, for it is well-established that specific performance will be denied where, in addition to inadequate consideration, other factors contribute to the inequity of the bargain. See 2 Chafee and Simpson, Cases on Equity (1934) 1173-1193, especially note 5, page 1185. Among the factors to be considered are lack of advice by one contracting party, Ames v. Ames, 46 Ind.App. 597, 91 N.E. 509; Banaghan v. Malaney, 200 Mass. 46, 85 N.E. 839; 19 L.R.A.,N.S., 871, 128 Am.St.Rep. 378; differences in business experience or information, Margraf v. Muir, 57 N.Y. 155; especially if an improvident contract is the result, Pickett v. Comstock, 209 Iowa 968, 229 N.W. 249.
For the foregoing reasons, the order for an interlocutory injunction should be reversed.
2. It should also be reversed because there can, I think, be no enforcement, under the Copyright Act of 1909, of a contract for the sale of an author's renewal option if made prior to the date when the author is himself able to exercise that option.
My previous discussion has a bearing on the interpretation of that Act. For, as the equitable policy of denying enforcement of certain contracts for the sale of property, which I have just considered, rests upon non-statutory grounds, it serves to answer my colleagues' suggestion that, we must take it for granted that the policy of our legal system is steadfastly opposed to any impediments on the freest possible alienability by all men of their property, and that we must construe this statute accordingly.
As one might surmise, Congress had fully in mind the inexperience of authors. As I shall show, it desired to protect them against the very sort of improvident agreement for the disposition of their contingent renewal privileges which, in the case at bar, the majority opinion holds to be enforceable. Indeed, my colleagues, a few weeks ago, joined in an opinion in
The majority opinion grants, as it must, that Congress put some very real restraints on the author's power to dispose of his statutory renewal option: One who purchases it under a contract made prior to the renewal date acquires nothing, even the majority concedes, if the author is not alive on that date; if he dies intestate before then, his creditors cannot avail themselves of that option on the renewal date, even if he leaves no widow or children, because Congress expressly said that the option should then pass to his next of kin and not to his administrator. And the majority admits, also, that the statute does not clearly provide that if the author is alive on the renewal date, the option passes to a purchaser under such a contract as is before us in the instant case. We must, therefore, turn to the legislative history.
My colleagues quote a part of the Congressional committee reports concerning the 1909 Act. Those reports in discussing the author's right to a renewal term, say that "the law should be framed as is the existing law, so that he could not be deprived of that right," and cannot have it "taken away from him in his old age when he needs it the most." Since the 1909 report refers to the then "existing law," the 1831 Act, we should examine — as the majority does not — the following comments of the Congressional Committee made at the time when the 1831 Act was enacted:
"At the second session of the first Congress, a statute was passed to secure to authors the copy-right of their books, charts and maps. In 1802, a like statute was passed to secure the copy-right of prints [2 Stat. 171]. In both of these statutes, there are provisions which are useless and burdensome, and in which there are likewise discrepancies. * * * In the United States, by the existing laws, a copy-right is secured to the author, in the first instance, for fourteen years; and if, at the end of the period, he be living, then for fourteen years more; but, if he be then not living, then the copy-right is determined although, by the very event of the death of the author, his family stand in more need of the only means of subsistence ordinarily left to them. * * *
"The bill secures to the author a copyright for twenty-eight years, in the first instance, with a right of renewal for fourteen more, if, at the end of the first period, the author be living, or shall have a family. * * * The scholar, who secludes himself and wastes his life, and often his property to enlighten the world, has the best right to the profits of those labors. * * * Shall we not encourage the means of that knowledge, and enlighten that virtue * * *? We ought to present every reasonable inducement to influence men to consecrate their talents. * * * It cannot be for the interest or honor of our country that intellectual labor should be depreciated, and a life devoted to research and laborious study terminate in disappointment and poverty. * * * The question is, whether the author or bookseller shall reap the reward."
With that Congressional purpose as to the 1831 Act in mind, we can the better get at the Congressional intention in enacting the 1909 Act by quoting (more extensively than do my colleagues) from the Committee Reports on that Act:
"It was urged before the committee that it would be better to have a single term without any right of renewal, and a term of life and fifty years was suggested. Your committee, after full consideration, decided that it was distinctly to the advantage of the author to preserve the renewal period. It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum. If the work proves to be a great success and lives beyond the term of twenty-eight years, your committee felt that it should be the exclusive right of the author to take the renewal term, and
We should, in the case before us, carefully consider especially these sentences from those two Reports: "The question is whether the author or bookseller should reap the reward." "It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum." Surely, in the light of the Congressional purpose thus disclosed, we ought not so construe the statute that the publisher and not the author will "reap the reward," when, as here — and as "not infrequently happens" — the "author sells his copyright outright for a comparatively small sum."
The Committees almost literally described the facts of the instant case: Graff sold outright his original term for a small sum. His turned out to be one "of the comparatively few cases where the work survives the original term." It was to meet just such a contingency, the Committees said, that Congress gave "the author the exclusive right" to "an adequate renewal term" so that he could, in such a case, "reap the reward" in "his old age." We should see to it, that, as Congress intended the "right of the author to take the renewal term" is so hedged about that he can "not be deprived of that right" by having it "taken away from him in his old age when he needs it the most."
I find it difficult to regard those expressions of the Committees as mere idle talk, or as so ambiguous that we can laugh them off. The considerations which they present fully answer the suggestion in the majority opinion that, if we do not allow the author to contract away his contingent renewal privilege before it ripens, we may be depriving him of a means of procuring funds, by a sale of that right when it is still contingent on his living, i.e., prior to the beginning of the twenty-eighth year. If Congress intended him to be able to dispose of it before that time, why did it not confer on him a single fifty-six year term? Why did it provide for a renewal, and explicitly prevent its exercise at an earlier date? Plainly, as Congress said, because it wanted the author to be unable to sell it "outright to a publisher for a comparatively small sum" — as he endeavored to do in this very case. Here the attempted "outright" sale of the renewal right occurred in 1917, twenty-two years before the right came into existence (i. e., 1939). If Congress contemplated that the author should be able to make such a sale at so early a date, then it put him in the worst possible position to do so for an adequate consideration: As any Congressman with any sense must have seen, the sale value prior to the twenty-eighth year, 1939, would be small, because the purchaser would be buying a gamble on the author's longevity. In other words, to repeat, if such an early sale was to be allowed, the best arrangement for the author would have been a single term of fifty-six years, for then the gambling element would not inhere in the sale. But Congress explicitly rejected that arrangement. Why? In order, the Committees said, to safeguard the author "in his old age." That explicit intention is frustrated by the majority's interpretation.
The majority opinion itself demonstrates that the benefit to the author of any such an early sale must necessarily be trifling: In discussing the small consideration paid by the plaintiff to Graff in 1917 — over two decades before the renewal date — the majority opinion says that it was adequate because of "the well-known ephemeral nature of popular song hits." Which is to say that in 1917 no one could be expected to pay more than a slight sum for the renewal right to even a most successful song, especially since the purchased right would be valueless unless the author were alive in 1939. Since, as the majority opinion thus acknowledges, an early sale must, inevitably, mean a negligible price, how can the Congressional purpose of protecting the old age of the author be reconciled with the alleged permission to make such a sale? A small sum received by an author when a young man will do little to help him twenty years or more later, in his declining years.
The statute as interpreted by the majority means merely this: An author cannot make a direct "outright" sale before the twenty-eighth year. But, say my colleagues, he can do so by indirection — by making (twenty-two years earlier as here) a specifically enforceable agreement, absolutely binding on him, to have it assigned in his name as soon as the twenty-eighth year arrives. The majority opinion admits that the difference between such a transaction and the forbidden direct "outright" sale is of the tweedledum-and-dee variety. The hocus-pocus employed by the plaintiff makes clear the artificial character of the distinction: The plaintiff, M. Witmark & Sons, relies for its title to the song on an assignment executed in 1939 "to M. Witmark & Sons," signed by George Graff "by M. Witmark & Sons" as George Graff's "appointed attorney." Congress could not have intended that its admitted purpose — to prevent a direct sale prior to the twenty-eighth year — should be so easily circumvented. If it had intended that an anticipatory assignment should be valid, it is strange that in the course of a century, since 1831, it has provided no machinery by which the assignee might perfect the renewal in his own right and in his own behalf and without resort to such hocus-pocus.
It was said of the Statute of Uses
That my colleagues are obviously uneasy about their interpretation of the Congressional intention expressed in the 1909 Committee report is demonstrated by their desperate recourse to bills subsequently introduced but which failed of passage. Only one of these bills progressed as far as passage by one house of Congress. And since, in one way or another, all those bills expressly provided for assignment of the renewal term, they might be said to show — if they show anything — not, as the majority would have it, "a recognition of the validity under the 1909 Act of assignment of the renewal term," but, on the contrary, that the draftsmen believed that amending legislation was needed to validate such an assignment. While proposed but unsuccessful legislation is at best a feeble basis for statutory interpretation, the only sort of proposed bill which would have had any clear significance, as showing the validity of an assignment under the 1909 Act, would have been one which sought to deprive the author of the power to assign the renewal, or one which explicitly stated that such assignments should thereafter, as theretofore, be valid; but no such proposal was ever made.
The majority opinion cites, in support of its interpretation, the views of seven text-book writers; yet the majority opinion concedes that one such "expert" denied the power to make an early assignment and that the other six either "hedged" or were only "fairly" definite. There is then no evidence to support the majority's comment that the statute "has fairly uniformly been interpreted one way" by the "experts." And there is not a scrap of evidence, in or out of the record, to sustain my colleagues' statement that "it seems not unreasonable to conclude" that such a belief (i. e., that renewal rights are thus assignable) "doubtless exists throughout the trade."
It was argued by plaintiff that Congress, when enacting the 1909 Act, must be deemed to have had in mind the judicial interpretation of the 1831 Act, and that the later Act must therefore be construed as the majority construes it. But there had been no clear judicial interpretation of the 1831 Act along those lines. It is not at all plain that, in Paige v. Banks, 1871, 13 Wall. 608, 20 L.Ed. 709, the court, in passing on a contract made in 1828, was thus construing the 1831 Act, as distinguished from the preceding Act of 1790, which differed in its provisions. That Judge Putnam, in White-Smith Music Co. v. Goff, 1 Cir., 187 F. 247, 253, understood Paige v. Banks, supra, as relating solely to the 1790 statute goes to show that it cannot be said that it was clear to Congress in 1909 that the Supreme Court had held that under the 1831 Act the contingent renewal privilege was alienable by the author prior to the date fixed for renewal. In the face of that ambiguity, not much weight should be given to the rule of statutory construction that, when a legislature uses, without change, statutory language which has previously received judicial interpretation, the language of the statute is read in the light of such interpretation. That rule of construction has been much weakened of recent years. The Supreme Court, in Helvering v. Hallock, 309 U.S. 106, 119, 60 S.Ct. 444, 451, 84 L.Ed. 604, 125 A.L.R. 1368, said: "To explain the cause of non-action by Congress when Congress itself sheds no light is to venture into speculative unrealities. Congress may not have had its attention directed to an undesirable decision; and there is no indication that as to the St. Louis Trust cases [Helvering v. St. Louis Trust Co., 296 U.S. 39, 56 S.Ct. 74, 80 L.Ed. 29, 100 A.L.R. 1239; Becker v. St. Louis Trust Co., 296 U.S. 48, 56 S.Ct. 78, 80 L.Ed. 35] it had, even by any bill that found its way into a committee pigeonhole. Congress may not have had its attention so directed for any number of reasons. * * * Various considerations * * * might be suggested * * * for the inaction * * * but they would only be sufficient to indicate that we walk on quicksand when we try to find in the absence of corrective legislation a controlling legal principle."
The following considerations reinforce my interpretation of those reports: The Constitution, art. 1, § 8, cl. 8, expressly states the very limited purposes for which Congress may authorize patents and copyrights as follows: "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." [For the historical background of this clause, see Hamilton, Patents and Free Enterprise, T. N. E. C. Monograph No. 31, 11-27.
The inherent difference between the difficulties involved in exploiting a patent and a copyright must always have been apparent. And it is noteworthy that at one time when Congress provided that patents should, on a certain showing, be renewable for an additional period, it expressly provided, as it did not do equivalently as to copyrights in the 1831 or 1909 Copyright Acts, "And the benefit of such renewal shall extend to assignees and grantees of the right to use the thing patented, to the
3. The chief prop of the statutory interpretation adopted by the majority opinion is that our society rests on the theory that men should have the greatest possible liberty to make such contracts as they please. I agree that that has, for long and, on the whole, desirably, been, in general, the American attitude. But while, during a part of the 19th century, the devotion to that theory was peculiarly intense, there have been in our history changes in that intensity, as this court has candidly recognized several times within recent weeks. Thus one manifestation of the most extreme enthusiasm for "liberty of contract" was the notion that courts must never depart from "the intention of the parties" to a contract. Yet our court, about a month ago, frankly confessed that that idea was a pious fiction, saying, in an opinion written by Judge Clark, that there had been much confusion in judicial statements concerning "implied" negative covenants and adding: "One may perhaps conclude that in large measure this confusion arises out of the reluctance of courts to admit that they were to a considerable extent `remaking' a contract * * * where it seemed necessary and appropriate so to do. `Intention of the parties' is a good formula by which to square doctrine with result. That this is true has long been an open secret." Parev Products Co., Inc., v. I. Rokeach & Sons, Inc., 2 Cir., 124 F.2d 147, 149. And our court has stated that, to the consensual act of the parties in entering into contracts, the courts have attached many obligations which were not in the minds of the parties, that a contract creates a status which imposes such obligations because of considerations of policy.
Consequently, it is surprising that my colleagues, uncharacteristically, in this particular case interpret the statute as if, today, laissez-faire were still in fullest bloom — as if there were still so strong a presumption against any and all restrictions on the freest possible bargaining that only the plainest language can overcome it, so that the desire of Congress to clog alienability of an author's rights, in order to protect him, must be disregarded unless that desire is set forth in wording as precise as that found in a general release.
Such was, to be sure, the attitude of the courts during the latter part of the 19th century. As Dean Pound has said,
The theory of laissez-faire was that the state, the government, was not to interfere beyond a bare minimum. That such was not the actual practice, even when laissez-faire was in its zenith, has been brilliantly shown in the writings of Robert Hale, beginning in 1923.
It is helpful to make an historical approach to the chief interpretative device employed by my colleagues. Their opinion, I note again, relies, in effect, on a supposed spirit of our institutions, tenaciously opposed to all restraints on freedom to contract, which, it is urged, must be read into all American legislation. To make that thesis applicable here, my colleagues must assume that that spirit was operative a century ago when the 1831 Copyright Act
Excessive judicial worship of let-alone-ism began, then, to melt away in the 1920's and has disappeared in the decisions, during the last decade, of the Supreme Court.
The former judicial repugnance to any legislative interference with free bargaining involved a blindness to the effects on the public — the community — of the conduct of individuals. Lately, we have begun
Recognition today of the unwisdom of excessive liquidity or excessive individualism does not at all mean a commitment to rigidity, regimentation, or undue paternalism. Cf. Russell Davenport, This Would Be Victory, 24 Fortune (1941) 45, 136-144. Here, as almost everywhere in life, there is need for intelligent compromise.
"More and more," said Lord Macmillan in 1935,
When the philosophy of 100% individualism was in vogue, the courts often softpedalled such considerations. They devised and interpreted legal rules and read statutes under the influence of their own notions of public policy. That process may have been largely unconscious. But, as Mr. Justice Holmes often said, there was strong policy-making in those judicial decisions.
It is of considerable interest to note some of the cases cited by the majority to support their assertion that the Copyright Act must be read in the light of an alleged strong policy, said to be embedded in our legal system, unfriendly to any "restriction on free assignability": (a) There is the citation of an Illinois decision declaring unconstitutional a statute regulating assignments of wages and salaries. Massie v. Cessna, 239 Ill. 352, 88 N.E. 152, 28 L.R.A., N.S., 1108, 130 Am.St.Rep. 234.
It is important that the "property" here involved is a creature of statute and not a common law "right of property." In Powell v. Head, L.R. 12 Ch.D.(1879), 686, 688, it was argued that the part owner of a play could grant a license for its production without the consent of the other owners because, at common law, one tenant in common of a chattel has a right to use the chattel as he pleases. Jessel, M. R., rejected this argument saying: "I am not at all inclined to extend the antiquated and barbarous doctrines, which have been set aside partly by the Legislature and partly by the Courts of Equity, to new rights created by statute, and which are of a character wholly different from the rights of property to which these ancient doctrines apply." Cf. Holmes, J., dissenting, in Truax v. Corrigan, 257 U.S. 312, 342, 42 S.Ct. 124, 66 L.Ed. 254, 27 A.L.R. 375.
We know today that legal recognition of differences between different types of persons is not incompatible with the concept of "equality before the law," intelligently interpreted. Hughes, C. J., in Morehead v. People of New York ex rel. Tipaldo, 298 U.S. 587, 627, 56 S.Ct. 918, 80 L.Ed. 1347, 103 A.L.R. 1445, and in West Coast Hotel Co. v. Parrish, 300 U.S. 379, 391, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330. Protection for those unable adequately to protect themselves must be afforded by any civilized legal system.
I agree that the courts must not rewrite statutes and import into them what they think desirable when Congress has remained silent. But there is a marked difference between the silence of Congress and a statement of its purpose not expressed with complete nicety, a middle ground between Congress saying nothing and Congress shouting. The guiding principle was formulated as follows by Mr. Justice Holmes:
"We recognize that courts have been disinclined to extend statutes modifying the common law beyond the direct operation of the words used, and that at times this disinclination has been carried very far. But it seems to us that there may be statutes that need a different treatment. * * * The Legislature has the power to decide what the policy of the law shall be, and if it has intimated its will, however indirectly, that will should be recognized and obeyed. The major premise of the conclusion expressed in a statute, the change of policy that induces the enactment, may not be set out in terms, but it is not an adequate discharge of duty for courts to say: We see what you are driving at, but you have not said it, and therefore we shall go on as before.
Twice recently the Supreme Court has quoted that language with approval and applied that canon of interpretation.
We see little that illuminates our present issue in the Committee Report on the 1831 Act. Register of Debates, Vol. 7, App. cxix.
Plaintiff in its brief relied on G. Schirmer, Inc., v. Robbins Music Corp., 1941, 176 Misc. 578, 28 N.Y.S.2d 699 which, said plaintiff, "accepted the decision of the court below as controlling upon the State Court in decreeing specific performance of a similar contract."
There were similar renewal rights to several other songs sold by Graff to the plaintiff in the same contract — including the well-known 'Till The Sands of the Deserts Grow Cold — which have admittedly "become world famous."
Mr. Justice Brandeis confessedly went out of the record to acquaint himself, judicially, with "the art of breadmaking and the usages of the trade, with devices by which buyers of bread are imposed upon and honest bakers or dealers are subjected by their dishonest fellows to unfair competition, with the problems which have confronted public officials charged with the enforcement of the laws prohibiting short weights, and with their experience in administering those laws" — obtaining such information from a variety of sources, including a letter, written in 1917, by Herbert Hoover to President Wilson; Jay Burns Baking Co. v. Bryan, 1924, 264 U.S. 504, 517, 533, 44 S.Ct. 412, 416, 68 L.Ed. 813, 32 A.L. R. 661. Cf. Oklahoma v. Guy F. Atkinson Co., 1941, 313 U.S. 508, 61 S.Ct. 1050, 85 L.Ed. 1487.
For these and related matters, see Davis, An Approach to Problems of Evidence in The Administrative Process, 54 Harv.L.Rev. (1942) 364, 403-405.
To shift the metaphor, and to use ten dollar words, there is much cacophony in the symphony of history. Or to restate it, there is usually, at any given moment, not one "spirit of the age," but many such spirits. The bias, conscious or unconscious of the particular historian will often explain why he chooses one special spirit for emphasis.
Professor Walter B. Kennedy remarks that "thirty years before the United States Supreme Court declared the Minimum Wage Law of the District of Columbia to be unconstitutional, Pope Leo XIII vehemently defended the right of the worker to a living wage in his famous encyclical, Rerum Novarum, and argued for such economic reform on the ground of natural law and natural justice." My Philosophy of Law (1941) 147, 159.
The story of the course of judicial attitudes in this field is excellently told by Paxton Blair, Bench, Bar and Social Change, an address before the N. Y. State Bar Ass'n, January 24, 1942.
For some healthy scepticism concerning the current anti-laissez-faire drift by one who likes it, see Bossard, Sociological Fashions and Societal Planning, 14 Social Forces (1935) 186.
It is of interest, in the light of subsequent events, to compare the absolutistic arguments of Joseph Choate, asserting before the Supreme Court in 1895 that any federal income tax would bring about communism, with those of James Carter, in the same case, that such a tax, intelligently applied, by reducing the undue concentration of wealth, would help to prevent communism and the breakdown of democracy. See Pollock v. Farmers' Loan & Trust Co., 1895, 157 U.S. 429, 15 S.Ct. 673, 39 L.Ed. 759. For Choate's argument, see 157 U.S. page 532.
Carter, a conservative lawyer and one of the leaders of the bar, arguing, on behalf of a trust company, in favor of the constitutionality of the tax, said (157 U.S. page 517): "It is alleged by the counsel for the appellant that the income tax — and this they consider its most monstrous form of injustice — falls upon two per cent only of the population of the United States; but what must we think of the fact that this two per cent. have been paying but a trifle more than two per cent. of the $500,000,000 [of taxes] while of the annual income of the nation, after deducting what would be sufficient to furnish a living for the people, they have been receiving probably more than fifty per cent.? At the same time another impressive and startling fact, not adverted to by them, has also been receiving more and more of the attention of the people of the country — I mean the growing concentration of large masses of wealth in an ever diminishing number of persons. It was impossible to avoid the suggestion that there was some connection between these striking facts, and it was also impossible that they should not form the point of conflict around which political contentions would gather. They did finally succeed in dividing the two great political parties of the country. At last the party complaining of these things gained an ascendancy in the legislative counsels, and efforts were made to devise a remedy. This income tax is a part of that remedy. The view taken by the Congress which passed the tax law in question is plain upon its face. The object was to redress in some degree the flagrant inequality by which the great mass of the people were made to furnish nearly all the revenue, and leave the very wealthy classes to furnish very little of it in comparison with their means * * *."
See also Dawson, Economic Duress and Fair Exchange in French and German Law, 11 Tulane L.Rev. (1937) 346; 12 ibid. (1937) 43; Cohen, The Basis of Contract, supra.
"What was the law in the time of Richard Coeur de Lion on the liability of a telegraph company to the persons to whom a message was sent?" Gray, The Nature and Sources of Law (1900) Sec. 222.
The concept of "coercion by economic pressure" has received overt judicial recognition in United States v. Butler, 297 U.S. 1, 71, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914. It has been applied to "contract law" in many ways. For a recent case decided by this court, see United States Navigation Co. v. Black Diamond Lines, 2 Cir., 124 F.2d 508. Cf. Havighurst, Consideration, Ethics and Administration, 42 Col.L.Rev. (1942) 1, 27-30.