Woodmen of the World Life Insurance Society v. American Society of Composers, Authors, & Publishers

19 N.W.2d 540, 146 Neb. 358, 66 U.S.P.Q. (BNA) 193, 1945 Neb. LEXIS 90
CourtNebraska Supreme Court
DecidedJuly 13, 1945
DocketNos. 31921, 31922
StatusPublished
Cited by7 cases

This text of 19 N.W.2d 540 (Woodmen of the World Life Insurance Society v. American Society of Composers, Authors, & Publishers) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woodmen of the World Life Insurance Society v. American Society of Composers, Authors, & Publishers, 19 N.W.2d 540, 146 Neb. 358, 66 U.S.P.Q. (BNA) 193, 1945 Neb. LEXIS 90 (Neb. 1945).

Opinion

Messmore, j.

The two cases constituting the subject of this appeal, by agreement, are consolidated. They are actions at law to recover money judgments wherein the plaintiffs, pursuant to contracts made with the defendant, paid the defendant in compliance therewith and seek to recover the money so paid. A jury was waived and trial had to the court. The court entered judgment for the defendant. Motion for new trial was argued, submitted and overruled. Plaintiffs appeal.

The plaintiff, Woodmen of the World Life Insurance Society, is a fraternal, beneficial society, incorporated under the laws of Nebraska and duly authorized to operate the ■radio station known as W.O.W., situated in Omaha. For convenience this plaintiff will be referred to as the “society.”

The plaintiff, Malee, is the assignee of 26 contracts that were entered into by music users with the defendant, and will be referred to as “Malee.”

In the alternative, the plaintiffs will be referred to as appellants.

The defendant, American Society of Composers, Authors and Publishers is a voluntary association organized and existing under and by virtue of the laws of New York, com[360]*360monly referred to as ASCAP, and will hereafter be so designated.

Eugene N. Blazer, defendant (appellee) represented ASCAP in Nebraska as their agent, and will hereafter be referred to as “agent.”

The issues raised in the pleadings pertinent to a determination of this appeal are considered in the opinion with reference to the contentions of the respective parties.

The record discloses that on July 18, 1923, the society entered into a contract with ASCAP. Thereafter the contracts continued year after year on a fixed license fee. On September 1, 1932, the society and ASCAP entered into a contract that fixed a sustaining fee and a graduated scale of 3, 4, and 5 per cent of the net proceeds taken in by the society from its radio station, for a period of three years, the contract to terminate December 31, 1935. The license and sustaining fee provided for by the contract gave the radio station the right to perform publicly for profit copyrighted vocal and instrumental music compositions owned and controlled by ASCAP. At the expiration of this contract ASCAP wired the society in substance, on December 30, 1935, that it was prepared to extend the contract on the same terms for five years. On January 11, 1936, ASCAP again wired the society, calling- attention to its previous telegram and stating, in substance, that unless it heard from the society by January 15, 1936, the offer of the extension of the contract was accepted, it would consider the society as an infringer if the society performed ASCAP music for profit without a license. On January 15, 1936, the society, by wire, requested the. contract be continued. The contract provided $1,500' per year for a sustaining fee, and 5 per cent per year of the net receipts of the society’s radio station. The contract was to terminate December 31, 1940.

The contracts held by Malee, as assignee, were termed annual “blanket” license fees for the right to have rendered upon the premises of the assignors copyrighted vocal and instrumental music compositions controlled by ASCAP. [361]*361These contracts were automatically extended, unless notice was given to terminate them, as provided therein. They were taken out by hotels, dance halls and pavilions, night clubs and others, and carried a specific consideration which varied according to the business, except radio stations, the latter on a basis like radio station W.O.W. The collections under the latter contracts were made by the agent and signed by him as agent and attorney in fact. This was also true of the society’s contracts prior to September 1, 1932. There is no question but that all of such contracts were valid at the time they were entered into.

Under the United States Copyright Act, 17 U. S. C. A., sec. 1, the creator of a musical composition acquires certain exclusive rights where his work is copyrighted, among which is the right to publicly perform music for profit. Due to this right, the voluntary association of ASCAP came into being. This association was formed in 1914, under the guidance of Victor Herbert (a composer of music) and some of his contemporaries. The primary purposes of the voluntary association are to protect composers, authors and publishers of musical works against piracies of any kind; to facilitate the administration of the copyrig'ht laws for the protection of composers, authors and publishers of music works; to grant licenses and collect royalties for the public presentation of works of its members by instrumentalists, singers, mechanical instruments, radio broadcasting stations, or any kind of combination of singers, and to allot and distribute such royalties; to adjust and arbitrate differences and controversies between its members and others, and to represent its members in controversies, actions and proceedings involving the right of public performances of any of the works of its members. In other words, the association constitutes an agency analagous to a clearing house for its writer and publisher members. The rights obtained under the copyright law are assignable, and the member copyright owners assign this right to ASCAP who, in turn, makes licenses available to the commercial users of music entitling the holder to publicly perform for profit any of the compositions of the members.

[362]*362On May 17, 1937, legislative bill No. 478, chapter 138, Laws 1937, p. 488, became effective, now appearing in article 13, sections 59-1302 to 59-1320, inclusive, R. S. 1943. The act made it unlawful for any described combinations of copyright owners to operate in this state. Section 59-1302 provided that any such combination was an unlawful monopoly and a combination in restraint of trade. Section 59-1307 declared: “All existing contracts, agreements, licenses or arrangements now existing within this state made by any person, firm or corporation with any combination, declared unlawful under section 59-1302, are hereby declared void and nonenforceable in any court within the boundaries of this state, * * * ”, thus denying any such combination access to the courts of Nebraska for the purpose of enforcing its rights and those of its members. The effect of the act was to outlaw ASCAP and forbid it to do business in this state.

On June 7, 1937, Gene Buck, a member of ASCAP and at that time its president, filed a petition in the United States district court for the district of Nebraska, Lincoln division, to restrain and enjoin the Attorney General and the various law enforcing officers of this, state from enforcing legislative bill No. 478, chapter 138, Laws 1937, p. 488, now article 13, sections 59-1302 to 59-1320, inclusive, R. S. 1943, against ASCAP. A temporary injunction was obtained November 13, 1937, and on January 25, 1940, the temporary injunction was made permanent and perpetual. The court, composed of three federal judges, declared the act unconstitutional, in violation of the due process and the equal protection clause, Amendment XIV of the Constitution of the United States, as well as the federal copyright act, and that the separability clause in the act did not apply. See Buck v. Swanson, 33 F. Supp. 377. The case was appealed to the Supreme Court of the United States, and on May 26, 1941, the injunction was dissolved, the case reversed and dismissed.

In Watson v. Buck, 313 U. S. 387, 61 S. Ct.

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19 N.W.2d 540, 146 Neb. 358, 66 U.S.P.Q. (BNA) 193, 1945 Neb. LEXIS 90, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woodmen-of-the-world-life-insurance-society-v-american-society-of-neb-1945.