that said defendant Mutual Film Corporation then knew, or by the exercise of reasonable prudence and caution and by inquiry of the defendant the Frank A. Munsey Company or of the complainant could easily have ascertained, the existence of your complainant's said rights and of the fact that the said defendant the Frank A. Munsey Company neither then nor at any time had any right or authority to sell or dispose of the right to dramatize said work or to produce the dramatization thereof in moving pictures or otherwise. And in this connection your complainant alleges upon information and belief that the defendants at all said times knew that the complainant was the author of said literary work; that the defendant the Frank A. Munsey Company was not the author thereof, and did not pretend to be, and that the only rights of the said defendant the Frank A. Munsey Company in and to the copyright covering the said short story of your complainant were necessarily derived from an agreement between said defendant as publisher and your said complainant as author; and that the terms of the said publisher's authority to deal with the said copyright when secured were necessarily confined and restricted by the terms of said contract or assignment from your said complainant to said publisher, which said contract and assignment was at all times open to inspection by the defendants, or either of them, upon request either to the Page 262. defendant the Frank A. Munsey Company or to your complainant, which said contract disclosed upon its face the rights of your complainant as aforesaid and the total absence of any right or authority in the defendant the Frank A. Munsey Company to sell any rights derived from said copyright to said defendants, except the right to print and publish the said story in serial form as aforesaid. And the complainant alleges that neither said defendant the Reliance Motion Picture Corporation nor the Mutual Film Corporation ever made any request upon the complainant for an inspection of said contract or for any other information whatsoever concerning your complainant's rights in the premises. 66 What, in effect, is alleged on information and belief, as to the Reliance Company, is that it knew that plaintiff was the author of the work, that the rights of the Munsey Company were necessarily" derived from the agreement between the Munsey Company and plaintiff, and that the terms of the authority to the Munsey Company to deal with the copyright, when secured, were necessarily confined and restricted by the terms of the contract or assignment from plaintiff to Munsey, and that this paper was at all times open to inspection by the Reliance Company. [1] What this allegation amounts to is that, where a publisher copyrights a work of an author, there must of necessity exist some arrangement between them, and that, perchance, the author may have reserved something undisclosed which the person dealing with the owner of Page 263. the copyright should have suspected, although an examination of the record title provided for by law shows good title. This, to my mind, would place a duty upon a person dealing with the owner of a copyrighted work which the law never contemplated, and which, from the standpoint of commercial requirements, would be unjust and seriously hamper legitimate dealings. Of course, a cautious purchaser may require all sorts of assurances from the owner of the copyright, and thus, perhaps, avoid unexpected litigation; but I am unable to follow the reasoning which requires a person dealing with the owner of a copyright to rely on anything more than the statute requires, unless, of course, either actual notice has been given or some facts are within his knowledge from which he is put upon his inquiry. The various parts of paragraph 11, when read together, and especially as illuminated by the use of the word "necessarily," do not suggest that the Reliance Company had any knowledge of any fact, but amount merely to a conclusion that because the author did not copyright the work and the magazine publisher did, therefore the Reliance Company must assume that the filed copyright did not truly show who was the owner thereof. As actual knowledge is not alleged against the Reliance Company, the complaint must be dismissed as to that defendant. Actual knowledge, however, is charge against the Mutual Film Corporation, and constructive notice "by reason of the fact that said defendant then knew" the existence of plaintiff's rights is likewise charged. While the complaint remains in this condition, it can not be dismissed against the defendant Mutual Film Corporation. [2] Defendant urges that Falk v. Howell (C. C.) (34 Fed. 739), is authority for the proposition that the alternative pleading must be held bad. In that case the facts were, or should have been, within the knowledge of the plaintiff, and clearly it was his duty to set forth an accurate compliance with statutory requirements. Here, however, this defendant must be better informed than the plaintiff as to whether it had actual knowledge or constructive notice, either of which (properly inferred from facts) would make the Mutual a proper party defendant. Of course, it would save everybody time and expense if, whatever the fact is, the complaint could set it forth; but that is a matter for the attorneys to deal with. On the face of the complaint, a dismissal can not be had in favor of the Mutual. Settle order on two days' notice. If plaintiff desires to amend the complaint as against Reliance Company, he will be permitted so to do on the payment of costs. If he does not, then the complaint will be dismissed, without costs. [232 Federal Reporter, pp. 259–263.] JOHN CHURCH CO. v. HILLIARD HOTEL CO. et al. (Circuit Court of Appeals, Second Circuit. February 9, 1915.) No. 153. 1. COPYRIGHTS-INFRINGEMENT-PERFORMANCE OF MUSICAL COMPOSITION" FOR PROFIT." Under copyright act March 4, 1909, chapter 320, section John Church Co. v. Hilliard 1 (e), (35 Stat. 1075, Comp. St. 1913, sec. 9517), giving to Hotel Co., Feb. the owner of a copyright the exclusive right to perform the 9, 1915. copyright work publicly for profit, if it be a musical composition and for the purpose of public performance for profit, but providing that its performance in a coin-operated machine shall not be considered a performance for profit, unless admission is charged to the place where the machine is located; section 25 (b), providing for injunction and damages for infringing the copyright, subdivision 4 of which fixes the damages for every infringing performance of a dramatic or musical composition; and section 28, making willful infringement for profit criminal but excepting from the provisions thereof the performance of certain sacred and secular works, if the performance is given for charitable or educational purposes, and not for profit-when construed together, the words "for profit" mean a direct pecuniary charge for the performance, such as an admission fee, and do not include a performance in a hotel dining room, intended to increase patronage, but for which no admission fee is charged. 2. COPYRIGHTS-INFRINGEMENT-PERFORMANCE OF MUSICAL COM POSITION. The proviso contained in copyright act, section 28, permits the performance of the specified composition where an admission fee is charged, provided the proceeds are applied to charitable or educational purposes. 76228°-17-4 Page 230. Appeal from the District Court of the United States for the Southern District of New York. Campbell & Boland, of New York City, for appellants. Nathan Burkan, of New York City, for petitioner. WARD, Circuit Judge. This is an appeal from an order of the district court granting a preliminary injunction restraining the defendants, viz, the lessee of the Hotel Vanderbilt and the leader of the orchestra, from performing in the dining room of the hotel a copyrighted musical composition owned by the complainant, called "From Maine to Oregon." [1] When the copyright proprietor of a musical composition sells printed copies of it to the public, the performing right goes with them. For the greater protection of the copyright proprietor, Congress, by section 1 (e) of the act of 1909, gives him also the exclusive right To perform the copyrighted work publicly for profit if it be a occurs. The whole case turns upon the meaning of the words "for profit." Coin-operated machines are, of course, operated directly for profit; but they were excluded if no admission fee were charged, probably because the damages allowed by section 25 (b), subdivision 4, would be prohibitory of the business. In case of infringement section 25 provides: SEC. 25. That if any person shall infringe the copyright in any work protected under the copyright laws of the United States such person shall be liable: (a) To an injunction restraining such infringement. (b) To pay to the copyright proprietor such damages as the copyright proprietor may have suffered due to the infringement, as well as all the profits which the infringer shall have made from such infringement. * Fourth. In the case of a dramatic or dramatico-musical or a choral or orchestral composition, one hundred dollars for the first and fifty dollars for every subsequent infringing performance; in the case of other musical compositions, ten dollars for every infringing performance. Section 28 makes willful infringement for profit criminal, as follows: SEC. 28. (Penalty for infringement.) That any person who willfully and for profit shall infringe any copyright secured by this act, or who shall knowingly and willfully aid or abet such infringement, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment for not exceeding one year or by a fine of not less than one hundred dollars nor more than one thousand dollars, or both, in the discretion of the court: Provided, however, that nothing in this act shall be so construed as to prevent the performance of religious or secular works, such as oratorios, cantatas, masses, or octavo choruses by public schools, church choirs, or vocal societies, rented, borrowed, or obtained from some public library, public school, church choir, school choir, or vocal society, provided the performance is given for charitable or educational purposes and not for profit. [2] This proviso must contemplate the charge of an admission fee, because if the performance is really "not for profit" it would be perfectly lawful, both under section 1 (e) and under the prior provision of section 28 itself. We must attribute a more plausible intention to Congress. We think it was to permit certain high-class religious and educational compositions to be performed at public concerts where an admission fee is charged, provided the proceeds are applied to a charitable or educational purpose. Considering the foregoing provisions together, Con- Page 231. gress seems to have meant by the words "for profit" a direct pecuniary charge for the performance, such as an admission fee or a fee deposited in a coin-operated machine, although the latter is excepted by the act. The district judge held that the performance was public, and that the hotel would not have paid for the playing of the piece, unless it were to gain something thereby. He followed the case of Sarpy v. Holland and Savage (99 L. T., 317). It involved certain musical compositions published and copyrighted in France, which contained on each a printed notice that the rights of public performance were reserved, though performances at public entertainments which were "gratuitous" or "absolutely free" would be permitted. The defendant Holland was the lessee of a hotel, and he employed the defendant Savage to lead a band of three musicians, who played in his saloon three times a week, no charge being made for the entertainment. The defendants contended that they had not violated the plaintiff's rights, because |