For previous proceedings, see 3 K. & J. 271.
Contract - Author and Publisher - Partnership - "Edition" - Stereotype - "Thousands" - Copyright
Agreement between the author of a work and a publisher, by which the publisher agreed to publish the work at his own expense and risk, after deducting all charges and expenses, and a percentage on the gross amount of the sale for commission and risk of bad debts, the profits remaining of every edition that should be printed of the work were to be equally divided between the author and the publisher:
Held, to create a joint adventure between the parties, which the author was at liberty to terminate upon notice to his publisher after the publication of a given edition, it appearing that, at the date of such notice, no fresh expense had been incurred by the publisher in printing, advertisements or otherwise, since the publication of that edition.
Held, also, that the circumstances of the publisher having stereotyped the work previously to the publication of the last-published edition, did not affect the right of the author to terminate the agreement as above.
On the meaning of the word "edition", as applied to cases where a work is stereotyped and printed in "thousands."
By a memorandum of agreement, made in November 1852, between the Plaintiff of the one part, and the Defendant of the other part, it was agreed that the Defendant should publish, at his own expense and risk, a work entitled "Peg Woffington," of which the Plaintiff was the author; and [657] after deducting from the produce of the sale thereof the charges for printing, paper, advertisements, embellishments (if any) and other incidental expenses, including the allowance of ten per centum on the gross amount of the sale for commission and risk of bad debts, the profits remaining of every edition that should be printed of the work were to be divided into two equal parts, one moiety to be paid to the Plaintiff, and the other moiety to belong to the Defendant.
In June 1853 the same parties entered into a similar agreement relative to the publication of another work, intitled "Christie Johnstone," of which the Plaintiff was also the author; and they signed for that purpose a memorandum of agreement, which, except as to the date and the title of the work, was in the same words as the former.
On the 20th February 1857, the Plaintiff, finding that the Defendant had advertised the publication of a second edition of "Peg Woffington," filed his bill for an injunction to restrain the publication of the advertised edition of that work, and obtained an interim injunction which, on the 5th of March 1857, he moved to continue. But inasmuch as it appeared that the interim injunction had been obtained against the Defendant after he had incurred the expense of putting the new edition in type, and issuing advertisements, the Vice-Chancellor held that the Plaintiff was not in a position, so far as regarded that edition, to ask the Court to interfere. Accordingly the interim order was discharged with costs, and eventually the Plaintiff had his bill dismissed.
[658] On the 5th of October 1857, the Defendant having then published two editions of "Peg Woffington," and four of "Christie Johnstone," and intending to publish new and cheaper editions of both works, notice was given him on the part of the Plaintiff forbidding him to publish a new edition of either work, and insisting that all his control over their publication had ceased.
The Plaintiff then filed a fresh bill, praying that the joint adventure or partnership between himself and the Defendant, under the agreements, might be dissolved, and for accounts and payment; that the Plaintiff might be declared to be the absolute owner or proprietor of the copyrights; that the agreements might be delivered up to be cancelled, and that the Defendant might be restrained from printing or publishing any reprint or new edition of either work, without the Plaintiff's written sanction.
It appeared that the Defendant had stereotyped one of the works; but that up to the 5th of October 1857, the date of the Plaintiff's notice, no new expense had been incurred by the Defendant, either in printing, advertisements or otherwise, as regards "Peg Woffington" since the publication of the second edition, or as regards "Christie Johnstone" since the publication of the fourth edition.
Mr. Reade (the Plaintiff), who argued his cause in person, contended that he was at liberty to terminate both agreements as from the 5th of October 1857 - the date of his notice.
The effect of the agreements was neither to assign his copyright: Stevens v. Benning, 1854 1 K. & J. 168; 6 De G. M. & G. 223, Reade v. Bentley (3 K. & J. 271); nor [659] to create a partnership. It resulted in a simple agency, which the author could then determine at pleasure.
Mr. James, Q.C., and Mr. Whitbread, for the Defendant, did not contend that either agreement amounted to a sale of the copyright; but insisted that, in each case, the Plaintiff had granted to the Defendant an irrevocable license to print and publish.
THE VICE-CHANCELLOR. Is it not rather a joint adventure?
Mr. James. If so, it is one which could only be determined by mutual consent. In any case the Defendant has obtained for valuable consideration a license, without limitation as to time or as to the number of copies, to print and publish the works in question; that license the Plaintiff could not revoke. The agreement reserves no power of revocation ; and if such a power is to be implied, when was it to commence? If, after the publication of the second or fourth edition, why not after the publication of the first? And, if then, the publisher may lose all his outlay.
THE VICE-CHANCELLOR. Clearly he has no right to interfere with respect to any particular edition as to which you may have incurred expense before he took steps to determine the agreement. But has he not that right as to all other editions?
Mr. James. But what is the meaning of the term "edition?" When a work is once stereotyped the publication is in "thousands," and the technical term edition is no longer applicable. If the Plaintiff cannot shew from the agreement the precise time at which his right to determine it is to commence, it can only be determined by mutual consent. [660]
THE VICE-CHANCELLOR. The agreement does not bind the Defendant to publish more than one edition; but, if your construction is correct, it does bind the Plaintiff. According to the doctrine in Sweet v. Cater (11 Sim. 572) it binds the Plaintiff to abstain from publishing through any other channel until you abandon the contract. That does not seem an equitable position.
Mr. James. I do not deny that there are equitable incidents, but those the Court will adjust.
Mr Reade, in reply, contended that an irrevocable license to print was in effect a grant of the copyright. Besides, the author would be ruined. The Court was held, upon the former occasion (3 K. & J. 271), that the Defendant was the person to fix the price; and, if so, he might so adjust it, by cheap prices, as to preserve his commission of ten per cent. intact, but to leave nothing for the author.
[Further arguments on both sides are noticed in the judgment.]
Judgment reserved.
Jan. 26. VICE-CHANCELLOR Sir W. PAGE WOOD. The Plaintiff is the author of two works, called "Peg Woffington" and "Christie Johnstone," for the publication of which he entered into certain agreements with the Defendant. Two editions of the former work and four of the latter having been published by the Defendant, and no fresh expenditure having been incurred by him since the publication of those editions, the Plaintiff claims a right to terminate the joint adventure between them, and to prevent the Defendant from publishing any further edition of either work.
[661] Many questions were discussed in argument, but the only question I have to determine is, what is the effect of the agreements which have been entered into between the Plaintiff and the Defendant with reference to the Plaintiff's work?
The memoranda of agreement are, mutatis mutandis, in the same words. That set out in the bill relates to "Peg Woffington." It is very short; but , as I observed upon the occasion of the former suit, it is so worded as to make it very difficult to determine with certainty what was the intention of the parties at the time when it was concluded.
[His Honour read the agreement of November 1852]
Agreements between authors and publishers assume a variety of forms. Some are so clear and explicit that no doubt can arise upon them. Thus, where an author assigns his copyright, the transaction is one which every person understands, and which leaves no room for uncertainty as to the rights of the parties. Again, where, as in Sweet v. Cater (11 Sim. 572), the author assigns a particular edition, the rights of himself and the publisher are equally clear; and - although in that case the point did not require determination - the Court observed, and justly observed, that, where an author has sold an edition of a given number of copies to one publisher, he is not at liberty, before they are sold, to publish the same work himself through another publisher, in such a manner as to compete with the edition he has sold, but is bound to afford to the purchaser a full opportunity of realising the benefit of his contract.
The case now before me, like that of [662] Stevens v. Benning (1 K. & J. 168; S. C 6 De G. M. & G. 223), is of an intermediate description. Here, as there, the author does not sell or purport to sell any interest whatever in the copyright. It was contended, and very strongly, in Stevens v. Benning, that the author had done so; but I held that he had not, and my view was affirmed by the Lords Justices. Here also, as there, the publisher was to publish at his own risk. Nevertheless, in Stevens v. Benning, the agreement contained other provisions, considerably more definite than any in this case. It pointed to a series of editions to be published for the author by the same publisher, as to every one of which the author himself stipulated, as part of the contract, that he would assist in the publication. Here the agreement is simply that the publisher shall publish the work at his own expense and risk, and, after deducting all the expenses specified in the memorandum, and an allowance of £10 per cent., the profits remaining of every edition that shall be printed of the work are to be divided into two equal parts, one of which is to be paid to the author and the other to the publisher.
It has been contended by the Plaintiff that the case is one of simple agency; that, by the effect of the agreement, the Defendant became a mere agent of the Plaintiff. But it is clear that he became more than that. A mere agent may be paid, as the Defendant was to be paid, by a share of the profits; but a mere agent never embarks in the risk of the undertaking; and here the Defendant took upon himself the whole expense and risk of bringing out the work. Clearly, therefore, the case is something more than one of simple agency.
On the other hand, it was contended for the Defendant that, if the effect of the agreement was not an assignment [663] of the copyright (which it is now clearly decided that it could not be), it resulted in a joint adventure, in which the Defendant was to have a license to publish the work; and that, from the nature of the case, and by the terms of the agreement, that license was irrevocable.
In Stevens v. Benning I considered the agreement must be regarded as creating, to a certain extent, a joint adventure; and Lord Justice Knight Bruce adopted the same view. He says it must be observed that such interest, if any, in the copyright of the author's work as the other parties to the agreement acquired under it, they acquired, not exclusively of the author "but by way of joint adventure with him, or of partnership with him, in respect and for the objects of which he undertook the fulfilment by himself personally of certain duties to them, and they undertook the fulfilment by themselves personally of certain duties to him." (6 De G. M. & G. 229)
Community of risk did not appear to me to be by our law, any more than it was by the civil law, essential to constitute a partnership; one partner being at liberty to contract with another that he will take all the losses of the concern upon himself.
Lord Justice Turner looked upon the agreement in Stevens v. Benning in the double light of a license and a partnership, speaking, however, less decidedly as to its being a partnership. He says, "Next, if there was a partnership, then, if the agreement does not affect the copyright, the partnership was not in the copyright, but in the copies printed under the license contained in the agreement: (Id. 231); viewing it, therefore, as a license for the publication of the work, and then a joint adventure between the author and publisher in the copies so to be published. If that were [664] the effect of the agreement in the present case, the question would still remain whether the license be irrevocable.
In the former suit between these parties (Reade v. Bentley (3 K. & J. 271)) the Plaintiff claimed a right to prevent the publication of an edition with respect to which the Defendant had been allowed to incur various expenses before the Plaintiff had taken any step to determine the joint adventure between them. In the present suit his claim is wholly different. He does not attempt to interfere with the publication of an edition which the Defendant had commenced, and incurred expenses in preparing for publication, before he exercised the option of determining the agreement. His claim is limited to editions about which no such expense had been incurred by the Defendant; and his argument is that, unless he has a right to determine the agreement as to all such editions, the consequence will be that, during the whole of the Defendant's life, he may be under an obligation to the Defendant, while the Defendant will be under no reciprocal obligation to him. It is true that, according to Stevens v. Benning , a license like the present would, I apprehend, be restricted to the Defendant personally, and would not extend to his executors, or to any future partner or assignee; but if the Defendant's construction be correct, it follows that, so long as he lives and is willing to continue publishing fresh editions of the work, so long, according to the doctrine in Sweet v. Cater, the Plaintiff will be precluded from asserting a right to publish any competing edition. The Defendant could compel the Plaintiff to abstain from publishing a single copy of the work, so long as he expressed his readiness to continue publishing. But the Plaintiff has no reciprocal power. He could never compel the Defendant to publish more than a single edition of the work. His powers are limited to what the contract gives him; and, [665] according to the contract, when the Defendant has published a single edition the contract on his part is fulfilled. That is a position of considerable hardship for an author, and one which ought to be clearly shewn upon the face of a contract to have been contemplated by the parties who entered into it.
Besides, the Plaintiff might be placed in a position of still greater hardship if the Defendant's construction be correct. In the former suit between the parties, in reference to this agreement, I held that, although the agreement is silent on the subject, yet, inasmuch as the Defendant was to bear the risk of the publication, he was the proper person to fix the price; and, by parity of reasoning, he would be the proper person to fix the time and mode of publication, and, in the exercise of his discretion on that subject, it might well happen that the Defendant, acting perfectly bona fide and upon an honest conviction that circumstances were unfavourable for the publication of a further edition, would decline indefinitely to publish, but without resigning his contract. The author, at the same time, might be of a contrary opinion, and yet for months or even years he might be kept in suspense, and prevented from publishing on his own account until his publisher should be of opinion that the time had come for the revival of the public interest in the work. That is a position of difficulty and hardship to which an author ought not to be reduced, unless the contract is express and clear upon the subject.
On the other hand, it was very ably urged by the Defendant's counsel that, if the Plaintiff has the right of determining the agreement, he is bound to shew from the contract at what precise time that right commences. If he can arrest the publication of a third, fourth or fifth edition, the same argument, it was said, must apply to the second; [666] and if the Plaintiff cannot fix upon some particular time at which, according to the contract, his right is to commence, the inference must be that the agreement is only determinable by a joint resolution of both parties. As regards a second edition this argument is particularly forcible, although possibly it might apply to others. The publisher may urge that he has given the benefit of his talents and position as a publisher; that he has invested his capital, sparing no expense, in bringing out the first edition, in the expectation of being recouped the cost of the first by the sale of the second and subsequent editions; that as to one of the works in question he has even gone so far as to have it stereotyped with that view; and that, to hold the author entitled at his own instance to determine an agreement like the present, when the first edition has been published, would be to enable him, by an arbitrary and unreasonable exercise of that power, to deprive the publisher of all his profits.
This consideration makes it necessary to inquire whether, upon the face of the agreements, any definite time can be reasonably said to be pointed out for the determination of the joint adventures in question; or whether the terms of the agreements are such as necessarily to hold the Plaintiff bound for an indefinite series of editions, and thus to subject him to the disadvantages to which I have referred.
Now, on carefully reading through each agreement, it appears to me that, at all events, certain definite times are distinctly pointed out for the adjustment of the accounts, and that those times are the successive periods when the various receipts and payments on account of the successive editions have been ascertained.
It was said that the Court must first ascertain the meaning of the term "edition;" that, when a work has [667] once been stereotyped, the term "edition" is no longer applicable; that when a work is published in what are called "thousands," twenty thousand or thirty thousand being circulated, each thousand could not properly be called an "edition." Now I apprehend that, not merely in point of etymology, but having regard to what actually takes place in the publication of any work, an "edition" of a work is the putting of it forth before the public, and if this be done in batches at successive periods, each successive batch is a new edition; and the question whether the individual copies have been printed by means of moveable type or by stereotype does not seem to me to be material. If moveable type is used, the type having been broken up, the new edition is prepared by setting up the type afresh, printing afresh, advertising afresh, and repeating all the other necessary steps to obtain a new circulation of the work. In that case the contemplated break between the two editions is more complete, because, until the type is again set up, nothing further can be done. But I apprehend it makes no substantial difference as regards the meaning of the term "edition," whether the new "thousand" have been printed at the same time with the former thousand, or subsequently. A new "edition" is published whenever, having in his storehouse a certain number of copies, the publisher issues a fresh batch of them to the public. This, according to the practice of the trade, is done, as is well known, periodically. And if, after printing 20,0000 copies, a publisher should think it expedient, for the purpose of keeping up the price of the work, to issue them in batches of a thousand at a time, keeping the rest under lock and key, each successive issue would be a new "edition" in every sense of the word.
The persons who framed this agreement appear to have understood the word in this sense. The agreement provides [668] that, "after deducting from the produce of the sale the charges for printing, paper, advertising, embellishments (if any), and other incidental expenses, the profits remaining of every edition that shall be printed of the work" shall be divided as specified. It uses the word "edition" to designate that periodical issue, which is capable of being made the subject of a separate account of profit and loss.
Such then being the meaning of the word "edition," the agreement provides that, so soon as all the charges and expenses, and all the receipts in respect of each edition shall have been ascertained, the accounts shall be taken, and the profits divided. That is the period distinctly pointed out by the agreement for the adjustment of the accounts.
It is not necessary for me to hold that, because these periods are pointed out for the adjustment of the accounts, the loss on one edition might not be set off against the profits on another. Nor is it necessary to hold that accounts might not be made out, as they are said to have been in fact made out, yearly. It might take some years to circulate any one edition, and during that period accounts would of course be properly made out in respect of copies already in circulation.
If then it is open to the Plaintiff to say that certain definite times are distinctly pointed out upon the face of the agreement in question, for the adjustment of the accounts, it appears to me, upon the balance of the difficulties in the way of each construction, that the difficulty of deciding against the author's construction, and holding that he has parted to so great an extent with his copyright, preponderates. It cannot be contended that the agreement on his part is like a grant, in which the onus is upon the grantor of shewing that he has not parted [669] with all which the grant appears to comprise. The onus here is with the party who contends that this agreement amounts to a license, which, upon the face of it, it does not. It certainly is not as assignment of the copyright. It does not appear to me to create more than a joint adventure; and if license there be at all, it is only a license so far as may be necessary for carrying out that joint adventure, and an implied license for that purpose. That being so, the onus is upon the Defendant of shewing that the contrary construction is necessary; and that not being shewn, a construction which would leave the author fast bound, and the publisher entirely free, after the publication of one edition, is not a reasonable construction to adopt in considering the effect of an agreement of this character.
In the present case no new expense has been incurred by the Defendant, either in printing, advertising or otherwise, as regards "Peg Woffington" since the publication of the second edition, and as regards "Christie Johnstone" since the publication of the fourth edition; and that being, as I have already intimated, the true test in construing the agreement, it appears to me that, when those editions were published, the period had arrived at which the parties intended a division of profits to take place, and at which the Plaintiff became entitled to terminate his agreement with the Defendant.
This is the only conclusion at which I can arrive after a very careful consideration of the contracts. But it is much to be regretted that contracts should be framed with such uncertainty when it would have been so easy to make them certain. Up to the hearing I shall certainly give no costs, because I think each party equally in fault for having entered into agreements which it is so difficult to construe.
[670] It will not be necessary to order an injunction - a declaration will be sufficient.
Declare that the Plaintiff is at liberty to determine the agreement of November 1852 with respect to the publication of "Peg Woffington," and the agreement of June 1853 in respect of the publication of "Christie Johnstone," as from the 5th of October 1857, the date of his notice; and that the Defendant is not entitled, under the said agreements respectively, to publish any further edition of the said works. Order accounts (if necessary); and declare that the Plaintiff is not to be at liberty in any way to interfere with the sale of the several copies of the said works respectively published by the Defendant prior to the 5th of October 1857. Reserve further considerations. Liberty for both parties to apply. No costs up to the hearing.
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