Case Name: Isidor Straus and Nathan Straus, Plaintiffs, v. The American Publishers' Association et al., Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1904-11
Citations: 45 Misc. 251
Docket Number: 
Parties: Isidor Straus and Nathan Straus, Plaintiffs, v. The American Publishers’ Association et al., Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 45
Pages: 251–254

Head Matter:
Isidor Straus and Nathan Straus, Plaintiffs, v. The American Publishers’ Association et al., Defendants.
(Supreme Court, New York Special Term,
November, 1904.)
Defense setting up matters arising subsequent to the commencement of an action in equity—When not demurrable because not pleaded as a partial defense — Combination to regulate the price of copyrighted books — The State courts may entertain an action to restrain it.
Where, after a judgment overruling a demurrer to a complaint in an action in equity, seeking to restrain a combination by which the defendants prevented the sale of any book by persons in the trade who should sell copyrighted books below a price fixed by the defendants, has been affirmed by the Court of Appeals, the defendants in the action interpose, by leave of the court, an answer setting up as a complete defense to the plaintiffs’ cause of action steps taken by the defendants since the decision of the Court of Appeals, limiting the restriction upon the sales at fixed prices to ■copyrighted books, which defense, under the rule laid down by the latter court, indicates that the plaintiffs are not entitled to have the equitable relief to which they were entitled when the action was begun, such separate defense is not demurrable on the ground that it should have been pleaded as a partial defense.
The Supreme Court of the State of New York has jurisdiction ■of an action involving the question whether a combination entered into between the defendants for the purpose of controlling the sale of copyrighted books is illegal and void as being in restraint of trade, notwithstanding that it will be necessary in the action for the court to construe the rights of the parties under the Copyright Law.
Demurrer to separate defenses.
Spiegelberg & Wise, for plaintiffs.
Stephen H. Olin, for defendant, American Publishers’ Association.

Opinion:
Blanchard, J.
In December, 1902, the plaintiffs commenced this action to secure a judgment declaring unlawful •and void Certain combinations and agreements entered into By and between the defendants, who are book publishers and Book dealers, for the purpose of controlling the prices at which copyrighted books should be sold in the book trade and to prevent the parties to such combinations and agreements from selling any books to any person in the book trade who should sell copyrighted books at a price below that fixed by the defendants. Other purposes of the action are to secure a permanent injunction restraining the defendants from acting under or pursuant to such combinations and agreements, and for the appointment of a referee to take proof of damage suffered by the plaintiffs because of the alleged unlawful acts of the defendants done in carrying out the purposes of such combinations and agreements. As a result of a demurrer to the sufficiency of the complaint the Special Term of this court sustained the demurrer. On appeal, the Appellate Division overruled the demurrer (85 App. Div. 446), and on further appeal the Court of Appeals affirmed the order of the Appellate Division sustaining the complaint and overruling'the demurrer. 177 N. Y. 473. The defendants, upon permission granted to them by order of the court, interposed answers setting up as a separate defense, among other things, that in March, 1904 (after the determination in the Court of Appeals), the plan adopted by the defendants to carry into effect the' purposes of the aforesaid combinations and agreements had been so amended by the defendants as to apply solely to copyrighted books, and so as not to prevent the sale by any of the defendants to any person in the book trade of uncopyrighted books. The defendants, as a further separate defense, among other things allege that the courts of the United States have sole and exclusive jurisdiction of cases of copyright, and to regulate and define the liberty of vending copyright books, and that this court has no jurisdiction to compel the defendants to sell their copyrighted books to the plaintiffs. The plaintiffs have demurred to these separate defenses upon the ground that they are insufficient in law. The demur-rants contend that because the plan, combination and. agreements of the defendants were amended after the determination by the Court of Appeals of the demurrer to the complaint, the answers of the defendants setting up such amendment should have been pleaded as a partial defense, and not as a separate defense to the plaintiffs' entire cause of action. In support of this contention the plaintiffs insist that it must he conceded that they were entitled to the relief they seek, at least until the said amendments were made in March, 1904. This may be so, but the court is bound noiv to base its determination of the questions presented by the demurrers upon the matter pleaded and upon nothing else. This action is purely equitable in its nature. Its chief purpose is to secure a judgment declaring void agreements and combinations of the defendants controlling the prices of copyrighted books and interfering with the plaintiffs' right to buy and sell books, and to secure a permanent injunction restraining the defendants from taking any action in respect to the subject-matter of such agreements and combinations. The relief sought by the plaintiffs, by way of damages, depends upon whether they can sustain their cause of action requiring equitable relief. The determination of the Court of Appeals was founded upon the facts presented by the complaint alone. Since then the defendants have interposed answers which, under the rules of law stated by the Court of Appeals in sustaining the complaint, indicate that the plaintiffs may not now have the equitable relief which they were entitled to when the action was begun. The fact that these answers set^ forth matters which have occurred since that tim'e does not impair their force or effect. As was well stated by Mr. Justice Scott, in Burke v. Rhoads, whose opinion was adopted by the Appellate Division of the First Department, and is reported in 82 App. Div. 325: " The defendant's point appears to be that, inasmuch as the modification took place after the commencement of this action, the plea of such modification should be contained in a supplemental, as distinguished from an original or amended,complaint. In my opinion this objection cannot properly be taken by demurrer, for the defense is sufficient on its face, by whatever name the pleading containing it may be called. If the defense was improperly included in the present answer the proper remedy was to strike it out." It is important to notice also that these answers were, by permission of the court, interposed after the determination by" the Court of Appeals,' and that before such determination no answers had been interposed. Therefore, these answers-cannot be regarded as supplemental answers under the provisions of section 544 of the Code of Civil Procedure, because they do not allege material facts occurring after a former pleading. They allege facts in defense which existed at the time the pleading was made and put in issue the very matters upon which the right of the plaintiffs to equitable relief depends. Such pleading is proper in actions in equity. The rule is stated in Peck v. Goodberlett, 109 N. Y. 180, 189, where it was contended that the right to-judgment depends upon the facts as they existed at the commencement of the action. The court held: " Such is the rule in actions at law, but not in actions in equity. If the plaintiff might, upon the case .stated by him, have sued at law, he did not. He invoked equitable relief, and demanded a preventive remedy as the only one sufficient to rectify the evils of which he complained, and thus became subject to the practice of courts of equity, where such relief only is ' administered, as the nature of the case and the facts as they exist at the close of the litigation demand." Therefore, the demurrers to those portions of the answers which set up as a separate defense the amended plan, combinations or agreements of the defendants in force after March, 1904, should be overruled, with costs. The demurrér to the separate defense that this court has not jurisdiction of the action is well taken, because while the issue may require tfa© court to construe the rights of the parties under the Copyright Law, the subject-matter of the action, to which the judgment -of the court must be directed and confined, involves only the question whether certain agreements and combinations of the defendants are illegal and void, as being in restraint of trade. The copyrights owned or controlled by the defendants are not attacked. Both the subject-matter and the parties are within the jurisdiction of the court. Therefore, the demurrer to the defense of lack of jurisdiction of the court should be sustained, with costs.
Demurrer sustained, with costs.