Backus v. Gould et al.

1st, that the penalty will be equally enormous whether the action be brought forthwith or at the end of a year; 2d, that innocent holders of the pirated work are not exposed, for the penalty reaches only those who knowingly sell; and, 3d, the change of phraseology in the acts of Parliament shows that these words were considered mere matter of form, as "sheets printing and printed," the only state of things to which the words could attach, are retained in the act.

Mr. Justice McLEAN delivered the opinion of the court. This cause is brought here by a writ of error to the Circuit Court of the United States for the Northern District of New York.

An action of debt was brought by Gould and Banks to recover certain penalties alleged to have been incurred by the invasion of the copyright of the plaintiffs in twelve volumes of law reports, to wit, nine volumes of Cowen's Reports and three of Wendell's, by the publication of a Digest as a supplement or third volume of Johnson's Digest. The defendant pleaded nil debit.

On the trial, the plaintiffs proved themselves entitled to the copyright of the first, second, and fifth volumes of Cowen's Reports, and of the second volume of Wendell's Reports; and that from the above volumes the defendant had transferred, literally, one hundred and forty-two and a half pages; and they proved a sale by the defendant of five hundred copies of his work.

The injury complained of consisted in copying from the above reports the marginal notes or indexes of the reporter, and publishing them in the Digest. From the first volume of Cowen's Reports forty pages were copied, from the second volume twenty-nine, from the fifth fifty-four pages, and from the second volume of Wendell's Reports nineteen and a half *811] pages *were copied, which included the whole of the indexes of that volume except eight and a half pages. The change in the phraseology was so great in these pages that the witness did not consider them as having been transferred to the Digest.

This is a qui tam action, and was brought under the sixth section of the act of 1831, entitled "An act to amend the several acts respecting copyrights."

Before the Circuit Court many points of law were raised, and instructions prayed, on the facts in evidence; but as the decision will turn upon the construction of the above section, under the ninth prayer of the defendant, the other questions will not be considered.

Backus v. Gould et al.

The defendant's counsel insisted "that the plaintiffs could only recover fifty cents for every sheet of the matter transferred from said index to the first, second, and fifth volumes of Cowen's Reports, and the second volume of Wendell's to the said Digest of said defendant, as had been proved to have been found in his possession, either printing or printed, published, or exposed for sale; and that there was no legal proof that any such sheets of said matter had been so found in said defendant's possession, and prayed the court so to instruct the jury."

"But the counsel for plaintiffs insisted that they were entitled to recover fifty cents for every sheet of such matter which had been published, or procured to be published, by the defendant, whether the same were proved to have been found in the defendant's possession or not; and so the court decided and instructed the jury." And they found a verdict for plaintiffs for "two thousand sixty-nine dollars and seventy-five cents debt, and six cents costs."

The sixth section provides, that, if any person, within the term for which a copyright has been secured, shall print, publish, or import, etc., sell, or expose to sale, or cause to be published, sold, or exposed to sale, any copy of such book, without consent in writing, such offender shall forfeit every copy of such book to the person legally entitled to the copyright thereof; "and shall also forfeit and pay fifty cents for every such sheet which may be found in his possession, either printed or printing, published, imported, or exposed to sale, contrary to the intent of this act.'

This penalty of fifty cents on each sheet, whether printed or being printed, or published, or exposed to sale, is limited to the sheets in possession of the defendant. But under the instruction of the court, a verdict was rendered for every sheet which the defendant had published or procured to be published.

As this is a penal section, it must be construed strictly. Under it, every copy of a book published without the consent of the person having the copyright is forfeited,

in addition to the penalty of fifty cents on each sheet [*812

in his possession.

The declaration seems not to have been drawn with the view of enforcing any other penalty than that which is imposed for each sheet found in the possession of the defend

ant.

The judgment of the Circuit Court is reversed, and the cause remanded for further proceedings.

Nesmith et al. . Sheldon et al.

ORDER.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Northern District of New York, and was argued by counsel. On consideration whereof, it is now here ordered and adjudged by this court, that the judgment of the said Circuit Court in this cause be, and the same is hereby, reversed, with costs, and that this cause be, and the same is hereby, remanded to the said Circuit Court, with directions to award a venire facias de novo.

JONATHAN W. NESMITH AND THOMAS NESMITH, COMPLAINANTS, v. THOMAS C. SHELDON, HORACE H. COMSTOCK, DAVID FRENCH, WILLIAM E. PETERS, JAMES FORTON, ATTA E. MATHER, HENRY B. HOLBROOK, SAMUEL P. MEAD, FRANCIS E. ELDRED, PHEBE ANN DEAN, CULLEN BROWN, AND CHARLES H. STEWART, RESPONDENTS.

The legislature of Michigan passed an act on the 15th March, 1837, entitled "An act to organize and regulate banking associations," and on the 30th of December, 1837, an act to amend the former act. By the first, any persons were allowed to form associations for the purposes of banking upon the terms specified in the law; and by the second, the stockholders were made liable, in their individual character, under certain circumstances, for the debts of the association.

The associations formed under these acts are corporations within the meaning of the constitution of Michigan, and the acts are unconstitutional and void. The second section of the twelfth article of the constitution forbidding the legislature from "passing any act of incorporation unless with the assent of at least two thirds of each house," the judgment of the legislature is required to be exercised upon the propriety of creating each particular corporation, and two thirds of each house must sanction and approve each individual charter.

The Supreme Court of the State of Michigan has so construed its constitution, and it is the established doctrine of this court, that it will adopt and follow the decisions of the State courts in the construction of their own statutes where that construction has been settled by the decision of their highest judicial tribunal.1

THIS case was formerly before this court, on a certificate of division in opinion between the judges of the Circuit

1 APPLIED.

Williamson v. Berry, 8 Van Rensselaer v. Kearney, 11 How.. How., 559. FOLLOWED. Fairfield 318; Leffingwell v. Warren, 2 Black, County v. Gallatin, 10 Otto, 52. CITED. 603.

Nesmith et al. v. Sheldon et al.

Court for the District of Michigan. Its facts and the reasons for its dismissal will be found in 6 How., 41.

It now came up upon the following certificate of division in opinion.

*This case having been remanded by the Supreme Court, on the ground that it had not been properly [*813 certified on certain points under the act of Congress, and the cause being brought before the court for their consideration and decision, the opinions of the judges are opposed on the following point:

"Whether the banking associations organized under the act of the legislature of the State of Michigan entitled 'An act to organize and regulate banking associations,' approved March 15th, 1837, and the amended act entitled An act to amend an act entitled "An act to regulate banking associations and for other purposes," approved December 30th, 1837, were or were not corporations or bodies corporate, within the meaning of the constitution of the State of Michigan."

999

Article fourth, section first, of the constitution of the State of Michigan is as follows:-"The legislative power shall be vested in a Senate and House of Representatives."

Section second of article twelfth of said constitution is as follows:-"The legislature shall pass no act of incorporation, unless with the assent of at least two thirds of each house."

The first act referred to in the question upon which the judges decided, namely, that of March 15th, 1837, authorized any persons to form associations for the purpose of banking upon the terms specified in the law. It was passed by a vote of two thirds of each branch of the legislature.

The second act referred to provided as follows:-That, "for all debts of such banking association, the directors thereof, if such association shall become insolvent, in the first place shall be liable in their individual capacity to the full amount which such insolvent association may be indebted; and each other stockholder shall thereafter be also liable in like manner, in proportion to his or her amount of stock, for the payment of the full amount of the debts of such insolvent association."

The bill filed by the Nesmiths claimed to hold the defendants responsible, as stockholders, for the debts due by the Detroit City Bank.

The bill was demurred to, and, upon the hearing, the division between the judges occurred as above mentioned, and was certified to this court.

Nesmith et al. v. Sheldon et al.

It was argued by Mr. Seaman, for the complainants, and Mr. Romeyn, for the defendants.

Mr. Seaman, in noticing the argument of the binding authority of the decision of the Supreme Court of Michigan, said:

It is insisted by the defendants' counsel, that the case of *814] *Green v. Graves is a judicial exposition, by the Supreme Court, of the constitution of the State, and of the general banking acts passed by the State legislature, and comes within the principles established by this court in the case of Green v. Neal, reported in 6 Pet., 291. The point there decided is, that "a fixed and received construction of a statute of a State by its own courts makes a part of the statute law," citing the case of Shelby v. Guy, 11 Wheat., 361, and also a case in 7 Wheat., 361, and several other cases. This rule is adopted on account of the State statute forming a rule of property, and it applies more particularly to real estate, as is stated in 2 How., 125, and 5 Cranch, 22. As stated in 6 Pet., 298, rights are acquired under this rule, and it regulates all the transactions which come within its scope; and on page 296, referring to the case of Massie v. Watts, 6 Cranch, 165, the court says, "A_great_ proportion of the landed property of the country depends on adhering to them." The professed object of the rule is, to prevent two rules of property, and particularly in relation to real property, in the same State,-one in the State courts, and another in the national courts. This is undoubtedly desirable. The principal reason on which the rule is founded appears to be this, as referred to on pages 298 and 296 in 6 Pet., citing the case of McKeen v. Delaney in 5 Cranch, 22, that when the State courts have given a construction to their statutes, and contracts, deeds, &c., have been made in pursuance of such construction, and rights have been thus acquired and have become vested, those rights ought not to be divested and contracts invalidated by a different construction of the statute by the national courts. This is undoubtedly in accordance with the principles of natural justice, and is sound reason as well as sound law. The principle recognizes the decision of the State court as forming "part of the statute," and thereby recognizes the highest court of the State as part of the law-making power; as vested with the power of legislating and making laws, that is, of engrafting upon the enactments of the legislature new clauses and sections, explanatory of the original statutes; and that acts done, contracts made, and rights acquired under these judicial en