The opinion of the court was delivered by: MCGOHEY
The complaint seeks rescission of a contract between the plaintiff and the defendant's assignor, damages for its alleged breach by the defendant, accounting of defendant's profits, a permanent injunction and counsel fees as provided for in the contract. The plaintiff, an impressario and promoter of musical presentations and jazz concerts, is a citizen of California. The defendant, a citizen of New York, manufactures phonograph records and sells them at retail to the public. The amount in controversy is sufficient for diversity jurisdiction.
The plaintiff has produced and presented concerts in from 35 to 50 cities throughout the United States annually from 1945 to the present, under the designation 'Norman Granz' Jazz At The Philharmonic' have since 1945 become associated in the public mind with the plaintiff, and denote a performance by jazz musicians organized, supervised and presented by him. In the presentation of these concerts the plaintiff hired the performing musicians, paid their salaries, rented the concert hall, advertised the presentation, and sold admission tickets. He selected the musical compositions to be played, and during the performances directed the order in which each instrumentalist performed and the general manner of the musical rendition. He also acted as master of ceremonies.
Prior to August 15, 1945, the plaintiff caused to be made a recording of a complete three-hour concert given in Los Angeles, California, by 'Jazz At The Philharmonic.' This was made on a sixteen-inch acetate disc revolving at the rate of 33 1/3 revolutions per minute. In the phonograph record industry such an acetate disc is known as a 'master' presumably because it can be and generally is used in the first step of the process of manufacturing ordinary disc phonograph records. In that process each acetate master is electroplated to produce a metal master, which in turn is electroplated to produce a metal mother, which in turn is electroplated to produce a metal stamper, which is used in a pressing machine to stamp out the shellac commercial disc phonograph record. A record thus manufactured will be the same size as its master and will play properly only when revolving at the same number of revolutions per minute. Thus if the sixteen-inch master had been used in this process it could have produced only six-teen-inch records playable at 33 1/3 revolutions per minute. A master can also, however, be played on a phonograph like an ordinary record. When so played its content can be re-recorded in whole or in part on new acetate records or masters of different sizes and revolving at different speeds. That indeed is how the plaintiff used the sixteen-inch master. He re-recorded on new twelve-inch masters revolving at 78 revolutions per minute, that part of the sixteen-inch master containing the rendition of two musical compositions entitled 'How High The Moon' and 'Lady Be Good' together with the audience reaction which followed the playing of each. Three twelve-inch masters were required for each composition. these six-twelve-inch masters were transferred to one Moe Asch pursuant to an agreement dated August 15, 1945. Asch thereafter assigned the agreement to the defendant and delivered to him the six masters which are hereafter referred to as the 'subject masters.'
The agreement provides in part as follows:
'That Whereas, the parties hereto are desirous of entering into a written contract confirming the oral arrangement heretofore made by and between them respecting the terms and conditions concerning the sale by the first party to the second party of certain record masters comprising the following tunes: 'How High The Moon' and 'Lady Be Good';
'Now, Therefore, for and in consideration of the mutual covenants to be kept and performed by the parties hereto, the parties agree as follows:
'(1) First party hereby and herein agrees to sell to the said second party, and second party agrees to buy from first party, those certain masters of record album generally known and described as 'Jazz At The Philharmonic,' which includes only Volume 1.
'(2) In connection with the use by the second party of said album, it is distinctly understood and agreed that at all times in connection with its said use, second party shall use the terms 'Presented by Norman Granz.'
'(3) It is also understood and agreed that at all times the album so sold must contain the original explanatory notes as written by first party herein, without any changes of any kind, without the written permission of the first party herein.
'(4) It is understood and agreed that in the event any of said masters are sold, that the purchaser or purchasers shall be bound by all the terms, conditions and provisions of this agreement.
'(5) In consideration of the sale of said masters as aforesaid, the said second party agrees to cause to be paid to first party the following sum of money: * * .'
The money consisted of $ 1850 payable on or before December 15, 1945 and, in addition, royalties of fifteen cents or five cents for each record sold at retail depending on its retail price. Royalties were to be adjusted upward if production costs decreased. There is also a provision for counsel fees if plaintiff be required to engage an attorney to enforce any of the terms of the agreement.
On February 28, 1947, the present parties, by written stipulation, amended the agreement so as to relieve the defendant, upon payment of $ 5,500 which he then made, from ...