Court Opinion

ID: 8757810
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:53:58.594551+00
Date Added: 2024-06-11T17:01:21.998823
License: Public Domain

COXE, Circuit Judge
(after stating the facts). The two propositions principally relied upon by the defendant are:
First. That the recovery should be limited to the specific profits derived from the use of the red and blue label as distinguished from the use of the name “Hunyadi,” the capsule and the size and shape of the bottle. As no testimony has been adduced showing the proportion of profits attributable to the label alone it is argued that nominal damages only can be recovered.
*24Second. That the master erred in charging the traveling expenses and salaries of salesmen employed by the defendant to the general expense account rather than to the Hunyadi department alone, which represented only about one-tenth of the defendant’s business.
Neither of these contentions can be maintained. The label adopted by the defendant has been denounced by the courts as fraudulent and devised for the express purpose of enabling the defendant to trade on the good will established by the complainant. Had the defendant honestly intended to sell the bitter water imported by it on its merits it would not have dressed up its goods in such a way that even the intelligent and wary customer might be deceived. It might, for instance, have sold its water in ordinary bottles of the Apollinaris type, with a wdiite oval label containing the words “Hunyadi Matyas” in black letters; but this it did not do and there is no evidence that the competing waters were ever sold in this country on their merits, viz.: in packages which clearly differentiated them from the complainant’s water. The evident intent and purpose of the defendant was to poach on the reputation established by the Hunyadi Janos water. It started out to get a part of the complainant’s profits and it succeeded, but we are familiar with no principle of law which will permit it to keep these profits. One who has fraudulently appropriated the trade-marks and labels of another will hardly be heard to say that he would have been equally successful had he used honest indicia and labels. It would be casting an intolerable burden upon the complainant in such cases if, after proving the fraud, the infringement and.the profits, he were compelled to enter the realms of speculation and prove the precise proportion of the infringer’s gains attributable to his infringement. The argument reduces itself to this: The defendant says: “If I had been honest I could have sold at least a part of these goods and as you have failed to show what that part is you are entitled to recover nothing.” The answer is: “You were not honest.” If authority be needed in support of the complainant’s contention it will be found in the decision of the Supreme Court in this case. 179 U. S. 19, 21 Sup. Ct. 7, 45 L. Ed. 60.
During the period of the accounting the defendant sold 2,512,550 bottles of Hunyadi water. The testimony shows that this branch of the business was considered by the defendant’s officers as both successful and lucrative. It is incredible that the shrewd business men in charge of the defendant company would continue a business for nine years which, according to the figures presented by them to the master, showed, with one exception, an annual loss and resulted in a total loss of $'34,304. These figures were produced by adding to the cost of selling Hunyadi water items which should be added to the general expense of the business rather than to the water account alone. No separate account of the expenses of the water department was kept and the figures reported by the master were reached after marshaling the various items under the appropriate head. In a few instances items were charged to the water account, but the traveling expenses of salesmen were not among them. Naturally this should be so, for there can be no doubt that *25these salesmen sold all the commodities dealt in by the defendant. One of them, in contradiction of the defendant’s president, testified that he was paid by salary and not by commissions on the sale of Hunyadi water and that he sold about ten times as much Hoff’s Malt Extract as Hunyadi water. Another salesman contradicts the defendant’s president in other particulars. No one is called to corroborate him.
The subject of expenses presents simply a question of fact which was properly disposed of by the master. His report is most fair and conservative; as favorable to the defendant as it has any right to expect and we see no reason to disturb his findings. The great weight of testimony justifies the conclusion that the expenses of salesmen should be charged “to the general expense column whereby Hunyadi gets its proportionate credit.”
The decree is affirmed.