Societe Anonyme v. Western Distilling Co.

46 F. 921, 1891 U.S. App. LEXIS 1370

Opinion

Thayer, J.,

(orally.) The chief contention in this case arises over the refusal of the master to make allowance for certain expenses, in his computation of the profits realized by the defendant by imitating complainant’s labels, brands, trade-marks, etc. I have looked into this matter, and reached the following conclusion: That while it is customary in the computation' of profits in this class of cases to make allowance for expenses, yet the expenses so allowed must be expenses necessarily incurred in the unlawful venture, which would not have been incurred but for engaging in such venture. When an unlawful business is carried on in connection with the defendant’s regular business,, and the same agencies are employed in doing that which is lawful and that which is unlawful, ho rule of law of which I am aware requires any deduction for expenses in estimating the profits of the unlawful business. In this case defendant was a distilling company. It had a place of business, a license for doing business, traveling salesmen, etc. The proof does not convince me that any additional expenses were incurred by the defendant in the manufacture and sale of Benedictine, other than such as the master has allowed. The manufacture of Benedictine was carried on in connection with its ordinary business, by the usual number of employes. The unlawful venture increased the gross profits without swelling the gross expenses. Furthermore, the wrongful act in question was committed knowingly, without a shadow of excuse.

Under the circumstances, I am compelled to agree with the master on this and all other points covered by the report.