which the record discloses of wrongful imposition upon purchasers of the one product for the other, since the appellee himself furnishes the key to his conduct. It is satisfactorily shown that for a long time prior to this suit purchasers inquiring for "Baker's Chocolate' would be supplied with W. H. Baker's product, and this because "we made a little more on that." Upon the commencement or threatening of the present suit, he instructed his salesmen to say to purchasers demanding "Baker's Cocoa" or "Baker's Chocolate," "We have two Bakers. Which do you want, W. H. or Walter Baker?" He also said that 9 out of 10 purchasers would not know the difference, saying, "Which is best? Give me the best." And the salesman would then furnish the W. H. Baker product. Without enlarging upon this conduct, we think it evidences a deliberate design and intention to deceive. The purchaser was entitled to that which he demanded, to that which had been approved to his taste by experience, or which he had been recommended to purchase. In the market there were no "two Bakers'" products. There was but one, and that was the product of Walter Baker & Co., Limited. The courts had enjoined William Henry Baker from using the word "Baker" alone, and had required to be prominently placed upon each package the statement that "W. H. Baker is distinct from the old chocolate manufactory of Walter Baker & Company." No such statement or representation was by the appellee directed to be made to the inquirer for "Baker's Chocolate" or "Baker's Cocoa." Instead, there is manifested a clear design to mislead and confuse the proposing purchaser with the statement that there were two "Baker" products in the market. The courts sanctioned the use by William Henry Baker of his name "Baker" upon the packages, with the explanation stated, to avoid, as far as possible, confusion of goods; but they did not sanction the use of the name "Baker" in connection with the term "chocolate" or "cocoa." We have no difficulty, therefore, in finding that the appellee, with full knowledge of the situation, sought to palm off the spurious goods as the genuine. The court below was evidently of that opinion, but by its decree enjoined the appellee from selling "any cocoa or chocolate other than that made by Walter Baker & Co., Limited, in response to requests for 'Baker's Cocoa' or 'Baker's Chocolate,' unless prior to such sale the purchaser is actually notified that the cocoa or chocolate about to be furnished is not manufactured by the old chocolate manufacturer, Walter Baker & Co." This, as we conceive, gave the appellee leave to sell the spurious article as "Baker's Cocoa" or "Baker's Chocolate," if it was accompanied by the statement that it was not manufactured by the old chocolate manufacturer, Walter Baker & Co. We may safely take it for granted that not one in a thousand knowing of or desiring to purchase "Baker's Cocoa" or "Baker's Chocolate" know of Walter Baker & Co., Limited. The name "Baker" is identified with the product, and known, in connection with the product of the appellant, as a badge and guaranty of excellence. To sanction the sale of the spurious article as "Baker's Chocolate" or "Baker's Cocoa," even if accompanied with the statement that it was manufactured

by William Henry Baker and not by the old manufacturer, Walter Baker & Co., Limited, would not inform the purchaser that it was a different article, or other than the article known to the trade and to the world as "Baker's Chocolate" and "Baker's Cocoa," and the identity of the name is the more subtle in the deception. The purchaser was entitled to that for which he had asked. We do not mean to say that it is not within the province of the seller to represent to the proposing purchaser that another article which he has is superior in excellence to that which is called for, and to induce him by proper argument or statement to purchase that other, but he must not represent such other to be the product which the purchaser had called for. In this respect we think the decree below failed to give adequate relief, and that the prayer in the amended. bill in this respect correctly states the relief to which the appellant is entitled, and safeguards the right of the appellee to sell William Henry Baker's products in a proper manner.

Prior to this suit the appellee advertised the product of William Henry Baker as "Baker's Chocolate" and "Baker's Cocoa." This was done because the name "W. H. Baker" was a new name, and the advertisement in the original name would draw the custom of persons acquainted with the product of the appellant. This was seeking to use the reputation and the good will of the appellant in the sale of the spurious product, and was an efficient means to that end. This was as much a fraud as an actual oral representation to a proposing purchaser, and should have been enjoined. Singer v. Wilson, L. R. App. Cases, 389; Jay v. Adler, 6 R. P. C., 136, 139; Mitchell v. Williams, 106 Fed. 168, 45 C. C. A. 265.

The remaining questions arise upon the directions of the decree with respect to an accounting, and the report of the master thereon, confirmed by the court.

First. The court adjudged that the complainant should recover of the defendant profits which the defendant had made, and the damages which the complainant had suffered, through the defendant's violation of complainant's right, as decreed, since May 1, 1900. The complainant below excepted to so much of that decree as limited the accounting of profits and damages by that date. This date was an arbitrary date, and no reason is suggested in the record for its selection. The evidence discloses that from December, 1898, there had been repeated infringements of the complainant's right, and, necessarily, resulting damage. The complainant was entitled to full compensation for the injury sustained. We perceive no reason why it should be debarred of recovery for the time prior to May 1, 1900. In that respect the decree was faulty.

Second. The proofs adduced to the master had reference only to the profits accruing to the defendant from the illegal sale. The question of the true measure of damages in cases of this sort is an interesting one. The injured party is entitled to full compensation for the injury, but how shall that be measured? Manifestly, the profits which the infringer has made would not in all cases be compensation to the injured. The latter's loss in part inheres in the failure to acquire a just and deserved gain; also in the injury to

the reputation of his product by reason of the substitution of the spurious article. The latter element is difficult, if not impossible, of accurate admeasurement. It can only be approximately compensated by an allowance in the nature of punitory damages, resting largely in discretion. But as to the actual loss, is it not more reasonable to say that the loss sustained is the profit which the injured party would have made if the genuine goods had been supplied, and not the profit which the party inflicting the injury actually made by the unlawful sale? That is to say, ought not the injured party to recover the difference between the cost to him of the manufacture of his article and the price at which he is able to dispose of it in the market, together with such sum as the court in its discretion should think the genuine article had lost in its reputation by substitution of the spurious article? Should not regard be had to complainant's loss, rather than to defendant's profits? Hall v. Stern (C. C.) 20 Fed. 788. It has been supposed that the measure of damages in these cases is analogous to the measure of damages allowed for infringement of a patent, but Judge Sawyer suggests that the analogy will not hold. Benkert v. Feder (C. C.) 34 Fed. 534. We are, however, spared the necessity of resolving this interesting question, since the complainant below failed to take any exception to the decree in this regard, and contented himself before the master with proving the profits which the infringer had made; and the only question presented for decision is whether the master, whose report was confirmed by the court below, was right in deducting from the gross profits made by the defendant by the sale of the spurious goods a proportionate percentage for the expense of operating the general business of the defendant. In The Tremolo Patent, 23 Wall. 518, 23 L. Ed. 97, decided in 1874, the court held, with respect to an infringement of the patent right, that, in the ascertainment of profits made from sales of an organ with a patented attachment, it was proper to prove the general expenses of the business in effecting sales of organs generally, and to deduct a ratable proportion from the profits made from the patented attachment. In Société Anonyme v. Western Distilling Co. (decided in 1891 [C. C.]) 46 Fed. 921, Judge Thayer, delivering an oral opinion, stated that the expenses of business to be allowed must be expenses necessarily incurred in the unlawful venture, which would not have been incurred but for engaging in such venture. He says that “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, no rule of law of which I am aware requires any deduction for expenses in estimating the profits of the unlawful business." He makes no reference to the decision in the Tremolo Patent, although in that case there was, as in the case before Judge Thayer, a like invasion of a right. See, also, N. K. Fairbank Co. v. Windsor (C. C.) 118 Fed. 96. Considering that the action for damages for the invasion of such right sounds in tort and not in contract, there is much force in Judge Thayer's reasoning. It does not seem quite just that the wrongdoer snould be permitted to escape without pecuniary loss to himself, and yet

we must remember that here the appellant has chosen to prove, as the basis of recovery, merely the profits which the wrongdoer has made, and in estimating those profits we feel concluded by the ruling of the ultimate tribunal, that, to ascertain the net profits accruing to the wrongdoer, as in ascertaining profits in any other case, the expense of making the sale should be deducted from the gross proceeds of the sale, upon the same principle that the cost of the spurious article is deducted from the gross receipts of its sale.

The failure to receive adequate compensation for the injury done in such case proceeds from the act of the party in seeking recovery for the profits made by the wrongdoer, rather than the loss sustained by the injured party.

The decree will be reversed, and the case remanded with a direction to the court below to render an interlocutory decree pursuant to the prayer of the amended bill, and to ascertain, according to law, the loss, injury, and damage sustained by the complainant, and to decree accordingly.

(130 Fed. 521.)

THE WILDCROFT.

(Circuit Court of Appeals, Third Circuit. May 23, 1904.)

No. 21.

1. SHIPPING-Damage to CARGO-EVIDENCE AS TO CAUSE.

A ship may sustain the burden of proof resting on her to show that cargo damage was due to a cause for which she is not liable by circumstantial evidence as to the manner in which the water causing the damage entered the hold, and in the absence of direct evidence the court is justified in adopting her theory in that respect, where the facts and circumstances shown are consistent with such theory and not consistent with any other.

2. SAME-EXEMPTION UNDER HARTER ACT-PRESUMPTION OF SEAWORTHINESS. The casting of the burden of proof on one party or the other in a given case does not destroy the presumptions in favor of a party which exist under the general law of evidence. So a shipowner, claiming exemption from liability for cargo damage under section 3 of the Harter act (Act Feb. 13, 1893, c. 105, 27 Stat. 445 [U. S. Comp. St. 1901, p. 2946]), has the burden of proving the seaworthiness of the vessel; but, in the absence of evidence to the contrary, such burden is met prima facie by the presumption that he performed his duty in making her seaworthy at the commencement of the voyage.

3. SAME-FAULT IN MANAGEMENT OF VESSEL.

Where a ship was at the commencement of a voyage in all respects seaworthy, and properly manned, equipped, and supplied, damage to a sugar cargo from fresh water which escaped into the hold where the sugar was stowed while the cargo was being discharged, by reason of a valve having been improperly left open while water from the river was being pumped into the engine tank, was due to a fault in the management of the vessel, for which she is exempted from liability by section 3 of the Harter act (Act Feb. 13, 1893, c. 105, 27 Stat. 445 [U. S. Comp. St. 1901, p. 2946]). Appeal from the District Court of the United States for the Eastern District of Pennsylvania.

See 124 Fed. 631, 126 Fed. 229.

2. Statutory exemption of shipowners from liability, see note to NordDeutscher Lloyd v. Insurance Co. of North America, 49 C. C. A. 11.

65 C.C.A.-10

H. L. Cheyney, for appellant.

J. Parker Kirlin, for appellee.

Before ACHESON, DALLAS, and GRAY, Circuit Judges.

GRAY, Circuit Judge. This is an appeal from a final decree in admiralty, by the District Court of the United States for the Eastern District of Pennsylvania, dismissing the libel of the appellant.

The suit was brought by appellant, to recover damages alleged to have been sustained with respect to a shipment of sugar on the steamship "Wildcroft," from Cuba to Philadelphia. The libelant was consignee of the sugar. The libel recites that the cargo of sugar was delivered to the steamship in good order and condition, to be carried to the port of Philadelphia, and there delivered in the same good order and condition, and that upon the arrival of the steamship at Philadelphia, a large portion of said cargo was greatly damaged by contact with water. The libel charges that said damage was due to the unseaworthiness of said vessel at the commencement of said voyage.

The defense here relied upon is, that the goods were carried forward under bills of lading that contained this clause: "All accident, loss and damage whatsoever from machinery, boilers and steam navigation, or from perils of the seas and rivers, or from any act, neglect or default whatsoever of the pilot, master or mariners, being excepted;" that the vessel was in every way seaworthy at the commencement of the voyage, and that the damage to the cargo was caused by perils of the sea and navigation, within the exceptions in the bills of lading. The alternative defense is urged, that if the damage was caused or contributed to by any faults of those in charge of the vessel, the vessel was protected from responsibility therefor, by the terms of the act of Congress, approved February 13, 1893, called the "Harter Act." Act Feb. 13, 1893, c. 105, § 1, 27 Stat. 445 [U. S. Comp. St. 1901, p. 2946].

We take the following statement of the case from the opinion of the learned judge of the court below:

In April, 1901, the Wildcroft, having discharged a cargo of coal in Havana, proceeded to Cardenas and Matanzas, where she loaded sugar in bags, consigned to the libelant. The sugar in controversy was stowed in No. 3 and No. 4 holds, and some of it was found, while being discharged, to have been damaged by water. It does not appear precisely how much of the cargo was damaged. Apparently the bulk of it was sound. But, at the top of No. 3 hatch, on the starboard side, the sugar was wet all across the hatchway to a depth of about 8 feet. Under the starboard ventilator of the same hold, a burrow, caused by water, extended down about 8 feet. Under this there was a layer of sound cargo down to a point about 3 feet from the bottom. On the bottom of No. 4 hold also, as well as of No. 3, there was a layer of damaged cargo about 3 feet thick. There was no damage elsewhere in No. 4. In each hold the damage at the bottom was on the starboard side of the tunnel. The damage at the top of No. 3 hold was caused by salt water that found its way into the hold on April 19th in the manner hereafter stated. The damage at the bottom of the holds, however, was caused by fresh water, the marks on the bulkheads showing that both holds had been flooded to a height of 2 to 4 feet. In order to determine how water, either salt or fresh, may have found its way into these holds, it is desirable to refer to the construction of the vessel in some respects, and also to the circumstances of the voyage. The Wildcroft has four holds, two on the fore side of the engine room tank, and two on the after side.