the jurisdiction of the District Courts for remedial purposes. Therefore it becomes necessary to ascertain what the act itself provides as conditions precedent to the exercise of jurisdiction. It will simplify an interpretation to pare the act of irrelevant words and amplifications and read it as applicable to the case in hand. It reads substantially: District Courts shall have original jurisdiction of suits of insurance companies, on bills of interpleader duly verified, when it is made to appear that one or more persons bona fide claimants against such company reside within the jurisdiction of the court and holds a policy in said company for at least five hundred dollars insurance payable to a beneficiary, or to the heirs, next of kin or legal representative of the insured, and it further appearing that two or more persons, citizens of different states, are adverse claimants to such insurance, and such insurance company deposits the amount of such insurance with the clerk of the court to abide the judgment thereof. Such court shall have the power to issue process to said claimants, returnable as the court shall determine, which shall be served by the marshal of the districts wherein the respective claimants reside. Said courts shall have power to hear and decide upon the said bill of interpleader according to the practice in equity. The court may discharge complainant from further liability upon payment of such insurance as directed less complainants' actual court costs; and the court shall have power to make such further orders and decrees as may be suitable and issue the necessary writs for the enforcement of its decrees: Provided, that in all cases where a beneficiary is named in the policy, or when the same has been assigned and written notice thereof shall have been given to the company, the bill of interpleader shall be filed in the district where (such) the beneficiary may reside.

It must be assumed that Congress had in contemplation the office and scope, extent and limitations, of the common-law interpleader as generally recognized in the equity practice, and by this legislation has sought to confer upon the District Courts jurisdiction of special cases and predicates that jurisdiction upon certain expressed conditions made. primarily to appear. The statute, besides partaking somewhat of an innovation on the common law, authorizes extraordinary remedies, and should, I think, be construed so as to accomplish the purpose aimed at, yet, being limited to certain cases on certain conditions, those prerequisite conditions enumerated in the act should be made to appear as preliminary to the exercise of jurisdiction.

*

It is plain from the language of the statute that Congress did not intend to leave the matter of venue in such cases to the will of claimants. In order to protect the insurance company from defending a multiplicity of suits, the statute authorized the insurance company to file its bill of interpleader in a District Court of the United States, "where it is made to appear by such bill that one or more bona fide claimants against such company * * * reside within the jurisdiction of said court." This provision fixes the venue of the suit, in the district of residence of either of the bona fide claimants, except in certain cases embraced in the last proviso of the statute. Undoubtedly if the statute had no further provision in it as to the venue of the action than that above noted, the insurance company might file a bill of interpleader in any District Court of the United States wherein resided a bona fide claimant. Congress, recognizing that the claims of "bona fide claimants" may not stand on a parity, sought in the last provision of the statute to favor one class of claimants; for it is provided that:

or

"In all cases where a beneficiary or beneficiaries are named where the same has been assigned and written notice thereof shall have been given to the insurance company the bill of interpleader shall

be filed in the district where (such) the beneficiary may reside." Here the claim of the defendant Henderson is based upon an assignment, of which the insurance company had actual notice, which is made to appear by the bill of interpleader, with attached exhibits showing the insurance company a party to such assignment. The claim of the Rt. Rev. Edward P. Allen is based upon the last will and testament of the insured. It can hardly be doubted that the intention of Congress in adding the last proviso to the statute was for the purpose of meeting such a contingency. Its object was doubtless to reward the claimant who had been diligent, the claimant who had acted himself in order to receive the benefits of the insurance company's obligation, as distinguished from the party who presumably had no knowledge of the benefits to be derived from the payment of the insurance policy until advised of the bequest after the policy had become payable. The party to whom the assignment was made, and accepted by the insurance company, received a vested right to the payment of the fund. This right to payment vested under such an assignment prior to death of the insured. Therefore the liability of the insurance company to the assignee was fixed. The payment only was subject to the happening of an event which was certain, though the time thereof, the death of the insured, might be indefinite. In my opinion the venue of plaintiffs' suit is clearly indicated in the proviso found in the last clause of the statute, in the nature of an exception, viz. :

*

"Provided. that in all cases where a beneficiary or beneficiaries are named in the policy, or where the same has been assigned and written notice thereof shall have been given to the insurance company, the bill of interpleader shall be filed in the district where (such) the beneficiary or beneficiaries may reside."

The record shows that Otto Joseph Dus had assigned the policy to Winifred Henderson, and notice thereof had been given to the insurance company The proviso would seem to recognize the residence of the beneficiary named in the policy or his assignee designated to the company as fixing the district of proper venue for plaintiffs' suit. Interpreting the act as a whole, it is obvious that the word "the" was used by the lawmakers as the equivalent of "such." This meaning is consistent with, and more in harmony with, the apparent purpose of

the act.

The plaintiff failed to complete the jurisdiction of this court by not making the required deposit, the sine qua non for power in this court to issue process. The court is without jurisdiction of the subjectmatter. The restraining orders will be dissolved, and the bill dismissed.

HOWARD DUSTLESS DUSTER CO. v. CARLETON et al

(District Court, D. Connecticut.

October 6, 1916.)

No. 1342.

1. TRADE-MARKS AND TRADE-NAMES 98-UNFAIR COMPETITION-RECOVERY OF PROFITS-SHOWING OF LOST SALES.

A showing of lost profits in a trade-mark or unfair competition case is not the foundation of plaintiff's right of recovery, and in an unfair competition case plaintiff was entitled to recover profits though it did not show any lost sales.

2. TRADE-MARKS AND TRADE-NAMES 93(1)—UNLAWFUL COMPETITION-PRE

SUMPTION

There was a prima facie presumption that the sales of all dust cloths by defendants bearing wrapper, packing, etc., infringing on the wrapping and packing of plaintiff's goods, and so constituting unfair competition, were due to the wrapping, packing, etc., and any contrary evidence should have been produced by defendants.

3. TRADE-MARKS AND TRADE-NAMES 98-UNLAWFUL COMPETITION-DISALLOWANCE OF COST ITEMS TO DEFENDANT.

In a suit for unlawful competition by selling dustless dusters in wrapper, packing, etc., resembling those on plaintiff's, the master properly disallowed all cost items of the defendant which manufactured the infringing goods, such defendant stating in its affidavit that it was unable to state the exact profits on any one branch of goods manufactured, since damages in unfair competition suits include all sales made of the goods sold in the simulated trade-mark or package in violation of the original proprietor's rights, so that the question as to the exact profits of any one branch of the goods manufactured is immaterial, especially where it could not be ascertained with any reasonable certainty how much was due to the trade-mark and how much to the intrinsic value of the commodity.

4. TRADE-MARKS AND TRADE-NAMES 98-UNFAIR COMPETITION-PRIMA FACIE ACCOUNT.

In a suit for unfair competition by selling dustless dusters packed so as to simulate plaintiff's, defendant's account and affidavit, presented before the master under Court Rule 63 (198 Fed. xxxvii, 115 C. C. A. xxxvii), showing first, the amount of sales, second, that some profits were made and third, that defendant's treasurer could not more than estimate the amount, made a prima facie account for plaintiff, casting the burden of proof on defendant.

In Equity. Suit by the Howard Dustless Duster Company against L. Clinton Carleton and the Tate Manufacturing Company. On defendants' exceptions to the report of the master. Order directed overruling the exceptions and confirming the report.

See, also, 219 Fed. 913.

Oliver Mitchell, of Boston, Mass., for plaintiff.

Willard B. Luther, of Boston, Mass., for defendants.

THOMAS, District Judge. This case is now before the court on defendants' exceptions to the report of the master, to whom it was referred after the entry of the interlocutory judgment awarding the plaintiff an injunction. The injunction was granted on the theory that although the defendant the Tate Manufacturing Company had the full

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indaxes 244 F.--56

right to manufacture and sell its black dust cloth so long as it did not furnish it in a package resembling that of the plaintiff, yet

"if the Tate Manufacturing Company has made and sold its dust cloths to Carleton, which the latter sold, so that they may or have been actually used by Carleton so as to mislead the public, it became a joint tort-feasor with Carleton and is guilty of contributory infringement of plaintiff's rights, the means of deceiving purchasers giving a right of action."

The defendants thereupon presented before the master their account in the form of debit and credit, following the practice as directed in Equity Rule 63 (198 Fed. xxxvii, 115 C. C. A. xxxvii), and no examination was had vive voce or upon interrogatories, and no evidence was offered by the plaintiff.

The master thereupon filed his report, finding profits due from the Tate Manufacturing Company in the sum of $434.63, and from Carleton in the sum of $90. The Tate Manufacturing Company has alone excepted to this report, filing two exceptions which raise substantially the following points: First, that the plaintiff, not having shown that it has lost any sales it otherwise would have made but for the acts of this defendant, is entitled to a merely nominal award for damages, and is not entitled to recover any profits whatever; and, second, that the master erred in finding on the uncontroverted affidavit of the Tate Manufacturing Company, the same being incorporated in his report, that its affidavit of cost in connection with the manufacture of dust cloths was too indefinite and uncertain to be allowed as to any of its items, whereas most of these are entirely definite and all are uncontradicted.

[1] 1. The defendant bases its argument upon the erroneous assumption that the showing of lost profits in a trade-mark or unfair competition case is the foundation of the plaintiff's right of recovery. In Benkert v. Feder (C. C.) 34 Fed. 534, Judge Sawyer held that there was no just analogy between the infringement of a patent for a machine and a trade-mark (and trade-mark infringement is but a specific form of unfair competition), and that the owner of a trade-mark is entitled to recover of an infringer, the profits arising from the sale of the spurious goods with the trade-mark impressed upon them, and is not limited to the difference between the price for which the spurious goods would sell with, and the price of the same goods without the trade-mark impressed upon them. In the course of his opinion (34 Fed. at page 535), the learned judge said:

"To adopt as the measure of compensation for such injuries the difference between the price for which the spurious goods would sell without the trademark and for which they will sell with it imprinted thereon would be a mockery of justice. In my judgment the infringer should at least account for the entire profits made upon the goods wrongfully sold with the trade-mark impressed thereon. And this is the rule established, after mature consideration. in Graham v. Plate, 40 Cal. 598 [6 Am. Rep. 639], and Sawyer v. Kellogg (C. C.) 9 Fed. 601. There may also be damages beyond the mere profits resulting to the owner of the trade-mark infringed, which he may recover. See, also Cod. Trade-Marks, pars. 237, 246. I do not think there is any just analogy with respect to profits and damages between the infringement of a trade-mark and a patent for an improvement in a machine. A machine may embrace inven tions for half a dozen improvements, for each of which there is a patent held by different individuals. One machine might infringe them all. In such case, each would be entitled to recover the profits attributable to his own inven

tion, and not the profits made upon the machine as an entirety. There is no analogy to such a case on the infringement of a trade-mark. The infringer fraudulently attaching another man's property to his own occasions only a confusion of property with a view of taking advantage of that other's property. The trade-mark sells the whole article, however inferior or injurious in that particular, and prevents the sale of the owner's goods of equal amount. At least that is the fraudulent purpose, and the natural tendency, whether always accomplished or not; and the injured party should have at least the whole profit resulting from the wrongful act, and such I understand and hold the rule to be. The damage may be much more arising from destroying the reputation of the owner's goods."

This opinion was subsequently affirmed by the Circuit Court of Ap peals for the Ninth Circuit in 70 Fed. 613.

To the same effect is the decision of the Supreme Judicial Court of Massachusetts in Reading Stove Works v. Howes, 201 Mass. 437, 87 N. E. 751, 21 L. R. A. (N. S.) 979, where it is held that a manufacturer of detachable parts of stoves, who wrongfully sells such parts as the product of another manufacturer by making them with the trademark and trade-name of such other manufacturer, is liable in a suit in equity to account for the entire profits, if any, which he has derived from the sale of parts bearing the infringing marks. Another case directly in point is W. R. Lynn Shoe Co. v. Auburn-Lynn Shoe Co., 100 Me. 461, 62 Atl. 499, 4 L. R. A. (N. S.) 960, where it is held, as well settled, that the profits recoverable in equity for unfair competition are governed by the same rule as the cases of trade-marks, and that:

"The rule which now prevails in the equity courts, respecting the wrongdoer's accountability for the 'profits and damages' resulting from his unlawful acts, requires the master not only to take an account of all profits made by the defendant, but also to make an inquiry in regard to all damages sustained by the plaintiff on account of the defendant's wrongful acts, and since it cannot be ascertained with any reasonable certainty how much of the profit is due to the trade-mark and how much to the intrinsic value of the commodity, the whole will be awarded to the plaintiff. It is equally well settled that the profits recoverable in equity for unfair competition are governed by the same rule as in cases of infringement of trade-marks, and are not limited to such as accrue from sales in which it is shown that the customer is actually deceived, but include all made on the goods sold in the simulated dress or package, and in violation of the rights of the original proprietor. Fairbank Co. v. Windsor [C. C.] 118 Fed. 96; Benkert v. Feder [C. C.] 34 Fed. 534; Williams v. Mitchell, 106 Fed. 168 [45 C. C. A. 265]; Sawyer v. Kellogg [C. C.] 9 Fed. 601; Saxlehner v. Eisner & Mendelson Co., 179 U. S. 19 [21 Sup. Ct. 7, 45 L. Ed. 60]; Singer Mfg. Co. v. June Mfg. Co., 163 U. S. 169 [16 Sup. Ct. 1002, 41 L. Ed. 118]; Graham v. Plate, 40 Cal. 593 [6 Am. Rep. 639]; Avery v. Meikle, 85 Ky. 435 [3 S. W. 609, 7 Am. St. Rep. 604]; McLean v. Fleming, 96 U. S. 437 [(245) 24 L. Ed. 828]."

Other decisions bearing out this proposition are Regis v. Jaynes, 191 Mass. 245, 249, 77 N. E. 774; Lever v. Goodwin, 36 Ch. Div. 1; Hamilton Shoe Co. v. Wolf Bros., 240 U. S. 251, 261, 36 Sup. Ct. 269, 60 L. Ed. 629.

Under this rule it seems clear that there was no error on the part of the master in refusing to rule that the plaintiff, not having shown that it would have sold to any of the parties to whom Carleton sold, is not entitled to recover any profits whatsoever.

[2] Moreover, there was the prima facie presumption that the sales