Evidence, Best and secondary. Equity Jurisdiction, To restrain unfair competition, Accounting for profits, Damages.
In a suit in equity by a corporation to restrain the defendant from selling certain goods in packages made in imitation of those of the plaintiff, upon the question of the loss of profits to the plaintiff, a witness, who was the plaintiff's secretary and general manager, may be allowed to testify from memory as to the cost of production and the selling price of the goods produced by the plaintiff, if he is testifying from his personal knowledge, although books and records kept by the witness contain written statements of the same facts; and, if he is unable to recall certain items of expense, such as telegrams and express charges, which entered into the cost of the goods, this does not show conclusively that he has not such personal knowledge, because he may know the total cost without remembering all the details that went to make it up.
In a suit in equity to restrain the defendant from selling certain goods in packages made in imitation of those of the plaintiff, where the plaintiff seeks damages as well as an accounting for profits unlawfully obtained by the defendant, the plaintiff, if he prevails, although he may recover both damages and profits so far as this may be necessary for his full compensation, cannot recover as damages the profits which he would have realized if he had made the sales that were made wrongfully by the defendant and also recover the profits that the defendant made on the same sales. If the plaintiff suffered loss or damage from the defendant's acts for which the receipt of the defendant's profits will not compensate him, he is entitled to recover this additional amount as damages, but he cannot be allowed to recover twice for the same loss.
SHELDON, J.
Upon the finding of the master the witness Woodsum properly was allowed to testify as to the selling price and the cost of the plaintiff's product. He testified from his personal knowledge; and, that being so, his testimony was competent, although books and records kept by him contained written statements of the same facts. That he could not recall certain items of general expense, such as telegrams and expressage, which entered into the average cost of the goods, did not show conclusively that he had not such knowledge. He might know the total amount without being able to remember all the minor items that went to make up that amount. The case does not come within the rule of Hunt v. Roylance, 11 Cush. 117, relied on by the defendant. Nor was the plaintiff bound to produce voluntarily these books and records, although it might have been compelled to do so by proper process.
At the argument before us the plaintiff contended that it was entitled to recover from the defendant both the damages which it has sustained from the defendant's wrongful use of its trade name and the amount of the profits realized by the defendant therefrom. We agree that the plaintiff is so entitled, so far as this may be necessary for its full compensation. Regis v. H.A. Jaynes Co. 191 Mass. 245, 250. Forster Manuf. Co. v. Cutter-Tower Co. 211 Mass. 219, 223. But this does not mean that the plaintiff may recover from the defendant both the amount of the latter's profits as such and also damages assessed upon the theory that the plaintiff, but for the defendant's wrongful acts, would have made the sales which have been made by the defendant, and so is entitled to recover an additional amount for the profits which it has lost. It may not recover a double compensation for the same sales. The plaintiff is not to derive a double gain from the defendant's sales, by recovering in addition to the profits made by the defendant from its sales those which by reason of the same sales the plaintiff has lost the opportunity of making. This would be a manifest injustice. The plaintiff in such a case as this may to be sure have suffered some particular loss or damage for which the receipt of the defendant's profits would not compensate him. If, for example, the defendant has attempted to undersell him, has introduced what sometimes is called a "cut-throat competition," thus cutting down the plaintiff's profits without correspondingly increasing his own, or if the defendant has cheapened his production by the use of inferior materials or by unsuitable processes of manufacture, and thus has depreciated the value of the plaintiff's trade name or of the words or symbols to which the plaintiff has acquired a right, or otherwise has injured the reputation of the plaintiff's goods and thereby caused an appreciable loss to the maker, in addition to that caused by the actual sales which the defendant has made, the plaintiff should be allowed to recover for such a loss besides taking the defendant's profits, if the plaintiff has claimed and is allowed such profits. And this plaintiff appears to have suffered substantial damages, exceeding the defendant's profits. But these damages as assessed include the profits which the plaintiff would have realized, if it had made, with certain exceptions, all the sales of infringing goods that were made by the defendant. See L. Martin Co. v. L. Martin Wilckes Co. 5 Buch. 257, 260, et seq. It follows that the plaintiff may recover only the amount of damages and the amount of the defendant's profits on the excepted sales, being the additional sum of $195.93, with interest. The result is that none of the defendant's exceptions to the master's report which have been argued can be sustained; but the final decree appealed from must be modified, as in Nelson v. J.H. Winchell Co. 203 Mass. 75, 93, by deducting therefrom the allowance of $311.59 to the plaintiff with interest thereon; and the decree so modified must be affirmed.
So ordered.