Rossi v. Mewshaw

Henderson, J., delivered the opinion of the Court. John A. Rossi and Frank Rossi are the owners and operators of a bus business known as Harford Motor ³²⁶ Coach Company. Since the inception of the business in 1941 they have used an advertising slogan “Ride the Rite Way”, which in 1947 was registered among the agency records of the Superior Court of Baltimore Gity. In 1946 the appellants entered into certain charter arrangements with the appellees, whereby the latter were permitted to use the slogan on their buses.

Upon the termination of the charter, the appellees agreed to discontinue use of the slogan, but did not do so. On February.-13, 1948, the appellants filed a bill of complaint, praying an injunction against the use of the slogan by the appellees, damages for the “infringement” and an accounting for all gains :or profits derived from the “wrongful action”. After answer and hearing, the Chancellor, on August 19, -1949, entered' a decree enjoining the use of the slogan and referring the matter to an auditor “to determine what, -if any, damages have'been sustained:” The complainants did not appeal from that decree. The appellees noted an appeal, but this was not' perfected.' - At the hearing before the auditor the appellants sought to require the appellees to produce their books and records, including a list of customers and their income tax returns. .The appellees declined to do so and the hearing was adjourned pending a determination on the point by the Chancellor; The Chancellor suggested that-the appellants submit a list of their cüstomers to the appellees and that the appellees disclose the names of any customers of theirs who were also customers of the appellants.

It' does not appear that any objection was taken to this suggestion and it was adopted. At a further hearing before the auditor William Mewshaw, testified that only one customer on the appellants’ list, a Mrs. Poehlman, was a customer of the appellees. Mrs. Poehlman had testified in the original hearing. Counsel for the .appellants then sought to interrogate the witness as to their dealings with Calvert Motor Goach Company, a c.odefendant in the original bill, as to whom the bill ³²⁷ had been dismissed by the Chancellor on the ground that it had never carried the slogan on its buses.

The appellees objected to the line of questioning on the ground that that company was a competitor, not a customer. The witness admitted having business relations with the company, but could not state the dollar volume of that business. After a lengthy colloquy the hearing was again adjourned. Thereafter, a further hearing was had before the Chancellor, at which the testimony before the auditor was produced.

On October 17,1949 the Chancellor passed an order that “no damages having been proven”, no damages be allowed. The appeal here is from that order. The contention of the appellants seems to be that they are entitled to an accounting for profits without proof of actual deception; that profits of the appellees during the whole period the slogan was in use is the proper measure of damages. We find no merit in this contention.

While there is a recognized distinction between profits and damages, a loose use of the terms has led to some confusion in the cases. Nims, Unfair Competition & Trade-Marks, (4th Ed.) § 419 p. 1328. In the instant case, however, there is no room for misunderstanding the exact scope of the decree of August 16, 1949. The Chancellor, in his oral opinion, said: “As to profits, what proof have we of any profits in this case that were earned through the use of the slogan ?

I will be glad to hear what they are. I do not know. I have had no direct proof of what they might be, and I do not know. If there is any substance to them, if they are substantial, I would be very glad to refer the case to an auditor to state an account and ascertain what the profits are.

I could not determine from the testimony in this case at all. I am rather inclined to believe that there should not be any profits allowed, and my viewpoint on it is this: I am perfectly satisfied from the testimony that the Mewshaws started rightfully to use this slogan, that is, they started out when they had their working agreement with the Rossi Brothers, and the ³²⁸ difficulty is that they continued to use it