Grand Lodge IBPO Elks v. Grand Lodge IBPO Elks, 3105.

• Citation: 50 F.2d 860
• Decision Date: 19 June 1931
• Docket Number: No. 3105.,3105.
• Parties: GRAND LODGE OF IMPROVED, BENEVOLENT AND PROTECTIVE ORDER OF ELKS OF THE WORLD v. GRAND LODGE, IMPROVED, BENEVOLENT AND PROTECTIVE ORDER OF ELKS OF THE WORLD, Inc., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

50 F.2d 860 (1931)

GRAND LODGE OF IMPROVED, BENEVOLENT AND PROTECTIVE ORDER OF ELKS OF THE WORLD v. GRAND LODGE, IMPROVED, BENEVOLENT AND PROTECTIVE ORDER OF ELKS OF THE WORLD, Inc., et al.

No. 3105.

Circuit Court of Appeals, Fourth Circuit.

June 19, 1931.

T. G. Nutter, of Charleston, W. Va., and Perry W. Howard, of Washington, D. C. (George E. C. Hayes, of Washington, D. C., and W. C. Hueston, on the brief), for appellant.

James T. Carter, of Baltimore, Md. (J. R. Pollard, of Richmond, Va., and W. W. Foreman, on the brief), for appellees.

Before PARKER, Circuit Judge, and WEBB and GLENN, District Judges.

PARKER, Circuit Judge.

This suit was instituted in the court below by the Grand Lodge of Improved Benevolent and Protective Order of Elks of the World, a New Jersey corporation, against the Grand Lodge, Improved, Benevolent and Protective Order of Elks of the World, a corporation of Virginia, and James T. Carter, Leon A. Reid, Joseph R. Pollard, and John B. Neblett, citizens of that state. The purpose of the suit was to enjoin defendants from using the corporate name of complainant. Defendants denied that the New Jersey corporation was the real party in interest, and averred that the Grand Lodge of Improved, Benevolent and Protective Order of Elks of the World, whether incorporated in New Jersey or not, had no such property in that name as was entitled to protection from use by defendants. From a decree denying the injunction prayed, dissolving a temporary restraining order and dismissing the bill, complainant has appealed.

From the pleadings and proof it appears that complainant is a colored fraternal order with lodges in various parts of the United States and a membership of some 200,000 persons. It is governed by a Grand Lodge, composed of representatives elected by the various local lodges, which are bound together not only by their connection with the Grand Lodge, but also by connection with state associations, sometimes called state grand lodges, composed of the local lodges of the various states. The state associations, however, have none of the powers of government of the order, all of which are vested in the Grand Lodge. In the extension of membership, the name of the order is of great value to it, as under that name it has acquired a reputation for fraternal and charitable work which appeals to those from whom its membership is recruited.

Complainant is incorporated under the laws of New Jersey. The order has obtained charters under the laws of Ohio, New York, and the District of Columbia also. State associations of lodges, including those in Virginia, have obtained charters under the laws of various other states; but, so far as we can gather from the record, only the charters granted by New Jersey, New York, Ohio, and the District of Columbia were intended to give corporate existence to the national order. It is undoubtedly the national order which is the complainant here; and it is suing as a New Jersey corporation under the charter granted it by that state.

The individual defendants are citizens of Virginia, and the corporate defendant is a corporation organized under the laws of that state in the year 1929. It appears that at the 1929 meeting of the Grand Lodge of complainant, certain representatives from Virginia became aggrieved at action taken by the Grand Lodge and attempted to secede from the order and set up, under what is practically the same name, an independent order to offer "a harbor of refuge" to the members of the original order who were opposed to its administration. The questions presented by the appeal are (1) whether the complainant suing as a New Jersey corporation has any standing as such in this court; and (2) whether complainant has such rights in the name of the order as are entitled to protection by a court of equity against the efforts of seceding members to operate thereunder. We think that both of these questions must be answered in the affirmative.

As heretofore stated, there is no question but that the Grand Lodge representing the national order is the real party in interest in the suit. We think it equally clear that the New Jersey corporation, in whose name suit is brought, is an incorporation of the Grand Lodge representing the national order. A number of witnesses so testify, and it is significant that the certificate of incorporation is signed by as many citizens of New York as of New Jersey and contains the provision that the corporation shall have power to conduct and supervise subordinate lodges "throughout the United States and Canada, which lodges shall have the same powers as are herein conferred, but shall be subject to and under the control of the Grand Lodge."

The fact that the order is incorporated also in Ohio, New York, and the District of Columbia does not impair its rights under its New Jersey charter; nor does such fact limit the right of the New Jersey corporation to sue in the courts, except that, in the other states in which the Grand Lodge is incorporated, the New Jersey corporation would not be heard to invoke the jurisdiction of the federal courts on the ground of diversity of citizenship. St. Joseph & Grand Island Railroad v. Steele, 167 U. S. 659, 17 S. Ct. 925, 42 L. Ed. 315; Patch v. Wabash R. Co., 207 U. S. 277, 28 S. Ct. 80, 52 L. Ed. 204, 12 Ann. Cas. 518. The effect of incorporation in other states is merely to give the order corporate existence in those states. That the same persons may incorporate under the same name in two or more states is too well settled to admit of discussion. The corporations thus formed have legal existence, of course, only within the jurisdiction of the states which have brought them into being; but a charter obtained from one state is not forfeited by reason of the fact that a charter is obtained from another, nor is the right to resort to the federal courts, with the exception above noted, in any wise impaired. 14A C. J. 1228 et seq.; 1 Fletcher Cyc. Corporations 837; Nashua, etc., R. Co. v. Boston, etc., R. Corp., 136 U. S. 356, 375, 10 S. Ct. 1004, 1008, 34 L. Ed. 363. Familiar illustration of these principles is the practice of interstate railroads to incorporate under the laws of a number of states. 14A C. J. 1227; Patch v. Wabash R. Co., supra; Nashua, etc., R. Co. v. Boston, etc., R. Corp., supra; Memphis & Charleston R. R. Co. v. Alabama, 107 U. S. 581, 2 S. Ct. 432, 27 L. Ed. 518; Muller v. Dows, 94 U. S. 444, 24 L. Ed. 207; Chicago & N. W. Railway Co. v. Whitton, 13 Wall. 270, 20 L. Ed. 571; Baltimore, etc., R. Co. v. Harris, 12 Wall. 65, 20 L. Ed. 354; Lake Shore & M. S. Ry. Co. v. Eder (C. C. A. 6th) 174 F. 944; Boston & M. R. Co. v. Hurd (C. C. A. 1st) 108 F. 116, 56 L. R. A. 193; Farnum v. Blackstone Canal Corp., 1 Sumn. 46, 8 Fed. Cas. 1059, No. 4,675. As said by Mr. Justice Field in the Nashua Railroad Case: "There are many decisions, both of the federal and state courts, which establish the rule that, however closely two corporations of different states may unite their interests, and though even the stockholders of the one may become the stockholders of the other, and their business be conducted by the same directors, the separate identity of each as a corporation of the state by which it was created, and as a citizen of that state, is not thereby lost."

In the case of Farnum v. Blackstone Canal Corp., supra, Mr. Justice Story said: "Although, in virtue of these several acts, the corporations one of Rhode Island and one of Massachusetts, acquired a unity of interests, it by no means follows, that they ceased to exist as distinct and different corporations. Their powers, their rights, their privileges, their duties, remained distinct and several, as before, according to their respective acts of incorporation. Neither could exercise the rights, powers, or privileges conferred on the other. There was no corporate identity. Neither was merged in the other. If it were otherwise, which became merged? The acts of incorporation create no merger, and neither is pointed out as survivor or successor. We must treat the case, then, as one of distinct corporations, acting within the sphere of their respective charters for purposes of common interest, and not as a case where all the powers of both were concentrated in one. The union was of interests and stocks, and not a surrender of personal identity or corporate existence by either corporation."

Coming to the merits, it is well established that a benevolent, fraternal, or social organization will be protected in the use of its name by injunction restraining another organization from using the same or another name so similar as to be misleading. Nims on Unfair Competition and Trademarks (3d Ed.) § 86; Thompson on Corporations (3d Ed.) § 77; Benevolent & Protective Order of Elks v. Improved Benevolent & Protective Order of Elks of the World, 205 N. Y. 459, 98 N. E. 756, Ann. Cas. 1913E, 639, L. R. A. 1915B, 1074 and note; Grand Lodge, K. P. v. Grand Lodge, K. P., 174 Ala. 395, 56 So. 963; Society of War of 1812 v. Society of War of 1812, 46 App. Div. 568, 62 N. Y. S. 355; National Circle, Daughters of Isabella, v. National Order of Daughters of Isabella (C. C. A. 2d) 270 F. 723; Daughters of Isabella No. 1 v. National Order, Daughters of Isabella, 83 Conn. 679, 78 A 333, Ann. Cas. 1912A, 822; International Committee of Young Women's Christian Associations v. Young Women's Christian Association, 194 Ill. 194, 62 N. E. 551, 552, 56 L. R. A. 888; Benevolent & Protective Order of Elks v. Improved Benevolent & Protective Order of Elks, 122 Tenn. 141, 118 S. W. 389; Creswill v. Grand Lodge Knights of Pythias, 133 Ga. 837, 67 S. E. 188, 134 Am. St. Rep. 231, 18 Ann. Cas. 453, reversed on other grounds 225 U. S. 246, 32 S. Ct. 822, 56 L. Ed. 1074. The reasons underlying the rule are thus stated in Nims on Unfair Competition and Trademarks (3d Ed.) § 86: "The fact that a corporation is an eleemosynary or charitable one and has no goods to sell,...