Drummond Tobacco Co. v. Randle
| Decision Date | 25 September 1885 |
| Citation | 2 N.E. 536,114 Ill. 412 |
| Parties | DRUMMOND TOBACCO CO. v. RANDLE and others. |
| Court | Illinois Supreme Court |
Appeal from Madison.
This was a bill filed by the Drummond Tobacco Company of Illinois to enjoin certain persons from taking the necessary steps under the laws of Illinois to complete the organization of a proposed corporation, to be named the ‘Drummond-Randle Tobacco Company.’ The bill alleged the incorporation of complainant under the laws of Illinois; that complainant was engaged in the manufacture and sale of plug chewing tobacco at Alton, Illinois; that its manufactures were designated by its corporate name, printed on tags, labels, etc., and were known by such corporate name in the markets where they were sold, and that it had a proprietary interest in said name as a trade-mark; that the defendants had formerly been officers and stockholders in the Drummond Tobacco Company, and knew who its customers were, and the details of its business and affairs; that they proposed to organize a corporation under the name of the ‘Drummond-Randle Tobacco Company,’ to engage in the manufacture and sale of plug chewing tobacco in Alton, Illinois; that they proposed to sell their manufactures in the same markets where complainant sells its manufactures, and to designate them by the name ‘Drummond-Randle Tobacco Company,’ printed on tags, labels, etc.; that by reason of the similarity of the two names the manufactures of the proposed Drummond-Randle Company would be likely to be mistaken for those of the Drummond Company, (the complainant,) causing confusion to the public, and irreparable damage to the good-will and property of complainant's corporate name. The bill also averred that the similarity of the two names had already given rise to confusion; that it had several times received letters intended for the corporators of the Drummond-Randle Company.
The defendants, in their answer, admitted most of the material allegations of the bill, but denied that complainants were engaged in the business of manufacturing and selling plug tobacco. The answer also denied that complainant would suffer any injury by reason of the incorporation of the proposed Drummond-Randle Tobacco Company, or that the similarity of the two names had given rise to any confusion. It alleged that for some years the chief part of the business of the Drummond Tobacco Company had been done at a branch factory in St. Louis, Missouri; that shortly before the filing of the bill the stockholders of the Drummond Tobacco Company (with one exception) had organized a corporation, under the laws of Missouri, named the ‘Drummond Tobacco Company,’ for the manufacture and sale of plug chewing to bacco at St. Louis, Missouri; that that corporation was intended to supplant the Illinois corporation; that the Illinois corporation had sold its St. Louis factory, and most of its trade-marks, patents, etc., to the Missouri company, and that it kept no accounts except with the Missouri corporation; that it had sold its Alton factory, and that for business purposes it had practically ceased to exist; and that the Illinois organization was only kept up to prevent defendants from incorporating under the name of the ‘Drummond-Randle Tobacco Company.’
At the hearing certain affidavits, taken and read on motion to dissolve the preliminary injunction, were, by agreement, read and considered, together with certain oral evidence, as the evidence in the case. This evidence bore chiefly on the gradual transfer of the business of the Drummond Tobacco Company from Alton to St. Louis, and the nature and extent of the business done by the Illinois corporation since the organization of the Missouri company, and is fully commented on in the opinion of the court.
It was incumbent on the complainant below (appellant here) to show by such a preponderance of evidence as would reasonably satisfy the mind of the chancellor that the incorporation of the Drummond-Randle Tobacco Company would so injure it as to justify the issuing of a writ of injunction. The injury must be of a substantial character, and not merely fanciful or conjectural.
The complainant is a domestic corporation, and as such seeks relief. Obviously under this bill a foreign corporation, although of the same name, and composed of the same stockholders, and having precisely the same shares of stock, would not be entitled to relief; for it would still be another and entirely distinct and diferent corporation, existing under different laws; and if entitled to protection here, so entitled under different principles of law. It is not pretended that the mere process of manufacturing tobacco is in anywise affected by the name of the corporation; it is the business of buying, selling, exchanging, etc., only that is claimed to be thus affected.
The defendants make the following among other allegations in their answer:
The evidence presented in the record, which consists in part of affidavits read upon the hearing by agreement of counsel, sustains at least so much of this allegation as relates to the entire business of buying, selling, trading, etc. James T. Drummond, the principal stockholder in the complainant, in his affidavit admits the incorporation of the Drummond Tobacco Company, with its principal office or place of business in the city of St. Louis, under the laws of the state of Missouri, but seems to regard this as being in some way but a continuance of the Drummond Tobacco Company, incorporated under the laws of this state, with its principal office or place of business in the city of Alton. He says: ‘Complainant was recently formally incorporated in the state of Missouri under its own corporate name of ‘Drummond Tobacco Company,’ but not for the purpose of abandoning Alton as a manufacturing point by complainant, but for the purpose of convenience,' etc.
A corporation created under the laws of one state may, by virtue of interstate comity, be permitted to do business as a corporation in another state; but the elements which are essential to a corporation are such that it is impossible that a corporation created under the laws of one state can be incorporated into another corporation created under the laws of another state as an integral part thereof, as is here alleged. What was really meant is manifest by another portion of the affidavit, where he says ‘that said Missouri corporation really forms part and parcel of complainant, was organized by the same persons, with one exception, and two corporations expect to work together in unison as practically one and the same body, hereafter as heretofore known as ‘Drummond Tobacco Company,’ dealing in the same markets and with the same customers, and in the same class of goods.' Fairly paraphrased, all of the stockholders of the complaint but one, to facilitate the business of complainant, organized as a corporation with the same name, and to carry on the same business at St. Louis, under the laws of the state of Missouri; making, in fact, and in law, two entirely distinct and independent corporations.The only unity is in the ownership of the stock; but this is of no consequence, because there is nothing in the law to...
To continue reading
Request your trial