Grand Lodge, K.P. of North and South America, v. Grand Lodge, K.P.

• Decision Date: 15 June 1911
• Citation: 56 So. 963,174 Ala. 395
• Parties: GRAND LODGE, K. P. OF NORTH AND SOUTH AMERICA v. GRAND LODGE, K. P.
• Court: Alabama Supreme Court

56 So. 963

174 Ala. 395

GRAND LODGE, K. P. OF NORTH AND SOUTH AMERICA v. GRAND LODGE, K. P.

Supreme Court of Alabama

June 15, 1911

Rehearing Denied Dec. 21, 1911.

Appeal from Chancery Court, Montgomery County; J. M. Chilton Special Chancellor.

Suit by the Grand Lodge, Knights of Pythias, against the Grand Lodge Knights of Pythias of North and South America. From a judgment overruling a demurrer to the complaint, defendant appeals. Affirmed.

John R Tyson, for appellant.

Ball &amp Samford, for appellee.

MAYFIELD J.

This bill is filed by the appellee, a benevolent and secret corporation, against another organization of like kind and character. The relief sought by the bill is purely injunctive, to restrain the respondent corporation from using the name assumed by it in either its grand or its subordinate lodges, and to prevent its using certain banners, ensigns, emblems, and mottoes, upon the ground that they are so like and similar to those adopted and used by the complainant as to lead to confusion and uncertainty.

It is alleged in the bill that the name adopted, assumed, or used by the respondent corporation is the same as that of the complainant, or so nearly so as to interfere with the business of the complainant, and that it tends to confusion and uncertainty. The bill further alleged that both complainant and respondent had various offices scattered throughout Alabama, and that, by reason of the similarity of names of the two corporations or organizations, the mails of the one were liable to be delivered, and were frequently delivered, to the other, which tended to harass and annoy complainant, and interfere with its business, and that for this reason great confusion and uncertainty often arises as to the business transactions of the complainant. The respondent corporation demurred, assigning numerous grounds therefor. The trial court overruled this demurrer, and from that decree this appeal is prosecuted.

The ground insisted upon is that subdivision 1 of section 3446 of the Code of 1907, which is intended to prevent the identity of names of two corporations, has no application to this case; that section being limited in its operation to corporations which have stockholders, and which are organized for individual profit.

Appellant concedes that one business corporation cannot be allowed to assume the name of another, and by that means deceive the public as to the corporation with which it deals, and that if one corporation subsequently incorporates under or takes the name of another, or one so similar thereto as to be calculated to deceive the public, a court of equity will enjoin the use by the latter of such name, because it would be a fraud upon the public as well as upon the stockholders of the other corporation.

It is insisted by appellant that there is no such property right in a name as to entitle either a person or a corporation to its exclusive use; but it concedes that one corporation cannot assume the name of another, with a slight alteration, in such way as to induce persons to deal with it in the belief that they are dealing with another corporation. It is likewise conceded by appellant that an injunction lies to restrain the use by one corporation of the name of a prior corporation, or of a name so similar thereto as to tend to create confusion, and to enable the latter corporation to obtain business of the former, but appellant insists that the relief sought by this bill cannot be granted, because the two contesting corporations are of a fraternal character, each seeking business from one of two separate and distinct races of people who do not intermingle socially or fraternally, and therefore cannot be competitors--that they are not engaged in the same business.

It is also insisted by appellant that it affirmatively appears in the allegations of the bill that the relief sought is barred by lapse of time, and that the complainant has been guilty of such laches in asserting its rights that the court will not now grant the relief prayed.

We are unable to agree with counsel for appellant that any one of these contentions is available on demurrer to the bill. It has been well said that: "The name is an indispensable part of the constitution of every corporation, the knot of its combination, as it has been called, without which it cannot perform its corporate functions." The name is usually selected by the incorporators, and by such name it takes, holds, conveys, and uses its property, and does all corporate acts. Its right to so use its chosen name is even recognized by the statutes of our state above referred to, and it has always been protected by the courts independently of statutes. The matter of so protecting the use of a corporate name is necessarily of equitable cognizance, because the remedy is usually incomplete or inadequate at law.

The relief usually granted is that of...