International Trust Co. v. International Loan & Trust Co.

• Decision Date: 25 February 1891
• Citation: 26 N.E. 693,153 Mass. 271
• Parties: INTERNATIONAL TRUST CO. v. INTERNATIONAL LOAN & TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

153 Mass. 271

26 N.E. 693

INTERNATIONAL TRUST CO. v. INTERNATIONAL LOAN & TRUST CO.

Supreme Judicial Court of Massachusetts, Suffolk.

February 25, 1891

Report from supreme judicial court, Suffolk county HOLMES, Judge.

Laws 1889, c. 452, § 2, provides that no foreign corporation shall carry on a banking, mortgage loan and investment, or trust business in Massachusetts under a name previously in use by a domestic corporation, or so nearly identical as to mislead. Held, that the proper party to petition for injunction under section 3 of the act, which provides that any of its provisions may, on petition, be enforced by injunction, is the party aggrieved by the actions of the foreign corporation; and a domestic corporation engaged in loaning and investing moneys received by it on securities, and receiving, discounting, and paying interest on deposits, is an aggrieved party, if the foreign corporation does business under an identical name, or one so similar as to mislead, as the business of the two corporations are the same or similar.

COUNSEL

R.M Morse, Jr., and C.E. Hellier, for plaintiff.

A. Russ and N. & H.B. Cleaves, for defendant.

OPINION

MORTON J.

The plaintiff's bill alleges that it is a Massachusetts corporation, organized under a special charter "for the purpose of receiving on deposit money, government securities stocks, bonds, coin, valuable papers, documents, and evidences of debt, and collecting and disbursing the principal, interest, and income of said property, and of acting as agents for the purpose of registering and countersigning bonds, stocks, securities, or evidences of debt;" that it has its usual place of business in Boston, and has carried on business there for more than 10 years, and is now carrying it on there, and has deposits to a large amount in cash and in the securities in which the same is invested; that the defendant is a Missouri corporation, originally chartered under the name of "National Loan & Trust Company," which was changed by a vote of its stockholders in August, 1889, to the "International Loan & Trust Company;" that prior to the filing of plaintiff's bill defendant was engaged in carrying on, in Boston, a banking, mortgage, loan and investment, and trust business; that the name of defendant is so nearly identical with the name of the plaintiff that it is liable in use to mislead, and has in fact misled, the public, and especially persons having occasion to deal with the plaintiff. The bill concludes with a prayer that the defendant may be enjoined "from carrying on the business as aforesaid in this commonwealth under its present name," and for general relief. It is evident, not only from the averments which the bill contains, but those which it omits, that it is framed upon chapter 452, Acts 1889. ^[1] The case was heard by a single justice, who made certain findings, ordered an injunction to issue forbidding the defendant from doing business in Massachusetts under its present name, and reported the whole case for the consideration of the full court, such decree to be made as equity might require.

The plaintiff claims that it is entitled to the injunction--First, under chapter 452, Acts 1889; and secondly, on the ground that the use of defendant's name is a violation by it of plaintiff's right to do business under its name. Looking critically at the language of section 2, c. 452, aforesaid, it is a little doubtful whether the businesses described are a banking, mortgage, loan and investment, or trust business, or whether they are a banking, mortgage, loan, and investment or trust business; that is, whether the statute was intended to be made as prohibiting a banking business, a mortgage loan and investment business, or trust business, or whether it was intended to be made as prohibiting a banking business, a mortgage business, a loan and investment business, or a trust business. We think that the latter must be the constructions that are intended, and this view is corroborated by referring to chapter 329, Acts 1890, where the same words are used; and it is evident the legislature had in view the mortgage business as one thing and the loan and investment business as another. The question, then, is whether the defendant has been or is engaged in carrying on in this state either of these kinds of businesses, and, if it has been or is doing so, whether it has done so or is doing so under a name so nearly identical with the plaintiff's name as to mislead. The presiding justice found that the defendant "had transacted and contemplated transacting a business of buying and selling investment securities generally, but chiefly its own debenture bonds, and the stocks and securities of other companies, and mercantile paper, which the corporation discounted at its principal place of business in Kansas City, and forwarded to Boston for rediscount by banks and investors in New England." The presiding justice also found that some of defendant's circulars which had been printed and circulated for its Missouri office invited a wider range of business, and an examination of the reported evidence shows that the defendant had received money on deposit, for which it had issued certificates of deposit, and had also received money, which it had invested for customers. There is no evidence that the defendant has engaged in or proposes to engage in the mortgage or trust business in this state; on the contrary, it expressly disclaims any intention of so doing. The debenture bonds referred to above are bonds issued by defendant in series of $100,000 or more against mortgages taken by it from different persons in various parts of the country outside of this state for loans made to them and deposited by defendant with the Boston Safe-Deposit & Trust Company, or the Knickerbocker Trust Company of New York; one of these companies certifying upon the bonds that the amount of mortgage required as security for the issue has been so deposited. While we should hesitate to say that the sale of these bonds, or of the mercantile paper forwarded from Kansas City for rediscount here, or of the stocks and securities of other companies, came within either of the prohibitions named in the statute, we think the things enumerated may be fairly said to fall within the banking or loan and investment business, and that therefore the defendant has been engaged in carrying on a business coming within the statute. Although the statute does not, in terms at least, provide that the corporation here shall be engaged in the same business as the foreign corporation, nor that it may petition for the injunction which the act authorizes the supreme or superior court to issue, nevertheless we think that it must have been the intention of the legislature that the business in which the said corporations were engaged was the same, or so similar that to permit the foreign corporation to do business here would operate as an injury to the domestic corporation, and mislead the public, which would not be the case if the foreign corporation was engaged in a wholly different business, although under the same name. We also think the party to bring the petition is the party aggrieved by the actions of the foreign corporation. At the hearing before the single justice it was conceded by the defendant that the plaintiff's business was correctly described in its bill; and from that it appears that plaintiff has deposits to a large amount, which are in cash and in the securities in which the same has been invested. It also appears from its charter that it is authorized to loan or invest the moneys received by it upon or in certain securities; and defendant concedes in its brief that plaintiff carries on a banking business, receives deposits,...