text:
    The Drummond Tobacco Company v. Charles H. Randle et al.

      Filed at Mt. Vernon September 25, 1885.

    i. Corporation—two corporations using the same or similar names in the same business—right of prior organisation to prevent the same. A bill by a domestic corporation incorporated by the name of “Drummond Tobacco Company, ” to enjoin the incorporation of another company in the same city by the name of “Drummond-Bandle Tobacco Company,” to engage in the same business, will not be sustained unless it is shown, by such a preponderance of evidence as to satisfy the mind of the chancellor, that the incorporation of the second company under the name proposed will injure the former company in its business.
    2. So the use of any particular name by a corporation will not be enjoined, unless it is made to appear, from the evidence and by all the circumstances, the proposed use of the name will likely result in injury to the complainant.
    3. If the persons composing a corporation formed under the laws of this-State should become also incorporated under the laws of another State, the-two organizations will constitute separate and distinct corporate bodies, and the one can not form an integral part of the other; and the corporation of this State can not enjoin the formation of a new corporation in this State under a similar name, to prevent an injury to the business of buying and selling of the foreign corporation in this State.
    4. If a domestic corporation, after its members have procured an incorporation of themselves in a sister State, by the same name, should abandon the business, practically, in this State, and keep its organization only in name, to prevent others from transacting the same business, it can not, in equity, maintain a bill to enjoin the formation of another corporation in this State by a similar name, to engage in the same business, when none of its trade-marks-are sought or intended to be used by the latter.
    5. Amendment—of the record during term. The circuit court has the power, at any time during"the term, to allow an amendment of its record, so-that it may conform to the facts. In this case the record was amended so as-to show that suggestions of damages were filed upon the dissolution of an injunction, before the question had passed from the control of the court, and it was held, that the court during the term had power to allow the amendment.
    6. Appeal—whether a franchise is involved. Where a bill seeks to-enjoin the incorporation of a company by a given name, adopted in the preparatory steps and proceedings, an appeal lies directly from a decree of the circuit court dismissing the bill, to this court, as a franchise is involved.

      Appeal from the Circuit Court of Madison county; the Hon. William H. Snydeb, Judge, presiding.
    This is a bill in equity, by the Drummond Tobacco Company, against Charles H. Randle, John N. Drummond, John E. Hayner, George B. O’Kell, and John J. Mitchell. After the caption and address the bill proceeds as follows:
    “That in the month of June, A. D. 1876, your orator became lawfully incorporated as a body corporate, under the general laws of the State of Illinois, by and under the name of ‘Dausman & Drummond Tobacco Company,’ with its chief office and place of business, under its articles, at the city of Alton, in said State. Tour orator further avers that it commenced and carried on the business contemplated by its certificate of incorporation,—that is, the manufacture and sale of plug chewing tobacco at Alton, aforesaid,—and continued to so carry on and conduct said business under the name of Dausman & Drummond Tobacco Company, until the 20th day of August, 1879. Tour orator further avers that on, to-wit, said 20th day of August, 1879, your orator’s name was lawfully changed, under the general laws of Illinois, to the name of ‘Drummond Tobacco Company,’ by which name your orator has ever since been known and called; and ever since said date last aforesaid your orator has continued to conduct its lawful business of manufacturing and selling plug chewing tobacco at Alton, aforesaid, under its said corporate name of Drummond Tobacco Company, and still continues to so conduct and carry on its said business at the place last aforesaid. Tour orator further avers that it has fully and in every respect complied with the laws of Illinois, and is now a lawful corporation of said State, having its principal office and place of business at the city of Alton, aforesaid. Tour orator further avers, that your orator, by the expenditure of much time and labor and large sums of money, has widely circulated in its Trade and business its said corporate name of Drummond Tobacco Company, and has, by the use of your orator’s,said corporate name, printed and impressed upon labels, tags, and by other devices and designs, made known, generally, and distinguished and designated tobaccos of your orator’s manufacture, so that ‘Drummond tobacco,’ and ‘Drummond’s goods,’ and ‘Drummond’s brands,’ have come into general use, and become well and favorably known throughout the-United States, and thereby rendered the property in your orator’s said corporate name., and the good will and trademark thereof, of great and permanent value to your orator; and your orator has acquired a proprietary right in and to-its said corporate name, so that respondents neither lawfully have, nor can the proposed corporation hereafter mentioned have, a right to use your orator’s said corporate name, nor any similitude thereof. Tour orator further avers that under its said corporate name, and by virtue of the property in and. good will thereof, your orator has established a very large and lucrative business in this and other States. Tour orator-further ’ avers that said respondents, John N. Drummond,. Charles H. Randle and John E. Hayner, were lately stockholders in your orator, from and after August 20, 1879, and. the said Randle and Drummond were officers of your orator,, the said Drummond having been the president, and the said Randle, the secretary, of your orator, whereby they acquired a knowledge of the business of your orator, and a knowledge-of the names of your orator’s customers, their places of residence and their commercial standing and credit, and otherwise had and obtained knowledge of your orator’s business- and affairs which otherwise they would not have obtained.. Tour orator further avers that said Randle, Drummond and Hayner, together with the other respondents, and in concert-with them, concerted and conceived a scheme to form another and rival corporation, and to" that end, and in view thereof, sold their stock in your orator, and resigned their respective trusts as officers of your orator, and immediately thereafter commenced the consummation of their said scheme to form, and incorporate such rival corporation, and that said proposed corporation shall also have its chief office and place of business, under its articles, at the same place at which your orator is, by its articles, located and domiciled. And your orator avers that it is the intention of the said defendants, if successful in organizing siich corporation under the name of ‘Drummond-Randle Tobacco Company,’ to carry on the same business as that of your orator, and in the same markets. Tour orator further avers that your orator is informed and believes, and charges the fact to be, that in order to carry out said scheme said respondents have made the statement required by law, and have filed the same in the office of the Secretary of State of Illinois, setting forth that the name of the proposed rival corporation shall be ‘ Drummond-Randle Tobacco Company,’ and that it is to be created and organized a corporation for the purpose of manufacturing plug chewing tobacco, at Alton, aforesaid. Tour orator further avers that said Secretary of State has already issued a license to said respondents, as commissioners, to open books for subscription to the capital stock of said proposed corporation, by and under the provisions of sections 2 and 3, of chapter 32, of the Revised Statutes of Illinois, which books are to be opened and subscriptions made under the proposed corporate name of <Drummond-Randle Tobacco Company,’ but that said commissioners have not, as yet, made or filed their report of their proceedings and doings under said license, but are actively preparing so to do; nor has said Secretary of State yet issued his certificate of the complete organization of said proposed corporation, nor has said proposed corporation become yet fully organized, but your orator has been informed and believes, and charges the fact to be, that said commissioners-are actively engaged in preparing their report and preparing their other duties provided by the statute, and give out that they will file in the office of said Secretary of State their doings as said commissioners at once, and that they and the other respondents, as soon as said report shall be filed, intend to demand of said Secretary of State that he issue to them and their successors a certificate of the complete organization of said proposed corporation, by and under the said corporate name of Drummond-Randle Tobacco Company, and that your orator is informed and believes, and charges the fact to be, that said respondents will carry into effect their said scheme and purpose to cause the complete organization of the said proposed corporation under said last named corporate name, and will do so immediately unless restrained from so doing by the order of this honorable court. Your orator further avers that should said respondents succeed in effecting their purpose to organize the said proposed corporation by the name of ‘Drummond-Randle Tobacco Company,’ and commence the manufacture and sale of plug chewing tobacco by and under said proposed corporate name, (as said respondents threaten and give out that they intend to do,) the public at large will be deceived as to the true source and origin of goods of their manufacture, and mistake such tobaccos so manufactured by said proposed corporation, as the goods manufactured and sold by your orator, as aforesaid; and the said proposed corporate name of Drummond-Randle Tobacco Company is so similar to that of your orator, that the proposed corporation will be mistaken for and confounded with your orator, and that if the purpose to form said proposed corporation shall be effected by said respondents, confusion and uncertainty concerning the corporate name of your orator will occur, whereby the identity of your orator’s goods and business will be injuriously affected, and by confusing your orator’s identity, goods and business with that of said pz-oposed corporation, the business and good will and property of your orator’s corporate name will be greatly injured, and your orator suffer irreparable loss and damages. Your orator further avers that confusion in the correspondence of your orator and said proposed corporation lias already arisen, your orator having received letters addressed to and intended for said proposed corporation, and your orator states that correspondence may have been delivered to said respondents, by their proposed corporate name, addressed to and intended for your orator, and your orator avers that great confusion will hereafter ensue in the correspondence of your orator and said proposed corporation if it is permitted to be organized under its said proposed corporate name. Tour orator further avers that if said proposed corporation shall be fully organized and do the business contemplated by it, as aforesaid, under the said proposed corporate name, dealers in the market will be confused, and led into the false belief that the two corporations are the same, and that great injury will result to the public and your orator, and the property in your orator’s said corporate name, and especially the use of the word ‘Drummond,’ as connected with and as a part of its said corporate name, will thereby be infringed upon, and the good will and trademark thereof and property therein will be supplanted and destroyed, and the valuable business and trade which your orator has established by the expenditure of large sums of money and at a great cost of labor, under its said corporate name, and especially the use of the word ‘Drummond’ as a part of its said corporate name, and the good will and trademark thereof, attached to the goods of your orator, as aforesaid, will be wholly lost or greatly impaired. Tour orator-further avers that -it has no adequate remedy at law in the premises, and that unless relief is here granted, your orator will be irreparably injured.”
    The prayer of the bill is, that defendants answer, their oaths thereto being waived, and “that a preliminary injunction may issue, restraining said respondents, their agents, servants and employes, from further proceeding with the organization of said proposed corporation under the said name of ‘Drummond-Randle Tobacco Company,’ and that they be further restrained from filing or causing to be filed with said Secretary of State said commissioners’ report of the doings of said commissioners under said license to form a corporation under the corporate name aforesaid, and further restrained from applying to said Secretary of State for a final certificate of complete organization of said proposed corporation under the corporate ñame of ‘Drummond-Randle Tobacco Company,’ and that on a final hearing, said injunction be made perpetual, ” and concludes with a prayer for general relief. A temporary injunction was granted, and afterwards, on the 16th of March, 1885, the defendants answered (omitting the introduction) as follows:
    “First—That they admit that in the month of June, 1876, there was a corporation formed arid organized under the laws of the State of Illinois, under and by the name of ‘Dausman & Drummond Tobacco Company,’ with its office and place of business at the city of Alton, in the State of Illinois.
    “Third—And these defendants further answering, admit that the name of the said corporation was, on the 20th day of August, 1879, lawfully changed to the name of ‘Drummond Tobacco Company,’ by which name the said complainant has ever since been known and called, and has continued to carry on its business of manufacturing and selling plug chewing tobacco, under the corporate name of ‘Drummond Tobacco Company,’ at Alton, aforesaid, except as hereinafter stated.
    “Fourth—And these defendants further answering, say that they admit that the said complainant has fully complied with the laws of the State of Illinois, and they do not deny but that the said corporation is a lawful corporation of the State of Illinois, but they do expressly deny that its principal office and place of business is at the city .of Alton, aforesaid, except as hereinafter stated; and these defendants will hereafter set forth and state the actual facts of the case upon the point of the location of the principal office and place of business of the said complainant.

      “Fifth—And these defendants further answering, admit that the complainant, by the expenditure of much time, labor and large sums of money, has widely circulated in its trade its said corporate name of ‘Drummond Tobacco Company,’ and that by the use of its corporate name printed and impressed upon labels, and other devices and designs, made known and generally distinguished and designated the tobacco manufactured by the complainant, and they can not deny but that ‘Drummond tobacco,’ and ‘Drummond goods,’ and ‘Drummond brands,’ may have, to some extent, come into use, and become well and favorably known, and thereby become the property óf the complainant; but these defendants deny that the credit or market value of the goods manufactured by the complainant are to any considerable extent enhanced by the use of the name of the said complainant, but on the contrary, these defendants aver that the credit and value of said goods manufactured and sold by the said complainant are affected and controlled by other matters which wdll hereafter be stated.
    “Sixth—And these defendants further answering, say they admit that the said complainant has, acting under its corporate name, established a.large and valuable business in this and other States.
    “Seventh—And these defendants further answering, admit that these defendants, John N. Drummond, Charles H. Eandle and John E. Hayner, were lately stockholders in the complainant corporation, and that these defendants, Drummond and Eandle, were the president and secretary thereof; and they further admit that while such president and secretary, they acquired some knowledge of the business of the complainant, and of the names and places of residence and commercial standing and credit of its customers, and otherwise obtained some knowledge of the complainant’s business and affairs which they would not otherwise have obtained; but these defendants aver and expressly charge that the complainant liad not any peculiar business secrets, or processes of manufacture, or methods of trade or business, within the knowledge of these defendants, and they deny that the said complainant has any right to complain that these defendants propose to use their experience in business, and knowledge acquired by them, in the promotion of their own affairs and business. .
    “Eighth—And these defendants further answering, say that it is true, as charged in said complainant’s bill, that they intend to form a corporation to engage in the manufacture and sale of plug chewing tobacco, with its principal office and place of business in the city of Alton; that it is true the said defendants, John N. Drummond, Charles H. Randle and John E. Hayner, were stockholders in the complainant, and that by the sale of their stock the said John N. Drummond and Charles H. Randle vacated their offices of president and secretary, but they charge the truth to be that they sold their said stock to, and with the express assent of, James T. Drummond, the principal stockholder in the complainant company, and with the consent of said company, as far as they know and believe; and they have never, either in the sale of their said stock or otherwise, either expressly or impliedly promised or agreed with the said stockholders in the said complainant corporation, or otherwise, that they would not organize a corporation or otherwise carry on the business of manufacturing plug chewing tobacco; and they expressly charge and insist that the said corporation which they propose and intend to organize, is in no sense the rival of the complainant, except that it proposes and intends to carry on the business of manufacturing plug chewing tobacco; and they expressly deny that they intend to organize a corporation of or with the name of the complainant; they expressly deny that they intend- or have threatened to use the name of the complainant, or any sign, mark or device used by the said complainant in its business; on the contrary, they expressly charge that they propose and intend, in the prosecution of the business of the corporation which they expect to organize, to use such marks, brands and trade-marks upon the goods, bill and note-heads, as will distinguish their products and manufactures, and their correspondence, not only from the products, manufactures and correspondence of the complainant, but from the products, manufactures and correspondence of all other companies and persons. And these defendants expressly deny all concert, false intent or desire to interfere with, or appropriate to themselves or the corporation, the business or affairs of the complainant, otherwise than as they may lawfully do by fair competition in the markets. They deny that they were influenced, in the selection of the name of their said corporation, by any purpose or intent to interfere with the business of the complainant, or to produce confusion in its business or correspondence, but in the selection of the name for their proposed corporation they were influenced alone by the fact that it was expected by these defendants that their associates, John N. Drummond and Charles H. Dandle, were large stockholders, or would be so, in the proposed corporation, and active managers of its business, and that the name was, or would be,' otherwise suitable and appropriate, and could not be mistaken for the name of any other company or corporation.
    “Ninth—And these defendants further answering, say that they admit that they have taken the preliminary steps to the organization of a corporation, under the laws of the State of Illinois, by the name of ‘Drummond-Dandle Tobacco Company,’ to carry on the business of the manufacture and sale of plug chewing tobacco in all accessible and profitable markets, and' that its principal office and place of business will be at the city of Alton, in the State of Illinois; and that before this time they believe their organization would have been completed if it had not been prevented by the injunction issued herein.

      “ Tenth—.These defendants further answering, deny that the name they propose for their said corporation is so similar or like that of the complainant as to produce or occasion any doubt or confusion in the trade or with the customers of either. They deny that the name, ‘Drummond-Randle Tobacco Company,’ can be mistaken for that of ‘Drummond Tobacco Company,’ by the trade or by any person interested in either, or who may have business with either of said companies, or who will deal or "trade with either, or in the products of either company, or that the goods manufactured by either coiqporation will be confounded with or mistaken in the trade, or by dealers or customers, for the goods manufactured by the other.
    “Eleventh—And these defendants further answering, say that in addition to the sufficient difference in the name of the complainant and the corporation they propose to organize, they expressly charge, the truth to be, that in the tobacco trade the name of the manufacturers of plug tobacco is of small importance to the trade in determining the qualities of plug chewing tobacco or its popularity on the market, but it is the custom of all manufacturers of plug chewing tobacco to adopt and fix to their products certain peculiar namés, marks and brands, by which such products are known to the trade and on the markets; and these defendants charge the truth to be that most of the plug chewing tobacco manufactured by the complainant is known on the market by names, brands, marks and devices of which the name of the complainant forms no part; and these defendants expressly aver that they do not intend that the corporation they propose to form shall use any name, brand or device employed by the complainant, or any resemblance or similitude- thereof.
    “Twelfth—And these defendants further answering, say that they deny that any confusion in the correspondence of the complainant and of these defendants, or any of them, or the corporation they propose to organize by the name of' ‘Drummond-Randle Tobacco Company,’ has occurred or happened on account of any real or supposed similarity of their respective names, and they deny that dealers in the market will, in any way, be confused or misled in the false belief that the two corporations are the same. And these defendants further answering, say that the said complainant has, in effect, abandoned the city of Alton, as its place of business and its principal office is no longer there, and it now carries on a nominal business there; that the fact is, that in the month of November, 1884, the said complainant sold its business establishment in the city of Alton, with all its machinery and business fixtures, to one Horatio N. May, of Chicago, Illinois, and finally, early in the month of January, 1885, the remaining stockholders in the complainant, after the withdrawal of the defendants Drummond, Randle and Hayner therefrom, with other persons unknown to these defendants, organized a corporation under the laws of the State of Missouri, with its principal office and place of business in the city of St. Louis, by the name of ‘Drummond Tobacco Company;’ and these defendants are informed and believe, and therefore charge it to be true, that the said complainant has sold and transferred to the Missouri corporation of the same name, all its property, with some trifling exceptions,—which last named property is only retained in order to preserve the existence of the complainant as an Illinois corporation, and to embarrass and hinder these defendants from engaging in the business of manufacturing plug chewing tobacco, by the name of ‘Drummond-Randle Tobacco Company’ or otherwise, while, in fact, for all- business purposes the complainant has practically ceased to exist in Illinois. ”
    Replication was filed, and, by agreement, certain affidavits taken and read on a motion to dissolve the injunction, were read and considered, together with certain oral evidence, as the evidence in the case. The court decreed that the bill be dismissed.

      Messrs. G. & G. A. Koerner, and Messrs. Smith & Harrison, for the appellant;
    The name of a corporation is a part of its franchise, and the courts will protect it in the exclusive use of such name. 1 Blackstone’s Com. 475; Boone on Corp. sec. 32; High on Injunctions, sec. 687; Taylor on Corp. sec. 158.
    The use of the name of a corporation is analogous to, if not stronger than, piracy upon an established trade-mark. Newby v. Railroad Co. Deady, 609; 8 Paige, 75; 11 id. 292; 2 Barb. Ch. 102; Willard’s Eq. 402.
    As to enjoining use of similar names, see Holmes, Booth & Hayden v. Manufacturing Co. 37 Conn. 278 ; Ex parte Walker, 1 Tenn. Ch. 97; Cox on Trade-marks, 475; Sykes v. Sykes, 3 B. & C. 541; Croft v. Day, 7 Beav. 84; Life Ins. Co. v. Insurance Co. 50 L. J. 253.
    The statute (Rev. Stat. chap. 32, sec. 2,) provides that no license shall be issued for the formation of two companies having the same name. This means they shall not be substantially the same. See, also, section 5, chapter 32, of the Revised Statutes. Reference is also made to Manufacturing Co. v. Hall, 61 N. Y. 226; Bradbury v. Dickens, 27 Beav. 53; Woodward v. Logan, 21 Cal. 448; Hazard v. Caswell, 57 How. Pr. 1; Christy v. Murphy, 12 id. 77; Howe v. Machine Co. 50 Barb. 236; Hogg v. Kirby, 8 Yes. 215; Singer Manf. Co. v. Wilson; 47 L. J. 481; Taylor v. Taylor, 23 id. 255; Williams v. Brooks, 50 Conn. 278.
    The franchise of a corporation is within the meaning of the term “franchise,” as used in the constitution, and in the act providing for appeals to the Supreme Court. Railroad Co. v. Dunbar, 95 Ill. 577.
    Mr. John G. Irwin, for the appellees:
    The names of the two corporations are different, and no fraud is charged in the bill. The want of fraud is sufficient to defeat the bill, and besides, the injunction was premature. The complainant had practically ceased doing business, and could not have been injured.
    The right of an individual to use his own name is unlimited. A person of one name can not prevent another of the same name from using his name in business, although such use causes loss and inj ury; nor can a person obtain a trademark in a name as against another person of the same name. Halloway v. Halloway, 13 Beav. 209; Burgess v. Burgess, 22 L. J. 675; Clark v. Clark, 25 Barb. 75; Comstock v. White, 18 How. Pr. 421; Burninger v. Wattles, 28 id. 206; Faber v. Faber, 49 Barb. 357; Stonebraker v. Stonebraker, 33 Md. 352; Taylor v. Taylor, 22 L. J. 255; Ainsworth v. Ainsworth, 35 id. 352; Meenely v. Meenely, 62 N. Y. 427; Decker v. Decker, 52 How. 218; Carmichael v. Carmichael, 11 R. I. 395; Gilman v. Hunnewell, 122 Mass. 139; McLean v. Fleming, 96 U. S. 245.
    Messrs. Palmers, Robinson & Shutt, also for the appellees:
    That no franchise is involved, see Board of Trade v. People, 91 Ill. 80; Hesing v. Attorney General, 104 id. 292.
    Counsel also discussed the facts and other points.
   Mr. Justice Scholfield

delivered 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 Driunmond-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, 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 different 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: “That the said complainant has, in effect, abandoned the city of Alton, as its place of.■ business1 and its principal office is no longer there, and it now carries on a nominal business there; that the fact is, that in the month of November, 1884, the said complainant sold its business establishment in the city of Alton, with all its machinery and business fixtures, to one Horatio N. May, of Chicago, Illinois, and finally, early in the month of January, 1885, the remaining stockholders in the complainant, after the withdrawal of the defendants Drummond, Handle and Hayner therefrom, with other persons unknown to these defendants, organized a corporation under the laws of the State of Missouri, with its principal office and place of business in the city of St. Louis, by the name of ‘Drummond Tobacco Companyand these defendants are informed and believe, and therefore charge it to be true, that the said complainant has sold and transferred to the Missouri corporation of the same name, all its property, with some trifling exceptions,—which last named property is only retained in order to preserve the existence of the complainant as an Illinois corporation, and to hinder, these defendants from engaging in the business of manufacturing plug chewing tobacco, by the name of ‘Drummond-Randle Tobacco Company’ or otherwise, while, in fact, for all business purposes the complainant has practically ceased to exist in Illinois.” The evidence preserved 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 has 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 inter-State 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 the 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 the stockholders of the complainant but one, to facilitate the business of the 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. prevent adverse ownership in this respect hereafter, and the moment the stock of the two corporations shall pass into different hands, the corporations will become independent, in fact as well as in legal contemplation. Beyond all question they may now lawfully contract with each other. They may acquire rights and transact business inimical to each other, and they may sue each other, and make defence thereto, just as different natural individuals may do.

The only real controversy in the case is, whether the business of buying and selling and exchanging with the public, in general, has been abandoned by the complainant since the creation of the Missouri corporation. James T. Drummond, in his affidavit, denies that such is the fact, though more stress is laid therein on the abandonment of Alton as a place of manufacture than we think is important, since if we shall concede that Alton is not abandoned as a place of manufacture, yet if all the buying and selling and trading done by the complainant is by, to and with the Missouri corporation of the same name, no injury is shown likely to result to the complainant by the incorporation of the defendant, for it is not claimed or pretended that the creation of that corporation will mislead or confuse, or otherwise injure, the" complainant in buying or selling or trading from, to or with the Missouri corporation. It is only the public at large—those who would not understand the difference between the names'of the complainant and that of the Drummond-Bandle Tobacco Company, or who would fail to keep in mind that difference— that it is alleged would be misled and injured thereby.

James T. Drummond is, to some extent, sustained by William Ague, book-keeper and cashier of the Drummond Tobacco Company, and by George T. Bailey, shipping clerk of that company, in his assertion that the business of the complainant in buying, selling, etc., has been carried on with the public since the creation of the Missouri corporation the same that it was before; but he is directly contradicted by the affidavits of John N. Drummond, Charles H. Randle and John E. Hayner, who each and all swear therein: “That in the year 1880 the Drummond Tobacco Company started a manufactory in St. Louis, Mo., and the business there was called the St. Louis branch; that the object in starting the St. Louis factory was, that it was supposed that St. Louis possessed superior advantages for manufacturing tobacco, and selling it to those at Alton, Illinois, where, previous to that time, the manufacturing business of the company had been carried on; that it was also the intention to gradually cease doing business in Alton, Illinois, and transfer the entire business to St. Louis, Mo.; that the capacity of the factory in St. Louis, which was started in 1880, Avas about equal to the capacity of the factory at Alton, Illinois, and in carrying out the intention of ultimately transferring the entire business to St. Louis, the Drummond Tobacco company purchased the block of ground in St. Louis, Mo., bounded by Third, Fourth, Spruce and Almond streets, known as the Sisters’ Hospital block, for which it paid $75,000, and erected on the said block a large stemery and warehouse for the storage of the raw material, which greatly increased the facilities for manufacturing and carrying on the business in St. Louis; that further carrying out the intention, a large building, which was intended to be used as a factory, was also erected on said block, said building, in connection with the said stemery and warehouse, when in running order as a factory, having a capacity to make from twelve to fifteen million pounds of plug chewing tobacco per year; that further carrying out said intention, the business done at Alton was gradually transferred to the St. Louis branch, so that in the year 1883 the factory at Alton, Illinois, was only run to about half its capacity, while the St. Louis factory was increased and run to its fullest capacity; that in the year 1884 the Alton factory only made about two hundred and seventy-five thousand pounds, while the St. Louis factory made all the rest of the tobacco the company manufactured and sold that year, amounting to about six million pounds, and while the St. Louis branch and factory that year made large profits, the factory in Alton, Illinois, lost money to the company; that further carrying out said intention, James T. Drummond, the .principal and largest stockholder in the company, and its general manager, removed his residence from Alton, Illinois, to St. Louis, Mo., and purchased a palatial home there, he doing so, so as to better enable him to manage and increase the business in St. Louis; that further carrying out said intention, James T. Drummond, as general manager of the said Drummond Tobacco Company, negotiated with Horatio N. May, of Chicago, Illinois, for the sale of the factory at Alton, Illinois, which belonged to the company there, and sold said factory and machinery to said May for $10,000, said factory and machinery having cost the company, first and last, about $40,000, and James T. Drummond’s act was confirmed by the company, and a deed made by its officers to said May for said property, for the reason that it was considered that as the business was now in shape to and would soon be carried on in St. Louis, it was best to sell the Alton factory while an opportunity existed; that in January, 1885, the undersigned were offered by said James T. Drummond a price for their stock in the Drummond Tobacco Company, which they accepted; that they transferred their stock in said company to the said James T. Drummond; that at the time Charles H. Randle and John N. Drummond were directors of said company, and, with James T. Drummond, formed the board of directors of said company; that James T. Drummond then stated to them that he desired and intended to wind up the business of the company at once ; that he would organize a corporation under the laws of Missouri, and the Drummond Tobacco Company of Alton, Illinois, would then transfer and sell out to the said Drummond Tobacco Company of St. Louis, and the Drummond Tobacco Company of Alton, Illinois, would then dissolve by surrendering its organization or charter; that said James T. Drummond requested Charles H. Randle, as he was familiar with the business of said company, and being its secretary, to continue to act as secretary and director until the business of the said Drummond Tobacco Company of Alton, Illinois, was wound up, and the corporation dissolved; that said Charles H. Randle declined so to act; that said James T. Drummond then requested said Charles H. Randle and John N. Drummond not to both resign at once as directors of said Drummond Tobacco Company of Alton, Illinois, as it would leave him without a quorum in the board of directors, but for him (Charles H. Randle) to resign first, and he (James T. Drummond) would then transfer to Levi Davis, Jr., of Alton, Illinois, two shares of stock, so as to enable him to be a director, and also to act as secretary of the company until its dissolution ; and then, when Levi Davis, Jr., had been elected a director in place of said Charles H. Randle, John N. Drummond could resign, and J. L. Curby, of St. Louis, Mo., would be elected in his (John N. Drummond’s) place, as director, and thus he would have a board of directors to enable him (James T. Drummond) to make the necessary transfers to the Drummond Tobacco. Company of St. Louis, Mo., as soon as incorporated, and to dissolve the corporation at Alton, Illinois ; that to please said James T. Drummond, they (Charles H. Randle and John N. Drummond) did as he, the said James T. Drummond, desired in that respect, and that programme was carried out, and the board of directors of said company is now composed of James T. Drummond, Levi Davis, Jr., and J. L. Curby; that Levi Davis, Jr., owns two shares, or $200, J. L. Curby fifty shares, or $5000, and James T. Drummond nine hundred and forty-eight shares, or $94,800; that in accordance with that intention to close up the business of the Drummond Tobacco Company of Alton, Illinois, and to incorporate another company of the same name in the city of St. Louis, State of Missouri, said James T. Drummond and others did organize, and have incorporated under the laws of the State of Missouri, the Drummond Tobacco Company of St. Louis; that after the incorporation of the Drummond Tobacco Company of St. Louis, Mo., the Drummond Tobacco Company of Alton, Illinois, bargained and sold to the Drummond Tobacco Company of St. Louis, Mo., all the property it then owned at St. Louis, Mo., including all its trade-marks, brands, devices, patents, and licenses under patents, retaining only its corporate name, two brands, and some manufactured tobacco at Alton, Illinois, which tobacco was not sold, because, if sold and removed, the government stamps would at once have to be placed on each box, while it could remain unstamped until sold; that the Drummond Tobacco Company of Alton, Illinois, to-day has no factory in Alton, Illinois, or elsewhere,—is a mere shadow,, the substance having been transferred to the Drummond Tobacco Company of St. Louis, Mo.; that it never was the intention to have two Drummond Tobacco Companies, each, having the same name, one in St. Louis, Mo., and one in Alton, Illinois, but it -was the intention to have all that belonged to the Drummond Tobacco Company of Alton, Illinois, transferred to its namesake in St. Louis, Mo., and the only reason why, as affiants believe, the Drummond Tobacco Company of Alton, Illinois, is still kept alive, instead of being dissolved, as was intended and agreed, is for the purpose of annoying and vexing affiants, and for the purpose of trying, without reason or justice, by this vexatious proceeding to prevent, if possible, these affiants from completing the organization of the Drummond-Bandle Tobacco Company, of which they are stockholders. ”

William Ague also made another affidavit at the instance of defendants. In the first he had stated that he believed the Drummond Tobacco Company would start another factory at Alton. In his last affidavit he explains that that statement was made on the faith of what he had heard James T. Drummond say upon the subject after this suit was commenced. He then adds, “that the Drummond Tobacco Company has no machinery of any description to manufacture tobacco in Alton, Illinois; that the Drummond Tobacco Company, since the sale of its factory in Alton, Illinois, has kept no accounts on its books, here, with any customer except the Drummond Tobacco Company of St. Louis, Mo.; that the Drummond Tobacco Company of St. Louis, Mo., makes the sales of the remnant of the stock of tobacco now on hand, and the tobacco so sold is shipped or sent, when it has been ordered, by th'e Drummond Tobacco Company of St. Louis, Mo.”

We can not say that the court below erred in holding that the evidence in favor of the complainant did not preponderate over that of the defendants upon this issue. No authority cited by .the counsel for complainant holds, and we are aware of none not cited by them which holds, that the use of a name in a corporation will be enjoined unless it is made to appear, by all the circumstances, that the proposed use of the name will likely result in injury to the complainant. The postmaster at Alton is positive in his evidence that there is no reasonable liability of the mail’matter of the complainant being delivered to the proposed corporation, the Drummond-Randle Tobacco Company, and the evidence fails to satisfy us, that in telegraphing, expressing and shipping by the Drummond Tobacco Company at St. Louis to and from the complainant at Alton, there is likely to be confusion and annoyance, leading to injurious results, because of the Drummond-Randle Tobacco Company doing business at Alton. All the evidence showing the probability of injury resulting from the use of the word “Drummond” in the name “Drummond-Eandle Tobacco Company, ” is predicated upon the hypothesis that such name is to be used in the trade with the public, and that that company and the complainant will, in the future, be competitors before the same public for the same trade. But that hypothesis, we have seen, is effectually excluded by the affidavits of John N. Drummond, Randle, Hayner and. Agne.

The objection to the assessment of damages is not tenable.. The record was amended during the term', showing these damages to have been assessed at the proper time, and this amendment was within the power of the court. (Frink et al. v. King, 3 Scam. 144.) The amended record shows suggestions of damages filed before the question had passed beyond the control of the court, and the evidence authorized the amount decreed.

We perceive no ground upon which to reverse the decree below. We are of opinion that the appeal was properly prosecuted directly to this court. The creation of a corporation (and to be a corporation is itself a franchise) was sought to-be enjoined. All the steps taken to form a corporation were to form one by the name of the “Drummond-Randle Tobacco-Company.” If a corporation could not be formed by that name, none could be formed under the steps then taken to-form a corporation, there being no provision in the statute authorizing the Secretary of State to reject the proposed name: and substitute another. A new corporation could, of course, be formed by the same parties, but this would involve an abandonment of the first essay in that direction, and the-, initiating of new proceedings.

The decree is affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    D. S. Vanpelt v. T. W. Hutchinson et al.

      Filed at Mt. Vernon September 25, 1885.

    1. Evidence—to impeach a decree for fraud. A decree having been rendered upon merely constructive notice by publication, on the claim the defendant was a non-resident, and his place of residence not known, it was sought to impeach the decree for fraud, on the allegation that there wras not proper diligence used to ascertain the place of residence of the defendant, and by reason thereof he was not notified by a copy of the notice published being sent to his post office address, as might and ought to have been done; but upon a review of the evidence it was not deemed sufficient to impeach the decree upon that ground.
    2. Same—want of recollection in one witness as against affirmative testimony of another. The statement of a witness that he does not remember having a certain alleged conversation with another, will not be regarded as a contradiction of the affirmative testimony of the latter that such conversation was had.
    Appeal from the Appellate Court for the Fourth District;— heard in that court on appeal from the Circuit Court of Rich-land county; the Hon. William C. Jones, Judge, presiding.
    Mr. Rufus Cope, for the appellant:
    The affidavit of non-residence is, that affiant “is informed and believes that Vanpelt is not a resident, ” etc. Under a former statute an affidavit on information or belief, in attachment cases, was held insufficient. Dyer v. Flint, 21 Ill. 83; Booth v. Reese, 26 id. 48.
    While a positive averment of non-residence may not be required, it should be such as to justify the court in finding that fact. A may be informed and believe that B is a nonresident, without taking any care to know that his information is reliable. The statute, in distinguishing between a nonresident and a party who on due inquiry can not be found, makes a demand for the exercise of care. Ex parte Haynes, 18 Wend. 611.
    As to the construction of similar statutes, see Ricketson v. Richardson, 26 Cal. 149 ; Forbes v. Hyde, 31 id. 342; Hartung v. Hartung, 8 Bradw. 157; Adams v. Merritt, 10 id. 275; Macubin v. Smith, 5 Minn. 357; Carleton v. Carleton, 85 N. Y. 313.
    Messrs. Wilson & Hutchinson, for the appellees:
    As to the presumption of due service of notice in favor of a decree of a court of general jurisdiction, see Wenner v. Thornton, 98 Ill. 157; Magill v. Brown, id. 235.
    The affidavit in this case was positive as to due diligence having been used to learn the residence of Yanpelt, and in such case the party could not be required to state the defendant’s non-residence. The fact that he could not be found on due inquiry, authorized the publication.
    The allegations of the bill which were denied, were not supported by any evidence or proof. On the contrary, the decree finds the fact of non-residence, and due inquiry without success.
   Per Curiam :

In October, 1872, Bobinson and wife mortgaged two lots in Olney, to Yanpelt, to secure the payment of three promissory notes of that date, for $346.67, due, respectively, in one, two and three years from date, with interest at eight per cent per annum. At the June term, 1876, of the Circuit Court of the United States, held at Springfield, Yanpelt, having previously sued out a scire facias on the mortgage, recovered a judgment of foreclosure thereon, and an award of a special fieri facias for a sale thereunder, of the mortgaged property, but no sale was ever had, nor did -any fieri facias ever issue, pursuant to said judgment. On the 10th of April, 1876, Barlow filed in the office of the clerk of the circuit court of Bichland county, a petition for a mechanic’s lien against the lots, making Bobinson and wife, and Yanpelt, defendants thereto. Decree was rendered by the Richland circuit court, at its November term, 1877, in conformity with the prayer of the petition, establishing the lien and directing that the premises be sold for the payment of the amount due the petitioner. The property was sold by Wilson, master in chancery, by virtue of this decree, and purchased by Hutchinson, who was Barlow’s attorney. No redemption having been effected within the time provided by statute, the master in chancery executed a deed to Hutchinson. McDonald became the owner of a tax title upon the property, under sale for delinquent taxes, subsequent to the mortgage. On the 9th of May, 1874, Robinson obtained a sheriff’s deed to himself for the undivided one-fourth interest of one William C. M. Roberts in the property, and on the 19th of April, 1883, he executed to Wilson a quitclaim deed for the property. Afterwards it was mutually agreed between Hutchinson, Wilson and McDonald that each should be the owner of one-third of the property, and that they should thereafter own and hold as tenants in common, in accordance with that agreement.

On the 30th of June, 1883, Vanpelt filed in the office of the clerk of the circuit court of Richland county, his bill to review the proceeding on the petition for the mechanic’s lien, making Robinson, Barlow, Hutchinson and Wilson, and the heirs-at-law of the wife of Robinson, who had died intestate since the rendition of the decree sought to be reversed, defendants thereto. The bill alleges that complainant, while said mechanic’s lien proceedings were pending, long previous thereto, and ever since, was and has been a resident of the city of Cincinnati, in the State of Ohio; that he had no notice whatever of the said proceedings, and no knowledge thereof, until the month of June, A. D. 1883; that the only manner in which complainant was made a party to said proceeding was by publication of notice in the “Olney Times” to one “D. S. Vanpelt,” which notice was based on the affidavit of said T. W. Hutchinson, the attorney for said Barlow, in the words following: “T. W. Hutchinson, being duly sworn, on oath states that he is solicitor for the complainant in the above named cause; that the respondent, D. S. Yanpelt, who is returned on the summons, ‘not found,’ is, as affiant is informed and believes, not a resident of this State, and upon diligent inquiry he has not been able to learn the residence of said defendant. ” It is further alleged, that at the time when said affidavit of non-residence was made, the recitals in the mortgage of Eobinson to complainant, of record, showed that he was a resident of Cincinnati, and that the fact of such residence was personally well known to Eobinson, and that Eobinson was well known to Hutchinson.' It is charged that Hutchinson had all necessary knowledge to enable him, by reasonable inquiry, to have ascertained the complainant’s residence, but that he did not use due diligence in the matter, but proceeded with gross negligence, and indifference to the complainant’s rights. The bill charges that the affidavit is insufficient to authorize, the publication, “for the further reason that the non-residence of the complainant is stated only on information and belief, and that it does not appear by positive averment that said Hutchinson had employed due diligence” to ascertain complainant’s address. These are the errors, and the only errors, alleged, on account of which it is ¡irayed the former decree may be reviewed and reversed.

The answer of Hutchinson alleges that he is, by the bill, for the first time informed of the residence of Yanpelt; that summons was issued in said suit for lien, for said Yanpelt, to the sheriff of Eichland county, and it was returned by him not found; that upon diligent inquiry the place of residence of said Yanpelt could not be ascertained, and therefore notice to him was given by publication, such affidavit having been filed, as was required by law, in the office of the clerk of the circuit court in which said suit was pending, showing that on due inquiry said D. S. Yanpelt could not be found, and that upon diligent inquiry his place of residence could not be ascertained; that respondent does not know the residence of complainant, except from the bill, and while the city of Cincinnati is given, in his mortgage, as his place of residence in the year 1872, he does not know whether the facts alleged were known to Robinson, but respondent was informed, and verily believed at that time, that said Vanpelt did not reside in Cincinnati, but had removed to some place in the interior of the State of Ohio, but respondent could not learn where, although he made all due and diligent inquiry, etc.

The statute in force when the decree in the petition for a mechanic’s lien was rendered, provides: “When any defendant resides or has gone out of the State, or on due inquiry can not be found, * * * so that process can not be served upon him, the complainant or petitioner may cause notice to be given to him in like manner and upon the same conditions as provided in suits in chancery.” (Rev. Stat. 1874, chap. 82, sec. 7.) The 12th section of chapter 22, of the Revised Statutes of 1874, entitled “Ghanceiy,” provides: “Whenever any complainant or his attorney shall file in the office of the clerk of the circuit court in which his suit is pending, an affidavit showing that any defendant resides or hath gone out of this State, or on due inquiry can not be found, * * *" and stating the place of residence of such defendant, if known, or that upon diligent inquiry his place of residence can not ■be ascertained, the clerk shall cause publication to be made. ”

The allegation of the bill that the affidavit of Hutchinson states the non-residency of Vanpelt on information and belief, is not admitted in the answer. But the answer, as has been seen, shows the filing of an affidavit in the office of the clerk of the circuit court, asserting, without qualification, that on due inquiry “D. S. Vanpelt could not be found, and that upon diligent inquiry his place of residence could not be ascertained, ”—and this is all that the statute requires that the affidavit shall contain. The record fails to .show that any '•evidence was offered of the contents of the affidavit. The only reference to it is in the decree enforcing the lien. It recites, “the said D. S. Yanpelt is a non-resident of the State of Illinois, the place of whose residence the complainant, after-diligent inquiry, was unable to learn, ”—and this, clearly, does-not sustain the allegation in the bill. The record should have been proven to be erroneous in the respect complained of. This should have been proven, the fact not having been admitted, by the production of the record itself, or if it was-lost or destroyed, then by secondary evidence of its contents..

The fact that Yanpelt was a non-resident is admitted; but counsel for complainant insist that his residence was or might have been known, and he notified by a • copy of the notice-published, sent to his post office address. They seek to impeach the decree for fraud in failing to give this notice. The burden is, of course, on the complainant. The only proof offered to show that Hutchinson knew of Yanpelt’s residence, is the record of the mortgage from Eobinson, in which it is recited as being at Cincinnati, Ohio, and the testimony of Eobinson that he knew that Yanpelt resided at Cincinnati, and that he had no recollection that Hutchinson asked him where Yanpelt resided. This evidence is rebutted by the testimony of Hutchinson, who testifies that his client, Barlow, did not know where Yanpelt resided; that he, himself, did not know where he resided; that he made all the inquiry that he could, and was unable to obtain such information;. that he went to Eobinson and asked him, and that Eobinson informed him that Yanpelt had resided at Cincinnati, but-that he had removed therefrom to some point up in the centreof the State, he did not know where. Hutchinson is positive, in his statement,—Eobinson does not recollect the conversation. The 'evidence of the latter, therefore, does not contradict that of the former. Under this evidence we can not. hold that the decree is impeached for fraud.

The decree is affirmed.

Decree affirmed.


author: Mr. Justice Scholfield

text:
    Robert Rankin v. Barcroft & Co. et al.

      Filed at Mt. Vernon September 25, 1885.

    1. Conveyance in trust to secure creditors—preference of creditors— what creditors to- be preferred, within the terms of an agreement—whether a lien is necessary. An agreement between a debtor and a trustee to whom the former had land conveyed to secure his creditors, provided that the trustee should sell the lands and apply the proceeds, first, to the payment of all incumbrances on the land, whether secured by mortgage or otherwise, amounting to $16,000, after which other debts were to be paid. It appeared that at the date of the conveyance and agreement, the debtor owed A $12,000 and B $4000, which debts were not incumbrances or liens on the lands, but no one else claimed such preference, and also that the debts due A and B were those intended by the parties, and that the trustee afterward, by his letter, and schedule and exhibit in bankruptcy, declared that he held the lands in trust to secure the claims of A and B: Held, that the fact that the debts of A and B were not liens upon the lands could not defeat the trust, and that they were entitled to be first paid out of the proceeds of the lands.
    2. Same—subrogation—in favor of trustee or debtor paying preferred debt. Where a person accepts time drafts drawn on him by a debtor in favor of a creditor, and takes a conveyance of land in trust, out of which to pay, first, such indebtedness, and afterward other debts, and he pays a portion of such preferred debt, he will not be entitled to be subrogated, as to such payment, to a prior lien which may be held by the preferred creditor. In such case, the person making the payment occupies the position of mortgagor or debtor, and has no preference, as to the payment made, over the other creditors secured.
    3. Same—bankruptcy—its effect upon trust property in the hands of a-bankrupt. Upon an adjudication in bankruptcy, the debt due a trustee so-adjudged, if any, on account of his trust, and his property rights in lands held by him in trust, pass to his assignee, but his duties as trustee remain unaffected by the proceeding. If any claims in favor of the trustee vest in his assignee which are prior liens upon the trust lands, it is the duty of the trustee to pay them off, and for so doing he is entitled only to the sum paid by him.
    4. Same—declaration of trust—at what time it may be made. Where lands have been conveyed to one without any attempt to declare a trust at the time, but a trust was intended, he may afterward, by letter or any other-instrument in writing, declare that he holds the same in trust, and such declaration of trust will be binding. The right to thus declare a trust in the first instance implies the .right to make certain and specific a trust before ■attempted to be declared.
    5. Trustee—speculation in respect to trust fund. A court of equity will not permit a trustee to speculate in the subject matter of his .trust. If he purchases an outstanding claim against the trust fund, the transaction will be treated as a payment only, and he will be allowed only what he paid for it.
    6. Pasties in chancery—on hill to enforce a trust in favor of creditors—personal representations of a deceased creditor—heirs as representing debts due the ancestor—in equity. A conveyance of land was made in trust, to secure certain creditors, one item of the indebtedness intended to be secured being described as a claim of the estate of S. Seven years afterward, certain other creditors secured, filed their bill against the trustee, to •enforce the trust, making the unknown heirs of S. parties. No objection was' made in the court below that the administrator or executor of S. was not made a party, but this objection was first made in the Appellate Court: Held, that it would be presumed the estate of S. was settled after so great a lapse of time, and that this part of the estate had vested in his heirs, in the ■absence of anything appearing to the contrary. In equity the title is treated ■as being where, in good conscience, "it ought to be.
    7. After the settlement of an estate the heirs of the decedent will, in •equity, be treated as the owners of any uncollected claim due the estate; and if they are made parties to litigation involving the collection of such claim, the debtor will be protected in making payment to th$m.
    8. Chanoery practice—submitting interlocutory decree to opposite solicitors. Where an interlocutory decree is clearly supported by the evidence, and is in accordance with the minutes of the judge, and it is approved ■and adopted in the final decree, a reversal will not be made for the reason that the same was not submitted to solicitors on the other side, before being •signed by the chancellor.
    9. Same—failure to grant leave to amend cross-hill. Where a demurrer is properly sustained to a cross-bill which shows no ground for affirmative relief, and the record fails to show that leave to amend the same was asked, •or that any amendment could have been made, consistent with the facts as proved, which could have obviated the objection thereto, an objection that no time was given to amend the cross-bill is destitute of merit.
    Writ of Error to the Appellate Court for the Eourth District;—heard in that court on writ of error to the Circuit ■court of Randolph county; the Hon. Amos Watts, Judge, presiding.

      This was a bill in equity, exhibited in the circuit court of Randolph county, by Barcroft & Co., a mercantile firm, composed of Mary A. Barcroft and Samuel K. Kille, executors of the last will and testament of Stacy B. Barcroft, deceased, Jacob T. Fine, Samuel K. Kille and William M. Reink, of the city of Philadelphia, and Elizabeth Baker, Hannah Swanwiek and Susannah Swanwiek, executors of the last will, etc., of John Swanwiek, deceased, against Robert Rankin, Thomas M., Joseph B., Jr., William M., Shadraeh B. and Edward Holmes, and Achsah, Charles and Mary J. Hartzell, heirs-at-law of Joseph B. Holmes, deceased.
    It is alleged that in the year 1871 certain real estate therein described “was held by one Thomas Beaver in trust, to secure to the firm of Barcroft & Co., composed of the complainants now composing said firm, and also of one George Lee, who has since retired from said firm, the payment of an indebtedness due said firm from Joseph B. Holmes, now deceased, amounting, on the first day of May, 1871, to the sum of $12,000; that on' the first day of May, 1871, by agreement with the then firm of Barcroft & Có. and the said Joseph B. Holmes, the said Thomas Beaver and wife conveyed said above described lands to the said Joseph B. Holmes, deceased ; that the only consideration given for said conveyance of said lands were the time drafts of the said Joseph B. Holmes, deceased, three in number, for the sum of $4000 each, payable in two, three and four years from date, respectively, all bearing date the first day of May, 1871, drawn upon the defendant Robert Rankin, and accepted by said Rankin in favor of the said firm of Barcroft & Co., and also certain other time drafts of said Joseph B. Holmes, drawn in favor of said firm of Barcroft & Co., upon said defendant Robert Rankin, and accepted by him, eight in number, all bearing date May 1,1871, for interest upon said three first mentioned time drafts during the time the same were maturing, payable in six months, one year, eighteen months, two years, thirty months, three years, forty-two months, and four years, respectively ; that two of said time drafts, for $4000 each, payable in three and four years from date, respectively, and four of said drafts drawn for interest upon said principal sum of $12,000,—one for $240, payable in thirty months from date, one for $240, payable in thirty-six months from date, one for $120, payable in forty-two months from date, and one for $120, payable in forty-eight months from date,—remain due and unpaid, and are all held and owned by your orators now composing the firm of Barcroft & Co.; that the said Joseph B. Holmes, now deceased, was in his lifetime, to-wit, on the first day of April, 1871, and had been long prior to that time, indebted to John Swanwick, late of said Randolph county, now7 deceased, in the sum of $4000, the precise character and nature of which indebtedness your orators are not advised, but they here aver the same was, by the said Holmes and said Swanwick and said defendant Rankin, considered and treated as a lien upon a part of the lands hereinafter described, at-that time, and that the said Joseph B. Holmes, deceased, being so indebted on the first day of April, 1871, drew his two' certain time drafts of that date, for the sum of $2000 each, payable to the said John Swanwick in three and four years, from date, respectively, and also eight other time drafts for interest upon said two first mentioned time drafts, during the time said first mentioned time drafts payable to said John Swanwick were maturing, payable in six months, one year, eighteen months, two years, thirty months, three years, forty-two months, and four years from date, respectively, all of which said time drafts were accepted by the said Robert-Rankin on the 10th day of April, 1871, and delivered to the said John Swanwick, deceased; that said two time drafts for $2000 each, and one of said interest acceptances for the sum of $120, payable on the first day of April, 1874, one for $60, payable on the first day of October, 1874, and one for $60, payable on the first day of April, 1875, are due complainants Elizabeth Baker, Susannah Swanwiek and Hannah Swan-wick, executrix of the will of John Swanwiek, deceased; that prior to the said conveyance of the lands by Beaver and wife to Holmes, deceased, Holmes had executed a deed for the same and other lands to Bankin; that the lands in this deed described were to be held by Bankin in trust; that the date of this deed is February 24, 1871, the consideration mentioned in the deed is one dollar, the number of acres is one thousand three hundred and fifty-one; that the said Bobert Bankin, at the time the deed from Holmes and wife to Ban-kin was executed, entered into a written agreement with said Holmes, to the effect that he would sell said lands in said deed described, and apply the proceeds of such sales first to the payment of all incumbrances on said lands, whether the same were secured by mortgage or otherwise, amounting at that time to the sum of $16,000, said agreement being in the nature of an equitable mortgage upon the premises described in said deed; that said claims referred to in said agreement to be first paid from the proceeds of the sale of said lands, amounting at the date thereof to the sum of $16,000, were the claims of the complainants evidenced by said time drafts; that the deed from Beaver to Holmes was obtained upon the faith of said agreement, and said time drafts accepted by said Barcroft & Co. and said John Swanwiek in confidence that said Holmes and said Bankin would faithfully keep and discharge their promises, at the time said time drafts were made and accepted, and that said Bankin would sell said lands, and from the proceeds of the sale pay off the said time drafts that were then and there, both by said Holmes and Bankin, recognized as representing said sum of $16,000 that was declared to be a charge upon said lands described in said deed from said Holmes to said Bankin, and was to be first paid out of the proceeds of the sale of said lands; that both Ban-kin and Holmes have admitted that said time drafts were secured by said agreement, and were a first charge upon said lands so held by Rankin, and that Rankin held said lands as-trustee, only; that Rankin has been declared a bankrupt, and obtained his discharge in bankruptcy, and that the estate of Holmes is insolvent; that Rankin refuses to sell the lands, but still holds the title to the same, except eighty acres in the bill described, sold under a prior deed of trust. ” The bill prays that the defendants may be required to answer, but not under oath; that an account may be taken of the amount-due complainants on said acceptances, under said agreement between Holmes and Rankin; that upon the taking of the-account, Rankin be ordered to sell the lands described in the deed from Holmes to Rankin, except eighty acres owned by the complainant Susannah Swanwick, or so much as may be necessary to pay the amount found due complainants, and costs of suit; that upon sale being made, Rankin be ordered to pay the amount found due complainants; that upon failure of Rankin to comply with the order, and sell, the master in chancery make sale of so much of the lands as shall be-necessary to pay the claims of complainants, with costs, and pay the amount due complainants, from the proceeds of the-sale, and with alternative prayer for relief.
    The defendants were properly brought before the court, and the defendant Rankin filed an answer, denying the truth, claiming the lands conveyed to him by Holmes in fee, and putting in issue the other material allegations of the bill.
    Upon the hearing, an interlocutory decree was entered, finding the rights of the parties to be as alleged in the bill, and referring the cause to the master in chancery to take and report an account, etc. The master’s report of an accounting finds that there is due the executors of John Swanwick, on their claim for principal and interest, to the first day of September, 1883, the sum of $6380; that there is due Barcroft- & Co., on their claim for principal and interest, to the first of September, 1883, the sum of $12,960; that defendant Rankin has paid to John Swanwick, in his lifetime, with interest. computed to September 1, 1883, $993.10; that defendant Rankin has paid to Barcroft & Co., interest computed on the same to September 1, 1883, $8837.60; that defendant has paid taxes on the land, with interest to September 1, 1883, $1180.27, as follows:
    Taxes for year 1872, paid Jan. 15, 1874, $252.81; interest on same nine years seven and a half months, at six per cent, $146.43, - $399.24
    Year 1872, paid Jan. 15,1874, $94.47; interest on same nine years seven and a half months, $36.28, 130.75-
    Year 1873, paid June 11, 1874, $177.78; interest on same nine years three months, $98.43, - - 276.21
    Year 1874, paid May 26, 1875, $127.51; interest on same eight years four months, $63.50, - - 191.01
    Year 1875, paid May 19, 1876, $127.18; interest on same seven years four months, $55.88, - - 183.06
    Amount taxes paid to May, 1876, - - - - $1180.27
    The master then finds that Robert Rankin was, on the 19th day of November, 1873, declared a bankrupt, and that his assigns in bankruptcy sold all claims that Robert Rankin had against these lands, for interest, taxes, and $4000 time-draft paid Barcroft & Co., on the 2d day of January, 1877,. and one John D. Rankin became the purchaser of said claims, and assigned the same to Robert Rankin for the sum of $150, with interest on the same to September 1, 1883, ($59.25,) and proceeds: “I find there is due Robert Rankin on account of these claims, computing interest to September 1, 1883, $209.25. I also find due Robert Rankin for taxes paid on the lands from January 29, 1877, to 1883, with interest from date of payment, to September 1, 1883, $899.30.” He also finds Rankin entitled to $75 per annum for six years’ service as trustee, ($450,) and $300 for attorney’s fees in this case, making the total amount allowed Rankin, $1858.55. He further finds that Rankin has collected rents amounting to $1467.03, which leaves a balance of $391.52 due Rankin.

      Exceptions were filed to the master’s report by both parties. The master disallowed them. They were renewed in the circuit court, and there again disallowed. Those by defendants were as follows: “That the master erred in proceeding until the defendant could be heard in the circuit court to have the decree vacated and expunged from the record; that the master erred in admitting time drafts payable to John Swanwick, because they are not liens or evidences of incumbrance on said land, but were created and brought into existence after the written agreement; because the master erred in admitting time drafts in favor of Barcroft & Co., over the objection of defendant, because they were not liens or incumbrances of any kind on said real estate, but were created after the date of said written agreement; because the master erred in refusing to pass upon the objection of complainant’s solicitor to the taking into account the pay for services prior to the year 1876, the defendant being thereby debarred from his right of excepting to the master’s ruling if adverse to his interest, and because by his final report he seems to tacitly have sustained and admitted this objection without defendant having an opportunity to except to his said action; because the master erred in finding that Robert Rankin was declared a bankrupt, and that his assignees had sold all claims that Robert Rankin had against these lands for interest, taxes, and $4000 paid Barcroft & Co., on the 27th day of January, 1877; because there was no evidence before the master from which he could find any such facts; because the only matter in the master’s record and before the master was the complainant’s objection, and no evidence whatever was before said master on which to sustain such finding; that the master erred in finding that John D. Rankin became the purchaser of the claims of Robert Rankin against said trust estate, and assigned the same to Robert.Rankin, for $150, and in finding that sum, with interest thereon, as the only sum due said Rankin; that there is no evidence before said master on which said finding could be sustained; that there was no evidence introduced before said master relating to said matter, and because the defendant had a perfect right and legal authority to purchase at said assignee’s sale, or from the purchaser at said sale, and as to the price he paid at said sale he occupies the relation of a stranger; because the assignee of said bankrupt never could have any interest in or control over the trust confided by said instruments in Robert Rankin; because the pretended decree under which the master was taking said account gave no direction to said master to make any such distinction, or to take into consideration any such proceedings in bankruptcy, and because the master’s action is wholly unauthorized by* said pretended decree, or by any evidence before him, as shown by his report of the evidence; because the master finds that prior to January 29, 1877, Rankin paid for taxes on said claims, etc., $11,010.97, and allows him for said sum only $209; because the master erred in omitting the amounts found to have been paid by defendant prior to January, 1877, and in omitting the amount" due defendant for his personal services prior to said date; because, as shown by the master’s report, there was no evidence to sustain said finding, in whole or in part; that the only evidence that said Rankin was discharged, is the certificate of discharge, showing that he was released from all debt existing prior to November 19, 1873, and that there are no data in any of said testimony on which said master can fix his assumption that January, 1877, was or could be of any importance whatever; that said assignee’s sale was not a sale made by defendant Rankin as trustee, and his purchase was not a purchase of the trust property the dealing in which by the trustee is prohibited by public policy; because the master erred in not finding for defendant the amounts of his advances, making a total of $13,035.27, instead of the sum of $1858.55 which has been allowed in the conclusions of said master’s findings; because evidence would justify the finding a credit of the sum of $13,035.27, while there is a total absence of evidence to justify the finding of $1858.27.”
    The court decreed that the master’s report be approved,, and that so much of the lands described in the bill as should be necessary to pay the amounts so found due, he sold by the master in chancery. Upon this decree the defendant-Rankin prosecuted a writ of error from the Appellate Court-for the Fourth District, and that court, on hearing, affirmed the decree of the circuit court. The present writ of error is-prosecuted to reverse that judgment.
    Mr. J. Perry Johnson, Mr. Henry E. Mills, and Mr. A. G. Gordon, for the plaintiff in error:
    The administrator or executor of Albert W. Senter should have been made a party. Lynch v. Rotan, 39 Ill. 14; Smith v. Rotan, 44 id. 506; Ryan v. Lynch, 68 id. 160; Stephenson v. Mathers, 67 id. 123; Moore v. Munn, 69 id. 591; Alexander v. Hoffman, 70 id. 114; Packwood v. Gridley, 39 id. 388;. Hopkins v. Roseclare Lead Co. 72 id. 377; McGraw v. Bayard, 96 id. 147; Gudgel’s Admr. v. Ketterman, 108 id. 50; Manufacturing Co. v. Wire Fence Co. 109 id. 71.
    The writing should, with reasonable certainty, show who the-beneficiary is, and must so define his interest that a fraudulent party may not be substituted. The words, “existing incumbrances on said property, ” even in the light of the testimony, do not show who are the beneficiaries first secured.. Ricketson v. Ricketson, 19 Cal. 330; Booth v. Baun, 9 Conn. 286 ; Gilman v. Moody, 43 N. H. 239; Hunt v. Robinson, 11 Ohio St. 232; Gill v. Torney, 12 id. 38; Bramball v. Flood,. 41 Conn. 68; Shaw v. Lord, 12 Mass. 447.
    The purchaser at an assignee’s sale takes such interest as the bankrupt had prior to the proceedings in bankruptcy against him, and stands on the same footing with a purchaser at an execution sale. Steadman v. Taylor, 17 Bank. 284; Carr v. Fearington, 63 N. C. 560; Anderson v. Miller, 7 S. & M. 590-The purchaser at a bankrupt sale takes no higher right than the bankrupt himself had. Baker v. Vining, 30 Me. 121.
    Rankin had the right to purchase at the sale made by his assignee. Phelps v. McDonald, 2 McArthur, 380; Arnold v. Leonard, 12 S. & M. 258.
    Personal assets do not vest immediately in the heir, but in the executor or administrator. 2 Blackstone’s Com. 420, note 38; Williams on Executors, note 527; Story on Eq. PL sec. 170.
    The manner in which the interlocutory decree was prepared is obnoxious to good chancery practice. Stevens v. Coffee, 39 Ill. 148; Schneider v. Siebert, 50 id. 285.
    Mr. William Hartzell, and Mr. James J. Morrison, for the defendants in error:
    It is competent for a party, after the legal title to real estate has been vested in him, to make a written declaration that he holds such title in trust for another. Parol evidence is competent to show whose name should have been inserted in a blank in a declaration of trust, as cestui que trust. Fast v. McPherson, 90 Ill. 497.
    The want of proper parties can not be taken advantage of for the first time in the Supreme Court, unless it appears that parties are omitted whose rights are so connected with the subject matter of the suit that a final decision thereof can not be made without materially affecting their interests. Conwell v. Watkins, 71 Ill. 488.
    A court of equity, independent of any agreement, would consider money advanced by a trustee, to purchase in an outstanding title, as an advance for the benefit of his cestui que trust, and not for his own use, giving him a lien on the property until he has reimbursed the advancement. King v. Cushman, 41 Ill. 31.
    Trustees and others sustaining a fiduciary and confidential relation can not deal on their own account with the thing or the persons falling within the trust or relationship. Dennis v. McCagg, 32 Ill. 429.
    A trustee, executor or assignee can not buy up a debt or incumbrance to which the trust estate is liable, for less than is actually due thereon, and make a profit to himself; but such purchase inures for the benefit of the trust estate, and the creditors, legatees and cestui que trust shall have all the advantage of such purchase. 1 Perry on Trusts, sec. 428.
    In foreclosing a mortgage, where junior mortgagees and incumbrancers are parties defendant, a cross-bill is unnecessary unless some relief other than a foreclosure is sought. The foreclosure of the prior mortgage affords relief to all ■subsequent incumbrancers who are made parties, and have the right to participate in the distribution of the surplus. Soles v.Sheppard, 99 Ill. 616.
    By the operation of the Bankrupt law the assignee becomes vested with all the property and rights that the bankrupt had at the time of the assignment. Talcott v. Dudley, 4 Scam. 435; Vairin v. Edmonson, 4 Gilm. 124; Griswold v. McMillan, 11 Ill. 590.
    Where a decree is entitled as of a certain term of court, and is so certified in the record, this will be conclusive evidence that the decree was made in term time, and not in vacation, and the record can not be impeached. Mason v. Patterson, 74 Ill. 191.
   Mr. Justice Scholfield

delivered the opinion of the Court:

The errors assigned will be considered under the points and in the order discussed in the argument of plaintiff in error.

In the written agreement of Rankin and Holmes it is recited that the property has been conveyed to Rankin upon these trusts, namely: “The property is to be subdivided and sold, or otherwise disposed of by Rankin, in such manner and quantities, on such terms, and at such times and prices, as he shall think best, and the funds and proceeds arising from such disposition and sale of the said property shall be applied to the following purposes, to-wit: First, to the extinguishment and satisfaction of the existing incumbrances on said property, whether by way of mortgage or otherwise, amounting to some $16,000 at the date of these presents; secondly, to the payment of $30,000, on account of the running account current, to said Rankin from said Holmes; thirdly, to the payment and liquidation of a claim of the estate of Albert W. Senter against the said Holmes, provided said claim shall not exceed the sum of $10,000; and fourthly, the net balance of said proceeds, if any there be, after discharging the above incumbrances and debts, and paying the costs, interest, and expenses of executing this trust, shall be divided equally between the said Rankin and the said Holmes. ” The circuit court, in the interlocutory decree, found and decreed that the respective claims of Barcroft & Co. and the executors of John Swan wick were embraced in and composed the said sum of $16,000 declared in this agreement to be a first lien on the lands. Plaintiff in error contends that the evidence does not sustain this finding, and this is the first point made in his argument as a ground of reversal.

It may be conceded, as contended by counsel, that there is rio evidence showing that these claims were such that they could be enforced by virtue of a vendor’s lien, or that they were in judgment, or secured by mortgage on the land,—in short, that they were not, in fact, existing incumbrances on the land; still, there is no other indebtedness shown that could 'possibly have been intended, and no other incumbrances on the lands. No other creditors are claiming this $16,000 prior lien, and, from the terms of the agreement, the second and third preferences are only to be satisfied in the order stated. Neither of them can, upon any reasonable construction, be advanced and substituted for the first preference. But the evidence is full and complete that Holmes and Rankin intended the claims of Barcroft & Go. and John Swanwick to be paid under this first clause. The claim of the former was then $12,000, and that of the latter $4000, making the total $16,000. In the most favorable view that can be taken for Bankin, the parties were simply mistaken in assuming that these claims were existing incumbrances on the lands; but in the absence of intervening rights of third parties this mistake was of no consequence. A court of equity would have rectified it on bill filed for that purpose by Barcroft & Co. and the executors of Swanwick. What a court of equity would compel them to do, they could, of course, do of their own volition. If there had been no attempt before to declare a trust, Bankin might have declared it by letter, or by any other instrument in writing, declaring that he had held the lands in trust. (Perry on Trusts, 1st ed. 83.) And the right to thus declare a trust in the first instance, necessarily implies the right to make certain and specific a trust theretofore attempted to be declared. (Fast et al. v. McPherson, 90 Ill. 497.) Bankin went into bankruptcy in 1873, and in the schedules and exhibits filed by him on that occasion he clearly and emphatically declared and swore that he held these lands in trust, first, for the payment of the claims of Barcroft & Co. and John Swanwick, under the agreement between him and Holmes, and afterwards as further provided by that agreement. And in letters to Barcroft & Co., of a prior date, he also distinctly and fully acknowledged the trust.

The next ground of reversal urged is, that the administrator or executor of Albert W. Senter was not made a party. This objection was urged for the first time in the Appellate Court. The unknown heirs at law of Albert W. Senter were made parties by publication, and to the sufficiency of .the notice to them no objection is pointed out by counsel or perceived by the court. We may therefore assume that the heirs-. at-law of Senter are properly before the court.

The preference in the third clause of the agreement between Holmes and Bankin is of a claim of the estate of Albert W. Senter. Plainly, this assumes that Senter is dead, but does not attempt to declare whether the estate has been settled, or .whether Senter died testate or intestate. The word “estate,” as used, means simply that this claim is one to be collected and added to the mass of his estate,—or, in other words, that it constitutes part of his estate. The period of more than seven years having intervened between the execution of the instrument and the filing of the bill, we must presume the •estate had been settled, and that this part of it had vested in the heirs-at-law, nothing appearing to the contrary. In «equity the title is treated as being where, in good conscience, it ought to be, and we think to have made the present objection available, plaintiff in error should have urged it in the circuit court, and there affirmatively shown that the estate of Senter had not been settled. We are of opinion, under the circumstances, that the only interest to be protected under this third clause was that of the heirs-at-law of Senter, and that plaintiff in error will be amply protected by the decree in making payment to them.

The next objection taken to the decree is, that Bankin is not allowed sums paid by him before the filing of the bill to Barcroft & Co. and the executors of Swanwick, amounting to some §9830.70. If he were decreed to again pay this ■amount, the position would be tenable; but he is not. The •decree only directs a payment of the balance found due on those claims. By the first clause of the agreement between Holmes and Bankin, we have seen Bankin accepted the trust •of paying the claim of Barcroft & Co., then amounting to $12,000, and that of John Swanwick, then amounting to §4000! By his previous acceptances of the time drafts, Ban-kin became legally liable to pay these sums, and his acceptance of the trust made them payable before anything else, «out of the proceeds of the sales of the lands. When, therefore, he had paid $9830.70 of the amount, he only owed that much less, and he was only obliged to sell less, by that amount, of the lands conveyed to him in trust. But as to the residue of the indebtedness the trust still existed. The doctrine of subrogation could have no application, for his position is pre-. cisely that of a mortgagor paying part of his debt secured by the mortgage. It would be both unjust and absurd that by making a partial payment he could be preferred, as to the balance of the claim, over the mortgagee.

When Rankin went into bankruptcy, the debts due him, if any, on account of this trust, and his property rights in these lands, went to his assignee. His duties as trustee were unaffected by the proceeding. If any claims in favor of Rankin vested in his assignee upon his becoming bankrupt, which were prior liens upon these lands, which we very much doubt, it is quite obvious it still remained the duty of Rankin, as trustee, to pay off and remove them, and for doing that he would be entitled to precisely what he paid out. If he had a prior lien which passed to the assignee, he thereafter occupied towards it the relation of a stranger. It then stood as a debt to anyone else. No principle is better settled than that a court of equity will not permit a trustee to speculate in the subject of his trust. If he buy in outstanding claims, his purchase is treated as a payment only, and he is allowed. just what he paid out. (Perry on Trusts, 1st ed. sec. 428.) But this is in conformity with the ruling below. We are satisfied that if there be any error in the accounting, it is in favor of Rankin, and not to his prejudice. It is, to our minds, very questionable whether he should, as against the defendants in error, have been allowed any compensation for his services.

Objection is urged that the interlocutory decree was not. submitted to counsel for plaintiff in error, and that it was prepared in vacation. The interlocutory decree, we have before seen, was authorized by the-evidence. It was in conformity with the minutes of the judge, and has since been approved and adopted by the final decree. Under these circumstances, it was not indispensable that it should have been submitted to opposite counsel for their approval, if, in any event, that would have been necessary.

The objection that no time was allowed to amend the cross-bill, is destitute of merit.

The demurrer to the cross-bill was properly sustained. No ease was stated showing any ground of affirmative relief on behalf of the plaintiff in error. It does not appear that leave to amend the cross-bill was asked, or that any amendment could have been made thereto, consistent with the facts as proved on the hearing, which w/mld have removed'the objection to it.

The errors assigned raise other points, but inasmuch as nothing is said in argument in their support, we are authorized to assume that they are abandoned.

We have gone through the entire record with much care, and we feel thoroughly satisfied that there is no reason for reversing the decree of the circuit court. It favors the plaintiff in error at least so far as he has a right to claim that it should. It does him no substantial injustice.

The judgment of the Appellate Court is therefore affirmed.

Judgment affirmed.