Creswill v. Grand Lodge Knights of Pythias of Georgia/Opinion of the Court

A secret fraternal and benevolent order known as the Knights of Pythias was organized as a voluntary association in Washington, District of Columbia, in 1864. Pursuant to the authority conferred by an act of Congress approved May 5, 1870 [16 Stat. at L. 98, chap. 80], authorizing the formation of corporations in the District of Columbia, the persons composing the Supreme Lodge, the governing body of the order, became incorporated as the Supreme Lodge Knights of Pythias by filing in the proper office the certificate required by the act. Among other things required to be stated in the certificate was the name or title by which the society was to be known in law and the particular business and objects of the society. The statute provided that upon the filing of the certificate the persons signing and acknowledging the same, and their associates and successors, 'shall. . . be a body politic and corporate, by the name and style stated in the certificate;. . .' The life of the corporation thus created, it would seem, expired by limitation in 1890. On June 29, 1894 [28 Stat. at L. 96, chap. 119], however, by a special act of Congress, the Supreme Lodge was again made a corporation of the District of Columbia by the name of the Supreme Lodge Knights of Pythias, and still exists as such. Membership in the order is restricted to white males. In addition to a Grand Lodge and subordinate lodges in each state to which it has been extended, the order conducts an insurance branch known as the Endowment Rank and a military branch known as the Uniform Rank. The Grand Lodge of Georgia was instituted by the Supreme Lodge on March 20, 1871.

An order of Knights of Pythias of the same general nature as that above described, consisting of members of the colored race, was established in Mississippi on March 26, 1880. It became a corporation of the District of Columbia on or about October 10, 1889, by virtue of the general incorporation act of Congress of May 5, 1870, already referred to, under the name and style of 'The Supreme Lodge Knights of Pythias, North and South America, Europe, Asia, and Africa.' The order was introduced into Georgia in June, 1886, and a Grand Lodge was instituted in that state by the Supreme Lodge on December 15, 1890. The corporation of October 10, 1889 was reincorporated December 14, 1903, under the same general law of May 5, 1870, by the name of 'Knights of Pythias of North America, South America, Europe, Asia, Africa, and Australia.' After such reincorporation, on January 15, 1905, the Supreme Lodge issued a new charter to the Grand Lodge of Georgia.

The Supreme Lodge of Knights of Pythias, which, as heretofore stated, was finally incorporated in 1894 by special act of Congress, the Grand Lodge of Georgia, which was subject to its jurisdiction, and the officers of such Grand Lodge, were parties complainant in an amended petition in this litigation commenced in the superior court of Fulton county, Georgia. The defendants were the officers of the Grand Lodge in Georgia of the other body, who had made application to the court in which this suit was commenced to be incorporated as a domestic corporation of Georgia under the name and style of 'The Grand Lodge Knights of Pythias of North America, South America, Europe, Asia, Africa, and Australia, Jurisdiction of Georgia.' The petition filed in the cause recited the organization of the order of the plaintiffs substantially as heretofore stated, and the defendants were alleged to be wrongfully attempting to incorporate under a name which infringed that of plaintiffs' order, and to be unlawfully styling themselves Knights of Pythias, and to be fraudulently using the insignia, emblems, etc., of the plaintiffs' order. The averments of the petition and the amended petition as to damage sustained by the alleged unlawful acts of the defendants and their associates were stated in general terms to constitute a wrong and injury to petitioners and to the membership in Georgia, and to be a fraud upon the public. The relief prayed was, in substance, a permanent injunction enjoining the prosecution of the application for incorporation, and the use by the defendants and the members of the subordinate lodges under their jurisdiction of the name 'Knights of Pythias' and of other names, insignia, emblems, etc., which would be like or a colorable imitation of those in use by the plaintiffs' order.

By their answer the defendants put the plaintiffs to proof of the material averments of the petition, set up the origin, growth, and purposes of the order of which they were members, and especially stated that it was confined to the 'negro race and the Asiatic races.' The incorporation of the order under the general incorporation act of Congress of 1870 was also averred, and the claim was made of lawful right to the use of the names, signs, symbols, emblems, insignia, and the other paraphernalia adopted by the corporation, and the good faith of the corporation and all concerned in the matter was averred. It was further stated that the membership of the order in the United States aggregated 80,747, and in the state of Georgia 11,805, and that there never had been an attempt to confuse the order with that of which the plaintiffs were members, and that no such confusion in fact had ever arisen or could arise, the field of operation of the orders being absolutely different. Laches of the plaintiffs was pleaded in bar of any relief, on the ground that the existence of the order and its operations had been publicly known and was matter of common knowledge for many years.

The case came on for hearing on a motion for preliminary injunction, and after hearing the evidence and argument of counsel the court denied an injunction and quashed a preliminary restraining order. The plaintiffs took the case by a bill of exceptions to the supreme court of Georgia. That court, in disposing of it, referred to the fact that the Supreme Lodge of the order represented by plaintiffs was a corporation of the District of Columbia, and that by amendment of the petition it had been joined as a plaintiff. It further stated:

That 'the defendants have been operating and are seeking to be incorporated in this state under a name which is claimed to be an infringement of the name of the plaintiff's association, and the question is involved whether and how far the plaintiff, which is a foreign corporation, might be affected by the state's granting a charter to the defendants as a domestic corporation in the name and for the purpose asked, and also whether there is a fraudulent purpose or design to so infringe.'

It was next observed that 'the presiding judge should have enjoined the defendants from obtaining the charter applied for, so as to preserve the status in respect thereto until, on final jury trial, all of the questions of law and fact can be fully adjudicated.' The court held that error had been committed in refusing to grant an injunction as to the charter applied for, and the 'ruling of the chancellor denying the injunction in other matters' was allowed 'to stand until the final trial or further order of court, leaving open all the other questions for future determination.' 128 Ga. 775, 58 S. E. 163. There followed a hearing of the case before the court and a jury, and evidence, both oral and documentary, was introduced. The evidence showed, without contradiction, that in addition to being incorporated as stated in the answer, the defendant order had also organized on May 24, 1905, as a fraternal beneficial association by its corporate name under the insurance laws of the District of Columbia; that the laws enacted by the order were such as were common to a fraternal body; that the rituals of the order and its emblems, flags, badges, pins, and jewelry adornment were on public sale, free to be purchased by anyone; that the membership of the order throughout the United States aggregated 300,000; that there had been collected and disbursed to the members of the order between July 1, 1906, and July 1, 1907, more than $500,000; that the collections in Georgia during the existence of the order there aggregated $180,232.21; that there had been paid to the widows and orphans of deceased members in Georgia $148,680, and that the collections in Georgia aggregated $51,000 a year, excluding the expense of burying their dead, which was $9,000 more. After instructing the jury as to the law deemed to be applicable, and observing that the case was of a character wherein the law provided that questions might be propounded, to be answered by the jury, such answers to stand as their verdict, the court submitted fourteen questions to be answered by the jury. The questions, with the answers given, are copied in the margin.

Subsequently a final decree was entered granting the relief prayed by the complainants. A copy of the decree is excerpted in the margin.

Reciting that they were dissatisfied with the verdict of the jury upon the questions submitted, the defendants moved for a new trial upon the ground that the verdict was contrary to the evidence and without evidence to support it, that it was strongly and decidedly against the weight of evidence, and was contrary to law and the principles of equity. Nearly six months afterwards, by leave of court, defendants amended the motion by adding thirty-six additional grounds, attacking specifically each of the answers to the questions, charging each to be not only contrary to the evidence, but contrary to the charge of the court, and in addition error was alleged in the charge as given and to the failure to instruct the jury as pointed out in some of the specifications of error. The omission to specifically instruct the jury that the defendants claimed a right to their name under a charter from the District of Columbia by virtue of an act of Congress, and the answers of the jury to certain of the questions, were alleged to violate defendants' rights under the charter and to be repugnant to the due faith and credit clause of the Constitution of the United States, and the decree was alleged also to constitute a violation of the general incorporation act under which the order of which defendants were a part had been incorporated. The motion for a new trial was overruled. A bill of exceptions was soon afterwards allowed, which was a certified to contain 'all the evidence' and the material portions of the record. The case was then taken by a writ of error to the supreme court of the state, where the judgment was affirmed. 133 Ga. 837, 134 Am. St. Rep. 231, 67 S. E. 188, 18 Ann. Cas. 453. This writ of error was then prosecuted.

In the trial court, in various forms, plaintiffs in error, defendants below, invoked the right to the use of its corporate name and the incidental right to the designation 'Knights of Pythias' and the use of insignia, emblems, etc., appropriate to the order. As this right or privilege was claimed in virtue of the authority to incorporate conferred by the general incorporation act of May 5, 1870, enacted by Congress, it constituted a right or privilege claimed under an authority exercised under the United States, which, being denied by the state court, is reviewable here by virtue of the provisions of § 237 of the new Judicial Code [36 Stat. at L. 1156, chap. 231, U.S.C.omp. Stat. Supp. 1911, p. 227] § 709, Rev. Stat. (U.S.C.omp. Stat. 1901, p. 575). Dupasseur v. Rochereau, 21 Wall. 130, 22 L. ed. 588; Embry v. Palmer, 107 U.S. 3, 27 L. ed. 346, 2 Sup. Ct. Rep. 25; Ferris v. Frohman, 223 U.S. 424, 431, 56 L. ed. --, 32 Sup. Ct. Rep. 263, and cases cited. The fact that corporations created by the general law of 1870 and the special act of Congress of 1894, heretofore referred to, derived their rights and powers under a law of the United States, is recognized in the following cases which were removed from state courts: Supreme Lodge, K. P. v. Kalinski, 163 U.S. 289, 41 L. ed. 163, 16 Sup. Ct. Rep. 1047; Supreme Lodge, K. P. v. Withers, 177 U.S. 260, 44 L. ed. 762, 20 Sup. Ct. Rep. 611, and Supreme Lodge, K. P. v. Beck, 181 U.S. 49, 45 L. ed. 741, 21 Sup. Ct. Rep. 532.

Whether or not the defendants below and their successors were entitled to prosecute in the state court the application to be made a domestic corporation of Georgia is, in our opinion, plainly a question non-Federal in character, and we therefore pass its consideration. The question, however, whether the right or privilege arising from the authority exercised under legislation of Congress was invaded by the decree complained of, so far as it forbade the use of the corporate name or a designation containing the distinctive words 'Knights of Pythias' and the use of the emblems and insignia of such order, being within our competency to review, we come to the consideration of the question whether the asserted right or privilege was properly denied.

It is manifest from the record that the existence within the state of Georgia of two bodies of Knights of Pythias, controlled by corporations of the District of Columbia, and the authority exerted over the membership in that state by the governing body of each order, was not contrary to any state statute, and the supreme court of Georgia, in determining the right to relief, applied what it conceived to be the applicable principles of general law. Speaking in a general sense, it is true to say that the supreme court of Georgia deemed the case before it to be controlled by the principles of law applicable to trademarks and tradenames, and in substance held: (a) That an association whose primary object was fraternal or benevolent, first appropriating and using an arbitrary or fanciful name, acquires an exclusive right to the same; (b) that a subsequent unauthorized use by others of such name or a colorable imitation thereof would be unlawful; (c) that in the absence of laches, if, as a result of such wrongful use, injury was occasioned to the rightful owner by the unlawful appropriation and use of the name, equity would afford relief. Coming to apply these principles the court held, first, that there had been a lawful appropriation of the name by the plaintiff corporation, and an unauthorized and wrongful use thereof by the defendants; indeed, that such use was made 'with a fraudulent purpose and design;' second, that the unlawful appropriation had inflicted injury upon the property rights of the lawful appropriator. On this subject, the court said:

'The plaintiffs' order, while primarily fraternal and benevolent, has certain property and business attributes and activities, including the acquiring and ownership of large amounts of property, and the conducting of a department of insurance protection. Under the evidence, the element of injury is sufficiently shown.'

The conclusion of the court that there had been, as a matter of fact, no such laches as should prevent a court of equity from affording relief, was thus stated:

'Taking into consideration that the subject of controversy in this case is in the nature of a tradename, and that the contest is between two secret societies whose relations to each other during the period from the appropriation of the name by one to the institution of the suit for injunction by the other was not the usual relation that one person ordinarily sustains to another, we cannot say that the finding of the jury that the plaintiffs had not acquiesced in the use of their name by defendants is not supported by the evidence. The suit was filed promptly after the defendants came out into the open, and by petition, duly published, asked the court to give legal sanction to their use of the plaintiff's name.'

We do not stop to consider whether the court was right under principles of general law in applying to organizations like those here involved the rules applicable to trademarks and tradenames and unfair competition in trade, a subject as to which there is conflict in the decisions, because, under the view we take of the case, we propose, for the sake of argument only, to indulge in the hypothesis that the conception which the court entertained on the subject was correct. It is indisputable that the court was clearly right, as a matter of law, in holding that a court of equity in any event would not afford relief where there had been such laches as would cause it to be inequitable to do so. Saxlehner v. Eisner & M. Co. 179 U.S. 19, 35, 45 L. ed. 60, 74, 21 Sup. Ct. Rep. 7. The question, then, is, Can the decree of the court be maintained consistently with the doctrine of laches which the court expounded and which we have accepted as correct beyond all controversy? As the injury which we thus state rests upon the premises that all the propositions of law applied by the court are to be taken as correct, it follows that there is no possibility of deciding there was material error unless it is to be found in the application which the court made of the principle of law which it applied to the facts established by the evidence, all of which is in the record in connection with the findings made by the jury. While it is true that upon a writ of error to a state court we do not review findings of fact, nevertheless two propositions are as well settled as the rule itself, as follows: (a) that where a Federal right has been denied as the result of a finding of fact which it is contended there was no evidence whatever to support, and the evidence is in the record, the resulting question of law is open for decision; and (b) that where a conclusion of law as to a Federal right and a finding of fact are so intermingled as to cause it to be essentially necessary, for the purpose of passing upon the Federal question, to analyze and dissect the facts, to the extent necessary to do so the power exists as a necessary incident to a decision upon the claim of denial of the Federal right. Kansas City Southern R. Co. v. C. H. Albers Commission Co. 223 U.S. 573, 591, 56 L. ed. --, 32 Sup. Ct. Rep. 316; Cedar Rapids Gaslight Co. v. Cedar Rapids, 223 U.S. 655, 668. 56 L. ed. --, 32 Sup. Ct. Rep. 389; Washington ex rel. Oregon R. & Nav. Co. v. Fairchild, 224 U.S. 510, 56 L. ed. --, 32 Sup. Ct. Rep. 535. The contentions here made bring this case under the first category, since the insistence here is that there was not any evidence justifying the findings made by the court concerning fraudulent purpose, injury to property, deception of the public, etc.

On examining the evidence we are compelled to say we do not think it has any tendency to prove an intent on the part of the defendant order by the adoption of the designation given to their body or the use of the emblems, insignia, etc., employed, to make it appear that their order and that of the complainant is one and the same, or that it tends to show that the use of the corporate name or the distinctive words 'Knights of Pythias' and the emblems, etc., of that order, operated in any degree to deceive the public or to work pecuniary damage to the complainant order within or without the state of Georgia. But strong as are our convictions as to these subjects, we prefer not to rest our conclusion upon them, but rather to place the decree of reversal which we shall render, upon the application to the facts of the well-settled doctrine on the subject of laches. As we have observed, the court below, in considering the facts on that subject, made no reference to the evidence, but assumed that it must be that the findings of the jury were sustained by evidence, and indulged in the assumption that it was natural to suppose that the long-continued existence and development of the defendant order had not been interfered with by the complainant corporation because not known until the defendants came into the open by making an application to be made a domestic corporation of Georgia. The facts, however, which we have stated concerning the establishment of the order, its lodgment in Georgia, its vast expansion, its years of duration, and its volume of transactions, were not disputed in any particular whatever, and therefore leave no room for any other but the legal conclusion of laches. This, we think, in the most conclusive way demonstrates the violation of the elementary principles of equity which would result from the enforcement of the injunction which the court awarded. And the conclusion just stated renders it unnecessary to point out the incompatibility between the holding, on the one hand, that there was injury to the property rights of the plaintiff corporation and a deceit of the public arising from the existence of the defendant order and its activities, and the holding, on the other hand, that laches cannot be imputed to the plaintiff corporation as a result of its inaction during the many years in which the defendant corporation existed and exercised its attributes and functions, because the wrongs thus being publicly inflicted could not be presumed to have been known until the defendant order came out into the open by the application for incorporation under the law of the state of Georgia.

The judgment of the Supreme Court of Georgia is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.

When a Federal right is held by a state court to have been lost by subsequent conduct that of itself involves no Federal question, I think we are not at liberty to reexamine the decision unless we can say that the state court in substance is denying the right. So it has been held or strongly intimated as to res judicata (Northern P. R. Co. v. Ellis, 144 U.S. 458, 36 L. ed. 504, 12 Sup. Ct. Rep. 724); estoppel (Hale v. Lewis, 181 U.S. 473, 45 L. ed. 959, 21 Sup. Ct. Rep. 677); the statute of limitations (Rector v. Ashley, 6 Wall. 142, 18 L. ed. 733); and laches (Moran v. Horsky, 178 U.S. 205, 214, 215, 44 L. ed. 1038, 1041, 1042, 20 Sup. Ct. Rep. 856; Pierce v. Somerset R. Co. 171 U.S. 641, 43 L. ed. 316, 19 Sup. Ct. Rep. 64); and the principle was recognized only the other day in Gaar, S. & Co. v. Shannon, 223 U.S. 468, 470, 471, 56 L. ed. --, 32 Sup. Ct. Rep. 236. I do not see the distinction by which we can review the decision in the opposite case, where it is held that the right is not lost or cannot be interfered with because of laches on the other side. In a case where the state court held that there was no defense under the statute of limitations or estoppel, the writ of error was dismissed. Carothers v. Mayer, 164 U.S. 325, 41 L. ed. 453, 17 Sup. Ct. Rep. 106. I will content myself with saying that I do not see how the decision can be reversed on the ground of laches.

Mr. Justice Lurton concurs in this view and is of opinion that the writ should be dismissed.