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Senner v. Bank of Douglas

Supreme Court of Arizona

July 15, 1960

George F. SENNER, Jr., Jack Buzard and Eddie Williams, members of and constituting the Arizona Corporation Commission, Appellants.
v.
BANK OF DOUGLAS, an Arizona Corporation, Appellee.

Page 49

[88 Ariz. 196] Wade Church, Atty. Gen., Conner, Jones & Murphy, Tucson, and Kramer, Roche, Burch & Streich, Phoenix, for appellants.

Ryley, Carlock & Ralston, Phoenix, for appellee.

BERNSTEIN, Justice.

The members of the Arizona Corporation Commission (hereinafter called the 'Commission') appeal from a judgment of the Superior Court of Maricopa County for a peremptory writ of mandamus directing the Commission to accept for filing an amendment of the articles of incorporation of The Bank of Douglas (hereinafter called the 'Bank') changing its corporate name to 'The Arizona Bank,' and from an order denying the Commission's motion for a trial.

In June 1959 the Bank filed with the Commission a reservation of the name 'The Arizona Bank' (see A.R.S. § 10-104, subdivision A, par. 20). Thereafter, the Southern Arizona Bank & Trust Co. filed a protest to the proposed change of name with the Commission, which on July 7, 1959 entered the following order:

Page 50

'That the application of the Incorporating Department of the Arizona Corporation Commission of The Bank of Douglas to change the name to The Arizona Bank be refused on the grounds and for the reason that the name applied for is similarly deceptive to other banks doing business in the State of Arizona, which are directly in competition with the Bank of Douglas banking business; and would have a tendency to funnel off business that would have come to the other banking institutions except for a similarity of names. This is particularly so in view of the fact that these two institutions are situated next door to each other in Tucson, Arizona.'

On July 15, 1959 the Bank presented to the Commission for filing a certified copy of an amendment to its articles of incorporation changing its name to The Arizona Bank. The amendment was accompanied by a letter from the State Banking Department interposing no objection to the change of name, and a certified copy of a resolution of the Board of Directors of Arizona Bank Corporation consenting to the change. The Commission refused to accept the amendment and the Bank petitioned the Superior Court of Maricopa County for a writ of Mandamus against the Commission.

[88 Ariz. 197] After the Superior Court issued an alternative writ, the Commission moved to quash and dismiss on the ground that the Bank's petition failed to state a claim upon which relief can be granted. The Commission also filed a Responsive Pleading which asserted, in sum, that it had properly exercised its discretion in refusing to accept the amendment, for the reason that the proposed change of name was deceptively similar to the names of other existing corporations in the State. In its memorandum the Commission cited Southern Arizona Bank & Trust Co. (allegedly generally known as 'Southern Arizona Bank'), as well as two other existing corporations, with allegedly deceptively similar names.

In its order directing the issuance of a peremptory writ of mandamus, the Superior Court stated the issue to be 'whether or not the requested name 'The Arizona Bank' is deceptively similar to the name 'The Southern Arizona Bank and Trust Company.'' The court rejected the significance of the 'nickname' 'The Southern Arizona Bank' and found that the Commission's pleading did 'not create issues of fact which are to be tried.' The court entered judgment for the Bank and denied each of the Commission's motions.

Both the Bank and the Commission claim to be entitled to judgment on the basis of the pleadings filed in this proceeding. The Commission contends that as no denial was made to its allegation that there were other corporations with names deceptively similar to the Bank's proposed name, such allegation must be assumed to be true. The Bank, on the other hand, claims that the Commission's Responsive Pleading alleges only conclusions, and not 'facts,' and, accordingly, is legally insufficient.

It is clear that a more detailed or factual pleading by the Commission would have better served the resolution of this proceeding. The Responsive Pleading of the Commission did not state the corporate names which are allegedly deceptively similar to the Bank's proposed name. The first reference thereto was contained in the Commission's memorandum, which was filed with the Superior Court on the same day as the Bank's memorandum was filed. Accordingly, the Bank did not respond to the alleged conflict with these other corporations, although it has attempted to do so in its brief on this appeal. The state of the pleadings also caused the Superior Court to frame the issue in terms of the similarity of the Bank's proposed name with the Southern Arizona Bank & Trust Co. and not with the names of the other two corporations now offered by the Commission. Indeed, on the argument of this appeal, this Court was urged to take judicial notice of the existence of these other two corporations and, apparently, to decide this proceeding de novo.

On the other hand, it is also clear that the allegation in the Commission's Responsive[88 Ariz. 198]

Page 51

Pleading that 'there were corporations of the State of Arizona then existing to which the proposed name The Arizona Bank is deceptively similar' is broad enough to put in issue corporations other than the Southern Arizona Bank & Trust Co. The Commission's order of July 7, 1959 also expressly refers to 'other banks,' although the statement 'that these two institutions are situated next door to each other in Tucson, Arizona' seemingly refers only to the Bank of Douglas and the Southern Arizona Bank & Trust Co.

Because of the foregoing and, especially, the public interest involved in the adoption of corporate names by banks doing business in this State, we deem it inappropriate to resolve this appeal on the basis of the form of the pleadings alone. A.R.S. § 10-122, subdivision 1, provides that

'no corporation shall take a name which is the same as, or deceptively similar to, the name of another existing corporation of this state or of any foreign corporation licensed to do business in this state,'

unless such other corporation properly consents to the use of such name. The initial question is whether mandamus is a proper remedy to compel the Commission to accept articles of ...


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