Allstate Insurance v. Allstate Investment Corp. (210 F. Supp. 25, 1962)

BENJAMIN C. DAWKINS, Jr., Chief Judge.

Plaintiff, Allstate Insurance Company, an Illinois corporation authorized to do business in Louisiana, for many years has vigorously pursued the insurance business throughout the United States, A wholly-owned subsidiary of Sears, Roebuck and Co., its advertising expenditures for the years 1947 through 1960 were $41,331,915.65, with more than $8,000,000 expended in 1960 alone, of which $68,000 was spent in Louisiana. In an attempted furtherance of its business and in an effort to aid itself in protecting this advertising investment, plaintiff obtained a service mark, denominated Allstate, upon the principal register of the United States Patent Office, 15 U.S.C. § 1053, for the underwriting of automobile insurance risks.

Defendant, Allstate Investment Corporation was organized by Edwin Jones of Shreveport under the laws of Arkansas on July 12, 1956, and has been authorized to do business in Louisiana since that year. The reason for its incorporation in Arkansas, instead of Louisiana, was that the former State requires an initial capital of $25,000 for a mortgage banking concern, whereas Louisiana requires $100,000. Since its organization, and admission to do business in Louisiana, Allstate Investment Corporation has been actively engaged in the mortgage brokerage business in North Louisiana, principally in the vicinity of Shreveport. Throughout its life, during which it has grown and prospered in its own small way compared to plaintiff’s huge growth, this corporation has featured the word Allstate in its advertisements, signs, and stationery.

Prior to his corporate entry into the mortgage banking field, Jones, the young but astute principal stockholder and organizer of Allstate Investment Corporation, operated a general insurance agency, called the Edwin Jones Insurance Agency. He also had operated, in a relatively small way, in mortgage brokering since he was about 20 years old, during summer vacations from college.

The insurance agency was continued after Jones actively entered the mortgage banking field and was incorporated in 1960. Allstate Investment Corporation and Edwin Jones Insurance Agency, Inc., have offices on the same floor in an attractive new building erected by the Investment Corporation, to which the Insuranee Agency pays a $200 monthly rental, A single sign in front of the building advertises Allstate Investment Corporation and Edwin Jones Insurance Agency, The sign also contains in the same size letters the names of two other tenants in the building, Universal C. I. T. Credit Corp., and Northern Insurance Co. They occupy the lower floor. There is one receptionist for both the Investment Company and the Insurance Agency on the second floor, and it appears that the Insurance Agency and the Investment Corporation have a number of mutual clients. This results from the fact that the institutional investors for whom the Investment Corporation places loans require that the improvements on each tract °£ lan(l upon which mortgage loans are granted be protected by a policy of fire an