Lorntsen v. Union Fisherman's Co., 71 Or. 540 (OR 7/21/1914)

• Decision Date: 21 July 1914
• Parties: LORNTSEN v. UNION FISHERMAN'S CO.
• Court: Oregon Supreme Court

Page 540

71 Or. 540

143 Pac. 621

LORNTSEN v. UNION FISHERMAN'S CO.

Supreme Court of Oregon.

Submitted on brief June 30, 1914.

Affirmed July 21, 1914.

Constitutional Law—Impairing Obligation of Contracts—Charter of Corporation.

1. Where a corporation was organized while Article XI, Section 2 of the state Constitution, provided that corporations might be formed under general laws, but should not be created by special laws except for municipal purposes, and that all laws passed pursuant to this section might be altered, amended, or repealed, but not so as to impair or destroy any vested corporate rights, and Sections 6679, 6683, L. O. L., authorized the formation of corporations to engage in any lawful enterprise, business or pursuit or occupation, and provided that the articles of the corporation should specify the name assumed by the corporation and the duration of the corporation if limited, act of February 20, 1913 (Laws 1913, p. 106), forbidding the use of the term "cooperative" as the corporate or business name or trademark unless the person, firm, association or corporation has complied with Sections 6766-6783, L. O. L., relating to co-operative associations, so far as it affects a corporation already organized, and using the term "cooperative" as a part of its name, impairs the obligation of a contract in violation of United States Constitution, Article I, Section 10, and Article I, Section 21 of state Constitution.

Corporations—Regulation—Police Power.

2. Act of February 20, 1913 (Laws 1913, p. 106), forbidding the use of the term "co-operative" as a business name unless the user has complied with Sections 6766-6783, L. O. L., is not, as applied to a corporation previously organized and using such term as part of its name, within the police power of the state.

Constitutional Law—"Police Power"—What Constitutes.

3. "Police power" extends to legislation, having for its object the promotion of the health, comfort, safety and welfare of society, but the rights of property cannot be invaded under the guise of protection when such is evidently not the purpose of the regulation.

From Clatsop: JAMES A. EAKIN, Judge.

This is an action by H. M. Lorntsen against the Union Fisherman's Co-operative Packing Company, a corporation. From a judgment in favor of defendant, plaintiff appeals. The facts are stated in the opinion of the court. Submitted on briefs without argument, under the proviso of Supreme Court Rule 18: 56 Or. 622 (117 Pac. xi).

AFFIRMED.

For appellant there was a brief by Mr. J. T. Jeffries.

For respondent there was a brief by Mr. A. W. Norblad.

In Banc.

MR. JUSTICE BURNETT delivered the opinion of the court.

There is no issue of fact in the case at hand. The answer discloses that the defendant was incorporated under the general laws of this state October 13, 1896, with perpetual duration, having its principal office at Astoria, Oregon, and for the purpose, among other things, of pickling and canning salmon on the Columbia River. It has upward of a quarter of a million dollars invested in the enterprise, and has built up an annual business of $750,000, extending all over the civilized world, all under the name of Union Fishermen's Co-operative Packing Company, as designated in its articles of incorporation. It has on hand upwards of $2,000 worth of supplies for use in the conduct of its business, all having its corporate name engraved or printed thereon, and it is generally alleged that the word "co-operative" as part of its corporate name is of great value to the defendant in the business world, and among the persons, firms, and corporations with whom the defendant has been engaged in trade during its existence. All this is admitted by the plaintiff.

At the twenty-seventh regular session of the legislative assembly it passed the act of February 20, 1913 (Laws 1913, p. 106), entitled:

"An act to protect co-operative associations, by preventing the use of the word `co-operative' by any person, firm, association, or corporation, as a part of its associate, corporate or business name, or as a trademark or designation, and providing a penalty for violation of the act."

The first section forbids the use of the term "cooperative" as the corporate or business name or trademark, unless the person, firm, association, or corporation employing that designation has complied with Sections 6766 to 6783, inclusive, of Lord's Oregon Laws, relating to co-operative associations and enacted in 1909. The second section authorizes a suit at the behest of any person, firm, association or corporation to enjoin the use of the word "co-operative" by one who has not complied with Sections 6766-6783, L. O. L.; and further requires the Attorney General or district attorney, at the request of the Secretary of State, to institute and prosecute to final determination all necessary and proper suits or actions to dissolve an offending corporation and wind up its affairs. Acting under this statute of 1913, the plaintiff, describing himself as a citizen and resident of Astoria, Clatsop County, Oregon, after declaring that the defendant is a corporation organized by, pursuant to, and under the laws of Oregon, and is engaged in the business of packing pickling, and freezing salmon, and wholesaling the same, alleges:

"That said defendant corporation has not complied with Sections 6766 to 6783, inclusive, Lord's Oregon Laws, the same regulating co-operative associations, and said defendant corporation is not doing nor actually conducting nor engaged in a co-operative business, but notwithstanding that said defendant has not complied with said laws above quoted, and is not engaged in actually conducting a co-operative business, the said defendant continues to use the word `co-operative' as a part of its corporate and business name."

The answer admits all the complaint, and sets forth the new matter already recited. The averment that the defendant has not complied with the sections relating to co-operative associations states only a conclusion of law, and may be disregarded. Reduced to its lowest terms, the substance of the complaint is that the defendant is not engaged in a co-operative business, but uses the word "co-operative" as a part of its corporate name. The question involved is the validity of the...