Case ID: sd_40/html/0448-01.html
Source: Caselaw Access Project
Author: {"author": "WHITING, P. J. GATES, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NATIONAL CO-OPERATIVE FARM LOAN COMPANY, Plaintiff, v. HIRNING et al., Defendants.
    (167 N. W. 1055.)
    (File No. 4375.
    Opinion filed May 13, 1918.)
    Corporations — Application to Securities Commission to Sell Stock— Purposes of Corporation — Farm Loan Business — Articles of Incorporation, Whether Deceiving to Unwary — Name of Company — Sufficiency of Evidence re Rejection of Application
    In an application for writ of certiorari to bring before Court certain proceedings by way of application by plaintiff to State Securities Commission, under Laws 1915, Ch. 275, for license to sell its corporate stock within this state, held, that said commission was justified, under the evidence submitted, in finding that plaintiff’s proposed plan of business is of such nature that sale of its capital stock would work a fraud upon purchasers thereof, and in refusing plaintiff’s application; that the evidence amply justified the commission’s conclusion that the contents of plaintiff’s articles of incorporation are of a nature fitted to deceive the unwary, and to lead to perpetration of a fraud upon purchasers of its stock in reliance upon some of its provisions.
    Gates, and Polley, J. J., concurring specially.
    Original application in the Supreme Court, by the National Co-Operative Earm Doan (Company, a South Diakoba corporation, to John Hirn-ing, Clarence C. Caldwell, and W. N. Van Camp, as the State Securities Commission, and D. W. Henderson., as Secretary o'f siuob Commission, for a license to sell its corporate stock within this State. The Commission having made an order denying said application, plaintiff ¡brings- -certiorari.
    Affirmed.
    The record1 .discloses, that .the question whether or noit the name olf plaintiff corporation is misleading to the public, as indicative of a “co-operative” -character of business, 'wasi involved. The purposes; of tibe corporation-, as set forth -in- its articles !o)f incorporation-, are: “to- p-roivide money to- 'be loaned 'to farmers, to sell- the shares of its capital- 'stock and1 issue certificates thereof at not less than the par valine, to make, and negotiate, loans to be .secured, -and -secured', by mortgage oto farm lands, -which said loans shall be made to, and- the mortgages-securing the same shall be executed by, persons actively -engaged in an agricultural -enterprise, to- malee llolans from -the assets of the company aisi herein) indicated at .an interest rate not to exceed' five per -cent per annum, -and necessary expenses of making such loans; to act as. loan agent and broker in farm lands and farm mortgages-,” etc.
    
      Amos N. Goodman-, for Plaintiff.
    
      C. C. Caldwell, Attorney General, -and Byron S’. Payne, Assistant Attorney General, for Defendants.
    Plaintiff cited, toi point re the 'corporate name: 9 Cyc. 884.
   WHITING, P. J.

•Gerti-orari proceedings instituted in this clciu-rt against the state 'securities commission-, pu-rsluanit to the provisions of chapter 275, Laws 1915. It i.s) charged that such body erred! lin finding that plaintiff’s proposed!' plan of business is of -s-u'ch a nature that the sate of its Capital stock would work a fraud -upon 'the purchasers thereof, and erred in i-ts order o-f March 14, 1918, refusing plaintiff’s application for permi-t to- sell its capital stock.

The jurisdiction of the 'commission to -act in th-e matter before it is not questioned', but we are called upon to review the correctness- of such oomtoiiissi-on’s determination-. Defendants concede, andl we itherefloire assume, but do hot decidej that such statute -gives us jurisdiction to review the . correctness Gif' the finding and order of the commission. We ■ are of the opinion that there was evidence ample to justify the commission's coo-duding that ¡the contents of plaintiff’s articles -oif incorporation are of a matare fitted: to 'deceive -the unlwiary, and to> lead to the perpetration: o'f a fraud upon thoee wlh© woiuildl purchase its stock in reliiawioe tiipon some of its. iprawsiloins.

The ondler Of the state securities! camimlisslioin: should be, and it is, affirmed.

GATES, J.

(iconicurring (specially). I dta not disagree with the apiniion, if we aire to» consider the merits. I -do, ¡however, question whether (by section 22, c. 275, Laws 1915, it was the legislative intent to enlarge the sidqpie of .the whit of certiorari, as defined in section 760, C. C. P., and therefore whether we ought to 'consider the merits, even under plaintiff s concession.

PO'PPEiY, J., concurs in tilie above.