Commissioner of Corp. & Taxation v. Coöperative League of America

246 Mass. 235
CourtMassachusetts Supreme Judicial Court
DecidedSeptember 14, 1923
StatusPublished
Cited by12 cases

This text of 246 Mass. 235 (Commissioner of Corp. & Taxation v. Coöperative League of America) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commissioner of Corp. & Taxation v. Coöperative League of America, 246 Mass. 235 (Mass. 1923).

Opinion

Rugg, C.J.

This is a proceeding in equity to restrain the defendant from continuing its business in this Commonwealth. It is brought under G. L. c. 107, §§ 7 and 8, which are in these words: Section 7. No person shall issue, negotiate or sell any bonds, certificates or obligations of any kind, which are by the terms thereof to be redeemed in numerical order or in any arbitrary order of precedence without reference to the amount previously paid thereon by the holder thereof, whether they are sold on the instalment plan of otherwise, nor shall any person redeem any bonds, certificates or obligations in such order, whether they are sold on the instalment plan or otherwise. Section 8. Violations of the preceding section shall be punished by a fine of not more than two thousand dollars or by imprisonment for not more than one year. Any such violation, if by a domestic corporation, shall operate as a forfeiture of its franchise and, if by a foreign corporation, association or organization, as a discontinuance of its right to do business in the Commonwealth; and the Supreme Judicial or Superior Court, upon the application of the commissioner of corporations and taxation, may enjoin such foreign corporation, association or organization from further continuing its business in the Commonwealth.”

The defendant is alleged in the petition to be a foreign ■association or organization operating under an agreement [238]*238and deed of trust, filed in Alleghany County, Pennsylvania, having its home office in Pittsburg, Pennsylvania . . . .” This averment must be accepted as true upon demurrer.

The word person ” in § 7 is broad enough to include the defendant. It is provided by G. L. c. 4, § 7, cl. 23, that in construing statutes, unless inconsistent with the manifest intent of the Legislature or repugnant to its context, the word person ” shall include corporations, societies, associations and partnerships.” See Opinion of the Justices, 196 Mass. 603, 626. The defendant therefore was as matter of statutory construction capable of offending against the provisions of § 7. In view of these specific descriptive allegations touching the nature of the defendant, it must be assumed in a case presented on demurrer to come within the sweep of § 8 and to be subject to the petition for injunction there authorized. Whether in truth the defendant is simply an unincorporated voluntary association of such nature as to constitute its members copartners, Ashley v. Dowling, 203 Mass. 311; Frost v. Thompson, 219 Mass. 360; Edwards v. Warren Linoline & Gasoline Works, 168 Mass. 564, or an organization of such character as to be rightly subject to our laws as a foreign corporation, Oliver v. Liverpool & London Life & Fire Ins. Co. 100 Mass. 531; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566, or on other grounds' within the scope of § 8, are issues not presented on this record. Those questions might arise upon a full report of relevant facts, from which it might be determined whether that portion of the decision of Attorney General v. Pitcher, 183 Mass. 513, 519, was applicable to the effect that the statute does not authorize suits in equity against individuals. It is enough to say that the allegations of the bill on the record as it is describe a defendant within the scope of §§ 7 and 8, that there has been a general appearance, and that a demurrer has been filed admitting for the purposes of this decision the truth of the allegations. These factors require the overruling of the demurrer on this point.

Authority is conferred upon the plaintiff by the explicit words of § 8 to ask for an injunction against such an organization as the defendant is described to be from continuing its [239]*239business in this Commonwealth after violation of the prohibition of § 7. Whatever may be the limitations at common law as to suits by or against an association or organization in the name adopted as a designation of the group of people constituting the association, Pickett v. Walsh, 192 Mass. 572, 590, there can be no doubt about the power of the Legislature to authorize suits or actions at law against such associations or organizations. United Mine Workers of America v. Coronado Coal Co. 259 U. S. 344, 383-392. Camden, Gloucester & Woodbury Railroad v. Guarantors of Pennsylvania, 30 Vroom, 328.

There is provided in § 8 an additional procedure for enforcement of suspension of the business prohibited by § 7 with respect to a foreign corporation, association or organization to that provided with respect to a domestic corporation, association or organization, in that injunction is allowed against the former but not against the latter from further continuing its prohibited business in this Commonwealth. It is contended that this violates the constitutional rights of the defendant to equal protection of the laws secured by the Constitution of the United States and that of this Commonwealth. The statute seems to us not to be open to successful assault on this ground.' The Legislature is permitted to make a reasonable classification and before a court can interfere with the exercise of its judgment it must be able to say ‘ that there is no fair reason for the law that would not require with equal force its extension to others whom it leaves untouched.’ ” Barrett v. Indiana, 229 U. S. 26, 30. Commonwealth v. Libbey, 216 Mass. 356. Bogni v. Perotti, 224 Mass. 152, 157. Commonwealth v. Titcomb, 229 Mass. 14. Ashley v. Three Justices of the Superior Court, 228 Mass. 63, 78.

Discriminations established by statutory classification must be rational in scope and effect and bear some manifest relation to the main object sought to be accomplished by the statute. The present statute is designed to prevent the doing of the inhibited business by everybody within the limits of the Commonwealth. It seems to us that the Legislature might believe with reason that criminal prosecu[240]*240tian provided for all violators of the law might in practical operation be less effective against nonresident corporations, organizations and associations than against domestic corporations, associations and organizations, and that the declared policy of the Commonwealth as to the former could not be readily enforced without the aid of injunctive relief. As to offending domestic corporations quo warranta would be available, a doubtful remedy against foreign organizations. Criminal prosecution against residents of" the Commonwealth might be thought sufficiently prohibitive of the condemned conduct and not equally efficacious as a remedy against nonresidents who are beyond the immediate grasp of our criminal processes. The constitutionality of G. L. c. 260, § 9, whereby different provisions are made with respect to the limitation of actions against nonresidents from those applicable to residents, never has been doubted although there has been much litigation concerning it. Nichols v. Vaughan, 217 Mass. 548.

This branch of the case at bar appears to stand under the protecting shelter of several decisions of the Supreme Court of the United States concerning statutes indistinguishable in principle from the one here involved.

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Bluebook (online)
246 Mass. 235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commissioner-of-corp-taxation-v-cooperative-league-of-america-mass-1923.