102 P.2d 970 | Kan. | 1940
The opinion of the court was delivered by
This is an original proceeding in mandamus brought to compel the secretary of state to file a certificate of amendment of plaintiff’s charter as a corporation and to issue a certified copy thereof to be recorded in the office of the register of deeds.
The motion for the writ alleges that plaintiff is a corporation duly organized under the laws of Kansas with its principal place of business at Wichita, and that defendant is the secretary of state of the state of Kansas; that plaintiff is authorized to and is engaged in the manufacture, sale and distribution of wheat products; that in 1939 the legislature of Kansas passed a new general corporation code, reference being made to certain sections hereafter mentioned; that the congress of the United States passed a new food, drug and cosmetic act which provides that a food shall be deemed to be misbranded if in package form unless it bears a label containing the name and place of business of the manufacturer (U. S. C. A. Tit. 21, § 343 [e]), and it is alleged that under regulations promulgated
“That this corporation shall have the power to conduct the affairs and business of the corporation under the trade names of:
Marion Milling Company, Wichita, Kan.;
Marion Milling Company, Marion, Ohio;
St. Johns Mills, St. John, Kan.;
The Lassen-Jackman Milling Company, Wichita, Kan.;
Southern Milling Company, Wichita, Kan.; and Cereal Research Laboratories,
and all such other trade names as the board of directors may, from time to time, determine.”
And thereafter on December 11, 1939, the amendment was duly certified as required by statute and tendered to the secretary of state, together with a copy to be certified by him for filing with the register of deeds of Sedgwick county, with the requisite statutory fees; that the secretary of state refused to file the certificate of amendment, for the asserted reason the general corporation code did not contemplate such an amendment, and that the trade names set out in the amendment do not appear to be trade names. After making allegation that it had no adequate, plain and complete remedy at law, that it was entitled as a matter of right to have the certificate of amendment filed by the secretary of state, etc., and that it would suffer irreparable damage if it did not obtain relief, it prayed for a writ of mandamus to compel the secretary of state to file the certificate of amendment and to furnish it with a cer
Plaintiff filed its motion for judgment on the pleadings on the ground the answer does not state a defense to the alternative writ, and the cause is submitted to us on the motion.
Before discussing the contention of the parties, it may be noted there is no dispute concerning the manner and form followed by the corporation in adopting the question amendment, nor in tendering it to the secretary of state for filing. It may also be noted that the questions in issue arise under the general corporation code enacted as Laws 1939, chapter 152, and appearing as G. S. 1939 Supp., ch. 17, arts. 24 to 45, inch, and that references hereafter made are to the sections as numbered in the session laws.
Plaintiff contends that under the general corporation code, the secretary of state is purely a ministerial officer in filing the articles of incorporation or any amendment thereto, and that he has no discretion in determining whether a proposed amendment is within the contemplation of the act. In that connection, plaintiff calls attention to the fact that under the former corporation act (G. S. 1935, 17-216) an amendment to the charter had to be approved by the charter board before it could be filed, while under section 13 of the
“The secretary of state or other officer charged with the duty should accept and file an amendment which complies with the statutoiy requirements. But no duty rests upon a secretary of state to file a certificate of amendment to the articles of a corporation where such amendment violates a statute of the state. The officer's duty in .the matter is controlled by the statutes of the state and not by his discretion. At least the discretion to be exercised by the secretary of state does not extend to the merits of an application for incorporation, although it may be exercised as to matters of form.
“In conformity with the rules governing mandamus, that remedy is available to compel the officer to perform his clear legal duty to file the amended articles or certificate of incorporation. It is otherwise where the amendment is not in the proper form and is unauthorized. In such case the writ will be denied. If an order of injunction is issued preventing amendments, a petition for mandamus to a public officer requiring him to issue certificates of amendments cannot be granted.”
As is indicated in the above, the statement that the duty of the secretary of state is purely ministerial' is subject to considerable qualification.
In Martin, Governor, v. Ingham, 38 Kan. 641, 17 Pac. 162, this court had before it the question of the duty of the governor under statutes relating to the organization of new counties, and it was held that some of his duties were' partially ministerial and partially not. In discussing the power of the court to compel compliance, it was said:
“The only acts of public functionaries which the courts ever attempt to control by either injunction or mandamus, are such acts only as are in their nature strictly ministerial; and a ministerial act is one which a public officer or agent is required to perform upon a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, and without regard to his own judgment or opinion concerning the propriety or impropriety of the act to be performed.” (p. 651.)
And so we approach the question of the nature of the duties imposed on the secretary of state with respect to receiving and filing the certificate of amendment.
Under the general corporation code, three or more natural per
It may be conceded there is no specific provision of the general corporation code that requires either the original articles of incorporation or any amendment thereto be approved by the secretary of state before being filed. We see no fundamental difference with respect to the duty of the secretary of state whether the filing, etc., involves the original articles of incorporation or an amendment. Certainly, where either is tendered to the secretary of state for filing, he has a duty to see that the articles of incorporation contain the information required by section 11 of the act, i. e., the corporate name, location of registered office, name of resident agent, the nature of the business, etc., or, if an amendment of those particular things, that the effect is not to eliminate any. To determine whether there has been compliance in the above particulars, or that the articles of incorporation have been duly executed, may be said to be matters of form. But we do not believe his duties end there. There are certain matters of substance to be considered. The articles of incorporation or of any amendment pertaining thereto must show that the purpose of the corporation is to engage in a business in which natural persons might lawfully engage. If it were affirmatively shown by the articles or any amendment that the contrary was true, we do not believe the secretary of state lacks power to refuse to file. Under section 24 of the corporation code there are restrictions on the corporation purchasing its own stock;
Plaintiff’s contention is that it has been using the suggested names in connection with its business in certain localities and that by reason thereof the names have legally recognized identity; that natural persons may lawfully transact business under trade names (Lumber Co. v. Collinson, 97 Kan. 791, syl. ¶ 3, 156 Pac. 724) and the corporation may lawfully do likewise, and therefore it has the right to amend its articles of incorporation to so state. As a specific reason, it pleads the federal food, drug and cosmetic act, referred to above, and contends that if its trade names have legally recognized identity and there is legal recognition of its right to do business under those trade names, then its use of them may be continued with consequent nonviolation of the federal act. However persuasive the last contention argued may be, it is not controlling in determining whether or not it is entitled to the relief it seeks. That depends on the state law.
It is apparent that plaintiff is not seeking to use the names to identify certain containers in which its products are marketed, for if that were the case it could obtain ample protection by comply
We note the contention of the defendant that the names are not trade names. A discussion of whether the names have the attributes of trade-marks, trade slogans, trade-mark names or trade names would lead into a field in which there is great confusion, and any conclusion reached would hardly be decisive of the question before us. Discussions may be found in Hopkins on Trade-marks, etc., 4th ed., page 10, § 4; Nims on Unfair Competition & Trade-marks, 3d ed., 124, ch. 5; 26 R. C. L. 828; 63 C. J. 308-322. For our purposes' we shall consider the names as being those properly applicable to business concerns doing a milling business at the locations mentioned for such length of time they were generally known and recognized, and trade names in that sense.
Without attempting a complete discussion, it may be said that in the field of corporation law generally there has been diversity of views concerning the right of a corporation to use an assumed or trade name in lieu of its legal name and its rights and liabilities where such a name has been used, as is indicated in 6 Fletcher’s Cyclopedia Corporations (Perm, ed.), page 87 et seq., § 2442, where it is said:
“A corporation, when it comes into existence, acquires a legal name by which it is known and identified, and by which in general it contracts and acts. Strictly speaking, this name is the only legal name which it can have, unless, of course, such name is subsequently changed by the state or under authority from the state. It seems quite well established, however, that in the absence of statutory prohibition a corporation may have and be known to the public by more than one name, and that, in addition to the name given it by its charter, it may acquire other names by user or reputation. Of course, it cannot by usage or prescription acquire a legal name other than that conferred upon it by law, and ‘a corporation cannot, except as authorized by law, change its own name, either directly or by user.’ It cannot be said that a corporation has a right, not only to the actual name given to it by its articles of incorporation, but also to a translation of such name into a foreign language.
“This legal name and title which the law confers upon a corporation is the one which it should use. It may not, without authority of law, expi’ess or implied, use any other name, particularly where the statute directly prohibits corporations from transacting any business under any other or different name than that conferred upon them by their articles of incoi’poration. But, however desirable it may be that a corporation act and contract in its true legal name, this is not always done. In written instruments, pleadings, process, etc., misdescriptions veiy often creep into the corporate name with what effect will be seen later, and a corporation may contract, acquire rights or incur obliga*144 tions in a fictitious or trade name. Like an individual, a corporation may assume a name other than its legal name and carry on business in such assumed name, but in order to apply this doctrine, incorporation by some name must be established. If a note or deed is executed by a corporation under an assumed name, it is just as much bound as if it had used its proper name, and the same is true of any other contract. A contract entered into by or with a corporation under an assumed name may be enforced by either of the parties if the identity of the corporation is established by the proof.
“By statute, in some states, a corporation doing business in a name other than its legal corporate name is required to record such other name. There are also provisions relating to the carrying on of business by 'any person’ or 'persons’ under assumed names without first complying with certain regulations. These provisions may not be applicable to corporations, or may expressly except corporations from their requirements.”
And a discussion of the subject will also be found in 14 C. J. 307 et seq., 18 C. J. S. 560 et seq., 7 R. C. L. 126 et seq., and 13 Am. Jur. 268 et seq. And see the annotation in 56 A. L. R., 450.
We are of the opinion that whether the plaintiff is entitled to the relief it seeks is to be determined from our general corporation code, and the general policy of it as declared by or inferred from its provisions. The general corporation code has no provision expressly prohibiting the use of trade names, and whether a corporation may do so is to be determined from the code generally.
The plaintiff corporation is a private corporation organized for profit, and having an issue of capital stock. It was organized prior to the enactment of the general corporation code now in effect, but under section 149 any change that may be made in its corporate status is governed by the present code. In reviewing the provisions of the code, we shall ignore exceptions therein contained not applicable to the plaintiff corporation. It is required by section 11 of the act that the corporate name of every corporation shall be followed by the word “Incorporated” or the abbreviation “Inc.,” and that the corporate name of any corporation previously organized may be changed to conform to the provisions of the act, and under section 18 A it is provided that the articles of incorporation shall set forth the name of the corporation. Provision is made for the amendment of the articles of incorporation, and by section 126 the corporation may change its corporate title. It is clear that as to all corporations organized after the passage of the code, and as to all that change their names, the intent of the legislature was that the inclusion of the word “Incorporated” or the abbreviation “Inc.” in the title was in order that persons dealing with them would know
It is noted also that in the code all reference to the corporate name or title is in the singular, and at no place is there any provision that a corporation may have two corporate names or titles. It is true that generally individuals may use assumed or trade names, and that two or more persons may associate themselves together to conduct a business under such names, but it does not follow that three or more persons may associate to establish a corporation for the transaction of any business for which natural persons may associate and have the right to use assumed or trade names, for the reason that the right to incorporate is regulated and limited by the provisions of the general corporation code. In the case of the individual or partnership, there is generally unlimited liability for debt, but as to the stockholders of the corporation that is not true. The individual may change the name or title under which he does business as often as he chooses, so long as fraud, deceit, etc., are not involved. (See Lumber Co. v. Collinson, supra.) Obviously, a corporation cannot do that, or if it can, the provisions of the code for amending its name and title are meaningless. If it be said that the corporation may have the right to use trade names without change of its corporate title, and that such names may be included
To sum up-, we are of the opinion that the general corporation code not having in it any permission for it so to do, a corporation may not, either in its articles of incorporation or by amendment thereto, obtain the right to conduct its business under a trade name or series of trade names in addition to its corporate name and title.
The writ of mandamus is denied.
