In Banc. Original mandamus by Jessie M. Carson and others against H. J. Schulderman, as Corporation Commissioner of the State of Oregon. Writ issued.

ty devised; that the trustees should subscribe for all the capital stock of the corporation, and should complete the corporation and convey to it the devised property, This is a proceeding by mandamus to com- taking in payment therefor all the shares of pel defendant as corporation commissioner the capital stock which should be issued to file the articles of a proposed corporation to them jointly in one certificate to be held designated as the "E. Henry Wemme Endow-in trust for the purposes indicated. It was ment Fund." The proposed articles are as

follows:

provided that the corporation should have the right to borrow not to exceed $75,000, and to give a note therefor to be secured upon certain tracts of the property conveyed to it, and that after securing this money it should proceed to purchase a site for a maternity home for wayward girls and to build and equip it, and use the rents, issues, and profits of the bequeathed property in main

the testator's death the trustees should

"Know all men by these presents that we, Jessie M. Carson, H. A. Weis, and J. J. Cole, all of the city of Portland, county of Multnomah, state of Oregon, have associated ourselves for the purpose of forming a corporation under the laws of the state of Oregon, and to that end to make and subscribe, in triplicate, the following articles of incorporation: Article I. The name assumed by this corporation, and by which it shall be known, is 'E. Henry Wemme Endow-taining it and caring and providing a home ment Fund.' Article II. The principal office for the inmates thereof without expense to and place of business of this corporation shall them. It was provided that three years after be in the city of Portland, county of Multnomah, state of Oregon. Article III. The capital stock of this corporation shall be three hundred divide and transfer all the capital stock of and fifty thousand dollars ($350,000), divided in- the corporation in equal parts to the differto three hundred and fifty (350) shares, of the ent Churches of Christ Scientist of Portland, par value of one thousand dollars ($1,000) each. Or., authorized and chartered by the head Article IV. The duration of this corporation shall be perpetual. Article V. 1. The business Church of Christ Scientist, known as the in which this corporation proposes to engage is Mother Church, for their own use and benethat of buying, owing, holding, managing, im-fit, without any charge or trust whatever reproving, mortgaging and leasing the following served to testator's estate. Then follows described real property, to wit: Lots one (1), this clause: four (4), five (5), and eight (8) in block fiftythree (53) in Couch's addition to the city of Portland; and also lots one (1) and four (4), and the south twenty (20) feet of lot five (5), in block nine (9) of Couch's addition to the city of Portland, and the south one hundred and twenty (120) feet of block seventy-two (72) in East Portland, now a part of Portland, and all now being in the city of Portland, Multnomah county, state of Oregon. 2. To buy, own, hold, mortgage, lease, improve, and sell real estate as may be necessary in carrying out the enterprise for the carrying out of which this corporation is formed, and to lease property to third persons, firms, or corporations. 3. To purchase a suitable site for, erect, equip, maintain, and conduct a maternity home or lying-in hospital for the accommodation, care, and keeping of unfortunate and wayward girls, without charge therefor, in the city of Portland, Multnomah county, state of Oregon, which home or hospital shall be known as the White Shield, of Portland, Oregon. 4. To issue the promissory note of the corporation and secure the payment of the same by mortgage or pledge of any or all property belonging to the corporation, and generally to do anything necessary, proper, or convenient in carrying out any of the enterprises hereinbefore mentioned. In witness whereof we have hereunto set our hands and seals this 27th day of September, A. D. 1915."

"I hope, however, this is not directory, but merely a suggestion, that the maternity home constructed as herein before provided shall be continued by said corporation, E. Henry Wemme Endowment Fund, perpetually, and forever, but I do not make this binding upon said Church of Christ Scientist, or upon said E. Henry Wemme Endowment Fund, a corporation, for the reason that I have implicit faith and confidence in the Church of Christ Scientist, and believe that they will be perpetual, and I realize the inability of one now living to determine what in the future might be the greatest need and benefit to suffering humanity, and therefore I have given absolutely and without reservation all of the stock of said corporation of E. Henry Wemme Endowment Fund to said Church of Christ Scientist believing that they will expend the rents, issues, and profits and all the proceeds of the said E. Henry Wemme Endowment Fund in a manner so as to create the greatest relief for the greatest number of suffering humanity."

The plaintiffs tendered to the corporation commissioner the articles set forth in this statement, together with a fee of $5, and demanded that they be filed as the articles of a charitable corporation, and that defendant issue a certificate of incorporation upon said articles. Defendant took the ground This corporation was formed pursuant to the terms of the will of E. Henry Wemme, that the articles indicated the corporation deceased, whereby he bequeathed certain was a business corporation organized for property to the plaintiffs herein in trust for profit, and therefore liable to pay an organithe purpose of erecting and maintaining a zation fee provided for in section 6684, L. O. maternity home for unfortunate, wayward L., amounting to $60, and the estimated ligirls in the city of Portland, to be conduct-cense fee provided by section 6707 for the ed without cost to the objects of testator's remainder of the year ending June 30, bounty. It was provided that the trustees 1916, and refused the articles or to issue cerimmediately after the death of the testator tificate until such additional sums should be should form a corporation with perpetual duration, to be named the "E. Henry Wemme Endowment Fund," with a capital stock not to exceed the reasonable value of the proper

paid. Therefore plaintiffs sued out this writ.

Joseph & Haney, of Portland, for plaintiffs. Geo. M. Brown, Atty. Gen., and J. A. Benjamin, Asst. Atty. Gen., for defendant.

MCBRIDE, J. (after stating the facts as by the Mother Church to claim an interest above). [1] Section 6679, L. O. L., provides: in the bequest. It is not necessary that such "Whenever three or more persons shall desire relation should appear in the articles of into incorporate themselves for the purpose of en- corporation of the Portland churches if that gaging in any lawful enterprise, business, pur- fact is made to appear otherwise. We will suit, or occupation, they may do so in the manner provided in this act." not attempt in this proceeding to determine who shall take under the will, but merely whether the articles of incorporation show that the object of the incorporation is charitable, and not for profit. This is clearly shown, and, while it was entirely proper for the commissioner to require this matter to be determined by judicial proceedings, an order will be made requiring him to file the articles and issue the certificate of incorporation upon payment to him of the $5 tendered.

EAKIN, J., took no part in the consideration of this case.

STATE v. WARE.

(Supreme Court of Oregon. Feb. 8, 1916.) 1. CONSTITUTIONAL LAW 206-PRIVILEGES AND IMMUNITIES-USURY LAW-POWER OF STATE.

Laws 1913, c. 278, regulating the business of loaning money or credit by persons other than national banks, licensed bankers, etc., requiring a license from the state banking board no license shall be granted to any person not a to engage in such business, and providing that bona fide resident of the state of Oregon, or to a corporation, etc., until such corporation, etc., appoints a resident agent to accept service, does not violate Const. U. S. art. 4, § 2, providing that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states, or Const. U. S. Amend. 14, § force any law abridging the privileges or immu1, declaring that no state shall make or ennities of citizens of the United States, as the state in the exercise of its police power and for the protection of small borrowers may regulate the taking of excessive interest and confine the privilege to residents and those subject to its process.

Chapter 5, title 44, L. O. L., provides for the incorporation of religious, literary, art, charitable, and other societies not carried on for the purpose of profit. This chapter makes no provision for such associations is suing shares or having capital stock. We think there is no doubt of the right of the trustees to incorporate under the provisions of section 6684. Under the will they could not incorporate in any other manner, and, if they could not do so under such section, the trust would possibly fail altogether. Building, maintaining, and carrying on an institution of the character mentioned is a "lawful enterprise, a business, or pursuit," irrespective of whether the parties incorporating engage in it for pleasure, profit, or charity. In the present instance the design of the corporation is purely charitable and benevolent. Its scope and articles are such as absolutely inhibit the idea of profit from any source. It is true that the fact that the corporation is one having capital stock is laid down by many authorities as the test whether or not the corporation is one organized for profit, but after all it is only evidence of that fact, and cannot be conclusive in a case where the articles themselves show that the whole capital and income of the property is to be devoted to charitable uses. [2] Whether the Churches of Christ Scientist are qualified to take the reversion of the stock as provided in the will is a question that does not arise here. If there are none in Portland so qualified, the courts will not allow the trust to fail for want of a trustee. [3] It is here stipulated, however, that the different Churches of Christ Scientist of Portland, Or., are religious bodies or associations organized and existing for the purpose of religious and educational work in said city; that the articles of incorporation of said Church of Christ Scientist do not show that said churches are charitable institutions or associations organized for charitable work; that the articles of incorporation of said churches show no legal affiliation with the Church of Christ Scientist incorporated under the laws of the state of Massachusetts and commonly known as the Mother Church of Boston, Mass. We take it that by the reference to the Mother Church of Boston it was not intended that there should be any legal connection between the churches in Portland and the Mother Church, but that there should be such recognition by the Mother Church of the churches designated to take under the will as ED BY SEARCH. In a criminal prosecution for violation of would render it impossible for some seceding the statute making it unlawful to engage in or unorthodox organization not recognized the business of making loans at more than 10

[Ed. Note.-For other cases, see Constitutional Law, Cent. Dig. §§ 625-648; Dec. Dig. 206.]

2. CONSTITUTIONAL LAW 208

LICENSES

7-CLASS LEGISLATION-LOAN BUSINESS. Laws 1913, c. 278, making it unlawful to engage in the business of making loans at more than 10 per cent. without first securing a license from the state banking board, and providing by section 2 that nothing therein should apply to the legitimate business of state and national banks, licensed bankers, trust companies, savings banks, building and loan associations, or real estate brokers, was not unconstitutional as discriminatory class legislation, as the classification need not be scientific or logically appropriate, and, if uniform within the class, and not arbitrary, is within the legislative discretion.

[Ed. Note.-For other cases, see Constitutional Law, Cent. Dig. §§ 649-677; Dec. Dig. 208; Licenses, Cent. Dig. §§ 7-15, 19; Dec. Dig. 7.]

3. CRIMINAL LAW 395-EVIDENCE OBTAIN

per cent. without having first obtained a license from the state banking board, certain papers and correspondence seized by the officers in de

fendant's rooms were admissible.

[Ed. Note. For other cases, see Criminal Law, Cent. Dig. § 877; Dec. Dig. 395.] 4. CRIMINAL LAW 1206-REPEAL AND REENACTMENT OF STATUTE-EFFECT.

Defendant was indicted, tried, convicted, and sentenced for a violation of Laws 1913, c. 278, making it an offense to engage in the business of making loans at more than 10 per cent. without having first obtained a license from the state banking board, and thereafter, and while his appeal was pending, the Legislature passed Laws 1915, c. 219, expressly repealing chapter 278, and re-enacting substantially the same provisions, but increasing the amount of the annual license fee from $50 to $100. Held, that the repeal and re-enactment did not necessitate the dismissal of the indictment and the discharge of the defendant, as every element of the law which he was charged with violating remained the law, and had never at any time since its first enactment, ceased to be the law.

[Ed. Note.-For other cases, see Criminal Law, Cent. Dig. 88 3271-3277, 3279, 3280; Dec. Dig. 1206; Statutes, Cent. Dig. § 349.1 5. STATUTES 121-TITLE-CONSTITUTIONAL

PROVISIONS.

Laws 1913, c. 278, entitled an act "to regulate the business of loaning money or credit by persons, firms and corporations other than national banks, licensed bankers, trust companies," etc., naturally and logically connected the state banking board and the state examiner with the administration of such law, and its provision for the issuance of a license by the state banking board, etc., was therefore germane to its title.

Statutes,
121.]

[Ed. Note.-For other cases, see Cent. Dig. §§ 146, 173, 174; Dec. Dig. Burnett and McBride, JJ., dissenting. In Banc. Appeal from Circuit Court, Multnomah County; Henry E. McGinn, Judge. E. E. Ware was convicted of the statutory offense of engaging in the business of making loans at an interest greater than 10 per cent. without having first obtained a license from

the state banking board, and he appeals.

Affirmed.

The defendant was convicted of violating the provisions of chapter 278 of the Laws of 1913. The charging part of the indictment reads as follows:

G. E. Hamaker, of Portland, for appellant. Martin L. Pipes, of Portland (George A. Pipes, of Portland, on the brief), amicus curiæ. George Mowry, Deputy Dist. Atty., of Portland (Walter H. Evans, Dist. Atty., and John A. Collier, Deputy Dist. Atty., both of Portland, and George M. Brown, Atty. Gen., on the brief), for the State.

BENSON, J. (after stating the facts as above). [1] The assignments of error are numerous; the first, third, seventh, and ninth being chiefly directed to the contention that the act under which the prosecution is maintained is unconstitutional and void. This contention is first raised in the demurrer to the indictment. The statute in controversy contains, inter alia, the following clause:

"No license shall be granted to any such person, firm or voluntary association unless said voluntary association shall be bona fide resiperson and the members of any such firm or dents of the state of Oregon, and no license shall be issued to any joint stock company, incorporated society, or corporation unless and until such company, society or corporation shall, in writing and in due form, to be first approved by and filed with the state banking board, appoint an agent, resident in the state of Oregon, upon whom all judicial and other process of legal notice directed to such company, society or corporation may be served."

The question arises: Does this provision violate the spirit of article 4, § 2, of the Constitution of the United States wherein it is provided that:

"The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states"

-or of Amend. 14, § 1, of the same document, wherein it declares that:

"No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States."

It

for ages, and it has been uniformly held that Usury has been looked upon with disfavor the state may either regulate or absolutely prohibit the taking of usurious interest. follows that no citizen has an inherent or common right to exact the same. This being true, the state has ample power to regulate the taking of excessive interest and confine the privilege to those whose residence within its borders renders them subject to its process. State v. Catholic, 75 Or. 367, 147 Pac. 372; White v. Holman, 44 Or. 180, 74 Pac. 933, 1 Ann. Cas. 843; Sandys v. Williams, 46 Or. 327, 80 Pac. 642. It is a fact of common knowledge that in the larger cities and towns there are men whose business it is to prey upon the necessities of the improvident and the unfortunate by lending money at exorbitant rates of interest with the effect that in The defendant Ware was the only one ar- many instances the borrower becomes the rested and tried. A demurrer to the indict- bond slave of the lender, if, indeed, he posment, for the reason that the facts therein sesses enough character to prevent his desstated do not constitute a crime, was over-peration from driving him into overt acts of ruled, and from the judgment of conviction crime. These lendings and borrowings are the defendant Ware appeals. usually so small in amount that the banking

"The said E. E. Ware, J. J. Wiesen, O. O. Grovier and J. Richards, on the 14th day of July, A. D. 1914, in the county of Multnomah and state of Oregon, then and there being, did then and there unlawfully, knowingly and willfully engage in the business of making loans of money and of personal credit upon which the said defendants did then and there directly and indirectly charge and receive interest, discount and consideration greater than ten per cent. per annum without having first and theretofore obtained and procured license from the state banking board of the state of Oregon authorizing and permitting the said defendants to engage in the said business."

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

institutions make no pretense of engaging | respondence which he claims were seized by in the business, and hence arises the duty of the officers in his rooms, in violation of the the state to protect the unfortunate victim constitutional guaranties against unreasonaof rapacity so far as it is practicable. It ble searches. Whatever may be the rule in requires no argument to establish the truth the federal courts, it has been repeatedly held that this is a proper exercise of the police in state courts that evidence thus obtained power. The state owes a duty in this regard is not thereby rendered inadmissible. State just as clearly as it does to protect the ig- v. McDaniel, 39 Or. 161, 65 Pac. 520; State norant and the unwary from the machination v. Wilkins, 72 Or. 77, 142 Pac. 589; 1 Bishof the confidence man or the extortion of the op's New Cr. Proc. § 211. In 1 Greenleaf on highwayman, and if the lender under such Ev. § 254, the rule is stated thus: circumstances is a nonresident of the state he may work through devious methods to accomplish his purpose and laugh at the statutory efforts of law enforcement. We conclude that the statute under consideration is not subject to the objection suggested.

in both laws, with the exception that in the The requirements as provided are identical But even if some degree of evil which the statute was intended to earlier act, the annual license fee is $50, prevent could be ascribed to loans made by the while in the later one it is increased to $100. exempted institutions, their exception would not The only other changes in the later act are make the law unconstitutional. Legislation may recognize degrees of evil without being arbitrary, directed to additional details as to the conduct unreasonable, or in conflict with the equal pro- of such business after a license has been tection provision of the Fourteenth Amendment procured. Both laws require the application to the Constitution of the United States.' Mutual Loan Co. v. Martell, 222 U. S. 225, 235, 32 Sup. Ct. 74, 75 (56 L. Ed. 175, Ann. Cas. 1913B, 529).

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes