tive", or any abbreviation or derivation thereof, or any word similar thereto, as part of its corporate or other business name or title; except that any foreign corporation, organized under and complying with the cooperative law of the State of such corporation's creation, shall be entitled to use the term "cooperative" in this State, Provided, That said corporation has complied with the laws of this State applicable to other foreign corporations, insofar as those laws are applicable to said corporation: And provided, further, That said corporation is doing business upon a cooperative basis, as defined in section 185.01. (2) Every association shall use the term "cooperative" as part of its corporate name or affixed thereto.

(3) Every corporation or association in existence at the time of the passage of this act, which is required by this section to change its corporate name, may adopt an amendment to its articles of incorporation to this effect by a vote of a majority of its board of directors, in addition to any other method of making such amendment which may be authorized by law, and the president and secretary of any such corporation or association are hereby empowered and directed to certify the adoption in said manner of any such amendment.

(4) Any person, partnership, corporation, trust, or unincorporated association violating any provision of subsection (1) of this section shall be guilty of a misdemeanor and for each and every such offense shall, upon conviction thereof, be punished by a fine not exceeding $500 or by imprisonment in the county jail not exceeding 6 months, or by both such fine and imprisonment; and any corporation which violates any provision of said subsection shall have its right to do business in this State revoked in a proceeding brought in any circuit court by the attorney general. Whenever any corporation shall commit any offense, for which punishment is provided by this subsection, such offense shall be deemed to be also that of the individual directors, officers or agents of such corporations who shall have authorized, ordered or done any of the acts constituting in whole or in part such offense; and such offense shall be deemed a misdeameanor and, upon conviction thereof, any such director, officer, or agent shall be punished as provided in this subsection. Any person, partnership, corporation, trust, or unincorporated association violating any provision of subsection (1) of this section may, at the instance of the attorney general or any private citizen, be enjoined from further violation thereof or from issuing, selling, offering for sale, negotiating, advertising or distributing its stocks, bonds, notes, or other certificates or evidences of interest or indebtedness.

(5) Any association which shall violate any provision of said sections or of the general corporation law applicable to such association shall have its right to do business in this State revoked in a proceeding brought in any circuit court by the attorney general; and any foreign corporation admitted to business in this State upon the conditions specified in this section, which shall commit a breach of any such condition after its admission to business in this State, shall have its license to do business in this State revoked in a proceeding brought in any circuit court by the attorney general.

(6) The department of markets shall, upon request, assist the attorney general in the enforcement of this section. (1911, ch. 368,

ch. 664, § 57; 1921, ch. 267, ch. 490; 1923, ch. 291, § 3, ch. 433, § 5, ch. 439, § 59; 1927, ch. 534, § 83.)

1A "United Taxpayers Cooperative Association" incorporated under this statute may not actually "charter" any subsidiary corporations, this being a Government function, but may properly form local unincorporated units. Such units, not being organized under this statute, may not use the word "cooperative" in their names. (23 Op. Atty. Gen. (1934) 418.)

This section prevents the registration of "cooperative" as a trademark. No one has an exclusive right to its use. (22 Op. Atty. Gen. (1933) 660.)

The secretary of state may, in his discretion, file articles of incorporation under the name "Wisconsin Cooperative Brewery, Inc.," although there is a corporation already in existence under the name "Wisconsin Brewing Co.," the similarity being not so great as to deceive the public. (22 Op. Atty. Gen. (1933) 471.)

§ 185.23. Income tax return, filing of, when.-Any cooperative association, society, company, corporation, exchange, or union organized under the provisions of sections 185.01 to 185.22, inclusive, shall not be obliged to file a State income-tax return unless such association, society, company, corporation, exchange or union is at the time subject to a State income tax.1 (1921, ch. 559; 1923, ch. 291, § 3.)

'Although the district attorney may act as an attorney for a cooperative, it is improper for him to represent it in an action contesting the legality of the income tax levied against the cooperative. (4 Op. Atty. Gen. (1915) 94.) Where a central cooperative whose stock was held by local consumer cooperatives, farm cooperatives, and other types, purchased and sold supplies for its members, taking title to goods it purchased from producer members and from others, the Board of Tax Appeals held it was not exempt from the Federal income tax under section 231 (12) of the Revenue Act of 1926 and section 103 (12) of the act of 1928. The Board said there was no evidence that the purchases for consumer cooperatives and other nonproducer cooperatives were below the statutory limit of 15 percent of all purchases; and the central cooperative was not acting as a mere agent for producer cooperatives, since it took title to the goods. (Coop. Central Exchange v. Comm. of Int. Rev., 27 B. T. A. 17 (1932).) Note: The 15 percent limit referred to occurs in a clause of the tax statute permitting exemption to farm cooperatives if their purchases for those who are neither members nor producers do not exceed 15 percent of all their purchases; purchases for nonmembers do not exceed those for members; and products marketed for nonmembers do not exceed those for members. A housing cooperative has been held exempt from Federal income taxation in a Federal case which arose under a Wisconsin statute that regulated cooperative housing corporations. Leases were to be made only to stockholders, who were not to hold stock beyond the value of the premises occupied. Dividends on stock were not to be declared until a fund equal to 10 percent of authorized capital had been created, and dividends to a nontenant stockholder, in any year, were not to exceed 5 percent of the par value of stock held by him. Ten percent of the profits were to be set aside annually for retiring the preferred stock. Each share, preferred or common, had one vote. Directors were to receive no compensation until a certain surplus fund had been set aside and preferred stock dividends had been paid, and directors were never to receive more than $500 per annum. Values of the lots, fixed by the directors, were to form the maximum basis for determination of the rental. Almost 2,000 shares of preferred stock were issued, most of them taken by the city and county of Milwaukee, and later most of the preferred stock was retired. Monthly payments by tenants were applied partly to defray expenses, including taxes, depreciation, insurance, and the fixed 5 percent dividend on preferred stock, and partly towards payment of common stock subscribed by tenants. A tenant could purchase his home outright, and have the amounts disbursed to his stock account applied to the purchase price. The Federal Circuit Court of Appeals for the Seventh Circuit held that the corporation was exempt as a “civic organization" under section 231 (8) of the Revenue Act, since it fulfilled the two necessary requirements for such exemption: (a) It was operated exclusively for social welfare and (b) it was not organized for profit. The court said: "It

*

was contemplated that the same opportunity should be extended to all workingmen who might desire it and who could comply with the terms required * One hundred and five homes were constructed for that number of families, and at a minimum cost. That indeed was social service. Taking into consideration substance rather than form, the court said it was clear that the monthly payments were not actually rents, but merely capital contributions; that the dividends on preferred stock were not paid from "profits", but were actually an interest expense. Even if not entirely exempt as a "civic organization", at any rate the corporation received no profit within the meaning of the Revenue Act. (Garden Homes Co. v. Commissioner of Internal Revenue, 64 F. (2d) 593 (C. C. A. 7th, 1933).)

[For further cases on the subject of Federal income tax, see fifth and sixth paragraphs of annotation for California herein, and cross-references there cited.]

In a publication of the secretary of state entitled, "Statutes of Wisconsin Relating to Cooperative Associations" (1935), section 185.23 above was omitted without explanation.

WYOMING

1

The Wyoming cooperative statute 1 (secs. 5119-5134, Wyo. Comp. Stat., 1920) has been repealed (Wyo. Rev. Stat. 1931, Comp. Tables, p. 25).2

The

'In a case decided under this statute, the defendant, together with others, had signed a subscription agreement for shares in a proposed cooperative, the shares to be paid "by cash or note as soon as company is organized.” defendant gave a $200 note now sued on by the indorsee who sold merchandise to the cooperative, as per his agreement to do so when 75 shares had been subscribed. The court held that since the cooperative incurred a large indebtedness to the indorsee in reliance on the stock subscription, and since the defendant had received at least a right to the stock, the latter could not claim lack of consideration for the note, despite the fact that no stock certificate was issued to him; because the note was a written, unconditional promise the "parol evidence rule" forbids the defendant's testimony of verbal assurances made to him that his payment for the note would be in the form of crediting future dividends due from the cooperative; and since such assurances were merely hopeful opinions, though mistaken, of the cooperative's future prosperity they did not constitute fraud. (Bushnell v. Elkins, 34 Wyo. 485, 243 Pac. 304 (1926).)

2

See article 10, section 10 of the Wyoming Constitution which provides: "The legislature shall provide by suitable legislation for the organization of mutual and cooperative associations or corporations."

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