CORRUPT PRACTICES ACT, FOREIGN CORPORATION ADMITTED IN WASHINGTON

CORRUPT PRACTICES ACT, FOREIGN CORPORATION ADMITTED IN WASHINGTON.

 1. An out of state corporation, qualified to do business and doing business in the State of Washington, may hire and pay a public relations man to devote his full time and effort to the work of a committee sponsoring an initiative.

 2. Such corporation may insert into packages of its products to be sold in the state, messages to users urging them to vote in favor of an initiative; it may add an appendage to their regular newspaper and radio advertising urging the public to vote for an initiative and may also print and send into the state for distribution to retail stores posters urging the public to vote for an initiative.

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                                                                   April 28, 1952

Honorable Earl Coe
Secretary of State
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 290

 Dear Sir:

             The receipt of your request for an opinion of this office dated April 9, 1952, is acknowledged and our conclusions to the questions stated therein are:

             1. An out of state corporation, qualified to do business, and doing business, in the State of Washington, may hire and pay a public relations man to devote his full time and effort to the work of a committee sponsoring an initiative.

             2. Such corporation may insert into the packages of its products, to be sold in the state, a message to the users thereof urging them to vote in favor of an initiative.

             3. Such corporation may add an appendage to its regular newspaper and radio advertising urging the public to vote for an initiative.

              [[Orig. Op. Page 2]]

            4. Such corporation may print and send into the state for distribution to retail stores posters urging the public to vote for an initiative.

                                                                      ANALYSIS

             We assume that you are referring to an actual corporation which anticipates doing the acts you set forth in your questions and that said corporation's principal office is outside of the state or the majority of its stockholders reside elsewhere but that said corporation has complied with all the requirements of chapter 23.52 RCW and has been issued the appropriate authority by your office to do business in this state.

             The Corrupt Practices Act, chapter 29.79 RCW manifestly was designed primarily to protect the public from the ancient abuses of the elective franchise resulting in deceiving and deluding the voters or otherwise acting fraudulently and by corrupt means foisting upon the public undesirable legislation.  That such practices have always existed and are to be guarded against is recognized by our Supreme Court inEdwards v. Hutchinson, 178 Wash. 580, 35 P. (2d) 90.  Said act, therefore, must be interpreted in that light and to further its intentions.

             The portion of paramount interest to you in your inquiry, namely in relation to the hiring of a public relations man by a corporation, is contained in § (6) of RCW 29.79.490.  Eliminating other parts thereof, said act is quoted as follows:

             "Every person shall be guilty of a gross misdemeanor who:  * * *

             "(6) Receives, handles, distributes, pays out or gives away, directly or indirectly, money or any other thing of value contributed by or received from any person, firm, association, or corporation whose residence or principal office is, or the majority of whose members or stockholders have their residence outside, the state of Washington, for any service rendered for the purpose of aiding in procuring signatures upon any initiative or referendum petition or for the purpose of aiding in the adoption or rejection of any initiative or referendum measure."

             There is no doubt that any persons or firms who are not residents of the state and consequently have the loyalty and interest at their own domicile as opposed to the welfare and regard for the State of Washington, which residents thereof  [[Orig. Op. Page 3]] presumably have, may not be the employers of public relations persons and pay them for any services rendered for the purpose of aiding and procuring signatures or adoption or rejection of an initiative or referendum measure.

             As to corporations, however, they being entirely artificial entities having no such established residence, the quoted section of the law is not so clear and the case of Edwards v. Hutchinson, supra, is of no assistance.

             The text writer in 13 Am.Jur. Corporations, §§ 147 and 148, has stated the law as follows:

             "Residence is an attribute of a natural person, and can be predicated of an artificial being only by a more or less imperfect analogy.  Strictly speaking, a corporation can have no local residence or habitation.  It has been said that a corporation is a mere ideal existence, subsisting only in contemplation of law‑-an invisible being which can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place.  However, the sovereignty creating the corporation may give to it a local habitation or residence in law, if not in fact.

             "Whether a corporation is to be considered a resident of a particular place, by virtue of doing business there, depends entirely upon the connection in which the question arises.  Where the problem is one of statutory construction, it must be solved in the light of the purpose of the act.  * * *

             "A corporation formed in one state may be, for certain purposes, domesticated or a resident in another state in which it has its offices and transacts business, notwithstanding the fiction of the law that a corporation dwells only in the state of its creation and cannot migrate therefrom."

            See also RCW 23.52.030 which states in part:

              [[Orig. Op. Page 4]]

            "By qualifying under the provisions of this chapter, any corporation incorporated under the laws of any state or territory in the United States, or of any foreign country * * * may * * * generally do and perform every act and transact every kind of business within this state in the same manner and to the same extent as corporations incorporated and organized under the laws of this state are authorized to do under the laws of this state.  * * *"

             Accordingly, it must follow that the determination to be made in the above quoted section of the law is based upon whether or not the corporation involved has acquired the status and rights of local corporations by filing its articles and otherwise qualifying under the law.  This having been done, said corporation is as much a domestic corporation for purposes of said act as any other would be notwithstanding the fact that the majority of its stockholders may live elsewhere or its principal office may be established in another jurisdiction.

             We conclude, therefore, that when a corporation has been permitted by appropriate action to acquire the necessary status to do business in the state and does business herein, the disability to retain a public relations person for compensation or otherwise, to express the corporation's views as to an initiative and assist a committee which sponsors an initiative or referendum, is removed.  The result is that the public relations person may accept compensation to promote the corporation's views on the proposal, but may not do anything which any other person cannot do without violating said provisions.

             Also, we find no objection to such corporation inserting messages in its package products urging its customers to vote in favor of the initiative or to urge the voters to do so by advertising or circularizing posters to this effect.

 Very truly yours,
SMITH TROY
Attorney General

PHILIP W. RICHARDSON
Assistant Attorney General