Lemmons & Co. v. Indiana Cooperative Hauling Ass'n

373 N.E.2d 891, 175 Ind. App. 654, 1978 Ind. App. LEXIS 840

• Court: Indiana Court of Appeals
• Decided: March 15, 1978
• Docket: No. 2-176A29
• Status: Published

Opinion

Staton, P. J. —

The petitioners filed a Complaint with the Public Service Commission of Indiana against the respondents. The complaint alleged that the respondents were operating as motor carriers throughout the State of Indiana and were violating the regulations of the commission. The respondents filed a motion to dismiss, contending that, because of their nonprofit status, they were not subject to regulation by the commission. The commission determined that the respondents were nonprofit corporations, and, therefore, statutorily exempt from regulation. Accordingly, the Commission granted the motion to" dismiss. In their appeal to this Court, the petitioners contend that: (1) the decision of the commission is not supported by sufficient evidence; and (2) the commission’s conduct denied the petitioners equal protection of the law.

We affirm.

I.

Sufficiency of the Evidence

The Motor Carrier Act of 1935¹ was enacted in order to regulate motor carriers operating in the State of Indiana. Certain carriers, however, are exempt from the provisions of the Act and the regulations promulgated thereunder. Among the exempt carriers are motor vehicles owned, leased, operated or controlled by nonprofit cooperative associations in existence prior to July 6,1961. IC 1971, 8-2-7-3(g), Ind.Ann.Stat. § 47-1213(g) (Burns 1965).

The Act vests with the Public Service Commission powers of supervision, investigation, and enforcement. More specifically, IC 1971, 8-2-7-6 provides:

“Upon complaint in writing filed with the commission or upon the commission’s own initiative without complaint, the commission may investigate whether or not any person subject to the provisions of this act has failed to comply with any provisions of this act or with any requirement established pursuant thereto.” (Our emphasis).

Here, the Commission concluded that the respondents were not “subject to the provisions of the act” inasmuch as they were nonprofit cooperatives in existence prior to July 6, 1961. In arriving at that conclusion, the Commission relied primarily on an examination of the respondents’ Articles of Incorporation. Those Articles show that the respondents were incorporated pursuant to the Indiana Not-For-Profit Corporation Act.² The precise issue presented for our consideration is whether the Articles constitute sufficient evidence to support the Commission’s finding that the respondents are, at the present time, nonprofit corporations.³ We conclude that they do.

The Articles of Incorporation are not merely self-serving declarations of the respondents. Only after the secretary of state has determined that an organization is a bona fide nonprofit organization can that organization be incorporated under the Not-For-Profit Corporation Act. IC 1971, 23-7-1.1-63. Thus the Articles show that at the time of their incorporation, the respondents were nonprofit corporations. The secretary of state and attorney general are further obligated to initiate involuntary dissolution proceedings in the event that an organization incorporated pursuant to the Not-For-Profit Corporation Act fails, at any time subsequent to its incorporation, to conduct its business as a nonprofit corporation. IC 1971, 23-7-1.1-63. In light of the duties imposed upon the secretary of state and the attorney general, we hold that unless and until involuntary dissolution proceedings are initiated, the commission can rely on the Articles of Incorporation to determine the nonprofit status of a corporation.

II.

Constitutionality of the Commission’s Actions

The petitioners further contend that the Commission, in dismissing the complaint for lack of jurisdiction without first making its own investigation into the facts upon which jurisdiction was alleged, deprived the petitioners of the equal protection of the law. We find no merit in that contention. The Commission, as noted earlier, has no jurisdiction to proceed against non-profit motor carriers. We also noted that the secretary of state has a statutorily-imposed duty to investigate an organization before he allows that organization to incorporate pursuant to the Not-For-Profit Corporation Act. Additionally, we noted that it is incumbent upon the attorney general to initiate involuntary dissolution proceedings whenever a nonprofit corporation ceases to conduct its business as such. Here, the respondents were incorporated pursuant to the Not-For-Profit Corporation Act. We therefore conclude that the Commission was not required to conduct its own investigation, that it could instead rely upon the results of the secretary of state’s investigation and the failure of the attorney general to initiate involuntary dissolution proceedings, and that the petitioners were not deprived of the equal protection of the law.

The order of the Public Service Commission is affirmed.

Robertson, C.J., (By designation), concurs.

Garrard, J., concurs in result.

Note — Reported at 373 N.E.2d 891.

1 . IC 1971, 8-2-7-1, et seq., Irid.Ann.Stat. § 47-1211, et seq. (Burns 1965).

2 . IC 1971, 23-7-1.1-1, et seq. (Burns Code Ed.).

3 . The petitioners do not dispute the Commission’s finding that the respondents were in existence prior to July 6, 1961.