State Ex Rel. Cairy v. Iowa Co-Operative Ass'n

95 N.W.2d 441, 250 Iowa 839, 1959 Iowa Sup. LEXIS 490
CourtSupreme Court of Iowa
DecidedMarch 10, 1959
Docket49313
StatusPublished
Cited by8 cases

This text of 95 N.W.2d 441 (State Ex Rel. Cairy v. Iowa Co-Operative Ass'n) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Cairy v. Iowa Co-Operative Ass'n, 95 N.W.2d 441, 250 Iowa 839, 1959 Iowa Sup. LEXIS 490 (iowa 1959).

Opinion

Larson, J.

This is the second appeal in a quo warranto suit, brought in the name of the State on the relation of individual citizens, for the immediate dissolution of defendant, Iowa Co-Operative Association, operating under the trade name of “Diamond Laboratories”, on the ground that its organization and operations under chapter 499, Code of Iowa, 1950, 1954, were invalid. See State ex rel. Cairy v. Iowa Co-Op. Assn., 248 Iowa 167, 79 N.W.2d 775. In the first appeal we reversed and remanded the matter when the trial court sustained the defendant’s special appearance and dismissed the suit. We held therein that the court had jurisdiction of quo Avarranto actions generally and that section 499.53 of the Code did not deprive the district *841 court of jurisdiction of the general subject matter. We indicated the proper procedure to assail the standing or right of the citizen to maintain the suit as relators was a motion to dismiss after general appearance. This has been done in the suit now before us, and the basic question presented is .whether this suit must be dismissed for want of merit, when it appears under section 499.53 that the right of such an association to exist or continue under the chapter may -be inquired into by the attorney general, but not otherwise.

Relators concede that, unless we determine that Code section 499.53 is invalid under the Constitution of Iowa or of the United States, they cannot maintain this suit.

Code section 499.53 provides: “The right of an association to exist or continue under this chapter may be inquired into by the attorney general, but not otherwise. If from its annual report or otherwise, the secretary of state is informed that it is not functioning as a co-operative, he shall so notify the attorney general, who, if he finds' reasonable cause so to believe, shall bring action to oust it and wind up its affairs.”

As in the prior ease relators allege they are citizens and are “graduate licensed veterinarians and are associated with business enterprises which sell serums, virus, vaccines, biologicals, pharmaceuticals and other drugs and supplies to licensed veterinarians and confine their sales of such products to members of the veterinary medical profession”,' which are in direct competition with defendant, and that the Attorney General of Iowa and the county attorney had been requested to bring such suit, but neither had done so. The district court by ex parte order had granted an application by relators for leave to institute the suit, conditioned upon the filing of an approved bond for costs, which was done.

Following our procedendo of January 11, 19157, to the district court, defendant entered its appearance and moved the court to dismiss plaintiff’s petition for, among other reasons, “The relators have no- right to bring this suit”, it being the exclusive obligation of the attorney general to bring before the court any proper action nr inquiry into its right to exist or continue as an association under chapter 499 of the Code.

*842 The trial court overruled all defendant’s motions. Permission to appeal from the interlocutory ruling was granted defendant, and it appealed.

Appellant argues (1) that unless section 499.53 is shown to be unconstitutional relators cannot maintain this action and (2) that unless relators disclose involved personal rights or interests they cannot question the constitutionality of the section. These, then, are the vital issues.

Relators contend that section 499.53 violates (1) the provisions of section 6, Article I, Constitution of Iowa, in that its provisions do “not have uniform operation”; (2) section 9 of Article I, Constitution of Iowa, in that the extension of immunity from judicial inquiry violates the rights of other persons and corporations to whom such immunity has not been extended; (3) section 12, Article VIII, Constitution of Iowa, in that it grants an exclusive privilege to> a corporation operated for pecuniary profit not available to other corporations; and (4) that it violates the due process clause of section 1 of the Fourteenth Amendment to the Constitution of the United States in that it abridges the privileges or immunities of citizens of the United States and denies to' persons within the jurisdiction of the State of Iowa the equal protection of the laws of the State.

Rule 300, R. C. P., provides: “(a) The county attorney of the county where the action lies may bring it in his discretion, and must do so when directed by the governor, general assembly or the supreme or district court, unless he may be a defendant, in which event the attorney general may, and shall when so directed, bring the action, (b) If on demand of any citizen of the state, the county attorney fails to bring the action, the attorney general may do so, or such citizen may apply to the court where the action lies for leave to bring it. On leave so granted, and after filing bond for costs in an amount fixed by the court, with sureties approved by the clerk, the citizen may bring the action and prosecute it to completion.”

It is relators’ contention that under rules 299 to’ 305, R. C. P., individuals have been extended the right to bring in the name of the State quo warranto suits challenging the corporate existence or operation of alleged corporations, and to chai *843 lenge a corporation exercising powers not conferred by law, but-that by section 499.53 they are restricted from so challenging co-operatives under chapter 499, and that such restriction is arbitrary, unjust and unlawful. They contend section 499.53 should be struck down as unconstitutional and that they should be permitted to maintain this suit in behalf of the State under the general quo- warranto provisions. R. C. P. 300. We do- not agree.

I. It is, of course, relators’ burden to negative every conceivable basis which may support this statute. All presumptions are in favor of the constitutionality of the statute and it will not be held invalid unless it is clear, plain and palpable that such a decision is required. Dickinson v. Porter, 240 Iowa 393, 398, 399, 35 N.W.2d 66, and authorities cited therein; Iowa Motor Vehicle Assn. v. Board of Railroad Comrs., 207 Iowa 461, 468, 221 N.W. 364, 75 A. L. R. 1; McGuire v. Chicago, B. & Q. R. Co., 131 Iowa 340, 349, 108 N.W. 902, 33 L. R. A., N. S., 706, and citations; 11 Am. Jur., Constitutional Law, section 138.

The General Assembly has power to enact any kind of legislation affecting the creation and operation of corporations, co-operatives and associations as it sees fit, including how and by whom -the corporate existence- and operation may be- challenged, provided it is not clearly -and plainly prohibited by some provision of the -State or Federal Constitution. Carlton v. Grimes, 237 Iowa 912, 943, 23 N.W.2d 883, 899, and citations; Wallace v. Pierce-Wallace Pub. Co., 101 Iowa 313, 70 N.W. 216, 38 L. R. A. 122, 63 Am. St. Rep. 389; Union Savings & Investment Co. v. District Court, 44 Utah 397, 140 P. 221, Ann. Cas. 1917A 821; 16 C. J. S., Constitutional Law, section 70.

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Bluebook (online)
95 N.W.2d 441, 250 Iowa 839, 1959 Iowa Sup. LEXIS 490, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-cairy-v-iowa-co-operative-assn-iowa-1959.