Melsha v. Tribune Pub. Co. of Cedar Rapids

• Decision Date: 05 February 1952
• Docket Number: No. 47879,47879
• Citation: 51 N.W.2d 425,243 Iowa 350
• Parties: MELSHA v. TRIBUNE PUB. CO. OF CEDAR RAPIDS.
• Court: Iowa Supreme Court

Page 425

51 N.W.2d 425

243 Iowa 350

MELSHA v. TRIBUNE PUB. CO. OF CEDAR RAPIDS.

No. 47879.

Supreme Court of Iowa.

Feb. 5, 1952.

Crissman & Bleakley, John C. Eichorn, Cedar Rapids, for appellant.

John D. Randall, Richard F. Nazette, Cedar Rapids, for appellee.

HAYS, Justice.

This is an equitable action praying for a declaratory judgment. Plaintiff seeks an adjudication as to his status as a minority stockholder in defendant Corporation, under Section 491.25, Code 1946, I.C.A. A motion to dismiss the petition was sustained and plaintiff appeals.

The petition, so far as material, alleges in substance that in June 1928 defendant's corporate charter was issued, to continue for twenty years with renewal privileges. On June 8, 1948 there were issued and outstanding, 625 shares of stock, of which the plaintiff owned 135 shares. On said date, the stockholders by a vote of 470 to 135 voted to renew the charter. That the 135 shares voting 'no' were owned by plaintiff. On June 19, 1948, it was voted to rescind the action taken on June 8, 1948, and to amend the Articles by changing the provisions limiting the period of incorporation to twenty years with renewal rights, to a provision providing for perpetual existence. Thereafter the Articles were duly filed and recorded. Plaintiff prayed that the action taken June 19, 1948, be deemed a renewal within the purview of Section 491.25, Code 1946, I.C.A.; that the status of the plaintiff be decreed to be that of a stockholder voting against a renewal within the terms of said Statute.

To this petition the defendant filed a motion to dismiss, in substance as follows: That said petition on its face shows that the plaintiff has no right to bring or maintain the action and the court does not have jurisdiction of the defendant or the subject matter of the suit and in truth and in fact the said petition affirmatively shows the articles were not renewed but were amended to give the Corporation perpetual existence.

Thereafter on August 25, 1950, the trial court sustained the motion to dismiss, generally, and dismissed plaintiff's petition. Plaintiff did not plead further and the judgment became final under Rule 86, R.C.P.

Appellant assigns as error, each of the grounds set forth in the motion to dismiss. This was necessary in view of the fact that the trial court sustained the motion generally instead of ruling on each ground thereof, separately.

Section 491.25, Code 1946, I.C.A., so far as material, provides: 'Corporations existing for a period of years may be renewed from time to time for the same or shorter periods, or may be renewed to exist perpetually, if a majority of the votes cast at any regular election, or special election called for that purpose, at any time during the corporate life or within three months after the termination thereof, be in favor of such renewal, and if those voting for such renewal will purchase at its real value the stock voted against such renewal.' (Italics added).

A proceeding for a declaratory judgment is statutory and of rather recent origin in this State. Rules 261 to 269, R.C.P., incl., govern and control such proceedings. It is a special action under Section 611.2, Code 1946, I.C.A., and being remedial should be given a reasonably liberal construction. State v. Central States Electric Co., 238 Iowa 801, 28 N.W.2d 457; Katz Inv. Co. v. Lynch, Iowa, 47 N.W.2d 800.

Rule 261 states in substance: Courts shall declare rights, status, and other legal relations whether or not further relief is or could be claimed. The declaration may either be affirmative or negative and shall have the force of a final decree.

Rule 262 states that any person whose rights, status or other legal relations are affected by a statute, may have determined any question of the construction or validity thereof or arising thereunder, and obtain a declaration of rights, status or legal relations thereunder.

The general purpose of a declaratory judgment is to provide a speedy remedy for adjudication of legal rights before there has been an invasion thereof, but generally this action is only maintainable where it will accomplish some useful purpose. 1 C.J.S., Actions, § 18 d(5). It is also a basic requirement that there be involved an actual, real or justiciable controversy concerning a right. 1 C.J.S., Actions, § 18 d(6); State v. Central States Elec. Co., 238 Iowa 801, 28 N.W.2d 457; City of Flint v. Consumers Power Co., 290 Mich. 305, 287 N.W. 475; Redick v. Peony Park, 151 Neb. 442, 37 N.W.2d 801; Ohio Casualty Ins. Co. v. Marr, 305 U.S. 652, 59 S.Ct. 245, 83 L.Ed. 422. It should appear from the facts alleged that petitioner has present rights against the persons whom he makes parties to the proceedings with respect to which he may be entitled to some consequential relief, either immediate or prospective. 1 C.J.S., Actions, § 18 d(11); Continental Mut. Ins. Co. v. Cochrane, 89 Colo. 462, 4 P.2d 308; Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826.

I. Appellant asserts as error the statement in the motion to dismiss, that plaintiff has no right to bring or maintain this action. The motion having been sustained generally, the specific ground of the motion upon which the ruling was based is not known. It may have been all, or any one thereof.

The prayer of the petition must be examined in determining what constitutes the subject matter of litigation for judicial purposes. Federal Land Bank of Omaha v. Jefferson, 229 Iowa 1054, 295 N.W. 855, 132 A.L.R. 1282. This shows the relief asked is whether the action of the appellee, and its majority stockholders, was within the purview of Section 491.25, Code 1946, I.C.A., and that, the rights of the appellant were those of a stockholder voting against a renewal of the Articles. In his reply brief and argument, appellant states: 'At no time has the Appellant questioned the right and power of the...