Steinberg-Baum & Co. v. Countryman, STEINBERG-BAUM

CourtUnited States State Supreme Court of Iowa
Writing for the CourtGARFIELD
Citation77 N.W.2d 15,247 Iowa 923
Parties& COMPANY, Appellee, v. Dayton COUNTRYMAN, Attorney General of the State of Iowa; Leo Tapscott, County Attorney of Polk County, Iowa; William W. Gilkey, County Attorney of Delaware County, Iowa; E. Raymond Miek, County Attorney of Marion County, Iowa; Peter B. Narey, County Attorney of Dickinson County, Iowa; Garold F. Heslinga, County Attorney of Mahaska County, Iowa; C. L. Johnston, County Attorney of Appanoose County, Iowa, and Everett G. Scott, County Attorney of Fayette County, Iowa, Appellants.
Docket NumberNo. 48873,STEINBERG-BAUM,48873
Decision Date09 May 1956

Dayton Countryman, Atty. Gen., and Kent Emery, First Asst. Atty. Gen., for appellants.

No appearance for appellee.

GARFIELD, Justice.

This appeal involves the constitutionality of chapter 546A, Code 1954, chapter 239, Acts 55th General Assembly, 1953 I.C.A., requiring a license to sell new merchandise at public auction. The act, omitting parts not here important, provides:

'546A.1 License required. It shall be unlawful for any person, firm or corporation to sell, * * * at public auction * * * any new merchandise, unless such person, firm or corporation * * * shall have first secured a license as herein provided and shall have complied with the regulations hereinafter set forth.

'546A.2 Application. Any person, firm or corporation desiring such license shall, at least ten days prior to such proposed auction sale, file with the board of supervisors of the county wherein it is proposed to hold such auction sale, an application in writing duly verified * * * (stating) the following facts:

'1. The name, residence and post-office address of the person, firm or corporation making the application, and if a firm * * * the name and address of the members * * *.

'2. The name, residence and post-office address of the auctioneer * * *.

'3. A detailed inventory and description of all such new merchandise to be offered for sale * * * which inventory shall set forth the cost to the applicant of the several items * * *.

'546A.3 Bond. At the time of filing said application, * * * the applicant shall file * * * a bond, with sureties to be approved by the board of supervisors, in the penal sum of two times the value of the merchandise proposed to be offered for sale * * * running to the state of Iowa, and * * * any purchaser of any merchandise * * * conditioned on the payment * * * of all taxes that may be payable by, * * * the applicant * * * the payment of any fines that may be assessed by any court against the applicant or auctioneer for violation of * * * this chapter, and the satisfaction of all causes of action commenced within one year from date of such auction sale and arising therefrom, * * *.

'In such bond the applicant and the surety shall appoint the chairman of the board of supervisors of the county in which such bond is filed, the agent of the applicant and the surety for the service of process. * * *

'Such bond shall contain the consent of the applicant and surety that the district court of the county wherein the application and bond is filed shall have jurisdiction of all actions * * * arising out of said sale. * * *

'546A.4 Fee. At the time of filing said application and bond the applicant shall pay * * * a license fee * * * of twentyfive dollars for each day it is proposed to hold such auction * * *.

'546A.5 Issuance of license. Upon the filing of such application and after the applicant has fully complied with all the provisions of this chapter, the board of supervisors, * * * shall issue * * * a license * * *.

'546A.6 Inventory. Within ten days after the last day of said auction the applicant shall file * * * an inventory of all merchandise sold * * * and the price received therefor which * * * shall be verified. The chairman of the board of supervisors shall, immediately * * * forward a copy thereof to the state tax commission.

'546A.8 Exemptions. * * * this chapter shall not extend to the sale at public auction of livestock, farm machinery or farm produce or other items commonly sold at farm sales, or to auction sales by individuals of new merchandise, which was assessed personal property tax or is replacement stock of merchandise * * * assessed personal property tax * * *, and to auction sales under the direction of any court * * * as may be required by law.

'546A.9 Penalties. Any person who shall offer new merchandise for sale at public auction without first securing a license * * * or who shall offer for sale new merchandise different from that shown by, or in excess of the amount and value of, the inventories filed with the application * * * shall be guilty of a misdemeanor and may be punished by a fine not to exceed three hundred dollars or by imprisonment in the county jail not to exceed ninety days.'

Plaintiff, a partnership with its principal place of business in Chicago, brought this action against the state attorney general and several county attorneys, as representatives of all county attorneys in the state, for a declaratory judgment, under 58 I.C.A. Rules of Civil Procedure 261-269, that chapter 546A is unconstitutional and for an injunction against its enforcement. Following a hearing, the trial court declined to issue a temporary injunction against enforcement of the act and on final hearing, on the same evidence, a permanent injunction was likewise refused. However, the court held the law is an unreasonable and arbitrary interference with the conduct of a lawful business and therefore contravenes sections 1, 6 and 9, Article I, Iowa Constitution, I.C.A. Only defendants have appealed.

Since plaintiff has not appealed we have no occasion to consider the correctness of the trial court's failure and refusal to grant some of the relief plaintiff sought. It may not have a more favorable decision here without appealing. Robbins v. Beatty, 246 Iowa 80, 93, 67 N.W.2d 12, 19, and citations.

We regret we are without the benefit of a brief for plaintiff in this court and must find its contentions in the record. Briefly, plaintiff maintains, as the trial court held, chapter 546A is such an unreasonable and arbitrary interference with the conduct of a lawful business as to prohibit, rather than merely to regulate, it. Plaintiff also contends it is an invalid discrimination against, and classification of, plaintiff's business. The trial court apparently did not pass upon this contention.

The only testimony plaintiff offered was of a partner who said it sells at auction mainly household appliances, things for the home and occasionally a little jewelry. The merchandise is principally obtained from manufacturers who have discontinued numbers or closeouts or desire more distribution. In January and February, 1954, plaintiff sold about $12,000 in merchandise in ten Iowa places and had about $5,800 in goods in Iowa when it discontinued its auction sales.

Mr. Steinberg testified he never applied for a license under chapter 546A, he 'just couldn't do it'; it was not readily possible for plaintiff to comply with section 546A.2(3) requiring an inventory of the merchandise to be offered for sale. 'But I feel I should not have to comply. Nobody else has published the cost of their merchandise and I don't feel I should either. * * * to describe what we are going to sell would definitely not be practicable.' He testified his insurance company told him he could get one or two bonds but plaintiff's net worth was not such he could furnish all the bonds section 546A.3 requires; he had no idea how much stenographic work would be needed to furnish an inventory of all merchandise sold as provided by 546A.6. 'It would require at least five stenographers and I don't know that I could.' The witness said guarantees accompany all merchandise sold; their auction sales have been profitable and if not permitted to continue them it will mean a money loss.

There can be little disagreement over the rules of law applicable to this controversy.

All presumptions are in favor of the constitutionality of chapter 546A. We have pointed out repeatedly the General Assembly has power to enact any legislation it sees fit provided it is not clearly and plainly prohibited by some constitutional provision. Within the zone of doubt and fair debate legislation is conclusive upon us. It is plaintiff's burden to negative every concerivable basis which may support this act. It is not our province to pass upon the policy, wisdom, advisability or justice of a statute. See Dickinson v. Porter, 240 Iowa 393, 398-399, 35 N.W.2d 66, 71, appeal dismissed 338 U.S. 843, 70 S.Ct. 88, 94 L.Ed. 515, and citations; Knorr v. Beardsley, 240 Iowa 828, 839-840, 38 N.W.2d 236, 243, and citations.

It is universally recognized that conducting auctions is a legitimate business which cannot be prohibited directly or indirectly. However, the right to sell at auction is not absolute but may be withheld unless reasonable regulations are complied with. The business is affected with a public interest and subject to restriction and regulation to prevent abuses and frauds. Requirements for the licensing of auctioneers and auctions as well as other regulations which are reasonable and not wholly arbitrary have long been upheld. However, restrictions that are prohibitive, oppressive or highly injurious to the business are invalid. It is sufficient to cite in support of these views 7 C.J.S., Auctions and Auctioneers, § 2; 5 Am.Jur., Auctions, sections 3, 4 and 7; Annotations 31 A.L.R. 299, 39 A.L.R. 773, 111 A.L.R. 473.

Perhaps it is best to quote now the constitutional provisions plaintiff invokes. Sections 1 and 6, Article I, Iowa Constitution, are:

'[Rights of persons.] Section 1. All men are, by nature, free and equal, and have certain inalienable rights--among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and pursuing and obtaining safety and happiness. * * *

'[Laws uniform.] Sec. 6. All laws...

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