164 Iowa 197 | Iowa | 1914
The Farmers’ Mutual Co-operative Company is a corporation engaged in buying and selling grain, cattle, hogs, and other farm produce, with its principal place of business at Hospers. The plaintiff is a farmer living near that town and owner of four shares of the company’s capital stock. It declared a dividend June 1, 1912, but refused to pay plaintiff the part to which his shares entitled him, amounting to $45.25. So alleging, the plaintiff prayed for judgment. The answer admitted all this and alleged that article 14 of its by-laws read:
It further alleged that plaintiff had sold 400 bushels of oats and 13,000 pounds of pork in June, 1912, to competitors of defendant in business at Hospers, and that he, as a member of the defendant corporation, became obligated to it in the sum of $10.50 wherefore but $34.75 was owing plaintiff. To the affirmative portion of the answer the plaintiff demurred on the grounds: (1) That the corporation was without power to adopt the by-laws; (2) that it was illegal; (3) tended to stifle competition; (4) was in restraint of trade; and (5) contrary to public policy. The demurrer was overruled, and, as plaintiff elected to stand on the ruling, judgment was entered accordingly and the cause duly certified to this court. The by-law was clearly in restraint of competition and therefore illegal. Reeves v. Decorah Farmers’ Co-Operative Society, 160 Iowa, 194, decided since the ruling complained of.
Notwithstanding the interesting brief of counsel for appellee, we are inclined to adhere to that decision. The record does not bear counsel out in saying that plaintiff had shared the profits derived from the penalties assessed under by-law 14 or that any of these are included in the dividends in controversy. On the contrary, the answer admitted liability for the dividends declared and affirmatively pleaded the illegal by-laws and prayed to recover damages thereunder. In other