Aсtion to adjudge a forfeiture of the corporate franchise of the Minneapolis Underwriters Association, Inc. (hereinafter called the association) and to enjoin its officers from enforcing certain bylaws of the association on the ground that suсh bylaws and certain practices thereunder violate M. S. A. 623.01 by so unreasonably restricting and restraining competition in the insurance business as to constitute a conspiracy and boycott in restraint of trade. The appeal by plaintiff, a nonmember of the assоciation, from a judgment for defendants presents the question whether the trial court’s findings, conclusions, and judgment are sustained by the evidence.
The association, organized in 1883 and incorporated in 1923, is a voluntary, nonstock, nonprofit membership corporation composed of fire insurance agents in the city of Minneapolis. Its membership is not open to insurance companies but is limited to their agents. Out of a total of 254 companies writing insurance in Minneapolis, 173 *369 are stock companies and 81 are mutuals. The agents (inclusive of approximately 150 firm agencies) of 159 stock companies are members of the association and write from 70 to 80 percent of the premium volume of all fire insurance written in Minneapolis. The balance of the insurance is written by nonmember agents, who represent 81 mutual and 14 stock companies. The number of agent members is not indicative of the number of licensed agents represented in the association, because any agent member may have in his employ, or affiliated with him, other individual sales agеnts who are registered as solicitor members. Plaintiff, who is not a member of the association, is the general agent for several insurance companies and as such employs numerous subagents.
We are particularly concerned with three provisions of the bylaws of the association, namely, (1) the “Maintenance of Rates Rule,” whereby all members are required to write insurance at the rates promulgated by a statutory bureau known as the Minneapolis Fire Underwriters Inspection Bureau; (2) the “In-or-Out Rule,” whereby members are prohibited from representing any company whose agents are not all members of the association; and (3) the “Non-Intercourse Rule,” whereby members agree not to place insurance on Minneapolis property with any agent or company except in compliance with the bylaws, and further agree not to accept brokerage risks except from fellow members. For a first violation of the bylaws a member is subject to a fine, and for a second violation, to both fine and expulsion from membership.
The Minneapolis Fire Underwriters Inspection Bureau (hereinafter called the bureau), referred to in the “Maintenance of Rates Rule,” is a rate-making bureau legally established pursuant to the Minnesota fire insurance rating bureau law (M. S. A. 71.01 to 71.06), and any rates establishеd by such bureau, in order to prevent discriminatory and unjust rates, are at all times' subject to review and revision by the state insurance commissioner. In establishing rates, the bureau, under a credit and debit system, classifies the risks according to the presence or absence of fire protection and fire prevention facilities. The basic premium rate may be increased by charging *370 against a particular risk certain debits for a deficiency of minimum fire protection safeguards. On the other hand, another risk may receive a rеduction in the basic rate by virtue of credits allowed for the presence of fire protection facilities. Among the insurance agencies, inclusive of the members of the association, there is considerable competition in securing for their respective customers all credits to which they are justly entitled, as well as in avoiding unjustifiable debits.
The rating bureau statute expressly provides that any insurer may deviate from the bureau rate, but if the deviation is downward then such insurer must maintain the lower rate for a minimum period of onе year with respect to the class of property involved. An insurance agent is not compelled to join the association, but if he elects to do so he thereby subjects himself to the bylaws, which are designed to compel all members to charge the ratеs fixed by the bureau, and not to deviate therefrom without first obtaining permission from the association. In order to meet competition from a deviating nonmember, the association may, in so-called “relief cases,” give a member express permission to brokеr a specified line of insurance at a variation rate with a nonmember agent who represents a deviating company. With the exception of such relief cases in which permission to deviate has been granted, it is the practice of the association to require the members not only to charge the bureau rate, but also not to place, or to renew, any insurance with a nonmember. Aside from the relief case exceptions, it appears that on certain occasions members have refused to become agents for companies represented by plaintiff, a nonmember, and that by reason of the bylaws members have refused to place or continue insurance with plaintiff’s (as well as with other) companies. It has been the regular praсtice of the association to remind individual members of their obligations whenever a threatened violation of the bylaws has come to light.
1. Plaintiff is not entitled to injunctive relief. The entire case has been tried on the theory established by plaintiff’s pleadings, which simply аllege that defendants by certain acts of conspiracy
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and boycott have brought about a restraint of trade for the purpose of stifling competition in the insurance business and in order to maintain maximum insurance premium rates in violation of §§ 623.01 and 623.02. The basic antitrust section, namely, § 623.01, is a criminal statute, and has been so recognized. Campbell v. Motion Picture M. O. Union,
Obviously, § 613.70 is not involved on this appeal. The general rule, with certain exceptions not here aрplicable, is that litigants are bound in this court by the theory upon which the action was tried below. Skolnick v. Gruesner,
2. The remaining issue relates to plaintiff’s attempt to vacate or annul the association’s corporate charter pursuant to § 623.02, which provides thаt every domestic corporation violating, directly or indirectly, any provision of § 623.01 “shall forfeit all of its corporate franchises.” Section 623.02 further provides:
“* * * The attorney general and the several county attorneys shall begin and conduct, in the district court, all actions and proceedings necessary to enforce the provisions of this section, and any citizen may do so.” (Italics supplied.)
Defendants contend, however, that both sections of the statute, as part of the same criminal chapter, involve criminal proceedings, and that plaintiff as a private citizen cannot begin or conduct a criminal prosecution. Whether a private citizen may be authorized to conduct a criminal action need not be determined. It is sufficient to point out that defendants are in error as to the nature of the proceedings for declaring a forfeiture of a corporate charter under § 623.02. The рreceding section, § 623.01, is a criminal statute, and we have so held. State v. Minneapolis Milk Co.
“* * * Tke violation of a corporation’s contract with the State by misuser or usurpation may be evidenced by the fact of the violation of some statute, criminal in character, but in this kind of proceeding we try the right of the corporation to further hold its franchises, not the question of finding its guilt or innocence under the statutе and fixing punishment permitted by the statute. It is the only way the State has of preventing the abuse of the confidences it has reposed in these corporate creatures which are of its own making.”
3. It is undoubtedly true that if a domestic corporation is indicted and convicted for a violation of § 623.01 such criminal conviction may be made the basis for charter forfeiture proceedings under § 623.02. See, State v. Minneapolis Milk Co.
4. Clearly, plaintiff was and is qualified to begin and conduct charter forfeiture proceedings. Has he, however, pursued the right remedy? Section 623.02 gives him the right to begin proceedings, but does not designate the form of action. Obviously, the right to begin the neсessary proceedings does not dispense with the need for selecting the proper remedy. In Dennistoun v. Davis,
The judgment of the trial court is affirmed.
Affirmed.
Notes
State v. Sportsmen’s Country, Club,