Opinion ID: 1281986
Heading Depth: 1
Heading Rank: 2

Heading: By way of exclusion, the last assignment will be first considered.

Text: As previously noted Chicago Title now takes the position, inter alia, Code § 515.48(10) violates the commerce provision, U.S. Const., art. I, § 8, cl. 3, which says in relevant part: The Congress shall have Power    to regulate Commerce    among the several States  . Plaintiff concedes, however, this issue is not raised by the pleadings. On the other hand, it contends testimony in course of trial reveals the extensive concern of the parties with the interstate features. Another argument advanced is that trial court considered the issue as evidenced by citations included in the conclusions of law which involved interstate commerce burdens imposed by state economic regulations. We are not so persuaded. In the first place any sporadic and phantasmagoric course of trial allusion to interstate features of the present case is a far cry from invocation of the subject commerce clause. It never alerted opposing counsel to existence of any such constitutional issue and, by the same token, accorded them no fair opportunity to make a counter showing. Moreover, it is evident trial court never entertained or resolved the commerce clause as an issue in the case. Rather, an examination of its Findings of Fact and Conclusions of Law, reveals the adjudication from which this appeal is taken focuses upon and resolves nothing more than the due process of law and equal protection issues as plead by plaintiff. Citation of cases in analysis of the due process and equal protection issues, which may also involve the commerce clause, are not deemed a consideration of the latter by trial court. Significantly, plaintiff never sought enlarged or amended findings and conclusions by trial court as permitted by Iowa R.Civ.P. 179(b). See also Michael v. Merchants Mutual Bonding Company, 251 N.W.2d 531, 533 (Iowa 1977). In light of the foregoing, Chicago Title preserved nothing for review regarding any claimed Code § 515.48(10) violation of its rights under the above cited commerce clause. Johnson v. Board of Adjustment, Etc., 239 N.W.2d 873, 878 (Iowa 1976), quoting from Farmers Insurance Group v. Merryweather, 214 N.W.2d 184, 190 (Iowa 1974). It is therefore apparent plaintiff now attempts to inject a constitutional provision never raised or considered below. In that regard this court has said: As a general rule, invalidity of a statute or ordinance, in order to be relied on, must be specifically raised by the pleadings distinctly pointing out in what manner or respect the statute or ordinance violates the provision invoked and the facts relied on to show unconstitutionality must be clearly made to appear. In Buda v. Fulton, 261 Iowa 981, 989, 157 N.W.2d 336, 341 we said: `This court has consistently held a constitutional challenge must specify the provisions invoked and state with particularity the details of any claimed transgression.    [Citing authorities]. `Generally a court will not inquire into constitutional issues on its own motion.    [Citing authorities]. `Pursuing the matter one more step, an issue should not ordinarily be considered in a noncriminal proceeding unless fairly raised by the pleadings.   [Citing authorities]. Cole v. City of Osceola, 179 N.W.2d 524, 531 (Iowa 1970). Chicago Title's attempt to here, for the first time, raise the commerce clause as an issue cannot be permitted. Though neither placed in question by the pleadings nor argued by the parties, it is deemed appropriate to observe the Congress, by the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015, authorized the various states to regulate the insurance business, notwithstanding absence of Congressional action under provisions of United States Const., art. I, § 8, cl. 3. In actuality, The McCarran-Ferguson Act,    mandates that the business of insurance shall be regulated by the states. Insurers' Action Council, Inc. v. Heaton, 423 F.Supp. 921, 926 (D.Minn.1976). Moreover, the United States Supreme Court has held the states may impose burdens on the insurance industry which, absent said Act, would be struck down under the commerce clause. Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342 (1946); In re Insurance Tax Cases, 160 Kan. 300, 161 P.2d 726 (1945), aff'd. 328 U.S. 822, 66 S.Ct. 1360, 90 L.Ed. 1602 (1946). Also, as stated in Robertson v. California, 328 U.S. 440, 458, 66 S.Ct. 1160, 1170, 90 L.Ed. 1366 (1945): For the commerce clause is not a guaranty of the right to import into a state whatever one may please, absent a prohibition by Congress, regardless of the effects of the importation upon the local community. Robertson upheld a California statute which prevented an out-of-state insurer from operating, save on a legal reserve basis, unless engaged in such business other than on such basis prior to January 1, 1940. It has also been judicially recognized that title insurance is an aspect of the insurance industry which the states may regulate. Lawyers Title Co. of Mo. v. St. Paul Title Ins. Co., 526 F.2d 795 (8th Cir. 1975); McIlhenny v. American Title Ins. Co., 418 F.Supp. 364 (E.D.Pa.1976). In sum total, we are constrained to observe Chicago Title's omission of any commerce clause issue in the pleadings and trial of the case was presumably premised on the insurance industry-wide recognition of the fact there exists a Congressional overlay of the McCarran-Ferguson Act which forestalls any serious consideration of the commerce clause in this cause. The commerce clause issue, having been belatedly urged, is neither rightfully in the case nor will it be entertained or considered. Foods, Inc. v. Leffler, 240 N.W.2d 914, 919 (Iowa 1976); Presbytery of Southeast Iowa v. Harris, 226 N.W.2d 232, 234 (Iowa 1975); State v. Kelly, 224 N.W.2d 456, 458 (Iowa 1974). III. As a prologue to an analysis of the remaining issues raised on appeal, we observe Chicago Title's arguments are foundationed upon a premise, which, if accepted at face value, would make it difficult if not impossible to effect a rational appellate review. In this regard it contends, The absolute prohibition of a legitimate business as mandated by Code § 515.48(10) cannot be sustained. It is similarly suggested by Chicago Title that if a business is lawful or legitimate, such activity is somehow clothed with an aura immunizing it from exclusion by any state legislature. The leitmotif of this argument is that title insurance is written by Chicago Title in all but four states, hence, it is a business which must be permitted to operate in Iowa. This self-serving rationale manifests a misinterpretation of a state's powers in our federal system and the forms of activity which enjoy constitutional protection. Illustratively, a state may prohibit a corporation from owning farmland, and provide for escheat thereof to the sovereign. See Asbury Hospital v. Cass County, N.D., 326 U.S. 207, 66 S.Ct. 61, 90 L.Ed. 6 (1945). In Asbury Hospital the Court upheld validity of a North Dakota statute prohibiting corporations from owning farmland after a ten year grace period during which it could be sold. If not so timely divested, the property escheated, to be thereupon disposed of by the locus county with net proceeds payable to the former owner. Because of its aptness we quote this from Asbury Hospital, 326 U.S. at 211-212, 66 S.Ct. at 63-64: The Fourteenth Amendment does not deny to the state power to exclude a foreign corporation from doing business or acquiring or holding property within it. Horn Silver Mining Co. v. New York, 143 U.S. 305, 312-315, 12 S.Ct. 403, 404, 405, 36 L.Ed. 164; Hooper v. California, 155 U.S. 648, 652, 15 S.Ct. 207, 209, 39 L.Ed. 297; Munday v. Wisconsin Trust Co., 252 U.S. 499, 40 S.Ct. 365, 64 L.Ed. 684; Crescent Cotton Oil Co. v. Mississippi, 257 U.S. 129, 137, 42 S.Ct. 42, 44, 66 L.Ed. 166. While recognizing the unqualified power of the state to preclude its entry into the state for these purposes, appellant points out that the state has permitted it to enter and to invest its money in obligations secured by mortgage on land within the state, in consequence of which it lawfully acquired the land free of restrictions. Appellant argues that the state may not, by later legislation, force a sale of the land thus innocently acquired, under conditions which do not allow recovery of the original investment. But a state's power to exclude a foreign corporation, or to limit the nature of the business it may conduct within the state, does not end as soon as the corporation has lawfully entered the state and there acquired immovable property. Subsequent legislation excluding such a corporation from continuing in the state has been sustained as an exercise of the general power to exclude foreign corporations which does not offend due process. Hammond Packing Co. v. Arkansas, supra, 212 U.S. 322, 342, 343, 29 S.Ct. 370, 376, 377, 53 L.Ed. 530, 15 Ann.Cas. 645; see also Baltic Mining Co. v. Massachusetts, 231 U.S. 68, 83, 34 S.Ct. 15, 17, 58 L.Ed. 127. Similarly, this Court has upheld legislation imposing burdens greater than those to which such corporations were subject at the time of their entry on the ground that the state might exclude them altogether at a later date, Philadelphia Fire Association v. New York, 119 U.S. 110, 7 S.Ct. 108, 30 L.Ed. 342; Horn Silver Mining Co. v. New York, supra; see also Crescent Cotton Oil Co. v. Mississippi, supra; Lincoln National Life Ins. Co. v. Read, 325 U.S. 673, 65 S.Ct. 1220, 89 L.Ed. 1861. Appellant, even if its activities in North Dakota are now restricted to the ownership of farm land within the state, stands in no better position to invoke the protection of the Fourteenth Amendment. The total exclusion of a corporation owning fixed property within a state requires it to sell or otherwise dispose of such property. Appellant must do no more. While appellant is not compelled by the present statute to cease all activities in North Dakota, the greater power includes the less. Since the state may validly require appellant to sell its farm land, the contention that the statute is wanting in due process because conditions have been such since its enactment that appellant has been and will be unable to salvage an investment made more than ten years before raises no substantial constitutional question. The due process clause does not guarantee that a foreign corporation when lawfully excluded as such from ownership of land in the state shall recapture its cost. In summary, issues presented on this appeal may not be resolved in terms of alleged lawfulness or legitimacy of the title insuring business. If such were the case, corporations permitted to lawfully operate gambling casinos in other jurisdictions could conceivably argue the same business would be, ipso facto, legitimate in Iowa. Surely a business activity deemed lawful or legitimate in forty-nine states does not compel Iowa, or any other state, to embrace the same standards. The genius of our federal system is to permit the states to experiment at local levels with those laws thought to be in the best interests of their citizenry. So we are in truth here called upon to determine whether the Iowa system for transferring real property titles shall, as a constitutional mandate, be burdened with an additional and costly layer of business activity which our legislature has expressly prohibited. IV. Chicago Title initially asserts trial court erroneously assumed the views expressed by the United States Supreme Court    would be applicable to the Due Process clause of the Iowa Constitution. Unquestionably, this court must determine Iowa constitutional requirements, and in so doing is under no obligation to uphold a local statute merely because the United States Supreme Court has deemed it not unconstitutional. Davenport Water Co. v. Iowa State Commerce Com'n., 190 N.W.2d 583, 593 (Iowa 1971). See generally Hetherington, State Economic Regulation and Substantive Due Process of Law, 53 NW.U.L.Rev. 226, 244, 248 (1958). But where, as in the present case, federal and state constitutional provisions contain a similar guaranty, they are usually deemed identical in scope, import and purpose. Shearer v. Perry Community Sch. Dist., 236 N.W.2d 688, 691-692 (Iowa 1975). More to the point, we are not bound by, but may look to, United States Supreme Court interpretations of the 14th Amendment due process provision for such light and guidance as they may afford. Davenport Water Co. v. Iowa State Commerce Com'n., 190 N.W.2d at 593; Duncan v. City of Des Moines, 222 Iowa 218, 227, 268 N.W. 547 (1936); cf. Hubbard v. State, 163 N.W.2d 904, 909 (Iowa 1969). See also 20 Am.Jur.2d, Courts, §§ 225-227. Nonetheless, plaintiff argues this court places tighter restrictions on attempted extensions of legislative authority. Supportively cited is Central States Theatre Corp. v. Sar, 245 Iowa 1254, 1259, 66 N.W.2d 450, 453 (1954), where it is said: The right to operate a legitimate business is one which the state may regulate but may not prohibit or unreasonably restrict. (Emphasis supplied). Without question this unqualified facially authoritative statement has since been repeated. See Pierce v. Inc. Town of LaPorte City, 259 Iowa 1120, 1123, 146 N.W.2d 907 (1966); Plaza Recreational Center v. Sioux City, 253 Iowa 246, 254-255, 111 N.W.2d 758 (1961); Stoner McCray System v. City of Des Moines, 247 Iowa 1313, 1322-1323, 78 N.W.2d 843 (1956); cf. Sperry & Hutchinson Co. v. Hoegh, 246 Iowa 9, 65 N.W.2d 410 (1954); Gilchrist v. Bierring, 234 Iowa 899, 14 N.W.2d 724 (1944). More later on this subject. Distinguishably, the United States Supreme Court has refused to draw any line of demarcation between prohibitory or regulatory laws. Ferguson v. Skrupa, 372 U.S. 726, 83 S.Ct. 1028, 1032, 10 L.Ed.2d 93 (1963). Also, in the federal due process field the presumption of statutory validity is especially protected. Williamson v. Lee Optical Co., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955); Daniel v. Family Security Life Ins. Co., 336 U.S. 220, 69 S.Ct. 550, 93 L.Ed. 632 (1949); Heatherington, State Economic Regulation and Substantive Due Process of Law, 53 NW.U.L.Rev. 13, 28 (1958). In substance, trial court held the Iowa general assembly was free to decide whether insuring of titles to real property in this state was a form of insurance activity to be permitted. Under guidance of the above noted federal cases, the court below refused to invalidate the instant statutory prohibition on due process grounds. Plaintiff argues, however, trial court erred in superimposing the above cited United States Supreme Court decisions on the above quoted more restrictive rule found in Central States Theatre. As a preface to further consideration of the problem at hand it is apparent Chicago Title leans heavily upon the foregoing italicized portion of the quote from Central States Theatre. Despite any views expressed to the contrary, this court is not convinced the above quoted portion of the Central States Theatre opinion is obiter dictum. Rather, it appears to have been germane to the principal issue in that case and at least judicial dictum. See Galvin v. Citizens Bank, 217 Iowa 494, 498, 250 N.W. 729 (1933); Perfection T. &. R. Co. v. Kellogg-MacKay, 194 Iowa 523, 530, 187 N.W. 32 (1922); State v. Naftalin, 246 Minn. 181, 74 N.W.2d 249, 266 (1956); Beloit Corp. v. Department of Industry, Lab. & H. Rel., 63 Wis.2d 23, 216 N.W.2d 233, 238 (1974); 20 Am.Jur.2d, Courts, § 190; 21 C.J.S. Courts § 190b. Be that as it may, Central States Theatre involved a statutory delegation of licensing power to a township administrative body, absent any guidelines, under which the local governing board could discriminately deny a license for operation of a lawful enterprise. In holding such tangential prohibition violated constitutional due process rights this court said, 245 Iowa at 1260, 66 N.W.2d at 453: It is true the police power of the state permits the licensing and regulation of legitimate businesses where necessary for the public good. But this regulation must not be capricious, arbitrary or unreasonable. It must have some relation to the general welfare, and it may not ordinarily go to the extent of entire prohibition of operation of the business. (Emphasis supplied). The court then proceeded to articulate the extant rule against enactment of legislation delegating unlimited licensing power to township trustees under which that tribunal could indiscriminately grant or deny a license for operation of a business. Obviously, the exercise of discretionary power by a subordinate local governing body under statutory authority is a far cry from the law-making prerogative vested in our general assembly. Moreover, Central States Theatre significantly accorded recognition to the fact that our legislature may not ordinarily prohibit the operation of a business but is free to do so if such forbiddance has some relation to the general welfare. It therefore follows the aforesaid abstract statement may not prohibit relied on by Chicago Title, lifted out of context, is not here controlling. Rather, it must be viewed and qualifiedly applied in accord with the aptly broadened statement above set forth at length. This means Chicago Title's reliance upon an erstwhile barren statement that a state may not prohibit the operation of a legitimate business is misplaced. Pursuing the subject further, it is apparent Central States Theatre recognized the right vested in our state legislature to prohibit any business venture deemed inimical to general welfare. Additionally, the modern tendency is to extend rather than restrict economic policy regarding enactment of police power legislation. City of New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 2516-2517, 49 L.Ed.2d 511 (1976); Steinberg-Baum & Co. v. Countryman, 247 Iowa 923, 931, 77 N.W.2d 15 (1956). In fact, we have held the State may, under its police power, constitutionally regulate any business endeavor which is detrimental to the people if not properly conducted, or even prohibit an activity found to be essentially injurious to public welfare. State ex rel. Turner v. Koscot Interplanetary, Inc., 191 N.W.2d 624, 630 (Iowa 1971). It is to us evident trial court justifiably invoked federal Supreme Court decisions in order to evaluate the enforceability of Code § 515.48(10) under our state due process standards.