Summary
In C.I.T. Corporation v. Stuart (Miss.), 187 So. 204, the court held that a foreign corporation which sent agents into this state to solicit reserve title contracts and purchased such contracts at its office outside the state, was not doing business within the state within the terms of our statute requiring the appointment of process agent as a condition precedent to maintenance of suit.
Summary of this case from Watson v. J.R. Watkins Co.Opinion
No. 33617.
March 13, 1939.
CORPORATIONS.
A foreign corporation which sent agents into the state to solicit reserve title contracts and purchased such contracts at its office outside the state, was not "doing business within the state" within terms of statute requiring appointment of process agent as condition precedent to maintenance of suit (Code 1930, section 4140).
APPEAL from the circuit court of Carroll county; HON. JOHN F. ALLEN, Judge.
V.D. Rowe H.T. Holmes, of Winona, and J.L. Weitlauf, of Chicago, Ill., for appellant.
Contracts are made when and where accepted.
A contract is a rule considered as entered into at the place where the offer is accepted, or where last act necessary to complete it is performed.
13 C.J. 580, par. 581; 1 A.L.I., Restatement, page 80, par. 74; Couret v. Conner, 118 Miss. 374, 79 So. 230; Schulze Baking Co. v. Goodson, 119 So. 353; Holder v. Aultman, 169 U.S. 81.
Contracts entered into in Mississippi and purchased and to be performed in foreign state is not "doing business" in Mississippi within the meaning of the statute under consideration.
14A C.J., page 1281, par. 3990, page 1283, par. 3991; 12 R.C.L. 72, sec. 50; Murfree, Foreign Corporations (Edition of 1893) par. 65; Clark on Corporations, page 774; North American Mortgage Co. v. Hudson, 176 Miss. 266, 168 So. 79; Dodds v. Pyramid Securities Co., Inc., 165 Miss. 269, 147 So. 328; George v. Smith, 250 Fed. 41; Allgeyer v. Louisiana, 165 U.S. 578; Reeves v. Harper, 9 So. 104; Davis Worrell v. General Motors Acceptance Corp., 241 S.W. 44; State Mutual Fire Ins. Assn. v. Brinkley Stave Heading Co., 61 Ark. 1, 31 S.W. 157, 29 L.R.A. 712, 54 Am. St. Rep. 191; Scruggs v. Scottish Mortgage Co., 54 Ark. 566, 16 S.W. 563; Bamberger v. Schoolfield, 160 U.S. 149, 16 Sup. Ct. 225, 40 L.Ed. 374; General Motors Acceptance Corporation v. Lund, 208 P. 502; Jones v. General Motors Acceptance Corporation, 265 S.W. 620; Commonwealth Farm Loan Co. v. Caudle's Admr., 203 Ky. 761, 263 S.W. 24; Hughes v. Campbell Coal Co., 201 Ky. 839, 258 S.W. 671; Pratt v. York, 197 Ky. 851, 248 S.W. 492; United Iron Works Co. v. Watterson Hotel Co., 182 Ky. 113, 206 S.W. 166; Ichenause Co. v. Landrum, 153 Ky. 320, 155 S.W. 738; Commercial Investment Trust, Inc. v. Gaines, 136 S.E. 609; General Motors Acceptance Corporation v. Shadyside Coal, 135 S.E. 272; Gen. Motors Acc. Cor. v. Huron Finance Cor., 63 S.D. 579, 262 N.W. 195; Continental Trust Co. v. Tallahassee Falls Mfg. Co., 222 Fed. 694; Covey Cotton Oil Co. v. Bank of Ft. Gaines, 15 Ala. A. 529, 74 So. 87; Monaghan Murphy Bank v. Davis, 234 P. 818; Robertson v. Southwestern Co., 136 Ark. 417, 206 S.W. 755; Coblentz Logsdon v. Powell Co., 229 S.W. 25; Continental Assurance Co. v. Ihler, 26 P.2d 792; Service System, Inc. v. Johns, 221 S.W. 777; Colt Co. v. Watson, 247 S.W. 493; Dickerson, Inc. v. Levine, 119 A. 783; Gilmer Bros. Co. v. Singer, 149 N.Y. Supp. 904; McDowell v. Starobin Electrical Supply Co., Inc., 104 N.Y. Misc. 596, 172 N.Y. Supp. 221; Putney Shoe Co. v. Edwards, 60 Pa. Super. 338; Anglo-California Trust Co. v. Hall, 211 P. 991; Marz Bensdorf, Inc. v. First Joint Stock Land Bank, 178 Miss. 204, 173 So. 297.
The controlling question is whether the contract sued on by appellant herein and the contracts accepted by appellant generally were bought in this state and were to be wholly performed within this state. The agreed statement of facts herein shows conclusively that the contract sued on herein and all contracts that were acquired by appellant were accepted and approved and bought and paid for by it at its offices outside of this state, and such contracts and the agreement to buy them were to be wholly performed outside of this state, and appellant respectfully submits that it is not doing business in Mississippi within the meaning of the statute under consideration.
Soliciting business in a state by a traveling representative is not "doing business" in that state within the meaning of the statute under consideration.
12 R.C.L. 52; Saxony Mills v. Wagner Co., 94 Miss. 233, 47 So. 899; Mershon Co. v. Pottsville Lbr. Co., 40 A. 1019; Item Co. v. Shipp, 140 Miss. 699, 106 So. 437; 60 A.L.R. 996; 14A.C.J., page 1276, par. 3983, page 1278, par. 3984; Bruner v. Kansas Moline Plow Co., 168 Fed. 218.
Retaining title to goods sold in another state is not "doing business" in that state within the meaning of the statute under consideration.
Underwood Typewriter Co. v. Piggott, 55 S.E. 664; Falls Rubber Co. v. La Fon et al., 256 S.W. 577; North American Mortgage Co. v. Hudson, 176 Miss. 266, 168 So. 79; Dodds v. Pyramid Securities Co., Inc., 165 Miss. 269, 147 So. 328; City Sales Agency, Inc. v. Smith, 126 Miss. 202, 88 So. 625.
Commercial notes are subjects of interstate commerce.
11 Am. Jur. 29, par. 29; Lottery case, 188 U.S. 321; Alabama New Orleans Transp. Co. v. Doyle, 210 Fed. 173; Compton v. Allen, 216 Fed. 537; Bracey v. Darst, 218 Fed. 482.
Appellant's business is interstate commerce and is therefore without the purview of the statute under consideration, and if the statute applies to appellant's business it is unconstitutional as contravening the Commerce Clause of the Federal Constitution.
City Sales Agency, Inc. v. Smith, 126 Miss. 202, 88 So. 625; Union Cotton Oil Co. v. Patterson, 116 Miss. 802, 77 So. 795.
Mack L. Boykin, of Vaiden, for appellee.
The stipulation agreed to by the plaintiff and defendant in this case and the contract executed by L.S. Stuart and assumed by W.H. Stuart and the transcript from the justice of peace court are the only evidence relied upon by plaintiff to show that the C.I.T. Corporation is not doing business in the state of Mississippi, within the meaning of section 4140 of the Code of Mississippi of 1930. The contract of L.S. Stuart offered in evidence by plaintiff and the stipulations show that the plaintiff was engaged in the business of purchasing and collecting choses in action against in Mississippi. It also shows that said plaintiff does a fairly extensive business in this manner and form. The evidence also shows that these non-negotiable contracts are collectible by the plaintiff monthly over a period of three years, that plaintiff keeps its employees in local hotels in Mississippi for several days, and that plaintiff does a fairly extensive business as such, the evidence does not show that this is an isolated piece of business but shows that plaintiff does a fairly extensive business as described in the stipulation.
The defendant does not contend here that if negotiable notes were purchased out of the state of Mississippi, and that if collections of these notes were handled by remote control that plaintiff in this cause and appellant here would be doing business in the State of Mississippi within the meaning of Section 4140 of the Code of Mississippi of 1930. But appellee does contend here that only a small part of appellant's business is handled in other states, and the major part of its fairly extensive business is handled by collectors and employees of appellant living in hotels in Mississippi, and making these monthly collections for 36 months upon these contract makers, filing suits and employing counsel to prosecute them on this fairly extensive scale, that appellant is engaged in the state of Mississippi in the business of note collecting within the meaning of said section 4140 of the Mississippi Code of 1930, and has no right to bring this suit.
Quartette Music Co. v. Haygood, 108 Miss. 755; Peterman Const. Supply Co. v. Blumenfeld, 156 Miss. 55; Wiley Electric Co. v. Electric Storage Battery Co., 167 Miss. 842; Levy Sons v. Jeffords, 105 So. 1; Clarksdale Agency v. Cole, 87 Miss. 637; Marx Bensdorf, Inc. v. First Joint Stock Land Bank, 173 So. 297.
Argued orally by H.T. Holmes, for appellant.
The C.I.T. Corporation is a foreign corporation, and has no office or place of business in the state of Mississippi. It engages in buying trade acceptances, conditional contracts, and other financial paper from dealers and others taking such contracts, the said purchases being accepted either at its office in Memphis, Tennessee, New Orleans, Louisiana, or Chicago, Illinois. It sometimes sends its agents into the state for the purpose of soliciting such contracts from dealers, merchants or others taking such contracts; but these agents do not accept such contracts, but merely transmit them to the offices above mentioned for acceptance or rejection. This C.I.T. Corporation has never filed with the Secretary of State the appointment of the local agents, upon whom process may be served, and has not done business in the state except in the manner above indicated.
The Neal Furniture Company, of Winona, sold to L.S. Stuart, of Vaiden, Mississippi, on the third day of July, 1936, a refrigerator, making a cash payment of $31.50, with an unpaid balance of $198, the deferred payments to be at the rate of $6.50 on the first of each month thereafter, retaining title in the refrigerator until the payments were completed. The contract provided that time was the essence of the agreement, and that if the buyer failed to discharge any of the payments as specified therein, that all the remaining payments might be deemed due and payable; and that the seller, or his assigns, might without notice and without legal process, enter and take possession of the merchandise so sold, and make such disposition thereof as might be deemed desirable — all payments previously made thereon to be deemed as liquidated damages, etc.
On the same day the Neal Furniture Company sent to the C. I T. Corporation, at the Memphis office, through the mails, the contract so made with L.S. Stuart, for its acceptance; the C.I.T. Corporation purchased the contract, accepting it at the Memphis office. Thereafter the purchaser, L.S. Stuart, sold or transferred the refrigerator to W.H. Stuart, who agreed to assume all the unpaid obligations; but it was provided in the transfer or sale that L.S. Stuart was to remain liable on the contract also.
W.H. Stuart defaulted in the payment of some of the obligations, and the C.I.T. Corporation matured the unpaid obligations, and instituted a replevin suit in the justice of the peace court for possession of the refrigerator under the said reserve contract title so purchased by it. The case was tried on stipulated facts, and on the contract reserving title, the stipulated facts containing, among other things, an agreement as to the facts above stated; which stipulations being lengthy, we deem it unnecessary to set them out in full.
The only question for consideration on this appeal is whether the C.I.T. Corporation was precluded from maintaining a suit by its failure to file with the Secretary of State the appointment of an agent within the state, upon whom process might be served, binding upon the company, in accordance with the provisions of section 4140, Code of 1930, which reads as follows: "Every domestic corporation shall maintain an office in the county of its domicile in this state, either in charge of an officer or officers of the corporation, or in charge of some persons or corporation duly designated as resident agent for the service of process by the directors (by whatever name called) of such corporation, a duly certified copy of the resolution designating such resident agent, and the written acceptance of such agency by the agent, to be filed with the secretary of state. In the event of the death, resignation or removal of such resident agent, another shall be substituted within thirty days in the same manner and accompanied by the same fee as in the former appointment; and until such substitution, or in event of the failure of a corporation to so designate and qualify a resident agent where one is required by this act, the secretary of state shall be the agent for the service of process upon such corporation without resident agent, until one shall have been designated as herein provided. Every foreign corporation doing business in the state of Mississippi, whether it has been domesticated or simply authorized to do business within the state of Mississippi, shall file a written power of attorney designating the secretary of state or in lieu thereof an agent as above provided in this section, upon whom service of process may be had in the event of any suit against said corporation; and any foreign corporation doing business in the state of Mississippi shall file such written power of attorney before it shall be domesticated or authorized to do business in this state, and the secretary of state shall be allowed such fees therefor as is herein provided for designating resident agents. Any foreign corporation failing to comply with the above provisions shall not be permitted to bring or maintain any action or suit in any of the courts of this state."
From the statement of facts it will be seen that the transaction here involved was the purchase by the C.I.T. Corporation, at its office in Memphis, Tennessee, of the reserve title contract, containing the obligation to pay monthly the deferred payments on the refrigerator, with the right to mature all deferred payments, on failure on the part of the purchaser of the refrigerator to meet the payments as stipulated in the contract. The contract of purchase by the C.I.T. Corporation was executed and completed at Memphis, Tennessee, and a person or corporation buying such contract or commercial paper outside of the state is not considered as doing business within the state, in the meaning of the statute above set out. See North American Mortg. Co. v. Hudson, 176 Miss. 266, 168 So. 79, and authorities cited in that case; 14A C.J., page 1281, par. 3991; 12 R.C.L. page 72, section 50; Clark on Corporations, page 774.
It was therefore error for the court below to grant a peremptory instruction for the defendant, and to enter judgment in accordance therewith for the defendant. The judgment will be reversed and the cause remanded for further proceedings.
Reversed and remanded.