Tyson v. Jennings Produce Co.

SAMFORD, J. The complaint, and amendment thereto, was in eight counts. The first six assignments of error relate to the action of the court in its rulings on pleadings, and the ninth assignment of error relates to the action of the court in overruling the defendant’s motion to expunge certain papers from the record. [1J We have carefully examined, these pleadings and the motion, and are of the opinion that the actions of the trial court in its various rulings were either without error, or, if the court was in error in overruling the defendant’s motion to expunge, such action did not injuriously affect any substantial rights of the defendant, and therefore did not constitute reversible error. Rule 45, Supreme Court (175 Ala. p. 21, 61 South, ix). The pleadings, as shown by the record, clearly present for consideration the issues between the parties, which were based upon the-following facts: On August 25,1910, the Jennings Produce Company, a Virginia corporation doing business at Rural Retreat, Va., wired to C. A. Tyson, a merchandise broker- and factor doing business at Birmingham, Ala., as follows: *375 “Can you sell car or two sacked potatoes good white stock prompt shipment to-morrow or Saturday answer.” In reply to this message Tyson wired the produce company the next day as follows: “We have received telegram of Thursday can sell one car potatoes nice size seventy-five cents per bushel delivered answer.” To which the produce company replied by wire on August 26th: “We can barely break even at alcohol delivered sacked. Our car is nice stock. Telegraph immediately if you can sell.” f On that day Tyson replied by wire as follows: “Wire received, can sell at alcohol competitors offering at aimless answer.” The words “alcohol” and “aimless” were code words, the meaning of which was known to both parties, “alcohol” being interpreted “81 cents per bushel,” and “aimless” being interpreted “75 cents per bushel.” Acting on the last telegram, the produce company, whose business was dealing in wholesale produce in car lots, shipped to Tyson at Birmingham and billed to him a carload of potatoes, which they expected him to sell at 81 cents per bushel, as per the correspondence above set out, deduct his commission and charges, and remit the balance to the plaintiff. Appellant, Tyson, made a mistake in his last telegram b3r writing therein the word “can” instead of the word “can’t,” and in response to a request for payment of the balance of the proceeds of the sale of the potatoes wrote the plaintiff as follows: “On my return to the city, I found your favor of October 21st awaiting me. In reply will say after looking up my wire in question, T found I made a mistake in using the word ‘can’ instead of ‘can’t,’ but at the same time I stated in the wire that your competitors were offering potatoes freely at 75 cents per bushel. You should have known that it was impossible for me or any other broker to get 6 cents per bushel above the market price for your potatoes when our competitors were offering and selling potatoes of the same quality, and you should have known there was something wrong, and you should have asked.” It is undisputed that Tyson made the mistake and sold the potatoes at less than 81 cents per bushel, and, after deducting his commission, remitted the balance to the plaintiff. This suit is for the difference between the price obtained by Tyson and the 81 cents per bushel, less the commission charged. In reference to his business Tyson testified as follows: “My business is to handle goods on commission. Goods which I handle are shipped me and sold by me, after they arrive here, but to different parts of the city. Then I remit to the party shipping the sale price, less my commission, Every one of the potatoes were sold after they got here.” Tyson is described on his letter heads as “Wholesale Broker and Manufacturer’s Agent” and “Wholesale Brokerage and Commission.” [2] The plaintiff’s complaint and the facts showed that it was a corporation incorporated under the laws of the state of Yirginia, and doing business at the town of Rural Retreat, in said state, and it is not contended that the plaintiff has complied with the laws of the state of Alabama with reference to qualifying to do business in this state. The case was tried by the court without a jury, and judgment rendered in favor of the plaintiff, from which judgment the defendant prosecutes this appeal, which is submitted upon appellee’s motion to strike the bill of exceptions and upon the merits. The clerk’s certificate shows that the judgment was rendered against the defendant on the 6th day of March, 1915. The bill of exceptions was marked “Presented” by the trial judge on the 4th day of June, 1915, and signed by him on the 28th day of August, 1915. Therefore there is no merit in the motion to strike the bill of exceptions, and it is overruled. [3] There can be no doubt that this case involves a construction of the statutes of this state requiring foreign corporations doing business in this state to qualify under the statute, and also whether the transaction between the plaintiff and the defendant is governed by the federal law controlling interstate commerce. As was said by Judge Brown, in the case of Citizens’ National Bank v. Bucheit, 14 Ala. App. 518, 71 South. 86: “It is manifest that it is not the purpose of these statutes to interfere with transactions of strictly interstate commerce (Code 1907, § 3650), and they must be so enforced as not to unreasonably burden such commerce, or the right of foreign corporations to invoke the power and authority of the courts to recover the fruits thereof. The expression found in some of our cases, to the effect that such corporations cannot sue in the courts of this state without qualifying under the Constitution and statutes, is too broad in its scope. Such a rule, if strictly enforced, would result in imposing unreasonable restraint on acts of interstate commerce. Sioux Remedy Co. v. F. M. Cope, 235 U. S. 197, 35 Sup. Ct. 57, 59 L. Ed. 193.” [4] It is apparent from the facts in this case, and there is no substantial conflict in the evidence, that the potatoes were shipped to Tyson, who was a factor or commission merchant, and that Tyson was acting as a factor or commission merchant in handling the goods so shipped to him. The dealings between the parties being that of factorage, and not a mere selling agency, it is clear that Tyson was not the agent of the plaintiff in the sense that plaintiff was actually doing a business in the state of Alabama, contrary to the statute. A factor is generally defined to be an agent who, as a business, sells goods and merchandise consigned and delivered to him by or for his principals and for a compensation commonly called factorage or commission. 19 Cyc. p. 115. A definition which has been adopted in Alabama is as follows: “A factor who has the possession of goods differs materially from a broker. The former is a person to whom goods are sent or consign *376 ed, and he has not only the possession, but, in consequence of its being usual to advance money upon them, has also a property in them and. a general lien upon them. When, therefore, he sells in his own name, it is within the scope of his authority, but a broker has not the possession, and the vendee cannot be deceived by that circumstance. Employing a person to Sell goods as a broker does not authorize him to sell in his own name.” 6 Mayfield Dig. p. 92, par. 1. So that under the dealings between the parties we have the following facts: (1) Tyson is a broker or factor, and sells for other consignees than the plaintiff; (2) be actually had possession of the goods of the plaintiff, these goods having been shipped, billed to, and consigned to him; (3) he sells them in Ms own name, and the obligation moves originally through him; (4) all the expenses of sale incident to the payment of freight, dray-age and the like are paid by the defendant, Tyson, and deducted from the sale price, together with his commission; (5) the plaintiff paid to Tyson a commission on the sale of the goods consigned, or sold through Mm; (61 the plaintiff does not have in its possession .any goods in Alabama; it maintains no place of business, and did not at this time sell any goods except the car of potatoes which was sold through the defendant, so far as tMs record discloses; (7) by reason of Ms possession of the property and Ms right to commission and tire expenses paid by Mm, Tyson acquires a special interest in the property. Prior to tMs time the defendant had disposed of a car of cabbage for the plaintiff, under conditions similar to the above. [5] These things do not constitute a doing of business by the plaintiff company in the state of Alabama, within the meaning of the Constitution and statutes of this state, and is therefore governed by the laws relative to interstate commerce. The decisions of the court are not in entire accord upon tMs question, but it has been generally held that, .where a foreign corporation places its product in the hands of local merchants in the domestic state, to be sold on commission, the foreign corporation is not doing business in the domestic state. Allen v. Tyson-Jones Buggy Co., 91 Tex. 22, 40 S. W. 393, 714; Brown Seed Co. v. Richardson, 53 Misc. Rep. 517, 103 N. Y. Supp. 243. In the case of Atlas Engine Works v. Parkinson (D. C.) 161 Fed. 223, the question involved was whether a corporation was doing business in the state of Wisconsin, witMn the meaning of the statute of that state requiring foreign corporations to make certain reports, etc. In that case the Atlas Company made a contract with Plattville Company whereby the latter was made the agent of the former to sell its engines and boilers on commission in a certain part of Wisconsin" and to receive and hold strictly on consignment all machinery shipped by it, to make monthly reports of all merchandise on hand unsold, pay freight, oil, and keep in good order without charge, pay taxes, keep the goods insured, hold unsold machinery subject to the order of the claimants, ship it as directed, and pay charges; the Atlas Company to refund freight, also to guarantee payment for the machinery sold. At the expiration of two years from the date of shipment unsold goods were to be bought and paid for in cash at the option of the Atlas Company, or loaded on cars, the Plattville Company to pay freight. The Plattville Company was authorized to contract that the Atlas Company would replace defective parts of the macMnery; the Plattville Company to guarantee the payment of all accounts. The Plattville Company was also to have the benefit of all sales made in its territory as fixed by its contract. The court here pointed out that a foreign corporation might employ a part of its property in a state without doing business in such state within the meaning of a statute like the one in question. The court held that the Atlas Company was not doing business in Wisconsin. The court said: “That the agency contract relative to interstate commerce seems quite clear. It does not purport to sell anything. No vendor or vendee is mentioned. It was a bailment for sale by a factor under del credere commission.” Another case is that of Butler Bros. v. U. S. Rubber Co., 156 Fed. 1, 84 C. C. A. 167, where it was decided by the United States Circuit Court of Appeals that, where the rubber company, a New Jersey corporation, shipped rubber goods to Butler Bros. Shoe Company, a Colorado corporation, Butler Bros, being wholesale merchants engaged in the purchase and sale of rubber goods and other merchandise at Denver, and where in 1901 the shoe company made factorage contracts with the rubber company for the shipment of goods to the shoe company at Denver, the court, through Mr. Justice Sanborn, who wrote the opinion, said: “Let us now turn to the contracts, observe what the rubber company agreed to do and what it actually did under them, and determine, if possible, whether or not in making or performing these agreements it was guilty of doing any business within the meaning of the Constitution and statutes of Colorado. It agreed to ship the goods from its warehouse, or its mill, upon the orders of the appellee, to that company in Denver, and it did so. It contracted to do, and it did, nothing more. It never had any office or place of business in Colorado. It never received, stored, handled, or sold any goods, or collected any money for the sales of any goods, in that state under its contract. It never incurred, assumed, or paid any expenses of doing all these things, or of conducting any of the business. The shoe company had and maintained a place of business in Colorado, it rented or owned the place in which the business in Colorado was done, and it agreed to bear all the expenses and losses of receiving, storing, and selling the goods, and it did so. The purchasers of the goods were purchasers from it, solicited and secured by it. They were its customers, and liable to it for the purchase price of the goods. The goods were billed to them in the name of' the shoe company as- consignee. The profits of the business and the work of the business, the labor of receiving, storing, and selling the goods, were *377 the shoe company’s. The profits constituted its factorage, its compensation, for carrying on the business. * * * “A farmer sends to a commission merchant in the city a dozen barrels of apples for him to sell. The factor puts them in his store, sells them, receives the proceeds, and remits, them, less his factorage. The farmer from time to time sends 1,000 barrels during the season, and they are sold and the proceeds remitted in the same way. The farmer is not carrying on the business of selling apples in the city, but the factor is. * * * “The transaction between the parties to this suit is interstate commerce. The rubber company did not agree to do, and did not actually do, any of the business of receiving, storing, and selling the goods in Colorado. The shoe company did agree to do, and did do, that business.” In this case a writ of certiorari was denied by the Supreme Court. 212 U. S. 577, 29 Sup. Ct 686, 53 L. Ed. 658. To the same effect is the ease of Monongahela Distillery Co. (D. C.) 186 Fed. 220; Leisy & Co. v. Hardin, 135 U. S. 100, 10 Sup. Ct. 681, 34 L. Ed. 128; Savage v. Jones, 225 U. S. 501, 32 Sup. Ct. 715, 56 L. Ed. 1182; Scott v. Donald, 165 U. S. 107, 17 Sup. Ct. 262, 41 L. Ed. 648; Ex parte Young, 209 U. S. 125, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Kehrer v. Stewart, 197 U. S. 60, 25 Sup. Ct. 403, 49 L. Ed. 663. The Supreme Court of this state has followed this view in the case of Lee v. Intendant & Town Council of La Fayette, 153 Ala. 675, 45 South. 294; Crum v. Town of Prattville, 155 Ala. 154, 46 South. 750. Authorities which, upon first blush, would appear to be against this view, are those cases challenging the rights of various states to impose ad valorem taxes upon goods stored in the state for distribution, and are not in conflict with these views; and in the ease of American Steel & Wire Co. v. R. A. Speed, 192 U. S. 500; 24 Sup. Ct. 365, 48 L. Ed. on pages 546 and 547, Mr. Justice White explains and differentiates the cases which otherwise might seem to be in conflict along this line. [6] Holding to these views, as we do, and believing that these statutes should be construed in such manner as not to embarrass •commerce between the states, it follows that the trial court did not err in rendering judgment for the plaintiff. There is no error in the record, and the judgment of the trial court is affirmed. Affirmed. BROWN, P. J., concurs.