City Sales Agency, Inc. v. Smith

Holden, J.,' delivered the opinion of the court. This is a suit in chancery by the appellant, the City Sales Agency, Incorporated, against the appelleé, W. F. Smith, Jr., to foreclose a lien for the purchase money on two motor trucks. The appellee defended in the lower court upon two grounds, but it is unnecessary to mention but. one, because the chancellor based his decision upon only one ground, and that is that the appellant was a foreign corporation domiciled in the state of Louisiana, and was doing business in this state without first having filed its charter in compliance with section 935, Code of 1906, section 4111, Hemingway’s Code, and that its contract was ’therefore void and unenforceable. [207] The evidence in the record discloses that the appellant was a foreign corporation doing business in the city of New Orleans, and had an agent resident in this state who solicited orders for the sale of motor trucks to be delivered to purchasers in this state. This agent, whose name was Baker, had no place of business in this state, nor did he sell the motor trucks in this state, hut took orders to be accepted and approved hy the appellant corporation in the city of New Orleans. When the trucks were shipped into the state, the agent, Baker, would distribute them in person to the purchasers and demonstrate the operation of the trucks, and would either receive cash payments or accept notes and liens upon the trucks to cover the purchase price. At times the appellant would have several trucks in this state to be delivered to customers who had purchased by an order accepted and approved by the appellant at its place of business in New Orleans. The two trucks here in question were sold to appellee through an order signed by him to the foreign corporation, appellant, at New Orleans, which order was there accepted by appellant and the trucks subsequently delivered by the agent of appellant to the appellee, purchaser, at Magee, Miss. Part cash was paid by appellee on the purchase of the trucks and the balance due was evidenced by a contract and notes executed, at Magee, Miss. . The question presented, then, is whether or not the transaction was one in interstate commerce, or whether the appellant was doing business in this state in violation of the statute. After a careful consideration of the question, we are convinced that the transaction was in interstate commerce, and that it was not the intent of the makers of our statute to impose any burden or restriction on the right of a foreign corporation to engage in interstate commerce in our state. If such were the purpose of our statute, then it would be invalid because such restrictions on commerce between the states is forbidden by the federal law, and consequently, if such were the purpose, then the statute [208] wóuld be annulled by the federal Constitution. Therefore we hold that our statute has no application to transactions within the protection of the Commerce Clause of the federal Constitution. Sales made by orders in our state by agents of foreign corporations having no place of business in this state, which orders are sent to thé office of the foreign corporations to there be approved, and accepted, are .undoubtedly interstate commerce which is not to be restricted by state law. The sale in the case before us was made by the agent, Baker, soliciting and receiving the ..order for the two trucks,, which order was sent to the office of the appellant at New; Orleans to be accepted or rejected by it, and was there accepted, and thus the contract was completed there, and the trucks were afterwards delivered into the state by the agent of appellant. The balance of the purchasé money, it is true, was evidenced and secured by a contract executed at Magee* Miss., but the original main transaction of the sale of the trucks was made and completed in the city of New Orleans when the appellant accepted the order signed by the appellee. The opinion of the chancellor indicates that because the contract and notes.to secure the balance of the purchase money were executed in Mississippi, and the trucks were delivered and demonstrated by the resident agent of appellant at Magee, Miss., the contract was made in Mississippi, and the agent of appellant was thus doing business in Mississippi. But this conclusion is incorrect because the contract of sale was made and completed in the city of New Orleans, and the delivery and execution of the notes for the balance of the purchase money were subsequent events incidental to the main transaction which was in interstate commerce: 14A Corpus Juris, pp. 1283, 1281, and 1285; 2 Ann. Cas. 309. The holding and reasoning of the chancellor is not without force with reference to whether the appellant through its agent was doing business in this state, because in a certain sense the acts and conduct of the agent in the instant [209] case might constitute doing business in this state. However, it has been held several times by the federal court that where a sale or transaction is in interstate commerce, the things done by the agent of the foreign seller in carrying out or delivering under the contract is not be be considered so as to burden or restrict the interstate transaction. As the above question was the only one passed upon by the chancellor, we shall reverse the decree and remand the cause for a new trial. Reversed and remanded.