55 P.2d 449 (Okla. 1936), 26390, Wills v. National Mineral Co.

Docket Nº:26390.
Citation:55 P.2d 449, 176 Okla. 193, 1936 OK 226
Opinion Judge:PHELPS, Justice.
Attorney:John M. Goldesberry and Gerald B. Klein, both of Tulsa, for plaintiff in error. I. D. Moseley, of Tulsa, for defendant in error.
Case Date:March 03, 1936
Court:Supreme Court of Oklahoma

Page 449

55 P.2d 449 (Okla. 1936)

176 Okla. 193, 1936 OK 226




No. 26390.

Supreme Court of Oklahoma

March 3, 1936

Syllabus by the Court.

1. The character and quantity of business conducted within a state by an unlicensed foreign corporation may be sufficient to subject such corporation to process of the state courts and yet be insufficient to require it to become licensed before suing in the state courts.

2. If an unlicensed foreign corporation is doing such business within the state as would subject it to process of the state courts within the meaning of section 126, O.S.1931, then such process is valid notwithstanding fact that the business conducted is interstate in character, the interstate question being relevant only to instances where the local state seeks to regulate or restrict the corporation in its business, such as requiring license as condition precedent to suing in the state courts.

3. Doing business involves not only ownership, possession, or control of property, but also such functions as dealing with others in reference thereto, the exercise of discretion, the making of business decisions, the execution of contracts, the marketing of products by advertising and solicitation, collecting accounts, and kindred functions. Wherever an important combination of these functions is being performed, it is the doing of business at the place of such performance.

4. Wherever a corporation's agent, within the scope or apparent scope of his authority, is performing important business functions for the corporation, involving the exercise of discretion, whereunder contractual relationships are by his efforts established between the corporation and others in that place, the corporation is "present" and "doing business."

5. Evidence examined and held unlicensed foreign corporation was "doing business" within state in such manner as to subject itself to process of state courts under provisions of section 126, O.S.1931.

Error from District Court, Tulsa County; Harry L. S. Halley, Judge.

Action by Bertha E. Wills against the National Mineral Company, for damages. From an order sustaining a motion to quash summons, plaintiff appeals.

Reversed and remanded with instructions.

John M. Goldesberry and Gerald B. Klein, both of Tulsa, for plaintiff in error.

I. D. Moseley, of Tulsa, for defendant in error.

PHELPS, Justice.

Plaintiff sued to recover for personal injuries sustained when she unwrapped an article of machinery manufactured, wrapped, and shipped by defendant, alleging that by reason of defective wrapping and absence of warning a plunger shot therefrom and entered her head. Defendant had sold the article to a jobber in Tulsa, who had sent it to plaintiff in Collinsville, Okl., for sale on approval. The jobber is also a defendant but is not a party to this appeal.

The defendant National Mineral Company is a foreign corporation not licensed to do business in this state and has no resident service agent for service of process, nor has it filed a copy of its articles of incorporation or charter with the secretary of state. The plaintiff served summons upon the secretary of state under section 126, O.S.1931, authorizing process upon such corporations "doing business" within the state of Oklahoma. After several hearings at which much evidence was taken, the trial court sustained defendant's special appearance and motion to quash, from

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which plaintiff appeals. The order was based on the conclusion that defendant was not doing business in the state within the meaning of said section. It is necessary to set forth the evidence in considerable detail:

Defendant is an Illinois corporation with its principal place of business in Chicago, engaged in manufacturing and selling mechanical appliances and machinery for beauty parlors and barber shops. It marketed its products in Oklahoma through the agency of a Mr. Sachs, who also covered several other states and devoted his entire time to that work. He visited eight or ten different cities within the state three or four times per year, and when in Tulsa would spend about a week there and in that vicinity. He traveled in his own car and worked on commission. He customarily carried samples along with him, but occasionally had machines shipped to him here. His usual procedure was to demonstrate and take orders, subject to approval of the home office at Chicago, and then the supplies were shipped f. o. b. Chicago, according to his testimony. However, there were rather frequent exceptions to this method, as will appear from further examination of the evidence.

As security for payment of the jobbers' indebtedness to defendant, the defendant required some of the jobbers to assign the conditional sales contracts of customers, and also the notes of customers, to defendant. Thus until payment for such goods the title thereto was vested in defendant, as collateral for the jobbers' debts. Defendant's witness testified that where necessary defendant sued on the contracts.

Witness Barrackman, manager of the Tulsa office of a certain jobber, testified that on several occasions the representative, Sachs, made an "adjustment" on unsatisfactory merchandise by retaking possession of it and having it replaced by other shipments from Chicago. The codefendant Bigelow, who is also a Tulsa jobber, testified that purchasers from him, whose notes and conditional sales contracts he had assigned to defendant, paid both to him and to the defendant, and that the defendant regularly sent notices of forthcoming installment due dates to his customers; that defendant sells its merchandise not only to jobbers but also to beauty operator schools.

Defendant's representative, Sachs, visited plaintiff several times in an attempt to settle the claim, and corresponded with defendant's home office concerning it. Sachs, the agent, testified that several days before the hearing two permanent wave machines and another machine were shipped by defendant to him in Tulsa, that they arrived in parts and that he assembled the machines in that city and sold two of them to a beauty school there and tried to sell the other machine to other people in Tulsa, and that he had sold other shipments to people or business concerns, in the same manner, two or three other times during the preceding ten days. His statement that those machines were shipped to him purely for demonstration purposes was therefore nullified by his own testimony.

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Earl Hughes, a dealer in beauty supplies at Sapulpa, testified by affidavit that the defendant consigned to him certain merchandise for display and sale, which remained the property of the defendant; that he had an agreement with Sachs that he could take purchasers' conditional sales contracts covering these sales and send those contracts to the defendant; and that the defendant would then handle collections for the merchandise thus sold, and replace the same with similar merchandise for the continued display. He also testified that he bought merchandise from the salesman and paid him cash therefor. Though Sachs testified that these transactions were not complete until they were approved in Chicago, there was no competent evidence, and no effort at all, other than the conclusions of defendant's witnesses, to controvert the testimony of Hughes. In the affidavit of the defendant's president it was stated that the goods were billed to Hughes on consignment by "mistake," during his absence from the city of Chicago.

Harry Glenn, engaged in business in Drumright, testified that he had dealt with the defendant for years and that in 1934 Sachs personally "picked up" a portion of the cosmetics which witness had bought from defendant and credited witness' account with defendant to that extent; that Sachs also made an adjustment of certain unsatisfactory merchandise in possession of witness. Sachs testified that he had picked up this merchandise because Glenn was in debt to the defendant, but admitted that he took the merchandise over to Sapulpa and there sold it to Earl Hughes, and that he sent his own money to Chicago in payment therefor, and received about $15 from Hughes, later on, in payment of the personal debt of Hughes to him; that thus he picked up the merchandise on his "own responsibility." He further testified that sometimes but not often he collected money on accounts.

Defendant required jobbers to sign contracts agreeing to assign defendant the notes and conditional sales contracts of purchasers. A promissory note signed by one Harry Green, payable to defendant at Drumright, Okl., in the sum of $100 was introduced in evidence.

A Mrs. Hamm, of Tulsa, testified that she helped Sachs dispose of some demonstration machines and that she gave her permission for the defendant to bill her for the purchase price of the machines. The affidavit of Mr. Stein, president, and Mr. Gidwitz, secretary of the defendant corporation, averred in general terms that Sachs...

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