Advance-Rumely Thresher Co., Inc. v. Stohl

• Decision Date: 02 December 1929
• Docket Number: 4792
• Citation: 283 P. 731,75 Utah 124
• Court: Utah Supreme Court
• Parties: ADVANCE-RUMELY THRESHER CO., INC. v. STOHL

283 P. 731

75 Utah 124

ADVANCE-RUMELY THRESHER CO., INC. v. STOHL

No. 4792

Supreme Court of Utah

December 2, 1929

Appeal from District Court, First District, Box Elder County; M. C Harris, Judge.

Action by the Advance-Rumely Thresher Company, Inc., against Heber N. Stohl. From a judgment for defendant, plaintiff appeals.

REVERSED AND REMANDED.

W. E Davis, of Brigham and H. R. Turner, of Pocatello, Idaho, for appellant.

Thatcher & Young, of Ogden, for respondent.

FOLLAND J. CHERRY, C. J., and STRAUP, ELIAS HANSEN, and EPHRAIM HANSON, JJ., concur.

OPINION

FOLLAND, J.

Plaintiff commenced this action to recover the balance of the purchase price on an Advance-Rumely combination harvester; the price being evidenced by notes secured by a chattel mortgage on the harvester, which mortgage plaintiff sought to foreclose. The case was tried to a jury, and, after a verdict for defendant, plaintiff appeals. Plaintiff is a New York corporation, with head offices at La Porte, Ind. It alleges the contract of purchase is an Indiana contract, made in the course of interstate commerce. Defendant alleges that the contract was made within the state of Utah, and that plaintiff, being a foreign corporation and not having complied with the laws of the state permitting it to do business within the state, the notes sued upon are void, and that plaintiff has no standing to prosecute its suit in the courts of this state. A further defense alleges breach of warranty with respect to the machinery sold, and that defendant had rescinded the contract; that, notwithstanding he did not give notice of defects in the machinery or of rescission, as required by the contract, plaintiff by its conduct had waived strict compliance on the part of the defendant with the terms of the contract in this respect. An additional defense sets up damages because of a breach of warranty. The case was tried on the question of rescission of contract; the trial court holding that the defendant could not urge both rescission and damages for the breach.

Two questions are presented on this appeal: (1) May the plaintiff maintain its action in view that it is a foreign corporation and has not complied with the laws of this state permitting it to do business herein; and, (2) assuming the harvester company did not comply with the terms of warranty, is defendant precluded from asserting breach of warranty as justification for rescission of the contract?

On the first point defendant made a motion for nonsuit at the close of plaintiff's case on the ground that the transaction in question was intrastate, and that plaintiff, a foreign corporation, not having complied with the laws of Utah, could not maintain the action. This motion was overruled and exception taken. Defendant on this appeal made cross-assignment of error assigning that the court erred in failing and refusing to grant a motion for nonsuit. This motion is as follows:

"Mr. Young (Attorney for Respondent): For the sake of the record I desire at this time to move for a non-suit on the ground that the plaintiff is a foreign corporation--admittedly so--and as such would not be permitted to maintain this suit. The record showing that the sale was made in the State of Utah, the notes and mortgage, together with the other notes and mortgages were executed in the State of Utah, and the machine in question was not delivered to this state before the notes and mortgage were signed, and the entire transaction took place in this state, and there is no proof that the plaintiff has ever complied with the laws of the State of Utah with respect to foreign corporations doing business in this state. I take it that it is admitted, that fact is admitted.

"Mr. Turner (Attorney for Appellant): No, sir, we are not doing business in this state at all. We have not complied with the laws here.

"The Court: The motion is denied at this time. It may be that some time later on we can hear from you.

"Mr. Young: We reserve an exception."

In the assignments of error, appellant has sought to enlarge the grounds of this motion by urging that plaintiff was doing business generally in the state. This ground is also argued in his brief.

The motion as made, however, is upon two grounds, it being conceded that plaintiff had made no effort to qualify under the laws of the state so as to permit it to do business in Utah: (1) That the contract is intrastate rather than interstate; (2) that under these circumstances our statute does not permit the plaintiff to maintain an action in the courts of the state.

It is well settled that a motion for non-suit must specifically state the grounds relied upon, and that other grounds stated for the first time in this court will not be considered. Boyle v. Union Pac. R. R. Co., 25 Utah 420, 71 P. 988. We are not called upon, therefore, to pass on the question of whether the evidence shows that plaintiff was doing business generally within the state, nor to consider the legal results flowing therefrom if the evidence should so show. It is urged by defendant that the transaction is intrastate for two reasons: (a) That the machinery was shipped into Utah in a knocked-down condition and after its arrival and delivery to defendant the parts were assembled and put in running condition by experts of the plaintiff; (b) that the notes and mortgage were executed and delivered after the machinery had arrived in Utah on board cars and before delivery of same to the defendant. In support of his views, defendant cites 14A C. J. 1270, and 14A C. J. 1286, and a large number of cases found in the footnotes of these texts.

The evidence of this branch of the case with little, if any, contradiction establishes the following facts: Plaintiff is a corporation organized under the laws of New York, with its head office at La Porte, Ind., and a branch office at Pocatello, Idaho. The territory covered by the branch office at Pocatello includes the states of Idaho and Utah and parts of Wyoming; that the company kept no stock of goods in Utah, had no account in any bank in this state; that the expenses incident to its sales and business in the states named were paid by check issued at its Pocatello office; that a garage and service station operator named Winchester, located at Tremonton, Utah, was designated as a local dealer, dealing in Advance-Rumely machinery; that he had parts for which he was personally responsible to the company which he kept for sale; and that he advertised and solicited orders for this machinery and received commissions on sales made by or through him according to the terms of the written contract between him and the company. This contract, by its terms, indicates that he is in no manner an agent of the company with powers to bind it in any respect. Winchester interested Stohl in this particular harvester, but the sale was made by a Mr. Moyer, a salesman working under the direction of the Pocatello branch office. The contract of sale, which is in writing, is in form of an order signed by the defendant, Stohl, at Tremonton. The order was brought to him by Moyer, and is a printed blank furnished by the company. It contains provisions in respect to manner of settlement, warranty of machinery, conditions upon which the right to rely on the warranty must be performed by the buyer, and further provides that the contract shall not be obligatory upon the vendor until accepted by it at its head office. This order went through the Pocatello branch office to the company at La Porte, Ind., where it was accepted in writing on July 5, 1927; acceptance being executed by the vice president of the company. The harvester came by freight from La Porte, Ind., via McCammon, Idaho, to Deweyville, Utah. Defendant was notified by the Pocatello office that the harvester was at Deweyville. Defendant thereupon went to the bank at Tremonton and executed a receipt for the machinery and the notes and chattel mortgage in question in this suit. All of these documents were prepared by the Pocatello branch office and sent to the bank. Defendant, in company with Winchester went to Deweyville, obtained possession of the machinery, and took it to Tremonton. The next day two experts of plaintiff came to Tremonton and assembled the machinery and started the motor to see that it would operate.

From this evidence we are convinced the transaction in suit is an interstate one. The order was signed in Utah, sent to the Idaho branch office, and accepted by the company in Indiana. Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 5 S.Ct. 739, 28 L.Ed. 1137. We are also satisfied that the work of setting up the machinery by experts of vendor and the adjusting of the same in order to make it work satisfactorily, although performed in this state, did not make the transaction an intrastate one as distinguished from interstate. The question is a federal one, and we are bound by the decisions of the Supreme Court of the United States. Defendant cites and relies on the case of Browning v. City of Waycross, 233 U.S. 16, 34 S.Ct. 578, 58 L.Ed. 828, but, since the decision in that case, the Supreme Court of the United States has fully settled the matter in the case of York Mfg. Co. v. Colley, 247 U.S. 21, 38 S.Ct. 430, 62 L.Ed. 963, 11 A.L.R. 611, distinguishing the Browning Case. It was there held, citing the headnote, as follows:

"A provision in a contract of sale of an artificial ice plant by which the foreign corporate seller agreed to furnish an engineer who should assemble and erect the machinery at the point of destination, and should make a practical efficiency test before complete delivery, is relevant and appropriate to the interstate sale of the machinery, and therefore, does not justify the courts of the state to which the machinery was...