Brenard Manufacturing Co. v. Gibbs

• Decision Date: 02 June 1928
• Docket Number: 2134
• Citation: 119 So. 483,9 La.App. 137
• Court: Court of Appeal of Louisiana — District of US
• Parties: BRENARD MANUFACTURING CO. v. GIBBS

119 So. 483

9 La.App. 137

BRENARD MANUFACTURING CO. v. GIBBS

No. 2134

Court of Appeals of Louisiana, Second Circuit

June 2, 1928

Appeal from the First Judicial District Court, Parish of Caddo.Hon J. H. Stephens, Judge.

Action by Brenard Manufacturing Co. against W. G. Gibbs.

There was judgment for plaintiff and defendant appealed.

Judgment affirmed.

R. L Garret, of Shreveport, attorney for plaintiff, appellee.

Scheen & Blanchard, of Shreveport, attorneys for defendantappellant.

OPINION

ODOM J.

Plaintiff brought this suit to recover of defendant $ 844.00, and set up as a cause of action that it is the holder and owner of twelve promissory notes aggregating that amount, all executed and signed by defendant and made payable to plaintiff, which notes are attached to and made part of the petition.

Plaintiff amended its original petition by setting out that the notes sued on were given for the purchase price of graphaphones or music boxes ordered by defendant from plaintiff under a certain order or agency contracts which were signed by defendant and sent to plaintiff at Iowa City, Iowa, for approval as stipulated therein, and that after approving said order the goods ordered were delivered to defendant by delivery to a carrier in Iowa City, Iowa, as provided in the order, and it attached said orders to and made them part of the amended petition.

Defendant, in limine, tendered an exception to the suit, alleging that plaintiff was conducting business in this State in violation of law and that therefore plaintiff has no right of action.

No action seems to have been taken on this exception by the Court.

Subsequently defendant filed answer, reserving his rights under the exception, and admitted that he signed the notes sued on but denied by the indebtedness on the grounds that the notes were secured by fraud and without consideration, and he especially alleged that plaintiff's representative had agreed that if defendant would sign the contract and the notes sued on, he, plaintiff, would place a salesman in the territory who would make sales of the machines, but that no salesman appeared and "that on account of the said failure of the agreement and contract the said machines were never taken out of the railroad and the same were returned to the plaintiff at the place they claimed to have consigned the same; that they were duly notified of the failure to carry out the agreement and contract and the true consideration of the said note, and the plaintiff refused and failed to carry out the contract and agreement, and therefore the said notes were without consideration and were secured by fraud and your defendant has nothing in value therefor."

There was judgment for plaintiff as prayed for and defendant appealed.

OPINION

The contract which defendant signed reads in part as follows:

"The Brenard Manufacturing Co.,

"Iowa City, Iowa,

"Gentlemen:

"Upon your approval of this order and agency contract deliver to me at your earliest convenience, F. O. B. factory or distributing point, the articles mentioned below, in payment for which I herewith hand you my notes aggregating $ 422.00 which you are to cancel and return to me if agreement is not approved by you."

(There were two of these contracts or orders, and two sets of notes.)

Then follows a description of the articles ordered and a clause granting to defendant the exclusive agency for plaintiff's line of "Golden-Throated" Claxtonola phonographs in that territory for three years and a clause with reference to discount, etc., and the following:

"If any sales under this contract do not amount to $ 422.00 (the value of the goods ordered and the aggregate amount of the notes accompanying the contract) you agree to either pay me the difference in cash or repurchase these Claxtonolas and records if returned to you in good order and you are to send your bond in the sum of $ 422.00 to protect me in the conditions of this contract.

"To make the last above paragraph binding upon you I agree to furnish within thirty days of date hereof 50 names and addresses of persons who may be interested in securing Claxtonolas to whom you are to send appropriate advertising matter * * * You are to have the right to send a special salesman into my territory at any time to do field work and promote the sale of Claxtonolas through my agency * * * In order to protect you in your special methods and plans and in your expenditures this order cannot be countermanded."

This, and one other contract like it, together with the notes sued on, were forwarded immediately to plaintiff company at its home office in Iowa City, Iowa, and was accepted on the same date received and the goods shipped promptly by express.When the goods arrived defendant refused to accept them and in order to prevent a sale of them by the express company they were returned to the shippers at their request according to the testimony of Mr. Loveland, a member of the plaintiff firm, and are being held subject to defendant's orders.

According to defendant's testimony, given on the trial of the case, he refused to accept the goods and remove them from the express office, and he was asked:

"Q.Well, when these machines came down there you refused to receive them, absolutely?

"A.Yes, sir; until the man came.That was the agreement with me.I wasn't to take them until he came back.I wasn't supposed to get them out of the express company's office until they furnished a helper."

And he said the agent or helper did not return.He also testified that he would not receive the goods because the plaintiff did not send him the kind of a bond they agreed to send and "I sent the little old certificate he sent me back and told them I was supposed to get a bond, get a guarantee from them."

And he was asked:

"Q.They hadn't complied with the contract as to these material features?"

And he said:

"A.No, sir."

Plaintiff objected to the above and all similar testimony on the ground that parol testimony is inadmissible under Article 2276 of the Civil Code to vary or alter the written contract, and the Court admitted it subject to the objection, and said:

"But you cannot vary, alter or amend the contract sued on."

It will therefore be observed that defendant resists payment of the notes on three grounds, to-wit:

1.On the ground, as set out in the exception filed in limine, that plaintiff is a non-resident of the State and was doing business in this State in violation of Act 64 of 1918.

2.That said notes and contracts were obtaining through fraud.

3.On the ground that plaintiff failed to furnish the bond required by contract.

4.On the ground that plaintiff failed to send the salesman into the territory to sell the phonographs.

I.

Taking up these defenses in the order named, we find that Act 64 of 1918 is a penal statute providing that no persons shall carry on or transact any business in this State under an assumed name or any name other than his own, without registering with the Clerk of Court a certificate showing the name under which such business is or is to be conducted and the names of the persons owning or transacting such business with the post office address of such persons; and, in Section 5, that any person or persons conducting or transacting any business who shall fail to comply with the provisions of the act shall be guilty of a misdemeanor and subject to a fine of not less than $ 25.00 nor more than $ 100.00 and each day such person or firm continues such business shall constitute a separate offense.This is the only penality which the act provides.There is nothing in the act to indicate that in case a person or firm should violate its provisions his or its business transactions are stricken with nullity.

The testimony shows that the plaintiff firm is a commercial partnership domiciled at Iowa City, Iowa, and composed of Theodora O. Loveland and James L. Records, both domiciled at that place.So far as the record discloses these parties did not comply with Act 64 of 1918 by registering and defendant contends that their failure to do so strikes with nullity the business transacted in this State.

But the jurisprudence of this and other States is the other way.In construing similar statutes our courts have held that the purpose of such enactments is to prevent a firm from obtaining credit on the strength of an unauthorized name and not designed to prevent the organizers of it from recovering from a debtor.

Wolf vs. Youbert,45 La.Ann. 1100, 13 So. 806, 21 L. R. A. 772;Kent vs. Mojonier,36 La.Ann. 259.

And in the case of In re: Pelican Insurance Co., 47 La.Ann. 93517 So. 427, the Court said:

"The debtor of such a partnership or firm cannot plead the nullity of his engagement on account of the creditor's violation of the Statute where the only penalty fixed by the Statute for its violation is making it a misdemeanor and subjecting the offender to a fine."

In the case of Smith vs. Williams,152 La. 948, 94 So. 859, the Court had under consideration Act 64 of 1918, the act invoked by defendant in this case, and it said:

"It is a general rule that in the absence of statute to the contrary a person may transact business and execute his contracts under any name he may choose to adopt, provided * * * no fraud is committed."

(Citing29 Cy. 270andL. R. A. 1915D, 981 note.)

"And whether there was any fraud committed in this case is a matter of defense, but does not arise on the exception of no cause of action."

But in cases where there is a statute, on the subject it was stated that the courts are divided "as to whether or not the business so done is or is not so stricken with nullity as to preclude any recovery in such cases."

(Citing Hunter vs. Big Four Auto...