Harrell v. Peters Cartridge Co.
| Decision Date | 21 January 1913 |
| Parties | HARRELL v. PETERS CARTRIDGE CO. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
Where a domestic mercantile corporation enters into a contract with a foreign manufacturing corporation, whereby the domestic concern agrees to handle the manufactured products of such nonresident corporation, and where it is provided in such contract that the domestic corporation shall purchase such products in its own name upon orders to be filled in another state by such foreign corporation, and that, when so purchased, the goods become the property of the domestic corporation, and such domestic corporation sells such goods throughout the state through its traveling agents held, that such transactions do not constitute "doing business" within the state by the nonresident corporation, but the transactions between the two corporations are purely interstate, and therefore service of summons upon the domestic corporation is not service on the foreign corporation.
Where a foreign manufacturing corporation having such a contract sends its traveling agents into the domestic state for the purpose of advertising the goods, and pushing the sales by giving exhibitions and demonstrations of the merits of such goods, and by assisting the agents of the domestic corporation in getting customers and orders for such goods such orders to be filled by the domestic corporation out of its stock, such acts or transactions on the part of such agents do not constitute "doing business" within the state by the foreign corporation, and service of summons upon the Secretary of State is not valid service on the foreign corporation.
Commissioners' Opinion, Division No. 2. Error from District Court, Oklahoma County; George W. Clark, Judge.
Action by Lafayette Harrell, by his next friend, Alice L. Nicum against the Peters Cartridge Company. From an order setting aside a judgment for plaintiff, he brings error. Affirmed.
M Fulton, of Oklahoma City, for plaintiff in error.
Wilson & Harris and John Tomerlin, all of Oklahoma City, for defendant in error.
HARRISON C. (after stating the facts as above).
The decisive question involved is whether the service had upon the Secretary of State was valid and binding against defendant. This question depends wholly upon the fact whether or not this defendant was "doing business" within the state within the meaning of the term.
Plaintiff in error contends that the Peters Cartridge Company, although a foreign corporation, was doing business within the state of Oklahoma through the Oklahoma City Hardware Company as its authorized agent, and that, having an agent within the state transacting business for the defendant and making contracts within the state for defendant, brought it within the meaning of the term "doing business" within the state, and, having designated no agent on whom service of process might be made, that service of summons upon the Secretary of State was valid under section 3, art. 1, Sess. Laws 1909, c. 10. On the other hand, it is contended by defendant in error that the Oklahoma City Hardware Company was not defendant's agent; that it had no agent in Oklahoma; that the Oklahoma City Hardware Company had no authority from defendant to transact business for it and in its name within the state and had not transacted business for it, but that the relations between defendant and the Oklahoma City Hardware Company were that of a local jobber purchasing goods as it needed them in job lots from defendant, and that the transactions between them were purely interstate in character; that being a nonresident of the state, and having no agent within the state authorized to make interstate contracts, and having no knowledge of such default judgment until so informed by disinterested party after the rendition of same, such service was invalid, and such judgment void for want of jurisdiction.
The facts are: That the Oklahoma City Hardware Company was a domestic corporation under the laws of Oklahoma with its place of business in Oklahoma City, and that defendant company was a foreign corporation organized under the laws of the state of Ohio with its manufacturing plant and principal office at Kings Mills, Ohio; that prior to the date of the injury in controversy the defendant company and the Oklahoma City Company entered into a contract or agreement by which the defendant agreed to sell its products to the Oklahoma City Company on terms and under conditions set forth in the contract which is headed as follows: "Agreement by and between the Peters Cartridge Company of Cincinnati, Ohio, first party, and Oklahoma City Hardware Company of Oklahoma City, Oklahoma, second party." The first paragraph of section 1 of such contract reads as follows: "That said first party agrees to sell goods of its own manufacture to said second party for its current needs at prices and on terms and conditions as stated below." The contract then gives the prices at which the goods were to be sold and delivered, then gives the terms upon which they are to be sold, then the conditions, which are as follows: * * *" The contract then details different kinds of goods and discounts to be allowed on same for payment in cash or within the terms mentioned in the contract, some to be paid for in 60 days, some to be paid for on the 10th of the succeeding month, and provides further: "Second party agrees that it will pay for all goods purchased under this agreement in strict accordance with the terms and conditions stated herein. * * *" It further provides that, on any invoice of goods remaining unpaid for 30 days after same became due, all unpaid invoices should thereupon become due, and all unfilled orders should be canceled; that the second party shall be protected against declining prices on any unsold goods shipped within 90 days immediately preceding such decline, provided the second party has complied with all the conditions of the contract, and, in consideration of the advantages of the terms and prices given, the second party agreed to push the sale of this line of goods, and further provided that the agreement might be terminated by either party upon written notice and that thereafter all unfilled orders should be null and void.
S. E. Clarkson, president of the Oklahoma City Hardware Company, being called as a witness in behalf of plaintiff, testified: The witness further testified that the Oklahoma City Hardware Company sent out its traveling salesmen to sell this and other lines of goods, and that the orders taken were sent in to the Oklahoma City Hardware house to be filled and were filled out of stock on hand the same as other orders, and in reference to orders taken by traveling salesmen sent out by the defendant company the same witness testified that such orders were also sent in to the Oklahoma City Hardware house to be filled by it out of its stock, and that such orders were so filled. The witness states: "We have our salesmen on the road, and they are covering the entire territory selling the goods for the Oklahoma City Hardware Company, and we are selling the Peters goods along with our other lines of stuff." The witness further stated that the profits to the manufacturer were outside of its retail profits; that the manufacturer's profits came out of the profits paid them for the goods by the Oklahoma City Hardware Company.
F. C Tutle, of Cincinnati, Ohio, secretary and treasurer of the Peters Cartridge Company, testified to having charge of all contracts and correspondence of said company with its customers, and that it had no other contract or understanding with the Oklahoma City Hardware Company than the written contract referred to. On cross-examination the witness was asked: The witness further testified that, in order to boost the sale of their manufactured products, it was their custom to send experienced salesmen into the territory of their jobbers to assist and educate the traveling salesmen of such jobber in selling their goods. He also testified...
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