Heinrich Chemical Co. v. Herman, 14504.

• Court: Court of Appeal of Missouri (US)
• Citation: 251 S.W. 162
• Docket Number: No. 14504.,14504.
• Parties: HEINRICH CHEMICAL CO. v. HERMAN et al.
• Decision Date: 08 January 1923

251 S.W. 162

HEINRICH CHEMICAL CO. v. HERMAN et al.

No. 14504.

Kansas City Court of Appeals. Missouri.

January 8, 1923.

Rehearing Denied April 30, 1923.

Appeal from Circuit Court, Chariton County; Fred Lamb, Judge.

"Not to be officially published."

Action by the F. einrich Chemical Company against B. Herman and another. Judgment for defendants, and plaintiff appeals. Reversed and remanded, with directions.

Roy McKittrick, of Salisbury, for appellant.

Jno. D. Taylor, of Keytesville, for respondents.

TRIMBLE, P.J.

This is an action upon what is termed a "bond," wherein the defendants guaranteed the payment of all indebtedness to be incurred by Edwin Herman under a contract hereinafter discussed. The case was tried before the court without a jury, and judgment was rendered for defendants, no instructions or declarations of law being asked or given. Plaintiff appealed.

Appellant is a foreign corporation having factories and sales departments in Minneapolis, Minn., and is engaged therein in manufacturing and selling certain patent medicines,. remedies, and merchandise. The contract hereinabove mentioned was one wherein plaintiff agreed that it would sell and deliver to Edwin Herman, f. o. b. cars at Minneapolis, such of its manufactured products as Herman should from time to time order for sale by him in the north half of Howard county, Mo., such sales to Herman by plaintiff to be at wholesale prices shown by invoice of each shipment.

The contract provided that Herman would continuously devote his exclusive time and best efforts to sell in the above territory; that he would keep record of all sales made and amounts received therefor, make collections, mail reports not later than Monday of each week, and on said day remit to plaintiff a sum equal to at least one-half of the amounts received from cash sales and collections. Herman was to pay all transportation charges and all selling expenses. Plaintiff was not to contribute to the expense of Herman's business nor to have any interest in accounts due him. The contract could be canceled by either party at any time by written notice deposited in the mails properly addressed. Upon cancellation Herman could return within 30 days any products which were in as good condition as when sold to him, and plaintiff was to repurchase them at the invoice price and pay or credit Herman therefor less delivery charges, if any. If the returned products were not in good condition, but could be made so, plaintiff was to deduct the cost thereof. Nothing disposed of by Herman or sold by him on time or otherwise could be returned or repurchased. 'Upon cancellation and return as above provided, Herman was to pay the full invoice price of everything purchased by him less amounts previously paid.

Before any goods could be sold to Herman he was required to furnish the "bond" of two persons guaranteeing the payment of any indebtedness he might incur under said contract. Herman signed the contract, and defendants executed the contract of guaranty in Missouri, and the two were sent, subject to plaintiff's approval, to Minneapolis, where the contract was signed, and it and the bond were approved and accepted by plaintiff; and thereafter, at Herman's request and pursuant to the contract, the plaintiff furnished to Herman supplies to the amount of $595.85.

Herman received the goods, but did not sell, or undertake to sell, any of the goods, and "after a while" packed the goods and delivered all of them to the Wabash Railway Company at Salisbury, Mo., to be shipped and delivered to plaintiff; but he did not pay the freight for such shipment, nor did he pay anything for said goods. On the grounds that the freight on the goods returned was not paid, that the goods were frozen and damaged in transit, and that Herman had not complied with his contract, the plaintiff refused to take the goods back, or to receive them; and the railroad company afterwards sold them to pay the freight charges. The said Herman not paying for the goods, demand was made upon the guarantors, and, upon their refusal to pay, this suit was brought against them.

The case was tried upon an agreed statement of facts and certain additional evidence offered by defendants, which will be hereinafter referred to. It was agreed that plaintiff had no license to do business in Missouri as a foreign corporation, and the defense is based on this fact.

It is well settled that statutes requiring a foreign corporation to take out a license to do business in the state and denying the right to therein enforce contracts made in the course of such business if the license is not first secured, do not, and cannot, apply to transactions which are interstate commerce; and that such statutes do not limit the right of foreign corporations to make contracts in the state for the carrying on of commerce between the states. Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137; Albertype Co. v. Gust Feist Co., 102 Tex. 219,114 S. W. 791; Watkins Medical Co. v. Holloway, 182 Mo. App: 140, 148-150, 168 S. W. 290.

Was the transaction between plaintiff and defendant a mere sending of the goods to Missouri for sale therein by plaintiff through Herman acting as its agent, or was it a sale in Minnesota of the goods to Herman in order that he might himself retail them in Missouri? If the former, then a license to do business was required, and the contract and bond obtained in connection with and for the purpose of carrying on that business, and constituting a necessary part thereof, are unenforceable, since no license for such retail sale by plaintiff in Missouri was obtained. If, however, the transaction' was a sale to Herman in Minnesota, and the subsequent reselling in Missouri contemplated in the contract were to be his sales, then the plaintiff was not "doing business" in Missouri in such sense as to require a license, and the failure to obtain one can constitute no defense to this suit.

Under the terms of the contract, the transaction was a sale in Minnesota by a citizen of that *state to a citizen of Missouri. The title in the goods passed to Herman when they were put on board the cars, and no lien was retained thereon or title reserved by plaintiff whatever. While the goods were bought for the purpose of being retailed in Missouri, yet this was Herman's business. The sales were to be his sales. Plaintiff had no part in the expense thereof nor interest in the accounts due Herman by reason of such sales, nor could plaintiff share in the profits thereof or be called upon to bear any part of the losses he sustained or the expense he incurred, but he was to bear all such expense including all transportation charges. Nor could he bind or obligate plaintiff in any way. It was agreed and stipulated at the trial that the freight from Minneapolis was to be paid by Herman and that the plaintiff "had no control, interest, or title in said goods after the delivery of said goods f. o. b. Minneapolis, Minn."

The contract is almost identical with that in the case of Dr. Koch, etc., Tea Co. v. Malone (Tex. Civ. App.) 163 S. W. 662, wherein it was held that the contract was one of sale and not of agency, and the transaction thereunder was one in interstate commerce and not a doing of business by the plaintiff in the state of the vendee's residence. Substantially...