International Text-Book Co. v. Gillespie

• Decision Date: 22 June 1910
• Citation: 229 Mo. 397,129 S.W. 922
• Parties: INTERNATIONAL TEXT-BOOK CO. v. GILLESPIE.
• Court: Missouri Supreme Court

129 S.W. 922

229 Mo. 397

INTERNATIONAL TEXT-BOOK CO. v. GILLESPIE.

Supreme Court of Missouri, Division No. 1.

June 22, 1910.

1. COURTS (§ 97)—DECISIONS OF FEDERAL SUPREME COURT — CONCLUSIVENESS — "ENGAGED IN INTERSTATE COMMERCE."

The decision of the federal Supreme Court that a foreign corporation conducting a correspondence school is "engaged in interstate commerce," within the federal Constitution, is conclusive on the state courts.

2. CORPORATIONS (§ 642)—FOREIGN CORPORATIONS—"DOING BUSINESS" IN STATE.

A foreign corporation conducting a correspondence school by soliciting students in Missouri by local agents, who collect and forward the tuition, and by intercourse by correspondence between the corporation and its students and agents, and by the transportation of needful books, papers, and apparatus, is "doing business" in Missouri within Rev. St. 1899, §§ 1024-1026 (Ann. St. 1906, pp. 886-890), requiring foreign corporations to obtain a certificate to do business in the state, in order to sue in the courts of the state.

3. COMMERCE (§ 46)—INTERSTATE COMMERCE—STATE REGULATION—VALIDITY.

The business of a foreign corporation conducting a correspondence school, by soliciting students in Missouri by local agents who collect and forward tuition fees, and by intercourse by correspondence between the corporation and its students and agents, and by the transportation of needful books, papers, and apparatus, is exclusively interstate business, governed by the federal Constitution and laws, and Rev. St. 1899, §§ 1024-1026 (Ann. St. 1906, pp. 886-890), requiring a foreign corporation to obtain a certificate to do business in the state, etc., are void so far as they apply to it.

4. CORPORATIONS (§ 661)—FOREIGN CORPORATIONS—RIGHT TO SUE.

A foreign corporation, having a valid cause of action against a citizen of the state, may sue him thereon in the courts of the state, provided a citizen of the state may do the same, notwithstanding Rev. St. 1899, § 1026 (Ann. St. 1906, p. 890), requiring a foreign corporation to obtain a certificate to do business in the state in order to sue in the courts of the state.

5. COMMERCE (§ 69)—INTERSTATE COMMERCE—STATE REGULATION—VALIDITY.

The provision in Rev. St. 1899, § 1025 (Ann. St. 1906, p. 888), which requires a foreign corporation, carrying on solely interstate commerce in Missouri, to make out, deliver, and file with the Secretary of State a statement as to its property and business within the state and to pay a license tax thereon, is unconstitutional.

Appeal from St. Louis Circuit Court; D. D. Fisher, Judge.

Action by the International Text-Book Company against Charles R. Gillespie. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

This suit was instituted by the appellant, a foreign corporation, against the respondent before a justice of the peace in the city of St. Louis to recover the sum of $61.20, alleged to be due it on a certain contract mentioned in the complaint filed with the justice.

A trial was had before the justice, which resulted in a judgment in favor of the respondent, and from that judgment the appellant appealed to the circuit court. The trial had in the latter court also resulted in a judgment in favor of the respondent, from which the appellant duly appealed to this court.

The facts will sufficiently appear from the findings made and filed in the cause by the trial court, which are as follows:

"The court finds the facts in the case to be as follows:

"That the plaintiff is a corporation organized and doing business under and by virtue of the laws of the state of Pennsylvania, and is authorized among other things to originate, write, compile, illustrate, edit, publish and sell instruction papers, text-books, drawing plates, periodicals, magazines, pamphlets, articles, and letters for the dissemination of literature, technical education, and other information; that the principal executive officers of said corporation reside in Pennsylvania and exercise their functions as such at Scranton; that the plaintiff conducts what it designates as international correspondence schools.

"Its method of conducting such schools is to furnish students in various parts of the country with text-books and written instruction, and question papers are delivered to the students from time to time through the United States mails; that such instruction papers are furnished for pay by parties with whom the plaintiff makes written contracts; that all the contracts of said plaintiff for scholarship with parties residing in this state are addressed by the proposed students to the plaintiff at Scranton, Pa., and are subject to final acceptance or rejection by the officers of said plaintiff there; that the plaintiff conducts what it designates as international correspondence schools; that all instruction and question papers of said corporation are prepared at Scranton, and are sent from there through the mails to the respective students of the plaintiff residing in this state; that the money paid by such students on account of instruction or scholarships are received, in most cases, in the first instance, by agents of the plaintiff called solicitors or representatives of the district in which the students reside and thereupon remitted by such solicitor, or representatives, to the superintendent of the plaintiff at Cincinnati, Ohio, and deposited in a bank at Newport, Ky., to the credit of the plaintiff; that the text-books used for instructing students after their contracts are accepted are sent by the plaintiff from Scranton direct to the student as provided in said contract; that offices or agencies of the plaintiff are maintained in this state for the purpose of furnishing and conducting the sale of scholarships and securing the purchase thereof in the manner hereinafter set forth; that the plaintiff's method of doing business is to divide the country in which it operates into districts and the districts into divisions. The districts are put under the supervision of a local superintendent, and under him, in each division in each district, is a division superintendent, and under each such division superintendent are three or four solicitors.

"Plaintiff, some years ago, established the `St. Louis district,' consisting of the state of Missouri, a part of Illinois, and a part of Arkansas, and divided this state into some 20 divisions, in 9 or 10 of which they have division superintendents, with three solicitors under each, all of whom reside in this state and in their respective divisions, their work being confined to their respective divisions. The city of St. Louis is divided into three divisions, in each of which plaintiff maintains an office occupied by the division superintendent and the solicitors. In these offices the plaintiff keeps for display advertising matter, text-books, instruction papers, and so forth; that the plaintiff maintains one principal office in the city of St. Louis, which is occupied by its chief representative or district superintendent, who has general control over the business of the plaintiff in the St. Louis district. He makes the agreements for the employment of division superintendents and solicitors, and when such agreements have been reached the written contract of employment in pursuance thereof is signed here by the employé and forwarded by said superintendent to the company at Scranton for signature, and when so signed it becomes binding. He has a general supervision over all these employés and directs and superintends their work. Plaintiff has in addition to the above in its employ in the city of St. Louis, in its various offices, stenographers and clerks in its charge, solely occupied in its respective duties as plaintiff's employés. All of the above-mentioned employés of the plaintiff are residents of the state of Missouri and render all services in behalf of plaintiff's business solely in the localities in the divisions to which they are assigned. That none of the above-mentioned employés travel in behalf of the plaintiff's business out of the several divisions to which they are assigned, and none of them are traveling salesmen or drummers.

"That plaintiff conducts its business in this state as follows: The canvasser or soliciting agent attached to one of the divisions of plaintiff goes among the residents of each division and solicits applications for instruction under plaintiff's correspondence schemes. The canvasser, upon finding one who is willing to become a student, secures the signature of the student to an application blank and at the same time collects from the signer a sum of money to be credited as part payment of the entire charge for the course of instruction selected by the prospective student. The signed application thus obtained is forwarded by the canvasser to the home office of the plaintiff, at Scranton, Pa., and a duplicate copy thereof turned into the office of the general superintendent in St. Louis and another copy retained by the canvasser himself. The money secured by the canvasser is forwarded by him to the division treasury office at Cincinnati, Ohio, and a memorandum of the collection turned into the general superintendent in St. Louis. If the application forwarded by the canvasser to the home office is in due accord with plaintiff's instructions, the same is approved by plaintiff, and the first installment of instruction and question papers pertaining to the course selected is forwarded to the student by mail. That upon the receipt of the instruction papers the student prepares his answers to the questions propounded in the papers, makes in writing such answers as he thinks proper, and asks such questions and makes such comments as to him may seem fit upon such branches of the subject as he may desire further or more particular instructions, which he forwards by mail to Scranton, and the instructors of the company at Scranton forward through the mails to him such further...