Item Co., Ltd. v. Shipp

• Decision Date: 07 December 1925
• Docket Number: 25250
• Citation: 106 So. 437,140 Miss. 699
• Court: Mississippi Supreme Court
• Parties: ITEM CO., LIMITED, v. SHIPP et al. [*]

106 So. 437

140 Miss. 699

ITEM CO., LIMITED, v. SHIPP et al. ^[*]

No. 25250

Supreme Court of Mississippi

December 7, 1925

Division A

Suggestion of Error Overruled Jan. 4, 1926.

APPEAL from circuit court of Forrest county, HON. R. S. HILL, Judge.

Action by the Item Company, Limited, against W. C. Shipp and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Robt. L. Bullard, for appellant.

The principle involved in a decision of this case is of importance not only to the plaintiff but to every publishing company issuing newspapers and other publications for circulation and sale in this state. It involves also the right of every non-resident corporation whatever to sell its products in the state through agents and local dealers. The proposition is this:

Can the plaintiff, whose business it is to publish a daily newspaper in New Orleans, La., maintain a suit in the courts of this state on a contract for the sale of its newspapers to a local dealer, to be by him sold to its subscribers and others, for his own profit, without having filed a copy of its charter if it is a non-resident corporation, with the secretary of state, and payment of the fees as provided by section 935, Code 1906, as amended by chapter 92, Laws of 1916?

The plaintiff had a right to do all that the special plea alleged that it did, or was doing. It alleged that the plaintiff was "engaged in business in the state of Mississippi selling newspapers and perhaps other periodicals in said state, for profit, through agents and news dealers in the state of Mississippi." Such and no other is the business alleged to have been done in this state. There is no allegation that the plaintiff did more than sell its newspapers in this state through agents and news dealers.

Now there is not a corporation in the world that has not the right to sell its products in this state through agents and dealers. To deny such right would not only violate interstate commerce but to enforce such denial would paralyze the state and bring its inhabitants to starvation within sixty days.

Appellees rely on Quartett Music Co. v. Haygood, 108 Miss. 755, 67 So. 211. In the Haygood case the plea alleged that the Quartett Music Co. had employed Haygood to manage and conduct for it a branch house in the city of Tupelo. It was never held in that case that the plaintiff did not have the right to sell its music publication in the state through agents and dealers, but that to conduct a branch house in this state, wherein it conducted its business generally was in violation of the statute. The case of Harelston v. Louisiana Bank, 91 So. 423, clearly distinguishes the Haygood case from cases like this.

The Haygood case is unsound, is not supported by sound reason or authority and ought to be overruled. It stands alone in our reports and I have not been able to find a case anywhere on a like statute holding that it denies non-resident corporation, in default of its provisions, access to courts of justice. If there is another, before or since, I have not found it nor found it cited. One of the cases which the writer of that opinion must have had in mind points out a universal exception to the general rule, the recognition of which would have led to a different result in the Haygood case. That is Bohn v. Lowrey, 27 So. 604.

The act in question falls squarely within the exception therein pointed out. It does not forbid the nonresident corporation to do business in this state, nor penalize the business done, but provides that those doing business herein shall file a copy of its charter with the secretary of state and pay the fees provided; the object of filing the charter being that it may be ascertained therefrom what fees are payable. It is for a failure to file a copy of the charter and pay the fees that a penalty is imposed. No action of the corporation is penalized or made unlawful; only its non-action in this respect subjects it to the penalty.

The purpose of the act is not to prevent it from doing anything, and to hold that the legislature intended to penalize the non-complying corporation further than is contained in the act itself is to read something into it not even implied by its language. This court has so construed the act in Springfield Grocery Co. v. Devitt, 126 Miss. 169, 88 So. 497.

The lower court should have granted our request for a peremptory instruction, and entered judgment for the plaintiff in the amount sued for, with attorney's fees.

Currie & Currie, for appellees.

The question is whether, under the facts of this particular case, the Item Company, Ltd., was "doing business" in this state. The Item Company, Ltd. is a foreign corporation. It had not filed its charter of incorporation, or its certificate of incorporation in the office of the secretary of state of the state of Mississippi, and paid the fees required by the statute of the state of Mississippi.

It is therefore manifest at the outset that if the appellant was "doing business" in the state of Mississippi when the debt herein sued for was created, and if said debt originated in and grew out of said business, it is precluded on the grounds of public policy from maintaining this suit in the courts of this state.

Now what are the facts? They are: 1. That A. W. Case was the managing agent of the appellant in this state. 2. He established agents, agencies and news stands in this state for the sale of a paper in this state. 3. He engaged in, looked after and met competition in such establishment and sale of the paper in this state. 4. In meeting competition in this state he altered the prices of the paper in this state and paid bonuses. 5. He adjusted disputes growing out of accounts in this state. 6. He collected and receipted for accounts in this state. 7. He sold and delivered papers to customers and agents and agencies in this state for the Item Company, Ltd. 8. He transacted every phase of business in this state from establishing news stands in this state at which to sell the New Orleans Item in this state, up to, or down to (whichever way you please to go) collecting accounts and conducting lawsuits for the Item Company, Ltd. 9. The Item Company, Ltd. itself received and accepted checks drawn on local banks in the city of Hattiesburg, county of Forrest, state of Mississippi, and collected the same from said banks. 10. The appellant itself delivered the newspapers in bails or bundles to the appellee, Shipp, on the depot platform at Hattiesburg, in Forrest county, Mississippi, the point of destination, all charges prepaid, and the appellee, Shipp, carried the papers onto the streets where he sold them. If this be not "doing business" in this state, then we ask how may business be done in this state?

In Hat-Sweat Mfg. Co. v. Davis Sewing Machine Co. (U. S.), 31 F. 294, 296, it was held: "The agent having the management and control of the department of business of a foreign corporation from which the cause of action arose was the 'managing agent.'" See also Ives v. Metropolitan Life Ins. Co., 78 Hun, 32, 28 N.Y.S. 1030.

A test of whether the appellant was "doing business" in this state would be whether A. W. Case was such agent as that service of process might lawfully be served upon him in a suit filed in this state against the Item Company, Ltd., and bearing in mind the established facts, we cite section 4094, Hemingway's Code, section 920, Code of 1906, and Saxony Mills v. Waggoner, 94 Miss. 233, 47 So. 899, in which case it was held that the term "agent" as used in the statute means only an agent vested with some general authority and discretion and not a mere employee. Case was such an agent as falls completely under and squarely within the definition of the word "agent" as laid down by this court in the Saxony Mills case.

It is so perfectly manifest from the established facts of this particular case that the appellant was "doing business" in this state that it would seem altogether unnecessary to cite authority defining what constitutes "doing business," but by way of applying the law to these facts see St. Louis Southwestern Ry. Co. of Texas, plaintiff in error, v. Robert Alexander, 57 L.Ed. (U.S.) 486; Pennsylvania Lumbermen's Mutual Fire Insurance Company v. Charles C. Meyer, 49 L.Ed. (U.S.) 810; Connecticut Mutual Life Insurance Company, plaintiff in error, v. Linda Y. Spratley, 43 L.Ed. (U.S.) 569.

The case of Quartett Music Co. v. Haygood, 108 Miss. 755, 67 So. 211, is directly in point, and under the decision of this court in that case the appellant cannot, contrary to the public policy of this state, maintain this suit in its courts.

Counsel for the appellant cites City Sales Agency v. Smith, 88 So. 625, and quotes from that case the language of Justice HOLDEN, with which we have no quarrel to make, but it will be borne in mind that what this learned justice said in that case was with reference to restrictions or burdens upon interstate commerce, and can have no application to the facts in the case at bar for the reason that the testimony in the case at bar is conclusive that the transportation had completely ended, and the papers had been delivered in the original and unbroken bundles on the platform of the railroad company at its station in the city of Hattiesburg, the destination of the shipments, and that they were there delivered to the appellee, Shipp, and that he brought them onto the streets in the city of Hattiesburg and sold them.

Having failed to comply with the requirements of the statutes of this state, the reasonable requirements, the requirements imposed upon domestic corporations, or corporations formed in this state, it is contrary to the public policy of this state to permit the appellant to sue in the courts...