J.R. Watkins Medical Co. of Winona, Minn. v. Coombes

• Decision Date: 24 July 1917
• Docket Number: 7419.
• Citation: 166 P. 1072,66 Okla. 126,1916 OK 886
• Parties: J. R. WATKINS MEDICAL CO. OF WINONA, MINN., v. COOMBES ET AL.
• Court: Oklahoma Supreme Court

166 P. 1072

66 Okla. 126, 1916 OK 886

J. R. WATKINS MEDICAL CO. OF WINONA, MINN., v. COOMBES ET AL.

No. 7419.

Supreme Court of Oklahoma

July 24, 1917

Syllabus by the Court.

A nonresident corporation, engaged in the manufacture and sale of certain proprietary preparations, toilet articles, etc entered into a written contract with a resident of Oklahoma whereby it was agreed that certain of its products should be sold and delivered f. o. b. at a point outside of the state and it should be shipped into Oklahoma and resold at retail within certain designated territory. Held, this did not constitute "transacting business" in the state within the provisions of section 1335, nor incur the penalty prescribed in section 1338, Rev. Laws 1910.

Though a principal in a guaranty contract might practice fraud upon his sureties in securing their signatures to the guaranty contract, unless knowledge of this was brought home to the guarantee in the contract, the sureties would not on this account be released from their liability to the guarantee in the guaranty contract, and evidence of declarations of the principal in the contract to his sureties at the time of securing their signatures to the guaranty contract, standing alone, is ineffectual to establish that the principal in the guaranty contract was the agent of the guarantee.

A party is bound in the appellate court as to the nature and form of the action by the theory upon which it was tried in the court below.

Commissioners' Opinion, Division No. 2. Error from District Court, Woodward County; James B. Collison, Judge.

Action by the J. R. Watkins Medical Company of Winona Minn., a foreign corporation, against George M. Coombes and another. There was a judgment for defendants, and plaintiff brings error. Reversed and remanded.

Parker & Simons, of Enid, for plaintiff in error.

Swindall & Wybrant, of Woodward, for defendants in error.

WEST C.

This suit was commenced by J. B. Watkins Medical Company of Winona, Minn., a foreign corporation, to recover an amount alleged to be due under a written contract of guaranty against George M. Coombes and L. B. Coombes for goods, wares, and merchandise sold and delivered to B. J. Coombes. Each of the defendants filed separate answers, consisting of a general denial and special defenses as to plaintiff engaging in business for profit within this state before complying with the statute of Oklahoma relative to permitting foreign corporations to do business in the state, and further on account of fraud which defendants claim that B. J. Coombes committed in securing their signatures to the guaranty contract, alleging that the said B. J. Coombes was the agent of plaintiff in procuring their signature to said contract of guaranty. To these separate answers plaintiff filed verified reply, and on the 2d day of December, 1914, cause went to trial to a jury, and on the 4th day of December, 1914, a verdict was returned into court by the jury in favor of defendants.

Motion by plaintiff for new trial was duly made and overruled, and exceptions saved, and cause was brought here upon case-made for review under a number of assignments of error, which are stated by plaintiff in its brief under four propositions, in support of its contention that court erred in rendering judgment for defendants, and that plaintiff is entitled under the pleadings and evidence to a judgment against defendants as prayed for in its petition. These four propositions, we think, may be stated under two heads, namely: First. Was plaintiff transacting business in the state of Oklahoma, in the sense that would require it to comply with provisions of section 1335, Rev. Laws 1910, regulating foreign corporations doing business in the state of Oklahoma? Second. Did plaintiff practice fraud upon the defendants in securing their signatures to the guaranty contract?

In the case of Dr. Koch Vegetable Tea Co. v. Shumann et al., reported in 42 Okl. 60, 139 P. 1133, where the court had under consideration the first proposition involved in this case as stated above, upon a very similar contract and upon conditions almost identical with the ones surrounding this contract, laid down the following rule in the first paragraph of the syllabus: "1. Corporations--Foreign Corporations--Actions--' Transacting Business.' A nonresident corporation, engaged in the manufacture and sale of certain proprietary medicines, entered into a written contract with a resident of Oklahoma, whereby it was agreed that certain of its products should be 'sold and delivered f. o. b.' at a point outside of the state, and should be shipped into Oklahoma and resold at retail. Held, this did not constitute 'transacting business' in the state, within the provisions of section 1335, nor incur the penalty prescribed in section 1338, Rev. Laws 1910."

In the body of the opinion the court used the following language:

"Under the terms of the written contract attached to plaintiff's petition, the plaintiff agreed to sell and deliver to Shumann certain medicines at prices agreed upon f. o. b. Winona, Minn., and Shumann agreed to sell the goods in a certain designated territory in Oklahoma. It does not appear where the contract was entered into, but that it was entered into between Dr. Koch Vegetable Tea Company, a Minnesota corporation, with principal offices at Winona, in said state, and M. W. Shumann, of Guthrie, Okl. The action was to recover $794.39 for goods sold under this contract, and the action against the other two defendants was on a written contract of guaranty, whereby they guaranteed the faithful performance of the contract between the Minnesota corporation and Shumann. The sole question raised in this appeal is whether or not the defenses set up by the guarantors that the plaintiff, being a nonresident corporation, and having failed to comply with the statutes of Oklahoma and the Constitution of the state relative to foreign corporations doing business in this state, was denied the right to enforce its contract in the courts of the state. It does not appear from the record in this case that the plaintiff corporation was doing business in the state of Oklahoma, so as to come

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