Jonesboro Trust Company v. Nutt

• Decision Date: 03 May 1915
• Docket Number: 360
• Parties: JONESBORO TRUST COMPANY v. NUTT
• Court: Arkansas Supreme Court

176 S.W. 322

118 Ark. 368

JONESBORO TRUST COMPANY v. NUTT

No. 360

Supreme Court of Arkansas

May 3, 1915

Appeal from Craighead Circuit Court, Jonesboro District; J. F Gautney, Judge; affirmed.

STATEMENT BY THE COURT.

Appellant brought this suit in the justice court against E. K. and S M. Nutt, upon two promissory notes for $ 150 each, dated February 3, 1913, one due April 3 and the other June 3, after date.

Defendants failed to appear in the justice court and judgment by default was rendered against them from which they appealed.

In the circuit court they answered, alleged that the notes sued on were given as consideration for the sale and delivery of portable pantries, a patented article, and the exclusive right to sell same in Greene County and that they were void not being executed upon a printed form as required by law. Sections 513, 516, Kirby's Digest.

Also that the consideration for the notes had failed and that the trust company was not a bona fide purchaser thereof.

The notes sued on were exhibited with the complaint and are alike, except as to date of payment, and read as follows:

"$ 150.00 Jonesboro, Ark., February 3, 1913.

June 3 1913, after date, for value received, we promise to pay to the order of W. J. Gooch, One Hundred and Fifty Dollars. At the Bank of Jonesboro, with interest at 8 per cent per annum from date until paid. If the interest be not paid when due, to become as principal and bear the same rate of interest. The makers and endorsers of this note hereby severally waive presentment for payment, notice of nonpayment, protest, and consent that time of payment may be extended without notice thereof.

Due__

P. O.__

No. 3549.

__Miles__."

E. K. Nutt.

S. M. Nutt.

The testimony shows that appellees made a written contract with the Portable Pantry Company, of which W. J. Gooch was manager, by which said company appointed E. K. Nutt exclusive agent or dealer to sell the Portable Pantry in Greene County, with the right to select another county of similar size if the number of pantries contracted to be sold could not be sold in that county. This contract gave to said the sole and exclusive privilege of selling the Portable Pantry until February 3, 1914, with power to transfer any or all parts of the same.

It was stipulated that he, as such dealer, should have the privilege of ordering from the factory, at the prices stipulated in the manufacturer's, The Cincinnati Stamping Co.'s, contract with the Portable Pantry Company, a copy of which was also given him.

He was to confine his operations to the field specified and not to sell the pantry for less than the designated prices, retail and wholesale. After canvassing the territory thoroughly, he was to place the pantry on sale '"with as many merchants as he may see practicable in said section," furnishing them at the wholesale price and have the profits derived from such sales, which were to remitted to him by the Cincinnati Stamping Co. after being received by it. He was required to notify the Portable Pantry Company of all merchants contracted with and of any other parties to whom he gave authority to order pantries from the factory, stating the price at which they were to receive the goods, etc.

It was also stipulated: "As an evidence of good faith, and determination on the part of said dealer to carry out the intents and purposes of this appointment, he has this day made an advance payment of $ 2 each on Portable Pantries aggregating $ 300, the receipt of which is hereby acknowledged, for which we have issued to him 150 Portable Pantry Coupons No. 116-E and he is hereby authorized to use said coupons in ordering pantries from factory, and we guarantee that the Cincinnati Stamping Company will accept same at $ 2 each when accompanied by $ 6 in payment for one Portable Pantry," and the notes sued on were accordingly executed to make the advance payment of $ 300.

The contract of the Portable Pantry Company with the Cincinnati Stamping Company of Cincinnati, Ohio, relating to the manufacture of the portable pantries contains this stipulation:

"We agree and hereby obligate ourselves to the Portable Pantry Company, to furnish same in good order, f. o. b. Cincinnati, Ohio, at $ 10 each, or at $ 8 each when order is accompanied by a portable pantry coupon.

We will furnish the Portable Pantry Company certain coupons covering all advance payments made to us by said company from time to time on this contract, and we will accept said coupons at their face value as part payment on separate pantries shipped to said company or its legal representatives, but only at the rate of one coupon with each pantry."

E. K. Nutt testified that he went to appellant Trust Company on the date the contract was executed, February 3, 1913, had a conversation with Mr. Hall, its cashier, and informed him of the execution of the notes and the consideration therefor. He did this because he knew Mr. Gooch with whom he had been working, had been selling other notes to the Trust Company, but had agreed with him that he would not sell these notes until a shipment of the pantries had been received. A copy of the letters patent issued to W. J. Gooch for the portable pantry was also introduced in evidence.

S. M. Nutt testified that he was the indorser of the notes and interested in the contract and also that the pantries were to be made in Cincinnati, Ohio, and the Portable Pantry Company was not an Arkansas corporation.

The cashier of the Trust Company stated that he knew W. J. Gooch, bought the notes from him on February 14, 1913, and had not had any conversation prior to that time with E. K. Nutt about them and did not know of any defense to the notes. He discounted the paper 10 per cent and first learned of the consideration for the notes some time after May 31.

It was admitted that both appellees are residents of the State and not merchants.

The court directed a verdict in favor of appellees and from the judgment thereon this appeal is prosecuted.

Judgment affirmed.

Baker & Sloan, for appellant.

The notes sued on do not come within the provisions of the statute, Kirby's Dig., § § 513, 516.

1. There was no sale of any article. The contract signed by appellee was a mere dealer's appointment. The notes were given not as consideration for such appointment, but for the purchase price of coupons. The transaction did not constitute a sale of any of the portable pantries. 1 Mechem on Sales, § 1; 27 Ia. 160, 173; 47 Ark. 460, 463. It was purely optional with appellee whether or not he would purchase any cabinet or cabinets. It was a mere option to buy. 28 A. 220, 159 Pa. 142; 120 Ia. 218, 94 N.W. 469, 470; 123 F. 9, 11; 28 Mont. 468, 72 P. 978, 981; 104 Ark. 459, 465; 82 Ark. 573; 78 Ark. 306; 171 S.W. 1183; 87 Ark. 400.

2. The statute by its own terms is applicable only to sales on credit. There was no sale on credit here, but, if it was a sale at all, it was partly for cash and partly on credit and the statute would not apply. The statute should be strictly construed and nothing should be taken by intendment.

3. The transaction was not shown to have been with a citizen of the State. A showing that one is a resident of the State is not proof that he is a citizen.

4. As to this transaction, the act would be unconstitutional as an attempted regulation of interstate commerce. 136 U.S. 326-328, 34 L.Ed. 455, and cases cited; 17 Am. & Eng. Enc. of L. (2 Ed.) 107, and cases cited; 227 U.S. 389, 33 S.Ct. 294; 135 U.S. 100; 34 L.Ed. 128.

T. A. Turner, for appellee.

1. The transaction constituted a sale within meaning of ...