Larkin Co. v. Commonwealth

• Decision Date: 09 November 1916
• Citation: 172 Ky. 106
• Parties: Larkin Company v. Commonwealth.
• Court: Kentucky Court of Appeals

172 Ky. 106

Larkin Company v. Commonwealth.

Court of Appeals of Kentucky.

Decided November 9, 1916.

Appeal from Daviess Circuit Court.

LOUIS I. IGLEHEART for appellant.

M. M. LOGAN, Attorney General, and O. S. HOGAN, Assistant Attorney General, for appellee.

OPINION OF THE COURT BY JUDGE THOMAS — Reversing.

This is a penal prosecution instituted by the Commonwealth in the Daviess Circuit Court to recover the prescribed penalties for a failure on the part of defendant, Larkin Company (appellant), and its co-defendant, R. C. Thum, to comply with the provisions of section 571 of the Kentucky Statutes.

It is alleged in the petition that "The defendant company and defendant Thum are on this date, and have been continuously for more than thirty days before this date, carrying on business in this state and in the city of Owensboro, in Daviess County, their business being that of advertising and distributing certain soaps, perfumes, furniture and other articles of merchandise, and employed agents to sell, advertise and distribute same."

It is shown that the defendant, Larkin Company, is a foreign corporation, and not an insurance company, and that it failed to comply with the provisions of the statue by filing with the secretary of state the statement therein required showing the name or names of an agent or agents upon whom process against it might be served.

A written answer was filed, the first paragraph of which was a general denial, and amounted only to a plea of not guilty. The second paragraph set out in detail the acts of the defendant showing that the transactions out of which the prosecution grew, according to the contention made, did not constitute "doing business" in the state within the meaning of the statute, but that the same was purely and simply interstate commerce transactions, and were consequently such that the state could not regulate by any kind of impositions, including the one prescribed by the statute, supra.

The second paragraph was not replied to by the Commonwealth, and complaint is made of this on this appeal; but we are not inclined to look upon this contention as possessing merit. There was no necessity of a written answer, as all that was required of defendants was the entering of a plea of not guilty, the same as to a prosecution by indictment. This was effectually presented by the first paragraph of its answer, and the second paragraph thereof was but a pleading of its evidence and wholly unnecessary, the issue having been made by the first paragraph. Upon the trial, the jury by its verdict found the defendant, Thum, not guilty, but found the appellant guilty, fixing its fine at $500.00, upon which judgment was rendered, and this appeal is prosecuted to reverse that judgment.

The principal office of the appellant is in the city of Buffalo, New York, and it handles a great variety of articles for sale, ranging from the smallest to the largest. It has various branch offices located in different parts of the United States, and from each of which certain prescribed territory is supplied with its goods, but the territory covered by Daviess County is supplied from the head office at Buffalo, New York. Its method of doing business is best told by its two witnesses connected with the home office, and whose depositions were taken on its behalf. When asked regarding this point these witnesses testified:

"The business of the defendant Larkin Co. in Daviess County, Kentucky, and in Owensboro, Kentucky, has been exclusively conducted and carried on by and through mail orders. Customers in Daviess County, Kentucky, and Owensboro, Kentucky, mail their orders to Buffalo. If, through a mistake or misunderstanding, they mail orders to any of the Larkin branches the orders would, by regular office routine, be transmitted to Buffalo. Delivery is made by means of one of the forms of transportation previously referred to, that is, freight express or parcel post. Sometimes a customer will have others join with her in sending for goods, in which cases the goods are prepared for shipment in the fewest number of packages for the sake of economy, and shipped in the name of the customer who transmitted the order to us. The consignee then breaks bulk and distributes the goods pursuant to the individual orders. That is our regular routine, and business from Daviess County, Kentucky, and Owensboro, Kentucky, is handled in that way."

It is shown that the company has adopted a method of advertising its goods, called in the record "traveling showrooms," and one of these was in Owensboro at the time the matters occurred out of which this prosecution grew, it being in charge of the defendant, Thum. It is further shown that the traveling "showroom" remained in one place not exceeding five or six days. It contained a great many samples of various articles handled by the appellant, and the public were invited there for the purpose of inspecting them, that the goods might, in this manner, be more effectually advertised than through the usual method of catalogue or circular, although the latter mode was adopted and in use by the appellant. It furthermore appears that the "showroom" did not pretend to be, nor was it, a regular store at which articles could be purchased; that it was only for the purpose of exhibition, and, excluding the contention of the Commonwealth, to which we shall hereafter refer, it is not shown that any articles were sold from this "showroom" while in Owensboro. On the contrary, all goods were sold by orders sent to the house at Buffalo, and, when approved, the goods were shipped to the person making the order. Sometimes they would be what are called club orders. The one getting up such an order would receive a premium, and the order would contain articles desired by a number of persons, but the shipment would be made to the one getting up the club, who would accompany the order with a remittance for the full amount of it. Obviously such transactions are interstate commerce ones, only, and insufficient to support a charge against the defendant of...