Livestock Services, Inc. v. American Cyanamid Co., 42363

• Court: Mississippi Supreme Court
• Writing for the Court: LEE
• Citation: Livestock Services, Inc. v. American Cyanamid Co., 142 So.2d 210, 244 Miss. 531 (Miss. 1962)
• Decision Date: 11 July 1962
• Docket Number: No. 42363,42363
• Parties: LIVESTOCK SERVICES, INC. v. AMERICAN CYANAMID COMPANY.

Page 210

142 So.2d 210

244 Miss. 531

LIVESTOCK SERVICES, INC. v. AMERICAN CYANAMID COMPANY.

No. 42363.

Supreme Court of Mississippi.

July 11, 1962.

Keady, Campbell & DeLong, Greenville, for appellant.

Wynn, Hafter, Lake & Tindall, Greenville, for appellee.

LEE, Presiding Justice.

Livestock Services, Inc., a Mississippi Corporation, brought this suit in the Circuit Court of Washington County against American Cyanamid Company, a corporation, chartered, organized, and existing under the laws of the State of Maine. The plaintiff charged, in effect, that, in the Spring of 1961, it purchased a quantity of certain anthrax vaccine, manufactured and distributed by the defendant company and warranted by it to be fit and effectual as a remedy against anthrax; that the plaintiff injected the said vaccine into its cattle, in accordance with instructions issued by the defendant; that said vaccine was harmful and injurious to its cattle; and that it sustained substantial damage to its cattle as a result of the use of the same. Consequently, it demanded judgment against the defendant for the damage resulting from the alleged breach of warranty. Process for the defendant was served on the Secretary of State.

The defendant, appearing specially and solely for the purpose of objecting to the jurisdiction of the court, in its motion to dismiss, set up in effect that it had not qualified to do business in this state, and that it was not so engaged when the suit was filed; that it neither had been found nor had it been served with process in Washington County; that it was not amenable to process in the courts of this state; and that the court had not acquired nor could it acquire jurisdiction over the defendant under any statute of this state.

John Morrison, Jr., who had been with the company sixteen years, working up from shipping clerk to branch manager, and who had been manager of the New Orleans branch of the company for four years, testified that the defendant had no office, warehouse, stock of goods, bank deposit, or executive officer in the State of Mississippi. Its only employees were ten salesmen, who were stationed in different parts of the state. No transaction by the defendant in Louisiana was ever closed in Mississippi. No salesman in this state had authority to receive or accept orders; but the same had to be forwarded to the proper branch of the company either in New Orleans or St. Louis. Remittances or payments were made in the same way. The salesmen for the division, known as Lederle, would call on doctors and point out the benefits of using the company's products, explaining what could and could not be expected. This promotional work was a part of the job of selling. Sometimes demonstrations were made. New products were introduced generally by leaflets sent through the mail or delivered by salesmen. Sometimes technical representatives would go to the experiment stations and also to Mississippi State University in order to bring out the fine points on which they were seeking tests. If a complaint was received, it would be passed on to the proper one in authority. There was no final authority in Mississippi on any deal that the defendant might make. A map, referred to as the 'Atlas', showed the location of all of the defendant's laboratories, plants, offices, warehouses, and sales offices, and none of these appeared to be in this state.

The plaintiff, in opposition to the motion to dismiss, offered, as a witness, Hugh Brannon, who had worked for the defendant a number of years. This man was connected with the agriculture division and was engaged in promoting and selling the company's products. He called on wholesalers, retailers, manufacturers, and formulators, trying to stimulate the sale of the defendant's products. He could make no sale personally. He could take an order orally or over the telephone, but he did not write it up. He had to take the matter up with the proper authority out of the state. If he received a complaint from a customer, he would get in touch with the Dallas office, and a technical man would visit the particular claimant. When the company has a new product, its representatives sometimes go to the experiment stations in an effort to get it tested. But these people make no sales. Sometimes demonstrations are conducted for the benefit of farmers; but no sale is ever closed in Mississippi. The salesman merely sells and promotes, sending the proposal to the proper office outside of the state.

Harmon H. Barlow, an employee of Goyer Paint and Veterinary Drug Department, Greenville, Mississippi, testified that he placed with the New Orleans branch 95 per cent of his orders either by phoning or mailing. The balance he probably gave to Don Reagan, a field man of the company. The witness had a complaint from Mr. Graves, representing the plaintiff, and he reported it to the New Orleans office. In answer to that complaint, Dr. Cook, a veterinarian and employee of the defendant, came from Dallas to see him, seeking a contact with Mr. Graves.

The evidence showed that the defendant qualified to do business in this state and appointed a resident agent for process on December 2, 1940; and that subsequently, on December 12, 1941, it filed its certificate that it had ceased the transaction of business in this state, and had withdrawn from operation in Mississippi.

The evidence further showed that the defendant, acting under the provisions of House Bill 612, Laws of 1952, appointed Heber Ladner, Secretary of State, under date of August 12, 1952, as its lawful agent for process 'in any action or legal proceeding in connection with and based upon the sale or shipment into Mississippi of products subject to the Mississippi Economic Poisons Act of 1950.'

The motion to dismiss was sustained and Livestock Services, Inc., appealed to this Court.

The appellant says that appellee, at the time of the institution of this suit, was doing business in this state and was subject to suit here within the meaning of Sec. 1437, Code of 1942, Rec., so as to be deemed to have appointed the Secretary of State as its resident agent for process, and that it did not meet its burden of showing that it was not doing business in the state. Besides, it says that the appellee specifically appointed the Secretary of State as its agent for service of process for all purposes by an instrument executed and filed in accordance with the provisions of the Economic Poisons Act.

There are many decisions of this Court dealing with the expression 'doing business'. In one of the early cases, Saxony Mills v. Wagner, 94 Miss. 233, 47 So. 899, 23 L.R.A.,N.S., 834, it was held that 'in the case of a corporation which is not 'doing business' in this state, service of process upon a mere soliciting agent is not sufficient.'

In Snipes v. Commercial & Industrial Bank, 225 Miss. 345, 83 So.2d 179, the bank, as the holder of discounted paper on cars sold by the Snipes in their business at Batesville, Mississippi, sent some of its employees into the state to check the cars, to collect delinquent accounts, and to repossess motor vehicles and other appliances. Similar action was taken after the fire which destroyed the Batesville office. In some instances, these employees accepted payments on current accounts and issued receipts therefor. The case held that those acts were insufficient to constitute 'doing business' on the part of the bank, a Tennessee corporation. The opinion cited, with approval, as a good statement of what 'doing business' means 23 Am.Jur., Foreign Corporations, Sec. 361, p. 337, in part as follows: 'as a general proposition upon which most of the authorities agree in principal, subject to such modifications as may be necessary in view of the particular issue or of the terms of the statute involved, it is recognized that a foreign corporation is 'doing,' 'transacting,' 'engaging in,' or 'carrying on' business in the state when, and ordinarily only when, it has entered the state by its agents and is there engaged in carrying on and transacting through them some substantial part of its ordinary or customary business, usually continuous in the sense that it may be distinguished from merely casual, sporadic, or occasional transactions and isolated acts.' (Emphasis supplied.) By way of documentation, the opinion cited a large number of the decisions of this Court on that question. Since the authorities were collated at that time, it is not necessary to list them again in this opinion. Cf. also 20 C.J.S. Corporations Sec. 1829, p. 46.

In regard to occasional demonstrations to farmers and work at experiment stations in the colleges of the state, this constituted mere promotion to bring out the fine points of the product in aid of selling it. Cf. Knower v. Baldwin, 195 Miss. 166, 15 So.2d 47, where Knower carried along a stock of dummy watches and conducted solicitations in his own way. See also Refrigeration Discount Corporation v. Turley, 189 Miss. 880, 198...