Marcus v. J. R. Watkins Co.
| Decision Date | 23 June 1966 |
| Docket Number | 5 Div. 820 |
| Parties | Ralph Eugene MARCUS et al. v. J. R. WATKINS COMPANY. |
| Court | Alabama Supreme Court |
Omar L. Reynolds and Reynolds & Reynolds, Clanton, for appellants.
Jon Will Pitts, Clanton, for appellee.
This case was submitted on March 11, 1966.
The J. R. Watkins Company (hereinafter referred to as Watkins) brought this action in assumpsit against Ralph Eugene Marcus, principal, Martha Jane Bates and Lewis W. Headley, sureties, seeking to recover $1,876.60. The gravamen of the action is the written contract of unconditional guaranty to the J. R. Watkins Company of the payment of a debt contracted by Ralph Eugene Marcus, principal.
The cause was tried to a jury which returned a verdict for the plaintiff in the amount sued for. Defendants filed a motion for a new trial which was denied. This appeal followed.
Although several assignments of error are made, this appeal turns on one issue. It is agreed that Watkins is a Delaware corporation with its principal place of business in Winona, Minnesota. It is and has been engaged for many years in the manufacture and sale of food products, spices, extracts, vitamin preparations, proprietary medicines, cosmetics, farm products, insecticides, feeding supplements and veterinary medicines, salves for both man and beast, nostrums, shaving lotions, shampoos, skin cleansers, mineral compounds for hogs, proteins, mineral compounds for chickens, and other products. The essential facts are undisputed. The difference between the parties is this: Appellant contends that Watkins, admittedly a Delaware corporation, is a foreign corporation actually doing business in the state of Alabama, and as such has not qualified to do business in Alabama with the Secretary of State and hence the agreement sued on is unenforceable and wholly void under the Constitution and statutes of Alabama, the pertinent provisions of which will be set forth. Watkins on the other hand admits that it is not qualified to do business in Alabama, but contends that in fact it is not doing business in the state of Alabama and that the provisions of the Constitution and statutes referred to have no application to it, and that it may therefore sue in the courts of this state for the sums alleged to be due it on the contract herein involved.
Section 232, Constitution of Alabama, 1901, in part provides:
'No foreign corporation shall do any business in this state without having at least one known place of business and an authorized agent or agents therein, and without filing with the secretary of state a certified copy of its articles of incorporation or association.'
Title 10, § 191, Code 1940, provides:
'All contracts or agreements made or entered into in this state by foreign corporations which have not qualified to do business in this state shall be held to be void at the suit of such foreign corporation or any one claiming through or under such foreign corporation by virtue of said void contract or agreement * * *.'
Title 10, § 192, provides:
'Every corporation not organized under the laws of this state shall, before engaging in or transacting any business in this state, file with the secretary of state a certified copy of its articles of incorporation * * *.'
While we have stated what we believe to be Watkins' contentions above, it might be noted that we have simply surmised such to be the case. We have been favored with a brief consisting of two pages of argument, neither of which contains any citation of authority for the argument advanced, which consists simply in the assertion that Watkins put on testimony by one of its officers to the effect that the company had no agents in the state of Alabama, and that such testimony has been contradicted only by circumstantial evidence. The question before us is whether or not based on the evidence adduced it appears as a matter of law that Watkins was doing business in Alabama so as to bring into application the statutes set out above. We will review the evidence on this point:
A Mr. Barth, who was a witness for Watkins, and who was indentified as an attorney and assistant secretary of Watkins, gave testimony which comprises more than 100 pages of the transcript. Inter alia, he testified that the principal business of the plaintiff (Watkins) was to sell at wholesale to individuals who operate their own business and which goods they purchase from the company and resell to their individual customers; that the chief business of the plaintiff was the sale of products such as food products, beverage bases, spices, extracts, vitamin preparations, proprietary medicines, cosmetics, etc. and that Watkins ships products over the United States; that an agreement was entered into with Ralph Eugene Marcus of Clanton, Alabama, with Martha Jane Bates and Lewis W. Headley as sureties. (Here we might note that there is no denial that the parties entered into the contract and no denial that Martha Jane Bates and Lewis W. Headley signed as sureties or that goods were delivered to Marcus and that the balance due under that agreement was $1,876.60.)
This witness further testified that Watkins is incorporated in the state of Delaware with its principal place of business at Winona, Minnesota, that there had been no qualification whatever to do business in Alabama and that no business was transacted in Alabama; that between 1956 and 1959 the company had between 60 and 70 agents or dealers or purchasers in Alabama and that there were two dealers purchasing in Chilton County. The witness stated that two agents or field representatives or farm line men of Watkins lived in Alabama during this period of time, 1956 to 1959; one was C. E. Faust and the other was L. S. Knight; Faust lived at Selma and he was a field man for Watkins, was on the payroll of the plaintiff to perform certain duties; Mr. Knight's duties would be in the same capacity; that is, field agent; that their duties in Alabama were to secure any dealers and interest them in Watkins business and sometimes they would check records in the office of the Judge of Probate and they kept stationery and other papers and instruments such as the contract form signed by Marcus.
Several witnesses for the appellants (defendants) who were identified as 'sellers of Watkins products' testified. Their testimony is in essential respects consistent and that of A. O. Boswell will serve to illustrate the nature of this line of evidence: Mr. Boswell testified that he sold products for J. R. Watkins from March, 1956 to October, 1959; that the territory assigned to him by Watkins was in north Chilton County; that he sold the types of goods enumerated above. During the time that he sold for Watkins he had contact with representatives or agents of the Watkins Company and that he was acquainted with quite a few field men and the higher officials. One Mr. Laird from Memphis, Tennessee, 'sponsored' the witness, started him off in business and came to see him and would spend the night. This witness attended meetings where officials of the Watkins Company were present. These meetings were held about four times a year at the Holiday Inn in Bessemer, at the Dixie Cafe in Clanton, and in Selma at the Selma Del Restaurant. At first the meetings were held about four times a year and then about every two months. That the Watkins...
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...process on it, or (3) barring it from state courts for failure to meet the state's qualification requirements. Marcus v. J. R. Watkins Co., 279 Ala. 584, 188 So.2d 543 (1966); 36 Am.Jur.2d 318, Foreign Corporations, § 324. Courts of other states have held that the meaning of the phrase "doi......
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