Marx & Bensdorf, Inc. v. First Joint Stock Land Bank of New Orleans

• Decision Date: 29 March 1937
• Docket Number: 32660
• Citation: 173 So. 297,178 Miss. 345
• Parties: MARX & BENSDORF, INC., v. FIRST JOINT STOCK LAND BANK OF NEW ORLEANS, LA
• Court: Mississippi Supreme Court

173 So. 297

178 Miss. 345

MARX & BENSDORF, INC., v. FIRST JOINT STOCK LAND BANK OF NEW ORLEANS, LA

No. 32660

Supreme Court of Mississippi

March 29, 1937

Division B

1 CORPORATIONS.

Foreign corporation which, through agent, who was nonresident maintained headquarters at hotel within state large part of agent's time, advertised for realty brokerage business and realized $19,102.95 in commissions in three years for selling thirty-three tracts of land held "doing business" within state within statute barring suit by foreign corporation doing business in state which does not file power of attorney to receive service Code 1930, sec 4140).

2 CORPORATIONS.

One test of whether foreign corporation is "doing business" within state within statute barring suit by foreign corporation doing business in state which does not file power of attorney to receive service is whether it is doing such acts as are within the function of its corporate powers (Code 1930, sec. 4140).

HON. L. A. SMITH, SR., Chancellor.

APPEAL from chancery court of Calhoun county, HON. L. A. SMITH, SR., Chancellor.

Suit by foreign attachment by Marx & Bensdorf, Inc., against the First Joint Stock Land Bank of New Orleans, La. From a decree dismissing the bill, plaintiff appeals. Affirmed.

Affirmed.

Julian C. Wilson and Bertrand W. Cohn, both of Memphis, Tenn., for appellant.

As to liability for commission, this listing was without specified terms of sale, and the actual sale was made by the owner at a price satisfactory to it. As complainant's agent was the procuring cause of the sale and first interested the purchaser, and as both defendant and all its agents knew it, the case is controlled by the following authorities:

Roell v. Offutt, 138 Miss. 509; Skermetti Realty Co. v. Devitt, 145 Miss. 815; Ferguson v. Quick, 117 Miss. 692; Kelly v. Peacock, 115 Miss. 555; Sullivan v. Turner, 120 Miss. 503; Sunflower Bank v. Pitts, 108 Miss. 380; Delta & Pine Land Co. v. Wallace, 83 Miss. 656.

The broker is entitled to his commission where he is the procuring cause of the transaction or of bringing the parties together.

9 C. J., page 611, sec. 95, page 613, sec. 96, page 616, sec. 98.

If the broker has found a customer, his fight cannot be defeated by concluding the transaction without his aid.

9 C. J., page 619, sec. 99.

Even though the principal is ignorant of the broker's services, he is still liable for the commission unless the broker had an opportunity to inform the principal and fails to do so.

9 C. J., page 621, sec. 100.

The complainant admitted that it had neither filed its charter nor appointed a resident agent in Mississippi, because it claimed it was not doing business in Mississippi. If it was doing business in Mississippi in the sense of the statute, it could not maintain its suit. If it was doing business in Memphis, Tennessee, and not engaged in business in the state of Mississippi, it was not required to file charter and appoint an agent, and, therefore, may maintain the suit.

Complainant claims that it was engaged in the business of a real estate broker, which was to find buyers anywhere and put them in touch with owners who wanted to sell, and that business is conducted where it has its place of business and not where the buyer is found nor where the lands are located. The broker does not sell the land; the broker finds a purchaser to whom the owner sells the land. The fact that complainant is a corporation does not change the inherent sense of the matter. An individual would be engaged in the same way. The privilege license statute throws much light on the legislative intention. Section 195 of chapter 118 of the Laws of 1934, page 133, levies a privilege tax upon each person offering for sale or negotiating the sale or purchase of real estate. It makes it clear that it is not the individual sales that it mentions but the place where the agent conducts his business, because it provides for no license of those who are not in municipalities and levies the tax on those engaged in that business "in municipalities of classes 1 and 2 $ 25.00" etc.

It, therefore, seems clear that the legislative intent was that the business was conducted where the place of business was and not where the land offered was located. If this were not so, an agent (really a broker) would be liable for a privilege tax in every county at least where he offered land for sale. The court below evidently was of opinion that the thing dealt in was land, and, therefore, that the business engaged in was selling land located in Mississippi. The business is that of finding a purchaser for lands to whom the owner may sell. In this the brokerage business differs from other businesses.

The case here does not involve interstate commerce only because finding a purchaser is not a subject of interstate commerce, but the nearest to that question may afford some light in its determination.

Item Co., Ltd. v. Shipp, 140 Miss. 710; Longbeach Canning Co. v. Clark, 141 Miss. 184.

In Harleston v. West Louisiana Bank, 129 Miss. 111, this court held that where a bank had loaned money in the state and had to purchase a plant to protect its debt and then sold the plant, this was an isolated or sporadic piece of business rendered necessary to protect its business, and that such bank was not engaged in "doing business" within the state in the sense of the statute.

The complainant, of course, does not particularly object to the payment of a privilege license, to which it would only be subject had it an agency in a municipality. The serious thing is that the complainant, if it be construed to be doing business wherever it attempts to find a purchaser for lands or in aid of that has an employee show the lands to a proposed purchaser, would be compelled to file its charter and appoint an agent in so many states that it would be prohibitive. It would subject itself to local suits in every state where it offered to find a purchaser for lands. Such a construction is so impractical that it should not be adopted.

It is submitted that a broker who merely finds purchasers for lands in Mississippi is not required, if corporate, to file its charter and appoint agents for service of process in that state.

Brewer & Montgomery, of Clarksdale, for appellee.

Complainant was doing business in the state of Mississippi during the time in question, and has no standing in the courts of this state because of its failure to qualify as required by the statute laws of this state.

Sections 4140 and 4164, Code of 1930; Peterman v. Blumenfeld, 156 Miss. 55; Music Co. v. Haygood, 108 Miss. 755, 67 So. 211; Sections 914 and 935, Code of 1906; Wiley Electric Co. v. Electric Storage Battery Co., 167 Miss. 842, 147 So. 773; Friedlander Bros. v. Deal, 118 So. 508.

It is undeniable that the activities of H. H. Marks, agent and employee of complainant, in rendering the service and doing the works shown by the testimony in connection with complainant's business, was exercising a function for which the complainant was incorporated. The location of these activities was within the state of Mississippi. The business was transacted within this state. Not having qualified as the law directs, the special defense contained in the answer was properly sustained. The action of the chancellor in dismissing the bill followed the law.

The practice adopted by the chancellor in hearing case on special defense was in accord with the law.

Section 379, Code of 1930; Griffith's Chancery...