Merriman v. Harter

• Citation: 59 N.M. 154,1955 NMSC 19,280 P.2d 1045
• Decision Date: 01 March 1955
• Docket Number: No. 5862,5862
• Parties: J. D. MERRIMAN, Jr., d/b/a Credit Bureau of Silver City, Plaintiff-Appellee, v. Jerry M. HARTER, Defendant-Appellant.
• Court: Supreme Court of New Mexico

Page 1045

280 P.2d 1045

59 N.M. 154

J. D. MERRIMAN, Jr., d/b/a Credit Bureau of Silver City, Plaintiff-Appellee, v. Jerry M. HARTER, Defendant-Appellant.

No. 5862.

Supreme Court of New Mexico.

March 1, 1955.

Carl P. Dunifon, Silver City, for appellant.

J. R. Wrinkle, Silver City, for appellee.

LUJAN, Justice.

The plaintiff's assignor, a foreign company, has its principal place of business in Portland, Oregon. From there it gives instructions by correspondence. It has an agent in New Mexico whose duty is to solicit (canvass) pupils, whose applications for membership must be sent to the home office at Portland, Oregon, for acceptance. No contracts are closed here. No instruction is given here. No lessons or training material are sold here. The applicants receive their instructions through certain written lessons and training material mailed from Portland, Oregon. They send their reports for examination or correction to Portland, Oregon. The school is kept alive by lessons and training material on the one side and reports on the other, transmitted through the United States mails.

In this correspondence school the defendant became a pupil under a written contract. He signed in New Mexico his application for membership, and the plaintiff's assignor accepted it in Portland, Oregon. He promised monthly payments, which he failed to make, with the exception of four. His defense is that plaintiff's assignor has not complied with Sec. 73-14-3 of 1953 Compilation and that plaintiff is therefore unable to maintain this action. The above section prohibits the canvassing and sale of scholarships by correspondence schools, business colleges or commercial departments of any other school, or by its agents, unless before the canvassing and selling of scholarships it has procured from the state board of education the permit prescribed by the statute.

The trial judge overruled the defense, and entered judgment in favor of plaintiff and defendant appeals.

The trial court found that the application of the defendant was accepted by plaintiff's assignor in the State of Oregon and that the contract forming the basis of plaintiff's action was consummated in the State of Oregon and was a valid contract under the laws of the State of Oregon; that said contract or any of its terms and conditions does not contravene any law in the State of New Mexico, and that none of the terms or conditions of said contract require the performance of any illegal act in the State of New Mexico, and that said contract is a valid contract in New Mexico; that under the terms of said contract the defendant owes to plaintiff the sum of $285.

There are three principal questions presented in this case. First, whether the plaintiff's assignor was engaged in interstate commerce; second, was the contract made and consummated in the state of Oregon; and third, is the act in question applicable to plaintiff's assignor.

The principles which control the decision in the first question are set out in a well reasoned opinion by Mr. Justice Harlan in the case of International Text-Book Company v. Pigg, 217 U.S. 91, 30 S.Ct. 481, 484, 54 L.Ed. 678, 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103, reversing 76 Kan. 328, 91 P. 74.

The facts in that case were these: The text-book company was a Pennsylvania corporation, carrying on what is known as a 'correspondence school.' In the conduct of its business, it prepared and published instruction papers, text-books, and illustrative apparatus for courses of study to be pursued by means of correspondence, and the forwarding from time to time of such publications and apparatus to students. The company employs local or traveling agents, called 'solicitors', 'collectors', whose duties are to procure and forward to the company at Scranton, from persons in a specified territory, on blanks furnished by it, applications for scholarships in its correspondence schools. In conformity with the contract between the company and its scholars, the scholarship and instruction papers, text-books, and illustrative apparatus called for under each accepted application are sent by the company from Scranton directly to the applicant, and instruction is imparted by means of correspondence through the mails between the company at its office in that city and the applicant at his residence in another state. The company had a solicitor in Kansas, who had procured a number of students to take correspondence courses in the schools of the text-book company. The question was whether or not the business in which the company was engaged was interstate commerce. In holding that it was, the court, among other things, said:

'It involved, as already suggested, regular and practically continuous intercourse between the Text-book Company...