Morrison v. Guaranty Mortgage & Trust Co

Decision Date09 December 1940
Docket Number34243
Citation191 Miss. 207,199 So. 110
PartiesMORRISON et al. v. GUARANTY MORTGAGE & TRUST CO
CourtMississippi Supreme Court

Suggestion Of Error Overruled March 10, 1941.

APPEAL from the circuit court of Bolivar county, HON. WM. A. ALCORN JR., Judge.

Action by the Guaranty Mortgage & Trust Company against Charles S Morrison and others, on promissory note. From a judgment for plaintiff, defendants appeal. Affirmed.

Affirmed. Overruled.

Dugas Shands and Palmer Lipscomb, of Cleveland, and E. B. Taylor of Shelby, for appellants.

The lower court abused its discretion in failing and refusing to dismiss the suit of plaintiff below, appellee here, for its failure to properly answer the interrogatories propounded to it by the defendants.

Sec. 1551, Code 1930; Smithers v. Met. Discount Co., 124 Miss. 833, 87 So. 284; Higgins Lbr., & Export Co. v. Price, 120 Miss. 123, 81 So. 787.

By the terms and form of the answers, appellee, we think, seeks to obviate its failure to answer the interrogatories as asked on the ground that it offers to allow the attorney for appellants to come to Memphis and there examine the records. We submit that such a contention merely begs the question. Such offer could not be taken as a compliance with Section 1551 of the Code. Under this section appellant had the absolute and unqualified right to responsive answers from the appellee to the interrogatories as propounded, if appellee had in its possession or had access to records which contained any of the information requested.

Every question asked was material on this defense in view of the rule laid down as to what is doing business by this court in the case of Marx & Bensdorf v. First Joint Stock Land Bank of N. O., 178 Miss. 345, 173 So. 297, which is, whether the corporation is doing within Mississippi acts which are within the function of its corporate powers.

What constitutes doing business is "largely one of fact to be determined by the circumstance of each particular case."

Wiley Electric Co. of Jackson v. Electric Storage Battery Co., 167 Miss. 842, 147 So. 773.

Appellee was doing business within the State of Mississippi, without having qualified so to do under the laws of the State of Mississippi. A peremptory instruction should have been given for the appellants.

Secs. 4140, 4164, Code 1930; Wiley Electric Co. of Jackson v. Electric Storage Battery Co., 167 Miss. 842, 147 So. 773; Marx & Bensdorf v. First Joint Stock Land Bank, 178 Miss. 345, 173 So. 297; Quartette Music Co. v. Haygood, 108 Miss. 755, 67 So. 211; Peterman Const. & Supply Co. v. Blumenfield, 156 Miss. 55, 125 So. 548; Case v. Mills Novelty Co., 193 So. 625, 187 Miss. 673, 126 A.L.R. 1102.

Appellants take the position that the cases of Dodds v. Pyramid Securities Co., 165 Miss. 269, 147 So. 328; North American Mortgage Co. v. Hudson, 176 Miss. 266, 168 So. 79; Long Beach Canning Co. v. Clark, 141 Miss. 177, 106 So. 646; City Sales Agency v. Smith, 126 Miss. 202, 88 So. 625; and C. I. T. Corp. v. Stuart, 185 Miss. 140, 187 So. 204, are inapplicable to the case at bar, because they involve the questions of the right of a non-resident corporation to lend money in Mississippi, or the right of a purchaser of notes secured by deeds of trust on Mississippi lands, and pursue the security, or where they have an offer in Mississippi to purchase an article and which offer is mailed to the offeree in a foreign state and there accepted by it. In the case of such a sale, it is the contract of sale which is attempting to be enforced. In the case at bar, the consideration for the notes executed by appellants was services rendered and expenses incurred by appellee in procuring the loan. A large majority of the necessary services were rendered in Mississippi. The difference lies in services and the way they were performed as against the purchase of an article of merchandise by mail. An additional difference is the presence of the local correspondents and inspectors and their various activities in Mississippi.

We say it is absolutely immaterial where the notes were payable. We say that we are concerned here with what the consideration of these notes were. For what was appellants indebted to the appellee? It was for services and a major portion of these services consisted of local acts done in Mississippi, and this is determinative of whether appellee was doing business in Mississippi.

Robert N. Somerville, of Cleveland, for appellee.

The interrogatories were not filed to obtain information, but for the purpose of obtaining a continuance when the docket in the circuit court was badly congested, one day being allowed for the trial of each case, argument on the motion to dismiss was extended by appellants between five hours to ten hours merely to consume time. Appellee had offered to supply all available information.

Standard Life & Acc. Ins. Co. v. Tinney, 73 Miss. 726, 19 So. 662.

While the statute may be remedial in one sense, the penalty imposed upon the defaulting party is radical, and we believe there should be a manifest violation of its terms before a court would be justified in inflicting the penalty.

Givens v. Southern Exp. Co., 106 Miss. 834, 64 So. 737; Hibernia Bank & Tr. Co. v. Beech, 117 Miss. 668, 78 So. 609; A. J. Higgins Lbr. & Export Co. v. Price, 120 Miss. 123, 81. So. 787; Smithers v. Met. Discount Co., 124 Miss. 833, 87 So. 284.

Notes payable at office of appellee in Memphis makes same subject to the laws of the State of Tennessee, therefore, Sections 4140 and 4164, Code of 1930, do not apply.

Kendrick v. Kyle, 78 Miss. 278, 28 So. 951; First Nat. Bank, etc., v. McGrath, 111 Miss. 872, 72 So. 701; T. H. and M. J. Allen v. Bratton, 47 Miss. 119; Leinkauf, etc., v. Haney, 93 Miss. 613, 46 So. 626; Fellows v. Harris, 12 S. & M. 462; Hart v. Foundry Co., 72 Miss. 809, 17 So. 769; Greenlee v. Hardin, 157 Miss. 229, 127 So. 777; Houston v. Keith et al., 100 Miss. 83, 56 So. 336; Coffman v. The Bank of Kentucky, 41 Miss. 202; Emanuel & B. v. Miles, etc., 34 Miss. 56; Hartford, etc., v. Delta & Pine Land Co., 292 U.S. 143, 78 L.Ed. 1178, rehearing denied, 292 U.S. 607, 78 L.Ed. 1468.

The notes and deed of trust executed in 1924 are not limited or restricted by Section 4140, Code of 1930, because same was not enacted until 1928. Section 4140 is not retroactive.

Miss. Const., sec. 16; Franklin et al. v. Ellis, 130 Miss. 164, 93 So. 738; Pryor v. Goza, 172 Miss. 46, 159 So. 99; Southern Realty v. Tchula Coop., 114 Miss. 309, 75 So. 121; Sturges v. Crowninshield, 4 L.Ed. 529; 12 R. C. L., "foreign corporation;" Secs. 66-68; Sec. 4140, Code 1930; 6 R. C. L., "Constitutional Law;" Secs. 290, 292-295; Price v. Harley, 142 Miss. 584, 107 So. 673; Pioneer Savings v. Cannon, 96 Tenn. 599, 36 S.W. 386; 2 Am. & Eng. Ann. Cas. 66, 67; Diamond Glue Co. v. U.S. Glue Co., 187 U.S. 611; Sidway v. Harris, 66 Ark. 387; 13 Am. & Eng. Ann. Cas. 515; Gun v. Barry, 21 L.Ed. 212; Walker v. Whitehead, 21 L.Ed. 357; Johnson v. Fletcher, 54 Miss. 260; Cooper v. Ferguson, 28 L.Ed. 1137; Rock Island Plow v. Peterson, 101 N.W. 616; White Sewing Machine v. Harris, 96 N.W. 857; Pennoyer v. McConnaughy, 140 U.S. 1.

Solicitation is not doing business and inspection of the property offered for security is not doing business when the decision to make or not make a loan is rendered by officers in the appellee bank in Memphis, all notes payable in Memphis, money disbursed in Memphis, and appellants make payments on their obligation in 1925 to 1929.

Sec. 4164, Code of 1930; Dodds v. Pyramid Securities Co., Inc., et al., 165 Miss. 269, 147 So. 328; North Am. Mort. Co. v. Hudson et al., 176 Miss. 266, 168 So. 79; C. I. T. Corp. v. Stuart, 185 Miss. 140, 187 So. 204; Bamberger v. Schoolfield, 160 U.S. 149, 40 L.Ed. 374; Ford, Bacon, & Davis, etc., v. Terminal Warehouse Co., 81 A.L.R. 1127; People B. & L., etc., v. Berlin et al., 50 A. 308; Watson et al. v. J. R. Watkins Co., 188 Miss. 435, 193 So. 913; 12 R. C. L., sec. 50.

Dugas Shands and Palmer Lipscomb, for appellants, on suggestion of error.

From the opinion it appears that a material difference might be made in the opinion of the court if the local correspondents were agents of the appellee rather than of appellants. If they were agents of the appellee, then every act done by the correspondents in Mississippi would be acts of the appellee in this state. From the opinion it seems that the conclusion reached to the effect that this was an interstate transaction, insofar as appellee was concerned, is materially based on the fact that it had no agents in this state.

We think it important that the fact is that appellee paid the local correspondent immediately and before it received any money at all from appellants or any other Mississippian where notes were taken to represent the commissions. Appellee took its own chances in making collection of the funds which it paid to the local correspondent. We think this is conclusive that the appellee actually paid the local correspondent, though ultimately it was repaid these funds by the borrowers. We think this nevertheless is a payment by the appellee.

The evidence, we think, affirmatively shows that the only person who gave any instructions or directions, or assumed any control over the local correspondent, was the Guaranty Bank &amp Trust Company. There is not one word in the evidence, we think wherein any borrower gave any instruction or made any suggestions to the local correspondent as to what should, or should not, be done. As conclusive evidence of whose agents were the local correspondent is the fact in our judgment that in closing the loan the correspondents' duty, among other things, was to see that valid liens on the lands in Mississippi were created by the respective deeds of...

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