Republic Steel Corp. v. Atlas Housewrecking & Lumber Corp.

• Decision Date: 10 January 1938
• Citation: 113 S.W.2d 155,232 Mo.App. 791
• Parties: REPUBLIC STEEL CORPORATION, RESPONDENT, v. ATLAS HOUSEWRECKING & LUMBER CORPORATION, APPELLANT
• Court: Kansas Court of Appeals

113 S.W.2d 155

232 Mo.App. 791

REPUBLIC STEEL CORPORATION, RESPONDENT, v. ATLAS HOUSEWRECKING & LUMBER CORPORATION, APPELLANT

Court of Appeals of Missouri, Kansas City

January 10, 1938

Appeal from the Circuit Court of Jackson County.--Hon. Ben Terte Judge.

AFFIRMED.

Judgment affirmed.

Newbill & Brannock for respondent.

William J. Gilwee for appellant.

OPINION

BLAND J.

This is a suit on an account. At the close of all of the evidence an instructed verdict was returned in favor of the plaintiff. Defendant has appealed.

There was no dispute at the trial as to the correct balance due upon the account, the defense being merely that plaintiff was not entitled to maintain this action for the reason that the business it did, out of which the account grew, was transacted in the State of Missouri when the plaintiff, a foreign corporation, was not qualified to do business in this State because it had not complied with sections 4596 to 4599, inclusive, Revised Statutes 1929.

The facts show that plaintiff, a manufacturer of steel pipe, is a corporation organized under the laws of the State of Ohio; that the defendant is a corporation organized under the laws of the State of Missouri dealing in such articles; that on June 26, 1933, the parties, in Kansas City, Missouri, entered into a contract wherein defendant was referred to as the distributor of plaintiff's products in Kansas City, Missouri, and vicinity. This contract provided that plaintiff would supply, on conditions mentioned in the contract, defendant's requirements for Black and Galvanized, Standard Weight, Extra Heavy and Double Heavy Steel pipe. The pipe, under the terms of the contract, was to be shipped by plaintiff from its factory in Youngstown, Ohio. The materials ordered by defendant for its stock in Kansas City were to be consigned to it at that point. The pipe sold by defendant to its customers, not in stock, was to be shipped by plaintiff directly to such customers.

The contract further provided that defendant was to receive plaintiff's products f. o. b. Kansas City, Missouri. Plaintiff was to maintain control over the minimum price at which the pipe could be sold to the public. Defendant was required to use certain methods prescribed by plaintiff in the computation of its invoice sale prices. Defendant was to handle no other products such as covered by the contract except that of plaintiff. Defendant was required to keep a true and correct record of the materials belonging to plaintiff accessible to plaintiff's representative and to permit plaintiff to make an inventory of the stock in the possession of the defendant at all reasonable times. All sales made by defendant wherein shipment was made direct to its customers were subject to the approval of the plaintiff. The powers of the defendant in the sale of the materials under the contract were otherwise limited by its terms.

The contract further provided that all materials in the possession of the defendant should remain the property of the plaintiff until sold to the customers of the defendant and that title to the proceeds of such sales was to vest in and belong to the plaintiff until accounted for by the defendant. All orders, invoices, debits, credit memoranda and ledger sheets, which supported plaintiff's account, relative to the contract, cleared through the St. Louis office of the plaintiff. It appears that the ledger sheets were made up in the office of the plaintiff in Youngstown, Ohio. Where the other evidences of the account were made is not shown.

Defendant was required to render a monthly statement of all sales to plaintiff, whereupon, plaintiff rendered defendant invoices for the material sold. Plaintiff controlled the price at which the pipe was sold. Defendant agreed to accept the pipe shipped to it at Kansas City, Missouri, store it and to take care of it and pay all expenses incidental thereto. Defendant agreed to be responsible to plaintiff on account of any damaged pipe or by reason of its theft. Defendant agreed to conduct the business of selling the pipe in each instance in its own name and guaranteed payment to plaintiff on all sales made by defendant. It was provided in the contract that all pipe consigned to defendant should remain the property of the plaintiff until sold and that title to the proceeds of the sale should vest in and belong to the plaintiff until accounted for by defendant. The contract also provided for its termination under certain conditions. The contract was subsequently amended, changing certain of its provisions relative to discounts to be received by defendant and the method of payment to be made by it.

The contract remained in force until May 26, 1934, when it was cancelled by plaintiff.

Under this contract a large amount of pipe was shipped by plaintiff from Youngstown, Ohio, to defendant in Kansas City. Plaintiff had stationed in Kansas City a sales agent and also one in St. Louis. It also maintained in St. Louis a district sales office. When defendant ordered pipe it would do so either through plaintiff's agent in Kansas City or its sales agent in St. Louis or its office there. These orders were forwarded to plaintiff's mill in Youngstown, Ohio for filling. There is no doubt that much of the business having to do with the ordering and accounting, under the contract, was done through the St. Louis office. Plaintiff's cancellation of the contract was done through that office, the letter being signed by the district sales manager located there. The contract was cancelled, however, not at the orders of the sales manager in St. Louis but was directed to be cancelled from the office of plaintiff in Youngstown, Ohio. After the cancellation of the contract all material on hand belonging to plaintiff in the possession of defendant was removed by plaintiff and sold by it. This was in accordance with the provisions of the contract allowing such a procedure. This suit was then brought for the balance owing plaintiff by defendant.

There is no evidence that plaintiff maintained any warehouse or stock of pipe in the State of Missouri. All shipments of pipe to defendant or its customers were made directly from Youngstown, Ohio, and under the provisions of the written contract. Plaintiff took no part whatever in sales made by defendant.

Under these facts defendant insists that plaintiff conducted business in the State of Missouri in violation of the statute. In this connection defendant says that the facts disclose "that the foreign corporation (respondent herein) was bringing its property in to this State; that title to the property and proceeds to sales remained vested in the foreign corporation; that the minimum sale price was controlled by the foreign corporation; that there was continued dealing by the foreign corporation with the property after interstate commerce had wholly ceased its dealings therewith."

These various things alluded to by defendant are not determinative of the question presented, unless it is true that plaintiff continued dealing with the pipe after its shipment in interstate commerce had ceased. Of course, it is admitted that if plaintiff's business was confined to interstate commerce, then it is not subject to our statute requiring a license by a foreign corporation in order to qualify it to do business in this State. On this point see Yarbrough v. W. A. Gage & Co., 70 S.W.2d 1055.

It is now well settled, not only by the Federal Courts but the Supreme Court of our State, that all interstate commerce is not sales of goods; that importation from one State to another is the indispensible element or test of...