Shemper v. Latter & Blum, Inc.

• Citation: 58 So.2d 359,214 Miss. 113
• Decision Date: 28 April 1952
• Docket Number: No. 38392,38392
• Parties: SHEMPER v. LATTER & BLUM, Inc.
• Court: United States State Supreme Court of Mississippi

Page 359

58 So.2d 359

214 Miss. 113

SHEMPER v. LATTER & BLUM, Inc.

No. 38392.

Supreme Court of Mississippi.

April 28, 1952.

Rushing & Guice, Biloxi, for appellant.

O. K. Wiesenburg, Pascagoula, for appellee.

ETHRIDGE, Justice.

Appellee and cross-appellant, Latter and Blum, Inc., is a large real estate brokerage agency incorporated under the laws of Louisiana, with its principal place of business in New Orleans. It instituted the present action in the Circuit Court of Jackson County, Mississippi, against appellant and cross-appellee, Israel Shemper, Sr., seeking to recover from Shemper $1,500 under the terms of a brokerage contract with him. Shemper pleaded that Latter and Blum was doing business in Mississippi without having qualified in this State and was therefore not entitled to sue in the state courts; denied the existence of any obligation under any such contract; and further pleaded by a 'cross-complaint' that Shemper had incurred certain damages as a result of Latter and Blum's breach of the contract, and asked for a recovery over against Latter and Blum. The circuit court granted a peremptory instruction for Latter and Blum for $1,000 for the corporation having obtained a lease for Shemper on his property, denied appellee the additional fee of $500 which it claimed was owed it for having obtained a loan for Shemper, and denied Shemper any relief under his counterclaim. From this judgment Shemper appeals, and Latter and Blum cross appeal. We affirm the decision of the circuit court.

It is first contended by appellant that Latter and Blum, Inc., was doing business in this state within the provisions of Code of 1942, Secs. 5319, 5343, 5344, and that, therefore, appellee was disabled from suing in Mississippi courts. Latter and Blum has no office in this state. Its principal office is in New Orleans. It sells real estate, but not to Mississippians, and makes loans. Within the past five years it has sold a few pieces of property in Mississippi, and has sold between three to five leases on Mississippi property. The property covered by those leases was owned by officers of the company. The corporation advertises in magazines of national circulation, and in New Orleans newspapers. From time to time it advertises in such publications that it has Mississippi property for sale, which the owners have referred to it. Practically all of its transactions with reference to Mississippi property, like the present one, are handled by correspondence or by interviews in New Orleans. When the company has a piece of Mississippi real estate listed with it, it usually has it appraised and photographs made of it, and agents must come to Mississippi to do that. Appellee generally handles property to be owned or leased by large merchandising organizations such as Woolworth, Penny and A. & P. It sometimes places its signs on Mississippi property listed with it.

Many people in New Orleans own real estate in Mississippi. The company usually acts to bring out of state buyers and sellers together. Less than one-half of one percent of the company's total sales involve Mississippi property. It does not have a bank account in this state, and has no agents here. Representatives of the company do not make visits to this state for the purpose of selling Mississippi lands listed with it. None of its negotiations for sales of such land are conducted in Mississippi, and the sale or lease contracts are executed in New Orleans. It sends no agents to Mississippi, other than to take photographs and to appraise. Its primary function is bringing buyer and seller together by correspondence or at its office in New Orleans. These facts are illustrated by the dealings involved in the present case. The contract in question consists of two letters, one executed by both parties in New Orleans, and the other consummated through the United States mail. Negotiations between the parties, and with the lessee and the lender, were conducted either in New Orleans or through the mails.

Under these circumstances, we do not think that Latter and Blum, Inc. was doing business in Mississippi so as to require it to qualify in this state in order to sue in the state courts. North American Mortgage Company v. Hudson, 1936, 176 Miss. 266, 168 So. 79; Dodds v. Pyramid Securities Company, 1933, 165 Miss. 269, 147 So. 328; Knower v. Baldwin, 1943, 195 Miss. 166, 15 So.2d 47; Savell v. Schultz, Baujan & Co., Miss.1952, 57 So.2d 151. Marx & Bensdorf, Inc., v. First Joint Stock Land Bank of New Orleans, 1937, 178 Miss 345, 173 So. 297, is not in point because there the foreign brokerage corporation had an agent who made frequent trips into this state to handle the business of his principal, and the corporation had a substantial volume of sales within the state and maintained an office here. Interstate Realty Co. v. Woods, 5 Cir., 1948, 168 F.2d 701, on rehearing, 5 Cir., 170 F.2d 694, reversed in 1949, 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed. 1524, also involved a foreign corporation frequently sending its agents into Mississippi to meet prospective buyers and to show the property to be sold, and transacting a substantial volume of sales in the state with substantial profits over a period of time. The interstate character of Latter and Blum's operations is primary and substantial, and the minor acts referred to above which occurred in Mississippi in isolated instances and in a very small volume were in themselves part of interstate commercial activities, and do not constitute doing business with this state. See Davis-Wood Lumber Co., Inc., v. Ladner, 1951, 210 Miss. 863, 50 So.2d 615.

Both parties contend that the circuit court misinterpreted the contract between them. In May 1949, Latter and Blum, Inc., through its vice president, M. E. Polson, wrote to Shemper in Pascagoula, Mississippi, advising him that they represented a national merchandising concern which would be interested in leasing a 'very simple type building constructed for them in Pascagoula', and inquiring if Shemper would be interested in considering such a transaction. It developed that the national concern was the Great Atlantic and Pacific Tea Company, which was interested in opening a food market. Shemper owned a corner lot in Pascagoula. He replied to Polson's letter advising that he would be interested and that he would like to have some details as to the type of building the lessee might want. Three-way negotiations proceeded among Shemper, Latter and Blum, and A. & P. for almost a year. By April 10, 1950, a lease from Shemper to A. & P. was almost ready for execution. Shemper and his attorney went to New Orleans to the office of Latter and Blum. His attorney there dictated a letter on that date from Shemper to Latter and Blum setting forth the terms of the brokerage agreement and the fee which appellee would be paid by Shemper, as follows:

'With reference to the proposed lease with the Atlantic and Pacific Tea Co. on our property on Lot #33 of the Rene Krebs Tract situated on the corner of Krebs Avenue and N. Pascagoula St. in the City of Pascagoula, Miss. please be advised that if and when the lease with this Company is consummated we will pay you as full settlement the sum of $1,000.00 cash.

'If you succeed in placing a loan that is satisfactory to enable us to construct this building, we will pay you an additional sum of $500.00 cash.

'However, this entire obligation on my part depends upon the obtaining of a satisfactory loan.'

On May 1, Polson, acting for Latter and Blum, wrote Shemper that the company was negotiating with several large insurance companies to make Shemper a ten-year, 4 1/2 percent loan of $50,000. He advised that one of those companies would be willing to 'arrange for interim financing; however, I believe it would be more economical if you could arrange for this financing in a nearby bank.' On May 2, Shemper executed a ten-year lease on the property to A. & P. at a monthly rental of $500 with an option in lessee to renew for five years at a monthly rental of $600. On the next day, May 3, Polson acting for appellee wrote Shemper in part as follows:

'I really believe we better go ahead and try to close with the Commonwealth Life Insurance Company. I recommend you sign the application and put up the $250.00, you will not lose it, and I believe the loan will go through. * * *

'Just as a matter of keeping business relations clear, I will appreciate if you will confirm, at the bottom of this letter, your agreement that we will receive the sum of $1500.00 cash payment as our commission, in full, for services rendered in the lease and loan transaction. This amount is to be paid us as soon as you have a positive commitment in writing from the ...