Sinnett v. J.R. Watkins Company

• Decision Date: 20 April 1926
• Parties: Sinnett, et al. v. J.R. Watkins Company.
• Court: United States State Supreme Court — District of Kentucky

214 Ky. 76

Sinnett, et al. v. J.R. Watkins Company.

Court of Appeals of Kentucky.

Decided April 20, 1926.

1. Evidence — Mere Letters or Old Books, Designating Party to Written Contract as Agent, are Inadmissible to Alter or Change its Terms. — Where contract specifically provides terms shall not be changed, except by writing executed by parties, mere letters or old books on salesmanship, designating seller as agent, are inadmissible to alter or change terms.

2. Sales — Contract of Foreign Corporation Furnishing Goods for Resale Held Contract of Sale, and Not Agency Contract. — Contract of foreign corporation to furnish goods at wholesale prices for resale, providing that purchaser might buy for cash or on credit, and that amount of sales depended on resales by purchaser, held contract of sale, and not agency contract, notwithstanding provisions that purchaser canvass territory and make reports of sales, and that seller would take back goods undisposed of at termination of contract.

3. Commerce — Corporations — Where Contract of Foreign Corporation was with Local Individual for Sale of Goods, it was Engaged in Interstate Commerce, and Failure to Comply with Statutes, Section 571, would Not Defeat Recovery Against Buyer. — Where contract of foreign corporation with local individual was one for sale of goods, and not creation of agency, transaction was one of interstate commerce, and failure of corporation to comply with Kentucky Statutes, section 571, would not defeat recovery in action against buyer of goods.

4. Guaranty — Negotiable Instrument Act held inapplicable to written guaranty contract, as respects question of material alteration.

5. Guaranty — Signing of Guaranty Contract by Others, Without Knowledge or Consent of First Guarantor, Held Not Material Alteration, Available as Defense in Action on Guaranty. — Where guaranty on its face provided for signature of more than one guarantor, signing by others without express knowledge or consent of first guarantor held not material alteration, available as defense in action on guaranty.

6. Intoxicating Liquors — In action for Balance on Sale of Liquid Mixtures Outside of State, Answer Stating that Mixtures Contained Alcohol and were for Purpose of Resale in Local Option Territory Held Not to State Defense (Kentucky Statutes, 1915, Section 2557a; National Prohibition Act [U.S. Comp. St. Ann. Supp. 1923, Section 10138 1/4 et seq.]). — In action for balance due on sale of liquid mixtures by plaintiff, a foreign corporation, outside of state, answer alleging that mixtures contained alcohol and were intended for resale in local option territory, contrary to Kentucky Statutes 1915, section 2557a, but failing to plead that resales were in violation of present Prohibition Act, or National Prohibition Act (U.S. Comp. Stats., Ann. Supp. 1923, section 10138 1/4 et seq.), or that liquid mixtures were beverages, which would produce or cause intoxication, or that special tax was required for sale, held not to state defense.

Appeal from Daviess Circuit Court.

W.E. AUD, J.R. HIGDON and J.R. HAYS for appellants.

TAWNEY, SMITH & TAWNEY, E.D. LIBERA and SLACK, BIRKHEAD & SLACK for appellee.

OPINION OF THE COURT BY JUDGE CLAY.

Affirming.

The J.R. Watkins Company, a Minnesota corporation, brought this action against J.L. Sinnett, and Val C. Norris, E.K. Smith and I.B. Ware, who guaranteed the payment thereof, to recover a balance due for certain medicinal preparations and other articles alleged to have been purchased by Sinnett. From a judgment in favor of plaintiff, Sinnett and Norris have appealed.

The principal defense was and is that the contract was void because appellee was engaged in doing business in this state without having complied with section 571, Kentucky Statutes, requiring every corporation to file in the office of the secretary of state a statement giving the name of an agent upon whom process can be served. With the exception of certain formal and immaterial portions, the contract sued on is as follows:

"THIS AGREEMENT, made at Winona, Minnesota, U.S.A., this 1st day of December, A.D 1919, between THE J.R. WATKINS COMPANY, a Minnesota corporation, hereinafter called the company, party of the first part, and J.L. Sinnett of Whitesville, Ky., party of the second part:

"WITNESSETH, that for and in consideration of the promises and agreements hereinafter contained, to be kept and performed by the party of the second part, the company promises and agrees to sell and deliver to the party of the second part free on board cars at Winona, Minnesota, or at its option, at any of its regular places of shipment, any and all goods and other articles manufactured or sold, or which may hereafter be manufactured or sold by it, unless prevented by fire, insurrection, invasion, strikes or other cause, at the usual and customary wholesale prices as the party of the second part may reasonably require for sale by him from time to time, from the date hereof, in the following described territory, except the incorporated municipalities therein located, to-wit: In the state of Kentucky, in Daviess county, the part east of the L. & N. Ry., including the town of Owensboro. In consideration of the sale and delivery to him, as vendee, f.o.b. cars at Winona, Minnesota, or other regular shipping point as above mentioned, by said company, of the goods and other articles manufactured or sold by it, in such reasonable quantities as he may require for sale in said territory as herein provided, upon the terms herein expressed, the party of the second part promises and agrees as soon as practicable after said goods and other articles are received, to make a thorough and personal canvass of said territory at least four times a year, at his own cost and expense, and to provide a proper outfit therefor, and to sell said goods or so much thereof as possible, and at all times during said term said party of the second part agrees to keep a complete record of all goods disposed of by him and on hand and to make to said company complete regular weekly written reports of the sale and collections, which reports, however, or any of them, may be waived by said company, and also to report the goods on hand and outstanding accounts when requested by said company so to do.

"And the party of the second part promises and agrees to pay to said company at Winona, Minnesota the wholesale prices aforesaid for the goods and other articles sold to him from time to time, as herein provided, and the prepaid freight and express thereon, if any, during said term, at the time and in the manner and in accordance with the provisions of the weekly report blanks of said company to be furnished to the party of the second part, and at the termination of this agreement to pay the whole amount therefor then remaining unpaid, or in cash, within ten days from date of invoice, with the understanding that said company will allow a discount of three per cent, from said wholesale prices on cash payments, provided full payment for all goods previously furnished shall then have been made; but such payments, or any of them, may be waived or extended by the said company without notice to the sureties hereon and without prejudice...