Sioux Remedy Co. v. Cope

• Decision Date: 11 December 1911
• Citation: 133 N.W. 683,28 S.D. 397
• Parties: SIOUX REMEDY CO. v. COPE et al.
• Court: South Dakota Supreme Court

133 N.W. 683

28 S.D. 397

SIOUX REMEDY CO. v. COPE et al.

Supreme Court of South Dakota

December 11, 1911

Appeal from Circuit Court, Turner County; Robert B. Tripp, Judge.

Action by the Sioux Remedy Company against F. M. Cope and another. Judgment for defendants, and plaintiff appeals. Affirmed.

Corson J., dissenting.

Joe Kirby, for appellant.

Bogue & Bogue, for respondents.

WHITING J.

Plaintiff sued to recover the amount claimed to be due upon the purchase price of certain goods alleged to have been sold defendants. The record before us does not disclose the contents of the pleadings, except that it does appear that the defendants, in their answer, set forth the contract under which they received the goods from the plaintiff. This contract, except as to name of the party of the second part is identical with the contract before this court in the case of Sioux Remedy Co. v. Lindgren, 130 N.W. 49. When the cause was called for trial, one of the defendants, called as a witness for plaintiff, testified to the executing of the contract at Centerville, S. D., and to the receiving of the goods thereunder; the contract was then received in evidence and plaintiff rested. The parties then stipulated that plaintiff was a foreign corporation, and had not complied with the provisions of sections 883-885 of the Revised Civil Code of this state. "Thereupon defendants moved the court to direct a verdict for the defendants for the reason as shown by said stipulation." This motion was granted, verdict rendered and entered, and plaintiff duly excepted. Judgment was rendered upon such verdict, and plaintiff appealed.

It is well to note that the cause now before us was before the trial court prior to the decision in the Lindgren Case, wherein, under facts exactly like those in this case, this court held the transaction sued on to be one pertaining to interstate commerce, and therefore that it was not controlled by the sections of our statute above referred to. Respondent contends that this court did not hold in the Lindgren Case that the transaction was one pertaining to interstate commerce, but merely said: "Assuming in the case at bar that the plaintiff was a foreign corporation, and was engaged in the business of selling merchandise, it cannot be required to file its articles," etc. Respondent has apparently overlooked that part of the opinion wherein it was said: "It is contended by the appellant that this contract of sale constitutes interstate commerce, and therefore the plaintiff was not required to file its articles of incorporation or appoint a resident agent, as provided by the Civil Code of this state, in order to entitle it to maintain this action. We are of the opinion that the plaintiff [appellant] is right in this contention."

Respondents further contend that, even construing the Lindgren Case as having held that the transaction before the court therein was interstate commerce, yet, in the case now at bar, the judgment should be affirmed, because it is sustainable, under the record herein, upon other grounds than the one considered and passed upon in the Lindgren Case: First, because the contract in question is a commission contract, and not one of sale; second, because, for a reason not considered by this court in the Lindgren Case, the transaction before the court was one not pertaining to interstate commerce.

This court held, in the Lindgren Case, that the contract then before the court-whether construed as it read, regardless of other matters, or whether construed in the light of the surrounding circumstances-was clearly an agency contract, under which the second party was not liable, unless he sold some goods and retained the money. Relying upon such construction of the contract, respondents point out that it was incumbent upon plaintiff, as a part of its case, to have proven facts which, under such contract, would create a liability, and that, not having done so, the verdict and judgment were right, regardless of the correctness of the grounds upon which such verdict was in fact directed. While conceding the soundness of the rule of law which holds that a judgment correct on the merits should be affirmed, even though it were based, in the trial court, upon an erroneous ground, yet we think it should be applied only when the merits of the cause are clear, and not under a record such as we have before us in the case at bar. Only one question was presented to the trial court, and the appellant has brought to this court only such record as was necessary for the review of the trial court's ruling. As before noted, we have not the pleadings before us, and it may be that the answer therein admits a purchase of the goods, or admits that as agents they had sold some of the goods. These were facts entirely immaterial upon a motion for direction of verdict, based upon the ground upon which the motion herein was based, and appellant was in no manner required to anticipate a claim, not raised in the lower court, and fill its record with matters not pertinent to the ruling of the court. We have no way of knowing whether the judgment was correct upon the merits of the issues as raised by the pleadings.

In support of the second ground urged by respondents, it is argued that, inasmuch as under the contract, "the defendants were agents for the plaintiff, not for the purpose of soliciting orders for the plaintiff and sending them to the corporation outside of the state, but for the purpose of receiving, at the agents' place of business in South Dakota, the goods described in the contract, and then selling them to the customers of the agents in South Dakota," the appellant was not engaged in interstate commerce. Respondents have cited many authorities in support of the above statement, but it seems to have escaped respondents' attention that the opinions in these cases are not directed to the question of the nature of the contract as between the principal and agent. These authorities clearly support the proposition that, if this appellant were suing one who had purchased of the respondents some of these consigned goods, and was seeking to recover the selling price, such suit would be based upon a transaction purely intrastate, and the purchasers could rightfully plead appellant's noncompliance with said sections 883-885.

But the authorities all hold that, where it is contemplated by the parties to a sale, or to any other contract, no matter what its nature, that, as a part of the transaction or a necessary incident thereto, the goods, concerning which the contract is made, are to be shipped from one state to another, the transaction or contract is one pertaining to interstate commerce, and comes under the inhibition prohibiting interference, on the part of the state, with such commerce. It matters not whether the contract be one under which a party is to buy goods, or to sell them, or to rent them; the sole question is whether or not, as a part of the carrying out of such contract, it is contemplated that there shall be a shipping from one state to another of the identical goods to which the contract relates. So far as the parties hereto are concerned, the contract in question pertained to interstate commerce-to the shipping of the goods ordered-whether the consignees were purchasers, or whether they were merely agents of the consignor. A transaction very like the one before us was under consideration in Butler Bros. Shoe Co. v. United States Rubber Co., 156 F. 1, 84 C. C. A. 167, wherein that court said:

"The contract of January, 1903, when reduced to its lowest terms was that for one year the complainant would send on the orders of the defendant from its factory and warehouse in the Eastern states shoes, boots, and rubber goods to the shoe company in Colorado, that the latter would make such advances to the complainant as it requested and would conduct the business and pay all the expenses of selling the goods for the factorage or commission, which consisted of the difference between the agreed prices between the parties to the contracts and the selling prices to the purchasers from the factor. The question has been exhaustively argued whether this was a contract for a conditional sale or a contract of agency. It did not evidence a conditional sale, because there was no obligation of the rubber company to transfer the title to the shoe company for an agreed price, and no obligation of the shoe company to pay an agreed price for the goods. It was a contract of bailment for sale, not a contract of sale. In re Columbus Buggy Co., 143 F. 859, 74 C. C. A. 611. It was a contract of factorage. *** Nor is the fact that these contracts did not evidence sales of the goods determinative of this question. A sale is not the test of interstate commerce. All sales of sound articles of commerce, which necessitate the transportation of the goods sold from one state to another, are interstate commerce; but all interstate commerce is not sales of goods. Importation into one state from another is the indispensable element, the test, of interstate commerce; and every negotiation, contract, trade, and dealing between the citizens of different states, which contemplates and causes such importation, whether it be of goods, persons, or information, is a transaction of interstate commerce. 'Since the case of Gibbons v. Ogden, 9 Wheat. 1, 6 L. Ed. 23,' said Chief Justice Waite, in Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 8, 24 L.Ed. 708, 'it has never been doubted that commercial intercourse is an element of commerce which comes within the regulating power of Congress.' The contracts before us constituted and caused commercial intercourse between citizens of different states. Their chief purpose and their principal effect were the...