Smith & Company v. Dickinson, 81 Wash. 465 (WA 9/16/1914)

• Decision Date: 16 September 1914
• Docket Number: No. 11535.,11535.
• Citation: 81 Wash. 465
• Court: Washington Supreme Court
• Parties: SMITH & COMPANY, Respondent, v. O. DICKINSON et al., Appellants.<SMALL><SUP>1</SUP></SMALL>

Page 465

81 Wash. 465

SMITH & COMPANY, Respondent, v. O. DICKINSON et al., Appellants.¹

No. 11535.

Supreme Court of Washington, Department One.

September 16, 1914.

CORPORATIONS — ACTIONS — FOREIGN CORPORATION — CONDITIONS PRECEDENT — DOING BUSINESS IN STATE. A foreign corporation is not doing business in this state, within Rem. & Bal. Code, §§ 3714, 3715, requiring the payment of an annual license fee, and providing that no corporation shall maintain any suit or action in any court of the state without alleging and proving payment of its annual license fee last due, although the agent of the corporation maintained offices in this state where he kept samples for exhibition when soliciting orders for the corporation, a manufacturing concern, and it appeared that the agent had made resales of goods shipped to customers, and had, on one occasion, sold his samples when a certain line of stock had been exhausted, which sales were subject to the approval of, and were closed by, the home office, and that the name of the corporation appeared in both the telephone and city directories together with that of the agent as its representative; since the transactions of the agent were only incidental to the regular business of the corporation, which by taking orders through an agent in the state, subject to approval and shipment by the home office, was conceded to be interstate commerce, upon which the state could impose no burden.

Appeal from a judgment of the superior court for King county, Dykeman, J., entered June 20, 1913, upon findings in favor of the plaintiff, after a trial before the court, in an action on contract. Affirmed.

Gates & Emery, for appellants.

Kerr & McCord, for respondent.

CROW, C.J.

This action was commenced by M. E. Smith & Company, a corporation, against O. Dickinson and Ida Williams, copartners, on an account for merchandise sold and delivered. From a judgment in plaintiff's favor, the defendants have appealed.

Respondent, a foreign corporation, has filed no copy of its articles of incorporation with the secretary of the state of Washington, nor has it paid an annual license fee to the state of Washington. Rem. & Bal. Code, § 3714 (P. C. 405 § 347), requires the payment of an annual license fee by every corporation incorporated under the laws of this state, and by every foreign corporation having its articles of incorporation on file in the office of the secretary of state; and § 3715 (P. C. 405 § 349), provides that no corporation shall be permitted to commence or maintain any suit, action or proceeding in any court of this state, without alleging and proving that it has paid its annual license fee last due. In Lilly-Brackett Co. v. Sonnemann, 50 Wash. 487, 97 Pac. 505, it was held that the provision of § 3715, above mentioned, has reference only to corporations "doing business in this state." It follows that the controlling question before us is whether respondent, a foreign corporation, was "doing business" in this state.

The trial court found that respondent is a corporation organized and existing under and by virtue of the laws of Nebraska, having its principal place of business in the city of Omaha, state of Nebraska, and that it is not doing business within the state of Washington. The evidence shows that respondent is manufacturing merchandise in the state of Nebraska, and is selling merchandise at wholesale in that state and other states, including the state of Washington; that its representatives take orders for merchandise and forward the same to respondent at Omaha for acceptance or rejection; that if the order is accepted, the merchandise is shipped from Omaha, Nebraska, to the purchaser, to whom it is sold upon credit; that the contract of sale is consummated in Omaha; that respondent has salesmen who solicit orders in the state of Washington; that its principal salesman is one Edward J. Bussey, who has offices in the cities of Seattle and Spokane, where he keeps and exhibits samples belonging to respondent; that he solicits orders throughout this state, sometimes taking trips to do so; that sometimes, in the interest of economy, he pays the expenses of proposed customers from their places of residence to Spokane or Seattle, where he exhibits the samples and receives their orders; that all such orders, when taken, are forwarded to respondent at Omaha for its approval, and for shipment of goods; that respondent's agents are not entitled to complete sales, to extend credit, or make collections, but that they represent respondent only in soliciting orders. The above statement covers respondent's general method of making sales in this state. It appears from the evidence that, on two or three occasions, where sales had been thus made to customers to whom the goods upon...