Thompson v. Great Midwest Fur Co.

• Citation: 395 So.2d 840
• Decision Date: 26 January 1981
• Docket Number: No. 13887,13887
• Parties: Henry W. THOMPSON, Jr. v. GREAT MIDWEST FUR COMPANY et al.
• Court: Court of Appeal of Louisiana (US)

Page 840

395 So.2d 840

Henry W. THOMPSON, Jr. v. GREAT MIDWEST FUR COMPANY et al.

No. 13887.

Court of Appeal of Louisiana, First Circuit.

Jan. 26, 1981.

John Burgess, Livingston, for plaintiff.

Haydn Berey, Livingston, A. Wayne Stewart, Denham Springs, for defendant.

Before ELLIS, COLE and WATKINS, JJ.

COLE, Judge.

This is a suit for specific performance of a contract of sale. Defendants Great Midwest Fur Company and Larry Carroll appeal a judgment rendered against them in solido in the amount of $11,940.00 plus legal interest. The issues presented are whether or not the defendants are subject to the personal jurisdiction of the Louisiana courts and whether or not the plaintiff proved the relationship of principal and agent existed between Great Midwest and Larry Carroll.

Because the facts of the case are so crucial to our review it is necessary to present them in some detail. In March 1978, defendant Larry Carroll attended a fur auction in or near Livingston Parish, Louisiana. Shortly thereafter, on March 8, 1978, Carroll met with a local fur buyer, plaintiff Henry Thompson. Carroll introduced himself as a buyer and a grader for the Great Midwest Fur Company of Kirkland, Illinois. He presented a business card bearing Great Midwest's name and telephone number. The president of the company's name was printed on the card and Carroll's name had been added in his own handwriting.

Carroll and Thompson negotiated a deal at Thompson's house. Carroll informed Thompson Great Midwest was interested in buying up to 10,000 raccoon furs from the area. The men agreed Thompson would initially provide Carroll with 2,000 furs. Carroll was familiar with the fur in the area because he had graded fur at the recent auction. The men agreed on a price and Thompson sold Carroll several samples to show to his boss, David Smith, President of Great Midwest. They agreed Thompson was to proceed to buy the furs from the local trappers.

Several days later Thompson phoned Great Midwest and spoke to Carroll and David Smith. Thompson informed the men he had obtained 1700 raccoon skins and 20 opossum skins. The original price for the skins was reaffirmed in the phone conversation. David Smith instructed Thompson to take the furs to West Memphis, Arkansas where he was to meet Larry Carroll. The men met in Arkansas on March 12, 1978. Carroll inspected and counted the furs and after several phone calls to David Smith, wrote a check to Henry Thompson for $11,940.00. The check was written on the account of "Larry Carroll, Buyer for Great Midwest Fur Co."

On March 14, 1978, Larry Carroll returned to Louisiana to negotiate further with Thompson for additional raccoon skins. Carroll informed Thompson he had ordered a stop payment of the $11,940 check. Thompson went to Livingston State Bank at Albany where banker, Glen Stevens, called the drawee bank in Illinois and confirmed a stop payment order had been issued. Larry Carroll did not testify at trial but information solicited from David Smith revealed Smith had promised to pay Carroll a certain price for the furs if they were of the quality described by Carroll. When Smith examined the furs he found the quality to be poor and informed Carroll he would pay him only $6,200 for the skins. Carroll then ordered payment be stopped on the check he had written to Thompson.

The record shows Carroll and Thompson then met with Thompson's attorney to attempt to remedy the situation. They placed a conference phone call to David Smith and to Mr. Burley Marler, a fur expert. Smith informed Thompson the furs had already been scraped and sold to a man in New York but that he would gladly arrange for the furs to be shipped back to Thompson. Marlar advised Thompson not to accept the furs because they had been altered by the scraping and it would be impossible for Thompson to identify the furs as his own. Thompson therefore refused to accept the furs and subsequently filed suit for specific performance.

The first issue raised by appellants is whether or not they are subject to the personal jurisdiction of the Louisiana courts. Appellants argue the sale was finalized in Arkansas therefore Louisiana has no jurisdiction. This argument reflects a misunderstanding of the concept of in personam jurisdiction. Personal jurisdiction is based upon sufficient minimal contacts within a state. When a person has had sufficient dealings in a state it is considered fair to require that person to appear in the state's courts. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Standard Fittings Co. v. SAPAG, S. A., 625 F.2d 630 (5th Cir. 1980).

Louisiana's "long arm" statute, La.R.S. 13:3201, sets forth several circumstances which our legislature has deemed sufficient for this state to assert personal jurisdiction over a nonresident. The statute reads in part as follows:

"A court may exercise personal jurisdiction over a nonresident, who acts directly or by an agent, as to a cause of action arising from the nonresident's (a) transacting any business in this state;"

The comments of the Louisiana State Law Institute immediately following the text of the statute indicate the term "transacting business" is to be given a broad interpretation. The comments state, "It is intended to mean a single transaction of either interstate or intrastate business, and to be as broad as the phrase 'engaged in a business activity' of R.S. 13:3471(1)." ¹

The question of applicability of the long arm statute is an issue of fact, the determination of which must rest upon the peculiar circumstance of each individual case. Aucoin v. Hanson, 207 So.2d 834 (La.App. 3d Cir. 1968). The facts of this case disclose Larry Carroll had sufficient minimal contacts and indeed had "transacted business" within the state of Louisiana so as to justify Louisiana's exercise of personal jurisdiction. The contract seemed to be one with a suspensive condition, i. e., the right of view and trial, so that it was finalized when Carroll inspected the furs in Arkansas. Civil Code art. 2460. The fact that the contract was completed in Arkansas is immaterial because the record amply supports the conclusion that Mr. Carroll had transacted business in Louisiana prior to the finalization of the deal.

A careful examination of the record shows Carroll had several contacts in the state of Louisiana which culminated in the sale of the raccoon furs. He traveled to Louisiana for the purpose of buying raccoon skins for Great Midwest. He met Mr. Thompson in this state and negotiated the entire deal at Mr. Thompson's house in Livingston Parish. Testimony by several witnesses at trial showed Mr. Carroll introduced himself to many local people in the fur industry and handed each of them his business card. He obviously was attempting to make contacts with fur dealers in the area for future business purposes.

Mr. Carroll attended the fur auction in Louisiana and graded furs there. Virtually every preliminary matter concerning the sale of the 1700 raccoon skins was discussed and settled in Louisiana. Although no money changed hands in this state, in order to give the term "transacting business" the broad meaning the legislature intended it to have, we must conclude Mr. Carroll's negotiations amounted to transacting business in this state. If we were to require the contract be actually consummated in this state we would be allowing nonresidents to come to Louisiana and negotiate a business deal for weeks, months or years, yet so long as the final act was performed out of state, these persons would be free of the jurisdiction of our courts. Obviously this would be an undesirable result.

The purpose of the long arm statute is to extend personal jurisdiction of Louisiana courts over nonresidents to the full limits of due process, i. e., to any nonresident who has had "minimal contacts" in the state. The section must be liberally interpreted in favor of finding jurisdiction. Mayeux v. Hughes, 333 So.2d 273 (La.App. 1st Cir. 1976); Latham v. Ryan, 373 So.2d 242 (La.App. 3d Cir. 1979).

The facts of this case also disclose the activities of Great Midwest, both directly and through an apparent agency relationship, as hereafter discussed, were sufficient to bring it within the boundaries of Louisiana's long arm statute and the principles of due process, and thus subject it to the jurisdiction of Louisiana courts. Standard Fittings Co. v. SAPAG, S. A., supra.

The second issue raised on appeal is whether or not plaintiff established the existence of an agency relationship between Larry Carroll and Great Midwest. We note at the outset the distinction between actual and apparent authority of an agent. Actual authority exists when the principal grants authority to the agent either by express or implied consent. Apparent authority arises when the principal acts in such a way that third persons are justified in assuming the agent has certain authority, even though the principal may not have granted the authority to the agent. The principal is then estopped to deny the existence of an agency relationship. 2A C.J.S. Agency § 146. Apparent authority is defined as follows:

"The expression 'apparent authority,' as well as its variant, 'ostensible authority,' has been defined as connoting that authority which a principal holds his agent out as possessing or permits him to exercise or to represent...