W. T. Rawleigh Medical Co. v. Rose

• Decision Date: 15 April 1918
• Docket Number: 301
• Parties: THE W. T. RAWLEIGH MEDICAL CO. v. ROSE
• Court: Arkansas Supreme Court

202 S.W. 849

133 Ark. 505

THE W. T. RAWLEIGH MEDICAL CO. v. ROSE

No. 301

Supreme Court of Arkansas

April 15, 1918

Appeal from Hot Spring Circuit Court; W. H. Evans, Judge; reversed.

Judgment reversed.

E. H Vance, Jr., Henry Berger and Albert W. Jernigan, for appellant.

1. This case is parallel with 126 Ark. 597, and involved an identical contract. See also 197 S.W. 1168. The relation of vendor and purchaser was created as held by these cases.

2. It was error to permit defendant to read the extracts from the books and pamphlets for the purpose of modifying, varying and contradicting the written contract. 64 Ark. 653; 55 Id. 352; 40 Id. 117; 108 Id. 507; 13 Id. 593-8; 83 Id. 63; 115 Id 177; 124 Id. 542.

3. Review the instructions given and refused and contend there was error, citing 115 Ark. 183; 126 Id. 597, 604; 88 Id. 364; 86 Id. 164; 23 Id. 128; 60 Id. 206; 2 Bush, 226.

Hogue & Heard, for appellee.

1. Appellee was fraudulently induced to enter into the written contract. The contract was abandoned and a new relation, that of principal and agent, was assumed.

2. The contract was made in this State. Appellant was a foreign corporation and failed to comply with the laws of this State. 9 Cyc. 670.

OPINION

HUMPHREYS, J.

Appellant instituted suit against appellee in the Hot Spring Circuit Court on January 14, 1915, to recover a balance of $ 929.70, with 6 per cent. interest from March 10, 1914, alleged to be due for goods, wares and merchandise sold under contract entered into between appellant and appellee of date July 11, 1910, which contract was as follows:

"Whereas, J. H. Rose of Thornburn, Arkansas, desires to purchase of The W. T. Raleigh Medical Company of Freeport, Illinois, on credit, and at wholesale prices to sell again to consumers, medicines, extracts, spices, soaps, toilet articles, perfumes, stock and poultry preparations and other goods manufactured and put up by it, paying his account for such goods, in installments as hereinafter provided. Therefore, he hereby agrees to sell no other goods than those sold to him by said company, to sell all such goods at regular retail prices to be indicated by it, and to have no other business or employment. He further agrees to pay said company for all goods purchased under this contract, the current wholesale prices of such goods by remitting in cash each week to said company an amount equal to at least one-half of the receipts from his business until his account is balanced, and for that purpose as evidence of good faith, he shall submit to said company weekly reports of his business; provided, however, if he pays his account in full on or before the 10th day of each month he is to be allowed a discount of three (3) per cent. from current wholesale prices. Upon the termination of this contract, for any cause, or by either party, he further agrees to settle in cash, within a reasonable time, the balance due said company on account.

"Unless prevented by strikes, fires, accidents or causes beyond its control, said company agrees to fill and deliver on board cars at place of shipment his reasonable orders, provided his account is in satisfactory condition, and to charge all goods shipped to him under this contract to his account, at current wholesale prices; also to notify him promptly of any change in wholesale or retail prices.

"Said company further agrees to furnish him free of charge, on board cars at place of shipment, a reasonable amount of first-class advertising matter, report and order blanks, and printed envelopes for his use in conducting his business; also give him free of charge, after he had begun work, suggestions and advice, through letters, bulletins and booklets, as to the best method of selling its products to consumers.

"This contract is subject to acceptance at the home office of the company and is to continue in force only so long as his account and the amount of his purchases are satisfactory to said company; provided, however, that said J. H. Rose, or his guarantors may be released from this contract at any time by paying in cash the balance due said company on account.

"Dated at Freeport, Illinois, July 11, 1910.

"The W. T. Rawleigh Medical Company.

"(Seal)

By W. T. Rawleigh, President.

"(Signed)

John Henry Rose."

Appellee denied liability under the contract for the reasons:

First, that the written contract established the relationship of principal and agent between appellant and appellee and was not a contract for the purchase and sale of merchandise by appellant to appellee.

Second, that if the written contract was one of purchase and sale it had been abandoned by the parties and that the sale of the goods and merchandise was made to the purchasers by appellee as agent for appellant.

Third, that appellee was fraudulently induced by the appellant to enter into the written contract under the belief that it was a contract of agency and that appellant, on account of said fraud, is estopped from claiming that the goods, wares and merchandise were sold outright to appellee.

Fourth, that appellant was a foreign corporation and had not complied with the conditions necessary to do business in the State; and, for that reason, could not make a contract in the State for the sale of its goods enforceable in the courts of the State.

The cause was tried before a jury upon the issues joined, instructions of the court and evidence adduced, and a verdict was returned in favor of appellee and a judgment rendered in accordance therewith dismissing the complaint of appellant.

The appellant, to sustain the issues on its part, introduced the deposition of J. R. Jackson, who was the secretary of appellant company, and he produced the original written contract, and the following acknowledgment of the indebtedness by appellee:

"Gentlemen: I received your statement dated January 2, 1914, showing a balance of $ 961.25 due your company on my account, at the close of business on Wednesday, December 31, 1913. I hereby approve the same as being correct upon the date stated and understand that this balance is assumed by my 1914 contract.

"Yours very truly,

"J. H. Rose,

"Malvern, Hot Spring, Arkansas."

Mr. Jackson testified, in substance, that appellant company is a foreign corporation chartered and doing business under the laws of Illinois; that its factories and warehouses were situated in Illinois, Tennessee, Pennsylvania, California and Minnesota; that none of them were situated in Arkansas; that it sold the goods to appellee outright under the written contract signed by appellee and his sureties in the State of Arkansas and returned to the company at Freeport, Illinois, for approval; that after investigating the sureties said company approved the contract and billed the goods out to him f. o. b. from the factory located at Memphis, Tennessee; that appellant was engaged in interstate commerce and for that reason did not comply with the laws of the State of Arkansas exacted of foreign corporations; that the contract was never changed or modified and that all the business transacted with appellee was transacted under the contract; that under the contract he made about eighty-five orders; that during the time the shipments were made it mailed appellee bulletins and booklets containing suggestions and advice as to the best methods of selling its products to consumers but that the consignee of the goods was not forced to comply with the suggestions; that the company did not advertise in the State of Arkansas but sent appellee advertising matter, as per the terms of the contract, for him to circulate in the interest of his business.

Appellee to support the issues in his behalf, testified in substance that the contract was mailed to him from Freeport, Illinois, and that he and his sureties signed it in Garland County, Arkansas, and that he mailed it back to the company; that he could read and write and read the contract...