Watson v. J. R. Watkins Co

• Decision Date: 26 February 1940
• Docket Number: 34059
• Citation: 188 Miss. 435,193 So. 913
• Court: Mississippi Supreme Court
• Parties: WATSON et al. v. J. R. WATKINS CO

193 So. 913

188 Miss. 435

WATSON et al. v. J. R. WATKINS CO

No. 34059

Supreme Court of Mississippi, Division A

February 26, 1940

APPEAL from the circuit court of Sunflower county HON. S. F. DAVIS Judge.

Action by the J. R. Watkins Company against G. Edgar Watson and another for the balance due under a written contract for the sale of goods. Judgment for plaintiff, and defendants appeal. Affirmed.

Affirmed.

Everett & Everett, of Indianola, for appellants.

By the demurrer, the plaintiff admitted the truth of the allegations of the plea. The facts stated in the plea present questions when proved which should be passed upon by a jury. If the facts alleged in the plea constitute no defense when proved then Sections 4140 and 4146, Code of 1930, should be repealed, for they are wholly worthless and meaningless.

We contend that the contract here involved is purely a contract of agency and not one of sale and purchase, and in order to get a clear view of the situation and the distinction, as well as the method of judging to which class it belongs, we quote from 22 Am. Jur. 309: "A consignment of goods to a factor is not a sale. In a sale, title passes to the buyer while in a consignment to a factor the possession passes to the factor but the title remains in the consignor, and the factor is liable, not to pay a price, but to account for the proceeds of the goods when sold."

The contract here fixes no price that the so-called purchaser is to pay for the goods, but as set out in the plea, he only accounts to the Watkins Company for the "proceeds of the goods when sold."

The contract under consideration here does not exact a price for the goods delivered to Watson, but requires him to account for sixty per cent of the price for which they are sold.

11 R C. L. 755.

When we analyze the contract under consideration here and apply the above authorities to its meaning we find purely a contract of agency.

In a sales contract the purchase price is fixed and a definite time for payment is fixed whether the goods be sold or not, and it does not require the purchaser to make any accounting to the sellor. But the contract before us fixes no price, no time of payment, and requires of the agent a weekly accounting to the company of his entire transactions on blank form furnished the so-called purchaser by the company, and if he does not sell them he may return the whole to the company, and his account there is wiped out without the payment of a single dime.

It matters not what they may call this contract, for its name is immaterial. It is the intention of the parties, to be gathered from the acts of the parties and the whole of the agreement that determines its character.

22 Am. Jur. 309-310; 11 R. C. L. 755.

It is perfectly clear from the terms of the contract here under consideration that it was the intention of the parties that the J. R. Watkins Company was to supply Watson with its products and Watson was to undertake the sale thereof in a particular territory, to keep a strict account of his cash sales and his credit sales, to make weekly reports to the company showing separately his cash sales, his credit sales, and his collections from former sales on blank report forms furnished him by the company for that purpose, and to remit to the company with each report 60% of his cash sales and 60% of his collections from former sales, and then to return whatever goods he had on hand at the termination of the contract, and when that was done, neither party owed the other anything whatsoever. That being the clear intention of the contract, it can be nothing but a contract of agency. Then to carry on that character of business in this state, the J. R. Watkins Company, being a foreign corporation, must comply with Secs. 4140-4146, Code of 1930 before it can maintain a suit in the courts of Mississippi.

Quintette Music Co. v. Haygood, 108 Miss. 755, 67 So. 211.

Cooper & Thomas, of Indianola, for appellee.

A simple reading of the contract shows that it is merely a contract of sale and purchase and that the title of the merchandise passed to the purchaser.

The fact that Watson had the right to return unsold merchandise and receive credit therefor at the current wholesale price did not make it a contract of consignment but merely as one of the ways by which he might pay in part for the merchandise.

These identical contracts have been before the courts of the country in a good many cases, and as we have found them the courts have uniformly held this contract to be a contract of purchase and sale and not a contract of agency.

J. R. Watkins Co. v. Coleman et al., 110 So. 449; McConnon v. Meadows, 138 Miss. 342, 103 So. 7; J. R. Watkins Co. v. Poag et al., 122 So. 473.

Contracts have been expressly construed to be contracts of sale and not of agency in the following cases:

McConnon & Co. v. Haskins, 182 Mo.App. 140, 180 S.W. 21; Dr. Koch Veg. Tea Co. v. Malone. (Tex.), 163 S.W. 663; Saginaw Medical Co. v. Batey (Mich.), 146 N.W. 329; J. R. Watkins Co. v. Holloway (Mo.), 168 S.W. 290; J. R. Watkins Co. v. Hague (Ark.), 210 S.W. 628; W. T. Rawleigh Co. v. Holcomb (Ark.), 191 S.W. 214; W. T. Rawleigh Co. v. Ellis (Ark.), 201 S.W. 110; E. A. Lange Co. v. Johnson (Ark.), 197 S.W. 1168; Saginaw Medicine Co. v. Dykes (Mo.), 238 S.W. 556; W. T. Rawleigh Co. v. Van Winkle (Ind. App.), 118 N.E. 834; Dodd et al. v. W. T. Rawleigh Co. (Tex.), 203 S.W. 131; Swift v. Warehouse Co. (Tenn.), 158 S.W. 480; Chicago Portrait Co. v. Maddox (Miss.), 73 So. 278; Hughes v. W. T. Rawleigh Co. (Ark.), 208 S.W. 295; J. R. Watkins Co. v. Hunt (Nebr.), 177 N.W. 462; Hogg et al. v. J. R. Watkins Co. (Ark.), 228 S.W. 730; McConnon & Co. v. Holden (Idaho), 204 P. 656; W. T. Rawleigh Co. v. Van Duyn (Idaho), 188 P. 946; Shores-Mueller v. Palmer (Ark.), 216 S.W. 295; W. T. Rawleigh Co. v. Rose (Ark.), 202 S.W. 850; J. R. Watkins Co. v. Waldo (Kan.), 230 P. 1051; McConnon & Co. v. Marshall (Tex.), 280 S.W. 323; Sinnett v. J. R. Watkins Co. (Ky.), 282 S.W. 769; Wright v. J. R. Watkins Co. (Ind.), 159 N.E. 761; Sager v. W. T. Rawleigh Co. (Va.), 150 S.E. 244; Furst & Thomas v. Mosely (Ark.), 277 S.W. 877; J. R. Watkins Co. v. Brund (Wash.), 294 P. 1024; Hill v. H. C. Whitmer Co. (Ga.), 158 S.E. 625; W. T. Rawleigh Co. v. Atwater (Idaho), 195 P. 545; W. T. Rawleigh Co. v. Thoroughman (Ky.), 11 S.W.2d 1006; W. T. Rawleigh Co. v. Harper (Wash.), 22 P.2d 665; W. T. Rawleigh Co. v. Snider (Ind.), 194 N.E. 356; J. R. Watkins Co. v. Holloway (Mo. App.), 181 S.W. 602.

The requirement of reports of records of sales by the company from the dealer does not obstruct the passing of the title of goods to the salesman.

Koch Veg. Tea Co. v. Malone (Tex.), 163 S.W. 663; Arbuckle v. Kirkpatrick, 98 Tenn. 221; Ex Parte White, 6. Chy. App. Cas. 397; Gindre v. Kean, 28 N.Y.Supp. 7; Sinnett v. J. R. Watkins Co. (Ky.), 282 S.W. 769.

A provision allowing dealers to return goods to the company does not affect the character of the transaction.

Koch Veg. Tea Co. v. Malone (Tex.), 163 S.W. 663; State v. Betz (Mo.), 106 S.W. 64; Sinnett v. J. R. Watkins Co. (Ky.), 282 S.W. 769; Equitable Credit Co., Inc. v. Rogers (Ark.), 299 S.W. 747.

The designation of the dealer's territory does not affect the passing of title of the goods or the character of the contract.

Koch Veg. Tea Co. v. Malone (Tex.), 163 S.W. 663; Granite Roofing Co. v. Casler, 82 Mich. 466; Lock et al. v. Citizens' Nat'l Bank (Tex.), 165 S.W. 536; Woods v. Amer. Brewing Assn. (Mo. App.), 183 S.W. 127; Saginaw Med. Co. v. Dykes (Mo. App.), 238 S.W. 566; W. T. Rawleigh Co. v. Walker (Ala.), 77 So. 70; W. T. Rawleigh Co. v. Fletcher (Tex.), 275 S.W. 210; Sinnett v. J. R. Watkins Co. (Ky.), 282 S.W. 769.

The U.S. Supreme Court and other courts hold that a foreign corporation need not take out registration papers as a condition to the right to sue for the collection of accounts, though the state in which suit is brought has a statute requiring registration.

J. R. Watkins Co. v. Holloway (Mo.), 168 S.W. 290; Koch Veg. Tea Co. v. Shuman (Okla.), 139 P. 1134; Koch Veg. Tea Co. v. Malone (Tex.), 163 S.W. 663; Buck Stove & Range Co. v. Vicars, 226 U.S. 205; International Text Book Co. v. Pigg, 217 U.S. 91; Butler Bros. Shoe Co. v. U.S. Rubber Co., 156 F. 1; Thomas v. Remington (Kans.), 73 P. 990; Erwin v. DuPont (Tex.), 156 S.W. 1097; Sioux Remedy Co. v. Cope, 235 U.S. 197; J. R. Watkins Co. v. Horn (Ark.), 203 S.W. 24; J. R. Watkins Co. v. Martin (Ark.), 200 S.W. 283; Waxahachie Med. Co. v. Daly (Ark), 183 S.W. 741; W. T. Rawleigh Co. v. Van Duyn (Idaho), 188 P. 946; W. T. Rawleigh Co. v. Walker (Okla.), 246 P. 417; Sinnett v. J. R. Watkins Co. (Ky.), 282 S.W. 769; Heinrich Chemical Co. v. Welch (Mo.), 300 S.W. 1001; Furst & Thomas v. Brewster, 282 U.S. 493.

The institution and prosecution of a suit does not constitute the doing of business within the meaning of corporation registration statutes.

J R. Watkins Co. v. Holloway (Mo.), 168 S.W. 290; Koch Veg. Tea Co. v. Schuman (Okla.), 139 P. 1134; Koch Veg. Tea Co. v. Malone (Tex.), 163 S.W. 663; Christian v. Mortgage Co. (Ala.), 7 So. 427; Ginn v. Mortgage Co., 92 Ala. 135; Railway v. Fire Assn., 60 Ark. 325, 28 L. R. A. 83; Cook v. Brick Co., 98 Ala. 409; 2 Morawetz on Corp., Sec. 662 and cases cited; Waxahachie Med. Co. v. Daly (Ark.), 183 S.W. 741; Larken Co. v. Commonwealth (Ky.), 189 S.W. 3; W. T. Rawleigh Co. v. Holcomb (Ark.), 191 S.W. 214; J. R. Watkins Co. v. Martin (Ark.), 200 S.W. 283; Erie Beach Amusement Co. v. Spirella Co., 173 N.Y.Supp. 626, 105 N.Y.Misc. 170; J. R. Watkins Co. v. Coombs (Okla.), 166 P. 1072; J. R. Watkins Co. v. Hunt (Nebr.), 177 N.W. 462; J. R. Watkins Co. v. Waldo (Kans.), 230 P. 1051; M. E. Smith & Co. v. Dickinson (Wash.), 142 P. 1133; Sinnett v. J. R....