Opinion
No. 32862.
November 15, 1937.
1. APPEARANCE.
A defendant enters his appearance by filing a motion to quash process (Code 1930, section 2999).
2. CORPORATIONS.
The purpose of statute providing that, where a corporation does a local business in state without filing its charter and having an agent upon whom process may be served, process may be served on any person found representing corporation at time transaction involved took place, is to give an effectual process so as to bring a corporation into a court where judgment may be rendered, and that statute has no relation to a motion to quash process (Code 1930, sections 2999, 4167).
3. CORPORATIONS.
Where process on a foreign corporation is invalid or ineffectual, and corporation does not appear in answer to suit, question of jurisdiction of the person may be raised in any appropriate proceeding, but, if corporation files a motion to quash process, corporation is brought into court by appearing for purpose of quashing process, even though process may be insufficient within itself to bring corporation into court, and thereby court is given jurisdiction of the person notwithstanding any defect in process (Code 1930, sections 2999, 4167).
4. FACTORS.
Under terms of contract whereby factor agreed to sell pecans at the best market obtainable, factor's reply to consignor's telegram requesting that all shipments be held, stating that pecans were all sold when they had not in fact been all sold, indicated fraud or purpose to deal unfairly, and consignor's evidence showing what price could have been obtained by proper and efficient efforts was competent to show unfair handling and sales and that price obtained was not the fair market price.
5. FACTORS.
A general consignment to a factor imports authority to sell according to usages of the trade at his discretion concerning time, but consignor may, at time of shipment or afterwards, if before sale, impose terms concerning time and price to which factor must conform.
6. FACTORS.
Where a factor in consideration of a consignment makes advances or incurs liabilities for owner, owner has no right by subsequent instructions to control factor.
7. FACTORS.
Where factor makes advances or incurs liabilities on account of consignment before assent to owner's directions in respect of time of sale or price, factor has thereby acquired a special property and may sell so much of goods as will reimburse him or discharge liabilities.
8. FACTORS.
An owner of property may impose terms on his commission merchant in respect of time of sale or price or both, but, after he has obtained money, credit, or goods from merchant, owner cannot require him to hold until he orders a sale unless owner repays advances or takes up liability.
9. FACTORS.
In consignor's action against factor, evidence that, after receipt of consignor's telegram requesting that all shipments be held, factor replied that pecans were all sold when they had not in fact been all sold, and that pecans of like quality had been sold to different markets at prices considerably in excess of price paid by factor to consignor, warranted jury in finding for consignor.
ON SUGGESTION OF ERROR. (Division B. Nov. 29, 1937.) [177 So. 362. No. 32862.]CORPORATIONS.
Under statute providing that, where summons or citation or service thereof is quashed on motion of defendants, defendants shall be deemed to have entered appearance, foreign corporation which engaged in local intrastate business without designating agent on whom process might be served, and which filed motion to quash process served on one of its agents in transitory action, entered its appearance for all purposes (Code 1930, section 2999).
APPEAL from the circuit court of Jackson county. HON.W.A. WHITE, Judge.
R.H. J.H. Thompson, of Jackson, for appellant.
The testimony introduced on the hearing of the motion to quash process discloses that the defendant's employee, George Kerr, was a mere soliciting agent of the defendant as defined in Saxony Mills v. Wagner, 94 Miss. 233, decided at the October 1908 term of this court. The statute being considered in Saxony Mills v. Wagner was Section 3433 of the Code of 1892, as amended by Chapter 61 of the Laws of 1894. The language of Chapter 61 of the Laws of 1894 is identical with the language of Section 2985 of the Mississippi Code of 1930, which last mentioned statute was enacted long before the commencing of this suit and which statute is still in force. It is clear from the undisputed testimony that appellant was never engaged in "doing business" within the State of Mississippi to the extent that the courts of Mississippi ever acquired jurisdiction over its person.
Berger v. Pennsylvania R.R. Co., 9 L.R.A. (N.S.) 1214; Lake Shore Michigan Southern Ry. Co. v. Hunt, 39 Mich. 469.
The Circuit Court of Jackson County was wholly without jurisdiction to render the judgment here appealed from and the same is absolutely void. The motion to quash should have been sustained and the action abated.
The lower court erred in overruling defendant's motion to suppress the deposition of C.L. Turner insofar as it tended to vary the terms of the written contract sued on.
Baum v. Lynn, 72 Miss. 932; Odeneal v. Henry, 70 Miss. 172; Millburn Gin Machine Co. v. Ringold, 19 So. 675; Feld v. Stewart, 78 Miss. 187; Cocke v. Blackborum, 58 Miss. 537; Houck v. Wright, 23 So. 422; Hightower v. Henry, 85 Miss. 476; Columbia Milling Co. v. Russell, 89 Miss. 437; Creek-Neal Coffee Co. v. Morrison-Hinton Grocery Co., 96 Miss. 835; Fresno Home Packing Co. v. Lyon, 96 Miss. 228; Gross v. Todd, 94 Miss. 168; McCall Co. v. Parsons, May, Oberschmidt Co., 107 Miss. 865; Hickman Ebbert Co. v. Asa W. Allen Co., 111 Miss. 161; Ismert-Hincke Milling Co. v. Natchez Baking Co., 124 Miss. 205; Porter Hardware Co. v. Peacock, 129 Miss. 129; McInnis v. Manning, 131 Miss. 119; Bettman-Dunlap Co. v. Gertz Bros., 136 Miss. 160; Edrington v. Stephens, 148 Miss. 583; Federal Discount Co. v. Fletcher Ratliff, 104 Miss. 251.
The matter was fully discussed before the contract was entered into and, after due consideration, Mr. Turner decided to take a chance on the market continuing to rise and, insead of selling the pecans at home, he concluded he would get more by entering into the contract and he entered into the same with his eyes wide open. The market broke and Mr. Turner was disappointed at the outcome. Even according to the testimony of Mr. Turner himself no element of fraud appears and no testimony whatever was offered to contradict the clear cut statements of the witness Kerr who made it plain to Mr. Turner that the proceeds coming to Mr. Turner depended upon the market price whatever it might turn out to be.
Mr. Turner's testimony evidences that he was a man of good intelligence, experienced in the marketing of pecans, that he understood the terms of the contract and knew exactly what he was doing. He was neither defrauded nor led into mistake and, under an unbroken line of Mississippi authorities, the lower court should have excluded all of the testimony tending to vary the terms of the written contract and the judgment here appealed from should be reversed solely because, over objection, this incompetent testimony was admitted.
The lower court erred in refusing to grant the peremptory instruction asked on behalf of defendant.
The lower court erred in overruling that portion of the testimony of M.B. Hardy objected to by the defendant wherein the witness was permitted to state what the custom was with reference to putting pecans in cold storage and holding same over until the following season and was permitted to testify as to transactions had by him with third persons in connection with the sale of pecans, which transactions had nothing to do with the pecans involved in this suit or with the parties to this suit.
The lower court erred in overruling defendant's objection to testimony offered by plaintiff as to the market price of pecans at Pascagoula and Moss Point at the time the transaction involved in this suit was had.
Counsel seem to have conceived that, after the contract was entered into, and the pecans shipped, consignor had the right to vary its terms by instructing that consignee act otherwise than as stipulated in the contract. Consignor had no such right. Consignor could have rescinded the contract basing such rescission on mutual mistake or fraud, had either been present, but consignor made no claim that the contract was entered into by mistake or because of fraud and consignor did not claim or attempt to exercise the right of rescission — he merely requested consignee to disregard the terms of the contract and not sell the pecans, because he hoped the market would go higher, and that the contract be called off. A written contract, solemnly entered into, cannot be wiped out or rescinded or called off because of mere whim or caprice. The contract sued on was an unconditional contract, uncancellable by its terms, and the consignee (appellant) was under no duty to comply with consignor's request.
Counsel seem to have conceived that defendant was doing business in the state but the facts shown of record disclose that such was not the case and that the traveling solicitor, Kerr, performed for and on behalf of defendant no service other than that directly concerned with the promotion of interstate dealings and all of his transactions on behalf of his principal fell within the protection of the commerce clause of the federal constitution.
Item Co., Ltd. v. Shipp, 140 Miss. 700; City Sales Agency, Inc. v. Smith, 126 Miss. 202; 14A C.J., 1283, 1284 and 1285; 2 Ann. Cas. 309. Ford Ford, of Pascagoula, for appellee.
What constitutes "business" depends upon the facts of each particular case, and we respectfully submit to this court that the Gridley, Maxon Company, appellant in this cause, most certainly was doing business in Mississippi, within the contemplation of the law and decisions of this court and of the United States Supreme Court during these times.
Marx Bensdorf, Inc. v. First Joint Stock Land Bank of New Orleans, 173 So. 297; International Harvester Co. v. Kentucky, 58 L.Ed. 1479; American Asphalt Roof Co. v. Shankland, 219 N.W. 28, 60 A.L.R. 986.
We submit that the evidence on the motion to quash affirmatively shows that the appellant in this case during the year 1933, when the transaction with Mr. Turner was had, and in the year 1934, when served with process, was engaged in a continuous course of business in Mississippi.
Section 4167, Code of 1930.
The rights of the parties in this case are not to be judged by the rigid rules applied to contractor and contractee in a written instrument, but by the more liberal rules of law applicable to the relationship of principal and agent, or rather principal and factor, which latter relation is really the one in this instance. This relationship is not one of the hidebound contracts between the parties, but is a fiduciary relation.
A factor is an agent who is commissioned by a merchant to sell goods for him and receive the proceeds.
Cotton v. Hiller, 52 Miss. 7; 2 Restatement, Law on Agency, sec. 464, page 1092.
We respectfully submit that in view of Mr. Hardy's testimony, which the court will bear in mind was not contradicted in the least particular, and he is a witness who was not asked a single question on cross-examination, but his testimony accepted as true by the appellant on the trial, that the jury could not reach any conclusion other than that the appellant was negligent in the handling of the pecans belonging to Mr. Turner.
If a factor sells in violation of instructions to hold he is liable for a rise in the market.
Thompson v. Gwyn, 46 Miss. 522.
It is apparent that the memorandum was not drafted with the idea of embodying all of the agreement had between Mr. Turner and the agent of the appellant and in questions between principal and agent it is always admissible to show any restrictions or authorizations which were not embodied in the document passed between them.
1 Restatement, Law on Agency, sections 34 and 48.
It was readily apparent that the memorandum executed by Mr. Kerr under the circumstances which he testified to was not an attempt to embody into a written document all of the agreement and instructions given him by Mr. Turner. i.e., that the pecans were not to be sold at less than 16 cents per pound, moreover, this was a condition of making the consignment and most certainly under the above authorities this testimony was admissible.
The cases cited by counsel are pertinent on the questions of the obligations arising between parties with a contractual relation between them but are not pertinent on the fiduciary relation existing in this case.
We respectfully submit that the evidence in this case showed a wanton and flagrant disregard of the principal's orders by his factor, and we respectfully submit that instead of appealing this case asking for reversal of same, that the appellant should be thankful that the jury did not bring in a verdict for the full amount sued for as would have been justified by the evidence as shown in the record.
Argued orally by J.H. Thompson, for appellant, and by E.J. Ford, for appellee.
This suit was filed in the circuit court of Jackson county, Miss., on October 23, 1934, against the appellant, and summons thereon was served upon George Kerr, an agent of appellant. Copy of the summons was mailed to the appellant at its office in Chicago, Ill., on October 24, 1934, by the clerk of the court. Thereafter, on December 7, 1934, appellant filed a motion in the circuit court to quash the process on the alleged ground that George Kerr was not its representative in any capacity that would authorize service of process to be served upon him for appellant. In the motion, it was further alleged that appellant had never done any local business in the state of Mississippi, but only interstate commerce, and that George Kerr was only a soliciting agent for the purchase of pecans which would be shipped directly to the appellant at Chicago on a commission basis. Evidence was offered on this motion to quash to substantiate the appellant's contention that it had never conducted a local business in this state, and had no agent on whom service of process might be had, and that the only power George Kerr had was to solicit orders of pecans for appellant to be shipped to it in Chicago, this not constituting intrastate commerce.
Appellee introduced evidence on this motion to quash to show that Kerr purchased pecans outright for appellant, paid for them in Mississippi, hauled them from the premises to the railroad, and had them loaded and shipped to Chicago, and that, in certain cases, Kerr paid for the pecans and they were delivered to him.
Kerr and one of the officers of appellant in Chicago testified that Kerr had no authority to buy pecans or sell them, but that he had, in some cases, done so and had paid advancements thereon out of his own personal funds, for which he would be reimbursed by appellant out of the sales, receiving certain profits.
The court overruled the motion to quash, and appellant asked leave to plead, which was granted, and, pleas having been filed, the case was tried on its merits, resulting in a judgment for the plaintiff, appellee here.
The first question presented for decision is whether the motion to quash effectually brought appellant into court so as to obtain jurisdiction of the person. Section 2999, Code of 1930, reads as follows: "Where the summons or citation, or the service thereof, is quashed on motion of the defendant, the case may be continued for the term, but defendant shall be deemed to have entered his appearance to the succeeding term of the court." This section has been construed by this court in a number of cases, holding that, by filing a motion to quash a process, the defendant entered his appearance. See Batson Hatten Lumber Co. v. McDowell, 159 Miss. 322, 131 So. 880; McCoy v. Watson, 154 Miss. 307, 122 So. 368; Standard Oil Co. v. State ex rel., 107 Miss. 377, 65 So. 468; Fisher v. Pacific Mutual Life Ins. Co., 112 Miss. 30, 72 So. 846. In Batson Hatten Lumber Co. v. McDowell, supra, the court, in discussing the effect of this statute, said that, by filing a motion to quash, the court gets jurisdiction of the defendant as effectually as if he had been legally served with process, and that by such a motion the defendant is not prejudiced as to his other rights, he is simply in court to the same extent and with all the rights that he would have, as the result of being legally served with process. Many authorities are there cited.
In McCoy v. Watson, supra, it was held that, by statute and general practice in this state, there is no such thing as a special appearance in our courts, and that it is our long-settled practice that, when a party comes in, he must come in entirely or else he must stay away. In the course of the opinion it is said that, instead of making the exception, it would be sounder to say that the rule will be kept intact, and that, when a party has appeared for one purpose, he will be kept for all purposes.
It is the contention of appellant that the case of Saxony Mills v. Wagner, 94 Miss. 233, 47 So. 899, 23 L.R.A. (N.S.) 834, 136 Am. St. Rep. 575, 19 Ann. Cas. 199, holds that it is insufficient to serve process upon a mere soliciting agent. That case was decided in 1908, under chapter 61, Laws of 1894. There was no appearance in the justice of the peace court which rendered the judgment. That section was amended by section 920, Code of 1906, now appearing as section 4167, Code of 1930, under which, when a corporation does a local business in the state without filing its charter as required and having an agent upon whom process may be served, process may be served upon any person found who represented the corporation at the time the transaction took place, no matter what character of agent such person may be. The purpose of this section is to give an effectual process so as to bring a defendant into court where a judgment may be rendered. This section has no relation to a motion to quash a process. If a defendant does not comply with section 4167, Code of 1930, and the process is not valid or effectual, and such defendant does not appear in answer to the suit, the question of jurisdiction of the person may be raised in any appropriate proceeding, but, if a defendant files a motion to quash a process, although such process may be insufficient within itself to bring a defendant into court, the defendant is brought into court by appearing for the purpose of quashing the process, and thereby the court is given jurisdiction of the person, notwithstanding any defect in the process.
The defendant in the case at bar did not choose to avail itself of the right to have the cause continued until the next term, but applied for leave to file pleas, consequently the case proceeded to trial. The appellant filed two pleas, one that it was not indebted to appellee for any greater amount than that paid into court for the benefit of appellee, and the other, the plea of tender, sets forth that on May 1, 1937, appellant paid into court as an absolute tender to appellee the sum of $136.49, being $113.50, with interest thereon from December 18, 1933, to the date of payment, in full settlement of the amount owing by appellant to appellee, and on May 3, 1937, appellant paid to the clerk of the court all costs accrued up to the date of payment, for the benefit and as a tender unto the appellee.
The action of plaintiff is founded upon a stipulation to send appellant a carload of pecans, aggregating 19,560 pounds, under a written contract as follows:
"Pascagoula, Mississippi "November 22, 1933.
"Mr. C.L. Turner, "Moss Point, Mississippi.
"Dear Sir:
"This is to acknowledge the arrangement under which we will handle the pecan nuts shipped by you to our firm at Chicago by freight this day, said shipment embraces (CBQ 132765)
283 sacks, a total of 19,560 Pounds, divided $1564.80 9632 lbs. of Success 7549 lbs. of Stuart 666 lbs. of Van Deman 880 lbs. of Wright 586 lbs. of Lewis 247 lbs. of Schley
"We are to sell these pecans at the best market obtainable and remit for same when sold less our usual commission of 10 per cent, deducting, of course, the freight charges, drayage, if any, which we will pay on arrival of goods in Chicago. We hereby advance eight cents per pound for the entire lot, which will also be deducted from our remittance to you after the sale of the nuts. Assuring you of good and prompt attention, we beg to remain, Very truly yours.
"Gridley, Maxon Company "By George Kerr."
On December 9, 1933, C.L. Turner wrote the appellant at Chicago as follows: "About three weeks ago through your Mr. Kerr, I shipped you nearly ten tons of pecans on which you advanced me eight cents per pound. The understanding with Mr. Kerr was that these pecans would be held for a good market. Please do not sell these pecans on this low market as I think the price will advance soon. I instructed Mr. Kerr to hold my pecans for a better market and should you be bothered about your advance to me, I would rather remit you in payment of this advance than to have my pecans sold on this low market. Kindly advise me promptly as to the receipt of this shipment and that you will follow these instructions. Awaiting your reply, I beg to remain, Yours very truly, C.L. Turner."
On December 12, 1933, appellant wrote appellee saying, among other things, that: "We have yours of the 9th, and assure you that we will endeavor to realize all we possibly can for your pecans. The majority of them are selling around twelve cents per lb., an occasional sack higher and an occasional sack lower, depending upon quality."
On December 16, 1933, C.L. Turner telegraphed appellant, saying: "Letter twelfth received regret pecans sold price mentioned hope not many. Write me fully amount pecans on hand what storage will cost and hold all shipment left for further instructions," and appellant, on the same date, telegraphed Turner as follows: "Pecans all sold but party in Milwaukee who bought some Success at twelve cents pound complaining about quality says his customers might return them account too many dry and empty so will have to wait for returns as balance Success sold nine cents pound Stuarts mainly twelve cents."
On December 23, 1933, C.L. Turner wrote appellant, requesting, among other things, a definite statement of his account, and in reply thereto appellant sent Turner a statement of sales of said pecans as follows:
C B Q 132765 Weight Price or doz. 1 51 18 9.18 283 Sax Pecans 6 430 14 1/2 62.35 39 2536 13 329.68 1 57 12 1/2 7.12 124 7728 12 927.36 8 654 11 71.94 59 4194 10 419.40 45 3218 9 289.62 _______ 18868 $2116.65 Less credits 11.49
Less advance $1564.80
Express $181.49 Freight Cartage 28.30 Ex. Cartage 7.00 Ret'ng Pkgs ___________________________________ Acc't Sale for goods 216.79 2105.16 rec'd 11-27-1933 Commission 210.52 427.31 ___________________________________ By Gridley, Maxon Co., 1677.85 Inc. Less apc 1564.80 27-29 South Water Market ___________________________________ Check above Dated Chicago, Ill. attached $ 113.05 12-18-33
E O E Number 3905 — G
Appellee introduced evidence of pecan buyers at Gulfport, Miss., who transacted business during 1933 and 1934, showing that they sold pecans of like quality to different markets in the United States at prices considerably in excess of the price paid by appellant to appellee in the case at bar. Appellee also introduced testimony to the effect that Kerr, at the time of buying the pecans, said they would bring at least 16 cents per pound, and that appellee's intestate directed him to hold for a better market. This evidence was objected to, and appellant took the position that the writing signed by Kerr for appellant, above referred to, constituted a contract, and that appellant had a right to sell on the best market in Chicago, and that conversations between Kerr and Turner were incompetent because not embraced in writing. The stipulation in the letter of appellant to Turner dated November 22, 1933, that, "We are to sell these pecans at the best market obtainable, and remit for same when sold," etc., does not provide for sales to be made at any one market, but appellant was to obtain the best obtainable price at any available market and was not limited to Chicago. Under the terms of this contract, the action of appellant, as shown by its telegram stating that the pecans were all sold, after receipt of Turner's telegram requesting that all shipments be held, when they had not in fact been all sold, indicated fraud or a purpose to deal unfairly with Turner in regard to his shipment, and he was authorized to show what price could, in all probability, have been obtained by proper and efficient efforts to deal for the advantage of Turner as well as itself.
The evidence referred to above was competent to show unfair handling and sales, and that the price obtained was not the fair market price of the pecans.
The rule pertaining to the rights of appellant and appellee in regard to sales and instructions to hold, as announced in this state, will be found in Cotton v. Hiller, 52 Miss. 7, as follows: "A general consignment to a factor imports an authority to sell according to the usages of the trade, at his discretion as to the time. But the consignor may, at the time of the shipment, or afterwards, if before sale, impose terms as to time and price, to which the factor must conform. But if the factor, in consideration of such consignment, made advances or incurred liabilities for the owner, he has no right, by subsequent instructions, to control the factor. If the advances and liabilities have been incurred on account of the consignment and before an assent to the directions of the owner in respect of the time of sale or price, the factor has thereby acquired a special property, and may sell so much as will reimburse or discharge the liability. The owner of the property has undoubtedly the right to impose terms on his commission merchant as to the time of sale or the price, or both. The restriction upon that general right is that, after he has obtained money, credit, or goods, from his agent, on the property, he cannot require the agent to hold until he orders a sale unless the owner shall repay the advances or take up the liability, for these were made or incurred on the faith of the right implied in such general consignments of getting the money or meeting the liabilities by a discretionary sale."
We think, in view of all the facts in the record, that the jury was warranted in finding for the plaintiff, appellee here. We find no reversible error, and the judgment of the court below will therefore be affirmed.
Affirmed.
This case was decided at a former sitting of this court, and the suggestion of error filed has been considered by another judge than the one who wrote the opinion, and it has been brought into conference and discussed, and we deem it proper to reply thereto.
In this case there was sufficient evidence for the jury to find, and the jury did find, that appellant did an intrastate business in Jackson county, Miss., where the suit was brought and the case tried. The principal question presented for consideration was whether the process served upon the agent of the appellant was a proper service, and whether the appellant was engaged in intrastate or interstate commerce.
The appellant having done an intrastate business in this state without complying with the requirements by designating an agent upon whom process may be served and filing same with the Secretary of State, and having filed a motion to quash the process so served, such motion constituted its appearance under section 2999, Code 1930. This has been held by repeated decisions to constitute an appearance for all purposes, the action being transitory and not local. Illinois Central R.R. Co. v. Swanson, 92 Miss. 485, 46 So. 83; Standard Oil Co. v. State, 107 Miss. 377, 65 So. 468; Fisher v. Pac. Mut. Life Ins. Co., 112 Miss. 30, 72 So. 846; McCoy v. Watson, 154 Miss. 307, 122 So. 368; Batson Hatten Lumber Co. v. McDowell, 159 Miss. 322, 131 So. 880; Turner v. Williams, 162 Miss. 258, 139 So. 606. In McDonough v. Stringer, 155 Miss. 179, 124 So. 334, it was held that under section 2724, Code 1906, section 2378, Hemingway's 1927 Code, the jurisdiction of justices of the peace of transitory causes of action against nonresidents is as full and complete as that of circuit courts under Laws 1926, c. 155, amending Code of 1906, section 707, as amended (Hemingway's Code 1927, section 500,) over like actions, except as to amount involved; that justices of the peace had jurisdiction of personal actions by nonresident plaintiffs against nonresident defendants found and personally served with summons but neither a householder nor a freeholder in district in which they were sued.
The cause of action here sued on is transitory as distinguished from local, and follows the person; consequently the case is controlled by the above-cited authorities, and the case of Arnett v. Smith, 165 Miss. 53, 145 So. 638, and the case of First National Bank of St. Louis v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349, do not apply.
Whether there is any conflict in the rules announced in the various decisions referred to is not now necessary to consider. The case at bar is controlled by the cases construed under section 2999, Code of 1930, and the suggestion of error, must, therefore, be overruled.
Overruled.