Case Title: State v. McKenney

Citation: 105 So. 2d 439

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1958-07-24T00:00:00Z

Document:
105 So. 2d 439 (1958)
STATE of Alabama
v.
W. E. McKENNEY.
6 Div. 30.

Supreme Court of Alabama.
July 24, 1958.
Rehearing Denied September 25, 1958.
*440 John Patterson, Atty. Gen., Willard W. Livingston and Wm. H. Burton, Asst. Attys. Gen., for appellant.
Adams & Adams, Jos. W. Adams, Birmingham, for appellee.
COLEMAN, Justice.
The single question in this case is whether or not the appellee is a "merchandise broker" within the meaning of § 493 of Title 51, Code 1940, which was amended by Act No. 418, approved July 12, 1943, to read as follows:
It appears that § 493 of Title 51 was originally enacted as a part of the General Revenue Act of 1935. See § 348, Schedule 29 of that act on page 450 of 1935 General Acts, Regular Session. Schedule 29 was carried into the Code of 1940 as § 493 of Title 51 without substantial change, and as codified reads as follows:
The State Department of Revenue assessed the appellee for license tax as a merchandise broker for the period beginning October 1, 1952, and ending September 30, 1955. Appellee appealed to the Circuit Court of Jefferson County, Alabama, In Equity, as provided by law. That court, after taking testimony ore tenus, reversed the Department of Revenue and adjudged and decreed that the appellee is not a "commission merchant or merchandise broker" within the meaning of § 493, Title 51, Code 1940. From that decree of the circuit court, the State has appealed to the Supreme Court.
As we read the record, there is no conflict of any consequence as to the facts. The dispute between appellant and appellee appears to be a conflict as to the correct conclusion to be drawn from the facts.
The appellee at his own expense maintained an office in the city of Birmingham. He was engaged in soliciting orders for merchandise manufactured by several principals and sold to retailers within and without the State of Alabama. We understand that certain of these principals were residents of the State of Alabama and that certain others were nonresidents. Appellant states in brief that no question of interstate commerce is involved and we have so considered the case inasmuch as appellee does not contend to the contrary.
The appellee makes the following statement of facts:
Appellant's brief states:
Continuing further, appellee says:
Appellant's Exhibit B in the record shows that appellee, in taking orders for all principals (except one) uses appellee's own order form, on which is printed: "W. E. McKenney and Associates." The name and address of the particular principal to whom the order is directed is written on blank lines provided on the order form. While we are not to be understood as holding that the use of an order form of this type determines the status of appellee, it is mentioned as descriptive of the manner in which appellee conducted his business.
Appellee argues for application of the rule that a chancellor's findings of fact on oral testimony given before him are presumed to be correct. 2A Ala.Dig., Appeal and Error. In the instant case, however, there is no substantial conflict in the evidence bearing upon the material issue here presented. "Therefore, there is no real ground for the application of the rule, here prevailing, of the presumption of verity to be indulged as to the finding of the lower court on the evidence offered and noted on the hearing." Esco v. Davidson, 238 Ala. 653, 655, 193 So. 308, 310; 2A Ala.Dig., Appeal and Error.
In the case of Stratford v. City Council of Montgomery, 110 Ala. 619, 625, 626, 20 *443 So. 127, 128, this court construed the meaning of the words "local commercial broker" as used in a city ordinance and defined a "broker" as follows:
In two later cases, the words "merchandise broker" as contained in Schedule 29 of the Revenue Act of 1935 were construed. In State v. W. M. Meador & Co., Inc., 29 Ala.App. 450, 198 So. 163, the case was tried on an agreed statement of facts. The Court of Appeals held that the state was entitled to recover the license required by statute under the statement of facts in that case.
On certiorari, 240 Ala. 164, 198 So. 166, under date of October 10, 1940, this court approved the conclusion reached by the Court of Appeals and denied the writ.
So far as we have been advised, the legislature has not undertaken to define a "merchandise broker" as that term is used in the licensing statute. We find, however, that in 1943, after the construction of that statute in State v. W. M. Meador & Co., Inc., supra, and also State v. Stein, 29 Ala.App. 565, 199 So. 11, the legislature amended § 493 of Title 51 to read as it is set out above in this opinion. The amendment changed the amount to be paid for a license, but did not make any change in the words used to describe the taxpayer who is due to pay the license.
Under the foregoing rule of construction, the definition or description of a "marchandise broker" approved in the Meador and Stein cases, supra, is the same definition due to be applied in the instant case to determine whether or not the appellee is a "merchandise broker."
In both the Meador and Stein cases, supra, the agreed statement of facts contained the following stipulations:
After carefully comparing the statement of facts in the Meador case and the instant case, we find only three differences.
First, in the Meador case, supra, the facts stipulated that on occasion defendant would procure an order for less than a carload lot of a commodity and that in such case defendant would order a carload of that particular commodity shipped to the jobber who had ordered the largest portion of such car or to the defendant. Defendant would thereafter dispose of the unsold portion of the car either before or after its arrival. In the instant case, the appellee never has custody of any merchandise belonging to his principal. We do not, however, consider that this difference in the facts has any effect on the result. The only effect of the custody of the merchandise would be to make the appellee a "commission merchant" instead of a "merchandise broker." In Leibold v. Brown, 260 Ala. 354, 360, 71 So. 2d 7, 12, it was said:
In the instant case, the appellant concedes that appellee, McKenney, is not a "commission merchant."
The second difference is that in the Meador case, supra, the taxpayer received a commission only on goods which he sold and did not receive a commission on goods by an order which he did not solicit, as we understand the opinion. In the instant case, the appellee receives a commission on all goods sold in his territory by his principal although he did not solicit the order and knew nothing about it. We do not think, however, that this additional compensation changes the status of appellee from broker to that of an agent who is not a broker. The difference here noted merely constitutes a difference in the method of
compensating appellee and does not transform him into an agent who is not a broker.
The third difference, as contended by appellee, is that in the Meador case, supra, the agent there was, under his contract with his principals, at liberty to represent any and all principals as he might see fit, even though such principals competed with each other; whereas, in the instant case, according to the contentions of appellee, the appellee is not at liberty to represent any and all principals suitable to him, but is permitted to represent only those additional principals who do not compete with the particular products sold by one of the principals already represented by the appellee.
The trial court appears to rest its decree on this last difference in the facts and says in its opinion:
In discussing the meaning of "exclusive" this court has said:
If appellee represented five principals at the same time and was at liberty to represent others who did not sell competing products, can it be fairly said that he was the "exclusive" agent of any one of the five, or that his right to represent a principal other than one of the five had been "excluded"?
We think not. Even if appellee's contentions be accepted as true, there was only a restriction as to those whom appellee could represent but that is not an exclusion of his right to represent others. During *445 the period in question, appellee represented at least five principals and possibly ten of them. This does not amount to an "agreement not to increase the number of his customers" and is not an "exclusion of the right to act for" other principals who might be satisfactory to him. Stratford v. City Council of Montgomery, supra. We, therefore, conclude that under the facts appellee was a merchandise broker and distinguished from an agent who is not a broker.
We have carefully considered all the authorities cited by appellee. Some of the cases cited, notably from Pennsylvania and Illinois, appear to be contrary to our holding. We are nevertheless convinced that under the Meador and Stein cases, supra, our conclusion is correct.
We do not think the opinion in Leibold v. Brown, supra, is in any wise in conflict with our present holding. It is to be noted in that case that the question was "whether or not appellant as a commission merchant or merchandise broker is liable for a state license * * * by reason of the interstate nature of his business." While the term "manufacturer's agent" is mentioned in the opinion as an allegation of the bill, we do not think that opinion can be taken as holding that an agent who represents manufacturers is not, for that reason, a broker. An agent who represents manufacturers can be a broker as much in every sense as an agent who represents wholesalers or retailers or any other sort of principals.
The decree appealed from is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.
Reversed and remanded.
LIVINGSTON, C. J., and LAWSON, SIMPSON, GOODWYN and MERRILL, JJ., concur.
On Application for Rehearing
COLEMAN, Justice.
On application for rehearing, appellee differs with our conclusion on original deliverance. We are of opinion that the conclusion is correct and that no useful purpose would be served by enlarging thereon.
Appellee also requests that we say whether or not an agent in a factual situation different from that set out in the record in this case is a merchandise broker within the meaning of the statute with which this case is concerned. This court has said:
At appellee's request, we cite the Pennsylvania and Illinois cases which appear to be contrary to our holding in the case at bar: Jones v. City of Pittsburgh, 176 Pa.Super. 154, 106 A.2d 892; City of Chicago v. Dollarhide, 255 Ill.App. 350; Linehan v. City of Chicago, 227 Ill.App. 255.
Opinion extended. Application overruled.
LIVINGSTON, C. J., and LAWSON, SIMPSON, GOODWYN and MERRILL, JJ., concur.