Court Opinion

ID: 3254946
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:24:59.015844+00
Date Added: 2024-06-11T13:59:29.697444
License: Public Domain

I cannot concur in the conclusions of fact and law in the majority opinion prepared by Judge SAMFORD. The evidence in this case is without conflict, and, in my opinion, shows a consignment only, and not a sale of the potatoes to Tyson.
Appellee's theory of its action, as set forth in the brief filed by its counsel, is as follows:
"The action was for $96.36 balance due on a car load of potatoes, sold by appellee to the appellant, on September 22, 1910." (Appellee's Brief, p. 8.)
I am ready to concede that, if the transaction was a straight-out sale to Tyson, then it would be an interstate commerce transaction, and the case should be affirmed. However, as I see it, the facts do not support the appellee's theory of the case, nor do they warrant the conclusions of fact and law set forth in the majority opinion.
The first inquiry from the produce company to Tyson was: "Can you sell car or two sacked potatoes?" Certainly this cannot be construed to mean: "Will you buy a car of potatoes?" Tyson's response was "Can sell," not that he would buy.
The plaintiff's general manager, its only witness, testified as follows:
"The defendant [Tyson] agreed to sell the potatoes mentioned in the correspondence at 81 cents per bushel. The date of this agreement was August 26, 1910. The plaintiff would realize, under the agreement, the sum of $510.30 net, after deducting freight and brokerage at 2 cents per bushel on 810 bushels. The plaintiff realized from said transaction only $430.14, leaving a balance due and unpaid by the defendant in the sum of $80.16."
On November 2, 1910, Tyson wrote the produce company as follows:
"On my return to the city, I found your favor of October 21st awaiting me. In reply will say after looking up my wire in question I find that I made a mistake in using the word 'can' instead of 'can't,' but at the same time I stated in the wire that your competitors was offering potatoes freely at 75 cents per bushel; you should have known that it was impossible for me or any other broker to get 6 cents per bushel above the market for your potatoes, when our competitors was offering and selling potatoes of same quality, and you should have known there was something wrong, and you should have asked.
"As for the loss in resacking, etc., I refer you to my letter of August 30th, notifying you of the condition of the potatoes on arrival of the car. I regret exceedingly our mistake, as it is my first of its kind. I am just in receipt of a check from the party on the last car of cabbage and will send you a check with statement tomorrow sure.
"Yours very truly,                  C.A. Tyson, T."
On November 4, 1910, the produce company wrote Tyson in response to his letter acknowledging a mistake that had been made as follows:
"In reply to your letter under date of November 2, 1910, we note that you say that you made a mistake in your wire to us under date of August 26th, in which you state, 'Can sell at 81 cents per bushel,' beg to advise that we did not question your ability to do what you stated, you would or could do in this wire, and it was wholly upon this wire statement that we forwarded the car N.  W. No. 27399, containing 810 bushels sacked potatoes."
On December 3d Tyson replied as follows:
"In response to your favor of the 30th will say that I cannot see why you should expect me to make good the loss you claim on the car of potatoes N.  W. 27399, as you should have known there was a mistake in my wire, as I mentioned in same that your competitors was offering potatoes freely at 75 cents, and you ought to have known that it was impossible for me or any other broker to get 6 cents per bushel more for your potatoes, and it seems to me that *Page 378 
you should have had the wire repeated, or wired asking if I had not made a mistake. Suppose I had not made a mistake, and the market had declined while the car in question was in transit, would not I be forced to sell the car at the market price. In view of all the facts, it seems to me that you are unreasonable in your demands. Therefore, I positively decline to yield to same.
"Yours very truly,                      C.A. Tyson, T."
Tyson's testimony, which is uncontradicted, bearing on this question, is as follows:
"My business is to handle goods on commission. The goods which I handle are shipped here, and sold by me after they arrive here out to different parties in the city. Then I remit to the parties shipping to me at the sale price, less my commission. The goods are shipped to me from different parties such as plaintiff in this case, and then sold by me to people here in town. I had previously sold some cabbage for the plaintiff in this case in this way. The potatoes in question were shipped from Virginia to this city, and then sold out here at the market price. The potatoes came in sacks and were resacked by me. I sold some of the potatoes for 75 cents and some for 73 cents. The potatoes were in a rotten condition when they arrived. It was impossible to sell them without resacking, and such resacking is the custom among brokers here under such circumstances. The potatoes came in two-bushel sacks, and I put them in one-bushel sacks here. Every one of the potatoes were sold after they got here. There was not a single one sold before they arrived."
It will be observed that the plaintiff nowhere says it sold potatoes to Tyson, and that Tyson has never contended, so far as the record shows, that he purchased the potatoes, and there is not, in my opinion, one scintilla of evidence in this record to the effect that Tyson sold the potatoes in his own name, if that be material. The record is silent as to whose name was used in the subsequent sale of the potatoes, except Tyson's statement to the effect that he had previously sold some cabbage for the plaintiff in this case in the same way that the potatoes were handled. The evidence further shows without conflict that Tyson paid the freight and expense of resacking with plaintiff's money, which was derived from the sale of the potatoes, and that the potatoes were not sold in the original packages, but were resacked in Birmingham for the produce company by Tyson, at its expense, and that the loss of the rotten and damaged potatoes was borne by it.
My conclusion therefore, from the undisputed evidence, is that the sale of the cabbage in the first instance, and of the potatoes here, was made by Tyson for the produce company. This being true, it is my opinion that the law says that Tyson, in making such sales, was doing business for his principal, and that the principal was doing business through him. A reference to some elementary principles applicable to factors sustain the correctness of this conclusion.
"It is well settled, as a general rule, that a written contract made by a factor in his own name for the purchase or sale of goods for his principal will bind the principal, and he may sue and be sued thereon exactly as if he were named in it, for it is treated as the contract of the principal as well as of the agent." 11 Ruling Case Law, p. 782.
The principal is bound by the acts and contracts of his factor done with his consent or ratified by him, and is also entitled, as the ultimate party in interest, to all the advantages of such acts and contracts, as against third parties with whom his agent deals; and it is immaterial that the principal was unknown at the time, or that the third party dealt with the agent, supposing him to be the sole principal. 11 Ruling Case Law, p. 782.
It is also settled law in Alabama that a commission merchant is an agent employed by his principal to sell goods consigned or delivered to him, and that in making such sale his act is the act of the principal, even though the sale may be made in the commission merchant's name. In Lehman-Durr Co. v. Pritchett, 84 Ala., 512, 4 So. 601, the court had the following to say on this subject:
"The business, duties, and liabilities of factors and commission merchants are substantially the same, the terms being ordinarily used interchangeably. A factor, or commission merchant, as generally defined, is an agent employed to sell goods or merchandise consigned or delivered to him, by or for his principal, for reward, usually a commission. The features which mainly distinguish a factor from a broker are the former is intrusted with the possession, disposal, and control of the property, and may sell in his own name, binding the principal; and the latter does not usually have possession, disposal, and control, and should sell in the name of the principal."
In Alabama Fertilizer Co. v. Reynolds, and Lee, 79 Ala. 502, Chief Justice Stone, speaking for the court, said:
"But there is another class of traders called commission merchants, who sell, but do not buy. Their particular designation is derived from the fact that they are the mere agents to sell the goods of others for a commission. They are distinguished from the former class, sometimes by the advertised or proclaimed line of business in which they are engaged, sometimes by the fact that they disclose their principals, and profess only to be intermediaries to bring seller and buyer together, sometimes by selling in the name of the principal, and possibly in other ways. A commission business is confined to the making of sales for others."
We are required to follow the decisions of the Supreme Court of this state, and I therefore hold that this court is required to say that, when a commission merchant such as Tyson was sells a carload of potatoes that are consigned to him, under the circumstances disclosed by this record, his act in so doing is the act of the principal.
Having shown that Tyson was the agent of the produce company for the purpose of selling its potatoes in Birmingham, and that his acts were its acts, it remains to determine whether or not the services rendered in selling them, that is to say, the act of selling them and delivering them to the Birmingham trade, by Tyson, was an act or acts of interstate commerce. I adopt this as a test, for the reason that the only exemption afforded *Page 379 
foreign corporations from the operation and effect of section 3642 et seq. of the Code is that the article shall not be construed to "interfere with, or prohibit, or regulate the transaction of interstate commerce or business authorized under the laws and Constitution of the United States."
To repeat, my opinion is that Tyson's acts in connection with the disposition of these potatoes were the acts of his principal, and if the services rendered by him were so connected with the subject sold as to make them a portion of interstate commerce, then the appellee was not doing business in this state, for the obvious reason that its agent, through whom it acted, was engaged in interstate commerce; but, on the other hand, if such agent was not engaged in interstate commerce, but was doing business in this state for the appellee, then the appellee must be held to have done business here through said agent.
In Hopkins v. United States, 171 U.S. 578, 19 Sup. Ct. 40,43 L.Ed. 290, the principal question in the case was whether or not commission merchants engaged in handling cattle consigned to them at Kansas City for owners throughout the various states Were engaged in interstate commerce. The Supreme Court of the United States said:
"The business of defendants is primarily and substantially the buying and selling, in their character as commission merchants, at the stockyards in Kansas City, live stock which has been consigned to some of them for the purpose of sale, and the rendering of an account of the proceeds arising therefrom. The sale or purchase of live stock as commission merchants at Kansas City is the business done, and its character is not altered because the larger proportion of the purchases and sales may be of live stock sent into the state from other states or from the territories. * * * If an owner of cattle in Nebraska accompanied them to Kansas City, and there personally employed one of these defendants to sell the cattle at the stockyards for him on commission, could it properly be said that such defendant, in conducting the sale for his principal, was engaged in interstate commerce? * * * We think not. On the contrary, we regard the services as collateral to such commerce and in the nature of a local aid or facility provided for the cattle owner towards the accomplishment of his purpose to sell them. * * * Is the true character of the transaction altered when the owner, instead of coming from Nebraska with his cattle, sends them by a common carrier consigned to one of the defendants at Kansas City with directions to sell the cattle and render him an account of the proceeds? The services rendered are the same in both instances, only in one case they are rendered under a verbal contract made at Kansas City personally, while in the other they are rendered under written instructions from the owner given in another state. This difference in the manner of making the contract for the services cannot alter the nature of the services themselves. If the person, under the circumstances stated, who makes a sale of cattle for the owner by virtue of a personal employment at Kansas City, is not engaged in interstate commerce when he makes such sale, we regard it as clear that he is not so engaged, although he has been employed by means of a written communication from the owner of the cattle in another state. * * * The commission agent, in selling the cattle for their owner, simply aids him in finding a market; but the facilities thus afforded the owner by the agent are not of such a nature as to thereby make that agent an individual engaged in interstate commerce."
Suppose, instead of employing Tyson, the appellee had shipped the car of potatoes to Birmingham, and sent its general manager from Virginia to solicit orders from and sell and deliver said potatoes to the Birmingham trade. Would it not, under such circumstances, be doing business in this state? If so, is it possible that a difference in the name and residence of the agent (which is the only means whereby a corporation may act) is the test by which the difference between interstate commerce business and doing business in this state is determined. It would seem that the name and residence of the agent is relatively unimportant. It is what he does, where he performs, and who he is acting for that are material to the inquiry. His residence here, if material at all, would tend to corroborate the appellant's contention that the appellee was doing business here.
In the Milburn Wagon Co. v. Commonwealth, 139 Ky. 330,104 S.W. 323, a foreign corporation furnished wagons on board cars at its factory at Toledo, Ohio, for sale by one Humble under an agent's commission contract in Kentucky. The title to the wagons remained in the corporation, and the funds derived from the sale of the wagons were kept separate and apart until remitted to the corporation. The court said:
"We are of opinion that such contract * * * constitutes only an agency, and is not a selling by the owners as wholesalers to the alleged agents as retailers, retaining merely a lien upon the property to secure the payment. * * * We are of the opinion that the evidence was sufficient to show that appellant was carrying on business through an agent in this state."
In Cone v. Tuscaloosa Mfg. Co. (C. C.) 76 Fed. 891, the court said:
"The business of defendant corporation is twofold. It manufactures cotton goods, and then sells them. The manufacture is wholly conducted in the state of Alabama. The sale, however, of so much of its product as is known in the trade as 'plaids, checks, and stripes,' has been, since 1891, conducted here through another corporation as selling agent. Examination shows that defendant does not sell its entire product to the selling agent, which thereafter resells, and thus makes its profit or loss. The selling agent is strictly an agent who sells defendant's goods for the account of said defendant, and for its services in effecting such sales and guaranteeing the solvency of the purchasers receives a commission. The goods, even when sent to the selling agent, remain the property of the defendant until sale is effected with some third party. The defendant thus offering for sale and selling its goods here is 'doing business within the state' quite as much as if it offered and sold them through a salaried officer resident here."
In John Deere Plow Co. v. Wyland et al., 69 Kan. 255,76 P. 863, 2 Ann. Cas. 304, the court said:
"The note sued upon was given for the purchase price of machinery sold by plaintiff to defendant, the negotiations for such sale having been made, and the order for such machinery having been taken, by an agent of plaintiff residing *Page 380 
in Kansas; that the order was in writing, made by defendant, and delivered to the local agent, by whom it was forwarded to plaintiff at Kansas City, Mo., for acceptance or rejection; that plaintiff then accepted the order, and shipped the machinery to the local agent, for delivery to defendant."
It was held that the transaction constituted doing business in that state.
In Elliott v. Parlin  Orendorff Co., 71 Kan. 665,81 P. 500, the court said:
"The method of business of the plaintiff company seems to have been that it shipped its goods to the dealer ordering the same with the understanding that the dealer should pay the freight, hold the goods as the property of the company, and sell the same, and have as his profit all that he acquired over and above the price at which the goods were listed to him. If so, the Kansas dealer was virtually the resident agent of the Parlin and Orendorff Company for the sale of its goods, that is, as between the company and the dealer."
In Fay Fruit Co. v. McKinney, 103 Mo. App. 304, 77 S.W. 161, it appears that a general salesman of the appellant corporation resided in Kansas City, Mo., at which place he had an office, the rent of which was paid by the corporation. The plan of business was for the plaintiff to ship fruit from California to some point in another state, not to some customer who had ordered or contracted for the fruit, but consigned to itself. It would then advise its salesman at Kansas City that the fruit had been shipped, and he, having applications for fruit, would "divert the car" at Kansas City by ordering it stopped at that place, take his purchaser to the railway yards, and sell as it stood in the car, collect the price, and remit to plaintiff. The court said:
"The goods were shipped, not in response to an order, or a sale already made by plaintiff through a 'traveling salesman or drummer,' but to plaintiff's own order, and were to be sold by its agent to whomsoever would purchase at the proper price."
It was held that the corporation was doing business in Missouri.
Many other cases could be cited, but these are sufficient to emphasize the distinction I think it proper to observe in this case.
At first blush, it must be conceded that the case of Butler Brothers Shoe Co. v. United Rubber Co., 156 Fed. 1, 84 C.C.A. 167, seems opposed to my conclusions. This is the strongest case cited in support of the majority opinion; but a careful examination reveals that the facts distinguish it from the case at bar, and if this is not true, it is certainly in conflict with the decisions of the Supreme Court of the United States in the Hopkins Case, supra, which authority I prefer to follow. In the Shoe Company Case the company assumed all of the risk of the goods. Here Tyson assumed no risk whatever. There the consignee was to pay the freight and expenses of selling and delivering to its customers. Here the produce company paid the freight and expense of resacking. There the shoe company guaranteed the rubber company against all losses from sales to the extent of the shoe company's profits. Here Tyson made no guaranty at all. There the shoe company agreed to pay the rubber company for the goods at agreed prices, which was so much below the prices at which the shoe company sold to its customers that it thereby secured a liberal commission. Here Tyson did not agree to pay for the shipment, or any part thereof. There the shoe company had an option to purchase at the termination of the contract all of the consigned goods in its possession. Here Tyson had no such option. There the shoe company's commission consisted of profits which it made over and above the agreed purchase price of the article sold. Here Tyson's commission consisted in a fixed amount per bushel for making the sale.
Much that was said in the shoe company opinion is obiter, and it is manifest that several of the illustrations therein used were used for that purpose only, and not intended to be declarations of law.
The other authorities cited in the majority opinion do not, in my opinion, support its holdings. Many of them are distinguishable from the case at bar on the facts; but it would prolong this opinion to undue length to discuss them seriatim. It is sufficient to say that I have been unable to find any case which holds that the acts of an agent doing business in a state which is not in its nature interstate commerce do not constitute doing business in such state by his principal. Holding these views, I am therefore unable to reach any other conclusion but that Tyson was the agent of the produce company for placing the potatoes on the market in Birmingham for said company, and that, when Tyson sold the potatoes, he sold them for and on behalf of the corporation; in other words, that it was the appellee selling through Tyson, and that Tyson's acts were not connected with or related to interstate commerce in such a way as to permit the appellee to claim protection of that provision of the federal Constitution, and therefore such conduct on his part for and on behalf of the appellee constituted doing business in this state by the produce company.
There being no contention that the company had complied with the laws of this state with reference to doing business therein, and it being admitted that it was a foreign corporation, I am of the opinion that the contract between it and Tyson was absolutely void (Code 1907, § 3653; Jones v. Martin, 74 So. 7611), and that therefore, for the reasons stated, the judgment rendered in favor of appellee was erroneous, and should be reversed, and one here rendered in favor of appellant.
1 15 Ala. App. 675. *Page 381