Opinion
No. 34801.
March 9, 1942.
CORPORATIONS.
Where sale of phonograph instruments by an Illinois corporation to Mississippi residents through a Texas distributor constituted an interstate transaction, Illinois corporation was not "doing business" in Mississippi by fact that distributor by its own independent action undertook to service the instruments and performed its agreements, and hence Illinois corporation was not precluded from suing to foreclose a chattel mortgage for purchase price of the instruments because it had not appointed a resident agent or filed a copy of its charter as required by statutes (Code 1930, secs. 4140, 4164).
APPEAL from the chancery court of Hinds county, HON. V.J. STRICKER, Chancellor.
Will S. Wells, of Jackson, for appellants.
The appellee performed or secured the performance of certain servicing and repair work on the property here in question after these machines had been delivered, installed and were in use. Certainly these acts were purely local in their nature and bring this case clearly within the scope of the case of Case v. Mills Novelty Company, 187 Miss. 673, 193 So. 625.
This court has held in numerous cases that the criterion by which it is determined whether or not a nonresident or foreign corporation is transacting business in the State of Mississippi within the purview of the statute is whether or not the act or acts involved are purely intrastate and local in their nature, or whether or not they are a part of interstate commerce or acts incidental to the completion of an interstate transaction.
19 C.J. 384; Browning v. Waycross, 233 U.S. 16, 34 S.Ct. 578; Mandel Brothers, Inc., v. Henry A. O'Neal, Inc., et al., 69 F.2d 452.
Heidelberg Gordon, of Jackson, for appellee.
Was the appellee "doing business" in the State of Mississippi in violation of Sections 4140 and 4164 of the Mississippi Code of 1930? It is not disputed that six of the seven conditional sales contracts which were covered by the "rewrite," being the note and chattel mortgage on which the case at bar was predicted, were fulfilled by shipment of the property from a point outside of the State of Mississippi to the defendants within the State of Mississippi, nor is it contradicted that before they became binding on J.P. Seeburg Corporation it was necessary for these contracts to be accepted by the Seeburg Corporation at its office in Chicago, Illinois.
It is well settled that contracts solicited in one state and transmitted to another state for final acceptance or rejection constitute interstate commerce regardless of the location of the property dealt with.
Dodds v. Pyramid Securities Company, Inc., 165 Miss. 269, 147 So. 328; Watson et al. v. J.R. Watkins Company, 188 Miss. 435, 193 So. 913; People Building Loan, etc., v. Berlin et al. (Pa.), 50 A. 308; North American Mortgage Co. v. Hudson, 176 Miss. 266, 168 So. 79; 144 C.J. 1281, par. 3991; 12 R.C.L. 72, Sec. 50; Clark on Corporations, p. 774; Refrigeration Discount Corp. v. Turley, 189 Miss. 880, 198 So. 731; 23 Am. Jur. 353, Ch. 370.
Foreign corporations may use any necessary means to protect an indebtedness growing out of interstate commerce.
Harleston v. West Louisiana Bank, 129 Miss. 111, 91 So. 423; Long Beach Canning Co. v. Clark et al., 141 Miss. 177, 106 So. 646; North American Mortgage Company v. Hudson, 176 Miss. 266, 168 So. 79; George v. Oscar Smith Sons Co., 250 F. 41; 23 Am. Jur. 356, par. 371; Union Cotton Oil Co. v. Patterson, 116 Miss. 802, 77 So. 795; C.I.T. Corporation v. Stuart, 185 Miss. 140, 187 So. 204; Refrigeration Discount Corp. v. Turley, 189 Miss. 880, 198 So. 731; Watson et al. v. J.R. Watkins Co., 188 Miss. 435, 193 So. 913.
Appellee, an Illinois corporation, sued to foreclose a chattel mortgage for the purchase price of certain phonograph instruments which it had sold to appellants through a nonresident distributing agent, the Electro Ball Company of Texas, and appellants interposed as their sole defense that appellee, a foreign corporation, was doing business in this state at the time of the contract and in respect thereto, without having appointed a resident agent, or filed a copy of its charter as required by Sections 4140 and 4164, Code 1930; and that, in consequence, appellee was and is barred from access to our courts for the enforcement of the contract.
Under the facts as shown in evidence, viewed in the light of the numerous decisions of this court, it is clear that appellee was not doing business in this state, but that its transactions pertinent to this case were interstate in character; and for the reason that this subject has so often been before the court and amply discussed, we would affirm without any written opinion, except for the feature next to be mentioned.
It is contended by appellants that after the receipt of the instruments in this state, appellee from time to time serviced them so as to keep them in proper repair and operation, and appellants invoked the principle announced by this court in Case v. Mills Novelty Co., 187 Miss. 673, 193 So. 625, 126 A.L.R. 1102. The proof is sufficient in support of the decree (1) that there was no such contract or undertaking on the part of appellee. On the contrary, so far as appellee was concerned, the mortgage by its express terms required appellants to keep the property in good condition and repair at mortgagors' own expense. (2) That appellees did not in fact service or repair the machines or their appurtenant equipment.
There is proof that the distributor, through whose efforts the instruments were sold by appellee to appellants and who was compensated by a sales commission, did have some sort of understanding with appellants that the instruments would be kept in repair by the distributor, and the distributor did from time to time render this service. This, however, was a separate and distinct undertaking and transaction solely between appellants and the distributor over which appellee neither had nor exercised any control, and about which, as already mentioned, appellee assumed no obligation whatever. It was done by the distributor at its own expense and by its own employees, and there is no suggestion that reimbursement therefor was to be made or was made by appellee. The sale of the property, for the purchase price of which this suit was brought, was an interstate transaction; and it was not made otherwise, so far as appellee was concerned, by the fact that the distributor by its own separate and independent action undertook to service the instruments, and performed its agreements. See Vest v. Night Commander Lighting Co., 24 Ala. App. 549, 139 So. 295, certiorari denied 224 Ala. 213, 139 So. 297.
Affirmed.