Sloan v. Miami Margarine Co.
Sloan v. Miami Margarine Co.
Opinion of the Court
Suit in the trial court was by Miami Margarine Company, an Ohio corporation, upon sworn account for packaged margarine sold to appellant Archie Sloan, d/b/a Texas Meat and Provision Company. Defendant interposed two motions to dismiss said cause; one, on .the ground that appel-lee was doing business in the State of Texas without a permit; the second, asserting that the transaction sued upon arose out of an agreement between the parties in violation of the Anti-Trust Laws of Texas. Subject to these motions, defendant filed answer inclusive of sworn denial of account; also a counterclaim for damages, alleging a breach of his exclusive contract to handle plaintiff’s margarine in Dallas and adjacent territory. By stipulation the motions were held in abeyance pending trial to the merits. Thereafter, both parties filing. motions for judgment on the jury verdict, all motions of defendant were overruled with judgment rendered for plaintiff in amount sued for, and a consequent appeal. For convenience, the parties will be referred to as in the trial court, or by name.
Jury issues and answers were in substance that in August 1947, Miami Margarine Company agreed to sell its Nu-Maid margarine to Texas Meat and Provision Company exclusively in Dallas and adjacent territory; but did not require of defendant the sale of its product (Nu-Maid) exclusively to retail stores nor that Golden-Maid- margarine- be sold by defendant exclusively to cafes and cafeterias. No point is made, by either side concerning sufficiency of evidence to support these findings. The balance of account sued on and unpaid was agreed upon as $3,254.06; in consideration of which defendant was permitted to open and close argument with respect to-his defenses. Plaintiff, admittedly without permit contemplated by Art. 1529, Vernon’s Ann.Civ.St, had been engaged in the outright sale of margarine in Texas since around 1939; its business procedure being generally to require that all orders taken by soliciting agents or otherwise be transmitted to the Home Office, Cincinnati, where, upon acceptance, the same would be filled and shipments made to designated Texas distributors or jobbers via truck and other common carriers. Thus far the interstate character of plaintiff’s dealings is not questioned; defendant claiming however that in connection with his distributorship, plaintiff is engaged in transactions of purely local concern which in effect constitute the doing of business in Texas without a permit in violation of the cited statute.
These co-called domestic activities will be outlined briefly: Along with the selection of defendant as distributor in the Dallas territory, plaintiff Company agreed to pay salary and expense of a man to wo-rk along with Sloan and his salesmen on both wholesale and retail levels to the end of increased sales, which arrangement continued for several months. A system of advertising was agreed upon with particular reference to its Nu-Maid brand, and through the distributor, extending to retail stores handling plaintiff’s -products, with cost thereof to be borne equally by plaintiff and defendant. These dealings were initiated and carried on by -Heidrich, plaintiff’s vice president, and Coy, its Southern Supervisor, through personal conversations with defendant Sloan, effective only through confirmation at the Home Office. There were also several occasions for plaintiff Company to store quantities of its merchandise in public warehouses, explained by witnesses in this wise: That in one instance, by mistake, an oversupply was shipped to its Fort Worth jobber, and in two other cases the distributors had ceased handling the product, -requiring a transfer of the returned merchandise to cold storage (being highly perishable) until later disposed of through orders of other distributors.
It will be observed that no jury issues were requested by defendant under his plea in abatement charging violation by plaintiff of Art. 1536, V.A.C.S., which prohibits the maintenance of suit by a foreign corporation based on intrastate transactions without having first obtained a permit. The trial court has overruled such plea with the result that the ruling must stand under the doctrine of implied findings which, in turn, have support in the record. Without general rehash of testimony incident thereto, there was no maintenance of a special office by Harris, employed by plaintiff as a “pusher” for defendant’s sales of margarine, or a general office by Ezell, brokerage agent of plaintiff from July through December 1947, within meaning of the statute. Art. 1529. And the employment of Harris by defendant, but paid for by plaintiff to work in conjunction with local salesmen of Sloan to the end of increasing his margarine sales, is not tantamount to the transaction of intrastate business in any statutory sense. ■ “Nor does the contract between the parties as above set forth and the attempted compliance therewith on the part of appellant alter the case. The coffee was first sold direct to appellees by appellant, whereby it became the property of the former, and the fact that appellant’s agents did thereafter assist appellees’ drummers in making sales thereof to their customers within this state did not render it subject to- the statute invoked by appellees.” (Emphasis ours.) Maury-Cole Co. v. Lockhart Grocery Co., Tex.Civ.App., 173 S.W. 262, 263.
With reference to the co-operative advertising, charged as transactions of intrastate business, the contracts were likewise between defendant and retail outlets, and though on forms suggested by plaintiff, the expense thereof was subject to approval and payment from the Cincinnati office and thereby of • interstate character. Similarly so, as to plaintiff’s temporary storage of merchandise in public warehouses—being viewed as matters ordinarily incident to interstate sales. The statute has no application where the activities in question are merely incidental to the interstate element of the transaction and essential to its completion. 20 C.J.S., Corporations, § 1840, page 58; York Mfg. Co. v. Colley, 247 U. S. 21, 38 S.Ct. 430, 62 L.Ed. 963, reversing Tex.Civ.App., 172 S.W. 206.
Appellant argues that this voluminous record reflects divers violations of Arts. 7426, 7427 and 7428, V.A.C.S., Texas Anti-Trust Laws. However, we may properly consider only the infraction suggested by jury answer to issue No. 1 that plaintiff “agreed to sell Nu-Maid margarine to Texas Meat and Provision Company exclusively in Dallas and adjacent territory”; all other facts having been impliedly found by the court in favor of the judgment rendered. There was no agreement that defendant’s, sales, in turn, should be restricted to plaintiff’s margarine products, it being undisputed that Sloan was handling simultaneously other competitive brands; also that plaintiff had many distributor» outside of Dallas and its suburban district. Testimony in the same connection amply
Appellant’s third point — refusal to submit issues raised under his cross action— must be considered in view of these attendant facts: It seems to be conceded that at close of testimony, all parties including the court were of the opinion that a finding of exclusive contract (Issue No. 1) would be controlling of the entire case and favorable to defendant; and, relying upon an understanding to such effect, defendant’s counsel did not request issues on his cross action; that thereafter, and despite a favorable answer to issue No. 1, judgment was entered on the entire case for plaintiff, for which reason defendant has suffered material injury, in that he has been deprived'of a hearing or jury findings on the merits of aforesaid counter suit. Paragraph 3 of defendant’s cross action charges a wrongful breach of his exclusive contract' with plaintiff for handling its margarine -products: In substance that, unknown to him, plaintiff on November 1, 1948 transferred such exclusive distributorship to George A. Hormel & Company along with advertising benefits and promotional services in aid of the Hormel account; that thereafter plaintiff’s salesmen sold to defendant a large bill of goods (the balance of account now sued on), not notifying him until November 22 that his jobber’s contract with Miami Margarine would terminate December 1, following. Under other allegations defendant claimed damages at $12,800 in being deprived of a margarine market and profits, and, in particular, of having been forced to sell at least 6,000 lbs. of the product at a substantial loss. In this connection the court’s judgment denied generally any recovery on defendant’s cross action, with issues later tendered thereon marked “Refused.”.
A sales contract such as we have here, being of indefinite duration, is of course subject to termination at any time. Byrd v. Crazy' Water Co., Tex.Civ.App., 140 S.W.2d 334. It may be, however, that there are actionable features arising from plaintiff’s alleged secret shift of distributorship during November 1948 prior to its notice to defendant November 22 canceling his exclusive connection as of December 1. Concerning the merits of such cross action, we express no opinion, it being presently a matter for determination by the trial court. Error, if any, having reference only to this part of the controversy, and such claim be
Affirmed.
070rehearing
On Rehearing.
Appellant calls attention to some inaccuracies of fact apparent in original opinion which will be corrected; not affecting however the conclusions of law there stated. While Heidrich, vice president of Miami, on a trip to Dallas in November 1947, confirmed Sloan’s exclusive distributorship as made by Coy in August previously, we took from appellant’s brief the further statement that said initial agreement was “subject to approval by the Home Office”; see also statement of 'facts, p. 88. Our reference to Harris as a “pusher” in promotion of defendant’s sales is withdrawn. Another party was employed in this capacity; said Harris merely living on Vickery Boulevard, Dallas, while working for Miami, where he received and answered all correspondence. We are cited to no record basis for appellant’s assertion that the Company “always sent fully loaded trucks o'f merchandise to Texas, whether a full load had been ordered or not.”
Appellee, in turn, strenuously complains of our reversal of cause in so far as same relates to defendant’s cross action. In course of plaintiff’s objections to these requested issues, it was admitted that there was only a verbal discussion thereof and “that by agreement of- all parties and with approval of the court, it has been agreed and is not denied by the plaintiff that- defendant might submit issues as he alleged in paragraph 2 of said first amended motion for new trial with reference to the breach of ‘such agreement and damages,’ viz., the alleged agreement on ‘August 1947’ * In the same connection we express no opinion as to sufficiency of these issues, either in form, substance, or materiality; such being a - matter for determination by the trial court on due hearing of such cross action. The motions ¡for rehearing filed by respective parties are in all respects overruled.-
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