# S. Howes Co. v. W. P. Milling Co.

> Supreme Court of Oklahoma · July 7, 1954 · 277 P.2d 655

URL: https://www.frixlaw.com/law-library/cases/9625366

## Case

- **Full name:** S. HOWES CO., Inc. v. W. P. MILLING CO.
- **Court:** Supreme Court of Oklahoma
- **Decided:** July 7, 1954
- **Citations:** 277 P.2d 655; 1954 OK 217; 1954 Okla. LEXIS 712
- **Precedential status:** Published
- **Opinion:** Dissent by Davison
- **Judges:** Johnson, Welch, Corn, Arnold, Blackbird, Halley, Davison, O'Neal, Williams
- **Cited by:** 28 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Overruled by Marathon Battery Company v. Kilpatrick, 1965 Okla. LEXIS 253 (1965).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9625366

## Opinion text

DAVISON, Justice
(dissenting).
I do not concur in the opinion of the majority of the court in this case and desire to express my reasons therefor. I do not agree with the very broad rule therein adopted, defining the meaning of the term “doing business” as used in 18 O.S.1951 § 472, nor do I think the defendant herein was doing business within this State under either definition, whether broad or restricted.
For many years, the law of this State, regarding such situations, has been that stated in the case of Harrell v. Peters Cartridge Co., 36 Okl. 684 , 129 P. 872, 876 , 44 L.R.A.,N.S., 1094, wherein the words of the Federal Circuit Court were quoted and approved, as follows:
“ ‘Any law which provides that the sale of goods by a foreign corporation through soliciting agents, who take orders subject to approval at the home office, is doing business within the state, is void, because it is an interference with interstate commerce.’ Davis & *659 Rankin Mfg. Co. v. Dix (C.C.), 64 F. 406 .”
That rule was recognized and the guideposts for its application were enumerated and explained in the case of Wills v. National Mineral Company, 176 Okl. 193 , 55 P.2d 449 , 453 cited in the majority opinion herein. This last cited case does not support the views expressed in the majority opinion in the case at bar, as is apparent from the following excerpt therefrom:
“Business is largely the barter, sale, or exchange of things of value, usually property. ‘Doing’ business is therefore the engaging in such pursuit. The doing of business involves not only the ownership, possession, or control of property, but such functions as dealing with others in reference to the property, the exercise of discretion, the making of business decisions, the execution of contracts. It includes the functions of marketing the product, by advertising and solicitation, and of collecting for the sold product. It may conservatively be said that wherever an important combination of these functions is being performed, business is being done. * * * ”
' That rule has, in effect, been adopted in a majority of the jurisdictions. It was more recently expressed in different language by the United States Court of Appeals for the Tenth District, in the case of Steinway v. Majestic Amusement Co., 179 F.2d 681 , 18 A.L.R.2d 179 , as follows:
“Each case must be determined on its own facts but general rule is that to constitute ‘engaging in or transacting business’ in the state so as to be found or present for purposes of personal service, a nonresident corporation’s activity there must be substantial, continuous and regular as distinguished from casual, single or isolated acts.”
By implication, the opinion of the majority adopts the very broad rule that “ ‘very little more than “mere solicitation” is required * * *’ to render a foreign corporation “present” for jurisdictional purposes’ ”, which appears, therein, in a quotation from the case of Marlow v. Hinman Milking Machine Co., D.C., 7 F.R.D. 751, 753 . I do not believe that the-Harrell ease and the Mills case should be so modified or overruled. But, if that be the-desire of the majority of the court, I think it should be clearly so stated in order to-avoid much future confusion.
However, it makes no difference in the case now before us whether we follow the established rule or -adopt the broad interpretation favored in the majority opinion.. The defendant was not answerable to service of process in this State and no case is cited, wherein the facts are analogous to. those herein.
/ A corporation can only act through its officers and agents. The deiendant strenuously denies that it had any agent in Oklahoma through whom it was doing business here. This brings us to a determination of whether or not McGavren acted as an agent for defendant. He was an-independent machinery broker dealing with the products of many manufacturers on commission. He was not an employee or recognized agent -of the defendant. His every act, as disclosed by the record, was for the benefit of plaintiff. I cannot agree that his relationship to either party was that of an agent, and, certainly, not of defendant. Plaintiff was in need of a certain-machine. Because of numerous business, transactions with him, plaintiff’s manager ' sought Mc-Gavren’s help. He made investigation and did find a machine he thought was suitable. He secured explanatory data and an order blank which he forwarded on to plaintiff with his recommendation as to size and type. This was the information plaintiff had requested from him. To further serve plaintiff, he suggested that the order be completed and returned to him and he would send it to defendant for acceptance or rejection. That did not make him defendant’s agent.
His next act was when plaintiff was requested to designate the desired route of shipment. He worked that out for and with plaintiff and instructed defendant to ship over said route. All mail order houses request a buyer to express preference in such matters. After the machine was delivered he reminded plaintiff of the saving *660 it could make by way of discount, if the purchase price was paid within a limited time. He mailed plaintiff’s check to defendant. These acts did not mark him as defendant’s agent.
When the machine did not properly function, he went to Muskogee to get first hand information, after being called by plaintiff. After seeing the condition, he notified the defendant, which plaintiff otherwise would have had to do. I do not think that conduct made him an agent of defendant,
My conclusion is that McGavren was not an agent and that the following statement made in the syllabus of the majority opinion is erroneous pnd unsupported by the record, to-wit:
“ * * * and the manufacturer, after a long distance telephone conversation with its Oklahoma broker (or agent) * * * ”
Since McGavren was not an agent, the only action of the defendant in Oklahoma had to be the acts of the only person who was an agent — the salesman from Kansas City who was sent to investigate the fire. His only act in this State was to investigate and report to the defendant. Under no intrepretation could those acts be construed as the “doing of business”.
The majority opinion states the true test “as to what activities will subject the foreign corporation to suit is 'qualitative’ not simply ‘mechanical’ or ‘quantitative’. Marlow v. Hinman Milking Machine Co., D.C., 7 F.R.D. 751 * * In every case cited in the majority opinion wherein service was attempted, and the corporation was held to be doing business within the state, the corporation had one or more resident employees or agents actively performing some necessary function in the state. In the instant case, the only act done by an agent in Oklahoma was that the Kansas City salesman came down after the fire to look and report.
Turning now to the cases cited in the majority opinion, the Wills case has been hereinabove distinguished. In the case of International Shoe Co. v. State of Washington, 326 U.S. 310 , 66 S.Ct. 154, 157 , 90 L.Ed. 95 , the facts were that:
“* * * appellant employed eleven to thirteen salesmen under direct supervision and control of sales managers located in St. Louis. These salesmen resided in Washington; their principal activities were confined to that state; and they were compensated by commissions based upon the amount of their sales. The commissions for each year totaled more than $31,000. Appellant supplies its salesmen with a line of samples, each consisting of one shoe of a pair, which they display to prospective purchasers. On occasion they rent permanent sample rooms, for exhibiting samples, in business buildings, or rent rooms in hotels or business buildings temporarily for that purpose. The cost of such rentals is reimbursed by appellant.”
In the cited case, therefore, approximately a dozen residents of the state were employed full time for displaying merchandise and soliciting orders.
The case of Jeter v. Austin Trailer Equipment Co., 122 Cal.App.2d 376 , 265 P.2d 130, 131 , is readily distinguished from the case at bar by analyzing the facts therein, as stated in the 6th syllabus, as follows:
“Where person had solicited orders at behest of foreign corporation, and corporation had kept merchandise within state and had filled orders from local stock, and had partially contributed to payment of such person’s business rental, and there had been a judicial determination that corporation was doing business within the state so as to be amenable to service of process, even if corporation thereafter had discontinued keeping stock within the state and had discontinued payments toward such person’s rental, in view of fact that it had thereafter continued to retain such person for solicitation of orders, corporation was ‘doing business’ within the state and was amenable to service of process.”
The same is true of the case of Kneeland v. Ethicon Suture Laboratories, Inc., *661 118 Cal.App.2d 211 , 257 P.2d 727 , wherein the 2nd syllabus is, as follows:
“Foreign corporation engaged in manufacture of surgical supplies, whose employees, engaged in sales promotion work within state, did just about everything that full-fledged sales agents might do except taking of orders, delivery of goods, and collection of sales price, could, without doing violence to due process requirements, be subjected to jurisdiction of court within state.”
The case of Marlow v. Hinman Milking Machine Co., supra, is primarily relied upon and quoted from as supporting the majority view in the case at bar. Therein, the defendant foreign corporation employed a number of full time workers, residents of Minnesota, hired in said state to work in said state. They sold defendant’s product to dealers, but their “duties extended far beyond merely soliciting orders. They were more than mere salesmen. Their duties included arranging with the dealers for, and encouraging, advertising by the dealer. Defendant furnished mats for those advertisements free of charge. The block-men also advised and aided dealers who needed help in setting up milking units, and helped place them in operation on the farms of those purchasing units. They were required to make certain that the dealers used the authorized repair station, and that the dealer understood and used the factory repair service. At various times the blockmen, pursuant to their employment contract with defendant, even performed minor repairs and alterations and service upon the milking machines. They also were required to aid dealers in shipping equipment requiring repair work by the factory. The evidence further shows that the blockmen arranged for new dealerships and sometimes cancelled existing ones. The record does not show that defendant objected to any of these activities, or did not authorize them. Likewise, the ‘block-men’ determined the dealers who should receive .credit privileges. That is, credit privileges were extended to the dealers by defendant only upon approval of the ‘block-man’ in the area and after consideration of the matter by the ‘blockman.’ Thus, it seems apparent that the ‘blockman’ was the determiner of credit practices with respect to his dealers, at least when credit was first extended to him. Other duties also were performed by the blockmen. Plaintiffs’ Exhibit 26, for example, is a letter directing one blockman to pick up one of the defendant’s signs from a certain location and to ‘endeavor to sell it to some other dealer.’ ”
I have been unable to find any case from any jurisdiction, including those cited in the majority opinion, wherein facts comparable to those herein identified the defendant as doing business in the state even where the acts were performed by a regular agent or employee. In the instant case, McGavren was no employee. He was an independent broker whom plaintiff asked to recommend a suitable machine.
Not only should the courts of a particular state “have jurisdiction over all disputes arising out of contracts made (or to be performed) within the state” (as stated in the majority opinion) but they do have such jurisdiction. Here, however, the contract was made in the State of New York when the defendant accepted the order. It was performed in the State of New York when the merchandise was delivered to the carrier, for delivery to plaintiff. As pointed out above, I need not, in the instant case take issue with the rule adopted, regardless of how broad it is, because it could have no application here. An out-of-state agent coming into Oklahoma to inspect a machinery installation does not constitute the doing of business by his foreign corporation employer who had sold the machine in New York, and, there, delivered it to the carrier for delivery F.O.B. to the purchaser.
I do not think the trial court had jurisdiction of the defendant, and, therefore, respectfully dissent.
I am authorized to state that the dissenting views in this opinion are concurred in by HALLEY, C. J., and O’NEAL and WILLIAMS, JJ.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9625366. Public record. Not legal advice.