Vermont Farm Mach. Co. v. Hall

Mr. Justice Bean

delivered the opinion of the court.

At the close of the evidence plaintiff’s counsel moved the court for a directed verdict in favor of plaintiff. It is sufficient upon this point to state that the evidence tended to show that the note in suit was given as a renewal note for one theretofore given to the Farmers’ Implement Company, and that the old one was not canceled or returned as agreed.

1. If the action were brought by the Farmers’ Implement Company, it could not be successfully main*315tained that that company would he entitled to collect the note in question without surrendering the old one, as the evidence tends to show there was no other consideration for the new note, and that the agent of the plaintiff conducting the negotiations had knowledge of the facts mentioned. It was proper, therefore, to submit to the jury whether or not the plaintiff received the note in due course before the same was due, and there was no error in overruling the motion for a directed verdict.

2. There was no question raised by demurrer or motion as to the manner of interposing the plea in' abatement. In view of the fact that the provisions of the .statute in regard to permitting a foreign corporation to maintain an action in the courts of this state are intended to be in furtherance of the collection of state revenue, we do not deem it necessary to consider technical matters of the manner of pleading such inability when the same was not suggested in any way to the trial court by the parties. The requested instructions not being timely submitted, the matter of the trial of the plea in abatement recurs under the provisions of our Code.

3. Section 6709, L. O. L., provides that a plea that a foreign corporation has not paid any tax or fee required by any law of this state, and which is then due and payable, may be interposed at any time before trial upon the merits in any action, suit or proceeding, and if issue be joined upon such plea, the same shall be first tried. For authority that the plea in abatement must be tried before the trial on the merits, see Callender Nav. Co. v. Pomeroy, 61 Or. 343 (122 Pac. 758); Hirschfeld v. McCullagh, 64 Or. 502 (127 Pac. 241, 130 Pac. 1131); Big Basin Lbr. Co. v. Crater Lake Co., 63 Or. 359 (127 Pac. 982); Klamath Lbr. *316Co. v. Bomber, 74 Or. 287 (142 Pac. 359, 145 Pac. 650); Harrison v. Birrell, 58 Or. 410 (115 Pac. 141).

4. Section 6708, L. O. L., is to the effect that no foreign corporation which shall have failed to pay the last annual license fee as provided by the law of this state shall be permitted to maintain any suit, action or proceeding’ in any court of justice within this state while such delinquency shall continue. During the default of such corporation to file the required declaration or to appoint an attorney in fact upon whom service of process may be made or to pay the statutory fee, its right to prosecute an action or suit in our courts is suspended: Hirschfeld v. McCullagh, 64 Or. 502 (127 Pac. 241, 130 Pac. 1131); Shipman v. Portland Const. Co., 64 Or. 1 (128 Pac. 989). While the statute directs that the plea in abatement when issue is joined thereon shall be first tried, it is possible that if the court had submitted the question to the jury for determination separately, the harm would have been avoided. As the record now is, it is impossible to tell whether the jury based its verdict upon the merits, or found that the plaintiff had no right to maintain the action. This case illustrates the wisdom of the old rule in this state that the issue joined upon the plea in abatement should be interposed, tried and determined before an answer to the merits. In Callender Nav. Co. v. Pomeroy, 61 Or. 343 (122 Pac. 758), after commenting upon such a plea in abatement, Mr. Justice Burnett makes a pertinent suggestion by stating:

“Whether Section 6709, L. O. L., has so far modified the doctrine of Hopwood v. Patterson, 2 Or. 49, that a plea in abatement under that section may be filed at any time before the trial on the merits is not now necessary to be determined, because no such plea has been interposed here. It is plain, however, that *317the question must be raised by a plea, or Section 6709 would be meaningless. ”

It is possible that such a disability of a party might arise on account of a default of a foreign corporation after joinder of issues upon the merits and before the trial thereof, thus rendering it impossible for the defendant to interpose a plea before pleading to the merits. The cause should be tried upon the merits, and the determination thereof made a matter of record, separate and distinct from the matter of the plea in abatement. For this reason a new trial must be had.

Referring in a note to the case of Hopwood v. Patterson, 2 Or. 49, as an authority establishing that Oregon is not among the states which pursue the practice of trying the plea in abatement together with the trial upon the merits, Mr. Pomeroy, in his work on Code Remedies (4 ed.), Section 597, at page 829, further considers the subject in the following language:

“The only possible difficulty in the practical operation of this rule arises from the different effects of a judgment in favor of the defendant, rendered upon one or the other of these classes of defenses. As such, a decision upon the former class (plea in abatement) does not destroy the plaintiff’s right of action, nor prevent him from properly commencing and maintaining another suit for the same cause, while a similar decision upon the latter class does produce that final effect upon the right, and as by a general verdict given for the defendant upon all the issues contained in the record, and a judgment entered thereon, it might be difficult, and perhaps impossible to determine which of these results should follow from the judgment thus pronounced. It is plain that, at the trial of an action in which the answer unites the two kinds of defense, the judge should carefully distinguish the issues arising from them, and should submit them separately to the jury, and direct a separate and' special verdict *318upon each. By pursuing this course the record would show exactly the nature of the decision, and of the judgment entered thereon. This mode of procedure has been sanctioned by the highest courts.”

5. The trial court should have first tried and determined the issue joined upon the plea of the delinquency of the plaintiff, or if, without any objection and by common consent the same was heard together with the trial upon the merits, the question of the right of plaintiff to maintain the action should have been submitted and passed upon by the jury separately.

It is urged by counsel that all the transactions involved herein were purely interstate commerce, and that it was error to submit to the jury the matter of the right to maintain the action. From the evidence on behalf of plaintiff we think it may safely be conceded that its business, which is the subject of inquiry herein, was in its nature strictly interstate commerce, and not subject to the burdens imposed by the statute. Some of the testimony on the part of defendant might possibly be construed as indicating that plaintiff was transacting business in the State of Oregon. Pages 13 et seq. of the bill of exceptions show that witness Heitzman stated to the effect that after he severed his connections with the Farmers’ Implement Company people, he went to work as salesman for the Vermont people; that the business was conducted by procuring an order in regular form and sending it to Portland, and from there they attended to the shipment and the like; that he did not think they wired back all the orders; that to his knowledge, in some instances, orders were filled which were not wired to the head office prior thereto. He also said that many times while he was a salesman for the company, when they wanted some part of a separator which his com*319pany did not have in stock, upon the latter’s requisition they would go to the warehouse and open a box and “rob a cream-separator” of the part desired, such as a bowl, and when they got a replacement of these bowls they would replace it. It appears that repair parts were kept by the Farmers’ Implement Company for sale for plaintiff on commission, title to the same remaining in the plaintiff.

6. The testimony upon a new trial may not be the ■ same, but it may be necessary for us to note some of the rules relating to interstate commerce in-such cases, although it appears that the learned trial judge plainly charged the jury in regard thereto. Transportation of property from a point in one state to a point in another is an indispensable element of interstate commerce. But the mere act of such transit is not all. A right to be free from state hindrance in the shipment of goods from state to state would be of little value if the sale of the goods after arrival was subject to burdensome state control. A right to solicit orders for goods to be shipped in, to fill such orders is a necessary part of the interstate sale of commodities. Every negotiation, contract, trade and dealing between citizens of different states, which contemplates and causes such importation, is a transaction of interstate commerce: 12 M. A. L. 211; Robbins v. Shelby Co. Tax Dist., 120 U. S. 189 (30 L. Ed. 691, 7 Sup. Ct. Rep. 592); Crenshaw v. Arkansas, 227 U. S. 389 (57 L. Ed. 565, 33 Sup. Ct. Rep. 294); Butler Bros. Shoe Co. v. United States Rubber Co., 156 Fed. 1-17 (81 C. C. A. 167); International Text-Book Co. v. Bigg, 217 U. S. 91; 107 (51 L. Ed. 678, 30 Sup. Ct. Rep. 181, 18 Ann. Cas. 1103, 27 L. R. A. (N. S.) 193).

7. While the state has power to require any corporation doing business in the state to seeure a license, *320it has no power to interfere with interstate commerce. The right to demand and enforce payment for goods sold in interstate commerce is so directly connected with snch commerce, and is so essential to its existence and continuance, that the imposition of unreasonable conditions upon this right must necessarily operate as a restraint or burden upon interstate commerce: Sioux Remedy Co. v. Cope, 235 U. S. 197 (59 L. Ed. 193, 35 Sup. Ct. Rep. 57); Buck Stove & Range Co. v. Vickers, 226 U. S. 205 (57 L. Ed. 189, 33 Sup. Ct. Rep. 41); Chambers v. Baltimore & Ohio R. R. Co., 207 U. S. 142, 148 (52 L. Ed. 143, 28 Sup. Ct. Rep. 34); Western Union Tel. Co. v. Kansas, 216 U. S. 1, 27 (54 L. Ed. 355, 30 Sup. Ct. Rep. 190).

8. - A foreign corporation' which places its products shipped from another state in the hands of local merchants in this state to be sold on commission is engaged in interstate commerce: Allen v. Buggy Co., 91 Tex. 22 (40 S. W. 393, 714).

9. Taking orders to be filled by shipment of goods from another state or making sales by sample, by agents coming into the state from another state for that purpose, is not doing business within the state, but is interstate commerce with which our statute was not intended to interfere: Ware v. Hamilton Brown Shoe Co., 92 Ala. 145 (9 South. 136); Brennan v. Titusville, 153 U. S. 289 (38 L. Ed. 719, 14 Sup. Ct. Rep. 829).

In Boardman v. S. S. McClure Co. (C. C.), 123 Fed. 614, the question was in regard to service of process upon a foreign corporation which, under the statute of Minnesota and the acts of Congress, must be made upon some agent who is transacting, its business within the state. In the opinion we notice that in order for an agent to be transacting business for such foreign *321corporation within the state, he must transact “some reasonable portion of the business” and have charge in respect to it. So in the case at bar. It appears that plaintiff’s general manner of transacting business was for its salesman to solicit and obtain orders for the sale of separators to local dealers, and forward the same to the plaintiff’s home office at Bellows Falls, Vermont, for acceptance, and that no agent in Oregon had authority to complete a sale or interfere with the shipment of goods, although Agent Swanson could exhibit separators to prospective purchasers. Therefore, in order to constitute doing business within this state by plaintiff, its agent must have had ample authority to transact some substantial portion of plaintiff’s business; that is, make complete sales here, and not merely take orders for goods: Hirschfeld v. McCullagh, 64 Or. 502 (127 Pac. 241, 130 Pac. 1131).

10-12. We do not think that the “robbing of a separator” or the borrowing of fixtures from goods in the original crates or boxes by agents, to be replaced afterward, without the sanction of the plaintiff being shown, would, of itself, change the nature of the transaction from interstate to intrastate commerce. The real character of plaintiff’s business would control in the premises. If it maintained an office and stored its goods in a warehouse in the state, and, through its agents, made sales direct from such repository, no doubt it would be doing business within the state as contradistinguished from commerce between different states: Boardman v. S. S. McClure Co. (C. C.), 123 Fed. 614, 617. Providing an agent with an office as a convenient place for supervising solicitors of orders for sales and as a kind of a base for advertising, while a circumstance to be considered with other pertinent facts, would, in our opinion, not *322alone determine the nature of its business. In the face of the evidence of Heitzman, tending to show that sales were made direct from the warehouse by plaintiff’s agents without consultation in regard thereto with the home office, it was not error for the court to refuse to determine the question as a matter of law: Boardman v. S. S. McClure Co. (C. C.), 123 Fed. 614, 617); Ex parte Case, 70 Or. 291 (135 Pac. 881, 141 Pac. 746, Ann. Cas. 1916B, 490). In the latter case vehicles were shipped from G-rinnell, Iowa, to Rose-burg, and stored in a warehouse and sold in Oregon by agents. At page 298 of 70 Or., at page 883 of 135 Pac., of the opinion therein, Mr. Justice Eakin says •'

“When the goods were unpacked at Roseburg, they became a part of the general mass of property in the state, and were subject to the state laws as other property within the state. They lost their character as interstate shipments when delivered at their destination and offered for sale”—citing May v. New Orleans, 178 U. S. 496 (44 L. Ed. 1165, 20 Sup. Ct. Rep. 976), •and noting that In re Kinyon, 9 Idaho, 642 (75 Pac. 268, 2 Ann. Cas. 699), a similar case, makes the distinction that where the goods at the time of the sale are within the state and under the control and care of an agent, both the property and the business are within the jurisdiction of the state and subject to its regulation.

It should be remembered that in the present case the evidence of plaintiff tended to prove that the goods were shipped from Vermont and stored at the terminal point, in the aid, as it may be, of rapid transit, merely anticipating orders of sale. They were not in the care of, or under the control of, the plaintiff’s agent, who had no authority to extend credit for goods. The original packages were not broken, and were sold only upon authority from plaintiff in Vermont. In passing, it might be possible that the question propounded to defendant, Hall, upon cross-exam*323illation, as to whether he had made a request of the .Farmers ’ Implement Company for the old note, if answered, would have led to some material information as to the location of the note. Not that a demand therefor was essential, but, for instance, to ascertain whether it was in some office and the return to the defendant had been overlooked. We do not deem the exclusion of the answer very important.

We discover no other assigned errors that are likely to occur upon a retrial. In order that the issue joined upon the plea in abatement may be first tried, and that if a trial upon the merits becomes necessary, it may be made a matter of record separate from the preliminary question, the judgment will be reversed and the cause remanded for a new trial.

Reversed.

Mr. Chibe Justice Moore and Mr. Justice Benson concur. Mr. Justice Harris concurs in the result.