This is an appeal from a judgment for the plaintiff in two consolidated actions brought to recover a portion of the franchise tax paid to the State of California by plaintiff on its statutory net income for its fiscal year ending April 30, 1935.
Plaintiff is a corporation organized under the laws of West Virginia, and authorized to transact business in California. Its only office and place of business is in Orange County, California, where it owns a large tract of land and is engaged in the business of raising, harvesting, preparing for market and selling horticultural and agricultural products. During 1935, some of plaintiff’s products were marketed in California, but the greater portion thereof was marketed outside of the state in the following manner:
(1) Citrus fruits, avocados and walnuts were sold by plaintiff under marketing agreements with various local nonprofit cooperative marketing associations of which plaintiff was a member or stockholder. Pursuant to those agreements, plaintiff delivered the fruit to local associations which cleaned, graded, packed and shipped the same to marketing centers or points outside the state. Citrus fruit was shipped from the associations’ packing houses in California to other states or foreign countries where it was sold from railroad or steamship terminals through the facilities of the California Fruit Growers Exchange, a cooperative with which the local associations were affiliated and which acted as the latters’ sales agency. The fruit was shipped under negotiable bills of lading, consigned to the exchange or to independent produce brokers who were engaged by the exchange to sell fruit on a commission basis. Sales at public auction and private sales were conducted by such brokers or by employees of the exchange. *162Subject to a minimum asking price specified by the shipper and the right of withdrawal reserved by the exchange, the prices and quantities of fruit sold were determined at the time and place of sale by the brokers or employees without prior confirmation from plaintiff or the associations. Proceeds from such sales were collected by the brokers or employees, who, after deducting freight, storage, sales, insurance, taxes and other expenses, including brokerage fees or commissions, transmitted the balance to the exchange. Thereafter in the ordinary course of business plaintiff received from the local associations its pro rata share of the proceeds less its pro rata share of expenses. Walnuts were handled in a somewhat similar manner, being consigned to the California Walnut Growers Association, stored in warehouses in its name, and later withdrawn and sold exclusively at private sales by independent brokers engaged by it on a commission basis. Avocados were marketed in a slightly different manner in that after arrival at their destination they were stored in warehouses in the name of the local association and thereafter withdrawn and sold by it at private sales.
(2) The bulk of plaintiff’s bean crop was prepared for market and shipped by plaintiff to out-of-state destinations where it was stored in warehouses or at railroad and steamship terminals and thereafter sold by brokers on a commission basis. Such produce was consigned to plaintiff on negotiable bills of lading or to independent produce brokers. Subject .to a minimum asking price specified from time to time by the shipper, sales were made at prices and in quantities determined by the brokers without prior confirmation from plaintiff. The brokers collected the proceeds and, after deducting freight, storage, sales, insurance, taxes and other expenses, including their commissions, transmitted the balance to plaintiff in California.
(3) A portion of plaintiff’s bean crop and other vegetables were prepared for market and shipped by plaintiff to points outside California consigned to purchasers on bills of lading with sight drafts attached. Proceeds from such sales were forwarded to plaintiff by collecting banks.
In July, 1935, plaintiff filed a franchise tax return and paid to the state a tax measured by its total statutory net income for the year. In 1937, it filed a claim for refund on the ground that it had done business outside as well as within California *163during 1935 and, accordingly, its tax should have been measured only by that portion of net income reasonably attributable to business done within the state. Plaintiff’s claim was rejected, whereupon the present action was commenced. The parties having stipulated to the facts heretofore recited, the trial court held that under the taxing statute plaintiff was entitled to “allocation of .some portion of its statutory net income . . ., thereby entitling plaintiff to refund of some portion of the franchise tax.” The question of the extent of allocation and other issues relating thereto were then submitted to the court on a supplemental stipulation of facts. On the basis of a three-factor formula consisting of property, expenses and sales, it determined that only 56.08 per cent of plaintiff’s net income, representing the proceeds from the sale of its products both within and without the state, was derived from or attributable to business done within the state. Judgment was entered for plaintiff in the sum of $7,884.93, the difference between the amount paid and the amount found due.
The California Bank and Corporation Franchise Tax Act (Stats. 1929, p. 19; Deering’s Gen. Laws, 1937, Act 8488), imposes upon corporations doing business in this state a tax, measured by net income, for the privilege of exercising their corporate franchises within the state. The term “doing business” is defined therein as “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.” (§5.) Section 10 provides that “If the entire business of the . . . corporation is done within this State, the tax shall be according to or measured by its entire net income; and if the entire business of such . . . corporation is not done within this State, the tax shall be according to or measured by that portion thereof which is derived from business done within this State.”
The primary question on this appeal by defendant is whether within the meaning of section 10 of the act plaintiff was doing business outside of California as well as in California so as to be entitled to have its franchise tax measured by only a portion of its net income. Defendant contends that since plaintiff had no place of business, property, or regular employees outside this state, raised its produce and prepared the same for market entirely within this state, and here received the proceeds from extrastate and interstate sales, it carried on its corporate activities and was “doing business” *164only in California. He argues that sales in other states were made by purchasers of plaintiff’s produce or by independent contractors, and that interstate sales transactions are to be regarded as business done in this state. On the other hand, plaintiff contends that its products were marketed outside the state in such a manner as to constitute the transaction of business by it outside of California. It argues that extrastate sales transactions or activities were carried on by plaintiff through its authorized agents, that the consummation of interstate sales entitled it to allocation, and that a tax on its entire net income would be void under the commerce and due process clauses of the United States Constitution to the extent that proceeds from interstate sales entered into the measure thereof.
As previously noted, three types of transactions figured in the marketing of plaintiff’s products outside of California—viz., sales through the medium of cooperative marketing associations, sales by independent produce brokers, and sales in the channels of interstate commerce. With respect to transactions of the first type by which plaintiff disposed of its fruit crops, the parties are in conflict as to whether marketing agreements between plaintiff and the cooperative association created the relationship of seller and buyer or principal and agent. It is generally recognized that there are two kinds of cooperative marketing agreements, sales and agency, and that the determination of whether a particular agreement is to be classified as one or the other depends upon the intention of the parties thereto. (United States v. Rock Royal Co-op., 307 U.S. 533 [59 S.Ct. 993, 83 L.Ed. 1446]; Yakima Fruit Growers’ Assn. v. Hall, 180 Wash. 365 [40 P. 2d 123]; Spencer Co-op. Live Stock Shipping Assn. v. Schultz, 209 Wis. 344 [245 N.W. 99] ; 98 A.L.R. 1413; Treadwell, The Law of Co-operative Marketing, 15 Cal.L.Rev. 85.) In California, however, cooperative marketing agreements have been classified or construed as contracts of agency even when, as in this case, they contained language of sale. (Poultry Producers v. Barlow, 189 Cal. 278 [208 P. 93]; Poultry Producers v. Murphy, 64 Cal.App. 450 [221 P. 962].) But whether such agreements are to be so classified in all cases, and whether the agreements in the present case should be construed as contracts of agency or sale, need not be determined, for even if it be assumed that an agency relation ex*165isted, it does not follow that plaintiff was “doing business” outside of California within the meaning of section 10 by reason of the cooperative associations’ activities in other states.
Transactions engaged in for a foreign corporation in a state are not necessarily engaged in by the corporation in that state. As stated in Union Internationale De Placements v. Hoey, 96 F.2d 591, 592, “business transactions within the taxing jurisdiction for the account of a foreign corporation do not necessarily involve the doing of business within the jurisdiction.” Thus, although factors or commission merchants are agents, it has been held that their activities in a state do not constitute the doing of business therein by the foreign principals they represent within the purview of statutes imposing franchise or license taxes. (People v. Roberts, 48 N.Y.S. 1028; City of Atlanta v. York Mfg. Co., 155 Ga. 33 [116 S.E. 195]; cf. People v. Gilchrist, 244 N.Y. 114 [155 N.E. 68]; 61 C.J. 339.) Support for this position is found in the analogy afforded by decisions to the effect that foreign corporations are not doing business so as to be subject to the qualification laws of, or amenable to process in, states to which their products have been consigned for sale and sold by factors or commission merchants. (Bartling Tire Co. v. Coxe, 288 F. 314; Mitchell Wagon Co. v. Poole, 235 F. 817 [149 C.C.A. 129]; Butler Bros. Shoe Co. v. United States Rubber Co., 156 F. 1 [84 C.C.A. 167]; Republic Steel Corp. v. Atlas Housewrecking & L. Corp., 232 Mo.App. 791 [113 S.W.2d 155]; 17 Fletcher, Cyclopedia Corporations, 520; see Cannon Mfg. Co. v. Cudahy Pkg. Co., 267 U.S. 333, 336 [45 S.Ct. 250, 69 L.Ed. 634]; cf. Bank of America v. Whitney Central Nat. Bank, 261 U.S. 171 [43 S.Ct. 311, 67 L.Ed. 594].) The decisions reason that since factors or commission merchants are independent contractors, the disposition of goods in their possession in accordance with the directions of their foreign principals constitutes a part of their business rather than the business of the individuals or corporations whose products they sell. (People v. Roberts, supra, at p. 1029; 23 Am.Jur. 308.) In other words, jurisdiction of foreign corporations for purposes of process and regulation, as well as taxation, is dependent upon their presence or the exercise of their corporate franchises, and the sale of products of such corporations by independent contractors does not involve cor*166porate presence or the exercise of corporate franchises. (Cf. Union Internationale De Placements v. Hoey, supra.)
It would seem to follow that if a foreign corporation marketing- its products in a state through factors is not thereby “doing business” in that state, it is not thereby “doing business” outside of the state in which it engages in production activities. (Cf. Watson, Allocation of Business Income for State Income Tax Purposes, 25 Minn.L.Rev. 851, 894, n. 179.)
We are of the opinion that cooperative marketing associations are factors, or so closely akin thereto that the question whether plaintiff was doing business outside of California by reason of their sales transactions or activities in other states is governed by the foregoing authorities. Section 2026 of the Civil Code defines a factor as an “agent who, in the pursuit of an independent calling, is employed by another to sell property for him, and is vested by the latter with the possession or control of the property, or authorized to receive payment therefor from the purchaser.” Clearly cooperatives which market the produce of their grower members in the manner disclosed by the facts of this case are embraced in that definition, and it has been so held in this state. (Betts v. Southern Cal. etc. Exchange, 144 Cal. 402 [77 P. 993] ; Cooper v. American Fruit Growers Inc., 137 Cal.App. 494 [30 P.2d 558].) Plaintiff argues, however, that the members of a nonprofit cooperative association in legal effect constitute the association, that the acts of the latter are the acts of the former, and that therefore the cooperatives in this case did not act as factors or independent contractors in selling plaintiff’s produce. The argument is in reality a plea to disregard the corporate entity of the cooperatives for tax purposes. Similar pleas in comparable situations have been rejected, as where, for example, a foreign corporation employed a wholly owned and dominated subsidiary as an instrumentality to market its products in the taxing jurisdiction. (People v. Gilchrist, 244 N.Y. 114 [155 N.E. 68]; Cannon Mfg. Co. v. Cudahy Pkg. Co., 267 U.S. 333 [45 S.Ct. 250, 69 L.Ed. 634]; Procter & Gamble Co. v. Newton, 289 F. 1013.) And the corporate entity of cooperative marketing associations has been strictly observed in a variety of situations, including the application in California of the franchise tax act under discussion. (California Pear Growers Assn. v. Johnson, 219 Cal. 98 [25 P.2d 414].) There has been no showing in the *167present case of such interference by plaintiff in the conduct of the associations’ business as would justify either the conclusion that the associations were mere bookkeeping devices or that they did not enjoy the status of independent contractors. On the contrary, it appears that plaintiff’s activity in the marketing of its produce ceased when it delivered the same to the local cooperatives in California, and that plaintiff did not determine the manner, place, or time of sale, nor the prices and quantities of produce sold.
We conclude that a corporation transacting business in this state is entitled to an allocation of income for franchise tax purposes only when business is done outside of the state by the corporation acting through its officers or agents, that a cooperative marketing association is not such an agent of its grower members that the latter can be said to be doing business where sales by the former take place, and that, therefore, plaintiff was not entitled to allocation merely because its products were sold in other states by cooperative marketing associations. In addition, it might be noted that with the exception of avocado sales, the activities of the local cooperatives were confined to California; that the vast majority of sales were arranged and conducted by the California Fruit Growers Exchange and the California Walnut Growers Association under marketing agreements with the local cooperatives ; and that at least some of the extrastate sales were made by independent produce brokers employed by the exchange and the association.
With respect to the marketing of plaintiff’s bean crop by independent produce brokers, the parties are again in disagreement as to the effect of extrastate sales. While plaintiff insists that the making of such sales constituted the doing of business by it outside of this state, defendant urges a contrary conclusion on the ground that the brokers were independent contractors.
It should be noted at the outset that some of those sales followed the consignment of produce to brokers, whereas others followed consignments to plaintiff itself. Properly speaking, the brokers to whom produce was consigned for sale were •factors (Cal. Civ. Code, § 2026; 22 Am.Jur. 307), and their activities are governed by the rules heretofore discussed. The brokers selling produce consigned to plaintiff were authorized to receive payment therefor from the purchasers and hence *168possibly were also factors. In any event, they were independent contractors (1 Rest., Agency, § 1, Comment d, § 2 Comment b), and the brokerage sales differed from the factorage sales only in that the produce involved in the former was consigned to plaintiff and stored in its name in warehouses in the selling states. But the presence outside the state of property alone has not been considered the doing of business outside the state, and the maintenance of stock by a foreign corporation in the selling state does not make the selling thereof the business of the corporation rather than that of the broker. (Cf. United States Glue Co. v. Town of Oak Creek, 161 Wis. 211 [153 N.W. 241, Ann. Cas. 1918A 421] ; Trane Co. v. Tax Commission, 235 Wis. 516 [292 N.W. 897].)
We are of the opinion, therefore, that a corporation transacting business in this state is not doing business outside of the state within the meaning of section 10 of the Bank and Corporation Franchise Tax Act, by virtue of the fact that its products are sold from warehouses in other states by independent brokers. (See Watson, Allocation of Business Income For State Income Tax Purposes, 25 Minn.L.Rev. 851, 877, 893.) And we think it is worthy of note that since at least 1934, section 10 has been construed in conformity with this view by the administrative officials charged with its enforcement, and that it has been twice reenacted or amended since 1934. (Appeal of Great Western Electro Chemical Co., Cal.C.C.H. Tax Service, par. 5-802.3.)
It would seem clear that if plaintiff was not doing business outside of this state by reason of the fact that its products were sold by independent brokers from warehouses in other states, it was not doing business outside the state when it shipped a portion of its bean crop and other vegetables directly to purchasers in other states upon orders obtained or sales made therein by independent produce brokers. The argument that plaintiff is entitled to an allocation because the latter sales partook of the nature of transactions in interstate commerce, is successfully countered by the argument that plaintiff’s entire business was done within this state since all of its activities giving rise to income from interstate sales were carried on in California.
Finally, we are of the opinion that plaintiff’s contention that a tax on its entire net income would be violative of the commerce and due process clauses of the federal Consti*169tution is fully answered in cases such as Matson Navigation Co. v. State Board of Equalization, 297 U.S. 441 [56 S.Ct. 553, 80 L.Ed. 791]; Western Cartridge Co. v. Emmerson, 281 U.S. 511 [50 S.Ct. 383, 74 L.Ed. 1004]; Hump Hairpin Mfg. Co. v. Emmerson, 258 U.S. 290 [42 S.Ct. 305, 66 L.Ed. 622]; and American Mfg. Co. v. St. Louis, 250 U.S. 459 [39 S.Ct. 522, 63 L.Ed. 1084],
The judgment is reversed.
Edmonds, J., and Traynor, J., concurred.