Fleming v. Stillman

48 F. Supp. 609, 1943 U.S. Dist. LEXIS 2933
CourtDistrict Court, M.D. Tennessee
DecidedJanuary 8, 1943
DocketCivil Actions Nos. 101, 146, 147
StatusPublished
Cited by4 cases

This text of 48 F. Supp. 609 (Fleming v. Stillman) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fleming v. Stillman, 48 F. Supp. 609, 1943 U.S. Dist. LEXIS 2933 (M.D. Tenn. 1943).

Opinion

DAVIES, District Judge.

In the case of Fleming, Administrator, v. Stillman et al., the defendants, Julius Stillman and Dave Stillman, partners operating and doing business under the trade name and style of Auto Parts Company, have been engaged in business in Davidson County for several years; their business consists of buying wrecked and junked automobiles and stripping them of their serviceable parts. Some parts, when they are in serviceable condition, are simply washed and cleaned, and offered for sale, and others are repaired and offered for sale. Although in the beginning, what might be referred to as the carcasses of the automobiles, or what remained after the cars were stripped of their usable parts, were not of any great value and were discarded by the defendants by being hauled from their yards and deposited on the City dumps, yet in latter years, on account of certain world situations which now exist, the scrap in those carcasses became very valuable, and the defendants, since 1937 up to the present time, have been salvaging practically all of the skeletons of the cars, and they maintain a large yard at their plant that is used for the sole purpose of taking the available parts and accessories from the junked cars and after all accessories that are of any value [611]*611have been removed, the frames and bodies of the wrecked cars are cut into predetermined lengths and sold for scrap steel and scrap iron.

Now, as I recall from the evidence, the defendants’ business originally was established for the sale of used parts, but later the defendants began to purchase new parts at wholesale for resale in the local territory. They have been engaged in that business for some time and beginning with the year 1938, down to date, it seems to be generally taken for granted from the record that as far as the parts business is concerned, both old and new, about thirty per cent of this business relates to the retailing of parts to small consumers; about thirty-five per cent relates to the sale of parts to large consumers, such as trucking lines and bus lines, and other large consumers; and about thirty-five per cent of their business relates to the sale of parts to service men, garages and others for the purpose of resale. The parts business, during the years 1938 and 1939, constituted a very large portion of the business done by the defendants. I find that the parts business amounted to approximately ninety per cent, possibly a little more, of their entire business.

The defendants, in the first instance, say that they are not subject to the terms and provisions of the Wage and Hour Act, Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., for the reason that they operate a retail or service establishment, and the greater part of their selling or servicing is in intrastate commerce, and they are entitled, therefore, to the exemption provided by Section 13(a)(2) of the Act, and that their employees are engaged in a retail or servicing establishment, and I think it proper to dispose of this question first.

In this connection the Court finds that, taking the defendants’ own testimony, or their later testimony I might say, which I discuss further on, without any question thirty-five per cent of the defendants’ business in parts relates to the sale of parts for resale; that is, sale to dealers who expect to resell them and make a profit on them, either by selling the parts themselves or by installing them on automobiles and charging for the parts and t'he service. Clearly that thirty-five per cent of the defendants’ business is wholesale business. Now, as to the other thirty-five per cent that relates to the selling of parts to large users — and in this connection I think that we have to take into consideration all the facts and circumstances relating to the defendants’ business. The defendant has two separate and distinct branches or places of business. These different establishments are located within a mile or so of each other, and one establishment, which is not in question in this case at all, is devoted entirely to retail sales to the general public, while, on the other hand, the particular branch of the business that is in question in this lawsuit has for some time been engaged in sales of a different nature. It is admitted that the wholesale business is handled from this particular branch or location.

When the question was made relative to defendants’ obligations under the Wage and Hour Law, and whether or not they were required to comply with the terms and provisions of the Act, the defendants made an estimate themselves of the nature of their business, and their own estimate at that time was that seventy per cent of the business was wholesale and thirty per cent of the business was retail. At that time I assume they were not advised as to the technical legal definition of the term “wholesale business”, and that they honestly thought that seventy per cent of their business was wholesale. They then regarded it as such, but upon being advised by their counsel as to the legal distinctions between wholesale and retail business, they changed their previous estimate so as to provide that, of the original seventy per cent which they considered wholesale, fifty per cent of that amount is actually retail in nature, for the reason that it is sold to large consumers and in large quantities ordinarily. However, the facts show that even when those regarded as large customers or large consumers purchase small articles, or a small amount of articles, they are able to purchase at the same price had they purchased a large quantity of the articles.

In addition, Mr. Solomon has testified that ninety per cent of defendants’ business in this particular branch with which we are now concerned is business with dealers. That, of course, was his idea or estimate derived from experience he had in the salesroom of the company, and I assume that in making his estimate and his definition of “dealers” that he in all probability has classified large users or large consumers of these parts as dealers without! [612]*612considering the strict technical definition of wholesale or retail business.

The defendants maintained three separate price lists for the same articles. When they would sell one of these particular articles to a retailer or a person who would in all probability be expected to sell it again, they charged one price. When they sold it to a person who was not a dealer in any way but who would in all probability be expected to use the goods, they charged another and different price, and when they sold the same article to one of their customers who was a large consumer, they charged still another and lower price. Now gentlemen, that is not the usual manner in which a retail business is conducted, and that was their fixed policy in the sale of parts. Furthermore, they at one time since the Wage and Hour Law went into effect, ordered two carloads of alcohol to be sold on a consignment basis. While it is not in evidence, I assume that this alcohol was'sold both to dealers and to consumers. It would only be a matter of conjecture as far as proof is concerned io say that the larger part was sold to dealers, and I am making no finding as to that, because there is nothing in the record to substantiate it, but it is a little unusual for a regular, generally recognized retail business to purchase two carloads of alcohol on a consignment basis. That might also have something to do with, or may have some reflection upon whether or not the defendants and their employees are engaged in commerce as contemplated by the terms and provisions of the Act.

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Cite This Page — Counsel Stack

Bluebook (online)
48 F. Supp. 609, 1943 U.S. Dist. LEXIS 2933, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fleming-v-stillman-tnmd-1943.