J. C. Keg & Co. ex rel. Payne v. Wheatley

2 V.I. 196, 1952 U.S. Dist. LEXIS 1868
CourtDistrict Court, Virgin Islands
DecidedJanuary 21, 1952
DocketCivil No. 230 - 1949
StatusPublished

This text of 2 V.I. 196 (J. C. Keg & Co. ex rel. Payne v. Wheatley) is published on Counsel Stack Legal Research, covering District Court, Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J. C. Keg & Co. ex rel. Payne v. Wheatley, 2 V.I. 196, 1952 U.S. Dist. LEXIS 1868 (vid 1952).

Opinion

MOORE, Judge

This is an action for debt brought by J. C. Keg & Co., of Zaandam, Holland, a foreign corporation, Clarence Payne as agent, appearing by power of attorney, to sue in its behalf, against O. S. Wheatley, a merchánt of St. Thomas, Virgin Islands, for goods and merchandise sold in the amount of $622.60. Jorge Rodriguez, Esquire, appeared for the plaintiff, and Francisco Corneiro, Esquire, appeared for defendant.

On October 3, 1946, defendant merchant ordered by letter, addressed directly to plaintiff corporation in Holland, twenty (20) cases of cheese. These goods arrived in St. Thomas in June, 1947, covered by a 30-day sight draft, dated May 20, 1947. This draft, in the amount of $622.60, was accepted by defendant on September 13, 1947. The goods, which were perishable, were never taken from the wharf by the defendant and the money was not paid. Clarence Payne had no general agency for the plaintiff corporation, and it maintained no office and had no capital or business investment in the virgin Islands.

The local Code (1921, Title II, ch. 29, §§ 1, 7; 13 V.I.C. §§ 401, 406) prescribes certain requirements which foreign corporations shall fulfill “before doing business within the district.” The law further provides that failure to comply with these provisions shall cause contracts made by such corporations with citizens of this district to be void and unenforceable in any court of the district.

Defendant admits acceptance of the draft, but claims, by way of defense, that he accepted this draft only upon [199]*199the representation of one Clarence Payne, styled “agent” of the company, to the effect that he would handle the disposition of the goods. Defendant further claims that the plaintiff corporation is precluded from a judgment in its favor by virtue of section 7, chapter 29, of the above-mentioned Code, which provides that:

“If any foreign corporation or company shall fail to comply with any of the provisions of this chapter, all its contracts with citizens of the district shall be void as to the corporation or company, and no court of the district or of the United States shall enforce the same in favor of the corporation or company so failing.”

Sections 1 to 6 enumerate the acts necessary to be done by corporations “before doing business in the District.” It is admitted that plaintiff corporation has not complied with the requirements of the statute for corporations “doing business in the district.”

The plaintiff corporation alleges, however, that the transaction was a transaction in interstate commerce; that the Municipal Council had no power to enact legislation which will qualify, impede, or restrain interstate commerce; that the Municipal Council has no power to determine what matters must be or must not be heard by the District Court of the Virgin Islands or by the Federal District Court of the Virgin Islands, and that these provisions of the statute are unconstitutional.

It is, therefore, necessary for us to determine, in the first instance, whether the plaintiff corporation could be said to have been “doing business in the district” within the meaning of the law and, consequently, liable to the penalty for failure to comply with the requirements stipulated by said law. Thus it appears to the Court that the controlling questions presented for determination are as follows:

(1) Whether there was a contract between plaintiff corporation and defendant for the goods and merchandise [200]*200and, if so, whether that contract was abrogated by Clarence Payne.

(2) Whether the plaintiff corporation was “doing business in the district”; and whether its failure to comply with sections 1 to 6 of chapter 29 would preclude a recovery.

As to the first question, delivery of the goods to the defendant’s order and acceptance of the draft completed the contract between plaintiff and defendant, and made defendant liable thereon. Clarence Payne denies having made any agreement with the defendant to relieve him of the goods by disposing of them for him, and there is no preponderance of evidence in the record to indicate that he either made any such agreement on behalf of plaintiff, or that he had any such power to do so. Even if he had done so, any such agreement would be strictly between Clarence Payne and the defendant, and could in no way relieve the defendant of liability on the draft accepted by him. There is no evidence that Payne was ever a general agent of Keg and Company, nor that he had any such authority given by Keg and Company. It is further noted that the draft was sent through the bank, and there accepted by the defendant, a direct transaction between plaintiff and defendant. It will be noted that even the power of attorney to Clarence Payne to sue in behalf of Keg and Company was executed long after this contract was made between plaintiff and defendant. It appears that Payne was merely an independent commission agent authorized to take orders for the plaintiff company, among others, which orders had to be submitted to the company in Holland for approval and on which he received a percentage commission. He, therefore, clearly had no power to cancel or vary, by private agreement, a contract entered into by defendant directly with plaintiff corporation.

[201]*201With respect to the second question, two points have been raised by defendant with regard to whether plaintiff was “doing business” here.

First, whether the particular single transaction in issue can be called “doing business within the district”; and

Second, if this particular transaction is not “doing business” here, whether the presence of a salesman representative of the company was sufficient to bring plaintiff within the Act.

There is nothing in the record to indicate the extent or duration of the business alleged by defendant to have been transacted by the plaintiff corporation in the district. And the same can be said here as was observed in Caeser v. Capell, 83 Fed. 403, to wit: “it is stated that it (the foreign corporation) was at that time doing business in the State of Tennessee and County of Heywood in violation of the Acts; but this is only a conclusion of fact or an inference drawn by the pleader and not a statement of any fact itself.”

It is generally held that a foreign corporation will not be regarded as doing business within a state or territory because it enters into contracts with residents of the state. Counsel for plaintiff has pointed out that this order for the goods was approved in Holland and the goods consigned there for delivery to the defendant.

It is well recognized that an isolated business act or transaction does not ordinarily constitute “the carrying on or doing of business” therein. Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 58 S. Ct. 739, 28 L. Ed. 1137; Kirven v. Virginia-Carolina Chemical Co., 145 Fed. 288, 76 C.C.A. 172; 12 R.C.L. “Foreign Corporation” - sec. 48.

The transaction in issue was a single, direct order by mail to a company whose place of business is outside the territory. This order was not even placed through Clarence Payne, the resident salesman, and he had nothing to do with its making.

[202]*202In Kirven v.

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Cite This Page — Counsel Stack

Bluebook (online)
2 V.I. 196, 1952 U.S. Dist. LEXIS 1868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-c-keg-co-ex-rel-payne-v-wheatley-vid-1952.