J. R. Watkins Medical Co. of Winona v. Coombes

1916 OK 886, 166 P. 1072, 66 Okla. 126, 1916 Okla. LEXIS 633
CourtSupreme Court of Oklahoma
DecidedOctober 17, 1916
Docket7419
StatusPublished
Cited by13 cases

This text of 1916 OK 886 (J. R. Watkins Medical Co. of Winona v. Coombes) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J. R. Watkins Medical Co. of Winona v. Coombes, 1916 OK 886, 166 P. 1072, 66 Okla. 126, 1916 Okla. LEXIS 633 (Okla. 1916).

Opinion

Opinion by

WEST, C.

This suit was commenced by J. R. Watkins Medical Company of Winona, Minn., a foreign corporation, to recover an amount alleged to be due under a written contract of guaranty against George M. Coombes and L. B. Coombes for goods, wares, and merchandise sold and delivered to B. J. Coombes. Each of the defendants filed separate answers, consisting of a general denial and special defenses as to plaintiff engaging in business for profit within this state before complying with the statute of Oklahoma relative to permitting foreign corporations to do business in the state, and further on account of fraud which defendants claim that J. B. Coombes committed in securing their signatures to the guaranty contract, alleging that the said B. J. Coombes was the agent of plaintiff in procuring their signature to said contract of guaranty. To these separate answers plaintiff filed verified reply, and on the 2d day of December, 1914, cause went to trial to a jury, and on the 4th day of December, 1914, a verdict was returned into court by the jury in favor of defendants.

Motion by plaintiff for new trial was duly made and overruled and exceptions saved, and cause was brought here upon case-made for review under a number of assignments of erro"", which are stated by plaintiff in its brief under four propositions, in support of its contention that court erred in rendering judgment for defendants, and that plaintiff is entitled under the pleadings and evidence to a judgment against defendants as waved for in its petition. These four propositions, we think, may be stated under two heads, namely: First. Was plaintiff transacting business in the state of Oklahoma. in the sense that would require it to comply with provisions of section 1335. Rev. Laws 1910. regulating foreign corporations doing business in the state of Oklahoma? Second. Did plaintiff practice fraud upon the defendants in securing their signatures1 to' the guaranty contract?

*127 In the case of Dr. Koch Vegetable Tea Co. v. Shumann et al., reported in 42 Okla. 60, 139 Pac. 1133, tbe court bad under consideration tbe first proposition involved in tbis case as stated above, upon a very similar contract and upon conditions almost identical with the ones surrounding tbis contract and laid down tbe following rule in the first paragraph of tbe syllabus:

“1. Corporations — Foreign Corporations— Actions — ‘Transacting Business.’
“A nonresident corporation, engaged in tbe manufacture and sale of certain proprietary medicines, entered into a written contract with a resident of Oklahoma, whereby it was agreed that certain of its products should be ‘sold and delivered f. o. b.’ at a point outside of tbe state, and should be shipped into Oklahoma and resold at retail. Held, this did not constitute ‘tiansaeting business’ in the state, within the provisions of section 1335, nor incur the penalty prescribed in section 1338, Rev. Laws 3910.”

In the body of the opinion the court used the following language:

‘'Under the terms of the written contract attached to plaintiff’s petition, the plaintiff agreed to sell and deliver to Shumann certain medicines at prices agreed upon f. o. b. Winona, Minn., and Shumann agreed to sell the goods in a certain designated territory in Oklahoma. It does not appear where the contract was entered into, but that it was entered into between Dr. Koch Vegetable Tea Company, a Minnesota corporation, with principal offices at Winona, in said state, and M. W. Shumann, of' Guthrie, Okla. The action was to recover $794.39 for goods sold under this contract, and the action against the other two defendants was on a written contract of guaranty, whereby they guaranteed the faithful performance of the contract between the Minnesota corporation and Shu-mann. The sole question raised in this appeal is whether or not the defense set up by the guarantors that the plaintiff, being a nonresident corporation, and having failed to comply with the statutes of Oklahoma and the Constitution of the state relative to foreign corporations doing business in this state, was denied the right to enforce its contract in the courts of the state. It does not appear from the record in this ease that the plaintiff corporation was doing business in the state of Oklahoma, so as to come within the terms of the statute and the constitutional provisions relied upon by these defendants. If the acts of the plaintiff in making the contract and selling its wares, as shown, did not constitute ‘doing business’ in Oklahoma within the terms of the statute and Constitution, then it is not denied the privilege of suing in the courts of the state, as contended. That these acts did not constitute ‘doing business or ‘transacting business’ in the state within the prohibitions of these provisions is clear from the decisions of this court. See Harrell v. Peters Cartridge Co., 36 Okla. 684, 129 Pac. 872, 44 L. R. A. (N. S.) 1094, and cases therein cited.”

It would therefore seem that the first question presented has been squarely passed upon in the case supra, and the only difference, if difference there is, in the instant case and the ease supra, was the fact that B. J. Coombes, for whom defendants were sureties, had sent an order to plaintiff for two shipments of goods to be sent direct by plaintiff to his customers. However, upon examination of these orders, which appear on page 103 of ease-made, the orders directed plaintiff to ship said goods direct to customers and charge .the same to the account of B. J. Coombes. Inasmuch as these sales were made to said Coombes, and by his orders shipped to his customers direct, this would not in our opinion change the status of the contract sued upon herein» and is not in variance with said contract, but appears to be in keeping with its terms and conditions. We therefore hold that under the case of Dr. Koch Vegetable Tea Co. v. Shumann et al., supra, the transaction of business under the contract sued upon in this ease would not constitute doing business or transacting business in violation of the provision of section 1335, nor incur the penalty prescribed in section 1338, Rev. Laws 1910.

As to the second proposition as to whether or not plaintiff practiced fraud upon defendants, through B. J. Coombes, in securing their signature to the guaranty contract, we will say that the only evidence offered sustaining this allegation of fraud is the testimony of the defendants as to certain statements the said B. J. Coombes made at the time said defendants signed said contract, and no evidence tending to show knowledge of these statements by the plaintiff was offered, and it is well settled that, though the principal might practice fraud upon the surety, unless knowledge of this was brought home to the creditor, the surety would not on this account be released from his liability to the creditor. Elliott on Contracts, vol. 5, § 393, uses this language:

“But if the principal practices a fraud on the surety, of which the creditor has no knowledge, even .though such fraud results in inducing the surety to make the contract, the surety will not on that account be released from his liability to the creditor.”

The Supreme Court, in case of Mason Lumber Co. v. Buchtel, 101 U. S. 633, 25 *128 L. Ed. 1072, in the first paragraph of „the syllabus, lays down the following rule:

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Bluebook (online)
1916 OK 886, 166 P. 1072, 66 Okla. 126, 1916 Okla. LEXIS 633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-r-watkins-medical-co-of-winona-v-coombes-okla-1916.