Reynolds Metal Co. v. TL James & Co.

69 So. 2d 630, 1954 La. App. LEXIS 574
CourtLouisiana Court of Appeal
DecidedJanuary 18, 1954
Docket19820
StatusPublished
Cited by17 cases

This text of 69 So. 2d 630 (Reynolds Metal Co. v. TL James & Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reynolds Metal Co. v. TL James & Co., 69 So. 2d 630, 1954 La. App. LEXIS 574 (La. Ct. App. 1954).

Opinion

69 So.2d 630 (1954)

REYNOLDS METAL CO.
v.
T. L. JAMES & CO., Inc. et al.

No. 19820.

Court of Appeal of Louisiana, Orleans.

January 18, 1954.

*631 Bienvenu & Culver, H. F. Foster, III, New Orleans, for plaintiff-appellant.

Lemle & Kelleher, Edward S. Bagley, New Orleans, for Aviation Board of City of New Orleans, City of New Orleans, and Indemnity Ins. Co. of North America, defendants-appellees.

Curtis, Foster & Dillon, New Orleans, for T. L. James & Co., Inc., and National Surety Corp., defendant-appellees.

McBRIDE, Judge.

This suit was brought by Reynolds Metal Company, a foreign corporation, against T. L. James & Company, Inc., and its liability insurer, National Surety Corporation, the Aviation Board of the City of New Orleans, and the City of New Orleans, and their liability insurer, Indemnity Insurance Company of North America, for $1,157.89, representing the amount allegedly due plaintiff by all defendants solidarily for damages sustained by a Beach Craft airplane and incidental expenses. The petition alleges that on December 10, 1948, the plaintiff's airplane landed at the Moisant International Airport, which is operated by the Aviation Board of the City of New Orleans and the City of New Orleans, and that the airplane was damaged when its propeller struck a piece of concrete reinforcing wire which was lying in the grass on the airfield. It is alleged that the wire was left hidden from view in said position on the airfield by T. L. James & Company, Inc., which was at the time performing certain construction work at the airport.

All defendants interposed a similar series of exceptions, namely: (1) That plaintiff, a foreign corporation organized under the laws of Delaware, is doing business in Louisiana notwithstanding that it has never qualified to do business in the State, and is therefore prohibited from presenting any judicial demand before any court of this State; that therefore plaintiff has no capacity to prosecute the suit or stand in judgment thereon; (2) that the petition discloses no right of action; (3) that the petition discloses no cause of action; (4) that the petition is too vague, general, and indefinite to permit defendants to plead thereto with safety.

The exceptions were all tried together, and after hearing certain evidence the district judge maintained the exceptions and dismissed the suit. Plaintiff has appealed devolutively from the several judgments.

The exceptions of want of capacity to sue and no right of action are based on the provisions of Act No. 8 of the Third Extraordinary Session of the Legislature of Louisiana of 1935 (now LSA-R.S. 12:211) which read:

"Section 1. Be it enacted by the Legislature of Louisiana, That no foreign corporation doing business in this *632 State shall be permitted to present any judicial demand before any court of this State, unless and until it has complied with the laws of this State for doing business herein, and unless and until it has paid all taxes, excises and licenses due to the State, * * *."

Plaintiff has never qualified to conduct business in Louisiana, so the question then is whether its activities can be said to amount to a carrying on of a domestic business within this State. As stated by the Court of Appeal, Second Circuit, in Proctor Trust Co. v. Pope, 12 So.2d 724, 727:

"No act of the Legislature of this state has attempted to define or say what acts or course of conduct within the state by a foreign corporation shall constitute `doing business' therein. The law making powers of other states, so far as our research has extended, have not ventured to do so. The question has been left to the courts. Each case necessarily must be determined from its own facts. * * *"

The evidence taken on the trial of the exceptions reflects that Reynolds Metal Company is a Delaware corporation having offices in the states of Kentucky and Virginia. It has in Louisiana a sales office equipped with furniture valued at $1,000. The lease covering the office was signed and completed at one of the offices in Kentucky or Virginia; plaintiff employs two or three resident salesmen and a stenographer; none of these local employees have authority to hire or discharge personnel without approval of the home office; the office is furnished with a petty cash fund out of which expenditures for office necessities are made. At times plaintiff advertised its products by sending a van carrying samples to Louisiana, and the salesmen call on likely customers with a view of persuading them to specify and use products manufactured by Reynolds Metal Company on various jobs. These salesmen quote prices and solicit purchase orders, which are transmitted to the home office for acceptance or rejection as the salesmen are clothed with no authority to act on the orders received. In some cases the salesmen are advised of the disposition of orders made by the home office, and the information usually is transmitted by the salesmen to the customers. Plaintiff maintains no warehouse and keeps no goods for sale in Louisiana, and when an order is accepted it is filled by direct shipment from one of the plants outside of Louisiana to the purchaser. At times the salesmen handle complaints from customers, and one of the salesmen said he could accept payments from customers by check which he would have to forward to the accounting department. Our appreciation of the testimony, in which some vagueness exists, is that the yearly sales of the Reynolds Metal Company throughout the United States approximate $77,000,000 as compared with Louisiana sales of $350,000.

The question posed by the exceptions is not new to our jurisprudence. In State v. Read & Nott, 178 La. 530, 152 So. 74, it was held that a state license or occupational tax so far as it applied to local representatives of nonresident commercial firms who merely solicit orders for merchandise to be shipped direct to the buyers was invalid as an unauthorized burden on interstate commerce. The evidence in the case disclosed that the solicitors kept on hand samples of merchandise in which their principals dealt, but no stock of goods out of which anything was sold. All orders were sent to the principals without the State where they were accepted and filled by direct shipment to the person ordering the merchandise.

In State v. Best & Co., 194 La. 918, 195 So. 356, 358, it was held that the statute imposing a license tax on every corporation not being a retail merchant in the State for the privilege of displaying samples in any hotel room for the purpose of securing orders was unconstitutional as interfering with interstate commerce, as applied to a corporation having no place of business in Louisiana which displayed samples in leased hotel rooms through its representative, who was not authorized to deliver any merchandise or to accept payment and was solely authorized to take orders subject to *633 approval of the corporation at its home office in New York, from which the merchandise was shipped to customers. Said the Court:

"* * * We can see nothing in such transactions that can be regarded as a local business. * * *"

In Norm Advertising, Inc. v. Parker, La. App., 172 So. 586, 589, it was held that a foreign corporation not qualified to do a local business was not barred from maintaining a suit here in view of evidence which showed that plaintiff's traveling agent came to Louisiana and called upon the defendant and received his written order which ripened into and became a contract when it was accepted by plaintiff at its domicile.

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69 So. 2d 630, 1954 La. App. LEXIS 574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reynolds-metal-co-v-tl-james-co-lactapp-1954.