Schilling v. Roux Distributing Co. Inc.

59 N.W.2d 907, 240 Minn. 71, 1953 Minn. LEXIS 677
CourtSupreme Court of Minnesota
DecidedJuly 24, 1953
Docket36,018
StatusPublished
Cited by21 cases

This text of 59 N.W.2d 907 (Schilling v. Roux Distributing Co. Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schilling v. Roux Distributing Co. Inc., 59 N.W.2d 907, 240 Minn. 71, 1953 Minn. LEXIS 677 (Mich. 1953).

Opinion

Knutson, Justice.

Appeal from an order of the district court denying defendant’s motion to dismiss the action for lack of jurisdiction and denying defendant’s alternative .motion for judgment notwithstanding the verdict or for a new trial after a verdict by the jury in favor of plaintiff.

The action originally was commenced against Roux Distributing Co., Inc., Stuart’s Beauty Supplies, and Walgreen Company, a corporation. Prior to the submission of the case to the jury it was dismissed as to Stuart’s Beauty Supplies and Walgreen Company, so that when we refer to defendant herein we have reference to Roux Distributing Co., Inc., only.

Prior to answering, defendant appeared specially and moved the court to set aside the service upon it on the ground that the court did not thereby acquire jurisdiction.. The motion was supported by affidavits and oral testimony was received on the return date. The motion was thereafter denied, and the answer was thereupon interposed. The jurisdictional question, was preserved at the open *73 ing of the trial by the answer and at the close thereof by motions to dismiss.

In view of the jurisdictional question raised by this appeal, a detailed statement of defendant’s activities in this state is necessary to a proper determination of the question.

Roux Distributing Co., Inc., is a New York corporation, having its office in the city of New York, and is engaged in the business of distributing and selling some 23 cosmetic products, including Roux hair dye. It is represented in Minnesota by Joseph B. Schusser, who lives in Minneapolis and who is employed under the terms of a written contract in which he is designated as district manager over a territory comprising eight states, including Minnesota, Wisconsin, upper Michigan, North and South Dakota, Nebraska, part of Iowa, and part of Illinois. Under his supervision he has from seven to ten other employees, one of which is designated as a supervisor and one as a consultant. Schusser is paid a salary, plus a bonus and expenses while away from Minneapolis. His salary at the time of the trial was $400 per month. He was allowed nine dollars per night while away from Minneapolis and his railroad fare in traveling. He was assigned a “quota” and was paid a bonus of one percent on the quota assigned and five percent on all net sales above the quota. His quota for 1951 for his territory was $150,000. Net sales for the same year amounted to approximately $203,000. Of this amount, about $85,000 to $90,000, or a little less than 45 percent of the total sales, represented sales in Minnesota.

The duties of Mr. Schusser, as prescribed by the contract, are as follows:

“* * * The District Manager shall interview prospective employees and then submit reports, with frank recommendations and the applications, to Employer. The District Manager shall obtain all necessary receipts from employees for sample cases, records and other property of the Employer. The decision of Employer in all matters relating to employees shall be controlling.
*74 “16. District Manager shall call upon ‘retailers’ and ‘wholesalers’ in Employer’s products, cooperate with them in sales of merchandise, render service to them, assist in keeping their stock in order, aid Employer in collecting accounts and originate sales by ‘wholesalers’ to ‘retailers’.
“17. District Manager shall cooperate conscientiously with Employer, devote the entire time and attention during the usual business hours of the day, diligently perform assigned duties, promote good-will of ‘retailers’, ‘wholesalers’ and all handlers of Employer’s products and encourage and promote display of Employer’s products and encourage the increase of sales by ‘wholesalers’, so as to result in increased purchases by said ‘wholesalers’ from the Employer and to do nothing to damage the good-will and standing of Employer as to the said products in the said territory or anywhere.”

Defendant sells its products to wholesalers and jobbers, who in turn supply the retail outlets. Goods are ordered by the wholesalers and jobbers directly from the New York office on order blanks furnished by defendant. They are shipped f. o. b. New York directly to the dealers.

Schusser and his staff! call on retail dealers and wholesalers or jobbers to encourage the use of defendant’s products. They occasionally take orders. When orders are taken from a retail dealer they are turned over to the wholesaler or jobber, who fills the order from stock on hand. When orders are taken from a wholesaler or jobber they are sent to the New York office and filled by sending the product directly to the dealer. All financial transactions are handled by the New York office. Schusser calls on slow accounts and tries to encourage them to make payment but does no collecting himself. When there are complaints, he gathers the facts and sends them to New York. He does not adjust such complaints but receives reports from the home office as to the disposition made of them.

The district manager and other employees attend conventions and clinics conducted by the trade. At conventions, defendant maintains a booth displaying its products, and its representatives put on *75 demonstrations showing the proper use of its products. The purpose of such activities is to increase the sale of its products. Schusser and the crew under him arrange displays in drugstore windows advertising defendant’s products, and other advertising is also taken care of by them. In Schusser’s contract of employment we find the following with respect to advertising:

“13. Employer may approve advertising to be run by certain retail advertising accounts within said territory, with the payment of said advertising to be made by Employer in cash or in merchandise shipped to such advertising accounts, but no bonus will be allowed or paid to District Manager under any circumstances on such shipments. It is mutually understood that such transactions constitute general business expenses of Employer, made for the purpose of increasing the sale, use and popularity of Employer’s products within said territory.” (Italics supplied.)

Prior to his employment by defendant Schusser received training by defendant in New York. He moved to Minneapolis and established his home here when he became district manager for defendant. As part of his contract of employment Schusser entered into the following agreement:

“25. The District Manager agrees that at no time after ceasing to be in the employ of the Employer herein, shall the District Manager represent or advertise himself or herself, as the case may be, m business as. formerly with Roux Distributing Co., Inc. or in any similar manner.” (Italics supplied.)

The contract also provides that in case the district manager discontinues his employment for any reason whatsoever he—

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Bluebook (online)
59 N.W.2d 907, 240 Minn. 71, 1953 Minn. LEXIS 677, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schilling-v-roux-distributing-co-inc-minn-1953.