GOTTSCHALK CO. V. DISTILLING & CATTLE FEEDING CO.

681

eral circuit courts in which they originated, do not, we think, leave this in doubt. . It would be unprofitable to extend the discussion. The decisions of the several state courts in cases involving the same questions, and their citation with approval by the supreme court of the United States, are virtuallyconclusive. See Chesapeake & P. Tel. Co. v. Baltirnore & O. Tel. Co., 66 Md. 399, 7 Atl. Rep. 809; State of .ML880uri v.Bell Telephone Co., 23 Fed. Rep. 539; State of Ohio v. Bell Telephone Co., 36 Ohio St. 296; State v. Bell Telephone Co.. 22 Alb. Law J. 363; Commercial Union Tel. Co. v. New England Telephone & Telegraph Co., 61 Vt. 241,' 17 Atl. Rep. 1071; Louisville Trangjer Co. v. American Dist.Tel. Co., 1 Ky. Law J. 144; Central Union Telephone Co. v. State, 118 Ind. 194, 19 N. E.Rep. 604; Budd v. New York, supra. The judgment of the circuit court is affirmed.

GOTTSCHALK Co. OF

BAJ.1'IMORE CITY 'V. DISTILLING & Co. OF ILLINOIS.

CATTLE

(Gil'cult

Court,

D.

Maryland.

April Ill, 1892.)

,

FOREIGN CORPORATIONS-SERVIOE ON AGENT.

A nonresident corporation sold its goods only to certain persons In each state, whom, in its circulars, it styled "distributing agents," under an agreement whei"&'· by each of the latter was to buy exclusively from it, and to sell at trade prices prescribed by it. On complying with these conditions for a given time, the "agent·" was to become entitled to" certain rebare, and also to have authority to issue to his wholesale customers certificates binding the corporation to pay a rebate directly to them, provided they continued for a given time to purchase from him exolusively. He sustained no other relation to the company, and the goods purchased by him were absolutely his own. Held, that he was not the agent of the corporation, within the meaning- of Code Md. art. 23, §§ 295, 296. authorizing service against foreign corporations upon their agenis or attOl'neys.

At Law. Action by the Gottschalk Company of Baltimore City against the Distilling & Cattle Feeding Company of Illinois. Motion to set aside the return of service. Granted. Wm. Pinkney Whyte and lsidor Rayner, for plaintiff. M. R. Walter, for defendant. MORRIS, District Judge. This action was begun in the superior court of Baltimore city. The defendant is an Illinois corporation. The sheriff's return is: "Summoned the Distilling & Cattle Feeding Com" pany of Illinois, by service on Charles A. Webb, agent; copy ofnarr. and notice to plead left with defendant." The defendant, naying appeared specially and moved to set aside the return, has removed the case into this court. The reasons urged in support of the motion to set aside the sheriff's return are that Charles A. Webb, upon whom the writ was served, was not, and is not, an agent of the defendant, or a person in its service, and that the defendant did not transact business within the

682

FEDERAL

vol. 50.

of Mal'yland. The Maryland Code provides that.any foreign poration, which shall transact business in Maryland, shallbe deemed to hold .l;l.lldexeri;lJse frapchises therein, and shall be liable to suit in any a citizen of for any cahse. of action, and court of that process U}ay, be on corporation by ser;Vige upon any agent, attorney" or other person in the service of such corporation. Code, §§ 295, 296, art. 23. The testimony adduced at the hearing of this motion shows precisely the relatioQ which Webb held to the deflilndant corporation. The defendant sells its products only to certain selected ,in each state, and to. none others. These persons, in a trade published. by defendant,are styled its "distributing 1r,1;aryland there were two. One was Webb, upon whom the process was served, and the ot}:J.ex:,llutil just before the of "distributing this suit,'was the plaintiff. Thete1ms upon agents" agreed to deal wlth the 'defendant were that they should buy exclusively from the defendant such goods as it manufactured, and should sell them at trade prices estltblished by the defendant; that at the end of five months from the date of each purchase, if they had continued in the exclusivelyf,rom.defendant, they were entitled to a mean bate of two cents on every proof gallon; and they were allowed also to issue to their cust@tnerslfreoilte certificate obligating the defendant to pay of six months, a rebate of five cents per proof gallon, provided during that six months the wholesale customer had purchased all his supply of such goods as the defendfrom sOInediatdbuting agent of the defenclant. The rebate certificates were payable by the defendant ata bank in Illinois. Also On all good/,! soldb)' the "distributing agent" to retail customers, the distributing agent wali! .allowed,upon like terms, a rebate oCfive cents per gallon. . ,!'hecourse of bllsiness, in substance, amounted to this: that the '.'distributing agents," iithey continued in good faith to deal exclusively with the defendant, were entitled, at the end of five months. to a rebate of two cents per gallon, and on sales to retail customers to an additionm-rebateoLfive cents,' a,nd their wholesale custoU}ers were ':Jntitled to llo reqate of fiv,e .. The defendants required the" distributing agents" to send them a list of all the wholesale customers to whom they issued rebate"certifiCj'ltes, and a list of all the retail customers on sales to whom they claimed the five cents rebate. Except in the arrangement with regard to the rebate, and except the establishing of a trade Vrice at which. goods wertl to be sold, the transaction did not differ in any wayfrom the by a resident of Maryland of goods from an Illinois cOf:poration at its place of,business in Illinoisj and, unless it be by granting the rebate and fixing the trade price, the defendant did not transact. in Maryland in any other sense than every foreign corporation does when it sells its home office, and ships them to a resident of Maryland. The defenda,nt, according to the proof, has no office in Maryland, and no goods in Maryland, and it receives no money in ¥aryland,and no agent here authorized either to sell goods for it or to receive any money Jor it. The goods purchased from the de-

GOTTSCHALK CO/V. DISTILLiNG &: CATTLE'TEEDING CO.

683'

fendantby'Webb and by tlie plaintiff were absolutely their own, and subject to their own conttol and at their own risk.. 'The only restriction consisted in the understanding that the rebate was payable only on the condition of continuous dealing with the defendant and compliance with' its trade regulations. They could do what they pleased with the goods if they chose to sacrifice the rebate, which was payable by the defendant only on the conditions prescribed. There are only two circumstances to which the plaintiff can point as tending to establish its contt'ntion that the service of process was within the terms of the Maryland Code. The first is that the persons in Maryland to whom the deff'ndant solo its goods are in its published circulars called its "distributing agents." The mere name, however, cannot give a representative capacity to a person who does not, in fact, have it, and never attempts to exercise it. It may be said to be a misleading description, but it did not mislead the plaintiff, as the plaintiff, being so designated itself, knew the meaning of the term. These so-called "distributing agents" were such only in the sense that any wholesale merchant or commission house which handles the goods of a manufacturer may be said to be a distributer of its products, and there is nothing unusual in a manufaoturer selling exclusively to one person in a given territory, and insisting that such person shall sell only at fixed prices and upon fixed terms to his customers. The other circumstance is that the so-called "distributing agents" were furnished with a printed rebate certificate, which they were authorized to issue in the name of the defendant to their wholesale customers, payable in Illinois at the end of six months, Upol1the condition of continuous dealing. This was no more than an authority to sign the defendant's name to a draft, or to draw a draft to be paid by the defendant in Illinois, if the prescribed conditions were fulfilled. It was not performing a service for the defendant, but performing a service for the distributer himself, as an inducement to his customer to buy from him the goods which the ,distributor had bought from the defendant.' In no reasonable sense can Webb be said to have stood in any representative charac;ter towards the defendant, or to have performed any ,service for it, so far as the testimony discloses. He was a buyer, and the defendant was a seller, with the added arrangement that, if the buyer claimed the ngreed rebate for himself or for his CUBtomer, he was required to comply with the terms agreed upon, and in so complying he performed no service for the defendant, bnt was serving himself, in order to get back the rebate on the price he had paid or had agreed to pay. InSt. Clair v. Cox, 106 U. S. 350; 1 Sup. Ut. Rep. 354, the supreme court held that a foreign corporation could not be sued in a state unless it transacted bnsineE's in that state; and :Mr. Justice FlEWS, delivering the opinion of the court, very fully discusses the character of the transactions. and the nature of the employment which are necessary to give the requisite representative character to the person on whom process may be served. In the case of U. S. v. American Bell Tel. Co., 29 Fed.&lp. 17, the principleR of St. Clair v. Cox were applied to8 case verym.ucPBtrOQger in.its facts than the present one, and

.ERAL REPORTER,

voL 50.

J;l$Id thatitJvAi not shown that the foreigQ, corporation sued ip 9hiohadexercised franchises in that state, or placed itselfor its busiJVithin that state sO,as1o be found there. I am of opinion that the tp, set aside thesl;1e;riff's return' mut't be granted.

WILLIS

et al.

tI. RECTOR.

(ctrcttf,t OO'Urt of AppeaZ" Eighth O£rcuit.

May 9, 1899.)

No. 60.

PUT.NII'BSRIP--U/lB ,OJ' NAMB-NOTICH-AGENTS.

,

In !IJlILlltion,against two defendants as partners, trading as "R. & Co., Wit apdefendant R. allowed the useClf l:).is name because the other defendant was:una\:lle to obtain a license to carryon business, that R. had no interest whatever in tl,J.ll bnsiness, and druJ;Ilmer, when he sold the goods whose price was sued for. was informed of,'this 1$"t. The note sued on, signed "R. & Co. "by the other defendant; was given to another agent of plaintiffs. Held, that it ,was ,proper to d.irect a verdict for for notice to the drummer that be was not in fact a partner was notice to ptatntmll.