Campbell-Moss-Johnson, Inc. v. Lupton

Opinion on Petition to Rehear Piled May 18, 1927.

In a petition by appellant to rehear, it is assumed that this court overlooked the fact that a portion of the indebtedness sued on was evidenced by trade acceptances. No distinction is taken in the opinion between the open account and trade acceptances, for the reason that the conclusion reached was equally applicable to both. Both forms of indebtedness arose out of work done, or services rendered, for the Thacher Sales Company by the petitioner wholly outside of Tennessee. Whether evidenced by open account or by acceptances is not regarded as material. The test is whether the services out of which the debt arose were performed in or outside of Tennessee— not where the payment therefor was to be made. In giving application to the rule of individual liability invoked, the place of the performance of the services contracted for is the controlling element, rather than the place of the payment therefor. This was substantially the holding in Limber Go. v. Moore, 126 Tenn., 318.

We are unable to agree with learned counsel that in a case like this, the place of payment is determinative of where the business is done, in the sense of the rule which fixes individual liability upon the participating stockholders of a non-complying corporation. As we view it, when a non-complying corporation contracts with a party for the performance by that party of stipulated services in another State, then the business done is done in the foreign State, and not within the jurisdiction in which the order or contract therefor was made, or wherein the payment was to be made.

It- may be conceded that in a case wherein the business done consists of a loan of money by a non-complying corporation to be repaid to it in the State in which the corporation had failed to domesticate, this would constitute a doing of business within that State; this would be the “place of performance,” in such sense as to bring into operation the rule of individual liability invoked. But this is not the instant case.

It is ingeniously argued that the performance of these services in the foreign State was wholly the performance of the petitioner and that the defendant non-complying corporation was doing business on its part within Tennessee in making the place of payment of the acceptances in Tennessee, this being the place of performance on its part. However, as before indicated, we are of opinion that the business done by the defendant non-complying corporation, in the sense that is contemplated by the rule of liability invoked, was the advertising which it was doing through the agency employed by it for that purpose in other States than Tennessee.

Our attention is called to an inadvertent inaccuracy in the course of the opinion wherein, in referring to the Tuffli Bros. Company’s contract, it was said that “the money was loaned and to be repaid” in St. Louis. However, this was immaterial, the point being that although the contracts were made in other States they were to be performed in Tennessee.

The petition must be denied.