197 Ky. 174
Court of Appeals of Kentucky.
Dec. 15, 1922.
Rehearing Denied Jan. 26, 1923.
ACTION: Reversed and remanded.

Appeal from Circuit Court, Knox County.
Action by the Logan-Pocahontas Fuel Company against H. N. Camp, Sr.
From a judgment for defendant, plaintiff appeals.

The Logan-Pocahontas Fuel Company, a corporation organized under the laws of the state of West Virginia, filed its petition in the Knox circuit court against H. N. Camp, Sr., doing business in the name of the Camp Mining Company, to recover the sum of $96,000, damage alleged to have been sustained on account of the breach of a contract for the sale and delivery of coal.

The defendant denied the material averments of the petition, and alleged that he had no interest in or connection with the Camp Mining Company. In an amended answer he asserted the defense that plaintiff was doing business in Kentucky in violation of section 571 of Kentucky Statutes. Issue was joined on the affirmative defenses, and, on the trial, at the conclusion of the plaintiff's evidence, the jury, under a peremptory instruction from the court, returned a verdict for the defendant, on which judgment was rendered. The plaintiff is prosecuting this appeal.

The contract sued on was partially made at Elys, Ky., where the mine of the Camp Mining Company was located. It was not, however, finally agreed on, committed to writing, and signed by M. T. Roach, vice president and general manager of appellant, until a few days later in Cincinnati, Ohio, and its approval by the chairman of the board of directors of the Logan-Pocahontas Fuel Company was not procured until a still later date, at Charleston, W. Va. Under the terms of the contract, appellant purchased the entire output of coal from the Camp Mining Company's mine at Elys, Ky., "based on daily output of approximately 500 tons per day, at ninety (90) cents per ton of 2,000 pounds," for the period commencing April 1, 1916, and ending March 31, 1917.

Appellant's evidence tended to show that from September, 1916, until March 31, 1917, appellee sold to other parties, from the output of the mine at Elys, approximately 20,000 tons of coal, which, if delivered to appellant, could have been sold by it at a profit of about $50,000. There was also evidence to the effect that H. N. Camp, Sr., owned the mine at Elys and the equipment thereon, and that in fact he was operating it in the name of the Camp Mining Company, through his agent H. N. Camp. Jr. But it was shown that appellant had not complied with section 571 of Kentucky Statutes, in that it had not appointed an authorized agent in the state upon whom process could be served, and had not filed in the office of the Secretary of State a statement, signed by its president or secretary, giving the location of its office or offices in the state, or the name of any agent thereat upon whom process could be served. It was on this ground that the trial court gave the peremptory instruction. It is contended here that that ruling was erroneous: (1) Because appellant was not "doing business" in Kentucky at any of the times referred to in the petition; and (2) the contract in question is incidental to interstate commerce, and is not, therefore, subject to the provisions of section 571 of the Kentucky Statutes. We deem it necessary to consider only the second of these contentions.

Appellant is a West Virginia corporation engaged in the business of selling coal for deliveries in different states of the Union. It is in evidence that this contract was made for the purpose of supplying coal to appellant's customers, and that by far the greater part of the coal received thereunder was shipped by appellant to its customers in other states, although it does appear that a small part of it was consigned to Newport, Ky. We do not regard the latter fact, however, as determinative of the character of the contract, because that question, in our judgment, must be considered primarily in the light of the intention and purpose of the buyer at the time the contract was made; and it clearly appears that that purpose was to ship the coal to customers outside the state. Besides, it is shown that a very small quantity of the coal was shipped to Newport, and there is nothing in this record to indicate that it was not ultimately destined to points outside the state. But if the points to which the shipments were consigned be regarded as decisive of the character of the contract, and if it be admitted that part of the coal was not only consigned to but was also delivered and consumed in Newport, the fact remains that the great bulk of it was shipped to points outside the state, and that predominating fact necessarily should and would give to the contract the character of interstate commerce. Accordingly, under either test, the transaction must be regarded as an incident to commerce between the states.

Appellant was a foreign corporation engaged in selling coal in different states. It had no business in Kentucky and had never had any; it merely purchased the output of a mine with the view, as the evidence conduces to show, of selling the coal to its customers in other states. To require, as a condition precedent to its right to enter into such a contract, that it comply with section 571 of the Kentucky Statutes would result in an imposition on interstate commerce beyond the power of the state to make. We hold, therefore, that the transaction was interstate commerce, and section 571 of Kentucky Statutes, as applied to it, imposes a burden repugnant to the commerce clause of the Constitution.

Wherefore the judgment is reversed, and the cause remanded for further proceedings.

Ky.App. 1922.
246 S.W. 433, 197 Ky. 174


Last Update Tuesday, 18-Dec-2012 01:35:35 EST

 County Coordinator
County Coordinator: Gayle Triller
Copyright © 2015 by the KYGenWeb Team. All
rights reserved. Copyright of submitted items
belongs to those responsible for their authorship or
creation unless otherwise assigned.