Messrs. Edward J. Kent and Henry A. Miller for plaintiff in error. [222 U.S. 210, 211] Messrs. George H. Calvert, James M. Magee, Donald Thompson, Murdoch Kendrick, and John C. Bell for defendant in error.
Mr. Justice Lamar delivered the opinion of the court:
The Banker Brothers Company, a corporation doing business in Pittsburg, was charged, as retail vendors, with a tax of 1 per cent on $ 351,000 on sales of automobiles to persons in Pennsylvania, under a statute of that state. It denied liability on the ground that the sales were interstate transactions. A decision of that point involves the question as to whether Banker Brothers Company acted as principal or as agent of a New York manufacturer.
It appears that the George N. Pierce Company was engaged in the business of manufacturing automobiles in Buffalo, and in 1905 made a contract by which it agreed 'to build for and sell automobiles to Banker Brothers Company at 20 per cent less than list prices. Deliveries to be f. o. b. Buffalo as soon as practicable after order for deliveries are received. Payments to be made in cash.'
The Banker Brothers Company kept no machines in stock except those used for demonstration, and were allowed to sell only within a restricted territory on terms stipulated by the manufacturer. The purchaser of the machine was to pay at least 10 per cent when he signed a printed form addressed to Banker Brothers Company, requesting it 'to enter my order for _____ motor car, for which I agree to pay the list price, f. o. b. factory, as follows: $_____ upon signing this order, and the balance upon delivery of the car to me.'
The name of the Pierce Company did not appear anywhere on this printed form furnished by it, but when the Banker Brothers Company accepted the order, it remitted the cash to the Pierce Company. If the latter accepted [222 U.S. 210, 213] the order, it agreed thereupon to make the automobile and ship it, drawing on Banker Brothers Company for the balance of the list price, less 20 per cent, with bill of lading attached. The Banker Brothers Company, on paying the draft, took up the bill of lading, received from the carrier an automobile which, though shipped in interstate commerce, had become at rest in the state of Pennsylvania. Banker Brothers Company had the title, and delivered it to the buyer on his paying the balance of the purchase money. Compare Dozier v. Alabama, 218 U.S. 124 , 54 L. ed. 965, 28 L.R.A.( N.S.) 264, 30 Sup. Ct. Rep. 649. The written contract was silent on the subject, but it was stipulated that the Pierce Company warranted the machine direct to the purchaser.
It is contended that Banker Brothers Company were agents and the Pierce Company an undisclosed principal. It is urged that the sale was an interstate transaction between the manufacturer and the purchaser, with Banker Brothers Company merely acting as an agent which looked after the delivery of the machine and collected the purchase price.
This is one of the common cases in which parties find it to their interest to occupy the position of vendor and vendee for some purposes under a contract containing terms which, for the purpose of restricting sales and securing payment, come near to creating the relation of principal and agent. But, as between Banker Brothers Company and the Pittsburg purchaser, there can be no doubt that it occupied the position of vendor. As such it was bound by its contract to him, and under the duty of paying to the state a tax on the sale.
The name of the Pierce Company was not mentioned in the order signed by the purchaser. Had there been a breach of its terms he would have had a cause of action against the Banker Brothers Company, with whom alone he dealt. If he had failed to complete the purchase, the Pierce Company would have no right to sue him on the [222 U.S. 210, 214] contract. The fact that he was liable for the freight by virtue of the agreement to 'pay the list price f. o. b. factory' did not convert it into a sale by the manufacturer at the factory; neither was that result accomplished because, with the machine, Banker Brothers Company also delivered to the buyer in Pittsburg a warranty from the manufacturer direct.
These were mere incidents of the intrastate contract of sale between Banker Brothers Company and the purchaser in Pittsburg, who was not concerned with the question as to how the machine was acquired by his vendor, or whether that company bought it from another dealer in the same city, or from the manufacturer in New York. The contract was made in Pennsylvania, and was there to be performed by the delivery of the automobile and the payment of the balance of the purchase price. See American Steel & Wire Co. v. Speed, 192 U.S. 500 , 48 L. ed. 538, 24 Sup. Ct. Rep. 365; American Exp. Co. v. Iowa, 196 U.S. 146 , 49 L. ed. 423, 25 Sup. Ct. Rep. 182. The court properly held it was not an interstate transaction, but taxable under the laws of Pennsylvania.