Albano v. Motor Center of Pocatello
| Decision Date | 23 June 1954 |
| Docket Number | No. 8042,8042 |
| Citation | 75 Idaho 348,271 P.2d 444 |
| Parties | ALBANO et al. v. MOTOR CENTER OF POCATELLO, Inc., et al. |
| Court | Idaho Supreme Court |
H. William Furchner, Blackfoot, for appellants.
Anderson & Anderson, Pocatello, for respondents.
B. W. Davis, O. R. Baum, Ruby Y. Brown and M. R. Whittier, Pocatello, amici curiae. On Petition for Rehearing.
Plaintiffs, hereinafter referred to as respondents, brought an action to recover $614.17 for goods, wares and merchandise sold and delivered to Motor Center of Pocatello, Inc., hereinafter referred to as vendor, and from Motor Center of Pocatello, Incorporated, hereinafter referred to as vendee.
The vendee bargained for the purchase in bulk of the stock of merchandise, fixtures, equipment and supplies of the vendor otherwise than in the regular course of business for $33,500. Insofar as the record before this court is concerned the purchase price is conceded to be the reasonable value of the property transferred under the contract.
It is alleged in the complaint that the parties to the transaction failed to comply with the Bulk Sales Law of Idaho, I.C. § 64-701 et seq. and that such sale was fraudulent and void and that both vendor and vendee were personally liable to respondents as creditors of the vendor for their proportionate share of the purchase price.
Upon issues joined the matter was tried before a jury.
The vendor confessed judgment which was directed by the court. The jury returned a verdict for respondents against the vendee and judgment was entered. From the judgment against vendee, it has prosecuted this appeal. Vendor did not appeal.
The contract of sale was made in writing on September 23, 1952. At the same time the vendor furnished vendee a sworn statement in writing, purportedly setting forth the names and addresses of all of its creditors including respondents, together with the amount of indebtedness due or owing or to become due or owing by vendor to each of said creditors. All such creditors so listed were notified in writing, by registered mail, more than five days prior to the date set for completing the sale, that the sale would be consummated on October 2, 1952, in conformance with the provisions of sec. 64-702, I.C. The purchase price was ample to pay each listed creditor in full.
Prior to the date set for the consummation of the sale the vendee, appellant herein, received notice of the claims of many additional creditors of the vendor who were not listed in the verified list and also further claims of some of the listed creditors. The aggregate amount of the listed and unlisted claims substantially exceeded the purchase price.
Thereupon and prior to October 2, 1952, vendee, being in no position to determine the bona fides of the claims of the creditors who were not listed and the claims of some listed creditors for sums in excess of that shown on the sworn statement, paid the entire purchase price to N. A. Jordan, its secretary, as escrow holder, by depositing the purchase price to his account in a Pocatello bank for the benefit of the bona fide creditors of the vendor.
N. A. Jordan, allegedly being unable to ascertain the respective rights of the claimed creditors, filed suit in the District Court of the Fifth Judicial District, Bannock County, Idaho, purportedly making all the alleged creditors, the vendor and the vendee parties, and sought a determination of the bona fides of all those who claimed to be creditors.
In the meantime the escrow holder paid in full one of the listed creditors whose claim represented in excess of one-half of the total purchase price. This creditor held a purportedly valid mortgage on a substantial portion of the machinery and equipment and had threatened to initiate an action to foreclose its lien.
On the day following the filing of such action by the escrow holder, respondents filed this action.
Except for the sum paid to the one purportedly secured creditor the balance of the purchase price remains on deposit in the escrow account.
Numerous errors have been assigned; however the controlling issues for determination revolve around certain contentions urged by respondents with reference to the matter of the failure to comply with the provisions of the Bulk Sales Law.
The pertinent statute, sec. 64-702, I.C., provides as follows:
'Liability of vendee.--Whenever any person shall bargain for the purchase in bulk of any portion of a stock of merchandise or fixtures otherwise than in the ordinary course of trade and in the regular and usual prosecution of the seller's business or an entire stock of merchandise in bulk or the property, furniture, fixtures, equipment or supplies of a hotel or restaurant, barber shop or other place of business wherein the furniture, fixtures, and equipment are used in carrying on said business, otherwise than in the regular course of trade, for cash or on credit, and shall pay any part of the price, or execute and deliver to the vendor thereof, or his agent, or to any person for his use, any promissory note or other evidence of indebtedness, or give credit, whether or not evidenced by promissory note or other evidence of indebtedness, for said purchase-price or any part thereof, without at least five days previously thereto having demanded of and received from said vendor or from his agent the statement provided for in section 64-701 and verified as therein provided, and without notifying also at least five days previously thereto, personally or by registered mail, every creditor as shown upon said verified statement of said proposed sale or transfer, with the price thereof, the person to whom said sale or transfer is made, and the time and conditions of payment, and without paying or seeing to it that the purchase-money of the said property is applied to the payment of the bona fide claims of the creditors of the vendor as shown upon said verified statement, share and share alike, unless otherwise provided for by the statutes designating priority of payments, such sale or transfer shall be fraudulent and void, and said vendee shall be personally liable to any creditor or to all creditors of said vendor for their proportionate share of the purchase-price of said business, whether the same has been paid by vendee to vendor or not.'
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...Pollak, 1939, 59 Nev. 145, 85 P.2d 1008; Rocky Mountain Powder Co. v. Hamlin, 1957, 73 Nev. 87, 310 P.2d 404; Albano v. Motor Center of Pocatello, 1954, 75 Idaho 348, 271 P.2d 444; Frye & Smith, Limited v. Foote, 1952, 113 Cal.App.2d Supp. 907, 247 P.2d 825, citing Scadden Flat Gold-Mining ......
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