Black v. Albany Bowling Supplies, Inc., 39863
| Decision Date | 18 February 1963 |
| Docket Number | No. 39863,No. 1,39863,1 |
| Citation | 130 S.E.2d 263,107 Ga.App. 357 |
| Parties | Eugene C. BLACK, Trustee, v. ALBANY BOWLING SUPPLIES, INC |
| Court | Georgia Court of Appeals |
Louis A. Peacock, Albany, for plaintiff in error.
Burt & Burt, Albany, for defendant in error.
Syllabus Opinion by the Court
1. (a) Where goods, wares and merchandise are sold in bulk it is the duty of the purchaser 'five days before the completion of the purchase or the payment therefor' to notify creditors of the proposed sale. Code § 28-204. When such purchaser shall purchase a stock of goods and pay the price or any part thereof, or execute or deliver any evidence of indebtedness thereon, without giving such notice, the sale is as to creditors conclusively presumed fraudulent. Code § 28-205. Any such sale or transfer of a stock of goods, wares or merchandise shall be deemed a fraudulent transfer in contemplation of the Bulk Sales Law. Code § 28-206. Recognizing that this statute is in derogation of the common law and must be strictly construed (Avery & Sons v. Carter, 18 Ga.App. 527, 89 S.E. 1051), and that Code § 28-205 refers to both purchase and payment, whereas Code §§ 28-204 and 28-206 refer to purchase or payment, statutes must nevertheless be given a reasonable construction in order to effectuate the purpose intended. Williams v. General Finance Corp. of Atlanta, 98 Ga.App. 31, 104 S.E.2d 649. Under such a construction, a purchasing corporation of which the insolvent vendor is one of the incorporators is not entitled to receive the goods, wares and merchandise together with a bill of sale thereto from the vendor, and retain and use such personalty for a period of over six months and still maintain the position that the purchase has not been completed as to it within the meaning of the Bulk Sales Law simply because it has failed to pay over the purchase price to the debtor, and that for this reason there was no duty upon it to comply with the provisions of the law by giving the required notices to creditors.
(b) Even if such a position were otherwise maintainable, it would not apply to the facts of this case, where it appears that the consideration for the transfer of the stock of goods was 10 shares of the stock of the corporate vendee, and that such stock was in fact issued by the corporation to the vendor and by him endorsed back to the corporation to be held by them until the claims of creditors were cleared. Such a transaction constitutes a delivery of the purchase price to the vendor and a redelivery by him to the vendee for purposes of security only. Dinkler v. Baer, 92 Ga. 432(2), 17 S.E. 953; Tift v. Wight & Weslosky Co., 113 Ga. 681(1), 39 S.E. 503; Brewton v. Woodall, 92 Ga.App. 714(3), 89 S.E.2d 835.
(c) Title to the property involved in this trover action could of course pass out of the vendor only on the basis of a completed sale. If the parties did not intend to effectuate a sale, the defendant has no title or right of possession to interpose against the claim of the trustee. If it was intended that title pass (as delivery of the property and the bill of sale indicate) on the basis of a completed sale, such sale is void because there was no compliance with the provisions of the Bulk Sales Law. C. M. Miller Co., Inc. v. Lunceford, 54 Ga.App. 21, 186 S.E. 766. So considered, the transaction between Wood and the defendant corporation by which he delivered to it his entire stock of goods, wares and merchandise by bill of sale and in consideration received 10 shares of corporate stock which he endorsed and returned to the vendor, without compliance on the part of either with the provisions regarding notice to creditors, must be conclusively deemed fraudulent, with the result that title to the merchandise remains in the vendor, as against the claims of creditors and those acting for them. McDowell v. McMurria, 107 Ga. 812, 33 S.E. 709.
2. (a) To the trover petition of Black as trustee in bankruptcy of the vendor Wood, the defendant interposed a plea in abatement alleging that Wood had been adjudged a bankrupt on January 5, 1962 and had claimed a homestead exemption for himself and his family of...
To continue reading
Request your trial