Brinson v. Monroe Automobile & Supply Co.

• Decision Date: 26 November 1934
• Docket Number: 32782
• Citation: 158 So. 558,180 La. 1064
• Parties: BRINSON v. MONROE AUTOMOBILE & SUPPLY CO. et al
• Court: Louisiana Supreme Court

158 So. 558

180 La. 1064

BRINSON v. MONROE AUTOMOBILE & SUPPLY CO. et al

No. 32782

Supreme Court of Louisiana

November 26, 1934

Rehearing Denied January 7, 1935

Appeal from Fourth Judicial District Court, Parish of Ouachita; J T. Shell, Judge.

Judgment amended, and, as amended, affirmed.

Thompson & Thompson, of Monroe, for appellants.

Hudson Potts & Bernstein, of Monroe, and Merrick, Schwartz, Guste, Barnett & Redmann, of New Orleans, for appellee.

OPINION

LAND, Justice.

On March 31, 1931, William G. Brinson, while in the employ of defendant, a commercial partnership carrying on an automobile and radio business in the city of Monroe, received certain injuries which resulted in his death.

Plaintiff, Mrs. Mary C. Brinson, is the widowed mother of her deceased son, and was wholly dependent upon him for support.

Plaintiff and defendant, by joint petition filed June 5, 1931, settled the claim under the Compensation Laws of this state (Act No. 20 of 1914, as amended); the lower court rendering judgment in favor of plaintiff for $ 20 per week for 300 weeks from March 31, 1931.

The Union Indemnity Company was the compensation insurance carrier for defendant, and paid plaintiff $ 20 per week regularly until that company became insolvent and went into the hands of receivers, when the payments immediately stopped.

The plaintiff received from that company $ 1,840, for 92 weeks; the last weekly payment having been made on December 31, 1932, covering the period from December 27, 1932, to January 2, 1933. No further payments have been made since that date.

After repeated demands upon defendant, without avail, plaintiff, on June 16, 1933, ruled her judgment debtor into court to show cause why the judgment should not be declared due in its entirety, because of the failure of defendant, after formal demand, to pay compensation for more than six consecutive weeks.

After answer filed by defendant and trial of the rule, judgment was rendered on June 28, 1933, against defendant, the commercial partnership, for compensation for 208 weeks at $ 20 per week, due and payable in its entirety, in the full sum of $ 4,160.

This judgment was filed in the mortgage records and duly recorded at 12:24 o'clock p. m. in that date.

On the morning of the same day, defendant partnership transferred all of its property to a corporation of the same name, except with the addition of the letters "Inc.," whose charter was filed at the time of the transfer.

A writ of fi. fa. was issued upon the judgment, and was returned nulla bona by the sheriff for the parish of Ouachita.

Plaintiff ruled her judgment debtor into court for the purpose of examination with reference to its estate and the mode and manner of this transfer. This examination finally took place, and was concluded by defendants, both the partnership and the corporation, giving plaintiff a letter admitting that the entire assets of the partnership were transferred in violation of the Louisiana Bulk Sales Law and that neither of the parties made any efforts to comply with the terms and provisions of the statute.

The present suit was then filed September 26, 1933, alleging that the transfer was made in violation of the provisions of Act No. 270 of 1926, the Louisiana Bulk Sales Law.

Plaintiff prayed that a writ of attachment issue upon the property transferred, that same be held until further order of the court for the benefit of all the creditors, including plaintiff; that its fair value be fixed and the proportionate rights of the creditors be determined; and that the property be administered in such a manner by sale, or as the court might direct and deem proper, for the satisfaction of the various creditors in their proportionate right.

Motion to dissolve the attachment was filed and overruled by the court.

Defendants answered, and the cause was set down on the merits.

At the time of trial, it was admitted by defendants that all of the creditors of the Monroe Automobile & Supply Company, the commercial partnership, had been satisfied in full except the judgment creditor, Mrs. Mary C. Brinson, plaintiff herein, and that those creditors had been paid by the Monroe Automobile & Supply Company, Inc.

It was further admitted that the value of the assets acquired by the corporation, formerly belonging to the partnership, exceeded by $ 200,000 the amount due all of the then unpaid creditors of the partnership.

Judgment was then rendered in favor of Mrs. Mary C. Brinson, plaintiff, against defendants, decreeing that the Bulk Sales Law had been violated and that the transfer was void as against the creditors of the transferor, that plaintiff was the only unsatisfied creditor of the transferor, Monroe Automobile & Supply Company, partnership, at the time of the transfer in bulk, and that Monroe Automobile & Supply Company, Inc., was accountable, in accordance with the statute, to plaintiff.

The writ of attachment was maintained, the lien and privilege resulting therefrom was recognized, and judgment was rendered against Monroe Automobile & Supply Company, Inc., for $ 4,160 and all taxable costs.

It was ordered that the property seized and attached be sold according to law, and that plaintiff be paid by preference and priority over any and all other creditors of defendant Monroe Automobile & Supply Company, Inc.

From this judgment defendants have taken a suspensive and devolutive appeal.

Plaintiff has answered the appeal, setting forth that same is frivolous and for the sole purpose of delay, and prays that damages be had by this appellee therefor.

1. Attorneys for defendants Monroe Automobile & Supply Company and Monroe Automobile & Supply Company, Inc., assign as errors the following:

(a) The court erred in sustaining the writ of attachment, as no one of the statutory grounds or causes for an attachment was alleged or proved by plaintiff.

(b) The court erred in holding that the transfer complained of came within the intendment of the Bulk Sales Law, Act No. 270 of 1926.

(c) If the transaction complained of came within the provisions of the Bulk Sales Law, Act No. 270 of 1926, the court erred in rendering personal judgment against Monroe Automobile & Supply Company, Inc., the alleged purchaser.

It is true that an attachment never issues in aid of the execution of a judgment. But when a transfer of all the assets of a debtor is made in violation of the Bulk Sales Law, on the same day the creditor has obtained a judgment, but prior to the recordation thereof, it is not true that the judgment creditor loses his right to a writ of attachment under Act No. 270 of 1926.

Section 8 of this statute provides: "That any property transferred in violation of the provisions of this Act shall be subject to attachment in an action brought by any creditor of the transferor." (Italics ours.)

The words "any creditor of the transferor" are, without question, broad enough to include a judgment creditor. Indeed, it would be a situation anomalous in the extreme if a creditor whose claim has been liquidated by judgment should be placed in a more disadvantageous position, as to the vital right of attachment under the Bulk Sales Law, than a creditor with a mere unliquidated claim.

The writ of attachment is granted to the creditor of the transferor under the Bulk Sales Law, not in execution of a judgment, but merely to conserve the property, by seizing the same under the writ, in order that it may be protected, and the transferee may not dispose of it in the same manner as the transferor has already done.

The statute specifically declares that a sale in violation of its terms is void and is a nullity in so far as the creditors of the transferor are concerned, and that the transferee, into whose possession the property transferred has come, shall hold the same as receiver, and that he shall account to the creditors of the transferor, each in his pro rata share to the extent of the fair value of the property transferred. Sections 1 and 3.

Because of the exigency of the case, the Legislature conferred upon any creditor the right to attach solely upon the ground of the transfer having been made in violation of the statute. Such transfer was fraudulent and void under the very terms of the statute, and it was of vital importance that the property should be held intact in the custody of the court in order to compel the transferee to account for same to the creditors.

Had the Legislature intended otherwise, allegation of the usual grounds for the writ of attachment under article 240 of the Code of Practice would undoubtedly have been specifically required.

2. The second assignment of error is that the court erred in holding that the transaction or transfer complained of came within the intendment of the Bulk Sales Law, Act No. 270 of 1926.

Section 1 of the statute provides: "That the transfer in bulk, and otherwise than in the ordinary course of trade and in the regular and usual prosecution of the business of the transferor, of any portion or the whole of a stock of merchandise, or merchandise and fixtures, or of all or of substantially all of the fixtures or equipment used or to be used in the display, manufacture, care or delivery of any goods, wares or merchandise including movable store and office fixtures, horses, wagons, automobile trucks and other vehicles or other goods or chattels of the business of the transferor shall be void as against the creditors of the transferor, unless made in conformity with the provisions of this Act." (Italics ours.)

In the sworn statement of Mr. W. L. Ethridge, the managing partner of the commercial partnership, Monroe Automobile & Supply Company, in examination of that partnership as a judgment debtor, Mr. Ethridge's...