C. M. Miller Co., Inc. v. Lunceford
| Decision Date | 18 June 1936 |
| Docket Number | 25444. |
| Parties | C. M. MILLER CO., Inc., v. LUNCEFORD. |
| Court | Georgia Court of Appeals |
Rehearing Denied July 23, 1936.
Syllabus by the Court.
1. Where one sues for trespass on account of the wrongful levy of an attachment on his property as the property of the defendant in attachment, and seeks to recover punitive damages, it is essential that he show malice or lack of probable cause, or show a willful and wanton trespass, and plaintiff's petition was properly laid in this respect.
2. A sale of goods, wares, or merchandise that comes within the provisions of the Bulk Sales Law of this state (Ga.Laws 1903 p. 92; Code 1933, §§ 28-203 to 28-206), if the parties thereto fail to comply with the requirements of that law, is conclusively deemed fraudulent and void, and the vendee acquires no title thereto as against creditors of the vendor.
3. In such a case a creditor of the vendor at the time of such sale may sue out an attachment against the vendor and levy the same upon such merchandise when in possession of the vendee.
4. One who purchases a retail mercantile business from a merchant where there is no compliance with the law as to sales in bulk, is not entitled to retain against creditors of the merchant articles placed in the store by him after the purchase, which merely replace the goods sold and are purchased with the avails of such sales.
5. By virtue of the Bulk Sales Law of this state, the following transactions are declared to be fraudulent and void as against creditors of the vendor, when the provisions thereof are not complied with: (1) Every sale or transfer of a stock of goods, wares, or merchandise in bulk, (2) or of substantially the entire business theretofore conducted by the vendor as such a stock, (3) or every sale or transfer of such a stock out of the usual or ordinary course of business or trade of the vendor.
6. While a sale of an undivided half interest in a mercantile business to another, who is taken in as a partner, does not come within the Bulk Sales Act, yet where within a short time after such a sale the vendor sells his remaining half interest to his new partner and the partner thus acquires the entire stock of merchandise and business, the transactions come within the provisions of that act, and where there is no compliance with its provisions the sale is fraudulent and void as to creditors of the vendor at the time of the sale of the first half interest to the vendee.
Error from Superior Court, Habersham County; B. P. Gaillard, Jr. Judge.
Action by E. A. Lunceford against C. M. Miller Company, Incorporated. Judgment for plaintiff, and defendant brings error.
Reversed.
In trespass for punitive damages for wrongful levy of attachment on property of plaintiff as property of defendant in attachment, plaintiff held required to show malice or lack of probable cause or willful and wanton trespass.
Hamilton Kimzey, Irwin R. Kimzey, and Herbert B. Kimzey, all of Cornelia, for plaintiff in error.
Sidney Lytle, Jr., of Cornelia, and Bynum & Frankum, of Clarkesville, for defendant in error.
J. D Hill individually owned a retail grocery and meat market business. At that time he was indebted to C. M. Miller Company, Inc., on three notes, one dated June 22, 1932, for $40.32, and two notes dated September 26, 1932, for $66.08 and $66.09 each. In October, 1932, J. D. Hill sold a half interest in this business to Lunceford under this arrangement: The stock of merchandise and fixtures then owned by Hill were inventoried and invoiced, and Lunceford agreed to purchase, and did purchase, additional goods and merchandise to equal the invoice of stock and fixtures on hand belonging to Hill, and the partners were to share equally in the venture. In December, 1932, Hill sold his remaining one-half interest in the partnership business to Lunceford. No effort was made by Hill or Lunceford to comply with the provisions of the Georgia Bulk Sales Act. The notes given by Hill were all dated prior to the time Hill made the first sale to Lunceford and represented an indebtedness outstanding at the time of the sale. C. M. Miller Company, Inc., did not know of the sale by Hill to Lunceford until after it was made. It sold merchandise to the new partnership and then sold merchandise to Lunceford after he acquired the whole business. Thereafter, on January 10, 1933, this company brought suit on said notes against Hill and had levied a fraudulent debtor's attachment on the stock of goods in the store of Lunceford. Hill made a satisfactory adjustment with C. M. Miller Company, Inc., of the indebtedness represented by the notes sued on and on which the attachment was based, and the plaintiff in attachment directed the sheriff to release the goods levied on under the attachment and to turn the keys to the door lock of the store back to Lunceford. Thereafter Lunceford brought suit for damages against C. M. Miller Company, Inc., alleging that the defendant company committed a trespass by causing said attachment to be wrongfully levied on his property as the property of the defendant in attachment, Hill, whereby his entire stock of merchandise was seized by the sheriff and his store locked by that officer, and alleging that the same was willful and wanton and without probable cause. Plaintiff sought the recovery of punitive, as well as actual, damages. The trial judge overruled a general demurrer of the defendant company to the petition, and to this judgment it excepted pendente lite. The case proceeded to trial and the jury returned a verdict in favor of the plaintiff, Lunceford, for $300. The defendant company moved for a new trial, which was overruled, and to this judgment it excepts.
1. Plaintiff sought the recovery of punitive or exemplary damages, as well as actual damages. While it is true that a defendant in attachment cannot maintain an action for trespass against the plaintiff in attachment except on the attachment bond, in the absence of allegations and proof that the attachment was sued out with malice and without probable cause, such principle is not applicable where the action is one for trespass brought by a third person against the plaintiff in attachment for a wrongful levy of an attachment on the property of such third person as the property of the debtor. However, as in this case, where the plaintiff in the trespass action, who was not the defendant in attachment, but claimed he was the owner of the goods levied on thereunder, seeks the recovery of punitive or exemplary damages on account of the levy upon and seizure of his property under the attachment against the defendant therein, it is necessary and proper that he should allege and prove malice and lack of probable cause. See Maxwell v. Speth, 9 Ga.App. 745, 72 S.E. 292; Williams v. Inman, 1 Ga.App. 321, 57 S.E. 1009; Speth v. Maxwell, 6 Ga.App. 630, 65 S.E. 580; McCormick v. Tribune-Herald Co., 13 Ga.App. 61, 78 S.E. 779; Farmers' & Traders' Bank v. Allen-Holmes Co., 122 Ga. 67, 49 S.E. 816. The petition was not subject to defendant's general demurrer.
2. The controlling question in this case is this: Were the provisions of the Bulk Sales Law (Code 1933, §§ 28-203 to 28-206) applicable to the transactions between Hill and Lunceford? If they were applicable thereto, and the parties should have conducted these transactions in compliance with the requirements of this law, then the title to the goods in the store did not pass from Hill to Lunceford, in so far as the creditors of Hill, who had extended credit to Hill prior to the sale of the first half interest in the stock of goods and business, to Lunceford, were concerned. A sale of a stock of merchandise, in violation of or without complying with the provisions of the Bulk Sales Act of this state, does not vest the title thereto in the vendee, as against creditors of the vendor, who had, before the sale, extended credit to the vendor. Parham & Co. v. Potts-Thompson Liquor Co., 127 Ga. 303, 56 S.E. 460. In such a case the transaction will be conclusively deemed to be fraudulent (Code 1933, § 28-205), and a creditor of the vendor may sue out an attachment and levy upon the merchandise in the possession of the purchaser. Carstarphen Warehouse Co. v. Fried, 124 Ga. 544, 52 S.E. 598; Kight v. Stephen Putney Shoe Co., 137 Ga. 493, 73 S.E. 740. Code 1933, § 28-203. The purchaser of merchandise in bulk is not relieved from the duty of notifying the creditors of the vendor of such proposed sale as prescribed by this section, by reason of a verbal notice given to them by the vendor himself. Moultrie Grocery Co. v. Holmes-Hartsfield Co., 22 Ga.App. 512, 96 S.E. 346. Knowledge of the sale by the creditor or his agent does not relieve the purchaser from the duty of giving the notice. National Cash Register Co. v. Stubbs, 29 Ga.App. 543, 116 S.E. 44. The evidence in this case failed to show any...
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