Cohen v. Calhoun

• Decision Date: 16 October 1933
• Docket Number: 30689
• Citation: 150 So. 198,168 Miss. 34
• Court: Mississippi Supreme Court
• Parties: COHEN v. CALHOUN

150 So. 198

168 Miss. 34

COHEN v. CALHOUN

No. 30689

Supreme Court of Mississippi

October 16, 1933

(En Banc.)

1. FRAUDULENT CONVEYANCES.

Bulk sales statute held applicable to bulk sale of 150 dresses out of usual course of seller's retail business, though seller intended opening new store with better stock and such sales were customary among retail merchants of city (Code 1930, section 3353).

2. CUSTOM AND USAGES.

Bulk sales statute prevails over custom (Code 1930, section 3353).

ETHRIDGE J., dissenting.

HON. W H. POTTER, Judge.

APPEAL from circuit court of Hinds county, HON. W. H. POTTER, Judge.

Action by Leonard J. Calhoun, trustee in bankruptcy of B. J. Miller against Z. Cohen. From a judgment of the circuit court affirming a judgment of the county court in favor of plaintiff, defendant appeals. Affirmed.

Affirmed.

Broom, Bilbo & Shipman, of Jackson, for appellant.

The Bulk Sales Law is in derogation of the common law, and must be strictly construed.

Whittington v. Yazoo Delta Mortgage Co., 148 Miss. 861, 114 So. 750; 12 R. C. L., pp. 525-526, section 54.

Such a sale is only prima facie fraudulent and void. The presumption of voidness is rebuttable; but how? We answer that the purchaser at such a sale may rebut this presumption in one way only, and that is by showing a compliance with subsections (a), (b) and (c); Moore Dry Goods Co. v Rowe, 97 Miss. 775, 53 So. 626, 99 Miss. 30, 54 So. 659; Williams v. Bank, 15 Okla. 477, 82 P. 496; Thrope v. Pennock Mer. Co., 99 Minn. 26, 108 N.W. 940; Gilbert v. Gonyea, 113 Minn. 459, 115 N.W. 640; Spintz v. Saxon, 126 A.D. 421, 110 N.Y.S. 586; Fisher v. Herman, 118 Wis. 428, 95 N.W. 392; Baumeister v. Fink, 141 Ill.App. 372.

The fact that one purchases a stock of merchandise and fails to comply with the provisions of the Bulk Sales Law is only presumptive evidence that as to creditors of the vendor the sale is fraudulent and void.

Johnson Brothers Company v. Washburn, 77 So. 461; 27 C. J. 876, notes 44 and 45; Off v. Morehead, 235 Ill. 40, 85 N.E. 264; Williams v. Preslo, 84 Ohio State, 328, 95 N.E. 900.

The case of Moore v. Rowe, 97 Miss. 775, 53 So. 626, appears to be in direct conflict with what is generally held to be the sound doctrine, supported by an overwhelming weight of authority.

Custom and usage are creatures of the common law, and were given force and effect by that law, and statutes in derogation of the common law are to be construed in reference to the principles of that law, and it cannot be presumed that the legislature intended to make any innovation upon the common law further than the necessity of the case absolutely required.

Edwards v. Gaudding, 58 Miss. 118; Holloman v. Bennett, 44 Miss. 322; Potter v. Fid. & Dep. Company, 101 Miss. 823, 58 So. 713; Dibbrell v. Dandridge, 51 Miss. 55; Mclnnis v. State, 52 So. 634; State v. A. & V. R. R. Company, 67 Miss. 647, 7 So. 52; Snead v. Gillman, 44 So. 830; Adams v. Saunders, 93 Miss. 520, 46 So. 960; Hatten v. State, 92 Miss. 651, 46 So. 708; 27 R. C. L., p. 162, section 10, notes 3 and 4; 27 R. C. L. 187, section 29, notes 13 and 14.

Usage of a trade is a matter of fact, not opinion; it may be proved by witnesses testifying of its existence and uniformity from their own knowledge obtained by observation of what is practiced by themselves and others in the trade to which it relates.

Hoskins v. Warren, 115 Mass. 514; Dumont v. Kellog, 29 Mich. 421; Morningstar v. Cunningham, 110 Ind. 328; Ames v. Kimball, 125 F. 332; Helm v. Life Ins. Co., 61 Penn. 107; Miller v. Higgins (Pa.), 76 A. 711; Roidance v. Descalzi, 90 A. 55; Albus v. Toomey (Pa.), 116 A. 917; Mackronsky v. Weston, 155 A. 741; Giles v. Tsutokawa (Wash.), 187 P. 323; Howell v. Zempleman, 66 Tex. 292, 17 S.W. 487; Barreda v. Milmo National Bank (Tex.), 241 S.W. 743; 12 R. C. L. 526, sec. 55; Young v. Lemieux, 79 Conn. 434, 211 U.S. 489.

In determining whether a given transaction is made in the ordinary and usual course of the business of a party, the question is not whether such transactions are usual in the general conduct of the business throughout the community, but whether they are according to the usual course of business of a particular group of persons in the community, to which a particular person whose conveyance is the subject of investigation belongs.

Rison v. Knapp, 20 Fed. Cas. 835; 6 Words & Phrases, p. 5042 (1 ser.); 27 R. C. L. 198, section 43; Bodfish v. Fox, 23 Me. 90, 39 Am. Dec. 611.

A general custom or usage is a mode of action which has by universality and long continuance acquired the force and effect of a law, uniformly applicable to all persons under like circumstances and conditions.

6 Stan. Proc. 327; Milroy v. C. M. & St. P. Ry. Co., 98 Iowa 188, 67 N.W. 276; City Electric! Street Ry. Co. v. First National Bank, 62 Ark. 33, 34 S.W. 89; C. C. C. & St. R. Co. v. Jenkins, 174 Ill. 398, 51 N.E. 811; Ballinon, etc., Company v. Pickett, 78 Md. 375, 28 A. 279; 6 Stan. Proc. 328; Bodfish v. Fox, 23 Me. 90, 39 Am. Dec. 611; Am. Lead Pencil Company v. N. O. & St. L. R. Company (Tenn.), 134 S.W. 613; Wilmington R. Company v. White, 6 Penne. (Del.) 363, 66 A. 1009; Stimmel v. Brown, 7 Houst. (Del.) 219, 30 A. 996.

A custom or usage in business, existing among those engaged therein in a certain city, is a general one with reference to which it will, in the absence of rebutted evidence, be presumed that repeated and continued acts acquire the force of law.

Burnridge v. Gunbell, 72 Miss. 371, 16 So. 792.

It is not only a fair presumption but it amounts to virtually a conclusive presumption that the legislature of Mississippi, in enacting the Bulk Sales Law, did so with the intent and purpose to make the provisions thereof, first a rule of evidence; second, that it legislated with regard to any particular and well established usage or custom of trade or otherwise; third, and that the legislature even though we may be mistaken with reference to the first proposition did in fact and in law intend by the enactment of said statute to create a substantive rule of law rather than a rule of evidence, yet the second proposition must and will prevail.

Robertson & Campbell, of Jackson, for appellee.

Good faith and payment of value is not a defense in case of a failure to comply with the Bulk Sales Law.

Orgill Bros. v. Gee, 152 Miss. 591, 120 So. 737; 27 C. J. 876, section 885.

A sale of one hundred and fifty dresses at one time for cash at two dollars per dress by a retail dry goods merchant out of his stock of dry goods to another retail dry goods merchant, purchased for the purpose of resale in his store, sold in an effort to dispose of the entire stock of the person so that he could move to another location, is a violation of the Bulk Sales Law, even though it may be a practice, custom or usage of retail merchants in the city of Jackson, to make such sales in such manner and even if this custom or usage were participated in by the seller.

Freeman v. Collier Racket Company, 101 S.W. 202, 100 Tex. 476, 105 S.W. 1129, 44 Tex. Civ. App. 177; Keller v. Fowler Bros. & Cox, 256 S.W. 879, 148 Tenn. 571; Nisbet, Assignee, v. Quinn, Circuit Ct. Sou. Dist. Ga., 7 F. 760; Goodman v. Clarkson (Ga.), 147 S.E. 183.

Ordinary course of trade, as used in the Bulk Sales Law, means ordinary course of trade of the seller and not ordinary course of trade of other merchants in the locality of the seller.

Rison v. Knapp (U. S.), 20 Fed. Cas. 835.

Custom and usage cannot prevail when opposed to law.

D. S. Pate Lumber Co. v. Weathers (Miss.), 146 So. 433.

Anderson, J., Ethridge, J., dissenting.

OPINION

Anderson, J.

Appellee brought this action against the appellant in the county court of Hinds county to recover the sum of three hundred dollars. There was a trial resulting in a judgment in favor of appellee. From that judgment appellant appealed to the circuit court of Hinds county, where the judgment was affirmed, and from that judgment appellant prosecutes this appeal.

There is involved a construction of the bulk sales statute, section 3353, Code of 1930.

B. J. Miller was a retail merchant in the city of Jackson. He was duly adjudged a bankrupt, and appellee was appointed trustee to administer the estate under the federal bankruptcy laws. Prior to the adjudication of bankruptcy Miller sold to appellant one hundred and fifty ladies' dresses in bulk, for which appellant paid him the sum of three hundred dollars. At the time of the sale Miller was insolvent. Both the seller and appellant failed to comply with paragraphs (a), (b), and (e) or the bulk sales statute. That statute in this language:

"A sale of any portion of a stock of merchandise, otherwise than in the ordinary course of trade, or in the regular and usual prosecution of the seller's business, and a sale of an entire stock of merchandise in gross, shall be presumed to be fraudulent and void as against the creditors of the seller, unless, at least five days before the sale:

"(a) The seller shall have made a full and detailed inventory, showing the quantity, and, so far as can be done by the exercise of reasonable diligence, the cost price to him of each article sold; and

"(b) The purchaser shall have in good faith made full and explicit demand of the seller for the name, place of residence and business and post-office address of each of his creditors, and the sum due each, and to which demand the seller shall have made full and truthful written answers; and

"(c) The purchaser shall have in good faith notified personally or by mail each of the seller's creditors, of whom he has knowledge, or with the exercise of reasonable dilligence could have acquired knowledge, of the proposed sale and of the cost price of the merchandise proposed to...