Continental Oil Co. v. American Co-Op. Ass'n

• Decision Date: 29 July 1924
• Docket Number: 1120
• Citation: 31 Wyo. 433,228 P. 503
• Parties: CONTINENTAL OIL CO. v. AMERICAN CO-OP. ASS'N
• Court: Wyoming Supreme Court

228 P. 503

31 Wyo. 433

CONTINENTAL OIL CO. v. AMERICAN CO-OP. ASS'N

No. 1120

Supreme Court of Wyoming

July 29, 1924

APPEAL from District Court, Niobrara County; WILLIAM A. RINER Judge.

Action by the Continental Oil Company against the American Co-operative Association, a corporation and J. W. Clark to establish a trust under the bulk sales law; J. W. Clark and O. I. Stenger were also garnished. From a judgment for plaintiff awarding unsatisfactory relief and an order holding Stenger as garnishee, plaintiff appeals.

Affirmed.

M. H Neil & Smith, Brock & Crass for appellant.

Appellant is entitled to judgment upon default; the paper called a "disclosure" filed by Clark was not intended as an answer in the case or to the garnishment, 5659 C. S.; attachment and garnishment are separate proceedings Carty v. Fenstemaker, 14 O. S. 457, 28 C. J. 21; the action was to create a trust, 27 C. J. 875; the attachment proceedings were separate and distinct, Elliott v. Mitchell, 3 Greene 237; Bundrem v. Denn, 25 Kans. 430; Stutzner v. Printz, 43 Nebr. 306; an unverified answer is not a pleading, Johnson v. Dixon Co., 29 Cal.App. 52; Riley v. College, 118 Ga. 849; default should have been entered, Hurlburt v. Straub, 54 W.Va. 303; Ins. Co. v. Moreland, 60 Fla. 153; U. S. v. County, 122 U.S. 306; Buck v. Co., 254 Ill. 198; 5887 C. S., suit was brought under the bulk sales law, 4720 C. S.; Clark was merely a receiver, Hartwig v. Rushing, 93 Ore. 6; Fitz Henry v. Munter, 33 Wash. 629, 27 C. J. 885; dismissal of petition as against Clark was void, Metcalf v. Hart, 3 Wyo. 513, 23 Cyc. 684; judgment of estoppel against plaintiff was void; Clark did not intervene; he was not entitled to relief, 6 C. J. 387; the Wisconsin Court had no jurisdiction over Wyoming property and attachment thereof was proper, Frowert v. Blank, (Pa.) 54 A. 1000; Catlin v. Wilcox, 123 Ind. 477; Bank v. LaCombe, 84 N.Y. 367; Haine v. Lester, 44 Conn. 196; foreign receivers are without standing as against local creditors, Reynolds v. Adden, 136 U.S. 348; Zacher v. Co., 59 S.W. 493; Smith v. Berz, 125 Ill.App. 122; estoppel must be pleaded, Lellman v. Mills, 15 Wyo. 149; the doctrine of election of remedies does not apply 20 C. J. 6; Clark on Receivers, page 755.

Edwin L. Brown and Kinkead, Ellery & Henderson, amicus curiae.

The Co-operative Association was not made a party to the appeal and this defeats jurisdiction; In re Laramie River, 192 P. 680; Barkley v. Schaff, 193 N.W. 267; Contin. Co. v. Gue, 98 N.W. 147, Steele v. Million, (Okla.) 155 P. 495; Lewis v. Stittel, 165 F. 157; judgment in the attachment proceedings was final and appealable, Smith Co. v. Casper Co., 5 Wyo. 510; as was also the judgment in the main case; appellant waived its right to judgment by default, Madison v. Co., 99 P. 176; Hebert v. Patrick (Colo.) 146 P. 190; Bank v. Kenyon (Colo.) 163 P. 869; Medical Co. v. Mayberry, (Tex.) 193 S.W. 199; errors and defects not affecting substantial rights are disregarded, 5708 C. S.; the bulk sales law does not provide an equitable remedy, Hartwig v. Rushing, (Ore.) 182 P. 177; Rothchild v. Trewella, (Wash.) 79 P. 480; Rubinsky v. Spiro, 113 N.Y.S. 852; Klein v. Maravelas, 152 N. Y. S. 584; Smith Co. v. Goldner, (N. J.) 113 A. 487; In re Perman, 157 N. Y. S. 971; the bulk sales law does not apply to sales by receivers, Bank v. Sterrett, 246 F. 753; Bernheimer v. Converse, 51 L. ed. 1163; in the absence of a bill of exceptions the court will assume the evidence below to have been sufficint to sustain the judgment, Tozer v. Hobb's Estate, 137 N.E. 715; Bank of Chadron v. Anderson, 7 Wyo. 441; a foreign receiver may possess himself of assets and defend his title, Lewis v. Co. 119 F. 391; Lew Moy v. U. S., 164 F. 322; especially where the order of appointment directs him to take possession, Bank v. McCloud, 38 O. S. 174; Boyles v. Co., 216 Ill.App. 576; Catlin v. Wilcon Co. supra; the principle of comity also applies, High on Receivers, 4th Ed. 68; foreign creditors may not procure preference over other foreign creditors by attachment, Witters v. Bank, 50 N.E. 932, DeMattos v. Ry. Co., 55 So. 832; judicial sales are excepted by Section 4721 C. S.; Bowen v. Quigley, (Mich.) 130 N.W. 690; there was no attachment levy, Laws 1921, Chap. 14; 6 C. J. 220; the statute must be observed, Weiss v. Ahrens, 135 P. 987.

M. H. Neil & Smith, Brock & Crass in reply.

No evidence was submitted below, none could be presented in the appellate court; the trial court sustained the attachment; there was no judgment in Clark's favor; title to goods transferred in violation of the bulk sales law passes to transferee until divested by a proper proceeding, 27 C. J. 887; property attached did not belong to a judgment creditor, Iverson v. Bradrick, 104 P. 130; the foreign receiver had no title to property not in his possession, Sands v. Greeley Co., 88 F. 130; appellant excepted to the dismissal of the attachment on the real estate; the term property includes real estate, 32 Cyc. 648.

BLUME, Justice. POTTER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action brought on January 26, 1922, by the Continental Oil Co., a Colorado corporation, against the American Co-operative Association, a corporation of Wisconsin, and J W. Clark. The petition alleges that in the year 1919 plaintiff sold and delivered to said Wisconsin corporation goods, wares and merchandise of the value of $ 817.10; that said Wisconsin corporation was engaged in the general mercantile business at Van Tassell, Niobrara County, Wyoming; that subsequently said Wisconsin corporation sold its said store and general mercantile business, including all goods, wares and merchandise in connection therewith, to defendant J. W. Clark, who is now in possession thereof; and that said sale to Clark was made without complying with the bulk-sales law of this state. Plaintiff asks a judgment against said Wisconsin corporation for the value of said goods, and that said defendant Clark be declared a receiver and held accountable to plaintiff for the goods, wares and merchandise bought of said Wisconsin corporation as aforesaid. A summons was issued in said cause and personally served on said defendant Clark. An Affidavit of attachment also was filed, said defendant Clark was garnished and lots 8, 9 and 10 in Block 9 of the Pioneer Townsite's first addition of the town of Van Tassell, Wyoming, was levied upon. One O. I. Stenger, of Van Tassell, Wyoming, was also garnished. The garnishee O. I. Stenger answered, admitting that he had in his possession certain promissory notes belonging to said Wisconsin corporation, but he did not deny the right of the plaintiff in said cause to sequester the property in his possession. The defendant Clark, however, filed, on March 2, 1922, what he denominated a "disclosure." A so-called "amended disclosure" was filed by him on April 6, 1922. Both the disclosure as well as the amended disclosure purport to be filed under oath by "J. W. Clark, garnishee defendant." In the amended disclosure said defendant Clark sets forth the property formerly belonging to the Wisconsin corporation which came into his possession, including certain personal property as well as the real estate hereinabove mentioned; that the said property was sold to him on June 24, 1921, by the receivers of the American Co-operative Association for the consideration of $ 4000, of which $ 100 has been paid in cash and $ 400 by promissory notes; that said property was delivered to him and that he went into possession thereof pursuant to said sale. It is further alleged: That pursuant to an order and judgment of the Circuit Court, within and for the County of Milwaukee and State of Wisconsin, in an action wherein the Jung Shoe Company is plaintiff and the American Co-operative Association is defendant, Thomas Nimlos and Julius J. Goetz, of the City of Milwaukee, Wisconsin, were appointed Receivers of the said American Co-operative Association and that by virtue of said order and judgment all of the assets of the American Co-operative Association were sequestered for the benefit of all the creditors of the said Association and said Receivers were authorized and directed to take charge and possession of all its property, real and personal, wheresoever situated, with the usual powers and duties of Receivers in such cases; that said order and judgment required the said Receivers to execute a bond for the faithful performance of their said duties, in the penal sum of fifty thousand dollars; that said Receivers executed such bond, which was duly approved by the Clerk of said Circuit Court on or about the 19th day of October, A. D. 1920; that on or about said date said receivers took the required oath, as such Receivers, and they now are, and ever since about said date have been, the duly appointed, qualified and acting Receivers of the said American Co-operative Association; that by virtue of said order and judgment all of the creditors of the said American Co-operative Association were enjoined and restrained from taking or pursuing any proceedings either in law or equity against the American Co-operative Association, except in said action in said Circuit Court; that said order and judgment required the said Receivers to publish notice in a newspaper in said City of Milwaukee for at least four successive weeks and to mail to each and every creditor a copy of said notice, notifying said creditors of the proceedings in said Circuit Court, which notice was to require all creditors of the American Co-operative Association to exhibit their claims in said court, by filing with the Clerk thereof, within six months from and after the first day of November, A. D. 1920, proof of claims, and requiring all such creditors to become part...