Electrical Products Corporation of Oregon v. Ziegler Drug Stores, Inc.

• Decision Date: 21 September 1937
• Citation: 157 Or. 267,71 P.2d 583
• Parties: ELECTRICAL PRODUCTS CORPORATION OF OREGON v. ZIEGLER DRUG STORES, Inc. (WITTY, Garnishee).
• Court: Oregon Supreme Court

71 P.2d 583

157 Or. 267

ELECTRICAL PRODUCTS CORPORATION OF OREGON v. ZIEGLER DRUG STORES, Inc. (WITTY, Garnishee).

Supreme Court of Oregon

September 21, 1937

In Banc.

Appeal from Circuit Court, Multnomah County; Hall S. Lusk, Judge.

Action by the Electrical Products Corporation of Oregon against Ziegler Drug Stores, Incorporated, wherein plaintiff served notice of garnishment upon Lee H. Witty, alias John Doe. From an order sustaining garnishee's motion to strike parts of allegations of plaintiff's motion for judgment on the pleading against garnishee, and rendering judgment for plaintiff for part of plaintiff's claim only, plaintiff appeals.

Affirmed.

Proceeding by garnishment invoking the provisions of the Bulk Sales Law which declares sales of goods in bulk fraudulent and void, it creditors are not listed and notified (sections 64-101 and 64-102, Oregon Code 1930). Plaintiff, being a holder both of a liquidated and an unliquidated claim, appeals from that portion of the order and judgment of the trial court to the effect that said provisions are not applicable to unliquidated claims.

Ralph B. Herzog, of Portland (Carey Martin, of Portland, on the brief), for appellant.

R. C Bradshaw, of Portland (Joseph, Veatch & Bradshaw, of Portland, on the brief), for respondent.

KELLY Justice.

Lee H Witty, garnishee, having made an unsatisfactory return upon notice of garnishment served upon him pursuant to a writ of execution issued upon the judgment rendered herein August 9 1933, in favor of plaintiff and against defendant in the sum of $9,034.32 damages, and $2,000 attorneys' fees together with interest thereon at the rate of six per cent., from date of judgment and $24 costs and disbursements, allegations and interrogatories were served upon said garnishee. Said allegations were in part to the effect that defendant had sold to said garnishee a stock of goods and merchandise; that said garnishee, as the purchaser of said stock of goods, failed to comply with the Bulk Sales Law (sections 64-101 and 64-102, Oregon Code 1930), in that he had not demanded or received from defendant a list of creditors of said defendant together with the amounts of their respective claims and had not notified plaintiff or caused plaintiff to be notified of said sale. It appears in plaintiff's brief that the sale of said stock of goods by defendant to said garnishee was consummated early in 1931, which, it will be noted, was more than two years before plaintiff's judgment was rendered.

To the said allegations, said garnishee filed a motion to strike those parts thereof dealing with the portion of plaintiff's judgment based upon damages accruing by reason of defendant's failure to perform a certain contract whereby defendant leased certain neon electric signs at a monthly rental of $17.50 each. Plaintiff had terminated and canceled said contract because of defendant's default in payment of said monthly rental at a time when there had accrued as such rental for the months of November and December, 1930, and January, 1931, the sum of $472.

Plaintiff interposed a motion for judgment on the pleadings against said garnishee in the full sum of plaintiff's said judgment against defendant including both said accrued rental and said damages. From an order sustaining said garnishee's motion to strike parts of said allegations and rendering judgment in favor of plaintiff and against said garnishee for said accrued rental in the sum of $472, plaintiff prosecutes this appeal.

The crucial question here is whether a party holding an unliquidated claim is a "creditor" within the meaning of the Bulk Sales Law (Code 1930, §§ 64-101 to 64-104). The trial court held that plaintiff was a creditor within the meaning of said law only to the extent that plaintiff's claim against defendant was liquidated when the transfer of said stock of goods was made by defendant to said garnishee.

On a former hearing of the original case between plaintiff and defendant, this court held that the provision was unenforceable in said contract between plaintiff and defendant to the effect that, in case of default or breach of any of its terms, plaintiff might cancel the contract and recover ninety per cent. of all sums to become due thereon as liquidated damages. Electrical Products Corporation v. Ziegler Drug Stores, Inc., 141 Or. 117, 120, 125, 10 P.2d 910, 15 P.2d 1078.

Plaintiff relies strongly upon the case of Fischer v. Rio Tire Co. (Tex.Com.App.) 65 S.W.2d 751. In that case, the sale of the stock of merchandise was made on March 11, 1929. One Segall sold said stock to the defendant Rio Tire Company. The Spectralite, Inc., was plaintiff. Fischer and others were interveners. Plaintiff's amended pleadings alleged that its debt due by Segall was by virtue of a contract, in which Segall promised to pay the plaintiff certain rentals on an electric lighted sign and there was a balance due of $5,600, and that Segall agreed to pay three-fourths thereof amounting to $4,200; that in December, 1928, plaintiff filed a suit against Segall and recovered a final judgment against him in the sum of $4,700, together with interest and court costs.

The Texas court made an order that judgment should be entered in favor of plaintiff, Spectralite, Inc., for the sum of $4,700 with interest thereon at the rate of 6 per cent. per annum from November 1, 1928, and costs incurred. In that case, the trial court found that on March 11, 1929, and prior thereto, Segall was indebted to the Spectralite, Inc., in the sum of $4,700, with interest thereon at 6 per cent. per annum from and after November 1, 1928. There is no suggestion in the opinion that at the time of the transfer of the stock of goods by Segall to the Rio Tire Company, namely, on March 11, 1929, the claim of Spectralite, Inc., was unliquidated. In other words, the question confronting us in the case at bar was not discussed by the Texas court in the case mentioned.

Hartwig v. Rushing, 93 Or. 6, 182 P. 177, is also urged by plaintiff as an authority in conflict with the holding of the...