Fairfield Shoe Company v. Olds
| Decision Date | 28 November 1911 |
| Docket Number | 21,998 |
| Citation | 96 N.E. 592,176 Ind. 526 |
| Parties | Fairfield Shoe Company et al. v. Olds, Assignee, et al |
| Court | Indiana Supreme Court |
From Huntington Circuit Court; Samuel E. Cook, Judge.
Suit by the Fairfield Shoe Company and others against Ebenezer C Olds, as assignee for the benefit of creditors of Harry J Smith. From a decree for defendant, plaintiff appeals.
Affirmed.
Cline Branyan & Cline, George M. Eberhart and W. C. Ryan, for appellants.
C. W. Watkins and Charles A. Butler, for appellee.
This proceeding was brought by appellants, creditors of Harry J. Smith, to prevent his assignee, Ebenezer C. Olds, from setting off to said Smith--who was when said assignment was made and when this proceeding was brought a resident householder of the State of Indiana--personal property of the value of $ 600, under the provisions of §§ 745, 3314 Burns 1908, §§ 703, 2670 R. S. 1881.
A trial of said proceeding resulted in a special finding, with conclusions of law, and judgment thereon against appellants. The only error assigned calls in question the conclusions of law.
The special findings necessary to the determination of this case are, substantially, as follows: For some time prior to October, 1910, Harry J. Smith and Joseph LeGross as copartners, conducted a store for the sale of boots, shoes and other merchandise in Roanoke, Huntington county, Indiana. They shared the profits equally. LeGross invested $ 300 in the business, and on or about October 1, 1910, he sold his interest in said business, consisting of fixtures and a stock of goods in bulk, to said Smith for $ 150 cash, which sum was paid by Smith to LeGross at the time said sale was made, and Smith took possession thereof. Some time before said sale, said Smith had invested about $ 1,800 in said business, but during the summer of 1910 the firm of Smith & LeGross owed considerable money to various creditors, including the creditors who brought this proceeding. Smith kept the books, did the corresponding, and knew the names of the creditors, but LeGross did not know them. A few days after said sale Smith notified all the creditors, or their attorneys, either personally or by mail, that he had purchased the interest of LeGross. This was the only notice given to said creditors, and he did not otherwise comply with the provisions of § 1 of the act of 1909 (Acts 1909 p. 122), known as the "bulk-sales" law. Said Smith is a bona fide resident householder of Huntington county, Indiana, and has others dependent upon him for a livelihood. On October 11, 1910, said Smith made a general assignment of his goods and effects, including the interest therein purchased from said LeGross, to E. C. Olds, for the benefit of his creditors, and claimed his exemption of $ 600. Said Olds thereafter converted said goods into money. At the time of the assignment said Smith was the actual owner of said effects so assigned, and there was no fraud either in said sale by LeGross to Smith, or in the assignment by Smith to said Olds.
The court stated as conclusions, that upon the facts found the law was with said Smith, that said transaction is not governed by the act of 1909, supra, that the sale was and is valid, that he is entitled to an exemption of $ 600 out of the funds realized from the sale by the assignee, and the assignee is directed to pay said amount to him.
Appellants claim that on account of the failure of LeGross and Smith to give notice to all their creditors of the sale by LeGross of his interest in the partnership property, as required by said act of 1909, the sale was void, and the purchaser--Smith--became a receiver of the partnership property for the benefit of the creditors, and that when Smith made an assignment for the benefit of creditors, the stock was still partnership property out of which neither partner was entitled to an exemption of $ 600. Love v. Blair (1880), 72 Ind. 281; Smith v. Harris (1881), 76 Ind. 104; State, ex rel., v. Emmons (1885), 99 Ind. 452.
Appellees insist that the act of 1909, supra, is in violation of the Constitution of this State (Wright v. Hart [1905], 182 N.Y. 330, 75 N.E. 404, 2 L. R. A. [N. S.] 338; Charles J. Off & Co. v. Morehead [1908], 235 Ill. 40, 85 N.E. 264, 20 L. R. A. [N. S.] 167, 126 Am. St. 184; Block v. Schwartz [1904], 27 Utah 387, 76 P. 22, 65 L. R. A. 308, 101 Am. St. 971); that even if it be held constitutional, it is in derogation of the common law, and is to be strictly construed; and that when so construed it does not apply to a sale by one partner to another of his interest in the partnership property.
The act of 1909, supra, is in derogation of the common law, and must be strictly construed. Cooney, Eckstein & Co. v. Sweat (1909), 133 Ga. 511, 512, 66 S.E. 257, 25 L. R. A. (N. S.) 758, and cases cited; Taylor v. Folds (1907), 2 Ga.App. 453, 58 S.E. 683; 9 Current Law 1511.
Said act provides that "the sale, transfer or assignment, in bulk, of any...
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