Glantz v. Gardiner

Decision Date06 June 1917
Docket NumberNo. 5047.,5047.
PartiesGLANTZ v. GARDINER, Deputy Sheriff.
CourtRhode Island Supreme Court

Case Certified from Superior Court, Providence and Bristol Counties, under Gen. Daws 1909, c. 298, § 4.

Action by Max Glantz against Samuel E. Gardiner, Deputy Sheriff. Certified from the superior court on an agreed statement of facts. Decision for plaintiff.

Archambault & Archambault, of Providence, for plaintiff. Sullivan & Sullivan, of Providence, for defendant.

BAKER, J. This is an action of replevin, brought by the plaintiff in the superior court for Providence county to recover possession of certain goods attached by the defendant as a deputy sheriff of said county. To this the defendant pleads non cepit, and for a second plea "that the said goods and chattels in said declaration mentioned were then and there and now are the property of one Frank S. Lockhart alias, and as the property of said Frank S. Lockhart alias were attached and held in custody by the said defendant under and by virtue of a writ of attachment issued out of the superior court" in said county "at the suit of Alphonso Brickett against said Frank S. Lockhart alias." The parties thereafter filed in the office of the clerk of said superior court for said county an agreed statement of facts, whereupon the cause was certified to this court for hearing and determination in accordance with the provisions of section 4 of chapter 298 of the General Laws of 1909.

The agreed statement of facts shows that on the 19th day of December, 1916, the plaintiff, Max Glantz, paid to said Frank S. Lockhart the sum of $100 and received from Lockhart the following written instrument:

"Received of M. Glantz one hundred ($100.00) dollars, deposit on sale of all household furniture contained in stores Nos. 605-613 Westminster street; also in storehouse in rear; also Columbia truck. Balance due, thirty-nine hundred dollars ($3,900.00), to be paid in full December 22, 1916.

"[Signed] Frank S. Lockhart.

"In presence of William A. Reiner."

Thereafter, on the same day, said plaintiff consulted Alberic A. Archambault, Esq., an attorney at law and as a result of his advice the following memorandum was on the 20th day of December, 1916, written on the foregoing instrument, to wit:

"Time on this agreement extended to December 27, 1916, by mutual agreement.

"[Signed] F. S. Lockhart.

"Max Glantz."

On the said 20th day of December, 1916, the plaintiff demanded from the said Lockhart a written list of the names and addresses of his creditors, and on the same day received from him a written list, giving names, addresses, and amounts, signed and sworn to by said Lockhart as "a true, full, accurate, and complete list" of his creditors "and the amounts due each of them," "to the best of his knowledge and belief." The list included six names and addresses, and amounts of indebtedness aggregating $796.21, and in addition the following: "City of Providence, taxes, amount not known." On said December 20th the plaintiff sent by registered mail a letter to each of said creditors named in said list, giving notice that said Frank S. Lockhart had entered into an agreement with said Max Glantz for the sale of all his stock of furniture and house furnishings, that the transfer of title would take place on December 27, 1916, at 9 o'clock a. m., and requesting the addressee to present his claim against said Lockhart to him, said Glantz, before December 27, 1916. On December 21, 1916, the plaintiff inserted in the Evening Bulletin of that day the following notice:

"Legal Notice.

"Frank S. Lockhart, doing business at 605-613 Westminster street, Providence, R. L, will transfer his entire stock of furniture to Max Glantz, Wednesday, December 27, 1916, at 9:00 a. m."

Prior to December 27, 1916, accounts and claims against said Frank S. Lockhart were filed with Max Glantz and his attorneys, amounting to $2, 186.48, all of which were paid by Glantz on said 27th day of December before the transfer of the title to him of said furniture and house furnishings, and which were all the claims against said Lockhart of which said Glantz and his attorneys had knowledge at the time of the transfer. In addition to the $100 deposit receipted for on December 19, Glantz paid Lockhart $1,000 on December 22d, and on said December 27th, $713.52 making in all $1,813.52 so paid, which, together with the $2, 186.48 paid to Lockhart's creditors, made up the total purchase price of $4,000. Said Alphonso Brickett was a creditor of said Lockhart prior to and at the time of said transfer, but his claim was not included in the list delivered by Lockhart, and was not filed with said Glantz or his attorneys prior to said transfer, and neither of them had any knowledge of such claim until several days after December 27th.

Chapter 387 of the Public Laws was passed April 14, 1909, and is entitled "An act to prohibit sales of merchandise in bulk in fraud of creditors." Section 1 thereof is as follows:

"The transfer of the major part in value of the whole of a stock of merchandise and fixtures, or merchandise or fixtures, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the transferor's business, whether in one or more parcels or to one or more persons, provided the transfer is all part of substantially one transaction or proceeding or occurs substantially at one time, shall be fraudulent and void as against all persons who are creditors of the transferor at the time of such transfer unless the transferee demands and receives from the transferor a written list of the names and addresses of the creditors of the transferor and certified by him, under oath, to be, to the best of his knowledge and belief, a full, accurate, and complete list of his creditors; and unless the transferee shall, at least five days before such transfer, notify personally, or by registered mail, every creditor whose name and address are stated in said list of the proposed transfer."

The precise question presented by the agreed statement and as argued by the counsel of both parties in their briefs is whether the transfer of said goods and chattels by said Lockhart to the plaintiff on December 27, 1916, was under the provisions of section 1 of said chapter 387 of the Public Laws fraudulent and void as to said Alphonso Brickett.

Within the last 20 years nearly all, if not all, of the states have enacted statutes regulating the sale of merchandise in bulk. This widespread legislation at least implies a general belief in the existence of a widespread evil requiring legislative control. While these statutes are similar in general purpose, they differ in phraseology, both in their requirements of the parties to such sales and particularly in the language which declares the effect of noncompliance with the provisions of these acts. "That evil is the tendency and practice of merchants who are heavily in debt to make secret sales of their merchandise in bulk for the purpose of defrauding creditors." Wright v. Hart, 182 N. Y. 330, 346, 75 N. E. 404, 410, 2 L R. A. (N. S.) 232, 108 Am. St. Rep. 820. A convenient classification of these laws into five groups, based upon the different requirements imposed upon the parties to such sale, may be found in Kidd-Dater Co. v. Musselman Grocer Co., 217 U. S. 461, 467-469, 30 Sup. Ct. 606, 54 L. Ed. 839. These requirements vary from the simple one by which a prospective vendor is compelled to have recorded from five to ten days previous to the actual sale in the town clerk's office of the town in which he conducts his business a notice of his intention to make such sale, describing the property to be sold, the condition of such sale, and the parties thereto, to the more onerous ones of the preparing by the vendor and vendee together of an inventory of the property and its cost, and of requiring the vendee to demand and receive sworn lists of the vendor's creditors, with their addresses and the respective amounts due them, and to notify these creditors of his intended purchase, and in a few instances to see that the purchase price is applied, so far as necessary, to the payment of the vendor's creditors.

As to the effect of a failure to comply with the requirements of these statutes, they fall into two classes: First, those acts in which the sale is declared fraudulent and void; second, those acts in which the sale is declared presumptively fraudulent and void. It is reasonable to infer that these different acts vary much as effective instrumentalities in checking actual fraud. The courts differ in their construction of the acts in the second class, some holding that they simply prescribe a rule of evidence, throwing the burden of showing good faith on the purchaser with the right to introduce any evidence pertinent to this question as in Thorpe v Pennock Mercantile Co., 99 Minn. 22, 108 N. W. 910, 9 Ann. Cas. 229, and Fisher v. Herrmann, 118 Wis. 428, 95 N. W. 392, while others restrict the evidence to the showing of a compliance with the requirements of the statute. Moore Dry Goods Co. v. Rowe &...

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