Godwin v. Tuttle

• Decision Date: 26 May 1914
• Citation: 141 P. 1120,70 Or. 424
• Parties: GODWIN v. TUTTLE.
• Court: Oregon Supreme Court

141 P. 1120

70 Or. 424

GODWIN v. TUTTLE.

Supreme Court of Oregon

May 26, 1914

In Banc.

Appeal from Circuit Court, Baker County; Gustav Anderson, Judge.

Action by C. T. Godwin, as trustee in bankruptcy of the estate of the Co-Operative Trading Company, against J. O. Tuttle. From a judgment for defendant, plaintiff appeals. Reversed and remanded for further proceedings.

After stating in substance that the Co-Operative Trading Company, a corporation, was duly adjudged a bankrupt in June, 1913, and that the plaintiff at all times mentioned in the pleadings was and now is the duly elected, qualified, and acting trustee in bankruptcy of its estate, the complaint sets out a cause of action in replevin in favor of the plaintiff for what is described as:

"All that certain stock of goods, wares, and merchandise located at New Bridge, in Baker county, Or., in that certain store building run and operated by the said defendant, and which said stock of goods, wares, and merchandise was acquired from the Co-Operative Trading Company, a corporation, on or about December 31, 1912, and which said defendant has in his possession at said place."

A demand upon the defendant for possession of the property, his refusal, and unlawful and wrongful detention of the same, to the damage of the plaintiff in the sum of $300, are alleged. The value of the property is stated to be $4,000. The answer admits the corporate character of the corporation, its insolvency, the adjudication in bankruptcy, and the trusteeship of the plaintiff. The ownership and right of possession in the plaintiff are denied, as well as the demand and damage. The value of the property is admitted to be $4,000. Further answering, the defendant states a cause of action in replevin in his own favor against the plaintiff based upon the fact that the latter had taken possession by virtue of the writ issued in the action. The defendant demands judgment against the plaintiff in the usual form together with $1,000 damages. Excepting that it admits the value of the property to be $4,000, the reply denies all the allegations of the new matter in the answer. In substance that pleading further states that the only pretense of title the defendant has is by virtue of the fact that he became possessed of the goods under an attempted sale in bulk by the corporation to himself, without taking from the seller a list of his creditors, or giving notice to the creditors, and that at the time the corporation was indebted to various and sundry persons named in the answer far beyond the value of its estate. From a judgment on a general verdict directed for the defendant, the plaintiff appeals.

O. B Mount, of Baker (C. T. Godwin, of Baker, on the brief), for appellant. M. D. Clifford, of Baker (Clifford & Correll, of Baker, on the brief), for respondent.

BURNETT, J. (after stating the facts as above).

The controlling question in this case is whether or not the court erred in refusing to allow the plaintiff to prove in his case in chief the allegations of his reply respecting the bulk sale of the property to the defendant by the corporation, and in directing a verdict for the defendant. The statute affecting such transfers, as it stood at the time of the transaction, is found in sections 6069, 6070, L. O. L.:

"It shall be the duty of every person who shall bargain for or purchase any stock of goods, wares, or merchandise in bulk, for cash or on credit, to demand and receive from the vendor thereof, and if the vendor be a corporation then from a managing officer or agent thereof, at least five days before the consummation of such bargain or purchase, and at least five days before paying or delivering to the vendor any part of the purchase price or consideration therefor, or any promissory note or other evidence of indebtedness therefor, a written statement under oath containing the names and addresses of all of the creditors of said vendor, together with the amount of indebtedness due or owing, or to become due or owing, by said vendor to each of such creditors, and if there be no such creditors, a written statement under oath to that effect; and it shall be the duty of such vendor to furnish such statement at least five days before any sale or transfer by him of

any stock of goods, wares, or merchandise in bulk." Section 6069, L. O. L.

"After having received from the vendor the written statement under oath mentioned in section 6069 the vendee shall, at least five days before the consummation of such bargain or purchase, and at least five days before paying or delivering to the vendor any part of the purchase price or consideration therefor, or any promissory note or other evidence of indebtedness for the same, in good faith notify or cause to be notified, personally or by wire or by registered letter, each of the creditors of the vendor named in said statement, of the proposed purchase by him of such stock of goods, wares, or merchandise; and whenever any person shall purchase any stock of goods, wares, or merchandise in bulk, or shall pay the purchase price or any part thereof, or execute or deliver to the vendor thereof or to his order, or to any person for his use, any promissory note or other evidence of indebtedness for said stock, or any part thereof, without having first demanded and received from his vendor the statement under oath as provided in section 6069, and without having also notified or caused to be notified all of the creditors of the vendor named in such statement, as in this section prescribed, such purchase, sale, or transfer shall, as to any and all creditors of the vendor, be conclusively presumed fraudulent and void." Section 6070, L. O. L.

Section 70 of the National Bankrupt Law provides:

"The trustee of the estate of a bankrupt, upon his appointment and qualification, * * * shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, * * *" to "property transferred by him in fraud of his creditors;" and "property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him. * * * The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value. For the purpose of such recovery any court of bankruptcy, as hereinbefore defined, and any state court which would have had jurisdiction if bankruptcy had not intervened, shall have

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