Hull v. Minkler
| Decision Date | 02 January 1958 |
| Docket Number | No. 34150,34150 |
| Citation | 319 P.2d 815,51 Wn.2d 508 |
| Parties | E. L. HULL, d/b/a Hull Flooring Company, Respondent, v. Victor MINKLER and Jane Doe Minkler, husband and wife, Glen Minkler and Jane Doe Minkler, husband and wife, Fred Rodgers and Jane Doe Rodgers, husband and wife, Appellants. |
| Court | Washington Supreme Court |
Fred M. Bond, South Bend, for appellants.
Frank J. Ruff, Tacoma, Russell Stark, Raymond, for respondent.
This is a garnishment action against the Minkler-Rodgers Motor Company, a partnership; the partners thereof, Victor Minkler and Fred Rodgers, individually and the marital community of each partner; and Glen Minkler, individually, and his marital community. The action is based on the primary liability of Glen Minkler.
On March 3, 1952, Victor Minkler and his wife entered into a conditional sale contract with Boyd C. Mabry for the transfer and sale of the personal property of the Minkler Motor Company, situate in Raymond, Washington, together with the good will and business of the company, for an agreed price of $46,600, allocated as follows:
Inventory of parts ...... $ 27,000.00
Shop equipment .......... 16,000.00
Parts equipment ......... 1,500.00
Furniture and Fixtures .. 2,100.00
The contract provided for a down payment, with balance to be paid in monthly installments of $300.
This conditional sale contract was never filed for record as required by RCW 63.12.010. Apparently, no affidavit of creditors (in compliance with the bulk sales law, RCW 63.08) was sought or demanded, and, consequently, none was filed.
Boyd C. Mabry took possession of the personal property and the premises formerly occupied by the Minkler Motor Company at Raymond and remained in possession until about June 22, 1953. In the meantime, Mabry incorporated his business under the trade name of Mabry Motors, Inc. At that time, the personal property which he was purchasing under the conditional sale contract was apparently listed as an asset as if owned by the corporation.
On June 22, 1953, Mabry Motors, Inc., entered into a conditional sale contract with Glen Minkler, the son of Victor Minkler. This contract conveyed the seller's interest in the personal property then on the premises occupied by Mabry Motors, Inc. The contract price was $10,000, $5,000 to be paid at the signing of the instrument, the balance to be paid at the rate of $100 per month, with interest. The contract also provided that Glen Minkler assumed and agreed to pay all of the seller's liabilities and obligations for which seller was responsible under the terms and in strict accordance with the provisions of the prior contract between Victor Minkler and his wife and Boyd C. Mabry, dated March 3, 1952.
The conditional sale contract of June 22, 1953, to Glen Minkler was never filed for record pursuant to RCW 63.12.010. No affidavit of creditors pursuant to the bulk sales law was apparently sought or demanded; consequently, one was never filed.
Thereafter, Glen Minkler took possession of the above-described chattels and premises and did business under the firm name of Minkler Motor Company. His business operations continued on the same premises from June, 1953, until some time during the fall or winter of 1955. During this time, he was in possession of the personal property referred to and described in the 1952 and 1953 conditional sale contracts.
In September, 1955, Glen Minkler commenced to borrow from Mr. E. L. Hull, the plaintiff, substantial sums of money for use in the business. Subsequent to the time he received the first loan from Hull, Glen Minkler transferred to his father, Victor Minkler, all of the assets and chattels of the business--without apparent consideration. Victor Minkler and Fred Rodgers thereafter established a partnership, known as the Minkler-Rodgers Motor Company, and took possession of the chattels on the same premises.
E. L. Hull obtained a judgment against Glen Minkler and his marital community in the amount of $11,795.36. He then commenced this garnishment action, based on the judgment.
In order to succeed in this garnishment action predicated on the bulk sales law, plaintiff Hull had to establish:
(1) That there was a debt owing to him from Glen Minkler. Mill & Logging Supply Company v. West Tenino Lumber Company, 1954, 44 Wash.2d 102, 265 P.2d 807; Rothchild Bros. v. Trewella, 1905, 36 Wash. 679, 79 P. 480, 68 L.R.A. 281;
(2) That he is a creditor within the meaning of the bulk sales law. Electrical Products Consolidated v. Smyser, 1943, 19 Wash.2d 509, 143 P.2d 452; Hardwick v. Gettier, 1906, 43 Wash. 644, 86 P. 943;
(3) That the transfer to the garnishee defendants was a bulk sale within the purview of the bulk sales law. Mill & Logging Supply Company v. West Tenino Lumber Company, supra; Minder v. Gurley, 1950, 37 Wash.2d 123, 222 P.2d 185;
(4) That the requirements of the bulk sales law with regard to an affidavit of creditors were not fulfilled. Spokane Merchants' Association v. Koska, 1922, 118 Wash. 445, 203 P. 969; Friedman v. Branner, 1913, 72 Wash. 338, 130 P. 360;
(5) That the value of the assets transferred exceeds the amount of his claim; or, in the event he is unable to show that the value of the assets exceeds his claim, then he must prove the value of the assets transferred. Minder v. Gurley, supra; Kohn v. Fishbach, 1904, 36 Wash. 69, 78 P. 199.
The trial court found that plaintiff established the foregoing elements. A decree was entered ordering that the judgment be satisfied from the assets and chattels obtained from Glen Minkler and presently in the possession of the Minkler-Rodgers Motor Company; or, if the motor company no longer possessed the chattels and assets referred to, that the judgment should be satisfied by the garnishee defendants. Appeal is brought by the Minkler-Rodgers Motor Company, Victor Minkler and his marital community, and Fred Rodgers and his marital community.
Appellants have assigned error to most of the findings of fact and conclusions of law made by the trial court. We will therefore, discuss briefly each of the elements necessary to sustain the trial court's action.
Respondent established the first element in this action--that there was a debt owing to him from Glen Minkler at the time he obtained judgment against Glen Minkler.
Appellants contend that the second clement was not established. They assert that respondent is not a creditor within the meaning of the bulk sales law. It is not disputed that Glen Minkler borrowed the money 'to carry on the business * * *' (RCW 63.08.020). The trial court found that the debt was incurred by Glen Minkler subsequent to the time he acquired the business and prior to the time he disposed of it, and the evidence does not preponderate against such finding of fact. The requirements of the statute, therefore, have been met by the respondent.
As to the third element, appellants vigorously contend that the transfer to them was not within the purview of the bulk sales law for two reasons: (1) Because Glen Minkler never owned the property and had no property to sell; and (2) because there was no sale.
Appellants claim that Glen Minkler never owned the property, because, by the terms of his contract with the Victor Minklers, Mabry was prohibited from transferring the property. Appellants assert that the conditional sale contract between the Victor Minklers and Mabry expressly prohibited any sale or assignment by Mabry. As the contract was worded, however, it prohibits only the removal of the business from the premises, and it is undisputed that the business remained on the same premises throughout all of the transfers.
Appellants further assert that Glen Minkler never owned the property, because the sales were conditional. Neither the Victor Minkler-Mabry conditional sale contract nor the Mabry Motors, Inc.,-Glen Minkler conditional sale contract was recorded pursuant to RCW 63.12.010. By the terms of that statute, unrecorded conditional sales become absolute as to bona fide creditors. Dahl v. Stromberg, 1948, 31 Wash.2d 884, 200 P.2d 495; Cook v. Washington-Oregon Corporation, 1915, 84 Wash. 68, 146 P. 156, 149 P. 325. Therefore, as to respondent, the sale to Glen Minkler was absolute, and Glen Minkler was the owner of the property.
At this point, it is necessary to recall that the trial judge found that there were two transfers of the personal property in question after Glen Minkler incurred the debt to respondent. The first transfer went from Glen Minkler to Victor Minkler, and the trial court found it to be without apparent consideration. The second transfer went from Victor Minkler to the Rodgers-Victor Minkler partnership. It is clear from Minder v. Gurley, supra, that the second transfer is within the purview of the bulk sales law.
The first of the two transfers presents a rather unique situation. Since the trial court found the transfer to be without apparent consideration, the meaning of the word, 'transfer,' as used in the bulk sales law, is squarely raised.
The statute defines 'bulk sale' as 'Any sale, exchange, or transfer, or attempted sale, exchange, or transfer * * *' RCW 63.08.010. The word, 'sale,' denotes a passing of property from one to another for a price or consideration. North Idaho Grain Company v. Callison, 1915, 83 Wash. 212, 145 P. 232. The word, 'exchange,' denotes a passing of property for other property. The word, 'transfer,' denotes any act by which property of one is vested in another, whether by sale, gift, or otherwise. Gazzam v. Young, 1921, 114 Wash. 66, 194 P. 810. Had the legislature intended to encompass only transfers for value, the words, 'sale' and 'exchange,' would...
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...the business of the partnership, if the other partners had no actual knowledge of the unlawful origin of the property. Hull v. Minkler, 51 Wash.2d 508, 319 P.2d 815, 820; First Nat. Bank of Portland v. Connolly, 172 Or. 434, 138 P.2d 613, rehearing denied 143 P.2d We have no doubt, as state......