Item Co., Ltd. v. National Dyers & Cleaners, Ltd.

• Decision Date: 17 November 1930
• Docket Number: 13,361
• Citation: 15 La.App. 108,130 So. 879
• Parties: ITEM CO., LTD., v. NATIONAL DYERS & CLEANERS, LTD., ET AL
• Court: Court of Appeal of Louisiana — District of US

130 So. 879

15 La.App. 108

ITEM CO., LTD., v. NATIONAL DYERS & CLEANERS, LTD., ET AL

No. 13,361

Court of Appeals of Louisiana, Orleans

November 17, 1930

Rehearing Refused December 1, 1930.

Writs of Certiorari and Review Refused by Supreme Court January 6 1931.

Appeal from Civil District Court, Parish of Orleans, Division "A". Hon. Hugh C. Cage, Judge.

Action by Item Company, Ltd., against National Dyers & Cleaners Ltd., et al.

There was judgment for defendants, and plaintiff appealed.

Judgment affirmed.

Deutsch & Kerrigan, of New Orleans, attorneys for plaintiff appellant.

F. A. Middleton, of New Orleans, attorney for defendants, appellees.

OPINION

JANVIER, J.

The Item Company, Ltd., seeks to recover for certain advertising matter published for National Dyers & Cleaners, Ltd., which concern was the sole defendant named in the original petition and which, in answer to that petition, filed a general denial.

Before the matter came up for trial, plaintiff, in a supplemental petition, alleged that while the case was pending on the trial docket on the issue as tendered by the original petition and answer, defendant had sold all or substantially all of its machinery, fixtures, automobiles, trucks and other property owned and used in its business to Augustus E. Massey; that Massey had sold all of the said property to National Cleaning & Dyeing Company, Inc., a new corporation; that neither plaintiff nor any other creditor was notified of either of said transfers; that for this and other reasons the said transfers were in violation of Act No. 270 of 1926 of Louisiana commonly known as the "Bulk Sales Act."

In the supplemental petition it is also alleged that the sale to Massey and the sale by Massey to National Cleaning & Dyeing Company, Inc., were not bona fide transactions, but were in fact simulations, and that therefore plaintiff should be allowed recovery directly from the National Cleaning & Dyeing Company, Inc., the new corporation, and, in the alternative, if the said transfers were in fact real sales, then judgment should be rendered against the said Massey because of the provisions of the Bulk Sales Law.

To this second petition both Massey and National Cleaning & Dyeing Company, Inc., filed exceptions of no cause of action, and the matter is now before us on appeal by the Item Company, plaintiff, from a judgment maintaining the said exceptions and dismissing the suit as to the defendants Massey and National Cleaning & Dyeing Company, Inc.

The contentions raised by the exceptions, though not specifically set forth therein, are as follows:

First, that the Bulk Sales Act (Act No. 270 of 1926) applies only to a merchandising business involving the buying and selling of goods, wares, and merchandise, and therefore has no application to such business as that conducted by the various defendants, that of dyeing and cleaning.

Second, that even in cases in which the act is applicable, it affords protection, not to all creditors, but only to those who have sold goods, wares, and merchandise.

In Esther R. Denekamp v. Mr. and Mrs. William F. Heisler and John D. Nix, Jr., 12 La.App. 471, 126 So. 447, 448, we were called upon to consider and pass upon the identical question presented by plaintiff's contention that the statute in question applies to all classes of business and is not limited to persons, firms, and corporations engaged in merchandising, and in that case we said:

"Section 1 of the act prohibits the transfer in bulk of a stock of merchandise otherwise than provided by the act and sets forth the kind of merchandise embraced within the terms of the act as 'the whole of a stock of merchandise, or merchandise and fixtures, or of all or of substantially all of the fixtures or equipment used or to be used in the display, manufacture, care or delivery of any goods, wares or merchandise including movable store and office fixtures, horses, wagons, automobile trucks and other vehicles or other goods or chattels of the business of the transferor shall be void as against the creditors of the transferor, unless made in conformity with the provisions of this Act.' The only possible basis for the application of the act relied on to the transaction set forth in the petition is the use of the words 'or other goods or chattels of the business of the transferor.' But these words plainly relate to the goods or chattels of the same kind referred to in the detailed description. Defendant's boarding house business cannot be considered as merchandising within the meaning of the act. Swift v. Tempelos, 178 N.C. 487, 101 S.E. 8. 7 A. L. R. 1581; Bowen v. Quigley, 165 Mich. 337, 130 N.W. 690, 34 L. R. A. (N. S.) 218; Toxaway Hotel Co. v. Smathers, 216 U.S. 439, 30 S.Ct. 263, 54 L.Ed. 558. "

In that case the Supreme Court granted a writ of certiorari and, after considering the case, remanded it on other grounds but did not discuss the question presented here.

Counsel for plaintiff call to our attention the fact that one of the cases cited in our opinion in the Denekamp case has no application to the particular question presented here, which is true, that case being cited as authority for another proposition, and counsel also suggests that the other two cases dealt with statutes by their terms restricted in their application to mercantile pursuits, and it is argued that those cases should not be considered as binding even by authority of reason because our statute is broader than those which the courts in those cases discussed.

It is true that in Swift & Co. v. Tempelos, 178 N.C. 487, 101 S.E. 8, 7 A. L. R. 1581, the statute under consideration referred solely to "the sale in bulk of a large part or the whole of a stock of merchandise." Likewise in Bowen v. Quigley, 165 Mich. 337, 130 N.W. 690, 34 L. R. A. (N. S.) 218, the statute which the court was called upon to interpret was, by its terms, limited to the sale of "* * * a stock of merchandise, or merchandise and the fixtures pertaining to the conducting of said business."

The Louisiana statute prohibits the sale out of the regular course of business of not only merchandise, but also fixtures and "other goods or chattels," and it is the inclusion in the prohibition of "other goods or chattels" which forms the basis of plaintiff's argument; it being conceded that if the inhibition were directed against the sale of merchandise and display fixtures only, it would be impossible to interpret the act as applying to any business other than that of selling merchandise.

However we do not feel that by...