McKnight-Keaton Grocery Co. v. McFadden

• Decision Date: 16 June 1937
• Docket Number: No. 5826.,5826.
• Citation: 107 S.W.2d 176
• Parties: McKNIGHT-KEATON GROCERY CO. v. McFADDEN et al.
• Court: Missouri Court of Appeals

107 S.W.2d 176

McKNIGHT-KEATON GROCERY CO. v. McFADDEN et al.

No. 5826.

Springfield Court of Appeals. Missouri.

June 16, 1937.

Rehearing Denied July 8, 1937.

Appeal from Circuit Court, Pemiscot County; James M. Reeves, Judge.

"Not to be published in State Reports."

Action by McKnight-Keaton Grocery Company, a corporation, against L. S. McFadden and G. D. Miles, defendants, wherein W. M. Wallace, doing business as South Side Market, was garnisheed. Judgment for the plaintiff, and the garnishee appeals.

Affirmed.

Bradley & Noble, of Kennett, for appellant.

Blanton & Montgomery, of Sikeston, for respondent.

ALLEN, Presiding Judge.

This is an action in garnishment, under a general execution by a judgment creditor, against one who purchased in bulk, a retail grocery store from a judgment debtor. The garnishment action is based upon the failure of the parties (judgment debtor and garnishee) to comply with the Bulk Sales Law (Mo.St.Ann. § 3127 et seq., p. 1967 et seq.), in the sale of the store.

The cause was tried in the circuit court of Pemiscot county, before the court, a jury having been waived, on an agreed statement of facts, resulting in a verdict and judgment for the plaintiff, and upon the overruling of garnishee's motion for a new trial, garnishee, W. M. Wallace, doing business as South Side Market, has appealed to this court.

The agreed statement of facts is as follows:

"That on the 4th day of November, 1935 W. M. Wallace, Garnishee, bought and took over from the above named defendant, G. D. Miles, the retail grocery store in Kennett, Missouri, theretofore owned and operated by the said G. D. Miles, and known as the South Side Market; that the stock of merchandise that Miles had on hand on that date invoiced at, and was of the reasonable value of Two Thousand Four Hundred Thirty Six Dollars and Forty Eight Cents ($2436.48), and that the store fixtures invoiced at, and were of the reasonable value of Two Thousand Nine Hundred Ten Dollars ($2910.00), making a total value and sum of Five Thousand Three Hundred Forty Six Dollars and Forty Eight Cents ($5346.48), which was the amount of the purchase price that Garnishee Wallace paid to said G. D. Miles for said merchandise and fixtures; that Garnishee Wallace assumed as a part of said purchase price, the bills payable of said vendor G. D. Miles, in the amount of Three Thousand One Hundred Nine Dollars and Nine Cents ($3109.09) which bills payable were owed by the said Miles to creditors who had furnished goods and merchandise to him for resale, and which amount was assumed and paid by the said Wallace as a part of said purchase price; that the balance of said purchase price was paid by the said Wallace prior to notice of garnishment; that garnishee took full possession of all of said merchandise and fixtures on said 4th day of November, 1935, and has since that date operated said South Side Market as a retail grocery store, and that said garnishee has appropriated all of said merchandise and fixtures to his own use and purpose.

"It is further agreed that neither the said G. D. Miles nor the garnishee, Wallace, ever at any time nor in any manner complied with any of the provisions of article 6 of chapter 22 of the Revised Statutes of Missouri 1929 (section 3127 et seq. [Mo.St.Ann. § 3127 et seq., p. 1967 et seq.]), generally known as the Bulk Sales Law.

"It is further agreed that on and prior to November 4, 1935, defendant, G. D. Miles was and still is indebted to the plaintiff herein, in the sum of One Thousand ($1,000.00) Dollars, which indebtedness was reduced to judgment in the Circuit Court of Pemiscot County, Missouri, on December 19th, 1934, and is now shown of record in Book No. _____ at Page _____ of the records of said court, and that said judgment was founded upon a promissory note executed by the said G. D. Miles, as surety for his co-defendant, L. S. McFadden as principal, which said note was given to the plaintiff, McKnight-Keaton Grocery Company, for value, to secure an account for merchandise furnished by the said McKnight-Keaton Grocery Company to the said L. S. McFadden; that the said L. S. McFadden operated at the time of the execution of said note a wholesale grocery company at Kennett, Missouri, which, at no time, was connected with the South Side Market.

"It is further agreed that execution was issued on the aforesaid judgment and that the garnishee was served with notice of garnishment thereunder on Monday, February 3, 1936."

Appellant urges but one assignment of error, as follows: "The court erred in refusing to give garnishee's Declaration of Law 2D, in the nature of a demurrer."

There are two matters for consideration by us: First, does the Bulk Sales Law of the state of Missouri, sections 3127 to 3131 R.S.Mo.1929 (Mo.St.Ann. §§ 3127-3131, pp. 1967-1972), apply to the plaintiff herein, and is he, not being a creditor for merchandise, entitled to protection against that law? Second, has the limitation period provided in the statute been properly presented, and had the limitation expired before the plaintiff commenced this action?

The defendant contends that the purpose of the Bulk Sales Statute is to protect only creditors who sell merchandise to merchants for resale, and earnestly contends that the statute does not protect general creditors to whom the merchant is indebted.

The weight of authority is to the effect that the Bulk Sales Statutes protect all persons who are creditors of a seller, at the time of a sale, even though they were not creditors for merchandise, but were merely general creditors of the seller in other transactions. Phillips v. Verbeke, 117 Wash. 173, 200 P. 1091; Gardner v. Goodner Wholesale Grocery Co. (Tex. Civ.App.) 247 S.W. 291; Eklund v. Hopkins, 36 Wash. 179, 78 P. 787; George H. West Shoe Co. v. Lemish, 279 Pa. 414, 124 A. 87; Burnett v. Trimmell, 103 Kan. 130, 173 P. 6, L.R.A.1918E, 1058; Fidelity & Deposit Co. of Maryland v. Thomas, 133 Md. 270, loc. cit. 273, 105 A. 174; Johnston Bros. Co. v. Washburn, 16 Ala.App. 311, 77 So. 461; Prins v. American Trust Co., 169 Ark. 455, 275 S.W. 914; Anderson v. Merchants' & Miners' State Bank, 161 Ga. 12, 129 S.E. 650; ...