Mich. Packing Co. v. Messaris

• Decision Date: 02 March 1932
• Docket Number: No. 81.,81.
• Citation: 241 N.W. 236,257 Mich. 422
• Parties: MICHIGAN PACKING CO. v. MESSARIS et al.
• Court: Michigan Supreme Court

257 Mich. 422

241 N.W. 236

MICHIGAN PACKING CO.

v.MESSARIS et al.

No. 81.

Supreme Court of Michigan.

March 2, 1932.

Appeal from Wayne Circuit Court. Honorable William B. Brown, Circuit Judge.

Proceeding by the Michigan Packing Company against George Messaris and others. From the judgment, Samuel Sarasohn, doing business as the Grand River Finance Company, appeals.

Affirmed.

Agrued before the Entire Bench.Morris Garvett, of Detroit (Donald J. Mazer, of Detroit, of counsel), for appellant Samuel Sarasohn.

Paul Bairas, of Detroit, for appellee Michigan Packing Co.

NORTH, J.

Under stipulated facts this case presents a single question of law, to wit: As between the purchaser at an execution sale and the purchaser at a chattel mortgage sale covering restaurant equipment (chairs, tables, dishes, stoves, cooking utensils, etc.), which takes legal title, it being conceded that the indebtedness back of the execution, was for food supplies furnished the restaurateur (mortgagor), existed at the time the chattel mortgage was given, and exceeded in amount the value of the chattel mortgage property? Determination necessitates construction of the following statute: ‘Every mortgage or conveyance intended to operate as a mortgage of the whole or any part of a stock of merchandise or merchandise and fixtures, pertaining to the conducting of said business which shall hereafter be made without notice to the creditors of the mortgagor as herein provided, shall be void as against said creditors.’ Comp. Laws 1929, § 9548 (note amendment, Act No. 198, Pub. Acts 1931).

The statute contains provision for notice to the mortgagor's creditors. It is admitted that no notice was given, but appellant contends that the statute does not apply to the business of operating a restaurant.

The exact question has not heretofore been determined in this court. The statute is a recent enactment, but the terms of the Bulk Sales Law (Comp. Laws 1929, § 9545) are so strikingly similar that decisions thereunder and under like statutes of other states are pertinent. Some states having similar statutes have held they do not apply to sales of restaurant properties. Farmers' & Drovers' Nat. Bank v. Hannaman, 115 Kan. 370, 223 P. 478;Gallup v. Rhodes, 207 Mo. App. 692, 230 S. W. 664. In some states the statute does not include ‘fixtures,’ but covers merchandise only, and decisions seem to be controlled thereby. See Muskogee Wholesale Grocer Co. v. Durant, 49 Okl. 395, 153 P. 142, which points out that the Michigan statute covers ‘fixtures.’ In some other jurisdictions, where similar acts are held not to cover restaurant fixtures, the legislation is said to be in derogation of common law (Swift & Co. v. Tempelos, 178 N. C. 487, 101 S. E. 8, 7 A. L. R. 1581), referred to as a ‘drastic measure’ (Johnson v. Kelley, 32 N. D. 116, 155 N. W. 683), and given strict construction. However, by decisions under the Bulk Sales Law, the courts of this state are committed to a more liberal construction of the legislation with the obvious purpose of rendering it effective in all classes of cases to which it was intended to apply. Its provisions were evidently enacted to protect business from perpetration of frauds. For the accomplishment of that purpose, we have given the act liberal construction. In Watkins v. Angus, 241 Mich. 690, 217 N. W. 894, 895, Justice Wiest, speaking for the court, said: ‘We consider the law remedial and to be given such construction as will effectuate its clear purpose.’ See, also, Patmos v. Grand Rapids Dairy Co., 243 Mich. 417, 220 N. W. 724.

In the case last cited Justice Potter quoted with approval from Plass v. Morgan, 36 Wash. 160, 78 P. 784, wherein it was held under the statute then in force in the state of Washington that restaurant business was within legislation of this class. In a later decision the Washington Supreme Court, referring to the Plass Case, said: ‘It is true that a restaurant keeper,...