Miller v. Crawford

• Decision Date: 07 June 1904
• Citation: 71 N.E. 631,70 Ohio St. 207
• Parties: Miller Et Al. v. Crawford Et Al.
• Court: Ohio Supreme Court

71 N.E. 631

70 Ohio St. 207

Miller Et Al. v. Crawford Et Al.

Supreme Court of Ohio

June 7, 1904

Prevention of fraud in purchase and sale of merchandise - Discrimination among creditors - Invalidity of act of April 4, 1902 - Constitutional law.

The act of April 4, 1902, entitled, "An act to prevent fraud in the purchase, disposition or sale of merchandise" (95 O L., 96), is repugnant to the first article of the constitution because it places an unwarrantable restriction upon the right of the individual to acquire and possess property, and because it contains a forbidden discrimination in favor of a limited class of creditors.

ERROR to the Circuit Court of Stark county.

Plaintiffs in error filed their petition in the court of common pleas alleging that Tilton had sold and Crawford purchased, in bulk, a stock of merchandise, without conforming to the requirements of the act of April 4, 1902, entitled, "An act to prevent fraud in the purchase, disposition or sale of merchandise." (95 O. L., 96.)

By the plaintiffs in error it is admitted that the petition did not state a cause of action independently of the provisions of that act. By the defendants in error it is admitted that a cause of action was stated if that act is valid. The act provides as follows:

"Section 1. A sale, or other disposition of an entire stock of merchandise in bulk, or any portion of a stock of merchandise, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the seller's business, shall be fraudulent and void as against the creditors of the seller unless the seller at least six days before such a sale, or other disposition shall:

"First. Deliver to the purchaser a full and correct statement of the names and places of residence, or places of business of each of his creditors.

"Second. The amount due each.

"Third. Also deliver to the purchaser true and correct books, or original invoices from which the cost price of the merchandise sold can be ascertained.

"Fourth. And also unless the seller and the purchaser together, at least six days before the sale, or other disposition make a full detailed inventory, showing the quantity and the cost price to the seller of each article to be included in the sale, or other disposition.

"Fifth. And unless such list of creditors, books, invoices and inventory be retained by the purchaser for at least six months after the sale, or other disposition, and be exhibited on demand to each creditor of said seller.

"Sixth. And unless the purchaser shall at least five days before the sale, or other disposition, in good faith, give notice of such proposed sale, or other disposition and said cost price of the merchandise proposed to be sold, or otherwise disposed of, and the price to be paid therefor by the purchaser to each of the seller's creditors of whom the purchaser obtains the knowledge by the list aforesaid, or can, by the exercise of reasonable diligence gain knowledge--such notice to be given either personally or by registered letter properly stamped, directed and mailed."

Section 2 prescribes penalties against the seller for non-compliance with the provisions of the first section. Section 3 prescribes like penalties against the purchaser for such non-compliance.

In the court of common pleas a general demurrer to the petition was sustained, and a final judgment was rendered for the defendants. That judgment was affirmed in the circuit court.

Messrs. Clark & Clark; Messrs. Shields & Pomerene and Messrs. White, Johnson, McCaslin & Cannon, for plaintiff in error, cited and commented upon the following authorities:

Louisiana, 1896, Acts, No. 94, p. 137; Minnesota, 1899, Gen. Laws, c. 291, p. 357; Oregon, 1899, B. & C. Ann. Codes & Statutes, c. VII.; Maryland, 1900, Laws, c. 579, p. 907; Indiana, 1901, Acts, c. 220, p. 505; 1903, Amended Acts, c. 153, p. 276; Washington, 1901, Laws, c. 1909, p. 222; Wisconsin, 1901, Laws, c. 463, p. 684; Tennessee, 1901, Acts, c. 133, p. 234; Utah, 1901, Laws, c. 67, p. 67; New York, 1902, Session Laws, vol. ii. c. 528, p. 1249; Massachusetts, 1903, Acts, c. 415, p. 389; California, 1903, Stat. & Amend. to Codes, c. 100; Colorado, 1903, Session Laws, c. 110, p. 225; Connecticut, 1903, Pub. Acts, c. 72, p. 49; Delaware, 1903, Laws, c. 387, p. 748; Georgia, 1903, Laws, c. 457, p. 92; Virginia, 1903, Acts, c. 304, p. 518; Idaho, 1903, Session Laws, H. B. 18, p. 11; Oklahoma, 1903, Session Laws, c. 30, p. 249; McDaniels v. Shoe Co., 30 Wash. 549; Matter of Farrell, 9 Am. Bank. Rep., 341; In re Davis & Co., 10 Am. Bank. Rep., 189; State v. Artus, 34 So. Rep. (La.), 596; Hart v. Raney, 93 Md. 432; Fisher v. Herrmann, 95 N.W. (Wis.), 392; Neas v. Borches, 109 Tenn. 398; Senior v. Ratterman, 44 Ohio St. 677; Probasco v. Raine, Auditor, 50 Ohio St. 378; State ex rel. v. McCann, 21 Ohio St. 198; Cooley Const. Lim. (7 ed.), 184; Id., 236; Powell v. Pennsylvania, 127 U.S. 678; State v. Hogan, 63 Ohio St., 202; Pacific Expo. Co. v. Seibert, 142 U.S. 339; Soo Hing v. Crowley, 113 U.S. 703; Barbier v. Connolly, 113 U.S. 27; Railway Co. v. Mackay, 127 U.S. 205; McAunick v. Railroad Co., 20 Ia. 338; State v. Loomis, 115 Mo. 307; Railway Co. v. Ellis, 165 U.S. 150; Orient Ins. Co. v. Daggs, 172 U.S. 557; Nicol v. Ames, 173 U.S. 509; Am. Sugar Ref. Co. v. Louisiana, 179 U.S. 89; Railroad Co. v. Matthews, 174 U.S. 96; State v. Broadbelt, 89 Md. 565; art 1, sec. 20, Const. Ore.; In re Oberg, 21 Ore., 406; Clark's Est., 195 Pa. St., 520; State v. Wagner, 77 Minn. 483; Va. Devel. Co. v. Crozer I. Co., 90 Va. 126; Gano v. Railway Co., 114 Ia. 713; Demoville v. Davidson Co., 87 Tenn. 214; Anderson v. Brewster, 44 Ohio St. 584; Thorpe v. Railroad Co., 27 Vt. 140; Railroad Co. v. Sullivan, 32 Ohio St. 158; Marmet v. State, 45 Ohio St. 70; 1 Tiedeman Police Pow., 263; Dent v. West Virginia, 129 U.S. 114; Yick Wo v. Hopkins, 118 U.S. 356; Frisbie v. United States, 157 U.S. 160; Lowell v. Boston, 111 Mass. 454; Commonwealth v. Intox. Liquors, 115 Mass. 153; Commonwealth v. Bearse, 132 Mass. 542; People v. West, 106 N.Y. 293; Wynhamer v. People, 20 Barb., 567; Mangan v. State, 76 Ala. 60; Harbison v. Knoxville Iron Co., 103 Tenn. 421; Knoxville Iron Co. v. Harbison, 183 U.S. 13; Beer Co. v. Massachusetts, 97 U.S. 25; Holden v. Hardy, 169 U.S. 366; Munn v. Illinois, 94 U.S. 113; Bertholf v. O'Reilly, 74 N.Y. 509; 4 Black. Com., 162; Miller v. State, 3 Ohio St. 475; National Ins. Co. v. Brobst, 56 Ohio St. 728; Life Ins. Co. v. Warren, 59 Ohio St. 45; Insurance Co. v. Leslie, 47 Ohio St. 409; State v. Gardner, 58 Ohio St. 599; Sanders v. Keber, 28 Ohio St. 630; Weil v. State, 46 Ohio St. 450; 1 Tiedeman Police Pow., 260; Freeman's note, 25 Am. St. Rep., 887; Patterson v. Kentucky, 97 U.S. 506; Turner v. Maryland, 107 U.S. 38; Gibbons v. Ogden, 9 Wheat., 119, note; Emert v. Missouri, 156 U.S. 296; Railroad Co. v. Patterson Tobacco Co., 169 U.S. 311; Plumley v. Massachusetts, 155 U.S. 461; Capital City Dairy Co. v. Ohio, 183 U.S. 238; Crowley v. Christensen, 137 U.S. 86; Gundling v. Chicago, 177 U.S. 183; State ex rel. v. Capital City Dairy Co., 62 Ohio St. 350; State v. Moore, 104 N. C., 714; Truss v. State, 13 Lea (Tenn.), 311; Leep v. Railway Co., 58 Ark. 407; Brechbill v. Randall, 102 Ind. 528; Hawthorne v. People, 109 Ill. 302; Opinion of the Justices, 163 Mass. 589; Eaton v. Kegan, 114 Mass. 433; People v. Wagner, 86 Mich. 594; State v. Wagener, 77 Minn. 483; Commonwealth v. Vrooman, 164 Pa. St., 306; State ex rel. v. Ackerman, 51 Ohio St. 163; Dugger v. Insurance Co., 95 Tenn. 245; People v. Cannon, 139 N.Y. 32; Ex parte Byrd, 84 Ala. 17; New Orleans v. Stafford, 27 La. An., 417; Slaughter House Cases, 16 Wall., 36; Cincinnati v. Steinkamp, 54 Ohio St. 284; Salem v. Maynes, 123 Mass. 372; State v. Johnson, 114 N. C., 846; Considine v. Insurance Co., 165 Mass. 462; Attorney General v. Williams, 174 Mass. 476; People v. Arensberg, 105 N.Y. 123; People v. Hawkins, 157 N.Y. 1; Powell v. Commonwealth, 114 Pa. St., 265; State v. Addington, 12 Mo. App., 214; s. c. 77 Mo. 110; McAllister v. State, 72 Md. 390; Pierce v. State, 63 Md. 592; Waterbury v. Newton, 50 N. J. Law, 534; State v. Marshall, 64 N. H., 549; Butler v. Chambers, 36 Minn. 69; Weideman v. State, 56 N.W. 688; Commonwealth v. Seiler, 20 Pa. Sup. Ct., 260; Weller v. State, 53 Ohio St. 77; People v. Girard, 145 N.Y. 105; People v. Cipperly, 37 Hun, 319; aff., 101 N.Y. 634; Commonwealth v. Waite, 93 Mass. 264; Commonwealth v. Farren, 91 Mass. 489; Health Dept. v. The Rector, 145 N.Y. 32; Titusville v. Brennan, 143 Pa. St., 642; Levy v. State, 68 N. E., 172; Railway Co. v. Solan, 169 U.S. 133; Railroad Co. v. Haber, 169 U.S. 613; Railroad Co. v. McCann, 174 U.S. 580; Railroad Co. v. Fuller, 17 Wall., 560; Cobble v. Farmers' Bank, 63 Ohio St. 528; State v. Dreher, 55 Ohio St. 115.

Mr. James A. Rice, for Walter J. Crawford, one of the defendants in error, cited and commented upon the following authorities:

McDaniels v. Connelly Shoe Co., 71 P. (Wash.), 37; Prentice on Police Powers, 10; Henderson v. Mayor, 92 U.S. 259; Chy Lung v Freeman, 92 U.S. 275; People v. Comp., Gen., Transatlantique, 107 U.S. 59; 2 Kent, 338; 22 Am. & Eng. Ency. Law (2 ed.), 938; People v. Arensberg, 103 N.Y. 399; Forster v. Scott, 136 N.Y. 577; 1 Tiedeman, 8; Id., 13; Lawton v. Steele, 152 U.S. 133; Mugler v. Kansas, 123 U.S. 623; Scott v. Donald, 165 U.S. 91; Smyth v. Ames, 169 U.S. 527; Henderson v. New York, 92 U.S. 259; Railroad Co. v. Husen, 95 U.S. 465; N. O. Gas Light Co. v. Light & Heat, etc., Co., 115 U.S. 650; Walling v. Michigan, 116 U.S. 446; State v. Railway Co., 68 Minn. 381; Wis. Keeley Inst. Co. v. Milwaukee Co., 95 Wis. 153; Ex parte Jentzsch, 112 Cal. 468; 1 Tiedeman, 521; Cooley Const. Lim. (6th ed.), 704; Austin v. Murray, 16...