Nash Hardware Co. v. Morris

Decision Date08 May 1912
Citation146 S.W. 874
PartiesNASH HARDWARE CO. v. MORRIS.
CourtTexas Supreme Court

Garnishment by the Nash Hardware Company, a judgment creditor of W. A. Williams & Co., a copartnership, against Guy E. Morris, as garnishee. From a judgment for the garnishee, plaintiff appealed to the Court of Civil Appeals, and it certified a question. Question answered.

Geo. Q. McGown, F. B. Stanley, T. A. Altman, and D. M. Alexander, all of Ft. Worth, for appellant. Douthit & Smith, of Sweetwater, and Lee & Lomax and W. D. Smith, both of Ft. Worth, for appellee.

BROWN, C. J.

Certified question from the Court of Civil Appeals of the Second District. The statement and question are as follows:

"The above cause is now pending before us on appeal from the county court of Tarrant county for civil cases. On March 7, 1911, Nash Hardware Company secured a judgment in the sum of $395.84 against W. A. Williams & Co., a copartnership composed of W. A. Williams and F. S. Williams. Thereafter, on April 5, 1911, Nash Hardware Company sued out a writ of garnishment, based upon such judgment, and had the same served on Guy E. Morris, as garnishee. To this writ, Morris answered that he was not indebted, and had no effects in his hands belonging, to said W. A. Williams & Co., or the individual members thereof. The Nash Hardware Company filed a controverting affidavit, in which it was alleged that, prior to the service of said writ of garnishment, and subsequent to the rendition of the original judgment in its favor against Williams & Co., the garnishee, Morris, had purchased the entire stock of goods, wares, and merchandise of the firm of W. A. Williams & Co. in bulk, and that neither seller nor purchaser complied with the provisions of the act of the Thirty-First Legislature (General Laws 1909, p. 66), commonly known as the `Bulk Sales Law.' The controverting affidavit specifically alleged that at the time of said purchase and sale the said W. A. Williams & Co. and the individual partners and the garnishee, Guy E. Morris, each and all wholly failed to give the 10 days' notice of such contemplated purchase and sale, and wholly failed to notify, or cause to be notified, personally, or by registered mail, any of the creditors of the said W. A. Williams & Co., and particularly the plaintiff, Nash Hardware Company; that said Guy E. Morris failed to make full and explicit inquiry of the said W. A. Williams & Co., or the members thereof, as to the name and place of residence, or place of business, of each and all of the creditors of said Williams & Co. and the amount owing to each by such seller, and in numerous other respects declared that said Guy E. Morris and the said Williams & Co., in the matter of making such transfer and sale in bulk, failed to comply with the requirements of said act, all of which more fully appears from the controverting affidavit of appellant, found in the transcript. This controverting affidavit further shows that at the date of the issuance and service of the writ of garnishment its judgment, claimed against W. A. Williams and F. S. Williams, composing the firm of Williams & Co., was a valid, subsisting, and unsatisfied demand. In replication to the controverting affidavit, above referred to, the garnishee, Guy E. Morris, filed a general and certain special exceptions, raising the question of the validity of said act, which said exceptions were by the trial court sustained, and, the Nash Hardware Company declining to amend, judgment was rendered against it for costs and attorney's fees, from which judgment it has appealed, all of which more fully appears from the transcript of the record of the cause, to which reference is made, and which will accompany this certificate.

"In view of the importance of the question, and in view of the contrariety of holdings upon the constitutionality of similar statutes in other states, we certify to your honors the question whether or not the trial court erred in sustaining the demurrers to the controverting affidavit of appellant, alleging a purchase and sale in violation of the act referred to."

The statute referred to in the question is not unconstitutional. We copy that part involved:

"Section 1. That any sale or transfer of any portion of a stock of merchandise otherwise than in the ordinary course of trade in the usual and regular prosecution of the seller's or transferrer's business; or a sale or transfer of an entire stock of merchandise in bulk, shall be void as against creditors of the seller or transferrer unless the purchaser or transferree shall at least ten days before the sale or transfer, in good faith make full and explicit inquiry of the seller or transferrer as to the name and place of residence or place of business of each and all creditors of the seller or transferrer, and the amount owing to each such creditor by the seller or transferrer, and obtain from the seller or transferrer a written answer to such inquiries, which answers shall be sworn to by the seller or transferrer; and unless the purchaser or transferree at least ten days before the sale or transfer in good faith, notify or cause to be notified personally or by registered mail each of the seller's or transferrer's creditors of whom the purchaser or transferree has knowledge, of said proposed sale or transfer.

"Sec. 2. Any purchaser or transferree who shall conform to the provisions of this act shall not in any way be held accountable to any creditor of the seller or transferrer for any of the goods, wares or merchandise that have come into the possession of said purchaser or transferree by virtue of such sale or transfer.

"Sec. 3. Nothing in this act shall apply to sales by executors, administrators, receivers or any public officer conducting a sale in his official capacity, nor to a sale or transfer of stocks of merchandise for the payment of bona fide debts where all creditors share equally and without preference in the sale or transfer or the proceeds thereof."

The grounds of invalidity urged in this case are as follows:

(1) "The effect of the general act, known as the `Bulk Sales Law' (chapter 27, p. 66, Thirty-First Legislature of Texas, 1909), restricting the right of merchants or owners of stocks of merchandise to dispose of their own property, is to prefer wholesale merchants as creditors, and give them advantages and privileges which are denied to all other persons. By the terms of the statute, a cumbersome and unreasonable burden is placed on a limited class of debtors, and an exclusive, separate privilege given to a limited class who are their creditors. The act is therefore class legislation."

"This statute is unconstitutional, because it deprives the retail merchants of this state of the full and free right of contract, and does not deprive any other persons or class of persons of such right. It is in restraint of liberty and property, and makes no discrimination between sales honestly made and those made to defraud; both are equally void, unless the terms of the statute are complied with."

"This statute cannot be upheld on the ground that it is a valid exercise of the police power of the state. The Legislature has power to enact reasonable laws for the prevention of fraud and the protection of creditors, when public necessity demands the same; but the Bulk Sales Law is an unreasonable and unnecessary burden placed on a highly...

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21 cases
  • Ex Parte Bradshaw
    • United States
    • Texas Court of Criminal Appeals
    • 16 Abril 1913
    ...Gooding, 19 Tex. Civ. App. 490, 49 S. W. 123; Insurance Co. v. Mettler, 185 U. S. 325, 22 Sup. Ct. 662, 46 L. Ed. 922; Nash Hardware Co. v. Morris (Sup.) 146 S. W. 874; Railroad v. Taylor, 134 S. W. 819; Railroad v. Grenig, 142 S. W. 135; De Grazier v. Stephens, 101 Tex. 194, 105 S. W. 992,......
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    • United States
    • Texas Court of Appeals
    • 20 Enero 1928
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    • United States
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