Prokopovitz v. Chimka

• Decision Date: 04 November 1919
• Docket Number: No. 37.,37.
• Citation: 174 N.W. 448,170 Wis. 190
• Parties: PROKOPOVITZ v. CHIMKA (KUROWSKI, INTERVENER).
• Court: Wisconsin Supreme Court

170 Wis. 190

174 N.W. 448

PROKOPOVITZ

v.CHIMKA (KUROWSKI, INTERVENER).

No. 37.

Supreme Court of Wisconsin.

Nov. 4, 1919.

Appeal from Circuit Court, Shawano County; E. V. Werner, Judge.

Action by J. P. Prokopovitz against Mike Chimka and Joseph Kurowski, intervening defendant. Judgment for plaintiff and the intervening defendant appeals. Reversed and remanded, with directions.

This action was brought by plaintiff upon notes owing to him by the defendant Chimka. Property in the hands of the intervening defendant, Joseph Kurowski, was attached. Kurowski claimed ownership, and plaintiff claimed that the sale to Kurowski was void as to creditors of Mike Chimka, who had sold the property to Joseph Palka, of whom Kurowski bought it; neither sale being in compliance with the Bulk Sales Law.

Plaintiff, Prokopovitz, originally owned the stock of merchandise in question. He sold it to Chimka in bulk, and took as a part of the purchase price the $300 promissory note which constitutes the first cause of action herein. Neither plaintiff or Chimka knew of the existence of the Bulk Sales Law, and made no effort to comply with its provisions. Six months later Chimka sold the stock in bulk to one Palka, after an inventory had been made, in which plaintiff assisted. No effort was made to comply with the Bulk Sales Law (St. 1917, § 2317c). A part of the consideration for the stock was some property in Chicago and the rest was an agreement by Palka to pay certain creditors of Chimka, amounting to $1,958.54. The list of such creditors with the amounts to be paid by Palka to each was attached to the bill of sale, but the claims on which plaintiff sued were not in such list.

Palka in turn sold the stock of merchandise to the intervening defendant, Kurowski. He paid Palka $840 cash, and agreed to pay, and later did pay, as the balance of the purchase price, the same creditors of Chimka whom Palka had agreed to pay. Kurowski refused to pay plaintiff's claims, as no note of them was made in the list given to him by Palka. The stock of goods was delivered to Kurowski, and plaintiff sued Chimka when Kurowski refused to pay his claims and attached the goods. Kurowski intervened, claiming the goods.

The court held that the Bulk Sales Law applies in favor of creditors of the first seller to sales subsequent to the first sale, and that Kurowski, although he did not intend to participate in a fraudulent sale and had purchased the stock in good faith for an adequate consideration, is nevertheless estopped from claiming that the Bulk Sales Law does not apply to the sale from Palka to him as against Chimka's creditors. The court found the value of the Chimka goods acquired by Kurowski to be in excess of $3,200, and that he had paid claims against Chimka and Palka to the amount of $2,350. Judgment was entered in favor of the plaintiff for the sum of $546.93 damages and costs. The court adjudged that $83.94 of the amount of the costs was incurred by the intervening defendant, and constituted a personal liability against him. This is an appeal from such judgment.

Kaftan & Reynolds, of Green Bay, for appellant.

Eberlein & Larson, of Shawano, for respondent.

SIEBECKER, J. (after stating the facts as above).

In addition to the facts referred to in the foregoing statement, the court found: (1) That the transfer of the goods, wares, and merchandise to Kurowski was accomplished by assignment by Palka of the contract of sale and purchase between him and Chimka; (2) that Kurowski knew the terms of such transfer of this property, and that he knew that the creditors of Chimka specified in both sales to be paid by the purchaser were not all of Chimka's creditors, and that he was informed before the purchase that Chimka owed plaintiff on the note sued on; (3) that Kurowski knew that Chimka and Palka were about to leave the state, and that they probably had no property that could be reached by these creditors to satisfy their claims.

An examination of the evidence convinces us that the court erred in finding these facts. The evidence adduced fails to show that Kurowski had any knowledge of the terms of sale from Chimka to Palka aside from the fact of transfer, and that Palka agreed to pay those of Chimka's creditors who were specified in the list attached to the bill of sale. There is no evidence to show that Kurowski knew Chimka owed other debts, nor that Chimka owed plaintiff and the bank on the notes involved in this case. The record is also barred of proof that Kurowski had any knowledge that Chimka and Palka were financially irresponsible, and their creditors would be unable to reach any property belonging to them, or to secure payment of the debts owing by either of them. The finding that the transfer of the property by Palka to Kurowski was in effect an assignment of Palka's contract of purchase from Chimka is wholly unsupported by the facts. The evidence shows without dispute that a sale of property between Palka and Kurowski was negotiated on an agreed consideration through Palka's agent, and the transaction constitutes a direct sale of the goods between the parties. The trial court awarded recovery to plaintiff as a creditor of Chimka against Kurowski upon the grounds that plaintiff had the right to satisfy his claims out of the...