Riley Pennsylvania Oil Co. v. Symmonds

• Decision Date: 18 December 1916
• Docket Number: No. 12107.,12107.
• Citation: 195 Mo. App. 111,190 S.W. 1038
• Parties: RILEY PENNSYLVANIA OIL CO. v. SYMMONDS (TRITCH, Garnishee).
• Court: Missouri Court of Appeals

190 S.W. 1038

195 Mo. App. 111

RILEY PENNSYLVANIA OIL CO. v. SYMMONDS (TRITCH, Garnishee).

No. 12107.

Kansas City Court of Appeals. Missouri.

December 18, 1916.

Rehearing Denied December 29, 1916.

Appeal from Circuit Court, Adair County; C. D. Stewart, Judge.

Attachment proceedings by the Riley Pennsylvania Oil Company against Thomas W. Symmonds, in which Marvin Tritch was garnisheed. Judgment for the garnishee, and plaintiff appeals. Reversed and remanded, with directions.

Higbee & Mills, of Kirksville, for appellant. Weatherby & Frank, of Kirksville, for respondent.

ELLISON, P. J.

Defendant Symmonds owned a stock of merchandise and was indebted to plaintiff. He sold the stock in bulk to Tritch. Neither of them complied with the sales in bulk statute in Laws 1913, p. 163. Plaintiff brought an action by attachment and garnished Tritch. The trial court found for Tritch, and plaintiff comes here for relief.

The case involves a construction of the statute just mentioned. It is provided in section 1 that any sale of the whole or greater part of a stock of merchandise, otherwise than in regular course of trade, shall be fraudulent and void as against all creditors of the vendor, unless the vendee seven days before the sale obtains from the vendor a written statement, under oath, of all of his creditors with the amount due to each; and the vendee shall then, at least seven days before taking possession or paying therefor, notify each of these creditors of the proposed sales, by telegraph or registered latter. The section contains a proviso that if the vendor delivers to the vendee a written waiver of these requirements by the creditors, contained in the verified statement, the statute will not apply.

Section 2 of the act provides that any vendee who shall conform to the provisions of this act shall not be held in any way accountable to any creditor of the vendor for any of the merchandise that has come into the possession of the vendee by virtue of said sale, "but any vendee who shall fraudulently fail or refuse to comply with the provisions of this act, shall upon application of any of the creditors of the vendor become a receiver and be held accountable to such creditors for all the merchandise, * * * that have come into his possession by virtue of said sale." Then, immediately following, is this proviso:

"Provided, however, that nothing in this act shall be so construed as to give any creditor, * * * any right to, or lien on any merchandise, * * * except the goods sold * * * by such creditor."

Section 4a provides that no proceeding at law, or in equity, shall be brought against any vendee to invalidate any sale after the expiration of 90 days from date of delivery to such vendee.

We gather from the record that the trial court was of the opinion that, notwithstanding in making the sale the provisions of this statute were ignored, yet under facts appearing in evidence there was a waiver by plaintiff, or, stated another way, there was an estoppel against plaintiff which deprived it of the right to invoke such statute. The facts bearing on such supposed waiver, or estoppel, are that one Few was plaintiff's local sales agent, who also collected for bills he sold, and that he knew of the sale "a week or ten days before it took place," and was told (verbally) by Tritch to "look after his account," when he replied that he had "a check for a part of it and there was only a small amount left"; that thereupon Tritch paid Symmonds all but $500 of the purchase money, such sum being the unpaid bills to other creditors, not including any of plaintiff's bill; that afterwards it developed that the check given to Few was worthless.

The evidence in plaintiff's behalf tended to show that the verbal notice to Few was not until after the sale and delivery to Tritch. It is stated that both Symmonds and Tritch have absconded.

It is thus seen that the statute has not been complied with in any particular. The specific provisions of the law as to written lists of creditors verified by affidavit, and written notice to such creditors within certain times, were no doubt made to avoid such disputes and trouble that this case has developed.

The statute (section 1) makes but one provision for a waiver of its terms, and that must be a written one from the creditors. It is, however, unnecessary to say whether any other kind of waiver could be made, or estoppel invoked, since, in this case, the acts of Few claimed to constitute a verbal waiver, were the acts of an unauthorized person. A local sales agent has no authority, by virtue of that employment, to waive the provisions of the act. Kight v. Stephen Shoe Co., 137 Ga. 493, 495, 73 S. E. 740.

But it is insisted by counsel that the bulk sales act cannot be invoked or applied by an ordinary action of attachment provided for by the general statutes. We do not doubt that it can. Under the attachment statute (section 2294, R. S. 1909), a fraudulent conveyance by the debtor as against creditors is ground for attachment; and a conveyance in defiance of the bulk sales act is declared to be a fraudulent conveyance as against creditors and thus, by its own terms, becomes a cause of attachment.

The act has been construed in this state as furnishing an additional character of fraudulent conveyance for which an attachment may be had under the general statute. Supply Co. v. Smith, 182 Mo. App. 212, 167 S. W. 649. In that case, in the opinion of Judge Farrington, supplemented by the concurrence of Judge Sturgis, is to be found a most interesting discussion of the entire question. Their conclusion that an attachment may be had is in keeping with the views expressed in states with similar statutes to section 1 of our act. Musselman Grocer Co. v. Kidd, 151 Mich. 478, 115 N. W. 409; Kohn v. Fishbach, 36 Wash. 69, 78 Pac. 199, 104 Am. St. Rep. 941; Carstarphen Warehouse Co. v. Fried, 124 Ga. 544, 52 S. E. 598; Interstate Rubber Co. v. Kaufman, 98 Neb. 562, 153 N. W. 585.

It seems to us that the meaning of the statute is that a vendee who buys and obtains possession of merchandise in bulk, without ascertaining the vendor's creditors and notifying them as required by the statute, becomes a trustee for such creditors, and liable to them in the proportion of their respective claims; that is, he is liable as such trustee to all who may, in obedience to section 4a of the act, institute their proceeding, within the 90 days from the day he accepted delivery of the property. After the expiration of that limited period, he cannot be disturbed in his purchase so far as any violation of that act is concerned.

The latter section is broad, applying against the creditor whether he has been notified or not; for, if not notified, it is justly assumed that the limited period is sufficient time for all diligent creditors to have learned of what has taken place. The intention of the statute is to preserve an equality among the creditors under section 1, during the period limited for proceedings against the sale, and thereby prevent a race for preference which might otherwise...