Rothchild Bros. v. Trewella

• Decision Date: 04 February 1905
• Citation: 79 P. 480,36 Wash. 679
• Parties: ROTHCHILD BROS. v. TREWELLA.
• Court: Washington Supreme Court

79 P. 480

36 Wash. 679

ROTHCHILD BROS. v. TREWELLA.

Supreme Court of Washington

February 4, 1905

Appeal from Superior Court, Pierce County; W. O. Chapman, Judge.

Action by Rothchild Bros., a corporation, against Richard Trewella. Judgment for plaintiff. Defendant appeals. Reversed.

Marshall K. Snell and Bertha M. Snell, for appellant.

Ellis &amp Fletcher, for respondent.

RUDKIN, J.

Between the 8th day of February, 1902, and the 13th day of September 1902, one Kennedy was engaged in the retail liquor business at the town of Hoquiam, in this state. During that period he became indebted to the plaintiff in this action in the sum of $407.05 on account of the purchase price of merchandise to be used in the conduct of his business. On said 13th day of September, 1902, and while said Kennedy was so indebted to this plaintiff for such merchandise, he sold substantially his entire business and stock in trade, in bulk, to the defendant in this action. The defendant did not demand of or receive from Kennedy any statement containing the names and addresses of his creditors, or in any manner comply with the provisions of the act of March 16, 1901 (Laws 1901, p. 222 c. 109), commonly known as the 'Sale in Bulk Act.' The defendant paid Kennedy the entire purchase price of $3,200, and continued the business in which Kennedy had previously been engaged until the 26th day of January, 1903 when he sold out to one Heffron. No action was ever instituted against Kennedy to recover the amount of this indebtedness, and this defendant never assumed or promised to pay the same. A demurrer was interposed to the complaint in the court below for want of sufficient facts, but the same was overruled. At the trial the plaintiff recovered a judgment according to the prayer of the complaint, and the defendant appeals therefrom.

The sole question presented on this appeal is this: Can a creditor of a vendor who sells property in bulk, without a compliance with the above-mentioned act, maintain a direct action at law against the purchaser to recover the amount of his debt? We think that he cannot. The only effect of a failure to comply with the requirements of the act, so far as the purchaser is concerned, is to render the sale fraudulent and void. It does not differ from any other transfer made in fraud of creditors, except in the matter of the proof of the fraud. It given the creditor no direct remedy against the purchaser, either in terms or by implication. It is true that the statute was passed for the protection of creditors, but so was the statute of Elizabeth which declares the common law on the subject of fraudulent conveyances; so was section 4575, 1 Ballinger's Ann. Codes & St., declaring conveyances in trust for the use of the person making the same void; so was section 4578, Id., declaring bills of sale not recorded void, where the property is left in the possession of the vendor; and so with other acts that might be enumerated. But in none of these cases, so far as we are advised, has it been held that a simple-contract creditor, without judgment or lien, could maintain a direct action at law against the fraudulent grantee to recover his debt. 'If a fraudulent disposition has actually been made by the debtor of his property, a creditor cannot, in the absence of special legislation, bring an action in assumpsit against those who combined and colluded with him. Assumpsit will not lie if there is neither an express promise, nor a privity from which the law will imply a promise to pay the debt of the creditor.' Bump on Fraudulent Conveyances, § 527. The same author says in section 528 that an action on the case will not lie. To the same effect, see Wait on Fraudulent Conveyances & Creditors' Bills, § 62. 'A creditor of one who has made fraudulent conveyances...