The Steele Etc. Co. v. Miller
| Decision Date | 04 May 1915 |
| Docket Number | 14707 |
| Citation | 92 Ohio St. 115,110 N.E. 648 |
| Parties | The Steele, Hopkins & Meredith Co. v. Miller |
| Court | Ohio Supreme Court |
Constitution law-Bulk-sales law-Section 2, Article XIII, Constitution (1912), and bill of rights-Uniform operation and reasonable classification-Amended Section 11102 et seq.,General Code (103 O. L., 462), constitutional.
in September, 1912, contains a specific grant of power to the legislature to provide by law for the regulation of the sale and conveyance of personal property, and is a qualification to that extent of the guaranties contained in the bill of rights.
of the constitution, if it operates equally upon every person and locality within the circumstances covered by the act, and when a classification has a reasonable basis it is not invalid merely because not made with exactness or because in practice it may result in some inequality.
General Code, relating to the transfer of stocks of merchandise and fixtures other than in the usual course of trade (103 O. L 462), is a valid enactment not repugnant to the state or federal consititutions.
The plaintiff in error, an Ohio corporation, being a creditor of Joseph W. Foley, who was engaged in business as a retail grocer and as such the owner of a stock of merchandise and fixtures pertaining to the business, brought suit in the common pleas of Clark county to set aside a sale of the whole of said stock and fixtures to the defendant in error.
It is alleged in the petition that the sale was not made in the usual and ordinary course of trade, or in the regular and usual prosecution of the business of retail grocer conducted by Foley; that the purchaser, Miller, did not at the time of, or prior to, the sale, or at any subsequent time, demand or receive from Foley a written or other list of names and addresses of his creditors, with the amount of the indebtedness due to each, and certified by him under oath to be a full, accurate and complete list of such creditors and his indebtedness; nor did he demand or receive any list or description of the names and addresses of such creditors of any kind whatsoever; that the defendant, Miller, did not at any time prior or subsequent to taking possession of the stock or paying therefor notify, either personally or by registered mail, the plaintiff or any other creditor of Foley of the proposed sale and of the price, terms and conditions thereof, or either; that the defendant holds possession of the stock of merchandise and fixtures, and that the plaintiff has requested and demanded of him a settlement or an accounting for said stock, which he has refused. The prayer of the petition is that the sale may be set aside and for further appropriate relief.
Defendant demurred to the petition on the ground that it did not State facts sufficient to constitute a cause of action and that Section 11102, General Code, (103 O. L., 462), known as the bulk-sales law, which relates to the transfer of stocks of merchandise and fixtures other than in the usual course of trade, upon which the action was based, is unconstitutional and void. That section is as follows: "The sale, transfer or assignment, in bulk, of any part or the whole of a stock of merchandise, or merchandise and the fixtures pertaining to the conducting of said business, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the business of the sellers, transferrer or assignor, shall be void as against the creditors of the seller, transferrer, assignor, unless the purchaser, transferee or assignee demands and receives from the seller, transferrer or assignor a written list of names and addresses of the creditors of the seller, transferrer and assignor, with the amount of the indebtedness due or owing to each and certified by the seller, transferrer and assignor, under oath, to be a full, accurate and complete list of his creditors, and of his indebtedness; and unless the purchaser, transferee or assignee shall, at least five (5) days before taking possession of such merchandise, or merchandise and fixtures, or paying therefor, notify personally, or by registered mail, every creditor whose name and address appears in said list, or of which he has knowledge, of the pro- posed sale and of the price, terms and conditions thereof.
The common pleas court sustained the demurrer. Judgment was entered for the defendant and this judgment was affirmed by the court of appeals.
Mr. Floyd A. Johnston; Mr. Roscoe C. Lorentz; Messrs. Watson, Stouffer, Davis & Gearheart and Mr. George B. Okey, for plaintiff in error.
Mr. C. S. Olinger, for defendant in error.
The constitutionality of the statute referred to is the sole question involved in the case. The courts below entertained the view that the question was determined by the cases of Miller et al. v. Crawford et al., 70 Ohio St. 207, and The Williams & Thontas Co. v. Preslo, 84 Ohio St. 328, notwithstanding the subsequent amendment to Section 2 of Article KIll of the Constitution. In those cases it was held that previous acts of the legislature, similar to that in question here, were unconstitutional. In the former case it was decided that the act of April 4, 1902 (95 O. L., 96), to prevent fraud in the purchase, disposition or sale of merchandise, was repugnant to the first article of the constitution, because it placed an unwarrantable restriction upon the right of the individual to acquire and possess property, and because it contained a forbidden discrimination in favor of a limited class of creditors. The court in the Opinion points out a number of onerous and restrictive features of the statute, and its analysis is concluded with the statement that "This act under the guise of preventing fraud in such sales, prohibits them altogether, and thus places upon the ertj oyment of property an important restriction which no public interest requires and which the constitution therefore forbids."
In The Williams & Thomas Co. v. Preslo, sufl ra, it was held that the act of April 30, 1908(99 O. L., 241), to render prcsumptively fraudulent sales in bulk of stocks of merchandise, unless the sellei should, not less than seven days before the transfer, file with the recorder of the county a notice of his intention to make such sale, was repugnant to the first article of the constitution.
The provisions of the statute which is attacked here are less burdensome than the act of 1902, the things now required with respect to the sale of an entire stock of merchandise, other than in the ordinary course of trade, being that the purchaser shall demand and the seller furnish, under oath, a complete and accurate list of his creditors and of the amounts owing to each, and that the buyer shall, at least five days before the completion of the sale, notify each of the creditors and any others of whom he may have knowledge, personally or by registered mail, of the proposed sale and of the price, terms and conditions thereof.
While it is pointed out by counsel that the act in question here is free from many of the objectionable features which were included in the original act, It is conceded that the application of the rules declared in the two cases above referred to, if unmodified by constitutional amendment or by this court, would require the affirmance of the judgments below in this case. The contention of the plaintiff in error is that such a modification has been intentionally and deliberately Provided in the amendment to Section 2 of Article XIII of the Constitution as adopted in September, 1912. That amendment reads as follows:
The courts below held that this amendment did not enlarge the power of the legislature in the respects claimed for it. In the consideration of it, it is the sole duty of the court to ascertain and give effect to the intention of the people in adopting it, and in the effort to promote the object of the people, rules which are purely technical should not be permitted to thwart the attainment of that object.
An amendment should be viewed in connection with the previously existing constitution and the evils and conditions which led to the change.
Moreover, effect should be given to every part of the instrument as amended, and in the absence of a clear reason to the contrary no portion of a written constitution should be regarded as superfluous. The addition or change should be considered as having been mad for some purpose. This is especially true where the amendment includes a granted power.
This amendment was adopted in the year following that in which the latter of the two abovenamed cases was decided.
It is a matter of common knowledge that the business of retail merchandising is conducted largely upon credit. This system has come about as a natural outgrowth of the vast increase in the facilities of transportation and communication in modern times. It was not surprising that a system, so built up and conducted, should be attended with abuses,...
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