Wright v. Hart

CourtNew York Court of Appeals
Citation75 N.E. 404,182 N.Y. 330
PartiesWRIGHT v. HART.
Decision Date03 October 1905

OPINION TEXT STARTS HERE

Appeal from Supreme Court, Appellate Division, First Department.

Action by Edmund Wright, as trustee in bankruptcy of W. C. Loftus & Co., against Edward Hart. From an order of the Appellate Division (93 N. Y. S. 60, 103 App. Div. 218), affirming an interlocutory judgment overruling a demurrer to the complaint, defendant appeals. Reversed.

In November, 1903, a corporation known as W. C. Loftus & Co., engaged in the retail clothing and tailoring business in the city of New York, sold to the defendant its entire stock, fixtures, and lease for a consideration of $22,953.86. Within a few days thereafter a petition in involuntary bankruptcy proceedings was filed against it, and the plaintiff was elected trustee thereunder. At the time of the sale referred to chapter 528, p. 1249, of the Laws of 1902 was in force, and it provided that:

Section 1. A sale of any portion of a stock of merchandise other than in the ordinary course of trade in the regular and usual prosecution of the seller's business, or the sale of an entire stock of merchandise in bulk, shall be fraudulent and void as against the creditors of the seller, unless the seller and purchaser shall at least five days before the sale make a full and detailed inventory showing the quantity, and, so far as possible with the exercise of reasonable diligence, the cost price to the seller of each article to be included in the sale, and unless such purchaser shall at least five days before the sale, in good faith make full explicit inquiry of the seller as to the name and place of residence or place of business of each and every creditor of the seller and the amount owing each creditor, and unless the purchaser shall at least five days before the sale in good faith notify or cause to be notified personally or by registered mail each of the seller's creditors of whom the purchaser has knowledge, or can with the exercise of reasonable diligence acquire knowledge, of such proposed sale and of the stated cost price of merchandise to be sold and of the price proposed to be paid therefor by the purchaser. The seller shall at least five days before such sales file a truthful answer in writing of each and all of said inquiries.’

The plaintiff, as trustee in bankruptcy of the selling corporation, has brought this action to set aside the sale on the ground that it was made without complying with any of the provisions of the statute. The purchasing defendant interposes the demurrer that the complaint does not state facts sufficient to constitute a cause of action because the statute is unconstitutional. This claim of unconstitutionality is based (1) upon article 1, § 1, of our state Constitution, which provides that ‘no member of this state shall be * * * deprived of any rights or privileges secured to any citizen thereof, unless by the law of the land or the judgment of his peers'; (2) upon article 1, § 6, of our state Constitution, which provides that no person shall ‘be deprived of life, liberty or property without due process of law’; and (3) upon section 1 of the fourteenth amendment to the federal Constitution, which provides that ‘no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty or property, without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.’

Cullen, C. J., and O'Brien and Vann, JJ., dissenting.Louis Marshall and Samuel P. Goldman, for appellant.

Abram I. Elkus and Joseph M. Proskauer, for respondent.

WERNER, J. (after stating the facts).

Before proceeding to a critical view of the challenged statute, it may be profitable to make a few pertinent, though trite, observations on the nature, construction, and effect of written constitutions. A written constitution is the fundamental expression of the sovereign will. Under our form of government that sovereign will resides in the people. A written constitution is not only the direct and basic expression of the sovereign will, but is the absolute rule of action and decision for all departments and offices of government in respect to all matters covered by it, and must control as it is written until it shall be changed by the authority that established it. It is true, as was said by Judge Cooley, that ‘the weaknesses of a written constitution are that it establishes iron rules which, when found inconvenient, are difficult of change; that it is often construed on technical principles of verbal criticism, rather than in the light of great principles; and that it is likely to invade the domain of ordinary legislation, instead of being restricted to fundamental rules.’ The logical corollary of the proposition that the Constitution is the supreme law of the land is that the power to legislate is a purely delegated one, derived from the Constitution and controlled by it. In the case at bar we are concerned with no quibbles of verbiage or technicalities of construction, but with the broad question whether an act of our Legislature is repugnant to the ‘iron rule’ of our federal and state Constitutions that no citizen shall be deprived of ‘life, liberty or property,’ or be denied the ‘equal protection of the laws.’

In the course of judicial interpretation, the words ‘liberty’ and ‘property,’ as used in the Constitutions, have naturally and properly been given their most comprehensive signification, so that they embrace every form and phase of individual right that is not necessarily taken away by some valid law for the general good. ‘The term ‘liberty,’ as protected by the Constitution, is not cramped into a mere freedom from physical restraint of the person of the citizen, as by incarceration; but it is deemed to embrace the right of man to be free in the enjoyment of the faculties with which he has been endowed by his Creator, subject only to such restraints as are necessary for the common welfare.' People v. Marx, 99 N. Y. 377, 2 N. E. 29, 52 Am. Rep. 34. ‘All laws, therefore, which impair or trammel these rights, which limit one in his choice of a trade or profession, or confine him to work or live in a specified locality, or exclude him from his own house, or restrain his otherwise lawful movements (except as such laws may be passed in the exercise by the Legislature of the police power), are infringements upon his fundamental rights of liberty, which are under constitutional protection.’ In re Jacobs, 98 N. Y. 98, 50 Am. Rep. 636. “Liberty' * * * includes the right to acquire property, and that means and includes the right to make and enforce contracts.' State v. Loomis, 115 Mo. 307, 22 S. W. 350,21 L. R. A. 789;Allgeyer v. Louisiana, 165 U. S. 578, 17 Sup. Ct. 427, 41 L. Ed. 832. The right to use, buy, and sell property is protected by the Constitution, and ‘when the law annihilates the value of property, and strips it of its attributes by which alone it is distinguished as property, the owner is deprived of it according to the plainest interpretation, and certainly within the constitutional provision intended expressly to shield personal rights from the exercise of arbitrary power.’ Wynehamer v. People, 13 N. Y. 378, 398;People ex rel. Manh. S. Instn. v. Otis, 90 N. Y. 48.

Let us now analyze the statute under scrutiny. Every sale (a) ‘of any portion of a stock of merchandise, other than in the ordinary course of trade in the regular and usual prosecution of the seller's business, or (b) the sale of an entire stock of merchandise in bulk, shall be fraudulent and void as against the creditors of the seller, unless (1) the seller and purchaser shall at least five days before the sale, (2) make a full and detailed inventory, (3) showing the quantity, and, so far as possible with the exercise of reasonable diligence, (4) the cost price to the seller of each article to be included in the sale, and unless (5) such purchaser shall at least five days before the sale in good faith make full, explicit inquiry of the seller as to the (6) name and place of residence or place of business of each and every creditor of the seller, and (7) the amount owing each creditor, and unless (8) the purchaser shall at least five days before the sale in good faith (9) notify or cause to be notified personally or by registered mail each of the seller's creditors of whom the purchaser has knowledge, or can with the exercise of reasonable diligence acquire knowledge of such proposed sale, and (10) of the stated cost price of merchandise to be sold, and (11) of the price to be paid therefor by the purchaser. (12) The seller shall at least five days before such sale file a truthful answer in writing of each and all of said inquiries.’ No one will have the temerity to suggest that this drastic and cumbersome statute is not in restraint of the rights of ‘liberty’ and ‘property,’ as those terms have been judicially declared to have been used in the federal and state Constitutions.

It is contended, however, that the restraint which it imposes upon these rights is justifiable under that shibboleth of Legislatures and courts known as the ‘police power.’ Far be it from us to deny the existence of that power or to attempt to define its extent. It will be our effort, rather, to show that the statute under consideration is in some particulars so thoroughly unrelated to the probable object of its enactment, and in others so cumbersome, burdensome, unreasonable, and unworkable, as to violate every one of the constitutional provisions under which it is challenged. The rights of ‘liberty’ and ‘property,’ as we have seen, are sacred and substantial rights guarantied by the federal and state Constitutions. Any law that interferes with the right to make and enforce contracts affects both the liberty and property of the citizen. The right to sell and purchase merchandise in bulk is no...

To continue reading

Request your trial
74 cases
  • St. Louis Gunning Advertisement Co. v. City of St. Louis
    • United States
    • United States State Supreme Court of Missouri
    • 9 d2 Maio d2 1911
    ...661, 8 Sup. Ct. 273, 31 L. Ed. 205; Austin v. Murray, 16 Pick. (Mass.) 126; Gains v. Buford, 1 Dana (Ky.) 481; Wright v. Hart, 182 N. Y. 330, 75 N. E. 404, 2 L. R. A. (N. S.) 338; People v. Green, 85 App. Div. 400, 83 N. Y. Supp. 460; City of Chicago v. Gunning, 214 Ill. 628, 73 N. E. 1035,......
  • Ives v. South Buffalo Ry. Co.
    • United States
    • New York Court of Appeals
    • 24 d5 Março d5 1911
    ...S. 133, 137, 14 Sup Ct. 499, 38 L. Ed. 385;Colon v. Lisk, 153 N. Y . 188, 196,47 N. E. 302,60 Am. St. Rep. 609;Wright v. Hart, 182 N. Y. 330, 75 N. E. 404,2 L. R. A. (N. S.) 338. In order to sustain legislation under the police power, the courts must be able to see that its operation tends ......
  • Peterson v. Hagan
    • United States
    • United States State Supreme Court of Washington
    • 14 d4 Abril d4 1960
    ...11, 25, 25 S.Ct. 358, 49 L.Ed. 643; State ex rel. Richey v. Smith, 42 Wash. 237, 84 P. 851, 5 L.R.A.,N.S., 674; Wright v. Hart, 182 N.Y. 330, 75 N.E. 404, 2 L.R.A.,N.S., 338.' See, also Ralph v. City of Wenatchee, 34 Wash.2d 638, 209 P.2d There is no relationship between the minimum wage ac......
  • Rhea v. Board of Education of Devils Lake Special School District
    • United States
    • United States State Supreme Court of North Dakota
    • 31 d5 Janeiro d5 1919
    ...... supported by high medical authority. See. [171 N.W. 110] . also in this connection Wright v. Hart, 182 N.Y. 330, 2 L.R.A.(N.S.) 349, 75 N.E. 404, 3 Ann. Cas. 263,. wherein the foregoing case is cited and approved. Also. Com. v. ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT