54 Ga. App. 21 | Ga. Ct. App. | 1936
J. D. Hill individually owned a retail grocery and meat-market business. At that time he was indebted to C. M. Miller Company Inc., on three notes, one dated June 22, 1932, for $40.32 and two dated September 26, 1932, for $66.08 and $66.09 each. In October, 1932, J. D. Hill sold a half interest in this business to Lunceford under this arrangement: The stock of merchandise and fixtures then owned by Hill were inventoried and invoiced, and Lunceford agreed to purchase and did purchase additional goods and merchandise to equal the invoice of stock and fixtures on hand belonging to Hill, and the partners were to share equally in the venture. In December, 1932, Hill sold his remain
The plaintiff sought to recover punitive or exemplary damages, as well as actual damages. While it is true that a defendant in attachment can not maintain an action for trespass against the plaintiff in attachment except on the attachment bond, in the absence of allegations and proof that the attachment was sued out with malice and without probable cause, such principle is not applicable where the action is one for trespass brought by a third person against the plaintiff in attachment for a wrongful levy of an attachment on the property of such third person as the property of the debtor.- However, as in this case, where the plaintiff in the trespass action, who was not the defendant in attach
The controlling question in this case is, were the provisions of the bulk-sales law (Code, §§ 28-203 — 28-206) applicable to the transactions between Hill and Lunceford? If they were, and the parties should have conducted these transactions in compliance with the requirements of this law, then the title to the goods in the store did not pass from Hill to Lunceford, in so far as the creditors of Hill were concerned, who had extended credit to Hill before the sale of the first half interest in the stock of goods and business to Lunceford. A sale of a stock of merchandise, in violation of or without complying with the provisions of the bulk-sales act of this State, does not vest the title thereto in the vendee, as against creditors of the vendor, who before the sale have extended credit to the vendor. Parham, v. Potts-Thompson Liquor Co., 127 Ga. 303 (56 S. E. 460). In such a case the transaction will be conclusively deemed to be fraudulent (Code, § 28-205), and a creditor of the vendor may sue out an attachment and levy on the merchandise in the possession of the purchaser. Carslarphen Warehouse Co. v. Fried, 124 Ga. 544 (52 S. E. 598); Kight v. Stephen Putney Shoe Co., 137 Ga. 493 (73 S. E. 740). “It shall be the duty of every person who shall bargain for or purchase any stock of goods, wares, or merchandise in bulk, for cash or credit, before paying or delivering to the vendor any- part of the purchase-price therefor, to demand and receive from the vendor thereof, and if the vendor is a corporation, then from the managing officer or agent thereof, a written statement under oath of the names and addresses of all the creditors of said vendor, together with the amount of indebtedness due .or owing by said vendor to each of such creditors; and it shall be the duty of said
The object of the bulk-sales law is to protect the creditors of the vendor of a mercantile business. Lemieux v. Young, 211 U. S. 489 (29 Sup. Ct. 174, 53 L. ed. 295); Kidd &c. Co. v. Muselman Grocer Co., 217 U. S. 461 (30 Sup. Ct. 606, 54 L. ed. 839); Cooney v. Sweat, 133 Ga. 511, 512 (66 S. E. 257, 25 L. R. A. (N. S.) 758). In construing sales-in-bulk laws the courts have held that the same applies to no particular class of creditors of the merchant, but to all creditors, including other than merchandise creditors. Anderson v. Merchants & Miners Bank, 161 Ga. 12 (129 S. E. 650, L. R. A. 1917F, 232, note). Such law applies to secured as well as unsecured creditors. National Cash Register Co. v. Stubbs, supra. It has been said that while the bulk-sales law is intended to protect all the creditors, its main purpose is to protect the wholesaler. Escalle v. Mark, 43 Nev. 172 (183 Pac. 387, 5 A. L. R. 1512). Thus, one who purchases a retail stock of goods from a merchant who has not complied with the statutory requirement as to notice of sale is not entitled to retain, against creditors of the merchant, articles placed in the stock by him after the purchase, that merely replace the goods sold, and are pur
So where one person sells an undivided half interest in a mercantile business to another and thereby creates a partnership, and the business continues as a partnership, the provisions of the bulk-sales law have been held not applicable. In Yancey v. LamarRankin Drug Co., supra, it was ruled that the provisions of these sections of the Code do not apply to a sale by two partners of a two-thirds interest in a mercantile business to two other persons and the retirement of one of the original partners from the business, and the continuance of the business in the name of the new firm, composed of the remaining original partner and the two purchasers; as such transaction, while it may have been out of the usual and ordinary course of trade or business, was not a sale or transfer of a stock of goods, wares, or merchandise. Therefore, standing alone, the sale by Hill to Lunceford of the first half interest in the store and merchandise was not subject to and within the provisions of the bulk-sales act. But this view of our Supreme Court is not in harmony with the decisions of courts of other jurisdictions on the subject. Marlow v. Ringer, 79 W. Va. 568 (91 S. E. 386, L. R. A. 1917D, 619); Spokane Merchants
But, under our Georgia decisions on the statute, when Hill sold a half interest to Lunceford in October, 1932, taking him in as a partner, and thereafter in December, 1932, sold his remaining interest in the business to his partner Lunceford, this brought the sale within the bulk-sales act and rendered the same fraudulent and void as against a creditor of the vendor, whose debt had accrued before the sale of the first half interest to Lunceford. In Virginia-Carolina Chemical Co. v. Bouchelle, 12 Ca. App. 661 (78 S. E. 51), it was held that “Where the owner of a stock of goods sells a half interest therein to another, and a short time thereafter sells to his partner the other half interest in the business, the sale is void as to the creditors of the vendor, unless the provisions of the ‘sales-in-bulk act’ have been complied with.” The Bouchelle ease is not like Taylor v. Folds, 2 Ga. App. 453 (58 S. E. 683), in which it was held that “a sale by one partner of his interest in a mercantile business to his associates is not within the purview of the act.” This is the rule in other jurisdictions, and does not defeat the creditor of the partnership. 51 A. L. R.
Applying the above principles to the transactions between Hill and Lunceford in this case, the same amounted to an attempted sale of the entire stock of goods and fixtures, and the provisions of the bulk-sales act should have been complied with in order for Lunceford to ha^e received title thereto as against a creditor of Hill who had extended credit before the sale of the first half interest to Lunceford. It follows that the title to the goods levied on had not passed to Lunceford as against the attaching creditor, and that the levy of the attachment against Hill on the same was not
Judgment reversed.