Minneapolis Drug Co. v. Keairnes, 167 N.W. 326

Minneapolis Drug Co. v. Keairnes

167 N.W. 326 | N.D. | 1918

Robinson, J.

This is an appeal from' a judgment of the district court under the “Bulk Sales Statute.” Comp. Laws 1913, § 7226. The statute is to the effect that sales of merchandise in bulk shall be void as to creditors unless made in a prescribed manner. That when a sale is not made in manner prescribed, then upon the application of any creditor the purchaser shall become a receiver of the goods for the benefit of all the creditors.

The purchaser in this case paid into court $410 as the price and value •of the goods sold to him. And the court gave judgment that the money should be distributed pro rata to all the creditors after first paying the •expense incurred by the appellants in trying to obtain a preference by garnishment and the levying of attachments. The judgment is manifestly fair and equitable, and in accordance with the letter and spirit of the statute. It gives to each creditor a dividend of about 40 per cent instead of permitting two or three parties to jump in and take all the money. Appellants claim that by extra diligence in garnishing and attaching the money they have gained a preference right over the other •creditors. To allow their claim would be to nullify the beneficent purposes of the statute. It is fair to assume that each creditor contributed his share to the stock of goods, and that on a sale of the same each should receive a pro rata share.

We agree with the supreme court of Washington that the object of *321this law was to hold the goods of debtors under such circumstances as a trust fund for the benefit of the creditors, and to hold the purchaser in possession as a trustee for such creditors. Fritz Henry v. Munter, 33 Wash. 629, 74 Pac. 1003. The purpose was'to prevent an expensive and unseemly scramble for unjust preferences, and to secure a fair distribution of the property of insolvent debtors.

Judgment affirmed.

Birdzell, J. I concur in the result.