83 So. 742 | Miss. | 1920
delivered the opinion of the court.
The appellant, complainant, filed a bill in the chancery court of Jones county against H. P. Hurlbert and B. B. Gunn, alleging in substance that the defendant Huidbert, while engaged in the mercantile- business with his partner, became indebted to complainant for merchandise in the sum of four hundred, three dollars and thirty-five cents, which amount is past due and unpaid, and that Hurlbert and his partner, though requested so to do, have declined and refuse to pay the same; that their stock of merchandise was sold to the defendant R. B. Gunn in bulk in violation of the Bulk Sales Law (chapter 100, Laws 1908; sections 3129, 3130, 3131, 3132, Hemingway’s Code); the violation consisted in the failure of Gunn to demand- and the failure of Hurlbert to furnish, at least five days before the sale, the name, pláce of- residence, and post office address of each of the creditors of the said firm, and the amount due each, and that the said Gunn did not in good faith notify personally or by mail each of the creditors of the
The defendant Hurlbert failing to answer the bill, a pro confesso and final decree were taken against him.
The defendant Gunn in his answer admits the purchase in bulk of .the stock of goods from Hurlbert and his partner and that he had been in possession of them since he purchased them, selling and disposing of them in due course of trade. He attaches a copy of the bill of sale executed to him. He admits the violation of the Bulk Sales Law with reference to demanding the names, etc., of the creditors of Hurlbert and partner, and the failure to notify these -creditors, etc. He alleges that he paid in cash for the stock of merchandise to Hurlbert and partner the sum of five hundred and. sixty dollars; that Hurlbert and partner represented to him that they owed to other mercantile creditors some seven hundred and fifty or eight hundred dollars, and that they intended to take this money and the proceeds
The final decree of the lower court adjudged that the sale was made in violation of the Bulk Sales Law; that the amount paid by Gunn to Hurlbert was the reasonable value of the goods; that, since the proceeds ol! the sale were paid by Hurlbert to some of his creditors, though no part was paid to the complainants, it was ordered and adjudged that the complainant recover nothing from the defendant Gunn, but was allowed a personal decree against Hurlbert in the sum of four hundred and seventy dollars with interest.
The appellee, Gunn, admits that the sale was a violation of the Bulk Sales Law. but contends that the
A sale- in violation of the Bulk Sales Law is fraudulent and void. Moore Dry Goods Co. v. Rowe, 97 Miss. 775, 53 So. Id., 99 Miss. 30, 54 So. 6659, Ann. Cas. 1913C, 1213.
The bill in this case is in the nature of a creditors’ bill filed against both parties to this fraudulent and void sale seeking to recover the amount of the indebtedness due complainant. The complainant had the right to' proceed against the property if it remained in the hands of the fraudulent vendee, or, if disposed of by the fraudulent vendee in whole or in part, he may be' held liable for its value; in other words, the creidtor had the right to proceed against the property, or he' may treat the transactions as a tort against the property which should have been subjected, to his debt, which in this case was less than the value of the property; he may thus waive the tort and sue the fraudulent vendee for the value of the property, or he might pursue both remedies. This proposition is set forth in the case of Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S. W. 167, Ann. Cas. 1914B, 1101.
The fact that the appellee, Gunn, had disposed of a part of this property before the suit was filed, makes no difference. Having acquired the property through fraudulent and void sale as to the creditors of the fraudulent seller, he stands in the position of a trustee of the property, responsible to the creditors for the disposal of such property. Appel Mercantile Co . v. Barker Dry Goods Co., 92 Neb. 669, 138 N. W. 1133; Fitz Henry v. Munter, 33 Wash, 629, 74 Pac. 1003; Rubber Co. v. Kaufman, 98 Neb. 562, 153 N. W. 585.
The answer of the defendant suggested that there were other creditors of the fraudulent vendors, but these creditors were not made parties to this suit, nor have they voluntarily intervened as such. Under the record in this case the appellant is entitled to_ recover against the defendant Gunn the amount of the debt due it, namely four hundred, and seventy dollars. This is less than the fair market value of the stock of merchandise attempted to be purchased by appellee.
Reversed, and desree here for appellant.