97 Neb. 204 | Neb. | 1914
This action was commenced by a creditor of one George Lightbody, deceased, for the appointment of a receiver, and for the disposal of a stock of goods, wares and implements which had been sold in violation of the provisions of section 2651, Rev. St. 1913, commonly called the “Bulk Sales Law,” against the purchase of the stock at bulk sale, in possession. A receiver was appointed, all of the creditors of Lightbody intervened, and by proper pleadings asked for the same judgment which the original plaintiff had prayed for. On the final hearing the district court found that the sales were void, found the amount due each of the creditors, ordered the stock of implements sold, and distributed the proceeds among the several plaintiffs according to the amounts of their claims, dismissed the action as to the defendants Yanderkolk and Milligan, and the copartnership, composed of Sandman, Koenig and Bishop, has appealed.
It appears that George Lightbody of Harbine, which is a small village in Jefferson county, on October 25, 1911, sold his stock of implements to W. E. Yanderkolk, without complying with the bulk sales law; that within five days thereafter Vanderkolk sold the stock to William Milligan, without complying with said law, and on November 1, 1911, Milligan sold the stock to Charles Sandman, Lewis B. Koenig and William T. Bishop, partners; doing business as Koenig & Company, without complying-with the provisions of the section above mentioned. It further appears that Sandman, one of the partners, was the president of the State Bank of Harbine, and at all! times from July 21, 1911, until after November 2, of that year, knew that the plaintiff was surety for Lightbody on a note for $2,000 due the bank, and which the plaintiff was; obliged to pay. On November 2, 1911, Lightbody died intestate and insolvent. On November 23, 1911, and before the appointment of an administrator of his estate, the plaintiff brought this action, asking for a receiver to take charge of said goods, sell the same, and apply the to the payment of the debts of decedent. The goods were-
It is the contention of the appellant that the creditors’ claims must have been reduced to judgment and executions returned nulla bona before this action could be maintained; and it is argued that a creditor whose claim has not been reduced to judgment, and who has neither a general nor specific lien on his debtor’s property, is not entitled to have such property impounded as security for the claim. Neither is he entitled to a decree canceling fraudulent transfers already made. That this is the rule in ordinary cases must be conceded. But this rule, like all others, has its exceptions, and’ the transactions, of which complaint is made, seem to be. within the exception. Smith, Equitable Remedies of Creditors, sec. 167.
It is further contended that the claims of the creditors should have been filed and alloAved in the probate court before this action could be maintained. It must be observed, however, that this is not a probate proceeding. Lightbody had parted with his interest in the property before his death, and immediately died insolvent. His heirs had no interest in the property, and could not have invoked the provisions of the bulk sales law. The creditors were the only parties who could complain. The insolvency of Lightbody was alleged in thejpetition and was admitted by the answer. An execution would not run against the administrator of the insolvent estate. Kennedy v. Creswell, 101 U. S. 641; Smith, Equitable Remedies of Creditors, sec. 167; Steere v. Hoagland, 39 Ill. 264; Smalley v. Mass, 72 Ia. 171.
The courts, wherever this question has been presented, have held that the creditors would not be required to do a vain thing. In Merchants Nat. Bank v. McGee, 108 Ala. 304, it was said: “A simple contract creditor may file a -bill to subject property alleged to have been fraudulently
The constitutionality of the bulk sales law is not assailed in this case. But it is contended that a second purchaser takes the property without, regard to the provisions of the statute, and therefore the creditors in this case cannot maintain an action against the defendant Koenig & Company to subject the property to the payment of their claims.
A like question was before the supreme court of Michigan in Humiston, Keeling & Co. v. Yore, 148 N. W. (Mich.) 266. It was there said: “The admitted violation of the bulk sales law (Pub. Acts 1905, No. 223), declaring the sale in bulk of any part or the whole of a stock of merchandise otherwise than in the ordinary course of business void as against creditors, gives a court of equity jurisdiction of a bill by a creditor, joining other creditors of the seller, to reach and' apply the property by declaring the purchaser a receiver in trust for creditors, and by an injunction and an accounting.”
The question was again before that court in Coffey v. McGahey, 148 N. W. (Mich.) 356. That was a case very like the one at bar. There the creditor had sold his
The supreme court of Michigan has also held that in such cases it is optional with the creditor to proceed by garnishment or to ask to have a receiver, and it is immaterial that the purchaser of the stock was ignorant of the requirements of the statute; that such sale is void, and the purchaser is a trustee for the creditors. It may be observed that the provisions of the Michigan statutes are but declaratory of the equity provisions which are usually enforced by courts of equity in this country.
The judgment of the district court is
Affirmed.