32 Pa. Super. 295 | Pa. Super. Ct. | 1907
Opinion by
By virtue of an execution issued upon a judgment against
The first question to be considered is as to the construction of the act, and particularly the first section, which reads as follows : “ That the sale in bulk of the whole, or a large part, of a stock of merchandise and fixtures, or merchandise, or fixtures, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the seller’s business, shall be deemed fraudulent, and voidable as against the creditors of the seller, unless the purchaser shall, in good faith, and for the purpose of giving the notice herein required, make inquiry of the seller, and receive from him a list in writing of the names and places of residence or business of each and all of his creditors, and, unless the purchaser shall, at least five days before the consummation of the sale, give personal notice of said proposed sale, to each of the creditors of the seller as appearing on said list, or use reasonable diligence to cause personal notice to be given to them, or shall deposit in the mail a registered letter of notice, postage prepaid, addressed to each of the seller’s said creditors at his post-office address, according to the written
It is contended that the plaintiff has not instituted a proper proceeding to have the sale set aside as to creditors ; that if the legislature had in mind the protection of creditors, it was the protection of all the creditors equally, and not merely the protection of an alert and active creditor who secures judgment and issues execution. This position is not tenable. It is not incumbent on a creditor, as to whom such a sale is fraudulent and voidable, to obtain the co-operation of other creditors. He has the right to attack it in the method which was always an available - and appropriate method for a creditor to pursue in order to invalidate, that is, to render of no legal force and effect, so far as the collection of his claim is concerned, a sale of chattels by a debtor, which as to such creditor is voidable upon the ground of fraud. To levy on the goods as the property of the debtor, and in response to the sheriff’s rule to interplead to aver the facts which made such sale fraudulent and voidable as to creditors, is an appropriate proceeding “ to invalidate any such voidable sale ” within the meaning of the act of 1905.
Another point urged by the claimant with more apparent confidence is that a failure on the part of the purchaser to comply with the provisions of the act simply raises a prima facie presumption of fraud, thus relieving a creditor of the necessity of producing evidence to that effect, and at the same time casting the burden of establishing the good faith of the transaction on the purchaser. It is argued, on the other hand, that this construction would make it possible now, as it was before the passage of the act, for a dealer to carry into successful execution a dishonest scheme to cheat his creditors by converting his entire stock of merchandise into money by a sale in bulk, “ because money is more easily shuffled out of sight,” provided the other party to the transaction is not implicated in the intended fraud otherwise than as a bona fide purchaser for value. Counsel show quite clearly, and we think it must be conceded, that, owing to the facility which such a transaction affords for defrauding creditors, the suggested construction would deprive the statute of much of its effectiveness as a remedy for the mis
First, it is objected that the act does not apply to all persons alike, but only to merchants, and is arbitrary class legislation which denies to those affected by it the equal protection of the laws guaranteed by the fourteenth amendment of the federal constitution. Nowhere in the act does the word dealer, vender, or merchant appear, and it is reasonably certain that a sale by such person of goods or fixtures not employed in his business, as, for example, the furniture in his dwelling, was not intended to be governed by this statute. We mention this to show that it is not the business or the occupation of the seller which alone determines whether or not the purchaser must comply with its provisions. The act speaks of “ a stock of merchandise and fixtures,” and of a sale of them “ otherwise than in the ordinary course of trade and in the regular and usual'prosecution of the seller’s business.” When read together and with the context these clauses imply, we think, not simply that the goods were once merchandise, that is, commodities traded in by merchants, but that at the time of the sale they still bore the character of “ a stock of merchandise,” that is, goods and merchandise employed in trade, which in the ordinary course of trade, and in the regular and usual prosecution of the seller’s business, would be sold or bartered otherwise than by a sale in bulk. The statute deals with a particular class of sales, but the rule of conduct prescribed for the seller in each sale within the class
Under the right guaranteed by our state constitution to acquire, possess and protect property, there is necessarily included the right to make reasonable contracts concerning it. It is also part of the liberty which is declared to be an inalienable right. “ The methods by which' this right to acquire property is asserted and exercised are, however, and have been since organized government began among men, subject to regulation by law. The power of government thus brought into service is known as the police power: ” Williams, J., in Commonwealth v. Vrooman, 164 Pa. 306. In the same case Justice DeaisT, who vigorously dissented from the judgment sustaining the constitutionality of the law then under consideration, nevertheless conceded that all the authorities agree that the legislature may, in the exercise of the police power, absolutely forbid contracts which are inimical to public interests, and may adopt suitable regulations of contracts for the protection of the public. As to the clause of the fourteenth amendment of the federal constitution, which forbids any state to deprive any person of liberty or property without due process of law, it is sufficient to say that the freedom of contract which is necessarily included in the rights here protected, is subject to certain limitations which the states may impose in the exercise of its police power and that in the exercise of that power a large discretion is necessarily invested in the legislature to determine, not only what the interests of the public require, but what measures are necessary for the protection of those interests: Holden v. Hardy, 169 U. S. 366 (18 Sup. Ct. Repr. 383) ; Minnesota Iron Co. v. Kline, 199 U. S. 593 (26 Sup. Ct. Repr. 159). It is unnecessary to cite other authorities in support of the general doctrine that the police power, which is necessarily inherent in every form of government, and the exercise of which our state constitution declares “ shall never be abridged,” was not excluded from our state government in matters affecting personal liberty, and the acquisition, possession and protection of property by the provi
In many states of the union similar legislation, but in many instances much more stringent, has heen adopted. The conclusions of the several courts in those cases in which its con
Another objection that has been made in one of the cases before us is, that the act is defective in that it fails to give sufficient notice of the duties imposed upon the purchasers to whom it applies. This objection can be best answered by quoting the title. It is, “An act relative to the sale in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, not in the ordinary course of business; providing certain requirements therefor; imposing certain duties upon the seller, and making their violation a misdemeanor.” This gives notice that the body of the bill contains certain provisions as to the requirements for such sale, and if the title had ended here, no one would contend that it would he defective'because it did not specify all the requirements to be observed by the purchaser as well as by the seller. The addition of the next clause was evidently intended to give notice of the criminal liability of the seller in the event of his nonperformance of the duties devolving upon him. It would be hypercritical in the extreme to say that the addition of this clause would mislead anyone into the supposition that the act contains no requirements to be observed by the purchaser.
The judgment is affirmed.