Case Name: Root Refineries v. Gay Oil Company
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1926-05-17
Citations: 171 Ark. 129
Docket Number: 
Parties: Root Refineries v. Gay Oil Company.
Judges: 
Reporter: Arkansas Reports
Volume: 171
Pages: 129–134

Head Matter:
Root Refineries v. Gay Oil Company.
Opinion delivered May 17, 1926.
Rogers, Barber S Henry, for appellant.
Moore, Smith, Moore & Trieber and Geo. A. McConnell, for appellee.

Opinion:
Hart, J.,
(after stating the facts). It is conceded that the claim of the plaintiff was submitted to the jury upon proper instructions and that it is concluded by the verdict of the jury as to the account sued on by it.
It is claimed, however, that there is nothing in the record to show that the plaintiff assumed the debts and liabilities of the Petroleum Products Company, and that it is not liable to the defendant for any claim it might have against the Petroleum Products Company. 'This is true, but the liability attaches on other grounds.
The Petroleum Products Company sold and conveyed its business and all its property used in connection therewith to the Root Refineries for the sum of $130,000. It only reserved from the sale about $10,000 worth of oil, which it had in stock. It went out of business, and the Root Refineries succeeded to its business and operating plant. This summary sale of the business of the Petroleum Products Company to the Root Refineries was not in the ordinary course of business, and the transaction falls within the prohibition of our Bulk Sales Law., That statute provides that the sale in bulk of any part of, or the whole of, a stock of merchandise and the fixtures pertaining to the conduct of any such business, otherwise than in the ordinary course of trade and in the ordinary prosecution of the business of the seller, shall be void against the creditors of the seller unless the terms of the act are complied with. The language of the act is very broad and comprehensive, and by its terms protects all creditors of merchants alike.
The court has held that the language of the statute is sufficiently broad and comprehensive to protect the creditors of wholesale merchants as well as the creditors of retail merchants. North American Provision Co. v. Fischer Lime & Cement Co., 168 Ark. 106.
No attempt was made to comply with the provisions of our Bulk Sales Law. The Petroleum Products Company sold practically all of its business, including1 its fixtures, to the Root Refineries for $130,000, which is a sum greatly in excess of the claim of the defendant. No other claim has been proved against the Petroleum Products Company. Therefore the assets received by the Root Refineries are far in excess of the claim of the Gay Oil Company.
In reaching this conclusion we are not unmindful that in Robbins v. Fuller, 148 Ark. 173, it was held that our Bulk Sales statute refers to the trade fixtures connected with the business, and not to the building in which the business is carried on.
The record shows that the Root Refineries bought the physical properties of the Petroleum Products Company for $130,000. This included the real estate, trade fixtures and all the remainder of its property except a stock of oil which invoiced about $10,000. The Petroleum Products Company was engaged in refining oil and selling gas, oil, fuel oil, gasoline and naphtha. "While there was no separate valuation of the trade fixtures, in the very nature of things it is inferable that they were worth more than the amount of the claim of the Gay Oil Company, which is the only one proved in this case.
In this connection it may be stated that in Ramey-Milburn Co. v. Sevick, 159 Ark. 358, it was held that a person operating a veneer mill and sawmills, at which logs were manufactured into lumber and then sold, is not within the purview of our Bulk Sales statute, though he sells substantially all the lumber he has on hand at a particular time. The reason is that the sale of the lumber was only an incident to the operation of the manufacturing plant.
On the other hand, if the main business of Sevick had been to operate a lumber yard, the sale in bulk of his lumber and trade fixtures would have fallen under the ban of the statute, although he might have operated a sawmill and a veneer mill for the purpose of supplying, in whole or in part, stock for his lumber yard.
Merchandise means something that is sold every day, and is constantly going out of the store and being replaced by other goods. Boise Association of Credit Men v. Ellis, 26 Idaho 438, 144 Pac. 6 L. R. A. 1915E, 917. Such is the effect of our holding in Fisk Rubber Co., Inc., v. Hinson Auto Co., 168 Ark. 418, where it was held that an automobile repair shop did not fall within the prohibition of the statute, although there were occasional sales of the various accessories which were kept for the purpose of repairing cars. The reason given was that the principal business of the company was repair work, and the supplies were carried for use in that business. The court said that the occasional sales of supplies constituted an inconsequential part of the principal business.
The Petroleum Products Company was refining crude oil, which it purchased, into the various products above enumerated and selling the same from day to day in precisely the same manner as other articles of commerce are bought and sold in trade by merchants. II was doing something more than selling its products as a necessary incident to refining oil. It was engaged in selling its various products in the same way that they are sold by merchants. The record shows that it was making contracts with various companies to supply them with such products as it sold. It made a contract with the Gay Oil Company to carry out some of its contracts which it had made with other companies. When the record is construed as a whole, it shows that the Petroleum Products Company was carrying on a business or trade in merchandise, and that it was not merely engaged in refining oil and selling the refined products as an incident to its main business. Hence the Petroleum Products Company fell within the ban of the statute when it sold its trade fixtures in connection with its other property.
The proof fully established the claim of the defendant against the Petroleum Products Company. Hence the court properly rendered judgment in favor of the defendant against the plaintiff for the amount its claim exceeded the claim of the plaintiff.
It follows that the judgment will be affirmed.