Court Opinion

ID: 3587155
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:36:48.201265+00
Date Added: 2024-06-11T07:41:53.869963
License: Public Domain

I concur in the opinion of WERNER, J. He has called attention to the defects in the statute in not specifying the place where the inquiries shall be filed. But in addition thereto the notice to creditors provided for means non-resident as well as resident creditors. The notice to creditors must be served either personally or by registered mail at least five days before the sale. The notice would be of no benefit unless it was received before the sale was completed and in time for the creditor to take action in reference thereto. The statute has, therefore, fixed the period of five days. If the notice is served personally it must be five days before sale. If by registered mail, the statute doubtless means the same thing; that is, the notice should be received at least five days before the sale. In other words, if the service is by registered mail, the posting must take place a sufficient time in advance so that the creditor may receive it at least five days before the sale is completed. (Steinhardt v. Bingham, 182 N.Y. 326.) In case of creditors so far removed as to be beyond the reach of the registered mail, personal service only would answer the requirements of the statute. Such a notice in many cases might be impossible, or if it could be given, it might involve not only so much time but so much expense as to render the purchase profitless and operate to defeat the sale. In case the sale is very large, as for instance that of a large department store, weeks must elapse after the parties have made their agreement before they can complete the same. An inventory of every article must be made and the cost price of each article must be stated. This necessarily would consume considerable time. The inventory, no matter how extensive or bulky, must be duplicated for each creditor, for the statute could only be complied with by the serving of a copy of such inventory upon each creditor, containing the cost price of each article and the amount to be paid under the proposed agreement of purchase. This must be served personally or by registered mail five days before the sale. Again, what is the necessity of such a notice? It can have but one purpose. It gives to every creditor an inventory of *Page 346 
every article proposed to be sold, the cost price thereof and the amount that the purchaser proposed to pay, so that any creditor or a combination of creditors may step in within the five days allowed by the statute and bid a greater sum for the goods offered and thus defeat the sale contemplated and avoid the contract made between the seller and the purchaser, although they both may have acted in good faith and without any intention of defrauding creditors. It is doubtless true that there have been many sales of the goods of merchants made for the purpose of defrauding creditors, and that a statute imposing reasonable restrictions upon such sales ought to be enacted. But I think that the statute under consideration imposes an unnecessary and an unreasonable restriction upon the power of persons to contract, and that merchants could not in many instances comply with its requirements; and that it, in effect, prohibits parties from contracting for the purchase and sale of a stock of goods, even though both parties act in the best of faith and without any intention of defrauding creditors.