Court Opinion

ID: 3520458
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:32:11.082488+00
Date Added: 2024-06-11T13:34:05.474534
License: Public Domain

* Corpus Juris-Cyc. References: Exemptions, 25CJ, p. 161, n. 55; Fraudulent Conveyances, 27CJ, p. 875, n. 40; p. 876, n. 47; p. 880, n. 6; p. 885, n. 56, 62. As to statutory requirement as to sale of stock of goods in bulk, see annotation in 2 L.R.A. (N.S.) 331). Sale of entire stock of one branch or department of business as within the bulk sales statutes, see 33 A.L.R. 62. 12 R.C.L. 527; 2 R.C.L. Supp. 1445; 6 R.C.L. Supp. 714. As to what kind or classes of property are within the operation of the bulk sales statutes, see annotation in 25 L.R.A. (N.S.) 758; 45 L.R.A. (N.S.) 495; 12 R.C.L. 527; 2 R.C.L. Supp. 1446.
Appellee, as a creditor of Mrs. H.E. Warfield, filed its bill in the chancery court of Monroe county against appellant, by which it sought to hold appellant liable for the value of a stock of goods theretofore purchased from her by appellant to the amount of its claim against her, on the ground that in making said sale and purchase the Bulk Sales Law (chapter 100, Laws 1908) was violated. The cause was tried on bill, answer, and proofs, and final decree rendered in favor of appellee against appellant for one hundred sixty-five dollars, the value of the stock of goods involved. From that decree appellant prosecutes this appeal.
In 1924 the appellant purchased from Mrs. H.E. Warfield a farm, on which was located a dwelling and a storehouse, in which storehouse Mrs. Warfield was conducting a mercantile business. Shortly after his purchase of the farm, appellant purchased from Mrs. Warfield her stock of goods and fixtures located in the storehouse. The chancellor found the value of the stock of goods to be one hundred twenty-five dollars and the value of the fixtures *Page 295 
forty dollars. Before consummating the purchase of the stock of goods and the fixtures, appellant attempted, in good faith, to comply with the bulk sales statute. An inventory was taken, as required by the statute, and appellant demanded of Mrs. Warfield a list of her creditors. She gave him what purported to be a list, but appellee was not named in the list, and the appellant did not know that appellee was a creditor of Mrs. Warfield until after the stock of goods and fixtures had been purchased and paid for by him. The creditors listed by Mrs. Warfield were paid in full the amounts of their claims. Appellee had no notice, under the statute, or otherwise, of the purchase of the goods and fixtures by appellant.
Appellant's position is that he is not liable for the value of the goods and fixtures, because in their purchase he made every effort, in good faith, to comply with the bulk sales statute (chapter 100, Laws 1908 [Hemingway's Code, section 3129]), which follows:
"To prevent fraudulent sales of merchandise — What presumed to be fraud. 1. A sale of any portion of a stock of merchandise, otherwise than in the ordinary course of trade, or in the regular and usual prosecution of the seller's business, and a sale of an entire stock of merchandise in gross, shall be presumed to be fraudulent and void as against the creditors of the seller, unless, at least five days before the sale: (a) The seller shall have made a full and detailed inventory, showing the quantity, and, so far as can be done by the exercise of reasonable diligence, the cost price to him of each article sold; and (b) The purchaser shall have in good faith, made full and explicit demand of the seller for the name, place of residence and business and post office address of each of his creditors, and the sum due each, and to which demand the seller shall have made full and truthful written answers; and (c) The purchaser shall have in good faith notified personally or by mail each of the seller's creditors, of whom he has knowledge, or with the exercise of reasonable diligence could have acquired knowledge, *Page 296 
of the proposed sale and of the cost price of the merchandise proposed to be sold and of the price to be paid therefor by the proposed purchaser."
The sale and purchase of a stock of merchandise without compliance with the requirements of the statute is void, notwithstanding such sale and purchase was made in good faith and for value. The purchaser takes the goods at the peril of the statute not having been complied with. He must see that it is complied with. The purpose of the statute was to make the sale of stocks of merchandise in bulk prima facie fraudulent as to the creditors of the seller. Such prima-facie case can only be met by the purchaser by showing that the statute was complied with. He must show that the required inventory was made, and notice to the creditors given, otherwise he takes the goods subject to the debts of the seller. Moore Dry Goods Co. v. Rowe, 97 Miss. 75, 53 So. 626; Id., 99 Miss. 30, 54 So. 659, Ann. Cas. 1913E, 1213; Dean v. Bowles, 110 Miss. 575, 70 So. 693; Peters ShoeCo. v. Gunn, 121 Miss. 679, 83 So. 742.
Appellant contends that the bulk sales statute had no application to the fixtures in the store; that such fixtures were no part of the stock of merchandise. We do not think that contention is well founded. The purpose of the statute was to prevent fraudulent sales by merchants to defeat creditors of the property in their places of business upon which their creditors principally extended credit. This includes, not only the movable goods, but fixtures and other appliances used in connection with the conduct of the business. Merchandise fixtures often constitute a very large part of the merchant's assets carried in his place of business, and it is a rare case that a merchant sells his stock of goods without selling his fixtures. The word "merchandise" in the statute should be given a broad enough meaning to cover the evil the statute sought to remedy. To limit the statute strictly to goods kept for sale would, in a large measure, defeat its purpose. *Page 297 
Appellant contends, further, that the goods and fixtures were exempt to Mrs. Warfield under section 2147, Code of 1906 (section 1822, Hemingway's Code, as amended by chapter 168, Laws of 1924), which provides, among other things, that there shall be exempt from seizure and sale, under execution or attachment, to any citizen of this state, male or female, being a householder and having a family, residing in a city, town, or village, personal property, to be selected by him or her, not exceeding in value two hundred fifty dollars, or "articles specified as exempt to the head of a family;" that, under the law, there could be no fraudulent sale of exempt property; that the bulk sales statute does not apply to such property. Even though the statute does not apply to exempt property, the appellee failed, both in the allegations of its bill and in its proof, to make a case of that character. The evidence showed that Mrs. Warfield had a husband, and that they were living together as husband and wife, and there was an entire absence of evidence tending to show that Mrs. Warfield was entitled to the exemption allowed by the statute out of the stock of goods involved. For aught that appears in the record, her husband, as the head of the family, held all the exemptions allowed by the statute. And, if she was the head of the family, and entitled to claim the exemptions allowed by the statute, there is an absence of any evidence in the record showing that she did not hold all the exemptions allowed her by the statute.
We think the chancellor was justified by the evidence in the record in holding that appellee was a creditor of Mrs. Warfield; that appellee had not accepted her husband as its creditor in lieu of Mrs. Warfield, as contended by appellant.
Affirmed. *Page 298