Court Opinion

ID: 9767271
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:14:49.684044+00
Date Added: 2024-06-11T07:30:29.942022
License: Public Domain

CIRILLO, Judge,
dissenting:
I find that I must respectfully dissent from that part of the majority’s opinion which holds that failure to give notice *595of an impending bulk transfer is not merely non-compliance within the meaning of 13 Pa.C.S.A. § 6111, but constitutes “concealment.”
Under 12A P.S. § 6-105,1 a transferee is required to give notice to the creditors of the transferor. It states:
§ 6-105. Notice to Creditors
In addition to the requirements of the preceding Section, any bulk transfer subject to this Article except one made by auction sale (Section 6-108) is ineffective against any creditor of the transferor unless at least ten days before he takes possession of the goods or pays for them, whichever happens first, the transferee gives notice of the transfer in the manner and to the persons hereafter provided (Section 6-107).
Therefore, bulk transfers covered by Article 6 are not subject to attack if the compliance procedures of the statute are followed. If the complying transfer is not a fraudulent conveyance and does not amount to a preference, the goods are beyond the reach of simple creditors unless they can reduce their claims to judgment and levy on the goods during the ten day period between notice and transfer.2 Therefore, a claim of ineffectiveness rises when the transferee has failed to provide notice to the creditors of the transferor.3 When this occurs, the creditor has a cause of action not only against the transferor, but also against the transferee.
The period in which the creditor must bring this action is not unlimited. The failure to comply with the notice provi*596sions of the Article activates Section 6-111, which requires that an action be brought within six months of the date of the transfer or the claim will be barred. However, if there has been a concealment of the transfer, the general six month statute of limitations is inapplicable, and the creditor can bring his claim at any time within six months after he learns of the transfer.
The majority has held that we must adopt the view that “concealment,” as it is used in Section 6-111, can refer simply to a failure to give the requisite notice of the transfer to the creditors as required by Section 6-105. However, if we subscribe to this view, it will totally nullify the general six month statute of limitations under Section 6-111.4 Specifically, the effect of such a holding would be to exempt every action under Section 6-111 from the applicability of the general six month statute of limitations. Clearly, such a result was not the intention of the drafters of the Uniform Commercial Code. On the contrary, I would adopt the view of the Federal District Court in the case of Aluminum Shapes, Inc. v. K-A Liquidating Co., 290 F.Supp. 356 (W.D.Pa.1968), which held, as an interpretation of Pennsylvania law, that concealment within the meaning of 6-111 “refers to affirmative concealment and not to mere nondisclosure or failure to give ‘public notice’.” Id. at 359. I believe that it is a more plausible conclusion.
Therefore, I would hold that “concealment” under 12A P.S. § 6-111 requires some sort of affirmative act on the part of the transferee to shield the transfer from the creditor. My review of the record discloses that there is no evidence of such behavior on the part of Rinek Rope Company. Consequently, I find that appellant’s claim should be barred by the six month statute of limitations.
Therefore, I dissent.

. This has subsequently been re-codified as 13 Pa.C.S.A. §§ 6101-6111. However, the provisions are substantially the same. Since this action was initiated prior to the change, we will refer to the old statute.

. Hawkland, Sales and Bulk Sales, 3rd Ed. at 209-215 (1976). If there is full compliance with the Article, then creditors have six months to examine the schedule of property and the list of creditors. If they find that the transfer was fraudulent or preferential, they may be able to invalidate the transfer under the laws of fraudulent conveyance or Article 9.

. The formal requirements of this notice are set forth in 12A P.S. § 6-107.

. See, Hawkland, Uniform Commercial Code Series § 6-111:02 (1982).