Kramer Bros. v. McPherson

WiNBORNE, C. J. Does the evidence offered by plaintiff in the trial below, as set forth in the case on appeal, taken in the light most favorable to plaintiff, make a case for the jury for violation of the sale in [358] bulk statute, G.S. 39-23? In view of the language of the statute, and decided cases in this State, this Court is of opinion that the evidence does make out such a case, and so holds. The statute, G.S. 39-23, declares that the “sale in bulk of a large part or the whole of a stock of merchandise, otherwise than in the ordinary course of trade and in regular and usual prosecution of the seller’s business, shall be void as against the creditors of the seller,” unless the seller makes an inventory as specified and gives timely notice to the creditors of the proposed sale, or executes bond, all as is therein specified. “Merchandise,” within the intent and meaning of this sale in bulk statute, is declared by this Court in Swift & Co. v. Tempelos, 178 N.C. 487, 101 S.E. 8, to be “limited to things which are ordinarily bought and sold, in the way of merchants, and as the subjects of commerce and traffic.” Full discussion of the term is there set forth in opinion by Walker, J., writing for the Court. Tested by the terms of the sale in bulk statute, the evidence in the instant case tends to show, or is reasonably susceptible of the inference that defendant McPherson, as a side line to his electronic shop, repairing televisions and radios, “put in hobby goods model airplanes and trains, etc.”; that in the course of his business he purchased more than $2,000.00 worth of merchandise from Kramer Brothers, the plaintiff, for which he has not paid; that in the language of McPherson, “I sold most of my stock of goods . . . over half of it — Mr. Qualls purchased some of it ... I sold it to him for somewhere between $845.00 and $865.00 . . .”; that Qualls prepared an inventory — $1,700.00 gross; and that McPherson did not notify Kramer Brothers, his creditor, or otherwise comply with provisions of the sale in bulk statute. And the evidence further tends to show that the stock of goods purchased by Qualls was sufficiently large to enable him to start a business of his own; and that, quoting Qualls, “When the stock was brought up to my store we added it in with all the rest of it . . .” Qualls says he made an “inventory of the stuff I brought into my store ... A lot of the stuff is still up there. I couldn’t tell exactly what is and what isn’t. I can go by that book and see and pick it out if I have to . . .” Indeed headnote #2 in Rubber Co. v. Morris, 181 N.C. 184, 106 S.E. 562, epitomizes the decision there in this manner: “When a sale of merchandise in bulk is avoided for non-compliance with the statute, C.S. 1013 (now G.S. 39-23), the goods can be made available by direct process or levy and sale in the hands of the original purchaser, or such purchaser may be held liable for their value when they are disposed of by him, and either remedy is available to the creditors of the vendor against subsequent purchasers as long as the goods can be identified, [359] or until they have passed into the hands of a bona fide purchaser for value without notice.” The sale in bulk statute has been the subject for consideration by this Court in several cases. See Pennell v. Robinson, 164 N.C. 257, 80 S.E. 417; Gallup v. Rozier, 172 N.C. 283, 90 S.E. 209; Whitmore v. Hyatt, 175 N.C. 117, 95 S.E. 38; Armfield Co. v. Saleeby, 178 N.C. 298, 100 S.E. 611; Swift & Co. v. Tempelos, supra; Rubber Co. v. Morris, supra, and possibly others. And it may be noted that these decisions were written in the light of the wording of the statute at the time. Hence it is appropriate to bear in mind these matters in connection therewith. The sale in bulk statute was enacted by the 1907 session of the General Assembly as Chapter 623 P.L. 1907, and has since been amended, and codified, (1) as C.S. 1013, and (2) now G.S. 39-23. As originally written the first line of Section 1 read “that the sale in bulk of a large part of the whole of a stock of merchandise . . But in an act P.L. 1913 Chapter 30, the preposition “of” appearing between the word “part” and the word “the” in the phrase just quoted was stricken out and the conjunctive word “or” inserted in lieu thereof, — so that the phrase was made to read “that the sale in bulk of a large part or the whole . . .” Lastly, the General Assembly, 1945 Session Laws of North Carolina, Chapter 635, Section 1, sub-section (26) amended G.S. 39-23 by striking out the words “prima facie evidence of fraud, and” appearing in lines five and six, so that the sale in bulk as set forth in Section 1 instead of reading prima facie evidence of fraud is made to read “shall be void as against creditors of the seller.” So it is now. In the meantime other amendments were enacted by General Assembly, P.L. 1913, Extra Session, Chapter 66, and P.L. 1933, Chapter 190, all of which are embodied in G.S. 39-23 as it now appears. The judgment from which appeal is taken will be set aside, and the cause submitted to a jury upon issues arising on the pleadings, and under proper charge by the couri Reversed. JOHNSON, J., not sitting