Neas v. Borches , 109 Tenn. 398 ( 1902 )

Mr. Justice Wilkes

delivered the opinion of the Court.

This is an action of replevin, brought before a justice of the peace, for 67 pairs of shoes, valued at. $67,. levied upon by attachment in the hands of Reas,, sheriff, in favor of Donaldson Bros.

On appeal to the circuit court the cause was heard; by the judge without a jury, and there was judgment for the plaintiffs, Borches & Oo., and Donaldson. Bros, appealed to this court, and assigned errors.

It appears that Driscoll & Oo. were engaged in business as retail merchants at Given, Tenn., and while' so engaged became indebted to Borches & Oo.,. of Knoxville, and to Donaldson Bros., of Morris-town, both being wholesale merchants, and both having sold goods to Driscoll in the course of his business. Toward the last of August, 1901, Cureton,. traveling salesman for Borches & Oo., demanded payment of the amount, due that firm from Driscoll & Oo., and, it not being paid, proceeded to buy from Heritage, the clerk of Driscoll & Oo., the entire stock of Driscoll & Co., except a few odds and ends of no material value. This Avas done without any notice by the seller or purchaser to the creditors of Dris.coll & Oo. It does not appear that there was any fraud in the sale, nor that it was contrary to the wish of' the firm, nor that it was not approved and ratified' by the firm. On the contrary, Heritage says without objection that he had authority to sell the goods- and pay the debts of the firm, and he sold for the-purpose of paying the debt of Borches & 'Oo.; and: Driscoll & Co. are not complaining or calling the sale in question. Thereupon Donaldson & Co. caused attachment to he levied upon 67 pairs of shoes embraced in the sale to Borches & Co., and which had been delivered to them. Borches & Co. replevied the shoes, and claim to hold the same under their purchase. The contention in the case is that the purchase was void under the provisions of Acts 1901, ch. 138. The trial judge held this act unconstitutional, and that Dris-coll & Co., through their agents, had made a valid sale. The act in question is chapter 133 of the Acts of 1901, and is as follows:

Caption: “An act to provide the terms upon which sales in bulk of stocks of merchandise, or of any portion thereof otherwise than in the ordinary course of trade may be made.

“Section 1. Be it enacted by the general assembly of the State of Tennessee, that a sale of any portion of a stock of merchandise otherwise than in the ordinary course of trade in the regular and usual prosecution of the seller’s business, or a sale of an entire stock of merchandise in bulk, shall be presumed to be fraudulent and void as against the creditors of the seller, unless the seller and purchaser shall at least five days before the sale make a full detailed inventory, showing the quantity, and so far as possible, with the exercise of a reasonable diligence, the cost price to the seller of each article to be included in the sale; and unless such purchaser shall at least five days before the sale, in good faith, make full, explicit inquiry •of the seller as to the names and places of residence or place of business of each and all of the creditors of the seller, and unless the purchaser shall at least five days before the sale, in good faith, notify or cause to he notified personally or by registered mail, each •of the creditors of the seller of whom the purchaser lias knowledge, or can, with the exercise of reasonable diligence, acquire knowledge, of the purposed sale and of the cost price of the merchandise to be sold, and the price proposed to be paid therefor by the purchaser; and the seller shall at least five days before such sale, fully and truthfully answer in writing each and all of said inquiries; provided, however, no suit shall be brought or maintained by any creditor against such seller or purchaser within five days after he receive notice from any source of the intended sale and purchase, and any suit so brought shall be dismissed at the cost of the plaintiff in thé case.

“Sec. 2. Be it further enacted, that whenever a notice as provided in section 1 of this act is sent by registered mail, the creditor of person to whom the notice is mailed shall be presumed conclusively to have received the notice, and the time of the notice shall be dated from the time of the mailing and registration of said notice.”

It is said, in the first place, that the act is class legislation, in that it applies alone to merchants dealing in merchandise, and not to other persons, such as farmers, stock dealers, manufacturers, traders, and persons engaged in other business than the sale of merchandise. Admitting this, in reply it is said that the statute is a mere regulation of the mercantile business, designed to secure to creditors of merchants a just participation in the distribution of the assets of such merchants, and to prevent fraudulent performances and practices by them, and is a valid exercise of the police power of the State.

The majority of* the court is of opinion that the act in question is valid and constitutional; that it was intended to prevent the practice of fraudulently selling out goods to the injury of creditors by merchants ; that it is merely a regulation of the business of merchandising; that it is not class legislation, and that the limitation of the act to merchants is not arbitrary classification; that it does not take away the property of the citizen, but only regulates the sales of merchandise in such manner as to prevent fraud. The result is that the judgment of the court below must be reversed, and, it being a replevin suit before a justice of the peace, judgment must be rendered for twice the value of the goods replevied, to-wit, the sum of $134, and all costs, in favor of the defendants, and against the plaintiff, which judgment may be discharged by a return of the shoes.