Nichols, North, Buse Co. v. Belgium Cannery , 188 Wis. 115 ( 1925 )

Eschweiler, J.

_ It was conceded upon the trial that if the so-called Bulk Sales Law, secs. 2317c to 2317f, Stats, (now secs. 241.18-to 241.21), applied to the transactions of June 17th and July 7, 1922, then the conditions required in order to make a valid sale, such as the making of an inventory at cost price and notifying the then existing creditors of the Green County Company, were not present. The language of the statute so far as material is as follows:

“Section 2317c. The sale, transfer, or assignment, in bulk, otherwise than in the ordinary course of trade, and in the regular prosecution of the business of the seller, trans-feror or assignor, of any part, or the whole, of any stock of goods, wares and merchandise, or of the fixtures pertaining to the same, . . . shall be conclusively presumed to be fraudulent and void,” etc.

We think it is clear that the transaction here involved, by which a canning company undertook to sell or pledge the whole or the substantial part of its pack for the then oncoming packing season, was not within the letter or the spirit of the Bulk Sales Law.

As was said in the opinion by Mr. Justice Jones in Missos v. Spyros, 182 Wis. 631, 197 N. W. 196, the statute is penal in its character, in derogation of the common law, should be strictly construed, and in purpose was designed to prevent fraudulent sales by merchants of their entire stock of merchandise.

The statutory language above quoted certainly does not expressly include such an enterprise or business as that of a pea cannery, with its entire producing season limited to but a few days in each year, and one so entirely different from that of the ordinary merchant, disposing of his goods, wares, and merchandise from day to day, and we fail to see any valid reason or ground for so stretching the language as to include such a business. The manifest difficulty, if not impossibility, in a situation such as was before the Green County Company of its complying with other requirements of the law, such as preparing an inventory and determining the cost price of its product, all then in the future and impossible of determination, is also an important consideration in determining this question.

Consideration is urged by appellant to the amended Bulk Sales Law of Illinois, the first having been held unconstitutional, and to the case of Athon v. McAllister, 205 Ill. App. 41, where it was held that the sale of the entire property of one engaged in a dray and transfer business, and farming was within their act. The Illinois act, however, is broader than ours, contains the phrase not found here, “or other goods and chattels of the vendor’á business,” inserted after the phrase, common to both acts, “goods, wares, and merchandise,” as is pointed out and discussed in the Missos Case, supra, at p. 635.

In Massachusetts the term “merchandise” used in their Bulk Sales Law has been given a very extensive meaning. In Hart v. Brierley, 189 Mass. 598, 76 N. E. 286, in a sale by a factory of biscuits and crackers put up for the wholesale market, such articles were considered as merchandise under their Bulk Sales Law, but under the testimony it was held that the sale there of the entire manufactured product was made in the ordinary course of business and therefore valid. Again in Tupper v. Barrett, 233 Mass, 565, 124 N. E. 427, the word “merchandise” as used in such statute was held to include the horses and carriages of one whose principal business was trading, buying, and selling horses, and that the particular sale there questioned was not in the usual course of the business, and therefore voidable.

On the other hand, in Everett P. Co. v. Smith Bros. 40 Wash. 566, 82 Pac. 905, 2 L. R. A. n. s. 331, a statute like ours was held not to apply to the sale of a livery stable; and in Spurr v. Travis, 145 Mich. 721, 108 N. W. 1090, the discussion of such a statute assumed that it did not apply to farmers and manufacturers.

In view of the prior holdings of this court as to the nature and purpose of this statute, and having heretofore adopted and now again approving of the theory that it is a penal statute aimed more at a particular class, namely, the merchants as the term is ordinarily used, than at the wide and practically unlimited field, of those who deal in any way in any sort of personal property that might come within the term “merchandise,” we must decline to follow the views of the Illinois and Massachusetts courts as indicated above and continue to hold that our statute is limited to a much narrower field and does not cover such transactions as were here involved.

We are not unmindful in taking this position of the broad meaning sometimes given to the word “merchandise,” as, for instance, in Hanson v. Roter, 64 Wis. 622, 625, 25 N. W. 530, involving a contract for the sale and delivery of a quantity of logs, where such logs were spoken of as an ordinary article of traffic, like lumber, or other “merchandise;” the latter case being cited as authority for the statement, “Logs to be got out are merchandise which is within the statute,” found in Crosby H. Co. v. Trester, 90 Wis. 412 (63 N. W. 1057), at p. 413, a case involving the statute of frauds. In Massachusetts it has been held to be synonymous with tangible property which could be sold (Tupper v. Barrett, 233 Mass. 565, 568, 124 N. E. 427), and in New England & S. S. Co. v. Comm. 195 Mass. 385, 390, 81 N. E. 286, the word as used in a taxation statute was held to include steamships.

The conclusion we have reached makes it unnecessary to . consider whether or not the transaction was or was not in the ordinary course of trade and in the regular prosecution of the business of the seller, or as to the possible effect the subsequent bankruptcy of the principal defendant had upon the rights of any particular creditor in garnishment.

By the Court. — Judgment affirmed.