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no material value. This was done without any notice by the seller or purchaser to the creditors of Driscoll & Co. 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 & Co.; and 400 Driscoll & Co. are not complaining or calling the sale in question. Thereupon Donaldson & Co. caused attachment to be levied upon sixty-seven 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 of 1901, chapter 133. The trial judge held this. act unconstitutional, and that Driscoll & 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 401 the sale, in good faith, make full, erplicit 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 be notified personally or by registered mail, each of the creditors of the seller of whom the purchaser has 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 the 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 402 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 Lusiness 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 etate.
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 euch 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 one hundred and thirty-four dollars, and all costs, in favor of the defendants, and against the plaintiff, which judgment may be discharged by a return of the shoes.
Mr. Justice Wilkes Dissented from the opinion of the majority of the court, on the ground that the statute in question was clearly vicious class legislation, and took away the value of the merchant's property by trammeling its sale, and that its provisions were not jus
tified or warranted by the exercise of the police power of the state. He admitted the difficulty of determining what objects fell within the police power, but was of the opinion that the power could not be extended so as to prevent the disposition of property in any manner which the owner saw proper, if the disposition did not endanger the public safety, peace, health, or happiness. The statute in question, he insisted, embraced all sales of merchandise otherwise than in the ordinary course of trade in the general and usual prosecution of the seller's business, whether he was solvent or insolvent, and whether he acted in good faith or for a fraudulent purpose, unless notice was given, as in the act required, and that the result of this was to compel every merchant, whether solvent or insolvent, to obtain the consent of al his creditors before he could close out bis business for any purpose or at any price. He relied upon section 8 of article 1 of the constitution of the state, declaring that "no man shall be taken or imprisoned, or disseised of his freehold, liberties, or privileges, outlawed, or exiled, or in any manner destroyed or deprived of his life, liberty, or property, but by the judgment of his peers or the law of the land," and insisted that, while the effect of the statute was not to take away property, it did restrict and birden a merchant's property in such a way as to prevent its free transfer and the realization of its value, thereby taking away one element of its value, namely, the right to use and legitimately dis
pose of it.
A Statute very similar in its terms to the one passed upon in the principal case is pronounced constitutional in McDaniels v. J. J. Connelly Shoe Co., 30 Wash. 549, 94 Am. St. Rep. 889, 71 Pac. 37.
MATTHEWS v. CAPSHAW.
[109 Tenn. 480, 72 S. W. 954.) POWERS OF SALE_Special, How Must be Pursued. Where a special power of sale is given, to be exercised only on the happen. ing of a certain event, it can be executed only in the mode, at the time, and upon the conditions prescribed in the instrument creating it, and the purchaser must, at his peril, ascertain whether the contingency upon which the sale is authorized existed. This rule ap. plies only where the condition upon which the power is to be exercised is upon the happening of a certain event or independent fact, which may be ascertained by anyone with equal certainty. (pp. 856, 857.)
POWERS OF SALE.— Where the condition upon which & power of sale is to be exercised is such that the determination, whether it has been fulfilled or not, requires the exercise of judgment and discretion, as to which there may be an honest difference of opinion, the decision of the donee of the power, in good faith and without notice to an innocent purchaser, will not be set aside, though it may afterward appear that his judgment was erroneous. (p. 857.)
IF A POWER of Sale is to be Exercised if a Necessity for 80 Doing Arises, the judgment of the donee of the power as to the necessity is conclusive in the absence of fraud. (p. 859.)
POWER OF SALE.-Though a Power of Sale is not Exercised in Good Faith, the title of the purchaser is not thereby affected, unless collusion or guilty knowledge can be traced to him. (p. 859.)
POWERS OF SALES Given in Wills Should Receive a Liberal Construction in order to carry out the purpose and intent of the testator. (p. 860.)
POWER OF SALE-Conveyance, When Deemed to be in Execution of.-Where the owner of a life estate is vested with a power of sale and executes a conveyance purporting to convey in fee, but without referring to the power, its exercise will nevertheless be presumed. No express recital of the power is required. (p. 861.)
Bryant & McBroom and F. T. Fancher, for Matthews et al.
Algood & Finley and R. P. Capshaw, for Capshaw et al.
482 SHIELDS, J. Complainants, children and devisees of Lawrence Matthews, deceased, bring this bill to assert their title in remainder upon the falling in of the estate of their mother, Mrs. Agnes Matthews, for her own life, now outstanding, in certain valuable lots in 483 Cookeville, Tennessee, and to have declared void and inoperative a deed made by Mrs. Matthews, purporting to convey the property in fee to Simeon Hynds.
Lawrence Matthews made his will in 1860, and died in 1874, the owner of real and personal property including that in question, and leaving Agnes Matthews, his widow, and complainants (twelve in number), his children, surviving. His will was duly admitted to probate, and John F. Matthews and Mrs. Agnes Matthews, the executor and exccutrix, therein named, were qualified.
The first clause of the will is in these words: "1. If my wife, Agnes, should live longer than I do, I want, at my death, all of my just debts to be paid, and then I want my wife, Agnes, to have all my lands and negroes and effects during her life or widowhood, and that in case of necessity, I authorize my wife, Agnes, to sell any properties or lands or negroes, as same as I could for myself, for the benefit of the family.” The other clauses contain some small bequests to certain of his children, and a special provision that all of his children shall be made equal in the distribution of his estate.
On November 5, 1877, Mrs. Agnes Matthews conveyed the property in controversy, for a valuable consideration in hand
age, was examined
paid, to Simeon Hynds, in fee, with formal covenants of seisin, good right to convey, and general warranty; and through several intermediate conveyances, purporting to convey in fee
, made for 484 valuable considerations paid, and without notice of the claim now attempted to be asserted, the several defendants now have possession and claim title to the property. The deed to Simeon Hynds contains no reference to the will of Lawrence Matthews, or the power of disposition of his property therein given his wife.
At the time this conveyance was made Mrs. Matthews was in possession of some five or six hundred acres of land, and had some money and other personal property; but the condition of the estate of the testator and of the several complainants does not fully appear, save that the personal estate was evidently small, and the children had not been advanced equally. Mrs. Matthews who is now about ninety years of as a witness, and testified that she sold the property because she thought she had the right to do so, and that she accounted for the proceeds in a settlement she made as executrix some nine years afterward. There is no charge of fraud or unfairness in connection with the sale and conveyance of the lots.
The complainants insist that the power of sale vested in Mrs. Matthews was a limited power, to be exercised only upon the happening of a certain contingency, and that she was not authorized to convey the property of the estate unless a necessity for such sale arose, and that, under the facts above stated, no such necessity existed when the sale was made to Simeon 495 Hynds, and, further, if a necessity did exist, the power given her was not exercised, since the deed contains no express recital that it was her intention to execute it, and the presumption is that she only intended to convey her estate for life, and for these reasons her conveyance was only effective to pass her life estate; that they are the rightful owners in the remainder of the fee to the property; and they bring their bill to have this adjudged and the conveyance of Mrs. Matthews, so far as it purports to convey the fee, declared a cloud on their title, and removed.
The general rule of law, unquestionably, is that, where a special power of sale is given, to be exercised only upon the happening of a certain event, made a condition precedent, it can be executed only in the mode, at the time, and upon the conditions prescribed in the instrument creating it, and the purchaser must, at his peril, ascertain whether the contin