Smith v. Boyer

Supreme Court of South Carolina

Decided April 28, 1922

Supreme Court of South Carolina · decided 1922-04-28

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Decided 1922-04-28

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Cited by 8 later decisions — most recently August 1992

1 district · 7 state decisions

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Mr. Justice Watts

¶1 (dissenting) : For the reasons assigned by County Judge Whaley, and the additional reason that no motion was made to allow the pleadings amended so as to make" it an equitable proceeding, to appoint a receiver, the judgment of this Court should be that the judgment of the County Court be affirmed.

Mr. ChiEE Justice Gary concurs.

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Case posture

Posture: Before WHALEY, J., Richland County Court, March, 1921. Reversed and complaint dismissed.Two cases — Enoch Smith, doing business as Fair Grounds Stock Yards, against J.E. Boyer, E.A. Johnson and J.M. Whitton; and B.M. Dent against the same parties. From judgment for the two plaintiffs the defendants Johnson and Whitton appeal. The following is the decree of Judge Whaley, referred to in the opinion: These two cases, involving identical facts, were heard together before me on March 17, 1921. Evidence was taken, in substance, by myself, and arguments of counsel heard. The facts, as to which there is no material dispute, are substantially as follows: On February 2, 1920, the defendant Boyer sold to the other defendants, Johnson and Whitton, all the articles in his place of business as a butcher, which he did not keep for sale, but without which he could not have conducted the business, and which, for convenience, may be termed trade fixtures. The next day he sold the same parties all of that which he dealt in daily, namely, meat and ice tickets. When the first trade was verbally closed on February 2, the purchasers being informed by the seller that there were no outstanding debts, required an affidavit to that effect. However, no inventory was made by the seller. A bill of sale was, on the 3d of February, duly executed and delivered to the purchasers, who had same recorded on February 5. At the time of such delivery, the seller informing the purchasers of an incumbrance outstanding in the name of J. B. Boyer, son of J.E. Boyer, defendant, on which there was due $1,000, that much of the consideration was paid by way of check to J.B. Boyer, the balance of $25 being paid by way of check to J.E. Boyer. The check to J.B. Boyer was indorsed by him, then by his father, and presumably cashed by the latter. The sale of the meat and tickets was consummated on February 3, without any writing, and check given in payment to J.E. Boyer for $81 therefor. The defendant, Johnson, who acted for the purchasers, said he knew nothing of the Bulk Sales Act (Civ. Code 1912, § 2434), but knew affidavit had to be obtained; that he knew of no one of whom to inquire as to whether or not Boyer owed any debts, and said he did not feel it his business to so inquire. He further stated that he knew Boyer was in the butcher business; knew that Swift Co. and some others were in business of like character, but made no effort to inquire of any of them. Said he knew now that Boyer owed others in the city accounts varying in amount; that Whitton nor himself had any intention of defrauding anyone. Johnson employed attorney to draw bill of sale. Whitton said he was a stranger here and did not know any of the local meat traders. It is not disputed that the plaintiff in each case was owed by Boyer at the time of sale, and now, the amounts set forth in the respective complaints. The only issues in the case are those of law. The first involves a construction of the section in question, 2434 of the Code of 1912. What does the term merchandise or stock of merchandise, considering its relation to the context, include? A proper conclusion can only be determined by the application of the rules of construction. Generally, a statute in derogation of the common law must be strictly construed. Courts of other States have so held. 12 R.C.L. 525; Swift Co. v. Tempelos , 178 N.C. 487 , 101 S.E. 8 , 7 A.L.R. 1581, and note at page 1587. The Courts of Georgia have so held, and yet have concluded that the term merchandise included such articles as are commonly considered a merchant's trade fixtures., 25 L.R.A. (N.S.) 758. A construction of the letter should not be so strict as to contravene the spirit or reason for a law. Both are vital elements. The latter often will prevail over the former. Ham v. McClaws , 1 Bay, 93. As intimated by our Supreme Court in disposing of the petition for a rehearing in the case of Bank v. Huey Martin Drug Co. , 113 S.C. 333 , 102 S.E. 516 , in determining whether such a term is sufficiently comprehensive to include such fixtures, there must be kept in mind what the Legislature intended, in view of the general purpose of the statute and the evils which it was designed to prevent and remedy. This is in consonance with our former decisions. As was said in State v. Columbia, etc., Electric Co. , 100 S.E. 355 , at page 358, 112 S.C. 528 at page 538: The legislative intention must be gathered from the language of the statute — not that found in any particular section or proviso, but from the statute as a whole — and it must be read in the light of all the circumstances, the situation and relation of the parties, the subject of the grant, and the purpose to be attained. (Italics inserted). To a like effect is the following from State ex rel. Walker v. Sawyer , 104 S.C. 342 , at page 346, 88 S.E. 894 , at page 895: While it is an elementary rule of construction that words used in a statute should be given their plain and ordinary meaning, this, as all other rules, is subject to the prime object of ascertaining and giving effect to the legislative intention. In doing this, we are not to be governed by the apparent meaning of words found in one clause, sentence, or part of the Act, but by a consideration of the whole Act, read in the light of the conditions and circumstances as we may judicially know they appeared to the Legislature, and the purpose sought to be accomplished. The words of a statute are to be understood in the sense in which they best harmonize with the subject of the enactment and the object which the Legislature has in view. Their meaning is found, not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and in the object to be attained.' Endlich on Interpretation of Statutes, § 73. It has even been held, that regardless of how plain the meaning of words used in a statute may be, yet the Courts will not follow that meaning, if it is manifestly contrary to the intent of the Legislature, but will construe the statute so as to carry its intention into effect. Carter v. Barnes , (1910) 87 S.C. 102 , 68 S.E. 1054 . There can be no reasonable doubt, in applying these rules to the instant case, that the intent was to include in the terms at issue not only the articles daily bought and sold, but such as were necessary and naturally incidental to the proper conduct of such business, and kept on hand, though not regularly placed on sale, as for example, show cases, scales, refrigerators, desks, cash registers — chattels in their nature and themselves of a merchantable character. They can be merchandise or part of a stock of merchandise. They, or some of them, are used as essential factors in the ordinary course of trade in every business of buying and selling. To say that they should be differentiated as fixtures, would, generally speaking, be to assert that they were not chattels, but of the freehold, unless one assumes that the Legislature had in mind only the more modern and particular meaning, trade fixtures. The Court will not cause an interpretation to turn on an assumption alone. But rather will it assume, where two meanings are evident, that it was the intention to adopt that which would be most in conformity with the statute's manifest design and best calculated for the advancement of the object to be attained. And where the aim is broad, as here, so should be the interpretation. A most cogent circumstance arising out of the inquiry is: What is the dominant purpose of the statute? To protect what? Why, credit. Upon what, then, is credit usually extended in such cases? Why, naturally, upon those wares and articles within a store, generally used, or apparently so used, in the ordinary prosecution of that particular business. That must necessarily include what are commonly known now to both the Courts and the mercantile world as trade fixtures and would necessarily exclude, except probably in exceptional cases, mules and horses. Summerton Live Stock Co. v. Cleveland Mfg. Co. , (1920) 103 S.E. 516 , 114 S.C. 186 . To hold otherwise would be to leave unprotected, in many instances, as the case at bar amply verifies, much of the business world's credit, which there was an evident intention to protect, and thereby defeat to a large extent the true purpose of the statute. The decisions from other States, construing like enactments, are many so contradictory as to lead one to no satisfactory conclusion. See notes and cases in 2 L.R.A. (N.S.) 331; 25 L.R.A. (N.S.) 758; 34 L.R.A. (N.S.) 218 45 L.R.A. 492, 495. Out of the general confusion, however, there emerges, though of the minority, the broad but sound conclusion of Justice Evans in Cooney v. Sweat , supra, that, The word `merchandise' is, however, not to be taken in such a restricted sense as to exclude the usual and customary accessories of a mercantile or trading establishment when a sale in bulk is made of the whole. Thus, bar fixtures, safes, desks, cash registers, cigar cases, pool tables, refrigerators, and the like, used in connection with a business to which they are appropriate, in facilitating the operation of such business and the sale of the goods connected therewith, have been held to be included in the sale of the business, within the meaning of the Sales In Bulk Act. To like effect are Plass v. Morgan , 36 Wn. 160 , 78 P. 784 ; Sakelos v. Hutchinson Bros. , 129 Md. 300 , 99 A. 357 ; Seattle Brewing Co. v. Donofrio , 34 Wn. 18 , 74 P. 823 ; Tupper v. Barrett , 233 Mass. 565 , 124 N.E. 427 . See Hartwell v. Ins. Co. , 84 Me. 524 , 24 A. 954 . Each of these cases, it is true, must be determined largely by its own peculiar facts rather than by any fixed rule, as some of the decisions hold. But that is not to say that a Court cannot, within certain well-conceived limitations, lay down definite rules of guidance, keeping before it the statute, its purpose, and the rules of construction heretofore indicated. In the instant case, I am persuaded that the sale of the articles in bulk, as represented by the bill of sale, was within Section 2434; so was the sale of the meat and ice tickets. The next issue is: Was the statute complied with? The only attempt at compliance was by the purchaser in requiring the affidavit of the seller. But there was no inventory, stating the true value of the goods, made by the seller. Here, then, was not an attempt to comply with the requirements and a mere falling short in details, but separate and distinct provisions were utterly disregarded. And that is reasonably so, since the principal purchaser testified that he knew nothing in fact of the statute. It is, however, claimed that the purchaser lived up to the only requirement of him, since he obtained the affidavit. But that is not sufficient. He was presumed to know that there were other duties for the seller to perform and that, in the event there should be no attempt at compliance with any one of such duties, there would arise a conclusive presumption of fraud. If he, upon demand, could not obtain compliance on the part of the seller, then he bought in bulk at his risk. Such was the result in the instant case. Bank v. Huey , supra. The issue of fraud being conclusive against the purchasers, they cannot seek to avail themselves of the equitable right of subrogation. Whatever interest they obtained by paying off the mortgage, was legally tainted with fraud. Equity can extend no aid. Border State Lumber Co. v. Edwards , 103 S.C. 391 , 88 S.E. 537 . It is contended, however, if there is any fraud here, it can only be presumed, and that there must be actual bad faith before equity will refuse to extend aid. Finely spun distinctions between the two should find no favor in equity. Fraud is fraud. The means of arriving at it cannot alter its character. The Court must presume the Legislature had good reasons for placing the badge of same upon certain Acts or ommissions and that it intended no difference between that fraud and any other. It is therefore ordered, adjudged, and decreed that the plaintiff Enoch Smith have judgment against the defendant, J.E. Boyer, E.A. Johnson, and J.M. Whitton for the sum of $241.19 and the costs of this action; also that the plaintiff B.M. Dent likewise have judgment against the said defendants for the sum of $123.22 and the costs of this action, with the right on the part of either or both plaintiffs to move before this Court for such further orders, if any be necessary, as may be requisite for protecting their rights, under the statute in question.

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Supreme Court of South Carolina

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112 S.E 71