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(182 P.)

money, and yet it has been held that "in sales" | section 6072, L. O. L., we read: "Sold or conit "is frequently used as a term meaning the opposite of credit." Lee v. Cutrer, 96 Miss. 355, 366, 51 South. 808, 27 L. R. A. (N. S.) 315, Ann. Cas. 1912B, 478.

In

veyed." While there is judicial authority for holding that the language of the statute is sufficiently appropriate to include a pure barter, still we prefer to postpone the decision of that question until a case is presented requiring an adjudication of that question. However, we have no hesitancy in declaring that the statute applies, not only to sales for money, but also to sales for property measured in money or, in the words of the books, for the equivalent of money or money's worth. The stock of goods was invoiced at a fixed price in money; the furniture was measured in terms of money; and the prune orchard was valued in dollars. A price in money was placed upon every article of property involved in the transaction; and hence the Bulk Sales Law applied to the transfer of the stock of hardware.

[2] It is next argued that the Bulk Sales Law protects none but mercantile creditors. Sections 6069 and 6070 speak of "all of the creditors"; section 6071 refers to "all of his creditors"; and section 6070 emphasizes the requirements of the statute by declaring that a "purchase, sale, or transfer" made without compliance with the act shall be conclusively presumed fraudulent and void as to "any and all creditors." These words, to which attention has been directed, are plain, unequivocal, and unambiguous. They construe themselves. They comprehend all creditors. No distinction is made between classes of creditors. Galbraith v. Oklahoma State Bank, 36 Okl. 807, 130 Pac. 541; People's Savings Bank v. Van Allsburg, 165 Mich. 524, 131 N. W. 101; Eklund v. Hopkins, 36 Wash. 179, 78 Pac. 787; Joplin Supply Co. v. Smith, 182 Mo. App. 212, 167 S. W. 649, 654. Indeed, in one jurisdiction it has been held that a statute is unconstitutional if it attempts to protect mercantile creditors only. McKinster v. Sager, 163 Ind. 671, 72 N. E. 854, 68 L. R. A. 273, 106 Am. St. Rep. 268.

When examining this statute, we must read it in its entirety and construe the words found in it in the light of the manifest intent of the Legislature; and, when all the language of the act is so read and considered, it becomes plain that the lawmakers did not intend that the statute should be limited to a "sale" for "cash or on credit." The enactment opens by declaring that it shall be the duty of every person who shall "bargain for or purchase." The words "bargain for or purchase," and especially the word "purchase," are terms of broad signification. If the statute contained no other words than "for cash or on credit," then that language would probably limit what precedes it, and it would quite likely be necessary to hold that the act applied only to a "bargain" or "purchase" made "for cash or on credit"; but the statute does contain other words, some of which are coextensive in meaning with the words "sale" and "cash," while others are more comprehensive. section 6069, we read that the purchaser must demand and receive a written statement "before paying or delivering to the vendor any part of the purchase price or consideration therefor, or any promissory note or other evidence of indebtedness therefor." The same language, last quoted, appears a second time in section 6070. It will be observed that the disjunctive conjunction "or" is employed; that not only the word "paying," but also the word "delivering," is used; and that, in addition to the words "purchase price," the word "consideration" is employed. It is true that the language which has been quoted from sections 6069 and 6070 is stated a third time in section 6070, and in the third statement of it the word "consideration" is omitted. The words "purchase price," however, appear in each of the three statements, and those words, [3] The appellants argue that William H. if they stood alone, would be sufficient to in- Hartwig was not entitled to notice, for the clude sales for the equivalent of money as reason that the note did not become due until well as sales for money. 31 Cyc. 1171; 32 five years after date. This argument is comCyc. 1264. And when to the words "purchase pletely answered by the plainest kind of lanprice" is added the word "consideration," | guage appearing in the statute itself; for it and these words are always stated disjunc- is said in section 6069, L. O. L., that the writ tively, it becomes apparent that the legislative mind intended the statute to apply, not only to transactions involving the "paying" of "money" or the "delivering" of notes or other evidence of indebtedness, but also to the "delivering" of such "consideration" as is the equivalent of money. This conclusion is further supported by other language found in three of the four sections of the enactment; for nowhere in the enactment is the word "sale" found alone, but in every instance it appears in company with the word "transfer," and the two words are invariably stated in the alternative because the language is always thus: "Sale or transfer." Moreover, in

ten statement must show the amount of the indebtedness due or owing, or "to become due or owing." The statute is in favor of all creditors, and includes those whose demands are not yet due as well as those whose demands are overdue. Hillsboro National Bank v. Garbarino, 82 Or. 405, 411, 161 Pac. 703; Calkins v. Howard, 2 Cal. App. 233, 83 Pac. 280; 12 R. C. L. 492.

[4] The appellants insist with much vigor that the plaintiff is not entitled to the relief sought by him, even though it be decided that he was a creditor within the meaning of the statute. Section 6070, L. O. L., provides that any "purchase, sale, or transfer" made with

transferred from the debtor, not much difficulty is encountered by the creditor; for he may, if he wishes, sue the debtor, and attach the stock of goods in the hands of the fraudulent purchaser on the theory that as between the purchaser and the creditor the property still belongs to the debtor. Bank of Colfax v. Richardson, 34 Or. 518, 540, 54 Pac. 359, 75 Am. St. Rep. 664; 20 Cyc. 656, 661. This rule finds frequent illustration, not only in cases of common-law fraud, but also in cases of statutory fraud resulting from a failure to observe Bulk Sales Laws. Oregon Mill & Grain Co. v. Hyde, 87 Or. 163, 170, 169 Pac. 791; Owosso Carriage & Sleigh Co. v. McIntosh & Warren, 107 Tex. 307, 179 S. W. 257, L. R. A. 1916B, 970; Jaques & Tinsley Co. v. Carstarphen Co., 131 Ga. 1, 62 S. E. 82; Moultrie Grocery Co. v. Holmes-Hartsfield Co. (Ga. App.) 96 S. E. 346; Coffey v. McGahey, 181 Mich. 226, 148 N. W. 356, Ann. Cas. 1916C, 923.

out observing the requirements of the Bulk Sales Law shall, as to any and all creditors of the seller, "be conclusively presumed fraudu- | lent and void." Failure to comply with the statute results in a conclusive presumption of fraud; and the effect of this conclusive presumption is, not only to relieve the creditor from the necessity of proving actual fraud, but also to preclude the buyer from gainsaying the presumption. Goodwin v. Tuttle, 70 Or. 424, 432, 141 Pac. 1120; Galbraith v. Oklahoma State Bank, 36 Okl. 807, 130 Pac. 541; Calkins v. Howard, 2 Cal. App. 233, 83 Pac. 280; Joplin Supply Co. v. Smith, 182 Mo. App. 212, 167 S. W. 649, 654; Glantz v. Gardiner, 40 R. I. 297, 100 Atl. 913, L. R. A. 1917F, 226, 228. When a transfer of property is fraudulent as to the creditors of the seller, certain remedies are available to the creditors, and those remedies are made available because of the fraud. If fraud is the element which determines the right of the creditor to a rem-In many jurisdictions a common-law frauduedy, then on principle the same remedy which would afford relief against actual or commonlaw fraud should be equally available for relief against conclusively presumed or statutory fraud. It is true that moral turpitude is present in one instance and is absent in the other, and yet fraud is present in each instance; and it is the presence of this fraud that confers the right to relief and, as was said in Rothchild Bros. v. Trewella, 36 Wash. 679, 79 Pac. 480, 68 L. R. A. 281, 104 Am. St. Rep. 973:

"We can discover no logical distinction between the different classes of conveyances which the common and statutory law declare fraudulent. The remedy afforded an injured creditor must, upon principle, be the same in all cases, unless the Legislature has provided a different remedy."

If a transfer is fraudulent, it makes no difference whether it is common-law or statutory fraud; for in either event the general rule is that the creditor who has not reduced his claim to a judgment against the seller and debtor, or has not obtained a lien, cannot sue the purchaser directly, as on a personal liability. Rothchild Bros. v. Trewella, 36 Wash. 679, 79 Pac. 480, 68 L. R. A. 281, 104 Am. St. Rep. 973; Morton v. Denham, 39 Or. 227, 240, 64 Pac. 384; Rogers' Milling Co. v. Goff, etc., Co., 46 Okl. 339, 148 Pac. 1029; Bewley v. Sims (Tex. Civ. App.) 145 S. W. 1076; Goodwin v. Tuttle, 70 Or. 424, 430, 141 Pac. 1120; Joplin Supply Co. v. Smith, 182 Mo. App. 212, 167 S. W. 649, 654; 12 R. C. L. 645. However, Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S. W. 167, Ann. Cas. 1914B, 1101, seems to furnish authority for an exception to this general rule if the purchaser has disposed of the goods or so intermingled them with other property as to render them indisLinguishable.

If the fraudulent grantee still has in his possession the identical property which was

lent transferee may be held to the liability of a garnishee or trustee on account of the property so conveyed, or the proceeds if he has disposed of the same. 20 Cyc. 663; Sabin v. Michell, 27 Or. 66, 39 Pac. 635. Difficulties at once arise, however, when it is ascertained that the fraudulent grantee has disposed of the property which was transferred from the debtor. Although in cases of common-law fraud a creditor who has reduced his claim to judgment usually can avail himself of some sort of remedy, the adjudications do not entirely agree upon the procedure to be followed by the creditor. 12 R. C. L. 646; 20 Cyc.

262.

As between the creditor and the purchaser, the transfer of a stock of goods in bulk is fraudulent and void; the goods are treated as the property of the debtor; and therefore the goods are regarded as a trust fund in the hands of the purchaser and he is viewed as a trustee for the benefit of the creditors. If the purchaser disposes of that trust fund, then it is entirely logical to say that he holds the proceeds as a trust fund, and that the creditors may reach those proceeds to the same extent that they could have reached the fund before a change in its form was effected. The following authorities give support to this rule: Fitz Henry v. Munter, 33 Wash. 629, 634, 74 Pac. 1003; Kohn v. Fishbach, 36 Wash. 69, 78 Pac. 199, 104 Am. St. Rep. 941, L. R. A. 1917F, 234; In re Gaskill (D. C.) 130 Fed. 235, 236; In re Connor (D. C.) 146 Fed. 998; Jaques & Tinsley Co. v. Carstarphen Co., 131 Ga. 1, 62 S. E. 82; Moultrie Grocery Co. v. Holmes-Hartsfield Co. (Ga. App.) 96 S. E. 346; Coffey v. McGahey, 181 Mich. 225, 148 N. W. 356, Ann. Cas. 1916C, 923, 925: FecheimerKeiffer Co. v. Burton, 128 Tenn. 682, 164 S. W. 1179, 51 L. R. A. (N. S.) 343, 345; Oregon Mill & Grain Co. v. Hyde, 87 Or. 163, 170, 169 Pac.

791.

William H. Hartwig reduced his claim to a judgment before he began his suit. and

(182 P.)

that fact, plus the fact that George Hartwig | the agreed price for them. In the motion it is insolvent and utterly without assets, enti- is insisted that by the judgment the appeltled William H. Hartwig to avail himself of lant is compelled to pay for cement sacks an equitable remedy. Fleischner v. First Na- which were not used in the construction of tional Bank, 36 Or. 553, 563, 54 Pac. SS4, 60 the building, and cannot be the subject of Pac. 603, 61 Pac. 345; Bowman v. Sherrill, a lien. 59 Or. 603, 604, 117 Pac. 1122.

Johnie Gertrude Rushing took title to the three lots in Cherrydale addition with knowledge of the circumstances surrounding the transfer of the hardware store; the conveyance to Johnie Gertrude Rushing and the transfer to the daughter, Maxine C. Rushing, were voluntary conveyances without consideration; and therefore each of those grantees stands in the shoes of C. C. Rushing. Porter v. O'Donovan, 65 Or. 1, 10, 130 Pac. 393; 20 Cyc. 627, 646, 650.

The three lots in Cherrydale addition and

the one lot in Overlook addition are the equiv

alent of the hardware store. The stock of

goods was transmuted into land consisting of the four lots. The record title to those lots was never in the name of C. C. Rushing, although the paper title is now in the name of persons standing in the shoes of C. C. Rushing, and in these circumstances the plaintiff was clearly entitled to resort to a suit in equity. 20 Cyc. 676; Jimmerson v. Duncan, 48 N. C. 537; Wright v. Douglass, 3 Barb. (N. Y.) 554; Maynard v. Hoskins, 9 Mich. 485; Webster v. Folsom, 58 Me. 230.

Additional problems would be presented for solution if the purchase price had been less than the total indebtedness of George Hartwig; but none of the questions which might arise out of that and kindred situations are involved here.

In an attempt to briefly analyze his contention, counsel states a suppositive case, as follows:

sold to the contractor a carload of lumber worth "Suppose the Aitken Lumber Company had $5,000 and a horse worth $1,148.32, and had rendered a bill to the contractor for $6,148.32. Admitting that the lumber was lienable and the surety company liable for this item, is the horse also subject to a lien because it is contained in the same account?"

Counsel's "horse" case perfectly illustrates his contention, as we understood it, from the briefs and oral argument; but, in order to make it a "bay horse" case, or at all analogous, it should contain the further statement that,, before the action was brought against the surety company, the contractor returned the horse to the lumber company, and was given credit on his account for $1,148.32, so that the balance of the account represented exactly the purchase price of the material actually used in the construction of the building.

For the reason that the exact situation was

so obvious, it was not thought necessary in the former opinion to refer to two decisions, cited by appellant in the original brief and again relied upon in this motion, and which it is urged define the utmost limit to which courts will go in allowing liens for material employed in construction work, but which does not constitute part of the permanent

The decree appealed from is affirmed. MCBRIDE, C. J., and BENSON and BUR-structure. One of the cases involved lumber NETT, JJ., concur.

(105 Kan. 193)

used in making forms for a concrete structure, the lumber being largely consumed and rendered valueless by such use, and for that reason it was held to constitute material

AITKEN LUMBER CO. v. KANSAS CASU-used in the construction of the building. ALTY & SURETY CO. (No. 21967.)

(Supreme Court of Kansas. July 5, 1919.)
Appeal from District Court, Barton County.
On motion for rehearing. Motion denied.
For former opinion, see 181 Pac. 563.

Lumber Co. v. Douglas, S9 Kan. 308, 131 Pac. 563, 44 L. R. A. (N. S.) 843. In Supply Co. v. Surety Co., 103 Kan. 125, 175 Pac. 108, steel sheet piling, largely consumed in the construction of a bridge, was held to be material within the Mechanics' Lien Act, except as to so much of the piling as was used PORTER, J. In a motion for rehearing, again in other construction work. In both which for the most part reargues the same cases the question was whether or not the contentions made at the former hearing, material was "used" in the sense of being counsel for the appellant surety company substantially consumed in the work of concalls attention again to certain decisions struction. No question involved in those dewhich were not mentioned in the former cisions is pertinent to the decision in the opinion. It is said that the surety company present case, and they were not mentioned undertook to pay all claims for material in the former opinion because in this case which might become the basis for a lien; that the action was upon an account containing many items, the correctness of all but three being admitted. The contested items covered cement sacks which were returned to the materialman, who paid the contractor

the lumber company made no claim for the cost of the cement sacks, and the judgment does not oblige the surety company to pay for them.

Rehearing denied.

All the Justices concurring.

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(105 Kan. 191)

GATES et al. v. LITTLE FAY OIL CO.

(No. 21965.)

allowed the dismissal need not be passed upon, and therefore no mention of the matter was made in the opinion. The torpedo

(Supreme Court of Kansas. July 5, 1919.) company now urges that the question should

(Syllabus by the Court.)

1. CONTRACTS-323(1)—DRILLING OIL WELL -NEGLIGENCE-QUESTION for Jury.

The evidence held to require an issue of negugence to be submitted to the jury.

2. APPEAL AND ERROR 843 (2) — ASSIGNMENT OF ERROR-CONSIDERATION.

The situation is held not to require an as

be determined. We still think such action unnecessary, especially when the present request for it comes only from an appellee, The motion for a rehearing is denied. All the Justices concurring.

(105 Kan. 311)

signment of error, made by the appellants, to be ST. PAUL FIRE & MARINE INS. CO. v. passed on at the instance of an appellee.

Appeal from District Court, Allen County. On motion for rehearing. Motion denied. For former opinion, see 181 Pac. 570.

MASON, J. The plaintiffs sued the defendants for their services in drilling an oil well. The defendants answered, claiming damages on account of negligence of the plaintiffs in causing a wire to be dropped into the well, rendering it useless. The case was tried upon the charges of the defendants against the plaintiffs, and also against the Independent Torpedo Company, which had been made a party on the defendants' application. Demurrers to the evidence of the defendants were sustained, but on appeal a reversal was ordered.

[1] 1. The Independent Torpedo Company has filed a motion for a rehearing, one ground of which is that this court did not pass specifically upon the question whether the evidence tended to establish the claim against it. As stated in the opinion, the defendants charged the torpedo company with negligence in respect to the manner in which it attempted to recover the wire after it had fallen into the well. A witness testified that the "shooter," who was in the employ of the torpedo company, conducted, or assisted in conducting, this operation; that over the protest of the witness he so managed it that the wire was broken, and only the upper part could be recovered; that the method employed was an improper one. This we regard as sufficient to take to the jury this feature of the case. It is not necessary to determine whether the evidence required any other basis of liability to be submitted.

[2] 2. One of the rulings complained of by the original defendants on their appeal was that the trial court erred in refusing to allow them to dismiss their action as against the torpedo company. The application for such leave was apparently brought about by the questions raised by the demurrers to the evidence. This court thought that the reversal so changed the situation that the question whether the trial court should have

BIGGER. (No. 22279.)

(Supreme Court of Kansas. July 5, 1919.)

(Syllabus by the Court.)

1. INSURANCE 83(2)—AGENT'S FAILURE TO CANCEL POLICY AS DIRECTED-LIABILITY.

The rule announced in Insurance Co. v. Bigger, 102 Kan. 53, 169 Pac. 213, syl., is followed, that-"When instructed to do so, it is the duty of an insurance agent to cancel a policy of insurance issued by him; and if he cipal for the damage sustained by the principal fails to cancel the policy he is liable to his prinunless the agent can show some valid reason for his failure to follow the instructions given him."

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WEST, J. The plaintiff sued to recover damages for the failure of its agent to cancel an insurance policy as directed. The facts are stated in Insurance Co. v. Bigger, 102 Kan. 53, 169 Pac. 213.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(182 P.)

After the former decision, the answer was amended setting up contributory negligence and assumption of risk. The plaintiff requested an instruction directing a verdict in its favor which was refused, and the jury were charged that, if they found from the evidence that the defendant did not exercise reasonable care and diligence to cancel the policy after the plaintiff notified it to do so, it constituted negligence which would entitle the plaintiff to a verdict for the loss, if any, suffered by it as a direct and natural result if the policy remained uncanceled"unless you further find from a preponderance of the evidence that the plaintiff by its officers or agents was guilty of negligence in failing to exercise reasonable care and diligence to cancel or procure the cancellation of said policy after they knew, or should have known, by the exercise of reasonable care and diligence, that the defendant had failed to cancel said policy, and that such negligence directly contributed in causing the plaintiff to suffer the loss complained of in its petition, in which event you will find for the defendant."

The defendant prevailed, and the plaintiff appeals.

[1, 2] The petition declares on the failure to cancel as directed without any allegation of negligence whatever. In the former presentation, an attempt was made to introduce the element of waiver on the theory that, if the plaintiff failed to take the proper steps to have the policy canceled, but elected to allow it to continue in force and failed to exercise its right to cancel, it could not recover, and the court so instructed. But it was said in the opinion that there was no evidence on which such an instruction could be properly submitted.

"The plaintiff's direction to the defendant to cancel the policy was positive and unambiguous. It was the defendant's duty to obey his instructions." 102 Kan, 55, 169 Pac. 214.

The doctrine of contributory negligence in the amended answer was sought to be interposed by alleging that, after the notification to the defendant to cancel, the plaintiff knew for more than six weeks, or should have known, that the policy had not been canceled.

"And during the whole period of such time the plaintiff itself, either directly through its chief officers or managers or through some of its agents other than the defendant, could have by the exercise of reasonable care canceled such policy before the time of the alleged fire; yet the plaintiff negligently failed so to do, and such negligence on the part of the plaintiff caused and directly contributed to the plaintiff's alleged injury and damage."

Contributory negligence on the part of the plaintiff necessarily involves negligence of the defendant. In this case no negligence is charged against the defendant, and the claim

of contributory negligence on the part of the plaintiff is somewhat anomalous.

The law was declared in the former opinion to the effect that it was the duty of the defendant agent to obey the instructions of his principal and cancel the policy, and that his failure so to do rendered him liable, and is sustained by numerous authorities and still regarded by us as sound in principle. In addition to the authorities cited in the former opinion, the following may be noted:

"So if the agent is directed by the company to cancel a policy and neglects to do so, and there has been a loss, he is liable to the company for the amount which the company has had to pay on such loss, notwithstanding contributory negligence of the company in failing to cancel the policy itself." 22 Cyc. 143S.

In support of the last clause quoted, the text cites London Assur. Corp. v. Russell, 1 Pa. Super. Ct. 320. One paragraph of the syllabus of that opinion is as follows:

"An agent is bound to obey the imperative order of his principal, and, in order to make it the duty of a factor to so obey the order, it is not necessary that it be couched in the form of a command. One who receives orders to cancel an insurance policy delays their execution at his peril."

Another paragraph is as follows:

"Where an insurance company has directed its agent to cancel a policy, it is not guilty of contributory negligence if it fails to act outside of said agent and cancel said policy itself. The company had a right to rely on its agent's obedience to positive directions to cancel, and presume that they would be obeyed; the disobedience of the agent being at his peril."

In Kraber v. Insurance Co., 129 Pa. 8, syl. 1, 18 Atl. 491, the law was thus declared:

"An agent has no legal right to sit in judgment upon the wisdom or expediency of the instructions of his principal, and his failure to execute them with reasonable promptness and fidelity will render him liable to his principal in damages."

At the close of the opinion the court said: "The fact that the company received the premium from its agent, after the fire, and after the fact of his failure to cancel the policy came to its knowledge, does not relieve him. His receipt of the premium was the receipt of the company. When he was directed to return the money and cancel the policy, he did not do it. His failure to do as he was directed is the ground of his liability, and the loss suffered by his principal furnishes the proper measure of damages." 129 Pa. 14, 18 Atl. 493.

The authorities chiefly relied upon by the defendant are: Sioux City, etc., R. Co. v. Walker, 49 Iowa, 273; Moore v. Coler, 114 App. Div. 301, 99 N. Y. Supp. 846; Brant v. Gallup et al., 111 Ill. 487, 53 Am. Rep. 638; Read v. Patterson, 11 Lea (Tenn.) 430; American Central Ins. Co. v. Hagerty, 92 Hun, 26, 36 N. Y. Supp. 558.

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