Winchester Packing Co. v. Moyer

Citations

• 106 Kan. 311
• 187 P. 680
• 1920 Kan. LEXIS 509

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>Stock op Merchandise — Sold in Violation of Bulk-Sales Aet — Mortgage Given by Purchaser — Rights of Creditors of Vendor. A merchant sold a stock of goods and fixtures when indebted over $4,000, the purchaser borrowing of a bank $2,000 to use in part payment of the purchase price, giving a chattel mortgage on the property in question. The bank recorded its mortgage a few weeks thereafter. A wholesale house, within two days after the sale, brought suit to reduce its claim of some $2,000 to judgment, and attached the property, the sale being restrained until the further order of the court. Some months after-wards the claim was reduced'to judgment and a levy made and the proceeds of the sale thereunder brought into court. The sale of the merchandise and fixtures was in utter disregard of the bulk-sales statute (Gen. Stat. 1915, §4894). The seller said that he owed no debts. Held, that the creditors of the seller had a right to look to the property for their debts, the sale being void as to them. Held, further, that the creditor proceeding by attachment and later by execution took itself out of the class of unsecured creditors. Held, further, that the bank, having taken the chattel mortgage, must yield to the secured claim of the other party, for the reason that a chattel mortgagor cannot pass any greater title than he has, and in this case having none at law could transfer none.</p>