Walworth Co. v. Locke

LUMMUS, Justice. On November 5, 1937, the defendant corporation Locke, Stevens & Sanitas, Inc. sold in bulk all its stock of merchandise, otherwise than in the ordinary course of trade and the regular and usual prosecution of its business, to the other defendant, Locke, Stevens, Inc. Both corporations intended to comply with the statute respecting sales in bulk, G.L.(Ter.Ed.) c. 106, § 1, but they failed to comply with the requirement that they 'make a full, detailed inventory, showing the quantity and, so far as possible with the exercise of reasonable diligence, the cost price to the seller of each article to be included in the sale,' or the requirement that the written list of names and addresses of the creditors of the seller be certified by the seller on oath to be 'a full, accurate and complete list.' Either of these failures had the legal result of making the sale 'fraudulent and void as against the creditors of the seller.' For the meaning of these words, see Kelly-Buckley Co. v. Cohen, 195 Mass. 585, 588, 589, 81 N.E. 297; Rabalsky v. Levenson, 221 Mass. 289, 292, 108 N.E. 1050. On November 17, 1937, the plaintiff, a creditor of Locke, Stevens & Sanitas, Inc., brought this bill to establish its claim and to apply the stock of merchandise thereto. The final decree merely established the debt, ordered execution against Locke, Stevens & Sanitas, Inc., and declared the sale void as to the plaintiff. The plaintiff and the defendants appealed.