{ "id": 2588314, "name": "Continental Casualty Company, Plaintiff-Appellant, v. Burlington Truck Lines, Inc., Defendant-Appellee", "name_abbreviation": "Continental Casualty Co. v. Burlington Truck Lines, Inc.", "decision_date": "1966-05-10", "docket_number": "Gen. No. 50,961", "first_page": "405", "last_page": "409", "citations": [ { "type": "official", "cite": "70 Ill. App. 2d 405" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "197 Ill App 460", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5378777 ], "opinion_index": 0, "case_paths": [ "/ill-app/197/0460-01" ] }, { "cite": "194 Ill App 149", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 2879193 ], "opinion_index": 0, "case_paths": [ "/ill-app/194/0149-01" ] }, { "cite": "225 Ill App 201", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5471834 ], "opinion_index": 0, "case_paths": [ "/ill-app/225/0201-01" ] }, { "cite": "239 Ill App 442", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3122749 ], "opinion_index": 0, "case_paths": [ "/ill-app/239/0442-01" ] }, { "cite": "35 NE2d 815", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "311 Ill App 263", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3379983 ], "opinion_index": 0, "case_paths": [ "/ill-app/311/0263-01" ] }, { "cite": "9 NE2d 53", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "366 Ill 366", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2578809 ], "opinion_index": 0, "case_paths": [ "/ill/366/0366-01" ] }, { "cite": "258 Ill App 168", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5607923 ], "pin_cites": [ { "page": "176" } ], "opinion_index": 0, "case_paths": [ "/ill-app/258/0168-01" ] }, { "cite": "60 NE2d 641", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "325 Ill App 693", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 4949280 ], "opinion_index": 0, "case_paths": [ "/ill-app/325/0693-01" ] } ], "analysis": { "cardinality": 427, "char_count": 6810, "ocr_confidence": 0.588, "pagerank": { "raw": 7.882156818165728e-08, "percentile": 0.4601221924521468 }, "sha256": "e3371685d1cca470fabc1ed2c9eb60e3729f126d9f54507853242ea2c8c9b1a4", "simhash": "1:efd98fcca27d3c09", "word_count": 1150 }, "last_updated": "2023-07-14T17:04:07.437496+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "BRYANT, P. J. and LYONS, J., concur." ], "parties": [ "Continental Casualty Company, Plaintiff-Appellant, v. Burlington Truck Lines, Inc., Defendant-Appellee." ], "opinions": [ { "text": "MR. JUSTICE BURKE\ndelivered the opinion of the court.\nThis appeal is taken from a judgment for defendant. Plaintiff executed a miscellaneous bond to the State of Illinois guaranteeing the remission of C.O.D. payments collected by Filbey Freight Lines, Inc., from the consignees of Filbey\u2019s customers. Filbey failed to remit collections of $1,000 to its customers, thereby requiring payment by plaintiff of that amount to the unpaid customers. Plaintiff, as subrogee, seeks to recover from Burlington Truck Lines, Inc., the $1,000 paid by plaintiff under its bond obligation.\nPrior to January 27, 1959, Filbey was insolvent, its books showing liabilities in excess of assets in the amount of $25,330.90. In addition, there was a $27,271.-68 income tax liability to the Federal Government. On January 27, the Filbey board of directors and stockholders adopted a resolution accepting an offer by defendant, Burlington Truck Lines, Inc., to purchase Filbey\u2019s operating rights for $30,000. Filbey\u2019s treasurer, Philip Makin, was authorized to execute all necessary papers to effect the transfer. Makin was further authorized, as \u201ctrue and lawful attorney for this corporation,\u201d to sell or otherwise dispose of all Filbey\u2019s assets.\nThe operating rights were sold to defendant on February 24, 1959, by way of an escrow agreement under which the Internal Revenue Service acquired a first lien on the purchase price. Defendant received the Filbey Certificate of Public Convenience and Necessity, temporary operating rights pending approval of the transaction by the Illinois Commerce Commission for $500 per month which was to be credited against the purchase price, and a 5-year covenant by Filbey not to engage in the trucking business in the area encompassed by its Certificate of Public Convenience and Necessity. On November 10, 1960, the Attorney General of Illinois effected an involuntary dissolution of Filbey Freight Lines, Inc. It appears that the entire $30,000 in the escrow has been consumed by the federal taxes and the interest thereon, and that there are additional taxes due and owing the Federal Government from Filbey.\nPlaintiff filed suit directly against defendant on the ground that the parties to the sale of Filbey\u2019s operating rights did not comply with the notice provisions of the Illinois Bulk Sales Act and consequently the sale was fraudulent and void as to creditors. Ill Rev Stats 1959, c 121%, pars 78-80(a). Defendant admits no notice was sent to Filbey\u2019s creditors regarding the sale, but maintains that the sale of intangible assets does not fall within the Bulk Sales Act.\nThis matter arose prior to the effective date of the Illinois Commercial Code and is therefore governed by the Bulk Sales Act, which provides in part:\n\u201cThe sale, transfer, or assignment in bulk of the major part or the whole of a stock of merchandise, or merchandise and fixtures or other goods and chattels of the vendor\u2019s business, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the vendor\u2019s business is fraudulent and void as against the creditors of the vendor, unless the vendee shall . . . .\u201d Ill Rev Stats 1959, c 121%, par 78.\nWe are of the opinion that the sale of intangible assets is not covered by the Bulk Sales Act.\nThe Act applies to the sale in bulk of a major part or the whole of \u201ca stock of merchandise, or merchandise and fixtures or other goods and chattels of the vendor\u2019s business.\u201d No cases have been cited, or found, holding that the sale of intangible assets is covered by the Act. Plaintiff relies on the case of St. Paul-Mercury Indemnity Co. of St. Paul v. Hoey, 325 Ill App 693, 60 NE2d 641, as apparently standing for the proposition that the sale of intangible assets falls within the Bulk Sales Act. The Hoey case does not so hold, and plaintiff\u2019s citation to the headnote of that abstract opinion at 60 NE2d 641 is misleading. The court in the Hoey case was concerned with whether the sale of trucks constituted a \u201cmajor portion\u201d of the vendor\u2019s business, and expressly-stated, at page 3 of the opinion, that \u201calthough the certificate of authority to operate was included in the sale, we think the value thereof must be disregarded in determining whether the transaction falls within the provisions of the act. . . .\u201d The case of People ex rel. Nelson v. Sherrard State Bank, 258 Ill App 168, 176, on the other hand, expressly states that the Bulk Sales Act applies only to tangible property. Plaintiff maintains that the case of Continental Illinois Nat. Bank & Trust Co. of Chicago v. Peoples Trust & Savings Bank, 366 Ill 366, 9 NE2d 53, overruled the Sherrard case. The Continental case, however, deals solely with matters arising under the Illinois Constitution and the Banking Act, and in no way concerns itself with the question of whether the Bulk Sales Act covers intangible property.\nFurthermore, the Bulk Sales Act applies only to a sale of a \u201cmajor part or the whole of\u201d a vendor\u2019s assets. Zenith Radio Distributing Corp. v. Mateer, 311 Ill App 263, 35 NE2d 815. At the time of the sale of the operating rights to defendant, the value of Filbey\u2019s assets approximated $120,000; the operating rights were sold for the sum of $30,000, constituting only 25% of Filbey\u2019s total assets.\nFinally, it should be noted that a failure to comply with the provisions of the Bulk Sales Act gives no direct remedy by a vendor\u2019s creditors against the vendee, and does not make the vendee a debtor of the vendor\u2019s creditors. As stated in Grossfield & Roe Co. v. Zanni, 239 Ill App 442, at page 446:\n\u201cAlthough a sale may be fraudulent and void, as against creditors, by reason of the Bulk Sales Act, it does not follow that the vendee immediately becomes a direct debtor so as to be liable, for example, in assumpsit, to the creditor. The fact that the sale is void as to creditors by reason of the Bulk Sales Act may be taken advantage of in proper proceedings by the creditor (Ogden Ave. State Bank v. Cherry, 225 Ill App 201; Page v. Wright, 194 Ill App 149), but that fact may in no way be said to give rise to a new obligation on the part of the vendee directly to the creditor, that is, such an obligation as may be enforced by the creditor against the vendee in a suit at law. Chicago Specialty Shoe Co. v. Uhwat, 197 Ill App 460.\u201d\nEven if there were a failure here to comply with the Act, which there is not, plaintiff has no direct right of action against defendant.\nThe judgment is affirmed.\nJudgment affirmed.\nBRYANT, P. J. and LYONS, J., concur.", "type": "majority", "author": "MR. JUSTICE BURKE" } ], "attorneys": [ "Walter F. Cebelin and E. C. F. Meier, of Chicago, for appellant.", "Richard J. Schreiber, of Chicago, for appellee." ], "corrections": "", "head_matter": "Continental Casualty Company, Plaintiff-Appellant, v. Burlington Truck Lines, Inc., Defendant-Appellee.\nGen. No. 50,961.\nFirst District, Second Division.\nMay 10, 1966.\nWalter F. Cebelin and E. C. F. Meier, of Chicago, for appellant.\nRichard J. Schreiber, of Chicago, for appellee." }, "file_name": "0405-01", "first_page_order": 417, "last_page_order": 421 }