Opinion
Docket No. 78-4966.
Decided November 7, 1979.
Kahn, Kollin Mandel, for plaintiff.
Bassey, Selesko, Couzens Murphy, P.C. (by Joseph Falcone), for Madi's Red Barn West, Inc.
Before: J.H. GILLIS, P.J., and R.B. BURNS and N.J. KAUFMAN, JJ.
By an order of May 31, 1978, Judge Christopher C. Brown of the 50th Judicial District held that assets purchased by garnishee defendant from the principal defendant were subject to levy and execution to satisfy plaintiff's judgment against the principal defendant. The reason assigned was failure to comply with the bulk transfer provisions of the UCC. The amount of liability was set at $1,816.86.
On August 28, 1978, the district court order was affirmed by Judge James S. Thorburn of the Oakland County Circuit. Garnishee defendant was granted leave to appeal on February 23, 1979.
The parties are in agreement as to the facts here. The only question before us is whether the sale of a restaurant is subject to the bulk transfer provisions of the Michigan Uniform Commercial Code.
This issue was addressed by the drafter of the code in Official Comment 2 to 6-102 as follows:
"2. The businesses covered are defined in subsection (3). Notice that they do not include farming nor contracting nor professional services, nor such things as cleaning shops, barber shops, pool halls, hotels, restaurants, and the like whose principal business is the sale not of merchandise but of services. While some bulk sales risk exists in the excluded businesses, they have in common the fact that unsecured credit is not commonly extended on the faith of a stock of merchandise."
In accord with this is the great majority of decisions from other jurisdictions. Levy v Paul, 207 Va. 100; 147 S.E.2d 722; 3 UCC Rep 412 (1966), Nichols v Acers Co, 415 S.W.2d 683; 4 UCC Rep 591 (Tex Civ App, 1967), Silco Automatic Vending Co, Inc v Howells, 102 N.J. Super. 243; 245 A.2d 765; 5 UCC Rep 625 (Ch Div 1968), affirmed 105 N.J. Super. 511; 253 A.2d 480; 6 UCC Rep 531 (1969), Kane-Miller Corp v Tip Tree Corp, 303 N.Y.S.2d 273; 6 UCC Rep 721 (1969), De La Rosa v Tropical Sandwiches, Inc, 298 So.2d 471; 15 UCC Rep 595 (Fla App, 1974), Uarco, Inc v Peoples Bank Trust Co of St Bernard, 414 F. Supp. 1219 (ED La, 1976).
Finally, Michigan Packing Co v Messaris, 257 Mich. 422; 241 N.W. 236 (1932), the case relied upon by the plaintiff-appellee and, presumably, by the lower courts, is inapposite. That case construed 1929 bulk sales and bulk mortgage laws which covered "stock of merchandise or merchandise and fixtures". The sale of the restaurant fixtures in Michigan Packing Co was found to fit the laws which at that time included "fixtures". However, the UCC, adopted after the Michigan Packing Co case, does not include fixtures, but only "materials, supplies, merchandise, or other inventory * * *". MCL 440.6102(1); MSA 19.6102(1).
Reversed.