In re Fisher

• Decision Date: 06 November 1899
• Docket Number: 203.
• Parties: In re FISHER (two cases).
• Court: U.S. District Court — District of Massachusetts

98 F. 89

In re FISHER (two cases).

No. 203.

United States District Court, D. Massachusetts.

November 6, 1899

Addison C. Burnham, for trustee in bankruptcy.

Brandeis Dunbar & Nutter and Edward F. McClennan, for bankrupt.

George A. Blaney, for George F. Chapin.

Joseph W. Lund, trustee in bankruptcy of Rollin B. Fisher.

LOWELL District Judge.

On May 1, 1898, a liquor license for the term of one year was issued by the board of police of the city of Boston to Ida C. Fisher and Rollin B. Fisher. The license fee was paid out of money advanced as a loan to Ida C. Fisher. The license was indorsed as follows:

'This license was paid for by money advanced for same by George F. Chapin, and for which we pledge it for collateral security, and ask commissioners to acknowledge same.'

Rollin B. Fisher's name was added in said license, in accordance with a custom prevailing in Boston, to prevent a lapse in case of the death of Ida C. Fisher, but he testified before the referee that he had no personal interest in the license. The referee found that:

'Liquor licenses are issued by the city of Boston to a limited number only, and are much in demand. They are transferable only with the assent of the board of policy commissioners and then only in the following manner: There is a usage and practice by which a license may be surrendered, and a new license issued to another in the place thereof, as follows: The man that desires to go into business files an application describing the locality, and who the persons are that propose to engage in business; and if they are satisfactory, and there is no legal objection to the place where they propose to engage in business, and there will be a vacancy caused in the list of licenses ordinarily granted, the board agrees to one license being surrendered for the purpose of being canceled, and in place of it another is issued to the new firm or persons applying for it. The surrender is ordinarily by a simple form of indorsement, addressed to the board of police, stating, 'The undersigned hereby surrenders his license for the purpose of having it canceled,' and signed by one or more of the licensees, binding the firm to that agreement. There is a recognized value of from $4,000 to $5,000 which attaches to a license for the purpose of such transfer, and such sum can be obtained in the liquor trade for the surrender of a license in favor of another, conditional upon the purchaser proving satisfactory to the board of police commissioners as a licensee. ' 'There was evidence submitted that the commissioners refused to transfer a license, or allow a sale to be made from one person to another, until the one making the transfer had been free of debt,-- in other words, 'go out of business honorably' and 'without fraud of his creditors, or anything of that sort.' No evidence was submitted as to what the action of the commissioners would be in case of a surrender under an order of court by a bankrupt of his license, for the benefit of the creditors of the bankrupt, and there was no evidence that such a case had come before the board prior to the filing of the petition in this case.'

Since May 1, 1899, the board of police commissioners have taken the following action concerning transfers of liquor licenses and licenses of bankrupts:

'The board of police, in judging of the fitness or unfitness of applicants for a liquor license, will first consider applicants named by a retiring solvent licensee who has provided for his creditors, and who has conducted the business in the spirit as well as the letter of the law. In case such licensee, or one of several licensees, is adjudged a voluntary or involuntary bankrupt, the board, at the termination of such license, will give prior consideration to applicants (if any) named by the trustee in bankruptcy.'

Ida C. Fisher and Rollin B. Fisher were both adjudged bankrupt upon their several voluntary petitions, filed October 19, 1898, and September 14, 1898, respectively.

The petition originally filed by Cushman, the bankrupt's trustee in Re Ida C. Fisher, sought (1) to compel the bankrupt so to indorse the liquor license that the trustee might realize its value for the benefit of her creditors; and (2) to compel Rollin B. Fisher, in whose name, jointly with that of the bankrupt, the license was issued, to make a similar indorsement, on the ground that the whole beneficial interest in the license was in the bankrupt. Both the bankrupt and Rollin B. Fisher demurred (the papers filed were styled 'demurrers ') to the petition for want of jurisdiction, and for other reasons. The referee overruled the demurrers, and made a decree requiring both the bankrupt and Rollin B. Fisher to make the indorsements prayed for in the petition. After a hearing before me on review, I expressed informally the opinion that the referee's decree must be affirmed as to the bankrupt, for the following reasons: Common sense, justice, and the decided cases require that the considerable sum of money which, as it appears, can be obtained as the result of certain acts of the bankrupt in dealing with the license, shall be applied for the benefit of her creditors. It is impossible to improve the statement of Judge Choate in Re Ketchum (D.C.) 1 Fed. 840, concerning a right or privilege in many respects similar to this:

'The seat, however, has an actual pecuniary value, which the rules of the society, as interpreted and applied in practice, permit the holder to realize by a sale and transfer. There is no practical difficulty in effecting a transfer of this right or interest for a pecuniary consideration, subject to the condition that the debts of the present holder to members are first paid; and the right or privilege is, to all intents and purposes, a business right or privilege, useful

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