Adler v. Zimmerman

• Decision Date: 31 May 1922
• Citation: Adler v. Zimmerman, 233 N.Y. 431 (N.Y. 1922)
• Court: New York Court of Appeals Court of Appeals
• Parties: LOUIS ADLER, Respondent, v. ERMA ZIMMERMAN et al., Appellants.

233 N.Y. 431

135 N.E. 840

ADLER

v.ZIMMERMAN et al.

Court of Appeals of New York.

May 31, 1922.

Action by Louis Adler against Erma Zimmerman and another. A judgment of the Trial Term rendered by the court after jury was waived was unanimously affirmed by Appellate Division (198 App. Div. 927,189 N. Y. Supp. 937), and defendants appeal by permission of the Court of Appeals.

Reversed, and complaint dismissed.Appeal from Supreme Court, Appellate Division, Second Department.

David Gorfinkel, of Yonkers (Abraham Benedict, of New York City, of counsel), for appellants.

Henry Kohl, of Newburgh, for respondent.

CRANE, J.

Louis Adler, the plaintiff, claims to have been an agent or broker for one Joseph Ryan in negotiating a sale to the defendants of 30 barrels of whisky which were delivered by truck at the defendants' place of business in Yonkers. The purchase price of this whisky was $25,200, of which $20,000 was paid in cash, $5,200 by check drawn upon the Westchester Trust Company to the order of cash by Zimmerman and Wormser.

Adler says this check was transferred to him by Ryan in payment of his services as broker in effecting the sale. Wormser says that Adler was the principal in the transaction, not an agent, and that the money and check were paid to him directly.

This action is brought upon the check. The trial court found that the check on the 8th day of April, 1920, was delivered to the plaintiff for value, presented for payment, and refused, and that the plaintiff was entitled to payment with interest and costs.

The trial justice was requested to find as follows:

‘IV. The vendor in said sale had no permit authorizing him under the provisions of the National Prohibition Act and the regulations made thereunder by the Commissioner of Internal Revenue, to sell the aforesaid whisky to the defendants.

‘V. Neither of the defendants had any permit or permits authorizing them or either of them to purchase the whisky sold to them as aforesaid on April 8, 1921, as required by the National Prohibition Act and the aforesaid regulations made thereunder.’

‘VII. The plaintiff is not a bona fide holder without notice of the check in suit.’

[1] These requests were refused and the defendants duly excepted. As the evidence to support these requests is uncontradicted, and the requests are not inconsistent with any findings made by the trial justice, the exceptions taken to the refusals to find present questions of law reviewable by this court. Mawhinney v. Millbrook Woolen Mills, 231 N. Y. 290, 297, 132 N. E. 93, 15 A. L. R. 1506.

These requests should have been granted. The facts stated therein, having been found, would have led the court to a different conclusion. The evidence is very brief, and, except upon the point as to the agency of the plaintiff, is uncontradicted.

The defendant Wormser had previously purchased whisky from Adler. This order for 30 more barrels was given on or about the 8th day of April, 1920. The goods were transported by truck from Peekskill to the defendants' place of business in Yonkers, where delivery was made to the defendants and consideration paid as above stated. There is no dispute about the nature of the transaction. It was a sale of whisky prohibited by the National Prohibition Law, unless coming within the exceptions for which permits can and should be issued. The plaintiff participated in the transaction either as principal or as agent. He knew that the check given him was part of the consideration for the sale of the whisky. Joseph Ryan, the alleged seller, had no permit to make the sale. The defendants had no permit to make the purchase. The plaintiff either knew that these parties were not authorized to traffic in liquors or else he did not know. His ignorance did not give validity to the check. Knowing that the check was part of the consideration for the sale of whisky under the National Prohibition Law, the burden was upon him when these facts appeared to show that the sale was authorized and legal; the burden was not upon the defendants to prove the permits. The National Prohibition Act of October 28, 1919 (41 Stat. 305) provided (title 2, § 3) as follows:

‘No person shall on or after the date when the Eighteenth Amendment to the Constitution of the United States goes into effect, manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor except as authorized in this act, and all the provisions of this act shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented.’

Section 6 of the same title provides:

‘No one shall manufacture, sell, purchase, transport, or prescribe any liquor without first obtaining a permit from the commissioner so to do’ (the exceptions contained in this section do not apply in this case) ‘All permits to manufacture, prescribe, sell, or transport liquor, may be issued for one year, and shall expire on the 31st day of December next succeeding the issuance thereof. * * * Provided further, that permits to purchase liquor for the purpose of manufacturing or selling as provided in this act shall not be in force to exceed ninety days from the day of issuance. A permit to purchase liquor for any other purpose shall not be in force to exceed thirty days. Permits to purchase liquor shall specify the quantity and kind to be purchased and the purpose for which it is to be used.’

The regulations adopted by the Commissioner of Internal Revenue pursuant to subdivision 7, § 1, tit. 2, of the act, provide for a method of procuring permits to purchase liquor by those authorized by permit to sell or use. Section 54 of the regulations reads as follows:

‘Any person entitled to procure intoxicating liquor in accordance with the provisions of these regulations must, in order to obtain such liquor, secure permit to purchase on form 1410 from the director, and no person is authorized to furnish or deliver intoxicating liquor except upon receipt of permit to purchase, unless otherwise specifically provided in these regulations.’

By section 55 it is required that each application for a permit to purchase shall show the name and address of the vendor, the purpose for which the intoxicating liquor is to be used, and the number of the permit held by the applicant.

Subdivision D of this section reads:

‘Applications for permit to purchase will be made in triplicate. * * * All copies will be forwarded to the director, who, if he finds the applicant entitled to procure intoxicating liquor and if the applicant's bond is sufficient, will approve all...