Duff v. Trenton Beverage Co.

• Decision Date: 22 May 1950
• Docket Number: No. A--121,A--121
• Citation: 4 N.J. 595,73 A.2d 578
• Parties: DUFF v. TRENTON BEVERAGE CO.
• Court: New Jersey Supreme Court

Page 595

4 N.J. 595

73 A.2d 578

DUFF v. TRENTON BEVERAGE CO.

No. A--121.

Supreme Court of New Jersey.

Argued April 17, 1950.

Decided May 22, 1950.

David Stoffer, Newark, argued the cause for appellant (Joseph M. Jacobs, Newark, on the brief; Stoffer & Jacobs, Newark, attorneys).

Nathan Duff, Perth Amboy, argued the cause for respondent.

The opinion of the court was delivered by

HEHER, J.

The question at issue here is the existence and legal sufficiency of an oral contract of sale by defendant to plaintiff of 118 cases of Ron Rico rum. Plaintiff was awarded damages for non-delivery of the merchandise. The Appellate Division of the Superior Court affirmed the judgment; and we certified the cause for appeal on the petition of defendant.

Plaintiff held a plenary retail consumption liquor license and defendant a plenary wholesale liquor license issued by the respective local and State authorities under the State Alcoholic Beverage Control Act. R.S. 33:1--1, et seq., N.J.S.A. The subject matter of the contract of sale, so it is alleged, consisted of 32 cases of Siboney rum and 118 cases of Ron Rico rum, all sold at the price of $22.50 per case. Plaintiff's proofs tended to show that the contract was made March 1st, 1948. On March 17th following, the stated quantity of Siboney rum was delivered, and shortly thereafter payment was made at the stipulated rate. The complaint alleges that on the ensuing May 17th defendant refused plaintiff's demand for delivery 'of the balance of the merchandise purchased,' and that injury resulted to plaintiff. The answer admitted the executed sale of the Siboney rum, but denied the making of a contract for the sale of Ron Rico rum. The Statute of Frauds was pleaded; and at the pretrial conference the answer was amended to allege that the 'agreement of sale' was in violation of Regulation 34 of the Division of Alcoholic Beverage Control, providing that no manufacturer or wholesaler shall sell to a retailer 'any alcoholic beverage other than malt beverages except at the wholesale price established in accordance with rules one and two' thereof, less the allowable discount. It was stipulated that, at the date of the alleged contract, the established price of Ron Rico rum was $43.04 per case.

The denial of defendant's motion for judgment is assigned for error.

Although of the view that the whole agreement was concluded in one 'conversation' between plaintiff and defendant's president, the trial judge submitted to the jury the question of whether there were two separate and independent contracts, with the instruction that, if there were two contracts, 'the second would have to be in writing,' and if there was but one contract, there was part performance which would rule out the plea of the Statute of Frauds. R.S. 46:30--10, N.J.S.A. The Appellate Division was also of the view that the validity of this defense depended upon whether 'the contract was made at one and the same time or whether it consisted of two separate independent agreements,' (68 A.2d 874, 875) and that the proofs in that regard raised an issue of fact for the jury. As to Regulation 34 of the Division of Alcoholic Beverage Control, the Appellate Division deemed it incumbent upon the defendant under the contract found by the jury to seek the consent of the administrative authority to the sale of the Ron Rico rum at less than the established price, and, not having done so, the motion for judgment on this ground was not maintainable. In a word, the court concluded that the contract found by the jury did not have the taint of illegality; that the 'issuance of the necessary permit to defendant was not an impossibility, as is evidenced by the authorization of the sale' of the Siboney rum; and that the 'defense of legal impossibility' is not available to excuse defendant's 'nonperformance as long as it was within' its 'power to remove that obstacle to performance, in the absence of a showing of a Bona fide attempt or effort to perform.' The principle invoked was that one who 'agrees to do an act should do it, unless absolutely impossible,' applied in School Trustees of Trenton v. Bennett, 27 N.J.L. 513, 72 Am.Dec. 373 (1859).

It is the insistence of plaintiff that a contract for the sale of intoxicating liquor at less than the price established under Regulation 34 of the administrative agency does not constitute an illegal bargain, if conditioned on the approval of that authority, and that it is to be presumed, in the absence of evidence Contra, that if defendant had made application to the authority, the permit would have been granted. On this hypothesis, it is urged that defendant here is answerable in damages as if the condition were met.

The Alcoholic Beverage Law was enacted in 1933. Pamph.L. p. 1180, ch. 436, R.S. 33:1--1 et seq., N.J.S.A. Thereby, a State Department of Alcoholic Beverage Control was established for the supervision, by a commissioner designated as its chief executive, of 'the manufacture, distribution and sale of alcoholic beverages in such a manner as to promote temperance and eliminate the racketeer and bootlegger.' Section 3, R.S. 33:1--3, N.J.S.A. The commissioner was authorized and empowered, Inter alia, to 'make such general rules and regulations and such special rulings and findings as may be necessary for the proper regulation and control of the manufacture, sale and distribution of alcoholic beverages and the enforcement' of the act, 'in addition thereto, and not inconsistent therewith,' and to 'alter, amend, repeal and publish the same from time to time.' Section 36, as amended by ch. 154 of the Laws of 1943, N.J.S.A. 33:1--39. By a supplement adopted in 1939 (Pamph.L. p. 174, ch. 87, N.J.S.A. 33:1--89 et seq.), it was made 'unlawful for any manufacturer, wholesaler, or other person privileged to sell to retailers to discriminate in price, directly or indirectly, between different retailers purchasing alcoholic beverages other than malt beverages bearing the same brand or trade name and of like age and quality.' Section 1. To the same end, discrimination in granting discounts, rebates, free goods, allowances or inducements, was forbidden. Section 2, R.S. 33:1--90, N.J.S.A. Violation of the act was made punishable by fine or imprisonment, or both. Section 4, R.S. 33:1--92, N.J.S.A. And the Commissioner was empowered to promulgate such rules and regulations 'as will assist in properly supervising the liquor industry and promoting temperance,' in relation to (a) maximum discounts, rebates, free goods, allowances and other inducements to retailers by manufacturers, wholesalers and other persons privileged to sell to retailers; (b) gifts and deliveries of money, products and other things of value by manufacturers, wholesalers, (or) other persons privileged to sell to retailers, directly or indirectly through stockholders, directors, officers or employees; (c) maintenance and publication of invoice prices, discounts, rebates, free goods, allowances and other inducements; and (d) such other matters as may be necessary to fulfill the restrictions embodied in the act. Section 5, R.S. 33:1--93, N.J.S.A. The policy of the act is expounded in the preamble. It recites a legislative finding that the practice of granting discounts, rebates, and so on, by manufacturers and wholesalers to retailers has 'contributed largely to destructive price wars which have unduly increased the consumption of alcoholic beverages,' and is 'detrimental to the proper operation of the liquor industry and contrary to the interests of temperance;' and that the sale of alcoholic beverages 'is unusually susceptible to abuse with resulting danger to the general public and should be strictly supervised and regulated to prevent undue stimulation of public demand for alcoholic beverages.'

The current Regulation 34 was promulgated by the administrative authority pursuant to the power thereby granted. Rule 4 thereof enjoins the sale of alcoholic beverages by a manufacturer or wholesaler to a retailer 'except at the wholesale price established' in accordance with Rules 1 and 2, less permissible discounts. Rules 1 and 2 required the filing with the administrative agency on or before March 10, 1945, of a 'complete list of wholesale prices and statement of discounts,' and provides for 'changes in wholesale prices and discounts * * * by filing on or before the 10th day of any month a statement of the changes which shall take effect on the 1st day of the following month.' Compliance with this provision is a condition prerequisite to lawful sales of alcoholic beverages. These statements are made available for inspection by manufacturers and wholesalers; and there is provision for an amendment of the 'filed price list and statement of discounts in order to meet lower and competing prices and discounts for' comparable alcoholic beverages filed pursuant to the regulation by any other manufacturer or wholesaler, provided the amended prices and discounts 'are filed before 5:00 P.M. of the 14th day of the month, and provided further, that such amended prices are not lower and discounts not greater than those to be met.' There is provision also for the publication by the Commissioner of the price lists and discount statements 'not later than three days before the 1st day of each month.' Rule 2(e) reserves to the Commissioner the power, 'upon adequate cause being shown therefor,' to 'suspend the foregoing provisions so as to permit wholesale prices and discounts and changes in such prices and discounts, to take effect upon such shorter notice as he may prescribe.'

The intention of the parties controls in the making and in the construction of contracts. The parties may make contractual liability dependent upon the performance of a condition precedent; and where the performance of the condition made vital to the existence of the contract is impossible as in violation of public policy, a contractual obligation does not come into being....