Enterprise Brewing Co. v. Grimes

• Citation: 53 N.E. 855,173 Mass. 252
• Parties: ENTERPRISE BREWING CO. et al. v. GRIMES et al.
• Decision Date: 17 May 1899
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

173 Mass. 252

53 N.E. 855

ENTERPRISE BREWING CO. et al. v. GRIMES et al.

Supreme Judicial Court of Massachusetts, Bristol.

May 17, 1899

COUNSEL

J.F. Jackson and J.M. Morton, Jr., for plaintiffs.

J.W Cummings, M.G.B. Swift, A.S. Phillips, and C.R. Cummings, for defendants.

OPINION

BARKER J.

The plaintiffs have a mortgage, the consideration of which was the price of intoxicating liquors sold by them in the city of Fall River to a firm of which the defendants are assignees in insolvency. In the court below it was held that the plaintiffs were not authorized to sell in this commonwealth and that the mortgage given in consideration of such sales was illegal. The case is here upon a report after verdict for the defendants. If the ruling was correct, judgment is to be entered for the defendants; otherwise, the verdict is to be set aside, and the case is to stand for trial. The plaintiffs are corporations chartered in Rhode Island for the purpose of manufacturing and selling beers, ales, and malt liquors. The Enterprise Brewing Company had a selling place in Fall River, and there sold the liquors which are the consideration of its mortgage note. It held annually a license from the proper licensing board to sell intoxicating liquors in Fall River. The date of the mortgage was September 15, 1896. On October 26, 1896, the corporation filed in the office of the commissioner of corporations a power of attorney and a statement of its capital, and on December 3 1897, a copy of its charter and a financial statement, all with the acceptance of the commissioner. The firm of mortgagors was declared insolvent on November 2, 1896. It is agreed that the rights of the other plaintiff shall stand or fall with those of the Enterprise Brewing Company. The defendants' contentions are that foreign brewing corporations cannot lawfully engage in business in this commonwealth, and that no corporation, domestic or foreign, can be licensed to sell intoxicating liquors here.

1. The argument for the contention that foreign corporations chartered to manufacture and sell intoxicating liquors cannot lawfully do business here is based upon the provisions of St.1894, c. 381, § 1, the first sentence of which is as follows: "It shall be unlawful for any corporation association or organization of another state or country, except life insurance companies as provided in chapter two hundred and fourteen of the acts of the year eighteen hundred and eighty-seven, to engage or continue in the commonwealth in any kind of business the transaction of which by domestic corporations is not permitted by the laws of the commonwealth." There are some circumstances which might seem to indicate that the legislature intended by this statute to deal only with corporations and other organizations engaged in the business of insurance. The exception of certain life insurance companies in the sentence quoted so indicates. The next sentence cites the general law requiring every foreign corporation having a usual place of business here to appoint the commissioner attorney for service of process, and to file a copy of its charter and a statement of its capital stock, and the Massachusetts insurance act of 1887, the general act relating to assessment insurance (St.1890, c. 421), and an act relating to fraternal beneficiary organizations of other states (St.1892, c. 40). The bill which became St.1894, c. 381, was reported on the suggestion and recommendation of the insurance commissioner. House Journal, 1894, pp. 768, 858, 922, 988, 1544. The bill was, however, reported by a joint special committee on the revision of the corporation laws. Assuming, therefore, that the intention of the legislature was as broad as the language of the statute, we yet think the statute does not make it illegal for a foreign corporation to sell intoxicating liquors in this commonwealth. Domestic corporations are nowhere forbidden to engage in that business. The legislature has heretofore chartered corporations to engage in the manufacture and sale of intoxicating liquors. St.1875, c. 164; St.1879, c. 121; St.1883, c. 199. It has also granted to hotel companies charters which do not restrict their grantees from engaging in the business of keeping a hotel, and which contain indirect or express implications that the corporations may sell intoxicating liquors in a lawful manner as part of their business. For instance, the corporation now the United States Hotel in Boston was chartered by St.1824, c. 103, and made perpetual by St.1824, c. 131; the charter not restricting the business. At that time the sale of liquors was an incident to the business of keeping a hotel, and hence an implication, though indirect, that the corporation may sell intoxicating liquors in a lawful manner in connection with its hotel business. So in St.1849, c. 166, incorporating the Fitchburg Hotel Company, there is no restriction against keeping a hotel, and the charter provides that if any ardent spirits or intoxicating drinks of any kind whatever shall be sold by said company, or by their agents, lessees, or persons in their employ, contrary to law, in any of said buildings, then the act shall be void. This is a direct implication that the corporation may sell intoxicating liquors in accordance with law. An entirely similar charter was given to the Groton Hotel Company by St.1850, c. 266. It is true that domestic corporations cannot be organized under our general law for distilling or manufacturing intoxicating liquors. Pub.St. c. 106, §§ 7, 14. But there is no express prohibition against the formation under general laws of corporations to carry on the business of selling intoxicating liquors. On the contrary, the statute authorizes the formation of corporations for the purpose of carrying on any lawful business, with certain specified exceptions, in which that of selling intoxicating liquors is not included. When there were no general laws under which domestic business corporations could be organized, such corporations incorporated by special acts could carry on in a lawful manner the business for which they were chartered, and they may do so now. See Stevens v. Pratt, 101 Ill. 206. As there are domestic corporations which, under their charters, have rights to sell intoxicating liquors, the business is one the transaction of which by domestic corporations is permitted by our laws, and the sale of liquors by the...