James J. Sullivan, Inc. v. Cann's Cabins, Inc.

• Decision Date: 08 September 1941
• Citation: 36 N.E.2d 371,309 Mass. 519
• Parties: JAMES J. SULLIVAN, Inc., v. CANN'S CABINS, Inc.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

309 Mass. 519

36 N.E.2d 371

JAMES J. SULLIVAN, Inc.,

v.CANN'S CABINS, Inc.

Supreme Judicial Court of Massachusetts, Middlesex.

Sept. 8, 1941.

Action by James J. Sullivan, Inc., against Cann's Cabins Inc., to recover unpaid installments alleged to be due under an agreement. Verdict for the plaintiff in the sum of $811.65 and the defendant appeals and brings exceptions.

Appeal dismissed, exceptions sustained, and judgment for the defendant.Appeal from Superior Court, Middlesex County; Broadhurst, Judge.

Argued before FIELD, C. J., and QUA, DOLAN, and COX, JJ.

E. V. Maloney, of Boston, for defendant.

Agnes L. McCarthy and V. H. Tanner, both of Boston, for plaintiff.

QUA, Justice.

Section 25 of G.L. (Ter.Ed.) c. 138, as inserted by St.1933, Ex.Sess., c. 376, § 2, contains this provision, ‘It shall be unlawful for any licensee under section twelve or fifteen to lend or borrow money or receive credit, directly or indirectly, to or from any manufacturer, wholesaler or importer of alcoholic beverages, and for any such manufacturer, wholesaler or importer to lend money or otherwise extend credit except in the usual course of business and for a period not exceeding ninety days, directly or indirectly, to any such licensee, or to acquire, retain or own, directly or indirectly, any interest in the business of any such licensee.’

In January, 1940, the plaintiff was a wholesaler of alcoholic beverages, and Robert C. Cann conducted a restaurant in Revere with a bar for the sale of alcoholic beverages. The defendant was incorporated for the purpose of acquiring and continuing Cann's business. Cann was indebted to the plaintiff for liquors purchased by him of the plaintiff. The local licensing authority granted the defendant's application for a license to sell alcoholic beverages similar to that held by Cann, but the plaintiff filed with the Alcoholic Beverages Control Commission a protest against any approval of the defendant's license by the commission. See G.L. (Ter.Ed.) c. 138, § 12, as inserted by St.1933, c. 376, § 2, and as amended. On January 31, the defendant executed and delivered to the plaintiff an agreement reciting that in consideration of the withdrawal of the plaintiff's protest against the ‘transfer’ of the license the defendant agreed to pay to the plaintiff, beginning two days after the approval of the ‘transfer’ and continuing over a period of eight months, specified installments of money, the total of which aggregated the total sum then owed by Cann as an individual to the plaintiff. It does not appear that before making this agreement the defendant owed the plaintiff anything. This action is brought to recover unpaid installments alleged to be due under the agreement. The trial judge found as facts that the consideration for the defendant's agreement of January 31 was the plaintiff's withdrawal on the same day of its protest to the Alcoholic Beverages Control Commission against the ‘granting’ of a license to the defendant, and that on the same day the commission approved the license, and on the same day the defendant began to do business under it.

The statute rendered the agreement illegal. The agreement purported for a present consideration to create an obligation on the part of the defendant, a ‘licensee,’ to pay money in the future to the plaintiff, a ‘wholesaler.’ This was an extension and receipt of ‘dredit.’ It was not in the usual course of business. And it was for a period exceeding ninety days. An agreement for delayed payment, whether such payment is in return for goods sold or for something else, is an extension of ‘credit’ within the meaning of the statute. See Barnes v. Treat, 7 Mass. 271, 274;Wilde v. Mahaney, 183 Mass. 455, 459, 460, 67 N.E. 337,62 L.R.A. 813. The prohibition of the...