Powers v. Sixty Broadway, Inc.

• Decision Date: 03 November 1976
• Citation: 356 N.E.2d 704,371 Mass. 296
• Parties: Arthur B. POWERS, Jr., et al. v. SIXTY BROADWAY, INC., et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 704

356 N.E.2d 704

371 Mass. 296

Arthur B. POWERS, Jr., et al.

v. SIXTY BROADWAY, INC., et al.

Supreme Judicial Court of Massachusetts, norfolk.

Argued Oct. 7, 1976.

Decided Nov. 3, 1976.

Daniel H. Kelleher, Boston, for Sixty Broadway, Inc. (Paul W. Goodrich, Boston, with him), for Cornelius J. Murphy.

Howard M. Miller, Boston, for plaintiffs.

Evan T. Lawson and Howard J. Wayne, Boston, for Massachusetts Beverage Association, as amicus curiae, submitted a brief.

Before HENNESSEY, C.J., and REARDON, BRAUCHER, KAPLAN and WILKINS, JJ. BRAUCHER, Justice.

Twelve legal voters of the town of Norwood sought and obtained an injunction under G.L. c. 139, § 16A, as appearing in St.1973, c. 1114, § 12, against the exercise of privileges by the defendant Sixty Broadway, Inc. (the corporate defendant), under a package store license. The defendants appealed, and we transferred the case to this court on our own motion. A judge of the Superior Court made detailed findings of fact and ruled that Robert White, the owner of the corporate defendant, and four other corporations constitute a 'combination of persons,' prohibited by G.L. c. 138, § 15, from holding more than three liquor licenses. The defendants contend that that ruling was erroneous in the absence of a finding of common management control. We hold that such a finding is not required. Cf. Clearly v. Cardullo's, Inc., 347 Mass. 337, 347--348, 198 N.E.2d 281 (1964). We affirm the judgment.

We summarize the judge's findings. In 1974 the package store liquor license was transferred to the corporate defendant, and the transfer was approved by the selectmen of Norwood and the Alcoholic Beverages Control Commission. Robert White was to have the sole voting power in the corporate defendant. His father had acquired three package stores in Roslindale, Medford and Newton, owned by three corporations. The stock in two is held by Robert White's father and mother as trustees for their four children; the stock in the third was given to the three children other than Robert White. Robert White owns and operates a fourth store in Quincy through a fourth corporation. He is sole trustee of a real estate trust formed by his father which holds title to the store premises in Medford and Quincy; the beneficiaries are the four children.

All the officers, directors and stockholders of the four corporations are members of the White family except for an attorney who is a director and the clerk of each of the four. Robert White had authority to sign checks for all four corporations until the authority was terminated in 1973 and 1974. He did substantial work for the Newton and Roslindale stores without compensation, but was paid substantially for services to the Medford store; and he borrowed $40,200 from the Medford store in 1973. Transactions among the four corporations, chiefly exchanges of liquor, involved substantial sums. They employ the same accounting firm, and had Blue Cross group insurance for their employees and a single fire and casualty policy. They all operated under the name 'Atlas Liquors,' carried a private brand named 'Atlas,' and advertised in the 'yellow pages' of the telephone book under the heading 'Distributors of Atlas Products.'

The defendants sought to show that the litigation was financed by competing package store owners in the town of Norwood, that Robert White was a man of substantial means, that he alone controls the Quincy store, and that he has no control over the other three stores. The judge made no findings with respect to these matters. So far as appears the corporate defendant never commenced operations, and there is no finding connecting its operations with the operations of the other four corporations. There is no finding of common management control over it and the other four corporations.

Contrary to the defendants' contention, we hold that there was no error in admitting evidence with respect to events prior to 1974 and with respect to the real estate trust of which Robert White was sole trustee. This evidence provided background against which the relations of the various members of the White family could be evaluated. It bore directly on their purpose and intent. See Butts v. Tiffany, 21 Pick, 95, 97--98 (1838). The judge was not bound to accept intra-family transactions at face value or as conducted at arm's-length. Cf. Lexington Nursing Home, Inc. v. Rate Setting Comm'n, 358 Mass. 601, 603, 266 N.E.2d 317 (1971). We find no abuse of discretion in inquiry into various aspects of common operation of the four corporations and into Robert White's participation therein. Cf. Clearly v. Cardullo's, Inc., 347 Mass. 337, 348--350, 198 N.E.2d 281 (1964).

The defendants' principal contention is that a finding of common management control is essential to a ruling that there has been a violation of G.L. c. 138, § 15, as amended through St.1935, c. 440, § 12: 'No person, firm, corporation, association, or other combination of persons, directly or indirectly, or through...