Silverman's Liquor Mart, Inc. v. Licensing Bd. for City of Boston

• Decision Date: 17 February 1965
• Parties: SILVERMAN'S LIQUOR MART, INC., et al. v. LICENSING BOARD FOR the CITY OF BOSTON et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 712

204 N.E.2d 712

348 Mass. 524

SILVERMAN'S LIQUOR MART, INC., et al. v. LICENSING BOARD FOR the CITY OF BOSTON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 7, 1964.

Decided Feb. 17, 1965.

David Burstein and Fred Ross, Boston, for plaintiffs.

Charles F. Mahoney, Boston, for defendant Licensing Bd. for City of Boston.

Benjamin Gargill and David Berman, Boston, for defendants Benjamin Goldberg and others.

Before WILKINS, C. J., and WHITTEMORE, CUTTER, SPIEGEL and REARDON, JJ.

SPIEGEL, Justice.

This is a bill in equity to compel specific performance by the defendants ¹ of written agreements to purchase the plaintiffs' ² stock in Silverman's Liquor Mart, Inc. (corporation), and to purchase certain real estate. It also seeks, inter alia, an order directing the Licensing Board for the City of Boston (board) ³ to approve 'without * * * reservations' a petition for transfer of stock. The defendants filed a plea in bar and demurred to the bill. The board also demurred. The plaintiffs and the corporation appeal from interlocutory decrees sustaining the demurrers and the plea in bar, ⁴ and from a final decree dismissing the bill.

The material allegations in the bill are as follows: Since 1934 the corporation has held a license for the retail sale of alcoholic beverages 'not to be consumed on the premises.' The capital stock of the corporation was owned by one Joseph Silverman until his death in 1951. The Probate Court thereafter appointed the plaintiffs to serve as executors and trustees under Silverman's will. 'For many years,' the applications for annual license renewals filed by the corporation disclosed that the capital stock was owned by the plaintiffs as executors and trustees. On January 25, 1962, the corporation petitioned the board, requesting a transfer of its license to a building owned by the plaintiffs near the original location of the liquor store operated by the corporation. The board held a public hearing on the petition and 'denied * * * [the] application for transfer without assigning any reasons.' The corporation thereupon appealed to the Alcoholic Beverages Control Commission, which remanded the matter to the board on July 10, 1962, recommending that the transfer be granted. On September 24, 1962, the board approved the transfer of the license 'with a reservation as to whether an executor or trustee may own stock in a corporate licensee.' On November 28, 1962, the corporation applied to the board for a renewal of its license for the year 1963. After a hearing on the matter, the corporation was notified, on December 31, 1962, that the board 'voted to renew the license * * * in order to prevent undue hardship pending any future legal determination of questions of law raised at the hearing' (emphasis in original), and that the board 'reserves its rights to pursue the legal status of this license, notwithstanding the above action taken.'

On February 21, 1963, the plaintiffs, as executors and trustees, 'entered into written agreements' with one of the defendants for purchase by him of the stock in the corporation and of the real estate to which the corporation's liquor license had been previously transferred. ⁵ The agrements provided, inter alia, that 'After final and legal effective approval of all the applicable licensing authorities has been obtained to the change of officers, directors, and stockholders * * * then the parties agree to have all their respective papers ready to pass papers and will make the respective payments and transfers * * * provided further that no appeals or other legal proceedings shall then be pending in connection with this agreement or said agreement pertaining to the real estate. In the event that all such approvals of the [l]icensing [a]uthorities * * * cannot be obtained on or before * * * [April 12, 1963 ⁶ as hereinbefore set forth, through no fault of the parties, then the deposit shall be returned, this agreement shall become null and void, and the parties placed in status quo without further obligation to each other. * * * The consummation of this purchase and sale agreement [as to the real estate] is contingent upon the consummation of * * * [the] purchase and sale agreement * * * pertaining to the sale of the shares of stock * * *. In the event said agreement shall not be consummated for any reason, then this agreement shall become automatically null and void * * *.'

Appropriate petitions were filed with the board requesting permission to transfer the stock to the defendants. On April 8, 1963, the board notified the corporation of its decision 'to approve the transfer of stock' 'subject to the conditions under which the license of * * * [the] corporation was renewed.' In this connection, the board cited 'the conditions that it reserve its rights to pursue to an ultimate determination certain legal questions raised surrounding this particular license.' The board stated that it 'does not waive these conditions or any effect an adverse determination may have upon the license.' The defendants thereupon refused to consummate the purchase on the ground that the 'reservations' stated by the board 'imposed a cloud on the title' of the plaintiffs. Counsel for the plaintiffs and defendants subsequently 'endeavored unsuccessfully' to convince one of the members of the board 'of the impropriety' of the reservations. 'A serious controversy and dispute exists' between the plaintiffs and the defendants regarding the consummation of the 'purchase and sale agreements,' and between the plaintiffs and the board 'as between the propriety and legality of their conduct in this matter and specifically whether an executor or trustee may lawfully hold title to the capital stock issued by a corporation which is licensed under General Laws Chapter 138 Section 15, as amended.'

In the prayers of their bill, the plaintiffs seek: '2. * * * an order and decree * * * directing the * * * [defendants] to perform and carry out forthwith all the Buyer's obligations and agreements contained in said purchase and sale agreements dated February 21, 1963, as amended. 3. * * * an order and decree * * * that the ninth paragraph of Section 23, as amended, of Chapter 138 of the General Laws does not prohibit an executor or trustee from owning stock issued by a corporation which is a licensee under Section 15, as amended, of said Chapter 138. 4. * * * an order and decree * * * directing the * * * [board] to approve the petition for transfer of stock without the reservations * * *.'

I. The defendants demurred to the bill on several grounds. 'If any ground is good, the demurrer should be sustained.' Gardner v. Callahan, 347 Mass. 21, 22, 196 N.E.2d 301 ^a. The only ground which is argued in the defendants' brief is that the bill shows 'that the * * * [plaintiffs] were unable to deliver to * * * [the defendants] final and legal effective approval of all of the applicable licensing authorities by the date on which the sale of the * * * capital stock was to be consummated, through no fault of * * * [the defendants].' In this regard, the defendants contend, inter alia, that the board's approval of the transfer of stock was not 'final.' On the other hand, the plaintiffs argue that the board 'discharged * * * [its] authority in the matter by * * * [approving] the transfer of the stock and the change of officers and directors,' and that the board's reservations 'had no legal effect whatsoever.'

The agreements of the parties require 'final and legal effective approval of all the applicable licensing authorities * * * to the change of officers, directors, and stockholders' before April 12, 1963. By the express terms of the agreements such approval is a condition precedent to performance by the defendants. Absent the occurrence of that approval before April 12, 1963, the agreements 'shall become null and void.' With these provisions in mind, we note that the board's approval of the transfer of the license included 'a reservation as to whether an executor or trustee may own stock in a corporate licensee.' In addition, although the corporation's license was renewed, the board emphasized the reservation of 'its rights to pursue the legal status of * * * [the]...