On appeal from the Appellate Division of the Superior Court, whose opinion is reported in 5 N.J. Super. 283.
For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant and Burling. For affirmance -- Justices Case and Wachenfeld. 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. 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 1, 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. 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," 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 (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. P.L., p. 1180, c. 436, R.S. 33:1-1 et seq. 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. 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 ...