Minter Bros. v. Hochman

42 N.W.2d 562, 231 Minn. 156, 1950 Minn. LEXIS 671
CourtSupreme Court of Minnesota
DecidedMay 5, 1950
DocketNo. 35,130
StatusPublished
Cited by8 cases

This text of 42 N.W.2d 562 (Minter Bros. v. Hochman) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minter Bros. v. Hochman, 42 N.W.2d 562, 231 Minn. 156, 1950 Minn. LEXIS 671 (Mich. 1950).

Opinion

. Magnet, Justice.

Demurrers to the complaint on the ground that the same failed to state facts sufficient to constitute a cause of action were sustained. Plaintiff appeals.

[157]*157The complaint sets out that plaintiff possessed the required state and federal licenses and permits to engage in the wholesaling of intoxicating liquors and wines; that defendants were engaged in the business of acting as representatives of rectifiers, distillers, wineries, and importers of wines and intoxicating liquors in Minneapolis; that they represented themselves as experienced in the business of the purchase and sale of wines and intoxicating liquors and were familiar with the kind of Twines and liquors that would be readily and promptly resalable; that they were familiar with the market on the purchase of such merchandise from distillers, rectifiers, wineries, and importers and the resale thereof to the retailers throughout the area; that on or about April 1, 1946, plaintiff and defendants entered into a “contract, agreement and joint adventure”; that by the terms of this agreement defendants were to purchase wines and intoxicating liquors from rectifiers, distillers, importers, and wineries to the account of plaintiff to be later resold by defendants in plaintiffs name; that defendants would, for said joint adventure and parties to the agreement, because of their skill and knowledge of intoxicating liquors and wines; purchase intoxicating liquors and wines for plaintiff under the joint adventure; that they would charge the regular commission therefor and credit the same to the joint adventure, plaintiff to receive one-half of the commissions and defendants the other half; that, in accordance with “said contract, agreement and joint adventure,” the merchandise was stored in the warehouse of plaintiff to be packaged and shipped to the places where the same was sold by defendants for plaintiff, and the expense of handling, storing, and shipping was to be borne by plaintiff; that defendants were to sell the same promptly and without any charge or commission for selling the same; that the net profits or losses, after the payment of operating expenses, were to be divided equally between plaintiff and defendants; that at stated periods an accounting was to be made by the parties; that said accounts were from time to time made in accordance with the agreement which disclosed either the net profits pr losses, which were for [158]*158some time accepted and assumed by all the parties to said “joint adventure”; that said joint adventure continued to operate from April 1, 1946, to January 1, 1949; that defendants’ representations that they were familiar with and experienced in the sale of wines and intoxicating liquors and the kind that would be readily and promptly resalable were false and untrue; that plaintiff suffered damages as a result thereof; that defendants purchased unfamiliar and unpopular brands — sometimes worthless wines and liquors— with intent to defraud plaintiff; that as a result defendants were unable to sell the same, forcing upon plaintiff a huge stock of unfamiliar and unpopular wines and liquors, which plaintiff was unable to dispose of except at a great loss after defendants refused to sell the same in accordance with the agreement; that, in order to salvage the losses on said liquors and wines so acquired, it was necessary for plaintiff to sell same at a great loss; that on account and by reason thereof, plaintiff sustained damages in the sum of $57,000, and that, pursuant to said agreement, contract, and joint adventure, plaintiff was obliged to incur an expense in excess of $60,000 in said operation after defendants breached said contract in refusing to sell the wines and liquors so acquired by said joint adventure.

Plaintiff prayed judgment against defendants (1) that said joint adventure be adjudged dissolved and that an accounting be had; (2) that the court determine the amount which is due plaintiff on such accounting for loss of profits and that the defendants be decreed to pay such amount to plaintiff; (3) for the sum of $58,500, being for one-half of the losses sustained by plaintiff in disposing of the unpopular and unfamiliar brands of intoxicating liquors and wines purchased by defendants for said joint adventure in violation of their contract, agreement, and joint adventure.

Defendants demurred to the complaint, and, as stated, the demurrers were sustained.

In simple and condensed language, plaintiff and defendants, according to the complaint, agreed that they would go into the wholesale liquor business on terms as follows: First, that defendants [159]*159would purchase wines and intoxicating liquors from rectifiers, distillers, wineries, and importers, and that the parties would share equally the commissions which defendants would receive from the sellers; and, second, that such liquors would be purchased in the name of plaintiff and be stored, handled, and shipped out by plaintiff, that defendants would sell same to retailers, and that the net profits and losses after payment of operating expenses would be divided equally between plaintiff and defendants.

In the complaint and in its brief, plaintiff refers to the agreement between the parties as an agreement for a joint adventure. At the oral argument before this court, plaintiff claimed that it was one of agency. If a principal and agency relationship existed here, the argument is that the licenses and permits which plaintiff possessed were a sufficient compliance with the statutes. The only compensation which defendants were to receive, according to the complaint, for their part in the operation of the business was one-half the commissions received from the purchase of the wine and liquor supplies and one-half the profits of the business, if there were any. If there were no profits, the complaint states that defendants would share the losses equally with plaintiff. As to the commissions, there could of course be no losses. Under such a pleaded arrangement, we are unable to see how the relationship between plaintiff and defendants can be considered one of principal and agent.

It is plain that plaintiff and defendants agreed to go into the wholesale liquor business together. Plaintiff possessed the requisite state and federal licenses and permits to engage in the wholesale liquor business for itself. As a joint business enterprise, plaintiff and defendants did not possess such licenses or permits. Plaintiff contends that, since it as a corporation had secured and possessed all necessary licenses and permits, state and federal, to engage in the wholesale liquor business, such licenses and permits were in compliance with statutory requirements and sufficient to cover the business in which plaintiff and defendants were [160]*160jointly engaged, and that therefore its cause of action is not based on illegal transactions.

The statutes involved are M. S. A. 340.11, subd. 1, which provides in part:

“It shall be unlawful for any person, directly or indirectly, upon any pretense or by any devise [sic], to manufacture, import, sell, exchange, barter, dispose of, or keep for sale any intoxicating liquor without first having obtained a license therefor, as herein provided.”

Section 340.07, subd. 1, which reads in part:

“* * * The term ‘wholesaler’ means any person engaged in the business of selling intoxicating liquor to retail dealers. The term ‘person’ includes the meaning extended thereto by section 645.44, subdivision 6.”

Section 645.44, subd.

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Cite This Page — Counsel Stack

Bluebook (online)
42 N.W.2d 562, 231 Minn. 156, 1950 Minn. LEXIS 671, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minter-bros-v-hochman-minn-1950.