Opinion
No. 72-200
Decided July 3, 1973.
Action by wholesale liquor distributor against liquor retailer to recover the balance due on a note executed in settlement of defendant's account with plaintiff for liquor purchased. From entry of judgment for plaintiff, defendants appealed.
Affirmed
1. INTOXICATING LIQUORS — Credit Sales — Wholesaler — No Attempt — Control — Retailer — Not Unlawful. The validity of credit sales by liquor wholesaler to retail liquor licensee is recognized by statute, and extension of credit by wholesaler unaccompanied with control or attempt to control the retailer is not unlawful under the Colorado liquor law.
2. Credit Extended — Wholesaler — To — Retailer — Thirty Days — Failure to Pay — Not Make — Transaction Unlawful. Where credit extended by liquor wholesaler to liquor retailer ended after thirty days and there was no voluntary extension beyond that point, and where the trial court found that wholesaler made no effort to control defendant's operation in any way, the failure of the retailer to pay the obligation when due did not convert a lawful transaction into an unlawful one, nor did the subsequent execution and acceptance of a note in settlement of the obligation.
3. Refusal of Evidence — Violation — Federal Statute — Proper — Action by Wholesaler — Recover — Price of Goods Sold. In action by liquor wholesaler to recover on note given for goods sold to liquor retailer, the trial court did not err in refusing to accept evidence relative to unlawful practices section of federal intoxicating liquors act since, even if a violation of that act had been proved, it would not constitute a defense to plaintiff's action to recover the price of the goods sold.
Appeal from the District Court of Arapahoe County, Honorable Robert F. Kelley, Judge.
Gould, Moch and Bernick, for plaintiff-appellee.
Ed Conly, for defendants-appellants.
Division II.
Majestic Marketing Company, a licensed wholesale liquor distributor, sued Anderson Enterprises of Colorado, Inc., a licensed liquor retailer, and C. H. Anderson, manager of the corporation, to recover the balance due on a note signed by both defendants. In their answer, defendants admitted the execution of the note, but denied liability on the ground that the note was void as being in violation of C.R.S. 1963, 75-2-15. After trial to the court, judgment was entered for plaintiff for the balance due on the note. Defendants appeal from that judgment. We affirm.
The trial court found, and the record establishes, that in 1969 and 1970 plaintiff sold liquor to the defendant company on an open account basis. The defendant fell six months behind in its payments and plaintiff sued on the account. Settlement negotiations culminated in the execution of the note and the agreement of plaintiff not to prosecute its action. After making several payments on the note, defendants defaulted and this action ensued. At the trial defendants sought to establish that the note also violated 27 U.S.C. § 205 (of the unlawful practices section of the federal intoxicating liquors act) as well as the state law. The trial court refused to admit any evidence relative to the Federal Statute on the ground that its violation, if any, was outside the issues raised by the pleadings.
On appeal, defendants assert that the trial court erred in holding the note valid and in refusing to give judicial notice to the Federal Statute and the regulations promulgated thereunder. Neither of these contentions has merit.
[1,2] C.R.S. 1963, 75-2-15, provides that it shall be unlawful for a wholesaler to furnish or supply to any retail liquor licensee any financial assistance or to make a loan to such licensee; that any such agreement or arrangement shall be void and unenforceable; and that the purpose of the section is to prevent control of retail outlets by persons other than the licensee. Defendants contend that the extension of credit for six months constitutes unlawful financial assistance in violation of the Statute. However, as found by the trial court, the credit extended by plaintiff expired after thirty days, and there was no voluntary extension beyond that point. Extension of credit unaccompanied with control or attempt to control is not unlawful under the Colorado liquor law. C.R.S. 1963, 75-2-6, sets forth the duties of the state licensing authority, among which is the duty to make rules and regulations which "may cover the following subjects . . . sales on credit . . . ." No rules or regulations pertaining to sales on credit have been promulgated. However, it is clear that the validity of credit sales is recognized by the statute. The failure of the debtor to pay the obligation when due did not convert a lawful transaction into an unlawful one, nor did the execution and acceptance of the note. The trial court found that plaintiff made no effort to control defendants' operation in any way and specifically that acceptance of the note was not conditioned upon any further purchases from plaintiff. These findings are supported by the record and will not be disturbed.
[3] The trial court did not err in refusing to accept evidence relative to asserted violation of 27 U.S.C. § 205. Even if such a violation had been proved, it would not constitute a defense to plaintiff's action to recover the price of the goods. American Distilling Co. v. Wisconsin Liquor Co., 104 F.2d 582.
Judgment affirmed.
JUDGE DWYER and JUDGE PIERCE concur.