Matlin v. Crescent Commercial Corp.

VALLÉE, J.

Appeal by defendant Crescent Commercial Corporation from a judgment for plaintiffs in an action in which each plaintiff sought a cancellation of a contract and the recovery of monies deposited with defendant pursuant to a contract entered into between him and defendant.

In 1946, 1947, and the early part of 1948, there was a decided shortage of beer for sale in the Los Angeles area. In March of 1946, the defendant corporation (Crescent) entered into an agreement with a Wisconsin brewing company to take over its entire output of 520 premium beer, an eastern beer. Immediately thereafter Crescent sent telegrams to a number of liquor retailers in the Los Angeles area, including plaintiffs, informing them they could buy all the beer they wanted from it. As a result, each plaintiff entered into a contract with Crescent.

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The contracts called for the delivery of a specified number of cases of eastern beer in 18 equal monthly installments, required each customer to deposit a sum equal to $1.00 for each case of beer to be purchased, the deposit to be applied against the total cost of the merchandise purchased, on which Crescent agreed to pay 5 per cent interest per annum, payable quarterly. Deliveries were made by Crescent shortly after the execution of each contract. The beer delivered in 1946 was a good quality eastern beer, with an excellent flavor. Shortly after the first of 1947, due to the substitution of grains and the use of synthetic ingredients as a result of a governmental order restricting the use of grains, malts and other products in the manufacturing of beer, the beer delivered by Crescent was of inferior quality in taste and color, was unpalatable and unsalable, and Crescent was so advised by each plaintiff. Each plaintiff was thereupon assured by Crescent that the inferior grade beer would be replaced by, and future deliveries consist of-, a good grade of eastern beer. The quality of the subsequent deliveries of beer did not improve and each plaintiff thereupon informed Crescent that because of his inability to sell the inferior beer he would not accept further deliveries and requested it to pick up the ‘

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empties. ’ ’ The president of Crescent admitted that in March and April of 1947, Crescent commenced receiving complaints from some of its customers that the beer was not good and that in July and August, 1947, many customers refused to accept further shipments. After its customers stopped accepting deliveries, Crescent refused to pick up any more “empties,” although it had been customary to do so and to return to the customers an amount equal to $1.00 for each case.