WILLIAM J. CLEARY & others vs. CARDULLO'S, INC. & others. [Note 1]

CUTTER, J. The plaintiffs who are taxpayers in Cambridge (see G. L. c. 139, Sections 16 and 16A, as amended by St. 1934, c. 328, Sections 11 and 12) seek to enjoin Cardullo's, Inc. (Cardullo's), and the owners of the premises at 6 to 7 Brattle Street, near Harvard Square in Cambridge, from selling alcoholic beverages upon these premises. A preliminary injunction against such sale was granted, from which Cardullo's appealed.

After trial on the merits, the judge made the following findings. Cardullo's leases the Brattle Street premises and there maintains a delicatessen store. Silveira's Liquor Store, Inc. (Silveira's), operated a licensed retail liquor package store at 291-293 Cambridge Street, Cambridge, which is approximately two miles from 6 to 7 Brattle Street. On September 18, 1961, Silveira's asked the licensing commission of Cambridge for leave to transfer its license to Cardullo's at the Brattle Street premises. Up to September 13, 1961, Frank N. Cardullo was the owner of all the shares of Cardullo's. On that day he transferred to his son, Frank R. Cardullo (the son) "all of his stock interest . . . without monetary consideration."

The transfer applications failed of approval by a tie vote (1 to 1). The Alcoholic Beverages Control Commission (ABC) approved both applications and remanded the matters

Page 340

to the Cambridge commission recommending approval. The Cambridge commission took no action.

New transfer applications were made by Silveira's on March 28, 1962. These were approved by the Cambridge commission on April 25, 1962. The plaintiffs contend that the approval was invalid (a) because Silveira's had filed similar applications within one year, see G. L. c. 138, Sections 23 and 67 (as amended through St. 1955, c. 652, and St. 1955, c. 461, respectively; see later amendment of Section 67 by St. 1962, c. 500); (b) because the Brattle Street premises are within 500 feet of two churches, see G. L. c. 138, Section 16C (inserted by St. 1954, c. 569, Section 1); [Note 2] (c) because the approval of the application involved granting licenses to one corporation under more than one section of G. L. c. 138 in violation of c. 138, Section 17 (as amended through St. 1960, c. 691); [Note 3] and (d) because there was a misstatement of fact in the transfer applications. See c. 138, Section 23.

Upon each of these issues the trial judge made findings and rulings. He concluded that the "sale . . . of any alcoholic . . . beverages at . . . 6-7 Brattle Street . . . constitutes a liquor nuisance within" G. L. c. 139, Section 16A, "for the reason, and none other, that . . . [the] premises are located within 500 feet of the nearest church or churches within the meaning of" Section 16C. The owners and Cardullo's appealed, as did the plaintiffs, from a final decree enjoining use of the premises for such sale. The evidence is reported.

1. The Cambridge commission could act upon the applications of March 28, 1962, despite the prior applications

Page 341

Page 342

filed on September 18, 1961. The trial judge correctly ruled that the last sentence of the fifth paragraph of G. L. c. 138, Section 67, [Note 4] has no application to the transfer situation now before us, and that the pertinent statutory provision was the last paragraph of Section 16B. [Note 5] In context the prohibition in the last sentence of the fifth paragraph of Section 67 seems to relate to the issue of original licenses and not to transfers. Because the license year is the calendar year the 1961 and the 1962 applications were for separate license years and thus the 1962 application was not forbidden by Section 16B.

2. The Brattle Street premises are not within 500 feet of any church or school on the same street. Whether they are within 500 feet of two churches on other streets [Note 6] depends upon what method of measurement is employed. The trial judge ruled that the first paragraph of c. 138, Section 16C (see fn. 2, supra), requires measurement "along public ways by the most direct route, diagonal or otherwise, from the nearest frontal points of the buildings to each other, and not by a route along the center or middle lines of the ways and intersections." So measured the Brattle Street premises are 457 feet and 452.5 feet, respectively, from the Holy Cross Church on Mount Auburn Street and the Unitarian Church at the corner of Massachusetts Avenue and Church Street. See the accompanying plan. Cardullo's and counsel for Boston Retail Liquor Dealers' Association and the ABC, as amici curiae, contend that the distance is to be measured between a point on the center line of the public way nearest to the nearest frontal corner of the church and a similar point on the center line of the public way nearest to the

Page 343

nearest frontal corner of the premises to be licensed. By this method the Brattle Street premises are 585 feet from the Holy Cross Church and 504 feet from the Unitarian Church. [Note 7] Doubtless other methods of measurement could be devised which might reasonably be regarded as complying with the ambiguous statutory language.

One Hearn, who had been secretary of the ABC since 1933, was permitted to testify that the ABC had interpreted the first sentence of Section 16C relating to the 500 foot measurement method. The trial judge excluded further testimony by Hearn. Cardullo's counsel then offered to prove through Hearn that, "uniformly and . . . consistently" since the enactment of Section 16C, it had been interpreted by the ABC in the manner for which Cardullo's had contended.

Significance in interpretation may be given to a consistent, long continued administrative application of an ambiguous statute, (cf. State Tax Commn. v. Gray, 340 Mass. 535, 541), especially if the interpretation is contemporaneous with the enactment. See Tyler v. Treasurer & Recr. Gen. 226 Mass. 306, 310; Powers's Case, 275 Mass. 515, 518; DeBlois v. Commissioner of Corps. & Taxn. 276 Mass. 437, 440; Broadway Natl. Bank v. Commissioner of Corps. & Taxn. 321 Mass. 25, 30; Commissioner of Corps & Taxn. v. Springfield, 321 Mass. 31, 38; Louisville & Nashville R.R. v. United States, 282 U.S. 740, 757. [Note 8] The best proof, of course, of a consistent administrative interpretation is the

Page 344

administrative body's regulations, or its published written decisions or interpretations. See e.g. First Natl. Bank v. Commissioner of Corps. & Taxn. 274 Mass. 583, 587 (regulation). See also G. L. c. 30A, inserted by St. 1954, c. 681, Section 1, and G. L. c. 138, Sections 24 (as amended through St. 1952, c. 426) and 71 (as amended through St. 1953, c. 654, Section 97). The provisions of c. 138, Section 24, and of c. 30A, Sections 1 (5), 2, 3, 4, 5, 6, and 7, demonstrate the importance attached by the Legislature to fair methods of promulgating, reviewing, and publicizing administrative regulations.

The duty of statutory interpretation is for the courts. Nevertheless, particularly under an ambiguous statute like Section 16C, the details of legislative policy, not spelt out in the statute, may appropriately be determined, at least in the first instance, by an agency charged with administration of the statute. The method of measuring the 500 foot distance under Section 16C is a matter as to which rules, uniform throughout the Commonwealth, should take account of all situations likely to be encountered (e.g. church on same side of street as licensed premises, on the opposite side, around one corner [which, of course, may be a right angle, an obtuse angle, an acute angle, or a curve], or around two such corners). The ABC will have constantly before it a variety of situations in which the statutory principle must be applied. It may well be in a better position than a court to determine what measurement method, consistent with the statutory language, will best carry out the legislative purpose.

The case must be remanded to the Superior Court so that there may be further consideration of the ABC practice. If the ABC within thirty days after rescript shall take the initial steps toward adopting a regulation stating its interpretation of so much of Section 16C as concerns the 500 foot measurement, and proceeds promptly thereafter to promulgate such a regulation, then the trial judge is to apply that regulation, if not in conflict with the statute. Otherwise, the trial judge is to give consideration to any such oral and documentary evidence, not contrary to the plain language of Section 16C, as he may be satisfied establishes a substantial, uniform,

Page 345

and long continued administrative interpretation of Section 16C by (a) consistent application of that interpretation in cases before the ABC, or (b) ABC's published or generally circulated rulings. See c. 30A, Sections 1 (5), 8; Scott v. Commissioner of Civil Serv. 272 Mass. 237, 241 (practice alleged in answer and found by single justice to exist, see original record, p. 6). Cf. Passanessi v. C. J. Maney Co. Inc. 340 Mass. 599, 604 (oral proof of written regulation or of oral rule inadmissible). The ambiguity inherent in Section 16C, however, appropriately should be clarified by regulation rather than by less formal means.

3. Cardullo's contends that, even if the Brattle Street premises are within 500 feet of a church, Section 16C permits the transfer of the Silveira license to any other premises in Cambridge, provided that the new premises are thereafter no closer to the nearest church or school than were the formerly licensed premises. Such an interpretation of Section 16C would make it, in effect, a zoning statute (1) prohibiting, as of its effective date in 1956, any new licenses within the forbidden 500 foot distance, but (2) permitting any pre-1956 licensee either to remain at his former location in a forbidden area or to move, under a sort of roving, nonconforming use, not only within the particular forbidden area but also anywhere else in the city, so long as he moved no closer to any church or school than he had been to a church or school in his original licensed premises.

The trial judge properly excluded evidence that the ABC in practice had adopted such an interpretation for the specific language of Section 16C does not permit that interpretation. [Note 9] The word "therein," in the sentence from Section 16C already quoted (fn. 2), indicates to us that the right of a pre-1956 licensee to move within 500 feet of a church or school is limited to the particular church or school area in which lay his licensed premises prior to the move. Section 16C cannot be

Page 346

interpreted as giving such pre-1956 licensees (whose premises were originally within 500 feet of a church or school) any broader immunity, not enjoyed by others, from the prohibition in Section 16C. See Opinion of the Justices, 341 Mass. 760, 785 (where a narrow statutory interpretation was adopted to avoid constitutional doubts).

4. The great bulk of the testimony concerned whether, despite the transfer of Cardullo's stock to the son, Cardullo's continued to be controlled after September 13, 1961, by Frank N. Cardullo (the father), holder of the stock in two corporations (Fran-Rich, Inc., and Wursthaus, Inc.) licensed under G. L. c. 138, Section 12 (as amended through St. 1959, c. 480; see later amendment by St. 1963, c. 176), to sell alcoholic beverages to be drunk on the premises. The trial judge recognized that "there is reasonable ground for strong suspicion that the transfer of the stock interest from the father . . . to the son . . . was . . . for the purpose of avoiding the law and that the real ownership and control of Cardullo's . . . is in the father . . . and not in the son." He found, however, "that the . . . circumstances . . . are consistent with the action of a provident father, who, seeing a good opportunity to establish his 22-year old son in . . . business . . . seizes . . . the opportunity out of . . . paternal affection . . . . And this, notwithstanding the arranging for financial backing and support by the father, together with . . . [other] assistance, in helping to arrange an efficient operation . . . short of control, especially in view of the . . . inexperience of a 22-year old son." The judge concluded that the plaintiffs "have not sustained the burden" of proving that the transfer from father to son "was a sham or for the purpose of avoiding the law," and that only the son, "and no firm, corporation, association or other combination of persons, directly or indirectly, or through any agent, employee, stockholder, officer or other person, or any subsidiary . . . has any interest, financial, beneficial, or otherwise in Cardullo's."

General Laws c. 138, Section 15 (as amended through St. 1938, c. 353), governs package store licenses. It provides in part,

Page 347

"No person, firm, corporation, association, or other combination of persons, directly or indirectly, or through any agent, employee, stockholder, officer or other person or any subsidiary whatsoever, shall be granted, in the aggregate, more than three such license in the commonwealth, or be granted more than one such license in a town or two in a city." [Note 10] The plaintiffs contend that Section 12, Section 15, and the language already quoted (fn. 3, supra) from Section 17, in the aggregate prevent granting a license under Section 15 to Cardullo's. The judge ruled that the transfer of this package store license, issued under Section 15, was not prohibited by the language quoted above from that section. That language makes no reference to the provisions of Sections 12 and 17. Cardullo's, he found, had only one package store license (Section 15), "the former Silveira's . . . license." He also found that Cardullo's did "not hold any other form of license in violation of" Section 17 (see fn. 3), a section which would prevent the issue of a license under Section 12, and also one under Section 15, to any "person, firm or corporation." See Section 17.

The validity of licenses under Section 12 granted to corporations (Fran-Rich, Inc. and Wursthaus, Inc.) other than Cardullo's is not here directly in issue. We think, however, that the trial judge interpreted Section 15 too narrowly and without giving sufficient weight to the content of closely related sections. Sections 12, 15, and 17, read together, forbade the Cambridge commission to grant a license to Cardullo's, not only if it was in effect an agent of, or otherwise controlled by, Frank N. Cardullo (the father), but also if Frank N. Cardullo, Cardullo's, and the other corporations (licensed under Section 12) constituted in effect a "combination of persons" within the meaning of c. 138, Section 12 (see fn. 10). If Cardullo's in fact was an instrumentality of Frank N. Cardullo, or, if because of his interest in Fran-Rich, Inc.

Page 348

and Wursthaus, Inc. and his activities in behalf of Cardullo's, the three corporations constituted a "combination of persons," the inevitable effect of granting a license to Cardullo's under Section 15 would be to cause a violation of Section 12 by the other corporations. This result seems to us to run counter to a legislative purpose, apparent from Sections 12, 15, and 17 (see fn. 3), that no combination of persons, properly treated as a unit by any of these sections, should be licensed under more than one such section. The relevant parts of these sections have been in essentially this form since 1933. See St. 1933, c. 376, Section 2; 1933 Senate Doc. No. 494, pp. 35-43. The legislative purpose would have been expressed more clearly if there had been included in Section 15 a reference to Section 12 comparable to the reference to Section 15 found in Section 12 and if Section 17 had been more broadly expressed. Nevertheless, we take the view that the general legislative purpose to prevent licenses under more than one section affects the granting of a package store license under Section 15, as well as a license under Section 12, and that, in context, Section 17 is to be read as if it in express terms applied to "combination[s] of persons" and as if it forbade violation of its provisions "directly or indirectly."

The trial judge obviously relied largely upon the fact that the father gave to the son all the 100 shares of outstanding stock of Cardullo's. The son thus had the whole equity, but it was a somewhat thin equity. [Note 11] The purchase of Silveira's license was financed by a $90,000 bank loan to Cardullo's on a note dated January 23, 1963, guaranteed by the father and otherwise secured by him. A bank officer testified that, without the guaranty, the loan probably would not have been given.

The evidence showed many aspects of common operation of Cardullo's, Fran-Rich, Inc., and Wursthaus, Inc. For a

Page 349

time, single group insurance policies covered the employees of all these corporations. The companies, for a period at least, after September 13, 1961, shared a common bookkeeping office and nearly all the office employees worked for all of the corporations. They had substantial intercompany dealings. It could have been found that Frank N. Cardullo had determined a common bonus formula or policy for all companies. A fourth company, Cardullo's Catering, Inc., provided services to all four corporations, and used equipment owned by Cardullo's at first on an informal arrangement and later under a written rent arrangement. Until January 18, 1963, James Syrios, employed by Wursthaus, Inc., was a director of Fran-Rich, Inc., and also of Cardullo's. The father approved bills of Cardullo's, participated in the son's conferences with the banks, and otherwise was consulted about Cardullo's operations. Mrs. Cardullo signed all checks until December, 1962. [Note 12]

The three licensed enterprises were thus in some degree related through the father's ownership of the equity in two of them and through his guidance and financial support of Cardullo's, which if withdrawn might well have resulted in Cardullo's default on the $90,000 bank loan and in the possibility of his being subrogated to claims of the bank against Cardullo's which he would then have been bound to satisfy as guarantor.

We think that the judge might have taken a different view of this evidence, much of it oral testimony, if he had not interpreted c. 138, Section 15, in a more restricted way than we now do. Although the judge found that no "person other than . . . [the son] and no firm, corporation . . . or other combination of persons, directly or indirectly, or through any

Page 350

agent, employee, stockholder . . . or other person . . . has any interest . . . in Cardullo's," that does not dispose of the question. He has not decided whether (1) Cardullo's and (2) Fran-Rich, Inc., Wursthaus, Inc., and Frank N. Cardullo, or any one or more of them, constituted a "combination of persons" within the meaning of Sections 12 and 15, read with Section 17, which could not be licensed both under Section 12 and under Section 15. Although we might determine that issue ourselves on the present record, we think it more appropriate (where the case on other grounds is to be remanded to the Superior Court) to leave that issue to be decided by the trial judge, in the light of our holding concerning c. 138, Sections 12, 15, and 17.

5. The plaintiffs contend that the transfer of Silveira's license to Cardullo's could not be made because a sworn statement was filed, with the applications, showing erroneously that Mary Cardullo owned 400 shares of Cardullo's. See the last paragraph of G. L. c. 138, Section 23 (as amended through St. 1955, c. 652). [Note 13] Section 23 does not compel revocation or suspension of such a license for noncompliance. It merely authorizes such action. The evidence justified the judge's finding that the incorrect report in the sworn statement "was an error on the part of . . . [an attorney], an honest mistake without intent to deceive." It did not preclude granting the transfer.

6. The trial judge correctly ruled that the case has not become moot despite the circumstance that alcoholic beverage licenses are issued annually. See G. L. c. 138, Section 23, as amended. This bill under G. L. c. 139, Sections 16 and 16A, as amended, necessarily presents for decision the question whether at any time a package store license could be granted to Cardullo's for these premises upon the basis of the transfer of Silveira's license and in view of Frank N. Cardullo's ownership of stock in other licensed companies and

Page 351

of the location of the Brattle Street premises in relation to the churches. Cf. Selectmen of Lakeville v. Alcoholic Beverages Control Commn. 329 Mass. 769.

7. The judge properly determined that he was not bound by the determinations of the Cambridge licensing commission (implicit in the granting of the transfer and licenses) concerning the facts relevant to the commission's authority to issue a license to Cardullo's. General Laws c. 139, Sections 16 and 16A, authorize bills in equity to enjoin as a nuisance the illegal sale of alcoholic beverages. Whether a license was lawfully issued may be tested in that manner. The absence of other remedies (see Cleary v. Licensing Commn. of Cambridge, 345 Mass. 257) and the somewhat general character of the relief which the ABC may grant under c. 138, Section 67, with respect to a license which has been granted (cf. Miller v. Alcoholic Beverages Control Commn. 340 Mass. 33, 34-35), indicate that the remedy given to public officials and to taxpayers under c. 139, Sections 16 and 16A, is to be construed broadly.

8. The final decree is reversed. The case is remanded to the Superior Court for further proceedings consistent with this opinion, which may include reimposition of a temporary injunction pending final disposition of the case.

So ordered.