JAMES L. MURPHY & Company, Ltd v CREAN

CourtChancery Division (Ireland)
Judgment Date19 December 1914
Date19 December 1914
Docket Number(1913. No. 689.)
James L. Murphy & Co., Limited

M. R.


(1913. No. 689.)











Licensing Acts — Agreement in Contravention of — Attempt to create Property in Licence apart from Premises — Agreement for Transfer of Licence from one House to Another — Agreement to deal exclusively with Firm of Brewers for Porter to be sold in House to which Licence transferred, and to deposit Licence with Brewers to be at their Disposal — Transfer by Licensing Authority — Invalidity of Transfer — Illegality of Agreement — Agreement illegal on Face — Illegality not pleaded — Breach of Agreement — Acquiescence — Tied House — Contract in Restraint of Trade — Consideration — Agreement to take fixed quantity of Porter — Establishment by Brewers of another Tied House in Neighbourhood.

By an agreement dated the 5th July, 1892, purporting to be made between the plaintiffs, a brewery company, and the defendant, the occupier of a house in D. Street, in the borough of C., it was recited that the company were beneficial owners of a licence for a house in B. Street, and that the defendant had requested the company to allow her to apply for a transfer of the licence to the house in D. Street to her own name, and to sell thereunder, to which the company agreed on her undertaking to pay them the sum of £300 secured by a bond executed by her contemporaneously, and the defendant thereby agreed to take all necessary steps to have the licence transferred to her own name, and to the house in D. Street, and to maintain the licence in full force, and renew it, and to indorse and deposit it with the company, to be transferred by her to such other person and house as the company might name, the £300 to be repaid to defendant on such transfer being obtained from the licensing authority. The defendant further agreed, while licensed, to deal exclusively with the company for all porter, and for all stout so long as they should brew and vend stout, which she should sell on the premises or elsewhere under colour of the licence, and also to purchase from the company four tierces of porter in every month, and the company agreed to supply her while licensed with such quantity of good merchantable porter and, so long as the company should brew and vend stout, such quantity of good merchantable stout as she might require, on being paid in cash therefor the price usually charged to customers.

The agreement was executed by the defendant under seal, but was not executed by the company. The company had purchased the licence of the house in B. Street (apart from the house itself) for £160 in 1891, and the defendant had obtained at quarter sessions an interim transfer of this licence to the house in D. Street at the licensing sessions in June, 1892, which was confirmed at the annual licensing sessions in October, 1892.

The defendant dealt with the company for porter, but only to a very small extent for stout, which she procured almost exclusively from another brewery, and in 1907 she entered into an agreement with this other brewery to sell its bottled stout exclusively. Throughout there was painted on the outside of her shop, “J. L. Murphy & Co.'s XX Stout.” The plaintiffs were aware for a long time that the defendant was selling some stout of the other brewery, but did not know that she was selling it in large quantities till shortly before bringing the present action, which claimed damages for breach of the agreement of the 9th July, 1892, and an injunction to restrain the defendant from selling porter and stout other than that manufactured by the plaintiffs. The defendant pleaded want of and illegality of consideration, unreasonable restraint of trade, laches, and acquiescence. There was no plea that the agreement, apart from the consideration, was illegal.

Held, by the Master of the Rolls, that there was good and legal consideration for the agreement by the defendant to deal exclusively with the plaintiff company for porter and stout; that such agreement was not an unreasonable restraint of trade; that there was no such acquiescence on the part of the plaintiffs as would debar their right to the injunction sought, and that such injunction should be granted.

After the date of the agreement of 1892, the plaintiffs acquired another licensed house in the immediate neighbourhood of the defendant's and established it as a tied house.

Held, by the Master of the Rolls, that this did not relieve the defendant from her obligation to take the agreed quantity of porter from the plaintiffs.

Held, by the Court of Appeal, that the action should be dismissed.

Held, by O'Brien L.C. and Holmes L.J., that the dominant object of the agreement was an attempt to create property in a licence apart from the premises, in contravention of the licensing laws, and that the agreement was therefore illegal and not enforceable.

Held, by Palles C.B., that the transfer of the licence to the plaintiff by the licensing authority was made without jurisdiction and was void; that the effect of the agreement was to provide for the carrying on of a publican's trade under a document purporting to be a licence, which was mere waste paper, with an obligation on the defendant at the plaintiffs' request to transfer the licence to any house directed by them, and that such an agreement was illegal; that if there had been any valuable consideration for the agreement, it consisted in assistance in procuring a void licence; that the illegality pervaded the entire agreement, both the consideration and the promises; and that even assuming that the consideration had been legal, the promise sought to be enforced was illegal, being a promise to purchase from the plaintiffs porter and stout with a view to their being sold illegally.

Held, also, by the Court of Appeal, that as the illegality of the agreement appeared on its face, it was not necessary that such illegality should have been pleaded.

Trial of Action.

The action was brought for breach by the defendant of an agreement to deal exclusively with the plaintiffs for porter and stout, and claimed an injunction.

The defendant by her statement of defence pleaded, inter alia (a) that there was no consideration for the agreement, and that the consideration alleged therein was illegal and void; (b) that the agreement was an agreement in restraint of trade, and not binding on the defendant in point of law; (c) that the licence obtained by the defendant was granted by the licensing authority after full investigation, and not in pursuance of any bargain or agreement; (d) failure by the plaintiffs to supply the defendant with marketable stout; (e) laches and acquiescence; (f) presumption of release of the covenant; (g) opening by the plaintiffs of a rival premises in the immediate neighbourhood. There was no plea that the agreement, apart from the consideration, was illegal.

The action was tried before the Master of the Rolls with witnesses. The following statement, taken from the judgment of the Master of the Rolls, gives the material portion of the agreement and the circumstances in which it was made. The evidence as to acquiescence and other matters is summarized in the headnote and judgment.

“The plaintiffs in this action are James L. Murphy & Co., Ltd., who are brewers, carrying on business in the City of Cork. The defendant is Mrs. Hannah Crean, who is the licensee of a public-house known as No. 3 Douglas Street in that city. The cause of action is the breach by the defendant of an agreement entered into by her with the plaintiffs to deal with them exclusively for porter and stout, and the relief claimed is an injunction restraining the defendant from dealing with any person or company, other than the plaintiffs, for porter or stout.

The facts are as follows:—The defendant was married in the year 1890 to Mr. Eugene Crean, who had a leasehold interest in the premises No. 3 Douglas Street. They had been married for about two years, when it appears to have been arranged between the defendant and her husband that she should commence to trade as a publican in her own name in these premises. She had not, however, a publican's licence, nor, so far as the evidence goes, was there ever a publican's licence attached to No. 3 Douglas Street. As the law then stood, it was legally possible to obtain a licence for a house which was previously unlicensed, but au applicant for a new licence was almost invariably confronted by the objection that the number of houses already licensed in the locality were ample for the wants of the community. To meet this objection a certain practice, of which the Court has judicial notice, sprung up; and this was, that the applicant for a licence for a house previously unlicensed should acquire an existing licence attached to another house, and, in order to remove the objection that the new licence would increase the number of public-houses, should give an undertaking to the Court to extinguish the existing licence which he had acquired. In substance this was the course adopted by the defendant when she applied for a licence for the house 3 Douglas Street. She did not indeed herself acquire a licence which had been attached to other premises, but one was acquired for her, and placed at her disposal, so that she might remove any objection on the ground of an increase in the number of licensed houses. The matter was carried out in the following way:—One Joseph Healy was licensed for the sale of beer, wine, and spirits in a house known as 32 Blarney Street, in the City of Cork. The plaintiffs, by arrangement with the defendant, purchased this licence from Healy at the price of £160, which the plaintiffs paid out of their own moneys. Having so acquired it, they concurred with the defendant in her application for a licence for No. 3 Douglas Street by giving her authority to...

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9 cases
  • Murphy Company v O'Donovan
    • Ireland
    • Supreme Court
    • 14 December 1939
    ...there was good consideration for the contract, and perJohnston, J., that there was no attempt, as in the case of Murphy & Co. v. Crean [1915] 1 I. R. 111, to create a property in the plaintiffs in the licence apart from the premises, or to give them such custody and control as to be in cont......
  • Irish Land Commission it Building Society v O'Brien
    • Ireland
    • Supreme Court
    • 15 January 1941
    ...required to hand over the licence or endorse the same to a purchaser. Kelly v. MontagueUNK, 29 L. R. Ir. 429, and Murphy & Co.v. Crean, [1915] 1 I. R. 111, applied; R. (Clitheroe) v. Recorder of DublinUNK, I. R. 11 C. L. 412, and In re O'BrienUNK, 11 L. R. Ir. 213, considered. Supreme Court......
  • Triode Newhill LHP Ltd v Superintendent Murray
    • Ireland
    • Court of Appeal (Ireland)
    • 15 November 2018
    ...He began his consideration of these matters by referring to the statement by Palles C.B. in James L. Murphy & Co. Ltd v. Crean [1915] 1 I.R. 111 that ‘the licence is an authority to a named person to carry on trade in a described house’. He referred also to what was stated by Ridley J. in ......
  • White v McCooey
    • Ireland
    • High Court
    • 1 January 1977
    ...nor is that decision at variance with the decisions in Kelly .v. Montague 29 L.R.Ir. 429 and James L. Murphy & Co. Limited .v. Crean 1915 1 I.R. 111. In the last mentioned case the Lord Chancellor O'Brien in the course of his judgment at page 135 said: "There is one principle of licensing l......
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