It is a violation of the Liquor Control Act [60-3A-1 NMSA 1978] for any wholesaler to extend credit or to agree to extend credit for the sale of alcoholic beverages to any retailer, dispenser, canopy licensee, restaurant licensee, club licensee or governmental licensee or its lessee for any period more than thirty calendar days from the date of the invoice required under the provisions of Section 60-8A-3 NMSA 1978. A violation of this section does not bar recovery by the wholesaler for the total indebtedness of the retailer, dispenser, canopy licensee, restaurant licensee, club licensee or governmental licensee or its lessee.
History: Laws 1981, ch. 39, § 71; 1985, ch. 39, § 1.
ANNOTATIONSFailure to collect invoices. — Where the liquor wholesaler did not promptly bring an action to recover the amount due on invoices that had remained unpaid for more than thirty days, but continued to deliver more liquor to the retailer without receiving immediate payment, the wholesaler extended credit to the retailer in violation of this section. N.M. Beverage Co. v. Blything, 1985-NMSC-039, 102 N.M. 533, 697 P.2d 952.
Credit extended during initial 30 days. — Credit sales made within the initial 30-day period before the retailer falls behind in payments on his account are not declared violations of this section, and 60-8A-5 NMSA 1978 does not bar a wholesaler from bringing an action to collect debts arising from such credit sales. Pucci Distrib. Co. v. Stephens, 1987-NMSC-075, 106 N.M. 228, 741 P.2d 831.
Time period for credit sales. — Since 15 days is a reasonable amount of time for a wholesale liquor distributor to determine what bills are past due from purchasers, any credit sales of liquor made to debtor by the wholesale liquor distributors within the first 45 days from the date of the first unpaid invoice are in conformance with the requirements of this section and are collectable, while any credit sales made after this forty-five day period demonstrate an implicit agreement to extend credit and, thus, are in violation of this section and uncollectable. Sholer v. Bank of Albuquerque (In re Gallegos), 68 B.R. 584 (Bankr. D.N.M. 1986) (decided under former Section 60-10-8 NMSA 1978).
Conduct violative of section. — Where, from a review of the invoices submitted, it is obvious that wholesale liquor distributors were extending credit long after the debtor had been in arrears in excess of 30 days, such implied agreement to extend credit is conduct prohibited by this section. Sholer v. Bank of Albuquerque (In re Gallegos), 68 B.R. 584 (Bankr. D.N.M. 1986) (decided under former Section 60-10-8 NMSA 1978).
To violate this section, a liquor wholesaler must continue to make credit sales to a liquor retailer knowing at the time that the retailer is more than 30 calendar days behind in its credit payments to the wholesaler. Gavin Maloof & Co. v. Sw. Distrib. Co., 1987-NMSC-103, 106 N.M. 413, 744 P.2d 541.
Wholesaler may collect despite violation. — The purpose of the 1985 amendment was to eliminate the forfeiture and allow the wholesaler to collect its debt even though there may be a violation of this section. D & M, Inc. v. United N.M. Bank, 114 B.R. 274 (Bankr. D.N.M. 1990).
Liquor wholesalers' superpriority liens created by former Section 60-6B-3E NMSA 1978 were prior to a bank's perfected security interest even if there was a violation of this section. D & M, Inc. v. United N.M. Bank, 114 B.R. 274 (Bankr. D.N.M. 1990).
C.O.D. sales allowable. — When a credit sale is not paid for within 30 days, a liquor wholesaler may cut off credit and continue to do business with the delinquent retailer on a C.O.D. basis while the wholesaler attempts to collect the past due accounts. Gavin Maloof & Co. v. Sw. Distrib. Co., 1987-NMSC-103, 106 N.M. 413, 744 P.2d 541.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 45 Am. Jur. 2d Intoxicating Liquors § 121.
Construction and effect of liquor regulation forbidding or restricting sales on credit or other than for cash, 17 A.L.R.3d 396.
48 C.J.S. Intoxicating Liquors § 243.