Barden v. Montana Club

• Decision Date: 28 January 1891
• Citation: 25 P. 1042,10 Mont. 330
• Parties: BARDEN, County Treasurer, v. MONTANA CLUB.
• Court: Montana Supreme Court

25 P. 1042

10 Mont. 330

BARDEN, County Treasurer, v. MONTANA CLUB.

Supreme Court of Montana

January 28, 1891

Appeal from district court, Lewis and Clarke county; GEORGE R MILBURN, Judge.

Bach & Buck, for appellant.

Henri J. Haskell, Atty. Gen., and C. B. Nolan, Co. Atty., for respondent.

BLAKE C.J.

This is an appeal from a judgment which was entered against the Montana Club for the recovery of a license tax, under the following statute: "All persons who deal, in, sell, or dispose of, directly or indirectly, any spirituous alcoholic, vinous, or malt liquors, in any quantity less than one quart, shall, before the transaction of such business obtain a license for which he or they shall pay as follows." St. (15th Ex. Sess.) 74. The Montana Club was incorporated under the laws of the territory, and the articles contain the following certificate: "The particular business or objects for which the association is formed are as follows, to-wit: For literary, educational, and social purposes, and for mutual improvement and benefit, and to maintain in the said city of Helena, in said county and territory, apartments fitted with the proper fixtures, and furnished with the proper furniture and appurtenances, to be used for said purposes by ourselves, and our associates and successors, and to do each and every other act and thing necessary and convenient for the maintenance and perpetuation of a social club in said city of Helena." The articles bear the date of March 28, 1885. The transcript contains an admission in these words: "It was also admitted by the counsel for the state that the membership is about 225; that members pay their annual dues, in the case of resident members $40 a year, and in case of non-resident members $20 a year, and an initiation fee of $100; that the club pays a rental for its rooms of $100 a month, and it employs a steward at a salary of $100 a month; employs a bar-keeper, a man who takes charge of what is called the 'bar' of the club, at $100 a month, and three other employes, at salaries of a about $75 a month each." It is also conceded by counsel that the club has a library and magazines and newspapers for the use of the members; that persons who do not reside in the city of Helena can be admitted to the privileges of the corporation for the period of 10 days upon the receipt of a card from a member; that the invited guests and members can obtain at the bar of the club all the liquors which are mentioned in the statue supra, upon a compliance with the rules; and the member who introduces a visitor is responsible for the indebtedness which may be incurred thereby, although the latter is primarily liable. It is further shown that the daily receipts from the disposal of the liquors by the club amounted to $40. The following among other findings were made by the court below: "That on the 1st day of April, A. D. 1890, at Helena, said county and state, the defendant corporation, through its agents, did sell and dispose of spirituous, vinous, and malt liquors in quantities less than a quart to its members, permanent and temporary, and continues so to do, and has made sales of liquors as aforesaid to persons from abroad, who according to the rules of the club had secured a temporary or provisional membership; *** that the liquors disposed of by said defendant corporation were the property of said corporation, and were purchased by said corporation with corporate funds; *** that said liquors were disposed of at a profit by said club." The conclusions of law were stated as follows: "(1) That the disposal of liquors by the club to its members, permanent and temporary, constitutes a sale of liquors; (2) that the sale of liquors by the club to its members constitutes a business, for the carrying on of which the club is liable for the payment of a license." The fourth specification of errors is that "there is no evidence to show, or to justify the finding of fact by the court, that the defendant has ever disposed of liquors of any kind at a profit." An examination of the testimony compels us to sustain this proposition. Four witnesses were called for the state, and testified upon this point. Three of them were officers of the club, and stated positively that there was no profit in the sales of the liquors at the bar, and that a committee adjusted the prices for the sole purpose of paying the expenses thereof, including the purchases. Another person testified: "Of my own personal knowledge, I don't know of any profit made there to-day." The foregoing finding must be set aside and disregarded in reviewing the legal questions which are before us.

The authorities which discuss the problems to be solved in this case cannot be reconciled. Some of the decisions which have been cited relate to associations that have been organized for the purpose of evading and violating the law restraining the sale of intoxication liquors. They are inapplicable to the present inquiry, for no charge of this nature has been uttered against the appellant. Such is State v Mercer, 32 Iowa, 405. In the opinion of the court, Mr. Justice BECK referred to the articles of association of the "Winterset Social Club," and said: "They appear by the statement of counsel to have been nothing more than the foundation of an organization, the object and intent of which was to evade the law for the suppression of intemperance,--a rather clumsy device by which the defendant and the members of the 'Social Club' hoped to defeat that law, and establish a place of resort where they could be supplied with intoxicating liquors for unlawful use. The fact that, under the arrangement of selling tickets, the members of the club became the owners of the liquors to the extent of the money paid, does not make the sale of the liquors in that way lawful." The statute which was interpreted by the court formed a part of what is generally designated as a "prohibitory liquor law," and did not relate to any system of taxation. The case of Marmont v. State, 48 Ind. 21, belongs to the same class, and the opinion says that "the appellant was indicted, tried, and convicted in the court below for selling intoxicating liquors on Sunday, and permitting them to be drunk upon the premises." Chief Justice BUSKIRK in the opinion gives at length the statement of facts concerning the "Modock Club," and proceeds: "It is agreed that each member, upon his initiation, paid fifty cents, and thereafter a monthly assessment of ten cents, to form the basis of a fund for the payment of expenses and reliefs of the society; and that the money received for each glass of beer drawn for and used by a member of said association goes into the society's treasury, to keep up its funds for payment of expenses, procuring refreshments, and for reliefs; which expenses are for fuel, rents of hall, newspapers, the beer used, and the donations or reliefs payable to each member of said association, who, from sickness or other mishaps, may require assistance; and a standing committee from the members of said society is appointed to see after and inquire into and direct the payment of necessary reliefs in all such cases *** When the society appointed the appellant its agent for the sale of its beer to the members of the association, it consented that each member might become the owner of such portion of the partnership property as he might be willing to pay for, and appropriate it to his individual use. If the transaction set out in the agreed statement of facts be not an evasion and violation of the law, then a number of persons may do that lawfully which if done by one person would be unlawful. It would be a reproach to the law and its administration if a combination of persons could, by such an arrangement, evade the law and thwart the legislative will." To the same effect are Rickart v. People, 79 Ill. 85; State v. Horacek, 41 Kan. 87, 21 P. 204; State v. Lockyear, 95 N.C. 633. It should be observed that these citations support the contention of the respondent that the transaction which is described in the case at bar possessed the elements of a sale. It must be further admitted that the following authorities are directly in point, and uphold the ruling of the court below: U.S. v. Wittig, 2 Low. 466; Martin v. State, 59 Ala. 34; People v. Andrews, 115 N.Y. 427, 22 N.E. 358; People v. Soule, 74 Mich. 250, 41 N.W. 908; Chesapeake Club v. State, 63 Md. 446; State v. Essex Club, (N. J.) 20 A. 769. They assert, generally, that the property which belonged to the corporation or club has been transferred for a valuable consideration to persons who...