Greil Bros. Co. v. McLain

• Decision Date: 10 February 1916
• Docket Number: 3 Div. 217
• Parties: GREIL BROS. CO. et al. v. McLAIN.
• Court: Alabama Supreme Court

72 So. 410

197 Ala. 136

GREIL BROS. CO. et al. v. McLAIN.

3 Div. 217

Supreme Court of Alabama

February 10, 1916

On Rehearing, June 1, 1916

Appeal from Chancery Court, Montgomery County; Oscar S. Lewis Chancellor.

Action by M.T. McLain against the Greil Bros. Company and others. From an order overruling demurrer, the defendant named appeals. Reversed, and remanded on rehearing.

Steiner Crum & Weil, of Montgomery, for appellant.

Hill Hill, Whiting & Stern, of Montgomery, for appellee.

THOMAS J.

This bill was filed by appellee, to cancel certain notes and a mortgage, and preliminary injunction issued to prevent foreclosure before a final determination. Appellants filed a motion to dissolve the injunction, and a demurrer challenging the sufficiency of the bill for want of equity and on other ground. The cause being submitted on the motion and on the demurrer, the chancellor overruled the motion to dissolve and sustained certain of the grounds of demurrer. After amendment and refiling of demurrer to the bill as amended, by agreement, the cause was submitted in vacation on the demurrer, and the appeal is taken by appellant, Greil Bros. Company, a corporation, from the decree overruling its demurrer. The question presented is whether the amended bill is sufficient for cancellation of the notes and mortgage, for want of consideration, or as being illegal and void.

It is averred, among other things, that appellee had applied to the excise commission of Montgomery, Ala., for a license to engage in the business of a retail liquor dealer at No. 944 Bell street, in the city of Montgomery, and that his application had not been granted; that a license had been granted and issued to Carew Powell, authorizing him to conduct the business of a retail liquor dealer at Nos. 118 and 120, south side, Highland avenue, which license bore on its face the words, "This license is nontransferable;" that Powell's place of business was consumed by fire, and that he did not rebuild nor resume business under this license; that complainant applied to appellant corporation, or its agents, to purchase and to secure the legal transfer of Powell's license, with permission to transfer the locus of that business from Nos. 118 and 120, south side, Highland avenue, to No. 944, Bell street, in said city; that this transaction was negotiated and consummated through appellant's agents and Powell, and resulted in appellee's paying the sum of $1,500 in cash, as the amount of the state's license for engaging in the said business, as provided by law, together with the additional sum of $1,000, evidenced by his promissory notes secured by a mortgage on the real properties described in the bill, and that this $1,000 was to be applied by Greil Bros. Company on Powell's indebtedness to that corporation.

The exhibits to the bill--the license attempted to be transferred and the agreement of purchase reciting the real consideration for the notes and mortgage--and the averments of the bill show want of consideration, and the misrepresentation of a material fact that induced complainant, to his injury, to give the questioned notes and mortgage. It is plain from this record that Powell's attempted transfer of his license to McLain was insufficient as lawful authority to the latter to conduct the business of a retail liquor dealer at No. 944 Bell street, in said city. Section 14, Acts 1911, p. 259, required that before the excise commission could issue a license, the applicant should deposit the fee required, and give notice of such application in a newspaper of general publication in the city within which the licensee expected to do business, for two successive weeks, before the hearing of the application, such notice to contain the full name of the applicant, the exact street and number where the business was to be conducted, etc. Provision was made that opportunity should be given any qualified elector to file written objection to the granting of the license, "against the applicant, or the place of business," and that thereon a hearing should be had. It was further provided (section 15, said act) that the excise commission, by indorsement, might permit the licensee to transfer his business to some new or other location, after 20 days' publication of such intention, or to transfer any licensee's license, on the latter's request, to some other person, firm, or corporation, on the condition that such proposed transferee should be found to have all the qualifications required of applicants for license; and that the commission should hear any objections which might be made by any qualified elector of the city to the transfer of any license to another party, or to the removal of a licensee's business to some other location, and should refuse to permit such transfer or such removal if, in their judgment, the same should be refused. Section 17 of the act required an affidavit of good conduct, while section 18 exacted a bond conditioned that the licensee would observe all the rules and regulations imposed upon him by the act.

While the act did not prescribe the exact form of the transfer, it is clear that the transfer was designed to be made only to one ascertained (after notice by the commission) to be qualified to conduct the business, in like manner and under like conditions laid down for original applicants for license, and that the transferred business was to be conducted at an approved location, after notice, and under bond given by the substituted licensee as in the case of an original licensee. No reasonable construction of the act would warrant the transfer of a license to parties to whom a license would not be issued originally, nor authorize the transferee to engage in the liquor business at a place where an original licensee would not be permitted to engage therein. All the requirements and safeguards provided by the statute, as to a licensee, must be held to apply as well to a transferee of the license. Any other construction would render the act ineffectual, opening the door for evasions of the law, both in the way for the securing of license by persons not qualified and in the way of carrying on the business at improper or prohibited places.

The purchase of a license duly issued to another by warrant of the excise commission, where authorized by the commission the transferee having all the qualifications prescribed by law for carrying on the business and the engaging in the sale of liquors thereunder at a designated place being permitted by the commission under the act, would not be the doing of an unlawful act, or the engaging in an illegal business. If, however, the permission...