Price v. Marcus

• Decision Date: 14 October 1947
• Docket Number: 32704.
• Citation: 185 P.2d 953,199 Okla. 356,1947 OK 297
• Parties: PRICE v. MARCUS.
• Court: Oklahoma Supreme Court

185 P.2d 953

199 Okla. 356, 1947 OK 297

PRICE v. MARCUS.

No. 32704.

Supreme Court of Oklahoma

October 14, 1947

Rehearing Denied Nov. 3, 1947.

Error from District Court, Oklahoma County; Lewis R. Morris, Judge.

Action by T. J. Price against Moe Marcus for dissolution of a partnership and accounting of partnership profits.From an adverse judgment, plaintiff appeals.

Judgment affirmed.

WELCH and GIBSON, JJ., dissenting in part.

Syllabus by the Court.

A partnership agreement between two parties whereby one of them becomes a silent partner in the operation of a tavern for the retail sale of 3.2 beer, the other partner obtaining in his own name a permit from the county judge and a permit from the Tax Commission without disclosing the interest of the silent partner, is against the public policy of the State, and is void, and rights asserted thereunder will not be enforced by the courts.

Sam S Gill, of Oklahoma City, for plaintiff in error.

Jack Tellegen and Abe Cohen, both of Oklahoma City, for defendant in error.

LUTTRELL Justice.

This is an action for the dissolution of a partnership and for an accounting of partnership profits, brought by plaintiffT. J Price against the defendantMoe Marcus.The partnership contract involved in the controversy was for the operation of a tavern or tap room for the retail sale of beer in Oklahoma County.Defendant, in his answer, denied that any such contract was entered into and, by amendment to his answer alleged that if such partnership agreement was made that the same was contrary to law and public policy and therefore unenforceable.The case was tried to the court as one of equitable cognizance, and at the conclusion of all the evidence the trial court found that the contract had been made, but that it was void for the reason that it was contrary to public policy, and denied the plaintiff relief.Plaintiff appeals.

Examination of the evidence convinces us that the finding of the trial court that the contract was made as claimed by plaintiff is not clearly against the weight of the evidence.This leaves for consideration the question of whether or not the contract was void as one against public policy.From the testimony of plaintiff it appears that the contract was oral and was entered into on about January 1, 1945.Plaintiff was at that time an auditor in the Beverage Department of the Oklahoma Tax Commission, and shortly prior to that time and while an employee of Oklahoma Tax Commission, had, by arrangement with the Falstaff Brewing Company, procured from that company the promise of an allottment or quota of beer to be delivered to him if and when he should open a place for the retail sale of beer.While the testimony as to the exact terms of the contract between plaintiff and defendant is somewhat indefinite, it appears from the plaintiff's testimony that he agreed with defendant that he, the plaintiff, would get the beer and fixtures for the tap room or tavern, and that the defendant would procure a lease and do everything else necessary to open up the tap room, and after defendant had reimbursed himself for money expended in reconditioning the building in which the business was to be conducted the parties were to share equally in the net profits of the business.The lease, the permit from the county judge, and license from the Tax Commission were all taken in the name of defendant, plaintiff being merely a silent partner in the operation of the tap room.Plaintiff testified that he did not want his connection with the place made public because of his position in the Tax Commission.His testimony also discloses that, after knowledge of his connection with the tap room in question came to the attention of the Oklahoma Tax Commission, he resigned his position as an employee of said Commission.

While the Legislature has permitted the sale of 3.2 beer as nonintoxicating, 37 O.S. 1941 § 162, it has, by statute, prescribed regulations governing the sale at retail for consumption on the premises similar in many respects to those surrounding the sale of intoxicating liquors in states where such sales are permitted.Ex parte Strauch, 80 Okl.Cr. 89, 157 P.2d 201, 207.In that casethe court said: 'The courts are practically unanimous in holding that the State has the right to regulate places of business where 3.2 beer is sold, the same as to regulate places of business where intoxicating liquor is sold.The reason for this holding is that there is such a close relationship between the two that no real distinction, for the purpose of regulation, can be made.Hinebaugh v. James,supra[119 W.Va. 162, 192 S.E. 177, 112 A.L.R. 59];Johnson v. Board of Com'rs of Reno County,supra[147 Kan. 211, 75 P.2d 849];Pellicer v. Sweat, Sheriff,supra[131 Fla. 60, 179 So. 423];People v. Lewis,supra[319 Ill. 154, 149 N.E. 817].'

By 37 O.S.1941, § 162h, any person operating a place where such 3.2 beer is sold at retail for consumption on the premises must first secure a permit from the county judge.In order to procure such permit he must satisfy the judge that he is a person of good moral character; has never been convicted of violating the prohibition laws, or the gambling laws of the State of Oklahoma or any other state, and that he has not had any permit or license to sell such beverage revoked in any county within 12 months preceeding the filing of the application.Upon filing the application five days's notice of the making of such application is required and any citizen of the county may appear before the county judge and protest the issuance of such permit.

By Section 162e such retail dealer must also procure a license or permit from the Oklahoma Tax Commission, and as a pre-requisite to the procuring of such permit must show that he is the holder of a valid county permit issued by the county judge.

Section 162q of said Act provides that any person who engages in the sale of nonintoxicating beverages in violation of the provisions of this Act shall be deemed guilty of a misdemeanor and, upon a conviction, shall be punished therefor as provided by the general statutes of this State.

It thus appears that the Legislature, although regarding 3.2 beer as nonintoxicating, deemed it necessary and to the public welfare to prohibit the sale thereof except under restrictions which in its judgment were essential to the protection of the public, and that plaintiff, under and by virtue of the contract relied upon, was engaged in the sale thereof without having complied with the requirements of the statutes above referred to, and in direct violation thereof.

As said in Watkins v. Grieser,11 Okl. 302, 66 P. 332, it was the purpose of the law to place such sale in the hands of law-abiding men of reputable standing and character.While that case referred to the sale of intoxicating liquors, we think that unquestionably, by the statutes above referred to, the Legislature sought to effect the same purpose in the sale of 3.2 beer, and in such case a license issued only to one partner was not a license to the other partner.37 C.J. 244, section 106;33 C.J. 536, section 101;48 C.J.S., Intoxicating Liquors, § 120.

In Beemer v. Hughes,179 Mich. 110, 146 N.W. 198, a case involving a permit for the sale of intoxicating liquor, the Supreme Court of Michigan said: 'Where one only of the partners in a saloon business took out a license, the other partners who took out no license and filed no bond were deliberate violators of the law, and could not have an accounting in equity as to the partnership matters.'

In Garrett-Williams Co. v. Watkins,84 Vt. 299, 79 A. 387, Ann.Cas.1913A 846, the Supreme Court of Vermont said: 'Where a partnership engaged in the retail sale of liquor had no license, one partner alone having an individual license, one who sold liquor to the partnership cannot recover the price from the partner having no license; for the partnership had no right to buy, and hence the sale was illegal, as such a license would protect and impliedly give power to buy only to the individual to whom it was issued.'

We think the rule announced in the cases above cited applies to the instant case, and that a contract violative of the statutory restrictions thrown around the sale of 3.2 beer is against the public policy of the State as expressed in its legislative Act, and is therefore illegal and void.As said in Ruemmeli v. Cravens,13 Okl. 342, 74 P. 908, 912'The contract, therefore, which is the basis of this action, is founded upon, and arises out of, a transaction prohibited by statute...