Hon. Bert Rbrd, Administrator 

Texas Ldquor Control Board 

Austin, Texas 

Dear Sir: Opinion No. O-1145 

Re: Whether Acts of members of 

Rouston country Club, Houston, 

Texas, in operations of such club, 

constitute a violation of the Texas 

Liquor Control Act. 

Your rsquest for an opinicn on the above stated question has 

been receiked by this department. The facts, with reference to the operations of Houston Country Club, as stated by you, are as followsr 

"No personmay become a participant in the 

Revolving Fund unless he is a member of the Club, 

but membership in the Club does not automatically 

make hima participant in the Revolving Fund. Each 

member of the club who desires to become a participant in the Revolving F'cnd is required to pay $5 

into the fund, and with the fund so created liquor 

is purchased in packages from a regular retail store. 

"The stock of liquor so purchased and belonging to,the participants in the Revolving Fund is 

kept in the club house and the participants in the 

fund are entitled to make withdrawals therefrom, to 

be consumed as a straight drink, as a highball, as 

oonstitutents of a cocktail, or otherwise, and either 

on or off the premises of the Country Club. Liquor 

so withdrawn is served to the Revolving Fund participants by persons who are on the payroll of Rouston 

Country Club. 

"Only participants who have contributed to the 

Revolving Fund are permitted to make withdrawals from 

this liquor stock, and for each withdrawal a slip is 

made out which must be signed by the participant before the withdrawal is made. A, participant may make 

withdrawals for any other person, in the same manner 

that he makes tithdrawals for himself, -- that is, by 

signing his - name thersfor. There is set out on 

the face of such slip the character of the drink, 
Hon. Bert Ford, Page 2 (O-1146) 

such as whiskey, gin, hightall, or martini cocktail, 

as the case may be, with a specified charge therefor, 

which depends upon the nature of the drink and the 

ingredients therein. At the end of eachmonth an 

inventory is taken of the liquor stock and the cost 

value of the liquors taken from the stock during the 

month is determined. This amount, i.e., cost value 

of the liquor withdrawn, is then deducted from the 

total amount charged during the month against all 

the participants in the fund, and is put back into 

the fund, afiile the remainder is paid to the Country 

Club in payment for the ice, soda and personal services supplied by it to the participants in the fund. 

"One of the members of the Revolving Lund handles 

the purchases of liquor which are necessary to replenish the stock that is owned by the participants in the 

fund. At the end of each calendar month the Country 

Club purchases fram the Revolving Lund the withdrawal 

slips signed during that month by the participants in 

the fund, and collects the amount theredf from such 

partioipants in the same manner that it collects the 

regular club bills. 

"The Houston Country Club holdswine and beer retailer's permit No. 15879,.issued January 1, 1939, 

which Is a renewal. The stock of laine and beer owned 

and served by the olub is kept in a small building 

adjacent to the main building of the olub. Entranoe 

to this small store rocnu is gained by stepping fram 

the porch of the main building into the door of the 

store room. Beer and wines are served by miters 

frDIp this store room into all parts of the club house 

and grounds, including,the spaces in which the stock 

of liquor owned by participants in the Revolving Fund 

is kept and drinks of liquor are served to such participants. Toe same praiters who serve wine and beer from 

this store roan also serve drinks of liquor to the participants in the Revolving Fund. Wins and beer served 

by the club proper is signed for on a different type of 

check than that used Iy the Revolving Fund." 

Section 3(a) of Article 1, of the Texas Liquor Control 

Act, defines the term "open saloon" as follows: 

"The term *open saloon' as used in this Act 

means aqg place where any alcoholic beverage whatever, manufactured in whole or in part by means of 

the process of distillation, or any liquor composed 
Hon. Pert Fod, Page g (O-1145) 

or compounded in part of distilled spirits, is sold 

or offered for sale for beverage purposes hy the 

drink or in broken or unsealed containers, or aw 

place where aw such liquors are sold or offered for 

sale for hman ccnslrmption 011 the premises where 

sold." 

Subdivision (b) of Section 3, reads as follows: 

"It shall be unlaaful for any person, whether 

as principal, agents or employees, to operate or 

assist in operating, or to be directly or indirectly 

interested in the operation of any open saloon in 

this Ste.te." 

In the case of Adkins v. State, 95 S.VL, the matedal facts 

are about as follows: 

A group of men formed a club. These men in turn hired a 

steward at a fixed salary. The steward ordered beer for 

the members of the club and placed such beer in the club 

room for them. Each member of the club paid $l&C for a 

membership and received tickets which represented his interest in the beer the steward ordered. After the keg 

of beer arrived at the club house a ticket was placed in 

a-box~and a glass of beer was drawn by any member who 

desired one, each ticket representinv (I ~1~88 of beere 

The beer which ~88 ordered Ty the steward for the purchasers and paid for by said purchasers. The Court of 

Criminal Appeals held in this case that the facts established a sale of beer by the steward eachtime that a 

glass of beer was drawn by a member of the club. 

In the case of Sutton v. State, 40 S.W. 501: 

A certain firm kept what was known as "Temperance Hall." 

Certain parties paid 50 cents for the privilege of buying beer from the firm at the ordinary retail price. 

The 60 cents paid to beccrme a member of the alleged club 

was all the money ever paid into the concern, except the 

usual price for beer when purchased. Such firm received 

1,630 dozen bottles of beer in five months; kept the 

stockmplenished with the money arising from sales to 

members : and its pay was the profits. Ihe court of criminal Appeals of this State held that this was clearly an 

evasion of the local option law. 

In the case of Krnavek v. Stats, 41 S.W. 612, the facts were 

about as rnllowsr 
. . 

Hon. Bert Ford, Page 4.(0-1145) 

After the enactment of a local option law, a club 

was inoorporated for social and literary purposes, 

and to provide the convenience of a clubrocm~ It 

had a billiard table, a domino tahls and 12 books, 

and took a semi-rmekly paper* The club bought 

large quantities of intoxicants,md employed an 

ex-saloon keeper at a monthly salary to sell them 

at retail to its menbers only, from the bar fonaerly owned by him, and the proceeds of such sale 

became the property of the club* The Court of 

CrMnal Appeals of this State.held that the club 

we.8 formed for the purpose of evading the local 

option law. 

In the case of Fwige V* State, 95 &PC. 506: 

A club was incorporated for social purposes. The 

manager of such club devoted his time to the manganent 

of it8 affairso A~membership fee of $1 was paid* him 

by eaah member. The members of the club obtained beer 

by purchasing tickets, The beer was obtained the day 

after the purchase of the tickets. The manager instructed the members how to order beer by stating that 

when the members wanted beer, the should put money in 

a box and take out a ticket for each nickel, and that 

could be procured at the clubrocm the following night. 

Held, that the club members, when they paid their 

money into the treasury, parted with it to the club, 

so that rhen it sent out the money it bought beer on 

its own behalf, making the manager liable for sale. 

In the cass of Adams V. State, 145 S.W. 940, the Court 

of Criminal Appeals of this State held: 

Where a club purchased liquors in bulk with money 

in the treasury a distribution of the same to members 

at the usual price constituted a sale within the prohibition laws. 

In State v. Country Club, 173 S.H. 570, the Qurt of 

Criminal Appeals of this State held* 

The dispensing of intoxicating liquors by an 

incorporated, bona fide social club to its members, 

for a swa sufficient to psv the cost of the liquors 

and of maintaining the aermlce, is a sale of such 

Xauors o 
_ . . - 

Hon. Bert Ford, Page 5 (O-1145) 

In the case of Williams V. State, 103 S.W. (2d) 380, the 

facts were as follows: 

The defendant was found in the possession of ten 

cases of beer, in the city of,Abilene, in Taylor County, 

Texas. At the time defendant was the manager of xhat 

1~s known as the "Abilene Athletic Club," which had 

approximately 250 members. A prerequisite to membership being that a written application had to be made 

which called for a deposit qf $5.00 by the applicant 

with said manager. Upon being approved as a member of 

the club, the applicant paid a monthly sum of $1.00 

dues, the primary purpose of the $5.00 mentioned being 

that it was to be used in the purchase of merchandise; 

and also if the member nithdrew he was entitled to the 

return of his $5 deposit, provided it had not been consumed in the individual purchase of merchandise or in 

the payment of dues. Rhen the $5 deposit had been consuxed, it ms also understood that the members should 

deposit a like strm; alxo the general properties and 

activities of the club are set out; it is shown that 

appellant is permitted to sell chexing grrm, cigars, 

cigarettes, sandwiches, coffee, milk, and soft drinks 

and put the profits of such business into the payment 

of part OS his salary as manager. It is further set out 

in the agreed statement of the facts in this case that 

some of the members of said Athletio Club had directed 

appellant to have on hand in said club beer for their 

constiption and that the beer upon which this prosecution xas based hadbeen ordered by various members and 

that the defendant had gone to Sleetwater, and acting as 

manager of said club and agent for the members of said 

club had purchased with the money of said membsrs said 

beer~to bring 'tack for the members c+' fhe club. Each 

member was to pay the manager 15 cents per container 

for said beer when he received his beer at said club, 

and said 15 cents deposit, if any, nas deposited in 

*the members deposit account" to replenish same and to 

be used in accordance with the direction of the members 

ofthe club. Appellant got no profit from the sale of 

any beer but from the revenues, dues, and profits fran 

the sale of merohandise were to be paid all expenses 

in the opration of said club, the rent of the building 

and salaries of attendants. The Court of Criminal 

Appeals held in this case under the facts, that the 

defendant possessed intoxicating liquors for the purpose of sale in a dry area. 

It is true that the violation in the Williams case, as well 

as those in the other casss herein referred to, occurred in dry territory, 

honever, tn view of the definition of an open saloon, in our opinion, the 
Hon. Bert Ford, page 6 (O-1145) 

facts herein set forth with referenoe to~the manner of operation of the 

Houston Country Club of Houston, Texas, clearly show that the acts of 

the members of such club, in the operating of same, constitute a violation of the Texas Liquor Control Act, in that the operation of seme 

comes within the definition of an open saloon, which is prohibited by 

statute in the State of Texas. 

It would seem, that in so far as the selling of alcoholic 

beverages, manufactured in whole or in part, by means of the process of 

distillation, or any liquor composed or ccmpounded, in part of distilled 

spirits, or the offering for sale of the same, by the Luston County Club, 

is concerned, the members of said club are attempting to do indirectly, 

what they cannot legally do directly. 

In your letter you also request an opinion as to whether the 

River Oaks Country Club of Houston, Texas, under the facts suhnitted, is 

operated as an open saloon. We see no differenae in the method of operation of these tvc clubs, as far as the handling of their liquor is ccncerned, except that the latter purchases its liquor through a trustee. 

This probably makes the trustee guilty of operating an open saloon, and 

releases the club members of such liability. 

We do not think that there is any doubt but that the fact 

that liquor is dispensed to msmbers of these clubs by the drink, coupled 

with the further fact that suoh members are called upon to contribute 

money to the Revolving Fund, and that they do so contribute, 80 that liquormay be kept on hand, constitutes sales of liquor by the drink on the 

part of those who deliver the liquor to the various members, whoever they 

4w be, and that both clubs in question are being operated as open 

saloons. 

He trust that this satisfactorily enswers your inquiry. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Fred C. Chandler 

Fred C, Chandler 

bssistant 

FCCsob:egw 

_I.. 

APPROVRD AUG. 26, 1939 

/s/GERALD C. MANN 

ATTORNSYGRNERAL OFTEXAS 

APPR+OVED 

Opinion Conrmittee 

By* 

Chairman