ido. 13270 

LN i'Hh YUPKISME \:OLJl<Ti_' QF THE STATb ilk' YONTANA 

1976 

,'lbVL >UH!LS'l'Ol\1L -intf .11[\'1 -I~,;,TSON, 

Plaintiffs and Appellants, 

-Vb - 

MYRhTA SVEJKOVSKY, 

Defendant and Kespondent. 

CTOLLL; '11s trict CourI: of the ISighteenth Judicial District, 

donorable W. W. Lessley, Judge presiding. 

i;ou~lsel of Record : 

For Appellants : 

Murphy, Robinson, Hecka thorn and Phil1 ips, 

Ka lispell, Montana 

3uuglas D. Dasinger argued, Kalispell, Montana 

Brown, Pepper and Kommers, Bozeman, Montana 

James M. Kommers argued, Bozeman, Montana 

--- 

Submitted: August 31, 1976 

7 - lcJq@ Ilecided: ' 
Mr. Justice John Conway Harrison delivered the Opinion 

of the Court: 

This appeal arises from an action by plaintiffs for the 

return of money paid on a contract or, in the alternative, to 

have the contract declared null and void. Defendant counterclaimed. The district court, Gallatin County, found for defendant on her counterclaim and for attorney fees in the amount 

of $1,800. 

Defendant Myrna Svejkovsky sold ''all of her right title 

and interest in the business of the operation of the bar and 

related facilities at the V.F.W. Club of Bozeman, Montanat1 

to plaintiffs Steve Johnstone and James F. Allison. Defendant 

purchased what is called an interest in the bar plus $2,000 

for the inventory, on June 1, 1973. In the spring of 1974, she 

was approached by Johnstone and Allison to purchase that interest 

for the sum of $9,100 and it was sold to them on or about May 

11, 1974. 

Svejkovsky operated the V.F.W. Club bar, paid all expenses 

and kept the profits. Johnstone and Allison intended to run the 

bar in the same manner, but shortly after they purchased 

Svejkovsky's interest a representative from the Montana Liquor 

Control Board informed them that this arrangement with the V.F.W. 

Club would not be allowed to continue. Thereafter, Johnstone 

was hired as manager for the bar, for which he was to receive 

wages of $1,000 per month out of the profits of the bar, if 

there were any. When informed that they could not take all the 

profits, as Svejkovsky did, Johnstone and Allison tried to get 

their money back by filing this action. 
Plaintiff appellants raised three issues on appeal: 

1. Was the contract for such a sale illegal, as 

contrary to law? 

2. Was the transfer of the liquor a sale prohibited by 

law? 

3. Was defendant entitled to judgment for attorney fees 

in the amount of $1,800. 

Appellants attack the trial court's finding of fact No. 

5 which stated: 

"That the agreement between the plaintiffs and the 

defendant was not intended to transfer any interest 

in the liquor license owned by the VFW Club, nor 

did the said agreement require any acts that were 

illegal or against public policy. 11 

Appellants argue that section 4-150 (now 4-1-201), R.C.M. 

1947, provided in pertinent part: 

"Sale of liquor unlawful, when --- foreign substance 

in liquor forbidden---possession of liquor, when 

unlawful. (1) Except as provided by this Act, no 

person shall, within the state, by himself, his clerk, 

servant, or agent, expose or keep for sale, or 

directly or indirectly or upon any pretense, or upon 

any device, sell, or offer to sell, or in consideration of the purchase or transfer of any property, or 

for any other consideration, or at the time of the 

transfer of any property, give to any other person any 

liquor. I I 

They also argue that section 4-420 (now 4-4-407), R.C.M. 1947, 

further prohibits the sale of any alcoholic liquor by any 

person not a licensee. In view of the fact that Svejkovsky 

did not own the license, the V.F.W. Club did, appellants argue 

the sale was in direct violation of express statutory provisions 

and illegal. 

We find the factual portion of the court's findings . 

valid for there was no real evidence introduced to offset 
such findings by appellants. There was no testimony in 

support of their testimony that the Montana Liquor Control 

Board put an end to their arrangement with the V.F.W. Club. 

The agreement made with Svejkovsky was originally drawn 

up by appellants' attorney and then submitted to ~vejkovsky's 

attorney who made changes that appellants accepted without 

ever referring it back to their attorney to check. The testimony of Johnstone clearly indicates he knew what he was buying, 

investigated it before making a $4,000 payment, and that he 

intended to continue as Svej>kovsky. had until the legal question 

of the license arose. Further, immediately after the legal 

question arose he was hired by the V.F.W. Club to manage the 

club for about the same figure he would have made under the 

agreement with Svej kovsky. 

This Court held in Hellickson v. Barrett Mobile Home 

Transport, Inc., 161 Mont. 455, 459, 507 P.2d 523: 

'I* * * In examining the evidence, we must view the 

testimony in the light most favorable to the prevailing party. * * * However, while the presumption 

is in plaintiff' s favor, he is also the appealing 

party and as such, the burden is upon him to overcome 

the presumption of the correctness of the trial 

court's findings of fact." 

See also Spencer v. Robertson, 151 Mont. 507, 445 P.2d 48. 

Appellants' md issue challenges the finding that the 

transfer of interest in the liquor was a part of the business 

and not a sale prohibited by the law of the state. They argue 

that section 4-150, R.C.M. 1947, clearly prohibits the sale or 

transfer of liquor in consideration of the purchase or transfer 

of any property. 
Under the facts of the instant case we ha,ve a bulk sale 

of the liquor on the shelves and not a retail sale for consumption as well as a sale of a management interest in the 

V.F .W. Club. Here ~ontana' s law and liquor regulations provide 

a unique method to operate this type of club and it was possible 

for the court, within these laws and regulations, to note a 

distinction between the transfer of a license and the transfer 

of a business conducted under a license. We affirm the trial 

court's finding allowing the transfer as not one prohibited by 

law. 

Appellants' third issue is directed to the award of attorney 

fees in the amount of $1,800. The issue was not contested at 

the trial and is raised here for the first time on appeal. 

Appellants contest the award of this amount by citing a recent 

decision of this Court, Crncevich v. Georgetown Recreation Corp., 

Mont . , 541 P.2d 56, 32 St. Rep.963. This is not a 

case factually similar to Crncevich for here the respondent 

counterclaimed for attorney fees which was not contested by 

appellants before the trial court. This Court in Spencer v. 

Robertson, 151 Mont. 507, 511, 445 P.2d 48, said: 

"Upon appeal, this Court will consider for review 

only those questions raised in the trial court." 

See also Rule 7(a), M.R.Civ.P. 

The judgment of the district court is affirmed. 
Justices. 
Mr. Justice Haswell, dissenting: 

I dissent. In my view, ,the - contract is a subterfuge 

to avoid compliance with Montana's Liquor Control Act, hence 

illegal and should be declared void and unenforceable. 

Section 4-410, R.C.M. 1947, provides in effect, that 

every person owning an interest in a retail liquor business 

must appear on the license. The contract which is the subject 

of this suit sells the right to operate a retail liquor business 

and retain the profits to an unlicensed person. If this 

subterfuge is permitted to continue, transfers of retail liquor 

businesses to . uninvestigated and unlicensed operators would 

effectively remove control of retail liquor establishments from 

the Montana Liquor Control Board. 

I believe this is contrary to the purpose of the Montana 

Liquor Control Act, a violation of the public policy of state 

control of retail liquor establishments, and therefore the 

contract in question should be declared illegal, void and 

unenforceable . 

Justice. '