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 

## - MYRhTASVEJKOVSKY, Defendant and Kespondent.

CTOLLL; '11s trict CourI: of the ISighteenth Judicial District, donorableW. W. Lessley, Judge presiding. i;ou~lsel of Record : For Appellants: Murphy, Robinson, Heckathorn and Phil1ips,

Kalispell, 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 actionby 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 counterclaimand for attorney fees in the amount of $1,800. Defendant Myrna Svejkovsky sold ''allof 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 $9,100and it was sold to them on or aboutMay 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 arrangementwith the V.F.W. Club would not be allowed to continue. Thereafter, Johnstone

was hired asmanager for the bar, forwhich he was to receive wages of $1,000per month out of the profits of the bar, if there were any. When informed that they could not take all the profits, as Svejkovskydid, 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 tojudgment 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 illegalor against public policy.11 Appellants argue that section 4-150 (now 4-1-201), R.C.M. 1947, provided inpertinent part: "Sale of liquor unlawful, when

# --- foreign substance in liquor forbidden---possession of liquor, when unlawful. (1) Except as provided by thisAct, no person shall, within the state, by himself, his clerk, servant, or agent, expose or keep for sale, or directly or indirectly orupon any pretense, orupon any device, sell, or offer to sell, or inconsideration of the purchase or transfer of any property, or for any other consideration, or atthe time of the transfer of any property, give to any other person any liquor.II They also argue that section4-420 (now 4-4-407), R.C.M. 1947, further prohibits the sale of any alcoholic liquor by any person not a licensee. Inview of the fact that Svejkovsky did not own the license, theV.F.W. Club did, appellants argue the salewas indirect violation of express statutory provisions and illegal. We find the factualportion of the court's findings

. valid for there was no real evidence introduced to offsetsuch findings by appellants. Therewas 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 Svejkovskywas originally drawn up by appellants' attorney and then submitted to ~vejkovsky's attorneywho made changes that appellants acceptedwithout

ever referring it back to their attorney to check. The testimony of Johnstone clearly indicates he knewwhat he was buying, investigated it before making a $4,000payment, 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 hewas hired by the

### V.F.W. Club to manage the club for about the same figure he would have made under the agreementwith Svej kovsky. This Court held inHellicksonv. Barrett Mobile Home Transport,Inc., 161Mont. 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 Spencerv. Robertson, 151Mont. 507, 445 P.2d 

### 48. Appellants'md issue challenges the finding that the transfer of interest in the liquorwas 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,clearlyprohibits 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,vea bulk sale of the liquor on the shelves and not a retail sale for consumption aswell 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 itwas possible for the court, within these laws and regulations, tonote a distinctionbetween 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 asnot one prohibited by law. Appellants' third issue is directed to the award of attorney fees inthe amount of $1,800. The issuewas not contested at the trialand 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

# . , 541P.2d 56, 32 St. Rep.963. This isnot a

case factually similar toCrncevich forhere the respondent counterclaimed for attorney fees which was not contested by appellantsbefore the trialcourt. This Court in Spencer v. Robertson, 151Mont. 507, 511, 445 P.2d 48, said: "Upon appeal, this Court willconsider for review only those questions raised inthe trialcourt." See alsoRule 7(a), M.R.Civ.P. The judgment of the district court is affirmed.Justices.Mr. JusticeHaswell, dissenting: I dissent. Inmy view,,the

### - contract is a subterfuge to avoid compliancewith Montana's Liquor ControlAct, 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 contractwhich 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. 

### Ibelieve this is contrary to the purpose of the Montana Liquor ControlAct, 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.

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