No. 13540 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

WILBERT F. GARTNER, 

Plaintiff and Appellant, 

THOMAS C. MARTIN, 

Defendant and Respondent. 

Appeal from: District Court of the Tenth Judicial District, 

Honorable LeRoy L. McKinnon, Judge presiding. 

Counsel of Record: 

For Appellant: 

B. Miles Larson argued, Stanford, Montana 

For Respondent: 

Theodore P. Cowan argued, Lewistown, Montana 

Submitted: March 9, 1977 

Decided : JUN 8 

Filed: 
Mr. Chief Justice Paul G. Hatfield delivered the Opinion of 

the Court. 

Plaintiff Wilbert F. Gartner brings this appeal from an 

adverse suIing.:of the-district court, Judith Basin.County, 

granting summary judgment to defendant Thomas C. Martin and 

denying summary judgment to plaintiff after cross-motions for 

summary judgment were submitted by both parties and a hearing 

held. 

Plaintiff Gartner brought an action in district court to 

quiet title to Montana Retail Beer and Liquor License No. 

36-452-3630-01, City Club Bar, Hobson, Montana. 

Defendant Martin answered admitting Gartner was the owner 

and in possession of said beer and liquor license and admitted 

claiming an interest in the license. 

Martin also filed a counterclaim, again admitting Gartner 

to be the title holder of the license, alleging that in 1956 

Martin owned the license in question. At that time he assigned 

the license to Dewey Meyer, who in turn signed a chattel mortgage 

in the sum of $16,000 against the license to protect Martin's 

interest therein and the chattel mortgage was filed for record 

with the State Department of Revenue, Montana Liquor Control Board 

on July 18, 1956; that Martin is and has been the owner of Lots 1 

and 2, Block 13, Original Townsite of Hobson, Judith Basin County, 

Montana, upon which is located the City Club Bar where the disputed license was used. 

Thereafter several different persons were assigned the 

license and in each case Martin was acknowledged in writing 

by each assignee as mortgagee on the license. Gartner is the 

last person to date who was assigned the license. Gartner con- 
sented in writing that Martin be placed on the license as a 

mortgagee on March 26, 1971. 

Martin further alleged a general lease agreement between 

himself and Gartner for one year after May 1, 1974, and a 

breach of that lease. In reply, Gartner states the general 

lease agreement expired by its terms on May 1, 1975. 

Both parties moved fot summary judgment and after a hearing 

and testimony by Martin, the court, after consideration of the 

cross-motions for summary judgment, found that Montana Retail 

Beer and Liquor License No. 36-452-3630-01 was subject to the 

chattel mortgage held by.-Martin; that plaintiff knowingly 

received said license subject to the mortgage; that defendant 

has never been paid a reasonable purchase price for said license; 

and, that Gartner violated the terms of the mortgage in claiming 

ownership of the license. The district court found as a conclusion of law, that Martin is the rightful owner of Montana Retail 

Beer and Liquor License No. 36-452-3630-01. 

These issues are presented for this Court's review: 

(1) Did the district court err in entering its judgment 

determining that Montana Retail Beer and Liquor License No. 

36-452-3630-01 was subject to the chattle mortgage held by Martin? 

(2) Did the court err in finding that Gartner never paid 

a reasonable price for the retail beer and liquor license and 

Martin is the rightful owner of Montana Retail Beer and Liquor 

License No. 36-452-3630-Ol? 

Testimony shows there was no note evidencing the $16,000 

stated in the chattel mortgage and Martin himself drafted the 

mortgage on the advice of Howard King, the liquor inspector at 

that time. 
Much discussion could be had, however this case is controlled by Beard v. McCormick, 147 Mont. 361, 364, 411 P.2d ,964, 

where the Court stated: 

"There can be no question that the lease of the 

premises and the assignment of the licenses were both 

part of the same transaction between the parties.* * *. 

Our Codes require that those dispensing liquor be 

licensed (R.C.M. 1947, $4-401) and that such licensing 

be only after approval of the Liquor Control Board. 

R.C.M. 1947, $4-410, states in part: 

"'No transfer of any license as to person or 

location shall be effective unless and until approved 

by the board * * *. ' 

"The defendant could not, within the law, operate the 

plaintiffs' tavern under the existing lease until approval 

of the Board was given. Assignment of the plaintiffs' 

licenses to the defendant was an essential step toward 

such approval, the same being necessary if the Board was 

to effectively preserve its powers and authority over the 

tavern operator and exercise its statutory duties as prescribed by our codes. The lease would have been totally 

useless without such assignment since the building could be 

used only as a tavern. As between the parties therefore, 

the instruments stand together and are inseparable. 

"But one case is found in Montana similar to the one 

at bar. In Sullivan v. Marsh, 124 Mont. 415, 225 P.2d 

868, the plaintiff Sullivan leased his hotel and bar to 

the defendant for five years at $3,000 per year. The lease 

period was from 1944 to 1949. The defendant and one Tappa 

executed the agreement May 27, 1944, and took possession 

of the premises July 1, 1944, the day after the plaintiff's 

liquor licenses expired. For the next five years, the defendant paid for and was issued in his name the necessary 

liquor licenses to operate the tavern. The lease contained 

no provision for its renewal and renewal was refused by the 

plaintiff a few weeks prior to its expiration. The defendant 

turned back to the plaintiff the properties and fixtures 

covered by the lease but refused to return the liquor license 

and applied to the Board for a transfer to a different location. This court eventually held that the defendant had a 

right to the license. The important differences in that 

case from this one are that (1) no assignment was necessary 

from Sullivan to Marsh. Sullivan let his license expire 

and Marsh applied for one in his own name, and, (2) liquor 

licenses were not limited in 1944 by our quota law. They 

were easily obtained and held little greater value than the 

renewal expenses. We feel, therefore, that the Sullivan 

case is not applicable to the one at bar. At the time the 

lease in the Sullivan case was executed, retail beer and 

liquor licenses were not the treasure they appear to be today, 

because of the quota system now in effect. 
"I* * * Courts of equity are not bound by cast-iron 

rules. The rules by which they are governed are flexible 

and adapt themselves to the exigencies of the particular 

case. Relief will be granted when, in view of all the 

circumstances, to deny it would permit one party to suffer 

a gross wrong at the hands of the other! Parchen v. Chessman, 49 Mont. 326, 339, 142 P. 631, 635. 

"We feel the trial court erred in not binding the 

lease and the assignment together and causing one to 

be dependent upon the other. In her testimony, the defendant said she paid only the rent required - $50 - under 

the lease. She admitted she paid no additional sums in 

connection with the tavern business to the plaintiff. No 

money was paid directly for the transfer of the unexpired 

licenses and no profits were shared. About a year and 

one-half before the lease expired, defendant admitted she 

told the plaintiff she thought the licenses were then worth 

$10,000 or more. 

"It is inconceivable that the plaintiff intended to 

relinquish his valuable license privileges for as little 

as $3,000 collected in the form of rent over a give-year 

period by $50 monthly installment payments." 

The instant case presents sufficiently similar facts. 

Therefore, the findings of fact and conclusion of law of the 

trial judge are affirmed, in that Martin is the rightful owner of 

Montana Retail Beer and Liquor License No. 36-452-3630-01. 

mief Justice 1'1 

We Concur: 

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