No. 13540 INTHE SUPREME COURT OF THE STATE OF MONTANA 1977

WILBERT F. GARTNER, Plaintiff and Appellant,

THOMAS C. MARTIN, Defendant and Respondent.

Appeal from: DistrictCourt of the Tenth Judicial District, Honorable LeRoy L. McKinnon, Judge presiding. Counsel of Record: For Appellant: B. MilesLarson argued, Stanford, Montana For Respondent: Theodore P. Cowan argued, Lewistown, Montana

Submitted: March 9, 1977 Decided: 

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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-districtcourt, JudithBasin.County, granting summary judgment to defendant Thomas C. Martin and denying summary judgment toplaintiff aftercross-motions for summary judgment were submitted by both parties and a hearing held.Plaintiff Gartner brought an action indistrict court to quiet title toMontana RetailBeer and Liquor License No. 36-452-3630-01, City Club Bar, Hobson, Montana. Defendant Martin answered admitting Gartner was the owner and inpossession of saidbeer and liquor license and admitted claiming an interest inthe license. Martin also filed a counterclaim, again admitting Gartner

tobe the titleholder of the license, alleging that in 1956 Martin owned the license inquestion. Atthat time he assigned the license toDewey Meyer, who in turn signed a chattel mortgage in the sum of $16,000 against the license toprotect Martin's interest therein and the chattel mortgage was filed for record with the StateDepartment 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 severaldifferentpersons were assigned the license and ineach caseMartin was acknowledged inwriting by each assignee asmortgagee on the license. Gartner 

### isthe last person to date who was assigned the license. Gartner con-sented inwriting 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 afterMay 

### 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, afterconsideration of the cross-motions for summaryjudgment, found that Montana Retail Beer and Liquor License No. 36-452-3630-01 was subject to the chattelmortgage heldby.-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 inclaiming ownership of the license. The district court found as a conclusion of law, that Martin isthe rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01. These issues arepresented for this Court's review: (1) Did the district court err in entering 

### itsjudgment determining thatMontana Retail Beer and Liquor License No. 36-452-3630-01 was subject to the chattle mortgage held by Martin? (2) Did the court err infinding that Gartner never paid

a reasonable price for the retailbeer and liquor license and Martin 

### is the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-Ol? Testimony shows therewas no note evidencing the $16,000 stated in the chattelmortgage 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 controlledby Beard v. McCormick, 147Mont. 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 transactionbetween the parties.*

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# *. Our Codes require that those dispensing liquorbe 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 inpart: "'No transfer of any license as toperson or location shallbe effectiveunless and until approved by theboard

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# *.' "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 effectivelypreserve itspowers and authority over the tavern operator and exercise its statutory duties asprescribed by our codes. The lease would have been totally useless without such assignment since the building could be used only as a tavern. Asbetween the parties therefore, the instruments stand together and are inseparable. "But one case 

### is found inMontana similar to the one atbar. In Sullivanv. Marsh, 124Mont. 415, 225 P.2d 868, the plaintiff Sullivan leased hishotel 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 afterthe plaintiff's liquor licenses expired. For the next fiveyears, the defendant paid for and was issued in hisname the necessary liquor licenses to operate the tavern. The lease contained no provision for itsrenewal 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 toreturn the liquor license and applied tothe Board for a transfer to a different location. This court eventually held that the defendant had a right to the license. The important differences inthat case from this one are that (1) no assignment was necessary from Sullivan toMarsh. Sullivan lethis license expire and Marsh applied for one inhis own name, and, (2) liquor licenses were not limited in 1944 by our quota law. They were easily obtained and held littlegreater value than the renewal expenses. We feel, therefore, that the Sullivan case isnot applicable tothe one atbar. Atthe time the lease in the Sullivan casewas executed, retailbeer and liquor licenses were not the treasure they appear tobe today, because of the quota systemnow ineffect."I*

# ** Courts of equity arenot bound by cast-iron rules. The rulesby which they are governed are flexible and adapt themselves tothe exigencies of the particular case. Relief 

### willbe granted when, inview of allthe circumstances, to deny itwould permit one party to suffer a grosswrong atthe hands of the other! Parchen v. Chessman, 49 Mont. 326, 339, 142 P. 631, 635. "We feel the trialcourt erred innot binding the lease and the assignment together and causing one to be dependent upon the other. Inher testimony, the defendant said she paid only the rent required

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# - 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 licenseswere then worth $10,000 or more. "It 

### isinconceivable that the plaintiff intended to relinquish his valuable license privileges for as little as $3,000 collected inthe 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 trialjudge are affirmed,in thatMartin 

### is the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01.

mief Justice 

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We Concur: 

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