Title: GARTNER v MARTIN
Citation: N/A
Docket Number: 13540
State: Montana
Issuer: Montana Supreme Court
Date: June 22, 1977

No. 13540 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 WILBERT F. GARTNER, P l a i n t i f f and Appellant, T H O M A S C. MARTIN, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g . Counsel of Record: For Appellant: B. M i l e s Larson argued, Stanford, Montana For Respondent: Theodore P. Cowan argued, Lewistown, Montana Submitted: March 9, 1977 Decided : JUN 8 F i l e d : M r . Chief Justice Paul G. Hatfield delivered the Opinion of the Court. Plaintiff Wilbert F. Gartner brings t h i s appeal from an adverse suIing.:of t h e - d i s t r i c t court, Judith Basin.County, granting summary judgment to defendant Thomas C. Martin and denying summary judgment t o plaintiff a f t e r cross-motions for summary judgment were submitted by both parties and a hearing held. Plaintiff Gartner brought an action i n d i s t r i c t court t o quiet t i t l e 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 i n possession of said beer and liquor license and admitted claiming an interest i n the license. Martin also f i l e d a counterclaim, again admitting Gartner t o be the t i t l e holder of the license, alleging that i n 1956 Martin owned the license i n question. A t that time he assigned the license t o Dewey Meyer, who in turn signed a chattel mortgage i n the sum of $16,000 against the license t o protect Martin's interest therein and the chattel mortgage was f i l e d for record with the State Department of Revenue, Montana Liquor Control Board on July 18, 1956; that Martin i s and has been the owner of Lots 1 and 2, Block 13, Original Townsite of Hobson, Judith Basin County, Montana, upon which i s located the City Club Bar where the dis- puted license was used. Thereafter several different persons were assigned the license and i n each case Martin was acknowledged in writing by each assignee a s mortgagee on the license. Gartner i s the l a s t person t o date who was assigned the license. Gartner con- sented i n 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 a f t e r M a y 1, 1974, and a breach of that lease. In reply, Gartner states the general lease agreement expired by its terms on M a y 1, 1975. Both parties moved f o t summary judgment and a f t e r a hearing and testimony by Martin, the court, a f t e r consideration of the cross-motions for summary judgment, found that Montana Retail Beer and Liquor License No. 36-452-3630-01 was subject t o the chattel mortgage held by.-Martin; that p l a i n t i f f 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 i n claiming ownership of the license. The d i s t r i c t court found as a conclu- sion of law, that Martin i s the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01. These issues are presented for t h i s Court's review: (1) Did the d i s t r i c t court e r r in entering i t s judgment determining that Montana Retail Beer and Liquor License No. 36-452-3630-01 was subject t o the chattle mortgage held by Martin? (2) Did the court e r r i n finding that Gartner never paid a reasonable price for the r e t a i l 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 i n the chattel mortgage and Martin himself drafted the mortgage on the advice of Howard King, the liquor inspector a t that time. Much discussion could be had, however t h i s case i s con- trolled 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 a f t e r approval of the Liquor Control Board. R.C.M. 1947, $4-410, states i n part: "'No transfer of any license as t o person or location shall be effective unless and u n t i l approved by the board * * *. ' "The defendant could not, within the law, operate the p l a i n t i f f s ' tavern under the existing lease u n t i l approval of the Board was given. Assignment of the p l a i n t i f f s ' licenses to the defendant was an essential step toward such approval, the same being necessary i f the Board was t o effectively preserve i t s powers and authority over the tavern operator and exercise i t s statutory duties a s pre- scribed by our codes. The lease would have been t o t a l l y useless without such assignment since the building could be used only as a tavern. A s between the parties therefore, the instruments stand together and are inseparable. "But one case i s found i n Montana similar t o the one a t bar. In Sullivan v. Marsh, 124 Mont. 415, 225 P.2d 868, the plaintiff Sullivan leased h i s hotel and bar to the defendant for five years a t $3,000 per year. The lease period was from 1944 to 1949. The defendant and one Tappa executed the agreement M a y 27, 1944, and took possession of the premises July 1, 1944, the day a f t e r the p l a i n t i f f ' s liquor licenses expired. For the next five years, the de- fendant paid for and was issued i n h i s name the necessary liquor licenses t o operate the tavern. The lease contained no provision for i t s renewal and renewal was refused by the plaintiff a few weeks prior t o i t s expiration. The defendant turned back t o the plaintiff the properties and fixtures covered by the lease but refused t o return the liquor license and applied t o the Board for a transfer to a different loca- tion. This court eventually held that the defendant had a right t o the license. The important differences i n that case from t h i s one are that (1) no assignment was necessary from Sullivan t o Marsh. Sullivan l e t h i s license expire and Marsh applied for one in h i s own name, and, (2) liquor licenses were not limited in 1944 by our quota law. They were easily obtained and held l i t t l e greater value than the renewal expenses. W e feel, therefore, that the Sullivan case i s not applicable t o the one a t bar. A t the time the lease i n the Sullivan case was executed, r e t a i l beer and liquor licenses were not the treasure they appear t o be today, because of the quota system now i n effect. " I * * * Courts of equity are not bound by cast-iron rules. The rules by which they are governed are flexible and adapt themselves t o the exigencies of the particular case. Relief w i l l be granted when, i n view of a l l the circumstances, t o deny it would permit one party t o suffer a gross wrong a t the hands of the other! Parchen v. Chess- man, 49 Mont. 326, 339, 142 P. 631, 635. " W e feel the t r i a l court erred i n not binding the lease and the assignment together and causing one t o be dependent upon the other. In her testimony, the de- fendant said she paid only the rent required - $50 - under the lease. She admitted she paid no additional sums i n connection with the tavern business t o the p l a i n t i f f . N o 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 i s inconceivable that the p l a i n t i f f intended t o relinquish h i s valuable license privileges for as l i t t l e a s $3,000 collected i n 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 t r i a l judge are affirmed, in that Martin i s the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01. m i e f Justice 1'1 W e Concur: % I , d S ( a / , ~