                                         ido. 13270

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

                                             1976



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                                 P l a i n t i f f s and A p p e l l a n t s ,

           -Vb   -
MYRhTA SVEJKOVSKY,

                                 D e f e n d a n t and Kespondent.



           CTOLLL;    '11s r i c t CourI: of t h e ISighteenth J u d i c i a l D i s t r i c t ,
                           t
                      d o n o r a b l e W. W . L e s s l e y , J u d g e p r e s i d i n g .

i ; o u ~ l s e lof Record :

       For Appellants :

               Murphy, R o b i n s o n , Hecka t h o r n and P h i l 1 i p s ,
                Ka l i s p e l l , Montana
               3 u u g l a s D. D a s i n g e r a r g u e d , K a l i s p e l l , Montana



               Brown, P e p p e r and Kommers, Bozeman, Montana
               James M. Kommers a r g u e d , Bozeman, Montana

                                                                 ---




                                                     Submitted:              August 31, 1 9 7 6

                                                         Ilecided:       '
                                                                                  -
                                                                                 7 lcJq@
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 counter-

claimed. The district court, Gallatin County, found for de-

fendant 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.
        P l a i n t i f f a p p e l l a n t s r a i s e d t h r e e i s s u e s on a p p e a l :

        1.    Was t h e c o n t r a c t f o r such a s a l e i l l e g a l , a s

c o n t r a r y t o law?

        2.    Was t h e t r a n s f e r of t h e l i q u o r a s a l e p r o h i b i t e d by

law?

        3.    W s defendant e n t i t l e d t o judgment f o r a t t o r n e y f e e s
               a

i n t h e amount of $1,800.

       A p p e l l a n t s a t t a c k t h e t r i a l c o u r t ' s f i n d i n g of f a c t No.

5 which s t a t e d :

        "That t h e agreement between t h e p l a i n t i f f s and t h e
        defendant w a s n o t i n t e n d e d t o t r a n s f e r any i n t e r e s t
        i n t h e l i q u o r l i c e n s e owned by t h e VW Club, n o r
                                                                     F
        d i d t h e s a i d agreement r e q u i r e any a c t s t h a t were
        i l l e g a l o r a g a i n s t p u b l i c p o l i c y . 11

A p p e l l a n t s argue t h a t s e c t i o n 4-150 (now 4-1-201),                   R.C.M.

1947, provided i n p e r t i n e n t p a r t :

        " S a l e of l i q u o r unlawful, when              ---foreign substance
        i n l i q u o r forbidden---possession of l i q u o r , when
        unlawful.          (1) Except a s provided by t h i s A c t , no
        person s h a l l , w i t h i n t h e s t a t e , by h i m s e l f , h i s c l e r k ,
        s e r v a n t , o r a g e n t , expose o r keep f o r s a l e , o r
        d i r e c t l y o r i n d i r e c t l y o r upon any p r e t e n s e , o r upon
        any d e v i c e , s e l l , o r o f f e r t o s e l l , o r i n c o n s i d e r a -
        t i o n of t h e purchase o r t r a n s f e r of any p r o p e r t y , o r
        f o r any o t h e r c o n s i d e r a t i o n , o r a t t h e time of t h e
        t r a n s f e r of any p r o p e r t y , g i v e t o any o t h e r person any
        liquor. II

They a l s o argue t h a t s e c t i o n 4-420 (now 4-4-407),                         R.C.M.       1947,

f u r t h e r p r o h i b i t s t h e s a l e of any a l c o h o l i c l i q u o r by any

person n o t a l i c e n s e e .         I n view of t h e f a c t t h a t Svejkovsky

d i d n o t own t h e l i c e n s e , t h e V.F.W.           Club d i d , a p p e l l a n t s a r g u e

t h e s a l e was i n d i r e c t v i o l a t i o n of e x p r e s s s t a t u t o r y p r o v i s i o n s

and i l l e g a l .

        W f i n d t h e f a c t u a l p o r t i o n of t h e c o u r t ' s f i n d i n g s
         e                                                                                           .

v a l i d f o r t h e r e was no r e a l evidence i n t r o d u c e d t o o f f s e t
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 testi-
mony 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 Svejkovsky.

       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 pre-
       vailing 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' m   d 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 t h e f a c t s of t h e i n s t a n t case we ha,ve a bulk s a l e

of t h e l i q u o r on t h e shelves and n o t a r e t a i l s a l e f o r con-

sumption a s well a s a s a l e of a management i n t e r e s t i n t h e

V.F .W. Club.         Here ~ o n t a n as law and l i q u o r r e g u l a t i o n s
                                         '                                               provide

a unique method t o operate t h i s type of club and i t was p o s s i b l e

f o r t h e c o u r t , w i t h i n t h e s e laws and r e g u l a t i o n s , t o n o t e a

d i s t i n c t i o n between t h e t r a n s f e r of a l i c e n s e and t h e t r a n s f e r

of a business conducted under a l i c e n s e .                  W affirm the t r i a l
                                                                  e

c o u r t ' s finding allowing t h e t r a n s f e r a s n o t one p r o h i b i t e d by

law.

       Appellants' t h i r d i s s u e i s d i r e c t e d t o t h e award of a t t o r n e y

f e e s i n t h e amount of $1,800.              The i s s u e was not contested a t

t h e t r i a l and i s r a i s e d h e r e f o r t h e f i r s t time on appeal.

Appellants c o n t e s t t h e award of t h i s amount by c i t i n g a r e c e n t

decision of t h i s Court, Crncevich v. Georgetown Recreation Corp.,

         Mont   .          , 541     P.2d 56, 32 S t . Rep.963.             This i s n o t a

c a s e f a c t u a l l y s i m i l a r t o Crncevich     f o r h e r e t h e respondent

counterclaimed f o r a t t o r n e y f e e s which was n o t contested by

a p p e l l a n t s before t h e t r i a l c o u r t .   This Court i n Spencer v.

Robertson, 151 Mont. 507, 511, 445 P.2d 48, s a i d :

        "Upon appeal, t h i s Court w i l l consider f o r review
        only those questions r a i s e d i n t h e t r i a l court."

See a l s o Rule 7 ( a ) , M.R.Civ.P.

       The judgment of t h e d i s t r i c t c o u r t i s 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. '
