Saso v. Furtado

Appeal by defendant Inez Purtado from an order requiring her to execute an application for a transfer to plaintiff of a certain liquor license. The attorney general filed an amicus curiae brief on behalf of the State Board of Equalization. An additional amicus curiae brief was filed on behalf of appellant.

Questions Presented

1. Is the order void as being a judicial amendment of a prior judgment?

2. Is section 7.3 of the California Alcoholic Beverage Control Act retrospective as to rights accrued prior to its enactment?

While a liquor license must be renewed yearly and the license issued is a separate document from that issued the year before, it is considered the same license. The parties so treated it in the lease and the court so treated it in its judgment. The order, therefore, was not void.

2.- Section 7.3 of the Alcoholic Beverage Control Act Is not Betroactive.

This section became effective October 1, 1949. The exact date when plaintiff’s right to a retransfer of the license accrued is not set forth in the record. However, it is not im

It is the position of the defendant as well as the attorney general, that section 7.3 affects all agreements concerning liquor licenses whether entered into before or after the act took effect. However, we are not concerned with that question. The right of plaintiff to a transfer to him of the license accrued long prior to that time. Moreover, the adjudication of his right also took place prior to that time. So the question we have to determine is whether the Legislature intended by the enactment of section 7.3 to affect rights accrued prior thereto.

In referring to rights which accrued under the lease we have in mind that a liquor license is a privilege rather than a strict right, such as a right to deal in ordinary commodities (State Bd. of Equalization v. Superior Court, 5 Cal.App.2d 374 [ 42 P.2d 1076 ]) ; nor is it a contract (idem, p. 377; see, also, Rosenblatt v. State Bd. of Pharmacy, 69 Cal.App.2d 69 [ 158 P.2d 199 ]); its revocation does not violate the due process clause, and such revocation may be made without notice or hearing and without invading any constitutional guarantees (State Bd. of Equalization v. Superior Court, supra, p. 377). We are using the word “rights” in the sense of the rights or obligations in a license as between parties to a contract, which rights have not been affected by a statute although such rights could be so affected if the Legislature

Assuming, therefore, that the Legislature had the right to make section 7.3 retroactive, did it do so to rights already accrued and adjudicated? There is nothing in the Alcoholic Beverage Control Act as a whole nor in section 7.3 which indicates that such was the legislative intent, other than, possibly, the requirement in that section that the application for transfer must contain a verified statement that the application or the proposed transfer is not made to fulfill an agreement entered into more than 90 days preceding the date of filing the application. It is interesting to note that there is no direct inhibition against an agreement to transfer which is more than 90 days old. The only direct inhibition is that no licensee shall enter into any agreement wherein he pledges the transfer of his license for a loan or as security for the fulfillment of any agreement. There is no inhibition against an agreement to transfer. However, in the procedural portion of the section, there is a requirement that the application for transfer state that any agreement on the subject is not more than 90 days old. This provision is not sufficient to indicate any intent on the part of the Legislature to deny a transfer' to a person whose right to a transfer, at least as between him and the other party to the agreement, has already accrued. “It is a canon of interpretation that statutes are not to be given a retrospective operation unless it is clearly made to appear that such was the legislative intention.” (In re Cate, 207 Cal. 443 , 448 [ 279 P. 131 ].) “It is also an established rule that a statute is not to be construed so as to have a retroactive effect unless the intent that it is to be retroactive clearly appears from the statute itself.” (Estate of Potter, 188 Cal. 55 , 65 [ 204 P. 826 ].) To so hold, in the absence of evidence of a direct legislative intent to do so, would make the courts a party to a fraud. Here defendant entered into a then binding and legal agreement to retransfer the license upon the termination of the lease. The lease terminated- and she

Castleman v. Scudder, 81 Cal.App.2d 737 [ 185 P.2d 35 ], cited by the attorney general, is distinguishable from our case. There appellants were business opportunity brokers who had secured certain broker’s agency contracts which did not have termination dates. After these contracts were obtained the Legislature adopted section 10301(f) of the Business and Professions Code which prohibited the practice of demanding or claiming a fee under such a type of contract. The Real Estate Commissioner revoked appellants’ brokers’ licenses because they demanded fees under these contracts. In a proceeding brought to mandamus the commissioner to restore the licenses the court held that the section applied to contracts executed before its adoption, pointing out that the mere holding of such an agreement was not grounds for revocation of licenses, but it was the practice of demanding or receiving fees under such agreements after the effective date of the act which supplied such grounds. It differs thereby from the statute in question here. The section obviously did not affect fees earned and accrued prior to its adoption. Again there the agreements were still in effect, and rights thereunder were to accrue in the future; whereas in our case the lease terminated, the rights accrued, and a judgment established those rights, all before the effective date of the act.

3. The Agreement Was not Void.

The attorney general, appellant and amicus curiae on behalf of appellant contend that the agreement to retransfer the license was void and contrary to public policy. They are able, however, to point out no provision of the Alcoholic Beverage Control Act which makes such agreement void nor any authority that it is contrary to public policy. Of course, the transfer is subject to the approval of the Board of Equalization. In all the arguments made by the above-mentioned parties they disregard this fact and attempt to construe the agreement and the judgment as an absolute right to a

The second opinion, N. S. 3405, dated April 3, 1941, is likewise not in point. There the attorney general merely advised that the determination of the court as to who was entitled to request a transfer of the liquor license was binding on the board. There Besaw leased to Kileys certain property. Evidently the lease provided that on a failure to renew the lease the license should be retransferred to Besaw. However, there was a provision which stated that if the lessor sold the property the license would remain the property of the lessee. Besaw sold the property, and thereby the license vested in Kileys. Later Kileys applied for a transfer of the license to one Reese. The board made such transfer. Besaw attempted to transfer the license to a Mrs. Piper, who sued in the Tuolumne superior court to compel a transfer of the license to her. The court held that by the sale, the license vested in Kileys and that Mrs. Piper had no interest in the license as Besaw had nothing to transfer. Mrs. Piper applied to the board for a transfer to her. The attorney general advised the board that the board was warranted in disregarding the protests of Mrs. Piper and issuing the license to Reese because of the court’s conclusion that under the terms of the lease she was not entitled to it. Actually the attorney general’s opinion on this point supports our conclusion here.

The third opinion, 287 (47/103), dated June 9, 1947, deals with the question of whether, where certain premises were leased and the lessee obtained a transfer of the liquor license from the lessor to himself, the Board of Equalization was required to recognize an agreement of the lessee to retransfer the license to the lessor. The attorney general concluded (1) executory agreements for the transfer of alcoholic beverage licenses are not binding on the board (we agree with this interpretation to the extent that the Board of Equalization may use its discretion as in all other applications for transfer of license); (2) the board may act only upon an adequate, formal application for license by the proposed transferee-licensee (we agree with this interpretation); (3) agreements to retransfer such licenses or for the hypothecation thereof which purport to provide for any control by the person in whose favor such contract is made over the license or the licensee’s licensed

As the agreement to retransfer as between the parties is not prohibited by the act, and as such agreements must be viewed in the light of the act which makes the transfer of all licenses subject to the discretion of the board, there is nothing illegal in such an agreement, nor is it in any way contrary to public policy.

Teachout v. Bogy, 175 Cal. 481 [ 166 P. 319 ], has no application here. In that case the licensee agreed to sell to Bogy Bros, a certain lease and a saloon license issued by the city of Los Angeles. The lease and license were to be signed in blank and left in escrow until the purchase price of $16,500 was paid at the rate of $200 per month. Bogy Bros., in the meantime, were to carry on a saloon business on the premises under the license without any transfer thereof. The court held that as a saloon license is personal to the licensee and authorizes him alone to carry on the business, the agreement to allow the purchaser to conduct the business under that license was really an agreement to carry on the saloon business in violation of the law and hence void. In our case there is no agreement to carry on the liquor business with someone else’s license. Here it is simply an agreement to retransfer the license, subject, of course, to the board’s rules. Nor does the case of Hooper v. Barranti, 81 Cal.App.2d 570 [ 184 P.2d 688 ], apply. There the agreement provided for the conduct of a partnership liquor business under the license of one of the individual partners. This court properly held that such an agreement was contrary to public policy as the Alcoholic Beverage Control Act prohibits any person from conducting a liquor business without a license issued to such person and “person” is defined in section 2 of the act to include a partnership.

While decisions from other states are not always determinative due to the difference in their license laws from ours, the Michigan ease of Roodvoets v. Anscer, supra ( 13 N.W.2d 850 ), is pertinent, as the Michigan law was similar to our Alcoholic

Defendant cites several cases in New Jersey to the effect that liquor licenses are not transferable. However, the New Jersey statute expressly prohibits such transfers.

Prior to the filing of suit herein defendant signed an application to transfer the license to Mitchell and Raffanti. The attorney general states that there is pending in the Superior Court of Sacramento County a proceeding brought by said Mitchell and Raffanti against the commissioner appointed in our case to sign the application to transfer, and the State Board of Equalization to compel a transfer of the license to them. The attorney general is concerned, in view of that litigation, whether the board is required to recognize the status of plaintiff in this case. The attorney general’s opinion N. S. 3405 above mentioned answers his concern. There he advised the board to accept the court’s determination as to who was the proper person to consider as transferee. The board is required to recognize plaintiff as the transferee-applicant for a license, and the commissioner as the transferor. (Apparently defendant has refused to sign the application.)

The order is affirmed.

Peters, P. J., and Wood (Fred B.), J., concurred.

Appellant’s petition for a hearing by the Supreme Court was denied August 9,1951.