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Clark v. Tinnin

Supreme Court of Arizona

December 11, 1956

Charlie W. CLARK, Appellant,
v.
Earl L. TINNIN, Appellee.

Page 948

[81 Ariz. 260] F. M. Gold, Flagstaff, and Charlie W. Clark, Phoenix, in pro. per., for appellant.

Christensen & Anderson, Flagstaff, for appellee.

LA PRADE, Chief Justice.

This is an appeal by defendant-appellant Clark from a summary judgment in the court below, in favor of plaintiff-appellee Tinnin, holding that a certain 'lease agreement' between plaintiff and defendant, involving a liquor license, was null and void as against public policy. Defendant also appeals from and assigns as error the refusal of the trial court to grant his motion for summary judgment.

The uncontroverted facts appear to be as follows: In January, 1950 Tinnin applied to the Department of Liquor Licenses and Control of the State of Arizona for a series No. 9 liquor license for use in his business known as 'Toonerville' which was located about 23 miles east of Flagstaff; subsequently, in 1952, Tinnin negotiated with Clark for the latter to lease to him a liquor license; at the time of these conversations,[81 Ariz. 261] however, clark owned no liquor license, although he and one Spear had an application pending for a license; the record does not disclose whether both Clark's and Spear's names were on that application or only that of Spear; in any event, in 1952, Tinnin filed a second application through Clark, after agreeing to take a lease from Clark; on June 8, 1952, Tinnin signed a lease agreement with Clark which inter alia stated that Clark was the owner of a liquor license and prohibited the transfer of the license by Tinnin either to a third party or to another location without the approval of Clark; said agreement was to run from the date of issuance of the license to Tinnin to December 31, 1954, and the rental was to be five per cent of the gross sales, payable monthly; on June 9, 1952 the Department of Liquor Licenses and Control issued a series No. 9 retail liquor license to Tinnin, whose name alone appeared on both of his applications; Clark's name did not appear on Tinnin's application or on the license when issued, although it is worthy of note that the license was mailed to Clark, rather than to Tinnin directly, by the Department; in July, 1954, Tinnin applied to the Department of Liquor Licenses and Control for permission to transfer the license under which he was operating to a third person, but was informed that such a transfer could not be effected without the consent of Clark or until the lease agreement on file with the Department had been invalidated by a court or competent jurisdiction; on November 12, 1954, Tinnin commended this action and in June, 1955, his motion for summary judgment was granted.

The issues befoe this court are three: (1) is an agreement whereby one party applies to the Department of Liquor Licenses and Control for a liquor license for the benefit, in whole or in part, of an undisclosed principal valid and enforceable; (2) if such an agreement is illegal is plaintiff herein estopped to contest it; and (3) was the refusal of the Superintendent of the Department of Liquor Licenses and Control to transfer Tinnin's license to another without Clark's permission such a decision by the Superintendent as required Tinnin to appeal it within ten days or be thereafter barred by res judicata.

Chapter 72 of the Arizona Code, 1939, governs the subject of spirituous liquors, including the licensing of applicants and the transfer of licenses. Section 72-105, 1952 Cum.Supp., A.C.A. 1939 (now A.R.S. § 4-201) entitled 'Application for license' reads in part as follows:

'(a) Any person desiring a license to manufacture, sell, or deal in spirituous liquors shall make application therefor to the superintendent of liquor

Page 949

licenses and control on a form prescribed and furnished by him.

[81 Ariz. 262] '(d) Upon the receipt of an application for a spirituous liquor license, the superintendent shall place the same on file until the expiration of the time fixed for the certified order by the governing body of the city or town or the board of supervisors, and shall consider such order together with other facts in the possession relating to the qualifications of the applicant.'

A license to sell spirituous liquors in in the nature of a privilege granted pursuant to the police power of the state. No one has an absolute right to the issuance of such a license, but on the contrary must conform to the standards prescribed by the statute in order to qualify for one. Stanton v. Superior Court, 55 Ariz. 514, 103 P.2d 952; 48 C.J.S., Intoxicating Liquors, § 135; 30 Am.Jur., Intoxicating Liquors, Section 76. A liquor license is generally considered a personal privilege. 4, C.J.S. Intoxicating Liquors, § 109; 30 Am.Jur., ibid, Section 109. The mere fact that it is transferable with the approval of the state does not alter its personal nature. In Arizona an applicant must be a citizen of the United States and a bona fide resident of the State of Arizona, and must not have violated any provision of a spirituous liquor license previously issued or had such a license revoked within one year prior to application, or within two years been convicted of a felony. Section 72-106(a, b), 1952 Cum.Supp., A.C.A. 1939 (now A.R.S. § 4-202).

In order for the Superintendent of the Department of Liquor Licenses and Control to be in a position to judge the qualifications of each applicant for a license, Section 72-105, supra, requires 'any person desiring a license' to apply to said superintendent 'on a form prescribed and furnished by him'. Obviously any person who fails to make such an application does not submit himself to the scrutiny required by the specific wording of the statute. In the case at bar Clark's name was not on either application submitted to the Superintendent of the Department of Liquor Licenses and Control by Tinnin. Section 72-108, A.C.A. 1939, A.R.S. § 4-203, in part provides that

'The superinendent shall issue a spirituous liquor license only upon satisfactory showing of the capability, qualifications, and reliability of the applicant, * * *.'

The language presupposes that the person making application for a liquor license will be the true owner thereof and will not, in fact, be acting for another who is 'undisclosed'. If Clark desired an interest in the prospective license applied for by Tinnin it was incumbent on him to list himself as one of the applicants. Failing in this he neglected to meet the very clear [81 Ariz. 263] and unambiguous requirements of the licensing statute as administered by the Department of Liquor Licenses and Control, and, as a result, acquired no rights of any kind in the license issued in Tinnin's name alone.

Defendant Clark argues that this entire transaction was in the nature of a transfer and, therefore, valid, citing Hom Moon Jung v. Soo, 1946,64 Ariz. 216, 167 P.2d 929. The facts not only do not support such a conclusion but on the contrary disclose rather the acquisition of a license by an applicant for the benefit of an undisclosed principal. If Clark had been issued a license by the Department of Liquor Licenses and Control and then subsequently transferred it to Tinnin, with the necessary approval of the Superintendent, then the Hom Moon Jung case would control. But the Department never issued a license to Clark. He had absolutely nothing to transfer to Tinnin. In fact, the lease agreement between the two parties which was executed on June 8, 1952 recited the fact that Clark owned ...


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