Rondos v. Superior Court

VAN DYKE, P. J.

This is a proceeding in prohibition, Prior to January 16, 1956, George Rondos, petitioner herein, and Marvin Caesar, as copartners, owned and operated a business in the city of Vallejo known as the Stork Club, which business they operated under an on-sale license issued by the Department of Alcoholic Beverage Control. On that day Rondos, Caesar and Edward Essy, real party in interest herein, entered into a written agreement, the substance of which, so far as here material, is as follows: Caesar agreed to sell to Essy his one-half interest in the business, including

[192]

all the assets thereof, and Rondos consented to that sale. Rondos and Essy agreed between them that they would form a partnership for the further conduct of the business and all three agreed to take steps to have the existing license transferred to the new partnership. The purchase price from Essy to Caesar was placed in escrow and it was agreed that title to Caesar's half interest in the business and its assets would pass upon the closing of the escrow after the issuance of the new license. This stipulation of the agreement is in harmony with title 4, section 60, subdivision (d) of the California Administrative Code, which in respect of transferring on-sale licenses provides: ‘1 The transfer of title to the licensed business shall coincide with the transfer of the license.” (See

Lenchner

v.

Chase,

98 Cal.App.2d 794 [220 P.2d 921].) The stipulation is also in harmony with section 23300 of the Business and Professions Code, which provides: “No person shall exercise the privilege or perform any act which a licensee may exercise or perform under the authority of a license unless the person is authorized to do so by a license issued pursuant to this division. ’ ’ The new license has never been issued, the escrow has never been closed, and according to the stipulation in the agreement and by virtue of the rule and the statute title to the business and its assets thus agreed to be purchased and sold has never passed from Caesar to Essy. The parties to the agreement promptly applied to the Department of Alcoholic Beverage Control for a transfer of the license in accordance with the agreement, and hearings were held, but no transfer was authorized and no new license was issued. After the matter had been pending for something over a year Rondos served upon Essy notice of rescission of the agreement and ■ thereupon notified the department that he was withdrawing the application for transfer of the license. Upon this action being taken, Essy filed an action in the respondent court against Rondos and Caesar, the material allegations of the complaint being as follows: That on January 16, 1956, Caesar, Rondos and Essy agreed that Essy would become a partner with the other two in the ownership and operation of the business known as the Stork Club in Vallejo, and that they thereupon executed the aforesaid agreement, copy of which was attached to the complaint as Exhibit A; that the three thereupon entered into partnership and carried on the business and had ever since so continued until Caesar and Rondos breached the agreement (Exhibit A); that Essy had fully complied with the terms of the agreement, but that Caesar