Tognoli v. Taroli

KAUFMAN, J.

This is an appeal by defendant and appellant from a judgment for damages in favor of plaintiff and respondent for breach of contract.

The facts briefly are as follows: Respondent leased to Salvatore Trombatore and appellant Louis Taroli a certain hotel, restaurant and bar located in Redwood City, San Mateo County, for a term that commenced on July 1, 1948, and was to end on December 3, 1955. Rent was reserved at the rate of $300 per month and the lease further provided in effect that the lessees would have transferred to them a certain on-sale general liquor license to be used in connection with the operation of the business on said premises. The lessees agreed that upon the expiration or sooner termination of the lease, they would transfer and assign the said liquor license back to the lessor.

[427]

Later, on June 6,1951, the lessee Salvatore Trombatore was released from the lease by mutual consent. On June 23, 1952, respondent Charles Tognoli brought this action against appellant alleging among other things that on May 26, 1952, appellant sold the liquor license in question to one Ruby Tretten and that said sale was made without the knowledge or consent of respondent and in violation of the terms of the lease just mentioned. Respondent prayed for damages in the sum of $15,000.

On the trial respondent relied on his cause of action based upon the violation of terms of the lease relating to the reassignment of the liquor license back to him and after the trial the trial court ordered judgment in favor of respondent and against appellant in the sum of $7,350.

The main defense at the time of trial and also the question involved on this appeal is whether or not section 7.3 of the Alcoholic Beverage Control Act is applicable to the facts of this case.

Section 7.3 of the Alcoholic Beverage Control Act, above referred to, provides that no licensee shall enter into any agreement wherein he pledges the transfer of his license as security for a loan or as security for the fulfillment of any agreement. It further provides that each application for the transfer of a license must be accompanied by, or contain a statement verified by both the transferor and transferee specifically stating that the transfer application or proposed transfer is not made to satisfy the payment of a loan or to fulfill an agreement entered into more than 90 days preceding the day on which the transfer application is filed with the board; also, that said statement shall become part of the transfer application and any misrepresentation contained in said statement shall be considered the misrepresentation of a material fact.