Belle'Isle v. Hempy

[15]

AGEE, J.

Plaintiff-appellant sold his liquor store and transferred its liquor license under a conditional sale agreement executed February 14, 1953, which provided that plaintiff was to retain title to the business as security for the payment of the balance of the purchase price and that, in the event of a default in the monthly payments as agreed upon, the buyers would transfer the license back to plaintiff or his nominee.

The business thereafter failed. On March 18, 1955, assignees of the original buyers, with full knowledge of appellant’s rights under the conditional sale agreement, assigned the business to respondent, as trustee for the creditors, and consented that respondent might apply for a transfer of the license.

Appellant’s demand that the license be transferred back to him in accordance with the agreement was refused by respondent on the ground that the agreement in this respect was void under the provisions of section 24076 of the Business and Professions Code. By stipulation of the parties, the respondent sold the license to a third party and retained the proceeds to await the outcome of this action. The lower court denied any recovery to appellant, and this appeal from its judgment followed.

Section 7.3 of the Alcoholic Beverage Control Act became effective October 1, 1949, and in 1953 it was placed in the Business and Professions Code as section 24076. It provides in part as follows: “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. ’ ’

There is no contention that the conditional sale agreement involved herein does not contravene this prohibition. But appellant argues that the statute does not apply where, as in this case, the license itself was issued prior to October 1, 1949.

Appellant relies entirely upon

Golden

v.

State of California,

133 Cal.App.2d 640 [285 P.2d 49], which held that a liquor license is “property” within the meaning of a federal law giving the federal government a lien for taxes “upon all property and rights to property, whether real or personal, belonging to such person [taxpayer].” (26 U.S. Code §3670.) The opinion states: “A contract to transfer a license, subject of course to approval by the state licensing agency and the other conditions and restrictions imposed by law, is valid. . . . Like any other contract, it enjoys constitutional immunity from legislative impairment. The prohibition against pledging