A. D. Jones Co.
v.
Parsons

Supreme Court of Colorado. En BancDec 9, 1957
136 Colo. 434 (Colo. 1957)
136 Colo. 434319 P.2d 480

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No. 18,036.

Decided December 9, 1957. Rehearing denied January 13, 1958.

Action to recover deposit made as down payment on purchase of a restaurant business. Judgment for defendant.

Reversed and Remanded With Directions.

1. TRIAL — Motion to Dismiss — Denial. Ordinarily the denial of a defendant's motion to dismiss entitles him to go forward with proof in support of his denials and the affirmative matter set up in his answer; it is tantamount to a finding that plaintiff has made out a prima facie case.

2. INTOXICATING LIQUORS — License — Rights Conferred. A liquor license vests a personal right in the licensee and confers the right to do that which without the license would be unlawful, such right being coextensive with the duration of the license and is restricted to a certain location, unless change thereof is granted upon application to, and after a hearing by, the licensing authority.

3. License — Character — Revocation. Though not technically property, a liquor license is a valuable right and possesses some of the characteristics of property, and it may be revoked for breach of the conditions upon which it was issued.

4. Sale — Contractual Limitations. Contractual limitations on the sale of intoxicating liquors, which place restrictions on the sale of such liquors greater than the statute imposes, are sanctioned by the law.

5. License — Location — Removal. While the statute permits removal to another location of a hotel or restaurant license upon a proper showing, a contract by which the parties agree that the licensee will not exercise this privilege, but upon termination of the tenancy will surrender the license to the licensing authority, is not is violation of the law since it is not an agreement for the transfer of the license.

6. CONTRACTS — lease — Rider — Concealment. Where plaintiff's refusal to consummate the purchase of a restaurant was based upon the alleged invalidity of a rider to the lease, his charge that defendants fraudulently concealed such rider from him, was without support in the evidence.

Error to the District Court of the City and County of Denver, Hon. Edward J. Keating, Judge.

Messrs. CHISHOLM, HOWARD DAANE for plaintiffs in error.

Mr. GAIL. HADDOCK Mr. PAUL DWYER, for defendant in error.


THE trial court adjudged "that [Jones] return to [Parsons] the $1000.00 that was given as a down payment wit interest thereon at the legal rate from the time of filing of this suit, and for their [sic] costs expended in this matter." Although the suit against Fishburn was dismissed, he joins Jones in asking us to reverse this judgment on the theory, apparently, that the judgment, erroneously entered, adversely affected him in that the $1000.00 deposit was, by the terms of the contract, to be divided between him and Jones in the event Parsons defaulted.

Whether the judgment should be reversed depends upon the resolution of three questions. (1) Under the circumstances of the case was it error for the trial court, in denying defendants' motion for dismissal at the conclusion of plaintiff's case, to enter judgment for the plaintiff without giving defendants the opportunity to present their proofs? (2) Did the seller of the business and the buyer violate The Liquor Code of 1935, and act contrary to the public policy thereof, in entering into a contract by the terms of which the buyers agreed not to transfer the liquor license to another location, but upon termination in anywise of the lease of the premises in which the business was conducted, the liquor license would be surrendered to the licensing authority in favor of the landlord? (3) In view of the claims of the plaintiff, and evidence adduced in support of them, did the trial court properly enter judgment for the return of the deposit to the plaintiff?

By the first count of his complaint Parsons sought to recover the $1000.00 deposit made on a receipt and option agreement, dated September 27, 1954, wherein Parsons was the buyer and A.D Jones Company the agent for the seller Fishburn. According to this count, Parsons "was to be granted the licenses necessary to operate the" business "known as the Jackspot's Restaurant," and the "defendants were to provide a proper lease" under which the business could be operated. It further alleged that "defendants were unable to provide a legal or proper lease" under which Parsons could "legally operate" the business.

In the second count of the complaint he alleged by incorporation the receipt and option agreement, the deposit and the relationship of the parties. He further alleged that defendants "were to arrange for a transfer of the ease" to the premises; that a rider was attached to the lease containing the following provisions, among others:

"No. 2. It is expressly understood and agreed that the 3-way liquor license, when issued to the lessees, shall at all times remain at the premises known as 8300 West Colfax Avenue, Lakewood, Colorado, and that said liquor license shall not be removed or transferred therefrom."

"No. 5. Upon the expiration of this lease or any renewal term thereof, or the termination of said lease for any reason, the lessees hereby agree that immediately upon demand of the lessor, the liquor license or licenses shall be surrendered to the proper licensing authorities in favor of the lessor or his assigns."

The remaining averments of the second count allege in substance that defendants fraudulently concealed the provisions of the rider from Parsons; that such provisions are violate of The Liquor Code of 1935; that Parsons could not pay the obligation arising from the contract within the term of the lease; that he would not have entered into said agreement for the purchase of said business had he known that the lease contained the rider; that he terminated the agreement and demanded to no avail the return of his deposit; and that by reason of the foregoing matters he be awarded $1000.00 damages and $1500.00 exemplary damages.

It becomes unnecessary to relate the purport of, or to consider, the defense addressed to these counts in consequence of the trial court's treatment of defendants' motion to dismiss made at the conclusion of the plaintiff's evidence. The defendants moved for dismissal and, after argument on the motion, the court entered judgment in favor of plaintiff in the sum of $1000.00 against the defendant A.D. Jones Company.

By the turn of events in this case a pure question of law emerged from plaintiff's evidence. The testimony discloses that all Parsons' objections to the agreement were removed except those relating to the two provisions in the rider to the lease. Thus, distilled from the evidence is the single question of the legality of these provisions. If illegal, the trial court properly held for plaintiff; if legal, his decision is erroneous.

Ordinarily, the denial of the defendant's motion for dismissal at the close of plaintiff's case entitles the defendant to submit proofs in support of his denials and the affirmative matter set up in his answer. Porter v. Pincock, 44 Ida. 235, 256 Pac. 93; Solomon v. Shepard Co., 61 R.I. 332,