State ex rel. Columbia Club v. McMaster

1. Liquor Licenses — Social Clubs. — The statutes of this State regulating taverns at which the sale of liquor without license is forbidden, were not intended to include social clubs, but only the ordinary drinking saloons which sell liquor for a profit as a. means of livelihood. 2. Municipal Power — Licenses.—Municipalities have only such power as is given to them by the legislature, and their right to require licenses for business or other purposes must be derived from statute. 3. Liquor Licenses — .Social Clubs. — A chartered club of limited membership, bona fide organized for social purposes and with no intent of evading the law, purchased liquor with its funds, and distributed the same from day to day among such of its members as wished it at such price as was considered sufficient to reimburse the club for its outlay in the purchase of these liquors. None but members could call for or pay for liquor or drinks, and the receipts fell short of full repayment for the liquor purchased. Held, that this was distribution among the members of the club and not a sale of liquor within the moaning of the statutes of this State forbidding such sale without license. A city council, therefore, under the authority to grant liquor licenses, could not require a license fee from such club and charge a foe therefor.

This was a proceeding by prohibitioo. The Circuit Judge rendered the following judgment: The plaintiff is a duly incorporated social club, which out of its common fund purchased liquors in the name of the club, and kept the same for the benefit of all its members. These liquors were kept, with other supplies of the club, in the butler’s pantry or in the appropriate place therefor. There was in the club room no liquor ,pr wine room, to which the members had the right to resort and drink free of charge, but any member of the club; in the club house, could give an order to a servant or attendant in the club, or to the steward, written or verbally, at his option, and the liquor so ordered was served to him. He then, at the time it was served, paid for it to the steward, or signed a memorandum check which was written out, and he-paid for it afterwards as charged against his account which was furnished to him at the end of the month. No one but a member could pay for such liquor as ordered. A member could bring a non-resident friend. Except in this way, no one but a member could be admitted. This disposition of liquor was not for the purpose of making a profit out of a member, nor for the purpose of evading the law. The club had no license to sell liquors. In South Carolina there is a simple law in regard to licenses and sale of liquors, to wit, it is prohibited absolutely throughout the State except in incorporated towns and cities, and then can be sold only when a license has been granted by the authorities of the place. The main question in this case is, whether the disposition by the plaintiff of liquors in the manner herein indicated was in contravention of the statute. Was it a sale of the prohibited article? This question has been much discussed in the courts' of other States. They are widely divergent. I will make no attempt to reconcile them, preferring to vest my decision on the case of State (Mayor, &c., of the city of Newark, prosecutor) v. JSssex Club, Supreme Court of New Jersey, November 17, 1890, 20 Atl. Rep., 769. The case is similar to the present, and in it are discussed the conflicting cases. Without going into this discussion, that case rests its reasons much on the case of State v. Loekyear, 95 N. C., 633, and decides that the transaction mentioned constituted a complete sale of liquor, having all its elements, and decided the case against the Essex Club. I hold that the facts mentioned in this case constitute a sale of liquor by the club,.and that the club is liable to pay a license to the city of Columbia; and therefore the plaintiff is not entitled to the writ of prohibition, and the proceedings must be dismissed, and it is so ordered. I reserve to myself the privilege of giving my reasons for this judgment more fully hereafter, and to file the same as part of this case. Afterwards his honor filed the following opinion : Under the law’ of South Carolina, the sale of intoxicating liquor is prohibited outside of incorporated cities, towns, and villages, and is allow’ed within the corporate limits thereof only upon license duly granted by the municipal authorities. In some of the cities, towns, and villages of the State it is prohibited by special legislative enactment or by local option under sanction of law. The statute law is contained in chapter LV., pages -507, 508, sections 1731-1737 inclusive, of the General Statutes.. In the city of Columbia licenses are granted by the city council. On 23rd day of December, A. D. 1890, the city council ratified and published an ordinance to regulate licenses for the year A. D. 1891, the 7th section of which reads as follows : “For a license to carry on any permanent or transient trade, business, or profession, the sums hereinafter mentioned shall be paid into the city treasury, in gold or silver coin, United States treasury notes, national bank notes. * * * Club Rooms. — All clubs or associations where liquor is disposed of for cash, checks, or otherwise, shall be required to take the regular liquor license per year, $200.” The Columbia Club having disregarded this ordinance wras, on 14th of February, 1891, summoned to appear before the mayor of tho city, to answer to the charge of doing business without a license, in violation of said ordinance. By its proper officer, the club appeared and denied the charge of retailing liquor without a license, and also denied the jurisdiction of the court. The result of the tidal was a conviction'and the imposition of a fine of twenty dollars, to be paid on or before the 17th of February, together with a license fee of two hundred dollars, or the establishment be closed bv the chief of police. There was no evidence */ 1 g» before me of the written sentence of the court, and the respondent, denying the foregoing statement, alleges that a fine of twenty dollars was imposed, and sentence suspended to allow the relator time to test its1 supposed legal rights. Accordingly, on 26th February, 1891, the relators exhibited before me at my chambers in Lexington, a petition in prohibition to prevent the city council of Columbia from executing the said alleged illegal sentence. A rule was issued, requiring the mayor to show cause ' at the next term of the Court of Common Pleas for Richland why a writ of prohibition should not issue, prohibiting him from proceeding further in the matter. Upon the petition and return to the rule, the case was fully argued before me in open court at Columbia, on 14th day of April, A. D. 1891, and upon the 15th April, 1891, I signed and filed a short order, prepared by counsel for the mayor, dismissing the proceedings in prohibition, and sustaining the judgment of the mayor ; and I reserved the right of giving my reasons for this judgment more at length as soon as I could get a moment of leisure. The question submitted to the court was whether, under its rules and regulations, the Columbia Club is .engaged in the sale of intoxicating liquors, and consequently- amenable to the aforesaid city ordinance. The club is a so-called social organization, incorporated under the laws of the State for social and literary purposes, with a limited number of resident members, a few nonresident and quite a limited number of distinguished honorary members. It occupies a suite of rooms in the city of Columbia, furnished with a small library and the newspapers and periodicals of the day, and fitted up in a manner and style conducive to the ease, comfort, and social enjoyment of its members and guests, among whom are occasionally the families and lady friends of the members, who are entertained with conversation, music, and dancing. The social standing of the club is high, and the rules and regulations are such that none but men of good social position are admitted to membership. Each active or resident member is required to pay an initiation fee of fifty dollars and a monthly assessment of two dollars ; each non-resident member is required to pay an initiation fee of twenty dollars and annual dues of ten dollars. Among the refreshments provided by the managing committee with the funds of the society from time to time are choice liquors and cigars, which are distributed to the members when called for, by the servants of the club, at cost prices as fixed by the managing committee. The object is not to make profit out of the liquors, but merely to cover the cost price, and thus to replenish the stock ; nor is the purpose to evade the laws either of the city or State, but the association is bona fide, and governed by rules and regulations as judicious and stringent as those of similar clubs in the cities of the States of the Union. So far as the aims, objects, purposes, rules, and regulations of the club are concerned, there- is no dispute, but all the facts are conceded. Nothing is alleged nor was anything attempted to be proved derogatory to the membership or conduct of the club, but all was conceded that would accord to it a constitution and standing as free from condemnation as any similar society in any city of the land. The sole question submitted to the court is, whether the club is amenable to the license law of the State, as embodied in the aforesaid ordinance of the city of Columbia. It is not a question of motive or intent. He who carries a deadly weapon concealed about his person contrary to the statute, violates the law, regardless of the motive which may prompt him to carry it; so he who sells intoxicating liquors in violation of the statute, cannot excuse himself by proof of good intention. The fact of sale without license constitutes the misdemeanor, without reference to the intent. If the club is engaged in the sale of intoxicating liquors by retail without license so to do, it is violating the law of the land and the ordinance of the city of Columbia, and is not entitled to the writ of prohibition prayed for in the petition. It is conceded that it keeps on hand a goodly supply of choice liquors, purchased with the funds of the club; that they are the property of the corporation, and that no member can drink the same without paying therefor in cash, by check, or written order, and in the club rooms. The price is regulated by the managing committee, it is true, but nevertheless the mode of calling for, receiving, and paying for a drink and a cigar by a member of the club in its rooms, has the elements of a sale and purchase as complete as if one in a bar room or restaurant would order and pay for the same articles. Before the liquor is called for by the member, it is the property of the corporation ; after it is delivered and paid for, it is the property of the member as an absolute purchaser. The goods of a cotton factory, fertilizer factory, or any corporation or company, belong to the corporate body or company, but the stockholder who wishes to become the sole owner of any part of the goods, must buy and pay for the same, and the change of ownership is as complete a sale as if the purchaser were a stranger to the corporation; all the elements of a sale are present in the one transaction as well as in the other. The question is one of novel impression in this State, and until its argument before me, I was not aware that it had been passed upon by the courts of last resort in so many of the States of the Union. These decisions are conflicting, and cannot be wholly reconciled, although much of the conflict is owing to the difference in the language of the statutes of the States and city ordinances, and the manifest desire of the courts to exempt these clubs from the operation of prohibitory laws, whensoever it could be done with a fair and liberal interpretation of statutes. I feel free, therefore, to follow the reasoning of these courts, which have given to statutes similar to purs a plain, common sense, and consistent interpretation, and an application which strikes at the root of the evil denounced. A member of the Columbia Club cannot drink its liquors without buying and paying therefor by the drink or in retail, nor can any one else do so except by and through a purchase of the article effected by a member. In Marmont v. State (18 I'nd., 21), the court, in deciding the case, said: “To constitute a sale, there must be a passing of the right or title to property for money, which the buyer pays , or promises to pay to the seller for the thing bought or sold. When a firm purchases with partnership funds or upon credit a sack of coffee or a barrel of sugar, the coffee or sugar belongs to the firm; but when a part of each is taken out and transferred to a member of the firm, either for cash or on credit, a valid transfer has been effected from the firm to the individual member. So while the beer was in the keg, it was the common property of the so-' ciety; but when a portion was withdrawn and delivered to a member of the society upon credit' or for cash, the portion so withdrawn ceased to belong to the society, and became the separate property of the member receiving it, and the transaction invested him with the power to drink it himself, to give it away, to sell it, or throw it away.” In the case of State (Mayor, &c., of the city of Newark, prosecutor) v. The Essex Club, the Supreme Court of New Jersey, November 17, 1890, quoting with approval the Indiana case, proceeds to say : “Thus the title passed to the buyer and the consideration to the seller, presenting every quality requisite to a complete bargain and sale. It is wholly immaterial whether the sale is made in open view to all who apply or in the most secluded place, to which only the trusted few can gain admittance. The penalty of the statute is demanded against the sale without license, whether in public or in private.” This latter case of State v. Essex Club is not only a recent case, but one based upon a prohibitory statute similar to ours, and decided by a court of recognized ability. The rules and regulations of the -Essex Club were almost identical with those of the Columbia Club, and I can find no ease more directly in point, and none with the reasoning of which I am better satisfied. See 20 Atl. Rep., p. 769. In 1885 there existed in the city of Raleigh, N. C., a duly incorporated society called the “Capital Club,” organized for literary and social purposes, with rules and'regulations very similar to those of the relator, the Columbia Club. Among other things, and incidental to the main purpose of the organization, the club furnished refreshments to its members, such as liquors, cigars, and meals, for their convenience and accommodation, and a small stock of spirituous liquors, wines, and beer was kept on hand and furnished to the members at a price fixed by the house committee of the same, and intended to be just sufficient to cover the cost; the object was not to make profit upon the liquors, wines, and beer so furnished ; and in fact the prices thus fixed and paid failed to cover the entire-cost, and the funds of the society arising from fees and dues of members had now and then to be resorted to in order to keep up the stock of liquors. In that year a prohibitory local option law for Wake County wras passed by a vote of the people. The steward of this club was indicted for violating this law; the jury found a special verdict, in which is fully set forth the rules of the club and the manner in which the steward, Lockyear, distributed the liquors and refreshments of the club to its members, and left it to the court to say whether or not it was a sale of liquor, and whether or pot the defendant was guilty. The mode of purchasing the stock of liquors and distributing them to the members was precisely that prevailing in the Columbia Club. Upon the rendition of the special verdict by the jury, the Superior Court for Wake County acquitted Lockyear, the steward, but the State appealed to the Supreme Court and had the judgment of acquittal reversed — that court holding'that such furnishing of liquors by the club to its members is a sale, and hence a violation of the prohibitory local option act. ■ The very sound opinion of the court, delivered by Chief Justice Smith, is in 95 N. C., 633; reported also in 59 American Reports. He quotes approvingly the case of State v. Mercer, 36 Iowa, 405, decided in 1871 ; the case of Marmont v. State, 48 Ind., 21, decided in 1874; and as more directly in point, Martin v. State, 59 Ala., 34. These eases are examined and approved, whilst the following cases are discussed and disapproved, viz., Seim v. State, 55 Md., 565, .reported in 39 American Reports; Tennessee Club of Memphis v. Dwyer, 11 Lea, 452, reported, in 47 American Reports, 298, decided in 1883; Commonwealths. Smith, 102 Mass., 144, and Graffs. Evans, 8 Q. B. Div., 373, decided in 1881. These last named cases are all reviewed by the Supreme Court of North Carolina in the aforesaid opinion of Chief Justice Smith, and again in the able opinion of the Supreme Court of New Jersey in the above cited case of the Essex Club, and the doctrine of said adverse cases I think most successfully refuted. The fact is, that all prohibitory or license laws could be evaded and set at naught, if associations of the kind in question are held to be exefript from their provisions, because it is readily perceived that similar clubs could be established in every ward in our cities, and in every town, village, and township in the State, and thus embrace the great body of our adult male population in organizations having as an attractive feature a well regulated method of retailing to the members spirituous liquors, wines, and malt liquors. I think the Supreme Courts of North Carolina, Alabama, New Jersey, Iowa, and Indiana have taken a sounder and more practical view' of this question than the courts of Maryland, Massachusetts, and the Q. B. Div. of the English court, in the cases cited. My impression is that the Maryland case above cited was decided by a divided court, and that more recently a different doctrine has been there established; so that the great weight of authority now is that from the wine cellars or liquor rooms of our various social and literary clubs the mode of dispensing drinks to members amounts to a sale by retail, and that these societies are amenable in this incidental feature to the prohibitory and license laws of the land. I have thus given more at length my reason for refusing the writ of prohibition sued for by the relator, the Columbia Club, and for sustaining the action of the mayor and city council of Columbia in the premises. Let this opinion be filed and constitute a part of the judgment of the court and of the record in the case. The Columbia Club, relator, appealed.