Sponholz v. Meyer

70 N.W.2d 619, 270 Wis. 288, 1955 Wisc. LEXIS 402
CourtWisconsin Supreme Court
DecidedJune 1, 1955
StatusPublished
Cited by6 cases

This text of 70 N.W.2d 619 (Sponholz v. Meyer) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sponholz v. Meyer, 70 N.W.2d 619, 270 Wis. 288, 1955 Wisc. LEXIS 402 (Wis. 1955).

Opinions

Gehl, J.

The attack upon the contract is made upon two grounds:

(1) Failure to file in the office of the register of deeds a certificate of limited partnership as is required by sec. 124.02 (1), Stats., and (2) failure to disclose in the application for a license to operate the tavern the fact that plaintiff had an interest in the business.

By sec. 124.02 (1), Stats., it is provided that persons desiring to form a limited partnership shall sign and swear to a certificate containing certain matters and file it for record in the office of the register of deeds in the county in which the principal place of business is located. The certificate was not filed. Defendants seem to agree that violation of this provision would not of itself affect the rights of the parties as between themselves, for they make no effort in their brief to meet plaintiff’s argument that it does not.

The portion of sec. 176.05 (3), Stats., here applicable, is still found where it was when, and has not been amended since, it was considered in Brill v. Salzwedel (1940), 235 Wis. 551, 292 N. W. 908. It provides:

[291]*291“. . . No such license shall be issued to any person acting as agent for or in the employ of another. . .

The purpose of the legislature to require the licensing authority to consider the fitness of the person or persons who by its sanction are to engage in the tavern business is expressed in sec. 176.05 (5), Stats., which prescribes that the application for license shall set forth the past history of the applicant and his fitness for license. The interest of the legislature in the character of the person or persons engaged in the business of selling intoxicants is again expressed in sec. 176.05 (9), wherein it is directed that no license shall be granted to a minor, to one not of good moral character, to one who has been a petty law offender or who has been convicted of a felony.

In Brill v. Salzwedel, supra, it was held that a partnership agreement by the terms of which plaintiff was to provide the capital and equipment for the operation of a tavern, and defendant was to manage and operate the business and to apply for and obtain a license to operate the business in his sole name, was illegal and unenforceable; that under existing statutes a partnership may not obtain a license for the sale of intoxicating liquors in the name of only one of the partners. Plaintiff seeks to distinguish the facts of the two cases. One significant and controlling fact appears in each of them: The name of one of the partners was, as was contemplated by the partners, withheld from the public and the licensing authority. That, we believe, is sufficient to require us to hold the contract unenforceable. The language of the court in the Brill Case makes such conclusion inescapable (p. 558) :

“There is no legal sanction under our law whereby a so-called silent partner can engage in the tavern business in which intoxicating liquors are sold under a license issued in the name of one of the partners. In the case of corporations, full disclosure must be made as to all officers and directors of the corporation. There is an obvious reason for such disclosure. The licensing authorities are entitled to [292]*292know the personnel of those directly interested in the business for the operation of which the municipality grants the license. The emphasis is upon the personal qualifications of the licensees and those in control of the liquor business. The latter is clearly indicated in the disclosures required concerning officers and directors of corporations, and the public is entitled to know who is actually in control, both as to ownership and management in any branch of the liquor traffic required by law to be licensed.
“A partnership may be granted a license to operate a tavern and sell intoxicating liquors provided the names of the partners are disclosed in both the application for and in the license granted. But it may not, as in the instant case, obtain a license in the name of one of the members of the partnership.” See Smith v. Smith (1949), 255 Wis. 96, 38 N. W. (2d) 12.

Similar contracts, all dealing with partnerships organized for the purpose of engaging in the liquor business and all contemplating that less than all of the members of the partnership should apply for and accept a license in the applicant’s sole name, have been held to be unenforceable in Nahas v. George (1951), 156 Ohio St. 52, 99 N. E. (2d) 898, 32 A. L. R. (2d) 1338; Hooper v. Barranti (1947), 81 Cal. App. (2d) 570, 184 Pac. (2d) 688; Price v. Marcus (1947), 199 Okla. 356, 185 Pac. (2d) 953; Minter Brothers Co. v. Hochman (1950), 231 Minn. 156, 42 N. W. (2d) 562; Pendarvis v. Berry (1949), 214 S. C. 363, 52 S. E. (2d) 705; Vandegrift v. Vandegrift (1910), 226 Pa. 254, 75 Atl. 365; Parise v. Pepe (1946), 270 App. Div. 769, 59 N. Y. Supp. (2d) 497; Orr v. Pfohl (1948), 84 N. Y. Supp. (2d) 23; Chippas v. Valltos (1941), 74 U. S. App. D. C. 338, 123 Fed. (2d) 153; Smith v. Nix (1950), 206 Ga. 403, 57 S. E. (2d) 275; Eisenman v. Seitz (1942), 26 Del. Ch. 185, 25 Atl. (2d) 496; DeMayo v. Lyons (1948), 358 Mo. 646, 216 S. W. (2d) 436; Beemer v. Hughes (1914), 179 Mich. 110, 146 N. W. 198.

[293]*293We read these cases, including Brill v. Salzwedel, supra, as giving effect to the legislative purpose to require that the identity of those engaged as profit-sharing partners in the liquor business, whether as. managers or as owners, be made known to the public and the licensing authority, and as establishing the rule that contracts such as that here involved and made under like circumstances are void, and that they are unenforceable regardless of which of the parties initiates or suggests the plan, whether the members of the partnership be limited or general, who prepares the contract, who assumes the managerial duties, or what the purposes of the various provisions or omissions of the contract are.

Plaintiff contends that the court’s findings that both parties contemplated that the license should be applied for in the name of William J. Meyer, and that the omission in the application to refer to the partnership was made with his consent and approval has no support in the evidence. Plaintiff himself testified that he “never contemplated taking out a license for this tavern business or running the business, at Mr. Meyer’s saying it was to be operated under his name only.” He testified also that at the meeting at which the contract was prepared the matter of the license was discussed and that “the only thing that was said was he [Meyer] was to retain the license in his name,” that in the dealings with the creditors, the public, and the bank the business was to be and was carried on in the name of Meyer, and that when the agreement was made he did not intend to have his name appear in the business. There is ample support for the finding.

The plaintiff urges that it would be unjust and inequitable to allow defendants to appropriate the proceeds of the venture which was enabled to continue only on account of the investment made by him. For the reasons stated in McMullen v. Hoffman (1899), 174 U. S. 639, 669, 19 Sup. Ct. 839, 43 L. Ed. 1117, the contention is of no avail to him:

[294]

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Sponholz v. Meyer
70 N.W.2d 619 (Wisconsin Supreme Court, 1955)

Cite This Page — Counsel Stack

Bluebook (online)
70 N.W.2d 619, 270 Wis. 288, 1955 Wisc. LEXIS 402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sponholz-v-meyer-wis-1955.