
    The People ex rel. The Rochester Whist Club v. John B. Hamilton, Treasurer of the County of Monroe.
    (Supreme Court, Monroe Special Term,
    May, 1896.)
    1. Excise — Liquor Tax Law — Bona fide social clubs need not take out tax certificate.
    A Bona fide social club, regularly organized for a legitimate purpose, with a limited and selected membership, which, incidentally; furnishes liquor to its members exclusively, upon payment of a sum equal to the price of such liquor and a small addition for the expense of serving it, which sum is paid into the treasury and used for replenishing the stock, is not within the provisions of the. Liquor Tax Law of 1896, and is hot required to take out a certificate.
    
      2. Same — Sale or trafficking.
    • Such a method of furnishing members with liquors is not a sale of or trafficking in liquors within the meaning of section 31 of the act.
    Certiorari to review a decision of the county treasurer of Monroe county, refusing to issue a liquor tax certificate to the relator.
    Frank M. Bottom and John A, Barhite, for relator.
    George E. Forsyth, district attorney, and Charles E. Bostwick, for defendant. • -
   Davy, J.

This is a proceeding by certiorari to review the decision of the county treasurer of Monroe county in refusing to issue to the relator a liquor-tax certificate, as provided in chapter 112 of the Laws of 1896, commonly known as the Raines Liquor Tax Law. .

The reasons stated in the return for refusing the .certificate are, that the relator is a corporation organized to promote social intercourse among its members and to provide them with the conveniences of'a clubhouse, and that it cannot engage in the business of trafficking in liquors. It is hardly necessary in this case to discuss the discretionary power that is vested in the county treasurer under the statute, to grant or refuse a liquor tax certificate. I am inclined to think, however, that if any .person who applies for such a certificate brings himself squarely within the-terms of the law by complying with all the statutory preliminaries, that the certificate cannot legally be withheld; but as these proceedings are instituted in a friendly manner and for the purpose of obtaining a judicial construction of the statute pertaining to the relator’s legal right to dispense liquors to its members, the only question, therefore, which I deem it necessary to consider upon this application is, whether the relator is required, under the provisions of said act, .to take out a liquor tax license.

It is conceded that the relator is a bona fide club and was duly incorporated on the 10th day of January, 1884, having among its objects the promotion of social enjoyment and recreation among its members; such as the practice and cultivation of the game of whist and other innocent amusements. The organization has followed the familiar rule -of adopting a constitution and by-laws which set forth the object of the society and the qualifications for . membership and the number and character of its officers.. These, • together with its charter, constitute its fundamental law, and are the source and limit of its authority to transact business. The relator rents and furnishes a large house which is located at No. 40 North Fitzhugh street, which contains parlors, a reading-room, billiard and card-rooms, a dining-room, kitchen and storeroom, and a room in which liquors and cigars are kept and dispensed to the members of the club only upon their oral or written request, at a price fixed therefor by the .house committee, for which the members ordering the same may pay cash, or have it charged and pay therefor, monthly. This fund, together with the annual dues and initiation fees, are used in paying for the liquors and other supplies which are consumed by its members, and in defraying the general expenses of the club.

The membership of the club is limited and consists of resident and nonresident members, and no person can be admitted as a men>. ber unless he is twenty-one years of age and his name has been proposed by two members of the society who are in good and regular standing. The rules also require that his name, with the names of those who proposed him for membership, shall, be posted upon the bulletin board of the club'for at-least two weeks before he can be elected. At the election two negative votes or black balls are sufficient to exclude any candidate. Members are divided into two classes, resident and nonresident. The initiation fees are, $20 for resident members, and $10 for nonresident members, and the annual dues are, $32 per year for resident members, and $10 per year for nonresident members. The constitution also provides that each member shall have the right to entertain a friend not residing in the city of Rochester to the privileges of the club for the space of two weeks, .upon recording the name and residence of such friend in the visitors’ book, together with his own, and producing from an officer of the club a card of invitation. A member at whose request an invitation is given to a guest is held responsible to the club for all obligations of such guest. The club-house is open to its members at all times, but no games of any kind are permitted to be played on Sunday or any other time for money. Many of its members make the club-house their home, except for lodging,' and they spend much of their time when not engaged in business in its parlors and reading-room, and in playing and enjoying the familiar game known as whist.

The committee having the management of the organization usually orders, from time to time, such quantities of provisions and liquors, as will meet the demand of the individual members of the club. The food is served in the dining-room and the liquors are dispensed to its members by its steward and other servants at prices fixed by the officers of the club. The prices for liquors are intended to cover the actual cost of the articles furnished and the expenses incurred in serving them. The money so received is paid into the treasury, and is again used for replenishing the stock, which are in like manner dispensed to the_ members. It is evident that if the members only paid into the treasury the cost price of the liquors, there would be no fund to pay the servants and other outlays necessarily incurred in dispensing them, and the deficiency would have to be made good out of the funds received from initiation fees and annual dues., The plan adopted is a simple method of assessing each member the cost price of the liquors he-consumes, and, in addition thereto, a sufficient sum to pay the expenses incurred in serving them. The relator has pursued this method of supplying liquors and refreshments to its -members ever since its • organization, and its right seems never to have been questioned or' challenged before; -

Black, in his work on Intoxicating Liquors, says, Whether or not a social club, such as are very, common in all large cities, may lawfully furnish liquors to its members, as a .part of the entertainment which it provides for them, without procuring a license or paying a tax as a retailer, is a question which has provoked-great discussion of late years, .and upon which the authorities are by no means harmonious.” After referring-to the authorities in the different States upon the subject, he reaches the conclusion that the intent must govern,' and that if the organization is a bona fide club and conducted, in good faith, with a, limited and selected membership, really owning its property in common,, and formed for social, litérary, artistic or. other purposes, to which the furnishing of liquors to its members would be merely incidental — in the samé way and to the same extent that the supplying of dinners or daily papers might be, then it cannot be considered within either the purpose or letter of the law.”

Notwithstanding the conflict of authorities in other States upon the subject, I think that the question is no longer a' doubtful one in this State: The recent -decision of the Court of Appeals, in the case of The People v. Adelphi Club, 149 N. Y. 5, holds that a bona fide social club, regularly organized - under the statute for legitimate purposes, to which the furnishing of liquors to its members is merely incidental, and having a.limited and selected membership, does not constitute a sale within the meaning of the Excise A.ct of 1892. Hothing-can be said that will throw any additional light upon the question under consideration than what is stated in the very interesting and exhaustive opinion'of Judge Haight, in the Adelphi." Club case, supra. The learned district attorney con-, tends, however, that the recent statute, of 1896 is much more comprehensive and stringent in its terms than the act of 1892, and was intended to include social clubs within its.provisions, and, therefore', the decision of the Court of Appeals in the Adelphi Club case is not controlling in this proceeding. . The legislature, in the act of 1896,' has.prohibited all persons, corporations, associations and co-partners from engaging in the business of trafficking in liquors except as authorized in said act, but it has not undertaken to prohibit the drinking or buying of liquor or the distribution of it in severalty among persons who own it in common.

The question then arises whether the regulations adopted by the Whist Club for dispensing liquors among its own members constitute the business of trafficking in liquors within the meaning of section 31 of the act of 1896, which makes it unlawful to carry on the business without a tax license. A corporation, being a mere creature of the law, can exercise no power or authority except such as is conferred or authorized by its charter. This principle ■ has been so often applied in the construction of corporate powers, that I do not deem it necessary to refer to authorities. The relator’s charter and its by-laws are the measure of'its powers. It can engage in no enterprise or business beyond the purpose and object of. its charter. If liquors and cigars are. furnished to its members, it is merely incidental to the business for which it was incorporated. No one would entertain the idea for a moment that the relator could engage in the business of banking or the business of manufacturing articles of merchandise, and yet it would have just as much power and authority, under its charter, to engage in either of these enterprises as it would to throw open its doors to the public and engage in the business of trafficking in liquors.

Clubs' are now, and have been for years, an important feature of social life in all large cities. Many of them occupy buildings of their own, which contain reading-rooms, library, smoking-rooms ■ and restaurant, baths, and even bedrooms. They are usually organized to meet for social intercourse and the promotion of literature and science. They are always open to the members the same as a man’s dwelling-house is open to the members of his family. It is well known that liquors are dispensed to their own limited and selected members, and that they never have been required in this State to take out a license. If the legislature intended that these well-known organizations should take out licenses to sell liquors exclusively to their members, it is singular that the statute should contain no provision for the issuing of liquor tax certificates to them. The fact that clubs are not mentioned in the act has an important bearing upon the meaning to be placed upon, the statute in reference to taxing such organizations. The intention of the legislature upon this point must be ascertained from the context of the act. It is a familiar rule that when the language of an act of the legislature is plain and without ambiguity, the act construes itself, and' courts will presume that the legislature intended what is plainly expressed therein.

Section 31 provides that it shall not be lawful for any corporation, association, copartnership, or person who has not paid a tax- as ■provided in section 11 of this act, and obtained and posted a liquor tax certificate, to sell, offer or expose, for sale or give away liquor in any quantities less than five wine gallons, at a time, and without having paid such tax and complied with the provisions of this act, to sell, offer, or expose for sale, or give away on the premises of such vendor, or in any building, booth, yard or garden appertaining thereto or connected therewith. It also provides that it shall not be lawful for any corporation, association, copartnership or person, whether they have p'aid such tax or not, to sell, offer, or expose for sale or give away any liquor on Sunday or before 5 a.'m. on Monday, or on any other day between 1 o’clock and 5 o’clock in the morning. Section 11 provides that the excise tax . upon the business of trafficking in liquors shall be of four grades. First. Upon the ■ business of trafficking in liquors to be drunk upon the premises where sold or , which are so drunk, whether in a hotel, restaurant, outbuilding, yard or garden appertaining thereto or connected therewith. Second: Upon the business of trafficking in. liquors in quantities of less than five wine gallons, no part of which shall be drunk upon the premises where sold or in any outbuilding, yard, booth or garden appertaining thereto or connected therewith. Third. Upon the business of trafficking in liquors by a duly licensed pharmacist, which liquors can only be. sold upon the written prescription of a regularly licensed physician, signed by such physician. Fourth. Upon the business of trafficking in liquors upon any car, steamboat or vessel, to be drunk on such car or any car connected .therewith or any such'steamboat or vessel or upon any/barge attached thereto- or connected therewith. It seems to me that, these requirements are inconsistent with the idea that the legislature intended that a social'club Whose doors are closed to everybody except its members should take out a liquor tax to traffic in liquors exclusively with its own members. The act, in my judgment, is not intended to apply to a business conducted in a private manner and in a place to- which the public could not have free access.

It was conceded, upon the argument, by the learned counsel for the defendant, that the question whether social dribs were required to pay a tax would- depend largely upon the construction which the court would give to the words trafficking in liquors.” It is generally understood that a trafficker is one who is engaged in a particular branch of - business or trade, like a merchant who buys and sells goods for a profit. Can it be. said that this club, which deals solely with its members, could barter and carry on a traffic in the sale of liquor for a profit when every dollar paid for liquors would go into the treasury and become the joint property of its members? The question of sale or traffic in liquors depends upon the character of the act. In Graff v. Evans, 8 Q. B. Div. 373, Field, J., says, a sale involves the elements of a bargain. There must be a buyer and a seller to make a sale of merchandise. The liquors of the club being the common property of its members, they cannot sell it to themselves. There could be no bargain and sale between them because the money which is paid into the treasury by the men who consume the liquors remains the joint property of all its members. Such-a system, it seems to me, lacks the very elements of a bargain and sale. It could not be seriously contended that the members of a family who unite in purchasing a quantity of Equor for them own consumption would violate the statute which prohibits the trafficking in liquors without a tax license. The statute nowhere prohibits the buying and drinking of Equors. The individual who sells it is the one who trafficks in the article and not the consumer. The club does not sell or keep for sale any Equors. It keeps on hand Equors winch are the common property of its members, to be distributed among them when called for. While the club, as a corporation may be held liable for the Equors and provisions ordered by its committee for its members, yet that fact does not establish that it is engaged in the traffic or sale of those articles. In the case of The People v. Adelphi Club, supra,, Judge Haight says: “ Whilst property and supplies are technically owned by a club, each member is in equity an equal owner in common. The fact that a payment was made does not change the character of the act, for it was but a means adopted by which each member could receive his own and not that of his fellow members. The payment went into the treasury ultimately to restore that which he had taken.” ■ I am unable to discover any distinction between the Excise Act of 1892 and the Liquor Tax Act of 1896, so far as it relates to social clubs. The act of 1892 prohibits- persons from selling Equors without a license. The act of 1896 prohibits persons, corporations, associations and copartners from carrying on the business of trafficking in Equors without a Equor tax Ecense. The word “ sales ” in the act of 1891, ánd the word “ traffickingin the act of 1896 are words of like significance in their meaning. Section 2 of the act under consideration defines the meaning of the words ‘‘ trafficking in liquors.” It provides that the sale of liquor in quantities of less than five gallons shall be trafficking in liquors?’ We have, therefore, a well-defined meaning of the words “ trafficking in liquors. ” in the act itself, and it is plain to be seen that it is not aimed at social clubs, but at those- who sell liquors for a profit in places of public resort. Sale by retail means sale to any member of the general public who may come to buy,. and the proprietor of a licensed house has- no-option to refuse to admit the public to his premises during the hours and days he is legally permitted to sell liquors.

This club, therefore, being limited in its members and not a place of public’resort, could not be licensed to sell liquors. In support of this contention it will be seen that section 18 of the act provides that every applicant for a liquor tax licenses is required to give a bond that he will not keep- a disorderly house or permit gambling upon the premises. This provision of the statute when taken in connection with section 21, -which requires the applicant .before commencing business to post up his liquor tax certificate in a com spicuous place where the traffic in liquors is carried on, so that all persons visiting such place may readily see the same, and if there be a window facing the street on the same floor where such business is carried on^ such certificate must be displayed from the window so that it may be readily seen from the street. These -requirements indicate that the legislature intended that the business of trafficking in liquors, and the places where such trafficking is carried on, should be open to thé public, and that all persons should have free access to the same, and. that persons who are opposed to entering restaurants and- places of amusements where intoxicating liquors are sold should have notice by the posting - of such tax certificate in the window, that the business of trafficking in liquors is carried on within. The relator’s club-house cannot be turned into a place of public resort without forfeiting its charter. If it were required to take out a liquor tax license it would be compelled to keep its club-house open to the-public, and during the hours when the sale' of liquors is prohibited' to have no curtains upon its windows, screens or blinds, opaque or colored glass that would obstruct the view from the sidewalk of the place where liquors are sold or kept for sale; so that the public could have full view of what transpired within. I am constrained, therefore, from the language of the act to adopt the view that the relator’s manner of furnishing liquors to its members does not constitute a sale or the business of trafficking in liquors within the meaning of the Liquor Tax Law of 1896, chapter 112. Having reached this conclusion, the application to compel the county treasurer to issue a liquor tax certificate to the relator must be denied and the writ of certiorari quashed, but without costs. '

Ordered accordingly.  