
    Commonwealth v. Krotzer, Appellant.
    
      Liquor law — Selling liquor without a license — Club—Steward.
    1. On the trial of an indictment for selling liquor without a license, the defendant is entitled to an instruction that the jury should return a verdict of not guilty, if they find from the evidence that the defendant was employed by an unincorporated association conducted for fraternal, beneficial and social purposes, as its steward, who was also a member; that such association was a bona fide organization with a selected membership of reputable persons who really owned their property in common; that the association supplied to its members eatables and liquors without profit, and as a mere incident to its social life; that the defendant while in such employment served the members, and the members only, with liquors; that the liquors thus served were the property of the members; and that the defendant made no profit on the same.
    2. In such a case the court cannot without qualification affirm a point to the effect that all persons in Pennsylvania who are over twenty-one years of age, not of known intemperate habits or insane, have, under the law, the right to buy and use intoxicating liquors as a beverage, inasmuch as such a point omits persons who are visibly intoxicated at the time when liquors are asked to be furnished to them.
    Argued Feb. 27, 1912.
    Appeal, No. 119, April T., 1912, by defendant, from judgment of Q. S. Venango Co., Sessions Docket No. 6, Aug. T., 1911, on verdict of guilty in case of Commonwealth v. H. H. Krotzer.
    Before Rice, P. J., Henderson, Morrison, Orlady, Head and Porter, JJ.
    Reversed.
    Indictment for selling liquor without a license. Before Criswell, P. J.
    At'the trial it appeared that the defendant was a steward of a lodge of the Fraternal Order of Eagles, an unincorporated beneficial association.
    The court charged in part as follows:
    [While it has been held that the statute does not apply to these organizations known as clubs which are maintained and kept open from day to day to fulfill the purpose of their organization, just as a home is kept open, it has never been held, so far as I have any knowledge of the law on the subject, that any organization of men organized for a proper and legitimate purpose, adopting rules for their government and providing machinery by which the purpose of their organization shall be given effect, — it has never been held that such an organization meeting once a week or twice a month may set up a buffet or sideboard and distribute liquors to its members in the interim between meetings every day of the week, including Sunday. There is no decision to that effect of which I have any knowledge, and we instruct you that it hás never been so held.] [2]
    [Was it a club, — such an organization as you understand by the term “club,” — a substitute for the home, and was the furnishing of liquor a mere incident in connection with the operation of that enterprise, or was it something different? Is the organization known as the lodge or Aerie of Eagles the ordinary fraternal organization meeting but once in two weeks, it being necessary for its purposes that it should meet only once in two weeks? If that be true and if such be the nature of the organization, we are of the opinion that the rules applicable to the organizations commonly known as clubs would not apply to it.] [3]
    [The testimony of the witnesses before you is to the effect that they met once every two weeks, or twice a month. As we understand it, this buffet or sideboard was instituted and operated by the lodge or aerie, operating under these rules and meeting once in two weeks for the purpose of effecting the objects of its organization. There has been some contention here to the effect that the lodge was always in session or was in session at all times when the rooms were open. But as we understand the constitution and by-laws or rules which have been offered in evidence it was not so in session.] [4]
    [It might be possible, and is possible as I understand it, that the membership of a lodge such as this may organize separately as a club. They may, as such club or organization, provide that no one shall be members of it except those who are members of the lodge. They might as such membership form a separate organization, have separate rooms, and come within the meaning of the law as applicable to other clubs. But this is not a case of that kind. There is no evidence of an organization separately of a club. But the only evidence you have is to the effect that this buffet and the social rooms were under the management and control of the lodge proper, which meets twice a month. If it were organized separately it would still be necessary in order to avoid a violation of the law that the liquors should be furnished only as an incident and without profit to the membership.] [5]
    [The defendant is indicted for selling liquor and the contention is made that there was no sale here, but a distribution. It is the boast of courts and of juries as well, constituting a part of the court, that they will hear the evidence and determine the real character of a transaction and not be deceived by appearances. A court of justice is a poor place to enter for the purpose of covering up transactions and making that appear to be one thing which is in fact another thing. Courts will penetrate all such disguises and deceptive appearances and reach the real facts in the case. Because all persons not having a license as a rule are required to take out a license there may be a temptation on the part of those who desire to engage‘in the business and make a profit out of sales to evade the license laws. This will not be permitted, and when it appears that the purpose of an organization or an individual is to engage in the traffic of intoxicating liquors and evade the license laws he will not be permitted to do so. The real character of his business will be determined and will be declared by a court and jury.] [6]
    [They have been produced (the books) by persons connected with this organization and there has been a degree of frankness on the part of some, if not all, of them which is commendable. At least, some of them have not hesitated to answer any inquiry that was asked of them in reference to the management of this institution, and for such frankness we say they are entitled to commendation, and such course on their part indicates that possibly they have been deceived, — that they have been engaging in a business that they regarded as proper and lawful and did not intentionally violate the law in carrying it on.] [7]
    
      [They would have a right to furnish the liquors at cost and carriage, meaning by that the expenses of furnishing the liquors, and as we understand they would have a right to charge up as a part of such expense a part of the expenses of the steward, if he served such liquors and performed other duties, and part of the rent, if the space occupied by the bar or place where the liquors were kept occupied a part of the room, but we do not understand that they would have a right to charge up against the receipts from the sale of liquors the entire salary of the steward, the entire expense of water furnished to the rooms, and if any organization is maintained and made self-supporting by means of profits derived from sales of liquor in that manner, the liquors are not being furnished without profit, but they are being furnished at a profit which ought not to be charged against the receipts derived therefrom.] [8]
    [Were these liquors furnished at a profit? It may be claimed that the liquors belonged to all in common, and so long as they were delivered and furnished only to those who were members, there could be no profit. But such membership, especially, when composed of a large number of persons, usually have within their number those who use liquors possibly to excess and others who do not use them at all. If they are furnished to the membership only at cost, each one has to bear his proper portion of the expense of that organization; but if they are furnished above cost the man who consumes the liquor pays for what he consumes and contributes the excess over cost toward the expenses of the club, and the man who does not consume any liquor gets the benefit of such excess and thereby profits by the sales. You can imagine three persons buying a quantity of liquor, each contributing an equal amount in the purchase of a quantity of liquor. They all have access to "it and pay so much a drink, a price which is in excess largely of cost. One drinks largely, and a large part of the profit, therefore, in the transaction is paid by him; another may drink but little, and he will neither profit or lose by the transaction. But the one who drinks nothing at all and consumes no part of it has the benefit of his one-third of the profit on the whole transaction.] [9]
    Defendant presented these points:
    5. If the jury find from the evidence in the case that the defendant is employed, at a stated wage, by an association of men calling themselves “The Fraternal Order of Eagles,” as their steward or servant; that this association is conducted for fraternal, beneficial and social purposes, and is a bona fide organization with a selected membership of reputable persons who really own their property in common, — and that this association supplies to its members liquors, without profit, and as a mere incident to the social fife of the association; that this defendant while in such employment served the members, and the members only, with liquors; that the liquors served by the defendant was the property of the members of the said association and that the defendant made no profit on the same; that, then, if the jury find these facts from the evidence, the defendant has not sold liquors and the verdict should be “Not guilty.” Answer: The fifth point is refused. [11]
    6. We will say to you that the word “sale” has a definite, certain and determined meaning in law; and that the indictment in this case charges the defendant with selling liquor without a license, and that, therefore, this defendant cannot be found guilty under this indictment unless he has in fact sold liquor. A sale is defined to be “A transfer of the absolute title to property for a certain agreed price. A contract-between two parties one of whom acquires a property in the thing sold, and the other parts with it for a valuable consideration. And as all criminal statutes must be construed strictly, the transaction here charged by the commonwealth as being a sale, must be a sale in the strict sense of the term as defined in law; and if from the evidence in the case the jury should find that the transaction here complained of by the commonwealth is not a sale as thus understood, your verdict should be “ Not guilty.” Answer: Affirmed, but if a sale as thus understood is screened by external forms or disguises it is the duty of the jury to penetrate the deceptive appearances and find the real fácts. [12]
    7. All persons in Pennsylvania who are over twenty-one years of age, not of known intemperate habits or insane, have under the law the right to buy and use intoxicating liquors as a beverage. This right may be exercised individually or collectively by persons possessing such qualifications, either in their homes or their social institutions, and our license law of May 13, 1887, in no wise limits or circumscribes this right. And under the laws of this commonwealth such persons either individually or collectively may employ servants or stewards to serve them intoxicating liquors either in their homes or their social institutions; and if such persons exercise their rights in this respect in good faith the act of the servant or steward in serving liquors to such persons under such circumstances is not a sale within the meaning of the term as used in the license act of May 13, 1887. And if the jury should find from the evidence that the defendant is the steward or servant of such an association, and serves liquors only to the men who compose such association, and serves such men their own liquors, then this defendant has not sold liquor and the verdict should be “Not guilty.”
    The seventh point is refused as in some respects inaccurate and too general. [13]
    Verdict and judgment of guilty, upon which judgment of sentence was passed.
    
      Errors assigned were (1) refusal to discharge defendant on the conclusion of the commonwealth’s case; (2-9) portions of charge as above; (10) the charge as a whole; (11-13) answers to points as above.
    
      James S. Carmichael and Quincy D. Hastings, for appellant.
    — Briefly stated the rule is: unincorporated associations may buy and distribute to the members liquors or other property and that such distribution is in no sense of the term a sale: State v. Kline, 50 Ore. 426 (93 Pac. Repr. 237); Com. v. Byers, 45 Pa. Superior Ct. 37; Klein v. Livingston Club, 177 Pa. 224; Com. v. Smith, 2 Pa. Superior Ct. 474; Union League v. Ransley, 39 Pa. Superior Ct. 514.
    
      Wm. J. Breene, with him Dan B. Goodwin, district attorney, E. C. Breene, J. D. Trax and Wm. M. Parker, for appellee.
    — The lodge in question is not a club: Klein v. Livingston Club, 177 Pa. 224; Com. v. Smith, 2 Pa. Superior Ct. 474; Com. v. Brem, 5 Pa. Superior Ct. 104; South Shore Country Club v. People, 12 L. R. A. (N. S.) 519; Cuzner v. Club, 20 L. R. A. (N. S.) 1095.
    October 14, 1912:
   Opinion by

Morrison, J.,

The defendant was indicted, convicted and sentenced to pay a fine and undergo imprisonment on a charge of selling intoxicating liquors without a license, and he appealed to this court. The contention of the defendant, through his learned counsel, is that he was simply the steward of the Fraternal Order of Eagles, Aerie No. 328, of the city of Franklin, Pennsylvania, which was organized about March 12, 1903, as a fraternal, beneficial and social order as provided for under the constitution for subordinate aeries, and that he made no sales of intoxicating liquors but simply distributed such liquors only to the members of the order in accordance with the rules and regulations established by the order in regard thereto. That for about six years the club, or order, has rented and occupied the second- and third floors of a new brick building situate in the business portion of the city of Franklin on the corner of Thirteenth and Buffalo streets. Said floors are divided into parlors, reading rooms, lodge rooms, card rooms, bath rooms, café and buffet rooms, etc. The rooms on the see.ond floor are sometimes used for social functions and those on the third floor for lodge meetings and viee versa. On the third floor there is a large hall with anteroom, kitchen, etc. All of the rooms being well equipped and furnished at an expense of $4,500 paid for out of dues and assessments. Ever since its inception the order has been conducted, as contended; as a fraternal, beneficial and social lodge, or club, strictly in compliance with the laws, constitution and rules of said order. Shortly after its organization, in compliance with the laws of the order, a café and buffet were installed, both as incidents merely to the other features of the order and equipped out of and from the moneys of the order received for dues and fees, and were conducted under the general supervision of the order. For this purpose the order appointed a room committee and a financial secretary, who had immediate supervision thereof and regularly reported to the order. There were no differences in the membership of the fraternal, beneficial and social sides of the order; all paid dues and fees and all owned all of the property of the order in common. The café and buffet, so called, provided and furnished meals, lunches, milk, buttermilk, mineral water, cigars, tobacco, beer, wine and whisky. The hours during which the rooms were kept open were from nine o’clock a. m. to two o’clock a. m. of each day. The rooms were uhder the charge of two stewards, who waited on the members, distributing to them such of the common stock on hand as they required and received in return therefor, in five cent checks, its equivalent in value, as determined by the room committee. It is contended that the only purpose was to make an equal distribution among the members of the club of the stock on hand and to secure an amount sufficient to replenish the same. It is also contended that all of the members of this club were temperate and of good character and they were such persons as are lawfully entitled to procure and use intoxicating liquors.

An examination of the testimony convinces us that the jury might have found these alleged facts in favor of the defendant and that he was not guilty of selling intoxicating liquors without a license, within the meaning of the law. But of course there were many questions of fact in dispute and there were inferences to be drawn from the testimony, and these were all for the jury, under appropriate instructions from the court.

The learned counsel for appellant state the questions involved as follows: “1. Where 325 adult men of good character, in good faith, organize for fraternal, beneficial and social purposes, paying dues and fees, out of which moneys rooms are rented and furnished for their accommodation, eatables and liquors are bought and owned as tenants in common, can their steward, a member, lawfully distribute said eatables and liquors on the premises, to members only, at original cost plus cost of distribution? 2. May such members meet at such rooms daily and lawfully receive such distribution of liquors? 3. Must such organization be a substitute for the home before the liquors can lawfully be distributed? 4. Should the court submit the intent and bona fides of the organization and distribution to the jury?”

We here call attention to the conceded fact that this organization is not incorporated, but in view of the law, as we understand it, and the concessions in the arguments of the respective counsel, this is not a material question in the case.

Before proceeding to consider the assignments of error we will quote the views of this court upon this character of cases as expressed in Com. v. Smith, 2 Pa. Superior Ct. 474, by President Judge Rice:

“We agree with the court below in holding that the system of checks adopted by this association did not make the transaction essentially different from what it would have been if the members had paid-the janitor or steward directly for the liquor furnished, and he had turned over the money to the association. We agree also, that if the object of an association is merely to provide members with a convenient method of obtaining intoxicating drinks whenever they desire them and if the form of membership is no more than a pretense, so that any person without discrimination can procure liquor by signing his name in a book or buying a ticket or a check, thus enabling the seller to conduct an illegal traffic under the guise of a club distribution, the fact that the organization is a chartered institution will not protect the seller: Black on Intoxicating Liquors, par. 142. This was decided in Com. v. Tierney, 148 Pa. 552, and was substantially reaffirmed, in the late case of Klein v. Livingston Club, 177 Pa. 224, where Justice Dean says: ‘If this were an unlicensed sale, under the guise of club distribution, it would clearly be unlawful; the law would look through all disguises, and so pronounce it.’ But there was evidence that this was a bona fide organization with a selected membership made up of reputable persons, really owning its property in common, and formed and carried on for purposes to which the furnishing of liquor to its members without profit was merely incidental. Of course it was for the jury to determine what the facts were; all that we are required to say, or do say, is, that there was ample evidence to warrant a jury in finding the foregoing facts. Assuming, then, that a jury might find that the transaction was a furnishing of liquors by a bona fide club to its own members without profit, each paying for the share of the common stock furnished to him, and that it was not a scheme to evade the license laws, the question arises whether it was an illegal sale. At the time the case was tried, this was an unsettled question concerning which conflicting opinions were held. Since that time it has received thorough and deliberate consideration by the Supreme Court and has been resolved against the contention that such a transaction is an illegal sale within the meaning of the Act of May 13, 1887, P. L. 108, known as the Brooks law: Klein v. Livingston Club, 177 Pa. 224. Says Justice Dean: “The purpose of the whole system is to distribute the advantages, comforts and luxuries of the club among the members so that there shall not be unequal contributions to the treasury which purchases them. They are all owners of the property, when purchased in equal shares, and if a division were then made, each one would be entitled to an equal share of the liquor; but one consumes his share and that of the others who do not drink liquor, and he puts back into the common treasury the value of the other’s share; therefore, although by consumption the division is not equal, yet it is made equal by the contribution to the treasury, that has neither lost nor gained, consequently the distribution is equitable. Does this constitute a sale? We think not; there is no element of bargain, only a method of distribution of the common property.”

In Klein v. Livingston Club, 177 Pa. 224, the Supreme Court, speaking through Mr. Justice Dean, after quoting from Mr. Justice Williams in Com. v. Carey, 151 Pa. 368, quite liberally, then proceed to say: “The Brooks law only reduced to a comprehensive system all the features of all the license laws at its date on our statute books. There is not in it, nor in any of the statutes which it replaces, a prohibition of the use of liquors in clubs, any more than there is a prohibition of its use in a family. No indictment for furnishing liquors to members of a club could be sustained, unless the evidence showed beyond reasonable doubt, such. furnishing constituted a sale. The statute being penal, it must be subject to a strict construction. We cannot extend it beyond its letter. If we, in construing the Brooks statute, adopt the settled rule of construction, consider the old law, the mischief and the remedy, then we have these questions: The old law regulating and restraining the sale of liquors was disjointed or fragmentary, because it was made up of separate statutes passed at intervals of years, not seldom presenting conflicting provisions, and often provisions in conflict with special local laws; at the same time there was a settled conviction in the public mind that the license law did not produce the revenue that ought to have been exacted for the privilege of selling liquor. In view of the ineffectiveness of the old law, and the smallness of the revenue produced by it, the Brooks law was enacted; its intention was to stop what in the interests of good order ought to be unlawful sales of liquor, and to exact a larger revenue from those sales made lawful by license. Probably, at the date of this act, club organizations, wherein liquor was furnished, as here, had been in existence in large towns and cities for fifty years. The legislature was not ignorant of the fact; if such use tended to disorder or bad morals, the legislature knew it; if such use was not of immoral tendency, yet was a luxury or privilege that would bear taxation and yield revenue, they knew that fact; yet there are no words in the act which, by any possible construction, can be stretched into a prohibition of the use of liquor in clubs, or that can be deemed as requiring they shall be licensed. There is, in fact, no express legislation concerning this distinctive, open, notorious, long-existing use of liquor; the plain implication is that the consumption of liquor in clubs, as known to the legislature, was not deemed a sale. The general words of the law, however, make the sale of liquor without license illegal everywhere in the commonwealth; and whether this be a sale is now a judicial and not a legislative question.”

We will now consider the assignments of error. The first assignment cannot be sustained because at the time the motion was made for a binding instruction, in favor of the defendant, the commonwealth had made a sufficient case for the jury on the questions of the bona fides of the club organization, for which the defendant claimed to be a steward, and whether or not the defendant had in fact been selling liquor or only making a lawful distribution of the same among the members of the organization as its steward or employee. When it is considered that the jury might have found that the Fraternal Order of Eagles was a lawful organization, as a fraternal, beneficial and social order, and that it was, in effect, a club organization, we are of the opinion that the learned trial judge placed too heavy a burden on the defendant by the language used as quoted in the second, third, fourth and fifth assignments and they must be sustained. In the second assignment practically binding instructions were given to the jury that the organization held its meetings twice a month and that furnishing liquor to its members in the interim, every day of the week, was unlawful. We find in the record positive evidence to the effect that the organization was in session every day from nine o’clock a. m. until two o’clock the next morning, and that the meetings twice a month were executive sessions. In the third assignment we think the trial judge erred in giving a binding instruction, in effect, that the rules applicable to the organizations commonly known as clubs, would not apply to this organization. We do not think the learned judge was warranted in so instructing the jury. In the fourth assignment the trial judge gave practically a binding instruction that this lodge was not in session except twice a month. We do not think the record warrants this instruction as a matter of law. As to the fifth assignment we think the language there used was not, under the evidence, pertinent to the question of whether or not the defendant was guilty of selling liquors without a license, and the language used by the trial judge may have injured the defendant.

We are not convinced that the sixth, seventh and eighth assignments ought to be sustained. In our opinion, the language quoted in the ninth assignment subjected the defendant to a burden which he was not required to bear in the trial of the indictment against him for selling intoxicating liquors without a license, and the ninth assignment is sustained. The tenth assignment is that the court erred in the charge to the jury as a whole in failing to fairly and adequately present to that body the law applicable to the case. Then follows the charge entire. While there are some errors in the charge which have been raised by specific assignments we are not convinced that the charge as a whole is erroneous for the reason stated, and, therefore, the tenth assignment is not sustained.

The eleventh assignment is that the court erred in answering and refusing defendant’s fifth request for instruction, the request and answer being as follows: “If the jury find from the evidence in the case that the defendant is employed, at a stated wage, by an association of men calling themselves ‘The Fraternal Order of Eagles,’ as their steward or servant; that this association is conducted for fraternal, béneficial and social purposes, and is a bona fide organization with a selected membership of reputable persons who really own their property in common, — and that this association supplies to its members liquors, without profit, and as a mere incident to the social life of the association; that this defendant while in such employment served the members, and the members only, with liquors; that the liquors served by the defendant were the property of the members of the said association, and that the defendant made no profit on the same; that,then, if the jury find these facts from the evidence, the defendant has not sold liquors, and the verdict should be ‘Not Guilty.’ Answer: The fifth point is refused.” As we view the law the learned trial judge erred in refusing this point. It ought to have been affirmed, as it could well have been, without qualification.

The twelfth assignment is not sustained. We cannot say that the trial judge erred in refusing defendant’s seventh request for instructions to the jury as raised in the thirteenth assignment. The request on the part of the defendant’s counsel was for the court to say to the jury that all persons in Pennsylvania who are over twenty-one years of age, not of known intemperate habits, ’or insane, have, under the law, the right to buy and use intoxicating liquors as a beverage, etc. This omits a class of persons who are not entitled to buy and use intoxicating liquors, to wit, persons who are visibly intoxicated at the time when the liquors are asked to be furnished to them. If the learned trial judge had unqualifiedly affirmed this point he would have, in effect, said to the jury, that a club like the one in question could serve intoxicating drinks to its members while they were visibly intoxicated. This is not the law, and as the judge could not affirm the point without qualification he was justified in refusing it.

Further, to hold as requested would be to declare, in effect, that an association may be formed, the sole object of which is the furnishing of intoxicating liquors to its members, and that a steward, acting for such an association in making sales to its members, is immune from prosecution. It would be easy under such ruling to evade the license laws and to establish mere drinking places, which would be subject to no regulations. Such an institution is not a club — that is, it is not the sort of club to which the decisions heretofore cited apply, as a perusal of Justice Dean’s opinion in Klein- v. Livingston will abundantly show.

The thirteenth,-fourteenth, fifteenth, sixteenth, seventeenth and eighteenth assignments are not sustained.

The judgment is reversed with a venire facias de novo.  