Summary
In Stone v. Farish, 199 Miss. 186, 23 So.2d 911, which held that the Commissioner had authority to cancel the permit of a wholesale distributor of beer, the opinion said that this kind of permit or license was "not a property or contract right. Its revocation need seek no judicial sanction * * *".
Summary of this case from Powell v. State Tax CommissionOpinion
No. 35987.
November 26, 1945. Suggestion of Error Overruled January 14, 1946.
1. INTOXICATING LIQUORS.
Those who would avail themselves of the legislative privilege of engaging in sale of beer accept the privilege under the conditions attached to its exercise (Code 1942, secs. 10213, 10238, 10244, 10257).
2. INTOXICATING LIQUORS.
Ordinarily, a license may have aspects of property, but the conditions under which permit to engage in wholesale distribution of beer is granted strip it of that quality which requires divestiture only by judicial process (Code 1942, secs. 10213, 10238, 10244, 10257).
3. INTOXICATING LIQUORS.
Where conditions are attached to permit to engage in wholesale distribution of beer, the permit is not a property or contract right and judicial sanction is not necessary for its revocation and a judicial proceeding is not available to forbid proper exercise of power of revocation (Code 1942, secs. 10213, 10238, 10244, 10257).
4. INTOXICATING LIQUORS.
The absolute administrative power to revoke a permit for wholesale distribution of beer excludes judicial review where the power is exercised under conditions of its bestowal, but it does not imply arbitrary or capricious exercise (Code 1942, secs. 10213, 10238, 10244, 10257).
5. INTOXICATING LIQUORS.
Administrative questions regarding revocation of permit for wholesale distribution of beer belong within the legislative orbit and, although judicial oversight can never be absolutely forbidden, it is measured by the same considerations which apply to direct legislative acts (Code 1942, secs 10213, 10238, 10244, 10257).
6. INTOXICATING LIQUORS.
The statute authorizing State Tax Commissioner to revoke permit for wholesale distribution of beer under certain conditions is constitutional (Code 1942, secs. 10213, 10238, 10244, 10257).
7. INTOXICATING LIQUORS.
Where notice of Commissioner disclosed to permittee that permit for wholesale distribution of beer would be revoked because permittee's brother was owner and operator of business and was not merely agent of permittee and Commissioner's order found that the specifications set out in notice had been substantiated, order of Commissioner revoking permit was final (Code 1942, secs. 10213, 10238, 10244, 10257).
APPEAL from the chancery court of Hinds county, HON. V.J. STRICKER, Chancellor.
J.H. Sumrall, of Jackson, for appellant.
Under the laws of Mississippi, alcoholic beverages and intoxicating liquors may not be lawfully sold in the State of Mississippi, and the granting of a permit to sell light wines and beer within the state is not only in contravention of the general policy of the law of the state with reference to the sale of intoxicating liquors, but it is clearly a special privilege to be granted only to those persons possessing the qualifications described by the statute, being allowed to be held only so long as the holder thereof fully measures up to the high degree of qualifications contemplated by the law. And it is the manifest intention of the law to place the responsibility of determining the qualification of a person to whom a permit shall be granted is the one person authorized to issue the permit, to-wit, the Chairman of the State Tax Commission, as Commissioner. And it is likewise manifest that since the privilege granted by such permit is a special privilege granted only to persons possessing the necessary qualifications, the right to revoke said permit is placed in the same authority in whom the exclusive privilege rests to determine the qualification of an applicant for such permit, as well as being the sole judge of sufficiency of the acts to forfeit the special privilege extended in the granting of said permit.
Dunn Construction Co. v. Craig, 191 Miss. 682, 711, 2 So.2d 166; State ex rel. Bismarck Grill, Inc., v. Keirnan, 181 S.W.2d 798; McCanless v. State, 153 A.L.R. 832; Cook, Commissioner of Revenues, v. Glazer's Wholesale Drug Co. of Arkansas, 189 S.W.2d 897; Code of 1942, Secs. 10212, 10213, 10238, 10257; Laws of 1934, Chs. 127, 171; 30 Am. Jur., Intoxicating Liquors, Secs. 131, 133, 134, 135, 136, 140, 142, 145, 146, 149.
The lower court erred in entertaining jurisdiction of this cause, based upon the fiat of the circuit judge of the Ninth Judicial District, when the petition shows on its face not only that no emergency existed which is required to give jurisdiction to a judge other than the chancellor of the district in which the person to be enjoined resides, and because the record discloses that the petition did not request, and neither did the judge to whom the petition was first presented require, any notice to the defendant before the temporary injunction was granted.
Code of 1942, Sec. 1657; Griffith's Mississippi Chancery Practice, Sec. 445.
The chancery court erred in overruling the motion of the appellant, defendant in the lower court, to dissolve the temporary injunction on the ground that same had been issued without authority by the circuit clerk of Warren County. The writ was issued by the clerk of the circuit court of Warren County upon a fiat issued by the circuit judge of the Ninth District, dated the 27th day of April, 1945, upon a petition filed with said circuit judge on the 26th day of April, 1945.
Hamilton v. Long et al., 181 Miss. 627, 180 So. 615.
The lower court erred in refusing to take testimony as he announced that he would do in overruling the motion to dissolve the temporary injunction, the court taking jurisdiction of the matter only on the theory that in the absence of statutory proceeding provided in such matters, the petition could be accepted only as a charge of abuse of discretion by the defendant. And this question could only be determined by the court after hearing evidence upon which the Commissioner acted in holding that the permit in question had been forfeited, and the justification of the order of revocation, the enforcement of which was sought to be restrained by the proceeding instituted by the appellee herein.
The lower court erred in holding that the proceeding before the Commissioner was void, because no proper notice was provided for by statute.
In re Grant, 44 Utah, 386, 140 P. 226, Ann. Cas. 1917A, 1019.
The lower court erred in holding that the Commissioner, the defendant in the lower court and the appellant herein, was without authority to revoke the permit in question, without a conviction by a court of competent jurisdiction of some of the violations of the beer tax law or regulations issued by the Commissioner.
In re Grant, supra; Feldman v. South Carolina Tax Commission et al., 203 S.C. 49, 26 S.E.2d 22; 30 Am. Jur. 296, Sec. 73.
The lower court erred in holding that the complainant in the lower court, the appellee herein, was entitled to any relief whatever under the proceedings as instituted.
McLellan v. Mayor, etc., of City of Janesville, 99 Wis. 544, 75 N.W. 308.
The lower court erred in granting the prayer of the petition filed by the complainant in the lower court and the appellee herein.
Darling Apartment Co. v. Springer Liquor Commission (Del.), 22 A.2d 397, 137 A.L.R. 803.
The lower court erred in granting a permanent injunction against the appellant herein, as Commissioner, and prohibiting the enforcement of the order of revocation issued by the Commissioner in the performance of his duty in the administration of the beer tax law.
Where authority is given and discretion vested in any tribunal in the issuance of a permit or privilege to grant this special or extraordinary privilege, the exercise of such authority is not judicial, but purely administrative. No legal or constitutional right is invaded by the summary exercise of the power. It follows that the licensee has no constitutional cause for complaint in that no right of appeal to a competent court is conferred by the act.
In re Grant, supra; Com. v. Kinsley, 133 Mass. 578; Burgess v. Mayor of City of Brockton, 235 Mass. 95, 126 N.E. 456; Stone v. Fitts, 169 Ind. 361, 82 N.E. 792, 15 L.R.A. (N.S.) 1147, 14 Ann. Cas. 295; People ex rel. Lodes v. Health Department, 189 N.Y. 187, 82 N.E. 187, 13 L.R.A. (N.S.) 894; Wallace v. Mayor, etc., of City of Reno, 27 Nev. 71, 73 P. 528, 63 L.R.A. 337, 103 Am. St. Rep. 747; Child v. Bemus, 17 R.I. 230, 21 A. 539, 12 L.R.A. 57; Grand Rapids v. Braudy, 105 Mich. 670, 64 N.W. 29, 31 L.R.A. 116, 55 Am. St. Rep. 472; 21 A. E. Ency. Law 826; 37 C.J. 248; 2 Am. Jur. 857; Black, Intoxicating Liquors, Sec. 194; 33 Am. Jur. 382, 383.
See also Darling Apartment Co. v. Springer Liquor Commission, supra; Feldman v. South Carolina Tax Commission et al., supra.
The lower court erred in refusing to grant an appeal with supersedeas on the petition of the appellant herein, duly filed and presented to the court during the term at which the permanent injunction had been issued. The trial court should have granted the motion of the appellant for supersedeas. Not only does the law under consideration provide for no appeal from the action of the Commissioner in revoking a permit, but under the procedure of this Court in such instances the only method by which the action of the Commissioner could be reviewed by a court would be by removal of the cause to the circuit court by certiorari, or, if the facts justified such procedure, to attack the validity of the order by a charge of abuse of discretion. There being no charge of abuse of discretion contained in the petition filed in the lower court, then the chancery court of Hinds County had no jurisdiction of this matter. And if the procedure should be treated as the equivalent of a proceeding by certiorari, then under the rule laid down by this Court in many decisions, nothing could be inquired into by the court except questions of law. And in the recent case of Feldman v. South Carolina Tax Commission, supra, it is manifest that the lower court exceeded his authority in attempting to set aside the order of revocation of the permit, which had been accomplished by the Commissioner in strict conformity with the law involved. The court having assumed jurisdiction improperly, and granted relief to the petitioner which was beyond the power of the court, and thereby improperly restoring the right of the petitioner to continue business under a permit which had been forfeited and revoked by a proper procedure, then it was manifestly beyond the power of the court in the proceeding before it to restore the privilege to the petitioner, and failure to grant supersedeas from the erroneous judgment allowed the petitioner to continue in a business without a proper permit, said privilege being granted by the lower court that had no authority or jurisdiction of the matter involved.
The license held by the appellee created no contractual right, nor vested in him any property right.
Thacker v. Morris et al. (Ga.), 26 S.E.2d 329; Sprayberry v. Atlanta, 87 Ga. 120, 125, 13 S.E. 197; McKown v. Atlanta, 184 Ga.. 221, 190 S.E. 571, and cases cited.
There is only involved in this litigation one question, and that is whether or not the Commissioner, the appellant herein, is clothed with the authority to exercise the same discretion in determining whether or not the special privilege granted by the issuance of a permit to sell beer has been forfeited, that he is required to exercise in determining whether or not an applicant for such permit possesses the qualifications described by law for obtaining same. The law is plain in conferring this exclusive authority and discretion on the Commissioner, the person charged with the duty and clothed with the authority to administer this law which authorizes the conferring of special privileges exclusively to persons determined by the proper authority to be qualified to receive such privileges. And it is likewise manifest that in order to fully carry out the safeguards intended to be thrown around this limited privilege the law requires and authorizes the exercise of the same careful discretion which is required in determining the qualification of an applicant for such privilege. The very nature of the privilege which could be created under the law in question being one in which discretion would be exercised in its granting, the legislature properly refrained from providing for any appeal from the action of the officer in whom said discretion was placed.
It must be presumed that the Commission will not act capriciously or maliciously. Summary action is often regarded as necessary in matters affectng the public health and morals; and it may be supposed that the legislature conferred the summary power of cancellation and suspension after a balancing of considerations of the public welfare with possible cases of unfairness and injustice to the licensees.
Darling Apartment Co. v. Springer Liquor Commission, supra.
It is the rule that there is no right existing in the holder of a permit to sell alcoholic liquors to contest the propriety of the action of the authority clothed with the authority or the officer charged with the duty of revoking such permit, except to charge and prove that such act was capricious or malicious. And there being no such charge directly made or implied in the petition filed in the lower court, then the presumption of law must be accepted that such action of revocation was not capricious, malicious or arbitrary.
The action of the lower court has enabled this permit holder to procure a stay which would allow him to enjoy the benefits of his license and laugh at the futile efforts of the Commissioner in his efforts to take it away and thereby enforce the law and the conditions under which the permit was originally granted.
Culkin, Laughlin Thames, and R.M. Kelly, all of Vicksburg, for appellee.
This statute vests no discretionary power in the Commissioner, but, to the contrary, the Commissioner is commanded by a direct legislative order to issue a permit to any and all persons who make the required oath and file the required application. It is perfectly obvious that the required oath contains nothing more than an obligation on the part of the applicant not to violate the law, which has always been the obligation of all good citizens. The Commissioner has no discretion whatsoever, under the law of this state, either in granting a permit or revoking same. It is this erroneous assumption of the alleged discretionary right and power, on the part of the Chairman of the State Tax Commission, which has caused whatever confusion which may now exist in this state in the administration of the wine and beer statutes, and which caused the original proceeding to be instituted against the appellee.
Code of 1942, Ch. 5, Title 40, Secs. 10210, 10237, 10238, 10242.
The State Tax Commission or the Commissioner did not follow the expressed provisions of the statutes in the attempt to revoke the permit of the appellee.
Code of 1942, Secs. 10211, 10226, 10255, 10257, 10264.
Section 10213, Code of 1942, does not authorize and empower the Commissioner to revoke the permit of appellee.
Code of 1942, Secs. 10213, 10226, 10264.
The statutes as construed and interpreted by the appellant as granting him the arbitrary and absolute power and authority to revoke the permit of appellee, are unconstitutional and void.
Argued orally by J.H. Sumrall, for appellant, and by J.D. Thames, for appellee.
Appellee is the holder of a permit as a wholesale distributor of beer under the trade name of John's Distributing Company. Section 10238, Code 1942. Such permit was cancelled by the Commissioner and appellee sought injunction to prevent revocation. Upon final hearing, the temporary injunction was made final. The Commissioner appeals, and the decree having been based upon the unconstitutionality of the statutes authorizing revocation, such issue alone is here presented.
For the facts surrounding the action by the Commissioner, we look to appellee's original bill and the sworn answer, together with the exhibits to both, the matter having been set down by the court for hearing thereon. The chancellor denied tender of oral testimony by the Commissioner and decided the matter upon the issue of legislative competency.
The record discloses that the Commissioner on October 20, 1944, issued notice of revocation specifying seven grounds therefor. These include "persistent and continuous failure" to comply with various regulations and provisions of the statutes, including the allegation that the business was in fact conducted by a brother of appellee, C. John, who by his own admission is conducting a whisky business upon the premises in violation of Section 10238, Code 1942. The notice stated "you are further notified that, unless within ten days of this notice you show cause, if any you can, why such permit should not be revoked and canceled," revocation would be effected. Appellee filed answer to this notice, and after repeated delays the matter was heard on January 30, 1945, and upon request continued until April 12, 1945, on which date final order of revocation was entered by the Commissioner in which all members of the Commission joined. This order found that the specifications set out in the notice had been substantiated and further, upon grounds elaborately set forth, that C. John was not merely the agent of appellee but the owner and operator of the business.
The applicable statutes as found in the 1942 Code are as follows:
"Section 10213. . . . Provided, that the Commissioner shall revoke any permit granted by authority of this Act to any person who shall violate any of the provisions of this Act or the revenue laws of this State relating to engaging in transporting, storing, selling, distributing, possessing, receiving or manufacturing of wines or beer, or any person who shall hereafter be convicted of the unlawful sale of intoxicating liquor, or any person who shall allow or permit any form of gambling or immorality on the premises described in such permit.
"The penalty for the violation of any of the provisions of this Act in addition to other penalties provided by law shall be revocation and cancellation of such permit granted."
"Section 10257. Revocation of permit. — If any person exercising any privilege taxable under the provisions of this Act, shall wilfully neglect or refuse to comply with the provisions of this Act, or the provisions of House Bill No. 26 (Div. 1, this chapter), General Laws of the State of Mississippi 1934, or any rules or regulations promulgated by the Commissioner under authority of this Act, the Commissioner shall be authorized to revoke the permit theretofore issued to such person, after giving to such person ten days notice of the intention of the Commissioner to revoke such permit; and any person whose permit shall have been revoked by the Commissioner, shall be thereafter prohibited from exercising any privilege taxable under the provisions of this Act. The Commissioner may, however, for good cause shown, grant a new permit upon such conditions as the Commissioner may prescribe."
Sections 10213 and 10244 require permittee to file bond conditioned upon compliance with the statutes and "with the rules and regulations prescribed by the Commissioner," and Section 10238 requires an oath of compliance.
Although the opinion of the learned chancellor, incorporated into the record by his decree, expresses the view that the statutes were "inherently void," the final decree was grounded upon an absence of due process. Let us examine the legislative power in the light of our constitution.
Until the passage of Chapter 171, Laws 1934, the sale of intoxicating liquors, including beer, was forbidden. By that act, the sale of beer of an alcoholic content not exceeding four percent by volume was conceded. The conditions under which such business was vouchsafed reflected a legislative policy, judicially recognized as promoting the general welfare, that there be, if not an outlawry, a controlled restraint. The controversy here illustrates the conflict between the judgment of the people expressed through their Legislature, which sees in the business a menace to the purposes of the Constitution expressed in its preamble, and the will of the individual, who, under the banner of its bill of rights, makes assault upon these statutes. The traffic, for reasons which the courts have never questioned, has been put upon legislative leash. More than this, the citizens of each county have been conceded the right to foster or forbid its traffic at their will. It would seem both practical and logical that if the commodity itself is beholden to the people, and paroled to its judgment or caprice, its commerce could remain submissive to the legislative judgment which has set it at large upon its good behavior.
Those who would avail of the legislative privilege of engaging in its sale accept the privilege under the conditons attached to its exercise. They bind themselves with an oath. The wholesaler pledges not only his word but puts his goods under bond in acknowledgment of the conditions inherent in the privilege. He exercises no right, is given nothing that is property. It is true that ordinarily a license may have aspects of property, but the control here retained strips it of that quality which requires divestiture only by judicial process. Much less is it an inalienable right; it has become but an alienable privilege. What the Legislature may absolutely forbid, it may absolutely control. It is no answer that beer not exceeding a four percent alcoholic content may be legally possessed and sold. Even this diminished potency is viewed askance by the Legislature for it has reserved the right of confiscation upon condition broken. Section 10258, Code 1942. If the Legislature has the power to invest this commodity with the power of depriving the citizen of his liberty under conviction, it would seem an inevitable consequence that it could keep it under legislative surveillance in the interest of protecting the citizens, with the power to take away its liberty in turn upon breach of the terms of its parole.
Discussion of the legislative power upon an assumption that we are here dealing with private legal rights is out of place. Yet, even such rights end where the conflicting rights of others begin. Here the right and authority of the Legislature is absolute, and we do not inquire where appellant's private rights end for, as such, they have never had a beginning. As heretofore stated, considered as a privilege it is valuable and once conceded may be enjoyed within the confines of the statutory conditions.
A permit or license of the kind here involved is not a property or contract right. Its revocation need seek no judicial sanction, nor is a judicial proceeding available to forbid its proper exercise. 30 Am. Jur., Intoxicating Liquors, Secs. 73, 76, 134-142, inclusive; Clark v. State, 169 Miss. 369, 152 So. 820; Baur, Fed. Administrative Law, Sec. 511; Landis, The Administrative Process, pp. 38, 48, 97; Black, Intoxicating Liquors, Sec. 194. Administrative power, despite its alleged abuses, is not to be shouted down with mere slogans. The din of partizan debate unfits an intent mind for serene thought and obscures the truth that the Legislature, once aware of judicial interference, could, at a stroke, abolish the entire traffic. MaKing Products Company v. Blair, 271 U.S. 479, 46 S.Ct. 544, 70 L.Ed. 1046. There is a vast difference between depriving a citizen of property without due process of law and revoking a privilege by due process of procedure.
Our inquiry, therefore, goes a bit further. While we are unanimous in the view that the legislative mechanism for complete control transgresses no legal or constitutional barriers, we are led to examine whether the right of revocation was here properly exercised.
The statute requires notice to the permit holder, but not, in express terms, a hearing. Both were, however, given. While absolute power excludes judicial review where exercised under the conditions of its bestowal, it does not imply arbitrary or capricious exercise.
Administrative questions belong within the legislative orbit, while judicial questions of necessity fall within the judicial province. Bauer, op. cit. supra, Secs. 506, 509, 511; Landis, op. cit. supra, p. 147. Judicial oversight can never be absolutely forbidden, yet it is measured by the same considerations which apply to direct legislative acts. The Commissioner is pro hac vice, an extended arm of the Legislature.
Those who stand aghast at the gradual accession of administrative power are blind to the truth that while the approving voice is that of the courts, the fashioning hands are the hands of the Legislature. Indeed, an apt constitutional inquiry may well include the power of the judiciary to substitute or impose its judgment upon the legislative branch. See Cumberland Tel. and Tel. Company v. State, 135 Miss. 835, 100 So. 378.
There is thus exhibited an exercise of legislative discretion whose finality is based upon the constitutional separation of powers. Den ex dem. Murray v. Hoboken Land Imp. Co., 18 How. 272, 59 U.S. 272, 15 L.Ed. 372; Monongahela Bridge Company v. United States, 216 U.S. 177, 30 S.Ct. 356, 54 L.Ed. 435. Exact demarcation between the two functions has always been difficult. A few courts have leaned backward in their stand lest they seem to waver in their championship of sacred private rights. Other courts finding in this posture an ungainly and unprogressive gesture have leaned too far forward in their anxiety to avoid a backward leaning. Devotees of the former position argue that it is against constitutional and democratic fundamentals to accord to a board or commissioner the power of life and death over the business of the citizen. The phrase is thought-provoking, begets caution ad comnpels analysis. Yet, such protestations are to be muted with the sober reflection that the power which would seek to discontinue the life of the business here involved is the creator of the life itself. It indeed had that power and exercised it. There is no legal reason why the citizen may not, in availing of this act of legislative grace, pursue an unmolested and profitable existence. If perchance its life is strangled, it is because of entanglement with the administrative cords by which it is bound. Too much rope is always a hazard in the hands of one with too little concern.
The courts have proceeded with circumspection in those areas of human rights which are mined with menace to our ship of state. Their duty is to follow those paths cleared by those whose courage and resources of detection have revealed a safe way. This course has been clearly defined and made familiar to judicial pilotage. Recognition of a devotion to basic rights is not best attested by those who, impatient of some suitable season, lodge the weight of their censure against the most convenient victim, unaware that he walks abroad solely at the behest of the representatives of that popular sovereignty whose right to regulate what they deem a social threat is thereby put to test.
The subject continues to provoke research. The announced rule is too well fortified to admit of doubt as to judicial trends. In addition to cases cited in the opinion and the briefs, the subject is elaborated in the following: 137 A.L.R., p. 803, (Annotation); Ann. Cas. 1917A, 1019 (Annotation); Pound, Administrative Justice, 41 H.L. Rev. 114; Rosenberry, Administrative Law and Constitution, 23 Am. Pol. S.C. Rev. 32; Frankfurter, The Task of Administrative Law, U. of Pa. L. Rev., May 1926; Dickinson, Administrative Law and The Fear of Bureaucracy, Am. Bar Ass'n Journal, Oct. 1928, p. 513, Nov. 1928, p. 597; Dickinson, Judicial Control of Official Discretion, 22 Am. Pol. S.C. Rev. 275; Satterfield, Judicial Review of Decisions of Administrative Tribunals, Miss. L. Journal, Vol. 4, p. 184; Wiel, Administrative Finality, 38 H.L. Rev. 447; Albertson, Judicial Review of Administrative Action, 35 H.L. Rev. 127; Hart, Administrative Justice and the Supremacy of Law, 29 Geo. L.J. 543; Pound, Administrative Process, 30 Am. Bar Ass'n Journal 121; Morganthau, Implied Limitations on Regulatory Powers, 11 U. Chi. L. Rev. 91. For answer to threat of abuse of discretion, see Munn v. State of Illinois, 94 U.S. 113, 24 L.Ed. 77; Clark v. State, 169 Miss. 369, 380, 152 So. 820; Address, Francis Biddle, 27 Am. Bar. Ass'n Journal 660; Address, Judge John J. Parker, Vol. 16, Miss. L. Journal, pp. 357, 370.
Nor do we find in this case an occasion to stray aside into those by-paths where the bodyguards of bureaucracy are beset by an aroused and suspicious citizenry, and the favored phrases of the law are bandied about with missionary zeal. For all we know, the Legislature may have seen in the traffic a portent comparable with the threat of bureaucracy. It is not our function nor concern to speculate thereon.
There is not here involved the right of the Commissioner to withhold permit in the first instance. Nor is there presented his right to act capriciously or without cause. We do not suggest what exceptional circumstances would open the door to judicial inquiry. There must exist some of the grounds stated in the statute. Such existence is here disclosed by the notice and its specifications, and confirmed by the Commissioner's order. Such order is therefore final. Our decision goes no further than a consideration of the particular subject matter of the legislation here involved and the facts disclosed by this record.
We are of the opinion that the learned chancellor was in error in making perpetual the injunction, and that the injunction ought to have been dissolved.
Reversed and decree here for appellant.