Opinion
Argued April 7, 1978
August 17, 1978.
Liquor — Renewal of liquor license — Impropriety of original issuance — Liquor Code, Act 1951, April 12, P.L. 90 — Intent to transfer license.
1. In determining whether to grant a liquor license renewal under the Liquor Code, Act 1951, April 12, P.L. 90, the Pennsylvania Liquor Control Board may consider whether the original issuance constituted an illegal act, but cannot deny a renewal application merely because the propriety of the original issuance is questioned. [266-7]
2. To deny an application for a liquor license because the applicant intends to effect a transfer of the license for a profit shortly after its issuance is within the discretion of the Pennsylvania Liquor Control Board, and such a factor thus goes to the propriety of the issuance and cannot be considered when a transferee subsequently seeks to renew the license. [266-7-8]
Argued April 7, 1978, before Judges WILKINSON, JR., BLATT and DiSALLE, sitting as a panel of three.
Appeal, No. 970 C.D. 1977, from the Order of the Court of Common Pleas of Montgomery County in case of Appeal of Marble Hall Investment Company, Towamencin Tavern, Sumneytown Pike, P.O. Box 121, Towamencin Township, Kulpsville, Pennsylvania, No. 1 January Term, 1977.
Application to the Pennsylvania Liquor Control Board for renewal of liquor license. Application refused. Applicant appealed to the Court of Common Pleas of Montgomery County. Appeal sustained. License ordered issued. DAVENPORT, J. Board appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Sidney A. Simon, Special Assistant Attorney General, with him Harry Bowytz, Chief Counsel, and Robert P. Kane, Attorney General, for appellant.
A. Richard Gerber, with him Gerber, Maerz, Wilenzik Shields, for appellee.
The Pennsylvania Liquor Control Board (Board) has appealed from an order of the Court of Common Pleas of Montgomery County which directed the Board to renew a restaurant liquor license to Marble Hall Investment Company (Marble Hall).
The restaurant license in question here was originally issued to Francis A. Carr (Carr) on April 11, 1975. On May 23, 1975, Carr applied for the transfer of the license to Marble Hall which was approved on June 13, 1975. While Marble Hall searched for a new location, the license was returned to the Board for safekeeping. Marble Hall subsequently filed a timely application for the renewal of the license, but the Board notified the company on January 20, 1976 that the license would not be renewed. After a hearing requested by Marble Hall, the Board issued an order on December 15, 1976, refusing to renew the license and holding that Carr had deceived the Board in his application for a license and that he had obtained the license with the intention to resell it at a profit. The Board's order was then appealed to the lower court, which took no additional testimony but reversed on legal grounds, directing that the license be renewed.
The sole issue before us is whether or not the lower court properly interpreted Section 464 of the Liquor Code (Code), 47 P. S. § 4-464, which provides in pertinent part:
Act of April 12, 1951, P.L. 90, as amended, 47 P. S. § 1-101 et seq.
In considering the renewal of a license, the board shall not refuse any such renewal on the basis of the propriety of the original issuance or any prior renewal of such license.
The lower court reasoned that the question of Carr's motive in securing the license initially concerned the propriety of the original issuance, and that this motive was consequently irrelevant in considering the later application for a renewal of this license.
The Board has argued that Carr's alleged deception could rise to the level of fraud and that the original issuance of the license would, therefore, have been illegal. The Board relies on Whitford Liquor License Case, 166 Pa. Super. 48, 70 A.2d 708 (1950), in which our Superior Court interpreted this section of the Code to hold that the Board may deny a renewal application if the original issuance was an illegal act. In Whitford the Board had mistakenly issued a license in a locality where the existing licenses already exceeded the statutorily prescribed quota. The court held that Section 464 did not prevent the Board from correcting its own errors of law when it considered a renewal application, and the court there distinguished "legality" from "propriety":
'Legality' imports conformity to law; in that context, 'propriety' connotes conformity to a norm of conduct, or more specifically, it signifies appropriateness, suitability, fitness, correctness. . . . A judicial inquiry of the legality of an act requires examination of the law upon which it was ostensibly predicated. A judicial inquiry as to the propriety of an act of a public authority involves judgment upon the discretion and wisdom exercised in the circumstances.
Whitford, supra, 166 Pa. Super. at 51, 70 A.2d at 710.
The Board has not alleged here, as was alleged in Whitford, supra, that it did not have the legal authority to issue the license initially. Moreover, as our Supreme Court has held, the only inquiries which the Board may make in the initial grant of a license are those involving the fitness of the applicant, the consideration of whether or not the applicant alone is pecuniarily interested, and the investigation of whether or not the premises meet all of the Code requirements. Pittaulis Liquor License Case, 444 Pa. 243, 282 A.2d 388 (1971). The motive behind Carr's application for a license, therefore, may have been relevant to his fitness as a potential licensee, but any inquiry into his motive would, we believe, concern only "the discretion and wisdom" of the Board in granting him a license initially. Such an inquiry would fall within the area of the "propriety" of the Board's action. Inasmuch as Section 464 specifically prohibits the denial of a renewal license based upon the propriety of the original issuance, we must conclude, therefore, that the Board erred here in denying Marble Hall's renewal license on that basis.
The lower court properly reversed the Board and ordered that the renewal license be issued, and we will affirm that order.
ORDER
AND NOW, this 17th day of August, 1978, the order of the Court of Common Pleas of Montgomery County directing the Pennsylvania Liquor Control Board to renew the liquor license of Marble Hall Investment Company is hereby affirmed.