Martin v. Alcoholic Beverage Control Appeals Board

341 P.2d 296, 52 Cal. 2d 287, 1959 Cal. LEXIS 203
California Supreme Court·Decided June 12, 1959·No. S. F. 20102·Published·Cited by 42 cases

Opinions

SPENCE, J.

This is an appeal by Martin Bert Haley, the licensee, and also by the Alcoholic Beverage Control Appeals [289]*289Board (hereinafter called the Appeals Board) from a judgment of the trial court granting a writ of mandate directing the Appeals Board to affirm the decision of the Department of Alcoholic Beverage Control (hereinafter called the Department) revoking the general on-sale liquor license theretofore issued to Haley. For a general discussion of the respective powers conferred by article XX, section 22, of the Constitution upon the Department and the Appeals Board, reference is made to our recent decisions in Martin v. Alcoholic Beverage Control Appeals Board, Sac. 7040, ante, page 238 [340 P.2d 1], and Martin v. Alcoholic Beverage Control Appeals Board, L. A. 24698, ante, page 259 [341 P.2d 291].

In 1942 Haley applied for and received an on-sale liquor license for premises known as the Brite Spot in San Jose, of which he was then the sole owner. In either 1942 or 1943, Haley entered into an oral arrangement with one Frank Mendoza for the operation of the business as a partnership. Thereafter, each contributed money, exercised authority in running the business, and shared in the profits. They represented the business to be a partnership for the purpose of applying for business loans and insurance policies, and in preparing income tax returns. In 1953, on advice from the sales tax division, they obtained a sales tax permit in the names of both partners. Each testified that in 1953 they inquired from someone in the liquor division of the Board of Equalization whether they should obtain a liquor license in the partnership name, and that they were advised that this was not necessary. On the application for a renewal license each year from 1943 through 1955, only Haley signed his name as sole owner of the business, though the form indicated that in the ease of a partnership, the renewal application should be signed by each partner.

In April 1955, the Department filed an accusation against Haley charging him with violations of certain sections of the Alcoholic Beverage Control Act because of the undisclosed ownership of Mendoza in the business over the years 1943 to 1955. The hearing officer found that the accusation was true, that Haley had violated sections 23300, 23355, 23951, and 23953 of the Alcoholic Beverage Control Act (as now numbered in the Bus. & Prof. Code), and that grounds for suspension or revocation of the license under the provisions of section 24200, subdivisions (a), (b), and (e) of the act had been established. He recommended that the license be revoked, and the Department adopted his recommendation. Haley [290]*290appealed to the Appeals Board. The board upheld the Department on all issues except the penalty, which it found to be disproportionate to the offense found and to be arbitrary as a matter of law; and it reversed the decision with directions to the Department to reconsider the penalty imposed.

The director of the Department then filed in the superior court a petition for a writ of mandate. Following the trial, judgment was entered granting a writ of mandate directing the Appeals Board to vacate its decision reversing the Department’s order and to affirm the Department’s decision revoking Haley’s on-sale license.

Section 23300 of the Business and Professions Code provides that no person shall perform any act which a licensee may perform under the authority of a license unless the person is authorized to do so by a license issued by the Department. Section 23355 provides that the license issued by the Department authorizes the person to whom issued, and no others, to exercise the rights and privileges specified, at the premises for which issued. Section 23951 provides that the application for a license shall contain “in the case of a co-partnership, the names of the individual partners.” Section 23953 requires that such application “be signed by each of the partners.”

As hereinafter appears, the principal question argued by all parties relates to the power of the Appeals Board to reappraise the propriety of the penalty imposed where the Department has properly found upon substantial evidence that the licensee is subject to some disciplinary penalty. The record indisputably shows that Haley was not the sole owner of the business during the years in question, and that the failure to disclose the existing partnership on any of his renewal applications over a period of at least 12 years constituted repeated violations of the act. Upon this premise the Department argues that the offense committed was legally sufficient to justify revocation, and that the Appeals Board did not have the power to interfere with the penalty so imposed by the Department.

As here pertinent, the 1954 amendment to article XX, section 22, of the Constitution provided: " The department shall have the power, in its discretion, to . . . suspend or revoke any specific liquor license if it shall determine for good cause that the . . . continuance of such license would be contrary to public welfare or morals. . . . Review by the board of a decision of the department shall be limited to the questions [291]*291whether the department has proceeded without or in excess of its jurisdiction, whether the department has proceeded in the manner required by law, whether the decision is supported by the findings, and whether the findings are supported by substantial evidence in the light of the whole record. . . . When the order reverses the decision of the department, the board may direct the reconsideration of the matter in the light of its order and may direct the department to take such further action as is specially enjoined upon it by law, but the order shall not limit or control in any way the discretion vested by law in the department. Orders of the board shall be subject to judicial review upon petition of the director or any party aggrieved by such order. ’ ’

Where the question of the scope of judicial review has arisen in mandamus proceedings, it has been held that the propriety of the penalty imposed by an administrative agency is a matter vested in the discretion of such agency, and that its decision thereon will not be disturbed unless there has been a clear abuse of discretion. (Nardoni v. McConnell, 48 Cal.2d 500, 507 [310 P.2d 644]; Bonham, v. McConnell, 45 Cal.2d 304, 306 [288 P.2d 502]; Griswold v. Department of Alcoholic Bev. Control, 141 Cal.App.2d 807, 812 [297 P.2d 762] ; Altadena Community Church v. State Bd. of Equalization, 109 Cal.App.2d 99, 104, 106-107 [240 P.2d 322].) The statutory provision defining the scope of the judicial inquiry into the validity of an administrative decision expressly declares that the court’s “judgment shall not limit or control in any way the discretion legally vested’’ in the administrative agency. (Code Civ. Proc., §1094.5, subd.(e).) By a parity of reasoning, the same limitation is applicable to the power of the Appeals Board in reviewing the propriety of the Department’s decision on the penalty, when the Constitution has placed the discretion in the Department (art. XX, §22).

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Martin v. Alcoholic Beverage Control Appeals Board, 341 P.2d 296, 52 Cal. 2d 287, 1959 Cal. LEXIS 203 (Cal. 1959).

341 P.2d 296 (Martin v. Alcoholic Beverage Control Appeals Board) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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