Cromwell v. Jackson , 188 Md. 8 ( 1947 )

For centuries, in England and this country and in other countries, legislatures have tried various ways to regulate — or prohibit — liquor traffic, in order to control and diminish the recognized evils, crime, vice, and disorder, associated with such traffic. Among the earliest and latest methods used for this purpose is to restrict the traffic: (1) to fit persons, (2) in proper places, and (3) in limited numbers only sufficient for the public's need. In England, in 1495 an act was passed whereby justices of the peace were empowered to "put away common ale-selling in towns and places where they should think convenient and to take sureties of keepers of ale-houses in their good behavior." An act of 1551-1552, which introduced licensing, confirmed the power of suppressing common ale-selling, and provided that no one should be allowed to keep a common ale-house or "tippling" house without obtaining the permission of the justices in open session or of two of their number, and directed the justices to take bond from the persons they licensed and empowered them to try breaches of the conditions of their bonds and to punish the offenders.

In this country, in various states (and colonies), from time to time for three hundred years, through judicial tribunals or executive or administrative agencies, or both, licensing has been in force for the three purposes above mentioned. In the course of the last 100 years almost every conceivable kind of liquor legislation, including state prohibition, "local option" and national prohibition, has been tried without general satisfaction. In 1933, upon repeal of national prohibition, the State of Maryland enacted a comprehensive so-called "general" law, with many different substantive and procedural provisions for various counties and the City of Baltimore, all directed to regulation, through licensing, for the same three purposes. Already the Act has been amended in many provisions. Acts of 1933 (Special Session), ch. 2; Code and 1943 Supplement, Article 2B. At the same 1933 session another act, applicable only to Allegany County, was passed for the same expressed purposes, but with different procedure. Acts of 1933 (Special Session), ch. 5.

In Maryland, from time to time for at least 167 years, the power and duty to issue liquor licenses, or to decide whether they shall be issued, has been vested in courts, at other times or in other counties in executive or administrative agencies, with or without "appeal" to, or statutory review by, the courts. The Act of 1780, ch. 24, a general act, "for licensing and regulating ordinary keepers," provided (Sec. 1) that "the justices of each county, in court sitting, be * * * empowered and authorized * * * to grant licenses [1] to such person * * * as they shall think fit, being persons of good repute, to be ordinary-keepers * * * in [2] such and [3] so many places within their * * * counties * * * for the ease and convenience * * * as to them shall seem meet * * *." (Bracketed numbers supplied.) Apparently this statute was in force at least until 1825. The Act of 1816, ch. 193, relating to the Baltimore City Court, provided (sec. 14): "That in all cases of applications to the said court for ordinary or retailers' licenses, it shall be in their [the judges'] discretion to grant or refuse the same." The Act of 1818, ch. 170, relating to Kent County, provided (Sec. 1) that the court should not grant the license unless the applicant exhibited the consent in writing of fifty inhabitants of the county, residents of the election district where the selling was to be done and twenty of whom should reside within eight miles of the place; Section 12 provided that nothing in the act made it mandatory on the judges to issue the license but the act left it entirely within their discretion though the applicant conformed with the act. The Act of 1846, ch. 90, provided that it should not be lawful for the clerk of the Montgomery county court to issue a license to sell liquors at any place within a specified locality without an order of one of the judges of said court if he shall be satisfied from the written representation of respectable inhabitants in the neighborhood of "the necessity and propriety of granting such license." The Act of 1884, ch. 270, as amended by the Act of 1888, ch. 57, P.L.L. (1888), Art. 23, secs. 60-73, relating to Wicomico County, authorized issuance, by the clerk of the circuit court, of retail liquor licenses only to inn or tavern keepers, who had beds for the accommodation of guests. The application was required to be accompanied by a certificate of residents stating, inter alia, that the applicant was of good moral character and that an inn or tavern was necessary for the accommodation of the public. Section 63 provided for hearings on applications, before the clerk, and that "the clerk may or may not, at his discretion, approve such application" and in order to satisfy himself fully of the propriety of approving it, shall receive remonstrances and hear evidence and arguments, for and against the same, and "the decision of the clerk shall be final; provided that any one aggrieved by his decision may take an appeal to the circuit court * * * and on appeal * * * the same proceedings shall be had as on appeals from justices of the peace." Section 76 provided: "Judicial powers are hereby conferred on the clerk * * * for the purposes herein mentioned," a provision which may or may not have been constitutional but which clearly indicates that the legislature had no idea that it was imposing non-judicial powers and duties on the courts.

The Act of 1894, ch. 6, relating to Carroll County, held constitutional in McCrea v. Roberts, 89 Md. 238, 248, 43 A. 39, 40, 44 L.R.A. 485, authorized issuance of licenses by the clerk in the absence of objection, but provided that if any person filed a written protest against the granting of the license the clerk should present the application and the remonstrance to a judge and the "judge shall proceed to hear and determine the question as to whether the license applied for shall be issued or not." About the same time as the Carroll County Act of 1894 a number of more or less similar acts, providing for judicial action in contested cases, were passed for other localities, including among others the Baltimore county Act of 1890, ch. 334, and the Act of 1892, ch. 433, applicable to the City of Cumberland, extended to the whole of Allegany County by the Act of 1894, ch. 140.

The "general" Act of 1933 provided for approval or disapproval of liquor license applications by administrative boards (Art. 2B, Secs. 16, 18), subject to appeal and hearing de novo before another administrative board. Art. 2B, § 63. Section 16 provides that if the original board "determines that [3] the granting of the license is not necessary for the accommodation of the public or [1] that the applicant is not a fit person to receive the license applied for, * * * or [2] that the operation of the business, if the license is granted, will unduly disturb the peace of the residents of the neighborhood in which the place of business is to be located, or that there are other reasons,in the discretion of the Board, why the license should not beissued, then the application shall be disapproved and the license applied for shall be refused." (Bracketed numbers and italics supplied.) Although the statute provided no appeal or review of decisions of the appellate administrative board, this court in Federico v.Bratten, 181 Md. 507, 30 A.2d 776, held that such a decision, based on an erroneous construction of the statute, was subject to the inherent judicial power of review by a court of equity.

It is common knowledge, of which we take judicial notice, that in Baltimore and elsewhere a few years ago public dissatisfaction with the appellate review by the administrative board led to amendment of the statute by substituting, in Baltimore City and certain counties, judicial review by "appeal" in lieu of the administrative "appeal." Acts of 1941, chs. 438 and 686; Acts of 1943, ch. 714; 1943 Supplement, sec. 63. On appeal to the court the action of the local board is presumed "to be proper and to best serve the public interest." The burden of proof is upon the appellant to show "that the decision complained of was againstthe public interest and that the local board's discretion in rendering its decision was not honestly and fairly exercised,or that such decision was arbitrary, or procured by fraud, or unsupported by any substantial evidence, or was unreasonable, or that such decision was beyond the powers of the board, and was illegal." (Italics supplied.) If, in the opinion of the court, "it is impracticable to determine the question presented to the court, in the case on appeal, without the hearing of additional evidence, or * * * any qualified litigant has been deprived of the opportunity to offer evidence," or "if the interests of justice otherwise require that further evidence should be taken,"the court may hear additional testimony. (Italics supplied.) Manifestly this statutory "appeal" is broader than the inherent judicial power of review of administrative action.

By the Allegany County Act of 1933 (Section 305) the legislature prescribed the qualifications of licensees, including the same three which, in various forms and with greater or less detail, have been prescribed in practically every licensing act from the Act of 1780, supra, to the "general" Act of 1933 — indeed from the first English Act of 1551-1552 — viz., that [1] the applicant is "a fit person to be granted such license" and [2] "the place is a proper one with reference to the public peace and general welfare of the neighborhood or to the character of its inhabitants, [3] due regard being given to the number of said licenses issued for said neighborhood," as well as all specific restrictions and conditions set forth in the Act. The Act also provides that, before any applicant is given a license, he must establish these qualifications in a judicial proceeding, contested or uncontested. The above language of section 305 regarding fitness of the person is the same as the Cumberland Act of 1892, and the Allegany County Act of 1894, both of which provided (Sec. 175C) that the court should, in its discretion, whenever in its opinion the applicant was an "unfit person to be granted such license," direct the clerk not to issue the same. Section 175C of the Acts of 1892 and 1894 was in force, without change in this language regarding fitness of the person, until 1933. It was, however, amended in 1902, 1904, 1908 and 1910 by the addition of language regarding fitness of the place, and the number, which since 1910 has been the same as the above language of the Act of 1933.

The majority opinion in the instant case holds that this Act violates the Maryland constitutional declaration of separation of legislative, executive and judicial powers and is unconstitutional, on the alleged ground that the questions as to the existence of the three qualifications above mentioned,viz., fitness of person, place and number, are not judicial questions, are not "questions of law or of fact, nor mixed questions of law and fact"; that "the Act lays down no rule to guide the Court as to who is a fit person for the license"; that "whether a person is a fit person to have a license to sell alcoholic beverages is a question of public policy or expediency depending upon many matters"; that determination of "fitness" to have custody of an infant is governed by "a definite guide," viz., that "the welfare of the infant is the primary consideration," but the Act now in question fails to state whether "the primary consideration" in determining "fitness" for a liquor license is "the welfare of the purchaser, the welfare of the seller or manufacturer, the welfare of the seller's or purchaser's family, or the welfare of the public in general," and that if "the welfare of the public" is "the primary consideration" there is no "guide," but "it is purely a question of expediency and policy." Like reasoning is applied to the questions of fitness of place and number.

This conclusion that fitness for issuance of a liquor license is a non-judicial question which cannot be determined by a court when duly presented to it pursuant to express statutory provision is unsupported by any authority, is contrary to the decision of this court in McCrea v. Roberts, supra, to the few decisions in other states where the validity of such legislation has ever been questioned, and to the unbroken recognition of the validity of such legislation in Maryland, from 1780 to date, by every branch of government, legislative, executive and judicial, including our own predecessors, many of whom, as judges of this court, were judges of county courts or circuit courts which enforced such legislation, and three of whom were Chief Judges of this court and of the Circuit Court for Allegany County while the successive acts of 1892 or 1894 or 1933 were in force and were enforced by that court.

Due respect for a coordinate branch of government requires that, in case of doubt, we sustain the constitutionality of legislation and that, of two permissible constructions of a statute, we adopt one which will make the statute constitutional and not one which will invalidate it. Like respect for our own predecessors and for the history of all the branches of government requires that we should not lightly ignore or condemn that history in order to hold that every saloon license in Allegany County is void and every sale made there since 1894 is a crime. Historical considerations are especially weighty in construing or applying a constitutional provision so incapable of exact definition as the separation of powers.

Common knowledge of the purpose of licensing legislation for centuries, and multitudinous decisions of the Supreme Court and other courts for at least 100 years (ever since the LicenseCases, 5 How. 504, 12 L. Ed. 256), leave no room for doubt as to "the primary consideration" governing determination of "fitness" for a liquor license. Liquor license legislation is primarily an exercise of the police power. The "primary consideration" is welfare of the general public, in respect of suppression or diminution of crime, vice and disorder, which have always been associated with the liquor traffic, including the welfare of portions of the general public who would be specially injured by these evils, e.g., inhabitants of residential neighborhoods.

Any question of law or fact which is made the basis of a legal right, when a court is given jurisdiction to hear and determine by a final judgment the existence of the legal right, is a judicial question. This is true, regardless of whether the particular question might or might not, by different legislation, be withdrawn from judicial determination and submitted, as a "quasi-judicial" question, to an executive (i.e., "administrative") board for decision, subject to the inherent power of judicial review or to broader statutory review of "appeal." The same question may, alternately or consecutively, be a quasi-judicial question before an administrative body and a judicial question before a court, e.g., workmen's compensation and, in many instances, zoning. Federal tax liability may be determined, at the option of the taxpayer, by an administrative board (the "Tax Court," formerly "Board of Tax Appeals") or by the judicial courts on suit for refund. At one time the same question could be determined by the administrative board and by the courts in a subsequent suit. Old Colony Trust Co. v.Commissioner of Int. Rev., 279 U.S. 716, 49 S. Ct. 499, 73 L. Ed. 918. A question is not a non-judicial question merely because it may be a difficult question, e.g., whether a series of business transactions constitute a "due" or "undue" restraint of commerce. Such a question may take years to try, but must be decided by a court alone and in a criminal case by a judge and jury. Nash v. UnitedStates, 229 U.S. 373, 33 S. Ct. 780, 57 L. Ed. 1232 (opinion by Holmes, J.).

The separation of powers prohibits delegation or transfer of powers which are inherently and exclusively judicial or non-judicial. The legislature cannot deprive the courts of their inherent power to review administrative action or decisions to the extent of determining whether such decisions are contrary to constitution or statute, e.g., whether they are unsupported by substantial evidence or are arbitrary or capricious. On the other hand, the legislature cannot impose on the courts powers or duties which are essentially non-judicial, e.g., "auditing" accounts, without power to enter judgment and require payment.Case of Hayburn, 2 Dal. 409, 1 L. Ed. 436; Robey v. CountyCom'rs of Prince George's County, 92 Md. 150, 48 A. 48. Cf.Gordon v. United States, 1864, 2 Wall. 561, 17 L. Ed. 921; Id.,117 U.S. 697, and De Groot v. United States, 1866, 5 Wall. 419, 18 L. Ed. 700. The remark in the Robey case that a power cannot be judicial in one county and non-judicial in another is applicable only to powers which are thus inherently and exclusively judicial or non-judicial. The majority opinion in the instant case cites Beasley v. Ridout, 94 Md. 641, 52 A. 61, as supporting the conclusion that the question of fitness for a liquor license is "a question of public policy or expediency" and "not a judicial question." In that case a statute empowering the judges to appoint "visitors" to control and supervise a jail was held unconstitutional. The appointment of executive officers and employees, such as jailers, is a non-judicial function of thepolitical departments of the government. Manifestly it was not the intent of the legislature to make the liquor traffic a political football (whether of party politics, factional politics or liquor politics) by subjecting the issuance of licenses to political control, like appointment of jailers.

Though a liquor license is not a property right but a right or privilege which may be repealed and withdrawn by the legislature at any time, nevertheless such a license, or the right to obtain such a license, until so repealed, is a legal right, to be granted, denied or revoked according to law and not a favor to be granted or withheld at the whim of any executive or "administrative" board or officer. Federico v. Bratten, supra. In Allegany County this legal right must be established in a judicial proceeding. All questions of law and fact, including the questions of fitness, to be determined in such a proceeding, are therefore judicial questions.

Questions of "fitness" are not novel subjects for the exercise of judicial power. For generations courts and juries decided questions of fitness of fellow-servants employed by a master. Fitness of licensees is principally disposition and capacity (which are not universal) to obey, and induce obedience to, liquor laws and other criminal laws. For centuries the common law as to nuisances, enforced at law, in equity and by criminal prosecutions, included questions as to "proper places" for particular businesses. Poe on Pleading, sec. 203. Both before and since the initiation of zoning legislation, courts in a number of states have passed upon the question whether an undertaking establishment in a residential neighborhood is a nuisance. Jack Lewis, Inc. v. Mayor and City Council ofBaltimore, 164 Md. 146, 155-159, 164 A. 220; see also notes and cases cited, 23 A.L.R. 745; 43 A.L.R. 1171; 87 A.L.R. 1061. Under the Allegany County Act, as in nuisance cases, what is a "proper place" is not a political question, to be determined by political pressure or according to the political views of inhabitants, but a judicial question, dependent upon the relative convenience and inconveniences to inhabitants. Inhabitants of rural or suburban neighborhoods may drink themselves, but their personal enjoyment and property values may be seriously impaired by proximity of a saloon. On the other hand, residents of not exclusively residential neighborhoods — of whom there are thousands in Baltimore and many in Cumberland and other cities and towns — may not drink themselves but may not be seriously inconvenienced by the addition of a saloon to the other disturbances of urban life. The question of fitness or necessity of numbers has been decided by this Court with respect to licensing filling stations in the absence of zoning laws and also under zoning laws. Pocomoke Cityv. Standard Oil Co., 162 Md. 368, 159 A. 902; Kramer v. Mayorand City Council of Baltimore, 166 Md. 324, 171 A. 70; Mayorand City Council of Baltimore v. Biermann, 187 Md. 514,50 A.2d 804. The fact that a constitutional question as to the extent of the police power is involved could not make a non-judicial question a judicial question. Exclusively political questions are non-judicial questions even when they are constitutional questions. Luther v. Borden, 7 How. 1, 12 L. Ed. 581; Com. ofMassachusetts v. Mellon, 262 U.S. 447, 43 S. Ct. 597, 67 L. Ed. 1078. The Allegany County Act does not require the court "to select between people equally fit, which one is to have the privilege," if two such identical twins could be found. As in other cases, the court decides cases as they come before it. Whenever a sufficient number (or the statutory maximum number) of licenses have been authorized, further applications must be disapproved for this reason.

If the majority opinion means anything more than that judges regard hearing liquor license applications as an unfit duty for judges, it invalidates not only the Allegany County Act but also the "general" Act, both with respect to "appeals" to the courts and also with respect to the uncharted delegation of powers to the original licensing boards. When legislation is expressed in general terms, e.g., the Sherman Act, 15 U.S.C.A., Secs. 1-7, 15 note, it is the duty of the courts to apply the general terms to particular facts by construing the statute. The Constitution does not require the Legislature to furnish the court "definite guides" to the construction of a statute. But the Constitution does require that delegation of "quasi-judicial" powers to administrative boards be limited by "definite guides" and not left to the whim of executive officers. Sugar v. North Baltimore M.P. Church,164 Md. 487, 165 A. 703; Jack Lewis, Inc. v. Mayor and CityCouncil of Baltimore, 164 Md. 146, 164 A. 220; Goldman v.Crowther, 147 Md. 282, 128 A. 50, 38 A.L.R. 1455. The "general" Act delegates to the licensing boards not only the usual questions of fitness of time, place and number but discretionary powers expressed in much broader language, supra. The "appeals" to the courts are broader than the inherent power of judicial review of administrative action, supra. If the questions of fitness are beyond judicial ken in the first instance, these and broader questions are also beyond the power of legislative delegation to administrative bodies and beyond the ken of the courts on "appeal."

The Pennsylvania courts have long held, without question as to constitutionality, that the courts exercise a judicial function — and a judicial, not an arbitrary discretion — in determining fitness in either a contested or an uncontested case, before issuance of a liquor license. Schlaudecker v. Marshall, 72 Pa. 200;Petition of Raudenbusch, 120 Pa. 328, 14 A. 148. In Statev. Gorman, 171 Ind. 58, 85 N.E. 763, there was no remonstrance before a board of commissioners, but the board refused a license; the applicant appealed to a court, under a statutory provision for trial de novo involving the question whether the applicant was a "fit person." The Supreme Court of Indiana held that the board, either with or without a remonstrance, acts judicially, and upheld the right of the lower court to hear the appeal. InState ex rel. Patterson v. Bates, 96 Minn. 110, 115-119, 104 N.W. 709, 113 Am. St. Rep. 612, the validity of a statute which placed duties upon the judicary in the issuance of liquor licenses, was sustained against a contention that the statute was contrary to a constitutional declaration of the separation of powers. In Connecticut "the question of the suitability of person and place is so far judicial in its nature that it may constitutionally be made the subject of an appeal to the Superior Court" (Appeal of Malmo,72 Conn. 1, 6-7, 43 A. 485); the issuance of liquor licenses "lies on the border line of the division between executive and judicial power, and * * * it is competent for the legislature to commit its exercise either to judicial or executive officers, as may be found necessary for the most efficient enforcement of its police regulations." (Appeal of Hopson, 65 Conn. 140, 146, 31 A. 531, 532; DeMond v. Liquor Commission, 129 Conn. 642, 644,30 A.2d 547); from 1644 to 1854 (when prohibition was adopted) selection of licensees was usually made by legislative or executive authorities, but determination of fitness was a judicial question. Appeal of Malmo, supra.

Appellant's contention that the declaration of separation of powers in the Maryland Declaration of Rights is more rigid and restrictive than the actual separation of powers in the constitutions of other states and of the United States, is groundless. In McCrea v. Roberts, supra, this court quotedCrane v. Meginnis, 1 G. J. 463, 476, 19 Am. Dec. 237, recognizing that nowhere are the separate departments kept wholly separate and unmixed. If the separation were rigid, in Maryland or elsewhere, it would have prevented the enormous growth of "administrative law" in the last forty years by delegation of "quasi-legislative" and "quasi-judicial" powers to executive or "administrative" agencies. With respect to imposition ofnon-judicial duties on courts or judges, the Constitution of the United States has been more strictly construed than the Maryland Declaration of Rights. In Keller v. Potomac ElectricCo., 1923, 261 U.S. 428, 43 S. Ct. 445, 67 L. Ed. 731, the Supreme Court sua sponte held that a valuation of the property of a utility by a commission, for the purpose of future rate regulation, was a legislative, not a judicial power, and power to review such a valuation (apart from any actual fixing of rates) could not be imposed upon the Supreme Court. In Miles v.Public Service Commission, 1926, 151 Md. 337, 135 A. 579, 49 A.L.R. 1470, this court made no such point, and in Potomac Edison Co. v. Public ServiceCommission, 1933, 165 Md. 462, 169 A. 480, in an opinion by Judge Parke, it expressly held such a valuation appealable. InBaltimore City v. Bonaparte, 93 Md. 156, 48 A. 735, cited in the majority opinion, the decision of this court was narrower than its opinion. On appeal by a taxpayer, from a tax assessment, to the Baltimore City Court, the court on a hearing de novo reduced the assessment. On appeal by the City to this court, this court held that valuation for taxation was not a judicial function, but instead of setting aside the valuation of the lower court, affirmed it. In effect, valuation for taxation was a judicial function in the lower court but not in this court.

Appellant's contention that judicial power is not applicable to uncontested proceedings is also groundless. In many matters the jurisdiction of the federal courts is limited to "controversies" — because the Constitution of the United States expressly says so, not because the nature of "judicial power" is so limited. Judicial power is equally applicable to contested or uncontested cases. Otherwise it would not be applicable to cases of voluntary bankruptcy, uncontested divorce cases, judgments by default or pleas of guilty or nolo contendere. The difference in this respect between the Carroll County Act sustained in McCrea v.Roberts, supra, and the Allegany County Act of 1933 is substantially the same as the difference between a judgment by default entered by the clerk, and a judgment under a Speedy Judgment Act, extended by the judge, or a divorce, which may likewise be granted only by the judge after judicial determination of the right, whether contested or not. The Act of 1933, in effect, merely withdrew from the clerk authority to enter a judgment by default for an applicant for a liquor license.

The majority opinion also holds the courts impotent to decide what is a "bona fide entertainment." For many years courts have been deciding, in criminal cases, whether holders of hotel or club licenses are bona fide hotels or clubs. The question what is a bona fide entertainment is no more insuperable. Furthermore, if the separability clause (section 3) of the Act means anything at all, invalidity of the provisions for "special licenses" for "entertainments" would not invalidate the provisions for regular saloon licenses.

One of the extraordinary features of the disposition of the instant case is that the judicial power is held impotent to decide the question of legal right to a liquor license, but is held able to decide its own impotence by a declaratory judgment at the suit of a plaintiff who has no legal right or interest whatever, actual or potential, present or future, in the subject matter. By the majority opinion the Act of 1894, under which appellant asks a license, has been repealed and has always been unconstitutional for the same reason for which the Act of 1933 is held unconstitutional.

I think the Act is constitutional and the order should be affirmed.

Judge DELAPLAINE authorizes me to say that he concurs in this opinion.