Dave's Place, Inc. v. Liquor Control Comm. ( 1936 )

Plaintiff prays that a peremptory writ of mandamus be granted directing and commanding defendant to issue two liquor licenses.

During 1935, and prior thereto, Bella Kranen of Bay City was licensed as a "specially designated merchant" to sell beer and wine at 1701 East Davison avenue. She also was given a license to conduct a "tavern" at 13410 Riopelle street. Both premises are under the same roof in a corner building, but the two businesses were conducted separately by the licensee's sister and brother-in-law, Bessie and David Hecht.

These parties with Max Feldman formed the plaintiff corporation in 1936, entered into a lease with Bella Kranen and applied for the same licenses. The police department of Detroit recommended that the applications be denied, giving as its reason:

"The applicant, Bella Kranen, who lives at 1411 Eleventh Street, Bay City, Michigan, had this license in place of her sister, who is not a citizen. It is operated by Mr. David and Bessie Hecht, who also own the building and neither are citizens. The licensee, Bella Kranen is a sister to Bessie Hecht."

Upon receipt of this report, respondent refused to accept applications for 1936 licenses from the corporation because of the disapproval of the Detroit police department.

The circuit court's findings of facts show:

"The defendant, liquor control commission, has refused and does still refuse to accept the application for or to issue licenses to the plaintiff corporation for the sole reason that two of plaintiff's four stockholders, holding 25 per cent. of the stock, are not citizens of the United States and because the executives of said liquor control commission believe such refusal to be in accord with 'the spirit of section 23' of the liquor control act (Act No. 8, Pub. Acts 1933 [Ex. Sess.], as amended). No violations of the law or of the rules and regulations of the commission have been brought to the attention of the commission, and the two licensed premises involved have, according to the police, been conducted in an orderly and peaceable manner.

"* * * The plaintiff corporation was organized in good faith and without fraud and for the purpose of carrying on the proposed business in accordance with law, and not as a subterfuge or screen for evading the laws of the State."

The answer to the order to show cause admits "that the discretion vested in the commission in regard to issuing licenses must be sound and exercised in a reasonable manner" but denies that it acted "arbitrarily or unreasonably in rejecting the said licenses."

Respondent argues that the constitutional provision "the legislature may by law establish a liquor control commission, who, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this State, including the retail sales thereof," Const. 1908, art. 16, § 11, "means that the liquor control commission when created, has absolute and arbitrary control over such traffic within this State, including the issuance of licenses to retail such alcoholic beverages."

The liquor control act, Act No. 8, § 23, Pub. Acts 1933 (Ex. Sess.), provides that:

"Vendors shall be, when a corporation, only a corporation authorized to do business under the laws of the State of Michigan; when a firm or partnership, only when the majority of said firm or partnership are American citizens who have resided in the State of Michigan for one year, and when an individual, an American citizen residing in the State of Michigan for at least one year."

In the absence of any other reason and in the light of the findings of the circuit judge, we are forced to conclude that the commission has attempted to amend the act by construction to read "a corporation, etc., all of whose stockholders shall be American citizens."

It is also argued that since "the discretion to be exercised by the board under this statute in acting upon the application here made means the power or right to act officially according to what appears to it to be just and proper under the circumstances, and action so taken by it is not subject to review by a court," Scott v. Township Board of ArcadiaTownship, 268 Mich. 170, 174, the commission need not assign any reasons for denying licenses and therefore the giving of reasons in the instant case was superfluous, is not binding and may be ignored.

The reasoning of Scott v. Township Board of Arcadia Township,supra, is not controlling when the commission clearly indicates that its action is arbitrary, capricious and in plain conflict with the express language of the statute. Under such circumstances, we are confronted with the general rule as admitted in respondent's answer.

The commission has planted itself squarely upon an erroneous construction of the quoted section of the liquor control act. The "complete control" granted by constitutional amendment is "subject to statutory limitations."

"It is a general principle of interpretation that the mention of one thing implies the exclusion of another thing;expressio unius est exclusio alterius." 25 Rawle C. L. p. 981.

See, Taylor v. Michigan Public Utilities Commission,217 Mich. 400.

The statute says:

"Vendors shall be, when a corporation, only a corporation authorized to do business under the laws of the State of Michigan."

The limitations of citizenship contained in the same section are applied only to individuals or partnerships and not to the stockholders of domestic corporations.

Under the facts presented the licenses should have been issued. The petition for the writ of mandamus is granted with costs.

FEAD and SHARPE, JJ., concurred with BUSHNELL, J.