Van DeVegt v. Board of County Commissioners ( 1936 )

THIS case is one in which the petitioner Van DeVegt sought to procure from the county court of Larimer county a writ of mandamus to compel the board of county commissioners of the county to issue a liquor license permitting him to sell liquor in his drugstore situated 700 feet south of the southern city limits of Fort Collins on the Fort Collins-Loveland highway. To reverse the judgment of the county court denying the writ he brings the cause here on error. All italics used in this opinion are ours unless otherwise indicated.

The sections of the liquor code of 1935, being chapter 142, of the Session Laws of 1935, pertinent to our consideration of the matters here involved are as follows:

"Section 1. This Act shall be deemed an exercise of the police powers of the State for the protection of the economic and social welfare, the health and peace and morals of the people of this State, but no provisions of this law shall ever be construed so as to authorize the establishment or maintenance of any saloon.

"Section 2. On and after the effective date of this Act, it shall be lawful to manufacture and sell for beverage or medicinal purposes malt, vinous or spirituous liquors, subject to the terms, conditions, limitations andrestrictions contained in this Act.

"Section 3. It shall be unlawful for any person:

(a) To manufacture, sell or possess for sale any malt, vinous or spirituous liquors, excepting in compliancewith this Act."

"Section 8 (b) Upon written demand by an applicant who has been refused a state license said Licensing Authority shall state in writing its reasons for such refusal. The refusal of said Licensing Authority to grant a State license according to the provisions of this Act may be reviewed upon application for writ of certiorari or otherwise, by any court of general jurisdiction having jurisdiction of the place for which the application for license was made, and if such court shall determine that such action was capricious or arbitrary it shall order said State Licensing Authority to issue such license. * * *

"Section 9. The licenses provided by this Act, except where the license fee is to be paid into the treasury of any city, town, city and county or county, shall be issued and granted by the State Licensing Authority, for which the fee is to be paid to the State Treasurer, within fifteen days after the filing of the application therefor. Where the license fee is to be paid into the treasury of any city, town or city and county, the licenses in this Act provided for shall be issued by the council in a city and county and by the council, board of trustees or licensing authority in any other city or town, where the license fee is to be paid into the treasury of a county, the licenses provided for in this Act shall be issued by the Board of County Commissioners of such county. The council of a city and county and boards of trustees, councils or licensing authorities in any other city or town and the Board of County Commissioners in any county shall have authority to refuse to issue any licenses provided for in this Act for good cause, subject to review by the courts as hereinbefore provided.

"Before granting any license all licensing authorities shall consider the reasonable requirements of the neighborhood, the desires of the inhabitants, as evidenced by petitions, remonstrances or otherwise and all other reasonable restrictions which are or may be placed upon the new district or districts by the council of the city, town, city and county or county or by the Board of County Commissioners of any county."

"Section 18-A. Liquor Licensed Drug Store License. Liquor licensed drug stores as defined in this Act shall be licensed only to sell malt, vinous and spirituous liquors in seal [sealed] containers not to be consumed at the place where sold.

"Every person selling malt, vinous and spirituous liquors in a liquor licensed drug store shall pay to the State Treasurer a license fee of Fifty Dollars ($50.00) annually in advance for each place where such liquor shall be sold.

"In addition to paying the State license fee herein provided to be paid, every liquor licensed drug store shall pay the following fee to the Treasurer of the city, town, city and county, or county where said liquor licensed drug store is located.

"(a) If said liquor licensed drug store is within any city, town or city and county, an annual license fee of One Hundred Fifty Dollars ($150.00) in advance.

"(b) If said liquor licensed drug store is outside the corporate limits of any town, city or city and county, an annual license fee of Two Hundred Fifty Dollars ($250.00) in advance."

Section 27 of the act provides for local option and that the operation of the act shall be state-wide unless any city, city and county or incorporated town shall, by a majority of the qualified electors at a general election, or special election called for that purpose, decide against the right to sell liquor or shall limit its sale in such political subdivision as by the act provided.

[1-3] Such discretion, if any, as is vested in the commissioners with reference to issuing licenses is found in section 9, supra. The respondent board claims there is a discretion to issue, or refuse to issue, vested in it by said section 9. Petitioner says: "The license issued by a town or city is a mere incident to the payment of the required fee. Such a license is more in the nature of a receipt for the money." We cannot agree with the latter contention. The section provides that "The Board of County Commissioners in any county shall have authority to refuse to issue any licenses provided for in this Act for good cause, subject to review by the courts as hereinbefore provided." The right to refuse for good cause, of necessity vests in it in the first instance the right to determine what is good cause for refusal. The board's disposition of the matter then is subject to review by the courts as provided in section 8b, supra, to ascertain whether its "action was capricious or arbitrary." If the court finds such to be the case, then and then only shall it override the action of the board and order the issuance of the license. This provision of the act is in harmony with the well-recognized rule that resort may be had to mandamus to compel the exercise of authority or discretion vested in an administrative body or board, but courts cannot control or direct how such authority or discretion shall be exercised unless it clearly appears that its action has been capricious or arbitrary. "Mandamus will not lie to compel the granting of a license where it is not alleged and shown that the exercise of such discretion was arbitrary."Downes v. McClellan, 72 Colo. 204, 205, 210 Pac. 397.

[4] Capricious or arbitrary exercise of discretion by an administrative board can arise in only three ways, namely: (a) By neglecting or refusing to use reasonable diligence and care to procure such evidence as it is by law authorized to consider in exercising the discretion vested in it. (b) By failing to give candid and honest consideration of the evidence before it on which it is authorized to act in exercising its discretion. (c) By exercising its discretion in such manner after a consideration of evidence before it as clearly to indicate that its action is based on conclusions from the evidence such that reasonable men fairly and honestly considering the evidence must reach contrary conclusions. "The intendment of a law which grants discretionary power to licensing officers, whether expressly or by necessary implication, is that the discretionary decision shall be the outcome of examination and consideration; in other words, that it shall constitute a discharge of official duty, and not a mere expression of personal will." 19 R.C.L. 968, § 265.

[5] In determining whether the action here in question was capricious or arbitrary in any one of the foregoing respects it is necessary to consider the manner in which the controversy arose, the evidence before the board, and its action based thereon. There is no contention that the board refused to receive evidence pertinent to the matter under consideration. The evidence on which it acted is before us in the form of admissions in the pleadings and stipulations between the parties. It is definite and certain. There is no assertion that it was not given fair and honest consideration. The contention is, that upon the evidence before it, and after due consideration, the board reached conclusions therefrom upon which it refused petitioner a license, when reasonable men from a fair and honest consideration of the evidence must have arrived at a contrary conclusion and granted a license accordingly.

The evidence before the board was substantially as follows: That plaintiff, on May 11, 1935, applied for a license to operate a liquor drugstore; that the locus of the proposed liquor dispensary is 700 feet south of the southern boundary of Fort Collins on the main highway to Loveland; that the city of Fort Collins and territory contiguous within a five mile radius has a population of more than 15,000 people; that the qualified electors of Fort Collins number 6,425; that there is no store or other establishment of any description, either retail liquor store or liquor licensed drugstore selling liquor at a point nearer than twelve miles from the southern boundaries of said city of Fort Collins, to wit: at Loveland, Colorado; that many of said qualified electors who did not desire to have liquor sold within the corporate limits of said city of Fort Collins, do desire to have it sold just outside of said corporate limits and favor the issuance of a license; that said board of county commissioners, since June 25th, 1935, has received petitions signed by several hundred residents of Fort Collins and the immediate vicinity, many of whom are college and high school authorities, asking said board to refuse to grant petitioner said county license; and that said board since June 25th, 1935, has received petitions signed by several hundred residents of the city of Fort Collins and immediate vicinity, many of whom are Fort Collins business and professional men, asking said board to grant a license. With respect to the last mentioned petitions asking for the granting of a license, they contain the names of practically all of the residents outside of the city of Fort Collins and within the immediate neighborhood of the site of the drugstore. It was agreed in open court that the petition to said board of county commissioners, asking that said license be not issued was signed by 422 persons and that the petitions asking that the license be granted were signed by 750 persons. It also was agreed that the petition against the issuance of the license was filed before the formal refusal, and that the petition asking that it be granted was filed after the case was at issue and ready for hearing. The record shows that a second petition against granting the license with 500 names of residents of the neighboring towns of Bellvue and Laporte was filed with the court at the time of trial, but never submitted to the board before its refusal.

The board in its answer to the alternative writ alleged the holding of a local option election by the city of Fort Collins June 25, 1935, and subsequent to the refusal of the board to grant the license, at which out of 6,425 qualified electors, 1,818 voted against, and 574 voted for, the sale of malt, vinous and spirituous liquor, or any of them, within the city of Fort Collins. This allegation petitioner admitted. The court, on its own motion, struck the allegations concerning such election, over the objection of both petitioner and respondent, the petitioner objecting because more was not stricken and the respondent objecting to striking anything. In their briefs counsel for both parties renew their objections. Respondent asks this court to consider the matters of the local option election and petitions against granting the license, the first petition submitted to the board having 422 signers, and the one offered at the time of trial with 500 signers. Petitioner also urges the consideration of his petition with 750 signers for granting the license filed by him after the case was at issue and at the time of trial. The court refused to consider the petitions filed at the time of trial.

Petitioner alleges that "on and prior to said 11th day of May, 1935, and since said date, he has applied to the Board of County Commissioners * * * for the issuance of a license." This allegation is admitted by respondent. It appears reasonable to us that when the alternative writ was issued commanding the board to issue the license the matter still was in the board's hands. It might, under the alternative writ, adopt one of two courses, issue the license or answer to the court why it had not done so. Until the respondent board filed its answer July 2nd, it still had the right, in the exercise of its discretion, to issue the license or refuse and show cause. So long as the question of the issuance of the license was before it for determination the board had a right to consider, and in fact it was its duty to consider, all the evidence before it bearing on the question presented for decision. By way of illustration, let us suppose that after the filing of an application for a license — which was refused — but before an answer was filed by the board to an alternative writ of mandamus, the applicant should be convicted of a felony. Could not the board set up such conviction in support of its continued refusal under section 11 (c) which provides that no license shall issue to any person who has been convicted of a felony, even though its first refusal had been arbitrary? The answer necessarily must be in the affirmative. Before it finally acted by filing its answer attempting to show cause why it refused to grant the license, the board had been advised of the result of the local option election, but did not have before it the petitions filed at the time of trial. All the evidence presented prior to the time it answered, the board was bound to consider and doubtless did consider, before again refusing a license and setting forth its reasons for refusal. The board having the right to consider the evidence, but only such as was before it, it clearly was the duty of the court to take it into consideration in determining whether or not the board acted arbitrarily.

[6] Since the matter of the result of the election — stricken by the court — does not rest on the testimony of witnesses upon whose credibility the trial court should first pass, but upon formal stipulations and pleadings, we are as able to judge the effect of the evidence as was the trial court and we shall consider such matters as they appear in the pleadings and the stipulations in arriving at our conclusions.

[7] The petitions signed by 750 voters, which were filed with the court by petitioner after the issues weremade up, were not presented to or passed on by the board at the time it answered and finally refused the license, and not having been before the board the trial court properly refused to consider them, and they will not be considered here. Had petitioner so desired these petitions could have been secured and presented to the board before bringing the action in mandamus, or before the board had acted finally by answering. Petitioner has no ground upon which to complain that the board acted arbitrarily or capriciously in not granting him a license, when such ground is based on evidence that he never presented to it, and which it never had an opportunity to consider; neither should the petition filed by respondent at the trial be considered for similar reasons.

[8] In our opinion it was the intention of the legislature by passing section 9 of the act to vest a wide discretion in county commissioners with respect to issuing licenses for liquor stores. Petitioner contended in oral argument that the board, in its discretion — if any is vested in it — can go no further than to consider the fitness of the applicant, and the propriety of locating a dispensary at the place proposed. The contention is unsound. The act permits the board to consider "the desires of the inhabitants as evidenced by petitions, remonstrances or otherwise." That these desires may be influenced by the character of the person applying for license, the proposed location, or the character of the business itself cannot be denied. Regardless of their reasons, the desires of the inhabitants are to be considered under this statutory provision. There are many unincorporated towns in the state. If all of the citizens of such a town, save the applicant, were opposed to the granting of a license for the sale of liquor in the town solely on the ground that they were conscientiously opposed to such traffic it could not seriously be contended that their desires so expressed were not a proper subject for consideration by the board, and if proper for consideration when such desires, influenced by dry sentiment were unanimous, the desires of any part of the citizens, however influenced, evidenced by petitions, remonstrances, or otherwise, likewise are proper for the consideration of the board, to be given such weight as shall be reasonable and as it shall determine.

It will be observed that the statute refers to the "desires of the inhabitants." We are relieved of the necessity in this case of determining or deciding to what geographical section of the state "the inhabitants" shall be limited. Likewise we are not called upon to determine what are the limits of a "neighborhood" within the contemplation of the statute. Both parties submitted petitions signed by residents and citizens of the city of Fort Collins, the one against issuance of a license being signed by 422 residents and presented to the board; the other in favor of the issuance of the license being signed by several hundred of the residents and citizens of Fort Collins and immediate vicinity. Both parties insist that these petitions, filed with the court on the trial by the respective parties, should have been considered by the trial court and should be considered here. In the light of such a record neither party can reasonably object to this court's determination of the case on evidence as to the desires of the inhabitants within the same geographical limits, and which both parties contend was and is competent.

[9] Upon a careful review of the evidence we cannot say that the board exercised its discretion capriciously or arbitrarily, judged by any of the three standards to which we have heretofore called attention. The board did not refuse to receive any evidence offered. It considered the evidence, as is shown by its statements of the reasons for its refusal to grant the license, set forth in its answer to the writ. The evidence shows the location of the proposed dispensary to be in close proximity to, and easily accessible from, the Colorado State College in which 1,200 students are enrolled from all parts of the state. The board alleges in its answer, and it must be held that it concluded, that intoxicating liquors easily accessible in the vicinity of said college would be detrimental to the morals and good conduct of the students, to the administration and conduct of said college, and to the peace and good order of said city and the neighborhood thereof. Petitioner denies these allegations, but we cannot say that the commissioners, in view of the protests admitted to have been made by many of the officials of the college and of the public schools, arrived at an unreasonable conclusion under the evidence, or at least that reasonable men might not draw different conclusions upon a fair consideration of such evidence. If we concede, as we do, the contention of counsel for petitioner that the court and the board might consider the petitions signed by citizens of Fort Collins and vicinity, presented by both parties, if filed in time, we logically must hold also that the desires of the citizens "otherwise" expressed by their votes in the local option election is likewise admissible evidence to be considered in ascertaining the "desires of the inhabitants," and given such weight as the board deemed proper. We do not hold that the commissioners are bound by the results of such an election; but we do hold it was a circumstance to be considered and weighed with all the other circumstances and evidence in the case.

[10] Since the law requires that all licenses for which provision is made must be procured before one can lawfully engage in the business, and since a local administrative board is peculiarly fitted to determine whether, under all the surrounding circumstances and in any given community, the granting or refusal of a license will most nearly effectuate the purpose of the act, which is for the "protection of the economic and social welfare, the health and peace and morals," of any given locality in the state, we are not authorized to hold their action arbitrary and capricious where such action is based on evidence from which reasonable men might honestly draw different conclusions. We have held that even a reasonable doubt must be resolved in favor of the action of the board vested with discretion. In StateBoard v. Denver, 61 Colo. 266, 156 Pac. 1100, we quoted the following with approval:

"`That rule is, that in all matters requiring the exercise of official judgment, or resting in the sound discretion of the person to whom a duty is confided by law, mandamus will not lie, either to control the exercise of that discretion, or to determine upon the decision which shall be finally given. And whenever public officers are vested with powers of discretionary nature as to the performance of any official duty, or in reaching a given result of official action, they are required to exercise any degree of judgment, while it is proper by mandamus to set them in motion and to require their action upon all matters officially entrusted to their judgment and discretion, the courts will in no manner interfere with the exercise of their discretion, nor attempt by mandamus to control or dictate the judgment to be given. Indeed, so jealous are the courts of encroaching in any manner upon the discretionary powers of public officers, that if any reasonable doubt exists as to the question of discretion or want of discretion, they will hesitate to interfere, preferring rather to extend the benefit of the doubt in favor of the officer.' High's Extraordinary Legal Remedies (3d ed.) § 42, p. 50."

The argument is advanced by respondent that to license what it calls "fringe stores" would nullify the act of the people of the town in voting local option. That licensing such stores would have this effect, is not a matter that in and of itself is a bar to the issuance of such licenses, but is merely a circumstance to which the board is entitled to give such reasonable weight as it shall determine. The vote and its preponderance one way or the other is not a controlling factor, but is a circumstance indicative of the desires of the inhabitants of a city within the territory, and which both parties to the cause, by the filing of petitions signed by residents therein, have indicated they believe have a right to express their desires and have them considered.

[11] Counsel for petitioner contends that the liquor code is a mandate to permit the sale of liquor except in local option territory. We do not so construe it. It makes the sale of liquor lawful, "subject to the terms, conditions, limitations and restrictions contained in this Act." Among the conditions imposed are that all licenses required be first secured. § 3(h).

We are supported in the foregoing conclusions by the following citations and cases:

Pitcher v. Albi Mercantile Co., 60 Colo. 289, 152 Pac. 894: "Except as the ordinance of the City and County of Denver, No. 223, Series of 1913, may inhibit the issuance of a license to keep a saloon within a specified distance of designated places, the Excise Commissioner is invested with a sound judicial discretion, to be exercised in view of all the facts and circumstances of each particular case, as to granting or refusing a license to keep a saloon, and such discretion will not be interfered with unless it appears it has been abused."

Downes v. McClellan, 72 Colo. 204, 210 Pac. 397, was an action in mandamus under section 3992, R. S. 1908, in which the court said: "This statute is not one for revenue only. It is one related to the exercise of the police power and to regulate the businesses enumerated. The power to license in such cases includes the power to refuse a license, even where statutory or preliminary requirements are complied with. 25 Cyc. 603; People, exrel. v. Grant, 126 N. Y. 473, 27 N.E. 964. The power to refuse a license necessarily means having a discretion to grant or refuse, and mandamus will not lie to compel the granting of a license where it is not alleged and shown that the exercise of such discretion was arbitrary. 5 McQuillin Munic. Corp., section 2564; People, ex rel. v.Grant, supra. The complaint in the instant case does not state facts sufficient to warrant a peremptory writ of mandamus for the reason that it does not show that the defendants abused their discretion, but on the other hand, that they refused to grant the license on the ground that plaintiff's place of business is a `public nuisance.' It was therefore error to overrule the demurrer."

Our conclusions are not shaken by the three cases, infra, cited by petitioner.

Gagen v. City of Louisville, 145 Ky. 3, 139 S.W. 1061, holds only that an applicant for a saloon license who is refused a license by the licensing board, does not have a ground of recovery against the city for loss of profits while the case is pending on review of the board's action, though finally determined in his favor. State ex rel. v. Johnson (Mo.), 211 S.W. 682. This case arose on the refusal of the county court to grant a license for a pool hall on the ground that the city council had adopted a resolution opposing granting it and that remonstrances were filed. There was no evidence of any reason peculiar to the applicant or location. The court held the refusal arbitrary, but it does not appear that there was any statute authorizing the county court to consider the requirements or desires of the inhabitants as a ground for its refusal. In view of the provisions of our statute this case is clearly distinguishable from the one at bar.

State ex rel. v. Town of Clendenin, 92 W. Va. 618,115 S.E. 583, is a case in which a town council had refused a license to operate a pool hall. One of the grounds of refusal was that the location was not a proper place for a pool hall because it was on the main street of the town; that the inhabitants were largely church going country folk who were opposed to the operation of pool tables where their children would come within the influence thereof; and that by reason of such location it would be detrimental to the welfare and morals of the inhabitants. The court held this not to be a lawful reason for refusal and that refusal based on such ground was arbitrary. It does not appear that there was any statute authorizing the council to consider, as our statute does, either the requirements of the neighborhood or desires of the inhabitants. The court said: "The policy of our laws is to authorize the operation of such tables as a revenuemeasure." The avowed object of our act as set forth in section 1, is by the exercise of the police power to protect "the economic and social welfare, the health and peace and morals of the people of this State." We think it clear that our statute opens a far wider field for evidence, proper for consideration, than the court held to be admissible in the West Virginia case. That case for this reason, is clearly distinguishable from the one here under consideration.

[12] We think the cases cited by Mr. Justice Bouck in his dissenting opinion in support of his theory that the case is "moot" do not justify evasion of responsibility of decision. A case is not moot where interests of a public character are asserted under conditions that may be immediately repeated, merely because the time for a particular order has expired. Southern Pac. Terminal Co.v. Interstate Commerce Commission, 219 U.S. 498,31 Sup. Ct. 279, 55 L. Ed. 310. The problem here is of prime public concern and a continuing one. We are not warranted in relegating the parties to the condition which would result from withholding determination.

The judgment of the lower court is affirmed.

MR. JUSTICE HOLLAND dissents.

MR. JUSTICE BUTLER, and MR. JUSTICE BOUCK (who will later file a statement of his reasons), think that the case has become moot, and for that reason the writ of error should be dismissed.

The following opinion was filed March 19, 1936.