McDonough v. Garrison

PETERS, P. J.

On October 23, 1942, Peter and Thomas McDonough filed in the superior court petitions for writs of mandate to compel the state Insurance Commissioner to issue to them licenses as bail permittees. These petitions prayed for a trial de novo before a jury of the issue as to whether petitioners possessed the statutory qualifications required of all such permittees. The petitions allege that in August, 1942, petitioners filed with the commissioner, in proper form, applications for bail permittee’s licenses; that on October 16, 1942, the petitions were denied by the commissioner without hearings; that petitioners are qualified for such licenses and are men of good character and reputation. Over the frequently expressed objections of the commissioner that the trial court had no jurisdiction to grant a trial de novo before a jury of the issue set forth in the petitions, the trial court submitted such issue to a jury. The commissioner declined to participate in the jury trial, with the result that no evidence was offered by him in opposition to that produced by the petitioners. The evidence being uncontradicted, the jury rendered special verdicts on all the issues submitted to it favorable to petitioners. Judgments were entered on the verdicts that petitioners are entitled to peremptory writs of mandate compelling the commissioner to issue to petitioners licenses as bail permittees. From these judgments the commissioner appeals.

In 1937 the Legislature of this state, in the exercise of its police power, determined that, for the reasonable protection of the public, bail bond brokers must be licensed by the Insurance Commissioner, and that no such license should be issued unless the commissioner finds that the applicant is of good moral character and a fit and proper person to engage in the bail bond business. (Stats. 1937, p. 1797, chap. 653; p. 1800, chap. 654; Ins. Code, §§ 1800-1821.) Since 1937 Peter and Thomas McDonough have attempted, unsuccessfully, to convince the various Insurance Commissioners that they possess the requisite qualifications. On two occasions, after lengthy hearings, and after giving the applicants full opportunity to present all available relevant evidence on the issue, the commissioner has determined that the two petitioners are not fit and proper persons to engage in the bail bond business. The petitioners have challenged the validity of the statute and the determinations of the commissioner, in various ways, but every appellate court to which the problem has been presented has held that the statute was valid, and that the commissioner acted properly, and well within his powers, in denying the applications. (See McDonough v. Goodcell, 13 Cal.2d 741 [91 P.2d 1035,123 A.L.R. 1205]; In re McDonough, 27 Cal.App.2d 155 [80 P.2d 485] ; Newport v. Caminetti, 56 Cal.App.2d 557 [132 P.2d 897].)

The second of the applications referred to above was denied by the commissioner, after a full hearing, in May, 1941. The McDonoughs did not seek to have these denials reviewed by the courts in the manner provided in the statute, but in August, 1942, filed new applications with the commissioner. These applications are substantially identical with the two prior ones that had been denied after full hearings. The commissioner, acting pursuant to the express provisions of sections 1733 and 1821 of the Insurance Code, denied the applications without a hearing. Section 1733 provides that: “The commissioner may, with or without hearing, suspend, revoke, or decline to grant or renew the license of an insurance agent, broker or solicitor, when any of the following facts exist in respect to the applicant or licensee: . . .

“(e) Suspension, revocation or refusal to grant or renew a license previously issued or applied for under this code when such action by the commissioner occurred within five years before the application and was based on reasonable notice to and hearing of the applicant or licensee. ’ ’

Section 1821 of the Insurance Code, so far as pertinent here, provides: “The provisions of sections 1730 to 1736, inclusive, are applicable to persons licensed under this chapter [bail licensees] and the words ‘insurance agent’ used in those sections include persons licensed under this chapter. ’ ’

The commissioner denied the applications without a hearing on October 16, 1942. The order of denial sets forth in detail the facts and circumstances relating to the two prior applications which were denied after full hearings, and then states that the refusal to grant the applications is based on two grounds: First, that the “records of the acts of the Insurance Commissioner and of the Courts of this State” show that on two previous occasions, after full hearings, petitioners were denied licenses for reasons which indicated a lack of integrity, in that the applicants were not of good moral character and not fit and proper persons to carry on the bail bond business; and secondly, the commissioner finds that petitioners are not fit and proper persons to hold licenses to carry on the bail bond business. On October 23, 1942, the petitions for writs of mandate were filed in the trial court. As already indicated, these petitions asked for a trial de novo and requested a jury trial of all issues of fact.

The demand for a trial de novo was based on petitioners’ interpretation of Laisne v. California St. Bd. of Optometry, 19 Cal.2d 831 [123 P.2d 457], which, at the time these proceedings were instituted was the latest decision dealing with the nature of mandamus proceedings brought to review adverse rulings of state-wide administrative boards and officers. The request for a jury trial was based on section 1090 of the Code of Civil Procedure, which confers discretionary power on trial courts in mandamus proceedings to try controverted fact questions before a jury.

In response to the alternative writs the commissioner appeared, demurred to the petitions and filed answers thereto, urging that the superior court was without jurisdiction to grant trials de novo, with or without a jury. The answers placed in issue the main allegations of the petitions and, as an affirmative defense, facts were pleaded to Show that sections 1733 and 1821 of the Insurance Code, above quoted, were applicable. The answers set forth that in 1938 similar applications were denied by the commissioner after a full hearing; that the propriety of this denial was tested and the commissioner’s findings approved in McDonough v. Goodcell, 13 Cal.2d 741 [91 P.2d 1035, 123 A.L.R 1205] ; that the second similar application was denied by the commissioner May 7, 1941, after a full hearing; that no attempt was made by petitioners to have the correctness of these last mentioned determinations passed upon within the three-month period expressly provided for in section 1734 of the Insurance Code.

The trial court overruled the demurrers, and granted petitioners’ request for a jury trial of all issues of fact. To comply with section 1090 of the Code of Civil Procedure which requires the factual issues submitted to the jury to be “distinctly stated in the order for trial,” the order stated that the issues to be tried by the jury were “ (a) Whether or not the petitioner has had many years of experience in the bail bond business as a broker and is well qualified both financially and from the standpoint that he has been previously engaged in and conducted such business and has a broad experience in the bail bond business; (b) Whether or not the petitioner is a man of good business reputation and of good general reputation and is financially responsible to a substantial degree.”

Thereafter the commissioner moved for judgment on the pleadings on the same grounds he had urged in his demurrers and answers. These motions were denied April 2,1943. Thereupon the commissioner instituted a proceeding in prohibition in this court to restrain the trial court from further proceeding, alleging that the superior court was without jurisdiction to proceed, and requesting that the proceeding be dismissed. The briefs filed by both sides discussed the jurisdictional question on its merits, and neither side discussed any other point. This court, by a vote of two-to-one, denied the petition for a writ of prohibition, without opinion, on April 15, 1943.

Before this order of denial had become final, the consolidated causes were assigned to another department of the superior court, and came on for trial on April 21, 1943. Before the jury was impanelled the commissioner was granted permission to introduce evidence by way of further return to the alternative writs and in support of his motion to terminate the proceedings. The evidence so introduced established the truth of the factual matters recited in the commissioner’s order of denial of October 16, 1942. After this evidence had been introduced the trial judge then presiding stated that, notwithstanding the previous rulings of the other trial judge who had ordered the jury trial, and regardless of the denial of the petition for a writ of prohibition by this court, he was nevertheless doubtful of his authority to proceed with a trial de novo, especially in view of the evidence that had just been introduced. He then suggested that the attorney general file with the Supreme Court an original petition for prohibition so that the Supreme Court could have before it not only the same record that was before this court, but also a full record of the proceedings and the evidence introduced before the trial court on the motion to terminate. The motion to terminate was denied, and the trial postponed to await the ruling of the Supreme Court. On May 19, 1943, a proceeding in prohibition based on this most complete record was filed in the Supreme Court, and about the same time a petition for hearing of the proceeding denied by this court was likewise filed in that court. As in the briefs before this’ court, the sole point briefed by the parties was the jurisdictional question. The Supreme Court on May 27, 1943, without opinion, -unanimously denied the original petition for prohibition, and on the same day, by a four-to-three vote, denied the petition for hearing of the petition filed in this court.

The causes again came before the lower court for a trial de novo before a jury in June of 1943, and again the commissioner urged his jurisdictional objections to a trial de novo with or without a jury. The trial judge expressed some doubts as to the propriety of a trial de novo before a jury, but stated that he accepted the negative ruling of the Supreme Court on the petition for a writ of prohibition to be a direction to him to proceed with the trial of the causes, de novo, with a jury. The commissioner thereupon declined to participate in the trial of the issues of fact. The jury was then impanelled, and the following questions, in the form of special verdicts, submitted to it. 1. Has the petitioner had many years of experience in the bail bond business as a broker ?„ 2. Is the petitioner well qualified financially to engage in and conduct a bail bond business? 3. Is the petitioner qualified from the standpoint that he has been previously engaged in and conducted a bail bond business? 4. Has the petitioner a broad experience in the bail bond business ? 5. Is the petitioner a man of good business reputation? 6. Is the petitioner a man of good general reputation? 7. Is" the petitioner financially responsible to a substantial degree? The evidence being uncontradicted, the jury found in favor of petitioners on all the questions submitted, and, in due course, judgments were entered directing the commissioner to issue the licenses.

At the threshold of this appeal we are met by the contention that, inasmuch as the precise jurisdictional points now urged for a reversal of the judgment were urged on the unsuccessful petitions for prohibition, and inasmuch as the only points briefed on those proceedings were the jurisdictional questions, the denials of such petitions must have been on the merits, and therefore such denials without opinion are res judicata, and constitute binding determinations that the trial court had jurisdiction to proceed as it did.

Until recently there has existed some doubt as to the legal effect of the denial, without opinion, of an application for an original writ. There was some language in some of the earlier eases that supported the view that ex parte denials of petitions for original writs without opinion were deemed to be adjudications upon the merits and in subsequent proceedings conclusive upon the parties as to the legal questions presented by the applications for the writs. (Reilly v. Police Court, 194 Cal. 375 [228 P. 860]; Gubin v. Superior Court, 104 Cal.App. 331 [285 P. 1071].) There are also a series of cases which hold that denial of writs of review without opinion by the Supreme Court of petitions to review determinations of the Railroad Commission are final adjudications on the merits. (Napa Valley Elec. Co. v. Railroad Com., 251 U.S. 366 [40 S.Ct. 174, 64 L.Ed. 310]; People v. Hadley, 66 Cal.App. 370 [226 P. 836].) In Geibel v. State Bar, 14 Cal.2d 144 [93 P.2d 97], it was held that where the Supreme Court, without written opinion, denied a petition to set aside a judgment of suspension from the practice of the law, and later a similar application was filed, the denial of the first was res judicata.

Whatever confusion existed by reason of the language used in these cases was set at rest by the recent decision of Funeral Dir. Assn. v. Board of Funeral Dirs., 22 Cal.2d 104 [136 P.2d 785], in which some of the language used in some of the above cases was expressly disapproved and some of the eases differentiated. The court held that the denial without opinion of an application for a prerogative writ (except habeas corpus) is not res judicata of the legal issues presented by the application unless the sole possible ground of the denial was that the court acted on the merits, or unless it affirmatively appears that such denial was intended to be on the merits. In the Funeral Directors’ case a litigant petitioned the Supreme Court for a writ of mandate to compel a state-wide administrative board to act. The petition was denied without opinion. Subsequently, a substantially similar application was filed in the superior court. Counsel for petitioner argued to the superior court that the denial by the Supreme Court was not on the merits but was without prejudice to filing the application in a. lower court. The records of the case disclose that the trial court suggested that petitioner test his theory by requesting the Supreme Court to modify its order of denial, nunc pro tunc, by adding thereto “without prejudice.” Such an. application was made to the Supreme Court and denied without opinion. The trial court interpreted this as an indication that the first denial was on the merits, and held that such denial was res judicata in the proceeding pending before it. On appeal the Supreme Court held that its denial was not res judicata. Mr. Justice Schauer, speaking for the court, stated: “The sole question before us is whether or not a minute order of this court denying, ex parte and without written decision, a petition made directly to this court for a writ of mandate to compel respondent Board of Funeral Directors and Embaimers to enforce a ‘judgment and sentence’ pronounced by such board, renders res judicata a subsequent petition for the writ, made to the superior court and containing averments and exhibits substantially identical with those of the earlier petition to this court. The parties are the same. We state unequivocally that such minute order was not intended to, and did not, constitute a decision upon the merits of the petition, and therefore is not a bar to the subsequent proceeding.” (22 Cal.2d at p. 105.) The court then went on to discuss the apparent confusion in the cases. It distinguished the Railroad Commission and State Bar cases, disapproved the language used in some of the other cases, and concluded that a denial without opinion of an application for an original writ can only be res judicata in subsequent proceedings when the only possible ground to support such denial is that it was on the merits. Stated another way, if any other ground exists upon which the court could have acted, it will be presumed that such denial was not on the merits. In the particular case since the denial could have been based on the theory that the court denied jurisdiction because the application had not been first made to a lower court, the order of denial must be construed as having been based on that ground and cannot be construed as a denial on the merits.

Another case directly in point on this issue is State Bd. of Equalization v. Superior Court, 20 Cal.2d 467 [127 P.2d 4], In that case the superior court by mandate ordered the State Personnel Board to reinstate certain employees to their former positions with the State Board of Equalization. This judgment was affirmed. (Brown v. State Personnel Board, 43 Cal.App.2d 70 [110 P.2d 497].) The hoard failed to comply with the order, and an order to show cause why they should not be punished for contempt was issued. While the contempt proceeding was pending the members of the board petitioned the District Court of Appeal for a writ of prohibition to restrain the contempt proceeding. The petition was denied without opinion. Thereafter the petitioners were found to be in contempt. They thereupon sought to have that determination reviewed by writ of certiorari. The court’s right to hear the certiorari proceeding was challenged on the ground that the denial of the petition for prohibition was res judicata. The court held it was not, because in denying the petition for a writ of prohibition “the District Court of Appeal did not necessarily pass upon the issues here involved.” The court went on to hold that at the time the prohibition proceeding was instituted the orders of the trial court, although in excess of jurisdiction, were interlocutory, and therefore could have been corrected in the trial court. The District Court of Appeal may have assumed that the trial court would correct its error and not enter a final order in excess of jurisdiction. That possibility was sufficient to prevent the order of denial becoming res judicata on the merits.

What is to be gathered from these two cases ? It seems clear that these eases establish the following two rules, the second of which is but a corollary of the first:

1. If there is any other possible ground other than the merits upon which the denial of the petition for a writ could have been based, such denial is not res judicata of the merits in a subsequent proceeding.

2. Even though a trial court may have entered interlocutory orders in excess of its jurisdiction, an appellate court may assume the error will be corrected before the entry of a final order, and may refuse to interfere by prohibition. This possibility prevents such a denial of the writ without opinion from operating as res judicata in future proceedings.

Both rules are applicable here. So far as the denial of the petition for prohibition filed directly in the Supreme Court is concerned, it may have been denied because it was not first filed in the District Court of Appeal. This brings this denial directly within the rule of the Funeral Directors’ case, supra. So far as the petition filed in this court is concerned, we have no record, official or unofficial, as to the reasons that motivated the majority of this court in denying the petition. We are not permitted to indulge in guess, surmise or conjecture as to what those reasons may have been, nor can we rely on the memory of any or all of the judges of this court to now give a reason for the order of denial. The doctrine of res judicata rests on no such frail foundation. The point is that it could have been denied, and this reasoning applies to the action of the Supreme Court in denying a hearing and in denying the direct petition filed in that court as well, for either of two reasons other than on the merits. The existence of these two possibilities prevents the doctrine of res judicata from arising. The various writs could have been denied because the courts involved felt that, although there was an apparent excess of jurisdiction, an appeal from the final judgment was a plain, speedy and adequate remedy. It is elementary law that even though a trial court is acting in excess of its jurisdiction, an appellate court may, in its discretion, refuse to interfere by prohibition if the same questions may be passed on by an appeal after judgment, and if, in the opinion of the appellate court such remedy is plain, speedy and adequate. This fundamental rule, supported by citation to many cases is stated as follows in 21 California Jurisprudence, page 586, section 6: “While a right to appeal presents no obstacle to the issuance of a writ of prohibition where, under the circumstances of a particular case, the remedy is not plain, speedy and adequate, there is no right to prohibition when an appeal affords a complete and adequate remedy and will accomplish the same ends. ... Nor is an appeal deemed inadequate because a question of jurisdiction is involved.

“While the delay incident to an appeal has been considered as bearing upon its adequacy, it has been laid down that an appeal does not fail to be adequate and speedy within the meaning of the rule, simply because it is not so expeditious as prohibition. . . .

“It has been observed that the question whether or not the remedy by appeal is adequate is, even in cases where jurisdiction is plainly lacking, a matter resting in the sound discretion of the court upon the particular circumstances of each case. ...”

(See Dunn v. Justice’s Court, 136 Cal.App. 269 [28 P.2d 690]; City of San Bruno v. Superior Court, 171 Cal. 272 [152 P. 731] ; Bullard v. Superior Court, 106 Cal.App. 513 [288 P. 629] ; Peck v. Municipal Court, 53 Cal.App.2d 267 [127 P.2d 668]; Duke v. Justice’s Court, 42 Cal.App.2d 178 [108 P.2d 707] ; Jordan v. Superior Court, 30 Cal.App.2d 436 [86 P.2d 847] ; Loftis v. Superior Court, 25 Cal.App.2d 346 [77 P.2d 491] ; Struck v. Superior Ct., 138 Cal.App. 672 [32 P.2d 1110]; C. S. Smith Met. M. Co. v. Superior Ct., 16 Cal.2d 226 [105 P.2d 587] ; Golden State Glass Corp. v. Superior Ct., 13 Cal.2d 384 [90 P.2d 75].)

Under these authorities this court and the Supreme Court could have denied 'the writs solely on the ground that even though there was an excess of jurisdiction, the validity of the orders could be passed on by appeal, and that remedy was adequate. It is true that this point was not urged before this or the Supreme Court, but counsels’ failure to urge it does not restrict the court’s powers. It is common practice for an appellate court to decide such applications on grounds not urged by counsel.

It follows, under the rule of the Funeral Directors case, supra, that because the courts could have denied the applications on the ground that an appeal was an adequate remedy, such denials cannot now be held to have been based on the merits, and are therefore not res judicata.-

The rule of the State Board of Equalization case, supra, is also applicable here. The lower court had ordered a trial de novo before a jury. That order was not final. It was no more final than an order on a demurrer prior to entry of judgment is final. The trial court could have changed its order any time before trial. When the petitions for writs of prohibition were filed the appellate courts may have denied them because they felt that the trial court would correct its error and not enter a final order in excess of its jurisdiction. The possibility that this may have been the basis of the denials prohibits such denials from becoming res judicata on the merits. On the merits of these appeals we are here presented with another chapter in the long and not entirely consistent volume of California law dealing with the subject of the scope of judicial review of the determinations of state-wide administrative agencies. Since the inception of these proceedings the commissioner has contended that under the facts here involved the superior court was without jurisdiction to grant a trial de novo with or without a jury. His reasons are, first, that under sections 1733(c) and 1821 of the Insurance Code the commissioner may deny an application for a license where within five years of the date of such application he has denied a similar application after a full hearing. In the present case, in 1941, on the ground the applicant was not of good moral character, substantially similar applications were denied after full hearings. It was under these sections that the commissioner purported to act in denying the August, 1942, applications, without hearings. The second point is that the qualified trial de novo doctrine applied by the Supreme Court in several cases has no application at all to the review of state-wide administrative determinations denying a license, but applies only to cases of suspension or revocation of existing licenses by such agencies. This contention is based on the case of McDonough v. Goodcell, 13 Cal.2d 741 [91 P.2d 1035, 123 A.L.R. 1205], In our view both contentions are sound.

The provisions of the Insurance Code, starting with section 1800, set forth a complete statutory scheme for the licensing of bail permittees, and for a review of the determinations of the commissioner in granting or revoking licenses. Section 1800 of the Insurance Code requires all persons who execute undertakings of bail to be licensed. The act defines bail bonds and excludes certain kinds of bonds from its operation. Section 1802.5 defines a bail permittee’s license—the type here involved—and requires a $5,000 bond to be given by such licensees. Section 1804 requires the applicant for such licenses to file his application with the commissioner and requires the commissioner to investigate the licensees. Section 1805 provides that the commissioner may decline to issue a bail-license until he is satisfied that the applicant “is of good business reputation and of good general reputation” ; that the applicant has never had a license revoked or refused because of his lack of honesty or integrity; that the applicant has an understanding of the obligations and duties of bail; that the applicant has not participated in any business transaction which “in the opinion of the commissioner tends to show unfitness to act in a fiduciary capacity”; that the applicant has not wilfully misstated any material fact in his application; that there is no outstanding judgment against the applicant of conviction of a misdemeanor or felony involving misappropriation of money; that the applicant has not committed an act forbidden by this code; that the applicant is a fit and proper person to hold the license. Section 1806 provides that the commissioner “may suspend, revoke or refuse to issue any license under this chapter whenever it is made to appear to him that the holder of such permit is not a fit or proper person to be permitted to continue to hold or receive such license.” Section 1807 permits the commissioner to suspend or revoke any license for any cause for which he could deny the license, while section 1807.5 requires, except for a limited period, that such suspension or revocation shall only be after a hearing. The sections immediately following have to do with the issuance of the license, the regulation of certain phases of the bail bond business, the giving of examinations by the commissioner to applicants for licenses, fees for licenses, and certain provisions imposing duties on the commissioner. Section 1818 provides: “Any action to review an act of the commissioner denying, suspending or revoking a license .. . shall be commenced within three months from and after the date of the act against which relief is sought. ...” Section 1821 requires that applications for licenses shall not be denied without a hearing, except that sections 1730 through 1736 are made applicable to applications for such licenses. These sections set forth grounds for refusal, suspension or revocation of licenses substantially as outlined above. Section 1733 provides: “The commissioner may, with or without hearing, suspend, revoke, or decline to grant or renew the license . . . when any of the following facts exist in respect to the applicant or licensee: . . .

“c. Suspension, revocation or refusal to grant or renew a license previously issued or applied for under this code when such action by the commissioner occurred within five years before the application and was based on reasonable notice to and hearing of the applicant or licensee.” Section 1734 provides: “An action to review an act of the commissioner denying, suspending, or revoking a license . . . shall be commenced and tried in the superior court of the county in which is located the principal office or residence of the party bringing it unless the parties thereto stipulate otherwise.” The action must be brought within three months of the date of the act against which relief is sought.

These provisions have been summarized in order to show how completely the Legislature has set up standards for such licensees, the powers of the commissioner in issuing and revoking such licenses, and the methods of review of his determinations. The Legislature in this respect seems to have anticipated Mr. Justice Schauer’s observations in Sipper v. Urban, 22 Cal.2d 138 [137 P.2d 425], where, in his special concurring opinion, he stated that the Constitution of this state does not preclude the Legislature “from setting up a form or forms of procedure in the nature of the mandamus review which has been developed. So long as it does not add to or subtract from the courts’ constitutional powers, express or inherent, it may prescribe regulations which would constitute a guide for the public, the administrative officers, and the courts. It should not be necessary for this court to have to improvise rules of procedure for review of the decisions of any of the several boards of the state . . . yet the need for such rules in patent. It seems highly probable that many of the seemingly arbitrary practices of such agencies and many of the claims of injustice to individuals would be obviated if there were legislatively established standards and plans of procedure, governing both the initial proceedings and the review thereof, known alike to the courts and boards and known by or available to the public.” (P. 151.) That is exactly what was here done by the Legislature.

A reading of the above provisions of the Insurance Code demonstrates that it was the intent of the Legislature to confer primary licensing authority upon the Insurance Commissioner. Upon him was placed the primary duty of ascertaining and finding the facts relating to the fitness of the applicant for a license. Provision was then made, not for a trial de novo, but for a “review” of his determinations by the superior court. There is no doubt at all of the constitutionality of such procedure. But the trial court here substituted for the statutory procedure a trial de novo before a jury without regard to what had happened before the commissioner—that is, just as if no proceedings had taken place before the commissioner. The substituted procedure thus adopted by the trial court was palpably erroneous, because thereby the jury and not the commissioner became the primary licensing agency of the state, which obviously was in direct violation of the provisions of the Insurance Code and of the legal doctrines built up by the courts during the past ten years for the review of the determination of state-wide administrative boards. An approval of the substituted procedure so adopted by the trial court would clearly operate as a complete nullification of all statutes regulating the issuance of licenses by state agencies and require juries primarily to pass upon the qualifications of all applicants for licenses. Without reference to the five-year provision of section 1733(c), at most we have here a state-wide administrative board refusing to grant an applicant a hearing. Assuming, contrary to the actual fact, that such refusal was improper and that a hearing should have been granted, the power of the superior court would have been limited to determining that there had been an abuse of discretion, and to ordering the commissioner to grant the hearing. The statute places the determination of the issue as to whether the applicant has a good or bad character in the first instance in the commissioner. The "superior court has no statutory, inherent or constitutional power to decide that issue before the commissioner has acted. The superior court in such case could determine whether there was an abuse of discretion, but it was reversible error to decide the issue in the first instance for itself. (Bila v. Young, 20 Cal.2d 865 [129 P.2d 364]; Universal Cons. Oil Co. v. Byram, 25 Cal.2d 353 [153 P.2d 746].) In both these cases the appellate court, after having determined that a board had improperly acted on certain law matters, remanded the case to the fact finding body to pass upon the controverted factual issue.

The many cases decided on the question of the scope of judicial review of determinations of administrative rulings do not suggest far less compel the conclusion that a trial court may try de novo, with or without a jury, a factual issue which by statute is required to be passed upon by a board, where the board has not acted. As to local boards, the law is now clear that either certiorari or mandamus may be used to review their determinations, but whichever writ is used the scope of review is the same. (Walker v. City of San Gabriel, 20 Cal.2d 879 [129 P.2d 349, 142 A.L.R 1383] ; Ware v. Retirement Board, 65 Cal.App.2d 781 [151 P.2d 549]; Shew-bridge v. Police Commission, 64 Cal.App.2d 787 [149 P.2d 429] ; Greif v. Dullea, 66 Cal.App.2d 986 [153 P.2d 581].) Where such a board has failed to pass on a factual issue the proper procedure is to refer the problem back to the board. It is error for the superior court to try the issue de novo. (Greif v. Dullea, supra, p. 1010.) When we come to the question of the scope of review of state-wide administrative boards we find that the scope of review is much broader but by no means unlimited. In Drummey v. State Bd. of Funeral Directors, 13 Cal.2d 75 [87 P.2d 848], it was held that at least in certain cases the courts on review may exercise an independent judgment on the facts, and may grant a qualified trial de novo. But that so-called trial de novo does not mean a trial in complete disregard of what the board has done. The findings of the board or officer come before the superior court with a strong presumption of their validity. Obviously, where the board or officer has not acted, or has refused a hearing, there is nothing upon which the presumption can be based. The obvious solution is that the case should be returned to the board or officer so it, or he, can act, so that there will be findings to which the rule can apply.

While there is language in Laisne v. California St. Bd. of Optometry, 19 Cal.2d 831 [123 P.2d 457] (which was the latest case on the subject when the trial court here granted the right to the trial de novo), that would imply that the trial de novo required was unlimited, the later cases have definitely repudiated that extreme view. (Dare v. Board of Medical Examiners, 21 Cal.2d 790 [136 P.2d 304] ; Russell v. Miller, 21 Cal.2d 817 [136 P.2d 318] ; Sipper v. Urban, 22 Cal.2d 138 [137 P.2d 425].) In the last named case Mr. Justice Schauer expressly placed his concurrence on the ground that “The complete trial de novo doctrine of the Laisne case has been abandoned.” (22 Cal.2d at p. 144.)

We conclude this phase of the case with the holding, amply supported by the above authorities, that where an administrative board exercising state-wide powers has refused to grant a hearing, the superior 'court has no power to try de novo the factual issue the determination of which is conferred upon the board, but its power is limited to ordering the board to act, if an abuse of discretion is shown to exist. This is in-accord with the elementary rule that mandamus will not be used to control discretion. The writ may not be used to compel the exercise of statutory discretion in a particular manner—it may only direct the board to act, not how it shall act. (See cases collected 16 Cal.Jur. § 28, p. 809.) Thus, in the present case the only possible issue that could have come before the trial court was whether the commissioner abused his discretion in denying to petitioners a hearing. Under no theory did the court have power to pass on the merits of the applications until the board had acted on the merits. This conclusion is reached without reference to- the provisions of section 1733(c) of the Insurance Code.

Section 1733(c), however, demonstrates that there was no abuse of discretion in denying the hearing. It provides that where an application has been denied, after a full hearing, within five years, the commissioner may, with or without a hearing, deny the application. The record shows that in 1941, after a full and complete hearing, the applications of these petitioners were denied on the ground that they were not fit and proper persons to become bail permittees. Petitioners could have had the correctness of these determinations passed upon under sections 1734 and 1818 of the Insurance Code. This, petitioners did not elect to do. They allowed these determinations to become final. Then, about one year later, they filed the present applications, which are substantially similar to the 1941 applications. No contention has ever been made that any circumstance intervened between 1941 and 1942 upon which a different ruling could be predicated, nor has any contention been made that any evidence is now available different from that produced in 1941. The 1941 denial is res judicata to the limited extent provided in section 1733(c). That section is a legislative declaration that in the discretion of the commissioner his prior determination, based upon a hearing, may be res judicata for a period of five years. Such a statute is, of course, constitutional. If the statute provided that no application could be filed at all within five years of a previous denial, regardless of after discovered evidence, and regardless of changed circumstances, there might be some merit in the thought that then it would be unconstitutional. But the statute is permissive only. It confers discretion on the commissioner. If he abuses that discretion such abuse could be reviewed in a mandate proceeding. But that is not the present case where no facts showing a possible abuse are pleaded. On the face of the pleadings it affirmatively appears that no abuse occurred. It therefore follows that, since it affirmatively appears from the pleadings that the denial of hearings and denials of the applications were proper under section 1733(e), there was nothing at all for the superior court to try.

The purpose of section 1733 (c) is obvious. A person applies for a license. A full and complete hearing is had. The application is denied. The applicant is content with the ruling and does not seek to have it reviewed. He then files an identical application. If successive applications can be filed, and if the commissioner must grant a full hearing on each such successive application, the rich applicant can practically usurp the full time of the commissioner and the facilities of his office, to pass on his applications—and this in a situation where the commissioner has already heard the evidence and passed on its weight and credibility. No useful purpose would be served by such successive hearings and much useless expense would be incurred. The section is a sensible and intelligent attempt on the part of the Legislature to prevent such abuses.

There is an additional and alternative ground upon which it could be held that the trial court had no power to grant a trial de novo in these cases. It will be noted that petitioners are not licensees. They have never had a state license as bail permittees. They seek to secure such licenses. The commissioner has denied their applications. The rule, first enunciated in the Drummey ease, supra, that permits a qualified trial de novo in certain eases has never been held to extend to the review of administrative determinations denying, licenses, but has been held to apply only to the revocation or suspension of licenses. This was the very point decided as to these very petitioners in McDonough v. Goodcell, 13 Cal.2d 741 [91 P.2d 1035, 123 A.L.R. 1205], The Drummey case had been decided in March of 1939. The McDonough case was decided in June of that year. In the latter case it was urged that the limited trial de novo doctrine of the Drummey ease was applicable as well to the review of an administrative determination denying a license as it had been held to apply to the suspension or revocation of an existing license. The court, without a dissenting voice, held that the rule of the Drummey case had no application to the review of administrative refusals to grant a license. (13 Cal.2d at p. 752.) The court held that certain constitutional principles compelled the holding of the Drummey case and that those principles only applied to the revocation or suspension of existing licenses but had no applications to refusals to grant licenses. It was therefore held that as to the review of administrative refusals to grant licenses the scope of the review in the superior court was to determine whether the administrative board had abused its discretion, which, so far as the evidence is concerned, meant that the court’s power was limited to ascertaining whether the board’s findings were supported by the evidence. The qualified trial de novo theory was expressly held not to be applicable.

Whatever our view may be as to the correctness of this distinction, as an intermediate court we are bound by this holding of the Supreme Court. The rule of the McDonough ease has never been repudiated or even questioned in the later cases. All of them cite the case with approval. It is binding upon us.

For any one of these reasons it is obvious that the trial court committed error, serious and prejudicial error, in granting a trial de novo in the present ease. Under no theory can such procedure be approved.

The judgments appealed from are reversed.

Knight, J., concurred.