C'est Bon, Inc. v. NORTH CAROLINA BD. OF ALCOHOLIC CON.

181 S.E.2d 448 (1971) 279 N.C. 140

C'EST BON, INC., t/a C'est Bon
v.
NORTH CAROLINA BOARD OF ALCOHOLIC CONTROL.

No. 112.

Supreme Court of North Carolina.

June 10, 1971.

Plumides & Plumides by Michael G. Plumides, Charlotte, for petitioner appellant.

Atty. Gen. Robert Morgan and Asst. Atty. Gen. Christine Y. Denson for respondent appellee.

MOORE, Justice.

The State Board of Alcoholic Control has the authority to regulate and supervise the sale and distribution of alcoholic beverages. Only those holding a permit from the Board may engage in the sale and distribution of beer. The permit is a privilege granted to those who meet the standard which have been established by the General Assembly or regulations adopted by the Board pursuant to the authority granted by G.S. 18-78(d), and the permit may and should be revoked if the permittee violates the laws or regulations pertaining to such permit. A violation of either a statute or a regulation is sufficient to support the suspension of the license. G.S. 18-78(d); State Keg, Inc. v. Board of Alcoholic Control, 277 N.C. 450, 177 S.E.2d 861; J. Lampros Wholesale v. North Carolina ABC Board, 265 N.C. 679, 144 S.E.2d 895; Boyd v. Allen, 246 N.C. 150, 97 S.E. 2d 864.

Before a permit can be suspended or revoked, G.S. 18-137 requires notice to the permittee of the time and place for a hearing with an opportunity for the permittee to offer evidence and to be represented by counsel. The charges against the permittee must be specific. The hearing may be before the Director or a Hearing Officer. After the hearing, the Hearing Officer reviews all the evidence, records his findings of fact and conclusions of law, and makes his recommendations to the Board. The Chairman of the Board causes the record, findings, conclusions, and recommendations of the Hearing Officer to be submitted to the Board for approval, modification, or rejection as the Board may find to be justified by the record. The Board makes the final decision. G.S. 18-78; G.S. 18-137; G.S. 18-138; North Carolina Board of Alcoholic Control Inspection and Enforcement Rule 3.A.8; Sinodis v. State Board of Alcoholic Control, 258 N.C. 282, 128 S.E.2d 587.

After a hearing to determine whether the permittee has violated the law or regulations, the findings of the Board are conclusive if supported by competent, material and substantial evidence. State Keg, Inc. v. Board of Alcoholic Control, supra; Freeman v. Board of Alcoholic Control, 264 N.C. 320, 141 S.E.2d 499; Campbell v. North Carolina State Board of Alcoholic Control, 263 N.C. 224, 139 S.E.2d 197; Thomas v. State Board of Alcoholic Control, 258 N.C. 513, 128 S.E.2d 884.

On appeal to the court for judicial review of the Board's decision, it is the duty of the court to review the evidence and determine whether the Board had before it any material and substantial evidence sufficient to support its findings. Wholesale v. ABC Board, supra.

In the present case the Board found as a fact, based upon the testimony of two eyewitnesses, that the permittee sold and allowed the consumption of beer on its premises at approximately 12:03 a. m. This was a violation of G.S. 18-78.1(3), which provides it is unlawful to "sell such beverages upon the licensed premises or permit such beverages to be consumed thereon, on any day or at any time when such sale or consumption is prohibited by law," and of G.S. 18-141 which provides that beer will not be sold between the hours of 11:45 p. m. and 7:30 a. m., and will not be consumed on the premises between 12 midnight and 7:30 a. m.

The Board further found as a fact, based upon testimony of the same eyewitnesses that the permittee allowed B. B. Jasper, an employee, to consume intoxicating beverages (whiskey) on the premises on 26 and 27 June 1970. Malt Beverage Regulation No. 30 provides:

"30. Permits authorizing the sale at retail of beverages, as defined in G.S. 18-64 and Article 5 of Chapter 18 of the General Statutes, for on or off premises consumption may be suspended or revoked upon violation of any of the following provisions upon the licensed premises:

* * * * * *

"6. Any permittee or employee consuming intoxicating beverages on the premises. * * *"

The petitioner contends that Jasper was an independent contractor and was not an employee of the club. However, in an affidavit filed by Jasper, he states that he was informed by the management of C'est Bon that if he were caught drinking alcoholic beverages on the premises "my employment would be terminated; * * *" Again in his affidavit he indicates that his drinking under the table was done "out of the sight of my employer. * * * (Emphasis added.) In addition, Moore, the manager of C'est Bon, testified that he told Jasper that he was not allowed to drink while employed there. We hold that the overwhelming evidence that Jasper was openly consuming alcoholic beverages (whiskey) served to him by an employee of the club, while Jasper was on the premises for the purpose of entertaining customers, amply supports the finding that an employee was permitted to consume intoxicating beverages on the premises, a violation of Malt Beverage Regulation No. 30(6).

Malt Beverage Regulation No. 30(1) and Social Establishment Regulation No. 8(2) provide that a license may be revoked or suspended for permitting intoxicated persons to loiter on the licensed premises. The evidence was sufficient to support a finding that at least one person was intoxicated to the extent that he fell down and finally "passed out" at his table where he remained for a considerable length of time. Permitting this to occur would constitute a violation of Regulations No. 30(1) and No. 8(2).

The specific findings discussed above would justify the final finding of the Board that the permittee failed to give the licensed premises proper supervision on or about 26, 27, and 28 June 1970, a violation of G.S. 18-78.

Any one of the above recited violations would support the suspension of C'est Bon's permit to sell beer at retail and C'est Bon's social establishment permit. G.S. 18-51(7)b; G.S. 18-78(d); State Keg, Inc. v. Board of Alcoholic Control, supra.

As stated by Justice Higgins in Freeman v. Board of Alcoholic Control, supra:

"``* * * Courts will not undertake to control the exercise of discretion and judgment on the part of members of a commission in performing the functions of a State agency.' Williamston v. Atlantic Coast Line R. R., 236 N.C. 271, 72 S.E.2d 609. ``When discretionary authority is vested in such commission, the court has no power to substitute its discretion for that of the commission; and in the absence of fraud, manifest abuse of discretion or conduct in excess of lawful authority, the court has no power to intervene.' Pharr v. Garibaldi, 252 N.C. 803, 115 S.E.2d 18. ``Hence it is that the findings of the board, when made in good faith and supported by evidence, are final.' In re Hastings, 252 N.C. 327, 113 S.E.2d 433."

There is no evidence of fraud, manifest abuse of discretion, conduct in excess of lawful authority, or that the Board acted arbitrarily or capriciously.

The judgment of the Superior Court is in all respects affirmed, and the order entered by Judge Brewer staying the operation of the order entered by the State Board of Alcoholic Control on 19 October 1970 pending the appeal is vacated.

Affirmed.