*1 Bank. June 1959.] No. 20102. F. [S. as Director MARTIN, W.
THOMAS Respondent, ALCOHOLIC Control, Alcoholic THE OF APPEALS BOARD CONTROL BEVERAGE Appellant; Defendant CALIFORNIA, OF STATE Party in Interest Real HALEY, BERT MARTIN Appellant. *2 Haws,
Edsel Chief Counsel, Just, W. Charles P. Associate Foley Counsel, Foley Appellants. & Foley, for James W. Stanley Mosk, Attorneys General, Edmund Brown and G. Wiley Attorney Manuel, Deputy General, W. for Re- spondent. appeal by SPENCE, Haley, J. This isan Martin Bert Beverage Appeals licensee, and also the Alcoholic Control (hereinafter Appeals Board) judg- Board called directing granting ment the trial a writ of mandate court Appeals to affirm the decision of the Beverage (hereinafter of Alcoholic De- Control called the revoking general liquor partment) on-sale license thereto- Haley. general fore respective For a issued discussion of the powers 22, conferred article section XX, Constitu- Appeals Board, tion reference is made to our recent decisions in Martin Bev- v. Alcoholic erage 7040, ante, page Control Board, Sac. 1], and Martin v. Alcoholic Control Appeals Board, 24698, ante, page L. A. P.2d 291]. Haley applied In 1942 for and received on-sale premises Spot Jose, for known the Brite as San of which he was then the sole owner. In either 1942 or arrangement entered one into oral with Frank operation partnership. Mendoza for as a the business Thereafter, authority each money, contributed exercised running profits. They rep- business, and shared purpose resented the business partnership to be a applying for business loans policies, and insurance preparing tax income returns. on advice from the they sales tax division, permit tax obtained sales *3 names partners. they both Each in testified that 1953 inquired from someone in liquor the the division of Board of Equalization they whether should obtain a license in partnership the name, they and that were advised that this necessary. was not application On the for a renewal license year through only each 1955, 1943 Haley signed his name as sole business, though owner the the form indicated that the ease of partnership, application the renewal signed by partner. should be each April Department 1955, against the filed an accusation Haley charging him with violations of certain sections Beverage the Alcoholic ownership Control Act because the undisclosed years of Mendoza in the business 1943 over the hearing to 1955. The true, officer that found the accusation was 23300, 23951, Haley 23355, had violated and sections (as 23953 of the Alcoholic Control Act now num- grounds bered the & sus- Code), Bus. Prof. and for pension provisions or revocation of the license the under (a), (b), (e) section subdivisions the act been established. He the be revoked, recommended that license Department adopted Haley and the his recommendation.
290 upheld De- Appeals the appealed to Board. The board the partment except it found penalty, on all which issues the arbitrary disproportionate to be to offensefound and to the law; with directions as a matter of and it reversed the decision imposed. Department penalty the the to reconsider superior Department then The filed director Following trial, petition for a of mandate. court a judgment writ directing granting a writ of mandate was entered reversing its De- Appeals decision Board vacate Department’s partment’s affirm decision and to order revoking Haley’s on-sale license. pro- Code Section 23300 of the Business and Professions any person perform licensee shall act which vides may perform no authority of a license unless under the by person by the De- is authorized do so a license issued by
partment. provides that Section 23355 issued Department person issued, authorizes the whom privileges rights specified, no at others, exercise the premises provides 23951 that the which issued. Section application contain “in case of a co- for a license shall partners.” partnership, names of the individual Section requires by signed each of that such “be partners.” question argued principal appears, As hereinafter Appeals to re- parties power of the Board all appraise relates penalty imposed where the propriety properly substantial evidence has found disciplinary penalty. subject The to some that the licensee is the sole owner indisputably shows record during years question, and that the business existing partnership of his re- on failure to disclose years period con- applications of at least over newal premise repeated Upon act. stituted violations legally argues the offense committed revocation, justify sufficient power with the to interfere so not have the did Department. imposed pertinent, article XX, amendment to sec here As " provided: shall tion the Constitution suspend . to . . or revoke discretion, power, *4 the have good cause any specific liquor license if it shall determine contrary be . of such license would that the . . continuance by . . . Review the board of public welfare or morals. questions department of shall be limited to decision
291 or in department proceeded without excess has whether department proceeded in has jurisdiction, of its whether by supported required is law, the manner whether the decision by by findings supported whether the are findings, light of the . . . substantial evidence whole record. department, of When the order reverses the decision may light of matter in board direct the reconsideration may of such its order and direct the to take specially by enjoined action as it law, further but any way order shall not limit or control discretion department. vested law the of the Orders board shall judicial subject upon petition review of director or ’’ party aggrieved such order. question scope judicial Where the of the review has proceedings, arisen in mandamus has been held that the propriety penalty imposed by agency administrative is a matter vested in the agency, such discretion its decision thereon will not be disturbed unless there been has a clear abuse (Nardoni McConnell, discretion. v. 48 Cal.2d Bonham, 644]; McConnell, 507 P.2d v. 45 [310 Cal.2d 306 502]; Department P.2d Griswold v. [288 Alcoholic ; Control, Cal.App.2d 807, Bev. 141 P.2d [297 762] Community Altadena Church v. State Bd. Equalization, 109 Cal.App.2d 99, 104, 106-107 322].) P.2d provision statutory defining scope judicial inquiry validity into the of an administrative expressly decision de clares that the “judgment court’s shall not limit or control in any way the legally vested’’ in the administrative agency. (Code Proc., §1094.5, subd.(e).) By Civ. parity of reasoning, applicable the same limitation is power in reviewing propriety Depart ment’s decision on the penalty, when the Constitution has placed the discretion in Department (art. XX, §22). specific no finding made While Haley’s “contrary license would be continuance XX, (Const., 22), finding art. Haley welfare’’ repeatedly § the above-cited violated sections of the Alcoholic (Mercurio Act was tantamount Beverage Control thereto. Control, Cal.App.2d Alcoholic etc. 626, 631 474].) contends sections 23951 and only original applica Business and Professions Code relate tions, partner that the failure of a sign
292 charged sections as a those for is not violation renewal contention, as those in against' no merit him. There is Furthermore, applications. the obviously all to sections relate “un preliminarily recited that the application form renewal changes in dersigned hereby been no that there have certifies application,” and original in facts set material out signature line, that “in the case below there was the note by partnership signed each of of a partners.” Haley the renewal shall be charged of the sections with violation
was partnership, it found on requiring undisputed and was disclosure of partner in fact a evidence that the business was ship. and Professions Code Section 24200 of Business grounds suspension recites the revocation a license by (e), misrepresentation includes, “The subdivision ’’ by any applicant obtaining material fact a license. The Haley misrepresentation record thus shows that made a of a applications. material fact on each of several There renewal disciplinary fore sufficient basis for action existed. estopped Department that the was Haley contends further argu- disciplinary against him. He rests this action to take partner testi- that he and his Mendoza ment on the fact both employee an division of fied that 1953 necessary Equalization them that it was not Board of advised put argues He also of their names on license. both was estoppel, if there not a strict this evidence introduced finding mitigating circumstances, should have show bearing thereon, on been made as would have direct whether or not abused had revoking his license. In this it should be connection, noted Haley applications overlooks renewal annually years by prior him alone been filed for at least 10 purported employee. alleged advice from the estoppel required elements for an are not However, identity no evidence as present There was here. con he was informed the facts alleged or whether advisor satisfactorily nor was it estab partnership, even cerning the Department’s employee predeces he was lished that estoppel elements of is that the essential sor. person One (18 estopped of the facts. must advised Cal.Jur. to be principles equitable estop Moreover, p. 406.) 2d, 5, § deprive ordinarily applied pel are because the mistaken action on protection of a statute employee. (Jacques, public official or v. State part of a Inc. Cal.App.2d 448, 462 6]; 155 P.2d Equalization, Bd.
293 California, Co., Diego Tel. County Water & also San 747].) A.L.R. Cal.2d Haley Ap both and the main advanced contention circumstances, peals facts under all the constituted revocation of the license urges abuse of its his violation discretion. innocent, that continued failure include Mendoza’s ignorance name on the renewal was due to than to law; mistake rather intent evade the noth ing "affecting public welfare or morals ever occurred *6 operation premises Haley’s original of the license in since be and would absurd to believe that his “technical ground violation” holding would sufficient for that con contrary public tinuance of the would be welfare. argues The here, Board further that where, as places licensee has a committed violation which his license jeopardy, jured, public but there is that no evidence was in penalty
a opportunity which him bring denies operation his compliance requirements business into with the disproportionate of the law is so to the offense found as to be arbitrary as a matter of (Cornell Reilly, Cal.App. law. v. 127 2d 184 P.2d 572].) viewing propriety penalty But aas matter Department vested in of the discretion our consti under provision (art. XX, 22), considering tutional the rule § penalty that its determination of will not be disturbed (Nardoni unless there is clear abuse of discretion v. supra, McConnell, 500, 507; McConnell, Cal.2d Bonham v. supra, 304, 306; Department 45 Cal.2d Griswold v. Alco of Control, Cal.App.2d holic supra, Bev. 807, 812), it does appear Department that the abused its discretion here. Department charged responsibility super with the vising operation liquor establishments those who privileges liquor would it Undoubtedly, exercise licenses. problems has attempting prevent encountered serious operation partners of such establishments undisclosed Lighter penalties may proved wholly owners. have inef discourage practice. fective to In our decision in recent Alcoholic Control, 51 Macfarlane 769], Cal.2d 84 where license was revoked upon evidence licensee violated section 337a of (the the Penal taking Code unlawful bets on horse races at premises), urges licensed we said: “Petitioner also
revocation, suspension, rather than mere of license is too harsh. might appear just On the record this to some of us to be proper But no such is within our criticism. determination function. The conduct for the license was revoked which State, constituted a crime under the laws of this and was thus technically contrary at least or morals. The welfare (art. 22) expressly XX, Constitution authorizes license revo- § cation under such circum- stances, and this court is not free to substitute its own ’' matter, discretion as to the if it so to do. even were inclined (P. 90.) distinguishable case is the Macfarlane Haley argues “entirely finding of violation it involved because wholly independent statute, separate criminal distinct and licensing liquor, of dealers pertaining to the laws society.” law-abiding growing concern aimed at evil vested in the concept broad discretion However, the same; remains the fixing the Haley unquestionably committed here repeated violations his license. The most Department’s revocation sustain might minds as to differ that reasonable be said is
that can only penalty imposed, but this serves propriety of the Department acted within the fortify the conclusion (Const., XX, art it. conferred area of discretion broad Appeals Board, Beverage Control Alcoholic Martin v. §22; p. 238.) are therefore of the ante, We 7040, supra, Sac. correctly determined court the trial opinion that *7 reversing powers in exceeded its had Department. decision of is affirmed. judgment
The McComb, J., Traynor, con J., J., and Shenk, Gibson, J.,C. curred. appeals In my board Dissenting. view
SCHAUER, J., in law, matter of the cir holding that as a in correct was arbitrarily, department acted case, the of cumstances revoking discretion, in of its area than within the rather license. defendant’s of Alcoholic in the vested The discretion absolute, endow with not intended to Beverage is Control stating of this fact power; the mere unlimited, dictatorial power inconsistent with is of such the exercise shows recognize Certainly we should concept of “discretion.” given broad and inclusive. to only limits power is within the true that statement But 739, principles. (Brill (1931), Fox 211 Cal. legal v. fixed enlarge 25], power its own bound- cannot P. “Such 743 support requiring legal bases. Even within or acts other aries fact power is unbridled. mere legal limits the not The jurisdiction make an may order does a court have judicial not equip Its must it'to exercise discretion. acts also only of discretion but must be confined within field limiting adjective of a character within the bounds be power in ‘judicial.’ To all the material facts exercise considered, together must known also be both evidence legal principles intelligent, an informed, essential to with just ‘judicial . . The term decision. . discretion’ Bailey 422, in (1866), .29 as follows: defined Cal. Taaffe capricious ar- intended, however, is not or ‘The discretion impartial bitrary discretion, guided but an discretion, legal principles. in controlled its exercise fixed It is not gratia, legal discretion, a mental to be exercised ex but conformity spirit in discretion, be exercised with impede the law and manner subserve and not or ’ ” justice. (Gossman ends defeat the of substantial v. Gossman Cal.App.2d 184, 178].) De- (1942), 194-195 The partment Alcoholic bound Control is the same a court in the exercise rules as of the discretion in it. vested the licensee has committed a vio- Here the are that facts premises nor in manner on lation of the law neither only conducting wording in the con- business, but applications. In different circum- renewal tent correctly applicant the names list stances the failure of ade- partners indeed material constitute of all could But circum- ground a license. quate for revocation wording inaccuracy in the renewal here shown the stances substantially applications immaterial. application was original failed licensee and name made were partner. added But name of the to show partner, name partnership, together with the department’s pred- division of the tax on advice the sales permit. listing on tax There the sales ecessor, added to the not have been renewed suggestion the license would is no year been year if the made original partners than in name of the both rather names of depart- therefore, of whether the Regardless, alone. licensee *8 testimony licensee to believe was bound ment partner employe his that in 1953 an of the division department’s predecessor them, had advised inquiry, necessary put their that it was not both names on apparent license, applicants it is error that the prejudice was innocent and was mistake without to the department public. or the agent department
An testified, substance, that investigation he had made that he licensee; partnership been informed “was a verbal one”; “they go through did not attorney, escrow or company, otherwise”; apparently “Mr. the time at my investigation glean I from what could his conversa- tions, doing anything wrong he realize he didn’t as far partnership as this between he and Mr. Mendoza was con- say ignorance part cerned. ... I would it was more on his anything than else.” agree argument appeals I with the where, board that as here, places the licensee has a committed violation which his (and, business, his consequently, property, his his investment, livelihood) his in jeopardy, but there is no evi- public dence injured, which denies opportunity (as him majority stated in the opinion) “bring operation compliance his business into with the re- quirements law,” i.e., add the name of the “new” partner application to the license and have that merits, disproportionate then considered on its so arbitrary offense found as to be as a matter of law. (Cf. Reilly (1954), Cal.App.2d 178, [3], seq. Cornell et 572].) emphasized by The above stated conclusion is the fact that in question, business which is has in all destroyed, respects apparently operated lawfully other been and with- complaint partner out since with having the “new” acquired his interest no later than 1943. The fact that the operated long period had been so with a business record completely single clear of than violations other mistake1 respect adding partner appears the name of to me to establish interest has suffered Concerning duty violation. and the (under intent of the law such case the director himself very single persisted repeated 1The mistake was year ap year, purpose whatsoever, no after serves to accentuate the parent give innocence of the omission rather than to it the character of deception. intentional *9 7, 1957) policy declaring: date of a October issued statement great power judiciously, “We must exercise our reason- ably arbitrary permit ... not in We should its use or arrogant proper authority manner. To achieve the use of the given by analyze we have Constitution, been we must the first purpose objectives its in and then determine the we seek its use. . . . many
“In cases, speaking and I am now of the assessment of beyond suspensions, gone objectives I think we have the of our obligation under the the . Constitution and laws. . . punished We have regard the violator of law to the without posed the threat his violation morals of welfare and community. the . . . very “The of negate words the the Constitution idea that dealing we are automatically which, with laws if violated, suspension require a or revocation of the license. The exercise power of our is with is ‘discretion.’ Discretion the exercise judgment upon of a Therefore, reasonable basis. unless there support is factual suspension required in that a is interest, question I has a there been reasonable exercise of our suspension discretion where we a in order the case of or isolated technical violation one of our licensees. purpose “Our disciplinary authority exercise of our punish over protect public. licenses is to not but to . . .” my In view quoted language the director the above correctly interpreted has grant power, the constitutional of appeals board, department and the superior not the or the court, a correctly interpreted applied has as matter of law power vested and the board. For the judgment reasons stated I reverse the would of the trial court.
PETERS, J.—I dissent. disagreement opinion
There no majority is between the Spence dissenting opinion Justice and the of Justice applicable fixing penalties by Schauer on the law Department. penalty fixing The rests the discre- Department. tion Within the limits of that discretion the final determination is and conclusive on Appeals opinion majority Board and on the The courts. opinion dissenting and the holds concedes an that there can fixing abuse of discretion as a matter of law in Appeals if penalty, occurs, and that such Board and the possess power the duty courts reverse and send reappraisal for a the case back to the penalty. particular determining a difficulty when The comes proper discretion penalty when without falls within and penalty is excessive of the trier If the so fact. but that reach other conclusion reasonable minds cannot a penalty law, as matter excessive, is then principle all To been abused. this the trier of the has law, agree. determined, a matter has as that this is such case. as determining excessive In whether not pro- is a law, a matter of must be remembered case, rests ceeding to burden revoke a license. such including petitioner prove all elements of ease, on the permitted engage penalty. justify We facts are *10 conjecture particular penalty imposed. why a as to being permitted Department, are not assume that the We appearing specialists in lmew facts not field, appear might support record that what otherwise would specialist penalty. is a be an excessive penalty as field, yet excessive the same found a matter of law. are limited to record. If record we
We penalty law, as a we believe was excessive matter determining suppose I question, should reverse. question penalty is so excessive that it the real whether easily the conscience. consciences are more shocked shocks Some penalty imposed my herein conscience. than others. The shocks most of factual reasons set forth in the dissent of For imposed Sehauer, I believe the here Justice being matter so, as of law. This the case should excessive reappraisal penalty. for a back to the be sent