Underwood v. State Bd. of Alcoholic Control, No. 74

• Decision Date: 12 May 1971
• Docket Number: No. 74
• Citation: 278 N.C. 623,181 S.E.2d 1
• Court: North Carolina Supreme Court
• Parties: Edward Leon UNDERWOOD t/a the Castaway Night Club, Petitioner, v. STATE BOARD OF ALCOHOLIC CONTROL, Respondent.

Page 1

181 S.E.2d 1

278 N.C. 623

Edward Leon UNDERWOOD t/a the Castaway Night Club, Petitioner, v. STATE BOARD OF ALCOHOLIC CONTROL, Respondent.

No. 74.

Supreme Court of North Carolina.

May 12, 1971.

Robert Morgan, Atty. Gen., by Christine Y. Denson, Asst. Atty. Gen., and James L. Blackburn, Staff Atty., Raleigh, for the respondent appellant.

Charles B. Hodson, Chapel Hill, and Robert L. Satterfield, Hillsborough, Attys. for petitioner appellee.

HUSKINS, Justice:

It is well established that regulation of the sale and use of alcoholic beverages is within the police power of the State. Boyd v. Allen, 246 N.C. 150, 97 S.E.2d 864 (1957). The State Board of Alcoholic Control is empowered to enforce laws relating to the sale and control of alcoholic beverages. G.S. § 18--39. The suspension and revocation of licenses by the Board are administrative decisions affecting the rights of specific parties and are subject to judicial review under the provisions of Article 33 of Chapter 143 of the General Statutes. Upon such review, the 'whole record' test is applicable, and the decision of the Board may be reversed if substantial rights of the licensee are prejudiced by administrative findings, inferences, conclusions or decisions which are not supported 'by competent, material, and substantial evidence in view of the entire record as submitted.' G.S. § 143--315(5); Freeman v. Board of Alcoholic Control, 264 N.C. 320, 141 S.E.2d 499 (1965); Keg, Inc. v. Board of Alcoholic Control, 277 N.C. 450, 177 S.E.2d 861 (1970). The 'whole record' test must be distinguished from the 'any competent evidence' standard. See Hanft, North Carolina Case Law--Administrative Law, 45 N.C.L.Rev. 816 (1967).

The State Board of Alcoholic Control has adopted regulations to administer the laws governing the sale of wine and malt beverages, and the Board may revoke or suspend the State permit of any licensee for a violation of the law or of any regulation adopted by it. G.S. § 18--78(d). Regulation No. 30 reads as follows: '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 * * * the following provisions upon the licensed premises: * * * 5. Permitting any person engaging in an affray or disorderly conduct.' Petitioner is charged with a violation of this regulation.

All the evidence adduced at the hearing and considered by the Board tends to show that the licensee was making a reasonable effort in good faith to enforce the provisions of G.S. § 18--78.1(4) which provides that a licensee shall not permit on the licensed premises any disorderly conduct breach of the peace, etc. Accordingly, Underwood's employees were ejecting trouble-makers from his premises, thus indicating petitioner's disapproval of the disorderly conduct in which the participants were engaged. Notwithstanding such evidence, petitioner was found by the Board to be in violation of Regulation No. 30(5)--permitting others to engage in an affray.

That there was an affray or breach of the peace on petitioner's premises is not disputed. The question is whether forcible removal from the premises of persons engaged in an affray constitutes 'permitting or allowing persons to become engaged in an affray'? The answer is no.

To permit means to acquiese with knowledge, to knowingly consent. Hinkle v. Siltamaki, 361 P.2d 37 (Wyo., 1961). The words 'permit' and 'allow' are synonymous. Collins v. Johnson, 242 S.C. 112, 130 S.E.2d 185 (1963); City of Eastlake v. Ruggiero, 7 Ohio App.2d 212, 220 N.E.2d 126 (1966). 'Permit' has been construed to mean in effect 'knowingly permit', as the following cases illustrate. To permit sale of alcoholic beverages to a minor connotes some opportunity for knowledge and prevention of the sale. People v. Teetsel, 12 Misc.2d 835, 177 N.Y.S.2d 612 (1958). To permit livestock to run at large means to allow it to be done with knowledge. Hinkle v. Siltamaki, supra. To permit the unlawful sale of liquor in his building, an owner must have knowledge of the violation and consent to it. Gray v. Stienes, 69 Iowa 124, 28 N.W. 475 (1886). To permit persons 'to resort for the purpose of drinking intoxicating liquors' means to consent to same. State v. Wheeler, 38 N.D. 456, 165 N.W. 574 (1917). To permit gaming in one's house means to consent to it with knowledge. Stuart v. State, 60 S.W. 554 (Tex.Cr.App., 1901).

We therefore hold that Regulation No. 30(5), authorizing suspension or revocation of license for 'permitting any person engaging in an affray or disorderly conduct', means knowing acquiescence in such conduct. The mere fact that an affray took place on the premises is no violation of the regulation and affords no basis for suspension or revocation of license. The record in this case does not support by competent, material and substantial evidence the charge that Edward Leon Underwood Knowingly permitted the affray. Instead, it points to the conclusion that he was making a reasonable effort in good faith to prevent such conduct by ejecting the wrongdoers from the premises.

It is unlawful for any person 'to permit any alcoholic beverages to be possessed or consumed upon any premises not authorized pursuant to chapter 18, North Carolina General Statutes.' G.S. 18--51(6), par. d. Furthermore, under a license for the sale of malt beverages and wines for consumption on or off premises, no holder of such license shall 'knowingly permit the consumption on the licensed premises of any kind of alcoholic liquors the sale or possession of which is not authorized by law.' (Emphasis added) G.S. § 18--78.1(5).

The Board charges Edward Leon Underwood with a violation of the foregoing statutes in that he allegedly permitted the...