Applications of X-Chequer Inn, Inc., X-CHEQUER

• Decision Date: 22 March 1967
• Docket Number: X-CHEQUER
• Citation: Applications of X-Chequer Inn, Inc., 229 A.2d 22 (Del. Super. 1967)
• Parties: Applications ofINN, INC., a Delaware Corporation, for License to Sell Alcoholic Liquors in a Club for Consumption Both On and Off The Premises Where Sold, Located at 8 North Race Street, Georgetown, Delaware, and to Sell Alcoholic Liquors to its Members to be by Them Kept in Separate Lockers or Compartments on Such Premises.
• Court: Delaware Superior Court

Page 22

229 A.2d 22

Applications of X-CHEQUER INN, INC., a Delaware Corporation,

for License to Sell Alcoholic Liquors in a Club for

Consumption Both On and Off The Premises Where Sold, Located

at 8 North Race Street, Georgetown, Delaware, and to Sell

Alcoholic Liquors to its Members to be by Them Kept in

Separate Lockers or Compartments on Such Premises.

Superior Court of Delaware, Sussex County.

March 22, 1967.

Appeal from Alcoholic Beverage Control Commission remand for supplemental hearing.

Roy S. Shiels, Herman C. Brown, Brown & Brown, Dover, for appellees.

Thomas S. Lodge, Esquire, Connolly, Bove & Lodge, Wilmington, Houston Wilson, Georgetown, for appellants.

QUILLEN, Judge.

This is an appeal from the decision of the Alcoholic Beverage Control Commission which granted the Application of X-Chequer Inn, Inc., for an on-premises license.

The appellee, X-Chequer Inn, Inc., is a private club located in Georgetown.A public hearing was held at which testimony was taken regarding the application and the need of the club for a liquor license.The Commission made certain findings of fact and granted the club a license to sell for consumption on the premises pursuant to 4 Del.C.Ann. § 541.Certain of the protestants below have appealed from this decision.

Initially, a procedural point must be disposed of.The appellee has challenged the validity of the appeal because it was not taken by ten of the protestants below.Application of Pepper, 4 Terry 568, 54 A.2d 173(Gen.Sess.1947).The appeal in that case was under the 1935 Code, § 6150, as amended by43 Delaware Laws, c. 275Section 2.The pertinent portion of the Code read at that time as follows:

'The Commission's decision shall be final and conclusive unless within ten days after notice thereof the parties to such hearing shall appeal to the Court of General Sessions of the county in which the license would operate.'

Judge Carey held that the word 'parties to such hearing' necessarily meant the protestants.He went on to hold further that since the collective term was used, an appeal must be taken by at least ten protestants because the Legislature, in another section, required a protest by at least ten persons initially to secure a hearing before the Board.

During the 1953 Recodification, the word 'parties' was changed to 'a party'.The pertinent sentence now reads as follows:

'The Commission's decision shall be final and conclusive unless within 10 days after notice thereof a party to such hearing shall appeal to the Superior Court of the county in which the license would operate.'4 Del.C. § 541(c).

This Court feels that it is clear that the unambiguous change in wording requires a different result than was reached in the Pepper case.Indeed, a reading of Judge Carey's opinion in the Pepper case highlights the reliance he placed on the collective term then used in the statute.The fact that the change in the statute occurred during the General Recodification rather than by a specific amendatory act is of no moment since the Code itself is positive law.Monacelli v. Grimes, 9 Terry 122, 99 A.2d 255(Sup.Ct.1953);1 Del.C. § 103.It seems to this Court that the only permissible interpretation is to preserve the right of these appellants to an appeal.If the General Assembly desires to revert to the law of the Pepper case, simple corrective legislation is easily achieved.The appeal here was properly taken.

A general problem which exists under the statute is the burden of proof in proceedings before the Commission.The grounds for refusal are stated in 4 Del.C. § 543 are just that, grounds for refusal.I am not sure, however, that any general statement can be concluded from the statutory language concerning the burden of proof.In this administrative area, there are simply too many variables, such as the nature of the license being applied for, the varying nature of the grounds for refusal, the discretionary nature of most of the grounds for refusal, and the fact that some grounds for refusal can be relied upon if the Commission 'has reasonable ground to believe' their existence.It does not appear to me that a general standard as to either the production burden or the persuasion burden is particularly helpful and that such statements as do exist in our case law should be examined closely in relation to the immediate problem before the Court.

But some comment can be made in the instant case.The immediate problem before this Court is 4 Del.C. § 543(d) and the location of an establishment in the vicinity of a church.The law states:

'The Commission may refuse to grant a license to sell alcoholic liquor to any establishment located in the vicinity of a church * * * The Commission may issue a license to any establishment located in the vicinity of a church * * * when such establishment has been located in a place prior to the time any church * * * may thereafter be located in the vicinity of such establishment.'

The protestants argue that a fair reading of the statute demands a construction prohibiting the Commission from issuing a license when the church predates the establishment.The statute does not say that and one must conclude, in view of the other language of § 543, that the omission was intended.See alsoStewart v. Delaware Liquor Commission, 6 Terry 363, 74 A.2d 472(Gen.Sess.1950).Thus, the Court declines to adopt the view of the protestants.

But the two sentences do emphasize that one of the prime factors to be considered in balancing the interest of an establishment with a church is which came first.If the church predates the establishment and protests the issuance of the license, as here, the clear burden is placed on the applicant to demonstrate its operation will not interfere with the statutorily recognized interest of the church.

In balancing the respective interests, the Commission must consider this problem as it considers other problems.The grant or refusal of a license is a matter resting within the sound legal discretion of the Commission, having in mind the purpose and intent of the act.Lord v. Delaware Liquor Commission, 2 Terry 154, 17 A.2d 230, 235(Gen.Sess.1940);Caras v. Delaware Liquor Commission, 8 Terry 268, 90 A.2d 492, 494(Super.Ct.1952).Its decision, if based upon proper evidence as set forth in the record and made in the exercise of sound discretion, will not be disturbed.Demarie v. Delaware Alcoholic Beverage Control Commission, 1 Storey 206, 143 A.2d 119, 122--123(Sup.Ct.1958).

This Court can reverse the Commission only if the Commission exercised its power arbitrarily, or committed an error of law, or made findings of fact unsupported by substantial evidence.Whether or not this Court would have reached the same conclusion from this same evidence is of no moment.Stewart v. Delaware Liquor Commission, 6 Terry 363, 74 A.2d 472(Gen.Sess.1950).

Although the statute in § 541(c) permits this Court to take additional testimony, if such additional evidence is necessary, it is clear that the statutory scheme places the initial fact finding duty upon the Commission.Delaware Alcoholic Beverage Control Commission v. Mitchell, Del., 196 A.2d 410, 412(Sup.Ct.1963).An appellate court may not intrude upon the statutory function of the Commission.In addition to the overall statutory scheme, judicial restraint should lead this Court to exercise its power to make factual findings sparingly.Cf.Delaware Racing Association, Del., 213 A.2d 203, 207--208(Sup.Ct.1965);Lank v. Steiner, Del., 224 A.2d 242, 245(Sup.Ct.1966).

There are, however, certain fundamental principles of law in the administrative law area which must be obeyed.An administrative agency with discretionary power must exercise its discretionary power and a failure to exercise its discretionary power is error requiring remand.The record must clearly show the basis on which the administrative agency did act in order that its exercise of discretion may be properly reviewed.Spear v. Blackwell, Inc., Del., 221 A.2d 52(Super.Ct.1966).If the record indicates that the administrative agency made its determination on improper or inadequate grounds, discretion has been abused and reversal upon judicial review is required.2 Am.Jur.2d, Administrative Law, § 671, p. 542, ftnt.11;Securities & Exchange Commission v. Chenery, 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995(1947).The appellate court should not affirm the Commission by supplying entirely different factual grounds for the grant of a license.To do so would propel the Court into the domain which the legislature has set aside for the administrative agency.Delaware Alcoholic Beverage Control Commission v. Mitchell, supra, at 196 A.2d 412;Securities and Exchange Commission v. Chenery, supra.

In this case, we are clearly dealing with a church in the vicinity of the establishment for which the application is made.The difficulty that this Court has with the findings of fact and the application of the law to the facts by the Commission is that the essence of the...