O'Banion v. State ex rel. Shively

• Decision Date: 31 December 1969
• Docket Number: No. 768,No. 1,768,1
• Citation: 146 Ind.App. 223,253 N.E.2d 739
• Parties: Milton S. O'BANION and Henry S. Kelly, Appellants, v. STATE of Indiana on the relation of Susie SHIVELY, Finis Shively, William High and Mary High, Appellees. A 120
• Court: Indiana Appellate Court

Page 739

253 N.E.2d 739

146 Ind.App. 223

Milton S. O'BANION and Henry S. Kelly, Appellants, v. STATE of Indiana on the relation of Susie SHIVELY, Finis

Shively, William High and Mary High, Appellees.

No. 768 A 120.

Appellate Court of Indiana, Division No. 1.

Dec. 31, 1969.

Rehearing Denied Jan. 26, 1970.

John O. Moss and Mercer M. Mance, Indianapolis, for appellants.

Nelson G. Grills, Indianapolis, for appellees.

SULLIVAN, Judge.

This action was brought by appellees for a permanent injunction restraining appellants, Milton S. O'Banion and Henry S. Kelly, from selling alcoholic beverages, including packaged wines and liquor and refrigerated beer, until they have obtained from the Marion County Board of Zoning Appeals the authority to engage in such business. Appellees also sought to perpetually enjoin these activities until the appellants obtained from the Indiana Alcoholic Beverage Commission a like legal permit to so operate.

Appellant Kelly leases a building located at 3402 Clifton Street from appellant O'Banion. The Shivelys are taxpayers and owners of property located at 1057 W. 34th Street and the Highs are taxpayers and owners of property located at 1068 W. 34th Street, both of which properties are located across Clifton Street from the appellants' property in Indianapolis, Marion County, Indiana. Kelly, as lessee operated a package liquor store selling all kinds of beverages, including the sale of refrigerated beer. All parties admit that the sale of warm beer was pursued on the premises of 3402 Clifton Street prior to June 11, 1954.

The Common Council of the City of Indianapolis passed General Ordinance 64--1954, effective June 11, 1954, hereinafter referred to as the Permissive Use Ordinance, which restricted the uses in a class U--3 business district. The ordinance provided that a building in such class or district might be used in whole or in part as a tavern, restaurant, tea room, cafe, cocktail lounge, club-room or stand or store where beer, wine or liquors were sold in packages or served in alcoholic beverages, if the authority for such use was obtained after petitioning the Board of Zoning Appeals and after public notice and hearing, if the Board found that such use would substantially serve the public convenience and welfare, and would not substantially or permanently injure the appropriate use of neighboring property. Neither O'Banion, Kelly, nor any other person has petitioned or obtained from the Board of Zoning Appeals the authority to sell alcoholic beverages at the permises located at 3402 Clifton Street.

Kelly, prior to the time of opening and operating a package liquor store at 3402 Clifton, operated a similar package liquor store at another location in the city of Indianapolis. The permit for the operation of such other store would have expired on April 28, 1966. On February 19, 1966. however, when the permit had less than three months of unexpired term, Kelly made application to transfer the permit to the property located at 3402 Clifton Street. The Indiana State Alcoholic Beverage Commission granted the application to transfer and a license to operate a package liquor store at 3402 Clifton Street was issued. This permit was renewed one year later for a period extending from April 28, 1967 until after the time of the trial court's judgment.

The trial court stated the following conclusions of law:

'1. Stands or stores where beer, wine or liquors are sold in packages or sold in alcoholic beverages is a use which cannot be legally made of a building or structure without first obtaining a finding by the Board of Zoning Appeals of the Metropolitan Plan Commission of Marion County that such use will serve the public convenience and welfare and will not substantially or permanently injure the appropriate use of neighboring property. The failure of the defendants to obtain such approval makes the operation of a package liquor store selling alcoholic beverages at 3402 Clifton Street in the City of Indianapolis, Marion County, Indiana, an operation contrary to law.

'2. The transfer of an alcoholic beverage permit from one location to another location may not be made in case such permit has less than three months of unexpired term and the transfer of the alcoholic beverage permit of defendant, Henry S. Kelly, to the location at 3402 Clifton Street, Indianapolis, Marion County, Indiana was a transfer contrary to law.

'3. The sale of alcoholic beverages from the premises at 3402 Clifton Street until a transfer in accordance with the law has been accomplished, and until authority from the Board of Zoning Appeals of the Metropolitan Plan Commission of Marion County has been obtained is a common nuisance.

'4. The plaintiffs as taxpayers of Marion County by maintaining an action in the State of Indiana to abate the nuisance of selling alcoholic beverages at 3402 Clifton Street in the City of Indianapolis, Marion County, State of Indiana are entitled to a judgment restraining the defendants, Henry S. Kelly and Milton S. O'Banion from selling alcoholic beverages at the property located at 3402 Clifton Street, Indianapolis, Indiana until authority for such action has been obtained from the Board of Zoning Appeals of the Metropolitan Plan Commission of Marion County and until the package liquor store permit of Henry S. Kelly has been legally transferred to said location.'

Appellants contend that we should reverse the judgment of the trial court because: (1) the trial court lacked jurisdiction of the subject matter, and therefore, erred in overruling appellants' motion to dismiss; (2) the Permissive Use Ordinance, being General Ordinance 64--1954, of The City of Indianapolis is invalid; (3) a valid non-conforming use attached to the real estate prior to the effective date of the ordinance; and (4) the court made special findings of fact and conclusions of law without indicating the intent to do so before the conclusion of the evidence.

THE TRIAL COURT HAD JURISDICTION OF THE SUBJECT MATTER

Appellants contend that the trial court had no jurisdiction of the subject matter because concerning the issuance, suspension or revocation of a retail dealer's liquor, wine, beer and malt beverage permit, the legislature has placed absolute and exclusive discretion in the Alcoholic BeverageCommission. Appellants rely in this regard upon Indiana Acts 1945, ch. 357, § 11, as amended and as found in Indiana Annotated Statutes § 12--443 (Burns Repl.1956), which provides:

'(b) All liquor retailer's permits, liquor dealer's permits, wine retailer's permits, wine dealer's permits, malt beverage retailer's permits and malt beverage dealer's permits shall be issued, suspended or revoked in the absolute discretion and judgment of the commission. No court shall have jurisdiction of any action, either at law or in equity, to compel the issuance of any such permit, or to revoke, annul, suspend or enjoin any action, ruling, finding or order of the commission suspending or revoking any such permit, and the consent of the sovereign state of Indiana is hereby expressly withdrawn and denied in any such action, either at law in equity.'

This contention was presented below by way of a moton to dismiss. It is well-established that lack of jurisdiction of the subject matter in such situation is properly presented by demurrer, not by motion to dismiss. Indiana Acts 1881 (Spec.Sess.), ch. 38, § 85, as amended and as found in Indiana Annotated Statutes § 2--1007 (Burns Repl.1967); Board of Commissioners of Elkhart Co. v. Murray (1936), 210 Ind. 186, 1 N.E.2d 932; Huffman v. Newlee (1919), 189 Ind. 14, 124 N.E. 731; Minor v. Sumner (1923), 80 Ind.App. 269, 140 N.E. 580. The lower court's ruling on said motion to dismiss was therefore proper. Since, however, Indiana Acts 1881 (Spec.Sess.), ch. 38, § 89, as amended and as found in Indiana Annotated Statutes § 2--1011 (Burns Repl.1967), indicates that jurisdiction of the subject matter can be raised for the first time on appeal we now address ourselves to that contention. ¹

For several reasons we find that the trial court had jurisdiction of the subject matter. The primary basis for the action below is not the illegal grant or revocation of a permit. Rather it is the illegal use of real property. Appellees did not object to the possession by Kelly of a permit to operate a package liquor store. They only object to the use of the premises at 3402 Clifton in a manner not contemplated or authorized by the zoning laws and they ask that the appellant be restrained from such activity until he has obtained proper authority from the Metropolitan Board of Zoning Appeals as required by the Indianapolis Permissive Use Ordinance, being General Ordinance 64--1954. The argument that Ind.Ann.Stat. § 12--443 might jurisdictionally preclude a trial court's determination that an alcoholic beverage commission permit transfer is invalid if made within three months of its expiration date is inconsequential because the trial court here clearly did have jurisdiction to determine whether the use of the property was contrary to law because of the zoning ordinance violation. ²

In addition, the Alcoholic Beverage Act specifically grants authority for taxpayers to bring an action in the name of the State of Indiana to abate and perpetually enjoin any nuisance defined in the act. A portion of said Act, being Indiana Acts 1935, ch. 226, § 37, as found in Indiana Annotated Statutes § 12--705 (Burns Repl.1956), provides:

'* * * any taxpayer of the county, may maintain an action in the name of the state of Indiana to abate and perpetually enjoin * * * any nuisance as defined in this act. * * * The court shall also have jurisdiction to enjoin permanently or by restraining order or temporary injunction the continuance of said unlawful conduct or practice or nuisance complained of. * * *'

Nuisance is defined by § 36 of said Act, being Indiana Annotated Statutes § 12--704 (Burns Repl.1956), as follows:

'Any...