Chambers v. Herrick, 38508

• Decision Date: 08 March 1952
• Docket Number: No. 38508,38508
• Parties: CHAMBERS v. HERRICK.
• Court: Kansas Supreme Court

Page 748

241 P.2d 748

172 Kan. 510

CHAMBERS v. HERRICK.

No. 38508.

Supreme Court of Kansas.

March 8, 1952.

Rehearing Denied April 18, 1952.

Syllabus by the Court

1. The fact that a retail liquor license has by its own terms expired during the period of time necessarily required for a litigant to perfect and present an appeal to this court in litigation involving the revocation of such license, does not render the question moot.

2. A hearing conducted by the State Alcoholic Beverage Control Board of Review (G.S.1949, 41-203) is not illegal on the ground that only two of its three members sat.

3. The State Director of Alcoholic Beverage Control is authorized and empowered to adopt and promulgate such rules and regulations as shall be necessary to carry out the intent and purposes of the Liquor Control Act. In the exercise of this authority the Director is clothed with broad discretionary powers to govern all phases of the traffic in alcoholic liquor. All valid rules and regulations so adopted and promulgated are binding upon all licensees and are enforceable by the Director through the power of suspension or cancellation of licenses. G.S.1949, 41-209 and 41-210.

4. A rule and regulation so adopted and promulgated which provides that 'Licensees are at all times responsible for the conduct of their business and are at all times directly responsible for any act or conduct of any employee on the premises, which is in violation of the act or the rules and regulations of the director.' is not unreasonable, arbitrary or capricious, and is not in contravention of the Act, but is founded upon grounds of sound public policy and is necessary in order to carry out the intent and purposes of the Act.

5. Under such a rule and regulation as that set out in the foregoing paragraph of this syllabus a retail liquor license is subject to suspension or cancellation by the Director even though the act of the employee constituting the violation is done without the authorization, knowledge or approval of the licensee.

6. In an appeal from a judgment reinstating a retail liquor license which had been revoked by the Director and the Board of Review, the record is examined and it is held: For the reasons and on the grounds set out in the opinion the judgment of the lower court was erroneous.

Clay C. Carper, of Topeka, argued the cause and was on the briefs for appellant.

W. D. Jochems, of Wichita, argued the cause, and T. A. Sullivan and R. E. Angle, both of Wichita, were with him on the briefs for appellee.

PRICE, Justice.

This is an appeal by the Director of Alcoholic Beverage Control from a judgment of the district court reversing and setting aside an order of the Director revoking a retail license, and from other rulings made by the court in connection with the judgment.

On August 30, 1949, appellee (hereinafter referred to as the licensee) was issued a retail liquor license for the premises located at 219 East Murdock Street in the City of Wichita. The license was renewed on August 30, 1950, for the term of one year.

On October 11, 1950, the licensee was cited to appear before the Director for the alleged violation of certain provisions of the Kansas Liquor Control Act, G.S.1949, 41-101 et seq., and certain rules and regulations promulgated by the Director.

The evidence at the hearing before the Director established the following:

The licensee became ill in April, 1950, and was taken to the hospital where she was confined until the latter part of July of that year. During this period her husand was in complete charge of and operated and managed her retail liquor store. She gave him authority to make purchases of and to sell alcoholic liquors, and in general to do all things necessary for the conduct of the business. His authority existed during the month of September inasmuch as she was still under medical care and confined to her home for six or eight weeks following her release from the hospital. She was at home on Sunday afternoon, September 3rd, and on that occasion she and her husband entertained friends of the latter by the name of Barnett. In view of our decision in this case we consider it unnecessary to detail the testimony concerning her knowledge as to the identity of the Barnetts or the purpose of their being at the residence of licensee. It should be stated, however, that she denied any knowledge of wrongdoing on the part of her husband on that particular occasion, or at any time prior thereto, concerning any violation of law or rules and regulations pertaining to the operation of her retail liquor store.

One Winters, an investigator working out of the Director's office, testified that on September 1, 1950, he, in company with three alcohol tax agent, observed several cases of alcoholic liquor being loaded into an Oklahoma automobile at the liquor store, and that during the ensuing conversation between the husband of licensee and the officers the former admitted that he had sold the driver of the Oklahoma car fourteen cases of alcoholic liquor.

One Rennolds, a special investigator of the Federal Alcohol Tax Unit, testified that on September 1st he saw Barnett (above referred to), an alleged Oklahoma bootlegger, drive to the alley in the rear of the store and observed licensee's husband and Barnett loading cases of whiskey into the latter's car; that he later stopped the car and, in company with two other officers, found that it contained seven cases of whiskey.

He further testified that on Sunday, Sepember 3rd, he saw the husband of licensee talking to Barnett at a named location in the city of Wichita and followed them to the residence of licensee and her husband, at which place the husband and Barnett each drove his car into the double garage, following which they both went into the residence by the back way. That he observed what appeared to be whiskey cases transferred from the husband's car to the Barnett car; that later, at the corner of Lincoln and Broadway, in Wichita, he stopped the Barnett car and discovered that it contained five cases of alcoholic liquor, identified by brand names. The serial numbers on the cases had been removed. Later, in the presence of this witness, the husband admitted that he had sold Barnett sixteen cases of whiskey.

The evidence discloses that none of the alleged alcoholic liquor so sold and delivered was seized by the officers or introduced in evidence, and neither is there any direct evidece that the licensee knew of the sales, transfers or deliveries in question.

The Director found that the licensee had violated section 24 of the Act, G.S.1949, 41-308, which prohibits the sale and delivery of alcoholic liquor by a retail licensee from any premises other than those specified in the license, and prohibits the sale and delivery of alcoholic liquor by such retail licensee for resale in any form; that the licensee had violated section 75 of the Act, G.S.1949, 41-712, which prohibits the retail sale of alcoholic liquor on Sunday; and that she had violated Rule 14-3-8 of the rules and regulations promulgated by the Director, which prohibits a retail licensee from engaging, directly or indirectly, in any conspiracy, transaction or agreement having as its object the sale or resale away from or off the licensed premises, and the sale or delivery of any alcoholic liquor to any person with knowledge, or with reasonable cause to believe, that the purchaser is acquiring the same for the purpose of resale. He further found that the licensee had violated Rules 14-3-6 and 14-3-7, but as they are not set out in the abstract or briefs such finding cannot be considered.

Pursuant to the above findings the license was revoked.

The licensee appealed to the State Alcoholic Beverage Control Board of Review. That body, with two of its three members sitting, sustained and approved the findings and order of the Director in revoking the license.

The licensee then appealed to the district court. The transcript of the proceedings before the Director was introduced in evidence, G.S.1949, 41-323, and it also appears the Director introduced some additional evidence. It does not appear that the licensee introduced any evidence in the district court.

At the conclusion of the hearing in the court below judgment was rendered in favor of the licensee upon all issues, and the journal entry of judgment recites in substance the following findings:

That only two members of the Board of Review were present at the hearing and therefore such hearing was illegal for the reason the statute provides such board shall consist of three members; that Rule 14-2-6 of the rules and regulations promulgated by the Director is contrary to the Act, is unreasonable, arbitrary and capricious, and therefore unconstitutional; that there was no evidence whatever that any alcoholic liquor was sold or delivered off of the licensed premises in that such evidence as was introduced was speculative and insufficient to convince the court that the packages so delivered contained alcoholic liquor; that there was no evidence that any alcoholic liquor was sold or delivered from the residence of the licensee on Sunday, September 3, 1950, in that such evidence was insufficient to convince the court that the packages referred to in the testimony contained alcoholic liquors, and that no competent evidence was introduced showing any violation of the rules and regulations promulgated by the Director.

The judgment then contains a recital setting aside and holding for naught the order of the Director, as approved by the Board of Review, and orders that the license be reinstated as though no charges had ever been filed against the licensee.

From such findings, orders and judgment the Director has appealed to this court.

Before considering the merits of this appeal we are confronted with the licensee's motion to dismiss it on the ground that as the license under consideration has now, by its own terms, expired, any question...