Claussen v. City of Luverne
| Decision Date | 13 March 1908 |
| Docket Number | 15,340 - (34) |
| Citation | 115 N.W. 643,103 Minn. 491 |
| Parties | PETER CLAUSSEN v. CITY OF LUVERNE |
| Court | Minnesota Supreme Court |
Action in the district court for Rock county to recover $3,440 for the revocation of a liquor license. The defendant demurred to the complaint and the demurrer was sustained and judgment ordered, P. E. Brown, J., in favor of defendant. From the judgment entered pursuant to the order, plaintiff appealed. Affirmed.
Tort of State Officer.
Neither the state, nor any of the subdivisions through which it operates, is liable for torts committed by public officers save in definitely excepted classes of cases. The exemption is based upon the sovereign character of the state and its agencies, and upon the absence of obligation, and not on the ground that no remedy has been provided.
Tort of Municipal Officer.
Municipal corporations will not be held liable in damages for the manner in which they exercise in good faith their discretionary powers of a public, or legislative, or quasi judicial character.
Liquor License -- Police Power.
A license to sell liquor is granted in pursuance of the police power, and not of the taxing power, of the state. Its primary purpose is not revenue, but regulation. It is subject to revocation.
Tort of City Council.
A municipality is not liable in tort for mistaken action of the city council in attempting to revoke a license to sell intoxicating liquors.
A. J Daley, for appellant.
Where a license is wrongfully revoked the licensee is entitled to recover from the municipality such damages as he has actually sustained, even in excess of the license fee paid. Smith v. Major, 8 Oh. Cir. Dec. 649. A city is liable for the lawful acts of its agents done in good faith, but in an unlawful manner. 20 Am. & Eng. Enc. (2d Ed.) 1200, note; Schussler v. Board of Commrs. of Hennepin Co., 67 Minn. 412, 417; Boye v. City of Albert Lea, 74 Minn. 230; Hollman v. City of Platteville, 101 Wis. 94; Township v. Aasen, 8 N.D. 77. It is true that public corporations, "while engaged in the discharge of the duties imposed upon them for the sole benefit of the public, and from the performance of which they derive no compensation or benefit in their corporate capacity, are clothed with the immunities and privileges of the state." Lane v. Minnesota State Agricultural Soc., 62 Minn. 175; Snider v. City of St. Paul, 51 Minn. 466; Gullikson v. McDonald, 62 Minn. 278; 20 Am. & Eng. Enc. (2d Ed.) 1197-8c. But the test seemingly laid down in all cases is: Did the public derive compensation and benefit from the transaction, or not, in their corporate capacity? If not, there is no liability from the wrongful act. On the other hand, if, as in this case, they derived a fee -- compensation and benefit -- out of the transaction as a whole, can there be any question in sound reason that the corporation is liable for the wrongful act of taking away the man's license without legal cause? There would be no doubt about the liability of a private individual upon a similar state of facts. And, unless the legislature has clearly decreed the contrary, the same rule of common honesty should apply to a corporation organized for governmental purposes. Wallace v. City, 4 Greene (Iowa) 373, 374; Speir v. City, 139 N.Y. 6; Stevens v. City, 111 Mich. 72. The granting of a license to sell liquor is not an imperative duty cast upon the municipality by law, like the construction and maintenance of a lock-up or a city hall. The council have the right to sell this privilege for a substantial consideration, or they can refuse it entirely. The granting of a license is strictly for purposes of "private advantage and emolument."
Lerch v. City of Duluth, 88 Minn. 295, is not analogous, because there the revocation of the permit would not authorize any state officer to take any action, while here, on the revocation of the license, if such action remained unreversed on certiorari, the county attorney and sheriff could proceed to prosecute under the statute. Nor was consideration paid for the permit in the Duluth case. In that case the order of the council was wholly void on its face. In this case the order of revocation was duly adopted, was within the general jurisdiction of the council, and was regular on its face, so that the only remedy was certiorari. Necessarily, when the court reversed the order in the certiorari proceedings he held that to be the proper remedy. If the order was void on its face, certiorari would not lie to review the proceedings of the council. Knapp v. Heller, 32 Wis. 497; State v. Mayor, 101 Wis. 208; State v. Schroff, 123 Wis. 98; Anderson v. Timme, 70 Wis. 627.
In this case the only available remedy of the plaintiff was pursued with diligence, but, notwithstanding that fact, a reversal of the council's action was not secured until a few days before the license expired by limitation.
If the governing body of a municipality acts in good faith in regard to a given case of a quasi judicial character for instance, in which they have jurisdiction, not only over the subject-matter generally, but of the particular case in hand as well, it may well be that the corporation is not liable for any damages suffered by individuals because of their acts; but it does not for that reason by any means follow that the corporation is not liable in a case where, as in the instant case, its governing body within whose jurisdiction the subject-matter under consideration rests acts mistakenly in the exercise of, and in excess of, its powers and without having obtained jurisdiction over the person of the individual to whose detriment and against whom the given action is had, to the payment of such damages as the individual can show that he suffered by reason of their quasi judicial acts. The contention of the appellant is that there is a clear distinction in principle between the two cases, and, furthermore, the instant case is distinguishable because of the fact that the action related to something -- a quasi contract -- for which the appellant had paid the city a substantial consideration.
The case of Lane v. Minnesota State Agricultural Soc., 62 Minn. 175, is not analogous to this case. That contains language tending strongly to support appellant's contention. It is only while public officials are engaged in the "discharge of the duties imposed upon them for the sole benefit of the public, and from the performance of which they derive no compensation or benefit in their corporate capacity," that they are "clothed with the immunities and privileges of the state." It seems clear that a liquor license comes within the exception, as no one can successfully deny that the city in its corporate capacity derives compensation and benefit from the issuance of the license. If $1,250 is not compensation or benefit, how large a sum would it take to permit dignifying it by either of those names? But it is evidently the claim of the respondent that the revocation of the license is an independent act having no relation to its issuance. This, of course, is an easy way of disposing of a troublesome fact, but it will hardly bear the application of common sense.
Jay A. Kennicott, for respondent.
The following facts are admitted by demurrer to the complaint herein: The city of Luverne, defendant and respondent, issued a license for the sale of intoxicating liquors to the plaintiff and appellant on the payment by him of $1,250. The license according to its terms terminated on May 1, 1906. On December 8, 1905, the common council of the defendant, acting mistakenly and in excess of its powers, but not maliciously, revoked the license. Thereupon plaintiff closed his place of business, which remained closed for the rest of the license year. On February 19, 1906, plaintiff sued out certiorari. The district court set aside the action of the council on April 25, 1906. As the result plaintiff was deprived by defendant of his license for a period of over four and one half months. Thereupon plaintiff began this action in tort to recover general and special damages from the defendant. From an order sustaining a demurrer to the complaint on the ground that it did not state facts sufficient to constitute a cause of action, this appeal was taken.
It is elementary that neither the state nor any of the subdivisions, like a municipality, through which it operates is liable for torts committed by public officers, save in definitely excepted classes of cases. The exemption is based upon the sovereign character of the state and its agencies, and upon the absence of obligation, and not on the ground that no means for remedy have been provided. "The government," said Mr. Justice Story, "does not undertake to guarantee to any person the fidelity of the officers or agents whom it employs, since that would involve it in all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest." U.S. v. Kirkpatrick, 9 Wheat. 720, 6 L.Ed....
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