Cook v. Glazer's Wholesale Drug Co. of Arkansas

Decision Date22 October 1945
Docket Number4-7761,4-7746,4-7784,4-7785,4-7786,4-7787
Citation189 S.W.2d 897,209 Ark. 189
PartiesCook, Commissioner of Revenues, v. Glazer's Wholesale Drug Company of Arkansas. Cook, Commissioner of Revenues, v. Lawrence C. Auten, Judge; No. 4-7746. (Consolidated) Otho A. Cook, Commissioner of Revenues, v. Bowles, Marks, Meadows and Price, Nos. 4-7784, 4-7785, 4-7786 and 4-7787
CourtArkansas Supreme Court

Rehearing Denied November 19, 1945.

Appeals from Pulaski Chancery Court; Frank H. Dodge, Chancellor; in Glazer's cases.

Appeals from Pulaski Circuit Court, Second Division, in Bowles, et al., cases; Lawrence C. Auten, Judge.

Commissioner Sustained. Reversed.

Herrn Northcutt, in Glazer's cases, for appellant.

R S. Wilson and O. T. Ward, in Bowles cases, for appellant.

E B. Dillon, Arthur L. Adams and Owens, Ehrman & McHaney, for Glazer's-appellee.

U. A. Gentry, Harrell Harper, Harvey G. Combs, Andrew Henry and D. K. Hawthorne, for appellees Bowles, et al.

Griffin Smith, Chief Justice. Smith, J., dissenting.


Griffin Smith, Chief Justice.

The cases involve a construction of Act 108 of 1935, and question power of the Commissioner of Revenues to withhold or cancel liquor permits.

Glazer's Wholesale Drug Company of Arkansas procured a domestic charter December 20, 1944. Its right to conduct a wholesale liquor business was cancelled April 27, 1945. On appeal to Chancery Court the order of revocation was reversed.

Irrespective of the cancellation order, Glazer's permit expired by operation of law June 30th. The Company, having been informed that renewal would be denied, sought relief both at law and in equity. It procured from Pulaski Circuit Court, Second Division, a writ of certiorari; and that Court, upon hearing, directed that the permit be issued. The Commissioner has appealed. The Commissioner also appealed from the Chancery order reversing cancellation. In the meantime, Glazer's petitioned Pulaski Chancery Court for leave to appeal from the Commissioner's action in refusing to renew the permit. It also sought to enjoin the Commissioner from interfering with its business. The prayer was denied on the ground that at the time of hearing the Circuit Court's jurisdiction had been invoked through the petition for certiorari.

The Commissioner has also appealed from four Circuit Court orders directing that permits be issued to retail liquor dealers whose rights expired June 30th. The cases were consolidated and are docketed as No. 7784, Commissioner v. James Bowles; No. 7785, Commissioner v. A. M. Marks, doing business as G & M Liquor Company; No. 7786, Commissioner v. R. S. Meadows; and No. 7787, Commissioner v. E. A. Price.

Numerous motions, petitions, and procedural transactions, both in Circuit and Chancery Court, are incidental to the final issues, which are:

If a wholesale liquor dealer has been granted a permit to do business in Arkansas, and the Commissioner elects to revoke for cause, what course must the official pursue? (2) When the Commissioner's act of cancellation is tested in the Court having jurisdiction, what proof is required to sustain the Commissioner, and (a) must he state what the reasons are? (3) Do wholesalers and retailers occupy different positions regarding renewal of permits? (4) Does one holding a permit (either wholesale or retail), against whom no accusation of illegal conduct has been made, and who applies for renewal, occupy a preferential status in derogation of one who applies, but who has not formerly held such permit? (a) Stated differently, does the Commissioner's original act in granting a permit and good conduct of the permittee vest any property rights or superior equities that a court will enforce? (5) May the Commissioner's action in refusing to renew either a wholesale or retail permit be controlled by the judicial process?

First. -- Section 13, art. III, of Act 108 of 1935 provides that permits may be revoked for cause. It then enumerates conditions under which they must be. Section 14, Article 3, of the Act, authorizes the Chancery Court for Pulaski County to "review" action of the Commissioner in case of revocation. The second sentence of the section tells how "an appeal" may be taken. Context of the measure as a whole clearly discloses a legislative intent to distinguish between cancellation of a permit, and first issuance, or reissuance.

Before a permit can be revoked a reasonable cause must exist. This, seemingly, was thought to be appropriate because one who engages in the liquor business, either as a wholesaler or a retailer, has the State's assurance (subject to the General Assembly's power to change the law) that the authority to operate shall be coextensive with the permit; hence, the business will not be disturbed unless some conduct of the permit-holder absolves the State. We think the legislature's attempt to vest the Chancery Court with jurisdiction was not in excess of its power. Blum v. Ford, Commissioner of Revenues, 194 Ark. 393, 107 S.W.2d 340. While the petition in that case asked for injunctive relief and the question of jurisdiction was not expressly raised, this Court apparently treated the issue as one properly triable by the Court wherein it originated. In the opinion there is the statement that "Act 108 . . . provided that the dealer may appeal to the Chancery Court, and that is what the appellant did in this case." It was then stated what the Court's duty was -- that is, "to hear the evidence."

The "cause" for which a permit may be revoked at the Commissioner's discretion, as distinguished from the mandatory grounds set out in the Act, must be substantial and have some reasonable relation to the business and the public. This, of course, would exclude arbitrary, capricious, personal, or punitive conduct by the Commissioner. The privileges conditionally extended with the permit cannot be terminated nor abridged at the whim of an administrator who might conclude that his legal sovereignty was such that a merely fanciful cause would suffice. We do not, in the instant case, decide whether the Commissioner erred in issuing his order of April 27th. This is so because his refusal to renew the permit when it expired June 30th terminated the Company's rights. The issue raised in respect of attempted cancellation is not one for which the alleged wrong could be compensated in damages. Under the Chancery Court decree Glazer's continued to operate during the full permit period; and, as a matter of fact, it is still operating under the Circuit Court's mandate. The questions might not be moot if we should adopt the Commissioner's assigned reason for not renewing the permit -- that one whose rights have been cancelled for cause is not eligible to reconsideration for a period of two years. In that event we would determine whether the Chancery Court was correct in finding that no cause existed. Since it was not necessary for the Commissioner to assign a reason for refusing to renew, and since existing rights of Glazer's are referable to the Commissioner's refusal to renew as of July 1, it follows that the April 27th transaction has ceased to be important.

Second. -- Chancery Court does not have jurisdiction to review the Commissioner's action in refusing to issue a permit in the first instance, or in declining to renew an existing permit. In a proper case relief would be available in Circuit Court through writ of certiorari directed to the Commissioner, commanding him to send up any existing records relating to the matters complained of. But inasmuch as reasons within the official knowledge of a Commissioner may exist, and there is no requirement that these reasons be assigned, certiorari would ordinarily be futile. Proof necessary to sustain the official act would be that the application or petition, or request for issuance or reissuance, had been brought to the Commissioner's attention, and that he had acted on it.

As to the retail trade a very broad discretion rests with the Commissioner. He is not required to write a brief in support of the action taken. The law presumes his understanding of the Alcoholic Control Act, its purpose, and its limitations. Section 1, Article III, declares it to be the State's policy that ". . . the number of permits . . . shall be restricted, and the Commissioner of Revenues is hereby empowered to determine whether public convenience and advantage will be promoted by issuing such permits, by increasing or decreasing the number thereof; and in order to further carry out the policy hereinbefore declared the number of permits so issued shall be restricted. The Commissioner of Revenues is further given the discretion to determine the number of permits to be granted in each County of this State or within the corporate limits of any municipality; . . . to determine the location thereof, and the person or persons to whom they shall be issued."

Certainly this language does not indicate a purpose to subject the Commissioner to a judicial inquest at the instance of every person who is denied a permit, or whose permit was not renewed. The Commissioner is given the discretion to determine "the person or persons" who may dispense liquor, and he must have due regard -- not primarily for the desire of a particular individual or a designated corporation, but that public convenience and advantage will be promoted. The only rights given an applicant or petitioner are stated in the Act. He may apply to the Commissioner and he may insist that his request be considered, acted upon, and that he be notified of the result. When that is done mandatory provisions of the law have been complied with, and beyond that realm judicial coercion does not lie.

Third. -- There is nothing in the Act showing a purpose to accord...

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