Hazel Park Racing Ass'n v. Inglis

• Decision Date: 04 May 1953
• Docket Number: No. 428,428
• Citation: 336 Mich. 508,58 N.W.2d 241
• Parties: HAZEL PARK RACING ASS'N, Inc. v. INGLIS. Motion
• Court: Michigan Supreme Court

Page 241

58 N.W.2d 241

336 Mich. 508

HAZEL PARK RACING ASS'N, Inc. v. INGLIS.

Motion No. 428.

Supreme Court of Michigan.

May 4, 1953.

Stanley E. Beattie, Detroit, John R. Monaghan, Detroit, for petitioner.

Frank G. Millard, Atty. Gen., Edmund E. Shepherd, Sol. Gen., Lansing, Daniel J. O'Hara and Charles M. A. Martin, Asst. Attys. Gen., for defendant.

Before the Entire Bench.

CARR, Justice.

Plaintiff herein is a Michigan corporation organized in 1949 and having among its corporate purposes the purchasing, selling and leasing of real estate for the corporation's use, and the exhibiting and racing of horses. It owns a track located in the city of Hazel Park, Oakland county, on which it conducted racing meets during the years 1949 to 1952 inclusive. It holds a track license from the State, issued to it in accordance with pertinent statutory provisions. Under date of December 23, 1952, it made application to the defendant, the racing commissioner of the State, for a license to conduct a racing meet at the track during the 1953 season, specifically covering dates commencing August 6th to and including October 10th. The record discloses that defendant did not make any formal written order denying the application but indicated that it would not be acceptable unless and until there was compliance with certain conditions hereinafter mentioned.

The defendant racing commissioner is subject in the administration of his duties to the provisions of P.A.1933, No. 199, C.L.1948, § 431.1 et seq., Stat.Ann. & Stat.Ann.1951 Coum.Supp. § 18.941 et seq. Attention is also directed to P.A.1952, No. 197, regulating procedure by and before State administrative agencies. C.L.1948, § 431.9, Stat.Ann.1951 Cum.Supp. § 18.949, provides in part as follows:

'Any person or persons desiring to conduct a racing meet within the state of Michigan, shall apply to the commissioner for a license to do so. Such application shall be filed with the secretary of the commission at least 10 days prior to the first day of each horse-racing meeting, which such person or persons propose to hold or conduct. Such application shall specify the day or days on which such racing is desired to be conducted or held, and such application shall be in such form and supply such data and information as the commissioner shall prescribe. The commissioner shall have the power to reject any application for a racing meet license for any cause which he may deem sufficient, which rejection may be appealed to the circuit and supreme court.'

Plaintiff seeks to compel defendant, by writ of mandamus, to issue the license for which it has applied. It alleges in its petition that it has outstanding 1,374,970 shares of common capital stock, the ownership of which is divided among 490 persons residing in various parts of this country and in Canada. It does not appear that its financial operations are in question, or that any criticism has been made with reference thereto. Following the submission of the application for the license conferences or discussions were had between defendant and representatives of the plaintiff, and also an interchange of correspondence. In answer to the application defendant stated, in a letter to plaintiff bearing date February 20, 1953, that the days sought to be covered by the license had been tentatively allocated by subject to confirmation 'only after all requirements contained in the attached report have been fulfilled in addition to such other requirements as may be laid down in the course of our continuing negotiations.' Accompanying the letter was a copy of a report made by defendant to the Governor of the State, in which the following statement appears:

'The Hazel Park application was denied by me on February 9, 1953, on the ground that several sizeable blocks of stock in the association were held by persons who through family relationships or adverse police records were unacceptable to the Racing Commission as part owners of a licensed racing association.'

As before noted, defendant did not make a formal written order but the record fully justifies the conclusion that he repeatedly indicated to plaintiff that its application would not be given favorable consideration unless certain designated shareholders, referred to in general terms in the excerpt above quoted from the report to the Governor, divested themselves of ownership of their stock, and that pending sale thereof such shareholders should relinquish their voting rights to a voting trust. The amount of stock held by such shareholders is, it is claimed, not in excess of 200,000 shares. There is no showing as to how many of the persons that defendant insisted should dispose of their interests in the plaintiff corporation actually had adverse police records, nor as to the number that were unacceptable to defendant because of family relationships. Neither is it claimed on behalf of defendant that any of such stockholders are now participating in any way in criminal activities.

Obviously the statute defining the powers and duties of the defendant with reference to the issuance of licenses may not be construed as vesting in him arbitrary authority to reject an application. The fact that an order made by him is specifically declared subject to judicial review is conclusive in this respect. An attempt to vest absolute and final authority might well be challenged on constitutional grounds. It is defendant's position, as appears from his answer and the return to the order to show cause issued by this Court, that he is vested with discretion and that the exercise thereof should not be subject to judicial interference or control, unless it appears that the act, or refusal to act, that is in question was not a proper exercise of powers granted by the statute and was in consequence unwarranted.

Emphasis is placed on the duty of the defendant to perform the functions of his office for the benefit of the public, and it is argued in his behalf that he may properly refuse to grant a license of the character involved in the instant case if the public interest would thereby be harmed or jeopardized. However, no attempt has been made here to point out how any such result may follow from the granting of the license sought by plaintiff without compliance with the imposed conditions. As before noted, plaintiff conducted racing meets for the past four years under licenses granted to it. It is not claimed that the public was harmed as a result of such operations. Neither is it claimed that the stockholders, or any of them, referred to in the conditions of acceptance of the application for the 1953 season as imposed by defendant, are active in the management of the corporation or that they, or any of them, are directing its policies and activities. The right of defendant to decline to grant a license where reasonable and proper grounds appear therefor is not an issue in this case. Rather the situation is that defendant by refusing to grant the license unless the conditions imposed by him are performed seeks to require plaintiff to bring about a situation that it has no power to compel. It is claimed, and not disputed, that plaintiff has sought to persuade the stockholders in question, or at least some of them, to dispose of their stock, and that such efforts have met with refusals. Plaintiff corporation, which is not itself accused of improper conduct of any kind inimical to the welfare of the people of this State, cannot compel the minority stockholders in question to dispose of their property. Under these circumstances it must be said that the statute under which defendant is functioning does not authorize him to...