Kehr v. Garrett, 35628

• Decision Date: 09 July 1974
• Docket Number: No. 35628,35628
• Parties: Laura Louise KEHR, Plaintiff-Respondent, v. Michael D. GARRETT, Supervisor of Liquor Control, Defendant-Appellant. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 186

512 S.W.2d 186

Laura Louise KEHR, Plaintiff-Respondent, v. Michael D. GARRETT, Supervisor of Liquor Control, Defendant-Appellant.

No. 35628.

Missouri Court of Appeals, St. Louis District, Division One.

July 9, 1974.

John C. Danforth, Atty. Gen., William G. Cole, Andrew Rothschild, Asst. Attys. Gen., Jefferson City, for defendant-appellant.

Dewey S. Godfrey, Jr., St. Louis, for plaintiff-respondent.

SIMEONE, Judge.

The respondent Laura Louise Kehr made application to Michael D. Garrett, State Supervisor of Liquor Control, for a retail liquor-by-the-drink license which was denied on the ground that she failed to maintain the good moral character required by law. Mrs. Kehr filed an application for review in the circuit court of the City of St. Louis which reversed the decision of the supervisor on the ground that his decision was 'arbitrary and unreasonable.' The supervisor appeals the judgment. We affirm.

I.

The facts which are not in dispute are derived solely from the transcript of the Circuit Court and the Supervisor's file transmitted in accordance with § 311.700(2). The facts show that on March 20, 1973, Laura Louise Kehr purchased from one Ann Casey, after her husband's death, a 'tavern business,' located at '2225 Pestalozi (sic)' in the City of St. Louis, Missouri and known as 'Sue's Place.'

On April 20, 1973, Mrs. Kehr made application for a 'Retail Liquor By The Drink' license. She tendered the appropriate fee and bond. The application contained numerous questions which were completed by the applicant. Among them were the following:

'Have you ever been arrested or indicted for the violation of any Federal law, law of the State of Missouri, or of any other state? Yes. If so, given details. Arrested (sic) dismissed.'

In response to questions relating to whether she or any member of her household or immediate family or any employee had ever been convicted of any Federal law or law of any state or any violation of 'any ordinance of any city' relating to intoxicating liquor, Mrs. Kehr answered that she had not.

The application was investigated by the District III (St. Louis) office. An interoffice memorandum, dated June 1, 1973, from Mr. Walter J. Murphy, the Supervisor of the District, directed to the Supervisor of Liquor Control informed the Supervisor that 'I have withheld my recommendation from (Mrs. Kehr's ) application because I feel that she fails to qualify as a person of good moral character.'

He referred to a summary of the arrest record of the St. Louis Police Department dated April 11, 1973, which reflected, he stated, five charges against her 'for treatment at the Health Clinic for suspected prostitution.' He also referred to several police department reports relating to Mrs. Kehr.

The Police Department's Record of Arrest, upon which the District Supervisor and the Supervisor relied showed that Mrs. Kehr, under her maiden or other names, had been arrested in 1962 for 'Inv. Susp. Prost.,' ¹ and referred to a clinic. The records also show that she was arrested in 1953 and referred to a clinic. ²

On June 6, 1973, the Supervisor by letter informed Mrs. Kehr that 'as a result of my examination, and the investigation conducted by our District III Office, that you (sic) applications must be denied. Our investigation reveals that you have been arrested on five (sic) separate occasions for suspected prostitution in the City of St. Louis, and have been referred numerous times for (to?) the Health Department venereal clinic. Several of the arrests referred to above were affected (sic) in the immediate vicinity of various licensed establishments in the City of St. Louis.' Since Missouri law requires that no person be granted a license unless the applicant is of good moral character and in view of 'your numerous arrests for prostitution activities . . . I have determined that you have failed to maintain the good moral character required by the (statute) and I am therefore compelled to deny you application for a retail liquor by the drink license.'

Thereafter on June 11, 1973, Mrs. Kehr filed her application for review of the Supervisor's order and the cause was heard by the Circuit Court of the City of St. Louis. On June 28, 1973, the matter was heard and on July 31, 1973, the court entered its judgment reversing the decision of the Supervisor of Liquor Control finding that the decision was 'arbitrary and unreasonable.' The supervisor appealed.

On this appeal, the Supervisor contends that the circuit court erred in reversing his decision because (1) the court exceeded its authorized scope of review and (2) the court erred in finding that the supervisor's decision was 'arbitrary and unreasonable.' He argues under Point I that the Circuit Court is limited in its scope of review and may reverse or modify the supervisor's decision in a matter which does not require a hearing only when such decision is 'not authorized by law'. He interprets this to mean that if the supervisor complies with statutory requirements of the Liquor Control Act, his decision is not reviewable by the judiciary. He also argues that under our statutes, the supervisor has the exclusive power to determine the merits of a liquor license application.

The respondent, on the other hand, contends that the circuit court did not err because the decision was within the scope of judicial review.

As we view the issues raised by the parties they are twofold:

(1) Is judicial review applicable to a decision made by the Supervisor of Liquor Control denying an application for an original or renewal license or does exclusive power rest in the supervisor to grant or deny a license, and if judicial review is applicable, what standards are to be applied for such review, and (2) If judicial review is applicable, was the decision of the supervisor to deny the license to Mrs. Kehr 'arbitrary and unreasonable.'

II.

We start with the proposition that the liquor business stands on a different plane than other commercial operations. It is placed under the ban of the law and is differentiated from all other occupations, and no person has the natural or inherent right to engage therein. Those who engage in the business of liquor have no legal rights save those expressly granted by license and the statute. The state may impose such conditions, burdens and regulations as it may deem wise and proper. In the eyes of the law the liquor business stands on a different plane from other pursuits and is separated or removed from the natural rights, privileges and immunities of the ordinary citizen. Steamers Service Company, Inc. v. Wright, 505 S.W.2d 65, 68 (Mo.1974); Peppermint Lounge, Inc. v. Wright, 498 S.W.2d 749, 752 (Mo.1973); Pinzino v. Supervisor of Liquor Control, 334 S.W.2d 20 (Mo.1960); State v. Wipke, 345 Mo. 283, 133 S.W.2d 354, 359 (banc 1939).

The general assembly has established a comprehensive code relating to the regulation of liquor--the 'Liquor Control Law', §§ 311.010--311.880, RSMo, V.A.M.S. Section 311.090 provides that any person who possesses the qualifications may apply for and the supervisor of liquor control may issue a license to sell liquor by the drink. Section 311.060 provides that '1. No person shall be granted a license hereunder unless such person is of good moral character and a qualified legal voter and a taxpaying citizen of the county, town, city or village . . . and no person shall be granted a license . . . who has been convicted . . . of a violation of the provisions of any law applicable to the . . . sale of intoxicating liquor . . .' Section 311.210 provides that all applications for all licenses shall be made to the supervisor who shall have the power and duty to determine whether the application shall be approved or disapproved. Upon disapproval of any application the supervisor shall so notify the applicant in writing setting forth therein the grounds and reasons for disapproval and shall return the applicant's remittance.

The supervisor of Liquor Control under our statutes which were first adopted in 1934 has the exclusive authority to determine the issuance of licenses for the retail sale of intoxicating liquor. 'The exclusive authority to determine such issues and to issue such licenses for the retail sale of intoxicating liquor . . . is now vested in the State Supervisor of Liquor Control.' State ex rel. Floyd v. Philpot, 364 Mo. 735, 266 S.W.2d 704, 710 (banc 1954). Prior to the passage of the Liquor Control Law the authority rested in other bodies. And at one time in our history the decision of the Supervisor was final and the statutes did not allow any appeal. State ex rel. Renner v. Noel, 346 Mo. 286, 140 S.W.2d 57, 58 (banc 1940).

However, in 1945, at the time Missouri adopted its new Constitution containing Article V, § 22, V.A.M.S., relating to judicial review of administrative agencies, the General Assembly adopted § 311.700, which provided, '2. Any party to the proceedings who is aggrieved by any final decision . . . of the supervisor may file . . . his application for a review within fifteen days after notice of such decision. . . . The reviewing court may affirm the decision of the sepervisor of may reverse or modify it when such decision is not authorized by law and, in cases in which a hearing is required by law, when such decision is not supported by competent substantial evidence on the whole record.' (Emphasis added).

By this statute, the general assembly provided for judicial review of decisions of the Supervisor. The provisions of the Administrative Procedure and Review Act, § 536.010--536.150 (Rule 100) are not applicable to judicial review of a decision of the supervisor. 'Section 311.700 of that Law prescribes the method of review for any party aggrieved by a final order of the supervisor under that Law. That method of review is the sole and only remedy available to the licensee for review of the supervisor's order. . . . It is exclusive, mandatory and jurisdictional....