Klipsch v. Indiana Alcoholic Beverage Com'n
| Decision Date | 29 June 1939 |
| Docket Number | 27231. |
| Citation | 21 N.E.2d 701,215 Ind. 616 |
| Parties | KLIPSCH v. INDIANA ALCOHOLIC BEVERAGE COMMISSION et al. |
| Court | Indiana Supreme Court |
As Modified Aug. 1, 1939.
Leo J. Stemle, of Jasper, for appellant.
Carl M. Gray, of Indianapolis, for appellees.
This is an appeal from a judgment of the general term of the Marion Superior Court by which judgment the Indiana Alcoholic Beverage Commission was sustained in its refusal to grant a permit to the appellant, Omer Klipsch, to engage in business as a beer wholesaler at Petersburg, Indiana. Appellant's motion for new trial containing three alleged grounds was overruled and this appeal followed, the error assigned being the overruling of said motion.
The power of the commission to exercise discretion in the granting or refusing to grant such a permit to an applicant who complies with the specific requirements of the Alcoholic Beverage Act (Acts of 1935, ch. 226, p. 1956) as finally amended in 1939 (Acts of 1939, ch. 30, p. 79) is the only question presented by appellant's brief.
Section 2 of said 1939 Act, supra, provides that:
'No wholesaler's permit shall be granted to an applicant therefor unless:
'1. Such applicant shall be a bona fide resident of the State of Indiana and shall continue to be such resident while said wholesaler's permit is in force.
'2. Such applicant shall have available for investment, capital in cash or property, necessary and useful in his business exclusively as a wholesaler, of at least seven thousand five hundred dollars, exclusive of motor vehicles, and if his application be granted, such investment shall actually be made and proof thereof submitted to the commission, before such applicant shall engage in business as a wholesaler under his permit.
'3. Such applicant shall not have been convicted of a felony under the laws of Indiana or of the United States within two (2) years preceding the date of filing his application, and shall be of good reputation for morality and business integrity.
'4. Such applicant shall have no interest in any permit to manufacture, or to sell at retail, alcoholic beverages of any kind, or in any other permit to wholesale alcoholic beverages, and shall have no interest, direct or indirect through stock ownership or otherwise, in any partnership or corporation holding a permit to manufacture, or to sell at retail, alcoholic beverages of any kind, or holding any other permit to wholesale alcoholic beverages of any kind.
'5. If such applicant be a partnership or unincorporated association, all members of such partnership or persons interested in such association shall possess the qualifications herein required of an individual applicant.
'6. If such applicant be a corporation, the stockholders thereof shall all be citizens of the State of Indiana and at least one of such stockholders shall be a resident for at least one (1) year immediately prior to making application for such permit, of the county in which the warehouse is to be situated, and all officers and stockholders of such corporation shall possess all other qualifications required of an individual applicant. A verified list of the names of such stockholders shall be submitted with the application.
Said act also provides that,
It is conceded that the appellant meets all of the enumerated requirements of the 1939 amendment and that, unless it is within the discretion of the commission to refuse the permit on economic grounds, the permit should have been granted. An investigation by the commission disclosed that the present beer wholesaler in the vicinity of Petersburg is serving the retailers and consumer customers in a satisfactory manner and that the possible business in that community would probably not justify the establishment of another wholesale beer business. The appellant concedes that if the commission has the discretion to deny his permit on economic grounds it was not acting arbitrarily or capriciously in so denying such permit, but he insists that inasmuch as he has met all of the specific requirements of the 1939 amendment, the refusal of the commission to grant him a permit on economic grounds constitutes arbitrary and capricious action by said commission within the meaning of the statute.
The 1935 Liquor Act, § 9, ch. 226, p. 1090, Acts of 1935, provided that upon filing of an application for a beer wholesaler's permit 'the commission may, in is discretion, grant such permit, subject to the restrictions of this act,' and also provided that, 'No more than one wholesaler's permit for alcoholic malt beverages shall be issued in each county in the state for a total population, according to the last proceding decennial census of the United States of twenty thousand (20,000), or less, but in counties having a population, according to such census, in excess of twenty thousand (20,000), the commission may, in its discretion, issue additional wholesale permits in such county, not exceeding, however, one such permit for each twenty thousand (20,000) of such population, or major fraction thereof.'
This population limitation on permits for beer wholesalers could have no proper purpose other than to place an economic limitation on the permits of this type to be issued by the commission. The omission of this provision from the requirements set out in the 1939 amendment, supra, would indicate that the legislature intended that economic reasons should no longer be considered a ground for the refusal to issue a beer wholesaler's permit.
Section 2 of the 1939 amendment, supra, lists seven expressed requirements which must be met by an applicant for a beer wholesaler's permit and seem to have included all of the requirements which the legislature intended for the applicant to meet in order to be entitled to a permit. Said section also provides 'The commission may require additional proof, by affidavit or otherwise, that any applicant for such wholesaler's permit possesses any or all of such qualifications.' This provision, which immediately follows the seven above mentioned requirements, would seem to indicate that the legislature intended to limit the investigation of the applicant by the commission to the seven specific requirements and that the commission should not refuse a permit to any applicant who successfully met said specific requirements.
As shown above, the 1935 Act, supra, expressly provides that the granting of the beer wholesaler's permit might be issued by the commission in its discretion. This discretionary provision was dropped from the section relating to the issuance of permits to beer wholesalers by the 1939 amendment. It is significant to note, however, that the said amendment retained this provision for discretion in the commission in relation to the issuance of permits for liquor wholesalers. Section 3, Acts of 1939, supra.
We must conclude from the fact that this discretion clause was retained in the section on liquor wholesaler's permits and was taken out of the section on beer wholesaler's permits that the issuance of beer wholesaler's permits should no longer be within the discretion of the commission but should depend only on the applicant meeting the enumerated requirements of said act.
The appellee insists that the provision of said 1939 amendment which provides that the commission should not deny a wholesaler's permit or renewal thereof on capricious, arbitrary, or political grounds is meaningless and superfluous unless the commission has some discretion as to granting or refusing such permits. It is conceivable, however, that a commission might act arbitrarily or capriciously in determining whether an applicant possessed the qualifications set out in the seven specified requirements, and that the clause in this section of the 1939 amendment applies only to the action of the commission in determining the qualifications of the applicant as enumerated in said act.
The appellee also contends that section 6 of the 1935 Alcoholic Beverage Act as amended by section 2 of ch. 197, Acts of 1937, pp. 940, 941, which provides that the Alcoholic Beverage Commission shall have the power to grant, or refuse...
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