Lewis v. City of Grand Rapids, Michigan

• Decision Date: 13 September 1963
• Docket Number: No. 4431.,4431.
• Parties: Alphonse LEWIS, Jr., Plaintiff, v. CITY OF GRAND RAPIDS, MICHIGAN, Michigan Liquor Control Commission, William A. Johnson, Superintendent of Grand Rapids Police Department, William H. Nichols, Jr., Trustee of the Estate of Patricia Ettress Bell, Bankrupt, United States of America, their commissioners, officials, officers, attorneys, agents, employees, and any others acting for, with or in concert with any of them, Defendants.
• Court: U.S. District Court — Western District of Michigan

222 F. Supp. 349

Alphonse LEWIS, Jr., Plaintiff, v. CITY OF GRAND RAPIDS, MICHIGAN, Michigan Liquor Control Commission, William A. Johnson, Superintendent of Grand Rapids Police Department, William H. Nichols, Jr., Trustee of the Estate of Patricia Ettress Bell, Bankrupt, United States of America, their commissioners, officials, officers, attorneys, agents, employees, and any others acting for, with or in concert with any of them, Defendants.

No. 4431.

United States District Court W. D. Michigan, S. D.

September 13, 1963.

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Alphonse Lewis, Jr., Grand Rapids, Mich., for plaintiff.

William J. Garlington, City Atty., and Wendell Miles, of Dutchess, Mika, Miles, Meyers, Merdzinski & Snow, Grand Rapids, Mich., for defendants City of Grand Rapids and William A. Johnson.

Murray B. DeGroot, Grand Rapids, Mich., for defendant William H. Nichols, Jr., Trustee.

James Saunders, Asst. Atty. Gen., Lincoln Park, Mich., for defendant Mich. Liquor Control Commission.

FOX, District Judge.

This action involves the denial of a transfer and ultimate revocation by the Chief of Police and the City Commission of Grand Rapids of the only negro-owned-operated Class C liquor license in a city of over 200,000 population.

Plaintiff Alphonse Lewis, Jr., a negro, claims the refusal to transfer the license of Barnett's Bar fom Patricia Ettress Bell, a negro, to him and Dr. Cortez English, a negro, denied him his constitutionally protected rights of due process and equal protection of the law guaranteed by the Fourteenth Amendment of the Constitution of the United States.

Plaintiff further claims that William A. Johnson and certain City Commissioners conspired to delay and deny the transfer of the Class C license of Barnett's Bar to him in violation of the Federal Civil Rights Act of 1883.

The case was introduced first into the Federal District Court for the Western District of Michigan, Southern Division, in a voluntary bankruptcy proceeding by Patricia Ettress Bell, In the Matter of Patricia Ettress Bell, Bankrupt, In Bankruptcy No. 21,695-B.

The Bankruptcy Court issued restraining orders against the City of Grand Rapids and designated city officials, restraining them from taking any action which would adversely affect the claimed ownership by the Trustee of the license at Barnett's Bar.

Plaintiff Lewis commenced this action to secure his constitutionally protected rights, and to restrain the City of Grand Rapids and its designated officials from interfering with these constitutional rights.

To better understand this case, the Court presents a chronology of events adduced by the evidence.

Barnett's Bar and Lounge was owned and operated by Stanley Barnett until his death in 1946. The Bar was then operated by Stanley Barnett, Jr., as administrator, until his death in 1948.

Menso R. Bolt and Alphonse Lewis, Jr. operated the Bar thereafter as successor administrators of the Stanley Barnett estate. In 1952 the ownership of the Bar was transferred to Patricia Ettress, the minor daughter of Stanley Barnett, Jr.

During the minorship of Patricia Ettress, the Bar was operated by her mother, Louise Baldwin, and by her stepfather, Jesse Baldwin. Their agreement to purchase the bar from Patricia Ettress was never executed.

The Bar was closed for a period in 1958 and 1959, and was reopened in May of 1959. It is the judgment of this court that Patricia Ettress Bell found it difficult to finance the Bar's reopening and operation in May of 1959. She had to look ultimately to Mr. Lewis for the necessary finances.

In preparation for reopening the Bar, Patricia Ettress secured a loan of $3,000 from Alphonse Lewis, Jr., by executing a chattel mortgage to him covering "all licenses, all furniture, furnishings and equipment" in the Bar.

On May 15, 1959, the Grand Rapids Police filed their report with the Michigan Liquor Control Commission (hereinafter referred to as the "LCC"), approving Alphonse Lewis, Jr. as manager of Barnett's Bar and Lounge.

On May 20, 1959, Patricia Ettress and Alphonse Lewis, Jr. entered into a managerial agreement whereby Mr. Lewis was to manage the Bar, exercise certain concomitant powers, and receive a specified remuneration for his services. The managerial agreement was drawn up at the suggestion and with the approval of the LCC and made a part of its public files.

No further incidents involving official action occurred until August 1960. At that time, a negro police officer for Grand Rapids, in the course of his duties, became suspicious of gambling activities in the basement of the building in which the Bar was located. He was convinced that Mr. Lewis, as manager, did not know of these activities and so informed Chief Johnson. This officer reported his suspicions to Superintendent of Police William Johnson. Chief Johnson then employed a Saginaw police officer, Sylvester Stephens, to investigate.

Officer Stephens frequented the Bar for the full first week of August. He turned over his information to the Grand Rapids Police, and this body raided the building some time in the early part of August.

On August 11, 1960, a violation report was filed with the LCC against Patricia Ettress, charging that gambling had been discovered on the premises of Barnett's Bar and Lounge.

About the same time, Patricia Ettress entered into an agreement to sell the license to one Frank Reynolds. The check tendered Mrs. Ettress by Mr. Reynolds turned out to be no good and the transfer was later cancelled.

On September 26, 1960, the Grand Rapids Police called the LCC and requested that any Commission hearings on the alleged gambling violation be postponed until the Police Court action was completed in Grand Rapids. A letter dated September 27, 1960 followed, explaining that to divulge information to the LCC at that time would seriously weaken the cases in Police Court, and thus, a postponement was desired.

Mr. Baldwin and Mr. Coogan attempted to purchase the Bar and license in October 1960. This application for transfer was withdrawn.

On November 10, 1960, Patricia Ettress entered into an agreement to sell the Bar and license to Dr. Cortez English. The agreement was drafted by Alphonse Lewis in his office. This transfer was to be contingent upon the Reynolds transfer not going through. Papers were not filed on this application with the LCC until March of 1961, after Mr. Reynolds rescinded his agreement.

From December 9, 1960 to March 8, 1961, there were a series of communications between the LCC and the Grand Rapids Police concerning the status of the Police Court action on the gambling charges. The LCC was informed of a number of adjournments.

On March 6, 1961, formal applications for transfer were filed with the LCC by Dr. English and Mr. Lewis, as transferees, and Patricia Ettress, as transferor. These are the applications under consideration by all parties throughout this suit.

May 10, 1961, Patricia Ettress wrote a letter to Mr. Lewis terminating his position as manager of the Bar.

In May 1961, a Police Court hearing was held on the gambling charges. At that time four of the six parties charged were dismissed. Two of the parties were bound over to Superior Court.

On May 15, 1961, Mr. Lewis was added as a party to the November agreement to sell between Patricia Ettress and Dr. English. The amendment provided that Mr. Lewis would be a co-purchaser and partner with Dr. English. This apparently was verbally understood on March 6, 1961, when the parties filed their application for transfer.

On May 29, 1961, Mr. Lewis submitted to Patricia Ettress an itemized statement for $16,596.15 for loans and services rendered.

The LCC on June 2, 1961, asked both the Grand Rapids City Commission and the Grand Rapids Police to make their investigations of the pending transfer to Dr. English and Mr. Lewis. The letter to the Grand Rapids Police specifically stated that if the parties were not recommended for transfer, reasons should be given.

The same day, Inspector Andrew J. Spyk, Jr., of the Allegan enforcement staff for the LCC, filed his investigation report with the LCC. In it he recommended the transfer be made, subject to the receipt of a birth certificate for Dr. English.

The investigation report shows that the established purchase price was to be $18,000, plus the cost of inventory, $400. The applicants were to invest $18,400 in the purchase in the following manner, according to Mr. Spyk's report:

$16,596.15 — the amount which the licensee, Mrs. Ettress, owed to Mr. Lewis for back salary as manager, for money advanced, and for services rendered as her attorney; $1,920 — money advanced to the licensee by Dr. English for sales tax payments, license renewal and payments on account with the Internal Revenue Department.

These two figures total $18,516.15, and Mr. Spyk's investigation report comments: "This is the amount which the licensee owes the applicants and will be paid in lieu of cash. Statements are attached".

The report goes on to show that the books and records of the Bar were carefully scrutinized and the Investigator recognized that there were tax liens against the present licensee. From the investigation, Mr. Spyk stated that he was of the opinion that the licensee, Mrs. Ettress, was the true owner.

Besides commenting that there was a violation pending against this establishment, the report shows that there existed also at that time a Department of Revenue stop against this license.

The Grand Rapids Police filed their investigation form 1800 with the LCC on July 11, 1961. The transfer was not recommended according to this form because of the pending gambling violations. The reasons for not recommending were set out on the back of the form. The reasons included a statement that Mr. Lewis was manager of the Bar at the time the raid took place.

Consequently, on August 7, 1961, the LCC denied the transfer due to failure to receive a favorable recommendation from...