Paron v. City of Shakopee

• Decision Date: 07 May 1948
• Docket Number: No. 34630.,34630.
• Citation: 32 N.W.2d 603,226 Minn. 222
• Parties: PARON et al. v. CITY OF SHAKOPEE et al.
• Court: Minnesota Supreme Court

32 N.W.2d 603

226 Minn. 222

PARON et al. v. CITY OF SHAKOPEE et al.

No. 34630.

Supreme Court of Minnesota.

May 7, 1948.

The granting of a license rests in the sound discretion of the body or official to whom the duty of issuing it is assigned, but such discretion cannot be exercised arbitrarily or capriciously.

Appeal from District Court, Scott County; Martin A. Nelson, Judge.

Action by Hubert Paron and others against the City of Shakopee and others for a declaratory judgment as to the parties entitled to on-sale liquor licenses for the year commencing July 1, 1947, the duties of the city, its council, Mayor, recorder, and attorney, and a decree requiring the mayor to sign and the city recorder to deliver to plaintiffs on-sale license certificates. From an order sustaining demurrers to the complaint, plaintiffs appeal.

Affirmed.

Leonard, Street & Deinard, of Minneapolis, for appellants.

Julius A. Coller, II, of Shakopee, and Moonan Sturner Heinen & Lindmeyer, of New Prague, for respondents.

FRANK T. GALLAGHER, Justice.

Appeal from an order sustaining demurrers to plaintiffs' complaint.

The four plaintiffs, residents of Shakopee, a city of the fourth class in this state, brought this action against defendants city of Shakopee, a municipal corporation, its common council, mayor, city recorder, city attorney, and five holders of "on sale" liquor licenses in the city of Shakopee. For brevity, we shall refer to the parties as the four plaintiffs, the city, the council, the mayor, the city recorder, the city attorney, and the five defendants. The action was brought under the declaratory judgments act.

Prior to July 1, 1947, the four plaintiffs and the five defendants operated places in Shakopee where intoxicating liquor was sold under "on sale" licenses issued to them by the council. According to the complaint, in April and May 1947, the four plaintiffs filed applications for renewal of, and in May and June 1947 the five defendants filed applications for, "on sale" licenses for the license year commencing July 1, 1947. Thereafter, the city recorder gave notice of the filing of the nine applications for "on sale" licenses by publication in the official newspaper of the city, setting out that the applications would be heard and determined by the council on June 10, 1947. The complaint further alleged that at the times the five defendants filed their applications "none of said defendants was, or has been since, or now is qualified to apply for or to receive such license for said premises, or to operate `on sale' liquor stores therein. At said times, none of said establishments so owned and operated by said five defendants constituted or has since constituted, or now constitutes a hotel or a club, or an exclusive liquor store, within the definitions of the Act or of the Ordinance."

On June 10, 1947, the council, consisting of nine members, convened and adjourned to June 18, 1947, when it met again with the entire council and mayor present. A majority of the members of the council voted in the affirmative with respect to each of the nine applications. The meeting was then adjourned to June 23, 1947. On or about June 22, 1947, the city recorder sent to the liquor control commissioner of the state a "Certification of On Sale Liquor License," dated June 20, 1947, reporting that the council had taken the action stated above. The commissioner then informed the council that the number of "on sale" liquor licenses which could be issued in Shakopee was limited to five because of its population (exclusive of bona fide clubs, not involved). The complaint states that the commissioner had previously given this same information to the council by letter dated May 29, 1947. Because of this notification, the entire council again convened on July 1, 1947, with the mayor present, and "met in adjourned regular session." It is alleged that the city attorney then erroneously advised the council that its action of June 18, 1947, granting the nine applications, could not be reconsidered, and, according to the complaint:

"The City Attorney further erroneously advised the aldermen that they should deliver certificates of license to the first five applicants whose applications had been purportedly granted, to-wit: said five defendants, and treat the remainder of said licenses then granted, to-wit: the licenses granted to plaintiffs, as void, and that they should instruct the Mayor to sign said certificates to said five defendants and the Recorder to issue the same, despite the fact that said five defendants were disqualified from receiving such licenses, or certificates therefor, as hereinbefore alleged.

"Thereupon defendant J. C. Huber moved that the Mayor be instructed to sign the five purported licenses to said five defendants, and that the Recorder be instructed to deliver the purported certificates immediately, and defendant, Lawrence Kreuser, moved that the application fees and policies filed by plaintiffs be returned to them. Said motion was seconded by defendant, Peter Rademacher, and was carried."

It is alleged that pursuant to the action of the council the mayor signed and the city recorder delivered purported certificates of "on sale" license to the five defendants for the license year commencing July 1, 1947, and ending June 30, 1948, and returned to the four plaintiffs the application fees and policies filed by them.

The relief sought under the declaratory judgments act is for a judicial declaration as to who, as between the four plaintiffs and the five defendants, are legally entitled to "on sale" liquor licenses in Shakopee for the license year commencing July 1, 1947, and ending June 30, 1948; including a declaration as to the duties of the city, the council, the mayor, the city recorder, and the city attorney in the premises; also, a decree requiring the mayor to sign "on sale" license certificates and requiring the city recorder to deliver the certificates to plaintiffs and certify their issuance to the state liquor control commissioner upon its being declared that plaintiffs are entitled to them.

The various defendants demurred separately to the complaint on the grounds that the court had no jurisdiction of the persons of defendants or of the subject of the action; that plaintiffs had no legal capacity to sue; that there is a defect of parties plaintiff; that the facts stated in the complaint do not constitute a cause of action, and other grounds. If the demurrers can be sustained on any of the statutory grounds, they must be sustained. A demurrer admits all the material facts well pleaded in the pleadings to which it is directed, for the purpose of testing their sufficiency in law upon demurrer. It admits all necessary inferences or conclusions of law, whether stated or not, which follow from facts well pleaded. It does not admit bare conclusions of law or facts not well pleaded. 5 Dunnell, Dig. & Supp. § 7542. Meyers v. Lafayette Club, Inc., 197 Minn. 241, 266 N.W. 861, is authority for the proposition that a demurrer to a complaint based on the uniform declaratory judgments act is proper.

In our opinion, the problems raised by this appeal must be determined by a consideration of the following questions: (1) What was the status of the four plaintiffs at the time the present action was commenced? (2) Upon determination of their status, are they in a position to test the propriety of the council's action in directing that licenses be issued to the five defendants?

It is elementary that the legislature has the power to regulate the sale of intoxicating liquors. This power may be delegated to municipalities to license and regulate the sale of intoxicating liquors as an exercise of the ordinary police power of the state. The power to license involves the power to refuse to license, to limit the number of licenses to be granted, and to prohibit sales by persons not licensed. 3 Dunnell, Dig. & Supp. §§ 4912 and 4913.

The legislative act relating to intoxicating liquors and the control thereof, referred to in the complaint, is M.S.A. §§ 340.07 to 340.40 and amendments, commonly known as the liquor control act and hereinafter referred to as "the act." The ordinance of Shakopee referred to in the complaint is ordinance No. 43, amended in certain particulars by ordinances Nos. 44, 77, and 81, which ordinance and amendments are hereinafter referred to as "the ordinance." The complaint further alleged that at all times herein the ordinance provided and now provides, in conformity with the act, as follows:

"Sec. I(h)—`Exclusive liquor store' as herein used shall be an establishment used exclusively for the sale of intoxicating liquor at retail, either on or off sale or both."

"Sec. II, par. 1—No person shall directly or indirectly, upon any pretense or by any device, manufacture, import, sell, exchange, barter, dispose of or keep for sale any intoxicating liquor without first having obtained a license therefor as hereinafter provided. Licenses shall be of two kinds: `on sale' and `off sale.'"

"Sec. II Par. 2—`On sale' licenses shall be granted only to exclusive liquor stores, hotels and clubs and shall permit the consumption of liquor on the premises only. Not more than five such licenses shall be granted or be in existence at any one time."

"Sec. III, Subd. 1—Every person desiring a license for `off sale' or `on sale' shall file a verified application therefor in writing with the clerk of the municipality. * * * Applications for `on sale' licenses shall be in such form and shall require such information as the Council shall determine."

M.S.A. § 340.11 contains the important provisions of the act, including the authority of municipalities such as the city of Shakopee to issue intoxicating liquor licenses. Subd. 1 of this section makes the sale of intoxicating liquor without a license unlawful. Subd. 4 provides that "on sale" liquor licenses shall be granted "by the respective local governing bodies of the...