Sabes v. City of Minneapolis, 39000

Decision Date22 March 1963
Docket NumberNo. 39000,39000
Citation265 Minn. 166,120 N.W.2d 871
PartiesHenry SABES, Appellant, v. CITY OF MINNEAPOLIS et al., Respondents.
CourtMinnesota Supreme Court

Syllabus by the Court

1. Notice given a bar and restaurant owner by a municipality stating only that it will consider the revocation of the owner's licenses due to the conduct and operation of his business is inadequate to apprise the licensee of the claims against which he must defend. A licensee receiving such notice is not prejudiced, however, if he has previously had actual knowledge of the charges which were proved, and ample opportunity to be heard.

2. In an administrative hearing called by a municipality to consider the revocation of a bar owner's licenses for permitting his premises to be used as a resort for prostitutes, it was proper to receive into evidence as official statements under Minn.St. 600.13 the written reports of police officers reciting what they personally had observed with respect to prostitutes' soliciting customers on the licensed premises.

3. The revocation of licenses by a municipality for permitting premises to be used as a resort for prostitutes will be sustained without proof that the owner had actual knowledge of violations of § 340.14, subd. 2, if he knew his establishment was being patronized by prostitutes, and convictions for prostitution solicited on his premises occurred with such frequency that he was dutybound to take notice of their activities.

Dorfman, Rudquist, Jones & Ramstead, Minneapolis, for appellant.

Keith M. Stidd, City Attorney, D. J. Shama, Asst. City Atty., Minneapolis, for respondents.

OTIS, Justice.

This is an action against the municipal authorities of the city of Minneapolis to enjoin the revocation of various licenses held by plaintiff in connection with the operation of an establishment known as 'South of the Border--Key Club,' located at South Washington and 14th Avenues South in the city of Minneapolis. The district court entered findings of fact and conclusions of law refusing to enjoin the revocation of plaintiff's licenses. From an order denying his motion for amended findings or a new trial plaintiff appeals.

The record discloses that plaintiff has been the owner of a restaurant and bar at 1323 South Washington Avenue for over 25 years. Neither he nor his employees have ever been convicted of any offense arising out of its operation. Plaintiff testified that he had invested over $160,000 in the establishment and that it had a value exceeding $200,000. Each year the city has issued plaintiff an on-sale liquor license, as well as licenses for nonintoxicating beverages, food, cigarettes, and for the operation of a dance hall and a tavern.

On October 30, 1962, the Licenses Committee of the Minneapolis City Council served the following notice on plaintiff:

'NOTICE TO APPEAR

'Date October 30, 1962

'To Henry Sabes

'Address 2840 Monterey Parkway

'You will please take notice that at a meeting of the LICENSES Committee of the Minneapolis City Council to be held in Room 305, of the City Hall, Minneapolis, Minnesota, on November 7, 1962 at 9:00 a.m. The Committee will consider Revocation of all your licenses due to the conduct and operation of your business.

'You may appear and present such evidence as you desire. Failure to appear may jeopardize your license.

'By order of the LICENSES Committee.

'By RUSSELL R. GREEN, License Inspector

By M. Warner.'

Pursuant to that notice, plaintiff and his counsel appeared before the Licenses Committee on November 7, 1962, at which time plaintiff's counsel asked whether any charge was being placed against his client arising out of the operation of the bar in question. The committee chairman replied that the purpose of the hearing was to determine 'whether or not this is a desirable type of operation and an operation we would like to see continued.' Counsel persisted in his efforts to secure a specific statement of what conduct the committee claimed was in violation of the law. The most he could secure from the committee was an observation by the city attorney that it was an inquiry into the conduct of plaintiff's business based on a report by the chief of police. Thereupon the chief presented and discussed a report dated October 22, showing, among other things, the number of arrests and convictions for morals violations resulting from contacts made at the South of the Border Bar. He was quick to concede, however, that the evidence was not of a character which would support a criminal prosecution. At the same hearing, William Brady, head of the morals squad, was called and asked to produce his files and records showing violations for prostitution and other offenses resulting from contacts at plaintiff's bar. Counsel for plaintiff directed the committee's attention to the authorities holding that an owner may not have his liquor license revoked for condoning the presence of sex perverts without some showing of a violation of the law occurring on the premises. Counsel protested that the mere presence of prostitutes in plaintiff's bar was not in itself a violation warranting revocation. With this contention the city attorney agreed.

The hearing before the Licenses Committee was continued and conducted on November 13, November 20, and November 28. On November 29, 1962, the committee recommended to the city council that all of the plaintiff's licenses for the operation of the premises at 1323--1329 South Washington Avenue be revoked, and on the following day the city council acted accordingly. This action to enjoin the revocation followed.

There are three basic issues for determination: (1) Whether the notice of hearing before the Licenses Committee was adequate to confer jurisdiction; (2) whether the consideration by the committee of files, records, and reports of the police department was proper under an exception to the hearsay rule; and (3) whether the record supports a finding that plaintiff violated Minn.St. 340.14, subd. 2, prohibiting licensees from permitting their premises to be used as a resort for prostitutes.

1. With respect to the notice, we have no hesitation in finding it wholly inadequate. While the trial court recognized its deficiencies, he concluded that the plaintiff's attorney had actual notice of the charges and an opportunity to be heard by the time the hearing was conducted on November 7 and November 13. With some misgivings, we hold that plaintiff has not been materially prejudiced by the insufficiency of the notice he received. The importance of furnishing proper notice was discussed by Mr. Justice Mitchell in State ex rel. Hart v. Common Council, 53 Minn. 238, 55 N.W. 118, which reviewed the action of a municipality in discharging two city employees. He stated (53 Minn. 244, 55 N.W. 120):

'* * * The specifications of the alleged causes should be formulated with such reasonable detail and precision as shall inform the incumbent what dereliction of duty is urged against him. There should be a statement of charges with a specification of facts constituting a sufficient cause for removal, sufficiently distinct to apprise the officer of the grounds upon which the charges are based.'

In State ex rel. Sholund v. City of Duluth, 125 Minn. 425, 429, 147 N.W. 820, 821, we noted the inadequacy of notice to appear before a city council in connection with a liquor license revocation, couched in terms similar to those employed in the instant case. We found the notice insufficient in failing to advise the licensee of the nature of the charges against him or the ground on which the revocation was sought, but held that the right to adequate notice had been waived. Here plaintiff did not waive his right to proper notice, and protected his record at every stage of the proceedings. However, we are of the opinion that in view of the narrow question on which the case eventually hinged, plaintiff has not been prejudiced. The revocation was ultimately based entirely upon a violation of § 340.14, subd. 2. The use of plaintiff's premises as a resort for prostitutes had been discussed with plaintiff's employees on previous occasions. He was fully aware of the complaints made by the police in this respect. There was ample opportunity to meet the evidence presented before the Licenses Committee, and plaintiff attempted to do so. There was no request for a continuance to present additional evidence on his behalf. Although we are somewhat reluctant to condone the inadequacy of the notice, we hold that under the circumstances a reversal and rehearing are not warranted.

2. The trial court found the evidence submitted to the Licenses Committee sufficient to justify the city council's determination that plaintiff had violated § 340.14, subd. 2, prohibiting a licensee from permitting his premises to be used as a resort for prostitutes.

Minneapolis Code of Ordinances, § 851.420, adopted pursuant to c. 4, § 16, of the city charter, permits the city council to revoke liquor and other licenses for any violation of the laws of Minnesota relative to the sale of liquor 'or to the conduct of the business of the licensee.'

We hold that there was competent evidence on which the Minneapolis City Council could properly base a finding that plaintiff had violated § 340.14, subd. 2, and had consequently forfeited his right to retain his licenses.

No citizen has an inherent or vested right to sell intoxicating liquors, and municipal authorities have broad discretion within their geographical jurisdiction to determine the manner in which liquor licenses shall be issued, regulated, and revoked. 1 Inherent in the right to control the sale of liquor is the power to regulate related activities on the licensed premises. 2 Basically it is the council's duty to decide whether the licensee has been guilty of such unlawful conduct in the operation of his business that its continuance is detrimental to the public good. 3 In reviewing the proceedings of the...

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