St. John's Melkite Catholic Church v. Commissioner of Revenue, s. 32676

• Decision Date: 31 January 1978
• Docket Number: 33025,Nos. 32676,s. 32676
• Citation: 242 S.E.2d 108,240 Ga. 733
• Parties: ST. JOHN'S MELKITE CATHOLIC CHURCH et al. v. COMMISSIONER OF REVENUE. COMMISSIONER OF REVENUE, v. ST. JOHN'S MELKITE CATHOLIC CHURCH et al.
• Court: Georgia Supreme Court

Page 108

242 S.E.2d 108

240 Ga. 733

ST. JOHN'S MELKITE CATHOLIC CHURCH et al. v. COMMISSIONER OF REVENUE.

COMMISSIONER OF REVENUE, v. ST. JOHN'S MELKITE CATHOLIC CHURCH et al.

Nos. 32676, 33025.

Supreme Court of Georgia.

Jan. 31, 1978.

Rehearing Denied Feb. 21, 1978.

Thompson, Stovall, Stokes & Thompson, Fletcher Thompson, Atlanta, for appellants.

Arthur K. Bolton, Atty. Gen., R. Douglas Lackey, Asst. Atty. Gen., Atlanta, for appellee.

HALL, Justice.

This case involves constitutional challenges to most of the provisions of the "1977 Bingo Act." Ga.L.1977, p. 1164. ¹ The trial court found that sections 2, 3 and 7 were unconstitutional restrictions on the right to operate bingo games, and that section 10 was invalid insofar as it penalized the failure to comply with sections 2, 3 and 7. Appellants have challenged sections 4, 5, 8, 10 and 11 in this appeal. Cross appellants have appealed the rulings of invalidity.

Each of the appellants is a nonprofit organization which has conducted bingo games. Except for the Fellowship Club of Savannah, all of the appellants have sponsored bingo games through the services of The Club Room, Inc., a for-profit corporation. The Club Room, Inc. was in fact operating the games for appellants. The Club Room hired all bingo personnel (who were nominally placed on the payroll of the nonprofit organizations), chose the type of games played and prizes given, ran the games, kept books of account for the nonprofit groups, and ran advertisements of the games using the names of the nonprofit groups.

Appellants used the services of the Club Room to avoid the inconvenience of running bingo games. By hiring "professionals" the organizations could obtain bingo proceeds with no effort by their own members. The Club Room received large rental payments for use of its facilities and services. The profits of the games in the Club Room amounted to about $130,000 in the five-month period for which evidence was obtained. Of this, $98,000 went to the nonprofit groups and $32,000 went to the Club Room.

The data for the Fellowship Club of Savannah indicates that the Club received only $253.48 in proceeds from their games. In contrast, the financial statement shows payments of $500 in legal fees (plus $518 in legal fees unpaid), $5,114.70 in rent paid to the wife of the president of the club, and $900 in additional rent.

The resolution of this case does not depend on the facts. However, these facts illustrate the type of bingo operations which developed prior to the 1977 Act.

Before reaching the merits of the challenges to this Act we will consider, sua sponte, whether appellants have standing to raise all of the issues they argue.

1. Appellants challenged the limitation on bingo licenses to organizations which have been in existence less than two years. Ga.L.1977, p. 1164, at 1165, § 3. In order to have standing to challenge this, at least one of the appellants would have to be in existence less than two years, and only the Counselor's Club, Inc. qualifies. The Counselor's Club, Inc. was formed in April, 1977, after this action was filed. All of its officers and members are attorneys in the law firm which represents the plaintiffs. A deposition shows that this corporation has conducted no operations other than bingo games and the prosecution of this lawsuit. The Counselor's Club, Inc. admittedly was created for the purpose of challenging this law.

There are no genuinely adverse legal positions at stake in this challenge to the two-year requirement. There are no actual plans to turn this corporation into a functioning organization pursuing its stated nonprofit purposes. Where a corporate plaintiff is lacking in substance and was created for the sole purpose of pursuing a lawsuit, we would be rendering an advisory opinion if we decided an issue it alone can argue. We will not decide the constitutionality of a law where no justiciable case or controversy is presented. Cf. Northeast Factor & Discount Co. v. Jackson, 223 Ga. 709, 710-711, 157 S.E.2d 731 (1967) and cases cited; Bartemeyer v. Iowa, 85 U.S. 129, 134-135, 21 L.Ed. 929 (1873); Warth v. Seldin, 422 U.S. 490, 498-500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). We vacate the ruling on the two-year limitation, since none of the appellants has standing to challenge this provision.

2. If the trial court was correct in holding that the state could not require licensing, it was proper for the court to consider ancillary licensing provisions. Thus, the court properly ruled on the third and fourth sentences of section 3, and the second sentence of section 2. However, our holding in this case, infra, that licensing is a valid requirement changes the situation.

Given this ruling, appellants cannot challenge the renewal provisions of the third sentence of section 3 until they have obtained licenses. The only challenge to the fourth sentence of this section, which requires posting of licenses, is that it is dependent on the allegedly invalid license requirement. In light of our ruling that a license may be required, no ruling on the validity of this sentence can be had. The second sentence of section 2 cannot be challenged by appellants, for there is no controversy as to whether appellants' games are "bingo," thus this section has no effect under its own terms. We vacate the rulings on these sentences.

3. Appellants have no standing to challenge any of the provisions of section 7. Appellants have not applied for licenses; therefore, they cannot challenge the authority of the Commissioner to revoke licenses, or the procedure by which licenses are revoked.

The provisions for searches and seizures cannot be challenged absent a justiciable case or controversy, and there is absolutely no indication in the record of searches, seizures, or threats of them, with or without warrants. See Scoville v. Calhoun, 76 Ga. 263 (1886). Even assuming this section allows warrantless searches, and violates the Constitution, it is entirely possible that the state will obtain search warrants prior to every search, for the fruits of invalid warrantless searches are not admissible in court. Although the state has not questioned appellants' standing to raise these issues, we will not render an advisory opinion. Hinson v. First National Bank in Waycross, 221 Ga. 408, 144 S.E.2d 765 (1965); South Georgia Natural Gas Co. v. Georgia Public Service Commission, 214 Ga. 174, 175, 104 S.E.2d 97 (1958). The ruling on section 7 is vacated.

4. Section 8(d)of the Act includes two provisions. The first sentence dealing with pyramiding of prizes applies only to licensed bingo operating organizations, therefore, appellants lack standing to challenge it. We vacate the ruling on this question.

5. Appellants have alleged no justiciable controversy as to section 11. The ruling upholding this section is vacated.

6. Appellants' remaining challenges to the provisions of this Act must be considered in view of the intent of the legislature and the people in amending Art. I, Sec. II, Par. XI of the Constitution (the "bingo amendment"). Set out at Ga.L.1976, p. 1874 (Code Ann. § 2-211). The "bingo amendment" states that "the operation of a nonprofit bingo game . . . shall be legal." Appellants argue that this statement was intended to create a constitutional right of nonprofit organizations to operate bingo games, a right on a par with the guarantees of freedom of the press. No restrictions on this right other than those contained in the amendment are valid, in their opinion, unless particular operations are held inimical to the public welfare in judicial proceedings.

The elevation of the status of bingo from proscribed lotteries to a nearly absolute constitutional right would be an extraordinary event. Having examined the language of the constitutional amendment and the legislative history, we find that this was not the intended result of the constitutional amendment. The only fact which supports appellants' argument is the use of the phrase "shall be legal" instead of some other phrase which would more clearly delineate the power of the legislature to regulate legal bingo. We agree that the language chosen has the effect of preventing the legislature from outlawing bingo in general, or making it practically impossible to operate a bingo game, and to this extent the police power has been circumscribed. But this does not mean that the state's police power has been emasculated so that the legislature is without power to outlaw abuses of the right to operate bingo games.

The language of the amendment must be viewed in light of the preexisting provision of the Constitution, which provided: "All lotteries, and the sale of lottery tickets, are hereby prohibited; and this prohibition shall be enforced by penal laws." Art. I, Sec. II, Par. IV, 1945 Constitution. The bingo amendment did not change this language. Lotteries were in fact outlawed by a penal statute, Code § 26-2701. Unless the amendment made some provision which would repeal this statute by implication (to the extent it prohibited bingo), there would be a question as to whether the legislature would have to amend § 26-2701 before the "bingo amendment" would become effective. We believe the use of the term "shall be legal" was only intended to make the amendment self-effectuating by eliminating the prohibition of bingo implicit in Code § 26-2701.

Our conclusion that the "bingo amendment" does not preclude regulation of bingo by the legislature is supported by the rest of the amendment. The amendment contains restrictions on the operation of nonprofit bingo games, and these restrictions indicate an intent to permit only small, nonprofessional bingo operations in which virtually all of the profits accrue to nonprofit groups. Moreover, the provision for public reports of the financial affairs of organizations running nonprofit bingo operations indicates that the legislature wanted to obtain information about these operations for...