Stouffer Corp. v. Board of Liquor Control

• Citation: 59 O.O. 100,165 Ohio St. 96,133 N.E.2d 325
• Decision Date: 21 March 1956
• Docket Number: No. 34479,34479
• Parties: , 59 O.O. 100 The STOUFFER CORP., Appellant, v. BOARD OF LIQUOR CONTROL et al., Appellees.
• Court: United States State Supreme Court of Ohio

Page 96

165 Ohio St. 96

133 N.E.2d 325, 59 O.O. 100

The STOUFFER CORP., Appellant, v. BOARD OF LIQUOR CONTROL et al., Appellees.

No. 34479.

Supreme Court of Ohio.

March 21, 1956.

Charles T. Kaps, Columbus, Anthony J. Trivision and Fred W. Garmone, Cleveland, for appellant.

C. William O'Neill, Atty. Gen., and Kiehner Johnson, Columbus, for appellees.

PER CURIAM.

In the present case we have for consideration the following sections of the Revised Code.

Section 4301.03, reading in part:

'The board of liquor control may adopt and promulgate, repeal, rescind, and amend, in the manner required by this section, rules, regulations, standards, requirements, and orders necessary to carry out Chapters 4301. and 4303. of the Revised Code, including the following:

* * *

* * *

'(H) Rules, regulations, and orders limiting the number of permits of any class within the state or within any political subdivision of the state; and for such purpose adopting reasonable classifications of persons or establishments to which any authorized class of permits may be issued within any such political subdivision.'

Section 4303.29, reading in part:

'Not more than one D-3, D-4, or D-5 permit shall be issued for each two thousand population, or part thereof, in any county or municipal corporation, except that in any city of a population of fifty-five thousand or more, one D-3 permit may be issued for each fifteen hundred population, or part thereof.'

Appellant owns and conducts a restaurant in the city of Fairview Park in Cuyahoga County, which on April 11, 1949, was a village, but which, according to the census of 1950, had become a city of 9,311 persons.

Appellant has invested some $900,000 in its restaurant, and apparently it is a place of fine character, as the Court of Appeals in its opinion said:

'The high standing of the applicant, and the enviable position it occupies in the restaurant business, places it in the category of the few choice places of business to which permits would be issued ordinarily without any difficulty.'

The sole reason for the refusal to issue the permits is regulation 64 adopted by virtue of the claimed express authority in Section 4301.03, Revised Code.

Section 1 of that regulation reads:

'The number of D-3, D-3a, D-4 and D-5 permits which may be issued within the state of Ohio and within each political subdivision thereof is hereby limited to a figure which shall be equal to the number of permits of each above designated class respectively issued and outstanding in the state of Ohio and in each political subdivision thereof as of April 11, 1949 * * *.

'No new D-3, D-3a, D-4 and D-5 permits shall be issued except permits issued pursuant to the provisions of regulation 14, and, except, also, new permits issued upon the expiration of any existing permits to the same permit holder for the same location.'

In the present case, it is stipulated that there were three class D-3 permits and one class D-3a permit issued and outstanding in Fairview Park on April 11, 1949, and the same number at the time of appellant's applications and their rejection by the board.

It is likewise stipulated that there are no applications for class D-3 permits which have priority over appellant's applications.

The question presented to us is the reasonableness or legality of regulation 64.

Section 119.11, Revised Code, provides in part:

'* * * but no person affected thereby shall be precluded from attacking at any time the reasonableness or legality of any rule in its application to a particular set of facts or circumstances.'

Appellant in its brief presents three questions of law:

1. Whether the board has the power to adopt a regulation limiting the number of permits of any class without adopting reasonable classifications of persons or establishments to which any class of permits may be issued within any political subdivision.

2. Whether the board has the power to further limit certain classes of permits where the General Assembly has already imposed a limitation.

3. Whether regulation 64 is reasonable, uniform and non-discriminatory as applied to the facts of the present case.

In reference to the first two questions, we are of the opinion that under the broad powers to promulgate regulations, given by Section 4301.03, Revised Code, the Board of Liquor Control may reasonably regulate the number of permits of any class within any political subdivision; and the fact that the General Assembly in Section 4303.29, Revised Code, has provided for a maximum number of D-3, D-4 or D-5 permits which may be issued in any county or municipal corporation does not prevent the board from reasonably limiting by rule such classes of permits.

It is obvious that the liquor business, although legal by Ohio law, has in it such dangers that it is entirely subject to the police power of the state and may, in fact, be prohibited. Under Ohio law, providing for local option, a large part territorially of the state prohibits traffic in intoxicating liquors. A license, or a right to such a license, to engage in the liquor business is not an inherent right of a citizen, a contract or a property right. State ex rel. Zugravu v. O'Brien, 130 Ohio St. 23, 196 N.E. 664. It is apparent, therefore, that, fine and expensive as appellant's restaurant may be, it has no inherent or property right to a liquor license since such license is a mere privilege conferred by the state.

We come now to the question of the reasonableness of regulation 64 in its application to the facts or circumstances of the present case.

According to the brief of the Board of Liquor Control, in early 1949 it determined that there was a...