Walker v. City of Clinton

• Decision Date: 17 July 1953
• Docket Number: No. 48299,48299
• Parties: WALKER v. CITY OF CLINTON et al.
• Court: Iowa Supreme Court

Page 785

59 N.W.2d 785

244 Iowa 1099

WALKER v. CITY OF CLINTON et al.

No. 48299.

Supreme Court of Iowa.

July 17, 1953.

Alan H. Mayer and E. C. Halbach, of Clinton, for appellants.

Holleran & Holleran and Prentice W. Shaw, of Clinton, for appellee.

THOMPSON, Justice.

On September 12, 1952, plaintiff was the holder of a class 'B' beer permit issued by the city of Clinton. On that date the city council, by a six to three majority, voted to revoke the permit. Thereupon the plaintiff brought his action of certiorari challenging the legality of the action of the council and alleging that it acted arbitrarily and without jurisdiction. After hearing, the trial court sustained the writ. It found that certiorari was a proper remedy, that no notice of the proposed revocation was given to plaintiff and he was accorded no hearing, and notice and hearing were essential before the permit could be revoked. It further found there was no competent evidence before the council upon which it was entitled to act. The attempted revocation was held illegal and void.

The errors assigned by defendants upon this appeal are, in substance, that certiorari is not a proper remedy under the circumstances existing here; that plaintiff was not entitled to notice of the proposed revocation or to a hearing; and that the trial court was in error in holding there was not sufficient competent evidence before the council to warrant the action taken.

Much time and space are devoted by counsel for the parties to the question of the propriety of the remedy--certiorari--adopted by plaintiff to test his rights. The question is not free from difficulty; but we think we need not decide it. Assuming, arguendo, that certiorari was available to plaintiff, we conclude he has failed to make a sufficient showing to sustain the writ, and that the trial court was in error in holding he had done so.

I. The question of the right of the holder of a beer license, or permit, as our statutes designate it, to a notice and hearing before revocation divides into two parts. First we have the inquiry whether the legislature may legally give the governing bodies--city or town councils or boards of supervisors--which issue permits the right of revocation without notice (which implies, of course, also without hearing); and second, if it may grant such powers, has it done so? We take these up in order, under subheads (a) and (b).

(a). The right of a legislature to provide, without notice or hearing, for revocation of licenses, or permits, for the sale of beer is so well established that it seems hardly debatable. Constitutional questions of due process and taking of property without compensation have been repeatedly answered by the statement that a license to handle, sell, or otherwise dispense beer, wines, and other malt or spirituous liquors is a privilege granted by the state and is in no sense a property right. Such a license does not constitute a contract with the state or with the municipality or other governing body which the state empowers to issue it. When the licensee takes this privilege he does so subject to the provisions of the statutes under which it is granted; and if these statutes say or fairly imply that he is entitled to no notice or hearing before revocation, he cannot be heard to complain if he is given none. We said in the recent case of State v. Dahnke, Iowa, 57 N.W.2d 553, 556:

'The right to sell beer is not an inherent or unrestrained right. It is a right or privilege granted by the state to be exercised under such restrictions as the legislature sees fit to attach thereto. When one obtains a license or permit in this state to sell beer, he does so with all legal restrictions pertaining thereto constituting a part thereof.'

That a license such as the one involved here is not property, and the licensee takes it subject to the provisions of existing law, including the right of the proper authorities to revoke it, has been held repeatedly in Iowa and elsewhere. See Hurber v. Baugh, 43 Iowa 514, 516, 517; Columbus City v. Cutcomp, 61 Iowa 672, 673, 17 N.W. 47, 48 ('* * * the very decided weight of authority holds that licenses to sell liquors are not contracts between the state and the person licensed, giving the latter vested rights, and partaking of the nature of contracts, but are merely temporary permits to do what otherwise would be an offense, issued in the exercise of police powers, and subject to the direction of government, which may revoke them as it deems fit'); State v. Schmidtz, 65 Iowa 556, 557, 22 N.W. 673; West v. Bishop, 110 Iowa 410, 81 N.W. 696; Wallace v. City of Reno, 27 Nev. 71, 73 P. 528, 63 L.R.A. 337, 103 Am.St.Rep. 747; Darling Apartment Company v. Springer, 25 Del. 420, 22 A.2d 397, 137 A.L.R. 803. Many other cases might be cited. A great number of them are discussed and analyzed in Wallace v. City of Reno, supra, and we shall not take the space required to set them out here.

The Iowa law leaves no doubt that the sale of beer is an illegal business in this state, unless it is carried on in conformity to the statutes. At the threshold of Chapter 124 we are met by section 124.1 which says:

'It shall be unlawful for any person to * * * sell beer unless a permit is first obtained as provided for in this chapter.' Some analogy to the present discussion is also found in Ford Hopkins Company v. City of Iowa City, 216 Iowa 1286, 248 N.W. 668, and Bernstein v. City of Marshalltown, 215 Iowa 1168, 248 N.W. 26, 86 A.L.R. 782. These cases are concerned with the status of one who desires to engage in the business of selling cigarettes.

It is only fair to say that the plaintiff does not seriously contend his permit was more than a privilege. But he does assert, and the trial court found, that even this privilege could not be revoked without notice to him; and, of course, if he was entitled to notice he was likewise entitled to be heard. Such is not the law. He who obtains a license to do an otherwise prohibited act, issued by the state or subdivision thereof in the exercise of its police power, takes it subject to all its infirmities; and one of these is that the power which issued it may summarily revoke it if the governing statutes so provide. This may make the state an 'Indian giver'; it may be an apparent injustice to the permit holder; but if the legislature in its wisdom determines that the necessities of the public health and morals require such power in the issuing authority, it has the power to so decide, whether or not the rule be harsh or inequitable as against the tavern keeper. The Nevada supreme court, in Wallace v. Reno, supra, at page 533 of 73 P., said:

'From a general review of the authorities it appears that a license for the sale of liquors may be revoked before the expiration of the time for which it has been granted by act of the Legislature directly, or by the will of a majority of the voters expressed at an election, or by the board or mayor in their or his discretion, and with or without notice to the licensee, if statutory authority and conditions be pursued. It is apparent that the respondents acted within the letter and requirements of these statutory provisions, and that they are not unconstitutional.' (Italics ours.)

Likewise, the Delaware court in Darling Apartment Co. v. Springer, supra, at page 401 of 22 A.2d remarked:

'Any summary exercise of power may be regarded as harsh; but the question is one of legislative power, not of propriety. * * * It is a mere temporary permit issued under the authority of the State in the exercise of its police power to do that which otherwise would be unlawful. The right of the licensee can rise no higher than the terms of the law under which the license is issued; and the licensee accepts the privilege subject to such conditions, including the cause and manner of revocation or suspension as the Legislature may see fit to impose. Where the statute or ordinance provides a method of revocation or suspension, that course must necessarily be followed; but if, by express terms or by necessary implication, no notice and hearing of charges are required, and a summary power is vested in an administrative body, the licensee, by his acceptance of the license, is bound by and is subject to the condition.'

That plaintiff had money invested in his stock of merchandise, fixtures, etc., does not aid him, as Justice Duckworth pointed out in Owens v. Rutherford, 200 Ga. 143, 36 S.E.2d 309, 313-314.

(b). The right of the legislature to authorize revocation of permits of this class without notice or hearing is clearly established by logic and by the authorities above cited, to which might be added many more to the same effect. We think, also, the legislature has unmistakably empowered the city and town councils and boards of supervisors to make such revocation. Plaintiff contends that the council here must have been acting under section 124.40 of the Code of 1950, I.C.A., but we do not agree. This section provides that ten or more citizens of any city or town may join in filing, and it shall be the duty of every peace officer to file with the board or council which granted the permit in question, a written complaint, setting forth alleged acts of violation of the provisions of Chapter 124 (the chapter providing for the issuance of beer permits and the regulation of the beer business generally). There follow provisions for notice and hearing. But there is no evidence this section was used here. It appears from the record that on September 11, 1952, two minors, aged 18 and 19 years respectively, were apprehended by the Clinton police with beer in their possession. On September 12th next they signed statements which said they had purchased beer at plaintiff's tavern, drinking several glasses each and taking some away with them, and described the bartender who sold it to them. Each pleaded guilty on September 12th to a violation of the beer law by purchasing beer when a...