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District Court of Appeal, Second District, Division 2, California.


Civ. 13392.

Decided: February 25, 1942

Keller & Smith, of Alhambra, for appellant. Herbert S. Farrell, of Alhambra, for respondents.

The question for determination in this case is whether a city council may revoke a business license upon finding (1) that the licensee has violated the statutes and ordinances which regulate his business, and (2) that the continuance of such license would be contrary to the public welfare.

The license of appellant to operate an automobile wrecking yard in the city of San Gabriel having been revoked by the city council, he procured the issuance of an alternative writ of mandate to review the proceedings. The matter came on duly to be heard and resulted in a judgment of nonsuit which comes here on plaintiff's appeal.

Appellant had conducted his business in the same location for the preceding thirteen years. On January 22, 1941, he received from the city clerk a letter which advised him that the city proposed to revoke his license to operate the wrecking yard and that he should appear before the city council six days later. At the time designated he appeared before the council in company with his attorney, Richard J. Keller. When the matter was called up for consideration the attorney stated that appellant was ready, able and willing to produce evidence as to why his license should not be revoked, but that he should first hear the evidence as to why it should be revoked. Thereupon Officer Jorgenson read a communication from the chief of police of San Gabriel setting forth that appellant had been arrested for dismantling a motor vehicle without informing the state; that he had been convicted of dismantling a motor vehicle without notifying the chief of police; that upon an inspection of appellant's yard, it had been discovered that the conditions of his license had been violated by parking in front of his yard two automobiles incapable of being operated under their own power, by having three fire extinguishers not in working condition, and by possessing seven wrecked automobiles concerning which neither the city nor the state had been notified of their dismantling; that Harold L. Walker, a son of appellant, had been cited for parking his tow car in the public alley in the rear of the wrecking yard, thereby creating a traffic hazard in violation of a city ordinance; that upon an inspection of the premises at a later date appellant was warned of three violations of the law; that seven months thereafter, following an inspection, twelve violations had been committed by appellant's parking eight cars in front of his premises on Valley boulevard, a main traffic artery, which cars were not in running condition; that one car was undergoing repair on the highway; that parts of dismantled vehicles extended above the fence surrounding the premises; and that the road west of appellant's premises was used to wreck, repair and store used automobiles, contrary to a city ordinance to one of which violations appellant had pleaded guilty and been fined. In addition to the foregoing, complaints had been made against appellant's methods of operating his wrecking yard, in that the public area in the rear of the yard was constantly being used to repair and test automobiles, creating a public nuisance and a hazard to children. Finally, complaints had been made to the chief of police of the use by appellant's employees and visitors, on the premises, of intoxicants, whose empty bottles lay about the place.

The mayor having requested appellant to produce his proof and having offered to continue the hearing to a later day, Mr. Keller again stated that “until the witnesses making the complaints were presented” and subjected to cross–examination there was no evidence to refute. A vote was thereupon taken by the council, resulting in the unanimous revocation of appellant's license. Three days later he was notified by the city clerk that his business license had been revoked.

When the matter came on for hearing before the superior court Attorney Keller testified that the only evidence presented at the hearing before the city council was the letter from the chief of police, and that following the reading of such letter he had requested that the persons making the charges contained in the letter should be present to testify. Appellant was sworn but was precluded from testifying as to whether any complaints had been made to him with reference to the manner in which he conducted his business. He admitted that at the hearing before the city council that body was ready to hear any evidence that appellant might desire to offer. Also it was established at the trial that appellant had received proper notice of the proceeding to be had before the council and that he had in no way been prevented from introducing his evidence. Thereupon, following argument, respondent's motion for judgment of non–suit was granted.

The issuance of licenses for the operation of such places of business as that conducted by appellant is governed by section 42 of Ordinance 408 of defendant city, which is as follows:

“All licenses issued under this ordinance, or any section thereof, are granted and accepted by all parties receiving licenses with the express understanding that the City Council of said City may revoke the same at any time * * * if satisfied that any condition of the license or terms of this ordinance have been violated * * * or that the holder of any such license is an unfit person to be trusted with the privileges granted by such license; provided, however, that no license shall be revoked * * * without first giving the holder thereof an opportunity to appear before the City Council in his own behalf by notification in writing to the holder of such license, giving and fixing the time and place of such hearing * * *.” It follows that the power to revoke the license of appellant must be found within the cited ordinance. Barron v. Board of Dental Examiners, 109 Cal.App. 382, 293 P. 144; Schomig v. Keiser, 189 Cal. 596, 209 P. 550; Cavassa v. Off, 206 Cal. 307, 274 P. 523. Not all of the ordinance is contained in the record. Neither was proof made of other city ordinances which regulate the conduct of a licensee to operate a wrecking yard. In the absence of such enactments from the record we may assume that all of the “violations” specified in the chief's letter referred to city ordinances or to provisions of general statutes.

It is contended by appellant that a business license cannot be revoked without first giving the licensee notice and without granting him a hearing thereon, citing Carter v. Stevens, 211 Cal. 281, 295 P. 28; Irvine v. State Board of Equalization, 40 Cal.App.2d 280, 104 P.2d 847; Martin v. Board of Supervisors, 135 Cal.App. 96, 26 P.2d 843; Abrams v. Daugherty, 60 Cal.App. 297, 212 P. 942; Angelopulos v. Bottorff, 76 Cal.App. 621, 245 P. 447. In the instant case the record shows beyond a peradventure that appellant did receive notice of a hearing; that in response thereto he appeared before the city council at the time appointed; that he was there afforded the opportunity to present his evidence and even a willingness was expressed by the presiding officer to accommodate appellant's convenience by a postponement of the hearing.

The trial of a licensee by an administrative board for the revocation of his license is not governed by strict, technical, legal rules. It is indispensable to a proceeding before an administrative board that the accused licensee receive notice of the hearing which is called for the purpose of considering the revocation of his license, provided that upon his appearance before the board in response thereto he be permitted to testify and to produce his witnesses for the purpose of defeating the charges brought against him and the evidence introduced in support thereof. When these things are done, due process has been complied with and the proceedings of the board are in all respects legal.

It is contended that a license cannot be revoked by the city council upon hearsay evidence, citing Thrasher v. Board of Medical Examiners, 44 Cal.App. 26, 185 P. 1006; Dyment v. Board of Medical Examiners, 93 Cal.App. 65, 268 P. 1073; Martin v. Board of Supervisors, supra. These authorities are not in point. In the cases against the board of medical examiners hearsay evidence was held insufficient as a basis for revoking the medical license for the reason that the statute which created the medical board makes it a quasi judicial tribunal and requires legal proof for the conviction of an accused. In the Martin case the appellant was denied a license without a formal hearing, without the testimony of the appellant and without any legal proof. The hearing was held to be unofficial, arbitrary and irregular. Hearsay testimony alone may support the order of an administrative body. Independent Indemnity Co. v. Industrial Acc. Comm., 2 Cal.2d 397, 410, 41 P.2d 320; Sada v. Industrial Acc. Comm., 11 Cal.2d 263, 78 P.2d 1127. The weight to be given to it is for the determination of the board or commission. Sada v. Industrial Acc. Comm., supra. It is not necessary that an administrative board should enforce the strict requirement of the hearsay rule. That rule is not indispensable to the administration of justice.

But appellant misconceives the nature of such a proceeding as that under review by the trial court. He is not entitled to invoke the hearsay rule in such a proceeding. Upon his request for evidence, the letter from the chief of police was read in his presence. It itemized with meticulous care the numerous violations of the law which that officer found had been committed by appellant. The letter was prepared by the proper officer in the course of his official duties and every presumption is in favor of the lawful exercise of his duties by the chief of police. Code Civ.Proc. 1963, subd. 15; People v. Chambers, 22 Cal.App.2d 687, 719, 72 P.2d 746.

The council was entitled to assume that the findings of the city's principal law enforcing officer with reference to a matter that concerned his official duties were correct. Such findings had the same weight as that accorded to a city electrician who is authorized to determine whether an electrical installation is dangerous and upon whose opinion the city council might act requiring the dangerous condition to be eliminated. Gaylord v. Pasadena, 175 Cal. 433, 166 P. 348. In such proceedings before administrative boards, due process is complied with when the report of an officer or expert, appointed especially to investigate, survey and recommend, has been filed with the board as a part of the proceedings in the matter. There it reposes for the consideration of the board, for the inspection, answer and proof of those under rule to show cause, and for public information. Upon its presentation and filing, the burden shifts to the party affected by such report to show that the findings of such expert or official so reporting are unfounded. In re Willow Creek, 74 Or. 592, 144 P. 505, 146 P. 475; Pacific Live Stock Company v. Lewis, 241 U.S. 440, 454, 36 S.Ct. 637, 60 L.Ed. 1084. In the event the board attempts to act upon the mere ipse dixit of the officer who has made the investigation and survey and without a knowledge of his report and without hearing argument, due process is not complied with and the action taken would be based upon vicious hearsay and not upon facts found to exist. Evidence for a hearing may be taken and analyzed by a competent person duly authorized for the task. Assuming that this has been done and all other constitutional requirements have been complied with and the respondent has been allowed to present his proof, he then has no just ground for complaint. Ohio Bell Tel. Co. v. Public Utilities Comm., 301 U.S. 292, 57 S.Ct. 724, 81 L.Ed. 1093; Morgan v. United States, 298 U.S. 468, 56 S.Ct. 906, 80 L.Ed. 1288.

It has become a universal rule throughout America that quasi judicial functions may be entrusted to boards, commissions and agents to the end that the ever–increasing complexity of administrative affairs may be simplified and the business of our complex civilization expedited. The delegation of such powers to a city council or other duly constituted board must be done or the wheels of government would be so clogged and the public mind would become so confused that progress would be rendered extremely difficult, if not impossible. Gaylord v. Pasadena, supra.

When we consider the extent to which courts may go in reviewing decisions of administrative tribunals, the line of demarcation between review of decisions of boards having statewide jurisdiction and those having only limited, local jurisdiction is clear. A court hearing the application for mandate to secure the restoration of a license, revoked by order of an administrative board of state–wide jurisdiction, is required to exercise an independent judgment and, if requested, grant a trial de novo. Laisne v. California State Board of Optometry, Supreme Court, 19 Cal.2d –––, 123 P.2d 457, decided March 16, 1942. However, as pointed out in the Laisne case, that rule has no application to the review of decisions of administrative tribunals of local jurisdiction. Where the act of a local administrative board, such as the city council, involves discretion in the exercise of judgment concerning a matter of which it has jurisdiction, the courts cannot interfere unless it be shown that the tribunal has exceeded its powers or unless its discretion has been fraudulently or corruptly exercised. Berkeley High School District v. Coit, 7 Cal.2d 132, 137, 59 P.2d 982; Nickerson v. San Bernardino County, 179 Cal. 518, 177 P. 465. The findings of a board, whether of local or state–wide jurisdiction “come before the courts with a strong presumption in their favor based primarily on the disputable presumption contained in section 1963, subsection 15 of the Code of Civil Procedure ‘that official duty has been regularly performed.’ ” Drummey v. State Board, 13 Cal.2d 75, 86, 87 P.2d 848, 854.

The city council of San Gabriel was authorized to revoke the license of appellant if “satisfied that any condition of the license or terms of this ordinance have been violated.” This means nothing more than that the city council must honestly determine, upon evidence presented to it in an open hearing, in the presence of the licensee, that his conduct of the licensed business has violated the conditions of his license. So long as it is made to appear that satisfactory evidence was presented to the city council, at an opening hearing and in the presence of the accused, showing that the ordinance authorizing the license and other ordinances have been violated, and that the licensee was given an opportunity to present his defense, the trial court was without power to interfere with the order entered by the council revoking the license. Shorr v. City of Azusa, 38 Cal.App. 709, 177 P. 513; City of Stockton v. Frisbie & Latta, 93 Cal.App. 277, 270 P. 270. An action of the city council is presumed to have been correctly performed. City of South Pasadena v. San Gabriel, 134 Cal.App. 403, 417, 25 P.2d 516.

There appearing to have been neither a denial of due process nor an abuse of discretion on the part of the city council in revoking the license of appellant, the order of the trial court in granting the nonsuit is affirmed.

MOORE, Presiding Justice.

W. J. WOOD, and McCOMB, JJ., concurred.

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