MUNRO v. Helen M. Richards, Appellant.*

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District Court of Appeal, Third District, California.

Russell S. MUNRO, Director of the Department of Alcoholic Beverage Control, State of California, Petitioner and Respondent, v. The ALCOHOLIC BEVERAGE CONTROL APPEALS BOARD of the State of California and Helen M. Richards, Respondent, Helen M. Richards, Appellant.*

Civ. 9335.

Decided: September 23, 1958

Richard tum Suden, San Francisco, for appellant. Edmund G. Brown, Atty. Gen., by William T. Chidlaw, Deputy Atty. Gen., for respondent.

This is an appeal from a judgment affirming the decision of the Department of Alcoholic Beverage Control and reversing the decision of the Alcoholic Beverage Control Appeals Board.

Appellant applied for an on-sale beer license for a small restaurant which she owned and operated. Approval of the application was recommended by an investigating officer of the department. However, protests were filed by residents in the vicinity and, after a hearing thereon, an officer of the department found that the premises were in a residential area; that there were inadequate off-the-highway parking facilities and that issuance of the license would be contrary to the public welfare and morals. His recommendation that the protest be sustained and the application denied was adopted by the department. Upon appeal from the decision, the Alcoholic Beverage Control Appeals Board, hereinafter referred to as the Appeals Board, found that the findings of fact were not supported by substantial evidence in the light of the whole record, and the decision of the department was reversed. The department petitioned for a writ of mandate to compel the Appeals Board to reverse its decision and reinstate that of the department. As the interested party, appellant appeared and answered in the mandamus proceedings, wherein the trial court found that the reversal of the decision of the department by the Appeals Board on the ground that it was not supported by substantial evidence was erroneous, arbitrary and capricious and constituted a prejudicial abuse of discretion, and judgment was entered accordingly. This appeal followed.

Appellant first contends that the trial court erred in looking to the department's decision to determine if it was supported by substantial evidence, since it was the decision of the Appeals Board that was under attack. There is no merit in this contention. The rule of law applicable to the review of the decisions of the Department of Alcoholic Beverage Control is stated in Brice v. Department of Alcoholic Beverage Control, 153 Cal.App.2d 315, 320, 314 P.2d 807, 810, as follows:

‘* * * That agency is a constitutional agency that has succeeded to some of the powers of the State Board of Equalization in alcoholic beverage control matters. Being an agency upon which the Constitution has conferred limited judicial powers, its decisions on factual matters must be affirmed if there is substantial evidence to support them. Cal.Const., art. 20, sec. 22; Covert v. State Board of Equalization, 29 Cal.2d 125, 173 P.2d 545; Kirchhubel v. Munro, 149 Cal.App.2d 243, 308 P.2d 432; Molina v. Munro, 145 Cal.App.2d 601, 302 P.2d 818; Dethlefsen v. State Board of Equalization, 145 Cal.App.2d 561, 303 P.2d 7; Griswold v. Department of Alcoholic Beverage Control, 141 Cal.App.2d 807, 297 P.2d 762. In other words, on the mandamus proceeding, the trial court was not permitted to exercise an independent judgment on the facts, as it may do in reviewing the findings of legislatively created state-wide administrative agencies, but was required to give to the factual determinations of the appellant the same deference that an appellate court must give to the findings of a trial court. Thus, the trial court was simply called upon to determine whether the findings of the Board were supported by substantial evidence.’

There is nothing in Section 23084 of the Business and Professions Code or in Article XX, Section 22, of the California Constitution which warrants departure from that rule, nor is there any reason why the rule should not control the Appeals Board on appeal to that body. Thus, the Appeals Board was simply called upon to determine whether the findings of the department were supported by substantial evidence in the light of the whole record. It was not permitted to exercise and independent judgment on the facts as contended for by appellant.

More serious questions are presented upon the issues as to (a) whether there is substantial evidence in the record to support the findings that the area is residential in nature and does not afford adequate off-the-road parking facilities, and (b) if so, whether the denial of an on-sale beer license constituted an arbitrary abuse of the discretion vested by the California Constitution in the department.

Before discussing the facts, a brief reference should be made to the rules of law which we feel are applicable to a determination of the question.

It is well established that the decisions of the department are final, except that they are subject to review for excess of jurisdiction, error of law, abuse of discretion and insufficiency of evidence. Covert v. State Board of Equalization, 29 Cal.2d 125, 173 P.2d 545. It was held in Schaub's, Inc., v. Department of Alcoholic Beverage Control, 153 Cal.App.2d 858, 864, 315 P.2d 459, that when the jurisdiction of the department to grant or refuse a transfer of a license (in this case the granting of a license) depends upon the establishment of an ultimate fact (in the instant case that it would be contrary to the public welfare and morals by reason of appellant's premises being in a residential district, and that off-the-highway parking facilities would be inadequate) the reviewing court may examine the evidence upon which the findings of the department to that effect are based, and if the findings of the department are contrary to the evidence, read as a whole, or are without meritorious support in the evidence, they, like those of a trial court, may be set aside and the decision based thereon may be set aside.

Tested by these rules, we feel that the findings are supported by substantial evidence in the light of the whole record and that the decision of the department must be upheld.

The record discloses the following facts: Appellant's premises and restaurant are located on the westerly side of a 1200-foot segment of the old Auburn highway about 6/10ths of a mile south of the city limits of Grass Valley. The distance between the two roads varies up to 150 feet and the old road joins the new highway at each end. There are nine residences within the immediate area and there are children of school age living in some of the homes. Seven of the homes are situated east of the old road, ranging in distance from about 100 to 300 feet from the appellant's restaurant. The other two are immediately to the north of appellant's premises. One resident conducts a sand and gravel business from his home, using 7 or 8 trucks in such business, which trucks he parks on his premises. Apparently, however, he does not store sand and gravel on the premises. Another operates a chimney sweep and septic tank service from his home, using a ‘pick-up truck’. The property 50 feet to the north of appellant's restaurant is occupied by auto wreckers and is maintained as a junk yard, where cars are dismantled as late as 9 or 10 o'clock at night during the summer months. Another junk yard is maintained some 400 feet northwesterly of appellant's premises. In the immediate area is what one witness described as a sheet-iron garage which is used as a welding and maintenance shop by the occupant for the maintenance of trucks which he uses in logging or lumber operations. Chickens and rabbits have been raised for sale by one of the occupants within the immediate vicinity and although the premises were not being used for that purpose at the time of the hearing before the hearing officer the two barns which were used in the business are still on the premises. There is also testimony that 12 to 15 cars may ‘conservatively’ be parked on appellant's property between the road and the restaurant. The above facts are taken from the ‘Report on Application for License’ and the transcript of the testimony taken before the hearing officer for the department.

At the conclusion of the hearing the parties entered into the following stipulation:

‘The Hearing Officer: I take it there is no objection to the hearing officer viewing the neighborhood and making observations.

‘Mr. tum Suden: No.

‘Mr. Todd: We would appreciate [it] if you would.

‘The Hearing Officer: It will be submitted then.’

After viewing the neighborhood and observing the existing conditions, the hearing officer made the following findings of fact, presumably based upon his observations: ‘The applicant's premises are in a residential neighborhood.’ ‘The circumstances show that ordinary noises incidental to even orderly operation of the applicant's premises will result in substantial annoyance to the occupants of the homes on the easterly side of the road * * *. Parking space for automobiles is provided between the front of applicant's building and the road. The applicant estimates that 15 cars could be parked in the area, but inspection * * * made pursuant to stipulation revealed that it would not be practicable to park that many cars. The parking area would be inadequate to accommodate sufficient cars for any substantial amount of patronage. The parking of cars along the road would create a traffic hazard.’

Under the findings in this matter we cannot say that the department's conclusion and determination that the granting of the license would be ‘contrary to the public welfare and morals' are not amply supported. Especially is this so when we consider the finding made by the hearing officer based upon his observations. While what he saw and observed is not carried into the transcript except as reflected in the findings, his inspection was made pursuant to the stipulation of the parties and we must assume that he saw what he reported. The record supports the finding that the area is residential, at least primarily so. The fact that there are two junk yards within the area, a garage building used as a private welding and maintenance shop by one of the residents and that the occupants of two of the homes have used their respective homes to carry on their businesses does not negative the finding that the area is residential.

While there is no inhibition in the Constitution, or in the Alcoholic Beverage Control Act, or in the rules adopted by the department against the granting of an on-sale beer license in a residential area, nevertheless when the facts, as in the instant case, show that the applicant's premises are not a proper place to have a license by reason of circumstances such as noises incident to even the ordinary operation of the business, annoyance to occupants of the homes within the area, the insufficiency of parking area and the creation of a traffic hazard in case cars are parked along the road contiguous to applicant's premises, the department unquestionably has the inherent power under the statute to deny an application for a license.

The judgment is affirmed.

WARNE, Justice pro tem.

VAN DYKE, P. J., and SCHOTTKY, J., concur.

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