MARTIN v. ALCOHOLIC BEVERAGE CONTROL APPEALS BOARD 2506 (1960)

This is an appeal from a judgment denying a petition for a writ of mandate or, in the alternative, a writ of certiorari sought by Thomas W. Martin, Director of the Department of Alcoholic Beverage Control (hereinafter referred to as ‘department’) to direct the Alcoholic Beverage Control Appeals Board (hereinafter referred to as ‘board’) to set aside its decision of October 5, 1959, reversing a decision by the department, and to affirm said latter decision.

On or about September 18, 1958, respondents Willard and Jacqueline Hayes, husband and wife, made application to the department for the transfer of an on-sale beer and wine license to the premises known as ‘The Den,’ located at 2506 Fillmore Street in San Francisco. On November 6, 1958, the department ordered that said application be denied on the grounds that the premises ‘are located within the immediate vicinity of a church and a school.’ Respondents Hayes subsequently requested a hearing on their application as provided for by sections 24011 and 24012 of the Alcoholic Beverage Control Act, Business and Professions Code, which hearing was held before an officer of the department. On January 23, 1959, said officer issued a proposed decision which denied respondents' petition on the ground that ‘[t]he applicant's [sic] premises are located within the immediate vicinity of a church, for which reason issuance of the license would be contrary to public welfare and morals.’ On February 5, 1959, the department adopted this as its decision.

Respondents Hayes then appealed this decision to the board, which reversed it on the ground that there was no evidence in the record demonstrating the ‘good cause’ upon which the department's exercise of its discretion must be based, other than that establishing the proximity of the premises to a church, and that therefore the evidence was insufficient to support the department's decision. Thereafter, petitioner sought the above-mentioned writs; the denial of them forms the basis of this appeal.

The evidence present at the hearing reveals that the applicants own and operate a small, good quality restaurant located at the aforementioned premises. Mr. Hayes manages the restaurant and does most of the cooking. Mrs. Hayes supervises the waitresses, and acts as a waitress herself. The restaurant is normally open between the hours of 9 a. m. and 10 p. m. seven days a week, and caters to the adult trade in the neighborhood. Its seating capacity is 68 persons, and it is the only restaurant of similar quality in the immediate vicinity. Approximately 75–80 percent of the applicants' business is done between the hours of 5 p. m. and 10 p. m. Mr. Hayes testified that the applicants wished a license to enable them to serve wine and beer with their meals to enhance their food to more of a gourmet's delight. The department's agent testified that the restaurant is not a ‘bar type of operation.’

The premises in question are located on the easterly side of Fillmore Street, just north of Jackson Street, and constitute the northernmost commercial premises within a 600 foot radius from its door. Along Fillmore Street, within that radius, the area south of Jackson is primarily commercial, the area north thereof primarily residential. The grocery store immediately to the south of the premises has an off-sale general license, as do six other stores within the 600 foot radius. Applicants' Exhibits H, I, K and L indicate that the adjacent store's front window prominently features a liquor display. One establishment with an onsale license for beer and wine is also located within the 600 foot radius, it being situated approximately one block south of ‘The Den’ on the westerly side of Fillmore Street. Aside from a school, a cleaning establishment and two grocery stores, the cross streets and surrounding area are otherwise entirely residential.

The Pacific Heights Grammar School is located around the corner from, but in the same block with, ‘The Den,’ the school being on the north side of Jackson Street. The shortest traveled distance between the two is approximately 196 feet. The Superintendent of Schools of the San Francisco Unified School District made official protest to the Hayes' original license application on the basis of this proximity, and the department's initial order of denial was based, in part, upon this ground. However, because there was no appearance on behalf of the school at the hearing, the hearing officer deemed such protest waived. His proposed decision, subsequently adopted by the department, stated that ‘[t]here is no substantial reason to believe that the granting of the license would interfere with the functioning of the school.’ Such was apparently based on the school's distance from the restaurant and the officer's finding that ‘[n]one of the school pupils patronize the applicant's [sic] premises since the type of business therein conducted is not attractive to children.’

The Calvary Presbyterian Church is located directly across Fillmore Street from the applicants' premises. Its front door faces that of ‘The Den,’ the distance between them being approximately 70 feet. The church parking lot is adjacent to the restaurant on the north. The church is used for normal church purposes. Its members patronize ‘The Den’ following church services on Sundays. At the commencement of the hearing, counsel for the department sought to introduce a letter from the Clerk of the Session of said church which was, in substance, a protest to the Hayes' application. However, the hearing officer excluded the letter on the ground that the church was not a party to the proceeding.

The extent of the respective powers and functions of the department and the board is now well settled in this state. Article 20, section 22, of the Constitution of the State of California provides that ‘[t]he Department shall have the power, in its discretion, to deny, suspend or revoke any specific alcoholic beverages license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals * * *.’ and that ‘[r]eview by the board * * * shall be limited to the questions whether the department has proceeded without or in excess of its jurisdiction, whether the department has proceeded in the manner required by law, whether the decision is supported by the findings, and whether the findings are supported by substantial evidence in the light of the whole record. * * * Orders of the board shall be subject to judicial review upon petition of the director or any party aggrieved by such order.’

The board's reversal of the department in this case was based on its ruling that the evidence was insufficient to support the deparment's decision. The Supreme Court in interpreting the above quoted language of the Constitution said in Martin v. Alcoholic Beverage Control Appeals Board, 52 Cal.2d 238, 242–243, 340 P.2d 1, 3:

‘The portion of the 1954 amendment defining the powers of the Department was cast in language similar to that previously used in defining the constitutional powers of the State Board of Equalization with respect to liquor control. Const., art. XX, § 22, as amended Nov. 6, 1934. In Covert v. State Board of Equalization, 29 Cal.2d 125, 173 P.2d 545, we compared the constitutional powers of the Board of Equalization to ‘those of a local administrative tribunal’ having quasi-judicial functions rather than those of a state-wide administrative agency created by statute; and we outlined the limited nature of the judicial review of decisions of the State Board of Equalization. * * * The portion of the 1954 amendment defining the ‘limited’ powers of the Appeals Board was cast in language quite similar in part to that used in section 1094.5 of the Code of Civil Procedure with respect to the limitations on judicial review of the decisions of those administrative agencies where the court was not authorized to ‘exercise its independent judgment on the evidence.’

‘In emphasizing the nature of the relative powers and functions of the Department and the Appeals Board, the language of the 1954 amendment makes it abundantly clear that the Department has ‘the exclusive power, * * * to license * * * [and] in its discretion, to deny, suspend or revoke’ any license. Then after defining the ‘limited’ powers of the Appeals Board, it further provides that no order of the Appeals Board shall ‘limit or control in any way the discretion vested by law in the department.’ In expressly limiting the powers of the Appeals Board, it was provided that ‘the board shall not receive evidence in addition to that considered by the department,’ and that ‘Review by the board of a decision of the department shall be limited’ to questions such as excess of jurisdiction by the Department and the sufficiency of the evidence and findings to support the decision of the Department.'

 If the department makes a finding that the granting of the application ‘would be contrary to public welfare and morals.’ as it did in the instant case and there is substantial evidence to show ‘good cause’ for such determination, the finding must be sustained. Martin v. Alcoholic Bev. etc. Appeals Bd., 52 Cal.2d 259, 341 P.2d 291, 294. Moreover, as is indicated from the foregoing quotation from the Martin case, the board is not empowered to exercise full discretion and independent judgment on conflicting evidence. The provision for the board's determination as to “whether the findings are supported by substantial evidence” signifies no more than the adoption of the ‘substantial evidence’ rule as generally applied in jury proceedings in the state. Martin v. Alcoholic Bev. etc. Appeals Bd., 52 Cal.2d 238, 340 P.2d 1, 6.

 That proximity of the premises sought to be licensed to a church does establish good cause for a determination that licensing such premises would be contrary to public welfare and morals has been specifically recognized by the California Legislature. This is clearly evident from the provision of section 23789 of the Business and Professions Code, which provides as follows: ‘The department is specifically authorized to refuse the issuance, other than renewal or ownership transfer, of onsale retail licenses for premises located within the immediate vicinity of churches and hospitals.’

In Schaub's Inc. v. Department of Alcoholic Beverage Control, 153 Cal.App.2d 858, 867, 315 P.2d 459, 465, the court affirmed a judgment denying appellant's petition for a peremptory writ of mandate to compel the department to set aside its decision denying appellant's application for the transfer of an off-sale retail general liquor license, made on the same grounds as those of the department in the instant case. The record indicated that appellant's premises consisted of a supermarket, and were located 100 feet across a street from the church. There was uncontradicted evidence that the area had experienced rapid commercial development. The adjoining street was to be widened to a 100-foot boulevard as a freeway feeder; 20,000 automobiles a day passed between appellant's store and the church property. The president of appellant corporation testified that he would not place any exterior signs advertising liquor on the premises, and that in their experience beverages purchased in a super food market are usually to be taken home rather than consumed nearby. Photographs were received in evidence showing numerous other markets with licenses near churches, which licenses were issued after the establishment of the church.

The court stated in Schaub, supra, ‘[o]n many occasions the courts have attempted to define ‘abuse of discretion.’ In Sharon v. Sharon, 75 Cal. 1, 48, 16 P. 345, 366, the court had this to say: ‘In a legal sense, discretion is abused whenever, in its exercise, a court exceeds the bounds of reason,—all the circumstances before it being considered.’ Bouv.Law Dict.Rawles Third Revision [Volume I] p. 94, defines ‘abuse of discretion’ as ‘A discretion exercised to an end or purpose not justified by and clearly against reason and evidence.’ Under either of the above, or any other definition with which our research has been rewarded, can it be said, as a matter of law, that under the facts and circumstances here present, the department abused. its discretion in denying appellant's application for an ‘offsale’ liquor license? We think not.'

‘In summarizing the more or less plenary powers of the department, Mr. Justice Pro Tem Vickers, speaking for the court in the case of Altadena Community Church v. State Board of Equalization, 109 Cal.App.2d 99, 106, 240 P.2d 322, 326, said:

‘The people in their wisdom have given appellant Board the exclusive power to determine under what circumstances it is or is not contrary to public welfare and morals to issue a liquor license. Such a determination is frequently a difficult one and not subject to hard and fast rules. The presence of churches in the vicinity of the premises in question is not in itself necessarily determinative. Different conclusions may properly be reached at different times or under different circumstances. The Board is wisely left free to act upon each application for a license as it comes before it.’

The court further observed in Schaub: ‘First of all, we are confronted with the rule announced in Crowley v. Christensen, 137 U.S. 86, 11 S.Ct. 13, 15, 34 L.Ed. 620 * * *, quoted with approval in Ritz v. Lightson, 10 Cal.App. 685, 688, 103 P. 363, 367, and which reads:

“* * * There is no inherent right in a citizen to thus sell intoxicating liquors by retail; it is not a privilege of a citizen of the state or of a citizen of the United States. As it is a business attended with danger to the community, it may, as already said, be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils. The manner and extent of regulation rest in the discretion of the governing authority. That authority may vest in such officers as it may deem proper the power of passing upon applications for permission to carry it on, and to issue licenses for that purpose. It is a matter of legislative will only.'

‘It is pertinent to observe that while the department may refuse an ‘on-sale’ license if the premises are in the immediate vicinity of a church (Business & Professions Code, Sec. 23789), there is no such provision or regulation by the department as to ‘off-sale’ licenses, nevertheless, we are satisfied that proximity of the licensed premises to a church may supply an adequate basis for denial of an ‘off-sale’ license as being inimical to public morals and welfare because, ‘while there may not be as much probability that an off-sale license in such a place would be as detrimental as an on-sale license, yet we believe a reasonable person could conclude that the sale of any liquor on such premises would adversely affect the public welfare and morals' (Weiss v. State Bd. of Equalization, supra, 40 Cal.2d [772] at page 776, 256 P.2d [1] at page 3).

‘We are impressed that because of the peculiar problems presented by traffic in liquor, there can be no question but that it is subject to regulation by the state in the exercise of its police powers. It therefore follows that regulations by way of exceptions in respect to churches and schools should be liberally construed in favor of such regulations and against applicants for license to sell liquor within prescribed areas.’

 Here the applicants' premises are within 70 feet of the church's doorway and directly opposite therefrom. As in the Schaub case, the church was already an established place of worship before the present application was instituted. Although in Schaub there were no other premises with any kind of liquor license within 100 feet of the area in question, the application there involved was for an off-sale license. Here, where applicants are requesting an on-sale license, the only license of that kind within the area is located a full block away from both the church and restaurant premises. The department concluded that to grant such a license in view of the facts as outlined above would be inimical to the public welfare and morals. The fact that both the Legislature and courts of this state have recognized that the licensing of premises to sell alcoholic beverages within the immediate vicinity of churches might be contrary to the welfare and morals of the publie establishes that this is a conclusion that a reasonable man might reach. ‘Since the power to determine the facts in licensing matters is vested in the Department and not in the Board, or the courts, a review of the action of the Department is governed by the familiar rule that where there is room for a reasonable difference of opinion with respect to the correctness of a finding of fact, it will not be disturbed by the reviewing tribunal. Neither the Board nor the courts may disregard or overturn a finding of fact of the Department of Alcoholic Beverage Control for the reason that it is considered that a contrary finding would have been equally or more reasonable.’ Bowman v. Alcoholic Bev. etc. Bd., 171 Cal.App.2d 467, 471–472, 340 P.2d 652, 655.

Respondents Hayes contend that the only question herein presented is whether or not the location of a restaurant which serves beer and wine across the street from a church is contrary to public welfare and morals. This is not the question. The issue here to be decided is whether or not the department abused its discretion in so determining under the facts of the instant case. Respondents Hayes rely heavily on Altadena Community Church v. State Board of Equalization, 109 Cal.App.2d 99, 240 P.2d 322, and Hasselbach v. Department of Alcoholic Beverage Control, 167 Cal.App.2d 662, 334 P.2d 1058, for the proposition that proximity of premises to a church does not alone establish ‘good cause’ for a determination that the granting of a license to such premises could be contrary to public welfare and morals. As pointed out in Schaub, supra, ‘[t]he Altadena church case presented a factual situation quite different from the one confronting us since the protesting churches in that case moved into a business district wherein a licensed premises had been operating for over 10 years and apparently the licensing board concluded that they could not justly complain that the welfare and morals of their parishioners would be in jeopardy, since they must take the neighborhood as they find it.’ Moreover, the court in the Altadena case stated in referring to section 13 of the Alcoholic Beverages Control Act (now Bus. & Prof.Code § 23789), as follows [109 Cal.App.2d 99, 240 P.2d 324]: ‘This section while authorizing the denial of a license because the premises involved are within the immediate vicinity of churches, etc., does not forbid the granting of a license if the premises are so located.’

 A careful review of both cases relied upon by respondents Hayes will disclose that the court found that the evidence before the licensing agency supported its decision that although the proposed premises were located within the immediate vicinity of a church, issuance of a license would not be contrary to public welfare or morals. Furthermore, neither case lends weight to respondents' position that by reaching an opposite conclusion under the facts here present the department abused its discretion. The burden of proof may properly be placed upon the applicant in application proceedings, but not in revocation proceedings. Martin v. Alcoholic Bev. etc. Appeals Bd., supra, 52 Cal.2d 259, 265, 341 P.2d 291. We therefore conclude that ‘[e]ven if it be conceded that reasonable minds might differ as to whether granting [of a license] would or would not be contrary to public welfare, such concession merely shows that the determination of the question falls within the broad area of discretion which the Department was empowered to exercise.’ Martin v. Alcoholic Bev. etc. Appeals Bd., 52 Cal.2d 238, 248, 340 P.2d 1, 7. Here as in the Martin case, ‘the act of the Appeals Board in reversing the decision of the Department on the ground that the findings were not supported by substantial evidence in the light of the whole record ‘was erroneous as a matter of law and constituted action by said Appeals Board in excess of its jurisdiction.’' (ID. 52 Cal.2d 247, 340 P.2d 6.)

The judgment of the trial court is reversed and the court is instructed to issue a peremptory writ of mandate to the Appeals Board, as prayed for by the petitioner.

We concur:

McGOLDRICK, Justice pro tem.

DRAPER, Acting P. J., and SHOEMAKER, J., concur.