Title: SOUTHERN BT & T. CO. v. Nineteen Hundred One C. Corp.
Citation: 83 So. 2d 865
Docket Number: N/A
State: Florida
Issuer: Florida Supreme Court
Date: November 2, 1955

83 So. 2d 865 (1955)
SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Joe H. Adams, as Florida State Hotel Commissioner, and Richard W. Ervin, as Attorney General of the State of Florida, Appellants,
v.
NINETEEN HUNDRED ONE COLLINS CORPORATION, a Florida corporation, Appellee.

Supreme Court of Florida. En Banc.
November 2, 1955.
Rehearing Denied January 6, 1956.
*866 Richard W. Ervin, Atty. Gen., George E. Owen and John C. Reed, Asst. Attys. Gen., for appellants.
Walton, Lantaff, Schroeder, Atkins, Carson &amp; Wahl, Miami, E.W. Smith, John A. Boykin, Jr., and Graham W. George, Atlanta, Ga., for Southern Bell Tel. &amp; Tel. Co.
Burnett Roth, Miami Beach, for appellee.
THORNAL, Justice.
The appellants here were defendants in the Circuit Court in a chancery proceeding instituted by the appellee seeking an injunction against the enforcement of Chapter 365, Florida Statutes 1953, F.S.A., and Section 561.291, Florida Statutes, F.S.A. From a decree of the Chancellor declaring the cited statutes to be unconstitutional, this appeal was perfected.
Chapter 365, F.S., F.S.A., is the so-called "anti-bookie law" aimed at the control of bookmaking and other illegal gambling through the use of telephone, telegraph and other wire services. Section 561.291, F.S., F.S.A., is an act of the 1951 Legislature authorizing the revocation of a beverage or hotel license upon the removal or termination of communication facilities when the same have been used for illegal gambling. In the instant case the Attorney General of Florida on March 12, 1954, notified appellant, *867 Southern Bell Telephone and Telegraph Company, that the "customary telephone service" furnished by it to the Shore Club Hotel, operated by appellee, was being "used in violation of the laws of Florida, particularly the gambling laws". Thereupon the telephone company advised the hotel that it would terminate its customary telephone service on March 17, 1954, as required by Chapter 365, supra.
Before the telephone service was actually terminated, the appellee corporation instituted this proceeding by a complaint in equity seeking a temporary injunction and ultimately a permanent injunction against discontinuance of its customary telephone service. The complaint, with various amendments, alleged that telephones were not being used in violation of the gambling laws; that the appellee operated the hotel under a 99-year lease which was a valuable property right; that a hotel could not remain in operation without customary telephone service; that if its telephone service were terminated, its license to operate a hotel would be canceled under Section 561.291, supra; that there was a provision in the lease for cancellation thereof by the lessor in the event that any unlawful business should be operated on the premises; and that the lessee was then preparing to borrow money to finance extensive improvements in the hotel facilities and that such financing would be prevented by the termination of its telephone service. The proposed action of the telephone company was attacked on the basic ground that the telephones were not being illegally used and on the further grounds that Chapter 365, supra, violates the due process requirements of Sections 1 and 12 of the Declaration of Rights of the Florida Constitution, F.S.A., and the equal protection requirements of Amendment XIV to the Constitution of the United States in that it discriminates between "private wire services" and "customary telephone service" as to the procedure for revoking same; that the same organic provisions are violated by both Chapter 365, supra, and Section 561.291, supra, because of alleged lack of an opportunity to be heard before cancelling the telephone service or revoking the hotel license; that the title to Chapter 26820, Laws of Florida 1951, is defective in violation of Section 16, Article III, Florida Constitution, and that Chapter 365, supra, is a bill of attainder violative of both State and Federal Constitutions.
By the final decree the Chancellor concluded that Chapter 365, supra, and Section 561.291, supra, as applied to customary telephone subscribers such as the appellee violate Section 12 of the Declaration of Rights of the Florida Constitution and the Fourteenth Amendment to the Constitution of the United States because of the alleged lack of a hearing and were, therefore, invalid. The Chancellor did not pass upon the question of whether the telephones were actually being used for gambling purposes.
A permanent injunction was entered against the telephone company and the Attorney General enjoining any action "against customary telephone subscribers such as plaintiff" under Chapter 365, supra, and enjoining permanently the Florida State Hotel Commission from taking any action "against customary telephone subscribers such as plaintiff" under Section 561.291, supra.
This appeal presents the question of the correctness of the ruling of the Chancellor in holding the cited statutes to be contrary to the cited organic provisions of the State and Federal Constitutions.
After a very careful consideration of able briefs filed by the respective parties, we have concluded that the acts under attack are constitutional and that the Chancellor committed error in holding to the contrary.
Chapter 365, F.S., F.S.A. was originally enacted as Chapter 25016, Laws of Florida 1949. As so passed, this act applied in a limited sense to so-called "private wire service". By Chapter 26820, Laws of Florida 1951, the original act was amended in order to regulate so-called "customary telephone service". By Section 15 of the original act it is specifically provided that "This chapter shall be deemed an exercise of the police power of the State of Florida *868 for the protection of the public welfare, health, peace, safety and morals of the people of the State of Florida, and all of the provisions of this chapter shall be liberally construed for the accomplishment of this purpose". An identical provision is included in Section 561.291, supra, which was enacted in 1951 as Chapter 26773.
It is perfectly obvious from an examination of these statutes and their legislative history that they were leveled at the control and ultimate elimination of illegal gambling commonly known as bookmaking. By the passage of the acts, the Legislature necessarily determined that such illicit gambling constituted a vice which justified the exercise of the State's sovereign police power in the interest of the public welfare. An incidental consideration which this Court can judicially recognize is the fact that a substantial source of state income is pari-mutuel betting legitimately conducted at horse and dog race tracks and jai alai frontons. The conduct of bookmaking operations which these acts are intended to control constitute an ever-present encroachment upon this legitimate source of state revenues for the reason that the bets illicitly placed with the bookmaker do not pass through the pari-mutuel machine and the State is thereby deprived of its proper share of the revenues to be derived from pari-mutuel betting. The acts therefore constitute an exercise of the police power to protect the public against the vices of illicit gambling and to establish a safeguard around the public treasury.
Because of the fact that a decision on the constitutionality of the statutes under attack could have far-reaching public results, it appears appropriate to review in summary the several cases which have been before this Court involving these statutes.
In McInerney v. Ervin, Fla. 1950, 46 So. 2d 458, 461, an attack was directed against the constitutionality of the "private wire service" provisions of Chapter 365, supra. In sustaining the act against the contention that it violated the interstate commerce provisions of the Federal Constitution, Mr. Justice Terrell, by his opinion, discussed objectives sought to be accomplished by the statute and further stated:
By this first opinion dealing with the questioned statute as originally written this Court recognized the broad and comprehensive expanse of the State's police power and the justifiable exercise of the power in the interest of public welfare.
Subsequently in 1950 in the case of Dade County News Dealers Supply Co. v. Florida Railroad &amp; Public Utilities Commission, Fla., 48 So. 2d 89, 91, we sustained a regulation of the Florida Railroad &amp; Public Utilities Commission which for all practical purposes was identical with the language of Section 365.08, F.S., F.S.A., here under attack and which was added to the original act by the legislative enactment of 1951 cited above. By this decision this Court committed itself to the view that the Commission *869 rule was reasonable and enforceable and in the enforcement of the rule we clearly stated that "The Attorney General is clothed with broad power in protecting the public from crime and there must be some showing that he is acting illegally" in order to defend successfully against the enforcement of the rule. Under this rule it was provided that if customary telephone service was discontinued because of its use for gambling purposes, the subscriber to the service could appeal to the Railroad &amp; Public Utilities Commission for a restoration of its service upon a showing that the service would not be so used illegally in the future. It was in this decision that the Court announced the proposition that "if equities are shown to be involved a court of equity would have jurisdiction" to enjoin cancellation of the service in a suit brought before the service was actually cancelled. The conclusion sustaining the rule for a hearing before the Commission after discontinuance of service upon proper showing, was grounded specifically on the further proposition that conditions might arise where a party whose service is ordered to be discontinued would be entitled to a hearing before the order is effectuated and that such showing should be based on an equitable right justifying the intervention of a court of equity to prevent irreparable damage. In this decision the Florida Court committed itself to the holding that the opportunity that is available to enter a court of equity and prevent official action which could be unjustifiably harmful, adequately preserves and gives full recognition to the organic requirements of due process.
We further point out that under this decision recognizing the jurisdiction of a court of equity under the circumstances there mentioned, it is not required that any special or peculiar equity be shown in order to sustain the jurisdiction of the Court if invoked prior to discontinuance of the service.
In Southern Bell Tel. &amp; Tel. Co. v. State ex rel. Transradio Press Service, Fla. 1951, 53 So. 2d 863, 866, an effort was made by a mandamus proceeding to compel the telephone company to install teletypewriter service and connect the service with a radio station. The telephone company defended on the ground that the Florida Railroad &amp; Public Utilities Commission had directed it to decline the service and the Attorney General also defended on the ground that the service would be used to convey gambling information. We there held that the burden was on the press service to show that the requested special wire service would not be used for gambling purposes and that despite the fact that Chapter 365, F.S., F.S.A., places the consideration of such matters under the jurisdiction of the Railroad &amp; Public Utilities Commission, nevertheless, "The act does not prohibit the use of appropriate remedies before the court * * *." We thereupon proceeded to dispose of the cause on the merits and refused the issuance of a peremptory writ of mandamus.
We next come to the case of King v. Seamon, Fla. 1952, 59 So. 2d 859, 861. This case involved Section 365.08, F.S., F.S.A., which, as pointed out above, was enacted by the 1951 Legislature and is identical with the prior rule of the Railroad &amp; Public Utilities Commission regulating customary telephone service which rule was sustained in Dade County News Dealers Supply Co. v. Florida Railroad &amp; Public Utilities Commission, supra. This was a proceeding in equity to enjoin the disconnecting of customary telephone service under the provisions of the 1951 Act, the same being the act which is under attack in the case at bar. A preliminary injunction was issued prohibiting the disconnecting of the service and an order was entered by the Chancellor directing the Railroad &amp; Public Utilities Commission to conduct a hearing as to whether telephone service should be disconnected. In an opinion by Mr. Justice Roberts we recognized the validity of Section 365.08, F.S., F.S.A., which the Chancellor in the case at bar has held to be unconstitutional, but we further held that the Railroad &amp; Public Utilities Commission has no jurisdiction until the customary telephone service has actually been disconnected. In commenting on Dade County *870 News Dealers Supply Co. v. Florida Railroad &amp; Public Utilities Commission, supra, we held:
It should be noted that in King v. Seamon, supra, this Court committed itself to the view that the previous rule of the Railroad &amp; Public Utilities Commission, which later became and is absolutely identical with Section 365.08, F.S., F.S.A., "was reasonable and within the authority of the Commission to adopt * * *." We further again recognized that it was appropriate for the offended customary telephone service user to appeal to a court of equity to enjoin the disconnecting of his telephones if he had any equitable basis for such appeal. We, in effect, held that he could so proceed as a matter of right, not mere grace, if he moved before the service was terminated.
In Holloway v. Schott, Fla. 1953, 64 So. 2d 680, 681, a Director of the State Beverage Department was proceeding to revoke a liquor license under Section 561.291, F.S., F.S.A., likewise under attack in the case at bar. This statute is applicable to the holder of a liquor license as well as to the holder of a hotel license and under the act either might have his license revoked by the Department supervising the operation of the business where it is shown the telephone service used by the business has been discontinued because of violation of the gambling laws. In an opinion by Mr. Chief Justice Drew we held that a liquor license is not property in the constitutional sense. We quoted from State ex rel. Hoffman v. Vocelle, 159 Fla. 88, 31 So. 2d 52, wherein it was held:
We concluded this opinion by specifically holding that Section 561.291, F.S., F.S.A., is constitutional. We so held with the following language, to-wit:
In converse this ruling leads us to the conclusion in the case at bar that the Chancellor below committed error in holding the same identical act to be unconstitutional.
Peters v. Southern Bell Tel. &amp; Tel. Co., Fla. 1954, 70 So. 2d 547, was another proceeding in equity brought to enjoin the telephone company from discontinuing the customary telephone service in the plaintiff's motel under the provisions of Chapter 365, F.S., F.S.A. The temporary injunction was denied and the denial was sustained by this Court on certiorari. After the denial of the temporary injunction, service was discontinued by the telephone company which thereupon filed a motion for a summary decree on the ground that upon the discontinuance of the service, jurisdiction over the matter shifted to the Railroad &amp; Public Utilities Commission. The complaint in the injunction proceeding was amended to allege that the plaintiff had only recently acquired the motel and that he had no knowledge at all of the use of the telephone for gambling purposes. The *871 Chancellor retained jurisdiction but held that the lack of knowledge on the part of the owner was not sufficient to preclude the discontinuance of the telephone service, which admittedly had been used for gambling purposes. We held that the Chancellor properly retained jurisdiction for a full determination of the cause and correctly denied the injunction. It was in this decision that this court used the expression "special equities" as being the basis for an appeal to a Court of equity to prevent the discontinuance of customary telephone service. An analysis of the factual situation will reveal that the expression "special equities" was employed as a condition precedent to sustaining the jurisdiction of the Court in a situation where it was admitted that the telephones were being used for gambling purposes. Apparently this expression has caused some confusion in the consideration of subsequent cases involving requests for injunctions against the discontinuance of customary telephone service where there is a factual dispute as to whether the telephones are actually being used for gambling purposes and such illegal use is denied.
The summary of our previous holdings is simply that where admittedly the telephones are used for gambling purposes, some peculiar or unusual equity will be necessary in the chancery court to forestall the discontinuance of the service. On the other hand, where the use of the telephones for gambling is in dispute, then at any time before the service is discontinued a person who considers himself to be threatened by an unjustifiable discontinuance of his service may proceed in a court of equity to show such lack of justification and thereby sustain the issuance of a restraining order that will prevent the termination of his customary telephone service.
In our view and particularly because of the nature of the regulation here involved, as well as the objectives to be accomplished by the statutes involved, this privilege of going into equity meets the organic requirements of due process.
With further reference to Section 561.291, F.S., F.S.A., we should remain mindful of the fact that under the decisions of this Court the hotel business is one "affected with a public interest" which means that the operation of the business directly affects the health, safety and welfare of the people and that the public is interested to such an extent that reasonable laws can or may be enacted for the control and regulation of the particular class of business. The extent to which such a business may be properly regulated varies with different kinds of businesses. The importance of the hotel industry to the economy of the State of Florida is a matter which we judicially know. The Legislature has recognized this in many ways by the enactment of laws for the protection and regulation of the business as well as various aspects of this operation. Indeed, by the very enactment of Section 561.291, F.S., F.S.A., the Legislature in its wisdom classified the hotel business with the intoxicating beverage business as a fit subject for special regulation in the interest of controlling the operation of illicit bookmaking. This calls for a consideration of the proper exercise of the police power of the State as applied to the particular business involved.
In State ex rel. Hosack v. Yocum, 136 Fla. 246, 186 So. 448, 451, 121 A.L.R. 270, we relied upon an earlier opinion of the late Mr. Justice Whitfield for the following authoritative pronouncement on the relationship between the requirements of the organic law and the exercise of the State's sovereign police power, to-wit:
The case last cited not only supports the conclusion that Chapter 365, F.S., F.S.A., and Section 561.291, F.S., F.S.A., are consistent with the requirements of due process but further sustains our conclusion, which we here announce, that Section 365.08, F.S., F.S.A., does not violate the Fourteenth Amendment to the Constitution of the United States with reference to preservation of equal protection of the laws. In its wisdom the Legislature has classified "private wire service" and "customary telephone service" as being subjects for regulation insofar as the enforcement of the gambling laws is concerned. We are of the view that the classification is adequately justified by the nature of the utilities involved as well as by the nature of the subject to be regulated and the types of service are sufficiently different to justify different regulations.
Our analysis of the prior decisions of this Court and the conclusions which we have here reached are further strongly supported by the decision of the United States Court of Appeals in Fay v. Miller, 87 U.S.App.D.C. 168, 183 F.2d 986, 989, wherein it was held:
The case last cited involved the enforcement of the regulation of a telephone company which had been approved by the *873 Maryland Public Service Commission and which for all practical purposes was very similar to the statute here under attack.
The ways and methods of those who would devise schemes to evade or violate the laws are devious. The police power is an element of sovereignty reserved by the states to enable them to cope with any malignancy that threatens the body politic. By the statutes under attack the Legislature has supplied the Attorney General, a constitutional officer, with a legal instrument which in the legislative judgment will enable him to carve out the malignant growth and thereby prevent its spread. We are not to assume that he will abuse the powers of his office. Until the contrary is shown we must assume that he will perform the duties of his office in the interest of the public good and in a fashion prescribed by the organic law and within the restrictions announced by the Courts in interpreting the law. We find nothing in this record to justify a conclusion that the constitutional rights of the appellee have been violated.
We have considered the objection to the title of Chapter 26820, Laws of Florida 1951, and find that the title meets the requirements of Section 16, Article III of the Florida Constitution. What we have heretofore said disposes of the contention that Chapter 365, supra, is a bill of attainder, adversely to appellee.
On the final contention of the appellee that Chapter 365, F.S., F.S.A., is a penal act which fails to describe the offense with sufficient definiteness, it is sufficient to say that it is our view that such offense as is defined by Chapter 365, F.S., F.S.A., is adequately delineated by the language of the act and leaves no doubt as to the offenses thereby condemned.
In conclusion we hold that Chapter 365, F.S., F.S.A., and particularly Section 365.08, F.S., F.S.A., and Section 561.291, F.S., F.S.A., are constitutional and meet all of the requirements of the organic law.
This cause having been heard by the Chancellor who had an opportunity to view all of the witnesses and consider their credibility and the weight of their testimony as given from the witness stand, and the final decree having been based entirely upon a finding that the acts in question were unconstitutional without a determination on the merits of the case itself, the final decree is hereby reversed and the cause hereby remanded to the lower Court for such further proceedings as are consistent with this opinion.
DREW, C.J., and TERRELL and THOMAS, JJ., concur.
HOBSON, ROBERTS and BUFORD, JJ., dissent.
HOBSON, Justice.
I am constrained to dissent from the majority opinion in this case. The learned chancellor who heard this cause in the circuit court rendered a final decree in which he expressed his opinion with reference to the constitutionality of Chapter 365 and Sec. 561.291, Florida Statutes, 1953, F.S.A.
I quote from the final decree:
I concur in the views expressed by the chancellor.
ROBERTS and BUFORD, JJ., concur.