Court Opinion

ID: 5044593
Source: CourtListenerOpinion
Date Created: 2021-10-01 07:09:31.569511+00
Date Added: 2024-06-11T08:18:43.380485
License: Public Domain

COOPER and HARBISON, Justices
(dissenting).
There are two issue involved in this case; (1) whether municipal corporations have any authority to regulate the sale of intoxicating liquors within their limits and (2) whether or not the ordinance of the City of Chattanooga restricting the sale of alcoholic beverages to a specified zone is arbitrary or unreasonable. The undersigned are firmly of the opinion that municipal corporations do have authority to regulate by ordinance the sale of alcoholic beverages within their limits and that T.C.A. § 57 — 121, as amended in 1949, does not prohibit cities from exercising such control. This Court has so held both before and since the enactment of T.C.A. § 57 — 121 in its present form, and explicitly so held in 1956, as hereinafter pointed out. The General Assembly has met either biennially or annually since the rendition of the opinion of this Court in the case of Safier v. Atkins, 199 Tenn. 574, 288 S.W.2d 441 (1956), and if that holding were not in conformity with the intent of the General Assembly, it seems clear to us that that body would have taken appropriate action in the intervening years. It has not done so, and in the meanwhile municipal corporations have relied upon the statute, as construed by this Court, as they were entitled to do, and we cannot now agree to a construction of the 1949 legislation which would remove or further limit the regulatory authority of municipal governments.
With respect to the second issue, as hereinafter pointed out, the Chattanooga ordinance was enacted in 1947 and has been subsequently amended on several occasions. It was expressly held valid and reasonable in these very proceedings upon this very same application for a license by the same applicants at the same location, and its holding was upheld by the court below. No appeal was taken. The applicants then filed a second application, and without any showing of a change in circumstances, either with regard to the applicants, their proposed location, or the ordinance, the Alcoholic Beverage Commission held the ordinance invalid and unreasonable. This posi*484tion was also sustained by the trial court. We believe that the following statement fairly summarizes the pertinent facts in this record.
The Poseys have been operating a retail liquor store at 1639 Rossville Avenue in Chattanooga, Tennessee, since 1970. In 1971 Rossville Avenue was bisected and blocked by construction in a railroad relocation project and vehicular traffic on Ross-ville Avenue decreased noticeably. As a consequence, the Poseys sought to relocate their liquor store and settled upon the Hix-son Pike location, which is in a general commercial area in the northern part of the City.
In May 1971, the Poseys filed an application with the City for a certificate of good moral character to operate a liquor store at the new location. (Such certificate is a prerequisite to obtaining a license to sell alcoholic beverages). The City Commission refused to grant the certificate on the ground the proposed location for the store was outside the area of the City designated by ordinance for the location of retail liquor stores.1
*485The Poseys then filed suit in the Chancery Court of Hamilton County on March 14, 1972, seeking to have the chancellor order the City to issue them a certificate of good moral character. On motion of the City, the chancellor dismissed the complaint without prejudice on the theory the Poseys had failed to exhaust their administrative remedies pursuant to T.C.A. § 57 — 121.
The Poseys did not appeal from the Chancellor’s ruling, but instead filed a petition with the ABC alleging that the refusal of the City to issue the certificate was wrongful, illegal and arbitrary in that it was based upon an ordinance of the City which, in the words of the petition, “merely arbitrarily designate certain streets in the City where retail liquor stores are permitted, and arbitrarily prohibit them from locating in any other place in the City. The ordinances are totally void of any type of objective regulations or reasonably ascertainable criteria.”
After a hearing on the petition, the ABC concluded “the certifying authority of the City of Chattanooga has not acted illegally, wrongfully, or arbitrarily in refusing a certificate of good moral character for a location outside the area specified in its liquor zoning ordinances,” and dismissed the petition.
The Poseys sought a review of the action of the ABC by petition for writs of certiora-ri and supersedeas filed in the Circuit Court for Davidson County. On hearing the petition, that court upheld the action of the ABC.
The Poseys did not appeal from the ruling of the circuit court, but returned to Chattanooga and filed a second petition for a certificate of good moral character. The City again declined to issue the certificate, with the result that the Poseys again petitioned the ABC pursuant to T.C.A. Section 57 — 121. This time, the ABC held:
“[T]he denial to petitioners of a certificate of-good moral character to operate liquor store at a point within a vast commercial area of Chattanooga not containing a single licensed establishment, was so arbitrary, unreasonable and restrictive as to conflict with and frustrate T.C.A. Sec. 57-111, which contemplates the lawful sale of alcoholic beverages . . . ”
, and granted a certificate of good moral character to the Poseys.
This time, the City filed a petition for certiorari and supersedeas in the Circuit Court of Davidson County. On hearing the petition, that court found “that the ABC could legally conclude that the liquor zone regulations of the City are so arbitrary and oppressive as to be in conflict with the authority of the ABC to grant retail licenses. Therefore the ABC in granting a license to Mr. Posey did not act illegally or arbitrarily.” The City’s petition then was dismissed.
The primary question on appeal is: Did the ABC act illegally or arbitrarily in granting a certificate of good moral character to the Poseys to operate a liquor store at 4027 Hixson Pike in Chattanooga, Tennessee? To answer this question, it is necessary to determine the authority of the City to regulate the sale of intoxicating liquors within its limits, and the scope of review of the City’s actions by the ABC.
At the outset it should be noted that the City conceded in the earliest stage of this action that the Poseys are of good moral character, and that the refusal of the City to grant them a certificate was predicated solely on the fact that the proposed store location is outside the area prescribed by City Ordinance for location of retail liquor stores. On the surface there seems little, if any, relation between a person’s good moral character and the location of his business; however, this Court has held on several *486occasions that a municipality has the right to refuse to grant a certificate of good moral character if the issuance of such certificate would make it possible for the licensee to violate a valid ordinance regulating the sale of intoxicating liquor within the boundaries of the municipality. Safier v. Atkins, 199 Tenn. 574, 288 S.W.2d 441 (1956); State ex rel. Veal v. Mayor and Aldermen of Dyersburg, 184 Tenn. 1, 195 S.W.2d 11 (1946); State ex rel. Major v. Cummings, 178 Tenn. 378, 158 S.W.2d 713 (1942); State ex rel. Saperstein v. Bass, 177 Tenn. 609, 152 S.W.2d 236 (1941).
Where, as in this case, the City relies on its ordinances as justification for denial of a certificate of good moral character, the ordinance is subject to review by the ABC to see if it conflicts with a statute on the same subject matter. See City of Lakewood v. Tennessee Alcoholic Beverage Commission, 219 Tenn. 510, 410 S.W.2d 897 (1967).
In the Lakewood case supra, this court also pointed out that “T.C.A. Sec. 57 — 101 et seq. presents a comprehensive scheme of legislation regulating the manufacture and sale of alcoholic beverages in the State of Tennessee. . . . Beyond the subject
of certificates of good moral character and a degree of reasonable regulation, municipalities are not vested with any administrative or other function so far as licensing of retail liquor outlets is concerned.”
And, where the City refuses to issue a certificate of good moral character to an applicant for a license to operate a retail liquor store, the ABC has the authority to override the City where the refusal was “illegal, wrongful or arbitrary” and issue the certificate. T.C.A. § 57-121. See also City of Lakewood v. Tennessee Alcoholic Beverage Commission, supra; Boyd v. Burmaster, 193 Tenn. 338, 246 S.W.2d 36 (1952).
No attempt was made in the Lakewood opinion, supra, to define the areas where the municipality possesses “a degree of reasonable regulation,” and, no attempt will be made in this case to definitively define the scope of a municipality’s power, except to point out that this court held in Safier v. Atkins, 199 Tenn. 574, 288 S.W.2d 441 (1956), that municipalities have the power “to fix the places where intoxicating liquor may be sold and specify the number of such places in accordance with their charter provisions.” See also State ex rel. Major v. Cummings, 178 Tenn. 378, 158 S.W.2d 713. Any ordinance establishing a permissive zone or area for the sale of intoxicating beverages is necessarily and inherently restrictive. Seldom, if ever, can such an ordinance be passed that does not exclude locations that appear to be as acceptable as those included within the designated area. That is why the manner and extent of regulation of the location and number of retail liquor stores is left to the discretion of the governing body of the city, and why the exercise of that discretion will not be disturbed by a reviewing body in the absence of a showing that the officials have clearly acted arbitrarily and without regard to their duty. See Safier v. Atkins, supra; State ex rel. Major v. Cummings, supra. As stated in State ex rel. Saperstein v. Bass, Mayor, supra at page 239, and quoted in State ex rel. Major v. Cummings, supra at page 713,
“The power to exercise a sound discretion is implicit in the power to regulate. The Board of Commissioners of the City of Chattanooga elected to exercise the power to regulate retailers of liquor by segregating such business to a described area of the city. Those persons whose property was left outside the area in which liquor stores could be licensed have no basis for constitutional complaint that their property was not included within such area. As said by Justice Field in Crowley v. Christensen, 137 U.S. 86, 11 S.Ct. 13, 15, 34 L.Ed. 620: ‘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 as a citizen of the United States. As it is a business attended with danger to the *487community, it may, as already said, be entirely prohibited 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.’ ”
The power of a city to regulate the number and location of liquor stores does not include the power to prohibit the sale of liquor within the corporate limits when the people, by election, have exercised their option and voted to permit the sale of liquor. City of Lakewood v. Tennessee Alcoholic Beverage Commission, supra. Nor, as a necessary corollary, can the municipality so restrict the number and location of retail liquor outlets as to have the practical effect of prohibition.
In summary, the governing authority of a municipality has the authority to regulate, by ordinance, the location and number of retail liquor stores within the corporate limits of the city but does not have the power to prohibit the sale of liquor within its corporate limits when the people, by election, have exercised their option and voted to permit the sale of liquor. Where the city relies on its ordinances to deny a certificate of good moral character, the ABC has the power to review the ordinance to see if it is in conflict with a statute on the same subject. It also has the authority to determine if the city has wrongfully or arbitrarily enforced the ordinance against an applicant for a certificate of good moral character. But the ABC does not have the authority generally to substitute a different zone or area in the city for the sale of alcoholic beverages from a zone or area established by city ordinance.
Evidently recognizing this latter limitation on its authority, the ABC in this case undertook to override the City and issue the Poseys a certificate of good moral character for a location outside the area designated by ordinance for the retail sale of alcoholic beverages on the theory that the ordinance “was so severely restrictive as to be in conflict with and frustrate T.C.A. 57 — 111, which contemplates the lawful sale of alcoholic beverages after the people have approved the same by public referendum.” We find no justification in the record for this conclusion or finding by the ABC. Package liquor is easily available to anyone in the trade area of Chattanooga who wants to purchase it. The City ordinance provides for fifty-four (54) liquor stores within the city limits of Chattanooga, and fifty-three (53) are operating. The area set aside for the stores under the ordinance includes the main thoroughfares in central Chattanooga, with many stores being at or near exits from the interstate highways that
It seems to us that municipal officials are entitled to rely upon the rulings of this Court, and the interpretations of this Court as to the meaning and effect of legislation, and they are entitled to rely upon the rulings of an agency, such as the Alcoholic Beverage Commission, in carrying out their prescribed duties. If the Chattanooga ordinance was reasonable and valid in connection with the first application of the Poseys, then it was certainly valid and reasonable with regard to their second application for a license at the very same location, about one year later.
Instead of finding that the ordinance of the City of Chattanooga is arbitrary and unreasonable, it is our opinion that the actions of the Alcoholic Beverage Commission can only be so characterized. It is our opinion that that body has undertaken to substitute its own judgment for that of the governing officials of the city, in an area where the city has the power to act and has acted by the passage of an ordinance which, with some amendments, has been in force for some twenty-eight years.
We recognize, of course, that significant changes may occur within the boundaries of a municipal corporation so as to make a restrictive ordinance, which was originally reasonable, no longer so. Such changes, *488however, ordinarily occur over a period of years. It is our information that the City of Chattanooga has, since these proceedings commenced, annexed substantial adjacent areas, and it may be that the local ordinance should be re-examined in light of these changes of the municipal boundaries. These changes, however, did not occur between the first time the Alcoholic Beverage Commission considered this application and the second time it considered the application.
In our opinion the petition for certiorari filed by the City of Chattanooga should be sustained and the action of the Alcoholic Beverage Commission, granting the certificate of good moral character and a license based thereon, should be set aside.

. The basic ordinance regulating and controlling the sale of alcoholic beverages within Chattanooga was passed on November 18, 1947. It was amended on June 10, 1952, to add a location for wholesale sales of liquor; on December 15, 1964, by revising zones in Subsection (a), (1) and (p) and adding a new zone, Subsection (u); on March 19, 1968, by revising the zone in Subsection (e); on May 7, 1968, by adding a new zone in Subsection (v); and on October 6, 1970, by adding a new zone in Subsection (w). The pertinent part of the ordinance now in effect is as follows:
“Sec. 5-79. Number of licenses limited; preference for county residents.
“The number of retail licenses issued and outstanding in the city at any time shall be limited to fifty-four (54), . .”
* # * s» * *
“Sec. 5-85. Where establishments may be located.
“It shall be unlawful for any person to operate or maintain any wholesale or retail establishment for the sale, storage or distribution of alcoholic beverages in the city except at locations on the following streets and parts of streets:
(a) Market Street, between the Market Street Bridge and the north side of the Interstate Highway on South Market Street.
(b) Broad Street, between First Street and Thirty-Sixth Street.
(c) Main Street, between Chestnut Street and Central Avenue.
(d) Georgia Avenue, between East Fifth Street and Market Street.
(e) Chestnut Street, between First Street and Twentieth Street.
(f) Cherry Street, between Sixth Street and Ninth Street.
(g) Second Street, between Chestnut Street and Market Street.
(h) Third Street, between Chestnut Street and Market Street.
(i) Fourth Street, between Chestnut Street and Cherry Street.
(j) Fifth Street, between Chestnut Street and Market Street.
(k) Sixth Street to Eighth Street, inclusive, between Chestnut Street and Walnut Street.
(l) Ninth Street, between the east side of the Interstate Highway on West Ninth Street to the west side of the railroad overpass on East Ninth Street in the 600 block thereof.
(m) Tenth Street, between Broad Street and King Street.
(n) Eleventh Street, between Broad Street and Palmetto Street.
(o) Carter Street, between Ninth Street and Main Street.
(p) Rossville Avenue, southwardly from East Main Street, thence southwardly along Rossville Boulevard to the north line of the Interstate Highway.
(q) West Thirteenth Street, between Market Street and Broad Street.
(r) West Fourteenth Street, between Market Street and Broad Street.
(s) Fort Street, between Eleventh Street and Main Street (wholesale dealers only).
(t) First Street, from Broad Street west-wardly to Pine Street.
(u) Central Avenue, between but including all four comers of East Eleventh Street southwardly to Rossville Boulevard.
(v) Peeples Street, the 1200 block only.
(w) 1600 Block of East Twenty-fifth Street (wholesale only).
“The city auditor shall issue no license for the sale, storage or distribution of alcoholic beverages at any location other than one on the above named streets or parts of streets, and shall issue no license in any case if the proposed location of an establishment is within two hundred (200) *485feet of a church or school. (Ord. No. 2853, § 13; Ord. No. 4060, § 1; Ord. No. 4061, § 1; Code 1960, § 4-73; Ord. No. 5560, §§ 1, 2, 12-15-64; Ord. No. 5877, § 1, 3-19-68; Ord. No. 5903, § 1, 5-7-68; Ord. No. 6227, § 1, 10-6-70.”