Court Opinion

ID: 9777468
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:11:48.079105+00
Date Added: 2024-06-11T09:13:02.393935
License: Public Domain

DAVIS, Justice.
I dissent.
The opinions handed down on April 20, 1965, and on May 25, 1965, have been withdrawn, and I dissent.
This suit resulted in an appeal by plaintiff-appellee, Robert E. Longwill, d/h/a Club Apache, against defendant-appellant, Texas Liquor Control Board, because appellant had previously canceled the ap-pellee’s private club registration permit permanently, that was situated in a dry area in Dallas County, Texas. The ap-pellee alleged that he was issued the private club permit for one year, which actually began on Septemebr 1, 1963, and expired on August 31, 1964. Appellee alleged that he had acquired the permit in the manner and form as prescribed by law. He further alleged that all the prerequisites required by law, including the necessary inspection and reports preliminary to the issuance of said license, or permit, had been legally obeyed. He further alleged that on February 13, 1964, a search warrant was issued to the appellant or its agent and employees to search and seize all alcoholic beverages found upon the premises of appellee; that appellant, its agents and employees, did enter the premises of appellee and search and seize a quantity of alcoholic beverages, together with all records of appellee, including tax records, records of all members’ names and addresses comprising the membership of said club, payroll records, etc. That a hearing was had before the Administrator of the Texas Liquor Control Board on April 13, 1964, to cancel appellee’s license; that at such hearing the Administrator proceeded to accept ex parte statements on the matter before him from persons not present or subject to cross-examination, and without giving the appellee the right to cross-examine them. After the hearing, the Administrator of appellant found that the permit issued to appellee should be permanently canceled. The appellee further alleged that the Administrator of appellant did not predicate his findings upon substantial evidence, and that he acted arbitrarily, unjustly, capriciously and illegally in permanently canceling the appellee’s permit as a private club. He further alleged that the permanent cancellation of his private club permit actually injured and damaged his property rights, and that he had been irreparably injured and damaged by the acts of the appellant and was in dire peril of losing his means of livelihood by such order.
The Private Club Permit was issued under Article 666-15(e), Texas Penal Code, effective September 1, 1961. Art. 666-15 (e), Sec. 1, subd. 7 reads as follows:
“The Board or Administrator may cancel or suspend for a period óf time not exceeding sixty (60) days, after notice and hearing, any Private Club Registration Permit or any renewal of such Private Club Registration Permit, *731upon finding that the permittee club has:
“(a) Sold, offered for sale, purchased or held title to any liquor whatsoever so as to constitute an open saloon as defined in Sec. 3 of the Texas Liquor Control Act.
“(b) Refused to allow any authorized agent or representative of the Texas Liquor Control Board or any peace officer to come upon the club premises for the purposes of inspecting alcoholic beverages stored on said premises or investigating compliance with this Act or any provision of the Texas Liquor Control Act.
“(c) Refused to furnish the Board or its agent or representatives when requested any information pertaining to the storage, possession, serving or consumption of alcoholic beverages upon club premises.
“(d) Permitted or allowed any alcoholic beverages stored on club premises to be served or consumed at any place other than on the club premises.
“(e) Failed to maintain an adequate building at the address for which said Private Club Registration Permit was issued.
“(f) Caused, permitted or allowed any member of a club in a dry area to store any liquor on club premises except under the locker system.
“(g) Caused, permitted or allowed any person to consume or be served any alcoholic beverages on the club premises at any time on Sunday between the hours of 1:15 a. m. and 1:00 p. m., or any other day at any time between the hours of 12:15 a. m. and 7:00 a. m.
“(h) Violated any provision of the Texas Liquor Control Act or this Act.”
There has been only one appeal from an order canceling a private club permit under Art. 666-15(e), which appeal was dismissed because the question had become moot. State v. Pool Side Club (Tex.Civ.App.), 360 S.W.2d 923, N.W.H. The record shows that the permit in this case has been renewed for another year. Since the order canceling the permit was made permanent, the rule on the points have been brought forward.
Appellant brings forward three points of error. It contends the trial court erred in holding the testimony adduced against ap-pellee through affidavits at the administrative hearing was a denial of due process and constituted no evidence; in holding that appellant proved no violation of any statute under the Liquor Control Act in the District; and, in not holding that the order canceling the appellee’s private club permit was legally supported by substantial evidence and in setting aside and holding for naught said order.
The evidence shows that the appellee owns the building in which the private club is situated, and that the same is mortgaged. It shows that he has in his employ from one to four waitresses; that he can legally make charges for mixing and serving drinks; that one of the parties who made the affidavit that was submitted to the Administrator of appellant was the guest of another member; that he returned on two or three occasions, ordered drinks, and he was charged for the mixing and serving of the drinks, on the theory that he was a guest of the other member, and just as other members were charged. The evidence shows that the other man who made the affidavit entered the club, made application for membership, and paid $5.00 for a one year membership. The evidence shows that the appellee asked him if he had a bottle of liquor, and the man told him that he did not. The evidence further shows that the man told appellee that he only intended to drink a beer. The appellee told him, in effect, that he could be his guest, and he would take a chance. The waitress waited upon him and served him a beer as a guest, and he paid her the service charge. There is no evidence that will show any violation *732of any law whereby the appellant could permanently cancel the private club permit.
Appellee contends that he appeared before the Administrator in Austin in an effort to cross-examine his accusers, wherein they sought to cancel his private club permit. Appellant says that neither of the accusers were present at the hearing and did not submit themselves for cross-examination. It may be true that this Administrative Agency has established rules of admitting evidence by affidavit only and are not bound by the rules of evidence that govern judicial proceedings. There are cases that hold that evidence may be presented in the form of affidavit only. 1 T.J.2d 668, Sec. 26 and the cases cited therein. In a. case like the one presented to this court, such action seems to be contrary to every rule of the common law and democratic principles. If the parties who made the affidavit had appeared before the Administrator at the time of the hearing, so that appellee or his attorney could have cross-examined them, they could have shown that there was no violation of the law whatever. In 2 Davis Administrative Law Treatise 38, Sec. 11.02 entitled “Must the Deciding Officers Hear the Witnesses Testify?”, is quite an interesting discussion. It points out that there are four Morgan cases that have reached the U. S. Supreme Court. In the First Morgan case, Morgan v. United States of America, 298 U.S. 468, 56 S.Ct. 906, 80 L.Ed. 1288, in an administrative proceeding, Chief Justice Hughes held that: “The one who decides must hear.” In the Fourth Morgan case, United States of America v. Morgan, 313 U.S. 409, 61 S.Ct. 999, 85 L.Ed. 1429, Justice Frankfurter, in speaking of the evidence admitted at the administrative hearing, said: “Doubts and difficulties incapable of exact resolution confront judgment.” The Supreme Court of the United States has consistently held that administrative proceedings have a quality resembling that of judicial proceedings.
Appellant takes the position that the license that was issued to the appellee is only a privilege and is not property or a property right. The license being issued by an agency of the state, although it may be a privilege to exercise a right that they would not be allowed to exercise without it, it is property in the sense of being a thing of value that can lawfully be acquired and held. 36 T.J.2d 589, Sec. 3, and cases cited therein. Webster’s Dictionary defines a privilege as “an exceptional law made in favor of or against any individual from privus, separate, peculiar, and lex. legis, a law. A right, immunity, benefit, or advantage enjoyed by a person or body of persons beyond the common advantages of other individuals; the enjoyment of some desirable right, or an exemption from some evil or burden; a private or personal favor enjoyed; a peculiar advantage; as, the privilege of genius. Synonym: Advantage, prerogative, immunity, franchise, right, claim, liberty.” (Emphasis added.) Webster further defines privilege as: “To grant some particular right or exemption to; to invest with a peculiar right or immunity; as, to privilege representatives from arrest. To exempt from censure or danger; to place in a condition of privilege.” (Emphasis added.)
There is a long discussion in 2 Davis Administrative Law Treatise 250, Ch. 15 in an article entitled “Evidence”. By Sec. 14.15, p. 328, it says a person shall have the right to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct close examination as may be required for a full and true disclosure of the facts. Such was not allowed in the ease at bar.
Art. 666-15 (e), subd. 7a. reads as follows:
“An appeal from any order of the Board or Administrator under this Section refusing, canceling or suspending a permit or license may be taken to the District Court of the County in which the aggrieved licensee or permittee, or the owner of involved real or personal property may reside. The pro*733ceeding on appeal shall be de novo under the same rules as ordinary civil suits, with the following exceptions, which shall be considered literally, viz:
“(a) All appeals shall be perfected and filed within thirty (30) days after the effective date of the order, decision or ruling of the Board or Administrator.
“(b) Such proceedings shall have precedence over all other causes of a different nature.
“(c) All such causes shall be tried before the judge within ten (10) days from the filing thereof, and neither party shall be entitled to a jury.
“(d) The order, decision or ruling of the Board or Administrator may be suspended or modified by the District Court pending a trial on the merits, but the final judgment of the District Court shall not be modified or suspended pending appeal.
“(e) The District Court may consider any evidence and only such evidence as would be proper if the case were one appearing in the first instance in the District Court and it shall arrive at its decision independently of the proceedings below. The Substantial Evidence Rule shall have no application in the proceedings of the District Court.”
Appellant undertook to sustain the permanent cancellation of appellee’s permit because of the alleged sale by appellee of beer and liquor in such a manner as to constitute the club an open saloon. The suspension or cancellation of a private club permit must depend upon fact issues made by proof of actual occurrences prior to the hearing before the administrative agency. In the case of such cancellation, an appeal must be taken to the district court. In the district court, according to the statutes, the trial must be de novo and the substantial evidence rule does not apply. Scott v. Texas State Board of Medical Examiners (Tex.Sp.Ct.), 384 S.W.2d 686, citing Key Western Life Insurance Co. v. State Board of Insurance (Tex.Sp.Ct.), 350 S.W.2d 839. It seems that the Legislature by enacting the provisions of Art. 666-15 (e), Subd. 7a, PC, as to trial de novo was trying to follow the mandate as laid down by Chief Justice Calvert in Southern Canal Co. v. State Board of Water Engineers (Tex.Sp.Ct.), 318 S.W.2d 619. I would hold that this provision of the Article is not unconstitutional.
The findings of fact by the trial judge are supported by the evidence. I would overrule the points of error., and the judgment of the trial court would be affirmed.