# Martin v. Alcoholic Beverage Control Appeals Board > California Supreme Court · June 12, 1959 · 52 Cal. 2d 287 URL: https://www.frixlaw.com/law-library/cases/9559050 ## Case - **Full name:** THOMAS W. MARTIN, as Director of the Department of Alcoholic Beverage Control, Respondent, v. ALCOHOLIC BEVERAGE CONTROL APPEALS BOARD OF THE STATE OF CALIFORNIA, Defendant and Appellant; MARTIN BERT HALEY, Real Party in Interest and Appellant - **Court:** California Supreme Court - **Decided:** June 12, 1959 - **Citations:** 52 Cal. 2d 287; 341 P.2d 296; 1959 Cal. LEXIS 203 - **Precedential status:** Published - **Opinion:** Dissent by Schauer - **Judges:** Spence, Schauer, Peters - **Cited by:** 38 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9559050 ## Opinion text SCHAUER, J., Dissenting. In my view the appeals board was correct in holding that as a matter of law, in the circumstances of this case, the department acted arbitrarily, rather than within the area of its discretion, in revoking the defendant’s license. The discretion vested in the Department of Alcoholic Beverage Control is not intended to endow it with absolute, unlimited, dictatorial power; the mere stating of this fact shows that the exercise of such power is inconsistent with the concept of “discretion.” Certainly we should recognize that *295 the discretion given to the department is broad and inclusive. But that statement of power is true only within the limits of fixed legal principles. (Brill v. Fox (1931), 211 Cal. 739, 743 [ 297 P. 25 ], “Such power cannot enlarge its own boundaries or support acts requiring other legal bases. Even within its legal limits the power is not unbridled. The mere fact that a court may have jurisdiction to make an order does not equip it'to exercise judicial discretion. Its acts must not only be confined within the field of discretion but must also be of a character within the bounds of the limiting adjective ‘judicial.’ To exercise that power all the material facts in evidence must be both known and considered, together also with the legal principles essential to an informed, intelligent, and just decision. . . . The term ‘judicial discretion’ was defined in Bailey v. Taaffe (1866), . 29 Cal. 422, 424 , as follows: ‘The discretion intended, however, is not a capricious or arbitrary discretion, but an impartial discretion, guided and controlled in its exercise by fixed legal principles. It is not a mental discretion, to be exercised ex gratia, but a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice. ’ ” (Gossman v. Gossman (1942), 52 Cal.App.2d 184, 194-195 [ 126 P.2d 178 ].) The Department of Alcoholic Beverage Control is bound by the same rules as a court in the exercise of the discretion vested in it. Here the facts are that the licensee has committed a violation of the law neither on the premises nor in the manner of conducting the business, but only in the wording or content of the license renewal applications. In different circumstances the failure of an applicant to correctly list the names of all partners could indeed be material and constitute adequate ground for revocation of a license. But in the circumstances here shown the inaccuracy in wording the renewal application was substantially immaterial. The applications were made in the name of the original licensee and failed to show the name of the added partner. But the name of the partner, together with the fact of partnership, in 1953, was on advice of the sales tax division of the department’s predecessor, added to the listing on the sales tax permit. There is no suggestion that the license would not have been renewed from year to year if the application had been made in the names of both partners rather than in the name of the original licensee alone. Regardless, therefore, of whether the department was bound to believe the testimony of the licensee and *296 his partner that in 1953 an employe of the liquor division of the department’s predecessor had advised them, upon their inquiry, that it was not necessary to put both names on the license, it is apparent that the error by the applicants was an innocent mistake and was without prejudice to the department or the public. An agent of the department testified, in substance, that he had made an investigation of the licensee; that he had been informed that the partnership “was a verbal one”; that “they did not go through any escrow company, attorney, or otherwise”; and that “Mr. Haley apparently at the time of my investigation from what I could glean from his conversations, he didn’t realize he was doing anything wrong as far as this partnership between he and Mr. Mendoza was concerned. ... I would say it was more ignorance on his part than anything else.” I agree with the argument of the appeals board that where, as here, the licensee has committed a violation which places his license (and, consequently, his business, his property, his investment, his livelihood) in jeopardy, but there is no evidence that the public was injured, a penalty which denies him the opportunity to (as stated in the majority opinion) “bring his business operation into compliance with the requirements of the law,” i.e., to add the name of the “new” partner to the license application and have that application then considered on its merits, is so disproportionate to the offense found as to be arbitrary as a matter of law. (Cf. Cornell v. Reilly (1954), 127 Cal.App.2d 178, 184 [3], et seq. [ 273 P.2d 572 ].) The above stated conclusion is emphasized by the fact that the business in question, which is to be destroyed, has in all other respects apparently been operated lawfully and without complaint since 1942, with the “new” partner having acquired his interest no later than 1943. The fact that the business had been operated for so long a period with a record completely clear of violations other than this single mistake 1 in respect to adding the name of the partner appears to me to establish that the public interest has not suffered by the violation. Concerning the duty of the department and the intent of the law in such a case the director himself (under *297 date of October 7, 1957) issued a policy statement declaring: “We must exercise our great power judiciously, reasonably ... We should not permit its use in an arbitrary or arrogant manner. To achieve the proper use of the authority we have been given by the Constitution, we must first analyze its purpose and then determine the objectives we seek in its use. . . . “In many cases, and I am speaking now of the assessment of suspensions, I think we have gone beyond the objectives of our obligation under the Constitution and the laws. . . . We have punished the violator of the law without regard to the threat his violation posed to the welfare and morals of the community. . . . “The very words of the Constitution negate the idea that we are dealing with laws which, if violated, automatically require a suspension or revocation of the license. The exercise of our power is with ‘discretion.’ Discretion is the exercise of judgment upon a reasonable basis. Therefore, unless there is factual support that a suspension is required in the public interest, I question that there has been a reasonable exercise of our discretion where we order a suspension in the case of an isolated or technical violation by one of our licensees. “Our purpose in the exercise of our disciplinary authority over licenses is not to punish but to protect the public. . . .” In my view the director in the above quoted language has correctly interpreted the constitutional grant of power, and the appeals board, not the department or the superior court, has as a matter of law correctly interpreted and applied the power vested in the department and the board. For the reasons stated I would reverse the judgment of the trial court. The very fact that the single mistake was repeated or persisted in year after year, to no purpose whatsoever, serves to accentuate the apparent innocence of the omission rather than to give it the character of intentional deception. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9559050. Public record. Not legal advice.