Vallerga v. Department of Alcoholic Beverage Control

Albert Vallerga and Mary Azar, coowners of an on-sale general liquor license, appeal from a judgment denying their application for mandamus to compel the respondent Department of Alcoholic Beverage Control to set aside its revocation of their license. The Alcoholic Beverage Control Appeals Board affirmed the order of revocation.

The licensees are the owners of the First and Last Chance Bar located in Oakland. On March 7, 1956, an accusation was filed against them as operators of the bar by an agent of the Department of Alcoholic Beverage Control, charging them with a violation of section 24200, subdivision (e) of the Business and Professions Code. That section provides in part that a basis for a liquor license suspension or revocation is “Where the portion of the premises of the licensee upon which the activities permitted by the license are conducted are a resort for illegal possessors or users of narcotics, prostitutes, pimps, panderers, or sexual perverts.” It provides further that in “addition to any other legally competent evidence, the character of the premises may be proved by the general reputation of the premises in the community as a resort for illegal possessors or users of narcotics, prostitutes, pimps, panderers, or sexual perverts.” The accusation alleged that during the period in question, “the portions of the premises of the licensees, where the activities permitted by the license are conducted, have been and still are a resort for sexual perverts, to wit: Homosexuals. ’'

A duly appointed hearing officer found that the accusations were true; that one of the licensees frankly admitted that the “premises were established as a resort for lesbians and homosexuals, and that he was aware that said premises were a hang-out for homosexuals.” The hearing officer concluded that “ [g] rounds constituting a basis for the suspension or revocation of the license issued to the above-named licensees for the above-described premises have been established under the provisions of Section 24200(e) of the Alcoholic Beverage Control

Section 22 of article XX of the Constitution provides in part, that the “department shall have the power in its discretion, to deny, suspend or revoke any specific alcoholic beverage license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals. ...” The recommendation of revocation of the hearing officer was adopted by the department.

The licensees, and amici curiae appearing in their behalf, contend that the accusation cannot properly be based on section 24200, subdivision (e) of the Business and Professions Code as that section is unconstitutional for reasons stated by this court in Stoumen v. Reilly (1951), 37 Cal.2d 713 [ 234 P.2d 969 ]. That ease concerned a revocation for an alleged violation of section 58 of the Alcoholic Beverage Control Act, now section 25601 of the Business and Professions Code. The section made it a misdemeanor for a licensee to suffer his premises to be used as a place of resort for purposes injurious to the public morals or health. There was evidence that homosexuals met on and patronized the premises with the licensee’s knowledge, but there was no evidence of misconduct involving homosexuals. In reversing a judgment denying an application for mandamus, this court stated at page 716: “Members of the public of lawful age have a right to patronize a public restaurant and bar so long as they.are acting properly and are not committing illegal or immoral acts; the proprietor has no right to exclude or eject a patron ‘ except for good cause, ’ and if he does so without good cause he is liable in damages. (See Civ. Code, §§ 51, 52.) In analogous cases it has been held that a liquor license could not be revoked on the ground that prostitutes had dined in the licensee’s restaurant (In re Farley, 217 N.Y. 105 [ 111 N.E. 479 ]) and that a conviction of maintaining a bawdy house was not supported by evidence that women of loose or immoral character had obtained lodging in defendant’s hotel (Patterson v. State, 9 Okla. Cr. 564 [ 132 P. 693 , 695]). In the Patterson case the court pointed out that such women are human beings entitled to shelter and that it is not a crime to give them lodging unless it is done for immoral purposes. The same reasoning applies to the patron

Subdivision (e) of section 24200 was added to the Business and Professions Code in 1951, subsequent to the decision in the Stoumen case. (Stats. 1955, ch. 1217, p. 2230.) When called upon to construe that subdivision the courts have done so in conformity with the holding in the Stoumen case, and the general rule of construction that where possible legislation will be construed to avoid unconstitutional applications. Thus, in 1957, a revocation based upon this subsection was sustained in Kershaw v. Department of Alcoholic Beverage Control, 155 Cal.App.2d 544 [ 318 P.2d 494 ], where there was conduct on the premises by homosexuals who openly sought and obtained sexual satisfaction by aberrant methods. The court declined to consider the issue as to the constitutionality of the section had only patronage been involved, remarking, by way of dictum, that “It would seem a fair inference to conclude that in making . . . [this] amendment the Legislature acted in the light of and consistently with the rule of the Stoumen case, by inference excluding from the coverage of subdivision (e) the type of conduct which the Supreme Court had declared harmless and not inimical to public welfare and morals. . . . It involves a question that need not be and is not decided at this time.” (Id. at p. 550.)

The issue was again raised in 1958 in Nickola v. Munro, 162 Cal.App.2d 449 [ 328 P.2d 271 ], where the court again held that the conduct involved in that ease supported the finding that many of the patrons, to the knowledge of the licensee, committed acts which were contrary to the public welfare or morals. The question of the construction of subdivision (e) of section 24200 was again referred to, and the court stated that the Legislature did not intend that the limitations of the Stoumen ease were to be disregarded in the application of subdivision (e), and that as so construed subdivision (e) was constitutional.

We are not persuaded by the dicta in the Kershaw and Nickola cases relating to the construction of subdivision (e). The language of that subdivision is too clear and unambiguous to permit any other meaning than that which the literal language conveys. Not only does it declare that the grounds for revocation are established if the prohibited classes “resort” on the premises, but it further makes the legislative

It is not intended to imply by the foregoing that the Kershaw and Nickola cases were improperly determined. In both of those cases the court held that the conduct there involved was such that the continuance of the license would be contrary to the public welfare or morals, within the meaning of section 22 of article XX of the Constitution. The .provisions of section 22 are made self-executing, and revocation of a license may be based on that ground alone if the licensee is otherwise accorded due process of law. (See also Bus. & Prof. Code, § 24200, subd. (a).) In the Stoumen ease, in considering the applicability of the constitutional provision as grounds for revocation by the board, the court stated that the latter’s discretion was not absolute “but must be exer

It is suggested that the record in the present ease justified a conclusion that the continuance of the license will be “contrary to public welfare and morals, ’ ’ and that the revocation thereof can be justified on constitutional grounds, as in the Kershaw and Nickola cases. In the Nickola case the court held generally that seeking sexual gratification in a public tavern with another of the same sex would offend the moral sense of the general public. The court stated at page 457: “There are many things that can be done in the privacy of the home which may not be illegal, but if done in a public tavern are directly offensive to public morals and decency, and demonstrate that the participants are sex perverts. The continuance of the license under such circumstances ‘would be contrary to public welfare or morals’ as provided in our Constitution. . . . Further than that we do not have to go.” Conduct which may fall short of aggressive and uninhibited participation in fulfilling the sexual urges of homosexuals, reported in some instances (see Kershaw v. Department Alcoholic Beverage Control, supra, 155 Cal.App.2d 544 , 547-548), may nevertheless offend good morals and decency by displays in public which do no more than manifest such urges. This is not to say that homosexuals might properly be held to a higher degree of moral conduct than are heterosexuals. But any public display which manifests sexual desires, whether they be heterosexual or homosexual in nature may, and historically have been, suppressed and regulated in a moral society.

Such displays were put in evidence in the present case. Admittedly, the licensees’ patrons were almost exclusively homosexuals and lesbians. Their sexual proclivities were displayed in that the majority of the female customers dressed in

A police officer testified that he observed a male patron and a grey-haired man approach, embrace each other at the bar, put their foreheads together while they carried on a whispered conversation, and that the grey-haired man then kissed the other and stated to the bartender: “Arley and I are going steady.” This officer also testified that he observed a person dressed and made up as a man and who appeared to be a man, but who, the witness was informed, was in fact a woman, making use of the women’s restroom.

The foregoing is sufficient evidence of a display of sexual desires and urges which, when made in a public place as a continuing course of conduct, could reasonably be found by the trier of fact to be “ contrary to public welfare or morals. ’ ’ It is apparent in the present case, however, that the foregoing evidence was not relied upon by the finder of fact in arriving at the conclusion that continuance of the license would be contrary to public welfare or morals. The only findings in the present ease were that the portion of the premises where the activities permitted by the license were conducted were “a resort for sexual perverts, to wit, homosexuals” and that the licensees were aware of that fact. It is true that a conclusion was drawn that the continuance of the license would be ‘ ‘ contrary to public welfare and morals within the meaning of said words as used in Article XX, section 22, of the California Constitution,” but that determination was made only “by reason of the facts above found” and not in reliance on the factual matters testified to by the police officers. Portions of that testimony were disputed by other testimony, and insofar as the record shows the trier of fact may well have determined that the circumstances testified to did not exist.