Texas Liquor Control Board v. MacEo

GRAVES, Justice. •On May 25, 1940, appellee, Frank Maceo, applied for a retail beer-and-wine permit to cover certain premises to be known and operated as the “Hollywood Dinner Club”, located in part of a building situated at the northwest corner of the intersection of 61st street and avenue S, in the city of Galveston, Texas. Pursuant to question 34-a of the application form for such permit, he attached an architect’s blueprint of the building, in which the rooms comprising the “Hollywood Dinner Club” to be covered by the permit were located, showing in detail the exact portion of the building involved. The space, as so shown, he took under written lease from Gulf Properties, Inc., a private corporation *955 under the laws of Texas, the owner of the building. On the 8th day of June, 1940, in due course and after such investigation as the Texas Liquor Control Board saw fit to make, permit No. 35994 was issued to Frank Maceo, d.b.a. “Hollywood Dinner Club”, whereupon appellee commenced his operation of the establishment as a cafe and night club. Later, on the 22d day of June, 1940, it appears that J. C. Howerton, an undercover agent of the Liquor Control Board, and others visited the Hollywood Dinner Club, and by the express admissions of each of them who testified before the ’appellant Board, discovered no violation of law going on in that Club’s leased premises. Howerton then visited certain adjoining premises, occupied by a corporation known as the Turf Athletic Club, of Galveston, where, he reported to the Board, he had discovered certain alleged violations of law — the possession of whiskey, and the operation of an open saloon — which were subsequently made the basis of the charges here involved against this appellee. Thereafter, notice was issued by the Administrator of the Liquor Board to ap-pellee to show cause why his permit should not be cancelled, and, on the 13th day of August, 1940, a hearing on such complaint was had in Austin before such Administrator. The theory of the Board’s examiner advanced at the hearing was not that appel-lee had directly himself, or by his agents, servants, or employees, in the “Hollywood Dinner Club”, violated the law, but rather that there was a connection between appel-lee and the adjoining premises of the Turf Athletic Club together with a relationship of agency existing between appellee, Frank Maceo, and on Sam Maceo, who was apparently in charge of the Turf Club; further that, because of such connection and relationship, appellee was chargeable in law with the alleged violations discovered in such latter place. Appellee, by counsel, specifically denied each and all of the allegations contained in the complaint, and on the hearing, in addition to the testimony of Mr. Howerton, numerous affidavits and exhibits were introduced, by b'oth the Board and appellee. After the hearing and before the Administrator’s ruling, appellee filed therein written objections to certain parts of the evidence introduced by the Board, all but one of which were overruled by the administrator, to which rulings exceptions were duly taken. On the 20th day of August, 1940, the Administrator entered his order cancelling appellee’s permit, upon five findings of fact, which, reduced to their essence, are as follows: (1) That, on the date in question, appellee possessed whiskey on premises directly and indirectly under his control and adjacent to his licensed premises; (2) that, on the date in question, one Sam Maceo was an agent and employee of appellee, and did then and there possess whiskey on premises directly and indirectly under his control and adjacent to the licensed premises; (3) that, on the date in question, appellee possessed whiskey on the licensed premises; (4) that, on the date in question, Frank Maceo and his agent, servant, and employee Sam Maceo, did operate and assist in operating an open saloon on the licensed premises where distilled liquor was sold and offered for sale by the drink; (5) that, on the date in question, one Sam Maceo was an agent and employee of appellee, and did possess whiskey on the licensed premises. After entry of this order, appellee, in compliance with the applicable provisions of the Texas Liquor Control Act, Article 666 — 14, of the Vernon’s Annotated Penal Code, perfected his appeal to the District Court of Galveston County, Texas, where the matter was heard on the 6th day of September, 1940. The only evidence introduced was a complete transcript of the proceedings had before the Administrator,, as is contained in the statement of facts now on file in this Court. On the 26th day of September, 1940, the Court below entered its final judgment, holding “ * * * that said transcript contains no substantial evidence upon which said Administrator of the Texas Liquor Control Board could have based his ruling questioned herein, (and) that such ruling is, therefore, arbitrary and unreasonable, and constitutes an abuse of the discretion vested in said Administrator,” and setting aside and vacating the Administrator’s order; hence this appeal by the Control Board. Appellant assigns as error the trial court’s action in setting aside the Administrator’s order of cancellation because, it asserts, there was sufficient evidence to support each and all of the five given find *956 ings of the Administrator, which i.t successively restates as follows: “(1) The first finding made by the Administrator of appellant to the effect that about June 23, 1940, appellee did then and there possess on the premises in controversy covered by the license permit whis-ky, when he was not permitted under said license to sell whiskey; (2) the second finding of the Administrator of appellant, to the effect that about June 23, 1940, Sam Maceo, as agent and employee of appellee, did possess on the premises in question whisky; (3) the third finding of fact as made by Bert Ford, Administrator, to the effect that on or about June 23, 1940, Frank Maceo had in his possession on the premises in question whisky; (4) the fourth finding of said Administrator to the effect that on or about June 23, 1940, appellee, Frank Maceo, and his agents, servants and employees, to-wit, Sam Maceo, did then and there on the premises in question operate and assist in operating an open saloon, and were directly and indirectly interested in the operation of an open saloon in which they sold liquor, composed and compounded in part of distilled spirits, and offered for sale for beverage purposes same by the drink; (5) the fifth finding by the Administrator to the effect that Sam Maceo, as an employee of Frank Maceo, violated the provisions of the Texas Liquor Control Act by having in his possession on the premises in question whisky.” After careful study of this entire record, inclusive of the statement of facts in full, this court is unable to find existent such a state of the evidence; on the contrary, as its general statement supra has in part presaged, it not only finds no evidence whatever tending to support any finding that appellee, personally or through Sam Maceo as his agent and employee, either possessed any whiskey, or operated and assisted in operating an open saloon by selling or offering for sale whiskey'by the drink, “on the premises in controversy covered by his license permit”; to the direct opposite, as the preceding statement recites, “by the express admissions of each of appellant’s agents and inspectors who testified before its Administrator they discovered no such violation of law going on in the appellee’s leased premises”; in other words, they each and all freely admitted that whatever derelictions they claimed to have encountered or suspected, all occurred beyond the precisely-defined area in the building the appellee’s permit covered and in the adjacent premises that were just as definitely defined as being under lease by the Turf Athletic Club. Indeed,- this whole case-being thus made referable to and dependent upon what happened in the adjoining premises so occupied -and exclusively controlled by the Turf Club, in the absence of any such legally, sufficient proof of any relationship of agency between the appellee, upon the one hand, and Sam Maceo, who was apparently in charge of the Turf Club, upon the other, as would make the -appellee answerable in law for the alleged violations that were testified to under Sam Maceo’s operation of the adjoining place — constitutes, it is thought, a typical instance of such slight testimony, if that much, as only raises a mere surmise or suspicion of the existence of the infractions the administrator cancelled the appellee’s permit upon; that is, in legal contemplation, they fell short of being “any evidence”, under the rule so firmly embedded in our jurisprudence by our Supreme Court in Joske v. Irvine, 91 Tex. 574, 44 S.W. 1059. In such instances of a paucity of substantial evidence of 'law violations, it is well settled that such a cancellation may be set aside by the courts: Texas Liquor Control Board v. Lanza, Tex.Civ.App., 129 S.W.2d 1153; Texas Liquor Control Board v. Jones, Tex.Civ.App., 112 S.W.2d 227; Texas Liquor Control Board v. Warfield, Tex.Civ.App., 110 S.W.2d 646; Bradley v. Texas Liquor Control Board, Tex.Civ.App., 108 S.W.2d 300; McCormick v. Texas Liquor Control Board, Tex.Civ.App., 141 S.W.2d 1004. As the Supreme Court so imperishably said in the Joske case [91 Tex. 574, 44 S.W. 1063], the “policy of the law * * * does not permit the citizen to be deprived of his property, his liberty, or his life upon mere surmise or suspicion, and places upon a trained judiciary the grave responsibility of determining as a question of law whether the testimony [in a given case] establishes more” than that; responding to that duty, conceivably'placed upon it in this instance, this court, as indicated, concludes that this evidence at most did not establish more — that there was a completely missing link as to any relationship of principal and agent between those so in charge of these two distinct but adjoining Clubs, which hiatus *957 relieved the appellee of any responsibility for the only violations of law the officers «■yen hinted at — that is, those occurring only in the Turf Club which seems to have been under Sam Maceo’s charge, and' not in the Hollywood Club, that belonged to and was operated by the appellee. The circumstances apparently depended upon by the appellant to establish the responsibility of the appellee for the occurrences in the other Club seem to this court to have been inconsequential, and to have had no probative force, if not indeed to have been wholly inadmissible against the appellee, under the objections he made to all of them; for instance it was shown that the two Clubs, under written leases, occupied distinct portions of one very large building, with express provisions in both leases that the members of the Turf Club should at all times have the right of ingress and egress to its own rooms through the Hollywood Club’s premises; that the restrooms of the latter were the common convenience of all other tenants of the building; that the appellee’s premises came to him together with the furnishings; fixtures, and equipment therein at the time, which included all the existing public utilities of water, light, gas, telephone, etc.; that the leases of both parties were in writing, dated May 29 of 1940, running for one year, and that, while unrecorded, were not required to be; the circumstance that appellant’s officers found on the tables in appellee’s cafe match covers with the printing thereon: “Hollywood Dinner Club, Galveston Texas, Sam Maceo, Managing Director”, to say the least of it, was an inconsequential feature, that got nowhere, there being no testimony connecting it up as to time, or anything else, with the appellee; it was objected to as being hearsay and irrelevant, which should have been sustained, but even so, if left standing alone, it might have applied to wholly different conditions of many years prior and amounted to no more than a “spark”, as some of the authorities term such a claim for evidence, or at most only a scintilla. Neither was it of consequence that neither of the'Maceos testified upon the cancellation hearing; the appellee had therein denied each and all of the allegations of the complaints against him, hence a con-jflict in the evidence, which the administrator could have disregarded or not, as he saw fit, was the only further result that could have been brought.about by the testimony of either or both of them; the appellant’s brief is inept in asserting these Maceos, Frank and Sam, to have been brothers, there being no evidence to that effect, and appellee’s uncontroverted brief in that respect denied it. The public utilities contracts the appellant refers to were furthermore subject to the appellee’s objections that they were all too remote in time, that is, bearing dates of 1934, 1936, 1926 and 1933, whereas the affidavit of J. B. Fox, the appellant’s witness at the cancellation hearing before the Administrator, showed the leased building to belong to the Gulf Properties, Inc.; and, as before indicated, the appellee’s lease with that landlord called for a completely equipped place in those particulars; these objections also of the appellee were good, and should have been sustained. This court passes over Inspector Howerton’s recited dealings with Sam Maceo, but with the finding, however, that it fails to show that Sam Maceo ever therein connected himself up with appellee’s “Hollywood Dinner Club”, or that it showed him to have any connection with it as an agent for the appellee, or otherwise; his whole dealing and fraternizing with this inspector, as nárrated by the latter, had to do with his own establishment, the Turf Club, and shows his • concern only for what had occurred there, rather than anything that had happened in the appellee’s cafe, for which the appellee was responsible; there was, therefore, no admissible proof whatever to sustain appellant’s charges that Sam Maceo was an agent and employee of the appellee, wherefore appellee’s objections before the Administrator to Howerton’s conversations with Sam Maceo, on the ground that the statement of one claimed to be an agent of another, standing alone, could not be relied upon to prove such agency, should have been sustained, to say nothing of other good grounds that also were interposed. Appellant is further inept in urging a discrepancy in the description of appellee’s licensed premises, as shown on the blueprint attached to his application, and the premises as they existed in fact; this, because the Administrator found no such misrepresentation in his cancellation order; the blueprint shows a “passage” between the two clubs to have been plainly so marked *958 thereon, and Mr. Phelps, the Board’s ■Chief Examiner, disclaimed, both before the Board and the trial court, having made any such contention. Wherefore, it is held that the judgment ■of the trial court was correct, and should be affirmed; it will be so ordered. Affirmed. CODY, J., dissents.