Thompson v. City of Harriman

OPINION HENRY, Chief Justice. This is an appeal from a decision of the Chancery Court of Roane County upholding the City of Harriman’s denial of appellant’s application for a permit to sell beer. Appellant submits that the Chancellor erred in denying his application “because of the arbitrary, capricious and discriminatory enforcement of the Charter and Ordinances of the City of Harriman.” I. The history of the events giving rise to appellant’s claim of discriminatory enforcement are fully related in a recent opinion of this Court, Goldston v. City of Harriman, 565 S.W.2d 858 (Tenn.1978). A brief review of these facts, however, is not inappropriate. Ordinance No. 2-201 of the City of Harri-man states that it is unlawful to sell or store beer within the city, and beer was not sold within Harriman’s corporate limits until the early 1960’s. In 1961 the city annexed an area where several businesses had been selling beer under permits issued by the Roane County Beer Board. In order to end litigation contesting the annexation, the city entered into a compromise settlement, approved by the court, allowing those establishments selling beer at the time of annexation to continue to do so under the outstanding permits. A similar arrangement occurred when the city annexed the area in which the local Holiday Inn, also engaged in the sale of beer under a Roane County permit, was located. The City of Harriman itself has never issued to anyone a permit allowing the sale of beer within its boundaries. Over the next several years, these establishments continued to operate under their county permits. In addition, when some of these businesses were sold, or passed to new hands because of their owners’ deaths, the county board re-issued permits to the new proprietors. In 1975, however, the Roane [93] County Beer Board issued a permit, unrelated in any way to a permit that had been outstanding at the time of annexation, to the owner of a new establishment in the annexed area. The city refused to recognize this permit and “revoked” by resolution any authority of the county beer board to issue a permit to any business located within the city. This resolution was accepted by the county.1 After these events, appellant, who had originally applied to the county board for a permit, sought one from the city council. After a full hearing on the matter, the council noted that to grant appellant’s application would violate not only Ordinance 2-201, but also provisions of the city charter,2 and denied his application. II. During consideration of this appeal, the issue has arisen of whether, since the passage of Chapter 105 of the Public Acts of 1961, a municipality has the power to regulate the sale of beer to the point of prohibition, as the City of Harriman does with certain noted exceptions. Counties, as opposed to cities, have never had such authority and do not now possess it. The 1961 Act, now codified as a part of Sec. 57-205, T.C.A., does not apply to cities; and we directly, correctly, and unanimously so held in Richards v. Lewisburg Alcoholic Beverage Commission, 543 S.W.2d 852 (Tenn.1977). We said: § 57-205 relates to counties only. Id. at 853. Reference to the derivation of Sec. 57— 205, T.C.A., will demonstrate the correctness of this holding. It originated as a part (first 6 paragraphs) of Sec. 10, Ch. 69, Pub-lie Acts of 1933. This portion of the Act shows on its face that it applies to counties only. It was carried into the Code Supplement of 1950 as Sec. 1191.14 and into our present Code as Sec. 57-205, with the catch line reflecting its contents as follows: License to sell outside of town or city limits. (Emphasis supplied). Sec. 57-208, T.C.A., governs sale within incorporated cities and towns. The caption of Chapter 105, Acts of 1961, reads as follows: AN ACT to amend Section 57-205 and 57-209 Tennessee Code Annotated, relating to the sale of beer. It will be noted that it does not purport to amend Sec. 57-208, T.C.A., relating to municipalities. Omitting the enacting clause, Section 1 of the 1961 Act provides: That Section 57 — 205 Tennessee Code Annotated be and the same is hereby amended [etc.]. Thus, it is clear that the 1961 Act had no effect on the power of municipalities. We went into the history of “the very pronounced difference between the authority possessed by cities and counties,” in our recent case of Howard v. Willocks, 525 S.W.2d 132 (Tenn.1975). We recognized that municipalities have broad powers in the regulation of the sale of beer, Gatlinburg Beer Regulation Committee v. Ogle, 185 Tenn. 482, 206 S.W.2d 891 (1948); that municipalities are given absolute discretion in the matter of regulating and controlling beer, Ketner v. Clabo, 189 Tenn. 260, 225 S.W.2d 54 (1949); and that their regulation may properly extend to outright prohibition, De Caro v. City of Collierville, 213 [94] Tenn. 254, 373 S.W.2d 466 (1963); Grubb v. Mayor of Morristown, 185 Tenn. 114, 203 S.W.2d 593 (1947). See also Barnes v. City of Dayton, 216 Tenn. 400, 392 S.W.2d 813 (1965), and Howard v. Christmas, 180 Tenn. 519, 176 S.W.2d 821 (1944). Howard is actually the first case to hold that municipalities may regulate beer to the point of prohibition, although the source of this rule is generally attributable to Grubb, supra. As we held in Howard v. Willocks, supra, speaking with reference to counties, the effect of the passage of Chapter 105, Public Acts of 1961, was that: [T]he Legislature mandated that an applicant for a beer permit, who complies with all the legal requirements, shall be entitled to have such license or permit issued to him. 525 S.W.2d at 136. But Tennessee cities, being unaffected by the 1961 Amendment, have the continuing right to regulate to the point of outright prohibition. The reason for this disparity of concept is covered in Howard v. Willocks, supra. III. We turn now to the question raised by appellant, namely whether under the circumstances related earlier the City of Harriman arbitrarily and unlawfully discriminated against him in the enforcement of its charter and ordinance. This is essentially the same question considered by this Court in Goldston v. City of Harriman, supra. In that case we held that the city was estopped to enforce its ordinance forbidding the sale of beer against those holding valid county permits at the time of annexation but that this estoppel did not benefit one who did not hold a valid permit prior to annexation. Additionally, we expressed the opinion that the recognition of the Holiday Inn permit was not “an arbitrary or unreasonable action.” The Court continued: [fjailure of the City to enforce its ordinance prohibiting the sale of beer within the City limits against the Holiday Inn or those who held permits at the time of the 1961 annexation does not, in our opinion, amount to unequal and discriminatory administration of the ordinance “with an evil eye and an unequal hand” which, of course, is not permissible under the equal protection clauses of the Fourteenth Amendment and of Article I, Section 8 and Article XI, Section 8 of the Tennessee Constitution. See Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220 (1886); Berry v. Arapahoe and Shoshone Tribes, 420 F.Supp. 934 (D.C.Wyo.1976). The same is true with respect to the third category of permit holders, viz., successor owners of establishments which were duly licensed by the Roane County Beer Board at the time of the 1961 annexation. The judgment of the trial court is Affirmed. FONES, COOPER and HARBISON, JJ., concurring. BROCK, J., dissenting. Footnotes [1] The owner of the new business to which the county permit had been issued was arrested for violation of the city ordinance. His Gonviction was upheld by this Court in Goldston v. City of Harriman, supra. [2] The City Charter, set out in the Private Acts of 1917, Chapter 165, Article 2, § 18, Subsection 12, provides in part: “It shall be unlawful for any person to sell or tipple any intoxicating liquors, including wine, ale, and beer as a beverage in the City of Harriman within one mile of any schoolhouse, . . . where a school is kept, whether the school be in session or not, or within one mile of a church building in which people usually congregate for religious worship or within one thousand (1,000) feet of any dwelling-house occupied by a family.” The location of appellant’s establishment is within 200 feet of a public school, 225 feet of a church and 50 feet of a dwelling-house occupied by a family.