COTTON CLUB v. OKLAHOMA TAX COMM'N

COTTON CLUB v. OKLAHOMA TAX COMM'N
1945 OK 146
158 P.2d 707
195 Okla. 403
Case Number: 31801
Decided: 05/08/1945
Supreme Court of Oklahoma

COTTON CLUB
v.
OKLAHOMA TAX COMMISSION

Syllabus

¶0 1. INTOXICATING LIQUORS--Statutory inhibition against sale or dispensing of 3.2% beer on premises where dancing is conducted held to apply to private Club where profits would go to proprietors.
The provisions of H.B. 198, S.L. 1943 (37 0. S. 1941 §§ 211-218), prohibit the issuance of retail beer dealers' licenses to those who purpose selling beer on the premises where dancing is conducted, under the conditions stated; but section 6 of said act (sec. 216, supra) makes an exception thereto and makes the prohibition inapplicable to "private dances conducted for recreational purposes and not for profit by bona fide... clubs..." Two individuals organized a private club, in the nature of a "proprietary club," and they purpose selling memberships in said club to a limited number and to conduct recreational activities for the members of the club only, and they purpose conducting dances and selling beer on the club premises, and from all of the club activities they expect to make a profit which belongs to the individual proprietors. The Oklahoma Tax Commission found, from stipulation of the parties and from the plan of organization and proposed operation, that the dancing was not to be conducted for recreational purposes, but was to be conducted for profit, and that said organization did not come within the exceptions as provided in section 6 of said act: Held, the finding of the commission is correct.
2. CONSTITUTIONAL LAW--"Police power" an inherent attribute of state sovereignty.
The "police power" is an inherent attribute of state sovereignty, under which the state, within constitutional limitations, may determine what is dangerous and injurious to public order, safety, health, morals, and general welfare of society.
3. SAME--Scope of "equal protection" clause.
In determining the question of the constitutionality of a statute, and as to whether it is in violation of the "equal protection" clause of the Fourteenth Amendment to the Constitution of the United States, the following fundamental principles are important:
(a) The equal protection clause of the Fourteenth Amendment does not take from the state the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary.
(b) A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety, or because in practice it results in some inequality.
(c) When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed.
(d) One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.
4. SAME--Legislature's regulation need not extend to all cases which it might possibly reach.
The Legislature is not bound, in order to support the constitutional validity of its regulation, to extend it to all cases which it might possibly reach. It is free to recognize degrees of harm, and it may confine its restrictions to those classes of cases where the need is deemed to be clearest.
5. SAME--Legislature and not courts to determine policy of state as voiced in statutes.
The Legislature and not the courts must determine the policy of the state to be voiced in statutory enactments. Legislative power, not wisdom, is the concern of the courts.
6. SAME--Equal protection clause not violated by statute prohibiting sale of 3.2% beer on certain premises where public dancing is permitted.
Statute (37 0. S. 1941, §§ 211-218) examined and found not to be in violation of the equal protection clause of the Fourteenth Amendment to the Constitution of the United States by reason of its terms in prohibiting the sale of 3.2 beer on certain premises where public dancing is permitted.
7. SAME--Statute held not violative of certain provisions of Bill of Rights.
37 O. S. 1941 §§ 211 to 218, is not violative of either article II, sec. 32, or article II, see. 2, of the Oklahoma Constitution.
8. INTOXICATING LIQUORS--Validity of act regulating sale of 3.2% beer and operation of public dances and exempting certain clauses.
Legislative act regulating sale of 3.2 beer and operation of public dances, and exempting certain classes from provisions of act, will be sustained where such classification is neither unreasonable, capricious, nor arbitrary.

Appeal from Order of the Oklahoma Tax Commission.

Appeal by the Cotton Club from order denying application for retailer's beer permit. Affirmed.

Hal Welch, of Hugo, for plaintiffs in error.
E. L. Mitchell and W. D. Hereford, both of Oklahoma City, for defendant in error.

BAYLESS, J.

¶1 This appeal from an order of the Oklahoma Tax Commission involves the correctness of said order denying the application of the Cotton Club for a retailer's beer permit under the provisions of H. B. 198, S. L. 1943, 37 0. S. 1941. §§ 211-218. The Cotton Club, deeming itself within the exceptions in section 6 of said act, section 216, supra, applied for a retailer's beer permit, and upon hearing on said application the parties stipulated to certain facts. On this stipulation of facts the Oklahoma Tax Commission ruled as a matter of fact and law that the application should be denied. This appeal followed. Section 6 reads in part: "The limitation on the sale of beverages, and issuance of licenses therefor, contained in section 1, 2, and 5 of this act, should not be applicable to... private dances conducted for recreational purposes and not for profit by bona fide lodges, posts, clubs, fraternal, benevolent, or charitable organizations:..."

¶2 It was agreed that the Cotton Club is an organization created by Erne and Atoka Cotton, husband and wife, by written charter in which the membership is limited to 300, for which an initial fee and a monthly fee is charged, and that members of the club only may avail themselves of the privileges provided therein. The Cottons urge that it is what is described in 14 C. J. S. § 1, P. 1280 as an unincorporated proprietary club, which "...is one whose property and funds belong to a proprietor who usually conducts it with a view to profit; the members, in consideration of the payment by them to the proprietor of entrance fees and subscriptions, are entitled to make such use of the premises and property..." as the charter or contract justifies; and the Tax Commission does not dissent to this. The parties stipulated, among other things, to the following, which are urged by both as being of primary significance.

"It is further stipulated by the applicant that 3.2% non-intoxicating beverage will be sold to the members of the Cotton Club and that dancing will be permitted by said applicants in the ballroom of said Cotton Club, and that all profit derived from the operation of said Cotton Club shall be owned and possessed by Erne and Atoka Cotton.

"It is further stipulated by said applicants that said Cotton Club cannot be operated unless 3.2% non-intoxicating beverage is sold and dancing is permitted in said club and that said club cannot operate without both the beverage and the dancing."

¶3 We are of the opinion that the language of section 6 quoted above does not apply to the applicant in this case. We think it is a reasonable construction of the language quoted to mean that the organization specified therein may as a part of their recreational activities conduct private dances at which beer may be sold, when the primary purpose of conducting dances is, as the statute says, "for recreational purposes and not for profit." Our discussion of what amounts to a profit found in Re Farmers Union Hospital Association of Elk City, 190 Okla. 661, 126 P. (2d) 244, might well be applicable here. In this case the parties can idly stipulated that unless 3.2% nonintoxicating beverage could be sold its members at dances, the club could not operate, which is tantamount to saying that it was necessary to have this money to enable the club to operate and that in all likelihood a profit might be derived therefrom. The parties very candidly stipulated that if a profit was derived it did not belong to the club, but inured to the benefit of Erne and Atoka Cotton, which, as we pointed out in the case just cited, is a private profit or advantage, and as such is one of the things the Legislature was seeking to eliminate when it prescribed the exceptions in section 6.

¶4 The Legislature used extreme care in the language which it used in prescribing the exceptions to the law thus enacted, and we feel that it would thwart the purposes expressed and implied therein to be lax in the construction or application of that language or to construe or apply it in a manner obviously differing from that which the Legislature intended by the use of the language employed.

¶5 We hold that the order of the Oklahoma Tax Commission denying the application should be sustained on appeal.

¶6 The appellants raise certain constitutional objections to the validity of said H. B. 198, particularly asserting that the same violates article II, section 32, Constitution of Oklahoma, in that it tends to create monopolies; and that it violates the Fourteenth Amendment to the Federal Constitution in that by the enactment of this law, the state denies equal protection of the law to its citizens. In this connection the court has permitted the filing of a brief amicus curiae upon constitutional issues thus raised and the brief filed amicus curiae discusses at length and on broad general terms under four different headings the two constitutional objections just mentioned.

¶7 Amicus curiae calls our attention to the fact that the same broad general constitutional objections had been raised in briefs filed in Ex parte Strauch, (Okla. Cr.) 157 P.2d 201.

¶8 The Criminal Court of Appeals of Oklahoma has answered these constitutional questions in denying them any basis for the issuance of a writ of habeas corpus, and the basis for the answer given is, in our opinion, sound. It is true that the issue whereon the constitutional argument is made in that case arose from the application of the criminal provisions of said act, whereas the issue here arises on the civil aspect of the matter in the denial of the issuance of the application in the first instance. This is not of material significance in the application of the law. The rule, as promulgated by this court in Ex parte Anderson, 32 Okla. 216, 124 P. 980, and adhered to and followed in later decisions, is that where the same rule applies for the determination of the constitutionality of a statute in its criminal aspect as in its civil aspect, the settled policy of this court is to follow the construction given such statute by the Criminal Court of Appeals; and especially is this true where we are convinced of the soundness of the opinion of the Criminal Court of Appeals.

¶9 Therefore, based upon the decision of the Criminal Court of Appeals, in Ex parte Strauch, supra, we overrule the constitutional objections to the act in question.

¶10 The order appealed from is affirmed.

¶11 GIBSON, C.J., HURST, V.C.J., and RILEY, OSBORN, WELCH, DAVISON, and ARNOLD, JJ., concur.