Underwood v. State Board of Alcoholic Control

Annotate this Case

181 S.E.2d 1 (1971)

278 N.C. 623

Edward Leon UNDERWOOD t/a the Castaway Night Club, Petitioner, v. STATE BOARD OF ALCOHOLIC CONTROL, Respondent.

No. 74.

Supreme Court of North Carolina.

May 12, 1971.

*5 Robert Morgan, Atty. Gen., by Christine Y. Denson, Asst. Atty. Gen., and James L. Blackburn, Staff Atty., Raleigh, for the respondent appellant.

Charles B. Hodson, Chapel Hill, and Robert L. Satterfield, Hillsborough, Attys. for petitioner appellee.

HUSKINS, Justice:

It is well established that regulation of the sale and use of alcoholic beverages is within the police power of the State. Boyd v. Allen, 246 N.C. 150, 97 S.E.2d 864 (1957). The State Board of Alcoholic Control is empowered to enforce laws relating to the sale and control of alcoholic beverages. G.S. § 18-39. The suspension and revocation of licenses by the Board are administrative decisions affecting the rights of specific parties and are subject to judicial review under the provisions of Article 33 of Chapter 143 of the General Statutes. Upon such review, the "whole record" test is applicable, and the decision of the Board may be reversed if substantial rights of the licensee are prejudiced by administrative findings, inferences, conclusions or decisions which are not supported "by competent, material, and substantial evidence in view of the entire record as submitted." G.S. § 143-315(5); Freeman v. Board of Alcoholic Control, 264 N.C. 320, 141 S.E.2d 499 (1965); Keg, Inc. v. Board of Alcoholic Control, 277 N. C. 450, 177 S.E.2d 861 (1970). The "whole record" test must be distinguished from the "any competent evidence" standard. See Hanft, North Carolina Case LawAdministrative Law, 45 N.C.L.Rev. 816 (1967).

The State Board of Alcoholic Control has adopted regulations to administer the laws governing the sale of wine and malt beverages, and the Board may revoke or suspend the State permit of any licensee for a violation of the law or of any regulation adopted by it. G.S. § 18-78(d). Regulation No. 30 reads as follows: "Permits authorizing the sale at retail of beverages, as defined in G.S. 18-64, and Article 5 of Chapter 18 of the General Statutes, for on or off premises consumption may be suspended or revoked upon violation of * * * the following provisions upon the licensed premises: * * * 5. Permitting any person engaging in an affray or disorderly conduct." Petitioner is charged with a violation of this regulation.

All the evidence adduced at the hearing and considered by the Board tends to show that the licensee was making a reasonable effort in good faith to enforce the provisions of G.S. § 18-78.1(4) which provides that a licensee shall not permit on the licensed premises any disorderly conduct, *6 breach of the peace, etc. Accordingly, Underwood's employees were ejecting trouble-makers from his premises, thus indicating petitioner's disapproval of the disorderly conduct in which the participants were engaged. Notwithstanding such evidence, petitioner was found by the Board to be in violation of Regulation No. 30(5)permitting others to engage in an affray.

That there was an affray or breach of the peace on petitioner's premises is not disputed. The question is whether forcible removal from the premises of persons engaged in an affray constitutes "permitting or allowing persons to become engaged in an affray"? The answer is no.

To permit means to acquiese with knowledge, to knowingly consent. Hinkle v. Siltamaki, 361 P.2d 37 (Wyo., 1961). The words "permit" and "allow" are synonymous. Collins v. Johnson, 242 S.C. 112, 130 S.E.2d 185 (1963); City of Eastlake v. Ruggiero, 7 Ohio App.2d 212, 220 N.E.2d 126 (1966). "Permit" has been construed to mean in effect "knowingly permit", as the following cases illustrate. To permit sale of alcoholic beverages to a minor connotes some opportunity for knowledge and prevention of the sale. People v. Teetsel, 12 Misc.2d 835, 177 N.Y.S.2d 612 (1958). To permit livestock to run at large means to allow it to be done with knowledge. Hinkle v. Siltamaki, supra. To permit the unlawful sale of liquor in his building, an owner must have knowledge of the violation and consent to it. Gray v. Stienes, 69 Iowa 124, 28 N.W. 475 (1886). To permit persons "to resort for the purpose of drinking intoxicating liquors" means to consent to same. State v. Wheeler, 38 N. D. 456, 165 N.W. 574 (1917). To permit gaming in one's house means to consent to it with knowledge. Stuart v. State, 60 S.W. 554 (Tex.Cr.App., 1901).

We therefore hold that Regulation No. 30(5), authorizing suspension or revocation of license for "permitting any person engaging in an affray or disorderly conduct", means knowing acquiescence in such conduct. The mere fact that an affray took place on the premises is no violation of the regulation and affords no basis for suspension or revocation of license. The record in this case does not support by competent, material and substantial evidence the charge that Edward Leon Underwood knowingly permitted the affray. Instead, it points to the conclusion that he was making a reasonable effort in good faith to prevent such conduct by ejecting the wrongdoers from the premises.

It is unlawful for any person "to permit any alcoholic beverages to be possessed or consumed upon any premises not authorized pursuant to chapter 18, North Carolina General Statutes." G.S. 18-51(6), par. d. Furthermore, under a license for the sale of malt beverages and wines for consumption on or off premises, no holder of such license shall "knowingly permit the consumption on the licensed premises of any kind of alcoholic liquors the sale or possession of which is not authorized by law." (Emphasis added) G.S. § 18-78.1(5).

The Board charges Edward Leon Underwood with a violation of the foregoing statutes in that he allegedly permitted the consumption of alcoholic liquors on his licensed premises. We now examine the validity of this charge.

Officer Ludwick testified that at 10:00 p. m. on the night in question he saw two boys come out of the club, enter a parked car, and tilt a bottle as if pouring into a cup; that he demanded and received from the boy named Bobby Eugene Moore a bottle of Bicardi Rum approximately one tenth full; that at 10:35 p. m. several boys went to a parked car on the club's parking lot with cups in their hands and a bottle of whiskey; that he demanded and received from a boy named James Davis Knott a bottle of Ancient Age Whiskey.

Petitioner testified that all patrons with whiskey are required to surrender it or pour it out before entering the club; that signs had been erected on the parking lot *7 to the effect that alcohol was not allowed but had been torn down by people backing over them; that he has personnel who patrol the parking area at night and the grounds were being patrolled on the night the episodes described by Officer Ludwick, occurred; that he ordinarily has two or three hundred patrons on Saturday night, and it is difficult to watch everybody in their cars at the same time. Petitioner's evidence is not refuted. The Board relies on the evidence of Officer Ludwick.

Knowledge may be implied from the circumstances. State v. Stathos, 208 N.C. 456, 181 S.E. 273 (1935). Knowledge means "an impression of the mind, the state of being aware; and this may be acquired in numerous ways and from many sources. It is usually obtained from a variety of facts and circumstances. Generally speaking, when it is said a person has knowledge of a given condition, it is meant that his relation to it, his association with it, his control over it and his direction of it are such as to give him actual information concerning it." State v. Hightower, 187 N.C. 300, 121 S.E. 616 (1924). Thus the holder of a license for the sale of wine and beer who is aware of violations on his premises but who arranges never to see them cannot be said to be ignorant of their existence. He must take steps to avoid violations or suffer the penalties prescribed. Campbell v. Board of Alcoholic Control, 263 N.C. 224, 139 S.E.2d 197 (1964).

When the foregoing principles are applied to the record as a whole in the case before us, there is a lack of substantial evidence that petitioner knowingly permitted the two violations observed by Officer Ludwick. The mere fact that two boys violated the law on petitioner's premises on a single night within a period of thirty-five minutes does not constitute substantial evidence that petitioner knowingly permitted the consumption of alcoholic liquors on his premises.

The charge of failing to properly supervise the premises is likewise unsupported by substantial evidence. There was evidence that petitioner's employees were patrolling the parking lot on the night in question and no evidence to the contrary. In Food Stores v. Board of Alcoholic Control, 268 N.C. 624, 151 S.E.2d 582 (1966), the proprietor was charged, inter alia, with failure to give proper supervision to his premises by allowing the sale of beer to a minor. Chief Justice Parker, writing for the Court, said: "Surely, a sale of beer on one occasion to a minor under the circumstances here is not a failure to give the licensed premises proper supervision." By like token, under the circumstances here, we hold that the failure to observe all activities on a busy parking lot for a period of thirty-five minutes is not a failure, within the meaning of the law, to give the licensed premises proper supervision.

For lack of competent, material and substantial evidence to support the findings and order of the Board, in view of the entire record as submitted, the judgment of the superior court is