Hursey v. Town of Gibsonville

202 S.E.2d 161 (1974) 284 N.C. 522

S. H. HURSEY, Jr., t/b/a Hursey's Handy Corner, et al.
v.
The TOWN OF GIBSONVILLE, a municipal corporation, et al.

No. 55.

Supreme Court of North Carolina.

January 25, 1974.

Forrest E. Campbell and Walker, Short & Alexander by W. Marcus Short, Greensboro, for plaintiffs appellants.

Smith, Moore, Smith, Schell & Hunter by Beverly C. Moore, Greensboro, for defendants appellees.

Robert Morgan, Atty. Gen. by Howard A. Kramer, Associate Atty., for the State.

HIGGINS, Justice.

The plaintiffs, the trial court, and the Court of Appeals seem to have proceeded on the theory that the plaintiffs have a constitutional right to engage in the sale and distribution of wine and beer. The assumption overlooks the fact that beer, wine, and other alcoholic beverages, because of the inherent danger in their unrestricted use, are made subjects of rigid regulation and control by the General Assembly acting under the State's police power.

Chapter 18A, General Statutes of North Carolina, 1971 Cumulative Supplement, establishes, "[A] uniform system of control over the sale, purchase, transportation, manufacture, and possession of intoxicating liquors in North Carolina. . . ." Article 2, Chapter 18A-14, creates a State Board of Alcoholic Control and gives the Board power and authority to make and enforce regulations for control of the sale, purchase, transportation, manufacture, and possession of intoxicating beverages. The Act provides for the issuance of permits by the Board of Alcoholic Control and, except as authorized by a legally issued permit, sales, etc. of alcoholic beverages are made unlawful. The Board of Alcoholic Control has no power to issue a permit which authorizes the holder to violate the restrictions fixed by the Control Act. Underwood v. Board of Alcoholic Control, 278 N.C. 623, 181 S.E.2d 1; State Keg, Inc. v. Board of Alcoholic Control, 277 N.C. 450, 177 S.E.2d 861; D & W, Inc. v. Charlotte, 268 N.C. 577, 151 S.E.2d 241; Lampros Wholesale, Inc. v. ABC Board, 265 N.C. 679, 144 S.E.2d 895.

Other than as authorized by a legally issued permit, there is no right to sell beer, wine, and other alcoholic beverages in North Carolina.

Section 18A-2. Definitions, provides:

"(4) The word `liquor' or the phrase `intoxicating liquor' shall be construed to include alcohol, brandy, whiskey, rum, gin, beer, ale, porter, and wine, and in addition thereto any spirituous, vinous, malt or fermented beverages, liquids, and compounds, whether medicated, proprietary, patented, or not, and by whatever name called, containing one half of one percent (½ of 1%) or more of alcohol by volume, which are fit for use for beverage purposes.

* * * * * *

"(9) The word `permit' shall mean a written or printed authorization to engage in some phase of the liquor industry which may be issued by the State Board of Alcoholic Control under the provisions of this Chapter."

Article 3, Section 18A-31, provides:

"(a) Permits.—Any person, association, or corporation making application for a permit under this Article shall file said application and appropriate fee with the State Board of Alcoholic Control, and said Board shall have the exclusive authority, not inconsistent herewith, in issuing any permit, or in renewing, suspending, or revoking any temporary or annual permit."

Article 3, Section 18A-31, authorizes the Board of Alcoholic Control to issue "brown bagging" permits:

"(7) All permits shall be issued for a designated location, a separate permit being required for each separate location of any business.

"(8) Said Board shall not refuse the issuance of any permit to any person, firm, or corporation who shall comply with the provisions of this Chapter, and the issuance of a permit shall not be arbitrary in any case, but issuance of a permit shall be mandatory to any person, firm, or corporation complying with the provisions of this Chapter."

The Town of Gibsonville, under the authority of Article 4, Part 1, Section 18A-33, passed a resolution prohibiting the sale of wine and beer on Sunday. Subsection (b) provides:

"In addition to the restrictions on the sale of malt beverages and/or wines (fortified or unfortified) set out in this section, the governing bodies of all municipalities and counties in North Carolina shall have, and they are hereby vested with, full power and authority to regulate and prohibit the sale of malt beverages and/or wine (fortified or unfortified) from 1:00 P.M. on each Sunday until 7:00 A.M. on the following Monday. Provided, however, that municipalities and counties shall have no authority under this subsection to regulate or prohibit sales after 1:00 P.M. on Sundays by establishments having a permit ["brown bagging"] issued under Article 3 of this Chapter." (Emphasis added.)

The statutory authority which gives Gibsonville the right to prohibit sales on Sundays, in the same section provides that such power does not include the right to invalidate or neutralize a "brown bagging" permit. Not only the Act protects a "brown bagging" permit, but a general State law takes precedence over a city ordinance. State v. Williams, 283 N.C. 550, 196 S.E.2d 756; Staley v. Winston-Salem, 258 N.C. 244, 128 S.E.2d 604; Davis v. Charlotte, 242 N.C. 670, 89 S.E.2d 406. G.S. § 160A-174(b) provides: "A city ordinance shall be consistent with the Constitution and laws of North Carolina. . . . An ordinance is not consistent. . . when . . . (2) The ordinance makes unlawful an act, omission or condition which is expressly made lawful by State or federal law."

The General Assembly undoubtedly has authority to provide for the creation of classes and to classify objects of legislation. The classifications are upheld if they are practical and prescribe regulations for different classes. The one requirement is that the ordinance creating a classification must affect all persons similarly situated or engaged in the same business without discrimination. Boyd v. Allen, 246 N.C. 150, 97 S.E.2d 864; State v. McGee, 237 N.C. 633, 75 S.E.2d 783.

G.S. § 18A-30 (and its predecessor G.S. § 18-51) carefully prescribe the type of businesses which may hold "brown bagging" permits. The question of selection is legislative and not legal. Where the Legislature makes the classification, the courts are not authorized to supplant the legislative intent and purpose by substituting their own. The Legislature is presumed to have provided for a reasonable classification and the burden is on the plaintiff to show the classification is unreasonable. "[C]lassifications as such are not unlawful. They become unlawful when they are arbitrary and unreasonable." Galloway v. Lawrence, 263 N.C. 433, 139 S.E.2d 761. "`Class legislation' is not offensive to the Constitution when the classification is based on a reasonable distinction and the law is made to apply uniformly to all the members of the class affected." Cheek v. City of Charlotte, 273 N.C. 293, 160 S.E.2d 18. "The question of the propriety, wisdom, and expediency of legislation is exclusively a legislative matter and if an Act is otherwise unobjectionable, all that can be required of it is that it be general in its application to the class or locality to which it applies and that it be public in its character." Furniture Co. v. Baron, 243 N.C. 502, 91 S.E.2d 236. "Neither the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution nor the similar language in Art. 1, § 19, of the Constitution of North Carolina takes from the State the power to classify persons or activities when there is reasonable basis for such classification and for the consequent difference in treatment under the law. . . ." Guthrie v. Taylor, 279 N.C. 703, 185 S.E.2d 193. The legislative determination of the class of establishments entitled to "brown bagging" permits does not seem to offend against constitutional guarantees. Cheek v. City of Charlotte, supra. Surplus Co. v. Pleasants, Sheriff, 264 N.C. 650, 142 S.E.2d 697.

In this action the plaintiffs attempted either to obtain "brown bagging" privileges for which they have not applied, or in the alternative, that the "brown bagging" privileges held by a competitor in Gibsonville be declared to be illegal. A permit grants a privilege. It does not convey either a constitutional right or a property right. It is subject to cancellation by the issuing authority for cause. Boyd v. Allen, supra; 48 C.J.S. Intoxicating Liquors § 109 a.; 30 Am.Jur., Intoxicating Liquors, § 136.

In view of the decisions of the superior court and the Court of Appeals in this case and the reasons assigned for the decisions, we have concluded the foregoing discussion not inappropriate, even though the allegations of the complaint (there being no factual dispute) fail to set forth facts constituting a claim upon which the Court may grant the relief prayed for by the plaintiffs. The failure to establish a sufficient basis for injunctive relief, it follows that the Attorney General's motion that the plaintiffs' action be dismissed should have been allowed.

The plaintiffs allege they operate places of business in Gibsonville and that they have permits from the City to sell beer and wine for off premises consumption. The Town of Gibsonville has passed an ordinance prohibiting the sales on Sunday. One of the plaintiffs' competitors holds a "brown bagging" permit and sells beer and wine on Sunday, disregarding the Town's ordinance. The plaintiffs pray the Court to declare this Sunday ordinance unconstitutional, and its enforcement against them, on the ground that to permit a competitor to sell on Sunday (they being prohibited) is a denial of the plaintiffs' constitutional rights.

The Attorney General, for the State, answered the complaint, prayed that the Gibsonville Sunday ordinance be declared valid except as to businesses holding "brown bagging" permits issued under the State law, and that they be not affected by Gibsonville's Sunday ordinance.

This Court has uniformly held that the constitutionality of a criminal statute or ordinance may not be attacked by civil suit to restrain enforcement. Justice Sharp in D & W, Inc. v. Charlotte, supra, states the rule: "Equity will not restrain the enforcement of a criminal statute or regulatory ordinance providing a penalty for its violation; it may be challenged and tested only by way of defense to a criminal prosecution based thereon. . . . To the general rule, however, there is an exception: If the statute or ordinance itself is void, its enforcement will be restrained where there is no adequate remedy at law and such action is necessary to protect property and fundamental human rights which are guaranteed by the constitution. Surplus Store, Inc. v. Hunter, 257 N.C. 206, 125 S.E.2d 764; . . . Roller v. Allen, 245 N.C. 516, 96 S.E.2d 851;. . ." A plaintiff must allege and prove that enforcement deprives him individually of a constitutional and property right.

The main thrust of plaintiffs' complaint seems to be that a "brown bagging" permit entitles the holder to sell beer and wine on Sunday for off premises consumption—a right the plaintiffs do not have under their permits. The correct answer to the plaintiffs' complaint is provided by the statute. The plaintiffs, if they can qualify and pay the fees for the permits, the Board of Alcoholic Control cannot deny, but must issue the permit. Article 3, Section 18A-31(a)(8) provides: "Said Board shall not refuse the issuance of any permit to any person, firm, or corporation who shall comply with the provisions of this Chapter, and the issuance of a permit . . . shall be mandatory to any person, firm, or corporation complying with the provisions of this Chapter."

The general rule is that when a valid ordinance requires a license or permit as a prerequisite to carrying on a certain business, the enforcement of the ordinance will not be enjoined when an application has not been made for a permit. 43 C.J.S. Injunctions § 119, at p. 657. Our decisions hold the sale of alcoholic beverages can be legal only when authorized by a legally issued permit. The right to sell has its foundation in the permit and does not exist as a constitutional or property right. The record in this case, therefore, discloses neither a legal nor a factual foundation upon which a court of equity may grant to the plaintiffs the relief they demand.

We have discussed the legal propositions argued by the parties and decided by the superior court and by the Court of Appeals; however, we think adherence to sound principles of law and orderly procedure require this Court to hold that the superior court committed error of law by denying the Attorney General's motion to dismiss and the Court of Appeals likewise committed error by modifying and affirming the judgment.

For the reasons herein assigned and upon the authorities cited we conclude the Superior Court of Guilford County committed error in failing to grant the Attorney General's motion to dismiss made at the close of the hearing in the superior court. The decision of the Court of Appeals is reversed. The Court of Appeals will remand the cause to the Superior Court of Guilford County for the entry of judgment dismissing the plaintiffs' action.

Reversed and remanded.

BOBBITT, Chief Justice (concurring).

I am in accord with the majority view that G.S. § 18A-33(b) in its entirety is constitutional and valid. It both confers and limits the authority of a municipality. Any portion of an ordinance which conflicts with or exceeds the authority conferred by G.S. § 18A-33(b) is invalid.

G.S. § 18A-33(b), if unconstitutional on account of the proviso, is unconstitutional in its entirety. Cheek v. City of Charlotte, 273 N.C. 293, 160 S.E.2d 18 (1968). Whether the proviso should be deleted is for legislative—not judicial—determination.

HUSKINS, Justice (dissenting).

G.S. 18A-33(b) reads in pertinent part as follows:

". . . [T]he governing bodies of all municipalities and counties in North Carolina shall have, and they are hereby vested with, full power and authority to regulate and prohibit the sale of malt beverages and/or wine (fortified or unfortified) from 1:00 P.M. on each Sunday until 7:00 A.M. on the following Monday. Provided, however, that municipalities and counties shall have no authority under this subsection to regulate or prohibit sales after 1:00 P.M. on Sundays by establishments having a permit issued under G.S. 18A-30(2) and (4)."

Pursuant to the authority contained in the foregoing statute, the Town of Gibsonville adopted an ordinance providing in pertinent part as follows: "The sale of malt beverages and wine (fortified or unfortified) from 1:00 P.M. on each Sunday until 7:00 A.M. on the following Monday is prohibited. . . ." However, in order to comply with the proviso contained in G.S. § 18A-33(b) the ordinance is not enforced against establishments having a permit issued under G.S. § 18A-30(2) and (4), that is, holders of "brown bagging" permits. Plaintiffs contend this amounts to an unconstitutional discrimination against them and bring this action to remove the discrimination.

We have held in numerous cases that the observance of Sunday as a day of rest has a reasonable relationship to the public peace, welfare, safety and morals, and that such requirement rests within the police power of the State—a power often delegated by the State to its municipalities. Clark's Charlotte, Inc. v. Hunter, 261 N.C. 222, 134 S.E.2d 364 (1964); State v. Trantham, 230 N.C. 641, 55 S.E.2d 198 (1949).

In enacting statutes or ordinances for the observance of Sunday, the State, or a municipality to which the power has been delegated, may determine and classify the pursuits, occupations or businesses to be excluded from Sunday operations; and if the classifications are based upon reasonable distinctions and have some reasonable relationship to the public peace, welfare, safety and morals, they will be upheld. State v. McGee, 237 N.C. 633, 75 S.E.2d 783 (1953); State v. Towery, 239 N.C. 274, 79 S.E.2d 513 (1954). "The one requirement is that the ordinance must affect all persons similarly situated or engaged in the same business without discrimination." State v. Trantham, supra. Conversely, if the classifications are based upon unreasonable distinctions and have no reasonable relationship to the public peace, welfare, safety and morals, they violate due process and deny equal protection of the laws guaranteed by the Fourteenth Amendment to the Federal Constitution and Article I, section 19 of the Constitution of North Carolina.

Involved in this case is the business of selling beer and wine for off-premises consumption. As I view it, no legitimate reason appears why the Sunday sale of beer and wine for off-premises consumption by the holder of a "brown bagging" permit tends to "sustain life, promote health, and advance the enjoyment of Sunday as a day of rest," Charles Stores v. Tucker, 263 N. C. 710, 140 S.E.2d 370 (1965), so as to come within the permissible Sunday pursuits, while the Sunday sale of beer and wine for off-premises consumption by a grocery store or any other lawful business establishment profanes the Sabbath and offends the purposes for which the statute or ordinance was enacted so as to come within the impermissible Sunday pursuits. Such classification, in my opinion, is founded upon unreasonable distinctions, discriminates against those engaged in the sale of wine and beer for off-premises consumption who are not holders of "brown bagging" permits, and has no reasonable relation to the objective sought by enactment of the statute or ordinance. Insofar as observance of the Sabbath is concerned, what is the reasonable distinction between selling for off-premises consumption a six-pack of beer in a brown bagging establishment and selling for off-premises consumption the same six-pack in a grocery store? I fail to see it.

It necessarily follows that insofar as G. S. § 18A-33(b), and the Gibsonville ordinance by the manner of its enforcement, attempt to put in different classifications the sale of wine and beer for off-premises consumption by those who do and those who do not hold brown bagging permits—the one allowed and the other prohibited—said statute and discriminatory enforcement of the ordinance are unconstitutional and should not be upheld. Businesses which are essentially the same—selling beer and wine for off-premises consumption—should not be treated in law as though they are different. Discrimination exists when, under the same conditions, persons engage in the same business are subjected to different restrictions and permitted to enjoy different privileges. Such discrimination impairs equality of protection and denies due process of law which is vouchsafed for all men by both State and Federal Constitutions.

For the reasons stated I would affirm the decision of the Court of Appeals and hold unconstitutional that portion of G.S. § 18A-33(b) which requires discriminatory enforcement of the ordinance against Sunday sales of wine and beer for off-premises consumption. Gibsonville could then enforce its ordinance without discrimination or repeal it, according to the wishes of its citizens.