decided: August 21, 1979.
IN RE: HONEY BEAR, INC. REVOCATION OF LIQUOR LICENSE. COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA LIQUOR CONTROL BOARD, APPELLANT
Appeal from the Order of the Court of Common Pleas of Allegheny County in case of In Re: Honey Bear, Inc., Revocation of Liquor License, No. 319 of 1977.
David Shotel, Assistant Attorney General, with him Kenneth W. Makowski, Acting Chief Counsel, and Gerald Gornish, Attorney General, for appellant.
Mark L. Glosser, with him Robert G. Sable, and Lampl & Sable, for appellee.
Judges Blatt, DiSalle and MacPhail, sitting as a panel of three. Opinion by Judge MacPhail. Dissenting Opinion by Judge DiSalle.
[ 45 Pa. Commw. Page 187]
The Liquor Control Board (Board) appeals from an order of the Court of Common Pleas of Allegheny County reversing the Board's revocation of a liquor license issued to Honey Bear, Inc. (Honey Bear) and ordering the Board to renew Honey Bear's license. The only issue raised by the Board in this appeal is whether the order of the Court of Common Pleas is in error. Before deciding that issue, however, we must determine whether this case is controlled by Section 468 of the Liquor Code (Code), Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 4-468 which was in effect at the time the Board revoked Honey Bear's license or by Section 468(b.1) of the Code, added by Section 2 of the Act of November 26, 1978, P.L. 1389, which became effective while the case was on appeal. For the reasons which follow, we hold that Section 468 of the Code is the controlling statute and that the lower court erred as a matter of law in reversing the Board's revocation of Honey Bear's license.
The facts of this case, although not in dispute, are important to an understanding of our disposition. On October 14, 1976, a Petition for Dissolution of Honey Bear was filed in the Court of Common Pleas of Allegheny County by Bennie Andy, a shareholder, officer and creditor of Honey Bear alleging, inter alia, that Honey Bear was insolvent. The Court, on the same day, entered an order appointing a receiver pendente lite and on December 6, 1976 made that appointment permanent. In January, 1977, the Board notified Honey Bear through Andy that the Board had received information that the licensee was insolvent and that a citation to show cause why the license should not be suspended or revoked might issue. On February 21, 1977, following an exchange of correspondence with the Board, the receiver placed the license in safekeeping with the Board. On March 1,
[ 45 Pa. Commw. Page 1881977]
, the Board issued a show cause citation why the license should not be revoked and fixed a hearing on the petition for April 29, 1977. On March 2, 1977, the receiver filed with the Board an application for renewal of the license.*fn1 On April 14, 1977, the receiver's application for renewal was denied by a letter from the Board. On April 29, the Board conducted a hearing on the show cause citation and on May 23, 1977 entered an order revoking the license. On May 30, 1977, the receiver appealed from the Board's denial of the application for renewal of the license. The receiver filed a timely appeal with the Allegheny County Court of Common Pleas from the Board's order of May 23, 1977 revoking the license. On August 15, 1977, the Court of Common Pleas of Allegheny County entered the order from which the Board now appeals.
At the time of Honey Bear's insolvency and for more than a year thereafter, Section 468 of the Code was in effect. That section read:
(b) In the event that any person to whom a license shall have been issued under the provisions of this article shall become insolvent, . . . the license of such person shall immediately terminate and be cancelled without any action on the part of the board, and there shall be no refund made or credit given for the unused portion of the license fee for the remainder of the license year for which said license was
[ 45 Pa. Commw. Page 189]
granted. Thereafter, no license shall be issued by the board for the premises wherein said license was conducted to any assignee, committee, trustee, receiver, or successor of such licensee, until a hearing has been held by the board as in the case of a new application for license. In all such cases, the board shall have the sole and final discretion as to the propriety of the issuance of a license for such premises and as to the time it shall issue and the period for which it shall be issued, and shall have the further power to exact conditions under which said license shall be conducted.
While this appeal was pending in this Court, Section 468(b.1) became effective. That Section provides that:
(b.1) In the event that any person to whom a license shall have been issued under the provisions of this article shall become insolvent, . . . the license of such person shall be immediately placed in safekeeping with the board for the balance of the term of the license and for an additional period of one year upon application to the board by the trustee, receiver, or assignee. The trustee, receiver, or assignee shall have, during said period of safekeeping, the same rights, benefits and obligations as to the license as the person to whom the license had been issued, including the right to transfer the license subject to the approval of the board. The license shall continue as a personal privilege granted by the board and nothing herein shall constitute the license as property.
Honey Bear argues that Section 468(b.1) is a procedural law rather than one affecting vested rights and, therefore, should be applied to any litigation pending at the time of its enactment. Honey Bear's statement of this general legal principle is correct.
[ 45 Pa. Commw. Page 190]
been terminated by operation of law before the enactment of Section 468(b.1). Therefore, the Act cannot be applied retroactively to a license that no longer exists.
Honey Bear argues that even if the license was terminated on October 14, 1976, the Board is estopped from asserting the termination because it accepted the license for safekeeping on February 21, 1977, or, in the alternative, that the lower court's order of August 15, 1977 revived the license thereby making it subject to the standards set forth in Section 468(b.1). We agree with neither contention.
Because Honey Bear's license was terminated by operation of law on October 14, 1976, no license, in fact, existed on the date when the Board purported to accept it for safekeeping. Even were we to decide that the Board's acceptance of the license served to revive it, which we do not, such acceptance would not prevent the Board from revoking it upon a formal finding that Honey Bear was insolvent. The decision in Whitford Liquor License Case, 166 Pa. Superior Ct. 48, 70 A.2d 708 (1950) is instructive to us here.
In Whitford, the Board mistakenly issued a liquor license for a restaurant in a township where the full quota of licenses had already been issued. A year later, the Board refused to renew the license due to the quota limitation. In reversing the order of the Court of Quarter Sessions of Lackawanna County which had reversed the Board's decision to deny the license renewal, the Superior Court said:
Under that explicit language [of Section 2 of the Quota Law, Act of June 24, 1939, P.L. 806, as amended, 47 P.S. § 744-1002] the board was entirely without authority to grant a restaurant license for a place in South Abington Township. Granting the license was an illegal act, and the board had no power to perpetuate the illegality by renewing it.
[ 45 Pa. Commw. Page 192]
For the foregoing reasons, the order of the Court of Common Pleas of Allegheny County is reversed and the order of the Liquor Control Board revoking the license of Honey Bear, Inc. is reinstated.
And Now, this 21st day of August, 1979, the order of the Court of Common Pleas of Allegheny County, Civil Division, at No. SA 319 of 1977, dated August 15, 1977, is reversed and the order of the Pennsylvania Liquor Control Board revoking the license of Honey Bear, Inc., dated May 23, 1977, is reinstated.
Reversed. Revocation order reinstated.
Dissenting Opinion by Judge DiSalle:
I respectfully dissent. The majority indicates its agreement with Honey Bear's argument that Section 468(b.1) is a procedural law and that it should be applied to pending litigation. However, the majority concludes that the principle is not applicable here. I disagree. The majority holds that the license terminated on October 14, 1976 and that "no license, in fact, existed on the date the Board purported to accept it for safekeeping." However, the fact remains that the Board did accept the license for safekeeping; the Board did, on May 23, 1977, enter an order revoking the license; and the lower court did order the Board to renew the license on August 18, 1977. Metaphysical considerations aside, it is obvious that all of these
[ 45 Pa. Commw. Page 194]
actions dealt with an "existing" license. It seems clear to me that the 1978 amendment applies here and that the receiver should be permitted to transfer the license pursuant thereto. I fail to see what harm would result from our so deciding, and conceivably, the licensee's creditors would benefit therefrom. See my dissenting opinion in Meyers v. The Board of Supervisors of Lower Makefield Township, Pa. Commonwealth Ct. , 402 A.2d 278 (1979).