HUB NAUTICAL SUPPLY CO., INC. vs. ALCOHOLIC BEVERAGES CONTROL COMMISSION & others.

HALE, C.J. The plaintiff (Hub) is a Massachusetts corporation engaged in the business of ship chandlery, the outfitting and provisioning of vessels, specifically those using the port of Boston. Its charter empowers it to sell foods and all kinds of beverages. Hub applied to the licensing board for the city of Boston (board) for a license to sell wine and malt beverages at retail pursuant to the provisions of G. L. c. 138, Section 15. After a hearing the board voted to issue Hub such a license subject to the following conditions: (1) that Hub not sell wine or malt beverages in small quantities

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to pedestrian clientele; (2) that Hub not solicit a pedestrian clientele, and (3) that Hub only sell in bulk to ships. The action of the board on this license was then submitted to the Alcoholic Beverages Control Commission (commission) which disapproved it on the principle that a license so restricted "would be a direct contradiction of the provisions of the Liquor Control Act." The commission specifically stated that it had no objection to Hub's "being granted a section 15 license, subject to reasonable rules and regulations" but further stated that it was "of the opinion that the conditions imposed on this application are beyond the scope of authority of the local board." Hub then brought a complaint under G. L. c. 231A [Note 1] against the commission and the board seeking a declaration of the extent of the board's powers to impose restrictions on the licenses issued pursuant to G. L. c. 138, Section 15. Hub also sought an order directing the commission to approve the license the board had voted to issue to it. The case was submitted to the Superior Court on a stipulation of facts. The commission moved for summary judgment in its favor, but a judgment was entered which declared that it was within the board's power to impose the conditions and, further, that in disapproving the license for the reasons stated, the Commission had exceeded its authority. The judgment also ordered the commission to prove the license to Hub, subject to the conditions imposed by the board. The commission has appealed.

In ordering the judgment the Superior Court judge ruled that the commission "went beyond the scope of its lawful authority," that "the Commission's powers of review under Section 15 are limited to reviewing the applicant, and that, in disapproving Hub's application for the reason stated, it overstepped those statutory limits." We do not agree that the language in G. L. c. 138, Section 15 ("No such license shall be

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granted except to an applicant approved by the commission"), limits the commission's powers with respect to the issuance of a license under Section 15 solely to the approval of the applicant. In Connolly v. Alcoholic Beverages Control Commn., 334 Mass. 613 (1956), the Supreme Judicial Court reviewed the propriety of the commissions disapproval, without a statement of reason, of an application of a Section 15 license which had been approved by the local licensing authority. The applicant there was a registered pharmacist who held a certificate of fitness issued by the board of registration in pharmacy under G. L. c. 138, Section 30, and was licensed to sell alcoholic beverages under G. L. c. 138, Sections 29-30H, as then in effect. As there was no other evidence before the commission that the applicant was not a proper person to hold a license, it was unlikely that the commission's disapproval was based on a disapproval of the applicant. The applicant's contention before the court was substantially the same as that of Hub in the present case; namely, "that the commission exceeded its authority under [the first paragraph of] Section 15 . . . and took into consideration factors which were not properly of concern to it." Id. at 615-616. The court examined the provisions of G. L. c. 6, Sections 43 and 44, [Note 2] and the provisions of G. L. c. 138, Sections 23 and 24, as then in effect, and concluded that the commission is given "comprehensive powers of supervision over licensees, including power to revoke and modify licenses." Id. at 617. The court stated that the legislative history of G. L. c. 6, Section 43, and of G. L. c. 138 showed that "the powers of the commission were not intended to be perfunctory or limited. In the very respect here in issue, the approval or disapproval of the action of local licensing authorities,

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that history indicates that the commission was charged with important responsibilities and that it was not to be narrowly restricted in performing them." Ibid. (footnote omitted). The court then said, as to the case before it, "It is not necessary to decide . . . what are the precise limits of the authority of the commission in considering the approval or disapproval of the acts of local licensing boards under Section 15, but we do hold that such authority at least extends to considering such matters (shown by the record to have been discussed by the commission at its hearing on the application) a (1) the existing patronage by school children and others of the petitioner's drug store; (2) the proximity of churches and schools; (3) the adequacy in the public interest of the drug store license under G. L. (Ter. Ed.) c. 138, Section 30A, as appearing in St. 1935, c. 440, Section 26, already possessed by the petitioner; and (4) whether this, on all the facts, was a proper instance in which a registered pharmacist might also be given a license under Section 15, as is permitted by G. L. (Ter. Ed.) c. 138, Section 29, as appearing in St. 1935, c. 440, Section 25. See discussion in Webster v. Alcoholic Beverages Control Commission, 295 Mass. 572, 575-576 [1936] . . . ." Id. at 617-618.

It is clear from the holding in the Connolly case that the commission is not limited to consideration of the applicant alone. While that case does not fix the outer limits of the stretch the power of the commission recognized in Connolly for us to decide, as we do, that it includes the power to determine whether the conditions on the license as approved by the board were within the board's authority. See Selectmen of Barnstable v. Alcoholic Beverages Control Commn., 373 Mass. 708, 714-718 (1977). Compare Boston Licensing Bd. v. Alcoholic Beverages Control Comm., 367 Mass. 788, 794-796 (1975).

We turn now to the question whether the commission was correct in determining that the board acted beyond the

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scope of its authority by imposing the conditions limiting the license to the sale of beer and wine in bulk to ships. [Note 3]

While a license under G. L. c. 138, Section 15, would permit a licensee to sell alcoholic beverages to ships, such a license is, as the board recognized and the commission noted, a license which provides for sales of alcoholic beverages to all members of the public who are of sufficient age and not disqualified under c. 138, Section 69, and who would ordinarily buy such beverages in small quantities. The conditions imposed by the board narrow that board range of permitted purchasers so severely that for all practical purposes the board's action creates an entirely new type or class or license,one for servicing only ships.4 It is the function of the Legislature and not the local licensing authorities to define the sales allowed under a license issued pursuant to G. L. c. 138 (see M.H. Gordon & Son, Inc. v. Alcoholic Beverages Control Commn., 371 Mass. 584, 588-589 [1976], and the board's attempt to do so was beyond its power. The commission thus acted reasonably in disapproving the license.

The judgment is reversed, and a new judgment is to be entered declaring that the conditions imposed by the board on Hub's license were beyond its power and that it was within the power of the commission to disapprove the license.

So ordered.