South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Simon Lee, d/b/a Gaillard Street Grocery

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Simon Lee, d/b/a Gaillard Street Grocery
 
DOCKET NUMBER:
96-ALJ-17-0108-CC

APPEARANCES:
Arlene D. Hand, Esquire
Attorney for Petitioner

D. Malloy McEachin, Jr., Esquire
Attorney for Respondent
 

ORDERS:

ORDER AND DECISION

This matter comes before me for a hearing pursuant to S.C. Code Ann. § 1-23-310, et seq. and S.C. Code Ann. § 61-9-410(6) (Supp. 1995). Respondent Simon Lee, d/b/a Gaillard Street Grocery, holds a beer and wine permit for a location at 501 Gaillard Street, Florence, South Carolina. Petitioner alleges that Simon Lee or his employee knowingly possessed liquor on the licensed premises on or about November 10, 1995. Petitioner seeks a monetary fine of $400 for an alleged violation of S.C. Code Ann. § 61-9-410(6) (Supp. 1995).

After timely notice to the parties, a hearing was conducted at the Administrative Law Judge Division, Columbia, South Carolina. Based upon the testimony and evidence presented, this tribunal concludes that Petitioner failed to prove by a preponderance of the evidence that Respondent violated S.C. Code Ann. § 61-9-410(6) (Supp. 1995) on November 10, 1995 and, therefore, Petitioner's request that Respondent pay a monetary fine of $400 is denied.



FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. Respondent holds an on-premises beer and wine permit for a location at 501 Gaillard Street, Florence, South Carolina.

2. The subject location is operated as a bar/pool room. Upon entering the premises, the bar is located directly across from the front entrance. There is a back room in which pool tables are located.

3. On November 10, 1995, at approximately 8:45 p.m., Agent John B. Tucker of the South Carolina Law Enforcement Division Alcohol Enforcement Unit ("SLED") along with officers from the Florence Police Department, entered Gaillard Street Grocery for the purpose of conducting an inspection. Agent Tucker testified that upon entering the premises he observed a female, Ms. Witherspoon, standing at the counter/bar in possession of a cup. She attempted to pass the cup to the bartender, however, the cup was seized by Agent Tucker.

4. Agent Tucker and Agent Sonya Ashford, who was also at the subject location for the inspection on November 10, 1995, testified that they saw what they believed to be liquor in the cup and they both performed a sniff test of the liquid substance. Both agents determined that the liquid substance in the cup was liquor. The agents collectively have 27 years experience in performing sniff tests to detect the presence of liquor.

5. The bartender, Ernest Damon, was behind the counter/bar serving a customer when the police and agents entered the premises. Mr. Damon testified that Ms. Witherspoon had been on the premises two to three minutes prior to SLED and the police arriving. Ms. Witherspoon came into the establishment to talk to a relative on the premises. She did not obtain the liquor from the premises.

6. Upon inspection of the premises on November 10, 1995, agents found an open 200 ML bottle of Canadian Club Whiskey in the pool room of the subject location.

7. Respondent's employees make periodic inspections of the pool room for unlawful beverages and drugs.

8. On November 10, 1995, there were signs posted throughout the store which prohibited drinking inside or outside the premises, even though Respondent possesses an on-premises beer and wine permit. Signs were also posted which prohibited the sale of drugs on the premises.

9. Florence Police Department arrested Ms. Witherspoon for an alleged violation of the Alcoholic Beverage Control laws.

10. The Department did not offer any documentary or physical evidence in this matter. CONCLUSIONS OF LAW AND DISCUSSION

The only issue before this tribunal is whether Respondent or his servant, agent, or employee knowingly possessed any beverage or alcoholic liquor which was prohibited on the licensed premises under the laws of this State.

The South Carolina Department of Revenue and Taxation ("Department" or "Petitioner") is charged, inter alia, with the responsibility of administering and enforcing statutes and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. § 61-1-60 (Supp. 1995). Furthermore, the Department is authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the law pertaining to alcoholic beverages or any regulation promulgated by the Department. See S.C. Code Ann. § 61-9-410 (Supp. 1995). However, the Department may impose a monetary penalty as an alternative to revocation or suspension. S.C. Code Ann. § 61-1-80 (Supp. 1995).

Petitioner alleges that Simon Lee or his employee knowingly possessed liquor on the licensed premises on or about November 10, 1995, and, therefore, violated S.C. Code Ann. § 61-9-410(6)(Supp. 1995). S.C. Code Ann. § 61-9-410(6) (Supp. 1995) provides:

No holder of a permit authorizing the sale of beer and wine or any servant, agent, or employee of the permittee shall knowingly do any of the following acts upon the licensed premises covered by the holder's permit:

. . .

(6) sell, offer for sale, or possess any beverage or alcoholic liquor the sale or possession of which is prohibited on the licensed premises under the law of this State. . . . (emphasis added).

To warrant a violation of S.C. Code Ann. § 61-9-410(6) (Supp. 1995), the Department must establish that Respondent knowingly possessed liquor on the licensed premises.

Burden of Proof

In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 Am. Jur 2d, Evidence § 127 (2d ed 1994); Sanders, Neese, and Nichols. South Carolina Trial Handbook, § 9:3 Party With Burden, Civil Cases (1994). The Department is the party asserting the affirmative in this action, therefore, the Department must prove by a preponderance of the evidence that Respondent or Respondent's agent, servant, or employee knowingly possessed liquor on the premises in violation of S.C. Code Ann. § 61-9-410(6) (Supp. 1995). The preponderance of the evidence "is evidence which is of the greater weight or more convincing than the evidence which is offered in opposition to it . . . ." Black's Law Dictionary 1182 (6th ed. 1990). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Sanders, Neese, and Nichols, South Carolina Trial Handbook, § 9:5 Quantum of Evidence in Civil Cases (1994), (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

Definition of Possess

In construing statutes, the role of this tribunal is to give effect to the intention of the legislature. The intent must be determined from the words of the statute itself. See Smith v. Wallace, 295 S.C. 448, 369 S.E.2d 659 (1988). The words of S.C. Code Ann. § 61-9-410(6) must be given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975); State v. Hendriks, ___ S.C. __, 459 S.E.2d 520 (1995).

There is no South Carolina statutory definition of "possess." However, there is South Carolina case law which interprets "possession" of drugs and narcotics. These cases support the proposition that possession requires more than mere presence, and possession may be actual or constructive. State v. Mollison, __ S.C. __, 439 S.E.2d (Ct. App. 1995); see State v. Lee, 298 S.C. 362, 380 S.E.2d 834 (1989); State v. Ellis, 263 S.C. 12, 207 S.E.2d 40 (1974). Actual possession occurs when the contraband is found to be in the actual physical custody of the person. Constructive possession occurs when the person charged with possession has dominion and control over either the contraband or the premises where the contraband was found. Ellis, supra. In a case involving the unlawful possession of beer by a minor, the court enunciated definitions of "possess" which are consistent with the definitions delineated above. See State v. Stone, Op. No. 2425 (S.C. App. 1995). Furthermore, possession may be proven by circumstantial evidence. State v. Sullivan, 277 S.C. 35, 282 S.E.2d 838 (1981).

This tribunal also consulted other authorities for a definition of "possess." "Possess" is defined as: "(1) [t]o have as property; own (2) [to] have as a quality, characteristic, or other attribute (3) [to] acquire command of or have knowledge of (4) [to] gain or exert influence or control over; dominate. . . . " The American Heritage College Dictionary 1067 (3rd ed. 1993). Further, Black's Law Dictionary defines "possess" as: "[to] occupy in person; to have in one's actual or physical control; to have the exclusive detention and control of; to have and hold as property; to have a just right to; to be master of; to own or be entitled to." Black's Law Dictionary 1140 (6th ed. 1990).

The facts of this case indicate that Respondent or his employee had constructive possession of the liquor found on these premises, as they had control or dominion over the premises where the liquor was found. That is, Respondent and his employee had control over the pool room and the area where Ms. Witherspoon was present.

Definition of Knowledge

The second part of the elemental equation necessary to establish a violation of S.C. Code Ann. § 61-9-410(6) (Supp. 1995) requires that Respondent or his employee have knowledge of the illegal activity occurring on the licensed premises. "Knowledge" is defined as an "acquaintance with fact or truth." Black's Law Dictionary 872 (6th ed. 1990). "Actual notice is synonymous with knowledge." Hannah v. United Refrigerated Services, __ S.C.__, 430 S.E.2d 539 (Ct. App. 1993); quoting Jefferson County Bank v. Erickson, 247 N.W. 245 (Minn. 1933) (citation omitted). Actual notice [or knowledge] is generally regarded as such "when the person sought to be affected by it knows of the existence of the particular fact in question, or is conscious of having the means of knowing it." 66 C.J.S. Notice § 3 at 637 (1950). In regard to the definition of knowledge [notice], it has been held that "if there are circumstances sufficient to put the party upon inquiry, he is held to have notice of everything which that inquiry properly conducted, would certainly disclose." City of Greenville v. Washington American League Baseball Club et al., 205 S.C. 495, 32 S.E.2d 777 (1945); see also Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).

It is well settled that a person's knowledge can be proven through circumstantial evidence or manifestations of the individual. See Eason v. United States, 281 F.2d. 818 (9th Cir. 1960); State v. Attardo, 263 S.C. 546, 211 S.E.2d 868 (1975). In the definition of "constructive knowledge," Black's Law Dictionary provides "if one by exercise of reasonable course would have known a fact, he is deemed to have had constructive knowledge of such fact." Black's Law Dictionary 314 (6th ed. 1990). In William v. Jefferson Standard Life Insurance Co., the court stated that "it seems plain that one cannot be held to have constructive notice [knowledge] of facts from which the presumption of notice arises, who is wholly ignorant of those facts, and a knowledge of which is necessary in influence of his conduct . . . ." William v. Jefferson Standard Life Insurance Co., 187 S.C. 103, 196 S.E. 519, 524 (1938). The Court further stated that "constructive notice, strictly speaking, is ineffective unless there is a statute providing therefor." Id. at 524.

Furthermore, in a case involving controlled substances, the Supreme Court of South Carolina stated that constructive possession gives rise to an inference(1) of knowledge which may be sufficient to carry the case to the jury. Ellis, supra. In Mollison, supra, a case involving marijuana possession, the South Carolina Court of Appeals stated: "the knowledge element may be proved circumstantially by evidence of acts, declarations or conduct of the accused from which an inference may be drawn that the accused knew of the existence of the prohibited substance." Similarly, in a prosecution case for the unlawful possession of intoxicating liquor, a Georgia appellate court decided that where intoxicating liquor was found in the accused's restaurant, the accused's knowledge that such liquor was present was an indispensable element of a provable case; and, such knowledge could be drawn from circumstances that reasonably induced the belief in its existence, but such knowledge could not be inferred from suspicious circumstances alone. Kelly v. State, 91 Ga.App. 421, 85 S.E.2d 794 (1955). The Georgia court reasoned that while it was not necessary for the state to prove that the restaurant owner actually saw the liquor, it was necessary to show facts and circumstances from which knowledge could reasonably be inferred. The court emphasized the importance of such proof because a public place of entertainment or restaurant is an establishment where anyone who wishes may visit, unlike a home where no one has a right to go without permission.

Regardless of the legal definition of "knowledge" (i.e., actual or constructive) applied in the instant case, based on the facts and evidence presented, I conclude that the preponderance of the evidence presented does not support a finding that Mr. Lee or his employee knowingly possessed liquor on the licensed premises. The facts indicate that: (1) Ms. Witherspoon did not purchase the liquor from the permitted location, but obtained it prior to entering the licensed premises; (2) Ms. Witherspoon was only in the licensed location for approximately three (3) minutes prior to her arrest; and, (3) Mr. Damon was preoccupied with a customer when Ms. Witherspoon entered the licensed premises. Thus, it is evident from the facts presented that the Department has not shown that Respondent knew of the existence of the liquor in Ms. Witherspoon's cup or had an opportunity to inquire. As it relates to the liquor found in the pool room, the Department has not proven by a preponderance of the evidence that Respondent or his employee knew of its existence or had sufficient opportunity to discover it. "No set rule can very well be established to determine what constitutes a sufficiency of facts to excite inquiry, and each case depends on its own facts and circumstances." 66 C.J.S. Notice §11 at 645 (1950). According to the facts presented to this tribunal, the circumstances of this case were insufficient (1) to "put the party upon inquiry" of the possession of liquor upon the licensed premises or (2) to reasonably induce the belief in the existence of Respondent's or his employee's knowledge of the presence of the liquor. Therefore, the facts in this case do not warrant a finding of a violation of S.C. Code Ann. § 61-9-410(6).

Conclusion

The facts are clear that liquor was present on the licensed premises of Respondent. Moreover, the presence of the liquor, in this case, constitutes constructive possession since the Respondent and his employee exercised dominion, control, and care over the premises. However, an inference of knowledge is not substantiated by any facts developed in the record. Therefore, constructive possession alone, without knowledge, does not support a finding of a violation of South Carolina Code Ann. § 61-9-410(6).

ORDER

IT IS THEREFORE ORDERED that Petitioner failed to prove by a preponderance of the evidence that Respondent violated S.C. Code Ann. § 61-9-410(6) (Supp. 1995) on November 10, 1995 and, therefore, Petitioner's request that Respondent pay a monetary fine of $400 is hereby denied.

AND IT IS SO ORDERED.

_____________________________

JOHN D. GEATHERS

ADMINISTRATIVE LAW JUDGE

Edgar A. Brown Building

1205 Pendleton Street

Columbia, South Carolina 29201

June 27, 1996

Columbia, South Carolina

1. "An inference is a permissible conclusion from the circumstantial evidence, and unlike a presumption, there is no legal requirement that the inference be made." Sanders, Neese, and Nichols. South Carolina Trial Handbook, § 14:9 Inferences (1994). Further, "an inference, however, merely reflects on the probative value of evidence presented at trial. It helps the [trier of fact] determine what weight to give the evidence presented by both sides at trial." Id. at § 12.2 Presumptions Distinguished from Inferences.


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