December 21, 1977

Mr. Robert R. Slocum 
Walworth County State's Attorney 
Mobridge, South Dakota 57601

Official Opinion No. 77-100

Legality of mayor holding city liquor license

Dear Mr. Slocum:

You have requested an opinion based on the following factual situation:

FACTS: 

Mr. “X,” the mayor of city “A,” is also the licensee of a retail off-sale liquor establishment.  The business is subject to annual licensing under SDCL 35-2-1.2 with the application subject to approval of the city council.  The mayor does not ordinarily vote on such matters but may do so in case of a tie.

Based on the above factual situation, you have asked the following specific questions:

QUESTIONS: 

1.  Is the mayor legally entitled to receive an off-sale liquor license? 
    
2.  Would the answer to no. 1 be the same if the licensee were a spouse or close relative of the mayor?

IN RE QUESTION NO. 1:

In my opinion, the answer to your first question is found in 1939-40 AGR 369, where it is stated: 

However, our Court in the case of McAthie v. Frieberg, 66 S.D. 192, 280 N.W. 871, in passing on the statute requiring approval of applications for liquor licenses by the governing body of a municipality, has held that such duty on the part of the governing body is not a ministerial act but an act involving discretion.  I quote from that decision as follows: 
     
Giving the statute its natural meaning, and looking to the intent, we come to the conclusion that the consideration by the governing body is essential and necessary and that no license can be granted until such governing body has endorsed its approval on the application.  It was not a ministerial act but an act involving discretion for which a writ of mandamus will not lie. 
    
In view of this decision and on the basis of sound public policy, it is my opinion that the governing body of a municipality cannot lawfully approve an application for a liquor license in favor of a member of such board, and especially in view of the fact that municipalities of the State of South Dakota are charged with the responsibility for the enforcement of the liquor laws of the State of South Dakota and under SDC Section 5.0108 are vested with certain powers of regulating licensees by ordinance. 
    
Public officers should not be permitted to place themselves in a position in which their own personal interests may come into conflict with the duty which they owe to the public.  It is, therefore, my opinion that while the approval of such liquor licenses are not prohibited by Sections 13.1308 or 45.1507 the same would be void on the ground of public policy.

The fact that the mayor does not vote except in case of a tie does not significantly detract from the underlying principle that a public official cannot place himself in a position of potential conflict.  The mayor has numerous duties and powers, including the power to veto resolutions and ordinances (SDCL 9-8-3), which inherently create a situation whereby the mayor can affect his personal interests.

I am well aware of the problem in small towns of finding qualified persons to serve in public office.  However, in view of the above situation and the strong public policy against potential conflicting interests, it is my opinion that a mayor cannot also hold a liquor license in the city in which he serves. The answer to your first question is no.

IN RE QUESTION NO. 2:

Your second question is one which I cannot conclusively answer. Obviously, the law will not permit something to be done indirectly which could not be done directly. Therefore, if the application of a spouse or relative was merely a subterfuge and, in fact, the mayor was the “owner” of the establishment, the conflict would still exist.  Furthermore, SDCL 35-2-6.3 requires the licensee to be the owner or actual lessee of the licensed premises.

On the other hand, I cannot state that the mere fact of kinship between a mayor and licensee creates an automatic conflict of interest for the mayor. The decision in such a situation is a factual one to be made by the local governing body, the Secretary of the Department of Revenue, and ultimately the courts.

For the above stated reason, I respectfully decline to answer your second question.

Respectfully submitted,

William J. Janklow
Attorney General

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