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Walton Playboy Clubs, Inc. v. City of Chicago

OCTOBER 10, 1962.




Appeal from the Superior Court of Cook County; the Hon. SAMUEL B. EPSTEIN, Judge, presiding. Affirmed in part, reversed in part and remanded with directions.


This is an appeal by the City of Chicago from a declaratory judgment granted the plaintiff, the Walton Playboy Clubs, Inc. The plaintiff cross-appeals from part of the judgment order and from the denial of its prayer for an injunction.

The plaintiff is a corporation for profit and has invested over $250,000 in decorating and furnishing a multiple story, retail establishment in Chicago, which serves food and drink and furnishes entertainment. It has retail liquor licenses and a restaurant license. A person desiring to gain admission to the premises may do so in three ways: (1) he can apply for membership, pay a $50 fee and, if accepted, is given a numbered key which unlocks no door but which identifies him and establishes his credit; (2) accompany someone who has a key or (3) present himself at the door, pay $50 and receive a receipt. The receipt does not entitle him to credit but it does give him and his guests admission privileges thereafter and the option of exchanging the receipt for a key. At the time of the trial (less than a year after the opening) there were some 20,000 members, about 1,600 receipts had been issued, between 25,000 and 26,000 patrons were being served each month with the gross volume amounting to around $80,000.

The litigation arose in this fashion: after the plaintiff had obtained the required licenses and had been in operation for two weeks, the Superintendent of Police requested an opinion from the Corporation Counsel of the City as to the legality of the plaintiff's method of doing business. (In passing, it may be observed that the facts established by the evidence differed from those assumed in the seven questions propounded to the Corporation Counsel by the Police Superintendent.) A week later a formal opinion was rendered stating that the operation as described by the Superintendent was illegal. A copy of the opinion was sent to the plaintiff which a few days afterwards, in anticipation that the next step by the City would be an attempt at license revocation, filed this suit for declaratory judgment and for injunctive relief.

The City filed a motion to strike on the ground that declaratory judgment was an inappropriate remedy. The denial of this motion is a preliminary issue argued by the City in this appeal. Following the denial of its motion the City answered the complaint and it then filed a counterclaim which also prayed for a declaratory judgment. By pleading over, after the denial of its motion to strike, the City did not waive its objection to the plaintiff's action for declaratory judgment (Ill Rev Stats (1959) c 110, § 48(5)), but it did so by invoking the same remedy in a new action of its own.

Apart from this, the situation confronting the plaintiff at the time this suit was started made it singularly fitting to seek relief by way of declaratory judgment. The plaintiff had made a large investment in a business which, in its general outline, was in conformity with several others, long-conducted without interference by the City. It had received from the Department of Police an official opinion of the City's Department of Law stating that its method of doing business was illegal. It had every reason to believe that the City would proceed against it in accordance with the opinion. The success of its business depended upon the sale of memberships and the threat of having its licenses revoked would discourage their sale. Its business and its investment were in jeopardy. A justiciable controversy existed. The facts and the interpretation of the applicable statutes were in dispute. The plaintiff did not have to sit back and wait for the blow to fall just because the altercation might be decided in an alternative action (Liquor Control Act, Ill Rev Stats (1959) c 43) which the City could invoke when it got ready. This was especially so in view of the plaintiff's offer in its complaint to promptly comply with the court's construction of the law. American Civil Liberties Union v. City of Chicago, 3 Ill.2d 334, 121 N.E.2d 585; Kitt v. City of Chicago, 415 Ill. 246, 112 N.E.2d 607; Retail Liquor Dealers' Protective Ass'n v. Fleck, 408 Ill. 219, 96 N.E.2d 556.

The case proceeded to trial on five principal issues formed by the complaint, answer, counterclaim and reply. These issues were: (1) whether the plaintiff's manner of operating was in violation of the Liquor Control Act and the Civil Rights Act of Illinois in that it denied access to its premises to the general public; (2) whether its manner of operating prevented the police inspection required for statutory compliance; (3) whether its use of the words "club," "member," "membership," "rules," "bylaws" and "regulations" tended to deceive the public; (4) whether the plaintiff was attempting to benefit from the statutory privileges and exemptions extended private clubs organized not for profit and (5) whether permitting its members to purchase alcoholic beverages through credit rather than for cash was in contravention of the law. During the course of the trial the City withdrew the fifth issue. We will, therefore, consider the first four only, and in that order.

The Civil Rights Act has the following provision:

"All persons entitled to equal enjoyment of accommodations — Discrimination in price on account of race or color prohibited. All persons within the jurisdiction of said State of Illinois shall be entitled to the full and equal enjoyment of the accommodation, advantages, facilities and privileges of inns, restaurants, eating houses, hotels, soda fountains, soft drink parlors, taverns, roadhouses, barber shops, department stores, clothing stores, hat stores, shoe stores, bathrooms, restrooms, theaters, skating rinks, public golf courses, public golf driving ranges, concerts, cafes, bicycle rinks, elevators, ice cream parlors or rooms, railroads, omnibuses, buses, stages, aeroplanes, street cars, boats, funeral hearses, crematories and public conveyances on land, water or air, and all other places of public accommodations and amusement, subject only to the conditions and limitations established by laws and applicable alike to all citizens; nor shall there be any discrimination on account of race or color in the price to be charged and paid for lots or graves in any cemetery or place for burying the dead." Ill Rev Stats (1959) ch 38, sec 125.

The Liquor Control Act has a like provision:

"Civil rights in licensed premises. No licensee licensed under the provisions of this Act shall deny or permit his agents and employees to deny any person the full and equal enjoyment of the accommodations, advantages, facilities and privileges of any premises in which alcoholic liquors are authorized to be sold subject only to the conditions and limitations established by law and applicable alike to all citizens." Ill Rev Stats (1959) ch 43, sec 133.

In 1875 the Congress of the United States enacted a Civil Rights Act from which the wording of the Illinois statutes is taken. Other states have similar laws with almost identical language. The reviewing courts of the various jurisdictions have been uniform in interpreting these statutes as prohibiting discrimination because of color, creed or race. The construction given the Congressional act of 1875 by the Supreme Court of the United States has been followed:

"The first section, which is the principal one, cannot be fairly understood without attending to the last clause, which qualifies the preceding part.

"The essence of the law is, not to declare broadly that all persons shall be entitled to the full and equal enjoyment of the accommodations, advantages, facilities and privileges of inns, public conveyances and theatres; but that such enjoyment shall not be subject to any conditions applicable only to citizens of a particular race or color, or who had been in a previous condition of servitude. In other words, it is the purpose of the law to declare that, in the enjoyment of the accommodations and privileges of inns, public conveyances, theatres and other places of public amusement, no ...

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