APPEAL from the Circuit Court of Sangamon County; the Hon.
RICHARD J. CADIGAN, Judge, presiding.
MR. JUSTICE REARDON DELIVERED THE OPINION OF THE COURT:
The defendant appeals from an order of the circuit court finding section 15.8.1 of the Springfield City Code unconstitutional and enjoining enforcement of the aforesaid provision.
The plaintiff is an Illinois corporation whose principal business is the operation of coin-operated amusement devices. Plaintiff currently operates these devices in several communities located in northern and central Illinois. On December 17, 1974, plaintiff filed an "Application for Operator's License" with the office of the city clerk of the city of Springfield. The application stated that plaintiff wished to obtain an operator's license in order to enable it to operate coin amusement devices at three separate locations in Springfield. Plaintiff's application was denied on the grounds that under the municipal ordinance regulating the issuance of operator's licenses no more than eleven licenses may be issued at one time; and at the time plaintiff filed its application all eleven licenses had been issued. Section 15.8.1 of the Springfield City Code stated:
"There shall be issued in the City of Springfield not more than eleven (11) operator's licenses and there shall be no limit, however, on the limited licenses; provided, however, that this restriction upon the number of licenses shall not limit the right to the renewal of any existing license, nor to the issuance of a license of a purchaser or an established business as a going concern, but as licenses are revoked and expire without renewal and for any other reason cease to exist, then the total number of operator's licenses shall be reduced until the total of such class shall not exceed the number authorized by this section."
Plaintiff ultimately filed a complaint for declaratory judgment. The complaint alleged that section 15.8.1 of the Code of the city of Springfield, as amended, was arbitrary and capricious in limiting the number of operator's licenses to eleven, and that this number bore no reasonable relationship to the public health, welfare or morals. Also, plaintiff argued that the aforesaid section was unconstitutionally vague.
Defendant filed an answer and the matter was set for hearing.
At the hearing, no testimonial evidence was taken. However, the attorney for defendant read into the record a summary of what the testimony of Mr. Bud Hashman, a license holder, would be if he were called to testify. Mr. Hashman would have testified that the limited number of licenses available to operate pinball machines in the city of Springfield has a reasonable relationship to the public interest. The attorney for plaintiff stated that he "could so stipulate that that might be what he would testify." The attorney went on to note his objection as to the relevancy of the proposed testimony. The record reveals that no ruling was made on this objection.
Immediately thereafter the attorneys for the respective parties then proceeded to argue the question of the constitutionality of section 15.8.1.
The plaintiff argued that the limitation on the number of licenses to eleven was unreasonable, arbitrary and capricious. Plaintiff did concede that the defendant had the authority to regulate the number of licenses. Secondly, plaintiff argued that the mayor had absolute and unbridled discretion to decide whether or not to issue a license, and that this broad authority was unconstitutional. Next, plaintiff argued that the ordinance in question deprived it of a property right, i.e., the right to carry on a legitimate business, and thus rendered the ordinance unconstitutional. Lastly, plaintiff contended that the ordinance created arbitrary and capricious classifications.
In response, defendant argued that the ordinance in question was a reasonable exercise of the police power in that there existed a real danger that coin-operated amusement devices could be used as a subterfuge for organized crime. The defendant elaborated that the amusement devices do not have metering mechanisms on them to record cash receipts; therefore funds from illegal sources could be cleansed and thus reported as legitimate income from the coin-operated amusement devices. The defendant urged that the ordinance in question was attempting to regulate the operation of coin-operated amusement devices in order to prevent the influx of criminal elements into the community, and that this certainly was a reasonable and realistic goal for a municipality.
Near the end of the arguments, the court asked the attorney for the defendant why the number of eleven was used as a limitation on the issuance of licenses. In response to the court's inquiry, Mr. Hashman, who was apparently present at the hearing, stated that the licenses were originally limited to nine and that each time an application was made for a new license the city council would pass an ordinance increasing the number of licenses.
On March 25, 1975, the court entered a decree finding section 15.8.1 to be unconstitutional. In the decree the court made certain findings. The relevant findings are as follows:
"3. That the specific question in dispute is whether Section 15.8.1 of the City Code of Springfield, Revised, is unreasonable, discriminatory, confiscatory, invalid, and unconstitutional as applied to Plaintiff herein.
4. That Section 15.8.1 of the City Code of Springfield, Illinois, Revised, is arbitrary and capricious in limiting the number of Operator's Licenses for Coin-Operated Amusement Devices to eleven (11) in number, for the reason that said limitation bears no ...