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Dal Roth Inc. v. Division of Alcoholic Beverage Control

Decided: November 6, 1953.


Clapp, Goldmann and Ewart. The opinion of the court was delivered by Goldmann, J.A.D.


This is an appeal from the determination and order of the Division of Alcoholic Beverage Control reversing the action of the Board of Alcoholic Beverage Control of the City of Jersey City in granting appellant Dal Roth, Inc. a transfer of a plenary retail consumption license from person-to-person and place-to-place. The transfer from person-to-person was from Joseph A. Davis, as receiver of Commuters Bar, Inc., to appellant, while the transfer from place-to-place was from 35 Enos Place to store 9-B, Journal Square Station Building, Tube Concourse, both in Jersey City.

The same license, premises and local ordinance, quoted below, were involved in the case of Tube Bar, Inc. v. Commuters Bar, Inc. , 18 N.J. Super. 351 (App. Div. 1952). Commuters Bar, Inc. was in 1951 the licensee for the premises at 35 Enos Place. It leased store 9-B, Tube Concourse, and then applied for a transfer of its license to those premises. There was in effect at the time, and still is, an ordinance limiting the number of plenary retail consumption and plenary distribution licenses to sell alcoholic beverages at retail in the City of Jersey City which, so far as is here pertinent, provides:

"Section 4. From and after the passage of this ordinance, no Plenary Retail Consumption License shall be granted for or transferred to any premises the entrance of which is within the area of a circle having a radius of seven hundred fifty (750) feet and having as its central point the entrance of an existing licensed premises covered by a Plenary Retail Consumption License, provided, however, that if any licensee holding a Plenary Retail Consumption License at the time of the passage of this ordinance shall be compelled to vacate the licensed premises for any reason that in the opinion of the Board of Commissioners of the City of Jersey City was not caused by any action on the part of the licensee, or if the landlord of said licensed premises shall consent to a vacation thereof, said licensee may, in the discretion of the Board of Commissioners of the City of Jersey City, be permitted

to have such license transferred to another premises within a radius of five hundred (500) feet of the licensed premises so vacated. * * *"

The proposed new location for the license at store 9-B was within 750 feet of 12 other licensed premises. It was, however, less than 500 feet from 35 Enos Place. The local board granted the transfer over the opposition of some of the present respondents who contended that the transfer would be in direct violation of the ordinance. On appeal to the Division of Alcoholic Beverage Control, the Division affirmed. The objectors then appealed, and while the matter was pending in the Appellate Division, Commuters Bar, Inc. obligated itself on a lease for store 9-B at a rental of $1,500 a month and expended thousands of dollars for new fixtures and other costs in setting up new quarters. When the Appellate Division, on March 12, 1952, reversed the transfer (18 N.J. Super. 351), Commuters Bar, Inc. returned to 35 Enos Place. It took no appeal from that decision. Nor did it surrender, abandon or sublet the store at 9-B, but continued to pay rent.

On April 4, 1952 application was made to the Superior Court, Chancery Division, for an adjudication of insolvency against Commuters and for the appointment of a receiver. A. A. Pruzick & Co., Inc. v. Commuters Bar, Inc., Docket C -1360-51. While this matter was pending, Commuters applied for a renewal of its plenary retail consumption license for the 1952-53 license period for the premises at 35 Enos Place. On June 27, 1952 the Chancery Division adjudicated Commuters Bar, Inc. insolvent and appointed a receiver. Although Commuters was in the hands of the receiver on July 1, 1952, the local board renewed the license in its name. Cf. N.J.S.A. 33:1-26. The order appointing receiver contained no specific authorization that he continue operating the business. Nonetheless, he continued to conduct the licensed premises at 35 Enos Place. The license was not extended to the receiver until August 27, 1952.

On August 29, 1952 an order was entered in the Pruzick case requiring those interested to show cause on September

26 why certain assets of Commuters should not be sold, including the fixtures in both stores and the license. As a result of objections voiced on the return date a new order was made, returnable October 10, 1952, directing that all creditors and other interested persons show cause why the receiver should not at that time and place expose for sale to the highest bidder, in open court, the fixtures, equipment and other tangible assets owned by Commuters in the two stores, as well as his written consent to transfer to the purchaser thereof, and to transfer to the same or other premises, the license in question then effective at 35 Enos Place. When this second order was signed on September 26, the receiver represented to the court that, without paying the rent for 35 Enos Place, he was only "breaking even," and he requested permission to close the business. Such permission was verbally granted. The receiver immediately closed the place.

At the time of the receiver's sale on October 10 it was publicly announced in open court that the prior transfer of the same license from 35 Enos Place to store 9-B had been set aside by the Appellate Division in the Tube Bar case, above. The court then announced that the receiver's consent to the transfer of the license was being sold "subject to law" and also "subject to any rights that flow from it [the Appellate Division opinion]." The sale then proceeded and one Andrew Rothrock acquired the tangible assets at store 9-B, together with the consent of the receiver to the transfer of the license, on a bid of $26,000. The sale was confirmed by the Chancery Division on October 15, 1952. Thereafter, on October 27, 1952, Andrew Rothrock made written assignment of his bid to Dal Roth, Inc. which had been incorporated only two days before.

After receiving the $26,000 payment the receiver, on October 28, wrote the landlord of 35 Enos Place "disaffirming" Commuters' lease there, effective October 29, 1952. On October 29 Dal Roth, Inc. filed application for a person-to-person and place-to-place transfer with the Board ...

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