Eastwood, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.
Appellant challenges the validity of an order of the Director of the Division of Alcoholic Beverage Control which suspends his license to sell alcoholic beverages for a period of 180 days. The suspension was predicated on a finding that Mazza "allowed, permitted and suffered lewdness and immoral activity" on his premises in violation of Rule 5 of State Regulations No. 20; also that he "possessed, allowed, permitted and suffered the sale and distribution of prophylactics against venereal disease, and contraceptives and contraceptive devices" thereon in violation of Rule 9 of State Regulations No. 20.
Mazza operated the Traveler's Hotel & Restaurant, a two-story building on the Paterson Plank Road near Secaucus, N.J. The first floor contained a restaurant and a bar; the second floor, the hotel accommodations. Both businesses
were conducted by Mazza, and under the application for the beverage license the entire building constituted the licensed premises.
Without detailing the evidence, ample proof was presented to support the determination that the licensee's employees freely and brazenly rented rooms to the Division's agents for the ostensible purpose of enabling them to engage in illicit sexual intercourse; and further, that one of the employees sold them contraceptives to be used in connection therewith.
Mazza denied any knowledge that the rooms were rented or used for such illegal purposes or that contraceptives were sold by his employees. From this assertion the argument is made that unless it appears that the employees, in committing the illegal acts, were acting within the course and scope of their employment, the licensee cannot be found guilty. But the law is otherwise. The responsibility of the licensee is not dependent upon the doctrine of respondeat superior , nor upon his personal knowledge or intent or participation. Indeed, he is not relieved even if the violations were contrary to his express instructions. In re 17 Club, Inc. , 26 N.J. Super. 43, 52 (App. Div. 1953); Greenbrier, Inc., v. Hock , 14 N.J. Super. 39, 43 (App. Div. 1951), certification denied 7 N.J. 581 (1951); In re Gutman , 21 N.J. Super. 579 (App. Div. 1952); In re Schneider , 12 N.J. Super. 449 (App. Div. 1951); Essex Holding Corp. v. Hock , 136 N.J.L. 28 (Sup. Ct. 1947); Grant Lunch Corp. v. Driscoll , 129 N.J.L. 408 (Sup. Ct. 1943), affirmed 130 N.J.L. 554 (E. & A. 1943), certiorari denied 320 U.S. 801, 64 S. Ct. 431, 88 L. Ed. 484 (1944).
Appellant contends that error was committed in admitting in evidence certain conversations between his two bartenders and respondent's agents on the night in question relating to the rooms and the nature of their use; also that it was error to admit the signed statement of one of the bartenders who did not appear as a witness. In this connection, it must be kept in mind that as an administrative agency respondent is not bound by the technical rules of
evidence and that the admission of incompetent testimony does not justify a reversal if there is sufficient competent proof in the record to support the determination. New Jersey Bell Telephone Co. v. Communications Workers, etc. , 5 N.J. 354, 378 (1950); Borgia v. Board of Review , 21 N.J. Super. 462, 466 (App. Div. 1952). Assuming, therefore, but without deciding, that the conversations were inadmissible, and conceding that the written statement was improperly received, our examination of the proofs discloses adequate evidence on which the conclusion of the Director may be based. The final arrangements for the rental of the rooms were made with a waiter who, according to Mazza, was the person entrusted with that responsibility. And there is ample justification for the finding that the waiter knew of the purposed illicit use of the rooms and that he sold the contraceptives to the agents after the rental had been completed.
It appears also that this waiter was paid with bills bearing previously noted serial numbers, that he turned the money over to the bartender, and it was found in Mazza's cash register after the agents disclosed their identity.
Under the circumstances no prejudicial error was committed in receiving the criticized evidence. R.R. 1:5-3(b).
Stress is laid upon certain alleged lack of procedural due process in the conduct and hearing of the matter by the agency. Appellant points out that the basic issue was one of credibility and that the Director, who made the determination, neither saw nor heard the witnesses but reached his conclusion upon examination of a stenographic record compiled by a hearer designated for that purpose. And reference is made also to the fact that the Director reached his ...