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X-L Liquors Inc. v. Taylor

Decided: February 14, 1955.

X-L LIQUORS, INC., A CORPORATION OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
FRED C. TAYLOR, CLARENCE W. TAYLOR, ET AL., INDIVIDUALLY AND TRADING AS THE TAYLOR WINE COMPANY, DEFENDANTS-APPELLANTS



For affirmance -- Chief Justice Vanderbilt, and Justices Oliphant, Wachenfeld, Jacobs and Brennan. For reversal -- Justices Heher and Burling. The opinion of the court was delivered by Jacobs, J.

Jacobs

The defendants moved to dismiss the plaintiff's complaint on the ground that summons was not issued in time or properly served upon them; the motion was denied by the Law Division and appeal to the Appellate Division was taken under R.R. 2:2-3(a)(3). We certified on our own motion. R.R. 1:10-1.

The defendants named in the complaint are Fred C. Taylor, Clarence W. Taylor, Greyton H. Taylor, Flora T. Keeler and Lucy T. Zimmer, individually and trading as The Taylor Wine Company. They are partners engaged in the wine business in the State of New York where they all reside. They applied to the New Jersey Division of Alcoholic Beverage Control for a wine wholesale license; in their application they stated that no licensed premises would be maintained by them in New Jersey and designated Bernard Best, 428 Leslie Street, Newark 8, New Jersey as the "authorized agent" upon whom "service of process may be made." They received a license and sold wine to New Jersey retail licensees, including the plaintiff, X-L Liquors, Inc., a corporation of New Jersey having its principal place of business in Newark. Thereafter they apparently served and filed with the Division, pursuant to its Regulations No. 39, a notice that the plaintiff had defaulted in making payment for wine it had purchased and the plaintiff was consequently placed on the Division's "Official Default List." The plaintiff alleged in its complaint that the notice was served and filed "without warrant or cause, negligently and maliciously"; that the matters published or caused to be published by the

defendants were "defamatory of plaintiff's business practices, credit standing, and business reputation"; and that it had consequently suffered loss and expense for which it demanded "exemplary and compensatory damages." The complaint was filed on April 7, 1953; service of summons and complaint attached was effected by the sheriff's office on April 15, 1953 by leaving a single copy at the dwelling house of Bernard Best at 428 Leslie Street, Newark. The copy of the summons and complaint was presumably forwarded without delay to New York counsel for The Taylor Wine Company; thereafter there was a motion to set aside the service on the ground, inter alia, that it was not made by delivery to Bernard Best personally. In X-L Liquors, Inc. v. Taylor, 29 N.J. Super. 486 (App. Div. 1954), the Appellate Division held this ground to be valid and annulled the service; the court's opinion was filed on February 5, 1954 and, under R.R. 1:9-1, its mandate issued ten days thereafter.

Under date of March 11, 1954 the plaintiff forwarded to the sheriff's office six copies of summons with complaint attached and on March 15, 1954 they were all served on Bernard Best personally. Thereafter the defendants moved to dismiss the complaint primarily on the ground that the court had "no jurisdiction over the defendants or any of them"; they also placed reliance on the point that the new summons was not served in due time after the filing of the complaint or the issuance of the mandate. See R.R. 4:4-1; R.R. 4:42-2(a). The Law Division denied the motion and entered an order settling the record under R.R. 1:6-3. In support of their appeal the defendants urge: (1) that their designation of Best as authorized agent for the service of process was designed solely for the benefit of the Division and did not constitute him "an agent for the service of process in civil matters"; (2) that if the designation is held to be available in civil matters "it is an illegal and invalid exercise of the rule making power"; (3) that the summons "did not issue within ten days after the filing of the complaint" and its service was therefore not sustainable; and (4) that the "service attempted upon a partnership as such is void."

The exceptional nature of the liquor business has often been commented upon by our courts; in Paul v. Gloucester County, 50 N.J.L. 585, 595 (E. & A. 1888), Justice Van Syckel noted that "It is a subject by itself, to the treatment of which all the analogies of the law appropriate to other topics cannot be applied." See also Mazza v. Cavicchia, 15 N.J. 498, 505 (1954); In re Schneider, 12 N.J. Super. 449, 456 (App. Div. 1951). Its inherent social dangers are evident and the State may rightly prohibit it or permit it to continue under very severe restrictions. See Ziffrin, Inc. v. Reeves, 308 U.S. 132, 138, 60 S. Ct. 163, 84 L. Ed. 128, 135 (1939); Crowley v. Christensen, 137 U.S. 86, 91, 11 S. Ct. 13, 34 L. Ed. 620, 624 (1890). After federal prohibition had failed, our Legislature created (L. 1933, c. 436; R.S. 33:1-1 et seq.) the Department of Alcoholic Beverage Control and wisely delegated to its commissioner comprehensive powers to regulate the liquor traffic in all of its aspects. Thus in R.S. 33:1-23 it vested in the commissioner the duty of governing the Department with authority to adopt "procedures and methods designed to insure the fair, impartial, stringent and comprehensive administration" of the act; in R.S. 33:1-25 it directed that applicants for licenses "shall answer such questions as may be asked and make such declarations as shall be required by the form of application for license as may be promulgated by the commissioner from time to time"; in R.S. 33:1-39 it empowered the commissioner to make general rules on many stated subjects including "all forms necessary or convenient" and on "such other matters whatsoever as are or may become necessary in the fair, impartial, stringent and comprehensive administration" of the act; and in R.S. 33:1-73 it directed that the act shall be liberally construed.

The commissioner and his successors adopted many regulations pertaining to liquor licensees and their business; these regulations were sustained as being reasonably related to the broad purposes of the act even where they dealt with subjects not specifically mentioned therein. Thus in Gaine v. Burnett, 122 N.J.L. 39 (Sup. Ct. 1939), affirmed 123 N.J.L. 317

(E. & A. 1939), price-fixing was held to fall within the general rule-making power of R.S. 33:1-39; in Franklin Stores Co. v. Burnett, 120 N.J.L. 596 (Sup. Ct. 1938), a rule prohibiting possession by licensees of certain articles designed for the manufacture of "home-made" liquor was held to come within R.S. 33:1-39; in Greenspan v. Division of Alcoholic Beverage Control, 12 N.J. 456 (1953), a rule providing that any transfer or renewal shall be subject to the outcome of any appeal from the issuance of the original license was held to come within R.S. 33:1-39; and in Mazza v. Cavicchia, supra, a rule providing that licensees shall be responsible for violations committed by their employees was held to come within R.S. 33:1-39. See also Passarella v. Board of Commissioners, 1 N.J. Super. 313 (App. Div. 1949), where the Appellate Division found that although the act made no "specific reference to the issuance or transfer of liquor licenses to vacant land subject to the erection and construction of a proper building," the commissioner could adopt appropriate rules on the subject within the sweeping regulatory authority afforded by R.S. 33:1-23 and R.S. 33:1-39.

The Alcoholic Beverage Control Act (L. 1933, c. 436; R.S. 33:1-1 et seq.) contained no specific reference to applicants who did not propose to maintain licensed premises in New Jersey; and pertinent provisions, such as the requirement for advertising in a local newspaper (R.S. 33:1-25), suggested the legislative contemplation that licensees would ordinarily maintain places of business within the State which would be amenable to local residents and interests for all proper purposes. When confronted with out-of-state concerns who desired the privilege of selling alcoholic beverages to New Jersey licensees without establishing any local places of business, the commissioner fairly adopted procedures which enabled them to designate New Jersey residents as authorized agents for the service of process and to ...


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