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Neiden Bar and Grill Inc. v. Municipal Board of Alcoholic Beverage Control

Decided: April 16, 1956.


Clapp, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.


[40 NJSuper Page 26] The Municipal Board of Alcoholic Beverage Control of the City of Newark approved the transfer of a plenary retail consumption liquor license from Irving Gold to Issie's Tavern, Inc., a New Jersey corporation. The license related to premises at 308-312 Market Street, Newark, New Jersey. Appellants, competitors in the area, opposed the transfer on the ground that Issie Chernichaw, president

and principal stockholder of Issie's Tavern, Inc., is not a fit person to hold a liquor license. The approval was reviewed by the division of alcoholic beverage control where, after a de novo hearing, the director affirmed the local board. Further appeal is now pursued in this court.

In order to obtain a transfer of a license of the type involved here, the transferee must qualify as an original licensee. N.J.S.A. 33:1-26. Under N.J.S.A. 33:1-25, to obtain a retail license a person must be a citizen of the United States and a resident of New Jersey at the time of submission of the application. He cannot qualify if under 21 years of age, if he has been convicted of crime involving moral turpitude or twice convicted in a court of criminal jurisdiction of violation of the Alcoholic Beverage Control Act. A corporation meets the requirements of the statute if each direct or indirect owner of more than 10% of its stock comes up to the legislative standards prescribed for an individual applicant.

At the hearing before the local board, appellants did not undertake to show that Chernichaw lacked any of these statutory attributes. Rather, in order to sustain the claim that he was not a fit person, evidence was adduced to indicate that in the course of operating another tavern he had engaged in certain "deceptive" practices when selling drinks over the bar. The schemes need not be described in detail. It is sufficient to say, for purposes of illustration, that Chernichaw's advertising stimulated the thought in the customer's mind that the purchase of a double drink or a "double-double hooker" -- as it was delicately and euphoniously called -- would make him the beneficiary of a bargain -- a quantity discount. But the director, a quantitative analyst and an iconoclastic mathematician, discovered that the double drink contained twice the content of a single drink at twice the price, and the "double-double hooker" contained four times the quantity of a single drink at four times the price. The illusion of a bargain having been thus shattered, the director banned the project. Under the regulations, any practice which is designed or tends to encourage unduly a desire for

the purchase of over the bar drinks is condemned as not in the public interest. Chernichaw yielded and no disciplinary action was taken against him.

However, appellants, being wary of such an ingenious mind in a competitor, and fearful that he would ignore the director's injunction, or worse yet, devise a new and better "mouse trap" which might make their patrons beat a path to his door, charged that the public interest would be served only by a judgment declaring his unfitness to be the transferee of the license in question. But neither before the local board nor before the director was any substantial evidence adduced to establish that Chernichaw intended to engage in proscribed practices at the new address.

In granting the transfer, the municipal commissioners who heard the matter said:

"After carefully considering all the evidence and the facts and circumstances in this case, Commissioner Walsack and I decided that the application for a person to person transfer should be approved. We could find no sound or reasonable basis for denying this application for transfer.

It was only the testimony of several objectors who assumed that the applicant would operate a cut rate establishment and by so doing would create a situation in the Market Street area that would be dangerous and undesirable."

On appeal to the director, the cause was heard de novo. N.J.S.A. 33:1-22; 33:1-39; Rule 6, Regulation 15 of the Division of Alcoholic Beverage Control; Rajah Liquors v. Division of Alcoholic Beverage Control , 33 N.J. Super. 598 (App. Div. 1955); Cino v. Driscoll , 130 N.J.L. 535 (Sup. Ct. 1943). However, the additional ...

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