For modification -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall and Schettino. Opposed -- None. The opinion of the court was delivered by Jacobs, J.
The Appellate Division, in an opinion reported at 59 N.J. Super. 419 (1960), affirmed the State Director who had, in turn, sustained the action of Paterson's excise board in granting Mr. Hutchins' application for transfer of his licensed premises. We granted certification at the request of the objectors Morris Lubliner and Congregation Lenath Hazedic.
Mr. Hutchins has lawfully operated his tavern at 34 Straight Street, Paterson since 1946. In 1947 his corporation purchased a building at 39 Carroll Street and he sought to transfer his plenary retail consumption license to those premises. There were objections to his application for transfer and it was denied by Paterson's Board of Alcoholic Beverage Control. His appeal to the Division of Alcoholic Beverage Control resulted in an affirmance of the denial. In his Conclusions and Order, the Director indicated his agreement with the board's view that there were enough licensed premises in the area and noted that the burden of establishing that the board's action was erroneous rested with the licensee, that the licensee had "failed to sustain that burden" and that consequently the board's action should be affirmed.
In 1948, 1950 and 1951 Mr. Hutchins filed new applications for transfer of his licensed premises and on each occasion his application was denied by the municipal board and no appeal was taken to the Director. In 1953 he applied again and this time his application was granted by the municipal board by a vote of two to one. The two members who voted to grant were new members who had never passed on the previous applications; the member who voted to deny had voted against the granting of the previous applications. An appeal was taken by objectors and on June 18, 1954 the Director reversed the grant of the application. In his Conclusions
and Order, he noted that it appeared from the prior proceedings that the area was adequately supplied with licensed premises, that no real public need for a license at the new premises had been established, and that the municipal board had "abused its discretion and acted in an unreasonable manner."
In 1958 Mr. Hutchins filed a further application to the municipal board which now consisted of three new members who had not passed upon any of the prior applications. A hearing was held on December 22, 1958 at which time the members of the board heard the attorneys and various witnesses in support of and in opposition to the transfer. During the hearing it was stressed on the applicant's behalf that he proposed to conduct a "high-class type of restaurant catering to colored people" and that there was need for such an establishment in the area which was "primarily a colored neighborhood." At the conclusion of the hearing, Commissioner Cheevers announced that the board would reserve decision until January 14, 1959 and that in the meantime it "would make an extensive inspection of the neighborhood."
On January 14, 1959 the attorneys for the applicant and objectors again appeared before the board; at that time Commissioner Pasquariello stated that the three board members had inspected the premises and he expressed the view that if the transfer were granted it should be accompanied by a condition requiring off-street parking facilities for patrons. At this point the attorney for Mr. Hutchins remarked that "he was authorized to furnish any written promise concerning such condition." Commissioner Cheevers then stated that he thought the area would be improved if Mr. Hutchins were to conduct a high-class type of tavern and restaurant and submitted a resolution granting the application for transfer. It was adopted by a vote of two to one with the dissenting member expressing the view that the "neighborhood does not require another tavern" and suggesting that Mr. Hutchins "put a restaurant in there first, if that is what he wants to run."
Although others had also filed objections before the board (see 59 N.J. Super., at p. 424), the only objectors who appealed to the Director were Congregation Lenath Hazedic and Morris Lubliner. Their appeal came on for hearing on March 9, 1959 and at that time the prior applications and the minutes of the hearing before the board were made part of the record and testimony was taken. Mr. Hutchins' son testified that whereas in 1954 the neighborhood was "approximately 65% Negro and 35% white" it was now "approximately 85% Negro and 15% white" and that, while the building at 39 Carroll Street was formerly occupied by six white tenants along with ten colored tenants, no white tenants were there now. He testified further that they were "going to put in a first-class place" which would be "the type of place that would be available for meals primarily" and that there "is definitely a need" in the area for a high-class restaurant which would cater to colored people. He stated that it would be economically difficult to open a restaurant without a liquor license and that "the bulk of our customers want us to have a restaurant along with liquor that can be served because there really isn't a place in the area now, a decent looking restaurant that is patronized by colored." The nearest tavern is about two blocks away (1040 feet) although there are package stores located 100, 300 and 1000 feet respectively from 39 Carroll Street.
The objection by Congregation Lenath Hazedic was apparently grounded on the assertion that many elderly members of the Congregation would pass the premises on their way to services and might "suffer indignities if confronted by persons who loiter about a tavern." The testimony indicated that Mr. Hutchins' reputation has been good and that his tavern at 34 Straight Street has at all times been well conducted. The objection by Mr. Lubliner was apparently grounded on the assertion that many children who attend the Workmen's Circle School, a Hebrew school of which he is principal, would be obliged to pass the premises on their way to and from school in the late afternoon or
early evening. Testimony was introduced on Mr. Hutchins' behalf to indicate that hardly any of the few children who attend the school, which is about two blocks away, have occasion to pass the premises.
On June 16, 1959 the Director filed his Conclusions and Order affirming the municipal board's grant of the application. Referring to the prior applications and to his own action in 1954, he noted that the earlier denials "had gathered such impetus" that the opinion of the majority members in 1954 that the transfer was in the public interest "seemingly could not overcome the previous opinions to the contrary and, thus, their action was reversed even though the burden had shifted and rested on the appellant to establish that the grant of the transfer by the board was erroneous." After citing the precedent in Auerbach v. Newark et al., Bulletin 1178, Item 1, where he had sustained the granting of a transfer after there had been a denial by an earlier board and an affirmance on appeal, the Director had this to say:
"In the instant case, the record of the action of the local Board on these applications, in sequence, is four denials of transfer and two grants of transfer, the latter two within the past five years. To again disregard the sentiment expressed by two independent respondent Boards is to maintain an adamant attitude that the passage of twelve years with the normal changes in the area to be expected is insufficient to overcome the past denials of transfers. In other words, that such denials are a bar in perpetuity or perhaps until the number of grants equals the number of denials. I do not think such is a reasonable conclusion."
At the close of his Conclusions and Order, the Director referred to a contention by the objectors that the transfer would violate the local zoning ordinance and noted that no "definite probative evidence on that score" had been presented and that generally the Division of Alcoholic Beverage Control is not the proper forum to decide whether the location of a "liquor license and restaurant at the premises would be in violation of ...