Conford, Freund and Kilkenny. The opinion of the court was delivered by Freund, J.A.D.
This appeal raises the issue of whether economic hardship, brought about by inability to operate the licensed premises profitably, is a legally sufficient basis for permitting transfer of a plenary retail consumption license under a Jersey City ordinance limiting such permission, if involving transfer to within 750 feet of other licensed premises, to cases where the licensee "shall be compelled to vacate for any reason * * * not caused by any action" on its part. The Municipal Board of Alcoholic Beverage Control of the City of Jersey City had granted the application to transfer, but its decision was reversed on appeal by the State Division of Alcoholic Beverage Control, the Director adopting in toto the conclusion of his hearing officer. The present appeal is from the Director's order.
Appellant, Marie Smith, t/a Smitty's Tavern, made application on April 18, 1960 for a transfer of her license from 220 Newark Avenue to 577 Jersey Avenue, Jersey City. The latter property being situated within 500 feet of the
licensed premises, but within 750 feet of the licensed premises of the respondent Bosco, appellant sought to come under one of the exceptions contained in section 4 of the applicable city ordinance, the relevant portion of which reads as follows:
"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, shall be compelled to vacate the licensed premises for any reason that in the opinion of the Municipal Board of Alcoholic Beverage Control 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 Municipal Board of Alcoholic Beverage Control, be permitted to have such license transferred to another premises within a radius of five hundred (500) feet of the licensed premises so vacated."
At the hearing before the Jersey City board, appellant's application was opposed by respondent Bosco and by respondent Jersey City Tavern Owners Association. The evidence adduced and facts stipulated established that appellant had been a tenant in the licensed premises at 220 Newark Avenue under a two-year lease from May 1, 1958 to April 30, 1960, at a monthly rental of $200, with option to renew for an additional two years at a rent to be negotiated; that at the expiration of the lease, she had continued as a monthly tenant at the same rental rate for the month of May 1960, but had given the landlord notice of intention to vacate on June 1, 1960; that the rent for the premises at 577 Jersey Avenue would be $75 per month for the first year and $100 per month thereafter; that she wants the license transferred "because we are losing money"; and that her reason, therefore, for seeking to relocate the license is "purely an economic one."
By resolution filed May 3, 1960, the municipal board granted appellant's application to transfer on the ground
that she had "conformed with all requirements as set forth in Section No. 4" of the ordinance.
On respondent's appeal to the Division, the case was submitted to the hearer on the transcript below and the additional testimony of Louis Guss, owner of the premises at 220 Newark Avenue. Guss testified that he had offered to renew appellant's lease at the existing rental of $200 a month, and that although a provision for $20 a month additional to cover water and sewerage charges would be continued in the new lease, he would, as previously, waive the payment of that charge. He further said that he "did everything in our power" to keep the appellant as a tenant, including "offering to give them some consideration in the rent and fix up the place and make some improvements * * *." The hearer determined in his report that:
"It is perfectly clear that the respondent-licensee's inability to operate the licensed business profitably cannot form the basis of a finding that thereby the licensee was compelled to vacate for any reason not caused by any action on the part of the licensee. The entire design of the distance-between-premises ordinance would be set for naught if the licensee could transfer his license anywhere within 500 feet of his licensed premises merely on the basis that he could do better business at the new location."
Appellant's argument on this appeal is two-fold. She claims, first, that her landlord's insistence on maintaining the $200 monthly rental and $20 water charge is, in the light of changed neighborhood conditions reducing the possible value of the licensed premises, tantamount to raising the rent exorbitantly and therefore a disguised variety of compulsory vacation of the premises. Alternatively, she urges that inability to operate at a profit constitutes ...