Conford, Freund and Kilkenny. The opinion of the court was delivered by Conford, S.j.a.d.
[68 NJSuper Page 353] This is an appeal from an order of the Director of the Division of Alcoholic Beverage Control (hereinafter "Director" and "Division") affirming the determination of the Municipal Council of the Township of Edison to renew the Class "C" Plenary Retail Consumption liquor license held by respondent R. H. Macy & Co., Inc., t/a Bamberger's New Jersey (hereinafter "Bamberger's"), for its department store located in the Menlo Park Shopping Center, Edison Township, New Jersey. The renewal was
approved by the Council on June 27, 1960, after a public hearing necessitated by an objection filed on behalf of appellant, North Central Counties Retail Liquor Stores Association (hereinafter "plaintiff"). Thereafter plaintiff appealed to the Director, a de novo hearing was held before a Hearer, and the latter rendered his report recommending conclusions and an order in favor of respondents. The report was approved and effectuated by order of the Director. This appeal ensued.
The gravamen of the appeal is the contention that the manner of conduct by Bamberger's of its liquor department in the store is violative of N.J.S.A. 33:1-12(1), which provides, in the case of a Plenary Retail Consumption License:
"* * * but this license shall not be issued to permit the sale of alcoholic beverages in or upon any premises in which a grocery, delicatessen, drug store or other mercantile business (except the keeping of a hotel or restaurant, or the sale of cigars and cigarettes at retail as an accommodation to patrons, or the retail sale of non-alcoholic beverages as accessory beverages to alcoholic beverages) is carried on. * * *"
Bamberger's operates a department store in a two-story building at the intersection of Woodbridge and Parsonage Roads in the Township of Edison. In the southeast corner of the second floor of this store it maintains a bar, restaurant and packaged goods department which is run as an integrated unit under a Class "C" Plenary Retail Consumption license. The area of the bar-restaurant-packaged goods section, approximating 4,000 square feet, is defined in Bamberger's license application as the "licensed premises" and is clearly delineated on a diagram accompanying the application. The remainder of Bamberger's store is unlicensed, and no sales of liquor are made there. Correspondingly, no sales of other merchandise are made in the liquor department.
The only means of access to the liquor department for store patrons is by entrance from the street to the first
floor, thence by escalator or elevator to the second floor. At the entrance to the escalator there is a posted store directory, which includes under the head "Upper Level" a designation, "Garden State Restaurant & Cocktail Lounge." The record does not indicate whether a similar directory is posted at the elevator, but this is probably a fair inference, since a directory circular published by the store shows "liquor" and "cocktail lounge" in the alphabetical list of departments and store locations. Upon leaving the escalator or elevator a patron enters general merchandising floor areas which he must traverse before reaching the licensed area. From the testimony, illustrated by a number of photographs taken on the premises, it appears that the merchandise departments immediately contiguous to the licensed area are those for sale of books and religious articles. Beyond the latter is a section where toys and games are sold. One may pass freely from these departments directly into the licensed area through an open space measuring about 30 feet obstructed only by a cashier's booth. Clearly visible from the books, toys and religious articles areas, and perhaps beyond, are two large overhead signs captioned: "Fine Wines and Liquors" and "Garden State Restaurant-Cocktail Lounge."
From the photographs in evidence it is clear, and not denied, that customers in the books and religious articles areas can look into both the packaged goods and bar sections of the licensed premises. Customers in the general merchandise areas mentioned (including minors who are shown in the photographs) have easy visibility of the bar in the licensed premises and of patrons being served there.
In recommending a denial of plaintiff's appeal, the Hearer, whose report was approved by the Director, said:
"Since alcoholic beverages may be sold only on the licensed premises, it is, perhaps, a complete answer to appellant's contention to point out that the license does not permit the sale of alcoholic beverages in any other portion of the licensed building where other mercantile business is carried on."
The Hearer then referred to plaintiff's reliance upon a number of state administrative rulings by one of the early predecessors of the Director (discussed with others later herein) holding that the statute here involved (or similar local ordinances) was violated if a customer could have direct access from the portion of a building used for a general merchandise business to a licensed plenary consumption area on the same property. The test stated in these rulings was whether the "respective businesses and their locations renders them substantially separate and distinct." The rulings required, in practical effect, a solid partition between the respective areas, or a door not available to customers but only for the use of staff. The Hearer (and Director) held, however, that a different problem was presented in respect of licensed premises "on the upper floors of department stores," these having assertedly been permitted "since the earliest days of the Division," and access allowed from other areas to licensed premises "where it has been determined that the licensed premises are substantially separate and distinct." However, no specific rulings were cited by the Hearer in his opinion-report in support of his explanation, nor have any been submitted in the brief submitted to us on behalf of the Division by the Attorney General. The conclusion was that "a solid partition" here would prevent ...