For reversal and remandment -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Schettino, J.
The Boss Co., Inc., and the District Director of Internal Revenue appealed to the Appellate Division from the Conclusions and Order of the Director of the Division of Alcoholic Beverage Control dismissing their appeals and affirming the action of the Board of Commissioners of the City of Atlantic City in refusing to grant an application by Boss that liquor license C-188 be transferred to it, and in granting the application of Clock Bar & Grille, Inc., to renew said license and to transfer it to Sycur, Inc. While the appeal was pending, we certified the case on our own motion.
While Clock was the holder of a liquor license for premises known as 19-21 South Tennessee Avenue, Atlantic City, it
became indebted to the federal government in the amount of $25,914.76, plus interest, for unpaid excise taxes which were assessed on August 15, 1958. By virtue of section 6321 of the Internal Revenue Code of 1954, a lien arose in favor of the United States upon "all property and rights to property" belonging to Clock. 26 U.S.C.A. § 6321. On March 15, 1961 a revenue officer, acting pursuant to 26 U.S.C.A. § 6331, attempted to seize all rights of Clock in and under the liquor license. That same day notice was given to Clock that the property would be publicly sold on April 10 by the District Director.
On April 6 the Board granted an application by Clock for a transfer of the license from 19-21 South Tennessee Avenue to 22-24 South South Carolina Avenue.
On April 10 the licensee's property was sold to Boss by the District Director, and two days later Boss made application to the Board for the transfer of the license to it and the retransfer of the license to 19-21 South Tennessee Avenue. Clock opposed the application and a public hearing was held. The Board denied this application on May 4 on the ground of lack of jurisdiction to grant the person-to-person transfer because Boss' application was not accompanied by a separate written consent to the transfer by the original licensee, Clock, as required by N.J.S.A. 33:1-26. The Board was also of the opinion that Clock had no property rights in the license which could be subjected to levy or sale because N.J.S.A. 33:1-26 provides, inter alia, that under no circumstances shall a license or rights thereunder be deemed property. Boss and the District Director appealed to the Division of Alcoholic Beverage Control. The appeal was heard on June 26.
On May 27 Sycur, with Clock's written consent, applied to the Board for the transfer of said license to it for premises at 22-24 South South Carolina Avenue. Boss and the District Director opposed the application, and a public hearing was held on June 29. That day the Board granted Clock's application for renewal of liquor license C-188 for the term ending June 30, 1962, as well as its transfer to Sycur. Again, Boss
and the District Director appealed to the Division of Alcoholic Beverage Control.
All parties agreed that, inasmuch as the issues in both appeals were the same, they should be combined and decided together, with the decision in the earlier appeal binding the later one. The Conclusions and Order of the Director of the Division of Alcoholic Beverage Control adopted the Hearer's Report in which both reasons given by the Board for the denial of the transfer to Boss -- lack of jurisdiction to grant the application and the absence of property rights in the license subject to levy and sale by the federal government -- were found valid, and the Director affirmed the actions of the municipal board.
The sole issue before us is whether a liquor license and any rights thereunder are property or rights to property within the meaning of section 6321 of the Internal Revenue Code. The United States Supreme Court has held that, in determining whether and to what extent a taxpayer has property or rights to property to which a federal lien can attach, state law controls; but once it has been determined that state law has created a sufficient interest in the taxpayer to satisfy the requirements of section 6321, federal law governs the attachment and priority of the lien. Aquilino v. United States, 363 U.S. 509, 80 S. Ct. 1277, 4 L. Ed. 2 d 1365 (1960); United States v. Bess, 357 U.S. 51, 78 S. Ct. 1054, 2 L. Ed. 2 d 1135 (1958). Our Alcoholic Beverage Law in N.J.S.A. 33:1-26 provides: "Under no circumstances, however, shall a license, or rights thereunder, be deemed property, subject to inheritance, sale, pledge, lien, levy, attachment, execution, seizure for debts, or any other transfer or disposition whatsoever, except to the extent expressly provided by this chapter."
The language alone of our statute is not dispositive of the issue, for a state legislative pronouncement in and of itself is insufficient to determine the existence or nonexistence of a property interest within the meaning of section 6321. In Fidelity & Deposit Co. of Md. v. New York ...