On appeal from State of New Jersey, Department of Law & Public Safety, Division of Alcoholic Beverage Control.
Ard, King and McElroy. The opinion of the court was delivered by McElroy, J.A.D.
This is an appeal from an affirmance by the Director of the Division of Alcoholic Beverage Control of a resolution of defendant local issuing authority, the Township Council of Montclair, New Jersey, denying appellant a place-to-place transfer of its liquor consumption license to premises known as 600 Bloomfield Avenue in that township.
On the appeal from the township council determination to the Division of Alcoholic Beverage Control the matter was submitted to an administrative law judge who, after a hearing, made findings of fact and concluded that the resolution of the respondent council was unreasonable and, in part, "placed too much emphasis on the objection of two churches sufficiently distant from the proposed site." At the appeal hearing the parties stipulated that the two protesting churches were more than 200 feet from the proposed location. See N.J.S.A. 33:1-76; Fanwood v. Rocco, 33 N.J. 404, 412 (1960). The Director's determination rejected the initial decision of the administrative law judge and affirmed the township's denial of transfer.
Appellant requests that we reverse the Director and hold that the township council clearly acted arbitrarily, capriciously and unreasonably. We do not treat this issue because we are persuaded by appellant's second ground of appeal to reverse and remand the matter to the township council for a new hearing on appellant's application for a transfer of license. Appellant contends that two members of the township council, Ramsey and
Reilly, were members of the Union Baptist Church and failed to disclose that membership although that church, through its pastor and other members, was a principal objector to the proposed relocation of this liquor license.
This issue of conflict of interest was not treated in the determinations of the administrative law judge or the Director because, as noted, the council members did not reveal their affiliation with the protesting church and respondent's counsel did not, apparently, obtain confirmation of appellant's suspicion until recently. Respondent's brief now concedes that "Councilman Ramsey and Councilwoman Reilly attend that Church." It is not disputed that Reverend Maxwell, pastor of the Union Baptist Church, not only appeared with other church members before the local council and objected to this transfer as inimicable to the interests and activities of the church, but had also sent a letter of protest to the town clerk. Although there were seven members of the council, the letter indicates that copies were only sent to Councilman Ramsey and Councilwoman Reilly, the two members of his congregation who sat on the council.
The principles controlling resolution of a conflict of interest are set forth in Van Itallie v. Franklin Lakes, 28 N.J. 258 (1958):
The decision as to whether a particular interest is sufficient to disqualify is necessarily a factual one and depends upon the circumstances of the particular case. Aldom v. Borough of Roseland, supra, 42 N.J. Super.  at page 503. No definitive test can be devised. The question will always be whether the circumstances could reasonably be interpreted to show that they had the likely capacity to tempt the official to depart from his sworn public duty.
Local governments would be seriously handicapped if every possible interest, no matter how remote and speculative, would serve as a disqualification of an official. If this were so, it would discourage capable men and women from holding public office. Of course, courts should scrutinize the circumstances with great care and should condemn anything which indicates the likelihood of corruption or favoritism. But in doing so they must also be mindful that to abrogate a municipal action at the suggestion that some remote and nebulous interest is present, would be to unjustifiably deprive a municipality in many important instances of the service of its duly elected or appointed officials. The determinations of municipal officials should not be approached with a general feeling of suspicion, for as Justice Holmes has said, 'Universal distrust creates
universal incompetency.' Graham v. United States, 231 U.S. 474, 480, 34 S. Ct. 148, 151, 58 L. Ed. 319, 324 (1913); see also Ward v. Scott ...