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B & G Corp. v. Municipal Council of Township of Wayne

Decided: July 19, 1989.

B & G CORPORATION, PLAINTIFF-APPELLANT,
v.
MUNICIPAL COUNCIL OF THE TOWNSHIP OF WAYNE, DEFENDANT-RESPONDENT



On appeal from a Final Decision of the Director of the Division of Alcoholic Beverage Control.

Dreier, Havey and Brochin. The opinion of the Court was delivered by Havey, J.A.D.

Havey

[235 NJSuper Page 91] Petitioner B & G Corporation (B & G) appeals from a determination by the Director, Division of Alcoholic Beverage Control, which affirmed the denial by the Municipal Council of the Township of Wayne of B & G's application to transfer a plenary

liquor license. B & G had obtained the right to consent to the transfer of the license as a result of a levy against the holder of the license, Jon Michaels, Inc. The Director determined that the levy was invalid under N.J.S.A. 33:1-26, which provides "[u]nder no circumstances . . . shall a license, or rights thereunder, be deemed property, subject to . . . levy, attachment, execution, [or] seizure for debts[.]" We agree, and now affirm.

Jon Michaels, Inc., trading as J & M Wine & Liquors, is the holder of a plenary retail distribution license issued by the Township of Wayne. In April 1985, Associated Buy Liquor Rite Merchants of New Jersey Inc. (Buy Liquor Rite) obtained a $41,626.08 judgment against Jon Michaels. In July 1986, Buy Liquor Rite obtained a writ of execution in the Law Division, directing the Passaic County Sheriff to satisfy the judgment "out of the personal property" of Jon Michaels.

On July 22, 1986, the sheriff levied upon Jon Michaels' right to consent to transfer its liquor license to another person. The sheriff thereupon sold this right at auction to Buy Liquor Rite for $100. In January 1987, the IRS filed with the Wayne Township Clerk a Notice of Seizure of said liquor license for $15,844.25 owed by Jon Michaels to the IRS. On September 10, 1987, Buy Liquor Rite assigned its interest in the right to consent to a transfer of the license to B & G.

On September 11, 1987, B & G filed with the Municipal Council a person-to-person license transfer application to effect a transfer of the license from Jon Michaels to B & G. Jon Michaels did not consent to the transfer. After a public hearing, the Council denied the application, concluding that the purported levy upon Jon Michaels' right to consent to a transfer is invalid under N.J.S.A. 33:1-26. The Council also determined that the IRS Notice of Seizure prevented the Council from effecting the proposed transfer, and further that Buy Liquor Rite had no authority to assign its interests in the license to B & G without the Council's prior approval.

B & G appealed the denial to the Director. The administrative law judge to whom the matter was assigned as a contested

case, concluded that the Council properly denied the application because B & G's application "did not bear the consent in writing of the licensee to such transfer" as mandated by N.J.S.A. 33:1-26. The Director adopted the findings of the ALJ, and determined that the consent to transfer was a "right" under the license, and thus not subject to levy under N.J.S.A. 33:1-26. The Director concluded that its determination rendered moot the question whether Buy Liquor Rite's assignment to B & G was valid. He also did not comment on the Council's finding that the IRS seizure precluded granting B & G's license transfer application.*fn1

The question raised is whether the statutory proscription under N.J.S.A. 33:1-26 against any levy on a "license, or rights thereunder" includes a levy on a licensee's right to consent to a transfer of the license. B & G argues that only a levy against the license and the licensee's rights to possess and sell alcoholic beverages thereunder is prohibited by the statute. B & G views the right to consent to a transfer as a separate, defeasible property interest subject to levy, sale and execution. In support of its position, B & G cites The Boss Co., Inc. v. Bd. of Com'rs of Atlantic City, 40 N.J. 379, 387 (1963), which held that a liquor license in New Jersey constitutes "property" within the meaning and for the purposes of 26 U.S.C.A. (I.R.C. 1954) ยง 6321. B & G notes that in reaching that conclusion, The Boss observed that the liquor license has value, not merely because of the right to engage in the business of selling intoxicating liquors, "but also the monetary value that arises from the power possessed by the licensee to substitute, with the municipal consent, some other person in his place as licensee." 40 N.J. at 384.

We, of course, are not bound by the Director's determination that N.J.S.A. 33:1-26 prohibits levy upon ...


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