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

Decision Date19 July 1989
Citation561 A.2d 655,235 N.J.Super. 90
PartiesB & G CORPORATION, Plaintiff-Appellant, v. MUNICIPAL COUNCIL OF the TOWNSHIP OF WAYNE, Defendant-Respondent.
CourtNew Jersey Superior Court — Appellate Division

David S. Piltzer, Cranford, for appellant (Piltzer & Piltzer, attorneys; David S. Piltzer, Cranford, of counsel and on the briefs).

John J. McKniff, Hawthorne, for respondent Municipal Council of the Tp. of Wayne (Ronald A. Breslow, Wayne, attorney; John J. McKniff, Hawthorne, on the brief).

Barbara L. Foglietta, Deputy Atty. Gen., for respondent Div. of Alcoholic Beverage Control (Peter N. Perretti, Jr., Atty. Gen. of N.J., attorney; Michael R. Clancy, Asst. Atty. Gen., of counsel; Barbara Foglietta, on the brief).

Before Judges DREIER, HAVEY and BROCHIN.

The opinion of the Court was delivered by

HAVEY, J.A.D.

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. 1

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, 192 A.2d 584 (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) § 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, 192 A.2d 584.

We, of course, are not bound by the Director's determination that N.J.S.A. 33:1-26 prohibits levy upon a consent to transfer. Mayflower Securities v. Bureau of Securities, 64 N.J. 85, 93, 312 A.2d 497 (1973). However, we should accord substantial deference to an interpretation of a statute by the agency responsible for enforcing it. Mortg. Bankers Ass'n v. N.J. Real Estate Com'n., 102 N.J. 176, 191, 506 A.2d 733 (1986); Petition of Adamar of New Jersey, 222 N.J.Super. 464, 469-470, 537 A.2d 704 (App.Div.1988). Further, we must defer to the administrative agency's expertise in relation to technical matters. Id. at 470, 537 A.2d 704.

Also, the primary factor in construing a statute is the underlying intent of the Legislature and, in discerning its intent, we must not only consider the particular statute in question, but also the entire legislative scheme of which it is a part. State v. Wright, 107 N.J. 488, 497, 527 A.2d 379 (1987). Moreover, the provisions of N.J.S.A. 33:1-1, et seq., the Alcoholic Beverage Control Act, are not to be construed to lead to absurd results. Beaudoin v. Belmar Tavern Owners Ass'n., 216 N.J.Super. 177, 185, 523 A.2d 256 (App.Div.), certif. den. 107 N.J. 626, 527 A.2d 451 (1987).

We agree with the Director that N.J.S.A. 33:1-26 prohibits levy on a licensee's right to consent to a transfer. Issuance of a liquor license "vests a personal right in the licensee to conduct a business otherwise illegal" and, as such, is "merely a temporary permit or privilege." The Boss Co., supra, 40 N.J. at 384, 192 A.2d 584 [emphasis added]. The statute guards this "personal right" by pronouncing that "[u]nder no circumstances ... shall a license, or rights thereunder, be deemed property, subject to ... levy, attachment, execution, [or] seizure for debts[.]" N.J.S.A. 33:1-26 [emphasis added]. The statute further provides that a license transfer application "shall bear the consent in writing of the licensee to such transfer[.]" [Emphasis added]. We read this pertinent language to mean that no transfer can be effected without the voluntary consent of the person who holds the "personal right" to the license, the licensee himself. The statutory language leaves no room for the conclusion that an "involuntary" consent by levy or otherwise will satisfy the application process.

Further, the evident intent of N.J.S.A. 33:1-26 in prohibiting levy or execution against the license "or rights thereunder" is to protect the licensee "from any device which would subject it to the control of persons other than the licensee[.]" The Boss Co., supra, 40 N.J. at 388, 192 A.2d 584. Thus, it is settled law that specific performance may not be granted to enforce the performance of a contract to assign or transfer a liquor license, or to otherwise control a licensee in the use of his license. Rte. 73 Bowling Center, Inc. v. Aristone, 192 N.J.Super. 80, 83-84, 469 A.2d 85 (App.Div.1983); Rawlins v. Trevethan, 139 N.J.Eq. 226, 230-231, 50 A.2d 852 (Ch.Div.1947). So too, it has been held that a pledge of a liquor license, or an agreement that one who purchases the licensee's chattels on distress or execution would have an option to buy the license, is invalid. Walsh v. Bradley, 121 N.J.Eq. 359, 360, 190 A. 88 (Ch.1937). The underlying reasoning behind these cases is that:

[T]he local Alcoholic Beverage Control Board should have unfettered discretion as to whether to approve or deny a transfer without having to consider possessory rights of a third party. [Rte. 73 Bowling Center, Inc. v. Aristone, supra, 192 N.J.Super. at 83, 469 A.2d 85 [emphasis added]].

It is clear to us that under N.J.S.A. 33:1-26 a right to consent to a license transfer is a right inseparable from the license itself. The right to consent is created by and exists solely as a result of the issuance of the license, and hence is clearly a "right[ ] thereunder[.]" B & G's reading of the statute would frustrate the...

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