Finn's Liquor Shop, Inc. v. State Liquor Authority

• Decision Date: 07 November 1968
• Citation: 294 N.Y.S.2d 592,31 A.D.2d 15
• Court: New York Supreme Court — Appellate Division
• Parties: Application of FINN'S LIQUOR SHOP, INC., Petitioner, for an Order Pursuant to Article 78 of the Civil Practice Law and Rules v. STATE LIQUOR AUTHORITY, Respondent.

Page 592

294 N.Y.S.2d 592

31 A.D.2d 15

Application of FINN'S LIQUOR SHOP, INC., Petitioner, for an Order Pursuant to Article 78 of the Civil Practice Law and Rules v. STATE LIQUOR AUTHORITY, Respondent.

Supreme Court, Appellate Division, First Department.

Nov. 7, 1968.

Samuel B. Waterman, New York City, for petitioner.

Howard Hertzberg, New York City, of counsel (Hyman Amsel, New York City, attorney), for respondent.

Louis J. Lefkowitz, as Atty. Gen. of the State of New York, amicus curiae. (Samuel A. Hirshowitz and Brenda Soloff, New York City, with him on the brief).

Before STEVENS, J. P., and EAGER, TILZER, McGIVERN and RABIN, JJ.

STEVENS, Justice Presiding.

This is an Article 78 proceeding in which petitioner seeks review of a determination of the State Liquor Authority (SLA) which suspended petitioner's license for 10 days, directed that a demand be made on petitioner and its surety on the bond of $1000 and directed a letter of warning. The proceeding was transferred to this court pursuant to CPLR 7803 and 7804. The central facts are not in dispute.

Petitioner was charged with a violation of section 100, subdivision 5 of the Alcoholic Beverage Control Law for selling liquor on credit. The second charge was a refusal to answer questions in an interview conducted by SLA January 18, 1967 in violation of Rule 36, subdivision 15 of the Rules of SLA (9 NYCRR 53.1(o)).

At the hearing held on March 28, 1967, a preliminary motion to suppress certain evidence obtained by SLA investigators as having been obtained as the result of an illegal search on January 11, 1967, was denied as being made in the wrong forum. The Hearing Commissioner stated such a motion should be addressed to the Supreme Court. Thereafter Mr. Rownin, an investigator for the SLA, testified that on January 11, 1967, he and Investigator Statruck visited the petitioner's liquor store at 64 West 9th Street. Rownin identified himself to a Mr. Segal, who stated he was the manager of the premises and asked him 'to allow me to inspect the premises.' Rownin testified Segal said 'go ahead, inspect the premises. I must be on duty in the front.' Rownin went into the rear room of the premises, saw there a suburban coat hanging on a clothes hanger, searched the pocket of such coat 'and came out with a batch of sales slips from the premises.' The witness stated SLA had received a letter to the effect petitioner was selling liquor on credit and evidence of such sales would be found in a coat in the rear room. No search warrant was obtained.

About one or two hours later Martin Finn, an officer, director and stockholder of petitioner to whom the coat belonged, came into the store. In response to questioning by Rownin, Finn identified certain slips as representing sales on credit. Finn also signed a statement prepared by Rownin. Over objection the statement and slips were received in evidence.

Rownin also testified that on the 11th of January he took all slips found in the pocket--those identified as cash as well as credit sales. Finn's request that the cash sales slips be left was refused and he was directed by Rownin to 'call me tomorrow and you'll come up and pick them up.' Finn did not call the following day but subsequently an appointment was arranged for January 18, 1967. On that date Finn appeared with his attorney, was sworn in, but after consulting with his attorney Finn refused 'to answer on the grounds it might tend to incriminate him.' It is this refusal which forms the basis for the charge of a violation of Rule 36, subdivision 15. Admittedly there was no stenographer present at the time.

On cross-examination it developed that Rownin also looked through the desks in the rear room, although the books and records had been produced when requested.

In this proceeding petitioner urges there is no evidence to sustain the charge of sales on credit because the supporting evidence was obtained in violation of petitioner's constitutional rights, or was the fruit or result of such violation. SLA asserts there is substantial evidence to support the determination, and the penalty imposed was proper.

The amicus curiae brief of the Attorney-General asserts the hearing officer properly refused to exclude the evidence and notes whatever might be the personal rights of Finn, the corporation cannot avail itself of the benefit of such personal right of privacy.

SLA has statutory authority '(t)o inspect or provide for the inspection of any premises where alcoholic beverages are manufactured or sold' (Alcoholic Beverage Control Law (ABC), § 17, subd. 7, § 106, subd. 15). Inspection, as the term is generally used, involves a viewing or looking over to ascertain if the premises conform to statutory directives (cf. ABC Law § 106, subd. 9) and embraces as well the right to inspect books and records (supra, subds. 12, 15; Matter of Barski v. State Liquor Authority, 285 App.Div. 996, 138 N.Y.S.2d 96). A search, on the other hand, involves an examination or seeking out, an exploration in an effort to discover objects or material to be later utilized, presumably, in some form of judicial proceeding. It 'implies a prying into hidden places for that which is concealed' (People v. Dozier, 52 Misc.2d 631, 633, 276 N.Y.S.2d 145, 147; cf. United States v. Lee, 274 U.S. 559, 563, 47 S.Ct. 746, 71 L.Ed. 1202).

The right of the people to be secure in their persons, houses, and effects against unreasonable searches and seizures has been too long recognized to require extended discussion (U.S.Const. Amend. 4; N.Y.Const. Art. 1, § 12; Civil Rights Law § 8). The Fourth Amendment is enforceable against the States through the Fourteenth Amendment (Ker v. State of California, 374 U.S. 23, 30, 83 S.Ct. 1623, 10 L.Ed.2d 726). It has been held that 'except in certain carefully defined classes of cases, a search of private property without proper consent is 'unreasonable' unless it has been authorized by a valid search warrant' (Camara v. Municipal Court, 387 U.S. 523, 528--529, ...