Hornauer v. Division of Alcoholic Beverage Control, Dept. of Law and Public Safety

• Decision Date: 27 June 1956
• Docket Number: A--242,Nos. A--241,s. A--241
• Citation: 40 N.J.Super. 501,123 A.2d 574
• Parties: Frank E. HORNAUER, t/a Blue Roof Restaurant, Appellant, v. DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DEPARTMENT OF LAW AND PUBLIC SAFETY, State of New Jersey, Respondent. George E. NEULS, t/a River View Inn, Appellant, v. DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DEPARTMENT OF LAW AND PUBLIC SAFETY, State of New Jersey, Respondent. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 501

40 N.J.Super. 501

123 A.2d 574

Frank E. HORNAUER, t/a Blue Roof Restaurant, Appellant, v. DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DEPARTMENT OF LAW AND PUBLIC SAFETY, State of New Jersey, Respondent.

George E. NEULS, t/a River View Inn, Appellant, v. DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DEPARTMENT OF LAW AND PUBLIC SAFETY, State of New Jersey, Respondent.

Nos. A--241, A--242.

Superior Court of New Jersey Appellate Division.

Argued June 18, 1956.

Decided June 27, 1956.

Edward E. Stover, Washington, for both appellants (Archie Roth, Blairstown, on the brief).

Samuel B. Helfand, Deputy Atty. Gen., for respondent (Grover C. Richman, Jr., Atty. Gen., attorney).

Before Judges GOLDMANN, FREUND and CONFORD.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

These appeals seek review of the determination of the Director of the Division of Alcoholic Beverage Control suspending appellants' liquor licenses upon finding them guilty of the sale and service of alcoholic beverages to a 15-year-old girl who, together with two adult male companions, visited both taverns on Sunday, July 24, 1955. Suspensions entered against two other licensees (Hempel and Baer, t/a Mansfield Inn, and Landzberger, t/a Al King's Bar & Grill), whose taverns were likewise visited by the trio on the same day, have not been appealed. A charge brought against one Schureman, t/a Cedar Castle, for sale and service of alcoholic beverages to the minor, was dismissed after hearing, for lack of proof. The facts concerning the other proceedings mentioned have been stipulated of record.

This court granted a stay of the suspensions pending appeal. Permission to file a consolidated brief was granted the Division by orders duly entered.

Appellants' major contention is that the proofs fail to support the charges by a fair preponderance of the believable evidence. This is the standard which guides the Director in measuring the adequacy of proof to sustain guilt in disciplinary proceedings instituted against licensees for violation of the statute or a Division regulation. Kravis v. Hock, 137 N.J.L. 252, 254, 59 A.2d 657 (Sup.Ct.1948). On appeal our approach to the record is from a different direction. As respondent correctly notes, the futility of projecting for appellate review contentions relating to the preponderance of the evidence given before administrative agencies has become so increasingly manifest that documented support for their rejection would appear superfluous. In his analysis of developments in administrative law written for the 1946 Annual Survey of American Law (N.Y.U. School of Law) 187, 229, by Chief Justice Vanderbilt shortly before coming to the bench, he said:

'The scope of judicial review upon findings of fact continues to be narrowly limited. The substantial evidence rule is applied rigorously in literally hundreds of cases and has become so well established in the federal courts and in many of the state courts that detailed reference to all of the many cases would serve no useful purpose. The courts continue to apply the usual corollaries to the rule, I.e., that it is the function of the administrative agency and not the courts to weigh the evidence, to determine the credibility of witnesses, to draw inferences and conclusions from the evidence, and to resolve conflicts therein.'

The now generally accepted gauge of administrative factual finality is whether the factual findings are supported by substantial evidence. In re Larsen, 17 N.J.Super. 564, 576, 86 A.2d 430 (App.Div.1952). In every case in which this court has been requested to resolve conflicting evidence, independently of the factual conclusion of the respondent agency, it has declined to do so. Passarella v. Board of Commissioners, 1 N.J.Super. 313, 321, 64 A.2d 361 (App.Div.1949); Traymore of Atlantic City, Inc., v. Hock,9 N.J.Super. 47, 48, 74 A.2d 621 (App.Div.1950); In re Schneider, 12 N.J.Super. 449, 454, 79 A.2d 865 (App.Div.1951); In re Larsen, above, 17 N.J.Super. at pages 573, 576--577, 86 A.2d at pages 434, 436 (App.Div.1952); In re Gutman, 21 N.J.Super. 579, 581, 582, 91 A.2d 615 (App.Div.1952); Mazza v. Cavicchia, 28 N.J.Super. 280, 289, 100 A.2d 550 (App.Div.1953), reversed on another ground, 15 N.J. 498, 105 A.2d 545 (1954); Mitchell v. Cavicchia,29 N.J.Super. 11, 13--14, 101 A.2d 575 (App.Div.1953); Benedetti v. Board of Commissioners of City of Trenton, 35 N.J.Super. 30, 34, 113 A.2d 44 (App.Div.1955); cf. New Jersey Bell Tel. Co. v. Communications Workers, etc.,5 N.J. 354, 378, 75 A.2d 721 (1950). Cf. also, Senate Bill No. 42, 1956 session of the New Jersey Legislature, section 7, which embodies the substantial evidence rule in reviews of administrative agency action; Sanders v. Director, Division of Taxation, etc., 40 N.J.Super. 477, 123 A.2d 582 (App.Div., June 26, 1956).

The reason for this exercise of judicial restraint is that otherwise the agency 'would be reduced to the status of a mere conduit for the transmission of evidence to the courts.' Mazza v. Cavicchia, above, 28 N.J.Super. at page 289, 100 A.2d at page 554; and see In re Larsen, above, 17 N.J.Super. at page 571, 86 A.2d at page 433. Justice (then Judge) Brennan, in his concurring opinion in the Larsen case, though critical of the merger of functions reposed in the Division, expressed his view of the appellate power of reviewing the facts under then Rule 3:81--13 (now R.R. 4:88--13) (cf. R.R. 1:5--4(b), 2:5), thus:

'We should be cautious in invoking the power at least when dealing, as here, with the fact finding of an experienced agency of demonstrated competence. Cf. Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248 (1943). We should appreciate the undesirability of trying cases De novo from such an agency and of the value of having the agency assume a real responsibility for weighing and considering the facts in a field where it has considerable experience.' 17 N.J.Super. at pages 577--578, 86 A.2d at page 437.

See In re Gutman, above, 21 N.J.Super. at pages 581--582, 91 A.2d at pages 615, 616.

The case of Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951), is generally looked to as authoritatively furnishing the conventional formula for judicial application of the substantial evidence rule: "It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' * * * '(I)t must be enough to justify, if the trial were to a jdury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." 340 U.S. at page 477, 71 S.Ct. at page 459. Stating that the rule was not intended to negative the function of the Labor Board as one of those agencies 'presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect,' the opinion continues:

'* * * Nor does it mean that even as to matters not requiring expertise a court may displace the Board's choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it De novo.' 340 U.S. at page 488, 71 S.Ct. at page 465.

To similar effect, see New Jersey Bell Tel. Co. v. Communications Workers, etc., above, 5 N.J. at pages 377--379, 75 A.2d at pages 732, 733.

In his comprehensive article, "Substantial Evidence' in Administrative Law,' 89 U. of Pa.L.Rev. 1026, 1038 (1941), Dean Stason of the University of Michigan Law School finds the most acceptable meaning of the term 'substantial evidence' to be that which confers finality upon an administrative decision on the facts, 'when Upon an examination of the entire record, the evidence, including the inferences therefrom, is found to be such that a reasonable man, acting reasonably, Might have reached the decision; but, on the other hand, if a reasonable man, acting reasonably, Could not have reached the decision from the evidence and its inferences then the decision is not supported by substantial evidence and it should be set aside. In effect, this is the prevailing rule in jury trials relative to the direction of verdicts, and is also the prevailing rule applied by Appellate courts in setting aside jury verdicts because contrary to the evidence.' And see Stern, 'Review of Findings of Administrators, Judges and Juries: A Comparative Analysis,' 58 Harv.L.Rev. 70, 89 (1944).

The choice of accepting or rejecting the testimony of witnesses rests, therefore, with the administrative agency. Where such choice is reasonably made, it is conclusive on appeal. The scope of appellate review does not possess such breadth as would permit a disturbance of the administrative finding unless the court is convinced that the evidence permits of no reasonable lattitude of choice. The court canvasses the record, not to balance the persuasiveness of the evidence on one side as against the other, but in order to determine whether a reasonable mind might accept the evidence as adequate to support the conclusion and, if so, to sustain it.

Tested by these considerations, it cannot be said that the proofs in either of the cases before us were insufficient to sustain the findings of the Director, whatever the members of this court as individuals might conclude as to whether a fair preponderance of the credible evidence indicated the guilt or innocence of the respective appellants. In each case the girl unequivocally...