Mazza v. Cavicchia, A--110

Citation15 N.J. 498,105 A.2d 545
Decision Date24 May 1954
Docket NumberNo. A--110,A--110
PartiesMAZZA v. CAVICCHIA, Director, Division of Alcoholic Beverage Control.
CourtUnited States State Supreme Court (New Jersey)

Julius Kramer, Hackensack, argued the cause for the appellant (Chandless, Weller & Kramer, Hackensack, attorneys).

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

The opinion of the court was delivered by

VANDERBILT, C.J.

I.

This is an appeal from a judgment of the Appellate Division of the Superior Court affirming an order of the Director of the Division of Alcoholic Beverage Control suspending the appellant's license to sell alcoholic beverages.

The appellant operates the Traveler's Hotel & Restaurant, a two-story structure on the Paterson Plank Road in East Rutherford, and was the holder of a plenary retail consumption liquor license. Agents of the Division filed a complaint with the Director charging that on September 26 and 27, 1952, as well as on prior occasions, Mazza had violated Rule 5 of State Regulations No. 20 in that he had allowed lewdness and immoral activity on the premises and also that on September 27, 1952 and on other days prior thereto, he had permitted the sale of contraceptive devices on the premises contrary to Rule 9 of State Regulations No. 20. By notice issued September 30, 1952 Mazza was required to show cause why his license should not be revoked or suspended.

Pursuant thereto a hearing was held before a hearer of the Division. An inspector and two investigators of the Division were the only witnesses for the State. At the conclusion of the hearing the hearer advised the parties that the matter would be submitted to the Director for determination and that all parties would be advised of the result. Subsequently the hearer forwarded the record of the hearing to the Director together with a report of his findings and conclusions but a copy thereof was not furnished to Mazza. The Director found Mazza guilty of the charges and ordered the suspension of his license for 180 days and on appeal his order was affirmed by the Appellate Division of the Superior Court, 28 N.J.Super. 280, 100 A.2d 550 (1953).

Mazza appeals here asserting that his constitutional rights have been infringed, N.J.Const.1947, Art. VI, Sec. V, Par. 1, clause (a), in that he was denied due process and a fair hearing before the Division. It is unnecessary for us to determine each of the points raised because we are of the opinion that by reason of the failure to supply the appellant with a copy of the hearer's secret report to the Director the appellant was deprived of his right to due process and a fair hearing before the administrative tribunal. In order, however, to set at rest questions that may be of some importance in the field of administrative procedure, we will first deal with the other points raised by the appellant.

II.

1. The appellant claims that there is no statutory authority for anyone other than the Director to conduct the hearing. The Alcoholic Beverage Law, R.S. 33:1--23, N.J.S.A., provides, among other things, that 'It shall be the duty' of the Director 'to conduct hearings in accordance with this chapter' and also that 'The enumeration of the above specific duties shall not be construed to limit or restrict in any way the general authority given (to him) by this chapter.' R.S. 33:1--31, N.J.S.A., authorizes the suspension or revocation of a license by the Director for violation 'of rules and regulations' upon the giving of the required notice and 'a reasonable opportunity to be heard.' R.S. 33:1--35, N.J.S.A., in effect at the time of this proceeding provided:

'For the purpose of any investigation, examination or inspection, revocation, rule to show cause and every other proceeding authorized under this chapter or appropriate for its enforcement, the commissioner *, His deputy commissioners *, Attorneys and legal assistants designated to act on his behalf, and each other issuing authority may examine, under oath, any and all persons whatsoever and compel by subpoena the attendance of witnesses and the production of books, records, accounts, papers and documents of any person or persons and The commissioner *, his deputy commissioners * (directors), inspectors and investigators and each other issuing authority may take any oath or affirmation of any person to any deposition, statement, report or application required in the administration of this chapter * * *.' (Emphasis supplied.)

From these provisions of the statute there is evident a clear legislative intent to permit the Director to delegate his authority to conduct hearings even though the duty to make the final decision rests solely in the Director; see Horsman Dolls, Inc. v. State Unemployment Compensation Comm., 134 N.J.L. 77, 80, 45 A.2d 681 (E. & A. 1946), appeal dismissed 329 U.S. 693, 67 S.Ct. 635, 91 L.Ed. 606 (1947). Nor does such procedure constitute a deprivation of the appellant's right to due process of law, Horsman Dolls, Inc. v. State Unemployment Compensation Comm., supra, 134 N.J.L. 77, 81, 45 A.2d 681; Morgan v. United States, 298 U.S. 468, 481, 56 S.Ct. 906, 80 L.Ed. 1288, 1295 (1936); Schwartz, The Model State Administrative Procedure Act--Analysis and Critique, 7 Rutgers L.Rev. 431, 453 (1953).

2. The appellant next challenges the validity of Rule 31 of State Regulations No. 20, claiming first that the Director was without legislative authority to issue it. This contention is without merit for the Legislature has specifically granted the Director the power to promulgate rules and regulations, R.S. 33:1--39, N.J.S.A.; see Franklin Stores Co. v. Burnett, 120 N.J.L. 596, 1 A.2d 25 (Sup.Ct.1938); Greenspan v. Division of Alcoholic Beverage Control, 12 N.J. 456, 459, 460, 97 A.2d 413 (1953).

3. The appellant then questions the constitutionality of Rule 31 which provides:

'In disciplinary proceedings brought pursuant to the Alcoholic Beverage Law, it shall be sufficient, in order to establish the guilt of the licensee, to show that the violation was committed by an agent, servant or employee of the licensee. The fact that the licensee did not participate in the violation or that his agent, servant or employee acted contrary to instructions given to him by the licensee or that the violation did not occur in the licensee's presence shall constitute no defense to the charges preferred in such disciplinary proceedings.'

It is well settled that a state may without violating the due process clause of the Federal Constitution establish presumptions which according to general experience reasonably tend to prove the fact in question. Hawker v. People v. State of New York, 170 U.S. 189, 195, 18 S.Ct. 573, 42 L.Ed. 1002, 1005--1006 (1898); Hawes v. State of Georgia, 258 U.S. 1, 2--5, 42 S.Ct. 204, 66 L.Ed. 431, 431--432 (1922). Rule 31 comes within this test as a reasonable presumption, State v. Morris, 94 N.J.L. 19, 108 A. 765 (Sup.Ct.1919), affirmed 94 N.J.L. 567, 112 A. 893 (E. & A. 1920); State v. Costa, 11 N.J. 239, 246, 94 A.2d 303 (1953); Greenbrier, Inc. v. Hock, 14 N.J.Super. 39, 81 A.2d 398 (App.Div.1951), certification denied 7 N.J. 581, 83 A.2d 380 (1951).

In addition it must be remembered that a license to sell intoxicating liquor is not a contract nor is it a property right. Rather it is a temporary permit or privilege to pursue an occupation which otherwise is illegal. In re Schneider, 12 N.J.Super. 449, 456, 79 A.2d 865 (App.Div. 1951). From the earliest history of our State the sale of intoxicating liquors has been treated in an exceptional manner by the Legislature. Hudson Bergen, County Retail Liquor Stores, Ass'n v. Board of Com'rs of City of Hoboken,135 N.J.L. 502, 506, 52 A.2d 668 (E. & A. 1947). 'It is a subject by itself, to the treatment of which all the analogies of the law appropriate to other topics cannot be applied.' Paul v. Gloucester County, 50 N.J.L. 585, 595, 15 A. 272, 277, 1 L.R.A. 86 (E. & A. 1888). 'The sale of intoxicating liquor is in a class by itself.' Bumball v. Burnett, 115 N.J.L. 254, 255, 179 A. 307 (Sup.Ct.1935). 'As it is a business attended with danger to the community, it may * * * be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils.' Crowley v. Christensen,137 U.S. 86, 91, 11 S.Ct. 13, 15, 34 L.Ed. 620, 624 (1890).

The governmental power to regulate activities upon the licensed premises has uniformly been accorded liberal judicial support. Board of Com'rs of Town of Phillipsburg v. Burnett, 125 N.J.L. 157, 161, 14 A.2d 533 (Sup.Ct.1940); In re Larsen, 17 N.J.Super. 564, 571, 86 A.2d 430 (App.Div.1952).

'The right to regulate the sale of intoxicating liquors, by the Legislature, or by municipal or other authority under legislative power given, is within the police power of the state, and is practically limitless.' Meehan v. Board of Excise Commissioners, 73 N.J.L. 382, 386, 64 A. 689, 690 (Sup.Ct.1906), affirmed 75 N.J.L. 557, 70 A. 363 (E. & A. 1908).

It was clearly within the power of the Legislature to provide that the licensee should be liable for activities upon the licensed premises even in the absence of knowledge thereof by the licensee.

The question then arises as to whether the Legislature has granted the Director the authority to promulgate this rule. The Director has been given the duty 'to supervise the manufacture, distribution and sale of alcoholic beverages in such a manner as to promote temperance and eliminate the racketeer and bootlegger.' (R.S. 33:1--3, N.J.S.A.). Under R.S. 33:1--39, N.J.S.A., he is granted very broad and general powers:

'The commissioner (now Director) may make such general rules and regulations and such special rulings and findings as may be necessary for the proper regulation and control of the manufacture, sale and distribution of alcoholic beverages and the enforcement of this chapter, in addition thereto, and...

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