Sled Hill Cafe, Inc. v. Hostetter

• Decision Date: 10 October 1968
• Citation: 241 N.E.2d 714,22 N.Y.2d 607,294 N.Y.S.2d 497
• Parties: , 241 N.E.2d 714 In the Matter of SLED HILL CAFE, INC., Appellant, v. Donald HOSTETTER, as Chairman of the New York State Liquor Authority, et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 497

294 N.Y.S.2d 497

22 N.Y.2d 607, 241 N.E.2d 714

In the Matter of SLED HILL CAFE, INC., Appellant, v. Donald HOSTETTER, as Chairman of the New York State Liquor

Authority, et al., Respondents.

Court of Appeals of New York.

Oct. 10, 1968.

John P. MacArthur and Alvin Berg, New York City, for appellant.

Emanuel D. Black, Hyman Amsel, New York City, and Joseph J. Micare, Albany, for respondents.

BREITEL, Judge.

In an article 78 proceeding, appellant appeals from an order of the Appellate Division, Third Department, affirming, by a divided court, the refusal of respondent State Liquor Authority, after a hearing, to grant appellant a restaurant liquor license.

The application was disapproved '(d)ue to (the association of applicant's principal, Mr. Sife,) with known narcotic users frequenting the premises and upon consideration of all the facts'. Since this is a new application, the issue is whether the determination was arbitrary and capricious. The Appellate Division held that the 'probative evidence in the record * * * barely qualifies' to substantiate the determination. The dissenting Justice found that the proof consisted solely of '(s)urmise, speculation and hearsay' and was 'grossly inadequate'. It is concluded that no evidence was adduced which could rationally support the Authority's finding that issuance of a license to appellant 'would create a high degree of risk in the administration and enforcement of the Alcoholic Beverage Control Law.'

The Authority based its decision primarily on the testimony of one Thomas Mayone, an investigator for the Ulster County Sheriff's office. Mr. Mayone testified that several 'known narcotics users' and 'the beatnik set' frequented the applicant's premises. Mr. Mayone defined 'beatniks' as persons with 'long hair, beards, real sloppy, dirty dress.' He specified that Eddie Heath, who had been convicted of possession of marijuana, had been with Mr. Sife about a dozen times; Peter Allen, who had been indicted for possession of marijuana, had been seen at the premises talking to Mr. Sife two or three times; and Marcharlene Harris, who had also been indicted for possession of marijuana, had been in the applicant's premises on numerous occasions, although she had never been in personal contact with Mr. Sife. The witness further stated that 'everyone in Woodstock' knew Health, Allen, and Miss Harris used narcotics, and that he had personally seen Miss Harris use them. Mr. Mayone also testified that Mr. Sife told one Thomas O'Brien, special investigator for the narcotics squad, that he (Mr. Sife) smoked marijuana and thought 'there was no evil in it.'

The only other evidence as to Mr. Sife's contact with narcotics was an affidavit by one Barry Walsh, an informant, who stated that he and some others, including Heath and Allen, had bought a $10 bag of marijuana from Mr. Sife in July 1964. Mr. Walsh's credibility was successfully impeached by a letter regarding his reliability, and documentary evidence that Heath was in jail at the time in question. The hearing officer placed no credence in Mr. Walsh's affidavit.

The Authority also had received several letters of protest, sometimes rambling and sometimes incoherent, from one Martin Steffanson, a neighbor, who complained about the noise which would result from the granting of the license.

Applicant introduced affidavits and testimony from 10 other residents in the community attesting to the high character of Mr. Sife and the quality of applicant's restaurant. Mr. Sife himself testified that he had never sold marijuana or any narcotic drug to anyone, and had never used any habit-forming drug either on or off his premises. He also testified that he knew Heath had been in jail and that Heath had been on his premises once in 1965 to help a friend pick up some machinery; that Allen, whom he knew, had not been on the premises at any time in 1964 or 1965; and that Miss Harris, whom he knew, had been on the premises in 1964 and 1965 and he had spoken to her. He admitted that some of the people who came to his restaurant were drug users, but that he hoped it was not a 'hangout' for such people.

The evidence supports a finding that Mr. Sife knew three people who had police records concerning their use of marijuana. However, there was no evidence introduced to show that Mr. Sife was aware that these three patrons of his restaurant were drug users. His assertion that some of his customers were drug users was not based on knowledge concerning specific persons but simply on the 'law of probabilities.' Even assuming that Mr. Sife had such specific knowledge, as the proprietor of a public restaurant he surely would not have been able to bar entry to 'beatniks' or even to persons with criminal records, unless their presence created a likelihood that the premises would become disorderly. Yet even Mr. Mayone testified that the premises were orderly, as did the witnesses for applicant.

More important, there was no showing that Mr. Sife was a personal friend of Heath, Allen, or Miss Harris. His association with them, so far as this record goes, was solely that of a proprietor to a patron. It cannot be said that by virtue of the patronage of three marijuana users, only one of whom frequented the restaurant regularly, the premises became a 'hangout' for drug users. And it was not shown, nor can it be said, that the...