Migliaccio v. O’Connell, 307 N.Y. 566 (1954)
To establish that a licensee “suffered or permitted” gambling on their premises in violation of the Alcoholic Beverage Control Law, there must be evidence that the licensee had knowledge or the opportunity through reasonable diligence to acquire knowledge of the gambling activity.
Summary
This case addresses the level of knowledge required to prove that a licensee violated the Alcoholic Beverage Control Law by suffering or permitting gambling on their premises. The court found that for a violation to stand, the licensee must have had actual or constructive knowledge of the gambling activity. The court annulled the suspension of the petitioner’s license because there was no evidence that the licensee or their employees were aware of the gambling activity occurring on the premises. This case emphasizes that mere occurrence of gambling is insufficient; the licensee’s complicity, actual or implied, is required.
Facts
An undercover police officer observed a woman patron engaging in apparent gambling activities (taking money and making notations on paper) at the petitioner’s bar over a period of several days. On one occasion, the officer returned with a search warrant and found the same woman with a slip containing horse-racing plays. There was no evidence that the bartender or the licensee, who was present for only about an hour on one of the days, saw or knew about the woman’s activities.
Procedural History
The New York State Liquor Authority suspended the petitioner’s license for violating Section 106, subd. 6 of the Alcoholic Beverage Control Law, alleging that the licensee suffered or permitted gambling on the premises. The Appellate Division annulled the suspension, finding a lack of evidence of knowledge on the part of the licensee. The Court of Appeals affirmed the Appellate Division’s decision.
Issue(s)
Whether the evidence presented was sufficient to establish that the licensee “suffered or permitted” gambling on the licensed premises, thereby violating Section 106, subd. 6 of the Alcoholic Beverage Control Law.
Holding
No, because there was no evidence to demonstrate that the licensee had knowledge or the opportunity through reasonable diligence to acquire knowledge of the gambling activity.
Court’s Reasoning
The court emphasized that the phrase “suffer or permit” implies knowledge or the opportunity through reasonable diligence to acquire knowledge. Quoting People ex rel. Price v. Sheffield Farms, the court stated, “Sufferance as here prohibited implies knowledge or the opportunity through reasonable diligence to acquire knowledge. This presupposes in most cases a fair measure at least of continuity and permanence.” The court found that the record did not support a conclusion that there was a fair measure of continuity and permanence in the gambling activity, nor was there any evidence that the licensee or the barmaid were aware of it.
The court distinguished the case from situations where an employee is directly involved in the gambling activity, noting that here, the initiator was a customer. The court noted the absence of evidence suggesting any complicity, actual or implied, by the licensee in permitting gambling. The court found that holding the licensee responsible for the actions of a patron, based on alleged constructive notice on the part of the bartender, would be an overreach, especially since there was no evidence that the employee was aware of the gambling.
The court reinforced that the gravamen of the charge under section 106 is the licensee’s complicity, actual or implied, in permitting gambling and said that the record lacked sufficient evidence to support the licensee’s implied acquiescence in any such activity. This means the state has to prove that the licensee knew about the gambling, or that they were negligent in not knowing about it.