Opinion
August 15, 1961
Present — Bergan, P.J., Gibson, Herlihy, Reynolds and Taylor, JJ.
Appeal by defendant from an order of the Supreme Court at Special Term, Rensselaer County, denying its motion to dismiss the complaint for legal insufficiency. Plaintiff, a Massachusetts corporation, is engaged in the business of licensing retail stores, including so-called supermarkets, to operate its "goodwill award plan" under agreements specifying conditions for its use and the payment of a fee therefor by its licensees, six of which, it is alleged, are licensed by defendant to sell beer at retail for off-premises consumption pursuant to section 54 Alco. Bev. Cont. of the Alcoholic Beverage Control Law. The State Liquor Authority determined that the plan "constitutes gambling within the intent and meaning of the Alcoholic Beverage Control Law and the Rules" of the Authority and that "participation therein by the licensee would constitute cause for revocation, cancellation or suspension of the license involved". It then notified plaintiff's licensees that it had received information indicating their violation of the law by suffering or permitting gambling on their premises and threatened the immediate institution of revocation proceedings unless the occurrence of the violation was acknowledged and a written agreement "to cease and desist `from this type of violation in the future'" was executed and returned to the Authority. Fearing that their beer licenses otherwise would be placed in jeopardy, several of the licensees then discontinued the use of the plan and terminated their contracts with plaintiff. The complaint further alleges that the operation of the plan does not constitute gambling and is a legitimate business activity. It prays for a declaration to this effect and for permanent injunctive relief. The pleading demonstrates the existence of a disputed jural relation between the parties and the practical need for its stabilization. A justiciable controversy is thus presented which, within the court's discretionary power, the declaratory judgment procedure was intended to reach. Special Term correctly upheld the complaint's sufficiency. (Civ. Prac. Act, § 473; Rules Civ. Prac., rule 212; New York Foreign Trade Zone Operators v. State Liq. Auth., 285 N.Y. 272; Dun Bradstreet v. City of New York, 276 N.Y. 198; James v. Alderton Dock Yards, 256 N.Y. 298, 305, motion for reargument denied 256 N.Y. 681.) Order unanimously affirmed, without costs.