96 N.Y.S. 655 | N.Y. App. Div. | 1905
Lead Opinion
The question presented upon this appeal is whether the provisions of chapter 697 of the Laws of 1905, so far as they direct the Special Deputy Commissioner of Excise to revoke a liquor tax certificate issued to a .person intending to. carry on the traffic in liquor in connection with the business of a hotel, without notice to the holder of the liquor tax certificate or giving him' an opportunity to be heard, violates any provision of the Constitution of this State. Prior to the 1st clay of June, 1905, the relator duly paid the tax and applied for and received a liquor tax certificate .to traffic in liquor, in connection with the business of keeping a hotel at No. 2353 Third avenue, city of New York, pursuant to-chapter 112 of the Laws of 1896 and the various acts amendatory thereto. By the Liquor Tax Law (Laws of 1896, chap. 112) there was substituted for a license to traffic in liquor under the provisions of the Excise Law of 1892 (Laws of" 1892, chap. 401, as amd.) a system of taxation by which a tax was imposed upon each citizen of this State intending.to engage in the liquor business.
Subdivision 1 of section 11 of the act (as amd. by Laws of 1903, chap. 115) provides: “Upon the business of trafficking in' liquors to be drunk upon the premises where sqld, or which are so drunk, whether in a hotel, restaurant, saloon, store, shop, booth or other
Section 25 (as amd. by Laws of 1903, chap. 486) provides as follows: “ If a person holding a liquor tax certificate and authorized
Section 27 (as amd. by Laws of 1897, chap. 312) provides that a liquor tax certificate, except á certificate issued under, subdivisions 3, 5 or 6 of section 11 of the act, may be sold, assigned or transferred during the time for which it was granted to any corporation, association, copartnership or person not forbidden to traffic in liquors under the act, or under the subdivision of section 11 under which such certificate was issued, upon the consent of the officer who issued the license or his successor in office; provided, however, that no such sale, assignment or transfer shall be.made except in accordance with the provisions of "the Liquor Tax Law. Subdivision 1 of section 28 (as amd. by Law's of 1897, chap. 312) provides, for a review by certiorari of the refusal to issue or transfer a. liquor tax certificate. Subdivision 2 of that section (as amd. by Laws of 1903, chap.'486, and Laws of 1905, chap. 680)."provides: “A*t any time after a liquor tax certificate has been issued to any corporation, association, copartnership or person under section eleven of this act, said liquor tax certificate may be revoked and cancelled if material statements in the application of the holder of such certificate were false, or if the consents required by section seventeen are not properly filed as required‘by said section, or if the holder of said certificate was not for any reason entitled to receive or hold the same, or to traffic in liquors, or if any provision of this act is violated at the place designated in said certificate as the place where such traffic is to be carried on.” Provision is then made therein for a judicial determination by a justice of the Supreme Court, or the Special Term of the Supreme Court, or the county judge, based upon a verified petition stating the facts upon which the cancellation is claimed. Upon the presentation of the petition, the justice,
Section 30 (as amd. by Laws of 1;S97, chap. 312) specifies the persons to whom liquor shall not 'be sold or given away, and that section-and section 31 (as amd. by Laws of 1903, chap. 486,. and Laws of 1904^ chap. 205) designate what are illegal sales and selling. Section 31 (as amd. by Laws of 1903, chap. 486) provides' that the holder of a liquor tax certificate under subdivision 1 of section 11 of the act, who is - the keeper of a hotel, may sell liquor to the' guests ' of such hotel,, except to such persons as are described in clauses'1, 2, 3, 4, 5 and 6- of section 30 of the act, with .their meals, or in their rooms therein, except between the hours of one o’clock ■ and five o’clock in the morning, hut not in the barroom or other similar room of such hotel. The section" then defines the term hotel, and who are srnests within the meaning of this section. . '
Laws of 1897, chap. 312 ; Laws of 1899, chap. 398 ; Laws of 1900, chap. 367; Laws of 1903, chap. 486, nud Laws of 1905, chap. 680) specifies the penalties for violations of the act. Subdivision 2 of section 34 (as amd. by Laws of 1900, chap. 367) provides that any corporation, association, copartnership or person who. shall make any false statement in the application required to be presented to the county treasurer or other officer to obtain a liquor tax certificate, or to obtain a transfer thereof, or who shall violate any of the provisions of sections 11, 21, 22, 23, 24, 30 or 31
Section 36 (as amd. by Laws of 1903, chap. 486, and Laws of 1905, chap. 68Ó) provides for the collection of fines and penalties.
Section 42 (as amd. by Laws of 1897, chap. 312) provides, among other things, for the collection of additional penalties from any corporation, association, copartnership or person who shall traffic in liquor contrary to the provisions of the Liquor Tax Law, or who shall make a false statement upon application for . a liquor tax certificate, to be recovered by the State Commissioner* of Excise in an action brought in his, name as such commissioner.
This analysis of the act shows that a person receiving a liquor tax certificate based upon the payment of the amount assessed
It is claimed that this certificate is void if the applicant had been guilty" of any misstatement in his application. Assuming that, to be true, before the fact could be determined against him and his property' right destroyed, he was entitled to notice of the charge made against him and an opportunity to contest the accusation of there having been a misstatement in his application. If the pro
That the holder of a liquor tax certificate acquires upon the payment of the tax a right which the court will protect has been expressly 'decided by the Court of Appeals in Matter of Lyman (160 N. Y. 96). The court, in affirming an order dismissing a proceeding to revoke a certificate,"said: “The company paid the tax on procuring the certificate, but the commissioner claims that this certificate thus procured has been forfeited because sales of beer were made upon the grounds by the holder at another place than that described therein. *' * * Liquor tax certificates, or the right to engage in the sale of liquors, constitute" under the present law, a species of property transferable by the party procuring-the same. * * * The privilege or right which it confers upon the holder cannot be j’evoked except in the manner and for the causes prescribed in the statute. The holder may invoke the general rules of law for the protection of property in any proceeding having for its object the forfeiture or destruction of the right which the certificate'confers.”'
Matter of Peck v. Cargill (167 N. Y. 391) was an appeal from an order revoking and canceling a liquor tax certificate. In thaAcase Judge O’Brien, in delivering the opinion of the court, says: “ These certificates are recognized by the statute under which they are issued as a species of property transferable from one to another. They are the evidence of a right or privilege ¿o carry on a certain kind of business, issued by the State to the individual, and hence a thing of. pecuniary value. In this case the holder of the certificate has been deprived of it by the order appealed from, which revoked and canceled it. This has been done on the ground that he was guilty of a violation of the law by selling liquor on Sunday. The order so adjudges. Ao one has testified, or even alleged, that he committed that offense. The petitioner does allege that yhe is informed and believes that the holder of the certificate has been selling beer, whisky and wine‘during the last three months’ on Sunday, and that is absolutely the only allegation or proof in the
In Niles v. Mathusa (162 N. Y. 546) the right acquired under such liquor tax certificate was before the court, the question being, whether the holder of such certificate could .mortgage it to secure the payment of a sum of money, and in determining that question the court said: “ The certificate differs essentially from the licenses issued under former excise laws; it maybe surrendered and the unearned portion of the tax is returned; it' can be assigned, subject I to the limitations of the statute, and if the holder dies it is an assetl in the hands of his executor or administrator who may collect the I rebate.' The certificate'is undoubtedly personal property under accepted definitions, but it remains tó be considered whether it is ini legal contemplation a chattel.” And as a conclusion the court says: “.The liquor tax certificate is personal- property, but it is notl a chattel -within the purview of the Chattel Mortgage Act.
The State has received the relator’s money, for which it authorized him to conduct a certain, business within the State for .one year, the right to be subject to revocation and. cancellation as a result of a judicial prpceeding to which .the relator must be a party. That right is held to be a property right and can only be" revoked^ canceled or destroyed by a judicial proceeding in conformity with the grant of the right; and for tlie State to attempt by a legislative ■ enactment to revoke and cancel the right acquired by this certificate without notice to the holder is the taking of property without, due process, of law and, as I view-it, in direct violation of -the cónstitu tional provisions guaranteeing the protection of the owners of property. (Const, art. 1, §§ 1, 6.) We are only discussing an act that, affects certificates issued before its passage and this decision affects eñly that act.
It follows, therefore, that the order appealed from must be -.reversed. ■ and relator discharged. : . "’
O’Brien, B. J.,. and Patterson, J.
See Laws of 1896, chap. 112, § 11, as amd. by Laws of 1903, chaps. 115, 486, and Laws of 1905, chap. 678; Id. § 21, as amd. by Laws of 1908, chap. 486; Id. § 12, as amd.'by Laws of 1897, chap. 312; Id. § 23, as amd. by Laws of 1900, chap. 367, and Laws of 1905, chap. 680; Id. § 24, as amd. by Laws of 1897, chap. 312; Laws of 1904, chap. 485, and Laws of 1905, chaps. 104, 677; Id. § 30, as amd. by Laws of 1897, chap. 312; Id. § 3Í, as amd. by Laws of 1903, chap. 486, and Laws of 1904, chap. 205.— [Rep.
See Laws oí 1883, chap. 279, as amd.; revised in Lien Law "(Laws of .18971 chap. 418), § 90 et seq, as amd.— [Rep.
U. S. Const, art. 1, § 10, subd. 1; id. 14th amendt. § 1,-f [Rep.
Laws of .1892, chap. 339.— [Rep.
Dissenting Opinion
I dissent.' It is and always has been the law of this State that the regulation of the traffic in liquors is part of the police power. In the exercise of that power the Legislature has provided that a license procured by false statements as to certain easily ascertainable physical facts shall be invoked by one State . officer on an official report made after inspection by another public officer of the nonexistence of those physical requirements in the building in which the liquor is to be. sold. To hold that a license to sell liquor obtained by such a fraud so established may not be so revoked upon the ground that thereby a constitutional right is violated, does not seem to me to accord with the matured views of the courts of this State. There are expressions in some opinions which may be cited in support thereof. It seems to me they have been withdrawn or overruled. In People ex rel. Ochs v. Hilliard (81 App. Div. 71 ; affd., 178 N. Y. 582) no proceedings of any kind had been taken against the certificate holders either criminally or civilly, nor had their license been taken away. The building for which it had been issued had burned down and the assignees of the certificate who had advanced the money to pay the tax attempted to obtain the rebate from, the State. dSTotwithstanding the fact that these innocent third parties who had advanced their money on the strength of the provisions of law in regard to rebates were ignorant of the false statements in the application upon which the certificate was granted the court said: “Any false statements in the application in that regard vitiated the certificate in their hands and in the hands of their assignee as well. * * * Inasmuch as they were not-eligible to traffic in the liquor business, the certificate'issued to them on their false representation was void,” and their proceeding was dismissed. In Lyman v. Schermerhorn (167 N. Y. 115) it was said : “ The false ■statement upon which he procured it overreached the certificate ■ itself, and at the election of the State rendered it void ah initio. * * * When the State withdraws that approval and asserts that the certificate affords no protection to its holder, the bond which was given in consideration of such protection ceases to be supported by it.” Chapter 697 of the Laws of 1905, here in consideration is a method provided by which the State ex rcises its election to declare the certificate obtained by fraud to be void ah initio. It
By. chapter 578 of the Laws of 1866 licenses to sell liquor taken out under the 'provisions of the Excise Law of 1857 (Laws of 1857} chap. 628) were revoked. 'The Court of Appeals, in Metropolitan Board of Excise v. Barrie (34 N. Y. 657), said: “It, in terms, it is true, revokes licenses granted under the act of'1857} but that is no encroachment upon any right secured to the citizen as ■' inviolable by the fundamental law. * v* *” The licenses “ form ,a portion of the internal police System of the Stateare issued, in the exercise of its police powers, and- are subject to the direction of the State government, which 'may modify, revoke or continue them; as it may deem fit,” and held the act constitutional. The present Liquor Tax Law expressly terminated all outstanding licenses. In People ex rel. Einsfeld v. Murray (149 N. Y. 367) the Court of Appeals held this to be constitutional as a law enacted under the police' power.
In my opinion the order should' be affirmed.
Laughlin, J., concurred.
Order reversed and. relator discharged.