People ex rel. Merritt v. Kraft, 130 N.Y.S. 363

People ex rel. Merritt v. Kraft

130 N.Y.S. 363 | N.Y. App. Div. | 1911

Lead Opinion

Smith, P. JV:

By article 12 of the Tax ■ Law (Consol. Laws, chap. 60 [Laws of 1909, ch. -62], § 210,.as amd. by Laws of 1910, chap. 38; Id. §§ 211, 212) it is provided that upon every sale or transfer of shares of stock in any domestic or foreign corporation there shall be paid to. the State a tax of two cents upon each $100 of Lace value or fraction thereof. -This tax is paid by affixing to the instrument of transfer, or in case there be no instrument of transfer, upon the books of the party making the transfer, adhesive stamps which are purchased from the Comptroller. For the making of such sale or transfer without the affixing of said stamps the party is deemed guilty of a misdemeanor and is punished by a fine of not less than $500 or more than $1,000, or imprisonment for not more than six months,. Or both such fine and imprisonment. By section 216 (as amd. by Laws of 1910, chap. 453) it is provided that the State Comptroller may inquire into and ascertain whether the tax imposed by the provisions of this article has been paid, and for this purpose he is given authority to examine certain books and papers of any person, firm or corporation whose memoranda of transfers shall be made accessible to him for that purpose, and a failure to disclose the books and memoranda showing such transfers by any person or corporation is made a misdemeanor, subjecting the. party to-heavy fine or imprisonment or both. In 1911 this law was amended so as to prohibit the sale of stamps hy private dealers, or by any one except an authorized agent of the Comptroller.

For the purpose, of making the examinations necessary to ascertain whether the stamps have been duly affixed and the tax paid, the Comptroller has in his office fourteen employees, called examiners of stock transfers. In 1905, when these examiners were first appointed at the request of the State *664Comptroller, they were classified by the Civil Service Commission as in the exempt class of the civil service. They so- continued in the exempt class until July I, 1910, when upon the recommendation of the Comptroller they were pnt in the competitive class. In February, 1911, the present Comptroller requested the Commission, to place the position of examiner of transfers of stock again in the exempt class, and in March of. that year the Commission passed a resolution restoring such position to the exempt class in the civil service, and it is this resolution, which is required to he rescinded by the order for the mandamus issued by. the Special Term from which this appeal is taken.

The requirement of the Constitution in section 9 of article 5 thereof is to the effect that appointments in the civil service of the State shall be made according to merit and fitness, “to be ascertained so far as practicable by examinations, which so far as practicable shall be competitive.” By this provision of the Constitution it is provided that laws should he enacted to provide for the enforcement thereof. In the enforcement of this fundamental law, to somebody must be assigned the duty-of determining in what cases it is practicable to ascertain the qualifications for the office by competitive examination. That duty is primarily placed upon the executive branch .of the government, and by statute has devolved upon the Civil Service Commission. ' It is true that its determination cannot be arbitrarily made, but is subject to review by the courts. There is no doubt, however, as to the rule by which such review should be determined. It is clearly stated in the opinion' of Chief Judge CtjlleN in People ex rel. Schau v. McWilliams (185 N. Y. 100) in this language: “It seems to me that the cases cited indicate the true extent to which the court should assume to supervise the action of the civil service commission. If the' classification of the commission clearly ■ violates the Constitution or the statute, mandamus should issue to correct the classification. If the action of the commission is not palpably illegal the court should not intervene.” In the same case the chief judge states:.“Where the position is one, as to the proper mode of filling which there is a fair and reasonable ground for difference .of opinion among *665intelligent and conscientious officials, the action of the commission should stand, even though the courts may differ from the commission as to the wisdom of the classification.” If hy the determination of this Commission this office had been put in the competitive class of the civil service the able opinion of the learned judge at Special Term (Matter of Merritt v. Kraft, 71 Misc. Rep. 492) would furnish strong reason for approving such classification. It does not necessarily follow, however, when the Commission has determined that the ascertainment of the qualifications for this office hy competitive examination is not practicable, that its determination is “ palpably illegal.” For five years the position was classified as exempt, with the assumed approval of the different Comptrollers who were in office during that time. The request by Comptroller Williams that the offices he classified as competitive presents only his judgment as differing from those of the prior Comptrollers under whose incumbency the office was deemed properly exempt. These examiners. are in fact secret • service men. Their sole duties are of a detective nature, involving not only thorough knowledge of bookkeeping, hut a general commercial experience, which will enable them to. detect the many devices by which this law may be sought to be evaded.' Not only extensive business experience, but a keen acumen is a necessary qualification for the successful performance of duties which are unusually exacting. The competitive examinations provided for hy the Civil Service Law (Consol. ’Laws, chap. 7; Laws of 1909, chap. 15) are from the nature of the case made public by statute. To whatever conclusion the court would come, if invested with the primary duty of determining this question, in my judgment, in view of the exacting nature of the duties of the office and of the fact that for five years under different Comptrollers the position was deemed properly placed in the exempt class, it cannot be said that “intelligent and honest men might not differ” upon the question, or that the classification of the ■ Civil Service Commission was “palpably illegal.” In People ex rel. Sweet v. Lyman (157 N. Y. 368) it was held that a special agent in the Excise Department was as matter of law to be placed in the exempt class. The principal duties of these agents were detec*666tive duties, to ascertain whether the law had been violated, • • i) and while they were' given some further responsibilities which J apparently have not been given to these examiners, -nevérthé- y, \ less the decision throws light upon the question as to whether . \u.| it can be now held ¿s matter of law that the placing of these .\|j examiners in the exempt class,- with duties nearly analogous,..b u is a palpably erroneous classification by the. Commission. I -m recommend, therefore, that the order be reversed and motion denied, hut without costs. ...

All concurred, except‘Houghton, J., dissenting in opinion, in which Kellogg, J., concurred. .

Dissenting Opinion

Houghton, J.

(dissenting):

I do not think Chief Judge Cullen in his opinion in People ex rel. Schau v. McWilliams (185 N. Y. 92) intended to lay down the inflexible-rule'that the courts could not interfere , in . any classification by the Civil Service Commission unless .its.. act was palpably illegal as that term , is ordinarily understood. - All that was decided in that case was that the court haid made ■ a mistake in People ex rel. Sims v. Collier (175 N. Y. 196) .in - holding that certiorari was the .proper remedy for review of. classification. . The language employed in -the opinion was by way of justification for permitting a review through a writ of mandamus.

The Constitution (Art. 5, § 9) provides that appointments in the civil service of thé State shall' be made according to merit, and fitness, to be ascertained, so far as practicable, by examinations which, if practicable, shall be competitive. -Whether. fitness can be ascertained by a competitive examination- or whether the. position is or is not a confidential one involves the exercise of judgment and discretion- on the part of the Commissioners.

■It certainly is a part of. the duty of courts to ascertain in judicial proceedings whether or'not the constitutional law is violated, and it would seem on review of classification by the Civil Service Commission that it is proper for the. court ■ to ascertain whether such discretion has been abused" or whether such judgment has been erroneously exercised, Of course, if the strict rules applicable to the writ of mandamus are to be *667applied, the courts by such a writ can correct only absolutely illegal acts; they cannot interfere with an abuse of discretion or an improper exercise of judgment. Unless the right of the court is to be enlarged beyond the ordinary scope of a mandamus I cannot imagine a practical instance in which a court can review.and correct an abuse of discretion or the exercise of' even a palpably erroneous judgment on the part of the Civil Service Commission in placing a position in the competitive or non-competitive class. If the courts have no power over this exercise of discretion and judgment there is nothing to prevent. the Civil Service Commission, each time its personnel is-changed from determining that all classes of all employees in all departments of the State should be exempt from competitive examination and thus nullifying not only the statute law but the Constitution of the State., Every employee of every department of the State has some duty to perform which with one excuse or another can. be called confidential or special for the purpose of making it more desirable that the new head of a department shall have the right to choose who shall perform’ the duty rather than that he should be compelled to keep in office the one he finds holding the position. If the discretion exercised by the Civil Service Commission be arbitrary its arbitrariness does not make it illegal, and if its judgment be wrongly given the fact that such judgment is wrong does not necessarily make it illegal. The Civil Service Commission may, therefore, whenever its personnel changes or at any other time, exercise the most arbitrary discretion and make the most erroneous decisions with respect to classification and still its acts will not be “palpably illegal.”

If its acts can be reviewed by mandamus only when palpably illegal, the practical outcome will be that no act of classification by the Commission, however arbitrary or however wrong, .can be corrected by the courts, and if the Civil Service Commission chooses to do so it can make the Civil Service Law a mere farce.

■ Assuming, as I do, that the rule is that courts may review the erroneous exercise of discretion and judgment of the Commission in classification under a writ of mandamus, 1 see no justification for the reclassification which the Commission has *668toade.. An examiner of stock transfers in the Comptroller’s office is in no sense a detective or a secret service agent and cannot be made such. The State Comptroller is authorized to inquire into and ascertain whether the tax imposed by the provisions of law has been paid, and in order to ascertain this fact he is given power to examine certain books and papers of any person, firm or corporation. He cannot do this personally and is given power to appoint examiners. The examiner mnst necessarily have some knowledge and some sense, bnt his powers and his. duties are limited to the examination of books and papers for' the purpose of ascertaining whether the stamps have been affixed to the transfer of stock. He cannot force books to be produced which are refused and, therefore, he need not be necessarily strong of limb. It is no part of the Comptroller’s duty or of the examiner’s duty to shadow a broker. The law provides a remedy to compel the production of books and provides a means of punishing the crime of not affixing stamps to the transfer of stock, through either the Attorney-G-eneral’s office, or the local district attorney’s office. The Comptroller is not responsible for the non-collection of any tax and there is no justification for putting the examiners in the exempt class because of his personal responsibility. Nor is it any justification for the change that for a considerable-period these examiners were in the exempt class and were only recently put in the competitive class. If it is wise, as I assume it is, to put the very large proportion of the civil service list of the State in the competitive- class for the purpose of ensuring stable and efficient service and to prevent change for political reasons, I see not the slightest justification for transferring examiners of stock transfers from the competitive to the exempt class. Sugh a reclassification is entirely contrary to the spirit. of the Civil Service Law and if permitted to stand opens the door to its complete destruction.

I, therefore, vote for an affirmance of the order of the Special Term.

Kellogg, J., concurred.

Order reversed, without costs, and motion denied, without costs. .