Case ID: ad_41/html/0271-01.html
Source: Caselaw Access Project
Author: {"author": "Willard Bartlett, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Petition of Harry W. Michell, Appellant, for an Order Revoking and Canceling Liquor Tax Certificate No. 10,203, Issued to Richard F. James, Respondent.
    
      Liquor tax certificate — a sale of liquor upon premises, from wliieh it has been removed by an assignee thereof, authorizes its cancellation, although it has already been transmitted to the Commissioner of Excise for surrender.
    
    The sale of liquor by the glass by a person managing a hotel, in the absence of the proprietor, at a time when the liquor tax certificate had been removed from the premises by a person to whom the proprietor had assigned it as security for a debt, authorizes the cancellation of the certificate under subdivision 2 of section 28 of the Liquor Tax Law (Laws of 1896, chap. 112, as amd. by Laws of 1897, chap. 312), notwithstanding the fact that six days before the sale of the liquor was made the assignee had transmitted the certificate to the State Commissioner of Excise for surrender.
    When a surrender of a certificate is authorized, considered.
    Appeal by the petitioner, Harry W. Michell, from an order of the Supreme Court, made at the. Kings County Special Term and entered in the office of the clerk of the county of Kings on the 21st day of February, 1899, denying his application for an order revoking and canceling the liquor tax certificate issued to the respondent.
    
      
      Alfred R. Page, for the appellant.
    
      Charles William Wright, for the respondent.
   Willard Bartlett, J.:

There is no dispute as to the facts of this ease, and in ray opinion they entitle the petitioner to an order revoking and canceling the respondent’s liquor tax certificate.

It is proved that liquor was sold by the glass at the respondent’s hotel, then in charge of his brother as his agent, when the certificate was nowhere on the premises, having been removed therefrom by a brewing company to which it had been assigned by the respondent as security for a debt.

The statute requires.,that the liquor tax certificate shall be posted up and at all times displayed in a conspicuous place in the room or bar where the traffic in liquors for which the tax was paid is carried on.” (Chap. 112, Laws of 1896, § 21, as amd. by chap. 312, Laws of 1897.) Section 42 provides, among other things, that any person who shall violate any of the provisions of section 21 (the section above quoted, which requires the certificate to be kept displayed) shall be liable to a penalty of fifty dollars, and that if he be the holder of a liquor tax certificate, such certificate shall be forfeited. Subdivision 2 of section 28 authorizes an application to the Supreme Court by any citizen of the State for an order revoking and cancelling a liquor tax certificate “ upon the ground that material statements in the application of the holder of such certificate were false, or that he Avas not entitled to receive, or is not entitled, on account of the violation of any provisions of this law, conviction for which would cause a forfeiture of such certificate, or for any other reason, to hold such certificate.”

From these provisions, it is apparent that the respondent’s failure to keep the certificate at all times displayed in the room or bar where he carried on the liquor traffic rendered the certificate liable to cancellation in a proceeding of this character. The acts of the respondent’s brother, who managed his hotel in his absence, must be deemed the acts of the respondent. The certificate was taken aivay by a corporation which held an assignment of the instrument from the respondent. The fact that this was done in his absence or without the consent of his agent does not affect his liability. He had placed it in the power of the assignee of the certificate to take it away, and if the assignee exercised that power he must bear the consequences. The sale of liquor by the brother was carried on notwithstanding the removal of the certificate. This was a violation of the law which subjected the certificate to forfeiture and cancellation.

Nor is it a valid objection to the maintenance of the proceeding that an application has been made (presumably by the brewing company as the assignee of the respondent) to surrender the certificate. On January 6, 1899, it was received by the State Commissioner of Excise, to whom it had been sent for surrender. The sale of liquor at the respondent’s hotel occurred on January 12,1899. Section 25 of the Liquor Tax Law, which relates to the surrender of certificates and the payment of rebates, provides in substance that if within thirty days from the receipt of the certificate by the State Commissioner of Excise, proceedings shall be instituted for its cancellation, the application in reference to its surrender shall not be granted until the final determination of the proceedings, and if the proceedings are determined adversely to the person defending the same, the certificate shall be canceled and all rebate thereon forfeited. This proceeding was instituted within the prescribed thirty days, and was, therefore, maintainable, notwithstanding the transmission of the certificate to the State Commissioner of Excise for surrender.

It is to be noted that the only persons or corporations possessing the privilege of such surrender under the Liquor Tax Law, are persons or corporations holding certificates and authorized to sell liquors under the provisions of the act, who shall voluntarily cease to traffic in liquors during the term for which the tax has, been paid. It would seem, therefore, that no valid application to surrender the certificate could have been made in the case at bar by the brewing company except in the name or in behalf of the respondent to whom the certificate had been issued, and the respondent was not entitled to surrender it because he had not ceased to carry on the liquor traffic. On the contrary, he insisted upon his right to continue it, notwithstanding that the brewing company had removed his certificate. The assignment was merely as security for an indebtedness, and conveyed to the assignee no right to engage in the liquor business; so that thé brewing company did not become a holder thereof authorized to sell liquors. Hence, it acquired no right to surrender the certificate except as the representative of the assignor, and in case the assignor had abandoned liquor selling. The brewing company took the certificate subject to the conditions under which the respondent held it, and tire brewing company’s right to have the surrender accepted and to receive the rebate was conditional upon the lapse of thirty days without any violation of the Liquor Tax Law by their assignor. (People ex rel. Miller v. Lyman, 156 N. Y. 407. See, also, the opinion of Chester, J., at Special Term, Matter of Lyman, 56 N. Y. Supp. 1020.)

It may be said that this construction of the law renders the assignee liable to be deprived of the security for his debt by the misconduct of his debtor subsequent to the transfer. That result, however, is due to the infirmity which the Legislature has attached to such property right as is represented by a liquor tax certificate. It is an infirmity which the courts have no power to cure.

The order appealed from should be reversed.

All concurred.

Order reversed, with ten dollars costs and disbursements, and application granted, with ten dollars costs.