#### The People ex rel. Cassius M. Lawton, Relator, *v.*Henry H. Lyman, as State Commissioner of Excise, et al., Respondents.

(Supreme Court, New York Special Term,

December, 1900.)

Liquor Tax Law — False statement of a convicted felon, that he is not within the prohibited class, makes his liquor tax certificate void, unassignable, and not entitled to rebate.

A person who pleaded guilty to receiving stolen goods, but as to whom sentence was suspended, must be deemed to have been “ convicted of a felony ” within the meaning of the Liquor Tax Law (L. 1896, ch. 112, § 23), and therefore where, in order subsequently to procure a liquor tax certificate, he swears that he is not within any of the classes prohibited by said section 23 from trafficking in liquors, the certificate issued to him, constituting a mere receipt for the tax, is void *al initio,*cannot be assigned and does not entitle a *mesne*assignee to surrender it and obtain a rebate for the unexpired term — and this although no steps have ever been taken to cancel the certificate or to recover the statutory penalties, and although more than thirty days have elapsed since the certificate was surrendered.

Motion for a peremptory writ of mandamus.

Page & EcHey, for relator.

Royal R. Scott, for respondent Henry H. Lyman.

H. H. Kellogg, for respondent Geo. Hilliard.

Freedman, J.

This is a motion for a peremptory writ of mandamus, directing the State Commissioner of Excise to prepare and transmit to the special deputy commissioner two orders for the payment of the rebate claimed to be due on liquor tax certificate No. 13,977, surrendered by the relator as assignee of one Charles A. Niven, and directing the special deputy commissioner to pay the amount covered by the orders.

The following facts are undisputed: On on about the 22d day of June, 1900, on application of one William J. Gilmartin, liquor tax certificate No. 13,977 was issued for the traffic in liquors at No. 209 West One Hundred and Twenty-fifth street, in the city *244of New York, under subdivision 1 of section 2 of the Liquor Tax Law.

On or about the 2d day of July, ,1900, William J. Gilmartin assigned such tax certificate to one Charles A. Niven, and Niven presented such certificate, with the petition for the transfer of the same, together with a new application and bond in form under the provisons of sections 17 and 18 of the Liquor Tax Law, to George Hilliard, as special deputy commissioner of excise for the boroughs of Manhattan and The Bronx, and the said Hilliard indorsed the usual consent for such transfer, and Niven paid the fee of ten dollars, as provided by section 27 of the Liquor Tax Law. Thereafter the said Niven transferred and set over to the relator, all of his right, title and interest in and to the rebate for the unearned portion of said liquor tax certificate, and authorized the special deputy commissioner of excise, or other proper officer, in the event of the surrender or cancellation at any time of said certificate, to pay over to said relator the amount of the rebate for the unexpired term thereof, and authorized the relator, or his attorney, to surrender said certificate for cancellation, and to execute, acknowledge and deliver all papers that might be necessary for the purpose of effecting such surrender.

On the 5th day of July, 1900, Niven voluntarily ceased to traffic in liquor under the said certificate, and it is conceded that, at that time, no prosecution or action was pending against him on account of any violation of the Liquor Tax Law.

On the date last mentioned, the certificate and a duly verified petition, setting forth all the facts required to- be shown on such application, and the assignment and power of attorney hereinbefore referred to were presented to the special tax commissioner of excise, and payment of the said rebate to the relator was demanded. No proceeding has ever been instituted for the cancellation of such certificate, nor has any action been commenced for any of the penalties imposed by the Liquor Tax Law, and more than thirty days have elapsed since the surrender of such certificate.

The State Commissioner of Excise has refused to prepare two orders for the payment of such rebate, as required by section 25 of the Liquor Tax Law, and the special deputy commissioner of excise has failed to deliver to the relator said orders, the reason being given therefor that William J. Gilmartin, the person to whom the certificate was issued, was tried and found guilty of *245receiving stolen goods, to the amount of $1,000, in the Court of General Sessions, held in and for the county of New York, on the 6th day of May, 1890, and that sentence was suspended at the time.

The State Commissioner of Excise, in opposition to the motion, bases his refusal to sign the necessary orders for the payment of the rebate upon two grounds.

1. That Gihnartin comes within the class prohibited from trafficking in liquors by section 23, subdivision 1 of the Liquor Tax Lav, by reason of his having been convicted of a felony, and that for that reason he acquired no rights under the tax certificate obtained by him which he could assign; and

2. That the alleged transfer of the tax certificate from Gilmartin to Niven was not *bona -fide*or for value.

In the application made by Gilmartin, for the purpose of obtaining the liquor tax certificate in question, he swore that he was not within any of the prohibited classes mentioned in section 23 of the Liquor Tax Law, or in other words, that he had never been convicted of a felony.

In the case of People ex rel. Einsfeld v. Murray, 149 N. Y. 367, it was held by the Court of Appeals that the Liquor Tax Law (Laws of 1896, chap. 112) is not a “ tax law ” in the proper sense, as it does not have for its primary purpose the raising of revenue for the support of the government; but that it is a law enacted under the police power, the exactions of which, although denominated taxes, are imposed for the primary purpose of regulating and controlling the liquor traffic, and that as such it is a general and constitutional State excise act. That being so, the courts have nothing to do with the policy or wisdom of the act, but must enforce it as they find it. Turning then to the act itself, including the amendments passed since the year 1896, it will be found upon a full examination of all of its provisions, that before the traffic in liquor becomes lawful under the act, a Hquor tax certificate authorizing such traffic must be obtained and posted, pursuant to section 21, but that the mere payment of the excise tax, of itself, affords no protection. Scalzo v. Sackett, 30 Misc. Rep. 543.

A liquor tax certificate is merely a receipt for money paid, and its real import is only that of a voucher for the money paid for the excise tax, because the right to engage in the traffic is derivable, not from the certificate, but from the statute, and from the state*246ments made in the application upon which the certificate is issued. Niles v. Mathusa, 162 N. Y. 546; affg. 20 App. Div. 483; affg. 19 Misc. Rep. 96; Matter of Barnard, 48 App. Div. 423; Lyman v. Swartz, 41 id. 624.

The procurement of the certificate depends not upon the favorable exercise of any officer’s discretion, but upon the applicant’s *prima facie*legal right to traffic in liquors as evidenced by the specifications of the application. If the application is correct in form and does not show on the face thereof that the applicant is prohibited from trafficking in liquor, under the subdivision of section 11 under which he applies, or at the place where the traffic is to be carried on, a liquor tax certificate must be issued thereon, pursuant to section 19. Such certificate is' issued upon the applicant’s representations that the statements made in such application are true. Matter of Bridge, 36 App. Div. 533; affg. 25 Misc. Rep. 213; Matter of Harper, 30 id. 663; Matter of Tonatio, 49 App. Div. 84.

And if any material statement so made is false, and the applicant is not entitled to traffic in liquor as specified in the application, the issuance of the certificate does not, as already shown, make the traffic in liquor thereunder lawful.

Nor is it material whether the applicant intended to deceive "the officer who issued the certificate or not, for his good faith avails him nothing if his statement is, in fact, untrue. Matter of Fall, 26 Misc. Rep. 611; affd., without opinion, 39 App. Div. 671; Matter of Harper, 30 Misc. Rep. 663.

The policy of the act throughout is to make everything depend upon the truth of the statement of the applicant contained in the required application, and to punish him in case he makes a false statement. The malting of a false statement is of itself a crime punishable under subdivision 2 of section 34. As a further but civil penalty, the liquor tax certificate issued upon the application, containing a false statement, may be revoked and canceled in a proceeding instituted under subdivision 2 of section 28.

The policy referred to has even been carried into the provision of the statute which authorizes the holder of a liquor tax certificate to surrender the same and to obtain a certain rebate. Section 25 of the act provides that “ If a person holding a liquor tax certificate and authorized to sell liquors under the provisions of this act * * * cease to traffic,” he may surrender the certificate and obtain the rebate.

*247Thus two things must concur; first, the person ceasing to traffic and applying for the rebate must hold a certificate and surrender it, and, second, he must be authorized to sell liquors under the provisions of the act, which means independently of the certificate, because the certificate, as already shown, is only a voucher for the money paid. The consequence is that if the applicant for the rebate, though holding and surrendering a certificate, belonged to the prohibited class defined by the statute when he obtained it, the certificate at all times was null and void and of no legal effect. That being so, even an assignee for value of such a certificate acquires no rights thereunder. The limitation or forfeiture of the rights of a certificate holder, in a liquor tax certificate, equally affects the rights of his assignees who take it subject to the conditions and restrictions with which the holding of the same by the assignor was vested. People ex rel. Miller v. Lyman, 156 N. Y. 407; affg. 27 App. Div. 527; Matter of Bradley, 22 Misc. Rep. 301; Matter of Lyman, 26 id. 300; Matter of Mitchell, 41 App. Div. 271.

For the reasons already stated it is not necessary to determine whether, in the case at bar, the alleged transfer of the certificate from Grilmartin to Niven was, or was not, *bona fide,*or for value, and .the only remaining, question is whether or not Grilmartin, on obtaining the certificate, made a material false statement in his application. He then and there swore that he was not within any of the prohibited classes mentioned in section 23 of the Liquor Tax Law. As matter of fact, it now appears that he had been indicted as a receiver of stolen goods, that he had pleaded guilty to such charge, and that his sentence had been suspended. If these facts amount to a .conviction, .lie clearly fell within the prohibited class, for section 23 of the Liquor Tax Law expressly provides that no person convicted of a ^felony shall be authorized to sell liquors.

The relator strenuously contends that a plea of guilty to an indictment followed by a suspension of sentence is not equivalent to a conviction.

I have carefully examined the authorities cited by the counsel for the relator in his brief upon this point, and am satisfied that they do not sustain his position. “ When it is said there has been a *‘*conviction,’ the meaning usually is, not that sentence has been pronounced, but only that the verdict has been returned.” 7 Am. *&*Eng. Ency. of Law (2d ed.), 497.

*248. *“*Conviction may accrue in two ways, either by his confessing the offense and pleading guilty or by his being found so by the verdict of his country.” 4 Black. Com. 362.

In People v. Goldstein, 32 Cal. 432, it was held that a plea of guilty, upon which no judgment was given, was nevertheless a conviction.

Even in the case, mainly relied upon by the relator, Mr. Justice Gray says: “ When the word *‘*conviction ’ is used to describe the effect of the guilt of the accused as judicially proved in one case, when pleaded or given in evidence in another, it is sometimes used in a more comprehensive sense, including the judgment of the court upon the verdict or confession of guilt; but the meaning of *conviction,’ when used to designate a particular stage of a criminal prosecution triable by a jury, is the confession of the accused in open court, or the verdict rendered against him by the jury, which ascertains and publishes the fact of his guilt; while *‘*judgment ’ or *‘*sentence ’ is the appropriate word to denote the action of the court before which the trial is had, declaring the consequences to the convict of the facts thus ascertained.” Commonwealth v. Lockwood, 109 Mass. 325. See, also, Matter of Friedrich, 51 Fed. Repr. 749.

In determining the strength of the relator’s position, the intent of the statute 'must also be taken into consideration.

The statute was intended to safeguard by law a traffic claimed to be conducive to pauperism and crime, to place it, so far as possible, in the hands of persons having, at least, a semblance of respectability, and free from the taint of criminality, and to control it by imposing severe penalties for violations of its provisions. In such a case I do not feel warranted in giving to the word *“*convicted ” an interpretation or construction which is not usually accorded to it.

Under the circumstances disclosed the conclusion is unavoidable that Gilmartin, a confessed felon with the sentence of the court suspended, who stood excluded from trafficking in liquors, by the express prohibition of the statute, and who obtained his liquor tax certificate by means of a false statement as to a material fact, is not entitled, either in person or by his assignees, to recover from the State the rebate, or other relief, asked for on this application.

The motion must be denied, with costs.

[Motion denied, with costs.