Case Name: The People of the State of New York ex rel. Michael Seitz, Appellant, v. Henry H. Lyman, as State Commissioner of Excise of the State of New York, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1901-03
Citations: 2 Liquor Tax Rep. 468
Docket Number: 
Parties: The People of the State of New York ex rel. Michael Seitz, Appellant, v. Henry H. Lyman, as State Commissioner of Excise of the State of New York, Respondent.
Judges: 
Reporter: Liquor Tax Law Reports
Volume: 2
Pages: 468–471

Head Matter:
Second Appellate Department,
March, 1901.
Reported. 59 App. Dlv. 172.
The People of the State of New York ex rel. Michael Seitz, Appellant, v. Henry H. Lyman, as State Commissioner of Excise of the State of New York, Respondent.
Liquor tax certificate—A rebate not allowed when an indictment is pending for a violation of the law under another certificate.
Under section 25 of the Liquor Tax Law (Laws of 1896, chap. 112, as amended by Laws of 1897, chap. 312), relating to the surrender of liquor tax certificates and the payment of rebates thereon, an assignee of a certificate who has surrendered the same is not entitled to the payment of the rebate due thereon if there is pending, undetermined, an indictment against the person to whom the certificate was issued for a violation of the Liquor Tax Law while trafficking in liquors under another certificate.
Appeal by the relator, Michael Seitz, 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 16th day of August, 1900, denying his motion for an alternative writ of mandamus directed to Henry H. Lyman, as State Com missioner of Excise, requiring Mm to prepare two orders for the payment to the relator of a rebate on a liquor tax certificate.
John A. Kamping, for the appellant.
P. W. Cullinan, for the respondent.

Opinion:
Sewell, J.
On or about the 29th day of April, 1898, a liquor tax certificate was issued to one John Warnock, authorizing him to traffic in liquors at 411 Hamilton avenue, Brooklyn. Thereafter the said Warnock assigned the certificate to the relator, who surrendered the same and demanded payment of the rebate claimed to be due thereon. The State Commissioner declined to issue an order for the payment of the rebate on the ground that Warnock had been arrested and indicted for a violation of the Liquor Tax Law, and that such indictment was pending and undetermined.
Section 25 of the Liquor Tax Law (Laws of 1896, chap. 112, as amd. by Laws of 1897, chap. 312), which relates to the surrender of certificates and the payment of rebates, provides that "If a corporation, association, copartnership or person holding a liquor tax certificate and authorized to sell liquors under the provisions of this act, against which or whom no complaint, prosecution or action is pending on account of any violation thereof, shall voluntarily and before arrest or indictment for a violation of the liquor tax law, cease to traffic in liquors during the term for which the tax is paid under such certificate, such corporation, association, copartnership or person, or their duly authorized attorney, may surrender such tax certificate to the officer who issued the same or to his successor in office and-at the same time shall present to such officer a verified petition setting forth all facts required to be shown upon such application."
The statute then directs the officer to compute the rebate, execute duplicate receipts and deliver one to the person entitled thereto, and to transmit the other, with the surrendered certificate and the petition for cancellation to the Commissioner of Excise, and further provides that " If within thirty days from the date of the receipt of such certificate by the State Commissioner of Excise, the person surrendering such certificate shall be arrested or indicted for a violation of the liquor tax law, or proceedings shall be instituted for the cancellation of such certificate, or an action shall be commenced against him for penalties, such petition shall not be granted until the final determination of such proceedings or action, and if the said petitioner be convicted or said action or proceedings be determined against him, said certificate shall be cancelled and all rebate thereon shall be forfeited."
It appears by the petition in this proceeding that on the 9th day of April, 1897, the said John Warnock was arrested and indicted for an alleged violation of the Liquor Tax Law on the 3d day of May, 1896, while trafficking in liquors at 89 Prospect avenue under another certificate; but it also set forth that at the time of the surrender of the certificate by the relator and the presentation of the petition no complaint, prosecution or action was pending, on account of any violation of the Liquor Tax Law, against the said John Warnock on account of or for the period covered by the certificate surrendered, nor on account of any violation which occurred upon the premises No. 411 Hamilton avenue.
It must be conceded that the relator took the certificate subject to all the conditions which attended the ownership of his assignor (Matter of Michell, 41 App. Div. 271), and the question is, therefore, presented whether a person who has been arrested and indicted for a violation of the statute while trafficking in liquors under one certificate is entitled to a rebate upon the surrender of a subsequent certificate before the final determination of the indictment.
The privilege conferred by the certificate is a property right, but it is subject to restrictions and conditions, and is one the holder can forfeit. (Matter of Lyman, 160 N. Y. 96.) Section 34 of the act (as amd. by Laws of 1897, chap. 312) defines the cases when the certificate is forfeited and provides that upon a conviction for a violation of the provisions of this act the holder of the certificate shall be punished by fine or imprisonment, and in addition thereto shall forfeit the liquor tax certificate and be deprived of all rights and privileges thereunder, and of any right to a rebate of any portion of the tax paid thereon.
Section 42 provides that " If judgment be recovered against the holder of a liquor tax certificate in any action for penalties, such judgment shall provide, in addition to the penalties included therein, that such certificate and all rights thereunder of the holder thereof, including all rebate moneys upon cancellation, be forfeited."
From these provisions of the statute it will be observed that a forfeiture of the certificate and of the right to a rebate follows the judgment as part of the penalty for any infraction of the law, and that this forfeiture is no more restricted or limited to the term of the certificate than the fine and imprisonment.
The violation of the statute is the ground for an indictment and an action, and it is quite clear that the Legislature intended that a judgment should be operative after another certificate has been issued.
Section 25, permitting a person against whom no complaint, prosecution or action is pending, to surrender his certificate and obtain a rebate before arrest and indictment, is in harmony with the plain intention of the Legislature to secure a proper observance of the provisions of the law as expressed in these sections providing for penalties and forfeitures. The language of this section is unmistakable. It only permits the holder of a liquor tax certificate against whom no complaint, prosecution or action is pending, to surrender it and obtain a rebate, and it in terms provides that this must be before arrest or indictment.
The learned judge was clearly right in his view of this question. This disability is not confined by the statute to a violation during the term of the certificate to be surrendered, and a surrender or rebate can be applied for only upon a petition showing that no complaint, action or prosecution based upon any violation of the statute is pending.
The order appealed from was right and should be affirmed, with costs.
All concurred.
Order affirmed, with ten dollars costs and disbursements,