Court Opinion

ID: 6145475
Source: CourtListenerOpinion
Date Created: 2022-02-05 15:17:36.4574+00
Date Added: 2024-06-11T08:54:51.007351
License: Public Domain

Laughlin, J. (dissenting) :
The proceeding was instituted for the purpose of obtaining a peremptory writ of mandamus to compel the payment of a rebate on liquor tax certificate No. 3,563, issued to John Michels on the 29th day of April, 1898, by the Special Deputy Commissioner of Excise for the Boroughs of Manhattan and the Bronx. The liquor tax certificate authorized the trafficking in liquor at premises No. 2068 Amsterdam avenue, and was duly assigned to the relator, a domestic corporation, by Michels on- the 2d day of May, 1898, by an instrument in writing which authorized and empowered it as his attorney in fact to surrender the certificate for cancellation at any time and to obtain the rebate thereon. On the 1st day of March, 1899, the relator acting under said power of attorney, removed the cértificate from the place where it authorized trafficking in liquor, and as the agent and in the name of Michels surrendered the same to the Special Deputy Commissioner of Excise. A petition for the rebate .in the proper form, setting forth the facts required to be shown by section 25 of the Liquor Tax Law (Laws of 1896, cháp. 112, as ámd. by Laws of 1897, chap. 312) and, among other things, that the petitioner had voluntarily ceased to traffic in *627liquor, accompanied said surrender. Thereupon the relator received from said Special Deputy a receipt tor the payment oí the pro rata, rebate amount of the tax paid for the unexpired term of such certificate, as provided in said section. Another duplicate receipt, together with the certificate and petition, the assignment and power of attorney from Michels to the relator, were forwarded to the Commissioner of Excise.
The application for a writ of mandamus was originally noticed for the 5th day of July, 1899, upon an affidavit and exhibits annexed, showing these facts and that the Commissioner of Excise had refused to pay the rebate or to deliver to the relator two orders for the payment of the same, as prescribed in said section 25 of the Liquor Tax Law. The respondent presented in opposition to the motion affidavits denying the allegations of the moving papers to the effect that Michels voluntarily ceased to traffic in liquor, and that he had not been arrested or indicted for a violation of the Liquor Tax Law since the surrender of the certificate, and alleging that he had continued to traffic in liquor and had sold liquor on the licensed premises on the 9th day of March, 1899; that he had been indicted therefor, and that the indictment was pending and undetermined.
The motion for a peremptory writ was denied, but an alternative writ was granted. The alternative writ set forth substantially the same facts as were shown by the moving papers, and, among others, that Michels voluntarily ceased to traffic in liquor at the time of surrendering the certificate for cancellation, and that since surrendering the certificate he had not been arrested or indicted for violating the Liquor Tax Law, and that no proceeding had been" instituted for the cancellation of said certificate and no action had been commenced against him for penalties. The return denied that Michels had not been arrested or indicted as alleged and that he had voluntarily ceased to traffic in liquors, and alleged that he continued to traffic therein after the surrender of the certificate and made sales of liquor on the 9th day of March, 1899.
Upon the trial of the issues raised by the return to the alternative writ the relator put in evidence the petition accompanying the surrender of the liquor tax certificate, the certificate, the assignment thereof, and the receipt for the rebate and thereupon rested. This constituted the only evidence offered by either party. The court ruled that the burden was upon the relator to prove *628that Michels voluntarily ceased to traffic in liquor under the certificate, and directed a verdict making specific findings of fact in accordance with the allegations of the alternative writ, except that one of such findings was to the effect that Michels had not voluntarily ceased to traffic in liquor under the certificate for the term for which it was issued. To such ruling of the court, as to the burden of proof and to the direction of the verdict in the regard last specified the counsel for the relator duly excepted.
The verdict, as directed, finds that at the time the liquor tax certificate was surrendered for cancellation there was no complaint, prosecution or action pending on account of a violation of the Liquor Tax Law; that since its surrender Michels has neither been arrested nor indicted for a violation of the Liquor Tax Law, and that no proceedings have been instituted for the cancellation of the certificate; that no action has been commenced against him for penalties, and that after the lapse of thirty days from the surrender of the certificate and before the commencement of this proceeding, demand for the payment of said rebate was duly made on the respondent.
Inasmuch as the respondent did not move to set aside the verdict, but on the contrary, moved at Special Term for the dismissal of the proceeding upon the verdict, and has not appealed, the findings, at least so far as they are not challenged by the appellant, must be deemed conclusive. We are at liberty, however, to review the appellant’s exceptions to the rulings of the court as to the burden of proof and to the direction of a verdict adversely to him as to the cessation of traffic. (People ex rel. Coveney v. Kearney, 44 App. Div. 449; People ex rel. Boyd v. Hertle, 46 id. 505.)
The sole question for' determination is, therefore, whether the removal of a liquor tax certificate from the place of business where it authorized the trafficking in liquor by the person to whom it was issued, or his duly authorized agent, and the surrender thereof to the excise commissioner, or his deputy, in the form and manner prescribed by section 25 of the Liquor Tax Law, and the issue by the latter to the former holder of the certificate of a rebate except as prescribed by law, where at the time of such surrender there was no complaint, prosecution or action pending against the holder of the certificate for any violation of the Liquor Tax Law, is prima facie evidence that the holder of the certificate has voluntarily ceased to traffic in liquor. Upon the surrender of the certificate the authority of the licensee *629to traffic in liquor ceased. He had no more right thereafter to sell liquor than if the certificate had never been issued. (Lyman v. Cheever, 168 N. Y. 43.) The sale of liquor, without having a liquor tax certificate and without having it posted in the place where the liquor traffic is carried on, is not only prohibited by law but it is a crime. (Liquor Tax Law, §§11, 21, 31, 34, 42; Penal Code, § 3.) The presumption of innocence of crime prevails not only in criminal prosecutions but in civil actions as well. This presumption, in the absence of other evidence, not only forbade the finding made by the jury, but, in such circumstances, required a finding in favor of appellant. In this state of the record he was entitled to the presumption that he was not endeavoring to obtain the rebate fraudulently by pretending to have ceased trafficking in liquor and that he was not continuing the business in defiance of the law. (Korn v. Schedler, 11 Daly, 234; Grant v. Riley, 15 App. Div. 190, 192; Bayliss v. Cockcroft, 81 N. Y. 363; Matter of Fleming, 5 App. Div. 190; Hewlett v. Hewlett, 4 Edw. Ch. 7; Louisville, New Albany & Chicago Ry. Co. v. Thompson, Admr., 107 Ind. 442; Case v. Case, 17 Cal. 598; Best Ev. [Chamberl. 8th ed.] § 334; Lawson Presump. Ev. [2d ed.] 112.) There is an exception to the rule that innocence is presumed and that the party asserting the contrary must establish it by proof, in cases where no hardship will be imposed upon a party by requiring him to show, as by a license or otherwise, that he is relieved from a general inhibition of a statute. (Potter v. Deyo, 19 Wend. 361; People v. Nyce, 34 Hun, 298; People v. Cramer, 22 App. Div. 189.) The cases that fall within the exception are not applicable here. In those cases the act or conduct which is forbidden by the law is required to be shown, and it is incumbent upon the party affected to show, by license or otherwise, that he is exempted from the operation of the law. The case at bar has been tried upon the theory that the presumption is that appellant is guilty, and guilt has been found without the introduction of any evidence.
We do not consider these views in conflict with the decision of the Court of Appeals in People ex rel. Frank Brewery v. Cullinan (168 N. Y. 258). The question of burden of proof does not appear to have been considered by the court in that case. There the licensee was under arrest for' a violation of the Excise Law at the time he obtained the certificate and the prosecution was pending when the application was made for the rebate. The *630court held that the property right in the rebate does not attach where there is an arrest or indictment or other prosecution specified in the statute, pending at the time of the surrender of the certificate or within thirty days thereafter, and observed that the conditions specified in section 25 of the Liquor Tax Law, upon which the right to the rebate depended, are conditions precedent. The conditions discussed by the court related to the pendency of a criminal prosecution. The Legislature expressly required proof to be made on application for the rebate that there was no complaint, prosecution or action pending against the licensee on account of a violation of the Liquor Tax Law, and it may well be that where it becomes necessary to apply to the courts to collect the rebate after the lapse of thirty days, that it is incumbent on the applicant to show that he has not been arrested or indicted for a violation of the Liquor Tax Law and that proceedings have not been instituted for the cancellation of such certificate and that no action has been commenced against him for penalties. In order to prevent an erroneous or illegal-payment of rebates, it may be that these provisions of the statute should be construed as conditions precedent to be shown by the holder of the liquor tax certificate. It is eminently proper to require the licensee to inform the department and to show on an application to the court whether a proceeding, civil or criminal, has been instituted which may affect his right to the rebate. Proceedings of both classes might be instituted without the knowledge of the Excise Department. It is quite another thing, however, to hold that a licensee after surrendering his certificate • is presumed to have continued the business without authority and in defiance of the law, and that the burden is on him to establish innocence.
Authority for this requirement is attempted to be spelled out of the language of section 25 of the Liquor Tax Law relating to the voluntary cessation of liquor traffic. It is manifest that the object of the Legislature was not to require proof that the licensee had ceased to traffic in liquor, which would be sufficiently shown by the fact that he had taken down the liquor tax certificate and surrendered it for cancellation, and fhe fact that any further sales would render him liable to prosecution and pun, ishment, but that the prosecution was voluntary, as distinguished from duress of a criminal prosecution or a proceeding to forfeit the-certificate. This provision of the statute was, I think, merely *631designed to prevent the surrender of the certificate and the recovery of the rebate if a complaint, either civil or criminal, has been made and is pending against the holder of the certificate on account of a violation of the Liquor Tax Law which may result in a forfeiture of his right of recovery. The statute does not require the cessation of traffic for any particular length of time before surrendering the certificate, nor does it require the licensee to promise that he will not continue the business in the future. Until the very moment that he removes the certificate he is permitted to continue his business without cessation, or any evidence of his intention to cease traffic. It seems to me quite clear, therefore,. that the purpose of the statute was to require proof of the nature of the cessation rather than of the fact that the licensee had ceased to traffic.
I think that this construction of the statute is sustained by People ex rel. Brewing Co. v. Lyman (53 App. Div. 470). That was a proceeding similar to this, and the only evidence of a voluntary cessation of traffic was the surrender of the certificate and the issue of the receipt for the rebate. A preliminary objection specifically pointing out that there was nothing to show a voluntary cessation of traffic was overruled, and without further proof a peremptory writ requiring the payment of the rebate was granted. This ruling was sustained on appeal. It is proper to observe that we do not agree with appellant’s construction that proof of sales during the thirty days would be no defense, inasmuch as no action or proceeding, civil or criminal, affecting its right to the rebate was commenced or instituted during the thirty days succeeding the surrender of the certificate. The Court of Appeals has held otherwise. (People ex rel. Frank Brewery v. Cullinan, supra.)
I am of opinion that the order appealed from should be reversed, the verdict set aside and a new trial granted, with costs to appellant to abide the event.
Order affirmed, with costs.