27 A.D. 527

The People of the State of New York ex rel. Edwin G. S. Miller, Respondent, v. Henry H. Lyman, as State Commissioner of Excise of the State of New York, Appellant.

Liquor Tax Law effect of a violation of the law by one partner, aftvr an assign ment of the certificate as collateral to a loan, and the issue of a rebate tax certificate —1896,- chap. 113, § 3o, and 1897, chap. 813.

Where a liquor tax certificate, issued to a firm and assigned as security for a loan, is surrendered, and a rebate tax certificate is issued to the assignee, a violation of the Liquor Tax Law, by one member of the firm within thirty days thereafter, and before the rebate becomes due and payable, deprives the assignee of the right to the rebate.

*528Appeal by the defendant, Henry PI. Lyman, as State Commissioner of Excise of the State of New York, from an order of the Supreme Court, made at the Erie Special Term and entered in the office of. the clerk of the county of Erie on the 9th day of February, 1898, granting a peremptory writ of mandamus, requiring the State Commissioner of Excise to issue orders for the payment of $416.67 on account of the surrender of a liquor tax certificate issued to the relator’s assignors.

John G. Floss and Henry Stauber were partners, under the firm name of Floss & Stauber, and engaged in the' business of selling liquors at 359 Washington street, Buffalo. April 30-,' 1897, they executed an instrument to Edwin G. S.. Miller wherein it is recited that they had applied for a liquor tax certificate and that Miller had advanced money wherewith to pay for it,- and that in consideration thereof they assigned to him the certificate, with the right to collect all sums that might be due thereon upon its surrender.

May lj 1897, a liquor tax certificate, No. 11,985, was issued to Floss & Stauber, authorizing them to sell liquors at 359 Washington street, Buffalo, for which'they paid $500. July 1, 1897, Floss & Stauber, through Miller,, applied to the deputy. commissioner of excise for Erie county for leave to surrender the tax certificate and have the proportionate part (five-sixths), $416.67, of the amount paid for the certificate refunded, and on that day he issued the duplicate receipts provided for by the Both section of the Liquor Tax Law. (Laws of 1896, chap. 112, as amended by chap. 312 of the Laws of 1897.) .

July 19, 1897, Henry Stauber was indicted in Erie county for having, on July 11, 1897, violated the Liquor Tax Law. July 21, 1897, he was arrested, and July twenty-ninth he was arraigned on the indictment and pleaded not guilty.

When this proceeding was begun, December 17, 1897, Stauber had not been tried on the indictment.

Royal R. Scott, for the appellant.

Tracy C. Becker, for the respondent..

Follett, J.:

But a single question is presented on this appeal. In case a liquor tax certificate issued to a firm and assigned as security for a loan is *529surrendered, and a rebate tax certificate issued to the assignee, does the violation of the Liquor Tax Law by one of the firm within thirty days thereafter, and before the rebate becomes due and payable, deprive the assignee of the right to the rebate?

Two kinds of assignments of liquor tax certificates are authorized : (.1) An absolute sale of a certificate as provided for by the 27th section of the act, which authorizes the assignee to carry on the business which his assignor was authorized to carry on, provided the assignee makes a new application, gives a bond, and the'assignment is approved by the officer who issued the tax certificate. (2) An assignment of a certificate as collateral security (People v. Durante, 19 App. Div. 292; Niles v. Mathusa, 20 id. 483; Koehler & Son Co. v. Flebbe, 21 id. 210), under which the assignee is not authorized to carry on the business in the place of the person to whom the certificate was issued who continues to carry it on in the same manner as before the assignment was made.

. The assignment in the case at bar is the second kind. .

The right of a person under a certificate is prescribed by the‘statute under which it is issued, and whoever acquires an interest therein takes it subject to the provisions of the statute, among which provisions is one that if a person to whom a certificate is issued, is adjudged to have violated the statute, the certificate becomes null and void, and all- right to surrender the same and receive the rebate ie lost. No exception is made in favor of an assignee, who takes the certificate subject to all the restrictions and conditions of the statute.

By the 25th section it is provided that in case a certificate is surrendered, and a rebate tax receipt is issued, and within thirty days thereafter the person to whom the tax certificate was issued violates the provisions of the act, all right' to the rebate is forfeited; and it is further provided by the same section that, in case a prosecution is begun within thirty days, the right to the rebate shall, be suspended until the prosecution is determined, and if decided in favor of the licensee the rebate is to be paid, but if against him the right is lost.

It cannot, I think, be successfully contended that in case a certificate is issued to a firm and one member is adjudged guilty of violating the statute, the certificate remains valid in the hands of the firm *530and it has a right to the rebate. Were this the rule, one member oí ’a firm could violate the statute at will, and so long as. both did not, 'the right of the firm to the' certificate and rebate would be perfect, and the object of the statute,, which is to secure: an observance of the 'law, would be defeated. Such was not the purpose of the statute. Violations of the law, by a member of-a firm, have the same effect on the-certificate and upon the right to receive payment on rebate •receipts as violations by all the partners; and it maltes no difference 'whether such violations are committed before or within thirty days after the certificate is surrendered, and the rebate receipt given. In either case, the right of the firm to the rebate is gone, as is also the 'right of an assignee, who takes his assignment with .notice of all the provisions, of the statute, and he is not protected by the; fact that he has not personally violated the statute.

The order is reversed, with costs, and the writ dismissed, with fifty dollars costs.

All concurred.

Order reversed, with costs, and- the writ dismissed,- with fifty doL •lore costs.. ' ' ' '' ' "

People ex rel. Miller v. Lyman
27 A.D. 527

Case Details

Name
People ex rel. Miller v. Lyman
Decision Date
Jan 1, 1970
Citations

27 A.D. 527

Jurisdiction
New York

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