Citizens Brewing Corp. v. Lighthall

Kellogg, P. J. (dissenting):

The Liquor Tax Law creates certain property rights in a liquor tax certificate, and those rights are always subject to the provisions of that law. If we assume that the certificate is issued by a public official as a ministerial act, and that he must grant a certificate if the papers are regular, although a prior certificate exists as to the same premises, it must follow, where the quota of certificates in a city is full, that the second certificate is subject to all rights which the law gives to the first certificate and its holder. Recognizing that fact, the Commissioner of Excise, when a second certificate is issued for the same premises, notifies the applicant of the existence of the prior certificate. Such notice was given in this case. The holder of a certificate, upon complying with the law, has an absolute right to abandon the traffic at the place for which the certificate is issued and transfer it to another eligible place. (Liquor Tax Law, § 25.) The owner of a saloon property, by renting it and permitting the lessee to obtain a certificate in his own name, puts it in the power of the lessee to close the traffic of liquors at that place and transfer it to another place. (Matter of Farley [Bales Certificate], 154 App. Div. 282; affd., 208 N. Y. 595; Matter of Farley [Vorndran Certificate], 170 App. Div. 400; Matter of Marshall v. Green, 97 Misc. Rep. 492; affd. on opinion of Shearn, J., 175 App. Div. 938; 161 N. Y. Supp. 1134.) The statute itself indicates clearly that the owner of the ordinary saloon premises has no voice in the matter whether or not the certificate shall be transferred from his premises to another place. It expressly provides that in the case of certain hotels the owner of the certificated premises, and the certificate holder, must execute the notice, and then provides that in all other cases the notice shall be executed by the *27certificate holder and his assignee. (See, also, § 8, subd. 9, added by Laws of 1910, chap. 494, as amd. by Laws of 1915, chap. 654.)

The rights of the landlords, McEniry Brothers, of the second certificate holder, Lighthall, and of Penrose & McEniry, the brewing company, Lighthall’s assignee, are, therefore, subject to all the legal rights which accrued to the plaintiff as the owner of the former certificate. While it is true that the assignee of a certificate cannot engage in the liquor traffic without complying with the provisions of the law, nevertheless, upon complying with such provisions, he may continue the traffic (§ 26) or transfer it elsewhere (§ 25). The plaintiff held the certificate as security, and also had an irrevocable power of attorney from the holder authorizing him to sell or surrender the certificate or transfer it to other premises, the same as in Matter of Farley [Bales Certificate] (supra). On October thirty-first at four p. m. the certificate was delivered to the plaintiff for the purpose of having it transferred to other premises, and on the first day of November at eleven o’clock a. m. the plaintiff presented the certificate with the necessary papers to abandon the old place and transfer it to another place. In the meantime, on November first at nine-forty-five a. m. a certificate had been issued to Lighthall, and under the rules of the department in such a case the official refused to consent to the transfer without the consent of Lighthall. Clearly the first certificate was in force at the time Lighthall made his application, and his rights at all times were subject to the rights of the first certificate holder. The fact that liquor traffic stopped at the premises at four o’clock p. m. October thirty-first and the certificate was then removed for the purpose of transferring it to other premises did not invalidate the certificate or forfeit any rights of the certificate holder. Subdivision 9 of section 8 of the áct provides that the notice of abandonment may be filed at any time during the unexpired term, but within sixty days thereafter a certificate must be obtained for the new place and traffic begun, and that while said notice remains in force no liquor tax certificate shall be issued for the place abandoned, and it shall be unlawful to traffic in liquors thereat unless a certificate shall be transferred to that place. In order to make *28effectual a transfer the certificate must be removed from the old place and brought before the public official for his consent to the transfer. It cannot be, therefore, that the removal of the certificate from the first place renders it ineffectual, or deprives the owner of the right to transfer it, especially where the removal itself is made for the purpose of a transfer.

Undoubtedly the Lighthall certificate was applied for and issued as a scheme on the part of Lighthall, the plumber; McEniry Brothers, the landlords; Jagielo, the bartender, and Penrose & McEniry, the brewers, to deprive the plaintiff of the right to transfer its first certificate to other premises, but it cannot have that effect. It is manifest that while the liquor traffic continues at these premises under the Lighthall certificate, the plaintiff’s certificate has no substantial value for the purpose of sale, or transfer elsewhere. And while the complaint is not a model, it sufficiently appears from it and from the affidavits that the defendants by a- trick are trying to deprive the plaintiff of the value of its property and are interfering with its right to sell or transfer its certificate to other premises. A court of equity, therefore, has the right to grant the relief asked, and it is proper during the continuance of the action to stop the traffic, which is unauthorized so far as the plaintiff is concerned, and to impound the certificate, so that when the action is decided all questions under these certificates may end. If the plaintiff had filed a notice to abandon the traffic at this place and transfer it elsewhere before the Light-hall certificate was issued, it is clear that it could by certiorari compel the official to consent to the transfer. (People ex rel. Young v. Shults, 167 App. Div. 33.) But the Lighthall certificate having been issued before the notice was filed, the plaintiff should not be thrown out of a court of equity and be compelled to resort to that uncertain remedy. I favor an affirmance of the order.

Cochrane, J., concurred.

Order reversed, with costs, and motion for injunction denied, with ten dollars costs, .