Cullinan v. Fidelity & Casualty Co.

Ingraham, J.:

This action is brought on a-bond given by the defendant Parker as principal and the appellant as surety to obtain a liquor tax certificate authorizing the principal to traffic in liquors in the city of New York.- By the bond, Frank L. Parker, as principal, and the Fidelity and Casualty Company of New York, as surety, “ are held and firmly bound unto the People of the State of New York in tike penal sum of Sixteen Hundred. Dollars ; ” the bond .then recites that the principal was about to apply for a liquor tax certificate authorizing. said -principal to traffic in liquors at 121, 123, 125 West Thirty-ninth street and 1418 Broadway, in the city of JSTew York, under subdivision 1 of section 11 of the Liquor Tax Law, and the condition of the obligation was such that if the said liquor tax certificate “ applied for is given unto the said principal, and the said principal will not, while the business for which such Liquor Tax Certificate is given shall be carried on, suffer or permit any gambling to be done in the place designated by the Liquor Tax Certificate in which the traffic in liquors is to be carried on, or in any yard, booth, garden or any other place appertaining thereto or connected therewith, or suffer or permit such premises to become disorderly, and will not violate any of the provisions of the Liquor Tax Law, or any act amendatory thereof or supplementary thereto, and the said principal will pay all fines and penalties incurred or imposed for violation of the Liquor Tax Law and any judgment or judgments recovered or entered against the said principal for or on account of any such violation of said law, together with all costs taxed or allowed in any action or proceeding brought or instituted under the provisions of said Liquor Tax Law, then the above obligation to be void.”

The complaint alleges that the defendant Parker applied for a liquor tax certificate for the traffic in liquor by him under the provisions of subdivision 1 of section 11 of the Liquor Tax Law (Laws of 1896, chap. 112, as amd. by Laws of 1897, chap. 312) for and during the excise year beginning May 1, 1901; that simultaneously with the filing of said application statement, for the purpose of securing the issuance to him of the liquor tax certificate applied for, the defendant Parker presented to and filed with the Special Deputy Commissioner of Excise this bond, as required by the provisions of section 18 of the Liquor Tax Law (as amd. by Laws of 1897, chap 312), duly executed by the defendant; that upon the receipt of this application and bond a certificate for the traffic in liquors was issued to the said Parker, and the said Parker was the owner and holder of the said liquor tax certificate, and was carrying on the business for which such certificate was given at said premises. It further alleged that the defendant Parker, on the 20th, 21st, 25th and 27th days of March, 1902, and on the 2d day of April, 1902, did suffer and permit the said premises designated in said liquor tax certificate as those in which the traffic in liquors was to be carried, to become, be and remain disorderly, and during all of said period did carry on and permit to be carried on, and was interested in a traffic and business the carrying of which was and is in violation of law ; that on Sunday, January 12, 1902, the 27th day of March, 1902, and on the 2d of April, 1902, the defendant Parker, by himself, his agents, servants and bartenders, trafficked in liquors by selling liquor in quantity of less than five wine gallons, which was then and there drunk on the. said premises^ and alleges other violations of the Liquor Tax Law.

The defendant admits the execution and delivery of the bond and ' denies the other allegations of the complaint.

Upon the trial the issuance of the certificate was conceded. The bond and the application for the liquor tax certificate were produced and introduced in evidence. It was also proved that there was no transfer of that certificate during the • time it was in force up to April 30, 1902; that there was no surrender of such certificate under section 25 of the Liquor Tax Law (as amd. by Laws of 1900, chap. 367), and that this liquor tax certificate stood in the name of the defendant Parker during the entire excise year. A police officer testified that he went to Parker’s place of business with another officer on the 20th of March, 1902; that he also visited the premises on the 21st, 25th and 27th of March and the 2d of April, 1902; that on the twentieth of March he walked into the dining room, sat down at the table and ordered refreshments ; that he saw a number of women sitting there, several of whom. the witness knew to'' be street walkers; that while sitting-there one of the women came over and spoke to the witness, sat down at the table and agreed to meet the two officers after they were through eating; that On the twenty-first day of March, around eleven-thirty p. m., he again visited the restaurant, ordered something to eat, and after a few moments was solicited by a woman; that the woman said she had the proprietor’s permission to take men to her room; that she then passed out of the dining, room to the elevator with the witness and up to room 109, and was let in by a colored woman who was, apparently, an employee of the hotel; that on the twenty-fifth he returned to the hotel With another officer when this woman to whose room he went on the previous visit came over and brought with her a companion when the witness and his associate went upstairs with the two women to their rooms; that on the second of April, at about one-thirty or one-thirty-five A. m. in the morning, the witness with another officer went to this hotel, sat down at the table and ordered two glasses of whisky which were received and paid for, and the officer then placed the proprietor under arrest for a violation of the Liquor Tax Law; that at the times the witness went to the restaurant he saw women in the place, apparently living there; that when a man would come in and sit down at a table the women would go to the table and get into conversation with him; that on the morning of March twenty-seventh there were from twenty to thirty-five men and women present, and on April second between thirty and forty ; that during this time the door leading into the restaurant or dining room was open. The testimony of this witness was corroborated by other officers. During this time the liquor tax certificate issued in the name of the defendant Parker was exposed in the barroom.

On behalf of the defendant Parker testified that in April, 1901, he took out this liquor tax certificate; that he continued to conduct the place until about the 1st of September, 1901; that about September 1,1901, he made a verbal transfer-of that business to a man named Colonel Fortune; that the witness was in ill-health and turned the business over to Fortune; that after that the defendant left and had nothing more to do with the business; that when he left he did nothing- with reference to the liquor tax certificate, and that he never authorized Colonel Fortune to use that certificate or to sell liquor under it, never authorized any one to sell liquor at the place in question after September 1, 1901. The cashier and bookkeeper of this hotel testified that Parker was proprietor of the place until about the 1st of September, 1901, when Colonel Fortune took possession of the place; that Fortune remained in possession until the 10th of October, 1901', and on the tenth of October one A. E. Ruehl came in; that shortly after Fortune left the hotel entirely, turning over the possession of the place to Ruehl on October tenth; that after that Ruehl paid the bills and hired the help; and this condition existed until May, 1902. Ruehl testified that he took possession of these premises on October tenth in the interest of the Ruehl Hotel Company, a corporation, under a verbal agreement with Colonel Fortune by which Ruehl was to pay his liabilities and give him for three months a room and board in the' house, and Ruelil was to take charge of the place, take in the receipts and pay the expenses; that on and after the 12th of January, 1902, the Riiehl Hotel Company was managing the premises, and the defendant Parker had nothing whatever to do with the place, and had no contract or arrangement of any kind with Ruelil or said company by which he was interested in it.

Upon- this evidence the plaintiff moved for -the direction of a verdict and the .defendant moved for a dismissal of the complaint. The court denied the defendant’s motion and granted the plaintiff’s motion, and directed a .verdict for the plaintiff for the amount of the bond.

There was no request to submit any question to the jury. It Was not disputed but that this evidence was sufficient to sustain a verdict that the place was a disorderly place within the provisions of the bond ; and the only question presented is whether- the fact that the defendant Parker had surrendered the premises prior to the -time at which .the offense Was committed relieved the surety on the-bond. The bond recites the application for a liquor tax certificate under subdivision 1 of section 11 of the Liquor Tax Law (Laws of 1896, chap. 112, as amd. by Laws of 1897, chap. 312). The condition of the obligation is not that -the principal would not maintain a disorderly house upon the premises, but that the principal would not “ suffer or permit such premises to become disorderly.” If he did suffer or permit the premises to become disorderly then the obligation was to be in full force and effect. The fact that the principal withdrew from the actual management of the business without surrendering the certificate, or transferring it to' his successor, would not relieve either of the obligprs from liability to the State. The intention of providing a bond is clearly to prevent the premises, during the period that the certificate is in force, from being used for an illegal purpose; and that object would be rendered nugatory if the parties to it could escape liability upon proof that-the principal on the bond, who had assumed, the responsibility of preventing the place from being used for illegal purposes, could withdraw from active participation in the business* leaving his transferees or subordinates to maintain the place in violation of the law under the certificate obtained by the "execution-of the bond. I think that the obligation assumed by the principal and surety is that as long as liquors are sold under the authority of the certificate, the principal shall see to it that the premises upon which the liquors are sold are not used for illegal purposes. The defendants were, therefore, clearly liable, and the court correctly directed a verdict for the plaintiff.

It follows that the judgment and order appealed from should be affirmed, with costs.

Patterson, O’Brien, Hatch and Laughlin, JJ., cpncurred.

Judgment and order affirmed, with costs.