
    Fourth Appellate Department,
    April, 1900.
    Reported. 51 App. Div. 52.
    In the Matter of the Petition of Henry H. Lyman, as State Commissioner of Excise, Respondent, for an Order Revoking and Canceling Liquor Tax Certificate No. 11,843, Issued to Charles G. Speidel, Appellant.
    Liquor tax certificate—Failure to answer a question in an application therefor—It and not the certificate determines the rights of the applicant—Certificate canceled, although already surrendered—The duties of the officers issuing the certificate are ministerial.
    An application for a liquor tax certificate made under section 17 of the Liquor Tax Law (Laws of 1896, chap. 112, as amended by Laws of 1897, chap. 312), which contains an affirmative answer to the question whether the applicant intends “to carry on a tona fide hotel on such premises,” but fails to answer the question whether the premises “meet the requirements of section thirty-one of said law as to hotels,” justifies, when the premises do not, in fact, meet with the requirements of that section, the cancellation of the certificate and a forfeiture of all rebate due thereon.
    The fact that proceedings for a cancellation of the certificate are not instituted until after the applicant, upon learning that the Excise Department had discovered that the premises did not comply with the law, has surrendered the certificate and demanded the rebate for the unexpired term, does not prevent the cancellation of the certificate.
    The failure of the applicant to answer the question is not excused by the lack of vigilance, if any, of the officer who issued the certificate.
    
      Semble, that the duties of a deputy commissioner of excise or county treasurer in issuing a liquor tax certificate are ministerial in their nature. They can not refuse a certificate if the petition therefor shows that the" applicant is entitled thereto under any provision of the act.
    
      Semble, that the rights and obligations of a holder of a liquor tax ■certificate are derived from the statements of the applicant in his petition therefor and not from the certificate.
    Laughlot, ,T., dissented.
    Appeal by Charles G. Speidel from an order of the Supreme Court, made at the Brie Special Term and entered in the office of the clerk of the county of Erie on the 21st day of December, 1899. ■canceling liquor tax certificate lío. 11,813, issued to him.
    
      Moses Shire, for the appellant.
    
      Mead & Stranahan, for the respondent.
   Spring, J.

This proceeding was instituted October 22, 1899, by the State Excise Commissioner, but as a citizen of the State, pursuant to subdivision 2, section 28 of the Liquor Tax Law (Laws of 1896, chap. 112, as amd. by Laws of 1897, chap. 312), to revoke and cancel a liquor tax certificate issued to the defendant May 18, 1899. The defendant on that day presented to the Deputy State Excise Commissioner his application, and that officer issued to him the certificate, and thereafter he carried on a hotel at 395 Ellicott street in the city of Buffalo until October second, when he voluntarily surrendered the certificate and sought the repayment of the rebate for its unexpired term.

The defendant answered question lío. 25 of his application, if he intended “ to carry on a tona -fide hotel on such premises,” in the affirmative. The next question, lío. 26, was if" such hotel premises “meet the requirements of section Thirty-one of said law as to hotels,” and this was not answered. The pith of the-attack upon the certificate is that the omission to answer this question affirmatively was in effect a false statement of a material fact. Section 31 defines what constitutes a hotel, prescribing the minimum number of rooms permitted, their construction, etc. Hence, the fact sought by that question is one-of the essential requirements of the Liquor Tax Law pertaining; to hotels, and the materiality of the omission is very significant.

Section 25 of the law, as amended by the act of 1897, permits the holder of a certificate, whose record is clear, to surrender the same to the officer who issued it and to receive the rebate or unearned value of the certificate for the full months it has to-run. This rebate is paid by the State Excise Commissioner and", is based upon the surrendered certificate, the petition for its cancellation and the duplicate receipt of the officer to whom such-petition was made. The State Excise Commissioner does not repay at once. If within thirty days from the date of the receipt of the certificate by the State Commissioner the holder is-arrested or indicted for a violation of this law, or if proceedings-are instituted for the cancellation of such certificate within that period, the petition asking for the rebate snail not be granted' until the final determination of such proceedings,” and if determined adversely to the petitioner, the certificate shall be can-celled and all rebate thereon shall be forfeited.”

It is obvious, therefore, that the holder of a certificate who, it" has been judicially determined, has violated the law, cannot surrender the same and obtain the. rebate. Whether he is attacked while openly engaged in its violation or within thirty days after-notice of its surrender has been received by the department, its-, forfeiture follows its cancellation as the result of legal proceedings. This is essential to a wholesome execution of the law.. Otherwise, the holder of a certificate who is flagrantly engaged in transgressing the law, if he surmises that he is to be proceeded against, could surrender his certificate and receive his rebate. If, however, the attack is made while he is carrying on the traffic-the forfeiture would follow. There is no such inconsistency in the statute. That is well illustrated in this case. About the 27th of September, 1899, agents of the Excise Department called at the defendant’s alleged hotel and made measurements of the rooms therein. It was patent that the hotel did not comply with the law. The defendant evidently understood that fact and" probably realized this action; presaged this proceeding at the instance of the deputy. To circumvent this and to insure the repayment of the rebate for the unexpired term, he surrendered his certificate for cancellation and demanded the rebate.

It is contended that the deputy excise commissioner in issuing the certificate was derelict in his duty, but that the certificate is a protection to the defendant nevertheless.

Section 17 of the law requires that the person desiring a certificate shall “ prepare and make ” upon a blank furnished therefor, a statement “ signed and sworn to by such applicant ” containing the facts which are set forth at large in that section. Subdivision 9 of section 17, as amended in 1897, provides that if the applicant intends to carry on the traffic in a hotel his application must show “that all the requirements of .section thirty-one hereof, defining hotels, have been complied with.” That is, these statements are preliminaries which must precede the granting of a certificate. The knowledge of the facts is with the applicant and the affirmative duty is with him to set them forth fully in his statement. He asks a privilege; the granting of that privilege depends upon certain facts which he must state and verify under oath; if he fails to do that he transgresses the law, even though the certificate has been issued to him.

It does not follow necessarily that the deputy commissioner of excise was delinquent in granting the certificate. By section 11 the excise taxes are divided into six grades. Subdivision 1 provides for the business of trafficking in liquors in a hotel, restaurant, saloon, etc. The tax imposed is the same under this subdivision whether the traffic is carried on in a saloon or in connection with a hotel. There is, in fact, no variation in the amount of the tax in this subdivision. The form of the certificate is also identical. (§20.) They all come within one grade. «If the statement shows the applicant is entitled to a certificate, either as a hotelkeeper, saloon keeper or in a restaurant, the officer is obliged to issue it and it does not disclose in what capacity the traffic is to be carried on. So far as the certificate is concerned it is applicable to any one of the places enumerated in this subdivision. The deputy excise commissioner or county treasurer is not charged with the duty of discriminating one business from another, but must issue the certificate if the applicant shows' he is entitled to it at all under this subdivision. This official’s duties .are ministerial. They are specifically defined in the statute.' He has no discretion. . The petition is the basis for an attack upon the holder of the certificate. If the petitioner has applied for permission to traffic in liquor in a saloon he can not sell in a hotel. While the price and the form of the certificate are the same there are restrictions imposed and privileges accorded the possession of that license. If he disregards his petition and then sells in a hotel he does so in violation of the law and is amenable to punishment. The reason for this is not that he is violating the terms of his certificate but that he is selling contrary to the statements in his application.

In the application in this case the defendant said in answer to question No. 8 that he intended to carry on a hotel. He reiterated this in No. 25, but omitted answering the inquiry that his hotel complied with all the requirements of section 31 which in precise terms is made obligatory in subdivision 9 of section 17, as amended in 1897. He then carried on a hotel which did not comply with that section. His failure to answer question No. 26-would be unimportant if his hotel complied with the law, or if he ran a saloon. When, however, that failure is emphasized by the fact that he is running a hotel which does not meet the requirements of the law it becomes significant. He carried on the traffic in liquor in the hotel under false pretenses. He is responsible for omitting to state the crucial facts entitling him. to sell liquor in a hotel, and he can not excuse his misconduct by the lack of vigilance, if any existed, of the officer who issued the certificate.

It is to be remembered, also, that this law is primarily a tax. measure; that the holder of a certificate is assessed for the-privilege granted him. While the certificate is of value its real import is a voucher for the money paid. The specific rights and' obligations under the law are derivable from the statements of the applicant and not from the certificate.

The order is affirmed, with costs.

McLennan and Williams, JJ., concurred; Adams, P. J., concurred in result in a memorandum; Laughlin, J., dissented in-memorandum.

Adams, P. J. (concurring) :

Had the appellant answered the 26tli question in the affirmative his answer would have been false and the revocation of his tax certificate would follow as a natural consequence. On the other hand, had his answer been in the negative he would not have been entitled to receive such a certificate. The question, therefore, which presents itself is, whether by omitting to answer the question at all he shall be permitted to secure to himself a privilege which he could not have secured had he made any answer to that inquiry.

It is perfectly obvious that at the time the certificate was applied for the premises in which the appellant carried on his hotel did not, nor do they now, meet the requirements of section 31 of the Liquor Tax Law (Laws of 1896, chap. Í12). This was something of which he must necessarily have been aware, and although there is no finding to that effect, the conclusion is. irresistible that his omission to answer question 26 was not accidental, but was an intentional evasion, designed to mislead the special deputy commissioner of excise. It was therefore, a fraud upon that official, and however negligent he may have been in not. discovering the omission, the appellant should not be permitted to profit by his fraudulent act. For this reason I favor an affirmance of the order appealed from.

Laughlin, J. (dissenting) :

The liquor tax certificate in question was voluntarily surrendered and delivered to the Commissioner of Excise prior to the commencement of this proceeding. The sole object of the proceeding is, therefore, to deprive the appellant of the rebate of the tax paid for the unexpired part of the excise year. The only issue presented by the petition, as amended by the order of the court which was made on consent, and the answer, is whether the appellant made a false statement in answering question 26 contained in his application. It was shown and is conceded that no answer to the question was written in the application or otherwise expressly made. It is claimed that the mere presentation of the petition showing an intention to keep a hotel, with this questioned unanswered, constitutes an answer to the question in the affirmative by implication. The same form of application is used by saloon and hotel keepers, but question 26 need not be answered where the applicant only intends to conduct a saloon. I deem the view that such an application constitutes by implication an affirmative ansAver to question 26 erroneous, and consider the conclusion therefrom that the applicant made a false statement in his application unwarranted.

The other questions discussed in the prevailing opinion are not, I think, presented by the record.

Order affirmed, with costs.  