In re Farley

• Decision Date: 25 January 1916
• Citation: 111 N.E. 479,217 N.Y. 105
• Parties: In re FARLEY, State Excise Com'r.
• Court: New York Court of Appeals Court of Appeals

217 N.Y. 105

111 N.E. 479

In re FARLEY, State Excise Com'r.

Court of Appeals of New York.

Jan. 25, 1916.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Petition by William W. Farley, as State Commissioner of Excise, to revoke a liquor tax certificate transferred to Joseph Wurz. From an order (164 App. Div. 967, 149 N.Y. Supp. 1080) granting the petition, Wurz appeals. Order reversed, and case remanded.

Timothy Curtin, of Utica, for appellant.

Louis M. King, of Schenectady, for respondent.

CARDOZO, J.

The proceeding is one to revoke a liquor tax certificate. In October.1912, a license to traffic in liquors during the year ending September 30, 1913, was granted to one Russ. On March 14, 1913, he applied for the transfer of his certificate to the appellant Wurz, and on his statement that he had not violated any of the provisions of the Liquor Tax Law, the transfer was made. The truth is that on the same day he was indicted for using the licensed building as a disorderly house. Penal Law (Consol Laws, c. 40) § 1146. In the following June, he was convicted of that crime. On September 27, 1913, three days before the term of the certificate expired, this proceeding was begun. Matter of Farley v. Barrick, 214 N.Y. 212, 108 N.E. 417.

At the outset, the petition is attacked as insufficient. Its statement in substance is that Russ, while the holder of the license, kept and maintained the building as a house of ill fame. Such an offense committed before the assignment of the certificate would justify its revocation as against the assignee. Matter of Cullinan, 104 App. Div. 205, 93 N.Y. Supp. 492;Id., 185 N.Y. 546, 77 N.E. 1184;Matter of Farley, 151 App. Div. 456, 135 N.Y. Supp. 869; Liquor Tax Law (Consol, Laws, ch. 34) § 26. The criticism of the petition is that its allegations are on information and belief, and that there is no sufficient statement of the sources of the petitioner's information or the grounds of his belief.

[1] We think that, after a trial upon the merits, this objection to the form of the petition does not require the dismissal of the proceeding. A petition in these proceedings has a twofold function. It has a function as a pleading, and it has a function as evidence. Matter of Clement v. Cohen, 116 App. Div. 148, 152, 101 N.Y. Supp. 683. We held in Peck v. Cargill, 167 N.Y. 391, 60 N.E. 775, 53 L.R.A. 888, that it did not discharge this latter function where its allegations were made upon information and belief, unless there was a sufficient statement of the sources of information and the grounds of belief. See, also, erratum note to Peck v. Cargill, in 168 N.Y. on page before table of cases. We likened the proceeding to an application for an attachment, and our ruling was that, even though the holder of the certificate made default, evidence was necessary to justify a forfeiture. This evidence might be supplied by supporting affidavits of witnesses who spoke of their own knowledge. It might be supplied, as upon applications for attachments or injunctions, by appropriate statements of the sources of the petitioner's information and the grounds of his belief. Matter of Farley v. Noar, 212 N.Y. 299, 106 N.E. 57. But averments on information and belief, without more, though sufficient as a pleading when made by a party (Code Civ. Proc. § 526), have no value as evidence. Hoormann v. Climax Cycle Co., 9 App. Div. 579, 585, 41 N.Y. Supp. 710.

This conclusion was thought to be the more necessary, because the order to show cause, which initiates such a proceeding, must contain an injunction restraining the transfer or surrender of the certificate until the proceeding has been terminated. Liquor Tax Law, § 27, subd. 2. That injunction is not to be confused with an injunction restraining the continuance of the business, which the statute says is not to be granted where the petition is on information and belief, unless there is also an affidavit “containing positive averments made by witnesses having personal knowledge.” This provision came into the statute for the first time by an amendment adopted in May, 1901, while the case of Peck v. Cargill, supra, was under consideration by this court. Laws 1901, c. 640. The injunction restraining the transfer of the certificates, unlike one restraining the continuance of the business, does not require affidavits upon positive knowledge, but it does require a statement of the sources of information and the grounds of belief. Our ruling in Peck v. Cargill, supra, was based, therefore, upon the need of evidence to justify relief, either provisional or final. When the opinions in later cases (Matter of Plass, 71 App. Div. 488, 76 N.Y. Supp. 2;Id., 175 N.Y. 524, 67 N.E. 1089;Matter of Farley, 212 N.Y. 299, 106 N.E. 57), are confined to the actual decisions, they are seen to hold nothing to the contrary.

We are confronted in this case with a very different problem. As evidence the petition may have been defective because of the sparse statement of the sources of information, but as a pleading it was adequate. It apprised the appellant of the offense that was charged, even though, standing alone, it did not prove the offense. The appellant filed an answer, the case was tried upon the merits, and the pleading has now been supplemented by evidence. In such a situation, to nullify the order because the petition, though adequate as a pleading, was inadequate as proof, would be to...