In re Maltbie

• Decision Date: 02 April 1918
• Citation: 223 N.Y. 227,119 N.E. 389
• Parties: In re MALTBIE.
• Court: New York Court of Appeals Court of Appeals

223 N.Y. 227

119 N.E. 389

In re MALTBIE.

Court of Appeals of New York.

April 2, 1918.

Appeal from Supreme Court, Appellate Division, First Department.

Application by Milo R. Maltbie, as Chamberlain of the City of New York and County Treasurer of the County of New York, for an order examining the Lobsitz Mills Company in supplementary proceedings for the collection of a tax. From an order of the Appellate Division (179 App. Div. 395,165 N. Y. Supp. 550), affirming an order of the Special Term denying motion to vacate the order for the examination, under Tax Law, § 299, the Mills Company appeals. Reversed, and proceeding dismissed.

The Lobsitz Mills Company is a corporation organized under the laws of the state of New Jersey. It has filed a certificate and obtained authority to do business in this state. It is alleged that it is doing business in this state, and that it has an office for the transaction of business in the city of New York. In 1913 it was assessed ‘upon its capital invested in its business in the city of New York the sum of $10,000 for the purpose of taxation for the year 1914 as a nonresident of the state doing business in the state of New York.’ The assessment was subsequently confirmed by the board of taxes and assessments. The tax imposed thereon was $178, and became due and payable May 1, 1914. It was not paid. On January 15, 1915, a warrant was issued by the receiver of taxes for the collection of the tax, but it was returned wholly unsatisfied, and the tax, with interest thereon, remains wholly unpaid.

The chamberlain of the city of New York acting as the county treasurer of the county of New York applied to the Supreme Court for an order to examine said corporation in supplementary proceedings for the purpose of collecting the said tax. An order was made that said Lobsitz Mills Company appear as therein provided ‘and be examined under oath concerning its said invested capital.’ A motion was made to vacate said order, which was denied. An appeal was taken from the order entered thereon to the Appellate Division of the Supreme Court, and the order was unanimously affirmed. It thereupon granted leave to appeal to this court, and certified that in its opinion questions of law are involved which ought to be reviewed by the Court of Appeals. The questions so certified are as follows:

‘1. On the facts shown by the record herein did the Supreme Court of the state of New York have jurisdiction to grant the order dated December 19, 1916, for the examination of this nonresident corporation in supplementary proceedings pursuant to section 299 of the Tax Law of the state of New York?

‘(2) Do supplementary proceedings under section 299 of said Tax Law apply to the collection of taxes in the city of New York?’Henry B. Twombley, of New York City, for appellant Lobsitz mills co.

Wm. P. Burr, Corp. Counsel, of New York City (John P. O'Brien, of New York City, of counsel), for respondent.

Walter N. Seligsberg, of New York City, for Reliance Motion Picture Corp., intervener.

CHASE, J. (after stating the facts as above).

[1] To entitle a judgment creditor to maintain a proceeding supplementary to execution under the Code of Civil Procedure, the judgment upon which execution has been issued must have been rendered ‘upon the judgment debtor's appearance or personal service of the summons upon him, for a sum not less than twenty-five dollars or substituted service of the summons upon him in accordance with section 436 of the Code of Civil Procedure.’ Code Civ. Proc. § 2458.

The substituted service therein referred to is only permitted in certain cases upon ‘a domestic corporation, other than a municipal corporation, a joint-stock or other unincorporated association or a natural person, residing within the state.’ Code Civ. Proc. § 435.

A proceeding supplementary to execution cannot be sustained upon a foreign judgment or a judgment in rem. It must be a judgment by which the person of the judgment debtor is bound. The order to be obtained in the proceeding is one requiring the debtor ‘to attend and be examined concerning his property’ (section 2435), that the same may be applied in satisfaction of the judgment.

Section 299 of the Tax Law (Cons. Laws, ch. 60) provides:

‘If a tax exceeding ten dollars in amount levied against a person or corporation is returned by the proper collector uncollected for want of personal property out of which to collect the same, the supervisor of the town or ward, or the county treasurer or the president of the village, if it is a village tax, may, within one year thereafter, apply to the court for the institution of proceedings supplementary to execution as upon a judgment docketed in such county, for the purpose of collecting such tax and fees, with interest thereon from the fifteenth day of February after the levy thereof. Such proceedings may be taken against a corporation, and the same proceedings may thereupon be had in all respects for the collection of such tax as for the collection of a judgment by proceedings supplementary to execution thereon against a natural person, and the same costs and disbursements may be allowed against the person or corporation examined as in such supplementary proceedings but none shall be allowed in his or its favor. The tax, if collected in such proceeding, shall be paid to the county treasurer or to the supervisor of the town, and if a village tax, to the treasurer of the village.’

The tax mentioned in that section takes the place of the judgment and the return of the tax ‘uncollected for want of personal property out of which to collect the same,’ the place of the return of the execution by the sheriff wholly or partly unsatisfied as provided in the Code proceeding. The proceeding may be commenced under the Tax Law as therein provided, whereupon the proceeding is in all respects ‘as upon a judgment docketed in such county for the purpose of collecting such tax.’ Said section of the Tax Law also provides that:

‘Such proceedings may be taken against a...