Paramount Film Distributing Corp. v. State, No. 45976

CourtNew York Supreme Court Appellate Division
Writing for the CourtREYNOLDS; HERLIHY; HERLIHY
Citation279 N.Y.S.2d 781,27 A.D.2d 420
Docket NumberNo. 45976
Decision Date15 May 1967
PartiesPARAMOUNT FILM DISTRIBUTING CORP., Respondent, v. STATE of New York, Appellant. Claim

Page 781

279 N.Y.S.2d 781
27 A.D.2d 420
PARAMOUNT FILM DISTRIBUTING CORP., Respondent,
v.
STATE of New York, Appellant.
Claim No. 45976.
Supreme Court, Appellate Division, Third Department.
May 15, 1967.

[27 A.D.2d 421] Louis J. Lefkowitz, Atty. Gen., Albany (Ruth K. Toch, Sol. Gen., and Edwin R. Oberwager, Asst. Atty. Gen., Albany, of counsel), for appellant.

Leonard Kaufman, New York City (John R. Davison, Albany, of counsel), for claimant-respondent.

Before GIBSON, P.J., and HERLIHY, REYNOLDS, AULISI and STALEY, JJ.

Page 782

REYNOLDS, Justice.

This is an appeal from an order of the Court of Claims (Reuss, J.), denying the State's motion to dismiss the claim on the ground that it fails to state a cause of action or alternatively to dismiss that portion of the claim which relates to payments made before May 24, 1965 on the ground that the Court of Claims lacks jurisdiction.

On June 10, 1965, the Court of Appeals in Matter of Trans-Lux Distributing Corp. v. Board of Regents, 16 N.Y.2d 710, 261 N.Y.S.2d 903, 209 N.E.2d 558, held the movie licensing provisions of the Education Law (Education Law, § 120 et seq.) void as violative of the Fourteenth Amendment in accordance with the United States Supreme Court's reversal of an earlier Court of Appeals' decision upholding constitutionality (see, Matter of Trans-Lux Distributing Corp. v. Board of Regents, 14 N.Y.2d 88, 248 N.Y.S.2d 857, 198 N.E.2d 242, revd. 380 U.S. 259, 85 S.Ct. 952, 13 L.Ed.2d 959). On November 24, 1965, claimant filed a notice of intention to file a claim with the clerk of the Court of Claims and in December, 1965, claimant filed the instant claim seeking the refund of fees paid pursuant to the licensing provisions.

The State initially contends that the licensing fees were voluntarily paid without protest and thus should not be recoverable citing Mercury Mach. Imp. Corp. v. City of N.Y., 3 N.Y.2d 418, 165 N.Y.S.2d 517, 144 N.E.2d 400, and Adrico Realty Corp. v. City of N.Y., 250 N.Y. 29, 164 N.E. 732, 64 A.L.R. 1. Concededly no protest was made but there was no statutory requirement of payment under protest. In our opinion the case comes rather within the rationale of Five Boro Elec. Contractors Assn., Inc. v. City v. N.Y., 12 N.Y.2d 146, 237 N.Y.S.2d 315, 187 N.E.2d 774. There the Court of Appeals in upholding the right of New York City electricians to recover excess license fees, the imposition of which had been held unconstitutional, overcame the argument that the payments were voluntarily made stating:

[27 A.D.2d 422] 'We agree with Special Term and the Appellate Division that under the circumstances of this case protest was not required in view of the compulsory nature of the payment of these exorbitant license fees. We are aware of the repeated reference in the cases to duress existing 'where present liberty of person or immediate possession of needful goods is threatened by nonpayment of money exacted' (Mercury Mach. Importing Corp.

Page 783

v. City of New York, supra, 3 N.Y.2d pp. 425, 165 N.Y.S.2d 517, p. 520, 144 N.E.2d 400, p. 402; Peyser v. Mayor of City of N.Y., supra, 70 N.Y. 497) as well as the statement in Adrico Realty Corp. v. City of New York (supra) that this formula yields to the reason of other situations (250 N.Y. 29, 33, 164 N.E. 732, 733, 64 A.L.R. 1). Here we are not dealing with an illegal tax or impost to redress which some other remedy was available (e.g. Mercury Mach. Importing Corp. v. City of New York, supra; People v. Wilmerding, 136 N.Y. 363, 374, 32 N.E. 1099, 1102), but these electricians were placed in a situation where their only alternative was to submit to an illegal exaction or discontinue their businesses (Swift, etc., & Co. v. United States, 111 U.S. 22, 28, 4 S.Ct. 244, 28 L.Ed. 341). They were not allowed to operate without licenses, nor could their licenses be renewed except by payment of excessive fees. To be sure, the invalidity of this exaction was determined by declaratory judgment in the Adlerstein case (supra) (Adlerstein v. City of New York, 6 N.Y.2d 740, 185 N.Y.S.2d 821, 158 N.E.2d 512), but unless they had paid the excessive fees required for their licenses to do business they would have been prevented from earning a livelihood while that litigation was pending.' (12 N.Y.2d 149--150, 237 N.Y.S.2d 317, 187 N.E.2d 775--776.)

Here the claimant, as the electricians, had to pay the license fees to stay in business and did so solely for that reason. Thus the fees having been paid under duress and not voluntarily were recoverable.

As an alternative bar to the recovery sought, the State contends that since the claimant did not file its notice of claim within six months of its last payment, it did not comply with subdivision 4 of § 10 of the Court of Claims Act and is thus precluded from recovery under Guaranty Trust Co. of New York v. State, 299 N.Y. 295, 86 N.E.2d 754. In Guaranty the Court of Appeals stated:

'Taking the payments of the unemployment insurance contributions in question to have been illegally compelled, the Court of Claims said that 'claimant's cause of action arose immediately that it paid the tax.' (186 Misc. 676, 683, 62 N.Y.S.2d 309, 314.) Such contributions had been paid on October 11, 1939, and January 13, 1940, as we have noticed. It followed, therefore, that the claim had long been barred as the Court of Claims held.' (299 N.Y. at 300, 86 N.E.2d at 756.)

Thus the Court of Appeals clearly held that in Guaranty the cause of action accrued for the return of payments made pursuant to a void statute at the time such payments are made. Claimant urges that Guaranty should [27 A.D.2d 423] not be held...

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4 practice notes
  • Paramount Film Distributing Corp. v. State, No. 45976
    • United States
    • New York Supreme Court Appellate Division
    • 27 Julio 1971
    ...Previously this court affirmed the denial of a motion to dismiss the instant claim for failure to state a cause of action and lateness (27 A.D.2d 420, 279 N.Y.S.2d 781). The dissenting members of this court would now reverse the judgment and dismiss the claim on the basis that the Court of ......
  • Rye Psychiatric Hosp. Center, Inc. v. State, No. M-40656
    • United States
    • New York Court of Claims
    • 13 Noviembre 1989
    ...of a void statute. 6 An exception to Guaranty Trust, based on the decision in Paramount Film Distributing Corp. v. State of New York, 27 A.D.2d 420, 279 N.Y.S.2d 781, is mentioned in the Citibank decision. There is good reason to doubt the validity of this exception in view of subsequent de......
  • Red Apple Rest., Inc. v. State, No. 39675
    • United States
    • New York Supreme Court Appellate Division
    • 15 Mayo 1967
    ...standing alone. We agree with this latter finding and the judgment should be affirmed on that basis alone, there being no support in the [27 A.D.2d 420] record for the alternative theory of a single economic unit. The question of whether or not suitable access has been left or provided is a......
  • Broward County v. Mattel, No. 80-265
    • United States
    • Court of Appeal of Florida (US)
    • 29 Abril 1981
    ...294 P. 417 (1st Calif. DCA 1930); Harbeck v. Sioux City, 199 Iowa 763, 202 N.W. 507 (1925); Paramount Film Distributing Corp. v. State, 27 A.D.2d 420, 279 N.Y.S.2d 781 (1967); Manufacturer's Casualty Ins. Co. v. Kansas City, 330 S.W.2d 263 (Mo.App.1959); Crow v. City of Corpus Christi, 146 ......
4 cases
  • Paramount Film Distributing Corp. v. State, No. 45976
    • United States
    • New York Supreme Court Appellate Division
    • 27 Julio 1971
    ...Previously this court affirmed the denial of a motion to dismiss the instant claim for failure to state a cause of action and lateness (27 A.D.2d 420, 279 N.Y.S.2d 781). The dissenting members of this court would now reverse the judgment and dismiss the claim on the basis that the Court of ......
  • Rye Psychiatric Hosp. Center, Inc. v. State, No. M-40656
    • United States
    • New York Court of Claims
    • 13 Noviembre 1989
    ...of a void statute. 6 An exception to Guaranty Trust, based on the decision in Paramount Film Distributing Corp. v. State of New York, 27 A.D.2d 420, 279 N.Y.S.2d 781, is mentioned in the Citibank decision. There is good reason to doubt the validity of this exception in view of subsequent de......
  • Red Apple Rest., Inc. v. State, No. 39675
    • United States
    • New York Supreme Court Appellate Division
    • 15 Mayo 1967
    ...standing alone. We agree with this latter finding and the judgment should be affirmed on that basis alone, there being no support in the [27 A.D.2d 420] record for the alternative theory of a single economic unit. The question of whether or not suitable access has been left or provided is a......
  • Broward County v. Mattel, No. 80-265
    • United States
    • Court of Appeal of Florida (US)
    • 29 Abril 1981
    ...294 P. 417 (1st Calif. DCA 1930); Harbeck v. Sioux City, 199 Iowa 763, 202 N.W. 507 (1925); Paramount Film Distributing Corp. v. State, 27 A.D.2d 420, 279 N.Y.S.2d 781 (1967); Manufacturer's Casualty Ins. Co. v. Kansas City, 330 S.W.2d 263 (Mo.App.1959); Crow v. City of Corpus Christi, 146 ......

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