People ex rel. Rice v. Graves

• Decision Date: 21 January 1936
• Citation: 270 N.Y. 498,200 N.E. 288
• Parties: PEOPLE of the State of New York ex rel. Elmer L. RICE, Appellant, v. Mark GRAVES et al., as Tax Commissioners of the State of New York, Respondents.
• Court: New York Court of Appeals Court of Appeals

270 N.Y. 498

200 N.E. 288

PEOPLE of the State of New York ex rel. Elmer L. RICE, Appellant,

v.Mark GRAVES et al., as Tax Commissioners of the State of New York, Respondents.

Court of Appeals of New York.

Jan. 21, 1936.

Appeal, by permission, from a final order of the Appellate Division of the Supreme Court in the Third Judicial Department (242 App.Div. 128, 273 N.Y.S. 582), entered July 14, 1934, which unanimously confirmed on certiorari a final determination of the state tax commission assessing additional income taxes against the relator for the calendar years 1929, 1930, and 1931. During these years the relator was the author and owner of certain theatrical plays and also the copyright proprietor thereof under federal laws. On his income tax returns for these years the relator had entered, under ‘nontaxable income,’ sums derived by him from royalties on such copyrights. No tax was paid thereon upon the filing of the returns, nor was any tax demanded by the state of New York, because on May 14, 1928, the Supreme Court of the United States had affirmed a decision of the Supreme Court of Massachusetts holding that the states had no right to impose an income tax upon royalties from patents or copyrights. See Long v. Rockwood, 277 U.S. 142, 48 S.Ct. 463, 72 L.Ed. 824. On May 16, 1932, the Supreme Court of the United States, in Fox Film Corp. v. Doyal, 286 U.S. 123, 52 S. Ct. 546, 76 L.Ed. 1010, overruled its prior decision, and held that the income derived from copyrights was not immune from state taxation. On November 10, 1932, pursuant to section 373 of the Tax Law (Consol.Laws, c. 60), the tax commission effected a revision of the income tax returns of the relator and made assessments against him for the calendar years 1929, 1930, and 1931 of additional income taxes upon the amounts of income received by him in those years as royalties from his copyrights. The relator paid the additional assessments under protest, and then instituted the present proceeding to compel the state to refund the amount so paid. The Appellate Division held that the decision of the Supreme Court of the United States in the Fox Film Case was to be given a retroactive effect, except as to any possible vested rights or contracts acquired or made in reliance upon its decision in Long v. Rockwood, and that no claim was made by the relator that he had acquired any vested right or entered into any contract under the former decision, nor were any property rights...