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Anchor Brewing Co. v. Burns

32 A.D. 272 Court N.Y. App. Div. English

Delivered by *273 Cullen, J.:

Contents

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p. 272
Anchor Brewing Company, Appellant, v. Bernard Burns, Defendant, Impleaded with George Ringler & Co., Respondent.

Headnote

Liqum' tax certificate — assignment thereof in advance of its issue—right of a subsequent. assignee who advances the cost thereof— City Court of Yonkers — action therein, how regarded in view of its-want of equitable jurisdiction..
A brewing company which has advanced money to enable a person to' take out a liquor tax certificate foi' the year beginning May, 1896, and .to whom the licensee (the holder of the certificate) has given an assignment in the form of a chattel mortgage, by which he sells and assigns, “ the tax certificate issued to me * * * for the premises known as 48 St. Mary Street, Yonkers, N. Y., and also any and every renewal or subsequent license or tax certificate which may be hereafter issued to me * * * for said premises,” is not entitled to a liquor tax certificate issued .to the same person for the succeeding year beginning May, 1897, as against a party who has advanced the money necessary to secure such last-mentioned certificate and has taken an assignment thereof as security for the loan thus made.
Semble, that as the City Court of Yonkers has no jurisdiction of equitable actions, an action brought therein by the first assignee to recover the last-mentioned ' certificate must be regarded as an action at law in replevin, in which form of ■ action no recovery could be had, first, because the second certificate not being in existence at the time of the execution of .the chattel mortgage, that instrument created no lien thereon, but simply operated as a contract to give a lien, only effectual in equity as between the parties when the property came into existence,'provided no rights 'of creditors or innocent third parties intervened; ■ second, because the tax certificate being not a chattel, but a chose in action, the recovery of the paper itself would be of no advantage to the plaintiff, unless accompanied by an assignment thereof, which latter instrument the City Court of Yonkers could not compel the debtor to execute.
Appeal by the plaintiff, the Anchor Brewing Company, from a final judgment of the City Court of Yonkers in favor of the defendant George Ringler & Co., entered in the office of' the clerk of the City Court of Yonkers on the 3d day of May, 1898, upon the decision of the judge of the City Court .of Yonkers rendered after a trial at a term of said court before the court without a jury,, dismissing the plaintiff’s complaint upon the merits, and also from an. interlocutory judgment entered in said clerk’s office on the 15th day of January, 1898, overruling the plaintiff’s demurrer to the answer of the defendant George Ringler & Co.
1. J. Beaudrias, for the appellant.
F. X. Donoghue, for the respondent.

In April, 1896, the plaintiff lent the defendant .Burns $300, to enable the latter to take out a liquor tax certificate, and Burns executed an assignment to the plaintiff in the form of a chattel mortgage, whereby he sold and assigned “ the tax certificate issued to me * * * for the premises known as 48 St. Mary Street, Yonkers, N. Y., and also any , and every renewal, or subsequent license or tax certificate, which may be hereafter issued to me * * * for said premises.” This certificate expired in May, 1897. In April, 1897, the defendant Ringler & Co. lent Burns the sum of $350 to enable him to take out a new license for the year running from May, 1897, to May, 1898, and Burns assigned such certificate to the defendant Ringler & Co. as security for the loan. Burns paid neither the plaintiff nor Ringler & Co. In November, 1897, the plaintiff brought this action against the defendant Burns to recover possession of the liquor tax certificate for the year 1897 to 1898, or its Value ($150), in case return could not be had. On motion, Ringler & Co. were made parties defendant. The action was tried before the city judge of Yonkers without a jury, and from his decision in favor of the defendants this appeal is taken.

We are of the opinion that the action cannot be maintained. It is strictly an action at law in replevin, and must be considered as such, for the City Court of Yonkers has no jurisdiction of equitable actions. At the time of the execution of the mortgage by Burns to the plaintiff, the license, or tax certificate, for the year 1897 to 1898 was not in existence. The mortgage did not, at the time of its execution, create a lien on the certificate, because that was not in esse at most, it operated as a contract to give a lien. This is effectual in equity, as between the parties, when the property comes into existence and no rights of creditors or innocent third parties intervene. (Kribbs v. Alford, 120 N. Y. 519 ; Deeley v. Dwight, 132 id. 59.) We do not understand, however, that such a contract gives any legal title or lien, cognizable in a court of law, as the foundation of a cause of action (Hale v. Omaha National Bank, 49 N. Y. 626 ); though, unquestionably, it could be set up as a defense, since equitable defenses are, under the present system, admissible in legal actions. (McCaffrey v. Woodin, 65 N. Y. 459 .) In Hale v. Omaha National Bank, as in the present case, the lien

p. 274
sought to be enforced was on subsequently acquired property. . There Judge Allen said : “ Yery likely the action cannot be maintained as a common-law action of trover, although it is not necessary to pass upon that question. That action can only be brought by one having the legal title, either as a special or a general owner, one having the legal right to the possession.” But there is a further difficulty in .this case. The tax certificate is not a chattel but a chose inaction. (Niles v. Mathusa, 20 App. Div, 483 .) The recovery of the piece of paper on which the license is written would be of no advantage to the plaintiff. In its complaint it alleges a demand on the defendant Burns for an assignment of the .certificate and Burns’ refusal. The City Court of Yonkers has no power to compel Burns to execute any assignment. Therefore, even if an action of replevin would lie in the case of an equitable lien on a chattel, it cannot be maintained in the case of a chose in action.

We are further of opinion that the decision of the city judge was correct on the merits. Equity will only enforce a lien on -subsequently acquired property, where superior equities of third parties have not intervened. In this case as Ringler & Co. advanced the very money which paid for the tax license or certificate in suit, their equity was paramount to that of the plaintiff’s;

The judgment appealed from should be affirmed, with costs.

, All concurred, except Hatch, J., absent.

Judgment affirmed, with costs.

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