Legum v. Goldin — 55 N.Y.2d 104

Majority

p. 104

In the Matter of Steven G. Legum, Appellant, v Harrison J. Goldin, as Comptroller of the City of New York, et al., Respondents.

Argued January 12, 1982;

decided February 16, 1982

p. 105

POINTS OF COUNSEL

Steven G. Legum, appellant pro se.

I. Appellant, a nonresident city employee, has standing to challenge section 822 of the New York City Charter. (Boryszewski v Brydges, 37 NY2d 361 ; Society of Plastics Ind. v City of New York, 68 Misc 2d 366 ; Lee v Nyquist, 318 F Supp 710 ; Mandelkern v City of Buffalo, 92 Misc 2d 425 ; United States v Herrera, 584 F2d 1137 ; Matter of Donohue v Cornelius, 17 NY2d 390 ; Schieffelin v Komfort, 212 NY 520 ; Matter of New York Times Co. [Newspaper Guild of N. Y. Local 3, C.I.O.], 2 AD2d 31 ; Wein v Carey, 41 NY2d 498 .) II. Since section 822 of the New York City Charter is in conflict with and in violation of the laws and Constitution of the State of New York, it is illegal and unconstitutional and should be declared void. (Franklin Soc. for Home Bldg. & Sav. v Bennett, 282 NY 79 , 309 US 640 ; United States v Butler, 297 US 1 ; Jewish Reconstructionist Synagogue of North Shore v Incorporated Vil. of Roslyn Harbor, 40 NY2d 158 ; Matter of Hanson v Griffiths, 204 Misc 736 , 283 App Div 662 ; Matter of Joslin v Regan, 63 AD2d 466 , 48 NY2d 746 ; Mobil Oil Corp. v Town of Huntington, 85 Misc 2d 800 ; People v Brooklyn Garden Apts., 283 NY 373 ; Genet v City of Brooklyn, 99 NY 296 ; Gautier v Ditmar, 204 NY 20 ; County Securities v Seacord, 278 NY 34 .)

Allen G. Schwartz, Corporation Counsel (June A. Witterschein, Leonard Koerner and Ira L. Blankstein of counsel), for respondents.

I. Section 822 constitutes a valid and reasonable exercise by the city of its power to regulate the compensation of its employees. It does not impose a tax, but rather requires a voluntary agreement to pay the required amount as a condition precedent to employment. (Matter of Rhinelander, 290 NY 31 ; Mandelkern v City of Buffalo, 64

p. 106

AD2d 279 ; Matter of Maye v Lindsay, 69 Misc 2d 276 , 41 AD2d 127 , 33 NY2d 552 , 414 US 1069 ; Matter of Long Is. R. R. Co. v Hylan, 240 NY 199 ; 8200 Realty Corp. v Lindsay, 60 Misc 2d 248 , 34 AD2d 79 , 27 NY2d 124 ; Lane County v Oregon, 7 Wall [74 US] 71; City of New York v McLean, 170 NY 374 ; Wise v Wedlake, 217 App Div 210 ; Carson v Brockton Sewerage Comm., 182 US 398 ; Central Sav. Bank v City of New York, 279 NY 266 , 280 NY 9 , 306 US 661 .) II. Section 822 does not violate State law requirements for collective bargaining. (Board of Educ. v Associated Teachers of Huntington, 30 NY2d 122 ; Matter of Niagara Wheatfield Administrators Assn. [Niagara Wheatfield Cent. School Dist.], 44 NY2d 68 ; Matter of New York City School Bds. Assn. v Board of Educ., 39 NY2d 111 ; Board of Educ. v Areman, 41 NY2d 527 .)

OPINION OF THE COURT

The issue raised by this appeal is whether section 822 of the New York City Charter imposes an income tax on nonresident employees of the city.

That section requires that “every person seeking employment with the city of New York or any of its agencies * * * sign an agreement as a condition precedent to such employment to the effect that if he is or becomes a nonresident *** he will pay to the city an amount by which a city personal income tax on residents computed and determined as if he were a resident individual * * * exceeds the amount of any city earnings tax and city personal income tax imposed on him for the same taxable period.”

By this article 78 proceeding, petitioner seeks to challenge the validity of that section of the New York City Charter and the validity of the contract provision by which he agreed to make such payments. Steven Legum, the petitioner, was employed by the Law Department of the City of New York from February 2,1976 until his resignation became effective August 1, 1980. He concedes that throughout this period he was a nonresident of the City of New York as that term is defined by section T46-6.0 of the Administrative Code of the City of New York. It is similarly conceded by the petitioner that he was advised of the

p. 107

contractual provision required by section 822 of the City Charter and that by signing his contract of employment he agreed to its provisions. Petitioner was notified by memorandum in December, 1978 that his department intended to enforce this contractual provision and that failure to comply with the applicable regulations would lead to disciplinary action including dismissal. In response, petitioner brought this action challenging the validity of both the contractual provision and section 822 of the New York City Charter.

It is the contention of the petitioner that payments made under the contract provision required by section 822, although denominated “condition of employment payments”, are essentially payments of a tax imposed by the city. Since the city has no authority to impose such a tax on nonresidents, petitioner argues, both the contractual provision and section 822 of the City Charter are invalid.

Petitioner’s argument confuses the fundamental distinction between a tax imposed by the sovereign and a contractual provision agreed to by two parties. We have said that “[t]axes, unlike debts, are not contractual, but are enforced contributions levied by the authority of the state for the support of its government and other public needs. *** The citizen owes to the government the duty to pay taxes, so that the latter may be enabled to perform its functions, and he thus receives his proper compensation in the protection which the government affords to his life, liberty and property.” (City of New York v McLean, 170 NY 374 , 387.) The Supreme Court of the United States has similarly interpreted a tax as “‘an impost levied by authority of government upon its citizens, or subjects, for the support of the State. It is not founded on contract or agreement. It operates in invitum (Lane County v Oregon, 74 US 71 , 80.) This court has also recognized the involuntary nature of a tax stating that a tax “operates in invitum and is in no way dependent upon the will or contract, express or implied, of the persons taxed.” (Central Sav. Bank v City of New York, 279 NY 266 , 280.)

The facts of this case do not present a situation in which the city has exercised its sovereign authority to impose a tax on petitioner without his consent, but instead presents

p. 108

a situation in which petitioner agreed by contract to pay a certain amount to his employer, the City of New York. Petitioner makes no allegation that his agreement to this contractual provision was a result of either fraud or duress. Having freely agreed to this contract of employment, petitioner incurred liability pursuant to the contractual provision in question and enjoyed the benefits of the other provisions of the contract. The mere fact that the debt incurred pursuant to the contract of employment is owed to the City of New York does not transform it into a tax. (Central Sav. Bank v City of New York, 279 NY 266 , 280, supra; Carson v Brockton Sewerage Comm., 182 US 398 , 403.) The test is not to whom the funds are paid, but whether the payment is imposed in invitum by the sovereign or is owed pursuant to a contractual agreement voluntarily entered into. It is clear beyond cavil that the payments due to the City of New York are owed as a result of the contract entered into by the petitioner with the city and not as a result of an exercise by the city of its taxing authority.

We have considered petitioner’s other arguments and find them without merit.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Cooke and Judges Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur.

Order affirmed.

Cases cited

Boryszewski v. Brydges 37 NY2d 361 N.Y. 1975-07-02 p. 105
Society of the Plastics Industry, Inc. v. City of New York 68 Misc 2d 366 N.Y. Sup. Ct. 1971-11-11 p. 105
Mandelkern v. City of Buffalo 92 Misc 2d 425 N.Y. Sup. Ct. 1977-11-28 p. 105
Donohue v. Cornelius 17 NY2d 390 N.Y. 1966-06-09 p. 105
Schieffelin v. Valentine Komfort 212 NY 520 N.Y. 1914-10-23 p. 105
In re the Arbitration between New York Times Co. & Newspaper Guild of New York, Local 3 2 AD2d 31 N.Y. App. Div. 1956-06-26 p. 105
Franklin Society for Home Building & Savings v. Bennett 282 NY 79 N.Y. 1939-12-28 p. 105
United States v. Butler 297 US 1 SCOTUS 1936-01-06 p. 105
Jewish Reconstructionist Synagogue of North Shore, Inc. v. Incorporated Village of Roslyn Harbor 40 NY2d 158 N.Y. 1976-06-15 p. 105
Hanson v. Griffiths 204 Misc 736 N.Y. Sup. Ct. 1953-08-24 p. 105
Joslin v. Regan 63 AD2d 466 N.Y. App. Div. 1978-07-13 p. 105
Joslin v. Regan 48 NY2d 746 N.Y. 1979-10-25 p. 105
Mobil Oil Corp. v. Town of Huntington 85 Misc 2d 800 N.Y. Sup. Ct. 1975-11-07 p. 105
People v. Brooklyn Garden Apartments, Inc. 283 NY 373 N.Y. 1940-07-24 p. 105
Genet v. City of Brooklyn 99 NY 296 N.Y. 1885-06-09 p. 105
Gautier v. Ditmar 204 NY 20 N.Y. 1912-01-09 p. 105
County Securities, Inc. v. Seacord 278 NY 34 N.Y. 1938-05-24 p. 105
In re the Accounting of Rhinelander 290 NY 31 N.Y. 1943-03-04 p. 105
Maye v. Lindsay 69 Misc 2d 276 N.Y. Sup. Ct. 1972-03-06 p. 106
Maye v. Lindsay 41 AD2d 127 N.Y. App. Div. 1973-03-08 p. 106
Maye v. Lindsay 33 NY2d 552 N.Y. 1973-07-02 p. 106
Long Island Railroad v. Hylan 240 NY 199 N.Y. 1925-05-05 p. 106
8200 Realty Corp. v. Lindsay 60 Misc 2d 248 N.Y. Sup. Ct. 1969-08-27 p. 106
8200 Realty Corp. v. Lindsay 34 AD2d 79 N.Y. App. Div. 1970-04-09 p. 106
8200 Realty Corp. v. Lindsay 27 NY2d 124 N.Y. 1970-07-01 p. 106
City of New York v. McLean 170 NY 374 N.Y. 1902-04-01 at 387 p. 106, p. 107
Carson v. Brockton Sewerage Commission 182 US 398 SCOTUS 1901-05-27 at 403 p. 106, p. 108
Central Savings Bank v. City of New York 279 NY 266 N.Y. 1938-12-06 at 280 p. 106, p. 107, p. 108
Central Savings Bank v. City of New York 280 NY 9 N.Y. 1939-02-21 p. 106
Board of Education of Union Free School District No. 3 of Huntington v. Associated Teachers of Huntington, Inc. 30 NY2d 122 N.Y. 1972-03-16 p. 106
New York City School Boards Ass'n v. Board of Education 39 NY2d 111 N.Y. 1976-03-25 p. 106
Lane County v. Oregon 74 US 71 SCOTUS at 80 p. 107