In re Loper

The facts in this case are not in dispute, and are of such a character as to present the interesting question whether privileges which attach to real property by virtue of a statute may be destroyed or materially impaired, without the knowledge or consent of the owner, by the secret act of a tenant, done in violation of his agreement of lease. The premises in question, situate in Gasport, in the town of Royalton, Niagara county, N. Y., were owned by one Charles Hathaway prior to March 23, 1896, when the liquor tax law, so called, went into effect, and until the 17th day of January, 1900, at which time they were purchased by the appellants. At the time the

If the order appealed from is to stand, it follows that a tenant may at will seriously impair the rights of his landlord in leased premises, and that the landlord is powerless to protect himself against loss or injury thereby. The privilege which attached to the property in question to sell liquor without the consent of those living within 200 feet of the premises was a valuable one, afid, as appears by the evidence in this case, constituted the chief value of the premises. Under the arrangement made by the appellants with Mrs. Knights, she obligated herself to preserve such privilege; obligated herself to continue the business of trafficking in liquors until she surrendered possession to the appellants, March 1, 1900, when, under the license obtained by them, they would be entitled to continue the same business. Without the knowledge or consent of the appellants (whether- upon her own motion or acting in collusion wdth the petitioners does not clearly appear), Mrs. Knights, by her secret act, in effect sought to destroy the valuable privilege which attached to the leased premises, to wit, the right to traffic in liquors upon the premises in question, without obtaining the consent of the adjacent owners. We think such a construction of the statute is unreasonable, and ought not to prevail. It is not contended or suggested that the agreement made by the appellants with Mrs. Knights was not made in good faith, and apparently it was made for the very purpose of preserving then* right to continue the business of trafficking in liquors upon the premises in question. The arrangement was a reasonable one. Upon their purchase they had a right to enter into immediate possession; were entitled to a liquor tax certificate as matter of right, but for the purpose of accommodating the then tenant they permitted her to remain in possession, upon the express agreement that she would continue the traffic in liquors until the 1st day of March, 1900, at which time the appellants were to enter into possession and themselves continue such traffic. As we have seen,

“The false statements in an application for a certificate which will justify Its revocation under the statute must relate to some material matter of fact, and it must be shown that such fact was willfully misstated by the applicant. If the statement relates to some matter of law as to which the applicant is ignorant or misinformed, that will not be sufficient to warrant the court in canceling a certificate. * * * It appears from the record that the premises in question were actually used for the liquor traffic on the day mentioned [March 23, 1896], and continuously thereafter until the 22d day of April, 1898, the then occupant procured a new license, which expired on May 1, 1899. This license was transferred to Cashin on the 20th day of April, 1899. It appears that at this date the business was temporarily suspended, for the reason that the building, or a portion of it, had been destroyed by fire on the 19th day of February previous, and it was not repaired or rebuilt so as to permit the conduct of the business therein until the 19th of May following. Unless this temporary suspension of the business was sufficient to deprive the place of the right to a license reserved in the general law to places where the traffic was being conducted at the date of its passage, the statements of the petition were not false within any fair construction of the statute. The suspension was due entirely to the fact that the place had been wholly or partially destroyed, since there was no intention to abandon the business, but, on the contrary, to resume it as soon as the building was in a proper condition for that purpose, and it was actually resumed by Cashin under the certificate in question as soon as the place was put In a suitable condition for the business. The provision of the statute which secures the right to a license for a place where the business is conducted at the time of the passage of the law does not require that the traffic should be continuous under any and all circumstances. The plain purpose of the law was that, when the business in such places had been once abandoned, it should not be resumed exsept with the consent of the residents, as pointed out in the statute. A temporary suspension of the traffic, resulting from an accident such as the destruction of the building by fire, or the like, will not operate to affect the right attached to the premises under the law.”

It seems to us that it would be even more unjust and inequitable to hold that the certificate of the appellants should be revoked because of the statement contained in their application than in the case decided by the court of appeals. In that case the traffic in liquors was suspended for several months by the destruction of the building by fire, and through no fault of the applicant. In the case at bar the legal traffic in liquors was suspended only for a few days, through no fault of the owners, without their knowledge or consent, and under such circumstances that they were powerless to prevent the same, and it is quite apparent that the actual traffic was continued until the removal of Mrs. Knights from the premises. The appellants, for the purpose of accommodating the tenant, and under the express agreement on her part that she would continue the traffic in liquors until she surrendered possession to them, consented to permit her to occupy the premises for a few days. During those few days, by her conduct, of which-the appellants had no knowledge, she has made it impossible, if the order appealed from is to stand, for the appellants to occupy the premises for the purpose for which they were purchased, and for the only purpose to which they are adapted. We are of the opinion that a fair, reasonable, and just interpretation of the statute requires that the order appealed from should be reversed,

Order reversed, with costs.

ADAMS, P. J., concurs.

(concurring). It appears uncontroverted that Slattery and Hammond purchased the premises for the purpose of personally conducting a saloon thereon; that they could not. obtain immediate possession, as Mrs. Knights, the monthly tenant of the grantor, was in possession, having paid the rent for the month of January, and desired to remain; that they arranged with her to vacate on the 1st of March, which was the earliest date on which they could have obtained possession against her will; that it was expressly understood that she would continue the business, and she led them to believe that she would not surrender her liquor tax certificate until that date; that they agreed to and did subsequently purchase all bar fixtures, saloon furniture, and liquors which she had on hand; that the saloon signs and government cigar and liquor license remained up,, and" the liquors, fixtures, and furniture remained as they, were in use by her before suspending, and she continued to occupy the premises until March 1st precisely as before, excepting that no liquor was sold thereon after the surrender of her certificate; that the premises were not during said time used for any other purpose. The liquor tax certificate could not be canceled under the law until a month after its surrender. Ten days before the lapse of that period the new liquor tax certificate-was issued to Slattery and Hammond, who applied for the samé with due diligence; and the agent of the state, the county treasurer, who-issued it, was fully aware of all the facts. The statute provides that no consents of the owners of neighboring property shall be required where premises were used for trafficking in liquor on March 23, 1896, and that,, where consents unlimited as to time, have once been obtained, no further consents shall be required “so long as such premises shall be continuously occupied for such traffic.” Where, as here, the premises were used for trafficking in liquor on the 23d day of March,, 1896, continuous trafficking thereafter is not required, by the express-language of the statute to relieve the owner from obtaining consents but only by judicial construction. It is significant, and should be borne in mind in construing this enactment, that the criterion is not whether liquor has been continuously sold on the premises, but whether that is the use to which the premises have been continuously devoted. The owners of residential property within 200 feet of premises have no constitutional right to be permitted to determine whether such premises shall be licensed to sell liquor; nor, on the other hand, has the holder of a liquor tax certificate any constitutional right to continue trafficking in liquor. By a higher license fee, and requiring the consents of two-thirds of such owners of neighboring property, it was designed to reduce the number of licensed places. The legislature, however, by expressly dispensing with such consents as to premises then licensed, and as to premises thereafter licensed where consents unlimited as to time were once obtained and filed, quite clearly manifested an intention to protect property owners as to investments and expenditures made in good faith in constructing and fitting up premises for saloon purposes.

It would be difficult, if not impossible, to enunciate ¿ principle in the construction of this statute that would apply to all cases. I think it may be safely stated as a general rule, however, to which there may

I cannot agree with the holding by implication contained in Justice McLENNAN’S opinion that the tenant, "by surrendering the certificate, may deprive the landlord of this right, unless there was an express agreement that trafficking in liquor should not be suspended. I think renting premises for such traffic is sufficient to preserve the right, provided the landlord, upon learning of a suspension of the traffic by the tenant, exercises due diligence in resuming possession and continuing the right. In the case at bar the premises have not been devoted to any other use, and their only occupancy has been for continuing the traffic in liquors. The owners have done no act indicating an intention to abandon or suspend that business. On the contrary, it affirmatively appears that they have at all times intended to exercise the privilege, and they have used reasonable diligence in protecting their interests and preserving this right. I therefore vote for reversal.

(dissenting). The salient facts in this proceeding are uncontroverted. John C. Hathaway owned the premises in question on March 23, 1896, when the liquor tax law became operative, and they then contained a saloon in which the traffic of liquor was carried on. On April 29, 1899, Mary A. Knights, who was then the occupant of this saloon, obtained a certificate from the county treasurer authorizing her to continue the traffic, which she did without interruption until January 27, 1900, when she voluntarily surrendered the certificate to obtain the rebate, as it was by its terms effective until the 1st of May following. Hathaway sold the premises to Slattery and Hammond by deed dated January 6, but delivered January 17,1900. They expected undoubtedly to use them for a saloon for the sale of liquor. The purchasers informed Mrs. Knights of their purchase, and permitted her to continue her occupancy until March 1st, which she did. Her tenancy under Hathaway was by a verbal lease, and she paid rent monthly in advance, and for the month of February she attorned to the new owners. There was no agreement by which her certificate was to be assigned to them. From January 27th until March 1st during her occupancy of said premises, after the 'surrender of said certificate, the traffic in liquor was not carried on at all therein. On February 7, 1900, Slattery and Hammond applied to the county treasurer of said county for a certificate authorizing them to sell liquor in said premises. In their verified application filed for that purpose in response to the question, “Since what date have said premises been occupied continuously for such traffic in liquor?” they answered, “Since 1894 to January 29, 1900.” The application was refused on the ground that said premises had not been “continuously occupied for such traffic” to the date of the application. On February 17th another application was presented by these owners, in which they answered

Subdivision 8 of section 17 of the liquor tax law (chapter 112, Laws 1896, and its various amendments) requires the consent in writing that the traffic in liquor be carried on in the premises executed by the owner or owners of at least two-thirds of the buildings exclusively occupied for dwellings and situated within 200 feet of said premises. If the liquor traffic was carried on in the premises March 23, 1896, such consent was unnecessary at that time, and shall not “be required so long as such premises shall be continuously occupied for such traffic.” That is, although the occupant had a clear right to prosecute his business after March 23, 1896, and as long as he did so continuously, without obtaining the consent of these near-by owners, if he discontinued the traffic or abandoned the business, its resumption must be preceded by their consent executed and filed in compliance with the statute. People v. Hamilton, 25 App. Div. 428 , 49 N. Y. Supp. 605 ; In re Klevesahl, 30 Misc. Rep. 361 , 63 N. Y. Supp. 741 ; In re Bridge, 36 App. Div. 533 , 55 N. Y. Supp. 54 . The length of time of such abandonment is unimportant. People v. Lammerts, 18 Misc. Rep. 343 , 40 N. Y. Supp. 1107 , affirmed 14 App. Div. 628 , 43 N. Y. Supp. 1161 , without an opinion. The abandonment itself operates as a forfeiture. In re Lyman, 34 App. Div. 389 , 54 N. Y. Supp. 294 . In People v. Lammerts, 18 Misc. Rep. 343 , 40 N. Y. Supp. 1107 , the premises were occupied by a tenant engaged in the traffic in liquor when the liquor tax law went into effect. He ceased the traffic April 2d, but resumed it, continuing until June 11th, when he abandoned both the business and the premises. On the succeeding day Sweeney leased the premises of the owner for the purpose of conducting the liquor traffic, and at once began fitting it up with that .view. On the 15th of that month the former tenant applied to the treasurer for permission to assign his certificate to Sweeney, which was refused, as the consent of the requisite number of owners within 200 feet had not been filed. On the 30 th of June the occupant made application for a certificate, which was again refused, and proceedings were instituted to review the determination of the treasurer. That official was sustained at special term, the judge saying in his opinion, at page 348, 13 Misc. Rep., and at page 1111, 40 N. Y. Supp.:

“I am constrained to bold, therefore, that, as the business of trafficking in liquors was not continued after the 11th day of June, there was an abandonment of the premises for that purpose, and before the liquor business can

again be carried on in these premises the party applying for a tax certificate must comply with the provisions of the act by procuring the consent of two-thirds of the owners of buildings occupied exclusively for dwellings, as provided by subdivision 8 of section 17.”

In the present case Mrs. Knights was the only person authorized to carry on this traffic January 27, 1900. She was in possession of the premises. The rent had been paid in advance, and certainly her tenancy could not be terminated until the 1st of the following month, if even then. 'She owned the certificate, and that furnished the only permission to traffic in liquors. It was her property, and it had a money value, and she surrendered it to obtain the rebate. No other certificate was issued until February 17th, and certainly during that interim no one could lawfully carry on the traffic in the premises. There is no claim any liquor was sold from the abandonment until the termination of her tenancy on the 1st of March following. There were, therefore, both the legal disqualification arising from the lack of the certificate and the actual abandonment of the traffic. During that period no one else was in possession, and, as long as she was the occupant and the holder of the certificate, if she abandoned the traffic, that suspended the business, so that its resumption must be based upon the written consent required by the liquor tax law. There is no pretense that Mrs. Knights ever agreed to transfer the certificate to these owners. It was personal property, and assignable (Niles v. Nathusa, 162 N. Y. 546 , 57 N. E. 184 ), and they could have protected themselves by an agreement with her to transfer it to them by complying with section 27 of the liquor tax law. In re Kessler, decided by the court of appeals June 5th of the present year, 57 N. E. 402 , is in harmony with this position, instead of adverse to it. In that case Cashin was in the occupancy of premises which had been continuously used for the traffic in liquor since the adoption of the liquor tax law. On the 19th of February, 1899, a part of the saloon was destroyed by fire, resulting in a forced suspension of the business. There was no surrender of the certificate, and repairs were commenced immediately, but were not completed for three months. During that time the traffic could not be carried on. As is said by Judge O’Brien, of the court of appeals, in his opinion:

“The suspension was due entirely to the fact that the place had been wholly or partially destroyed, since there was no intention to abandon the business, but, on the contrary, to resume it as soon as the building was in proper condition for that purpose; and it was actually resumed by Cashin, under the certificate in question, as soon as the place was put in a suitable condition for business. * * * In order to deprive the place of the privilege conferred by the statute, it must appear that there was a real and substantial abandonment-of the business by the occupant.”

In that case there was no voluntary abandonment by the occupant and no intention to suspend his business. In the present case the only person who had any title to the certificate, and who was the sole and lawful occupant of the premises, exercised her legal privilege in surrendering her certificate, and abandoning the business. The statute is very plain that, if the new occupants desired to revive the business after this voluntary discontinuance of it, they must procure the consent required by the statute. The first certificate had spent its force

An analysis of the facts in this proceeding shows that these owners did not place the slightest reliance upon Mrs. Knight’s certificate, or her continuance of the liquor business. They acquired title to the premises January 17th, without making any arrangement with her to surrender possession, or to carry on the traffic. They claim that five days after their purchase they advised her of their ownership, and that she desired to continue in possession until March 1st, and that they complied with her request. She did not agree to retain her title, nor did she in terms agree to carry on the liquor traffic. She surrendered her certificate for cancellation January 27th, before the owners could have obtained possession, for her tenancy under Hathaway was in full life. On February 7th the purchasers applied for a liquor tax certificate. That was an entirely independent application, in no way recognizing any right in Mrs. Knights existing at that time. They stated in their petition that the occupation of said premises for traffic in liquor had terminated January 29th. They also stated that

In brief, the case presents this condition of affairs: Mrs. Knights, on January 27th, was the sole owner of this certificate. No one else had any interest in it whatever. She was in possession, not under the defendants, but by virtue of her tenancy from Hathaway. On that day she voluntarily surrendered the certificate to obtain the rebate to which she alone was entitled, and which she later received. She continued in the occupancy of the premises until March 1st, but during that entire period no liquor was sold in the premises, and no one had any right to engage in that traffic therein. The defendants, under their new light, claim there was no discontinuance, because they understood she was to continue selling liqtior. If the effect of the surrender of the certificate and the actual discontinuance of the traffic are to be dependent upon a secret agreement between the occupant and her landlord, then the execution of the law is precarious and uncertain, and it is materially shorn of its efficiency. The certificate is what the statute deals with, not the verbal understanding of the parties. The construction given in the prevailing opinions ignores the occupant and his certificate, and makes the intention of the owner, who has no right in the certificate, the determining factor.

It is contended that some liquor and the fixtures were in the saloon

The order should be affirmed, with costs and disbursements to the respondents.

WILLIAMS, J., concurs.