Chase, J.
By chapter 414 of the Laws of 1906, section 315 of chapter 241 of the Laws of 1905 (now section 270, Tax Law) was amended. As amended, so far as material, it reads as follows: “There is hereby imposed and there shall immediately accrue and be collected a tax as herein provided, on all sales, * * * or deliveries, or transfers, of shares or certificates of stock,' * * * on each share of one hundred dollars of face value or fraction thereof, two cents.”
That section as amended also provides, “ The comptroller may, upon satisfactory proof that stamps have been erroneously affixed and canceled in payment of the tax upon a transfer and to the loss of an innocent person, refund the amount thereof from appropriations made for necessary expenses under this act, provided the tax justly due is paid upon such transfer.”
The amendment, so far as it changed the act of 1905 to require a tax “on each share of one hundred dollars of face value or fraction thereof ” instead of “on each hundred dollars of face value or fraction thereof,” was declared unconstitutional and void by this court in
People ex rel. Farrington
v.
Mensching
(187 N. Y. 8).
The plaintiffs are stock brokers, and the successors
of
Bishop, Laimbeer & Go., whose assets they acquired, and whose liabilities they assumed. The plaintiffs and their predecessors in business are referred to herein, genérally, as respondents.
From June 27, 1906, to December 27, 1906, Bishop, Laimbeer
&
Go. sold and transferred many shares of stock
of the par value of less than'one hundred dollars per share and affixed and canceled stamps on all of said sales and transfers at the rate of two cents on each share of stock sold or transferred. The excess stamps so affixed and canceled by them amounted to $887.80. The respondents presented a claim to the comptroller for that amount. Similar claims were presented to the comptroller by other stock brokers for alleged excess of stamps affixed and canceled by them respectively.
The records of the courts show some of the efforts that have been made to obtain a refund of the amount of stamps so erroneously affixed and canceled.
(Flower
v.
State of N. Y.
65 Misc. Rep. 145; 143 App. Div. 871;
People ex rel. Noyes
v.
Sohmer,
81 Misc. Rep. 522; 159 App. Div. 929; 210 N. Y. 619.)
In 1910, chapter 186 of the Laws of that year was enacted, which provides: “If any stamp or stamps shall have been erroneously affixed to any book, certificate of stock, or bill or memorandum of sale, the comptroller may, upon presentation of a claim for the amount of such-stamp or stamps and upon the production of evidence satisfactory to him that such stamp or stamps was or were so erroneously affixed so as to cause loss to the person or persons making such claim, pay such amount, or such part thereof as he may allow, to such claimant out of any moneys appropriated for that purpose. * * * If the comptroller rejects a claim or any part thereof, the claimant may file a claim for the recovery of such sum as the comptroller shall have refused to allow, with the court of claims, which shall constitute a private claim against the state and shall be subject to all the provisions of law governing such claim, * * *. ” (Now section 280,- Tax Law.)
The respondents’ claim was rejected by the comptroller and it was then filed with the Court of Claims. That court upon the hearing and determination of the claim divided it into three parts —
A. $333.30, being the amount of excess stamps used on stocks sold for the firm or a member thereof.
B. $191, being the amount of excess stamps used on stocks sold for customers who then were and now remain indebted to the firm.
C. $333.50, being the amount of excess stamps used on stocks sold for customers where the amount thereof was deducted from the customers’ account in remitting the proceeds of the sale of stocks to them.
The Court of Claims gave the respondents judgment .for the first two amounts, but refused to allow the third amount. On appeal to the Appellate Division that court modified the findings of the Court of Claims and gave the respondents judgment for the full amount of their claim. It is.conceded that stamps were erroneously affixed and canceled as claimed by the respondents. It is also conceded that the state has in its possession the amount paid by the respondents for the stamps so erroneously affixed and canceled. Neither the state as a body politic and corporate, nor the taxpayers of the state as such have any right to or interest in such amount so paid except to see that it is refunded to the persons entitled thereto as prescribed by the statute quoted.
The finding of fact relating to the excess stamps mentioned in the division of the respondents’ claim marked “ C ” as modified by the Appellate Division is as follows: “ The customers of Bishop, Laimbeer & Company did not pay them for the stamps used on sales or transfers made by Bishóp, Laimbeer & Company for them. With reference to sales or transfers made for customers and designated ‘ C ’ on the schedule annexed to the claim herein Bishop, Laimbeer & Company deducted the amount of the stamps from the proceeds of sale and retained that amount.”'
The finding of the Court of Claims, in substance, that Bishop, Laimbeer & Company were paid for the stock
transfer stamps used on stocks mentioned in “ 0 ” was reversed by the Appellate Division.
There is no finding of any kind that the respondents have ever been
paid or reimbursed for any of the stamps erroneously affixed to said stocks.
The state claims on this appeal that the respondents should not be allowed the $191.00 or the $333.50 for stamps used on stocks sold for customers.
Are the respondents persons who erroneously affixed stamps to the stocks mentioned in. the parts of their claim marked “B” and “0,” and have they been caused loss thereby ? If so, the judgment appealed from is right, and it has been rendered in accordance with the express terms of the statute. They are indisputably the persons who affixed the stamps, and it seems to us that they are clearly the only persons who have been caused loss thereby.' The stamps were purchased and owned by them. They sold the stocks and actually, although erroneously, affixed and canceled the stamps. The act of 1906, being unconstitutional did not constitute legal authority for any act done pursuant to its terms. The respondents in annexing and canceling the stamps in question destroyed their own property and such cancellation and destruction constituted a complete loss to them and not to their customers.
“An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.”
(Norton
v.
Shelby County,
118 U. S. 425, 442;
People ex rel. Farrington
v.
Mensching, supra.)
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Chase, J.
By chapter 414 of the Laws of 1906, section 315 of chapter 241 of the Laws of 1905 (now section 270, Tax Law) was amended. As amended, so far as material, it reads as follows: “There is hereby imposed and there shall immediately accrue and be collected a tax as herein provided, on all sales, * * * or deliveries, or transfers, of shares or certificates of stock,' * * * on each share of one hundred dollars of face value or fraction thereof, two cents.”
That section as amended also provides, “ The comptroller may, upon satisfactory proof that stamps have been erroneously affixed and canceled in payment of the tax upon a transfer and to the loss of an innocent person, refund the amount thereof from appropriations made for necessary expenses under this act, provided the tax justly due is paid upon such transfer.”
The amendment, so far as it changed the act of 1905 to require a tax “on each share of one hundred dollars of face value or fraction thereof ” instead of “on each hundred dollars of face value or fraction thereof,” was declared unconstitutional and void by this court in
People ex rel. Farrington
v.
Mensching
(187 N. Y. 8).
The plaintiffs are stock brokers, and the successors
of
Bishop, Laimbeer & Go., whose assets they acquired, and whose liabilities they assumed. The plaintiffs and their predecessors in business are referred to herein, genérally, as respondents.
From June 27, 1906, to December 27, 1906, Bishop, Laimbeer
&
Go. sold and transferred many shares of stock
of the par value of less than'one hundred dollars per share and affixed and canceled stamps on all of said sales and transfers at the rate of two cents on each share of stock sold or transferred. The excess stamps so affixed and canceled by them amounted to $887.80. The respondents presented a claim to the comptroller for that amount. Similar claims were presented to the comptroller by other stock brokers for alleged excess of stamps affixed and canceled by them respectively.
The records of the courts show some of the efforts that have been made to obtain a refund of the amount of stamps so erroneously affixed and canceled.
(Flower
v.
State of N. Y.
65 Misc. Rep. 145; 143 App. Div. 871;
People ex rel. Noyes
v.
Sohmer,
81 Misc. Rep. 522; 159 App. Div. 929; 210 N. Y. 619.)
In 1910, chapter 186 of the Laws of that year was enacted, which provides: “If any stamp or stamps shall have been erroneously affixed to any book, certificate of stock, or bill or memorandum of sale, the comptroller may, upon presentation of a claim for the amount of such-stamp or stamps and upon the production of evidence satisfactory to him that such stamp or stamps was or were so erroneously affixed so as to cause loss to the person or persons making such claim, pay such amount, or such part thereof as he may allow, to such claimant out of any moneys appropriated for that purpose. * * * If the comptroller rejects a claim or any part thereof, the claimant may file a claim for the recovery of such sum as the comptroller shall have refused to allow, with the court of claims, which shall constitute a private claim against the state and shall be subject to all the provisions of law governing such claim, * * *. ” (Now section 280,- Tax Law.)
The respondents’ claim was rejected by the comptroller and it was then filed with the Court of Claims. That court upon the hearing and determination of the claim divided it into three parts —
A. $333.30, being the amount of excess stamps used on stocks sold for the firm or a member thereof.
B. $191, being the amount of excess stamps used on stocks sold for customers who then were and now remain indebted to the firm.
C. $333.50, being the amount of excess stamps used on stocks sold for customers where the amount thereof was deducted from the customers’ account in remitting the proceeds of the sale of stocks to them.
The Court of Claims gave the respondents judgment .for the first two amounts, but refused to allow the third amount. On appeal to the Appellate Division that court modified the findings of the Court of Claims and gave the respondents judgment for the full amount of their claim. It is.conceded that stamps were erroneously affixed and canceled as claimed by the respondents. It is also conceded that the state has in its possession the amount paid by the respondents for the stamps so erroneously affixed and canceled. Neither the state as a body politic and corporate, nor the taxpayers of the state as such have any right to or interest in such amount so paid except to see that it is refunded to the persons entitled thereto as prescribed by the statute quoted.
The finding of fact relating to the excess stamps mentioned in the division of the respondents’ claim marked “ C ” as modified by the Appellate Division is as follows: “ The customers of Bishop, Laimbeer & Company did not pay them for the stamps used on sales or transfers made by Bishóp, Laimbeer & Company for them. With reference to sales or transfers made for customers and designated ‘ C ’ on the schedule annexed to the claim herein Bishop, Laimbeer & Company deducted the amount of the stamps from the proceeds of sale and retained that amount.”'
The finding of the Court of Claims, in substance, that Bishop, Laimbeer & Company were paid for the stock
transfer stamps used on stocks mentioned in “ 0 ” was reversed by the Appellate Division.
There is no finding of any kind that the respondents have ever been
paid or reimbursed for any of the stamps erroneously affixed to said stocks.
The state claims on this appeal that the respondents should not be allowed the $191.00 or the $333.50 for stamps used on stocks sold for customers.
Are the respondents persons who erroneously affixed stamps to the stocks mentioned in. the parts of their claim marked “B” and “0,” and have they been caused loss thereby ? If so, the judgment appealed from is right, and it has been rendered in accordance with the express terms of the statute. They are indisputably the persons who affixed the stamps, and it seems to us that they are clearly the only persons who have been caused loss thereby.' The stamps were purchased and owned by them. They sold the stocks and actually, although erroneously, affixed and canceled the stamps. The act of 1906, being unconstitutional did not constitute legal authority for any act done pursuant to its terms. The respondents in annexing and canceling the stamps in question destroyed their own property and such cancellation and destruction constituted a complete loss to them and not to their customers.
“An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.”
(Norton
v.
Shelby County,
118 U. S. 425, 442;
People ex rel. Farrington
v.
Mensching, supra.)
The cancellation of the stamps did not constitute a sale to the customers nor create a legal claim that the respondents could in any way enforce against them.
If the customer’s had in fact subsequently paid for .the erroneously canceled stamps, or they had wfith full knowledge of the facts ratified the acts of the respondents in
placing the stamps upon their stocks or in charging thfamount thereof to them accounts before remitting the-proceeds of the sale of stocks to them, they undoubtedly would be entitled to an assignment of the claim of the respondents against the state and be generally subrogated to the respondents’ rights to recover for the stamps sc erroneously canceled. Payment for the stamps by the customers has not been shown. It is not even claimed except as stated. The charge by the respondents of stamps to the account of the customers does not appear by an express statement in the accounts rendered. It can only be ascertained therefrom by computation. Ratification with knowledge by the customers of the charge by the respondents does not in any way appear. So far as appears the respondents could be compelled at the suit of the customers mentioned to refund the amount charged against them for stamps erroneously placed upon their stocks. If the customers have sustained a loss it is by the respondents improperly and without authority charging the amount of the stamps erroneously affixed to their stocks to and deducting the same from their accounts, and not because of the respondents mistakenly and erroneously canceling and destroying their own property.
, The customers did not affix the stamps to their stocks or direct that they should be affixed thereto or in any way become liable to pay therefor. Even if the claim of the respondents is finally disallowed, the customers can, so far as anything appears in the record, recover from them the improper and unauthorized charges made against them.
The customers as such, unless they ratify the charge made by the respondents against their accounts, have no cause of action against the state and do not come within the terms of the act of 1910. It may not be of material importance in determining whether the state is liable to the respondents, but it is interesting to note that it was stated before us without contradiction that not one of the
alleged one hundred thousand customers of brokers on whose stocks stamps were placed in accordance with the provisions of the unconstitutional act have ever made a claim to the comptroller for a refund of the amount of stamps erroneously canceled on such stocks.
If we assume that the acts of the respondents in erroneously affixing the stamps were the acts of their customers, then respondents may be treated in this action so far as necessary as trustees for the benefit of such customers and their liability to such customers after recovery can be enforced against them as such trustees.
(United States
v.
American Tobacco Co.,
166 U. S. 468;
People ex rel. American Exchange National Bank
v.
Purdy,
196 N. Y. 270, and cases cited;
People ex rel. American Exchange National Bank
v.
Purdy,
199 N. Y. 51;
Second National Bank
v.
City of New York,
213 N. Y. 457;
State v. Central Vermont Railway Co.,
81 Vt. 459; 2 Corpus Juris, 830. See
Rogers v. Atlantic, Gulf & Pacific Co.,
213 N. Y. 246.)
The judgment of the Appellate. Division should be affirmed, with costs.