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LIQUIFIN AKTIENGESELLSCHAFT v. BRENNAN

February 14, 1978

LIQUIFIN AKTIENGESELLSCHAFT, Plaintiff, against JOSEPH P. BRENNAN, Individually and As City Sheriff of the City of New York, and THE CITY OF NEW YORK, Defendants, and LOUIS J. LEFKOWITZ, Attorney General of the State of New York, Intervenor.


The opinion of the court was delivered by: CANNELLA

CANNELLA, D.J.:

After a trial on stipulated facts, judgment is granted in favor of the defendants and intervenor, and the complaint is dismissed.

 This case tests the constitutionality of New York State's poundage fees as applied to a nonresident corporation that obtained a discharge of an attachment order in New York City.

 Pursuant to section 8012(b) of the New York Civil Practice Law and Rules,

 1. A sheriff is entitled, for collecting money by virtue of... an order of attachment... to poundage of, in the counties within the city of New York, five per cent of the sum collected and in all other counties, five per cent upon the first two hundred fifty thousand dollars collected, and three per cent upon the residue of the sum collected.

 . . .

 3. Where a settlement is made, either before or after judgment, after a levy by virtue of an order of attachment, the sheriff is entitled to poundage upon the value of the property levied upon, not exceeding the sum at which the settlement is made. Where an order of attachment is vacated or set aside, the sheriff is entitled to poundage upon the value of the property levied upon, not exceeding the amount specified in the order of attachment, and the court may order the party at whose instance the order of attachment was granted to pay the same to the sheriff. Where an order of attachment is otherwise discharged by order of the court, the sheriff is entitled to the same poundage, to be paid by the party at whose instance the order of attachment is discharged, and the sheriff is entitled to retain the property levied upon until the poundage is paid.The maximum amount upon which poundage shall be computed, if such a settlement is made or the order of attachment is vacated or set aside, is one million dollars.

 The complaint *fn1" / contains basically three claims: (1) that the $75,625 in poundage fees exacted from plaintiff by the sheriff deprived plaintiff of due process as guaranteed by the fourteenth amendment to the United States Constitution and Article 1, Section 6 of the New York State Constitution; (2) that, pursuant to § 8012(b)(3) of the New York Civil Practice Laws and Rules, the maximum amount upon which plaintiff's poundage should have been computed is $1,000,000; and (3) that N.Y.C.P.L.R. § 8012(b)(1), which provides for a higher poundage rate in the counties within New York City, contains an arbitrary territorial classification in violation of the equal protection clause of the fourteenth amendment to the United States Constitution. The Court finds these claims to be without merit.

 THE FACTS *fn2"

 On May 31, 1973, plaintiff Liquifin Aktiengesellschaft ["Liquifin"] *fn3" / published a tender offer for shares of the Ronson Corporation ["Ronson"]. Seeking to enjoin the tender offer, Ronson brought suit on June 5, 1973 in the New Jersey federal district court. *fn4" / When Ronson obtained a preliminary injunction on July 5, Liquifin immediately appealed the district court's decision. On January 16, 1974, after trial, the injunction was vacated.

 On July 6, 1973, while Liquifin's appeal of the preliminary injunction was pending, Ronson commenced a second action in the New York County Supreme Court by obtaining an order of attachment for the sum of $1,500,000 against Liquifin funds on deposit with the Franklin National Bank ["Franklin"] in New York City. The attached $1,500,000 was part of the more than $13,857,410 Liquifin deposited with Franklin in connection with its tender offer to purchase the Ronson shares. The attachment order was delivered to the City Sheriff, New York County Division, and a Deputy Sheriff effectuated a levy on the attached sum by personally serving a copy of the order on an officer of Franklin at 130 Pearl Street in New York City. *fn5" / Franklin, in turn, made the appropriate accounting entries to freeze $1,500,000 of the Liquifin funds there on deposit and held this amount pursuant to the order of attachment and levy.

 On July 19, 1973, Liquifin obtained an order discharging the attachment upon presentation of an undertaking. *fn6" / The order required Liquifin to pay the New York City Sheriff "statutory fees and expenses." Findings of Fact agreed upon by the parties P15, at 4. The Sheriff gave Liquifin a document releasing the monies attached July 6 on the condition that the Sheriff be paid the sum of $75,625. The $75,625 consisted of a poundage fee of $75,000 calculated at 5% of the value of the property levied upon ($1,500,000), N.Y.C.P.L.R. § 8012(b)(3), and an additional $625 calculated as 5% of the interest on $1,500,000.

 On a petition filed by Liquifin, the New York State court action was removed to the United States District Court for the Southern District of New York on September 19, 1973. This action, entitled Ronson Corporation v. Liquifin Aktiengesellschaft, No. 73 Civ. 4026 (C.L.B.), was subsequently settled between the parties.

 On November 16, 1973, Liquifin paid to the New York City Sheriff the sum of $75,625, pursuant to the terms of the Sheriff's release dated July 19, 1973. As required by law, the Sheriff subsequently transmitted this sum to the City of New York to be deposited in a general fund from which all City expenses are paid.

 On February 15, 1974 Liquifin instituted the instant action against New York City Sheriff Joseph E. Brennan, seeking the return of the $75,625 in statutory fees paid to obtain a discharge of the $1,500,000 attachment. *fn7"

 DISCUSSION

 The nature of Liquifin's claims merits a brief sketch of the role of the sheriff, both historically at common law and at present by statute.

 In discussing the status, duties and powers of the sheriff, the Appellate Division of the Supreme Court stated:

 The sheriff is an elected county oficer. County Law § 180. He is charged with the care and maintenance of the County Jail and its inmates. He serves the court's process and executes its mandates. He is, in effect, an arm of the court. As a matter of historical development, it may be noted that originally the sheriff, as a direct representative of the crown or sovereign, performed these and other services on a fee or commission basis. He personally was expressly charged with all the duties and responsibilities of the office. He was "identical, in contemplation of law, with all his officers, and is [was] civilly and directly responsible for their acts, defaults, torts, extortions or other misconduct, whether it will be willful or ...


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