Conflict of Laws-Full Faith and Credit-Extraterritorial Enforcement of State Revenue Law

As the operator of a parking lot within plaintiffs city limits, defendant was subject to a ten percent city tax on his gross receipts. He failed to report the whole of his receipts on his monthly tax returns, and plaintiff, the City of Philadelphia, duly notified him of a five thousand dollar deficiency. Defendant had a statutory right to petition for administrative review of the assessment within sixty days, failing which the liability would become fixed and no longer subject to review or appeal. Rather than appealing, defendant removed himself and his assets to New York, thus preventing plaintiff from obtaining a Pennsylvania judgment against him. Plaintiff then sued defendant in a New York court to collect the tax deficiency allegedly due. The trial court dismissed the action on grounds of want of jurisdiction of the subject matter and failure to state a cause of action, and the appellate division affirmed, two judges dissenting. On appeal to the New York Court of Appeals, held, judgment affirmed, one judge dissenting. Neither full faith and credit nor comity nor public policy requires a state court to entertain an action to enforce a tax liability imposed under a foreign state’s revenue laws unless that liability has been reduced to judgment. City of Philadelphia v. Cohen, 184 N.E.2d 167, 230 N.Y.S.2d 188 (1962).