141 N.Y.S. 473 | N.Y. App. Div. | 1913
On the 16th day of November, 1912, George A. M. Smith executed and delivered to the Mechanics’ Bank, Brooklyn, a paper which is in form a deed, conveying property on the east side, of Fourth avenue in the said borough of Brooklyn. On the same day it was presented by a representative of the said bank to the register of Kings county, with a request that it be recorded, and the fee for recording such instrument was then tendered. The register' refused to comply with the request unless an affidavit was presented to him made by an officer of said bank stating whether said deed was absolute, or given' as collateral security with the effect of a mortgage. Thereupon relator moved for a peremptory writ of mandamus requiring said ' register to record the same, and from an order denying such1 motion it appeals. On June 29, 1910, the State Board of Tax Commissioners adopted the following rule: “ Whenever the recording officer has reasonable grounds to believe that an instrument offered for record is intended to operate as a mortgage security, although it appears on its face to be an absolute conveyance,' he shall refuse to record it without the payment of the mortgage tax, unless he is furnished by the party offering the same for record with an affidavit stating that the instrument is not given as security for a debt or obligation.” In his answering affidavit the register of Kings county alleges in support of his refusal that he had reasonable grounds to believe that said instrument was intended to operate as a mortgage security, because it came from a hank whose business it is to conduct banking and make loans on collateral and other securities. He asserts no other ground for his refusal or belief. We may assume that the purpose of said rule was to enforce compliance with the provisions of the Tax Law relating to mortgages.
The Tax Law (Consol. Laws, chap. 60. [Laws of 1909, chap. 62], § 3) provides that “All real property within this State,
Mortgages on real property, as the words are used in said article, “include every - mortgage by which a lien is created over or imposed on real property or which affects the title to real property * * *. Executory contracts for the sale of real property under which the vendee has or is entitled to possession” and “ a contract or agreement by which the indebtedness secured by any mortgage is increased or added to.” (Id.. § 250.) ' “ All mortgages of real property situated within the State which are taxed by this article and the debts and the obligations which they secure, together with the paper writings evidencing the same/ shall be. exempt from other taxation by the State, counties, cities, towns, villages, school districts and other local subdivisions of the State.” (Id. § 251.) There are certain exceptions to this exemption which it is not necessary to notice at this time, as they do not affect the questions here involved. ' The act further provided that “ The State Board of-Tax Commissioners shall have general supervisory power over all recording officers in respect of the duties imposed by this article and they may make such rules and regulations for the' government of recording officers in respect to the matters provided for in this article as they may deem proper, provided that such rules and regulations shall not be inconsistent with this or any other statute.” (Id. § 263.)
Without determining the power of the State Board of Tax Commissioners to prescribe the rule above referred to, if the power exists, the facts here disclosed furnish no ground for its attempted enforcement. Mere suspicion is not synonymous with belief resting upon reasonable grounds. (People ex rel. Livingston v. Wyatt, 186 N. Y. 383.) If a State bank could only accept a conveyance of real property by way of security for a loan, there might be some grounds for the position taken by the respondents, but such is not the case. (Banking Law [Consol. Laws, chap. 2; Laws of 1909, chap. 10], § 66, subd. 3.) So far as any facts are here disclosed, it is just as reasonable to suppose that it is acquired because “necessary for its
We think that the fact that relator seeks to have this instrument recorded as a deed is strong evidence that it is not to be deemed other than an absolute conveyance of the property. The provisions of article 11 of the Tax Law relate only to mortgages upon which a tax is thereby imposed, and it is manifest from the provisions thereof above cited that it is only mortgages offered for record which are affected thereby. A mortgage unrecorded would still he subject to tax, not by the provisions of said article, but perforce the requirements of section 2, subdivision 5, and section 3 of article 1 of the Tax Law (People ex rel. Braeburn Assn. v. Hanking, 154 App. Div. 679), and we think we may take judicial notice that Under such circumstances the rate of tax will be very much greater than that imposed by article 11.
If this deed is in fact a mortgage and there is a separate instrument of defeasance, the recording of it as a deed without at the same time recording every writing operating as a defeasance or explanatory thereof, is a nullity so far as giving constructive notice to subsequent purchasers or incumbrancers is concerned. (Real Prop. Law [Consol. Laws, chap. 50; Laws of 1909, chap. 52], § 320; White v. Moore, 1 Paige, 551; Odell v. Montross, 68 N. Y. 499; Mooney v. Byrne, 163 id. 86.) It may not be received in evidence in any action or proceeding in this State unless the mortgage tax thereon is paid. (Mutual Life Ins. Co. v. Nicholas, 144 App. Div. 95.) It is true that where there is no defeasance in writing, the intent that a conveyance absolute in its terms shall be only a security for the payment of money may be shown by parol, and in such case the deed is-in effect hut a mortgage. (Odell v. Montross, supra; Kraemer v. Adelsberger, 122 N. Y. 467.) Whether a right to redeem depends upon a separate written instrument or rests in parol, to operate as notice the instrument given as security for the debt must be recorded as a mortgage and not as a deed. (Odell v. Montross, supra; Dey v. Dunham, 2 Johns, Ch, 182.)
We think, therefore, that the order appealed from should be reversed and the motion for a peremptory writ of mandamus should be granted, but under the circumstances, without costs.
Jenks, P. J., Thomas, Carr and Rich, JJ., concurred.
Order reversed, and motion for peremptory writ of mandamus granted, without costs.