182 A.D. 572 | N.Y. App. Div. | 1918
Laura North Richards died on January 5, 1917, a resident of the State of California, where she had lived for thirty years. At the time of her decease she was the owner of eight bonds secured by mortgages on real estate situated in the State of New York. Four' of these bonds were made by domestic realty corporations, secured by mortgages on specific real estate owned by them, as follows:
(1) Bond of Citizens Union Realty and Mortgage Company, secured by a mortgage on real estate in the borough of Brooklyn, city of New York, known as 51 East Tenth street, since sold to Eva Metzger, who assumed payment of the mortgage, originally $4,000, reduced to $3,500.
(2) Bond of Jessamine Realty Company, secured by mortgage on 1500 Union street, borough of Brooklyn, city of New York, $4,000.
(3) Bond of Church Realty Company, secured by mortgage on 47 East Thirty-first street, borough of Brooklyn, city of New York, $3,000.
(4) Bond of Malba Estates Corporation, secured by mortgage on lot 327, block 18, on Malba Realty Trust map, borough of Queens, city of New York, $700.
The first three of these bonds and mortgages were in decedent’s possession at the time of her death and had been
The State Comptroller upon the present appeal contends that all these bonds are taxable under section 220, subdivision 2, of the Tax Law, reading as follows:
“ When the transfer is by will or intestate law, of tangible property within the State or of any intangible property, if evidenced by or consisting of shares of stock, bonds, notes or other evidences of interest in any corporation, joint stock company or association wherever incorporated or organized, except a corporation, foreign or domestic, or joint stock company or association constituting, being or in the nature of a moneyed corporation, a railroad or transportation corporation, or a public service or manufacturing corporation as defined and classified by the laws of this State, and the property represented by such shares of stock, bonds, notes or other evidences of interest consists of real property which is located, wholly or partly, within the State of New York, or of an interest in. any partnership business conducted, wholly or partly, within the State of New York, in such proportion as the value of the‘real property of such corporation, joint stock company or association, or as the value of the entire property of such partnership located in the State of New York bears to the value of the entire property of such corporation, joint stock company or association or partnership, and the decedent was a non-resident of the State at the time*575 of Ms death; or when the transfer is by will or intestate law of capital invested in business in the State by a non-resident of the State doing business in the State either as principal or partner.”
TMs subdivision prior to 1915 provided for a tax “ When the transfer is by will or intestate law, of tangible property witMn the State, and the decedent was a non-resident of the State at the time of Ms death.” (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], § 220, subd. 2, as amd. by Laws of 1910, chap. 706, and Laws of 1911, chap. 732.) By chapter 664 of the Laws of 1915 the statute in question was changed to its present form, except for the concluding clause beginmng with the words “ or when the transfer is by will or intestate law of capital invested,” wMch was added by chapter 323 of the Laws of 1916 (§ 83). It is the contention of the appellant that the amendments in question were made in order to meet a defect in the former law, by wMch a non-resident might incorporate a real estate corporation, convey to it Ms real estate in the State of New York, receiving corporate stock in return, and as tMs was intangible property, thus avoid the imposition of a transfer tax upon Ms real estate holdings. Thus a premium is claimed to have been placed upon owners of large amounts of real estate becoming non-residents of tMs State. It is claimed that the amendment of 1915 was passed so as to make any evasion of the law impossible, by having it apply not only to stock thus issued, but to any note, bond or other evidence of indebtedness given in return for the conveyance of real estate. However persuasive such an argument may be when directed to the taxability of securities received in exchange for real estate under such conditions, or to the taxability of debenture bonds issued by a corporation secured by a mortgage upon all the corporate property, it has no application to the case at bar. The statute does not purport to tax corporate mortgages as such; the word “ mortgage ” nowhere appears therein. What is sought to be taxed is the interest of the decedent in a corporation, evidenced by certain classes of documents. The corporate bond sought to be taxed is not one wMch is merely an evidence of indebtedness, secured by a mortgage on a single specific parcel of real estate belonging to the corporation. The whole section
The order appealed from is, therefore, aflirmed, with ten dollars costs and disbursements to respondent.
Clarke, P. J., Latjghlin, Smith and Shearn, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.