| NY | Jun 14, 1927
On May 19, 1911, the Masief Building Construction Company, then the owner of the mortgaged premises, executed and delivered to New York Mortgage *416 and Security Company a mortgage to secure the payment of $140,000 on premises situate in the borough of Brooklyn. This mortgage was recorded the following day in Kings county register's office, and the full amount of the mortgage tax was paid. The mortgage contained this provision:
"It is expressly understood and agreed that the party of the second part, its successors or assigns, if it so elects, mayreplace this mortgage by twelve permanent mortgages, each to cover a portion of the hereinbefore described premises, and which twelve mortgages shall be given as security for a sum aggregating the amount of the principal sum secured hereby."
On August 23, 1912, the L. M. Realty Company, which had become the owner of the property in question, executed twelve separate mortgages, each covering a portion of the same property. The twelve, apparently in varying sums, aggregated $134,750, being the amount of the original mortgage, less payment made on the principal. The question here relates to one of these mortgages given to secure the sum of $14,000. This mortgage was recorded August 26, 1912, and when presented to the recording officer it was accompanied by the affidavit of an officer of the mortgagee stating, in substance, that the mortgage was given pursuant to the provisions of the original mortgage; that there had been erected on the premises described in the first mortgage twelve separate buildings, and that the original mortgage was being satisfied when these additional, separate mortgages were given. The mortgage was accepted and recorded without the exaction of a further recording tax, the exemption being noted on the record; and so the matter stood for more than twelve years. On February 6, 1925, notice was given that claim for exemption had been denied and that a mortgage recording tax of $70 with a penalty of $70.40 were due and payable; and that no assignment, extension, release or satisfaction could *417 be accepted for record until payment thereof was made. (Tax Law [Cons. Laws, ch. 60], § 258.)
In the meantime the $14,000 mortgage had been paid and a new mortgage for $12,000 given to the relator, which, it is said, in taking the new mortgage relied on the record standing for twelve years as evidence that the preceding mortgage was not subject to tax. Because of the non-payment of the tax on the $14,000 mortgage, the register refused to discharge it of record (Tax Law, §
The question is whether the $14,000 mortgage is subject to the mortgage tax under section
"If subsequent to the recording of a mortgage on which all taxes * * * have been paid, a supplemental instrument ormortgage is recorded for the purpose of correcting or perfecting any recorded mortgage, or pursuant to some provision or covenanttherein, or an additional mortgage is recorded imposing the lien thereof upon property not originally covered by or not described in such recorded primary mortgage for the purpose of securing the principal indebtedness which is or under any contingency may be secured by such recorded primary mortgage, such additional instrument or mortgage shall not be subject to taxation under this article, unless it creates or secures a new or further indebtedness or obligation other than the principal indebtedness or obligation secured by or which under any contingency may be secured by the recorded primary mortgage. * * *" *418
As indicated by our decision in People ex rel. N.Y. Title Mortgage Co. v. State Tax Commission (
Another reason defeats the claim of exemption in this case. Section
The order of the Appellate Division should be reversed and the determination of the State Tax Commission confirmed, with costs in this court and in the Appellate Division.
CARDOZO, Ch. J., CRANE, ANDREWS, KELLOGG and O'BRIEN, JJ., concur; LEHMAN, J., absent.
Ordered accordingly. *419