Case Name: The People of the State of New York ex rel. Park Row Realty Company, Relator, v. Martin Saxe and Others, as State Tax Commissioners, and the State Tax Commission of the State of New York, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1917-11-14
Citations: 180 A.D. 103
Docket Number: 
Parties: The People of the State of New York ex rel. Park Row Realty Company, Relator, v. Martin Saxe and Others, as State Tax Commissioners, and the State Tax Commission of the State of New York, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 180
Pages: 103–111

Head Matter:
The People of the State of New York ex rel. Park Row Realty Company, Relator, v. Martin Saxe and Others, as State Tax Commissioners, and the State Tax Commission of the State of New York, Defendants.
Third Department,
November 14, 1917.
Tax — when prior mortgage should not be deducted from value of real estate in fixing tax on mortgage given to secure unlimited future advances.
In ascertaining the value of real estate in fixing the 'mortgage tax under sections 253 and 256 of the Tax Law, on a mortgage given to secure unlimited future advances, a prior mortgage should not be deducted, where the statement provided by section 256 of the Tax Law showing the limit of the advances has not been filed.
The absence of such statement indicates that the amount to be advanced was not limited to the then value of the equity of redemption.
Such tax is not upon the real estate, but upon the debt or obligation secured by the mortgage. If the mortgage fails to show the amount of the debt or obligation secured, the value of the mortgaged property is made the measure for computing the tax.
Woodwabd and Sewell, JJ., dissented, with opinion.
Certiorari issued out of the Supreme Court and attested on the 17th day of May, 1916, directed to Martin Saxe and others, as State Tax Commissioners, and the State Tax Commission, commanding them to certify and return to the office of the clerk of the county of Albany all and singular their proceedings had in determining the value of certain property of the relator for the purposes of a mortgage tax.
The determination of the Tax Commission made on April 20, 1916, and under review refused to deduct the amount of the prior mortgage from the value of the real estate in fixing the mortgage tax under sections 253 and 256 of the Tax Law on a mortgage given to secure future advances and unlimited as to amount.
Charles Stewart Davison [George W. Phillips, Jr., of counsel], for the relator.
Merton E. Lewis, Attorney-General [James S. Y. Ivins, Deputy Attorney-General, of counsel], for the defendants,

Opinion:
Kellogg, P. J.:
If it had been the intention of the parties to limit the advances to the value of the equity of redemption, they would have filed the statement provided by section 256 of the Tax Law showing such limit. The absence of such statement indicates that the amount to be advanced was not limited to the then value of the equity of redemption.
This mortgage was apparently made to cover the uncertainties of the future and with the idea that financial difficulties might arise, and to protect the parties against all possibilities. It was not apparent when the stringency and trouble in the financial world then threatening might strike, or when the advances under the mortgage would begin or end. It was quite possible that the prior mortgage might be paid before any advances were made upon this mortgage, or during the time that advances were being made. Evidently this mortgage was intended as a continuing security for advances which might be made from time to time during its existence.
The tax is not upon the real estate but upon the debt or obligation secured by the mortgage. (§§ 253, 256.) If the mortgage fails to show the amount of the debt or obligation secured, the value of the mortgaged' property is made the measure for computing the tax.
I think that within section 256 of the Tax Law the prior mortgage is not to be deducted in assessing the value of this mortgage. The property secured by the mortgage was the Park Row Building and No. 3 Park Row, worth $3,660,000, owned by the mortgagor. The judgment and pleasure of the mortgagees, from time to time, was the only limit contemplated by the mortgage on the amount which might be advanced upon and secured by it. Undoubtedly in making the advances, they would from time to time be interested in knowing whether the first mortgage remained a lien upon the property. If the first mortgage was discharged they would undoubtedly consider the land as a security for a much larger sum than the value of the equity of redemption at the time the mortgage was made.
I favor an affirmance.
All concurred, except Woodward, J., who dissented, with opinion, in which Sewell, J., concurred.