Case Name: In the Matter of New York Connecting Railroad Company, Petitioner, against State Tax Commission, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1947-09-18
Citations: 272 A.D.2d 991
Docket Number: 
Parties: In the Matter of New York Connecting Railroad Company, Petitioner, against State Tax Commission, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 272
Pages: 991–991

Head Matter:
In the Matter of New York Connecting Railroad Company, Petitioner, against State Tax Commission, Respondent.

Opinion:
The petitioner instituted a special proceeding in the Supreme Court by service of petition and notice of motion seeking to review a determination of the State Tax Commission which confirmed the imposition by the Register of New York County of a mortgage recording tax of $129,910 under article 2 of the Tax Law. The petitioner paid the tax under protest. This proceeding to review was transferred to this court by order of the Albany County Special Term entered January .10, 1947. It appears that the petitioner, the New York Connecting Railroad Company, mortgaged its real and personal property within the State of New York to the Guaranty Trust Company by a mortgage known as the " New York Connecting Railroad Company, First Mortgage, dated October 1, 1940 ", and pursuant to the terms of which mortgage $25,330,000 of 3%% Series A Bonds, due October 1, 1965, were issued, and a mortgage recording tax of $136,665 was paid to the Register of New York County on October 31, 1940. In 1945 the company was desirous of replacing these Series A Bonds, bearing 3%% interest, with a new Series B Bonds bearing 2%% interest. The purpose of the issuance of the Series B Bonds was pursuant to a refinancing plan to save on interest payments. Series B- Bonds, bearing 2%% interest, due October 1, 1975, were issued and sold to the highest bidder, and the proceeds thereof, together with some additional funds furnished by the company were used to retire all Series A 3%% Bonds due in 1965. Upon the certificate of the treasurer of the company, the Register of New York County imposed a mortgage recording tax of $129,910, based upon the $25,982,000 new Series Bonds issued. By the manner in which the Series B Bonds were sold, there was created a new relationship, new creditors and a new loan. The determination of the State Tax Commission is confirmed on the authority of Matter of New York, N. 3. & 3. B. B. Co. (State Tax Comm.) (266 App. Div. 470 [1943], motion for leave to appeal denied 291 N. Y, 830); also Matter of Brie B. B. Co. v. State Tax Commission (260 App. Div. 268 [1940], affd. 284 N. Y. 673) and People v. Boston & Maine Bailroad, 202 App. Div. 54 [1922], afid. 234 N. Y. 629), with $50 costs and disbursements. All concur. [See post, p. 1085.]