Court Opinion

ID: 5307886
Source: CourtListenerOpinion
Date Created: 2022-01-08 03:36:56.445219+00
Date Added: 2024-06-11T08:29:09.881930
License: Public Domain

Van Kirk, P. J.
(concurring). The original $95,000,000 of bonds were actually certified and the tax thereon paid. Not all of these bonds were actually delivered. There were already outstanding underlying bonds secured by several mortgages executed by the corporations which later became parties to the consolidation contract and original bonds were reserved in an amount sufficient to pay these underlying bonds. The $40,490,000 of bonds which are the subject of this proceeding were authorized and certified to refund or take the place of these underlying bonds under a reorganization agreement made subsequent to the consolidated mortgage; they will likewise replace the reserved original bonds in like amount.
The recording tax is measured by the “ principal debt or obligation which is, or under any contingency may be secured at the date of the execution thereof or at any time thereafter by a mortgage on real property * * (Tax Law, § 253, as amd. by Laws of 1916, chap. 323.) Whether or not these underlying bonds became directly, by statute (Railroad Law, § 143) or by the terms of the mortgage, a part of the principal debt or obligation secured by the mortgage, they are a part of an obligation which under some contingency might be secured by this mortgage. The consolidated bonds reserved, or new bonds, could at any time by agreement between the parties be substituted for these bonds. For this reason the amount of these bonds was included in the measure of the mortgage tax paid. It seems to me, therefore, that we cannot consider the debtor under these bonds as other than the debtor under the consolidated bonds within the meaning of this statute.
*366In case of trust mortgages by corporations, the recording tax may be paid measured by the principal indebtedness existing at the time of the execution and delivery of the mortgage; and “ whenever a further amount is to be advanced under the original mortgage, or shall accrue thereon or become secured thereby, the corporation making such mortgage shall pay the tax on such amount.” (Tax Law, § 259, as amd. by Laws of 1917, chap. 573.) The question here then is simply whether or not, by substitution of the new consolidated bonds for these underlying bonds, a further amount is advanced and has become secured by the original mortgage,
The real distinction between the old Boston & Maine case (202 App. Div. 54) and the New York State Gas & Electric case (209 id. 771) is that in the former the outstanding bonds were past due, while in the latter they were not. The statement in the opinion in the former in substance that the new bonds were sold in the open market and the outstanding bonds paid in cash was made upon a stipulation later found to be inaccurate. In fact the new bonds were directly substituted for the old. In the instant case, part of the outstanding bonds were past due and part were not due when the new bonds were substituted for the old. We are about to hold that the mortgagor and the bondholders by an agreement which is not a covenant or made in pursuance of the mortgage, but is simply a private contract to which the State was not a party, can keep an old indebtedness alive perpetually. We think we are committed to this position under the opinion in the latter case. There the time within which the old debt matured was extended materially and it was held that no further sum was advanced. It is not a distinguishing difference that in the one case the extension agreement is executed and carried out a few days before the old indebtedness matured, and in the other a few days after.
Hinman and Hasbeotjck, JJ., concur.