Court Opinion

ID: 6886655
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:30:11.527889+00
Date Added: 2024-06-11T16:05:43.893142
License: Public Domain

L. HAND, Circuit Judge
(dissenting in part).
I dissent as to the taxes paid upon those transactions in which the taxpayer took over the equity without foreclosure. In these instances the mortgagee received a deed of the equity and paid a tax based upon the cash which it paid to the mortgagor. On this record we are justified in assuming that the amount so paid was the value of the equity at the time of the transfer. The .“value of the interest or property conveyed, exclusive of the value of any lien or encumbrance remaining thereon at the time of sale,” was therefore the cash and the plaintiff had conformed to that clause of the statute. If it was liable for more, that must be because it gave some other consideration. The theory on which it was held liable and which my brothers accept, is that the cancellation of the bond — for I agree that it came to that — must be presumed to have been a consideration measured by its face. Article 112 so declares, and arguendo I shall assume that it is valid in the ordinary case where a mortgagee may sue upon the bond, as obligee, and recover in full. I confess to some,doubt whether even so the value of the land should not be set off; but that doubt need not be laid here. For in New York the mortgagee during the period with which we are concerned, had no right to recover on the bond anything whatever beyond the difference between its face and the value of the mortgaged property at the time of foreclosure. I see no reason for construing the words, “the amount of the mortgage debt,” in Article 112 as meaning more than the amount of. that part of the debt which the mortgagee, as obligee, could by any means recover. It seems to me most unreasonable to suppose that the tax was to be levied upon any part of it for the collection of which the creditor had no sanction. As I read the New York law, the effect of it is the same as though it had declared that “the mortgage debt” was paid up to the value of the land at the time of the foreclosure.