Court Opinion

ID: 5275778
Source: CourtListenerOpinion
Date Created: 2022-01-06 21:39:03.899367+00
Date Added: 2024-06-11T08:28:18.016032
License: Public Domain

Hinman, J. (dissenting):
I cannot agree that this transaction was a mere deposit and return of stock certificates, or a mere loan of stock. There was a *360transfer of stock indorsed in blank. There was a delivery of the stock certificates to the depositary as the agent of the committee. The committee was empowered by the agreement to vote the stock. Not only possession of the stock was lost, but control of it was lost to the stockholder. He was cut off from all interference with the stock for the period of a year unless the plans were carried out sooner or the committee saw fit to terminate the plans sooner. There was more than mere physical possession. There was a transfer in blank with the right of the committee through its agent to hold physical possession during the period set in the agreement. It was more than a power of attorney revocable at will or the delivery of stock to a stenographer to copy or to a messenger to place in a safe deposit box or to a friend for custody. There was not only possession but the right to continued possession under the indorsement in blank and the agreement, the latter containing mutual covenants furnishing consideration and granting potential voting powers even though not actually exercised and providing the committee, with the right to exercise individual discretion in furtherance of the agreement and to decide some of the details of the plan without resort to further authority from the stockholder and without the power of interference by the stockholder.
When we consider these facts in connection with the language of the taxing statute (Tax Law, § 270, as in effect in 1917) it seems to be a taxable transfer. The statute expressly states that a transfer of stock is taxable “ whether investing the holder with the beneficial interest in or legal title to said stock.” The mere recital in the agreement that it “ shall not be deemed to transfer, assign or vest to or in the committee any title or beneficial interest to or in said certificates or the stock represented thereby,” cannot be utilized to save a tax which the statute expressly creates notwithstanding such an agreement. I think there was a voting trust created and intended. All of the powers granted were not exercised but if the agreement had not been made and the stock transferred to the committee, who can say that the negotiation thus brought about would otherwise have become an accomplished fact? There was “ possession ” and “ use ” in the sense of the statute. The power to use created by the transfer and the agreement and the signatures of sufficient stockholders brought about the carrying out of the agreement just as much as though every power delegated to the committee had been exhausted in the effort. If a man with pistol in hand protects himself from harm or otherwise accomplishes his purpose without discharging the weapon, can it be said that the weapon in his possession was of *361no use? Its use was in the persuasive power which it exercised. It overcame opposition and produced a result. It was a “ possession ” and a “ use ” for a “ purpose.” That is the most that the statute requires in this case. In fact the statute uses the expression “ possession or use thereof for any purpose.”
I think the judgment should be affirmed, with costs.
Kellogg, J., concurs.
Order and judgment reversed on the law, and judgment directed in favor of the claimant for the amount of its claim, with interest and costs.