People Ex Rel. United States Title Guaranty Co. v. State Tax Commission

Cabdozo, J. One Flor executed a.bond and mortgage in favor of the relator for $4,500. The mortgage contained a covenant that “ upon the request of the mortgagor ” the mortgagee might “ at its option ” satisfy the *104 mortgage, and make a larger loan, to be secured by a new mortgage, in lieu of the one discharged. Thereafter the bond was canceled, the mortgage satisfied of record, and a new mortgage, securing a new bond for $5,000, and running for a longer term, delivered to the lender. The mortgagee, when offering the latter mortgage for record, tendered payment of a tax computed upon $500, the difference between the old loan and the new one. The register of Kings county refused to accept the mortgage for record without payment of a tax to be measured by the total debt secured. A determination of the state tax' commission confirming the ruling of the register was reversed by the Appellate Division on the authority of People ex rel. Home Mortgage Investment Co. v. State Board of Tax Commissioners (182 App. Div. 699). The case is now here on the appeal of the commission. We think the tax is to be measured by the- total debt secured. Section 253 of the Tax Law (Consol. Laws, chap. 60) imposes upon every mortgage recorded within the state “ a recording- tax ” of fifty cents for each one hundred dollars of the piincipal secured thereby. The recording tax is due upon this mortgage as upon others unless the transaction is within some exception established by a later section. The only exceptions suggested are those of section 255, headed “ supplemental mortgages,” • which provides that “ if subsequent to the recording of a mortgage oh which all taxes, if any, accrued under this article have been paid, a supplemental instrument or mortgage i's recorded for the purpose of correcting or perfecting any recorded mortgage, or pursuant to some provision or covenant therein, or an additional mortgage is recorded imposing the hen thereof upon property not originally covered by or not described in such recorded primary mortgage for the purpose of securing the principal indebtedness which is or under any contingency may be secured by such recorded primary mortgage, such additional instrument or mortgage shall not be subject to *105 taxation under this article, unless it creates or secures a new or further indebtedness or obligation other than the principal indebtedness or obligation secured by or which under any contingency may be secured by the recorded primary mortgage, in which case, a tax is imposed as provided by section two hundred and fifty-three of this chapter on such new or further indebtedness or obligation, and shall be paid to the proper recording officer at the time such instrument or additional mortgage is recorded.” We think that none of these exceptions is applicable here. The mortgage now in controversy is not a supplemental one at all. It does not correct or perfect any error or omission. It is not made “ pursuant to some provision or covenant ” contained in an existing mortgage, i. e., in fulfillment of some obligation to give or to accept it. The statement that the mortgagee shall have the option to accept another and larger mortgage at the mortgagor’s request is not a covenant at all. It is not a “ provision ” imposing some obligation “ pursuant to ” which anything has been or could be done. It is merely an assertion that the parties have capacity to make another contract if they please. In this respect the case is unlike People ex rel. Home Mortgage Investment Co. v. State Board of Tax Commissioners (182 App. Div. 699), relied on by the Appellate Division. There the mortgagor was not merely privileged, but required, to make a new mortgage if requested. Finally, the mortgage before us is not a supplemental instrument imposing a lien upon property “ not originally covered by or described in ” the mortgage first recorded. These are the only exceptions established by the statute. We are not empowered to add to them upon the theory that they might reasonably have been extended by the legislature to kindred situations. We take the statute as we find it. The heading “ supplemental mortgages ” supplies the key to its construction, if that were otherwise uncertain. Nothing merely complementary or auxiliary *106 will be found in this transaction. The mortgage first recorded and the obligation that went with it have not been supplemented, but superseded. One lien with its accompanying bond has been satisfied of record and destroyed. Another hen, securing another bond, has been created in its place. There is a new transaction with a new tax. The order of the Appellate Division should be reversed, and the determination of the state tax commission confirmed, with costs in the Appellate Division and in this court. His cock, Ch. J., Collin, Hogan, Pound, Crane and Andrews, JJ., concur. Order reversed, etc.