Defiance Paper Co. v. Browne

Memorandum by the Court. On December 1,1927, the Defiance Paper Company executed a trust indenture to the Niagara Falls Trust Company, trustee, which was the predecessor of the Power City Trust Company of Niagara Falls, trustee, mortgaging real estate and personal property to secure an issue of bonds in the amount of five hundred thousand dollars. This trust indenture was recorded [932] in the Niagara County clerk’s office and the mortgage recording tax paid thereon. On December 1, 1939, of these bonds there was unpaid and outstanding $238,800, which were on that date called in and new bonds issued in exchange therefor to their holders. On the same date, the present, trust indenture was executed by the Defiance Paper Company to the Power City Trust Company, as trustee, to secure payment of this $238,800 and by this instrument certain additional personal property was pledged in pursuance of a request made in accordance with the terms of the 1927 trust indenture. Certain of the real and personal property pledged under the 1927 indenture had previously been released. The new indenture was recorded without the payment of a recording tax under the claim of the petitioner that it was an additional mortgage under section 255 of the Tax Law and exempt from the recording tax. After the recording, the Tax Commission advised the county clerk that the new indenture was taxable. A hearing was then noticed by the State Tax Commission pursuant to Tax Law, section 251, to review the determination of the recording officer of Niagara County and apparently a hearing was held, at which only documentary evidence or affidavits were received in evidence. The return of the Tax Commission does not include any minutes of such hearing, but the decision of the Tax Commission recites that the Commission had instituted a proceeding to review the determination of the recording officer and that notice of a hearing had been given at which there were appearances for the petitioner and the trustee and that the determination was made after “ examination of the record and proofs presented ”, The State Tax Commission determined that the mortgage was subject to the recording tax and the determination of the recording officer was annulled. It thus appears that there was a hearing of some sort at which evidence was 'taken. There is now no substantial dispute upon the facts and the question is whether the facts authorized the determination of the Commission. Consequently the proceedings should have been transferred for disposition to this court and we shall treat the matter as if it had been properly so transferred. (Civ. Prae. Act, § 1296.) Upon the merits, the determination of the Special Term was correct. The instrument was not taxable. (Tax Law, § 255.) Determination of State Tax Commission annulled, with fifty dollars costs and disbursements.