The Secured Debts Tax Law of the State of New York AND The Mortgage Tax Law of the State of New York (As Amended in 1916) Guaranty Trust Company of New York The Secured Debts Tax Law of the State of New York and The Mortgage Tax Law of the State of New York Guaranty Trust Company of New York 140 Broadway- Fifth Avenue Office London Office Fifth Ave. & 43d Street 33 Lombard St., E. C. ««n 01 V Copyright, 1916 Guaranty Trust Company of New York FOREWORD. .... . The Secured Debts Tax Law, 'as enacted April 30, 1915 and constituting Article 15, of the Tax Law, was re-enacted in substantially the same form by Chapter 261 of the Laws of 1916, in effect April 21, 1916. (1) Definition of " Secured Debt." (a) Any bond, note or debt secured by mortgage of real property situated wholly without the State of New York. (b) A proportion of the value of a bond, note or debt when the security is real property situated both within and without the State of New York. (c) Any bond or note forming part of a similar series, secured by mortgage or deed of trust of real or personal property, or both, which mortgage or deed of trust is not recorded in the State of New York but in some other place. (d) Any bond or note forming part of a similar series secured by the deposit of valuable se- curities as collateral whether such collateral is within or without the State of New York. (e) Bonds, debentures or notes forming part of a similar series, which by their terms are not payable within one year from their date of is- sue, and which are not secured by deposit or pledge of any collateral security. (Sec. 330, Page 16.) 342347 These definitions inch,de publie bonds of States other than New York, and obligations of foreign countries and their political sub-divisions. Ordinary promissory notes can not be made exempt. (2) What the tax is. A special tax at a fixed rate payable at the option of the holder in respect to a "secured debt," which exempts the "secured debt" for a limited period from the annual personal property tax. (3) The rate of tax. 75c. per each $100. or frac- tion thereof of the face value of the "secured debt." (Sec. 331. Page 17.) (4) Period of exemption secured. Five years from the date of the payment of the tax (Sec. 331. Page 17.) (5) To obtain exemption for the year 1916. To obtain exemption from the personal property tax for the year 1916 in New York City, the tax must be paid before assessment day, which is October 1st. (6) When the tax may be paid. Any time prior to January 1, 1917. After this date "secured debts" may not be made tax exempt without further action by the Legislature. (Sec. 331. Page 17.) (7) How exemption is secured. By payment of the tax to the Comptroller of the State of New York at his office in Albany, or at his branch office in the Woolworth Building, New York City. Payment of the tax is evidenced by stamps affixed to the "secured debt/' and cancelled. (Sec. 331, 332, 333. Pages 17-18.) (8) The secured debt, itself, must be presented and stamped. The Laws of 1911 and 1915 permitted a description of the secured debt to be presented and the tax paid thereon. (Sec. 331, 332, 333. Pages 17-18.) (9) Secured debts may be registered no matter what the denomination. This continues the provi- sion of the Law of 1915. Under the Law of 1911 they could not be registered if in denominations exceeding $1,000. (10) Offset of debts. A person holding a secured debt as an investment, on which the tax has not been paid, may not deduct his just debts against the assessed value of such secured debts. Persons holding secured debts, not as investments, but temporarily in their possession for sale, and actually engaged in the purchase and sale of such securities as a business, and maintaining an office or place of business in this State for carrying on an actual bona fide business of purchasing and selling such securities, as distin- guished from their purchase for investment, shall be al- lowed to deduct their just debts from the tax against the 5 assessed value of such secured debts, provided that the secured debts have not been owned and held for a longer period than eight months. (Sec. 336. Page 20.) (11) Exemption of secured debts upon which tax has previously been paid. (a) Where the tax has been paid upon a secured debt under the Law enacted September 1, 1911, and prior to the first day of May, 1915, such secured debt is stated to be exempt from personal property tax until maturity. (Sec. 338. Page 21.) (b) Where the tax has been paid upon secured debts under the Law effective April 30, 1915, and between the first day of May, 1915, and November 1, 1915, such secured debt remains exempt from personal property tax for a pe- riod of Five Years from the date of the pay- ment of the tax. (Sec. 339. Page 21.) Note — Section 6 of Article 1 of the Tax Law provides that all personal property subject to taxation shall be assessed at its full value, but the owner of personal property shall be allowed a deduction from the full value of his taxable per- sonal property to the extent of the "just debts" owing by him. The "just debts" which may be deducted have been denned in the circular published by the Department of Taxes and Assessments of the City of New York as — "1 — Amount owing on bond and mortgage, on which the person claiming the offset is liable, while he remains the owner. 2 — Amount owing on promissory notes. 3 — Amount owing on book debits or contracts. Just debts do not include contingent liabilities as guarantor or endorser, unless such liabilities have be- come fixed, or debts incurred for the purpose of evading taxation." (12) History. The so-called Secured Debts Tax Law was first enacted September 1, 1911, as an addition to Chapter 62 of the Laws of 1909, entitled : "An Act in Relation to Taxation, Constituting Chapter 60 of the Consolidated Laws." Its first enactment provided for a tax at the rate of one-half of one per cent, on the secured debt, which thereafter was exempt from the personal property tax for an unlimited period. The operation of the Law was suspended by Chapter 169 of the Laws of 1915, effec- tive April 1, 1915, which provided that secured debts might be registered and the tax paid after the first day of May, 1915, and which, therefore, suspended the op- eration of the Act between April 1st and the first day of May. Chapter 465 of the Laws of 1915 radically amended the Law of 1911, changing the rate of the tax from one-half of one per cent, to three-quarters of one per cent, and limited the time during which the bonds could be exempted to the period between May 1, 1915, and November 1, 1915, providing that the exemption should be only for five years from the date of payment of the tax. The present "Secured Debts Tax Law," in all its es- sential features, is the same as the Law of 1915. The relation of the secured debts tax law to the mortgage tax law. The mortgage tax law was designed as a specific tax on mortgages, recorded in the State of New York and secured by real property therein. Such mortgages are, generally speaking, of two kinds: (a) Mortgages given by a corporation or an indi- vidual where there is only one bond or obli- gation, running either to a corporation or an individual. (b) Mortgages which are made by corporations, and in certain instances by an individual or individuals, to Trustees under which a series of bonds or obligations are issued which are held by various persons. The Law provides that a tax of one-half of one per cent, shall be paid upon all mortgages recorded subse- quent to July 1, 1906. If, at the time the obligation was recorded, the entire amount of the mortgage was not advanced, the tax was to be paid upon the amount then advanced, and upon subsequent advances as they were made. Upon payment of the tax, the obligation or obligations issued thereunder are exempt from per- sonal property tax for life of the obligation. In the case of a mortgage recorded prior to July 1, 1906, under which the entire advances had not been made, the tax was required to be paid upon the advances made subsequent to July 1, 1906, and the obligations evidencing such advances, and such only, were tax ex- empt. The holder of a mortgage recorded prior to July 1, 1906, or the owner of a serial bond issued and outstand- ing under a mortgage recorded prior to July 1, 1906, 8 could mate the mortgage or bond tax exempt by pre- senting it to the recording officer of the county where the mortgage was first presented for record and option- ally subject it to the mortgage tax on the payment of which the security was exempt from the personal prop- erty tax. The secured debts tax law was designed to provide a method of exempting from the personal property tax, mortgages upon property lying without the State of New York and recorded without this State, and any other bonds or notes forming part of a series of similar bonds, notes or obligations issued under a deed of trust, irrespective of whether such bonds or notes were secured by a mortgage upon real property. It also applies to public bonds of States other than New York, to foreign countries tnd their political sub-divisions. The primary purpose of the mortgage tax law was to provide a specific tax, with the accompanying ex- emption from the general property tax, for mortgages recorded in the State of New York The primary purpose of the secured debts tax law was to provide a specific tax, with the exemption from the general property tax, for mortgages, and bonds secured by mortgages which were recorded without the State of New York, and for other serial obligations. 9 A mortgage secured by real property both within and without the State of New York may be affected • by both laws. Property, both within and without the State of New York, in many instances, was covered by corporate mortgages. In such an instance, the mort- gagor company was required to have a determination made of the proportion which the value of the mortgaged property situated within the State of New York bore to the value of the entire mortgaged property or prop- erties. The recording tax could only be paid by the mortgagor company in respect to that determined pro- portion and the serial bonds issued thereunder could be made tax exempt under the Mortgage Tax Law, only in that proportion. This left, in many instances, a cer- tain proportion of a bond, in the hand of the owner, which was not tax exempt but was subject to the general property tax. To cure this situtation, the Secured Debts Tax Law of • 1915 and 1916 provided that the owner of such a bond could exempt such proportion of his bond as was not al- ready exempt under the Mortgage Tax Law by paying seventy-five cents per $100., or fraction thereof, upon such unexempt proportion. (Sec. 330. Page 15, Sec. 340. Page 22.) Thereupon, a proportion of his bond was exempt for an unlimited period, under the Mortgage Tax Law, and a proportion exempt for a period of Five Years under the Secured Debts Tax Law. To remedy this situation, two amendments to the Mortgage Tax Law, viz: Chapters 335 and 337 of the Laws of 1916, 10 constituting Sees. 260, 264 of the Mortgage Tax Law, Pages 38, 48 were enacted. These provide, in effect, that the mortgagor company, at the time when the mortgage is recorded, may waive the determination of the propor- tion of the value lying within and without the State of New York and may pay the entire tax as if the proper- ties lay wholly within the State of New York and that, thereupon, the bonds should be exempt from the personal property tax. If, however, the mortgagor company does not elect to waive such determination and pays the tax only upon the proportion of the value of the mortgaged properties within the State of New York, the holder of such a bond may, at its option, present the bond to the recording officer of the county where the mortgage, under which the bond was issued, was first recorded and himself pay the tax upon the proportion which has not been previously exempted, thereby making his entire bond exempt from the personal property tax. It will thus be seen that the proportion of a bond not exempted by the mortgagor company may be made exempt either under the provisions of the Secured Debts Tax Law by payment of seventy-five cents per $100., or fraction thereof, in respect to such proportion, whereupon the ex- emption runs for only five years from the date of pay- ment of the tax, or, under the Mortgage Tax Law, such proportion may be made exempt for the life of the obli- gation by payment of one-half of one per cent, on such proportion. 11 It is clearly to the advantage of the holder of such a security to take advantage of the provi- sions of the Mortgage Tax Law, thereby securing a lower rate of tax and exemption for the life of the obligation. For the convenience of the reader, we have appended to the Secured Debts Tax Law the text of the Mortgage Tax Law, containing the amendments thereto, enacted at the last session of the Legislature. 12 The Tax on Secured Debts Being Chapter 802 of the Laws of 1911, in effect September 1, 1911, as amended by Chapter 465 of the Laws of 1915, in effect April 30, 1915, and Chapter 261 of the Laws of 1916, in effect April 21, 1916. ARTICLE 15 Tax on Secured Debts Section 330. Definitions. 331. Payment of tax on secured debt. 332. Stamps; how prepared and used. 333. No exemption unless stamps are affixed and can- celed. 334. Contracts for dies; New York City office; ex- penses, how paid. 335. Illegal use of stamps; penalty. 336. No deduction of debts against taxable secured debt. 337. Application of taxes. 338. Exemption where tax has been paid on secured debts before May 1, 1915. 339. Exemption where tax has been paid on secured debts between May 1, 1915, and November 1, 1915. 340. Apportionment of value of secured debt secured by mortgage of property situated partly within and partly without the state. Sec. 330. Definitions. The words "secured debts", as used in this article, shall include : (1). Any bond, note or debt secured by mortgage of real property situated wholly without the state of New York. (2). Such proportion of a bond, note or debt, in- cluding a bond, note or printed obligation forming part of a series of similar bonds, notes or obligations, se- cured by mortgage or deed of trust recorded in the state of New York of property or properties situated partly within and partly without the state of New York as the value of that part of the mortgaged prop- Note. Important new matter which has been inserted in the law will be found i n italics. 15 erty or properties situated without the state of New York shall bear to the value of the entire mortgaged property or properties. (3). Any and all bonds, notes or written or printed obligations, forming part of a series of similar bonds, notes or obligations, the payment of which is secured by a mortgage or deed of trust of real or personal prop- erty, or both, which mortgage or deed of trust is recorded in some place outside of the state of New York and not recorded in the state of New York. (4). Any and all bonds, notes or written or printed obligations, forming part of a series of similar bonds, notes or obligations, which are secured by the deposit of any valuable securities, as collateral security for the payment of such bonds, notes or obligations, under a deed of trust or collateral agreement held by a trus- tee. (5). Any bonds, debentures or notes, forming part of a series of similar bonds, debentures or notes, which by their terms are not payable within one year from their date of issue, and the payment of which is not secured by the deposit or pledge of any collateral security. The term "secured debts" as used in this article shall not include securities held as collateral to secure the payment of bonds taxable under this article or under article eleven of this chapter. * Sec. 331. Payment of tax on secured debt. 'After this article takes effect and before the first 16 day of January, nineteen hundred and seventeen, any person may take or send to the office of the comp- troller of this state any secured debt, and may pay to the state a tax at the rate of seventy-five cents on each one hundred dollars or fraction thereof of the face value of such secured debt, under such regulations as the comptroller may prescribe, and the comptroller shall thereupon affix secured debt stamps hereinafter pro- vided for, to such secured debt, which stamps shall be duly signed by the comptroller or his duly authorized representative and dated as of the date of the payment of such tax. The comptroller shall keep a record of such secured debt together with the name and address of the person presenting the same and the date of regis- tration. All such secured debts shall thereafter be ex- empt from all taxation in the state or any of the mu- nicipalities or local divisions of the state except as pro- vided in sections twenty-four, one hundred and eighty- seven, one hundred and eighty-eight and one hundred and eighty-nine of this chapter, and in articles ten and twelve of this chapter, for the period of five years from the payment of such tax. Sec. 332. Stamps, how prepared and used. Adhesive stamps for the purpose of indicating the payment of the tax provided for by this article shall be prepared by the comptroller, in such form, and of such denominations and in such quantities as he may from time to time prescribe. Upon the payment of the 17 tax provided by this article upon any secured debt the comptroller shall affix stamps of the proper denomina- tions, equal in face value to the amount of tax paid, to the secured debt, and shall cancel the same by the seal of his office or by such other canceling device as he may prescribe. Sec. 333. No exemption unless stamps are affixed and canceled. The payment of the tax upon any secured debt, as provided in this article, shall not exempt such secured debt from taxation, as pro- vided in section three hundred and thirty-one, unless stamps to the proper amount are affixed and canceled, as provided in the preceding section. Sec. 334. Contracts for dies; New York City office; expenses, how paid. The state comptroller is hereby directed to make, enter into and execute for and in behalf of the state such contract or contracts for dies, plates and printing necessary for the manufacture of the stamps provided for by this article, and provide such stationery and clerk hire, to- gether with such books and blanks as in his discretion may be necessary for putting into operation the pro- visions of this article; he shall be the custodian of all stamps, dies, plates or other material or thing fur- nished by him and used in the manufacture of such state tax stamps. In addition to the receipt of taxes payable as provided in this article at his office in the 18 city of Albany, the comptroller shall maintain an office for the receipt of such taxes in the city of New York. He shall appoint, and may at pleasure remove, such assistants, clerks and other persons as may be necessary to carry out the provisions of this article and shall fix and determine their salaries. All expenses in- curred by him and under his direction in carrying out the provisions of this article shall be paid to him by the state treasurer from any moneys appropriated for such purpose. Sec. 335. Illegal use of stamps; penalty. Any person who shall willfully remove or cause to be removed, alter or cause to be altered the canceling or defacing marks of any adhesive stamp provided for by this article with intent to use the same, or to cause the use of the same after it shall have been used, or shall knowingly or willfully sell or buy any washed or re- stored stamp, or offer the same for sale, or give or ex- pose the same to any person for use, or knowingly use the same or prepare the same w T ith intent for the fur- ther use thereof; or shall willfully use any counterfeit stamp or any forged stamp with intent to defraud the state of New York, shall be guilty of a misdemeanor and on conviction thereof shall be liable to a fine of not less than five hundred nor more than one thousand dollars, or be imprisoned for not more than six months, or by both such fine and imprisonment, at the discre- tion of the court. 19 Sec. 336. No deduction of debts against taxable secured debt. The owner of any secured debt, on which the tax provided for in this article has not been paid, shall be assessed upon such secured debt in the taxing district in which he resides, upon the fair market value of such secured debt and no de- duction for the just debts owing by him shall be allowed against the assessed value of such secured debt, as provided in section twenty-one of this chapter or elsewhere in this chapter or in any other law of this state, except that the deduction from the taxable prop- erty permitted by section six of this chapter shall be allowed to any person, in respect of any secured debt which for the purpose of his business, as hereinafter described and not for or as an investment, shall be temporarily owned and held for sale by such person then actually engaged in the bona fide purchase and sale of such securities as a business, and who then shall have and maintain an office or place of business in this state for the carrying on of the actual bona fide business of purchasing and selling such securities as distinguished from the purchase thereof for investment, but such de- duction shall not be allowed in respect of securities owned and held for a longer period than eight months. Sec. 337. Application of Taxes. The taxes im- posed under this article and the revenues thereof shall be paid by the state comptroller into the state treasury and be applicable to the general fund, and to 20 the payment of all claims and demands which are a lawful charge thereon. Sec. 338. Exemption where tax has been paid on secured debts before May first, nineteen hun- dred and fifteen. If a tax shall have been paid upon a secured debt pursuant to article fifteen of the tax law prior to May first, nineteen hundred and fifteen, such secured debt shall be exempt from taxation hereunder and from all taxation in the state or any of the municipalities or local divisions of the state until maturity, except as provided in sections twenty-four, one hundred and eighty-seven, one hun- dred and eighty-eight and one hundred and eighty-nine of this chapter and in articles ten and twelve of this chapter. Sec. 339. Exemption where tax has been paid on secured debts between May first, nineteen hun- dred and fifteen, and November first, nineteen hun- dred and fifteen. If a tax shall have been paid upon a secured debt pursuant to article fifteen of the tax law, between May first, nineteen hundred and fifteen, and November first, nineteen hundred and fifteen, such secured debt shall be exempt from taxation hereunder, and from all taxation in the state or any , of the municipalities or local divisions of the state, for the period of five years from the date of the payment of such tax, except as provided 21 in sections twenty-four, one hundred and eighty-seven, one hundred and eighty-eight and one hundred and eighty-nine, of this chapter, and in articles ten and twelve of this chapter. Sec. 340. Apportionment of value of secured debt secured by mortgage of property situated partly within and partly without the state. If a bond, note or debt be secured by mortgage or deed of trust recorded in the state of New York of property or properties, situated partly within and partly without the state of New York, and a proportion of such bond, note or debt constitutes a secured debt as provided by section three hun- dred and thirty, the holder of such secured debt may apply to the comptroller for a determination of the pro- portion of such bond, note or debt which is taxable as a secured debt under this article and the comptroller shall, as soon as practicable thereafter, furnish to such applicant a determination upon which the tax imposed by this article on such secured debt shall be based, which determination shall be in the manner provided for in section two hundred and sixty of this chapter made in respect of the apportionment of the value of such mortgaged property in connection with the record- ing within the state of New York of the mortgage or other indenture by which such secured debt may be secured. § 2. Article fifteen of such chapter, as added by chapter eight hundred and two of the laws of nineteen hundred and eleven and amended by chapters one hun- dred and sixty-nine and four hundred and sixty-five of the laws of nineteen hundred and fifteen, is hereby repealed; but such repeal shall not affect or impair the exemptions provided for in sections three hundred and thirty-eight and three hundred and thirty-nine of the tax law as added by this act. § 3. This act shall take effect immediately. 23 The Mortgage Tax Law of the State of New York Being the Article Entitled "Tax on Mortgages" constituting Article 11, Chapter 62 of the Laws of 1909 as amended by Laws of 1909, Chapter 412 Laws of 1910, Chapter 601 Laws of 1913, Chapter 665 Laws of 1914, Chapter 398 Laws of 1914, Chapter 399 Laws of 1915, Chapter 447 Laws of 1916, Chapter 323 Laws of 1916, Chapter 335 Laws of 1916, Chapter 336 Laws of 1916, Chapter 337 ARTICLE 11 Tax on Mortgages Section 250. Definitions. 251. Exemption from local taxation. 252. Exemptions. 253. Recording tax. 254. Optional tax on prior mortgages. 255. Supplemental mortgages. 256. Mortgages for indefinite amounts or for contract obliga- tions. 257. Payment of taxes. 258. Effect of nonpayment of taxes. 259. Trust mortgages. 260. Determination and apportionment by the State Tax Commission. 261. Payment over and distribution of taxes. 262. Expenses of officers. 263. Supervisory power of tax commission and comptroller . 264. Tax on prior advance mortgages. Sec. 250. Definitions. The term "real property," as used in this article, in addition to the defini- tion thereof contained in Section two of this chapter, includes everything a conveyance or mortgage of which can be recorded as a conveyance or mortgage of real property under the laws of the State. The term "mort>- gage," as used in this article, includes every mortgage or deed of trust which imposes a lien on or affects the title to real property, notwithstanding that such prop- erty may form a part of the security for the debt or debts secured thereby. Executory contracts for the sale of real property under which the vendee has or is entitled 27 to possession shall be deemed to be mortgages for the purposes of this article and shall be taxable at the amount unpaid on such contracts. A contract or agree- ment by which the indebtedness secured by any mort- gage is increased or added to, shall be deemed a mort- gage of real property for the purpose of this article, and shall be taxable as such upon the amount of such increase or addition. (As amended by Laws of 1916, Chapter 323.) Sec. 251. Exemption from local taxation. All mortgages of real property situated within the state which are taxed by this article and the debts and the obligations which they secure, together with the paper writings evidencing the same, shall be exempt from other taxation by the state, counties, cities, towns, vil- lages, school districts and other local subdivisions of the state, except that such mortgage shall not be ex- empt from the taxes imposed by sections twenty-four, one hundred and eighty-seven, one hundred and eighty- eight, one hundred and eighty-nine and article ten of this chapter. (As amended by Laws of 1916, Chapter 323.) Sec. 252. Exemptions. No mortgage of real property situated within this state shall be exempt, and no person or corporation owning any debt or obli- gation secured by mortgage of real property situated within this state shall be exempt, from the taxes im- posed by this article by reason of anything contained in any other statute, or by reason of any provision in any private act or charter which is subject to amend- ment or repeal by the legislature, or by reason of non- residence within this state or for any other cause. Sec. 253. Recording tax. A tax of fifty cents for each one hundred dollars and each remaining major fraction thereof of principal debt or obligation which is, or under any contingency may be secured at the date of the execution thereof or at any time there- after by a mortgage on real property situated within the state recorded on or after the first day of July, nine- teen hundred and six, is hereby imposed on each such mortgage, and shall be collected and paid as provided in this article. If the principal debt or obligation which is or by any contingency may be secured by such mortgage recorded on or after the first day of July, nineteen hundred and seven, is less than one hun- dred dollars, a tax of fifty cents is hereby imposed on such mortgage, and shall be collected and paid as pro- vided in this article. (As amended by Laws of 1916, Chapter 323.) Sec. 254. Optional tax on prior mortgages. Whenever any mortgage other than a mortgage speci- fied in section two hundred and sixty-four has been re- corded prior to July first, nineteen hundred and six, the record owner thereof may file with the recording officer of the county in which the real property, or any part thereof, on which said mortgage is a lien, is situ- ated, a written statement under oath verified by the rec- ord owner or the agent or officer of such record owner describing such mortgage by giving the date of the same and the liber and page of the record thereof together with the names of the parties thereto, specifying the amount then remaining unpaid on the debt or obliga- tion secured thereby, and electing that it shall become subject to the tax prescribed by section two hundred and fifty-three of this chapter. Whenever any unre- corded mortgage has been executed and delivered prior to July first, nineteen hundred and six, the owner thereof may record the same upon filing with the re- cording officer a similar statement and paying the tax as herein prescribed. A tax shall thereupon be com- puted, levied and collected upon the amount of the principal debt or obligation unpaid at the time of the filing of such statement, or of the recording of such mortgage and filing of such statement. On the pay- ment of such tax as herein provided, the recording officer shall note on the margin of the record of such mortgage the fact of such statement and of the amount of the tax paid, attested by his signature, whereupon such mortgage and the debt or obligation secured there- by shall be entitled to the exemptions and immunities conferred by this article, and all of the provisions of this article shall thereafter be applicable to said mort- gage. Whenever the original mortgage is presented to ihe clerk together with the statement he shall also note 30 en said original mortgage the fact of the filing of the said statement and also the amount of the tax paid duly attested by his signature, which indorsement shall be conclusive evidence of the payment of such tax. Sec. 255. Supplemental mortgages. If subse- quent to the recording of a mortgage on which all taxes, if any, accrued under this article have been paid, a supplemental instrument or mortgage is 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 impos- ing the lien thereof upon property not originally covered by or not described in such recorded primary mortgage for the purpose of securing the principal in- debtedness which is or under any contingency may be secured by such recorded primary mortgage, such ad- ditional instrument or mortgage shall not be subject to 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 im- posed as provided by section two hundred and fifty- three of this chapter on such new or further indebted- ness or obligation, and shall be paid to the proper re- cording officer at the time such instrument or addi- tional mortgage is recorded. If at the time of record- ing such instrument, or additional mortgage any ex- emption is claimed under this section, there shall be 31 filed with the recording officer and preserved in his office a statement under oath of the facts on which such claim for exemption is based. The determination of the recording officer upon the question of exemption shall be reviewable by the tax commission. (As amended by Laws of 1916, Chapter 323.) Sec. 256, Mortgages for indefinite amounts or for contract obligations. If the principal indebt- edness secured or which by any contingency may be secured by a mortgage is not determinable from the terms of the mortgage, or if a mortgage is given to secure the performance by the mortgagor or any other person of a contract obligation other than the payment of a specific sum of money and the maximum amount secured or which by any contingency may be secured by the mortgage is not expressed therein, such mortgage shall be taxable under section two hundred and fifty-three of this chap- ter upon the value of the property covered by the mort gage, which shall be determined by the recording offi- cer to whom such mortgage is presented for record, un- less at the time of presenting such mortgage for rec- ord the owner thereof shall file with the recording officer a sworn statement of the maximum amount secured or which under any contingency may be secured by the mortgage. If such maximum amount is expressed in the mortgage or in a sworn statement filed as required by this section, such amount shall be 32 the basis for assessing the tax imposed by this article. A statement filed by the owner of a mortgage pursuant to this section shall thereafter at all times be binding upon and conclusive against such owner, the holders of any bonds or obligations secured by such mortgage and all persons claiming through the mortgagee any inter- est in the mortgage or the mortgaged premises. If the maximum amount secured or which by any con- tingency may be secured by the mortgage is not ex- pressed in the mortgage or in a sworn statement as au- thorized by this section, the recording officer at the time such mortgage is offered for record may require the mortgagor or mortgagee to furnish him with proofs as to such facts as he deems necessary for the purpose of computing the value of the property covered by the mortgage and such proofs shall include an affidavit of appraisal of the value of the property made by at least two competent, disinterested persons and shall be pre- served in his office. His determination and copies of the proofs as to the basis for computing the tax on such mortgage shall be forwarded to and subject to review by the state tax commission. Such mortgage shall not be recorded until the statement is filed or the proofs are furnished as required by this article. (As amended by Laws of 1916, Chapter 323.) Sec. 257. Payment of taxes. The taxes imposed by this article shall be payable on the recording of each mortgage of real property subject to taxes 33 thereunder. Such taxes shall be paid to the recording officer of any county in which the real property or any part thereof is situated. It shall be the duty of such recording officer to indorse upon each mortgage a receipt for the amount of the tax so paid. Any mort- gage so indorsed may thereupon or thereafter be re- corded by any recording officer and the receipt for such tax indorsed upon each mortgage shall be recorded therewith. The record of such receipt shall be con- clusive proof that the amount of tax stated therein has been paid upon such mortgage. Sec. 258. Effect of nonpayment of taxes. No mortgage of real property shall be recorded by any county clerk or register, unless there shall be paid the tax imposed by and as in this article provided. No mortgage of real property which is subject to the taxes imposed by this article shall be released, discharged of record or received in evidence in any action or pro- ceeding, nor shall any assignment of or agreement ex- tending any such mortgage be recorded unless the taxes imposed thereon by this article shall have been paid as provided in this article. JSTo judgment or final order in any action or proceeding shall be made for the foreclosure or the enforcement of any mortgage which is subject to the tax imposed by this article or of any debt or obligation secured by any such mortgage, unless the taxes imposed by this article shall have been paid as provided in this article; and 34 whenever it shall appear that any mortgage has been recorded or that any advance has been made on a prior advance mortgage or on a corporate trust mortgage without payment of the tax imposed by this article there shall be paid in addition to the amount of the tax a sum equal to one per centum thereof for each month the tax remains unpaid, which sum shall be added to the tax and paid or collected therewith. (As amended by Laws of 1916, Chapter 323.) Sec. 259. Trust mortgages. In the case of mort- gages made by corporations in trust to secure pay- ment of bonds or obligations issued or to be issued thereafter, if the total amount of principal indebted- ness which under any contingency may be advanced or accrue or which may become secured by any such mortgage which is subject to this article has not been advanced or accrued thereon or become secured thereby before such mortgage is recorded, it may contain at the end thereof a statement of the amount which at the time of the execution and delivery thereof has been advanced or accrued thereon, or which is then secured by such mortgage; thereupon the tax payable on the recording of the mortgage shall be computed on the basis of the amount so stated to have been so advanced or accrued thereon or which is stated to be secured thereby. Such statement shall thereafter at all times be binding upon and conclusive against the mortgagee, the holders of any bonds or obligations secured by such 35 mortgage and all persons claiming through the mort- gagee any interest in the mortgage or in the mortgaged premises. Whenever a further amount is to be ad- vanced under the original mortgage, or shall accrue thereon or become secured thereby, the corporation making such mortgage shall pay the tax on such amount at or before the time when such amount is to be ad- vanced, accrues or becomes secured and shall, at the time of paying such tax, file in the office of the record- ing officer where such mortgage has been or is first re- corded and with the tax commission a state- ment, verified by the secretary, treasurer or other proper officer, of said corporation of the amount of principal indebtedness to be so advanced, accruing or becoming secured, and the certification of any bond or bonds by the trust mortgagee shall be deemed an advance under this article. Such additional tax shall be paid to the recording officer where such mortgage has been or is first recorded and a receipt therefor shall be indorsed upon the mortgage and pay- ment therefor shall be noted in the margin of the rec- ord of such mortgage and if requested a duplicate re- ceipt for such payment shall also be given to the party paying such tax and the note of such payment or ad- ditional payment or such receipt shall have the same force and effect as the record of receipt of the tax which under this article is payable at or before the recording of the mortgage. If such additional tax is not paid as required by this section, the trust mort- 36 gagee shall not certify any bond or other obligation issued on account thereof. The corporation making such mortgage or the owner of the property which secures the mortgage debt shall annually within thirty days after July first, and until it shall appear by such statement that the maximum amount of principal in- debtedness secured by such mortgage has been ad- vanced, has accrued or become secured and the tax thereon paid, file in the office of the tax commssion and the recording officer where such mortgage has been or is first recorded a statement, verified by the secretary, treasurer or other proper officer of said corporation, showing : 1. the name of the mortgagor and the mortgagee ; 2. the date of the mortgage and the county where first recorded; 3. the maximum amount of principal debt or obli- gation which under any contingency may be secured by such mortgage; 4. the amount advanced on such mortgage during the year ending June thirtieth preceding, with the date and the amount of each advancement ; 5. in the case of a mortgage recorded prior to July first, nineteen hundred and six, the first annual state- ment filed under this section as hereby amended, shall state the total amount advanced prior to July first, nineteen hundred and six, and the date and the amount of each subsequent advancement to the end of the period covered by the statement. 37 A failure to file any statement required by this sec- tion within the time required shall subject the corpora- tion making such mortgage to a penalty of one hun- dred dollars per day for each day such failure con- tinues, recoverable by the attorney-general in an action brought in the name of the people of the state of New York. (As amended by Laws of 1916, Chapter 323.) Sec. 260. Determination and apportionment by the state tax commission. When the real property covered by a mortgage is situated in more than one tax district, the state tax commission shall de- duct from the relative assessments of such real property in the respective tax districts covered by such mortgage any prior existing mortgage liens and shall then apportion the tax paid on such mortgage between the respective tax districts upon the basis of the rela- tive assessments of such real property as the same ap- pear on the last assessment-rolls less the deduction, if any. If, however, the whole or any part of the prop- erty covered by such a mortgage is not assessed upon the last assessment-roll or rolls of the tax district or districts in which it is situated, or is so assessed, as a part of a larger tract, that the assessed value cannot be determined, or if improvements have been made to such an extent as materially to change the value of the property so assessed, the tax commission may require the local assessors in the respective tax districts, or the 38 mortgagor, or mortgagee, to furnish sworn appraisals of the property in each tax district, and upon such ap- praisals shall determine the apportionment. If such mortgage covers real property in two or more counties, the tax commission shall determine the proportion of the tax which shall be paid by the recording officer who has received the same to the recording officers of the other counties in which are situated the tax dis- tricts entitled to share therein. When any recording officer shall pay any portion of a tax to the recording officer of another county, he shall forward with such tax a description sufficient to identify the mortgage on which the tax has been paid, and the recording officer receiving such tax shall note on the margin of the record of such mortgage the fact of such payment, at- tested by his signature. The tax commission shall make an order of determination and apportionment in respect to each such mortgage and file a certified copy thereof with the recording officer of each county in which a part of the mortgaged real property is situated. When the real property covered by a mortgage is partly within the state and partly without the state it shall be the duty of the tax commission to determine what portion of the mortgage or of advancements thereon shall be taxable under this article. Such de- termination shall be made in the following manner: First : Determine the respective values of the property within and without the state, and deduct therefrom the amount of any prior existing mortgage liens, excepting 39 such liens as are to be replaced by the advancements under consideration. Second: Find the ratio that the net value of the mortgaged property within the state bears to the net value of the entire mortgaged prop- erty. Third: Make the determination of the portion of the mortgage or of the advancements thereon which shall be taxable under this article by applying the ratio so found. If a mortgage covering property partly within and partly without the state is presented for record before such determination has been made, or at the time when an advance is made on a corporate trust mortgage or on a prior advance mortgage, there may be presented to the recording officer a statement in dupli- cate verified by the mortgagor or an officer or duly au- thorized agent of the mortgagor, in which shall be specified the net value of the property within the state and the net value of the property without the state covered by such mortgage. One of such statements shall be filed by the recording officer and the other shall be forthwith transmitted by him to the state tax commission. The tax payable under this article be- fore the determination by the tax commission shall be computed upon such portion of the principal indebted- ness secured by the mortgage, or of the sum advanced thereon, as the net value of the mortgaged property within the state bears to the net value of the entire mortgaged property as set forth in such statement. The tax commission shall on receipt of the statement from the recording officer and on not less than ten days' 40 notice served personally or by mail upon the mort- gagor, the mortgagee and the state comptroller, proceed to make the required determination. In determining the separate values of the property within and without the state the tax commission shall consider only the tangible property, real and personal, except that leases of real property shall be deemed tangible property. For the pur- pose of determining such value the tax commission may require the mortgagor or mortgagee to furnish by affi- davit or verified report such information or data as it- may deem necessary, and may require and take the testimony of the mortgagor, mortgagee or any other person. A certified copy of the order of determina- tion and apportionment shall be delivered personally or by mail to the mortgagor, the mortgagee and the state comptroller, and any tax under such determination which has not been paid shall be paid within ten days after service of such certified copy; if, however, the tax paid at the time of filing the statement hereinbe- fore specified with the recording officer is in excess of the tax determined to be payable, the certificate of de- termination and apportionment shall direct the re- cording officer to refund to the person paying such tax the amount of such excess; provided that no refund shall be made of any taxes paid pursuant to a previous determination. The mortgagor or mortgagee of any mortgage which covers property within and without the state may waive the determination provided for in this section and pay 41 the tax upon the full amount of such mortgage or of any advancement thereon, and thereafter the whole amount of such mortgage or advancement shall be ex- empt from taxation under the provisions of section two hundred and fifty-one of this article. The tax commission shall adopt rules to govern the procedure and the manner of taking evidence in all the matters provided for by this section and may re- quire verified statements to be furnished either by boards of assessors, recording officers or other persons having knowledge in relation to such matters. Failure on the part of any person or officer to furnish a state- ment or other data when required so to do pursuant to the provisions of this section shall render such person or officer liable to a penalty of one hundred dollars, to be recovered by the attorney-general in an action brought in the name of the people of the state of New York. In making determination and apportionment under this section the tax commission shall consider all ad- vancements made upon a mortgage after July first, nineteen hundred and six, in the aggregate, which aggregate shall be obtained by adding all advancements made after July first, nineteen hundred and six, to the last advancement and the total shall be treated as a whole mortgage, considering the status of the prop- erty as of the time the last advancement is made. In all cases under this section in which it shall appear that the prior incumbrances exceed the assessed or appraised 42 value of the property in one or more tax districts the oommission may, by a process of equalization or other- wise, establish a basis of apportionment that will be equitable and fair. In any case where a determination has been made pursuant to this section in respect to a mortgage or advancements upon a mortgage covering property with- in and without the state and the tax has been paid upon a portion of the indebtedness secured by such mortgage pursuant to such determination, the mort- gagor or mortgagee or the owner of any bonds secured by such mortgage may file with the recording officer where such mortgage is first recorded a verified state- ment in form and substance as provided for in section two hundred and sixty-four of this article, which state- ment shall also specify the portion of the indebtedness secured by such mortgage or bonds upon which the tax has been paid, and thereupon the recording officer shall collect the tax upon the remaining portion of such mortgage or bonds, and all of the provisions of said section two hundred and sixty-four in respect to the indorsement of the payment of the tax and notation on the margin of the record of the mortgage shall be ap- plicable to taxes paid upon such remaining portion, and thereafter the whole amount of such mortgage, ad- vancement or bonds shall be exempt from taxation under the provisions of section two hundred and fifty- one of this article. (As amended by Laws of 1916, Chapter 335.) 43 Sec. 261. Payment over and distribution of taxes. Upon the first day of each month the re- cording officer of each county shall pay over to the county treasurer all moneys received during the pre- ceeding month upon account of taxes paid to him as herein prescribed, after deducting the necessary ex- penses of his office as provided in section two hundred and sixty-two, except taxes paid upon mortgages which under the provisions of section two hundred and sixty are to be apportioned by the tax commission between several counties, which taxes and money shall be paid over by him as provided by the determination of said tax commission within five days after the filing of said determination in his office. The county treasurer of each county shall on the first day of Janu- ary, April, July and October in each year, after having deducted the necessary expenses of his office provided in section two hundred and sixty-two, transmit one-half of this net amount collected under the provisions of this article to the state treasurer and shall receive from the state treasurer a receipt therefor countersigned by the comptroller. And the remaining portion thereof in the counties of New York, Kings, Queens, Eichmond and Bronx shall be paid into the general fund of the city of New York and be applied to the reduction of taxation, and in the other counties of the state the remaining portion shall be held by the respective county treasurers subject to the order of the board of supervisors as hereinafter provided. 44 Prior to the first day of November in each year the re- cording officer shall cause to be prepared a statement containing a description of all mortgages upon which taxes have been paid by a reference to the date of each mortgage, the name of the mortgagor and mortgagee, the amount of the principal debt upon which the tax was paid together with the book and page where said mortgage is recorded, together with the tax district in which the mortgaged property is situated, and if situ- ated in two or more tax districts the amount appor- tioned to each tax district by the tax commission, and the amount deducted for his necessary expenses as ap- proved by the tax commission and shall file the state- ment with the clerk of the board of supervisors, and a copy thereof with the tax commission. The boards of supervisors of the several counties shall, on or be- fore the fifteenth day of December in each year, ascer- tain from the statement filed with their clerk by the recording officer the location of the mortgaged prop- erty with respect to the several tax districts and the amount of tax properly to be credited to each tax dis- trict, which shall be applicable to the payment of state, county and city, or town expenses; except that where a town contains within its limits an incorporated vil- lage, or portion thereof, the supervisors shall apportion to the village or villages so much of the share credited to the said town as the assessed value of said village or portion thereof bears to twice the total assessed valua- tion of the town, and the remaining balance shall be 45 applicable to the payment of state, county and town taxes. The board of supervisors of each county, on or before the fifteenth day of December each year, shall determine the respective sums applicable hereunder to each of the foregoing purposes and shall issue their warrant for the payment to the city treasurer or town supervisor, of the amount payable to said city or town, and their warrant for the payment to the village treas- urer of the sum of money to which the village shall be entitled, which sum shall be credited to the general fund of the village. (As amended by Laws of 1916, Chapter 323.) Sec. 262. Expenses of officers. Eecording of- ficers and county treasurers shall severally be entitled to receive all their necessary expenses for the purposes of this article, including printing, hire of clerks and assistants, being first approved and allowed by the tax commission, which shall be retained by them out of the moneys coming into their hands. (As amended by Laws of 1916, Chapter 323.) Sec. 263. Supervisory power of tax commission and comptroller. The tax commission shall have general supervisory power over all recording officers in respect of the duties imposed by this article and they may make such rules and regulations for the government of recording officers in respect to the matters provided for in this article as they may 46 deem proper, provided that such rules and regulations shall not be inconsistent with this or any other statute. Whenever a duly verified application for a refund of mortgage taxes, erroneously collected by a recording officer, is made to the tax commission it shall be the duty of such commission to determine the amount that has been erroneously collected and make an order di- recting such recording officer to refund the amount so determined from mortgage tax moneys in his hands, or which shall come to his hands, to the party entitled to receive it and charge such amount back to the tax dis- trict that may have been credited with the same. If any recording officer shall have collected and paid over to the treasurer of any county, a tax paid upon a mort- gage which under the provisions of section two hun- dred and sixty of this chapter is to be apportioned by the tax commission between several counties before such apportionment has been made, or if any record- ing officer shall have paid over to such treasurer more money than required on account of mortgage taxes such recording officer shall make a report to the tax commis- sion in the form of a verified statement of facts and said commission shall determine the method of adjust- ment and issue its order accordingly. The comptroller shall have general supervisory power over all county treasurers in respect to the duties imposed upon them by this article, and may make such rules and regula- tions, not inconsistent with this or any other statute, for the government of said county treasurers as he 47 deems proper to secure a due accounting for all taxes and moneys collected or received pursuant to any pro- vision of this article. All recording officers and county treasurers shall furnish such bond, conditioned for the faithful and diligent discharge of the duties required of them respectively by this article, to the people of the state, within such time, with such sureties and in such penal amount, not exceeding twenty-five thousand dol- lars, as the comptroller may prescribe. The provisions of this section shall cover all transactions subsequent to July first, nineteen hundred and five. (As amended by Laws of 1916, Chapter 336.) Sec. 264, Tax on prior advance mortgages. Whenever any part of the amount of the principal indebtedness which is or under any contingency may be secured by a mortgage recorded prior to July first, nineteen hundred and six, is advanced after July first, nineteen hundred and six, the tax prescribed by section two hundred and fifty-three of this article is hereby imposed on the amount of principal indebted- ness so advanced, which tax shall be payable at the same time and in the same manner as taxes imposed by section two hundred and fifty-nine of this article, and all the provisions of section two hundred and fifty-nine in relation to the time and manner of paying such tax, the filing of statements in relation to the time and amount of such advances, and penalties for failure to file the same shall apply to advances made under this 48 section and the payment of a tax thereon, except that if the mortgagor is not a corporation, such statements shall be filed by the owner of the mortgage, who, for failure to do so, shall be subject to the penalties pre- scribed by such section. In case said mortgage was given to secure the payment of a series of bonds, the mortgagor may, at the time of paying such tax, present to the recording officer, the bonds representing the por- tion of the principal indebtedness secured by said mortgage upon which the tax is to be paid, and also file with said recording officer a statement verified by the mortgagor or an officer or duly authorized agent or at- torney of the mortgagor specifying that said bonds, so presented, are the bonds representing that portion of the principal indebtedness secured by said mortgage upon which the tax is to be paid and that said bonds are secured by a mortgage recorded in said office stat- ing the date of said mortgage and the liber and page of the record of the same. It shall be the duty of such recording officer to indorse upon each of said bonds, so presented to him, a statement signed by him to the effect that the tax imposed by this article on that por- tion of the principal indebtedness secured by said mortgage represented by said bonds has been paid, and said statement shall be conclusive proof of such pay- ment. Notwithstanding the exception contained in section two hundred and fifty-four, the record owner of any mortgage recorded prior to July first, nineteen hundred and six, other than a corporate trust mort- 49 gage, may file in the office of the recording officer where such mortgage is first recorded a statement in form and substance as required by section two hundred and fifty-four of this article, except that it shall specify and state the amount of all advancements made there- on prior to said date, giving the date and amount of each advancement and the amount of such prior ad- vancements remaining unpaid, and thereby elect that the same be taxed under this article; and any mort- gagor or mortgagee under a corporate trust mortgage given to secure a series of bonds or the owner of any such bond or bonds secured thereby may file in the office of the recording officer where such mortgage is first recorded a statement in form and substance as required by section two hundred and fifty-four of this article, except that it shall specify the serial number, the date and amount of each bond and otherwise suffi- ciently describe the same to identify it as being secured by such mortgage, and thereby elect that such bond or bonds be taxed under this article, and such bond or bonds shall be taxed upon the whole amount thereof notwithstanding the provisions of section two hundred and sixty of this article. A tax shall thereupon, in the case of mortgages other than corporate trust mortgages, be computed, levied and collected upon the amount of the principal debt or ob- ligation represented by said unpaid prior advance- ments at the time of filing such statement, or, in the case of a corporate trust mortgage, upon the amount of 50 the bond or bonds specified in the statement filed, at the rate prescribed by section two hundred and fifty- three of this article. Said bonds representing prior ad- vancements under corporate trust mortgages and taxed as herein provided may be presented to the recording officer, whose duty it is to collect said tax, for indorse- ment and he shall thereupon indorse upon each of said bonds a statement, attested by his signature, of the pay- ment of the tax as provided in this section in respect to bonds representing subsequent advancements, and the record owner of any other mortgage taxed upon prior advancements as herein provided may present said mortgage to the recording officer and thereupon such officer shall note upon the same the filing of the statement and the amount of the tax paid, attested by his signature. In all such cases the recording officer shall note on the margin of the record of such mort- gage the filing of such statement and the amount of the tax paid, and, in case of bonds secured by corporate trust mortgages, the serial number of each such bond. The words "bond" and "bonds" as used in this section shall be deemed to embrace all notes or other evidences of indebtedness secured by mortgages taxable under this section. In case of any mortgage taxable under this section, the portion of the indebtedness secured thereby upon which the tax imposed by this section is paid, and such portion only, shall be exempt from taxa- tion under the provisions of section two hundred and fifty-one of this article. Whenever the tax imposed by 51 section two hundred and sixty-four of this article as said section existed prior to May thirteenth, nineteen hundred and seven, has been paid with respect to any mortgage, no additional tax shall accrue on such mort- gage under this section as hereby enacted and such mortgage and the debt or obligation secured thereby, shall continue to be entitled to the exemptions and im- munities conferred by this article and all of the pro- visions of this article shall remain applicable to such mortgage. All taxes imposed by or which became due, payable or collectible on or before the thirtieth day of June, nineteen hundred and six, pursuant to chapter seven hundred and twenty-nine of the laws of nineteen hundred and five, and all taxes which under section two hundred and fifty-eight of this chapter became due and payable on the thirtieth day of July nineteen hun- dred and six and all other taxes, if any, which were imposed by chapter seven hundred and twenty-nine of the laws of nineteen hundred and five on any mortgage recorded prior to the first day of July, nineteen hun- dred and six, in respect to any period ending on or be- fore the first day of July, nineteen hundred and six, shall be imposed, become due, be payable and collecti- ble and shall be paid over and distributed in the same manner, and with the same force and effect as if this article had not been enacted; and for the purpose of collecting, paying over, distributing and enforcing any such taxes, chapter seven hundred and twenty-nine of the laws of nineteen hundred and five shall be deemed 52 to be in force, and the lien for such taxes shall attach and such taxes shall be levied and collected as provided in chapter seven hundred and twenty-nine of the laws of nineteen hundred and five, anything herein con- tained to the contrary notwithstanding. (As amended by Laws of 1916, Chapter 337.) Sec. 265. Tax a lien; exceptions. — The tax in this article imposed shall be deemed and is hereby declared to be a lien upon the mortgage upon which such tax is imposed and upon the debt or obli- gation secured thereby, except that upon mortgages re- corded prior to July first, nineteen hundred and six, such lien shall extend only to that portion thereof rep- resented by the amount advanced subsequently to such date and to the debt or obligation secured by such ad- vancement, and for the purpose of enforcing the pay- ment of the tax in this article imposed, such mortgage and the debt thereby secured shall be deemed to be property within this state notwithstanding that such mortgage may be owned by or be in the possession of a person or corporation outside the state, and a copy thereof duly certified by the recording officer of any county in which such mortgage is recorded shall, for the purpose of enforcing the payment of such tax, be deemed to be, and shall have the same force and effect as the original mortgage and may be sold to satisfy such tax and upon a sale of the whole or any part thereof, shall carry with it and transfer to the pur- chaser all the rights, interests and obligations of the 53 mortgagee therein named or his assignee or successor in interest in and and to such mortgage and the debt se- cured thereby, or the part thereof to which such lien attaches, together with interest and costs. (As amended by Laws of 1916, Chapter 323.) Sec. 266. Enforcement; procedure. — In case the tax imposed by this article is not paid as in this article provided, the tax commission may notify the attorney-general of such failure or refusal to pay and it shall then be the duty of the attorney-general to enforce the payment of such tax, and for that purpose he may maintain an action in the name of the people of the state of New York, in any court of competent jurisdiction, either to sell such mortgage; or, he may maintain an action against the mortgagee or his assignee or successor in interest per- sonally; or, where by stipulations contained in such mortgage it is made the duty of the mortgagor to pay such tax, then against the mortgagor or his successor in interest personally ; or, in the case of a trust mortgage against the trust mortgagee, personally; or, he may pursue either, any or all such remedies. All actions instituted by the attorney-general, as herein provided, shall, if the amount involved is fifty dollars or more, be brought in the county of Albany. Where, in any action, a recovery is had there shall be added to the amount of such tax and included in the judgment, in- terest at the rate of one per centum per month on the 54 amount of such tax, Ixrbe ^compm^d 'from the date on which such tax became due and payable, except that in the case of taxable mortgages heretofore recorded and upon which the tax imposed by this article has not been paid, and where, in such case, no penalty is pre- scribed by law for the nonpayment of such tax, inter- est shall be added at the rate of six per centum per an- num. In any action brought as herein provided, where the judgment provides for the sale of the mortgage, such judgment shall also prescribe the time, place and man- ner of such sale and of the notice thereof to be given, and, in the discretion of the court, may direct that such sale be made by or under the direction of the comptroller or the recording officer of the county in which such mortgage was first recorded, and all money recovered in such action shall be paid by the attorney- general to the proper recording officer in satisfaction of such tax, and all costs recovered therein shall be paid into the state treasury. (As amended by Laws of 1916, Chapter 323.) Sec. 267. Idem; where recovery is had against trust mortgagee. — In every case where recovery is had personally against a trust mortgagee as here- in provided, and payment of the amount recov- ered has been made by such trust mortgagee, or where such trust mortgagee has voluntarily paid such tax, he shall be deemed to have and possess and to have be- come subrogated to all the rights and interests in and 55 to the tax lien imposed by section two hundred and sixty-five hereof, and may enforce the repayment of any such sum so paid by him with interest at the rate of six per centum per annum and for that purpose may maintain an action in his own name in any court in the state having jurisdiction, against any person, associa- tion or corporation liable to pay such tax, or for the sale of such mortgage and the debt secured thereby to which such lien attaches. 56 UNIVERSITY OF CALIFOBNIA LIBRARY BERKELEY THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW to $£00 per volume after Sie S ix?h daT^' T™*™** demand may be renewed i !S *• ay * • Books not in expiration If loan period. appllcatl °* » ^ade before MAS 30 m\ 20m-ll,'20 n 3*f£9*f7 : UNIVERSITY OF CALIFORNIA LIBRARY