
    Martin H. Glynn, as Comptroller of the State of New York, Plaintiff, v. Henry W. Conklin, as Referee, and Security Trust Company of Rochester, as Trustee, Defendants.
    Third Department,
    June 18, 1908.
    Tax — transfer of stock by judicial sale — foreclosure.
    The tax of two cents on each $100 of face value imposed on the transfer of stocks . by section 315 of the Tax Law is payable -where shares of stock covered by a mortgage issued to secure bonds are sold on foreclosure.
    ■ Submission of a controversy upon ah agreed ■ statement of facts pursuant to section 1279 of the Code of Civil Procedure.
    
      Willimn Schuyler Jackson, Attorney-General, and Frank U. Mott, Deputy Attorney-General, for the plaintiff.
    
      Harris, Havens, Beach & Harris [Edward Harris, Jr., of counsel], for the defendants.
   Cochrane, J.:

To secure an issue of bonds the United States Independent Telephone Company executed to the defendant, Security Trust Company of Bochester a mortgage covering 322,726 shares of stocks of other and different corporations of the face value of $100 a share.

The mortgagor having defaulted in the payment of such bonds the mortgagee instituted an action in the Supreme Court of this State for the foreclosure of said mortgage. Such proceedings were had in such action that the defendant Henry W. Conklin was appointed a referee’¡to sell said stocks Under a judgment directing such sale, and pursuant to such judgment the stocks have, been duly sold by the referee.

The question is whether the tax of two cents on each $100 of face value imposed on the transfer of stocks by section 315 of the Tax Law (Laws of 1896, chap. 908), added thereto by chapter 241 of the Laws of 1905, as amended by chapter 414 of the Laws of 1906, applies to such a sale.

It is very clear that such sale is within the letter of the statute and it is equally clear that it is within its spirit. Were it otherwise the door would be wide open for an evasion of the tax. It would only be necessary for a person desiring to sell stocks without the payment -of the transfer tax to mortgage them and foreclose the mortgage. -In the present case the mortgagee^ has sought the aid . of the court in effecting á transfer, but the transaction is essentially the-same and the result is the same as if the mortgagee without ' invoking the court’s assistance had enforced the mortgage and sold the stocks by virtue of a power contained in the mortgage, or as' if the mortgagor had voluntarily released his equity in the mortgaged stocks: While the sale in question was judicial it was made for the benefit of a party and on application of such party, and the btirdenof the tax does not fall on the court’s officer nor oh any one except the party benefiting by the transfer of the stocks and who j ustly and equitably should bear the burden of the taxation, imposed by the .statute.

All concurred.

Judgment ordered in favor of plaintiff for $6,454.52, without costs, as stipulated. 
      
       See People ex vel Farrington v. Memehing (187 IT. Y. 8).— [Rep.
     