
    (75 App. Div. 250.)
    In re PRESTON’S ESTATE.
    (Supreme Court, Appellate Division, Second Department.
    October 3, 1902.)
    1. Transfer Tax — Property Subject.
    Bonds of a private individual secured by a mortgage on real estate situated in New York, both bonds and mortgages being kept in good faith outside of the state, are not subject to the taxable transfer acts.
    Appeal from order of surrogate, Kings county.
    Proceeding to fix the transfer- tax on the property belonging to the estate of Mary Preston, deceased. From an order of the surrogate of Kings county vacating an order made on the report of an appraiser, the state comptroller appeals.
    Affirmed.
    
      Argued before GOODRICH, P. J., and BARTLETT, JENKS, WOODWARD, and HIRSCHBERG, JJ.
    Edward H. Fallows, for appellant.
    Joseph J. Hood, for respondents.
   WOODWARD, J.

Mary Preston, a legal resident of the state of New Jersey, died at her home in Newark, April 21, igoo, possessed of 29 bonds and mortgages, the latter covering certain real estate in the county of Kings. It is not disputed that the bonds and mortgages were actually in the state of New Jersey at the time of Mary Preston’s death, or that they were habitually retained there, and there is no suggestion that there was any bad faith in the matter; but it is urged that these bonds, being secured by mortgages upon real estate in the county of Kings, represented an .interest in property in the state of New York, and that as such they are subject to the taxable transfer acts, and must pay the succession tax. Proceedings having been instituted to fix the transfer tax on property within this state belonging to decedent’s estate, the appraiser reported, among other things, the 29 bonds and mortgages as property within this state, and his report was confirmed by an order of the surrogate of Kings county, dated October 18, 1901. On an appeal being taken, the learned surrogate sustained the appeal, and made an order dated March 3, 1902 (73 N. Y. Supp. 251), modifying the appraisal and order, and deducting from the amount of the property as therein stated the sum of $71,200, the amount of the said bonds, vacating the assessment, and remitting the matter to the appraiser for reassessment in accordance with said order. The state comptroller appeals from the order of modification.

With all of the enlightenment of the learned brief of the appellant, we are unable to distinguish this case, in principle, from In re Bronson’s Estate, 150 N. Y. 1, 44 N. E. 707, 34 L. R. A. 238, 55 Am. St. Rep. 632, where it was held that the bonds of a domestic corporation, owned and held in a foreign state, could not be reached by the taxable transfer acts. It seems to be conceded here that, if the bonds in question were those of a domestic corporation, they could not be reached outside of the jurisdiction of the state, but it is urged that there is a distinction between bonds of a corporation and the bonds of an- individual secured by mortgages upon specific parcels of real estate within the state of New York, and we are asked to distinguish this case from In re Bronson’s Estate, supra, upon this theory. In Re Bronson’s Estate, supra, the court cites the Foreign Held Bonds Case, 15 Wall. 300, 21 L. Ed. 179, where the court say: “But debts owing by corporations, like debts owing by individuals, are not property of the debtors in any sense; they are obligations of the debtors, and only possess value in the hands of the creditors. With them they are property, and in their hands they may be taxed. To call debts property of the debtors is simply to misuse terms. All the property there can be, in the nature of things, in debts of corporations, belongs to the creditors to whom they are payable, and follows their domicile, wherever that may be. Their debts can have no locality separate from the parties to whom they are due.” See, also, City of New Orleans v. Stemple, 175 U. S. 309, 320, 20 Sup. Ct. 110, 44 L. Ed. 174. While it is true that the court does not, in the above excerpt, determine the point suggested by counsel, it is evident that no distinction between corporate bonds and those of individuals occurred to the learned justice who wrote in the Foreign Held Bonds Case, supra, nor yet to the court in Re Bronson’s Estate, supra, and no reason suggests itself why we should attempt so subtle a point.

The order appealed from should be affirmed, with costs. All concur.  