
    The People ex rel. Horace E. McKnight, as District Attorney of Saratoga County, New York, Plaintiff, v. The Union Bag and Paper Company, Defendant.
    (Supreme Court, Saratoga Trial Term,
    April, 1909.)
    Statutes—■ Retroactive effect: Relating to taxation; Relating to remedies.
    Taxes — Collection of taxes — Warrant and enforcement—Actions — Pleading — Complaint.
    Section 296 of chapter 340 of the Laws of 1907, which went into effect May 13, 1907, contains the earliest provision indicating that the mortgagor is under liability to pay the tax imposed by the Mortgage Tax Law; and, although the provisions of the act, so far as they authorize proceedings to enforce payment, may Be retroactive and valid as to matters of practice, they cannot impose a liability upon a mortgagor for the payment of a tax upon a past transaction.
    Accordingly, where, in an action brought under the Mortgage Tax Law to recover taxes upon certain advances alleged to have 'been made between July 1, 1906, and July 1, 1907, upon a trust mortgage executed by defendant, it is impossible to determine from the complaint whether said advances were made prior or subsequently to the time when said statute went into effect, a demurrer to the complaint will be sustained with leave to plaintiff to plead over.
    Action to recover taxes under the Mortgage Tax Law.
    
      Horace E. McKnight (Nash Rockwood, of counsel), for plaintiff.
    Simpson, Thacher & Bartlett (Alfred B. Thacher, of counsel), for defendant.
   Spencer, J.

This action is brought by the district attorney of Saratoga county in behalf of the State, .under the provisions of the Mortgage Tax Law (Laws of 1905, chap. 729; Laws of 1906, chap. 532; Laws of 1907, chap. 340), to recover a tax imposed upon certain advances made upon a trust mortgage executed by the defendant and recorded June 29, 1905, in Saratoga county clerk’s office, which advances, amounting to $400,000, were made between July 1, 1906, and July 1, 1907. The defendant demurs to the complaint on the ground that the facts alleged do not constitute a cause of action against the defendant and that the amendments to the original act, made in 1906 and 1907, are in violation of certain provisions of the United States Constitution.

As the court has reached the conclusion that, under the present complaint, there is no liability upon the defendant to pay the tax in question, it will not be necessary to prolong this opinion on the constitutional questions presented by the respective counsel. The original act (Laws of 1905, chap. 729) has been before the Court of Appeals and held to be constitutional. People ex rel. Eisman v. Ronner, 185 N. Y. 285. The tax imposed by that act was the same in all substantial particulars as the one substituted for it by the act of 1906 and re-enacted by the act of 1907. The changes have to do with the time and manner of payment but are upon the same class of property. If, therefore, the statute of 1905 does not violate the Constitution, the latter cannot be regarded as so doing.

The serious question in this case is whether any personal liability has been imposed by the statute upon the defendant to make payment of this tax at any time and upon any contingency. In determining this question, we must remember that the defendant may not be held liable for payment of the tax, unless it be by clear warrant of law. The statute is to be construed, strictly; and, if there be any doubt on the subject, it should be resolved in favor of the defendant. Matter of Enston, 113 N. Y. 174, 178; Matter of Vassar, 127 id. 1, 12; Matter of Fayerweather, 143 id. 114, 119; Matter of Harbeck, 161 id. 211, 217.

Begard must also be had to the indefinite and confused character of this statute and the peculiar difficulties attending its interpretation. The original act is far from clear and has been made practically unintelligible by the remarkable method of its amendment. Some sections are repealed, others amended, many renumbered and some restated, and new sections are added; so that, as it now stands, it is a rare specimen of patchwork difficult to comprehend.

The act of 1905, chapter 729, did not provide as to the way or manner or from what persons enforced payment of the tax might be made. It provided for the usual method of seizure as in the case of taxes generally. § 306. But that provision was repealed by section 12, chapter 532, Laws of 1906. It also provided that each and every agreement by a mortgagor to pay the tax should be regarded as usurious and void. Laws of 1905, chap. 729, § 309. This court has intimated that such provision is void (People ex rel. Eisman v. Ronner, 110 App. Div. 816), and it has been repealed, but still serves to indicate that the intention of the Legislature was to prevent the imposition of the tax upon the mortgagor.

Furthermore, the tax is required to be paid to the recording officer at the time the mortgage is recorded as to all advances made at that time or which were made theretofore. As mortgagees ordinarily cause mortgages to be recorded for their own protection, this provision would seem" to indicate that the owner of the mortgage is required to pay the taxes. The act further prohibits the recording of a mortgage by the recording officer prior to the payment of the tax.

The only provision indicating that the mortgagor is under liability to pay the tax is found in section 296, chapter 340, Laws of 1907, which authorizes the district attorney to bring suit for its collection against the mortgagor in case the tax is not paid. This act went into effect May 13, 1907. The advances in question were made, as alleged in the complaint, between July 1, 1906 and July 1, 1907. It is impossible for the court to determine whether the advances antedated the act or were made subsequently to the act. The provisions of the act," so far as they authorize proceedings to enforce payment, may be retroactive and valid as to matters of practice; but, as creating a liability against the defendant in respect to a prior transaction, they are retrospective and invalid and may only be regarded as indicating the present intentions of the Legislature on the subject.

I am of the opinion that the act does not justify an inference that the defendant is personally liable for the -tax so as to sustain an action, against the defendant therefor, and that the demurrer should be sustained, with costs, the plaintiff to plead over on the usual terms.

Judgment accordingly.  