
    In the Matter of the Appraisal under the Act Relating to Taxable Transfers of Property of the Estate of Mary Preston, Deceased. Nathan L. Miller, as Comptroller of the State of New York, Appellant; Thomas J. Preston and Others, as Executors, etc., of Mary Preston, Deceased, and Others, Respondents.
    
      "Transfer tax — bonds, held, by a non-resident, Secured by mortgages on land in New York, are not taxable.
    
    ■Bonds, secured by mortgages upon real estate in the county of Kings, New York, owned by a resident of the State of New Jersey, habitually kept by the owner in the State of New Jersey and actually in that State at the time of her death, are not subject to a' transfer tax in the State of New York.
    Appeal by Mathan L. Miller, as Comptroller of the State of Mew York, from an order of the Surrogate’s Court of Kings county, ■entered in said Surrogate’s Court on the 3d day of March,. 1902, vacating an order theretofore entered in the proceeding upon the report of the appraiser appointed under the Taxable Transfer Act, ■and remitting said report to the appraiser for correction.
    
      Edward K. Fallows, for the appellant.
    
      Joseph J. Hood, for the respondents.
   Woodward, J.:

Mary Preston, a legal resident of the State of New Jersey, died at her home in Newark, April 21, 1900, possessed of twenty-nine 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 Act (Laws of 1896, chap. 908, art. 10, as amd.), and must pay the succession tax. Proceedings having been instituted to fix the transfer tax on property within this State" belonging to the decedent’s estate, the appraiser reported, among other things, the twenty-nine 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, 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 that of Matter of Bronson (150 N. Y. 1), where it was held that the bonds of a domestic corporation, owned and held in a foreign State, could not be reached by the former Taxable Transfer Act (Laws of 1892, chap. 399). 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 Matter of Bronson (supra) upon this theory. In Matter of Bronson (supra) the court cites State Tax on Foreign- held Bonds (15 Wall. 300), 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, tó 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, New Orleans v. Stempel, 175 U. S. 309, 320.) 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 Matter of Bronson (supra), and no reason suggests itself why wé should attempt so subtle a point.'

The order appealed from should be affirmed,- with costs.

All concurred.

Order affirmed, with ten dollars costs and disbursements.  