Carey v. Minor C. Keith, Inc.

• Citation: 164 N.E. 912,250 N.Y. 216
• Parties: CAREY v. MINOR C. KEITH, Inc., et al.
• Decision Date: 15 January 1929
• Court: New York Court of Appeals

250 N.Y. 216

164 N.E. 912

CAREY

v.MINOR C. KEITH, Inc., et al. ^*

Court of Appeals of New York.

Jan. 15, 1929.

Action by Helen V. Carey against Minor C. Keith, Inc., and another. Judgment of the Trial Term wherein a jury was waived dismissing the complaint upon the merits was affirmed by the Appellate Division (223 App. Div. 789, 227 N. Y. S. 781) and plaintiff appeals by permission.

Reversed, with directions.

Appeal from Supreme Court, Appellate Division, Second department.

Clarence G. Bachrach, of Brooklyn, for appellant.

John Ingle, Jr., and Thomas P. De Graffenried, both of New York City, for respondents.

CRANE, J.

The plaintiff sues to recover her purchase price, together with cost of title search. The contract of real estate purchased was executed December 11, 1925, title to be closed on June 10, 1926. After five adjournments closing was fixed for August 3, 1926. On that date title was rejected for various reasons, among them being the lien of the unpaid franchise tax for 1925. The defendant, seller, is a foreign (Delaware) corporation. Pursuant to article 9-A of the Tax Law (Cons. Laws, c. 60), every foreign corporation doing business in this state ‘shall annually pay in advance for the year beginning November first * * * an annual franchise tax, to be computed by the tax commission upon the basis of its entire net income, * * * for its fiscal or the calendar year next preceding.’ Section 209.

Every corporation shall annually on or before July first transmit to the tax commission a report in the form and manner specified in section 211 of the article. Section 214 states how the tax shall be computed. The tax fixed and imposed shall be paid to the state tax commission on or before the 1st day of January of each year. ‘Each such tax * * * shall be a lien and binding upon the real and personal property of the corporation liable to pay the same until the same is paid in full.’ Section 219-c.

This vendor corporation made a return or report pursuant to section 211 on or before July 1, 1925. No tax had been fixed or computed on the report, but nevertheless a tax was due for the year beginning November 1, 1925, and was payable on or before January 1, 1926. It was to be paid ‘in advance for the year beginning November first, 1925,’ and was made a lien until paid.

The tax became a lien, therefore, November 1, 1925, although the amount was subject to future computation. This method of collecting a tax due the state is not unlike that provided for collecting the tax on transfers under article 10 of the Tax Law. Section 222 provides that unless otherwise provided such taxes shall be due and payable at the time of the transfer, and section 224 makes them a lien upon the property transferred until paid. The lien attaches at the time of transfer, which, if by will or intestate laws, is the date of the death of the person seized or possessed of the property. Midurban Realty Corporation v. F. Dee & L. Realty Corporation, 247 N. Y. 307, 160 N. E. 380. The amount of such a tax, however, cannot be ascertained until the estate is appraised and the rate and the amount determined as specified in the act.

We held in Engelhardt v. Alvino Realty Co. Inc., 248 N. Y. 374, 162 N. E. 287, decided after the trial of this case, that such taxes were a lien upon the corporate property althoughno reports had been made and no tax computed. The tax by law was to be paid as of a certain date, and the property of the corporation was burdened with this charge, the exact amount of which might be subsequently fixed by the tax commission. It was the duty of the corporation to have it fixed and to make the payment. We said that the tax became a lien upon the real estate of the corporation upon the 15th day of January in each year. The statute applicable in that case read somewhat differently from the present section. The tax was to be a lien ‘from the...