CITY OF NEW YORK v. Tully

55 N.Y.2d 960 (1982)

In the Matter of the City of New York, Respondent,

v.

James H. Tully et al., Constituting the State Tax Commission, Respondents, and 77 West 55th Street Associates, Appellant.

Court of Appeals of the State of New York.

Argued January 11, 1982. Decided February 16, 1982.

Martin B. Cowan and Wayne R. Lehrhaupt for appellant.

Frederick A. O. Schwarz, Jr. , Corporation Counsel ( Arnold Fox and Gale Zareko of counsel), for City of New York, respondent.

Robert Abrams , Attorney-General ( Francis V. Dow and Shirley Adelson Siegel of counsel), for State Tax Commission, respondent.

Chief Judge COOKE and Judges GABRIELLI, JONES, WACHTLER, FUCHSBERG and MEYER concur in a memorandum; Judge JASEN taking no part.

*962 MEMORANDUM.

The judgment of the Appellate Division should be reversed, with costs, and the determination of the State Tax Commission is reinstated.

We find no error in the determination of the State Tax Commission that the mortgage agreement in question was a supplemental mortgage within the purview of section 255 of the Tax Law and did not create a new or further indebtedness or obligation. The commission found that the agreement did not change the creditor, the maturity or interest rate, but instead it changed only the collateral. Hence, no additional mortgage tax was due upon the recording of this agreement. It is significant that the release of the leasehold from the lien did not occur before the fee was added to the security for the principal indebtedness. Additionally, we note that respondent taxpayer is not entitled to interest on its refund from the time of payment of the tax ( Matter of Brodsky v Murphy , 25 N.Y.2d 518 ).

Judgment reversed, etc.