Chicago Great Western Railroad v. State

Headnote

Tax — stock transfer tax — when claim for refund of amount of tax paid upon transfer of stock to holders of voting trust certificates properly dismissed.

Chicago Great Western R. R. Co. v. State of N. Y., 197 App. Div. 742 , affirmed.

Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered July 21, 1921, unanimously affirming a judgment of the Court of Claims dismissing the plaintiff’s

claim. In 1909 the stock of the Chicago Great Western Railroad Company was placed in the hands of voting trustees. The trustees were to have full voting power of the stock until September 1, 1914, at which time they were to transfer the stock to the holders of voting trust certificates. The voting trustees did during the period from August 31, 1914, to February 6, 1915, transfer stock to the holders of voting trust certificates, and paid $11,330 for stock transfer stamps to be placed on the certificates of stock transferred. This claim is for the refund of said $11,330 so paid. Claimant contended that the transfers of the stock by the voting trustees to the holders of the voting trust certificates were not taxable under the Stock Transfer Tax Act; that the statute under which the transfer tax was collected impaired the obligation of a contract and was to that extent unconstitutional; the statute under which the transfer tax was collected deprived the claimant of its property without' due process of law and was to that extent unconstitutional and that the stock transfer tax stamps were erroneously affixed, and the claimant is entitled to the refund claimed under the provisions of section 280 of the Tax Law.