In re Pink , 38 N.Y.S.2d 447 ( 1942 )

We are of opinion that the corporate owner is not entitled to deduct the" interest and insurance premiums incidental to the second and third mortgages as operating expense within the meaning of the statute (Civ. Pr. Act, § 1077-c) since the holders of these mortgages own all the stock of the owner corporation in equal shares, respectively. The fact that one of these mortgages is a second mortgage and the other a third is immaterial. Under the circumstances, the respondent is at liberty to satisfy them both at any time and thus eliminate such items of interest as carrying charges. Hagarty and Taylor, JJ., concur; Carswell, J,, concurs in the result; Lazansky, P. J. and Adel, J., dissent and vote to affirm the order on the ground that the mortgage and stock interests were not identical, in that one of the holders of one-half of the stock held a second mortgage, the other a third mortgage. The mortgages were executed in good faith long before the legislation involved was enacted, and payments of interest thereon have been made. Settle order on notice.