The Appellate Term has modified a judgment of the Municipal Court in- plaintiff’s favor, by strildng out the money award to plaintiff and by dismissing the complaint on the merits.
Plaintiff sued to recover the sum of $425 on a promissory note made by defendant. Admitting execution of the note, defendant set up as a separate defense that the note, which is a renewal of a note which had been given to plaintiff, was delivered in part pay*701ment for certain shares of stock sold to him by plaintiff (the total sales price being $2,000), but that at the time of the transfer and delivery of the stock certificate to him, plaintiff had not affixed the transfer tax stamps nor paid the tax as required by section 270 of the Tax Law, nor had plaintiff delivered to him at that time a bill or memorandum of sale to which tax stamps had been affixed.
Section 270 of the Tax Law of the State of New York provides, inter alia, as follows:
“ § 270. Amount, of tax. There is hereby imposed and shall immediately accrue and be collected a tax, as herein provided, on all sales, or agreements to sell, or memoranda of sales and all deliveries or transfers of shares or certificates of stock, or certificates of rights to stock. * * * It shall be the duty of the person or persons making or effectuating the sale or transfer to procure, affix and cancel the stamps and' pay the tax provided by this article.”
It has been said that the tax which this section imposes upon all completed transfers of stock and other corporate certificates is “ in the nature of an excise tax.” (United States Radiator Corp. v. State of New York, 208 N. Y. 144, 148.) This section was interpreted in Travis v. American Cities Co. (192 App. Div. 16, 23; affd., 233 N. Y. 510) as “ designed to tax actual sales and transfers of stock.” It contemplates the physical act of delivery of the certificate. If this were an executory contract, the statute would not apply. (Phelps-Stokes Estates v. Nixon, 222 N. Y. 93, 100.) The transaction involved in this suit was admittedly an executed sale, transfer and delivery of a stock certificate and, therefore, taxable under this statute. The note sued on had for its consideration the actual sale of corporate stock, and it was conceded at trial that no stamp was affixed upon the stock or upon any memorandum of the sale or transfer thereof. The explanation offered by plaintiff for her failure to affix the transfer tax stamps was that when the sale was consummated, her husband and agent offered to defendant, who is a lawyer and was secretary of the corporation, shares of which were being sold, the sum of ten cents, the precise amount of the tax due, and that defendant replied, “ Never mind, I will put the stamp on myself.” Plaintiff’s version of this circumstance was accepted as true by the trial court, for it rendered judgment in her favor and, since her complaint has been dismissed, that fact must be deemed established.
Equitable considerations would ordinarily estop a defendant from taking advantage of his failure to keep his promise to affix the stamps whereby he misled the vendor to his own profit. But no *702matter if his conduct be unconscionable, we may not be led into disregarding the force of that statute. Public policy requires that this tax statute be enforced, and overrides plaintiff’s equities. The duty of procuring, affixing and canceling the requisite stamps rests upon the person making or effectuating the sale or transfer and may not be delegated or left to the future. It must be performed at or before delivery of the purchased certificate. The effect of non-compliance with section 270 upon a legal proceeding is set out in section 278 of the Tax Law, as follows:
“ § 278. Effect of failure to pay tax. No transfer of certificates taxable under this article made after June first, nineteen hundred and five, on which a tax is imposed by this article, and which tax is not paid at the time of such transfer, shall be made the basis of any action or legal proceedings, nor shall proof thereof be offered or received in evidence in any court in this State.”
Failure to pay this transfer tax is matter for affirmative defense (Bean v. Flint, 204 N. Y. 153,164), and defendant having sufficiently pleaded it, is entitled to prevail. Even though there be no intent to violate the law, where the seller through ignorance of the law or mere inadvertence omits to pay the tax and comply with the statute, such failure precludes the right to a recovery in court, for proof of the transfer may not then be received in evidence under our statute. (Sheridan v. Tucker, 145 App. Div. 145.)
“ The object of all these tax provisions is to get money for the State” (Luitwieler v. Luitwieler P. E. Co., 231 N. Y. 494, 498), and for the better enforcement of the statute it is clearly commanded that the tax be paid and the stamps affixed and canceled at the time of the transfer. In this way only is the State adequately protected. The seller’s duty was to pay the tax; not only to procure and affix the stamps, but to cancel them as well. Even if it be that plaintiff acted entirely in good faith in the transaction and was misled by defendant, nevertheless to sanction recovery would be to deny effect to the scheme and spirit of the taxing statute.
The determination of the Appellate Term so far as appealed from should be affirmed, with costs.
Finch, P. J., Martin and Townley, JJ., concur; Merrell, J., dissents and votes for reversal.