7. How a mechanic's lien is me chanic's lien may be discharged in any one of the fol lowing ways: (a) By expiration. The lien attaches.to the prop erty only for a definite time fixed by statute (in New York, one year from filing) . It then expires, but un der certain circumstances it may be renewed by order of the court upon the application of the lienor.
(b) By deposit of money. A sum sufficient to cover the lien may be deposited with the county clerk, and the lien will then be marked "discharged by pay ment." This is often done when the owner of the property disputes the claim of the lienor, and wishes to free his property from the lien during the litigation. This money is held as security; if the lienor does not take an action within the time. allowed by statute, it is returned to the owner.
(c) By filing a bond. A bond approved by the court may be filed to cover the lien with costs and ex penses. Recourse is then had to the bond and not the property, if the lienor succeeds in establishing claim.
(d) By order of the court. An owner may wish to have the issue with the lienor tried out in court with out delay. In order to do this he can serve the lienor with an order directing him to enforce the lien within thirty days. If the action is not then brought by the lienor, the owner can apply to the court for an order to have the lien discharged. If security is giV en, or money is paid into court, the lienor then proceeds to prove his claims on the fund.
(e) By payment. When actually paid, the owner is entitled to receive a satisfaction of mechanic's lien in proper form for filing with the county clerk or regis trar of deeds.
8. Conditional bill of conditional bill of sale, strictly speaking, applies to personal property and not to real property. When material to be used in the improvement of real estate is sold to a con tractor or owner, the property is often transferred with the express agreement that title to such material shall remain in the name of the vendor until the pur chase price is paid. The instrument expressing the agreement is known as a conditional bill of sale. A copy is filed in a place of public record, and becomes a notice to everyone of the condition attaching to the sale. The material remains personal property until it is attached to the building in such a way that it must be considered real estate. If it is not paid for, it may be removed by the vendor, unless his re moving it would damage the structure. Articles which are frequently the subject of a conditional bill of sale are plumbing, heating and lighting fixtures, ranges, boilers, elevators and machinery.
The conditional bill of sale must be filed in accord ance with the statute, in order to hold good against innocent purchasers or mortgages for value. It is valid for one year from filing, but usually it can be renewed from year to year.
9. Lien of decedent's decedent's debts must be paid immediately upon the death of the owner of property. Creditors have a claim upon his prop erty, both real and personal, before his heirs or next of-kin receive anything from the estate.
Ordinarily, personal property which has not been specifically bequeathed must be applied first to the payment of debts. If such property is sufficient, the personal property which has been specifically be queathed shall then be applied to the payment of debts. If all the personal property is insufficient, the creditors have a right to require the executors to resort to the real property of the decedent for the payment of debts.
During a specified statutory period, from the time letters of administration or letters testamentary are issued, or, if no letters are issued, during some speci fied period from the death of the decedent, a general lien applies to all property which has come from the decedent to any person. A creditor may, at any time within the statutory period, require that the executors. or the administrators shall sell all or enough of the property to pay all debts of the decedent. The pro ceeding is regulated by law, and the property is ally sold under the supervision of the surrogate's court.
10. Transfer lien which arises by reason of death is the state's lien for a special transfer tax or succession duty. The State of New York and a very large number of other states in the Union, tax the act of transferring property from a decedent to those who claim to succeed. The tax is really not upon the property but upon the privilege of succeed ing to the property; to that extent it is more in the nature of an excise than a tax. In its effect, however, it is a true tax, because it is taken out of the thing as it is transferred before it reaches the recipient.
The state can require that all property of the deced ent, or enough to pay the tax, shall be sold. The property, no matter in whose hands it may be, is af fected by the lien of the tax. This is a general lien be cause it may affect any piece of property for the whole amount of the tax.
The rate of taxation differs in various states. Usually property going to descendants, husband, wife, father, mother, brothers and sisters is wholly or partly exempt, or taxable at a lower rate than property going to remoter collateral or to strangers.
11. Franchise tax of the State of New York most corporations are subject to an annual franchise tax. The law governing this tax was amended June 4, 1917. Under the amended law a report must be filed annually by each corporation do ing business in the state according to the form pre scribed for the Federal income tax on corporations. If the business of the corporation is not conducted wholly within the state further reports are required in order to establish the proportion of business within the State of New York. The tax is three per cent on the net income, or on the computed proportion of the net income which arises from business operations in New York State. The tax when fixed becomes a lien on all. property of the corporation within the state.