49 N.Y.S. 10 | N.Y. App. Div. | 1898
The relator is an Iowa corporation organized under the laws of that State in September, 1882, having a capital of $840,000. Its business consists in the loaning of money on bond and mortgage in several of the Western States and selling the bonds themselves or debentures based thereon. It began business in this State in September, 1886. It has an office and place of business in the city of New York and its president and treasurer are located there, and it has a license for the transaction of the business of investments from the banking department of this State. The home office is at Des Moines, Iowa, and there the two vice-presidents of the company and the general counsel are located. It has also an office at Kansas City, Mo., and one at Dallas, Tex. It lends the capital of the company on real estate mortgages in Iowa, Missouri and Texas. Bonds accompany the mortgages. These bonds and mortgages are sometimes sold at those offices; what are not sold there are sent to the New York office for sale. The proceeds of sales at the New York office are deposited in the bank in New York and subsequently sent to the home office or lending office for lending again on mortgages.
It is clear that the relator is doing business within this State. It is,, however, contended upon its behalf that no part of its capital is employed by it within this State, and that, therefore,, there is no basis for the tax. (Laws of 1896, chap. 908, § 182.) The argument is that, although the securities are here, the moneys or the debts represented by the securities must be deemed to be located at the, residence or location of the corporation in Iowa.
The securities were used here, and, presumptively, transferred here to the different purchasers. The capital of the corporation was dealt with here, and was actually here when, by sales of the securities, the money was realized and deposited here. In that way the capital was handled here to an amount several times greater than the average amount of securities kept on hand. In the course of this business the stock of securities was being sold and replenished. The securities for the purposes of the transactions of the company were its goods. The sales were made and consummated on transfer of the securities as effectually as if the articles sold were chattels.
In People ex rel. Edison E. L. Co. v. Campbell (138 N. Y. 543, 547) it was said of bonds of a foreign corporation held by. a domestic' corporation that, such bonds, as well as all choses in action, unless kept, employed or used outside of the State, have their situs at the domicile of the owner. The inference, as claimed here: by the defendant, is, that if the bonds are képt, employed of used, as here, outside of the State of the domicile of the owner, the situs is at the place where they are kept or used. The same inference is made from what was said in People v. Campbell (88 Hun, 544).
It is claimed on the part of the relator that the cases- of The Parker Mills v. The Commissioner of Taxes (23 N. Y. 242). and The People ex rel. Bank of Montreal v. Commissioners, etc. (59
In The Bank of Montreal case the bank had an agency permanently established in the city of Hew York, to which it transmitted its surplus funds, to be employed in temporary loan's, subject at all times to its control and drafts. It was held that the bank was exempt under the provisions of the act of 1851, exempting from taxation foreign capital transmitted to agents here for the purposes of investment or otherwise, and that the act of 1855 did not apply.
These cases are not, I think, controlling here. There is no question here of exemption, but the question is whether, within the meaning of the acts imposing a franchise tax as for the privilege of doing here a conceded business, there was an employment here of the capital of the relator, or of some portion thereof.
The case of People ex rel. The Chicago J. R. & U. S. Co. v. Roberts (154 N. Y. 1) is not applicable here. There the whole business of the relator within this State consisted of the distribution of its income or dividends.
It seems to me to be reasonably clear that a considerable portion of the capital of the relator was employed in this State, within the meaning of the statute. That being so, it only remains to apply the rule for ascertaining the amount, which has been quite definitely
In arriving at the amount, the average amount of securities held and used in' this State may, I think, be considered, as well as the hank account (Seth Thomas Clock Co. Case, supra, 328), and I see no good-reason why the amount paid out for the salaries- and for rentals, less what may be properly deemed to be income, may not also be taken into account. The amount upon which the Comp troller based the tax was the sum of $215,000.
Ho particular point seems to be made as to the amount of tax,, assuming that capital of the relator was employed within this State within the inéaniug of the act.
It follows that the determination of the Comptroller should be confirmed. ' • '
All concurred.
Determination of the Comptroller confirmed, with costs.