The opinion of the court was delivered by
Johnston, C. J.:
This proceeding involves an application by the state for an order requiring the Kansas City Pipe Line Company, a New Jersey corporation licensed to do business in Kansas, to pay its corporation fees imposed by the state for the years 1918 and 1914, in amount $2000 for each year. The trial'court gave judgment in favor of the state for the 1913 fee but. held that the corporation was not liable for that of 1914. The state appeals.
The tax is imposed under chapter 135 of the Laws of 1913 (Gen. Stat. 1915, §§ 2167-2180). According to section 2 of the act it is laid on foreign corporations “for the privilege of exercising its franchise in Kansas.” (The State, ex rel., v. Sessions, 95 Kan. 272, 147 Pac. 789.) To determine whether or not the pipe line company was exercising its corporate privileges during the year 1914 so as to maké it liable for the corporation tax the leading facts in its history must be considered. The pipe line company is the owner of pipe lines, pumpihg stations and other appurtenances and facilities for the production, sale and distribution of natural gas in Kansas. In February, 1906, it executed a lease of all .its property to the Kaw Gas Company, a subsidiary company of the Kansas Natural- Gas Company, excepting only its corporate franchise, its office fixtures, its corporate seal, its minute, transfer and stock books, its dividend books and its deeds and documents showing its right and title to the leased property;, and since that time the Kansas Natural Gas Company has had charge of the leased property. According to the report filed in the secretary of state’s office for the year 1914 the pipe line company had a paid-up capital of four and a half millions and *673the value of its property as fixed by the tax commission was $3,094,243. The ruling herein was made in a suit brought by-the state against the Independence Gas Company and others for certain violations- of the anti-trust laws. The pipe line company and others were afterwards made parties defendant upon the order of the court. On February 15, 1913, an injunction was issued against the last named defendants enjoining them from appearing in any other court in connection with the matters involved in that proceeding. On June 21, 1913, plaintiff filed a supplemental petition asking for the appointment of a receiver for the pipe line company until certain perversions and abuses by the corporation were corrected, and charging also that the corporation had violated the injunction of February 15, 1913. A receiver was appointed upon the application of the plaintiff and in its order the court recited that the pipe line company had taken action in the federal court which was in effect an attempt by the company to interfere with the jurisdiction of the state court and a violation of the injunction previously issued. Afterwards the receiver reported that although he had made demand for the property of the pipe line company none of the property or assets in the hands of the lessee had been delivered to him. On December 17, 1914, the pipe line company, as well as the other defendants, entered into a stipulation with the creditors of the Kansas Natural Gas Company which, among other things, provided for paying certain indebtedness of the pipe line company and for the final merger of the pipe line company with the Kansas Natural Gas Company; and this agreement was incorporated into an order of the court made December 29, 1914.
It is contended that the pipe line company is not carrying on business in Kansas and is no more than an instrumentality of the Kansas Natural Gas Company, which owns one-half of its capital stock. While the company leased nearly all of its property to another company there was an explicit withholding of certain property and of its franchise and privileges. The lease contemplates the continued existence of the pipe line company and the exercise of its franchise, in several particulars. Aside from excepting its franchise to-be a corporation, from the lease, it reserves the corporate seal, books and furniture ; and there is a stipulation that during the continuance *674of the lease the lessor will maintain its corporate organization, elect officers, hold meetings, make all necessary records and returns and, at the request of the lessee, do any necessary corporate acts for the furtherance of the business, and that if the lessor fails to do so the lessee may use the name of the lessor in the exercise of the corporate powers and privileges, and also in prosecuting or defending actions to protect its interests. There is a stipulation that if the lessee desires to resist a tax or assessment on the ground of illegality, the lessor shall not pay the tax or assessment until thirty days after final adjudication of the question. It is further provided that the lessee will pay taxes, assessments, licenses or charges imposed upon the lessor with reference to its capital stock, franchise, privileges or property. The lessee agrees to pay mortgage bonds of the lessor as they fall due; also a sum sufficient to enable the lessor to pay six per cent dividends on its capital stock and the actual expense of maintaining its corporate existence, not exceeding $500 per year. Another stipulation is that the lessee will operate the plant and property in such a manner as will meet the demands of the public service and promote the interests and preserve the franchise vested in the lessor. It contains a provision as to making extensions and betterments of the plant and that if made from the proceeds of the bonds of the lessor the extensions and betterments so made and all rights or privileges obtained in connection with the premises' shall become the property of the lessor. The lessee was required to insure the leased premises against damage by fire in good companies in a particular way, but it is stipulated that the lessee may adopt another plan of protection provided it is approved by the directors of the lessor. There is the further stipulation that upon the expiration or ■earlier termination of the lease the property including all the additions and improvements and all the accompanying rights, privileges and franchises shall be returned and surrendered to the lessor, and that if at any time the lessee defaults or fails to perform the covenants and conditions of the lease and if the default continues for thirty days after notice and 'demand by the lessor that the lessee pay or perform, the lessor may terminate the lease and reenter upon the premises, taking possession of all the property as well as the rights, privileges and franchises which had been acquired by the lessee *675in connection with the property. To protect its rights the lessor is authorized at all reasonable times to enter upon and inspect the property so as to ascertain whether the conditions of the lease are being faithfully carried out.
It is manifest that the parties intended and provided that the pipe line company should continue its corporate existence, elect officers and maintain its corporate organization and should exercise corporate privileges within the state during the continuance of the lease. It is equally clear that it contemplated that corporate business of an important character should be done by the pipe line company. While it turned over the principal part of its property to the lessee, it retained a part, as we have seen, and according to the lease it was provided that upon certain contingencies the leased property should be returned to it as well as the additions and betterments made while the plant was in the possession of the lessee. While the business done was small compared with what would have been done had the lease not been effected, the company was still doing corporate business in the state and business which, under the terms of the lease, was essential to the operation of the plant and the carrying out of the agreement between the lessor and lessee. The fact that the state in the action brought had charged the pipe line company with violations of the law and abuses of corporate privileges did not exempt the company from liability for the corporation tax. Perversions may be, enjoined and abuses corrected without dissolving the corporation or ousting it from the state. Neither did the fact that a receiver was appointed relieve the company from the payment of the tax. While the receiver is ah officer of the court he is also acting as and- for the company. The franchise is exercised and the business conducted just as the board of directors or other managers would have done if no receiver had been appointed. It has already been held that whén a receiver is carrying on the business of a corporation as a going concern he is in effect exercising the corporate franchise and is subject to the payment of the corporation tax. (The State, ex rel., v. Sessions, 95 Kan. 272, 147 Pac: 789; see, also, Central Trust Co. v. N. Y. C. & N. R. R. Co., 110 N. Y. 250; N. Y. Terminal Co. v. Gaus, 204 N. Y. 512.) The company as a going concern exercised the same corporate *676privileges as it had exercised during the year 1913, and for the tax of that year the trial, court held it to be liable. It appears that the receiver is still exercising the functions of his office and doing the business which the company had been doing prior to his appointment. There has been no ouster by the state and the pleadings filed by it did not ask for a dissolution of the corporation; It is contended that the creditors’ j agreement signed by the parties, including the plaintiff, should, be treated as a consent by the state to a dissolutibn of the corporation. That agreement among many other things provided that upon the making of certain payments and assignments and the performance of other conditions the property of the pipe line company should be merged in and become a part of the properties of the Kansas Natural Gas Company. Even if the agreement were given the interpretation claimed for it by the defendant it would not relieve the company from the payment of the tax. The agreement was not made until after the liability for the tax of 1914 had attached. It appears to have been executed on December 17, 1914, and was approved by the court on December 29, 1914. At that time the court expressly ordered that the receivership of the pipe line company should be continued after January 1, 1915, and until such future time as to the court should appear to be advisable, and also that the property and business of the pipe line company should remain in the control of the receiver. The order contemplated that corporate privileges were to be exercised and business was to be done by the receiver throughout and after the year 1914 and no reason is seen for excusing the company from the payment of the tax imposed for that year.
The judgment is reversed with directions to enter judgment in favor of .the plaintiff for $2000.
Dawson, J., not sitting.