The proceeding is to review by writ of certiorari the imposition of a tax under section 182 of the Tax Law (Cons. Laws, ch. 60), upon the relator. Section 182, at the time of the imposition, provided: "For the privilege of doing business or exercising its corporate franchises in this state every corporation, joint-stock company or association, doing business in this state, shall
pay to the state treasurer annually, in advance, an annual tax to be computed upon the basis of the amount of its capital stock, employed during the preceding year within this state, and upon each dollar of such amount. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business." The statute further declares the basis for stating the amount of the tax in a given case. The tax here was for the year ending October 31, 1913, computed upon the basis of the amount of its capital stock employed the preceding year within this state. The appellant asserts that the tax was unauthorized because it was not "doing business in this state," within the meaning of the statute, during that year.
The appellant was organized August 24, 1895, under section 3 of the former Stock Corporation Law (Laws of 1890, ch. 564, as amd. by ch. 688 of the Laws of 1892). Pursuant to the purposes of its incorporation and statutory authorization, it succeeded, through purchase by a reorganization committee at a mortgage foreclosure sale, to the railroad property and franchises of the Southern Central Railroad Company. Under the reorganization plan $3,803,348 of its authorized capital stock was issued for the property and franchises. The railroad was in the state of New York. The Southern Central Railroad Company, a domestic corporation, was organized under the General Railroad Law (Laws of 1850, ch. 140, and amendatory acts) and had, speaking generally and with sufficient accuracy, the powers, rights and franchises which that law grants, and which by the force of the statute vested in the appellant. (Laws of 1890, ch. 564, § 3.) The appellant, by an indenture dated August 24, 1895, and as the reorganization plan contemplated, leased to the Lehigh Valley Railroad Company all its property, real and personal, and franchises, except the franchise to
be a corporation, for the term of nine hundred and ninety-nine years. The Lehigh Valley Railroad Company was a foreign corporation. It agreed to operate, through the term, at its cost, to the best of its ability, the railroad at advantageous rates to be fixed by it. It guaranteed the payment of the principal and interest of the bonds issued by the appellant. It agreed to pay, as rental, the part of the gross income from operation in excess of all the expenses of operation, maintenance and betterments, the taxes and the bonds, indebtedness and necessary expenses of the appellant, including those of maintaining its corporate existence, and apply, as provided, the rental to the holders of the stock of the appellant. If the gross receipts in any year did not equal the authorized deductions, it might advance the deficiency and deduct in future years the sums advanced, or at its option collect them or surrender the lease. It might sell the property not necessary for the operation of the railroad, and indemnify the appellant against damages and costs arising from any act on its part. The appellant agreed to maintain its corporate existence and, as requested by the lessee, exercise any corporate power enabling the lessee to enjoy the leased property. During the year ending October 31, 1912, it received no rental or income, declared no dividend, had no bank account, had no place of business in this state, made no investments and did nothing in the state except to keep alive its corporate existence — the corporate officers being elected at the annual meeting of the stockholders. The comptroller found and made the final determination now under review, that the appellant's capital stock employed for the year in question was in value $3,803,348 and taxable at the statutory rate.
The appellant is, as has been stated, a domestic corporation. The learned counsel for the respondent asserts that the section 182 obligates it to pay the tax for the privilege of exercising its corporate franchises in this state
irrespective of the fact, if it existed, that it was not doing business in the state. He argues that the words "exercising its corporate franchises" are applicable to domestic corporations alone and that the words "of doing business" and "doing business in this state" are applicable to foreign corporations alone. He supports his argument by referring to the language of the section as it was (Laws of 1896, ch. 908; Laws of 1880, ch. 542, § 3;People v. Equitable Trust Co., 96 N.Y. 387; People ex rel.American Contracting Dredging Co. v. Wemple, 129 N.Y. 558) prior to the amendment of 1906 (Laws of 1906, ch. 474). The language of the statute, as it has been since 1906, does not warrant the assertion of the respondent. It is, in the particular under consideration, precise, clear and unambiguous. It states plainly and accurately that every corporation doing business in this state shall pay the tax for the privilege of doing business or exercising its corporate franchises. It creates, without dubiety, the liability from the two facts of (a) doing business in the state (b) in a capacity other than individual. The courts have so declared. Judge WERNER, after quoting the part in question of the first sentence, said: "The quoted language of this section is unmistakably plain and comprehensive. It includes `every corporation' doing business within the state, and distinctly declares that it is a tax `for the privilege of doing business or exercising corporate franchises in this state.'" (People ex rel. Interborough R.T. Co. v. Sohmer, 207 N.Y. 270,274.) Judge GRAY said: "Section 182 of the Tax Law imposes an annual franchise tax upon every corporation doing business in this state * * *." (N.Y. Terminal Co. v. Gaus, 204 N.Y. 512,514.) Mr. Justice HOLMES said: "By the former of these (sections 182 and 184) a tax computed on the basis of its capital stock is levied on every corporation doing business in the state * * *." (State ex rel. Interborough R. Transit Co. v. Sohmer,237 U.S. 276, 283.) Mr. Justice DAY said in a case involving
a corporation of this state: "The charge * * * is upon the doing of business as a corporation of the State within the State." (People ex rel. Cornell Steamboat Co. v. Sohmer,235 U.S. 549, 559.) It is only when the language of a statute leaves its purpose and intent uncertain or questionable that rules of construction are invoked. (People ex rel. New York Central H.R.R.R. Co. v. Woodbury, 208 N.Y. 421.) The statute must be applied as it speaks.
The appellant was not, within the year in question, doing business in this state. Its sole activity was to maintain its corporate existence. In the world of business and industry it was merely the depositary of the naked legal title of the property and franchises which it had acquired and demised many years prior. In case it had been an individual it would not be seriously argued, we think, that the individual was doing business. In case the appellant were a foreign corporation it would not be seriously argued, we think, that it was doing business in this state. The words "doing business in this state" have one and the same meaning whether applied to a foreign or domestic corporation. Conditions which do not constitute liability, in the particular under discussion, on the part of a foreign corporation do not subject a domestic corporation to the liability. But discussion is rendered supererogatory by judicial decisions which we deem well reasoned and conclusive. InMcCoach v. Minehill Schuylkill Haven Railroad Co. (228 U.S. 295) the court determined that the defendant was not doing business within the meaning of the Corporation Tax Law (Act of August 3, 1909, § 38). The section (38) provided: "That every corporation * * * organized for profit and having a capital stock represented by shares * * * and engaged in business in any state * * * shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation * * *." The defendant there, a railroad
corporation, after operating its railroad for many years, leased it upon terms identical in the determinative features with those of the lease sub judice, except the rental was a fixed sum. The court said: "We cannot, however, agree with the contention made in behalf of the Government that because the Minehill Company retains its franchise of corporate existence, maintains its organization, and holds itself ready to exercise its franchise of eminent domain, or other reserved powers, if and when required by the lessee, and ready to resume possession of the property at the expiration of the lease, it is therefore to be treated as doing business, in respect of the railroad, within the meaning of the Corporation Tax Law. As to these matters the case is governed by what was said by the court in Flint v. Stone Tracy Co. (220 U.S. 107, 145) — `It is therefore apparent, giving all the words of the statute effect, that the tax is imposed not upon the franchises of the corporation irrespective of their use in business, nor upon the property of the corporation, but upon the doing of corporate or insurance business and with respect to the carrying on thereof.' And again, p. 150, — `The tax is not payable unless there be a carrying on or doing of business in the designated capacity, and this is made the occasion for the tax, measured by the standard prescribed.'" (See, also, UnitedStates v. Whitridge, 231 U.S. 144; Lewellyn v. Pittsburgh,B. L.E.R. Co., 222 Fed. Rep. 177; Anderson v. Morris Essex R. Co., 216 Fed. Rep. 83; New York Central H.R.R.R.Co. v. Gill, 219 Fed. Rep. 184.) The conclusions of the cited cases in respect to the proposition under discussion are not in conflict with those in People ex rel. Waclark Realty Co. v.Williams (198 N.Y. 54) or People ex rel. Coney Island JockeyClub v. Sohmer (155 App. Div. 842; affd., 210 N.Y. 549). In the Waclark case the tax under review was imposed by virtue of section 182 as it was prior to 1906, whereunder "it was sufficient if the capital stock of the domestic corporation
was employed at all." In the Jockey Club case it was held that the club was doing business in this state during the year involved. Although a purpose of the incorporation of the appellant was to acquire the property and franchises of the predecessor company and lease them as it did, the execution of that purpose in 1895 did not constitute doing business in the year ending October 31, 1913. (United States v. Emery, B.,T.R. Co., 237 U.S. 28; Zonne v. Minneapolis Syndicate,220 U.S. 187.) The appellant had the right and power, under its certificate of incorporation and the statutes, to operate the property and franchises it had acquired. It had the power also to lease them regardless of the statement in the certificate that it contemplated doing so. It was and had the powers of a railroad corporation as truly as though it were formed under the General Railroad Law. It could decline to enter into the operation of the railroad and to carry on the business of a railroad corporation. Assuredly its declination or failure to do the business was not "doing business in this state."
The order of the Appellate Division should be reversed, with costs in all courts, and the determination of the comptroller annulled.