People ex rel. Southern Cotton-Oil Co. v. Wemple

• Decision Date: 02 February 1892
• Citation: 29 N.E. 1002,131 N.Y. 64
• Parties: PEOPLE ex rel. SOUTHERN COTTON-OIL CO. v. WEMPLE, Comptroller.
• Court: New York Court of Appeals Court of Appeals

131 N.Y. 64

29 N.E. 1002

PEOPLE ex rel. SOUTHERN COTTON-OIL CO.

v.WEMPLE, Comptroller.

Court of Appeals of New York.

Feb. 2, 1892.

Appeal from supreme court, general term, third department.

Petition for certiorari, upon the relation of the Southern Cotton-Oil Company, to review the action of Edward Wemple, as comptroller of the state of New York, in imposing upon the relator a tax, under the corporation tax laws of the state. The general term affirmed the decision of the comptroller. Relator appeals. Affirmed.

MacFarland & Parkin. (Wm. W. MacFarland, of counsel,) for appellant.

Chas. F. Tabor, Atty. Gen., for respondent.

O'BRIEN, J.

The relator is a corporation organized under the laws of New Jersey, having an authorized capital of $5,000,000, $4,000,000 of which have been issued. On September 2, 1890, the comptroller of this state, in pursuance of chapter 361 of the Laws of 1881, fixed and determined the amount of taxes due from the relator to the state for the three years ending November 1, 1889, at $2,303.42: and, in arriving at this result, he found that the amount of its capital stock employed by the relator within this state was $100,000 for the year 1887, $1,333,333 for the year 1888, and $121,212 for the year 1889. No question appears to be made by the relator in regard to the correctness of the comptroller's action in estimating and fixing the amount of its capital in use in this state, or in determining the amount of the tax thereon, if it is liable for any tax at all. The relator's sole contention on this branch of the case is that it is not doing business within the state, and hence is not within the statute. If the relator is within the statute, and the comptroller had jurisdiction to inquire and determine whether the relator was employing any part of its capital in business within this state, and, if so, the amount, we do not understand that the relator complains of the disposition made of the facts bearing on the questions of value. In regard to the facts bearing on the question whether the relator is doing business within this state, the return to the writ of certiorari brough to review the action of the comptroller states that it ‘consisted in part of maintaining a sales agency in the city of New York, and in selling the product of its mills in this state, and in refining crude oil within this state, and delivering the same to purchasers therein, and maintaining a depot or warehouse in the state of New York for the storage of its products therein, and in keeping on deposit in the banks in the city of New York large sums of money for the use of the relator, and for the carrying on of its business; that during the year 1887 nearly forty per cent. of the total sales of products by the relator were sales made in the state of New York, and during the year 1888 over thirty-three and one-third per cent. of the total sales of relator's products were made in the state of New York, and during the year 1889 over three per cent. of its total sales were made in the state of New York.’ It further appears that the relator's business is the manufacture and production of oil from cotton seed, and refining and selling the same. Its principal office is at Camden, N. J., but it has an office or agency in the city of New York. During the year 1888 it kept in banks of this state, for use in the transaction of its business, $15,124; and during the year 1889, $88,773.74. During the three years for which the tax was assessed it sold in this state about one-third of its whole product.

There can be no doubt that a corporation created by the laws of another state, but doing business in this state, is subject to the jurisdiction of the officer whose duty it is, under the act of 1881, to determine and assess the amount of taxes which corporations are bound to pay to the state, and is subject to taxation as well as a domestic corporation. The basis of the tax is the amount or portion of its capital in use here in the transaction of its ordinary business. How much that may be in any particular case is generally a question of fact, to be determined by the comptroller under the procedure pointed out by the statute. There is no injustice or hardship in such a law. If a foreign corporation, or a corporation created by the laws of a sister state, employs the whole or a portion of its capital here, and thus has the benefit and protection of the government and laws of the state to the extent of the capital so employed, there is no reason why it should not be subjected, to the extent of the capital so employed, to the same burdens and obligations as a domestic corporation. The tax is not imposed upon its property, but for the privilege which is extended to it by the state of doing business here as a corporation, and in its corporate name. Since the statute has been amended so as to make the amount of capital used in this state the basis of the tax, the amount of business transacted here is of much less importance than formerly. If but a very small part of the corporate business is done here, and but a small part of the capital employed here, then the tax is correspondingly light.

The facts in this case show that during the years for which the assessment was made the relator employed a portion of its capital and...