I concur in the result because a seat in the New York Stock Exchange is not personal property under the somewhat restricted definition of the Tax Law (L. 1896, ch. 908, § 2). If owned by a resident it would not be taxable according to that definition, and when owned by a non-resident, it is taxable only "as personal property * * * to the same extent" as if owned by a resident. (Id. § 7.)
I do not concur, however, in the conclusion that "the value of a seat in the New York Stock Exchange is not capital invested in business in this state." Money is capital, and when money is invested in facilities or appliances to do business with, it is capital invested in the business to which the facilities or appliances are essential in order to carry it on successfully. Thus, the money expended for the library of a lawyer, the implements of a surgeon, the patent rights of a manufacturer, or the copyrights of a publisher, is capital invested in business, because the business cannot be carried on without it. Whenever one has to buy some right in order to carry on a certain business, the sum so expended is capital invested in that business. Money is invested in business when it is invested in the means of carrying on business. Membership in the New York Stock Exchange is essential to the business of a broker, such as the relator carried on, and the money that it cost is capital invested in the business. The test is, could the business be as successfully carried on without it? The exchange is a great market for the sale of property of a certain kind, such as the relator dealt in, and right of access to the market is necessary in order to deal with any success in *Page 12 that kind of property. Without that right the business of a broker would be so restricted as to be unworthy of the name. The relator, therefore, could not have carried on his business with substantial profit, or as he has carried it on, without investing enough capital to procure the rights and facilities afforded by membership in the Stock Exchange. His business would necessarily have been limited and insignificant unless he had made that investment, which, when made, as we have held, was property. (Platt v. Jones, 96 N.Y. 24.) Capital is invested when property is purchased with it, and capital is invested in business when it is expended in the purchase of property that is essential in order to carry on that business. While the relator bought and sold securities for others, he could have bought and sold for himself, and, if his sole business was buying and selling for third persons, he could not have carried it on without access to the market. The money used by him to buy his seat was neither thrown away nor given away, but was paid for property of great value, which was the main instrumentality for carrying on the business in which he engaged. It is difficult for me to see what was done with the money unless it was invested.
While the necessity of an election to membership may affect the value of a seat in the exchange, it has no bearing upon the question whether the money used to purchase a seat is capital invested in business. It may be that some men cannot effectively purchase the right to do business in the exchange, but that does not alter the fact that it requires the investment of capital to procure the right by all who succeed in getting it. While one must pay what a seat is worth, and also obtain consent of the governing committee before he can become a member, the sum paid is capital notwithstanding something else is required to effect the purchase. If consent were all, as is the case with social clubs, no capital would be required, but it is not all, for more than $50,000 must be paid for the right to do business in the exchange, even if consent is obtained. While the form of the investment is peculiar, it is property that must be had in order to carry on the business of a broker. *Page 13 It is not a mere personal privilege, for it has a market value and can be bought and sold, although transfers are hampered somewhat by reasonable conditions, designed to maintain the moral character and business standing of the members.
I think the value of the seat of the relator is capital invested in business, but that it is not taxable, because the taxing statute does not cover it.
GRAY and WERNER, JJ., concur with BARTLETT, J.; VANN, J., concurs in memorandum, with whom PARKER, Ch. J., MARTIN and CULLEN, JJ., concur.
Order affirmed, with costs.