The statute commands in substance that every corporation, whether resident or non-resident, with certain exceptions which do not include the relator, shall pay to the comptroller each year a sum to be computed upon a certain basis for the privilege of exercising its corporate franchises or carrying on business in this state. (Tax Law, §§ 181, 182.) While the corporate powers of the relator according to its charter are very broad, even if we do not look at its unexercised powers but confine our attention to those actually used, there is ample warrant for the tax in question. The business carried on by it is the purchase, holding, leasing and management of a large office building in the borough of New York, for which it paid the sum of $880,000. The claim is made that the large amount thus paid for a building thus used is not capital employed within this state, but is an inactive investment and that the relator is not carrying on any business in this state. It does business in no other state and it has no surplus. While a foreign corporation may invest its surplus earnings in real property situate in this state and lease the same to third parties, so long as it does not occupy it or use it in transacting its ordinary business, the amount thus invested is apparently not subject to taxation as capital *Page 336 employed in doing business. (People ex rel. Singer Manfg. Co. v. Wemple, 150 N.Y. 46.) When, however, it has no surplus and all its capital is placed in a single venture which requires active management and constitutes its sole business, such capital is employed in business within the fair meaning of the statute now in force, which is more comprehensive than any of its predecessors.
Two cases are relied upon by the relator, both extreme and neither like the one before us. In the earlier, certain land of the corporation was an unproductive swamp, not used to carry on any active business, but for sixty-four years had been held with the intention at some time of using it to carry on the business of building, selling or leasing raceways, docks and buildings for hydraulic purposes as well as the business of manufacturing. It had never been used for any of these purposes, nor for any active purpose. We held, adopting the opinion of the Appellate Division, that "the tax contemplated by the statute is upon the active use of its (the corporation's) capital in its corporate business, not upon the passive holding of it in the form of an unproductive investment." (People ex rel. Niagara River Hydraulic Co. v.Roberts, 30 App. Div. 180; 157 N.Y. 676.)
In the later case certain real property of some heirs at law, who held it as tenants in common, was unproductive, heavily mortgaged and overwhelmed with an accumulation of taxes during a long period. It was advertised for sale on account of the unpaid taxes, and one of the mortgagees threatened foreclosure. The heirs organized a corporation to carry the property until it could be sold, by refunding the mortgages and raising money to pay taxes and interest. No improvements were made, or active business carried on, and by the vote of a majority it was held a passive investment and not the employment of capital in business. (People ex rel. Fort George Realty Co. v. Miller, 179 N.Y. 49. )
The present case is utterly different in its facts and in the principle which governs the decision. The relator carries on the business of owning, leasing and managing an office building *Page 337 of great value situate on Wall street in the city of New York. It has no surplus and its entire capital is invested in this building at the commercial center of the country. Its property is highly improved and produces a net income devoted to dividends. It manages its property through agents, as all corporations must. The management of a large modern office building, such as that of the relator, is a business as much as manufacturing. It involves the leasing of offices, the collection of rents, the operation of elevators and a heating plant, the cleaning of offices, the lighting of halls, the making of repairs and changes to suit tenants and the active supervision of an extensive business with many details. If this is not carrying on business by the active use of capital invested therein it is difficult to see what is. The statute does not exempt a corporation organized to carry on such a real estate business, and I cannot see how the court can declare it exempt without subverting the statute.