The only question to be determined in this case is as to whether the relator is “ doing business ” within this State.
It is somewhat difficult to see how a foreign corporation can be engaged in “ doing business ” within this State without employing *312some part of its capital here, and, on the other hand, the fact that its capital is being employed in carrying on a business in this State is a very considerable element in determining whether the corporation which owns such capital is “ doing business ” in this State within the meaning of the law under which it is attempted to collect the tax here in question.
It is contended that by becoming a member of the copartnership the individuality of the partnership has been swallowed up in the new being or entity created, and that the capital invested is the capital of the copartnership, and the business conducted is not being conducted by the corporation but by the copartnership ■ exclusively. I cannot acquiesce in the contention that members of a copartnership are not engaged in business, and that they are not doing the business which is being carried on in the name of the fan, by them and for their benefit. It is true that their contributions to the firm become swallowed up in the firm capital, but it is their property just the same ; it belongs to them, and, instead of having a diminished interest, it is rather increased, if anything, by the rights that they have also obtained in the contributions of their copartners.
' The business of the copartnership is their business; it is being conducted by them, either personally, or by their agents, and for their benefit, and it is, I think, a commonly recognized fa.ct that a man who is a member of a copartnership is as much a business man, and is doing business as much, as though he were solely engaged in the same business for his sole benefit. His property invested is the subject of taxation; his interest is taxable separately. The partnership as such is not taxed.
It is said, however, that the fact that the relator is a special partner in a limited copartnership relieves him from taxation. It does not seem to me that that changes the rule a particle.
I do not think that a special partner in a limited copartnership is removed from the category of persons doing business.
While he is prohibited by our laws from active management, he is permitted to advise, and may buy, sell, purchase and transact other business for the copartnership, subject to approval by the general partners. (2 R. S. [9th ed.] 1848, § 17.)
He may bring an action for dissolution, and for an accounting. *313(C. N. Bank v. Strauss, 137 N. Y. 148; 2 R. S. [9th ed.] 1849, § 18.)
His contribution of capital to the firm cannot be regarded simply as an investment, as in the case of one purchasing stock in a corporation. In the case of a corporation there is a distinction made between the capital and the capital stock, and the shareholder, as such, is held not to be an owner of the capital, and a foreign corporation owning shares in a corporation in this State has been held to be not taxable for that reason. (People v. American Bell Telephone Co., 117 N. Y. 241.)
The court there said: “ In no legal sense can the business of a corporation be said to be that of its individual stockholders. It is true that they have an interest in the business earned on, and an influence in controlling its conduct; but they have created a legal entity to prosecute such business, make its contracts and be responsible for its obligations, and that entity is alone responsible to persons dealing with it for' the conduct of such business.”
Here, as we have seen, the identity of the special partner is not lost; he has an interest in the capital of the partnership property and business as such, and as between the partners themselves, he has the same rights that they have. (Van Voorhis v. Webster, 85 Hun, 591.)
It is only as to third persons that his rights or liabilities differ from those of the general partners.
His contribution to the copartnership is not simply a loan or investment; he is not in the position of a creditor, but of an owner; he is only a creditor in the sense that each partner is; that is, he has a right to the return of his capital after the debts are paid.
In Hayes v. Bement (3 Sandf. 394), under a statute similar to the present one, it was held that a special partner could not claim repayment of his contribution or of any part thereof until all the creditors of the firm had been paid, the court holding that the Legislature simply intended to put the special partner, so far as he is a creditor, upon precisely the same footing as if he were a general partner. This construction was approved of in White v. Hackett (20 N. Y. 178).
The Legislature many years ago recognized the fact that one who contributed to the capital stock of a limited copartnership and became *314a special partner was engaged in doing business in this State. Section 1, chapter 37 of the Laws of 1855 (3 R. S. [9th ed.] 2138) reads as follows: “ All persons and associations doing business in the State of Hew York as merchants, bankers or otherwise, either as principals or partners, whether special or. otherwise, and not residents of this State, shall be assessed and taxed on all sums invested in any manner in said business the same as if they were residents of this State.” This was a provision for a property tax, and is simply referred to for the purpose of showing that the Legislature considered that persons so investing their capital were “ doing business.”
The case of Commonwealth v. Standard Oil Company (101 Penn. St. 119) was cited to us as authority for the contention of the relator, that it was not taxable. In that case it was held that the capital of the Standard Oil Company invested in corporations and limited copartnerships was not taxable. The court classed corporations and limited copartnerships together, for the reason that, in respect to taxation, it could see no distinction between them. The Taxing Acts of Pennsylvania treat them as identical. (See pp. 133-148.) And the court in that case further held that the shares of stock in a corporation were different from the capital stock, and that such shares were taxable at the domicile of the owner. And in that case the domicile of the Standard Oil Company, not being in the State of Pennsylvania, such shares were not taxable there. The court also held that the company was taxable on such of its capital as was invested in individual or general copartnerships in the State of Pennsylvania, thus necessarily disposing of the contention that its capital and individuality had become lost in the new capital and entity created by the formation of the copartnership.
In this State corporations and limited copartnerships are not treated alike for taxing purposes. The law imposes no tax upon copartnerships, either general or special, as such.
A corporation can only do business through its agents and representatives, and it seems to me that the relator, in placing its capital stock in the limited copartnership which I have described, whose general partners at the time of the organization of the copartnership, and for some years thereafter, were shareholders in the relator, and which limited copartnership had the sole disposition of the products *315of the relator, thereby became engaged in doing business within this State through its agents, such limited copartnership, and the general partners thereof, who were carrying on business for it, with its capital and for its benefit. The relator plainly comes within the spirit of the Taxing Act, which the Comptroller is endeavoring to enforce. Its capital is located here, not as a loan or investment, but for the purpose of assisting in carrying on a business, in the profits of which, as such, the relator is to share.
Its capital has the benefit and protection of our laws, and in all respects is guarded and protected, and has all the facilities and advantages that can be obtained by a corporation located and doing business here with the same amount of capital.
The decision of the Comptroller should be affirmed, with fifty dollars costs and disbursements.
Putnam and Herwin, JJ., concurred; Parker, P. J., and Landon, J., dissented.