The relator was organized under the laws of this State in 1883 as amiining corporation, with a capital stock of $3,000,000, all of which was issued in payment for certain mines and mining properties in the Territory of Arizona. Since then it has carried on its mining operations there, and out of its so-called profits has yearly paid *90dividends, and also invested $300,000 in the bonds of the United Verde and Pacific Railway Company, a corporation organized in Arizona, in the interest of the relator, to construct a railroad from the relator’s mines to another railroad about twenty-five miles-distant. This railroad has been constructed. Its main business is to take away the product of the relator and bring to it its supplies. The relator furnished the money to build, and equip the railroad, and the bonds in question represent most of the money thus-furnished. These bonds were in the possession of the relator in Rew York when the Comptroller imposed the tax in question. All of the relator’s business is done without this State, except some of its financial business and such as pertains to its official residence in the city of Rew York. In that city it has an office, some furniture and a bank account, employing capital for these purposes-to the amount of $180,000, as fixed and taxed by the Comptroller,, of which the relator does not complain.
The question' upon which our decision depends is whether the $300,000 of bonds above mentioned were part of the capital stock of the company or its surplus earnings. If capital stock, the tax was: properly imposed. (People ex rel. Edison El. L. Co. v. Campbell, 138 N. Y. 543; People v. Campbell, 88 Hun, 544.) If surplus, the tax was erroneous. (People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46.)
The relator did not use these bonds in its business otherwise than as securities, or as evidence of the indebtedness of the. obligor to it. It did not borrow money upon them to use in its business.
The Comptroller held that these bonds were capital stock and not surplus upon the assumption that as the relator took mineral from its-mines it decreased their value, and thus impaired its capital stock.
Ro sales of the relator’s capital stock have been made. Its-treasurers-statement is 4n evidence as follows : As to-the value of' the mine and works I could of course only furnish you an opinion,, as the value of a mine is extremely problematical, and if the mine was exhausted the works would be useless.”
The fact that the, capital stock was- paid for in mines and mining-property 'probably eliminated the danger of an underestimate of the value" of the stock in the first instance,, and suggests that the earnings'would be- needed to hold "the stock at par.
*91The operation of a mine for a dozen years may decrease its value by exhaustion or increase it by development. How it is in this case we do not know. The relator ought to show that the Comptroller was wrong in his valuation. (People ex rel. American, Contracting & Dredging Co. v. Wemple, 129 N. Y. 562; People ex rel. Western Electric Co. v. Campbell, 145 id. 587.) We do not think it has shown this, ■
Determination of the Comptroller confirmed, with costs.
All concurred.
Determination of the Comptroller confirmed, with costs.