(dissenting). The relator being a foreign corporation, doing business in this state, in its report to the comptroller for the year ending on the 1st of November, 1890, for the purpose of taxation, it stated the amount of capital stock.employed in the state of New York was $372,397.10, on which it was liable, under the Laws of 1880 and 1881, to a tax of $1,163.74. The comptroller, in addition to the sum reported, found that within the six months next preceding the 1st of November, 1890, the relator had employed within this state $900,000 capital, the tax on which would amount to the sum of $1,406.25, making the aggregate tax imposed by him $2,565.99. It seems conceded that this latter sum of $900,000 consisted of an investment by the relator, in April of that year, of about that amount in real estate in the city of New York, which it then held under leases for the purpose of its business. Notice of this assessment was given to the relator by the comptroller, whereupon the relator applied for a rehearing, which was granted; and on such rehearing the comptroller determined to readjust the tax, and affirmed the same, whereupon the relator sued out this writ of certiorari.
The principal question raised by the certiorari is whether the investment of this $900,000 of the surplus earnings of the relator is taxable under section 11 of chapter 542 of the Laws of 1880, as added by chapter 151 of Laws of 1882, and amended by chapter 501 of Laws of 1885. That section reads as follows:
“The amount of capital stock which shall be the basis for tax under the provisions of section 3 of this act, in the ease of every corporation, joint stock company and association liable to taxation thereunder, shall be the amount of capital stock employed within this state. In making to the comptroller, the report in writing or certificate of estimate and appraisal of the capital stock of such corporation, joint stock company or association provided for by the first section of this act, it shall be the duty of the president or treasurer thereof, as the case may be, to state specifically the amount of capital stock employed within this state, of such corporation, joint stock company or association. Whenever the comptroller is dissatisfied with such report or certifi*97cate of estimate and appraisal, as the case may he, of any corporation, joint stock company or association whose capital is only partially employed within this state, he is authorized and empowered to ascertain, fix and determine the amount of capital employed within this state, and to settle an account for the taxes and penalties due the state thereon.”
Does this section authorize the comptroller to impose this tax on the surplus capital of a foreign corporation, doing business within this state, when the same is invested in real estate which is not used by the corporation in its business, but solely as a place of investment of its surplus earnings ? The power of the comptroller to impose a tax upon a foreign corporation doing business in the state is not questioned to the extent that its capital stock is employed in this state; but the learned counsel for the relator insists that there is a distinction between the term “capital stock” and capital represented by the surplus earnings of a corporation, and that, as the surplus earnings of the relator were used in the purchase of this real estate, the corporation, by the use of the same in the purchase of property in this state, did not employ its capital stock within this state. A distinction is thus sought to be drawn between the capital stock of a corporation, measured by the number of shares of the same at its par or nominal value, and the additions or accretions to the par value of such shares measured by its surplus earnings, and that, therefore, the use or investment of its surplus earnings in this state in the purchase of real estate is not the use of any part of its capital stock in this state. It can hardly be denied that, until dividends of the surplus earnings of a corporation are declared and paid to the shareholders, such surplus belongs to the corporation, and constitutes a part of its capital, and that its aggregate capital is represented by the shareholders of its capital stock. It would seem to follow, therefore, that the capital of a corporation is the amount of its aggregated assets, whether it consists of the paid-up capital of each individual share of stock, or the paid-up shares and the undivided accumulations of profits on the business. If this reasoning be sound, then the source from which the money is derived which was used by the corporation in this state for the purchase of this real estate is immaterial, as it would be the employment of the capital stock in ihis state, whether the funds received for the par value of the original stock or from the net profits of its business. In either event, it would be the lawful employment of the company’s capital stock in this state, and hence the subject of assessment and taxation.
The case of People v. Wemple, decided by this court, and reported in 14 N. Y. Supp. 859, which was affirmed in the court of appeals in 129 N. Y. 558, 29 N. E. 812, seems to be analogous in principle to the one under consideration. It is true that the relator in that case was a domestic corporation; but it became important in the decision of that case to consider what constituted the employment of capital in this state, and it was held that the balance of funds kept on deposit in bank in this state, the amount of rent paid for premises occupied by the relator in this state, and the salaries paid to the officers of the corporation therein, could properly be regarded by the comptroller as capital employed in this state, for the purpose of *98fixing the amount of tax to be imposed on the corporation. The words “capital” and “capital stock” seem, in section 11 of the act of 1885, to be used interchangeably. In that portion of the section imposing upon the president or other fiscal officer the duty of the corporation to malte a report the words “capital stock” are used; and in the part of the section requiring the comptroller to make the assessment the word “capital” is used. For the purpose of this act, therefore, we think the words “capital stock” and “capital” were treated by the legislature as equivalent or synonymous, and employed in the same sense, and mean all the property of the corporation which it may properly use or invest in any business or pursuit in which it may lawfully use its capital or assets. We are also of the opinion that the purchase by the relator of these pieces of real estate, on which, at the expiration of the existing leases thereon, it intended to erect new buildings, to be used in part as offices for the company and “for the office requirements of the company,” as appears in folio 32 of the case, was such an employment of the capital of the relator in this state as to bring it within the jurisdiction of the assessing and taxing power of the comptroller. It is true that the court of appeals in the case of People v. Wernple, 131 N. Y. 68, 29 N. E. 1002, say: “The basis of the tax is the amount or portion of its capital in use here in the transaction of its ordinary business.” In that case, however, it was held that a corporation of another state, which engaged in a manufacturing business, maintained a sales agency in this state, with a warehouse for its manufacturing, sold a portion thereof in the state, and kept large sums of money on deposit in the state, was doing business within the state, within the meaning of this taxing act. The court also in that case says: “How much that [tax] 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.”
The court also in this case holds that when a corporation of another state employs any portion of its capital here, and thus has the benefit and protection afforded by the laws of this state, to the extent of the capital employed, there is no reason why it should not be burdened by state tax to the same extent as a domestic corporation. In the case of People v. American Bell Tel. Co., 117 N. Y. 241, 22 N. E. 1057, cited by the relator, the court held that it was not employing any of its capital in carrying on business in this state. It was a Massachusetts corporation, created under the laws of that state, with its office in Boston, where it made all of its contracts with independent corporations in this state, such corporations paying all the rental or royalty growing out of the contractual relation to the defendant in Boston, so that none of its capital was used or employed in this state; and Buger, J., says: “The Bell Telephone Company has no office or office agent or employe in the state of New York, unless the local corporations can be so denominated.” He then proceeds to show that the local corporations bear no such relation. We do not think that case is an authority against the validity of the tax imposed in the case at bar. Nor do we think that the *99contention of the relator that the imposition of this tax upon, the capital of the relator employed in the purchase of this real estate will subject the property of the relator to double taxation can be considered, and taken as a ground for reversing the determination of the comptroller in this case. The power of the legislature to impose terms upon which foreign corporations may do business in this state is not disputed, and, under the authorities in this state and in the federal courts, cannot well be questioned, so long as they do not violate the federal constitution or law regulating interstate commerce. The court cannot, therefore, relieve the relator from this tax, on the equitable ground that it is a double taxation, so long^ as the use of its capital in this state makes it the subject of taxation by the comptroller, under the provisions of section 11 of chapter 501 of Laws of 1885. We are therefore of the opinion that the assessment made by the comptroller was correct, and should be confirmed. Assessment of comptroller confirmed, and writ of certiorari quashed, with $50 costs and disbursements to the respondent.