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a penalty was imposed through withholding the right to sue unless the license fee was paid within the statutory period. It was, therefore, held that it was not absolutely necessary to allege compliance with the section of the Tax Law before 'commencing an action. This is in accordance with the general rule that performance of a condition subsequent which continues in force a right already acquired, need not be pleaded, while performance of a condition precedent by which the right itself is acquired in the first instance must be pleaded. On the other hand, section 15 of the Corporation Law which led to the result in the Welsbach case, is a condition precedent to the right of a foreign stock corporation to do business. It was, therefore, held in Wood & Sellick v. Ball, that compliance with section 15 of the General Corporation Law should be alleged and proved by a foreign corporation in order to establish a cause of action in the courts of this state.

Whatever the rule may be as to section 15 of the General Corporation Law, it would seem to be well settled by the case of Parmele v. Haas, and of Wood v. Ball, supra, that it is unnecessary affirmatively to plead compliance with section 181 of the Tax Law; that the matter covered by this section is no part of an affirmative case and that the corporation will be presumed to have complied with the section unless the contrary is shown. The Welsbach case, supra, does not seem to affect the decision in Parmele v. Haas, since the complaint in the former case showed upon its face that the plaintiff company was engaged in business within the state. Consequently, the presumption that it has complied with the law did not arise.

In Emmerich v. Sloane, 108 App. Div. 330 (1905), the court distinguished section 15 of the General Corporation Law from section 181 of the Tax Law, saying that the requirements of the latter law were not to be strictly construed, since they were mere revenue regulations for the benefit of the state, which the latter had the right to waive; that if the tax under section 181 were paid before the commencement of the action, the certificate might be obtained thereafter.

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Correspondence school corporation engaged in interstate business.-A foreign corporation engaged in the business of a correspondence school, soliciting business within the state through agents, but having no office here, the contracts being closed at the home office outside of the state, and the instruction being given from that office by mail, through text book and letter, is engaged in interstate commerce and may bring an action without paying the license tax under Section 181. People er rel. International Text Book Co. v. Tone, 220 N. Y. 313 (1917); reversing 162 App. Div. 930.

Foreign corporation, shipping goods into the state, not doing business, and may commence action.—A foreign corporation shipping goods into the state on orders addressed to the home office, is not doing business within the state, and therefore not subject to the above limitations as to commencement of action. Harvard Co. v. Wicht, 99 App. Div. 507 (1905); Novelty Manufacturing Co. v. Connell, 88 Hun, 254 (1895). Nor does this tax apply to a foreign corporation, which sold no goods here but received from its agents abroad reports of orders, which these agents transmitted for execution to another corporation outside of the state. People ex rel. Dutilh-Smith Co. v. Miller, 90 App. Div. 545 (1904).

Not applicable to foreign corporations in business less than thirteen months.-A foreign corporation not having employed its capital in the state for a period of thirteen months may sue out a writ of attachment without first obtaining the receipt required by section 181, Tax Law. Reedy Elevator Co. v. American Grocery Co., 82 N. Y. St. Rep. 619. The provisions of the Tax Law of 1896, that the tax must be paid within thirty days after December 1, 1901, by a foreign corporation engaged in business for more than thirteen months previous to that date does not bar the corporation from maintaining an action, if the tax has been paid prior to the commencement of the action. Dunbarton Flax Spinning Co. v. G. & J. R. Co., 87 App. Div. 21 (1903). The amendment of 1910 makes this point clear, because the action may

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be commenced after thirteen months from the time the corporation has begun business in the state, provided the tax has been paid.

Corporation not within jurisdiction until license fee paid. -While corporations are not "citizens,” they have been deemed “persons” within the meaning of the 14th amendment, by which no state shall "deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the law;" but a foreign corporation that has not paid its state license fee, was held to be not within the “jurisdiction," although a "person,” until it complied with the prerequisite. Phila. Fire Ins. Co. v. N. Y., 119 U. S. 110 (1886). Nor is there any doubt about the right of the state to impose a tax on a foreign corporation for the privilege of doing business in the state. Ducat v. Chicago, 10 Wall. 410, except that the power of the state to exclude a foreign corporation should be subject to the limitation that freedom of interstate commerce is not to be impaired. International Text Book Co. v. Tone, supra, citing Western Union Tel Co. v. Kansas, 216 U. S. 27.

Measure of the amount of capital stock employed in the state.—This subject applies to the annual tax as well as to the license tax and is, therefore, treated under that head in the next chapter.

CHAPTER V.

ANNUAL FRANCHISE TAX ON CAPITAL STOCK.

Besides paying a tax upon its organization, or when it begins to do business in the state, an annual franchise tax "for the privilege of doing business or exercising its corporate franchise in this state” must be paid every year, under section 182 Tax Law, by each of the following classes of corporations doing business in the state:

Corporations subject to capital stock tax under section 182.

1. Corporations only engaged in the purchase, sale and holding of real estate for themselves.

2. Holding corporations whose principal income is derived from holding the stocks and bonds of other corporations.

3. Steam surface railroad corporations;
4. Canal corporations ;
5. Steamboat corporations;
6. Ferry corporations;
7. Express corporations;
8. Navigation corporations;
9. Pipe line corporations ;
10. Transfer and baggage corporations ;
11. Telephone and telegraph corporations ;
12. Palace car and sleeping car corporations.

Corporations exempt from capital stock tax under section 182.-The following corporations are excepted from the provisions of the annual franchise tax, payable under section 182:

1. Manufacturing, mercantile, laundering, mining and miscellaneous corporations now classed as "business corporations" and paying a franchise tax on the amount of net income returned to the United States Treasury Department under section 209, Article 9-a of the Tax Law.

2. Banks, savings banks, and institutions for savings.
3. Title guaranty companies;
4. Insurance companies;
5. Surety companies;
6. Trust companies.

7. Elevated and surface railroads, liable under section 185, Tax Law.

8. Water, lighting and power companies liable under section 186, Tax Law.

9. Agricultural and horticultural associations and corporations. The present provisions of the statute read as follows:

Certain corporations exempt from tax on capital stock.–Banks, savings banks, institutions for savings, title guaranty, insurance or surety corporations, every trust company incorporated, organized or formed, under, by or pursuant to a law of this state, and any company "authorized to do a trust company business, solely or in connection with any other business, under a general or special law of this state, laundering corporations, manufacturing corporations to the extent only of the capital actually employed in this state in manufacturing, and in the sale of the product of such manufacturing, mining corporations wholly engaged in mining ores within this state, agricultural and horticultural societies or associations, and corporations, joint stock companies or associations owning or operating elevated railroads or surface railroads not operated by steam, or formed for supplying water or gas for electric or steam heating, lighting or power purposes, and liable to a tax under sections one hundred and eighty-five and one hundred and eighty-six of this chapter, shall be exempt from the pay. ment of the taxes prescribed by section one hundred and eighty-two of this chapter. But such a laundering, manufacturing or mining corporation shall not be exempted from the payment of such tax, unless at least forty per centum of the capital stock of such corporation is invested in property in this state, and used by it in its laundering, manufacturing or mining business in this state. (Former seo. 183, Tax Law, as amended by ch. 785, L. 1897, ch. 558, L. 1901, and ch. 474, L. 1906.)

Source: Ch. 542, L. 1880, as amended by ch. 361, L. 1881.

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