amendatory thereof. The relator is a foreign corporation, organized under the laws of the Grand Duchy of Baden, in the Empire of Germany. It is engaged in the manufacture and sale of chemicals at Ludwigshafen, in the Kingdom of Bavaria; where its books and records are kept and where all the meetings of its directors have been held. In 1879 the relator became a special partner in the limited. partnership of William Pickhardt & Kuttroff, in the city of New York, and contributed to the capital of the partnership the sum of $150,000. The business carried on by Pickhardt and Kuttroff is the importation of chemicals and that firm is the sole agent in this country for the sale of the relator's products; which have amounted, on the average, to about $2,000,000 a year. The products are shipped either directly to Pickhardt and Kuttroff in the city of New York, or to any part of the United States, as may be directed. The firm of Pickhardt and Kuttroff pays the relator for products shipped, by remittances from New York. It does not appear that any of the stockholders of the relator have ever resided in this country, or that it ever had any corporate office or agency for carrying on its business here; unless it can be deemed to have maintained such an office through its connection with the firm of Pickhardt and Kuttroff.

The comptroller imposed a tax upon the relator's business, measured by the sum of $150,000 as the amount of capital stock employed within this state. It is the claim of the relator that it was not actually engaged in business within this state, within the meaning and purview of the acts, under which the comptroller claims the right to impose the tax.

Michael II. Cardozo for appellant. A foreign corporation cannot be held to be doing business in the state of New York, within the meaning of chapter 542 of the Laws of 1880, by virtue solely of the fact that, as a special and not as a general partner, it is interested in a limited partnership, transacting business in this state. (People ex rel. v. Wemple, 150 N. Y. 46; People ex rel. v. Campbell, 138 N. Y. 543; People ex rel.

v. Wemple, 138 N. Y. 1; People v. E. T. Co., 96 N. Y. 388; People v. H. Ins. Co., 92 N. Y. 328, 345; 134 U. S. 594; People v. H. S. M. Co., 105 N. Y. 76; 143 U. S. 305; People ex rel. v. Wemple, 129 N. Y. 558; S. C. O. Co. v. Wemple, 44 Fed. Rep. 24, 26; S., etc., C. Co. v. Attorney-General, 46 N. J. Eq. 270; Richardson v. Iughitt, 76 N. Y. 55; Eager v. Crawford, 76 N. Y. 79.) There is nothing in the Limited. Partnership Act which denies to a corporation the right to take advantage of the provisions of that statute. (People ex rel. v. Comrs. of Taxes, 23 N. Y. 242, 243; La Farge v. E. F. Ins. Co., 22 N. Y. 352; S. C. Co. v. S. P. R. R. Co., 118 U. S. 394; People v. Trinity Church, 22 N. Y. 44; Olcott v. T. R. R. Co., 20 N. Y. 210; People ex rel. v. McLean, 80 N. Y. 259; Thornton v. Bank, 3 Pet. 36; Holmes v. Wil lard, 125 N. Y. 75; U. S. V. Co. v. Schlegel, 143 N. Y. 537, 542; Demarest v. Flack, 128 N. Y. 205.)

Theodore E. Hancock for respondent. The alleged special or limited copartnership arrangement between the appellant and Pickhardt & Kuttroff never had any legal force or validity. The corporation has simply been doing business in this state through these private individuals as its agents. (People v. N. R. S. R. Co., 121 N. Y. 623; N. Y. & S. C. Co. v. F. Bank, 7 Wend. 412; Catskill Bank v. Gray, 14 Barb. 479; Morawetz on Corp. [2d ed.] § 421; Beach on Priv. Corp. § 843; Whittenton Mills v. Upton, 10 Gray, 582; Bank of Augusta v. Earle, 13 Pet. [U. S.] 519, 589; People v. Fire Assn. of P., 92 N. Y. 311; P. F. Assn. v. N. Y., 119 U. S. 110; People ex rel. v. Roberts, 91 Hun, 158; 149 N. Y. 608; People ex rel. v. Campbell, 144 N. Y. 166; B. G. L. Co. v. Claffy, 151 N. Y. 24.) Assuming that this corporation is a special partner, it must be held to be doing business in this state. (2 R. S. [9th ed.] 1843, §§ 1, 17; White v. Hackett, 20 N. Y. 178; C. N. Bank v. Strauss, 137 N. Y. 148; Van Voorhis v. Webster, 85 Hun, 591; Mills v. Argall, 6 Paige, 577; People ex rel. v. Wemple, 131 N. Y. 64.) No question was made that the settlement of the tax was exces

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[Vol. 152. sive in amount. The settled rule is that the determination of the comptroller must stand upon the question of valuation, unless it is clearly shown to have been erroneous. (People ex rel. v. Wemple, 138 N. Y. 587; People ex rel. v. Wemple, 129 N. Y. 558; People ex rel. v. Wemple, 131 N. Y. 64; People ex rel. v. Wemple, 133 N. Y. 328; People ex rel. v. Campbell, 145 N. Y. 587.)

GRAY, J. The decision of the question presented to us for our review is not without difficulty, and depends somewhat upon the intent of legislation, as explained by our decisions, and the policy which the state must be regarded as pursuing. Whether the relator is authorized by the law of its creation to become a special partner in a limited partnership, we are not informed by the record and it is not necessary that we should consider the question whether in so doing it has exceeded its corporate powers, or has violated the policy of our state with reference to the exercise of powers apparently beyond what are granted to, or should be implied in, a corporation. It is, also, clear that the relator cannot be charged with any attempt at an evasion of our laws; inasmuch as the formation of its limited partnership antedated the law of 1880.

The law, under which the comptroller of the state exercises the authority to tax corporations for the benefit of the state, had its origin in chapter 542 of the Laws of 1880 and has been added to, or modified, through amendatory acts since then. It imposes a tax upon every corporation organized pursuant to law in this state, "or in any other state or country, and doing business in this state." That tax is to be paid upon its franchise or business, and the basis for the tax is "the amount of capital stock employed within this state." The tax is not upon property; but, in the case of domestic corporations, it is imposed upon their corporate franchise; while, with respect to foreign corporations, it is upon the business that they do in this state. If the latter come into this state, for the purpose of doing some part of their corporate business here, they are placed under the obligation to bear some portion of the gen

N. Y. Rep.]

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Wem

eral burden of taxation and, to effectuate that purpose, the legis lature has declared that the business done shall bear the burden. of a tax, to the extent that it is ascertained that the capital is employed here. (People ex rel. American C. & D. Co. v. Wemple, 129 N. Y. 558; People ex rel. S. C. O. Co. v. ple, 131 N. Y. 64; People ex rel. P. R. R. Co. v. Wemple, 138 N. Y. 1; People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46.) The intention of the legislature is that, when foreign corporations employ their capital in carrying on a business within this state, they must pay a tax to the state in return for the privileges and benefits they enjoy. Indeed, no good reason can be urged why they should not, according to the business done, be subjected to the same burdens and obligations as are domestic corporations. The policy of the state is not to prevent the employment here of foreign capital, nor to place any unreasonable restrictions upon such employment. To the contrary, by a wise and enlightened policy, the greatest facilities are offered for the conduct of commercial enterprises of every nature and they are extended to all who choose to come within our borders, without any unreasonable discrimination between the resident and the foreigner. If it requires of the foreign corporation that it shall contribute to the revenues of the state a tax, measured by the amount of capital employed in doing business here, it is but the requirement in one form of what it exacts from the home corporation in another form. It is needless to discuss the question more elaborately, in view of the discussion it has received in this court, in many decisions.

The contention on the part of the appellant is, that a foreign corporation cannot be deemed to be doing business in this state by virtue, solely, of the fact that it is interested as a special partner in a limited partnership here, and that contention has received the support of two of the learned justices of the Appellate Division, who were unable to agree with their associates in affirming the action of the comptroller. The argument may fairly be summarized in this way: That, as the tax is upon the right to do business within the state, it must appear that the corporation is actually, as such, engaged in the

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[Vol. 152. transaction of its business here, and that the condition of the law is not met, when it is made to appear that there has been only an investment of capital within this state, in a business which other parties, alone, control and manage. While it is very true that a corporate business must be found to be transacted here, in order that a tax may be imposed; still I think we may look through the form and regard the substance of the transaction in question. If agencies are adopted, not independent, but of which, in fact, the foreign corporation is a member and through which its business is done, can we, and should we, say that in that way it has placed itself beyond the reach of the taxing officer? In a broad sense, all persons may be said to be doing business where their capital is placed and that they have stipulated for a contractual relation, whereby their powers of control and administration are restricted, may affect, but does not change, the fact. The idea in the formation of a limited partnership is the transaction of a business by the parties who enter it, under certain conditions; the performance of which will exempt the special partner from liability for the debts of the partnership beyond the fund contributed by him to the capital. It would be difficult to say that a special partner was not engaged in the transaction of business, as an inference from the statutory provisions which create the limited liability. In this case, the corporation has placed $150,000 with a firm in New York city, of which it assumed to become a member. The business of that firm was the importation of chemicals and all the sales of the relator's manufactured products within this state are made by, or through, this firm. It must be assumed that the relator's contribution of capital is an efficient cause in this profitable marketing of its products here; and while, as a special partner, it may be under limitations and restrictions with respect to partnership powers, yet, (and we are assuming for the purpose of the discussion that the relator may validly enter into the partnership), the relator is present here as a member of the partnership; or is deemed in the eye of the law to be here for certain purposes. In that guise, it is employing some portion of its capital and the ques