People ex rel. Fourteenth Street Realty Co. v. Kelsey

Chase, J.: . The relator is a. domestic .corporation organized May 25,1903., It has" a capital stock of $500,000 and the duration "of its existence is fifty years. ’The certificate of incorporation states: “ The purposes for which it is to be formed are to acquire by purchase, exchange, [798] lease or otherwise, to'- hold, improve, develop, Operate, sell, lease, mortgage or exchange real -estate, chattels real, mortgages and any. interest in real property, to erect,.alter, repair, manage and‘operate-any and all kinds of buildings, and to purchase, acquire, hol'd and dispose of the stocks,, bonds and other evidences of indebtedness of any corporation, domestic or foreign, and issue in exchange .therefor its stock; bonds, and other obligations.” . In 190.3 numerous owners of-subdivided interests in certain real property in New York city conveyed the same 'to a trustee. The trustee leased the property for a period of twenty-one years from January 1, 1904, at a rental of $70,000 per year, payable quarterly pn- advance. The relator purchased said real property of the trustee for $1,199,000, giving to him therefor a purchase-money mortgage of $700,000,'.and issued to him $499,000- of its capital stock. The balance of' $1,000 of its capital stock ivas sold for cash.. The tenant took the real property January 1, 1904, and by Ins lease he was required tp pay- the taxes thereon. It was necessary for the relator to make certain repairs, -additions and changes in the buildings on the property, which involved an expenditure of $73,000, for which-purpose it borrowed that amount.' It now lias an .annual income of $70,000, from which it is necessary for it to pay for insurance about $2,-200 and interest on the purchasé-money mortgage $31,500-per annum, leaving $36,300 net income -applicable to the payment of dividends or indebtedness or to employment in any business within! the purposes for which it is'incorporated. The business of the relator is in no way limited' or confined to the real property now owned by it, or to the. life of the present lease of said property. The purposes of its inco'rporation are very broad .and. the. net income from-the property now owned by it is more than.seven per cent on its capital stock. At the present time it. owns the very valuable property rented as. stated by the tenant used with other adjoining property, and the reason for -its taking title to such property is stated by its vice-president to have been that '9 Owing to Mr.. Sielcken’s (the tenant) absences in Europe, and also to- the 'possibilities of dower rights, judgments and so forth,, it was considered advisable by all parties to place the.title in the hands of a.corporation which would endure for tire whole period of the lease.”'. .. It may, however, do a general business in the purchase, sale and [799] exchange of real property, including the erection and management of buildings and the purchase and sale of mortgages, and also stocks and bonds of domestic and foreign corporations. ■ In People ex rel. Wall & Hanover Street Realty Co. v. Miller (181 N. Y. 328) the court say: “ And when we appeal to the reason, of the thing it seems plain that the chartered privileges of a corporation as defined in its certificate of incorporation which is invariably framed in the language of the corporators, should be the index to its relations to the State rather than the possibly sporadic and shifting • exercise of any one or more of a larger number of the powers delegated to it.” To relieve the relator from the payment of the franchise-tax would be to extend the doctrine of People ex rel. Fort George Realty Co. v. Miller (179 N. Y. 49) which it is said in the Wall c& Hanover Street Realty Co. case, should not be done. The determination of the Comptroller should he confirmed, with fifty dollars costs .and disbursements. All concurred. Determination of the Comptroller confirmed, with fifty dollars costs and disbursements.