stock employed within the state," the method of computing the tax, as in the case of a domestic corporation, has been materially changed by the amendment of 1906. (Ch. 474.) Formerly it was the amount of capital employed within the state, regardless of the share stock. People ex rel. Consolidated Ginseng Co. v. Kelsey, 182 N. Y. 526; affirming 105 App. Div. 175 (1905); People ex rel. National Enameling Co. v. Miller, 112 App. Div. 880 (1906). Now, it approximates very closely to the organization tax paid by the domestic corporation upon its incorporation, except that the tax is computed on the issued share stock and not on the authorized stock, as in the organization tax paid by domestic corporations. The use of the words "issued capital stock" in the amendment of 1906 clearly shows that the par value of the issued stock was to be the basis of taxation rather than the appraised value. People ex rel. ElliottFisher Co. v. Sohmer, 148 App. Div. 514 (1911).

Foreign corporations not citizens.-Foreign corporations are not citizens within the meaning of the fourteenth amendment to the United States Constitution, guaranteeing equal privileges to citizens of other states. Nor are they citizens within the meaning of section 2, article 4, of the United States Constitution, entitling citizens of each state to all privileges and immunities of citizens of the several states, and the right of a state to exclude foreign corporations is well settled. A state may impose on a foreign corporation a tax for the privilege of doing business in the state measured by the amount of capital employed in such business within this state. People ex rel. Parke, Davis & Co. v. Roberts, 91 Hun, 158 (1895); aff'd 149 N. Y. 608, 171 U. S. 658.

The United States Supreme Court has held that a license tax imposed on a drummer or sales agent was unconstitutional. Carson v. Maryland, 120 U. S. 502 (1887); Robbins v. Shelby County Taxing District. Id. 489, but there is a distinction be

tween a license tax on a sales agent or drummer sent here to make sales and a tax on a corporation bringing property into the state and carrying on business here. People ex rel. Southern Cotton Oil Co. v. Wemple, 61 Hun, 83 (1891); aff'd 131 N. Y. 64.

When foreign corporations carry on business or employ capital in the state.-In order that corporations shall be liable to pay the license tax under section 181 of the Tax Law they must (1) carry on business in the state, and (2) employ capital in such business. These are also conditions precedent before foreign corporations are liable to taxation for the annual franchise tax under section 182 of the Tax Law, and as they are more conveniently discussed under that heading, the subject is treated at length in Chapter V infra.

Foreign corporations to file certificate before doing business. -Section 15 of the General Corporation Law requires every foreign corporation, with some exceptions, to file a certificate with the secretary of state, giving certain information as to business, capital and officers, before it can do business in the state. Failing to do this it subjects itself to certain disabilities, such as being unable to maintain an action in the courts of the state upon any contract made by it in the state.

If it files such certificate, however, it may be considered as prima facie evidence that it is doing business in the state, as has been held in the case of corporations assessed for local purposes. People ex rel. Armstrong Cork Co. v. Comm'rs, 157 N. Y. 159 (1898). The failure to file the certificate does not, on the other hand, imply that the corporation is not engaged in business in the state.

Failure to pay license tax bar to action.-The last paragraph of section 181 requires every foreign corporation to pay the license fee or tax within thirteen months after beginning to do

business in the state before it can commence an action in the state. The provisions of this section should not be confused with section 15 of the General Corporation Law (above referred to) requiring every foreign corporation doing business in the state to file a certificate with the secretary of state before it can maintain an action upon any contract made by it in the state. A corporation may undoubtedly be engaged in business in the state without having capital employed in such business, and while the doing of business in the state would subject it to the provisions of section 15 of the General Corporation Law, it need not pay the license fee under section 181 of the Tax Law required of a corporation engaged in business and employing its capital in the state. A number of the decisions hold that a complaint by a foreign corporation, which alleges that it is doing business in the state must also affirmatively show that it has filed a certificate under section 15 of the Corporation Law. Welsbach v. Norwich Gas. Co., 96 App. Div. 52, affirmed without opinion, 180 N. Y. 533; Wilson McNeill Co. v. Standard Oil Co., 110 App. Div. 888; Wood & Sellick Co. v. Ball, 114 App. Div. 744 (1906); aff'd 190 N. Y. 219. The general requirements of section 15 of the General Corporation Law have been confounded with the provisions of section 181 of the Tax Law. This would seem to be so from the case of Reedy Elevator Co. v. American Grocery Co., 24 Misc. 678 (Appellate Term), holding that compliance with section 181 is a jurisdictional fact and must be set forth in an application for attachment. In Kinney v. Reid Ice Cream Co., 57 App. Div. 208, it was held that if it be shown in the pleadings that the foreign corporation has been engaged in business for more than a year, having capital employed in such business, and has not paid the license tax under section 181 of the Tax Law, a demurrer to the pleadings will lie, and that the assignee of the foreign corporation, defaulting in this respect, is in no better position than the corporation itself. The court said in this case: "We see

no reason why the rule applied in the cases cited in reference to section 15 of the General Corporation Law should not apply to section 181 of Chapter 908 of the Laws of 1896." This case was followed by Halsey v. Jewett Dramatic Co., 114 App. Div. 420 (1906). The dissenting opinion in the last named case, by Judge Houghton, is valuable, in that it points out the distinction in the objects of section 15 of the General Corporation Law and section 181 of the Tax Law. While it would be necessary to affirmatively allege the filing of the certificate under the former section, it is not necessary to allege the payment of the tax under section 181 of the Tax Law, as a part of the pleading.

In the case of Wood & Sellick v. Ball, which was affirmed in 190 N. Y. 217-218, the court points out the distinction between the Welsbach case and Parmele v. Haas, 171 N. Y. 579. In the Parmele case the payment of the license fee was a condition subsequent. The corporation was permitted to carry on business in the state and after carrying on business for a certain length of time, must then pay the license tax. There was no express prohibition against doing business without paying the license tax, but 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 to affirmatively 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.

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).