various sales. People ex rel. Amer. B'k Note Co. v. Sohmer, 157 App. Div. 1 (1913).

How intrinsic value is ascertained; debts to be deducted.Where the various provisions of section 182 require the intrinsic or actual value to be ascertained, it should be determined by deducting the liabilities from the assets. People ex rel. Lorena Co. v. Morgan, 55 App. Div. 265 (1900); People ex rel. J. B. Co. v. Roberts, 37 App. Div. 1 (1899). If the good will of the business has any value that is to be added to the net assets so ascertained. People ex rel. Wiebusch & Hilger Co. v. Roberts, 19 App. Div. 574; aff'd 154 N. Y. 101 (1897). Under the law, prior to 1906, the comptroller was not required to ascertain the intrinsic or actual value of the stock in cash unless such intrinsic value exceeded the market value. People ex rel. Brooklyn El. R. R. Co. v. Roberts, 90 Hun, 537 (1895). This was so even though the assessment made by the comptroller, based on such average price, was more than the par value of the stock and thus indirectly assessed on surplus, for the dividends over six per cent. may be accumulated in the form of surplus, which, if profits had been declared, would have increased the assessment. People ex rel. Colonial Trust Co. v. Morgan, 47 App. Div. 126 (1900). Under the present statute, if the dividends are six per cent. or more, the intrinsic value need not be ascertained, and no appraisement is necessary under section 193 (former sec. 190) of the Tax Law.

What debts not deducted.— A foreign corporation cannot deduct its general indebtedness arising from its business done throughout the country generally, but only the specific indebtedness arising out of the business done in this state. People ex rel. Nat'l Enameling Co. v. Miller, 112 App. Div. 880 (1906). In an earlier case (People ex rel. Hyde & Sons v. Miller, 90 App. Div. 599 [1904]; aff'd 179 N. Y. 564) it was held that only

that part of the total indebtedness should be deducted, which the assets within the state bore to the total assets of the company.

Actual value not "book value"; good will.- "Book value" does not govern the valuation to be made where intrinsic value is to be ascertained. Where a corporation's entire business is in New York and has been acquired from a firm of similar name doing business in New York, together with the good will of that firm, the value of the good will and name of the firm is part of the capital employed in the state. J. B. Co. v. Roberts, supra. The right to tax the good will was upheld in People ex rel. Johnson Co. v. Roberts, 159 N. Y. 70 (1899), and in the Wiebusch case, supra.

No unequal taxation because lesser dividends pay higher tax. Where the dividends are less than six per cent. and the price of the stock above par there is no unequal or unjust taxation, because the corporation is obliged to pay a larger tax than for paying a dividend of six per cent. or over. People v. President, &c., D. & H. Canal Co., 54 Hun, 598 (1889); see, also, People ex rel. N. Y. C. & H. R. R. Co. v. Knight, 173 N. Y. 255 (1903); People ex rel. Hyde & Sons v. Miller, 90 App. Div. 599 (1904); aff'd 179 N. Y. 564.

Stock dividends.-Whether the payment of a stock dividend shall be considered a distribution of profits or an adjustment of capital depends upon the circumstances in each case. If it is paid out of surplus profits, it will be considered a dividend and taxed accordingly. People ex rel. Pullman Co. v. Glynn, 130 App. Div. 332 (1909), affirmed, 198 N. Y. 605. If it is a distribution of the capital not representing profits, it will not be considered the basis for computing the tax. People ex rel. North American Trust Company v. Knight, 96 App. Div. 120. Where stock is surrendered equal in amount to the dividend

paid it will be considered a depletion of capital stock and not a payment of dividend. People ex rel. Port Morris Land & Improvement Co. v. Glynn, 205 N. Y. 578 (1912), modifying 148 App. Div. 908; but if a corporation having issued $300,000 of capital stock and having purchased with $200,000 thereof, the good-will, business and lease of another company and invested the remaining $100,000 in securities, afterwards realized $1,050,000 for its lease, and divides this amount among its shareholders representing the $300,000 of capital stock, which is then reduced to $100,000, under such circumstances, the sum of $850,000 will be considered as a stock dividend and not as a distribution of capital. People ex rel. Mercantile S. D. Co. v. Sohmer, 158 App. Div. 110 (1913).

Distribution of amount realized in condemnation proceedings not to be construed as dividends.-Where a corporation distributes the greater part of an award it has received in condemnation proceedings, among its stockholders, and thereafter does no business, the comptroller in assessing the franchise tax should not consider such award so distributed as dividend. People ex rel. Jerome Park Villa Site & Imp. Co. v. Roberts, 41 App. Div. 21 (1899).

United States securities.-The property of a corporation invested in United States securities is taxable under section 182; the tax is not on the property, but on the corporate franchises. Home Ins. Co. v. N. Y., 134 U. S. 594 (1890).

Patent rights.-The tax on that part of a corporation's capital invested in patent rights is not contrary to the United States Constitution. The tax is on the franchise or business, no matter how the corporate capital is invested. People ex rel. Edison E. Illum. Co. v. Wemple, 61 Hun, 53 (1891); see, also, Home Ins. case, supra. And if the entire capital is invested in patent

rights, the rule is not otherwise. People ex rel. U. S. Aluminum Plate Co. v. Knight, 174 N. Y. 475 (1903); rev'g 67 App. Div. 333.

Trade marks. The same rule applies to the case of a foreign corporation doing business in this state, having part of its capital invested in a trade mark. People ex rel. Spencerian Pen Co. v. Kelsey, 105 App. Div. 133 (1905).

How good will and patents may be valued.-In estimating the value of the good will it is not improper to assume that it is worth the price paid for it. People ex rel. Keochl & Co. v. Morgan, 96 App. Div. 110 (1904). This rule also appears to be true in the case of patents. People ex rel. Automatic Vending Co. v. Kelsey, 101 App. Div. 325 (1905); particularly if the company has been paying dividends of six per cent. on its entire authorized capital stock. Ibid.

"Capital employed"; realty corporations.-There has been a lack of uniformity in the law in cases affecting the taxation of corporations investing their capital in real estate. For example, it has been held that the capital of a corporation invested in unproductive real estate, like swamp land, was not "capital employed within the state" and, therefore, not taxable. People ex rel. Niagara R. Hydraulic Co. v. Roberts, 30 App. Div. 180 (1898); aff'd 157 N. Y. 676. And in an earlier case, it was held that the franchise tax did not apply to real estate invested in the surplus of the corporation and not used in the business. People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46 (1896). A more recent case to the same effect is that of People ex rel. Fort George Co. v. Miller, 179 N. Y. 49 (1904), in which the Court of Appeals by a divided court of four to three held that the capital stock of a corporation invested in unimproved New York City land was not employed in business in the

state.

On the other hand, in a late case, People ex rel. Wall & II. St. Realty Co. v. Miller, 181 N. Y. 328 (1905); a realty corporation incorporated for the purpose of, and actively engaged in, leasing and managing a large office building, with the right to acquire and sell both real and personal property and to carry on any other business which could be conveniently conducted, was held to be taxable on this property as "capital employed."

The Court of Appeals in the last named case, by a divided court, of four to three, in its prevailing opinion, distinguishes the three cases cited in the last paragraph from the one then before it on the ground that the company in that case was found to do a realty business, and was not exempt by reason of its business from the franchise tax. The dissenting opinion, in this case, which is concurred in by two of the judges who wrote the prevailing opinion in the Fort George case, points out that there is no material difference between the three cases above cited and that of the Fort. George Company, and that if the court is to stand on the doctrine of stare decisis, the Wall Street Realty Co. would be exempt from taxation on similar grounds. The Wall Street Realty Co. case was followed very recently in People ex rel. Hubert Apt. Assn. v. Kelsey, 110 App. Div. 618 (1906).

The amendment of 1906 bases the amount of "capital stock employed" on the gross assets wherever employed, and realty companies would hence seem to be taxable thereunder whether the capital was productively or unproductively invested.

It matters not whether the capital stock of a realty company be employed in business. If it be employed at all, it is sufficient. People ex rel. Waclark R. Co. v. Williams, 198 N. Y. 54 (1910); rev'g 134 App. Div. 83.

Recent case defining "capital," "capital stock," and "capital stock employed."- In a recent case, People ex rel. Coney Island Jockey Club v. Sohmer, 140 N. Y. Supp. 507 (1913),