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and 121 New York State Reporter (42 Misc. Rep. 423.)

PEOPLE ex rel. FARCY & OPPENHEIM CO. v. WELLS et al., Com'rs.

(Supreme Court, Special Terin, New York County. January, 1904.) 1. TAXATION-FOREIGN CORPORATIONS-CAPITAL IN STATE.

Under Laws 1896, p. 801, c. 908, § 7, providing that nonresidents of the state doing business in the state shall be taxed on the capital invested as personal property at the place where such business is carried on as if they were residents of the state, a foreign corporation manufacturing goods in France, maintaining in the city of New York an agency for the sale of its goods shipped from France, and remitting the proceeds, less the expenses, to France, and renting a storage place in the city of New York, is not tax

able, except on the value of its office furniture. Certiorari by the people, on the relation of the Farcy & Oppenheim Company, against James L. Wells and others, to review proceedings in assessment for personal taxes. Assessment confirmed in part.

Frederic R. Coudert and Charles A. Conlon, for relator.
Curtis A. Peters (John J. Delany, Corp. Counsel), for respondents.

BISCHOFF, J. The relator, a foreign corporation engaged in the manufacture of goods in France, maintained an agency in this city for the sale of its goods, the proceeds, over and above the expenses of maintaining the agency, being remitted to it at its home office, and all the goods sold being manufactured abroad and shipped for sale in such quantities as were required. For the purposes of this agency, a loft and independent storage space were rented upon yearly lease, the transactions having covered a period of about three years at the time when the assessment under review was made.

The statute under which the relator may be taxed, if at all (Tax Law, Laws 1896, p. 801, c. 908, $ 7), provides: “Nonresidents of the state doing business in the state, either as principals or partners, shall be taxed on the capital invested in such business, as personal property, at the place where such business is carried on, to the same extent as if they were residents of the state."

In the case of People ex rel. Parker Mills v. Commissioners, 23 N. Y. 242, under an earlier statute identical in purport, it was held that goods sent by a foreign corporation for sale within the state at or through the operations of an agency maintained for the purpose were not to be made the basis of assessment for taxation as capital invested in a business. This case was followed in People ex rel. Sherwin Williams Co. v. Barker, 5 App. Div. 246, 39 N. Y. Supp. 151, and the doctrine of both cases was approved in People ex rel. Armstrong Cork Co. v. Barker, 157 N. Y. 164, 51 N. E. 1043; the tax in the latter case, however, being upheld upon the distinction found in the fact that some of the goods thus sold were manufactured within the state, and that the party taxed had filed a certificate declaring an intention to do business within the state.

Following this, other cases have been presented where such a tax was sustained, in each of which the declared intention to do business was present, and the intent, thus indicated, was deemed an important factor, and, for the purposes of a distinction from the earlier cases, would seem to have been the controlling factor. People ex rel. Sherwin Williams Co. v. Feitner, 60 App. Div. 628, 70 N. Y. Supp. 836; People ex rel. Crane Co. v. Feitner, 49 App. Div. 108, 62 N. Y. Supp. 1107; People ex rel. Collar Co. v. Feitner, 31 Misc. Rep. 553, 65 N. Y. Supp. 518.

It may be noted that the tax law requires the concurrence of business done and capital invested in that business, but the intent to maintain a business, while satisfying the former requisite, does not necessarily meet the latter, which depends upon the character of the "investment, and it was upon this characteristic that the earlier cases, alluded to above, proceeded when holding that the value of foreign goods sent here for sale was not a taxable "investment.”

The theory of the later authorities is deemed to be that, where the sales agency is a permanently established business, it loses its character as a mere place for the distribution of goods, and the value of the goods thus becomes invested capital. An instance is afforded by the case of People ex rel. Durand-Ruel v. Wells, 41 Misc. Rep. 144, 83 N. Y. Supp. 936, where a large building was leased for successive terms of five years, and the business conducted was the sale of works of art purchased abroad for the American market. There the so-called agency was deemed upon the facts to be an independent business, and the conclusion accords with reason.

In the case before me I find no reasonable ground for a distinction from the Parker Mills Case, supra, and from my examination of the authorities I do not understand that the doctrine there announced has been overruled by later expression.

The nature and surroundings of the transactions conducted by the relator do not suggest an independent, permanent business to any degree which might differentiate the case from the Parker Mills Case, nor can the mere duration of the sales for three years afford an arbitrary ground of distinction, where the intention to conduct a permanently located business is not otherwise clearly indicated.

So far as the relator maintains a sales agency, the value of the goods on hand for sale, as I find, is not taxable, but “business” of this limited character is done, none the less, and the value of the office furniture employed in that business is logically capital invested, and to this extent the assessment may properly be upheld.

Assessment confirmed as to $800 thereof; otherwise vacated. Ordered accordingly.

(92 App. Div. 587.)

MAIER V. REBSTOCK.

(Supreme Court, Appellate Division, Fourth Department. March 15, 1904.)

1. VENDOR AND PURCHASER-CONTRACT FOR RECONVEYANCE_PERFORMANCE

REASONABLE TIME.

Where, at the time of the sale of certain real estate, the vendor agreed that, if at the end of three years the purchaser could not sell the property at an advance to cover 6 per cent. interest on the investment, the vendor would take the land back, and refund the money, with 6 per cent. interest, and other expenses, the purchaser was entitled to a reasonable time after the expiration of such three years in which to elect to enforce such agree ment.

and 121 New York State Reportér 2. SAME-QUESTIONS FOR JURY.

In an action to enforce a vendor's agreement to repurchase the land if the purchaser should not be able to sell the same at an advance within three years, facts held to require submission to the jury of the questions whether the purchaser had used reasonable efforts to sell the land within the time, and whether the vendor had acquiesced in the purchaser's delay of five years after the expiration of the contract period in demanding a

repurchase. 3. SAME-CONVEYANCE.

Where plaintiff purchased certain land from defendant under the lat. ter's agreement to repurchase the same in case plaintiff did not sell the land at a profit within three years, and shortly thereafter plaintiff transferred an interest in the land, or the profits which might accrue therefrom, to his brother, plaintiff was only entitled to enforce defendant's

agreement to the extent of his interest. 4. SAME-EVIDENCE.

Where, after purchasing land under a contract by the vendor to repurchase in case the vendee could not resell the same at a profit within three years, the vendee transferred a portion of his interest in the land to his brother, who paid the vendor one-half of the cash payment, together with one-half of the bond and mortgage, and taxes falling due from time to time, and both brothers conferred with defendant concerning the sale of the land, letters of the purchaser's brother to defendant with reference to the land, and defendant's offer to him to take the land back, were admissible as against the purchaser. A. McLennan, P. J., and Stover, J., dissenting in part.

Action by Charles W. Maier against Joseph H. Rebstock. After verdict in favor of plaintiff, a motion for a new trial was ordered to be heard in the Appellate Division in the first instance. Motion granted.

See 73 N. Y. Supp. 817.

Argued before McLENNAN, P. J., and SPRING, WILLIAMS, HISCOCK, and STOVER, JJ.

Clarence A. McDonald, for plaintiff.
Arthur W. Hickman, for defendant.

SPRING, J. On January 10, 1893, defendant conveyed to the plaintiff a parcel of land situate in the city of Buffalo for $720. Of the purchase price, $220 were paid in cash, and $500 were secured to the vendor by the bond and mortgage of the vendee, due in three years from date. Contemporaneous with the delivery of the conveyance, the vendor executed, as a part of the consideration of the transaction, the following instrument:

"Buffalo, N. Y., Jan'y 10th, 1893.

“Guarantee to Chas. W. Maier. "I hereby agree, if at the end of three (3) years you can't sell at an advance to cover six (6) per cent. interest on investment I will take the land back and refund the money also pay you six (6) per cent. interest and all other expenses connected with transfers, recording, etc.

"Joseph H. Rebstock,

"Per S. J. Rebstock, Atty." The plaintiff claims that he has been unable to sell the land, and has sued upon the agreement to recover the purchase price and taxes which from time to time have been levied upon the land and paid by the plaintiff. By the terms of the agreement, the three years stipulated therein expired on January 10, 1896, but the present action was not commenced until July, 1901. On the trial the court directed a verdict for the plaintiff for the full amount of the purchase price, together with interest and the taxes paid, including interest thereon. In this we think the court erred. As we interpret the agreement, the plaintiff had a reasonable time after the expiration of the three-years limitation in which to reconvey the land to the defendant. He was not permitted to make an election to await a favorable turn in the selling price, and still keep his grip on the liability of the defendant. What is a reasonable time, in view of all the circumstances, is ordinarily for the jury to determine. Pierson et al. v. Crooks et al., 115 N. Y. 539, 551, 22 N. E. 349, 12 Am. St. Rep. 831; Grabfelder v. Vosburgh (decided at the present term of this court) 85 N. Y. Supp. 633.

The plaintiff allowed five years to elapse before endeavoring to hold the defendant on the agreement. If nothing had transpired in the interim indicating that the defendant acquiesced in this delay, or allowed the time to run along, realizing that his liability continued, then, as matter of law, he would be absolved therefrom. A brief review of the conduct of the parties after the expiration of the three-years limitation will aid us in appreciating the real situation:

The plaintiff testified to his fruitless efforts to sell the land during the three years, and that he continued his efforts thereafter. In February, 1896, which was shortly after the expiration of the time period in the agreement, he put the lots for sale in the hands of real estate dealers in Buffalo, and for a year and a half they had charge of the property as selling agents, but made no sale. The plaintiff testified he never had any offer for this property, except he states in a letter that he was once offered $4 a foot, which was far below the purchase price. He has testified that he often talked with the defendant in regard to the prospect of selling this land, and was advised that it was good. He saw him once or twice each year down to 1899 or 1900 in reference to selling the land, but was unable to make any sale. He resided in Seneca Falls, and knew but little concerning the value of the land, while the defendant was a resident of Buffalo, and apparently familiar with the selling value of property of this kind, and appreciated the difficulty in disposing of it. Whenever the plaintiff was in Buffalo he met the defendant, and they talked over the situation in reference to this land. On the 7th of February, 1901, he wrote to the defendant:

"As you know we have been trying to sell them ever since we bought but have never had but one offer and that was $4.00 a foot.”

He then called attention to the agreement of the defendant to "take the lots back” if they were unable to sell within the three years. He then adds:

"We have held off, thinking perhaps that we could get rid of them, but as there don't seem to be much prospect, thought that I would write you, and get the thing closed up."

The defendant replied to this and another letter, not in evidence, saying he had “been making inquiries”; that real estate was “picking up and there is no question that you will be able to sell, and I think at a profit, this summer.” It will be noted that the defendant does not and 121 New York State Reporter claim that the plaintiff had elected to return the land, or that the agieement had become inoperative by lapse of time. The plaintiff thereupon wrote two letters to the defendant, advising him that he desired to reconvey the land, and receive the purchase price and expenses, in accordance with the contract of the defendant. "He says in the letter of February 20th:

"The 6 per cent investment under your guarantee is profit enough for me, and I want to settle the thing up. Our agreement, when I bought the lots, was that you would take them off my hands, if I were unable to sell them, and this is what I want you to do. If, as you think, values will rise, you will be the gainer. You are on the ground and can look after them, while I am not, and could not watch the market so as to know when was the best time to dispose of them. In thinking it all over I want the guarantee fulfilled."

And in the letter of April 4th: "I expect you to fulfill that guarantee and cannot see why I should wait until you make inquiries as to the value of the property.”

On the 20th of April the attorneys for the plaintiff wrote to the defendant, insisting upon a prompt adjustment of the matter. In response to this letter the defendant on the 25th of April wrote to the plaintiff, saying:

"I will keep my agreement made with you. I hardly think it necessary to employ an attorney. I haven't the cash on hand at present but think I will be able to arrange it this fall. Will you send me a copy of the agreement, hope this will be satisfactory to you."

The defendant not only does not repudiate his liability, or claim that the plaintiff has de ferred his demand too long, but distinctly recognizes the binding force of the agreement. The defendant, in his testimony, did not claim that he told the plaintiff he was not liable on this agreement; and he did not deny that after the expiration of three years the plaintiff repeatedly conferred with him in regard to selling the lots, and as to the prospect of finding a purchaser.

In view of all of this testimony, supported and elucidated by the correspondence mentioned, we think it was for the jury to determine, in the first place, whether the plaintiff, during the three years stipulated in the agreement, exercised reasonable diligence and made proper efforts to sell these lots. In the second place, it was for the jury to find whether the defendant, under all the circumstances, acquiesced in the delay which was made, appreciating that his liability in compliance with the agreement was subsisting during all of this time. If so, the jury might say the plaintiff commenced his action seasonably.

Soon after the purchase of the land, the plaintiff, by some arrangement, the nature of which is not clearly disclosed by the record, transferred some interest in this land, or the profits which might accrue therefrom, to his brother, Edward Maier. The latter paid to the plaintiff one-half of the cash payment, and one-half of the bond and mortgage and of the taxes falling due from time to time. If this arangement was equivalent to a sale of one-half of the premises, then the plaintiff, to the extent of the money received, must give credit upon the agreement sued upon. If the plaintiff had sold to his brother the entire parcel of land, receiving the full purchase price paid by him, but retaining title in himself because of an agreement that he was to share

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