association existing under the laws of the State, under corporation tax law, August 5, 1909, c. 6, section 38, providing that every corporation, joint-stock company, or association organized for profit and having a capital stock represented by shares, now or hereafter organized under the laws of any State, shall be subject to a special excise tax, since under the statutes of the State the association was endowed with capacities and attributes not possessed by a partnership at common law; it being practically a "corporation" by New York law, despite the absence of the important corporate attribute of limited liability. (Roberts v. Anderson, 226 Fed. 8, 1915.) (See, also, cases under act of 1913.) CROSS REFERENCES "DOING BUSINESS." - For set of facts held to constitute "doing business" in case of Additional franchises procured by lessor, see cases 17, 19. Eminent domain exercised or purchase of property by lessor, see cases 13, 15, 21. Distribution of rent by lessor, see cases 1, 2, 3a, 4, 5, 9, 17, 18, 23, 26, 27, 28, 29. Insurance companies, see case 3. Leased corporations, see cases 1, 2, 3a, 5, 6, 7, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 35. Mining companies, see cases 1, 2, 12, 33. Power of attorney, see case 16. Railway companies, see cases 3a, 10, 11, 13, 14, 15, 18, 25, 26, 29, 32, 34, 35. Realty companies, see caseз 4, 8, 9. Sale of stocks or bonds or issuance of bonds by lessor, see cases 6, 15, 24, 27, 28, 34. Street railway companies, see cases 5, 6, 7, 19, 20, 21, 22, 23, 27, 28, 31. "Doing business." 1. A corporation, the sole purpose whereof is to hold title to a single parcel of real estate subject to a long lease and, for convenience of the stockholders, to receive and distribute the rentals arising from such lease and proceeds of disposition of the land, and which has disqualified itself from doing any other business, is not a corporation "doing business" within the meaning of the corporation tax provisions of the act of August 5, 1909, c. 6, 36 Stat. 11, 112, and is not subject to the tax. (Zonne v. Minneapolis Syndicate, 220 U. S., 187, 1911.) 2. Where defendant corporation was organized to own the stock of a mining company, and had no assets except such stock, a small amount in bank, and office furniture, etc., and did nothing other than to receive dividends from the operating company and distribute them as such among its own stockholders, it was not "doing business" within the act and was not subject to the tax. (United States v. Nipissing Mines Co., 206 Fed. 431, 1913.) 3. An association organized under the laws of a State for the purpose of collecting assessments from its members and disbursing the same in payment of benefits on the death or injury of members and the expenses of the association, any surplus at the end of a year being paid into a reserve fund to be used in payment of losses in any succeeding year which may exceed the assessments for that year, is an "insurance company" and in exercising the functions for which it was organized is "doing business" within the meaning of those terms as used in Corporation Tax Act, August 5, 1909. * * * * (Commercial Traveler's Life and Accident Association v. Rodway 235 Fed. 370, 1913.) 3-A. A railway corporation which has leased its railroad to another operating company but which maintains its corporate existence and collects and distributes to its stockholders the rental, from the lessee and also dividends from investments is not "doing business" within the meaning of this act and hence not required to make return or pay the tax. (Park Realty Co. case, 220 U. S. 107, disting., and Zonne . Mpls. Syndicate, 220 U. S. 187, followed.) (McCoach v. Minehill & S. H. R. R. Co. 228 U. S. 295, 1913, Affg. 192 Fed. 670, 1912.) 4. Where a corporation, with general business powers, amended its articles so as to limit its activities to the mere ownership and rental of certain property occupied and used by its stockholders as a department store, and applied the entire rent, first to the payment of interest on mortgage liens, and then to the payment of dividends to stockholders, it was not "doing business," under Corporation Tax Act, August 5, 1909. (Abrast Realty Co. v. Maxwell, 206 Fed. 333, and Maxwell v. Abrast Realty Co., 218 Fed. 457, 1914.) 5. Where a street railway company, under authority of the State law, leased at a graded annual rental its system of street railways, which it owned, operated, and controlled, to another company for a long term, and thereafter engaged in no other business than to maintain and preserve its corporate existence, receiving the rent, and distributing the income among its stockholders, it was no longer "doing business" as a traction company, and was therefore not subject to franchise taxation, under act of August 5, 1909 * * * which is only applicable to corporations doing business in a corporate capacity as authorized. (Wilkes-Barre & W. V. Traction Co. v. Davis, 214 Fed. 511, 1914.) 6. Selling stocks or bonds by lessor, proceeds to be applied to making improvements, makes lessor liable. The lessor company engages in business, although it may not have in its immediate possession the equipment and appliances of a railroad business. (Lima Electric R. & Lt. Co. v. Bettman, Commissioner's Annual Report, 1914, p. 25.) (But see cases No. 15, 24, 34.) 7. Substituting one mortgage bond for another for the purpose of renewing, refunding, or extending time for the payment of preexist ing debt, does not render the lessor company liable as carrying on business in the capacity designated in its articles of incorporation. (Lima Elec. Ry. and Lt. Co. v. Bettman, S. D., Ohio, Annual Report of Commissioner of Int. Rev. 1914, p. 26.) 8. A corporation to be subject to the tax must be organized for the purpose of doing business, and, in addition, must be actually engaged in that business. The question is rather what the corporation is doing than what it could do. (Emery, Bird, Thayer Realty Co. v. United States, 198 Fed. 242, 1912, affirmed by Supreme Court in 237 U. S. 28, 1915.) 9. A realty corporation simply collecting and distributing rent from a specified parcel of land is not doing business within the meaning of corporation tax law of 1909. (Emery, Bird, Thayer Realty Co. v. United States, 198 Fed. 242, 1912, affirmed by Supreme Court, 237 U. S. 28, 1915; Zonne v. Minneapolis Syndicate, 220 U. S. 187, followed; Cedar St. Realty Co. v. Park Realty Co., 220 U. S. 107, distinguished.) 10. Within act August 5, 1909, section 38, the expression "engaged in business," "carrying on business," or "doing business" do not have different meanings, but separately or connectedly convey the idea of progression, continuity, or sustained activity, and "engaged in business" means occupied or employed in business; "carrying on business" does not mean the performance of a single disconnected business act, but means conducting, prosecuting, and continuing business by performing progressively all the acts normally incident thereto, while "doing business" conveys the idea of business being done, not from time to time, but all the time. (Lewellyn v. Pittsburgh B. & L. E. R. Co., 222 Fed. 177, 1915.) 11. The bare acts of the lessor company in acquiring property by purchase and condemnation proceedings at request of lessee do not constitute "carrying on or doing business" within the meaning of the statute. (Lewellyn v. Pittsburgh B. & L. E. R. Co., 222 Fed. 177, 1915.) 12. An iron company, which with the approval of its stockholders, leased to another company for 999 years all the property constituting its manufacturing plant, sites, mines, and roads, and coal and other lands, not to exceed 10,000 acres, and assigned to the lessee all its cash, contracts, and entire business, in consideration of a rental equal to 4 per cent on its outstanding stock, payable directly to its stockholders, together with an additional amount to cover the cost of maintaining its organization, after which it merely existed as landlord and lessor, and had no other income than the rent, was not "doing business" within the meaning of corporation tax act August 5, 1909, imposing an excise upon the doing or carrying on of business in a corporate capacity in a State. (Cambria Steel Co. v. McCoach, 225 Fed. 278, 1915.) 13. Where railroad companies leased their railroads, rolling stock, and other property, and surrendered possession thereof to the lessee, and the lessee thereupon assumed and maintained entire control and operation of the roads, the lessors agreeing to maintain their corporate existence in order to hold title to the properties and to exercise their power of eminent domain in acquiring additional property when the lessee might so request and furnish the money therefor, and the lessee agreeing to pay the taxes and interest upon the bonded indebtedness of the companies, and to pay dividends to the lessor's stockholders at an agreed rate, the acquisition of property by the lessors by purchase and condemnation pursuant to the request and direction of the lessee, which property was paid for with money furnished by the lessee and was immediately delivered into the possession of the lessee and used by it in operating the roads under the terms of the leases, was not such a doing of business as made the lessors liable for the special excise tax imposed by act August 5, 1909 * * providing, etc., as corporate acts performed by a corporation in the exercise of its primary franchises, as the maintenance of its corporate existence or which relate strictly to the internal affairs of the corporation and do not include the exercise of its secondary franchises, do not constituto "doing business" within the statute, and though the acts of purchasing and condemning property were both corporate and business acts, the corporations merely acquired the instrumentalities to do the thing and to carry on the business for which they were incorporated, and moreover "net income" imports a gross income, and the difference between the two implies the expenditure of income for some corporate purpose, as that of carrying on or doing the business for which the corporation is organized, and such corporations received no income from railroads operated by them, and expended none in the operation of railroads or for any other purpose. (Lewellyn v. Pittsburgh, B. & L. E. R. Co., 222 Fed. 177, 1915.) * 14. During the greater part of the year 1910 plaintiff, a railroad company, owned a line of railroad which, with its rolling stock and equipment, was leased and operated by the lessee, which was obligated by the lease to pay all expenses of maintenance and renewal, taxes on the property, and other incidental expenses, but was entitled to rotain from the rental the cost of certain permanent improvements made. During such time the lessor maintained its offices, transferred stock, collected and deposited the rental, and expended such sums as were necessary in maintaining its corporate existence, including the State corporation tax. Before the end of the year the lease was canceled by mutual consent, and the lessor immediately sold and transferred all of the property and from the proceeds paid its bonded and other indebtedness. Held, That the lessor was not engaged in 149707-19--PT II---2 * * * business" during the year, within the meaning of corporation tax act and that it was not subject to the excise tax (Miller v. Snake River Valley R. Co., 223 Fed. August 5, 1909 imposed thereby. 946, 1915.) 15. A lessor company, by issuing bonds at the lessee's request, in accordance with provisions in the lease, and in exercising the right of eminent domain to obtain additional land necessary for the operation of the leased road, at lessee's expense and under its direction, was not doing business within the meaning of the act. (New York Central & H. R. R. Co., v. Gill, 219 Fed. 184, 1915, C. C. A., reversing N. Y. C. & H. R. R. Co. v. Gill, T. D. 1999, 1914.) 16. Two corporations chartered by special acts of the New York Legislature to construct and operate pneumatic tubes between places in the State for the conveyance of mails, newspapers, and parcels, each owned and operated tubes connecting the general post office in Manhattan with branch offices and different places, and used exclusively for transportation of mails. By the action of the Post Office Department bids were invited for carrying of mails by pneumatic tubes, but subject to the requirement that but one bid should be made for the service of the tubes owned by such two corporations, whereupon one company leased all of its property for a term of years to the other, which secured the contract and performed the required service. Held, That such lease was not ultra vires on the part of the lessor, but was valid, and that on its execution the lessor ceased doing business within the meaning of the corporation tax act of August 5, 1909 and was not subject to the excise tax thereby imposed. * * * Power of attorney is one method of enabling leasing companies to transact business formerly done by granting companies and does not make leasing company agent of lessor company. A corporation, unless prohibited by explicit terms in its grant of power, may let its property for limited term of years; the lessee is not agent of lessor; the power to sell implies the power to lease and such lease is valid although not authorized by charter. (New York Mail and Newspaper Trans. Co. v. Anderson, C. C. A. in 234 Fed. 590, 1916, and N. Y. Pneumatic Service Co. v. Anderson (affirms dec. of D. C.) 17. A gas company, which has leased its plant and all other physical property for a term of years, the business for which it was incorporated being carried on by its lessee, is not "carrying on or doing business" within the meaning of this act and subject to the tax thereby imposed, although it retains its franchise and organization, and receives and disburses its income, and under the terms of the lease bears the expense of alterations, improvements, and additions to its plant made during the term, and also during the term has applied for and |