U.S. Supreme Court PEOPLE OF STATE OF NEW YORK v. GRAVES, 299 U.S. 366 (1937)

[Page 299 U.S. 366, 371]

cisable only in transactions conducted at the Exchange building in the city of New York. [Footnote 1]

[Page 299 U.S. 366, 372]

eral rule property of that sort is taxable only at the domicile of the owner, and that unless the membership has a 'business situs' in New York it is not taxable there. Farmers' Loan & Trust Co. v. Minnesota, 280 U.S. 204, 213, 50 S.Ct. 98, 101, 65 A.L.R. 1000; Beidler v. South Carolina Tax Commission, 282 U.S. 1, 8, 51 S.Ct. 54, 55; First National Bank v. Maine, 284 U.S. 312, 329, 331 S., 52 S.Ct. 174, 177, 178, 77 A.L.R. 1401; Wheeling Steel Corporation v. Fox, , 209-211, 56 S.Ct. 773, 776, 777. He contends that the membership cannot be said to have a business situs in New York because he and his copartners reside and transact all their business in Massachusetts.

We think that the argument fails to give adequate consideration to the nature and incidents of the membership. When we speak of a 'business situs' of intangible property in the taxing State we are indulging in a metaphor. We express the idea of localization by virtue of the attributes of the intangible right in relation to the conduct of affairs at a particular place. The right may grow out of the actual transactions of a localized business or the right may be identified with a particular place because the exercise of the right is fixed exclusively or dominantly at that place. In the latter case the localization for the purpose of transacting business may constitute a business situs quite as clearly as the conduct of the business itself.

Here. we are dealing with an intangible right of a peculiar nature. It embraces the privilege of a member to transact business on the Exchange as well as a valuable right of property which is the subject of transfer with the approval of the Exchange and may survive resignation, expulsion or death. [Footnote 2] In both aspects the right is held and can be exercised only in subjection to the constitution, by-laws and rules of the Exchange. The Exchange is a market place. The privilege which inheres in the mem-

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sota, supra, and later cases upon that point. See Wheeling Steel Corporation v. Fox, supra.

We think that the dominant attribute of relator's membership in the New York Stock Exchange so links it to the situs of the Exchange as to localize it at that place and hence to bring it within the taxing power of New York. Accordingly, we hold that in laying the tax upon the profits derived by the relator from the sale of the right appurtenant to his membership the State did not exceed the bounds of its jurisdiction. The judgment is affirmed.

AFFIRMED.

Mr. Justice STONE took no part in the consideration or decision of this case. Footnotes

Footnote 1 See Belton v. Hatch, 109 N.Y. 593, 595, 596, 17 N.E. 225, 4 Am.St. Rep. 495; People ex rel. Lemmon v. Feitner, 167 N.Y. 1, 4, 11, 13, 60 N.E. 265, 82 Am.St.Rep. 698; Meyer, 'The Law of Stock Brokers and Stock Exchanges,' pp. 13-16, 75-79.

Footnote 2 Weston v. Ives, 97 N.Y. 222; Belton v. Hatch, 109 N.Y. 593, 17 N.E. 225, 4 Am.St.Rep. 495; Matter of Grant, 132 App.Div. 739, 742, 116 N.Y.S. 767, 1152; Hyde v. Woods, 94 U.S. 523; Sparhawk v. Yerkes, 142 U.S. 1, 12, 12 S.Ct. 104; Meyer, op. cit., pp. 115-117.