This is an action to recover the penalty prescribed by section 33 of the Stock Corporation Law (Consol. Laws, chap. 59; *885Laws of 1909, chap. 61), and is brought for the defendant’s refusal to allow' the plaintiff, a stockholder, to inspect its stock book. The defendant, a foreign corporation organized under the laws of Pennsylvania, is engaged in the manufacture in the city of Philadelphia of certain products and in the sale thereof throughout the United States. It conducts its business from its main office in Philadelphia. It employs salesmen to solicit orders and, for their convenience, it maintains headquarters at central points. It has one in the city of New York, where its salesmen conduct their correspondence and keep their samples, and where it employs a stenographer and typewriter and keeps a few dollars of petty cash for postage and the like. It keeps no merchandise, no books of’ account and no bank account in this State. The orders are sent to the home office for acceptance or rejection, and all deliveries are made from Philadelphia. It pays all employees from the home office, and the. petty cash above referred to is supplied from, and accounted for weekly to, the home office.
The State of Pennsylvania conferred upon the defendant its corporate franchise, i. e., the privilege of doing business as a corporation. The defendant exercises that franchise by conducting the business for which it was granted in that State. It employs incidental means in this State to obtain orders for its products, and, of course, strictly, that constitutes doing business. One of the means thus employed is an office,- and so, literally, the defendant has an office for the transaction of business; but the question is, whether it has “an office for the transaction of business in this State ” within the intent and purpose of the statute.
Said section 33 is not to be construed apart from its context, nor is the statute of which it is a part to be construed without reference to other statutes on the subject. The particular ones which I have in mind are the G-eneral Corporation Law, relating to corporations generally, the Stock Corporation Law, relating specifically to stock corporations, and article 9 of the Tax Law, relating to corporation taxes. A careful analysis of those statutes discloses a consistent scheme for authorizing the ■ doing of business in this State by corporations, doméstic or foreign, and for the supervision, regulation and taxation of *886corporations thus authorized to do business. I shall refer only to such provisions as are necessary, to outline the general scheme in so far as it is applicable to both domestic and foreign corporations. Sections 15 and 16 of the General Corporation Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28), providing for the granting to foreign corporations of certificates of authority “to do business in this State,” conform to earlier sections relating to the organization of domestic corporations. Section 14 of the Stock Corporation Law, prohibiting combinations for the creation of a monopoly, the unlawful . restraint of trade, or the prevention of competition in any necessary of life, applies to domestic stock corporations amd to foreign corporations “ doing business in this State.”- The following section 15, relating to mergers, applies to domestic stock corporations .and to foreign corporations “ authorized to do business in this State.” ■ The particular section in question here is preceded by a section containing similar provisions with. respect to domestic corporations, and is followed by a section requiring every domestic stock' corporation and every foreign stock corporation- “ doing business within this State,” except moneyed and railroad corporations, to make annual reports. Section 70 of the Stock Corporation Law provides that officers, directors and stockholders of foreign stock corporations “ transacting business in this State,” except moneyed and railroad corporations, shall be subject to the liabilities imposed on officers, directors and stockholders of domestic corporations. Section 180 of the Tax Law (Consol. Laws, chap 60 [Laws of 1909, chap. 62], as amd. by Laws of 1910, chap. 472, and Laws of 1911, chap. 91) imposes an organization tax on every stock corporation incorporated under any law of. this State, and section 181 (as amd. by Laws of 1910, chap. 340) imposes on every foreign corporation, except those enumerated, “authorized to do business under the General Corporation Law,” a license tax “for- the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized capacity in this State.” The rate of tax' in the two cases- differs, but-it is not necessary now to discuss the -obvious reasons for that difference. Section 182 imposes a franchise tax on every cor poration, domestic dr foreign, “ for the privilege of doing busi*887ness or exercising its corporate franchises in this State. ” Argument seems unnecessary to show that said statutes are all parts of a single scheme of laws relating to the doing of business by corporations, the exercise of corporate franchises, in this State, arid I shall.waste no words to prove that a distinction cannot be maintained between the “doing ” and the “transaction ” of business, expressions which are interchangably used throughout' the statutes.
It is settled .that the defendant is not “ doing business in this State ” within the meaning of section 15 of the General Corporation Law (Cummer L. Co. v. Associated Mfrs.’ Ins. Co., 67 App. Div. 151; affd., 173 N. Y. 633; Harvard Co. v. Wicht, 99 App. Div. 507; Burrowes Co. v. Caplin, 127 id. 317; Page & Co. v. Sherwood, 146 id. 618; Penn Collieries Co. v. McKeever, 183 N. Y. 98), or within the meaning of the Tax' Law. (People ex rel. Parker Mills v. Commissioners of Taxes, 23 N. Y. 242; People ex rel. Sherwin Co. v. Barker, 5 App. Div. 246; affd., 149 N. Y. 623; People ex rel. Tower Co. v. Wells, 98 App. Div. 82; affd., 182 N. Y. 553.) The conclusion necessarily follows that the defendant is not transacting business in this State within the meaning of said section 33.
We might stop the discussion.at this point, but there .is a further, and to my mind controlling, reason for holding that the statute was not intended to apply to a case like this, and it may serve a useful purpose to state that reason. I have said that the general purpose of the entire body of statutory law on the subject of corporations was to provide for their organization, or, in the case of foreign corporations, for their authorization to do business, for their effective supervision and regulation and for their taxation. Authorization, regulation and taxation are the objects, the “ doing ” or the “ transaction ” of .business, the exercise of corporate franchises within the State, is the subject, of all the provisions. Even if said section 33 be construed as an independent enactment, the expressed purpose of the requirement of keeping a stock book is that it may be inspected by stockholders and judgment creditors and by “ any officer of the State authorized by law to investigate the affairs of any such corporationIt was first enacted in its present form by chapter 384 of the Laws of 1897, which amended *888chapter 564 of the Laws of 1890, as amended by chapter 688 of the Laws of 1892, and was entitled, “An act to amend the Stock Corporation Law, relating to animal reports and liabilities of officers, directors and stockholders of foreign stock corporations.” The 1st section of said act of 1891 amended section 7, now section 14, relating to combinations in unlawful restraint of trade; the 2d section amended section 30, which (as amd. by Laws of 1901, chap. 354, and Laws of 1905, chap. 415) is now section 34, so as to require annual reports of foreign as well as of domestic corporations; and the 3d section amended section 53, now said section 33 in question here. Said section 53 of the act of 1892 was section 56 of the act of 1890. In that act it immediately followed sections relating to the election of directors and the qualifications of stockholders to vote, and it merely provided that the transfer agent in this State of any foreign corporation should “during the usual hours of transacting business ” exhibit to any stockholder the transfer book and a list of the stockholders thereof. That section was a re-enactment of chapter 165 of the Laws of 1842. It is quite obvious that its primary purpose was to enable stockholders to obtain a list of other stockholders to use in influencing the election of directors, as was held to he the purpose of a somewhat similar statute relating to domestic corporations. (See Laws of 1825, chap. 325, § 1; 1 R. S. 601, § 1; People ex rel. Hatch v. L. S. & M. S. R. R. Co., 11 Hun, 1, 5.) Thus the internal evidence of the section itself, its context, its history and the general purview of the entire body of statutory law, of which it is a part, unmistakably show that its assumed purpose was directly to regulate the-doing of business in this State by foreign corporations. If, therefore, it was intended to apply to a foreign corporation which merely employs instruments in this State incidental to its conduct in another State of its interstate business, it would violate the commerce clause of the Constitution of the United States. (See U. S. Const. art. 1, § 8, subd. 3.)
A corporation is not a citizen within the meaning of article 4, section 2, or the Fourteenth Amendment, of the Federal' Constitution. (Paul v. Virginia, 8 Wall. 168; Hooper v. California, 155 U. S. 648; Waters-Pierce Oil Co. v. Texas, 177 *889id. 28.) Therefore, the recognition by one State of corporations created by other States depends wholly upon principles of comity. A State may exclude or impose conditions upon the admission into it of foreign corporations, but the prohibition of, or the imposition of terms upon, the exercise by a foreign corporation of its corporate franchise within the State is very different from the regulation of the interstate business of a foreign corporation which exercises its corporate franchise in another State and employs no means or agencies in this State except as incidental thereto. A State may not prohibit, regulate or impose conditions or burdens upon the doing of interstate business, whether conducted by natural persons or corporations. (Norfolk & Western R. R. Co. v. Pennsylvania, 136 U. S. 114; Crutcher v. Kentucky, 141 id. 47; International Text Book Co. v. Pigg, 217 id. 91.) The mere having an office or place of business within the State does not subject a foreign corporation to the regulation of its laws. (Attorney-General v. Electric Storage Battery Co., 188 Mass. 239; Norfolk & Western R. R. Co. v. Pennsylvania, supra; Green v. Chicago, B. & Q. R. Co., 205 U. S. 530.)
The defendant gets no privilege from and is not in any just sense exercising, its corporate franchise within this State.
It gets the privilege or franchise of transacting business as a corporation from the State of- Pennsylvania, and it exercises the corporate franchise thus conferred in that State. The only privilege exercised by it in the State of New York is the privilege of. doing an interstate business which it gets from the Congress-of the United States, whether from action or non-action of that body is immaterial, for its jurisdiction is exclusive. The State of New York has no power to prohibit, regulate or burden the exercise of that privilege.
■ As I have endeavored to show, the provision in question is a part of a statute and of a general scheme of laws which purport directly to regulate the doing of business within the State by corporations, or corporations doing business within the State. It is immaterial which expression is used, as both amount to one and the same thing, and it seems to me that it is not permissible to extract from the statute a single section and to construe it without regard to the purview of the entirq act, even *890assuming that said section 33, thus extracted and construed, might be held to be applicable to the defendant. It is unnecessary, therefore, to consider whether, if applicable, it would be unconstitutional for imposing a burden on interstate commerce, or whether, if construed as an exercise of the police power, only indirectly affecting commerce, it might be held to be valid within.cases like Western Union Tel. Co. v. James (162 U. S. 650); Chicago, M., etc., Railway v. Solan (169 id. 133); Lake Shore & Michigan Southern Railway v. Ohio (173 id. 285). Construed .according to its assumed .and virtually expressed purpose, it is invalid, if 'applicable to the defendant. The alternative is to adopt a construction in harmony with the Constitution.
I have considered the expressions used in' said statutes; “ doing business ” and “ exercising its corporate franchises,” as synonymous, and it seems plain that they are so used. I am aware that it has been said .that the so-called “ franchise tax ” on corporations (domestic and foreign) is in respect to the latter “imposed solely upon business,” not on a corporate franchise (People v. Equitable Trust Co., 96 N. Y. 387), and that “ a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created.’’ (Bank of Augusta v. Earle, 13 Pet. 519, 588.) Any discussion in this connection of the nature of the artificial entity called a “ corporation ” would be purely academic. Many cases bearing on the subject may be found in the' note to the case last above cited, published in the Lawyers’ Edition of ■ the Supreme Court reports. A critical. analysis of them will disclose that the apparent conflict are almost wholly in the terminology employed. Many corporations do no business in the States of their creation and in fact are never intended to do any. Upon their organization they acquire the haré privilegé or franchise o.f being corporate entities When such a corporate entity by its agents goes into another State and seeks to do business, it finds that it has no existence V there, that it is only recognized by comity, and that it can only do business or exercise its corporate franchises by permission. It is quite immaterial whether that permission be termed a “privilege” or a “franchise,” though it seems to me that the ( privilege to do business within its jurisdiction, extended by one J *891sovereign to intangible creatures of another sovereign, may well be termed a “ franchise.” In Home Ins. Co. v. New York (134 U. S. 594) Mr. Justice Field made a distinction between the franchise given to two or more persons to be a corporation or to do business in a corporate capacity, and the franchise which, when incorporated, the company may exercise; and in subsequent decisions of the United States Supreme Court the taxes imposed by this State on foreign corporations were considered as taxes imposed on the franchise to do business as a corporation within the State. (See Horn Silver Mining Co. v. New York, 143 U. S. 305; New York State v. Roberts, 171 id. 658.) Foreign corporations, then, doing business or exercising their corporate franchises, within this State, within the meaning of its laws, are subject to the regulation of those laws, irrespective of the nature of the business or whether it be interstate. (People ex rel. Union Sulphur Co. v. Glynn, 125 App. Div. 328, and cases cited.) But the power of the State depends on the exercise of the privilege or franchise to do business wifhin the State ip a corporate or organized capacity, not on the exercise of the privilege to do interstate business, which Congress alone . can grant and regulate. The underlying principle, if I have discerned it, is that the corporation statutes of this State become operative upon foreign corporations only perforce of some privilege which the State has the power to grant or withhold. Those statutes, construed in the light of that principle, form a consistent scheme in harmony with the Federal Constitution. , I shall not hazard a ' general definition of what constitutes the exercise of a corporate franchise within this State. It is sufficient for this case to state a rule of exclusion, i. e., that the mere employment in this State of means and agencies as incident to the conduct in another State of an interstate business does not constitute the “doing” or the “transaction” of business or “the exercise of a corporate franchise ” in the State within the meaning of its statutes.
The determination of the Appellate Term should be reversed and the judgment of the Municipal Court affirmed, with costs.
Scott, J., concurred.
Determination affirmed, with costs.