The exact nature of the business the defendant is organized to transact is not alleged although it may be' inferred from its title that its principal business is to deal in real estate. Plaintiff rests his right to recover upon the fact that defendant is a business and not a banking corporation. By certificate A, in consideration .of the annual payment of $107.36, or the sum of $9.20 monthly in advance during ten years from date, defendant promises to pay $1,500, and “in addition thereto such portion of the profits as the Directors of the Company may consider just and equitable.” Under the head of “Privileges and Provisions” the following appears: “The payments on this Certificate being accepted by the Company for investment in .business, not for deposit, the owner has the following Privileges of Surrender Before Maturity.” Among these privileges are the following:
(1) To use the payments, with accrued interest, in the purchase of real estate from the company.
(2) On and after the second payment to receive- a paid-up certificate payable at the maturity date of the original certificate, or to receive cash according to a cash value set forth in a table annexed.
(3) In the event of the owner’s death and at the election of his representatives, to cease further payments and to receive the total amount of the sums already paid with four per cent interest. The certificate also contains provisions against forfeiture and entitling a defaulting holder, under certain circumstances, to a paid-up certificate for a prescribed amount. It also reserves to the company the right to mature and terminate the certificate under certain conditions upon payment of a fixed sum. Certificate B, while different from A in-certain respects, is not substantially different so far as the questions herein involved are concerned. C is known as a '“ paid-up certificate,” in which for value received defendant at the expiration of ten years from date promises to pay a certain fixed sum with six per cent interest and in addition thereto “ a share in the profits of the Company, such apportionment of profits to be determined by the directors thereof. ” ' It also reserves to the company after the expiration of five years the right to termi*467nate the certificate on payment of its face value, “together with such proportionate share of the profits up to the time of such cancellation as shall be determined by the directors,” and it gives to the owner the privilege to surrender the certificate after two years from date, whereupon the company is to pay therefor at “its full face value in cash, less two per cent per annum for the unexpired time to the maturity ” of the certificate. The owner is also given the privilege to apply the amount of the certificate in the purchase of real estate from the company. The allegation that the defendant is a domestic business corporation necessarily implies that it is a stock corporation. (Bus. Corp. Law [Consol. Laws, chap. 4; Laws of 1909, chap. 12], art. 2, § 2, as amd. by Laws of 1909, chap. 484.) As a business corporation, and except as provided in section 2a of that law (added by Laws of 1909, chap. 484), it is entitled to pursue “any lawful business, purpose or purposes other than a moneyed corporation or a corporation provided for by the Banking, the Insurance, the Railroad and the Transportation Corporations Laws.” (Bus. Corp. Law, § 2.) By the Stock Corporation Law (Consol. Laws, chap. 59 [Laws of 1909, chap. 61], art. 2, § 6), in addition to the powers conferred upon it by the General Corporation Law, it has “power to borrow money and contract debts, when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; and it may issue and dispose of its obligations for any amount so borrowed.” Among other restrictions to which it is subject, it may not lawfully carry “on the business of discounting bills, notes or other evidences of debt, of receiving deposits,” or otherwise engage in business commonly transacted by banks. (Gen. Corp. Law [Consol. Laws, chap. 23; Laws of 1909, chap. 28], § 22; since amd.) Nor may it “ exercise- any corporate powers not given by law, or not necessary to the exercise of' the powers’ so given.” (Gen. Corp. Law, § 10.)
I think the contention that either of the transactions was a deposit of money is untenable. There is no allegation of any fact from which a deposit may he inferred, and there is nothing in either certificate which would import a deposit. On the *468contrary, as pointed out by Mr. Justice Page in his dissenting opinion in the court below (80Mise. Rep. 655), the transactions, as evidenced by the several certificates, involve all of the essential features of a loan. Certificates A and B state on their face that the moneys are received by the company “for investment in business, not for deposit. ” It may be that these certificates have.certain features analogous to obligations which maybe entered into by co-operative savings and loan associations, or by mortgage, loan or investment corporations, which are “moneyed corporations ” and may be lawfully incorporated and transact business only under the provisions of the Banking Law (Consol. Laws, chap. 2 [Laws of 1909, chap. 10], § 2; since amd.). But it is very evident that many of the powers conferred upon such corporations, so far as they affect the terms upon which they may receive money from their members, are likewise an incident to the power to borrow money expressly conferred on ordinary business corporations, and while it may be the fact that the chief purpose of this defendant is the sale of its obligations to the public and the transaction of a business analogous to one which may be lawfully conducted only under the provisions of the Banking Law, it is impossible to say on the record before us that the transactions evidenced by these certificates or any of them necessarily amount to anything more than a borrowing by defendant of money “ necessary for the transaction of its business ” as a real estate company, in consideration of which it is issuing its promises to pay in a form somewhat unusual, it is true, but one not prohibited by law.
The quotation from the annual report of the Superintendent of Banks for the year 1912, to which we are referred in the brief of the learned counsel for the appellant, leads to the belief that the Superintendent, and presumably his advisers, have reluctantly come to the same conclusion which they, in common with myself, have been forced to reach because of the necessarily broad provisions of the Business and Stock Corporations Laws with respect to the borrowing of money, and the corresponding latitude concerning the terms of such borrowing which must necessarily follow the right to borrow. Although any construction of these latter laws which will permit unscrupulous *469persons to use it to circumvent the Banking Law is greatly to "be deplored, our eagerness to prevent such an abuse should not betray us into an interpretation which may cast doubt on a • great volume of legitimate obligations which have been issued by bona fide real estate and other business corporations, in a variety of forms different from such as are used to evidence the ordinary loan, and which in some of their provisions may be similar to the obligations which some of the companies authorized to do business under the Banking Law have the right to issue.
The order appealed from should be reversed, with costs, and the motion denied, with costs.
Ingraham, P. J., concurred.
Determination, judgment and orders affirmed, with costs.