Althause v. Guaranty Trust Co.

Bijur, J.

There is no dispute as to the facts involved in this case. The American Woolen Company is a Hew Jersey corporation having its main office, where it keeps all its books, including its ultimate stock transfer book, in the state of Hew Jersey. It has no office in the state of Hew York, and so far as appears does no business here. It employs the defendant as a stock transfer agent, delivering to such agent certificates of stock duly executed in blank which the agent in turn delivers to persons who surrender an equivalent amount of old certificates properly indorsed. The actual transfer of stock is made at the Woolen Company’s Hew Jersey office. The transfer agent has a so-called stock book of the Woolen Company, which contains an alphabetical list of stockholders, their place of *183residence, the number of shares held by them, and the time when they became stockholders, but does not show the amount paid upon such stock.

Plaintiff, a stockholder, duly demanded of defendant an opportunity to inspect such book during business hours and was refused. Both sides agree that the issue raised is the construction of section 33 of the law as applied to this situation. The statute so far as involved here, reads: “ Every foreign stock corporation having an office for the transaction of business in this state, except moneyed and railroad corporations, shall keep therein a book to be known as a stock book. * * * Such stock book shall be open daily * * * for the inspection of its stockholders. * * * If any such foreign stock corporation has in this state a transfer agent * " "" such stock book may be deposited in the office of such agent and shall be open to inspection” in the same way. The penalty for refusal to exhibit the book is $250.

The respondent contends that the function exercised by the transfer agent is the transaction of business ” within the state, in the sense in which the term is used in the statute; and that, consequently, the transfer agent is liable for the penalty in the case at bar. I am, by no means, prepared to accept that definition of the phrase “ transaction of business,” although it is supported by People ex rel. Miles v. Montreal & Boston Copper Co., 40 Misc. Rep. 282. On the other hand, a contrary view is indicated in Honeyman v. Col. F. & I. Co., 133 Fed. Rep. 96, and Union Trust Co. of Rochester v. Sickels, 125 App. Div. 105.

However, respondent’s contention in this respect is somewhat beside the point. The statute imposes no obligation upon a foreign stock corporation which transacts business in this state, but only on one “ having an office for the transaction of business in this state ” and that distinction is recognized in Hovey v. DeLong Hook & Eye Co., 147 App. Div. 881, in which the prevailing opinion, interpreting this very section, holds that it is the having of the office for the transaction of its business, and not the doing of the business or the extent thereof, which determines the application of the law.

*184The real question, therefore, is whether, through leaving its blank stock certificates and its stock book with the defendant herein, the American Woolen Company “ has an office for the transaction of business in this state,” a question which I think the language and context of the law require to be answered in the negative. The statute provides, in substance, that if a foreign corporation has an office in this state, it shall keep a certain book therein; and adds, that if any such foreign corporation, namely one having an office in this state, has a transfer agent also, it “ may,” at its option, deposit the stock book in the office of such agent. Plainly two offices are contemplated: the one which the foreign corporation has-, and the other the office of the agent.

The structure of the sentence points to the same conclusion. If the legislature had contemplated that every foreign corporation having merely a transfer office in this state should keep a stock book, the statute would have read: “ Every foreign stock corporation having an office, etc., in this state, and every foreign stock corporation having a transfer agent in this state, shall keep either in its own office or the office of such agent, respectively, such stock book, etc.”

Finally, I do not see how, without doing violence to the commonly accepted meaning of ordinary terms, the office of a trust company in this city with which the American Woolen Company has some administrative arrangement for exchanging stock certificates, can be denominated or regarded as the office of the American Woolen Company — whether for the transaction of business or otherwise. To have an office implies, in ordinary or in techanical parlance, to have that control of an office which an owner or lessee, or, at least, a common licensee, would exercise; and, in the case at bar, no such control is indicated or even supposable.

The judgment should be reversed, with costs, and the complaint dismissed, with costs.