Case Name: ALTHAUSE v. GUARANTY TRUST CO. OF NEW YORK
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1912-11-08
Citations: 137 N.Y.S. 945
Docket Number: 
Parties: ALTHAUSE v. GUARANTY TRUST CO. OF NEW YORK.
Judges: 
Reporter: West's New York Supplement
Volume: 137
Pages: 945–949

Head Matter:
(78 Misc. Rep. 181.)
ALTHAUSE v. GUARANTY TRUST CO. OF NEW YORK.
(Supreme Court, Appellate Term, First Department.
November 8, 1912.)
1. Cobpobations (§ 650*)—Foreign Stock Cobpobations—Stockbooks.
Stock Corporation Law (Consol. Laws 1909, c. 59) § 33, providing that every foreign corporation having an office for the transaction of business in this state shall keep therein a book, to be known as a “stoekbook,” which shall be open daily for the inspection of stockholders, and, if any such foreign corporation has in this state a transfer agent, such stock-book may be deposited in the office of such agent, imposes no obligation upon a foreign stock corporation which merely transacts business in this state, but only on one “having an office for the transaction of business in this state.”
[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 2517, 2573; Dec. Dig. 650.*]
2. Cobpobations (§ 650*)—Foreign Stock Cobpobations—Stockbooks—“Office fob the Transaction of Business.”
A foreign stock corporation, leaving its blank stock certificates and its stoekbook with a trust company in this state, which acted as a transfer agent, cannot be said to have an “office for the transaction of business” in this state, within Stock Corporation Law (Consol. Laws 1909, c. 59) § 33, providing that every foreign corporation having an office for the transaction of business in this state shall keep therein a stoekbook, and that, if any such foreign stock corporation has in this state a transfer agent, such stoekbook may be deposited in the office of such .agent, for inspection of stockholders.
[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 2517, 2573; Dec. Dig. § 650.*]
3. Words and Phrases—“Office."
To have an “office,” in ordinary or technical parlance, implies to have that control of an office which an owner or lessee, or at least a licensee, would exercise.
[Ed. Note.—For other definitions, see Words and Phrases, vol. 6, pp. 4921-4931; vol. 8, p. 7736.]
Guy, J., dissenting.
•For other cases see same topic & i number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
Appeal from Municipal Court, Borough of the Bronx, Second District.
Action by Walter Althause against the Guaranty Trust Company of New York. Judgment for plaintiff for the penalty provided by Stock Corporation Law, § 33, and defendant appeals.
Reversed.
Argued October term, 1912, before SEABURY, GUY, and BI-JUR, JJ.
Davies, Auerbach, Cornell & Barry, of New York City (Julien T. Davies, of Great River, and Herbert Barry, of New York City, of counsel), for appellant.
James A. Allen, of New York City, for respondent.

Opinion:
BIJUR, J.
There is no dispute as to the facts involved in this case. The American Woolen Company is a New Jersey corporation, having its main office, where it keeps all its books, including its ultimate stock transfer book, in the state of New Jersey. It has no office in the state of New York, and so far . as appears dogs 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 New Jersey office. The transfer agent has a so-called stockbook of the Woolen Company, which contains an alphabetical list of stockholders, their place of residence, 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 (Consol. Laws 1909, c. 59) as applied to this situation. The statute, so far as involved here, reads:
"Every foreign 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 stockbook. Such stockbook shall be open daily * . for the inspection of its stockholders. If any such, foreign 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. Montana & Boston Co., 40 Misc. Rep. 282, 81 N. Y. Supp. 974. On the other hand, a contrary view is indicated in Honeyman v. Col. F. & I. Co. (C. C.) 133 Fed. 96, and Union Trust Co. of Rochester v. Sickels, 125 App. Div. 105, 109 N. Y. Supp. 262. _
_ 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. De Long Hook & Eye Co., 147 App. Div. 881, 133 N. Y. Supp. 25, 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.
The real question, therefore, is whether, through leaving its blank stock certificates and its stockbook 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 requires 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 stockbook 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 stockbook, 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 stockbook," 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 technical 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.