Court Opinion

ID: 5413862
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:13:48.612104+00
Date Added: 2024-06-11T08:30:55.419248
License: Public Domain

Guy, J. (dissenting).
Plaintiff sues as a stockholder of a foreign corporation to recover the penalty provided by section 33 of the Stock Corporation Law for refusing to permit *186a stockholder to inspect the stock book of a foreign corporation deposited in this state, pursuant to the provisions of said law.
The foreign corporation in question is the American Woolen Company, a Hew Jersey corporation, of which plaintiff was admittedly a stockholder at the time when he demanded an inspection. There is no proof that said company has an office in this state for the transaction of other business, or does actually transact other business within the state, than as connected with the transfer of its shares of stock through the defendant, its transfer agent. The method followed in connection with such transfers is that' the American Woolen Company delivers to the defendant certificates of stock duly executed in blank, which the defendant, in turn, delivers to persons who surrender an equivalent amount of old certificates properly indorsed, the actual entry of the transfer of stock being subsequently made at the office of the American Woolen Company in Hew Jersey.
The issue raised upon this appeal is the construction of section 33 of the Stock Corporation Law, which, so far as it is applicable to the present case, provides as follows: “ Every foreign corporation having an office for the transaction of business in this state * * * 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 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; and the act prescribes a penalty of $250 for refusal to exhibit the book upon demand during business hours.
It is contended by the defendant-appellant that the having an office for the transfer of stock in this state does not bring the foreign corporation within the meaning of the statute, and it cites in support of.this contention several decisions of the federal courts holding that such an office would not constitute doing business within the state to an extent which would subject such corporation to service of process here. But section 33 is not made applicable merely to foreign cor*187porations doing business within the state; it applies to all such corporations having an office for the transaction of business in the state, and directs that they shall keep a stock book in such office. The statute further provides, as an alternative, that any such foreign corporation having a transfer agent in this state, may deposit the stock book with the transfer. agent, and that such book shall be “ open for inspection,” meaning thereby that .when such stock book shall have been deposited by a foreign corporation with its transfer agent in this state, such book shall be deemed to have been so deposited pursuant to the provisions of the statute, and shall be open to inspection, and that the custodians thereof shall be liable under the penalty prescribed in the statute for a refusal to permit its inspection by a stockholder upon proper demand.
One of the purposes of the statute is to protect the rights of residents of this state, who are stockholders of foreign corporations, wherever such foreign corporations can be brought within the jurisdiction of this state, to the same extent that our laws protect stockholders of domestic corporations.
The business to which the statute refers is not merely general business, such as is contemplated by other provisions of our laws relating to taxation and the doing of business within the state by foreign corporations, but such business as is customarily transacted either directly or through transfer agents, between foreign corporations and resident stockholders thereof, such as the surrender by the stockholders of old certificates and receiving new certificates in lieu thereof. The fact that the actual transfer is entered upon the books of the corporation subsequently in a foreign state is immaterial. The business of the transfer is transacted here, and the transfer agent’s office is an office established by the corporation for the transaction of such business within the meaning and purpose of the statute. In this case the foreign corporation has recognized its duty by actually depositing a stock book with its transfer agent, and the statute directs the custodian of such book, so deposited by the corporation in obedience to the statute, or by reason of the *188permissive provisions of the statute, to keep it open for inspection by stockholders. The corporation having availed itself of the permission of the statute and brought itself voluntarily within the jurisdiction of the state for that purpose, it does not lie with the custodian of such book to question the statute.
In Miles v. Montreal & Boston Copper Co., 40 Misc. Rep. 282, 285, in a learned opinion by Mr. Justice Leventritt, this court bas decided that the having of a transfer agent within the state for the purpose of accepting the surrender of old certificates and the issuance of new certificates is having an office for the transaction of business within the meaning of the statute; and I entirely concur in that opinion. But, irrespective of that, the book is now within the jurisdiction of this state, having been deposited by the foreign corporation in a place designated by the statute, and is, in the hands of the custodian thereof, subject to the provisions of the statute.
The defendant, therefore, having, by refusal to obey the statute, rendered itself liable for the penalty prescribed thereunder, the judgment appealed from should be affirmed with costs.
Judgment reversed, with costs, and complaint dismissed, with costs.