Hovey v. De Long Hook & Eye Co.

• Decision Date: 02 June 1914
• Citation: 211 N.Y. 420,105 N.E. 667
• Parties: HOVEY v. DE LONG HOOK & EYE CO.
• Court: New York Court of Appeals Court of Appeals

211 N.Y. 420

105 N.E. 667

HOVEY

v.DE LONG HOOK & EYE CO.

Court of Appeals of New York.

June 2, 1914.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Le Roy F. Hovey against the De Long Hook & Eye Company. From a judgment of the Appellate Division, First Department (147 App. Div. 881,133 N. Y. Supp. 25), affirming a determination of the Appellate Term (126 N. Y. Supp. 1), which reversed a judgment of the Municipal Court of the City of New York, dismissing the complaint on the merits, defendant appeals by permission. Reversed, and judgment of the Municipal Court affirmed.

Charles E. Rushmore, of New York City, for appellant.

Lester S. Kafer, of New York City, for respondent.

HISCOCK, J.

The defendants is a foreign corporation organized under the laws of, and having its principal office and place of business in, the state of Pennsylvania. It rented an office in the city of New York for certain limited purposes, which will be hereafter described, and this action was brought to recover a penalty for its failure to keep at said office for inspection a book containing a list of its stockholders, in alleged violation of section 33 of the Stock Corporation Law (Cons. Laws, c. 59). Said Section, so far as material, reads as follows:

‘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, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, the number of shares of stock held by them respectively, the time when they respectively became the owners thereof, and the amount paid thereon. Such stock book shall be open daily, during business hours, for the inspection of its stockholders and judgment creditors, and any officer of the state authorized by law to investigate the affairs of any such corporation. * * * For any refusal to allow such book to be inspected, such corporation and the officer or agent so refusing shall each forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made.’

It is undisputed that the defendant did fail to keep such a book at its office in New York, and that said office was maintained for the ‘transaction of business' within the exact and literal meaning of the words employed in said statute, and if such meaning is to prevail the decision appealed from should be affirmed. It is, however, urged that said statute is one of several constituting an entire system for the supervision, regulation, and taxation of foreign corporations in some measure conducting business in this state; that its language is to be construed harmoniously with that employed in other statutes which are part of this system, and that when so construed is not to have the literal meaning which has thus far been attached to it, and thus is not to be interpreted as applying to corporations performing in this state the very limited acts in carrying on business which the defendant performed. The question thus arising requires for its disposition a somewhat detailed statement of what the defendant did do in the state of New York and a review of these other statutory provisions pertaining to the supervision and regulation of foreign corporations which it is urged throw light on the meaning of the one now before us for interpretation.

As has already been stated, the defendant was organized under the laws of the state of Pennsylvania, and in that state had its factory and general offices. It sold its goods in the state of New York through traveling salesmen, who took orders which were transmitted to the office in Pennsylvania subject to approval, and which, if accepted, were filled by shipment from the factory in said state. It rented the office in question in the city of New York, and while some general expressions were used on the trial concerning its nature and the position of the man who had charge of it, and while upon its door there was a sign giving the name of the defendant and the names of two individuals respectively as vice president and manager, the evidence shows without dispute that the office was kept there simply for the accommodation of traveling salesmen who made it their headquarters for the purposes of correspondence and meeting their customers. A small amount of cash was forwarded thither from the office in Pennsylvania which was used for buying postage, paying car fare, etc., and accounted for to the Pennsylvania office. The office was equipped with a stenographer, typewriter, and ordinary office furniture. No bank account was maintained in New York; no books of account or goods for sale were kept there, and no collections for goods sold were made from that office; no stock transfer books were kept there, and no meeting of stockholders, directors, or officers was ever held there. The entire arrangement may be fairly summarized as furnishing and constituting an headquarters for salesmen traveling in that locality where they might meet customers and conduct correspondence.

Without attempting for the moment either to differentiate or to interpret as meaning the same thing such expressions as ‘to do business' or ‘doing business' or ‘carrying on business' or ‘transacting business,’ the important provisions designed for the supervision and regulation of foreign corporations prosecuting business in this state are to be found in the General Corporation Law, the Stock Corporation Law, and the Tax Law. The first-mentioned statute, after providing amongst other things for the incorporation and acquisition of property by domestic corporations, takes up the subject of foreign corporations, and provides that ‘No foreign stock corporation other than a moneyed corporation, shall do business in this state without having first procured * * * a certificate that it has complied with all the requirements of law to authorize it to do business in this state’ (Cons. Laws, c. 23, § 15); that no foreign stock corporation ‘doing business in this state’ shall maintain any action in this state upon any contract made by it in this state without having procured such certificate; that before obtaining such certificate a copy of its charter or certificate and a statement must be filed setting forth the business or objects of the corporation ‘which it is engaged in carrying on, or which it proposes to carry on within the state,’ and specifying a place within the state which is to be its principal place of business.

The Stock Corporation Law (Cons. Laws, c. 59), outside of the section now directly under review,...