._! — , — a _i-. OlnrttfU ICam ^rljaal Etbrarg Cornell University Library I ' KFN5347.M2S A treatise on the law of foreign .busines 3 1924 021 907 047 U^^^-jiu:^ut7 o^jt; cw^ttt^ /6 "lA/iua ^JLQkjo^ jJ^ c^ Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924021907047 A. TREATISE ON THE T^AJ^ OF FOREIGN BUSINESS CORPORATIONS DOING BUSINESS IN THE STATE OF NEW YORK By JOHN HENRY MANN BANKS & COMPANY, ALBANY, N. Y. 1906. B 79'V/^ Copyright, 1906. By banks & COMPANY. PREFA^CE. The large number of corporations of ISTew Jersey, Connecticut, West Virginia, Delaware, Maine, and other states, doing business in this state, is my apology for the publication of this book. It treats, in particular, of the New York statutes and the decisions of the !N"ew York and federal courts affectipg trading and manufac- turing corporations of other states and foreign countries doing business in this state. In the statutes of this state, and of many other states, trading and manufacturing corporations are called business corporations, whence my use of the latter term. This book covers all private stock corporations other than railroad, transporta- tion, insurance and banking corporations. The attempt has been made to exhaust topics peculiar to foreign business corporations so far as the New York statutes and decisions are concerned. Topics common to domestic and foreign business corporations have been treated only in their special application to foreign business corporations as such. A single exception to this is taxation, the chapters on General Tax and Franchise Tax applying to domestic as well as to foreign business corporations. J. H. M. 'New York City, October, 1905. CONTE:NrTS. PART I. Statdtoky Conbitions of Doing Business in this State, in- cluding Taxation. CHAPTER I. Introduction. Page. § 1. Foreign corporation 1 § 2. Corporation of two states 2 § 3. De facto, migratory, pretended and defunct corporations. 4. ' CHAPTER II. Comity. § 4. May contract and may sue and be sued in this state 7 § 5. Policy of this state 8 CHAPTER III. Doing Business in New Yoijk. „ 6. New York statutes 10 § 7. Property interests. Federal employment. Interstate commerce. 12 § 8. Charter purpose 15 § 9. Single transaction 18 § 10. Certificate to dobusiness here 18 § 11. Wareroom. Storage room. Sales-room 19 § 12. Obtaining fire insurance. Taking promissory notes. Special partnership. Contractor. Trusteeship. Listing bonds. Organizing domestic corporation and licensing machines to it. . 22 § 13. Locus contractus 23 I 14. Contracts by mail and telegraph 25 i 15. Commercial travelers and canvassers 26 § 16. Commission merchants. Agents. Factors. Brokers 27 § 17. Withdrawal from the state 28 (V) vi Contents. CHAPTER IV. Peeeeqtjisites of Doing Bushstess in this State : Page. § 18. Certificate of authority and license tax; 30 § 19. Monied corporations excepted 31 § 20. Lawful purpose. Copy charter. Agent to receive process 33 § 21. License tax. Other taxation . 34 § 22. Removal of causes to federal court 37 § 23. Statutes are in derogation of the common lav?. Constitutionality. Vested rights 38 § 24. EiTect of obtaining a certificate and paying the license tax 40 § 2.5. Eff'ect of omitting to obtain a certificate and to pay tlie license tax 42 § 26. Id. ; contracts, valid, void or voidable 44 § 27. Id.; cannot maintain an action or have any recovery in court. ... 46 § 28. Id. ; assignees 48 § 29. Id. ; suit in federal court 49 § 30. Pleading compliance with statutory requirements 49 CHAPTER V. Genebal Tax. § 31. Definition 52 § 32. Real property 52 § 33. Tax on capital stock. Place of taxation 53 § 34. Statement by corporation 54 § 35. Method of assessment 56 § 36. Old method of assessing capital stock 58 § 37. Present method of assessing capital stock 60 § 38. Taxable personal property 61 § 39. Surplus, etc., excepted. Exempt property 68 § 40. Adding surplus exceeding ten per centum of capital 68 § 41. Deducting assessed value of real property 69 § 42. Deducting stock of taxable corporations. 70 § 43. Deducting debts 71 § 44. Grievance day 74 § 45. Grievance day in the city of Xew York 75 § 46. Form of application to assessors. Jurisdiction of subject matter. Failure to make statement to assessors 76 § 47. Burden of proof. EflFect of statement by corporation 77 § 48. Effect of testimony ; of refusal to answer questions 79 § 49. Second application to assessors. Change in assessment without an application. Commissioners may remit or reduce tax 80 § 50. Certiorari 81 § 51. Illegality. Over-valuation 84 § 52. Inequality 85 § 53. Second certiorari 87 Contents. vii Page. § 54. Petition for certiorari '. 87 § 55. Presenting petition 88 § 56. The writ. The return 90 § 57. Hearing at Special Term; reference 92 § 58. Costs 96 § 59. Appeal to Appellate Division 97 § 60. Appeal to Court of Appeals 97 § 61. Replevin. Trespass. Injunction. Mandamps. Action to recover back. .....; 100 CHAPTER VI. Fean-chise Tax. I 62. Definition and nature of franchise tax : 102 § 63. Corporations exempt from franchise tax 103 § 64. Report by corporation. Investigation by comptroller 107 § 65. Tax when dividends amount to six per centum or more 109 § 66. Tax when dividends amount to less than six per centum 110 § 67. Tax when no dividend is made or declared 112 § 68. Tax where the corporation has different kiiids of stock 113 § 69. Capital defined 114 § 70. Employed in this state 117 § 71. Assessing franchise tax 121 § 72. Notification of tax. Revision by comptroller 127 § 73. Certiorari 128 § 74. Hearing at Appellate Division. Appeal to Court of Appeals 131 § 75. When payable. Penalties. Interest. Lien 134 § 76. Warrant to collect tax 135 § 77. Action to recover tax or to annul franchise 135 § 78. Informer 136 § 79. Exemption from other state tax 136 CHAPTER VII. Miscellaneous Taxes. § 80. Highway tax. Village tax. School tax 138 § 81. Organization tax on domestic corporations 138 I 82. Liquor tax 138 § 83. Transfer tax 139 § 83a. Stock transfer tax ■ 140 viii Contents. PART II. PowEES ANB Liabilities. CHAPTER VIII. Stattjtoey Regulations. Page. 84. What statutes control 141 85. Statutes of this state. Tax exemptions ; 142 CHAPTER IX. Name.. Seal. Books. 86. Name 145 87. Seal : 147 88. Books of account 147 CHAPTER X. Capital Stock. i 89. What statutes control 149 i 90. Certificates 149 i 91. Subscriptions to stock 150 ! 92. Subject to charter and to constitution and statutes of home state. 151 i 93. Transfer of stock 152 i 94. Illegal stock 153 ! 95. Exchanging stock on merger. Retiring stock. Investments in stock. Attachment of stock. Taxation of stock 155 i 96. Dividends .' 156 CHAPTER XI. CoEPOEATE Meetings. i 97. Place 158 i 98. Voting. Reviewing meetings 158 j 99. Effect of meetings and elections 159 CHAPTER XII. Exhibiting Stock Book. 100. Statutory requirement 161 101. Application of statute 162 102. Demand and refusal 163 103. Mandamus. Penalty. Misdemeanor 164 Content's. ix CHAPTEE. XIII. Teansfse of Franchise and Assets. Page. 104. Merger 166 105. Sale of franchise and pl'opei'ty 166 106. Transfer of assets. 168 CHAPTER XIV. Peohibitoey Statutes. § 107. Prohibited acts 169 § 108. Banking powers 169 § 109. Trust company powers. Power to loan money 170 § 110. Construction of prohibitory statutes 171 § 111. Prohibition against doing business 173 § 112. Prohibition against doing business; federal decisions 174 CHAPTER XV. Monopolies. 113. Anti-monopoly statutes 178 CHAPTER XVI. Ceiminal Laws. 114. Prospectus. Stock. Bond. Instrument. Document. Name 180 115. Dividends. Stock. Waste. Books. Injunction. Proxy.'. 181 116. Insurance. Perjury. Bill of lading 182 117. Forgery - • • 1^3 118. Employes. Special business 185 119. Punishment. Procedure 185 CHAPTER XVII. LlABILITT OF StOCKHOLDEES AND PeOMOTEES FOE AsSETS DiVEETED TO ThBM. 120. Stockholders 187 121. Promoters 189 X Contents. CHAPTER XVIII. Stockhomtbes' Liability for Subsceiptions, Calls and As- sessments. Page. § 122. Statute liability 190 § 123. Contract liability 191 § 124. Levy of attachment upon subscription 193 § 125. Full paid stock 194 CHAPTER XIX. Stockholdees' Additional Liability. § 126. Statutes 195 § 127. Enforcing statute of the home state 195 § 128. Common law remedy 197 § 129. Decisions under Kansas constitution and statutes 198 § 130. Decisions under Washington statute 200 § 131. Decisions under Ohio and Minnesota statutes 202 § 132. Consolidation. Defective incorporation. Subrogation. Limita- tions 204 CHAPTER XX. Unauthoeized Dividends. § 133. Statutes of this state 205 § 134. Liability of directors 206 CHAPTER XXI. Excessive Indebtedness. § 135. Statute repealed 208 CLLVPTER XXIL Loans to Stock holdees. § 136. Liability of officers and directors 209 CHAPTER XXIII. Annual Report. § 137. Statutes of this state 210 § 138. Statutes of the home state , 211 Contents. xi CHAPTER XXIV. False Ceetifioate, Report and Public Notice. Page. § 139. Liability of officers and directors 213 CHAPTER XXV. Assignments. Insolvent Teanspees. I 140. Liability for insolvent transfers 215 § 141. Other effects 217 § 142. Assignment made in this state 217 § 143. Assignment made in the home state 219 § 144. Assignment of chose in action 223 CHAPTER XXVI. Labok Laws. § 145. Statutes 224 CHAPTER XXVII. Contracts. § 146. Corporate power 225 § 147. Ultra vires 226 § 148. Other party chargeable with notice 228 § 149. Lex loci 229 § 150. Contracts made here . ■ '. 230 § 151. Power of officers and agents 231 § 152. Effect of consolidation. Contrast for preference. Rescission of contract - 233 CHAPTER XXVIII. Holding Real Property. 153. Corporate power 234 154. By deed or contract or for debt 235 155. Corporation not doing business here. Corporation doing business here without a certificate. Alien corporation. Deed in trust. Acknowledgments , 236 xii Contents. CHAPTER XXIX. Devise and Bequest. Page. § 156. Validity 238 CHAPTER XXX. Mortgages. § 157. Property here 240 § 158. Property out of this state 242 § 159. Malum prohibitum. Foreclosure by advertisement. Bonds 242 PART III. Suits By and Against. CHAPTER XXXI. Action by a Foreign Coepoeation. 160. Power to sue 245 161. Assigned claim , 246 CHAPTER XXXII. Action Against a Foreign Corporation. 162. By a resident 247 163. Assigned claim. Resident executor. Change of residence. Proof. 249 164. By a non-reaident 251 165. Constitutionality of section 1780, Code Civil Procedure 253 166. Contracts made here 256 167. Cause of action arising here ; 257 168. Laches. Title to foreign real property. Alien corporation 260 169. Affirmative defense 261 Contents. xiii CHAPTER XXXIII. Service of Process. Page. 170. Common law. Old code 264 171. Present statute 265 172. Federal court. Equity. Admiralty 266 173. Effect of appointment of receiver ; of an appearance; of pleading; of doing business in this state 268 174. Designation of an agent upon whom to serve process 269 175. Id.; designation out of New York 273 176. Service on cashier, director or managing agent : 275 177. Managing agent 277 178. Managing agent; federal decisions 281 179. Resignation 286 180. Temporarily in the state 287 181. Temporarily in the state; federal court 288 182. Affidavit of service. Motion to set service aside 290 183. Proof of service in federal court 292 184. Substituted service of process 292 CHAPTER XXXIV. Allegation of Incobpoeation. I 185. In state court 295 § 186. In federal court 296 § 187. Sufficient allegation 296 § 188. Pleading nul tiel corporation 297 § 189. Proving incorporation 298 CHAPTER XXXV. Practice Provisions. § 190. Action in name of real party in interest 300 § 191. Suit after dissolution 300 § 192. Venue 301 § 193. Verification of pleadings 303 § 194. Misnomer 303 § 195. Security for costs 304 § 196. Bill of particulars 305 § 197. Preference on court calendar 305 § 198. Evidence. Books as evidence 305 § 199. Discovery of books and papers 306 § 200. Abatement 307 § 201. Intervening. Suppplemental summons 309 xiv Contents. CHAPTER XXXVI. Defences. Page. § 202. Form of defence 310 § 203. Usury. Section 1780, Code Civil Procedure. Section 181, Tax Law. Section 15, General Corporation Law 311 § 204. Corporate power to contract 312 § 205. Statute of limitations of this state 313 § 206. Limitation of action for personal liability of stockholders; for damages for death by negligence; for taxes 314 § 207. Foreign statute of limitations 316 CHAPTER XXXVII. Attachment. § 208. Statutes of this state. Admiralty 317 § 209. Affidavit for attachment 317 § 210. Effect of section 1780, Code Civil Procedure 31ft § 211. Effect of section 15, General Corporation L^w, and' section 181, Tax Law 320 § 212. Levy of attachment 321 § 213. Attachment against property of a third party 323 § 214. Effect of assignment for creditors 324 § 215. Effect of receivership 324 § 216. Effect of general tax 326 § 217. Motion to vacate attachment. Defeating attachment 326 § 218. Action in aid of attachment 327 § 219. Attachment as ground for receivership. Restraining attachment in another state 329 CHAPTER XXXVIII. Special State Couets. § 220. City Court of the city of New York 330 § 221. Municipal Court of the city of New York 331 § 222. Justices Court 333 CHAPTER XXXIX. Fedeeae Cotjets. i 223. Jurisdiction 334 § 224. Assigned claim 335 I 225. Effect of state restrictions on actions and recoveries 336 § 226. Federal limitations on jurisdiction 337 Contents. xv Page. § 227. Suit by a resident; by another foreign corporation 338 § 228. Suit against an alien corporation 340 § 229. Corporation of two states 341 § 230. Patent and trade mark eases 342 § 231. Removal of actions to federal court 343 CHAPTER XL. Special Actions and Peoceedings. § 232. Action for a penalty 346 § 233. Action on note or evidence of debt 346 § 234. Supplementary proceedings 347 § 235. Depositions taken within the state for use without the state 349 PART IV. Visitoeial Jueisdiction of the Courts of this State^ and Heeein of Injunctions and Receivees. CHAPTER XLI. Visitoeial Jueisdiction, i 236. General rule 351 237. Winding up 352 ! 238. Recent cases of visitation 353 i 239. Action against directors or ofBcers for misfeasance 354 i 240. Id. ; its application to a foreign corporation 356 241. Action for sequestration 357 242. Action to dissolve a corporation and to forfeit its franchises 358 243. Action to annul act of incorporation or to vacate charter 358 244. Action to restrain the usurping of a franchise 359 245. Voluntary dissolution. Repeal of charter 360 CHAPTER XLII. Injunction. 246. Internal management 361 247. Enjoining general business 362 248. Enjoining fraud, waste, breach of contract and illegal acts 363 249. Injunction by a foreign corporation 365 Xvi - XIJ^ONTENTS. CHAPTER XLIII, Receivees. Page. 1 250. Receiver appointed in the home state 367 § 251. Action by a receiver appointed in the home state; by the corpora- tion after his appointment 368 § 252. Action against a receiver appointed in the home state; against the corporation after his appointment 370 § 253. Receiver appointed in this state 372 § 254. Constitutionality of section 1810, Code Civil Procedure. Re- ceiver prior to Code Civil Procedure 373 § 255. Receiver under Code Civil Procedure 375 § 256. Effect of injunction in the home state. Notice to attorney- general 376 § 257. Effect of section 1780, Code of Civil Procedure. Effect of section 15, General Corporation Law 377 § 258, Federal court receiver 377 § 259. Power of ancillary receiver. Turning over assets 378 § 260. Liens on local assets 379 APPENDIX. Selected sections from the following New York statutes L. 1877, ch. 311. Evidence 385 L. 1892, eh. 687. General Corporation Law 385 L. 1892, ch. 688. Stock Corporation Law 389 L. 1892, ch. 689. Banking Law 398 L. 1896, ch. 547. Real Property Law 401 L. 1896, ch. 908. Tax Law 402 L. 1897, ch. 415. Labor Law 430 L. 1897, ch. 417. Personal Property Law 432 L. 1899, ch. 690. Monopolies 433 L. 1899, ch. 727. Monopolies 430 L. 1901, ch. 406. Greater New York Charter 438 Code of Criminal Procedure 445 Penal Code 448 Code of Civil Procedure 464 TAJELTE OF Ci^SES. Page. Aeken v. Coughlin 357^ 362, 372 Adams v. Lamson, C. S. S. Co 295 Adams v. Penn Bank of P 252, 255 Adams Ex. Co. v. Kentucky ■ 53 Adams Ex. Co. v. Ohio St. Auditor 53 Adler Bros. & Co., matter of 95 Adler v. Order A. M. C. B. C 320 Ahrend v. Imperial C. & C. Co 349 Akin-Lambert & Co. v. Haskins 13 Allen y. Pullman P. C. Co 15 Allen V. United C. S. Co 323 Allgeyer v. State of iLouisiana 40, 226 Alsing Co. V. New England Q. & S. Co 31, 47 Alward v. Holmes 236 American Audit Co. v. Industrial Federation 303, 310, 318 American Baptist H. M. Society v. Foote 297 American B. & B. Co. v. Addickes 26, 47 American Colortype Co. v. Continental C. Co 336 American Contractor P. Co. v. Bagge 27 American Freehold L. M. Co. v. Woodworth 198, 199 American Harrow Co. v. Shaffer 21 American Locomotive Co. v. Dickson M. Co 29, 287 American Loan & T. Co. v. East & W. E. Co 18, 23, 176 American Tartar Co. v American T. Co 43, 146 American Typefounders Co. v. Conner 47 American Waterworks Co. v. Venner 329, 366 American Waterworks Co. v. Farmers L. & T. Co 7, 240 Amherst College v. Ritch 239 Anderson v. Haddon 193 Angerhoefer v. Bradstreet Co 1 267 Anglo-American P. Co. v. Davis P. Co 255, 258 Ansonia Brass Co. v. Conner 296 Antelope Co. v. Chicago B. cfe Q. E. Co 341 Ashley v. Quintard 42, 271 Ashley v. Eyan 36, 138 Atlantic & P. Tel. Co. v. Baltimore & O. R. Co 261, 288, 365 Atlantic & P. Tel. Co. v. Philadelphia 102 Atlantic Con. Co. v. Kreusler 47, 207 (xvii) xviii Table of Cases. Page. Atlantic Trust Co. v. Osgood 199 Audenried v. East C. M. Co 18 Aultman M. Co. v. Holder 26 Ayres v. Western R. R. Corp 336 Babcock v. Schuylkill & L. V. Ry. Co 233, 249 Bacon v. Abbey Press 327 Ball V. Warrington 198, 199 Balleis, Matter of 139, 144 Baltimore & O. R. R. Co. v. Koontz 8 Bank of Augusta v. Earle 7 Bank of California v. Collins 226 Bank of China, J. T. S. L. v. Morse 192 r Bank of Commerce v. Rutland & W. R. R. Co 259 Bank of Montreal v. Fidelity Nat. Bank 309 Bank of Toledo v. International Bank 4 Barclay v. Quicksilver M. Co 369 Barclay v. Talman 352 Bard v. Chamberlain 312 Bard v. Poole 6, 8, 172 Barker v. Cunard S. S. Co 251 Barnes v. Mobile & N. W. R. R. Co 276 Barnes v. Western U. T. Co 267, 338 Barnes v. Wheaton 202 Barnstt v. Chicago & L. H. R. R. Co 265, 288 Barrett v. American T. & T. Co 281 Barron v. Burnside 37 Barrowcliffe v. LaCaisse Generale 340 Barrow S. S. Co. v. Kane 261, 271, 286, 340 Barth v. Backus 221 Bartlett v. Drew 187, 188, 191 Batchelder & L. Co. v. Knopf 47 Bates V. New Orleans J. G. N. R. R. Co 264 Bath G. L. Co. v. Claffy 228 Bath G. L. Co. v. Rowland 228 Bedford v. Eastern B. & L. Asso 40, 48 Bell V. Lycoming Ins. Co 345 Belmont v. Sigua Iron Co 327 Belseda C. M. Co. v. Liberty D. Co 51 Bengston v. Thingvalla S. S. Co 298 Bennett v. Hartford F. Ins. Co 254 Bentlif v. London C . F . Corp 290 Berford v. New York I. Mine 157^ 352 Bertha Z. & M. Co. v. Clute 27 Birch V. Mutual R. L. Ins. Co 29, 274 Bird V. Hayden 211 Bischoff V. Automobile T. Co 43 > Table of Cases. xix Page. Bishop, Matter of , 139 Bissell V. Michigan S. & N. I. R. R. Co 226 Black V. Caldwell 38, 175 Blackburn v. Selma M. & M. R. Co 2, 3, 242, 335, 337 Blake v. McClung 381 Block V. Atchison, T. & S. P. R. R. Co 24 Blodgett V. Lanyon Z. Co 49, 174, 235 Blood V. Smith 216 Boaidman v. Lake Shore & M. S. R. Co 314 Boardman v. S. S. McClure & Co 27, 284 Boaz V. Sterlingsworth R. S. Co 364 Bogert V. Otto G. E. Works 293 Bolles V. Lehigh V. R. R. Co 335 Boston B. B. Asso. v. Brooklyn B. B. Club 245 Boston M. M. F. Ins. Co. v. Hendricks 22 Box B. & L. Co. V. Vincennes P. Co 47, 49, 318 Boyle V. Southern Ry. Co 248 Bragdon v. Perkins-Campbell Co 290, 292 Brayton v. New York, L. E. & W. R. R. Co 281 Brewster v. Michigan C. R. R. Co 265, 280 Briggs V. Spaulding 286 Brinckerhoff v. Bostwick 357 Brisco V. Minah CM. Co 271 British C. L. Ins. Co. v. Commissioners 53, 54, 68 Broadway & S. A. Ry. Co., Matter of 298 Brookman v. Mechanics' Sav. Bank 200 Brooks V. Mexican Con. Co 252 Brooks V. Mexican N. C. Co 252 Brooks V. New York & G. L. R. R. Co 253 Brown v. Travellers' L. & A. Ins. Co 262 Brunswick T. Co. v. National Bank 315 Brush C. C. & M. Co. v. Morgan-Gardner E. Co 288 Bucki & S. L. Co. v. Atlantic L. Co 301 Buckley v. Harrison '. 378 Buell V. Baltimore & O. S. W. Ry. Co 287, 365 Bullock, Matter of 238 Bump V. New York, N. H. & H. R. R. Co 250 Burckle v. Eckhart 257 Burgoyne v. Eastern & W. Ry. Co 358 Burns v. Provincial Ins. Co 257 Burr V. Smith 202 ■Cable V. United States L. Ins. Co 38, 39 Cady V. Associated Colonies 28, 42, 269, 271, 272, 273, 334, 339 Csesar v. Capell 18. 229 ■Caldwell v. North Carolina 22 Caldwell & S. Co. v. Stillwell B. & S. Co 262, 319 XX Table of Cases. Page. Caledonian Coal Co. v. Baker 288 Camden & A. R. E. T. Co. v. Remer 312 Campbell v. Champlain & St. L. R. R 258 Campbell v. Texas C. R. R. Co 2ti2. Canada S. R. R. Co. v. Gebhard 229 Cantwell v. Dubuque W. R. R. Co 25S Card V. Moore 5 Carling v. Purcell 206 Carnaghan v. Exporters & P. 0. Co 287 Carpenter v. Westinghouse A-B. Co 15, 283 Carpentier v. Minturn 253 Casserly v. Manners 174, 216 Cathedral of Incarnation, Matter of 87, 88 Center v. Hoosick E. P. Co 347 Central G. S. E. H. v. Board of Trade 292 Central Trust Co. v. McGeorge 337, 378 Chamberlain v. Chamberlain 239 Chambers v. Feron & B. Co 252 Charles Roome Parmele Co. v. Haas 45, 50, 320' Chattanooga N. B. & L. Asso. v. Denson 15, 49, 176 Chattanooga R. C. R. R. Co. v. Evans 40, 44 Chesapeake C. Co. v. Mengis 316 Chicago M. & St. P. R. R. Co. v. Becker 37 Childs V. Harris Mfg. Co 259, 276 Christensen v. Eno 192 Christensen v . Quintard 191 Christian Union v . Yount 235 Ckristie v. Davis C. C. Co 268 Citizens' Sav. Bank of S. v. The Mayor 101 City of New York v. Union Ry. Co , 304 City Trust S. D. S. Co. v. Wilson Mfg. Co 51, 313 Clark V. Hydrogen Co 347 Clarke v. Central R. R. & B. Co ) 8 Clarke v. New Jersey S. N. Co 317 Clegg V. Cramer 295 Cleveland L. & W. R. Co v. Kent 202 Clews V. Rockford, R. I. & St. L. R. R. Co 159, 278 Clews V. Woodstock Iron Co 18, 23, 290 Clokey v. International E. C. & G. S. Co 168 Coffin v. Chicago N. P. C. Co 248 Coler v. Pittsburg B. Co. 277, 278 Colorado State Bank v. Gallagher 246, 251 Commercial Bank of K. v. Pf ieffer 4 Commercial W. & C. Co. v. Northampton P. 0. Co 18 Comstoek, Matter of 177 Conley v. Mathieson A. Works 23, 289, 290 Connecticut M. L. Ins. Co. v. Cleveland, C. & C. R. R. Co 260 Table oi' Cases. xxi Page. Connecticut M. L. Ins. Co. v. Spratley 29, 38, 39, 271, 284, 288 Considerant v. Brisbane 300 Continental W-P. Co. v. Lewis V. & S. Co 286, 334, 344 Converse v. Stewart ; 202, 203 Cook V. Williams 231 Coolidge V. American Realty Co 254, 256, 320 Cooper V. Brazelton 280 Cooper Mfg Co. v. Ferguson 18, 26 Copeland v. Memphis & C. R. Co 2, 3, 345 Corry v. Mayor C. B 15 Corwin, Matter of 82, 89, 90, 129 Coulter V. Weir 53 Cowell V . Springs Co 8, 235 Cox V. Island M. Co 162, 163, 165 Cox V. Paul 165 Crefeld Mills v. Goddard 45 Creteau v. Foote & T. G. Co 22 Crichton v. Columbia Ins. Co 51 Crocker v. Muller 27 Crosby, Matter of 148, 352 Cross V. Anglo-American B. Co 231 Crowley v. Royal E. S. Co 252 Cumberland C. & I. Co. v. Hoffman S. C. Co 261 Cummer L. Co. v. Associated M. M. F. Ins. Co 22, 26 Curtis V. Natalie A. C. Co 227, 232 Dart V Farmers' Bank of B 268 Davies, Matter of 178 Davis V. Kansas & T. C. Co 273 Davis V. Mills 212 Davis P. Co. V. Fowler Brothers, Ltd 45 Davis cfe R. B. & M. Co. v. Di?; 27 Dawson v. Horan 206 Dearing v. McKinnon D. & H. Co 222 De Bemer v. Drew 349 Debevoise v. New York, L. E. & W. R. R. Co 248 Decker, Matter of '56 De la Vergne R. M. Co. v. German Sav. Institution 227 Delaware & A. T. & T. Co. v. Pensauken Township 44 Delaware & H: C. Co. v. Atkins 84, 85 Delaware, L. & W. R. R. Co. v. New York, S. & W. R. R. Co. . . . 258, 262, 363 De Maio v. Standard Oil Co 147, 299 Demarest v. Flack 5, 9 Dennistoun v. New York & N. H. R. R. Co 4 Dentz L. Co. v. International R. Co 297 Denver & R. G. R. R. Co. v. Roller 24, 282 Derham v. Lee 306 xxii Table of Cases. Page. Devere v. Delaware, L. & W. R. K. Co 282 Dexter v. Edmands 198 Diamond G. Co. v. United States G. Co 13, 39, 176 Diamond Match Co. v. Roeber 178 Dickinson v. Continental Trust Co 172, 227 Dickinson v. Edwards 229 Direct U. S. Cable Co. v. Dominion Tel. Co 258 Dittman, Matter of 350 Doe V. Springfield B. & M. Co 28, 282 Doherty v. Evening J. Asso 258, 275, 280 Donadi v. New York S. M. L. Ins. Co 291 Doty V. Michigan C. R. R. Co 25, 278 Dougan v. Evansville & T. H. R. R. Co 313 Doyle V. Continental Ins. Co ' 37, 38 Draper v. President & F. of H. C 238, 239 Dreyfus & Co. v. Charles Seale & Co 352, 358, 375 Dry Dock, E. B. & B. Ry. Co. v. North & E. R. Ry. Co 297 Ducat V. Chicago 39 Deuber W. C. Mfg. Co. v. Keystone W. C. Co 305 Duer V. Small 53 Dunbarton F. S. Co. v. Greenwich & J. Ry. Co 47 Dundee M. & T. I. Co. v. Hughes 301 Dunn V. Howe • 191, 222 Dupignac v. Bernstrom 157 Duquesne Club of P. v. Penn. Bank 252, 255 Eagle Works v. Churchill 299, 311 Earle v. Chesapeake & O. Ry. Co 24, 292 East River E. L. Co. v. Clark 297 Eastern B. & L. Asso. v. Bedford 49, 174, 176 Eggleston v. Orange & A. R. R. Co 252 Eirieh v. Donnelly Con. Co 23 Eisenhofer v. New Yorker Z. P. & P. Co 277 Electric News & M. T. Co v. Perry 44 Elkhart Nat. Bank v. Northwestern G. L. Co 203, 339, 352 Elyea v. Lehigh S. M. Co 160, 357 Emerson v. Auburn & 0. L. R. R 281 Emmerich Co. v. W. & J. Sloane 00 Empire M. & M. Co. v. Tombstone M. & M. Co 18 Employers' L. A. Corp. v. Employers' L. I. Corp 146 Ernst Ochs v. Frey 298 Ernst V. Elmira M. I. Co 155 Ernst V. Rutherford & B. S. G. Co 143, 155, 240, 247, 353 Ervin v. Oregon Ry. & Nav. Co 247, 249, 252, 307 Ervin v. Oregon S. Nav. Co 286 Estes v. Belford 267, 285 Evansville C. Co. v. United Press 282 Table of Cases xxiii Page. Fairbanks & Co. v. Cincinnati N. 0. & T. P. Ry. Co 24, 283, 33D F. A. Kennedy Co. v. McCormaek 331 Faltiska v. New York, L. E. & W. R. E. Co 281 Farmer v. National L. Asso 34, 269, 272, 292 Farmers' & M. Nat. Bank v. Rogers 296, 297 Farmers' L. & T. Co. v. Farmers' L. & T. Co 148 Farmers' L. & T. Co. v. McKinney 236 Faulkner v. Delaware & R. C. Co 313 Fay V. Coughlin-Sandford S. Co 163 " Fearing v. Glenn 286 Fenton v. Lumberman's Bank 324 Fidelity I. T. & S. D. Co. v. Mechanics' Sav. Bank 198, 199 Fidelity T. & S. V. Co. v. Mobile S. R. Co 288 Finney v. Guy 203 First Nat. Bank of N. H. v. Doying 296 First Nat. Bank of R. S. v. Clarke 297 First Nat. Bank of S. S. v. Slattery 298 First Nat. Bank of S. S. v. Rock C. F. P. Co 219 Fisher v. Charter Oak L. Ins. Co 352 Fisk V. Chicago, R. I. & P. R. Co 154, 271 Fitzgerald v. Missouri P. R. R. Co 342 Fitzgerald Con. Co. v. Fitzgerald '. 289 F. J. Emmerick Co. v. W. & J. Sloane 50 Flynn v. Central R. R. of N. J 248 Flynn v. Hudson R. R. R. Co 281 Flynn v. Union S. & 6. Co 34 Fontana v. Chronicle-Telegraph Co 276 Fontana v. Post P. & P. Co 279 Ford V. Binghampton H. P. Co 347 Forrest v. Pittsburg B. Co 28, 272 Foster v. Electric H. R. Co 293 Francis v. Taylor 364 Franzen v. Zimmer 42, 220 Fraser v. Granite S. P. Asso 295 Frawley, B. & W. v. Pennsylvania C. Co 18, 26, 284 Friedman v. Empire L. Ins. Co .' 28, 272 Friedland v. Union S. & G. Co 331 Friezen v. Allemania F. Ins. Co 292 Fritts V. Palmer • 39, 175 Fuller & Co. v. Schrenk 51 Funk V. Anglo-American Ins. Co 283 Gait V. Provident Sav. Bank 252 Gasquet v. Fidelity T. & S. V. Co 289 Geer v. Mathieson A. Works 290 Gibbes, Matter of 1*0 Gibbs V. Queen Ins. Co 34, 251, 272 xxiv Table of Cases. Page. Giesen v. London & N. W. A. M. Co 152, 153 Gilbert v. Finch 168 Gilchrist v. Helena H. S. S. R. Co 18 Gilnian, Matter of 168 Glines v. Supreme Sitting O. I. H 290, 375 Globe Y. Mills v. Bilbrough 245, 330 Goddard v. Crefeld Mills 45, 49 Goldey v. Morning News 290 Goldzier v. Central R. E. of N. J 332 Goodlett V. Louisville R. R 4 Goodloe V. Tennessee C. I. & R. E. Co 4 Goodwin v. Boston & M. R. R 342 Goodwin v. Colorado Mort. Co 270 Goodwin v. New York, N. H. & H. R. R. Co 342 Gottsehalk Co. v. Distilling & C. F. Co 282 Grant v. Crittenton , 304, 329 Gray v. Fuller 241, 353 Gray v. Taper-Sleeve P. Works 289 Gray L. Co. v. American W. T. D. Co 314 Great Southern F. P. H. Co. v. Jones 337 Great Western Mining Co. v. Harris 368, 376 Greene, Matter of 8, 235 Greene v. Shain 164 Griesa v. Massachusetts B. Asso 173, 259 Griffith V. Mangam 191 Grob V. Metropolitan C. Agency . . , 327 Grover & B. S. M. Co. v. Kimball 302 GunJlin v. Hamburg A. P. Co 263 Gui ney v. Grand Trunk Ry. Co 248, 250, 262 Guttentag v. Whitney 51 Hackett v. Northern P. R. Co 156 Hafner & S. F. Co. v. Grumme 296 Haight V. LeFoncier 293 Hale V. Allison 203 Hale V. Coffin .' 203 Hale V. Hardon 203 Hallenberg v. Greene 364, 372 Hallett V. New England R. G. Co 150, 172, 176 Halsey v. Henry Jewett D. Co 48 Halsted, Matter of 216, 218 Hamilton v. Accessory T. Co 353, 372, 374 Hamilton v. Fowler I77 Hamilton C. Co. v. Bernhard 232 Hammer v. Garfield M. Co 34 Hammond v. National L. Asso 301, 325, 326 Hancock Nat. Bank v. Farnum I99 Table of Cases. xxv PAGE. Hand v. Society, S. C 249, 330 Hann v. Barnegat & L. B. I. Co 261 Harmon v. Vanderbilt H. Co 295 Harper v. Smith jgg^ 258, 365 Harriott v. New Jersey R. R. T. Co 252 Hartford F. Ins. Co. v. Perkins 40 Harvard Co. v. Wicht 28 Hastings v. Drew •_ j^g^ Hatch V. Chicago, R. I. & P. R. R. Co 271 Hat-Sweat M. Co. v. Davis S. M. Co 19 266 280 Havana C. R. Co. v. Ceballos 308 Havemeyer, Matter of 206 Hayden v. Androscoggin Mills 269 Hayt, Matter of 150 H. B. Scharmann & Sons v. DePalo 332 Hennessy v. Muhleman 362 Henriette M. & M. Co. v. Johnson 283 Henriques v. Dutch W. I. Co 7 Henry Huber Co. v. Warren 331 Herbert v. Montana D. Co , 262 Hibemia Bank v. Lacombe 229, 259, 325, 371 Hickory F. O. Co. v. Buffalo, N. Y. & P. R. Co 175 Hill V. Knickerbocker E. L. I. Co 216, 317 Hiller v. Burlington M. R. R. R. Co 257, 288 Hilliker v. Hale 203 Hoes V. New York, N. H. & H. R. Co 250 Hohorst, Matter of '. 286, 340, 343 Holdeu V. Putnam F. Ins. Co 344 Holder v. Aultman, M. & Co 47 Holland T. Co. v. Sutherland 243 Hollis V. Drew T. Seminary 9, 239 HoUister v. De Forest W. T. Co 163 Holmes v. Remsen 221 Home Ins. Co. v. Morse 37 Honeyman v. Colorado F. & I. Co 17 Hooper v. California 38 Hoormann v. Climax C. Co 318 Hope M. L. Ins. Co. v. Perkins 47, 142, 174 Horn S. M. Co. V. Ne-^c York 36, 38, 39 Home V. Boston & M. R. R 2, 341 Hosmer v. Darrah 233, 309, 371 House V. Cooper 252 Houston V. Filer & S. Co 287 Howard v. Prudential Ins. Co 276 Howarth v. Angle 190, 196, 200, 202 Howell V. Chicago & N. W. R. Co 157 Hoyt V. Thompson 223, 228, 246 xxvi Table of Cases. Page, Hudson E. P. & P. Co. v. H. H. Warner & Co 152, 228 Huey Co. v. Rothfeld 51 Hulbert v. Hope M. Ins. Co 264 Hulbert Bros. & Co., Matter of 222, 223 Humphrey v. Sniffen 51 Hunter v. Mutual R. L. Ins. Co 274 Huntington v. Attrill 212 Hussey M. Co. v. Deering , 269 Hutchinson v. Curtlss 207 Hutchinson v. Simpson 189 Hutchinson v. Stadler 207 Hutchinson v. Young 214, 302 H. W. Caldwell & S. Co. v. Stilwell, B. & S. Co .' 262, 319 Hyde v. Goodnow 25, 47 Indiana v. Pullman P. C. Co 15 India Rubber Co. v. Katz 323 Insurance Co. v. C. D., Jr 245 Insurance Co. v. New Orleans 37 Insurance Press v. Montauk F. D. W. Co 155, 312 International L. Ins. Co. w Sweetland 302 International L. Ass. Soc. v. Commissioners 53 International Society v. Dennis 51 Irving Nat. Bank v. Corbett 296 Ithaca F. Department v. Beeeher 302 Ives V. Metropolitan L. Ins. Co 281 Ives V. Smith 364 Jackson v. Delaware R. A. Co 292 Jacobs V. Mexican S. R. Co 248, 357, 363 James, Matter of 139 Jarvis-Conklin M. T. Co. v. Willhoit 175 Jemison v. Citizens Sav. Bank 227 Jessup V. Carnegie 5, 204 Jewett V. St. Louis & S. Ry 150 John T. Noye Mfg. Co. v. Raymond 295 Johnson v. Adams T. Co 261 Johnson v. Haoover F. Ins. Co 267, 276 Johnston v. Mutual Reserve L. Ins. Co 274 Jones V. Keeler 26 Jones V. Norwich & N. Y. T. Co .' 257 Joseph Schlitz B. Co. v. Ester 47 J. R. Alsing Co. v. New England Q. & S. Co 31, 47 Kavanagh v. Omaha L. Asso 5 Keasbey & M. Co., Matter of 343 Kelsey v. Republic S. & L. Asso 380 Table of Cases. xxvii Kennedy v. Chicago, E. I. & P. R. Co '^To Kennedy v. Town of Palmer ' ' ' ' ' 239 Kennedy Co. v. McCormiek. . . „„, Killmer v. Hobart t Kinney v. Eeid I. C. Co Vr .0 f , . 46, 48 Kinsey v. American H. M. Co 288 Kirby V. Lake Shore & M. S. R. Co ....'.'...'..'.'. 313 Kirtley v. Holmes 209 Kiufeke v. Merchants D. T. Co 290 Knapp V. City of Brooklyn ...'.'...'...... 206 Knapp S. & C. Co. v. National M. F. Ins. Co '.'.'.'.'.'.'.'.".".".".".'.42 275 Knott V. Southern L. Ins. Co '.".'..'.".'.'. ' 271 Kraft V. Griffon Co ' " jg'^' gg^ Kranshaar v. New Haven S. B. Co ' i Kuney v. Amazon Ins. Co 232 Ladenburg v. Commercial Bank 254 320 L. Adler Brothers & Co., Matter of .' 95 Lafayette Ins. Co. v. French 271 Lamb v. Bowser 28 47 Lambert v. Mutual Reserve L. Ins. Co 274 Lampson, Matter of 239 Lamson C. S. S. Co. v. Conyngham 297 Lancaster v. Amsterdam Imp. Co 4, 5, 9, 40, 234, 235, 236, 240 Lancaster v. Spotswood 323 Laudusky v. Beirne I74 Lane v. Wheelwright 216 Lauter v. Jarvis-Conklin M. T. Co I77 Law V. Western Ry 16 339 Lawrence v. New Jersey R. & T. Co 254 L. Bucki & S. L. Co. v. Atlantic L. Co 301 Leary v. Columbia R. & P. S. N. Co 378 Lee, Matter of 355 Lefevre v. Matthews 368, 370 Lehigh & N. E. R. Co. v. American B. & T. Co 51, 331 Leonard v. Poole 178 Leo- Wolfe, Matter of 238 Le Roy, Matter of 206 Leslie v. Lorilard 262 Lewis V. American N. S. Co 378 Lewisohn Brothers v. Anaconda C. M. Co 159, 364 Lewis Pub. Co. v. Lenz .' 48 Lewis Pub. Co. v. Palmer 45 Lindheim v. Sitt ' 45, 48 Lindquist v. Glines 43, 326, 380 Liscomb v. New Jersey R. R. & T. Co 248 Liverpool Ins. Co. v. Massachusetts 37 xxviii Table of Cases. Page. Logan V. McCall Pub. Co 349 London, P. & A. Bank v. Aronstein 153 London & S. F. Bank v. Block 36, 102 Londriggan v. Kew York & N. H. R. R. Co 315 Loop V. Gould 223. 370 Louden M. Co. v. American JNI. I. Co 288, 289, 290 Louisville, X. A. & C. R. E. Co. v. Louisville T. Co . 341 Louisville T. Co. v. Louisville, N. A. & C. E. Co 3 Louisville Underwriters, In re 207 Lowry v. Inman 196, 197 Lukens I. & S. Co. v. Payne 321 Lumbermans Ins. Co. v. Meyer 16, 260 Lumley v. Anatron C. Co 321 Lyons v. Grand Lodge 306 Mabon v. Miller 369 Mabon v. Ongley E. Co 220, 261, 325, 36E, 374, 375, 376, 377 Mac Giniiis v. Amalgamated C. Co 262, 311 MacXabb v. Porter A. L. Co ; . . 375, 377 Mackey v. Mexican C. R. Co 248 Main Street, Matter of 206 Maine v. Grand T. E. E. Co 139 Mairs v. Baltimore & 0. E. R. Co 183 Mallon V. Rothschild 13 Mallory v. Tioga R. R. Co 313 Manchester F. Ins. Co. v. Herriott 36, 38, 40 Manda v. Wells F. & Co 256, 259 Manice v. Manice 239 Marine & F. I. Bank v. Jauncey 312 Marion P. Co. v. Perry 301, 309 Market Nat. Bank v. Pacific Nat. Bank 247 Marshall v. Sherman 198, 200 Martin v. New Trinidad L. A. Co 289 Martine v. International L. Ins. Soc 41, 231 Martin's Bank, Ltd. v. Amazonas Co 305 Mason v. Standard D. & D. Co 313 Maury v. American Motor Co 320 Maxwell v. Atchison, T. & S. F. R. Co 24 McBride v. Farmers Bank 249, 348 McCabe v. Illinois C. R. R. Co 314 McCanna & F. Co. v. Citizens T. & S. Co 177 McColloh V. Paillard N. M. W. Co 277 McCord L. Co. v. Doyle 29, 267 McCormick >•. Pennsylvania C. R. R. Co 252, 253 McClure v. Supreme Lodge, K. H 314 McDonough v. Phelps 322 McElroy v. Continental E. Co 260, 291 Table of Cases. xxix Page. McGovern v. Bulman-Warner P. Co 347 McLean, Matter of 77, 94 McLean v. Jephaon 54, 77, 94 McLeary v. Erie T. & T. Co 364 McQueen v. Middletown Mfg. Co 254, 264 McVity V. E. D. Albro Co 149, 157, 227, 228 Mecke v. Valleyton M. Co 289 Mercantile Nat. Bank v. The Mayor 87 Mercer v. Southern Bank 293 Merchants L. & T. Co. v. Clair 300 Merchants M. Co. v. Grand T. R. Co 15, 269 Merriam, Matter of 2, 139 Merrick v. Brainard 6 Merrick v. Van Santvoord 6 Meyer v. Pennsylvania L. M. P. Ins. Co 267 Meyer v. Van Collem 257 Middletown Nat. Bank v. Toledo A. A. & N. M. Ey. Co 202 Miller v. Barlow 356 Miller v. Jones 265 Miller v. Quincy 353, 356 Minneapolis & St. L. Ry. v. Gardner , 204 Missouri, K. & T. R. Co. v. Texas & St. L. E. Co 3 Mitchell V. Northern S. 0. & T. Co 148 Mix V. Andes Ins. Co 345 Moeh V. Virginia F. & M. Ins. Co 276, 284 Moflfett, H. & C. Co. V. Peoria W. Co 261 Molson's Bank v. Boardman 195 Moneuse v. Riley 362, 363 Moore v. Monumental M. L. Ins. Co 280 Moore v. Chicago, St. P. M. & 0. R. Co 4, 341 Morgan, Matter of ^^^ Morgan v. New York & A. R. R. Co 187, 188 Mosher v. Supreme Sitting, 0. I. H 326, 375 Moxie N.-F. Co. v. Baumbach 5 M'Queen v. Middletown M. Co 254, 264 M. S. Huey Co. v. Rothfeld 51 MuUer v. , Dows 334, 341, 344 MuUins V. Metropolitan L. Ins. Co 281 Mumford v. American L. I. & T. Co 172, 227 Munger V. T. Co. v. Rubber G. M. Co 256 Murphy V. Co. v. Connell 25, 26 Murray v. Vanderbilt 352, 371, 374 Mutual B. L. Ins. Co. v. Davis 312 Mutual L. Ins. Co. v. Hill 230 Mutual R. F. L. Assol v. Cleveland W. Mills 276 Mutual R. F. L. Asso. v. Phelps 274 Myers v. Machado 300 Nash v. Hall 154, 363 XXX Table of Cases. Page. Nashua Sav. Bank v. Anglo-American L. M. & A. Co 152, 192 Nassau & L. R. Corp. v. Boston & L. R. Corp 341, 342 Nassau Bank v. Jones 227 Nassau G. L. Co. v. City of Brooklyn 105 National B. Bank v. Sampson 323, 325 National Harrow Co. v. E. Bement & Sons 99 National K. Co. v. Bronner 26 National P. Bank v. Clark 326, 38» Naylor Mfg. Co., Matter of 43 Nelson v. Burrows 204 Neuehatel Asphalte Co. v. The Mayor ,..,...., 45 New Hampshire L. Co. v. Tilton 6, 235 New Haven P. & B. Co. v. Downington Mfg. Co ; 334 New Hope D. B. Co. v. Poughkeepsie B. Co 172 New Jersey C. Co. v. Farmers L. & T. Co 231 New Jersey P. & L. Bank. v. Thorp 308 New Orleans & M. P. Co. v. James 12 New River M. Co. v. Seeley 271 New York Architectural T. C. Co. v. Williams 18, 246 New York D. Dock v. Hicks 235 New York F. D. Co. v. New Jersey 0. Co 8, 313 New York, L. E. & W. R. R. Co. v. Estill 41, 42, 269 New York, L. E. & W. R. R. Co. v. Pennsylvania 16 New York L. Ins. Co. v. Cravens ' 39, 230 New York L. Ins. Co. v. Universal L. Ins. Co 347 New York M. P. Co. v. Damon 53 New York & N. H. R. R. Co. v. Schuyler 155 Niagara F. Ins. Co. v. Cornell 38, 40, 179 Nichols V. Charleston C. Co 319, 323 Nickerson v. Canton M. Co 297 Nickerson v. Madison 156 Nicoll v. Clark 49, 51 Nisbet, Matter of 86 N. K. Fairbanks & Co. v. Cincinnati, N. O. & T. P. R. R. Co .24, 283, 339 Norfolk & W. R. R. Co. v. Pennsylvania 14 Norris v. Atlas S. S. Co 314 North American Rice Co., Matter of 159 Northwestern M. L. Ins. Co. v. Overholt 175 Norton v. Atchison, T. &, S. F. R. Co 16, 282 Novelty Mfg. Co. v. Connell 27, 45 Noye Mfg. Co. v. Raymond 296 Nutting V. Massachusetts , 38 Oakland S. M. Co. v. Fred W. W. Co 18 O'Brien v. Chicago, R. I. & P. R. R. Co 154 O'Brien v. Glenville Woolen Co 329 O'Brien v. Peoria Water Co 256, 257 Ogden V. Murray 173 Table of Cases. xxxi Page. Ogdensburg & L. C. R. R. Co. v. Vermont & C. E. R. Co 227, 251, 268 Ohio & M. R. R. Co. v. Wheeler 341 O'Laughlin v. G. H. Hammond & Co 310 Olcott V. Tioga R. R. Co 313 Olean S. R. Co. v. Fairmount C. Co 287 Oliver v. Walter H. CM. Co 320' Onderdock v. Peale, P. & K 51 Oregon Nat. Bank v. Traver 49, 177 O'Reilly v. New Brunswick A. & N. Y. S. B. Co 263 O'Reilly, S. & F. Co. v. Greene 47, 51, 301 Ormsby v. Vermont C. M. Co 158, 194 Owyhee L. &. I. Co. v. Tautphas 41, 232, 271 Page V. Boggess 150 Palmer v. Chicago E. P. Co 279 Palmer v. Chicago H. Co 27, 269, 279 Palmer v. Pennsylvania Co 277, 280 Palmer v. Phoenix M. L. Ins. Co 250 Parmele Co. v. Haas 45, 50, 320 Parrott v. Alabama G. L. Ins. Co 290 Parsons v. Charter Oak L. Ins. Co 228, 367 Patterson v. Baker 196 Paul V. Virginia 39 Paulding v. Hudson Mfg. Co 333 Pease v. Delaware, L. & W. R. R. Co 252 Pembina Mining Co. v. Pennsylvania 12, 15, 38, 39 Penn Collieries Co. v. McKeever 17, 18 Pensacola Tel. Co. v. Western U. T. Co 13 People v. Albany Ins. Co 103 V. American Bell Tel. Co 19. 23, 102 V. American Loan & T. Co 242, 249, 266 v. Ballard ^^^ V. Campbell ■• ^^^ V. Central R. R. of N. J 248 V. Delaware & H. C. Co HO V. Equitable Trust Co 102 V. Fire Asso. of Phila 1^^ V. Formosa ^^* V. Gold & S. Tel. Co ^^'^ V. Granite S. P. Asso 3^* r. Home Ins. Co 102' 124 V. Horn Silver Mining Co 16, 17, 18, 102, 106, 117 V. Knickerbocker Ice Co 105 -, ,. 183 V. Martin ■ •. V. New York C. & St. L. R. R. Oo i^** V. New York Floating D. D. Co 10^ V. North R. S. R. Co 1^* V. St. Nicholas Bank ^1^ xxxii Table of Cases. Page. People ex rel. A. G. Hyde & Sons v. Miller 125 A. G. Hyde & Sons v. Wells 79 A. J. Johnson Co. v. Roberts 124 A. J. Tower Mfg. Co. v. Wells 64, 67 Allen V. Badgley 85, 87 American Axe & T. Co. v. Roberts 123, 128 American Contracting & D. Co. v. Wemple 103, 118, 133 American Soda F. Co. v. Roberts ■. . . 102, 104, 124 American Surety Co. v. Campbell 118, 128 American Thread Co. v. Feitner 85, 88, 90 A. N. Kellogg N, Co. v. Roberts 118 Armstrong Cork Co. y. Barker 63 Automatic V. M. Co. v. Kelaey 123 Badische A. & S. Fabrik v. Roberts 22, 116 [ Bank of Jlontreal v. Commissioners 68 Bay State S. & L. Co. v. McLean 54 Benedict \'. Roe 91 Bhuragara Co. v. Wells 79, 93 Bibb Mfg. Co. V. Wells 93 Bijur V. Barker 73 Blacldnton Co. v. Roberts 106 Bleecker S. & F. F. R. R. Co. v. Barker 94 Bliss V. Feitner 84, 101 Boehm v. Wells 85, 86 Bridgeport Sav. Bank v. Barker 68 Broadway Imp. Co. v. Barker 82, 85, 99 Broadway Realty Co. v. Feitner 85 Brokaw Bros. v. Feitner 67, 72 Bronx Gas & E. Co. v. Barker 8&, 97 Bronx Gas & E. Co. v. Feitner 93 Brooklyn C. R. R. Co. v. Board of Assessors 72 Brooklyn Elevated R. R. Co. v. Roberts 115, 133 Brooklyn R. T. Co. v. Morgan 113, 117 Brooklyn Traction Co. v. Board of Assessors 70 Brooklyn U. G. Co. v. Feitner 78 Brown \\ O'Rourke 71, 78 Brush El. Mfg. Co. v. Wemple 105 Buffalo R. & P. Ry. Co. v. Duguid 88 Butchers H. & M. Co. v. Asten 60, 69, 71 Canaday v. Williams 95 Carey Mfg. Co. v. Commissioners 65 Carrington Co. v. Wells 66 Chicago J. R. & U. S. Co. v. Roberts 103, 120 Church .of H. C. v. Assessors 82 Citizens El. II. Co. v. NefF 69 Citizens Gas L. Co. v. Board of Assessors 131 Citizens Lighting Co. v. Feitner 93 Table op Cases. xxxiii Page. People ex rel. Claflin Co. v. Feitner 80 Cochrane v. Feitner 83, 100 Cohn & Co. V. Miller 118, 121, 125, 126 Colonial Trust Co. v. Morgan 115 Commercial Cable Co. v. Morgan 103, 110, 113, 114, 115 116, 121, 133, 134 Commercial M. Ins. Co. v. Tax Commissioners 85, 90, 129 Commonwealth Ins. Co. v. Coleman 96 Coney Island & B. R. R. Co. v. Neff 71, 80 Connecting T. R. E. Co. v. Miller 14, 20, 103 Conron Bros. Co. v. O'Donnell 72, 77, 79 Consolidated Gas Co. v. Feitner 91, 94 Consolidated Ginzing Co. v. Kelsey 35 Consolidated Tel. & E. S. Co. v. Barker 69 Cord Meyer Co. v. Feitner 93 Cornell Steamboat Co. v. Dederick 56, 67, 71, 73, 99 Crane Co. v. Feitner. . , 19, 63, 64 Daniels v. Crawford 162, 164 Davis-Colby O.-R. Co. v. Campbell 103, 118 Delaware & H. C. Co. v. Parker 84 Delaware & H. Co. v. Wells 87, 94, 97 Del Mar v. St. Louis & S. F. Ry. Co 163, 164 Devoe & Reynolds Co. v. Roberts 104, 105 Dexter v. Palmer , 95 Dives-Pelican M. Co. v. Feitner 17, 18 Durand-Ruel v. Wells 66 Dutilh-Smith, McM. & Co. v. Miller 118 Dwight v. Piatt 80, 94 Eastern T. Line v. Commissioners 137 Eckerson v. Christie 96 Edison E. I. Co. v. Barker 57, 60, 79, 92, 96 Edison E. I. Co. v. Board of Assessors 68 Edison E. I. Co. v. Feitner 76 Edison E. I. Co. v. Wemple 105, 128 Edison E. L. Co. v. Campbell 105, 121, 132, 133 Edison E. L. Co. v. Wemple 121 Edison G. E. Co. v. Barker 72 Edison L. & P. Co. v. Kelsey 23 Eppens, S. & W. Co. v. Roberts 128 Equitable G. L. Co. v. Barker 69, 72, 94 Erie R. R. Co. v. Webster 78, 86 E. Seidenberg, S. & Co. v. Feitner 72 Fairfield C. Co. v. Coleman 70 Farcy & O. Co. v. Wells 65 Fargo V. Murphy 85 Field V. Northern P. r! R. Co 161, 162, 164 Fiske V. Feitner • 86 xxxir' Table of Cases. Page. People ex rel. Fort George Realty Co. v. Miller 119 Frederick A. Stokes Co. v. Roberts 104, 121, 133 Fruin BambricK P. Co. v. Knight 105, 106, 121, 122 F. W. Devoe & C. T. E. Co. v. Roberts 104, 105 Gago V. Lohnas 132 Garden City Co. v. Valentine 92 German L. G. P. Co. v. Barker 79 Goetz S. Mfg. Co. v. Wells 19, 21 Grace v. Gray i 88 Gramerey Co. v. Roberts 126 Green v. Hall .77, 80, 95 Greenwood v. Feitner 95 Hans Rces Sons v. Miller 119, 121, 125 Harlan & H. Co. v. Campbell 103, 117 Harriman v. Paton 163 Hawley B. & L. Co. v. Barker 53, 73 H. B. Claflin Co. v. Feitner 80 H. B. Smith Co. v. Roberts 26 Hecker J. J. M. Co. v. Barker 73, 96 Hyde & Sons v. Miller 125 Hyde & Sons v. Wells 79 India R. & G. P. I. Co. v. Barker 79, 92 International C. Co. v. Roberts 115 Jefferson v. Smith 62 Jenkins v. Parker V. C. Co 153 Jerome Park V. S. & I. Co. v. Roberts 119 Jewelers C. Pub. Co. v. Roberts 106, 110, 113 John A. Roebling's S. Co. v. Wemple.106, 114, 124, 125, 133, 134 Johnson Co. v. Roberts 124 Journeay & B. Co. v. Roberts 124, 125, 127 Kellogg V. Wells 85 Kellogg Newspaper Co. v. Roberts 118 Kendall v. Feitner 83, 89, 91 Keppler & S. v. Barker 80, 87 Klipstein & Co. v. Roberts 14, 20 Knickerbocker F. Ins. Co. v. Coleman 60, 93, 98 Knickerbocker S. D. Co. v. Wells 96 Kursheedt Mfg. Co. v. Feitner 62 Lackawanna Trans. Co. v. Knight 121 Langdon v. Feitner 90 Lembeck & B. E. B. Co. v. Roberts.- 21 Leonard v. Commissioners , 68 L. E. Waterman Co. v. Morgan 105 Long Island R. R. Co. v. Feitner 91 Lorena Co. v. Morgan 127 Malcolm B. Co. v. Board of Assessors .67, 98 Manhattan F. Ins. Co. v. Board of Commissioners. . .68, 77, 78 Ta!ble of Cases. xxxv Page. People ex rel. Manhattan Ry. Co. v. Barker 58, 69, 72, 73, 79 84,93,97,99, 131 Manhattan Ey. Co. v. Coleman 93 Martin Bros. Mfg. Co. v. Barker 63 Matheson & Co. v. Roberts , 102, 104, 124 McShane Mfg. Co. v. Barker 78 Metropolitan S. Co. v. Kelsey 113, 114, 116, 126 Miles V. Montreal & B. C. Co., Ltd 162, 164 Mutual U. T. Co. v. Commissioners of Taxes 77, 88 National S. Co. v. Feitner 74 Nesmith & C. Co. v. Miller 35 New England D. M. & W. Co. v, Roberts 106, 109, 121 New England L. & T. Co. v. Roberts 119 New York & E. R. F. Co. v. Roberts 108, 112, 115 New York & N. J. T. Co. v. Neflf 68, 73, 75 New York C. & H. R. R. Co. v. Budlpng 88 New York C. & H. R. R. Co. v. Knight 112, 120 New York C. H. B. Co. v. Barker 70 New York Hotel & R. Co. v. Barker. 81 New York Loan & Imp. Co. v. Roberts ,. 122, 316 New York Mutual G. L. Co. v. Wells 78, 91 New York Realty Corp. v. Miller 130 Niagara River H. Co. v. Roberts 119 North American Co. v. Miller 120 North American Trust Co. v. Knight 109 Orinoka Mills v. Barker 62 Oswego Canal Co. v. City of Oswego 79 Pacific Mail S. S. Co. v. Commissioners 62 Paddock v. Lewis 88 Panama R. R. Co. v. Coinmissioners 57, 58, 70, 95 Parke, Davis & Co. v. Roberts. . .14, 20, 27, 36, 38, 39, 102, 124 Parker Mills v. Commissioners 63 Pennsylvania R. R. Co. v. Knight 14 Pennsylvania R. R. Co. v. Wemple 14 Peoples' Trust Co. v. S'eitner 82 P. F. Bhumgara Co. v. Wells 79, 93 Philip Carey Mfg. Co. v. Commissioners 19, 65 Postal Tel. Cable Co. v. Campbell 102, 124, 125, 128, 133 Railway Advertising Co. v. Roberts 115 Rendrock Powder Co. v. Feitner 83, 84 Reversible Collar Co. v. Feitner 19, 64 Rochester Ry. Co. v. Pond 71 Roebling's Sons Co. v. Wemple 106, 114, 124, 125, 133, 134 Rome, W. & O. R. R. Co. v. Haupt 89, 96 Rome, W. & O. R. E. Co. v. Hicks 89, 96 Sands v. Feitner 100 Schwarischild & S. Co. v. Roberts 106 xxxvi Table of Cases. Page. People ex rel. S. Cohn & Co. v. Miller 118, 121, 125, 128 Second Avenue R. R. Oo. v. Barker 71 Seidcnberg, S. & Co. v. Feitner 72 Seth Thomas Clock Co. v. Wemple 104, 106, 114 Sherwin, Williams Co. v. Barker 19, 53, 62, 63, 65 Silician Asphalt Co. v. Feitner 72 Simpson v. Wells 81 Sims V. Fire Commissioners .* 132 Singer v. Knickerbocker Trust Co 164 Singer Mfg. Co. v. Wemple '. 116, 119 Sloane v. Barker 79 Southern Cotton Oil Co. v. Roberts 28 Southern Cotton Oil Co. v. Wemple 17, 20, 38- Spencerian Pen Co. v. Kelsey 124 Standard Wood Co. v. Roberts 17, 35, 105, 117 Stanley E. M. Co. v. Wells 78 Staten Island R. T. R. R. Co. v. Roberts 124, 126, 132, 133 Stokes Co. V. Roberts 104, 121, 133 Sutphen v. Feitner 77 Syracuse Imp. Co. v. Morgan 105, 128 Thomson v. Feitner 78, 90, 92, 93 Thurber, Whyland Co. v. Barker 53, 73 Tiffany & Co. v. Campbell 104 T. Martin B. M. Co. v. Barker 63 Tower Mfg. Co. v. Wells 64, 67 Trowbridge v. Commissioners 67, 70' Troy Union R. R. Co. v. Carter 95 Twenty-third St. R. R. Co. v. Commissioners 58, 70 Twenty-third St. Ry. Co. v. Feitner 71, 93 Union Ferry Co. v. Roberts 112, 119 Union Pacific Tea Co. v. Roberts 105, 106 Union Trust Co. v. Coleman 60 United States A. P. P. Co. v. Knight 103, 124 United States Trust Co. v. Barker 73- United Verde Copper Co. v. Roberts 116, 119, 126, 133 Updyke v. Gilon 132. Victor Koechl & Co. v. Morgan ; 124 Wall & Hanover St. R. Co. v. Miller 119 Wallkill Valley R. R. Co. v. Keator .93, 97 Warren v. Carter 86, 96 Washington Building Co. v. Feitner , 82 Washington Mills Co. v. Roberts 117 Waterman Co. v. Morgan lOS' Weber Piano Co. v. Wells 70' Wechler v. Board of Assessors 86. Westbrook v. Board of Trustees 79, 84, 96, 132 Westchester F. Ins. Co. v. Davenport 137 Table of Cases. xxxvii Page. People ex rel. Western Electric- Co. v. Campbell , 104, 133 Western Union Tel. Co. v. Dolan 88 ■ West Shore R. E. Co. v. Adams 88, 89 Wiebusch & H. Co. v. Roberts 113, 124', 125 William J. Matheson & Co. v. Roberts 102, 104, 124 Witthaus V. O'Donnell ■ 87 W. & J. Sloane v. Barker 79 Yellow Pine Co. v. Barker 53 gl, 67 Zollikofer v. Feitner 77 Perrine v. Ransom, G. M. Co 291 Perry v. Erie Transfer Co 252 Persch v. Simmons 188 191 Persons v. Buffalo C. Mills 291 Phelps V. New York, N. H. & H. R. Co 250 Philadelphia Fire Asso. v. New York 36 38 Phillips V. Sonora Copper Co 376 Pickard v. Pullman S. C. Co 15 Pinney v. Nelson igg Piatt V. Hungerford , 3I5 Piatt V. Larter 190, 195, 224 Piatt V. Wilmot 315 Plimpton V. Bigelow 323 Pope V. Terre Haute C. & M, Co 288 Popper V. Supreme Council, 0. C. F 374, 375 Porter v. Sewell S. C. H. Co 288 Portland Co. v. Hall 50 Postal T. C. Co. V. Taylor 13 Pratt V. Short 172 President & D. of Bank of Commerce v. Rutland & W. E. Co 259 President D. & Co. of New Jersey P. & L. Bank v. Thorp 308 Price V. Wilson 211 Prime, Matter of 3, 139, 142, 143, 144 Pringle v. Woolworth 42, 268, 275, 371 Progressive P. Co. v. Wrought-Iron B. Co 251, 331 Prouty V. Michigan S. & N. I. R. R. Co 157 Prouty V. Lake Shore & M. S. R. R. Co 157, 309 Providence S. & G. P. Co. v. Connell 47 Pruyn v. Black 26, 268, 371 Pugh V. Hurtt 198 Pyro-Gravure Co. v. Staber 308 Quade v. New York, N. H. & H. R. R. Co 266 Railroad Company v. Harris 2, 3, 16 Randall, Matter of .'350 Handolph v. Susquehanna W. P. & P. Co 318, 327 xxxviii Table of Cases. Page. Rathbun v. Northern C. Ey. Co 313 Eecknagel v. Empire S. L. O. L. Co 164 Eeddington v. Mariposa L. & M. Co 278 Eedfield v. Baltimore & 0. R. E. Co , 338 Eedmond v. Enfield Mfg. Co '. 352, 363, 374 Eedmond v. Hoge 352, 374 Reedy E. Co. v. American G. Co 321 Eeifsnider v. American I. P. Co 290 Reilly v. Oliver-Eeilly Co 379 Eeilly v. Philadelphia & R. Ry. Co 268, 276 Relfe V. Rundel 7 Remington & S. Co. v. Niagara C. N. Bank 1, 302 Reno Oil Co. v. Culver 154 Reppleye, Matter of 148 Republican M. S. Mines v. Brown 352, 365, 378 Reusens v. Manufacturing & S. Co 375 Revans v. Southern M. & A. R. Co 18, 269 Eeymann B. Co. v. Brister 14, 21, 36, 39 Richardson v. Western H. Ins. Co 270 Riley v. Diggs 238 Robb V. Washington & J. College 239 Robeson v. Central R. R. of N. J 256, 313, 316 Robinson v. Ecuador D. Co 303 Robinson v. Oceanic S. N. Co 250, 252, 253, 256, 262 Robinson Clay P. Co. v. Rodman 302 Rochester H. & L. R. R. Co. v. New York, L. E. & W. E. E. Co 281 Eogers v. Michigan S. & N. I. E. E. Co 242, 363 Rogers v. Pell 218 Root V. Great W. Ry. Co 263 Rosenbaum v. Rice 363 Rosenbaum v. Union Pac. Ry. Co 2 Rosenblatt v. Jersey N. Co 257, 262, 361 Rundel v. Life Asso. of A 228, 261, 367 Runyan v. The Lessee 235 Rust V. United Waterworks Co 289, 338, 376 Sage V. Lake Shore & M. S. Ry. Co 162 Sager Mfg. Co. v. Smith 231, 367 Samuel v. HoUaday 229 Sands v. E. S. Greeley & Co 326, 379 Savage v. Atlanta H. Ins. Co 14 Sayage v. Gould 206 Savings Asso. of St. L. v. O'Brien 197 Sawyer L. Co. v. Bussell 321 Scharmann & Sons v. De Palo 332 Scherer v. Ground Hog M. & M. Co 291 Tabi^ of Cases. xxxix Page. Schlitz B. Co. V. Ester 47 Schmidt v. Nelke A. L. Co , 298 SchoUenberger, Ex parte 269, 272 iSeott V. Ives. 239 Scott V. Stockholders Oil Co 292 Seamans v. Barentsen 5q Seattle G. & E. Co. v. Citizens L. & P. Co 226, 365 Seattle Nat. Bank v. Pratt 315 Security Trust Co. v. Liberty Building Co 103 Seebeck v. King 160, 211, 287 Seeber v. Peoples B. L. & S. Asso 150 Seeley v. Morgan 246 Seignouret v. Southern Bank of N. 253 Selser Brothers Co. v. Potter Produce Co • 252, 254, 319 Semple y. Bank of B. C I77 Seydel v. Corporation L. Co 163, 165, 346 Seymour v. Slide & S. G. Mines 175 SeymouT v. Sturgess .....' 322 Shaft V. Phoenix M. L. Ins. Co 344, 345 Shaw V. Quiney Mining Co 338 Shelby S. T. Co. v. Burgess Gun Co 25, 47, 256, 259 Shepard & M. L. Co. v. Burleigh 1, 302 Sherwood v. American Bible Soe 238 Shiuney v. North American S. L. & B. Co 378 Shorer v. Times P. & P. Co 347 Sidway v. Missouri L. & L.-S. Co 372 Siegraan v. Eice 207 Sigua Iron Co. v. Brown 192, 301, 306, 308, 370 Silver v. Western Iijs. Co 34, 276, 291 Silver Lake Bank v. North 245 Simon v. Sheridan & S. Co 263 Simonds Furnace Co., Matter of 47 Simplex Diary Co. v. Cole 45, 49 Simpson v. Jersey City Con. Co 324 Sims V, Bonner 150, 247, 262, 351 Singer Mfg. Co. v. Wright 20, 36 Sizer v. Hampton & B. K. & L. Co 288 Slater v. Mexican N. E. R. Co '. 248 Sloan V. Implement D. M. Co 298 Small V. JVIinneapolis E. M. Co 364 Smith, Matter of 139 Smith V. Empire S. I. M. D. Co 339 Smith V. McNamara ; 368 Smith V. Union Milk Co 320 Smyth V. International L. Ins. Co. 29 Snow, Church & Co. v. HaU 297 xl Table of Cases. Page. Snow, Church & Co. v. Snow-Church S. Co 229, 256, 259, 307 Sobrio V. Manhattan L. Ins. Co. 282 Societe Foneiere v. Milliken 267 Sonoma V. W. & B. Co. v. Heyman 295 South Amboy T. C. Co. v. Poesehke 46 South Pub. Co. V. Fire Asso. of Ph 34 Southern & A. T. Co. v. New Orleans, M. & T. R. Co 2, 3, 266, 341 Southern Life Ins. & T. Co. v. Packer 230, 311 Southern Ey. Co. v. Allison 342 Spofford V. Texas Land Co 363 Standard Nat. Bank r. Garfield Nat. Bank 216, 219 State of Indiana v. Pullman P. C. Co 15 State Nat. Bank v. Sayward 202 Staten Island M. R. R. Co. v. Hinchliffe 211 St. Clair v. Cox 41, 42, 254, 264 Steele v. R. M. Gilmour Mfg. Co 319 Stephens v. Meriden B. Co 349 Sterett v. Denver & R. G. Ry. Co 278 Stern v. Childs 1 51 Stevens v. Phoenix Ins. Co. of H 1, 271, 337, 344 Stewart, Matter of 301 Stewart v. Union M. L. Ins. Co 229 St. George Vineyard Co. v. Fritz 51 St. Joseph & G. I. E. R. Co. v. Steele 4, 341 St. Louis & S. F. R. R. Co. v. James 142, 337 St. Louis W.-M. Co. V. Consolidated B.-W. Co 25 Stockard v. Morgan. 27 Stoddard v. Lum 193, 222 Stone V. Pontiac R. R 289, 338, 376 Stoney v. American L. Ins. Co 8 Stout V. Sioux City & P. R. R. Co 3, 285 Strain v. Chicago P. Co 283 Strauss v. New York, N. H. & H. R. R. Co 248 Strauss v. Union C. L. Ins. Co 230 Strawn v. Edward J. B.-D. Co 257 Strickland v. National Salt Co 379 Sturgis V. Crescent J. M. Co 286 Sullivan v. Beck 49 174 Sullivan v. Sheehan 47 Sully v. American Nat Bank , 381 Sun E. S. B. M. L. A. F. Asso. v. Buck 297 Swann v. Mutual R. F. L. Asso 28 272 Taendstickfabriks A. V. v. Myers 297 Talcott V. American C. I. Co 320 Tallapoosa Lumber Co. v. Holbert 22 26 47 Table of Cases. • xli Page. Tautphoeus v. Harbor & S. B. & S. Asso 347 Taylor v. Granite S. P. Asso 277 278 290 Taylor v. Holmes 7 245 Taylor v. Life Asso. of Am 352 367 Taylor v. Union Pac. Ey. Co 313 Telluride P. T. Co. v. Rio Grande W. Ry 49 Tennessee v. Pullman S. C. Co I5 Terry v. Imperial F. Ins. Co 34O Thomas v. Board of Trustees, O. S. U 337 Thomas v. Merchants Bank 265 325 Thompson v. Continental Trust Co 328 Thompson v. Tioga R. R. Co 313 Tilley v. Coykendall 6 Timolat v. S. J. Held Co !..... 286 Tinkham v. Borst X89 Tioga R. R. Co. v. Blossburg & C. R. R. Co 313 Tombigbee R: R. Co. v. Kneeland 7, 245 Toronto Trust Co. v. Chicago, B. & Q. R. R. Co 260 Travis v. Railway E. Asso 275 Trustees of Amherst College v. Ritch 239 Tuchband v. Chicago & A. R. R. Co. 276, 278, 280 Tuck V. Sigua Iron Co 318 Tulluride P. T. Co. v. Rio Grande W. Ry. Co 43 Turner v. Fire Ins. Co. of Pa 272 Tyng V. Corporation Trust Co , 164 Union Asso. Press v. Times P. Co 275 Union Asso. Press v. Times-Star Co 279 Union Cement Co. v. Noble 245, 296 United Gold & P. M. Co. v. Smith 156, 159, 366 United Lines Tel. Co. v. Grant 129 United States v. American Bell Tel. Co 12, 15, 19, 267, 277, 337, 338 United States Bank v. Stearns 245, 295, 299 United States Graphite Co. v. Pacific G. Co 289 United States Rubber Co. v. Butler B. S. Co 49 United States Vinegar Co. v. Foehrenbach 193, 310 United States Vinegar Co. v. Schlegel 4, 9, 193, 299, 310 United States Vinegar Co. v. Spamer 192, 308 United States Trust Co. v. The Mayor 83, 101 Uphoff V. Chicago, St. L. & N. O. R. Co 3 Vanderpoel v. Gorman 143, 216, 218, 324 Van Deventer v. Long Island City 84 Van Dresser v. Oregon R. & N. Co 16, 267, 285, 340 Vaughan Mach. Co. v. Lighthouse 25 Viele V. Wells 224 xlii Table of Cases. Page. Vietor v. Richards Co 349 Vitola V. Bee Pub. Co 275, 279 Voshefsky v. Hillside C. & I. Co 248, 250, 262 Vought V. Eastern B. & L. Asso 227 Vulcanite P. C, Co. v. Williams : 331 Wabash W. Ry. v. Brow 290 Wagner v. J. & G. Meakin 27 Wahrman v. North Hudson L. Co 320 Wall, Estate of 139 Wall V. Chesapeake & 0. Ry. Co 283 Waller v. Rothfield. : 26, 27 Walter v. F. E. McAlister Co 219, 375, 377 Wamsley v. H. L. Horton & Co., Ltd 142, 291, 308, 372 Ward V. Roy 268 Warner v. United States Land & I. Co 310 Washington L. Ins. Co. v. Clason 173 Waters P. 0. Co. v. Texas .38, 39, 179 \\atertown Nat. Bank v. Westchester C. W. W. Co 347 Waterville JIfg. Co. v. Bryan 295 Way V. Keyport & M. P. S. B. Co 362 Weller v. Pennsylvania R. Co 24, 337, 342 Welling V. Ivoroyd M. Co [ '. . . .219, 233, 327 Welsbach Co. v. Norwich G. & E. Co 46, 50 West V. Grosvenor 15 Western & A. R. R. Co. v. Roberson 3, 341 Western Bank v. City Bank of C 259 Western E. S. Co. v. Abbeville E. L. & P. Co 289 Western Nat. Bank v. Reckless 198 White V. Howard 238 Whitehead v. Buffalo & L. H. Ry. Co 252 Whiting, Matter of 140 Whitman v. National Bank of 198, 199 Whitney Arms Co. v. Barlow 226 Wigton v. Kenney 202 Wilkinson v. Delaware, L. & W. R. Co 4 U'illiam H. Sawyer Lumber Co. v. Bussell 321 Williams v. Bank of Michigan 245,. 295, 299 Williams v. Gaylord 241 Williams v. Gold H. M. Co 241 \\illiams v. Hintermeister 376, 377 \Yilson v. Brentwood H. Co 286 Wilson V. Lewiston Mill Co 229 Windmuller v. Standard D. & D. Co. 157, 227 Winegard, Matter of 95. Winslow V. Staten Island R. T. Co 281 Wise \ . L: & C. Wise Co 326. Table of Cases. xliii Page. WoerishofiFer v. North River Con. Co 326, 375 Wolfe, Matter of 139 Wood V. St. Louis B. & I. Co 293 Woodward v. Mutual R. L. Ins. Co 274 Workum v. Caldwell 222 Worthington v. Griesser 6 Wprthington v. London G. & A. Co 331 Worthington Co. v. Pfistex B. B. Co 216 W. P. Fuller & Co. v. Schrenk. 51 Wright V. Douglass 237, 321 Yorkville Bank v. Henry Zeltner B. Co 286 Youmans v. Minnesota T. I. & T. Co ^ 274 Young & F. Co. V. Welsbach L. Co 288 I^i^RT I. Statutobt Cobtbitions of Doing Business in This State, Including Taxation. CHAPTER I. Inteoduction. § 1. Foreign corporation. — The term foreign corporation in- cludes not only corporations of other countries, but also those of other states, and a foreign corporation remains such_, irrespective of what states it has property in or does business in.^ Thus a corporation of New Jersey is a foreign corporation in New York, although it has property here or does some or all of its business here. This definition is uniform throughout the United States. There are two definitions of a foreign corporation in the statutes of this state. The General Corporation Law^ states that a do- mestic corporation is a corporation incorporated by or under the laws of the state or colony of New York, and that every corpora- tion which is not a domestic corporation is a foreign corporation, except as provided by the Code of Civil Procedure for the purpose of construing such code. The Code of Civil Procedure' states that in construing such code certain rules must be observed, ex- cept where a contrary intent is expressly declared in the provision to be construed or plainly apparent from the context thereof, and ' Shepard & M. L. Co. v. Burleigh, 27 App. Div. 99, s. c. 50 N. Y. »upp. 135; Kemington & S. Co. v. Niagara Co. Nat. Bank, 54 App. Div. 358 ; s. c, 66 N. Y. Supp. 560; Kranshaar v. New Haven S. B. Co., 7 Robt. 356 ; Stevens v. Phoenix Ins. Co. of H., 41 N. Y. 149. ^ L. 1892, eh. 687, see. 3, sub. 5, as amended by L. 1S95, ch. 672. 'Sec. 3,343, sub. 18. The Code of Civil Procedure is a general practice act, regulating actions and proceedings in the courts of this State, although it contains a few sections of substantive law. 2 CoiSTDITIONS OF DoiNG BUSINESS. that one of such rules is that a domestic corporation is a corpora- tion created by or under the laws of this state, or located in thi3 state, and created by or under the laws of the United States, or by or pursuant to the laws in force in the colony of New York be- fore the nineteenth day of April, in the year seventeen hundred and seventy-five, and that every other corporation is a foreign cor- poration. A federal corporation, that is one created by or under an act of congress, is a foreign corporation, except that when located in New York it is to be considered a domestic corporation in the application of the sections of the Code of Civil Procedure, regulating allegations of corporate existence in pleadings, war- rants of attachment against property, security for costs of suit, and certain special visitorial powers enforceable by injunction, but not in the application of the sections regulating annulment of char- ter, general visitorial powers and dissolution. A federal corpora- tion is located in the state in which its principal office is situated.* The United States government is a foreign corporation.^ § 2. Corporation of two states. — It is believed that no trading corporation has been incorporated in more than one state, but any grant of power to a foreign corporation by a legislature may raise a question of incorporation. A corporation created by two states may not sue as such in a federal court as it remains a separate corporation in each state for the' purposes of federal court juris- diction;^ but its acts and neglects are done by it as a whole.' Where a corporation of one state obtains legislative authority of another state to operate in the other state, it is a question of leg- islative intent whether a new corporation is created in the other state or whether the statute is a license or enabling act only.^ Such • Eosenbaum v. Union P. Ry. Co., 2 How. Pr. N. S. 45. •Matter of Merriam, 141 N. Y. 479. ' See see. 229, infra. ' Home T. Boston & M. R. R. Co., 18 Fed. 50, U. Sj Cir. Ct., D. N. H. •Railroad Co. v. Harris, 79 U. S. (12 Wall.) 65; Southern & A. t. Co. V. New Orleans, M. & T. R. Co., 22 Fed. Cases, 816, No. 13,185, U. S. Cir. Ct., S. D. Miss.; Copeland v. Memphis & C. R. Co., 3 Woods, 651, a. c. 6 Fed. Cases, 501, No. 3,209, U. S. Cir. Ct., N. D. Ala.; Blackburn v. Salem, M. & M. Introduction. 3 legislative intent is primarily a question for home construction, that is of the courts of the state where the statute was enacted;^ hut, in the absence of a controlling decision there, courts in other states will determine the question. The title of the statute may be looked to to find the intent.^" Apt words, like " to charter it,"" " it shall be a legal corporation,"^^ " to constitute it a corpora- tion,'"^ " it shall become a body politic and corporate,"" or " an act to incorporate it,"^^ create a new corporation. A separate or- ganization is not necessary ;^^ nor are provisions for stock and in- ternal government." A new corporation is not created by a second state by granting to a corporation of one state the same rights and subjecting it to> the same obligations as were granted to it in its home state ;^' nor by conferring upon it a limited privilege of taking and holding real and personal property ;" nor by granting it all the powers granted by its incorporating state and all the powers and immunities panted to similar corporations in the second state to the same ex- tent as if incorporated in the second state ;^'' nor by confirming a lease to it of a railroad in the second state and authorizing it to R. Co., 2 Flip. 525; s. c. 3 Fed. Cases, 526, No. 1,467, U. S. Cir. Ct., W. D. , Tenn.; Uphoflf v. Chicago, St. L. & N. 0. R. Co., 5 Fed. 545, U. S. Cir. gt., D. Ky. " Blackburn v. Selma, M. & M. E. Co., supra. " Southern & A. T. Co. v. New Orleans, M. & T. K. Co., supra; Copeland v. Memphis & C. E. Co., supra. " Uphoflf V. Chicago, St. L. & N. 0. E. Co., supra. " Stout V. Sioux City & Pi R. R. Co., 3 McCr. 1 ; s. c, 8 Fed. 794, U. S. Cir. Ct., D. Neb. "Louisville Trust Co. v. Louisville, N. A. & C. R. R. Co., 22 C. C. A. 378; B. c, 75 Fed. 433, U. S. Cir. Ct. of Ap., 6th Cir., affirmed 174 U. S. 552. "Western &. A. R. R. Co. v. Roberson, 61 Fed. 592; s. c., 9 C. C. A. 646, U. S. Cir. Ct. of Ap., 6th Cir. " Copeland v. Memphis & C. R. Co., supra. " Blackburn v. Selma, M. & M. R. Co., supra. "Louisville Trust Co. v. Louisville, N. A. & C. R. R. Co., supra. "Railroad Co. v. Harris, 79 U. S. (12 Wall.) 65. "Matter of Prime, 136 N. Y. ?47. "Missouri, K. & T. R. Co. v. Texas & St. L. R. Co., 4 Woods, 360; s. c, 10) Fed. 497, U. S. Cir. Ct., N. D. Texas. ' 4 Conditions of Doing Business. operate the road f^ nor by authorizing it to construct and operate a railroad in the second state and providing that it shall be deemed a domestic corporation in all suits upon causes of action arising in the second state ;^^ nor by authorizing it to construct its railroad through a part of the second state and to purchase real property there for that purpose;^' nor by gTanting it a right of way for its railroad f'^ nor by conferring privileges ;^° nor by allowing it to run trains. ^^ § 3. De facto, migratory, pretended and defunct corpora- tions. — ^A foreign corporation plaintiff may show a user of corpo- rate franchises under color of a statute of its home state author- izing incorporation and the defendant's dealings with it as a corporation in order to justify a suit by it as a corporation de facto, although it fails to show a strict compliance with such incorporating statute." A plaintiff's certificate of incorporation and user of cor- porate powers prove prima facie its corporate existence as to a per; son making a contract with it as a corporation, although the statute of the home state authorizing such certificate is not proved.^* In an action by a foreign corporation it is prima facie proof of the plaintiff's existence as a de facto corporation, sufiicient to enable it to maintain the action, that the contract sued on and prior contracts were made by the defendant with the corporation in its corporate name and capacity.^' A New York court will determine that a "Wilkinson v. Delaware, L. & W. R. R. Co., 22 Fed. 353, U. S. Cir. Ct., D. N. J. '^ Moore v. Chicago, St. P., M. & 0. R. Co., 21 Fed. 817, U. S. Cir. Ct., D. Miss. •" Dennistown v. New York & N. H. R. R. Co., 1 Hilton, 62. "Goodlett V. Louisville Railroad, 122 U. S. 391. "Goodloe V. Tennessee, C. I. & R. R. Co., 117 Fed. 348, U. S. Cir. Ct. N. D. Ala. N. D. " St. Joseph & G. I. R. R. Co. v. Steele, 167 U. S. 659. "Bank of Toledo v. International Bank, 21 N. Y. 542, followed in Lancaster V. Amsterdam Imp. Co., 140 N. Y. 576. " United States Vinegar Co. v. Schlegel, 143 N. Y. 537. " Commercial Bank of Keokuk v. Pfeiflfer, 108 N. Y. 242. This action seems to have been commenced prior to the enactment of Code of Civil Procedure, sec. 1,775, printed in the appendix. IsTTEODUCTIOrr. 5 body is not a corporation de facto if its promoters had no intention of becoming a corporation when they complied in part with the in- corporating statutes of a foreign state.'" The construction of a court of the home state of the statute under which a foreign cor- poration attempted to incorporate will be followed by a New York court and a stockholder 'will not be held as a partner as prescribed by such statute for a failure to comply therewith if such court has determined that the corporation legally incorporated." If a cor- poration of one state attempts to consolidate with a corporation of another state contrary to a statute of such other state, the consoli- dation is invalid. It is not liable for the debts of the corporation of the second state under a statute of that state making a consoli- dated corporation liable for the debts of the original corporations.^^ It is not against the public policy of this state for citizens of this state to form in another state a corporation to do business in ibis state and such a corporation will be recognized as such in the courts here.'^ It is no objection to a contract for the exchange of real property made with a foreign corporation that its incorpo- rators with one exception are citizens of this state.'* It is no answer to a suit by a foreign manufacturing corporation with a certificate of incorporation properly filed that its incorporators were not residents of the incorporating state or that it never man- ufactured within that state. Such matters can be questioned by the incorporating state only.'^ In the absence of a charter pro- vision or a statute of the home state or of this state to the contrary, the stockholders of a foreign corporation are not liable for its debts as partners or otherwise over the amount of their stock, although the corporation may have migrated from its home state and is " Card V. Moore, 68 App. Div. 327 ; s. c, 74 N. Y. Supp. 18, affirmed without opinion, 173 N. Y. 598. "' Jessup V. Carnegie, 80 N. Y. 411. "Kavanagh v. Omaha Life Asso., 84 Fed. 29S, U. S. Cir. Ct., N. D, 111. N. D. " Demarest v. Flaek, 128 N. Y. 205. " Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. "» Moxie N. F. Co. v. Baumbach, 32 Fed. 205, U. S. Cir. Ct., E. D. Texas. 6 Conditions of Doing Business. doing all of its business in this state except the holding of its an- nual meeting.^'. A corporation of one state is not incapacitated from holding and dealing in lands in another state because it does no business in its home state." But the fact that a foreign corpo- ration does all its business in this state has been considered in as- sessing its good will for franchise tax.'* Where individuals pre- tend to be officers, agents and directors of a pretended stock corpo- ration of another state, they are liable as partners in this state for goods purchased in the corporate name, irrespective of a statute of the other state making them liable.^' The president of a corpora- tion of another state cannot be held liable personally in this state to pay a judgment of a courtof this state against the corporation because as president he defended the action in which the judgment was recovered or because the corporation has not kept up its organ- ization by meetings of directors and elections of officers and he is operating its plant under the corporate name, the corporate exist- ence never has been terminated by court or by the legislature.^" " Merrick v. Van Santvoord, 34 X. Y. 208, reversing Merrick v. Brainard, 38 Barb. 574, and disapproving Bard v. Poole, 12 N. Y. 495. " New Hampshire Land Co. v. Tilton, 19 Fed. 73, U. S. Cir. Ct., D. N. H. " See sec. 71, infra. ^^ Worthington v. Griesser, 77 App. Div. 203; s. c, 79 N. Y. Supp. 52. " Tilley v. Coykendall, 172 N. Y. 587. Comity. 7 OHAPTEE II. Comity. § 4. May contract and m.ay sue and be sued in this state. — A corporation exists only within the state which granted to it a cor- porate existence, and, except for the doctrine of comity, it may not go into another state or country. It was held in England in 1Y29 that a foreign corporation by comity may sue in the courts of that country.^ In 1839 it was held by the Supreme Court of the United States that, by comity of contract the same as by comity of suit, a foreign corporation through its- agents may make valid contracts and incur binding contract obligations in other states, provided such contracts are permitted to be made by its charter and by the law of the place and are not contrary to the known policy of the state or injurious to its interests.^ So where a corporation is au- thorized by its home state in general terms to make contracts and to acquire property for the purposes of carrying on its legitimate business, and by the same authority is invested with the capacity of suing and being sued, it may, by the comity which is recognized to the fullest extent in this country, make contracts and acquire property in other states, and as to such contracts and property may seek the remedies, afforded and is bound by the obligations imposed by the laws of such states.^ Wherever a corporation goes for busi- ness it carries its charter as that is the law of its existence f also all powers grantej to it by its h^me state such as a power to mort- gage.^ It may do business and make contracts in all places where its charter allows and the local policy marked by legislative enact- ^Henriquea v. Dutch W. I. Co., 2 L'Rayinond, 1532. 'Bknk of Augusta v. Earle, 38 U. S. (13 Peters) 519, followed in Tombig- bee R. K. Co. v. Kneeland, 45 U. S. (4 How.) 16. » Taylor v. Holmes, 14 Fed. 498, U. S. Cir. Ct., W. D. No. Car., affirmed, 127 V. S. 489. * Relfe V. Kundel, 103 U. S. 222. •American W. W. Co. of I. v. Farmers' L. & T. Co., 73 Fed. 956, s. c, 20 C. C. A. 133, U. S. Cir. Ct. of Ap., 8th Cir., writ of certiorari refused without opinion, 163 U. S. 675. 8 Conditions of Doing Business. ments or constitntional proviiions do not forbid.* Congress under the clause granting to it the power to regulate commerce among the several states or other clauses of the federal constitution has no authority to limit the acquiring control or the disposition of property in one state by a corporation of another state, although such property or its product may become the subject of interstate § 5. Policy of this state.— In an early case in this state it was held that the mere fact that a foreign corporation transacts its busi- ness here, when it is not prohibited by the laws of this state from so doing, does not render contracts made by or with it void.* This state, by legislative enactment, and with or without cause, may ex- clude a foreign corporation altogether, unless it is in the employ of the federal government, or engaged in business, strictly commerce, interstate or foreign; or may prohibit agents soliciting business here for a foreign corporation prohibited from doing business here ; or may admit such corporation for any time or on any terms it dictates ; or may expel it. after it is admitted, although the condi- tions required for admission were contrary to the federal consti- tution ; or may alter or increase from time to time the conditions on which it is allowed to do business here.' Sections 15 and 16 of the General Corporation Law,^" the provisions of which sections were new in 1892, by implication accord to a foreign corporation upon its' compliance with the conditions stated the same right to transact its business in Xew York as a domestic corporation has, if the business be one which a domestic corporation may lawfully transact. It is the public policy of this state to allow a foreign corporation to do business here without limitation except as pro- " Clarke v. Central E. R. & B. Co. of G., 50 Fed. 338, U. S. Cir. Ct., S. D. Ga., E. D.; Baltimore & 0. R. R. Co. v. Koontz, 104 U. S. 12; Cowell.v. Springs Co., 100 U. S. 55; Bard >. Poole, 12 N. Y. 495; New York Floating D. Co. V. Xew Jersey Oil Co.. 3 Duer, 648. 'In re Greene, 52 Fed. 104, U. S. Cir. Ct., S. D. Ohio, W. D.; U. S. Const., art. 1, sec. 8. ' Stoney v. American Life Ins. Co., 11 Paige, 635. ' See sec. 23, infra. " L. 1892, ch. 687, sees. 15, 16, printed in the appendix. Comity. 9 vided by the legislature.^^ In 1884, the Court of Appeals said : " It is true in a certain sense, that foreign corporations come into this state and assert their existence and exercise their powers here by comity, that is, the state can, through its legislature forbid their entry and the exercise of iJieir powers here. But it is not a comity to be enforced by the courts. Unless the legislature forbids they can come here as freely as natural persons and exercise here all the powers conferred upon them by their charters subject to the same limitations imposed upon natural persons, that is, they can do no acts in violation of our laws or of our public policy. But unlessi prohibited by law, they can do here, within the limitations of their chartered powers, precisely what domestic corporations could do."^^ In 1891 the same court said: " The truth is foreign corpo- rations, are not properly to be regarded with suspicion nor should unnecessary restraints be imposed upon their doing business in our midst. They carry no black flag and the policy of all civilized nations is to grant them recognition in their courts."" So it has been held that a foreign corporation, recognized by its home state, is entitled to the same recognition in New York, unless it was formed for purposes illegal in this state or does acts prohibited by the laws of this state to its own corporations and citizens. " Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. " Hollis V. Drew Theol. Seminary, 95 N. Y. 166. " Demarest v. Flack, 128 N. Y. 205. » United States Vinegar Co. v. Schlegel, 143 N. Y. 537. 10 Conditions of Doing Business. CHAPTER III. Doing Business in New Yoek. § 6. New York statutes. — ^In 1855 two statutes were enacted in this state affecting foreign corporations doing business here, one subjected non-residents doing business here to general tax/ and the other required every insurance and other corporation created by the laws of any other state, doing business in this state, to desig- nate some person residing in each county where such corporation transacted business on whom process might be served, and provided that, in default of such designation, process might be served on any person found within this state acting as the agent of such cor- poration or doing business for it.^ In 1880 there was enacted the statute taxing annually for state purposes every corporation, in- corporated under any law of this state or incorporated under any law of any other state or country and doing business in this state, with certain exceptions.' Many statutes of this state apply to foreign corporations by im- plication but some refer in terms to those doing business here. Of the latter kind the principal ones now in force are section 15* of the General Corporation Law providing that no foreign stock cor- poration shall do business here without a certificate ; section 7^ of the Tax Law subjecting non-residents doing business here to gen- eral tax; section 182° of the Tax Law, requiring every corporation ' L. 1855, eh. 37, held to apply to foreign corporations. See sec. 33, infra. This statute has been revised in the Tax Law, L. 1896, ch. 908, sec. 7, printed in the appendix. ' L. 1855, eh. 279. p. 470. This statute has been repealed and provisions allowing the designation of an agent have been inserted in the Code of Civil Procedure, sec. 432, printed in the appendix. ' L. 1880, ch. 542, entitled, an act to provide for raising taxes for the use of the state upon certain corporations, joint stock companies and associations. This tax is known as the franchise tax and is provided for now in the Tax Law, L. 1896, ch. 908, sec. 182, et seq., printed in the appendix. ' L. 1892, ch. 687, sec. 15, printed in the appendix. ' L. 1896, eh. 908, sec. 7, pr-inted in the appendix. "L. 1896, ch. 908, sec. 182, printed in the appendix. Doing Business in New York. 11 organized under the laws of any other state or country to pay an annual franchise tax for the privilege- of exercising its corporate franchises or carrying on its business in this state ; section 7' of the Stock Corporation Law, prohibiting a domestic stock corpora- tion or a foreign corporation doing business here combining for the creation of a monopoly or the unlawful restraint of trade or for the prevention of competition in any necessary of life ; an anti- trust law* providing for the punishment of pools, trusts and con- spiracies to control rates of transportation, and applying its pro- visions to any corporation not organized under the laws of ihis sitate, engaged in the transportation business and transacting or conducting the said business or any part thereof in this state ; sec- tion 614° of the Penal Code, which provides that it is no defense to a prosecution for a violation of the provisions of the chapter of that code referred to, that the corporation is a foreign corporation, if it carries on. business or keeps an office therefor in this state; section 17" of the General Corporation Law, as to the acquisition of real property by a foreign corporation, created under the laws of the United States or of any state or' territory thereof, and doing business here ; section 60" of the Stock Corporation Law, making officers, directors and stockholders of a foreign ■stock corporation, transacting business here liable for certain acts and omissions ; sec- tion 30^^ of the Stock Corporation Law, requiring every foreign stock corporation doing business here, with certain exceptions, to file an annual report; section 1948^^ of. the Code of Civil Proced- ure, authorizing the attorney-general to maintain an action against a foreign corporation which exercises here any corporate rights, privileges or franchises not granted to it by the laws of this state, or which violates a law or the public policy of this state ; and sec- tion 1812" of the Code of Civil Procedure, applying certain other ' L. 1892, ch. 688, sec. 7, printed in the appendix. ' L. 1899, ch. '727, printed in the appendix. " Penal Code, sec. 614, printed in the appendix. " L. 1892, ch. 687, sec. 17, printed in the appendix. " L. 1892, ch. 688, sec. 60, printed in the appendix. ^^ L. 1892, ch. 688, sec. 30, printed in the appendix. '= Code Civil Pro. sec. 1948, printed in the appendix. " Code Civil Pro. sec. 1812, printed in the appendix. 12 Conditions of Doing Business. sections of that code to a corporation created by or under the laws of another state where it does business here. The question of doing business in a state is important also in determining the jurisdiction of a federal court over a foreign cor- poration. In the absence of a voluntary appearance or equivalent action, a foreign corporation cannot be sued in a federal court in personam at the suit of a resident, unless it is doing business in the district as one of the elements of being found there.'^ Like- Avise a foreign corporation nuist be doing business in the district in order to be subject to suit in a patent case under the provision of the act of congress of March 3rd, 1S07, allowing a foreign corpo- I'ation to be sued in any district where it shall have committed acts of infringement of the patent and shall have a regTilar and estab- lished place of business. '° § 7. Property interests; federal employment; interstate com- merce — In determining whether a foreign corporation is doing business in this state each case depends on its own evidential facts. The question must be decided by what tlie corporation has done ■and is doing and not by what it may do hereafter under powers re- served to it in existing contracts. Extensive property rights and valuable pecuniary intere-ts in a business managed and conducted by others are not sufficient." Every state statute affecting a for- eign corporation doing business in such state is subordinate to the rule that a corporation in the employ of the federal government is not subject to state restriction in the transaction, of such business.^* It has been held also that a prohibition in a state constitution, against a foreign corporation doing business there unless it has a place of business and an authorized agent upon whom process may be served is contrary to the act of congress of February 17th, 1793, if it imposes a restriction on navigation." Transactions which in "* See sec. 227, infra. " See sec. 230, infra. " United States v. American Bell Tel. Co., 29 Fed. 17, U. S. Cir. Ct., S. D. Ohio, E. D. " Pembina Mining Co. v. Pennsylvania, 125 U. S. 181. " New Orleans & M. P. Co. v. James, 32 Fed. 21, U. S. Cir. Ct., E. D. La. Doing Uusiness in New York. 13 themselves constitute interstate commerce are not doing business -within the meaning of a state statute regulating a foreign corpora- tion doing business in such state. Many of the cases construing such statutes are cases determining whether certain transactions are not or are interstate commerce and consequently are or are not doing business in the state. A foreign telegraph corporation engaged in interstate commerce under an act of congress cannot be excluded from doing business in a state by a state statute. Inter- state telegraphing is interstate commerce.^" A municipal license tax on interstate telegraphing is unconstitutonal.^^ A contract tO' manufacture goods and market them is not interstate commerce simply because a large amount of the manufactured product may be the subject of sale in another state.^^ In a sale of goods by a foreign corporation, having its place of business in its home state, to a resident of this state, the presumption, is that the goods were- delivered and the contract was made in the home state unless the contrary appears, and consequently that the corporation was not doing business in this state.^^ There is no inference that a foreign corporation is doing business here because its contract sued on con- sists of a letter dated in this state and addressed to it at its home office.^* Sales and contracts made by mail, telegraph, commercial travellers, canvassers, commission merchants, agents, factors and brokers will be considered in subsequent sections. ^^ Frequently a foreign corporation in this state is engaged in in- terstate commerce and at the same time in other transactions which are not interstate commerce. In such a case it is not doing busi- ness in this state in respect to the interstate transactions, while it is so doing business in respect to the other transactions. The fran- chise tax applies to foreign corporations only when doing business in this state. It has been held that a foreign corporation is liable ""■pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1. '^ Postal T. C. Co. V. Taylor, 192 U. S. 64. ^^ Diamond G. Co. v. United States, G. Co., 187 U. S. 611, affirming 103 Fed. 838. "" Aiken-Lambert & Co. v. Haskins, 27 Misc. 629; s. c, 59 N. Y. Supp. 486, affirmed without opinion, 48 App. Div. 638; s. c, 63 N. Y. Supp. 1104. "Mallon V. Rothschild, 38 Misc. 8; s. c, 76 N. Y. Supp. 710. =' See sees. 14, 15, 16, infra. li Conditions of Doing Business. to such tax if it does business here in respect to any of its transac- tions, although it is engaged also in interstate commerce in respect to other transactions; while a corporation whose business in this state is wholly interstate commerce is not liable to the tax. As stated hereafter if a corporation is doing business here in respect to any transactions it may be assessed for franchise tax on all of its business, although other transactions are interstate commerce, as the tax is on the franchise and not on the property.^^ The char- acter of the business done by it here determines whether the cor- poration is engaged in interstate commerce, so as to exempt it from franchise tax, irrespective of whether the business is done by a foreign or by a domestic corporation. Thus a foreign railroad corporation, no part of whose road is in this state, but which trans- fers its passengers and freight from its terminal in another state 'to this state by ferry boats, is engaged in interstate commerce, and exempt from franchise tax, and such tax can not be upheld as a tax on j)roperty whose situs is in this state. ^' But a cab service, commencing and ending in this state, conducted by the same cor- poration, so engaged in interstate commerce in respect to its other business, is not exempt.^* A state statute imposing an office tax on a foreign corporation for maintaining an office in the state for the use of its officers, stockholders, agents and employees, is contrary to the federal constitution, interstate commerce clause, in its appli- cation to a foreign railroad corporation whose line in foreign states forms a link in a through railroad line carrying passengers and freight in and out of tlie state imposing the tax;^' but not so in its application to a foreign mining corporation as neither mining "See seca. 62, 71, infra; Reymanii B. Co. v. Brister 179 U. S. 445; People ex rel. Parke, Davis & Co. v. Eoberts, 91 Hun, 158; 8. c., 36 N. Y. Supp. 368; affirmed without opinion, 149 N. Y. 608, affirmed 171 U. S. 658; People ex rel. Klipstein & Co. v. Roberts, 3G App. Div. 597; s. c, 55 N. Y. Supp. 950, af- firmed on opinion below without expressing any opinion as to the result had the business been wholly foreign or interstate commerce, 167 N. Y. 617; People ex rel. Connecting Terminal R. R. Co. v. Miller, 178 N. Y. 194. ^ People ex rel. Pennsylvania R. R. Co. v. Wemple, 138 N. Y. 1 ; Savage v. Atlanta H. Ins. Co., 55 App. Div. 20; s. i;., 66 N. Y. Supp. 1105. =' People ex rel. Pennsylvania E. R. Co. v. Knight, 171 N. Y. 354. ^Xorfolk & W. R. R. Co. v. Pennsylvania, 136 U. S. 114. Doing Business in JSTew York. 15 out of the state nor keeping an office in the state is interstate com- merce.^" A state statute imposing a privilege tax on sleeping cars carrying passengers iiito, through and from that state is void as to a corporation of another state owning and operating such cars under a contract with a railroad corporation as an interference with interstate commerce.^^ A state tax on sleeping cars for carry- ing passengers^ from a point within to another point within the state is not in conflict with the interstate commerce clause of the federal constitution, although the same cars carry passengers into other states. ^^ § 8. Charter purpose — To constitute doing business in a state there must be a doing of some of the works or an exercise of some of the functions for which the corporation was created.^' Under the act of congress of March 3, 1875, providing that a person may be sued in the federal courts in a district where he is found,^* it was held that a foreign corporation could not be found in a district unless it did business there' ;^^ and that a foreign railroad corpora- tion by running a train of cars with a patent brake through a state for purposes of exhibition and not of transportation is not found within the state under the said act so as to be served with process.^^ A corporation formed to manufacture, sell, dispose of and utilize liquid air is not doing business by selling stock and pre- paring machines for exhibition at a fair.^^ A corporation created by act of congress is doing business in a state if it enters into a combination with corporations in that state under the name of a '"Pembina Mining Co. v. Pennsylvania, 125 U. S. 181. "'Tennessee v. Pullman S. C. Co., 117 U. S. 51, affirming 22 Fed. 276; Piok- * ard V. Pullman S. C. Co., 117 U. S. 34; State of Indiana v. Pullman P. C. Co., 16 Fed. 193, U. S. Cir. Ct., T>. Ind. '''Allen V. Pullman P. C. Co., 191 U. S. 171. «= Chattanooga N. B. & L. Asso. v. Denson, 189 U. S. 408. " This provision was omitted in the act of March 3, 1887, now in force. »° Merchants' M. Co. v. Grand Trunk Ry. Co., 13 Fed. 358; s. c, 21 Bl. 109, U. S. Cir. Ct., S. D. N. Y.; United States v. American Bell Tel. Co., 29 Fed. 17, U. S. Cir. Ct., S. D. 0>io, E. D. =» Carpenter v. Westinghouse A-B. Co., 32 Fed. 434, U. S. Cir. Ct., S. D. Iowa, E. D. "West V. Grosvenor, 102 App. Div. 266; s. c, 92 N. Y. Supp. 429. 16 Conditions of Doia^g Business. freight system and has freight contracts made under such name.'' A foreign railroad corporation is doing business in a state if it runs its cars into that state over tracks of other corporations form- ing with them a route into that state and does business there through the manager of one of the subordinate corporations.'' A railroad corporation of one state, by extending its road into another state and operating it there, under an enabling act of that state authorizing it so to do, is doing business there, so as to be sued in a federal court there, for a tort committed in a third state.^" If a railroad corporation of one state acquires and operates the road of former corporations in its own and an adjoining state, it is doing business there and assumes the liability of the former corporations, to whose rights it succeeded, to be sued in the adjoining state, although the enabling act of that state, under which it acquired the road, did not expressly subject it to suit." A statute of one state imposing a tax on the receipts for tolls or trackage paid to a rail- road corporation of another state controlling a road in the first state, by another railroad corporation using the road for the pur- pose of interstate commerce, is not a tax on the transportation of the subjects of interstate commerce or on the receipts derived there- from or on the business of carrying it on. It is a tax on the corpo- ration on account of its property in a railroad in the first state, which tax is measured by the tolls received and so it is not in con- flict with the interstate commerce clause of the federal constitu- tion.^^ A foreign insurance company is doing business here if it sends a,n adjuster here who adjusts a fire loss as contemplated in the policy.*' Selling bullion by a mining corporation,** selling oil " Van Dresser v. Oregon R. & N. Co., 48 Fed. 202, U. S. Cir. Ct., D. Wash,, S. D. "Norton v. Atchison, T. & S. F. R. R. Co., 61 Fed. 618, U. S. Cir. Ct., S. D. Cal. "Railroad Company v. Harris, 79 U. S. (12 Wall.) 65. " Law V. Western Ry. of A.', 91 Fed. 817, U. S. Cir. Ct., N. D. Ga., W. D., appeal dismissed, 99 Fed. 1007 ; s. t., 39 C. C. A. 680. " New York, L. E. & W. R. R. Co. v. Pennsylvania, 158 U. S. 431. " Lumberman's Ins. Co. v. Meyer, 197 U. S. 407. " People V. Horn Silver Mining Co., 105 N. Y. 76, affirmed 143 U. S. 305. Doing Business in New York. 17 and refining crude oil by an oil corporation,^ manufacturing ita special articles bv a manufacturing corporation, and trading as provided in its charter by a trading corporation, are tl?e strongest ■ evidence that the corporation is doing business ; while trarns-ferring stock, holding directors' meetings, declaring and paying dividends, transmitting to the -home office money to pay dividends, Iceeping a bank^ account, and having an agent and a branch office for his convenience, in themselves, are not doing business, and are of im- portance chiefly as circumstantial evidence of the doing of the special business which the corporation was formed to do." Keep- ing an office for its president, secretary and treasurer, where its transfer books are kept, and its directors' annual meetings are held, its dividends declared and paid, and other business merely inci- dental to the regular business of every corporation is done, does Bot constitute doing business;" while the addition of having all of its piTodTict sent into this state and sold here, and of having the proceeds received here and deposited in banks here, and some loaned here, and some used for the purposes of the corporation here, and the balance transmitted out of the state, makes it a cor- poration doing business here for the purposes of franchise tax.** It has been held by the Circuit Court of the United States in this state that a foreign corporation is doing bi^siness here so as to be sued in the federal court by a resident, if its pr.esident resides here and acts continuously as such in an office here kept by it for that "People ex rel. Southern Cotton Oil Co. v. Wemple, 131 N. Y. 64. "People V. Horn Silver Mining Co., 105 N. Y. 76, affirmed 143 U. S. 305} People ex rel. Dives-Pelican Mining Co. v. Feitner, 77 App. Div. 189; s. c, 78 N. Y. Supp. 1017; Penn Collieries Co. v. MoKeever, 93 App. Div. 303; s. c, 87 N. Y. Supp. 869; Honeyman v. Colorado Fuel & I. Co., 133 Fed. 96, U. S. Cir. Ct., E. Ip. N. Y. ; Penn. Collieries Co. v. McKeever, affirmed by Court of Appeals, November 21, 1905. "People V. Horn Silver Mining Co., supra; People ex rel. Divea-Pelioan Mining Co. v. Feitner, supra. Corporations engaged in manufacturing were excepted formerly from license tax, now L. 1896, ch. 908, sec. 181, and it was held that having an office and office furniture were incidents to manufactur- ing and nQt taxable. Ppople ex r^l. Standard Wood Co. v. Roberts, 20 App. Div. 514; s. e., 47 N. Y. Supp. 122. "People V. Horn Silver Mining Co., supra . 18 ' Conditions of Doing Business. purpose. It did not appear whether or not he transacted other than routine business.^' § 9. Single transaction. — A single or occasional transaction is not doing business f unless, may be, it follows the taking out of a certificate of authority to do business here, hereafter referred to." In 1902 it was held by the United States Circuit Court of Appeals for the sixth circuit that, while a single transaction not of a char- acter to indicate a purpose to engage in business in Michigan is not doing business there, if an Illinois corporation having its shops for the making of machinery in its home state and having no shops, place of business or office in Michigan, soliciting business in that state through traveling agents or by correspondence, enters into a contract in that state with a corporation there to ©quip a sugar mill there, it is for the jury to say whether the corporation has be- gun business in that state with the purpose of transacting or carry- ing it on there.^^ It has been held also that on conflicting evidence the question whether a foreign corporation is doing business in a state is for the jury.^^ § 10. Certificate to do business here. — Taking out a certificate under section 15 of the General Corporation Law is not doing busi- ness here, as what the corporation does here and not what it is au- thorized to do controls.^'' Transactions which in themselves con- "Revens v. Southern M. & A. R. Co., 114 Fed. 982, U. S. Cir. Ct., S. D. N. Y. "o People V. Horn S. M. Co., 105 N. Y. 76, affirmed 143 U. S. 305; Commercial W. & C. Co. V. Northampton P. C. Co., 41 Misc. 242; a. c, 84 N. Y. Supp. 38; New York Architectural T. C. Co. v. Williams, 102 App. Div. 1; s. c, 92 N. Y. Supp. 808; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727; Gilchrist v. Helena, H. S. & S. Ry. Co., 47 Fed. 593, U. S. Cir. Ct., D. Mon.; Empire M. & M. Co. V. Tombstone M. & M. Co., 100 Fed. 910, U. S. Cir. Ct., D. Conn.; Caesar v. Capell, 83 Fed. 403, U. S. Cir. Ct., W. D. Tenn.; Clews v. Wood- stock Iron Co., 44 Fed. 31, U. S. Cir. Ct., S. D. N. Y.; American L. & T. Co. V. East & W. R. Co., 37 Fed. 242, U. S. Cir. Ct., N. D. Ala., S. D. ; Frawley, B. & W. V. Pennsylvania C. Co., 124 Fed. 259, U. S. Cir. Ct., M. D. Penn.} Penn. Collieries Co. v. McKeever, Court of Appeals, November 21, 1006. " See sees. 10, 18, infra. '^ Oakland S. M. Co. v. Fred W. W. Co., 118 Fed. 239. " Audenried v. East Coast M. Co., 124 Fed. 697, U. S. Cir. Ct., E. D. Penn. " People ex rel. Dives-Pelican Mining Co. v. Feitner, 77 App. Div. 189 • s. c. Doing Business in New Yoek. 19 stitute interstate commerce are not doing business here although the corporation obtained a certificate under section 15 of the Gen- eral Corporation Law four years prior. ^^ § 11. Wareroom; storage room; sales-room. — A trading cor- poration maintaining here a permanent wareroom, storage room or sales-room in charge of a manager, where goods are kept waiting to be sold and delivered, where they are sold and whence they are delivered is doing here the business it was formed to do.^^ A for- eign corporation is doing business here, so as to be sued in the fed- eral court by a resident, if it has an agent here having charge of a factory, the expenses of which are paid by himself and the cor- poration jointly, and the very acts out of which the suit arose were committed on work done under his management, in that fac- tory, for joint account of himself and the corporation.^' A foreign manufacturing corporation having a place in this state for the sale of its goods which are kept there for sale, paying the rent, insur- ance, taxes, repairs and salaries of employees incurred in such place, importing goods on its credit to be ^old in such place, is doing business in this state and so is liable to franchise tax. It is so doing business although all of said items are- done by a person in this state in his own name with which person the corporation keeps an account of shipments, sales and expenses^ on its books, such per- son being paid by salary and not by commissions, as under the cir- 78 N. Y. Supp. 1017. In United States v. American Bell Tel. Co., 29 Fed. 17, U. S. Cir. Ct., S. D. Ohio, E. D., and in People v. American Bell Tel. Co., 117 N. y. 241, it was held, that what a corporation has done or is doing in another state and not what it is authoried to do in contracts made by it, determines whether it is doing business there. =' People ex rel. Goetz Silk Mfg. Co. v. Wells, 42 Misc. 86; a. c., 85 N. Y. Supp. 533, affirmed without opinion, 93 App. Div. 613; s. c, 87 N. Y. Supp. 1148. " People ex rel. Crane Co. v. Feitner, 49 App. Div. 108; s. c, 62 N. Y. Supp. 1107; People ex rel. Philip Carey Mfg. Co. v. Commissioners of Taxes, 39 Misc. 282; s. c, 79 N. Y. Supp. 485; People ex rel. Reversible Collar Co. v. Feitner, 31 Misc. 553; s. c, 65 N. Y. Supp. 518; People ex rel. Sherwin Wil- liams Co. V. Barker, 5 App. Div. 246; s. c, 39 N. Y. Supp. 151, affirmed on opinion below, 149 N. Y. 623. " Hat-Sweat M. Co. v. Davis S. M. Co., 31 Fed. 294, U. S. Cir. Ct., S. D. N. Y. 20 Conditions of Doing Business. eiimstances such person i?' the agent of the corporation doing its business as its agent. Sales so made here from the stock in such place of business' here do not constitute interstate or foreign com- merce.^' .V foreign oil manufacturing corporation maintaining a sales agency and a storage warehouse in this state, selling a large portion of its oil here, refining its crude oil here, delivering it to purchasers here and depositing in banks here large sums for use in its business is doing business in this state and so is liable for fran- chise tax.^' It has been held that a Georgia annual occupation tax on every company dealing in sewing machines is not contrary to the interstate commerce clause of the federal constitution.^" A foreign corporation may be taxed for franchise tax on all its business although most of it in this state is importing goods from Europe and selling the same in original packages, if some are sold in broken packages and some domestic goods are sold." But a corporation whose business in this state is wholly interstate com- merce is not liable to franchise tax.^^ A foreign corporation hav- ing no place of business here, constituting a firm here its selling agents on commission, the orders taken to be forwarded to the home office and to be subject to its approval and to be filled direct from there, is not doing business here although frequent consignments are made to such agents, who fill some local orders, and although the corporation has a bank account here and pays its agents by checks thereon.^^ The fact that the agents filled some local orders makes this appear to be in conflict with the authorities in the fed- eral courts. An occasional transaction however is not doing busi- "' People ex rel. Parke, Davis & Co. v. Roberts, 91 Hun, 158; s. c, 36 N. Y. Supp. 308, affirmed without opinion 149 N. Y. 608, affirmed 171 U. S. 658. "People ex rel. Southern Cotton Oil Co. v. Wemple, 131 N. Y. 64. »" Singer Mfg. Co. v. Wright, 33 Fed. 121, U. S. Cir. Ct., N. D. Ga., appeal dismissed because tax paid pending appeal, 141 U. S. 096. " People ex rel. Klipstein & Co. v. Roberts, 36 App. Div. 597 ; s. c., 55 N. Y. Supp. 950, affirmed on opinion below without expressing any opinion as to the result had the business been wholly foreign or interstate commerce, 167 K. Y. 617. " People ex rel. Connecting Terminal R. R. Co. v. Miller, 178 N. Y. 194. "People ex rel. Southern Cotton Oil Co. v. Roberts, 25 App. Div. 13; a. c, 48 N. Y. Supp. 1028. Doing Business in 'New Yoke. 21 ness. It has been held by the Supreme Court of the United States that a foreign brewing corporation having a store-room in a state and there selling and delivering beer and receiving payment there>- for, does business in that state although it is also engaged in inter- state commerce in shipping goods directly to purchasers from its brewery at home.** It has been held by the Circuit Court of the United States in Virginia that where a corporation of one state ships its goods into another state in car load lots and its agents take small quantities from the storehouse and sell them about the state and deliver them directly to purchasers, such sales are not in- terstate commerce and so the other state may impose a license tax on such agents. *° Where the depository is temporary and for the purpose of con- venience only it is not interstate commerce to deliver goods there- from. As will be stated below sales by traveling salesmen subject to the approval of the home office are interstate commerce and so are not doing business in this state. This is so although the vendor delivers the goods from its brewery out of this state to the pur- chaser in this state by its wagons going over the ferry between New Jersey and New York, and its selling agent lives in this state and goods are stored overnight at his house by the drivers of the vendor, and the agent deposits his collections to the credit of the vendor in a bank in this state. The acts of the driver and agent are merely incidental.** A foreign corporation having an office in this state with an agent who solicits orders subject to approval at the home office, the goods to be manufactured thereafter at the home office, the agent being paid by commissions and he and the corporation each paying part of the rent of the office here, is not doing business here although the goods are sent to the office here as a temporary depot for delivery to the customers.*' It has been held by the Su- "Eeymann B. Co. v. Brister, 179 U. S. 445. "American Harrow Co. v. Shaffer, 68 Fed. 750, U. S. Cir. Ct., W. D. Vir., appeal dismissed for want of jurisdiction, 166 U. S. 718. ""People ex rel. Lembeck & Betz Eagle Brewing Co. v. Roberts, 22 App. Div. 282; s. c, 47 N. Y. Supp. 949. "' People ex rel. Goetz Silk Mfg. Co. v. Wells, 42 Misc. 86 ; s. c, 85 N. Y. Supp. 533, affirmed without opinion, 93 App. Div. 613; s. c, 87 N. Y. Supp. 1148. 22 CoNDiTioxs OF Doing Business. preme Court of the United States that a corporation of one state selling pictures in another state through its traveling salesman and subsequently shipping them in bulk for purposes of con- venience only to another of its traveling salesmen in the second state to deliver to such customers is not doing business in the sec- ond state.'* § 12. Obtaining fire insurance; taking promissory notes; special partnership; contractor; trusteeship; listing bonds; or- ganizing domestic corporation and licensing machines to it. — Taking out a fire insurance policy in a domestic in- surance company through insurance brokers in this state does not constitute doing business here;'' nor does making a contract of fire insurance in the home state covering prop- erty in this state;'" nor does taking a note in compromise of a claim against a domestic corporation ;''^ nor does taking a note exe- cuted, made payable and delivered in this state in payment of goods ordered through a traveling salesman.'^ It is doing business in this state for a foreign corporation to become a special partner in a special partnership formed under the statutes of this state.'' It has been stated above that a foreign corporation cannot be sued in a federal court by a resident of the district unless it is doing busi- ness there as one of the elements of being found there. It has been held that a corporation of one state having no place of business in another state is not found in a federal court district of such other state because its ofiicer is there temporarily superintending the execution of a contract between the corporation and the federal government for work on a breakwater and is served with process •^ Caldwell v. North Carolina, 187 U. S. 622. "' Cummer L. Co. v. Associated Mf rs. M. F. Ins. Co. of N. Y., 67 App. Div. 151; a. c, 73 N. Y. Supp. 668, affirmed without opinion, 173 N. Y. 633. "Boston M. M. F. Ins. Co. v. Hendricks, 41 Misc. 479; 8. c, 85 N. Y. Supp. 44. "Creteau v. Foote & T. G. Co., 40 App. Div. 215; s. c, 57 N. Y. Supp. 1103. "Tallapoosa L. Co. v. Holbert, 5 App. Div. 559; s. c, 39 N. Y. Supp. 432. " People ex rel. Badische A. & S. Fabrik v. Roberts, 152 N. Y. 59. Doing Business in New Yokk. 23 there.'''' It has been held under a state constitutional prohibition against a foreign corporation doing business in such state without having an office and agent there that it is doubtful whether a for- eign trust company by accepting in its home state a trusteeship of a railroad trust deed on property in the other state is doing busi- ness there.'' A foreign corporation negotiating in this state a mort- gage on its property and having the bonds listed on the New York Stock Exchange is not doing business in this state.'^ A foreign tele- phone corporation, licensing its patented telephone instruments to New York corporations, by contracts which bind the licensees to pay the income accruing to them from customers to the foreign cor- poration as royalties for the licenses granted, such contracts; being made and the instruments being delivered and the royalties being paid in the home state, is not doing business in this state for pur- poses of franchise tax, as the New York corporations are indepen- dent principals and not agents of the licensor, although the foreign ■corporation was instrumental in procuring the incorporation of the New York corporations and owned a large amount of their stock, and although it was autiiorized in default of payment of royalties in some instances to collect in the name of the New York corpora- tions so much of dues ovsdng to them by customers as would pay the deficit, and in default of furnishing instruments to customers to take possession of the plant and carry on the business, and al- though in a small part of the business, to protect the patents, the New York corporations in leasing the instruments used the name of the foreign corporation, remaining, however, the equitable and .beneficial owner of the dues thereof from customers." § 13. Locus contractus. — An act of congress of March 3, 1897, provides that patent suits may be maintained in the district where " Eirich V. Donnelly C. Co., 104 Fed. 1, U. S. Cir. Ct., N. D. Ohio, E. D. "American L. & T. Co. v. East & W. R. Co., 37 Fed. 242, U. S. Clr. Ct., N. D. Ala., S. D. " Clews V. Woodstock Iron Co., 44 Fed. 31, U. S. Cir. Ct., S. D. N. Y. " People V. American Bell Tel. Co., 117 N. Y. 241 ; Conley v. Mathieson A. Works, 190 U. S. 406; People ex rel. Edison Light & P. Co. v. Kelsey, 101 ^pp. Div. 205; s. c, 91 N. Y. Supp. 709. 2i Conditions of Doing Business. the defendant is an inhabitant or where the infringement was com- mitted and the defendant has an established place of business, and nnder this statute it has been held, that a railroad corporation, maintaining an ofBce in another state but whose agent there has authority only to solicit business without power to make contracts for freight or passengers has no established place of business there." A railroad corporation of one state having an ofiSce in another state designated by a sig-n as its freight and passenger office, in charge of a general agent with power to solicit passengers and freight and to issue bills of lading for freight so solicited, is doing business there, although no part of its road- is there.'" Such a corporation is not doing business in a state, where it has no office or road, by having directors or officers resident there, or by having its cars transported across the state by a domestic corporation for hire, or by having the domestic corporation sell through tickets over the roads of both corporations for the convenience of passen- gers, or by being a member of a freight soliciting agency there in connection with other roads for through freight.^" It is not doing business in a federal court district, so as to be found there subject- ing it to suit there, simply because it has there a passenger agent to solicit travel but having no authority to sell tickets; although it may have employed him to settle the claim of the plaintiff f^ and although it has furnished him with desk room in an office occupied by several corporations and has its corporate name painted on the window ; and although a local statute provides that service 6i pro- cess on a corporation whose president is absent may be made on any agent found in the county.*^ There is an old case in this state under the act of 1855, requiring every corporation created by the laws of any other state doing. business here to designate a person "Weller v. Pennsylvania R. E. Co., 113 Fed. 502, U. S. Cir. Ct., D. Col. '"Denver & R. G. R. R. Co. v. Roller, 100 Fed. 738, U. S. Cir. Ct. of Ap., Qth Cir.; Block v. Atchison, T. & S. F. R. R. Co., 21 Fed. 529. " Earle v. Chesapeake & 0. Ry. Co., 127 Fed. 235, U. S. Cir. Ct., E. D. Penn. » Maxwell v. Atchison, T. & S. F. R. R. Co., 34 Fed. 286, U. S. Cir. Ct., E. D. Mich. " N. K. Fairbanks & Co. v. Cincinnati, N. 0. & T. P. Ry. Co., 54 Fed. 420,. U. S. Cir. Ct. of Ap., 7th Cir. Doing Business in JSTew Yobic. 25 upon whom process might be served, which held that a foreign railroad corporation is not doing business here becaus-e by its agent it sells here tickets for passiage over its road in another state.*' § 14. Contracts by mail .and telegraph. — It is not doing busi- ness in this state for a foreign corporation to make sales or pur- chases or other contracts by letters or telegrams sent to and from the home office." The subsequent performance of such contract within this state in itself may be doing business here. A state statute prohibiting a fire insurance corporation of another state issuing policies unless its agent has procured a license as pre- scribed, does not affect a policy negotiated by the agent, if the policy is issued at the home office and mailed from there direct to the assured.*^ Under the act of congress of March 3, 1875, pro- viding that a person might be sued in the federal court in a dis- trict where he is found it was held that a foreign corporation could not be found in a district unless it did business there,^" and that a foreign manufacturing corporation, by making purchases of raw materials in another state by correspondence or by sending an a^ent therefor that purpose, but without maintaining an office or agent there, is not found within the said state under the said act.^^ Under the act of congress of March 3, 1887, now in force, a foreign cor- poration may be sued in a federal court in another district only by a resident of that district. It may not be sued by a resident un- less it is doing business in the district so as to be found there.^* It has been held that a foreign insurance corporation is not doing business in a state so as to be subject to service of process in per- sonam in a federal court as prescribed by a local statute, because it has issued a few policies to residents there by mail, or because its =" L. 1855, ch. 279. Doty v. Michigan C. R. R. Co., 8 Abb. Pr. 427. '^Murphy Varnish Co. v. Connell, 10 Misc. 553; s. c, 32 N. Y. Supp. 492; Vaugjian Mach. Co. v. Lighthouse, 64 App. Div. 138; s. c, 71 N. Y. Supp. 799; Shelby S-T. Co. v. Burgess Gun Co., 8 App. Div. 444; s. c, 40 N. Y. Supp. 871. »» Hyde v. Goodnow, 3 N. Y. 266. "■ See sec. 8, supra. " St. Louis W-M. Co. V. Consolidated B-W. Co., 32 Fed. 802, U. S. Cir. Ct, E. D. Mo. E. D. ™ See sec. 227, infra. 26 Conditions of Doing Business- policies are held there by residents there, or because in a few cases for convenience it has collected premiums through the cashier of a local bank.^ § 15. Commercial travelers and canvassers. — The authorities in this state like those of the federal courts hold that sales by trav- eling salesmen, made subject to approval at the home office, from whence the goods are shipped to the purchaser direct, are interstate commerce and do not constitute doing business in this state;'" al- though the vendor has a large bank balance here and leases an office here where it keeps valuable samples.'' A corporation of one state in a federal court in another state may recover damages for the breach of a contract made in the second state to manufacture and sell and deliver on board cars in its home state goods, without com- plying with a statute of the second state requiring it to file a cer- tain certificate before doing business in that state, as such contract relates to interstate commerce not within the purview of state laws and as a single transaction is not doing business.'^ A state tax on foreign corporations transacting business in a state is void as a regulation of interstate commerce, so far as it applies to sales from the home office through commercial travelers, and a contract not valid until countersigned at the home office is not made in the other state, because it is signed there by the other party and by the cor- poration's agent.'^ An English corporation by selling to residents of one of the United States through agents in such state goods to «»Frawley, B. & W v. Pennsylvania C. Co., 124 Fed. 259, U. S. Cir. Ct., M. D. Penn. •"Waller v. Rothfield, 36 Misc. 177; s. c, 73 N. Y. Supp. 141; Murphy Var- nish Co. V. Connell, 10 Misc. 553; s. c, 32 N. Y. Supp. 492; Tallapoosa Lum- ber Co. V. Holbert, 5 App. Div. 559; s. c, 39 N. Y. Supp. 432; American B. & B. Co. V. Addickes, 19 Misc. 36; s. c, 42 N. Y. Supp. 871; National K. Co. V. Bronner, 20 Misc. 125; s. c, 45 N. Y. Supp. 714; Jones v. Keeler, 40 Misc. 221; s. c, 81 N. Y. Supp. 648; Cummer L. Co. v. Associated Mfrs. M. F. Ins. Co. of N. Y., 67 App. Div. 151; b. c, 73 N. Y. Supp. 668, affirmed without opinion, 173 N. Y. 633. " People ex rel. H. B. Smith Co. v. Roberts, 27 App. Div. 455 ; s. c, 50 N. Y. Supp. 355. •"Cooper Mfg. Co. v. Ferguson, 113 U. S. 727. "Aultman M. & Co. v. Holder, 68 Fed. 467, U. S. Cir. Ct., E. D. Midh., affirmed 169 U. S. 81. DoiSg Business in New Yoek. 27 be shipped from England to the purchasers direct is engaged in commerce between a foreign country and the United States, and is not affected by a statute of such state prescribing conditions as to the right to do business there.^* An act prohibiting a foreign cor- poration doing business in a state until filing a copy of its charter and complying with other pre-requisites, so far as it applies to a foreign corporation which sends traveling agents into the state to sell goods manufactured and kept without the state, is void as an interference with interstate commerce.^' A foreign corporation is not doing business here by obtaining orders for publications by canvassers,^^ or by soliciting advertisements for such publications by traveling solicitors, subject to approval at the home office.^' A foreign newspaper publishing corporation is doing business here if it has a regularly employed agent to solicit advertisements and to execute advertising contracts binding on the corporation.^' § 16. Commission merchants; agents; factors; brokers. — It is not doing business in this state to take orders here by commission merchants who forward them to the home office whence the goods are sent to the purchasers direct f^ or to ship goods here on orders delivered elsewhere ;"" or to ship goods here to a factor as distin- guished from an agent. ^"^ An agent having entire charge of the business of a foreign corporation done here is not a factor because he does the business in his own name if in reality he is its agent. "^ A corporation of one state is not doing business in another state •* Wagner v. J. & G. Meakin, 92 Fed. 76, U. S. Cir. Ct. of Ap., 5th Oir. *= Davis & R. B. & M. Co. v. Dix, 64 Fed. 406, U. S. Cir. Ct., W. D. Mo., C. D. »Crocl Bedford v. Eastern B. & L. Asso., 181 U. S. 227, modifying and affirming 88 Fed. 7. '"Lindheim v. Sitt, 33 Misc. 62; s. c., 68 N. Y. Supp. 145. '■^ Kinney v. Eeid I. C. Co., 57 App. Div. 206; s. c, 68 N. Y. Supp. 325. "" Halsey v. Henry Jewett D. Co., N. Y. Law Journal, June 3, 1905. Pee-requisites of DoiiirG Business. 49 181 does not prohibit tlie maintainanee of an action by the as- signee of a foreign corporation."* It has been held that a foreign corporation's assignee of a book it proposes publishing, including the right to make advertising contracts therein in the name of the corporation, is not its assignee of a contract for advertising in the book, subsequently executed between the assignee and an adver- tiser, although the assignee made the contract in the name of the corporation."^ § 29. Id.; suit in federal court. — There has been an assump- tion that the prohibitions in section 15 of the General Corporation- Law and section 181 of the Tax Law against the maintenance of any action and against any recovery in any court in this state apply to the federal courts in this state."^ The decisions of the federal courts in other states, however, do not support it. As already stated, the Court of Appeals of this state has decided that sections 15 and 181 do not render void a contract made in viola- tion of its provisions.'"'^ Such determination is binding on a fed- eral court, as a state court construction of a local statute.^"* And it seems that it is not within the power of this state to prohibit suit in a federal court on a contract which is not void."' § 30. Pleading compliance with statutory requirements. — The objection that a foreign corporation plaintiff has not com- '" Box B. & L. Co. V. Vineennes P. Co., 45 Mise. 1 ; s. c, 90 N. Y. Supp. 836, affirmed without opinion, 90 N. Y. Supp. 1089. "™>Nieoll V. Clark, 13 Misc; 128; s. c, 34 N. Y. Supp. 159. ^"'Goddard v. Crefeld Mills, 75 Fed. 818; s. c, 21 C. C. A. 530, U. S. Cir. et. of Ap., 2d Cir.; Simplex Dairy Co. v. Cole, 86 Fed. 739, U. S. Cir. Ct., S. D. N. Y. ^°' See sec. 26, supra. "= Telluride P. T. Co. v. Rio Grande W. Ry. Co., 187 U. S. 569 ; Chattanooga N. B. &, L. Asso. V. Denson, 189 U. S. 408. '""Oregon Nat. Bank v. Traver, 7 Fed. 146, U. S. Cir, Ct., D. Oregon; Eastern B. & L. Asso. v. Bediord, 88 Fed. 7, U. S. Cir. Ct., W. D. Tenn. W. D., modified and affirmed without passing on this point, 181 U. S. 227; Sullivan v. Beck, 79 Fed. 200, U. S. Cir. Ct., D. Ind.; Blodgett v. Lanyon Zinc Co., 120 Fed. 893, U. S. Cir. Ct. of Ap., 8th Cir. But see Upited States Rubber Co. v. Butler B. S. Co., 132 Fed. 398, U._ S. Cir. Ct., D. Colo. • 4. 50 Conditions of Doing Business. plied with section 181 of the Tax Law is a matter of aflBrmative defense, and must be taken by demurrer if it appears on the face of the complaint,"" and by answer if it does not appear on the face of the complaint."^ If not taken by demurrer or answer, it is deemed to have been waived."^ It has been held by the Court of Appeals that since section 15 of the General Corporation Law was amended in 1901, by prohibiting an action unless the certificate was obtained before the contract was made, compliance with that section by taking out a certificate is a condition precedent to an action and that a complaint which does not allege it is demurrable upon the ground that it appears on the face of the complaint that the plaintiff has not legal capacity to sue and also upon the ground that it appears on the face of the complaint that it does not state facts sufiicient to constitute a cause of action. It would seem from the report of the case that it did not appear on the face of the complaint that the plaintiff had not taken out a certificate, and that it was doing business in this state, and that the contract sued on was made in this state, and that no point was made as to any of such matters/" If a foreign corporation pays the license tax under section 181 before procuring a certificate under section 15, it cannot sue on a contract made after it paid the tax and be- fore it procured the certificate.'^" A foreign corporation plaintiff need not allege in its affidavits tO' procure a warrant of attachment against property or to obtain an order of arrest of the person that it has complied with section 181, but must show compliance with section 15 or that that section does not apply to the case in suit."^ Before section 15 was amended in 1901, as above stated, it was held that the objection of non-compliance therewith was an affirm- "° Code Civil Pro. sec. 488. As to whether in such case the objection must be taken by demurrer or may be taken by answer, compare Seamans V. Barentsen, 180 N. Y. 333. ™ Id. sec. 498. "^Id. sec. 499. Charles Roome Parmele Co. v. Haas, 171 N. Y. 579. ""Welsbach Co. v. Norwich G. & E. Co., 96 App. Div. 52; s. c, 89 N. Y. Supp. 284, affirmed without opinion, 180 N. Y. 533; overruling Portland Co. V. Hall, 95 N. Y. Supp. 36. "* F. J. Emmerich Co. v. W. & J. Sloane, 46 Misc. 513 ; s. c, 95 N. Y. Supp. 39 ; affirmed on opinion below, — App. Div. — . "•See sec. 211, infra. Peje-bequisites of Doing Business. 51 ative defense,"* and that if the objection was not raised by the pleadings, it could not be raised on the trial;"' and that if it was not set up in the answer or raised on the trial it was not avail- able on appeal ;"^ and that after an action had been tried and re- versed on appeal and sent back for a new trial, it was too late to amend the answer by setting up such defense, if the fact was dis- closed on the first trial and no motion to amend the answer wasi made then."' Probably these decisions under section 15 are ap- plicable now to section 181. To establish the defense of non- compliance with section 181 the defendant must show not only that the foreign corporation has not paid the license tax, but also that it is doing business here, and such other facts as would make it liable for the tax. Proof that it is doing business here at the time of the trial is not sufficient.™ The testimony of the agent of the corporation that at the time in question it was doing busi- ness here is an opinion and not proof of the fact.-^^^ It is within the discretion of the trial court to direct that a defemse in an answer that a foreign corporation plaintiff has not complied with section 181 be separated from another defense.^^ "•O'Reilly S. & F. Co. v. Greene, 18 Misc. 423; s. c, 41 N. Y. Supp. 1056; Nicoll V. Clark, 13 Misc. 128; s. c, 34 N. Y. Supp. 159; International Society V. Dennis, 76 App. Div. 327; s. i;., 78 N. Y. Supp. 497; W. P. Fuller & Co. V. Sehrenk, 58 App. Div. 222; s. c, 68 N. Y. Supp. 781, affirmed without opinion, 171 N. Y. 671; Lehigh & N. E. R. Co. v. American B. & T. Co., 40 Misc. 698; s. c, 83 N. Y. Supp. 191; Criehton v. Columbia Ins. Co., 81 App. Div. 614; s. c, 81 N. Y. Supp. 363. "' St. George V. Co. v. Fritz, 48 App. Div. 233 ; s. c, 62 N. Y. Supp. 775. "»City Trust, S. D. & S. Co. of P. v. Wilson Mfg. Co., 58 App. Div. 271; s. c., 68 N. Y. Supp. 1004.. ""Guttentag v. Whitney, 82 App. Div. 145; s. c, 81 N. Y. Supp. 701. '='° Onderdonk v. Peale, P. & K., 104 App. Div. 195; s. c., 93 N. Y. Supp. 505; Stern v. Childs, 26 Misc. 419; s. c., 56 N. Y. Supp. 192; Humphrey v. Sniffen, N. Y. Law Journal, March 4, 1904. "' M. S. Huey Co. v. Eothfeld, 84 N. Y. Supp. 883. ""Belsena C. M. Co. v. Liberty D. Co., 27 Misc. 191; s. c, 57 N. Y. Supp. 739. 52 Conditions of Doing Business- CHAPTER V. General Tax. § 31. Definition. — There is levied annually throughout the state a general tax to meet the expenses of the state, county and city (or town) governments. It is assessed and collected by local authorities, whence it gets the additional name of local tax. The portion of the tax required for state jDurposes is about to be wiped out owing to the revenue collected for state purposes by indirect taxes, such as the liquor tax, the transfer tax on property of dece- dents, the stock transfer tax, the mortgage tax, and the franchise tax on corporations hereafter mentioned. When this is done the general tax will become a local tax in fact. Corporations paying the franchise tax have always been exempt from so much of the general tax as was required for state purposes, but this did not ex- empt them from general tax for county and municipal purposes.^ The general tax applies to individuals and corporations alike and to all real and personal property within the state unless exempt from taxation by law. The local assessors prepare an annual assessment-roll of all real and personal property in their tax dis- trict assessed at its actual value. The grand total of such roll is divided by the total expenses of the government for the current year apportioned to that tax district, after deducting therefrom the amount collected by various indirect taxes and from other sources, and the result is the tax rate for the year. The city of Kew York is a tax district and the annual rate there varies in the neighborhood of one and a half per centum. § 32. Real property. — Eeal property owned by a corporation is assessed in the tax district in which it lies, in the same manner as if it were owned by an individual. Eeal property owned by a resident of the tax district is assessed to the owner; if owned by a resident outside of the tax district, it is assessed, if occupied, to " See see. 79^ infra. General Tax. 53 the occupant, and if unoccupied, or the occupant resides out of the district, as non-resident.^ Eeal property of a foreign corpora- tion, having its principal place of business in this state outside of the tax district where the property is situated is assessed as non- resident.^ § 33. Tax on capital stock. Place of taxation. — Unlike the case of individuals, the personal property of a corporation is not assessed as such, but its capital stock is assessed as below stated. This is true of a foreign corporation the same as of a domestic cor- poration. The Tax Law provides that non-residents of the state, doing business in the state, either as principals or partners, shall be taxed on the capital invested in such business, as personal prop- erty, at the place where such business is carried on, to the same extent as if they were residents of the state. This provision is an re-enactment of a statute of 1855, which was held to include foreign corporations as well as individual non-residents.* It is as a condition of doing business, here that this state levies the gen- eral tax on a foreign corporation,^ but its property invested in business here, to which the tax is limited by the terms of the statute, is taxable as property having its situs within the state.* The statute of 1855 was held to be constitutional.' An agent in ^ L. 1896, ch. 908, sees. 11 and 9, printed in the appendix. 'New York Milk Products Co. v. Damon, 57 App. Div. 261; s. c, 68 N. Y. Supp. 183, affirmed on opinion below, 172 N. Y. 661. * L. 1896, ch. 908, sec. 7, printed in the appendix, re-enacting L. 1855, ch. 37, without change of substance; International Life Ass. Soc. v. Commis- sioners of Taxes, 28 Barb. 318; British C. L. Ins. Co. v. Commissioners of Taxes, 1 Keyes, 303; s. c, 1 Abb. Ct. of Ap. 199; People ex rel. Thurber, Whyland Co. v. Barker, 141 N. Y. 118; People ex rel. Sherwin Williams Co. V. Barker, 5 App. Div. 246; a. c, 39 N. Y. Supp. 151, afBrmed on opinion below, 149 N. Y. 623; People ex rel. Hawley Box & Lumber Co. v. Barker, 23 App. Div. 532; s. c, 48 N. Y. Supp. 557; People ex rel. Yellow Pine Co. v. Barker, 23 App. Div. 524; s. c, 48 N. Y. Supp. 553, affirmed on opinion below, 155 N. Y. 665. ° See sec. 21, supra. "Adams Ex. Co. v. Ohio State Auditor, 165 U. S. 194, rehearing denied, 166 U. S. 185; Adams Ex. Co. v. Kentucky, 166 U. S. 171; Coulter v. Weir, 127 Fed. 897, U. S. Cir. Ct. of Ap., 6th Cir. 'Duer V. Small, 4 Blatch. 263; s. c, 7 Fed. Cases, 1164, No. 4116, U. S. Cir. Ct., S. D. N. Y.; s. c, 17 How. Pr. 201. 54 Conditions of Doing Business. this state of a foreign corporation can not be taxed individually for the property of the corporation. He is not a principal or partner under the statute. Such assessment is void and may be attacked collaterally.* All the personal property of a corporation liable to taxation on its capital shall be assessed in the tax district where the principal office or place for transacting its financial concerns shall be, or if it have no principal office or place for transacting its financial concerns, then in the tax district where its operations shall be carried on. The assessment at such place is exclusive, and embraces all its personal property liable to taxa- tion in this state. In the case of a foreign corporation, the per- sonal property assessed is that invested in the business done by it in this state.' § 34. Statement by corporation. — Sections 27 and 28 of the Tax Law prescribe that every taxable corporation shall make an annual statement or report to the assessors. The following is the language of the law: "The president or other proper officer of every monied or stock corporation, deriving an income or profit from its capital or otherwise, shall, on or before June 15th, de- liver to one of the assessors of the tax district in which the com- pany is liable to be taxed, a written statement specifying: 1. The real property, if any, owned by such company, the tax district in which the same is situated, and, unless a railroad corporation, the sums actually paid therefor. 2. The capital stock actually paid in and secured to be paid in, excepting therefrom the sums paid for real property and the amount of such capital stock held by the state and by any incorporated literary or charitable insti- tution. 3. The tax district in which the principal office of the company is situated, or, in case it has no principal office, the tax district in which its operations are carried on. Such statement Bhall be verified by the officer making the same to the effect that it is- in all respects just and true. If such statement is not made •McLean v. Jephson, 123 N. Y. 142. 'L. 1896, eh. 908, sees. 7 and 11, printed in the appendix; People ex rel. Bay State Shoe & Leather Co. v. McLean, 80 N. Y. 254; British C. L. Ins. Co. V. Commissioners of Taxes, 1 Keyes, 303; s. c, 1 Abb. Ct. of Ap. 199. General Tax. 55 "within twenty days after the 15th day of June, or is insufficient, evasive or defective, the assessors may compel the corporation to make a proper statement by mandamus." In case of neglect to furnish such statements within thirty days after the time above provided, the company so neglecting shall forfeit to the people of this state for each statement so omitted to be furnished, the sum of two hundred and fifty dollars, and it shall be the duty of the attorney-general to prosecute for such penalty upon information which shall be furnished him by the comptroller. Upon such statement being furnished and the costs of the suit being paid, the comptroller, if he shall be satisfied that such omission was not willful, may in his discretion discontinue such suit.^" If the cor- poration omit to furnish such statements the assessors have juris- diction to make an assessment of its capital stock at a valuation determined from the best information they can obtain.^^ Sections 27 and 28 are re-enactments of similar provisions in the Revised Statutes of 1828-9, which had never been amended, however, to conform to the statute of 1857, now section 12 of the Tax Law, regulating the assessment of the capital stock of a corporation as mentioned in the next section. As below stated, a similar pro- vision of the Revised Statutes, likewise unamended, now section 31 of the Tax Law, regulating entries to be made in the assessment roll, has been construed by the courts, so as to conform it to the ■statute of 1857, now section 12. A similar construction should be placed on sections 27 and 28. As below stated the assessors ■are required to insert in the roll the actual value of the real and personal property of the corporation, after excepting so much thereof as represents capital, or stock belonging to the state, or to literary or charitable corporations, or is exempt from taxation by law, and adding so much of its surplus profits or reserve funds as exceed ten per centum of its capital, and deducting the assessed value of its real property, all shares of stock of other corporations^ actually owned by it, which are taxable on their capital stock under the laws of this state, and its debts, except the general " L. 1896, ch. 908, sec. 27, 28, printed in the appendix. " See sec. 46, infra. 56 Conditions of Doing Business. debts of a foreign eorporation not incurred in the purchase of property invested by it in its business in this state. It follows that the statement of the corporation to the assessors should con- tain the data necessary to enable the assessors to make such entries in the roll. In the city of New York, the commissioners furnish a blank specifying what is desired. § 35. Method of assessment. — In 1857 a statute was passed'^ regulating the method of assessment of corporations liable to taxa- tion, obviously including foreign corporations so made liable to taxation by the statute of 1S55 as above mentioned. A method had been provided by the Revised Statutes of 1828-9, but it was superseded by the statute of 1857 so far as inconsistent. Both methods have been re-enacted in sections 12 and 31 of the present Tax Law, but it has been held that by reason of the order of the enactment of the original provisions, section 12 supersedes section 31 so far as inconsistent." Section 31 provides that the assessors shall assess corpoi-ations liable to taxation in their repective tax districts upon their assessment rolls in the following manneir: 1. In the first column the name of each corporation, and under its name the amount of its capital stock paid in and secured to be paid in; the amount paid by it for real property then owned by it wherever situated ; the amount of all surplus profits or reserve funds exceeding ten per centum of their capital, after deducting therefrom the amount of said real property and the amount of its stock, if any, belonging to the state and to incorporated literary and charitable institutions. 2. In the second column the quan- tity of real property, except special franchises, owned by such cor- poration and situated within their tax district ' 3. In the third column the actual value of such real property, except special fran- chises. 4. Tn the fourth column the amount of the capital stock paid in and secured to be paid in, and of all of such surplus profits or reserve funds as aforesaid, after deducting the sums paid out for all the real estate of the company, wherever the same may be " L. 1857, ch. 456, sec. 3. " People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195. CrENEEAL TaX. 57 situated, and then belonging to it, and the amount of stock, if any, belonging to the people of the state and to incorporated liter- ary and charitable institutions. 5. In the fifth column the value of any special franchise owned by it as fixed by the state board of tax commissioners." Section 1-2 provides that the capital stock of every company liable to taxation, except such part of it as shall have been excepted in the assessment-roll or shall be exempt by law, together with its surplus profits or reserve funds exceeding ten per centum of its' capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations actu- ally owned by such company which are taxable upon their capital stock under the laws of this state, shall be assessed at its actual value. ^' The words " except such part of it as shall have been excepted in the assessment roll " in section 12 refer to stock of the cor- poration belonging to the people of the state or to incorporated literary and charitable institutions, required tO' be de- ducted by section 31. The words " except such part of it as * * * shall be exempt by law " in section 12 refer to the gen- eral exemptions from taxation prescribed in section 4 of the Tax Law." A tax upon the actual value of the capital is a tax upon the property in which such capital is invested. If any of such prop- erty is exempt from taxation, the value thereof must be excepted from any assessment of the capital." The words " after deducting * * * all shares of stock in other corporations actually owned by such company which are taxable upon their capital stock under the laws of this state " in section 12 have analogy to the words " except such part of it as * * * shall be exempt by law " in the same section in part, as section 4 provides that the owner or holder of stock in an incorporated company liable to taxation on its capital shall not be taxed as an individual for such "L. 1896, ch. 908, sec. 31, as amended by L. 1899, eh. 712, printed in the appendix. "L. 1896, ch. 908, sec. 12, printed in the appendix, re-enacting L. 1857, ch. 456, sec. 3, without change of substance. '" People ex rel. Panama R. R. Co. v. Commissioners, 104 N. Y. 240. " People ex rel. Edison El. II. Co. v. Barker, 139 N. Y. 55. 58 Conditions of Doing Business. stock. The word " individual," however, does not include a cor^ poration ordinarily. The words " except such part of it as shall have been excepted in the assessment roll," in section 12, referring to stock owned by the state or by literary or charitable corporations, are in furtherance of the words " except such part of it as * * * shall be exempt by law," in the same section, as section 4 exempts property of the state and of charitable and literary corporations, but with certain limitations not found in sections 12 and 31. The effect of section 12 on section 31 is- to provide that the as- sessment roll shall be made up as follows: In the first column, insert the name of the corporation; in the second column, the quantity of its real property, except special franchise, within the tax district; in the third column, the assessed value thereof; in the fourth column, the actual value of its real and personal prop- erty, after excepting so much thereof as represents surplus, or stock belonging to the state or to literary or charitable corpora- tions, or is exempt from taxation by law, and adding so much of its surplus profits or reserved funds as exceed ten per centum of its. capital, and deducting the assessed value of its real property, all shares of stock of other corporations, actually owned by it, which are taxable upon their capital stock under the laws of this state, and its debts, except the general debts of a foreign corpora- tion not incurred in the purchase of property invested by it in its business in this state ; in the fifth column, the value of any special franchise owned by it.^* Debts should be deducted, although the statute does not so provide. The deduction of debts will be con- sidered hereafter. A special franchise is the right of a railroad, telegraph or other quasi-public corporation to us© the streets, highways or other public places for its charter purposes, and it does not affect trading, manufacturing and like corporations. § 36. Old method of assessing capital stock ^At one time the capital stock was assessed by finding the value of the share stock. As below stated the Court of Appeals decided subsequently that " People ex rel. Twenty-third Street R. R. Co. v. Commissioners of Taxes, 95 N. Y. 554; People ex rel. Panama R. R. Co. v. Commissioners of Taxes, 104 N. Y. 240; People ex rel. Manhattan Ry. Co. v. Barker, 165 N. Y. 305. Geneeal Tax. 59 the capital stock at its actual value meant the tangible property of the corporation, not being surplus, at its actual value. While the former method vyas in use the Court of Appeals said : " The law does not prescribe how the actual value of the capi- tal stock of a corporation is to be ascertained. That is left to the judgment of the assessors, and in appraising the actual value they have a right to resort to all the tests and measures of value which men ordinarily adopt for business purposes in estimating and measuring values of property. They may take into account the business of the corporation, its property, the value of its actual assets, the amount and nature of its present and contingent lia- bilities, the amount of its dividends and the market value of its shares of stock in the hands; of individuals. They may resort to any or all of these as to them seems best, and they are not con- fined to one of them. They may take that test which they think will be most likely to give them the actual value of the stock, and they may disregard all the others. They are not bound to seek for all the evidence which bears upon value; that would be impractica- ble. The law commits the matter to their judgment and when they have exercised that, it is subject to no review or correction except as prescribed by law. One mode of arriving at the actual value of the capital stock of a corporation is to take what is some- times called the book value, which is reached by estimating all the assets asi they appear upon the corporate books, and deducting all the liabilities and other matters required to be deducted by law, and taking the balance as the measure of value for assess- ment. This seems to be a proper method for arriving at the value of the capital stock in the case of a corporation which is about to discontinue business, wind up its affairs and distribute its assets among its shareholders. But it cannot always, or usually, be a fair or correct method of assessment in the case of a going corpo- ration whose assets are to remain at the risk of its business. In the case of an insurance company, the actual value of its capital stock must usually be less than the book value, and the same must frequently be true of other corporations which are engaged in business attended with many hazards and fluctuations. In the 60 Conditions op Doing Business. ease of a eorporation the value of whose capital stock is largely made up of its franchise, good will and business advantages, the book value of its capital stock will be less than the actual value. Hence it would not be just for assessors always, or even generally, to take the book value of the capital stock of going corporations as the measure of value for the purpose of assessment. So the market value of the shares of capital stock may sometimes be above and sometimes below the actual value. Such value may be greatly enhanced or depressed for speculative purposes without any change in the actual value. But the market value of any stock which is listed at the Stock Exchange in New York, and largely dealt in from day to day for a series of months, will usu- ally furnish the best measure of value for all purposes. The competition of sellers and buyers, most of them careful and vigi- lent to take account of everything affecting value of stock in which they deal, and each mindful of his own interests, and seeking for some personal gain or advantage, will almost universally, if time suflScient is taken, furnish the true measure of the actual value of stock. But there is no law which compels assessors to resort to market value to find the actual value of capital stock. That standard is sometimes illusory and untrustworthy. The buyers or sellers may be too few and the transactions not sufficiently nu- merous to furnish a real test of value."^' This statement of the Court of Appeals lost much of its force upon the development of the rule of ascertaining the actual value of the capital stock of a eorporation by taking its tangible prop- erty, not being surplus, at its actual value, although the assessors are free now to take into consideration many of the particulars stated. § 37. Present method of assessing capital stock. — A tax upon the actual value of the capital of a corporation is a tax upon the property in which such capital is invested.^" In the case of a for- eign corporation, not only must it be doing business here, but '"People ex rel. Knickerbocker Fire Ins. Co. v. Coleman, 107 N. Y. 541; People ex rel. Butchers Hide & Melting Co. v. Asten, 100 N. Y. 597. =" People ex rel. Edison El. II. Co. v. Barker, 139 N. Y. 55; People ex rel. Union Trust Co. v. Coleman, 126 X. Y. 433. Geneeal Tax. 61 also it must have property invested in its business here, exclusive of property exempt from taxation by law. It is taxed because it is doing business here, but the statute limits the tax to its prop- erty invested in its business here. It has been said that the power of the state to tax its property extends only to such as is situated within the state ;^^ but on the contrary it is settled that the state may impose any condition on a foreign corporation for the priv- ilege of doing business here, and a tax law is such a condition, although stated to be a tax law only.^^ The question is not im- portant asi this state has not attempted to assess the general tax on a foreign corporation not doing business here ■ or upon property not situated here. What constitutes doing business in this state has been considered already.^' In assessing the capital stock of a foreign corporation, under -the present method already ex- plained, the following matters are considered: Its real property and the actual value thereof ; its personal property invested in its business here and the actual value thereof ; its surplus ; its stock belonging to the state and to literary and charitable corporations; its property exempt from taxation by law; its surplus profits or reserved funds exceeding ten per centum of its capital; the as- sessed value of its real property; all shares of stock of taxable corporations owned by it ; its debts, general and special, and those incurred in the purchase of property invested by it in its business here. Real property has been mentioned already. The other mat- ters stated will be considered in order. § 38. Taxable personal property. — Personal property for the purposes of general tax includes chattels, money, things^ in action, debts due from solvent debtors, whether on account, contract, note, bond or mortgage; debts and obligations for the payment of money due or owing to persons residing within this state, however secured or wherever such securities shall be held ; debts due by in- habitants of this state to persons not residing within the United "People ex rel. Yellow Pine Co. v. Barker, 23 App. Div. 524; s. c, 48 N. Y. Bupp. 553, affirmed on opinion below, 155 N. Y. 665. ^^ See see. 21, supra. ^See sees. 6-17, supra. 62 Conditions of Doing BrsiNESs. States for the purchase of any real property ; public stocks, stocks, in moneyed corporations, and such portion of the capital of corpo- rations liable to taxation on their capital as shall not be invested in real property. It is a general rule that all personal property situated or owned within this state is taxable, unless exempt from taxation by law.^^ The words " or owned " just mentioned were inserted in the statute in 1896; and apply only to property hav- ing no fixed situs; so merchandise and material owned by a do- mestic corporation at its factory in another state are not assess- able.^^ Under the former statute, prior to the insertion of the words " or owned," it was held that securities received in another state and kept there are not personal property situated in this state, although owned by a resident here.^° It is equally clear that as they have a fixed situs in the other state they are not as- sessable under the present statute. The assessors need not deduct capital oi a domestic corporation temporarily out of the state. Property to be exempt must be per- Pro ertv manently, positively and unequivocally out of the out of the state.^' So personal property of a domestic cor- state. poration sent out of this state to be returned when prepared for the purpose of domestic manufacture has its situs here.^ This rule is of doubtful application to a foreign corporation. As already stated, the statute limits the assessment in the case of a foreign corporation to property invested in its Fnrnitore. business here. The ofiice furniture and bank ac- count of a foreign corporation doing business in this state are property invested in such business and as such are assessable for general tax.^' " L. 1896, eh. 908, sees. 2 and 3, printed in the appendix. =^ People ex rel. Orinoka Mills v. Barker, 84 App. Div. 469; a. c., 83 N. Y. Supp. 33. =" People ex rel. Jefferson v. Smith, 88 N. Y. 577. -' People ex rel. Pacific Mail S. S. Co. v. Commissioners of Taxes, 64 N. Y.. 641. =' People ex rel. Kursheedt Mfg. Co. v. Feitner, 32 Misc. 84 j s. c, 66 N. Y.. Supp. 179. "People ex rel. Sherwin Williams Co. v. Barker, 5 App. Div. 246; 8. a» 3fl N. Y. Supp. 151, affirmed on opinion below, 149 N. Y. 623. General Tax. 63 Its stock in trade is not assessable unless the corporation is not only doing business here, but also is engaged in a continuous businessi Stock ^^ ^^^ ^^^*® ™ which such stock in trade is invested. in trade. ^^ ^^ early case it was held that a foreign manufac- turing corporation, having in this state a depot where it sella $300,000 worth of goods annually and keeps $10,000 worth of goods for sale on hand, the proceeds of sales in money or bills receivable being remitted at once to the home office, is not taxable on such goods, money or bills receivable, as the statute taxes property invested in a continuous business in this state, but not property sent here as to a market for sale.'" This was followed in 1896 ;^i but in 1898 the Court of Appeals held that bills re- ceivable for goods sold by a foreign corporation at its office in this state are assessable and also its stock of goods kept for sale in such office, if the corporation is engaged in a continuous business here evidenced by its obtaining a certificate of authority to do business here as required by section 15 of the General Corporation Law, although most of such goods were manufactured out of this state.^^ In such case the stock in trade here whether manufac- tured, here or at home is assessable. The fact that some goods are manufactured here is not controlling. It is but one of a group of evidential facts bearing upon the intent of the corporation to conduct a regular and continuous business in this state.^^ The fundamental element in determining whether a foreign corpora- tion or partnership is engaged in a continuous business here so as to render its stock in trade invested in such business assessable for general tax rests largely in the intent of the party, as gathered from the nature and character of the business carried on, the method of its conduct, and to some extent the declarations of the parties in connection therewith. The circumstances of each case " People ex rel. Parker Mills v. Commissioners of Taxes, 23 N. Y. 242. "People ex rel. Sherwin Williams Co. v. Barker, supra, overruling People ex rel. T. Martin Bros. Mfg. Co. v. Barker, 14 Misc. 382; s. c, 36 N. Y. Supp. 76. "Teople ex rel. Armstrong Cork Co. v. Barker, 157 N. Y. 159. "People ex rel. Crane Co. v. Feitner, 49 App. Div. 108; s. c, 62 N. Y. Supp. 1107. 64 Conditions of Doing Business- are to be considered in arriving at a conclusion, and tbe necessary answer in one case may not apply to another.'* In 1900 it was held by the Appellate Division that a foreign manufacturing cor- poration, manufacturing in its home state solely, procuring a cer- tificate under section 15 above mentioned, maintaining a perma- nent wareroom in this state with a general manager and an ofBce force employed and discharged by the general manager, keeping its manufactured goods there waiting to be sold and delivered, employing traveling salesmen by the general manager to sell goods throughout this state, delivering a considerable amount of the goods so sold from the wareroom in this state, and having a banlc account here in which are deposited remittances from the home office to pay current expenses, is engaged in a continuous business here so as to render its stock in trade invested in such business assessable.^' In the same year it was held by the special term of the Supreme Court that a foreign manufacturing corporation, manufacturing at home solely, procuring a certificate under sec- tion 15, doing business here for six years thereafter, having a regu- lar place of business here, having here accounts receivable and bills receivable of $2,000, stock in trade of $2,500, furniture worth $150, and cash in bank and in hand of $700, making col- lections here and remitting the balance thereof over expenses to the home ofiice, conducting its business here by a general agent, determining its terms of sale, credits and collections at its place of business here, has consummated its declared intention to do business here so declared by procuring the certificate, and there- fore is engaged in a <;ontinuous business here so as to render its stock in trade invested in suck business assessable.'* In 1902 it was held by the special term of the Supreme Court that a foreign manufacturing corporation, procuring a certificate under section 15, maintaining in this state an office, salesroom and storage room, keeping merchandise there for sale and distribution of the value "People ex rel. A. J. Tower Co. v. Wells, 98 App. Div. 82; a. u., 90 N. Y. Supp. 313, afiSrmed on opinion below, 182 X. Y. " People ex rel. Crane Co. v. Feitner, supra. "People ex rel. Reversible Collar Co. v. Feitner, 31 Misc. 553; s. c, 65 N. Y. Supp. 518. Gebteeal Tax.' 65 of $2,000, having furniture there worth $100, keeping a bank ac- count in this state with a balance of $100, is doing a continuous business here so as to render its stock in trade invested in such business assessable for general tax, although the proceeds of sale are remitted to the home office, and although it has no bills re- ceivable or accounts receivable in this state.^^ In 1904 there was decided the first of the recent cases where the procuring of a certificate under section 15 of the General Cor- poration Law was not one of the evidential facts considered in determining the liability to assessment of a stock in trade.' So far as. the report shows the corporation was doing business here without a certificate. It was held that an alien manufacturing corporation, manufacturing its go6ds in its home country, having under a yearly lease an, agency in this state for the sale of its product, the proceeds of sales over office expenses being remitted to the home office, and all goods being manufactured there and shipped here for sale as required, is doing business in this state so as to be subject to general tax, and that its office furniture is capital invested in its business here and should be assessed, but that it is not engaged in a continuous business here so as to ren- der its stock in trade invested in such business assessable.^* In the same year it was held by the special term of the Supreme Court that a foreign manufacturing corporation, manufacturing at home solely, maintaining a salesroom here, keeping there office furniture worth $300, bringing there annually $7,000 worth of goods for sale, remitting all proceeds of sales to the home office, and keeping no bank account and no books except a sales book in this state, is not engaged in a continuous business here so as to render its stock in trade invested in such business assesisable. So far as the report shows the corporation was doing business here " People ex rel. Philip Carey Mfg. Co. v. Commissioners of Taxes, 39 Misc. 282; s.''c., 79 N. Y. Supp. 485. »» People ex rel. Farcy & Oppenheim Co. v. Wells, 42 Misc. 423; s. c, 87 N. y. Supp. 84, affirmed 104 App. Div. 629; s. c, 93 N. Y. Supp. 1143_, on opinion in Sherwin-Williams case, supra; People ex rel. Farcy & Oppenheim Co. V. Wells, was reversed by the Court of Appeals on Dec. 5, 1905. 66 Conditions of Doing Business. without a certificate under section 15.^' In the same year it wag held by the Court of Appeals that a foreign partnership, which is assessable under the same statute as a foreign corporation, having a place of business at its home in Paris, maintaining a second place of business in this state for the sale and delivery of goods, holding the latter place under a five years' lease of the entire building with privilege of renewal, subletting the upper part of the building to other parties, keeping a stock in trade here of $75,000, purchasing goods abroad for sale at its place of business there and for sale at its place of business here, purchasing some with special reference to the market here, maintaining a bank ac- count here sufficient for its curren-t expenses, replacing goods sold here by new ones to be sold, some goods remaining here for sale for years, and making remittances to the home office bi-weekly or more frequently if the amounts realized from sales warranted, is engaged in a continuous business here so as to render its stock in trade invested in such business assessable, although it does no man- ufacturing itself, but purchases all its goods for sale, except a small part on consignment from foreign ovyners/" The Court of Appeals has held recently that a foreign manufacturing corpora- tion carrying on manufacturing out of this state, maintaining a salesroom here for years, having there on the tax day a stock in trade worth $13,000, keeping there a stock in trade of the average value of $8,000, having at such salesroom a manager and four salesmen and clerks, having no bank account here, all receipts be- ing remitted to the office out of this state, except a small amount of cash kept in the safe and used for small expenses, drawing on the office out of this state weekly to meet current expenses, in the main re-shipping out of this state the goods shipped to the office here, and selling about one-tenth only of such goods here, is not engaged in a continuous business here so as to render its stock in trade invested in such business assessable for general tax. So far " People ex rel. Carrington Co. v. Wells, N. Y. Law Journal, March 1, 1904. '"People ex rel. Durand-Euel v. Wells, 41 Misc. 144; s. e., 83 N. Y. Supp. 936, afBrmed without opinion, 92 App. Div. 622; s. c, 87 N. Y. Supp. 1144; affirmed without opinion, 180 N. Y. 506. Geneeal Tax. 67 as the report shows the corporation was doing business here with- out a certificate under section 15 of the General Corporation Law." Where the merchandise itself is assessable and is sold on credit Bills in this state, bills receivable physically here and ac- receivable. counts receivable appearing in booksi kept here, representing such sales, are assessahle.^^ Bonds of another foreign corporation owned by the corporation taxed are assessable at their actual value.*' Good will i& not as- Bonds. sessable." Debts due to an alien corporation by a Good will. resident for the purchase of real property are assess- Debts able. The Tax Law provides that debts due by inhab- or real itants of this state to persons residing without the property. tt • n o jr i U nited btates for the purchase of real property are assessable, and that the agent in any county of such non-resident creditor shall make an annual report of the same to the county treasurer.*^ In the case of an alien corporation doing business here, such debts are included in or added to the actual value of ita capital invested in its business here. In the case of one not doing business here, the provision is of doubtful constitutionality. Where the value of the assets cannot be definitely ascertained from the statement of the corporation and other evidence in the possession of the assessors, the true value of the assets may be taken to be the market value of the share stock from which should be deducted the assessed value of the real property. *° " People ex rel. A. J. Tower Co. v. Wells, supra. "People ex rel. Yellow Pine Co. v. Barker, 23 App. Div. 524; s. c, 48 N. Y. Supp. 553, affirmed on opinion below, 155 N. Y. 665. " People ex rel. Trowbridge v. Commissioners of Taxes, 4 Hun, 595, affirmed without opinion, 62 N. Y. 630. "People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195; People ex rel. Brokaw Brothers v. Feitner, 44 App. Div. 278; s. c, 60 N. Y. Supp. 687. " L. 1896, oh. 908, sees. 2 and 34, printed in the appendix. "People ex rel. Malcom Brewing Co. v. Board of Assessors, 19 App. Div. 596; s. c, 46 N. Y. Supp. 299, affirmed without discussing this point, 154 N. Y. 437. 68 Conditions of Doing Business. § 39. Surplus, etc., excepted. Exempt property. — So much of its real and personal property as represents surplus, or stock belonging to the state or to literary or charitable corporations, or is exempt from taxation by law, must be excepted. Surplus of a corporation means it* accumulations of money or property in ex- cess of the par value of the stock issued by it. It must arise from savings or accumulations and not from increase in valuation of capital." A bond, mortgage, note, contract, account or other demand, be- longing to a foreign corporation, sent to or deposited in this state, for collection, is exempt. The products of another state, owned by a foreign corporation, and consigned to its agent in this state, for sale on commission for its benefit, are exempt. Money of a foreign corporation, under the control or in the possession of its agent in this state, when transmitted to such agent for the purpose of investment or otherwise, is exempt ;*^ so the surplus funds of a foreign banking corporation transmitted to its permanent agency in this state, for the purpose of temporary loans, but subject at all times to its control and drafts, are not assessable." Copyrights, patents,^" United States bonds and the coupons thereon, are ex- empt." § 40. Adding surplus exceeding ten per centum of capital. — The surplus profits or reserved funds of a corporation mean its accumulations of money or property in excess of the par value of the stock issued by it. Its real and personal property is to be .assessed at its actual value in the same manner as the other real *' See sec. 40, infra. " L. 1896, ch. 908, sec. 4, printed in the appendix. "People ex rel. Bank of Montreal v. Commissioners of Taxes, 59 N. Y. 40. '" People ex rel. Edison Electric II. Co. v. Board of Assessors, 156 N. Y. 417; People ex rel. New York & N. J. T. Co. v. Neflf, 15 App. Div. 8; s. c, 44 N. Y. Supp. 46, afSrmed on opinion below, 156 N. Y. 701. " British C. L. Ins. Co. v. Commissioners of Taxes, 1 Keyes, 303 ; s. c, 1 Abb. Ct. of Ap. 199; People ex rel. Leonard v. Commissioners of Taxes, 90 N. Y. 63, overruling in part People ex rel. Manhattan Fire Ins. Co. v. Board of Commissioners, 76 N, Y. 64; People ex rel. Bridgeport Sav. Bank v. Bar- ker, 154 N. Y. 128. General Tax. 69 and personal property of the county is assessed, up to the amount of the par value of the stock issued, and then the surplus profits or reserved funds that have been accumulated in addition, which exceed ten per centum of its capital stock, shall also be ass^sed at its actual value and in the same manner. If, however, there are no surplus profits, or if the surplus does not efxceed ten per centum' of the capital stock, there is nothing to assess as surplus and nothing from which the ten per centum of the capital can be de- ducted.^^ The corporation is not entitled to a general deduction, of ten per cent of its capital stock. Such deduction is to be made only from the surplus profits or reserved funds when such surplus is returned for taxation. To show property to be surplus it is the duty of the corporation to show affirmatively that it arises from savings or accumulations and not from increase in valuation of capital. ^^ Dividends declared, but not paid over to the stockhold- ers, are not surplus^, unless they were declared with the intention of not being paid over but of being left in the business." § 41. Deducting assessed value of real property Section 12' of the Tax Law provides for deducting the assessed value of the real property of the corporation. The general rule is that the real and personal property is assessed at its actual value and then the assessed value of the real property is deducted, although the actual value exceeds the assessed value.^^ For example the actual value of the real property of a domestic corporation was $965,000, and the assessed value was $600,000. Its personalty amounted to $130,049, and its debts to $329,050. After deducting its debts from the actual value of its real and personal property, the assess- ors deducted the assessed value of its real property, making its as- '^ People ex rel. Manhattan Ry. Co. v. Barker, 165 N. Y. 305. "People ex rel. Citizens' Electrical II. Co. of B. v. Neff, 26 App. Div. 542 j s. c, 50 N. Y. Supp. 680. " See sec. 43, infra. "L. 1896, eh. 908, sec. 12, printed in the appendix. People ex rel. Equitable 'Gas Light Co. V. Barker, 144 N. Y. 94; People ex rel. Consolidated Telegraph & E. S. Co. V. Barker, 7 App. Div. 27; s. c., 39 N. Y. Supp. 776, affirmed without opinion, 151 N. Y. 639; People ex rel. Butchers' Hide & Melting Co. V. Asten, 100 N. Y. 597. 70 CoNDiTioivs OF Doing Business. sessment $165,999. If the actual value of the real property had been deducted the. assessment would have been wiped out. Although its debts exceeded its personalty in a large amount and no assessment would have been made against an individual under the same circumstances, the assessment made was legal and did not deny to the corporation the equal protection of the laws.^* If a corporation owns real property subject to a mortgage upon which it is not personally liable and the equity over the mortgage is in- cluded in its assets, the full assessed value of the real property is not to be deducted but only such equity." If the real property is not in the tax district, and its assessed value can not be ascertained because the assessment roll is not accessible, the price paid may be taken as the assessed value.^^ Eeal property out of the state or country, may be deducted at its actual value if its assessed value is not known. ^' Its assessed value may be deducted, if known.^" § 42. Deducting stock of taxable corporations. — Section 12 of the Tax Law provides that all shares of stock of other corpora- tions actually owned by the corporation taxed which are taxable upon their capital stock under the laws of this state shall be de- ducted.*^ Under the general provision in section 4 of the Tax Law that the owner or holder of stock of a corporation liable to taxation on its capital shall not be taxed as an individual for such stock, it has been held that a resident can not be taxed on stocks of taxable corporations, domestic or foreign.^^ Likewise stocks of " People ex rel. Kew York Clearing House Building Co. v. Barker, 23 Misc. 192; s. c, 51 N. Y. Supp. 1102, affirmed on opinion below, 31 App. Div. 315; s. c, 53 N. Y. Supp. nil, affirmed without opinion, 158 N. Y. 709, affirmed 179 U. S. 279. " People ex rel. Weber Piano Co. v. Wells, 180 N. Y. 62, three judges dis- senting. ■^People ex rel. Twenty-third Street R. R. Co. v. Commissioners of Taxes, 95 N. Y. 554. ™ People ex rel. Panama R. R. Co. v. Commissioners of Taxes, 104 N. Y. 240. "People ex rel. Fairfield Chemical Co. v. Coleman, 115 N. Y. 178. " L. 1896, ch. 908, see. 12, printed in the appendix. People ex rel. Brooklyn Traction Co. v. Board of Assessors, 30 N. Y. Supp. 448. "L. 1896, ch. 908, see. 4, printed in the appendix. People ex rel. Trow- Geneeal Tax. 71 other corporations, domestic or foreign, which are taxable upon their capital stock under the laws of this state, should be deducted in assessing the capital stock of a corporation, domestic or foreign. If the return of the assessors to a writ of certiorari to review the assessment shows that they have included stocks of taxable corpo- rations, the assessment will be reversed.^ § 43. Deducting debts. — In construing the statute of 1857, now revised in section 12 of the Tax Law, the Court of Appeals said : " There is no provision of law which authorizes a deduction from the capital stock by reason of the indebtedness of the com- pany. While this indebtedness is a proper iS'ubject for considera- tion in estimating the value of the stock, there is no authority for its deduction from the value of the stock after an estimate of the same has been made."^* Subsequently there was developed the method of assessing the. assets at their actual value instead of the stock at its par or market value and the deduction of debts became proper. It is settled now that a corporation is entitled to have its indebtedness deducted from the value of the corporate assets which constitute its capital.*^ If an officer of the corporation tes- tifies that its debts exceed its personal property and the assessors take no other evidence, an assessment against it will be vacated.^^ If the statement of the corporation to the assessors shows that the debts exceed the value of the assets and the as'sessors make no further inquiry, and their return does not contradict it, the as- Siessment will be vacated.*' If the stateijient is sent by mail and bridge v. Commissioners of Taxes, 4 Hun, 595, afiirmed without opinion, 62 N. Y. 630. ^ People ex rel. Brown v. O'Rourke, 31 App. Div. 583; s. c, 52 N. Y. Supp. 427. "L. 1896, ch. 908, sec. 12, printed in the appendix. People ex rel. Butchers' Hide & Melting Co. v. Asten, 100 N. Y. 597. "^ People ex rel. Second Avenue E. E. Co. v. Barker, 141 N. Y. 196; People «x rel. Rochester Ry. Co. v. Pond, 37 App. Div. 330; s. c, 57 N. Y. Supp. 490; People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195. " People ex rel. Coney Island & B. E. E. Co. v. Neflf, 15 App. Div. 585 ; s. u., 44 N. Y. Supp. 810. "People ex rel. Twenty-third Street Ey. Co. v. Feitner, 92 App. Div. 518; fi. c, 87 N. Y. Supp. 304. 73 Conditions of Doing Business. the assessors allege that they never received it, they are not bound to deduct the debts it discloses."* Where the statement to the assessors is full and complete, the assessors are bound to deduct the disclosed debts, although the capital is unimpaired.*' If there is a conceahiient of assets or values, the assessors may find that the capital is unimpaired. In such a case, there is a presumption that there are assets, over and above the capital, sufiBcient to pay all outstanding debts, and the assessors need not deduct debts. Although the corporation claims that it is insolvent, and the statute prohibits an insolvent corpora- tion paying a dividend, if in fact it is paying large dividends out of earnings, and gives no explanation of so doing, the assessors may determine, upon other evidence before them, that there are undisclosed assets and that its capital is unimpaired.'" In the absence of other evidence, there is no presumption because a divi- dend has been declared, that the capital is unimpaired." Uncon- troverted evidence that it is impaired by the existence of debts, is binding on the assessors, notwithstanding the declaration of a dividend." The verbal testimony of the secretary that, in his opinion, the capital is not impaired, is not a sufficient contradic- tion of the verified statement of the corporation showing by figures that it is impaired." It seems that there is a presumption that, where the market value of 'the share stock is above par, the corporation has assets over and above its debts. If, however, it possesses a special fran- chise, not subject to taxation as personalty, the presumption does "People ex rel. Conron Bros. Co. v. O'Donnell, N. Y. Law Journal, Oct. 5, 1905. "People ex rel. E. Seidenberg, Stieffel & Co. v. Feitner, 41 App. Div. 571,' s. e., 58 N. y. Supp. 713. '"People ex rel. Equitable Gas Light 'Co. v. Barker, 144 N. Y. 94. "People ex rel. Edison Gen. El. Co. v. Barker, 141 N. Y. 251. "People ex rel. Manhattan Ry. Co. v. Barker, 165 N. Y. 305; People ex rel. Silieian Asphalt Co. v. Feitner, 30 Misc. 665 ; s. c, 64 N. Y. Supp. 298. "People ex rel. Brokaw Brothers v. Feitner, 44 App. Div. 278; s. c, 60 N. Y. Supp. 687. "People ex rel. Brooklyn City R. R. Co. v. Board of Assessors, 19 App. Div. 590; s. c, 46 N. Y. Supp. 385, affirmed on opinion below, 154 N. Y. 763. Gesteeal Tax. 73 In the case of a foreign corporation, all sums invested in its business in this state are assessable, -without deduction for its general debts, although incurred in this state, as it is assumed that such debts are deducted from its assets in its home state in assess- ing it for taxation there.'^ But debts, incurred by such a foreign corporation in acquiring assets in this state may be deducted to ascertain the sums invested here, as the sums actually paid for such assets and not the sums promised to be paid in the future are the sums invested, although such promises are evidenced by notes or bonds. Stock issued for property is not a debt'* Dividends actually declared, but not paid over to the stockhold- ers, are not surplus profits or reserved funds, but are debts due by the corporation and are to be deducted in assessing its capital." Dividends declared with the intention of not being paid over but of being left in the business, are not deductible.'* Section 6 of the Tax Law provides that no deduction shall be allowed in the assessment of personal property, by reason of the indebtedness of the owner, contracted or incurred in the purchase of non-taxable property or securities owned by him or held for his benefit, nor for or on account of any indirect liability as surety, guarantor, indorser or otherwise, nor for or on account of any debt or liability contracted or incurred for the purpose of evading taxation,'^ Under this provision, debts incurred in the purchase of good will,*" of merchandise imported in original packages,*^ or of the special franchise of an elevated railroad corporation to operate its road in a public street,*^ are incurred in the purchase "People ex rel. Thurber Whyland Co. v. Barker, 141 N. Y. 118. "People ex rel. Hecker-Jones-Jewell Milling Co. v. Barker, 147 N. Y. 31. "People ex rel. United State3 Trust Co. v. Barker, 86 Jlun, 131; s. c, 33 N. Y. Supp. 388 ; People ex rel. New York & N. J. T. Co. v. NeflF, 15 App. Div. 8; s. e., 44 N. Y. Supp. 46, affirmed on opinion below, 156 N. Y. 701. "People ex rel. Hawley Box & Lumber Co. v. Barker, 23 App. Div. 532; s. c, 48 N. Y. Supp. 557. ™L. 1896, ch. 908, see. 6, printed in the appendix. '"People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195. "People ex rel. Bijur v. Barker, 155 N. Y. 330. ''People ex rel. Manhattan Ky. Co. v. Barker, 165 N. Y. 305. Since this decision special franchises have been made taxable as real property. 74 Conditions of Doing Business. of non-taxable property, and cannot be deducted. Likewise the contingent liability of a surety cannot be deducted.** § 44. Grievance day. — The Tax Law provides that the assess- ors shall complete the assess^ment-roll on or before the first day of August, and make out one copy thereof, to be left with one of their number, and forthwith- cause a notice to be conspicuously posted in three or more public places in the tax district, stating that they have completed the assessment-roll, and that a copy thereof has been left with one of their number at a specified place, where it may be seen and examined by any person until the third Tuesday of August next following, and that on that day they will meet at a time and place specified in the notice to review their assess- ments. In any city the notice shall conform to the requirements of the law regulating the time, place and manner of revising asr sessments in such city.^* The assessors shall meet at the time and place specified in such notice, and hear and determine all com- plaints in relation to such assessments brought before them, and for that purpose they may adjourn from time to time. Such complainants shall file with the assessors a statement, under oath, specifying the respect in which the assessment complained of is incorrect, which verification must be made by the person assessed or whose property is assessed, or by some person authorized to make such statement, and who has knowledge of the facts stated therein. The assessors may administer oaths, take testimony and hear proofs in regard to any such complaint and the assessment to which it relates. If not satisfied that such assessment is er- roneous, they may require the person assessed, or his agent or rep- resentative, or any other person, to appear before them and be ex- amined concerning such complaint, and to produce any papers re- lating to such assessment with respect to his property or his resi- dence for the purpose of taxation. If ailiy such person, or his agent or representative, shall willfully neglect or refuse to attend "People ex rel. National Surety Co. v. Feitner, 166 N. Y. 129. »L. 1896, eh. 908, see. 35, as amended by L. 1904, ch. 385, printed in the appendix. Geneeal Tax. 75 and be so examined, or to answer any material question put to him, such person shall not be entitled to any reduction of his asr sessment. Minutes of the examination of every person examined by the assessors upon the hearing of any suoh complaint shall be taken and filed in the office of town or city clerk. The assessors shall, after said examination, fix the value of the property of the complainant and for that purpose may increase or diminish the assessment thereof/^ § 45. Grievance day in the city of New York. — In the city of New York the board of commissioners of taxes and assessments are assessors for general tax. Contrary to the general rule, appli- cation for the correction of an assessment must be made to them before they prepare the annual assessment-roll. A provisional assessment is made and the application for correction has refer- ence to it. This is done in the following manner: The commis- sioners prepare for each borough of the city a book called " An- nual record of the assessed valuation of real and personal prop- erty of the borough of ." It is open for public inspection, examination and correction from the second Monday of January until the first day of April. The commissioners likewise prepare for the entire city, and keep in their main ofiice in the borough of Manhattan, a book called " Annual record of the assessed valua- tion of real and personal property of corporations." The assessed valuation of all real and personal property of corporations is en- tered in duplicate in th© office in the borough where the same is assessed and in the main office of the eommissionersi in the bor- ough of Manhattan. After the first day of April, the commis- sioners prepare frona these books of record, as corrected, the an- nual assessment-roll, and on the first Monday of July deliver it to the board of aldermen. Hence grievance day, or more prop- erly 'the time to make complaints, extends from the second Mon- day of January until the first day of April and has reference to "L. 1896, ch. 908, sec. 36, printed in the appendix. People ex rel. New York & N. J. T. Co. V. Neff, 15 App. Div. 8; s. u., 44 N. Y. Supp. 46, affirmed on opinion below, 156 N. Y. 701. T6 Conditions of Doing Business. the provisional assessments appearing in the books called annual records/* During the period stated, application may be made by any person or corporation claiming to be aggrieved by tbe as- sessed valuation of real or personal property, to have the same cor- rected. If the application be made in relation to the assessed valuation of real property, it must be made in writing, stating the ground of objection thereto. The commissioners examine into the complaint, and if in their judgment the assessment is erroneous they cause the same to be corrected. If the application be made in relation to the assessed valuation of personal property, the applicant is examined under oath, and if the assessment be determined by the commissioners to be erroneous, they cause the same to be corrected and fix tbe amount of the assessment as they believe to be just. The commissioners hear at their main office in the borough of Manhattan all applications of corporations for revision and cancellation of assessments. All testimony taken by them is reduced to writing and constitutes part of the record of the proceedings upon the assessment. Their decision must be rendered within thirty days after the hearing is closed, and in no case later than the first day of June.*' § 46. Form of application to assessors. Jurisdiction of sub- ject matter. Failure to make statement to assessors. — A writ- ten application to the assessors by the corporation taxed repre- senting that its property should not, in its judgment, be valued at more than a sum stated to be in proportion to the assessed value of similar property, and in accordance with the fair market value thereof, and that it had depreciated and could be reproduced at less than its original cost, is sufficient to sustain a writ of certio- rari under the Tax Law and the charter of the city of New York hereafter mentioned.** The mere claim of the party assessed to the assessors of inequality and over-valuation, without the state- ment of any facts to support it, is not sufficient to authorize a re- "L. 1901, eh. 466, sees. 892, 893, 894, 907, printed in the appendix. "L. 1901, ch. 466, sees. 895 and 898, printed in the appendix. "People ex rel. Edison Electric II. Co. v. Feitner, 178 N. Y. 577. Geneeal Tax. 77 view on certiorari or the taking of testimony by the court or a referee.^' The question whether persons or property are assessable is ju- risdictional, and is always open to inquiry when the authority to make the assessment is assailed. The jurisdiction of the assess- ors depends upon the existence of the facts stated in the statute. They can not acquire jurisdiction by determining that they have it.'" The place of taxation within the state is not jurisdictional. A domestic corporation, reporting to the assessors that its princi- pal office is in one tax district, and appearing on grievance day and obtaining a reduction in valuation, can not claim that the as- sessment is void, because its charter shows that its principal office is in another tax district, as its appearance before the assessors gives them jurisdiction of the person.^^ The same rule holds good of a foreign corporation doing business in this state. If the corporation omits to make to the assessors the statement or report required by the statute, the assessors have jurisdiction to make an assessment of its capital stock at a valuation determined from the best information they can obtain.'^ Service of the state- ment by mail is not sufficient if the assessors allege that Uiey never received it.'* § 47. Burden of proof. Effect of statement by corporation. — ■ The burden is on the corporation taxed to prove its claim that it has no property subject to tax.'* If a corporation objects to an assessment against it, it must see to it that proper proof is given on grievance day. It is not sufficient to send an agent or attorney '"People ex rel. Sutphen v. Feitner, 45 App. Div. 542; s. c, 61 N. Y. Supp. 432, followed in People ex rel. ZoUlkofer v. Feitner, 63 App. Div. 615; s. c, 72 N. Y. Supp. 1124, affirmed without opinion, 168 N. Y. 674. "McLean v. Jephson, 123 N. Y. 142. "Matter of McLean, 138 N. Y. 158. •People ex rel. Mutual Union Tel. Co. v. Oommissioners of Taxes, 99 N. Y. 254; People ex rel. Manhattan Fire Ins. Co. v. Board of Commissioners, 76 N. Y. 64. "People ex rel. Conron Bros. Co. v. O'Donnell, N. Y. Law Journal, Oct. 5, 1905. "People ex rel. Green v. Hall, 83 Hun, 375; s. c, 31 N. Y. Supp. 956. T8 CoNDmoisrs of Doing Business. ignorant of the facts.*' Subject to the rule that the corporation is bound to prove its claim that the assessment is incorrect, it is not bound to ask for the taking of testimony on the hearing before the assessors. Such omission, in itself, does not prevent it apply- ing for a certiorari to review the action of the assessors.'" If a foreign corporation submitis a verified statement admitting property in this state subject to taxation, and afterwards sub- mits another verified statement claiming that its business here is a mere sales agency, the assessors may accept and act on the first statement and the court will not interfere." If it submits- a verified statement admitting property subject to tax and the assessors act thereon and fix the assessment at the amount ad- mitted in the statement, it cannot claim on certiorari that its. place of business here is a mere sales agency and that therefore it is not subject to tax.'^ By receiving and filing &■ statement made and verified by a corporation without objection either to its form or substance, and receiving evidence in support of its allegations, the assessors waive any objection to the form of the statement or that it is indefinite.'^ While the statement in itself is not conclusive on the assessors,"" they can not disregard an uncontradicted statement as to the capital stock of the corpora- tion and add to capital the proceeds of bonds issued by it, because such bonds are not accounted for."^ They can not arbitrarily reject a sworn statement, unless they have proof of its falsity. Mere surmise is not sufficient. Higher valuations for the same "People ex rel. Brown v. O'Rourke, 31 App. Div. 583; s. c., 52 N. Y. Supp. 427. •"People ex rel. Thompson v. Feitner, 168 N. Y. 441. •'People ex rel. McShane Mfg. Co. v. Barker, 23 App. Div. 530; s. c, 48 N. Y. Supp. 558, affirmed without opinion, 155 N. Y. 665. •'People ex rel. Stanley Electric Mfg. Co. v. Wells, N. Y. Law Journal, April 5, 1904. ••People ex rel. Erie R. R. Co. v. Webster, 49 App. Div. 556 ; s. c, 63 N, Y. Supp. 574. ^""People ex rel. Manhattan Fire Ins. Co. v. Board of Commissioners, 76 N. Y. 64. '"'People ex rel. Brooklyn Union Gas Co. v. Feitner, 82 App. Div. 368 ; s. c, 81 N. Y. Supp. 898; People ex rel. New York Mutual Gas Light Co. v. Wells,. 42 Misc. 606; s. c, 87 N. Y. Supp. 595. General Tax. 79 items in the statement of the preceding year are not suiScient proof of falsity, unless the assessors institute some inquiry as to the depreciation, by calling on the corporation to explain or other- wise."^ If the statement gives the actual value of the assets and also a larger value at which they are carried on the books and the assessors make no further inquiry, they are bound by the actual value given and cannot adopt such book value."' The assessors are not bound by a statement sent to them by mail if they allege that they never received it."* § 48. Effect of testimony ; of refusal to answer questions The assessors are bound by the uncontradicted testimony of the corporation assessed, unless they, have other information or evi- dence which the corporation does not explain. They are not bound, however, by testimony of the opinion of the corporation as to the value of its real or personal property."^ They are not bound by statements that are contradicted and which they dis- believe, where good reasons exist for such disbelief.-"'^ If the evi- dence of the actual value of the capital stock of a corporation is full and complete and is uncontradicted so that all the necessary facts are established beyond any fair dispute, and there is no reason appearing for doubting the truth of the evidence, a refusal of the assessors to decide in accordance with isuch evidence is legal error and may be reviewed and corrected on certiorari as hereafter mentioned."' If an officer of the corporation testifies '•"People ex rel. India Rubber & G. P. I. Co. v. Barker, 16 Mise. 2o2; s. e., 39 N. Y. Supp. 88; People ex rel. P. F. Bhumgara Co. v. Wells, 93 App. Div. 212; s. c, 87 N. Y. Supp. 543, affirmed without opinion, 179 N. Y. 529. "'People ex rel. A. G. Hyde & Sons v. Wells, N. Y. liaw Journal, April 5, 1904. '"People ex rel. Conron Bros. Co. v. O'Donnell, N. Y. Law Journal, Oct. 5, 1905. "'People ex rel. Oswego Canal Co. v. City of Oswego, 5 Hun, 117. ""People ex rel. Manhattan Ey. Co. v. Barker, 146 N. Y. 304; People ex rel. Westbrook v. Board of Trustees, 48 N. Y. 390. "'People ex rel. Edison El. II. Co. v. Barker, 139 N. Y. 55; People ex rel. German Looking Glass Plate Co. v. Barker, 75 Hun, 6; s. c, 26 N. Y. Supp. 971; People ex rel. W. & J. Sloane v. Barker, 76 Hun, 454; s. c., 27 N. Y. Supp. 1082. 80 Conditions of Doing Business. that its debts exceeds its personal property, and the assessors take no other evidence, an assessment against it will be vacated.^"^ It is a general rule that the assessors may refuse to reduce an as- jsessment if the party assessed refuses to answer a pertinent question on the hearing before them.-"® Thus a foreign corporation, doing one-sixth of its business in this state, cannot have the assessment of its capital stock reduced, after it is once fairly fixed on infor- mation contained in its own statement, if it refuses to answer questions as to its business and assets in other states, so as to enable the assessors to determine the amount in this state.^^" The burden is on the party assessed to prove his claim that he has no property subject to tax. If he appears on grievance day and refuses to answer questions respecting money received by him theretofore the assessment will not be vacated.''^^ § 49. Second application to assessors. Change in assessment without an application. Commissioners may remit or reduce tax. — After the assessors reduce an assessment on application, they have power to entertain another application for a further reduction on a ground not raised on the first application, within the time limited for complaints.-'^ They may, however, deny to entertain the second application, but if they do, the Special Term of the Supreme Court may relieve the applicant on motion and send the matter back to the assessors to allow such new hearing."' In the city of Xew York, at any time before the first day of April, the commissioners may increase or diminish the assessed valuation of any real or personal property of any individual or corporation, as in their judgment may be just or necessary for '""People ex rel. Coney Island & B. R. R. Co. v. Neff, 15 App. Div. 585; s. c, 44 N. Y. Supp. 810. '""People ex rel. Dwight v. Piatt, 92 Hun, 349; s. c., 36 N. Y. Supp. 531, ap- peal dismissed, 151 N. Y. 664. ""People ex rel. H. B. Claflin Co. v. Feitner, 58 App. Div. 468 ; 8. c, 69 N. Y. Supp. 410. '"People ex rel. Green v. Hall, 83 Hun, 375; s. c, 31 N. Y. Supp. 956. '"People ex rel. Keppler & Sehwarzmann v. Barker, 22 App. Div. 120; s. c, 47 N. Y. Supp. 958, affirmed on opinion belo-w, 155 N. Y. 661. '"People ex rel. Green v. Hall, 83 Hun, 375 ; s. c, 31 N. Y. Supp. 956. Geneeal Tax. 81 the equalization of taxation. They cannot increase such valuation after the second Monday of January, except upon notice given to the individual or corporation afFected."^ They may .remit or reduce, if found excessive or erroneous, a tax upon real or personal property, after it is imposed. In the case of real property they can do so only within one year after the delivery of the books to the receiver of taxes for the collection of the tax. In the case of personal property, it requires a majority of the commissioners to remit or reduce its assessed valuation, and no tax on personal property can be remitted, cancelled or reduced, unless the person aggrieved satisfies the commissioners that illness or absence from the city prevented the filing of the complaint or making the. application to the commissioners before the first day of ApriL"^ Such statutory provision is constitutional."^ A corpora- tion is so prevented from applying before the first day of April, if all of its officers or agents who had charge of the matter were prevented from appearing by illness.'^^ § 50. Certiorari. — Any person assessed claiming to be aggrieved by an assessment may present to the Supreme Court a petition duly verified, setting forth that the assessment is illegal, specifying the grounds of the alleged illegality, or if ( ? is) erroneous by reason of . over-valuation, stating the extent of -such over-valuation, or if ( ? is) unequal in that the assessment has been made at a higher proportionate valuation than the assessment of other property on the same roll by the same officers, specifying the instances in which such inequality exists, and the extent thereof, and s.tating that he is or will be injured thereby. ^'^ In the city of New York, a cer- tiorari may be allowed by the Supreme Court or any justice thereof "'L. 1901, eh. 466, sec. 896, printed in the appendix. "»L. 1901, ch. 466, sec. 897, as amended by L. 1902, ch. 192, printed in the appendix. ""People ex rel. Simpson v. Wells, 181 N. Y. 252. "'People ex rel. New York Hotel & R. Co. v. Barker, 140 N. Y. 437. "*L. 1896, ch. 908, sec. 250, printed in the appendix; re-enacting L. 1880, ch. 269, sec. 1. The statute of 1880 read "is;" the substitution of the word "if" seems to have been unintentional. 6 82 Conditions of Doing Business. only on the grounds, which must be specified in the petition, that the assessment is illegal, giving the particulars of the alleged illegality, or is erroneous by reason of over-valuation, or in the case of real property, is erroneous by reason of inequality, in that it has been made at a higher proportionate valuation than the assessment of other real property of like character, in the same "ward or section, or other real property on the roll of the city for the same year, specifying the instances in which such inequality exists, and the extent thereof, and stating that he is or will be in- jured thereby."' In the city of !Xew York, an assessment of per- sonal property cannot be reviewed for inequality.^^" Two or more persons assessed upon the same roll, who are af- fected in the same manner by the illegality, error or inequality, may unite in the same petition. ^^' This applies to a situation wherein the adjudication upon the complaint of one taxpayer neces- sarily determines the complaints of others, as, where, in reality, but a single issue is presented, ?o that the law being settled as to the facts of one case, it is alike applicable to all other cases, but it is not intended to permit any and all parties tO' unite who, are aggrieved because of their assessments.'^^ Prior to 1880, an assessment for general tax was reviewed ordi- narily by the common-law writ of certiorari, as enlarged and regu- lated by the Code of Civil Procedure. This is the method of review now used in the case of the franchise tax hereafter mentioned. In the year stated, a statute was enacted to provide for the review and correction of illegal, erroneous and unequal assessments for general tax. This statute regulated the review of such assessments by certiorari, superseded the common-law writ in such cases, and rendered inapplicable tlie provisions of the Code of Civil Pro- cedure in reference thereto.^' It has been re-enacted in the pres- "•L. 1901, ch. 466, sec. 906, printed in the appendix. '^"People ex rel. People's Trust Co. v. Feitner, 51 App. Div. 178; s. c, 64 N. Y. Supp. 539; People ex rel. Broadway Imp. Co. v. Barker, 14 App. Div. 412; s. c., 43 N. Y. Supp. 1015. '"L. 1896, ch. 908, sec. 250, printed in the appendix. ^People ex rel. Washington Building Co. v. Feitner, 163 N. Y. 384. "'People ex rel. Church of the Holy Communion v. Assessors, 106 N. Y. 671; Matter of Corwin, 135 N. Y. 245. Geneeal Tax. 83 «nt Tax Law without change of substance. It applies to the city of JSTew York except as modified by the charter of that city.^^* It has been suggested by the Appellate Division of the Supreme Court, in the first department, that the code writ may still be used to review an assessment for general tax, to the same extent as it could have been used prior to the statute of 1880, in a case not covered by the tax-law writ.''= This is not free from doubt. In the city of Xew York, the charter provides that a certiorari shall be issued only upon the grounds stated therein, and the language is broad enough to apply to common-law and code writs as well as to a tax-law writ. The Court of Appeals has said that the tax-law writ furnishes an adequate remedy for the dissatisfied taxpayer and confines him to its adoption, in all cases where the illegality of the proceedings of the taxing officers consists, not in a lack of jurisdiction on their part to act, but in the commission of errors which vitiate the assessment and lay it open to cancellation or reversal."* The tax-law writ of certiorari has novel functions hitherto un- known to such methods of review. The common-law writ bring3 up the record for inquiry into jurisdiction and regularity, and, in criminal or quasi-criminal oases, the evidence also, to see whether, as a matter of law, there was any proof wliich could warrant a conviction of the relator. The general statutory writ, regulated by the Code of Civil Procediire, brings up both record and pro- ceedings: for examination, not only as to jurisdiction and method of procedure, but also to see whether there was a violation of any rule of law, or any competent proof of all the essential facts, or a preponderance of proof against the existence of any of those facts. The tax-law writ, created by the statute of 1880, differs from its predecessors in one remarkable respect, in that it permits a re- "*People ex rel. Kendall v. Feitner, 51 App. Div. 196; s. e., 64 N. Y. Supp. 675. '^People ex rel. Cochrane v. Feitner, 44 App. Div. 239; s. c, 60 N. Y. Supp. 614; People ex rel. Rendrock Powder Co. v. Feitner, 41 App. Div. 544; s. u., 58 N. Y. Supp. 648. The code writ will be explained hereafter. See sec. 73,. infra. "'United States Trust Co. v. The Mayor, 144 N. Y. 488. 84 Conditions of Doixg Business. determination of all questions of fact upon evidence, taken in part at least, by the Special Term or under its direction. What is called a review may thus become a proceeding in the nature of a new trial. The return is not conclusive, as in the common-law and code writs. The provisions of the code do not apply to it. The petition is regarded as. the complaint, the return as the answer, and, in deciding the issues joined thereby, the court may call witnesses to its aid and their testimony becomes a part of the proceedings upon which the determination of the court is to be made. That determination is a re-valuation, and it may be a different valuation, of the property assessed. It is the duty of the court to re-try the questions of fact and decide them over again. Thus the writ may be a writ or review, merely, and hence properly called a writ of certiorari, or it may be in the nature of a venire de novo, and utterly foreign in function to the writ of certiorari as known in the history of the law.^^' § 51. Illegality. Over-valuation — The writ does not lie where the whole assessment-roll is illegal because the assessors were not such de jure or de facto or because the majority acted without notice to the third assessor.'^^ In such a case the remedy is an action of replevin or trespass against the collector for executing a void warrant. An injunction is not proper.'^' The writ lies on the ground of illegality only where there is a valid assessment-roll in which some individual or corporation has for some reason been illegally assessed;^'" for example, where the property assessed is exempt from taxation- by the laws of the United States or of this state ;"' or where the corporation taxed and property assessed have no situs in the tax district ;^^^ or where the foreign corporation taxed '^'People ex rel. Manhattan Ry. Co. v. Barker, 152 N. Y. 417. "'People ex rel. Delaware & H. C. Co. v. Parker, 117 N. Y. 86; same v. same, 45 Hun, 432. ""Delaware & H. C. Co. v. Atkins, 121 N. Y. 246; People ex rel. Eendrock Powder Co. v. Feitner, 41 App. Div. 544; s. c, 58 N. Y. Supp. 648. '"Van Deventer v. Long Island City, 139 N. Y. 133. "'People ex rel. Westbrook v. Board of Trustees, 48 N. Y. 390. '^People ex rel. Eendroek Powder Co. v. Feitner, supra; People ex rel. Bliss V. Feitner, 72 App. Div. 45; s. c, 76 N. Y. Supp. .219. Genesal Tax. 85 is not doing business and has no property in the state.^^^ Although the assessment in the case last mentioned is void the corporation is not bound to wait until proceedings are taken to collect the tax but may review the assessment by certiorari."* If it is claimed that the assessment is illegal the petition must state the grounds of the alleged illegality."^ Certiorari and not injunction is the proper remedy for over- valuation."" It is not necessary to state in the petition in terms that the property has been assessed at a sum in excess of the amount at which under ordinary circumstances it would sell. It is sufficient if it is made to appear distinctly that over-valuation is the ground of objection."^ But the party assessed must prove affirmatively by testimony that the assessed value is more than the full and true value of the property."* § 52. Inequality. — A petition for a certiorari which alleges that an assessment is erroneous for over-valuation and inequality, in that the assessment was made at a higher proportionate valuation than the assessment of other real property on tlie same roll for the same time, and setting out many instances in which inequality exists and the extent thereof and claiming injury in a stated sum, requires the court to take jurisdiction and to take testimony by itself or a referee."' Prior to 1896 it was not necessary that the petition state particular instances of unequal valuation. It was sufficient that it stated that the assessment was illegal, incorrect '^'People ex rel. American Thread Co. v. Feitner, 30 Misc. 641; s. c., 64 N. Y. Supp. 321. ^People ex rel. Kellogg v. Wells, 182 N. Y. 314. "'"People ex rel. Commercial Mutual Ins. Co. v. Tax Commissioners, 144 N. Y. 483. "^Delaware & H. C. Co. v. Atkins, 121 N. Y. 246. "'People ex rel. Broadway Imp. Co. v. Barker, 14 App. Div. 412; s. c, 43 N. Y. Supp. 1015; People ex rel. Boehm v. Wells, 92 N. Y. Supp. 769. "^People ex rel. Allen v. Badgley, 138 N. Y. 314; People ex rel. Fargo v. Murphy, 57 Hun, 586; s. c., 10 N. Y. Supp. 377, affirmed without opinion, 125 N. Y. 712. "'People ex r^. Broadway Realty Co. v. Feitner, 61 App. Div. 156; s. c, 70 N. Y. Supp. 452, afifirmed on prevailing opinion below, 168 N. Y. 661. 86 Conditions of Doing Business. and erroneous, for the reason that the valuation was unequal and not in proportion to the valuations placed on other property on the roll."" Under the present Tax Law the petition must state instances in which inequality exists and the extent thereof. It has been held by the Special Term of the Supreme Court that a petition which states that the property is valued at a higher rate in propor- tion to its actual value than certain other specified pieces of prop- erty in the same block or in the same vicinity, but not stating the actual values of such other properties so as to allow comparison with their assessed values, is not sufiicient."^ If it is alleged that the petitioner is or will be injured it is not necessary to allege that the property is assessed at a higher proportionate rate than prop- erty in the district generally."^ Such allegation is necessary in the absence of an allegation of injury."^ The burden is on the .party assessed to prove affirmatively, by testimony, in addition to the inequality, that he will be injured, that is, compelled to pay more than his share of the total tax. He must prove a state of factsi from which a presumption justly arises that the inequality of which he complains will subject him to the payment of more than his just proportion of the aggregate tax,' and this presumption is not raised by proof that, in a particular instance, property is assessed at a proportionately lower valuation than his own."* The inequality must be something more than a valuation disproportion- ate to that placed on a few other pieces of property in the same vicinity ; a comparison made with property not in the same circum- stances or category is not sufiicient."^ The party assessed must prove that the assessment is at a higher assessed valuation than ""People ex rel. Erie R. R. Co. v. Webster, 49 App. Div. 556 ; s. c, 63 N . Y. Supp. 574; People ex rel. New York Central & H. R. R. R. Co. v. Budlong, 25 App. Div. 373; s. e., 49 X. Y. Supp. 484. "'People ex rel. Boehm v. Wells, 92 N. Y. Supp. 769. "^Matter of Nisbet, 3 App. Div. 171; s. c, 38 N. Y. Supp. 392. "'People ex rel. Wechler v. Board of Assessors, 84 Hun, 445 ; s. c, 32 N. Y. Supp. 344. '"People ex rel. Warren v. Carter, 109 N. Y. 576. ""People ex rel. Fiske v. Feitner, 95 App. Div. 217; s. c., 88 N. Y. Supp. 694; affirmed without opinion, 180 X. Y. 536. Geneeal Tax. 87 property generally in the tax district."* Showing inequality in ■comparison with one other piece of property is not sufficient."^ As already stated in the city of New York an assessment of personal property cannot be reviewed for inequality."^ Under the charter of the former city of New York in force in 1885 neither an assessment of real or personal property could be reviewed for inequality, and it was held that while the charter in the cases speci- fied therein limited the remedy to certiorari, the court had inherent jurisdiction to grant an injunction against the collection of a tax for inequality, being a ground not specified in the charter, but would not do so unless the, inequality resulted from some fraud or. illegal discrimination or classification as distinguished from hon- est mistake."' This decision is still applicable to an unequal as- sessment of personal property in the city of New York. § 53. Second certiorari. — After the assessors reduce an assess^ ■ ment on application they have power to entertain another applica- tion for a further reduction, on a ground not raised on the first ap- plication, within the time limited for complaints, and their refusal on the second application to reduce the assessment further may be reviewed by certiorari.^^" An order of court directing a new as- sessment is a final order, and to review the new assessment a new writ of certiorari must be applied for.^^^ § 54. Petition for certiorari. — A petition for a certiorari must state conclusions of fact but need not state evidence."^ The requi- -sites of the form of the application to the assessors or commissioners on grievance day to correct the assessment have been considered ^"People ex rel. Allen v. Badgley, 138 N. Y. 314. "'People ex rel. Witthaus v. O'Donnell, 46 Misc. 519; s. l-., 92 N. Y. Supp. 770. "'See sec. 50, supra. '"Mercantile Nat. Bank of N. Y. v. The Mayor, 172 N. Y. 35. ""People ex rel. Kepplcr & Schwarzmann v. Barker, 22 App. Div. 120 ; s. c, 47 N. Y. Supp. 958, affirmed on opinion below, 155 N. Y. 661. "'People ex rel. Delaware & Hudson Co. v. Wells, 87 App. Div. 284; s. c.,. 84 N. Y. Supp. 277. "^Matter of Cathedral of Incarnation in Diocese of Long Island, 91 App Div. .543; ri! c, 86 N. Y. Supp. 900. 88 Conditions of Doing Business. already.^^' The petition for a writ of certiorari must show that such application was made in due time to the proper officers.^^* This requirement was new in 1896, and it does not apply to a void as- sessment against a foreign corporation, which was not aware of the assessment until after the time had passed for making objection before the assessors."^ It is satisfied by a statement of such ap- plication made on an adjourned day, to which the assessors ad- journed on the third Tuesday of August, under sections 35 and 36 of the Tax Law.^'^ In the city of New York the application to the commissioners must be made before the first day of April. Under the original statute of 1880 it was not necessary to make such state- ment in the petition,^" but it was held that if the party assessed failed to appear and object on grievance day he was guilty of such laches as to warrant the court in refusing to grant him any relief ;''* and that such laches could be waived by the assessors or explained ;^'' and that it was a sufficient explanation of the failure of a non-resi- dent of the tax district to appear on grievance day that he had had a controversy with the assessors about his assessment so that they knew of his claim and his appearance would be futile."" Under the present Tax Law it is doubtful whether a preliminary contro- ^'ersy with the assessors would relieve the party assessed from com- plying with the mandatory requirement that his petition show that application was made in due time to the proper officers to correct the assessment. § 55. Presenting petition. — Such petition must be presented to a justice of the Supreme Court or at a Special Term of the Supreme '"See sec. 46, supra. "*!,. 1896, eh. 908, sec. 250, printed in the appendix. '"People ex rel. American Thread Co. v. Feitner, 30 Misc. 641 ; a. c, 64 N. Y. Supp. 321. "'Matter of Cathedral of Incarnation in Diocese of Long Island, supra. "'People ex rel. Grace v. Gray, 45 Hun, 243. "^People ex rel. Western Union Tel. Co. v. Dolan, 126 N. Y. 166; People ex rel. West Shore R. R. Co. v. Adams, 125 N. Y. 471; People ex rel. Mutual Union Tel. Co. v. Commissioners of Taxes, 99 N. Y. 254. '"People ex rel. Buffalo, R. & P. Ry. Co. v. Duguid, 68 Hun, 243 ; s. u., 22: N. Y. Supp. 988. '"People ex rel. Paddock v. Lewis, 55 Hun, 521; s. c, 9 N. Y. Supp. 333. Geneeax Tax. 89 Court, in the judicial district in whicli the assessment complained of was made, within fifteen days after the completion and filing of the assessment-roll and the first posting and publication of the notice thereof as required by the Tax Law."^ The fifteen days does not run if no notice is given of the completion of the roll. An omission to give the notice does not vitiate the assessment, but leaves' the time to apply for a> certiorari unlimited."^ Upon the pre- sentation of such petition, the justice or court may allow a writ of certiorari to the ofiicers making the assessment, to review such as- sessment.^'^ In the city of New York, a certiorari to review or correct on the merits any final delermination of the board of taxes and assess- ments shall be allowed by the Supreme Court or any justice thereof, directed to the commissioners of taxes and assessments.^^* Prior to 1901, the charter of the city was silent on the subject of the time within which the application for the certiorari should be made. The limitation of fifteen days after notice of the completion of the roll, provided in the Tax Law, and applicable to the rest of the state, has no application to the city of New York, because of the different nature of the notice given in that city. The Code of Civil Procedure provides that the code writ must be applied for within four calendar months after the determination sought to bfe reviewed becomes final. Under such circustances it was said by the Appel- late Divisions of the Supreme Court, in the first and second depart- ments, that by reason of the absence of a limitation in the charter, the code limitation of four months applied to an application in the city of New York. In neither case, however, was the application in fact made after the expiration of the four months, so the state- ments of the court were dicta}^^ In a case before them the Court of Appeals declined to pass upon the question of limitation in the "^L. 1896, eh. 908, sec. 251, printed in the appendix. ''^People ex rel. Rome, W. & O. E. R. Co. v. Haupt, 104 N. Y. 377; People ex rel. Rome, W. & 0. E. E. Co. v. Hicks, 105 N. Y. 198; People ex rel. West Shore R. R. Co. v. Adams, 125 N. Y. 471; Matter of Corwiu, 135 N. Y. 245. "'L. 1896, ch. 908, sec. 251, printed in the appendix. "*L. 1901, ch. 466, see. 906, printed in the appendix. '"'People ex rel. Bronx Gas & Electric Co. v. Barker, 22 App. Div. 161; a. u., 47 N. Y. Supp. 1020, appeal dismissed, 155 N. Y. 308; People ex rel. Kendall 50 Conditions of Doing Business. •«ity of Xew York as not necessary to the decision made."* Wlien the charter was revised in 1901, this sentence was added to the section on certiorari : " Such certiorari and all proceedings there- under may be had and taken in the judicial district where such real estate is situated, and may be begun at any time before the first day of November in the year in which the determination sought to be reviewed or corrected has been made." The language is not alto- gether clear, but there is little doubt but that the intention was to apply the limitation of jSTovember first to personal property assess- ments as well as to real property assessments, and, if so, the courts will so construe the sentence stated, as a statute of limitations is a remedial statute and is to be construed liberally. In the event that it is decided that the limitation of Xovember first does not ap- ply to- personal property assessments, the time to apply for a cer- tiorari, in such case, is either limited to four months by the Code of Civil Procedure, as above stated, or is unlimited. § 56. The writ. The return.— Upon the presentation of the petition, the justice or court may allow a writ of certiorari to the ofiicers making the assessment, in the city of New York, to the com- missioners of taxes and assessments, to review such assessment, and shall prescribe therein the time within which a return thereto must be made and served upon the relator's attorney, which shall be not less than ten days, and may be extended by the court or a justice thereof.'" Under the original statute of 1880, under the present Tax Law, and under the charter of the city of New York, the grant- ing of the writ is mandatory on the court, the party aggrieved by the assessment has a right to it, and an order quashing it is appeal- able to the Court of Appeals.'^ A writ addressed to some but not all the assessors is fatally defective, but the court has power to al- V. Feitner, 51 App. Div. 196; s. c, 64 N. Y. Supp. 675; People ex rel. Langdon V. Feitner, 30 Misc. 646 ; s, c, 64 N. Y. Supp. 269. "•People ex rel. Thompson v. Feitner, 168 N. Y. 441. "T:..1896, ch. 908, sec. 251, printed in the appendix. ^"People ex rel. Commercial Mutual Ins. Co. v. Tax Commissioners, 144 N. Y. 483 ; Matter of Corwin, 135 N. Y. 245 ; People ex rel. American Thread Co. V. Feitner, 30 Misc. 641; s. c, 64 N. Y. Supp. 321. Geweeal Tax. 91 low it to be amended by bringing in the otter assessors.^^ The -writ shall be returnable to a Special Term of the Supreme Court of the judicial district in which the assessment complained of was made,"" except that, in the city of ISTew York, a writ to review an assessment of the real property of a corporation, having its princi- pal place of business in that part of the city in the second judicial district, shall be returnable to a Special Term of that district, not- withstanding all assessments on corporations in said city are de- termined by the assessors at their main office in the Manhattan bor- ough of the city in the first judicial district.™ In the city of New York, the writ can not be made returnable to the Appellate Divi- sion of the Supreme Court, like a code writ, but must be returnable to the Special Term, as required by the Tax Law."^ The officers making a return shall not be required to return the ■original assessment-roll or other original papers acted upon by them, but it shall be sufficient to return certified or sworn copies of such roll or papers, or of such portions thereof as may be called for by the writ. The return must concisely set forth such other facts as may be pertinent and material to show the value of the property as- sessed on the roll, and the grounds for the valuation made by the assessing officers, and the return must be verified."' The assessorsi must, in addition to setting forth the conclusion reached by them, set forth the evidence upon which that conclusion is based, to the ■end that the court, may determine whether the conclusion was fairly drawn from the facts established, or whether they acted arbitrarily in the matter."* If they have information or proof, which war- rants their assessment of the capital stock of a corporation, con- "'People ex rel. Benedict v. Eoe, 25 App. Div. 107; s. c, 49 N. Y. Supp. 227. ""L. 1896, ch. 908, sec. 251, printed in the appendix. '"L. 1901, ch. 466, sec. 906, printed in the appendix; superseding People ex rel. Long Island R. E.. Co. v. Feitner, 53 App. Div. 181; s. c, 65 N. Y. Supp. 935. ™PeopIe ex rel. Kendall v. Feitner, 51 App. Div. 196; s. c, 64 N. Y. Supp. 675. ™L. 1896, ch. 908, sec. 252, printed in the appendix. •"People ex rel. Consolidated Gas Co. v. Feitner, 78 App. Div. 313; s. c, 79 N. Y. Supp. 975; People ex rel. New York Mutual Gas Light Co. v. Wells, 42 Misc. 606; s. c, 87 N. Y. Supp. 595. 92 Conditions of Doing Business. trary to its sworn statement, they should return that information or proof ."° It is not necessary for it to appear in the return that the applicant is aggrieved to give the court jurisdiction to proceed under the writ."' § 57. Hearing at Special Term; reference.— If it shall appear upon the return to the writ that the assessment com- plained of is illegal or erroneous or unequal for any of the reasons alleged in the petition, the court may order such assessment, if illegal, to be stricken from the rolls, or if erroneous or unequal, it may order a re-assessment of the property of the petitioner, or the correction of his assessment upon the roll, in whole or in part, in such manner as shall be in accord- ance with law, or as shall make it conform to the valuations and assessments of other property upon the same roll and secure equality of assessment."^ In the city of New York, this statement is to be taken with the qualification that an assessment of personal property can not be reviewed for inequality."* The court can not order a re-assessment of an illegal assessment, but must strike it from the roll. If the assessment is erroneous or unequal, it must order a re-assessment or correct the assessment made."' If upon the hear- ing it shall appear to the court that testimony is necessary for the proper disposition of tlie matter, it may take evidence or may ap- point a referee to take such evidence as it may direct, and report the same to the court, with his findings of fact and conclusions of law, which shall constitute a part of the proceedings upon which the determination of the court shall be made.**" Where a relevant issue of fact is raised by the petition and return, the petitioner is entitled as a matter of right to have testimony taken by the court "'People ex rel. Edison Electric II. Co. v. Barker, 139 N. Y. 55; People ex rel. India Rubber & G. P. I. Co. v. Barker, 16 Misc. 252; s. c, 39 N. Y. Supp. 88. ""People ex rel. Thompson v. Fcitner, 1G8 N. Y. 441. "'L. 1896, eh. 908, see. 253, printed in the appendix. "'See sec. 50, supra. ""People ex rel. Garden City Co. v. Valentine, 5 App. Div. 520; s. c, 38 N. Y. Supp. 1087. ™L. 1896, eh. 908, sec. 253, printed in the appendix. Genebal Tax. 93 or a referee.^*' A reference will not be ordered, unless an issue of fact is presented, the decision of wliicli in favor of the relator will require a reduction or cancellation of the assessment. ^*^ The party taxed, after having made due and full application to the assessors, is entitled on certiorari to give anew before the court or referee the same testimony given before the assessors and additional tes- timony. The Special Term must consider the new testimony so given. ^^^ The findings of fact of the referee are not in the cafe until approved by the Special Term upon the coming in of the re- port of the referee, and if the Special Term makes new findings of fact, they are the findings of fact of the case.^^^ Objections to evi- dence made before the referee are not available on appeal from the final order of the Special Term, unless, upon the coming in of the re- port of the referee, the objecting party renews the objections or moves to strike out the evidence, and the Special Term rules thereon. ^*^ If upon the vsrrit and return the court decides that tes- timony is necessary and orders a reference it is not concluded al- though the corporation offers no testimony on the reference. In such a case upon the coming in of the report of the referee the court may decide upon the face of the return that the tax is. illegal and void.^' The Supreme Court has the power to correct any assessment if it finds it to be illegal, erroneous or unequal and it can supervise fhe judgment of the assessors.^^ The court will order a new as- "'People ex rel. Thomson v. Feitner, 168 N. Y. 441; People ex rel. Bronx Gas & Electric Co. v. Feitner, 43 App. Div. 198; s. c, 59 N. Y. Supp. 327; People ex rel. Manhattan Rj. Co. v. Coleman, 48 Hun, 602; 3. c, 1 N. Y. Supp. 112. ■'^People ex rel. Cord Meyer Co. v. Feitner, 39 Misc. 467; s. c, 80 N. Y. Supp. 152; People ex rel. P. F. Bhumgara Co. v. Wells, 93 App. Div. 212; s. c, 87 N. Y. Supp. 543, affirmed without opinion, 179 N. Y. 529. ^"People ex rel. Citizens Lighting Co. v. Feitner, 81 App. Div. 118; s. c, 81 N. Y. Supp. 73. '"People ex rel. Bibb Mfg. Co. v. Wells, 84 App. Div. 330; b. c, 82 N. Y. Supp. 564. '"People ex rel. Manhattan Ky. Co. v. Barker, 165 N. Y. 305. ''"People ex. rel. Wallkill Valley R. R. Co. v. Keator, 36 Hun, 592. "'People ex rel. Twenty-third Street Ey. Co. v. Feitner, 92 App. Div. 518; 8. c., 87 N. Y. Supp. 304. '"■People ex rel. BLnickerbocker F. Ins. 00. v. Coleman, 107 N. Y. 541. 94 Conditions of Doing Business. sessment of the capital stock of a corporation, where the assessors adopted an illegal or erroneous method in making it ;^^' but not un- less the corporation is aggrieved by the method adopted.^^" The assessors may refuse to reduce an assessment if the party assessed refuses to answer a pertinent question on the hearing before them. In such a case, unless the assessors base their determination on the refusal of the party to answer, such refusal does not prevent the court on certiorari from reviewing the assessment or ordering a ref- erence to take testimony.'''^ An order of court directing a new as- sessment is a final order and to review the new assessment a new writ of certiorari must be applied for. The new writ brings up for review a question raised on tlie new assessment, although not raised on the first assessment. ^'^ The question whether persons or prop- erty are assessable is jurisdictional, and is always open to inquiry when the authority to make the assessment is assailed. The juris- diction of the assessors depends upon the existence of the facts stated in the statute. They can not acquire jurisdiction by de- termining that they have it."^ The place of taxation within the state is not jurisdictional. A domestic corporation, reporting to the assessors that its principal ofiice is in one tax district, and ap- pearing on grievance day and obtaining a reduction in valuation, can not, claim that the assessment is void, because its charter shows that its principal office is in another tax district, as its appearance before the assessors gives them jurisdiction of the person.^'* The same rule holds good of a foreign corporation doing business in this state. A fact which was conceded by the assessors on the hearing before them is not up for review on the certiorari to review their determination. The ofiBce of a certiorari is to review the decision '"People ex rel. Consolidated Gas Co. v. Feitner, 78 App. Div. 313; s. c, 79 N. Y. Supp. 975; People ex rel. Bleeeker Street & F. F. R. R. Co. v. Barker, 85 Hun, 210; s. c, 32 N. Y. Supp. 990. '"People ex rel. Equitable Gaslight Co. v. Barker, 66 Hun, 21; s. c, 20 N. Y. Supp. 797, affirmed without opinion, 137 N. Y. 544. '"People ex rel. Dwight v. Piatt, 92 Hun, 349; s. c, 36 N. Y. Supp. 531, appeal dismissed, 151 N. Y. 664. ""People ex rel. Delaware & Hudson Co. v. Wells, 87 App. Div. 284; s. c, 84 N. Y. Supp. 277. ""McLean v. Jephson, 123 N. Y. 142. "•Matter of McLean, 138 N. Y. 158. Genebal Tax. 9& actually made bytlie assessors. ^^^ The return is not conclusive on the relator,"* nor on the assessors, who may give evidence on the hearing before the court or referee contrary to the statements in their return."'' As already stated the' party aggrieved by an assessment must file with the assessors on grievance day a statement specifying the respect in which the assessment is incorrect, and, in the city of New York, an application to the commissioners to have an assess- ment corrected, in relation to real property, must be in writing stating the ground of objection. On certiorari tO' review such an assessment, the party assessed is limited to the grounds so stated on the application to the assessing officers."' If the only objection made on grievance day is that the party has no personal property liable to taxation, the objection that the tax is unequal can not be taken by, certiorari."' The burden is on the corporation taxed to prove its claim that it has no property subject to tax.™ As already stated, in determining the actual value of the capital stock of a cor- poration, its real property out of the state or country may be de- ducted at its actual value, if its assessed value is not known. After the assessors, however, have fixed such actual value, it is incum- bent on the corporation, before it is entitled to call upon the court . to correct the assessment, by increasing the sum to be deducted for the value of its real property, to give evidence and furnish data showing that the actual value exceeds the sum fixed by the assess- ors.^" If the assessors fix the value of the surplus of a corpora- "'People ex rel. Canaday v. Williams, 90 Hun, 501; a. c, 36 N. Y. Supp. 65. , ""People ex rel. Troy Union E. R. Co. v. Carter, 5 N. Y. Supp. 507, affirmed ■without opinion, 117 N. Y. 625. '"People ex rel. Dexter v. Palmer, 86 Hun, 513; s. c, 33 N. Y. Supp. 926, affirmed without opinion, 148 N. Y. 732. ' "'People ex rel. Greenwood' v. Feitner, 77 App. Div. 428 ; s. c, 79 N. Y. Supp. 309. Failure to appear and object on grievance day may prevent a mandamus or an action to recover back taxes paid. See sec. 61, infra. It may preclude an objection to supplementary proceedings to recover the tax. Matter of L. Adler Brothers & Co., 174 N. Y. 287. '"In re Winegard, 78 Hun, 58; a. c, 28 N. Y. Supp. 1039. ^People ex rel. Green v. Hall, 83 App. Div. 375; s. c, 31 N. Y. Supp. 956. ^''People ex rel. Panama E. R. Co. v. Commissioners of Taxes, 104 N. Y. 240. 96 Conditions of Doing Business. tion they cannot increase it on certiorari on the ground of error on their own part/"' but they may give proof on the reference of prop- erty omitted in their original appraisal.^"^ Unless elements proper to be considered have been excluded, or those not proper have bfen given force, or unless some legal error has vitiated the conclusion, the determination of the assessors on a question of value, over-valu- ation, or inequality of valuation, based on some evidence or infor- mation to support it, will not be reviewed by the Supreme Court,'"'* nor will such a determination of the assessors or of the Supreme Court be reviewed by the Court of Appeals.^"" Thus the court will not review the determination of the assessors of the value of the sums invested in this state by a foreign corporation, if the true value does not appear, and there is some evidence to support the deter- mination made.^°* § 58. Costs. — Costs shall not be allowed against the officers whose proceedings may be reviewed under such writ of certiorari unless it shall appear to the court that they acted with gross negli- gence or in bad faith or with malice in making the assessment com- plained of. If the writ shall be quashed or the assessment eon- firmed, or if the assessment complained of shall be reduced by an amount less than half the reduction claimed before the assessing officers costs and disbursements shall be awarded against the peti- tioner. If the assessment shall be reduced by an amount greater than half the reduction claimed before the assessing officers, costs and ditbursements shall be awarded against the tax district repre- sented by the officers whose proceedings ma^ be reviewed. The costs and disbursements shall not exceed those taxable in an action upon the trial of an issue of fact in the Supreme Court, except that if evidence shall be taken there shall be included in the taxable ^'"People ex rel. Commonwealth Ins. Co. v. Coleman, 112 N. Y. 565. ^"People ex rel. Knickerbocker S. D. Co. v. Wells, 181 N. Y. 245. '"•People ex rel. Westbrook v. Board of Trustees, 48 N. Y. 390. =°=People ex rel. Rome, W. & 0. E. R. Co. v. Hicks, 105 N. Y. 198; People ex rel. Warren v. Carter, 109 N. Y. 576; People ex rel. Eckerson v. Christie, 115 N. Y. 158; People ex rel. Rome, W. & 0. R. R. Co. v. Haupt, 104 N. Y. 377; People ex rel. Edison El. II. Co. v. Barker, 139 N. Y. 55. "•People ex rel. Hecker-Jones-Jewell Milling Co. v. Barker, 147 N. Y. 31. General Tax. 97 costs and disbursements the expense of furnishing to the court or to the referee a copy of the stenographer's minutes of the evidence taken.^"^ § 59. Appeal to Appellate Division. — An appeal may be taken by either party from an order, judgment or determination made upon the hearing of the writ, as from an order, and it shall be heard and determined in like manner as appeals in the Supreme Court from orders.^"^ The Appellate Division will reverse a find- ing of fact of the Special Term, only on clear conviction that it is erroneous.^"' Where the question raised on the certiorari isi what items should be included in making up assets, the Appellate Di- vision, finding that some items only are assessable, may modify the order, or may reverse it and send the proceeding back for a re-as- sessment, but should not vacate the assessment absolutely. ^^^ § 60. Appeal to Court of Appeals. — The constitution of 1894 limits the right of appeal to the Court of Appeals in special pro- ceedings to orders entered upon decisions of the Appellate Division of the Supreme Court finally determining such proceedings. Cer- tiorari is a special proceeding. An order directing a new assess- ment is a final order ;^" but an order of the Appellate Division, which not only reverses an order of the Special Term, quashing a writ of certiorari to review an assessment, but also reinstates the writ and remits the proceedings to the Special Term for its determi- nation on the merits, is not an order finally determining the certio- rari proceeding, and so is not appealable to the Court of Appeals.^'^ The constitution provides further that the jurisdiction of the Court of Appeals, except where the judgment is of death, shall be limited ""L. 1896, ch. 908, sec. 254, printed in the appendix. '"h. 1896, ch. 908, sec. 255, printed in the appendix. =™People ex rel. Wallkill Valley R. R. Co. v. Keator, 36 Hun, 592. ^People ex rel. Manhattan Ry. Co. v. Barker, 165 N. Y. 305. "•People ex rel. Delaware & Hudson Co. v. Wells, 87 App. Div. 284; s. c„ 84 N. Y. Supp. 277. '•"People ex rel. Bronx Gas & El. Co. v. Barker, 155 N. Y. 308. 1 98 Conditions of Doing Business. to the review of questions of law. Under this provision it has been held that, if, on a writ of certiorari to review an assessment of the capital stock of a corporation, on the grounds of over-valuation and inequality, the Special Term decides that there is not sufficient in the evidence to justify the assessors in making the assessment at the figure in question, and orders a new assessment, and its order is affirmed by the Appellate Division, no question of law is raised to be reviewed by the Court of Appeals.^^^ Prior to the constitution of 1894, the Court of Appeals held that it exercised no power to supervise the judgment of the assessors, and that, even if it should think that the assessors erred in their judgment, as to the actual value of the capital stock of a corporation, by taking one test of value when another would in its opinion have been better, no abso- lute rule of law being violated, it would have no power to interfer& with the assessment; but that, if the assessors should take a stan- dard of value which in fact was not any measure of value, the case would be different. This decision was made when the method of assessing the stock at its par value was in vogue, and before the method of ascertaining the actual value of the capital stock by tak^ ing the actual value of the assets, not being surplus, had been de- veloped.2" The constitution of 1894 provides further that no unanimous de- cision of the Appellate Division of the Supreme Court, that there is evidence supporting or tending to sustain a finding of fact or a verdict not directed by the court, shall be reviewed by the Court of Appeals. This provision applies to a certiorari proceeding, and to findings of fact written out in entenso or implied as necessary to- the decision of the court below. In applying it to an appeal from an order of the Appellate Division, unanimously affirming an order of the Special Term, dismissing a writ of certiorari and confirming an assessment of the capital stock of a corporation for general tax,^ after a trial de novo upon the issues raised by the petition and re^ turn, the Court of Appeals held that the unanimous affirmance necessarily affirmed all the findings of fact, whether expressed or "Tcople ex rel. Malcom Brewing Co. v. Board of Assessors, 154 N. Y. 437. "'People ex rel. Knickerbocker Fire Ins. Co. v. Coleman, 107 N. Y. 541. General Tax. 99 not, essential to support the order of the Special Term, and said that the effect of the unanimous order of affirmance was a decision that there was evidence supporting the findings of fact as expressed or necessarily implied. Accordingly, the Court of Appeals refused to look into the evidence to see whether the findings were supported by the evidence and whether there was any evidence to support them.^i= Following this decision, the same court held, that, if a; writ of certiorari to review an assessment of real property, on the grounds of over-valuation and inequality, is dismissed by the Special Term, and its order is unanimously affirmed by the Appellate Divi- sion, the Court of Appeals has' no jurisdiction to review the facts alleged to show over-valuation and inequality.^" Two years after- wards the Court of Appeals in a similar case, the point not being raised, did look into the evidence to see whether a finding of fact, necessarily implied by the determination made below, was sup- ported by the evidence.^" The circumstances were these. Debts* incurred in the purchase of non-taxable property can not be de- ducted, so a debt incurred in the purchase of good will can not be deducted, as good will is not taxable. The Special Term deducted a debt of $700,000. It made no express finding of fact in point.^^* The unanimous decision of the Appellate Division necessarily im- plied a finding of fact that the debt deducted was not incurred in the purchase of non-taxable property. !N"evertheless, the Court of Appeals decided as a matter of fact, from the evidence, that $150,- 000 of the debt was incurred in the purchase of good will, and there- upon modified the determination below accordingly. Three years later the Court of Appeals, in a similar case, refused to look into the evidence to see whether a debt was real and so deductible or speculative and contingent and so not deductible, and held that a unanimous affirmance by the Appellate Division of an order made by the Special Term, on a trial de novo of the issues raised by a peti- tion and return, affirming the assessment made and dismissing the "'People ex rel. Manhattan Ry. Co. v. Barker, 152 N. Y. 417. ""People ex rel. Broadway Imp. Co. v. Barker, 155 N. Y. 322. "'People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195. "'National Harrow Co. v. E. Bement & Sons, 163 N. Y. at page 520. 100 Conditions of Doing Business. writ of certiorari, ,is a determination that the findings of fact ex- pressed or implied, are supported by evidence, and that the order of the Appellate Division was not reviewable by the Court of. Appeals.^^' § 61. Replevin. Trespass. Injunction. Mandamus. Action to recover back It may be taken as a general rule that no other remedy will be allowed, where the party assessed has a plain, ade- quate and sufficient remedy by certiorari. Certiorari does not lie where the whole assessment-roll is illegal, because the assessors were not such, de jure or de facto, or because the majority acted without notice to the third assessor. In such case, the remedy is an action of replevin or trespass against the collector for executing a void warrant. An injunction is not proper. ^^° As already stated, in the city of New York, an assessment of personal property can not be reviewed for inequality. Under the charter of the former city of jSTew York, in force in 1885, neither an assessment of real or per- sonal property could be reviewed for inequality, and it was held, that, while the charter, in the cases specified therein, limited the remedy to certiorari, the court had inherent jurisdiction to grant an injunction against the collection of a tax for inequality, being a ground not specified in the charter, but would not do so, unless the inequality resulted from some fraud or illegal discrimination or classification, as distinguished from honest mistake.^^^ If a party, aggrieved by an illegal, erroneous or unequal assessment, fails to apply to the assessors on grievance day, and to apply for a writ of certiorari within the time limited by the statute, he can not have afterwards a mandamus to compel the assessors to strike the assess- ment from the roll, as he had an adequate remedy by certiorari.^^^ For the same reason, an action will not lie against a municipality to recover back taxes paid, on the ground that the property assessed ""People ex rel. Sands v. Feitner, 173 N. Y. 647. "'"See sec. 51, supra. ^'See sec. 52, supra. ^'"People ex rel. Cochrane v. Feitner, 44 App. Div. 239; 8. c, 60 N. Y. Supp. 614; People ex rel. Bliss v. Feitner, 72 App. Div. 45; s. c, 76 N. T. Supp. 219. Geneeal Tax. consisted of exempt property. ^^' A foreign savings bank is assess- able for general tax in the city of New York, on shares of stock of banks in that city, owned by it and forming part of its surplus .funds not due depositors. It is an answer to a suit against the city to recover back taxes paid on such an assessment, on the ground that the bank had no surplus to be taxed, that it failed to make such claim to the tax commissioners.^^^ ^United States Trust Co. v. The Mayor, 144 N. Y. 488. ""Citizens Savings Bank of Stamford v. The Mayor, 37 App. Div. 560; s. c, 66 N. Y. Supp. 295, affirmed on opinion below, 166 N. Y. 594. 102 Conditions of Doing Business. CHAPTEE VI. Fbanchise Tax. § 62. Definition and nature of franchise tax. — Every corpora- tion, joint stock company or association incorporated, organized or formed by or pursuant to law in this state shall pay to the state treasurer annually an annual tax to be computed upon the basis of the amount of its capital stock employed within this state and upon each dollar of such amount. Every corporation, joint stock com- pany or association organized, incorporated or formed under the laws of any other state or country shall pay a like tax for the privi- lege of exercising its corporate franchise or carrying on its business in such corporate or organized capacity in this state, to be computed upon the basis of the capital employed by it within this state.^ It is no objection to the taxation of a franchise by a state that it was granted by congress.^ A licensee of a patented article is not the agent of its corporation owner and such owner cannot be taxed as principal of the business of the licensee.' Such franchise tax on a foreign corporation is not in conflict with the state or federal con- stitutions, as the tax is on the franchise of doing, business in this s.tate, and not on the property, and, as already stated, the state may impose any conditions on a foreign corporation for the privilege of doing business here, provided it is not engaged in business, strictly interstate or foreign, or in the business of the federal government.* A corporation whose business in this state is wholly interstate com- 'L. 189G, eh. 908, sec. 182, printed in the appendix. 'Atlantic & P. T. Co. v. Piiiladelphia, 190 U. S. 160. •People V. American Bell Tel. Co., 117 X. Y. 241. 'People ex rel. Parke, Davis & Co. v. Roberts, 171 U. S. 658; People v. Horn Silver Mining Co., 105 X. T. 76, affirmed 143 U. S. 305; People ex rel. American Soda Fountain Co. v. Roberts, 158 N. Y. 168; People ef rel. William J. Matheson & Co. v. Roberts, 158 N. Y. 162; People v. Gold & Stock Tel. Co., 98 N. Y. 67; People v. Home Ins. Co., 92 N. ,Y. 328, affirmed 134 U. S. 594; People v. Equitable Trust Co. of X. L., 96 N. Y. 387; People ex rel. Postal Tel. Cable Co. v. Campbell, 70 Hun, 507; s. c, 24 N. Y. Supp. 208; London" & S. F. Banli v. Block, 117 Fed. 900, U. S. Cir. Ct, N. D. Gal.; Security Trust Co. v. Liberty Building Co., 96 App. Div. 436; s. c, 89 N. Y. Supp. 340. Franchise Tax. 103 merce is not subject to franchise tax.^ It is as a condition of doing business here that this state levies the franchise tax on a foreign •corporation.* A franchise tax corporation owns three things: Its capital, existing in money or property ; its surplus, if any, and its franchise. The franchise is the thing taxed, and the tax is com- puted upon the basis of the amount of its capital stock employed "within this state.^ A foreign corporation is not subject to fran- chise tax, unless it i& doing business in this state. What consti- tutes doing business in this state by a foreign corporation has been •considered already.^ Xot only must a foreign corporation be do- ing business here, but also it must have some part of its capital em- ployed here.' It is taxed because it is doing business here, but it must have some capital employed here in order to furnish a princi- pal sum on vphich to compute the tax. A domestic corporation is taxed because it received its franchise to be a corporation from this state, but it also must have capital employed here for the same § 63. Corporations exempt from franchise tax. — A laundry cor- poration, or a mining corporation, wholly engaged in mining ores vyithin this state, having at least forty per centum of its capital stock invested in property in this state and used by it in its laun- drying or mining business in this state, is exempt from this tax. Certain societies, railroads, and water, gas and monied corpora- tions are exempt. A manufacturing corporation, having at least forty per centum of its capital stock invested in property in this state and used by "People ex rel. Connecting Terminal R. R. Co. v. Miller, 178 N. Y. 194. "See sec. 21, supra. 'People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433; People ■ex rel. American Contracting & Dredging Co. v. Wemple, 129 N. Y. 558; People ex rel. United States Aluminium Printing Plate Co. v. Knight, 174 N. Y. 475; People v. Albany Ins. Co., 92 N. Y. 458. »See sees. 6-17, supra. "People ex rel. Chicago Junction Rail-svays &, U. S. Co. v. Roberts, 154 N. T. 1 ; People ex rel. Harlan & Hollingsworth Co. v. Campbell, 139 N. Y. 68. "People ex rel. Da-ns-Colby" Ore-Roaster Co. v. Campbell, 66 Hun, 146 ; s. c, 21 N. Y. Supp. 7. 104 Conditions of Doing Business. it in its manufacturing business in this state, is exempt from this tax to the extent only of its capital actually employed in this state in manufacturing and in the sale of the product of such manufac- turing." Under the statute as originally enacted a manufacturing corporation carrying on manufacture within this state was exempt from this tax, and it was held that a foreig-n corporation f'ngaged in good faith in manufacturing a small part of its goods here wasi exempt. ^^ But in 1889 the exemption was changed to manufactur- ing corporations or companies wholly engaged in carrying on manu- facture in this state, under which provision it was held that a for- eign corporation, with charter power to manufacture electrical sup- plies and to deal in supplies and electrical articles manufactured by others, and having a large manufacturing plant here, is not wholly engaged in manufacturing here, if a small part of its busi- ness here is dealing in supplies and articles manufactured by others.-^' It was held also that a foreign corporation selling here goods manufactured out of this state cannot be wholly engaged in manufacturing here;" unless it was formed for manufacturing only, and such sales of goods manufactured by others was ultra, vires, in which case, however, the tax might be levied on the portion of the capital employed in such sales. -"^ It was held also that a foreign corporation may be wholly engaged in manufacturing here, although in another state it imports merchandise to a small extent.^' In 1896, ^^^hen revised in the present Tax Law, the exemption was changed to manufacturing corporations to the extent only of the capital actually employed in this state in manufacturing and in the sale of the product of such manufacturing, and in 1901, the exemp- tion was limited to manufacturing corporations having at least "L. 1896, ch. 908, sec. 183, printed in the appendix. '"Peoplfe ex rel. Seth Thomas Clock Co. v. Wemple, 133 N. Y. 323. "People ex rel. Western Electric Co. v. Campbell, 145 N. Y. 587. "People ex rel. American Soda Fountain Co. v. Roberts, 158 N. Y. 168; People ex rel. William J. Matheson & Co. v. Roberts, 158 N. Y. 162; People ex rel. Frederick A. Stokes Co. v. Roberts, 90 Hun, 533; s. c, 36 N. Y. Supp. 73. "People ex rel. Tiffany & Co. v. Campbell, 144 N. Y. 166. "People ex rel. F. W. Devoe & C. T. Reynolds Co. v. Roberts, 51 App. Div. 77; s. e., 64 N. Y. Supp. 494. Franchise Tax. 105 foTty per centum of their capital stock inve&ted in property in this state and used by them in their manufacturing business in this state. The exemption of manufacturing corporations exempts not only those formed under the manufacturing act of 1848, now re- vised in the Business Corporations Law of this state, but also those formed under other statutes of this state" or of other states or by special charters. Manufacturing implies producing something by the application of skill or labor to the raw material.^* Cutting kindling wood but of slabs," or making paint from oil, white lead, turpentine and a drier, according to a secret formula,^" or generating and supplying gas^^ or electric currents for illumination,^^ or turning rubber hold- ers and gold pens into fountain pens by means of skilled workmen and intricate machinery under a patented process,^ or making pav- ing compound out of asphalt and other ingredients^^ is manufactur- ing. Collecting, storing, preserving, preparing for sale, transport- ing and selling ice,^^ or laying an asphalt pavement from asphalt already manufactured^' is not manufacturing. Building, raising, repairing and coppering vessels by a dry-dock corporation, the prin- cipal portion of the work relating to the improvement of vessels which have already been constructed, and not to the construction "Nassau Gas Light Co. v. City of Brooklyn, 89 N. Y. 409. "People ex rel. Union Pacific Tea. Co. v. Roberts, 145 N. Y. 375; People v. Knickerbocker Ice Co., 99 N. Y. 181. "People ex rel. Standard Wood Co. v. Roberts, 20 App. Div. 514; s. c, 47 N. Y. Supp. 122. ^"People ex rel. F. W. Devoe & C. T. Reynolds Co. v. Roberts, supra. ^'Nassau Gas Light Co. v. City of Brooklyn, 89 N. Y. 409. ^People ex rel. Brush Electric Mfg. Co. v. Wemple, 129 N. Y. 543; People ex rel. Edison Electric Illuminating Co. v. Wemple, 129 N. Y. 664; People ex rel. Edison Electric Light Co. y. Campbell, 88 Hun, 527; s. c, 34 N. Y. Supp. 711. ^People ex rel. L. E. Waterman Co. v. Morgan, 48 App. Div. 395; s. c, 63 N. Y. Supp. 76. "People ex rel. Fruin Bambrick Pav. Co. v. Knight, 99 App. Div. 62; s. c, 90 N. Y. Supp. 537. ^People V. Knickerbocker Ice Co., 99 N. Y. 181. '"People ex rel. Syracuse Imp. Co. v. Morgan, 59 App. Div. 302; s. c, 69 N. Y. Supp. 263; People ex rel. Fruin Bambrick Pav. Co. v. Elnight, supra. 106 CoxDiTioxs OF Doi:s-G Business. of vessels, is not manufacturing.^' Taking tea in the original state and mixing various kinds together, producing a compound called N. Y. 323. ■"People V. Horn Sliver Mining Co., 105 N. Y. 76, affirmed 143 U. S. 305. "People ex rel. Fruin Bambrick Pav. Co. v. Knight, 99 App. Div. 62; s. c, 90 N. Y. Supp. 537. Feanchise Tax. 1"07 § 64. Report by corporation. Investigation by comptroller. — Every corporation liable to pay a franchise tax under section 182 of the Tax Law shall on or before November 15th in each year make a written report to the comptroller of its condition at the eloee of its business, on October 31st preceding, stating the amount of its authorized capital stock, the amount of stock paid in, the date and rate per centum of each dividend declared by it during the year ending with such day, the entire amount of the capital of such cor- poTation, and the capital employed by it in this state during such year.'^ The report shall have annexed thereto the affidavit of the president, vice-president, secretary or treasurer of the corporation to the effect that the statements contained therein are true. It shall contain any other data, information or matter, which the comptrol- ler may require to be included therein, and he may prescribe the form in which such report shall be made and the form of oath thereto. When so prescribed such form shall be used in making the report. The comptroller may require at any time a further or supplemental report, which shall contain information and data upon such matters as the comptroller may specify.'* In case no ■dividend has been declared, or in case the dividends amounted to less than six per centum, the treasurer or secretary of the corpora- tion shall, under oath, between the 1st and 15th days of November in each year, estimate and appraise the capital stock of the corpora- tion upon which no dividend has been declared, or upon which the dividends amounted to less than six per centum, at its actual value in cash, not less, however, than the average price which said stock sold for during said year, and shall forward the same to the comp- troller with the report above mentioned." The original act of 1880, in terms, required the corporation to furnish such appraisal in a case where the dividends declared amounted to less than six per centum, as well as in a case where no dividend was declared. The language of the present statute is not specific, but it has been con- strued to require the furnishing of the appraisal, as the former ==L. 1896, eh. 908, sec. 189, printed in the appendix. °°Id. sec. 191, printed in the appendix. "Id. sec. 190, printed in the appendix 108 Conditions of Doing Business. statute did, in either case.^* If the comptroller is not satisfied with the valuation of the capital stock of such corporation, upon which no dividend has been declared, or upon which the dividends '■amounted to less than six per centum, so made and returned to him by the treasurer or secretary of the corporation, he is author- ized and empowered to make a valuation thereof, and to settle an account upon the valuation so made by him and ( ? for) the taxes, penalties and interest to be paid the state.^^ In case any report shall be unsatisfactory to the comptroller, or is not made, the comp- troller is authorized to make an estimate of the dividends paid by the corporation, and the value of the capital stock employed by it^ from any such report or from any other data, and to order and state an account, according to the estimate and value so made by him, for the taxes, percentage and interest due the state from the corporation. The comptroller shall have power also to examine or cause to be examined, in case of a failure to report, or in case the report is unsatisfactory to him, the books and records of the cor- poration, and may hear testimony and take proofs material for his information, either personally or he may appoint a commissioner by a written appointment under his hand and official seal for that pur- pose. The commissioner shall be authorized to make such exami- nation, and to take such testimony, and to hear such proofs, and to report the proofs and testimony so taken, and the result of his ex- amination so made, and the facts found by him, to the comptroller. The comptroller shall therefrom or from any other data which shall be satisfactory to him, order and state an account for the tax due the state, together with the expenses of such examination and the taking of such testimony and proofs. Such expenses shall be fixed and adjusted by the comptroller." The comptroller or the commis- sioner may issue a subpoena requiring a person to attend as a wit- ness and to bring with him a book or paper. The person sub- ""People ex rel. New York & East River Ferry Co. v. Roberts, 168 N. Y. 14. "L. 1896, ch. 908, sec. 190, printed in the appendix. Tlie original statute of 1880 read "for." Tlie substitution of the word "and" seema to have been unintentional. "Id. sec. 192, printed in the appendix. Feaitchise Tax. 109 poenaed must obey ft. If he fails to attend he is liable for dam- ages, and a judge of a court may issue a warrant to the sheriff of the county, commanding him to apprehend the witness and bring him before the person before whom his attendance was required. If the witness refuses to testify, or to answer a legal and pertinent question, or to produce a book or paper which he is directed to bring by the subpoena, or to subscribe his testimony, he- may be im- prisoned.*^ § 65. Tax when dividends amount to six per centum or more. — If the dividends made and declared upon the capital stock of the corporation, during the year ending with the thirty-first day of October, amount to six or more than six per centum upon the par value of such capital stock, the tax shall be computed upon the basis of the amount of its capital stock employed within this state, and upon each dollar of such amount, at the rate of one-quarter of a mill for each one per centum of dividends so made and declared. ^^ Dividends earned out of this state as v^ell as those earned in this state are referred to.*^ It has been held that if the stockholders of a domestic trust company contribute a suin of money to it for the purpose of strengthening it for which no additional stock is issued, and thereafter a part of such, sum is returned to them, such re-pay- ment is not a dividend in respect to fixing the rate of franchise tax.** The original statute of 1880 provided that in case the dividends were six per centum or more the rate should be one-quarter mill upon the capital stock for each one per centum of dividends made or declared.*' This was modified in 1885 by adding to section 11 of the original statute the provision fhat the amount of capital stock, the basis for the tax, should be the amount employed in this state.** These provisions read together were constructed to mean "Code Civil Pro. sees. 854 to 859. "L. 1896, eh. 908, see. 182, printed in the appendix. "People ex rel. New England Dressed Meat & Wool Co. v. Roberts, 155 N. Y. 408. "People ex rel. North American Trust Co. v. Knight, 96 App. Div. 120; s. c, 89 N. Y. Supp. 72. «L. 1880, eh. 542, sec. 3. "Id. sec. 11. 110 Conditions of Doing Business. that the capital stock employed within the state, upon which to com- pute the tax when the dividends were six or more than six per centum, was the capital stock employed within this state at par, th,at is the share stock employed within this state and not the ap- praised capital employed within this state, that is the actual value of the a-sets employed within this state acquired with or repre- senting capital as distinguished from surplus and franchise.^' So far as such decision applies to the present Tax Law, it must be deemed to be overruled. Section 182 of the Tax Law provides that in case the dividends amount to six or more than six per centum the tax shall be computed upon the basis of the amount of capital stock employed within this state, referring to the actual value of the assets employed within this state acquired with or representing capital as distinguished from surplus and franchise.^' § 66. Tax when dividends amount to less than six per centum. — If the dividend or dividends made and declared upon the capital stock of the corporation during the year ending with the thirty-first day of October amount to less than six per centum on the par value of the capital stock, the tax shall be at the rate of one and one-half mills upon such portion of the capital stock at par, as the amount of capital employed within this state bears to the entire capital of the corporation.*' The original statute of 1880 provided that in such a case the rate should be one and one-half mills upon each dol- lar of the appraised capital stock.^" This was modified in 1HH5 by adding to section 11 of the original statute the provision that the amount of capital stock, the basis of the tax, should be the amount employed in this state.'^ The result of these provisions, read to- gether, was that, if its share stock was above par, a corporation paid a larger tax when it declared less than six per centum dividendsi than when it declared six per centum dividends. ^^ Sections 182 "People ex rel. Jewelers Circular Pub. Co. v. Roberts, 155 N. Y. 1. "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. «»L. 1896, ch. 908, sec. 182, printed in the appendix. ""L. 1880, eh. 542, sec. 3. "L. 1880, ch. 542, sec. 11, as amended. "'People V. Delaware & Hudson Canal Co., 54 Hun, 598; s. c, 7 N. Y. Supp. 890, affirmed on opinion below, 121 N. Y. 666. Feanchise Tax. Ill and 190 of the present Tax Law provide that, where the dividends amount to less than six per centum, the tax shall be at the rate of one and one-half mills upon such portion of the capital stock at par, that is the share stock, not less, however, than the average price which said stock sold for during the yeai, as the amount of capital employed within this state, that is the actual value of the assets, employed within this state, acquired with or representing capital as distinguished from surplus and franchise, bears to the entire capital, that is the actual value of the entire assets, acquired with- er representing capital as distinguished from surplus and franchise. Having ascertained, by means of such proportion, the portion of the capital stock at par upon which to compute the tax, its actual value in cash is to be found to furnish a principal sum on which to compute the tax. The tax is not to be computed on such ascer- tained portion of the capital stock at its par value, but is one and one-half mills on such ascertained portion of the capital stock at its actual value in cash. The actual value is to be found in the man- ner prescribed in section 190 of the Tax Law. That section pro- vides that, in case no dividend has been declared, the corporation shall furnish an appraisal of the capital stock upon which no divi- dend has been declared, and upon which the dividend amounted to less than six per centum, at its actual value in cash. The original statute of 1880, in terms, required the corporation to furnish such appraisal in a case where the dividend declared was less than six per centum, as well as in a case where no dividend was declared. The language of the present section is not specific, but it has been construed to require the furnishing of the appraisal, as the former statute did, in either case. The following illustration has been given by the Court of Ap- peals. A corporation with capital stock of $500,000 par value, has assets of the value of $250,000, of which $150,000 are em- ployed in business in this state. The assets employed in this state are three-fifths of the total assets; therefore, three-fifths of the share capital, or $300,000, should be considered as employed vnthin this state. It is this rule that the statute intended to prescribe by the provision that the tax shall be upon such portion of the capital stock at par as the amount of the capital employed within this state 112 Conditions of Doing Business. bears to the entire capital. But having determined that $300,000 of the capital stock is to be deemed as employed within this state, then that capital stock is, under section 190 of the Tax Law, to be taken at its actual cash value as the principal sum upon which to compute the tax.^^ The following example, also, is taken from a recent decision of the Court of Appeals. A domestic railroad cor- poration had an average total capital stock during the tax year of $108,750,000 par value. The average price for which it sold was 129.8125. Its total assets were $337,760,785.52. The portion of such assets employed in this state was $220,259,566.51. There- fore, the entire capital stock at its actual value not less than the average price for which it sold during the year was $141,171,093.75 and the proportion was X : 141,171,093.75 : : 220,259,566.51 : 337,760,785.52. Under this statement x = $92,060,076.91, the principal sum upon which to compute the tax. It will he seen that in the latter example the total capital stock at par was reduced to its actual value, not less than the average price for which it sold during the year, before the proportion was solved. Mathematically the result is precisely the same whether the entire capital stock is so reduced before the solution of the proportion, or whether it is taken at par and the portion found to be employed within this state is so reduced after the solution of the proportion." Inasmuch as the statute prescribes that the proportion shall be as? the capital employed within this state bears to the entire capital, and inasmuch as the capital so referred to signiiies assets, it must be understood that wherever assets are mentioned, reference is had to assets acquired with or representing capital a^^ distinguished from surplus and franchise. § 67. Tax when no dividend ds made or declared. — If no divi- dend is made or declared, the tax shall be at the rate of one and "People ex rel. New York & East River Ferry Co. v. Roberts, 168 N. Y. 14; People ex rel. Union Ferry Co. of N. Y. & B. v. Roberts, 66 App. Div. 157 ; s. c, 72 N. Y. Supp. 950. "People ex rel. New York Central & H. R. R. R. Co. v. Knight, 173 N. Y. 255. Feanchise Tax. 113 one-half mills upon each dollar of the appraised capital employed within this state.^^ This provision is the same as was contained in the original statute of 1880, as modified in 1885 by limiting the capital upon which to compute the tax to that employed in this state. ^^ It means that the tax shall be computed on the actual value of the assets^ employed within this state, acquired with or repre- senting capital as distinguished from surplus and franchise." The Appellate Division of the Supreme Court has held recently that where the corporation has not declared a dividend, the comptroller may include surplus in appraising capital.''^ If a domestic corporation pays no dividends, it is taxed at one and one-half mills on the appraised capital employed within the state,^' and the average capital so employed during the year is the amount upon which to compute the tax and not the highest amount so employed.*" The value must not be less than the average price at which the stock sold during the year," but may be more than such average price.*^ In a case where no dividend has been de- clared and no sale of stock has been made, the actual value of the capital stock of a domestic corporation is the value of its assets after deducting its liabilities and adding to the sum then remaining the value of the good will of the business, including its right to con- duct it under its franchises.*^ § 68. Tax where the corporation has different kinds of stock. — If such corporation, joint stock company or association shall have ""L. 1896, eh. 908, sec. 182, printed in the appendix. ""L. 1880, ch. 542, see. 3, and s6c. 11, as amended. "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. "'People ex rel. Metropolitan Securities Co. v. Kelsey, 101 App. Div. 248; 8. c, 91 N. Y. Supp. 711. ""People ex rel. Jewelers Circular Pub. Co. v. Roberts, 155 N. Y. 1. "People ex rel. Brooklyn Rapid Transit Co. v. Morgan, 57 App. Div. 335; s. c, 68 N. Y. Supp. 21, modified and affirmed on opinion below, 168 N. Y. 672. "L. 1896, ch. 908, sec. 190, printed in the appendix. 'Teople ex rel. Metropolitan Securities Co. v. Kelsey, 101 App. Div. 248; 8. c., 91 N. Y. Supp. 711. "'People ex rel. Wiebusch & Hilger Co. Ltd. v. Roberts, 154 N. Y. 101. 8 114 Conditions of Doing Business. more than one kind of capital stock, and upon one of such kinds of stock a dividend or dividends amounting to six, or more than six per centum, upon the par value thereof, has been made or declared, and upon the other no dividend has been made or declared, or the dividend or dividends made or declared thereon, amount to less than six per centum upon the par value thereof, then, the tax shall be at the rate of one-quarter of a mill for each one per centum of divi- dends made or declared upon the capital stock upon the par value of which the dividend or dividends made or declared amount to six or more than six per centum, and in addition thereto a tax shall be charged at the rate of one and one-half mills upon every dollar of the valuation made in accordance with the provisions of the Tax Lavsf of the capital stock upon which no dividend was made or de- clared, or upon the par value of which the dividend or dividends made or declared did not amount to six per centum.^* There was inserted in the statute in 1901 a proviso respecting the rate of the tax in the case of street surface railroads and elevated railroads in cities. § 69. Capital 'defined — Capital stock employed within this state, the value of which is the principal sum on which to compute the tax, means the property of the corporation contributed by its stockhold- ers or otherwise obtained by it to the extent authorized in its charter. It does not include surplus- or franchise. It is not the share stock valued at so much a share in the market and represent- ing capital, surplus and franchise. ^^ The Appellate Division of the Supreme Court has held recently that where the corporation declares no dividend the comptroller may include surplus in ap- praising capital.^^ In construing section 182 of the Tax Law, the authorized issue of the share stock of a corporation needs to be considered only as "L. 1896, ch. 908, sec. 182, printed in the appendix. "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433; People ex rel. John A. Roebling's Sons Co. v. Wemple, 138 N. Y. 582; People ex rel. Seth Thomas Clock Co. v. Wemple, 133 N. Y. 323. "People ex rel. Metropolitan Securities Co. v. Kelsey, 101 App. Div. 248; s. .c, 91 N. Y. Supp. 711. Feanchise Tax. 115 fixing the limit beyond which a corporate franchise cannot be taxed in a case where all of the corporate capital is employed within this state.?'' Section 190 of the Tax Law provide& that in case no divi- dend has been declared or in case the dividends amount to less than six per centum, the corporation must furnish an appraisal of the capital at its actual value in cash, not less than the average price at which the stock sold during the year.^^ This has been construed to mean that in such case the comptroller must value the capital at its actual value, not less however than the value of the share stock. ^* It does not make the share stock the basis for the tax, but such basis remains the capital contributed by the stockholders or otherwise obtained by the corporation to the extent authorized in its charter. It simply places a minimum value on the capital by which the comp- troller is bound in such a case.'" The original statute of 1880 in terms required the corporation to furnish such appraisal in a case where the dividends declared amounted to less than six per centum as well as in a case where no dividend was declared. The language of section 190 is not specific but it has been construed to require the furnishing of the appraisal, as the former statute did, in either cage." It follows that the valuation of the capital of the corpora- tion on which to compute the tax must not be more than the amount authorized in its charter as its total capital, although it employs a much larger amount in this state, as the excess must represent sur- plus or other property not capital.''^ This rule does not seem to apply to a case where the property composing the capital has re- mained unchanged in form and has increased in value. "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y: 433. °'h. 1896, ch. 908, sec. 190, printed in the appendix. •"People ex rel. Brooklyn Elevated R. E. Co. v. Roberts, 90 Hun, 637; s. c, 36 N. Y. Supp. 34. "People ex rel. Colonial T'fust Co. v. Morgan, 47 App. Div. 126; s. c, 62 N. Y. Supp. 191, affirmed on opinion below, 162 N. Y. 654. "People ex rel. New York & East River Ferry Co. v. Roberts, 168 N. Y. 14. "People ex rel. Railway Advertising Co. v. Roberts, 4 App. Div. 288; s. c, 39 N. Y. Supp. 448, affirmed on opinion below, 151 N. Y. 621; People ex rel. International Contracting Co. v. Roberts, 27 App. Div. 400_; s. c., 50 N. Y. Supp. 302, affirmed on opinion below, 158 N. Y. 666; People ex rel. Commer- cial Cable Co. v. Morgan, 178 N. Y. 433. 116 Condition's of Doing Business. It follows likewise that property purchased with surplus is not capital and cannot be considered in valuing capital to obtain a prin- cipal sum on which to compute the tax. Bonds of the United States and bonds and stocks of other corporations, held here by a corporation doing business here, are capital employed here if they were purchased by it with capital as distinguished from surplus.™ The earnings of a mine properly applicable to dividends but not de- voted thereto are surplus, although the mine by reason of such earn- ings becomes exhausted, thus decreasing the capital.^^ Profits or surplus earnings of a foreign manufacturing corporation invested in real property in this state are not capital employed here.'^ It has been held recently by the Appellate Division of the Supremo Court that where the corporation declares no dividend the comp- troller may include surplus in appraising capital.'^ The court will not presume that property wasi bought with surplus in the absence of proof.'' It is doing business in this state for a foreitcn corporation to be- come a special partner in a special partnership formed under the New York partnership statute and the amount contributed as spe- cial capital is the amount of capital employed in this state the basis of the franchise tax.'' A foreign, manufacturing corporation has no capital in this state, the value of which shall be the principal sum on which to compute the tax, because it has here the lease of an office here and office fur- niture of small value, or because it keeps at such office samples of no value as merchandise and of trifling value as old rags and dis- tributes such ^samples through a selling agent at such office to its traveling salesmen, or because it pays such salesmen and other em- ployes at such office by monthly remittances from its home office, which are kept in a New York bank account under the name of suob "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. "People ex rel. United Verde Copper Co. v. Roberts, ISS N. Y. 585. "People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46. "People ex rel. Metropolitan Securities Co. v. Kelsey, 101 App. Div. 248; 8. c, 91 N. Y. Supp. 711. "People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. "People ex rel. Badische A. & S. Fabrik v. Roberts, 152 N. Y. 59. Franchise Tax. 117 selling agent as agent, or because there remains a balance in such account never in excess of its debts in this state, no goods being kept for sale in this state and all orders being sent to the home office for approval and to be filled from there by shipment to the purchasers direct, although occasionally some goods returned by purchasers are kept for a short time at the office here for re-sale or return to the home office, inasmuch as sales even if made here are not capital, nor is a lease, and inasmuch as the office furniture and samples are of trifling value, and inasmuch as its debts here always exceed its bank balance here, and inasmuch as capital to be employed here, whether money or goods, must be kept on hand here for use in the general business of the corporation and remittances to pay debts for services rendered or materials furnished are not so kept on hand.'' An office and the office furniture of a manufacturing cor- poration are incidents to manufacturing, and are not capital em- ployed in the state to be the basis of franchise tax.*" § 70. Employed in this state. — Under the original statute of 1880 the whole capital stock wherever employed was the basis for the tax.^' Under the present statute the principal sum on which to compute the tax is the actual value of the capital stock actually em- ployed in this state during the preceding year.'^ Capital of a do- mestic surety corporation deposited in other states as a statutory pre-requisite to entitle it to do business there, or capital invested in real estate in such other states for use by the corporation in its business there, is not capital employed in this state, although such properties are subject tO' the claims of all creditors of the corpora- tion, and although the income therefrom is received and used in this "People ex rel. Washington Mills Co. v. Roberts, 8 App. Div. 201; s. c, 40 N. Y. Supp. 417, affirmed on opinion below, 151 N. Y. 619. '"People ex rel. Standard Wood Co. v. Roberts, 20 App. Div. 514; s. c., 47 N. Y. Supp. 122; People ex rel. Harlan & HoUingsworth Co. v. Campbell, 139 N. Y. 68. "People V. Horn Silver Mining Co., 105 N. Y. 76, affirmed 143 U. S. 305. ''People ex rel. Brooklyn R. T. Co. v. Morgan, 57 App. Div. 335; s. c, 68 N. Y. Supp. 21, modified as to amount of tax and affirmed on opinion below,- 168 N. Y. 672. 118 Conditions of I>oing Business. state. ^^ Cash of a domestic corporation on deposit here may be capital employed here, although all the business of the corporation is done out of this state.^' Stock in trade of a domestic corporation purchased with capital, sent out of this state, is employed in this state, unless it appears that it is not to be returned into this state.*' A foreign newspaper corporation, taking advertising ordfers in this state, printing them in its home state on one side of a newspaper, selling such one sides to jSTiew York and other newspapers, the re" mp'ning sides to be printed at pleasure by the purchasers, has no capital employed in this state, although it rents an office here and has office furniture here and a bank account drawn on from its home office.*^ A foreign corporation, by taking orders and making con- tracts for another foreign corporation solely in foreign countries, such orders and the monies due thereon being sent direct from the foreign countries to the other foreign corporation at its home office, has its capital including its good will employed in the foreign countries and not in this state, although it has a headquarters here where it gives directions and receives orders." A foreign corpora- tion, loaning its capital on bond and mortgage on lands in Iowa, Missouri and Texas, and. bringing such securities into this state for sale, selling them here, depositing the proceeds in banks here to be sent subsequently to the home office for lending again on mortgages, has capital employed in this state ; and in determining the amount so employed, the average amount of securities held here, the bank account, the rentals, and the salaries, less what may be deemed in- ■^People ex lel. American Surety Co. of N. Y. v. Campbell, 74 Hun, 101; 8. c, 26 N. Y. Supp. 462, affirmed on opinion below, 143 N. Y. 625. "People ex rel. American Contracting & Dredging Co. v. Wemple, 129 N. y. 558; People ex rel. Davis-Colby Ore-Roaster Co. v. Campbell, 66 Hun, 146; =. c, 21 N. Y. Supp. 7. "'People ex rel. S. Cohn & Co. v. Miller, 94 App. Div. 564; s. c, 88 N. Y. Supp. 197, affirmed 180 N. Y. 16. ■"People ex rel. A. N. Kellogg Newspaper Co. v. Roberts, 30 App. Div. 150; s. c., 51 N. Y. Supp. 866. "People ex rel. Dutilh-Smith, McMillan & Co. v. Miller, 90 App. Div. 545; B. c, 85 N. Y. Supp. 849. Franchise Tax. 119 come, may be considered.*^ Where a foreign corporation has cap- ital employed out of this statje, bills receivable for goods sold from its place of business out of this state to non-residents of this state, such goods never coming into this state, are not employed vyithin this state, although the bills for the purchasers are niade out and ■entered in the books at the office of the corporation in this state.^' Capital invested by a corporation in municipal bonds or real property for the purposes of investment and not for the purposes of its charter business is not employed in this state so as to be included in the amount of capital upon which to compute the tax.'" Cap- ital invested by a realty corporation in unimproved real property in this state for the purposes of its charter business is not employed in this state.'^ If a realty corporation has charter power to carry on other business convenient to its principal purpose, its capital in- vested in improved real property is employed in this state. ^^ After a, corporation whose capital consists of real property ceases to do business in this state, its property having been condemned by a municipality for a public improvement, although the award has not been paid to it, it has no capital employed here.^^ A foreign corporation, having all its capital -invested in the stock of another foreign corporation doing business in its home state. Las no capital employed in this state, although such acquired stock is deposited in a trust company here as collateral to its own bonds "People ex rel. New England Loan & Trust Co. v. Roberts, 25 App. Div. 16; s. c, 49 N. Y. Supp. 10, affirmed on opinion below, 156 N. Y. 688. "People ex rel. Hans Eees' Sons v. Miller, 90 App. Div. 591; s. c, 86 N. Y. Supp. 193. "People ex rel. Niagara River Hydraulic Co. v. Roberts, 30 App. Div. 180; s. c., 51 N. Y. Supp. 771, affirmed on opinion below, 157 N. Y. 676; People ex rel. Union Ferry Co. of N. Y. & B. v. Roberts, 66 App. Div. 157; s. e., 72 N. Y. Supp. 950; People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46; People ex rel. United Verde Copper Co. v. Roberts, 156 N. Y. 585. "People ex rel. Fort George Realty Co. v. Miller, 179 N. Y. 49. Three judges dissented from this decision on the ground that the sole business of the corporation was to acquire, hold and sell real property. "^People ex rel. Wall & Hanover St. Realty Co. v. Miller, 181 N. Y. 328, -three judges dissenting. "People ex rel. Jerome Park Villa Site & Imp. Co. v. Roberts, 41 App. Div. 21; s. c, 58 N. Y. Supp. 254. 120 Conditions of Doing Business, and although it has an ofEce in this state and although it receives dividends from the other corporation here and pays out its own dividends here.^* It has been held, however, that a foreign invest- ment corporation whose business consists in purchasing, holding and selling stocks and bonds of other foreign corporations doing business outside of this state, having an office in this state with office furniture, clerks and oflBcer?, paying substantial sums for rent and salaries there, supervising if not actually doing all of its business there, having and employing in conducting such business there considerable amounts of money in bank accounts in this state as well as stocks, bonds and bills and accounts receivable, has such money, securities and furniture employed in this state so as to be included in the principal sum on which to compute the fran- chise tax, and also upon which to levy a license tax under seciion 181 of the Tax Law already mentioned.'^ The testimony was that there was no surplus and that the corporation had earned no divi- dends, the inference being that all of such items were capital.^^ The rolling stock of a domestic railroad corporation, transport- ing freight from points within to points without this state and from points without to points within this state over its tracks within this state and the tracks of connecting lines without this state, is employed in this state. If a domestic corporation acquires with its capital the stock of another domestic corporation doing business within and without this state it employs such stock within and without this state to the extent that the second corporation so employs it. Capital stock of a foreign railroad corporation whose line is without this state, purchased by a domestic railroad corpo- ration with its bonds, is capital of the domestic corporation not employed in this state, although such stock is deposited in a trust company here as collateral to such bonds.'^ Vessels of a trans- portation corporation employed in transporting freight from a point ■"People ex rel. Chicago Junction Railways & U. f. Co. v. Roberts, 1.54 N.. Y. 1, three judges dissenting. '"'See sees. 18, 21, supra. "°People ex rel. Korth American Co. v. Miller, 90 App. Div. 500; s. c., 86 N. Y. Supp. 386, aflBrmed without opinion, 182 N. Y. "People ex rel. New York Central & H. R. R. R. Co. v. Knight, 173 N. Y,. 255. Franchise Tax. 121 in the boundary of this state to points in other states are not em- ployed in this state. ^* So far as a domestic corporation whose capital con- sists of patents receives stock of foreign corporations for the use of such patents it employs capital out of this state;'" so- far as it receives stock of domestic corporations for the use of such patents it employs capital in this state; and so far a^ it receives bonds of foreign corporations for the use of such patents it employs capital in this state as bonds have their situs at the residence of the owner."" If a domestic corporation purchases all the stock of another corporation and also all its assets, the stock is not merged in the ownership of the assets, but retains its value as a basis for the tax, unless the other corporation is dissolved."^ § 71. Assessing franchise tax.— The comptroller may assess a franchise tax after the fifteenth day of January, although by section 194 of the Tax Law it is due and payable on or before that date."^ The determination of the comptroller as to taxability one year is not conclusive on his successor in office as to taxability of the same corporation in other years."^ The corporation should pay the tax only for such part of its first year as it does business here."* Where a corporation has capital employed in this state for a part of the year only, the amount so employed should be apportioned through- out the year, that is, if it is employed for five months, five-twelfths of the amount employed is the basis for the tax."^ •'People ex rel. Lackawanna Trans. Co. v. Knight, 75 App. Div. 164; s. c, 77 N. Y. Supp. 398. ""People ex rel. Edison Electric Light Co. v. Wemple, 148 N. Y. 690. ""People ex rel. Edison Electric Light Co. v. Campbell, 138 N. Y. 543; People V. Campbell, 88 Hun, 544; s. c, 34 N. Y. Supp. 801. "'People ex rel. Commercial Cable .Co. v. Morgan, 178 N. Y. 433. ""People ex rel. Frederick A. Stokes Co. v. Roberts, 90 Hun, 533; s. c, 36 N. Y. Supp. 73. '^People ex rel. New England Dressed Meat & Wool Co. v. Roberts, 155 JSr. Y. 408. "'People ex rel. Fruin Bambrick Paving Co. v. Knight, 99 App. Div. 62; s. c, 90 N. Y. Supp. 537. ""People ex rel. Hans Rees' Sons v. Miller, 90 App. Div. 591; s. c, 86 N. Y. Supp. 193; People ex rel. S. Cohn & Co. v. Miller, 94 App. Div. 564; s. c, 88 N. Y. Supp. 197, afBrmed 180 N. Y. 16. 122 Conditions of Doing Business. It was held formerly that the six years' statute of limitations ran against a franchise tax from the accruing of liability on the fifteenth of January in each year, notwithstand- statuteof . ^j^g additional remedy of collection by war- limitations. ° , , , , , , i ' J! T V rant, and that the two years' statute of limita- tions applied to an action for penalties for non-payment of the tax, and that on an application to the comptroller to revise, he should strike out all taxes and penalties to recover which an action was barred by limitation."'' But in 1899 the Tax Law was amended by adding thereto section 282 which provides that the provisions of the Code of Civil Procedure relative to the limitation of time of enforcing a civil remedy shall not apply to any pro- ceeding or action taken to levy, apprai-c, assess, determine or enforce the collection of any tax or penalty prescribed by articles nine and ten of the Tax Law, which articles include the franchise tax provisions.^"' As above stated a manufacturing corporation having at least forty per centum of its capital stock invested in property in this state and used by it in its manufacturing busi- ur en ^^^^ j^ ^-^^^ State is exempt from franchise tax to of proof. . ^ . the extent only of its capital actually employed in this state in manufacturing and in the sale of the product of such manufacturing.^"* In order to claim such exemp- tion, it is incumbent on the corporation to show what portion ,of its capital is employed in manufacturing."' Where a foreign corporation manufactures vending machines > for the sale of merchandise under various patents for which it issued its capital stock, the comptroller is not *" ^ bound by the statement of the corporation that of report. •' _ _ _ ^ _ SO much of its capital is employed in and so much is employed out of this state, but may fix the amount ""People ex rel. New York Loan & Imp. Co. v. Roberts, 157 N. Y. 70. '°'L. 1896, ch. 908, sec. 282, added by L. 1899, ch. 737, printed in the appendix. ""See sec. 63, swpra. ^"People ex rel. Fruin Bambrick Paving Co. v. Knight, 99 App. Div. 62; 8. c, 90 N. Y. Supp. 537. Franchise Tax. 123 employed in the state at a larger amount based on the fact that the corporation paid large dividends showing that the patents were worth the value for which they were taken in return for the stock issued for them.^^" As stated above, the comptroller in case he is not satisfied with the valuation of the capital stock, upon which no dividend hasi been declared or upon which the dividends amounted to less than six per centum, made and returned to him by the treasurer or secretary, maym.ake a valuation thereof and settle an account upon the valuation so made by him and ( ? for) the taxes, penalties and^ interest to be paid the state ; and also, ■ as above stated, in case any report shall be unsatisfactory to him or is not made, he may make an estimate of the dividends paid and the value of the capi- tal stock employed from any such report or from any other data, and order and state an account according to the estimate and value so mnde by him for taxes, percentage and interest due the state. The latter provision is a revision of a similar one in section 11 of the former statute of 1880, added thereto in 1882 and amended in 1S85. Under such former section 11, it was held that where a foreign corporation reports to the comptroller that its capital employed here is a certain sum all paid into its treasury, biat that under an estimate of its oiEcers its actual value is one-foiirth of that sum, the comptroller may disregard the estimate of the officers and appraise the . capital so employed at the full sum, especially if the corporation has reported its real property here, presumably purchased with its capital, of a value in excess of such one-fpurth valuation of its capital so employed here, and has made no explanation of the alleged shrinkage in value of its capital in the short time elapsed since it was paid in.^" ""People ex rff Automatic Vending Machine Co. v. Kelsey, 101 App. Div. 325; s. c, 91 N. Y. Supp. 955, affirmed without opinion, 181 N. Y. 512. "'People ex rel. American Axe & Tool Co. v. Roberts, 82 Hun, 313; s. c, 31 N. Y. Supp. 245, affirmed without opinion, 147 N. Y. 699. L. 1896, oh. 908, sec. 192, printed in the appendix. L. 1880, eh. 542, sec. 11, added by L. 1882, ch. 151, and amended by L. 1885, eh. 501, and by L. 1894, eh. 562. 124 Conditions or Doing Business. The present value of the capital stock employed in this state and not its future value is to be determined."^ As the tax is on the franchise and not on the property the comptroller, value con- ™ determining the value of the capital employed in trois. Various this State, may include capital so employed here, al- assessable though it is employed also in interstate or foreign commerce."' He ihay include capital invested in copyrights, patents,"* trade marks,"^ United States bonds,"^ or merchandise imported in original packages."' lie may consider the value of the stock in trade, other personal property, the aver- age Jjank balance and the gross amount paid for salaries, wages, labor and rent."* He should include the good will of the business of a foreign corporation doing all of its business in this state,"* and the good will of the business of a domestic corporation in- cluding its right to conduct its business under its franchise.'^" He may adopt the estimate of the corporation as to the value of the good will.'"' "''People ex rel. Staten Island R. T. R. R. Co. v. Roberts, 4 App. Div. 334; s. c, 38 N. Y. Supp. 724. '"People ex rel. American Soda Fountain Co. v. Roberts, 158 N. Y. 168; People ex rel. William J. Matheson & Co. v. Roberts, 158 N. Y. 162; People ex rel. Postal Tel. Cable Co. v. Campbell, 70 Hun, 507 ; s. c., 24 N. Y. Supp. 208. '"People e.x rel. United States Aluminium Printing Plate Co. v. Knight, 174 N. Y. 475, overruling People ex rel. A. J. Johnson Co. v. Roberts, 159 N. Y. 70. "'People ex rel. Spencerian Pen Co. v. Kelsey, 105 App. Div. 132; s. c, 93 N. Y. Supp. 971. ""People V. Home Ins. Co., 134 U. S. 594. "'People ex rel. William J. Matheson & Co. v. Roberts, 158 N. Y. 162; People ex rel. Parke, Davis & Co. v. Roberts, 171 U. S. 658. "'People ex rel. Postal Tel. Cable Co. v. Campbell, supra; People ex rel. John A. Roebling's Sons Co. v. Wemple, 138 N. Y. 582. "'People ex rel. Journeay &, Burnham Co. v. Roberts, 37 App. Div. 1; a. c, 55 N. Y. Supp. 317 ; People ex rel. A. J. Johnson Co. v. Roberts, 159 N. Y. 70, overruled on another point, 174 N. Y. 475. '^"People ex rel. Wiebuseh & Hilger Co. Ltd. v. Roberts, 154 N. Y. 101. '=' People ex rel. Victor Koechl & Co. v. Morgan, 96 App. Div. 110; o. c, 88 N. Y. Supp. 1066. J^'ranchise Ta:s;. 125 Debts should be deducted.^^^ From .the value of all the assets of a foreign corporation deduct the liabilities and then add the good will and such proportion of the sum so found Debts. as is employed in this state is the basis for the tax. In the case of a domestic corporation having capital employed in and out of this state, the debts to be de- ducted are such proportion of the debts as the assets ■within this state bear to the total assets. In assessing the capital of a foreign corporation for general taxation it has been held that the local assessors should not deduct the general debtj as it is pre- sumed that such debts are deducted from its assets in its home state in assessing it for taxation there, unless such debts were in- curred in acquiring the assets in this state the subject of the tax.^^* This rule does not apply to the franchise tax."' A corporation by submitting a report that its capital is all paid in, is estopped from claiming that its preferred stock is a debt to be deducted because of its promise to repay contributions thereto.-'^^ The comptroller is not bound to deduct real property, although it is assessed also for general taxation by the local assessors.''^' If Real he does deduct the real property, he is not bound in property. doing SO by the assessed valuation made by the local assessors. -"^^ * It has been said that the amount of the tax is dependent upon the business prosperity of the corporation, as' evidenced by its capacity to declare dividends, instead of upon the Prosperity. value of the corporate property. So it has been held that a domestic railroad corporation with a small capital stock, all paid in, upon which no dividends ^People ex rel. Journeay & Burnham Co. v. Roberts, supra; People ex rel. Wiebusch & Hilger Co. Ltd. v. Roberts, supra. ^People ex rel. Hans Kees' Sons v. Miller, 90 App. Div. 591; s. c, 86 N. Y. Supp. 193. ""See sec. 43, supra. •^"People ex rel. A. G. Hyde & Sons v. Miller, 90 App. Div. 599; s. c, 85 N". Y. Supp. 522. ^People ex rel. S. Cohn & Co. v. Miller, 180 N. Y. 16. '^'People ex rel. Postal Tel. Cable Co. v. Campbell, 70 Hun, 507; s. c, 24 N. Y. Supp. 208. ^People ex rel. John A. Roebling's Sons Co. v. Wemple, 138 N. Y. 582. 126 Conditions of Doing Business. have been declared, and a large bonded indebtedness upon whick no interest has been paid, should not be assessed at the full par value of the stock, but at a much smaller amount at which the shares sold during the year, highest and lowest sales, although it had earned a considerable sum which was applied on unpaid interest on floating debt, and although its franchise was valuable for the future.^' If a domestic corporation four months before has is- sued stock for a certain sum and received cash therefor, and there are no debts, it is proper to assess its capital Sums at such sum.^^" In appraising the capital of an received apartment house corporation in which each share for stock ^ . . , . , J- i i ii. issued. Carries with it a lease of an apartment, the comptroller may estimate the capital at the original sum paid in and invested in such apartment house, and it is for the corporation to show that such capital has been impaired, and it is not conclusive that such impairment has occurred because the stock is not salable, if a fair value of rent for such apartments would show a balance of income over expenses."^ If it appears by undisputed evidence that the comptroller has included as capital property purchased with surplus, his account should be readjusted by deducting the same."^ It Surplus. has been held by the 'Appellate Division of the Su- preme Court recently that where no dividend has been declared the comptroller may include surplus in appraising capital."' The comptroller cannot reject the uncontradicted evidence of a competent witncs? on the question of value in appraising the assets '"•People ex rel. Statfen Island R. T. R. R. Co. v. Roberts, 4 App. Div. 334; a. L-., 38 X. Y. Supp. 724. ""People ex rel. S. Cohn & Co. v. Miller, 94 App. Div. 564; s. c, 88 N. Y. Supp. 197, affirmed 180 N. Y. 16. "'People ex rel. Gramercy Co. v. Roberts, 91 Hun, 146; s. c, 36 N. Y. Supp. 277, affirmed on opinion below, 158 N. Y. 709. ""People ex rel. United Verde Copper Co. v. Roberts, 156 N. Y. 585. "'People ex rel. Metropolitan Securities Co. v. Kelsey, 101 App. Div. 248; B. c, 91 N. Y. Supp. 711. Evidence of value. Feai^chise Tax. 127 of a foreign corporation doing all of its business in this state."* If practically all of the capital stock of a land corporation is issued for an equity in land at a large valuation, its capital employed in the state is that equity at its actual value, less debts, and if the only evidence before the comptroller on the value of the land is its cost and its appraised value for general taxation, he may rot disregard such evidence and value it at the value at which it was turned into the corporation.^^^ § 72. Notification of tax. Revision by comptroller. — Upon auditing and stating every account for taxes or other charges the comptroller forthwith shall send notice thereof in writing to the corporation, which notice may be mailed to its post-office address."' The comptroller may upon application at any time within one year from the time any such account shall have been audited and stated and notice thereof sent to the corporation revise and readjust the same, and if it shall be made to appear that it includes taxes or other charges which could not have been lawfully demanded or that its payment has been legally ( ? illegally) made or executed, he shall resettle the same according to the law and the facts and charge or credit, as the case may require, the difference resulting from such revision or re-settlement. Such difference may be credited to the corporation or assigned by it and credited to any person or corporation liable for organization tax, license tax or franchise tax. • The comptroller forthwith shall send written notice of his determination to the applicant for the revision.-'^' This provision is a revision of section 19 of the former franchise tax law, added in 1889, which was held to give the comptroller authority to decrease but not to increase a tax levied on a foreign corporation, as the statute limited him to a case where the account ^People ex rel. Journeay & Burnham Co. v. Roberts, 37 App. Div. 1; s. t., 55 N. Y. Supp. 317. ""People ex lel. Lorena Co. v. Morgan, 55 App. Div. 265; s. c, 66 N. Y. Supp. 823. "°L. 1896, ch. 908, sec. 193, printed in the appendix. ""Id. sec. 195, printed in the appendix. 128 Conditions of Doing Business. included taxes which could not have been lawfully demanded or where its payment had been illegally made or exacted.^^^ Former section 19 ga%'e the comptroller jurisdiction of a case where the only objection was that the corporation taxed was exempt, and he could revise the account, although the taxes had been paid."' It did not authorize the comptroller to revise his decision refusing to resettle an account on application, and if the corporation failed to obtain a certiorari within thirty days after notice, it could not entitle itself to a certiorari by making a second application to the comptroller to revise his decision refusing the first application; and even if he had such power a certiorari will not lie to review his refusal on such second application."" Such rulings under for- mer section 19 are applicable to the present statute. The present statute does not authorize the comptroller of his own motion to correct an error of himself or his predecessor in respect to a license tax under section 181 of the Tax Law, adjusted and paid more than a year prior. "^ On an application for a rehearing be- fore the comptroller, the burden is on the corporation to show that " the appraisal of the comptroller is erroneous, to show which the corporation should make an inventory of all its real and personal property and money in this state and offer proof that it owned none other than that in the inventory."^ § 73. Certiorari. — The determination of the comptroller upon any application made to him by any corporation for a revision and resettlement of any account may be reviewed both upon the "'People ex rel. Syracuse Imp. Co. v. Morgan, 59 App. Div. 302; s. l., 69 N. Y. Supp. 263; People ex rel. Eppens, Smith & Wiemann Co. v. Roberts, 51 App. Div. 152; s. c., 64 N. Y. Supp. 627; L. 1880, ch. 542, sec. 19, added by L. 1889, ch. 463. The act of 1889 referred to an account illegally paid while the present section refers to a payment legally made. The verbal change seems to have been unintentional. ""People ex rel. Edison Electric Illuminating Co. v. Wemple, 141 N. Y. 471. ""People ex rel. American Surety Co. v. Campbell, 64 Hun, 417; s. c, 19 N. Y. Supp. 652. '"See sec. 21, supra. '"People ex rel. American Axe & Tool Co. v. Roberts, 82 Hun, 313; s. c, 31 N. Y. Supp. 245, affirmed without opinion, 147 N. Y. 599; People ex rel. Postal Tel. Cable Co. v. Campbell, 70 Hu», 507 ; s. c, 24 N. Y. Supp. 208. Franchise Tax. 129 law and the facts upon certiorari by the Supreme Court at the instance of any corporation affected thereby and in the name and on behalf of the people of the state."' The provisions of the Tax Law regulating certiorari to review assessments for general tax do not apply. The writ can be issued only out of the Supreme Court. The application therefor must be founded upon an affidavit or a verified petition, which may be accompanied by other written proof, and must show a proper ease for the issuing of the writ. It can be granted only at a term of the Appellate Division of the Supreme Court or at Special Term."* The granting or refusal of the writ is discretionary with the court, and such was the rule at common law."' Such discretion is not arbitrary, and it must be assumed that the writ will always issue where there is a proper subject for review."* Notice of the application for the writ, with copies of the papers upon which the application is to be made, must be served upon the comptroller,"' within thirty days after the service of the notice of his determination, and at least eight days before the day of the application. The full amount of the taxes, percentage, interest and other charges audited and stated in the account, must be deposited with the state treasurer before making the application, and an undertaking filed with the comp- troller, in such amount and with such sureties as a justice of the Supreme Court shall approve, to the effect that if the writ is dis- missed, or the determination of the comptroller aflSrmed, the appli- cant for the writ will pay all costs and charges which may accrue against it, in, the prosecution of the writ, including costs of all appeals."* The comptroller may produce affidavits or other written proofs upon the merits in opposition to the application. The writ must be directed to the comptroller and must be served on him in ^"L. 1896, ch. 908, sec. 196, printed in the appendix. '" Code Civil Pro. sees. 2123 to 2127, printed in the appendix. '*id. sec. 2127, printed in the appendix. People ex rel. Commercial Mutual lbs. Co. V. Tax Commissioners, 144 N. Y. 483; Matter of Corwifl, 135 N. Y. 245. "'United Lines Tel. Co. v. Grant; 137 N. Y. 7. "'Code Civil Pro. sec. 212S, printed in the appendix. "*!.. 1896, eh. 908, sec. 197, printed in the »f)pefidix!. 9 130 Conditions of Doing Business. the same manner as a summons in an action in the Supreme Court. It must be made returnable within twenty days after the service thereof at the office of the clerk of the county of Albany. The time to make a return thereto may be enlarged, or any other order may be made or proceeding taken in the cause, in relation to any matter not otherwise provided for, as similar proceeding may be taken in an action brought in the Supreme Court and triable in the county of Albany. The clerk of the county of Albany and the comptroller must make and annex to the writ or to the copy thereof served a return with a transcript annexed and certified of the record or proceedings and a statement of the other matter specified in and required by the writ."' The comptroller shall return the accounts and all the evidence before him on the application made to him for revision, and all the papers and proofs upon the original statement of the account and all proceedings thereon.^'" If the writ commands the comptroller to return more, for example the grounds for his refusal to revise and re-adjust the tax as requested, he may move to have the excess stricken out. If the notice of application for the writ served on him states that it shall include such excess, and he makes default on the return day, his motion to strike out will not be granted until he excuses his default. '^^ The return must be filed in the office of the clerk of the county of Albany. If it is defective the court may require a further return. An omission to make a return, as required by the writ or by an order for a further return, may be punished as a contempt of court. A writ may be issued to and a return may be made by the comptroller after his term of office has expired. The cause must be heard at a term of the Appellate Division held within the third judicial department. Either party may notice it for hearing at any time after the return is complete. It must be heard upon the writ and return. Where the comptroller dies, absconds, removes from the state, or becomes insane, after the writ is issued, and ""Code Civil Pro. sees. 2128 to 2134, printed in the appendix. "»L. 1896, -ch. 908, sec. 196, printed in the appendix. "'People ex rel. New York Realty Corp. v. Miller, 92 App. Div. 116; s. c, 87 N. Y. Supp. 341. Franchise Tax. 131 ■before making the return, or after making an insufficient return, the court may permit affidavits or other written proofs to be pro- duced. '^^ § 14:. Hearing at Appellate Division. Appeal to Court of Ap- peals — It is provided in the Code of Civil Procedure that the questions, involving the merits, to be determined by the court, upon the hearing of a writ of certiorari, are: Whether the comp- troller had jurisdiction of the subject matter; vt^hether the author- ity conferred on him has been pursued in the mode required by law ; whether any rule of law affecting the rights of the parties has been violated to the prejudice of the relator; whether there was any competent proof of all the facts necessary to be proved in order to authorize the making of the determination ; and if ther& was such proof, whether there was, upon all the evidence, such a preponderance of proof, against the existence of any of those facts, that the verdict of a jury, affirming the existence thereof, rendered in an action in the Supreme Court, triable by a jury, would be set aside by the court as against the weight of evidence."* Under this provision, the writ brings up both record and proceed- ings for examination, not only as to jurisdiction and method of procedure, but also to see whether there was a violation of any rule of law, or any competent proof of all the essential facts, or a preponderance of proof against the existence of any of those facts."^ It extends to the review of all questions of jurisdiction, power and authority of the comptroller to do the acts complained of, and all questions of regularity in the proceedings, that is, all questions whether the comptroller has kept within the boundariea prescribed for him by the express terms of the statute law or by well-settled principles of the common law."^ Where the comp- troller has neither exceeded his powers nor been irregular in exer- cising them, the court will still, upon the facts appearing in the "'Code Civil Pro. sees. 2134 to 2139, printed in the appendix. '"Code Civil Pro. sec. 2140, printed in the appendix. '"People ex rel. Manhattan Ey. Co. v. Barker, 152 N. Y. 417. • '"People ex rel. Citizens Gas Light Co. of B. v. Board of Assessors, 39 N. Y. 81. 132 CONDITIOBTS OF DoiNG BUSINESS. return; examine and correct his decision if erroneous.'^^' The Tax Law provides further that the determination of the comptroller may be reviewed both upon the law and the facts, and that the comptroller shall return the account and all the evidence, and that if the original or re-settled accounts shall be found erroneous or illegal, either in point of law or of fact, they shall be corrected and re-stated."'' This contemplates that the whole case on which the comptroller acted shall appear by the return, so that the court may determine whether in any respect the action of the comp- troller was erroneous or illegal, and if so may itself make the proper determination.^'* The return is conclusive as to the facts stated therein, except that the court may inquire whether there was any evidence to sup- port a fact, or a preponderance of evidence against its existence. If the return is false in fact or insuflBcient in form, in the former case the remedy is by action for a false return, and in the latter by compelling a further and more specific return."' Unless the corporation moves for a further return, the presumption is con- clusive that it states the whole truth in respect to the matters specified in and required by the writ."" If the petition for review states that the corporation is generating and furnishing electricity for lighting, heating and power, and the return does not deny it, the determination of the comptroller that the corporation is not engaged in manufacturing will be reversed.^^^ But if the return denies such allegation, and states that the corporation is not gen- erating and furnishing electricity, it is conclusive as to that fact, there being no question of the existence of some evidence to sup- port such fact, or of a preponderance of evidence against its ex- '"People ex rel. Westbrook v. Board of Trustees, 48 N. Y. 390. "Tj. 1896, ch. 908, sec. 196, printed in the appendix. '"People ex rel. Staten Island Rapid Transit R. R. Oo. v. Roberta, 4 Appu Div. 334; s. c., 38 N. Y. Supp. 724. ""People ex rel. Sims v. Fire Commissioners, 73 N. Y. 437; People ex rel. Updike V. Gilon, 9 N. Y. Supp. 243. '"People ex rel. Gage v. Lohnas, 54 Hun, 604; s. c., 8 N. Y. Supp. 104. '"People ex rel. Edison Electric Light Co. v. Campbell, 88 Hun, 527; s. c, 34 N. Y. 711. Franchise Tax. 133 istence."^ The determination of tlie comptroller on the question of valuation and fixing the amount of the tax will not be dis- turbed unless clearly shown to be erroneous."^ The comptroller is obliged to appraise the capital stock at a sum not less than the average price at which said stock sold during the year. So the corporation cannot complain of his valuation, if it is made at such price."* If the original or re-settled accounts shall be found erroneous or illegal, either in point of law or of fact, by the Appellate Division, the accounts reviewed shall then be corrected and re-stated."^ The Appellate Division may make a final order, annulling or confirming, wholly or partly, or modifying, the deter- mination reviewed. If it is annulled or modified, the court may order and enforce restitution. Costs, not exceeding fifty dollars and disbursements, may be awarded in favor of or against either party, in the discretion of the court. The final order must be entered in the office of the clerk of the county of Albany. Before it can be enforced, an enrollment thereof must be filed. For that purpose, the clerk must attach together, and file in his office, the papers upon which the cause was heard, a certified copy of the final order, and a certified copy of each order, which in any way involves the merits, or necessarily affects' the final order. The filing of the enrollment in the office of the clerk is a sufficient authority for any proceeding, by or before the comptroller, which the final order directs or permits."^ "^People ex rel. Edison Electric Light Co. v. Campbell, 88 Hun, 530; s. c, 34 N. Y. Supp. 713, this point approved although case reversed on another ground, 148 N. Y. 759. ^"People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433; Pfeople ex rel. United Verde Copper Co. v. Roberts, 156 N. Y. 585; People ex rel. Western Electric Co. v. Campbell, 145 N. Y. 587; People ex rel. John A. Eoebling's Sons Co. v. Wemple, 138 N. Y. 582; People ex rel. American Con- tracting & Dredging Co. v. Wemple, 129 N. Y. 558; People ex rel. Staten Island K. T. R. R. Co. v. Roberts, 4 App. Div. 334; s. c, 38 N. Y. Supp. 724; People ex rel. Frederick A. Stokes Co. v. Roberts, 90 Hun, 533; s. c, 36 N. Y. Supp. 73; People ex rel. Postal Tel. Cable Co. v. Campbell, 70 Httn, 507 ; s. u., 24 N. Y. Supp. 208. ""People ex rel. BrooKlyn Elevated R. R. Co. v. Roberts, 90 Hun, 537; s. c, 36 N. Y. Supp. 34. ""L. 1896, ch. 908, sec. 196, printed in the appendix. ""Code Civil Pro., sees. 2141 to 2145, printed in the appendix. 134 Conditions of Doing Business. From any determination of the Supreme Court, upon any such review, an appeal to the Coiirt of Appeals may be taken by either party."' Where the execution of the final order is stayed by an appeal to the Court of Appeals, the proceedings below are stayed in like manner."* The jurisdiction of the Court of Appeals is limited by the constitution to the review of questions of law. The determination of the comptroller, based upon sufiicient evidence, has the effect of a judgment rendered by a court, and his return is conclusive on an appeal to the Cburt of Appeals,"' unless the facts upon which his conclusions are based were reversed by the Appellate Division."" § 75. When payable. Penalties. Interest. Lien. — A tax im- posed by section 182 shall be due and payable into the state treas- ury on or before the 15th day of January in each year. If such tax is not paid within thirty days after the same becomes due, or if the report of any such corporation is not made within the time required by the statute, the corporation shall pay into the state treasury, in addition to the amount of such tax, a sum equal to five per centum thereof, and one per centum additional for each month the tax remains unpaid, which sum shall be added to the tax and paid Or collected therewith. Every corporation failing to make the annual report required by the statute, or failing to make any special report required by the comptroller within any reason- able time to be specified by him, shall forfeit to the people of the state the sum of one hundred dollars for every such failure, and the additional sum of ten dollars for each day that such failure continues. Such tax shall be a lien upon and bind all the real and personal property of the corporation from the time when it is payable until the same is paid in full."^ All accounts audited and stated by the comptroller shall bear interest upon the total amount "'L. 1896, ch. 908, see. 196, printed in the appendix. ""Code Civil Pro., seq. 2145, printed in the appendix. "'People ex rel. John A. Roebling's Sons Co. v. Wemple, 138 N. Y. 582. ""People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. '"L. 1896, ch. 908, sec. 194, printed in the appendix. Feanchise Tax. 135 found due thereon, from the expiration of thirty days after send- ing notice thereof until payment shall be made."^ § 76. Warrant to collect tax. — After the expiration of thirty days from the sending by the comptroller of a notice of a state- ment of an account as above mentioned, unless the amount of such account shall have been paid, or deposited with the state treasurer, if an appeal or other proceedings have been taken to review the S'ame and the undertaking given as provided by the statute, the comptroller may issue a warrant under his hand and official seal, directed to the sheriff of any county of the state, commanding him to levy upon and sell the real and personal property of the cor- poration against which such' account is stated, found within his county, for the payment of the amount thereof with interest thereon and costs of executing the warrant, and to return such warrant to the comptroller and to pay to the 'stat© treasurer the money col- lected by virtue thereof, by a time to be therein specified, not less than sixty days from the date of the warrant. Such warrant shall be a lien upon and shall bind the real and personal property of the corporation against which it is issued, from the time an actual levy shall be made by virtue thereof. The sheriff to whom any such warrant shall be directed shall proceed upon the same in all respects, with like effect, and in the same manner, as prescribed by law in respect to executions issued against property upon judg- ments of a court of record, and shall be entitled to the same fees for his services in executing the warrant, to be collected in the same manner. § 77. Action to recover tax or to annul franchise. — An action may be brought by the attorney-general, at the instance of the comptroller, in the name of the state, to recover the amount of any account audited and stated by the comptroller. If any such ac- count shall remain unpaid at the expiration of one year after notice of the statement thereof has been sent as above required, and the comptroller is satisfied that the failure to pay the same ™Id., sec. 193, printed in the appendix. "™Id., sec. 198, printed in the appendix. 136 Conditions of Doing Business. is intentional, he shall so report to the attorney-general, who shall immediately bring an action, in the name of the people of the state, for the forfeiture of the franchise of any corporation failing to make such payment, and if it is found that such failure was intentional, judgment shall be rendered in such action for the forfeiture of its franchise and for its dissolution, and thereafter such franchise shall be annulled."* It is doubtful whether such an action could be brought against a foreign corporation to revoke its license to do business in this state, although the Code of Civil Procedure authorizes the attorney-general to maintain an action against a foreign corporation to restrain it from the commission or continuance of any act done by it in violation of any provision of law."^ § 78. Informer.— It shall be the duty of any person having knowledge of the evasion of taxation under section 182 of the Tax Lax by any corporation liable to such tax, for ( ? or) any omission on its part to make the report required by the statute, to make a written report thereof to the comptroller, with such information as may be in his possession as may lead to the recovery of any taxes due the state from it. If, in his opinion, the interests of the state require it, the comptroller may employ such person to assist in the collection and preparation of evidence and in the prosecu- tion and trial of actions for euch taxes, and so much of the same, not exceeding ten per centum thereof, as may be collected from any such delinquent corporation, by reason of such report and such services, as shall have been agreed upon between such person and the comptroller or attorney-general as a compensation therefor, shall be paid to such person, and nothing shall be paid to such person for such report or services unless there shall be a recovery of taxes by reason thereof."* § Y9. Exemption from other state tax. — The personal property of every corporation taxable for franchise tax shall be exempt from "*Id., sec. 200, printed in the appendix. "°Code Civil Pro., sees. 1948 and 1955, printed in the appendix. ™L. 1896, ch. 908, sec. 199, printed in the appendix. Feanchise Tax. 137 assessment and taxation upon its personal property for state pur- poses, if its franchise tax and, if it is a domestic corporation its organization tax, and, if it is a foreign corporation its license tax, have been paid by it. Such corporation shall in no other respect be relieved from assessment and taxation by reason of the pro- visions of the statute relating to such taxes."' It is exempt from general taxation by the local authorities for state purposes only, and is not exempt from general taxation by such local authorities for municipal and county purposes,"* or from special taxes im- posed by special statutes."' As the portion of the general tax levied by local authorities which is for state purposes has become nominal in amount and is about to be abolished, the exemption above mentioned is unimportant. "'L. 1896, ch. 908, sec. 202, as amended by L. 1902, eh. 172, printed in tlie appendix. "'People ex rel. Westchester Fire Ins. Co. v. Davenport, 91 N. Y. 574; Peopla ex rel. Eastern Trans. Line v. Commissioners of Taxes, 26 Hun, 446. ""People V. Fire Asso. of Phila., 92 N. Y. 311. 138 ' Conditions of Doing Business. , OHAPTEE VII. Miscellaneous Taxes. § 80. Highway tax. Village tax. School tax. — The highway tax is levied in towns ;^ the village tax in villages f .and the school tax in school districts in towns.^ These taxes are of little im- portance to foreign corporations as few have real property or prin- cipal offices in towns or villages and as the amounts are small. § 81. Organization tax on domestic corporations. — Every stock corporation incorporated under any law of this state shall pay to the state treasurer a tax of one-twentieth of one per centum upon the amount of capital stock which the corporationi i® authorized to have, and a like tax upon any subsequent increase.* It has been held by the Supreme Court of the United States that, if several railroad corporations of diiferent states consolidate into one corporation, either state may impose an organization tax of a percentage on the entire authorized stock, as such ia not a tax on interstate commerce, but a condition of possessing the powers, immunities and privileges of a corporation of that state.' So a consolidated railroad corporation, formed under a statute of this state of several domestic and foreign railroad corporations, is not a corporation incorporated under a law of this state liable to or- ganization tax, as the statute of this state is not operative without the consent of the legislatures of the other states.^ § 82. Liquor tax. — The Liquor Tax Law of 1896 is the general excise law of this state. Section 23 states that no corporation or association incorporated or organized under the laws of another state or country, except a common carrier or a corporation operat- »L. 1890, eh. 568. ^L. 1897, ch. 414. »L. 1894, ch. 556. *L. 1896, ch. 908, sec. 180, amended by L. 1901, ch. 448. "Ashley v. Ryan, 153 U. S. 436. "People V. New York, C. & St. L. K. R. Co., 129 N. Y. 474. Miscellaneous Taxes. 139 ing dining, btiffet, parlor or sleeping cars, in certain cases, shall traffic in liquors. It has been held that a state may levy an excise tax on a railroad corporation as a condition of exercising its fran- chise in such state.' § 83. Transfer tax. — A tax is imposed upon the transfer of any property, real or personal, of the value of five hundred dollars or more, to persons or corporations not exempt from taxation by law, when the transfer is by will, or the intestate laws of this state, from a resident of this state, or of property within this state from a non-resident, or, in either case, in contemplation of death.^ It relates to foreign corporations in two ways. The tax is levied on legacies to foreign corporations in certain cases, and on legacies to others of stocks and bonds of foreign corpora- tions in certain cases. In the case of a legacy to a foreign cor- poration, either the decedent must have been a resident of this state, or the property bequeathed must have had its situs in this . state. In either case the legacy is subject to the tax. A statute of this state, authorizing a foreign corporation to receive a legacy, does not exempt it from transfer tax.' A statute of this state, exempting a certain class of corporations from transfer tax, does not apply to foreign corporations of the class named, in the absence of a specific statement in the statute to that effect." A legacy to another of stock of a foreign corporation is subject to transfer tax, if the decedent was a resident of this state at the time of his death, and is not subject thereto, if he was not a resi- dent liere at that time." A legacy to another of bonds of a foreign corporation is subject to transfer tax, if the decedent 'Maine v. Grand Trunk Ry. Co., 142 U. S. 217. "h. 1896, ch. 908, sec. 220, amended by L. 1897, ch. 284, and by L. 1905, ch. 368. "Matter of Wolfe, 23 Misc. 439 ; ri. i,-., 52 N. Y. Supp. 415. '"Matter of Prime, 136 N. Y. 347; Matter of Balleis, 144 N. Y. 132. "Matter of Bishop, 82 App. Div. 112; s. c, 81 N. Y. Supp. 474; Matter of James, 144 N. Y. 6; Matter of Smith, 71 App. Div. 602; s. c., 76 N. Y. Supp. 185; Matter of Merriam, 141 N. Y. 479, affirmed by U. S. Supreme Court; Estate of Wall, N. Y. Law Journal, Jan. 18, 1905, affirmed by Appellate Division, June, 1905. 140 Conditions of Doing Business. was a resident of this state at the time of his death, or if the bonds themselves, registered or coupoii, were kept in this state, althou^ the decedent was a non-resident at that time.^^ Section 227 of the Tax Law prohibits a corporation transferring stock standing in the name of a decedent unless notice of the time and place of such transfer shall be served up.on the state comp- troller at least ten days prior to the transfer. § 83a. Stock transfer tax. — Section 315 of the Taw Law im- poses a tax of two cents on each hundred dollars of face value or fraction thereof, on all sales, or agreements to sell, or memoranda of sales, or deliveries or transfers of shares or certificates of stock in any domestic or foreign corporation, whether entitling the " holder " to the benefit of such stock, or to secure the future pay- ment of money or the future transfer of stock. A deposit of stock strictly as collateral security is excepted. It is provided further that any person who shall make any such sale without paying such tax, or who shall in pursuance of any sale, deliver any stock, or evi- dence of the sale thereof, or bill or memorandum thereof, without having the proper tax stamps affixed thereto, shall be guilty of a misdemeanor, and shall forfeit to the people of the state a civil penalty of five hundred dollars, and further that a transfer of stock, on which such tax is imposed and not paid at the time of such transfer, shall not be made the basis of any action or legal pro- ceedings, and that proof thereof shall not be offered or received in any court in this state. "Matter of Whiting, 150 N. Y. 27; Matter of Morgan, 150 N. Y. 35, super- seding Matter of Gibbes, 84 App. Div. 510; s. c, 83 N. Y. Supp. 53, affirmed without opinion, 17€ N. Y. 565. PART II. ^owEES AHT> Liabilities. CHAPTER VIII. Statutoet Regulations. § 84. What statutes control. — The relations of a foreign cor- poration with, its officerei, directors and stockholders, and the rela- tions of the officers, directors and stockholders among themselves are regulated by the charter of the corporation and the statutes of the home state. The courts of this state have no power to regulate the internal affairs of a foreign corporation, or to extend or extinguish its corporate life. Statutes of this state granting powers and privileges to corporations do not apply to foreign cor- porations. The relations between the corporation and third par- ties, in the making of contracts here, and the acquisition of property here, are regulated by the statutes of this state, except that the corporate power of the corporation tO' make the contract or to acquire the property is granted by the home state. The indi- vidual liability of officers, directors' and stockholders to creditors is regulated by the charter and the statutes of the home state, except as otherwise expressly provided by the statutes of this state. A statute of a state granting powers and privileges to corporations must, in the absence of plain indications to the contrary, be held to apply only to corporations created by the state and over which it has the power of visitation and control. Such is the natural interpretation of such legislation, in the absence of a contrary in- tention appearing on the face of the act. The legislature in such (141) 142 PowEES AND Liabilities. cases is dealing with its own creations, whose rights and obliga- tions it may limit, define and control. The power of corporations to take and hold property is a corporate power and depends upon their charters. The law of this state cannot enlarge or change the powers of a foreign corporation. They are solely those given by the law of the domicile. Foreign corporations are permitted by comity to exercise their powers within this state when not in coh- travention of our statutes or public policy. Statutes have been framed from time to time permitting such corporations! to hold property here. But such enactments do not change, modify or enlarge the powers of corporations given by the state which cre- ated them. They are simply enabling statutes authorizing such corporations to exercise their charter powers in this jurisdiction.* Statutes of this state declaring its public policy with respect to the transaction of business and regulating criminal and prohibited acts, applicable to all the citizens of the state, apply to a foreign corporation doing business here. The statutory action against a director or ofiicer for misfeasance in office will be considered here- after.^ § 85. Statutes of this state. Tax exemptions. — The General Corporation Law of 1892 does not apply to foreign corporations except as expressly provided.^ Sections 10 and 11 of that law grant every corporation the power to have suc- cession, to have a^ seal, to acquire property, to appoint officers and agents and to make by-laws, and limit it to powers given by law and those necessary to the exercise of the powers so given. These sections are a re-enactment, in a revised form, of sections 1, 2 and 3 of title 3 of chapter 18 of the Revised Statutes.'* It was held that those sections of the Revised Statutes did not apply "to a foreign corporation,' and such ruling is applicable to sections 10 and 11. 'Matter of Prime, 136 N. Y. 347; St. Louis & S. F. Ry. Co. v. James, 161 U. S. 545. 'See sees. 236 to 241, infra. 'Wamsley v. H. L. Horton & Co., Ltd., 12 App. DiT. 312; s. c, 42 N. Y. Supp. 767, affirmed without opinion, 153 N. Y. 687. •1 R. S. 600, sees. 1, 2, 3; 8th ed., p. 1723. •Hope M. L. Ins. Co. v. Perkins, 38 N. Y. 404. Statutory Regulations. 143 In 1894 the Court of Appeab in referring to section 48 of the Stock Corporation Law of 1892^ said: "We have no doubt that this section refers solely to domestic corporations. The whole of the chapter from which the section is taken, is, in substance, a revision of the law relating to certain classes of corporations as contained in the Revised Statutes and their amendments, and it is plain that those statutes generally, if not in every provision, re- ferred to domestic corporations only.'" The statutes of this state regulating the increase of capital stock and the corporate power to contract debts, to issue bonds and to execute mortgages do not control the action of a foreign corporation.^ In 1889 a statute was passed' providing that any religious or charitable corporation may hold property not exceeding in value two million dollars, and this statute was amended in 1890" by increasing the limit to three million dollars, and providing that the personal property of such corporations shall be exempt from taxation, and that the act to tax gifts, legacies and collateral inheritances," shall not apply thereto. It was held, that the exemption from taxation did not apply to foreign religious and charitable corporations because the statute of 1889 granted powers to domestic corporations only, as a statute of a state granting powers and privileges to corporationsi must in the absence of plain indications to the contrary be held to apply only to corporations created by the state and over which it has the power of visitation and control, and the amendment of 1890 exempting " such " corporations from taxation cannot refer to foreign corporations', as the statute of 1889 it amended did not, and so legacies by a resident of this state to foreign religious and charitable corporations are subject to collateral inheritance tax.^^ 'L. 1892, ch. 688, sec. 48, printed in the appendix. 'Vanderpoel v. Gorman, 140 N. Y. 563. •Ernst V. Rutherford & B. S. Gas Co., 38 App. Div. 388; s. c, 56 N. Y. Supp. 403. 'L. 1889, ch. 191, entitled an act to limit the amount of property to be held by corporations organized for other than business purposes; repealed by h. 1896, ch. 908. "L. 1890, ch. 553 ; repealed by L. 1896, ch. 908. "L. 1885, ch. 483 ; repealed by L. 1892, ch. 399. "Matter of Prime, 136 N. Y. 347. 144 PowEES AND Liabilities. In 1892 a statute was passed," revising and superseding prior statutes in relation to taxable transfers of property. It provided that any property devised or bequeathed to any religious corpora- tion shall be exempt from its provisions. It vpas held that such exemption applied to domestic religious corporations only, because the statute should receive the same construction as a similar pro- vision in a prior statute had received, and that was held not to apply to foreign corporations," and because the court, in constru- ing the grant of a privilege to corporations, will not imply that it includes foreign corporations, in the absence of plain indications to that effect." "L. 1892, ch. 399; repealed by L. 1896, ch. 908. »L. 1890, ch. 553. Matter of Prime, 136 N. Y. 347. "Matter of Balleis, 144 N. Y. 132. !Name. Seas., Books. 145 CHAPTEE IX. IsTame. Seal. Books. § 86. Name. — Section 6 of the General Corporation Law pro- vides that no certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state, or a name so nearly resembling it as to be calculated to deceive shall be filed or recorded in any office for the purpose of effecting its incorporation or of authorizing it to do business in this state. Prior to 1902 this section did not refer to foreign corporations but the amendment of that year was intended to extend its provisions to them although the language is not clear. Such amendment did not in terms refer to a charter by special act, but its purpose and intent was to prohibit the filing of such charters as well as certificates of incorporation where the names conflicted.^ Section 15 of the General Corporation Law provides that no foreign corporation shall do business in this state without having first procured from the secretary of state a certifi- cate of authority so to do. It provides further that no certificate of authority shall be granted to any foreign corporation having the same name as an existing domestic corporation or a name so nearly resembling it as to be calculated to deceive. It provides further that no certificate of authority shall be granted to any for- eign corporation, other than a moneyed or insurance corporation, with the word " trust," " bank," " banking," " insurance," " as- surance," " indemnity," " guarantee," " guaranty," " savings," " investment," " loan," or " benefit," as a part of its name.^ Sec- tion 593 of the Penal Code provides that any person or corporation who acts as agent or representative in this state of a foreign cor- poration, otheir than a moneyed corporation, with the said words or any other words or terms indicating, representing or holding out such company to be a moneyed corporation, as a part of its 'L. 1892, eh. 687, sec. 6, as amended by L. 1902, ch. 9, printed in the ap- pendix. ^Id., sec. 15, printed in the appendix. 10 146 Powers and Liabilities. name or corporate title, or who in connection with such corporation or otherwise shall put forth any sign containing said name, or who shall advertise or publish the said company as doing business in this state, directly or indirectly, through agents or otherwise, while such company shall not be authorized under a certificate procured pursuant to the said section 15, is guilty of a misde- meanor. Section 608 of the Penal Code provides that any person, association or corporation, other than a moneyed corporation, who shall within this state, directly or indirectly, or through agents or representatives, transact business under or in any wise use a corporate name or a corporate title with the said words as a part of such name or title, is guilty of a misdemeanor.' It has been held that the Farmers' Loan and Trust Company, a domestic corporation, may enjoin the Farmers' Loan and Trust Company of Kansas, a foreign corporation, having an oiBce in this state, from advertising its business here without adding the words " of Kansas " to its name.^ A foreign insurance corporation duly licensed to do business here, may have an injunction against an- other foreign insurance corporation, doing business here after having been refused a license to do so by the state authorities he- cause of similarity of name-, although the second corporation has done only a small amount of business here f but not unless special damage before suit brought is shown. ^ If a foreign corporation establishes itself here without taking out a certificate under the said section 15, and, thereafter, in ignorance of its existence, and after inquiry at the secretary of state's office, a domestic corpora- tion having the same name is formed, the foreign corporation can- not have an injunction pendente lite against the use of the name, as the equities are against it, and as it itself has no right to transact business here.'' Where the answer of a corporation, sued as the 'Penal Code, sees. 593 and 608, printed in the appendix. •Farmers' L. & T. Co. v. Farmers' L. & T. Co. of K., 21 Abb. N. C. 104. "Employers' L. Asaur. Corp. v. Employers' L. Ins. Corp., 61 Hun, 552; s. c, 16 N. Y. Supp. 397. "Same v. Same, 78 Hun, 446; a. c, 29 N. Y. Supp. 217. 'American Tartar Co. v. American Tartar Co., 57 App. Div. 411; s. c, 68 N. y. Supp. 236. Name, Seal. Books. 147 Standard Oil Company, admits the plaintiff's allegation that the , defendant is a foreign corporation, the answer being signed by the defendant's attorney as such, and being verified by an officer of the defendant corporation as such, defendant's identity as a foreign corporation is sufficiently proved, although there are corporations named the Standard Oil Company of 'New York and the Standard Oil Company of New Jersey.* It i® provided in the Code of Civil Procedure that in an action or special proceeding, brought by or against a corporation, the defendant is deemed to have waived any mistake in the statement of the corporate name, unless the misnomer is pleaded in the answer or other pleading in the defend- ant's behalf.' § 87. Seal. — The Statutory Construction Law provides that a seal of a corporation may be impressed directly upon the instru- ment or writing to be sealed, or upon wafer, wax or other adhesive substance affixed thereto, or upon paper or other similar substance affixed thereto by mucilage or other adhesive substance. It pro- vides further that an instrument or writing duly executed, in the corporate name of a corporation, which shall not have adopted a corporate seal, by the proper officers of the corporation under their private seals, shall be deemed to have been executed under the cor- porate seal.""* The application of this provision to a foreign corpo- ration has not been determined by the courts. It applies probably to acts executed within this state but not to those executed in an- other state. It is forgery in the second degree to forge the seal of any domestic or foreign corporation with intent to defraud.'^^ § 88. Books of account. — A court of this state by mandamus cannot order an inspection of the books of a foreign corporation. Section 2^ of the Stock Corporation Law requires every stock cor- poration to keep books of account and a stock book, the latter to "De Maio v. Standard Oil Co., 68 App. Div. 167 ; a. c, 74 N. Y. Supp. 165. •Code Civil Pro., sec. 1777, printed in the appendix; superseding 2 R. S. 459, sec. 14. "L. 1892, ch. 677, sec. 13. 148 PowEES AND Liabilities. be open to the inspection of stockholders and judgment creditors. It does not apply to a foreign corporation.-'^ It is a crime for the proper person to omit to make proper entries in the books of ac- count," or for any person to forge or alter an entry." "^In re Reppleye, 43 App. Div. 84 ; s. c, 59 N. Y. Supp. 338 ; appeal dismissed, 161 N. Y. 615; In re Crosby, 43 App. Div. 618; Mitchell v. Northern S. 0. & T. Co., 44 Misc. 514; s. c, 90 N. Y. Supp. 60. "See sec. 115, infra. "See sec. 117, infra. Capital Stock. 149 CHAPTEK X. Capital Stock. § 89. What statutes control — The issuing of stock and the transfer and guarantying thereof and the guarantying of dividends are matters to be regulated by the home state.^ Section 40' of the Stock Corporation Law of this state provides for certificates! of stock, for the transfer of stock and for the guarantying of bonds, but these provisions apply to domestic corporations, and the only part of the section referred to vchich affects a foreign corporation is the provision that any stock corporation, domestic or foreign, except monied corporations, may purchase, acquire, hold and dis- pose of the stocks, bonds and evidences of debt 'of a corporation, domestic or foreign, and issue in exchange therefor its stock, bondsi or obligations, if authorized so to do by a provision in its certificate of incorporation or in a certificate amendatory thereof or supplementary thereto. This provision, so far as it applies to a foreign corporation, is an enabling act only, the power being granted in the home state. As such enabling act, it is unnecessary and may be construed as a limitation on the exercise in this state of the charter powers, that is, it is susceptible to the construction that a foreign monied corporation may not so acquire such stocks, bonds and evidences of debt, although so authorized by its charter ; and that a foreign corporation with a special charter as distin- guished from a certificate of incorporation, likewise may not ; and that a foreign corporation may not acquire such property except for its own stock, bonds and obligations, although otherwise author- ized by itsi charter.^ § 90. Certificates. — ^Issuing illegal, fraudulent or fictitious cer^ tificate of stock' and forging such certificates* are made crimes by 'McVity V. E. D. Albro Co., 90 App. Div. 109; s. u., 86 N. Y. Supp. 144; aflSrmed without opinion, 180 N. Y. 554. =L. 1892, eh. 688, sec. 40, amended by L. 1902, ch. 601, printed in the ap- pendix. 'See sec. 114, infra. 'See sec. 117, infra. 150 PowEES AND Liabilities. the Penal Code. It has been held that a pledgee of certificates of stock of a foreign corporation on deposit in a trust company of this state may foreclose his lien in a. court of this state as the deposi- tory, a domestic corporation, gives the stock a situs here.^ A resi- dent of this state, claiming stock in a foreign corporation, may sue it and a purchaser of the stock at execution sale under a judgment in the home state against the former owner, from whom the plain- tiff acquired it, to cancel the certificate of stock issued to such pur- chaser upon the ground that the judgment was fraudulent with the privity of the corporation. The court will take jurisdiction be- cause of the fraud, although property beyond the jurisdiction may be affected by the judgment. "^ Section 50 of the Stock Corporation Law^ provides that upon the application of the owner of a lost or destroyed certificate of stock, the Supreme Court may direct the cor- poration to issue to him a new certificate, upon his complying witli prescribed conditions. This statute does not apply to foreign cor- porations,* except a national bank. § 91. Subscriptions to stock. — A subscriber to the stock of a for- eign corporation cannot be compelled to accept stock in a corpora- tion of this state of the same name and having the same officers, but he may recover back his payments.' It has' been held by the Cir- cuit Court of the United States in Massachusetts that a New Hamp- shire statute, prohibiting the issuing of stock for less than its par value and declaring void certificates of stock so issued, is not so far binding on a stockholder, resident of another state as to pre- clude him from recovering back what he has paid after his cer- tificate has been declared void by court." Personal liability for subscriptions, calls and assessments will be considered hereafter. 'Page V. Boggess, 41 Misc. 40; s. c, 83 N. Y. Supp. 509. •Sims V. Bonner, 00 X. Y. Superior, 70; s. c, 10 N. Y. Supp. 801. 'L. 1892, ch. 088, sees. 50, 51. 'Jewett V. St. Louis & S. Ry., N. Y. Law Journal, March 7, 1905; In re Hayt, 39 Misc. 350; s. c, 79 N. Y. Supp. 845. •Seeber ^. People's B. L. & S. Co., 36 App. Div. 312; s. c, 55 N. Y. Supp. 364. '"Hallett V. New England K. G. Co., 105 Fed. 217. See Prohibited Acts, sees. 107, 110, infra. "See sees. 122-125, infra. Capital Stock. 151 § 92.. Subject to charter and to constitution and statutes of the home state. — Tlie constitution and statutes of the home state in force at the time of the grant of a charter are part of the charter as to non-resident stockholders.^^ When a person subscribes to stock oither in a domestic or foreign corporation, he thereby consents to be governed by the provisions of its charter or the general law under which it was incorporated, and by such by-laws of the corpo- ration as may be lawfully enacted, and that his rights and liabilities as a stockholder shall be tested and determined with reference to such laws. The fact that a stockholder of a corporation is not a citizen or resident of the state or country where the corporation was incorporated does not ej^empt him from the operation of any of those provisions of the act of incorporation, be it a general or special act, which determine the rights and liabilities of domestic shareholders, and regulate their dealings with the corporation. Every corporation carries its charter wherever it goes and is allowed to transact business ; and while a corporation may be restricted in the exercise of some of its powers while doing business in a foreign state, yet every one who deals with it is bound to take notice of the authority which is conferred upon it by the act from which it de- rives itsi corporate existence. This is especially true of one who subscribes for stock and thereby becomes a member of the company. It has also been held that when a foreign sovereignty, having au- thority so to do, confers upon one of its corporations the right to re-adjust its indebtedness in a given manner or to liquidate its affairs, or to make assessments upon shareholders, the right so con- ferred will be recognized and enforced by the courts of the United States, provided the foreign statute accords to all creditors and shareholders equal privileges, ■ without reference to their place of xesidence or citizenship and does not contravene the general policy of our laws. Under these rules it has been held that an American stockholder of an English corporation is bound by a by-law impos- ing a fee for transferring stock and by a statute imposing a stamp tax thereon, and that if he assigns his stock, but the same is not transferred on the books because of the non-payment of such fee and •''Correy v. Mayor & C. of Baltimore, 196 U. S. 466. 152 PowEES A^^D Liabilities. tax, lie remains a stockliolder of record liable for an assessment levied on stockholders for the benefit of creditors in dissolution pro- ceedings commenced subsequent to his assignment of his stock, and that he is subject to suit therefor in American couTts/^ Likewise a citizen of one of the LJnited States by subscribing to stock in a British corporation subjects himself to the laws of England under which the corporation was formed providing that the articles of as- sociation which provide for regulations allowing the directors to make calls as they think fit shall be binding on the members. Such subscriber is liable in an action for debt in a federal court in his own state for a call made by the directors without proof of the ne- cessity for such call or of any express promise to pay.** It has been held that an amendment to a by-law of an English corporation, giv- ing it a lien on its stock for the holder's debt to it, which shall be paramount to the lien of a prior pledgee of the stock, if not trans- ferred on the books of the corporation, valid under the laws of Eng- land, is binding on the pledgee. "^^ It seems that policy holders, bondholders and other persons dealing with a foreign corporation are subject, the same as stockholders, to the statute from which it derived its corporate existence. A person dealing with a foreign corporation in this state is not chargeable with a general statute of the home state, not being the one under which the corporation wa» incorporated. '° § 93. Transfer of stock. — It is within the power of the legisla- ture of this state to prohibit a transfer of stock of a foreign corpo- ration to be made within this state until all calls thereon are paid, but the provision in section 40 of the Stock Corporation Law above referred to, is not intended to apply to such a transfer, and could not apply to one made out of the state. A stockholder here of a foreign corporation is bound by a by-law imposing a fee for trans^ •KJiesen v. London & X. W. A. M. Co., 102 Fed. 584, U. S. Cir. Ct. of Ap., 8th Cir. "Nashua Sav. Bank v. Anglo-American L. M. & A. Co., 189 U. S. 221. "Hudson River P. & P. Co. v. H. H. Warner & Co., 99 Fed. 187, U. S; Cir. Ct. of Ap., 2nd Cir. "See sec. 148, infra. Capital Stock. 153 f erring stock on the books of the corporation, and by a statute of the home state imposing a stamp tax thereon." It has been held that a court of this state will not compel a foreign corporation to transfer stock issued by it, in excess of its authorized capital stock, as suchi over-issued stock is void;' nor is mandamus, in the name of the people of the state, the proper remedy to compel such a corporation to transfer stock, as the state has no interest, and as the remedy by action is ample. ^* There is no provision in this state that a foreign corporation shall not do business here on more favorable terms than are prescribed for domestic corporations. Under such a provision in California, and the additional provision that every business cor- poration organized or doing business in the state shall maintain an office in the state where the transfers of its stock shall be made, it was held that a British corporation, complying with such provisions, and selling its stock in the state to a resident of that state, is gov- erned by the law of that state as to the transfer of its stock, and that, upon the death of the stockholder, it must transfer such stock to the name of his executrix, although there has been no adminis- tration on the stockholder's estate at the domicile of the corporation in England." § 94. Illegal stock. — If the principal office of a foreign corpora- tion is in this state, and all its directors reside here, and all its di- rectors' meetings are held here, except the annual meeting required by its charter to be held in the home state, a court of this state may enjoin an illegal issue of stock without infringing upon the rule that it will not interfere in the internal affairs of a foreign corpo- ration. Additional capital stock issued as a bonus to bonds is con- trary tO' a statute of the home state providing that nothing but money shall be considered as a payment for stock, there being no de- cision of that state to the contrary. But if the capital stock is im- paired, so that the par value of the bonds is all that the bonds plus the bonus stock is worth, the illegal issue is not inequitable as to "Giesen v. London & N. W. A. M. Co., supra. "People ex rel. Jenkins v. Parker V. C. Co., 10 How. Pr. 543. "London, P. & A. Bank v. Aronstein, 117 Fed. 601, U. S. Cir. Ct. of Ap., 9th Cir. 154 PowEES AND Liabilities. existing stockholders, and will not be enjoined as to them, hut being fraudulent as to creditors, although the action if brought by a stock- holder, on behalf of the corporation, it will be enjoined as to cred- itors, so far as it is executory, and so far as it is executed, subject to the requirement that the corporation must offer to refund what it has received for the stock issued as a preliminary to rescission, and subject to the condition that the stock has not come into innocent hands for value.^" In 1868, it was held by the Special Term of the Supreme Court of this state, at the suit of a resident stockholder of a foreign railroad corporation, that it would enjoin the use of the proceed® of stock illegally issued, and appoint a receiver of such proceeds f^ but that it would not do so, after a statute and a court decision of the home state had declared such new stock to be valid. ^^ It has been held by the Special Term of the Supreme Court that a minority stockholder of a foreign corporation can not enjoin its officers from issuing its stock, upon an allegation that they were is- suing it to themselves for an inadequate consideration, unless he shows that they are financially unable to respond to the corporation for the difference between the price paid and the value of the stock.^ A complaint of a foreign corporation to enjoin its directors from issuing spurious stock and to cancel stock already issued, does not state a cause of action, unless it shows that the corporation has power under its charter to issue stock, the authorized amount and facts showing injury.^* It is not to be assumed that, because an issue of stock by a foreign corporation to two directors for patents at an excessive valuation, and the immediate return of some of the stock to the corporation for sale to the public, might be unlawful under the statute of this state, it would be unlawful under the statute of the home state, and a complaint by a stockholder against the corporation and such directors, to cancel the excess of such stock over the real value of the patents, which does not allege the "Kraft V. Griffon Co., 82 App. Div. 29; ti. c, 81 N. Y. Supp. 438. See Eecent Cases of Visitation, sec. 238, infra. "Tisk V. Chicago, R. I. & P. R. R. Co., 53 Barb. 513. "O'Brien v. Chicago, R. I. & P. R. E. Co., 53 Barb. 508; s. c, 36 How. Pr. 24. "'Nash V. Hall, 11 Misc. 468; s. c, 32 N. Y. Supp. 701. "Reno Oil Co. v. Culver, 60 App. Div. 129; s. c, 69 N. Y. Supp. 969. Capital Stock. 155 statute of lie home state or that the transaction was unlawful undear such statute, does not state a cause of action. ^^ A minority stock- holder of a foreign corporation cannot maintain an action to compel other stockholders to return stock to the corporation issued to them for patents at an excessive valuation without a rescission of the sal© and a re-transfer to the vendors of the patents, although the statutes of the home state declare such issue of stock to be illegal.^* Xt has been held by the Special Term of the Supreme Court, that a transfer agent of the stock of a foreign corporation, doing business here, can not claim that an injunction against the issue of illegal preferred stock would be useless, because the corporation and its officers and agents are out of the state, unless the corporation itself makes such objection.^' A court of this state has jurisdiction of an action by a minority stockholder against a foreign- corporation and its majority stockholders and directors, to compel the directors to account for stock fraudulently issued to themselves.^* A foreign railroad cor- poration may maintain an omnibus action in equity against the holders of shares of its stock, illegally issued by the fraud of its transfer agent, to have the rights of all parties determined and the spurious stock canceled.^' § 95. Exchanging stock on merger. Retiring stock. Invest- ments in stock. Attachment of stock. Taxation of stock. — A foreign mining corporation formed by the merger of other foreign mining corporations under a merger agreement which provides that a person who holds as trustee certain shares of the former corpora- tion should receive, as trustee shares of the new corporation in return for the old shares, may have an injunction pendente lite prohibiting such person voting on or disposing of shares of the new corporation issued to him individually by directors elected through "Insurance Press v. Montauk F. D. W. Co., 83 App. Div. 259; ». >;., 82 N. Y. Supp. 104. ^'Insurance Press v. Montauk F. D. W. Co., 103 App. Div. 472; s. c, 93 N. Y. Supp. 134. "Ernst V. Elmira M. I. Co., 24 Misc. 583; s. c, 54 N. Y. Supp. 116. "Ernst V. Rutherford & B. S. G. Co., 38 App. Div. 388; s. c, 56 N. Y. Supp. 403. "New York & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30. 156 Powers and Liabilities. tis efforts, as there is sufGeient doubt of his right to hold such, shares individually to require a trial on the merits.^" A court of this state will not enjoin a foreign railroad corporation retiring its preferred stock at par in pursuance of a condition imposed when the . stock was issued.^^ A court of this state at the suit of a minority stockholder will not enjoin the directors of a foreign corporation in process of liquidation in its home state from distributing its stock, the directors being trustees in liquidation under the statutes of the home state and subject to the order of its courts.^^ A guardian of a minor may not invest his ward's funds in the stock of a foreign corporation.^' The liability of shares of stock to levy under a war- rant of attachment against the property of the holder will be con- sidered hereafter.'* Their liability to taxation has been considered already.'' I 96. Dividends.- — To vote for an illegal dividend is a misde- meanor.'* The personal liability of directors therefor will be con- sidered hereafter.'^ The power of the corporation to make and guaranty dividends is regulated by the statutes of the home stata The exercise of such power within this state is subject to limitation by the legislature of this state. A resident of this state dealing with a foreign corporation is not chargeable with knowledge of a general statute of its home state forbidding it to declare dividends except from surplus profits. If he holds its note for money loaned and receives for it stock with a guaranty by the corporation that he would receive six per centum dividends thereon, and the corpora- tion repudiates the guaranty upon the ground that it was ultra vires and forbidden by the general statutes of the home state, he may re- scind the transaction, return the stock and recover the amount of '"United Gold & P. il. Co. v. Smith, 94 App. Div. 615; s. c, 88 N. Y. Supp. 67. "Hackett v. Northern Pae. Ry. Co., 36 Misc. 583 ; s. c, 73 N. Y. Supp. 1087. ""Nickerson v. Madison, N. Y. Law Journal, Feb. 17, 1905. "Matter of Decker, 37 Misc. 527; s. c, 76 N. Y. Supp. 315. "See sec. 212, infra. "See sees. 38, 42, 69, 71, 83, supra. "See sec. 115, infra. "See sec. 134, infra. Capital Stock. 157 the note with interest. ^^ If a foreign corporation having power under the laws of its home state to purchase the stock of another foreign corporation, does purchase such stock, its agreement on the back of the certificates to pay future dividends thereon is not a guaranty of dividends so as to be ultra vires, but is a promise to pay a part of the purchase price of the stock and enforceable as a promise to pay.^^ A court of this state will not take jurisdiction of an action against a foreign corporation to compel it to declare and to pay such dividends as upon an accounting may appear proper, as it will not interfere in the internal administration of the affairs of such a corporation, and as the officers, books and assets of the corporation, necessary to an accounting, are not in this state." It is a different case where the corporation makes a contract to pay dividends. A resident of this state, holding preferred stock in a foreign railroad corporation, may sue it here, to compel it to apply its future surplus earnings to the payment of dividends, on it; con- tract so to do ;** and if, during the pendency of such an action, the corporation and others are consolidated into a corporation of this state, which assumes all the liabilities of the foreign corporation, such consolidated corporation may be brought in as party defend- ant by a supplemental summons.^^ It was held by the Special Term of the Supreme Court in 1868, at the suit of the bondholders and stockholders of a foreign corporation, that it will not enjoin the cor- poration declaring an unfair or illegal dividend, unless the bonds are due, or fraud is shown injurious to the rights of the resident stockholders.*' Where a foreign corporation makes a valid contract with a resident of this state to pay him five per cent of its net sur- plus earnings for services rendered, a court of this 'state may en- join the corporation paying to others dividends in excess of ninety- five per cent of such earnings, pending an action on the contract^ "McVity V. E. D. Albro Co., 90 App. Div. 109; a. s., 86 N. Y. Supp. 144, affirmed without opinion, 180 N. Y. 554. "WindmuUer v. Standard D. & D. Co., 106 App. Div. 246; s. c, 94 N. Y. Supp. 52. "Berford v. New York Iron Mine, 56 N. Y. Superior, 236. "Prouty V. Michigan S. & N. I. E. K. Co., 1 Hun, 655. "Prouty V. Lake Shore & M. S. R. R. Co., 85 N. Y. 272. "Howell V. Chicago & N, W. Ry. Co., 51 Barb. 378. "Dupignac v. Bemstrom, 86 App. Div. 625 ; s. c, 83 N. Y. Supp. 350. 158 PowEES AND Liabilities. CHAPTEK XI. C'oEPOKATE Meetings. § 97. Place. — Meetings of stockholders and directors are matters to be regulated by the home state. The legislature of this state may- place conditions on the right to hold corporate meetings here, but it has not done so. The Code of Civil Procedure provides that a for- eign corporation may not sue here on an act forbidden to a domestic corporation, and states expressly that such prohibition shall not affect the validity of a meeting of the stockholders or directors of a foreign corporation, held within this state, where such meeting is authorized by the laws of the state, country or government by or under which the corporation is created, or of any act done at such meeting, which is not in conflict with the same laws or the laws of this state.^ It has been held tliat if a majority of the stockholders of a Vermont corporation hold a meeting in this state and levy an assessment on full paid stock to pay debts and to provide working capital, stockholders not participating in the meeting, although having personal notice thereof, are not bound by the acts thereof, aa neither the stockholders nor directors can do a corporate act out of the jurisdiction creating the corporation, it not appearing what were the charter powers as to holding meetings out of Vermont.^ § 98. Voting. Reviewing meetings. — To sell a vote, to issue a proxy for value, and to be guilty of corrupt practice as inspector are misdemeanors.' A foreign mining corporation formed by the merger of other foreign mining corporations under a merger agree- ment which provides that a person who holds as trustee certain shares of the former corporation should receive as trustee shares of the new corporation in return -for the old shares^ may have an in- junction pendente lite prohibiting such person voting on or dispos- ing of shares of the new corporation issued to him individually by ^Code Civil Pro. see. 1779, printed in the appendix. "Ormsby v. Vermont C. M. Co., 56 N. Y. 623. 'See sec. 115, infra. CoEPOEATE Meetings. 159 directors elected through his efForts, as there is sufficient doubt of his right to hold such shares individually to require a trial on the merits.^ It has been held by the Special Term of the Supreme Court of this state that it will not determine whether the beneficial owner or his trustee shall vote the stock of a foreign corporation, in the absence of a decision of the home state.^ A non-resident of this state may not enjoin a foreign corporation from receiving or recog- nizing as valid any vote' cast by a record holder of its stock, on the claim that the plaintiff is joint owner with him of the stock ; but if the stockholder of record is joined as defendant, and is a resident here, and if the corporate meetings are held here, he may be en- joined pendente lite from exercising any exclusive voting right and of disposing of the stock, until the ownership is vested in them jointly.^ Section 27 of the Stock Corporation Law provides that the Supreme Court may, in a summary way, enquire into any elec- tion of any corporation and establish the election or order a new one. This section does not apply to a foreign corporation, and a court of this state will not review its elections.'' But the Supreme Court, under its general equity jurisdiction, has some power to su- pervise elections and meetings, held in this state, of a foreign cor- poration, doing all of its business here, especially in cases of fraud. ^ § 99. Effect of meetings and elections. — It was held in 1874 that if a foreign railroad corporation has an office in this state, where meetings of its directors are held, and it does not designate a person upon whom service of process may be made, as required by a state statute, such service may be made on. its general solicitor or counsel, while temporarily in the state.' A pledgee of stock of a 'United Gold & P. M. Co. v. Smith, 94 App. Div. 615; s. c, 88 N. Y. Supp. 67. "Lewisohn Brothers v. Anaconda C. M. Co., 26 Misc. 613; s. c, 56 N. Y. Supp. 807. "Harper v. Smith, 93 App. Div. 608; s. c, 87 N. Y. Supp. 516. 'Matter of North American Rice Co., New York Law Journal, April 23, 1902. 'See sec. 238, infra. •Clews V. Eockford, R. I. & St. L. B. R., 49 How. Pr. 117. For service of process, see sec. 174, infra. 160 PowEES AND Liabilities. i^ew Jersey corporation, remaining in the name of the pledgor on the books, is not in a position to set aside a sale of its assets to a cor- poration of this state, agreed to by all the stockholders, including the pledgor, because it was not made at a formal meeting called for that purpose, a statute of the home state authorizing a pledgor to vote pledged stock, and the corporation to change the character of its business.^" A statute of j^ew Jersey provided that directors shall hold ofBce for one year and until others have qualified in their place, and a statute of this state provided for a liability to creditors for failure to file an annual report,^^ and it was held under these statutes that a director of a New Jersey corporation isi liable to a creditor for failure to file an annual report, if he was elected for one year and the debt was contracted during the year, although he resigned before the debt was contracted. ^^ '"Elyea v. Lehigh S. M. Co.,' 169 N. Y. 29. "L. 1892, ch. 688, sec. 30, as amended by L. 1897, ch. 384, since amended by L. 1901, ch. 354, by striking out the liability of directors to creditors, printed in the appendix. "Seebeck v. King, 34 Misc. 483; s. c, 70 N. Y. Supp. 322. Exhibiting Stock Book. 161 CHAPTEE XII. ExHiBiTisTG Stock Book. § 100. Statutory requirement. — Every foreign stock corporation having an office for the transaction of business in this state, except monied and railroad corporations, must keep here a stock book con- taining the name?, alphabetically arranged, of its stockholders, their residences, the number of shares held by tliem, the time -when they became the ovi^ners thereof and the amounts paid thereon. It must be kept in the office of the corporation or of its transfer agent and must be open for inspection daily during business hours to stockholders, Judgment-creditors and officers of the state authorized to investigate the affairs of the corporation. Eor any refusal to allovc it to be inspected, the corporation and the officer or agent re- fusing shall each forfeit two hundred and fifty dollars to be recov- ered by the person to v^hom the refusal is made.^ A court of this state has no inherent or common law power to compel a foreign cor- poration to exhibit its stock or transfer book to a stockholder.^ The original statute granting such power enacted in 1842, did not re- quire the corporation to keep a stock book in the state open for in- spection, but required the transfer agent to exhibit the transfer book and a list of the stockholders, it being assumed that a transfer agent has a transfer book.' After this statute had been re-enacted as section 53 of the Stock Corporation Law, it was amended in 1897 by inserting the provisions requiring the corporation to keep a stock book here open for inspection, by limiting its application to corpora- tions having here an office for the transaction of business, by chang- ing the name of the book from transfer book to stock book, by add- ing judgment-creditors and officers of the state as persons entitled 'L. 1892, eh. 688, sec. 53, amended by L. 1897, ch. 384, printed in. the appendix. ^People ex rel. Field v. Northern Pae. R. E. Co., 50 N. Y. Superior (18 J. & S.) 456. 'L. 1842, ch. 165. 11 162 ' PowEES AND Liabilities. to an inspection, and by imposing the' penalty on the corporation as well as on the agent to whom alone the former statute applied.* § 101. Application of .statute. — The statute does not apply to a domestic corporation, although it is one formed by a consolidation of various foreign and domestic corporations f nor to a foreign cor- poration not having here an ofSce for the transaction of business. It has been held by the Special Tej-m of the Supreme Court that it does apply to a foreign corporation having a transfer agent here, but no office or place of business of its own, as transferring stock is trans- acting business and the place where such transfer is made is an office for the transaction of business; also that the clause of the statute providing that if such corporation has a transfer agent here the book may be deposited there refers to a corporation having an office here and not to one other than a monied or .railroad corpora- tion described elsewhere in the statute.* An office in the state cov- ers an office where books are kept and all business is transacted al- though the business is inconsid'erable.' Under the original statute, it was held that upon a stockholder's application to inspect tbe trans- fer book and a list of the stockholders, founded on his allegation that a certain person told him that such person had at his office in the state the transfer book and would transfer stock there, and such person in answer does not deny such statement, but alleges that he is not the transfer agent, and that the corporation has no office or transfer agent here, a peremptory writ of mandamus to produce the book and Yi-t of stockholders should be refused, but an alterna- tive writ should be granted to try the question of fact, as provided by the Code of Civil Procedure.* This decision is applicable to the present statute. A relator's positive oath that he owns stock in the corporation is sufficient to entitle him to a mandamus, to which •People ex rel. Field v. Northern Pac. R. E. Co., supra. 'In re Matter of Sage v. Lake Shore &. M. S. Ry. Co., 70 N. Y. 220. 'People ex rel. Miles v. Montreal & B. C. Co. Ltd., 40 Misc. 282; s. u., 81 N. y. Supp. 974. 'Cox V. Island Mln. Co., 65 App. Div. 508 ; s. c, 73 N. Y. Supp. 69, modified on another point and aflSrmed, 175 N. Y. 328. 'People ex rel. Daniels v. Crawford, 68 Hun, 547; s. c, 22 N. Y. Supp. 1025. Exhibiting Stock Book. 163 lie is otherwise entitled, althougli the defendant denies any knowl- edge or information sufficient to form a belief of such allegation.' , The complaint must show that the corporation is a stock corpora- tion, and not a monied or railroad corporation, and that it has an office for the transaction of business in this state, or a transfer agent." It was held under the original statute that it was the ab- solute duty of the transfer agent to exhibit the transfer book and a list of the stockholders as specified in the statute, irrespective of any motive or purpose he has to refuse," and the same rule applies to the present statute. The stockholder may make extracts from the book.^ § 102. Demand and refusal. — To obtain relief under the stat- ute a demand and refusal are essential. A demand for the stock book as. such is necessary. It was held under the former statute that a demand for the stock book is not a demand for the transfer book ; as the present statute names the stock book the demand must be equally specific.^' The demand must be made during business hours; and it has been held that a demand at 3 :15 p. m., an officer of the corporation being still at the office, is timely, although bank- ing hours end at 3 p. m." Under the original statute it was held that the transfer agent must exhibit the book he has containing the transfers', although the original transfer book is kept in the home state as required by a statute of that state •j'-^ and under the present statute, it has been held, that if the corporation has not the required book in the state, its transfer agent and also its registrar of stock, and also its assistant secretary and treasurer in charge of its finan- cial office in this state, must exhibit such books of the corporation "People ex rel. Harriman v. Paton, 20 Abb. N. C. 195. "Seydel v. Corporation L. Co., 46 Misc. 576; a. u., 92 N. Y. Supp. 225; Hollister v. DeForest W. T. Co., 94 N. Y. Supp. 504. "People ex rel. Harriman v. Paton, supra; Kennedy v. Chicago, R. I. & P. E. R. Co., 14 Abb. N. C. 326. '^Fay V. Coughlin-Sandford S. Co., 94 N. Y. Supp. 628. "Kennedy v. Chicago, R. I. & P. R. R. Co., supra. "Cox V. Island Min. Co., supra. "People ex rel. Del Mar v. St. Louis & S. F. Ry. Co., 19 Abb. N. C. 1; s. c, 44 Hun^ 562. 164 PowEES AND Liabilities. as they have, showing the transfers of stock and a list of the stock- holders or any part thereof." An evasive answer, as that the stock book is at the home office in another state, is a sufficient refusal to support a mandamus." It is not an excuse that the stock book is in the home state to be written up, although the officer upon whom the demand is made facilitates its inspection there ;^^ but in a special case, arising two months after the amendment of 1897 was made, a statement by the officer that he did not refuse, but could not show the stock book as it was out of the state, followed immediately by the bringing of the book to the office in this state and the keeping of it there open for inspection, was held not to be a refusal." § 103. Mandamus. Penalty. Misdemeanor. — After a demand and refusal the usual remedy is a mandamus directing the refusing party to exhibit the book. If the facts are not disputed a .peremp- tory writ is granted, but if any material fact is denied an alterna- tive writ issues to try the question raised.^" A reference may be ordered to take proof for the information of the court, and a re- spondent subpoenaed to appear on such a reference failing to at- tend will be punished for contempt of court, although he acted under advice of counsel.^^ The Code of Civil Procedure^^ author- izes an action against a foreign corporation by a resident of the state for any cause of action, but this does not apply to an application to inspect the stock book, as a mandamus proceeding is not an action but a special proceeding.^' The present statute provides also for money penalties. For any refu-al the corporation and the officer or agent refusing shall each forfeit two hundred and fifty dollars, but a stockholder suing the corporation and its officer for penalties "People ex rel. Singer v. Knickerbocker Trust Co., 38 Misc. 440; s. c, 77 N. Y. Supp. 1000; Tyng v. Corporation Trust Co., 104 App. Div. 486; s. c, 93 N. Y. Supp. 928. "People ex rel. Miles v. Montreal & B. C. Co. Ltd., supra. "Recknagel v. Empire S. L. 0. L. Co., 24 Misc. 193 ; s. c, 52 N. Y. Sup|. 635. "Greene v. Shain, 22 Misc. 720 ; s. c, 49 N. Y. Supp. 1061. ^"People ex rel. Daniels v. Crawford, supra. ^' People ex rel. Del Mar v. St. Louis & S. F. Ry. Co., supra. "Sec. 1780, printed in the appendix. '"People ex rel. Field v. Northern Pac. R. E. Co., supra. Exhibiting Stock Book. 165 for repeated refusals to allow him to examine the stock book, can re- cover but for one violation by the corporation and one by each of- ficer refusing prior to the commencement of the action, asi such penalties are not cumulative, especially in the case of a corporation not in active business, where the stockholder needs but one inspec- tion, and has no use for repeated inspections, and the requests con- stitute but one transaction although continued over three days.^* The penalty does not carry interest,^^ Section 983 and sections 1893 to 1898 of the Code of Civil Procedure relate to an action to recover a penalty or forfeiture. An action under section 53 is an action by a person specially aggrieved and the summons need not be served by an officer authorized by law to collect an execution as is required by section 1895 in the case of an action by a common informer.^* In addition to the remedy by mandamus and by ac- tion for a penalty, the neglect to exhibit the stock book is a misde- =«Gox V. Paul, 17S N. Y. 328. ^'Cox V. Island Min. Co., supra. '"Seydel v. Corporation L. Co., 88 N. Y. Supp. 1004. See Action for a, Penalty, sec. 232, infra. "See sec. 115, infra. 166 Powers and Liabilities. CHAPTER XIII. Transfer of Pranchise and Assets. § 104. Merger. — Any domestic stock corporation and any for- eign stock corporation authorized to do business in this state law- fully owning all the stock of any other stock corporation organized for, or engaged in business similar or incidental to that of the possessor corporation may file in the office of the secretary of state, under its common seal, a certificate of such ownership, and of the resolution of its board of directors to merge such other corporation, and thereupon it shall acquire and become, and be possessed of all the estate, property, rights, privileges and franchises of such other corporation, and they shall vest in and be held and enjoyed by it as fully and entirely and without change or diminution as the same were before held and enjoyed by such other corporation, and be managed and controlled by the board of directors of such possessor corporation, and in its name, but without prejudice to any liabili- ties of such other corporation or the rights of any creditors thereof. Auy bridge corporation may be merged under this section with any railroad corporation M'hich shall have acquired the right by contract to run its cars over the bridge of such bridge corporation.' The ex- change of stock on a merger has been considered already.'' § 105. Sale of franchise and property. — A stock corporation ex- cept a railroad corporation and except as otherwise provided by law, with the consent of two-thirds of its stock, may sell and convey its property, rights, privileges and franchises, or any interest therein or any part thereof to a domestic corporation, engaged in a business of the same general character, or which might be included in the certificate of incorporation of a corporation organizing under any general law of this state for a business of the same general charac- ter, and a domestic corporation the principal business of which is carried on in, and the principal tangible property of which is lo- cated within a state adjoining the state of New York, may with the 'L. 1892, eh. 688, sec. 58, as amended by L. 1902, ch. 98. 'See sec. 95, infra. ' Transfer of Assets. 167 consent of the holders of ninety-five per centum of its capital stock, sell and convey its property situate without the state of !Nev7 York, not including its franchises to a corporation organized under the laws of such adjoining state, and such sale and conveyance shall, in case of a sale to a domestic corporation, vest the rights, property and franchises thereby transferred, and in ease of a sale to a for- eign corporation the property sold in the corporation to which they are conveyed for the term of its corporate existence, subject to the provisions and restrictions applicable to the corporation conveying them. Before such sale or conveyance shall be made such consent shall be obtained at a meeting of the stockholders called upon like notice as that required for an annual meeting. If any stockholder not voting in favor of such proposed sale or conveyance shall at such meeting, or within twenty days thereafter object to such sale, and demand payment for his stock, he may, within sixty days after such meeting, apply to the Supreme Court at any Special Term thereof held in the district in which the principal place of business of such corporation is situated, upon eight days' notice to the cor- poration, for the appointment of three persons to appraise the value ■of such stock, and the court shall appoint three such appraisers, and designate the time and place of their proceedings as shall be deemed proper, and also direct the manner in which payment for such stock shall be made to such stockholders. The court may fill any vacancy in the board of appraisers occurring by refusal or neglect to serve or otherwise. The appraisers shall meet at the time and place designated, and they or any two of them, after being duly sworn honestly and faithfully to discharge their duties, shall estimate and certify the value of such stock at the time of such dis- sent, and deliver one copy to such corporation, and another to such stockholder, if demanded; the charges and expenses of the ap- praisers shall be paid by the corporation. When the corporation shall have paid the amount of such appraisal, as directed by the court, such stockholders shall cease to have any interest in such stock and in the corporate property, of such corporation and such stock may be held or disposed of by such corporation.^ 'L. 1892, ch. 688, sec. 33, as amended by L. 1901, cli. 130. 168 PowEES AND Liabilities. § 106. Transfer of assets. — How far a court of this state will enjoin a transfer of the, assets of a foreign corporation to another foreign corporation will be considered hereafter.* It has been held that a judgment-creditor of a foreign- corporation may follow its assets turned over to a new domestic corporation which took over all property and assumed all obligations ; that the judgment against the foreign corporation is conclusive against the new corporation and that a suit in equity to reach such assets may be founded on such judgment^ It is a waste of corporate funds for the directors of an insurance corporation of this state to buy with its funds the interest of the incorporators of a foreign non-stock insurance cor- poration, such interest being only the holding of oflBce of directors, which such incorporators resigned in favor of the directors of the domestic corporation. The receiver of the domestic corporation may recover such waste from its directors.^ Section 2719 of the Code of Civil Procedure provides that the surrogate may authorize the executor or administrator of the estate of a decedent to compro- mise or compound a debt or claim on application and for good and sufficient cause shown ; but that any party interested in the final settlement of the estate may show on such settlement that such debt or claim was fraudulently . or negligently compromised or com- pounded. It has been held that such provision empowers the sur- rogate to authorize a transfer of the assets of an estate to a foreign corporation to be formed to carry on the business of the decedent, in consideration of stock of that corporation, where a person in possession of such assets claims to hold them as an alleged surviving partner of the decedent, and has sued the executors for a partner- ship accounting, although the surrogate could not authorize a trans- fer to a foreign corporation of all or a part of the estate of the dece- dent, if the executors had obtained absolute possession and title of it, as that would not be a compromise of a claim.' 'See sec. 248, infra. 'Clokey v. International K. C. & G. S. Co., 28 Misc. 326; s. c, 59 N. Y. Supp. 878. •Gilbert v. Finch, 173 N. Y. 455. 'Matter of Gilman, 82 App. Div. 186; s. c, 81 N. Y. Supp. 713. Peohibitoey Statutes. 169 CHAPTER XIV. Peohibitoey Statutes, § 107. Prohibited acts. — There are various statutes of this state ■which prohibit the doing of specified acts by foreign corporations. Penal statutes^ and those forbidding monopolies^ hereafter men- tioned are examples. Prohibited acts are not to be confounded with acts of a corporation which are uUrci vires. A contract which is malum in se or malum prohibitum, that is immoral in itself or forbidden by statute, is illegal and incapable of being the founda- tion of an action, and the law will not recognize or enforce it, but applying the maxim' ex facto illicito non oritur actio will leave the parties as it finds them ; but when an act of a corporation is spoken of as ultra vires, it is not intended that it is unlawful or even such as the corporation can not perform, but merely one which is not within the powers conferred upon the corporation by its charter.' A contract made in the home state may be prohibited by a statute of that state, and a contract made in this state may be prohibited by such a statute of the home state or by a statute of this state, and in any such case, the statute not being the one under which the cor- poration was organized, the contract is malum, prohibitum. It has just been said that such a contract is illegal and incapable of being the foundation of an action, and such was the language of the Court of Appeals in 1875. It seems, however, that there are some excep- tions, which will be considered beloM'. Section 1779 of the Code of Civil Procedure provides that a foreign corporation cannot main- tain an action founded upon an act or upon a liability or obligation, express or implied, arising out of or made or entered into in consid- eration of an act which the- laws of this state forbid a corporation or association of individuals to do without express authority of law. § 108. Banking powers — Section 19 of the General Corporation Law provides that no corporation except a corporation formed 'See sees. 114-119, infra. 'See see. 113, infra. "See sec. 147, infra. 170 PowEES AND Liabilities. under or subject to the banking laws stall by any implication of ( ? or) construction be deemed to possess the power of carrying on the business of discounting bills, notes or other evidences of debt, of receiving deposits, or buying or selling bills of exchange, or shall issue bills, notes or other evidences of debt for circulation as money/ § 109. Trust company powers. Power to loan money. — In 1904 these words were added to section 156 of the Banking Law: " Xo foreign corporation shall have or exercise in this state any of the powers specified in subdivisions one, two, four, five, six, seven, eight, ten and eleven, nor have or maintain an office in this state for the transaction of, or transact directly or' indirectly, any such or similar business." Sectien 156 enumerates the corporate powers of domestic trust companies. It contains eleven subdivisions. There seems to be little doubt but that the intention of the legisla- ture in the amendment quoted was to refer to foreign trust compa- nies only, although the language embraces all foreign corporations. Until the courts decide it, the question must be considered open whether a foreign trading or manufacturing corporation is not pro- hibited from exercising the powers specified in the subdivisions stated, which powers are : To act as the fiscal or transfer agent of any state, municipality, body politic or corporation, and to act as agent of any corporation, domestic or foreign, for any lawful pur- pose ; to receive deposits of trust moneys, securities and other per- sonal property from any person or corporation and to loan money on real or personal securities ; to act as trustee under any mortgage or bonds issued by any municipality, body politic or corporation, or accept and execute any other municipal or corporate trust; to accept trusts from and to execute trusts for married women in re- spect to their separate property, or to be their agent in the manage- ment of such property or to transact any business in relation thereto ; to act under the order or appointment of any court of record as guardian, receiver or trustee of the estate of any minor, the annual income of which shall not be less than one liundred dol- *L. 1892, ch. 687, sec. 19, printed in the appendix. Peohibitoby Statutes. 171 lars, and as depository of any moneys paid into court whether- for the benefit of any such minor or other person, corporation or party ; to take, accept and execute any and all legal trusts, duties and powers in regard to the holding, management and disposition of any estate, real or personal, and the rents and profits thereof, or the sale thereof, as may be granted or confided to it by any court of record, or by any person, corporation, municipality or other au- thority; to take, accept and execute any and all such trusts and powers of whatever nature or description as may be conferred upon or intrusted or committed to it by any person or persons or any body politic, corporation or other authority, by grant, assignment, transfer, devise, bequest or otherwise, or which may be intrusted or committed or transferred to it or vested in it by order of any court of record or any surrogate ; to be appointed and to accept the ap- pointment of executor of and trustee under the last will and testa- ment, or administrator with or without the will annexed, of the es- tate of any deceased person, and to be appointed and to act as the committee of the estate of lunatics, idiots, persons of unsound mind and habitual drunkards; and, lastly, to exercise the powers and possess the privileges conferred on banks and individual bankers to take, receive, reserve and charge on loans, discounts, notes, bills of exchange and evidences of debt interest at the rate of six per centum per annum, and to receive or contract to receive and collect any sum to be agreed upon in writing by the parties to the transac- tion as compensation for making advances of money upon ware- house receipts, bills of lading, certificates of stock, certificates of deposit, bills of exchange, bonds or other negotiable instruments pledged as collateral security for such repayment.^ § 110. Construction of prohibitory statutes. — As above stated a contract which is malum prohibitum that is forbidden by statute, is illegal and incapable of being the foundation of an action and the law will not recognize or enforce it. A prohibitory statute, how- ever, may itself point out the consequences of its violation, and if on a consideration of the whole statute it appears that the legisla- "L. 1892, ch. 689, sec. 156, printed in the appendix. 172 PowEES AND Liabilities. ture intended to define such consequences, and to exclude any other penalty or forfeiture than such as is declared in the statute itself, no other will be enforced, and if an action can be maintained on the transaction of which the prohibited transaction was a part without sanctioning the illegality, such action will be entertained.^ The Kevised Statutes prohibited a body corporate from keeping an office for the purpose of deposit or discount without express authority of law.^ They also prohibited a foreign corporation maintaining an action founded upon an act or upon a liability or obligation, ex- press or implied, arising out of or made and entered into in consid- eration of an act which the laws of this state forbid a corporation or association of individuals to do without express authority of law.' It was held that a foreign corporation keeping here an office for the purpose of discount or deposit without express authority of law can- not sue for money loaned here or on the note or collateral given as security therefor.' It was held also that a contract made here by such a corporation is not void if it is not connected with such pro- hibited banking business;^" also that a person exchanging securi- ties with a foreign corporation doing business here for securities issued by it in violation of the statute cannot have the securities he gave annulled unless he returns the securities he received or their proceeds if sold." The Insurance Law provides that when a state shall impose an obligation on certain insurance corporations of this state the like obligation is imposed on similar corporations of that state. ^^ It is a revision of a statute of 1883,^' under which it was held that the obligations referred to are those to the state in the way 'Pratt V. Short, 79 N. Y. 437 ; Hallett v. New England R. G. Co., 105 Fed. 217, U. S. Cir. Ct., D. Mass. , •1 R. S. 712, sec. 6; revised in the banking law of 1882, L. 1882, ch. 409, sec. 302; revised in the banking law now in force, L. 1892, ch. 689, sec. 87. '2 R. S. 457, sec. 2, revised in the Code of Civil Procedure, sec. 1779, printed in the appendix. »Xew Hope D. B. Co. v. Poughkeepsie B. Co., 25 Wend. 648. '"Bard v. Poole, 12 N. Y. 495. "Mumford v. American L. I. & T. Co., 4 N. Y. 463. See Dickinson v. Continental Trust Co., 23 Misc. 489; s. c, 52 N. Y. Supp. 672. >=L. 1892, eh. 690, sec. 204. '»L. 1883, ch. 175, sec. 10. Pkohibitoey Statutes. 173 of license fees and other conditions of doing business in the state and do not cover a prohibition by such other state against insuring persons over sixty years old imposed on like corporations of this state doing business there." The Insurance Law allows a domes- tic insurance corporation to invest its funds in mortgages on im- proved unincumbered real property worth fifty per cent more than the loan.i^ In 1900 the Court of Appeals held that such a mort- gage on incumbered real property was valid, if the corporation's ignorance of the incumbrance was due to an honest mistake of fact." It has been held that a foreign shipping corporation cannot convey its vessels to individual United States citizens in trust to operate the same for the benefit of the corporation so as to have the same registered as United States vessels, as such trust is void because a fraudulent evasion of the United States statute prohibiting vessels , of a foreign corporation having United States registry." § 111. Prohibition against doing business. — The most import- ant prohibitory statute of this state applying to foreign corporations is section 15 of the General Corporation Law, which provides that no foreign stock corporation, other than a monied corporation, shall do business in this state without having first procured from the sec- retary of state a certificate of authority so to do. This statute has been considered already. The acts of a foreign corporation doing business in this state without procuring the certificate required by section 15 are not void.-*' There are many decisions on similar statutes in this and other states. There is a dictum of the Court of Appeals made in 1868 stating that a policy issued here by a foreign insurance corporation contrary to the act of 1849,^^ which prohibits it doing business here until it acquires a capital of one hundred thousand dollars and imposes a penalty of five hundred dollars for "Griesa v. Massachusetts Ben. Asso., 15 N. Y. Supp. 71, affirmed on opinion below, 133 N. Y. 619. ">L. 1892, ch. 690, sec. 16 and 13. "Washington L. Ins. Co. v. Clason, 162 N. Y. 305. "Ogden V. Murray, 39 N. Y. 202. "See sec. 26, supra. "L. 1849, eh. 308; the opinion specifies the act of 1849 and this seems to be the chapter referred to. 174 PowEES AND Liabilities. each violation of the statute, is void.^" In 1877 it was held that an agreement by an insolvent domestic fire insurance corporation to re-insurance its policies in a foreign corporation doing business here without complying with a statute of this state permitting it so to do, will not be annulled after it is completely performed, although la court of this state would not enforce it as long as it remained executory. ^^ The Court of Appeals has held recently that a fire insurance broker, who contracts to insure premises by a good policy, may be sued for the damages suffered by fire in case he gives a policy in a foreign corporation not authorized to do business in !New York where the contract was made, nor in Pennsylvania where the insured premises were situated, as required by a statute of the former state which prescribe in the case of insurance corporations a pecuniary fine for a breach of the statute, and as required also by a statute of the latter state, because such policy is void.^^ § 112. Prohibition against doing business. Federal decisions. — It has been held by the Circuit Court of the United States in In- diana that a state statute prohibiting a foreign corporation enforc- ing in any court of that state any contract made by its agent before such agent shall deposit his authority to act as such agent and to be served with process against the corporation as a condition of enter- ing on the duties of his agency does, not render such a contract void, nor prohibit suit thereon in the federal court in that state.^^ The same court in Tennessee has held that, if a state statute declares void a contract made by a foreign corporation, doing business there without having complied with prescribed conditions, such contract may not be enforced in a federal court, but if the statute merely prohibits suit thereon in the state courts, it is an administrative pro- vision and not binding on the federal court ;" and that if a state ''"Hope M. L. Ins. Co. v. Perkins, 38 N. Y. 404. "Casserly v. Manners, 9 Hun, 695. ^'Landusky v. Beirne, 80 App. Div. 272; s. c, 80 N. Y. Supp. 238, affirmed on opinion below, 178 N. Y. 551. "'Sullivan v. Beck, 79 Fed. 200. "^Eastern B. & L. Asso. v. Bedford, 88 Fed. 7, U. S. Cir. Ct., W. D. Tcnn. W. D., modified and affirmed without passing on this question", 181 U. S. 227 ; Blodgett v. Lanyon Zine Co., 120 Fed. 893, U. S. Cir. Ct. of Ap., 8th Cir. Prohibitoey Statutes. 175 statute imposes a fine on a foreign corporation for doing business in the state before complying witii certain prescribed conditions, no further penalty will be implied, and a contract made in the state by a foreign corporation which has not complied with the condi- tions, is not invalid.^^ The same court, in Colorado, has held that the failure of a foreign corporation to comply with a state statute, requiring it to file a copy of its charter "within thirty days after commencing business in that state, does not prevent it taking a mortgage on land in that state, if the statute contains nothing to indicate that compliance therewith is a condition to continuing business, but provides a penalty against the officers of the corpora- tion.^" It has been held by the Supreme Court of the United States that the prohibition in the Colorado constitution and statutes against a foreign corporation doing business there, until it has there a place of business, and an agent upon whom to serve process, and files a copy of its charter, and makes its officers, agents and stock- holders personally liable on its contracts while it is in default, does not render void a deed of real property to the corporation, as the statute does not so provide, but taking such deed violates the laws of the state." It has befen held by the Circuit Court of the United States in Montana that if the right of a foreign corporation, not complying with a state statute imposing conditions on its doing business in the state, to foreclose a mortgage, is declared by a court of competent' jurisdiction, because the parties thereto made no such objection, the implied right of the corporation to buy in the property at the foreclosure sale can not be raised by a third party f^ and by the same court in Massachusetts, that a .'New Hampshire ■ statute, prohibiting the issuing of stock for less than its par value ''"Jarvis-Conklin M. T. Co. v. Willhoit, 84 Fed. 514, U. S. Cir. Ct., E. D. Tenu. ""Northwestern M. L. Ins. Co. v. Overholt, 4 Dillon, 287; s. o., 18 Fed. Cases, 403, No. 10338, U. S. Cir. Ct., D. Colo. ""Fritts V. Palmer, 132 U. S. 282. A state prohibition against a foreign corporation holding real property does not render void a deed to the cor- poration, but the title passes subject to escheat by the state. Hickery F. Oil Co. V. Buffalo, N. Y. & P. R. Co., 32 Fed. 22, U. S. Cir. Ct., W. D. Penn.; Seymour v. Slide & S. Gold Mines, 153 U. S. 523. "Black V. Caldwell,- 83 Fed. 880, U. S. Cir. Ct., D. Mon. 176 Powers and Liabilities. and declaring void certificates for stock so issued, is not so far binding on a stockholder resident of another state, as to preclude him from recovering back what he has paid after his certificate has been declared void by court.^' It has been held by the Circuit Court of the United States in Alabama, that under the constitu- tional prohibition against foreign corporations doing business in that state without having an ofiice and agent in the state, it is doubt- ful whether a trust company of this state, accepting here a trustee- ship of a railroad trust deed on property in Alabama, is doing busi- ness there, and anyway such contract is voidable and not void, and the trust company may foreclose it in Alabama.^" The constitution and statutes of Alabama provide that no foreign corporation shall do any business in that state without having a place of business and an agent there and prescribe a money penalty. The Supreme Court of the United States has held that the construction placed thereon by the court of last resort of that state that acts done in. violation thereof are absolutely void is binding on" a federal court in that state and defeats the foreclosure of a mortgage taken by a direlict corporation.'' In cases where a state statute prescribing conditions upon doing business in that state by a foreign corporation declares that the contracts made there by a corporation in default shall be void, there is no doubt of their invalidity.'^ In cases where the state statute prohibits the doing of business without prescribing any penalty, such contracts are void, although according to the authorities in some jurisdictions its promissory notes in the hands of bona fide holders may be enforced. It has been held under a statute of Oregon, prohibiting a foreign corpora- tion doing business there until it files a power of attorney appoint- ing a person upon whom process can be served, but not specifying "Hallett V. New England E. G. Co., 105 Fed. 217. "American L. & T. Co. v. East & W. R. Co., 37 Fed. 242, U. S. Clr. Ct., N. D. Ala. S. D. "'Chattanooga N. B. & L. Asso. v. Denson, 189 U. S. 408. "'Diamond Glue Co. v. United States Glue Co., 103 Fed. 838, affirmed 187 U. S. 611; Eastern B. & L. Asso. v. Bedford, 88 Fed. 7, U. S. Cir. Ct., W. D. Tenn. W. D., modified and afiarmed without passing on this question, 181 U. S. 227. Pkohibitoey Statutes. 177 any penalty, that the contracts of such a corporation not complying -with such statute are illegal and void, and may not be proved by such corporation in bankruptcy proceedings against the other party to the contract, although, by so contracting, he recognized the right of the corporation so to do business,^^ but that such statute did not intend to prevent the corporation suing in the state court, and that a state could not prevent it suing in the federal court. ^* And it has been held by the United States Circuit Court of Appeals for the third circuit that a corporation of one state doing business in an- other state without complying vs^ith the conditions of doing business there prescribed by a statute of that state, can not recover on a bond taken as security for the conduct of its agent there, as such bond is void.^^ But the United States Circuit Court of Appeals, for the sixth circuit, has held that a statute of Tennessee, requiring a for- eign corporation to record its charter before doing business in the state, and making it unlaveful for it to do or to attempt to do busi- ness or to own or acquire property in the state, until compliance with the 'Statute, does not invalidate a promissory note in the hands of a hona fide holder, taken and negotiated by a foreign corpora- tion which has not complied with the statute, and that a trust deed securing the note follows the debt and is valid f^ and that it does not render void a promissory note in the hands of a hona fide holder, purporting on its face to have been made in Missouri, and to be payable there, although executed in Tennessee, and secured by mortgage on land in Tennessee, and that the note being valid the mortgage is also valid." "'In re Comstoek, 3 Sawyer, 218; s. c, 6 Fed. Cases, 244, No. 3078, U. S. Dis. Ct., D. Oregon; Semple v. Bank of B. C, 5 Sawyer, 88; a. c, 21 Fed. Cases, 1063, No. 12659, U. S. Cir. Ct., D. Oregon. "Oregon Nat. Bank v. Traver, 7 Fed. 146, U. S. Cir. Ct., D. Oregon. •"McCanna & F. Co. v. Citizens T. & S. Co. of Phila., 24 C. C. A. 11; s. e., 76 Fed. 420. »»Lauter v. Jarvis-Conklin M. T. Co., 29 C. C. A. 473 ; s. c, 85 Fed. 894. "Hamilton v. Fowler, 40 C. C. A. 47; s. c, 99 Fed. 18, application denied without opinion, 176 U. S. 685. 12 178 Powers and Liabilities. CHAPTER XV. Monopolies. § 113. Anti-monopoly statutes. — Section 7 of the Stock Corpo- ration Law provides that no domestic stock corporation and no for- eign corporation doing business in this state shall combine with any other corporation or person for the creation of a monopoly or the unlawful restraint of trade or for the prevention of competition in any necessary of life.-' There ia also a statute providing for the punishment of pools, trusts and conspiracies to control rates of transportation, which by its own terms applies to foreign corpora- tions ;^ and another statute to prevent monopolies in articles or com- modities of common use, and to prohibit restraints of trade and commerce, providing penalties for violations of its provisions, and procedure to enable the attorney-general to secure testimony in re- lation thereto,' which applies to foreign corporations, as well as to domestic corporations and natural persons. The latter statute has been held to be constitutional.^ The Penal Code^ provides that if two or more persons conspire to commit any act injurious to trade or commerce, each of them is guilty of a misdemeanor. Combi- nations to advance unlawfully the price of articles of food are con- spiracies.^ x\n action against a vendor of an entire business in this state for breach of his covenant not to engage in a similar business within a limited territory may be maintained in this state by a foreign corporation.' It has been held that a foreign insurance cor- »L. 189-2, ch. 688, sec. 7, as amended by L. 1897, ch. 384, printed in the appendix. This section does not apply to monied corporations. L. 1892, ch. 688, sec. 1. 'L. 1899, ch. 727, printed in the appendix. 'L. 1899, ch. 690, printed in the appendix. •Matter of Davies, 168 N. Y. 89. 'Penal Code, sec. 168, printed in the appendix. 'Leonard v. Poole, 114 N. Y. 371; People v. North R. S. R. Co., 121 N. Y. 682, affirming 54 Hun, 354; s. c, 7 N. Y. Supp. 406, affirming 3 N. Y. Supp. 401. 'Diamond Match Co. v. Roeber, 106 N. Y. 473. Monopolies. 179 poration doing business in ITebraska, after compliance with statu- tory conditions to do so, and the payment of large sums for state licenses, and for agencies and advertising, may set up that subse- quent statutes against monopolies are contrary to the liberty of contract clause of the federal constitution,^ although such a corpo- ration does business in that state by sufferance only and may be excluded at any time.' A Texas statute forbidding a corporation of another state, licensed to do business in that state, to continue to do business there, because of its breach of a statute of that state against trusts, is yalid." '5th and 14th amendraents. "Niagara F. Ins. Co. v. Cornell, 110 Fed. 816, U. S. Cir, Ct., D. Neb. ^"Waters P. 0. Co. v. Texas, 177 U. S. 28. 180 Powers and Liabilities, CHAPTER XVI. Criminal Laws. § 114. Prospectus. Stock. Bond. Instrument. Document. Name — The Penal Code of this state^ provides that it is no defence to a prosecution for a violation of the provisions of chapter 11 of that code, that the corporation is a foreign corporation, if it carries on business or keeps an office therefor in this state. Chapter 11 relates to fraudulent insolvencies by corporations and other frauds in their management. It provides that a person, who, without au- thority, subscribes the name of another to or inserts the name of another in any prospectus, circular, advertisement or announcement of any corporation, existing or intended to be formed, with intent to permit the same to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member or promoter of such corporation, or signs the name of a fictitious person, to any subscription for or agreement to take stock, or signs to such subscription or agreement the name of any person, knowing that he does not intend to comply therewith, is guilty of a misdemeanor.^ It prohibits an officer, agent or other person, in the service of a corporation, to sell, pledge or issue, any illegal, fraudulent or fictitious certificate of stock, bond or evidence of debt.' It prohibits an officer, agent or clerk of a corporation, or of persons proposing to organize one, or to increase the capital stock of one, exhibiting to the public authorities of the state a false docu- ment with intent to deceive such authorities.* Chapter 11 also provides that any person or corporation, who acts as agent or repre- sentative in this state of a foreign corporation, other than a monied corporation, with the words " trust," " bank," " banking," " insur- ance," " assurance," " indemnity," " guarantee," " guaranty," " savings," " investment," " loan," " benefit," or any other words 'Penal Code, sec. 614, printed in the appendix. "Id. sec. 590, printed in the appendix. 'Id. sec. 591, printed in the appendix. *Id. sec. 592, printed in the appendix. Ceiminal Laws. Ig]^ or terms indicating, representing or holding out such company to be a monied corporation as a part of its name or corporate title, or who, m connection with such corporation or otherwise, shall put forth any sign containing said name, or who shall advertise or pub- lish the said company as doing business in this state, directly or in- directly, through agents or otherwise, while such company shall not be authorized under a certificate procured from the secretary of state pursuant to section fifteen of the General Corporation Law to do business in this state, is guilty of a misdemeanor.^ It provides also that any person, association or corporation, other than a monied corporation, who shall within this state directly or indirectly, or through agents or representatives, transact business under or in anywise use a corporate name or a corporate title with the said words as a part of such name or title is guilty of a misdemeanor.* § 115. Dividends. Stock. Waste. Books. Injunction. Proxy. — ^Chapter 11 of the Penal Code provides also that a director who concurs in any vote or act by which it is intended to make a divi- dend except from surplus profits, to divide, withdraw or pay to stockholders any part of the capital stock, or to re- duce the capital stock without the consent of the legis- lature, or who discounts or receives any note in pay- ment of capital stock, or with intent to allow a stockholder to withdraw anj part of the money paid by him for his stock, or to apply any portion of the funds of the corporation except surplus profits to the purchase of its own stock, is guilty of a misdemeanor.'' It provides that an officer or* director who issues, participates in issuing, or concurs in a vote to issue any increase of capital stock beyond the amount authorized by law, or sells or agrees to sell any share of stock, unless at the time he is the actual owner thereof, is guilty of a misdemeanor.^ It provides that a director, officer, agent or employe of a corporation, who knowingly receives any of its property, otherwise than in payment of a just demand, and with 'Id. sec. 593, printed in the appendix. 'Id. sec. 608, priijted in the appendix. 'Id. sec. 594, printed in the appendix. 'Id. sec. 610, printed in the appendix. 182 Powers and Liabilities. intent to defraud omits to make an entry thereof in its books and ac- counts, or concurs in omitting to make any material entry thereof, or knowingly concurs in making or publishing any false written re- port, exhibit or statement of its affairs, or having the custody of its books, neglects to make any proper entry in the stock book as re- quired by law, or to exhibit the same to any person entitled by law to inspect it, or if a notice of application for an injunction against the corporation is served on him, omits to disclose it to the direct- ors, ofificers and managers, or refuses or neglects to make any report or statement lawfully required by a public officer, is guilty of a mis- demeanor.' It provides al?o that any person, who being entitled to vote at any meeting of the stockholders or bondholders, sells his vote, or who issues a proj^y to vote to any person for any sum of money or thing of value, except as authorized by law, or who acts as an inspector of election at any such meeting and violates his oath as inspector, or is guilty of any dishonest or corrupt practice as in- spector, is guilty of a misdemeanor." § 116. Insurance. Perjury. Bill of lading. — Provisions of the Penal Code, not contained in chapter 11, and so not made applicable to foreign corporations by the above mentioned provision, apply for the most part to such corporations by implication, as the enforce- ment of its penal laws is a part of the public policy of the state, whether the crime is committed by an individual or by a corporation, domestic or foreign. A statute of 1889, now contained in the Penal Code in part," provided that no life insurance corporation doing business in this state or its agent shall allow any rebate of premium as an inducement to any person to insure, and that a person violat- ing the statute shall be guilty of a misdemeanor. It was held that a foreign insurance corporation and its agents are bound by such statute, as when such corporation comes into this state by comity to do its business here through its agents, it must obey our laws and "Id. sec. 611, printed in the appendix. "Id. sec. 613, printed in the appendix. "L. 1889, ch. 282, now revised in the insurance law, .L. 1892, ch. 690, see. 89, and Penal Code, sec. 577b. Ceiminal Laws. 183 conform to our public policy.^ Section 96 of the Penal Code pro- vides that a person who swears that any affidavit or other writing by him subscribed is true, on any occasion in which an oath is required by law, or is necessary for the prosecution or defense of a private right, or for the ends of public justice, or may lawfully be adminis- tered, and who, on such occasion, willfully and knowingly deposes falsely, in any material matter, or states in his affidavit any ma- terial matter to be true which he knows to be false, is guilty of per- jury. This section applies not only to an oath required by a law of this state but also to one required by a law of another state, when- ever under the general principle of comity which exists between the states, such law of the other state would be considered and given effect in this state. So an officer of a foreign corporation swear- ing falsely in this state before a notary public in an affidavit re- quired by a statute of the home state, as to the amount of capital stock paid in, is guilty of perjury, as such statute of the other state is not repugnant to but in consonance with our laws and would be given full force and effect in our courts. ^^ Under section 633 of the Penal Code making it a crime for an officer or agent of a trans- portation corporation to deliver goods without taking up the bill of lading therefor, a civil action for damages may be maintained pro- vided the omission to take up the bill of lading is the proximate cause of the injury." § 117. Forgery. — The Penal Code provides that a person is guilty of forgery in the first degree, who with intent to defraud, forges a certificate of stock, bond or other writing, bank note, bill of exchange, draft, check, certificate of deposit, or other obligation or evidence of debt, issued or purporting to be issued, by any body corporate, existing under the laws of this state, or of the United States, or of any other state, government or country, declaring or" purporting to declare, any right, title or interest of any person in any portion of the capital stock or property of such a body corpo- rate, or promising or purporting to promise or agree to the pay- "^People V. Formosa, 131 N. Y. 478. "People V. Martin, 175 N. Y. 315. "Mairs v. Baltimore & O. R. R. Co., 175 N. Y. 409. 184 PowEES AND Liabilities. ment of money, or the performance of any act, duty or obligation.*^ And that a person is guilty of forgery in the second degree, who, -with intent to defraud, forges the seal of any body corporate, cre- ated by or existing under the laws of this state, or of the United States, or of any other state or any territory of the United States, or of any other sitate, government or country, or forges an entry made in any book of records or accounts kept by a corporation doing business within the state, or in any account kept by sucb a corpo- ration, whereby any pecuniary obligation, claim or credit is or pur- ports to be created, increased, diminished, discharged or in any manner affected." And that a person is guilty of forgery in the third degree, who, being an officer or in the employment of a corpo- ration, falsifies or unlawfully and corruptly, alters, erases, oblit- erates or destroys any accounts, books of accounts, records or other writing, belonging to or appertaining to the business of the corpo- ration" or, who, with, intent to defraud or conceal any larceny or misappropriation by any person of any money or property, either alters, erases, obliterates, or destroys an accoimt, book of accounts, record or writing, belonging to or appertaining to the business of a corporation, or makes a false entry in any such account or book of accounts, or willfully omits to make true entry of any material particular in any such account or book of accounts, made, written or kept by him or under his direction.** The Penal Code provides,, also, that an officer, agent or other person employed by any corpo- ration existing under the laws of this state, or any other state or territory of the United States, or of any foreign government, who willfully and with a design to defraud, sells, pledges or issues, a false, forged or fraudulent paper, writing or instrument, being a scrip or certificate of the ownership or transfer of stock of such corporation, or a bond or other evidence of debt thereof, is guilty of forgery in the third degree." The Penal Code provides, also, that the false making owfcrging of an instrument or writing, pur- 'Tenal Code, sec. 509, printed in the appendix. '"Id. sec. 511, printed in the appendix. ''Id. sec. 514, printed in the appendix. "Id. sec. 515, printed in the appendix. "Id. sec. 518, printed in the appendix. Cbiminal Laws. 185 porting to have been issued by or in behalf of a corporation, and bearing the pretended signature of any person therein falsely indi- cated as an agent or officer of such corporation, is forgery in the same degree, as if that person were in truth such officer or agent.^" § 118. Employes. Special Business.— The Penal Code pro- vides that a corporation not paying its employes in cash, weekly, shall be guilty of a misdemeanor.^^ It prohibits any person on behalf of a corporation to coerce an employe not to become a mem- ber of a labor union ;^^ and prohibits the bribery of representatives of labor organizations in the discharge of their duties as such.^* It prohibits a corporation keeping a gaming or betting establish- ment.^* It regulates the use of trading stamps by persons, firms and corporations,^^ and regulates various businesses and business operations not peculiar to foreign corporations. § 119. Punishment. Procedure. — The Penal Code provides that in all cases where a corporation is convicted of an offence for the commission of which a natural person would be punishable with imprisonment as for a felony, such corporation is punishable by a fine of not more than five thousand dollars. ^^ The Code of Criminal Procedure provides that upon an information against a corporation, the magistrate must issue a summons requiring it to appear before him; that the summons shall be in a prescribed form; that it shall be served; and that at the time appointed in the summons the magistrate shall proceed to investigate the charge in the same manner as in the case of a natural person, and that after hearing the proofs, he shall certify that there is not sufficient cause to believe the corporation guilty, or shall return the depo- sitions to the clerk of a court having power to inquire into the offence by the intervention of a grand jury^' It provides also that ''"Id. ^ec. 519, printed in the appendix. "'Id. sec. 384-1, printed in the appendix. "''Id. sec. 171-A, printed in the appendix. "'Id. sec. 447-F, printed in the appendix. "*Id. see. 343, printed in the appendix. "°Id. sec. 384-Q, printed in the appendix. "Id. sec. 13, printed in the appendix. "'Code Crim. Pro. sees. 675 to 679, printed in the appendix. 186 PowEES AND Liabilities. the grand jury may proceed thereon as in the ease of a natural person, and that when an indictment is filed against a corporation it must be arraigned thereon after the service on it of a summons to answer or its voluntary appearance.^ It provides also that a plea of guilty may be put in by counsel f^ and that when a fine is imposed on a corporation on conviction, it may be collected by virtue of the order imposing it, by the sheriff of the county, out' of its real and personal property, in the same manner as upon an execution in a civil action.'" ^'Id. sees. 680-1, printed in the appendix. ^Id. sec. 335, printed in the appendix. "Id. sec. 682, printed in the appendix. Liability of Stockholdees. 187 CHAPTER XVII. INABILITY OF StOOKHOLDEBS AND PuOMOTEKS FOB AsSETS DI- VERTED TO Them. § 120. Stockholders.— Prior to the Code of Civil Procedure, it v^as held that on a plain principle of equity, a creditor of a foreign corporation whose charter has expired, the same as a creditor of a domestic corporation, may sue a stockholder for assets of the corporation divided among the stockholders before all its debts have been paid, although such distribution was made in good faith, and it is not necessary to bring the action on behalf of all creditors, or to join all the stockholders.^ As to foreign corporations this, seems to be the law still although it is stated in the revisers' note to section 2463 of the Code of Civil Procedure that the decision sustaining it is overruled.^ A creditor's bill against a stockholder of a domestic corporation will not lie except as prescribed in sections 1784 and 1785 of the Code of Civil Pro- cedure,^ regulating an action by a creditor for the sequestration of the property of a corporation, and an action by the attorney- geaieral, or a creditor on his default, to dissolve the corporation ;* and there are restrictions on the granting of injunctionsi and the appointment of receivers in such actions, which restrictions are applicable to a foreign corporation doing business here or having here a business agency or a fiscal agency or an agency for the transfer of its stock.' Applying such restrictions to a foreign cor- poration does not necessarily apply the statutory cause of action i for sequestration to it. It is the policy of this state to protect ' resident creditors of foreign corporations, rather than to preserve equality among creditors which is its policy in the case of domestic corporations." It may be that it was the intention of the revisers 'Bartlett v. Drew, 57 N. Y. 587, affirming 60 Barb. 648; Hastings v. Drew, 76 N. Y. 9. 'Throop's Code Civil Pro. sec. 2463, note. 'Revising 2 E. S. 463, sec. 36 et seq. 'Morgan v. New York & A. E. E. Co., 10 Paige, 290. "Code Civil Pro. sec. 1809, 1810, 1812, printed in the appendix. • •See sec. 259, infr/i. 188 PowEES AND Liabilities. to extend the latter policy to the creditora of foreign corporations doing business here. They did provide that proceedings supple- mentary to execution which result in preferences will not lie against a domestic corporation or a foreign corporation doing business here.' But a creditor's bill having for its object the ob- taining of a preference in the assets of a foreign corporation doing business here is nowhere prohibited, unless applying the restric- tions aforesaid to it apply also the statutory action for sequestra- tion to it, which statutory action has been held to be exclusive of creditor's bills to reach assets;* or unless the prohibition against the appointment of a receiver prevents the prosecution of a credi- tor's suit. It has been held, however, that the statutory action for sequestration does not apply to a foreign corporation,' and that a judgment creditor of a foreign corporation may sue a stock- holder indebted to the corporation for unpaid subscription for stock, it not appearing whether or not the corporation was doing business here." Section 1780 of the Code of Civil Procedure pro- vides that an action against a foreign corporation may be main- tained by a resident of the state or by a domestic corporation for any cause of action, and in referring to that provision, the revisers of the code in their notes, made in 1880, state that some very difficult questions are presented with respect to the power of the courts of this state to interfere with the internal management of foreign corporations upon the application of a resident, and that the law upon that subject is as yet unsettled, and as it is governed by principles, the application of which should not be embarrassed by mere remedial legislation, no attempt has been in the provision referred to to regulate it." It may be inferred from this state- ment, that the revisers did not intend to regulate creditors' bills by resident stockholders of foreign corporations, doing business here or not doing business here, to reach assets, but to leave the matter where it was before the Code of Civil Procedure was en- 'Code Civil Pro. sec. '2403. See sec. 234, infra. "Morgan v. New Yorlt & A. R. R. Co., supra. 'See sec. 241, infra. •"Persch v. Simmons, 3 N. Y. Supp. 783, following Bartlett v. Drew, supra. ^^Throop's Code Civil Pro. sec. 1780, note. Liability of Stockholdees. 189 acted. It has. been held that a judgment creditor of an insolvent bank of New Jersey may follow in a court of this state the assets of the bank in the possession of its principal stockholder, if the assets and the stockholder are here.^^ § 121. Promoters. — It has been held by the Appellate Division of the Supreme Court that a stoekholder of a foreign corporation, who was not a party tO' the agreement between promoters and subscribers for the purchase of the original issue of stock, cannot sue the promoters to refund to the corporation stock issued in excess of the amount necessary for the subscribers and turned over to the promoters as presumed secret profits.''* "^Tinkham v. Borst, 31 Barb. 407. "Hutchinson v. Simpson, 92 App. Div. 382; s. a., 87 N. Y. Supp. 369. 190 PowEES AND Liabilities. OHAPTEE XVIII. Stockholbbrs' Liability for Subscription's, Calls aitd Assessments. § 122. Statute liability. — Section 54 of the Stock Corporation Law provides that every holder of capital stock not fully paid shall be personally liable to creditors to an amount equal to the amount unpaid on the stock held by him for debts of the corporation con- tracted while such stock was held by him, and that stockholders shall be personally liable to laborers, servants and employes other than contractors. Section 55 provides that a preliminary judg-. ment and execution against the corporation shall be necessary and that there shall be ho liability for a debt not payable within two years from the time it was contracted, nor unless an action for its collection shall be brought against the corporation within two years after it shall become due, and that no action shall be brought against a former stockholder unless brought within two years after he shall have ceased to be such. Prior to 1901, section 54 pro vided for a liability in addition to the amount unpaid on the stock, and in that form it was held not to apply to a foreign corporation.'' Such ruling is applicable notwithstanding the amendment of 1901. Section 55 is a re-enactment of section 58 of the Stock Corporation Law of 1890, and that section was held not to apply to a foreign corporation.^ It has been held that a single judgment-creditor of a New Jersey corporation may not sue a single stockholder thereof, in a court of this state, to enforce his personal liability for cor- porate debts, under a statute of that state making stockholders liable to creditors up to the amount not paid on their stock, for their proportion of the sum necessary to pay the corporate debts, as the liability imposed on the stockholder is only to pay so much of the balance unpaid on his stock, as will be necessary to satisfy the debts, and to ascertain that amount the presencfe of all the stock- 'L. 1892, ch. 688, sec. 54, amended by L. 1901, ch. 354; Id. sec. 55; Piatt v. Larter, 94 Fed. 610, U. S. Cir. Ct., S. D. N. Y. 'L. 1890, ch. 564, sec. 58. Howarth v. Angle, 162 N. Y. 179. Liability of Stockholdees. 191 holders is necessary. It would be different if the action was brought on the stockholder's common law liability.^ It has been held under Maine statutes making subscribers to stock liable to creditors for unpaid subscriptions or subscriptions paid at an un- fair valuation, and also allowing the assignee of an insolvent cor- poration to sue therefor, that such assignee may bring such suit in the federal court in Massachusetts, as the cause of action in the assignee is original and not one which belonged to the cor- poration.* § 123. Contract liability. — The contract obligation assumed by subscribing to the stock of a corporation may he enforced in this state by any common law or equitable remedy in use here, irre- spective of a statute of the home state declaring a liability and prescribing a remedy unknown here. Section 18 Yl of the Code of Civil Procedure provides for an action by a judgment-creditor against the judgment-debtor and any other person to discover prop-, erty of the debtor and to apply it on the creditor's claim. It has no special reference to corporations, but is a general provision ap- plicable to all persons, taking the place of the former creditor's bill in equity. Under this section a judgment-creditor of a foreign corporation may sue a stockholder indebted to the corporation for unpaid subscription for stock.^ But the creditor cannot recover from a stockholder the difference between the par value of his stock and a smaller amount paid to the corporation by him therefor, or the proceeds of bonds issued to him gratuitously by the corporation at the time, the agreement between the corporation and the stock- holder being that the stock was full paid and the bonds a bonus. As the corporation is bound by its agreement and has no claim against the stockholder, the creditor cannot claim in its right, and as no assets of the corporation 'pass to the stockholder,. 'Griffith V. Mangam, 73 N. Y. 611. 'Dunn V. Howe, 96 Fed. 160, U. S. Cir. Ct., D. Masa. Terseh v. Simmons, 3 N. Y. Supp. 783, following Bartlett v. Drew, 57 N. Y. 588; Ohristensen v. Quintard, 23 N. Y. Daily Reg. 17, January 4, 1883. There ia a doubt whether such a creditor's bill will lie in the case of a foreign corporation doing business here, as it has been said that Bartlett V. Drew, is overruled See see. 120, supra. 19a FowEES AND Liabilities. there are no assets wrongfully transferred to be followed by the creditor.^ An American stockholder of an English corporation may be sued in assumpsit in a federal court in the United States to recover the amount of a call or assessment made by the corpora- tion and declared by an English statute to be a debt due from the stockholder to the corporation and a lien on the stock, although a forfeiture and sale of the defendant's stock is the only remedy provided by a statute of the state where the action is brought.^ An English corporation in liquidation cannot sue a stockholder here, in pursuance of a re-organization scheme, for unpaid sub- scription or calls, in excess of the amount due creditors, to be turned over to a new corporation for the benefit of assenting stock- holders.^ An action by a foreign corporation against a subscriber to its stock to recover big subscription, may be continued in the corporate name, after it becomes insolvent, and a receiver is ap- pointed, no decree of dissolution of the corporation, having been entered.^ After the appointment of a receiver by a federal court in the home state, a foreign corporation may maintain an action for calls in its own name, and after the appointment of an ancillary receiver in this state, the action may be continued in the same name, under the Code of Civil Procedure, providing that, in case of a transfer of interest, the action may be continued against the original party, unless the court directs the person to whom the in- terest is transferred to be substituted.^" The general assignee of an insolvent foreign corporation under a voluntary assignment made in the home state, after exhausting all remjedies there against stockholders there, may bring here an omnibus suit in. equity against the stockholders here, to enforce their common law con- tractual liability for unpaid subscriptions for stock, notwithstand- ing a statute of the home state provides a remedy in the nature "Christensen v. Eno, 106 N. Y. 97. 'Nashua Sav. Bank v. Anglo-American L. M. & A. Co., 108 Fed. 764, U. S. Cir. Ct. of Ap., 1st Cir., affirmed, 189 U. S. 221. •Bank of China. J. & T. S. L. v. Morse. 168 N. Y. 458. •United States Vinegar Co. v. Spamer, 143 N. Y. 676. "Code Civil Pro. sec. 755, 756; Sigua Iron Co. v. Brown, 171 N. Y. 488. Liability of Stockholdees. 193 of garnishment to enforce such liability, and irrespective of a stat- ute of the home state providing for an omnibus suit against the corporation and all persons liable for debts to adjust their rights and liabilities." In an action against a subscriber to the stock of a foreign corporation to recover liis subscription, it is immaterial that a prospectus of the promoters of the corporation showed an illegal purpose, or that the promoters deceived the authorities of the home state as to the real corporate purpose, provided the cer- tificate of incorporation showed a legal purpose only, as the abuse of the incorporating laws of the home state has no effect here until the home state takes action on it.^^ But a summary decree under a statute of a foreign country, determining the liability of sub- scribers for calls on the insolvency of a corporation of that country, entered in a statutory proceeding in derogation of the common law, and in the nature of a bankruptcy proceeding, and without per- sonal service of process, cannot be made the basis of an action here against a stockholder of this state to recover such a call, notwith- standing the rule that a stockholder, by becoming such, voluntarily subjects himself to the statutes incorporating and governing the corporation.^' § 124. Levy of attachment upon subscription. — Section 646 of the Code of Civil Procedure provides that, under a warrant of attachment against the property of a foreign corporation, other than one created under the laws of congress, the sheriff may levy upon the sum remaining unpaid upon a subscription to its capital stock made by a person within the county, or upon one or more shares of stock therein held by such person. This section is a revision of a similar statute enacted in 1845, under which it was held that the liability of the subscriber or stockholder to be reached by the creditor must be one which could be enforced in the home state in an action for debt, as distinguished from an accounting "Stoddard v. Lum, 159 N. Y. 265. "United States Vinegar Co. v. Schlegel, 143 N. Y. 537, followed in United States Vinegar Co. v. Foehrenbach, 148 N. Y. 58. "Anderson v. Haddon, 33 Hun, 435. 13 194 PowEES AND Liabilities. requiring the joinder of all stockholders ; and that the statute cre- ates no new liability, but subrogates the creditor to the rights of the corporation, so that the creditor must show that the directors have made a call on the stock, if the by-laws provide for it as a condition of liability." Section 708 of the Code of Civil Proced- ure provides that, in an action in which a warrant of attachment has been levied, the sheriff may collect a debt attached. It is a revision of a section in the former code. Section 677 of the Code of Civil Procedure provides that the attaching creditor may bring, in the name of himself and the sheriff jointly, any action to recover a demand attached, and section 679 provides for joining the attach- ing creditor in a pending action. These sections are a revision of a section in the former code. Under s-uch former sections, it was held that, if the sheriff levies a warrant of attachment against a foreign corporation on the debt due to it by a subscriber to its stock, he may assume the prosecution of an action by the corpora- tion, pending against such stockholder to recover his unpaid sub- scription, and that the attaching creditor in turn may assume such prosecution. The procedure under the former sections has been changed, but the principles stated are still applicable. ^^ § 125. Full paid stock — In the case of an assessment on fuU paid stock there is no common law liability or contractual liability in the absence of an agreement by the stockholder. It has been held that if a majority of the stockholders of a Vermont corpora- tion hold a meeting in this state and levy an assessment on full paid stock to pay debts and to provide working capital, stockhold- ers not participating in the meeting, although having personal notice thereof, are not bound by the acts thereof, as neither the stockholders nor directors can do a corporate act out of the juris- diction creating the corporation, it not appearing what were the charter powers as to holding meetings out of Vermont." "See sec. 212, infra. "See sec. 218, infra. "Ormsby v. Vermont C. M. Co., 56 N. Y. 623. Liability of Stockholdees. 195 CHAPTER XIX. Stockholdees' Additional Liability, § 126. Statutes. — There is no statute of this state, applicable to trading and manufacturing corporations, which creates a liability of stockholders for corporate debts in addition to their stock and the amount unpaid thereon. There was such a statute, but it was amended in 1901 by striking out the liability in addition to the amount unpaid on the stock, and substituting in the place of it a liability equal to the amount unpaid on the stock, but this statute never applied to a foreign corporation.^ The liability of a stock- holder of a foreign corporation to its creditors in addition to his stock or the amount unpaid thereon is created and regulated by the charter of the corporation and the statutes of the home state.^ But it has been held by the Supreme Court of the United States, that when a corporation is formed in one state, and by the express terms of its charter it is created for doing business in another state, and business is done in the other state, it must be assumed that the charter contract was made with reference to the laws of the other state, so a stockholder may be held for personal additional liability under a statute of the other state respecting business done in that state, although he is under no such liability under the charter and the statutes of the home state, and that if the statute of the other state was passed prior to the organization of the cor- poration, there can be no question of impairing the obligation of the contract of the stockholders contrary to the obligation of con- tract clause of the federal constitution.^ § 127. Enforcing statute of the home state. — ^A stookholder'a personal liability for the debts of a foreign, corporation in additioji 'L. 1892, ch. 688, sec. 54, amended by L. 1901, ch. 354. Piatt v. Larter, 94 Fed. 610, U. S. Cir Ct., S. D. N. Y. It is hardly conceivable that the statute in its present form creates a liability equal to the, amount unpaid on the stock in addition thereto, although the language is not clear. ''Molson's Bank v. Boardman, 47 Hun, 135. 'Art. 1, sec. 10. Pinney v. Nelson, 183 U. S. 144. 196 PowEES AND Liabilities, to his stock under a statute of the home state may be enforced in a court of this state, when its enforcement does not violate the local policy, or interfere with the rights of resident creditors, and the remedy prescribed is one that can be enforced here. The liability, like partnership liability, must be one arising upon tlie contracting of the debt, and not a liability like a penalty or a liability imposed after the contracting of the debt,'' It is not in the nature of a penalty or forfeiture, and does not exist solely as a liability im- posed by statute. It is not enforced solely as a statutory obligation but is regarded as voluntarily assumed by the act of becoming a stockholder. It is like other obligations, assumed in the form pre- scribed by the laws of the place where made, and being valid there , is enforceable everywhere. Its validity, interpretation and effect are to be determined by the lex loci, but the remedy is governed ; by the lex fori." There is no substantial difference between the lia- I bility for an unpaid balance on a stock subscription, which is an express contract to take stock and pay for it, and the statutory lia- bility in addition to the stock, which is an unpaid deficiency of assets assumed by the act of becoming a member of the corporation through the purchase of stock, from which a. contract is implied to perform the statutory conditions upon which stock may be owned. Such implied promise is not a part of the capital stock of the cor- poration, but is a substitute, required by statute, for the personal liability of a partner at common law, and has the same object which is the protection of creditors.^ It is the intention of a stat- ute, which not only creates the liability but also provides a peculiar and complicated remedy, unknown to the common law and which cannot be entirely enforced in another state, not to create a general, personal or property liability, but to charge the property of the stockholders, and that not generally, or by the usual or ordinary process, but conditionally, and by a peculiar and unusual proced- ure, only available in the courts gf that state, not only limiting and prescribing the security and rights of the creditor and the obliga- tion and liability of the stockholder, but prescribing the remedy ^Patterson v. Baker, 34 How. Pr. 180. "Lowry v. Inman, 46 N. Y. 119. "Howarth v. Angle, 162 N. Y. 179. Liability of Stockholdees. 197 going with it and as a part of the right. Such a liability cannot be enforced in a court of this state. A creditor of a Georgia bank- ing corporation cannot enforce here the individual liability of a resident stockholder under a provision of the charter of the cor- poration making the individual property of stockholders liable for debts, and subject to levy under an execution against the corpora- tion, without any suit or judgment against the stockholders, because the creditor is bound by the charter, and it makes no provision for suit against the stockholder in a Georgia court, which is a neces- sary prerequisite to an execution in this state.^ § 128. Common law remedy.— It seems that if the statute which creates the liability does not prescribe a remedy or prescribes a common law remedy, a single judgment-creditor or a receiver representing all the creditors may maintain a common law action here against a single stockholder to enforce his liability to an amount equal to his stock in addition thereto. There is a Missouri statute, similar to that of Kansas hereafter mentioned, providing for additional liability and for a remedy by action against the stockholders and contribution by each stockholder against other solvent ones, or for a judgment against the corporation, and either an execution thereon against the stockholders or an action to charge them with the judgment. The highest court of that state con- strued the statute to prescribe alternative remedies, one of which was an action at law, creditor against stockholder, irrespective of the provisions for contribution. Under such statute, as so con- strued, the General Term of the Supreme Court of this state allowed that remedy to be enforced here.' A statute under which an Ohio corporation was formed, provided that the stockholders should be liable to creditors to an amount equal to their stock in addition thereon but it provided no remedy. It was held at the Special Term of the Supreme Court of this state that a receiver of an insolvent corporation formed under that statute, appointed by a court of that state, in a suit brought by a' judgment-creditor on behalf of and for the benefit of all creditors, may sue here to enforce the Tjowry v. Inman, 46 N. Y. 119. 'Savings Asso. of St. L. v. O'Brien, 51 Hun, 45; s. u., 3 N. Y. Supp. 764. 198 PowEKS AND Liabilities. additional liability of a resident stockholder.' These cases should be read in connection with the more recent decisions under the Kansas constitution and statutes. § 129. Decisions under Kansas constitution and statutes. — The constitution of Kansas provides that dues from certain corpora- tions shall be secured by individual liability of stockholders to an amount equal to their stock in addition thereto, and the statutes provide for a suit against the stockholders without joining the corporation and contribution by each stockholder against other solvent ones, or for a judgment against the corporation and execu- ■■ tion thereon against the stockholders, or for a judgment against the corporation and suit against the stockholders to charge them with the amount of such judgment. The liability created by the constitution is contractual, and it was said by the Court of Appeals of this state in a decision hereafter referred to,^" that the constitution is not self -executing, from which the inference may be drawn that if it were the liability prescribed could be enforced here in an action at law, creditor against stock- holder, inasmuch as the constitution does not prescribe a remedy. But one of the reasons given by the Court of Appeals for its decision, namely, that the liability cannot be enforced here if it works an injustice to a citizen of this state, is not in accord with' the decisions of the General Term and Special Term referred to in the preceding section. The liability under the Kansas constitution and statutes has been enforced in an "action at law, creditor against stockholder, in the federal courts in New York," Massachusetts," New Jersey,^' Pennsylvania" and Rhode Island, and such en- •Pugh V. Hurtt, 52 How. Pr. 22. "Marshall v. Sherman, 148 N. Y. 9. "American Freehold L. M. Co. of L. Ltd. v. Woodworth, 79 Fed. 951, U. S. Cir. Ct., N. D. N. Y.; Whitman v. National Bank ot D., 28 C. C. A. 404; 8. e., 83 Fed. 288, affirmed 176 U. S. 559. "Dexter v. Edmands, 89 Fed. 467, U. S. Cir. Ct., D. Mass. "Western Nat. Bank of N. Y. v. Reckless, 96 Fed. 70 U. S. Cir. Ct., D. N. J. "Fidelity I. T. & S. D. Co. v. Mechanics' Sav. Bank, 97 Fed. 297, U. S. Cir. Ct. of Ap., 3rd Cir.; Ball v. Warrington, 108 Fed. 472, U. S. Cir. Ct. of Ap., 3rd Cir. Liability of Stockholders. 199 forcement has been approved by the Supreme Court of the ITiiited States.^' An Iowa statute provides an expeditious remedy by an action at law, creditor against stockholder, and such remedy may be enforced in a federal court in this state." The federal courts have held that the cause of action under the Kansas constitution and statutes belongs to the creditor and not to a general receiver of the corporation;" that the judgment against the corporation is evidence against the stockholder as he is privy to his corporation ;^* that it may be impeached for fraud without contravening the full faith and credit clause of the federal constitution;" that a judg- ment against the corporation entered on its voluntary appearance is presumed regular until it is shown that the attorney's authority to appear was wanting or invalid f^ and that it is not necessary to allege the original debt for which the judgment was entered.^^ The Court of Appeals of this state has construed the Kansas stat- utes to prescribe a single remedy, peculiar and complicated and unenforaeable in its entirety here, there being no decision of the highest court of Kansas construing the statutes to mean that the liability may be enforced in an action at law, creditor against- stockholder, irrespective of the provisions for contribution, as there was in the case under the Missouri statute cited in the preceding section. It is the policy of this state not to allow the enforcement of the liability, in a case where it would work an injustice to one of our own citizens, and it seems that the stockholder is liable only for the proportion of the total deficiency of debts that his stock bears to the total stock, which cannot be determined until if is ascertained what is the total deficiency remaining due . after a liquidation of ~ the affairs of the corporation has been had in the home state. For these reasons, it was held by "Hancock Nat. Bank v. Farnum, 176 U. S. 640. "Atlantic Trust Co. v. Osgood, 116 Fed. 1019, U. S. Cir. Ct., S. D. N. Y. "American Freehold L. M. Co. of L. Ltd. v. Woodworth, 82 Fed. 269, U. S. Cir. Ct., N. D. N. Y.; Fidelity I. T. & S. D. Co. v. Mechanics' Sav. Bank, supra. "Hancock Nat. Bank v. Farnum, su-pra. "Art. 4, sec. 1 ; Ball v. Warrington, supra. "Whitman v. National Bank of O., supra. "American Freehold L. M. Co. of L. Ltd. v. Woodworth, 79 Fed. 951. 200 Powers and Liabilities. the Court of Appeals that a single judgment-creditor of a Kansas corporation cannot sue a single stockholder here, to en- force his additional liability under the constitution and statutes of that state. It would be a different case if the remedy for con- tribution provided in the Kansas statute was capable of being en- forced here, or if all the creditors, or a receirer, representing them and vested with the title of the cause of action, should sue for a specific amount, duly ascertained to be the stockholder's share of the total deficiency. ^^ § 130. Decisions under Washington statutes. — vVfter the entry of a final judgment in the receivership proceedings in the home state, which ascertains definitely the deficiency to be niade up from the stockholders' additional liability, from which a stated sum can be fixed as each stockholder's proportion, a receiver of an insolvent bank of the state of \A'asliington, appointed by a court of that state, and constituted a quasi assignee by the statutes of that state, repre- senting all the stockholders and all the creditors, and invested with the title to all rights of action possessed by his principal, and au- thorized to collect the assets of the bank, and to sue for the stock- holders' additional liability as such an asset, under a statute of the home state which creates such liability but provides no remedy, leaving the remedy to the courts to be worked out according to the common law, may sue a single stockholder in a court of this state for a stated sum as his proportionate share of such statutory liability. Such liability is contractual and springs from an im- plied promise, but all the facts constituting the cause of action must be proved anew by common-law evidence, although already found in the foreign judgment which appointed the receiver, the only necessary function of that judgment being to establish the title of the plaintiff and his right to sue. The stockholders may controvert in our courts all the essential facts, such as insolvency, the amount of the deficiency and the like, whether they are estab- =^Marshall v. Sherman, 148 X. Y. 9, explained in Howarth v. Angle, 162 N. Y. 179; Brookman v. Mechanics' Sav. Bank, 31 Misc. 191; s. c, 65 N. Y. Supp. 54. Liability of Stockholdees. 201 lished by the judgment appointing the receiver or not. They may require strict common-law pr.oof as to all the facts upon which the deficiency is based, and may contest any unreasonable expendi- ture in the conversion of assets and the collection of accounts, including extravagant allowances to attorneys or counsel. It is not necessary that the procedure to enforce the liability in qi'es- tion should be that required by statute in this state in the case of domestic corporations, as that would frequently be impossible and would withhold the right of comity altogether. Any provision of our statutes which makes the recovery in this state of a judgment against the corporation and return of execution unsatisfied essential to the maintenance of an action against a stockholder cannot ordi- narily be complied with in the case of a foreign corporation, be- cause service of process cannot be had. As was said by the court, when an action by a foreign receiver to collect assets, under the authority of the court which appointed him, works no detriment to any citizen of this state, and is not repugaant to its policy, it would be a provincial and narrow view for our courts tO' refuse to extend the usual state comity. There is a close business con- nection between the citizens of the different states of the union. Investments are freely made in other states by the citizens of this state, -who need the aid of the courts of the jurisdiction where the investments are made. The comity which we expect to have ex- tended to citizens of our state, we cannot, in justice, refuse to citi- zens of other states. State lines should not prevent justice from being done. Our courts should not close their doors to a receiver from another state, who comes here, armed with the title to a just claim against a citizen of this state and offers to establish by common-law evidence the liability of that citizen. While we should keep control of the subject, so as to see that no discrimina- tion is practiced against our citizens, or injustice done them, either as to the substance of the liability or the method of procedure, when the same result is attained in practically the same way as, under similar circumstances, would be attained in the case of a domestic corporation, there is no reason for withholding that aid 202 PowEES AND Liabilities. which is now afforded by the courts of almost all enlightened coun- tries/' The same rule applies to an Iowa statute similar in form to the Washington statute.^ § 131. Decisions under Ohio and Minnesota statutes. — The constitution of Ohio provides for an additional liability of stockholders to creditors, and the statutes provide that such liability shall be enforced in an action on behalf of all creditors against all stockholders. The liability is contractual and the remedy is equitable. The remedy is ex- elusive and cannot be enforced by a creditor in the courts of this state/' or a federal court out of Ohio.^^ But if, in an action in the Ohio court to enforce the remedy, the proportionate amount for which each stockholder is liable is determined, and the court, under its general statutory power to appoint a receiver where re- quired by the usages of equity, construed by an Ohio court to au- thorize the appointment of a special receiver to collect stockhold- ers' additional liability," appoints a receiver representing all the creditors to collect from the stockholders their pro rata liability so determined, such receiver may sue therefor in a federal court Ib another state, if such action will not violate the local policy or interfere with the rights of resident creditors.^^ It seems clear that such receiver may sue in the courts of this state, unless the rights of resident creditors intervene. A Minnesota statute provides for a liability and a remedy sub- "'Howarth v. Angle, 162 N. Y. 179; Converse v. Stewart, 105 App. Div. 478; s. e., 94 N. Y. Supp. 310. "Wigton V. Kenney, 51 App. Div. 215; a. c., 64 N. Y. Supp. 924. ^'Barnes v. Wheaton, 80 Hun, 8; s. c, 29 N. Y. Supp. 830, affirmed on default in Court of Appeals, June, 1896; Cleveland L. & W. Ry. Co. v. Kent, 87 Hun, 329; s. e., 34 N. Y. Supp. 427. '"State Nat. Bank of C. O. v. Sayward, 86 Fed. 45, U. S. Cir. Ct., D. Mass., affirmed 91 Fed. 443, U. S. Cir. Ct. of Ap., Ist Cir.; Middletown Nat. Bank v. Toledo, A. A. & N. M. Ry. Co., 197 U. S. 394. "It is said that the Ohio statute has been amended so as to authorize the court in terms to appoint such a receiver. ""Kirtley v. Holmes, 107 Fed. 1, U. S. Cir. Ct. of Ap., 6th Cir.; Burr r. Smith, 113 Fed. 858, U. S. Cir. Ct., D. Ind. Liability of Stockholdees. 203 stantially the same as is provided for by the constitution and stat- utes of Ohio, but it prescribes that the court shall enforce the lia- bility as in other cases. In other cases, the court, by itself, or by its receiver as its agent, cannot go beyond the boundaries of Minne- sota, and so by its own limitations the statute confines the remedy to that state. It authorizes the court to appoint a receiver but it does not vest in the receiver the causes of action against the stock- holders for additional liability, nor does it or any general statute authorize the court to empower the receiver to collect the stock- holders' additional liability as was the case in Ohio as above men- tioned. The Minnesota courts have decided that it authorizes an action in equity by or on behalf of all creditors against all stock- holders and that such remedy is exclusive, and that an action against a single stockholder will not lie. Consequently a JSTew York stockholder may not be sued in an action at law in a federal court in this state for a specific sum duly determined to be his proportionate share of the deficiency by a creditor of an insolvent Minnesota corporation or by a special receiver appointed by a court of that state in a suit under such statute brought by a judgment- creditor, suing on behalf of himself and all other creditors, to de- termine the individual liability of stockholders and charged by the court as its agent with the duty of enforcing such liability for all creditors. A suit by such receiver cannot be maintained in* a fed- eral court in another state as a suit to prevent a multiplicity of suits or as a suit in aid of the suit at home.^' Unless the corporation voluntarily appears, a suit in equity by a creditor of a Minnesota corporation against its Pennsylvania stock- holders, for an account and settlement of the rights and liabilities of the parties, will not lie in a federal court in Pennsylvania, as the corporation is not found in the district to be sued there, and as it is a necessary party to a suit in equity against the stockholders.'" "Finney v. Guy, 189 U. S. 335; Hilliker v. Hale, 117 Fed. 220, U. S. Cir. Ct. of Ap., 2nd Cir.; Hale v. Allison, 188 U. S. 56, overruling Hale V. Hardon, 95 Fed. 747, U. S. Oir. Ct. of Ap., Ist Cir., and Hale v. CofSn, 114 Fed. 567, U. S. Cir Ct., D. Maine. See Converse v. Stewart, 105 App. Div. 478; s. c, 94 N. Y. Supp. 310. ""Elkhart Nat. Bank v. Northwestern G. L. Co., 87 Fed. 252, U. S. Cir. Ct. of Ap., 3rd Cir. 204 PowEES AND Liabilities. § 132. Consolidation. Defective incorporation. Subrogation. Limitations. — Where a state statute consolidates certain railroad corporations into one corporation, an exemption of the stockhold- ers of one of the former corporations from individual liability for debts does not pass to them as stockholders of the consolidated corpo- ration, so as to have a subsequently created statutory liability of stockholders impair the obligation of a contract contrary to the fed- eral constitution." An Iowa incorporating statute provides that a failure to comply there\vith shall make the stockholders liable as partners after a judgment has been entered against the corporation and an execution thereon has been returned unsatisfied, and after a demand for corporate property has been made, followed by a re- fusal to point it out. It has been held that the liability as partners under the statute being conditional, an action will not lie here against a resident stockholder to enforce it until the conditions are fulfilled, and that if a court of that state has determined that the corporation legally incorporated under the statute, such construc- tion of the statute will be followed here.'^ If a stockholder of a national bank is compelled to pay corporate debts under his per- sonal statutory liability, he may on behalf of himself and other stockholders sue the directors for losses resulting from their negli- gence, after the receiver of the bank, ,under the direction of the comptroller of the currency, refuses to bring such suit.^^ The ap- plication of the statute of limitations to an action to enforce the liability of a stockholder in addition to his stock will be considered hereafter.'* "Art. 1, sec. 10; Minneapolis & St. L. Ey. Co. v. Gardner, 177 U. S. 332. •"Jessup V. Carnegie, 80 N. Y. 441. ''Nelson v. Burrows, 9 Abb. N. C. 280. "See see. 206, infra. Unauthorized DiviDEisrDS. 205 CHAPTER XX. UlTAUTHOEIZED DIVIDENDS. § 133. Statutes of this state.— Section 60 was added to the Stock Corporation Law in 1897.^ It states that except as other- wise provided, the officers, directors and stockholders of a foreign stock corporation transacting business in this state, except moneyed and railroad corporations, shall be liable under th© provisions of the Stock Corporation Law in the same manner and to the same extent as the officers, directors and stockholders of a domestic cor- poration, for the making of unauthorized dividends,^ the creation of unauthorized and excessive indebtedness,^ unlawful loans to stockholders,* making false certificates, reports or public notices,^ an illegal transfer of the stock and property of such corporation, when it is insolvent or its insolvency is threatened,^ and the failure to file an annual report;' and that such liabilities may be en- forced in the courts of this state, in the same manner as similar liabilities imposed by law upon the officers,, directors and stock- holders of domestic corporations. What constitutes doing business in this state has been considered already.^ The matters referred to in section 60 are provided for in sections 23, 24, 25, 31, 48 and 80 of the Stock Corporation Law, and it may be a question whether section 60 refers to them as they existed in 1897, when section 60 was enacted, or whether it includes amendments thereto and repeals thereof made subsequent to 1897. That question is one of legis- lative intent, and it seems clear that the legislature, in enacting section 60, intended to put foreign and domestic corporations on ^L. 1892, eh. 688, sec. 60, added by L. 1897, ch. 384, printed; in the appendix. ^'Id. sec. 23, amended by L. 1901, ch. 354, printed in the appendix. 'Id. sec.'24, which section was repealed by L. 1901, ch. 354. *Id. sec. 25, printed in the appendix. 'Id. sec. 31, printed in the appendix. •Id. sec. 48, amended by L. 1901, ch. 354, printed in the appendix. 'Id. sec. 30, amended by L. 1901, ch. 354, printed in the appendix. •See sees. 6-17, supra. 206 Powers amd Liabilities. a par in the particulars specified. If such sections had been re- ferred to by number and had been made applicable by apt words, to a foreign corporation, there would be no doubt but that subse- quent amendments thereto would not extend to a foreign corpora- tion.' But a provision subjecting officers, directors and stock- holders of a foreign corporation to liability under a general law, to the same extent as those of a domestic corporation are liable under that law, signifies a legislative intent that subsequent changes in such general law shall apply to both classes of corporations." § 134. Liability of directors. — Section 23 of the Stock Corpora- tion Law" provides, that the directors of a stock corporation shall not make dividends except from the surplus profits arising from the business of such corporation, nor divide, withdraw or in any way pay to the stockholders or any of them, any part of the capital of such corporation, or reduce its capital stock, except as authorized by law ; and that in case of any violation of such provisions the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large upon the minutes of such directors at the time, or were not present when the same happened, shall jointly and sever- ally be liable to such corporation and to the creditors thereof to the full amount of any loss sustained by such corporation or its creditors respectively by reason of such withdrawal, division or reduction. It provides also that such provisions shall not prevent a division and distribution of the assets of any such corporation remaining after the payment of all its debts and liabilities upon the dissolulion of such corporation or the expiration of its char- ter; nor shall they prevent a corporation from accepting shares of its capital stock in complete or partial settlement of a debt owing to the corporation, which by the board of directors, shall "Knapp .V. City of Brooklyn, 97 N. Y. 520 ; Matter of Main Street, 98 N. Y. 454; Matter of Le Roy, 5 N. Y. Supp. 550; Carling v. Pureell, 3 Misc. 55; B. c, 22 N. Y. Supp. 558 ; Matter of Havemeyer, 35 N. Y. Supp. 480. "Dawson v. Horan, 51 Barb. 464; Savage v. Gould, 60 How. Pr. 234. "L. 1892, ch. 688, sec. 23, amended by L. 1901, ch. 354, printed in the appendix. Unauthoeized Dividends. 207 be deemed to be bad or doubtful. The courts of this state have not determined whether section 60 renders a director of a foreign corporation doing business here liable under section 23, but have decided that where the statutes of the home state create a liability the same as is created by section 23, such liability so created by the statutes of the home state and by section 23 may be enforced in this state under section 60.^^ Such decision was made without reference to the amendment of 1901 to section 23 changing the damage to be recovered from capital so withdrawn, to the actual loss, but it applies notwithstanding the amendment. In determin- ing the liability of a director in such an action, estimated profits from sales for future delivery of goods to be manufactured from raw material not yet purchased cannot be considered in determining what are profits. An increase in the bulk of barley which takes place during manufacture may be considered in determining the profits of a malting corporation. A director cannot have hi-s lia- bility reduced by subsequent profits earned under a new manage- ment.^^ "Hutchinson v. Stadler, 85 App. Div. 424; s. c, 83 N. Y. Supp. 509; Siegman v. Rice, N. Y. Law Journal, Oct. 11, 1905. "Hutchinson v. Curtiss, 45 Misc. 484; s. c, 92 N. Y. Supp. 70. 208 Powers and Liabilities. CHAPTEK XXI. Excessive Indebtedness. § 135. Statute repealed. — There is now no statute of this state limiting the amount of indebtedness which a stock corporation other than a monied corporation may create. Section 24 of the Stock Corporation Law did prohibit such a corporation creating a debt in excess of the amount of its paid-up capital stock, and provided for a liability of directors for debts exceeding such amount and for bonds in excess of the amoimt allowed by law. Section 60' states that except as otherwise provided, the directors of a foreign stock corporation, transacting business in this state, except monied and railroad corporations, shall be liable under the provisions of the Stock Corporation Law in the same manner and to the same extent as the directors of a domestic corporation for the creation of unauthorized and excessive indebtedness. Section 34^ provides that no director of any stock corporation shall be liable to any creditor of the corporation because of the creation of any excessive indebtedness, where personal liability has been waived, or unless within three years after tlie act such creditor shall have served on such director written notice of his intention to hold him personally liable. Section 24 was repealed in 1901, and its application to a foreign corporation was repealed by implication.' ^L. 1892, eh. 688, sec. 60, added by L. 1897, eh. 384, printed in the appendix. ^Id. sec. 34, added by L. 1899, eh. 354, printed in the appendix. 'L. 1901, ch. 354. See sec. 133, supra. Loans to Stockholdeks. 209 CHAPTER XXII. Loans to Stockholders. § 136. Liability of officers and directors — Section 25 of the Stock Corporation Law^ provides that no loan of moneys shall be made by any stock corporation except a monied corporation, or by any officer thereof, out of its funds to any stockholder therein, nor shall any such corporation or officer discount any note or other evi- dence of debt, or receive the same in payment of any installment or any part thereof due or to become due on any stock in such corporation, or receive or discount any note, or other evidence of debt, to enable any stockholder to withdravr any part of the money paid in by him on, his stock. It provides also that in case of a violation of such provisions the -officers or directors making such loan, or assenting thereto, or receiving or discounting such notes or other evidence of debt, shall, jointly and severally, be personally liable to the extent of such loan and interest, for all the debts of the corporation contracted before the repayment of the sum loaned, and to the full amount of the notes or other evidences of debt so received or discounted, with interest from the time such liability ■ accrued. Section 60 states that except as otherwise provided the officers and directors of a foreign stock corporation, transacting business in this state, except monied and railroad corporations, shall be liable under the provisions of the Stock Corporation Law in the same manner and to the same extent as the officers and directors of a domestic corporation for unlawful loans to stock- holders.^ 1j. 1892, ch. 688, sec. 25, printed in the appendix. 'Id. sec. 60, added by L. 1897, ch. 384, printed in the appendix. See sec. 133, supra. 14 210 PowEES AND Liabilities. CHAPTER XXIII. Annual Eepoet. § 137. Statutes of this state. — Section 30 of the Stock Corpo- ration Law^ provides that every domestic stock corporation and every foreign stock corporation doing business within this state, except monied and railroad corporations, shall annually during the month of January, or if doing business without the United States before the first day of May make a report as of the first day of January, which will state: 1. The amount of its capital stock and the proportion actually issued. 2. The amount of its debts or an amount which they do not exceed. 3. The amount of its assets or an amount which its assets at least equal. 4. The name and addresses of all the directors and ofiicers of the company, and in the case of a foreign corporation the name also of the person designated in the manner prescribed by the Code of Civil Pro- cedure as a person upon A\hom process against the corporation may be served within this state. Such report shall be made by the president or a vice-president or the treasurer or, a secretary of the corporation and shall be filed in the oflace of the secretary of state. If such report be not so made and filed, any such ofiicer who shall thereafter neglect or refuse to make and to file such report within ten days after written request so to do shall have been made by a creditor or a stockholder of the corporation, shall forfeit to tha people the sum of fifty dollars for every day he shall so neglect or refuse. Section 60^ states that except as otherwise provided, the ofiicers, directors and stockholders of a foreign stock corpora- tion transacting business in this state, except moneyed and rail- road corporations, shall be liable under the provisions of the Stock Corporation Law in the same manner and to the same extent as the ofiicers, directors and stockholders of a domestic corporation for 'L. 1892, ch. 688, see. 30, as amended by L. 1897, ch. 384, L. 1901, ch. 354 and L. 1905, ch. 415, printed in the appendix. 'Id. see. 60, added by L. 1897, ch. 384, printed in tke appendix. Annual Eeport. 211 the failure to file an annual report. Section 34' provides that no director or officer of auy stock corporation shall be liable to any creditor of the corporation, because of any failure to make or to file an annual report, where personal liability has been waived, or unless within three years after the default such creditor shall have served on such director or officer written notice of his intention to hold him personally liable. Sections 30 and 60 should be read together. Sections 30 and 34 should be read together.* Section 30 was amended in 1901^ by striking out the personal liability to credi- tors therein imposed for a failure to make and file an annual re- port and substituting a penalty to the state, which penalty is pay- able to the state treasury.* Thus section 34 is no longer applicable, to the case of a failure to file an annual report. § 138. Statutes of the home state. — Where the statutes of the home state require the filing of an annual report in that state, and prescribe that the consequences of an omission to do so shall be a personal liability of directors for the debts of the corporation, it has always been the rule in this state that such liability is in the nature of a penalty, and will not be enforced by the courts here.'^ It has been held by the Supreme Court of the United States that a judgment in this state by a creditor of a corporation of this state against a director of the corporation for filing a false report under a statute of this state* making all officers signing the report jointly and severally liable for the debts of the corporation, is v^ithin the provisions of the federal constitution^ and acts of congress requir- ing full faith and credit to be given by each state to the judgments of every other state, and is not so far penal in an international sense as to be excepted as the purpose of the statute of this state 'Id. sec. 34, added by L. 1899, ch. 354, printed in the appendix. •Staten Island M. R. R. Co. v. Hinchliflfe, 170 N. Y. 473. °L. 1901, ch. 354, superseding Seebeck v. King, 34 Misc. 483; s. c, 70 N. Y. Supp. 322. "Code Civil Pro. see. 1963. 'Bird V. Hayden, 1 Robt. 383; Price v. Wilson, 67, Barb. 9. 'L. 1875, ch. 611, sec. 21, revised in the stock corporation law, L. 1892', ch. 688, sec. 31, printed in the appendix. 'Art. 4, sec. 1. 212 PowEES AND Liabilities. is not to punish an offense against the public justice of the state, but to afford a private remedy to a person injured by a wrongful act, and hence a judgment-creditor may make the judgment the basis of a bill in equity filed in another state to reach corporate assets/" It has been held by the Circuit Court of the United States in Connecticut that a statute of the home state prescribing a per- sonal liability of directors for a failure to file an annual report is not penal but remedial, and that the liability thereunder may be enforced in a federal court in that state. ^^ "Huntington v. Attrill, 146 U. S. 657, reversing the court of appeals of Maryland. "Davis V. Mills, 99 Fed. 39. False Reports. 213 CHAPTER XXIV. False Certificate^ Report and Public Notice. § 139. Liability of officers and directors. — Section 31 of the Stock Corporation Law^ provides that if any certificate or report made or public notice given by the officers or directors of a stock corporation shall be false in any material representation, the officers and directors signing the same shall jointly and severally be per- sonally liable to any person who has become a creditor or stock- holder of the corporation upon the faith of any such certificate, report, notice or any material representation therein to the amount of the debt contracted upon the faith thereof if not paid when due, or of the damage sustained by any purchaser of or subscriber to its stock upon the faith thereof. It provides, also, that such lia- bility shall exist in all cases where the contents of any such certifi- cate, report or notice or of any material representation therein shall have been communicated either directly or indirectly to the person so becoming a creditor or stockholder and he became such creditor or stockholder upon the faith thereof. It provides, also, that no action can be maintained for a cause of action created by such provision unless brought within two years from the time the certificate, report or public notice shall have been made or given by the officers or directors of such corporation. Section 60^ states that except as otherwise provided, the officers and directors of a foreign stock corporation transacting business in this state, except moneyed and railroad corporations, shall be liable under the pro- visions of the Stock Corporation Law, in the same manner and to the same extent as the officers and directors of a domestic corpora- tion, for making false certificates, reports or public notices. To make a false report, exhibit or statement is a misdemeanor.' The action authorized by section 31 in its present form applies to a 'L. 1892, ch. 688, see. 31, printed in the appendix. ^L. 1892, ch. 688, see. 60, added by L. 1897, ch. 384, printed in the appendix. •See sec. 114, supra. 214 Powers and Liabilities, foreign corporation. It is analogous to the common-law action for deceit or fraud, but in furtherance of such remedy in that it does not require proof of scienter. It is not an action for a penalty, and it may be joined in the same complaint with, the common-law action of deceit arising out of the same transaction.* It need not be tried in the county where the cause of action arose as required by section 983 of the Code of Civil Procedure in the case of an action brought to recover a penalty or forfeiture imposed by stat- ute.^ The effect of the statute of the home state prescribing the consequences of making a false report there has been referred to.° 'Hutchinson v. Young, 93 App. Div. 437 ; s. c, 87 N. Y. Supp. 678. "Hutchinson v. Young, 80 App. Div. 246; s. c, 80 N. Y. Supp. 259. "See sec. 138, infra. Assignments. 215 CHAPTER XXV. Assignments. Insolvent Teansfees. § 140. Liability for insolvent transfers. — Section 48 of the Stock Corporation Law^, provides that no conveyance, as- signment or transfer of any property of a corporation, by it or by any officer, director or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stock- holder when the corporation is insolvent or its insolvency is immi- nent, with the intent of giving a preference to any particular cred- itor over other creditors of the corporation shall be valid, except that laborers' wages for services shall be preferred claims and be entitled to payment before any other creditors out of the corpora- tion assets in excess of valid prior liens or incumbrances; and that every person receiving by means of any such prohibited act ■or deed any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees ; and that no stockholder of any such corporation shall make any transfer or assignment of his stock therein to any person in contemplation of its insolvency. It provides, also, that every transfer or assignment or other act done in violation of such provisions shall be void ; and that every director or officer of a corporation who shall violate or be concerned in violating any provisions of this section, shall be personally liable to the creditors and stockholders of the corpora- tion of which he shall be director or an officer to the full extent of any loss they may respectively sustain by such violation. Section 60^ states that except as otherwise provided, the officers, directors and stockholders of a foreign stock corporation transacting business in this state, except monied and railroad corporations, shall be lia- ble under the provisions of the Stock Corporation Law, in the same manner and to the same extent as the officers, directors and stock- 'L. 1892, eh. 688, sec. 48, amended by L. 1901, ch. 354, printed in the appendix. 'L. 1892, ch. 688, sec. 60, added by L. 1897, ch. 384, printed in the appendix.^ 216 PowEES AND Liabilities. holders of a domestic corporation, for an illegal transfer of the stock and property of such corporation, when it is insolvent or its insolvency is threatened. Sections 48 and 60 S'hould be read to- gether.' Prior to the enactment of section- 60, it was held that sec- tion 48 did not apply to a foreign corporation f and that it did not affect a general assignment for the benefit of creditors with prefer- ences made by it here f or a bill of sale to an insolvent transferee," or to a solverrt transferee ;^ nor did it prevent a director securing a debt by an attachment of the corporate property.' If, after a trans- fer prohibited by section 48 is fully executed, the officers, directors or stockholders are sued for personal liability because of having made it, they can not set up that it was illegal and void. Under the former provisions in the Revised Statutes applicable to monied corporations, and now revised in section 48,' it was held, that an agreement by an insolvent fire insurance corporation of this state tO' re-insure its policies in a New Jersey corporation which had not complied with the statute of this state permitting it to do busiuesa here, will not be annulled after it is completely performed, al- though a court of this state would not enforce it so long as it re- mained executory, and consequently the invalidity of such per- formed agreement could not be set up by the directors when sued for personal liability because of having made such agreement while insolvent contrary to the Revised Statutes.*" 'As to whether section 60 adopts subsequent amendments to section 48, see sec. 133, supra. •Worthington Co. v. Pfister B. B. Co., 3 Misc. 418; s. c. 23 N. Y. Supp. 295; Blood v. Smith, 5 Misc. 590; s. c, 25 N. Y. Supp. 1143; Matter o£ Halsted, 42 App. Div. 101 ; s. c, 58 N. Y. Supp. 898. "Vanderpoel v. Gorman, 140 N. Y. 563. "Standard Nat. Bank v. Garfield Nat. Bank, 56 App. Div. 43; s. c, 6T N. Y. Supp. 472. T^ane v. Wheelwright, 69 Hun, 180; s. c, 23 N. Y. Supp. 576, affirmed on opinion below, 143 N. Y. 634. 'Hill V. Knickerbocker E. L. & I. Co., 63 Hun, 632; s. c, 18 N. Y. Supp. 813. '1 R. S. 591, sees. 8, 9, 10, revised in L. 1882, eh. 409, sees. 186. 187, 188. revised in L. 1892, ch. 688, sec. 48, printed in the appendix. "Casserly v. Manners, 9 Hun, 695. Assignments. 217 § 141. Other effects.— The courts have not determined the ef- fect of section 60 on section 48. Section 60 does not make section 48 applicable to foreign corporations in terms, but it creates a per- sonal liability of officers, directors and stockholders in the manner and to the extent provided therein. Section 48 prohibits the trans- fer of the property of a solvent or insolvent corporation to an officer, director or stockholder for a debt or on any consideration other than its full value in cash, while section 60 refers only to a corpora- tion when it is insolvent or its insolvency is threatened, and no statute of this state can affect a transfer made by a foreign corpora- tion out of this state. Section 48 contains a provision preferring laborers' wages for services, but the courts of this state have no ju- risdiction to wind up the affairs of an insolvent foreign corporation or to distribute its assets, except in aid of dissolution proceedings in the home state under the statutes of that state;" although the legislature of this state may prefer the wages of laborers here in the assets here. Section 48 contains a provision requiring every per- son receiving corporate property by means of a transfer, made when the corporation is insolvent, to account for the same, and another declaring void such a transfer and a transfer of stock by a stock- holder in contemplation of corporate insolvency. In this conneo- tion it may be said that a statute providing that when an insolvent foreign corporation doing business here makes a general assign- ment of its property here, for the benefit of creditors, with prefer- ences, the directors authorizing it and the officers signing it shall be personally liable to creditors for the loss sustained by .them thereby, and such is the result of section 60, does not render the as- signment void necessarily, as the loss occasioned by a valid assign- ment, namely, the preferences, may be referred to. § 142. Assignment made in this state. — In a case arising prior to the enactment of section 60' above referred to, it was held that an insolvent foreign corporation authorized by the common law in force in its home state, to make a general assignment without preferences for the benefit of creditors, may make such an assignment in this "See sec. 237, infra. 218 PowEES AND Liabilities. state, and the title of the assignee to assets in this state is superior to that of subsequent attaching creditors of the corporation, as every corporation has inherent right at common law to make such an asr signment unless expressly forbidden by statute or public policy, and as assignments of personal property, which are valid by the law of the domicile of the assignor, are generally recognized by the law of the state where the property may be situated, unless they, violate its statutory law or its known or settled public policy, and as the only prohibitive statute of this state, section 48, refers solely to domestic corporations and in the absence of apt words does not evidence a public policy applying to all corporations.^^ Even if section 60 ap- plies section 48 to foreign corporations, it does not affect a general assignment without preferences, as section 48 allows such an as- signment to be made by a domestic corporation. In 1887, there was added to the general assignment act of 1877 a provision," that any preference in any general assignment for the benefit of cred- itors, shall not be valid except to the amount of one-third in value of the assigned estate left after deducting wages, salaries, costs and expenses. In a case arising prior to the enactment of section 60 it was held that this limitation applied to a foreign corporation making here a general assignment of property situated here with preferences, notwithstanding the rule that a transfer of personal property made by a citizen of another state, which is valid accord- ing to the laws of that state, will be sustained and enforced here, as a state has the right to regulate the transfer of personal property within its territory, and. the principle of comity must give way to the statute of the state where the property is situated ; but that the assignment and the preferences were valid subject to such limita- tion." Upon an application made in this state for the appointment of a receiver of a foreign corporation it is some evidence of its in- solvency and that its assets here are in jeopardy, that it has made here to a resident here a general assignment for the benefit of cred- ""Vanderpoel v. Gorman, 140 N. Y. 563; Rogers v. Pell, 154 N. Y. 518. "L. 1877, ch. 466, entitled an act in relation to assignments of the estates of debtors for the benefit of creditors, sec. 30, added by L. 1887, ch. 503. "Matter of Halstead, 42 App. Div. 101; s. c, 58 N. Y. Supp. 898. Assignments. 219 itors with preferences.^^ A creditor who^ is a party to all proceed- ings under a general assignment made in this state by a foreign corporation doing business here, can not, after a general account' ing, claim that the assignment was void as contrary to a statute of the home state. ^^ There is a New Jersey general statute" prohibit- ing insolvent transfers, similar to section 48 above mentioned, but it has no extra-tei-ritorial effect, and has no application to a bill of sale made here of the assets of an insolvent New Jersey corpora- tion, accompanied by a continued change of possession, to an insolv- ent transferee, in consideration of the assumption of its debts by the transferee, and such a bill of sale is not void but voidable, and until set aside, the assets may be sold on execution against the in- solvent transferee, and the execution creditor can not be compelled to account for the proceeds to creditors of the corporation. It would be different if the prohibition were contained in the cor- poration's charter.^* It has been held, that the JSTew Jersey rule that a director of an insolvent corporation can not obtain a prefer- ence by an act of the directors, can not defeat a contract so mad© between him and the directors, but may defeat an attachment or execution which would accomplish the preference. This decision was put not on the authority of a statute of that state, but on the equity rule, enunciated by its court of last resort, that the assets of an insolvent corporation are a trust fund for all of its creditors.^' § 143. Assignment made in the l^ome state. — ^A foreign corpo- ration will be presumed authorized to make a general assignment for the benefit of creditors in its home state in the absence of proof to the contrary, and such assignment will be recognized in this state by comity, so that the assignee may sue here for a debt due the cor- '"Walter v. F. E. McAllister Co., 21 Misc. 747; s. c, 48 N. Y. Supp. 26; s. c, 27 Civil Pro. Rep. 23. "First Nat. Bank of S. S. v. Rock C. F. P. Co., 22 Misc. 599; s. c, 50. N. Y. Supp. 746. "New Jersey L. 1896, ch. 185, see. 64. "Standard Nat. Bank v. Garfield Nat. Bank, 56 App. Div. 43; s. c, 67 N. Y. Supp. 472. "Welling V. Ivoroyd M. Co., 15 App. Div. 116; s. c, 44 N. Y. Supp. 374, affirmed without opinion, 162 N. Y. 599. 220 PowEES AND Liabilities. poration.^" While the laws of a foreign state have no force, as such, in this state, still our courts uphold the title of a foreign as- signee or receiver upon the principle of comity. If the title is by virtue of a voluntary conveyance or transfer, it is sustained as against all, including even domestic creditors, but if it depends on a foreign statute or judgment, it is sustained against all except do- mestic creditors. Subject to their superior rights, the plaintiff can reduce to possession all the property of the defendant in this state, and can bring replevin for that purpose, or trover to recover dam- ages for conversion. Notes and accounts may be collected by the usual proceedings in our courts, which regard a foreign receiver as representing the original owner, and open their doors to him as they do to a domestic receiver. Every remedy to gather in the assets is afforded, unless it would interfere with the policy of the state or impair the rights of its own citizens. A state that does not dis- criminate between its own citizens and those of a foreign state dis- charges all the obligations required by the rule of courtesy.^' The general rule that the validity of a transfer of personal prop- erty is governed by the law of the domicile of the owner, is in most jurisdictions held to apply to a transfer by voluntary assignment by a debtor of all his property for the benefit of creditors, as well as to a specific transfer by way of ordinary sale or contract, and the title of such assignee, valid by the law of the domicile, will prevail against the lien of an attachment issued and levied in another state or country subsequent to the assignment, in favor of a creditor there, whether a citizen or non-resident, upon a debt or c^iattel be- longing to the assignor, embraced in the assignment, provided the recognition of the title under the assignment would not contravene the statutory law of the state, or be repugnant to its public policy. The decisions are not uniform, but this is the general rule, sup- ported by the preponderating weight of authority, and is the settled law of this state. But this general rule is subject to this qualifi- cation established in the jurisprudence of the American states, that the title to personal property acquired in invitum under foreign in- '"Franzen v. Zimmer, 90 Hun, 103; s. c, 35 N. Y. Supp. 612. "Mabon v. Ongley El. Co., 156 N. Y. 196. Assignments. 221 solvent or bankrupt laws, good according to the law of the jurisdic- tion where the proceedings were taken, will not be recognized in an- other jurisdiction where it conies in conflict with the rights of cred- itors pursuing, their remedy there against the property of the debtor, although the proceedings were instituted subsequent to and with notice of the transfer in insolvency or bankruptcy. This exception proceeds upon the view that to give effect to such a transfer arising by operation of law, and not based upon the voluntary exercise by the owner of the jios disponendi, would be to give the foreign law an extra-territorial operation, which the rule of comity ought not to permit to the prejudice of suitors in another jurisdiction. The cases in this state since the case of Holmes v. Remsen^^ in which the chancellor sought to maintain the English doctrine on the subject, have uniformly sustained the rights of domestic attaching-cred- itors against a title under a prior statutory assignment in another state or country, the several states of the union being treated for this purpose as foreign to each other. So it has been held that a Wisconsin statute, authorizing a voluntary assignment by natural persons and corporations, for the benefit of creditors, but provid- ing that the assignor, as a part of the assignment proceedings, may be discharged from his debts, and that resident and non-resident creditors accepting dividends or taking part in the proceedings shall be bound by the discharge, is a foreign statutory insolvency or bank- rupjtcy law, and the title of an assignee under such an assignment, made in Wisconsin, is acquired in invitum, and will not be recog- nized in this state, if it comes in conflict with the rights of creditors subsequently attaching the assignor's assets here, although the cred- itor was a resident of Wisconsin and assigned his claim to a resi- dent of this state solely for the purpose of attaching such assets. ^^ A trust mortgage on chattels executed by an insolvent foreign cor- poration in its home state, giving preferences and requiring all creditors to assent thereto or be excluded from its benefits, and al- lowing the corporation to continue business until the trust is exe- cuted, valid where made, is invalid as to chattels in this state sub- »4 John. Ch. 460. "Barth v. Backus, 140 N. Y. 230. 222 Powers and Liabilities. sequently attached by a creditor here.^ A general assignment made in Pennsylvania by an association formed under the partner- ship association act of that state/^ in reality a partnership, but hav- ing the attributes of a corporation, valid where made is valid here to pass property here.^^ The general assignee of an insolvent for- eign corporation, under a voluntary assignment made in the home state, after exhausting all remedies there against stockholders there, may bring an omnibus suit in equity here, against the stockholders here, to enforce their common law contractual liability for unpaid subscriptions for stock, notwithstanding a statute of the home state provides a remedy in the nature of garnishment to enforce such lia- bility, and irrespective of a statute of the home state providing for an omnibus suit against the corporation and all persons liable for debts to adjust their rights and liabilities.^' Under Maine statutes making subscribers to stock liable to creditors for unpaid subscrip- tions or subscriptions paid at an unfair valuation and also allow- ing an assignee of an insolvent corporation appointed by the court, to sue therefor, it has been held that such assignee may bring such suit in a federal court in Massachusetts, as the cause of action in the assignee is original and not one which belonged to the corpora- tion.^' A trustee for the benefit of creditors of a foreign corpora- tion under a general assignment executed by it in the home state can not have a final order in a proceeding for dissolution of a do- mestic corporation owing a debt to said foreign corporation, amended by substituting such trustee in place of an attaching-cred- itor of such foreign corporation, but should have the order vacated, and the proceeding sent back to the referee to determine on testi- mony whether the trustee or the attaching-creditor was entitled to the dividend payable from the assets of the debtor.^' The costs "Bearing v. McKinnon D. & H. Co., 165 N. Y. 78. "Pa. L. 1874, page 271. 'nVorkum v. Caldwell, 27 Misc. 72; s. c, 58 N. Y. Supp. 175, affirmed without opinion, 55 App. Div. 636; s. c, 67 N. Y. Supp. 1151. "Stoddard v. Lum, 159 N. Y. 265. "Dunn V. Howe, 96 Fed. 160, U. S. Cir. Ct., D. Mass. "Matter of Hurlbert Brothers & Co., 160 N. Y. 9. Assignments, 223 awarded against the general assignee on such an application may be ordered paid out of the fund.^" § 144. Assignment of chose in action — ^A court of this state will recognize the assignment by a New Jersey receiver of an in- solvent corporation of that state of the corporation's choses in action in that state, and the assignee may sue thereon in a court of this state.^^ The assignment by an insolvent New Jersey corporation of a bond and mortgage on real property in. this state, made to a creditor, is voidable as to other creditors, under a general statute of that state, prohibiting all insolvent corporations transferring assets, but a second assignment thereof made in this state, by the first assignee for value to a person without actual knowledge of such general statute or of the corporation's insolvency, confers a good title on such bona fide holder, as he is not chargeable with knowl- edge of a general New Jersey statute, although he would be charge- able with knowledge of the corporation's charter.^^ In order to sue in this state on a judgment in favor of a foreign corporation, re- covered in the home state, an assignee thereof, under an assignment by a sequestrator of the corporation appointed by a court of the home state, must show the return of an execution in the home state, as a pre-requisite to the appointment of the sequestrator, as re- quired by a statute of that state.'' '"Matter of Hurlbert Brothers & Co., 29 Miac. 484; s. c, 61 N. Y. Supp. 959. "Hoyt V. Thompson, 5 N. Y. 320. "Hoyt V. Thompson, 19 N. Y. 207. "Loop V. Gould, 25 Hun, 387. 224 PowEES AND Liabilities. CHAPTER XXVI. Labor Laws. § 145. Statutes. — The Labor Law of this state requires a corpo- ration to pay each employe in cash, weekly, under a penalty of fifty dollars for each violation,' in addition to a penalty for misde- meanor.^ The Penal Code prohibits any person on behalf of a cor- poration to coerce an employe not to become a member of a labor union.^ It prohibits also the bribery of representatives of labor or- ganizations in the discharge of their duties as such.* All of these provisions apply to a foreign corporation. Section 54 of the Stock Corporation Law^ provides that stockholders shall be personally lia- ble to laborers, servants and employes other than: contractors. This provision does not apply to a foreign corporation.* Section 48 of the Stock Corporation Law'' provides that laborers' wages for ser- vices shall be preferred claims and be entitled to payment before any other creditors out of the corporation assets in excess of other valid liens or incumbrances, and section 60^ provides for a personal liability for transfers prohibited by section 48 when made by a for- eign corporation, but it seems that the above mentioned provisions in section 48 respecting wages are not made applicable by section 60 to a foreign corporation.' It has been held that the definition by the Michigan courts of the word " labor " in a statute of that state, rendering stockholders liable for all labor performed for such corporation, will be followed by a court of this state in a suit to en- force a stockholder's liability under such statute, and that the pre- liminary judgment and execution against the corporation required by the statute, must be had in that state.'" 'Labor Law, L. 1897, ch. 415, seca. 9, 10, 11, printed in the appendix. 'Penal Code, sec. 384-1, printed in the appendix. ^ 'Id. sec. 171-A, printed in the appendix. •Id. sec. 447-F, printed in the appendix. "L. 1892, ch. 688, sec. 54, amended by L. 1901, ch. 354. •Piatt V. Larter, 94 Fed. 610, U. S. Cir. Ct., S. D. N. Y. T.. 1892, ch. 688, sec. 48, amended by L. 1901, ch. 354, printed in the appendix. 'L. 1892, ch. 688, sec. 60, added by L. 1897, ch. 384, printed in the appendix. "See sec. 141, supra. "Viele V. Wells, 9 Abb. N. C. 277. CONTEACTS. 225 CHAPTER XXVII. Contracts. § 146. Corporate power.— It has been stated already that by comity of contract the same as by comity of suit, a foreign corpora- tion may, through its agents, make valid contracts and incur bind- ing contract obligations in other states, provided such contracts are permitted to be made by its charter and by the law of the place, and are not contrary to the known policy of the state or injurious to its interests ; and so, where a corporation is authorized by its home state, in general terms, to make contracts and acquire property for the purposes of carrying on its legitimate business, and by the same authority is invested with the capacity of suing and being sued, it ™^yj ^y tbe comity which is recognized to the fullest extent in this .country, make contracts and acquire property in other states, and as to such contracts and property, may seek the remedies afforded and is bound by the obligations imposed by the laws of such states.^ The necessity of alleging power to contract will be considered here- after.^ It is no defense to an action by a foreign corporation on contract that a prospectus of the promoters of the corporation showed an illegal purpose, or that the promoters deceived the au- thorities of the home state as to the real corporate purpose, provided the certificate of incorporation showed a legal purpose only. It is no defense to such an action that the corporation has done acts which would forfeit its charter in proceedings instituted for that purpose in the home state.' So far as the individual citizen is con- cerned, contracts are protected by the liberty of contract clauses in the federal constitution;* and it has been held that a statute of Louisiana, prohibiting persons sending to insurance corporations of other states, who have not complied with a statute of that state al- ^See sec. 4, supra. 'See sec. 204, infra. 'See sec. 202, infra. ■ 'U. S. Con. Art. 4, sec. 2; Amendments 5 and 14. 15 220 PowEES AND Liabilities. lowing them to do business there, certificates required by policies of insurance made and to be performed out of that state, is contrary to the right of such person to contract.' § 147. Ultra vires. — A contract of a foreign corporation like one of a domestic corporation may be illegal or ultra vires. A con- tract "which is malum in se or malum proliibitum, that, is immoral in itself or forbidden by statute, is illegal and incapable of being the foundation of an action and the law will not recognize or en- force it, but applying the maxim ex facto illicito non oritur actio will leave the parties as it finds them ; but when an act of a corpo- ration is spoken of as ultra vires it is not intended that it is un- lawful or even such as tlie corporation cannot perform, but merely one which is not within the powers conferred upon the corporation, by its charter.' Prohibited acts have been considered already.' A contract of a corporation, not within the powers conferred on it by its charter, but otherwise lawful, is ultra vires and void, subject to the general rule in this state, that such defence interposed for or against a corporation, domestic or foreign, shall not prevail, when it will work an injustice. A corporation of another state, prohib- ited by the statute under which it was organized from exercising banking powers, can not maintain here an action based upon a transaction which was an exercise of banking powers, although its incorporators improperly inserted in its certificate of incorporation permission to exercise such powers.' It has been held that a cor- poration of one state may not do an ultra vires act in another state and that it may be enjoined there from so doing by a person irre- parably injured thereby.' If a resident of this state, holding the note of a foreign corporation for money loaned, receives for it stock of the corporation with a guaranty by the corporation that he would receive six per centum dividends thereon, and the corporation re- ■AUgeyer v. State of Louisiana, 105 U. S. 578. •Whitney Arms Co. v. Barlow, 63 N. Y. 62; Bissell v. MicHgan S. & N. I. E. R. Co., 22 N. Y. 258. 'See sees. 107-112, supra. "Bank of California v. Collins, 7 Hun, 336. •Seattle G. & E. Co. v. Citizens L. & P. Co., 123 Fed. 588, U. 8. Cir. Ct, D. Wash. N. D. Contracts. 227 pudiates the guaranty upon the ground that it was ultra vires and forbidden by the statutes of the home state, he may rescind the transaction, return the stock and recover the amount of the note "with interest. '^'' If one foreign corporation having power under the laws of its home state to purchase the stock of another foreign corporation does purchase such stock, its agreement on the back of the certificates to guaranty and pay future dividends thereon is not a guaranty of dividends so as to be ultra vires, but is a promise to pay a part of the purchase price of the stock and enforceable as a promise to pay.^^ A receiver of a foreign corporation cannot re- cover securities deposited as collateral to an ultra vires contract unless he pays back the money paid on the contract. ^^ A domestic railroad corporation, sued by the state for a forfeiture of its char- ter, because it had leased its road to a foreign railroad corporation, can not, without alleging the illegality of the lease, sue the lessee for a determination by the court of the question whether the lease is ultra vires, and if it is, for the recovery of the leased property, as the court does not lay down principles of law, but decides contro- versies.'^^ So long as an ultra vires contract is wholly executory, the court will not enforce it ;" but a purchaser of goods sold and de- livered to him by a corporation, when sued for the price, can not claim that the sale was beyond the charter powers of the vendor ; nor can a corporation set up ultra vires when sued on a contract be- tween it and another party, if the latter has performed on his part ;^^ nor can a surety on an, ultra vires contract do so when sued after "McVity V. E. D. Albro Co., 90 App. Div. 109; s. c, 86 N. Y. Supp. 144, aflfirmed without opinion, 180 N. Y. 554. "Windmuller v. Standard D. & D. Co., 106 App. Div. 246; s. c, 94 N. Y. Supp. 52. ""Dickinson v. Continental Trust Co., 23 Misc. 489; s. c, 52 N. Y. Supp. 672. See Mumford v. American L. I. & T. Co., 4 N. Y. 463. "Ogdensburg & L. C. R. R. Co. v. Vermont & C. R. R. Co., 4 Hun, 712. • "Nassau Bank v. Jones, 95 N. Y. 115; Jemison v. Citizens' Sav. Bank of J. T., 122 N. Y. 135; De la Vergne R. M. Co. v. German Sav. Inst., 175 U. S. 40. "Curtis V. Natalie A. C. Co., 89 App. Div. 61; s. c, 85 N. Y. Supp. 413, affirmed on prevailing opinion below, 181 N. Y. 543. Vought v. Eastern B. & L. Asso. of S., 172 N. Y. 508. 228 PowEES AND Liabilities. his principal has defaulted and the other party has performed." A surety on a lease between two foreign corporations may set up that the lease was a foreign contract made and to be executed in a foreign state and to be construed not according to the law of this state but according to the law of that state, and that it was ultra vires and void under the latter law. He may do so although his ■co-surety when sued set up the same defence and was defeated and he was a party to the action against his co-surety and was not sum^ moned." But a decision of the court of last resort in the foreiga state, showing that the lease was ultra vires and void under the law of that state, must be proven in evidence on the trial.^* i i '■' § 148. Other party chargeable with knowledge,— A citizen of this state dealing with a foreign corporation is chargeable with, knowledge of the powers and limitations contained in its charter, but not with those in a general statute of its home state." At pres- ent most corporations are formed by filing a certificate of incorpo- ration under the provisions of a general incorporating statute, and a party dealing with a corporation so formed is chargeable with knowledge of such statute as part of the charter. It has been held in a federal court, that if a receiver of an insurance corporation is appointed in the home state, whose laws provide for a receiver, the title of the receiver extends to assets in another state, and is prior to the title of a receiver appointed there, so far as policy holders in that other state are concerned, as they will be presumed to have acquiesced in the laws of the home state in taking out their poli- cies.^" And the Supreme Court of the United States has held that a Canada statute, arranging the affairs of a Canada railroad corpora- "Bath Gas Light Co. v. Claffy, 151 N. Y. 24. "Bath G. L. Co. v. Rowland, 84 App. Div. 563 ; s. c, 82 N. Y. Supp. 841. "Bath G. L. Co. v. Claflfy, 151 N. Y. 24. "Hoyt V. Thompson, 19 N. Y. 207; McVity v. E. D. Albro Co., 90 App. Div. 109 ; s. c, 86 N. Y. Supp. 144, affirmed without opinion, 180 N. Y. 554. ""Parsons v. Charter Oak L. Ins. Co., 31 Eed. 305, U. S. Oir. Ct., S. D. Iowa, C. D.; Eundel v. Life Asso. of A., 4 Woods, 94; s. c., 10 Fedi. 720, U. S. Cir. Ct., E. D. La.; Hudson R. P. & P. Co. v. H. H. Warner & CH, 99 Fed. 187, U. S. Cir. Ct. of Ap., 2nd Cir. CONTEACTS. 229 tion, valid in Canada as against dissenting bondholders, although their rights accrued before the passage of the statute, will be held by the United States courts to be binding on dissenting United States bondholders, although their rights accrued before the passage of the statute, as a party dealing with a foreign corporation deals with it subject to the statutes enacted and to be enacted in its home oountry.^^ § 149. Lex loci. — It cannot be said to be settled in this state whether the law of the place of contracting or the law of the place of performance governs the interpretation of a contract made in one state to be performed in another. -The tendency of the au- thorities appears to be in favor of the law of the place of perform- ance.^^ It has been held by the Circuit Court of the United States in Tennessee that it is to be presumed that the parties to a contract with a foreign corporation, made in the home state to be performed in another state, contemplate that it is to be construed according to the law of the latter state. ^^ A contract of a corporation made in the home state and affecting personal property there, is subject to the laws of that state, when sought to be enforced in a federal court for that district.^* In the absence of proof, it will be presumed that a contract between two foreign corporations was made in the home state of one of them.^^ There is no presumption that the statute law of the home state of a foreign corporation is the same as the law of this state, but unless there is evidence shovdng a difference in the law, a contract of such a corporation stipulated to be construed according to the law of the home state, will be construed according to the law of this state.^^ "•Canada S. R. E. Co. v. Gebhard, 109 U. S. 527. "Dickinson v. Edwards, 77 N. Y. 573; Wilson v. Lewiston Mill Co., 150 N. Y. 314; Hibernia Nat. Bank v. Laeombe, 84 N. Y. 367. "Caesar v. Capell, 83 Fed. 403, U. S. Cir. Ct., W. D. Tenn. "Samuel v. Holladay, 1 Woolworth, 400; s. c, 21 Fed. Cases, 306, No. 12,288, U. S. Cir. Ct., D. Kansas. ""Snow, Church & Co. v. Snow-Church Surety Co., 80 App. Div. 40; s. c, 80 N. Y. Supp. 512. "Stewart v. Union Mutual L. Ins. Co., 155 N. Y. 257. 230 Powers and Liabilities. § 150. Contracts made here. — A 'contract made here by a for- eign corporation,- to be performed here, is subject to the laws of this state regulating such a contract when made by a domestic cor- poration. In IS 50 a statute was passed" providing that no corpo- ration shall hereafter interpose the defence of usury in any action. This statute applies to foreign corporations, because the intention of the legislature was to distinguish between corporations and in- dividuals and not between two classes of corporations, as the statute grew out of considerations connected with the principles upon which the usury laws themselves are based, that is, the protpction of borrowers from the exactions of lenders, which do not apply to cor- poration to the same exte\it as to individual borrowers.^ Section 92 of the Insurance Law^' prohibits a life insurance corporation . doing business here forfeiting a policy as stated for non-payment of premium, unless a notice of the premium being due has been sent to the assured. This section applies to a policy issued by a foreign corporation doing business here as the section is as much a part of the policy as if it had been actually written into it or made a part of the stipulations.^" It does not apply to a policy between a corporation of this state and a resident of another state made in ' that state unless the policy stipulates that it is a New York contract or controlled by Xew York law." It has been held by the Supreme Court of the United States that a Missouri statute, making life in- surance policies non-forfeitable for default in payment of premi- ums, as applied to a policy of an insurance corporation of another etate, doing business in that state, is a valid condition upon its license to do business there, and does not deprive it of its liberty to contract, contrary to the federal constitution.^^ It is a rule of inter- national law that during war contracts between subjects of the belig- erent parties are suspended, and under this rule, it was held, that "L. 1850, eh. 172. "Southern Life Ins. & Trust Co. v. Packer, 17 N. Y. 51. "L. 1892, ch. 690, sec. 92, as amended by L. 1897, ch. 218, revising L. 1876, ch. 341. "Strauss v. Union C. L. Ins. Co., 170 N. Y. 349. "Mutual Life Ins. Co. v. Hill, 193 U. S. 551. "New York L. Ins. Co. v. Cravens, 178 U. S. 389. CONTEACTS. 231 the payment of premiums and the liability on a policy of insurance issued here on the life of a subject of one of the seceding states, by a British life insurance corporation doing business in this state, after complying with the statutes of this state entitling it so to do, was suspended during the war of secession, as such British corporation is subject to the same obligations as to its contracts made here, as a domestic corporation is.'^ It has been held that a ISTew York trus- tee of a railroad consolidation agreement, under which the stock of four foreign railroad corporations is deposited with it, is not guilty of negligence, because it fails to have the stock transferred to it as legal owner on the books of one of the corporations in the home state, as required by a statute of that state, contrary to the common law, thus allowing it to be attached in that state for debt of the former owner, as the trustee may assume that the law of that state is the same as the law of this state, especially as the agreement was made here to be performed here.^* § 151. Power of officers and agents. — A purchaser of goods can- not avoid personal liability by setting up that his purchasei was for a foreign corporation of which he was president unless he disclosed to the seller at the time of sale that he was acting for the corpora- tion.^^ A receiver of a foreign corporation, appointed in the home state, with authority to carry on business, has authority as receiver to purchase supplies to complete the corporation's contracts, and having disclosed his character to the vendor, can not be held per- sonally responsible.^^ If the charter of a foreign corporation au- thorizes its president to open an oiSce in this state, it gives him implied authority to bind the corporation by purchasing furni- ture for such office." The president of a foreign corporation, hav- ing charter power to mine and sell coal and transport it to market, "Martine v. International Life Ins. Soc. of London, 53 N. Y. 339. "New Jersey Con. Co. v. Farmers' L. & T. Co., 39 Misc. 672; s. c, 80 N. Y. Supp. 622. ''Cook V. Williams, 85 N. Y. Supp. 1123. "Sager Mfg. Co. v. Smith, 45 App. Div. 358; s. c, 60 N. Y. Supp. 849, affirmed without opinion, 167 N. Y. 600. "Cross V. Anglo-American Banking Co., 79 Hun, 424; s. c, 29 N. Y. Supp. fl60. 232 Powers and Liabilities. formed upon the re-organization of a predecessor corporation, has power under his general power as president to make a contract with a customer of the old corporation, who marketed its product and made advances to it against future shipments, to assume the out- standing debt of the old corporation to such customer arising from such advances in consideration of his continuing to market its fu- ture product and make advances to it. Even if such contract is ultra vires or beyond the power of the president the new corpora- tion cannot set up such defence after the contract is executed by the customer by marketing its future product and making advances to it.^ If a contract by a foreign corporation to sell coal is exe- cuted on its behalf by its secretary, without express authority so to do, and the by-laws prescribe that no such contract shall be valid unless authorized or ratified by the directors, a ratification thereof may be inferred, if part of the coal is delivered under the fontract, and if the secretary has actual authority to fix the rates at which coal shall be sold to the party contracted with, and if subsequent communications are sent by such party to the corporation at its office in this state, to which he receives replies signed by such secre- tary.^' A certificate of a foreign corporation under seal signed by its president as such, designating. an agent on whom process may be served as required by a state statute, is sufficient proof that such president is such and authorized to sign a contract of the corpora- tion to construct a canal.*° A foreign insurance corporation will be presumed to have authorized its general agent of several coun- ties in this state to appoint sub-agents, who may bind the corpora- tion on policies to the same extent as the general agent could do, as the latter could not have attended to all the business delegated to him, in person, and he must have powers commensurate to the business carried on under his supervision." "Curtis V. Natalie A. C. Co., 89 App. Div. 61; o. c, 85 N. Y. Supp. 413, affirmed on prevailing opinion below, 181 N. Y. 543. "Hamilton Coal Co. v. Bernhard, 61 Hun, 624; s. c., 16 N. Y. Supp. 55. "Owyhee L. & I. Co. v. Tautphas, 121 Fed. 343, U. S. Cir. Ct. of Ap., 9tb Cir. "Kuney v. Amazon Ins. Co., 36 Hun, 66. CONTEACTS. 233 . . ■ ^^^ of consolidation. Contract for preference. Re- contract — ^Under the Code of Civil Procedure, provid- 8 esident of this state may sue a foreign corporation for any cause of action/^ a ISTew York stockholder of a Pennsylvania corporation, which ceased to exist through consolidation with an- other corporation of the latter state, may sue such consolidated cor- poration for the specific performance of the consolidation agree- ment to deliver to his corporation certain bonds, stock and cash of the consolidated corporation, for the benefit of himself and his fellow stockholders.^^ It has been held, that the New Jersey rule that a director of an insolvent corporation can not obtain a prefer- ence by an act of the directors, can not defeat a contract so made between him and the directors, but may defeat an attachment or ex- ecution which would accomplish the preference. This decision was put, not on the authority of a statute of that state, but on the equity rule, enunciated by its court of last resort, that the assets of an insolvent corporation are a trust fund for all creditors." If a receiver of a foreign corporation, appointed in the home state, sub- stituted as defendant in an action for the rescission of a contract of sale, agrees to a settlement by which the rescission is denied, a third party, who is an endorser on notes forming the consideration for the contract, and who is also a stockholder and creditor of the corporation, and who would remain liable on the notes if the settle- ment was consummated, is entitled to intervene under the Code of Civil Procedure.*^ "Code Civil Pro., sec. 1780, printed in the appendix. '"Babcock v. Schuylkill & L. V. Ky. Co., 56 Hiin, 649; s. c, 9 N. Y. Supp. 845. "Welling V. Ivoroyd M. Co., 15 App. Div. 116; s. c, 44 N. Y. Supp.. 374, affirmed without opinion, 162 N. Y. 599. *°Code Civil Pro., sec. 452. Hosmer v. Darrah, 85 App. Div. 485; s. c, 83 N. Y.Supp. 413. 234' PowEES AWD Liabilities. CHAPTEE. XXVIII. HbxDiNG Real Peoferty. § 153. Corporate power. — A foreign corporation having cnarter authority to purchase, improve, sell and exchange real property and to conduct its business in this state, and a certificate from the sec- retary of this state authorizing it to do business here, may like a natural person of another state buy, hold and sell real property here for purposes connected with the necessities for corporate use and also for purposes not so connected. This is the construction placed by the Court of Appeals on sections 15 and 1& of the Gen- eral Corporation Law, irrespective of the language in sections IT and 18 of the same law, as the former sections by implication ac- cord to a foreign corporation, upon its compliance with the condi- tions stated, the same rights to transact its charter business here as a domestic corporation has, if the business be one whicli a domestio corporation may lawfully transact.' Sections 15 and 16, as hereto- fore stated, provide that no foreign corporation other than a monied corporation, shall do business here without having first procured from the secretary of state a certificate authorizing it so to do.* Section 17 authorizes any foreign corporation created under the laws of the United States or of any state or territory thereof, and doing business here, to acquire such real property here as va&j be necessary for its corporate purposes in the transaction of its busi- ness here, and convey the same by deed' or otherwise in the same manner as a domestic corporation.' Section 18 provides that any foreign corporation may purchase at a sale upon the foreclosure of any mortgage held by it, or upon any judgment or decree for debts due it, or upon any settlement to secure such debts, any real prop- erty within this state covered by or subject to such mortgage, judg- ment, decree or settlement, and may take by devise any real prop- erty situated within this state and hold the same for not exceeding 'Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. 'L. 1892, ch. 687, sees. 15, 16, printed in tlie appendix. •■ "Id., see. 17, printed in the appendix. Holding Real Property. 235 five years from the date of such purchase or from the time when the right to the possession thereof vests in such devisee, and convey it by deed or otherwise in the same manner as a domestic corporation.* Congress has no power, under the interstate commerce clause or other clauses of the federal constitution, to limit the acquiring or disposition of property in other states by a corporation of one state, although such property or its product may become the subject of in- terstate commerce.^ § 154. By deed or contract or for debt.— It is settled that a cor- poration having charter authority to hold real property may take it by grajit in another state, unless prohibited from so doing by its own charter or by a statute or the public policy of the other state, and some aflBrmative act or statute prohibiting it from doing busi- ness there or holding land there is necessary.' It is not incapaci- tated from holding and dealing in lands in another state because it does no business in its home state.' It is no objection to a contract for the exchange of real property made with a foreign corporation, that its incorporators are with one exception citizens of this state, or that it has failed to comply fully with the home state incorpo- rating statutes, as a party dealing with a foreign corporation which has attempted to comply with such a statute and is acting there-, under, may not dispute that it is a corporation cte facto; nor is it an objection to such a contract that the corporation, having some charter power to deal in real property, exceeded such power, as the state only can object, and the party dealing 'ivith the corporation is estopped.' At an early date, it was held in the federal courts that unless prohibited by statute, a corporation of one state may take and hold lands in another state for debt through comity;' or may *Id., see. 18, printed in the appendix. "In re Greene, 52 Fed. 104, U. S. Cir. Ct., S. D. Ohio, W. D. "Cowell V. Springs Co., 100 U. S. 55; Christian Union v. Yount, 101 U. S. 352; Runyan v. The Lessee, 39 U. S. (14 Peters) 122; Blodgett v. Lanyon Zino Co., 120 Fed. 893, U. S. Cir. Ct. of Ap., 8th Cir. 'New Hampshire Land Co. v. Tilton, 19 Fed. 73, U. S. Cir. Ct., D. N. H. 'Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. "New York Dry Dock v. Hicks, 5 McLean, 111; s. c, 18 Fed. Cases, 151, No. 10,204, U. S. Cir. Ct., D. Mich. 236 PowEES AND Liabilities, take an assignment of a mortgage on land in another state for debt, foreclose the mortgage and buy in and hold the land.^" It has been held in this state that a banking corporation of another state may buy real property here at foreclosure sale if authorized by its char- ter to hold real property necessary in the convenient transaction of its business ; and if the foreclosure suit is brought by a third party, the court, in order to sustain the title of the property in subsequent grantees, will presume that the corporation took the property for debt by arrangement with such third party.'^ Since the construc- tion placed on sections 15 and 16 of the General Corporation Law above referred to, there is no doubt of the existence in a foreign; corporation, having charter authority and complying with those sections, of ample power in the premises. § 155. Corporation not doing business here. Corporation doing business here without a certificate. Alien corporation. Deed in trust. Acknowledgments. — A foreign corporation hav- ing charter power to hold real property and not doing business in this state may hold real property here as provided by section 18 of the General Corporation Law and not otherwise.''^ If it is doing business here without a certificate of authority under section 15 of the General Corporation Law a deed of land to it is malum prohibitum. The validity of such an act has been considered already.-'^ It is not clear that the above mentioned construction placed on sections 15 and 16 by the Court of Appeals applies to alien corporations, that is those foreign to the United States. Sec- tion 17, allowing the holding of real property necessary for corpo- rate use, excludes alien corporations from that right. Such exclu- sion was inserted by an amendment, made in 1892," showing a pub- lic policy in this state that an alien corporation should not hold •"Farmers' L. & T. Co. v. McKinney, 6 McLean, 1 ; s. c, 8 Fed. Cases, 1048. No. 4,667, U. S. Cir. Ct., D. Mich. "Alward v. Holmes, 10 Abb. N. C. 96. "L. 1892, ch. 687, sec. 18, printed in the appendix. Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. "See sec. 26, supra. ' "L. 1892, ch. 687, sec. 17, printed in the appendix, amendi&g L. 1890, ch. S63, sec. 12. Holding Eeal Peopebtt. 23Y real property kere, except as permitted by section 18, tliat is for five years, when taken for debt or by devise. This amendment to section 17 was enacted in the first instance at the same time as sec- tion 15 and must be deemed a limitation on the latter section. If a foreign corporation takes title to real property in the name of its lawyer as trustee for itself, such trust is a passive trust, and no title vests in the trustee, but the land is subject to be levied on under a warrant of attachment against the property of the corpo- ration.-^^ It is provided in the Real Property Law that the ac- knowledgment of a conveyance or other instrument by a corporalon, must be made by some officer thereof authorized to execute the same by the board of directors, and that the acknowledgment must be in a prescribed form.'* "Wright V. Douglass, 2 N. Y. 373 ; s. c, second appeal, 7 N. Y. 564. "L. 1896, ch. 547, sec. 258, printed in the appendix. 238 PowEES AND Liabilities. GHAPTEE XXIX. Devise and Bequest. § 156. Validity. — A corporation of another state cannot take land in this state by devise unless authorized by a statute of this state, although its charter or a statute of its home state gives it such authority, and the statute of wills of tliis state,^ al- lowing a devise to a corporation authorized by charter or statute to take by devise, refers to a charter or a statute of this state only.^ Section 18 of the General Corporation Law was amended in 1894 by inserting a provision that any foreign cor- poration may take by devise any real property within this state and hold the same for not exceeding five years from the time when the right to the possession thereof vests in such devisee, and convey it by deed or otherwise in the same manner as a domestic corporation.* This amendment to section 18 was made in 1894 and is a limitation on section 15 enacted in 1892, and referred to in the preceding chapter. It is the only authority for a devise of land here to a foreign corporation. A bequest of land equitably converted into personalty is valid.* There being no statute of this state prohibiting it, or prohibiting a domestic corporation tak- ing by bequest to indicate a state policy on the subject, a bequest of personalty by a resident of this state to a foreign corporation au- thorized by its charter or a statute of its home state to take the same, is valid.^ Bequests to Harvard College for educational pur- '2 R. S. 57, sec. 3. nVhite V. Howard, 46 N. Y. 144; Draper v. President & Fellows of H. C, 57 How. Pr. 209. 'L. 1892, eh. 687, sec. 18, amended by L. 1894, eh. 136, printed in the ap- pendix. •Draper v. President & Fellows of H. C, supra. "Sherwood v. American Bible Soc, 1 Keyes, 561; s. c, 4 Abb. Ct. of Ap. 227; Draper v. President & Fellows of H. C, supra; Riley v. Diggs, 2 Dem. 184; Matter of Bullock, 6 Dem. 335; Matter of Leo- Wolf, 25 Misc. 469; s. c, 55 N. Y. Supp. 650. Devise and Bequest. 239 poses,^ to a town in Massachusetts to the use of the poor/ to Yale College to apply the income to educate the testator's descendants/ and to charitable and educational corporations of Pennsylvania for their corporate purposes/ are valid as bequests, but the validity of the use in each case should be determined by the court of the other state after the payment of the bequest.'" A statute of this state for the incorporation of benevolent, charitable, scientific and mission- ary societies, provides that any corporation formed under that statute may take property by devise or bequest provided no tes- tator having wife, child or parent shall devise or bequeath more than one-fourth of his estate, and provided the will is not executed within two months of testator's death.-'' This statute does not af- fect a bequest to a foreign corporation, nor does it evidence a public policy of this state to make it apply to all like corporations, as there are many similar incorporating statutes without such pro- vision.'^ A statute of this state provides that no person having a husband, wife, child or parent, shall devise or bequeath to any be- nevolent, charitable, literary, scientific, religious or missionary cor- poration, more than one-half of his or her estate.'^ This statute applies to a foreign corporation of the kind stated.'* 'Draper v. President & Fellows of H. C, supra. 'Kennedy v. Town of Palmer, 1 T. & C. 581. 'Maniee v. Manice, 43 N. Y. 303. "Chamberlain v. Chamberlain, 43 N. Y. 424. "Eobb V. Washington & J. College, 103 App. Div. 327; s. c, 93 N. Y. Supp. 92. "L. 1848, ch. 319, see. 6, amended by L. 1903, eh. 623, by increasing the amount to one-half of his estate. "Hollis V. Drew Theol. Seminary, 95 N. Y. 166; Matter of Lampson, 161 N. Y. 511. "L. 1860, ch. 360. "Trustees of Amherst College v. Ritch, 151 N. Y. 282; Scott v. Ives, 22 Misc. 749; s. c, 51 N. Y. Supp. 49. 240 Powers and Liabilities. CHAPTER XXX. MoETGAGES. § 157. Property here. — ^A corporation of another state with, power to mortgage, doing business in this state, may mortgage its property here unless prohibited by the laws or public policy of this state,^ and there is no such prohibition in this state. The statutes of this state regulating the increase of capital stock, and the cor- porate power to contract debts, to issue bonds and to execute mort- gages do not control the action of a foreign corporation.^ Whenever any mortgage affecting property or franchises within this state heretofore or hereafter executed by authority of the board of directors in behalf of any stock corporation, domestic or foreign, of any description, recites or represents in substance or effect that the execution of such mortgage has been duly consented to, or au- thorized by stockholders, such recital or representation in any such mortgage, after public record thereof within this state, shall be presumptive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law. After any such mortgage heretofore or hereafter shall have been publicly recorded for more than one year in one or more of the counties of this state contain- ing the mortgaged premises or any part thereof, and the corpora- tion shall have received value for bonds actually issued under and secured by such mortgage, and interest shall have been paid on any of such bonds according to the terms thereof, such recital or repre- sentation of such mortgage so recorded shall be conclusive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any pro- vision of law, and its validity shall not be impaired by reason of 'American Waterworks Co. of I. v. Farmers' L. & T. Co., 20 C. C. A. 133; s. c, 73 Fed. 956, U. S. Cir. Ct. of Ap., 8th Clr., writ of certiorari refused without opinion, 163 U. S. 675; Lancaster v. Amsterdam Imp. Co., 140 N. Y- 576. 'Ernst V. Rutherford & B. S. Gas Co., 38 App. Div. 388 ; s. c, 56 N. Y. Supp. 403. Mortgages. 241 any defect or insufficiency of consent or authority of stockholders or in filing or recording such consent or authority, and such mort- gage shall he valid and binding upon the corporation, and those claiming under it, as security for all valid bonds issued or to be is- sued thereunder, unless such mortgage shall be adjudged invalid in an action begun as belov7 provided. The invalidity of any such mortgage, because of insufficiency of consent by stockholders, may be adjudged in any action for such purpose begun within one year after the earliest record of such mortgage in any county in this state, provided that such action shall have been so begun by or in behalf of the corporation by direction of the board of directors acting in their own discretion, or upon the written request of the holders -of not less than one-third of the capital stock of the corpo- ration ; and in any such action so begun by or in behalf of the cor- poration, the recitals or representations of the mortgage shall be presumptive evidence only as first above provided.^ If the statutes of a state provide that a foreign cor- poration shall not do business there on conditions more favorable than those prescribed for a corporation of that state, and that a mortgage of a mining corporation shall not be made unless ratified by two-thirds of the capital stock, a mortgage by a corporation of another state on mining ground in that state is void unless so ratified.* A minority stockholder of a foreign corporation, doing business in this state, where all its prop- erty is situated, may sue to restrain the foreclosure of a fraudulent mortgage given by the directors, to set aside the sale of the mort- gage bonds, and to recover assets fraudulently transferred to a rival, and for a receiver of the corporation with power to sue directors for their devastavit, as such a corporation is amenable to the laws of this state to the same extent as a domestic corporation is.^ 'L. 1892, eh. 688, sec. 8, added to article I by L. 1901, ch. 354, printed in the appendix. According to sec. 1 of article I, no part of that article applies to monied corporations, but in the body of section 8 it is stated to apply to any corporation, and such seems to have been the legislative intent. 'Williams v. Gaylord, 102 Fed. 372, U. S. Cir. Ct. of Ap., 9th Cir.; Williams V. Gold H. M. Co., 96 Fed. 454, U. S. Cir. Ct., N. D. Cal. "Gray v. Fuller, 17 App. Div. 29; s. c., 44 N. Y. Supp. 883. See Recent Cases of Visitation, sec. 238, infra. 16 24:2 ' Powers and Liabilities. § 158. Property out of this state. — ^A court of this state, at the suit of a creditor having a judgment here against a foreign corpo- ration, will not enjoin the corporation issuing a mortgage on its property out of this state, as the judgment cannot become a lien ou such property, and as a court of this state will not interfere except to aid the creditor in collecting his judgment.^ If a foreign corpo- ration executes a mortgage on its lands in its home state, and ap- points a trust company of this state trustee, and suoh trust com- pany passes into the hands of a receiver, a court of this state, on an application in the receivership action, made by resident bondhold- ers, may appoint another trust company to be substituted trustee, and service of notice of such application on the foreign corpora- tion may be made on an ofBcer under the Code of Civil Procedure the same as service of a summons.' A federal court, having juris- diction over mortgaged property in its territorial jurisdiction, may sell in one suit, all the mortgaged property in three states, covered by a mortgage of a consolidated corporation, consolidating three corporations of separate states ; and a corporation organized by an act of one state, procuring duplicate legislation in an adjoining state, and doing business there, and reciting its existence as a cor- poration of the adjoining state in its corporate bonds and mortgage, is estopped from disputing the jurisdiction of the federal court over it as a corporation of that district, in a suit to foreclose sucb mortgage, although it never organized separately there.* § 159. Malum prohibitum. Foreclosure by advertisement. Bonds. — A mortgage taken here by a foreign corporation which has not procured the necessary certificate of authority to do busi- ness here, unless it is the only transaction,' is a contract malum pro- hibitum. The validity of such a contract has been considered- "Rogers v. Michigan S. & N. I. E. R. Co., 28 Barb. 539. 'People V. American Loan & T. Co. of N. Y., 62 Hun, 622 ; s. c, 17 N. Y. Supp. 76. 'Blackburn v. Selma M. & M. Co., 2 Flip. 525 ; s. c, 3 Fed. Cases, 526, No. 1,467, U. S. Cir. Ct., W. D. Tenn. 'See sec. 9, supra. MOETGAGES. 243 already.^" Where a mortgage upon real' property is foreclosed by ■ advertisement, service of the notice of sale upon the mortgagor, be- ing a foreign corporation, may be made upon it without the state at least twenty-eight days before the day of sale." If a foreign corporation deposits money with a domestic trust company to pay coupons on its bonds presently to become due, the title to the money passes to the trust company as trustee for the coupon holders.^ "See sec. 26, supra. "Code Civil Pro., sec. 2389. "Holland Trust Co. v. Sutherland, 177 N. Y. 327. P^RT III. Suits By and Against. OHAPTEE XXXI. Action by a Foreign Ooepoeation. § 160. Power to sue.— Section 1779 of the Code of Civil Pro- cedure provides that an action may be maintained by a foreign cor- poration in like manner and subject to the same regulations as where the action is brought by a domestic corporation except as otherwise specially prescribed by law. It provides further that a foreign corporation cannot maintain an action founded upon an act or upon a liability or obligation, express or implied, arising out of or made and entered into in consideration of an act which the laws of this state forbid a corporation or association of individuals to do without express authority of law/ The authorities hold that a corporation created by or under the laws of another state or of the United States or of another country, with power to sue, may sue in a court of this state.^ It may sue in the City Court of the city of New York.^ Likewise it may sue in a federal court in this state.^ The state or federal court, however, in a given case, from 'Code Civil Pro., sec. 1779, printed in the appendix. ^Silver Lake Bank v. North, 4 John. Ch. 370; Williams v. Bank of Michi- gan, 7 Wend. 539; United States Bank v. Stearns, 15 Wend. 314; Boston B. B. Asso. V. Brooklyn B. B. Club, 37 Misc. 521; s. c, 75 N. Y. Supp. 1076. 'Globe Yam Mills v. Bilbrough, 2 Misc. 100; s. c, 21 N. Y. Supp. 2. •Insurance Co. v. C. D. Jr., 1 Woods, 72; s. c, 13 Fed. Cases, 65, No. 7,051, U. S. Cir. Ct., E. D. La.; Tombigbee R. R. Co. v. Kneeland, 45 U. S. (4 How.) 16; Union Cement Co. v. Noble, 15 Fed. 502, U, S. Cir. Ct., W. D. Mich., S. D.j Taylor v. Holmes, 14 Fed. 498, U. S. Cir. Ct, W. D. N. C, affirmed 127 U. S. 489. (245) 246 Suits Bt and Against. motives of policy, may refuse to entertain the action.^ A foreign corporation plaintiff may be compelled to give security for costs of suit, as will be considered hereafter." Section 1780 of the Code of Civil Procedure provides for an action against a foreign corpora- tion.' It has no application to an action by a foreign corporation.' The granting of an injunction in favor of a foreign corporation will be considered hereafter.' A foreign corporation may file and fore- close a mechanics' lien in this state." § 161. Assigned claim. — ^A court of this state will recognize the assignment by a receiver of an insolvent foreign corporation, ap- pointed in the home state, of the choses in action in this state of such corporation, and the assignee may sue thereon in such court." In an action by an assignee of a foreign corporation of a cause of action owned by. it, an assignment executed by the treasurer, in the corporate name, under the corporate seal, is, as to the defendant, prima facie evidence of execution by the proper authority, although, as between the assignee and the corporation, it may be shown that such execution was not authorized.^^ The effect of an assignment of a chose in action by a foreign corporation on the ju- risdiction of a federal court will be considered hereafter. ■'' Its effect on the prohibition against suit upon failure to obtain a cer- tificate of authority to do business in this state has been considered already." 'Colorado State Bank v. Gallagher, 76 Hun, 310; s. c, 27 N. Y. Supp. 088, appeal dismissed without opinion, 142 N. Y. 645. 'See sec. 195, infra. 'See sees. 102-169, infra. 'Colorado State Bank v. Gallagher, supra. 'See sec. 249, infra. '"X. Y. Architectural T. C. Co. v. Williams, 102 App. Div, Ij 8. c, 92 N. Y. Bupp. 808. "Hoyt V. Thompson, 5 N. Y. 320. "Seeley v. Morgan, 49 N. Y. Superior, 346. "See sec. 224, infra. "See sec. 28, supra. Action Against Foreign C'oepoiiation. 247 CHAPTER XXXII. Action Against a Foeeign Ooepoeation. § 162. By a resident. — An action against a foreign corporation may be maintained by a resident of this state, or by a domestic cor- poration, for any cause of action;^ although property beyond the jurisdiction may be affected by the judgment, and although the court has not power to grant all the relief to which the plaintiff is entitled;^ but a court of this state has not greater jurisdiction over a foreign corporation that it has over a natural person.' An action by a resident, however, is subject to the limitation that a court of this state will not exercise visitorial jurisdiction over a foreign cor- poration or interfere in the administration of its internal affairs. It has been considered already how far a court of this state will enjoin the use of a corporate name by a foreign corporation,* the fraudulent or illegal issue or transfer of stock, the use of the pro- ceeds of stock fraudulently or illegally issued, the retirement of stock, and the declaration of dividends.^ It will be considered hereafter to what extent a court of this state at the suit of a resi- dent will exercise visitorial jurisdiction over a foreign corporation in other matters.* In construing the Code of Civil Procedure, a national bank, or- ganized under an act of congress and located in this state, is a do- mestic corporation and may sue a foreign corporation here on any cause of action.'' It has been held by the Appellate Division of the Supreme Court by a divided court that section 1780 of 'Code Civil Pro., sec. 1780, printed in the appendix. =Sims V. Bonner, 60 N. Y. Superior, 70; s. c, 16 N. Y. Supp. 801; Ervin v. Oregon R. & N. Co., 62 How. Pr. 490, affirmed 28 Hun, 269. "Ernst V. Rutherford & B. S. G. Co., 38 App. Div. 388; s. c, 56 N. Y. Supp. 403. *See sec. 86, supra. "See sees. 94-96, supra. 'See sees. 236-260, infra. "Market Nat. Bank of N. Y. v. Pacific Nat. Bank of Boston, 4 Monthly Law Bui. 82 J Code Civil Pro., sec. 3343. 248 Suits By and Against. the Code of Civil Procedure authorizes an action in a proper case by a resident stockholder of a foreign corpo- ration to cancel a contract between the corporation and another, for- eign corporation, although the action would not lie between the two corporations.' A court of this state has jurisdiction of an action by the people of the state of 'New. York against a foreign rail- road corporation to remove a nuisance erected by the corporation in the waters of this state f and of an action by a resident of this state against a foreign corporation for the sale of bonds deposited by the latter as collateral to its promissory notes ;" or for damages for a tort committed out of the state." In an action last mentioned a statute of the state where the tort was committed, affecting lia- bility therefor, is controlling here.^^ A court of this state will take jurisdiction of a statutory cause of action by a resident here against a foreign corporation under a statute of another state for death by negligence in that state, if this state has a similar although not identical statute.^* In such a. case the statute of the other state must be pleaded and proven as part of the cause of action ;" but it is not necessary to plead the statute in full, or to show that the cause of action pleaded was one, which, under the laws of the home state, could have been enforced there. ■'^ The action will not lie if the foreign statute is so dissimilar to the like statute of this state as to be incapable of enforcement in this state. Verbal ex- pert testimony of the meaning of doubtful provisions of the foreign, statute is competent.''^ 'Jacobs V. Mexican S. E. Co., 104 App. Div. 242 ; s. c, 93 N. Y. Supp. 776. 'People V. Central E. E. of N. J., 42 N. Y. 283. "Coffin V. Chicago X. P. C. Co., 67 Barb. 337. "Flynn v. Central E. E. of X. J., 15 N. Y. Supp. 328; Liscomb v. New- Jersey E. E. & T. Co., 6 Lansing, 75 ; Mackey v. Mexican Cent. Ey. Co., 78 N. Y. Supp. 966. '^Voshefskey v. Hillside, C. & I. Co., 21 App. Div. 168; s. c, 47 N. Y. Supp. 386. "Strauss v. New York, N. H. & H. E. E. Co., 91 App. Div. 583; s. c, 87 N. Y. Supp. 67; Boyle v. Southern Ey. Co., 36 Misc. 289; s. c, 73 N. Y. Supp. 465. "Debevoise v. New York, L. E. & W. E. E. Co., 98 N. Y. 377. '^Gurney v. Grand Trunk Ey. Co., 59 Hun, 622 ; s. c, 13 N. Y. Supp. 645. "Slater v. Mexican N. E. E. Co., 194 U. S. 120. Action Against Foreign Corpoeation. 249 A New York stockkolder of a foreign corporation, which ceased to exist through consolidation with another foreign corporation, may sue the consolidated corporation formed in the foreign state for s.pecific performance of the consolidation agreement to deliver to his corporation, certain bonds, stock and cash of the consolidated corporation for the benefit of himself and his fellow stockholders." If a foreign corporation executes a mortgage on its lands in its home state to secure its bonds, and appoints a trust company of this state trustee, and such trust company passes into the hands of a receiver, a court of this state, on an application in the re- ceiveiwhip action, made by bondholders of this state, may appoint another trust company of this state substituted trustee.^* A resi- dent of the city of New York, within the territory forming that city prior to June 6, 1895, when additional territory was added to the city, but not subjected to the jurisdiction of the City Court of the city of New York may sue a foreign corporation in that court for any cause of action of which that court may take juris- diction against any defendant." § 163. Assigned claim. Resident executor. Change of res'i- dence. Proof. — It is not fraudulent or illegal for a non-resident of this state to assign a cause of action against a foreign corporation arising out of this state to a resident, so as to give a court of this state jurisdiction under section 1780 of the Code of Civil Proced- ure.^" But such an assignment, made during the pendency of an ac- tion brought by the assignor, will not authorize a supplemental sum- mons bringing in the assignee as plaintiff, as the assignment could not have the retro-active effect of creating the right to enforce a cause of action, which did not exist in favor of the assignor when the action was commenced.^^ A resident executor of a non-resident "Babeock v. Schuylkill & L. V. Ky. Co., 56 Hun, 649; s. c, 9 N. Y. Supp. 845. "People V. American L. & T. Co. of N. Y., 62 Hun, 622; s. c, 17 N. Y. Supp. 76. '"Hand t. Society for S. of C, 18 N. Y. Supp. 157, aflSrmed without opinion, 19 N. Y. Supp. 910. =°McBride v. Farmers' Bank of S. O., 26 N. Y. 450.. "Ervin v. Oregon R. & N. Co., 28 Hun, 269. 250 Suits By and Agaiitst. of this state, with letters of administration from a court of this state, may sue a foreign corporation here on a life insurance policy on the life of his testator ;^^ or on a tort committed out of the state.^^ But a non-resident, appointed administrator by a court of this state, does not become thereby a resident here, so as to sue a foreign corporation here on a tort committed elsewhere;^* nor will a court of this state acquire jurisdiction of an action by a resident administrator of a non-resident against a foreign corpora- tion, on a tort committed out of the state, if property of the dece- dent was brought into this state, after his death, for the purpose only of giving a court of this state jurisdiction to appoint an ad- ministrator, as that would be fraud, and the appointment of the administrator may be attacked collaterally for fraud. ^^ A resident of a foreign state, appointed administrator of the estate of a per- son killed in that state through the negligence of a corporation of that state,^° or a resident of such state injured there through such negligence,^' may become a resident of this state, and sue the cor- poration here for damages. The residence of the plaintiff, for the purposes of jurisdiction of a court of this state of an action against a foreign corporation on a cause of action arising out of this state, upon conflicting evidence, is a question of fact for the jury.^* If, in an action against a foreign corporation, on a tort committed out of the state, an allegation in the complaint, that the plaintiff is a resident of this state, is denied by the answer, and the plaintiff testifies that he resides in the state, and no point is made by the defendant that it is not proven that he was such resident at the time of the commencement of the action, a general verdict for the ^'Palmer v. Phoenix M. L. Ins. Co., 84 N. Y. 63. ■"Gurney v. Grand Trunk Ry. Co., 59 Hun, 626; s. c, 13 N. Y. Supp. 645. "Robinson v. Oceanic S. N. Co., Ltd., 112 N. Y. 315. =«'Hoes V. Xew York, N. H. & H. R. R. Co., 173 N. Y. 435. '"Bump V. New York, N. H. & H. R. R. Co., 38 App. Div. 60; s. c, 55 N. Y. Supp. 962, affirmed on opinion below, 165 N. Y. 636. ="Voshefskey v. Hillside C. & I. Co., 21 App. Div. 168; s. c, 47 N. Y. Supp. 386. ^Phelps V. New York, N. H. & H. R. R. Co., 17 App. Div. 392; b. c, 45 N. y. Supp. 178. Action Against Eoeeign Cokpoeation. 251 plaintiff will not be set aside on the ground that the court did not have jurisdiction of the subject-matter under section 1780.^' § 164. By a non-resident —Section 1780 of the Code of Civil Procedure provides that an action against a foreign corporation may be maintained by another foreign corporation, or by a non-resident, in one of the following cases only : 1. Where the action is brought to recover damages for the breach of a contract, made within the state, or relating to property situated within the state, at the time of the making thereof ; 2. where it is brought to recover real prop- erty situated within the state, or a chattel, wTiich is replevied within the state ; or 3. where the cause of action arose within the state, except where the object of the action is to affect the title to real property situated without the state.^" This section author- izes an action in personam, and the granting and levy of a warrant of attachment against property, or other proceeding in rem, is not necessary to give jurisdiction.'^ It applied to an action against a foreign corporation in a District Court of the former city of New York, and it applies undoubtedly to such an action in the Munici- pal Court of the present city, which is successor to the former Dis- trict Court. '^ It has no effect on an action by a foreign corporation against a non-resident, but in such case the court has jurisdiction independently of the statute, but maj', in a given case, from motives of policy, refuse to exercise it.'' The Revised Statutes allowed an action against a foreign corporation by a ■ non-resident or another foreign corporation for debt or damages arising on a contract, made, executed or delivered in this state, or upon any cause of action arising here,'* and the former Code of Procedure allowed such an action where the cause of action arose here, or the subject of the ""Barker v. Cunard S. S. Co., 91 Hun, 495; s. c, 36 N. Y. Supp. 256, affirmed without opinion, 157 N. Y. 693. "Code Civil Pro., see. 1780, printed in the appendix. "Gibbs V. Queen Ins. Co., 63 N. Y. 114, overruling Ogdensburg & C. R. R. Co. V. Vermont & C. R. R. Co., 16 Abb. Pr. 249. ^Progressive P. Co. v. Wrought Iron B. Co., 14 Misc. 23; s. c, 35 N. Y. Supp. 130. ""Colorado State Bank v. Gallagher, 76 Hun, 310; s. c, 27 N. Y. Supp. 688, appeal dismissed without opinion, 142 N. Y. 645. "2 R. S. 459, see. 15, as amended by L. 1849, ch. 107, revised in see. 1780, supra. 252 Suits By and Against. action is situated here.^^ The present Code of Civil Procedure omits the action for damages arising on a contract executed and delivered here, if made elsewhere, and adds in place of it, an action for damages for breach of a contract relating to property in- this state at the time of the making of the contract. It omits also the action where the subject thereof is situated here, and adds in place of it an action brought to recover real property situated here or a chattel replevied here. A court of this state has no jurisdiction of an action by a foreign corporation or a non-resident of this state against a foreign corpo- ration on a cause of action not specified in section 1780 ;'° although the action is by joint plaintiffs, some of them residents and some non-residents of this state ;^' and although domestic corporations and residents of this state are joined as defendants.^^ Answering on the merits without raising the question,^^ or the voluntary gen- eral appearance of the corporation,*" or its actual consent" does '"Code Pro., sec. 427, revised in sec. 1780, supra. It was held under the Code of Procedure that the subject of an action by a non-resident against a foreign corporation, where a warrant of attachment is granted, is not the property attached, but the claim asserted by the plaintiflF, the satisfaction of which he seeks out of the property attached. Whitehead v. Buffalo & L. H. Ky. Co., 18 How. Pr. 218. "Eobinson v. Oceanic S. N. Co., Ltd., 112 N. Y. 315; Brooks v. Mexican N. C. Co., 50 N. Y. Superior, 281; Gait v. Provident Sav. Bank, 18 Abb. N. C. 431; Adams v. Penn Bank of P., 35 Hun, 393; Duquesne Club of P. v. Penn Bank of P., 35 Hun, 390 ; Eggleston v. Orange & A. R. R. Co., 1 Code Reports, 212; Crowley v. Royal E. S.Co., 2 Civ. Pro. Rep. 174; Perry v. Erie Transfer Co., 4 Misc. 598; s. c, 23 X. Y. Supp. 878. "'Brooks V. Jlexican C. Co., 49 N. Y. Superior, 234. "House V. Cooper, 30 Barb. 157. "Brooks V. Mexican C. Co., 49 X. Y. Superior, 234; Chambers v. Feron & B. Co., 56 N. Y. Supp. 338. In the former Court of Common Pleas for the city and county of New York the rule was to the contrary. Pease v. Delaware, L. & W. R. E, Co., 10 Daly, 459. "Robinson v. Oceanic S. N. Co., Ltd., 112 N. Y. 315; Gait v. Provident Sav. Bank, supra; Ervin v. Oregon R. & N. Co.. 62 How. Pr. 490, affirmed 28 Hun, 269; Harriott v. New Jersey R. R. & T. Co., 2 Hilton, 202. In Robinson v. Oceonic S. N. Co., Ltd., it was said that the word "only" was inserted in section 1780 for the purpose of overruling McCormick v. Pennsylvania C. E. E. Co., infra. "Selser Brothers Co. v. Potter Produce Co., 77 Hun, 313; s. c, 28 N. Y. Supp. 428; Brooks v. Mexican N. C. Co., 50 N. Y. Superior, 281. Action Against Foreign Coeporation. 253 not give the court jurisdiction. The objection that under section 1780 the court has not jurisdiction of the subject-matter may be taken at any stage of the action, or the court may refuse to proceed of its own motion,*^ or may set aside the judgment/' § 165. Constitutionality of section 1780, Code Civil Pro. — It cannot be said to be settled that the Supreme Court has not juris- diction of an action by an individual non-resident against a foreign corporation, on a cause of action not specified in section 1780, if the corporation voluntarily appears. The constitution of this state provides that the Supreme Court shall have general jurisdiction in lav? and equity,** and has provided so since the court was estab- lished, and the early cases held that, on account of such constitu- tional- jurisdiction of the subject-matter, a general appearance by the corporation, in such an action, brought in the Supreme Court, by an individual non-resident, vs^aives all objection to the jurisdic- tion of the court.*' But, as above stated, the later cases hold that answering on the merits, the voluntary general appearance of the corporation or its actual consent, does not give the court jurisdic- tion. The decision of the Court of Appeals, said sometimes to settle the constitutionality of section 1780, was made in a case commenced in the late Superior Court of the city of N'ew York, whose jurisdiction was not affected by the provision of the state constitution giving the Supreme Court general jurisdiction in law and equity.** In noting that the question of constitutionality under the state constitution was not concluded by that decision, the Gen- eral Term of the Supreme Court has said: " Whether, under the constitution, creating the three departments of government, and prohibiting either from interfering with the powers and duties committed to the other, the legislature has authority to cut down the jurisdiction of the Supreme Court in the manner attempted by section 1780, presents a question of such importance that it •'Eobinson v. Oceanic S. N. Co., Ltd., supra. "Seignouret v. Southern Bank of N. 0., 3 Monthly Law Bui. 59. "N. Y. Const., art. 6, sec. 1. "Carpentier v. Mintum, 65 Barb. 293; Brooks v. New York & G. L. E. K. Co., 30 Hun, 47 ; McCormick v. Pennsylvania C. R. K. Co., 49 N. Y, 303. "Robinson v. Oceanic S. N. Co., Ltd., supra. 254 Suits By and Against. would have received careful consideration in the court of last resort, had that court been invited to consider it"*^ The subject has been mentioned recently by the Appellate Division of the Supreme Court, in the first department, in a case where the effect of a voluntary appearance, sufiicient to give jurisdiction at common law, was not in question. It was said that section 1780, so far as an attachment against property is concerned, is an enlargement of the jurisdiction of the Supreme Court, and not a restriction on it, as prior to the Eevised Statutes no such attachment could be granted against a foreign corporation, and it was only under their provisions and the amendment thereto of 1849, that a resident and a non-resident could have one, and such enactments are continued in section 1780.*' The Supreme Court of this state has jurisdic- tion in rein over property within this state, whether it belongs to a foreign corporation or to whomsoever it belongs; and process in rem, as a writ of attachment, could be served on a foreign cor- poration at common law,*' if the local court or legislature provided for it. It seems to have been settled, prior to the Eevised Statutes, that an attachment against the property of a foreign corporation! could not be issued in this state f and, after the Eevised Statutes and before the former Code of Procedure, that a foreign corpora- tion could be sued only by attachment, under the Eevised Statutes, and not by original writ of summons, the process then in use to give jurisdiction in personam}^ That being true, section 1780 is not a restriction on the jurisdiction of the Supreme Court, except in a case where the corporation voluntarily appears. In a case last mentioned, it seems that section 1780 is not in con- flict with the constitution for another reason. It is by comity that a foreign corporation is sued in personam in a court of this state. "Selser Brothers Co. v. Potter Produce Co., supra. "Coolidge V. American Realty Co., 91 App. Div. 14; s. c, 86 N. Y. Supp. 318; Ladenburg v. Commercial Bank of N. P., 87 Hun, 269; 8. c, 33 N. Y. Supp. 821, affirmed without opinion. 146 N. Y. 406; 2 R. S. 459, sec. 15; L, 1849, ch. 107. "St. Clair v. Cox, 106 U. S. 350. ""Matter of McQueen v. Middletown Mfg. Co., 16 John. 5. "Lawrence v. New Jersey R. R. & T. Co., 1 How. Pr. 250 ; Bennett v. Hart- ford Fire Ins. Co., 19 Wend. 46. AcTioM- Against Fobeigst Coepoeation. 255 Such comity, originating in the common law, is subject to regulation by the legislature in the exercise of its arbitrary discretion. So far as an action in personam, not permitted by section 1780, against a foreign corporation by another foreign corporation, is concerned, the legislature had the right to prohibit the other corporation bring- ing the action, and that prohibition appears to be within the letter of section 1780. Under the common-law doctrine of comity, prior to any regulation of it by the legislature, a foreign corporation could be sued here only on its voluntary appearance. The legis- lature has granted it the additional right to be sued here by service of process in certain cases, and has limited its said common-law right to the same cases. It is within the power of the legislature to prohibit it entering a voluntary appearance here, or to exclude it from the courts of this state altogether, or to limit its rights in them, whether existing a* common law or by statute. Hence such limitation, so enacted in section 1780, is not an interference with the judicial power, but, on the contrary, an exercise of comity, which the courts have no power to abridge or enlarge. ^^ Section 1780 is not repugnant to the clause of the federal con- stitution providing that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states, as a corporation is not a citizen, and as section 1780 discriminates between residents and not between citizens f^ nor to the fourteenth amendment providing that all persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state where.in they reside ; and that no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, as a cor- poration is not a citizen and as the clause declaring persons to be citizens applies to natural persons only.^ ■^See Comity, sees. 4, 5, supra. "U. S. Const., art. 4, sec. 2. Eobinson v. Oceanic S. N. Co., Ltd., 112 N. Y. 315; Anglo-American P. Co. v. Davis P. Co., 169 N. Y. 506, affirmed 191 U. S. 373; Duquesne Club of P. v. Penn.Bank of P., 35 Hun, 390; Adams v. Penn Bank of P., 35 Hun, 393. "Anglo-American P. Co. v. Davis P. Co., supra; Duquesne Club of P. y. Pena Bank of P., supra. 256 Suits By and Against. § 166. Contracts made here. — An action to recover an amount due under a contract made in this state is an action to recover dam- ages for the breach of such contract within the meaning of section 1780 of the Code of Civil Procedure, as non-payment is a breach.^' A contract between foreign corporations will be presumed, in the absence of proof, to have been made in the home state of one of them.^^ A deposit of money and checks in this state, and a promise made here to repay the same, and a demand and refusal here, con- stitute a cause of action on a contract made here, as the meeting of the minds occurred here." If a foreign corporation ships goods from its home office to a customer in this state, pursuant to an order sent by mail, the contract is complete on acceptance of the order, and therefore was made in the home state.^' In an action against an endorser of a note, it will not be assumed, because the note was made in this state, that the endorsement sued on was made here also.^' If a common carrier receives goods in one state for shipment to another state, the route passing through this state, and delivers them in this state to a connecting carrier, which car- ries them to the destination in the other state, but refuses to de- liver them except on payment of exorbitant charges, the delivery of the goods in this state to the connecting carrier is not a new contract made in this state for the purposes of jurisdiction under section 1780.™ If a contract for services is made here and partly performed here, it is a contract made here under section 1780, al- though it does not state the price."' It has been held that a non- resident may sue a foreign railroad corporation for damages for loss of baggage out of this state, if the contract for transporting "O'Brien v. Peoria Water Co., 5 App. Div. 229; b. c, 39 N. Y. Supp. 121. "Snow, Church &, Co. v. Snow-Church Surety Co., 80 App. Div. 40; s. c, 80 N. y. Supp. 512. "Jlunger V. T. Co. v. Rubber G. M. Co., 39 Misc. 817; s. c, 81 N. Y. Supp. 302. "Shelby S-T. Co. v. Burgess Gun Co., 8 App. Div. 444; s. c, 40 N. Y. Supp. 871. "Ooolidge V. American Realty Co., 91 App. Div. 14; s. c, 86 N. Y. Supp. 318. "Manda v. Wells, F. & Co., 21 Misc. 308; s. c, 47 N. Y. Supp. 182. "Robeson v. Central R. R. of N. J., 76 Hun, 444; s. c, 28 N. Y. Supp. 104. Action Against Foeeign Corpoeation. 257 the baggage was made in this state.*^ Under the Revised Statutes, allowing an action on a contract made, executed or delivered here, it was held that a non-resident might sue a foreign corporation in this state, on a policy of insurance issued and delivered here by a. resident agent of the corporation.^^ § 167. Cause of action arising here. — A cause of action may be defined to be the right which a party has to institute and carry through an ordinary proceeding in a court of justice against an- other party for the enforcement or protection of a right or the redress or prevention of a wrong.** It has been defined also as the matter for which an action may be brought.*^ It has been said that a cause of action upon a contract arises in the state or -place where the principal part of what is contracted to be done is by its terms to be performed.** A cause of action for damages for breach of a contract of employment by its terms to be performed prin- cipally in this state, and so performed until the breach, arises here ;" but a cause of action to recover damages for the non-pay- ment of a sum due under a contract made in this state, arises here, although the work to be done under the contract was to be performed out of the state, as it will be presumed, in the absence of a specific provision to the contrary in the contract, that payment was to be made where the contract was made.*^ It has been held by the Special Term of the Supreme Court that a cause of action for damages for breach of contract arises here if the breach oc- curred here, although the contract was made out of the state.*' An award on an arbitration in Canada, of a contract made and for "'Jones V. Norwich & N. Y. T. Co., '50 Barb. 193. "Burns v. Provincial Ins. Co., 35 Barb. 525; s. c, 13 Abb. Pr. 425. "Meyer v. Van Collem, 28 Barb. 230. "Bouvier's Law Dictionary. "Burckle v. Eckhart, 3 N. Y. 132. "Hiller v. Burlington & M. R. E. Co. in N., 70 N. Y. 223; Strawn v. Ed- ward J. Brandt-Dent Co., 71 App. Div. 234; b. c, 75 N. Y. Supp. 698, affirmed without opinion, 175 N. Y. 463. "'O'Brien v. Peoria Water Co., 5 App. Div. 229; s. c, 39 N. Y. Supp. 121. "Rosenblatt v. Jersey N. Co., 45 Misc. 59; s. c, 90 N. Y. Supp. 816. ' 17 258 Suits By and Against. tlie most performed there, is not a cause of action arising here^ although, a small part of the work under the contract was don& here." A cause of action to restrain an arbitration instituted under a contract, which provided that in case of difference, each party- shall appoint an arbitrator in this state, the two so appointed being authorized to appoint an umpire, arises here." Under section 1780, a non-resident of this state may not enjoin a foreign corporation from receiving or re- cognizing as valid any vote east by a record-holder of its stock, on the claim that the plaintiff is joint owner with him of the stock; but if the stockholder is joined as defend- ant, and is a resident here and if the corporate meetings are held here, he may be enjoined pendente lite from exercising any exclu- sive voting right and of disposing of the stock imtil the ownership is vested in them jointly." A cause of action to enjoin a foreign railroad corporation from violating a contract with another for- eign railroad corporation for transportation in their home state, does not arise in this state.'^ A cause of action for a libel pub- lished in a foreign newspaper is not shown to arise here because the paper is circulated in the home state of the corporation and other states of the United States.'* Under section 1780 a foreign judgment is not a cause of action arising in this state, and said section in its application to such a judgment is not repugnant to the clause of the federal constitution providing that full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state, as such clause is a rule of evidence and not of procedure.''^ A contract between foreign corporations will be presumed, in the absence of proof, to have been "Gampbell v. Company of Proprietors of Champlain & St. L. R. R., 18 How. Pr. 412, 419. "Direct U. S. C. Co. v. Dominion Tel. Co., 84 N. Y. 153. "Harper v. Smith, 93 App. Div. 608; s. c, 87 N. Y. Supp. 516. "Delaware, L. & W. R. R. Co. v. New York, S. & W. R. R. Co., 12 Misc. 230 f s. c, 33 N. Y. Supp. 1081. "Doherty v. Evening Journal Asso., 98 App. Div. 136; s. c, 90 N. Y. Supp. 671. "U. S. Const., art. 4, sec. 1. Anglo-American P. Co. v. Davis P. Co., 169 N. Y. 506, affirmed 191 U. S. 373. Action Against Foreign Corporation. 259 made and the breach thereof to have occurred in the home state of one of them.'^ If a foreign corporation ships goods from its home office to a customer in this state, pursuant to an order sent by mail, the contract is complete on acceptance of the order, and therefore was made in the home state, but if the goods are sold on credit, and a default occurs, such default takes place at the place of business of the customer here, and hence the cause of action for the price arises here." A cause of action on a guaranty of a seller of goods, to defend and hold harmless his customer from suits for infringement of patents in re-selling such goods, arises here, as the breach of the guaranty and the damage resulting therefrom occur here.™ If a common carrier receives goods in one state for shipment to another state, the route passing through this state, and delivers them in this state to a connecting carrier, which car- ries them to the destination in the other state, but refuses to de- liver them except on payment of exorbitant charges, a cause of action for the conversion of the goods, arises in the other state, where the refusal to deliver was made.'^ A foreign bill of exchange on a place in this state, not paid on demand at such place, is a cause of action arising here f but a loan made out of this state is not, because it is secured by a draft on a place in this state,*^ It was held in 1858, at the Special Term of the Supreme Court, that a note, made in another state, payable in this state, is a cause of action arising in the other state, although the default occurred here, but this decision is not in accord with the later authorities.*^ If an insured dies in this state, the cause of action on a life insur- ance policy arises here.*' If the insured resides in this state, and "Snow, Church & Co. v. Snow-Church Surety Co., 80 App. Div. 40; s. c, 80 N. Y. Supp. 512. "Shelby S-T. Co. v. Burgess Gun Co., 8 App. Div. 444; s. c, 40 N. Y. Supp. 871. "Childs V. Harris Mfg. Co., 104 N. Y. 477. ™Manda v. Wells, F. & Co., 21 Misc. 308; s. c, 47 N. Y. Supp. 182. '"Hibernia Banlrv. Lacombe, 84 N. Y. 367; President & D. of Bank of Com- merce V. Rutland & W. R. R. Co., 10 How. Pr. 1. "Western Bank v. City Bank of C, 7 How. Pr. 238. '^Cantwell v. Dubuque W. R. R. Co., 17 How. Pr. 16. "Griesa v. Massachusetts Ben. Asso., 15 N. Y. Supp. 71, affirmed on opinion below, 133 N. Y. 619. 260 Suits By and Against. the premises insured are situated here, and the policy states no place of payment of loss, and the corporation fails to pay or rebuild in this state, a cause of action on a fire insurance policy arises here.** A cause of action on the illegal transfer, in this state, of stock of a foreign railroad corporation, by its transfer agent here, arises here,'^ as does a cause of action on unpaid coupons of rail- road bonds, executed in another state, payable in this state/^ It has been held that a court of this state has jurisdiction of an action by a non-resident stockholder of a foreign corporation against it, for the appointment of a receiver here, on the ground that the cor- poration has oflBcers, creditors and property here, and has made to a resident of this state a general assignment with preferences, and that it is insolvent, and that a receiver has been appointed in the home state, as the property to be protected is in this state, and as the assignment from which the cause of action arose was made here. But the Appellate Division of the Supreme Court has held that where a non-resident stockholder brings an action against a foreign corporation for a receiver to preserve assets, section 1780 does not apply, as section 1810 of the Code of Civil Procedure authorizes such an action in a proper case by any stockholder irre- spective of his place of residence.*^ § 168. Laches. Title to foreign real property. Alien corpora- tion — Where a defendant is guilty of laches in moving to set aside a judgment entered by default, it will be presumed, in order to justify service on a director, that the cause of action arose here, if the contract sued on was made here, and it does not appear that it was performed elsewhere.** And if a foreign corporation plain- tiff is guilty of laches and makes default in serving its complaint, and the defendant moves to dismiss because of such laches, the court, on such a motion, will not consider, that, from the complaint "Lumberman's Ins. Co. v. Meyer, 197 U. S. 407. "Toronto Trust Co. v. Chicago, B. & Q. R. R. Co., 32 Hun, 190, affirmed with- out opinion, 96 N. Y. 668. "Connecticut M. L. Ins. Co. v. Cleveland, C. & C. R. R Co., 41 Barb. 9. ''See sec. 257, infra. "McElroy v. Continental Ry. Co., 6 N. Y. Supp. 306. Action Against Foeeign Cobpoeation. 261 proposed to be served, the ease is not one maintainable by a foreign corporation against a foreign corporation under section 1780.*' It was beld, under the former Code of Procedure, that a cause of action to annul a deed of land in another state' does not arise here,'" and a provision to that effect has been inserted in the pres- ent code by excepting as above stated a case where the object of the action is to affect the title to real property situated without the state. So it has been held that a court of thds state has no jurisdiction of an action by a non-resident against a foreign cor- poration, for the specific performance of a contract to sell lands without the state, although the cause of action arose within the state.'^ But a resident of the state may sue a receiver of a foreign corporation, appointed in the home state, to cancel a contract for fraud, although the contract relates to land out of this state. '^ An alien corporation doing business in this state may be sued by a non-resident in a federal court here, irrespective of the stat- utes of this state forbidding like suit in the state court, so a citizen of New Jersey may sue a British corporation in such court, for a tort committed in Ireland, if the corporation does business here and has property and an agent here, and service may be made on such agent, although the corporation never designated a person upon whom process may be served under the Code of Civil. Pro- cedure, and although the cause of action did not arise in this state.'' § 169. Affirmative defense. — The objection that the court has not jurisdiction of the subject-matter under section 1780 should be taken by answer or demurrer,'* although the court, on its own "■Moffett, H. & C. Co. V. Peoria Water Co., 83 Hun, 73; d. c, 31 N. Y. Supp. 713, affirmed without opinion, 148 N. Y. 737. "Cumljerland C. & I. Co. v. Hoffman S. C. Co., 30 Barb. 159. "Hann v. Barnegat & L. B. Imp. Co., 7 Civ. Pro. Rep. 222. ■"Pruyn v. Black, 105 App. Div. 302; s. c, 93 N. Y. Supp. 995. •"Barrow S. S. Co. v Kane, 170 U. S. 100. "Atlantic & P. T. Co. v. Baltimore & O. R. R. Co., 87 N. Y. 355; Johnson V. Adams T. Co., 14 Hun, 89; Mabon v. Ongley E. Co., 24 App. Div. 50; s. c, 48 N. Y. Supp. 973, reversed on another point, 156 N. Y. 196; Rosenblatt v. Jersey Novelty Co., 45 Misc. 59; s. c, 90 N. Y. Supp. 816. 262 Suits By and Against. motion, at any stage of the action, may refuse to proceed further, and it seems that a motion to vacate the summons and disiftiss the complaint is proper.'" On the hearing of a motion, an objection to the jurisdiction of the subject-matter under section 1780 must be determined from the pleadings and affidavits will not be co- sidered.'"' It has been held by the Appellate Division of the Su- preme Court, in the first department, that, under section 1780, a complaint against a foreign corporation on a cause of action arising out of this state, is not demurrable, because it fails to allege that the plaintiff is a resident of this state, as his non-residence, ousting the court of jurisdiction, does not appear on the face of the com- plaint." It has been held by the Special Term of the Supreme Court that a motion to dismiss the action upon the ground that the com- plaint does not aver the jurisdictional facts under section 1780 •will be denied because a pleading unlike an attachment proceeding is supported by a presumption of jurisdiction.'* It has been held by the Appellate Division in the second department that the com- plaint should allege the residence here of the plaintiff, but that the court may allow the necessary amendment on the trial f^ and that the absence of such allegation or amendment is cured by testi- mony on the trial that the plaintiff is a resident here."" An action against a foreign corporation will not be dismissed, simply because the plaintiff is a non-resident, but it must be proven that the plain- tiff is a non-resident and that the contract was made or the cause "Robinson v. Oceanic S. N. Co., 112 N. Y. 315. '"Delaware, L. & W. R. R. Co. v. New York, S. & W. E. R. Co., 12 Misc. 230; s. c, 33 N. Y. Supp. 1081; Rosenblatt v. Jersey Novelty Co., supra. "Herbert v. Montana D. Co. of A., 81 App Div. 212; s. c, 80 N. Y. Supp. 717; Campbell v. Texas C. R. R. Co., 15 Misc. 442; s. c, 37 N. Y. Supp. 213; Sims V. Bonner, 60 N. Y. Superior, 70; s. c., 16 N. Y. Supp. 801; Gurneyv. Grand Trunk Ry. Co., 59 Hun, 626; s. c, 13 N. Y. Supp. 645; Leslie v. Lor- ilard, 18 N. Y. Weekly Digest, 288; MacGinnis v. Amalgamated Copper Co,. 45 Misc. 106; ». c, 91 N. Y. Supp. 591. ■"H. W. Caldwell & S. Co. v. Stilwell-Bierce & 8. Co., N. Y. Law Journal, Feb. 18, 1904. "Voshefskey v. Hillside C. & I. Co., 21 App. Div. 168; s. c, 47 N. Y. Supp. 386. ""Brown v. Travellers' L. & A. Ins. Co., 21 App. Div. 42; s. c, 47 N. Y. Supp. 253. Action Against Foreign Cobpoeation. 263 of action arose out of the state, or that other facts, ousting the ^'Carpenter v. ■Westinghouse A. B. Co., 32 Fed. 434, U. S. Oir. Ct., S. D. Iowa, E. D. ■""Henriette M. & M. Co. v. Johnson, 173 U. S. 221. ^Strain v. Chicago P. Co., 126 Fed. 831, U. S. Cir. Ct., W. D. Mo. W. D. '^Funk V. Anglo-American Ins. Co., 27 Fed. 336, U. S. Cir. Ct., E. D. Mo. 284 Suits By and Against. It has been held by the same court in Minnesota that a foreign advertising corporation, by soliciting orders for a publication by traveling solicitors, is not doing business in a state or found there so as to be sued there in the federal court, and that such a traveling solicitor without authority to make contracts but submitting his orders to the home office is not an agent upon vyhom process may be served/^ It has been held by the same court in Pennsylvania that a foreign insurance corporation is not doing business in a state be- cause among other acts in a few cases for convenience it collected premiums through the cashier of a local bank, and that such a cashier is not its agent upon whom service of process against it may be made, notwithstanding a state statute so provides. It was fur- ther held that judgment entered on such service may be attacked collaterally by the corporation when suit is brought thereon in the federal court, although it did not move to set the service aside.'^' It has been held by the Supreme Court of the; United States, that under a statute authorizing service of process on any agent, service may be made on a non-resident agent, sent into the state to investi- gate the claim sued on, with discretionary power to compromise, when he is not a mere special agent for that case, but employed gen- erally on a salary to investigate all cases of that kind, giving his en- tire time to the corporation.^" It has been held by the Circuit Court of the United States, for the eastern district of Virginia, that service of process on an insurance corporation of one state which receives risks, collects premiums, signs and deliversi policies, and transacts its usual business in another state, through an agent there, may be made on such agent. ^^^ It has been held by the same court in Washington that doing business in a state covers entering into a combination with corporations of other states under the name of a freight system, and having freight contracts made under such name, ""Boardman v. S. S. McClure & Co., 123 Fed. 614, U. S. Cir. Ct., D. Minn., 4th D. ""Frawley, B. & W. v. Pennsylvania C. Co., 124 Fed. 259, U. S. Cir. Ct., M. D. Penn. "'Connecticut M. L. Ins. Co. v. Spratley, 172 U. S. 602. '»Moch V. Virginia F. & M. Ins. Co., 4 Hughes, 61 ; s. c, 10 Fed. 696. Sekvice of Peocess. 285 and that the summons may be served on the agent of the system.^^' It has been held by the same court in New York, in an equity suit, that the agent of a foreign corporation here in the very transaction out of which the suit arose, is such an agent as is referred to in the New York state Code of Civil Procedure.^'" Where a railroad cor- poration of one state complies with a general statute of another state, authorizing it to extend its line through that state, and pro- viding that upon its filing a copy of its charter in the office of the secretary of state, it shall be a legal corporation of that state, it becomes a domestic corporation, and, as such, can not be sued by a resident of that state in a federal court there, and if the corporations of the two states are operated as one corporation, -with one set of officers, directors and stockholders and one general office, an agent reporting to the general office, will be considered the agent of the corporation of the state where he executes his agency, and can not be served with process in a federal court there as agent of the other corporation.^'^ The limitation in the federal judiciary act of 1887, as corrected by the act of 1888, that no civil suit shall be brought in a federal court against any person in any district other than that whereof he is an inhabitant, does not apply to aliens or alien corporations, who may be served in any district where valid service may be made on them, and if an alien corporation has no officer or agent in the dis^ trict authorized to receive service, it may be made on its financial agent at his office in the district, at which the financial and mone- tary business of the corporation in this country is transacted, and which has been, advertised by it as its own office, especially in a patent suit of whose subject matter the federal courts have exclu- sive jurisdiction, and a mandamus will issue from the Supreme Court of the United States to the Circuit Court compelling it to take jurisdiction of a patent suit against an alien corporation so "^'Van Dresser v. Oregon R. & N. Co., 48 Fed. 202, U. S. Cir. Ct., D. Wash. S. D. ""Estes V. Belford, 23 Blatch. 1 ; s. c, 22 Fed. 275, U. S. Cir. Ct., S. D. N. Y. ^='Stout V. Souix City.& P. R. R. Co., 3 McCr. 1; s. e., 8 Fed. 794, U. S. Cir. Ct., D. Neb. 286 Suits By a:xd Against. commenced. ^'^ Such a financial agent is not a managing agent to be served with process in an action in a state court. A citizen of Xew Jersey may sue a British corporation in a federal court in this state, for a tort committed in Ireland, if the corporation does busi- ness and has property and an. agent here, and service of process may be made on such agent.'^' § 179. Resignation — After an officer or director of a foreign corjjoration has resigned, service of a summons on him will be set aside, although the purpose of the resignation was to prevent the service of summons. ^^^ And, in case the corporation has property in this state, service made on its former president, after he has re- signed as president and director, will be set aside, although on the day of service, he gave directions as to the disposition of the cor- poration's property to one who knew of his resignation, and al- though his firm had outstanding contracts with the corporation."' It has been said by the Appellate Term of the Supreme Court that if the by-laws provide that a director shall serve until his successor is chosen, he continues a director until that time, notwithstanding his resignation."^ A statute of New Jersey provided that directors shall hold office for one year and until others have qualified in their place, and a statute of this state"' provided for a liability to cred- itors by directors for failure to file an annual report. It was held under these statutes that a director of a New Jersey corporation is ■liable to a creditor for failure to file an annual report, if he was elected for one year and the debt was contracted during the year, "^In re Hohorst, 150 U. S. 053. "^Barrow S. S. Co. v. Kane, 170 U. S. 100. "'Erwin v. Oregon S. Nav. Co., 22 Hun, 598; Continental W-P. Oo. v. Lewis Voight & S. Co., 106 Fed. 550, U. S. Cir. Ct., S. D. N. Y.; Wilson V. Brentwood Hotel Co., 16 Misc. 48; a. c, 37 N. Y. Supp. 655; Yorkville Bank v. Henry Zeltner B. Co., 80 App. Div. 578; s. c., 80 N. Y. Supp. 839. '"Sturgis V. Crescent J. M. Co., 10 N. Y. Supp. 470, affirmed without opinion, 123 N. Y. 639. "=Timolat v. S. J. Held Co., 17 Misc. 556 ; ». u., 40 N. Y. Supp. 692. Com- pare Briggs V. Spaulding, 141 U. S. 132; Fearing v. Glenn, 73 Fed. 116. "'L. 1892, ch. 688, sec. 30, as amended by L. 1897, ch. 384, since amended by L. 1901, ch. 354, by striking out the liability of directors to creditors, printed in the appendix. Seevice of Peocess. 287 although he resigned before the debt was contracted."^ Service may be made on a former president after the consolidation of the corporation with another foreign corporation, under a statute of the home state, providing that all rights of creditors and all liens shall he preserved unimpaired and that the corporation shall be deemed to be in existence to preserve the same.^" And after a foreign cor- poration, having an office and officers in this state, sells its plant and gives up its office here, but its officers being members of a private banking firm here, continue at the office of that firm, to do the business necessary to close up the corporate affairs, service of process against it in the federal court here, may be made on such officers."" If the corporation transfers its property and the president declares at the last meeting that there are no stockholders or directors and that the corporation is dissolved, but the directors do not resign, the directors continue to be such."^ § 180: Temporarily in the state. — If an officer or agent of a for- eign corporation comes into this state at the invitation of its cred- itor for a conference as to settlement, he can not be served with a summons against the corporation at the close of the conference, but the creditor must allow him a reasonable opportunity to leave the state. "^ It has been held by the Circuit Court of the United States in lUionis that service of summons on a foreign corporation, hav- ing no office and not doing business in that state, may be made on its manager temporarily in the state to adjust the matter sued on, if he was not enticed there by fraud of the other party. "^ Decisions of the Supreme Court of the United States and the federal court in ™Seebeck v. King, 34 Misc. 483 ; s. c, 70 N. Y. Supp. 322. ""Buell V. Baltimore & 0. S. W. R. Co., 39 App. Div. 236; s. c, 57 N. Y. Supp. 111. ""American L. Co. v. Dickson M. Co., 117 Fed. 972, U. S. Cir. Ct., N. D. N. Y. '"Carnaghan v. Exporters & P. Oil Co. Ltd., 57 Hun, 588; s. c, 11 N. Y. Supp. 172. ""Clean S. Ry. Co. v. Fairmount C. Co., 55 App. Div. 292; s. c, 67 N. Y. Supp. 165. "'Houston V. Filer & S. Co., 85 Fed. 757, U. S. Cir. Ct., N. D. Ills. N. D. 288 Suits By and Against. Missouri are to the same effect.^" But the contrary has been held recently in lowa."^ If the officer or agent comes for the sole pur- pose of being a witness in a pending suit, and the testimony is closed on Friday and he remains until Monday when the case is to be summed up, he waives his exemption from service of process, and can be served with a summons in an action against the corpo- ration."* If he leaves the state in a reasonable time he is exempt."^ In an action in the state court, service of a summons on a foreign corporation, not doing business and not having property here, may be made on an officer, temporarily in the state, not in his official capacity or upon any business of the corporation, and such service gives jurisdiction in personam}*^ The section of the Code of Civil Procedure authorizing such service is constitutional, as such service renders it reasonably probable that the corporation will be apprised of the action and have an opportunity to defend."' It is no objec- tion to a service on a foreign corporation, made on a director,'^" or a managing agent,^^' that he was temporarily in the state, not on business of the corporation. § 181. Temporarily in the state; federal court. — In a federal court in this state, service of process on a foreign corporation not doing business here and having no office, agent or property here, made on an officer or director temporarily in the state, is not valid and confers no jurisdiction;'^^ although he is here on business of '"Connecticut M. L. Ins. Co. v. Spratley, 172 U. S. 602; Brush Creek C. & M. Co. V. Morgan Gardner E. Co., 136 Fed. 505, U. S. Oir. Ct., W. D. Mo. "'London M. Co. v. American M. I. Co., 127 Fed. 1008, U. S. Cir. Ct., S. D. Iowa, E. D. ""Sizer v. Hampton & B. K. & L. Co., 57 App. Div. 390; s. c, 68 N. Y. Supp. 232. "'Kinsey v. American H. M. Co., 94 N. Y. Supp. 455. '"Pope V. Terre Haute C. & M. Co., 87 N. Y. 137; Atlantic & P. T. Co. V. Baltimore & 0. R. R. Co., 46 N. Y. Superior, 377, affirmed 87 N. Y. 355; Barnett v. Cliicago & L. H. R. R. Co., 4 Hun, 114. "•Hiller v. Burlington & M. R. R. R. Co. in N., 70 N. Y. 223. ""Hiller v. Burligton & M. R. R. R. Co. in N., supra. '"Young & F. Co. V. Welsbach L. Co., 55 App. Div. 16; s. c, 66 N. Y. Supp. 1024 ; Porter v. Sewall S. C. H. Co., 7 N. Y. Supp. 166. "^Caledonian Coal Co. v. Baker, 196 U. S. 432; Fidelity T. & S. V. Co. y. Mobile S. Ry. Co., 53 Fed. 850, U. S. Cir. Ct., S. D. Ala., reversed on Seevice of Process. 289 the corporation ;^^^ and although the corporation did business here at one time, but at the time of service and for some months prior thereto, it had ceased entirely to do so.^" If the corporation pro- ceeds on the merits, it can not object to the jurisdiction by a plea in arrest of judgment.*^^ If a court of its home state has appointed a receiver of an insolvent corporation, and enjoined it and its of- ficers from exercising any of its franchises, such injunction extends into other states, and an ofiicer can not enter a valid appearance in a federal court in another state, unless authorized by a statute of that state, and service of process on such ofiicer casually in that state is not valid, the corporation not doing business there, and the re- ceiver may have a judgment entered on such service and appear- ance set aside. ^^^ It has been said by the Circuit Court of the United States, in Pennsylvania, that although there is doubt "whether a foreign corporation is doing business in a state, for a tort committed by it there, it may be 'sued there, if found vtrithin the state in the person of an officer upon whom process may be served.-'^'' If a citizen of this state sues a corporation of another state in personam in a state court of this state, the corporation not doing business and having no property or agent here, and the serv- ice of summons being made on an officer or agent, vs^hile temporarily in the state, the corporation may appear in the state court, specially and for the sole and single purpose of presenting a petition for re- moval of the action to the federal court, and remove it accordingly, another point under the name of Gasquet v. Fidelity T. & S. V. Co., 57 Fed. 80; s. c, 6 C. C. A. 253; Meeke v. Valleyton M. Co., 35 C. C. A. 151; s. c, 93 Fed. 697, U. S. Cir. Ct. of Ap., 4th Cir.; Martin v. New Trinidad L. A. Co., 130 Fed. 394, U. S. Cir. Ct, S. D. N. Y. '==United States Graphite Co. v. Pacific G. Co., 68 Fed. 442, U. S. Cir. Ct., E. D. Mich.; London M. Co. v. American M. I. Co., 127 Fed. 1008, U. S. Cir. Ct., S. D. Iowa, E. D. '"Conley v. Mathieson A. Works, 110 Fed. 730, U. S. Cir. Ct., S. D. N. Y. "Titzgerald C. Co. v. Fitzgerald, 137 U. S. 98; Western E. S. Co. v. Abbeville E. L. & P. Co., 197 U. S. 299. ™Rust V. United Waterworks Co., 17 C. C. A. 16; s. u., 70 Fed. 129, U. S. Cir. Ct. of Ap., 8th Cir.; Stope v. Pontiac R. R., N. Y. Law Journal, April 13, 1905. , ™Gray v. Taper-Sleeve P. Works, 16 Fed. 436, U. S. Cir. Ct., W. D. Penn. 19 290 Suits By and Against. and then may appear in the federal court specially and for the sole and single purpose of applying for an order to set aside the service of the summons, and have the service set aside as invalid ;^^* al- though the officer or agent was in the state on the business of the corporation."' But all the conditions allowing the removal of the action to the federal court as prescribed by the federal judiciary acts, in particular the jurisdictional amount involved, must exist.'** If in an action in a state court against two corporations the causa of action is severable, the action may be severed and removed to the federal court by one of the corporations and the summons set aside there as to that corporation because it was not doing business in that state."' A corporation sued in a state court may appear spe- cially to remove the action to the federal court although a state statute prohibits a special appearance."^ § 182. Affidavit of service. Motion to set service aside. — An affidavit of service on a foreign corporation made on a managing agent, naming him as such, is sufficient, and the affiant need not state how he knows the managing agent to be such ;"' but if such affidavit and those in corroboration are made by persons who can not possibly know the tacts, and are controverted, they must be re- garded as mere expressions of opinion, which can not overcome the clear and positive statements of the officers of the corporation who have knowledge of the facts."* A judgment by default against a foreign corporation, entered on a service of summons on a director, '=*Conley v. Mathieson A. Works, 190 U. S. 406; Goldey v. Morning News, 156 U. S. 518; Wabash W. Ey. v. Brow, 164 U. S. 271; Bentllf v. London & C. F. Corp., 44 Fed. 667, U. S. Cir. Ct., S. D. N. Y.; Reifsnider v. American I. P. Co., 45 Fed. 433, U. S. Cir. Ct., E. D. Mo. E. D.; Parrott v. Alabama G. L. I. Co., 4 Woods, 353; s. c, 5 Fed. 391, U. S. Cir. Ct., N. D. Texas. ""Clews V. Woodstock Iron Co., 44 Fed. 31, U. S. Cir. Ct., S. D. N. Y. ""See see. 231, infra. ■"Geer v. Mathieson A. Works, 190 U. S. 428. "^Louden M. Co. v. American M. I. Co., 127 Fed. 1008, U. S. Cir. Ct., S. D. Iowa, E. D. ""Glines v. Supreme Sitting of 0. of I. H., 66 Hun, 634; s. c, 21 N. Y. Supp. 543; Bragdon v. Perkins-Campbell Co., 82 Fed. 338, U. S. Cir. Ct., W. D. Penn.; Kiufeke v. Merchants D. T. Co., 11 Fed. 282, U. S. Cir. Ct., B. D. Mo. •"Taylor v. Granite S. P. Asso., 136 N. Y. 343. Service of Peocess, 291 the affidavit of service stating only that, at the date of such service, the same could not be made upon an officer, with due diligence, for the reason that the officers are non-residents, and none of them could be found here, will not be set aside after two years and after the judgment has been sued on in another state, and the corporation has interposed a defence of payment made subsequent to the " com- mencement " of the action here, because on account of the laches of the corporation all presumptions are in favor of the regularity of the service."^ It is incumbent on the corporation moving to set aside a service on it, made on a managing agent, to show, not only that the person served was not such managing agent, and that the corporation had no property here, and that the cause of action did not arise here, but also that the person served was an. officer speci- fied in the statute and that a designation by a paper filed with the secretary of state was. not in force.'^'' "\Miere it is doubtful whether the person served is a managing agent the corporation must show his precise relations to it on a motion to set aside a judgment en- tered on default.^^^ If the person served admits that he was an officer at one time, he must state the facts showing that he was not at the time of the service, or the service on him will not be set aside."* Statements by the person served that he is the managing agent are insufficient to prove such agency but may rebut his affi- davit that he is not such agent."' The objection that the court has not jurisdiction of the subject matter of an action against a foreign corporation by a non-resident, because the cause of action did not arise in the state, as required by section 1780' of the Cod© of Civil Procedure can not be raised on a motion to set aside the service of summons, on that or any other ground, but only by demurrer or "'McElroy v. Continental Ry. Co., 6 N. Y. Supp. 306. ""Silver v. Western Ins. Co. of T. C, 3 App. Div. 572 ; s. c, 38 N. Y. Supp. 335 ; Scherer v. Ground Hog M. & M. Co., 55 N. Y. Supp. 743, affirmed without opinion, id. 1148. "'Donadi v. New York State M. L. Ins. Co., 2 E. D. Smith, 519. •""Wamsley v. H. L. Horton & Co., 68 Hun, 549 ; s. c, 23 N. Y. Supp. 85 ;. Persons v. Buffalo C. Mills, 29 App. Div. 45; s. c., 51 N. Y. Supp. 645. "'Perrine v. Ransom G. M. Co., 60 App. Div. 32; s. c, 69 N. Y. Supp. 698. "°See sec. 169, supra. 292 Suits By and AoAiiirsT. § 183. Proof of service in federal court, — Service of process in a federal court on a foreign corporation will be set aside unless the return of the marshal or the record in suit shows that the corpora- tion was doing business in the state at the time of service."^ If a motion to set aside the service of summons has been denied in the state court, it can not be renewed in the federal court after the ac- tion is removed to that court.™ After a foreig-n corporation re- moves an action against it in a state court of this state to the federal court, and the action is remanded to the state court, it is too late for it to move in the latter court to set aside the service of summons made on the state superintendent of insurance as its agent, because made by mail and not personally, as the petition for removal states that an action has been commenced, although it appeared in the state court specially and solely for the purpose of removal."' If a foreign corporation removes an action into the federal court, it can not claim that the federal court has no jurisdiction in personam, because it was not served with process in the federal district to which the action has been removed but in some other part of the state. ^'^ § 184. Substituted service of process. — An order directing the service of a summons upon a defendant without the state or by pub- lication may be made where the defendant to be served is a foreign corporation."^ The order must be founded upon a verified com- plaint, showing a sufficient cause of action against the defendant to be served, and proof by affidavit that such defendant is a foreign corporation, and that the plaintiff has been or will be unable, with due diligence, to make personal service of the summons."* Such '"Jackson v. Delaware R. A. Co., 131 Fed. 134, U. S. Cir. Ct., E. D. Penn.; Earle v. Chesapeake & 0. Ry. Co., 127 Fed. 235, U. S. Cir. Ct., E. D. Penn,; Central G. S. E. H. v. Board of Trade, C. C, 125 Fed. 463, U. S. Cir. Ct. of Ap., 7th Cir.; Scott v. Stockholders Oil Co., 122 Fed. 835, U. S. Cir. Ct., E. D. Penn. "^Bragdon v. Perkins-Campbell Co., 82 Fed. 338, U. S. Cir. Ct., W. D. Penn. '"Farmer v. National Life Asso. of H. C, 138 N. Y. 265. '"Friezen v. Allemania F. Ins. Co., 30 Fed. 349, 353, V. S. Cir. Ct., W. D, Wis. "°Code Civil Pro. sec. 438, printed in the appendix. ""Id. sec. 439, printed in the appendix. Service of Peocess. 293 service does not give jurisdiction in persormm, and it is not neces- sary that a warrant of attachment against the property of the de- fendant has been granted f hut the court must have jurisdiction of the subject matter of the action. Section 1780. of the Code of Civil Procedure specifies the cases where a non-resident of the state may siie a foreign corporation, so in an action against a foreign cor- poration, the complaint, or the affidavits filed therewith, must show that the plaintiff is a resident here, or that the cause of action is one on which a non-resident may sue a foreign corporation, in order to give the court jurisdiction to grant an order for service of summons by publication or personally out of the state. "^ Where ' the summons is served without the state or otherwise than person- ally, if the defendant makes default, the plaintiff may apply to the court or a judge thereof for judgment. He must file proof that the service is complete, and proof by affidavit of the defendant's de- fault. The court or judge must require proof of the cause of ac- tion to be made, except that in an action to recover damages for a personal injury or an injury to property, the damages must be ascertained by a writ of inquiry, and the court or judge must require the plaintiff, or his agent or attorney, to be examined on oath respecting any payments. Before rendering judgment the court or judge may in its or his dis- cretion, require the plaintiff to file an undertaking to abide the order of the court touching restitution, in case the defendant or its representative applies and is admitted to defend and succeeds in such defence."' Judgment shall not be rendered for a sum of money only, except in an action for damages for breach of contract, express or implied, wrongful conversion of personal property, or an injury to person or property in consequence of negligence, fraud or other wrongful act. Where the defendant has not appeared, the plaintiff must file proof by affidavit that a warrant of attachment "'Wood V. St. Louis B. & I. Co., 1 Civ. Pro. Rep. 220. "'Bogert V. Otto G-E. Works, 28 App. Div. 463; s. c, 51 N. Y. Supp. 118; Haight V. LeFoncier deF. et desC, 84 N. Y. Supp. 135; Foster v. Electric H. R. Co., 16 Misc. 147; ». u., 37 N. Y. Supp. 1D63; Mercer v. Southern Bank of N. 0., 1 Civ. Pro. Rep. 144. See sees. 162, 164, infra. "'Code Civil Pro. sec. 1216. 294; Suits Bt and Against. granted in tlie action has been levied on property of the defendant, a* description of the property so attached, verified by affidavit, with a statement of the value thereof, according to the inventory, and the undertaking above mentioned, if one has been required."" Where a warrant of attachment has been levied, and the judgment debtor is a foreign corporation, and the summons was served ujJou it without the state or otherwise than personally, and it has not appeared, the execution must substantially require the sheriff to satisfy the judgment out of the personal property attached, and if that is insufficient out of the real property attached.^'* ""Id. sec. 1217. '"Id. sec. 1370. Allegation' of Incoeporation. 295 OHAPTEE XXXIV. Allegation of Incoepoeation. § 185. In state court.— Section 1775 of the Oode of Civil Pro- cedure^ provides that in an action brought by or against a corpora- tion, the complaint must aver that the plaintiff or the defendant, as the case may be, is a corporation ; must state whether it is a domes- tic or foreign corporation; and if the latter the state, country or government by or under whose laws it was created. It provides further that the plaintiff need not set forth or specially refer to any act or proceeding by or under which the corporation was created. This section was enacted in 1880: There was a similar provision in the Revised Statutes but it applied to domestic corporations only. ■Prior to 1880, it was not necessary for a foreign corporation plain- tiff to plead that it was a corporation f but it was necessary for it to prove its incorporation under a plea of the general issue, as such Tvas the rule of the common law.^ It has been decided by the Court -of Appeals that the omission to allege that a foreign corporation de- fendant is such and the state or country by or under whose laws it was incorporated, as required by section 1775, is not ground for ■demurrer, but that the objection must be taken by motion, as the same is a formal allegation, not part of the cause of action.^ The Tule has not been settled in the case of a foreign corporation plain- tiff, but the said decision that the allegation of incorporation is not part of the cause of action applies whether the corporation is de^ fendant or plaintiff. The only ground of demurrer other than omission to state a cause of action which might be applicable to a 'Code Civil Pro. see. 1775, printed in the appendix. 'Sonoma V. W. & B. Co. v. Heyman, 11 N. Y. Weekly Digest, 327. •Williams v. Bank of Michigan, 7 Wend. 539; United States Bank v. •Stearns, 15 Wend. 314; Waterville Mfg. Co. v. Bryan, 14 Barb. 182. •Harmon v. Vanderbilt Hotel Co., 79 Hun, 392; s. c, 29 N. Y. Supp. 783, aflBrmed without opinion, 143 N. Y. 665; Adams v. Lamson C. S. S. Co, 59 Hun, 127; s. e., 13 N. Y. Supp. 118; Fraser v. Granite 8. P. Asso., 8 Misc. 7; s. e., 28 N. Y. Supp. 65, appeal dismissed on default, March, 1896, over- Tuling Clegg v. Cramer, 3 How. Pr. N. S. 128; s. c, 8 Civil Pro. Rep. 401. 296 Suits By and Against. failure to comply with section 1775, in the case of a corporation plaintiff, and not applicable in the case of corporation defendant, is that the plaintiff has not legal capacity to sue. But a corporation has capacity to sue whether it is domestic or foreign^ and in what- ever state or country it was incorporated. Hence the allegation required by section 1775 is formal in the case of a corporation plaintiff as well as in the case of corporation defendant, and so can ■ be taken by motion only. The decisions are conflicting.^ Where a foreign corporation plaintiff fails to allege that it is such, and the state or country under which it was incorporated, and no motion is made to supply such omission, it seems that the rule of the com- mon law, that it must prove its corporate existence under a general denial, applies.' § 186. In federal court. — It has been held by the Circuit Court of the United States in Michigan that a foreign corporation may sue in a federal court by stating its name without alleging that it is a corporation, and that the general issue admits its incorporation,, although the rule varies in different states as to state courts.' A federal court in this state in an action at law would follow the state practice.* § 187. Sufficient allegation. — The bare statement in the com- plaint that the corporation is domestic or foreign, and, if the latter, the state or country by or under whose laws it was incorporated is sufficient. There are reported cases where the pleader has departeds from the language of section 1775. Thus it has been held that an allegation that the plaintiff is a corporation organized under the. laws of the United States, and has done business in Buffalo, N. Y.,. for ten years, together with the fact that its corporate name indi- cates that it is a national bank of Buffalo, is a sufficient allegation "Irving Nat. Bank v. Corbett, 10 Abb.. N. C. 85; Hafner & S. F. Co. v. Grumme, 10 Civil Pro. Rep. 176; First Nat. Bank of N. H. v. Doying, la Daly, 509; Farmers & M. N. Bank v. Rogers, 15 Civil Pro. Rep. 250; Joha T. Noye Mfg. Co. v. Raymond, 8 Misc. 353 ; s. c, 28 N. Y. Supp. 693. "Ansonia Brass Co. v. Conner, 62 How. Pr. 272. 'Union Cement Co. v. Noble, 15 Fed. 502, U. S. Cir. Ct., W. D. Mich. S. D. •See sec. 172, supra. Allegation op Incobpoeation. 297 that it is a domestic corporation.' It has been held, also, that an allegation that the plaintiff is a corporation organized under cer- tain statutes of Pennsylvania, also under a certain statute of Massa- chusetts, also under a certain statute of 'New York, is a sufficient al- legation as to whether it is a domestic or foreign corporation." An allegation by a domestic corporation plaintiff that it is a corpora- tion organized under the laws of the state of ISTew York is suffi- cient.-'^ § 188. Pleading nul tiel corporation. — Section 1776 of the Code of Civil Procedure provides that in an action brought by or against a corporation the plaintiff need not prove upon the trial the existence of the corporation, unless the answer is verified, and contains an affirmative allegation that the plaintiff or the defendant, as the case may be, is not a corporation. This provision was new in 1880 as to foreign corporations, the Revised Statutes in the particular stated referring to domestic corporations only. Under the present sec- tion it has been held that a foreign corporation plaintiff need not prove its incorporation unless the answer is verified and contains an affirmative allegation that it is not a corporation.-'^ A denial of the allegation in the complaint that the party is a corporation is not sufficient to raise an issue.^' It has been held that, in an action, against a defendant, alleged to be a foreign corporation, an answer by such defendant, under the name in which it was sued, denying 'Farmers & M. N. Bank of Buffalo v. Rogers, 15 Civil Pro. Rep. 250; s. c, 1 N. Y. Supp. 757. "American Baptist H. M. Society v. Foote, 52 Hun, 307 ; s. c, 5 N. Y. Supp. 236. "Sun E. S. B. M. L. A. F. Asso. v. Buck, 36 App. Div. 637 ; s. c, 55 N. Y. Supp. 262. "^Code Civil Pro. sec. 1776, printed in the appendix. Atlantic Con. Co. v. Kreusler, 40 App. Div. 268; s. c, 57 N. Y. Supp. 983; Dry Dock, E. B. & B. Ry. Co. V. North & E. R. Ry. Co., 3 Misc. 61; s. c, 22 N. Y. Supp. 556. "Nickerson v. Canton M. Co. Ltd., 35 App. Div. Ill; s. c, 54 N. Y. Supp, 705; Taendstickfabriks A. V. v. Myers, 58 Hun, 161; c*. i;., 11 N. Y. Supp^ 663 ; First Nat. Bank of R. S. v. Clarke, 22 N. Y. -Weekly Dig. 569 ; Dentz L. Co. V. International R. Co., 32 Misc. 687; s. c, 66 N. Y. Supp. 540; Snow, Church & Co. v. Hall, 19 Misc. 665; s. c, 44 N. Y. Supp. 427; Lamson C. S. S..Co. v. Conyngham, 11 Misc. 428; s. c, 32 N. Y. Supp. 129; East River E. L. Co. V. Clark, 18 N. Y. Supp. 463. 298 Suits By and Against. on information and belief that at any time it was a foreign corpora- tion as alleged in the complaint, and alleging on infor- mation and belief that it is not and never was a corpora- tion, is not an affirmative allegation required by section 1776, and that in such case the plaintiff need not prove the corporate existence of the defendant." There is doubt of the correctness of this de- cision. An answer which denies that the plaintiff is a corporation by the name set forth in the complaint, and alleges that there is no such corporation as the one named in the complaint, is not an af- firmative allegation that the plaintiff is not a corporation under section 1776.-'' If the complaint alleges that the defendant is a corporation, and the answer fails to allege that it is not a corpora- tion, it cannot prove on the trial that it was not a corporation at the time alleged." If the title and verification of a complaint show that the plaintiff is a corporation, and no objection is made by answer or by motion that it does not allege incorporation, such ob- jection cannot be taken on appeal." Section 1776 applies to an affi- davit for replevin of personal property, and a statement therein on information and belief that the defendant is a domestic corporation is sufficient, no verified answer having been served.-'' It seems that section 1776 does not apply to condemnation proceedings." § 189. Proving incorporation. — ^Whenever by the laws of any other state or territory or the Dominion of Canada, a copy of the certificate of organization or incorporation, or any other certificate, certified or exemplified by any officer or officers in such state, terri- tory or dominion, is or shall be prima facie evidence of the due formation, creation, existence, organization or capacity of any cor- poration, created, organized or located in such state, territory or dominion, or claiming so to be, such certificate or certificates, duly "Bengston v. Thingvalla S. S. Co., 31 Hun, 96. "First Nat. Bank of S. S. v. Slattery, 4 App. Div. 421; s. c, 38 N. Y. Supp. 859. "Schmidt v. Neike A. L. Co., 17 Misc. 124; s. c, 39 N. Y. Supp. 353. "Ernest Ochs v. Frey, 47 App. Div. 390; s. c, 62 N. Y. Supp. 67. "Sloan V. Implement D. M. Co., 25 Misc. 451 ; s. c, 55 N. Y. Supp. 558. "Matter of Broadway & S. A. Ry. Co., 73 Hun, 7; s. e., 25 N. Y. Supp. 1080. Allegation of Incoepoeation. 299 exemplified, or a duly exemplified copy thereof, shall be received in all actions and proceedings in this state in or before all courts and officers with the same force and effect in all respects as prima faci& evidence as aforesaid as in such other state, territory or dominion.^" The certificate of incorporation and user of corporate powers prove prima facie the corporate existence of a foreign corporation, as to a person making a contract with it as a corporation, although the stat- ute of the home state under which such certificate was filed is not proved. ^^ It has been held that an admission in the answer of the allegation of the plaintiff that the defendant is a foreign corpora- tion, the answer being signed by the attorney for the defendant as such, and verified by an officer of the defendant corporation as such, sufficiently proves the identity of the defendant as a foreign cor- poration, although there are other corporations of names composed of the name of the defendant and the words added " of New York " and " of New Jersey.'"^' "L. 1877,- eh. 311, printed in the appendix. Eagle Works v. Churchill, 2 Bosw. 166. "United States Vinegar Co. v. Schlegel, 143 N. Y. 537 ; United States Bank ' V. Stearns, 15 Wend. 314; Williams v. Bank of Michigan, 7 Wend. 539. "DeMaio v. Standard Oil Co., 68 App. Div. 167 ; s. c, 74 N. Y. Supp. 165, 300 Suits By and Against. CHAPTER XXXV. Practice Peovisions. § 190. Action in name of real party in interest — Section 44& of the Code of Civil Procedure provides that. every action must be prosecuted in the name of the real party in interest, except that an executor or administrator, a trustee of an express trust, or a person expressly authorized by statute, may sue without joining with him the person for whose benefit the action is prosecuted ; and that a person with whom or in whose name a contract is made for the bene- fit of another is a trustee of an express trust within the meaning of such section.^ Under a similar section in the former code, it was held that an officer of a foreign bank may maintain an action in a court of this state in his own name on behalf of the bank, if the statutes of the home estate authorize him so to do, and that such statutes must be pleaded in his complaint.^ But this decision ap- pears to have been overruled. A statute of New Jersey authorizes a receiver of a dissolved corporation to take charge of its assets and collect its debts with power to sue in the name of the corporation or otherwise. It has been held by the Court of Appeals that such statute has no extra-territorial force, and that such a receiver ap- pointed in Xew Jersey can not sue here in the corporation's name, aa said section 449 requires an action to be prosecuted by the real party in interest.' The executive agent of a foreign corporation in whose name subscription notes are made may sue thereon in his own name, although the consideration moved from the corporation.* § 191. Suit after dissolution. — After a foreign corporation has been dissolved by a competent court of its home state it cannot be sued in this state. A judgment entered in such suit is void. It cannot be made the basis of supplementary proceedings to examine 'Code Civil Pro. sec. 449. 'Myers v. Maohado, 6 Abb. Pr. 198. 'Merchants L. & T. Co. v. Clair, 107 N. Y. 663, affirming 36 Hun, 362. 'Considerant v. Brisbane, 22 N. Y. 389. Peactice Provisions. 301 a third party.^ It has been said, however, that a creditor in. this state can sue the defunct corporation in respect to assets in this state and take out an attachment, and that the judgment of disso- lution in the home state is not binding on a court of this state until it is brought to its attention and action taken thereon, and that an ancillary receiver appointed in this state in a suit brought against the corporation after its dissolution cannot attack a similar suit by a creditor as his own standing is open to the same objection.^ After the appointment of a receiver pendente lite in the home state a foreign corporation may sue or be sued in this s.tate in its own name.' A state statute providing that the life of a corporation shall exist for a certain period after its dissolution for the purposes of suit has no application to a corporation of another state.* But a statute of the home state continuing corporate existence after dis- solution for purposes of suit will be recognized in a federal court in another state.' Likewise it will be recognized in a court of this state." § 192. Venue.— Section 982 of the Code of Civil Procedure pro- vides that certain actions specified therein, for the most part, ac- tions relating to real property, must be tried in the county in which the siibject of the action is situated. Section 983 provided that an action for a penalty or forfeiture imposed by statute, with certain exceptions, and an action against a public ofiicer in certain cases, and an action to recover a chattel distrained or damages therefor, must be tried in the county where the cause of action arose. Section 984 provides that an action not specified in sections 982 and 983 'Matter of Stewart, 39 Misc. 275; s. i;., 79 N. Y. Supp. 525, re-argument denied, 40 Misc. 32; s. c, 81 N. Y. Supp. 209, affirmed on opinion below, 86 App. Div. 627; s. c, 83 N. Y. Supp. 1117; affirmed without opinion, 177 N. Y. 558. 'Hammond v. National Life Asso., 58 App. Div. 453; s. c, 69 N. Y. Supp. 685, appeal dismissed, 168 N. Y. 262. 'Sigua Iron Co. v. Brown, 171 N. Y. 488. •Marion P. Oo. v. Perry, 74 Fed. 425, U. S. Cir. Ct. of Ap., 5j;h Cir.; Dundee M. & T. I. Co. v. Hughes, 89 Fed. 182, U. S. Cir. Ct., D. Or. "Dundee M. & T. I. Co. v. Hughes, supra; L. Buoki & S. L. Co. v. Atlantic L. Co., 128 Fed. 332, U. S Cir. Ct. of Ap., 5th Cir. '"O'Reilly, S. & F. Co. v. Greene, 18 Misc. 423; s. c, 41 N. Y. Supp. 1056; Matter of Stewart, supro-. 302 Stjits By and Against. must be tried in the county in which one of the parties resided at the commencement thereof ; and further that if neither of the par^ ties reside in this state, it may be tried in any county which the plaintiff designates." An action by a village fire department to recover a penalty, under a statute of this state, providing that an agent of a foreign fire insurance corporation shall pay to the fire de- partment of the city or village where the property insured is situ- ated a percentage of premiums collected, and give a bond to secure such percentage, or forfeit a penalty, should be tried in the county ■where the property is situated, tlie percentage was payable, the bond was given, and the policies of insurance took affect, although the policies were signed in another county. ^^ Since section 31 of the Stock Corporation Law was amended in 1892, by making an oflicer, making a false report, liable to a creditor or stockholder, Avho became such on the faith of such report, in lieu of a liability for all tlie debts of the corporation, such liability is not a penalty, as formerly, and so an action against an ofiicer of a foreign corpo- ration for making a false report under section 30 of the same law need not be tried in the county where the cause of action arose." In an action by a foreign corporation against a resident of this state the proper place of trial is the county of the residence of the de- fendant ;" irrespective of the convenience of witnesses, or of the fact that the corpoTation has a place of business in another county of this state ;^'' and notwithstanding the corporation has obtained a certificate to do business here under section 15 of the General Corporation Law." The venue of an action in the Municipal Court of the city of Xew York will be considered hereafter." "Code Civil Pro. sees. 982, 983, 984. •'Ithaca File Dept. v. Beecher, 99 N. Y. 429. "Hutchinson v Young, 80 App. Div. 246 ; s. c, 80 N. Y. Supp. 259. L. 1892. ch. 688, sec. 31, printed in the appendix. "Grover & B. S. il. Co. v. Kimball, 64 Barb. 425. "International L. Ins. Co. v. Sweetland, 14 Abb. Pr. 240. '°L. 1892, ch. 687, sec. 15, printed in the appendix. Shepard & M. L. Co. V. Burleigh, 27 App. Div. 99 ; s. ^., 50 N. Y. Supp. 135 ; Remington & S. Co. V. Niagara C. N. Bank, .54 App. Div. 358; s. c, 66 N. Y. Supp. 560; Robinson C. P. Co. V. Rodman, New York Law Journal, Jan. 4, 1905. "See sec. 221, infra. Pbacticb Provisions. 303 § 193. Verification of pleadings — Section 525 of the Code of Civil Procedure provides that the verification of a pleading must be made by the afiidavit of the party making the pleading, or if there are two or more parties united in interest and pleading together, by at least one of them, who is acquainted with the facts, except that, where the party is a foreign corporation, the verification m^y be made by its agent or its attorney. Section 526 provides that the affidavit of verification must be to the effect that the pleading is true to the knowledge of the deponent, except as to the matters therein stated to be alleged on information and belief, and as to those matters he believes it to be true. It provides further that where it is made by a person, other than the party, he must set forth in the affidavit the grounds of his 'belief, as to all matters not stated upon his knowledge, and the reason why it is not made by the party.^' A pleading of a foreign corporation may be verified by its secretary. He must state the grounds of his belief, but need not state the reason why it is not made by the corporation, as that would be senseless." An answer by a foreign corporation that the de- fendant has no knowledge or information sufficient to form a belief of material allegations of the complaint is good in form and sub- stance. It may be verified by the attorney-at-law, and he not state the grounds of his belief, as the allegation that the defendant has not sufficient knowledge or information to form a belief is an alle- gation that the party verifying the pleading has not such knowledge or information, and a party denying any knowledge or information can have no belief to state the grounds of. If the plaintiff disre- gard such answer, so verified, and enters judgment, the defendant may have it vacated as a matter of right without presenting an affi- davit of merits.^" § 194. Misnomer. — Section 1777 of the Code of 'Civil Procedure provides that, in an action or special proceeding brought by or against a corporation, the defendant is deemed to have waived any "Code Civil Pro. sees. 525, 526. ''Robinson v. Ecuador D. Co., 32 Misc. 106; s. c, 65 N. Y. Supp. 426. ^"American Audit Co. v. Industrial Federation of Am., 84 App. Div. 304; 8. c, 82 N. Y. Supp. 642. 304 S"0iTs By and Against. mistake in the statement of the corporate name, unless the mis- nomer is pleaded in the answer or other pleading in the defendant's behalf. ^^ If a defendant corporation fails to set up in its answer a mistake in the statement of its corporate name as required by sec- tion 1777, it is not in a position to oppose a motion to amend the proceedings by correcting the mistake.^^ Section 1813 of the Code of Civil Procedure provides that where an action, authorized by a law of this state, is brought against one or more persons as stock- holders of a corporation, an objection to any of the proceedings cannot be taken by a person properly made a defendant in the ac- tion on the ground that the plaintiff has joined with him as a de- fendant in the action a person whose name appears on the stock books of the corporation as a stockholder thereof by the name so appearing, but who is misnamed or dead or is not liable for any cause. It provides further that, in such a case, the court may at any time before final judgment upon motion of either party amend the pleadings and other papers without prejudice to the previous proceedings by substituting the true name of the person intended or by striking out the name of the person who is dead or not liable, and in a proper case inserting the name of his representative or successor.^ § 195. Security for costs.— Section 3268 of the Code of Civil Procedure provides that the defendant in an action brought in a court of record may require security for costs to be given where the plaintiff is a foreign corporation.^* In an action under the pro- visions of section 677 of the Code of Civil Procedure, brought by a foreign corporation and the sheriff jointly, in aid of an attach- ment against property in favor of such corporation, it may be re- quired to give security for costs, as the sheriff is a nominal party only not liable for costs.^° In the City Court of the city of Xew York a foreign corporation plaintiff may be compelled to give se- "Code Civil Pro. sec. 1777, printed in the appendix. ""City of New York v. Union Ry. Co., 31 Misc. 4,51; s. c, 64 N. Y. Supp. 483. "Code Civil Pro., see. 1813, printed in the appendix. "Code Civil Pro. sec. 3268. "Grant v. Crittenton, 13 Civil Pro. Eep. 123. Code Civil Pro. sec. 677. See sec. 218, inffa. Practice Provisions. 305 curity for costs, although it has a place of business in the portion of that city over which the jurisdiction, of such court extends ; but not if it has given a bond in replevin.^* § 196. Bill of particulars.— Section 531 of the Code of Civil Procedure provides that upon application in any case the court or a judge authorized to make an order in the action may upon notice direct a bill of particulars of the claim of either party to be deliv- ered to the adverse party, and in case of default the court shall preclude him from giving evidence of the part or parts of his affirm- ative allegation of which particulars have not been delivered. It has been held that an affidavit to procure a bill of particulars, asked for by a foreign corporation defendant, must be made by an officer although no officer is within the state." § 19Y. Preference on court calendar. — Sectioli 791 of the Code of Civil Procedure provides that an action against a corporation founded upon a note or other evidence of debt for the absolute pay- ment of money is entitled to a preference on the trial calendar of the court. This applies to an action against a foreign as well as a domestic corporation and to an action on a foreign bill accepted here.^ § 198. Evidence. Books as evidence. — Section 839 of the Code of Civil Procedure provides that the admission of a member of an aggregate corporation, who is not a party, shall not be received as evidence against the corporation, unless it was made concerning and while engaged in a transaction in which he was the authorized agent of the corporation ; or unless it was made while a member of such corporation and testifying as a witness concerning a transac- tion of the corporation, when the official record of such testimony "See sec. 220, infra. '''Dueber W. C. Mfg. Co. v. Keystone W. C. Co., 66 Hun, 634; s. c, 21 N. Y. Supp. 342. '''Martins Bank Ltd. v. Amazonas Co., 98 App. Div. 146; s. c, 90 N. Y. Supp. 734. 20 306 Suits By and Against. shall be received.^' In an action on a judgment against a New York corporation entered by default in another state, if the judgment roll does not show proper service of process on the defendant the plain- tiff cannot prove matters outside the record to show that the service was duly and properly made.'" Section 929 of the Code of Civil Procedure provides that where a party wishes to prove an act or transaction of a foreign corporation, the book or books of the corpo- ration may be used for that purpose as presumptive evidence, whether any or all of the parties are or are not members of the cor- poration. Section 930' provides that if an original book is not pro- duced, a copy thereof, or of an entry therein, verified as prescribed, may be used, with like effect as the original book ; provided that the party intending to use the copy gives the adverse party at least ten days' notice of his intention, specifying briefly the nature of the evidence proposed to be given. Section 930 does not apply where the foreign corporation is a party to the action and seeks to prove its own act or transaction in its own behalf.'* In an action by a receiver of a foreign corporation against a stockholder for calls, the original books of the corporation in the custody of the proper officer are evidence of corporate acts under section 929.'^ It has been held that, under the said sections, in an action against contractors to recover commissions on the amount of work done by them for a foreign railroad corporation, a duly verified copy of the books of the corporation, showing the amount of work so done, is presumptive evidence thereof, without proof of when and by whom the entries were made, or that they were correctly made ; although such books might not be competent in favor of the corporation in an action be- tween it and the contractors.^' § 199. Discovery of books and papers. — Section 803 of the Code of Civil Procedure provides that a court of record, other than a justice's court in a city, has power to compel a party to an action "Code Civil Pro. sec. 839, printed in the appendix. "Lyons v. Grand Lodge, X. Y. Law Journal, Jan. 5, 1905. "Code Civil Pro. sees. 929, 930, printed in the appendix. ' "Sigua Iron Co. v. Brown, 171 N. Y. 488. "•Derham v. Lee, 47 N. Y. Superior, 174. Practice Pkovisiows. 307 pending therein, to produce and discover, or to give to the other party an inspection and copy, or permission to take a copy of, a book, document or other paper in his possession or under his con- trol, relating to the merits of the action or of the defence therein.^* An order directing an inspection of the books and papers of a for- eign corporation should direct that the papers then in this state be produced, and that in respect to the books at the home office sworn copies of their contents which relate to the subject matter should be produced, as such books in the home office are probably in daily and frequent use, and should not be required to be produced here, as such might be the cause of great and unnecessary embarrassment and injury to the corporation.^^ Section 1780 of the Code of Civil Procedure specifies the cases where a foreigii corporation may be sued by another foreign corporation or by a non-resident.^^ A plaintiff cannot have an order for the examination of the books and papers of a foreign corporation defendant, to enable him to frame his complaint, unless the court has jurisdiction of the cause of ac- tion under section 1780, and unless the books and papers are in this state. It will be presumed in the absence of proof that they are in the home office in the home state." § 200: Abatement. — Section 755 of the Code of Civil Procedure provides that an action does not abate by any event if the cause of action survives or continues. Section 756 provides that, in case of a transfer of interest or devolution of liability, the action may be continued by or against the original party; unless the court di- rects the person to whom the interest is transferred or upon whom the liability is devolved, to be substituted in the action or joined with the original party as the case requires. Section 757 provides that, in case of the death of a sole plaintiff or a sole defendant, if the cause of action survives or continues, the court must upon a motion allow or compel the action to be continued by or against his "Code Civil Pro. sec. 803. »»Ervin v. Oregon E. & N. Co., 22 Hun, 566. "See sec. 164, supra. "Snow, Church & Co. v. Snow-Church Surety Co., 80 App. Div. 40; s. c, 80 N. Y. Supp. 512. 308 Suits By and Against. representative or successor in interest. Similar provisions are made in reference to special proceedings.** If, pending an action by a foreign corporation in a court of this state, its charter is re- pealed and its property vested in trustees with power to sue and to be substituted for it in pending suits, such trustees may be substi- tuted in such action here.^^ After the appointment of a receiver pendente lite by a federal court in the home state a foreign corpo- ration may maintain an action for calls in its own name, and after the appointment of an ancillary receiver in this state, such action may be continued in the same name under said sections 755 and 756." An action by a foreign corporation against a subscriber to its stock to recover his subscription may be continued in the cor- porate name after it becomes insolvent and a receiver is appointed, no decree of dissolution having been entered." It has been held that a proclamation of the governor of the home state, annulling the charter of a foreign corporation for non-payment of taxes, under a statute of that state, does not abate an action in a court of this state by it against its directors for an accounting of its assets diverted by them.''^ It has been held that whether a foreign corporation plaintiff has ceased to exist will not be decided on a motion to compel its attorney to disclose his authority." Section 30' of the General Corporation Law provides that upon the dis- solution of any corporation, its directors, in the absence of an ap- pointment by tlie legislature or a court, shall be trustees of its creditors, stockholders and members. It does not apply to a foreign corporation. So, upon the dissolution of a foreign cor- poration, an action in a court of this state can not be continued against its directors." The dissolution of a foreign corporation in its home state does not abate an action against it in this state in which an attachment against its property has been levied, as it "Code Civil Pro. sees. 755, 756, 757. »°New Jersey P. L. Bank v. Thorp, 6 Cowen, 46. "Sigua Iron Co. \. Brown, 171 N. Y. 488. "United States Vinegar Co. v. Spamer, 143 N. Y. 676. *=Pyro-Gravure Co. v. Staber, 30 Misc. 658 ; s. c., 64 N. Y. Supp. 620. "Havana C. Ry. Co. v. Ceballos, 2.) Misc. 660; s. c. 56 N. Y. Supp. 360. «Wamsley v. H. L. Horton & Co. Ltd., 12 App. Div. 312; s. c, 42 N. Y. Supp. 767, affirmed without opinion, 153 N. Y. 687. Peactice Provisions. 309 is deemed' to live at least to such extent as to permit creditors here who have acquired valid liens to maintain them.^^ It has been held in other jurisdictions, there being no statute to the con- trary, that an action against a foreign corporation abates on itsi dissolution at home, and that a judgment entered thereafter is void." § 201. Intervening, Supplemental summons.-^Section 452i of the Code of Civil Procedure provides that where a person not a/ party to the action has an interest in the subject thereof, and makes application to the court to be made a party, it must direct him to be brought in by the proper amendment. Under this section, it has been held that, if a receiver of a foreign corporation, appointed in the home state, substituted as defendant in an action for rescis- sion of a contract of sale, agrees to a settlement by which the rescission is denied, a third party, who is an endorser on notes forming the consideration of the contract and who is also a stock- holder and creditor of the corporation, and who would remain) liable on the notes if the settlement was consummated, is entitled to intervene.^' Sections 453 and 760 of the Code of Civil Pro- cedure provide for bringing in an additional party by supplemental summons. If. during the pendency of an action against a foreign railroad corporation on its contract to pay dividends, such corpora- tion is consolidated into a domestic corporation, which assumes all the obligations of the foreign corporation, such consolidated cor- poration may be brought in as party defendant by supplemental summons under said sections.*' "Bank of Montreal v. Fidelity Nat. Bank, 49 Hun, 607 ; s. c, 1 N. Y. Supp. 852, affirmed 112 N. Y. 667. "Marion Phosphate Co. v. Perry, 74 Fed. 425, U. S. Cir. Ct. of Ap., 5th Cir. "Code Civil Pro., sec. 452. Hosmer v. Darrah, 85 App. Div. 485; s. c, 83 N. Y. Supp. 413. "Prouty V. I^ke Shore & M. S. Ry. Co., 85 N. Y. 272. 310 Suits Bt akd Against. CHAPTER XXXVI. Defences. § 202. Form of defence. — An answer by a foreign corporation that the defendant has no knowledge or information suflBcient to form a belief of material allegations of the complaint, other than the allegations of corporate existence, is good in form and sub- tance.^ If, in an action against a foreign corporation to recover the principal of its mortgage bonds, the plaintiff alleges a demand of payment made on the defendant at its office in this state, and the answer alleges that the defendant has no knowledge or informa- tion sufficient to form a belief as to such allegation and therefore denies it, such demand is at issue and the plaintiff must prove it.' If a complaint alleges that the defendant is a foreign corporation and at a certain time was engaged in a certain business at a cer- tain place, an admission in the answer that the defendant is a foo-eign corporation as alleged in the complaint 'does not admit that it was engaged in business as alleged.' In an action brought by or against a corporation the plaintiff need not prove upon the trial the existence of the corporation unless the answer is verified and contains an affirmative allegation that the plaintiff or the defend- ant, as the case may be, is not a corporation.* It is no defence to an action by a foreign corporation on contract that a prospectus of the promoters of the corporation showed an illegal purpose, or that the promoters deceived the authorities of the home state as to the real corporate purpose, provided the certificate of incorpora- tion showed a legal purpose only, as the abuse of the incorporating laws of the home state has no effect here until the home state takes action on it.^ It is no defence to such an action that the corpora- 'Ameriean Audit Co. v. Industrial Federation of Am., 84 App. Div. 304; s. c, 82 N. Y. Supp. 642. nVarner v. United States Land & Inv. Co., 53 Hun, 812; s. e., 6 N. Y. Supp. 411. 'O'Laughlin v. George H. Hammond & Co., 4 N. Y. Supp. 582, affirmed with- out opinion, 121 N. Y. 699. 'See sec. 188, supra. •United States Vinegar Co. v. Schlegel, 143 N. Y. 537, followed in United Defences. 311 tion has done acts which would forfeit its charter in proceedings instituted for that purpose in the home state.^ § 203. Usury. Section 1780, Code of Civil Procedure. Sec- tion 181, Tax Law. Section 15, General Corporation Law. In 1850, a statute was passed^ providing that no corporation shall hereafter interpose the defense of usury in any action. This statute applies to foreign corporations, because the intention of the legislature was to distinguish between corporations and individuals and not between two classes of corporations, as the statute grew out of considerations connected with the principles upon which the usury laws themselves are based, that is, the protection of bor- rowers from the exactions of lenders, which do not apply to cor- poration to the same extent as to individual borrowers.^ Section 1780 of the Code of Civil Procedure provides that an action against a foreign corporation may be maintained by another foreign cor- poration or by a non-resident only where the action is brought to recover damages for the breach of a contract made within this state or relating to property situated within this state at the time of the making thereof ; or where it is brought to recover real prop- erty situated within this state or a chattel which is replevied within this state; or where the cause of action arose within this state, ■except where the object of the action is to affect the title to real property situated without this state. ,As already stated, the objec- tion that the court has not jurisdiction of the subject matter under section 1T80 should be taken by answerer demurrer, although the court, on its own motion, at any stage of the action, may refuse to proceed further. It has been held by the Appellate Division of the Supreme Court, in the first department, that, under section 1780, a complaint against a foreign corporation on a cause' of action arising out of this state is not demurrable, because it fails ■States Vinegar Co. v. Foehrenbach, 148 N. Y. 58; Macginnis y. Amalgamated ■Copper Co., 45 Misc. 106; s. c, 91 N. Y. Supp. 591. •Eagle Works v. Churchill, 2 Bosw. 166. VL. 1850, eh. 172. 'Southern Life Ins. & Trust Co. v. Packer, 17 N. Y. 51. 312 Suits By and Against. to allege that the plaintiff is a resident of this state, as his Don- residence, ousting the court of jurisdiction, does not appear on the face of the complaint. It has been held by the same court, in the second department, that the complaint should allege the residence here of the plaintiff, but that the court may allow the necessary amendment on the trial; and that the absence of such allegation or amendmeoit is cured by testimony on the trial that the plaintiff is a resident here.' The objection that a foreign cor- poration plaintiff has not complied with section 181 of the Tax Law is a matter of affirmative defense. Compliance with section 15 of the General Corporation Law is a condition precedent to an action and must be alleged in the complaint." § 204. Corporate power to contract. — In the early cases in this state, it' was held that a foreign corporation need not set forth its charter powers in its complaint, but must prove on the trial that it had power to make the contract it seeks to enforce or make avail- able;^^ and one case in chancery held that a foreign corporation, suing here to foreclose a mortgage securing a loan, must allege in its bill, its charter power to loan money on bond and mortgage." Subsequently it was held, in an action by a foreign life insurance corporation, on a note given to it for a premium, that it will be presumed, until the contrary appears, that the insurance made waa within the charter powers of the corporation and that the note was legal ;^^ and more recently that it is not to be assumed that, because- an issue of stock by a foreign corporation to two directors for patents at an excessive valuation, and the immediate return of some of the stock to the corporation for sale to the public might be unlawful under the statute of this state, it would be unlawful under the statutes of the home state." It is settled now, that a •See sec. 169, supra. "See sec. 30, supra. "Camden & A. E. E. & T. Co. v. Eemer, 4 Barb. 127 ; Marine & F. I. Bank of Ga. V. Jauneey, 1 Barb. 486. "Bard v. Chamberlain, 3 Sand. Ch. 31. "Mutual "Ben. Life Ins. Co. y. Davis, 12 N. Y. 569. "Insurance Press v. Montauk F. D. W. Co., 83 App. Div. 259; s. c, 82 N. Y. Supp. 104. Dei-ences. 313 foreign corporation's lack of power to make a contract, because of its charter limitations or a statute of its home state prohibiting the making of it, there being no rule of the common law and no such prohibitory statute in this state, is an affirmative defence, and that the charter powers of the corporation, or the statutes of the home state, defining its powers and limitations, or prohibiting the making of the contract, must be pleaded in the answer, and proven on the trial. ^^ Such defence is not a ground for demurrer, unless it appears affirmatively on the face of the complaint, aud if an allegation is made in the complaint that the corporation duly and lawfully executed the contract, it is a sufficient allegation of its corporate power to do so under the statutes of its home state, and is admitted by a demurrer.^* § 205. Statute of limitations of this state ^A foreign corpora- tion cannot set up the statute of limitations of this state when sued in a court of this state, whether on contract or in tort, as it is always absent from the state within the meaning of such statute, although it may have .had officers and property here for the period specified in the statute." The same rule applies when it is sued in a federal court in this state, as the state decisions are controlling.^* The statute of limitations of this state runs against a claim against a domestic corporation, consolidated of foreign and domestic corporations, upon its assumption of the debts of the foreign cor- '"Dougan v. Evansville & T. H. R. R. Co., 15 App. Div. 483; s. c, 44 N. Y. Supp. 503; City Trust, S. D. & S. Co. of P. v. Wilson Mfg. Co., 58 App. Div. 271; 3. c, 68 N. Y. Supp. 1004; Mason v. Standard D. & D. Co., 85 App. Div. 520; s. e., 83 N. Y. Supp. 343; New York Floating D. Co. v. New Jersey Oil Co., 3 Duer, 648. "Dougan v. Evansville & T. H. R. R. Co., supra. "Oleott V. Tioga R. R. Co., 20 N. Y. 210, overruling Faulkner v. Delaware & R. C. Co., 1 Denio, 441. Thompson v. Tioga R. R. Co., 36 Barb. 79; Mallory V. Tioga R. R. Co., 3 Keyes, 354; s. ^., 3 Abb. Ct. of Ap., 139; Rathbun v. Northern C. Ry. Co., 50 N. Y. 656 ; Robeson v. Central R. R, of N. J., 76 Hun, 444; s. c, 28 N. Y. Supp. 104. "Tioga R. R. Co. v. Blossburg & C. R. R. Co, 87 U. S. (20 Wall.) 137; Kirby v. Lake Shore &. M. S. Ry. Co., 14 Fed. 261, U. S. Cir. Ct., S. D. N. Y., affirmed 120 U. S. 130; Taylor v. Union Pac. Ry. Co., 123 Fed. 155, U. S. Cir. Ct., D. Neb. 314 StriTS By and Against. poration, only from the date of the consolidation." Section 707 of the Code of Civil Procedure provides that, where a defendant, ■who has not appeared, is a foreign corporation, and the summons was served without the state or by publication pursuant to an order obtained for that purpose, the judgment can be enforced only against the property which has been levied upon by virtue of the warrant of attachment, at the time when the judgment was entered ; and that such section does not declare the effect of such a judgment with respect to the application of any statute of limitations. Sec- tion 432 of the Code of Civil Procedure provides that service of summons on a foreign corporation may be made on a person desig- nated for the purpose by a writing filed in the office of the secretary of state.^" Any foreign corporation, may make such a designation, and it is obligatory on a foreign corporation, other than a monied corporation, so to do, as a preliminary to obtaining a certificate to do business here.^^ It has been held that, if a foreign corporation makes such designation, the reason for suspending the statute of limitations ceases to exist, and that such statute runs in its favor while the person designated is in the state f' but not while the per- son designated is out of the state. ^^ The same thing has been held in lowa.^* An ineffectual attempt to comply with section 432 is not sufficients^ § 206. Limitation of action for personal liability of stock- holders; for damages for death by negligence; for taxes. — Sec- tion 382 of the Code of Civil Procedure prescribes a limitation of six years for an action upon a contract obligation or liability, express or implied, except a judgment or sealed instrument, and for an "Boardman v. Lake Shore & M. S. Ey. Co., 84 N. Y. 157 ; Gray L. Co. v. Juneriean W. T. D. Co., 44 Misc. 206 ; s. c, 88 N. Y. Supp. 857. ™See sec. 171, supra. "See sec. 20, supra. "McClure v. Supreme Lodge, K. H., 41 App. Div. 131 ; ij. c, 59 N. Y. Supp. 764. ='Norrisv. Atlas S. S. Co., 37 Fed. 426, U. S. Cir. Ct., S. D. N. Y. "McCabe v. Illinois C. R. E. Co., 4 McCr. 492; s. c, 13 Fed. 827, U. S. Cir. Ct., N. D. Iowa. "McClure v. Supreme Lodge, supra. Defences. 315 action to recover upon a liability created by statute, except a penalty or forfeiture. Section 394 prescribes a limitation of three years for an action against a director or stockholder of a monied corporation, or banking association, to recover a penalty or forfeiture imposed, or to enforce a liability created by the common law or by statute. It has been held, that section 394 applies to an action against a resident stockholder of a Kansas bank to enforce his additional liability under the Kansas statute.^^ This decision applies to monied corporations or banking associations only. It has been held that an action in a federal court in Maryland, by a creditor of a Georgia corporation, to enforce a stockholder's charter liability for debts, is limited by the Georgia statute of limitations of suits on rights accruing under acts of incorporation, and not by the Mary- land statute of limitations.^ Section 1902 of the Code of Civil Procedure provides that the executor or administrator of a decedent, who hasi left him or her surviving a husband, wife or next of kin, may maintain an action to recover damages for a wrongful act, neglect or default, by which the decedent's death was caused, against a corporation which would have been liable to an action in favor of the decedent by reason thereof, if death had not ensued. It provides further that such an action must be commenced within two years after the decedent's death. It has been held that, in an action under the said section, a foreign corporation defendant may set up the short statute of limitations of two years provided for in the section.^ The Tax Law provides that the provisions ■ of the Code of Civil Procedure, relative to the limitation of time of enforcing a civil remedy, shall not apply to any proceeding- or action taken to levy, appraise, assess, determine or enforce the collection of a franchise tax or a transfer tax, or a penalty respect- ""Seattle Nat. Bank v. Pratt, 103 Fed. 62, affirmed 49 C. C. A. 662; s. c., Ill Fed. 842, U. S. Cir. Ct. of Ap., 2nd Cir.; Piatt v. Hungerford, 116 Fed. 771, U. S. Cir. Ct., N. D. N. Y.; Piatt v. Wilmot, 193 U. S. 602. "Brunswick Terminal Co. v. National Bank of B., 40 C. C. A. 22; s. c, 99 Fed. 635, S. U. Cir. Ct. of Ap., 4th Cir., application denied without opinion, 178 U. S. 611. "Londriggan v. New York & N. H. K. R. Co., 12 Abb. N. C. 273. 316 Suits By and Against. ing the same, provided, however, that as to real property in the hands of bona fide purchasers, the transfer tax shall be presumed to be paid and cease to be a lien as against such purchasers after the expiration of six years from the date of accrual.^' § 207. Foreign statute of limitations. — In 1902 there was added to the Code of Civil Procedure a section which provides that where a cause of action arises outside of this state, an action cannot be brought in a court of this state, to enforce said cause of action, after the expiration of the time limited by the laws of the state or country where the cause of action arose, for bringing an action upon said cause of action, except where the cause of action originally accrued in favor of a resident of this state. ^^ A similar provision, but not as com- prehensive, was contained in the Code of Civil Procedure as origi- nally enacted, and it is still in force. It provides that, where a cause of action which does not involve the title to or possession of real property within this state, accrues against a person who is not then a resident of this state, an action cannot be brought thereon in a court of this state, against him or his personal representatives, after the expiration of the time limited by the laws of his residence for bringing a like action, except by a resident of this state, where the cause of action originally accrued in favor of a resident of this state, or where before the expiration of the time so limited, the person in whose favor it originally accrued was or became a resi- dent of this state, or the cause of action was assigned to and there- after was continuously owned by a resident of this state.^' It has been held that to plead the statute of limitations of another state a foreign corporation defendant must set out the statute or the substance of it, or refer to it by its date or by some reference to the public statutes of the other state.^^ "°L. 1896, ch. 908, sec. 282, added by L. 1899, eh. 737, printed in the appendix, superseding People ex rel. New York Loan & Imp. Co. v. Roberta, 157 N. Y. 70. ""Code Civil Pro., sec. 390a. Chesapeake Coal Co. of B. v. Mengis, 102 App. Div. 15; s. c, 92 N. Y. Supp. 1003. "Id., sec. 390. "Robeson v. Central R. R. of N. J., 76 Hun, 444; s. c, 28 N. Y. Supp. 104. Attachment. 317 CHAPTER XXXVII. Attachment. §208. Statutes of this state. Admiralty. — A warrant of attach- ment against the property of a foreign corporation, defendant in an action, may be granted upon the application of the plaintiff, where the action is to recover a sum of money only as damages for breach of contract, express or implied; or wrongful conversion of personal property ; or an injury to property in eoijsequence of negligence, fraud or other wrongful act. The warrant may be granted to accompany the summons or at any time after the com- mencement of the action and before final judgment. '^ The equit- able doctrine that a director of a corporation occupies a fiduciary capacity does not prevent a director of an insolvent foreign cor- poration securing a debt due him from the corporation by an at- tachment of its property.^ The District Court of the United States, as a court of admiralty, may grant an attachment against the property of a foreign corporation, if such property is found within the local jurisdiction.^ § 209. Affidavit for attachment. — To entitle the plaintiff to a warrant of attachment against the property of a; foreign corpora- tion in a court of this state, he must show by afiBdavit, to the satis- faction of the judge granting the same, that one of the causes of action above mentioned exists against the defendant, and that the defendant is a foreign corporation. If the action is to recover damages for breach of contract, the affidavit must show that the plaintiff is entitled to recover a sum stated therein, over and above all counterclaims known to him.* An affidavit for an attachment against a foreign corporation must set forth the facts constituting •Code Civil Pro., sees. 635, 638, printed in the appendix. 'Hill V. Knickerbocker E. L. & P. Co., 63 Hun, 632; s. c., 18 N. Y. Supp. 813. 'Clarke v. New Jersey S. N. Co., 1 Story, 531 ; s. c, 5 Fed. Cases, 974, No. 2,859, U. S. Cir. Ct., D. E. I. ♦Code Civil Pro., sec. 636, printed in the appendix. 318 StriTS By and Against. the cause of action, and, if on contract, the four essentials thereof, to wit, the nature of the contract, performance hy plaintiff, breach by defendant, and the damages.^ If am assignee of a cause of action against a foreign corporation swears positively to the cause of action, the existence of the corporation as a foreign corporation, and other jurisdictional facts necessary to obtain a warrant of attachment against the property of the corporation, it being ap- parent that such facts were not within his personal knowledge, the attachment will be vacated on motion.^ An affidavit by the attorney-at-law of the plaintiff to obtain a warrant of attachment against the property of a corporation, upon the ground that it is a foreign corporation, is not sufficient, if it contains no fact or cir- cumstance from which the court can infer that the affiant had or could have had knowledge of the averments made.' The fact that certificates of incorporation are public records raises a sufficient presumption that a creditor who deals with a foreign corporation and swears in an affidavit to procure an attachment against ita property that it is a foreign corporation, has examined the cer- tificate filed and swears within his knowledge f especially where he states that he is familiar with the facts deposed to.' An affidavit for an attachment of the property of a foreign corporation, in which the affiant states that the sources of his information of the corporation being a foreign corporation are two specified corporation directories published in the city of Xew York for public circula- tion, and a telegram from the secretary of state of the home state, and that the corporation is doing business in this state under its corporate name, and tliat the contract sued on was executed in such name, is sufficient proof that the defendant is a foreign cor- "Araerican Audit Co. v. Industrial Federation of Am., 80 App. Div. 544; 8. c, 80 N. Y. Supp. 788. "Hoormann v. Climax Cycle Co., 9 App. Div. 579; s. c, 41 N. Y. Supp. 710. 'Tuck V. Sigua Iron Co., New York Law Journal, Dec. 23, 1902, reversed on another ground, 80 App. Div. 537; s. c, 80 N. Y. Supp. 771. 'Randolph v. Susquehanna W. P. & P. Co., 12 App. Div. 479 ; s. c, 42 N. Y. Supp. 411. 'Box B. & L. Co. V. Vincennes P. Co., 45 Misc. 1 ; s. c, 90 N. Y. Supp. 836, affirmed without opinion, 98 App. Div. 623 ; s. c., 90 N. Y. Supp. 1089. Attachment. 319 poration." It has been held by the Special Term of the Supreme Court, in a case where the complaint was one of the papers before the court, that the averment in the affidavit that the defendant is a foreign corporation aided by the allegation of the filing of its certificate and by the 'prima facie effect of the same averment im the complaint is stifficient." § 210. Effect of section 1780, Code Civil Procedure. — Section 1780 of the Code of Civil Procedure provides that an action against a foreign corporation may be maintained by a resident of this state, or by a domestic corporation, for any cause of action. It provides also that an action against a foreign corporation may be maintained by another foreign corporation or by a non-resident, only where the action is brought to recover damages for the breach of a contract, made within the state, or relating to property situ- ated within the state, at the time of the making thereof ; or where it is brought to recover real property situated within the state, or a chattel replevied within the state ; or where the cause of action arose within the state, except where the object of the action is to affect the title to real property situated without the state.-'^ There seems to be a doubt whether section 1780 does not interfere with the constitutional jurisdiction of the Supreme Court. This has been considered already.^' In an action between foreign corpora- tions, an affidavit to procure a warrant of attachment against prop- erty, must show that the contract sued on was made, or that the cause of action arose, in this state, as required by section 1780." Assuming that section 1780 is constitutional, it has been held that in an action by an individual against a foreign corporation, on a cause of action not shovsm to have arisen in this state, such an affi- "Steele v. E. M. Gilmour Mfg. Co., 77 App. Div. 199; =(. c, 78 N. Y. Supp. 1078. "Nichols V. Charleston C. Co., N. Y. Law Journal, March 18, 1904. '"See sees. 162-164, su-pra. "See sec. 165, supra. "Selser Brothers Co. v. Potter Produce Co., 77 Hun, 313; s. c, 28 N. Y Supp. 428; People v. St. Nicholas Bank, 44 App. Div. 313; s. c, 60 N. Y. Supp. 719; H. W. CaMwell & S. Co. v. Stilwell-Bierce & S.^ Co., N. Y. Law Journal, Feb. 18, 1904. 320 Suits By and Against. davit must show that the plaintiff is a resident here.^^ Such alle- gation need not be repeated in the warrant." § 211. Effect of section 15, General Corporation Law, and section 181, Tax Law. — Section 15 of the General Corporation Law provides that no foreign stock corporation, other than a monied corporation, shall do business in this state, without having first procured from the secretary of state a certificate of authority so to do; and that it shall not maintain any action in this state, upon any contract made by it in this state, unless prior to the making of such contract, it shall have procured such certificate. Section 181 of the Tax Law provides that every foreign corpora- tion, except banking corporations, fire, marine, casualty and life insurance companies, co-operative fraternal insurance companies, and building and loan associations, authorized to do business under the General Corporation Law, shall pay to the state treasurer a license tax ; and that no action shall be maintained or recovery had in any of the courts in this state by such foreign corporation with- out obtaining a receipt for the license tax within thirteen months after beginning business in this state." A foreign corporation plaintiff, doing business here, need not allege in its afiidavits to procure a warrant of attachment against property that it has com- plied with section 181 of the Tax Law.-'* It has been held by the Court of Appeals that since section 15 of the General Corporation Law was amended in 1901 by prohibiting an action unless the cer- tificate was obtained before the contract was made, compliance "Smith V. Union Milk Co., 70 Hun, 348 ; s. c, 24 N. Y. Supp. 79, affirmed on opinion below, 143 N. Y. 622; Ladenburg v. Commercial Bank of N. F., 87 Hun, 269; s. c, 33 N. Y. Supp. 821, affirmed without opinion, 146 N. Y. 406 Coolidge V. American Realty Co., 91 App. Div. 14; s. c, 86 N. Y. Supp. 318 Taleott V. American Credit I. Co., 81 Hun, 677; a. c, 30 N. Y. Supp. 1118 Oliver v. Walter Haywood "c. M. Co., 57 Hun, 588; s. c, 10 N. Y. Supp. 771 Wahrman v. North Hudson Land Co., N. Y. Law Journal, September 27, 1894 Adler v. Order of A. M. C. of B. C, 19 N. Y. Supp. 885; s. c, 28 Abb. N. C. 233. "Maury v. American Motor Co., 25 Misc. 657; s. c, 56 N. Y. Supp. 316, affirmed without opinion, 38 App. Div. 623; s. c, 57 N. Y. Supp. 1142. "See sec. 18, supra. "Charles Roome Parmele Co. v. Haas, 171 N. Y. 579. Attachment. 321 ■with that section by taking out a certificate is a condition prece- dent to an action and that a complaint which does allege it is de- murrable upon the ground that it appears on the face of the com- plaint that the plaintiff has not legal capacity to sue, and also upon the ground. that it appears on the face of the complaint that it does not state facts sufficient to constitute a cause of action." It fol- lows that a foreign corporation plaintiff must allege in its affi- davits to procure a warrant of attachment against property that it has complied with section 15.- The same thing was held by the lower courts prior ta the amendment of 1901.^" Prior to the amendment it was held also that an allegation that the plaintiff was duly authorized to transact business in this state was a suffi- cient allegation of compliance with section 15 ;^^ and that a warrant of attachment would not be vacated because the plaintiff did not allege compliance with section 15, unless it appeared that the plain- tiff was doing business here and that the contract sued on was made here.^^ It seems that the latter ruling is not strictly in ac- cord with the Court of Appeals decision above referred to, but that the question was not raised before that court. ^^ § 212. Levy of attachment. — Under the warrant of attachment the sheriff must levy upon so much of the personal and real prop- erty of the foreign corporation within his county, not exempt from levy and sale under 'an execution, as will satisfy the demand of the plaintiff in the attachment action.^* If a foreign corporation takes title to real property in the name of its lawyer as trustee for itself, the trust is a passive trust, and no title vests in the trustee, but the land is subject to be levied on under a warrant of attach- ment against the property of the foreign corporation.^^ Under a "See sec. 30, supra. '"William H. Sawyer Lumber Co. v. Bussell, 84 Hun, 114; s. c, 31 N. Y. Supp. 1107; Reedy E, Co. v. American G. Co., 24 Misc. 678; s. c, 53 N. Y. Supp. 989. "Lumley v. Anatron C. Co., 56 App. Div. 174; s. c, 67 N. Y. Supp. 663. '^'Lukens I. & S. Co. v. Payne, 13 App. Div. 11; s. c, 43 N. Y. Supp. 376. "See sec. 30, supra. "Code Civil Pro., see. 644. "Wright V. Douglass, 2 N. Y. 373 ; s. c, 7 N. Y. 564. 21 322 Suits By and Against. warrant of attackment against the property of a foreign corpora- tion, other than one created under the laws of congress, the sheriff may levy upon the sum remaining unpaid upon a subscription to its capital stock made by a person within the county, or upon one or more shares of stock therein held by such a person. This is provided for by section 646 of the Code of Civil Procedure. It is a revision of a similar statute enacted in 1845,^' under which it was held, that the liability of the subscriber or stockholder to be reached by the creditor must be one which could be enforced in the home state in an action for debt, as distinguished from an accounting requiring the joinder of all stockholders,^' and that the statute creates no new liability, but subrogates the creditor to the rights of the corporation, so that the creditor must show that the directors have made a call on the stock, if the by-laws provide for it as a condition of liability.^ The rights or shares which the for- eign corporation has in the stock of an association, or corporation, together with the interest and profits thereon, may be levied upon. The attachment may be levied also upon a cause of action arising upon contract ; including a bond, promissory note, or other instru- ment for the payment of money only, negotiable or otherwise, whether past due or yet to become due, executed by a foreign or do- mestic government, state, county, public officer, association, mu- nicipal or other corporation, or by a private person, either within or without the state, which belongs to the foreign corporation and is found within the county. The levy of the attachment there- upon is deemed a levy upon and a seizure and attachment of the- debt represented thereby. ^^ Property of a foreign corporation to be subject to levy under a warrant of attachment against its prop- erty must have its situs in this state. A debt due to a foreign cor- poration by a non-resident can not have its situs here. In the case of a debt due to a foreign corporation by a foreign partnership, one of whose members resides in this state, the debt owing by a partner, resident in the other state, can not be levied on here, so as "h. 1845, ch. 234, sec. I. '■McDonough v. Phelps, 15 How. Pr. 372. "Seymour v. Sturgess, 26 N. Y. 134. "Code Civil Pro., sees. 646, 647, 648, printed in the appendix. Attachment. 323 to rendfer such foreign, partner liable in a suit in aid of the at- tachment, although the attachmeut was served on the partner resi- dent here, and also on the foreign partner while temporarily in this state.^" A debt due by a resident has its situs hw-e and may be levied on.^^ Where a creditor of a foreign corporation levies a warrant of attachment against its property on a debt contracted in this state due the foreign corporation by another foreign corpora- tion, and thereafter the first corporation brings suit for the debt, and the second corporatio^ pays the amount of the debt into court and has the attaching-creditor substituted in its place as defendant,, such attaching-creditor may re-levy the attachment on such money so deposited in court, as the deposit was made to furnish security for the attachment claim. ^^ § 213. Attachment against property of a third party. — A debt due by a foreign corporation to a non-resident of this state, arising from a contract made in this state, to be performed in this state, has a situs here, so as to be subject to levy under an attachment against the owner of the debt.^^ A foreign corporation can not at- tach a debt due by another foreign corporation to a foreign part- nership under a warrant of attachment against the property of the partnership, as the situs of such debt is not in this state ; a pay- ment of such debt in such attachment suit is a voluntary payment to a third party, and so is not a defence to a suit by the receiver of the first foreign corporation against the second foreign corporation to recover such debt.^* Stock of a foreign corporation belonging to a non-resident can not be levied on under an attachment against the property of such non-resident, as it must be present in this state actually or constructively to be levied on, and it can be pres- ent only at the residence of the owner or at the domicile of the corporation.^^ But if the certificate of such stock is pledged in ""National Broadway Bank v. Sampson, 179 N. Y. 213. "Nichols V. Charleston C. Co., N. Y. Law Journal, March 18, 1904. "India Rubber Co. v. Katz, 65 App. Div. 349; s. c. 72 N. Y. Supp. 658. ■"Lancaster v. Spotswood, 41 Misc. 19; s. u., 83 N. Y. Supp. 572, affirmed without opinion, 86 App. Div. 627; s. c, 83 N. Y. Supp. 1109. «Allen V. United C. S. Co., 39 Misc. 500; s. c, 80 N. Y. Supp. 401. "Plimpton V. Bigelow, 93 N. Y. 592. 324 Suits By and Against. this state, the interest of the non-resident owner thereof may be levied on under a warrant of attachment against his property.^' § 214. Effect of assignment for creditors. — The title of a gen- eral assignee under an assignment for the benefit of creditors, made by a foreign corporation in this state, is superior to that of subsequent attaching creditors of the property of the corporation." As already stated, the title of such an assignee under such an as- signment, made in the home state, is superior to that of subse- quent attaching-creditors, when the assignment is voluntary and the recognition of the title of the assignee does not contravene the statutory law of this state and is not repugnant to its public policy. If the title of the assignee is acquired in, invitum under an insolv- ent or bankruptcy law of the home state, it will not be recognized in this state as against subsequent attachments levied after the as- signment is made, although the assignment is valid in the home state and the attaching-creditor has notice of it. A trustee for the benefit of creditors of a foreign corporation, under a general as- signment executed by it in the home state, can not have a final order in a proceeding for dissolution of a domestic corporation, owing a debt to such foreign corporation, amended by substituting such trustee in the place of an attaching-creditor of such foreign corporation, but should have the order vacated, and the proceed- ing sent back to the referee to determine on testimony whether the trustee or the attaching-creditor is entitled to the dividend payable from tlie assets of the debtor. The costs awarded against the gen- eral assignee on such an application may be ordered paid out of the fund.^^ § 215. Effect of receivership. — If a receiver of a foreign cor- poration is appointed in the home state after its property in this state has been attached at the suit of a creditor here, such receiver becomes vested with the property but subject to the attachment." ""Simpson v. Jersey City Con. Co., 165 N. Y. 193. "Vanderpoel v. Gorman, 140 N. Y. 563. "See sec. 143, supra. . "Fenton v. Lumberman's Bank, 1 Clarke, 286. Attachment. 325 The same thing is true although the receiver is appointed in the home Stat© before the attachment is levied. An early case in this state held that the property of a corporation cannot be attached here after it becomes vested in receivers appointed in the home state. ^^ But it has been held recently that after a permanent re- ceiver has been appointed in the home state, a creditor here may sue it here and attach its assets here, even if the judgment or order appointing the receiver dissolved the corporation." Property of a foreign corporation to be subject to levy under an attachment against its property must have a situs in this state. So it has been held by the Appellate Division of the Supreme Court that if such property has a situs in the home state and the court there takes pos- session of it, and the title of the property is transferred out of the corporation by order of that court, it ceases to be subject to attach- ment, although it may have an additional situs in this state. Thus, •where a receiver of an insolvent foreign corporation, appointed in the home state, serves a copy of the order appointing him upon a special partnership of that state indebted to the corporation, there is such a change in the title of the debt as to prevent it being at- tached here at the suit of a creditor here, as the debt had a situs in the home state and so vyas subject to the jurisdiction of the court there, even if it could be considered as having an additional situs here, because one of the partners of the debtor firm resided here.*^ Where property of a foreign corporation situated in this state is the subject of a trust, the lien of an attachment levied on it is sub- ordinate to the trust. So the relief fund of a foreign benevolent order, on deposit in a bank in this state, preserved under its consti- tution, by-lavsrs and regulations for the benefit of members, unas- signable and free from the claims of creditors, is a trust fund, and in case of insolvency, the lien of an attachment creditor is sub- ordinate to the rights of permanent receivers appointed in the home state in proceedings forfeiting the charter. Such fund "Thomas v. Merchants' Bank, 9 Paige, 216. "Hammond v. National Life Asso., 58 App. Div. 453; s. c, 69 N. Y. Supp. 585, appeal dismissed, 168 N. Y. 262; Mabon v. Ongley E. Co., 156 N. Y. 196; Hihemia Bank v. Lacombe, 84 N. Y. 367. "National Broadway Bank v. Sampson, 85 App. Div. 320; s. c., 83 N. Y. Supp. 426; affirmed, but on another ground, 179 N. Y. 213. 326 ■ StriTS By AisTD Against. should be paid over to the permanent receivers upon their giving a bond to distribute it to the beneficiaries of such relief fund ac- cording to the constitution, bj-laws and regulations, without pref- erence by reason of residence in any particular state. ^' Where an ancillary or other receiver of a foreign corporation is appointed in this state, his title to the assets here is superior to the lien of an attachment levied after his appointment, although the appointment is made pendente lite, and although the receiver does not reduce the assets to possession, and although he is superseded by a perma- nent receiver appointed after the levy of the attachment;" but it is subordinate to the lien of an attachment levied before his ap- pointment.*^ § 216. Effect of general tax. — The lien of an attachment against the property of a foreign corporation is superior to that of a general tax levied by the local authorities for state and local pur- poses on the capital stock of such corporation employed within this state, becoming due subsequent to the levy of the attachment, as a preference is not given by the statute. It is different where a warrant to collect the tax has been issued prior to the levy of the attachment giving a specific lien.*^ § 217. Motion to vacate attachment. Defeating attachment.— The foreign corporation or any person who has acquired a lien upon or interest in its property after it is attached may, at any time before the actual application of the attached property or the proceeds thereof to the payment of the judgment recovered, apply to vacate or modify the warrant" An. attachment against a for- «National Park Bank of N. Y. v. Clark, 38 Misc. 558 ; s. c, 77 N. Y. Supp. 1089. See Lindquist v. Glines, 3 Misc. 214; s. c, 23 N. Y. Supp. 272. "Mosher v. Supreme Sitting, 0. I. H., 88 Hun, 394; s. c, 34 N. Y. Supp. 816. "Woerishoffer v. North Kiver Con. Co., 6 Civil Pro. Eep. 113; Hammond v. National Life Asso., 58 App. Div. 453; s. c, 69 N. Y. Supp. 585, appeal dis- missed, 168 N. Y. 262; Sands v. E. S. Greeley & Co., 88 Fed. 130; s. c, 31 C. C. A. 424, U. S. Cir. Ct. of Ap., 2nd Cir. "Wise V. L. & C. Wise Co., 153 N. Y. 507. For General Tax,, see sec. 31, supra. "Code Civil Pro., sec. 682. Attachment. 327 eign corpofation will not be vacated on the motion of a domestic corporation of the same name on the ground that property of the latter has been levied on.*^ If a motion to vacate an attachment because the affidavit does not show that the defendant is a foreign corporation, is made after judgment, and the defendant moves on the judgment, which recites that the defendant is a foreign corpo- ration, the defect in the original affidavit is cured, and the attach- ment will not be vacated/' A motion by a junior attaching-cred- itor of the property of a defendant on the ground that it is a for- ■eign corporation, to vacate a prior attachment, because the affi- ther than that whereof he is an inhabitant, does not apply to aliens, or alien corporations, who may be served in any district where valid serv- ice may be made on them, and that if an alien corporation has no officer or agent in the district authorized to receive service, it may be made on its financial agent, at his office in the district, at which the financial and monetary business of the corporation in this untry is transacted, and which has been advertised by it as its own office, especially in a patent suit, of whose subject matter the federal courts have exclusive jurisdiction, and that a mandamus -will issue from the Supreme Court of the United States to the Cir- ■cuit Court compelling it to take jurisdiction of a patent suit against an alien corporation so commenced/' The act of 1887 aplied to a suit for the infringement of a trade mark under the act of congress of March 3rd, 1881, and it was held that a corporation of Pennsylvania could not bring such a suit against a corporation of Massachusetts in the southern dis^ trict of Xew York, although the latter corporation had there its 3)rincipal office and place of business." The trade mark act of February 20, 1905, provides that the Circuit Court shall have orig- inal jurisdiction of all suits at law or in equity respecting trade marks registered under the act without regard to the amount in controversy. The judiciary act of 1887 undoubtedly applies to such suits other than as to amount involved. § 231. Removal of actions to federal court — The judiciary act of 1887, as corrected in 1888, provides that any suit of a civil nature, at common law or in equity, in which there shall be a con- troversy between citizens of different states, or between citizens of a state and those of a foreign country, in which the matter in dis- "See sees. 6-17, supra. "See sees. 177, 178, supra. "In re Hohorst, 150 U. S. 653. nn re Keasbey & M. Co., 160 U. S. 221. 344 Suits By and Against. pute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, brought in any state court, may be removed into the Circuit Court of the United States for the proper district, by the defendant or defendants therein, being non-residents of that state ; and that vs^hen, in any such suit, there shall be a controversy, which is wholly between citizens of different states, and which can be fully determined as between them, then either one or more of the defendants, actually interested in such controversy, may so- remove the suit; and that when a suit is brought in a state court, in which there is a controversy between a citizen of that state and a citizen of another state, and it shall appear to such Circuit Court that from prejudice or local influence, any defendant will not be able to obtain justice in the state court, he, being such citizen of another state, may so remove such suit. An action by a resident assignee of a foreign corporation, against another foreign corpo- ration, for loss of goods transported by the latter as a common car- rier, is not removable to the federal court, as the statute provides that the federal court shall not have cognizance of a suit on a chose in action in favor of an assignee, unless the suit could have been prosecuted if no assignment had been made, and such cause of ac- tion is a chose in action.*' If a corporation of one state is incorpo- rated also in another state, it may as a corporation of its original state remove to the federal court an action brought against it in a court of the second state by a citizen thereof. The contrary was held in a ease where the corporation was sued as a corporation of both states.''* It is provided in section 3 of the act of 1887 that a party entitled to removal shall file a petition and bond in the state court, and that thereupon that court shall proceed no further in the suit." An allegation in the petition that the defendant is a corporation organized under the laws of a certain foreign country, is a sufficient allegation that it is a citizen of that country.^" The petition of a foreign corporation defendant may be verified by its "See sec. 224, supra. "See see. 229, supra. "Holden v. Putnam Fire Ins. Co., 46 N. Y. 1; Stevens v. Phoenix Ins. Co. of H., 41 N. Y. 149 ; Shaft v. Phoenix M. L. Ins. Co., 67 N. Y. 544. "■Continental W-P. Co. v. Lewis Voight & S. Co., 106 Fed. 550, U. S. Cir. Ct., S. D. N. Y.; Muller v. Dows, 94 U. S. 444. Federal Courts. 345 president/^ or by its general agent in this state, if an affidavit is attached showing his authority to act for the corporation/^ or by an agent appointed by i; s. c, 48 N. Y. Supp. 26. "Mosher v. Supreme Sitting, 0. I. H., 88 Hun, 394; s. c, 34 N. Y. Supp. S16. "Mabon v. Ongley E. Co., 156 N. Y. 196. "Dreyfus & Co. v. Charles Seale & Co., 37 App. Div. 351; s. c, 55 N. Y. Supp. 1111. 376 Visitation. ment of an ancillary receiver here, unless ne shows facts making it necessary. The sole existence of unadministered assets in this state is not sufficient, as the foreign receiver has suflacient power in the premises.^^ Probably the rule is different in the federal courts, as the foreign receiver cannot sue there. ^' It has been held that in the absence of allegations of the existence of assets of the corporation and of damage to the stockholder, a general allegation of misconduct and incompetency by the directors and officers is not sufficient to state a cause of action for the appointment of a re- ceiver of a foreign corporation by a court of this state at the suit of such stockholder." § 256. Effect of injunction in the home state. Notice to attor- ney-general. — If a court of its home state appoints a receiver of an insolvent corporation, and enjoins it and its officers from inr terfering with its assets or exercising any of its franchises, such injunction extends into other states, and an officer cannot enter a valid appearance for the corporation in a federal or state court in another state, unless authorized by statute of the other state, and the receiver may have a judgment entered on such an appear- ance set aside as invalid.*^ And if an officer attempts to inter- fere with the assets in the other state, the federal court there may, at suit of the receiver appointed in the home state, appoint a re- ceiver of the assets in the other state, and enjoin the officer form interfering with them.*^ A statute of 1883, in relation to receivers of corporations, pro- vides that all papers in every action or proceeding for the disso- lution of a corporation or a distribution of its assets shall be served on the attorney-general. It has been held by the Appellate "Mabon v. Ongley E. Co., 156 N. Y. 196. "Great Western Mining Co. v. Harris, 198 U. S. 561. "Phillips V. Sonora Copper Co., 90 App. Div. 140; s. c, 86 N. Y. Supp. 200. "Rust V. United Waterworks Co., 17 C. C. A. 16; s. c, 70 Fed. 129, U. S, Cir. Ct. of Ap., 8th Cir.; Stone v. Poctiac K. R., N. Y. Law Journal, April 13, 1905. "Williams v. Hintermeister, 26 Fed. 889, U. S. Cir. Ct., W. D. Penn. Receivees. 377 Division that it does not apply, to a foreign corporation, but the Court of Appeals has intimated that it does so apply.*'' § 257. Effect of section 1780, Code of Civil Pro. Effect of section 15, General Corporation Law.— Section 1780 of the Code of Civil Procedure provides that an action against a foreign cor- poration may be brought by a non-resident of this state, among other eases, where the cause of action arose within this state, and under that section it has been held that a court of this state has juris- diction of an action by a non-resident stockholder of a foreign cor- poration against it, for the appointment of a receiver here, on the ground that the corporation has officers, creditors and property here, and has made to a resident of this state a general assignment with preferences, and that it is insolvent, and that a receiver has been appointed in the home state, as the property to be protected is in this state, and as the assignment from which the cause of action arose was made here.*^ But the Appellate Division of the SuiDreme Court has held that where a non-resident stockholder brings an action against a foreign corporation for a receiver to preserve assets, section 1780 does not apply, as section 1810 authorizes such an action in a proper case by any stockholder, irre- spective of his place of residence." It is no objection to an application for a receiver of a foreign corporation that it never procured a certificate under section 15 of the General Corporation Law, as a pre-requisite of doing business in this state.^" § 258. Federal court receiver. — It is a general rule that a fed- eral court in another state will not entertain a bill for the appoint- "L. 1883, ch. 378, see. 8; MacNabb v. Porter A. L. Co., 44 App. Div. 102; s. c., 60 N. Y. Supp. 694; Mabon v. Ongley E. Co., 156 N. Y. 196. "Code Civil Pro. see. 1780, printed in the appendix. Walter v. F. E. Mc- Alister Co., 21 Misc. 747; s. c., 48 N. Y. Supp. 26; Mabon v. Ongley E. Co., 24 App. Div. 50; s. c, 48 N. Y. Supp. 973, reversed in effect, but on another ground, 156 N. Y. 196. "MacNabb v. Porter A. L. Co., 44 App. Div. 102 ; s. c, 60 N. Y. Supp. 694, "L. 1892, ch. 687, sec. 15, printed in the appendix. Walter v. F. E. Mo< Alister Co., supra; Williams v. Hintermeister, 26 Fed. 889, U. S. Cir. Ct., W. D. Penn. 378 Visitation. ment of a receiver of a corporation, until the courts of the home state have been resorted to." It will do so in a proper case where the corporation voluntarily appears and consents to the appoint- ment. If a federal court of one state appoints a receiver of a foreign corporation doing business there, the corporation appearing and consenting to the jurisdiction and to the appointment, the receiver so appointed is entitled to the possession of the assets in that state as against a receiver subsequently appointed in the home state, if the corporation has no property, officer or director in the home state, except one director, as required by its charter. ^^ If a corporation of one state, sued in another state, voluntarily ap- pears and consents to the appointment of a receiver of its assets, its stockholders and creditors, becoming parties to such suit by an intervening petition, may not object that the corporation can be sued only in the district where it is an inhabitant under the federal judiciary act of 1887, as corrected in 1888.^^ A court of one state has power to appoint a receiver of the assets within that state of a foreign corporation, and if the receiver resigns, and the cause is removed to the federal court, it may appoint in his place the re- ceiver appointed in the home state as ancillary receiver.^* •§259. Power of ancillary receiver. Xurning over assets. — An ancillary receiver of a foreign corporation, appointed pendente lite in this state, is not a trustee, but a mere custodian, and cannot maintain an action to set aside a fraudulent transfer by. the cor- poration unless so authorized by the order appointing him. The statute of this state allowing a receiver of an insolvent corporation to disaffirm its fraudulent acts does not apply to him.^^ Under the objection of a minority stockholder of a foreign corporation, a sale "Leary v. Columbia R. & P. S. X. Co., 82 Fed. 775, U. S. Cir. Ct, D. Wash., N. D.; Eepublican M. S. Mines v. Brown, 58 Fed. 644; 8. u., 7 C. C. A. 412, U. S. Cir. Ct. of Ap., 8th Cir. •^Lewis V. American N. S. Co., 119 Fed. 391, U. S. Cir. Ct., E. D. La. "Central Trust Co. of N. Y. v. McGeorge, 151 U. S. 129. "Shianey v. North American S. L. & B. Co., 97 Fed. 9, U. S. Cir. Ct., D. Utah. ""Buckley v. Harrison, 10 Misc. 683; s. c, 31 N. Y Supp. 999. See sec. 251, supra. Eeceivbes. 379 of its assets in this state made by ancillary receivers at an inade- quate price under an order of the court obtained without giving the court full information will not be confirmed.^^ When a foreign receiver is obliged to invoke the aid of the court of another state in asserting his title to assets within its jurisdiction, such court will not in the exercise of comity recognize his title to the prejudice of citizens of its own state who have fairly acquired title to the assets, either by purchase, attachment or other legal process, or whose claims are entitled to priority as equitable liens. If the court ap- points an ancillary receiver, he becomes its officer, and is com- pletely amenable to its control, and it rests in the discretion of the court whether the assets shall be distributed under its own direction or shall be transmitted to the primary receiver. There is no hard and fast rule in the federal court to control the discretion of the court in making such distribution of the assets as shall be just to all creditors, and ultimately affect a ratable distribution of all the property of the corporation." It has been held by the Special Term of the Supreme Cotirt of this state that as the receivership here is designed to preserve local assets for domestic creditors, there is no warrant for allowing the claims of a receiver appointed in the home state or of counsel in the foreign receivership pro- ceedings out of such assets, when insufficient to pay all domestic creditors in full.^* § 260. Liens on local assets. — If receivers of a corporation, appointed in the home state in dissolution proceedings there, are made ancillary receivers in another state, where the corporation has deposited securities with the state treasurer as a condition of doing business there, under a local statute providing that such securities shall be held for the benefit of local shareholders and in trust to secure any judgment against the corporation, the local court will not direct the state treasurer to turn over the securities "Strickland v. National Salt Co., 43 Misc. 172 ; s. c, 88 N. Y. Supp. 323. "Sands v. E. S. Greeley &, Co., 88 Fed. 130; s. c, 31 C. C. A. 424, U. S. Cir. Ct. of Ap., 2nd Cir. "Reilly v. Oliver Keilly Co., N. Y. Law Journal, May 17, 1905. 380 Visitation. to the receiver.^' Likewise a court of this state ^vill require an assignee of a foreign corporation, appointed in the home state, to give a bond to the receiver appointed in this state, on his turn- ing over the general assets in this state to such assignee, condi- tioned that the creditors here will share in such general assets with other creditors pro rata, irrespective of payments made from the securities so deposited/" If a foreign benevolent corporation, having local branches in this state, fails in carrying out its cor- porate objects, and passes into the hands of a receiver in the home state, a reserve fund set aside by a local branch in this state from assessments on its members, should be returned to such members, and not sent to such receiver or distributed among all the local branches in this state.^^ The priorities between the lien of the levy of a warrant of attachment against the property of a foreign corporation and the title thereto of a receiver of the corporation has been considered already.^^ It has been held by the Supreme Court of tbe United States that a Tennessee statute, allowing a mining and manufacturing corporation of another state or country to do business in that state upon complying with certain prelim- inary conditions, and declaring that it shall be deemed a corpora- tion of Tennessee, and that its creditors, residents of Tennessee, shall have priority in the distribution of its assets in that state over its creditors, residents of other states and countries, so far as such statute gives priority to Tennessee creditors of a foreign corporation, complying with its provisions, over individual Ohio creditors, is void under the clause of the federal constitution, pro- viding that the citizens of each state shall be entitled to all privi- leges and immunities of citizens in the several states, but so far as it gives priority to Tennessee creditors over a Virginia corpora- tion creditor, it is not void under such clause, as a corporation is not a citizen under such clause, nor is it void in such case under "Kelsey v. Republic S. & L. Asso., 110 Fed. 40, U. S. Cir. Ct., D. Del. "People v. Granite S. P. Asso., 161 N. Y. 492. "Lindquist v. Glines, 3 Misc. 214; s. c, 23 N. Y. Supp. 272. See National Park Bank of N. Y. v. Clark, 38 Misc. 558 ; s. c, 77 N. Y. Supp. 1089. "See sec. 215, supra. Receivers. 381 the 14tli amendment to the federal constitution, providing that no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, 'nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws, as such Virginia corporation creditor has due process of law by being made a party to the dis- tribution proceeding, and as it is not within the jurisdiction of Tennessee, so as to be entitled to the equal protection of the laws.*' "Blake v. McClung, 172 U. S. 239 ; followed in Sully v. American Nat. Bank, 178 U. S. 289. APPENDIX OF NEW YORK STATUTES. .(383) iLPPElN'DIX:. EVIDENCE. X. 1877, ch. Sll.^An act in relation to corporations or joint-stock companies of other states, territories, or dominion of Canada. I 1. Evidence of corporate existence of foreign corporations. — Whenever, by the laws of any other state or territory or the do- minioH of Canada, a copy of the certificate of organization or in- corporation or any other certificate, certified or exeniplified by any officer or officers in such state or territory or dominion, is, or shall be prima facie evidence of the due formation, creation, existence, organization or capacity of any corporation or joint-stock company, created, organized 'or located in such state, territory or dominion, or claiming so to be, such certificate or certificates, duly exempli- fied, or a duly exemplified copy thereof, shall be received in all ac- tions and proceedings in this state, in or before all courts and of- ficers, with the same force and effect in all respects as prima facie evidence as aforesaid as in such other state, territory or dominion. THE GENERAL CORPORATION LAW. I.. 1890, ch. 563.— An act in relation to corporations constituting chapter thirty-five of the General Iiaws. 1. 1892, ch. 687.— An act to amend the General Corporation Law.l § 6. Corporate names — JSTo certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state, or a name 'The act of 1892 amended the entire General Corporation Law, not by sec- tions but as a whole, thus superseding completely all the provisions of the act of 1890. The text of the act of 1892 as amended to date is given. (385) 25 386 Appendix. L. 1892, ch. 687. SO nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its in- corporation, or of authorizing it to do business in this state. A corporation formed by the reincorporation, reorganization or con- solidation of other corporations or upon the sale of the property or franchises of a corporation, may have the same name as the corporation or one of the corporations to whose franchises it has succeeded. No corporation shall be hereafter organized under the laws of this state, with the word trust, bank, banking, insurance, assurance, indemnity, guarantee, guaranty, savings, investment, loan or benefit as part of its name, except a corporation formed under the Banking Law or the Insurance Law. (Thus amended ly L. 1902, ch. 9.) § 15. Certificate of authority of a foreign corporation. — No foreign stock corporation other than a moneyed corporation, shall do business in this state without having first procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the business of the corporatioui to be carried on in this state is such as may be lawfully carried on by a corporation in- corporated under the laws of this state for such or similar busi- ness, or if more than one kind of business, by two or more corpora- tions so incorporated for such kinds of business respectively. The secretary of state shall deliver such certificate to every such cor- poration so complying with the requirements of law. No such cor- poration now doing business in this state shall do business herein after December thirty-first, eighteen hundred and ninety-two, with- out having procured such certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date. 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 unless prior to the making of such contract it shall have procured such certificate. This prohibition shall also apply Appendix. 387 L. 1892, ch. 687. to any assignee of such foreign stock corporation and to any person claiming under such assignee or such foreign stock corporation or under either of them. No certificate of authority shall be granted to any foreign corporation having the same name as an existing domestic corporation, or a name so nearly resembling it as to be calculated to -deceive, nor to any foreign corporation, other than a moneyed or insurance corporation, with the word " trust," " bank," " banking," " insurance," " assurance," " indemnity," " guarantee," " guaranty," " savings," " investment," " loan," or " benefit," as a part of its name. {Thus amended by L. 1904,, ch. 490.) § 16. Proof to be filed before granting certificate. — Before granting such certificate the secretary of state shall require every such foreign corporation to file in his office a sworn copy in the English language of its charter or certificate of incorporation and a statement under its corporate seal particularly setting forth the business or objects of the corporation which it is engaged in carry- ing on or which it proposes to carry on within the state, and a place within the state which is to be its principal place of business, and designating in the manner prescribed in the Code of Civil Pro- cedure a person upon whom process against the corporation may be served within the state. The person so designated must have an office or place of business at the place where such corporation is to have its principal place of business within the state. Such designation shall continue in force until revoked by an instrument in writing designating in like manner some other person upon whom process against the corporation may be served in this state. If the person so designated dies or removes from the place where the corporation has its principal place of business within the state, and the corporation does not within thirty days after such death or removal designate in like manner another person upon whom process against it may be served within the state, the secretary of state may revoke the authority of the corporation to do business within the state, and process against the corporation in an action upon any liability incurred within this state before such revoca- 388 Appenmx. L. 1892, ch. 687. tion, may, after sueh death or removal, and before another desig- nation is made, be served upon the secretary of state. At the time of such service the plaintiff shall pay to the secretary of state two dollars, to be included in his taxable costs and disbursements, and the secretary of state shall forthwith mail a copy of such notice to such corporation if its address, or the address of any ofScer thereof, is known to him. {Thus amended hy L. 1895, ch. 672.) § 17. Acquisition of real property in this state by certain for- eign corporations. — Any foreign corporation created under the laws of the United States, or of any state or territory thereof, and doing business in this state, may acquire such real property in this state as may be necessary for its corporate purposes in the trans- action of its business in this state, and convey the same by deed or otherwise in the same manner as a domestic corporation. § 18. Acquisition by foreign corporation of real property in this state — Any foreign corporation may purchase at a sale upon the foreclosure of any mortgage held by it, or upon any judgment or decree for debts due it, or upon any settlement to secure such debts, any real property within this state covered by or subject to such mortgage, judgment, decree or settlement, and may take by devise any real property situated within this state, and hold the same for not exceeding five years from the date of such pur- chase, or from the time when the right to the possession thereof vests in such devisee, and convey it by deed or otherwise, in the same manner as a domestic corporation. (Thus amended hy L. 1894, ch. 136.) § 19. Prohibition of banking powers. — 'So corporation, except a corporation formed under or subject to the banking laws, shall by any implication of construction be deemed to possess the power of carrying on the business of discounting bills, notes or other evi- dences of debt, of receiving deposits, or buying and selling bills of exchange, or shall issue bills, notes or other evidences of debt for circulation as money. {Thus amended hy L. 1904, ch. 236.) Appendix. 389 L. 1892, eh. 688. THE STOCK CORPORATION LAW. Ii. 1890, ch. 564. — An act in relation to stock corporations consti- tuting chapter thirty-eight of the General Laivs. Ii. 1892, ch. 688. — An act to amend the Stock Corporation Laiv.l § 7. Combinations abolished. — No domestic stock corporation and no foreign corporation doing business in this state shall com- bine with any other corporation or person for the creation of a monopoly or the unlawful restraint of trade or for the prevention of competition in any necessary of life. {Thus amended hy L. 1897, ch. 384.) § 8. Mortgage. — ^Whenever any mortgage affecting property or franchises within this state heretofore or hereafter executed by au- thority of the board of directors in behalf of any stock corporation, domestic or foreign, of any description, recites or represents in substance or effect that the execution of such mortgage has been duly consented to, or authorized by stockholders, such recital or representation in any such mortgage, after public record thereof within this state, shall be presumptive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law. After any such mortgage heretofore or hereafter shall have been publicly recorded for more than one year in one or more of the counties of this state containing the mortgaged premises or any part thereof, and the corporation shall have received value for bonds actually issued under and secured by such mortgage, and interest shall have been paid on any of such bonds according to the terms thereof, such recital or representation of such mortgage so recorded shall be conclusive evidence that the execution of such mortgage has been duly and sufficiently consented to, and 'The act of 1892 made the Stock Corporation Law chapter thirty-six of the General Laws and amended it, not by sections but as a whole, thus superseding completely all the provisions of the act of 1890. The text of the act of 1892 as amended to date is given. 390 Appendix. L. 1892, ch. 688. authorized by stockholders as required by any provision of law, and its validity shall not be impaired by reason of any defect or insuffi- ciency of consent or authority of stockholders or in filing or record- ing such consent or authority, and such mortgage shall be valid and binding upon the corporation, and those claiming under it, as se- curity for all valid bonds issued or to be issued thereunder, unless such mortgage shall be adjudged invalid in an action begun as here- inafter, in this section, provided. ^Notwithstanding the foregoing provisions of this section, the invalidity of any such mortgage here- tofore recorded because of insufficiency of consent by stockholders may be adjudged in any action for such purpose begun before the first day of April, nineteen hundred and two, and the invalidity of any such mortgage hereafter recorded, because of insufficiency of consent by stockholders, may be adjudged in any action: for such purpose begun, within one year after the earliest record of such mortgage in any county in this state, provided in either case that such action shall have been so begun by or in behalf of the corpo- ration by direction of the board of directors acting in their own discretion, or upon the written request of the holders of not less than one-third of the capital stock of the corporation; and in any such action so begun by or in behalf of the corporation, the recitals or representations of the mortgage shall be presumptive evidence only as first above provided. Whenever hereafter, in compliance with any law of this state, the officers of any corporation shall have made and filed and recorded a certificate that the execution of a mortgage hereafter made by the corporation has been duly consented to by stockholders, such certificate shall be conclusive evidence as to the truth thereof, in favor of any and all persons who in good faith shall receive or purchase, for value, any bond or obligation pur- porting to be secured by such mortgage, at any time when said cer- tificate shall remain of record and uncancelled. Nothing in this section contained shall affect any right or any remedy in respect of any such right of any creditor accrued before this enactment nor shall it dispense with the necessity of obtaining the consent of the Appendix. 391 L. 1892, ch. 688. board of railroad commissioners to any mortgage by a railroad cor- poration. (Added ly L. 1901, ch. 354. ) § 23. Liability of directors for making unauthorized dividends. — ^The directors of a stock corporation shall not make dividends, ex- -cept from the surplus profits arising from the business of such cor- jporation, nor divide, vsathdraw or in any way pay to the stockhold- ers or any of them, any part of the capital of such corporation, or reduce its capital stock; except as authorized by law. In case of any violation of the provisions of this section, the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to he entered at large upon the minutes of such directors at the time, or were not present "when the same happened, shall jointly and severally be liable to such ■corporation and to the creditors thereof to the full amount of any loss sustained by such corporation or its creditors respectively by Teason of such withdrawal, division or reduction. But this section shall not prevent a division and distribution of the assets of any such corporation remaining after the payment of all its debts and liabilities upon the dissolution of such corporation or the expiration •of its charter; nor shall it prevent a corporation from accepting shares of its capital stock in complete or, partial settlement of a debt owing to the corporation, which by the board of directors shall be deemed to be bad or doubtful. {Thus amended hy L. 1901, ch. 354.) § 25. Liability of directors for loans to stockholders. — No loan of moneys shall be made by any stock corporation, except a monied corporation, or by any officer thereof out of its funds to any stock- holder therein, nor shall any such corporation or officer discount any note or other evidence of debt, or receive the same in payment of any installment or any part thereof due or to become due on any jstock in such corporation, or receive or discount any note, or other evidence of debt, to enable anjr stockholder to withdraw any part •of the money paid in by "him on his stock. In case of the violation of 392 Appendix. L. 1892, ch. 688. any provision of this section, the officers or directors making such loan, or assenting thereto, or receiving or discounting such notes or other evidences of debt, shall, jointly and severally, be personally liable to the extent of such loan and interest, for all the debts of the corporation contracted before the repayment of the sum loaned, and to the full amount of the notes or other evidences of debt so re- ceived or discounted, with interest from the time such liability accrued. § 30. Annual report to secretary of state. — Every domestic stock corporation and every foreign stock corporation doing busi- ness within this state, except moneyed and railroad corporations, shall annually during the month of January, or, if doing business without the United States, before the first day of May, may make a report as of the first day of January, which will state : 1. The amount of its capital stock and the proportion actually issued. 2. The amount of its debts or an amount which they do not ex- ceed. 3. The amount of its assets or an amount which its assets at least equal. 4. The names and addresses of all the directors and officers of the company, and in the case of a foreign corporation, the name also of the person designated in the manner prescribed by the Code of Civil Procedure, as a person upon whom process against the cor- poration may be served within this state. Such report shall be made by the president or a vice-president or the treasurer or a secretary of the corporation and shall be filed in the office of the secretary of state. If such report be not so made and filed, any such officer who shall thereafter neglect or refuse to make and to file such report, within ten days after written request so to do shall have been made by a creditor or by a stockholder of the corporation, shall forfeit to the people the sum of fifty dollars for OTery day he shall so neglect or refuse, (Thus amende,d by L. 1905, ch. 415.) Appendix. 393 L. 1892, eh. 688. § 31. Liability of officers for false certificates, reports or pub- lic notices — If any certificate or report made or public notice given by the officers or directors of a stock corporation shall be false in any material representation, the officers and directors signing the same shall jointly and severally be personally liable to any person who has become a creditor or stockholder of the corporation upon the faith of any such certificate, report, notice or any material repre- sentation therein to the amount of the debt contracted upon the faith thereof if not paid vphen due, or of the damage sustained by any purchaser of or subscriber to its stock upon the faith thereof. The liability imposed by this section shall exist in all eases where the contents of any such certificate, report or notice or of any ma- terial representation therein shall have been communicated either directly or indirectly to the person so becoming a creditor or stock- holder and he became such creditor or stockholder upon the faith thereof. No action can be maintained for a cause of action created by this section unless brought within two years from the time the certificate, report or public notice shall have been made or given by the officers or directors of such corporation. § 34. No director or officer of any stock corporation shall be liable to any creditor of the corporation, because of the creation of any excessive indebtedness, or because of any failure to make or to file an annual report, whether heretofore or hereafter occurring ; (1) In case of any debty as to which personal liability of direct- ors or officers may be or shall have, been waived by such creditor, or by anyone under whom he claims ; or by any provision of any in- strument creating or securing such debt ; or (2) Unless vdthin three years after the occurrence of the act or the default in respect of which it shall be sought to charge the di- rector or officer, such creditor shall have served upon such director or officer -(vritten notice of his intention to hold him personally lia- ble for his claim ; provided, nevertheless, that any such liability, because of any such default now existing and not waived as above provided, may be enforced by action begun at any time within the 394 Appendix. L. 1892, ch. 688. year eighteen hundred and ninety-nine or by action begun there- after, if within such year written notice of intention to enforce such liability shall have been given as above provided. Any director or officer who, because of any such existing or future liability, shall pay any debt of the corporation, shall be subrogated to all rights of the creditor in respect thereof against the corporate property, but not against the stockholders of the corporation; and also shall be entitled to contribution from all other directors and officers of the corporation similarly liable for the same debt, arLd the personal representatives of any such director or officer who shall have died before making such contribution. {Added by L. 1899, ch. 354.) § 40. Issue and transfers of stock. — The stock of every stock corporation shall be represented by certificates prepared by the di- rectors and signed by the president or vice-president and secretary or treasurer, and sealed with the seal of the corporation, and shall be transferrable in the manner prescribed in this chapter and in the by-laws. 'No share shall be transferrable until all previous calls thereon shall have been fully paid in. Any stock corporation, domestic or foreign, now existing or hereafter organize^, except monied corporations, may purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any cor- poration, domestic or foreign, and issue in exchange therefor its stock, bonds or other obligations, if authorized so to do by a pro- vision in the certificate of incorporation of such stock corporation, or in any certificate amendatory thereof or supplementary thereto, filed in pursuance of law, or if the corporation whose stock is so purchased, acquired, held or disposed of, is engaged in a business similar to that of such stock corporation, or engaged in the manu- facture, use or sale of the property, or in the construction or opera- tion of works necessary or useful in the business of such stock cor- poration, or in which or in connection with which the manufac- tured articles, product or property of such stock corporation are or may be used, or is a corporation wilh which such stock corporation Appendix. 395' L. 1892, ch. 688. is or may be authorized to consolidate. When any such corporation shall be a stockholder in any other corporation, as herein provided, its president or other oiBcers shall be eligible to the office of director of such corporation, the same as if they were individually stock- holders therein and the corporation holding such stock shall possess and exercise in respect thereof, all the rights, povyers and privileges of individual owners or holders of such stock. Any stock corpora- tion may, in pursuance of a unanimous vote of its stockholders voting at a special meeting called for that purpose by notice in writing signed by a majority of the directors of such corporation stating the time and place and object of the meeting and served upon each stockholder appearing as such upon the books of the corporation, personally or by mail at his last known post-office address at least sixty days prior to such meeting, guarantee the bonds of any other domestic corporation engaged in the same gen- eral line of business ; and any stock corporation owning the entire capital stock of any other domestic stock corporation engaged in the same general line of business may in pursuance of a two-thirds vote of its stockholders voting at a special meeting called for that purpose by notice in writing signed by a majority of the directors of such corporation, stating the time and place and object of the meeting and served upon each stockholder appearing as such upon the books of the corporation personally, or by mail, at his last known post-office, at least sixty days prior to such meeting, guar- antee the bonds of such other corporation. {Thus amended by L. 1902, ch. 601.) § 48. Prohibited transfers to officers or stockholders. — JSTo cor- poration which shall have refused to pay any of its notes or other obligations when due, in lawful money of the United States, nor any of its officers or directors, shall transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of the property paid in cash. ISTo conveyance, as- 396 Appendix. L. 1892, ch. 688. signment or transfer of any property of any such corporation by it or by any officer, director or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insolvent or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation, shall be valid, except that laborers' wages for services shall be pre- ferred claims and be entitled to payment before any other creditors out of the corporation assets in excess of valid prior liens or incum- brances. Xo corporation formed under or subject to the banking, insurance or railroad law, shall make any assignment in contem- plation of insolvency. Every person receiving by means of any such prohibited act or deed any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees. No stockholder of any such corporation shall make any transfer or assignment of his stock therein to any person in con- templation of its insolvency. Every transfer or assignment or other act done in violation of the foregoing provisions of this sec- tion shall be void. No conveyance, assignment or transfer of any property of a corporation formed under or subject to the banking law, exceeding in value one thousand dollars, shall be made by such corporation, or by any officer or director thereof, unless au- thorized by previous resolution of its board of directors, e.xcept promissory notes or other evidences of debt issued or received by the officers of the corporation in the transaction of its ordinary business and except payments in specie or other current money or in bank bills made by such officers. No such conveyance, assign- ment or transfer shall be void in the hands of a purchaser for a valuable consideration without notice. Every director or officer of a corporation who shall violate or be concerned in violating any provisions of this section, shall be personally liable to the creditors and stockholders of the corporation of which he shall be director or an officer to the full extent of any loss they may respectively sustain by such violation. (Thus amended by L. 1901, ch. 354.) Appendix. 397 L. 1892, ch. 688. § 53. Stock books of foreign corporations. — 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 in- spection of its stockholders ■ and judgment creditors, and any of- ficer of the state authorized by law to investigate the affairs of any such corporation. If any such foreign stock corporation has in this state a transfer agent, whether such agent shall be a corporation or a natural person, such stock book may be deposited in the office of such agent and shall be open to inspection at all times during the usual hours of transacting business, to any stockholder, judgment creditor or officer of the state authorized by law to investigate the affairs of 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. (Thus amended by L. 1897, ch. 384.) § 60. Liabilities of officers, directors and stockholders of for- eign corporations. — Except as otherwise provided in this chapter the officers, directors and stockholders of a foreign stock corpora- tion transacting business in this state, except monied and railroad corporations, shall be liable under the provisions of this chapter, in the same manner and to the same extent as the officers, directors and stockholders of a domestic corporation, for : 1. The making of unauthorized dividends ; 2. The creation of unauthorized and excessive indebtedness; 3. Unlawful loans to stockholders ; 4. Making false certificates, reports or public notices ; B98 'ApPEiiTDix, L. 1892, ch.. 689. 5. An illegal transfer of the stock and property of such corpo- ration, when it is insolvent or its insolvency is threatened ; 6. The failure to file an annual report. Such liabilities may be enforced in the courts of this state, in the same manner as similar liabilities imposed by law upon the ofiicers, directors and stockholders of domestic corporations. {Added by L. 1897, ch. 3S4.) THE BANKING LAW. X. 1892, ch. 689. — An act in relation to banking corporations. § 156. Powers of corporation. — Upon the filing of any such cer- tificate of authorization of a trust company, the persons named therein and their successors shall thereupon and thereby become a corporation and in addition to the powers conferred by the General and Stock Corporation Laws, shall have power : 1. To act as the fiscal or transfer agent of any state, munici- pality, body politic or corporation ; and in such capacity to receive and disburse money, to transfer, register and countersign certifi- cates of stock, bonds or other evidences of indebtedness, and to act as agent of any corporation, foreign or domestic, for any lawful purpose. 2. To receive deposits of trust moneys, securities and other per- sonal property from any person or corporation, and to loan money on real or personal securities. 3. To lease, hold, purchase and convey any and all real prop- erty necessary in the transaction of its business, or which the pur- poses of the corporation may require, or which it shall acquire in satisfaction or partial satisfaction of debts due the corporation under sales, judgments or mortgages, or in settlement or partial settlement of debts due the corporation by any of its debtors. Appendix. 399 L. 1892, eh. 689. 4. To act as trustee under any mortgage or bonds issued by any municipality, body politic or corporation^ and Accept and execute any otber municipal or corporate trust not inconsistent with the laws of this state. 5. To accept trusts from and execute trusts for married women,. in respect to their separate property, and to be their agent in the management of such property or to transact any business in rela- tion thereto. 6. To act under the order or appointment of any court of record as guardian, receiver or trustee of the estate of any minor, and as depository of any moneys paid into court, whether for the benefit of any such minor or other person, corporation or party. 1. To take, accept and execute any and all such legal trusts, du- ties and powers in regard to the holding, management and disposi- tion of any estate, real or personal, and the rents and profits thereof,, or the sale thereof, as may be granted or confided to it by any court of record, or by any person, corporation, municipality or other au- thority; and it shall be accountable to all parties in interest for the faithful discharge of every such trust, duty or power which it may so accept. 8. To take, accept and execute any and all such trusts and powers of whatever nature or description as may be conferred upon or in- trusted or committed to it by any person or persons, or any body politic, corporation or other authority, by grant, assignment, trans- fer, devise, bequest or otherwise, or which may be intrusted or com- mitted or transferred to it or vested in it by order of any court of record, or any surrogate, and to receive and take and hold any prop- erty or estate, real or personal, which may be the subject of any such trust. 9. To purchase, invest in, and sell stocks, bills of exchange, bonds and mortgages and other securities ; and when moneys or securities for moneys are borrowed or received on deposit, or for investment, the bonds or obligations of the company may be given therefor, but it shall have no right to issue bills to circulate as money. 400 Appendix. L. 1892, ch. 689. 10. To be appointed and to accept the appointment of executor of or trustee under the last will and testament, or administrator with or without the will annexed, of the estate of any deceased per- son, and to he appointed and to act as the committee of the estates of lunatics, idiots, persons of unsound mind and habitual drunk- ards. 11. To exercise the powers and possess the privileges conferred on banks and individual bankers by sections fifty-five and fifty-six of this act, subject to the restrictions contained in said sections. No such corporation shall have any right or power to make any contract, or to accept or to execute any trust whatever, which it would not be lawful for any individual to make, accept or execute. No loan exceeding one-tenth of its capital stock, shall be made by any such corporation (directly or indirectly), to any director or ofiicer thereof and such loan to such director or officer shall not be made without the consent of a majority of the directors. No such corporation shall transact its ordinary business by branch office in any city not named in its certificate of incorporation or charter as the place where its business is to be transacted. No foreign corpo- ration shall have or exercise in this state any of the powers speci- fied in subdivisions one, two, four, five, six, seven, eight, ten, and eleven, nor have or maintain an office in this state for the transac- tion of, or transact directly or indirectly, any such or similar busi- ness. (Thus amended by L. 1904, ch. 492, and L. 1905, ch. 414.) Appendix. 401 L. 1896, ch. 547. THE REAL PROPERTY LAW. X. 1896, ch. 547. — ^An act relating to real property, constitntine chapter forty-six of the General Lairs. § 258. Acknowledgment by corporation and form of certificate. — The acknowledgment of a conveyance or other instrument by a corporation, must be made by some officer thereof authorized to execute the same by the board of directors of said corporation. The certificate of acknowledgment must be in substantially the following form, the blanks being properly filled : State of New York, ) \ ss. : County of. , ) On the day of in the year , before me personally came to me known, who, being by me duly sworn, did depose and say that he resided in ; that he is the (president or other officer) of the (name of corpora- tion), the corporation described in and which executed the above instrument; that he knew the seal of said corporation; that the seal affixed to said instrument was such corporate seal ; that it was so affixed by order of the board of directors of said corporation, and that he signed his name thereto by like order. (Signature and office of officer taking acknowledgment.) If such corporation have no seal, that fact must be stated in place of the statements required respecting the seal. 26 402 Appendix. L. 1896, ch. 908. THE TAX LAW. Ii. 1896, ch. 908.— An act in relation to taxation, constitntlng chap- ter twenty-fonr of the General Iix. The Penal Code. or of any judgment, order, or decree of any court or officer, or a cer- tified or authenticated copy thereof ; or A judgment roll, judgment, order or decree of any court or officer, or an enrollment thereof, or a certified or authenticated copy thereof, or any document or writing purporting to be such judg- ment, order, decree, enrollment or copy ; or An entry made in any book of record or accounts, kept by or in the office of any officer of this state, or of any village, city, town, or county of this state, by which any demand, claim, obligation or interest, in favor of or against the people of the state, or any city, village, town or county, or any officer thereof, is or purports to be created, increased, diminished, discharged, or in any manner af- fected ; or an entry made in any book of records or accounts kept by a corporation doing business within the state, or in any account kept by such a corporation, whereby any pecuniary obligation, claim, or credit is or purports to be created, increased, diminished, discharged, or in any manner affected ; or An instrument, document or writing, being or purporting to be, a process or mandate issued by a competent court, magistrate, or officer of the state, or the return of an officer, court or tribunal, to such a process or mandate ; or a bond, recognizance, undertaking, pleading, or proceeding, filed or entered in any court of the state, or a certificate, order or allowance by a competent court or officer, or a license or authority granted pursuant to any statute of the state, or a certificate, document, instrument, or writing, made evi- dence by any law or statute ; or An instrument or writing, being or purporting to be the act of another, by which a pecuniary demand or obligation is or purports to be or to have been created, increased, discharged or diminished, or in any manner affected, or by which any rights or property what- ever are or purport to be or to have been created, transferred, con- veyed, discharged, increased or diminished, or in any manner af- fected, the punishment for forging, altering or counterfeiting which is not hereinbefore prescribed^ by which false making, forging, Appendix. 455 The Penal Code. altering, or counterfeiting, any person may be bound, affected or in any way injured in bis person or property ; or 3. Makes or engraves a plate in the form or similitude of a prom- issory note, bill of exchange, bank note, draft, cheque, certificate of deposit, or other evidence of debt, issued by a banker, or by any banking corporation or association, incorporated or carrying on business under the laws of the state, or of the United States, or of any other state or territory of the United States, or of any foreign government, or country, without the authority of such banker, or banking corporation or association; or Without like authority, has in his possession or custody such a plate, with intent to use, or permit the same to be used, for the pur- pose of taking therefrom any impression to be uttered ; or Without like authority, has in his possession or custody any im- pression taken from such'a plate, with intent to have the same filled Tip and completed for the purpose of being uttered ; or. Makes or engraves, or causes to be made or engraved, upon any plate, any figures or words, with intent that the same may be used for the purpose of falsely altering any evidence of debt hereinbe- fore mentioned. § 514. Other cases of forgery in third degree. — A person wh» either, 1. Being an ofiicer or in the employment of a corporation, asso- ciation, partnership or individuals falsifies, or unlawfully and cor- ruptly alters, erases, obliterates or destroys any accounts, books of accounts, records, or other writing, belonging to or appertaining^ to the business of the corporation, association or partnership or indi- viduals ; or, 2. Who, with intent to injure or defraud, shall falsely make, alter, forge or counterfeit, or shall cause, aid, abet, assist or other- wise connive at, or be a party to the making, altering, forging or counterfeiting of any letter, telegram or other written communica- tion, paper, or instrument, by which making, altering, forging or 456 Appendix. The Penal Code. counterfeiting, any other person shall be in any manner injured in his good name, standing, position or general reputation ; or, 3. Who shall alter, or who shall cause, aid, abet, or otherwise connive at, or be a party to the uttering of any letter, telegram, re- port or other written communication, paper or instrument purport- ing to have been written or signed by another person, or any paper purporting to be a copy of any such paper or writing where no orig- inal existed, which said letter, telegram, report or other written communication, paper or instrument, or paper purporting to be a copy thereof, as aforesaid, the person uttering the same shall know to be false, forged or counterfeited, and by the uttering of which the sentiments, opinions, conduct, character, prospects, interests or rights of such other person shall be misrepresented or otherwise in- juriously affected ; or, 4. With intent to defraud, shall forge, counterfeit or falsely alter and wrongfully utter any ticket, contract or other paper, or writing entitling, or purporting to entitle, the person whose name appears therein, or the holder or bearer thereof, to entrance upon the grounds or premises of any membership corporation, or being there- upon, to remain upon such grounds or premises ; or with like intent, shall use any such ticket, contract or other paper or writing, to effect an entrance or as evidence of his right to remain upon such grounds or premises ; or, with like intent, shall sell, exchange or de- liver, or keep or offer for sale, exchange or delivery, or receive upon any purchase, exchange or delivery, any such ticket, contract or other paper or writing, knowing the same to have been forged, coun- terfeited or falsely altered ; Is guilty of forgery in the third degree. (Thus amended hy L. 1884, ch. 378, andL. 1892, ch. 692.) § 515. Other cases of forgery in the third degree.— A person, who, with intent to defraud or to conceal any larceny or misappro- priation by any person of any money or property, either : 1. Alters, erases, obliterates, or destroys an account, book of ac- counts, record, or writing, belonging to, or appertaining to the busi- Appendix. 457 The Penal Code. ness of a corporation, association, public office or officer, partnership, or individiial ; or, 2. Makes a false entry in any such account or book of accounts ; or, 3. Willfully omits to make true entry of any material particular in any such account or book of accounts, made, written, or kept by him or under his direction ; Is guilty of forgery in the third degree. § 518. Officer of corporation selling, etc., shares. — An officer, agent or other person employed by any company or corporation ex- isting under the laws of this state, or of any other state or territory of the United States, or of any foreign government, who willfully and with a design to defraud, sells, pledges or issues, or causes to be sold, pledged or issued, or signs, or procures to be signed with intent to sell, pledge or issue, or to be sold, pledged or issued, a false, forged or fraudulent paper, writing or instrument, being or purporting to be a scrip, certificate or other evidence of the ownership or transfer of any share or shares of the capital stock of such company or corporation, or a bond or other evidence of debt of such company or corporation, or a certificate or other evidence of the ownership or of the transfer of any such bond or other evidence of debt, is guilty of forgery in the third degree, and upon convic- tion, in addition to the punishment prescribed in this title for that offense, may also be sentenced to pay a fine not exceeding three thousand dollars. § 519. Falsely indicating person as corporate officer. — The false making or forging of an instrument or writing, purporting to have been issued by or in behalf of a corporation or association, state or government, and bearing the pretended signature of any person therein falsely indicated as an agent or officer of such corpo- ration,' is forgery in the same degree, as if that person were in truth such officer or agent of the corporation or association, state or gov- ernment. 458 Appendix. The Penal Code. § 590. Frauds in the organization of corporations. — A persoa Avho : 1. Without authority subscribes the name of another to or inserts the name of another in any prospectus, circular or other advertise- ment or announcement of any corporation or joint-stock association existing or intended to be formed, with intent to permit the same to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member or pro- moter of such corporation or association ; or, 2. Signs the name of a fictitious person to any subscription for or agreement to take stock in any corporation, existing or proposed ; or, 3. Signs to any such subscription or agreement the name of any person, knowing that such person -does not intend in good faith to comply with the terms thereof, or under anj' understanding or agreement, that the term's of such subscription or agreement are not to be complied with or enforced ; Is guilty of a misdemeanor. (As amended by L. 1892, ch. 692.) § 591. Fraudulent issue of stock, scrip, &c. — An officer, agent or other person in the service of any joint-stock company, or corpo- ration formed or existing undetr the laws of this state, or of the- United States, or of any state or territory thereof, or of any foreign government or country, who willfully and knovdngly with intent to defraud; either 1. Sells, pledges or issues, or causes to be sold, pledged, or issued, or signs or executes^ or causes^ to be signed or executed, with intent to sell, pledges or issues, or causes to be sold, pledged or issued, any certificate or instrument purporting to be a certificate or evidence of the ownership of any share or shares of such company or corpo- ration, or any bond or evidence of dfebt, or writing purporting to be a bond or evidence of debt of such company or corporation, with- out being first thereto duly authorized by such company or corpora- tion, or contrary to the charter or laws under which such corpora- tion or company exists, or in excess of the power of such company Appendix. 459 The Penal Code. or corporation, or of the limit imposed by law or otherwise upon its power to create or issue stock or evidences of debt ; or, 2. Ee-issues, sells, pledges or disposes of, or causes to be re-issued, sold, pledged or disposed of, any surrendered or cancelled certifi- cates, or other evidence of the transfer or ownership of any such share or shares ; Is punishable by imprisonment for a term not exceeding seven years, or by a fine not exceeding three thousand dollars, or by both. (As amended by L. 1892, ch. 662.) § 592. Frauds in procuring organization of corporation, or increase of capital. — ^An officer, agent or clerk of a corporation, or of persons proposing to organize a corporation, or to increase the capital stock of a corporation, who knowingly exhibits a false, forged or altered book, paper, voucher, security or other instrument of evidence to any public officer or board authorized by law to ex- amine the organization of such corporation, or to investigate its affairs, or to allow an increase of its capital, with intent to deceive such officer or board in respect thereto, is punishable by imprison- ment in a state prison not exceeding ten years. {As amended by L. 1892, ch. 662.) § 593. Acting for delinquent foreign corporation. — ^Any per- son, or corporation, who, 1. Acts as agent or representative of any mortgage company or co-operative loan and building association organized outside of this state, while such mortgage company or co-operative loan and build- ing association shall not be authorized under a license of the super- intendent of banks to do business in this state ; or, 2. Acts as agent or representative in this state of a foreign corpo- ration, other than a monied corporation, with the words " trust," "bank," "banking," "insurance," "assurance," "indemnity," "guarantee," "guaranty," "savings," "investment," "loan," " benefit," or any other words or terms indicating, representing or holding out such company to be a monied corporation as a part of 460 Appendix. The Penal Code. its name or corporate title, or who, in connection with such corpora- tion or otherwise, shall put forth any sign containing said name, or who shall advertise or publish the said company as doing business in this state, directly or indirectly, through agents or otherwise, while such company shall not be authorized under a certificate pro- cured from the secretary of state pursuant to section fifteen of the general corporation law to do business in this state, is guilty of a misdemeanor. (Thus amended hy L, 1904, ch. 489.) § 594. Misconduct of directors of stock corporations. — A di- rector of a stock corporation, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is in- tended : 1. To make a dividend, except from the surplus profits arising from the business of the corporation, and in the cases and manner allowed by law ; or, 2. To divide, withdraw, or in any manner pay to the stockhold- ers, or any of them, any part of the capital stock of the corporation ; or to reduce such capital stock without the consent of the legisla- ture; or, 3. To discount or receive any note or other evidence of debt in payment of an installment of capital stock actually called in, and required to be paid, or with intent to provide the means of making such payment ; or, 4. To receive or discount any note or other evidence of debt with intent to enable any stockholder to withdraw any part of the money paid in by him on his stock ; or, 5. To apply any portion of the funds of such corporation, except surplus profits, directly or indirectly, to the purchase of shares of its own stock ; is guilty of a misdemeanor. {As amended hy L. 1892, ch. 692, and L. 1901, ch. 588. This sectimi as originally passed ended with the words '' is guilty of a misdemeanor." The question has been raised whether the amendment of 1892 did not omit these words. The amendment of 1901 repealed all of subdi- visions 6 and 7.) Appendix. 461 The Penal Code. § 608. Name. — Any person, association or corporation, otter than a monied corporation, who shall within this state directly or indirectly, or through agents or representatives transact business under, or in anywise use a corporate name or a corporate title with the words " trust," " bank," " banking," " insurance," " assur- ance," " indemnity," " guarantee," " guaranty," " savings," " in- vestment," " loan," " benefit," as a part of such name or title, is guilty of a misdemeanor; provided, however, that any domestic corporation, other than a monied corporation, heretofore duly or- organized and heretofore duly authorized by law to use and at the time of the passage of this act lawfully using either or any of such words as a part of its lawful corporate title, may lawfully continue to use such corporate title, provided and if it, being a corporation other than a monied corporation, shall, wherever the name shall be printed, written, engraved or displayed, add, in legible English characters, of substantially the same size and style as the name, di- rectly under the said name or immediately in connection there- with, wherever so used, the words " not a moneyed corporation." (Added by L. 1904, ch. 489.) § 610. Misconduct of officers and directors of stock corpora- tions. — ^An ofScer or director of a stock corporation who : 1. Isues, participates in issuing, or concurs in a vote to issue any increase of its capital stock beyond the aroount of the capital stock thereof, duly authorized by or in pursuance of law ; or, 2. Sells, or agrees to sell, or is directly or indirectly interested in the sale of any share of stock of such corporation, or in any agree- ment to sell the same, unless at the time of such sale or agreement he is an actual owner of such share ; Is guilty of a misdemeanor, punishable by imprisonment for not less than Six months, or by a fine not exceeding five thousand dol- lars or both. (The former provision was transferred to section 614, and the present section added hy L. 1892, ch. 692.) 462 Appendix. The Penal Code. § 611. Misconduct of officers and employes of corporations. — A director, officer, agent or employe of any corporation or joint- stock association, who : 1. Knowingly receives or possesses himself of any of its propenty otherwise than in payment for a just demand, and with intent to defraud, omits to make or to cause or direct to be made a full and true entry thereof in its books and accounts ; or, 2. Concurs in omitting to make any material entry thereof; or, 3. Knowingly concurs in making or publishing any written re- port, exhibit or statement of its affairs or pecuniary condition, containing any material statement which is false ; or, 4. Having the custody or control of its books, willfully refuses or neglects to make any proper entry in the stock book of such cor- poration as required by law, or to exhibit or allow the same to be inspected and extracts to be taken therefrom by any person entitled by law to inspect the same or to take extracts therefrom ; or, 5. If a notice of an application for an injunction affecting the property or business of such joint-stock association or corporation is served upon him, omits to disclose the fact of such service and the time and place of such application to the other directors, officers and managers thereof ; or, 6. Kefuses or neglects to make any report or statement lawfully required by a public officer ; Is guilty of a misdemeanor. (As amended hy L. 1892, ch. 692, (mdL. 1893, ch. 692.) § 613. Misconduct at corporate elections. — Any person who: 2. Being entitled to vote at any meeting of the stockholders or bondholders or both of a stock corporation, sells his vote, or who issues a proxy to vote to any person for any sum of money or thing of value except as expressly authorized by law ; or, 3. Acts as an inspector of election at any such meeting, and vio- lates an oath taken by him, in pursuance of law as such inspector, or violates the provisions of an oath required by law to be taken by Appendix. , 463 The Penal Code. him as such, inspector, or is guilty of any dishonest or corrupt con- duct as such inspector ; Is guilty of a misdemeanor. {Thus amended hy L. 1892, ch. 692, anJL: 1901, c/i. r88.) § 614. Presumption of knowledge of corporate condition and business and of assent thereto by directors; definitions. — It is no defense to a prosecution for a violation of the provisions of this chapter, that the corporation is a foreign corporation, if it carries on business or keeps an office therefor in this state. The term " director " as used in this chapter includes any of the persons having, by lavsr, the direction or management of the affairs of a corporation, by whatever name described. A director of a corporation or joint-stock association is deemed to have such a knowledge of the' affairs of the corporation or asso- ciation as' to enable him to determine whether any act, proceeding or omission of its directors is a violation of this chapter. If pres- ent at a meeting of the directors at which any act, proceeding or omission of such directors in violation of this chapter occurs, he" must be deemed to have concurred therein, unless he at the time causes or in writing requires his dissent therefrom to be entered on the minutes of the directors. If absent from such meeting, he must be deemed to have concurred in any such violation, if the facts constituting such violation appear on the record or minutes of the proceedings of the board of directors, and he remains a di- reetor of the corporation for six months thereafter without causing or in writing requiring his dissent from such violation to be en- tered on. such record of minutes. {Thus amended by L. 1892, ch. 692.) 464 Appendix. The Code of Civil Procedure. THE CODE OF CIVIL PROCEDURE. Ii. 1876, ch. 448. — An act relating to courts, oSLcera of justice and civil proceedings. Ii. 1880, ch. 178k — ^An act supplemental to the Code of Civil Pro- cedure. § 432. Id. ; upon a foreign corporation.— Personal service of the summons, upon a defendant, being a foreign corporation, must be made by delivering a copy thereof, within the state, as follows : 1. To the president, vice-president, treasurer, assistant-treasurer, secretary, or assistant-secretary ; or, if the corporation lacks either of those officers, to the officer performing corresponding functions, under another name. 2. To a person designated for the purpose by a writing, under the seal of the corporation, and the signature of its president, vice- president, or other acting head, accompanied with the written con- sent of the person designated, and filed in the office of the secretary of state. The designation must specify a place, within the state, as the office or residence of the person designated; and,, if it is within, the city, the street, and street number, if any, or other suit- able designation of the particular locality. It remains in force, until the filing in the same office of a written' revocation thereof, or of the consent, executed in like manner ; but the person designated may, from time to time, change the place specified as his office or residence, to some other place within the state, by a writing, exe- cuted by him, and filed in like manner. The secretary of state may require the execution of any instrument, specified in this sec- tion, to be authenticated as he deems proper, and he may refuse to file it without such an authentication. An exemplified copy of a designation so filed, accompanied with a certificate that it has not been revoked, is presumptive evidence of the execution thereof, and conclusive evidence of the authority of the officer executing it. 3. If such a designation is not in force, or if neither the person designated, nor an ofiicer specified in subdivision first of this sec- Appendix. 465 The Code of Civil Procedure. tion, can be found with due diligence, and the corporation has prop- erty within the state, or the cause of action arose therein; to the cashier, a director, or a managing agent of the corporation, within the state. {Thus amended by L. 1903, ch. 311.) § 438. Cases in which service of summons by pubUcation, etc., may be ordered. — An order, directing the service of a summons upon a defendant, without the state, or by publication, may be made in either of the following cases : 1. Where the defendant to be served is a foreign corporation; or, being a natural person, is not a resident of the state ; or where, after diligent inquiry, the defendant remains unknown to the plain- tiff, or the plaintiff is unable to ascertain whether the defendant is or is not a resident of the state. 2. Where the defendant, being a resident of the state, has de- parted therefrom, with intent to defraud his creditors, or to avoid the service of a summons ; or keeps himself concealed therein, with like intent. 3. Where the defendant, being an adult, and a resident of the state, has been continuously without the state of New York more than six months next before the granting of the order, and has not made a designation of a person, upon whom to serve a summons in his behalf, as prescribed in section four hundred and thirty of this act ; or a designation so made no longer remains in force ; or ser- vice upon the person so designated cannot be made within the state, after diligent effort. 4. Where the complaint demands judgment annulling a mar- riage, or for a divorce, or a separation. 5. Where the complaint demands judgment, that the defendant be excluded from a vested or contingent interest in, or lien upon, specific real or personal property within the state; or that such an interest or lien in favor of either party be enforced, regulated, de- fined or limited ; or otherwise affecting the title to such property. 6. Where the defendant is a resident of the state, or a domestic corporation; and an attempt was made to commence the action 30 466 Appendix. The Code of Civil Procedure. against the defendant, as required in chapter fourth of this act, be- fore the expiration of the limitation applicable thereto, as fixed in that chapter ; and the limitation would have expired, within sixty days next preceding the application, if the time had not been ex- tended by the attempt to commence the action. 7. Where the action is against the stockholders of a corporation, or joint-stock company, and is authorized by a law of the state, and the defendant is a stockholder thereof. When a copy of the summons is required by subdivision first or subdivision second of section four hundred and twenty-six of this act, or by section four hundred and twenty-nine of this act, to be delivered to a person other than the defendant, an order, directing the service of a copy of the summons upon suchiperson without the state, or by publication, may be made as prescribed in this section, as if such person was the defendant in the action, and upon a veri- fied complaint and the same proof with respect to such person, aa is required in the next succeeding section with respect to a defend- ant. And sections four hundred and forty to four hundred and forty-four, both inclusive, apply to the proceedings in like manner as if such person was a defendant. (Thus amended hy L. 1899, ch. 301.) § 439. Papers upon which order for publication may be made. — The order must be founded upon a verified complaint, showing a sufficient cause of action against the defendant to be served, and proof by affidavit of the additional facts required by the last sec- tion ; and also, where the application is made upon the ground that the defendant is a foreign corporation, or not a resident of the state, or in a case specified in subdivision fourth, fifth or seventh of the last section, that the plaintiff has been or will be unable, with due diligence, to make personal service of the summons. {Thus amended hy L. 1879, ch. 542.) § 635. In what actions. — A warrant of attachment against the property of one or more defendants in an action, may be granted Appendix. 467 The Code of Civil Procedure. upon the application of the plaintiff, as specified in the next section where the action is to recover a sum of money only, as damages for one or more of the following causes : 1. Breach of contract, express or implied, other than a contract to marry. 2. Wrongful conversion of personal property. 3. An injury to person or property, in consequence of neg- ligence, fraud or other wrongful act. {Thus amended, hy L. 1895, ch. 578.) § 636. What must be shown to procure the warrant. — To en- title the plaintiff to such a warrant, he must show, by aflSdavit, to the satisfaction of the judge granting the same as follows : 1. That one of the causes of action specified in the last section exists against the defendant. If the action is to recover damages for breach of contract, the affidavit must show that the plaintiff is entitled to recover a sum stated the^rein, over and above all coun- terclaims known to him. 2. That the defendant is either a foreign corporation or not a resident of the state ; or, if he is a natural person and a resident of the state, that he has departed therefrom, with intent to defraud his creditors, or to avoid the service of a summons, or keeps himself concealed therein with the like intent; or, if the defendant is a natural person or a domestic corporation, that he or it has removed^ or is about to remove property from the state, with intent to de- fraud his or its creditors ; or has assigned, disposed of or secreted, or is about to assign-, dispose of or secrete property with the like in- tent, or, where, for the purpose of procuring credit, or the exten- sion of credit, the defendant has made a false statement in writing, under his own hand or signature, or under the hand or signature • of a duly authorized agent, made with his knowledge and acqui- escence as to his financial responsibility or standing; or, where the defendant being an adult and a resident of the state, has been con- tinuously without the state of New York for more than six months next before the granting of the order of publication of the summons 468 Ajpenmx. The Code of Civil Procedure. against him, and has not made a designation of a person upon whom to serve a summons in his behalf, as prescribed in section four hundred and thirty of this act; or a designation so made no longer remains in force ; or service upon the person so designated can not be made within the state, after diligent effort. (Thus amended by L. 1899, ch. 598.) § 638. When and by whom the warrant may be granted. — The warrant may be granted by a judge of the court, or by any county judge to accompany the summons, or at any time after the commencement of the action, and before final judgment therein. Personal service of the summons must be made upon the defendant, against whose property the warrant is granted, within thirty days after the granting thereof; or, else, before the expiration of the same time, service of the summons by publication must be com- menced, or service thereof must be made without the state, pursu- ant to an order obtained therefor, as prescribed in this act; and if publication has been, or is thereafter commenced, the service must be made complete, by the continuance thereof. § 646. Attachment of unpaid subscription to foreign corpora- tion.^ — Under a warrant of attachment against a foreign corpora- tion, other than a corporation created by or under the laws of the United States, the sheriff may levy upon the sum remaining unpaid upon a subscription to the capital stock of the corporation, made by a person within the county; or upon one or more shares of stock therein, held by such a person, or transferred by him for the pur- pose of avoiding payment thereof. § 6i7. Id. ; interest in corporation. — The rights or shares which the defendant has in the stock of an association or corporation, to- gether with the interests and profits thereon, may be levied upon ; and the sheriff's certificate of the sale thereof entitles the purchaser to the same rights and privileges, with respect thereto, which the defendant had, when they were so attached. Appendix. 469 The Code of Civil Procedure. § 648. Id. ; bond, note, etc. — The attachment may also be levied upon a cause of action arising upon contract; including a bond, promissory note, or other instrument for the payment of money only, negotiable or otherwise, whether past due, or yet to become due, executed by a foreign or domestic government, state, county, public officer, association, municipal or other corporation, or by a private person, either within or without the state, which belongs to the defendant, and is found within the county. The levy of the attachment thereupon is deemed a levy upon, and a seizure and at- tachment of, the debt represented thereby. § 839. Admission by member of corporation. — The admission of a member of an aggregate corporation, who is not a party, shall not be received as evidence against the corporation, unless it was made concerning and while engaged in a transaction in which he was the authorized agent of the corporation; or unless it was made while a member of such corporation and testifying as a witness concern- ing a transaction of the corporation, when the official record of such testimony shall be received. (Thus amended hy L. 1903, ch. 384.) § 929. Book of foreign corporation; when evidence. — ^Where a party wishes to prove an act or transaction of a foreign corpora- tion, the book or books of the corporation may be used for that pur- pose, as presumptive evidence, whether any or all of the parties are or are not members of the corporation. 8 930. When a copy thereof is evidence. — If an original book is not produced at the trial, as prescribed in the last section, a copy thereof, or of an entry therein, verified as prescribed in the next section, may be used, with like effect as the original book ; provided that the party, intending to use the copy, gives the adverse party at least ten days' notice of his intention, specifying briefly the nature of the evidence proposed to be given. But this and the next section do not apply, where the foreign corporation is a party to the action, and seeks to prove its own act or transaction, in its own behalf. 470 Appendix. The Code of Civil Procedure. ' § 931. How copy to be verified. — The copy must be verified by the deposition, taken as prescribed by law, or the oral testimony, taken at the trial, of the person who made it, or of a person who has examined and compared it with the original book, or the entry therein. The witness must testify that the copy produced is cor- rect ; that he made it, or compared it with the original ; and that he then knew that the original book so copied, or containing the entry, was the book of the corporation; or that it was then ac- knowledged to him to be such, by an officer or receiver of the cor- poration, or a person having the custody thereof, naming the per- son who made the acknowledgment; and he must specify where; and in whose custody, the original was fhen kept. § 1775. Complaint in actions by or against corporations. — In an action brought by or against a corporation, the complaint must aver that the plaintiff, or the defendant, as the case may be, is a corporation ; must state whether it is a domestic corporation or a foreign corporation ; and, if the latter, the state, country, or gov- ernment, by or under whose laws' it was created. But the plain- tiff need not set forth, or specially refer to, any act or proceeding, by or under which the corporation was created. § 1776. When proof of corporate existence unnecessary. — In an action, brought by or against a corporation, the plaintiff need not prove, upon the trial, the existence of the corporation, unless tlie answer is verified, and contains an affirmative allegation that the plaintiff, or the defendant, as the case may be, is not a corporation. § 1777. Misnomer, when waived.— In an action or special pro- ceeding, brought by or against a corporation, the defendant is deemed to have waived any mistake in the statement of the corpo- rate name, unless the misnomer is pleaded in the answer, or other pleading in the defendant's behalf. Appenbix. 471 The Code of Civil Procedure. § 1778. Action against a corporation upon a note, etc. — In an action against a foreign or domestic corporation, to recover damages for the non-payment of a promissory note, or other evi- dence of debt, for the absolute payment of money, upon demand, or at a particular time, an order, extending the time to answer or demur, shall not be granted, except by the court, upon notice to the plaintiff's attorney. In such an action, unless the defendant serves, with a copy of his answer or demurrer, a copy of an order of a judge, directing that the issues presented by the pleadings be tried, the plaintiff may take judgment, as in qase of default in pleading, at the expiration of twenty days after service of a copy of the com- plaint, either personally with the summons, or upon the defendant's attorney, pursuant to his demand therefor ; or, if the service of the •summons was otherwise than personal, at the expiration of twenty days after the service is complete. § 1779. When foreign corporation may sue. — An action may be maintained by a foreign corporation, in like manner, and sub- ject to the same regulations, as where the action is brought by a domestic corporation, except as otherwise specially prescribed by law. But a foreign corporation cannot maintain an action, founded upon an act, or upon a liability or obligation, express or implied, arising out of, or made and entered into in consideration of an act, which the laws of the state forbid a corporation or asso- ciation of individuals to do, without express authority of law. This section does not affect, the validity of a meeting of the stockholders or directors of a foreign corporation, held within the state, where such a meeting is authorized by the laws of the state, country, or government, by or under which the corporation is created ; or of an act, done at such a meeting, which is not in conflict with the same laws, or the laws of the state. S 1780. When foreign corporation may be sued. — An action, against a foreign corporation may be maintained by a resident of the state or by a domestic corporation, for any cause of action. 472 Appendix. The Code of Civil Procedure. An action against a foreign corporation may be maintained by another foreign corporation, or by a non-resident, in one of the fol- lowing cases only : 1. Where the action is brought to recover damages for the breach of a contract, made within the state, or relating to property situ- ated within the state, at the time of the making thereof. 2. Where it is brought to recover real property situated within the state, or a chattel, which is replevied within the state. 3. Where the cause of action arose within the state, except where the object of the action is to affect the title to real property situ- ated without the state. § 1781. Action against directors, etc., of a corporation for mis- conduct. — An action may be maintained against one or more trus- tees, directors, managers, or other officers of a corporation, to prO' cure a judgment for the following purposes, or so much thereof as the case requires: 1. Compelling the defendants to account for their official con- duct, in the management and disposition of the funds and prop- erty, committed to their charge. 2. Compelling them to pay to the corporation, which they rep- resent, or to its creditors, any money, and the value of any prop- erty, which they have acquired to themselves, or transferred to others, or lost, or wasted, by a violation of their duties. 3. Suspending a defendant from exercising his office, where it appears that he has abused his trust. 4. Eemoving a defendant from his office, upon proof or convic- tion of misconduct, and directing a new election to be held by the body or board, duly authorized to hold the same, in order to supply the vacancy created by the removal; or, where there is no such body or board, or where all the members thereof are removed, di- recting the removal to be reported to the governor, who may, with the advice and consent of the senate, fill the vacancies. 5. Setting aside an alienation of property, made by one or mors triistees, directors, managers, or other officers of a corporation, con- Appendix. " 4Y3 The Code of Civil Procedure. trary to a provision of law, or for a purpose foreign to the lawful business and objects of the corporation, where the alienee knew the purpose of the alienation. 6. Restraining and preventing such an alienation, where it is threatened, or where there is good reason to apprehend that it will be made. § 1Y82. By whom action to be brought. — An action may be brought, as prescribed in the last section, by the attorney-general in behalf of the people of the state ; or, except where the action is brought for the purpose specified in subdivision third or fourth of that section, by a creditor of the corporation, or by a trustee, di- rector, manager, or other officer of the corporation, having a gen- eral superintendence of its concerns. § 1783. This article, how construed. — This article does not divest or impair any visitorial power over a corporation, which is vested by statute in a corporate body, or a public officer. § 1805. Officers and agents may be compelled to testify. — In an action, brought as prescribed in article second, third, or fourth of this title, a stockholder, officer, alienee, or agent of a cor- poration, is not excused from answering a question, relating to the management of the corporation, or the transfer or disposition of its property, on the ground that his answer may expose the corpo- ration to a forfeiture of any of its corporate rights, or will tend to convict him of a criminal offence, or to subject him to a penalty or forfeiture. But his testimony shall not be used, as evidence against him, in a criminal action or special proceeding. § 1806. Injunction staying actions by creditors. — In such ani action, the court may, in its discretion, on the application of either party, at any stage of the action, before or after final judgment, and with or without security, grant an injunction order, restrain- ing the creditors of the corporation from bringing actions against 474 Appendix. • — . ^ The Code of Civil Procedure. # the defendants, or any of them, for the recovery of a sum of money, or from taking any further proceedings in such actions, thereto- fore commenced. Such an injunction has the same effect, and, except as otherwise expressly prescribed in this section, is subject to the same provisions of law, as if each creditor, upon whom it is served, was named therein, and was a party to the action in which it is granted. § 1807. Creditors may be brought in. — In such an action the court may, at any stage of the action, before or after final judg- ment, make an order requiring all the creditors of the corporation to exhibit and prove their claims, and thereby make themselves parties to the action, in such a manner and in such a reasonable time, not less than six months from the first publication of notice of the order as the court directs ; and that the creditors who make default in so doing shall be precluded from all benefit of the judg- ment and from any distribution which may be made thereunder, except as hereinafter provided. Notice of the order must be given, by publication, in such newspapers and for such a length of time as the court directs. ISTotwithstanding such order any such creditor who shall exhibit and prove his claim in the manner directed thereby, with proof, by affidavit or otherwise, that he has had no notice or knowledge thereof in time to comply therewith, any time before an order is made directing a final distribution of the assets of such corporation, shall be entitled to have his claim received, and shall have the same rights and benefits thereon, so far as the assets of such corporation then remaining undistributed may ren- der possible, as if his claim had been exhibited and proved within the time limited by such order. {Thus amended, by L. 1886, ch. 372.) § 1808. When attorney-general must bring action. — ^Where the attorney-general has good reason to believe, that an action can be maintained in behalf of the people of the state, as prescribed in article second, third, or fourth of this title, except section one thou- Appendix. 4Y5 The Code of Civil Procedure. sand seven hundred and ninety-seven of this act, he must bring an action accordingly, or apply to a competent court for leave to bring an action, as the case requires ; if, in his opinion, the public in- terests require that an action should be brought. In a case vs^here the action can be brought only by the attorney-general in behalf of the people, if a creditor, stockholder, director, or trustee of the cor- poration, applies to the attorney-general for that purpose, and fur- nishes the security required by law, the attorney-general must bring the action, or apply for leave to bring it, if he has good rea- son to believe that it can be maintained. Where such an applica- tion is made, section one thousand nine hundred and eighty-six of this act applies thereto, and to the action brought in pursuance thereof. § 1809. Requisites of injunction against corporations in cer- tain cases. — An injunction order, suspending the general and ordi- nary business of a corporation, or of ,a joint-stock association, con- sisting of seven or more persons, or suspending from office, or re- straining from the performance of his duties, a trustee, director, or other officer thereof, can be granted only by the court, upon notice of the application therefor, to the proper officer of the cor- poration or association, or to the trustee, director, or other officer enjoined. If such an injunction order is made, otherwise than as prescribed in this section, it is void. § 1810. Id. ; of order appointing a receiver in certain cases. — A receiver of the property of a corporation can be appointed only by the court, and in one of the following cases : 1. An action, brought as prescribed in article second, third, or fourth of this title. 2. An action brought for the foreclosure of a mortgage upon the property, of which the receiver is appointed, where the mortgage debt, or the interest thereupon, has remained unpaid, at least thirty days after it was payable, and after payment thereof was duly demanded of the proper officer of the corporation and where either 476 Appei^dix. The Code of Civil Procedure. the income of the property is specifically mortgaged, or the prop- erty itself is probably insufficient to pay the mortgage debt. 3. An action brought by the attorney-general, or by a stock- holder, to preserve the assets of a corporation, having no officer empowered to hold the same. 4. A special proceeding for the voluntary dissolution of a cor- poration. 5. Upon the application of the regents of the university, in aid of the liquidation of a corporation whose dissolution they contem- plate or have decreed; or upon the application of the trustees of such a corporation, with notice to the regents. Where the receiver is appointed in an action, otherwise than by or pursuant to a final judgment, notice of the application for his appointment, must be given to the proper officer of the corporation. {Thus amended by L. 1903, ch. 290.) § 1811. Id.; of judicial suspension or removal of an officer. — A trustee, director, or other officer of a corporation shall not be suspended or removed from office, by a court or judge, otherwise than by the final judgment of a competent court, in an action brought by the attorney-general, as prescribed in section one thou- sand seven hundred and eighty-one of this act. § 1812. Application of the last three sections. — The last three sections apply to an action or a special proceeding, against a corpo- ration, or joint-stock association, created by or under the laws of the state, or a trustee, director, or other officer thereof; or against a corporation, or joint-stock association created by or under the laws of another state, government, or country, or a trustee, director, or other officer thereof, where the corporation or association does business within the state, or has, within the state, a business agency or a fiscal agency, or an agency for the transfer of its stock. § 1813. In action against stockholders, misnomer, etc., not available — ^Where an action, authorized by a law of the state, is Appendix. 477 The Code of Civil Procedure. brought against one or more persons, as stockholders of a corpora- tion or joint-stock association, an objection to any of the proceed- ings cannot be taken, by a person properly made a defendant in the action, on the ground that the plaintiff has joined with him, as a defendant in the action, a person, whose name appears on the stock books of the corporation or association, as a stockholder thereof, by the name so appearing; but who is misnamed, or dead, or is not liable for any cause. In such a case, the court may, at any time before final judgndent, upon motion of either party, amend the pleadings and other papers, without prejudice to the previous pro- ceedings, by substituting the true name of the person intended, or by striking out the name of the person who is dead, or not liable, and, in a proper case, inserting the name of his representative or successor. § 1948. Attorney-general may maintain action.— "The attorney- general may maintain an action, upon his own information, or upon the complaint of a private person in either of the following cases : 1. Against a person who usurps, intrudes into, or unlawfully holds or exercises, within the state, a franchise, or a public office, civil or military, or an office in a domestic corporation. 2. Against a public officer, civil or military, who has done or suffered an act, which by law works a forfeiture of his office. 3. Against one or more persons who act as a corporation within the state, without being duly incorporated ; or exercise, within the state, any corporate rights, privileges, or franchises, not granted to them by the law of the state. 4. Against a foreign corporation which exercises within the state any corporate rights, privileges or franchises, not granted to it by the law of this state ; or which within the state has violated any provision of law, or, contrary to law, has done or omitted any act, or has exercised a privilege or franchise, not conferred upon it by the law of this state, where, in a similar case, a domestic corpora- tion would, in accordance with section seventeen hundred and 478 Appendix. The Code of Civil Procedure. ninety-eight of this act, be liable to an action to vacate its charter and to annul its existence ; or which exercises within the state any corporate rights, privilege^ or franchises in a manner contrary to the public policy of the state. (Thus amended by L. 1896, ch. 962.) § 1955. When injunction may be granted. — In an action brought as prescribed in subdivision third or fourth of section nine- teen hundred and forty-eight of this act, the final judgment, in favor of the plaintiff, must perpetually restrain the defendant or defendants, from the commission or continuance of the act or acts complained of. A temporary injunction to restrain the commis- sion or continuance thereof, may be granted, upon proof, by affi- davit, that the defendant or defendants have violated any of the provisions of either of the said subdivisions third or fourth of sec- tion nineteen hundred and forty-eight of this act. The provisions of title second of chapter seventh of this act apply to such a tem- porary injunction, and the proceedings thereupon, except where special provision is otherwise made in this title. For that pur- pose, the injunction order is deemed to have been granted as pre- scribed in section six hundred and three of this act. In the trial of an action brought as prescribed in subdivisions third or fourth of section nineteen hundred and forty-eight of this act, a party or a witness is not excused from answering a question on the ground that such answer will tend to incriminate him ; but such answer can not be used as evidence against the person so answering, and in a criminal action or criminal proceeding. (Thus amended hy L. 1896, ch. 963.) § 2120. Cases where writ may issue. — The writ of certiorari regulated in this article, except the writ specified in section two thousand one hundred and twenty-four of this act, is issued to re- view the determination of a body or officer. It can be issued in one of the following cases only : Appendix. 479 The Code of Civil Procedure. 1. Where the right to" the writ is expressly conferred, or the issue thereof is expressly authorized, by a statute. 2. Where the writ may be issued at common law, by a court of general jurisdiction, and the right to the writ, or the power of the court to issue it, is not expressly taken away by a statute. § 2121. Cases where it cannot issue. — A writ of certiorari can- not be issued, to review a determination, made, after this article takes effect, in a civil action or special proceeding, by a court of record, or a judge of a court of record. § 2122. The same.— Except as otherwise expressly prescribed by a statute, a writ of certiorari cannot be issued, in either of the following cases : 1. To review a determination, which does not finally determine the rights of the parties, with respect to the matter to be reviewed. 2. Where the determination can be adequately reviewed, by an appeal to a court, or to some other body or ofiBcer. 3. Where the body or officer, ■ making the determination, is ex- pressly authorized, by statute, to rehear the matter, upon the re- lator's application ; unless the determination io be reviewed was made upon a rehearing, or the time within which the relator can procure a rehearing has elapsed. § 2123. When issued from Supreme Court.— A writ of cer- tiorari can be issued only out of the Supreme Court, except in a case where another court is expressly authorized by statute to issue it. (Thus amended hy L. 1895, eh. 946.) § 2124. When from another court. — Any court of record, exer- cising jurisdiction of an appellate nature, may issue a writ of cer- tiorari, requiring the body or officer whose proceedings are under review, to make a return to the court issuing the writ, at a time and place, fixed by the court, and designated in the writ, for the purpose of supplying any diminution, variance, or other defect, in the record or other papers, before the court issuing the writ, in any 480 Appendix. The Code of Civil Procedure. case where justice requires that the defect should be supplied, and adequate relief cannot be obtained by means of an order. § 2125. Limitation of time for review. — Subject to the pro- visions of the next section, a writ of certiorari to review a determi- nation must be granted and served, within four calendar months after the determination to be reviewed becomes final and binding, upon the relator, or the person whom he represents, either in law or in fact. § 2126. Id. ; in case of disability. — The Appellate Division of the Supreme Court may grant the writ at any time within twenty months after the expiration of the time limited in the last section, where the relator, or the person whom he represents, was, at the time when the determination to be reviewed became final and bind- ing upon him, either 1. Within the age of twenty-one years ; or, 2. Insane; or, 3. Imprisoned on a criminal charge, or in execution upon con- viction of a criminal offense, for a term less than for life. (Thus amended by L. 1895, ch. 946.) § 2127. Application for writ; when and how made. — An appli- cation for the writ must be made by, or in behalf of, a person ag- grieved by the determination to be reviewed; must be founded upon an affidavit, or a verified petition, which may be accompanied by other written proof ; and must show a proper case for the issu- ing of the writ. It can be granted only at a term of the Appellate Division of the Supreme Court, or at Special Term ; and the grant- ing or refusal thereof is discretionary with the court. (Thus amended by L. 1895, ch. 946.) § 2128. When notice necessary; service thereof. — Until pro- vision is made, in the general rules of practice, for requiring, or dispensing with notice of the application for the writ, the court, to Appendix. 481 The Code of Civil Procedure. "which the application for the writ is made, may, in its discretion, require or dispense with notice. A notice, when it is necessary, must he served, with copies of the papers upon which the applica- tion is to be made, upon the body or oflficer, whose determination is to be reviewed, or upon such other person as the court directs, as prescribed in this article for the service of a writ of certiorari. The -service must be made, at least eight days before the application, unless the court, by an order to show cause, prescribes a shorter time. Where notice is given, the person served may produce affi- davits or other written proofs, upon the merits, in opposition to the application. § 2129. To whom writ directed. — The writ must be directed to the body or officer, whose determination is to be reviewed ; or to any other person having the custody of the record or other papers to be certified ; or to both, if necessary. Where it is brought to review the determination of a board or body, other than a court, if an action would lie against the board or body, in its associate or official name, it must be directed to the board or body, by that name ; otherwise it must be directed to the members thereof, by their names. § 2130. Mode of service. — A writ of certiorari must be served as follows, except where different directions, respecting the mode of service thereof, are given by the court granting it: 1. Where it is directed to a person or persons by name, or by his or their official title or titles, or to a municipal corporation, it must be served, upon each officer or other person, or to whom it is so di- rected, or upon the corporation, in the same manner as a summons in an action brought in the Supreme Court, except as prescribed in the next two subdivisions of this section. 2. Where it is directed to a court, or to the judges of a court, having a clerk appointed pursuant to law, service upon the court, or the judges thereof, may be made by filing the writ with the clerk. 31 482 Appendix. The Code of Civil Procedure. 3. Where it is to be served upon any other board or body, or upon the members thereof, it may be served as prescribed in section, two thousand and seventy-one of this act, for service, upon a like board or body, of an alternative writ of mandamus. § 2131. Stay of proceedings.— Except as prescribed in this section, a writ of certiorari does not stay the execution of the de- termination to be reviewed, or affect the power of the body or of- ficer, to which or to whom it is addressed. The court, which grants the writ, may, in its discretion, and upon such terms, as to security or otherwise, as justice requires, direct, by a clause in the writ, or by a separate order, that the execution of the determination be stayed pending the certiorari, and until the further direction of the court. A bond, undertaking, or other security, given to pro- cure such a stay, is valid and effectual, according to its terms, in favor of a person beneficially interested in upholding the determi- nation to be reviewed, who is admitted as a party to the special pro- ceeding, as prescribed in section two thousand one hundred and thirty-seven of this act. § 2132. When and where writ returnable. — A writ of cer- tiorari must be made returnable, within twenty days after the ser- vice thereof, at the ofiice of the clerk of the court. If it was issued from the Supreme Court, it must be made returnable at the office of the clerk of the county, designated therein, wherein the determi- nation to be reviewed was made ; and if the county, designated in the writ, is not the proper county, the court, upon motion, may amend the writ accordingly. Thereupon all papers on file must be transferred to the clerk of the county, where the writ is made returnable by the amendment. § 2133. Subsequent proceedings as in an action. — After a writ of certiorari has been issued, the time to make a return thereto may be enlarged, or any other order may be made, or proceeding taken, in the cause, in relation to any matter not provided for in this Appendix. 483 The Code of Civil Procedure. article, as a similar proceeding may be taken in an action, brought in the same court, and triable in the county where the writ is re- turnable. § 2134. Return; when and how made.— The clerk with whom a writ of certiorari is filed, and each person, upon whom a writ of certiorari is served, as prescribed in section two thousand one hun- dred and thirty of this act, must make and annex to the writ, or to the copy thereof served upon him, a return, with the transcript annexed, and certified by him, of the record or proceedings, and a statement of the other matters, specified in and required by the writ. . The return must be filed in the oiEce where the writ is re- turnable, according to the command thereof. § 2135- Id.; how compelled; fees for making. — If a return is defective, the court may direct a further return. An omission to make a return, as required by a writ of certiorari, or by an order for a further return, may be punished, as a contempt of the court. But a judge or clerk shall not be thus punished, unless the relator, before the time when the return is required, pays him, for his re- turn, the sum of two dollars, and, in addition, ten cents for eacb folio of the copies of papers required to be returned. § 2136. Id.; after term of office expired. — A writ of certiorari may be issued to, and a return to a writ of certiorari may be made by, an officer, whose term of office has expired. Such an officer may be punished for a failure to make a return to the writ, as re- quired thereby; or to make a further return, as required by an order for that purpose. § 2137. When third person may be brought in. — Upon the ap- plication of a person, specially and beneficially interested in up- holding the determination to be reviewed, the court may, in its dis- cretion, admit him as a party defendant in the special proceedings, upon such terms as justice requires. And a term of the Appellate 484 Appendix. The Code of Civil Procedure. Division of the Supreme Court, at which the cause is noticed for hearing, and is placed upon the calendar, may, in a proper ease, direct that notice of the pendency of the special proceeding he given to any person, in such a manner as it thinks proper, and. may sus- pend the hearing until notice is given accordingly. (Thus amended ly L. 1895, ch. 946.) § 2138. Hearing upon return.^ The cause must be heard at a term of the Appellate Division of the Supreme Court, held within the judicial department, embracing the county where the writ was returnable. Either party may notice it for hearing, at any time after the return is complete. Except as prescribed in the next sec- tion, it must be heard upon the writ and return, and the papers upon which the writ was granted. (Thus amended by L. 1895, ch. 946.) § 2139. Id.; upon affidavits.-^ If the officer or other person, whose duty it is to make a return, dies, absconds, removes from the state, or becomes insane, after the writ is issued, and before making a return, or after making an insufficient return ; and it appears that there is no other officer or person, from whom a sufficient re- turn can be procured by means of a new certiorari ; the court may, in its discretion, permit affidavits, or other written proofs, relating to the matters not sufficiently returned, to be produced, and may hear the cause accordingly. The court may also, in its discretion, permit either party to produce affidavits, or other written proofs, relating to any alleged error of fact, or any other question of fact, which is essential to the jurisdiction of the body or officer, to make the determination to be reviewed, where the facts, in relation there- to, are not sufficiently stated in the return, and the court is satisfied that they cannot be made to appear, by means of an order for a further return. § 2140. Questions to be determined. — The questions, involv- ing the merits, to be determined by the court upon the hearing, are the following only : Appendix. 485 The Code of Civil Procedure. 1. Whether the body or ofHeer had jurisdiction of the subject- matter of the determination under review. 2. Whether the authority, conferred upon the body or officer, in relation to that subject-matter, has been pursued in the mode re- quired by law, in order to authorize it or him to make the determi- nation. 3. Whether, in making the determination, any rule of law, af- fecting the .rights of the parties thereto, has been violated, to the prejudice of the relator. 4. Whether there was any competent proof of all the facts, neces- sary to be proved, in order to authorize the making of the determi- nation. 6. If there was such proof, whether there was, upon all the evi- dence, such a preponderance of proof, against the existence of any of those facts, that the verdict of a jury, affirming the existence thereof, rendered in an action in the Supreme Court, triable by a jury, would be set aside by the court, as against the weight of evi- dence. § 2141. Final order upon the hearing. — The court upon the hearing, may make a final order, annulling or confirming, wholly or partly, or modifying, the determination reviewed, as to any or all of the parties. S 2142. Restitution may be awarded. — Where the determina- tion reviewed is annulled or modified, the court may order and en- force restitution, in like manner, with like effect and subject to the same conditions, as where a judgment is reversed upon appeal. § 2143. Costs.— Costs, not exceeding fifty dollars and dis- bursements, may be awarded by the final order, in favor of or against either party, in the discretion of the court. 8 2144. Entry and enrollment of final order. — The final order of the court upon the certiorari must be entered in the office of the 486 Appendix. The Code of Civil Procedure. clerk where the writ was returnable. But before it can be en- forced, an enrollment thereof must be filed. For that purpose, the clerk must attach together, and file in his office, the papers upon which the cause was heard, a certified copy of the final order ; and a certified copy of each order, which in any way involves the merits, or necessarily affects the final order. § 2145. Effect thereof.— The filing of the enrollment in the office of the clerk where the final order is entered, as prescribed in the last section, is a sufficient authority for any proceeding, by or before the body which, or the officer who, made the determination reviewed, which the final order of the court directs or permits. But where the execution of the final order is stayed by an appeal to the Court of Appeals, the proceedings below are stayed in like manner. § 2146. " Body or officer ;" " determination ;" what they in- clude — The expression, " body or officer," as used in this article, includes every court, tribunal, board, corporation, or other person, or aggregation of persons, whose determination may be reviewed by a writ of certiorari, and the word, " determination," as used in this article, includes every judgment, order, decision, adjudication, or other act of such a body or officer, which is subject to be so re- viewed. § 2147. Application of this article to certain special cases. — Where the right to a writ of certiorari is expressly conferred, or the issuing thereof is expresslj' authorized, by a statute, passed before, and remaining in force after, this article takes effect, this article does not vary, or affect in any manner, any provision of the former statute, which expressly prescribes a different regulation, with re- spect to any of the proceedings upon the certiorari to be issued thereunder. § 2148. Id.; to civil cases only.— This article is not applicable to a writ of certiorari, brought to review a determination made in any criminal matter, except a criminal contempt of court. IISTDEX. Page Abatement of action , 307 Acknowledgment of deed or instrument 236 Action : by a, foreign corporation — power to sue 245 assigned claim 246 after appointment of receiver 368 by delinquent corporation prohibited 46-49 against a foreign corporation — by a resident 247 by a resident in the federal court 338 assigned claim 249 resident executor 249 change of residence 249 proof of residence 249 by a non-resident , 251 constitutionality of section 1780, code civil procedure 253 contracts made here 256 cause of action arising here 257 laches 260 title to foreign real property 260 against alien corporation in federal court 340 affirmative defence 261 after appointment of receiver 370 after dissolution 300 by receiver appointed in home state 368 against receiver appointed in home state 370 cause of action arising here 257 in name of real party in interest 300 in aid of attachment 327 to annul act of incorporation or to vacate charter 35Si against directors or officers for misfeasance 354 to dissolve corporation 358 on note or evidence of debt 346 for a penalty • 340 for personal liability of stockholders, limitation of 314 to recover back general tax 100 to recover franchise tax or to annul franchise 135 to restrain usurping of a, franchise 359 for sequestration 357 by another foreign corporation in federal court 338 488 Index. Page. Acts, enjoining illegal 3G3 Acts prohibited 10!) Additional liability: See Stockholdeks. Admiralty: attachment in 317 service of process in 266 AiBdavit: crime to make false 183 for attachment of property 317 of service of summons 290 idem in federal court 262. AflBrmative defence: compliance with conditions of doing business 49 compliance with section 1780, code civil procedure 261 Agent : doing business in New York by 19-21, 27 service of process on managing 275-280 motion to set aside service on managing 290 designation of, to receive service of process 33, 269 idem, out of New York 273 power of, to contract 231 crime to receive corporate assets illegally 181 crime to omit to make entries in books 182 crime to publish false report, exhibit or statement 182 crime to make false entries in books 182 crime to omit to make entry in stock book 182 crime to omit to exhibit stock book 182 crime to omit to disclose service of injunction 182 crime to omit to make prescribed public report 182 Alien corporation: action against in federal court 261 holding real property 236 Allegation of incorporation: in state court 295 in municipal court 332 in federal court 296 sufficient allegation 290 pleading nul tiel corporation 297 proving incorporation 4, 298, 38i> Ancillary receiver 378 Annual report: under statutes of New York 210 under statutes of the home state ' 211 liability for false 213 crime to make false 182 Index. 489 Page. Anti-monopQly, statutes • 178 Appeal : to appellate division in general tax proceeding 97 to court of appeals in general tax proceeding 97 to court of appeals in franchise tax proceeding 131 Appearance, effect of, on jurisdiction of the person 268 Appellate division: appeal to, in general tax proceeding 97 hearing at, in franchise tax proceeding 131 Application to assessors to review general tax 74-79 second application 80 Assessment : for franchise tax 121 for general tax 56-60,' 80 . on stockholders 190-195 Assessors for general tax: application to, to review tax 74-79 second application 80 may change, remit or reduce tax 80 failure to make statement to 76 Asset : crime for officer, etc., to receive illegally 181 diverted to stockholders 187 diverted to promoters 189 local liens on, in receivership proceeding 379 transfer of 166-168 turning over, to receiver 378 Assigned claim, action on: in federal court ^^^ by foreign corporation 246 against foreign corporation 249 Assignee : of delinquent corporation, prohibited to sue 48 suit by in federal court 335 Assignment of chose m action Assignment, general or insolvent: See Insolvent Tkansfeb, Attachment of property : statutes of New York ° in city court of city of New York ^^^ admiralty affidavit for attachment • effect of section 1780, code civil procedure ^l ' effect of section 15, general corporation law rf-o effect of section 181, tax law _^-^ levy of attachment '^^^ levy of upon subscription to stock 490 Index. Attachment of property — (continued): Page. attachment against property of a third party 323 of stock 150 effect of assignment for creditors 324 effect of receivership 324 effect of general tax 320 motion to vacate attachment 320 defeating attachment 320 action in aid of attachment 327 attachment as ground for receivership 329 restraining attachment in another state 329 Attorney-general, notice to 3T0 Bank account: liability of, for general tax 62 assessable for franchise tax 124 Banking law, text of 398 Banking powers prohibited 169 Bequest : validity of 238 subject to transfer tax , 139 Bill of lading, crime to omit to take up 183 Bill of particulars 305 Bills receivable, liability of, for general tax 67 Bonds: liability of, for general tax 67 liability of, for franchise tax 119, 124 not limited in amount 208 legacy of, liable for transfer tax 139 mortgage bonds 242 crime to issue illegal, fraudulent or fictitious 180 crime to forge 183 crime to issue a false 184 Bonus to bonds, stock as 153 Book: of account 147 as evidence 305 discovery of 300 must exhibit stock book 161 crime to omit to make entries in 182 crime to forge or alter an entry in 184 crime to destroy 184 crime to make false entry in 182 crime to omit to exhibit stock book 182 Breach of contract, enjoining 363 Brokers, doing business in New York by 27 Index 491 Burden of proof: Page. in general tax proceeding , 77, 86 in franchise tax proceeding 122 on manufacturing corporation 106 on revision of franchise tax 128 Calendar, preference on court 305 Calls, liability of stockholder for 190-195 Canvassers, contracts by, are not doing business 26 Capital stock: See Stock. Cashier, service of process on 275 Cause of action arising in New York 257 Certificate : of capital stock 149 replacing lost 150 liability for false 213 crime to issue illegal, fraudulent or fictitious 180 crime to forge 183 crime to issue a false 184 See Certificate to do Business. Certificate to do business: is a eondit'ion of doing business 30 is not doing business , 18 effect of procuring 40 eflfect of omitting to procure 42-49 pleading omission to procure .• 311 See Certificate. Certiorari : to review franchise tax 128 the writ ^ 129 the return 130 to review general tax 81 petition for 87 the writ 90 the return 90 second certiorari 87 Charter : must file copy of 33 stockholder bound by 151 party dealing with corporation, bound by 228 stock subject to 151 doing business must be charter purpose 15 repeal of 360 action to vacate 358 of the city of New York 438 Chattels assessable for general tax 62 492 Index. Chose in action: Page. assignment of 223 assessable for general. tax,. 62 City of New York: text of charter of 43S grievance day for general tax 75 city court 330 municipal court 331 City court of the city of New York 330 Code of civil procedure: text of 40-1 service of process under 2(i5 service of process under the old code 2(i 1 receiver under 37.) constitutionality of section 1810 373 section 1780 — constitutionality of 253 action by a foreign corporation 2-15 action against a foreign corporation 247 as a- defence ; 311 as a defence in municipal court 331 effect of, on attachment 31!) effect of, on injunction 301 effect of, on receivership 377 Code of criminal procedure, text of 445 Code, penal, text of 448 Collecting franchise tax I35 Comity : may contract in New York 7 may aue and be sued in New York 7 federal limitations on comity 8 Commercial paper: taking, is not doing business 22 negotiated by delinquent corporation 177 action on, in New York " 34(5 , enjoining action on, in foreign state 3B5 Commercial travelers, contracts by, are not doing business '...... 26 Commissioners may remit or reduce general tax 80 Commission merchants, contracts by, are not doing business 27 Common law: prerequisites are in derogation of 38 service of process 204 remedy to enforce stockholders' liability I97 Comptroller: investigation of franchise tax by 107 revision of franchise tax by 127 notice to, of transfer of decedent's stock ; 140 Index. 493 Conditions of doing business: Page. certificate of authority i. 30 monied corporations excepted 31 lawful purpose 33 copy charter 33 agent to receive process 33 license tax 30, 34 other taxation 34 removal of causes to federal court 37 statutes are in derogation of the common law 38 constitutionality 38 vested rights 38 effect of obtaining certificate and paying tax 40 effect of omitting to obtain certificate and to pay tax , 42 contracts, valid, void or voidable 44 cannot recover in court 46 suit by assignee 48 suit in federal court 49 pleading compliance with statutory requirements 49 Consolidation : liability for debts after 5 effect of, on contracts '. 233 effect of, on stockholders' liability 204 Constitution : stock subject to 151 Constitutionality : of statutes prescribing conditions 38 of general tax 53 of franchise tax 102 of remission of general tax 81 of section 432, code civil procedure 271 of section 1810, code civil procedure 373 of section 1780, code civil procedure 253 Construction of prohibitory statutes 171 Contracts : corporate power 225 pleading corporate power 312 ultra vires 226 other party chargeable with notice 228 lex loci 229 contracts made in New York 230, 256 by mail and telegraph 25 power of officers and agents 231 effect of consolidation 233 contract for preference 233 rescission of contract 233 by delinquent corporation 44-49 enjoining breach of contract 363 holding real property by contract 235 494 Index. Page. Contractor, when not doing business i 22 Copyrights : exempt from general tax 68 assessable for franchise tax 124 Corporation, foreign: defined 1 of two states 2 of two states in federal court 341 de facto 4 migratory . . , 4 pretended 4 defunct 4 residence of incorporators 5 alien, action against » 340 alien holding real property 236 foreign holding real property 234 delinquent holding real property 236 not doing business but holding real property 236 action by 245 action by, after receivership 368 injunction by 365 injunction against 361 action against 247, 251 action against after receivership 370 action against directors or officers of 354 action to dissolve 358 pleading nul tiel corporation 267 power to contract. 225 pleading power to contract 312 monied, not required to procure certificate 31 when exempt from franchise tax 103 report for franchise tax 107 statement for general tax 54 effect of general tax statement 77 taxable, stock of, deducted in general tax 70 Costs : security for 304 in general tax proceeding 96 in franchise tax proceeding 133 Counter claim by delinquent corporation 47 Court : calendar preference 305 allegation of incorporation in state court 295 idem, in municipal court 332 idem, in federal court 296 See CouET or Appeals; Appet.t.ate Division; Fedebal Courts; City Court; Municipal Court; Justices Court. Index. 495 Court of appeals: Page. franchise tax proceeding ". 131 general tax proceeding 97 Creditors, assignment for See Insolvent Transfers. Crimes : to issue a false prospectus 180 to issue illegal, fraudulent or fictitious stock, bonds, evidences of debt or other instruments 180 to exhibit a false document 180 to use an illegal corporate name 180 to make an illegal dividend 181 to reduce or increase capital stock illegally 181 to have corporation purchase its own stock 181 director, officer, agent or employee — - receiving corporate assets illegally. ., 181 omitting to make entries in books 182 publishing false report, exhibit or statement 182 making false entries in books 182 omitting to make entry in stock book 182 omitting to exhibit stock book 182 omitting to disclose service of injunction 182 omitting to make prescribed public report 182 to sell a, vote -182 to issue a proxy for value 182 to act corruptly as inspector 182 to allow an insurance rebate 182 to make a false affidavit 183 to omit to take up a bill of lading 183 to forge certificate of stock, bond or writing 183 to forge a seal 184 to forge an entry in a book of account 184 to alter or destroy a book or writing 184 to issue a false certificate of stock 184 to issue a false bond or evidence of debt 184 not to pay employees in cash, weekly 224 to coerce an employee not to join a labor union 185 to bribe a representative of a labor union 185 to keep a gaming establishment 185 to use trading stamps illegally 185 punishment for crime 185 procedure ^°'^ Criminal procedure 1^^ text of code of *43 496 Index. Debt: Paqb. action on evidence of 346 assessable for general tax 62 deducted in assessing general tax 71 deducting in assessing franchise tax 125 excessive . . , 208 for sale of real property to alien is taxable 67 taking real property for 235 Deed: of real property 235 in trust 236 to delinquent corporation 175, 230 De facto corporation 4 Defeating attachment 326 Defective incorporation 204 Defences : form of defense • 310 usury 311 section 1780, code civil procedure 261, 311 section. 181, tax law 311 non-payment of license tax 311 section 15, general corporation law 311 failure to obtain certificate 311 corporate power to contract 312 statute of limitations of this state 313 limitation of action to enforce liability of stockholder 314 limitation of action for damages for death by negligence 314 limitation of action to recover taxes 314 foreign statute of limitations 316 motion to separate defences 51 Definitions : foreign corporation 1 federal corporation 2 corporation of two states 2 de facto corporation 4 migratory corporation 4 pretended corporation 4 defunct corporation 4 manufacturing corporation 105 monied corporation 32 general tax 52 local tax 52 tax law writ of certiorari 83 franchise tax 102 lawful purpose 33 assignee 49 cause of action 257 cause of action arising in New York 257 iNBliX. 497 Definitions — (continued) : Page. contract made in New York 230, 256 capital subject to franchise tax 114 capital employed in New York ." 117 property owned in New York G2 surplus . . . , 68 seal 147 labor 22* Defunct corporation 4 Demand to exhibit stock book 163 Depositions taken in New York for use elsewhere 349 Designation of agent upon whom to serve process in New Yoi-k 269' idem, out of New York 273 Devise : validity of 238 subject to transfer tax 139 Director : proof of title to office 276 action for misfeasance against 354 service of process on 275 meeting 158 liable for insolvent transfer 215 liable for unauthorized dividend 206 liable for false certificate, report or public notice 213 crime to receive corporate assets illegally 181 crime to omit to make entries in books 182 crime to make false entries in books 182 crime to publish false report, exhibit or statement 182 crime to omit to make entry in stock book 182 crime to omit to exhibit stock book 182 crime to omit to disclose service of injunction 182 crime to omit to make prescribed public report ^ 182 Discovery of books and papers 300 Dissolution : action against a foreign corporation after 300 voluntary 360 by action ; 358 Dividends : New York control of 156 to vote for illegal, is a misdemeanor 181 effect of, on franchise tax '. 109, 114 unauthorized ■ 205 personal liability for 206 Document, crime to exhibit a false 180 7ng business in New York : effect of, on federal court jurisdiction 338, 342 effect of, on service of process 268 New York statutes 10 498 Index. Doing business in New York — (continued) : Page. property interests 12 federal employment 12 interstate commerce . .' 12 charter purpose 1 "> single transaction ]:i certificate to do business her^ IS wareroom 19 storage room 19 sales room 1!) obtaining fire insurance 22 taking promissory note 22 special partnership 22 contractor , 22 trusteeship 22 listing bonds 22 organizing domestic corporation 22 licensing machines to resident 22 locus contractus 23 contracts by mail and telegraph 2o commercial travellers and canvassers 20 commission merchants 27 agents 19-21, 27 factors 27 brokers 27 withdrawal from the state 28 Elections : place 1 58 voting 158 reviewing 158 effect of : 15!) Employed in New York, capital 117 Employee: crime not to pay employee in cash weekly 185 crime to coerce employee not to join a labor union 185 crime to receive corporate assets illegally 181 crime to omit to make entries in books 182 crime to publish false report, exhibit or statement 182 crime to make false entries in books 182 crime to omit to make entry in stock book 182 crime to omit to exhibit stock book 182 crime to omit to disclose service of injunction 182 crime to omit to make prescribed public report 182 Equity process in federal court, -^ovvicp of 260 Evidence : admission of a member is not 305 proof of service of process in foreign suit 306 Index. 499 Evidence — (continued) : Page. books as evidence 305 depositions taken in New York for use elsewhere 349 of debt, action on 346 of debt, crime to issue illegal, fraudulent or fictitious 180 of compliance with statutory prerequisites 51 of director's title to office 276 of incorporation 4, 298, 385 of residence of plaintiff , 250 of value in franchise tax proceeding 127 effect of testimony in general tax proceeding 80 effect of report in franchise tax proceeding 122 burden of proof in general tax proceeding 77, 86 burden of proof in franchise tax proceeding 122 burden of proof on manufacturing corporation 100 burden of proof on a revision of franchise tax 128 Excessive indebtedness 208 Exchanging stock on merger 155 Executor suing foreign corporation 249" Exempt : property from general tax 68 mining corporation from franchise tax 103 manufacturing corporation from franchise tax 103 laundry corporation from franchise tax , 103 franchise tax corporation from other state tax 136 Exhibit, crime to publish false 182 Exhibiting stock book: must exhibit , 101 application of statute 10'2 demand and refusal 1 03 mandamus. . , 104 penalty. 104 misdemeanor to omit to exhibit 182 Factor, doing business by 27 False certificate, report or public notice 213 idem, under statute of the home state 214 Federal corporation defined 2 Federal court: jurisdiction 334 assigned claim 335 effect of state restrictions on actions and recoveries 336 federal limitations on jurisdiction 337 effect of doing business in New York 338, 342 service of process 266 idem, on officer temporarily in New York 288 proof of service of process 292 designation of an agent to receive service of process 271 500 Index. Federal court — (continued) : Paoe. allegation of incorporation 296 suit by a resident 338 suit by another foreign corporation 33S suit against an alien corporation 340 corporation of two states 341 patent cases 342 trade mark eases 342 removal of causes 37, 343 receiver 377 Federal employment is not doing business . . , 12 Fire insurance, obtaining, is not doing business 22 Foreclosure by advertisement 242 Foreign corporation : See Corporation, Foreign. Foreign statute of limitations 310 Forfeit franchises, action to 358 Forgery : of a seal 1 84 of entry in book of account 184 of certificate of stock 183 Form of application .to general tax assessors. 70 Form of defence 310 Franchise: sale of lOfl action to forfeit 358 action to restrain the, usurping of 359 Franchise tax: definition and nature of 102 corporation exempt from 103 report by corporation 107 in\ estigation by comptroller 107 tax when dividends amount to six per centum or more 109 tax when dividends amount to less than six per centum 110 tax when no dividend' is made or declared 112 tax where the corporation has different kinds of stock 113 capital defined 114 employed in New York 117 assessing franchise tax. 121 statute of limitations 122 burden of proof 122 effect of report 122 .present value controls 124 copyrights 124 patents 124 trade marks 124 United States bonds 124 nieichandise in origiuul packages 124 Index. 501 Franchise tax — (continued) : assessing franchise tax— ( continued ) : Page. stock in trade j 04 bank balance 124 salaries j24 rent 124 good will 124 debts J 25 real property 125 prosperity 125 sums received for stock 126 surplus 126 evidence of value ; ^ 127 notification of tax 127 revision by comptroller 127 certiorari 128 hearing at appellate division 131 return is conclusive •. 132 appeal to court of appeals 131 wnen payable '. 134 penalties 134 interest ]34 lien 134 warrant to collect tax 135 action to recover tax or to annul franchise 135 informer 136 exemption from other state tax 136 Fraud, enjoining 363 Full paid stock, assessment on 194 Furniture : assessment of, for general tax 62 assessment of, for franchise tax 117 (Jaming establishment, crime to keep 185 (icneral assigment: See Insolvent Transfer. • Jcneral business can not be enjoined 362 (jreneral corporation law: text of 385 does not apply to foreign corporations 142 section 15 as a defence 311 effect of section 15 on federal court jurisdiction 336 efTect of section 15 on an attachment 320 effect of section 15 on receivership 377 enjoining use of name 146 action in name of real party in interest . 300 waiver of misnomer 147, gos misnomer 303 idem, in municipal court 332 Negligence : action for 248, 250 limitation of action for 314 effect of sections 15 and ISl 43 Index. 507 New York city: p^cj._ grievance day for general tax 75 city court 33O municipal court 33X text of charter of 438 New York state : statutes mentioning doing business in 10 policy of, as to foreign corporations 58 Non-resident suing foreign corporation 251 Note: taking, when not doing business 22 negotiated by delinquent corporation 177 action on 34(3 enjoining action on in foreign state 305 Notice : to attorney-general of receivership 376 party to contract chargeable with 228 stockholders chargeable with 151 of franchise tax 127 false 213 OfBeer : of defunct corporation not liable for debts G power of, to contract 231 action against for misfeasance 354 liable for false certificate, report or public notice 213 liable for omitting to make annual report , 210 liable for insolvent transfer 215 ferime to receive corporate assets illegally ISl crime to omit to make entries in books 182 crime to publish false report, exhibit or statement 182 crime to make false entries in books : 182 crime to omit to make entry in stock book 182 crime to omit to disclose service of injunction 182 crime to omit to make prescribed public report 182 crime to omit to exhibit stock book 182 Ohio statute stockholders' liability 202 Organization tax . . *. 138 Original package merchandise assessable for franchise tax 124 Over-valuation for general tax, certiorari for 84 Ownership of property affecting assessment for general tax G2 Particulars, bill of 305 Party to contract chargeable with notice 228 Patents : suits 342 stock issued for 154 subject to franchise tax ' 121, 124 exempt from general tax fiS 508 Index. Paoe. Payment of franchise tax 134 Penal code, text of 448 Penalty : action for a 340 for non-payment of franchise tax 134 punishment for crime 183 Perjury to make false affidavit 183 Personal liability of oificerSj directors and stockholders: See Officers ; Directors ; Stockholders. Personal property law. text of 432 Personal property liable to general tax 61 Petition for certiorari for scneral tax 87 Place: of corporate meetings 158 of taxation 53 of trial ■ . . 3ul Pleading: form of defence 310 usury 311 section 1780, code civil procedure 311 section 181, tax law 311 section 1.5, general corporation law 311 corporate power to contract 312 statute of limitations of New York 313 foreign statute of limitations 314 compliance with statutory requirements 49, 311 effect of, on jurisdiction of the person 268 n\il tiel corporation 297 idem, in municipal court . ., 332 verification of 303 Police intereference with delinquent corporation 43 Policy of New York respecting foreign corporations 58 Power : of foreign corporation 141 to contract 225, 312 pleading power to contract 312 to sue 245 of officers and agents to contract 231 to loan money prohibited 170 to hold real property 234 to mortgage 240 of ancillary receiver 378 Preference : on court calendar 305 contract for 233 Pre-requisities of doing business in New Y'ork: See CoxDiTioNS. Index. 509 Page. Pretended corporation 4 Procedure, criminal 185 text of code of criminal procedure 445 Procesis : See Service of Peocess. Prohibitory statutes : prohibited acts 1 09 banking powers 109 trust company power 170 power to loan 'money 170 construction of ] 71 prohibition against doing business 30, 1 73 prohibition against doing business, federal decisions 174 deeds 175. '236 mortgages 242 Promissory note: taking, when not doing business 22 negotiated bj' delinquent corporation 177 action on 340 enjoining action on, in foreign state 305 Promoters, assets diverted to 189 Proof of service 2!'■) usurping of franchise 359 Retiring stock }7>') Return: to certiorari in general tax f)0 to certiorari in franchise tax 130 Reviewing corporate meetings 159 Revision of franchise tax by comptroller 127 Salaries, effect of, on franchise tax 1 24 Sale of franchise and property 166 Salesroom, doing business in 19 Samples aflfectiug franchise tax 110 School tax 138 Seal: defined 147 forging 184 Second application to assessors in general tax 80 Second certiorari to review general tax 87 Security for costs 304 Sequestration, action for 357 Service of process: common law ' 264 old code 264 present statute ■ 205 federal court 206 equity 206 admiralty 266 in action for a penalty 346 effect of appointment of receiver '. 208 effect of appearance 268 effect of pleading 208 effect of doing business in New York 208 designation of agent upon whom to serve process 209 designation out of New York 2 1 3 service on cashier, director or managing agent 275 managing agent -'< managing agent federal decisions •. 281 resignation ■'°" temporarily in New York 287 temporarily in New York, federal court , 288 512 Index. Service of process — (continued) : Pace. affidavit of service 290 motion to set service aside 290 proof o£ service in federal court 292 substituted service of process 292 crime not to disclose service of injunction 182 Single transaction is not doing business 18 Special partnership : is doing business , 22 liability for franchise tax 110 Statement : false certificate, report or public notice 213 crime to publish a false report 182 crime to omit to make a prescribed report 182 for general tax 54, 76, 77 for franchise tax 107, 122 Statutes : attacliment of property 317 additional liability of stockholders 195 liability for subscriptions, calls and assessments 190-195 name 146 on powers and liabilities 141, 142 on capital stock 140 on dividends 156 on unauthorized dividends 205 on corporate meetin jrs 158 on reviewing meetings 159 on spivice of process 265 on exhibiting stock book 161 on monopolies , 17jj on mort^iiiycs 040 on oxcc'ssivo indebtedness ' 208 on holding real property 234 criniiiial ISO mentioning doiiij; business 10 prescribing conditions of doing busin<'ss in \pw York 30 lestricting actions in federal courts 330 prohibitory 109 stock subject to statutes of home state 151 general assignment act 218 text of statutes on evidence 385 text of general corporation law 385 text of stock corporation law ygg text of banking law 3r)8 text of real pVoperty law 401 text of tax law 402 text of labor law 43O Index. 513 Statutes— ( continued ) : Page. text of personal property law 432 text of statutes on monopolies 433 text of Greater New York charter 438 text of code of criminal precedure 445 text of penal code 448 text of code of civil procedure 4(54 Statute of limitations: action on false certificate, report or public notice ■ 213 action for negligence 314 action for stockholders' liability 314 assessment for franchise tax 122 as a, defence , 313 foreign statute 310 Stock: what statutes control issue and transfer of ' : 14!) certificates of 140 crime to issue illegal, fraudulent or fictitious 180 subscriptions to stock : 150, 190 . subject to charter 151 subject to eon.stitution and statutes of home state. . ; 151 transfer of stock 132 transfer of decedent's stock .■ 140 stock transfer tax , 140 illegal stock 1 53 issued as bonus to bonds 153 exchanging stock on merger 155 retiring stock 155 investment#in stock by guardian 155 attachment of stock 321 crime to reduce or increase stock illegally ISl crime to have corporation purchase its own stock ISl dividends 156 capital stock assessable for general tax 53 public and municipal stocks assessed for general tax 62 of private corporations assessed for general tax 02 stock in trade assessed for general tax - 02 of taxable corporation deducted in .general tax ; 70 legacy of stock subject to transfer tax i 131) franchise tax on capital stock ; 114, 121 employed in New York ■'■ • 1 1 '' stock in trade assessable for franchise tax 124 franchise tax on sums received for stock issued 120 stock book, must exhibit 161 See Stockholders. 514 Index. Stock book: Tagb. must exhibit 161 application of statute lOa demand and refusal 163 mandamus 104 penalty 164 misdemeanor to omit to exhibit 182 Stock corporation law, text of 380 Stockholders : chargeable with notice 151 of migratory corporation not liable for debts. 5 loans to 209 assets diverted to .- 187 subscriptions, calls and assessments: statute liability of stockholders 190^ contract liability of stockholders 191 levy of attachment upon subscription 193 full paid stock 194 addiuional liability of stockholders: statutes 195 enforcing statute of home state 195 common law remedy 197 decisions under Kansas statutes 198 decisions under Washington statutes 200 decisions under Ohio statutes 202 decisions under Minnesota statutes 202 effect of consolidation 204 defective incorporation 204 subrogation ^ / 204 statute of limitations 314 See Stock. Stock in trade: liability of, to general tax 02 asassable for franchise tax 124 Stock transfer tax 140 Storage room, doing business in ig Subrogation of stockholder paying debts 204 Subscription to stock: liability for 150^ ]flO attachment of I93 Substituted service of process 292 Suit by and against foreign corporations: See Action. summons,, service of: See Sebvice of Process. Supplemental summons 309 Supplementary proceedings 347 Surety corporation, franchise tnx on II7 Index. 515 Surplus: p^^P general tax _. ___ 68 ■ franchise tax , 126 'Jix law.: section 181 as a defence 311 effect q£ section 181 on an attachment. , , 320 effect oi section 181 on federal court jurisdiction 336 text of 402 'Baxation : is condition of doing business in New York , 34 See Generai Tax; Ebanchise Tax; License Tax; Highway Tax; Vimage Tax; School Tax; ORGANizA-rioif Tax; Liquok Tax; Transfer Tax; Stock Transfer Tax. Telegraph, contracts by, are not doing business. , 2.1 Temporarily in New York, service on officer. , 287 Testimony, effect of, in general tax proceeding:. 70 Things in action 62, 223 Time: to present petition in general tax proceeding , 8!) of assessing fi-anchise tax 121 of payment of franchise tax 134 Title to foreign reaL property 261 Trade mark^ .suits 342 ■ exempt from general tax...,....,, 68 assessable for franchise tax 124 Eading. stamps, crime to use illegally 185 Transfer of franchise and assets: merger 166 sale at franchise and property 166 transfer of assets 168 insolvent transfer 215 Transfer of stock l.')2 idem, of decedent's stock-. 140 Transfer tax , 139 Traveling salesmen, when contracts by are not doing business 26 Trespass for illegal general tax 100 Trust I'S .Tmst company powers prohibited 170 Trust deed : 230 Trusteeship, when not doing business. . 22 Turning over assets to receiver 378 Two state corporation 2, 341 Ultra vires '^•'" ■Unauthorized dividends 205 516 Index. United States bonds: Page. liability of, for general tax 68 liability of, for franchise tax 124 User to show de facto corporation 4 Usury '. 311 Venue 301 idem, in municipal court 331 Verification of pleadings 303 idem, in municipal court 332 Vested rights, effect of conditions of doing business 38 Village tax 138 Visitorial jurisdiction: general rule 351 winding up 352 recent cases of visitation 353 action against directors or officers for misfeasance 354 id. ; its application to a foreign corporation 35(5 action for sequestration 357 action to dissolve corporation and to forfeit franchise 358 action to annul act of incorporation or to vacate charter 358 action to restrain usurping of franchise 35(1 repeal of charter 300 Voluntary dissolution SfiO Voting : at corporate meetings 158 to sell a vote is a crime 182 to issue a proxy for value is a crime 182 Wages: preferred 215, 217, 224 effect of, on franchise tax 124 Ware room, doing business in 19 Warrant of attachment: See Attachment. Warrant to collect franchise tax ; 135 Washington statute, stockholder's liability 200 Waste : criminal 181 enjoining 3C3 Winding up foreign corporation in state court 352 Withdrawal from state, doing business after 28 Writ of certiorari: See Certiobaki.