Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1884-04-01
The Rights OF stockholders.

The Rights OF Stockholders.
The supreme court has decided an in
teresting question raised by the manda
mus applied for by George II. Sellers
against the Phnnix iron company, to
compel II TO exhibit to him its books, as
one OF Its stockholders. that he might
secure iherefrom the information neces
sary to enable him to state correctly the
facts in bill Of equity which he desired
TO file TO secure an accounting OF the
company for the profits Of its business
The court below had refused the writ, but
the supreme court has granted 1t, and
we do not see how IL could properly have
been refused. The reason urged against
It was that Mr.. Sellers was rival in
business to the Phoenix iron compa-
ny and that IL business men should be
allowed to inspect the books of rival
concerns, great injury would be done by
the exposure of business secrets. Judge
Turnkey, who delivered the supreme
courts opinion, thought there was force
Ia the position, but that 1t was not suf-
flcient to take away from copartner his
right to specific information needed for
aspec6c case. 1t seems to us that there
is great deal more of sound than sub
stance in the reason urged for protect
ing q firms books from the inspection of
o hostile interest. 1t can always be
avoided by buying out such an interest
and the seller is not likely to
demand so much more than his
interest is worth as to make its purchase
much of an imposition. When trouble
arises 1t Is generally due to the fact that
the parties let their angry passions rise
and grow stubborn. And that was about
the case IN this matter between Sellers
and Reeves. The former was for some
time the superintendent of the PbPnix
company, and in that capacity became
an owner of its stock. In time he began
to feel his oats, and thought he was a
bigger man than Mr. Reeves thought
him. A severance of relations occurred
and Mr.. Sellers started up large rival
industries in and about Philadelphia.
The Pl9nix iron company organized
within itself bridge building
company, which would serve to
milk the PhGnix compauy's profits
into its handy nav, after the manner
OF construction companies of railroads !;
and ever since the Phoenix iron company
has been growing and doing a fourishing
business, but declaring no dividend,
which the bridge company has had a
monopoly of. Naturally Mr.. Sellers did
not like the situation, and he has beer
trying to get 1t altered; but the only
way in which he can get dividend is t.
show that it has been earned and tn,
only way to show this is by the books
and 80 for years he has been trying t,
get an inspection of them, and strangel.
enough he has failed until now.
We say 1t is strange for certainly i
seems that every co.partner should b,
privileged To examine the books of hi
business, aud it is hard TO see why
stockholder is not entitled 90 a like priv
ilege, when he can discover to cour
the reasonable nature of his deman,
and that he desires the exposure for
needful ard proper purpose. This is tn
law, as we have understood it to be ex
pounded by the supreme court {; and it i:
an important exposition of it. Under il
we trust that the accounts of our corpo-
rations will be subject to such scrutiny
by the stockholders AS TO satisfy the OFF.
GERS before long that they are not the
owners of the roads they manage as their
own, though often with but a few dollars
of interest in the ownership. If the
courts will help stockholders to maintain
the fact that they are the real owners OF
their property, and not simply It's last
security holders, they will do something
which has long been overlooked by then
in their adiudications.