Court Opinion

ID: 5184522
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:46:35.381241+00
Date Added: 2024-06-11T08:26:41.622778
License: Public Domain

Ingraham, J. (dissenting):
The question of the power of the Supreme Court in the exercise of its general supervision over corporations to grant a mandamus to compel the directors of a corporation to allow to a stockholder an inspection of its general books of account, in the absence of legisla*75tion upon the subject, is not clear; but, in view of the recent legislation in this State upon the subject, I do not think that it is material that we should determine it. That the Court of King’s Bench in England, from an early period, exercised a general supervisory power over corporations is undoubted, but whether this power was exercised so as to compel the directors or trustees of a private business corporation to allow a stockholder owning a minority of the stock a general inspection of its books and papers is doubtful. Although it is easy to find declarations of judges of the courts of England asserting such a power, and although that power existed in England, it does not necessarily follow that it was vested in the courts of this State upon the reorganization of the judiciary subsequent to the American Revolution. There are, however, several authorities in this country that are entitled to great weight, which have claimed and exercised such power. It has always been the rule, however, that such power, if it existed, was discretionary and was never exercised except when clearly necessary to the protection of a right of a stockholder; and a stockholder must show that the exercise of this power was required for the protection of some right of his that was in jeopardy. Whether or not such power should ever be exercised was largely in the discretion of the court upon the particular facts submitted in each case. It was always subject to the control of the Legislature. It was derived, if it existed, from the power of the State to supervise and control corporations created by it; and where the State which had created the corporation, either expressly or by implication, denied such relief to a stockholder, it is clear that the court should not exercise that power. The corporation whose books are sought to be examined in this case was organized in the year 1876, under the Manufacturing Act of 1848, and has continued in actual prosecution of the business for which it was incorporated down to the present time. By section 25 of that act it is provided that it shall be the duty of the trustees of every such corporation or company to cause a book to be kept by the treasurer or clerk thereof containing the names of all" persons alphabetically arranged, who are or shall, within six years, have been stockholders of such company, and showing their places of residence, the number of shares of stock held by them, respectively, and the time when they, respectively, became the owners of such shares, and the amount of *76stock actually paid in ; which hook shall, during the usual business hours of the day, on every day, except Sunday and the fourth day of July, be open for the inspection of stockholders and creditors of the company, and their personal representatives, at the office or principal place of business of such company in the county where its business operations shall be located; and any and every stockholder, creditor or representative shall have a right to make extracts from such books; and by this section a penalty is provided for a failure to comply with this provision of the statute. By section 27, as amended by chapter 472 of the Laws of 1862, it is provided that whenever any person or persons owning a named percentage of capital stock of any company shall present a written request to the treasurer thereof that they desire a statement of the affairs of such company, it shall be the duty of such treasurer to make a statement of the affairs of such company, under oath, and to deliver such statement to the person who presented the said written request to the said treasurer ; and the section provides a penalty for neglect or refusal to comply with the provisions of this section. By section 2 of chapter 472 of the Laws of 1862 it is provided that if such written statement should not be demanded during the year preceding the annual meeting of the stockholders of any company for the election of directors or trustees, it shall be the duty of the treasurer of every such company to prepare and exhibit to the stockholders then and there assembled a general statement of the assets and liabilities of such company. By section 16 of chapter 611 of the Laws of 1875, which is an act to provide for the organization of certain business corporations, it is provided that it shall be the duty of the directors of every corporation organized under that act to cause to be kept at its particular office or place of business correct books of accounts of all its business transactions, and every stockholder in such corporation shall have the right at all reasonable times, by himself or his attorney, to examine the books of account of such corporation; and by section 17 of the act it was provided that the corporation should also keep a book' containing the names of the stockholders of the corporation, substantially in accordance with the provision of the Manufacturing Act of 1848 before referred to. Thus, the Legislature had provided for corporations, organized under these two acts, a method by which the stockholders could obtain *77information as to the business affairs of the corporation. In both cases the stockholders had the right to examine the books containing a list of the stockholders or the stock books of the .corporation. In the case of a corporation, organized under the General Manufacturing Act of 1848, a stockholder was entitled to have submitted to him a sworn statement of the affairs of the corporation, while under the act of 1875 the directors were bound to keep correct books of account of its business and transactions, and each stockholder in the corporation was given the right to examine these books at all reasonable times. Upon the general revision of the laws of this State, in 1892, both of these acts were repealed. (See Chap. 687, Laws of 1892.) By that act a stock corporation was defined to be a corporation having capital stock divided into shares, which was authorized by law to distribute to the holders thereof dividends of the stock of the corporation; and the corporation in question would come within this definition of a stock corporation. By section 29-of the Stock Corporation Law (Chap. 688, Laws of 1892) every stock corporation was recpiired to keep at its office correct books of account of all its business and transactions, and a book to be known as the stock book, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation. The stock book of every such corporation shall be open daily, during business hours, for the inspection of its stockholders and judgment creditors, who may make extracts therefrom ; and the section provides a penalty for a failure on the part of any corporation to keep such books, or to keep» any book open for inspection as therein required. By this section, applicable to all corporations, the Legislature required of the corporations to keep correct books of account of their business and transactions, and a book to be known as the stock book. It required the stock book to be kept open for the inspection of the stockholders, but contained no such provision as to the books of account of its business and transactions. Section 52 of the act prescribes a method by which the stockholders could obtain information as to the financial condition of the company or its business. It is there provided that stockholders owning a fixed percentage of the capital stock of any corporation, other than a moneyed corporation, may make a written request to the treasurer or chief fiscal officer for a statement of its affairs, under oath, embracing a particular account *78of all its assets and liabilities, and the treasurer shall make such statement and deliver it to the person presenting the request within thirty days thereafter; and the section provides a penalty for a neglect or refusal to comply with such request. Thus, the Legislature, in repealing the former laws relating to the right of stockholders to inspect the books of the corporation and to obtain information as to the business it transacts and its financial affairs, has passed a general statute applying to all stock corporations, and providing a method by which a stockholder is entitled to obtain such information. The statute provides the books that shall be kept by the corporation. It specifies the books that shall be submitted to the stockholders, and a method by which stockholders may obtain information as to the business and financial affairs of the corporation. It gives no power to a stockholder to examine generally the books containing the record of the daily business of the corporation, but provides a method by which a stockholder may obtain the information which the Legislature deemed he was entitled to by means of a sworn statement of the affairs of the corporation instead of requiring the corporation to submit its books, which were in daily use, to be examined by stockholders whenever they should for any reason desire such an examination. These provisions of the Stock Corporation Law are general, applying to all corporations of the character specified. They prescribe a system binding upon all such corporations. They provide for giving the stockholders such information as it was determined they were entitled to, and they are to obtain that by means of a sworn statement rather than by an examination of the books containing a record of the transactions of the corporations. It seems to me that such a method, so prescribed by the statute, is exclusive in its character and is inconsistent with the right of a stockholder to require the officers of corporations to submit for examination the books containing the accounts of the business transactions of the corporation.
The subject was before the Legislature. One of the acts repealed contained a provision which gave a stockholder the right to examine the books of account. The other of the acts repealed contained a provision requiring the officers of a corporation to furnish a detailed statement of its business to a stockholder upon demand. The Legislature in adopting a general rule applicable to all corporations, pro*79vided that the stockholder could examine the stock book of the corporation, but as to information concerning the general business of the corporation it was to be acquired by the officers of the corporation by a sworn statement of its transactions, assets and liabilities, rather than by an examination of the hooks of account of the corporation. Here we have a plain legislative declaration of the right that a stockholder should have as to the examination of the books of the corporation and as to the means to be adopted for acquiring information as to the business affairs of the corporation; and this system excludes the right of the stockholders to examine the books of account of the corporation. The maxim expressio unins est exclusio alterius is applicable to the construction of statutes; and the books are full of cases in which a grant of a right to an individual excludes the exercise of other rights. As an illustration of the cases in which this maxim has been applied see 23 American and English Encyclopaedia of Law, 446, note. We are considering here the existence of the right of a stockholder to an inspection of the boobs of a corporation, not the power of the court to enforce such a right if it exists ; and it seems to me that when the Legislature has provided a method by which a stockholder can acquire such information, which system it is evident from the course of legislation was intended to apply to all stock corporations, giving to a stockholder the right to examine certain books of the corporation, and requiring the officers of the corporation to give to the stockholder information as to the contents of other books by a sworn statement instead of an examination of the books, the right of the stockholder to require the corporation to allow him to examine the books is limited to those specifically named, and as to the other information the stockholder desires he is confined to the remedy provided by statute. For this reason we think that the court below was right in denying this motion, and the order should be affirmed, with costs.
Van Brunt, P. J., concurred.
Order reversed, with ten dollars costs and disbursements, and motion for mandamus granted, with ten dollars costs ; the terms of the writ to be settled upon the entry of the order upon this appeal.