Court Opinion

ID: 6581501
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:38:39.935899+00
Date Added: 2024-06-11T15:57:18.040661
License: Public Domain

The opinion of the court was delivered by
Dunton, J.
As it is not alleged in the first and second counts of the declaration that the request to exhibit the books and records of the corporation was made at the office of the defendant, these two counts are fatally defective. Harvey v. Chase, 38 N. H. 272. So far as appears, such request might have been made in the street, or at some other place, where it would have been unreasonable to require a compliance with the same.
But this defect does not exist in the third or last count of the declaration. A request to exhibit to the plaintiff certain books is therein alleged to have been made at the office of the defendant *515in St. Albans, at a proper and seasonable time, which we think is sufficient, provided the books requested to be exhibited were such books of records as the plaintiff was entitled to inspect and are referred to in sections 7 and 8 of chap. 86 of the Gen. Statutes.
It is alleged in said last count that the defendant at the date specified was the recording officer of said corporation, and as such was the holder, keeper and legal custodian of certain books of the corporation, to wit; books entitled and called a ledger, journal, stock ledger, transfer book, and certain other books appertaining and belonging to said defendant in his official capacity, and that the entries and records therein solely appertained to the business and affairs of the said corporation ; which books it is alleged that the plaintiff requested the defendant to exhibit and show to him, at a seasonable and proper time, and that a compliance with such request was wilfully neglected and refused. This is all admitted by the demurrer. — By section 18 of the same chapter of the General Statutes it is provided that the term, “ clerk of a. corporation,” as used therein, shall be construed to mean the recording officer, however he may be designated.
To incur the penalty provided by said section 8, there must be a wilful neglect or refusal to exhibit and show the records or bylaws of the corporation. It is not alleged that any of the books named in the last count of the declaration contained the by-laws of the corporation. Is it therein sufficiently alleged that any of said books contained the records of the corporation ? Section 9 of the General Statutes provides that: “ Every corporation shall, by its clerk, make and keep a record of all its corporate doings, in which the several shares of the capital stock of such corporation shall be designated by numbers, and also a record of the name of each owner of such stock and the number and description of the shares of such owner.” In the absence of proof to the contrary, it is to be presumed that the corporation kept such records as are required by statute ; and these are, in our opinion, the records referred to in sections 7 and 8 of the statute in question. The stock ledger and transfer book, kept in the usual manner, are such records ; for they contain a record of the name of eacii owner of the capital stock, and “ the number and description of *516the shares of such owner ” ; and the former should also show the amount assessed and-paid on each share of such stock.
If not restricted by the charter or rules and by-laws of the corporation, by the common law, a stockholder has the right at proper and seasonable times to inspect all the books and records of the corporation. The clerk, however, or recording officer, having the custody of the same, would not subject himself to the penalty imposed by said statute, by refusing to exhibit the ordinary books of account showing the daily business or transactions of the corporation with its customers. As such clerk or recording officer he would be under no legal duty to keep a record of the business transactions with customers or third parties. Such transactions may be as well recorded, and books containing such records kept by any other agent or servant of the corporation. Such clerk or recording officer could not certify copies from the corporation’s records of its business transactions, and thereby make such copies legal evidence of the transactions themselves. See Wheeler v. Walker, 45 N. H. 358; Haynes v. Brown, 36 N. H. 545; Oakes v. Hill, 14 Pick. 442; 1 Greenleaf on Ev. ss. 493, 498.
Therefore, so far as appears from the allegations in the declaration, the only books named in the last count thereof entitled to be called records within the meaning of sections 7 and 8 of chap. 86 of the Gen. Sts., are the stock ledger and transfer book. Some of the other books referred to may contain records of the “ corporate doings,” but they are not described as such with the accuracy that good pleading requires.
Although the statute in question, in terms, subjects the offender to a certain penalty recoverable by the injured party, it is in our opinion a remedial statute. The distinction between a penal and remedial statute is clearly and concisely stated by Prentiss, Ch. J., in Hubbell v. Grale, 3 Vt. 266, in the following language : “ Where a statute gives an action to a stranger to recover a forfeiture, he is a common informer, and the action is a penal action ; though it is otherwise when the statute gives damages, either single or accumulative, as a compensation to the party aggrieved.”
A stockholder at common law could maintain an action against *517the recording officer having the custody of the books and records of the corporation, for wilfully refusing to allow him to inspect the same, at reasonable and proper times, and recover damages therefor, either actual or nominal, as the case might be. See Field on Corp. 134; Jones v. R. R. Co., 57 N. Y. 196. To save the necessity of proof of damages, and limit and fix the liability of the offender, the Legislature, by the statute in question provided for the forfeiture claimed in this suit, and gave it to the injured party in lieu of damages.
Says Story, J., in Taylor v. United States, 3 How. 197 “In one sense every law imposing a penalty or forfeiture may be deemed a penal law; in another sense such laws are often deemed, and truly deserve to be called, remedial.” He also quotes with approbation as follows: “ It must not be understood that every law which imposes a penalty, is, therefore, legally speaking, a penal law, that is. a law which is to be construed with great strictness in favor of the defendant. Laws enacted for the prevention of fraud, for the suppression of a public wrong, or to effect a public good, are not in the strict sense, penal acts, although they may inflict a penalty for violating them.” Also see Burnett v. Ward, 42 Vt. 80.
The statute in question is of the same character as some of those named in the above quotation, and, whether penal or remedial, ought, therefore, to receive such a construction as will most effectually accomplish or carry out the intention of the Legislature and remedy the evil sought thereby to be prevented.
By the alleged breach of said statute, the neglect or refusal complained of being but one act, only one penalty was incurred; and its amount is to be determined by multiplying ten dollars by the number of periods of twenty-four hours each, that the wilful neglect or refusal to exhibit the records to the plaintiff continued. Hence it was not necessary for the plaintiff to renew such request every twenty-four hours, or at any other time. If the penalty in this case be severe, the recording officer in fault has made it so by his wilful neglect or refusal to accord the plaintiff his rights in the premises. This, we think, the Legislature intended ; otherwise, under certain circumstances the penalty would be clearly *518inadequate to induce a compliance with the statute. See Suydam v. Smith, 52 N. Y. 383; Cotheal v. Brouwer, 5 N. Y. 562.
The neglect or refusal of the defendant to comply with the plaintiff’s demand, is presumed to continue until a willingness upon his part to exhibit the records to the plaintiff, made known to him, is proved, or until such presumption is rebutted by a change of circumstances. The general rule upon this subject is stated in Greenleaf on Evidence, vol. 1, sec. 42, as follows : “ The opinions of individuals once entertained and the state of mind once proved to exist, are presumed to remain unchanged until the contrary appears.” Also, see 2 Starkie on Ev. 54; 3 do. 937; 2 Best on Ev. 716.
It would therefore be unreasonable to require a stockholder, after he has been once refused, to renew his request to be shown the records of the corporation every twenty-four hours, to entitle him to a recovery of more than ten dollars, or to renew such request, at least, twenty-four hours after such refusal, to entitle him to a recovery at all. If such recording officer changes his mind it is much more reasonable that he, being the party in fault, should notify the stockholder of such change, or in some way signify a willingness to accede to his request, than to require upon the part of the stockholder, repeated and probably fruitless efforts to obtain his rights. Although the penalty in question is a satisfaction to the stockholder for the injury caused him by a refusal of his right to inspect the corporate records, no special injury or damages need be alleged or proved. “ Some damages are always presumed from the violation of any right or duty implied by law,” and the statute in the case at bar fixes the amount of the damages. Neither is it necessary to allege or prove a reason or purpose for inspecting such records. A lawful reason or purpose for examining the records of the corporation will be presumed in the absence of proof to the contrary. The stockholders in a corporation are severally interested in all the corporate property and corporate action in proportion to the amount of their respective stock. The officers are to. a certain extent their servants and agents. Such stockholders, therefore, have the right to examine the books and records of the corporation, at reasonable and *519proper times, without making known to the recording officer their purpose or reasons therefor. This proposition is stated in Angelí & Ames on Corporations, section 681, as follows: “ With respect to the members of a corporation, the books of the company are public books; they are common evidence which must of necessity be kept in some one hand, and then each individual possessing a legal interest in them, has the right to inspect and use them as evidence of his rights.” It is for a violation of this right that the forfeiture in question is provided. The rights of the stockholder are not in any way abridged, but enlarged and enforced by the statute under consideration.
The judgment of the County Court is reversed ; and it is adjudged that the third count of the declaration is sufficient, and that the first and second counts are insufficient, and the cause is remanded to be proceeded with.