Court Opinion

ID: 6554922
Source: CourtListenerOpinion
Date Created: 2022-07-20 18:56:33.529309+00
Date Added: 2024-06-11T15:56:16.491219
License: Public Domain

Wootten, J.,
dissenting:—A company was incorporated in the State of Connecticut, under the name of “ The Diamond Match Company” and to enable them to carry on their business in this State under a corporate name, application was made to the Legislature for a law authorizing them to do so and a private act was passed, which is set out in the pleadings. What authority that act confers upon them is not a matter necessary for this court to determine for the purposes of this case. It is sufficient to know that this company having its existence under and by virtue of the laws of the State of Connecticut, does carry on the business of manufacturing matches in this State, and the President resides here, and has a portion of the books and papers belonging to the company in his possession and custody. And it further appears that the relator is a large share or stockholder in the company, and for the purpose of enabling him to raise a sum of money which he desired to have at the timé, pledged his certificates of stock to Messrs. Buhl and Alger as collateral security, who advanced to and loaned him a certain amount of money mentioned in the relator’s petition and other proceedings, under an agreement, that if the money so loaned and advanced was not at the time designated for payment, duly and promptly paid, that the net earnings of the company so far as the same were applicable to the shares or stock so pledged should be applied to the payment of the money so loaned and advanced to the relator, David M. Richardson, by the said Buhl and Alger, it appears by the evidence before us that for a period of time set forth by the relator’s petition and other papers, no dividends were declared by the Company.
The relator, David M. Richardson, has instituted suit against the holders of his stock in the Court of Chancery of Michigan, for the purpose of obtaining a surrender of his certificates of stock on the alleged ground that the holders of it, for the purpose, hereinbefore mentioned, have received from the company, dividends or profits from the stock so held by them, to an amount exceeding the sum advanced and loaned by them to the relator, *171with interest thereon. The relator alleges that the books and papers, now in the possession of the defendant, Wm. H. Swift, are material and necessary evidence for him, because they show these facts, upon which this case mainly depends, and that without such evidence, he cannot maintain his said suit in Michigan, and that he is remediless without copies of such portion of such books and papers as are essential to the establishment of his claim. The relator alleges, and it is admitted in the defendant’s answer, that he has applied for the privilege of inspecting the books and papers in the possession of the defendant, and that he was allowed to inspect and examine all the books and papers in defendant’s possession; but denied the privilege of taking copies thereof; the directors of the company residing in the State of Connecticut, the State which created this corporation, and where it only exists, having directed him to refuse copies.
On this statement of facts, the relator bases his application for a writ of mandamus to compel the defendant, Wm. H. Swift, to allow the relator not only to inspect the books and papers of the company, which is a right conceded to him and heretofore allowed him, but to take copies of all, or such portions thereof as he may think proper to have and use for any and all purposes whereby they would be made public. The application is resisted on two grounds, first, the want of jurisdiction in this court to grant or award the writ, and secondly, on the ground that if the court has jurisdiction a proper case has not been presented for the exercise of it.
The writ is asked for in this case to compel Wm. H. Swift, President of The Diamond Match Company, a foreign corporation, to allow the relator to take or have copies made of the contracts, books and papers of the company to be used in the courts of another State, not even that which created the corporation, arid in a suit to which The Diamond Match Company is not a party, and in nowise interested in the litigation; but between a stockholder and persons from whom he borrowed money on the pledge of his stock.
All proceedings instituted for a writ of mandamus are in the name of the State of Delaware, and why is it so ? Because in cases where this extraordinary remedy is resorted to or sought, the State or people have relation to or are interested in the subject matter *172over which the court is called upon to exercise a supervisory power. Now what sort of interest has the State of Delaware, or the people in the suit pending in Michigan between the relator and those to whom he pledged his stock for borrowed money ? I confess I am at a loss to conceive of any whatever, and why then should the State be a party ? If it is not properly a party, and the proceedings are not legitimately in its name, it is evident that this court has no jurisdiction or supervisory control over the subject matter, and therefore cannot award a writ of mandamus.
In England, the writ is called an extraordinary remedy, pertaining to the sovereignty of the State or people, and was introduced to prevent disorder by reason of a failure of justice, and a defect of the police force. High on Ext. Remedies; Tapping on Mandamus, 76 Law. Lib. 58 ; 2 Potter on Corporations, Sec. 635.
The writ is a proper remedy and will be granted to compel inferior courts to exercise their jurisdiction, but not to dictate their action, or to control them in the exercise of their discretion. It is the proper remedy, and it is made available by our courts to compel public officers to perform specific duties imposed upon them by law. It is also the proper remedy to compel corporations to perform duties or functions which are of a corporate character, and made obligatory on them by the act of incorporation or other law.
But can it be supposed for a moment that these inferior courts, public officers and corporators can be of foreign States, and brought under the superior control of the extraordinary remedy, the writ of mandamus or is it not manifest that they must be of the State in which, and by whose court the mandamus issues? How can this court, enforce by mandamus, duties imposed by the law of Connecticut on its corporations, any more than it can enforce the performance of the duties of its public officers, or compel the exercise of the jurisdiction and discretion of the inferior courts of that State?
It is true that our courts have become more liberal in the exercise of their discretion in granting writs of mandamus in cases of corporations; but the ground and object of the jurisdiction are still the same, that is, that the State having an interest in corporate bodies created by it and protected by its laws the people have a right to see that all such bodies or corporations, conform to the *173purposes of their creation. The proceedings, as I have before said, are always in the name of the State, and they are so because the people are interested to the extent of seeing that corporations fulfill strictly the purposes intended by their creation.
All the elementary books are in unison as to the authority from whence the jurisdiction eminates, that is from the sovereign power in the name of the State or people directed to some subordinate tribunal, corporate body, or public officer.
All within the jurisdiction of the court from and by which it is issued requiring and commanding the performance of some specific legal duty, or the surrender of some clear legal right. I think very nearly if not all the cases cited in support of the relator’s side of the case, are within the principle which I have just enunciated, and I am not aware of any case to which our attention has been called, on the authority of which this court could award the writ of mandamus on the facts before us in this case.
A great many cases have been cited and we have been referred to a variety of cases, decided in other States; but not one like the relator’s that we are now considering—that the writ will be issued to compel inferior courts to exercise their jurisdiction and discretion, to compel public officers to perform their duties and functions, and to require corporate bodies to comply with the law of their creation, no one doubts; but it is equally true and undoubted that there must not only be jurisdiction in the court awarding the writ, but the right to it must be clear and undoubted; all the books concede this to be the law applicable to the remedy by mandamus.
We are not without some light to guide us in the decision of this case, eminating from the decisions of our own courts. In the case of the Union Church, v. Sanders, decided by the Court of Errors and Appeals, Chancellor Johns in delivering the opinion of court, said: “ The first and most important question is that of “ jurisdiction. For the purpose of ascertaining correctly whether “ the Superior Court had authority to award the writ of peremptory mandamus, it is necessary to examine and understand the “ character of the injury complained of by the petitioner, and the “ remedy which he has sought to obtain. If no legal right has “ been violated there can be no application of a legal remedy. The *174“ writ of mandamus is a legal remedy for a legal right.” Union Church v. Sanders, 1 Houston, 125.
And in the case of Cannon et al. v. Janvier et al., 3 Houston, 31, the court said: “ The writ of mandamus is a prerogative writ, as it is termed in the law, by which the Court of King’s Bench in England exercises its supreme jurisdiction over public bodies and officers in the administration of justice in cases in which the law has provided no adequate or specific remedy, to prevent a failure of justice, and has been peculiarly applied to the regulation of corporations for the purpose of compelling them to observe the ordinances of their constitution and to perform their specific duties, and to respect the rights of those who are entitled to participate in their "privileges.” Wilk. on Mun. Corporations, 14 Law Lib., 193.
These cases were both church cases, and all the parties residents of our own State. The case I am now considering is a very different one indeed, and I think without a precedent. The corporation was created in Connecticut, the relator resides in Michigan, the defendant, Wm. H. Swift, resides in Delaware, and the suit in which it is alleged the copies of the books, contracts and other papers of the Diamond Match Company are desired to be used is pending in the State of Michigan, between parties resident there.
What legal right has been denied or withheld from the relator by the Diamond Match Company, or by Wm. H. Swift, its President ? What clear and undoubted legal right has he shown himself to be entitled to, of which he has been deprived ? It is not that he has been denied the privilege of examining and inspecting the books and papers of the Company in the custody and possession of the defendant, for he admits he has been allowed to do that; but it is said for him that he was not allowed to take copies of them. True it is he was not permitted to take copies of the books and papers, and the defendant refuses to allow him to do so under an express order of the directors or managers of the company, under whose control and direction he is as one of the board and the President thereof. The directors or managers, with the single exception perhaps of himself, reside in Connecticut, certainly not in Delaware. How is it not manifest that the corporate body should have been made a party to this proceeding ? The relator is *175a stockholder, and as such bound by the action of a majority of the directors or managers, who are but the agents or instruments of the stockholders. It has been held by the courts of this State that a majority of the stockholders of a Railroad Company could procure an amendment to their charter, and change the entire line of the road, and those of the stockholders who had not paid all of their subscription were legally bound to pay it, though they were opposed to the change of the line of the road and never assented to it. It was so held for the reason that they had become members of the corporation and were obliged to submit to the action of a majority of the stockholders. 1 Houston, 149.
The relator is a stockholder in The Diamond Match Company; and had the right to vote for directors or managers, and perhaps did, but whether he did or not is perfectly immaterial for any purposes of this case. It is presumable that all incorporated companies make and adopt rules and by laws for their guidance in the management of their business. Whether this Diamond Match Company has a by-law stipulating the time when stockholders are permitted to examine the books and accounts, or whether it has one prohibiting stockholders from taking copies thereof, I am not informed; but if there be such by-laws, the relator is bound and concluded by them, and for that if for no other reason, would not be entitled to this extraordinary remedy, a writ of mandamus. Tapping on Mandamus, 83, 76 Law Dib., 132.
It has been very truly said that no charge has been made against the corporation of improper management, as being prejudical to the interests of the relator—no charge that the relator is or has been deprived of any office, status or right that legally belongs to him in the said corporation, nor that he is denied in any way participation in the control or management of its business. He does not seek to be permitted to perform his duties and to exercise his right as a director, nor to be permitted to have all the privileges of a corporator, nor to inspect the books, nor to compel the performance of a corporate duty, specially imposed on any particular officer of the company, by the laws of Connecticut, or by the ordinances or by-laws of the corporation. He admits the privilege of inspecting books and papers has been allowed him; but he asks that copies of the contracts, books and papers of the company be *176given him, to be used in a litigation in another State, to which the corporation is a stranger, and in which the State of Delaware and its people are in nowise interested or concerned. And he asks that Wm. H. Swift, the President of the Company, be commanded by a writ of mandamus to be issued out of this court to furnish such copies, or to allow them to be taken. Here we come to the important question again, is this a clear undoubted legal right ? Unless it is according to well settled principles of law applicable to such cases, the relator is without a remedy in this court, and the writ of mandamus should be refused and his application dismissed.
In view of all the facts of this case, as presented to us and the law applicable to it, I am of the opinion that this court has no jurisdiction, and if it had, the case presented for our consideration is not a proper one for the exercise of it, and therefore the relator’s application for a writ of mandamus ought to be refused.