Court Opinion

ID: 8259383
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:52:02.741088+00
Date Added: 2024-06-11T16:43:07.416138
License: Public Domain

Thompson, J.,
delivered the opinion of the court.
This was a proceeding by mandamus brought by a stockholder of the defendant corporation, to compel the defendant to allow the relator to inspect the books of the corporation which contain the registers and transfers of its stock and the names of its stockholders. The alternative writ was served by the sheriff upon John O’Day, the second vice-president of the defendant corporation.
I. A motion to quash the service of the writ was filed by the respondent, setting up that Mr. O’Day was not its chief executive officer; had no power to control its stock-books or to perform the acts required by the writ; and also that the president and chief executive officer of the defendant was present in the city of St. Louis at the time of the service of the alternative writ. This motion was overruled. As the bill of exceptions does not show that any evidence was tendered in support of its allegations before it was heard and overruled, we need not concern ourselves with the question whether it was well taken.
II. The answer is a very singular pleading. It is, first, in the nature of a plea in abatement, grounded on the impropriety of the service of the alternative writ upon Mr. *306O’Day, and upon his alleged want of authority to perform the act sought to be compelled. This branch of it need not be further considered for the reason already stated. It is, in the next paragraph, an answer by Mr. O’Day in person. This may be disregarded, because Mr. O’Day is not the respondent in the action. The remaining- paragraphs are by the respondent in the trial court.
III. The first is a charge that the relator owns, if any, but ten shares of the stock of the defendant, not exceeding the value of three hundred an'd seventy-five dollars, which stock was acquired by relator years since for a much less.sum ; and that, in order that no injustice may be done the' relator, the respondent offers to purchase the same, for said sum or such greater sum as the court may order. The fact of this offer having been made in the answer is gravely renewed in the defendant’ s printed argument in this court. The relator has justly characterized it as impertinent. The relator is not bound either to forfeit his legal rights or to sell his shares to the corporation1 at their market value. The ■courts of justice are not going to assist corporations thus to exercise the right of eminent domain over the shares ■of their own stockholders, to enable such corporations to avoid doing to their stockholders the simple justice which the statute enjoins.
IV. The next paragraph of the answer, which runs in the name of the respondent in the court below, and not in the name of Mr. O’Day, avers in substance that the defendant had freely allowed the relator to inspect .its books, and denies the allegation of the alternative writ, that the relator had demanded of the defendant such an inspection. As all the allegations of the answer were traversed, it may be said, touching this allegation, that there was substantial evidence tending to show that, prior to the issuing of the alternative writ, such a demand had been made on the proper officer, and refused.
V. After thus alleging that the relator had never ■demanded this privilege, the defendant in the next *307paragraph proceeds to show why it should not be granted. The charge in substance is, that the purpose of the relator is not bona fide and consistent with justice, but that it is to gain information which will enable bim and other evil-disposed persons conspiring with him to institute unfounded suits against bona-fide stockholders, and thereby annoy and harass them. In support of this allegation the defendant offered to show at the trial that such was the purpose of the relator in endeavoring to obtain an inspection of its books, which tender of' evidence the court excluded, and the defendant excepted. The evidence was rightly excluded. The time when the inspection was demanded was within thirty days of a corporate election. The statute (Rev. Stat., sec. 720) gave the relator a right to the inspection claimed ; and where a party has a legal right to a thing, the motive which may prompt Mm in demanding his right is not the proper subject of a judicial investigation. State ex rel. v. Sportsman’s Park & Club Ass’n, post, p. 326.
YI. The next paragraph of the answer sets up a by-law of the defendant, which provides as follows: “The transfer-books of the company shall be closed for not less than thirty days prior to each annual meeting •of the stockholders. The board may order the closing of the transfer-books at any other times and for other purposes, and shall determine the object for which, the time and the period during which, they shall be closed.” This by-law was offered in evidence at the trial and excluded. It was rightly excluded. The closing of 'the books, spoken of therein, does not mean the closing of them against the inspection of stockholders, but it means the closing of them against the making of further transfers upon them. If it meant the closing of them against the inspection of the stockholders for not less than thirty days prior to each annual meeting of the ■stockholders, then it would contravene Revised Statutes, section 720, and would be invalid, unless it has *308come to be tbe law that a by-law of a railroad company can qverride an act of tbe legislature.
VII. Tbe next paragraph of the answer sets up, as a reason why the relator should not be allowed to inspect the books, a state of facts tending to show that it would greatly inconvenience the defendant to allow him to do so. The court has tried the issue joined upon this paragraph of the answer, and has found against the defendant, upon a state of evidence which warrants the finding. The evidence tended to show that Mr. O’Day agreed to allow the relator to inspect the books at the recess hour on the day following that on which the demand was made, and that when he went there for that purpose the right was denied him. Individual shareholders cannot, of course, appropriate the books of a corporation, for the purpose of inspecting them, to an unreasonable extent and to the detriment of the interests of the corporation and the rights of the other shareholders.' But the right of a shareholder to such an inspection being clear, it is not a sound view that the corporation can deny it upon the mere plea that i would be inconvenient to grant it. The convenience of the corporation and the convenience of the shareholder must, to some extent, yield to each other, and the law will not permit either, in the exercise of its rights, to act unreasonably toward the other.
VIII. The last defence set up by. the answer is, that, in a prior proceeding by mandamus by the same relator against Mr. O’Day, the vice president of the defendant company, and Mr. Graydon, its transfer agent, there was a judgment in favor of the said O’Day and Graydon; and this judgment is now pleaded in bar of the present action. The circuit court rightly held that this was no bar, and excluded from evidence the record of that action. The parties were not the same, and the question requires no discussion.
IX. So much of the argument as is directed to the-proposition, that mandamus is-not a proper remedy in a-/ case of this kind, might" be answered by numerous de*309cisions running back to the year books; but it is sufficient to say that we have decided the question against the view taken by the defendant in the recent case of State ex rel. v. Sportsman’s Park & Club Ass’n, already referred to, which, does not differ substantially from this case.
The judgment will be affirmed.
It is so ordered, with the concurrence of all the judges.