Court Opinion

ID: 6737259
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:27.480311+00
Date Added: 2024-06-11T16:01:49.943559
License: Public Domain

SpaldiNG, Oh. J.
The defendants in this case are president and secretary-treasurer of the Equity Co-operative Exchange, a domestic corporation organized to handle and deal in grain and farm products for profit, and having a paid-up capital cash stock of $23,675, and *264$13,300 paid by notes. Each of the plaintiffs is a stockholder in said corporation. As between the plaintiffs, Greenfield and Crumpton, and the defendants, there exists a controversy as to the amount of indebtedness owed by the Equity Exchange to said plaintiffs. All three plaintiffs, by their separate attorneys, made application for leave to inspect the books of the exchange. When such inspection was in progress, the defendants refused to permit plaintiffs to complete it, whereupon this proceeding was instituted in the district court of Cass county to compel the defendants to permit plaintiffs to complete their examination of the books of the corporation.
Detailed reference need not be made to the very lengthy pleadings. The taking of testimony consumed several days, and the typewritten record of testimony covers 394 pages. In addition to this, the exhibits cover many additional pages of closely printed matter. The plaintiffs seem to have proceeded in the introduction of testimony on the theory that they would ascertain in the proceeding, if by no other means, the financial condition of the exchange and its methods of doing business. The defendants introduced hundreds of pages of evidence in an attempt to show what had been said at congressional and legislative investigations, at farmers’ meetings, and in other places; some of it, if competent, having a tendency to show that the Chamber of Commerce of Minneapolis, and its members, were not altogether fair in their dealings with customers; the whole record showing conclusively that strong-rivalry or competition exists between the exchange and said Chamber of Commerce, and that the exchange was trying to instruct the farmers that it was to their interest to ship their grain to it.
The defendants pleaded that said Chamber of Commerce was engaged in an unlawful conspiracy with the Chamber of Commerce of Chicago and the Board of Trade of Duluth to maintain a monopoly in the grain trade, and offered testimony to show that an inspection of the books might be used to aid the Minneapolis Chamber in its competition with' the exchange. The statute of this state regarding the right of a stockholder to inspect and examine the records and books of the corporation in which he holds stock is found in § 4560, Comp. Laws 1913, and reads as follows: “. . . All such records shall be open to the inspection of any director, member, or stockholder or creditor of the corporation. . . . Such stock and transfer book must be kept open *265to tbe inspection of any stockholder, member or creditor. . . .” § 10016, Comp. Laws 1913, provides: “Every officer or agent of any corporation having or keeping an office within this state, who has in his custody or control any book, paper, or document of such corporation, and who refuses to give to a stockholder or member of such corporation, lawfully demanding, during office hours, to inspect or take a copy of the same or any part thereof, a reasonable opportunity so to do, is guilty of a misdemeanor.” As we construe .the briefs and arguments of counsel, there is little, if any, controversy as to the meaning of § 4560, supra, except that appellants insist that it should be construed only as a declaration of the‘common law, and that the object and motive of the stockholder, who desires to make the inspection, may be inquired into, whereas the respondents contend that it does not admit of such inquiry. We are satisfied that, under the great weight of authority, it is mandatory. However, we may add that courts will not lend their aid ,to parties seeking to perpetrate a crime, when it is clear that -they are endeavoring to make use of the examination to aid them in so doing. Many authorities are cited by counsel, both with reference to the common-law rule and the rule laid down by the different courts, under statutes like or similar to the foregoing provisions of our own. Where the terms of the statute are mandatory, like ours, it is immaterial that the stockholder desires to inspect the books in the interest of’ a rival corporation, or to aid him in securing business which otherwise might go to the corporation whose books he seeks to inspect, or to get information on which to predicate litigation which he may desire to institute against the company. Kimball v. Dern, 39 Utah, 181, 35 L.R.A.(N.S.) 134, 116 Pac. 28, Ann. Cas. 1913E, 166, is a case in which the facts were almost identical with the facts in the case at bar, and the supreme court of Utah, in a well-considered opinion, sustains the right of the stockholder to examine the books, and holds that his object does not forfeit his statutory right. Weihenmayer v. Bitner, 88 Md. 325, 45 L.R.A. 456, 42 Atl. 245, is another case where the stockholder desired to inspect the books for the purpose of getting information to be used in the interest of a rival corporation and to the injury and loss of the corporation whose books he sought to examine, and it was held that he had a right to make the examination. See also Re Steinway, 159 N. Y. 250, 45 L.R.A. 461, 53 N. E. 1103, where in such a case it is *266held that, when an absolute right is conferred by statute, nothing is left to the discretion of the court. Mutter v. Eastern & M. R. Co. L. R. 38 Ch. Div. 92, 57 L. J. Ch. N. S. 615, 59 L. T. N. S. 117, 36 Week. Rep. 401, is a case where the applicant acquired the legal title of the stock for the sole purpose of enabling him to inspect the records for the benefit of a rival concern, yet mandamus was granted by the trial court and affirmed on appeal, on the ground that it was an absolute statutory right. See Cincinnati Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 48 L.R.A. 732, 78 Am. St. Rep. 707, 56 N. E. 1033. Also see authorities cited in Kimball v. Dern, supra; Johnson v. Langdon, 135 Cal. 624, 87 Am. St. Rep. 156, 67 Pac. 1050; Hobbs v. Tom Reed Gold Min. Co. 164 Cal. 497, 43 L.R.A.(N.S.) 1112, 129 Pac. 781. At common law the rule is that a stockholder has the right of inspection, when he desires to do so for proper purposes and with proper motives. It appears that this rule resulted in the officers or stockholders sitting in trial on the motives of the applicant for desiring to make the examination, and in the case of minority stockholders it frequently resulted in their being deprived of their lawful rights to inspect or examine property in which they owned an interest. The statutory provisions were undoubtedly enacted for the protection of minority stockholders, and to prevent the delays incident to determining through legal proceedings the motives of those desiring to examine the corporate records. It is not for courts to read into a plain statute qualifications which would destroy the meaning of its plain language.
We need not enter into further discussion of the authorities. It would serve no purpose, in view of the issues herein. The trial court found that the plaintiffs sought the examination of the books of the exchange for lawful purposes and at a proper time. After carefully examining the hundreds of pages of evidence taken, most of which is wholly incompetent for any purpose whatever, we are satisfied that there is sufficient competent evidence to sustain the findings of the trial court. The question before us is not one of the preponderance of evidence, but whether there is any substantial competent evidence to sustain the findings. Eor latest authority on this, see State ex rel. Trimble v. Minneapolis, St. P. & S. Ste. M. R. Co. 28 N. D. 621, 150 N. W. 463. It is patent that it would be impossible to set out the evidence in detail. Even such as is competent is so intermingled with hearsay, as to con*267troversies between outside parties and business interests, that it would require the work of 'weeks to separate it and place the competent evidence by itself. All that it is necessary to decide here is the question ■of evidence to sustain the findings. Having determined that there is ample evidence to sustain them, we can do naught but affirm the trial court, which granted the writ commanding the defendants to peirmit a complete examination of the books of the corporation of which they .are officers. It is affirmed.