Court Opinion

ID: 5216515
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:24:15.25552+00
Date Added: 2024-06-11T08:27:26.988430
License: Public Domain

McLaughlin, J.:
The plaintiff seeks to recover from the defendant, a foréign stock corporation — not a moneyed or railroad corporation — the penalty prescribed in section 33 of the Stock Corporation Law (Consol. Laws, chap. 59; Laws of 1909, chap. 61). That section provides, in substance, that every foreign stock corporation • having an .office for the transaction of business in this State, except moneyed and railroad corporations, shall keep therein a stock book con- . taming the names and addresses of its stockholders, etc.; which shall' be open daily, during business hours, for the inspection of its stockholders; that if such corporation has in this State a transfer agent the book may be kept at the office of such agent; and that “ for any refusal tq allow such book to. be inspected, such corporation and the officer or agent so refusing shall each forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made.”
From the agreed facts it appears that the-defendant, on the 14th of December, 1909, had an office for the transaction of business at Yo. 202 Franklin street, in the city of Yew York. This, was what is designated as .a “sales office” and was.in' charge of one Eiswald, who was the principal sales agent of the corporation in the State of Yew York, but was not an officer, director or stockholder. On the day in question the plaintiff, who owned one share of stock of the corporation, applied to Eiswald at this office during business hours, to be allowed to inspect the stock book of the corporation. The corporation had no transfer agent in the State and did not then Have- and never had a stock book or any books or papers containing the information specified in the section of the statute above quoted, either at its said office-or anywhere else within the State. Eiswald informed the plaintiff that he was unable to comply with the latter’s .request for this reason and the plaintiff now seeks to recover from the corporation the statutory penalty of $250.
*523It is expressly stated that the office in charge of Eisivald was maintained for the transaction of business and no claim is made’that the corporation was not required by the statute to-keep a stock book there for the inspection of its stockholders. That the plaintiff was entitled to inspect the stock book is conclusively settled by the case of Henry v. Babcock & Wilcox Co. (196 N. Y. 302), and it is not claimed that his request to be permitted to do so was not properly made. The defendant being bound by the statute to keep a stock book .there for his inspection, I see no escape from the conclusion that its failure to comply with his request was a “ refusal to allow such book to be inspected,” which makes it liable for the penalty.
It is strenuously urged by the defendant that there can be no such thing as a refusal to permit an inspection when there is no book to be inspected and' that the statute does not prescribe any penalty for the mere failure to keep such a book. But as was said in the case above cited, “ The language of the statute is plain and mandatory. It recognizes an absolute right in the stockholder and imposes an absolute duty upon the corporation and the custodian of the stock book. The law requires no statement or proof of any particular intent upon the part of the person demanding the inspection. He must be a stockholder and must prefer his request during business hours; that is all.” For a like reason it is equally immaterial what ground is made the basis of the corporation’s refusal to allow the book to be inspected. The statute imposes an absolute duty upon the defendant to keep a stock book at its office open to plaintiff’s inspection. The plaintiff had an absolute right to inspect such book and when defendant refused to grant him the right, it refused “ to allow.such book to be inspected” and whether it had or did not have such a book at its office is entirely immaterial.
The argument of the defendant is novel, to say the least. It has admitted that the corporation was bound to keep a stock book and to allow the plaintiff to inspect it, and for a refusal to allow him to do so a penalty attached. But it is urged with apparent, seriousness that by the simple expedient of- failing to comply with the first requirement of the statute, that is, to keep a book, it could by its own willful violation of the law render itself powerless to comply with the second requirement and plead such inability as an excuse for denying the plaintiff his right and for escaping the penalty, that *524is to say, it could by violating the statute with reference to keeping a book create a valid defense to an action to recover a penalty for failure to produce.it when called for. It is sufficient to say that the statute is not open to such construction. The defendant by its own act cannot repeal the. statute itself.
Judgment should, therefore, be directed for the plaintiff in the sum of $250, with costs.
Ingraham, P. J., Clarke, Scott and Miller, JJ., concurred.
Judgment ordered for plaintiff, with costs. Settle order on notice.