Cincinnati Volksblatt Co. v. Hoffmeister

• Decision Date: 06 March 1900
• Citation: 56 N.E. 1033,62 Ohio St. 189
• Parties: CINCINNATI VOLKSBLATT CO. v. HOFFMEISTER.
• Court: Ohio Supreme Court

56 N.E. 1033

62 Ohio St. 189

CINCINNATI VOLKSBLATT CO. v. HOFFMEISTER.

Supreme Court of Ohio.

March 6, 1900

Error to superior court of Cincinnati.

Action to Albert F. Hoffmeister against the Cincinnati Volksblatt Company. Judgment for plaintiff. Defendant brings error. Affirmed.

The defendant in error, Albert F. Hoffmeister, commenced his action against the Cincinnati Volksblatt Company, in the superior court of Cincinnati, by the filing of a petition in which it is alleged that: ‘The defendant is a corporation organized under the laws of the state of Ohio. The plaintiff is a stockholder in said corporation, and is the owner and holder of five (5) shares of its capital stock of the face value of five hundred ($500) dollars each. The plaintiff has requested the defendant to allow him to inspect the books and records of said corporation, and to fix a reasonable time for said inspection. Defendant has refused such request, and refuses to allow the plaintiff to inspect its books and records at any time. Wherefore the plaintiff prays that the defendant be enjoined from refusing to allow him to inspect its books and records, and prays the court for such other and further relief as he may be entitled to at law or in equity.’ A demurrer to the petition being overruled, the defendant company answered, admitting its corporate existence, and that plaintiff is the owner of the number of shares of stock alleged in the petition, and denying other allegations; also averring that the plaintiff's action was not brought in good faith, but to compel defendant to purchase the stock held by him under a threat to apply for the appointment of a receiver for the company; also that plaintiff is interested in a rival company, a competitor of defendant, and the application is made in bad faith, for the purpose of injuring defendant, and to compel it to purchase the stock; also that plaintiff is not, under the allegations of the petition, entitled to any relief, and that the court has no jurisdiction of the action. A reply took issue with the new matter alleged. Upon trial the court found the issues for the plaintiff; that he is entitled to inspect any of the books and records of defendant at any reasonable time, and that he may make such inspection by himself or by agent, bookkeeper, or accountant, and may take copies of any of said books and records; and judgment was entered enjoining defendant from preventing an inspection of any of the books and records of defendant, at any reasonable time, and the taking of copies thereof by the plaintiff himself, or by his agent, bookkeeper, or accountant. This judgment was affirmed by the general term of the superior court, and the company brings error.

Syllabus by the Court

1. Injunction is the proper form of remedy to enforce the right of a stockholder in a private corporation, given by section 3254, Rev. St., to inspect the books and records of the corporation.

2. The right to inspect does not depend upon the motive or purpose of the stockholder in demanding such inspection, and a petition which shows that the plaintiff is a stockholder that he has requested the defendant to allow him to inspect the books and records of the corporation, and fix a reasonable time for the same, which request has been refused states a cause of action.

3. As incident to such right is the right to have such inspection by a proper agent, and to take copies from such books and records.

Charles W. Baker, for plaintiff in error, cited the following authorities: Pratt v. Cutlery Co., 35 Conn. 36, 42; Foster v. White, 86 Ala. 467,6 So 88;American Asylum v. Phoenix Bank, 4 Conn. 172, 178; Com. v Phoenix Iron Co., 105 Pa. St. 111; Lyon v. Screw Co., 16 R.I. 472, 17 A. 61;People v. Lake Shore & M. S. Ry. Co., 11 Hun, 1; Sage v. Same, 70 N.Y. 220;Putnam v. Valentine, 5 Ohio 187;Village of Van Wert v. Wbster, 31 Ohio St. 420;Spangler v. City of Cleveland, 43 Ohio St. 526,3 A. 365.

Alfred B. Benedict and Jerome D. Creed, for defendant in error, cited the following authorities: Holland v. Dickson, 37 Ch. Div. 669; Prender v. Lushington, L. R. 6 Ch. Div. 70; Davis v. Flagg, 35 N.J.Eq. 491;McDonald v. Smalley, 1 Pet. 620, 7 L.Ed. 287;State v. St. Louis & S. F. R. Co., 29 Mo.App. 301; State v. Sportsman's Park & Club Ass'n, Id. 326; Martin v. William J. Johnston Co. (Sup.) 12 N.Y.S. 844;State v. Standard Oil Co., 49 Ohio St. 137, 30 N.E. 279;People v. North River Sugar-Refining Co., 121 N.Y. 582, 24 N.E. 834,9 L.R.A. 33; Kelsey v. Fermentation Co. (Sup.) 3 N.Y.S. 723;Foster v. White (Ala.) 6 So. 78;Mitchell v. Rubber Co. (N. J. Ch.) 24 A. 407;Phoenix Iron Co. v. Com., 113 Pa. St. 563, 6 A. 75;State v. Bienville Oil-Works Co., 28 La. Ann. 204.

SPEAR, J. (after stating the facts).

It is argued in support of the petition in error that the plaintiff has mistaken his remedy; that, if he has any, it is by mandamus, and not by injunction; and that the superior court is without jurisdiction, that court having no jurisdiction in mandamus. Also that sufficient facts are neither stated in the petition nor proven to entitle the plaintiff to any injunction whatever, and that, under any possible showing he was not entitled to the sweeping order that the court made.

1. The proper form of action. As to mandamus our statute (section 6741, Rev. St.) provides: ‘Mandamus is a writ issued in the name of the state, to an inferior tribunal, a corporation, board, or person, commanding the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station.’ And by section 6744 it ‘must not be issued in a case where there is a plain and adequate remedy in the ordinary course of the law.’ In some jurisdictions the remedy of mandamus is given to right wrongs similar to the one here complained of. We are not, however, concerned with the law of other states, but with that of our own, and it seems hardly necessary to take space to demonstrate that in Ohio mandamus is not, but that injunction is, the proper remedy in a case of this nature. The complaint of plaintiff is that he is unlawfully prevented from the enjoyment of a right which is incident to his ownership of stock, and his remedy is that the corporation be compelled to desist from such deprivation. This does not call for the performance of an act which the law specifically enjoins. It is, on the other hand, an act which may be compelled by injunction in the common and ordinary exercise of that power. There is, therefore, a plain and adequate remedy open to him in the ordinary course of the law, for, within the meaning of this statute, an equity proceeding is a proceeding of that character. There is, in the opinion of the writer, another, and perhaps better, reason than the foregoing for the conclusion announced ( Fraternal Mystic Circle v. State, 61 Ohio St. 628, 48 N.E. 940), but the one given is deemed sufficient for the purposes of this case (Freon v. Carriage Co., 42 Ohio St. 30;State v. Carpenter, 51 Ohio St. 83, 37 N.E. 261).

2. It being determined that the action was properly brought, and that the court had jurisdiction, is the petition sufficient or must the plaintiff, before he can have standing in court, set out what his reasons for desiring the inspection asked are, and show that he is actuated by proper motives, and in the pursuit of justifiable ends? Such is the contention of plaintiff in error. The statute is (section 3254): ‘And the books and records of such corporation shall at all reasonable times be open to the inspection of every stockholder.’ But it is insisted that this provision is not intended to enlarge the right, but is a mere affirmation of the common-law rule, and that that rule embodies many conditions, among them that the stockholder must allege and prove that he is acting in good faith. Without stopping to discuss the extent of, and the limitations upon, the rule as established by the common law (for the holdings are at variance upon it), we inquire what reason there is for saying that the intent ...