Cox v. Paul
Decision Date | 09 June 1903 |
Parties | COX v. PAUL. SAME v. TODD. SAME v. ISLAND MIN. CO. |
Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from Supreme Court, Appellate Division, Second Department.
Actions by Theodore Cox against William A. O. Paul, William R. Todd, and the Island Mining Company. From judgments of the Appellate Division (73 N. Y. Supp. 69) modifying, and affirming as modified, judgments for plaintiff, defendants appeal. Affirmed as to appellant Todd, and modified as to appellants Paul and the Island Mining Company.
Benjamin Scharps and David Scharps, for appellants.
William M. Bennett and Victor K. McElheny, Jr., for respondent.
The plaintiff was a stockholder in a foreign corporation, and brought three separate actions against the officers of the company and the corporation itself to recover penalties under section 53 of the stock corporation law (Laws 1892, p. 1840, c. 688) for the refusal of the president and secretary of the company to exhibit to him, at his request, the stockbook. The statute imposes a penalty of $250 upon each officer who refuses to exhibit the stockbook, and also a like penalty on the corporation. One of the actions was against Paul, the secretary; another was against Todd, the president; and the third was against the corporation. The three actions were tried and argued below together, and argued in this court as one case. The plaintiff had judgment upon the report of a referee in the three cases. He recovered one penalty against the secretary, two against the president, and three against the corporation, making $1,500 in penalties for refusal to allow him to inspect the stockbook.
The appeal presents but one question, and that is the right of the plaintiff to recover accumulated penalties in the same action. The statute, in terms, imposes the penalty, not for each and every, but for any, refusal on the part of the officers. The officers of the corporation were also officers of another corporation, and the office of the latter was the place where the officers were to be found, and where the book in question was kept. The corporation defendant in this case was organized in Michigan, but had transacted no business for 20 years, except to invest a fund of about $40,000 that was subject to distribution among the stockholders, of which the plaintiff was one. It is quite inconceivable that under the circumstances the plaintiff should desire in good faith to see the stockbook from day to day and every day; but, as the plaintiff understood that the fund in question was about to be distributed, it is easy to see that he might want to find out who the stockholders were. At all events, the learned referee found that the corporation was doing business in this state, and that the president was guilty of one refusal, the secretary of two, and that the corporation for such refusals had incurred three penalties. His judgment was unanimously affirmed on appeal, so that any question of fact litigated is conclusively determined in the plaintiff's favor, but the right to recover accumulated penalties is a question of law properly presented by the record.
In an action to recover a penalty the defendant is subject to arrest and imprisonment (Code, § 549), although he may not have done anything worse than to remain silent or inactive, not actually knowing what the legal consequences might be. Hence actions of this character are not to be enlarged beyond the express terms of the statute upon which they may be founded. In the case of a corporation like the one in question, having no business whatever except the care of a comparatively small fund, there can be no honest purpose in repeating demands from time to time, unless it be to accumulate refusals and penalties. That purpose, I think, is not to be imputed to the plaintiff in this case. He had no use for a daily inspection of the stockbook, and he was not making a demand for the purpose of piling up penalties. He wanted the stockbook for but one occasion, and he persisted in his demand until he was permitted to inspect it. He repeated his request for two or...
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