Hub Const. Co. v. New England Breeders' Club

• Decision Date: 29 June 1907
• Citation: 74 N.H. 282,67 A. 574
• Parties: HUB CONST. CO. v. NEW ENGLAND BREEDERS' CLUB et al.
• Court: New Hampshire Supreme Court

67 A. 574

74 N.H. 282

HUB CONST. CO.

v. NEW ENGLAND BREEDERS' CLUB et al.

Supreme Court of New Hampshire. Merrimack.

June 29, 1907.

Transferred from Superior Court.

Petition for mandamus by the Hub Construction Company against the New England Breeders' Club and Henry F. Hollis, to compel defendant Hollis, as clerk of the corporation defendant, to produce for examination certain corporate records, accounts, and papers used by petitioner in support of a claim against the corporation. The writ was granted against the exception of defendant Hollis, and the case was transferred to the Supreme Court. Exceptions overruled.

The petition alleges that the plaintiffs are creditors of the Breeders' Club, having an overdue and unpaid demand against that corporation; that the defendant Hollis is clerk of the corporation and has in his possession certain records, accounts, and papers of the corporation which have relation to the plaintiffs' demand, namely, the clerk's records, the names of associate grantees, and their respective dates of election, and the names of stockholders, and when each became or ceased to be such; and that he refuses to allow inspection thereof by the plaintiffs' attorneys. The prayer of the petition is that Hollis be ordered to allow the plaintiffs' attorneys, or one of them, to inspect said records, accounts, and papers. The Breeders' Club was defaulted. Hollis appeared and filed a motion to dismiss, which was denied without exception. The plaintiffs then filed an amendment to their petition, stating that they desired, through their attorneys, to inspect all records, accounts, and papers belonging to the Breeders' Club, for the purpose of obtaining, among other things, the following information: (1) The names of all grantees and associate grantees, the residence of each, when elected, how long each was connected with the corporation, and what votes or acts each participated in with reference to incurring any debts or obligations against the corporation. (2) The name and residence of each director, when elected, and how long he remained in office. (3) A list of the stockholders and their respective residences, and when certificates of stock were issued to each. (4) The amount of debts, liabilities, and contracts of the Breeders' Club, and when each debt, liability, or contract was incurred. (5) A list of all the officers of the Breeders' Club, and when each one was elected, and how long he remained in office. (C) In what way was the capital stock paid in, and has any part of the same been withdrawn or refunded to any stockholder. (7) The total amount of debts, contracts, and liabilities incurred by any officers, down to and including July 30, 1905. (8) The value of the property of the club on July 30, 1905, and the value of the property at the present time. (9) The date of each directors' meeting, and the names of directors who acted in the same. (10) If the capital stock was paid into the club, when was it paid, and in what form. (11) A list of the officers or agents of the Breeders' Club, with the date of their election, the scope of their duties, and the terms during which they, respectively, held office or acted as such officers or agents, from the date of the incorporation of the club down to the present time. The defendant Hollis then answered, alleging that "he has no records, accounts, or papers of said New England Breeders' Club touching the information specified in his possession, the discovery or inspection of which may not expose him to pains and penalties, or subject him to some forfeiture or something in the nature of forfeiture, or tend to convict him thereof, or lead to a violation of professional confidence." A hearing was had upon this answer, and the defendant Hollis was ordered to answer further, plead, or demur to every material allegation of the petition. To this order he excepted, and demurred to the amended petition, stating the following grounds: (1) That the discovery or relief sought may subject said defendant to pains and penalties, or to some forfeiture, or something in the nature of forfeiture; (2) that said bill does not allege any suit pending, or to be brought, in which the discovery sought would be material; (3) that said bill does not describe with sufficient accuracy the records, accounts, and papers, or the parts of the same, which it desires to inspect; (4) that said bill does not show by clear averment the materiality of the records, accounts, and papers sought to be disclosed; (5) that said bill is not incidental to any relief which said court has the right to grant; (6) that said plaintiff has no right to compel the submission of any records, accounts, and papers in said defendant's possession to general inspection, or examination, with a view to find evidence to be used in other suits or prosecutions; (7) that said plaintiff does not show that it is fairly entitled to the evidence sought in order to enable it properly to prepare and try its case; (8) that said plaintiff has a full, adequate, and complete remedy at law by special statute; (9) that said bill does not state a case coming within the principles of equity jurisprudence. The demurrer was overruled, and the defendant Hollis was ordered to submit for inspection of the petitioners' attorney all the records, accounts, or papers relating to the overdue and unpaid demand of the petitioners which are in his hands and possession as clerk of said corporation, or which belonged to the records and files of the corporation.

Taggart, Dickinson, Wyman & Starr, for plaintiffs. Harry J. Brown, for defendant Henry P. Hollis.

PARSONS, C. J. Mandamus is the appropriate remedy by which to enforce the right of corporate stockholders and members to an inspection of the books and records of the corporation and of creditors of the corporation in cases where such right is given by statue. 10 Cyc. 961, § 19b; High, Ex. Rem. §§ 308, 312; 2 Spell. Ex. Rel. § 1610; Queen v. Railway, 3 E. & B. 784. The proceeding is therefore to be considered as an application for such writ, and not as a bill of discovery. This is especially clear in this state, since the original of the statute under consideration was adopted in 1830 (Laws 1830, p. 10, c. 13, § 1), when, whatever may be the fact as to the existence of equitable principles as a part of the common law of the state, there was no court with general chancery powers, and the accepted construction of the law was that the court had no chancery power except what was specifically conferred by statute. Reynolds v. Fiber Co., 71 N. H. 332, 333, 51 Atl. 1075, 57 L. R. A. 949, 93 Am. St. Rep. 535; Wells v. Pierce, 27 N. H. 503, 512; Dover v. Portsmouth Bridge, 17 N. H. 200, 212. It is not probable, as the law was then understood, that in 1830 the Legislature in granting a right of inspection of the votes and proceedings of corporations to creditors whose demands were unpaid contemplated a proceeding in equity for discovery, general authority for which was not specifically conferred upon the court until 12 years later. Reynolds v. Fiber Co., supra; Laws 1828, Nov. Sess. p. 390, c. 95, § 9 (Act Jan. 2, 1829); Laws 1832, p. 75, c. 89, § 9; Rev. St. 1845, c. 171, § 6. As the proceeding is not a bill for discovery, or a petition in the nature of such a bill, it is immaterial whether the allegations of the petition are...