State, ex rel. Charvat v. Sagl
| Decision Date | 14 February 1930 |
| Docket Number | 27144 |
| Citation | 229 N.W. 118,119 Neb. 374 |
| Parties | STATE, EX REL. JAMES V. CHARVAT, APPELLEE, v. ANTON SAGL ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Lancaster county: ELWOOD B CHAPPELL, JUDGE. Affirmed as modified.
AFFIRMED AS MODIFIED.
Syllabus by the Court.
" A mandamus proceeding in Nebraska is an action at law." State v. Farrington, 86 Neb. 653, 126 N.W. 91.
At common law a stockholder has the right to inspect the books of a corporation at reasonable times and for proper purposes. The Nebraska statutes are silent on that subject. Therefore the common-law rule is in effect here and a stockholder has a right to inspect the books of a state bank at reasonable times and for proper purposes.
Mandamus is the proper form of remedy to enforce the right of a stockholder in a state bank to inspect the books and records of the corporation.
Higgins v. Case Threshing Machine Co., 95 Neb. 3, 144 N.W. 1037, 1039.
Appeal from District Court, Lancaster County; Chappell, Judge.
Mandamus by the State, on the relation of James V. Charvat, against Anton Sagl and another. From a final order allowing a peremptory writ of mandamus in favor of relator, respondents appeal. Affirmed and modified.
Richard O. Johnson and Charles E. Matson, for appellants.
George I. Craven, contra.
Heard before GOSS, C. J., ROSE, GOOD, THOMPSON, EBERLY and DAY, JJ., and LANDIS, District Judge.
Respondents appeal from a final order, made May 11, 1929, allowing a peremptory writ of mandamus in favor of James V. Charvat, the relator. This writ commands the respondents to allow relator, "accompanied by an attorney and an accountant, or either or both," to examine all books and records of the bank since May 7, 1923, in any way relating to certain specified matters.
Relator's connection with the Farmers & Mechanics Bank of Havelock began in 1922. He was its president until the spring of 1926, when another Havelock bank was consolidated with it. he then became vice-president and director of the bank but ceased to be an active executive and moved to Milligan, Nebraska. About the middle of April, 1928, the bank became impaired and was closed until about May 1, 1928, and reorganized. Relator had owned about three-fifths of its 250 shares of stock. By the reorganization plan all of the shares were canceled and fresh money to the amount of $ 50,000 was paid in, partly by the former stockholders and partly by new ones, each furnishing two dollars for one of the par value. Relator paid in $ 1,000 and thereafter and at the time of trial owned five shares but ceased to be an officer. Incidentally, we were told by counsel on the oral argument that the bank was again taken over by the banking department late in June, 1929, and is now under the control of a receiver.
While relator was an officer of the bank, certain real properties were taken by the bank from time to time as security. Some of the titles, at least, were taken in relator's name and the property dealt with as to third parties as if it were his, but most, if not all, of the accounts kept on the bank records; so that, particularly as between the bank and himself, he was concerned as to the status of such accounts and in the securing and preservation of evidence to show that he was not acting for himself but as trustee for the bank in connection with these items. At the time of the trial some, but not all, of these properties were in litigation.
It seems from the evidence that the bank gave him permission personally to examine the records and accounts of the bank, but when, on November 17, 1928, he orally requested to examine them with the aid of his attorney, and when, on November 23, 1929, a very complete written demand, shown in the evidence, was made on the bank to allow an examination, not only as to the specified trust items, heretofore referred to, but also "to ascertain and determine the true condition of the affairs of said Farmers & Mechanics Bank, Havelock, Nebraska, a corporation, and of the management of its business, the value and nature of said stockholder's interest thereon, and the manner, skill and fidelity with which his interests as a stockholder are and have been guarded and protected," the demands, in the terms in which they were put, were refused. The officers of the bank felt that, in the current nervous state of the customers of banks, an examination participated in by others than the relator might embarrass the bank. This suit followed upon its refusal and was tried on the pleadings supported by evidence.
"A mandamus proceeding in Nebraska is an action at law." State v. Farrington, 86 Neb. 653, 126 N.W. 91; State v. Porter, 90 Neb. 233, 133 N.W. 189; State v. Farmers' Irrigation District, 116 Neb. 373, 217 N.W. 607. So a defeated party, in a mandamus proceeding, must file a motion for a new trial in the trial court in order to review facts upon which he was refused relief. Respondents duly filed their motion for new trial in the district court and it was overruled. The judgment of the district court from which respondents appealed carefully limited the right of inspection of the bank's records by relator, accompanied by an attorney and accountant, to those records having to do with the so-called trust matters. It specified the particular properties so involved. Indeed, it provided that any other information so obtained "which has no relation to said property and said causes of action shall not be disclosed to any person or persons whatsoever for any purpose." The record shows no exception taken by the relator to this order by motion for a new trial or otherwise and shows no cross-appeal by him. So, while much of the briefs and oral arguments were devoted to the legal right of relator as a stockholder to an inspection of the records of the bank to ascertain the condition of the bank and the manner, generally, with which its officers have discharged their duties, we cannot give the relator any relief as to that part of the judgment which excluded him from an examination of the records of the bank generally. We shall consider that phase of the law only as to its effect on the relief the trial court actually granted him.
In some states the statutes provide specifically for inspection of the records of a corporation by a stockholder. Our statutes are silent on that subject.
At common law a stockholder has the right to inspect the books of a corporation at reasonable times and for proper purposes. Cook, Stock and Stockholders (3d ed.) sec. 511; 6 Thompson, Corporations (3d ed.) sec. 4525; cases in notes in 45 L.R.A. 446, and 20 L. R. A. n. s. 185; Varney v. Baker, 194 Mass. 239, 80 N.E. 524; Klotz v. Pan-American Match Co., 221 Mass. 38, 108 N.E. 764; Guthrie v. Harkness, 199 U.S. 148, 50 L.Ed. 130, 26 S.Ct. 4; Woodworth v. Old Second Nat. Bank, 154 Mich. 459, 117 N.W. 893.
In Guthrie v. Harkness, supra, the United States supreme court affirmed a judgment of the supreme court of Utah, ordering a national...
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