State ex rel. Holmes v. Doe Run Lead Co.
| Decision Date | 15 July 1915 |
| Docket Number | 14855 |
| Parties | STATE ex rel. HOLMES v. DOE RUN LEAD CO. et al |
| Court | Missouri Court of Appeals |
Leighton Shields, of St. Louis, for relator.
E. A Rozier, of Farmington, and Nagel & Kirby, of St. Louis for respondents.
This is an original proceeding in mandamus. The relator is the owner of the shares if the capital stock of the respondent. Doe Run Lead Company, a corporation organized under article 7, c. 33, Revised Statutes 1909, and seeks an inspection of the books, records, etc., of the company, averring prior demand therefor and respondents' refusal to permit the same. In accordance with the petition therefor, the alternative writ commands the respondents, the corporation and its secretary, to give the relator, his agents, etc., access to and opportunity to examine "all the books and records of said Doe Run Lead Company, including the stock book, transfer book, cash book, journal, ledger, correspondence and papers relating to the transfer of 3,000 shares of stock to the Farmers' & Miners' Trust Company, and relating to the loaning of the funds of the Doe Run Lead Company to the St. Joseph Lead Company, together with the right of said agent or agents or relator's stenographer to make extracts and memoranda from said books, records, and documents of the company, between the hours of 9 a.m. and 5 p.m. on week days, beginning with the receipt of this writ, and to continue until the relator shall be able to complete such examination" or that respondents show cause on the return day of the writ why they should not do so.
The return of respondents sets up at great length alleged facts going to show that the relator's demand was for an improper purpose, and that relator was actuated therein by malicious motives. It is alleged that prior to September 10, 1913, relator owned a substantial amount of the stock of respondent company, and also of the St. Joseph Lead Company, which companies owned and operated neighboring mining properties and plants in St. Francois county, Mo.; that in 1912 and 1913 relator made a very extended investigation into the affairs of both of these companies, and was given access to all of the books, records, and papers of the company; that he thereupon instituted an action against respondent company, its officers and directors, and that during the pendency thereof a joint committee of the stockholders of both corporations was appointed, relator's attorney being a member thereof, which committee made a further extensive examination into the affairs of both companies; that in accordance with the recommendation of said committee relator dismissed his suit, on payment of a substantial sum to him, to cover counsel fees and expenses, agreeing to thereafter refrain from further litigation with respect to the prior management of said companies, or further hostile acts in the premises; that relator thereupon transferred all of his stock in respondent company to the St. Joseph Lead Company, and after January 1, 1914, ceased to own any stock in respondent company; that he became a director in the St. Joseph Lead Company, but thereafter instituted legal proceedings against that company; and that "since that time he has been constantly engaged in a systematic course of annoyance and harassment, * * * and is now prosecuting numerous suits of various kinds all intended solely to harass, and annoy said companies, their officers and directors." And it is alleged that relator purchased the 5 shares of stock now owned by him in respondent company for the sole purpose of aiding him in carrying on his "campaign of hostility and harassment," and that this proceeding is not instituted in good faith. And it is averred that the transfer of the 3,000 shares of stock by respondent company, referred to in the alternative writ, occurred more than six years prior to relator's demand aforesaid, and that the facts regarding said transfer were fully known to relator.
The cause is now before us upon the demurrer of relator to the return. Since the filing of the return and demurrer thereto the alternative writ has been amended, upon relator's application therefor, by striking out the words "records," "correspondence and papers," and "records and documents," as they respectively occurred in the writ as issued; so that, as the alternative writ now stands, it commands respondents merely to permit an inspection of the books of respondent company, including the "stock book, transfer book, cash book, journal, and ledger, relating to the transfer of 3,000 shares of stock to the Farmers' & Miners' Trust Company, and relating to the loaning of the funds of the Doe Run Lead Company to the St. Joseph Lead Company."
We have refrained from setting out in full the lengthy averments of the return. The facts therein, well pleaded, are of course confessed by the demurrer; and it is sufficient to say that, with such facts admitted in the case, we would not be disposed to enforce the common-law right of inspection. At common law the stockholder's right to examine the books, records, and papers of the corporation is not an unqualified right, and is to be enforced only where a stockholder's demand is made in good faith and for a proper purpose, for reasons connected with his rights as a stockholder. See State ex rel. Haeussler v. Insurance Co., 169 Mo.App. 354, 152 S.W. 618; State ex rel. English v. Lazarus, 127 Mo.App. 401, 105 S.W. 780; State ex rel. Johnson v. Transit Co., 124 Mo.App. 111, 100 S.W. 1126; Venner v. Chicago City Ry. Co., 246 Ill. 170, 173, 92 N.E. 643, 138 Am. St. Rep. 229, 20 Ann. Cas. 607.
The averments of the return were aimed chiefly at the allegations of the alternative writ which took it beyond the terms of our statute here applicable, viz., section 3349, Rev. Stat. 1909 and made relator's case rest upon the common-law right of a stock-holder. By the amendment, however, the alternative writ is brought within the confines of the statute. As to the propriety of such amendment there can be no doubt. See State ex inf. v. Kansas City Gas Co., 254 Mo. 515, 530, 163 S.W. 854; State ex rel. v. Hudson, 226 Mo. 239, 264, 126 S.W. 733; State ex. rel. v. Baggot, 96 Mo. 63, 71, 8 S.W. 737; State ex rel. G. W. Hendricks v. Adair County Court, 177 Mo.App. 12, 163 S.W. 279. It is true that it was formerly held in this state, following the early common-law doctrine on the subject, that the peremptory writ must conform strictly and literally to the alternative writ, and that, if the court is not warranted in granting the precise relief, in its fullest terms, specified in the alternative writ, the peremptory writ must be denied. See State ex rel. Attorney General v. Kansas City, etc., R. R. Co., 77 Mo. 143; State ex rel. v. Davis, 54 Mo.App. 447. And this doctrine is said to still prevail where no attempt whatever is made to amend the alternative writ. See State ex rel. v. Bank, 174 Mo.App. 589, 163 S.W. 945; State ex rel. Hendricks v. Adair County Court, 177 Mo.App. 12, 163 S.W. 279. But the modern practice is quite liberal respecting amendments. The statute (section 1864, Rev. Stat. 1909) makes special provisions therefor in mandamus; and, at least where request in some form is made therefor, it is clearly proper to amend the alternative writ in order that it may not in terms go beyond the relief...
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