State ex rel. Watkins v. North American Land And Timber Company, Limited

• Decision Date: 01 January 1901
• Docket Number: 14,087
• Citation: 31 So. 172,106 La. 621
• Court: Louisiana Supreme Court
• Parties: STATE EX REL. J. B. WATKINS v. NORTH AMERICAN LAND AND TIMBER COMPANY, LIMITED

31 So. 172

106 La. 621

STATE EX REL. J. B. WATKINS v. NORTH AMERICAN LAND AND TIMBER COMPANY, LIMITED

No. 14,087

Supreme Court of Louisiana

January 1, 1901

APPEAL from the Fifteenth Judicial District, Parish of Calcasieu. -- Miller, J.

Thomas T. Taylor and Cline & Cline, for Relator, Appellant.

Pujo &amp Moss, for Respondent, Appellee.

OPINION

MONROE J.

STATEMENT OF THE CASE.

The relator, claiming as a stockholder, seeks to enforce, by mandamus, his right to inspect the books of the defendant corporation. To the proceeding, originally filed, an exception was interposed to the effect that it was directed against the manager of the company, alone, and that there had been no prayer for citation and no citation of the company, and, upon appeal to this court, the exception was maintained, and the case remanded for "amendment of the application * * * and in order that legal service may" (might) "be made of the order or writ calling the defendant into court," the costs of the appeal to be paid by the relator and those of the lower court to await final judgment.

State ex rel. Watkins vs. North American Land & T Co., 22 S. 910.

Thereafter the original petition was amended, and both petitions, taken together, allege in substance:

That relator resides in the State of Kansas, and that respondent is an English corporation, here represented by Arthur V. Eastman, who has been designated, agreeably to the law of this State, as the person upon whom process may be served, and who has established, at Lake Charles, in the Parish of Calcasieu, an office in which is kept "all the books of account, of sales of land, and all other transactions of said company, and all other books of every description and all accounts necessary to be kept for the information of said company, its stockholders and directors, and for the proper conduct and management of its business in this State;" that the relator is the owner of stock in said company of the par value of about $ 190,000, but, by reason of a rabal between the stockholders and directors in England is deprived of all voice, management and control in the direction of its affairs; and that, in order that he may be informed of its present condition and past transactions, and may so exercise his rights as to prevent mismanagement, correct abuses, extravagance and waste and protect himself from irreparable loss and injury, it is necessary that he should be allowed to inspect all the books, accounts, papers and correspondence of said company, and that application to that effect was made by his duly authorized agent and denied by the representative of the company. Wherefore relator prays the court to order the issuance of an alternative writ of mandamus, commanding the said North American Land and Timber Company, Limited, to appear and show cause why the relator should not be permitted to examine and inspect the record of the amount of capital stock subscribed and of transfers thereof, the names of the owners of stock, the amounts owned by them, respectively, the amount of stock paid and by whom, the amount of its assets and liabilities, together with all other books, papers, letters received and copies of answers thereto kept, used, received, sent and exchanged in the transaction of business by said respondent company," etc.

To this petition and the order to show cause made thereon the company excepts and pleads as follows:

"That respondent has not in its possession in its office at Lake Charles any of the books enumerated in Article 273 of the Constitution of 1898, or in relator's application, but that such books and all its other corporate records are kept in its office at London, England, the legal domicile created by the charter to which relator was one of the original subscribers; that the contract existing between relator and respondent by reason of relator's being a stockholder in said company was entered into in England, a foreign country; that relator is also a non-resident of the State of Louisiana, for which reason your Honorable court has no visitorial power of the organization of respondent company, its corporate functions, by-laws, or over the relations existing between respondent and its members and their respective rights and obligations arising under the law of said company's creation, for which cause your said Honorable Court is without jurisdiction of the subject-matter of the suit, and the remedy sought is beyond the reach of the court and not within the sovereign power of the State from which this court has its authority; * * * that Act 149 of 1890 does not subject the company to the jurisdiction of this court for any cause of action, but merely requires the appointment of an agent upon whom service of process can be made, or, in other words, it was not the intention of said act to give the court jurisdiction over causes of action accruing out of the State against a corporation created and existing beyond the limits of the State, and your Honorable court is without jurisdiction ratione materiae, unless the cause of action existed against the company independently of the mere fact of its being represented by an agent within the State."

Reserving the benefit of this exception, the respondent further pleads, in substance:

That since the filing of the original petition herein and the judgment thereon the relator, through the instrumentality of a receiver, appointed by the Circuit Court of the United States for the Western District of Louisiana, and through an expert, acting as his agent, obtained possession of all the books kept at its office in Lake Charles, inspected the same and made copious extracts and memoranda therefrom, and is not entitled to further investigation, and that the present application is made for no other purpose than to harass and annoy this respondent.

That respondent was organized in 1882, under the law of England, and that relator was one of its organizers and signers of its charter. That Article 126 of said charter provides that "the directors shall, from time to time, determine whether or to what extent and at what time and place and under what condition and regulations the accounts and books of the company, or any of them, shall be open to the inspection of the members, and no member shall have the right of inspecting any account or book or document of the company except as conferred by statute or authorized by the directors or by resolution of the company in general meeting." That relator does not allege that he has been granted the right claimed by statute or otherwise, as contemplated by said article, the provisions of which are binding upon him as a matter of contract.

That Article 147 of said charter provides that "If any dispute shall arise between the company and any of its members or any of the officers, directors or creditors, as such, touching any matter within the purview of these presents, the matter in dispute or difference shall be submitted for final decision to two arbitrators or their umpire, pursuant in all respects to the provisions in that behalf of the Common Law Procedure Act of 1854 or any then existing statutory modification thereof, and this article shall be deemed to be a submission by all the parties above referred to to arbitration, and may be made by any of the parties a rule of any division of the high court of justice; and the award of such arbitrators or their umpire shall be absolutely binding on all of said parties." And that the relator is bound thereby with respect to the matters involved in this proceeding.

And, reserving the benefit of said plea, respondent denies generally the allegations of relator's petition and avers that the only books in its possession in this State are such as are necessary to be kept by its agent, Austin V. Eastman, and that such books are not, in the eye of the law, corporate books and records, all of which latter are kept at its home office in London.

It appears from the evidence that the respondent company was organized in England in 1882, under the authority of certain acts of the British Parliament, and that the "Memorandum of Association," as also what are called "Articles of Association," constituting, together, its charter were signed by the relator, with other subscribers. The declared purposes for which the company is established are multifarious, including the buying and selling of lands in the United States of America, or elsewhere," the idea conveyed being that whilst operations may be conducted elsewhere, this country was the field immediately in view. The capital stock of the company was fixed at 500,000 pounds and subsequently reduced to 350,000 pounds, of which the relator appears to be the owner of 28 1/4%. Shortly after its establishment the company appointed the relator its agent and general representative in this country, and he held that position until 1896, when the present incumbent was appointed in his stead. In the meanwhile, though vast tracts of land had been purchased, and the company was registered as doing business and as having an office and an agent upon whom process might be served in this State, such of its books as are particularly specified in relator's petition have been kept in England and have never been brought within the State of Louisiana. Being asked his reason for wishing to inspect said books, relator, testifying as a witness in his own behalf, said: "I desire to inspect the books to see which land of the North American Land and Timber Company has been sold, and at what price it was sold, and upon what terms of payment. I have received the impression, from common report, that a very large portion of the land of the company that is susceptible of cultivation has been sold. * * * I want to inform myself of the exact situation,...