State v. Cities Service Company
| Decision Date | 07 February 1921 |
| Citation | 114 A. 463,31 Del. 346 |
| Court | Delaware Superior Court |
| Parties | THE STATE OF DELAWARE, upon the relation of William Theile, v. CITIES SERVICE COMPANY, a corporation existing under the Laws of the State of Delaware |
Superior Court for New Castle County, January Term, 1921.
RULE No. 141, May Term, 1920.
Petition and affidavit filed by State ex rel. William Theile for a rule to show cause why a peremptory writ of mandamus should not issue to Cities Service Company. Rule issued, which, upon return of personal service, was without objection made absolute, and the alternative writ issued. On motion the return to the alternative writ was amended. Motion to quash the return refused, and motion for issuance of peremptory writ denied. Exceptions noted, and, upon filing supersedeas bond and a ssignments of error, writ of error issued out of the Supreme Court.
The question raised by the proceeding is as to the right of the plaintiff to inspect and copy the stock ledger of the defendant, under Rev. Code 1915, § 1943 ().
The petition filed alleges, in substance, that the defendant is a corporation existing under the laws of the state of Delaware.
That the petitioner is the owner of one share of stock, registered in his name on the books of the company.
That during the regular business hours of December 4th and 5th, he went to the office of the company in this state and requested and demanded an opportunity to examine the original or duplicate stock ledger of the company containing the names and addresses of the stockholders and the number of shares held by them respectively, and was denied the opportunity.
The petitioner, being without other adequate remedy in the premises, prays for rule, etc., why a writ of peremptory mandamus should not issue commanding said corporation to permit petitioner, etc., to inspect and make copies of the original or duplicate stock ledgers of the said company etc., during the usual hours of business.
Upon the return of the rule and upon motion of plaintiff, the alternative writ of mandamus issued, made returnable Thursday, May 27, 1920. On May 27, 1920, the sheriff of Kent county made return of due service of said alternative writ. On June 12, 1920, the defendant filed its return and answer to the alternative writ.
The return of the defendant alleges, in substance, inter alia:
1. After alleging that the petitioner is the owner of one share of the preferred stock of the defendant corporation, and after setting out the number of shares of each class of stock outstanding, the number of shareholders, and the market price of the petitioner's share at the time he purchased it, it is averred that the plaintiff owned two shares of stock in the year 1916 which he disposed of after he was refused the right to inspect and copy the stock ledger; that he made application to inspect and copy the stock ledger of the defendant company a few days after he acquired the share of stock now owned by him; said stock having been acquired by him on the books of the company on the twentieth day of November, A. D. 1919, and the application to inspect and copy the stock ledger having been made on the fourth day of December, A. D. 1919; that the plaintiff is engaged in the business of procuring and selling for his own individual gain and profit lists of the names and addresses of the stockholders of various corporations; that he was engaged in the same business in 1916; that he is not a broker and is not engaged in the business of buying and selling stocks of the corporation defendant or of any other corporation; that he wishes to examine and copy the stock ledger of the defendant corporation, not for the purpose of acquiring any information relating to his stock interest or for the protection of the same, but for the sole purpose and with the sole intention of selling, for his individual gain and profit, copies of the lists of names and addresses of the stockholders of the defendant corporation to other persons to be used by said persons in circularizing the public in the effort to sell stocks of "other corporations" and that he purchased the one share of stock owned by him for the purpose aforesaid, etc.
2. It is alleged that Theile wishes to examine and copy the stock ledger of the defendant for the sole purpose and with the sole intention of selling for his own individual gain and profit copies of the letters and names and addresses of the stockholders of the defendant to the tax collectors of the various states in which the holders and owners of stock in the corporation defendant reside, to be used by the said tax collectors in checking up the correctness of tax returns filed by said stockholders, or for other purposes detrimental to the interest of the stockholders of this corporation, and, therefore, detrimental to the corporation, and that he purchased the one share of stock owned by him for the purpose aforesaid, etc.
3. It is alleged that Theile does not wish to examine the stock ledger, etc., for the purpose of engaging in the business of buying and selling stocks of the defendant corporation, for the purpose of buying and selling said stocks for himself individually, or for the purpose of in any way encouraging, promoting or facilitating the sale of the stock of the defendant, whether owned by him or otherwise, but that he purchased the one share of stock owned by him with the intent of selling copies of the stock lists of the defendant corporation for his own individual benefit, for purpose which will not promote the interest of this corporation or the stockholders thereof, etc.
After the defendant had filed its return, which by leave of court was amended, the petitioner moved to quash the same, which after argument of counsel was refused, and likewise a motion for the peremptory writ of mandamus was denied.
ARGUMENT OF COUNSEL FOR PLAINTIFF.
The return to the alternative writ is insufficient in law, and should be quashed, and the peremptory writ issued:
First, because the statutory right is absolute.
Second, because if the court has a discretion to deny the writ in any case, such facts warranting a denial in this case are not alleged in the return.
The statute under which the petitioner claims his right is section 1943, Rev. Code 1915, section 29 of chapter 65.
The authorities holding that the writ must issue where an absolute legal right of inspection is given by statute, and which sustain my first contention are: Bay State Gas Co. and John Edward Addicks v. State of Delaware, et al., 4 Pennewill, 238, 251, 56 A. 1114. The return denied every allegation of purpose. People ex rel. Lorge v. Consolidated Nat. Bank, 105 A.D. 409, 410, 94 N.Y.S. 173; Swift v. State, 7 Houst. 338, 6 A. 856, 32 A. 143, 40 Am. St. Rep. 127; Thompson on Corp. § 4516 (2d Ed.); Johnson v. Langdon, 135 Cal. 624, 67 P. 1050, 87 Am. St. Rep. 156; Cincinnati Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 56 N.E. 1033, 48 L. R. A. 732, 78 Am. St. Rep. 707; Kimball v. Dern et al., 39 Utah 181, 116 P. 28, 35 L. R. A. (N. S.) 134, Ann. Cas. 1913E, 166; Schmidt et al. v. Anderson et al., 29 N.D. 262, 150 N.W. 871, 872, 873. State ex rel. Beaty v. Guarantee Mfg. Co., et al., 103 Wash. 151, 74 P. 459, 461, is an excellent case on this point.
These cases above clearly sustain my first contention.
The second contention is that no facts are alleged in the return in this case, which would warrant the court in denying the writ, whereas here there is a clear legal right given by statute.
It is obvious that all of the foregoing decisions sustain this contention and go much further. Venner v. Chicago City Ry. Co. et al., 246 Ill. 170, 92 N.E. 643, 645, 138 Am. St. Rep. 229, 20 Ann. Cas. 607; State ex rel. Costelo v. Middlesex Banking Co., 87 Conn. 483, 88 A. 861, 863.
The court will observe that in this case the precise purpose of making an investment list of stockholders and selling them broadcast over the country is one of the reasons argued for refusing the writ. This court, recognizing all the limitations and discretion surrounding the issuance of the writ of mandamus, under a statutory right, which are laid down in any court either by way of decision or dictum, considers such purpose not within the limitations and grants the writ. See Cobb v. Lagarde et al., 129 Ala. 488, 30 So. 326; 18 R. C. L. § 103, p 182; 18 R. C. L. § 3, p. 89; Ellsworth v. Dorwart et al., 95 Iowa 108, 63 N.W. 588,58 Am. St. Rep. 427; Henry v. Babcock & Wilcox Co., 196 N.Y. 302, 304, 89 N.E. 942, 134 Am. St. Rep. 835; In re Steinway Case, 159 N.Y. 250, 53 N.E. 103, 45 L. R. A. 461; People ex rel. Callanan v. K., etc., R. R. Co., 106 A.D. 349, 350, 351, 94 N.Y.S. 555; State ex rel Holmes v. Doe Run Lead Co. et al. (Mo. App.) 178 S.W. 298; Furst v. W. T. Rawleigh Medical Co. et al., 282 Ill. 366, 118 N.E. 763; White v. Manter, 109 Me. 408, 84 A. 890, 42 L. R. A. (N. S.) 332; Powelson et al. v. W. Tennessee Eastern Electric Co. et al., 220 Mass. 380, 107 N.E. 997, Ann. Cas. 1917A, 102; Withington v. Bradley, 111 Me. 384, 89 A. 201; Hub Construction Co. v. New England Breeders' Club et al., 74 N.H. 282, 67 A. 574; Pfirman v. Success Mining Co., Limited, et al., 30 Idaho 468, 166 P. 216; Weihenmayer v. Bitner, 88 Md. 325, 42 A. 245, 45 L. R. A. 446; Varney v. Baker, 194 Mass. 239, 80 N.E. 524, 10 Ann. Cas. 989; Knox v. Coburn, 117 Me. 409, 104 A. 789; Foster v. White, 86 Ala. 467, 6 So. 88; Winter v. Baldwin, 89 Ala. 483, 7 So. 734; Stone v. Kellogg, 165 Ill. 192, 46 N.E. 222, 56 Am. St. Rep. 240.
All of these cases show clearly that the purpose of the petitioner was held immaterial, or if considered, the writ was granted notwithstanding the fact that the purposes were more...
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