State v. Lake Torpedo Boat Co.

• Decision Date: 27 July 1916
• Court: Connecticut Supreme Court
• Parties: STATE ex rel. GILBERT ELIOT & CO. v. LAKE TORPEDO BOAT CO. et al.

98 A. 580

STATE ex rel. GILBERT ELIOT & CO.

v. LAKE TORPEDO BOAT CO. et al.

Supreme Court of Errors of Connecticut.

July 27, 1916.

Appeal from Superior Court, Fairfield County; William S. Case, Judge.

Mandamus by the State, on relation of Gilbert Eliot & Co., against the Lake Torpedo Boat Company and another to compel an inspection of the stock books and records of the Company. Motion to quash alternative writ sustained, and relators appeal. No error.

David S. Day, of Bridgeport, for appellants. Carl. Foster, of Bridgeport, for appellees.

THAYER, J. The respondent boat company is a corporation organized under the laws of the state of Maine, but having its office and principal place of business in Bridgeport, in this state, in which are kept the books and other records of the corporation, containing a complete list of the stockholders of the corporation and the number of shares held by each stockholder, which books and records are in the custody of the other respondent, as secretary of the corporation, who resides in Bridgeport. The relators, who are stockholders of the corporation, demanded of the corporation and of the secretary an opportunity to inspect the stock books and records for the purpose of ascertaining and copying the names and residences of the shareholders of the company and the demand was refused.

Under the statutes of this state the relators would be entitled to make the inspection demanded if the respondent corporation were organized under the laws of this state. Public Acts 1911, c. 215, § 1; Costelo v. Middlesex Banking Co., 87 Conn. 483, 485, 88 Atl. 861. And they would have a qualified right to such inspection at common law. Id., and cases cited.

A statute of the state of Maine provides:

"All corporations, existing by virtue of the laws of this state, shall have a clerk who is a resident of this state, and shall keep, at some fixed place within the state, a clerk's office where shall be kept their records and a book showing a true and complete list of all stockholders, their residences and the amount of stock held by each. * * * Such records and stock book shall be open at all reasonable hours to the inspection of persons interested, who may take copies and minutes therefrom of such parts as concern their interests. * * * "Rev. St. c. 47, § 20.

The relators found their application for the writ of mandamus upon this statute, which is made part of the application and alternative writ, and it is alleged in the writ that the respondent corporation does not keep in the state of Maine a stock book or other records showing a list of its stockholders as the statute requires, that demand has been made upon the respondents for an opportunity to inspect the stock books and records in this state for the purpose of ascertaining and copying the names and residences of the stockholders of the corporation, and that the demand was refused by the respondents. The respondents moved to quash the alternative writ, assigning 19 grounds for dismissing it, which are summarized in their brief into three general grounds: (1) Because the courts of this state have hot jurisdiction to enforce by mandamus against a foreign corporation the laws of the state under which it was created; (2) because the application is defective in form; (3) because the facts alleged in the alternative writ are insufficient. The motion was sustained, and the alternative writ was quashed, and the application dismissed. The appeal assigns for error the sustaining of the motion to quash upon any of the grounds stated in the motion and in rendering judgment that the alternative writ be quashed.

The question most argued before us was the first, whether the courts of this state have jurisdiction to here enforce the law of the state of Maine which gives to stockholders the right to inspect the stock books and records of the respondent corporation. It is claimed by the respondents that to do so would be to interfere with the internal affairs of the corporation, and should not be done. But this is not so. The order applied for would in no way interfere with the management of the corporation's business affairs by its directors, to whom are intrusted the powers of contracting for the corporation, investing its funds, and other internal affairs. It would not change the relations of the stockholder to the corporation or his fellow stockholders. The purpose of the proceeding is to compel an officer of the corporation having its books and papers in this state, where the corporation has its office and chief place of business, to do what the laws of the state under which it exists require to be done. The courts of this state have jurisdiction of the parties. The books sought to be inspected are within their jurisdiction, so that the order asked for can be enforced by them. Had the purpose of the application been to enforce the common-law right of inspection, it is not claimed that the order asked for would be denied. Such orders have frequently been made in other jurisdictions. Andrews T. Mines Co., 205 Mass. 121, 91 N. E. 122, 137 Am. St. Rep. 428; Swift v. Richardson, 7 Houst. (Del.) 336, 6 Atl. 856, 32 Atl. 143, 40 Am. St. Rep. 127; Hobbs v. Tom Reed Gold Mining Co., 164 Cal. 497, 129 Pac. 781, 43 L. R. A. (N. S.) 1112. The respondent corporation was organized under a statute of Maine, and the section here in question is a portion of those statutes and is a part of the charter under which the corporation exists. It gives to the plaintiff stockholders the right of inspection which they seek in this proceeding. The corporation brought its charter with it when it qualified to do business in this state. This imposes upon the secretary of the corporation the same duty to permit an inspection of the books in this state which it imposed upon him in the state of Maine. The courts of this state will enforce by mandamus the performance of that duty the same as they would if imposed by our own statutes.

As another reason for quashing the alternative writ it is said that the plaintiffs have an adequate remedy at law by proceedings in the state of Maine. It appears from the writ that the respondent corporation has no treasurer's office or fixed place in that state, as required by the statute, where a stock book is kept, and does not keep in that state as required a stock book or other records showing a list of the stockholders. Presumably the courts of Maine might, under penalty of forfeiting its charter, compel the...