State v. St. Louis Transit Co.

• Decision Date: 19 March 1907
• Citation: 124 Mo. App. 111,100 S.W. 1126
• Parties: STATE ex rel. JOHNSON v. ST. LOUIS TRANSIT CO. et al.
• Court: Missouri Court of Appeals

100 S.W. 1126

124 Mo. App. 111

STATE ex rel. JOHNSON v. ST. LOUIS TRANSIT CO. et al.

St. Louis Court of Appeals. Missouri.

March 19, 1907.

1. CORPORATIONS—STOCKHOLDERS—RIGHT TO INSPECT BOOKS.

The statement of a stockholder to the custodian of corporate books of the purpose for which he wished to inspect the books, if essential to his right to inspect them, is waived where the refusal to allow the inspection is based on another ground.

2. SAME.

A stockholder is entitled to inspect corporate books and records, with the aid not only of an expert accountant, but also of a stenographer.

Application by the state, on the relation of J. B. Johnson, for writ of mandamus to the St. Louis Transit Company and another. Motion to quash alternative writ overruled, and peremptory writ granted.

John A. Gilliam, for relator. Boyle & Priest, for respondents.

GOODE, J.

This is an original proceeding by mandamus against the St. Louis Transit Company, a domestic street railway corporation, and James Adkins, its secretary and treasurer and custodian of its books, to compel respondents to permit relator to inspect the books and records of said transit company. The amended alternative writ alleges that relator, Johnson, on June 15, 1906, and other dates mentioned in the writ, was a shareholder in said company, owning 198 shares of its capital stock; that said company is incorporated under the laws of the state of Missouri, and relator, as a stockholder, is entitled, under said laws, to examine its books and records personally, or by duly authorized agents, and is entitled to have the books and records examined by an expert accountant, assisted by a stenographer, to take proper memoranda. It is further alleged that on June 15, 1906, relator sent his agent, John V. Hogan, during business hours, to the office of said company; that said agent requested Adkins, then secretary and treasurer of the company and in charge of its books and records, to permit said agent to examine its said books and records, and was refused the right; that afterwards, on June 26th, the relator, in company with his said agent, Hogan, went to the office of the company during business hours, and demanded of said Adkins an opportunity to examine the books and records, and was refused the right to examine them with the assistance of an expert accountant and stenographer, and refused the privilege of making extracts from the books; that the relator desires to examine all said books and records for the purpose of ascertaining the financial condition of the company, what moneys it has received, and what was done therewith; what bonds, stocks, and other properties it has received, and what has been done with them; also to ascertain the value of relator's stock in the company, and whether the business affairs of the company have been conducted according to law, and to acquaint relator with the conduct and management of its affairs. The writ further charges that the company ceased to do business and to act under its franchise on November 1, 1904, and that just prior to said date it disposed of a great amount of its assets to Brown Bros. & Co., a partnership composed of people who are nonresidents of the state of Missouri, and to the United Railways Company, a corporation of the state of Missouri, and to other parties unknown to relator; that on the last-named date said transit company also distributed a large amount of its assets among its stockholders, contrary to law and without the concurrence of relator; that relator has received none of said assets, and desires to know who got them, and if anything was received therefor; to learn under what resolutions, advertisements, votes, and proceedings the assets had been disposed of, and whether the same was done according to law; that relator has no way of ascertaining the contents of said books and records by and through the ordinary process of law that the examination is a complicated one, in which he needs the aid of an expert accountant and a stenographer, and the right to make extracts and memoranda, without which aid the examination would be incomplete and fruitless. The command of the alternative writ was that the respondents, the St. Louis Transit Company and James Adkins, should, without further excuse or delay, give relator, and such expert accountant and stenographer as he might select, access to, and the right, privilege, and opportunity to inspect and examine, the books and records, to make extracts and memoranda therefrom, between the hours of 9 a. m. and 6 p. m. on week days, beginning with the receipt of the writ, and to continue until the relator should be able to complete the examination, or that respondents show cause on the date named why they should not permit relator said relief. A motion to quash the alternative writ was filed, and subsequently respondents filed returns. These answers or returns stated, in effect, that on or about June 25, 1906, relator and J. V. Hogan, his agent, came to the transit company's office, and requested the privilege of inspecting the stockbooks of the company, without stating the purpose for which the privilege was requested; that on the afternoon of said day respondents informed relator that a list of the stockholders of the company had been compiled, and on application at the company's office would be furnished to relator; that on June 26, 1906, J. V. Hogan appeared at the company's office with a letter from the relator, requesting the privilege of inspecting the books and records of the transit company as relator's agent; that Adkins, the secretary of the company, asked Hogan what he wished to inspect, and was told that it was the stockbooks; that thereupon the stockbooks were furnished Hogan, together with a typewritten list of the stockholders. The return avers that at no time did relator, in person or by his agent, demand to see any of the books of the company...