Wallace v. Interamerican Trust Co.

• Decision Date: 05 November 1965
• Docket Number: No. 18419,18419
• Court: South Carolina Supreme Court
• Parties: David WALLACE and Sam Gendil on behalf of themselves and the other stockholders of Interamerican Trust Company, Respondents, v. INTERAMERICAN TRUST COMPANY and T. C. Fitzgerald, Jr., of whom T. C. Fitzgerald, Jr., is, Appellant.

Page 813

144 S.E.2d 813

246 S.C. 563

David WALLACE and Sam Gendil on behalf of themselves and the other stockholders of Interamerican Trust Company Respondents, v. INTERAMERICAN TRUST COMPANY and T. C. Fitzgerald, Jr., of whom T. C. Fitzgerald, Jr., is, Appellant.

No. 18419.

Supreme Court of South Carolina.

Nov. 5, 1965.

McKay, McKay, Black & Walker, Columbia, for appellant.

Isadore S. Bernstein, Columbia, for respondents.

LEWIS, Justice.

The only question which we need determine in this appeal concerns the right of the defendant to have reviewed before final judgment certain intermediate orders issued by the lower court.

The plaintiffs are minority stockholders of the corporate defendant Interamerican Trust Company; and the defendant T. C. Fitzgerald, Jr., is the president and chairman of the board of said corporation. This action was brought for the benefit of the corporation by the plaintiffs, on behalf of themselves and all other stockholders, against the defendant Fitzgerald for an accounting and judgment against him and for his removal as an officer of the corporation, because of alleged illegal and fraudulent acts of mismanagement committed by him in his official capacity as president and chairman of the board.

As a result of adverse rulings upon several motions, the defendant Fitzgerald has appealed and seeks to have reviewed three intermediate orders of the lower court, namely: (1) an order of Honorable John Grimball, Resident Judge, issued on August 21, 1963, denying a motion of the defendant to dismiss service of the summons and complaint; (2) an order of Honorable Clarence E. Singletary, Presiding Judge, issued on April 30, 1964, denying a motion of the defendant to strike certain allegations from the complaint and to make the complaint more definite in certain particulars; and (3) an order of Honorable Bruce Littlejohn, Presiding Judge, issued on October 12, 1964, affirming an order of the master, to whom the cause had been referred, requiring the defendant to make the books and records of the defendant corporation available for examination, inspection, and audit by the plaintiffs in connection with their preparation for the trial of the present action. The last mentioned order was issued under the provisions of Section 26-502 of the 1962 Code of Laws and Section 6.26 of Act No. 847 of the 1962 General Assembly (the latter now appearing as Section 12-16.26 of the 1964 Supplement to the Code).

Upon the issuance of the first two orders, the defendant gave timely notice of intention to appeal, stating in the notice in each instance that the appeal would be perfected upon the rendition of a final judgment in the action.

This appeal, admittedly, is from the last order by the lower court, which required the defendant to make available the books and records of the corporate defendant for inspection by the plaintiffs in connection with the trial of the present action. The defendant also seeks to have the two prior orders reviewed in this appeal, contending that the order requiring him to make the books and records of the corporation available for inspection is appealable before final judgment and, since there is an appealable issue before the court, the prior orders should be reviewed as a matter of grace in order to avoid unnecessary litigation. The position of the plaintiffs, on the other hand, is that the order requiring the defendant to make the records available for inspection is not appealable until final judgment and that the appeal should be dismissed upon that ground.

Under our view of the matter, since it is conceded that review of the prior orders depends upon whether the order issued for the inspection of the corporate records is properly before the court, the only question which we need decide is whether the latter order, issued pursuant to Sections 26-502 and 12-16.26, supra, is appealable before final judgment.

Section 26-502 is as follows:

'The court before which a civil action is pending or a judge or justice thereof may, in his discretion and upon due notice, order either party to give to the other, within a specified time, an inspection and copy or permission to take a copy of any books, papers and documents in his possession or under his control containing evidence relating to the merits of the action or the defense therein. If compliance with the order be refused, the court, on motion, may exclude the paper from being given in evidence, or punish the party refusing, or both.'

Section 12-16.26 is a part of the South Carolina Business Corporation Act of 1962, and deals with the right of corporate shareholders to inspect corporate records. After defining shareholders who are entitled to examine the records of a corporation, within which class the plaintiffs admittedly fall, the pertinent portions of Section 12-16.26 provide:

'(b) Any such shareholder shall have the right...