Lawshe v. Royal Baking Powder Co. — 54 Misc. 220

Majority

p. 220

Jay E. Lawshe, Respondent, v. The Royal Baking Powder Company, Appellant.

(Supreme Court, Appellate Term,

May, 1907.)

Headnote

Corporations — Rights of stockholders and actions by them — In general— Right to inspect transfer and stock books of corporation — Who are stockholders — Stockholder’s reason for desiring inspection.

A stockholder of a corporation has the right to examine its stock book, although the stock he holds was turned over to him by another stockholder in order to enable him to procure an inspection of the stock book for the purpose of obtaining information as to stockholders in order that he might communicate with them for the purpose of buying from or selling stock to them.

Appeal by the defendant from a judgment in favor of the plaintiff, rendered in the Municipal Court of the city of New York, twelfth district, borough of Manhattan.

Bowers & Sands (Latham G. Reed, of counsel), for appellant.

Jay E. Lawshe in person, for respondent.

The plaintiff sued for a penalty under section 53 of the Stock Corporation Law for refusal to allow inspection of stock book. The good faith of plaintiff in making demand for inspection is assailed. It was stipulated on the trial “ That the stock which plaintiff held had been turned over to him by one Hatch in order to procure an inspection of the common stock book on the strength thereof and on behalf of the said Hatch, and the plaintiff, for the purpose of obtaining information as to the various holders of the common stock of the defendant, in order that the other holders of common stock might be communicated with for the purpose of buying from or selling stock to them, and that such purpose was not hostile to the defendant and had no relation to internal affairs, assets or

p. 221

management of the defendant or its elections.” The plaintiff was a stockholder of record, and the provisions of the statute clearly gave him the right to inspect the stock hook and a cause of -action for the penalty in case of refusal. If the purpose of the inspection were not legitimate, the plaintiff’s right might he questioned (People ex rel. Lorge v. Consolidated Nat. Bank, 105 App. Div. 412 ), but the plaintiff’s purpose appeared perfectly proper. The cases cited by appellant show no doctrine which conflicts with this conclusion.

Gildersleeve and Seabury, JJ., concur.

Judgment affirmed, with costs.