Majority
p. 1039In re TAYLOR. (Supreme Court, Appellate Division, Third Department. January 9, 1907.)
Headnote
Mandamus—Discovery of Corporate Books.Since mandamus to require a corporation to exhibit its books and papers to a stockholder will only lie to protect his stock interest, it would not lie to aid him in a suit against directors of the corporation, caused by their publication of a false report, whereby he was Induced to become a stockholder and incurred loss.
[Ed. Note.—For cases in point, see Cent. Dig. vol. 33, Mandamus, § 264.]
Appeal from Special Term, Saratoga County.
Application of William C. Taylor for a writ of mandamus against
p. 1040The following is the opinion of Justice Henry T. Kellogg at Special Term: Thus it will be seen that the writ is granted only on behalf of a stockholder, considered as such, and in proper aid of his stock interest only. Wherever information concerning the management, conduct, and control of the corporation is necessary for the protection of such stock interest, its ■revelation will be compelled; but where the information is sought, not for the benefit of an owner’s stock interest, but to assist him in matters personal to himself and wholly apart from such interest, the writ should not be granted. This application seeks information to aid him in a suit in deceit against three directors of a banking corporation, brought to recover ■damages sustained by reason of a false report published by them, whereby he was induced to become a stockholder and incurred loss. Confessedly this is the purpose of the application. It is, therefore, not as a stockholder, but as a plaintiff in a suit against individuals not affecting the management', conduct, or control of the corporation, that he demands this writ. It should be denied to him. Motion denied, with costs. Argued before SMITH, CHESTER, KELLOGG, and COCH-RANE, JJ.
the Citizens’ National Bank of Saratoga. Denied, and applicant appeals. Affirmed.
This is an. application for a writ of mandamus to compel the Citizens’ National Bank of Saratoga to exhibit its books and papers to William C. Taylor, a stockholder. A stockholder may for a proper purpose obtain by a mandamus an examination of the corporate books. Matter of Steinway, 159 N. Y. 250 , 53 N. E. 1103 , 45 L. R. A. 461 . The writ will not be granted for the purpose of enabling a stockholder, by showing financial embarrassment, to force the corporation into the hands of a receiver through action by the Attorney General (Matter of Pierson, 44 App. Div. 215 , 60 N. Y. Supp. 671 ); nor to show an improper loan by its officers, in order to compel the parties to make good in case of a deficit (People v. Produce Exchange Trust Company, 53 App. Div. 93 , 65 N. Y. Supp. 926 ). Before a stockholder may have the writ, he must establish that “it is necessary for him to have the information in order to protect his interest in the corporation.” Matter ■of Latimer, 75 App. Div. 522 , 78 N. Y. Supp. 314 .
Edgar T. Brackett, for appellant.
Rockwood & Salisbury (Nash Rockwood, of counsel), for respondent.
Order affirmed, with costs, on the opinion of Mr. Justice Henry T. Kellogg at Special Term.
Cases cited
- In re Steinway 159 N. Y. 250 p. 1040