Brewster v. Hartog — 111 N.Y.S. 1026

Majority

p. 1026

BREWSTER et al. v. HARTOG et al.

(Supreme Court, Appellate Division, First Department.

July 8, 1908.)

Headnote

Corporations—Inspection of Corporate Books—Extent.

An administrator, seeking to determine whether there was any agreement between decedent and a third person as to equal control of a corporation, or whether the issue of stock putting control of the corporation in the third person was authorized, is not entitled to inspect all the

p. 1027

general business books of the corporation, but should first examine the officers thereof, and ascertain what books or accounts were kept which might prove such agreement, and what books or accounts would throw light on the unauthorized issue of stock.

Appeal from Special Term, New York County.

Action by Ulysses B. Brewster and another, administrators of Frederick G. Brewster, deceased, against Joseph Hartog and others. From an order granting an inspection of the books of defendant corporation, defendants appeal.

Reversed.

Argued before INGRAHAM, McEAUGHEIN, LAUGHLIN, HOUGHTON, and SCOTT, JJ.

Robert R. Reed, for appellants.

John B. Doyle, for respondents.

It cannot be necessary for the plaintiffs to inspect all of the general business books of the defendant corporation for the purpose of ascertaining whether there was any agreement between plaintiff’s intestate, Frederick G. Brewster, and the defendant Hartog as to equal -control of the corporation, or as to whether the issue of stock putting control of the corporation in defendants was authorized or not. The order is very sweeping in its terms and we think was unauthorized. It would be much better practice for the plaintiffs to examine the officers of the corporation, and thus ascertain what books or accounts were kept which might tend to prove an agreement of equal control, or a course of dealing tending to show that such an agreement existed, and what books or accounts throw light upon the alleged unauthorized issue of stock, and then obtain an order for the inspection of such books as are shown to be material. It would appear that the defendants had offered inspection of books of this character prior to the obtaining of the present order

The order appealed from should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs, without prejudice, however, to renewal as to specific books and accounts shown to be material.