52 Misc. 2d 122 | N.Y. Sup. Ct. | 1966
In this proceeding in the nature of mandamus, brought under section 624 of the Business Corporation Law, petitioner, acting as agent for undisclosed principals, seeks an order directing respondent to furnish it with a list of respondent’s stockholders. The issues here presented are (1) whether the fact that the list is sought solely to enable petitioner (for its principals) to solicit sales to it of respondent’s stock removes the proceeding from the scope of section 624, and (2) whether the relief requested should be withheld (pending a hearing or permanently) because of petitioner’s alleged violation of applicable rules of the Securities and Exchange Commission, in the acquisition of the shares it now holds, and without which it would not meet the 5% stock ownership prerequisite of section 624.
Subdivision (e) of section 624, in pertinent part, states that the inspection may be denied upon the shareholder’s refusal to furnish an affidavit that “ such inspection is not desired for a purpose which is in the interest of a business or object other than the business of the corporation ”. This affidavit has been furnished but the court has the obligation, where the question is raised, to go beyond the face of the affidavit, and determine whether section 624’s requirements have been met, in fact. (See Matter of Schulman v. Dejonge & Co., 270 App. Div. 147.)
The evidence adduced indicates, clearly, that the sole purpose of the inspection requested is the solicitation of sales of stock to petitioner. Indeed, this is admitted. It is by no means evident that such a purpose is in the interest of the corporation. It is true, as urged by petitioner, that some recent eases have held that
Absent some compelling basis for so doing, and none has been advanced by petitioner, this court is not disposed to extend the rights afforded by section 624 to cover the instant case. The application will therefore be denied on this basis. There is thus no reason for directing a hearing on the issue of whether or not the prior purchases of stock were part of “ a continuous plan ’ ’ to acquire control and whether petitioner violated any rules of the Securities and Exchange Commission in so doing which might disqualify petitioner from inspection in any event. (See Studebaker Corp. v. Gittlin, 360 F. 2d 692 [C. A. 2d, 1966].)
The petition is denied and dismissed.