28 La. Ann. 204 | La. | 1876
Lead Opinion
The relator owns stock in tho Bienville Oil Works Company to the amount of twenty-fivo thousand dollars. He complains
In a supplemental petition the relator charges that for many years the -company and its officers have neglected to comply with the fifth article of its charter, which requires them to make in September of every year and to publish in two newspapers in this city an annual statement of receipts and expenditures, and of the true condition of the company, kloreovor, that the company by official notice, published in the Republican newspaper of the seventh of November, 1875, called a meeting of the stockholders “ to vote upon a reduction of the capital stock and upon other matters;” which meeting- is to be held on the eleventh of December following; that in the meantime the relator is prohibited by the officers and board of the company from ascertaining by examination and verification the true state and condition of the affairs of the company, so as to vote with knowledge of the facts necessary for him to form a satisfactoiy opinion on the subject.
The relator prayed that a writ of mandamus issue to the company to ■ compel it to comply with his requests in the premises.
An order was rendered that an alternative writ issue, to which the respondents answered—
First — By general denial.
Second — They take the ground that the charter of the company confides all the powers of the corporation to the board of directors, which they contend excludes the relator from the claims sot up by him.
Third — That relator’s rights in the premises are essentially personal to himself, and can not be exercised by or through his agent.
On the hearing in the court below, j udgment was rendered in favor of the respondents, discharging the rule, and the relator appealed.
The relator, in the main, has made good by proof the allegations of his petition. The officers of tlie company were willing to let him see the last balance sheet or statement they had made ; but would not permit him to see tlie cash book, the journal, or the ledger, by moans of which he contends he could have ascertained whether the balance sheet was correct or not. The respondents insist that the relator has no such
It was upon this state o.f facts that the court decided, in that case, that it “ would not, on the application of members of a corporate body, grant
Patteson, J., said in the same case: “ The rule must be discharged, from the generality of its terms but he was far from saying that there may not be instances in which a corporator may apply for a mandamus to inspect documents of tlie kind mentioned, if he can show a specific ground of application and that the granting of it is necessary to prevent his suffering injury or to enable him to perform his duties. But some tangible object must be stated. In the case of Hatch vs. the City Bank, 1 Rob. 470, the plaintiff alleged himself to be a stockholder and director of the City Bank, and that for purposes material to the interests of the institution and of the public he desired to examine the stock-ledger of tlie bank and also the transfer-book, and that on making application to the president and board of directors to that effect he was refused the privilege requested and denied access to the books ho desired to see. He prayed for a writ of mandamus to compel a compliance with liis demands. The defendants answered that, conceding the plaintiff's allegations in his petition to bo true (which they did not admit), he is not entitled to a writ of mandamus. The defendants answered, further, that by the charter of the City Bank the entire management of its affairs and control of its books and property are confided to a board of directors, who administer the samé by a majority, and who have the right of deciding when, by whom, and for what purpose the said books shall be inspected, and that the plaintiff has no right in law to demand the inspection at his pleasure of the said books. The judgment rendered in this ease was in favor of the defendants, reversing the judgment appealed from and discharging the rule. The decree was not concurred in by a majority of the members of tlie court; one of the judges was interested in the case, and another was absent on account of sickness. Judges Bullard and Garland were of the same opinion, from which Judge Martin dissented and delivered a long and elaborate dissenting opinion, maintaining the right
In tlio case at bar the relator is a large stockholder in the Bienville Oil Works Company. He has in the. very nature of things, and upon principles of equity, good faith, and fair dealing, the right to know how tlio affairs of the company arc conducted — whether the capital of which he has contributed so largo a share is being prudently and profitably employed, or otherwise. He shows that ho has been denied this right by the board of directors, who assume that the clause in the charter of the company which declares that “all the powers of the corporation shall be exercised by a board of directors” deprives him of his individual right to know from personal inspection of the books and papers of tlio company the state of its business affairs. We arc not prepared to say that this assumption is logical, and legally deductible from this clause in the charter. We do not see that the existence of the individual right of one of the stockholders claimed by the relator in this case is incompatible with the power vested in the beard of directors. If the individual light contended for does not remain, it has been extinguished by some law, clear'and explicit in its terms, or by implication necessary and certain. No such law' is shown, and no such irresistible inference follows from the terms used in conferring the powers of the corporation upon a board of directors.
The relator, wo think, has shown that the directors have concealed from him facts which he had a right to know, and especially in this, that
The views we have expressed are fully sustained by the decision rendered by our predecessors in the case of P. J. Coburn vs. the Union Bank of Louisiana, 13 An. 289.
The objection that, if the relator has the right he claims, it is personal to himself and can not be exercised by another, we regard as having no force. The possession of the right in question would be futile if the possessor of it, through lack of knowledge necessary to exercise it, were debarred the right of procuring in his behalf the services of one who could exercise it. Our opinion, for the reasons stated, is that the judgment of the lower court is erroneous.
It is therefore ordered that the judgment appealedfrom.be annulled and reversed. It is further ordered that the mandamus be made peremptory, and that the president and secretary of the Bienville Oil Works Company and the board of directors of the said company or corporation be, through its proper officers, and they aro hereby ordered, to afford free access to, and give permission to the. relator, P. J. Martin, or to his duly authorized agent, to inspect and examine, within the usual business hours, all the book's, records, accounts, and muniments thereto appertaining, belong'ng to said company, and which relate to the business of said company as an incorporated body, without unnecessarily incommoding the officers and directors of the company; and also to make copies of such papers, accounts, etc., as he may desire, as well as memoranda in writing relating to the same. It is further ordered that the defendants and respondents pay all costs of this suit.
Dissenting Opinion
’(7Useniing. I think the relator as stockholder has the right, at seasonable horn's, and for a. legitimate purpose, to examine the books of the corporation; but it is strictly a personal right, and can bo exercised cnly by the stockholder. In 13 An. 289 it w7as said: “ It must be granted that every partner has the right to inspect the books of the partnership, and the mere fact of incorporation can not destroy that
I therefore dissent to the order as to the agent of relator.