Dennison v. Needle

Sanderson, J. This is a bill in equity by stockholders against a corporation and its treasurer, alleging that a demand for an opportunity to inspect the stock and transfer books of the corporation, its record books and books of account had been refused by the defendants and asking for an order directing the defendants to provide the books and records and to permit the plaintiffs or their attorney to examine the same and to make copies and abstracts there 418 from. The answer of the defendants admits that the corporation refused to permit the inspection of the books and sets up the defence that the information was sought for personal advantage of the plaintiffs, or for some one undisclosed, and for purposes injurious to the interests of the corporation. The case was referred to a master who found that there was no evidence that the plaintiffs desired the list of stockholders or any other information which might be secured from an examination of the books and papers for any purpose other than the interests of the plaintiffs as stockholders relative to the affairs of the corporation, and that the defendants had failed to maintain their defence. A decree was entered ordering the defendants to exhibit to the plaintiffs and their attorneys for examination the books and records of the defendants and to permit the taking of copies and transcripts therefrom in or within two weeks from the date of the decree at the principal business office of the corporation. From this decree the defendants appealed. The finding of the master as to the good faith of the plaintiffs in making the requests is conclusive in their favor on that issue. The only other contention of the defendants is that the decree is too broad in requiring them to exhibit to the plaintiffs the books and records of the corporation, which might be construed to mean all books and records. Apart from the statute the proper remedy of an aggrieved stockholder whose request for an examination of the books of a corporation or the records relating to stockholders has been refused is by petition for writ of mandamus. Varney v. Baker, 194 Mass. 239, 242. Andrews v. Mines Corp. Ltd. 205 Mass. 121, 124. Butler v. Martin, 220 Mass. 224, 226. See Klotz v. Pan-American Match Co. 221 Mass. 38. The jurisdiction in equity to require officers of a corporation to exhibit to a stockholder papers, books and records is limited to those specified in St. 1903, c. 437, § 30 (G. L. c. 155, § 22, as amended by St. 1923, c. 172) and the stockholder’s right to examine the general books of account to ascertain the volume of business transacted and the method and efficiency of cor 419 porate management is left as at common law. Shea v. Parker, 234 Mass. 592, 594. Powelson v. Tennessee Eastern Electric Co. 220 Mass. 380, 383. The final decree is to be modified by substituting for the words “books and records” the words “records of all meetings of stockholders and stock and transfer books” and by substituting for the words “two weeks from date” the words “two weeks from the entry of final decree after rescript.” As so modified the decree is affirmed. So ordered.