Pratt v. Meriden Cutlery Co.

Hinman, C. J. The statute relating to joint stock corporations, section 407, (Revision of 1866, p. 173,) provides that “ the books of every such corporation, containing their accounts, shall be kept, and shall at all reasonable times be open, in the town where such corporation is located, or at the office of the treasurer, within this state, for the inspection of any of the stockholders of said corporation ; and said stockholders shall have access to the books and statements of said corporation, and shall have the right to examine the same in said town, or at said office ; and as often as once in each year, a true statement of the accounts of said corporation shall be made and exhibited to the stockholders, by order of the directors.” The respondent corporation is organized under that statute, and is located in the town of Meriden, where its manufactory is situated, and where the petitioner, a stockholder, also resides; and as its treasurer does not reside in the state the petitioner claims that the account books of the company, by the express provision of the statute, should be kept at Meriden where the stockholders can have access to them. From the finding it appears that although the company’s manufactory is at Meriden, where its goods are made, yet its store, where they are sold, is in the city of New York ; and that there, or elsewhere out of this state, its secretary and treasurer reside; and that it is necessary to the successful transaction of its business that it should have a store or place of sale for its manufactured goods in New York. The books pertaining to the manufacturing are kept at Meriden; but the books pertaining to the sale of the goods, and its bank account, are kept in the city of New York, and the books are correctly kept at both places ; and there is no claim but that the petitioner can have full access to the books in New York, and the secretary has at all times been ready to explain to him in Meriden any of the books kept in New York and to communicate to him any information in his possession in relation to them. It appears to us that the Superior Court erred in issuing a peremptory mandamus upon this petition, ordering the respondents to keep in Meriden, at their office and place of [41] business there, or in the office of its treasurer in this state, the necessary book or books, to contain in detail original or duplicate items of the accounts of sales, and of cash, and of the bank account kept by the respondents in the city of New York, and that the items and entries be therein regularly recorded once a week. It may be admitted that it is the duty of this company under this statute, to keep original books, containing entries of all its transactions that are usually entered in the books of such companies, in this state, and still it does not appear that the petitioner has been or is likely to be injured by the neglect of this duty. The officer’s of the company have not denied his right to examine the books, and they appear to have extended to him every facility in their power to enable him to get all desired information in respect to the affairs of the company, consistent with the regular transaction of business in the ordinary and accustomed mode which the company has always pursued. As the sales of goods are all made in New York it is quite obvious that an account of sales must be kept there, and when credit is given upon such-sales the charges would naturally be made there; and as the payments would be made there for the goods sold the company almost of necessity would deposit the amount in bank there and so would have a bank account in New York; so that a literal compliance with the terms of this statute would compel them to keep a duplicate set of books containing these entries in Meriden also. And so long as the petitioner neither loses any thing nor is in danger of losing any thing by the omission of this duty, assuming it to be a duty, we do not see why the rule stated in the case of The King v. The Master and Wardens of the Merchant Tailors’ Company, 2 Barn. & Adol., 115, does not apply to his case. It was there held that the members of a corporation have no right on speculative grounds to call for an examination of the books in order to see if by possibility the company’s affairs may be better administered than they think they are at present. And it was there said by Littledale, J., that if the members of the corporatioiz have any complaint to make some [42] suit should be instituted, some definite matter charged, and then the question will arise whether the court will grant a mandamus. But here the attempt is made by the petitioner, as if for the purpose of remedying a private injury to himself, when the finding shows that he has suffered no such injury, to compel the company to discharge this statutory duty. So long therefore as it appears that the books have been correctly kept, and that the petitioner has been furnished with all the information that is contained in them which he required, and there is no claim that he will not continue to be so furnished, we do not think it is for him, in an application of this sort, to call for the discharge of this duty. American Asylum v. Phœnix Bank, 4 Conn., 178. But while it must be admitted that the literal reading of the statute in question would seem to require the books of all joint4stock corporations to be kept in this state, yet we think it very doubtful whether we should feel authorized to order this to be done, if the petitioner was in a situation to call for it, and was able to show that he has an interest in having it done. It is to be observed that the statute in terms includes all the books of such a joint stock company containing its accounts. And if this means, as the language obviously implies, the books containing the original entries in respect to its accounts, it is clearly impracticable to do it in respect to that portion of its business that is transacted abroad, especially if transacted in foreign countries. Many of these joint stock companies have large dealings, not only out of the state, but out of the United States, and at their establishments abroad it would be necessary to keep account books of their transactions there, and copies of those books sent here at stated times would not be a literal compliance with this provision, and we are inclined to think it was not intended to require it to be done. The books kept in New York, the court finds, are in daily and constant use there, and either the same or duplicates are indispensably necessary to be there kept. But if they are indispensable in New York, there is no provision in the statute requiring duplicates of them to be made, nor would such duplicates be any thing [43] more than copies of the originals in New York when made, and to compel the originals to be kept here would in many instances be so difficult as to amount to a prohibition to transact business out of the state. We cannot think the legislature intended to require what is so nearly impracticable. It appears moreover that the results of the transactions in New York are monthly entered in a ledger and a trial balance, kept in Meriden, from which the aggregate amount of each debt and credit, and who are the debtors and creditors of the company, can readily be ascertained; and it appears to us that under the circumstances this is all that ought to be required. We are of opinion therefore that there is manifest error in the decree complained of, and it is reversed. In this opinion the other judges concurred.