also upon the proposition that those in charge of the corporation are merely the stockholders' agents,7 concerning whose good faith in discharging their duties the stockholders have an interest in knowing. While the books and papers of the corporation are necessarily in the hands of the corporate officers and agents, they are the common property of the stockholders who have the right to know what the corporation is doing 10 and have the same right as the members of an ordinary partnership to examine the books and records of the organization 11 in order that they may protect their own interests.12 "There can be no question that the ownership of stock confers the authority to see that the property is well managed. The exercise of this authority involves primarily the right to examine the books." 13 Visitation of a corporation is the examination of its affairs by the proper authority (which is, in the United States, the state or federal government, except in the case of private eleemosynary corporations) L. R. A. 670, 107 Am. St. Rep. 938, 49 S. E. 392. 7 Wight v. Heublein, 111 Md. 649, 75 Atl. 507; State v. Doe Run Lead Co. (Mo. App.), 178 S. W. 298; State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112; Huylar v. Cragin Cattle Co., 40 N. J. Eq. 392, 2 Atl. 274; Harkness v. Guthrie, 27 Utah 248, 107 Am. St. Rep. 664, 75 Pac. 624, aff'd 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433. It cannot be contended that the corporate records are for the benefit of the officers and that the stockholders are not entitled to inspection. Poor v. Yarnell, 28 Cal. App. 714, 153 Pac. 976. 8 Varney v. Baker, 194 Mass. 239, 10 Ann. Cas. 989, 80 N. E. 524; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729. 9 Com. v. Phoenix Iron Co., 105 Pa. St. 111, 51 Am. Rep. 184. "The books are not the private property of the directors or managers, but are the records of their transactions as trustees for the stockholders." Huylar v. Cragin Cattle Co., 40 N. J. Eq. 392, 2 Atl. 274. 10 Stone v. Kellogg, 62 Ill. App. 444, aff'd 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222. The purpose of inspection is to give the stockholder all the information which he may desire with regard to corporate affairs. Clawson v. Clayton, 33 Utah 266, 93 Pac. 729. A stockholder has a broad legal right to look into the books at proper times and places and for a proper purpose. State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112. U. S. 11 Harkness v. Guthrie, 199 148, 50 L. Ed. 130, 4 Ann. Cas. 433; State v. New Orleans Gaslight Co., 49 La. Ann. 1556, 22 So. 815; Com. v. Phoenix Iron Co., 105 Pa. St. 111, 51 Am. Rep. 184; State v. Pacifie Brewing & Malting Co., 21 Wash. 451, 47 L. R. A. 208, 58 Pac. 584. 12 Hodder v. George Hogg Co., Pa. 196, 72 Atl. 553. 223 pri. Inspection by stockholder is marily to protect his individual in terest. Machen v. Machen & Meyer Elec. Mfg. Co., 237 Pa. 212, 42 L. R. A. (N. S.) 1079, Ann. Cas. 1914 B 420, 85 for the purpose of supervising, correcting and controlling the management of the corporation. The common-law right of inspection is a personal privilege of the stockholder which arises from his ownership of the stock and can be exercised for any legitimate purpose beneficial to him without any special appointment for that purpose, but which does not authorize him in exercising the right to interfere with or direct the general operations of the corporation.14 § 2810. Right at common law. At common law, every stockholder of a corporation has a right, by reason of his interest therein, to inspect and examine its books and papers, if he asserts the right at a reasonable time and place, and for proper purposes.15 This right of a 14 Harkness v. Guthrie, 27 Utah 248, 107 Am. St. Rep. 664, 75 Pac. 624, aff'd 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433. 15 United States. Guthrie v. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433. California. See Hobbs v. Tom Reed Gold Min. Co., 164 Cal. 497, 43 L. R. A. (N. S.) 1112, 129 Pac. 781; Johnson v. Langdon, 135 Cal. 624, 87 Am. St. Rep. 156, 67 Pac. 1050. Connecticut. State V. Middlesex Banking Co., 87 Conn. 483, 88 Atl. 861. Delaware. State v. Jessup & Moore Paper Co., 24 Del. 379, 77 Atl. 16. Georgia. See Oliver v. Oliver, 118 Ga. 362, 45 S. E. 232. Illinois. Stone v. Kellogg, 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222, aff'g 62 Ill. App. 444. Maine. Withington v. Bradley, 111 Me. 384, 89 Atl. 201; White v. Manter, 109 Me. 408, 42 L. R. A. (N. S.) 332, 84 Atl. 890. Massachusetts. Klotz v. Pan-American Match Co., 221 Mass. 38, 108 N. E. 764; Powelson v. Tennessee Eastern Elec. Co., 220 Mass. 380, Ann. Cas. 1917 A 102, 107 N. E. 997; Butler v. Martin, 220 Mass. 224, 107 N. E. 999. Michigan. Eldred v. Elliott, 161 Mich. 262, 126 N. W. 219; Woodworth v. Old Second Nat. Bank, 154 Mich. 459, 15 Det. L. N. 773, 118 N. W. 581, 117 N. W. 893. IV Priv. Corp.-46 Minnesota. State v. Monida & Y. Stage Co., 110 Minn. 193, 125 N. W. 676, 124 N. W. 971. Missouri. State v. Doe Run Lead Co. (Mo. App.), 178 S. W. 298; State v. German Mut. Life Ins. Co., 169 Mo. App. 354, 152 S. W. 618; State v. St. Louis Transit Co., 124 Mo. App. 111, 100 S. W. 1126; State v. Laughlin, 53 Mo. App. 542. New York. In re Steinway, 159 N. Y. 250, 45 L. R. A. 461, 53 N. E. 1103; Hitchcock v. Union Ferry Co. of New York & Brooklyn, 157 App. Div. 328, 142 N. Y. Supp. 247; People v. Consolidated Fire Alarm Co., 142 App. Div. 753, 127 N. Y. Supp. 348; Latimer v. Herzog Teleseme Co., 75 App. Div.. 522, 78 N. Y. Supp. 314, 12 N. Y. Ann. Cas. 9; In re Kennedy, 75 App. Div. 188, 77 N. Y. Supp. 714. North Dakota. Schmidt v. Anderson, 29 N. D. 262, 150 N. W. 871. Pennsylvania. Rochester v. Indiana County Gas Co., 246 Pa. 571, 92 Atl. 717; Kuhbach v. Irving Cut Glass Co., 220 Pa. 427, 28 L. R. A. (N. S.) 185, 69 Atl. 981; Schondelmeyer v. Columbia Fireproofing Co., 219 Pa. 610, 69 Atl. 49; Com. v. Phoenix Iron Co., 105 Pa. St. 111, 51 Am. Rep. 184. Utah. Kimball v. Dern, 39 Utah 181, 35 L. R. A. (N. S.) 134, Ann. Cas. 1913 E 166, 116 Pac. 28; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729; Harkness v. Guthrie, 27 Utah 248, 107 stockholder was recognized in the early English decisions,16 and exists in the absence of any statutory provision on the subject,17 unless the stockholder is precluded by some statute, or by some article of the company's charter from inspecting the books. 18 It may exist with reference to certain books and papers of a corporation, where the right to inspect granted by virtue of statutory provisions is limited to a certain book or certain kinds of books.19 The common-law right of inspection is clearly distinguishable from the statutory right,20 since it is a qualified and not an absolute right,21 Am. St. Rep. 576, 1 Ann. Cas. 129, 75 Pac. 624. Washington. State v. Pacific Brewing & Malting Co., 21 Wash. 451, 47 L. R. A. 208, 58 Pac. 584. Wyoming. Wyoming Coal Min. Co. v. State, 15 Wyo. 97, 123 Am. St. Rep. 1014, 87 Pac. 337. 16 See In re Steinway, 159 N. Y. 250, 45 L. R. A. 461, 53 N. E. 1103 (where a number of early English decisions are referred to). 17 Woodworth v. Old Second Nat. Bank, 154 Mich. 459, 15 Det. L. N. 773, 118 N. W. 581, 117 N. W. 893; In re Steinway, 159 N. Y. 250, 45 L. R. A. 461, 53 N. E. 1103. In Delaware the right of inspection is recognized as a common-law right. State v. Jessup & Moore Paper Co., 24 Del. 379, 77 Atl. 16. In Wyoming, it seems that there is no statute declaratory of, or in anywise changing or modifying the common rule. Wyoming Coal Min. Co. v. State, 15 Wyo. 97, 123 Am. St. Rep. 1014, 87 Pac. 337. The fact that statutes have been enacted conferring the right of inspection does not raise an inference that there is no such right at common law. Com. v. Phoenix Iron Co., 105 Pa. St. 111, 51 Am. Rep. 184. A statute which is not as comprehensive as the common-law right, and which partly affirms the same, is usually held not to operate as a limitation upon the common-law right of inspection. State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112; State v. Laughlin, 53 Mo. App. 542. The fact that a statute which contains no negative words gives stockholders an absolute right to inspect certain books or papers or to inspect them at a particular time does not deprive a stockholder of his common-law right to inspect other books or papers or to inspect them at other reasonable times. People v. Eadie, 133 N. Y. 573, 30 N. E. 1147, 63 Hun (N. Y.) 320, 18 N. Y. Supp. 53; Sage v. Lake Shore & M. S. R. Co., 70 N. Y. 220; People v. Lake Shore & M. S. Ry. Co., 11 Hun (N. Y.) 1. 18 State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780. A stockholder has the right to inspect books unless it is taken away by some provision of the charter or some by-law of the corporation. Cockburn v. Union Bank, 13 La. Ann. 289. 19 See State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112; In re Steinway, 159 N. Y. 250, 45 L. R. A. 461, 53 N. E. 1103; Althause v. Giroux, 56 N. Y. Misc. 508, 107. N. Y. Supp. 191. 20 Althause v. Giroux, 56 N. Y. Misc. 508, 107 N. Y. Supp. 191. 21 Connecticut. State v. Middlesex Banking Co., 87 Conn. 483, 88 Atl. 861. Massachusetts. Klotz v. Pan-American Match Co., 221 Mass. 38, 108 N. E. 764; Powelson v. Tennessee Eastern Elec. Co., 220 Mass. 380, Ann. Cas. 1917 A 102, 107 N. E. 997; Butler v. Martin, 220 Mass. 224, 107 N. E. 999. although it is broad and comprehensive.22 In other words, the commonlaw right of inspection is rather a matter of privilege than a matter of right.23 The restrictions are as to time, place and purpose, and are governed largely by the circumstances of each particular case.24 § 2811. Constitutional and statutory provisions-In general. In some states constitutional provisions exist in regard to the right of inspecting the books of corporations.25 The subject of inspection of corporate books is also one with which the legislature may deal, and numerous statutes upon the subject have been enacted in the various states. While varying somewhat in phraseology, such statutes are in harmony with regard to their purpose, and are generally held either to have confirmed or to have enlarged the common-law right.26 Under some general statutes, stockholders are given the broad Minnesota. State v. Monida & Y. Stage Co., 110 Minn. 193, 125 N. W. 676, 124 N. W. 971. Missouri. State v. Doe Run Lead Co. (Mo. App.), 178 S. W. 298; State v. German Mut. Life Ins. Co., 169 Mo. App. 354, 152 S. W. 618; State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780; State v. St. Louis Transit Co., 124 Mo. App. 111, 100 S. W. 1126. Utah. Kimball v. Dern, 39 Utah 181, 35 L. R. A. (N. S.) 134, Ann. Cas. 1913 E 166, 116 Pac. 28; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729. 22 State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112. 23 Clawson v. Clayton, 33 Utah 266, 93 Pac. 729. 24 State v. Bucklin, 83 Wash. 23, L. R. A. 1915 D 285, 145 Pac. 58. 25 Under California Const. art. 12, § 14, corporations other than religious, educational or benevolent shall have books where transfers of stock shall be made for inspection by each person having an interest therein, books in which shall be recorded the amount of capital stock prescribed, etc. Gavin v. Pacific Coast Marine Firemen's Union of San Francisco, 2 Cal. App. 638, 84 Pac. 270. Under Louisiana Const.. 1879, art. 245 (Const. 1898, art. 273), it is made the duty of all corporations to maintain a public office "where shall be kept for public inspection books in which shall be recorded the amount of the capital stock subscribed," etc. State v. Citizens' Bank of Jennings, 51 La. Ann. 426, 25 So. 318; State v. New Orleans Gaslight Co., 49 La. Ann. 1556, 22 So. 815; and see State v. Whited & Wheless, 104 La. 125, 28 So. 922. This constitutional provision is self-executing. State V. New Orleans Gaslight Co., 49 La. Ann. 1556, 22 So. 815. 26 Guthrie v. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433; State v. Middlesex Banking Co., 87 Conn. 483, 88 Atl. 861; Kimball v. Dern, 39-Utah 181, 35 L. R. A. (N. S.) 134, Ann. Cas. 1913 E 166, 116 Pac. 28; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729; Bergman Clay Mfg. Co. v. Bergman, 73 Wash. 144, 131 Pac. 485; State v. Pacific Brewing & Malting Co., 21 Wash. 451, 47 L. R. A. 208, 58 Pac. 584. right to examine and inspect the books, records and papers of the corporation at reasonable and proper times,27 while other statutes provide that the right shall be subject to such regulations as may be prescribed by the by-laws; 28 and some statutes differ from the common-law rule in that they contain specific provisions as to the inspection of certain books or records only.29 The statutes also vary as to the persons en 27 Alabama. Under Code 1886, § 1677, stockholders have the general right to examine books at any and all reasonable times. Cobb v. Lagarde, 129 Ala. 488, 30 So. 326; Winter v. Baldwin, 89 Ala. 483, 7 So. 734; Foster v. White, 86 Ala. 467, 6 So. 88. Illinois. Rev. St. c. 32, § 13; J. & A. Ann. St. ¶ 2430. Venner v. Chicago City R. Co., 246 Ill. 170, 138 Am. St. Rep. 229, 20 Ann. Cas. 607, 92 N. E. 643; Coquard v. National Linseed-Oil Co., 171 Ill. 480, 49 N. E. 563, aff'g 67 Ill. App. 20; Stone v. Kellogg, 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222, aff'g 62 Ill. App. 444; People v. Weber Co., 159 Ill. App. 588; Heitkamp v. American Pigment & Chemical Co., 158 Ill. App. 587; Rodger Ballast Car Co. v. Perrin, 88 Ill. App. 323; Mathews v. McClaughry, 83 III. App. 224. Maryland. Code, art. 23, § 5. Wight v. Heublein, 111 Md. 649, 75 Atl. 507; Weihenmayer v. Bitner, 88 Md. 325, 45 L. R. A. 446, 42 Atl. 245. Minnesota. Under Rev. L. 1905, § 2869, all books and records shall at all reasonable times and for all proper purposes be open to inspection of every stockholder. State v. Monida & Y. Stage Co., 110 Minn. 193, 125 N. W. 676, 124 N. W. 971. 28 Missouri Rev. St. 1909, § 3349, provides that each shareholder "may at all proper times have access to the books of the company, to examine the same, and under such regulations as may be prescribed by the by-laws." State v. Doe Run Lead Co. (Mo. App.), 178 S. W. 298. Missouri Ann. St. 1906, § 966 (Rev. St. 1899, § 966), although not as comprehensive as the common-law right, in part affirms the same. State v. Donnell Mfg. Co., 129 Mo. App. 206, 107 S. W. 1112. See State v. Laughlin, 53 Mo. App. 542. 29 Powelson v. Tennessee Eastern Elec. Co., 220 Mass. 380, Ann. Cas. 1917 A 102, 107 N. E. 997. Under Connecticut Pub. Acts 1911, c. 215, § 1, it is provided that designated books shall at all times during the usual hours of business be open to examination to every stockholder, thus enlarging common-law right as to the books so designated. State v. Middlesex Banking Co., 87 Conn. 483, 88 Atl. 861. Massachusetts Business Corporation Law, $30, St. 1903, c. 437, provides that "The stock and transfer books of every corporation, which shall contain a complete list of all stockholders, their residences and the amount of stock held by each, shall be kept at an office of the corporation in this Commonwealth for the inspection of its stockholders." Liability for damages caused by a refusal to exhibit the books, etc., is specified; and the section concludes as follows: "The Supreme Judicial Court or the Superior Court shall have jurisdiction in equity, upon petition of a stock Utah. Comp. L. 1907, § 329, and Penal Code, § 4415. Kimball v. Dern, 39 Utah 181, 35 L. R. A. (N. S.) 134, Ann. Cas. 1913 E 166, 116 Pac. 28; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729. |