in good faith, for the purpose of protecting the stockholder's interests, but to annoy and harass the corporation or for purposes detrimental to it, the right will be refused."

A stockholder cannot make use of his relation as such to inspect the books of the corporation, where his purpose is merely to obtain information for use as a debtor of the corporation," and it has been held that where a stockholder desired the information to sell to brokers

and others not interested in the corporation, the right of inspection would be refused.8

The right will not be refused where it appears that the stockholder is a broker, and desires the inspection for the purpose of more effectually carrying on his business, since the purpose is not hostile to the corporation.9

If it is sought to avoid the right of inspection, on the claim that the stockholder is trying to annoy and harass the corporation, something more than the mere bald charge to that effect is necessary.10

There is no presumption that a stockholder seeking information does so with a bad motive, or with intent to inflict injury upon the corporation. This is a matter of defense to be pleaded and proved.12

8 Eaton v. Manter, 114 Me. 259, 95 Atl. 948.

9 State v. Middlesex Banking Co., 87 Conn. 483, 88 Atl. 861.

10 To charge that a mandamus suit is one of several suits concertedly instituted to annoy and harass a corporation, something more than the bald charge to that effect and the concurrent institution of the suits must be shown by the pleading. State v. Jessup & Moore Paper Co., 27 Del. 248, 88 Atl. 449.

An allegation of bad faith and improper motive is alone insufficient as a denial of the plaintiff's good faith and proper motive. State v. Jessup & Moore Paper Co., 27 Del. 248, 88 Atl. 449.

Where an answer alleged that the action of the petitioner in taking an audit of the books of the corporation and in instituting the proceedings was "wholly lacking in good faith" and not for the purpose of informing himself as to the financial condition of the corporation, stated that the primary object was "to compel the defendants to purchase petitioner's stock and that of his brother at a price far above its true value,'' and also alleged that the purpose of the examination was to harass and annoy the corporation into buying the stock, and that the information desired was

If there be any valid reason why a stockholder should not be permitted to examine the corporate books, it may ordinarily be availed of in the defense in a mandamus proceeding. Rodger Ballast Car Co. v. Perrin, 88 Ill. App. 323.

Where an answer to a petition for a writ of mandamus by a shareholder to compel inspection of the books of the corporation alleges by argument, conjecture and conclusion that the purpose of the petitioner is to levy blackmail and does not allege any actual threats or demands, the answer is insufficient. People v. Chicago City Ry. Co., 183 Ill. App. 283.

If a corporation has reason to believe that the motives actuating an application to inspect corporation records are i'legal, and refuses inspec

In stating the foregoing general rule thus broadly, due regard must be had to the effect of statutory provisions on the subject, as well as to the tendency of the courts to make the right of inspection absolute.

Under the later decisions, there is also a distinction with respect to an improper purpose, and an unlawful purpose, and the right of inspection will be refused where the purpose is such as levying blackmail,13 or effecting some crime.14

Inspection will not be allowed where information is to be obtained and furnished to a competing company,15 but the mere fact that a stockholder is interested in a rival business concern does not justify refusal of the right.16

In view of the well-known fact that men are often shareholders in different companies, and even officers of the different companies,

tion on that ground, it assumes the burden to prove such improper or illegitimate purpose. Pease v. Chicago Crayon Co., 167 Ill. App. 31.

18 People v. Chicago City Ry. Co., 183 Ill. App. 283.

14 Schmidt v. Anderson, 29 N. D. 262, 150 N. W. 871. See also State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780.

15 Meysenburg v. People, 88 Ill. App. 328; State v. German Mut. Life Ins. Co., 169 Mo. App. 354, 152 S. W. 618; Bevier v. United States Wood Preserving Co. (N. J. L.), 69 Atl. 1008; People v. Consolidated Fire Alarm Co., 142 N. Y. App. Div. 753, 127 N. Y. Supp. 348.

Mandamus will be denied where declared object of examination, sought by executors of deceased stockholder, is to enable the county treasurer to ascertain the value of the stock for taxation, since such information may be obtained by other means, it also appearing that the real object is to obtain information for benefit of business rival. In re Kennedy, 75 N. Y. App. Div. 188, 77 N. Y. Supp. 714.

A stockholder or director who uses a letter file for the benefit of a rival company is misusing his power and betraying his trust as a director.

Heminway v. Heminway, 58 Conn. 443, 19 Atl. 766.

16 Alabama. Cobb v. Lagarde, 129 Ala. 488, 30 So. 326.

Illinois. Furst v. Rawleigh, 154 Ill. App. 522. See also Laughlin v. Chicago Ry. Equipment Co., 185 Ill. App.

132.

Maine. White v. Manter, 109 Me. 408, 42 L. R. A. (N. S.) 332, 84 Atl. 890.

Maryland. Weihenmayer v. Bitner, 88 Md. 325, 45 L. R. A. 446, 42 Atl.

245.

Missouri. State v. German Mut.
Life Ins. Co., 169 Mo. App. 354, 152
S. W. 618.

New York. People v. Ludwig &
Co., 126 App. Div. 696, 111 N. Y.
Supp. 94.
Pennsylvania. Hodder v. George
Hogg Co., 223 Pa. 196, 72 Atl. 553;
Kuhbach v. Irving Cut Glass Co., 220
Pa. 427, 28 L. R. A. (N. S.) 185, 69
Atl. 981.

Washington. State v. Bucklin, 83
Wash. 23, L. R. A. 1915 D 285, 145
Pac. 58.

Where statute is mandatory it is immaterial that stockholder acts in interest of rival corporation. Schmidt v. Anderson, 29 N. D. 262, 150 N. W. 871.

manifestly it cannot be held good ground for refusing inspection of the records of a particular corporation, that the person who requests the privilege is a shareholder and officer in another company, even if the other be a competitor in business.17

To justify a refusal of the right of inspection on the ground that the information is to be furnished to a competing company, it must clearly appear that such is the case.18

§ 2823. Statement of purpose. In some of the earlier decisions it was held that where an application for inspection of books was made, and the motive of the stockholder was questioned, the applicant was bound to make his motive known, and, if he refused, an improper motive might be inferred.19 This is in accordance with the commonlaw rule, and, as has already been noted, frequently resulted in the officers sitting in trial on the motives of the stockholder who desired to inspect the books.20 The effect of the statutes and the later decisions is to make the right of inspection absolute, 21 and the decisions mentioned have been overruled, or are contrary to the great weight of authority.2

22

It is not the province of the corporation or its officers to determine how much of the records and affairs of the company the stockholders may legitimately know; 23 the officers have no right to assume that a

17 So the fact that the stockholder seeking the inspection is also an officer and stockholder in an illegal monopoly does not deprive him of his right of inspection. State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780, in which case it was further held that the proof did not show that the inspection was sought to aid an enterprise carried on contrary to law.

18 An averment in general terms that respondents are advised that one of the purposes of the relator is to obtain knowledge for the purpose of communicating it to competing concerns, unsupported by any allegations of facts indicating the source of such information, the identity of the concerns or the relator's connection therewith, is too indefinite as defense. State v. Ice, 75 W. Va. 476, 84 S. E. 181.

19 Henry v. Babcock & Wilcox Co., 125 N. Y. App. Div. 538, 109 N. Y.

Supp. 853. And see State v.. St. Louis Transit Co., 124 Mo. App. 111, 100 S. W. 1126, where a statement of purpose was held waived.

Directors are clearly entitled to assurance that the information sought is not for the purpose of injuring their business or building up a rival or competitive concern. State V. Jessup & Moore Paper Co., 7 Pennew. (Del.) 397, 72 Atl. 1057.

20 Schmidt v. Anderson, 29 N. D. 262, 150 N. W. 871.

See also § 2814, supra.
21 See § 2815, supra.

22 See In re Steinway, 159 N. Y. 250, 45 L. R. A. 461, 53 N. E. 1103, holding that the right of inspection is absolute.

23 Stone v. Kellogg, 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222, aff'g 62 Ill. App. 444; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729.

stockholder is acting under an improper purpose,24 and they have no right to pass upon the motives of stockholders in seeking information.25

III. CORPORATIONS SUBJECT TO RIGHT

§ 2824. In general. Under the Constitution of California the right of inspection is broadly conferred, but exceptions are made as to religious, educational and benevolent corporations.26

In other states the right may be enforced against public, quasi public and private corporations.27 But usually the statutes provide for the inspection of books of any private corporation.28 And in accordance with the usual rule, members of an incorporated political organization have been held entitled to inspect the list of members, when the information was sought for a proper purpose.29 In addition it has been held that books of a joint stock association are subject of inspection.30 Also, there is no distinction in this country as to the right of inspection when the corporation does the banking business.31 The right of inspection of books of such a corporation exists at common law, and under the statutes.32 It has been said, however, that

24 Stone v. Kellogg, 62 Ill. App. 444, aff'd 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729.

25 Stone v. Kellogg, 165 Ill. 192, 56 Am. St. Rep. 240, 46 N. E. 222, aff'g 62 Ill. App. 444; Pease v. Chicago Crayon Co., 167 Ill. App. 31; Clawson v. Clayton, 33 Utah 266, 93 Pac. 729.

26 California Const. art. 12, § 14. Gavin v. Pacific Coast Marine Firemen's Union of San Francisco, 2 Cal. App. 638, 84 Pac. 270.

27 Thus under Wyoming Rev. St. 1899, § 4194, as to the remedy of mandamus commanding persons and corporation to perform duties, the word "corporation" is not restricted, but is a generic term and includes public, quasi public and private corporations. Wyoming Coal Min. Co. v. State, 15 Wyo. 97, 123 Am. St. Rep. 1014, 87 Pac. 337, 984.

Rev. St. c. 32, § 13, as to corporate books and records and provid

ing for inspection applies to the Chicago City Railway Company. Venner v. Chicago City R. Co., 246 Ill. 170, 138 Am. St. Rep. 229, 20 Ann. Cas. 607, 92 N. E. 643.

28 See § 2811, supra.

29 McClintock v. Young Republicans of Philadelphia, 210 Pa. 115, 68 L. R. A. 459, 105 Am. St. Rep. 784, 59 Atl. 691.

30 In re Hatt, 57 N. Y. Misc. 320, 108 N. Y. Supp. 468.

31 Guthrie v. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433.

32 Harkness v. Guthrie, 27 Utah 248, 107 Am. St. Rep. 576, 1 Ann. Cas. 129, 75 Pac. 624.

U. S. Rev. St. §§ 5211, 5240, 5 Fed. St. Ann. pp. 152, 187, as to appointment of examiners to investigate national banks, do not deprive stockholders in such corporations of common-law right. Guthrie v. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433.

U. S. Rev. St. § 5241, 5 Fed. St.