it was customary for banking companies in England to insert in their constitutions a provision for forbidding the inspection of customer's accounts by shareholders or creditors,34 and it seems that the right of a stockholder or other person should not be so extensive as to permit examination of the depositor's accounts, their credit, or anything connected with the private matters of depositors.35 Where a corporation owns approximately no property except the shares of stock of a number of subsidiary corporations which are merely agents or instrumentalities of the holding company, the legal fiction of distinct, corporate entities may be disregarded, and the books, papers and documents of all the corporations may be required. to be produced for examination.36 § 2825. Foreign corporations. This right of inspection is not limited to persons holding stock in domestic corporatons, but when a foreign corporation is doing business within the state, and its books are located there, a stockholder of such corporation has the right to inspect such books.37 And foreign corporations by coming into the state to do business, so far subject themselves to the jurisdiction of Ann. p. 188, providing that banking associations shall not be subject to visitorial powers other than are authorized by title, or are vested in courts of justice, does not by term "visitorial powers," include commonlaw right of stockholder to inspect books of corporation. Guthrie V. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433. A general statute giving stockholders in "all private corporations" the right to inspect and examine the books and papers of the corporation applies to national banks to the same extent as other corporations, at least in the absence of conflicting legislation by congress. Winter v. Baldwin, 89 Ala. 483, 7 So. 734. Under U. S. Rev. St. § 5210, 5 Fed. St. Ann. p. 152, a stockholder in good faith in a national bank is entitled to inspect the list of stockholders. Murray v. Walker, 156 Ky. 536, Ann. Cas. 1915 C 363, 161 S. W. 512. Under Act of Legislature of Feb ruary 24th, 1842, a stockholder has the right to examine the stock ledger of the bank. Cockburn v. Union Bank, 13 La. Ann. 289. 34 Guthrie v. Harkness, 199 U. S. 148, 50 L. Ed. 130, 4 Ann. Cas. 433. 35 State v. Citizens' Bank of Jennings, 51 La. Ann. 426, 25 So. 318. 36 Martin V. D. B. Martin Co. (Del. Ch.), 88 Atl. 612. 37 Klotz V. Pan-American Match Co., 221 Mass. 38, 108 N. E. 764; Andrews v. Mines Corporation, 205 Mass. 121, 137 Am. St. Rep. 428, 91 N. E. 122; State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780. Under Wisconsin St. § 1770b, subd. 10, providing that foreign corporations shall be subjected to all liabilities imposed upon domestic corporations of same character, word "liability" includes legal responsibility and legal duty and such corporation must grant right of inspection under § 1757. State v. Thompson's Malted Food Co., 160 Wis. 671, 152 N. W. 458. the domestic courts that those courts may compel them to grant this right,38 the enforcement of the right not constituting interference with the internal affairs of the foreign corporation.39 The remedy is properly sought in the forum where the records are kept,40 since otherwise the right would be unenforceable.41 In New York, a penal statute has been enacted providing for the inspection of stock books of a foreign corporation having an office for the transaction of business in the state.42 Such a statute has been 38 Nettles v. McConnell (Ala.), 43 So. 838; Swift v. State, 7 Houst. (Del.) 338, 40 Am. St. Rep. 127, 32 Atl. 143, 6 Atl. 856; State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780. See also Klotz v. Pan-American Match Co., 221 Mass. 38, 108 N. E. 764, where the court was presumably inclined to hold that the statutory right of inspection was applicable only to domestic corporations. 39 State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780; Machen v. Machen & Meyer Elec. Mfg. Co., 237 Pa. 212, 42 L. R. A. (N. S.) 1079, Ann. Cas. 1914 B 420, 85 Atl. 100. # * * "It has often been decided that this court will not take jurisdiction, in ordinary cases, to regulate the internal affairs of a foreign corporation which ought to be managed under the laws and by the direction of the courts of the state or country where it is organized. But the right which is sought to be enforced here is one of general, if not universal, recognition from early times. It is referred to in different cases as a right existing at common law. In order to enforce it, the court is not called upon to investigate the internal affairs of the corporation, or to make any order that affects it in the management of its business, or in the relations of stockholders to one another. By virtue of the laws which permit the corporation to do business in this commonwealth and subject it to the jurisdiction of our courts, any proper jurisdiction may be exercised, which concerns its dealings with third par ties here whereby their rights are affected. Rights of third parties, whether they happen to be stockholders or not, if the rights are such as are recognized by our laws, may be enforced by our courts, unless they relate to such internal affairs of the corporation as ought to be regulated only by the courts of the state or country to which it owes its existence. Where all that is desired is an examination of books, and the corporation has a usual place of business in this commonwealth, and the books and their custodian are here, there is every reason of policy and convenience why our courts should enforce a stockholder's right to examine them." Andrews v. Mines Corporation, 205 Mass. 121, 137 Am. St. Rep. 428, 91 N. E. 122. /40 State v. Lazarus, 127 Mo. App. 401, 105 S. W. 780. 41 Nettles v. McConnell (Ala.), 43 So. 838; Mitchell v. Northern Security Oil & Transportation Co., 44 N. Y. Misc. 514, 90 N. Y. Supp. 60. 42 Stock Corp. Law, § 33 (Consol. L. c. 59; L. 1909, c. 61). Hovey v. Proctor & Gamble Co., 139 N. Y. App. Div. 521, 124 N. Y. Supp. 128; Fuller v. O'Connor, 61 N. Y. Misc. 279, 113 N. Y. Supp. 684; Henry v. Babcock & Wilcox Co., 125 N. Y. App. Div. 538, 109 N. Y. Supp. 853; Althause v. Guaranty Trust Co., 78 N. Y. Misc. 181, 137 N. Y. Supp. 945. This statute applies to all foreign stock corporations having an office 44 held to impose an absolute duty to keep the stock book open for inspection, when an office for the transaction of business is maintained in the state, without regard to whether the corporation engages in, or is licensed to engage in business in the state, though the statute is not applicable where the only office maintained by the corporation in the state is a transfer office. The corporation cannot evade liability for the statutory penalty by failing to keep a stock book. The person seeking inspection is merely required to show for the transaction of business in the state, except moneyed and railroad corporations. Wadsworth v. Equitable Trust Co., 153 N. Y. App. Div. 737, 138 N. Y. Supp. 842. 48 Henry v. Babcock & Wilcox Co., 196 N. Y. 302, 134 Am. St. Rep. 835, 89 N. E. 942; Hovey v. Proctor & Gamble Co., 139 N. Y. App. Div. 521, 124 N. Y. Supp. 128. Stockholder of record has right to inspect stock book and may recover penalty in case of refusal. Lawshe v. Royal Baking Powder Co., 54 N. Y. Misc. 220, 104 N. Y. Supp. 361. 44 A foreign corporation having an office in the state is liable for the penalty under this act, though not actually doing business or licensed. Hovey v. De Long Hook & Eye Co., 147 N. Y. App. Div. 881, 133 N. Y. Supp. 25. The act is not to be construed in connection with other statutes requiring such corporations to obtain a certificate to do business and to pay a tax for doing business. Hovey v. De Long Hook & Eye Co., 147 N. Y. App. Div. 881, 133 N. Y. Supp. 25. The statute as thus construed is not in conflict with the Federal Constitution, since there is no attempt to regulate the business of the corporation nor to restrict its business, whether interstate or not. Hovey v. De Long Hook & Eye Co., 147 N. Y. App. Div. 881, 133 N. Y. Supp. 25. Where a corporation had ceased doing business, gave up its office and deposited its books in a brokerage office, and the officers were not unwilling to allow inspection, recovery of the penalty was improper. Fuller v. O'Connor, 61 N. Y. Misc. 279, 113 N. Y. Supp. 684. 45 Althause v. Guaranty Trust Co., 78 N. Y. Misc. 181, 137 N. Y. Supp. 945. Contra, People v. Montreal & B. Copper Co., 40 N. Y. Misc. 282, 81 N. Y. Supp. 974. Maintenance of a transfer office for the convenience of the stockholders and for sale of stock does not constitute maintaining an office for the "transaction of business'' within the meaning of the statute, but the distinction between such offices is recognized by the statute. Wadsworth v. Equitable Trust Co., 153 N. Y. App. Div. 737, 138 N. Y. Supp. 842. In the absence of a statute requiring foreign corporations maintaining transfer agents within the state to keep with them stock books open for inspection, no liability attaches for refusal to permit such inspection. Wadsworth v. Equitable Trust Co., 153 N. Y. App. Div. 737, 138 N. Y. Supp. 842. 46 Hovey v. Proctor & Gamble Co., 139 N. Y. App. Div. 521, 124 N. Y. Supp. 128; Hovey v. Eiswald, 139 N. Y. App. Div. 433, 124 N. Y. Supp. 130. The corporation cannot refuse to allow inspection of its stock book because the book does not comply with every specific requirement of that he is a stockholder, and to prefer his request during business hours.47 Under the statute, agents of the corporation are also liable to the penalty.48 The fact that an action for the penalty has been commenced does not prevent a second action based on another refusal occurring after the commencement of the first action.* IV. DEMAND AND REFUSAL OF INSPECTION 49 § 2826. Demand. Usually a demand for inspection of books should be made at the office where the books are kept or at the principal place of business of the corporation,50 but a demand upon officers of a corporation is a circumstance tending to show an effort to secure examination.51 And it has been held that a demand was sufficient which was made upon the officers of the company personally, and not at the offices of the company.52 If inspection is sought from the officers of a corporation, and the books and records are taken from the stockholder by force when he law. Tyng v. Corporation Trust Co., 104 N. Y. App. Div. 486, 93 N. Y. Supp. 928. 47 Henry v. Babcock & Wilcox Co., 196 N. Y. 302, 134 Am. St. Rep. 835, 89 N. E. 942. 48 The New York Stock Corp. Law, § 33, providing that corporation or "officer or agent" refusing inspection of stock book shall be liable for penalty, does not apply to a selling agent of the corporation, but the word "agent" refers to the transfer agent by whom the stock book should be kept. Hovey v. Eiswald, 139 N. Y. App. Div. 433, 124 N. Y. Supp. 130. Such a selling agent with no power to procure a stock book, no knowledge of the stockholders and nothing that he could allow to be inspected, should not be held liable. Hovey v. Eiswald, 139 N. Y. App. Div. 433, 124 N. Y. Supp. 130. An officer of the corporation is not liable to the statutory penalty for failure to exhibit a book which is not in his possession. Gould v. Olympic Min. Co., 49 N. Y. Misc. 612, 96 N. Y. Supp. 455. 49 Gould v. Olympic Min. Co., 49 N. Y. Misc. 612, 96 N. Y. Supp. 455. 50 Bay State Gas Co. v. State, 4 Pennew. (Del.) 238, 56 Atl. 1114. 51 A demand upon the president as custodian of the books in another state, is not necessary but is a circumstance to show exhaustion of ef forts to secure examination. Bay State Gas Co. v. State, 4 Pennew. (Del.) 238, 56 Atl. 1114. A demand for inspection of corporate books and papers of a bank served upon the directors, and renewed at three o'clock in the afternoon of a certain day, to continue during such hours of the day and evening as would not interfere with the proper conduct of the business of the bank, was made at a proper time and place. Woodworth v. Old Second Nat. Bank, 154 Mich. 459, 15 Det. L. N. 773, 117 N. W. 893. 52 State v. Monida & Y. Stage Co., 110 Minn. 193, 125 N. W. 676, 124 N. W. 971. commences to examine them, it cannot be said as a matter of law that the stockholder did not make a sufficient effort to examine the books.53 A demand may be held to have reached the proper persons though the stockholder is passed along from person to person, and is unable to learn definitely who has custody of the books.54 Unsuccessful efforts for several consecutive days to gain admission to an office where the books should be kept will operate to relieve the stockholder from making a demand for inspection.55 And if a stockholder makes an oral demand for inspection, and also a formal demand in writing, and both are refused, it is useless for him to make further demand.56 Where a letter demanding inspection of books is properly addressed and it is deposited in the post office, postage paid, there is a natural presumption that it will reach its destination by due course of mail.57 This presumption may be rebutted, however, by evidence that the letter was not received.58 The sufficiency of a demand is frequently a question of fact, to be determined from the evidence.59 Also a sufficient demand may be admitted by the pleadings.60 Unreasonable delay in making a demand may operate to bar a suit to enforce the right of inspection.61 It may also be mentioned that 53 So where a stockholder inquired of the president of a foreign corporation and the treasurer and custodian of the books, as well as one or two other stockholders, and the books and records were taken from his possession by force on one occasion, after he had begun to examine them, it cannot be said as a matter of law that the stockholder did not make a sufficient effort to obtain the books for examination before bringing a suit for mandamus. Andrews v. Mines Corporation, 205 Mass. 121, 137 Am, St. Rep. 428, 91 N. E. 122. 54 Eldred v. Elliott, 161 Mich. 262, 126 N. W. 219. 55 Bay State Gas Co. v. State, 4 Pennew. (Del.) 238, 56 Atl. 1114. 56 Pease v. Chicago Crayon Co., 167 Ill. App. 31; State v. New Orleans Gaslight Co., 49 La. Ann. 1556, 22 So. 815. 57 Neubert v. Armstrong Water Co., 211 Pa. 582, 61 Atl. 123. 58 Neubert v. Armstrong Water Co., 211 Pa. 582, 61 Atl. 123. 59 Neubert v. Armstrong Water Co., 211 Pa. 582, 61 Atl. 123. The question of the receipt of the letter containing the demand for an inspection of books held a question of fact. Neubert v. Armstrong Water Co., 211 Pa. 582, 61 Atl. 123. 60 Where the answer to a petition by a stockholder for a writ of mandamus to compel inspection of the books of the corporation admits a general demand to inspect by the petitioner and asserts the right and intention of the respondents to ignore and refuse such demand, the demand sufficiently appears. People v. Chicago City Ry. Co., 183 Ill. App. 283. 61 Foss v. People's Gas Light & Coke Co., 241 Ill. 238, 89 N. E. 351. |