State ex rel. Richardson v. Swift

Houston, J.:

On the facts alleged and not disputed in this case, I have no doubt upon the general principle involved in it, and the authorities cited in support of it, both in this country and in England, that a stockholder in any joint-stock company, or private corporation incorporated for manufacturing or trading purposes, has such an interest in it and its affairs, as will entitle him in law to an inspection and copies of its books, papers and accounts on reasonable and proper occasions, and when they become material to him as evidence in a suit with another, and this right is denied or refused him by the company or any agent or officer of it having the custody of them, and there is no other specific remedy for it, the right may be enforced by a writ of mandamus from any court having jurisdiction and authority to issue the writ in such a case„

Originally in England, from which country we have derived it in this State, it could only be issued by the Court of King’s Bench, and is thus defined by Lord Mansfield: “ It was introduced to prevent disorder from a failure of justice and defect of police. Therefore it ought to be used upon all occasions when the law has established no specific remedy, and where in justice and good government there ought to be one.” “ If there be a right, and no other specific remedy, this should not be denied.” Rex v. Baker et. al. 3 Burr., 1265. And the fact that by the recent Common-Law Procedure Act, 17 and 18 Vict. c. 125, itis provided that any party requiring any order in the nature of specific performance, may commence his action in any of the Superior Courts of Common Law in Westminster Hall, except in replevin and ejectment, and may indorse upon the writ and copy to be served that he will claim a writ of mandamus, and may renew the claim in his declaration, and if the writ is awarded in the final judgment in the case, it will issue peremptorily in the first instance, certainly shows that it has lost none of its importance and utility in the estimate of later times. The form of this statutory mandamus is very brief, and its execution is enforced by atttachment.

By the second clause of Section 3 of Article 6 of the Constitution of this State, it is ordained that the Superior Court shall have jurisdiction of all causes of a civil nature, real, personal and mixed, at common law, and all other the jurisdiction and powers vested by the laws of this State in the Supreme Court or Court of Common Pleas which were wholly superceded by it under the present amended constitution, and by statute, it is also provided that the Judges of the Superior Court, or any two of them, shall hold pleas of assize, scire facias, replevins, information and actions on penal statutes; and have and determine all and all manner of pleas, actions, suits, and causes, civil, real, personal and mixed, according to the Constitution and Laws of this State, as fully and amply, to all intents and purposes as the justices of the King’s Bench, Common Pleas, and Exchequer in England, or any of them, may or can do. * * * * And generally shall minister justice to all persons, and exercise the jurisdictions and powers hereby granted them, concerning the premises, according to law and equity, as fully and amply, to all intents and purposes whatsoever, as the justices of the King’s Bench and Common Pleas, at Westminster, or the Chancellor of England, may or can do. Revised Code Amended, Chap. 92, Secs. 1 and 2, p. 564. And it is under these comprehensive grants of jurisdiction and powers that this court is vested with authority to issue and enforce the writ of mandamus in this State, as it existed at common law and was recognized by the Court of King’s Bench in England, and for the like purposes of remedial justice when the grants were so made.

Its original quality or characteristic of a prerogative writ upon the theory that it proceeded immediately from the King himself by virtue of his peculiar sovereignty in such a case, never could have existed in this State under any constitution adopted by it, and therefore, it at once became in this State a common law writ in relation to the particular cases to which it was applicable, a writ of right, but not of course, because it could only be obtained and sued out on a special application to the court in term time on a statement of the case supported by affidavit and prima fade sufficient to entitle the applicant to the remedy afforded by it; and which was also originally the case with even that still more valuable and important writ of right, the writ of habeas corpus at common law, until by the great Statute of Charles II, made it issuable at any time, in vacation as well as term time, although it must still be specially applied for aud supported by affidavit when made to the court in session or to a judge of the court in vacation.

This case, however, has been to me a novel and more embarrassing one on account of another aspect in which it has been so cogently presented to us by the counsel for the defendant, and that is, that with all the power vested in this Court to issue this writ within the limits of this State and against any officer of a joint stock corporation chartered by the State and holding his office and residing in it, in such a case as this, we have no power to issue it against the defendant in this case, the President of the Diamond Match Company, because it was not incorporated by the Legislature of this State, but by the Legislature of the State of Connecticut, notwithstanding it is admitted by them on the record that he is the President of the Corporation and resides in this State and city, and has in his possession and custody as such, the books and papers of the Company in question, and has refused on his demand therefor to allow the plaintiff to inspect and take copies of them, and that such residence of the President in this State is not inconsistent with the charter of the corporation of the law of Connecticut, and that his refusal to allow the plaintiff to inspect and take copies of the books and papers of the company in his possession and custody as such in this State is expressly sanctioned and approved by the corporation. It is also admitted that the corporation has been and is still doing business in the manufacture and sale of their friction matches in this city, and has even been directly recognized as such a corporation of the State of Connecticut lawfully and rightfully pursuing the business in the State, by a special act of the Legislature of this State, passed on the 8th day of March, 1881, as follows: “ That the Diamond Match Company, a corporation of the State of Connecticut, be, and it is hereby, authorized to take and hold in fee simple, in New Castle county and State of Delaware, such real estate as may be necessary for the purpose of carrying on the business of the said corporation, and also to sell the real estate, or any portion thereof in fee simple when no longer needed for the said corporation.” It is neither allowable or necessary, I think, to consider that this made it in effect a corporation of the State of Delaware. All I mean to say on this point is that it constitutes an express recognition, not only of its existence as a corporation of the State of Connecticut, but also of its right, as such, to hold real and personal property in this county and to carry on its business in this State; and that the company therefore enjoys these corporate rights and privileges within our limits, not by that implied recognition and comity merely which now prevails so generally among all the states of the Union with respect to such corporations, but by'the express grant of the Legislature of the State.

But of the right of the relator to the evidence which, as a member and stockholder in the corporation, he seeks to obtain within the limits of this State, for the vindication of his rights and the due administration of justice in a suit between him and others in another of our sister States be conceded, as I think it must be, what is there in the nature of the writ of mandamus as it exists, and has always existed in this State under the laws and constitution of it, that forbids this court under the facts and' circumstances presented in this case, to order the issuing of it, provided the court is satisfied that there is no other specific remedy for the legal enforcement of that right ? The answer to this question by the counsel for the defendant is not sufficient in this case in my opinion, because it proceeds, I think, upon an erroneous idea that there still inheres in the nature of the writ under our laws and constitution, such a peculiar quality or restriction, that it can only issue in such a case as this to a corporation or an officer of it under the law which created it, and in the name of the State which incorporated it, or, in other words, that no other judicial tribunal than the appropriate court in the State of Connecticut under the laws of it, can issue the writ to this corporation, or any officer of it, for any such purpose. For if that be so, then it is manifest whatever may be the legal right of the relator to the inspection and copies of the books and papers and papers in question, that he is wholly without any specific remedy in law to enforce it here or elsewhere; because it is equally certain whether we consider it a proceeding in rem or in personam, or as partaking of the nature of both, as the writ is to be specifically executed when issued, and both the custos and the books and papers are in this State, that they could not be reached by such a writ from any court in the State of Connecticut. And although that State may have the power which this has not, to forfeit or revoke the charter of the corporation, and that should be done by it, the relator would still be left without his specific remedy in the case, either there or here.

Although our constitution declares that “the style in all process and public acts shall be the State of Delaware,” and the writ is issued and prosecuted in the name of it on the complaint of the relator, the jurisdiction and authority of this court to issue it in such a case, even if this company were a domestic, instead of a foreign corporation, would not eminate or result from the act of incorporation or the by-laws of the company, but from that higher jurisdiction and authority which, as I have before said, the constitution and laws of the State have conferred upon the court in such a case and over the writ of mandamus and all other well known writs at common law within the limits of the State. And we may therefore admit the correctness of the definition of the writ cited by the counsel for the defendant from Mr. Potter’s work on corporations, Vol. 2, Sec. 634. “That the writ issues by the command of the sovereign power, and in the name of the State, and is directed to some subordinate court, judicature or body within the jurisdiction of the court from which it issues, and it requires the performance by the body to whom it is directed of a specific act, as being the legal duty of the office, character or situation,” Without impairing in any degree whatever the truth and soundness of this proposition.

Well now if such be the general and fundamental principles of the law applicable to such a case, and the President of this corporation is residing in this State and City, and where it is now carrying on to some extent its corporate business, and has the books and papers of it in question in its possession and custody now in this State and within the jurisdiction of this court, and refuses to allow the relator to inspect and take copies of them for the purpose demanded of him, I am not able to perceive, after all the consideration which I have been able to give to the case, any good and valid reason for holding that the case is not within the jurisdiction of the court, or that it ought not under all the facts and circumstances alleged and not disputed in it, to award the writ, as prayed in the petition of the relator. The right of the relator to the inspection and copies which he demands being a right founded on the common law of the State by virtue of his being a stockholder in this corporation, and the res, or books and papers, as well as the corporate custos of them, being within the jurisdiction of this court, and the same principle of the common law which confers that upon the former, imposes the duty on the latter to grant it, on what principle of law or reason can it be said that the case is nevertheless not within the jurisdiction of the court, because the company was not incorporated under a law of this State, but under a law of the State of Connecticut, although that right and that duty exists in both States by a law broader and more general than the act under which it was incorporated ?

¡Notwithstanding the number of cases to which we have been referred by the counsel on both sides in the argument of the case, but two have been cited, one on either side, in which this particular question appears to have been involved, and which seem to be conflicting in their rulings upon it. The first to which I shall refer is the case of The People ex. rel. Jenkins, &c. v. The Parker Vein Coal Co., &c., 10 How., Pr. Rep., 543., before Mitchell, Morris and Clerke, Justices, in the Supreme Court of New York, on appeal from an order of special term refusing mandamus. The Parker Vein Coal Company, the defendant, was an incorporation of the State of Maryland. Its charter created it a corporation for the purpose of working mines of coal and iron, and for vending the proceeds of the same, and gave it power to make by-laws and all such rules and regulations as might be necessary for the proper management of its affairs. The capital stock of the company was not to exceed three millions of dollars to be divided into shares of one hundred dollars each, being thirty thousand shares. The officers of the company had issued one hundred and fifty thousand certificates of shares of stock, being one hundred and twenty thousand more certificates of shares of stock than the company by law was permitted to issue, and purporting to represent twelve millions of dollars more capital than the company possessed, or could possess as established and limited by the law of incorporation. In June, 1854, the company was insolvent and made an assignment to Romaine & Harrow of all their property of every description for the benefit of creditors. The plaintiffs were partners engaged as brokers in the purchase and sale of stocks for themselves, and for account of other persons, and had standing in their names upon the books of the company several hundred shares of the capital stock, of which they were the legal holders and owners, and they also held stock certificates in the usual form issued for a large number of its shares of capital stock and signed by its proper officers, of which they were also the legal holders and owners. One of the by-laws of the company required a book or books to be kept by the company for the transfer of its stock. The corporation had a principal office in the City of New York, and had kept, and then kept at that office books for the transfer of its stock. At the last election of directors of the company, which was after the assignment in June, 1854, the defendants in the cause were elected directors and officers and then had charge of the books; and about the 3d of June, 1854, the officers and directors closed their transfer books, and since that they had refused to permit transfers therein of any of the shares of the capital stock. It was impossible from an inspection oí the certificates of the stock to designate which were the genuine, and which were the over-issue certificates. The plaintiffs had applied to the officers and directors to be permitted to transfer stock to persons to whom they had sold it, and had been refused access to the books; and they claimed that the refusal to permit transfer upon the books was of great detriment to them and their business, was injurious to the company and its stockholders, and depressed the market and the intrinsic value of the stock • and they asked for a mandamus to compel the defendants to open the transfer books to them, and to all other stockholders who might desire to transfer stock.

The plaintiffs insisted that it was not denied that their certificates were a portion of the thirty thousand genuine certificates, and also suggested that the one hundred and twenty thousand over-issue certificates having been issued by officers of the incorporation who were authorized to issue certificates of stock, should be deemed genuine certificates.

Morris, J.,

in delivering his opinion in the case, and after commenting in the strongest terms on the invalidity and illegality of the fraudulent certificates of stock issued by the directors and officers of the company, and observing that if the books should be opened for the transfer of stock, the one hundred and twenty thousand fraudulent certificates could be indiscriminately transferred with the thirty thousand genuine certificates upon the books of the company, and would greatly confuse the evidence in relation to both classes of them, and make it more difficult to trace the false certificates, and to discriminate between the genuine and the spurious, and would enable holders of the false certificates with greater facility to put them in circulation and deceive the ignorant and confiding, held, that the order of the special term before them on appeal should be affirmed and the writ of mandamus denied with costs. And according to the report of it, this seems to have been the ground on which the majority of the three judges decided the case; but Mitchell, J., who concurred in the. decision, also announced his opinion in which he held that the plaintiffs were not entitled to the writ because they had an adequate remedy in an action on the case against the company for damages, and he cited several adjudged cases in his own State to show that such a remedy would be effectual and could readily be obtained for the injury complained of, and he then added, “ There is also another difficulty in this application. The mandamus partakes of the character of a public writ, one in which the people are in some way interested; and it has never been allowed except for the purpose of controlling those who owe a public duty to the State in which it issued. This company was incorporated in Maryland ; and although it has an office here, and may be sued here on its contracts and obligations to individuals, or others, yet it does not owe allegiance or public duties to this State, or according to the laws of this State, but to the State of Maryland, and according to the laws of that State. If it violates its charter, the remedy should be in Maryland and not here. On quo warranto its charter could not be taken away here; and while it does not violate any law of our State, the State should not interfere with it.” This, however, as it was but the opinion of one of the three members of the court, according to the report of it, the case cannot be considered an authority on that point; nor in any authority cited by him in support of it. But is it not a radical error to assume that because the courts in one State have not the power to proceed by a writ of quo warranto to forfeit the charter of a corporation of another State for a violation of it, they have not the power to issue a writ of mandamus against it for the specific enforcement of a legal right of a member of it against the corporation, when he has no other specific or adequate remedy for it, and they have by virtue of their general powers, jurisdiction and authority to issue and enforce a writ of mandamus against it in such a case in their own State? It is not by virtue of any obligation of allegiance that a natural person or a corporation may owe to the State of his birth or its creation even, that they are bound to obey, and are subject to the laws of it, when questions of legal rights and liabilities arise between them and others in courts established for the administration of justice. Although it is denominated a prerogative writ, and must be specially applied for and sufficient grounds shown for it to the satisfaction of the court, it is a common law writ, and in the particular class of cases to which it is applicable by the principles and usages of the law, it is no less so than any other common law writ known to our practice, and the jurisdiction of it and the authority to issue it in such cases was acquired by this court in the same manner as it acquired jurisdiction and authority to issue any other common law writ in a case to which it was by the principles and rules of the common law properly applicable. And if by the laws of this State the case before us be one to which the remedy by writ of mandamus is properly applicable, and the parties to it and the specific subject matter of the suit are within the jurisdiction of the court, can the fact that the property in question, the books and papers to be inspected, belongs to a foreign corporation, or a corporation created by another State, and are in the keeping of an officer or agent of it residing in this State, be any defence in law to it ? The same law which confers upon the relator the right to the inspection demanded imposes on the respondent, the agent of the corporation, and on the corporation itself, so far as it is concerned, the liability to it, and neither is conferred or imposed by the terms of its charter, but by the general law of the State where it was created, as well as here under the facts and circumstances admitted in the case.

The other case alluded to was The State of Nevada ex. rel. Samuel T. Curtis v. H. V. S. McCullough, 3 Nevada, 202. It arose on an application for a writ of mandamus to compel the defendant, McCullough, to deliver to the relator, Curtis, all the books and papers belonging to the office of Superintendent of The Over-man Silver Mining Company, and to admit him to the enjoyment of all the rights incident to the position. The company was an organized corporation under the laws of the State of California, for the purpose of carrying on the mining business in Nevada where the mine of the company was situated. McCullough was elected superintendent of it by the Board of Trustees to hold the office, according to the by-laws, during the pleasure of the board, and entered upon the duties of it, but was afterwards removed from it by the board, and another man by the name of Lambert was substituted, who was also removed, and Curtis, the relator, was appointed. Lambert disclaimed any right, but McCullough refused on demand made to deliver the books and papers of it to the relator, or to transfer the control of the line to him, or to allow him to discharge the duties of the office. The jurisdiction of the court was questioned and denied on the ground that the company was a foreign corporation organized and existing, in the State of California, subject to its laws, and because the appointment of both the relator and the defendant were made in California, and the question of the right of either of them to exercise the powers of superintendent of the company, was cognizable in the courts of California, and because the officers of a foreign corporation cannot be recognized as officers beyond the limits of the sovereignty which creates the corporation. But the court in that case held that it had jurisdiction and the power to issue the writ of mandamus as prayed for in it.

The existence of The Diamond Match Company, as incorporated under the laws of the State of Connecticut to carry on the business in which it is engaged in that and other states of the Union, and for that purpose to erect factories and appoint agents and employ servants in other states, has been expressly recognized by statute in this State, and even without that, its lawful right and authority to do so, if not forbidden by the laws or policy of the State, could not be called in question under the principle of interstate comity in relation to such corporations existing in the several states now so well recognized and established to its fullest extent in this and the other states of the Union. Bank of Augusta v, Earle, 10 Pet., 519.

And therefore, notwithstanding the peculiar and unusual character of it, I have not been able to discover, either upon principle or authority, any well founded objection to the jurisdiction of the court, or the redress sought by the relator in this case; and I will further say that as under the liberal and enlightened comity of the states with respect to the incorporations severally created by them, almost all of the rights and facilities for trade and commerce, buying and selling and making contracts in the line of their legitimate business, and of suing on them in the courts of this and other States, are now as freely enjoyed by the incorporations of other States as by natural persons or partnerships residing in those States, and likewise engaged in a business extending into other States, and with such equality of commercial rights and privileges extended to them, there can be no good or sound reason why the books and papers, and the agent of the company having them in his custody, should in this case be exempted from the jurisdiction of this court and their legal liability to the relator, simply because the company was chartered in another state and is a foreign corporation.

The tendency of decisions in our own courts has long been to consider such corporations when plaintiffs in suits before them, very much the same as they would a natural person from the same State in a like case and position before them, but when the position is reversed, and the interest of such a corporation is on the side of the defendant in the suit, as in this' case, even the comity and favor thus extended in the former case forbids that its charter should be used as a shield of defence and a bar to the jurisdiction of the court in it.