Opinion
June 6, 1946.
Proceeding in the matter of Julius Feinberg and another, etc., against Herman Enselberg, etc., for an order directing the respondent as treasurer of Boulevard Sanitarium Corporation to furnish to the petitioners copies of income statements and balance sheets of such corporation.
Application denied.
Turnbull Bergh, of New York City, for petitioners.
Schlesinger Krinsky, of New York City, for respondent.
Application under Article 78, Civil Practice Act, for an order directing the respondent, as Treasurer of Boulevard Sanitarium Corporation, to furnish to the petitioners copies of income statements and balance sheets of said corporation.
A previous application for similar relief was made under Section 77 of the Stock Corporation Law and denied at Special Term. 185 Misc. 358, 56 N.Y.S.2d 741. The denial was "without prejudice to such other proceedings as the petitioners may be advised to take." They now renew their application, as stated in their attorney's brief, "on the basis of the stockholder's common law right to have the information concerning the income and balance sheet of the Corporation."
Under the common law, they are entitled to inspection and examination of the corporate books at a proper time and place and for a proper purpose. Matter of Steinway, 159 N.Y. 250, 53 N.E. 1103, 45 L.R.A. 461. In addition to this common law right, a stockholder of record has the right, by statute, to inspect the stock books of his company, subject to the restrictions set forth in Section 10 of the Stock Corporation Law. Matter of Schulman v. Dejonge Co., 270 App. Div. 147, 59 N.Y.S.2d 119. These rights the respondent has freely allowed, but petitioners choose not to exercise them, because of the alleged expense involved. Under Section 77 of the Stock Corporation Law, these petitioners are entitled to "a statement of its affairs, under oath, embracing a particular account of all its assets and liabilities," but not more than once "in any one year." They have received such statement less than a year prior to the making of the present application, and the respondent is willing to furnish another such statement upon request when said year expires. They are not satisfied with such statement, and demand delivery of "copies of income statements."
They are not entitled thereto, either under the common law or statute. The respondent has given and offers to continue to give to the petitioners all they are entitled to under the law. Matter of Burkan v. Ex-Lax, Inc., 253 App.Div. 754, 300 N.Y.S. 544, cited by petitioners, is not applicable upon the facts here. There inspection was refused by the corporation upon the ground, among others, that the stockholder might learn sufficient facts to manufacture a competitive product, and the discretionary determination of the Appellate Division constituted a safeguard against that danger. We have no such situation here.
Accordingly, the application is denied, with $25 costs.
Submit order.