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Feist v. Joseph Dixon Crucible Co.

Decided: March 20, 1954.

MAY M. FEIST, PLAINTIFF, AND AMBROOK INDUSTRIES, INC., PLAINTIFF-RESPONDENT,
v.
JOSEPH DIXON CRUCIBLE COMPANY, A NEW JERSEY CORPORATION, DEFENDANT-APPELLANT



Eastwood, Jayne and Clapp. The opinion of the court was delivered by Eastwood, S.j.a.d.

Eastwood

This appeal concerns itself with the refusal of the appellant Joseph Dixon Crucible Company (hereinafter referred to as "Dixon") to permit the respondent-stockholders of Dixon to inspect its stock transfer books.

The complaint of May M. Feist, filed in the Chancery Division of this court, together with all pending motions and other matters, were later transferred to the Law Division. In the Law Division the Ambrook Industries, also a stockholder of Dixon, was added as a party plaintiff.

In substance, the complaint sets forth the ownership of certain shares of stock of Dixon, a demand for inspection of the stock book for the purpose of obtaining a list of the stockholders and soliciting proxies to be voted at the annual meeting and to circularize an offer to purchase their stock holdings.

On the return day of a rule to show cause why Dixon should not be ordered and directed to permit the plaintiff, her agents and attorneys, to examine the stock and transfer books, the matter came on for hearing before the Law Division, pursuant to the provisions of R.R. 4:88-4.

At the conclusion of the argument the court, having considered the affidavits, depositions and briefs of the parties, determined, inter alia , that Ambrook was entitled to examine and make a copy of Dixon's stock and transfer books. A conformable order was entered, from which Dixon appeals.

Considering the grounds of appeal, we think the trial court did not err in admitting Ambrook as a party plaintiff. It was established that Ambrook was the equitable owner

of the stock registered in the name of May M. Feist, and was also the owner of 125 shares registered in its name. The proofs show that Ambrook had also caused a demand to be made by its attorney for an inspection of the stock and transfer books, which had been refused by Dixon.

Secondly, we are satisfied that the trial judge did not mistakenly exercise his discretion in refusing to continue the hearing on the application for summary judgment to permit appellant to examine other officers of Ambrook. When interrogated by the court as to what appellant hoped to develop if the testimony of such officers were taken, counsel for the appellant stated: "Unfortunately, I cannot tell everything to you now that may be in their minds, until I have a chance to ask them."

Thirdly, in light of the proofs, it is our conviction that the judgment for inspection of the stock books was warranted. N.J.S.A. 14:5-1 is the section of the Corporation Act relied upon for the right of inspection demanded by Feist and Ambrook. It provides:

"Every corporation of this state shall keep at its principal office the transfer books, in which the transfer of stock shall be registered, and the stock books, which shall contain the names and addresses of the stockholders and the number of shares held by them respectively, open at all times during the usual hours for business to the examination of every stockholder, and for the transfer of stock."

Dixon contends that Ambrook's request for inspection was not made in good faith and for proper purposes, but for speculative reasons detrimental to the other stockholders, the corporation, and its employees, in that it planned to make offers to other stockholders of a price much less than its real value, in order to procure a two-thirds stock control of Dixon so that it may liquidate its assets at a great speculative profit and capital gain. Ambrook denies that its ultimate purpose was to bring about a dissolution of Dixon and thereby receive speculative profits and capital gain. It frankly admits -- in fact, it ...


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