Ingraham, J.:
The relator in his petition makes this application under the provisions of section 29 of the Stock Corporation Law (Laws of 1890, chap. 564,
The petition upon which this proceeding was instituted alleges that the petitioner is the proprietor, holder and owner of record of four shares of the capital stock of the Hational Park Bank, the certificate of ownership being dated the 1st day of February, 1907 ; that the Hational Park Bank is a corporation organized under the acts of Congress relating to the establishment of national banks and lias its principal place of business in the city and county of Hew York ; that on three occasions before the 6th day of May, 1907, the petitioner demanded an inspection of the stock book Of defendant, with which demand the president of the defendant' corporation refused to comply. The first demand seems to have been made on the 18th day of February, 1907, and on the 6th day of May, 1907, [637]*637petitioner made an absolute demand which was refused ; whereupon the petitioner by notice of motion dated May 10, 1907, applied for a mandamus demanding that the defendant permit the relator to have undisturbed inspection of the stock'book of the defendant during at least three business hours daily.
In answer to this application there were submitted affidavits from which it appeared that the attorney for the relator called upon the attorney for the defendant prior to January 1, 1906, stating that he wished to inspect and copy the list of stockholders of the National Park Bank; that he claimed the right to a copy of the list as a stockholder of the bank, and that his, object in seeking the information was to purchase stock in the National Park Bank; that subsequently he again called on the attorney for the defendant bank, but then declined to say for what purpose he desired-the list, intimating that he was not acting for himself, but declined to say for whom he was acting; that he made subsequent demands upon the attorney for the bank, but always refused to state whom he represented in applying for the information; that the relator did not become a stockholder of the bank until February 1, 1907, more than a year after his attorney’s first application for leave to examine and copy the list of stockholders; that the petitioner is a clerk employed by a law firm who is engaged in collecting and adjusting claims against banks and serving psipers; that he has acted in various cases as plaintiff on assigned claims brought by different firms of attorneys, and 'that the same attorney had acted for others who had obtained a small number of shares of stock in other national banks in making similar applications for lists of stockholders of such banks.
In the affidavit of the president of the defendant bank it appeared that in December, 1905, the present attorney for the petitioner called upon him and requested an inspection of the list of stockholders, claiming to be a stockholder, or to represent stockholders, declining to state, however, whom he represented or for what purpose he desired the list of stockholders; that the capital stock of the National Park Bank is divided- into 30,000 shares of the par value of $100 each, and is held by about 800 stockholders, residing in many different States' of the Union and in foreign countries; that upon his knowledge acquired as president of the defendant bank, and the nature of the stockholders of defendant bank, he [638]*638believes and charges it to be the fact that the relator in this proceeding is not a bona, fide stockholder of the bank, and does not desire a list of the stockholders for any proper or legitimate purpose, or for the protection of any proper or legitimate interest of any stockholder in the said bank, but seeks to obtain this list for some ulterior and improper purpose, which may and probably would be detrimental to the interests of the stockholders of the National Park Bank, and desires ah opportunity to show that this inspection' is not sought for a legitimate or proper purpose, but on the contrary is sought for an improper and unlawful purpose; that he, therefore, desires that-- a reference be ordered to inquire into the facts of the relator’s good faith and for the purpose of his application and the bonafides of the ownership of- the stock, and if such reference is ordered -the defendant will pay the expenses thereof. There were no answering affidavits, and these allegations remain undisputed.
There is no express provision of law authorizing a mandamus to enforce the provisions of section 29 of the Stock Corporation Law; but when a stockholder of a corporation shows a legal right to an inspection of the books of the corporation he is entitled’ to enforce that right.by mandamus. This rule, however, is subject to the qualification that the granting of a mandamus- is always in the judicial discretion , of the court, and a strict legal right will not be enforced when it appears that the application is not made in good faith for a legitimate and proper object. It is sufficient in the first instance to show, the existence of a clear legal right to the relief demanded ; but if, in answer to the- application, facts are presented to the court from which the inference can fairly be drawn that the application is not made in good faith for the protection of the applicant or of the corporation, but is made for some ulterior or improper purpose, especially when it appears that a small number of shares of stock of an important financial corporation have been acquired • for the express purpose of -making an application for a list of the stockholders of the corporation which is not to be used by the owners of the stock making the application, but for others whose names are not disclosed and for purposes not disclosed, the burden is cast upon the-party making the application to affirmatively show that he is acting in good faith, for a legitimate purpose and his own [639]*639or the corporation’s protection. In this case it appears that , the attorney who is representing the plaintiff had for over a year prior to the time when the relator acquired his stock, made persistent demands upon the president of this corporation for a list of stockholders, refusing to state for whom he made the demand or the object for which he required this information. These demands being refused, there were then purchased four shares of stock of the defendant corporation, which were transferred to a clerk-in the office of a firm of, attorneys, who shortly thereafter made a demand for an inspection of the stock book as a stockholder, persistently refusing to state the purpose' for which he desired the information, whether or not he was acting for others or for whom he was acting.
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Ingraham, J.:
The relator in his petition makes this application under the provisions of section 29 of the Stock Corporation Law (Laws of 1890, chap. 564,
The petition upon which this proceeding was instituted alleges that the petitioner is the proprietor, holder and owner of record of four shares of the capital stock of the Hational Park Bank, the certificate of ownership being dated the 1st day of February, 1907 ; that the Hational Park Bank is a corporation organized under the acts of Congress relating to the establishment of national banks and lias its principal place of business in the city and county of Hew York ; that on three occasions before the 6th day of May, 1907, the petitioner demanded an inspection of the stock book Of defendant, with which demand the president of the defendant' corporation refused to comply. The first demand seems to have been made on the 18th day of February, 1907, and on the 6th day of May, 1907, [637]*637petitioner made an absolute demand which was refused ; whereupon the petitioner by notice of motion dated May 10, 1907, applied for a mandamus demanding that the defendant permit the relator to have undisturbed inspection of the stock'book of the defendant during at least three business hours daily.
In answer to this application there were submitted affidavits from which it appeared that the attorney for the relator called upon the attorney for the defendant prior to January 1, 1906, stating that he wished to inspect and copy the list of stockholders of the National Park Bank; that he claimed the right to a copy of the list as a stockholder of the bank, and that his, object in seeking the information was to purchase stock in the National Park Bank; that subsequently he again called on the attorney for the defendant bank, but then declined to say for what purpose he desired-the list, intimating that he was not acting for himself, but declined to say for whom he was acting; that he made subsequent demands upon the attorney for the bank, but always refused to state whom he represented in applying for the information; that the relator did not become a stockholder of the bank until February 1, 1907, more than a year after his attorney’s first application for leave to examine and copy the list of stockholders; that the petitioner is a clerk employed by a law firm who is engaged in collecting and adjusting claims against banks and serving psipers; that he has acted in various cases as plaintiff on assigned claims brought by different firms of attorneys, and 'that the same attorney had acted for others who had obtained a small number of shares of stock in other national banks in making similar applications for lists of stockholders of such banks.
In the affidavit of the president of the defendant bank it appeared that in December, 1905, the present attorney for the petitioner called upon him and requested an inspection of the list of stockholders, claiming to be a stockholder, or to represent stockholders, declining to state, however, whom he represented or for what purpose he desired the list of stockholders; that the capital stock of the National Park Bank is divided- into 30,000 shares of the par value of $100 each, and is held by about 800 stockholders, residing in many different States' of the Union and in foreign countries; that upon his knowledge acquired as president of the defendant bank, and the nature of the stockholders of defendant bank, he [638]*638believes and charges it to be the fact that the relator in this proceeding is not a bona, fide stockholder of the bank, and does not desire a list of the stockholders for any proper or legitimate purpose, or for the protection of any proper or legitimate interest of any stockholder in the said bank, but seeks to obtain this list for some ulterior and improper purpose, which may and probably would be detrimental to the interests of the stockholders of the National Park Bank, and desires ah opportunity to show that this inspection' is not sought for a legitimate or proper purpose, but on the contrary is sought for an improper and unlawful purpose; that he, therefore, desires that-- a reference be ordered to inquire into the facts of the relator’s good faith and for the purpose of his application and the bonafides of the ownership of- the stock, and if such reference is ordered -the defendant will pay the expenses thereof. There were no answering affidavits, and these allegations remain undisputed.
There is no express provision of law authorizing a mandamus to enforce the provisions of section 29 of the Stock Corporation Law; but when a stockholder of a corporation shows a legal right to an inspection of the books of the corporation he is entitled’ to enforce that right.by mandamus. This rule, however, is subject to the qualification that the granting of a mandamus- is always in the judicial discretion , of the court, and a strict legal right will not be enforced when it appears that the application is not made in good faith for a legitimate and proper object. It is sufficient in the first instance to show, the existence of a clear legal right to the relief demanded ; but if, in answer to the- application, facts are presented to the court from which the inference can fairly be drawn that the application is not made in good faith for the protection of the applicant or of the corporation, but is made for some ulterior or improper purpose, especially when it appears that a small number of shares of stock of an important financial corporation have been acquired • for the express purpose of -making an application for a list of the stockholders of the corporation which is not to be used by the owners of the stock making the application, but for others whose names are not disclosed and for purposes not disclosed, the burden is cast upon the-party making the application to affirmatively show that he is acting in good faith, for a legitimate purpose and his own [639]*639or the corporation’s protection. In this case it appears that , the attorney who is representing the plaintiff had for over a year prior to the time when the relator acquired his stock, made persistent demands upon the president of this corporation for a list of stockholders, refusing to state for whom he made the demand or the object for which he required this information. These demands being refused, there were then purchased four shares of stock of the defendant corporation, which were transferred to a clerk-in the office of a firm of, attorneys, who shortly thereafter made a demand for an inspection of the stock book as a stockholder, persistently refusing to state the purpose' for which he desired the information, whether or not he was acting for others or for whom he was acting. He was accompanied in making this demand by the attorney who had insisted upon obtaining the information for undisclosed clients, and was represented by the same attorney in instituting these proceedings to-enforce his rights as a stockholder. These facts, I think, required from the relator a free and frank disclosure of his object in making the application, the use to which he wished to put the information that he required, whether or not he was acting on his own behalf or on behalf of others whose names were not disclosed as well as the object in seeking to obtain information to which persons who are not stockholders are not entitled.
There is no question in this case óf any misuse of its corporate franchises by the defendant, and there is no fact stated which shows any necessity for the intervention of the stockholders in the management of the bank. The application is based upon the assertion of the relator’s right.as a stockholder to the inspection of this stock hook. The assertion of the right is met by facts tending strongly to show that the application is not made in good faith by the petitioner, but that this- small number of shares of stock was acquired by him for the "purpose of obtaining information which had been requested sometime before he purchased the stock by an attorney refusing to state the names of those he represented or the purpose for which he wished the information — a situation which, unexplained, if it did not justify á denial of the application, at .least required the court to refuse it until there had been a full and frank disclosure of the persons, if any, back of this application and the purposes for which the information was desired.
[640]*640The courts have always held that applications of this kind are addressed to the sound discretion of the court and should not he granted for an ulterior or'improper purpose. In Matter of Steinway (159 N. Y. 250, 263) it was said that “ A stockholder has the right at common law .to inspect the books, of his corporation at a proper time and place, and for a proper purpose, and that if this right is refused by the officers in charge a writ of mandamus may issue, in the sound discretion of the court, with suitable safeguards to protect the interests of all concerned. It should not be issued to aid a blackmailer, nor withheld simply because the interest of the stockholder is small, but the court should proceed .cautiously and discreetly according to the facts of the particular case. To the extent, however, that an absolute right is conferred by statute, nothing is left to the discretion of the court, but the writ should issue as a matter of'course, although even then, doubtless, due precautions may be taken as to time and place so as to prevent .interruption of business, or other serious inconvenience.” And in speaking of the provisions of this section 29 of the Stock Corporation Law it is said : “The statute merely strengthened the common-law rule with reference to one part thereof^ and left the remainder unaffected. It dealt with but a single book, and as to that it amplified the qualified right previously existing by making it' absolute and extending it to judgment creditors. The stock book has no relation to the business carried on by a corporation arid the change, was doubtless made to enable stockholders to promptly learn who are entitled to vote for directors, and judgment creditors to learn who are liable as stockholders for a failure to- comply with the provisions of the act.” In People ex rel. Lorge v. Consolidated National Bank (105 App. Div. 409) this court, while upholding the right of , a stockholder to an inspection of the stock book .and the making of extracts therefrom, said: “Doubtless the court.has power to withhold an inspection for an illegitimate purpose, and may regulate the time when the inspection shall be made. But where it .is sought for a legitimate purpose and the application is made during business hours, the right to such inspection is mandatory-.”
While the Court of Appeals in the Steinway Case (supra) speaks of the absolute right óf a stockholder to an inspection of this stock book prescribed, by section 29 of the Stock Corporation [641]*641Law, I do not think it was intended to hold that the court had no discretion to refuse a mandamus where the application was not made in good faith but for an ulterior purpose, and to aid undisclosed persons in undisclosed schemes against a corporation. Where; facts are stated which justify an inference that the application is j not made in good faith for the protection or purposes of the applicant, but for the benefit of undisclosed persons for undisclosed purposes, the court has power to and should, before granting the application, require the applicant to frankly state whether or not he is acting at the instigation of others who are undisclosed, and the purpose for which the application is made. This may be accomplished by requiring the relator to submit replying affidavits or appointing a referee to take .proof of the facts and report to the court.
It follows that the order appealed from should be reversed, with| ten dollars costs and disbursements to the prevailing party by thef final order, and the case remitted to the Special Term for further action in accordance with the views here expressed.
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Patterson, P. J., McLaughlin and Scott, JJ., concurred ; Houghton, J., dissented.
See Laws of 1892, chap. 688.— [Rep.