Guthrie v. Harkness

The defendant in error was the owner of nearly one fifth of the capital stock of the Commercial National Bank of Ogden, Utah. As such shareholder he applied for leave to inspect the books, accounts, and loans of the bank, which was refused him. He alleges the reasons for seeking such inspection to be that he might ascertain the value of his stock in the bank, and whether the business affairs of the same had been conducted according to law. He charges that loans had been made to patrons of the bank of more than one tenth of the capital stock, in violation of law, and that an inspection of the books, accounts, and loans of the bank would reveal other irregularities. Upon the hearing in the district court the following findings of fact were made:

'1. That the Commercial National Bank of Ogden, Utah, is a corporation organized and existing under and by virtue of the laws of the United States; that said corporation is doing a banking business in Ogden City, Weber county, state of Utah; that the capital stock of said bank is $100,000, divided into 1,000 shares of the par value of $100.00 per share.

'2. That the defendants are directors and have under their control and in their possession all books, papers, accounts, and loans of said Commercial National Bank.

'3. That there is no acting cashier of said bank, and that there has been no such cashier since the 1st day of November, 1902; that J. W. Guthrie is president, A. R. Heywood, vice president, and R. T. Hume is assistant cashier of said bank.

'4. That on or about the 1st day of February, 1903, plaintiff made a demand upon said directors, at the banking house of said bank, and also upon J. W. Guthrie, as president, A. R. Heywood, as vice president and general manager of said bank, and upon R. T. Hume, as assistant cashier of said bank, for permission to permit plaintiff to inspect all books, accounts, and loans of the said bank, and plaintiff made demand for such inspection at such time or times as would not interfere with the proper conducting and operating of said bank.

'5. That each and all of said persons refused permission to plaintiff to inspect the said books, accounts, and loans of said bank at any time or at all and they still refuse to permit such inspection.

'6. That the plaintiff is the owner and has in his possession 183 1/3 shares of the capital stock of said bank, of the par value of $18,333.33, and that said stock appears on the stock books of said bank in the name of the said plaintiff.

'7. That plaintiff sought and now seeks the inspection of the books, accounts, and loans of said bank for the purpose of ascertaining the true financial condition of said bank, and also for the purpose of ascertaining the value of his stock in said bank, and also for the purpose of ascertaining whether the business affairs of the said bank have been conducted according to law.

'The court further finds that sufficient reason exists for the inspection of said books and accounts of said bank.'

Upon this finding the court entered a judgment requiring the defendants to permit the plaintiff to inspect the books, accounts, and loans of the bank at such time or times as would not interfere with the business of the bank.

Messrs. Abbot R. Heywood and George McCormick for plaintiffs in error.

[Argument of Counsel from pages 150-151 intentionally omitted]

Messrs. Hiram H. Henderson and Herbert R. Macmillan for defendant in error.

[Argument of Counsel from pages 151-152 intentionally omitted]

Mr. Justice Day delivered the opinion of the court: