the place of meeting of the stockholders. In 1849 an act was passed providing

"That all companies incorporated under the laws of this state, whose charters do not designate their places of meeting, shall hold their business meetings, the meetings of their directors, and shall keep their office and the books of the company, in the state of New Jersey; provided that this act shall not apply to any corporations whose charters are not subject, by the terms thereof, to be altered, modified or repealed, or to any incorporated steamboat companies, or to any ferry company, on the waters between this state and either of the adjoining states."'

P. L. 1849, p. 215.

For the proviso in this act there was eventually substituted the words "'in all cases where not otherwise specified by law." Subsequent decisions construed this language to apply to corporations having a special charter which designated a place for the meetings of the stockholders, and which provision could not be changed by the Legislature because the charters were not subject to repeal. Hilles v. Parrish, 14 N. J. Eq., 380, 383; Coe v. N. J. Mid. Ry. Co., 31 N. J. Eq., 105, 117. These cases held that independent of this statute the rule in New Jersey was the same as that in other states, "that a private corporation whose charter has been granted by one state cannot hold meetings and pass votes in another state."

The expression "upon proper cause shown" means a cause, the propriety of which is made to appear to the judicial officer nominated in this section. The essence of this statute is that the propriety of the "cause shown" be committed to the determination of such judicial officer, and for such determination the conclusion reached by the applicant for the order from undisclosed facts, is not a valid substitute. Natl. Packing Co. v. Garven, 78 Atl. Rep., 703.

All corporations organized under the General Act, since 1875, must hold meetings of stockholders in New Jersey, at the principal and registered office of the company.

It would seem to follow from Hilles v. Parrish, 14 N. J. Eq., 380, that any action taken at any stockholders' meeting held outside of New Jersey is void.

Directors may meet outside of the state.

This section is the legislative sanction of New Jersey for the holding of directors' meetings outside of the state. Hilles v. Parrish, 14 N. J. Eq., 380; Thompson on Corporation, Vol. 6, Section 7875, et seq., discusses the rule in detail.

See also Coe v. Midland Ry. Co., 31 N. J. Eq., 105, 117; Parsons v. Leut, 34 Id., 67; Schultze v. Van Doren, 64 Id., 465; aff'd 65 Id., 764.

"Every corporation shall maintain a principal office in this state, and have an agent in charge thereof, wherein shall be kept the stock and transfer books for the inspection of all who are authorized to see the same, and for the transfer of stock."

This is the legislative prohibition against "tramp corporations." Requiring the corporation to "maintain" a principal office is but the statutory declaration of the principle that a corporation "must dwell in the place of its creation and cannot migrate to another sovereignty." Bank of Augusta v. Earle, 13 Pet. (U. S.), 519, 588; Day v. Newark India Rubber Co., 1 Blatchf. (U. S.), 628.

The same doctrine has been asserted by the courts of New Jersey. Coe v. N. J. Mid. Ry. Co., 31 N. J. Eq., 105, 117 (1892).

The company must state in its certificate of incorporation the location by street and number of its principal office. Section 8, subdivision II, as amended in 1898. See p. 35, ante.

This same registration of the principal office must appear in every certificate, report or statement thereafter filed or published. Section 43a, ante.

The office must be accessible to the public.

Besides registering the office in the departments of New Jersey, the office must be known and accessible to the public, having a sign containing the name of the corporation displayed at the entrance to the office.

A failure to do this subjects the directors to a joint and several penalty of two hundred dollars, repeated every thirty days after service of process. Section 45.

Registered agent in charge.

This agent should be a citizen of the state of New Jersey, of full age, or a domestic corporation authorized so to act. Trust companies are given exclusive power to act as the agents of corporations, domestic and foreign, and to register and transfer stocks, and such powers are forbidden to other corporations. See p. 28, ante, P. L. 1899, p. 455. It is clear from an examination of the statutes of New Jersey that it is intended by the state that there shall be no evasion of this provision, but that there shall be an agent actually in charge of the office during business hours.

The name of this agent must be inserted in the certificate of incorporation (Section 43a), and his name must be given in every certificate filed or published by the corporation. Id.

The agent must be authorized to receive process against the company. Section 43a.

This is intended for the benefit of those who desire to sue domestic corporations and to put an end to the evasion of suits in New Jersey by corporations organized under its laws.

There must be not only an authorized agent at the office, but he must be in charge of the office at all times during business hours.''

The agent is required, under Section 33, at all times during business hours to exhibit the stock books to any one entitled to see the same, and to exhibit an annual list of the stockholders made up each year and filed ten days before the annual election. This list must be open to the inspection of any stockholder during business hours. Section 33. The agent must also be authorized to transfer stock.

Inspection of books by stockholders.

*

At common law the stockholder of a corporation had the right to examine at a reasonable time the books and records of the company. Where such right was denied to him he had an action for damages. He also had a remedy by mandamus, but, as was stated in the case of Rosenfeld v. Einstein, 46 N. J. Law, 479, 481, "To warrant this writ against private companies or their officers or agents there must be some specific duty to the relator, expressly imposed by the terms of their charters or necessarily arising from the nature of the privileges or obligations which the charters create. Undoubtedly at proper times and for proper purposes, shareholders are entitled to inspect corporate books." It was held in that case, however, that where there is a fair reason to believe that a party asking for an inspection of corporate books intends to make an improper use of them, and on that ground his request is denied, the court will not aid him by mandamus. "The right is not to be given to gratify curiosity or for speculative purposes, but only when its exercise is sought in good faith, and for a specific purpose. Such purpose must appear by the proofs on the application, or the writ will be denied. In re Steinway, 159 N. Y., 250; 53 N. E., 1103; 45 L. R. A., 461; Phoenix Iron Co. v. Com., 113 Pa., 563; 6 Atl. Rep., 75; Rosenfeld v. Einstein, 46 N. J. Law, 479. The allowance of the writ is within the discretion of the court upon the facts presented in each particular case. Bruning v. Hoboken Printing & Pub. Co., 67 N. J. Law, 119; Garcin v. Trenton Rubber Mfg. Co., 60 Atl. Rep., 1098; Bevier v. U. S. Wood Preserving Co., 69 Atl. Rep., 1008; Huylar v. Cragin Cattle Co., 40 N. J. Eq., 392.

The statute gives each stockholder the express right to examine the stock and transfer books at the company's principal office at all times during business hours (Section 33), and if that right is denied to him the sole remedy is by mandamus. Fuller v. Hollander & Co., 61 N. J. Eq., 648; see also Rothermel v. North American Co., 18 N. J. L. J., 273; Maeder v. Buffalo Bill's Wild West Co., 132 Fed. Rep., 280. The inspection or examination of the books of a corporation cannot be restricted by a provision in the certificate of incorporation or by-laws, in language prohibiting such examination by a stockholder, except where the right is conferred by the statute or by resolution of

the directors or stockholders. The Supreme Court holds such a provision inoperative.

"The power conferred by statute to summarily order the books brought into the state is a futile power, if, after brought here, the provision in the certificate of incorporation or a by-law could nullify

the order of the court for the stockholders to inspect and examine the books, and such a construction should not be given.

* * *

*

"If there be no resolution passed by the directors or by the stockholders, then there is nothing in such a provision in conflict with the common-law right. The fair intent of such a by-law is that the directors will make some provision for inspection at proper times and places and under proper regulations. The court should not construe such a provision to mean that no right to inspect shall exist where the directors or stockholders fail to take action. That is, such a bylaw should not be held operative as against the right of the stockholders." Hodgens v. United Copper Co., 67 Atl. Rep., 756.

It is the settled rule in New York that a stockholder has the right for a proper purpose and at a proper time and place to inspect the corporate books, and that, if such right is denied him by the officers of the corporation, the court may in its sound discretion issue a writ of mandamus to compel an inspection; however, an inspection will not be allowed for an ulterior purpose or to embarrass the corporation, as for instance, where it appears that the inspection is desired in order to furnish information to a competing company. Peo. ex rel. Lehman v. Cons. Fire Alarm Co., 142 App. Div. (N. Y.), 753; In re Steinway, 159 N. Y., 250; In re Taylor, 117 App. Div. (N. Y.), 348; Peo. ex rel. Callanan v. Keeseville, A. C. & L. C. R. R. C., 106 Id., 349; In re Kennedy, 75 Id., 188; In re Latimer v. Herzog Teleseme Co., 75 Id. 522; In re Pierson, 44 Id., 215.

The remedy is by mandamus and not by a bill in equity for discovery. Trimble v. American Sugar Ref. Co., 61 N. J. Eq., 340.

Interrogatories under $155 of the Practice Act cannot lawfully demand inspection of corporate books of an opponent. Wolters v. Fidelity Trust Co., 46 Atl. Rep., 627.

See "Mandamus,' 33 Cent. Dig., Sec. 264.

Inspection of books by directors.

A director is entitled to access to all the books of a corporation because of the duty with which he is charged. Lawton v. Bedell, 71 Atl. Rep., 490.

Order to bring books into the state.

The power conferred by this section summarily to order books of a corporation to be forthwith brought within this state is exercisable by a justice of the Supreme Court, or by the Court of Chancery, only when a situation exists in which the judicial authority whose action

is invoked can exercise control over the books after compliance with the order. That situation constitutes the "proper cause" contemplated by the act. Such jurisdiction of the Court of Chancery is confined to cases where the same are evidential in a cause pending in the court, and cases arising under a bill filed for relief, as well as discovery, or under a bill filed for discovery only, in aid of a prosecution or defence in litigation pending or contemplated. Fuller v. Hollander & Co., 61 N. J. Eq., 648.

As to the power of a grand jury to order books brought into the state for its inspection, see National Packing Company v. Pierre P. Garven, 78 Atl. Rep., 703.

The law being remedial must be liberally construed, but where the law furnishes an adequate remedy by mandamus, equity will not interfere. Stettauer v. N. Y. & Scranton Const. Co., 42 N. J. Eq., 46 and note.

The facts upon which the jurisdiction of the Court of Chancery depends to grant an inspection under this section, therefore, are (1) that the books are outside of the state; and (2) that a proper cause exists for ordering them to be brought into the state.

A refusal to allow a stockholders' authorized attorney to examine them was held to be a denial of the stockholders' rights. Mitchell v. Rubber Reclaiming Company, 24 Atl. Rep., 407.

The statutory authority to order a company to bring its books into the state does not, it seems, embrace, by implication, the authority to order it to bring all its papers and memoranda here also. Huylar v. Cragin Cattle Co., 42 N. J. Eq., 139, 141.

Charter limitations upon rights of stockholders to examine books.

For the purpose of avoiding litigations by stockholders having but a small interest in the company, and more especially to prevent rival concerns from prying into the private accounts and business of the company by purchasing a few shares of stock, it is common to insert in the certificate of incorporation (pursuant to Subdiv. VII of §8) a limitation upon the power of the stockholders to examine the books and accounts of the corporation. See Forms p. 561, post.

A corporation may, by mandamus, compel a corporation to produce within the state its books for examination. Hodgens v. United Copper Co., 67 Atl. Rep., 756.

Effect of entries in books as evidence.

Directors' minutes are evidence of a contract, though written up after the meeting. They need not be in the handwriting of the secretary: if entered under his direction and approved by him they are valid. Wells v. Rahway White Rubber Co., 19 N. J. Eq., 402.

Entries in the books of a corporation are, as a general rule, competent evidence of the proceedings of the corporation and of the acts