
    Charles W. Troughton, Respondent, v. William R. Grace, Appellant.
    First Department,
    June 28, 1912.
    Corporation—penalty for. failure to furnish, financial statement — complaint —demurrer.
    In an action by a stockholder of a domestic corporation to recover a penalty from its treasurer for his neglect to furnish a financial statement of its affairs in compliance with section 69 of the Stock Corporation Law, it is incumbent on the plaintiff to show- not merely that the corporation is one embraced within the statute; that he holds sufficient of its capital stock to give him a standing to maintain the action; that the defendant is its treasurer and that due demand has been made and refused, but that there has been a violation Of the statute. Such violation is not shown by alleging a demand and failure to comply therewith.
    A complaint in such an action which fails to allege that the defendant has not delivered a financial statement to the plaintiff, or to some other stockholder, during the fiscal year within which the demand was made; is demurrable.
    Appeal.by the defendant, William E. Grace, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 20th day of November, 1911, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’,^ demurrer to the complaint.
    
      Wallace Macfarlane [Lee McCanliss and Samuel J. Rosensohn with him on the brief], for the appellant.
    
      Robert H. Wilson, for the respondent.
   Laughlin, J.:

This is an action by a stockholder of a domestic corporation known as the Evergreens Corporation to recover a penalty of its treasurer for his neglect or refusal to comply with the provisions of section 69 of the Stock Corporation Law of the State of New York (Consol. Laws, chap. 59; Laws of 1909, chap, 61), which, as it existed on the 16th'day of June, .1910, provided as follows:

“Stockholders owning five per centum of the capital stock of any corporation other than a moneyed corporation, not exceeding one hundred thousand dollars, or three per centum where it exceeds one hundred thousand dollars, may make a written request to the treasurer or chief fiscal officer thereof, for a statement of its affairs, under oath, embracing a particular account of all fits, assets and liabilities, and the treasurer shall make such, statement and deliver it to the person presenting the request within thirty days thereafter, and keep on file for twelve months théreafter a copy of such statement, which shall at all times during business hours be exhibited to any ■stockholder demanding an examination thereof; but the treasurer or such chief fiscal officer shall not be required to deliver more than, one such statement in any one year. The Supreme Court, or any justice thereof, may upon application, for good cause shown, extend the time for making and delivering such certificate. For every neglect or refusal of the treasurer or other chief fiscal officer thereof to comply with the provisions of this section he shall forfeit and pay to the person making such request the sum of fifty dollars, and the further sum of ten dollars for every twenty-four hours thereafter until such statement shall be furnished.” Plaintiff owned the requisite proportion of the capital stock of .the company to bring him within the statute, and the corporation was embraced within the statute, and a demand was duly made on said last-mentioned day which was not complied with.

These facts are alleged and the plaintiff demands judgment for the penalty prescribed by the statute. The demurrer is upon the ground that the complaint fails to state facts sufficient to constitute á cause of action. The point made in support of the demurrer is that the complaint does not allege that the defendant had not delivered a financial statement to the plaintiff, or to some other stockholder, during the fiscal year within which the demand was made. The learned counsel for the appellant contends that this is a necessary allegation, and that without it no cause of action is given by the statute. On the other hand, the learned counsel for the respondent urges that the provision that it shall not be necessary to deliver more than one statement in the same year is in the nature of a proviso and not an exception and, theref ore, need not he negatived in the complaint but is a matter of defense.

We are of opinion that it is incumbent on the plaintiff to show not merely that the corporation is embraced within the statute; that he holds sufficient of its capital stock to give him a standing to maintain the action; that the defendant is its treasurer and that due demand has been made and refused, but that there has been a violation of the statute. Such violation is not shown by alleging a demand and failure to comply therewith, for no duty devolved upon the defendant to comply with the demand if he had within the year furnished a statement of the affairs of the corporation to any of its stockholders. The cause of action is not given for every failure to comply with such a demand, but only for a neglect or refusal to comply with the provisions of the section; and it is expressly provided in the' section and in the very sentence upon which the action is based, that the treasurer shall not be required to deliver more than one statement in any one year. It is perfectly plain that the Legislature has not conferred the right upon a particular stockholder to have more than one such statement a year, and for aught that appears in the complaint, such a statement may have been furnished to the plaintiff within the year. We are of opinion that the clause providing that the treasurer shall not be required to deliver more than one such statement in any one year is in the nature of an exception rather than a proviso, as these terms are used in the decisions relating to the burden of pleading and proof. This is not a case where a right of action is given and where the Legislature has elsewhere prescribed what may constitute a defense thereto. Here no cause of action is given unless the treasurer has not furnished such a statement within the year. It is only in the event that such a statement has not been furnished within the year that the statute can be violated by a refusal to deliver a statement. ■ The exception is incorporated in the clause imposing the duty, and constitutes a material part of the description of the acts which constitute the violation of the statute, and if the statute authorized an indictment for a violation of its provisions, it would be essential to negative the exception in the indictment. (United States v. Cook, 17 Wall. 168; Peoples. Stedeker, 175 N. Y. 57.) The same rule should apply to a complaint for a penalty. If the plaintiff had alleged that such a statement had not been furnished to him within the year, but failed to allege that ho such statement had been furnished to any stockholder, it would be necessary to decide whether the Legislature contemplated that the only remedy of stockholders, no matter where they reside, is to go to the office of the company and inspect a copy of a statement on file which may have been furnished to another stockholder; but for the reasons stated that question is not presented for decision, and no opinion is expressed thereon.

It follows-that the interlocutory judgment should be reversed, with costs, and the demurrer sustained, with costs, hut with leave to the plaintiff to amend on payment of the costs of the appeal and of the demurrer.

Ingraham, P. J., Clarke, Miller and Dowling, JJ., concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs.  