§ 586.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. Right to inspect corporate books. § 585. A shareholder has a right to inspect the corporate books at reasonable intervals; 1 and may enforce this right by mandamus? His right of inspection may be exercised through an expert or an agent when he is himself too ignorant to exercise it intelligent!} 7 . 3 And where shareholders are permitted by the articles to in- spect the register, a shareholder (an attorney) may inspect it, although he is really acting in the interests of his clients who are in litigation with the company. 4 § 586. On a transfer of shares legal relations ordinarily cease to subsist between the corporation and the shareholder transferring his shares, and — a nova- tion taking place — attach themselves to the trans- feree. 5 It is the American doctrine, however, that a transfer of shares in an insolvent corporation, Transfer of shares. Effect. When cor- poration is insolvent. 1 Deoderick ». Wilson, 8 Bax. (Tenn.) 108; Stone c. Kellogg. Ib5 111. 192; State ex rel. v. Pacific Brew'g Co., 21 Wash. 451. See Angell and Ames on Corp., §681; 2 Lindley on Part., 809- 814. Cases in next note. Penalties are sometimes attached by statute to a refusal of corporate officers to al- low a shareholder to inspect the books. See Lewis v. Brainard, 53 Vt. 510. 2 Cockburn v. Union Bk., 13 La. Ann. 289; Commonwealth v. Phco- nix Iron Co., 105 Pa. St. Ill; Stettauer v. N. Y. etc., Cons. Co., 42 N. J. Eq. 46; Matter of Steinway, 159 N. Y. 250; People v. Lake Shore, etc., R. R. Co. 11 Hun, 1; People v. Pacific Mail S. S. Co., 50 Barb. 280; Foster v. White, 86 Ala. 467; Weihenmeyer v. Bittner, 88 Md. 325. See, Boundette i Sreinard, 52 La. Ann. 1333; Cinn. Volksblatt, Co. o. Hoffmeister, 62 Ob. St. 189. The granting of the writ is discre- tionary and not reviewable on ap- peal. Matter of Sage, 70 X. Y. 221; Matter of Tuttle v. Iron Nat. B'k, 170 N. Y. 9. See Lyon v. Amer. Screw Co., 16 R. I. 472. But the 502 shareholder is not entitled to an action for damages against a corpo- ration for an improper refusal of its officers to permit him to inspect the books. Legendre v. Brewing Ass'n, 45 La. Ann. 669. 3 States. Bienville Oil Works Co., 28 La. Ann. 204; Phoenix Iron Co. v. Coinmouwealth, 113 Pa. St. 563. 4 Reginav. Wilts, etc., Caual Navi- gation, 29 L. T. N. S. 922; Weihen- meyer v. Bittner, 88 Md. 325. 5 This principle is sometimes de- clared by statute, as in regard to na- tional banks, U. S. Rev. Stat. § 5139. " When an original subscriber to the stock of an incorporated company, who is bound to pay the instalments on his subscription from time to time as they are called in by the company, transfers his stock to an- other persou, such other person is substituted not only to the rights, but to the obligations of the original subscriber; and he is bound to pay up the instalments called for after the transfer to him. The liability to pay up instalments is shifted from the outgoing to the incoming share- holder. A privity is created between
