Stern v. South Chester Tube Company

PETITIONER: Stern
RESPONDENT: South Chester Tube Company
LOCATION: Formerly Sam’s Stationery and Luncheonette

DOCKET NO.: 486
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 390 US 606 (1968)
ARGUED: Mar 25, 1968
DECIDED: Apr 22, 1968

Facts of the case

Question

Media for Stern v. South Chester Tube Company

Audio Transcription for Oral Argument - March 25, 1968 in Stern v. South Chester Tube Company

Earl Warren:

Number 486, J. David Stern, petitioner, versus South Chester Tube Company.

Mr. Freeman.

David L. Freeman:

Mr. Chief Justice, and may it please the Court.

This is an appeal from the judgment of the Circuit Court of Appeals of the Third Circuit affirming the order of the District Court of Pennsylvania dismissing the appellant?s complaint.

The appellant was the plaintiff in the case.

He was a resident of the State of New York and a shareholder in the defendant corporation.

He filed a complaint seeking to have the court grant an order permitting him to examine the books of the defendant corporation.

This is a right given by the statutes of Pennsylvania under which the defendant corporation was incorporated.

The defendant filed an answer or the merits denying the good faith of the plaintiff, the appellant here.

Also, denying that the court had jurisdiction of the subject matter.

Subsequently, just before the case came to trial about three years later, the defendant filed a motion for summary judgment, in which it said that the District Court had no power to grant the type of order prayed for.

That is an order in the nature of a mandamus.

The District Court agreed with the contention of the defendant, dismissed the complaint.

We appealed to the circuit court which also agreed with the contention of the defendant.

Judge Smith wrote the opinion.

It was concurred in by Judge Freedman and Judge Ganey wrote a dissenting opinion.

This appeal then followed.

Under the laws of the State of Pennsylvania, a stockholder is given the right to examine the books of the corporation at reasonable times and for reasonable purposes.

The statutes of the State of Pennsylvania then go on to say that this right to examine the books may be enforced by what is called a writ of mandamus.

Though I surmise that if the statutes had not said so, that the courts in the State of Pennsylvania would probably have found some other method of enforcing this writ either by way of an equity proceeding or by conforming some common law writ of the state.

Now, the courts further have held, that is the courts of the State of Pennsylvania, that the courts of equity in that state can not enforce this right because there is a remedy at law.

But the courts inequity will enforce the right if some other relief is called for or is asked for.

This case we asked for no other relief.

We asked merely to examine the books.

The District Court and circuit court said, Well the State of Pennsylvania calls this a writ of mandamus, you are asking for an order in the nature of a writ of mandamus, we have no right to grant this.

And this position arises in the following manner.

The District Courts being courts of inferior jurisdiction, of course had only the power granted, or rather the jurisdiction granted to them by Congress.

Now, Congress in the original -- under the original judiciary acts and subsequently, has granted the District Court?s jurisdiction in civil matters.

In the first cases which arose on this subject, case of McIntire-Wood -- of the McIntire and Wood McClung versus Sullivan, decided that the -- under this statute the District Courts had no right to grant a writ of mandamus.

In those cases what was prayed for was an order against a land registrar to register a deed.