Opinion
March 19, 1962
In a proceeding to compel Pollio Dairy Products Corporation, its president and its secretary, to permit petitioner, a stockholder of the corporation, to inspect its books and records, the corporation and the two officers mentioned appeal from an order of the Supreme Court, Kings County, dated October 30, 1961, which granted petitioner's application. Order reversed, with $10 costs and disbursements, and the matter remitted to Special Term for the purpose of conducting a hearing on the issue of the petitioner's good faith in seeking the inspection of the corporate books and records, and for the purpose of determining such issue on the basis of the evidence which may be adduced. On the present record, the charges of bad faith asserted against petitioner stand undenied. The allegations that petitioner was consorting with competitors raised a substantial issue of fact as to his good faith ( Matter of Sunnydale Farms v. Premium Dairy Co., 7 A.D.2d 737). Under all the circumstances, the learned Special Term Justice was not free, on this record, to exercise his discretion and to conclude that petitioner had shown good faith; he was required to defer the determination of that issue until after a hearing ( Matter of Breswick Co. v. Greater N Y Inds., 308 N.Y. 1041, 1043; Matter of Schwartz v. Travelers Hotel, 5 A.D.2d 880; Matter of Schwartz v. Travelers Hotel, 7 A.D.2d 848; Matter of Carthage Paper Makers v. Mutual Box Bd. Co., 2 A D 175, 177-178). Christ, Brennan, Hill and Rabin, JJ., concur; Ughetta, Acting P.J., not voting.