CORPORATION LAW | B2015
CASE DIGESTS
PARDO v. THE HERCULES
LUMBER CO., INC.
August1, 1924
Street, J
Luciano, Noel Christian O.
Very short case
SUMMARY: Pardo was a stockholder of Hercules Lumber.
He filed this petition for mandamus to compel the
corporation to permit him to inspect the corporate books.
The company alleges that as per board resolution, the
shareholders are only given 10 days in March of that year
to inspect the books. Since Pardo did not inspect the books
within the period authorized by the board, he lost such
right to inspect. The SC disagreed and held that the
resolution cannot unduly abridge the right of the
shareholder to inspect the books.
DOCTRINE: The general right given by statute (that every
shareholder or his duly authorized representative or agent
may inspect the books) cannot be lawfully abridged to the
extent attempted by the board resolution.
It may be admitted that officials in charge of a
corporation may deny inspection when sought at unusual
hours or under other improper conditions but neither can
the executive officers or the board have the power to
deprive the stockholder of the right altogether.
The law declares that the right of inspection can be
exercised “AT REASONABLE HOURS.” This means at
reasonable hours on business days throughout the year
and not merely during some arbitrary period for a few days
chosen by the directors.
The motive of the shareholder exercising the right is
immaterial.
FACTS: Antonio Pardo was a stockholder in the Hercules
Lumber Co. Inc. Pardo files this case for mandamus to allow
him and his duly authorized agent and representative to
examine the records and business transactions of the
company.
It appears that Ignacio Ferrer, the acting corporate
secretary, has refused to permit Pardo to inspect the
necessary records at times desired by Pardo.
The parties agree that as a stockholder Pardo has the
right to inspect the corporate books. However, the main
ground of the defense has reference to the time within
which the right of inspection may be exercised.
ARGUMENTS OF THE COMPANY:
1. Art. 10 of the By Laws state that every shareholder
may examine the books of the company and other
documents pertaining to the same upon the days
which the board of directors shall annually fix
a. During the BOD meeting held on Feb 16, 1924,
the board passed a resolution to the effect that
the books of the company are available for
inspection from March 15 to 25, in appropriate
hours
2. Board resolution constitutes a lawful restriction on
the right conferred by the law
a. Since Pardo did not inspect within the 10 days
allowed by the resolution,he has lost this right to
inspect for this year
ISSUE: WON the board resolution providing for a specific
time within which corporate books may be inspected is valid
HELD: NO
I. The general right given by statute (that every
shareholder or his duly authorized representative or
agent may inspect the books) cannot be lawfully
abridged to the extent attempted by the board
resolution
A. It may be admitted that officials in charge of a
corporation may deny inspection when sought at
unusual hours or under other improper conditions
 CORPORATION LAW | B2015
CASE DIGESTS

1. But neither can the executive officers or the

board have the power to deprive the
stockholder of the right altogether
B. The law declares that the right of inspection can
be exercised “AT REASONABLE HOURS”
1. This means at reasonable hours on business
days throughout the year and not merely
during some arbitrary period for a few days
chosen by the directors

II. The company also argues that Pardo wants to inspect

the books with improper motives. They allege that
the information he seeks is desired for ulterior
purposes in connection with a competitive firm with
which Pardo is connected
A. SC said that this is entirely apart from the issue
B. The motive of the shareholder exercising the right
is immaterial

DISPOSITIVE: Writ of mandamus is issued.