RICE v. ROCKEFELLER

RICE v. ROCKEFELLER. N. Y. Court of Appeals, Second Division ; October, 1892. [Reversing 56 Hun, 516.] 1. Associations.] It seems—where a certificate of shares in a trust states that the shares are transferable only on the books of the trustees and that the certificate is “ issued upon condition that the holder or any transferee thereof shall be subject to all the provisions of the agreement creating said trust and of the bylaws adopted in pursuance of said agreement, as fully as if he had signed the said agreement ”—that the relation of holder within the meaning of such trust certificate is given to the purchaser of the shares by their transfer to him from the seller; and that since as holder he is subject to the trust agreement and by-laws, he must be regarded as between himself and his assignor a beneficiary of the trust, although to give htm the character of transferee for the purposes of recognition by the trust a transfer of the stock must be made on its books. 2. Pleadi7ig ; admissi07is.] In an action by a purchaser of the stock of a trust to compel, a transfer of the stock to him upon the books of the trust, the allegations in the complaint purporting to set forth the nature, purpose and effect of the trust agreement under which the stock had been issued were expressly admitted by the answer. The fact was thus admitted that the shares were transferable upon the books of the trust. Hddt that from such admission the inference arose that the conditions were applicable alike to all purchasers and holders of the stock ; and that it was not, therefore, necessary for the plaintff to put the trust agreement in evidence to establish his right of transfer, as it was not to be presumed that it contained any negative provision qualifying his apparent right thereto. If there were any such, it was for the defendant to make it appear. 3. Associations.] Where an agreement between several corporations and partnerships creating a trust provided for the issuing of certificates of shares in the equity of the property held by the trustees transferable on the books of the trust, and certificates, which by their terms were so transferable, were issued and dealt in in open market,—Held, that no discretionary power having been reserved, the trustees could be compelled in like manner as a corporation to allow a bona fide purchaser of such certificates to make his title effectual by transfer on the books of the trust. 4. The samc.\ It is no objection to the exercise of the equitable power of the court to compel such transfer that the purchaser is a business rival of the trust, and his previous conduct shows him to have been hostile to it. Appeal from order of the General Term of the Supreme Court, First Judicial Department, reversing a judgment entered upon the decision of the Special Term in favor •of the plaintiff and granting a new trial. The action was brought by George Rice against John D. Rockefeller and others as trustees of the Standard Oil Trust. The main purpose of the action was to require the defendants to transfer to the plaintiff upon their books six shares of stock in the Standard Oil Trust, on the surrender of the certificates of such shares held by him. The allegations of the complaint were as follows: ■“ 1. This plaintiff alleges upon information and belief that the Standard Oil Trust was created by an agreement in writing, dated on or about the 2nd day of January, 1882, as modified by a supplemental agreement, dated on or about January 4, 1882. That the principal office of said Standard Oil Trust is in the city of New York by the express provisions of said agreement made on or about January 2, 1882. That by the terms of said last named agreement the said trust was vested in nine trustees.. That at the time this action was commenced there was a vacancy in the number of said trustees, the then number being about eight and being the defendants named in this action, other than John Doe and Peter Roe, who are fictitious defendants joined to represent any of said trustees who might have been omitted from the summons as issued herein, this plaintiff being at that time ignorant of the full names and number of said trustees. “•2. That said agreements were made by, or adopted by, all the stockholders and members of certain corporations and limited partnerships therein named, or that might thereafter join in the same at the request of said trustees. Also certain individuals therein named or that might thereafter join in the same at the request of said trustees, Also a portion of the stockholders and members of certain corporations and limited partnerships therein named; also stockholders and members (not being all thereof) of other corporations and limited partnerships' who might join in the same at the request of said trustees: That the said stockholders and most of the other individ-^ uals making or adopting said agreements were, and are* interested as stockholders or otherwise, directly or indirectly, in the mining, manufacturing, refining and dealing in petroleum, and all its products, and all the materials used in said business, and the kinds of business collateral thereto, or in same one or more of the branches or depart v ments of said business above indicated, or growing out of the same, and not mentioned herein. “ That one of the objects of said agreements creating said trust was to secure to the said trustees the general supervision so far as practicable of the affairs of the various corporations, limited partnerships and manufacturers making or adopting said agreements or corporations formed in the place thereof by electing the directors and officers thereof. “ That by virtue of said agreements the said parties so surrendering their bonds, stocks, moneys and other property as aforesaid for said certificates became the beneficiaries under said trust, as did the transferees of said certificates. “ That as plaintiff is informed and believes over 90,000-000 of dollars par value of said certificates have been issued from time to time by the trustees of said Standard Oil Trust. That said certificates have a regular market value and are dealt in freely in the open market in the City of New York, and are held, as plaintiff is informed and believes, at the present time in considerable amounts by many persons who are transferees thereof and not parties to said agreements. “ That this plaintiff, by reason of the purchase of the certificates of said Standard Oil Trust, as hereinafter set forth, became and is a beneficiary under the said trust and brings this action to compel the said trustees to recognize his rights as such beneficiary under the said trust and brings this action to compel the said trustees to recognize his rights as such beneficiary and to discharge their duties-as such trustees in the premises. “ 3. That in or about the month of October, 1886, this plaintiff purchased in good faith of Orvis Brothers & Co., bankers, 44 Broadway, city of New- York, Standard Oil Trust certificate, No. 1987, for five shares of stock duly issued to ohe L. B. Mallaby by the said trustees of said trust in the equity of the property held by the said trustees, paying therefor in his own money one hundred and ninety dollars per share in cash, the said certificate being thereupon duly transferred to plaintiff by said L. B. Mallaby. That a copy of said certificate and transfer is hereto annexed, marked * A ’ prayed to be taken as a part of this complaint. That plaintiff is now the lawful owner and holder of said certificate, and has continued so-to be since the purchase thereof as aforesaid. “ 4. That after, the purchase of said five, shares of stock as aforesaid and prior to the 20th day of June, 1887, a stock dividend was declared by said trustees, that amounted to one share of stock, as plaintiff is informed and believes, on said five shares of stock, and a Standard Oil Trust certificate, numbered 3057, for . one share was issued to said L. B. Mallaby, and by him duly transferred to this plaintiff, who has ever since been the lawful owner and holder of the same. That a copy of said •certificate and transfer are hereto annexed, marked ‘ B.' and prayed to be taken as a part of this complaint. That •said last named certificate was so issued to said L. B. Mallaby as aforesaid for the reason that the said trustees had heretofore repeatedly refused on demand of plaintiff to recognize him as the legal owner of said five •shares of stock or to issue to him a new certificate in his •own name therefor on surrender of the old certificate. “ 5. That on the 20th day of January, 1888, and before the commencement of this action, this plaintiff appeared at the office of the trustees of said Trust, No. 26 Broadway, city of New York, the principal place of •business of said Trust, and made a formal written demand upon said Standard Oil-Trust, its trustees, officers and agents requiring them to transfer said six shares of stock to plaintiff (certificates No. 1987 for five shares, and No. 3057, for one share) upon surrender of the original certificate and to issue to him a new certificate therefor in his own name, at the same time exhibiting the said original •certificates and transfers. That a copy of said written demand is hereto annexed, marked ' C.’ and prayed to be taken as a part of this complaint. That said demand was not complied with but refused, and said six shares of stock still remain untransferred to this plaintiff on the books of said trustees, but are permitted to stand in the name of said L. B. Mallaby who has no title or interest in the same whatever. That some of the dividends on said stock have been paid, from time to time, to said Mallaby, who lays no claim whatever to the same, but pays them over to said Orvis Brothers & Co., who pays-them to this plaintiff. That no dividends have ever been paid on said stock to this plaintiff direct by said Standard Oil Trust. “ 6. That it is recited upon the face of the certificates-of said stock of the Standard Oil Trust that the transfer thereof shall be subject to all the provisions of the agreement creating said Trust and of the by-laws adopted in pursuance of said agreement, as fully as if he had signed, the said trust agreement. That before the commencement of this action, plaintiff, in order to advise himself as' to his rights and liabilities as a stockholder of said Standard Oil Trust, duly demanded of the said Standard Oil Trust, its trustees, officers and agents, an inspection of said agreement creating said Standard Oil Trust, and of the by-laws adopted in pursuance of said agreement, and of any amendments or alterations of the same or of either of them. That said demand was not complied with, but was refused, and this defendant remains wholly ignorant of the contents of said agreement, and by-laws, and the amendments and alterations of the same, by which the plaintiff is bound as fully as if he had signed said agreement, except that since this action was commenced plaintiff has seen newspaper extracts from said agreement, which were said to have been brought out on an investigation of the Senate of the State of New York. “ /. That this plaintiff is wholly unable to secure the legal recognition of his rights as a stockholder as aforesaid by the trustees of said trust, and is utterly remediless in the premises, unless a court of equity will compel said trustees to do what is right and just in the premises. And this plaintiff is now deprived of the right of voting upon said stock, of attending the meetings of the holders of said certificates, and of enjoying sundry other valuable rights to which he is by law entitled. “ Wherefore this plaintiff prays judgment of this court granting him the following relief, viz.: I. That the said trustees of the said Standard Oil Trust be compelled to forthwith transfer to this plaintiff oh the books of said' trustees the aforesaid six shares of the stock of said Standard Oil Trust on surrender to them of said certificates, No. 1987 for five shares, and No. 3057 for one share, hereinbefore referred to, and to issue forthwith to this plaintiff in his own name, a new Standard Oil Trust Certificate for six shares of the said stock. 2. That said trustees hereafter pay to this plaintiff or his lawful transferee, all dividends accruing on said six shares of stock, and accord to him all his legal rights as a certificate holder. 3. That said trustees, officers and agents permit this plaintiff to forthwith inspect the said agreement and by-laws referred to in the certificates of stock of said Standard Oil Trust, and any amendments and alterations of the same or either of them, and to take copies of such portions of the same as he may desire. 4. That this plaintiff recover of the defendants as such trustees, his costs and disbursements of this action. 5. That this plaintiff have such other and further relief in the premises as may be just.” The following is a copy of the certificate of stock of the Standard Oil Trust, purchased by plaintiff, and of the transfer indorsed upon it: “ Shares $100 each.—Standard Oil Trust. Number 1987.—Shares 5. “ This is to certify that L. B. Mallaby is entitled to five shares in the equity to the property held by the trustees of the Standard Oil Trust, tranferable only on the books of said trustees on surrender of this certificate. This certificate is issued upon condition that the holder or any tranferee thereof shall be subject to all the provisions of the agreement creating said trust and the by-laws adopted in pursuance of said agreement as fully as if he had signed the said trust agreement. “ Witness the hands of the president, secretary and treasurer of the board of trustees, this 25th day of August, A. D. 1885, at the city of New York. “Wm. Rockefeller, V. President. “ J. F. Freeman, “ H. M. FláGLER, A. Treasurer. “ Secretary.’’ Upon the back of it is the following, to wit: “ For value received I hereby sell and transfer to George Rice, of Marietta, Ohio, five shares of the Standard Oil Trust standing in my name on the books of said trust. And I hereby irrevocably appoint said George Rice my ■attorney to make the necessary transfer upon the books of said trust, in accordance with the regulations thereof, and upon the conditions expressed on the face of this •certificate. “ L. B. Mallaby. “ Dated August 26th, 1885. “In presence of C. F. Streightoff.” The answer expressly admitted the allegations of the •complaint in reference to the agreement under which the trust- was formed and the other facts set forth in sections one and two of the complaint, except that it denied that any property other than stock and bonds were placed in the trust, that the certificates were dealt in in the open market and that plaintiff by the purchase of the certificates become a beneficiary under the trust. The answer ■also denied the allegations in the complaint as to plaintiff’s purchase of the stock in question contained in the third section, and set up that the plaintiff was not seeking to obtain the transfer of the stock in good faith, but only ¡for the purpose of harassing the defendants. Upon the trial at Special Term the court held that the title of the plaintiff to the stock in suit was duly proved and the position and duties of the defendants under the Standard Oil Trust agreement were sufficiently stated .in the complaint and admitted by the answer; that it having been shown that the stock was dealt in in open market,, and that the plaintiff had purchased his stock in open market in the way and manner permitted by defendants, subject to the trust agreement and by-laws referred to in the stock certificate—the burden was on the defendants-to show that there was some provision or by-laws that prevented plaintiff from having the stock transferred to-his name ; and that the fact that the plaintiff was a trade rival of defendants and had caused suits to be brought against them did not renderjjjt contrary to equity or good conscience for a court of equity to grant plaintiff relief.. The court, therefore, adjudged that plaintiff was entitled to the rights of a transferee of the stock, and directed that the stock be transferred to plaintiffs name on the: book of the trust. The General Term, upon appeal by defendants, reversed’ the judgment of the Special Term upon the ground that plaintiff had failed to affirmatively show that by the terms-of the trust agreement his purchase of the shares of trust entitled him to its. benefits, or to a transfer of the shares upon the books of the Trust; and that plaintiff’s hostile-motives in purchasing the shares furnished additional-ground for refusing relief. [Reported in 56 Hun, 516.] Plaintiff appeals to this court. The further facts are fully stated in the opinion. Edward T. Bartlett (Bartlett, Wilson & Hayden, attorneys) for appellant. I. It was sufficient to plead the Trust agreement according to its legal effect, and these allegations were admitted by the answer (citing Henry v. Cleland, 14 John. 400; Armstrong v. Baldwin, 3 T. & C. 443 ; Sandford v. Halsey, 2 Denio, 235 ; Goodrich v. Rodney, 1 Minn. 195 ; Camden & Amboy R. R. Co. v. Stewart, 4 C. E. Green [N. J.], 343). II. The fact that the Standard Oil Trust is a voluntary association does not in any way relieve it from rules applicable to corporations, when it seeks to exercise the ordinary power of a corporation in selling its stock in the open market to the general public, making it transferable on the books of the trustees (citing Ebbinghaus v. Killian, 9 Wash. L. Rep. 627; note on Voluntary Associations, 4 Abb. N. C. 300, 311; 15 Id. 44; Waterbury v. Merchants’ Union Express Co., 50 Barb. 157; Bray v. Farwell, 3 Lans. 495 ; Westcott v. Fargo, 61 N. Y. 542; Fargo v. McVicker, 55 Barb. 440 ; Liverpool Ins. Co. v. Massachusetts, 10 Wallace, 566; Fargo v. Louisville R. R. Co., 6 Fed. Rep. 787; De Roe v. Smith, 4 T. & C. 690; People ex rel. Platt v. Wemple, 117 N. Y. 136; affi’g 52 Hun, 434; Thomas v. Dakin, 22 Wend. 9; Bank of Watertown v. Assessors of Watertown, 25 Id. 686; People v. Niagara, 4 Hill, 20; affi’d, 7 Id. 506 ; Willoughby v. Comstock, 3 Id. 389; Boisgerard v. N. Y. Banking Co., 2 Sandf. Ch. 23; Gifford v. Livingston, 2 Denio, 380; Leavitt v. Blatchford, 17 N. Y. 521 ; Cook's Stock, Stockholders and Corporations, § 503a., note 1; N. Y. & New Haven R. R. Co. v. Schuyler, 34 N. Y. 80; Holbrook v. N. J. Zinc Co., 57 Id. 616). III. The question of plaintiff’s motive in purchasing the stock is wholly immaterial as a matter of law (citing Seaton v. Grant, 36 L. J. [Ch.] 638; Bloxam v. Metropolitan Ry. Co., 3 Ch. App. Ca. 337; Forest v. Manchester, Sheffield & Lincolnshire Ry. Co., 4 De Gex, F. & J. 126; Robson v. Dodds, 8 Equity Cases L. R. 300; Ramsey v. Gould, 57 Barb. 398 ; Cushman v. Thayer Mfg Co., 76 N. Y. 365). Joseph H. Choate and William V. Rowe (Evarts, Choate & Beaman, attorneys) for respondents. I. The Trust is not a corporation, association or a partnership, and is not subject to the rule applicable in case of stock corporations that notwithstanding the corporate regulation requiring transfers of stock to be registered upon the books of the corporation, the entire legal and equitable title to the stock passes from hand to hand by mere delivery of the certificate with power of attorney in blank (citing McNeil v. Tenth Nat. Bank, 46 N. Y. 325 ; Smith v. Anderson, L. R. 15 Ch. Div. 247; 1 Lindley on Partnership, *365). II. Plaintiff is not entitled to equitable relief because he has failed to satisfy the court that he comes before it with clean hands and without taint of iniquity (citing Cushman v. Thayer Mfg. Co., 76 N. Y. 365 ; Bispham's Eq. Jur. § 376; 2 Story's Eq. Jur. §§ 742, 750, 750a ; 3 Pomeroy's Eq. Jur. §§ 400, 1404; Mechanics Bank v. Seton, 1 Peters, 299; Queen v. Liverpool, etc. R. Co., 21 L. J. N. S. (Q. B.), 284; High Ex. Leg. Rem, §§ 1, 6, 9 ; Davis v. Bank of England, 2 Bing. 409; Re Nat. & Prov. Mar. Co., 15 W. R. 974; affi’d, Id. 1217; Flooks v. Southwestern R. Co., 1 Sm. & G. 142; Forrest v. Manchester R. Co., 4 De G., F. & J. 126; Filder v. London, etc. R. Co., 1 Hem. & M. 489; Rogers v. Oxford, etc. R. Co., 2 De G. & J. 662 ; Comblos v. Phila. & Reading R. R. Co., 4 Brews. (Pa.) 563; Field v. Donoughmore, 1 Dr. & Wor. 227; Thompson v. Blackstone, 6 Beav. 470 ; Curran v. Holyoke Water Power Co., 116 Mass. 90; Sherman v. Wright, 49 N. Y. 227). [MAJORITY — BRADLEY, J.] BRADLEY, J. The defense is founded upon the propositions, (1) that the plaintiff failed to prove that he was-a beneficiary under the Standard Oil Trust agreement or entitled to become such by means of transfer upon the books of the shares represented by the certificates held by him, and (2) that he is not seeking such relation in good faith, but for purposes hostile to the trust, and - for that reason is not entitled to the aid of the equitable powers ■of the court in that behalf. The Standard Oil Trust represents a voluntary association. It was created by agreement of the stockholders of various corporations and others engaged or interested in a certain enterprise and the several branches of business connected with and incidental to it. The effect of its creation is the concentration of supervisory power in .nine trustees, whose certificates of the trust are taken in place of the stock and bonds of the several corporations. The characteristic feature of it is in the voluntary surrender of the control and management of the business of those corporations and in the fact that for its continuance it has. the capacity of succession. The agreement constituted not a partnership, but a trust in behalf of the beneficiaries. And while it is not a corporation, it by the agreement took some of the attributes of a corporation in so far that through its trustees certificates of shares, in the equity to the property held by them, were issued, and were transferable in like manner, apparently, as are those •of corporations. They are transferable on the books of the trustees, and until that is done it is said that the holder is not a beneficiary of the trust. And it is further urged that it does not appear that the plaintiff is entitled to that relation because the • right to transfer upon the books depends upon the provisions of the agreement and by-laws, and compliance with them' in that respect, and as they were not put in evidence the conditions requisite for the purpose do not appear. It is true that the burden was with the plaintiff to show that She was entitled, within the meaning of the agreement and by-laws, to the relation of a transferee or beneficiary, and to have it perfected by transfer on the books. The fact that the shares were transferable, and were for sale in the open market, enabled the plaintiff to become the holder of those he did purchase. It may be observed that, by the terms of the certificates, the shares appear to have been “ issued upon condition that the holder or any transferee thereof shall be subject to all the provisions of the agreement creating said trust, and of the by-laws adopted in pursuance of said agreement, as fully as if he had signed the said- agreement. ” This relation of holder was given the plaintiff when he became such by taking the transfer from Mallaby. It is said that this does not constitute him a transferee, and that transfer on the books was essential to that relation and to make him a beneficiary.. ■By the terms of the certificate the holder and transferee are alike subject to the provisions of the agreement upon which the trust is founded. But to give him the character of transferee for the purpose of recognition by the trust, the transfer on the books is requisite, inasmuch as the shares are transferable only upon them. This is for the benefit and protection of the trust (Bank of Utica v. Smalley, 2 Cow. 770). The holder, as between him and his assignor, having the title, would seem in some sense-to be a beneficiary of the trust, since he is subject to all the provisions of the agreement on which it is founded and its by-laws. The allegations in the complaint of what purport to be the nature, purpose and effect of the agreement, are by the defendants’ answer admitted. The fact thus appears that the shares are transferable on the books of the trustees. From that arises the inference that thp conditions were, applicable alike to all purchasers and holders. And this quality of the shares is recognized by the terms of the certificate and of the blank indorsement for tranfer upon the back and accompanying it, in which .when filled out appears the name of the person designated by the transferer as his attorney to make the necessary-transfer upon the books of the trust in accordance with the regulations thereof and upon the conditions expressed in the certificate. Those conditions are that the transferee shall be subject to all the provisions of the agreements creating the trust and of the by-laws adopted pursuant to it. The quality of transferability given to the shares would seem' to import the right to make it effectual by transfer on the books, as that is treated as essential to accomplish it.i ¡And when the plaintiff applied to have it done it may, in view of what appears in the indorsement upon the certificate as well as in it, be assumed that he sought to have the transfer made to him upon the books ■of the trust “ in accordance with the regulations thereof ” and upon the conditions in the certificate. They seem tb relate to the manner and effect of doing it, and not tb the ■right to have it done. And, therefore, when the essential fact of the transferability of the shares and the general nature and purpose of the trust as created by the agreement were made to appear, as they did by the admitted allegations of the complaint,-there was nothing wanting in the evidence to establish the right of a holder of shares to effectually become a transferee. And it cannot be presumed that there were in the agreement any negativb provisions qualifying such apparent right. If there were any such if was for the defendants to make it appear. In Burrall v. Bushwick R. R. Co. (75 N. Y. 211), the question arose upon demurrer to the complaint which did not allege any facts tending to show that transfer of shares of stock on the books of the company was requisite to perfect it; and it was held that if it was not, no transfer upon them was necessary for such purpose. The defendants here claim that the holder of shares in the trust is not entitled to recognition as such or as transfér'ee until transfer is made on their books, and accordingly it appears that they declined to treat him as a beneficiary for the purpose of receiving dividends upon the shares he had purchased, but paid them to Mallaby, who was named in the certificate as such, and as the consequence the plaintiff was not permitted to take any dividends upon or rights as holder of the shares otherwise than through him. The denial of the right to transfer upon the books is not consistent with the transferable quality of the shares, which imports that the purchaser, taking an assignment of them in a duly formal manner, has the right to become' a transferee within the meaning of the agreement upon which the trust was founded. And it is difficult tb see any substantial distinction in that respect between a holder of such shares and of those of a corporation, which are transferable only upon its books. In such case it is-within the equitable power of the court to compel such transfer to be made (Cushman v. Thayer Mfg. Co., 76 N. Y. 365). And unless some further reason appears for the denial of such right the plaintiff was entitled to such relief in this action. It is evident from what appears that the ground of the refusal of the defendants to grant the plaintiff’s request to make the transfer on the books was personal to him. And they, amongst other matters, by their answer, charge in effect that the plaintiff as competitor of the companies-whose stock is held by the defendants in trust, in the business of manufacturing and dealing in oil products, is hostile to them, and that his demand for transfer of his shares-on the books of the defendants is not in good faith, but that he seeks ic to vex and harass them. Upon that subject the trial court found that since in 1876 the plaintiff has been a competitor and rival of the constituent corporations of the Standard Oil Trust, and since its creation he has been such of the trust in the business of oil refining, and has maintained a hostile attitude and been engaged in hostile transactions and proceedings towards those companies, the trust and the defendants as trustees; that he believes an oil trust ought not to exist, and is opposed generally to trusts of that character, and that since that time to the commencement of this action, he has been prosecuting or aiding in prosecuting litigations and proceedings in courts as well as before the Interstate Commerce Commission, and before an investigating committee in Congress, directed mainly and in effect against such corporations or the trust, for the purpose of securing fro rathe railroads what he considered equal rates with those corporations and such trust for carrying his products. The court also found that the plaintiff, “ having for ten or more years been engaged in the oil refining business!. at Marietta, Ohio, had suffered from discrimination in freight rates for the transportation of oil by various railroad companies against him and in favor of his competitors in the trade ; that the litigations instituted by him before the Interstate Commerce Commission against a number of railroad companies were conducted by the plaintiff in good faith and for his protection from unjust discrimination against him on freight charges by them in such transportation ; and that in quo warranto suits of the State of Ohio against certain named railroad companies it was found as a fact, and determined by the referee in each of them, that a discrimination in freight rates for transportation of oil existed greatly to the injury of the business of the plaintiff in this action; and that his connection with those suits “ was in good faith wholly justifiable and in the protection of his legal rights.” The facts so found by the court in the present action had the support of evidence. And it also appears that the plaintiff proposed and offered to sell his oil property and works to the defendants for a sum greatly in excess of their value, and that in December prior to the creation of the trust he published a severe pamphlet against the Standard Oil Company, which became one of the constituent companies of the trust. In this publication he manifested his hostility to that company for reasons, as he expressed in it, having relation to its rival business methods, which he charged were conducted in a manner and with a purpose to injure and oppress him in his business of like character. In view of all these facts it is urged by the defendants that the motives of the plaintiff in seeking to become a recognized member of the association and beneficiary of the trust, were such as to justify the refusal to permit him by transfer of his shares on its books to take such relation to it. The question of motive of the plaintiff so far as it had any essential bearing in the case was one of fact. And upon that subject the plaintiff testified that he had no hostile purpose in purchasing the shares and in seeking; a transfer of them on the books, but that it was his “ idea if possible to become a record stockholder in order to enjoy the ordinary legal rights of a stockholder.” And the trial court determined that there was nothing in the relations of the plaintiff to the defendants and the trust that should prevent such transfer on the books of the defendants. The plaintiff purchased the shares in the trust with his own money, and he represents no interests or purposes other than his own in this action. His claim is founded upon a right of property lawfully acquired. He, as holder, became subject to the agreement by which the trust was created and its by-láws, and if the transfer to him is perfected he will necessarily continue in such relation of subjection to him. When no discretionary power is reserved to that- effect there is not, nor should be,.any rule of law which will enable a corporation or company whose stock is on sale in the open market to so discriminate between bona fide purchasers who invest- money in it for their own benefit, as to deny to some of them the right to make their title effectual for recognition by the company in the manner provided by it for that purpose. The perfection in such case of the transfer is one of apparent right incident to the purchase, and which the holder who thus acquires the stock in the market is permitted to assume will be effectuáted (Weston’s Case, L. R. 4 Ch. App. 20). A discretion in that respect, when given or reserved by the articles under or pursuant to which the company is organized or in any manner requisite to vest the power in those charged with its executive duties, may be effectually exercised (In re Scranton Iron & Steel Co., L. R. 16 Eq. 559 : 7 Moak, 581 ; Moffatt v. Farquhar, 7 Ch. Div. 591; 23 Moak, 731). In the present case no such discretionary powers seem to have been vested in the trustees. And the purchase of the stock was open to the plaintiff and fairly made by him. Attached to it was the quality of transferability; and with it was presumptively the right of the'beneficial holder to have recognition as such by means of transfer to him on the books of the trust. And this was essential to the protection of his rights derivable from the title. The remedy sought by the plaintiff is within the equitable powers of the court and is founded upon an indubitable title as between him and his vendor, and a right in property. In such case it is difficult to see that motive legitimately becomes a subject of consideration unless the relief in view may for that reason result unjustly to others in whose behalf it is resisted, or to the prejudice -of their legal rights (Bloxam v. Metropolitan R’y Co., 3 Ch. App. 336 ; Ramsay v. Gould, 57 Barb. 398, and cases there cited). And how that could be the consequence is not evident. The transfer on the books to the plaintiff does not change the identity of the shares, but merely substitutes for one another beneficiary ; and the latter is subject to the trust agreement and by-laws. It is true that equitable considerations not recognized in courts of law may control results in courts of equity; And while the granting of relief there is in some sense matter of discretion, it is not an arbitrary or capricious, but a sound judicial discretion controlled by established principles in equity and exercised in view of the circumstances in each case (3 Pom. Eq. Jur. § 1404). The party seeking relief must come into court with clean hands, as such maxim is understood in its application to that rer lation. If, for instance, he appears there under false colors, his complaint may, for that reason, be dismissed. Such was the case of Forrest v. Manchester, etc. R’y Co. (4 D. G. F. & G. 126). There a party filed his bill in behalf of himself and all other shareholders of the defendant company to restrain it from running its vessels, etc. It appeared at the trial that he was also a shareholder in a rival company; that by its direction he instituted the sui.t and by it was indemnified against costs. The bill was dismissed. And on review the Lord CHANCELLOR in holding that the bill was an imposition on the court, and sustaining its dismissal, said: “ It is not that they persuaded him to institute the suit, not that they instigated the suit, but that the directors of the other company have directed the suit andaré to,indemnify the plaintiff against the costs-of it. To use a familiar expression, the plaintiff is the-puppet of that company. ” And he added: “ I have nothing to do with the motiyes of plaintiffs suing in this-court. If they come here in a bona fide character, the reason for their coming here is a matter beyond the province of a court of justice to inquire into. ” In the present case the' plaintiff’s claim to relief is founded upon his own title to the shares in question, and the action was instituted and prosecuted solely for his own benefit. The relief by way -of transfer of his stock upon the books of the trust is not of itself unconscionable. Nor is it seen how it can be prejudicial to any legal rights of the defendants or any other beneficiary. It is not so much to the perfected title in the plaintiff of the shares-that the defendants object as it is to the relation which-he will, as the consequence of the transfer on the books, take to the trust. Nor so much to relief in his behalf as in the alleged apprehension of consequences which may follow its execution. And those are dependent upon the manner he-may conduct himself in that relation, whether offensively or otherwise. Whether the plaintiff would, seek to do anything other than that which legitimately .pertained to the rights of a stockholder is entirely .speculative ; and it is not seen that anything more than that, could be accomplished by him in such relation. The objection before mentioned might be made against any holder of stock, and the reason for its support would be •one of degree. It has no relation to the plaintiff’s legal ■ right founded upon his title; but the court is called upon :to make inquiry beyond that, and into his motives or purposes by which his conduct and actions towards the trust may be influenced if he becomes its recognized beneficiary. As said by a learned text-writer: “ When a court of equity is appealed to for relief it will not go outside of the subject matter of the controversy, and make its interference to depend upon the character and conduct of the moving party in no way affecting the equitable right which he asserts against the defendant, or the relief which he demands ” (1 Pom. Eq. Jur. § 399). Assuming that there may be reasons for denial of relief in an action within equitable jurisdiction there sought, and founded upon unquestionable title fairly obtained, they must be such as to make it appear that the relief may result oppressively or to the undue prejudice of the defendant. In the case at bar the plaintiff’s title to the stock derived from his purchase is not challenged by the evidence, but the ground of the defense is in the standing of the plaintiff in his-relation to the trust of which the defendants are trustees. And this is based upon the fact that his was an attitude of hostility to the Standard Oil Company, and after its creation to the Standard Oil Trust arising out of rivalry in business. This may be a reaaon for making his recognition as a beneficiary undesirable. But while there may be an inherent power or discretion in the trustees of a corporation or company when its due protection requires 'or justifies it, to decline to perfect title to stock by transfer on the books, it cannot be supposed unless the power is duly reserved to or conferred upon them, that they are for that purpose permitted to discriminate between' bona fide purchasers, who are owners and holders of its stock by assignment duly and in due form made to support application for such transfer. And in view of the facts found by the trial court and the preponderance of evidence, as we view it, there seems to be no sufficient reason founded upon the plaintiffls relations to the defendants or to the trust or otherwise to fairly justify a denial to him of the rights of any holder in good faith of the stock of the trust. The suggestion that the plaintiff should not have equitable relief because he has an adequate remedy at law for damages, requires no consideration, as that question does not appear' to have been specifically raised upon the trial •or for determination of the trial court. And in view of the fact that the shares of the trust were unqualifiedly transferable, there seems, for the purposes of the relief, to be no practical or substantial reason to distinguish between them and those of a corporation. There are no exceptions requiring special consideration. These views lead to the conclusion, that the order of the General Term should be reversed and the judgment ■entered on the decision of the Special Term affirmed. All the judges concurred.