Pratt, J.
In the case first above named, a motion is made for the continuance of an injunction, and for the appointment of a receiver; and, in the second case, there is a motion for a receiver by defendants therein. Immediately after the arguments upon these motions, the defendants submitted a proposed plan of reorganization, and a sworn statement of the assets and liabilities of tlie “Sugar Trust,” so called. By so doing, that part of the preliminary injunction to which there were most strenuous objections became inoperative, to-wit, the part that restrained, any plan or scheme of reorganization, as the whole purpose and effect of that part of the injunction was to restrain the defendants in such scheme until they gave certain information called for, (which has since been done,) so that each of the certificate holders could stand upon an equality, so far as knowing what the scheme was to be, and what was the financial condition of the Sugar Trust. Until such exhibit was made, the injunction was eminently proper, and in accordance with the practice in equity. Neither can I see how an injunction could affect the value of the property in the trust which did not interfere with the manufacture or sale of sugar, nor take one dime from the property belonging to the trust, or depreciate its intrinsic value.
It may be well to consider the relation of the defendants in the first suit to the subject of the suit. The best statement of their position is furnished by the defendants themselves under oath. In the bill of complaint filed by them in the suit of Havemeyer and others against the Brooklyn Sugar Refining Company, and others above named, they state that they have a large amount of property in their hands which they received pursuant to the original trust agreement, which is conceded by them to be unlawful and void, and that they therefore ought not longer to exercise the duties of trustees under it. Certainly, if it be void, they ought not to attempt to perform the duties which its language imposes on them, because such acts would constitute further offenses against law, which would subject the corporations composing the trust to forfeiture of their charters. Besides, they profess to desire to be relieved from responsibility, and from their positions. Now, a most serious question arises, whether or not they have any title, or are anything more than mere custodians of property which belongs to others, to-wit, the certificate holders. At the present time, I think, they are mere custodians. If any argument is required to establish this proposition, it will be found in the history of the organization of the Sugar Trust. It is true that the original agreement cannot be enforced as a contract, but it establishes the fact that each stockholder in each corporation in the trust empowered these 11 persons (trustees) to act in receiving his stock, and in issuing a so-called trust certificate in place thereof, which certificate the stockholder accepted as evidence of his right to an undivided interest in the pool of stock; and it also settled another fact: that these trustees had further power to dispose of the 15 per cent, of the stock of the pool for the benefit of those who should become certificate holders.1 These powers have been executed. The original stockholders have accepted their trust certificates, and some have been sold in the open market by their original holders to persons who have purchased and paid for them. . The same is true of the [130]*13015 per cent, of certificates. It is therefore obvious that, so far as these sales were made by the original holders, they are estopped from questioning the title of the persons who have bought these emblems of title. The holders of Certificates therefore derive title from the stockholders, not from these trustees, but from the original owners of the stock, through and by means of the executed authority given to these trustees by such original stock owners. It is not necessary, however, to determine where the legal title is, as there can be no doubt that they hold the property in a trust capacity, not under the original deed of trust agreement, but under a trust which arises by operation of law. Indeed, upon the argument, it was conceded that the property justly belonged to the trust certificate holders; and, in the bill of complaint just referred to, the plaintiffs, to-wit, these trustees, stated that said board of trustees held the property which came into their hands by virtue of said trust agreement, for which they were willing to account in this action to the certificate holders, in the proportion which the amount of the certificates held by them respectively bears to the amount of the whole number of certificates issued. Wé therefore find the defendants in possession of property belonging equitably to others, which came into their hands under an agreement, void as to the main purpose for which it was made, and which they cannot legally use for the purposes for which it was placed in their hands; and they are utterly powerless to convey and give a good title or to distribute it to its rightful owners. Whether the agreement is.valid, in some respects wherein it has been executed, or whether, under the circumstances, the certificate holders compose a partnership, it is not material now to determine, as these motions relate strictly to the custody and disposition of the property.
The defendants object to the plaintiff Cameron being heard upon these motions, for the reason, as they assert, that he did not own his trust certificate when he began" his suit. This is predicated on the fact that 200 shares of his alleged 1,200 shares of stock were not transferred on the books of the Sugar Trust until the 15th inst., and the suit was commenced'on the 14th inst., thus assuming that he could get no'title without a transfer on the books of the trust; but the only ground for such alleged necessity is the terms of the original Sugar Trust agreement, and, since it is conceded that the instrument is and always has been void, it is difficult to see how it imposes any such restriction. But this objection, if it is valid, does not apply to the stock of Gleason, who also asks for a receiver. It was enough, however, if Cameron was, at the time of commencing his suit, the true owner, although he had not had his stock transferred on the books of the trust. It must be admitted that the rights of the certificate holders are equal, and that the holder of a few certificates is equally entitled to protection with one who owns a large quantity. The Sugar Trust is not a corporation, and hence the statutes applicable to the reorganization of corporations have no application. It is not, therefore, a case where a majority can coerce the minority into any new scheme of reorganization. The purposes of the agreement or copartnership, or whatever it may be called, having failed, each certificate holder has a right to demand that the affairs shall be wound up, and that he have his share of the joint property; and 1 know of no way that such an event can be accomplished, except by the unanimous consent of the certificate holders, or by application to the courts. In the mean time, what is to be done with the property is a" vital question.
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Pratt, J.
In the case first above named, a motion is made for the continuance of an injunction, and for the appointment of a receiver; and, in the second case, there is a motion for a receiver by defendants therein. Immediately after the arguments upon these motions, the defendants submitted a proposed plan of reorganization, and a sworn statement of the assets and liabilities of tlie “Sugar Trust,” so called. By so doing, that part of the preliminary injunction to which there were most strenuous objections became inoperative, to-wit, the part that restrained, any plan or scheme of reorganization, as the whole purpose and effect of that part of the injunction was to restrain the defendants in such scheme until they gave certain information called for, (which has since been done,) so that each of the certificate holders could stand upon an equality, so far as knowing what the scheme was to be, and what was the financial condition of the Sugar Trust. Until such exhibit was made, the injunction was eminently proper, and in accordance with the practice in equity. Neither can I see how an injunction could affect the value of the property in the trust which did not interfere with the manufacture or sale of sugar, nor take one dime from the property belonging to the trust, or depreciate its intrinsic value.
It may be well to consider the relation of the defendants in the first suit to the subject of the suit. The best statement of their position is furnished by the defendants themselves under oath. In the bill of complaint filed by them in the suit of Havemeyer and others against the Brooklyn Sugar Refining Company, and others above named, they state that they have a large amount of property in their hands which they received pursuant to the original trust agreement, which is conceded by them to be unlawful and void, and that they therefore ought not longer to exercise the duties of trustees under it. Certainly, if it be void, they ought not to attempt to perform the duties which its language imposes on them, because such acts would constitute further offenses against law, which would subject the corporations composing the trust to forfeiture of their charters. Besides, they profess to desire to be relieved from responsibility, and from their positions. Now, a most serious question arises, whether or not they have any title, or are anything more than mere custodians of property which belongs to others, to-wit, the certificate holders. At the present time, I think, they are mere custodians. If any argument is required to establish this proposition, it will be found in the history of the organization of the Sugar Trust. It is true that the original agreement cannot be enforced as a contract, but it establishes the fact that each stockholder in each corporation in the trust empowered these 11 persons (trustees) to act in receiving his stock, and in issuing a so-called trust certificate in place thereof, which certificate the stockholder accepted as evidence of his right to an undivided interest in the pool of stock; and it also settled another fact: that these trustees had further power to dispose of the 15 per cent, of the stock of the pool for the benefit of those who should become certificate holders.1 These powers have been executed. The original stockholders have accepted their trust certificates, and some have been sold in the open market by their original holders to persons who have purchased and paid for them. . The same is true of the [130]*13015 per cent, of certificates. It is therefore obvious that, so far as these sales were made by the original holders, they are estopped from questioning the title of the persons who have bought these emblems of title. The holders of Certificates therefore derive title from the stockholders, not from these trustees, but from the original owners of the stock, through and by means of the executed authority given to these trustees by such original stock owners. It is not necessary, however, to determine where the legal title is, as there can be no doubt that they hold the property in a trust capacity, not under the original deed of trust agreement, but under a trust which arises by operation of law. Indeed, upon the argument, it was conceded that the property justly belonged to the trust certificate holders; and, in the bill of complaint just referred to, the plaintiffs, to-wit, these trustees, stated that said board of trustees held the property which came into their hands by virtue of said trust agreement, for which they were willing to account in this action to the certificate holders, in the proportion which the amount of the certificates held by them respectively bears to the amount of the whole number of certificates issued. Wé therefore find the defendants in possession of property belonging equitably to others, which came into their hands under an agreement, void as to the main purpose for which it was made, and which they cannot legally use for the purposes for which it was placed in their hands; and they are utterly powerless to convey and give a good title or to distribute it to its rightful owners. Whether the agreement is.valid, in some respects wherein it has been executed, or whether, under the circumstances, the certificate holders compose a partnership, it is not material now to determine, as these motions relate strictly to the custody and disposition of the property.
The defendants object to the plaintiff Cameron being heard upon these motions, for the reason, as they assert, that he did not own his trust certificate when he began" his suit. This is predicated on the fact that 200 shares of his alleged 1,200 shares of stock were not transferred on the books of the Sugar Trust until the 15th inst., and the suit was commenced'on the 14th inst., thus assuming that he could get no'title without a transfer on the books of the trust; but the only ground for such alleged necessity is the terms of the original Sugar Trust agreement, and, since it is conceded that the instrument is and always has been void, it is difficult to see how it imposes any such restriction. But this objection, if it is valid, does not apply to the stock of Gleason, who also asks for a receiver. It was enough, however, if Cameron was, at the time of commencing his suit, the true owner, although he had not had his stock transferred on the books of the trust. It must be admitted that the rights of the certificate holders are equal, and that the holder of a few certificates is equally entitled to protection with one who owns a large quantity. The Sugar Trust is not a corporation, and hence the statutes applicable to the reorganization of corporations have no application. It is not, therefore, a case where a majority can coerce the minority into any new scheme of reorganization. The purposes of the agreement or copartnership, or whatever it may be called, having failed, each certificate holder has a right to demand that the affairs shall be wound up, and that he have his share of the joint property; and 1 know of no way that such an event can be accomplished, except by the unanimous consent of the certificate holders, or by application to the courts. In the mean time, what is to be done with the property is a" vital question. Shall the business that has been declared illegal be continued, and thus place in jeopardy the charters of all the corporations connected with the trust? Or shall it be taken into custody by the court, and held intact for those interested in it? Shall this vast amount of property be left in the hands of a board, acting without any defined duties or restrictions, without any legal authority, and subject only to the will or discretion of a majority of its members? It is conceded on all sides that, at some time, it will be necessary to apply to the court to appoint some person to dispose of the property of the trust, and divide [131]*131the proceeds. Upon one hand we have certificate holders asking fjr immediate settlement of the trust; and, on the other, the claim that it is not a proper time to interfere with the trustees, as there is a plan of reorganization in process of execution. This latter claim may be answered by saying that a receiver in no way will interfere with a proper plan for reorganization. In fact, no plan can be carried out without a receiver or some one appointed in place of such an officer to dispose of the property, as it will be utterly impracticable to procure the assent of 1,600 certificate holders to come in at once and assent to any scheme of reorganization. The certificate holders, each for himself, has a right to demand that his interest in the property shall be protected in the usual legal way by the courts, and that he shall be left to decide what disposition he will make of his certificates; i. e., to determine for himself whether he will combine with others and form some plan of legal reorganization, or take his share of the trust property. Indeed, in case any legal and satisfactory reorganization scheme is proposed, I see no reason why those certificate holders composing it may not have their share or the bulk of it speedily turned over to them, always leaving enougli of the trust property in the hands of the receiver to meet the demands of creditors and certificate holders who do not care to come into the new scheme. The law of the case in respect to the appointment of a receiver is too plain to require a long statement. Where a bill is filed by one of several partners, it is a matter of course to appoint a receiver upon application of either party. Marten v. Van Schaick, 4 Paige, 479; Innes v. Lansing, 7 Paige, 583; Jackson v. De Forest, 14 How. Pr. 81. In Marten v. Van Schaick, the court said: “Each partner has an equal right to the possession and control of the partnership effects and business, and, if they cannot agree among themselves, it is a matter of course to appoint a receiver. ” In Insurance Co. v. Huber, 13 Phila. 52, it was held that a receiver would be appointed of property in the hands of a person who was a defacto trustee for several owners, upon the application of some of them, and against the opposition of others, and although no fraud or misconduct of the custodian was alleged. “It is not necessary to entitle a party to the appointment of a receiver that the property in question should be in danger. It is enough that a good equitable title should be made to appear, and that the remedy at law would not fulfill the requisition of justice.” Kerr, Rec. (3d Ed.) p. 10. The right of a party to a receiver is a property right, and the discretion of the court must be exercised in accordance with the well-settled rules of law. No sufficient answer has been submitted to these legal propositions; but the defendants insist that the court shall exercise its discretion in permitting them to retain possession of the property, and continue business in the same manner as before, and urge as a reason that the price of the certificates in the market may depreciate. I cannot anticipate any such result. But, if it were true that such would be the effect, it is a good answer to say that judicial decisions cannot be strained to favor speculation in Wall street, where rumors and fabrications usurp the place of facts. Indeed, it is difficult to conjecture any more violent fluctuations in the stock than occurred prior to, any legal proceedings having been taken. If the receiver is appointed, the rights of the parties can be ascertained, and the certificate holders will know what it is their interest to do. If a proper plan of reorganization is prepared, self-interest on the part of the certificate holders will make them anxious to adopt it, so that, if the reorganization is good, the appointment of a receiver will help to carry it out without loss of time; and, in any event, the certificate holders will be enabled to act with full knowledge upon the matter. To my mind there never was a clearer case for the appointment of a receiver. It is always a most embarrassing and unpleasant duty to perform, for the reason that conflicting interests make an unseemly struggle for recognition in the appointment of a receiver. In this case it is peculiarly so, owing to the fact that to the public it might appear that I had exceeded my discretion in taking the prop[132]*132erty from the custody of men off the highest standing in the community for business capacity and integrity of character; bnt it must be remembered that the court at general term has held that the agreement under which they acquired the property is void, as creating a vast monoply, and so against public policy, and that the trust cannot legally further carry on the business. It must also be noted that such a course does not interfere with the manufacture of sugar, but prevents the corporations belonging to the trust from violating the law, and incurring a forfeiture of their charter. I cannot, therefore, but think such a course is not only demanded by law, but it is to the best interest of all concerned; for the public, because it will free the corporations composing the trust from their illegal relations with it, and permit them to become rehabilitated with their former powers and capacity, and thus avoid forfeiture of their charters, and the train of calamities that would follow the interruption of the business of refining sugar; for the certificate holders, because it will preserve the property and facilitate the speedy settlement of the matter, either by a reorganization, if practicable, or a division of the property. The attorney general, it seems to me, has wisely exercised forbearance towards the corporations composing the trust, in order that they might be extricated from their illegal relations without interruption to their business. The appointment of a receiver will accomplish this result, and give assurance that every certificate holder, without discrimination, will be justly dealt with, and a speedy reorganization or distribution of the property will be had. The property is of such a large amount, the business so vast and complicated, that it seems to me wise to appoint at least two temporary receivers, or, if the plaintiffs in the second suit will move that a decree be entered in that suit, appointing permanent receivers, a decree can be entered to that effect. Both parties may submit nominations for receivers, with proposed orders or decree, on or before Thursday, the 6th inst., to be left with the clerk. The amount of bonds will be fixed at the time of naming the receivers.