
    HENRY McCABE, Appellant, v. J. FRANK EMMONS and FREDERICK N. LAWRENCE, as Pres’t, &c., Respondents.
    W. 7. Stock Exchange—membership therein as property—assignment in bankruptcy.—Injunction.
    
    A seat or membership in the N. Y. Stock Exchange is property of a peculiar nature, and whether it is property which can be reached by the judgment of a court, must be determined on the facts of each particular case, in connection with an appeal to the provisions of the constitution and by-laws of the Exchange, by which the rights and duties of each member arc controlled.
    All the property of an owner of such a scat passes to the assignee in bankruptcy proceedings, by his general assignment, and the subsequent sale by such assignee to another person, vests m that person all the property of the member, as fully as it had been theretofore possessed by the member, and the latter cannot by any assignment or transfer, subsequent to the assignment in bankruptcy, vest any right or interest in said scat in any other person.
    The purchaser from the trustee in then in a position to apply to the Exchange, to have his rights recognized, under its constitution and bylaws,—e. g.t he may offer himself, or he may procure a purchaser of the seat, and nominate him to the Exchange or its proper committee, and ask to have him elected and recognized as a member of the Exchange. The recognition of another person by the Exchange, as a member entitled to the scat through transfer made by the member after Ms assignment in bankruptc)r, is no obstacle to such an application, nor would it be an obstacle to an action to he brought founded upon a wrongful refusal of the Exchange to recognize the applicant’s rights, it being conceded that the membership is not limited by the constitution or by-laws.
    
      Decided January 5, 1885.
    Until such action and proceedings for recognition by the Exchange have been taken by the purchaser from the assignee in bankruptcy, he is not entitled to obtain from the court, relief by way of a judgment that he is entitled to the seat or membership and that the other claimant is not, nor is he entitled to injunctive relief in an action brought against the Stock Exchange and the claimant recognized by it.
    Before Sedgwick, Ch. J., Van Vorst and Freedman, JJ.
    Appeal by plaintiff from judgment dismissing complaint entered upon the decision of the court at special term.
    The facts in the case appear fully in the opinion of the court.
    
      Horatio F. Averill and George F. Betts, for appellant.
    —I. The membership of Erastus F. Mead in the Stock Exchange is property, and the title to the same is vested in and held by the plaintiff (Platt v. Jones, 96 N. Y. 24 ; Powell v. Waldron, 89 Ib. 328 ; Hyde v. Woods, 94 U. S. 523 ; In re Ketchum, 1 Fed. Rep. 840 ; In re Warder, 10 Ib. 275 ; Grocers’ Bank v. Murphy, 60 How. Pr. 426; Ritterband v. Baggett, 42 Super. Ct. 556 ; Elliott v. Mer. Bank of St. Louis, 28 Alb. Law J. 512). The constitution of the Stock Exchange mentions “ membership ” as property, and provides for its sale (Art. 13, § 2, fol. 140 ; Art. 14, § 2, fol. 147; § 3, fol. 149).
    II. One of the valuable rights and privileges to which, as transferee of said membership, the plaintiff is entitled, is to have his name submitted to the committee on admissions of said Stock Exchange for the approval of said committee for admission to membership to said Stock Exchange, or to transfer said membership to some other person, and to have the name of such transferee submitted to the committee on admissions for the approval of said committee for admission to membership of said Stock Exchange (Art. 13, § 1, fol. 140 ; Art. 4, § 3, fol. 120). The circumstance that the approval of the committee on admissions is required before the transfer can be perfected, only diminishes the value of the right to transfer. It does not annihilate it.
    TTT- The plaintiff is obstructed and hindered in applying, as transferee of the membership of Head, to the committee on admissions of the Stock Exchange, by the acts of the defendants. 1. By the act of the defendant Emmons, in obtaining a transfer of the membership of Mead in 1879. 2. By Emmons obtaining the approval of the committee on admissions to that transfer, and by the committee approving the transfer. 3. By electing Emmons a member of the Exchange on the basis of that transfer when the title was in the plaintiff. 4. By announcing to the Exchange that Emmons had been admitted to membership therein, the transfer from Mead being the basis of that announcement. 5. By inscribing the name of Emmons on the roll of said Exchange, the transfer from Mead being the basis for such inscription (Art. 9, Const, fol. 132). (>. By entering in the ledger containing the names of all the members of the Exchange the name of J. Frank Emmons as holding a membership by transfer from Erastus F. Mead. The constitution (Art. 8, fol. 131) provides expressly for such a ledger, making it one of the official documents of the association. 1. By recognizing, from that time until now, Emmons as a member, upon the basis of that transfer from Mead, and Emmons using the privileges of that transferred membership. 8. By taking the position which is set forth in their answers, that Emmons is in fact the transferee of Mead’s membership, and that said transfer was duly made, and that Emmons became a member of the Exchange by virtue of that transfer in connection with other acts. 9. By accepting $500 from Emmons as his initiation fee, and thus putting it out of the power of the Exchange to admit the plaintiff for less than $20,000 initiation fee.
    
      IV. Under the constitution of the Exchange, the committee on admissions could not approve another transfer of Mead’s membership, when that membership has already been transferred to Emmons, and that transfer approved and the transferee admitted to the Exchange (Art. 13, § 1, fol. 140 ; Art. 4, § 3, fol. 120 ; Art. 8, fol. 131). Membership in the Exchange as “ transferee of Mead ” is a recognized status under the constitution. And Emmons has wrongfully intruded into that, with the co-operation of the Exchange, and is wrongfully sustained by the Exchange in that intrusion. The provisions of the constitution are binding on the committee on admissions and on the Stock Exchange, and regulate their powers and mode of procedure (Imperial Hydropathic Hotel Co. v. Hampson, 31 Week. Rep. 330 [Eng. C. of Appeal] ; People ex rel. Elliott v. N. Y. Cotton Exchange, 8 Hun, 216).
    V. The plaintiff has the right to call upon the court to interpose and compel action on the part of the defendants for the purpose of removing any obstruction or obstacle that may stand in the way of a complete realization by the plaintiff of the value of the property transferred to him (Platt v. Jones, 96 N.Y. 24; Cohen v. N. Y. Mut. Ins. Co., 50 Ib. 610; Meyer v. Knickerbocker Ins. Co., 13 Ib. 524; Hayner v. Am. Pop. Ins. Co., 36 Super. Ct. 214; S. C., affirmed, 62 N. Y. 620 ; Phelps v. McDonald, 99 U. S. 298).
    VI. The Stock Exchange are trustees for McCabe to act in protection and preservation of his rights. McCabe has rights in this voluntary association—in some respects less than those of full membership—but none the less rights. The Stock Exchange have violated these rights, and still continue to violate them. They have been active cooperators with Emmons in wrongfully transferring the membership, which is the plaintiff’s property. This court as a court of equity, should compel the trustee to redress this wrong (Willard’s Equity, 405 ; Davis v. Mayor, 1 Duer, 498; Milhau v. Sharp, 15 Barb. 193; Hascall v. 
      Madison University, 8 Barb. 174 : Johnson v. Brooks, 93 N. Y. 343).
    VII. By their acts the defendants have created, and still keep, a cloud on the plaintiff’s title to this membership, and the plaintiff is entitled to the assistance of this court to remove that cloud (Costello v. Costello, 14 Fed. Rep. 207; Remington Paper Co. v. O’Dougherty, 81 N. Y. 474; Powell v. Haslett, 5 Lans. 380 ; Bruce v. Gallagher, 5 Blatchf. 481). It is evident that while the defendant Emmons holds his seat as the transferee of Mead, and the Exchange sustain him in it, and their ledger shows him to hold that seat by that title, the plaintiff could not sell this property to any advantage, or for its full value.
    VIII. The court should have granted an injunction to restrain the defendants from continuing to do the acts which are injurious to the plaintiff’s rights (Phelps v. McDonald, 99 U. S. 298 ; High on Injunctions, §§ 1230 and 1330 ; Erpstein v. Berg, 13 How. Pr. 91; First Ref. Pres. Ch. v. Bowden, 10 Abb. N. C. 1; Zillendorf v. Calkins, 23 Hun, 156; Lacustrine F. Co. v. L. S. & F. Co., 82 N. Y. 476 ; Amer. Guano Co. v. U. S. Guano Co., 44 Barb. 3; Daly v. Smith, 38 Super. Ct. 158 ; Woodruff v. Bloomfield Co., 18 Fed. Rep. 806 ; West Point Iron Co. v. Reymert, 45 N. Y. 703 ; Trevor v. Jackson, 15 Abb. Pr. N. S. 115 ; Gold & S. Tel. Co. v. Todd, 17 Hun, 548).
    
      Lester W. Ciarle, for respondent Emmons ; Scudder & Carter, attorneys, and James C. Carter, and Lewis Cass Ledyard, of counsel, for respondent Lawrence.
   By the Court.

Freedman, J.

There seems to be no dispute as to the facts found by the learned judge below. The most material ones are as follows :

In 1873 one Erastus F. Mead, then a regular member of the N. Y. Stock Exchange, in involuntary proceedings in bankruptcy in the district court of the United States for the southern district of New York, was duly adjudged a bankrupt, and he assigned, by deed duly executed, all Ms property and effects to Samuel H. Vandewater as trustee for the benefit of his creditors.

Notwithstandmg such assignment, Mead continued to enjoy his seat or membership in the Exchange and to pay the dues payable thereon, according to the constitution and by-laws of the Exchange until March, 1879, when the defendant Emmons—having obtained, in accordance with the constitution and the by-laws of the Exchange, the approval of two-thirds of the committee on admissions—procured a transfer to himself from Mead of the seat or membership of the latter, and was thereupon recognized as a member of the Exchange, and thereafter acted as such and paid the dues and assessments on his seat.

In December, 1882, Vandewater, as trustee, sold at public sale the right, title and interest of Mead in his seat or membership, to the plaintiff McCabe, for the sum of one dollar, and the plaintiff became the purchaser thereof.

McCabe never took any step, other than the bringing of this action, to assert any right which he claimed to have acquired by his purchase, His business is not, and never was, that of a broker or dealer in stocks or kindred securities. He did not in any manner offer himself to the Exchange or the committee on admissions, for approval as a member of the Exchange, nor did he ever seek from the Exchange or said committee the approval of any person whom he supposed to be suitable as a member and to whom he proposed to transfer his rights. He seeks by this action, in substance, to accomplish three things, viz.: CL.) To have this court declare that he is the transferee of the seat or membership of Erastus F. Mead, and entitled to all the rights and privileges of a transferee of such membership; (2.) To have this court declare that Emmons is not the transferee of the seat or membership of Mead, nor entitled to any of the rights and privileges of a transferee ; and, (3.) To have Emmons and the defendant Lawrence, as- president of the N. T. Stock Exchange, enjoined—Emmons from acting as a member, and the defendant Lawrence from recognizing Emmons as a member, of the Exchange.

A mere declaration by this court of the respective rights of McCabe and Emmons would answer no useful purpose. Courts are not instituted or appointed to inform suitors what their rights are. As a general rule, suitors should be left to seek such information from their counsel. The real question presented by the appeal is whether the plaintiff has made out a cause of action for injunctive relief.

A seat or membership in the H. Y. Stock Exchange undoubtedly is property for certain purposes, but even then it is property of a peculiar nature. It is not a tangible thing, and whether in a given case it is a chose in. action, depends upon whether the party entitled to it has rights under it which a purchaser from him or a transferee by operation of law, can enforce. The question, whether it is property which can be reached by the judgment of a court, must therefore be determined upon the-facts of each particular case in connection with an appeal to the provisions of the constitution and the by-laws of the Exchange by which the rights and duties of each, member are defined and controlled (Hyde v. Woods, 91 U. S. Supreme Ct. 523; Powell v. Waldron, 89 N. Y. 328 ; Platt v. Jones, 96 Ib. 21). The question as to the' character of the property involved in such a seat or membership is so fully discussed in these authorities, that further discussion here is unnecessary.

The property in the seat or membership of Mead,, whatever it was, as between the plaintiff and the defendants, as well as between Mead and Vandewater, passed by the assignment in bankruptcy from Mead to Vandewater, and vested in Vandewater as fully as it was before possessed by Mead. By that assignment Mead was as fully and completely divested of his property in the seat or membership as he could be by any paper or instrument which he could execute. He could do nothing more to> vest a complete and perfect title as against himself, in Vandewater (Platt v. Jones, 96 N. Y. 24). Whatever property Vandewater thus acquired, passed, upon the sale by him to McCabe, to the latter, and the plaintiff consequently stands before the court in the shoes of the assignee in bankruptcy.

This being so, and the plaintiff having all the rights which an assignee in bankruptcy could claim, he is in a position to apply to the Exchange to have his rights recognized ; that is to say, he may procure a purchaser of the seat and nominate him to the Exchange or the appropriate committee thereof, and ask to have him elected a member of the Exchange as provided by its constitution and by-laws.

The plaintiff having failed to do any of these things, and it appearing that neither the Exchange nor any committee thereof has refused or threatened to refuse to consider an application to be made by the plaintiff for the purposes referred to, this court cannot assume that the Exchange, or the appropriate committee thereof, will, upon a proper application by the plaintiff, refuse to do what in equity and justice it ought to do. Upon this point, the principle laid down by the court of appeals in Platt v. Jones (supra) is conclusive against plaintiff’s prayer for injunctive relief at this stage of the proceedings.

The recognition of Emmons by the Exchange, although it may hereafter lead to a controversy between him and the Exchange, is no obstacle to a proper application on the part of the plaintiff, nor would it be an obstacle to an action to be brought by the plaintiff, founded upon a wrongful refusal of the Exchange to recognize plaintiff’s rights, for it is conceded that the number of members is not limited by the constitution or the by-laws of the Exchange.

In every aspect, therefore, that can be taken of the present situation, no cause of action for injunctive relief has been made out.

The views already expressed render it unnecessary to consider the further question whether, and if so how far, after the lapse of nine years of silence and inaction on the part of the plaintiff and of those whom he represents, a court of equity will assist the plaintiff to reap the fruits of other men’s disbursements by which the seat was preserved.

The judgment should be affirmed, with costs.

Sedgwick, Oh. J., and Van Vorst, J., concurred.  