Case ID: ohio-st_49/html/0137-01.html
Source: Caselaw Access Project
Author: {"author": "Minshau,, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

State, ex rel. v. Standard Oil Company.
    
      Corporations — Legal entity of, a fiction — For what purpose introduced— When may be disregarded — Acts of all, or a majority of, the stockholders— When regarded as the acts of the corporation— When may be challenged in qtio warranto — Trusts—Combines— What acts of corporations, or their stockholders, create — Such acts against public policy — Quo warranto — Limitation of actions in, as to corporations.
    
    
      1. That a corporation is a legal entity, apart from the natural persons who compose it, i's a mere fiction, introduced for convenience in the transaction of its business, and of those who dc business with it.; but like every other fiction of the law, whet urged to an intent and purpose not within its reason and policy, may be disregarded.
    2. Where all, or a majority of the stockholders composing a corporation, do an act which is designed to affect the property and ' business of the company, and which, through the control their numbers give them over the selection and conduct of the corporate agencies, does affect the property and business of the company, in the same manner as if it had been a formal resolution of its board of directors; and, the act so done is ultra vires of the corporation and against public policy, and was dope in tlieir individual capacities for the purpose of concealing their real purpose and object, the act should he regarded as the act of the corporation; and, to prevent the abuse of corporate power, may be challenged as such by the state in a proceeding in quo warranto. '
    
    3. An agreement by which all, or a majority of the stockholders of a corporation, transfer their stocks to Certain trustees, in consideration of the agreement of the stockholders of other companies and of the members of limited partnerships, engaged in the same business, to do likewise; and by which all are to receive in lieu of their stocks and interests so transferred, trust certificates to be issued by the trustees, equal at par to the par value of their stocks and interests; and by which the trustees are empowered as apparent owners of the stock to elect directors of the several companies, and thereby control their affairs in the interests of the trust so created; and are to receive all dividends made by the several companies and limited partnerships, from which, as 'a common fund, dividends are to be made by the trustees to the holders of the trust certificates, tends to the creation of a monopoly, to control production as well as prices, and is against public policy.
    4. A proceeding in quo warranto to forfeit the charter of a corporation must, under §6789, Revised Statutes, be commenced within five years after the act complained of was done, whether commenced by the state on relation of the Attorney General, or otherwise. But a corporation may be ousted by such proceeding from the exercise of a power or franchise, not conferred by law, where the same has not been exercised for a term of twenty years.
    (Decided March 2, 1892.)
    The state, by its Attorney General, commenced this action to oust the defendant of the right to be a corporation, on the ground that it has abused its corporate franchises, by becoming a party to an agreement that is against public policy. The questions are presented by the pleadings — the amended petition, the answer thereto and the demurrer of the state to the answer — and are as follows:
    “ AMENDED PETITION.
    “Now comes David K. Watson, the duly-elected, qualified and acting Attorney General of the state of Ohio, and gives the court to understand and be informed, that on or about the 10th day of January, A. D. 1870, the defendant. The Standard Oil Company, was formed and organized as a corporation under and according to tbe laws of the state of Ohio.
    “That the only purpose of said defendant, asset forth in its articles of incorporation, is “the manufacture of petroleum and to deal in petroleum and its products;” that at the time of the defendant’s incorporation, its capital stock was fixed at $1,000,000.00; that subsequently, to-wit: on or about the 12th day of February, A. D., 1872, the defendant’s capital stock was increased to the sum of $2,500,000.00; that after-wards, to-wit: on or about the 13th day of March, A. D., 1875, said capital stock was increased to the sum of $3,500,000.00; and that after its organization, as aforesaid, said defendant entered upon and continued generally in the pursuit of its corporate objects, with its principal place of business in the city of Cleveland, in this state, until on or about the date of the trust agreements hereinafter complained of and set forth.
    “ Plaintiff further avers, that in violation of law and in abuse of its corporate powers, and in the exercise of privileges, rights and franchises not conferred upon it, defendant, on or about the 2d day of January, A. D., 1882, and again on or about the 4th day of said month and year, entered into and became a party to certain trust agreements, and ever since then has, in the manner and to the extent below stated, observed, performed and carried out said agreements, copies of which are hereinafter set out. That said defendant so entered into and became a party to, and carried out and observed and performed the same as follows, to-wit: All of the owners and holders of its capital stock, including all the officers and directors of said defendant company, signed said agreements, without attaching the corporate name and seal of said defendant company thereto, and the official designations of its officers. That prior to the dates of the trust agreements aforesaid, defendant’s capital stock consisted of 85,000 shares of $100.00 each, and upon the signing of said agreements in the manner aforesaid, 34,998 shares of said stock, belonging to the persons who signed the agreements in manner above set forth (in what proportions, however, plaintiff is unable to state), were transferred, by defendant’s transferring officers, upon defendant’s stock books, to the certain nine trustees who were appointed and named in the first one of said trust agreements, upon the request of the respective owners of said shares and in pursuance of the provisions of said trust agreements, the remaining seven of said shares of stock being retained by, or transferred to, the directors of defendant company; that at the time said transfer of stock was made, there were seven directors of defendant company, and each one of the seven held one share of the stock aforesaid, but the number of said directors was thereafter reduced to five, who still hold and vote said seven shares of stock and no more. That in lieu of the transfer of said 34,998 shares, as aforesaid, to the nine trustees above mentioned, an equal amount, in par value, of certificates of the Standard Oil Trust, which were provided for and described in said trust agreements, were issued and delivered by said nine trustees to the persons aforesaid, from whom said nine trustees had reeceived said 34,993 shares of stock in defendant company; that the capital stock of said defendant company is still $3,500,000.00, and the nine trustees before mentioned still hold and control the 34,993 shares thereof which were transferred to them as above stated; that by virtue of so holding and controlling said shares, said nine trustees have been, ever since the signing of said agreements, and still are, able to choose and have chosen annually such boards of directors of defendant company as they, (said nine trustees) have seen fit, and are able to, and do, control the action of the defendant in the conduct and management of its business; that some of the directors of defendant company, including its president, have been, since the date of said agreements, and still are, members of the board of nine trustees provided for in said trust agreements as aforesaid, the president of defendant company having been, and being now, the president of said board of nine trustees.
    “That defendant has never taken any corporate action, or made any complaint against its said stockholders or its directors and officers signing said trust agreements, or either of them, nor against its said stockholders or officers surrendering their stock in the defendant company to said nine trustees, nor against its stockholders or officers or directors receiving the Standard Oil Trust certificates which were issued and delivered to them as aforesaid by said nine trustees in exchange for the 34,993 shares of defendant’s stock, nor against any of the acts herein recited; and that none of the officers, directors or stockholders of defendant company,, have at any time objected or made complaint against such surrender and exchange of stock or against any of said recited acts, and on the contrary defendant, in its corporate capacity, and through its officers and stockholders, has ever since the acts in question acquiesced in such transfer and exchange, and in the anuual election by said nine trustees of the directors for defendant as well as in all said recited acts. That the directors of defendant company who are chosen in manner aforesaid, either directly or through their employes, manage the business of that company so as not to conflict with the policy fixed from time to time by the nine trustees aforesaid; that the net earnings of defendant company have been, ever since the signing of said agreements, and still are from time to time, declared and paid out as dividends upon its capital stock; that the nine trustees appointed under said trust agreements as aforesaid, have received the proportions of such dividends which were properly distributable and payable upon the stock held by said nine trustees in defendant company; that there are a large number of other corporations (plaintiff being unable to. ascertain or state the exact number), in the United States, whose organizations were made, stock is held, and directors elected, and whose affairs and business and dividends are conducted and paid under and pursuant to the provisions of the trust agreements hereinafter set forth, in a manner and to an extent similar to that herein described in respect to defendant, and from the dividends so accumulated in the hands of said nine trustees, dividends are, from time to time, as the interests of the trust j ustify, declared and paid out by said nine trustees to the holders of the Standard Oil Trust certificates which have been issued by them; so that the holders of the 34,993 shares of said Standard Oil Trust certificates which were received in lieu of a like number of shares of defendant’s stock transferred in manner aforesaid upon the books of defendant company, to said nine trustees, do not receive the dividends which are payable from the earnings of defendant company, but receive dividends only from the accumulated earnings aforesaid, which are derived from the various similar companies aforesaid, and held and distributed as aforesaid by said nine trustees.
    “The following are correct copies of the two trust agreements hereinbefore mentioned and referred to:
    “This agreement, made and entered upon this second day of January, A. D., 1882, by and between all the persons who shall now or may hereafter execute the same as parties thereto, witnesseth:
    “ I. It is intended that the parties to this agreement shall embrace three classes, to-wit:
    "(1.) All the stockholders and members of the following corporations and limited partnerships, to-wit:
    “Acme Oil Company (New York); Acme Oil Company (Pennsylvania); Atlantic Refining Company, of Philadelphia; Bush & Co., limited; Camden Consolidated Oil Company; Elizabethport Acid Works; Imperial Refining Company, limited; Chas. Pratt & Co.; Paine, Ablett & Co., limited; Standard Oil Company (Ohio); Standard Oil Company (Pitts-burg); Smith’s Ferry Oil Trans. Company; Solar Oil Company, limited; Stone & Fleming Manufacturing Company, limited.
    “Also, all the stockholders and members of such other corporations and limited partnerships as may hereafter join in this agreement at the request of the trustees herein provided for.
    “(2.) The following individuals, to-wit:
    “W. C. Andrews, Jno. D. Archbold, Ride K. Arter, J. A. Bostwick, Benj. Brewster, D. Bushnell, Thos. C. Bushnell, J. N. Camden, Henry R. Davis, H. M. Flagler, Mrs. H. M. Flagler, H. M. Harma and Geo. W. Chapin, D. M. Harkness, D. H. Harkness, trustee, S. V. Harkness, John Huntington, H. A. Hutchins, Chas. F. G. Heye, O. B. Jennings, Chas. Rockhart, A. M. McGregor, Wm. PI. Macy, Wm. H. Macy, Jr., Estate of Josiah Macy, Jr., Wm. H. Macy, Jr., executor, O. H. Payne, O. H. Payne, trustee, Cbas. Pratt, Horace A. Pratt, C. M. Pratt, A. J. Pouch, John D. Rockefeller, Wm. Rockefeller, Henry H. Rogers, W. P. Thompson, J. J. Van-degrift, William T. Wardwell, W. G. Warden, Jos. E. Warden, Warden, Frew & Co., Rouise C. Wheaton, Julia H. York, and Geo. H. Vilas, M. R. Keith, and Geo. E. Chester, trustees.
    “Also, all such individuals as may hereafter join in this agreement at the request of the trustees herein provided for.
    “ (3.) A portion of the stockholders and members of the following corporations and limited partnerships, to-wit:
    “American Rubricating Oil Co., Baltimore United Oil Co., Beacon Oil Co., Bush & Denslow Manufacturing Co., Central Refining Co., of Pittsburgh, Chesebrough Manufacturing Co., Chess Carley Co., Consolidated Tank Rine Co., Inland Oil Co., Keyestone Refining Co., Maverick Oil Co., National Transit Co., Portland Kerosene Oil Co., Producers’ Consolidated Rand and Petroleum Co., Signal Oil Works, limited, Thompson & Bedford Co., limited, Devoe Manufacturing Co., Eclipse Rubricating Oil Co., limited, Empire Refining Co., limited, Franklin Pipe Co., limited, Galena Oil Works, limited, Galena Farm Oil Co., limited, Germania Mining Co., Vacuum Oil Co., H. C. Van Tine & Co., limited, and Waters-Pierce Oil Co.
    “Also, stockholders and members (not being all thereof) of other corporations and limited partnerships who may hereafter join in this agreement at the request of the trustees herein provided for.
    “II. The parties hereto do covenant and agree to and with each other, each in consideration of the mutual covenants and agreements of the others, as follows:
    “ (1.) As soon as practicable, a corporation shall be formed in each of the following states under the laws thereof, to-wit: Ohio, New York, Pennsylvania and New Jersey; provided, however, that instead of organizing a new corporation, any existing charter and organization may be used for the purpose when it can advantageously be done.
    “ (2.) The purposes and powers of said corporation shall be to mine for, produce, manufacture, refine and deal in petroleum and all its products and all the materials used in sucli businesses, and transact other business collateral thereto. But other purposes and powers shall be embraced in the several charters, such as shall seem expedient to the parties procuring the charter, or, if necessary to comply with the law, the powers aforesaid may be restricted and reduced.
    "(3.) At any time hereafter, when it may seem advisable to the trustees herein provided for, similar corporations may be formed in other states and territories.
    “(4.) Each of said corporations shall be known as the Standard Oil Company of-(and here shall follow the name of the state or territory by virtue of the laws of which said corporation is organized.)
    “ (5.) The capital stock of each of said corporations shall be fixed at such an amount as may seem necessary and advisable to the parties organizing the same, in view of the purpose to be accomplished.
    “ (6.) The shares of stock of each of said corporations shall be issued only for money, property or assets, equal at a fair valuation to the par value of the stock delivered therefor.
    “(7.) All of the property, real and personal, assets and business of each and all of the corporations and limited partnerships mentioned or embraced in class first shall be transferred to and vested in the said several Standard Oil Companies. All of the property, assets and business in, or of, each particular state, shall be transferred to and vested in the Standard Oil Company of that particular state, and in order to accomplish such purpose, the directors and managers of each and all of the several corporations and limited partnerships mentioned in class first, are hereby authorized and directed by the stockholders and members thereof (all of them being parties to this agreement), to sell, assign, transfer, convey and make over, for the consideration hereinafter mentioned, to the Standard Oil Company or companies of the proper state or states, as soon as said corporations are organized and ready to receive the same, all the property, real and personal, assets and business of said corporations and limited partnerships. Correct schedules of such property, assets and business shall accompany each transfer.
    
      "(8.) The individuals embraced in class second of this agreement do each for himself agree, for the consideration hereinafter mentioned, to sell, assign, transfer, convey and set over all the propertj?, real and personal, assets and business mentioned and embraced in schedules accompanying such sale and transfer to the Standard Oil Company or companies, of the proper state or states, as soon as the said corporations are organized and ready to receive the same.
    “(9.) The parties embraced in class third of this agreement do covenant and agree to assign and transfer all of the stock held by them in the corporations or limited partnerships herein named, to the trustees herein provided for, for the consideration and upon the terms hereinafter set forth. It is understood and agreed that the said trustees and their successors may hereafter take the assignment of stocks in the same or similar companies upon the terms herein provided, and that whenever and as often as all the stocks of any corporation or limited partnership are vested in said trustees, the proper steps may then be taken 'to have all the money, property, real and personal, of such corporation or partnership assigned and conveyed to the Standard Oil Company of the proper state, on the terms and in the mode herein set forth, in which event the trustees shall receive stocks of the Standard Oil Companies equal to the value of the money, property and business assigned, to be held in place of the stocks of the company or companies assigning such property.
    “ (10.) The consideration for the transfer and conveyance of the money, property and business aforesaid to each or any of the Standard Oil Companies, shall be stock of the respective Standard Oil Company to which said transfer or conveyance is made, equal at par value to the appraised value of the money, property and business so transferred. Said stock shall.be delivered to the trustees hereinafter provided for, and their successors, and no stock of any of said companies shall ever be issued except for money, property or business equal at least to the par value of the stock so issued, nor shall any stock be issued by any of said companies for any purpose, except to the trustees herein provided for, to be held subject to the trusts hereinafter specified. It is understood, however, that this provision is not intended to restrict the purchase, sale and exchange of property by said Standard Oil Companies as fully as they may be authorized to do by their respective charters, provided only that no stock be issued therefor except to said trustees.
    “(11.) The consideration for any stocks delivered to said trustees as above provided for, as well as for stocks'delivered to said trustees by persons mentioned or included in class third of this agreement, shall be the delivery by said trustees to the persons entitled thereto, of trust certificates hereinafter provided for, equal at par value to the par value of the stocks of the said Standard Oil Companies so received by said trustees, and equal to the’ appraised value of the stocks of other companies or partnerships delivered to said trustees. (The said appraised value shall be determined in a manner agreed upon by the parties in interest and the said trustees.) It is understood and agreed, however, that the said trustees may, with any trust funds in their hands, in addition to the mode above provided, purchase the bonds and stocks of other companies engaged in business similar or collateral to the business of said Standard Oil Companies, on such'terms and in such mode as they may deem advisable, and shall hold the same for the benefit of the owners of said trust certificates, and may sell, assign, transfer and pledge such bonds and stocks whenever they may deem it advantageous to said trust so to do.
    “ III. The trusts upon which said stocks shall be held, and the number, powers and duties of said trustees, shall be as follows:
    “ (1.) The number of trustees shall be nine.
    “ (2.) J. D. Rockefeller, O. H. Payne and Wm. Rockefeller are hereby appointed trustees, to hold their office until the first Wednesday of April, A. D., 1885.
    “(3.) J. A. Bostwick, H. M. Flagler and W. G. Warden are hereby appointed trustees, to hold their office until the first Wednesday of April, A. D., 1884.
    “(4.) Chas. Pratt, Benj. Brewster and Jno. D. Archbold are hereby appointed trustees, to hold their office until the first Wednesday of April, A. D., 1883.
    
      “ (5.) Elections for trustees to succeed those herein appointed shall be held annually, at which election a sufficient number of trustees shall be elected to fill all vacancies occur-ing either from expiration of the term of the office of trustee or from any other cause. All trustees shall be elected to hold their office for three years, except those elected to fill a vacancy arising from any cause, except expiration of term, who shall be elected for the balance of the term of the trustee whose place they are elected to fill. Every trustee shall hold his office until his successor is elected.
    “(C) Trustees shall be elected by ballot by the owners of trust certificates or their proxies. At all meetings the owners of trust certificates, who may be registered as such on the books of the trustees, may vote in person or by proxy and shall have one vote for each and every share of trust certificates standing in their names, but no such owner shall be entitled to vote upon any share which has not stood in his name thirty days prior to the day appointed for the election. The transfer books may be closed for thirty days immediately preceding the annual election. A majority of the shares represented at such election shall elect.
    “(7.) The annual meeting of the owners of the said trust certificates for the election of trustees, and for other business, shall be held at the office of the trustees, in the city of New York, on the first Wednesday of April of each year, unless the place of meeting be changed by the trustees, and said meeting maybe adjourned from day to day until its business is completed. Special meetings of the owners of said trust certificates may be called by the majority of the trustees at such times and places as they may appoint. It shall also be the duty of the trustees to call a special meeting of holders of trust certificates whenever requested to do so by a petition signed by the holders of ten per cent, in value of such certificates. The business of such special meetings shall be confined to the object specified in the notice given therefor. Notice of the time and place of all meetings of the owners of trust certificates shall be given, by personal notice as far as possible, and by public notice in one of the principal newspapers of each state, in which a Standard Oil Company exists, at least ten days before such meeting. At any meeting, a majority in value of the holders of trust certificates represented consenting thereto, by-laws may be made, amended and repealed, relative to the mode of election of trustees and other business of the holders of trust certificates, provided, however, that said by-laws shall be in conformity with this agreement. By-laws may also be made, amended and repealed at any meeting, bjr and with the consent of a majority in value of the holders of trust certificates, which alter this agreement relative to the number, powers and duties of the trustees, and to other matters tending to the more efficient accomplishment of the objects for which the trust is created, provided oidy that the essential intents and purposes of this agreement be not thereby changed.
    “ (8.) Whenever a vacancy occurs in the board of trustees more than sixty days prior to the annual meeting for the election of trustees, it shall be the duty of the remaining trustees to call a meeting of the owners of Standard Oil Trust certificates for the purpose of electing a trustee or trustees to fill the vacancy or vacancies. If any vacancy occurs in the board of trustees, from any cause, within sixty days of the date of the annual meeting for the election of trustees, the vacancy may be filled by a majority of the remaining trustees, or, at their option, may remain vacant until the annual election.
    “(9.) If, for an}*- reason, at any time, a trustee or trustees shall be appointed by any court to fill any vacancy or vacancies in said board of trustees, the trustee or trustees so appointed shall hold his or the respective office or offices only until a successor or successors shall be elected in the manner above provided for.
    “(10.) Whenever any change shall occur in the board of trustees, the legal title to the stock and other property held in trust shall pass to and vest in the successors of said trustees without any formal transfer thereof. But if at any time such formal transfer shall be deemed necessary or advisable, it shall be the duty of the board of trustees to obtain the same, and it shall be the duty of any retiring trustee or the administrator or executor of any deceased trustee to make said tranfer.
    “(11.) The trustees shall prepare certificates which shall show the interest of each beneficiary in said trust, and deliver them to the persons properly entitled thereto. They shall be divided into shares of the par value of one hundred dollars each, and shall be known as Standard Oil Trust certificates, and shall be issued subject to all the terms and conditions of this agreement. The trustees shall have power to agree upon and direct the form and contents of said certificates, and the mode in which they shall be signed, attested and transferred. The certificates shall contain an express stipulation that the holders thereof shall be bound by the terms of this agreement and by the by-laws herein provided for.
    “(12.) No certificates shall be issued except for stocks and bonds held in trust, as herein provided for, and the par value of certificates issued by said trustees shall be equal to the par value of the stocks of said Standard Oil Companies, and the appraised value of other bonds and stocks held in trust. The various bonds, stocks and monies held under said trust shall be held for all parties in-interest jointly, and the trust certificates so issued shall be the evidence of the interest held by the several parties in this trust. No duplicate certificates shall be issued by the trustees, except upon surrender of the original certificate or certificates for cancellation, or upon satisfactory proof of the loss thereof, and in the latter case they shall require a sufficient bond of indemnity.
    “(13.) The stocks of the various Standard Oil Companies held in trust by said trustees, shall not be sold, assigned or transferred by said trustees, or by the beneficiaries, or by both combined, so long as this trust endures. The stocks and bonds of other corporations, held by said trustees, may be by them exchanged or sold and the proceeds thereof distributed pro rata to the holders of trust certificates, or said proceeds may be held and reinvested by said trustees for the purposes and uses of the trust; provided, however, that said trustees may, from time to time, assign such shares of stock of said Standard Oil Companies as may be necessary to qualify any person or persons, chosen, or to be chosen as directors and officers of any of said Standard Oil Companies.
    “(14.) It shall be the duty of said trustees to receive and safely to keep all interest and dividends declared and paid upon any of the said bonds, stocks and monies held by them in trust, and to distribute all monies received from such sources or from sales of trust property or otherwise, by declaring and paying dividends upon the Standard Trust certificates as funds accumulate, which, in their judgment, are not needed for the uses and expenses of said trust. The trustees shall, however, keep separate accounts of receipts from interest and dividends, and of receipts from sales or transfers of trust property, and in making any distribution of trust funds, in which monies derived from sales or transfers shall be included, shall render the holders of trust certificates a statement showing what amount of the fund distributed has been derived from such sales or transfers. The said trustees may be also authorized and empowered by a vote of a majority in value of holders of trust certificates, whenever stocks or bonds have accumulated in their hands from money purchases thereof, or the stocks or bonds held by them have increased in value, or stock dividends shall have been declared by any of the companies whose stocks are held by said trustees, or whenever, from any such cause, it is deemed advisable so to do, to increase the amount of trust certificates to the extent of such increase or accumulation of values, and to divide the same among the persons then owning trust certificates pro rata.
    “(15.) It shall be the duty of said trustees to exercise general supervision over the affairs of said several Standard Oil Companies, and as far as practicable, over the other companies or partnerships, any portion of whose stock is held in said trust. It shall be their duty as stockholders of said companies to elect as directors and officers thereof, faithful and competent men. ' They may elect themselves to such positions when they see fit so to do, and shall endeavor to-have the affairs of said companies managed and directed in the manner they may deem most conducive to the best interests of the holders of said trust certificates.
    
      “ (16.) All the powers of tbe trustees may be exercised by a majority of tlieir number. They may appoint from their own number an executive and other committees. A majority of each committee shall exercise all the powers which the trustees may confer upon such committee.
    “(17.) The trustees may employ and pay all such agents and attorneys as they deem necessary in the management of said trust.
    “(18.) Each trustee shall be entitled to a salary for his services not exceeding twenty-five thousand dollars per an-num, except the president of the board, who may be voted a salary not exceeding thirty thousand dollars per annum, which salaries shall be fixed by said board of trustees. All salaries and expenses connected with, or growing out of the trust, shall be paid by the trustees from the trust fund.
    “(19.) The board of trustees shall have its principal office in the city of New York, unless changed by vote of the trustees, at which office or in some place of safe deposit in said city, the bonds and stocks shall be kept. The trustees shall have power to adopt rules and regulations pertaining to the meetings of the board, the election of officers and the management of the trust.
    “(20.) The trustees shall render at each annual meeting, a statement of the affairs of the trust. If a termination of the trust be agreed upon as hereinafter provided, or within a reasonable time prior to its termination by lapse of time, the trustees shall furnish to the holders of the trust certificates a true and perfect inventory and appraisement of all stocks and other property held in trust, and a statement of the financial affairs of the various companies whose stocks are held in trust.
    “(21.) This trust shall continue during the lives of the survivors and survivor of the trustees in this agreement named, and for twenty-one years thereafter; provided, however, that if at any time after the expiration of ten years, two-thirds of all the holders in value, or if after the expiration of one year, ninety per cent, of all the holders in value of trust certificates shall, at a meeting of holders of trust certificates called for that purpose, vote to terminate this trust at some time to be by them then and there fixed, the said trust shall terminate at the date so fixed. If the holders of trust certificates shall vote to terminate the trust as aforesaid, they may, at the same meeting or at a subsequent meeting called for that purpose, decide by a vote of two-thirds in value of their number the mode in which the affairs of the trust shall be wound up, and whether the trust property shall be distributed or whether it shall be sold and the values thereof distributed, or whether part, and if so, what part, shall be divided and what part shall be sold, and whether such sales shall be public or private. The trustees, who shall continue to hold their offices for that purpose, shall make the distribution in the mode directed, or, if no mode be agreed upon by two-thirds in value as aforesaid, the trustees shall make distribution of the trust property according to law. But said distribution, however made, and whether it be of property, or values, or of both, shall be-just and equitable, and such as to insure to each owner of a trust certificate his due proportion of the trust property or the value thereof.
    “(22.) If the trust shall be terminated by expiration of' the time for which it is created, the distribution of the trust property shall be directed and made in the mode above provided.
    “(23.) This agreement, together with the registry of certificates, books of accounts, and other books and papers connected with the business of said trust, shall be safely kept at the principal office of said trustees.”
    “(Signatures omitted.)
    “ The plaintiff further avers that after the execution and delivery of the trust agreement aforesaid, to-wit: on the 4th day of January, A. D., 1882, in violation of law and in abuse of its powers and in the exercise of privileges and franchises not conferred upon it, the defendant, acting through the same parties as before alleged in respect of the above recited agreement, together with the subscribers thereto, who were the same as those whose names were subscribed to the other agreement aforesaid, entered into and became a party to, carried out and still continues to observe, perform and carry out, a supplemental trust agreement, which, if not in words and figures, is, in substance and effect, as follows:
    “Whereas, in and by an agreement dated January 2,1882, and known as the Standard Trust Agreement, the parties thereto did mutually covenant and agree, inter alia, as follows, to-wit: That corporations to be known as Standard ■Oil Companies, of various states should be formed, and that all of the property, real and personal, assets and business of ■each and all of the corporations and limited partnerships mentioned or embraced in class first of said agreement should be transferred to and vested in the said several Standard Oil Companies; that all of the property, assets and business in or of each particular state should be transferred to and vested in the Standard Oil Company of that particular state, and the directors and managers of each and all of the several corporations and associations mentioned in class first were authorized and directed to sell, assign, transfer, and convey and make over to the Standard Oil Company or companies of the proper state or states, as soon as said corporations were organized and ready to receive the same, all the property, real and personal, assets and business of said corporations or associations; and, whereas, it is not deemed expedient that all of the companies and associations mentioned should transfer their property to the said Standard Oil Companies at the present time, and in case of some companies and associations it may never be deemed expedient that the said transfer should be made, and said companies and associations go out of existence; and, whereas, it is deemed advisable that a discretionary power should be vested in the trustees as to when such transfer or transfers should take place, if at all.
    
    
      “ Now, it is hereby mutually agreed between the parties to the said trust agreement, and as supplementary thereto, that the trustees named in the said agreement and their successors shall have the power and authority to decide what companies shall convey their said property as in said agreement contemplated, and when the said sales and transfers shall take place, if at all, and until said trustees shall so decide, each of said companies shall remain in existence and retain its property and business, and tbe trustees shall hold the stocks thereof in trust, as in said agreement provided. In the exercise of said discretion the trustees shall act by a majority of their number, as provided in said trust agreement. All portions of said trust agreement relating to this subject shall be considered so changed as to be in harmony with this supplemental agreement.
    “In witness whereof, the said parties have subscribed this agreement, this 4th day of January, 1882.”
    “ (Signatures omitted.)
    “ Plaintiff further avers, that the nine persons who were appointed and named as trustees in and under the provisions of said trust agreements, accepted their several positions and entered upon the discharge of the trust duties therein mentioned; that some of said trustees and others, to the number of nine, whose names are unknown to plaintiff, have been re-appointed and appointed at-various times since the execution of said trust agreements, so that nine trustees have been ever since then, and still are, acting thereunder, and each and all of said trustees have been, and are, non-residents of the state of Ohio; that the offices and principal place of business of said trustees have been, ever since the execution of said trust agreements, and still are, in the city of New York, and the elections of said trustees and business transacted by them at their meetings have been had and done in said city of New York; and that plaintiff had no knowledge of the existence of either of the aforesaid trust agreements, or of the acts hereinbefore recited, until the latter part of the year 1889.
    “ Plaintiff further avers, that by reason of defendant’s stockholders, directors and officers signing and entering into said trust agreements and carrying out their provisions and surrendering their stock in defendant and accepting in lieu thereof certificates issued by the nine trustees aforesaid, and permitting the corporate powers, business and property of the defendant to be exercised, conducted and controlled by said trustees in manner aforesaid, and by reason of the acts and omissions of defendant hereinbefore recited, said defendant has forfeited its corporate rights, privileges, powers and franchises.
    “Wherefore, plaintiff prays that defendant be found and adjudged to have forfeited and surrendered its corporate rights, privileges, powers and franchises, and that it be ousted and excluded therefrom, and that it be dissolved, and that such other relief be granted in the premises as to the court may seem just and proper.”
    “ David K. Watson,
    
      Attorney General
    
    “ANSWER TO AMENDED EETITION.
    “ Now comes the defendant, and answering the amended petition filed herein, admits:
    “1. That David K. Watson is the duly elected, qualified ' and acting attorney general of the state of Ohio.
    “2. Admits that defendant was formed and organized as a corporation under and according to the laws of the state of Ohio, on or about the time alleged and for the purposes stated.
    "3. That the capital stock of the company was originally fixed at one million of dollars, and afterwards increased at the times and in the sums alleged.
    “4. It admits that after its organization it entered upon and continued generally in the pursuit of its corporate objects with its principal place of business in the city of Cleveland, Ohio, but it avers that it did this not only up to the date of the so called trust agreements; but that it has ever maintained such corporate organization and has ever pursued and still does pursue, in accordance with law, the objects and purposes for which it was incorporated, with its principal place of business at the city of Cleveland.
    “5. Defendant admits that at one time its board was composed of seven directors, and that the number was after-wards reduced to five. It admits that its president is also president of a board of trustees, whose office and principal place of business is now in the city of New York, and it admits that it has always, when certificates of its stock have been presented to it with transfers duly endorsed thereon in accordance with its by-laws, issued new certificates of stock to the transferees thereof, as it was its duty to do; and it denies that it has legal power to do otherwise.
    “Defendant denies that it did, on or about the 2nd day of January, A. D., 1882, or again on or about the 4th day of said month and year, or at any other time, enter into or become a party to either or both of the agreements in said petition set forth, and it denies that it has at any time or in any manner acquisced in, observed, performed or carried out either or both of said agreements.
    “ Defendant denies that it entered into or became a party to; or carried out, observed or performed, the said agreements in the manner alleged in said petition, or that it became a party to or carried out, observed or performed, the said agreements or either of them in any form or manner whatsoever.
    “Defendant admits that prior to the dates of said agreements defendant’s capital stock consisted of 35,000 shares of one hundred dollars each, and it avers that the amount of its capital stock and shares remain unchanged. And it alleges that its corporate powers, business and property are exercised, conducted and controlled solely by its board .of directors, a majority of whom are citizens of the state of Ohio, añnually elected by its stockholders; and that dividends of its profits are regularly declared by its board of directors and paid to the holders of its stock appearing as such on its stock-books; that it has always and still does mantain its independent corporate action, and ever has and still does manage its business through its board of directors in accordance with its charter, without injury to the public, but with benefit thereto by increasing the variety and quantity of the products of petroleum, improving their quality and greatly cheapening their price to the consuming public.
    “ Defendant further answering says that it is informed and believes that on or about the dates alleged in said petition, to-wit, the 2nd and 4th of January, 1882, the individuals named in said agreement, being the same individuals who executed said agreement, and being then both in common and severally owners of all or of the greater part of the stocks of each of the corporations and limited partnerships, mentioned in said agreements, and owning other interests in the oil business in partnership, said corporations having been either organized by said individuals for the purpose of carrying on the oil business in its different branches in different localities and states, or the stocks thereof having been obtained by purchase with a like intent, did enter into the agreements set forth, and to facilitate the purposes therein set forth of covering the said partnership interests into corporate interests and of so re-adjusting and consolidating the aforesaid corporate interests in the modes provided by the laws of the various states which require the assent of stockholders thereto as to have the business in each state, so far as legally possible, conducted by one corporation in each state in which the business was located, did assign their stocks to trustees, the individuals named as trustees being prior to and at the date of said agreement absolute owners, and holders of a large majority of said stocks in said companies and in defendant company, and as such absolute owners and holders the said individuals long prior to the said agreement had the voting power and elected the directors of defendant company, and exercised such control of defendant company as a majority of stockholders legally may exercise,, and avers that by virtue of said agreements and anything done thereunder said voting power and control was not and has not been in any manner altered, nor was it nor has it been vested in persons not entitled thereto by virtue of absolute ownership of stocks in defendant company. And defendant alleges that said agreements wére agreements of' individuals in their individual capacity and with reference to their individual property, and were not nor were they designed to be corporate agreements, and defendant denies that said agreements have illegally affected in its corporate capacity, or that defendant has permitted its corporate powers, business and property to be exercised, conducted and controlled in an illegal manner.
    
      “Defendant says by way of further answer and defense that if said action by said stockholders, in becoming parties to the several agreements alleged in the petition in their individual capacity and with reference to their individual property, shall be deemed and held 'by this court to have been the corporate act of defendant, and, if the signing by the said stockholders of the said several agreements as aforesaid, shall be deemed and held by this court to be a cause for forfeiture of the charter of this defendant, then this defendant says that such act was done and committed more than five years before the filing of the petition herein, and that-the cause of action is therefore barred.
    “Wherefore defendant prays to be hence dismissed with judgment for its costs.
    “STANDARD OlR Co., by
    “ M. R. Keith and
    “Virgir P. Krine,
    
      “Its Attorneys.”
    
    The State, by its attorney general, demurred, on the ground that the answer states no defense to the action.
    
      David K. Watson, Attorney General, and John W. War-rington, for plaintiff.
    I. Right of the Attorney General to institute the suit. See sections 6761 and 6762, Revised Statutes; State ex rel. Attorney General v. Anderson, 45 Ohio St. 196.
    II. A general demurrer admits only facts well pleaded, not mere conclusions, nor inconsistent statements, whether they be in the form of denials or allegations, or both. Hamilton & Rossville Hydraulic. Co. v. C. H. & D. R. R. Co., 29 Ohio St. 841; Peterson v. Roach, 82 Ohio St. 874; Reemelin v. Mosby, 25 W. E. B., 120; Mitchell & Watson v. Treasurer of Franklin County, 25 Ohio St. 153; Finch v. Board of Education, 30 Ohio St. 41.
    III. Where the manifest object of an agreement is to unite corporations, partnerships and individuals into, or include them in, a common enterprise, and control them through an agency unknown to the law of their creation, and all the officers, directors and stockholders of such corporations sign the agreement, and, in furtherance of its provisions, transfer their stock to such agency, permit the corporate executive agencies to make such transfers on the corporate books, submit without objection to the domination of the agency to which the stock is so transferred in the selection of directors and officers and in the management of the corporate affairs and business, suffer the corporate earnings to go to such agency and be placed and mingled with the earnings of the other parties in the combination so created, and, after deductions for uses of the combination, be divided as part of such common earnings among the persons interested, in such case the corporations become and are— or at least will be treated by the courts as — parties to such agreement and actors in its performance, although their corporate names are withheld therefrom. “Such proceedings constitute actual corporate conduct, if not formal corporate action, on the part of each corporation.”
    Whatever else may be said of the agreement, it is clear that its promotors intended to unite a number of corporations, partnerships, and individuals into, and include them in a common enterprise, and they intended, so far as the corporations were concerned, to accomplish this by organizing new corporations where necessary and using the charters of old corporations where practicable. The purposes and powers of these corporations were expressly required to be the same, so as to accomplish a common purpose.
    It is also manifest that the design was to control the corporations through the agency of the nine trustees provided for and appointed by said instrument. This is accomplished by an indirect, though certain process. The trustees were to have the stock in the various corporations transferred to them by the stockholders, and they were also to exercise control over the other parties to the agreement. The stock thus transferred was to be held, not temporarily, but indefinitely.
    Will any one seriously claim that vesting these powers in the trustees did not contemplate giving them practical control of the corporations? Observe, there is not only a power vested in them to select directors, but a duty cást upon them to exercise general supervision over the affairs of the several corporations.
    We need not stop to show that such an agency for corporate control as are these nine trustees is an agency unknown to the law.
    It is expressly admitted that all the officers, directors and stockholders of defendant signed the agreement. It is worthy of notice in this connection that the agreement in designating the three, classes which it should embrace, makes the first class include “ all the stockholders and members of the following corporations,” and then names eleven corporations including the “Standard Oil Company (Ohio),” being the defendant. It did not give the names of the stockholders, but gave them their official designation so far as their relation to the corporation was concerned. We contend that this was not merely descriptio .personae. It was a reference to them as a class, clothed with full power to absolutely control the corporations. It could not signify what anyone else would say so long as all the stockholders consented to the scheme. The stockholders included the officers, and the officers included the directors and president, for the statute required directors to be stockholders and the president to be one of the directors. But to avoid any possible omission of anyone who could have any voice in the-management or destiny of the corporation, the agreement added the words “members of the * * * corporations.”
    Turning now to the inquiry as to what the officers,, directors and stockholders of the defendant actually did in furtherance of the agreement, it is admitted, as we have seen,, that all of the shares of stock of defendant except seven were transferred to the nine trustees, and these seven were retained only for the qualification of the directory, which the trustees might from time to time select, either from their’ own numbers or from others of their choice. We have seen, too, that the transfers were made by defendant’s transferring officers upon its stock books. We know from the statute that the transferring officers were the president and secretary, because they were required to sign the certificates of stock. (Revised Statutes, sec. 3251). If it be said that the officers, directors and stockholders of the corporation did not permit this, the answer is that all of the stockholders, which included all the officers, and directors, must have signed at the time the admitted transfers were made. Besides, they could not have received, as it is admitted they did receive, their Standard Oil Trust certificates, if they had not secured the transfer to the nine trustees of their own certificates of defendant’s stock.
    It is also admitted that the nine trustees have uniformly selected the directors of defendant ever since the signing of the agreement.
    In addition to what we have heretofore said on this subject, both with reference to the pleadings and the provisions of the agreement, it seems to us plain that there is not only no sufficient denial of the allegation of the petition in this behalf; but it would be preposterous to assert that men clothed with such power as the nine trustees possess, would not exercise it. We have seen that the trustees are charged with an imperative duty “to exercise general supervision over the affairs” of defendant. Presumptively they performed that duty.
    Moreover, as before shown, they are charged with an additional duty “to endeavor to have the affairs of said companies managed and directed in the manner they may deem most conducive to the best interests of the holders of the said trust certificates. ” Is it to be supposed that these men have been directors who are not only inimical to their interests but also to the interests of their constituents?
    It is said, in substance, in the answer, that the nine trustees individually owned majority interests in the stocks of the various corporations, and that they could exercise the same voting power by virtue of their ownership in the stock of those corporations. With such individual interests and with such vast powers as the trustees thus have, it is safe to assume that as long as men are moved by motives of self-interest, not to speak of the duty imposed by the agreement they will exercise these powers in their own behalf, if not in behalf of those they represent. Inasmuch as their relations to the great number of other 'Similar corporations are the same as they are to the defendent, it may be suggested that the nine trustees have divided interests and divided duties so far as the defendant is concerned. It may, on the other hand, be said that those interests are identical because all of the corporations are embarked in a common enterprise.
    But, whatever is said, there remains in the trustees an interest and duty to manage the affairs and business of defendant. Hence any denial that they in fact manage such affairs and business, is inconsistent with their conceded power and duty and interest to manage them. The admitted allegations then of the petition, with the admitted facts that the officers, directors and stockholders of defendant, at no time objected or made complaint against any of the acts recited in the petition, force the conclusion that they have submitted without objection to the .domination .of the nine trastees in the management of the corporate affairs and business of defendant.
    It is admitted that the corporate earnings'of defendant go to the nine trustees to be placed with the earnings of the other parties to the trust, and, after deductions for uses of the trust, to be divided as part of such common earnings among holders of the Standard Oil Trust certificates. This admission appears in several ways. One is found in the statement of the answer: “That dividends of its (defendant’s) profits are regularly declared by its board of directors and paid to the holders of its stock, appearing as such on its stock-books.” Another is found in the admission that the nine trustees hold 34,993 shares of its stock. Still another is in the concession that defendant’s original stockholders received Standard Oil Trust certificates in lieu of their stock in defendant, and that the trustees declared dividends from time to time as required by the agreement.
    That the officers, directors and stockholders of defendant suffered this to be done is shown by the admitted allegation of the petition that they have never objected to this mode of using the profits and dividends of defendant.
    The question is, whether, under this agreement and under such proceedings as were had on the part of the officers, directors and stockholders of defendant, it can be successfully urged that defendant never has been, and will not now be treated as a party to the agreement. The sole basis of such a claim is the absence of the corporate name from the agreement.
    It seems to us impossible to read the agreement and consider the proceedings which confessedly have taken place under it, without reaching the conclusion that there has been a studious design and effort on the part of the promoters of the trust scheme, to obtain all the advantages of the actual presence and participation of the defendant corporation in the objects and purposes of the agreement, without formally making it a party to it. But is substance to be sacrificed to shadow? When one is an actual party can he be excused on the theory that he is not a nominal party? Have we not shown sufficient actual corporate conduct to obviate any necessity for formal corporate action, such as the adoption of a resolution or the signing of a name? As private corporations are universally considered and bound precisely the same as natural persons are, on account of their acts and conduct, can it be that this corporation, in the face of its admissions and statements, can shield itself from the charge that it is a party to this agreement, by simply relying upon the absence of a formal signature? Bundy v. Iron Co., 38 Ohio St., 300; People v. North River Sugar Refining Company, 121 N. Y., 582; 54 Hun., 354.
    If anything more were needed to sustain the proposition we are discussing than the authorities cited, it may not be unprofitable to consider biie'fly what' aré the precise legal relations between a corporation and its stockholders. When we recall the fact that all the officers, directors and stockholders of defendant signed the agreement, and acted and acquiesced thereunder in the manner before alluded to, it is important to refresh our minds with some of the cardinal principles underlying corporations. We recognize the fact that stockholders, as a rule, are not in immediate control of its business or affairs. “ Ordinarily they elect the governing body of the corporation, and that body controls its property.” Pullman Palace Car Co. v. Morey Co., 115 U. S., 597; 1 S. & C, 273; 3 Sayler .1870; 2 Kyd on Corp., 475; 1 Kyd on Corp., 14; Ayliffe Civ. Eaw, 1 $%■, McKinley s?. Wheeler,, 130 U. S., 630; Paulv. Virginia, 8 Wall., 168; Pembina v. Pennsylvania, 125 U. S., 189; Taylor on Corp., sec. 50; Goddard v. Grand Trunk Ry., 57 Me., 202; Pittsburgh, Ft. Wayne & Chicago R. R. Co. v. Slusser, 19 Ohio St., 157; Atlantic & Great Western Ry. Co. v. Jones, 19 Ohio St., 162; People v. Dashaway Association, 84 Cal., 114; Angelí and Ames, sec., 310; Bank Commissioners v. Bank of Buffalo, 6 Paige, 496; Ward v. Sea Ins. Co., 7 Paige, 294; Insurance Co. v. Insurance Co., 7 Wend., 35.
    In veiw of these decisions will this court be deceived as to the realities of this' case, by the theory that the ideal being, the defendant, did not sign and participate in performing the agreement? The signing of the agreement by all the officers, directors and stockholders of defendant was not an accidental act done at'an accidental meeting. Their action was not taken with reference to something foreign to the corporation. They were not acting for amusement. On' the contrary, there was method and design in their joining in the execution of the agreement; there was a design to enhance the profits of the corporation. This could not be done without benefitting the directors and stockholders. There was an ingenious effort made to actually utilize the corporate entity and property to accomplish these ends and yet to conceal this fact and shield the defendant corporation by withholding the corporate name from the agreement.
    But the parties must be presumed to have contemplated the natural consequences of their acts. Their acts indicated their intention. “Acta exteriora indicant interiora secreta.” They knew the law of Ohio required the defendant’s board of directors to be selected from time to time by the defendant’s own proper stockholders. They knew they were transferring the power of that selection from its stockholders to the nine trustees. They knew those trustees were thereby given the right to select directors for the defendant, and, consequently, practically to select and dominate the entire agencies and business of the corporation. They knew that they surrendered their offices and functions as stockb elders and officers of thé' defendant to a body' wholly foreign and unknown to the law of their corporate creation, and they knew such conduct was a violation of that law.
    Section 3248, of the Revised Statutes, provides that: “The corporate powers, business, and property of corporations * * must be exercised, conducted and controlled by the board of directors.” Yet, not only the stockholders and officers, but the directors themselves, in this instance' signed an agreement which authorized the nine trustees to depose them and select in their stead an entirely different controlling agency. It is no answer to say that the trustees did not exercise that power, for it is always to be borne in -mind that the question is: Were these officers, directors and stockholders acting merely for themselves, or were they also acting for the corporation? Is it possible that they could so directly and vitally affect the corporation, and yet be said not to be acting on its behalf ? Gould v. Head, 38-Fed. Rep., 888; American Preservers’ Trustv. Taylor Manufacturing Co., 46 Fed. Rep., 152.
    IV. An agreement is in violation of law and void, which, in effect, creates a partnership between corporations, or where its probable operation and effect, — much more where its inevitable tendency, — is to create a substantial monopoly or is in restraint of trade or otherwise injurious to the public.
    If we have succeeded in showing that defendant must be treated as a party to the agreement, it would seem to be indisputable that the effect of the agreement was to create a partnership between corporations. Indeed, the very effort of defendant to escape the charge that it is a party to the agreement, necessarily implies a concession that the effect and tendency stated in the proposition are true and consequently that the agreement is invalid and void.
    So we may say of the answer in this case,.that its attempt to fasten the agreement upon individuals alone, is an apology for its existence when considered as a corporate instrument.
    If defendant is a party to the agreement it follows that the other similar corporations of the trust mentioned in the petition are likewise parties to the contract; for as we have seen, the allegation of the petition is admitted. People v. 
      N. R. S. R. Co., supra; Mallory v. Hanarir Oil Works, 86 Term., 598; Whittaker Mills v. Ut>ton, 10 Gray (Mass.) 595; Marine Bank of Chicago v. Ogden, 29 Ill., 248; Gunn v. Central R. R., 74 Ga., 509; Green’s Brice’s Ultra Vires, 423 (2nd Am. Ed.); 1 Bates on Part. sec. 133; 1 Rind, on Part., 78, Tit. Corporations and Companies; Hackett v. Multonah Ry. Co., 12 Ore., 129; Franklin Bank v. Commercial Bank, 36 Ohio St., 354; Railway Co. v. Iron Co., 46 Ohio St., 44; People v. Chicago Gas Trust Co., 130 Ill., 268; Salt Co., v. Guthrie, 35 Ohio St., 666; Richardson v. Buhl, 77 Mich., 632; Hilton v. Eckersley, 6 Ellis & Bl., 65; Clancy v. Salt Co., 62 Barb., 406; Atcheson v. Mallon, 43 N. Y., 149; Emery v. Ohio Candle Co., 47 Ohio St., 320; Mill & Lumber Co. v. Hays, 76 Cal., 387; State v. Nebraska Dist. Co., 46 N. W. Rep., 155, s. c.; 1st Am. R. R. and Corp.-Rep., 604,- — and especially note tit. “Trusts” at 620 et seq.; Hoffman v. Brooks, 11 W. E. B., 258; Am. Preservers' Trust v. Taylor Mfg. Co., 46 Fed. Rep., 152; Straus et al v. Eagle Ins. Co., 5 Ohio St., 59; Charltons;. Ry., 5 Juris., N. S. 1096; Cook on ■Stock, Stockholders and Corporation Raw, sec. 677; Cook on Stock and Stockholders, section 503a.
    V. Where a corporation, either directly or indirectly, submits to the domination of an agency unknown to the statute, •or identifies itself with and unites in carrying out an agreement whose performance is injurious to the public, it thereby •offends against the law of its creation and forfeits all rights to its franchises, and judgement of ouster should be entered against it. Peoples;. N. R. S. R. Co., 121N. Y., 626; People v. N. R. S. R. Co., 54 Hun., 386; Revised Statutes, sec. 6761, 6780; State v. Pa. <Sf O. Canal Co., 23 Ohio St. 121; State v. Building Association, 35 Ohio St. 264; State ex rel. v. C. N. O. & T. P. Ry. Co., 47 Ohio St. 130.
    VI. Even if the statute which prescribes a time within which an action against a corporation for forfeiture of its charter shall be commenced, be applicable to a case of this kind, yet where the offenses or acts committed or omitted by a corporation for which forfeiture of its charter is sought at the suit of the state, are concealed or are of such character as to conceal themselves; such offenses and acts as against the state are frauds, and such Statute does not begin to run until the frauds are discovered! 2 S. & C., 1264-1270; 1 S. & C., 88; Revised Statutes, 6789; State v. Railway Co., 40 Ohio St., 504; Bank v. McIntyre, 40 Ohio St., 528; Baily, assignee, v. Glover, 21 Wall., 342; Traer v. Clews, 115 U. S., 528; Kirby v. Lake Shore R. R. Co., 120 U. S., 130; Gibbs v. Guild, 9 Q. B. D., 59.
    
      M. R. Keith, Virgil P. Kline, S. C. T. Dodd and Jos. H. Choate, for defendant.
    I. The first and leading question raised by the pleadings in this case is whether this agreement is the agreement of the defendant corporation, because signed by all its stockholders and officers individually, although not made for or on behalf of the corporation.
    It seems hardly ■ necessary to argue this question. The simple statement ought to be sufficient that corporations may act through agents; that stockholders, as such, are not agents of the corporations; that where persons not agents, be they stockholders or others, act for or on behalf of the corporation, the corporation may ratify their acts, but where persons, be they stockholders or others, enter into agreements as individuals, and not for or on behalf of the corporation, their acts or agreements are not and cannot be made corporate acts.
    But so much has in late, cases been loosely said on this subject, the landmarks of the ancient paths of the law have been so misplaced, that it seems necessary at some length to consider the legal relations between a corporation and its stockholders — how far they are united, how far separate — • and when their acts do and do not affect the corporation.
    It is a modern heresy, largely invented during the late crusade against the principle of association in business, that a corporation is not a “legal entity,” but simply an association of stockholders endowed with certain .legal faculties. This idea is so opposed to authority, effects such radical changes in corporate law, and is fraught with such dangerous results, that it behooves a court to seriously consider the question in all its bearings before enunciating such a principle.
    Courts have heretofore generally accepted the definition of a corporation given b3r Chief Justice Maeshali, in the Dartmouth College case, 4 Wheat., 636. Ayliff’s Civil Law, 196; 1 Waterman on Corp., 7-18; Smith v. PItird, 12 Mete., 371; Bonham v. Taylor, 10 Ohio, 109; Kyd on Corp. 15; Ciirrien v. Sant ini, 16 La. Ann., 27; Creen v. Dennis, 6 Conn., 293; 1 Dillon on Mun. Corp., 91; 1 Waterman on Corp., 6; 1 Beach on Railways, sec. 22; Green’s Ultra Vires 608; Railway Company v. Letson, 2 How., 497; R. R. Co. v. Harris, 12 Wall., 65; R. R. Co. v. Whitton, 13 Wall., 270; Nashua Co. v. Lowell Co., 136 U. S., 370; Memphis R. R. Co. v. Alaba7iia, 107 U. S., 581; Bridge Co. v. Magee, 31 Ohio St., 317; Taylor on Corp., sec. 187; Bradley-v. Bauder, 36 Ohio St., 35; Baxter v. Brown, 7 M. & Gr., 210; Bronson v. La Crosse R. R. Co., 2 Wall., 301; 1 Waterman on Corp., 18; Hoyt v. Thompson, 19 N. Y., 216; Landers v. Meth. Church, 114 N. Y., 626; C. H. V. & T. R. R. Co. v. Burke, 3 R. & C. L. J., 30; Morawetz, 382; 16 Corp. Cases, 631; Rudd v. Robmson, 126 N. Y., 113; Van Allen v. The Assessors, 3 Wall., 573; Pearsall v. W. U. Tel. Co., 124 N. Y., 256; Hill v. Manchester Water Works, 5 B. & Adol., 866; Haynes v. Brown, 36 N. H., 545; Gamble v. Water Co., 123 N. Y., 91; People v. Coleman, 126 N. Y., 433; Lowell on Transfer of Stock, sec. 2; 1 Waterman on Corp., 11.
    In the great case of Bank of Augusta v. Earle, 13 Pet. 519, the court, by TaNNEy, J., says that the principle that for the purpose of jurisdiction the court might look to the citizenship of the stockholders, is not to be extended any further, and is not to be extended to contracts made by a corporation. If it should be extended to contracts the result, would be to make a corporation a mere partnership in business. “Whenever a corporation makes a contract it is the contract of the legal entity, of the artificial being created by the charter, and not the contract of the individual members.” The same principle is laid down in Paul v. Virginia, 8 Wall., 168.
    The reverse of this proposition must also be true. The contract of stockholders between themselves is a contract of the individuals, and is not the contract of the legal entity, of the artificial being created by the charter.
    This principle is not at variance with the rule, which we have no disposition to question, that corporations can enter into agreements through duly authorized agents, and that stockholders may be authorized to act as agents. In the case of American Preserve Co. v. Taylor Mamtfacluring Co., 46 Fed. Rep., 152, cited by plaintiff, it was admitted by the demurrer that the agreement was executed by the stockholders for the benefit of the company, and that the “stockholders were duly authorized and empowered to act for the company,” and “that the company had received the proceeds of the consideration of such agreement.”
    But in this case the stockholders did not act as agents for the company, nor had they any authority to do so. The allegation is that “all of the owners' and holders of its capital stock, including all the officers and directors of said defendant company, signed said agreement,” and it is admitted by the demurrer to the answer that “said agreements were agreements of individuals in their individual capacity and with reference to their individual property, and were not, nor were they designed to be, corporate agreements.”
    II. The defendant did not become a party to nor ratify these agreements nor perform any illegal corporate act by permitting the transfer of stock upon its books and by recognizing the transferees as legal stockholders. Corporate stocks may be held in trust
    But it is contended that if the defendant was not a party to this agreement originally, it has ratified and made itself a party to it by certain subsequent specified acts. It is not difficult for a corporate or natural person to ratify an agreement made by an unauthorized agent on behalf of such corporation or person, but how can any person, natural or artificial, ratify an agreement between third parties not made by or on behalf of the party ratifying? That is an impossibility. But let us examine patiently what alleged acts are relied upon either in support of the theory of ratification or as being themselves illegal corporate acts. They are as follows:
    
      1. The stock was transferred upon the books.
    2. The transferees elected the directors.
    3. Dividends were paid to the stockholders of record; and, negatively.
    4. No corporate action was taken against the stockholders for signing the agreements.
    All of these allegations are essentially embraced in the first one, to-wit, the transfer of the stock upon the books, because this being done the power to vote and the right to receive dividends, followed as a matter of neccesity. “The person in whose name the stock stands on the books of the corporation is, as to the corporation, a stockholder with all the rights of a stockholder.” Franklin Bank v. Commercial Bank, 36. Ohio St., 350.
    The question here is, whether it was the duty of the transfer agent of the corporation to refuse to enter the stock transferred upon its books, and whether by reason of such transfer the charter of the corporation was justly forfeited.
    The following principles need no argument -to sustain them, to-wit; that stock is personal property; that it is freely transferable; that the legal title may be in one person and the equitable title in another; that the person who has the legal title is entitled to exercise all the rights, and is subject to all the duties of a stockholder, and that these are rights of the stockholder with which 'the corporation has no power to interfere. Dowell on Transfer of Stock, secs. 27-32-487, Wendoris Case, D- R-, 4 Ch., 20; Gilbei't's Case, L. R., 6 Ch., '902; Robinson v. Bank, D- R-, 1 Eq., 32; C. & A. R. R. Co. v. Elkins, 10 Stew., 273; Bankof Attica^. Bank, 20 N. Y., 501; Casev. Bank, 100 U. S., 446; Field on Corp., 99; Johnson v. Lafflin, 108 U. S., 800; Beach on Railways, sec. 398; Barnes v. Brown, 80 N. Y., 527; Dayton Nat. Bank v. Merchants' Nat. Bank, 37 Ohio St., 208; Bank v. Lanier, 11 Wall., 377.
    Upon what principle would the corporation have been justified in refusing to make the transfer in this case?
    It has never been questioned that corporate stocks may be held in trust as freely as any species of personal property. Beach on Corp., sec. 855; Conant v. Bank, 1 Ohio St., 298; Bank v. Bank, 37 Ohio St., 215; Stone v. Hackett, 12 Gray, 230; Rowell on Transfer of Stock, sec., 61; Revised Statutes,, sec. 3254.
    III. The transfer of stock did not result in an illegal control of defendant, and its charter cannot be taken away because a minority of its stockholders permitted those hold- - ing a majority of its stocks to vote as their trustees.
    The preceding portion of this argument which sets forth the fact that the voting power was not changed, which also) shows the relation between a corporate entity and its stockholders, and where the managing, power is vested, bears so. directly upon this allegation that little more is necessary to, be said.
    By the statute laws of Ohio the corporate powers must be exercised, conducted and controlled by the board of directors., Pullmaris Palace Car Co. v. Missouri Pacfic Railway Co.,, 115 U. S. 587.
    The question in this case is whether it is illegal to transfer-shares of stock in trust, and whether a corporation is to lose> its charter because it has permitted persons owing the ma-j ority of its stock to act as trustees for those owning the-minority and, as trustees holding the legal title to the stock,, to vote for directors. To state the question is to decide it. Our contention is that a corporation is legally governed: when it is controlled by a legally constituted board of' directors, elected by its legal stockholders, and that the-defendant corporation has always been so governed and controlled. And our further contention is that it is not illegal for stocks to be placed in trust, nor is it illegal for the trustees to vote as stockholders for his ceshii que trust, and that when the trustees who cast the votes are owners of the equitable as well as the legal interest in a majority of the-stocks, the corporation is not by reason thereof “controlled, by an agency unknown to the law of its creation;” nor has. it “submitted to illegal domination” by any agency. Loril-lard v. Clyde et al. 86 N. Y., 384; Earnest. Brown, 80 N. Y., 537.
    IV. No partnership between corporations was created, by these agreements. Partnership arrangements by and. between corporations have been upheld in some cases. Catskill Bank v. Grey, 4 Barb., 471.
    
      But the rule is, with exceptions, that such partnerships are illegal. This is a consequence of the rule that partners are agents for each other.
    Any arrangement, then, between corporations which does not make the separate corporations agents for each other, and thus interfere with the governing power of the board of directors, is not a partnership, or no matter what it may be called, is not within the reason of the rule. Pomeroy Salt Co. et al. v. Davis, 21 Ohio St., 555.
    Railroad companies may contract for the use of each other’s roads, or combine their business, so long as they do not form a partnership. Marawetz on Corp., secs. 222-3; ■Green’s Ultra Vires, 334 (first ed.); Alcott v. Tioga R. R. Co. 27 FT. Y., 546; Holmes v. Old .Colony R. R. Co., 5 Gray, 58; Insurance Co. v. R. R. Co., 104 U. S., 146; Denning v. N. & W. R. R. Co., 21 Fed. Rep., 25.
    The very essence and type of a partnership is an agreement to share profits and losses. 1 Bindley on Part., 18; Irwin v. N. C. '&■ St. L. Ry. Co., 92 Ill., 103.
    In the case now pending where is the agreement between the corporations of any nature? Where is the joint expense, the joint property, the joint fund, the joint losses, the joint profits? Each one separately does its own work without connection with any other one. Each one is alone responsible for its own losses, and the profits of each one goes into its own treasury, and each one declares dividends of its profits to its own stockholders. Pullman’s P. C. Co. v. M P. R. R. Co., 115 U. S., 587; Nashua R. R. v. Lowell R. R., 136 U. S., 356.
    Common ownership does not constitute partnership. 1 Rind, on Part., 58; Pillsbury v. Pillsbury, 20 N. H., 90; Oliver v. Grevy, 4 Ark., 425; Woodward v. Cowing, 41 Me., 9; Sikes v. Work, 6 Grajq 433; N. Y. cf S. Canal Co. v. The Fulton Bank, 7 Wend., 412; Quackenbush v. Sawyer, 5 Pac. Coast B. J., 277.
    V. No combination between corporations was created by these agreements. Nashua R. R. v. Lowell R. R., 136 U. S., 356.
    VI. Individuals may carry on business through the agencies of separate and independent corporations
    
      When five or more persons undertake to organize a corporation they intend it to be an agency to conduct business in their interest, or in the interest of those who shall purchase the stocks issued by it. The first step is for the individuals to enter into an agreement. It is in the form of a certificate, but it is an agreement between individuals, and as such is unchangeable except by unanimous consent, or by a consent of a majority in interest, if the law has so provided. After the certificate is filed and the company organized this certificate becomes further a contract between the corporation and its stockholders. The shareholder subjects his interest to the control of the corporation, but it is understood and agreed that the purpose of the corporation, the amount of its capital and other essential'particulars set forth in the certificate shall not be changed without the consent of both contracting parties. If the directors of the corporation attempt such a change a single stockholder would have his remed}’ in equity. Beach on Railroads, sec. 27; Cook on Stockholders, sec. 492; Ireland y. Turnpike Co., 19 Ohio St., 369; Clcarweathcr v.Meredith, 1 Wall., 40; Headx. Providence Ins. Co., 2 C., 127; Bank of Augusta v. Eric, 13 Peters, 587.
    VII. The charter of a corporation is not a contract between the state and corporators solely, but is also a contract between the state and the corporation, and the question in quo war-ranto is whether the corporation has violated its contract with the state. Savings v. Coit, C Wall., 606; West River Bridge Co. v. Dix, 6 How., 507, 541; Taylor on Corp., secs. 448-450 ; 2 Waterman on Corp., 313, 752; People v. Coleman, 126 N. Y., 433; Munson v. V. G. & C. R. R. Co., 103 N. Y., 58; hi re The Empress Engineering Co. 43U-T. Rep. N. S., 742; 1 Redfield on Railways, 9; Densmorc Oil Co. v. Densmore, 64 Pa. St., 43; 1 Blackstone’s Com., 484; State x. Com. Bank, 10 Ohio, 540; State v. Farmer's College, 32 Ohio St., 487; Chicago Life Ins. Co. x. Needles, 113 U. S., 574; Beach on Corp., sec. 45; Angelí & Ames, sec. 774, note; People x. Kingston etc., 23 Wend., 205.
    VIII. The statutory limitation having expired, the attorney general had no authority to institute this action.
    
      The sole authority of the attorney general for instituting this action is found in title 4, chapter 3, of the Revised Statutes, section 6789.
    The act complained of in this cause is the entering into agreements, dated, respectively, January 2, 1882, and January 4, 1882, and the transfer of stock following, as stated in the petition.
    The act complained of as a cause of forfeiture, is the entering into the agreements and the transfer of the stock following thereupon. The control complained of is a result or consequence of said acts, which began and has continued ever since the signing of the agreements. It is plain, therefore, that, as the answer alleges, the acts complained of were done or committed more than five years prior to the beginning of the action, and it is equally plain that the authority of the attorney general to institute the action was terminated by the lapse of time. State v. Miami Exporting Co., 11 Ohio, 126; State ex rel. v. Lyman Beecher, 16 Ohio, 358; Kerns v. Schoonmaker, 4 Ohio, 331; Fee v. Fee, 10 Ohio, 470; Lathrop v. Snellbakcr, 6 Ohio St., 276; Howk v. Min-nick, 19 Ohio St., 462.
    The plaintiff relies specially upon two authorities: first Baiik v. McIntyre, 40 Ohio St., 528. This was a case of a continued and subsisting trust within the exception of section 4974 of the Revised Statutes and, therefore, has no application to this case. The other is Bailey v. Glover, 21 Wall., 342. As stated before, there is a great conflict of authority on this question in different jurisdictions, and the Federal Court adheres to a rule directly opposite to that established by the Supreme Court of Ohio in the cases already cited. The authority in this court is the rule established by it, and not the different rule established by other courts.
    And further, in another point, this case falls far short of coming within the rule laid down in those tribunals which differ from the Ohio courts. That rule is that where fraud or fraudulent concealment of cause of action is relied upon to stop the running of the statute, the fraud must be specifically averred. Williams v. First Presbyterian Society of Cincin
      
      nati, 1 Ohio St., 478; Angel on Rim., 8d ed., sec. 184; Carr v. Hilton, 1 Curtis, 390;
    IX. The only bond of union between defendant and other corporations arises from identity of stockholders. This is not cause for forfeiture of its charter.
    X. This identity of stockholders was created by absolute ownership and not by the agreements. This identity existed prior to the agreements, and subsequent thereto the equitable as well as the legal interests of stockholders were, and have continued to be, identical.
    XI. Public policy. Union of capital and interest legalizes associations otherwise illegal. The law encourages associations for carrying on business.
    Without seeking to relax one iota of the strictness of the law as against illegal combinations, agreements and arrangements, our contention is that individuals may unite their property and capital to an unlimited extent in partnerships or corporations for the purpose of carrying on manufacture and trade, and that such an association of interest is not unlawful because the tendency or effect of such an aggregation of capital may be to diminish competition or to confer upon such business associates a power over production and prices. ArnoU^. Coal Co., 68 N. Y., 559; Stanton v. Allen, 5 Denio, 434; Hooper v. Vandewater, 4 Den., 349; Commonwealth v. Carlisle, Brightly (Pa.), 36; Marsh v. Russell, 66 N. Y., 288; Phippen v. Stickney, 3 Met., 384; Loril-lard, v. Clyde et. al., 86 N. Y., 384; Central Shade Roller Co. v. Cushman, 143 Mass., 353; Craft v. McConoughy, 79 Ill., 379; Clancy v. Salt Co., 62 Barb., 395; Colles v. Grow Co., 11 Hun., 397; Watson v. H. & N. Y. Nav. Co., 62. How. Pr., 348; Morris Run Coal Co., v. Barclay Coal Co., 68 Pa. St., 173; Santa Clara v. Hayes, 38 Alb. R. J., 279; Raymond v. Leavitt, 46 Mich., 447; India Bagging Co. v. Rock, 14 Ra. Ann., 164; Hilton v. Eckersley, 6 Ell. & Bl., 47; Gibbs v. Baltimore Gas Co., 130 U. S., 396; Mogul S. S. Co. v. McGregor, 232 B. D. 598; Printing Co. v. Sampson, R. R., 19 Eq., 462; Diamond Match Co. v. Roeber, 106 N. Y. 473; R. R. Tax Cases, 13 Fed. Rep., 743; 19 Ill., 353; 22 Conn., 530; 5.Florida, 510; John Stuart Mill Pol. Ec., Vol. 1, 189, 510; Wliat Social Classes Owe Each Other, p. 55; Gunton, in Principles of Social Economics, p. 379.
   Minshau,, J.

Three questions arise upon the pleadings: 1. Should the defendant, The Standard Oil Company, be regarded as a party in its corporate capacity, to the agreement constituting the Standard Oil Trust. 2. Had the company power to become a party to such an agreement. 3. If so, is the right of the state to demand a forfeiture of its corporate franchises, or of the power to make and perform such agreements, barred by lapse of time.

It will be observed, on reading the answer, that while the defendant denies that it “ entered into or became a party to either or both of the agreements in said petition set forth,” and also, “denies that it has at any time or in any manner acquiesced in, or observed, performed or carried out either or both of said agreements,” it does not deny the averment of the petition, that “all of the owners and holders of its capital stock, including all the officers and directors of said company, signed said agreements. ” Nor could it have been the intention to do so, as the answer proceeds to admit, “that it,” the corporation, “is informed and believes that the individuals named in the agreement, being the same individuals who executed” it, “did enter into the agreements set forth” in the petition; claiming “that said agreements were agreements of individuals in their individual capacity and with reference to their individual property, and were not, nor were they designed to be, corporate agreements.” The claim is based upon the argument, that the corporation is a legal entity separate from its stockholders, that in it are vested all the property and powers of the company, and can only be affected by such acts and agreements as are done or exectued on its behalf by its corporate agencies acting within the legitimate scope of their powers. That its stockholders are not the corporation, that their shares are their individual property, and that they may each and all dispose of, and make such agreements affecting their shares, as best suit their private interests; and that no such acts and agreements of stockholders, subservient of their private interests, can be ascribed to the company as a separate entity, tho'ugh done and concurred in by each and all of its stockholders.

The general proposition that a corporation is to be regarded as a legal entity, existing separate and apart from the natural persons composing it, is not disputed; but that the statement is a mere fiction, existing only in idea, is well understood, and not controverted by any one who pretends to accurate knowledge on the subject. It has been introduced for the convenience of the company in making contracts, in acquiring property for corporate purposes, in suing and being sued, and to preserve the limited liability of the stockholders, by distinguishing between the corporate debts and property of the company, and of the stockholders in their capacity as individuals. All fictions of law have been introduced for the purpose of convenience and to subserve the ends of justice. It is in this sense that the maxim in fictione jttris subsista aequitas, is used, and the doctrine of fictions applied. But when they are urged to an intent and purpose not within the reason and policy of the fiction they have always been disregarded by the courts. Broom’s Regal Maxims, 130. “It is a certain rule,” says Rord Mansfield, C. J., “that a fiction of law shall never be contradicted so as to defeat the end for which it was invented, but for every other purpose it may be contradicted.” Johnson v. Smith, 2 Burr., 962. “They were invented,” says BuiNKERHOFF, J., in Wood v. Ferguson, 7 Ohio St. 291, “for the advancement of justice, and will be applied for no other purpose.” And it is in this sense that they have been constantly understood and applied in this state. Hood v. Brown, 2 Ohio R., 269; Rossman v. McFarland, 9 Ohio St., 381; Collard’s Adm’r v. Donaldson, 17 Ohio R., 266.

No reason is perceived why the principles applicable to fictions in general, should not apply to' the fiction that a corporation is a personal entity, separate from the natural persons who compose it, and for whose benefit it has been invented. One author seems to think that it has outlived its usefulness, that it is “a stumbling-block in the advance of corporation law towards the discrimination of the real rights of actual men and women,” and should be abandoned. Taylor on Corp. § 51. Among the many attempts that have been made to define the nature of a corporation, that given by Mr. Kyd, discarding, or at least not adopting, the .metaphysical distinction of a legal entity sepárate from the persons composing it, is certainly the most practical, presenting as it does, the real nature of a corporation as seen in its constituents, and, in the manner that it is formed and .transacts its business. His definition is, “a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested, by the policy of the law, with the capacity of acting, in several respects, as an individital, particularly : of talcing and granting property, of contracting obligations, and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design .of its institution, or the powers conferred upon it, either at ;,the time of its creation, or, at any subsequent period of its "existence.” 1. Kyd on Corporations, 13. In brief then, a corporation is a collection of many individuals, united in one body under a special denomination, and vested by the policy of the law with the capacity of acting in several respects as an individual. “The statement,” says Mr. Morawetz, “that a corporation is an artificial person, or entity, apart from its members, is merely a discription, in figurative language, of a corporatation viewed as a collective body; a corporation-is really an association of persons, and no judicial dictum or legislative enactment can alter this fact.” See his work on Corporations, § 227. So that the idea that a corporation may be a separate entity, in the sense that it can act independently of the natural persons composing it, or abstain from acting, where it is their will that it shall, has no foundation in reason or authority, is contrary to the fact, and, to base an argument upon it, where the question is, as to whether a certain act was the act of the corporation, or of its stockholders, cannot be decisive of the question, and is therefore illogical; for it may as likely lead to a false, as to a true result.

Now, so long as a proper use is made of the fiction, that a corporation is an entity apart from its shareholders, it is harmless, and, because convenient, should not be called in question; but where it is urged to an end subversive of its policy, or such is the issue, the fiction must be ignored, and the question determined, whether the act in question, though done by shareholders, that is to say, by the persons united in one body, was done simply as individuals and with respect to their individual interests as shareholders, or was done ostensibly as such, but, as a matter of fact, to control the corporation and affect the transaction of its business, in the same manner as if the act had been clothed with all the formalities of a corporate act. This must be so, because the stockholders having a dual capacity, and capable of acting in either, and a possible interest to conceal their character when acting in their corporate capacity, the absence of the formal evidence of the character of the act, cannot preclude judicial inquiry on the subject. If it were otherwise then, in one department of the law, fraud would enjoy an immunity awarded to it in no other.

Therefore, the real question we are now to determine is, whether it appears from the face of the pleadings, giving effect to all the denials of fact contained in the answer, that the execution of the agreement set forth in the petition, should be imputed to the association of persons constituting The Standard Oil Company of Ohio, acting in their corporate capacity.

The agreement provides in the first place that the parties to it shall be divided into three classes, the first class to embrace all the stockholders and members of certain corporations and limited partnerships, the defendant, The Standard Oil Company of Ohio, being one. It is then covenanted by the parties, that, as soon as practicable, a corporation shall be formed in each of certain states, under the laws thereof, Ohio being one, to mine for, produce, manufacture, refine and deal in petroleum and all its products; with the proviso; however, that instead of organizing a new corporation, any existing one “ may be used for the purpose when it can advantageously be done,” and in Ohio the defendant has been so used.

In a subsequent part of the agreement, nine trustees are selected, their powers and duties are defined, and provision made for the selection of their successors.

As will hereafter appear, it is made the duty of the parties to the agreement, to transfer their stocks or interests in their respective companies or firms, to these trustees, who hold the same in trust, but with the power to vote on the same as though the real owners; in consideration of which, trust certificates are issued to the owners, who, as the owners of such certificates, elect the successors of the trustees.

It is then provided that all the property, assets and business of the corporations and limited partnerships embraced in the first class “shallbe transferred to and vested in the said several Standard Oil Companies.” And in order to accomplish this purpose, it is provided that “the directors and managers of each and all ot the several corporations and limited partnerships mentioned in class first, are hereby authorized and directed by the stockholders and members thereof (all of them being parties to this agreement), to sell, assign, transfer, convey and make over, for the consideration hereinafter mentioned, to the- Standard Oil Company or companies, of the proper state or states, as soon as said corporations are organized and ready to receive the same, all the property, real and personal, assets and business, of said corporations and limited parnerships.”

Now in the case of the defendant, it will be observed, that this contemplated, and could not have been accomplished, without corporate action. The Standard Oil Company of Ohio was required to transfer all its property, assets and business to a new company to be organized in the state; and this was to be accomplished by the obligation imposed on its members and stockholders, all of whom are parties to the agreement, to authorize and require the directors and managers to make the transfer. The property and assets of the corporation could only be transferred by a corporate act, and the agreement could not in this respect, be carried into effect, other than by such corporate act; and clearly indicates that the purpose of the stockholders of the defendant, in becoming a party to it, was to affect their property and business as a corporation; in other words, was to .act in their corporate, and not in their individual, capacity.

The subsequent agreement of January 4, 1882, does not materially change the original agreement in this regard: Reciting that “it is not deemed expedient that all of the companies and associations should transfer their property to the said Standard Oil Companies at the present time,” and “that it is deemed advisable that a discretionary power should be vested in the trustees as to when such transfer should be made, provides that, “until said trustees should so decide, each of said companies shall remain in existence and retain its property and-business, and the trustees shall hold the stock thereof, in trust as in said agreement provided.” So that under the agreement as modified the directors and managers of the defendant may be required by its stockholders and members, all of whom are parties to the agreement, to make the transfer of the property and business of the defendant, whenever the trustees may in their discretion direct. The effectiveness of this provision to secure all intended by it, may be better understood, by observing that “the directors and managers,” “the stockholders and members” and “the trustees” here mentioned, are substantially the same persons, occupying these different relations at one and the same time.

It signifies nothing that the transfer here provided for has not, as respects the defendant, been made. It does not change the evidence it affords of the purpose and object of the members of the corporation in becoming parties to the agreement.

Again, the agreement, as performed by the members of the defendant, as effectually places the property and business of the defendant under the control and management of the Standard Oil Trust, as if the same had been transferred as provided in the original agreement. It is averred in the petition, and not denied in the answer, “ that prior to the dates of the trust agreements aforesaid, defendant’s capital stock consisted of 35,000 shares of $100.00, each, and upon the signing of said agreements in the manner aforesaid, 34,993 shares of said stock, belonging to the persons who signed the agreements in manner above set forth (in what proportions, however, plaintiff is unable to state), were transferred, by defendant’s transferring officers, upon defendant’s stock books, to the certain nine trustees who were appointed and named in the first one of said trust agreements, upon the request of the respective owners of said shares and in pursuance of the provisions of said trust agreements, the remaining seven of said shares of stock being retained bjq or transferred to, the directors of defendant company; that at the time said transfer of" stock was made, there were seven directors of defendant, and each one of the seven held one share of the stock aforesaid, but the number of said directors was thereafter reduced to five, who still hold and vote said seven shares of stock and no more. That in lieu of the transfer of said 34,993 shares, as aforesaid, to the nine trustees above mentioned, an equal amount, in par value, of certificates of the Standard Oil Trust, which were provided for and described in said trust agreements, was issued and delivered by said nine trustees to the persons aforesaid, from whom said nine trustees had received said 34,993 shares of stock in defendant company; that the capital stock of said defendant company is still $3,500,000.00, and the nine trustees before mentioned still hold and control the 34,993 shares thereof which were transferred to them as above stated.”

So that all but seven of the 35,000 shares of the defendant’s capital stock has been transferred by the owners, who are parties to the agreement, to the trustees of the Standard Oil Trust; and continue to be held in trust, as appears by the supplemental agreement, the transferrers receiving in lieu thereof trust certificates equal at par value to the par value of the stock received. The control which this gives, and was intended to give, over the business of the defendant, appears from the following provision contained in the trust agreement:

“ It shall be the duty of said trustees to exercise general supervision over the affairs of' said several Standard' Oil Companies, and as far as practicable over the other companies or partnerships, any portion of whose stock is held in said trust. It shall be their duty as stockholders of said companies to elect as director's and officers thereof faithful and competent men They may elect themselves to such positions when they see fit so to do, and shall endeavor to have the affairs of said companies managed and directed in the manner they may deem most conducive to the best interests of the holders of said trust certificates.”

Thus, the trustees as the legal owners of the stock, may not only elect who they please, but may elect themselves, as directors of the defendant; and not only may manage, but it is their duty to have “the affairs” of the defendant, managed and directed in the manner they may deem most conducive to the best interests of the holders of the trust certificates. In other words, it is to be managed in the interest of the Standard Oil Trust, whose principal place of business is in New York Citjq irrespective of what might be its duties to the people of this state, from which it derives its corporate life; and its real stockholders receive their dividends from the profits of that trust, and not from the earnings of their company; for the holders of the trust certificates, received in exchange for their stock transferred to the trustees, remain in law and in equitjq the real owners of the stock so transferred; and the averment in the answer that the dividends of the company are paid to the holders of its stock “appearing as such on its stock-books” is immaterial; since these persons are not the owner's, but the trustees of the stock. In fact, the averment is simply a part of the evidence, that the company, through its directors, recognizes and performs the agreement on its part. The payment of its dividends to the persons appearing as stockholders on its stock-books, is what enables the parties to the agreement to realize the primary object of the trust agreement — the accumulation of the earnings of the various companies, partnerships and individuals named in the agreement, as a common fund from which the holders of the trust certificates are to be paid dividends when declared by the trustees; and whereby many separate interests being united under one management, form a virtual monopoly through the power acquired of so controlling • the production and price of petroleum and its products, as to destroj^ Competition.

Applying then the principle that a corporation is simply an association of natural persons, united in one body under a special denomination, and vested by the policy of the law with the capacity of acting in several respects as an individual, and disregarding the mere fiction of a separate legal entity, since to-.regard it in an inquiry like the one before us would be subversive of the purpose for which it was-invented, is there, upon an ' analysis ' of the agreement, room for doubt, that the act of all the stockholders, officers- and directors of the company in signing it, should be imputed to them as an act done in their capacity as a corporation? We think not, -since thereby all the property and business of the company is, and was intended to be, virtually transferred to the Standard Oil Trust, and is controlled, through its-trustées, as effectually as if a formal transfer had been made by the directors of the company. On a question of this kind, the fact must constantly be kept in view, that the metaphysical entitjr has no thought or will of its own; that every act ascribed to it, emanates from and is the act of the individuals personated by it; and that it can no more do an act, or refrain from doing it, contrary to the will of these natural persons, than a house could be said to act independently of the will of its owner; and, where an act is ascribed to it, it must be understood to be the act of the persons-associated as a corporation, and whether done in their capacity as corporators or as individuals, must be determined by the nature and tendency of the act.

It therefore follows, as we think, from- the discussion we have given the subject, that where all, or a majority, of the stockholders comprising a corporation, do an act which is designed to affect the property and business of the company, and which, through the control their numbers give them over the selection and conduct of the corporate agencies, does affect the property and business of the company, in the same manner as if it had been a formal resolution of its board of directors; and the act so done is ultra vires of the corporation and against public policy, and was done by them in their individual capacity for the purpose of concealing their real purpose and object, the act should be regarded as the act of the corporation; and, to prevent the abuse of corporate power, may’' be challenged as such by the state in a proceeding in quo warranto.

That the nature of the agreement is such as to preclude the. defendant from becoming a party to it, is, we think, too clear to require much consideration by us. In the first place, whether the agreement should be regarded as amounting to a partnership between the several companies, limited partnerships and individuals, who are parties to it, it is clear that its observance must subject the defendant to a control inconsistent with its character as a corporation. Under the agreement all but seven of the shares of the capital stock of the company have been transferred by the real owners to the trustees of the trust, who hold them in trust for duch owners; and being enjoined by the terms of the agreement to endeavor to have “the affairs” of the several companies managed in a manner most conducive to the interest of the holders of the trust certificates issued by the trust, have the right, in virtue of their apparent legal ownership and by the terms of the agreement, to select such directors of the company as they maj see fit, nay more, may in fact select themselves. The law requires that a corporation should be controlled and managed by its directors in the interest of its-own stockholders, and conformable to the purpose for which it was created by the laws of its state. By this agreement, indirectly it is true, but none' the less effectually, the defendant is controlled and managed by the Standard Oil Trust, an association with its principal place of business in New York City, and organized for a purpose contrary to the policy of our laws. Its object was to establish a virtual monopoly of the business of producing petroleum, and of manufacturing, refining and dealing in it and all its products, throughout the entire country, and by which it might not merely control the production, but the price at its pleasure. All such associations are contrary to the policy of our state and void. Salt Co. v. Guthrie, 35 Ohio St. 666; Emery v. Ohio Candle Co, 47 id. 320. “The word ‘trust,’” says Mr. Cook, “was first used to mean an agreement, between many stockholders in many corporations, to place all their stock in the hands of trustees and to receive therefor trust certificates from the trustees. The stockholders thereby consolidated their interests and became trust certificate holders. The trustees own the stock, vote it, elect the officers of the various corporations, control the business, receive all the dividends on the stock and use all these dividends to pay dividends on the trust certificates. The trustees are periodically elected by the trust certificate holders. The purpose of the “trust” is to control prices, prevent competition and cheapen the cost of production. The Standard Oil Trust, the American Cotton Seed Oil Trust and the Sugar Trust are examples of this method of combination.” Cook on Stock and Stockholders, § 503a. See also, Wait on Insolvent Corporations, § 478.

Much has been said in favor of the objects of the Standard Oil Trust, and what it has accomplished. It may be true that it has improved the quality and cheapened the costs of petroleum and its products to the consumer. But such is not one of the usual or general results of a monopoly; and it is the policy of the law to regard, not what may, but what usually happens. Experience shows that it is not wise to trust human cupidity where it has the opportunity to aggrandize itself at the expense of others. The claim of having cheapened the price to the consumer, is the usual pretext on which monpolies of this kind are defended; and is well answered in Richardson v. Buhl, 77 Mich. 632. After commenting on the tendency of the combination, known as the Diamond Match Company, to prevent fair competition and to control prices, Champwn, J., said, “It is no answer to say that this monopoly has in fact reduced the price of friction matches. That policy may have been necessary to crush competition. The fact exists that it rests in the discretion of this company at any time to raise the price to an exorbitant degree.”

Monpolies have always been regarded as contrary to the spirit and policy of the common law. The objections are stated in “The case on Monopolies,” Darcy v. Allein, Coke’s Reports, part XI, 84b. They are these: 1. “That the price of the same commodity will be raised, for he who has the sole selling of any commodity, may well make the price as' he pleases.” 2. “The incident to a monopoly is, that after the monopoly is granted, the commodity is not so good and merchantable as it was before; for the patentee having the sole trade, regards only his private benefit, and not the commonwealth. 3. “It tends to the impoverishment of divers artificers and others, who before, by the labor of their hands in their art or trade, had mantained themselves and their families, who will now of necessity be constrained to live in idleness and beggary.” The third objection, though frequently overlooked, is none the less important. A society in which a few men are the employers and the great body are merely employes or servants, is not the most desirable in a republic; and it should be as much the policy of the laws to multiply the numbers engaged in independent pursuits or in the profits of production, as to cheapen the price to the consumer. Such policy would tend to an equality of fortunes among its citizens, thought to be so desirable in a republic, and lessen the amount of pauperism and crime. It is true that in the case just cited, the monopoly had been created by letters patent. But the objections lie not to the manner in which the monopoly is created. The effect on industrial liberty and the price of commodities will be the same whether created by patent, or by an extensive combination among those engaged in similar industries, controlled by one management. By the invariable laws of human nature, competition will be excluded and prices controlled in the interest of those connected with the combination or trust.

The defendant relies upon a provision in section 6789, Revised Statues, as a bar to the action. That provision is as follows:

“Nothing in this chapter contained shall authorize an action against a corporation for forfeiture of charter, unless the same be commenced within five years after the act complained of was done or committed.”

It is contended, however, by counsel for the plaintiff, that this section does not apply to a proceeding instituted on behalf of the state by the attorney general to forfeit the charter of a corporation; that it was only intended to apply to like proceedings by prosecuting attorneys. The argument, is based upon what is claimed to have been the law prior to. the revision, and that there could have been no intention to change it in this regard by the above provision. We cannot adopt this conclusion. It is contained in the very chapter under which the proceeding was commenced by the attorney general. It contains no exception, and we are not warranted in making one against the plain language of the-statute.

It is further contended that the provision does not apply by reason of the fact, as averred in the petition, “that the-plaintiff had no knowledge of the existence of either of the aforesaid agreements, ' or of the acts hereinbefore recited,, until the latter part of the year 1889.” The general rule is that a party’s want of knowledge does not prevent the running of the statute of limitations against an action that lias, accrued in his favor; and the only exception is concealment or fraud on the part of the defendant, which is expressly confined by our statute to “an action for relief on the ground of fraud.” § 4982 Revised Statutes. This is not such an action; and fraud in fact is not averred, it is simply want of knowledge on the part of the plaintiff.

But the whole of § 6789, Revised Statutes, is not quoted by the defendant; it further proceeds: “Nor shall an action be brought against a corporation for the exercise of a power or franchise under its charter which it has used and exercised for a term of twenty years.” Therefore within that time such a proceeding may be brought. The defendant, as we have shown, in making and entering into the trust agreements, exercised a power for which it had no authority under the laws of this state, and is continuing to perform the agreement on its part. In addition to a prayer for the forfeiture of the defendant’s right to be a corporation, the state prays for such other relief as to the court may seem just and proper; and, in the opinion of the court, the defendant should be ousted from the power to make and perform the agreement set forth in the petition, or any part, of it.

And in this connection, it is proper to say, that, in the judgment of the court, if the company through its directors, or otherwise, should hereafter recognize the transfers of the shares that have been made on its ’ stock-books to the trustees provided for in the trust agreement, or should hereafter make such transfers; or should pay dividends to them instead of to the real owners of the shares; or should permit such trustees to vote on shares so held by them in the election of its directors, in ever}*- such case, it must be regarded and held, as performing the agreement in violation of the judgment of this court.

Judgment ousting the defendant from the right to make the agreement set forth in the petition and of the power to perform the same.