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Opinion of the Court.

disposed of by him in the manner and for the purposes prescribed in the said act or deed ; that Jones, intending to execute the trust created by said deed, had proposed to divide the premises into 1000 shares, for which certificates were to be issued to the purchasers, and in pursuance thereof had actually issued certificates for 400 shares, of which it was believed many shares had been sold; that Triplett, together with Menard, by deed duly executed by them, had conveyed the 640 acres to Green, Jones, and Johnson, to be sold and disposed of in the manner therein prescribed ; that, after further reciting that, it being the intention of all the parties to lay off the league and labor of land into lots for the purpose of building a town thereon, it had been found most beneficial to the parties concerned that the whole of said league and labor should be held on joint account in the proportions thereinafter specified, and should be under the control and at the disposition of the same set of trustees, acting upon one common plan in regard to the whole, instead of being held partly by Jones and partly by Green, Jones and Johnson, under different titles and plans, it was witnessed that the parties thereto covenanted and agreed with each other, among other things, that the said league and labor of land should be conveyed to Green, Jones and Johnson, as trustees and commissioners, to carry into effect the purposes of the agreement; that the said league and labor of land should be divided by the trustees into 1000 shares, of which the 400 shares for which certificates had been issued by Jones should be regarded as 400 shares, and the lawful holders of the said certificates should be on the same footing and entitled to the same rights with the holders of certificates issued under said agreement of June 15, 1837, and upon surrendering their said certificates new certificates in lieu thereof should be issued by said trustees; that the remaining 600 shares should be sold by said trustees in such manner as they should think expedient, no share to be sold for a less sum than $1500, unless a majority of said trustees should be of opinion that it would be expedient to reduce the price; that a certificate, signed by at least two of the trustees, should be issued to every purchaser, who should have a right to

Opinion of the Court.

demand a separate certificate for each share; that the certificates should be transferable by assignment in writing thereon, signed and sealed by the holder, and acknowledged in the presence of two witnesses before any justice of the peace or notary public; that the trustees, as soon as, in their opinion, a sufficient number of shares had been sold, should call a meeting of the shareholders at such time and place as should be designated by them, of which they should give sufficient and convenient notice to shareholders; that the trustees should hold the title to the said league and labor of land, subject to the orders of the shareholders, as adopted at their general meetings, and the rules and regulations prescribed by them, and make all conveyances which the shareholders might require them to make, any two of them being authorized to make conveyances and perform all other acts; and that it was thereby further witnessed that the parties thereto of the first and second parts, in consideration of the premises thereto, and the further consideration of $10 to them in hand paid by the parties of the third part, did thereby sell and convey unto Green, Jones, and Johnson, their heirs and assigns, the said league and labor, in trust to execute the agreements thereinbefore set forth.

The bill further showed that Green, Jones and Johnson accepted the trust created by said written instrument, and took upon themselves its discharge, and in June, 1837, having supplied themselves with 1000 printed certificates, as the representatives of a like number of shares, which certificates were bound into five books of 200 certificates each, designated as Books A, B, C, D, and E, solicited subscriptions for shares; that many persons became purchasers for value and owners of shares therein, to whom said trustees issued a certificate of ownership for each share so purchased; that on April 13, 1838, on due notice given by said trustees, the shareholders held a meeting in Galveston, Texas, and formally organized themselves into a joint stock company, under the name of the Galveston City Company, by the election of a president and four directors, who were to constitute the board of directors of the company, and to whom was confided the care and control of

Opinion of the Court.

its property, with power to pass ordinances and by-laws for its government, appoint an agent, apply for a charter of incorporation, require from said trustees a deed for said league and labor of land, so as to vest the legal title in the said board of directors and their successors, lay off the land into blocks and lots, make sales thereof and convey title to the purchasers, declare dividends of the proceeds of sales among the stockholders, and otherwise manage and control the property as they might deem best for the interest of the company; but the bill alleged that said trustees, with the approval and consent of the company, continued to make sales of shares in its stock, and as many as 1000, the number designated in said written articles, eventually were disposed of, and certificates of ownership thereof issued by said trustees to persons entitled thereto.

The bill further showed that David White, late of Mobile, Alabama, in his lifetime, on November 7, 1838, subscribed for and became the owner and proprietor of 67 shares in the capital stock of said company, in evidence of which the said trustees appointed under the instrument of June 15, 1837, issued and delivered to him 67 certificates of ownership, duly signed by two of them, to wit, 17 out of Book A, numbered from 108 to 124, inclusive, and 50 out of Book C, numbered from 1 to 50, inclusive, each certificate being in the form set forth in the margin.

1“ City of Galveston in one thousand shares. “ The proprietors, M. B. Menard, Robert Triplett, Sterling Neblett, and Wm. Fairfax Gray conveyed to the undersigned, as trustees, by their deed of the 15th of June, 1837, a league and labor of land containing 4605 acres on the east end of Galveston Island, to be sold as joint stock in 1000 shares.

“ By the terms of said deed certificates of shares when issued are to be assigned by endorsement under hand and seal, in the presence of two witnesses, before any justice of the peace or notary public.

“ The trustees, any two of whom may act, are to call a meeting of the shareholders when deemed advisable.

“ In the proceedings of the stockholders in general meeting each share to be entitled to one vote and to be represented in person or by proxy, and a majority in interest to determine all questions which may arise. The company may prescribe such rules and regulations for its government and management and give such orders and directions to the trustees for the sale

Opinion of the Court.

The bill further showed that on December 31, 1838, at a regular meeting of the board of directors of the company, an ordinance was passed by it requiring its agent, as soon as a charter could be procured, to open a book for the registration and transfer of stock, and to give due notice of such opening, and conferring the right on stockholders, after such notice, to file and register the certificates issued to them by the said trustees, and receive in lieu thereof certificates under the seal of the company, stating the number of shares to which the party was entitled, which last certificate should not be transferred, except on the regular books of transfer of the company, and should be necessary in every case to entitle the shareholder to receive the dividends due him; that another ordinance was passed requiring the trustees to convey said league and labor to the five persons who were then the directors of the company, and their successors in office; that on April 12, 1839, the said trustees, by deed duly executed and recorded, conveyed the said league and labor in fee to the said directors, by virtue whereof the latter became seized and possessed of it in trust for the stockholders of the company; that afterwards the said Galveston City Company was incorporated under the same name by an act of the Congress of the Republic of Texas, approved February 5, 1841 ; and that said David White was one of the original corporators thereof.

of lots or any other purpose as it may think promotive of the general interest.

Certificate of Stock. Book —, No.“ This is to certify that we, Levi Jones, William R. Johnson and Thomas Green, trustees of the city of Galveston, in consideration of

do grant, bargain and sell to David White, his heirs and assigns forever, one share, No.-, in the city of Galveston, to be holden and enjoyed by him and his assigns upon the terms prescribed in the deed bearing date the 15th of June, 1837, of M. B. Menard, Robert Triplett, Sterling Neblett, and William Fairfax Gray, constituting us the trustees, and in the agreement entered into between us and the stockholders in said city, as set forth in the proposal for subscription. “Witness our hands this 7th day of November, 1838.

“ LEVI JONES,
6. THOMAS GREEN,

" Trustees.

Opinion of the Court.

The bill further showed that the directors of the company laid off the said land into blocks and lots, and offered the same for sale, and from time to time made sales and conveyances, of numerous parcels of it to different persons, receiving in part consideration therefor $1,000,000 and upwards; that there remains a large portion yet unsold, of the value of $500,000 and upwards; that the company adopted the policy of accepting from its stockholders shares of stock in exchange for its lands, and the directors, in a large majority of the sales of lots by them, accepted and received from the purchasers in payment therefor, instead of a money consideration, a surrender of shares in the capital stock of said company, owned by said purchasers, in all such instances cancelling upon the books of the company the shares thus surrendered; that very many shares had been in that manner retired, until now there were not more than 50 shares outstanding; that no dividend of the cash proceeds arising from sales of land had been declared among the stockholders, although the same had always greatly exceeded the expenses of the company, but the profits had been permitted to accumulate; and that the market value of a share in the capital stock of the company far exceeded now the face value of such share, to wit, $10,000 and upwards.

The bill further showed that on April 8, 1839, by an instrument in writing, White appointed one Abner S. Lipscomb his attorney in fact, for him, among other things, to transfer any or all of his Galveston stock, or any interest he might have in the city of Galveston; that White thereupon delivered to Lipscomb, for that purpose, the said 67 certificates of stock; that on December 3, 1841, Lipscomb surrendered to the company 3 of the certificates issued to White, namely, certificates numbered 33, 36 and 39, out of Book C, and with the consent of the company, and by an entry on its books, but without authority and in fraud of the rights of White, transferred the 3 shares of stock represented by the 3 certificates into his own name, receiving from the company, in lieu thereof, a certificate of ownership of said three shares, issued under its seal in his name; that White died on December 10, 1841, leaving Mary S. White, bis wife, the plaintiff Asenath A. Ware, his daugh

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