"In the above-styled cause, which is now pending in this court on appeal from the district court of Galveston county, suit was brought by appellants, who, as successors in title of Robert Triplett, deceased, claim to be the owners of five shares of the capital stock of the Galveston City Company, a private corporation having its domicile and place of business in the city of Galveston, Galveston county, Texas. The suit is against the Galveston City Company and against Maco Stewart, the president of said company, in his individual capacity. The purpose of the suit is to establish plaintiffs' rights as stockholders of said company, to recover dividends due them as such stockholders, to set aside a sale of the lands of said company made by its board of directors to the defendant Stewart, and to enjoin the proposed dissolution of said corporation by the majority of its stockholders.
"The petition, which covers many printed pages of the transcript, contains a full history of the organization of the defendant company, a statement of the basis upon which it was capitalized, and its original capital stock issued, the method pursued in issuing said stock, and the facts and circumstances relied upon to show a continued recognition by the defendant, up to a short time before the filing of this suit, of the rights of the owners of the stock issued to Robert Triplett as stockholders in said company. The facts alleged in the petition are as follows:
"Prior to April 11, 1837, M. B. Menard claimed to own the whole of the league and labor of land granted to him by the republic of Texas, situated on the east end of Galveston Island, and Robert Triplett, for himself and for Sterling Neblett and William F. Gray, claimed to own a portion of said league and labor of land. On the date last named Menard and Triplett, who acted in the premises for himself and co-claimants, compromised their differences by a division of the land. Under this partition agreement Menard released to Triplett a specific 640 acres of the land and received from Triplett a conveyance of all of the remainder of the survey. Before this settlement was made it was the intention of all the parties thereto to have said land subdivided into lots and blocks of varying sizes and to establish a city thereon. After this settlement was made the Triplett 640 acres was conveyed to Thomas Green, Levi Jones, and William R. Johnson in trust, to be subdivided and sold for the benefit of Triplett and his co-owners, in the manner designated in said trust conveyance, and the balance of the survey was conveyed by Menard to Levi Jones in trust to be disposed of for his benefit in accordance with the terms of his trust conveyance. Acting under this deed of trust Jones `intending to execute the trust created in him by said deed, had proposed to represent the value of the said land by issuance and sale of 1,000 shares of joint stock, for which certificates were to be issued to the purchasers, and in pursuance thereof had actually issued certificates for 400 joint-stock shares, of which it was believed many shares had been sold. On the date last named a new agreement was made and entered into between the owners of the land and the trustees before named. This agreement, after reciting the facts above stated, contains the following:
"`And whereas, it being in the contemplation and intention of all parties to these presents that the said league and labor of land should be laid off into lots, for the purpose of building a town thereon, and it being found most beneficial to all parties concerned that the whole of the said league and labor of land should be held on joint account, in the proportions hereinafter specified, and should be under the control and at the disposition of the same set of commissioners or trustees, acting under common plan in regard to the whole, instead of being held partly by said Jones and partly by the said Thomas Green, L. Jones and W. R. Johnson, under different titles and plans, whereby injurious competition and conflicts of interests may be produced:
"`Now, in consideration of the premises, the parties to these presents have mutually agreed and covenanted to and with each other, as follows — that is to say: That the said league and labor, of 4,605 acres of land, shall be conveyed to the said Thomas Green, Levi Jones, and William R. Johnson, in fee simple, as trustees and commissioners to execute and carry into effect the purposes, terms, and intentions of this agreement. That the said league and labor of land shall, by the said trustees or commissioners, be divided into 1,000 shares, of which the 400 shares for which certificates have already been issued by the said Jones shall be regarded as 400 shares, and the lawful holders of the said certificates shall be on the same footing and entitled to the same rights with the holders of certificates issued under the present articles, and upon surrendering their said certificates new certificates, in lieu thereof, shall be issued by the said commissioners or trustees. That the remaining 600 shares shall be sold by the said trustees and commissioners, in such manner as they shall think expedient; but no share to be sold for a less sum than $1,500, unless a majority of the said trustees should be of opinion that it would be expedient to reduce the price, a discretion therein being given to said trustees or commissioners. A certificate, signed by at least two of said commissioners, shall be issued to every purchaser, who shall have a right to demand a separate certificate for each share, or may embrace any number of shares in one certificate. The certificates shall be transferable by assignment made in writing thereon, and signed and sealed by the holder, and acknowledged in the presence of two witnesses, before any justice of the peace or notary public.
"`The proceeds of sale shall be applied as follows: The expense of the trust or commissions shall be first deducted, and the balance shall be divided into three equal parts, of which one part shall be paid to the said Robert Triplett and those claiming under or through him, and the other two parts to be paid to the said M. B. Menard and those claiming under or through
him. It is, however, agreed between the parties, that a sum not exceeding $50,000, shall be deducted out of the first proceeds of sale, after expenses paid, to be applied to the payment of a debt due from the said Menard to David White, of Mobile, Ala., which debt is believed to be less than $50,000, and no further payment shall be made by the trustees or commissioners, to or on account of the said Menard, or those claiming through or under him, until a proportional sum, that is to say, one-third of $50,000, or of the sum applied to the payment of the said White, if a sum less than $50,000 should be so applied, shall have been paid to the said Triplett, or those claiming by or through him. But in case a sum sufficient to repay to the said Triplett, or those claiming by or through him, his one-third part of the money applied to the payment of the said White, should not be raised from the sale to be made by the said trustees, then the said M. B. Menard acknowledges himself to be indebted to the said Triplett, or those claiming by or through him, to the amount of one-third of the sum so applied to the payment of the said White, and promises to pay the same. It is also expressly agreed that this stipulation for the payment of the said White is merely an agreement between the parties to these presents, and not an acknowledgment of any liability on the part of the said Triplett, or those claiming by or through him, to pay the debt due from the said Menard to the said White, or intended to create any lien in favor of the said White, or to give any security for the payment of his debt, but is subject at all times to a rescission by agreement between the said Menard and the said Triplett, and of those claiming by or through them.
"`It is further agreed that so much of the said 400 shares, for which certificates have been issued as aforesaid by the said Jones, as now are in the hands of said Jones, or of any of the parties to these presents, or of their agents, and subject to their control, shall not be sold for less than $1,500 per share, unless the trustees or commissioners shall determine to reduce the price of shares as aforesaid, but if the price of shares shall be so reduced then the price of what remains of the said 400 shares may likewise be reduced; it being hereby agreed that what remains of the said 400 shares shall at no time be sold for a less price than that demanded by the trustees or commissioners for the shares sold by them. It is further agreed that if the said Menard, or those claiming through or under him, or the said Triplett, or those claiming through or under him, should choose to become purchasers of shares, the trustees or commissioners shall not demand payment in cash for their purchases, but shall issue certificates to them, or either of them, and charge the same to their proportion of the amount to which they would be entitled in case the whole number of shares were sold: Provided, however, that...
