MR. JUSTICE MATTHEWS delivered the opinion of the court.
This is an appeal from a decree dismissing a bill in chancery, upon general demurrer for want of equity.
The complainants, also appellants, are the heirs-at-law of David White, deceased, citizens respectively of Alabama and Florida; the defendant, the appellee, is alleged to be a corporation incorporated by an act of the Congress of the Republic of Texas, and a citizen of that State.
It is alleged in the bill, which was filed October 11th, 1880, that the Republic of Texas, on January 25th, 1838, issued a patent to Michael B. Menard, in consideration of $50,000, for one league and labor of land on and including the east end of Galveston Island; that David White, the ancestor of the complainants, advanced and paid that sum for Menard, to secure repayment of which the latter executed and delivered his mortgage on the land to White. Menard at the time had associates, jointly interested with him in the purchase, and others became so subsequently, and the association was a partnership, with a view of organizing a joint stock company for the sale of the land, for profit, in lots, and distribution of the net proceeds as dividends to shareholders, Menard being, however, the managing partner, and until April 18th, 1837, holding the legal title, the indebtedness to White having been incurred in his own name, and the mortgage executed by him individually for the repayment of the same.
About the date last mentioned, Menard released to one Triplett 640 acres of the land to compromise a conflicting claim of
It is alleged, however, that out of the 600 shares, a number deemed sufficient for which no certificates were issued, but part of those which otherwise would belong to the Menard interest, were reserved to be sold for the purpose of paying the debt to White, so as to relieve the Triplett interest from any charge on that account, and so as also to indemnify Menard individually against his liability therefor. The precise number of the shares thus set apart and appropriated, it is alleged, is not known; but it is charged that on March 10th, 1851, twenty-nine shares of the original number so appropriated still remained in the hands of the company undisposed of.
On April 13th, 1838, the holders of these certificates seem to have organized as stockholders of a future corporation, the Galveston City Company, and elected five directors, to whom, as directors of the association, the legal title to the land was conveyed by the trustees. Thereafter the outstanding trustees' certificates were called in, and "renewal certificates," so called, were issued in exchange, which represented the shares of the company.
It is further alleged that about November 7th, 1838, the company, by Menard, its president and agent, but in his individual name, paid White $25,000 on account of the debt due
On February 5th, 1841, the stockholders of the association became incorporated by an act of the Congress of the Republic of Texas as the Galveston City Company, the defendant below.
Long after the organization of the corporation, on March 10th, 1851, Menard made a written report to the company of his agency in the sale of the fifty shares entrusted to him for the purpose of paying the debt to White. In that report, he recounted the circumstances of the history of the transaction, and the facts as to the sale of the twenty-one shares, and the payment made to White, showing the balance due, as above set forth, for which he stated a suit was then pending against him individually, and for which he held the remaining twenty-nine shares of stock. Valuing them at $5,800, which he estimated to be their market value, there would be a deficiency of $8,650 to provide for on the amount due to White. He also claimed that he was in advance for the company, in the sum of $13,000, on other accounts, and asked that the company make provision for his reimbursement by a par credit on its books for the full amount of $21,650. The board of directors, by resolution, admitted the correctness of Menard's statement of his account, and ordered a credit to him on its books for the amount stated.
The suit referred to by Menard, as pending against him, had been brought in the name of one Lipscomb, administrator of White, the latter having died December 10th, 1841, to recover the balance due to White's estate, and to enforce the lien of the mortgage upon the land. To this action, Menard had pleaded the statute of limitations as a bar, and about May 20th, 1851, it was dismissed, on his motion, for want of prosecution.
The bill prays for an account of what is due; that the amount be decreed to be a lien on the land of the defendant; that the twenty-nine shares of stock alleged to have been reserved for the purpose be sold for the payment of the amount found to be due, and for general relief.
It seemed to be supposed in argument that some support for this bill may be found in the allegations that charged the defendant as the successor in law, liable for their obligations, of the associates who were the undisclosed principals, on whose behalf Menard contracted the debt with White. But manifestly the statute of limitations that barred the claim against Menard, and the express lien of the mortgage, a defence not denied to have become perfect as to them, would equally protect those on whose behalf Menard acted as agent, there being no circumstances of equity to prevent the operation of the statute in their favor. None such are alleged, the mere ignorance of the appellants, and even the concealment of the fact that Menard was merely an agent, and of those for whom he was agent, no fraud on their part being charged, manifestly is insufficient for that purpose.
It is equally plain that there is no trust as to the twenty-nine shares of stock alleged to have been placed in Menard's hands as a fund for the payment by him of the debt to White. That arrangement is stated to have been intended as an indemnity
But even were this otherwise, it would be impossible to construe the arrangement into a trust for the benefit of White's estate. There was no privity, and no notice, and the arrangement obviously was merely an adjustment, made among the parties for their own convenience, of the accounts between them, not intended to confirm or to confer any rights upon the appellants.
The objection that the suit should have been brought by a personal representative of White, and that it cannot be maintained by his heirs-at-law, seems also to be well taken, as no sufficient reason is alleged why the administrator, who prosecuted the suit for the foreclosure of the mortgage, might not have been complainant in the present suit.
The claim itself, both as a debt and a lien upon the land, against the party with whom it was contracted, as we have said, is admitted to be barred by the lapse of time; there is no ground stated in this bill why, in equity, it should be revived against the appellee.
The demurrer was properly sustained, and the decree dismissing this bill is accordingly