
    The President and Selectmen of Natchez vs. William J. Minor, Administrator of J. H. Leverick et al.
    It seems, that though a conveyance to the members of an unincorporated company and their successors in office may be void, yet a deed conveying realty to D. as president of an unincorporated company and his successors in office, in trust and for the use and benefit of the stockholders and their heirs, in proportion to the number of shares owned by each, is valid; and where on a sale made by D. as president, notes are given for the purchase-money, the payment of them may be enforced either by suit at law, or where a mortgage on the premises is given to secure the payment, by bill in equity.
    Where the vendee is let into possession of the premises and is sued for the purchase-money; and no eviction had taken place, no disturbance, nor outstanding title alleged to exist, and no allegation of fraud or mistake, he cannot obtain relief in equity, because he, by his deed of purchase did not acquire the fee in the property purchased.
    Therefore, where L., by deed conveyed certain real estate to D. as president of an unincorporated banking company and his successors in office in trust for the use and benefit of the stockholders and their heirs, and D. by virtue of authority from the stockholders, sold a portion of the property to N. who had full notice of the title of D.; and the assignee of one of the notes given by N. for the purchase-money filed a bill in equity to foreclose the mortgage on the property executed by N. to secure their payment; it was held, that N. could not resist the foreclosure of the mortgage, merely on the ground that the deed to D. for the use of the company was void, and conveyed no title to the company or to D. for their use.
    A deed to the members of an unincorporated company and their successors may be void for uncertainty, but if a trustee be named as the grantee, the uncertainty is removed, and the deed is valid; and the trust will be enforced.
    Where lands were conveyed to D. as president of an unincorporated company for the use of the stockholders ; and D. by authority from the stockholders, sold a portion of the lands thus conveyed to N. who executed bonds for the purchase-money; and the stockholders afterwards sold their shares to S. who received the notes given by N. to D. for the land purchased by N.; renewed one of them with N.; assigned one of them to a third person, and subsequently contracted with N. for the purchase of the land itself bought by N.: Held, that these acts of S. were all acts of affirmance of the contract of sale made by D. as president, and precluded S. from subsequently setting up that he had disaffirmed the sale by D.
    
      Where an agreement between the corporation of a city and an individual was signed by both parties and delivered to the clerk of the city for safe keeping, and the individual obtained possession of the agreement afterwards and erased his name from it; it was held, that the agreement was still valid and binding; one party to it could not thus rescind or avoid the contract.
    By the law of Mississippi the assignee of bonds holds them subject to all equities which exist between the maker and the assignor at the time of the assignment, and which may arise up to the time the maker has notice of the transfer.
    Where, therefore, the payee of a bond who had assigned it to a third person, contracted with the maker for the purchase of a piece of land, and agreed, as the consideration, to deliver up the bond of the maker to him; it was held, that if, at the time of the sale, the maker had no notice of the assignment. of the bond; the assignee of the bond would be bound by the sale, and could not enforce payment thereof of the maker; if, however, at the time of the sale the maker knew of the previous transfer of the bond, the assignee may still enforce payment of the maker, as the bond will then be valid in his hands.
    Pleadings are to be taken most strongly against the pleader ; where, therefore, a maker of a bond which had been assigned, in an answer, to a bill filed by the assignee to foreclose a mortgage given to the assignor by the maker, the maker set up a payment to the assignor; but did not aver that at the time of payment he had no notice of the assignment to the assignee, it was held, that the absence of such allegation would of itself go far to sustain a presumption that he had notice.
    Where the payee of a bond in contracting with the maker for its settlement by taking property in payment of it agrees to deliver the bond to the maker but does not actually deliver it: Held, that such a contract, executory in its character, of itself conduced to prove that the maker had notice at the time of the assignment of the bond.
    Bonds made in this state and payable in this state must be construed and their payment enforced here ; but whether an assignment of such a bond under a foreign law, not in accordance with the law of this stale, will pass title thereto,— Quiere? It seems it would be valid.
    An assignment of a bond secured by mortgage on real estate, where the debtor resided, the bond was made and the land lay all in this state, but the assignment was made in another state, in accordance, however, with the laws of this state, will be valid ; and the assignee may enforce payment of the bond against the maker, and may foreclose the mortgage given to secure its payment, by bill in equity.
    Where a bond secured by a mortgage has been assigned by the holder to a ' third person as collateral security for the payment of drafts to be drawn by the assignor on him, and such person accepts and pays such drafts ; he will be entitled to foreclose the mortgage on the bonds assigned to him as collateral.
    
      On appeal from the superior court of chancery; Hoii. Robert H. Buckner, chancellor.
    James H. Leverick and James H. Watson, partners under the style of J. H. Leverick & Co. filed their bill against the President and selectmen of the city of Natchez to foreclose a mortgage, executed by them to Stephen Duncan, president of the Natchez railroad company, in the month of March, 1837, to secure the payment of three bonds for $5596 66§ each, bearing eight per cent, interest, and payable at one, two and three years from date. That these bonds had been given to Duncan, President, &c., by the city for the purchase of the property conveyed by the mortgage, and in November, 1838, had been transferred by Duncan to R. M. Strother, who assigned them, on the 20th of that month, to complainants. The bill and mortgage are in the common form.
    The answer to the bill by the president and selectmen of the city, admits the execution of the bonds and mortgage, and states that complainants had obtained a judgment on one of the notes in the United States circuit court at Jackson, which had been enjoined on the chancery side of said court; and that they have rejected the matters set forth in their bill in that court, and pray that they may be taken and regarded as a cross bill in the case. The cross bill is as follows :
    It states that on the 20th of June, 1834, Ann Townshend and Samuel A. Lard conveyed to Stephen Duncan, president of the Natchez Railroad Company; a lot between the promenade and the river one hundred and fifteen feet wide, in trust for the use of the stockholders; a number of persons had subscribed for stock in a company to build a railroad from the bluff to the river, and some or all of them had paid their subscriptions, but they were never incorporated; on the 21st of March, 1837, Duncan, as President, &c., conveyed to the city of Natchez the lot embraced in the mortgage for $16,600, and to secure the payment the city executed their bonds payable to Duncan as president, &c.; on the 15th November, 1838, or previous, Strother obtained said bonds ; and the first being past due, the city renewed it by giving him a bond for $6507 38, bearing date 15th November, 1838; on the 3d January, 1839, Strother entered into articles of agreement with the city that 'the city should convey to him the said lot except “ Cypress Street,” for which compensation should be made, and that Strother .should surrender said bonds to the city to be cancelled; that the articles of agreement were deposited in the clerk’s office of said city. Strother obtained them under pretence of taking a copy, and fraudulently expunged his name, and returned the articles in that condition to the clerk and left the state until the fall of 1839. That Strother afterwards delivered said bonds to J. H. Leverick & Co. as collateral security for a debt previously due by him to them. On the two bonds last due suits had been brought in Adams county by Leverick & Co. and were still pending. Since the judgment in the circuit court of the United States, the complainants had been notified by Duncan not to pay the bonds to Leverick & Co. They were informed by Duncan that Strother procured the notice by fraudulent representations to him that he had purchased up all or nearly all the shares from the stockholders; that he was about to contract for said lots, and desired said bonds to cancel or deliver up, and Duncan, relying on his representations, delivered the obligations to Strother to be by him delivered to the city or cancelled. That they have been at all times ready to comply with their contract, but Strother, though often requested, had failed to comply with the contract on his part; that Strother procured said bonds without consideration and by fraud; and obtained said articles of agreement by fraud and false pretences, and drew lines across his name and departed from this state and assigned away or delivered said bonds to Leverick & Co. with a design to defraud the complainants. That Strother obtained from Duncan a conveyance of part of said land and also procured from several of said subscribers conveyances of their interest in said land, but there were several subscribers to whom he had not refunded their subscriptions. That Strother refuses to comply with his agreement, sometimes pretending the deed from Duncan is void and that he can recover the land; at other times pretending that the deed from Ann Townshend and Samuel A. Lard to the company is void because no such company had been incorporated, and yet that complainants could he compelled to pay said bonds, notwithstanding such failure of consideration. At other times pretending that by erasing his signature from said agreements he is discharged from performance thereof. The prayer of the bill was that the bonds might be decreed to be delivered up to be cancelled upon complainant’s re-conveying the land to Strother, and for an injunction.
    The substance of the answer of Leverick & Co. to the cross bill stated they had no knowledge of the conveyance from Townshend and Lard to the President of the Natchez Railroad Company; nor of the association called the Natchez Railroad Company ; nor of the conveyance from Duncan, President, &c., to the President and Selectmen of Natchez; but have been informed and believe said association did direct Duncan to convey the legal title to said city, and that he did so convey. They had no knowledge, information or belief respecting the agreement between Strother and the city to cancel said bonds. Do not know or admit that Strother obtained the articles of agreement by fraud and erased his name; deny that Strother transferred said bonds after making said agreement, but states the truth to be that Strother assigned said bonds to them on the 20th November, 1838, as collateral security for a debt then due of $18,757 50, and that said president and selectmen had notice thereof when they entered into the agreement with Strother. They state they do not believe that Duncan gave complainant notice not to pay said bonds. That Duncan never did represent that Strother had obtained the bonds from him by fraud; denies that Strother represented that he had purchased all the shares, and was about contracting with the city to deliver up said bonds to be cancelled. They insist on a total want of equity in the bill by way of demurrer.
    There is an amended answer filed, in which it is stated that the consideration of the transfer by Strother of the notes to Leve-rick & Co. on the 20th November, 1838, was not a preexisting debt, or a debt then due, as would be inferred from the original answer. The true consideration is then set forth, and shown to have been the two letters of credit given by Leverick & Co. to Strother and his partner for $20,000, $15,000 to be used at St. Louis, and $5,000 at Natchez. And the reason why, in the original answer, it was called a debt then due, or the notes were said to have been described as collateral security for a debt due from Strother, was, titat where the letters of credit were issued, they were charged upon their books and debited to Strother, as is the custom of merchants. And in the language of merchants, the person receiving the letter of credit owes the amount of it in account till a final settlement.
    Stephen Duncan, for complainants Leverick & Co. proved that he was President of the Natchez Railroad Company in 1834, and in that capacity received from Samuel A. Lard, for the railroad partially constructed by him, with the land adjacent thereto, a deed for the consideration of $18,000 (he thinks) subscribed by various individuals composing the company, in shares of $100 each; he could not recollect the names of the persons composing the Company. One of the conditions of the subscription was, that no subscription should be binding unless the whole number of shares were subscribed. He thinks near $12,000 were then subscribed, and he thinks the remainder was subscribed by Lard, in the names of several individuals.
    The land was sold at public auction; one half was bid off by the president and selectmen of the city of Natchez, as he was informed at the time, for about $18,000, for which they gave the obligations or notes referred to in the bill. The residue was struck off to individuals, who, he believes, refused to comply with the conditions, to wit: giving their notes, with a mortgage on the property sold.
    The notes of the city were lodged with him as President of the Company, for distribution, when paid among the stockholders, and were held by him some time for that purpose. In the winter or fall of 1838, they were given to Strother, upon his assurance that he had obtained from all or nearly all the stockholders, conveyances for their respective interests in the proceeds of the land sold, and on the land unsold, which conveyances Strother exhibited to witness,
    
      He knows nothing of his own knowledge of any agreement between Strother and the city, for the purchase of said land. He made some objection to delivering said bonds to Strother, on the ground the city might object to the title, or bring witness individually into difficulty; but Strother replied, there was an understanding between him and the selectmen on the subject; and Dr. Tooley, President of the selectmen, being in the directors’ room of the Agricultural Bank, of which witness was President, he called to him and asked in relation to the understanding with Strother. Tooley replied, there was an understanding of some kind with Strother, but the matter was not consummated ; but he believed it would be. The witness returned to the banking-room, and delivered the bonds to Strother, on his executing a bond of indemnity to him.
    That he delivered the bonds to Strother, because of the transaction by which Strother had become the owner of the stock as before stated, considering him the rightful owner of all the stock except what witness was willing to become responsible for, according to his conveyance of all said stock to Stro-ther, and though he desired the city and Strother should make an amicable adjustment, yet neither that desire nor the contemplated agreement would have made or did make any difference as to the delivery of the bonds to Strother.
    The inducement was the assurance on the part of Strother, .that he had bought out nearly all the stockholders, and received their conveyances for their respective interests; except the shares formerly claimed by Lard, and for which he had a transfer from Lard and a judgment which bound Lard’s interest in the land; and furthermore his assurance, with the remark of Dr. Tooley, that tlie understanding between him and the selectmen would be in fact consummated.
    He learnt from an individual correspondence with Leverick & Co. that the firm received the bonds as a collateral pledge for payment of bills to be drawn by Strother, and for a debt contracted by him. He (witness) received a letter of credit in favor of Strother from Leverick & Co. on witness, for $5000, dated November 20th, 1838, which Leverick & Co. on the same day informed defendant was based on said obligations delivered to them by Strother as collateral security, for that and other debts and liabilities. On faith of this information and letter, witness purchased a bill of Strother on Leverick & Co., dated December 12, 1838, for $500, and other bills at various times, until the credit was exhausted. He delivered the bonds to Strother before November 9th, 1838, and Strother left Natchez for New Orleans November 15 th, 1838. Witness had at no time forbid the payment of said obligations. When delivered to Strother, he considered he had no control over them or right to forbid their payment, especially after he heard they had passed out of Strother’s hands.
    He knows Strother is owner of all or nearly all the stock of said Company, by conveyances, though he believes Strother has not paid a dollar for them, except what he may have paid Lard; the notes Strother executed for the same having in no instance been paid. Strother was the owner as above stated, at the time the bonds were delivered to him, otherwise witness would not have delivered them. He believes Strother practised a fraud in obtaining the conveyances of the stock, by giving notes he did not mean to pay. This is a mere impression from his subsequent conduct. The only shares not then conveyed to him, were those of Joseph Dunbar, Mrs. Bingaman, and witness’s ; which, under a general authority, witness conveyed to him, leaving three shares of I. Sisloff, not conveyed to him, and six shares of Huddleston’s, afterwards conveyed to him. Witness made the conveyance of all said stock to Strother, as President of the Company, in the same way the land had been conveyed by him to the city; both what had been conveyed by the stockholders themselves, and what had not, for the reason that, as Strother had obtained nearly all the individual conveyances, he was willing to run the risk personally, that the others would ratify what has been done.
    On cross examination, he stated that he had no knowledge that said Railroad Company was ever incorporated.
    He was informed by letters, in an individual correspondence between J. H. Leverick and himself, that the notes were lodged with his house as collaterals. In one of his letters to Leverick, in reply, he stated he thought the notes would not be paid, for the city had no property other than that mortgaged for payment of the notes, which would not bring half the. amount; and, furthermore, that he thought it probable the city might object to the title, and on the ground of the want of valuable consideration, get clear of the payment of the notes altogether. The communication from Leverick & Co. was received shortly after the notes were given to Strother. Neither Leverick, nor the firm, ever addressed him as President of the Natchez Railroad Company.
    Ralph North, Clerk of the city of Natchez, proved that' he knew that the agreement to cancel the sale of property for whom the notes now in controversy in this suit were given, was made and executed, and deposited in the office of the said President and selectmen, and was taken out of the office and after-wards returned with the name of Strother erased. Knows Stro-ther intermarried with Amos Townshend, who made the deed to Duncan.
    H. Tooley, President of the Selectmen of the city, proved that sometime in December, 1838, Strother applied to the city to appoint a committee to contract with him for the purchase of the land; a committee, composed of witness, Robert Patterson, and Rasa Parker, were appointed,; that the committee, according to the authority conferred upon them by the board, did contract with the said Strother, and so reported to the board, and the report was agreed to by the board, at their meeting on the 19th December, 1838; and that the agreement was signed, sealed, and delivered by Reuben M. Strother to the President and Selectmen, he, as President of the board, receiving the same.
    That the business closed by said agreement, was under negotiation between Strother and the city, for several months previous to the execution of the agreement. Pending the negotiation Strother was required to surrender thé notes (bonds) agreeably to the stipulations as finally made. Strother said he had pledged or delivered one or more of the notes (bonds) to a merchant in New Orleans, but had not sold the same, and would get back said note or notes, within the time specified by the agreement. That he had examined the stroke of the pen through the name of Strother, and positively asserts it to have been done since the time when the agreement was signed by him as President of the board; how, by whom, when, or for what purpose, he cannot say, but it was done without authority, and contrary to the clear understanding of the parties when the agreement was executed. The groundwork of the agreement had been understood many weeks before it was executed.
    On cross examination, he stated that Strother said he had pledged the bonds, whether one or more witness cannot say, to a merchant in New Orleans, but had not sold the same. Which of the notes, or to whom pledged, witness does not recollect being mentioned. The information of said pledge was made before the execution of the agreement. He appended to his deposition the articles of agreement, with the name of Strother cancelled.
    B. Cozzens proved the signature to a letter signed Strother, Holcomb <fc Co., of St. Louis, Mo., written to J. H. Leverick & Co., to have been written by Strother; the letter was da.ted November 20th, 1838, enclosed the bonds of the city to Leverick & Co., and directs Leverick & Co. to place them to the credit of Strother, Holcomb & Co., and advise receipt.
    They wish Leverick & Co. to furuish them with a letter of credit to draw on them through the State Bank of Missouri, for $15,000, in sums to suit their convenience, at six months date. They desire a credit to draw on them at Natchez for $5000 at ninety days date; the latter to be drawn for either by Reuben Strother or by Strother, Holcomb & Co. This letter is dated New Orleans, November 20th, 1838.
    A. P. Merills proved, that the bill of Strother, dated November 28, 1838, on Leverick & Co. for $500, in favor of Duncan, was purchased by the Agricultural Bank at Natchez, due at ninety days, was accepted by Leverick & Co., and paid at maturity ; this bill was bought on faith of the letter of credit and the credit of the payee.
    Duncan’s deposition was taken a second time, and he proved the drawing three sets of exchange by Strother in favor of Duncan on H. Leverick & Co.
    One dated December 12, 1838, at 90 days, 500
    One “ December 27, 1838, at 90 days, 3000
    One “ January 9, 1839, at 90 days, 1000
    At their dates Duncan had an account with Leverick &• Co. on his individual credit and as their agent. Some part of the money paid for said bills was his own, and some part Leverick & Co.’s. The bills were indorsed by witness, and forwarded to Leverick & Co. and placed to his credit, and had been paid to Duncan in settlement of account. The letter of credit at Nátchez was delivered by Strother to Duncan shortly after date of the bill of exchange of December 12,1838, and was addressed to Stephen Duncan; and was in substance as follows, viz.:
    “Messrs. Strother, Holcomb & Co. of St. Louis, represented by Mr. Strother, who will hand you this, are authorized to draw on us from Natchez for 5000 dollars at ninety days date, which we will accept and pay. Your friends,
    Jas. H. Leverick & Co.
    
      New Orleans, November 20, 1838.”
    George Hall, Cashier of the Commercial Bank of New Orleans, proved that that bank received for collection, in January, 1839, from the Bank of Missouri, three drafts, drawn by Stro-ther, Holcomb & Co. of St. Louis, on James H. Leverick & Co. of New Orleans;
    One dated December 15, 1838, at six months, for $1500
    One “ December 18, 1838, at six “ 5000
    One “ December 20, 1838, at six “ 3500
    They were regularly accepted and paid by Leverick & Co.
    Jacob A. Otto proved that he was book-keeper in the commercial house of James H. Leverick & Co. in June, 1839, and had been so ever since. Knows Leverick & Co. paid several drafts, accepted by them, and drawn by Strother, Holcomb & Co. of St. Louis;
    One dated December 15, 1838, at six months, for $800
    One “ December 24, 1838 2500
    
      He proved also the payment of the drafts spoken of in the deposition of George Hall.
    The deeds from the individual stockholders to Strother, of their stock and interest were all filed. It will be sufficient to state the recitals of one, as they were all alike in form. They “bargain, sell, remise, release, convey, enfeoff, confirm, and forever quitclaim, unto said R. M. Strother, his heirs and assigns forever,- all my right, title, and interest in and to the following real estate, to wit: Certain land situated in the city of Natchez, more fully described in a certain deed of conveyance from Ann Townshend and Samuel A. Lard to Stephen Duncan, as President of the Natchez Railroad Company, recorded Book V. pages 249, 250, to which deed for a full description reference is had; together with all and singular the hereditaments and appurtenances thereunto belonging or anywise appertaining, and the reversion or reversions, remainder and remainders, rents, issues and profits thereof, and all my estate, right, title, interest claim, or demand whatsoever, either at law or equity, in and .to the above-bargained premises, and every part and parcel thereof, whether constituted as stock, capital, or otherwise, of said Natchez Railroad Company, or under any other style or denomination whatsoever, hereby intending to convey to, &c. all my interest and title either in law or equity, to said above-described property, whatsoever it may be at these presents, vested in me.”
    The deed contained a special warranty against his heirs, executors or assigns, lawfully or equitably claiming or to claim said premises or property or any part thereof.
    The deed from Stephen Duncan to the city, dated 21st March, A. D. 1837, after describing the land, continues as follows : — “ As the same was conveyed to Stephen Duncan, President of the Natchez Railroad Company, by deed of said Lard and others, recorded in the office of the clerk of the probate court for Adams county, Book V. pages 249 and 250, reference thereto being had for a more particular description of said land, as also reference is further had to a correct copy of a survey made of the Natchez Railroad property by Joseph Mitchell, affixed to this deed, and recorded with the same; intending to convey all the property which is vested in said Stephen Duncan, President of said Natchez Railroad Company, by, through, and by means of said deed of said Samuel A. Lard and others before mentioned, and none other; together with all and singular the appurtenances, hereditaments, privileges and advantages whatsoever unto the above-described premises belonging or in any wise appertaining, and also all the estates, right, title, interest and property and claim whatsoever, either at law or in equity, of him the said Stephen Duncan, President of the Natchez Railroad Company, of, in and to the same; to have and to hold the above granted, bargained and described premises, with the appurtenances, unto the said President and Selectmen of the city of Natchez, their successors and assigns forever. And the said Stephen Duncan, President of the Natchez Railroad Company, for himself, and for his successors, heirs and assigns, he, the said Stephen Duncan, President of the Natchez Railroad Company and his successors and heirs; the said President and Selectmen of the city of Natchez, their successors, and their heirs and assigns, against the said Stephen Duncan, President of the Natchez Railroad Company, and against all persons lawfully and equitably claiming or to claim said premises or any part thereof, shall and will warrant, and by these presents forever defend. In witness whereof, the said Stephen Duncan, President of the Natchez Railroad Company, has hereto set his hand and seal, the day and year above written.”
    Mrs. Townshend and Lard and wife’s deed to Stephen Duncan, in the premises, purports to convey “ unto Stephen Duncan, President of the Natchez Railroad Company, his successors in office, and assigns, all,” &c. (describing the land, including that in controversy.)
    ‘The habendum and tenendum, are as follows, viz.: — “Unto the said Stephen Duncan, as President of said Natchez Railroad Company, his successors in office, and assigns, in trust however, and to and for the use of the stockholders of said Natchez Railroad Company, according and in proportion to the number of shares of the capital stock of said Company, owned and held by each of said stockholders respectively, and their heirs, executors, administrators and assigns respectively.”
    
      The covenants of warranty are that the said Ann Townshend and Samuel A. Lard covenant and agree with the said Stephen Duncan as President of said Natchez Railroad Company, his successors in office, and assigns, “That they, the said Ann and the said Samuel A. and their heirs, executors and administrators will forever warrant and defend said premises, with said railroad and appurtenances, unto the said Stephen Duncan as President of said Natchez Railroad Company, his successors and assigns, for the uses aforesaid, against the claims and demands of all persons whatsoever, claiming or to claim lawfully said premises, or any part thereof.” This deed was dated the — day of February, 1834.
    It is not deemed necessary to set out the power of attorney to Duncan from the stockholders to sell. It was signed and sealed by twenty of them, Strother amo.ng the number.
    The bill o.f credit for fifteen thousand dollars, was as follows., viz.:
    “ To the State Bank of Missouri.
    
    The object of the present is to advise that Messrs. Strother, Holcomb & Co. of St. Louis, are hereby authorized to value on us to the extent of fifteen thousand dollars at six months date, and any bill or bills so drawn on us to the above extent, and passed through your institution, will be honored and paid by us at maturity ; this credit to remain in force until the first day of February next.
    We are respectfully your obedient servants,
    Jas. H. Leverick &. Co.
    
      New Orleans, March 20, 1838.”
    The articles of agreement between the President and Selectmen of the city and Strother, were dated the 3d of January, 1839 ; recited the sale of the lands from Duncan, as President of the Railroad Company, to the President and Selectmen; and continued, “ and for which the said Strother now holds the obligations of the said President and Selectmen, on behalf of the said city of Natchez, which obligation is manifested by several promissory notes; and whereas it is agreed between the contracting parties, that the said city of Natchez shall convey to the said Strother the property aforesaid, with exception of the portion thereof hereinafter mentioned, which the said city hath subsequent to said sale by the said Duncan to said city of Natchez, laid oif into a street, called ‘ Cypress street;’ now this article witnesseth, that he, the said Strother, will or doth hereby agree on his part to cancel and return to the said President and Selectmen of the city of Natchez, all the notes of the said city now held by the said Strother, that were given for that purpose, at, or before the maturity of said promissory notes; then on such cancelling and return of said notes, the said President and Selectmen shall and will reconvey all and singular the property aforesaid, with the exception of said ‘Cypress street,’ to him the said Strother, with the same appearance of title, that they acquired from said Duncan in his, the said Duncan’s, conveyance to said President and Selectmen, and no other.” ,
    There were other provisions in the articles of agreement, not bearing on the controversy. It concluded in this way : “ It is understood and hereby known, tliat the first of these notes mentioned in the preceding agreement as having been executed by the President and Selectmen to Stephen Duncan, President of the Railroad Company aforesaid, has been renewed to said Reuben M. Strother or his ordef, and there now exist one note to said Strother and two notes to said Duncan.”
    The agreement was signed by Strother, and H. Tooley, President of the Selectmen; but lines were drawn through the former’s name, through which, however, it was still legible.
    Nor is it deemed necessary to set out the correspondence between Duncan and Leverick & Co., nor between Strother, Holcomb & Co. and Leverick & Co. Their contents sufficiently appear in the depositions in the cause. Other depositions were also taken, proving payments by Leverick & Co. on Strother’s account.
    The chancellor, upon final hearing, ordered a decree, foreclosing the mortgage in favor of the complainants, for the amount of $29,439 57, principal and interest, due 20th June, 1845 ; and the President and Selectmen appealed.
    
      One of the complainants in the court below having died, the suit was revived in favor of his administrator.
    
      George Winchester, for appellants.
    1. At the time the bonds were assigned by Duncan to Strother, they were void bonds for want of consideration.
    1st. Because the deed of trust from Ann Townshend and Lard and wife passed no fee simple estate to Duncan, either as a natural person or as an artificial person, by the word “successors ; ” and having no fee simple estate, Duncan, under this void deed of trust, conveyed no fee to the city, as a consideration for the bonds. Co. Litt. 3a; 10 Coke, 266; Com. Dig. Tit. Capacity, 1; Jackson v. Hartwell, 8 Johns. 422; Johnson v. Corey, Id. 385 ; Hornbeck v. Westbrook, 9 John. 73; 2 Johns. Cas. 321; Trustees of Phillips Academy v. King’s Executor, 12 Mass. 557.
    2d. Because if the deed of trust to Duncan vested in him a fee simple estate, as a natural person, in trust for the subscribers to stock in the unincorporated Natchez Railroad Company, under this deed of trust Duncan had no authority to sell and convey the land to the city, discharged from the trust, thereby dissolving the company (which was formed for the sole purpose of building a railroad upon the land) and destroying the trust.
    3d. Because Strother, the cestui que trust, under the deed of trust of the land to Duncan, his trustee, had, at the time of the assignment of the bonds by Duncan to him, disaffirmed the sale and transfer of the land to the city ; had claimed the land from the city, and not the bonds from Duncan ; had, by “ an amicable adjustment, come to an understanding with the city” that he should procure the bonds from his trustee, Duncan, and cancel and surrender them to the city as void bonds. Murray v. Lylburn, 2 Johns. Ch. R. 442; Murray v. Ballou if Hunt, 1 Id. 581.
    2. At the time the bonds were assigned by Duncan to Strother, upon the adjustment of the dispute between Strother and the city as to the title to the land which his trustee had given the city for the bonds, and upon the understanding at that time existing between them, the bonds being void bonds and without consideration; the' city had a right by bill in equity, both against 'Duncan, the trustee, and Strother, the cestui qae trust, to enjoin the collection of the bonds, and to have them surrendered up to be cancelled as void bonds. Hamilton v. Cummins, 1 Johns. Ch. R. 517; Rathbv.ru v. Warren, 10 Johns. R. 595, 596; King v. Baldwin, 17 Johns. 389; Bliss v. Negus, 8 Mass. 48; 2 Stew. Alab. R. 335; Puckett et al. v. McDonald et al. 6 How. R. 335 ; Drew v. Clarke, Cooke, 374,380; Roosevelt v. Fulton, 2 Cowen’s R. 133; Gillespie v. Moor, 2 Johns. Ch. R. 595, 596; Alston v. Outerbridge, 1 Devereux Eq. R. 18; Glas-well v. Thomas, 3 Leigh’s R. 113, 128; Machón v. McDavell, 4 Bibb, 473.
    3. But the bonds were assigned by Duncan to Strother upon the understanding, which amicably adjusted between them their respective claims to the land and to the bonds, and upon that understanding they were assigned for the special purpose of being cancelled and surrendered as void bonds; and under that assignment, Strother had no more right to collect, assign, or pledge the bonds than if they had come into his hands with the knowledge that they were stolen from, or lost by,' the city. Woodhull v. Holmes, 10 Johns. R. 231; Peacock v. Rhodes, Doug. 634, 636 ; Jameson v. Forbes et al. 3 Eq. Rep. S. C. 529, 533 ; 2 Johns. Ch. R. 442; L Id. 581; 26 Pick. 551; 8 Conn. R. 340, or 3d vol. 2d series.
    4. The city has a right to a cancelment of the bonds in equity, because, at the time of the assignment of the bonds to Strother, it was understood in an amicable adjustment between him and the city, that the bonds were given for only an appearance of title, and should be cancelled as void.
    1st. Because they were assigned to Strother for the specific purpose of being cancelled, and he had no right to use them for any other purpose, and his pledging them was fraudulent.
    2d. Because by the articles of agreement, if any valid sale of the land for the bonds had previously existed, it was rescinded, and Strother bound himself to cancel and surrender the bonds.
    
      The city have the same right in equity to have the collection of the bonds enjoined, and the bonds surrendered to -be cancelled as against Leverick & Co. as assignees of Strother, as they would have against Strother himself, if he had never assigned the bonds.
    1st. Because by the assignment of the bonds to Leverick & Co. for collection, and to pass them to the credit of Strother, Holcomb & Co., Leverick & Co. are mere agents of Strother for collection ; and by the laws of Louisiana, where this assignment at New Orleans was made, Leverick & Co., by this assignment had no right to hold these bonds in pledge as a collateral security for the authority given Strother, Holcomb & Co. to draw future bills upon them, unless there was an agreement by authentic act before a notary public to pledge them as such collateral security. No such agreement, by authentic act, is either stated or proved. Civil Code of Louisiana, 472, 473; 2 Louis. Rep. 361, 386 ; 17 Id. ,156, 157, 185,428; Burke v. Pre?itiss, 6 Mass. 430.
    2d. Because, had these bonds been foreign bills of exchange, even under the rules of the law merchant as applicable to-foreign bills of exchange, being upon their face given by a city corporation to Duncan, president of the Natchez Railroad Company, and specially indorsed by him in his fiduciary character, they were dishonored by these facts apparent upon the face of them, and were not marketable, negotiable paper, such as Lev-erick & Co. had a right to receive without inquiry in the way of business, and without such inquiry they are not bona fide holders. Ayer v. Hutchins, 4 Mass. 372 ; 1 Dow’s R. referred to in 1 Johns. Ch. R. 581; Mott v. Hicks, 1 Cowen’s R. 515; Peacock v. Rhodes, Dough 634, 636 ; Ambl. 66 ; Woodhull v. Holmes, 10 Johns. 231; Wheeler v. Gould, 20 Pick. 551.
    3. Because, under the law merchant, even if these bonds had been bills of exchange, a mere authority given by Leverick & Co. to Strother, Holcomb & Co. to draw future bills of exchange, as it incurred no present liability, and as the letters of authority might be withdrawn before a bill was drawn, did not constitute a valuable consideration for such an assignment, so as to constitute them innocent bona fide assignees, for a valuable consideration, and as such to hold them as collateral security, discharged of the equity of the city against them. Ontario Bank v. Worthington, 12 Wend. 601; Ex parte Blox-ham, 8 Yesey, 531; 13 Wend. 606; Rosa v. Broiherson, 10 Wend. 86; Payne v. Cutler, 13 Wend. 605 ; Hall v. Hale, 8 Conn. R. 340.
    4. By the rule in equity, upon equitable assignments, the rule of the law merchant is not adopted, but the assignee takes a bond subject to all equities which existed against it at the time of the assignment, and the assignee is, in- all cases, bound to make inquiry before he takes a bond. 2 Johns. Ch. R. 442.
    5. Under our statute, making bonds, notes, and other instruments, for the payment of money or any other thing negotiable and assignable' by indorsement, these instruments are subjected to all defences which the obligor has against them prior to notice of the assignment, and the duty is imposed, in all cases, upon the assignee, to make inquiry before he takes an assignment, or he is not held a bona fide assignee, without notice of the ■equities of the obligor. Defrance, use of, v. Davis, Walker’s R. 71; Norton v. Rose, 2 Wash. R. 233; 1 Munford, 536; Wheeler, 'Assignee of Baynton, v. Hughes’s Executor, 1 Dallas, •23, 27; 2 Johns. Ch, R. 441; Livingston v. Hubbs, 2 Johns. Ch. R. 512; Bury v. Hartman, 4 Serg. & R. 175 ; Solomon v. Kimmell, 5 Binney, 232.
    6. But Leverick & Co. were informed by Duncan, that the city objected to the title to the land, and would probably avoid the payment of the bonds, in sufficient time to enable them to recall their letters of authority before a bill was drawn upon them by Strother, Holcomb & Co. They were, therefore, equally with Strother, parties to the fraud, and will not" be permitted to consummate the fraud by their suits at law on the bonds, and in equity upon the mortgage, to collect the money out of the city to pay the debt of Strother, Holcomb & Co. Knapp v. Lee, 3 Pick. 452; Woodhull v. Holmes, 10 Johns. 231; 2 Johns. Ch. R. 512; 3 Conn. N. S. 340.
    
      
      Montgomery and Boyd, for appellees.
    1. The proposition by Strother, and the agreement to purchase the land of the city, were made in December, 1838. Strother left for New Orleans on the 15th November, and the letters of credit bear date the 20th November, so that the bonds were assigned to the appellees before the contract of Strother with the city. What agreement he may have had with the city when the bonds were delivered to hini by Duncan, does not appear, nor is it relied on in the pleadings ; it was not complied with, whatever it was.
    2. The renewal of the bond of the city to Strother shows that no agreement for the settlement of the bonds had been made between Strother and the city, when Duncan assigned to him the bonds.
    3. Whatever agreement was entered into between Strother and the city, was made after Leverick & Co. had the bonds in possession, of which the city, through the president of the selectmen, had notice; and the agreement for their cancelment was a fraud on the rights of Leverick & Co.
    4. Before anything was done under the agreement, to bind the city to convey the lands, Strother abandoned the agreement, and thus put it out of the power of the city to insist upon the contract; nor does it appear that the city, by any vote or act, or in authentic way, ratified, approved, or directed the act of the president, by which he entered into the contract with Strother.
    5. There is no proof that the bonds were obtained from Duncan by fraud; the charge is denied and is disproved, by the evidence.
    6. There is no stockholder, as appears by the proof, who has any right to complain of the action of Duncan, unless it be Strother, who, by having himself pledged the bonds, could not be heard to stop their payment.
    7. Judgments at law have been obtained on these bonds against the city; that is a conclusive admission of the complainant’s right to them, and prevents the city from setting up a want of title to them. Such defence was a legal one, and no excuse is shown why it was not made at law.
    
      8. None of the stockholders, whose interests, it is alleged, are still undisposed of to the city, complain, or assert title to the lands; the city bought but half the land; they may be satisfied out of the other half. At all events it will be time to redress their rights when they complain.
    9. The deed from Duncan to the city refers on its face to the deed from Townshend, and Lard and wife, which shows the trust character in which Duncan held the property. The city, therefore, had notice of the rights of all the stockholders, and the nature of the title.
    10. It is not averred in the pleadings that there is any outstanding title; that the city had not notice of the title she was getting; nor of any failure of consideration, she cannot, therefore, set up a failure of consideration, even if sustained by the proof.
    11. The city has now all the title she contracted to get, without interruption or threat from any quarter. She has a personal warranty of title from Dr. Duncan; she dedicated as a street portion of the property, mortgaged it to Dr. Duncan; it would be strange if the mortgaged property could not be sold under the mortgage itself. 2 John. Cases, 321; Rev. Code, 458, § 23; 1 S. & M. Ch. R. 126, 389.
    12. The authorities cited to show that the assignment to Leverick So Go. was not valid according to the laws of Louisiana, when examined, will be found to be cases under the bankrupt and insolvent laws of that state, and do not apply to cases of transfer between solvent persons. Lou. Civ. Code, Art. 3121-3125. The assignment was valid under the laws of this state, and that is sufficient.
    13. The case made by the bill and answers.is for the complainants ; whatever positions are taken in argument, or arise aliunde, and are not sustained by the pleadings, cannot be maintained.
   Mr. Chief Justice Sharkey

delivered the opinion of the court.

This case originated in the court of chancery, on a bill filed by James H. Leverick, in his lifetime, to foreclose a mortgage on certain real estate, in or near the city of Natchez, and the president and selectmen filed an answer and cross-bill, in which they claim to be exonerated from all liability.

It seems that there was a joint stock company at Natchez, known as the Natchez Railroad Company, though it was not incorporated. This company, in 1834, purchased of Lard and Mrs. Townshend certain real estate, for the joint benefit of the company, and took a conveyance in the name of Stephen Duncan, as president, and “his successors in office and assignees,” in trust for the use and benefit of the stockholders “ and their heirs,” in proportion to the number of shares owned by each.

In March, 1837, Duncan, as president, under a power of attorney from the stockholders, conveyed a portion of this same property to the president and selectmen of the city of Natchez, for $13,600, payable in three instalments, secured by bonds and mortgage. In Duncan’s deed reference is- made, for greater certainty, to the deed from Lard and Townshend, then of record, and he undertook to convey only such interest as he had acquired by the former conveyance. The bonds remained in possession of Duncan until the fall of 1838, when he delivered them to Strother, on being assured that he had purchased but all or nearly all of the stockholders, who were the owners of the bonds, Strother having exhibited 'his conveyances at the same time. This was after the first bond was due, and the city authorities gave Strother a new one in its stead, and thereby changed the time of payment.

- Strother, very soon after he received the bonds¡ took them to New Orleans, and on the 20th of November, 1838, pledged them with Leverick & Co., to secure them for- letters of credit which they gave him, to the amount of $20,000, on which he drew bills to about that amount, which they accepted and paid, and in this way Leverick & Co. claim to- be the holders of the bonds, and entitled to the benefit of the mortgage.

After this time Strother entered into negotiations for the purchase of the same property the city had purchased of Duncan, which negotiations seem to have been going on when Duncan delivered the bonds, and a contract was finally entered into on the 3d of January, 1839. By this the city authorities agreed to convey the property to Strother, except such parcels, for which he was to be allowed compensation, which had been disposed of on leases, or appropriated as streets, “with the same appearance of title” that had been acquired from Duncan. But this conveyance was only to be made if Strother would deliver up to be cancelled the bonds which had been given for the property, which he agreed to do, at or before their maturity. This instrument was signed by Strother, and by Tooley, as president of the selectmen ; but the name of Strother was afterwards obliterated by drawing the pen over it. This is said to have been done by Strother, who obtained it from the clerk with whom it had been deposited, some time after the instrument was executed.

Leverick & Cp. had brought suit in the United States court, and recovered judgment on one of the bonds, and the defendants enjoined the judgment. On the others they had brought suits in the circuit court of Adams county, and were also proceeding to foreclose the mortgage. The foregoing statement contains the substance of what is given more in detail by the cross-bill and proofs. The chancellor decreed a foreclosure, from which an appeal was taken.

Various grounds are taken in argument for the appellants, some of which are entirely independent of the contract between Strother and the board of selectmen. First, it is insisted that the bonds were void, because Duncan acquired no title by the conveyance to him, as the deed was to him and his successors, which does not. convey a fee to an unincorporated company and that having acquired none, he could of course pass none to the city.

The answer to this position seems to us to be most obvious, although it was a point much pressed. There is no such thing as a defect of title set up in the cross-bill. No eviction, no disturbance, no outstanding title alleged to exist. And if it be even true that the city did not acquire the fee, that is not, of itself, a reason why a court of chancery should interpose and declare the bonds void. For anything that appears, they got all they contracted for. There is no allegation of fraud, misrepresentation or mistake, and the authorities referred to on this point, require that there, should be fraud or mistake. They cannot, therefore, apply where there is nothing of the kind. There is not even an allegation that the vendees were ignorant of the nature of the title. On the contrary, it is perfectly manifest that they were not. The conveyance to them refers expressly to the deed to Duncan, and professes to convey only the property or interest vested in Duncan by the conveyance from Lard and Townshend. It is true there is a general warranty, but the preceding part of the deed is at least sufficient to show that the vendees must have been informed of any defect of title. Besides, the conveyance to Duncan was in trust for the use of the stockholders and their heirs,” in proportion to the quantity of stock owned by each. Such a trust would undoubtedly be enforced. A deed to an unincorporated company, and their successors, might be void, and so a deed to the citizens of a town would be’void on the authorities cited; but this is on the ground of uncertainty; there must be a grantor and a grantee named, who is capable of taking. The naming of Stephen Duncan as trustee obviated the difficulty, as will be seen by the language of the court in the case of Jackson v. Corry, 8 John. 301. The ground, therefore, that the bonds were void must fail, and this disposes of the several positions predicated on the assumption that the bonds were void for a defect in the title.

Another position is, that the bonds were acquired from Duncan by fraud, but this position is not true in point of fact. Duncan states expressly that he delivered them on beibg satisfied that Strother had purchased out the interest of the stockholders, and had thereby acquired a right to the bonds; and on the faith of his right they were delivered, not to be cancelled or delivered up, but to be collected or used #as Strother’s property. And another conclusive proof that they were not so acquired is, that the city renewed the obligation first due, after Strother had obtained possession of them, without questioning his right.

Nor is there any foundation for the argument that Strother, who was a cestui que trust, had disaffirmed -the contract made by Duncan, his trustee. He had affirmed it by various acts. The contract for the bonds was the first act of affirmance. If he had chosen to disaffirm he had nothing to do with the bonds given for the purchasemioney. Taking a renewal of one of them, was a most unqualified act of affirmance, and so was the contract to purchase the property, and the transfer of the bonds was another act equally conclusive. Admitting, then, that he had a right to disaffirm, he did not do so. On the contrary, every act in reference to the bonds and property, was an unqualified affirmance of Duncan’s sale.

The case must, therefore, turn exclusively on the equity, if there is any, arising out of the contract between Strother and the city. It is charged in the bill and established by proof, that this agreement was signed by both parties, and delivered to the clerk for safe keeping, and that Strother obtained possession of it afterwards, and erased his name. He could not, in this way, rescind or avoid the contract. This circumstance, therefore; avails nothing, and if the'strenglh of the stipulations will entitle the city to relief, it must be given.

It is true that Leverifck & Co. took the bonds subject to all the equities which existed between Strother and the city at the time of thef transfer, and even up to the time the city had notice of the transfer. Now, as Strother had agreed to purchase the property and deliver up the notes, and the city undertook, on his doing so, to convey, that contract is binding on Leverick & Co., unless the city made the contract with notice of the transfer. If this was done, then of course the equities of the city must be subservient to the equities of Leverick & Co. The whole controversy is, therefore, resolved into a mere question of notice, and is easily solved by the proof. The bonds were transferred on the 20th of November, 1838, and the contract between Strother and the city was entered into on the 3d of January, 1839. The first thing worthy of remark on this subject is, that the cross bill does not allege that the contract was made with Strother in ignorance of the transfer. The absence of such an allegation would of itself go far to sustain a presumption that the city authorities had notice. On this state of pleading, the city could not be permitted to change its ground, and rely on want of notice. Pleadings are to be taken most strongly against the pleader ; and it is to be supposed that the best aspect of the case has been presented. But Dr. Tooley speaks positively on this subject, aud he was the president of the board, and as such signed the agreement. He says that when Strother was requested to deliver the notes, he stated that he had pledged them to a merchant in New Orleans, but had not sold them, and would get them back, and surrender them within the time. This information, as it appears from the proof, was given at the time the agreement was entered into. This was notice of transfer, and it was evident on that state of facts, that Strother relied on his ability to redeem the bonds, and the contractin'!; parties must have known that his ability to comply must have depended on his redeeming the bonds, and knowing this fact, the contract was made on the faith of Strother’s promises. The city could not have contracted on the understanding that he then had the bonds in his possession. The circumstance of making such a contract executory in its character, of itself conduces to prove that the city authorities were aware that the bonds had been transferred. As they had notice of the assignment or pledge, they must rely upon the only security they required, the promises of Strother, as contained in the agreement. They have no equity as against Leverick & Co.

But it is lastly insisted that the pledge was not made in accordance with the laws of Louisiana, and therefore Leverick & Co. did not acquire such a right as will enable them to enforce the claim in this state. The bonds were made in this state, and were here payable. They must therefore be construed, and payment enforced according to the laws of this state. The great doubt in cases of foreign assignments, has been, whether the assignment must not conform to the lex loci contractas. The point, however, seems to be settled by some authorities, that an assignment under a foreign law will pass title. Story’s Conflict of Laws, 332, 333; Holmes v. Remsen, 4 J. C. R. 460. But others hold a contrary doctrine. Conflict of Laws, 474. Even an informal assignment is said to be sufficient in equity. We know of no instance in which an assignment has been questioned, if made according to the laws of the state in which the debtor resides, when the contract is payable there, and sought to be enforced there, when real estate is the subject of controversy. Leverick & Co. are seeking to enforce a mortgage of real estate, situated in this state, and if they have acquired a right to do so in conformity to the laws of this stat q they are entitled to their remedy. And we apprehend that whilst a mere assignment of the bonds, made according to the laws of Louisiana, would be binding, that an assignment made according to the laws of this state, would also be valid at law. In equity it surely would be. The pledge, or transfer to Leverick & Co., was made as collateral security; their title was absolute when they accepted the bills and paid them. They then held as bona fide assignees of the bonds and the mortgage, and are entitled to proceed upon either or both.

Decree affirmed.  