Kansas City, M. & O. Ry. Co. of Texas v. City of Sweetwater

Citation137 S.W. 1117
CourtSupreme Court of Texas
Decision Date31 May 1911
PartiesKANSAS CITY, M. & O. RY. CO. OF TEXAS v. CITY OF SWEETWATER.

Suit by the City of Sweetwater against the Kansas City, Mexico & Orient Railway Company of Texas to restrain defendant railway company from removing its general offices, shops, etc., from the city of Sweetwater. From a decree for complainant, affirmed by the Court of Civil Appeals (131 S. W. 251), defendant brings error. Reversed.

H. C. Hord, J. W. Hill, Jno. A. Eaton, and J. McD. Trimble, for plaintiff in error. R. C. Crane, Beall & Beall, C. P. Woodruff, A. H. Kirby, Johnson & Edwards, W. W. Hamilton, and A. C. Wilmeth, for defendant in error.

BROWN, C. J.

In the year 1897 the Colorado Valley Railway Company was organized for the purpose of constructing and operating a railroad from Colorado City to San Angelo, which company contracted in writing with the citizens of Sweetwater to build its road from the latter place to San Angelo, and to maintain its general offices and machine shops at Sweetwater. The terms of the contract will not be given, as it is not necessary to the determination of any issue in the case.

In 1899 the said railroad company, being largely indebted upon bonds executed and other debts, was by the district court of Nolan county placed in the hands of a receiver, and after proper proceedings had in the court the road, with all its belongings, was sold by the receiver appointed by the court. There were debts against the company which had a lien superior to that of the mortgage bonds and the bondholders entered into an agreement under which they purchased the property at the receiver's sale, acting through trustees appointed for that purpose, and in pursuance of that agreement the trustees did purchase the property at the sale made by the receiver. The terms of the agreement between the bondholders, as to the manner of reorganizing the company and prosecuting it thereafter, is at present unimportant. To carry out the purposes of the purchase the Kansas City, Mexico & Orient Railway Company was organized and acquired the property and rights of the preceding corporation, and thereafter, by amendment of its charter, its name was changed to the Kansas City, Mexico & Orient Railway Company of Texas. But the details of these transactions do not affect the questions of law which it is necessary for us to decide. They will be recited in so far as may be necessary to the decision of any question hereafter arising. The charter of the last-named company contained this recital: "The charter of this company, filed July 20, 1899, established its general offices at Sweetwater and recited that the company was formed for the purpose of acquiring, owning and maintaining all the property of the Colorado Valley Railway Company, including all of its right of way, constructed main line and partly constructed roadbed and the appurtenances thereto, as the same has been acquired, owned and constructed by the Colorado Valley Railway Company under authority of its charter and the amendment thereto,' and for the purpose of constructing and operating a railway over the route and between the termini designated in the amended charter of the first company." By consent of the city of Sweetwater, the railway company constructed its tracks over certain streets of said city, which consent the city claims was given as a consideration of a contract by which the company bound itself to permanently establish and maintain its general offices, roundhouses, and machine shops, etc., at the said city. Alleging that the company was about to remove its offices, machine shops and the like, from the city of Sweetwater, this suit was instituted to prevent such removal, and to that end sought and secured a temporary writ of injunction. Upon the trial of the cause the court sustained the plaintiff's contention and granted a writ of injunction to enjoin and prevent the said company from removing its said offices and machine shops from the said city of Sweetwater. The case is in this court upon writ of error to the judgment of the Court of Civil Appeals which sustained the judgment of the trial court.

The first proposition upon which the reversal of the judgment in this case is sought reads as follows:

"The city of Sweetwater had no power to make a contract with the Railway Company to locate and maintain its general offices, machine shops, and roundhouses, or either of them at Sweetwater, and the Court of Civil Appeals erred in holding `that the city of Sweetwater as a municipal corporation was capable of entering into the contract' sued on, and in overruling the assignments of error based thereon."

The rights of the parties with reference to the streets of the city is regulated by the following article of our Revised Statutes: "Art. 4426. Such corporation shall have the right to construct its road across, along or upon any stream of water, water course, street, highway, plank road, turnpike or canal which the route of said railway shall intersect or touch; but such corporation shall restore the stream, water course, street, highway, plank road, turnpike or canal thus intersected or touched to its former state, or to such state as not to unnecessarily impair its usefulness, and shall keep such crossing in repair."

By the article just above quoted the state granted the right to a railroad company to construct its road upon the streets of a city, but by the following article that right is qualified: "Art. 4438. Nothing in this chapter shall be so construed as to authorize the construction of any railroad upon or across any street, alley, square or highway of any incorporated city or town without the assent of the corporation of said city or town."

The effect of the two articles, considered together, is to confer upon the railroad company the privilege of building upon the streets of Sweetwater upon condition that the city shall give its consent thereto. It therefore appears from the two articles of the statute that the city had the unqualified right to refuse its consent to the railroad company to build upon the street, and the question arises, What conditions or requirements may be attached to the giving of such consent?

Plaintiff in error relies upon G. & W. Ry. Co. v. City of Galveston, 90 Tex. 398, 39 S. W. 96, 36 L. R. A. 33, to support its proposition to the effect that the city had no power to impose any conditions or exact any consideration for the giving of its consent to the exercise of the privilege granted by the state. The only point decided by this court in the case referred to was that when the city granted the right to occupy the streets in the city of Galveston the occupancy of the street was by virtue of the statute, and the city could not attach conditions subsequent by which the right...

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