Anderson, Clayton & Co. v. State, 1678-6424.

• Decision Date: 24 June 1933
• Docket Number: No. 1678-6424.,1678-6424.
• Citation: 62 S.W.2d 107
• Parties: ANDERSON, CLAYTON & CO. et al. v. STATE ex rel. ALLRED, Atty. Gen., et al.
• Court: Texas Supreme Court

Page 107

62 S.W.2d 107

ANDERSON, CLAYTON & CO. et al. v. STATE ex rel. ALLRED, Atty. Gen., et al.

No. 1678-6424.

Commission of Appeals of Texas, Section A.

June 24, 1933.

Certified Questions from Court of Civil Appeals of Seventh Supreme Judicial District.

Suit by the State, on the relation of James V. Allred, Attorney General, and James V. Allred, Attorney General, against Anderson, Clayton & Co. and others, in which defendants filed cross-bill. From the judgment, defendants appealed to the Court of Civil Appeals, which certifies questions.

Questions answered.

Fulbright, Crooker & Freeman, W. B. Bates, and Leon Jaworski, all of Houston, and Johns, McCamblell & Snyder, of Corpus Christi, for appellants.

James V. Allred, Atty. Gen., and T. S. Christopher and Neal Powers, Asst. Attys. Gen., E. H. Crenshaw, Jr., of Kingsville, John C. North, of Corpus Christi, and J. H. Tallichet, of Houston, for appellees.

SHARP, Judge.

This case is before the Supreme Court upon certified questions from the honorable Court of Civil Appeals of the Seventh District.

The pertinent facts are that on August 12, 1932, the state of Texas, on the relation of James V. Allred, Attorney General, and James V. Allred, as Attorney General, plaintiffs, made application to the district court of Nueces county to secure a temporary injunction against M. D. Anderson, W. L. Clayton, Benjamin Clayton, and Lamar Fleming, Jr., doing business under the name of Anderson, Clayton & Co., and others, to restrain them and their employees from violating the provisions of chapter 277, Acts of the 42d Legislature, known as House Bill 335 (see Vernon's Ann. Civ. St. art. 911b), by operating and causing to be operated and from aiding and abetting the operation of trucks over the highways of Texas for transporting property for compensation or hire without obtaining permits from the State Railroad Commission.

Plaintiffs prayed for recovery of penalties described in said act aggregating $3,000 as to each defendant, and further prayed for a perpetuation of the injunction upon final hearing. On August 27, 1932, the application on the part of the state for temporary injunction was heard by the court, at which time it was announced to the court by plaintiffs' attorneys that they were willing for the application for temporary injunction to be denied, and on this announcement the court entered its order denying the relief sought by plaintiffs. Notwithstanding the denial of the temporary injunction, arrests, prosecutions, and threats of arrests of Anderson, Clayton & Co.'s drivers continued, and on September 10, 1932, pursuant to a cross-bill filed by them, the court entered a restraining order enjoining the three members of the Railroad Commission, Mark Marshall, the director of the transportation division, and L. G. Phares, chief of the highway control, from further arresting, prosecuting, and threatening to arrest the drivers of the motor vehicles. It further appears that on September 19, 1932, plaintiffs' suit came on for hearing on the matter of permanent injunction, and on this date the defendants in said suit filed their third amended original answer and cross-bill, and on the same date plaintiffs took a nonsuit, and in the cross-petition filed by the defendants it was alleged that they, as actors, were complaining of the original plaintiffs as set out in the original petition as being the state of Texas, by and on the relation of James V. Allred, Attorney General of the state of Texas, and James V. Allred, as Attorney General of the state of Texas, and particularly of C. V. Terrell, Lon Smith, E. O. Thompson, comprising the Railroad Commission, Mark Marshall, director of motor transportation, and L. G. Phares, chief of the highway control, as agents and representatives of the state. In the cross-bill it is alleged that said officers were acting in excess of their authority and unlawfully, and cross-petitioners sought an order enjoining such officers from interfering with the operation of trucks over the highways for the transportation of their property by such cross-petitioners. They denied the violation of any law, and alleged that they were operating the trucks by virtue of lease contracts with the others thereof, and set out in detail the manner and method employed by them in the use of such trucks for the transportation of their property.

After the filing of the third amended answer and cross-bill by the defendants, and after the state had taken a nonsuit, the attention of the court was called to the cross-bill and that they would insist upon prosecuting the same. The court on the same date entered an order continuing in effect the temporary restraining order theretofore issued pursuant to defendants' cross-bill pending hearing thereon on the 25th day of October 1932. The cross-bill came on for hearing on application for temporary injunction on October 25, 1932, at which time all of the cross-defendants named in the cross-bill filed a plea to the jurisdiction of the court because the cross-petition disclosed that the cross-petitioners were seeking an injunction against the enforcement of a penal statute of the state and showed no vested or property rights in cross-petitioners which could be protected by a court of equity.

Subject to the plea of jurisdiction, Mark Marshall and all others named in the cross-action answered by general demurrer, special exceptions, general denial, admitted their official positions, alleged their duties, their good faith in the performance thereof, the violation of the statute by cross-petitioners and attacked as a subterfuge the lease contracts and their insufficiency as a justification for the operation of trucks or as a defense to the provisions of the penal statutes.

We quote from the certificate as follows:

"The agreed statement of facts is to the effect that M. D. Anderson, W. L. Clayton, Benjamin Clayton and Lamar Flemming, Jr., are doing business under the style of Anderson, Clayton & Company and are engaged in buying and selling cotton which they export from ports in the State of Texas to various foreign countries. That in connection with their business it is necessary for them to buy large quantities of cotton at interior points in the State and transport it to port cities. That in the transportation thereof some of it is transported over the Texas highways in vehicles owned by Anderson, Clayton & Company. That said vehicles are inadequate for their transportation needs and in order to cope with such inadequacy they entered into separate written lease contracts with different individuals who own approximately fifty motor vehicles equipped and designed to transport cotton. That the terms of such leases were uniform, except as to the length of the term which in most instances was for a period of one week to one month. That in each instance the following form of lease agreement was entered into between the owners of said trucks and Anderson, Clayton & Company:

"`The State of Texas, County of Harris

"`This memorandum of an agreement is made and entered into by and between ____ hereinafter called lessor, and Anderson, Clayton & Co., of Houston, Texas, ____ hereinafter called lessees.

"`Lessor has and does by these presents lease and let to lessees ____ motor trucks fully described by engine number, State License number, manufacturer, and capacity, on the back hereof, for a period of ____ week(s) beginning with the ____ day of ____ 1932, and ending on the ____ day of ____ 1932, both inclusive, subject to the following terms and conditions:

"`The aforesaid trucks are being leased primarily for transportation of cotton from the interior to Houston or other port cities; and bagging, ties or other commodities from Houston and other port cities to the interior. Lessees agree to pay lessor as rental for each of said trucks the sum of $____ dollars per week, plus an additional sum equal to ____¢ per ton mile, for all commodities transported from Houston and other port cities to the interior, respectively on each of said trucks during such lease period.

"`Lessor represents that said motor trucks are in first class condition and in every respect suitable for the transportation of cotton; that each and all of said trucks have been duly licensed and are so constructed and equipped as to comply with all the rules and regulations governing their operation over the highways of this State carrying net loads of the respective amounts as represented on the back hereof. Any repairs necessary to keep the said trucks in good running condition throughout the life of this lease shall be at the expense of lessor; and in the event that the operation of any truck should be suspended for purposes of necessary repairs during the life of the lease, such loss of time shall be considered to be for the account of lessor and the life of the lease shall be extended, without additional rental payment, for a corresponding period in order to compensate lessees for such loss of time.

"`Lessees, during the term of this lease, are to have absolute control and use of said motor trucks in the same manner as though they were the absolute owners thereof. Lessees will employ and have absolute control and supervision of the operators of said trucks, however, lessees agree not to permit any persons to whom lessor objects in writing as not being careful and competent drivers to operate any of said trucks, if on investigation the lessees find such objections well founded. On the other hand lessor agrees to waive any claim and relinquish and release lessees from any liability for any injury or damage occasioned to said trucks during the term of this lease, whether caused by negligence of the driver or otherwise.

"`Lessor agrees, at his expense, to carry fire, theft and accident insurance to protect himself against loss and injury to said trucks.

"`Lessor also agrees, at his expense, to carry public liability insurance with proper rider or omnibus...