Arlington Heights Realty Co. v. Citizens' Ry. & Light Co.

• Decision Date: 25 October 1913
• Parties: ARLINGTON HEIGHTS REALTY CO. v. CITIZENS' RY. & LIGHT CO. et al.
• Court: Texas Court of Appeals

160 S.W. 1109

ARLINGTON HEIGHTS REALTY CO. v. CITIZENS' RY. & LIGHT CO. et al.

Court of Civil Appeals of Texas. Amarillo.

October 25, 1913.

Rehearing Denied November 29, 1913.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Tarrant County; R. H. Buck, Judge.

Action by the Arlington Heights Realty Company against the Citizens' Railway & Light Company, in which another intervened. From a judgment for defendant and intervener, plaintiff appeals. Reversed and remanded.

Crenshaw & Boykin, O. W. Gillespie, and C. R. Bowlin, all of Ft. Worth, for appellant. Flournoy, Smith & Storer, Capps, Cantey, Hanger & Short, and D. B. Trammell, all of Ft. Worth, for appellees.

HALL, J.

The following statement of the nature and result of this suit is taken from the briefs of the parties, with such changes as are found to be necessary:

In 1907 the appellant filed this suit against the Citizens' Railway & Light Company, and on October 28, 1907, the cause was ordered placed upon the jury docket of the district court of Tarrant county. It remained upon such docket without further action until May 2, 1911, when appellant filed its first amended original petition, setting up substantially the breaches of two certain contracts, as set out in its original petition, stating that it had been caused to forego bringing its cause on for trial on account of the fact that the Citizens' Railway & Light Company, through its officers and agents, had continually promised to appellant that it would in a short time be in position to and would improve its service and equipment so as to conform strictly to the terms of the contract; that appellant's officers, relying on these representations and promises, had been lulled into inactivity, but that it had become apparent that said Citizens' Railway & Light Company was making no proper effort to carry out the contract, and appellant alleged upon information and belief that the Citizens' Railway & Light Company (which operated a power plant as well as a street railway system), was diverting the proceeds of its business chiefly toward the up-keep of the power plant to the detriment of the street railway line. Appellant again alleged damages to its property in the sum of $50,000, and prayed that a receiver be appointed to take over and operate the company, particularly the railway lines, in accordance with the conditions of the contract of 1905, and its supplement of 1906. A receiver was appointed upon this prayer, and within a few days thereafter the Citizens' Savings & Trust Company intervened as the trustee in a large amount of first mortgage bonds, given by the Citizens' Railway & Light Company, upon all its property, and asked for judgment upon said bonds with foreclosure of its lien upon all the property of the Citizens' Railway & Light Company, alleging its lien to be a first lien on said property, and asking for foreclosure as against all the parties to the suit. It also prayed that all of the property of the corporation be sold. E. C. Orrick was appointed master in chancery, with certain powers, hereinafter set out. The court also ordered that all persons having claims against the Citizens' Railway & Light Company should within 30 days from the date of said order intervene therein and prove up their claims, and directed the master in chancery to publish a notice to that effect. A notice was published, commanding all creditors of the Citizens' Railway & Light Company to intervene in said suit within 30 days from the date of the court's order, or be forever barred. This order was made at the May term of the Forty-Eighth district court, 1911, and during said term the master began hearings upon claims against the Citizens' Railway & Light Company, including the claims of the Citizens' Savings & Trust Company.

On July 5, 1912, appellant filed its third amended original petition, in substance, as follows:

The Arlington Heights Realty Company sues the Citizens' Railway & Light Company, John W. Davis, receiver of said company, and A. J. Duncan, Jr., alleging that on August 9, 1905, plaintiff owned Lakes Como and Garda, situated about four miles west of Ft. Worth, in Arlington Heights, worth $100,000; that on said date plaintiff owned large tracts of land in various subdivisions of Arlington Heights, which had been plotted into town lots, and also owned the land surrounding said lakes, which was likewise plotted into town lots; that knowing the value that would be added to its property to have street railway connection with Ft. Worth, by extension through its property, it entered into the contract of August 9, 1905, with L. C. Cole, W. P. Engle, and A. V. Baughman, as parties of the second part, and the Fidelity Trust Company, party of the third part, a copy of which is attached to said petition; that by said contract Cole and his associates agreed to have the Arlington Heights Traction Company to build a line of street railway from the city limits of Ft. Worth to the intersection of Lake avenue, with Twelfth street, in Arlington Heights, which line was to be fully equipped and in full operation with the full and satisfactory service of cars thereon by October 26, 1905; that Cole et al. further agreed to make an extension around Lake Como, which was to be completed by July 1, 1906; that they were to make a still further extension of said street railway along Eighteenth avenue and Seventh street, to the main line on Arlington boulevard, which was to be completed by January 1, 1907. They were then to build certain lines in Ft. Worth, to be completed within twelve months after the franchise should be secured therefor. The contract further provided that, if the Arlington Heights Traction Company should sell said line of railway, it would in conveying the same to any other person obligate the purchaser to operate and maintain said lines for the full life of the franchise so transferred, which was 50 years; that the consideration for such construction and continuous operation was the agreement on the part of plaintiff to procure all right of way, both in the city and out of it, together with the right to operate the same; and, further, plaintiff agreed to convey to the Fidelity Trust Company, to be held by it in trust, and thereafter conveyed to the Street Railway Company, Lake Como and Lake Garda, it being stipulated in said agreement that the conveyances from the plaintiff to the Fidelity Trust Company and from the Fidelity Trust Company to such Street Railway Company should pass title to the said lands, conditional upon the continuous, faithful performance of the obligations in said contract, to pay to such Street Railway Company $15,000, as follows: $5,000 in cash when the rails and ties had been placed upon the right of way from the city limits to the intersection of Twelfth street and Lake avenue; $5,000 when said section of the line should be completed and in operation; and $5,000 six months after completion of said section, the last payment to be evidenced by note.

It was further alleged: That the plaintiff had performed all its part of the contract; had conveyed said real estate and property as provided in said contract. That, by the terms of the deed by which the Fidelity Trust Company conveyed to the Arlington Heights Traction Company the lakes above described, it is stipulated that said conveyance is made under and by virtue of said contract of August 9, 1905, and is subject to the terms and conditions of that contract. That said deed from the Arlington Heights Realty Company to the Fidelity Trust Company, and the deed from the latter company to the Arlington Heights Traction Company, are of record in Tarrant county. That plaintiff procured and assigned to the Arlington Heights Traction Company the right of way and franchise to operate as agreed on by it. It also paid the $15,000 as provided in the contract. That the Arlington Heights Traction Company, in partial compliance with said contract, did construct, equip, and operate a line of street railway, both within and outside the city limits of Ft. Worth, upon the parts of the route designated in said contract, but the extension around Lake Como and the extension on Eighteenth avenue and Seventh street, to the main line, have never been constructed. That the Arlington Heights Traction Company never did equip and operate the parts of the line it did operate with the character of cars and equipment, nor according to the schedule, provided in the contract, but equipped and operated the same with inferior and second-class cars, and not more frequently than 30 minutes each way. That afterwards, in 1906, the Arlington Heights Traction Company, still not having made said extensions and still being in default as to the character of its cars and service, sold and conveyed said line of street railway, together with Lake Como and Lake Garda, to the defendant Citizens' Railway & Light Company, and on the 14th day of December, 1906, said Citizens' Company, having up to said time failed to complete said extensions of said lines of railway, as provided for in said contract, and especially having breached and failed to carry out that part of said contract to extend the line of said railway to Lake avenue, as provided for in said contract, to be the termination of said line, but stopped about 800 feet distant from same. Said part of said contract so breached reads as follows: "It is understood, however, that in fixing the time for the completion of the above line of street railway, as aforesaid, that a reasonable allowance shall be made for unavoidable delays, accidents, and strikes, but it is expressly agreed that if said road shall not be completed and equipped and in operation in accordance with this agreement by the first day of March, 1906, that the entire property rights, privileges and franchises of said railway company, including its roadbed, cars, equipment and appurtenances, shall at once and without further conveyance or action of ...