Berg v. San Antonio St. Ry. Co.

• Decision Date: 03 November 1897
• Citation: 42 S.W. 647
• Parties: BERG v. SAN ANTONIO ST. RY. CO.
• Court: Texas Court of Appeals

42 S.W. 647

BERG v. SAN ANTONIO ST. RY. CO.

Court of Civil Appeals of Texas.

November 3, 1897.

Appeal from district court, Bexar county; J. L. Camp, Judge.

Action by L. S. Berg against the San Antonio Street-Railway Company. From a judgment in favor of defendant, plaintiff appeals. Reversed and remanded.

Wm. Aubrey and Upson, Bergstrom & Newton, for appellant. Houston Bros., for appellee.

NEILL, J.

This suit was brought by appellant against appellee to recover $9,000 and interest thereon at the rate of 6 per cent. per annum from the 22d day of September, 1892, alleged commissions for effecting the contract of sale of appellee's bonds to N. W. Harris & Co. under the contract shown in our statement of the facts. The appellee, in its answer, admitted the employment of appellant, and the making of the contract, through his agency, with Harris & Co., but averred that Harris & Co. never intended to perform the contract for the purchase of the bonds, and that they made said contract to appellee with the expectation that they would be able to negotiate the bonds at a profit, and with this object in view they delayed taking the bonds, though the appellee at all times insisted that they should do so; that finally, on July 25, 1895, they declined taking the bonds at all. Appellee also alleged that it was always willing and anxious to deliver the bonds under the contract with Harris & Co., and had complied with every objection and requirement on their part as to all formalities necessary for issuance and delivery of the bonds, and would have long since issued and delivered same if Harris & Co. had complied with their part of the contract, and had not repeatedly informed appellee that they were not prepared to receive and pay for the same; that appellee had not been able to compel Harris & Co. to perform their contract to take the bonds; that they were nonresidents, and had no property in this state within the knowledge of appellee, and that it was powerless to enforce the contract with Harris & Co. The appellant, by supplemental petition in reply to the answer, alleged that appellee was not able and never did offer to deliver to Harris & Co., at any time it was bound to do, its legal bonds, but sought to deliver them its illegal bonds, issued in excess of its charter provisions, and which were null and void, and which, on account of said illegality and invalidity, Harris & Co. refused to receive as a compliance by appellee with its said agreement to deliver said bonds. The case was tried before a jury, and a verdict rendered and judgment entered for the appellee, from which judgment this appeal is prosecuted.

The uncontroverted facts are:

(1) The San Antonio Street-Railway Company, by its president, W. H. Weiss, executed to L. S. Berg the following contract in writing: "San Antonio, Texas, 8, 19, '92. Mr. L. S. Berg, City—Dear Sir: You are hereby authorized and empowered to contract for the sale, for our account, of four hundred and fifty thousand dollars ($450,000) 1st mortgage bonds of the San Antonio Street-Railway Company at a price of not less than ninety (90) cents net to this company, and accrued interest. Said bonds to be delivered in New York or Chicago. Any sum realized over the said ninety (90) cents net and accrued interest will be paid to you as commission for effecting said sale. Said commission to be paid you in cash as received from the parties to whom you may sell said bonds. Yours, very truly, San Antonio Street-Railway Co., by W. H. Weiss, Pres."

(2) In pursuance of said contract, appellant, as agent for the appellee, negotiated with N. W. Harris & Co. the following contract in writing: "Memorandum of Agreement. This memorandum of agreement, made and entered into this seventeenth day of September, 1892, by and between the San Antonio Street-Railway Company, a corporation, of San Antonio, Texas, by Louis S. Berg, its duly-authorized agent, first party, and N. W. Harris & Co., of Chicago, Illinois, second party, witnesseth: That whereas, the said first party is desirous of negotiating its bonds for the purpose of retiring its present outstanding bonded debt, and liquidating its present floating indebtedness, and providing for the future extension of its street-railway lines, and proposes to issue its first mortgage bonds on its street-railway plant in and near the city of San Antonio, Texas, in the amount of one million dollars ($1,000,000); and whereas, the said second party desires to contract for the purchase of said bonds; Now, therefore, said first party, in consideration of the agreements hereinafter contained on the part of the said second party, agrees that it will issue its first mortgage bonds in the aggregate amount of one million dollars (1,000,000), to be dated November 1, 1892, in denominations of one thousand dollars (1,000) each, bearing interest, payable semiannually, at the rate of six per cent. (6) per annum, both principal and interest payable in gold coin of the present standard of weight and fineness, in New York or Chicago, at the option of the holders of the bonds, said bonds to mature in from five to thirty years, in installments to be hereafter agreed upon; and that it will secure the payment of said bonds by the execution, acknowledgment, and delivery of a deed of trust to such trustee as may be selected by said second party, to be executed by said first party, upon the real estate, franchises, rights, incomes, profits, machinery, buildings, fixtures, and all property, real or personal, of whatsoever description, now owned, or which may hereafter be acquired, by the said first party, which said trust deed shall be a first lien on all of said property. The trust deed shall provide for the immediate issue of four hundred and fifty thousand dollars ($450,000) of bonds, the proceeds of which it is agreed shall be applied: First, to the retirement of the first mortgage bonds of said first party which are outstanding at the date of this contract, but which it is agreed shall be canceled and released contemporaneously with the delivery of the trust deed securing the issue of bonds herein contracted for; and, second, the retirement of the outstanding floating debt of said first party. Said trust deed shall provide no bonds in excess of four hundred and fifty thousand dollars ($450,000) shall be certified or issued except for the purpose of reimbursing said first party for eighty-five per cent. (85) of the actual cash cost to said first party of extensions of its present lines of railway track made or acquired by it, including paving and overhead construction connected with such extensions so made or acquired, and not then until such time as the net earnings of said first party derived from said street railway, over and above operating expenses, maintenance, and pro rata taxes and insurance, for twelve months next preceding any application to said trustee for the issue of any portion of said last-mentioned bonds shall be equal to the interest at the rate of twelve per cent. per annum upon the entire amount of all the bonds previously certified to by said trustee, and then outstanding, together with the bonds proposed to be issued, and then only upon the order of the president and secretary of said first party, which order shall be accompanied by their certificate, showing the actual cost to the railway company of such extensions of its present lines of railway track made or acquired, actually made and paid for, including paving and overhead construction connected with such extensions; such cost to be shown in detail, accompanied by the proper vouchers therefor. And said first party shall also show to said trustee legal authority for making such extensions. Said certificate shall also state the amount of the receipts and expenses in detail of the said street railway for the twelve months next preceding the date of such extensions, and there shall not be included in the statement of receipts, as an item of income or otherwise, any moneys received as and for a subsidy, or in the nature of a subsidy, paid or promised to said first party as an inducement to provide such extensions, or for any other purpose whatever. It is understood and agreed that the said first party shall be under no obligations to issue any part of the said five hundred and fifty thousand dollars ($550,000) of bonds held in escrow under the terms of the trust deed for the purpose of providing for future extensions. In consideration of the above agreements, and those hereinafter contained, the said first party hereby agrees to sell, and the said second party agrees to purchase, the said four hundred and fifty thousand dollars ($450,000) of bonds herein provided to be immediately issued, under the provisions of the trust deed, at the price of ninety-two (92) cents on the dollar and accrued interest; and it is agreed that said bonds shall be delivered to said second party in New York or Chicago, at the option of said second party, in installments as follows: Two hundred and eighteen thousand dollars ($218,000) of said bonds as soon as the papers evidencing the legality of the said issue have been approved by the attorneys of said second party, the proceeds of which, it is agreed, shall be at once applied to the redemption of the present outstanding mortgage bonds of said first party. One hundred thousand dollars ($100,000) of said bonds shall be delivered and paid for on December 1, 1892. The remaining one hundred and thirty-two thousand dollars ($132,000) of said bonds shall be delivered on March 1, 1893, or in blocks of twenty-five thousand dollars ($25,000) or upwards, at any time prior thereto, at the option...