Bonner v. Hearne

• Citation: 12 S.W. 38
• Parties: BONNER <I>et al.</I> <I>v.</I> HEARNE.
• Decision Date: 28 June 1889
• Court: Supreme Court of Texas

12 S.W. 38

BONNER et al.v.

HEARNE.

Supreme Court of Texas.

June 28, 1889.

Appeal from district court. Anderson county.

This was a suit by John R. Hearne against T. R. Bonner and J. M. Eddy to recover possession of the road and property of the International & Great Northern Railroad Company, such possession being held by the latter as receivers of said road and property, appointed by successive decrees of the district court of Smith county, Tex., on February 16, March 11, and March 30, 1889. John R. Hearne claimed the property as receiver appointed by decrees of the district court of Anderson county, made April 15 and 29, 1889. Case was tried before the court without a jury, and judgment rendered in favor of Hearne and against Bonner and Eddy for possession of said railroad and property. Motion for new trial overruled. Defendants appeal.

A. H. Willie, W. S. Herndon, J. M. Duncan, and H. Chilton, for appellants. Burnet & Hays and Gregg & Reeves, for appellee.

GAINES, J.

This action was brought in the district court of Anderson county by appellee, as receiver of the International & Great Northern Railroad Company, appointed by a decree of that court, to recover possession of the property of that corporation in the hands of appellants, as receivers appointed by a decree of the district court of Smith county. The case was submitted below to the judge without a jury, who filed the following as his conclusions of law and fact: Conclusions of Fact: "The facts are of record, and, so far as they affected the rulings made and judgment rendered upon the trial of this cause, are undisputed. I shall state only the facts upon which the judgment is based. (1) It appears from the record that plaintiff claims title to the possession of the International & Great Northern Railroad and its properties by virtue of orders of the district court of Anderson county appointing and qualifying him as receiver of such property. (2) That defendants assert right to the possession of the same property under prior orders of the district court of Smith county, constituting them receivers thereof. (3) It appears affirmatively from the record of the proceedings in the district court of Smith county, resulting in the appointment of defendants, that the property sought to be placed in their hands was and is that of a railroad corporation organized and acting under the laws of Texas, and whose property was and is situated in this state; and that at the time such proceedings were instituted, and when the various appointments of defendants were made, such corporation had its principal office established, not in Smith county, but in Anderson county." Conclusions of Law: "From these facts I conclude — First, that the district court of Smith county had not jurisdiction to make the appointment of receivers as attempted, and that its orders, under which defendants claim, are void; and, second, that the district court of Anderson county did have jurisdiction to make the appointment of receiver, and that, by virtue of its orders appointing him, plaintiff was invested with the right to the possession, control, and management of the property sued for, and is therefore entitled to recover it from the possession of defendants."

If the conclusion of the court below that the district court of Smith county did not have jurisdiction to appoint a receiver of the property of the corporation be correct, then the judgment below should be affirmed; for if the appointment be void, the appellants are in possession of the property without authority of law, and appellee is entitled to recover it. If, on the other hand, the court of Smith county had authority to make the appointment, then the appointment of appellants must be held valid, and their possession of the property legal, and the property must be considered in the custody of the court which appointed them, and not subject to be interfered with by the action of any court of coordinate jurisdiction. The determination of the question depends upon the construction of section 13 of the act of the twentieth legislature concerning receivers, approved April 2, 1887. The section reads as follows: "If the property sought to be placed in the hands of a receiver is a corporation whose property lies within this state, or partly within this state, then the action to have a receiver appointed shall be brought in this state in the county where the principal office of said corporation is located."

The question is, was it the intention of the legislature in the enactment quoted to take from all courts in the state the power to appoint a receiver of the property of a corporation except those in which the principal office of the company is situated, or merely to confer upon the corporation the privilege of having receivers of their effects appointed in the county of their general office? It is contended on behalf of appellee that the intention was to deny power absolutely to all but the one court, and it is insisted that there are considerations of public policy underlying the statute which make this intention apparent. It is argued that in passing the act under consideration the legislature had prominently in view the appointment of receivers of railroad companies, and that the injustice and inconvenience which had resulted from the appointment of receivers of such corporations at places remote from their general offices were recognized by the legislature, and were sought to be remedied by the statute. It is claimed that by the appointment of receivers in the county of the general office of a corporation fraud may be prevented, and that the affairs of the corporation will be managed more to the interest of the public at large. The fallacy of the argument consists in the assumption of the premises upon which it is based. Does it tend to prevent fraud between the managers and lien creditors of a railroad company, in the appointment of a receiver, to require absolutely that no court shall appoint him except a court of the county in which the principal office of the company is situated? If so, how does it prevent it? If the managing officers of such a corporation and its bondholders conspire together to place its property in the hands of a receiver, why cannot this be as speedily and effectually accomplished in any one court as in another? We see nothing in the requirement as to venue to prevent such a result. Then, again, let us ask in what way does a provision that a receiver shall be appointed by a court of the county in which the company's principal office is located tend to subserve the public interest? If the requirement was that the receiver should be a resident of that county, or should abide or make his office in the county during the term of his appointment, we could see some reason for it. But such is not the requirement of the statute. It merely provides that, if the property lies within this state, the receiver shall be a bona fide citizen and qualified voter in the state. Laws 20th Leg. p. 120, § 2. Hence it follows that it is not true, as the appellee's argument seems to imply, that the law was intended to secure the appointment of a receiver resident in the county of the principal office of the corporation. There is nothing in the law to have prevented the district court of Smith county, if it had jurisdiction, from appointing appellee, nor to preclude the district court of Anderson county from appointing appellants. Looking at the statute from another stand-point, we do not see a reason why the legislature may have deemed it proper to confer upon railroad companies the privilege of being proceeded against for the appointment of receivers of their property in the counties of their principal offices only. We do not concur in the proposition that, in fixing the venue of ordinary suits, a purpose is manifested to disregard their rights or to embarrass them in the defense of actions brought against them. In determining the venue of such suits it was the duty of the legislature to consider the rights and interests of the citizens as well as those of the companies, and to so frame the law as to afford the former a fair opportunity to prosecute and maintain their actions, and in such a manner as not unreasonably to embarrass the companies in making their defenses. It is a necessary incident to the operation of a railroad that claims for injuries to persons and property, for loss and damage to goods in transit, as well as for many other wrongs, arise all along its line of road. These claims are frequently small in amount. It results from this state of affairs that if each claimant was required to bring his suit in the court of the county where the...