City of Galveston v. Guaranty Trust Co. of New York

• Decision Date: 19 March 1901
• Docket Number: 968.
• Citation: 107 F. 325
• Parties: CITY OF GALVESTON v. GUARANTY TRUST CO. OF NEW YORK et al.
• Court: U.S. Court of Appeals — Fifth Circuit

107 F. 325

CITY OF GALVESTON v. GUARANTY TRUST CO. OF NEW YORK et al.

No. 968.

United States Court of Appeals, Fifth Circuit.

March 19, 1901

Jas. B Stubbs, for appellant.

J. T Davies, R. S. Lovett, Brainard Tolles, John D. Rouse, Wm Grant, and W. S. Hunt, for appellees.

Before PARDEE and SHELBY, Circuit Judges, and TOULMIN, District Judge.

TOULMIN District Judge.

This is an appeal by the city of Galveston, as an intervener, in the suit of Guaranty Trust Co. of New York v. Galveston City R Co. (one branch of which has been disposed of by this court No. 969 on the docket of the court) 107 F. 311. In addition to the facts set forth in that case, and which need not be repeated here, it may be stated that the intervener claimed that the said railroad company was indebted to it for one-third of the cost of grading, filling, and paving certain streets and avenues in the city of Galveston upon which the railroad company had its tracks, and that the debt was secured by a lien upon the company's property and franchises and their proceeds, in the custody of the court, prior in time and right of payment to the other liens asserted in the suit. This claim was based mainly upon the requirement in the railroad company's act of incorporation and its amendment of October 8, 1866, and February 9, 1891, which provide that 'said company shall construct, equip and run said railroad upon the streets within the limits of said city, under such conditions and ordinances as the mayor and aldermen of said city may provide and impose,' and upon the authority which the city had, under the laws of Texas and under its charter, to collect from the railroad company a part of the expense of improving the streets which it used and occupied with its lines. The city's charter gives the council of the city the exclusive control and power over its streets and highways. In 1887 it was amended by authorizing the council to regulate, control, and direct the construction of street-railway tracks, and, among other things, 'to compel street-railway companies to pay the actual cost of filling and grading, or filling, grading and paving the streets between their rails in all cases where the same may be filled and graded, or filled, graded and paved by the city. ' On March 31, 1891, and after the railroad company had effected the last amendment to its charter, and after it had constructed and was operating its railroad, the charter of the city was changed so as to enlarge the liability of street-railway companies, and to require them to pay one-third of the cost of paving or otherwise improving any street or avenue upon which they owned or operated a railway, and a lien against the roadbed, ties, rails, fixtures, rights, and franchises of such companies was authorized to be fixed and imposed to secure such improvements. The intervention was referred to the master, who reported fully and at length the material fact, and found that the city's claim was barred by the statute of limitations of two years, and for that reason the city was not entitled to recover. The counsel for the intervener contended that the defense of limitation should not prevail, because its claim was in the nature of a tax imposed by the city upon the railroad company, and the Revised Statutes of Texas provide that no delinquent taxpayer shall have the right to plead in any court any statute of limitation by way of defense against the payment of any taxes due by him to the city, etc. Article 5212b, Rev. St. Tex. The master held that the phrase 'any taxes,' employed in the statute, did...