Houston Belt & Terminal Ry. Co. v. Texas & N. O. R. Co.

• Decision Date: 11 April 1956
• Docket Number: No. A-5384,A-5384
• Citation: 289 S.W.2d 217,155 Tex. 407
• Parties: HOUSTON BELT & TERMINAL RAILWAY COMPANY et al., Petitioners, v. TEXAS and NEW ORLEANS RAILROAD COMPANY, Respondent.
• Court: Texas Supreme Court

Page 217

289 S.W.2d 217

155 Tex. 407

HOUSTON BELT & TERMINAL RAILWAY COMPANY et al., Petitioners, v. TEXAS and NEW ORLEANS RAILROAD COMPANY, Respondent.

No. A-5384.

Supreme Court of Texas.

April 11, 1956.

Fulbright, Crooker, Freeman, Bates & Jaworski, M. S. McCorquodale and Quentin Bates, Houston, for petitioners.

Baker, Botts, Andrews & Shepherd, John A. MacDonald, Jr., and Tom M. Davis, Houston, for respondent.

WALKER, Justice.

The Court of Civil Appeals has affirmed a judgment on the merits in favor of respondent which the trial court entered at the conclusion of the hearing on respondent's application for a temporary injunction. 279 S.W.2d 386. We have concluded that the trial court thereby rendered an improper judgment within the meaning of the harmless error rule, and that the judgment of the Court of Civil Appeals must be reversed.

Many years ago Texas and New Orleans Railroad Company, respondent, and International-Great Northern Railroad Company made a contract for the joint operation of certain railroad trackage, part of which is owned by respondent and part by I-GN. The latter company thereafter assigned its rights under the contract to Houston Belt & Terminal Railway Company, which owns and operates the Union Station in Houston and conducts switching operations in that vicinity for a number of other railroads.

A controversy arose as to the rights of the parties under the contract, respondent contending that only I-GN and Belt when acting as agent for I-GN could use the tracks owned by respondent and covered by the agreement, and Belt asserting that it was also entitled to use such tracks when acting for itself and as agent for railroads other than I-GN. On June 25, 1954, respondent filed this suit against petitioners, Belt and the other interested railroads, including I-GN, seeking: (1) a temporary injunction restraining petitioners, except I-GN and Belt when acting as agent for I-GN, from using the trackage in question, (2) permanent injunctive relief upon final hearing, (3) a declaratory judgment construing the contract in accordance with respondent's contentions, and (4) damages of at least $5,000 per year for any time petitioners had wrongfully used the track.

Upon the filing of the petition an order was entered setting July 8th as the date for the hearing on the temporary injunction. The order to show cause was not served on petitioners, but they were served with the regular form of citation on June 28th. By agreement of counsel the hearing on the temporary injunction was postponed until August 17th. An extension of time was also granted for filing answer, and on July 30th petitioners filed a plea in abatement and their verified original answer on the merits. The answer raised issues of construction of the contract by conduct of the parties, estoppel, nonviolation of the contract, and the propriety of a declaratory judgment.

The case was not set for trial on the merits by agreement or otherwise. The parties appeared by counsel on August 17th and announced ready. Counsel for all parties understood that the hearing was on the application for a temporary injunction, but nothing was said by court or counsel regarding the scope of the hearing until after the judgment was announced. Respondent introduced the contract and other documentary evidence, and also examined a number of witnesses, including the President of Belt. Petitioners cross-examined the witnesses but did not offer any other evidence.

After all parties had rested, the court announced that respondent would be granted a declaratory judgment construing the contract in accordance with its contentions. Counsel for petitioners protested, pointing out that the hearing was limited to the application for a temporary injunction. The court then asked counsel for petitioners if they had any evidence on the merits of the case which they would like to put into the record, and counsel stated that they did not.

Judgment was entered on August 18th construing the contract in accordance with respondent's contentions, denying the application for an injunction without prejudice to respondent's right to future relief in the event of a violation of the provisions of the judgment, and adjudging the costs against petitioners. The judgment makes no express disposition of respondent's claim for damages, but petitioners do not attack the same on that ground.

At the hearing on petitioner's motion for new trial, it was established that all parties had understood that the August 17th hearing was on respondent's application for a temporary injunction, and that the case had not been set for trial on the merits. Petitioners also introduced the district clerk's record of the cases set for trial, which disclosed that a 'show cause' hearing was set for August 17th and that the same had been reset by request of the parties from July 8th. They did not attempt to show that a new trial if granted might or would result in a different judgment.

This appeal is predicated upon the action of the trial court in entering judgment on the merits at the conclusion of the hearing on the temporary injunction. The only question before the court at a hearing on an application for a temporary injunction is the right of the applicant to the preservation of the status quo of the subject matter of the suit pending a trial on the merits, and the court is not authorized to enter judgment on the merits at such a hearing. James v. E. Weinstein & Sons, Tex.Com.App., 12 S.W.2d 959; Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549. The reasons for this rule are apparent. The defendant...