Houston & T. C. R. Co. v. City of Ennis

• Decision Date: 02 February 1918
• Docket Number: (No. 7733.)
• Citation: 201 S.W. 256
• Court: Texas Court of Appeals
• Parties: HOUSTON & T. C. R. CO. et al. v. CITY OF ENNIS et al.

201 S.W. 256

HOUSTON & T. C. R. CO. et al. v. CITY OF ENNIS et al.

(No. 7733.)

Court of Civil Appeals of Texas. Dallas.

February 2, 1918.

Rehearing Denied March 2, 1918.

Appeal from District Court, Ellis County; F. L. Hawkins, Judge.

Suit by the City of Ennis and others against the Houston & Texas Central Railroad Company and others. From a decree for plaintiffs, defendants appeal. Affirmed.

J. L. Gammon, of Waxahachie, and J. T. Garrison and Baker, Botts, Parker & Garwood, all of Houston, for appellants. Farrar & McRae, of Waxahachie, and Thompson, Knight, Baker & Harris, of Dallas, for appellees.

RAINEY, C. J.

This was a suit by the city of Ennis and certain individuals, who, as a committee of citizens of Ennis, brought against the Houston & Texas Central Rail road Company and certain of its officers to prevent the moving of its division superintendent's offices, train dispatchers, machine shops, and roundhouse from Ennis to Mexia, and to enforce the observance of a certain contract made by Charles Dillingham on December 6, 1890, then receiver of the Houston & Texas Central Railroad Company. The plaintiffs' petition alleged proper allegations to declare said contract valid and to enforce its validity. A temporary injunction was granted, from which there was no appeal.

The defendants answered by the general issue and specially that circumstances had arisen which rendered it advisable and proper for it to remove its "division headquarters" from Ennis to Mexia, another point on its main line, etc. A trial was had on its merits. All the defendants except the railroad company and Costello were dismissed from the case, and the case was submitted to a jury, on which answers were returned and judgment was rendered in favor of plaintiffs decreeing said contract to be valid and enforceable and to be performed and a writ of injunction be perpetuated, from which judgment the railroad company and Costello perfected an appeal.

Conclusions of Fact.

We adopt and take from the brief of counsel of appellees as part of our conclusions of fact and as throwing light thereon the following:

"In 1888 the old Houston & Texas Central Railway Company was in the hands of Charles Dillingham, as receiver. He had been appointed in a suit in equity in the federal court at Galveston. In that suit a decree of foreclosure had been entered, and Dillingham, as master commissioner, had sold the railway property to one F. P. Olcott, president of Central Trust Company, of New York. The sale had been reported and confirmed, and the execution of deed and the delivery of deed and property to the purchaser had been ordered, but for reasons of his own Mr. Olcott had not taken physical possession of the railway properties, although the receiver and the federal court were anxious that he should take over the property in order that the receivership might be terminated.

"For purposes of operation the railway theretofore had been split into three general divisions. The middle division covered that portion of the system between the cities of Hearne and Corsicana. The northern division covered that portion of the system north of Corsicana. It had been determined that the divisional arrangement was unsatisfactory, and as the selection of Corsicana for division terminus had been tentative, and the physical properties owned by the railroad company at that point of but nominal value, the managers determined to create a new division point at Garrett, just above the city of Ennis, and extend the middle division so that its territory would cover between Hearne and Garrett. Inasmuch as the northern division was under the administration of the division superintendent in charge of the middle division, the proposed plan of moving the northern terminus of the middle division to a point further north than Corsicana would have, in addition to its other advantages, the effect of bringing the divisional administration closer to the problems on the northern division.

"The citizens of Ennis, learning of the plans of the railroad company, and realizing that to locate a division point a few miles away from Ennis would be harmful to them, got into touch with officials of the railroad, and, after protracted negotiations, reached an agreement with the railroad people, in substance, to the effect that the division headquarters, with its division superintendents, division dispatchers, shops, round-houses, etc., would be located and maintained in and near the city of Ennis if the city would furnish tract of land pointed out by the railroad people, perpetual water rights in the city's water reservoirs, and a bonus of $25,000 in money.

"The negotiations, though begun in 1889, consumed quite a period of time, and did not eventuate in a contract until December 6, 1890, at which time the city and citizens of Ennis conveyed to Mr. Dillingham, acting for the railroad company, the lands agreed on, the perpetual water rights agreed on, and gave him a note, executed by responsible makers, for the agreed bonus of $25,000, and the railroad people, acting through Mr. Dillingham, made contract, in consideration of the foregoing, to locate and maintain in and near Ennis all of the railway establishments above referred to.

"The bonus note was shortly thereafter paid in full, and the railroad shortly thereafter moved to Ennis, and ever since has maintained there the various departments contemplated in the negotiations and contract mentioned.

"During the entire time consumed by the negotiations mentioned, for months prior thereto, and for over two years thereafter, Dillingham remained in nominal custody of the railway property, Mr. Olcott not coming forward and taking possession, as the various orders of the court contemplated that he would do, but for reasons of his own leaving the property in Mr. Dillingham's custody. Under the decisions, and especially under the decision in the case of Dillingham, Receiver, v. Bath, 44 S. W. 595, decided in the Court of Civil Appeals at Dallas, the possession by Dillingham under such circumstances was, in legal effect, in the capacity of agent of the railroad company, rather than technically as receiver, and the railroad company was responsible for his contracts upon the ordinary principles of agency.

"In 1893 Mr. Olcott and the present railroad company, which meantime he had organized and to which he had conveyed the railway property, became ready to take over actual operation of the railway lines and did so. By various acts it adopted and ratified the contract with the people of Ennis, and for more than 20 years it continued to maintain in and near Ennis all of the railway departments agreed upon in the location and maintenance contract.

"In 1912 Mr. Scott became president of the railroad company, and brought into its service some other new officials, and in 1913 a scheme was evolved for again moving the division headquarters, this time to the south, indeed to a point south of its original location, viz. to Mexia, in Limestone county, Tex. To that end land was acquired of more than 250 acres in area, 170 of which was intended to carry an immense water reservoir adequate for all the railroad's requirements, the other 80-odd acres to be used for yards, divisional buildings, roundhouses, and, as we contend, railway shops. The building of the yards was begun, a roundhouse was built, divisional headquarters building was started, and orders were given for the division superintendent and his entire staff, including division dispatchers, to move from Ennis to Mexia. Incidentally further expenditures in keeping up equipment, etc., in the Ennis shops was discontinued in 1913.

"As soon as the people of Ennis learned of the plans of the railroad, efforts were made to induce the railroad company to change its plans and not to leave Ennis prostrate by carrying out the removal scheme. Conferences were had with the division superintendent at Ennis, who was found to be quite obdurate. Indeed, it was learned that he was personally highly gratified over the removal plans, and that he had been actively advocating the removal, largely on account of personal ill will on his part toward certain Ennis officials, growing out of a controversy over the escape of some prisoners which the railroad company had caused to be arrested and confined in the city jail at Ennis.

"Getting no relief in this quarter, a committee of Ennis citizens next visited Mr. Scott, the president of the railroad company, and endeavored to dissuade him from carrying out the removal plans. This visit likewise was without result. Mr. Scott emphatically informed the committee that the railroad company had decided to and intended immediately to move its division superintendent and his assistants, its division dispatchers, and the clerical part of division headquarters, and had acquired land and commenced improvements, etc., to take care of the removed departments. He was pressed to disclose his plans with reference to shops and roundhouses, but could be prevailed on to make no declaration other than at present he had no plans for removing or abandoning the Ennis shops and roundhouses.

"The result of the conference of the committee with Mr. Scott was naturally disquieting to the committee and to the people of Ennis. They had other warnings, more or less direct, to the effect that the railroad company planned eventually the complete abandonment of Ennis, so far as the departments covered by the old contract were concerned. They were informed about the progress of work on the improvements at Mexia. They learned of the construction of the new roundhouse at Mexia, and that it was built according to a plan which made it capable of enlargement in capacity to a point twice that of the roundhouse at Ennis. In the light of all these evidences of a fixed purpose on the part of the railroad company to ignore the contract this suit was brought."

When the contract for locating the division headquarters of...