Houston, E. & W. T. Ry. Co. v. Keller

• Decision Date: 14 May 1896
• Citation: 36 S.W. 859
• Parties: HOUSTON, E. & W. T. RY. CO. v. KELLER.
• Court: Texas Court of Appeals

Page 859

36 S.W. 859

HOUSTON, E. & W. T. RY. CO. v. KELLER.

Court of Civil Appeals of Texas.

May 14, 1896.

Appeal from district court, Harris county; Samuel H. Brashear, Judge.

Action by Theodore Keller against the Houston, East & West Texas Railway Company. Judgment for plaintiff, and defendant appeals. Modified.

After the decision rendered in this case on former appeal, reported in 8 Tex. Civ. App. 537, 28 S. W. 724, plaintiff amended his pleadings, and alleged the facts out of which we held the liability of the defendant for the judgments sued on arose. Exceptions to the petition were overruled, and this ruling is assigned as error; but, as the facts shown by the evidence upon which plaintiff relies for a recovery were alleged in the pleadings, it will be more convenient to determine whether or not those facts are sufficient to establish the liability than to consider the pleadings and evidence separately. Those facts show that in 1885 the railroad and all of the property, rights, and franchises, of every character, of the Houston, East & West Texas Railway Company, were put in the hands of a receiver by the district court of Harris county, and that, by the decree of that court, such property was ordered sold to pay judgments which had been established against the company, including those sued on by the plaintiff, secured by liens having precedence over the mortgage securing the bonds of the company, and also to pay such bonds. This decree required that the railway and all of the property and franchises of the company should be sold for not less than $1,200,000, and that, of this sum, $375,000 should be paid in cash, to satisfy the preference liens securing judgments of the class to which those sued on by plaintiff belonged, but that receipted claims of that class produced by the purchaser should be accepted by the commissioner as so much cash, and that the remainder of the purchase money might be paid in first mortgage bonds of the company. The decree also provided that the title to the property should pass to the purchaser free from all claims except the current obligations and liabilities of the receiver. The decree of foreclosure was first rendered by the district court, and an appeal was taken by the trustee for the bondholders to the supreme court, contesting the priority given to such claims as plaintiff's, and the decree was by that court reformed without affecting such priority. From this judgment a writ of error to the supreme court of the United States was sued out by the trustee for the bondholders, and, while it was pending, the following instrument was executed by a number of the holders of claims against the railway company, including plaintiff: "The undersigned, creditors of the Houston, East and West Texas Railway Company, hereby agree, one with the other, and with E. S. Jemison, of the city and state of New York, to accept for their several claims, principal and interest, the first mortgage bonds of said Houston, East and West Texas Railway Company, to be hereafter issued by the company organized by the purchasers of said railway at foreclosure sale, at the rate of not exceeding twenty thousand dollars ($20,000) per mile, at their face value, that is to say, one bond for each one thousand dollars of said claims, and for fractional portions of said claims certificates entitling holders thereof to said first mortgage bonds, when presented in amounts aggregating one thousand dollars, said certificates bearing interest at the rate of five per cent. per annum from date of issue, said bonds to be payable forty years after date, and to bear interest at the rate of five per cent. per annum from date, interest payable semiannually, and to be for one thousand dollars each. To this end, we hereby assign our respective claims to T. W. House, to be held by him in trust to be delivered to the said E. S. Jemison, or his assigns, in exchange for said bonds to be issued as aforesaid. The claims held by us are judgments against said Houston, East and West Texas Railway Company, rendered by the district court of Harris county, for the respective amounts and at the respective dates set opposite our names; said judgments having been given priority of payment in the final decree rendered by the district court of Harris county in the case of Jacob Binz et al. versus the said railway company et al., on the 19th day of November, 1889, as modified by the decree of the supreme court of Texas, made on the 29th day of March, 1890. This agreement is made upon the condition that said bonds are to be delivered to us in exchange as aforesaid within three months after the foreclosure sale under said final decree, or as soon thereafter as practicable, not to exceed the period of six months from the date of said foreclosure sale. If this agreement shall not have been assented to by the holders of claims in an amount satisfactory to said Jemison, prior to the date of said foreclosure sale, then the same to be null and void. This agreement is one of several, similar in all respects, and each paper shall have the same force and effect as if all were one instrument. Witness our hands, this 26th day of May, 1890." The cause was afterwards dismissed from the supreme court of the United States, and the final decree was entered by the district court, as before stated, in accordance with the judgment of the supreme court. The sale was made under the final decree of foreclosure on the 7th day of August, 1892. The property was purchased by E. S. Jemison, and the sale was reported to the court, and confirmed by its order on the 25th day of October, 1892. The terms of sale were not at once complied with, but on the 19th day of November, 1892, the court, upon motion of the purchaser, granted a "short additional time for the purchaser to comply"; and on the 20th day of February, 1893, the court made another order extending the time until the next term of the court, reciting "that the delay in complying with the terms of his purchase by said E. S. Jemison has been brought about wholly unexpectedly to him, and without apparent fault on his part, and that he has partially complied with the terms of his contract." At the next term thereafter, and on the 26th day of April, 1893, the commissioner reported to the court that Jemison had complied with the terms of sale; stating, further, that, in so doing, he had passed before him (the commissioner), as part of the money to be paid in cash, the judgments here sued on by plaintiff, which had been allowed in part payment. The court thereupon entered a decree reciting that Jemison had complied with the terms of sale, and that it was made to appear that he had assigned to the Union Trust Company of New York his bid and all of his rights under it for the purchase of the railway and its appurtenances, and ordering the commissioner to make to such company a deed conveying the property "free from all charges and incumbrances except current obligations of the receiver," and further ordering the receiver to deliver the property to the purchasing company upon its demand. The order further provided for the closing up of the receivership upon the delivery of the property to the trust company. On the 26th day of May, 1893, the commissioner executed to the Union Trust Company a deed conveying the property to it, which recited the proceedings prior and subsequent to the sale, as well as the sale and purchase by Jemison, and his assignment of his bid to the trust company, and recited that such conveyance was made in consideration of the premises, and of $1,200,000 paid to the grantor by Jemison and the trust company, as shown by his reports to the court. On the 8th day of May, 1893, the Union Trust Company made a deed conveying the same property to the defendant in this suit, the reorganized Houston, East & West Texas Railway Company, reciting the judicial sale of the property, the bid by Jemison, and his assignment of same to the Union Trust Company, and that Jemison and his...