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

• Court: Supreme Court of Texas
• Writing for the Court: Gaines
• Citation: 37 S.W. 1062
• Parties: HOUSTON, E. & W. T. RY. CO. v. KELLER.
• Decision Date: 30 November 1896

37 S.W. 1062 HOUSTON, E. & W. T. RY. CO.
v.
KELLER. Supreme Court of Texas. November 30, 1896.

Error to court of civil appeals of First supreme judicial district.

Action by Theodore Keller against the Houston, East & West Texas Railway Company. A judgment for plaintiff having been affirmed by the court of civil appeals (36 S. W. 859), the defendant brings error. Reversed.

Baker, Botts, Baker & Lovett, for plaintiff in error. W. P. Hamblen, for defendant in error.

GAINES, C. J.

This suit was brought by the defendant in error against the plaintiff in error, and one E. S. Jemison, one H. W. Downey, and James Appleby, and was twice tried in the district court, and upon both trials resulted in a judgment in favor of the plaintiff. Upon appeal from the judgment first rendered, the court of civil appeals reversed the judgment, and remanded the cause. Upon the second trial, demurrers to the petition by Jemison, Downey, and Appleby were sustained, and they were dismissed from the case. Judgment was, however, rendered for the plaintiff, against the defendant corporation, for the full amount of his claim. This judgment was affirmed in the court of civil appeals.

In the opinion of the latter court upon the second trial, the facts of the case are stated

Page 1063

as follows: "That in 1885 the railroad and all of the property, rights, and franchises, of every character, of the Houston, East & West Texas Railway Company was 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, freed 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. [13 S. W. 655.] 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...