Missouri, K. & T. Ry. Co. of Texas v. State

• Decision Date: 24 June 1925
• Docket Number: (No. 6857.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: Missouri, K. & T. Ry. Co. of Texas v. State, 275 S.W. 673 (Tex. App. 1925)
• Parties: MISSOURI, K. & T. RY. CO. OF TEXAS et al. v. STATE.
• Court: Texas Court of Appeals

Page 673

275 S.W. 673

MISSOURI, K. & T. RY. CO. OF TEXAS et al. v.STATE.

(No. 6857.)^*

Court of Civil Appeals of Texas. Austin.

June 24, 1925.

Rehearing Denied October 7, 1925.

Appeal from District Court, Travis County; George Calhoun, Judge.

Proceeding by the State of Texas against the Missouri, Kansas & Texas Railway Company of Texas and others.Judgment for plaintiff, and defendant named appeals.Affirmed.

Batts & Brooks, of Austin, Charles C. Huff, of Dallas, and Joseph M. Bryson, of St. Louis, Mo., for appellant.

Dan Moody, Atty. Gen., and Ernest May, Asst. Atty. Gen., P. J. Alexander and S. L. Staples, both of Smithville, and Bailey, Nickels & Bailey, of Dallas, for the State.

BLAIR, J.

March 4, 1913, the state of Texas sued the Missouri, Kansas & Texas Railway Company of Texas, Missouri, Kansas & Texas Railway Company, and eight other railroad corporations, in the district court of Travis county, to restrain and enjoin them from consummating a consolidation purported to be authorized by chapter 11, Acts Thirty-Third Legislature; also to recover penalties for violations of the anti-trust, general railway office, and other statutes governing the operations of railroads.

February 4, 1914, the parties compromised the suit, and the written agreement was approved and entered as the judgment of the courtFebruary 6, 1914.The paragraphs of the agreement and judgment material here read:

"(30) The shop facilities and terminals of the Missouri, Kansas & Texas Railway Company of Texas at Smithville, Tex., shall be maintained substantially as they existed on the 25th day of January, A.D. 1913, and shall not be removed therefrom until such removal is authorized by the Railroad Commission of Texas.It is provided, however, that nothing in this agreement shall affect any contract which may exist or may have heretofore existed between the city of Smithville or any citizen or citizens of that city or of that community, or of any other parties, and the Missouri, Kansas & Texas Railway Company of Texas with reference to the maintenance of said shops, facilities, and terminals at said point, if any such contracts exist; but it is expressly provided that this stipulation is not a recognition by any of the parties thereto of the existence of any such a contract, but this particular stipulation is simply incorporated in the agreement in order that it may be understood that it is not the purpose of the Attorney General to undertake to bind any one upon any obligation with reference thereto not embraced within this agreement of this litigation."

"(18) This judgment and decree is final as to all the parties and issues involved in the suit, but any party to this cause may make application to the court at any time for such further orders and directions as may be necessary and proper in relation to carrying out the provisions of this decree and the said agreement.Jurisdiction is retained by the court for the purpose only of giving full effect to this decree, by such other and further orders as may be necessary or appropriate to carry out and enforce the provisions of the agreement and this decree entered thereon."

The state of Texas filed a motion October 6, 1923, to correct paragraph 30, supra, so as to read:

"The shops, facilities, and terminals of the Missouri-Kansas-Texas Railway Company of Texas at Smithville, Tex., shall be maintained substantially as they existed on the 25th day of January, A.D. 1913, and shall not be removed therefrom until such removal is authorized by the Railroad Commission of Texas," etc.

Appellant contested the motion, and it was denied.The state instituted this proceeding in that cause July 7, 1923, against appellant, Missouri-Kansas-Texas Railroad Company of Texas, and various other railroad companies, in the nature of an application for writs of mandamus and mandatory injunction seeking to compel especially the Missouri-Kansas-Texas Railroad Company of Texas, to maintain and operate at Smithville, Tex., all offices and equipment, office forces, shops, terminals, and other forces and facilities in quantities and numbers as were there maintained and operated on January 25, 1913; also that said railroad company be "required to re-establish at Smithville, Tex., its division superintendent's and train dispatcher's offices, and to maintain the same substantially as the Missouri, Kansas & Texas Railway Company of Texas, maintained same on January 25, 1913," alleging that the appellant, Missouri-Kansas-Texas Railroad Company of Texas, owns and operates certain lines of railroad, including the line from Waco through Smithville to Houston; that it is the successor in interest of all the physical properties and franchises of the defendant railroad companies, parties to said agreement and judgment of February 4 and 6, 1914, respectively, and in and to the interest of the successors of the defendants in that suit to the physical properties and franchises; that the agreement and judgment, their terms and obligations, were mutually intended to be, and in fact and law were to become and to remain, attached to the physical properties and franchises of the defendants to that suit and their successors in interest, and to become a covenant attached to and running with the title to said physical properties and franchises, and especially to the line of railroad specifically named; that in violation of said agreement, judgment, and covenant the appellant railroad company is refusing to maintain shop facilities and terminals as provided by the agreement, and is not maintaining or operating substantially as they existed at Smithville, Tex., January 25, 1913, the offices of division superintendent and train dispatcher, nor the office equipment and force belonging and appertaining thereto, but have closed, abandoned, or removed them without any order or authority of the Railroad Commission of Texas, in breach of the agreement and judgment aforesaid.

The appellant railroad company answered by formal answer, and specially pleaded under oath that it was incorporated under the laws of Texas, January 24, 1923, and began to operate the line of railroad in question April 1, 1923, which was formerly the property of the Missouri, Kansas & Texas Railway Company of Texas, having purchased it at judicial sales, and, since it was in no way a party to the agreement and judgment, could not be bound thereby; that neither contained any stipulation to the effect that purchasers of the property at judicial sale should be bound thereby; that they were neither a part of or attached to the physical properties and franchises of the original parties at the suit, nor did they become a covenant attached to or running with the title; but that said agreement and judgment were personal obligations of its predecessors and not binding upon it.

It was further specially pleaded that the agreement and judgment did not require the old company or its successor to maintain and operate the offices of superintendent and train dispatcher at Smithville, Tex., but only required it to maintain and operate "shop facilities and terminals," which it was doing.

It was further pleaded that appellant railroad company did not purchase 349.59 miles of the road operated by the old railroad, and that it had expended large sums of money in the improvement of its equipment, all of which rendered it unnecessary to maintain the offices and equipment in question at Smithville, and that these changes were made in the interest of public policy and economy, and, since it was a common carrier of freight and passengers, engaged in both interstate and intrastate commerce, and since the closing of the particular offices named resulted in a net saving of $21,000 plus annually, it should be declared, if the stipulation in the agreement and judgment in this respect were ever binding upon it, that same now constitutes and requires an undue, unreasonable, and unjust discrimination against both interstate and intrastate commerce, and therefore violative of the Transportation Act of 1920(U. S. Comp. St. Ann. Supp. 1923, § 10071¼ et seq.) and public policy.Appellant further pleaded that it had the right to have the matter here involved adjudicated in the federal court at the foot of the decree in the foreclosure proceedings under which it purchased the properties.

By supplemental motion, the state generally denied the allegations of appellant railroad company, and specially pleaded that it purchased the physical properties and franchises under the foreclosure proceeding with full notice of the agreement and judgment entered in the cause against its predecessors February 6, 1914; that it derived and enjoyed substantial rights and advantages accruing by virtue of the agreement and judgment, and is therefore estopped to defend this proceeding on the ground that it was not a party to and had no notice of the agreement and judgment.

Upon the issues thus raised by the pleadings, the case was tried to the court, a jury being waived, and judgment was rendered against the Missouri-Kansas-Texas Railroad Company of Texas, decreeing that it was bound by the agreement and judgment to maintain certain shop facilities and terminals at Smithville, Tex., substantially as they were maintained there by the Missouri, Kansas & Texas Railway Company of Texas, January 25, 1913, and ordered that they be so maintained; and further decreed that appellant, Missouri-Kansas-Texas Railroad Company of Texas be "required to re-establish at Smithville, Tex., its division superintendent's and train dispatcher's office, and to maintain the same substantially as the Missouri, Kansas & Texas Railway Company of Texas maintained same on January 25, 1913."

The appellant was given 60 days to comply with the judgment or to supersede it in case of an appeal.The appeal was perfected by supersedeas bond in the sum required by the judgment.

Logically, the first question to determine is whether the compromise...