Rio Grande Valley Gas Co. v. City of McAllen

• Decision Date: 11 January 1946
• Docket Number: No. 11435.,11435.
• Citation: 152 F.2d 591
• Parties: RIO GRANDE VALLEY GAS CO. v. CITY OF McALLEN et al.
• Court: U.S. Court of Appeals — Fifth Circuit

152 F.2d 591 (1945)

RIO GRANDE VALLEY GAS CO. v. CITY OF McALLEN et al.

No. 11435.

Circuit Court of Appeals, Fifth Circuit.

December 10, 1945.

Rehearing Denied January 11, 1946.

R. A. Hightower and Rufus G. Ransome, both of Brownsville, Tex., for appellant.

E. A. McDaniel, of McAllen, Tex., for appellees.

Before HUTCHESON, WALLER, and LEE, Circuit Judges.

WALLER, Circuit Judge.

The facts in this case are fully set out in the opinion of the lower Court. Since it is not reported, we quote it here:

"Plaintiff, Rio Grande Valley Gas Company, instituted this suit against the City of McAllen, its Mayor, City Commissioners, and others, alleging that plaintiff owns and operates a gas system in the City of McAllen, under franchise granted by said City, and that the defendant, City of McAllen, now owns and operates a gas distribution system. It is further alleged that a bond issue for the purpose of constructing the municipally owned gas system has been issued in the sum of $125,000, and that such bond issue constitutes a cloud on plaintiff's easements, titles and franchise-contracts generally, and should be removed and cancelled. Plaintiff prays for damages, costs of suit, and relief generally. Plaintiff also contends that the purported bonds are void and asks that all clouds cast on plaintiff's franchise-contracts be removed.

"Defendants answer and say that plaintiff instituted suit in the 93rd District Court of Hidalgo County, Texas, against all of these defendants, wherein plaintiff claimed against defendants all of the matters and things set out in the instant case. A general demurrer was sustained to plaintiff's said petition, and upon plaintiff's refusal to amend, said cause was dismissed. That thereafter, plaintiff appealed said case to the Court of Civil Appeals for the Fourth Supreme Judicial District of Texas, at San Antonio, and such Court of Civil Appeals affirmed the judgment of said District Court. 158 S.W.2d 122 Writ of error was denied by the Supreme Court of Texas. Defendants herein plead that all matters and things set out in plaintiff's complaint are res adjudicata, and further that the City of McAllen has the right, under the Constitution and laws of Texas, to construct and/or purchase and operate a gas system, and say that they had the legal right to issue the $125,000 bond issue, and deny that same is a cloud and fictitious lien on plaintiff's easements, titles and franchise-contracts.

"It is admitted that the franchise of plaintiff was not an exclusive one.

"It is perfectly plain that the authority of the City of McAllen to purchase or construct and maintain a municipal gas system, and to issue revenue bonds for such purposes, has been specifically and definitely judicially ascertained by the Appellate Courts of Texas in the case of Rio Grande Valley Gas Co. v. City of McAllen, Tex. Civ.App., 158 S.W.2d 122, 123, wherein it is said: `Appellant first contends that the governing body of the City of McAllen is without authority to purchase or construct and maintain a municipal gas system or to issue revenue bonds for such purposes. We overrule this contention. Such authority is given to the governing body of the City of McAllen, it being a home rule city, by Article 1111, Vernon's Ann.Civ.Stats.; City of Dayton v. Allred, 123 Tex. 60, 68 S.W. 2d 172.'

"Writ of error was denied in this case by the Supreme Court of Texas.

"The United States Circuit Court, Fifth Circuit, passed upon a similar proposition of law in the case of Arkansas Louisiana Gas Co. v. City of Texarkana, Texas, 100 F.2d 652, in...