Rose v. San Antonio

• Decision Date: 31 January 1868
• Citation: 31 Tex. 49
• Parties: JOHN W. ROSE ET AL., EXECUTORS, v. THE SAN ANTONIO AND MEXICAN GULF RAILROAD COMPANY.
• Court: Texas Supreme Court

31 Tex. 49

JOHN W. ROSE ET AL., EXECUTORS,

v.THE SAN ANTONIO AND MEXICAN GULF RAILROAD COMPANY.

Supreme Court of Texas.

January, 1868.

A promise to pay a railroad company a sum of money when it shall have constructed the road from L. to V., and kept the same in operation, conveying passengers and freight between said points for the period of one year, is for a valuable consideration and binding.

The party making the promise is bound to nothing until the promisee, within a reasonable time, engages to do, or else does, or begins to do, the thing which is the condition of the first promise. Until such engagement or such doing the promisor may withdraw his promise, because there is no mutuality, and therefore no consideration for it. But after an engagement on the part of the promisee, which is sufficient to bind him, then the promisor is bound also, because there is now a promise for a promise, with entire mutuality of obligation. So, if the promisee begin to do the thing in a way which binds him to complete it, here also is a mutuality of obligation. But if without any promise whatever the promisee does the thing required, then the promisor is bound on another ground. The thing done is itself a sufficient and a completed consideration, and the original promise, to do something if the other party would do something, is a continuing promise until the other party does the thing required of him. 1 Pars. Con. book II, ch. 1, sec. 9, pp. 375, 376, ed. of 1857.

If the benefit accrue to him who makes the promise, or if any loss or disadvantage accrue to him to whom it is made, at the request or on motion of the promisor, although without benefit to the promisor, in either case the consideration is sufficient to sustain assumpsit. Pas. Dig. art. 220, notes 283, 290.

Where the cause of action accrues upon the performance by the payee, the statute of limitation did not run until the completion of such condition. Pas. Dig. art. 4604, note 1017; 8 Tex. 126;11 Tex. 417;23 Tex. 531.

Where there was an exception to excluding the deposition of a certain witness, the bill of exceptions must show the materiality of the evidence. Pas. Dig. art. 217, note 280; 12 Tex. 175;16 Tex. 340;17 Tex. 62.

It is doubtful whether a defendant can plead in reconvention a trespass, by the plaintiff upon his land against an action of debt. Pas. Dig. art. 3446, note 797.

A plea in reconvention must show a good cause of action against the plaintiff. Pas. Dig. art. 217, note 280.

APPEAL from Victoria. The case was tried before Hon. J. J. HOLT, one of the district judges.

The history of the enterprise is given in the case of this road against Jones, 28 Tex. 20.

This was a suit brought by the appellees against the appellants upon the following note:

“For value received I promise to pay to the order of the San Antonio and Mexican Gulf Railroad Company the sum of one thousand dollars, when said company or their assigns shall have constructed said road from the city of Lavaca to the town of Victoria and kept the same in operation, conveying passengers and freight between said points, for the period of one year. This 7th day of March, A. D. 1860.

P. R. ROSE.”

The petition alleged the construction of the road and the keeping of the same in operation for one year in accordance with the condition of the note.

The defendants demurred to the petition, assigning as special exceptions: 1st. That there was no mutuality of consideration. 2d. That the building of the railroad did not form a valuable consideration for the note. The court overruled the demurrer, and the defendants excepted. They presented the same points, in substance, in the instructions they asked the court to give the jury, which were refused, and in their motion for a new trial, which was overruled; and verdict and judgment having been rendered against them, they appealed and sought a reversal of the judgment, mainly upon the ground that the court erred in those rulings; that is to say, erred in holding that the building and running of the road in accordance with the condition of the note constituted a sufficient consideration to make it binding upon the maker.

The defendant also pleaded in reconvention that somebody had got ties off his land for the road, but there vas no averment that it was with the authority of the company; and, the whole defense being held by the court to be untenable, the reader is referred to the opinion of the court for the character of that plea.

A. B. Peticolas, for appellants. I. There is a general demurrer, that puts in issue the sufficiency of the petition.

We contend that the petition and amendments are insufficient to support this action, because there is no allegation that the corporation, at the time the suit was brought, had, besides the president, the twelve other directors required by their charter, nor are their names given. Act September 5, 1850, 3d Leg. Act of Incorporation, Special Laws.

But here a preliminary question arises: Can the court take judicial notice of the existence of this highway, and examine the laws to refresh its memory? It can. 1 Greenl. Ev. § 6; 1 Stark. Ev. 7th Am. ed. 231, and note g. Under my view of the laws, the want of the allegation of the existence of a board of directors in the petition was an error in the substance, and not merely in the form, of the petition. The corporate capacity to sue was directly in issue under the general denial. Holliday v. Memphis and El Paso Railway, 23 Tex. 465, and authorities there cited.

Chief Justice MARSHALL, in the case of Dartmouth College v. Woodward, 4 Wheat. 636, says that a corporation, “being a mere creature of law, possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it is created. Amongst the most important are immortality and (if I may be allowed the expression) individuality, properties by which a perpetual succession of many persons are considered as the same, and may act as a single individual.”

[The counsel here reviewed the charter and amendments.]

II. The second objection under general demurrer is, that there is no allegation that plaintiffs built the road, relying upon and in consideration of the promise of defendants, and expended money and materials upon the faith of the promise. This allegation was absolutely necessary to entitle plaintiff's to recover. Hopkins v. Upshur, 20 Tex. 92; Ang. & Ames, Corp. § 527; Union Turnpike Company v. Jenkins, 1 Caines, 381.

III. We come now to the special exceptions:

There was no mutuality of consideration.

The building of the road, as set out in the petition, does not form a good consideration for the making and delivery of said note, and, inasmuch as these exceptions raise the same questions that are raised by instructions asked by defendants, they will be considered together.

1st. There is an axiom of the law that a promise without consideration is void. 1 Pars. Cont. 5th ed. 427.

To a contract there must be a mutual obligation, an obligation that binds both parties. There is no contract unless the parties thereto assent, and they must assent to the same thing in the same sense. 1 Pars. Cont. 5th ed. 475, note a; Pierce, Am. R. R. Law, 360, 367, 368. “Absolute mutuality of engagement, so that each party has the right at once to hold the other to a positive agreement.” 1 Pars. Cont. 449, note a.

There was, then, no mutuality of consideration or obligation. While Rose was bound, the company was free to build or not, as they saw proper; and, under plaintiff's construction, this continuing offer by defendants would have been good for twenty years (there being no limitation law opposed) and if on the twenty-first year the company had built the road, they could sue for and recover the debt upon proof of condition fulfilled. The court is particularly referred on this point to the case of Utica and Schenectady Railway v. Brinkirhoff, 2 Am. R. R. Cas. 481. NELSON, J., in delivering the opinion of the court, says: “The difficulty in sustaining this action is that no consideration appears for the undertaking of the defendants. The written instrument is but a simple proposition, and no averment that it was acceded to by plaintiff. The fact that they afterwards located the road agreeably to the terms is in itself nothing. It should have appeared that they agreed with defendants thus to locate it as a consideration for the promise.” This case was decided on demurrer, and is directly in point on the facts alleged. Lees v. Whitcomb, 5 Bing. 34; Sykes v. Dixon, S. C. 1 Per. & D. 463; Bates v. Cook, 3 Dow & R. 676; James v. Williams, 5 Barn. & Adol. 1109; Pierce's R. R. Law, 562; Governor and Miners v. Fox, S. C. 16; Q. B. 239.

The note in this case is not declared upon as a subscription, and even as such could not be sustained. 1 Pars. Cont. 452; Hamilton College v. Stewart, 1 Coms. 581.

IV. The second exception is, that the building of the road is not a good consideration for the making of the note. By the terms of the act of incorporation of September 5, 1850, section 2, the road was to be built to commence on the gulf coast, between Galveston and Corpus Christi; and run to or near San Antonio, by act of 14th November, 1857 (7 Leg. special laws, sec. 8). The town of Lavaca was made the eastern terminus of said road by same act, section 2; twenty-five miles were to be completed by 1st January, 1860, or the company forfeit all their privileges, and the charter become null and void. This was the penalty attached, and section 6 provides pay to them of sixteen sections of land for every mile built. They were working for large pay, and were under a legal obligation to build the road. In this suit they contend that they built the road, not for those reasons at all, but because this note was given, and they set up as a consideration here the very act they were compelled to...