Scott v. Farmers' & Merchants' Nat. Bank

• Decision Date: 22 January 1902
• Citation: 66 S.W. 485
• Parties: SCOTT et al. v. FARMERS' & MERCHANTS' NAT. BANK et al.
• Court: Texas Court of Appeals

66 S.W. 485

SCOTT et al. v. FARMERS' & MERCHANTS' NAT. BANK et al.

Court of Civil Appeals of Texas.

January 22, 1902.

COPYRIGHT MATERIAL OMITTED

Appeal from district court, McLennan county; Sam R. Scott, Judge.

Actions by the Farmers' & Merchants' National Bank and others against H. C. Scott and others and by J. E. Parker and others against the Citizens' Railway Company and others. The cases were consolidated. From a judgment in favor of the plaintiffs, all the parties appeal. Affirmed.

Clark & Bolinger, for Scott and Citizens' Ry. Co. John W. Davis, Eugene Williams, and L. W. Campbell, for Farmers' & Merchants' Nat. Bank and others.

KEY, J.

On April 13, 1896, the Farmers' & Merchants' National Bank of Waco commenced an action in the district court of McLennan county in the form of trespass to try title against Henry C. Scott and the Citizens' Railway Company for the recovery of what had formerly been known as the "Waco Dummy Street Railway." April 13, 1900, it filed an amended original petition, in which it set forth in detail the nature of its title and its claim for rent and damages. It also alleged that it was the owner of a judgment for $2,000 in favor of one J. H. Graves and against the Waco Dummy Street Railway Company, which constituted a charge against the property superior to the claims of the adverse parties. Thereafter the bank filed two supplemental petitions responding to matters pleaded by the defendants, and in some respects enlarging upon the matters already pleaded by it. The answer of Scott and the Citizens' Railway Company contained a general demurrer, general denial, plea of not guilty, and a special plea setting up in detail the character of title asserted by them. They also filed a supplemental answer in response to the bank's first supplemental petition. June 20, 1896, J. E. Parker, J. A. Clifton, J. W. Johnson, A. A. Robinson, John Sleeper, and L. B. Daughtrey brought an action in the same court against the Citizens' Railway Company and the Farmers' & Merchants' National Bank in form of trespass to try title for the recovery of the same property. On March 19, 1900, on motion of the plaintiffs Parker and his associates, the two suits were consolidated. Parker and his associates pleaded their rights fully and in detail, claiming —First, ownership of the property; and, second, a lien thereon superior to the claims asserted by the other litigants. The bank and Scott and the Citizens' Railway Company filed answers contesting all the rights asserted by Parker and associates, the particulars of which need not be stated. October 25, 1900,—the day on which the case went to trial,—the bank and Scott and the Citizens' Railway Company filed a motion to set aside the order consolidating the two cases, which motion was overruled. At the request of the respective parties, the trial court submitted the case to the jury upon special issues. After the verdict was returned, a decree was rendered awarding the Waco Dummy Street Railway, together with its right of way, franchises, etc., to the bank, and requiring Scott and the Citizens' Railway Company to pay the bank certain sums of money for rent, etc. The decree also fixed a lien on the property in favor of Parker and his associates for $15,601.25, superior to the rights of the other litigants, except as to $1,742.65, a balance due on a judgment obtained by J. H. Graves against the Waco Dummy Street Railway Company, and owned by the bank, which was given priority over the lien established in favor of Parker and his associates, Scott and the Citizens' Railway Company filed a motion asking the court to set aside the verdict and grant a new trial, and another moving the court to render judgment for them upon and notwithstanding the verdict, both of which motions were overruled. All the parties have appealed.

The chief subject-matter of this litigation, the Waco Dummy Street Railway, was a suburban street railroad, constructed by a domestic corporation known as the Waco Dummy Street Railway Company. The enterprise was inaugurated in 1890, but the road was not in operation until February, 1891. The company operated it for about three months, and thereafter J. E. Parker, the president, and A. A. Robinson, a director of the company, operated it for a while, making in all five or six months that it was a going concern. It was not a financial success and, after running five or six months, ceased to be operated, and became an insolvent nongoing concern. April 15, 1891, the Waco Dummy Street Railway Company executed a mortgage or deed of trust to the Citizens' National Bank of Waco, as trustee, conveying the property in controversy to secure an issue of bonds aggregating $50,000, which mortgage was filed for record in McLennan county on July 11, 1891. On June 2, 1896, W. M. Sleeper, acting as substitute trustee under the mortgage referred to, sold the property in controversy to J. E. Parker and his coplaintiffs, and they asserted title under this sale. November 5, 1891, the Waco Dummy Street Railway Company made a deed of trust conveying the property in controversy to Robert H. Rogers, as trustee, to secure the Citizens' National Bank of Waco, Tex., in the sum of $8,813.37, which trust deed was duly recorded November 9, 1891. On June 7, 1892, Robert H. Rogers, acting as trustee, sold the property to W. J. Hobson. At that time W. J. Hobson was the president of the Waco Electric Railway & Light Company, and had been such president and a director of said company from the time of its organization. The company was a corporation chartered under the general laws of this state on February 26, 1891. June 19, 1894, the district court of McLennan county rendered a judgment in favor of the Farmers' & Merchants' National Bank against the Waco Electric Railway & Light Company and W. J. Hobson for $4,590.30, an abstract of which judgment was properly filed and indexed in the office of the county clerk of that county June 29, 1894. On May 7, 1895, the sheriff of the county, acting under an execution issued upon the judgment, sold W. J. Hobson's interest in the property in controversy to the Farmers' & Merchants' National Bank for $1,000, all of which sum, except $38.75 costs, was credited on the bank's judgment, and the bank claims title under that sale. In May, 1891, the Waco Dummy Street Railway Company inflicted certain personal injuries upon J. H. Graves, and on March 17, 1893, Graves obtained a judgment in the district court of McLennan county against the company for damages on account of such injuries for the sum of $2,000. On November 5, 1895, the property herein involved was sold by the sheriff under an execution issued upon that judgment. The Farmers' & Merchants' National Bank became the purchaser at that sale upon a bid of $270, which was credited by the bank upon the Graves judgment, which had previously been acquired by the bank, and the bank also claims title under that sale. April 4, 1892, the Waco Dummy Street Railway Company, acting by J. E. Parker, its president, and John Sleeper, its secretary, conveyed the property in controversy to the Waco Electric Railway & Light Company. On February 26, 1894, at the suit of an attaching creditor, the district court of McLennan county appointed a receiver for the Waco Electric Railway & Light Company. The record shows that W. J. Hobson was a party defendant in that suit, but was dismissed by the final decree. It also appears that the Farmers' & Merchants' National Bank was at one time seeking to litigate its rights in that suit, but it is agreed by the parties that it withdrew its plea of intervention. The property now in controversy and considerable other property was taken possession of by the receiver as the property of the Waco Electric Railway & Light Company; and in due course of proceedings, and by order and approval of the court, it was, on May 7, 1895, sold by a special commissioner, at which sale Henry C. Scott became the purchaser for the sum of $60,100; and Scott and the Citizens' Railway Company claim title under that sale. This sale included about 5 miles of street railway constructed by the Waco Electric Railway & Light Company, as well as the road conveyed to it by the Waco Dummy Street Railway Company, which was about 4½ miles long, and extended from a central point in the city of Waco to a suburb called "Alta Vista." It was shown that all the title acquired by Scott had been vested in the Citizens' Railway Company; and that is the title asserted by it. The evidence presents no question as to the right of any of the parties to protection as innocent purchasers. The deed from the Dummy Street Railway Company to the Electric Railway & Light Company recites a cash consideration of $7,500, and the obligation of the latter company and W. J. Hobson to operate the dummy road for five years from the date of the deed, making four round trips each day. That deed contains a general covenant of warranty, and a stipulation, not however in the warranty clause, to the effect that the property conveyed is to be free from all incumbrances. It was shown that the cash consideration recited in the deed was not in fact paid, and the deed was made by the officers of the Dummy Street Railway Company for the purpose of complying with the following contract:

"Waco, Tex., March 8, 1892. To Mr. W. J. Hobson: We, the undersigned stockholders of the Waco Dummy Street Railway Company, make you the following proposition to sell you the track, roadbed, and right of way of the above-mentioned Waco Dummy Street Railway Company, as it is now built from Washington street, in the city of Waco, Texas, to the town site of Alta Vista, about 4½ miles of track, free from any incumbrance whatever, this including all franchises and rights of way along the said 4½ miles; and we hereby agree to make legal title to same to you within the period of sixty days from this date, reserving the rolling stock now owned by said Waco Dummy Street...