St. Louis Southwestern Ry. Co. of Tex. v. City of Tyler

• Decision Date: 15 December 1967
• Docket Number: No. 4204,4204
• Citation: 422 S.W.2d 780
• Parties: ST. LOUIS SOUTHWESTERN RAILWAY COMPANY OF TEXAS et al., Appellants, v. CITY OF TYLER et al., Appellees. . Eastland
• Court: Texas Court of Appeals

Page 780

422 S.W.2d 780

ST. LOUIS SOUTHWESTERN RAILWAY COMPANY OF TEXAS et al., Appellants, v. CITY OF TYLER et al., Appellees.

No. 4204.

Court of Civil Appeals of Texas.

Eastland.

Dec. 15, 1967.

Rehearing Denied Jan. 12, 1968.

Ramey, Brelsford, Flock & Devereux, Jack W. Flock, Michael A. Hatchell, Tyler, Jackson, Walker, Winstead, Cantwell & Miller, D. L. Case, Jack Pew, Jr., Dallas, Baker, Botts, Shepherd & Coates, Tom M. Davis, Houston, Clyde W. Fiddes and Roy P. Cosper, Tyler, for appellants.

Troy Smith, City Atty., H. L. McGee, Jr., Fred V. Hughes, Jack Norwood, Tyler, for appellees.

COLLINGS, Justice.

This is an appeal from a judgment of the District Court of Smith County overruling and denying the motion of appellants to vacate, modify or suspend an injunction issued by the said court in the same numbered cause in 1906. The injunction required the St. Louis Southwestern Railway Company of Texas to perpetually keep and maintain its general offices and machine shops within the City of Tyler.

The injunction in question is the result of litigation which began in 1902. In that year the City of Tyler, Johanna Pabst, W. H. Cousins and Sue Cousins brought cause number 5314 in the District Court of Smith County to enjoin the St. Louis Southwestern Railway Company of Texas, (hereafter called the Texas Railroad), from moving its general offices and machine shops from Tyler. The basis of that suit was a contract by which the Texas Railroad, in 1891 agreed to perpetually maintain its general offices and machine shops in Tyler and Article 4367, Texas Revised Civil Statutes 1895 which provided, in effect, that every railroad company owning or operating any line of railway within this State should keep and maintain permanently its general offices within the State of Texas and keep and maintain their machine shops and roundhouses at such place or places as they may have contracted to keep them.

An injunction was issued concurrently with the filing of the suit on April 20th, 1902 but, when the case was tried on the merits, judgment was rendered dissolving the injunction. This judgment was affirmed by the Court of Civil Appeals, (87 S.W. 238). On appeal to the Supreme Court the judgments of the District Court and Court of Civil Appeals were, in 1906, reversed and judgment was rendered by the Supreme Court granting a permanent injunction, which judgment the court declared should have been rendered by the lower courts. See City of Tyler v. St. Louis Southwestern Ry. Company of Texas, 99 Texas 491, 91 S.W. 1. The injunction decreed:

'* * * that said St. Louis Southwestern Railway Company of Texas shall keep and maintain in said City of Tyler, Smith County, Texas, its General Offices and shall keep and maintain in said City of Tyler its machine shop for its main line: And it is further ordered, adjudged and decreed that the injunction by the judge of the District Court of Smith County, Texas, heretofore granted on towit: April 20th, 1902, enjoining and restraining said Defendant in error, St. Louis Southwestern Railway Company of Texas, from removing its General Offices from said City of Tyler, in Smith County, Texas, be and the same is hereby perpetuated * * *'

In 1920, the Congress of the United States passed the Transportation Act of 1920, codified under Title 49 of the United States Code Annotated. It established a uniform system of Federal control and regulation of common carriers engaged in Interstate Commerce and delegated to the Interstate Commerce Commission authority to administer the act. One of the duties conferred on the Commission by Sec. 5(2) of the act was to determine the matter of the approval of any proposed lease of the properties of one common carrier to another, upon terms and conditions which it found 'to be just and reasonable.' The act also relieved carriers who were parties to such an approved transaction, of certain legal restraints . In 1940 Congress strengthened the power and authority of the Commission in such matters by declaring that its authority was 'exclusive and plenary.' Since the 1940 amendment the material portion of 49 U.S.C.A. Sec. 5 provides as follows:

' § 5, par. (2). Unifications, mergers, and acquisitions of control.

'(a) It shall be lawful, with the approval and authorization of the Commission, as provided in subdivision (b) of this paragraph--

'(i) * * * for * * * two or more carriers jointly, to purchase, lease, or contract to operate the properties, or any part thereof, of another; * * *.

'(b) * * * If the Commission finds that, subject to such terms and conditions and such modifications as it shall find to be just and reasonable, the proposed transaction is within the scope of subdivision (a) of this paragraph and will be consistent with the public interest, it shall enter an order approving and authorizing such transaction, upon the terms and condition, and with the modifications, so found to be just and reasonable: * * *.

§ 5, par. (11). Plenary nature of authority under section. The authority conferred by this section shall be exclusive and plenary * * * and any carriers * * * and any other persons, participating in a transaction approved or authorized under the provisions of this section shall be and they are relieved from the operation of the antitrust laws and of all other restraints, limitations, and prohibitions of law, Federal, State, or municipal, insofar as may be necessary to enable them to carry into effect the transaction so approved or provided for in accordance with the terms and conditions, if any, imposed by the Commission * * *.'

In 1953, the St. Louis Southwestern Railway Company of Missouri, (hereinafter called the Missouri Railroad), filed an application under Sec. 5(2) of the act to lease and operate all the properties of the Texas Railroad. The Missouri Railroad obtained the approval of the Interstate Commerce Commission of a lease which provided that the two companies were released from any obligation to maintain shops and offices at any particular place on any of the lines of the Texas Railroad. The order of the Interstate Commerce Commission approving the lease was made on December 18, 1953 and includes the following language:

'* * * The record is clear that it would be imprudent for the applicant to lease the properties of the Texas company if the effect would be to subject the entire system operations to the requirements of Texas laws and thus prevent it from carrying on its business and locating its offices in a manner most consistent with operating economy and efficiency. Compliance with the State and municipal laws and contracts as shown herein would hinder economy and efficiency in operation and service to the public and thereby impose an undue burden upon interstate commerce.' (Emphasis ours)

In connection with its order the Commission made the following findings:

'1. That the proposed lease, and the unification of operations resulting therefrom, will produce substantial economies and promote the efficiency of the applicant's system operations without adverse effect upon the public or other carriers.

2. That the laws of Texas and agreement with the City of Tyler pertaining to maintenance within Tyler or elsewhere in Texas of public and general offices, machine shops, roundhouses or other facilities, have no necessary relation to economy and efficiency in operation or service to the public, but on the contrary would hinder such operation and service and thereby impose an undue burden upon the unified operations and upon interstate commerce.'

In May of 1965, the Missouri Railroad announced its intention to coordinate and combine certain departments by moving its treasurer, some engineering personnel, and certain other employees, to locations other than Tyler. As a result the City of Tyler applied to the District Court of Smith County for a contempt citation against the railroad and its officers.

In February of 1966, the Texas Railroad filed in the Supreme Court of Texas a motion seeking an order vacating, modifying or suspending the original 1906 injunction judgment on the basis of changed conditions of both law and fact. After this motion was filed, the Tyler City Commission passed a resolution requesting its city attorney to dismiss the contempt proceedings filed by the city and expressing the city's desire not to contest the motion filed by the railroad in the Supreme Court to modify and vacate the 1906 injunction. The Supreme Court held that it did not have jurisdiction to grant the relief requested by the Railroad Company, but that the District Court which granted the original injunction did have such jurisdiction, and that its action pursuant thereto would be subject to appellate review. (Tex., 405 S.W.2d 330).

Thereafter in accordance with the Supreme Court's holding, appellants filed a motion in the original injunction cause in the District Court of Smith County in number 5414 to vacate, modify or suspend the injunction. It is from the action of the court denying such motion that this appeal is taken. In connection with the rendition of the judgment appealed from, the trial court filed the following conclusions of law:

'1. I conclude that the Court has jurisdiction over all the parties named as Plaintiffs, intervenors, and Defendants herein, and that all parties necessary to a decision of this matter are before the Court.

2. The Contract in question reported in (99 Tex. 491) 91 S.W. 1 is still in full force and effect and valid and binding upon the railway.

3. The Interstate Commerce Commission cannot legally authorize the railway to violate its contractual obligations as set out in such contract.

4. The statutes (Transportation Act) authorizing the Interstate Commerce Commission to act do not authorize the Commission to deprive the Contract holders under such contract of their contractual rights, or to impair their contractual rights, or impair the obligations of their contract, and, hence the Commission's...