Texas Ry Co City of Marshall City of Marshall v. Texas Ry Co

• Decision Date: 19 May 1890
• Citation: 10 S.Ct. 846,136 U.S. 393,34 L.Ed. 385
• Parties: TEXAS & P. RY. CO. et al. v CITY OF MARSHALL. CITY OF MARSHALL v. TEXAS & P. RY. CO. et al
• Court: U.S. Supreme Court

136 U.S. 393

10 S.Ct. 846

34 L.Ed. 385

TEXAS & P. RY. CO. et al. v CITY OF MARSHALL.

CITY OF MARSHALL

v. TEXAS & P. RY. CO. et al.

May 19, 1890.

These are appeals from a decree of the circuit court of the United States for the eastern district of Texas. The suit was originally brought by the city of Marshall in the court of the fourth judicial district of the state of Texas against the Texas & Pacific Railway Company, and was afterwards removed by that company into the circuit court of the United States for the eastern district of Texas. The suit was a bill in chancery which sought relief for a violation of its contract by the railway cop any that it would establish the eastern terminus of its railroad at the city of Marshall, in the state of Texas, and would also establish its principal offices of the road at that place. The bill sets out as the written evidence of this contract a letter from F. B. Sexton, E. D. Blanch, and M. D. Ector, on the part of the city of Marshall, to Thomas A. Scott, president of the railway company, and the reply of Mr. Scott to this communication. These letters are set out as exhibits to the bill, and are as follows:

'Marshall, Texas, June 26th, 1872.

'Col. Thomas A. Scott, president of the Texas & Pacific Railway Company, Philadelphia, Penna.—Sir: Pursuant to your request we now present to you, to be laid before the board of directors for the Texas & Pacific Railway Company, a written statement of the agreement made at Mrs. King's Hotel, in this city, on the 22nd inst., between yourself, on behalf of said railway company, and the undersigned, on behalf of the city of Marshall. The county of Harrison (of which the city of Marshall is the county-seat) has determined, in the manner required by an act of the legislature of the state of Texas, passed April 12, 1871, to donate to said Texas & Pacific Railway Company three hundred thousand dollars in the bonds of said county, payable in gold coin, having thirty years to run, and bearing seven per centum interest per annum, and to levy a tax in the manner required by said act, to provide for the payment of the principal and interest of said bonds, upon the condition that said company shall establish its eastern terminus and Texas office at the city of Marshall, and shall locate and construct at said city its main machine-shops and car-works, thereby securing at said city the connections with said terminus provided for by the act incorporating said Texas & Pacific Railway Company and an act supplemental thereto. We understand that a full transcript of the orders and decrees of the county court of Harrison county in regard to this matter has been furnished you. In addition to this, the city of Marshall will donate to said company sixty-six acres of land, at the place and in the shape designated by you on the map of said city, whereon to locate the main machine-shops, car-works, and depot of said company at said city. The city of Marshall will procure said land by issuing its bonds in accordance with the provisions of the act of the legislature of Texas already referred to, which bonds will be used in the purchase of said land. The citizens of Marshall have already undertaken to cash said bonds to an extent sufficient to purchase all of said land which cannot be procured by donation directly from the owners thereof. The details of acquiring the title to said land by your company will be attended to by the city, and were explained in our conversation with you. In consideration of the donation of the said sum of three hundred thousand dollars and said sixty-six acres of land, the said Texas and Pacific Railway Company will permanently establish its eastern terminus and Texas office at the city of Marshall, and will also establish and construct at said city the main machine-shops and car-works of said rail way company.

'Awaiting your reply, we are, respectfully, your ob't servants,

'F. B. SEXTON,

'E. D. BLANCH,

'M. D. ECTOR,

'Committee on Part of City of Marshall.'

'Texas & Pacific Railway Company, Office of the President.

'Philadelphia, July 16, 1872.

'F. B. Sexton, E. D. Blanch, M. D. Ector, Committee on Behalf of the City of Marshall, Texas—Gentlemen: I am in receipt of your favor of June 26, setting forth arrangement between your committee and myself, as president of the Texas & Pacific Railway Company. The statement, as you make it, is satisfactory, and I will have the matter ratified at the first meeting of our board of directors; but the absence of Judge Pierrepont and Mr. Stebbins in Europe for a few weeks, to look after our financial matters, may prevent me from getting a quorum o our directors together, but in due time it shall all be arranged.

'Very respectfully, THOMAS A. SCOTT, Pres.'

The bill alleges that in pursuance of this contract the county of Harrison, of which the city of Marshall was the county seat, issued its $300,000 worth of bonds, which were sold and the proceeds paid over to the company, and that the city of Marshall purchased, at a cost of $60,000, the 66 acres of land mentioned in this contract, and conveyed it to the railway company. This conveyance was by two separate deeds, and it is pertinent to note that in each one of these deeds it is recited that the ground was conveyed to the railroad company 'whereon to locate the main machine-shops, car-works, and depot of said company at said city,' and that the Texas & Pacific Railway Company agreed to establish its eastern terminus and Texas office at the city of Marshall, and also to establish and construct at said city the main machine-shops and car-works of said railway company. Shortly after these contracts and conveyances, which were made and completed in the years 1872-83, the railway company did establish its principal offices at Marshall, constituting that city its eastern terminus; so that the court finds that 'the contract was duly executed upon both sides, and that the eastern terminus of said railway company and the Texas office of said company and the main machine-shops and car-works of said railway company are and were established at the city of Marshall.' The bill avers that although things remained in this condition until some time in December, 1881, the defendant has since that time moved various parts of its machine-shops and its Texas office to other cities, and, in fact, has by various changes, not important to be recited here, caused the city of Marshall to cease to be the terminus of the road.

In the view that we shall take of this case, it is not important to inquire what particular offices or what particular machinery, work-shops, etc., of the railroad company have been removed from the city of Marshall, nor how far the railroad company has ceased to hold the city of Marshall as the eastern terminus of its road. It may be conceded that the allegations of the bill and the evidence in the case establish the fact that by the operations of said railway company the full and complete object of the city of Marshall in its contract with that company is not now accorded to it. To the bill there was a demurrer, which being overruled, there was filed an answer by the company, and upon the final hearing the circuit court entered a decree forbidding the company from removing any more of its offices from the city of Marshall, and enjoining it to continue those which remained there, at that place, and otherwise to perform the contract. It did not, however, by any mandatory order decree that the corporation should restore to the city of Marshall the offices, the shops, and the other things connected with its operations under the contract with that city, which it had removed. From this decree both parties have appealed, the railway company denying that there was any ground of relief against it, and the city of Marshall on the ground that the complete relief which it sought had not been given to it.

W. Hallett Phillips, A. H. Garland, James Turner, and C. B. Kilgore, for the city.

[Argument of Counsel from pages 398-400 intentionally omitted] John F. Dillon and Harry Hubbard, for the railway company.

MILLER, J.

As regards the appeal of the railway company, two principal questions are presented. The first of these is, was there a valid contract that the corporation should not only establish its eastern terminus at Marshall city, and put up there the depot buildings and machine-shops, car-works, etc., included in the contract, but should keep them there perpetually? Second, if this were so, is it a contract which a court of chancery should enforce?

If it were not for the word 'permanent,' as found in the communication of the committee of the city of Marshall to Mr. Scott, we should not think it easy to justify the inference that the obligation was to maintain forever at that place what the company engaged to establish there. The clause of the lt ter of this committee to Col. Scott, which first mentions the conditions, is that the bonds of the county of Harrison were voted upon the condition 'that said company...