Houston & Texas Cent. Ry. Co. v. Texas, 170 U.S. 243 (1898)

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Houston and Texas Central Railway Company v. Texas

No. 406

Argued January 24-25, 1898
Decided April 25, 1898
170 U.S. 243

ERROR TO THE COURT OF CIVIL APPEALS FOR THE SECOND

SUPREME JUDICIAL DISTRICT OF THE STATE OF TEXAS

Syllabus

In Galveston, Harrisburg & San Antonio Railway Co. v. Texas, ante,226, the grants of land repealed by the operation of Section 6 of Article X of the Constitution of Texas of 1869 were grants to aid in the construction of lines of railway not authorized until after that provision took effect, whereas in this case, the grants which are claimed to be affected by it were grants made prior to the adoption of that constitution for the purpose of aiding in the construction of the road from Brenham to Austin. Held that that constitutional provision, as thus enforced, impairs the obligation of the contract between the state and the railway company, and cannot be sustained.

Argument was urged on behalf of defendant in error that the particular lands sued for are situated in what is known as the Pacific reservation, being a reservation for the benefit of the Texas and Pacific Railway Company, created by a Special Act of May 2, 1873, and hence that, though the certificates were valid, they were not located, as the law required, on unappropriated public domain. This question was not determined by either of the appellate tribunals, but, on the contrary, their judgments rested distinctly on the invalidity of the certificates for reasons involving the disposition of federal questions. This Court therefore declines to enter on an examination of the controversy now suggested on this point.

This was a suit instituted by the State of Texas in the District Court of Nolan County, Texas, February 3, 1890, to recover of the Houston and Texas Central Railway Company, and the purchaser under it, sixteen sections of land of 640 acres each, located in that county by virtue of certificates issued by the state to the railway company. It was alleged that the certificates were issued by the Commissioner of the General Land Office of Texas without authority of law, and that the action of the commissioner in issuing and delivering them, and permitting them to be located, and allowing the lands to be surveyed thereunder, and in receiving and filing the field notes in the General Land Office of the state, was without authority of law, and in violation of the constitution and laws of the state at that time, and also that the certificates were located in territory reserved by an act passed May 2, 1873, for the location of certificates issued to the Texas and Pacific Railway Company. It appeared from the state’s complaint that the certificates were a part of those issued for the construction and completion of about ninety-four miles of main track, and about two and one-half miles of side track, of that part of the company’s railway extending from Brenham to Austin.

The district court gave judgment in favor of the state, which was affirmed by the court of civil appeals. 36 S.W. 819. Application was made to the supreme court of the state for a writ of error, which was denied. 40 S.W. 402. This writ of error was then allowed.

The Galveston and Red River Railway Company was incorporated by a Special Act of the Legislature of Texas approved March 11, 1848. Special Laws, 1848, 370. By the second section of that act, the company was

invested with the right of making, owning, and maintaining a railway from such point on Galveston Bay, or its contiguous waters, to such point upon the Red River, between the eastern boundary line of Texas and Coffee’s Station, as the said company may deem most suitable, with the privilege of making, owning, and maintaining such branches to the railway as they may deem expedient.

A special act supplementary to that act was approved February 14, 1852, by section 14 of which there was granted to the company "eight sections of land of six hundred and forty acres each, for every mile of railway actually completed by them and ready for use;" and provision was made for the inspection of the road from time to time by the state engineer, or a commissioner to be appointed by the governor, as any section of five miles thereof should be completed, on whose certificate that said section had been completed in a good and substantial manner, and ready for use, the Comptroller should give information of that fact to the Commissioner of the General Land Office, whose duty it should be to issue land certificates for the lands thus granted, which should be located upon the public domain of the state, survey be made, the field notes returned, and patents issued. Special Laws, 1852, p. 142.

By another Special Act of February 7, 1853, the preliminary action of the incorporators in commencing the survey and grade of the railway at the City of Houston was confirmed, and, by section two, the company was

further authorized and empowered to extend said railway to the City of Galveston, and also to make and construct simultaneously with the main railway, described in the original acts establishing said company, a branch thereof towards the City of Austin under the same restrictions and stipulations provided in said original acts,

etc. Special Laws, 1853, Extra Session, 36-37.

January 30, 1854, the legislature passed a general law granting sixteen sections of land to the mile for constructed railroad, which is sufficiently set forth in the preceding case, as well as the supplementary act approved the same day. It was provided that companies accepting the provisions of the act, and already entitled to eight sections per mile, should not be entitled to receive any grant for branch roads.

January 23, 1856, the legislature passed a special act entitled "An act for the relief of the Galveston and Red River Railway Company and supplementary to the several acts incorporating said company," by which, after providing that the company should have six months after January 30, 1856, to complete the first twenty-five miles of its road, commencing at the City of Houston, it was declared that

said company shall be entitled to the rights, benefits, and privileges, granted by an act approved January thirtieth, eighteen hundred and fifty-four, entitled "An act to encourage the construction of railroads in Texas by donations of land," upon the completion of said twenty-five miles within said six months,

etc., upon certain conditions, to-wit: that the company should construct twenty-five miles of its road each year after the expiration of said time; that it should maintain its principal office and keep its records on the line of its road; that a majority of its directors should reside in the state; that it should build its main line to a certain point before commencing any branch road; that the Act of February 7, 1853, to regulate railroads should apply to the charter, and that it should

yield all general branching privileges except such as are expressly granted by the provisions of its charter to certain points, and shall be required to expend only so much of its capital stock upon any branch as shall be expressly subscribed to such branch, and shall not spend upon its trunk any moneys subscribed for any branch, and shall be required to complete its main trunk to the point on Red River contemplated in its charter, or to such point of intersection between said road and some other road running from the northern or eastern boundary of Texas towards El Paso, as shall be agreed upon between the directors of said company.

It was provided that the company might assign certificates for lands granted it; that it might borrow money for the construction of the railway, and secure the same by mortgage and the issue of bonds, and that it should have the right, after location and survey of the lands granted it or any part thereof, to mortgage or sell any part of the same. The sixth section road:

That nothing in this act shall be so construed as to affect the right of the state to repeal or modify the Act of January 30, 1854, entitled "An act to encourage the construction of railroads in Texas by donations of land," provided that the right to lands acquired before said repeal or modification shall in all cases be protected.

Special Laws, 1856, 28, 30.

By another Special Act approved September 1, 1856, the Galveston and Red River Railway Company was authorized to change its name to "The Houston and Texas Central Railway Company," and it was also provided that the failure of the company to build the second section of its road within one year after the completion of the first section should not work a discontinuance as to said company of the benefits of the general Act of January 30, 1854, or of any other general or special laws relative to railroads,

if said company shall have completed their second and third sections, amounting to at least fifty miles at the expiration of two years after the construction of said first section.

Special Laws, 1856, 259-260.

By another Special Act passed February 4, 1858, it was, among other things, provided that the failure of the company to complete the third section of its road by July 30, 1858, should not work a discontinuance as to the company of the benefits of the Act of January 30, 1854, or any other general laws in reference to railroads, if the company should complete the third section by July 30, 1859, and that, on the completion of subsequent sections of twenty-five miles annually after July 30, 1859, or fifty miles every two years, "said company shall be entitled to sixteen sections of land per mile, as contemplated in said last-mentioned act, for each section so completed;" and "that the benefits of the provisions in the general law shall only inure to the said company while said laws shall remain in force." Special Laws, 1858, 94-95.

By still another Special Act, approved February 8, 1861, any failure to complete the fourth and fifth sections was condoned, and the company given until January 30, 1863, in which to complete those sections. Special Laws, 1861, 11-12.

When the Civil War began in 1861, the company had completed and had in operation its main line for about eighty miles from the terminus at Houston. January 11, 1862, the legislature passed two general acts continuing in force all laws granting lands to railway companies and extending the time in which they were required to construct certain parts of their lines until two years after the close of the war. These acts provided that the president and directors of this railway company should, before the provisions of the acts might extend to the benefit of the company, pass a resolution restoring the original bona fide stockholders of the company to the rights, privileges, and immunities to which they were entitled previous to the sale of the road as mentioned in the acts, provided the stockholders should pay into the treasury of the company ten percent upon their stock on or before the expiration of the extension of time provided, or otherwise should forfeit their rights, privileges, and property interests as stockholders. Laws 1862, pp. 43, 44, 46, 47. The resolution required by these acts was duly passed by the company.

On September 21, 1866, a Special Act was passed, entitled "An act granting lands to the Houston and Texas Central Railway Company," by which a specific grant was made to that company

of sixteen sections of land, of six hundred and forty acres each, for every mile of road it has constructed, or may construct, and put in running order, "in accordance with the provisions of the charter of said railroad company," provided that the lands theretofore received under the General Act of January 30, 1854, should be deducted from the grant thus made, and that the certificates issued on the first three sections should "be included in the terms, benefits and conditions of this act as if issued by virtue of its provisions," and that the company should construct and put in running order a section of twenty-five miles of additional road to that now built, within one year from January 1, 1867, or fifty miles within two years from that date, and that the road should be put in running order to Bryant’s Station by September 1, 1867. Provision was made for the inspection of the road from time to time as sections should be completed, and for the issue and location of certificates and the survey of the lands thereby granted. Special Laws, 1866, pp. 33-34.

November 13, 1866, a general law was passed whereby the grant of sixteen sections per mile under prior laws was continued for ten years from that date. Laws 1866, p. 212. This act also provided "that all tap roads over twenty-five miles long shall be entitled to the benefits of this act."

By the Constitution of 1869, Art. 12, § 43, the statutes of limitation of civil suits were declared suspended by the Act of Secession of January 28, 1861, and to be considered as suspended until the acceptance of that constitution by Congress, which acceptance occurred March 30, 1870.

The Washington County Railroad Company was incorporated by a Special Act approved February 2, 1856, and was invested

with the right of locating, constructing, owning and maintaining a railway commencing at such point on the trunk of the Galveston and Red River Railroad as said corporation shall deem most suitable, crossing the Brazos River within the limits of Washington County, and then running by the most suitable and direct line to Brenham in said county.

Special Laws, 1856, p. 49. This railroad company was organized, and thereafter constructed and put in running order from a junction with the Houston and Texas Central Railway Company at Hampstead, thence directly towards the City of Austin, to Benham, a distance of twenty-five miles.

Sometime prior to August 29, 1868, the Houston and Texas Central Railway Company purchased the Washington County Railroad at foreclosure sale. On that day, the convention which had assembled to frame a new constitution, and which did frame the constitution adopted in 1869, passed an ordinance reciting that the Houston and Texas Central Railway Company had become the owner, by purchase, of the Washington County Railroad, that both of said companies were indebted to the state for sums borrowed from the special school fund, and that the Houston and Texas Central Railway Company desired to extend the Washington County branch to the City of Austin as soon as it could be done, and to extend its main line to Red River, and it was declared

that the Washington County Railroad is hereby made and declared to be a branch of the Houston and Texas Central Railroad, and shall henceforth be known and called the "Western Branch of the Houston and Texas Central Railway," and shall be controlled and managed by said Houston and Texas Central Railway Company, and the Houston and Texas Central Railway Company shall have the right to extend said western branch of their road from the Town of Brenham, in Washington County, to the City of Austin, in Travis County, by the most eligible route as near an air line as may be practicable.

The same convention also passed, December 23, 1868, a "declaration for the relief of the Houston and Texas Central Railway Company," which provided that the company should not suffer

any forfeiture of any rights secured to it by existing laws by reason of the failure of said company to construct and put in running order their said railway to the Town of Calvert, in Robertson County, by the first day of January, A.D. 1869, as required by the Act of the 21st of September, A.D. 1866, provided said railway shall be constructed and put in good running order for the use of the public to the said Town of Calvert by the first day of April, A.D. 1869.

The Constitution framed by this convention was adopted by a vote of the people at an election held November 30 to December 3, 1869, and was accepted by Congress March 30, 1870, 16 Stat. 80, c. 39. Section 6 of article X, of that constitution read as follows:

The legislature shall not hereafter grant lands to any person or persons, nor shall any certificates for land be sold at the land office, except to actual settlers upon the same, and in lots not exceeding one hundred and sixty acres.

August 15, 1870, the Legislature of Texas passed a special act entitled "An act for the relief of the Houston and Texas Central Railway Company," which recited substantially the same matters as were recited in the declaration of the convention, and provided, in section 1, as follows:

That the Washington County Railroad is hereby made and declared to be, to all intents and purposes in law, a part of the Houston and Texas Central Railway, and shall be under the control and management of the Houston and Texas Central Railway Company in like manner as every other part of said railway, and the Houston and Texas Central Railway Company shall have the right to build and extend the part of its railway heretofore known as the "Washington County Railroad" from the town of Brenham, in the County of Washington, to the City of Austin, in the County of Travis, by the most eligible route to be selected by engineers of the company, and the said company shall also have the right to build a branch road diverging from the main trunk at some point in Navarro County and striking Red River at such point as will enable such railway company to make a connection with any railroad which may be built to said river from the northward, and the said Houston and Texas Central Railway Company, by reason of the construction of said railway from the Town of Brenham to the City of Austin, and by reason of the construction of said branch from Navarro County to Red River, shall have and enjoy all the rights, privileges, grants and benefits that are now, or may at any time hereafter, be secured to any railroad company in the State of Texas by any general law of the state, and shall be subject, in respect of said railway and said branch, to all the duties and responsibilities imposed upon the said Houston and Texas Central Railway Company by its charter and by other laws of the state.

Section 4 read thus:

No forfeiture of any of the rights or privileges secured to it by existing laws shall be enforced against the said Houston and Texas Central Railway Company by reason of its failure to comply with the conditions as to construction imposed by the first section of the Act of the twenty-first of September, A.D. 1866, entitled "An act granting lands to the Houston and Texas Central Railway Company," but the said company shall have and enjoy all the rights and privileges secured to it by existing laws the same as if the conditions embraced in the first section of the said act of the twenty-first of September, A.D. 1866, had been in all respects complied with, provided that the land grant to said company shall cease unless the said company shall complete their main trunk east of the Brazos River to Richland Creek, in Navarro County, within twelve months from the first day of October, A.D. 1870, and shall also complete their road to the City of Austin within two years after the passage of this act.

Special Laws, 1870, 325.

The company completed its road to the City of Austin December 25, 1871, and completed its main line to Richland Creek September 26, 1871.

Section 6 of article X, of the Constitution of 1869 was amended as of March 19, 1873, so as to authorize the legislature to grant lands for purposes of internal improvement. Thereupon the Legislature of Texas passed many special laws granting lands to railroads, and afterwards, on August 16, 1876, the legislature passed another general law granting sixteen sections of land per mile in aid of the construction of railroads. Laws 1876, 153.

It appeared "that the defendants paid taxes on the lands sued for continuously since they were located and up to the present time," and

that the defendants paid all the fees of locating and surveying the said lands sued for, as well as for the same number of alternate sections known as the even numbers for the public free-school fund.

Application for the inspection of the Austin line, as well as for the main line to Corsicana, was made by the company to the governor February 9, 1872, which was done, and report showing the completion of the road made February 21, 1872. The certificates were issued in July of that year. The lands were placed on the maps of the General Land Office, and always recognized as the company’s land. They were all mortgaged by the company, and sold on foreclosure in September, 1888.