The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1883-06-21

company and was building the road
under the name of the Missouri, Kan
sas and Texas railway company. His
conveyance was gratuitOuS with the
stipulation that his fence was not to
be thrown down so as to allow the
escape of his stock, and that he was
to have the wood on the right-of way.
The damages claimed were 300 for a
horse, $50 for two cows allowed to
escape in tearing down the fence in
constructing the road, $100eXpense of
replacing the fence, and $50 for wood
on the roadway burned by the con-
structing hands of the company.
The injury occurred June 3, 1881,
and on the fourth of may following
the NJ. K. & T executed lease to the
Missouri Pacific of S26 miles of con-
structed railroad for 80 years. The
portion of the road through Owens
pasture was not then constructed so
as to be embraced in the lease except
that it was to be considered embraced
| in it whenever the additional road or
branches should be completed, when
they were to be governed by the same
stipulations as the lease of the 1926
miles. The lease was acknowledged
| August %, 1881, and filed for record
in February, 1882. a construction of
this conveyance is necessary, it being
contended by the appellee that the
lease is virtual consolidation of the
two companies and that the liabilities
of appellant are those which in such
cases attach to the surveying COM
pany.
Held, The lease in question does
not come within the meaning of a
consolidation as technically under
stood, though practically it may ac-
complish, and perhaps was intended
! to accomplish, in some respects, the
same purposes and results; and, that
it was so intended y the contracting
parties. and this form of conveyance
was resorted to for the reas II
that under the laws of this
state consideration was not
authorized; then, as to creditors
and all persons not parties or privies
to the lease, it should be treated and
| considered us toits legal consequences
and effects us Il consolidation of the
two companies-that is, the creation
of one out of two companies.
Whatever may be the effect of the
lease, says the court, it cannot be Il
lawful consolidation of the compa-
MES. No inherent power exists in
corporations to consolidate. A con-
tract to consolidate to be valid must
have legislative assent. Field on
contracts. In this state, instead of
being authorized by statute it is eX-
presSly prohibited not only by the
statute revised statutes, articles 1916
-42477 but by the organic law, [conSti-
tuition, article 10, sections 8 and e.
We do not think that the companies
will be permitted under the practice
of lease to enjoy the advantages Of
consolidation, without at the same
time bearing the liabilities legally at
taching to such consolidation. This
would not be equitable nor in accord
ance with what we understand to be
the doctrine of the authorities. The
instrument i'll question seems to us
Just what it purpOrts to be, bona
Tide. valid lease of the property and
rights therein mentioned. The az
thority of the NJ, X. 81 r. railway
company to make such lease is not
questioned. 1t had power to sell or
mortgage the property, and this
power would undoubtedly include the |
bower to lease for IL term of years. |
This power to sell, etc, does not,
ONeNtl, CASCllNl w OllC
of a corporation including the right |
of way and other property essential |
to such franchise. These cannot be |
allenated without legislative author
ity or sanction. In this state there is
no statutory provision authorizing |
the sale or transfer of the franchises
of railroad corporation except I'M |
der deed of trust, order of sale or exc
fOx ho TNaNrOonnt of HnhtC n
the lease under consideration the |
not convened or apparently intended |
to be conveyed, for the very reason,
no doubt. that such conveyance |
would have been without authority
of law.
The court next considers at length |
the difference between the liability of
a consolidated and lessee company
with respect TO debts and obligations |
existing against the old companies |
or the lessor company at the time of |
the consolidation or lease, holding |
that in respect to the liability of a |
lessee the same rule obtains as in the |
case of a purchaser, as to liens or
charges upon the property to notice |
at the time of the time of the lease. |
On this point they say il appellant is
to be regarded as consolidated COM |
pany, it is liable to appellee in this |
action. but if it is a lessee and
the injury complained of by |
appellee occurred prior to the con-
summation of the lease, while the |
road was yet under the construction,
control and management of the les |
sor company, then appellant is not |
liable in this action, unless, as con-
tended by appellee, the appellant is
bound to make good the conditions in |
the right of way contract between
the lessor company and appellee. This |
brings up the question as to whether |
the two railroad companies intended |
to effect a virtual consolidation by |
means of the lease. This question of |
the purpose and intent of the compa |
MES in making the lease is one of |
fact, to be determined in the same |
manner as other questions OF fact are |
determined, and upon the same char |
acter of evidence.
If it be established that the pur- |
pose of the lease was to consolidate |
the companies, and not merely to |
lease the roads of one company to the |
other, then the appellant is liable for |
the injuries sustained by appellee, |
Notwithstanding those injuries oc-
CURED prior to the transfer of the |
property. If the conveyance, how
ever, is what it purports |
to be, a valid lease, the |
lessee company is not liable for
the alleged injuries, unless they oc-
Cured while it was constructing or |
operating the road; in other words,
the lessee company is not liable for |
any breach of contract or for any |
tort committed by the lessor prior to
the lease. Because of errors noticed:
the judgment is reversed and the
cause renanded. Wilson, j.
Correction, In the case of the |
Gulf, Colorado & Santa Fe Railway
Company, appealed from McLennan
county, the judgment of the lower
court was affirmed. and not reversed,
as reported yesterday.
Justices COurt-Precinct No. ).
VIM. Won Rosenberg, jr., presiding.
Robert jackson, colored, charged
with the theft of a horse belonging to
Mr. Williamson, in Hayes county, was
arraigned yesterday, and in default Of
bonds of $500 was sent to Jail to