The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1889-09-12
BIG SUIT.
ATroRNEY-GENERAL HoGG AGAIN
VIGOROUSLY REACHES OUT Az
TER RAILROAD HAIR.
A Case in Which Millions are Involved-A
Veritable Wringer OF Watered
Stocks and Bonds.


pany in the District Court of Smith
County.
Comes now the state of Texas by
her encouragement, James S. Hogg,
leave of the court having been OBJ
tanned, and intervening herein begs
leave to show to the court that plain
tiffs ought not to recover in this ac-
ton for the reasons:
l. That the state OF Texas by
special laws on the 9th day of August,
A. D., 1870, and the 10th day of March,
A. d., 1875, granted to the Interna-
tional and Great Northern Railroad
company, defendant herein, charter
to construct, equip,own and operate all
the railways described in the petition
of plaintiff except the one from Over
ton to Henderson and the one from
Round Rock to Georgetown. That
the terms, conditions and considera-
tons upon which said charter and the
amendment thereto were granted,
as well as the obligations imposed on
said company thereby, are fully set
forth in said special acts which are re-
ferred to as part of this answer and
will be used on a trial of the case
That by said charter and the general
laws of this state in force when it was
granted, and ever since said time, the
said International and Great Northern
Railway company, and all other rail-
way companies, persons, firms and as
sociatiOns of persons within this state
were and have ever been denied the
right to mortgage its railway property,
or to in any way incumber it by any
kind of Indebtedness except for money,
labor, or property actually received
and applied to the purposes for which
said corporation was organized, TO wit:
the construction, maintenance, equip
ment and operation of the
particular railroad itself.
That neither the defendant railway
company nor the plaintiffs, individ-
ually or collectively, as citizens OF in
any corporate capacity ever had be
right to borrow sums of money and
issue bonds therefor, or to give any
kind Of lien to secure the same on the
railways described in the petition ex-
cept for that which was necessary for
constructing, completing, improving,
or operating the railways so mortgaged.
2. That under decree of the Fed
eral court for the western district of
Texas, rendered at Austin on the 18th
day of April, A. d., 1879, all the rail
way property, rights, franchises,
powers, privileges, and benefits there
of, described and set forth in plaintiffs
petition, and then belonging to the
original international and Great
Northern Railroad company were sold
to satisfy the mortgage and bonded in
debtedness that had been foreclosed in
said court. That at said sale the
said plaintiffs and their associates as
the creditors and representatives OF
the creditors in said foreclosure pro-
ceedings, purchased all of said described
property and became the owners
thereof under the laws of this state.
That by said sale said purchasers and
their associates were entitled to have
and exercise all the powers, privileges
and franchises granted to said com
pany by the charters aforesaid and by
virtue of the general laws of Texas
then in force, and were in fact and in
law the true owners of said charter,
and were the incorporators under the
same and vested with all the powers,
rights and benefits thereof in the
same manner and to the same extent
as if they were the original incorpora-
tors of said company. That they only
by said purchase under the said
charters and the general laws then
and since in force had the power to
construct, complete, equip and oper-
ate the road upon the same terms and
under the same conditions and re-
strictions as were imposed by said
charter and general laws upon the
sold out company. That when they
purchased said property all the in
debtedness of said sold out company
was extinguished and settled thereby.
That, in other words, the said Kennedy
and his associates took said property
clear of all Indebtedness whatever.
That by neither the charters nor the
general laws aforesaid did the said
purchasers have the right to sell out
at private sale or otherwise the prop
erty they had so purchased. Nor did
they have the right to mortgage it or
in any way incumber it except for
money, labor or property actually re-
ceived and applied to the purposes for
which said corporation was organized.
That all the bonds and membranes
and mortgages and liens mentioned
and described in plaintiffs petit
ton were issued and executed
without warrant or author
ity in law; that they were not
issued for money, labor or property
actually received and applied to the
purposes for which such corporation
was organized; that they were not is
sued or executed for the construction,
equipment, maintenance or operation |
of said railroad or any of its lines, nor
was the money arising from said bonds
in any way applied TO such purposes,
nor have said moneys benefited the
said railroad or the public in any par
ticular, but were so issued, executed |
and PROMULGATED "a a aneculativa |