The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1889-05-30
THE EAST LINE CASE.
Judge Key, of the District Court,
Renders His Decision.
He Declares That the Company
Has Forfeited Its Charter.
A Synopsis of the
Decision.

Judge Key, in the district court, ran
dered bis decision yesterday in the case
of the State of Texas vs.. the East Line
and Red River Railway company. This is
a quo warranto proceeding by the state
upon the relation of the encouragement,
seeking a forfeiture of the charter rights
and franchises of the company. The de-
cision of the court is quite lengthy, com
prising more than 1000 words. The grounds
alleged for the forfeiture by the attorney
general, are permitting the roadbed, roll
ing stock, ETC., to get out of repair, the
failure to keep public Office in the state,
the failure of its stockholders and direct
ors to hold annual meetings on the line
of the road for more than five
years, the sale of all of
its corporate rig franchises and privil-
eyes, together with all of it's stock, road
bed, buildings, etc., to the Missouri,
Kansas and Texas Railway company, a
railroad corporation chartered under the
laws of Kansas and controlling and oper-
ating a competing and parallel line of
railway; that the president, managers, etc.,
operate the railway from the state of
Missouri; that its stocks and bonds have
been increased far beyond the value OF its
entire corporate property; that it has
entered into contract and conspiracy
with other railway companies for the
purpose of sthing and preventing com
petition in passenger and freight rates;
that, by the sale of its property, the
respondent has committed self-dest1uction
and rendered itself unable to perform its
duties to the public. The respondent
filed general demurrer and specially ex-
cepted to the several averments, which on
preliminary hearing were overruled. The
respondent also filed a general denial, ex.
cep5 that it admitted the sale to the Mis-
souri,, Kansas and Texas, reserving its
right to remain corporation and claimed
that the sale was lawful. After setting
forth at lengths the facts in the case and
the reasons, the court concludes that the
Gale to the Missouri, Kansas and Texas
was ultra wires and unlawful:
FIrst-Because the roads do not run in
the same general direction.
Second-Beoause they are not connect
ing roads within the meaning OF the stat
ute authorizing the Missouri, Kansas and
Texas to purchase.
Third-If they were connecting roads
they were also competing roads.
Fourth-The purchasing road was and
is organized under the laws of another
state.
The respondents counsel admit in argu-
ment that the failure to keep a public
Office on the line of its road in the state is
violation of constitutional, statutory and
common law obligations.
The failure of its stockholders and di-
rectors to hold annual meetings on the
line of it's road is likewise violation of
statutory requirements.
The connection of the respondents
road with the International Traffic asso-
citation appears to have been in violation
of section of article 10 of the State Cog
stitution.
! The fictitious increase of stock and
bonds of railroad corporation is prohib-
tied by statute.
Do such failures to fulfill corporate OBJ
legations and misuse of its franchises
cause forfeiture Of charter?
The court concludes that two of the acts
complained of constitutes common
law grounds of forfeiture, viz. (:
The bad condition of the road
and the sale of the road without authority
of law. 1t is commended by the counsel
for the respondent that if the sale of its
road and other property to the Missouri,
Kansas and Texas, and its failure to keep
a public office in the state and on its line
be unlawful, then while at common law
these might warrant a judgment of for
fixture, yet, inasmuch as the legislature
has ordained different and milder penal
ties for such violations, as by injunction