Fort Worth weekly gazette. [volume] (Fort Worth, Tex.) 1882-1891, 1890-12-25
CAUSE CELEBRE.
Attorney General Hogg's Argument on
the International Bond Case.
Clear Presentation of the Case on Behalf Of
the state-Reasons Why the State
Should Intervene
Special to the Gazette.

en0uiQ intervene.
| Special to the Gazette.
TYLER, TEX. Dec. 17.-Following is . YER
batim report OF Attorney General Hogg's argu-
ment on the International bond case, delivered
| before the supreme court at Tyler yesterday. 1t
| Ia clear presentation of the case on behalf OF
the state, and sets forth in formidable array the
reasons why the state should interfere an
intervenor, and why the bonds should be de-
clared invalid. It is as follows:
Argument of Attorney General ]. S. Hogg in
the supreme court at Tyler in the case of the
State Of Texas. appellant, VS.. the Farmers
Loan and Trust Company and the International
and Great Northern Railroad Company, appel
STATEMENT OF THE NATURE AND RESULT OF THE
ACTION.
This was suit instituted in the district court
Of smith county, Tex. March 70, 1883, by the
Farmers loan and trust company plaintiff
against the International and Great Northern
railroad company as defendant, to recover the
sum OF SIG, 34s 600 due upon certain second mort
gage bonds alleged to have been issued and sold
by said railroad company and applied to the
construction and operation Of its road, and to
| forecose the mortgage upon all the property
and franchises of said company. alleged to have
been executed by said company to plaintiff as
trustee to secure the payment OF said bonds.
There was a prayer for the appointment of a
receiver, and receivers were appointed TO take
charge of and operate the mortgaged property
under the direction OF the court during the en-
amount Si sued for and Tor foreclosure Of mortgage
and sale OF the property to satisfy such juds-
ment and for costs Of suit and general and spe-
cial relief.
The defendant company on September 20, 1889,
answered by general demurrer and general de-
NAL.
On September 6, 1889, the state of Texas was
by order of thecourt permitted to intervene in
said suit.
Admitted party to the action, the state by
its plea of Intervention challenged the validity
of the mortgage and bonds sued on, for various
reasons; prayed that they each be cancelled;
that the owners and holders be prohibited from
negotiating them; that the corporation and its
receivers be restrained from paying them; and
for general and special relief.
On September the 18th, 1889, plaintiff filed ex-
ceptions the states plea OF Intervention and
moved to strike it out.
On February %, $780, the court, upon a hear
ing of plaintiffs exceptions and motion to strike
out the states plea of intervention. overruled
party to the action.
The case was thereupon continued to the fall
term 1880.
On October 6. 1890, the case being called for
trial, plaintiff moved the court to take a
suit, which was by the court permitted, adjudg-
ing the plaintiff to pay all costs of the proceed
ing and all the other parties to go hence without
date, to all Of which the state in open court
then and there objected ana protested, and
which being refused the state excepted and in
oDen court gave notice of appeal to the supreme
court of Texas, fl led its bill of exceptions and
assignment OF errors, and now brings the case
to this court for revision.
ARGUMENT.
The first question to be considered here is,
did the court below commit an error in permit
ting plaintiff to take nonsuit over the protests
and objections of the intervenor? Adhering to
the strict language of the statute, which, when
SO plainly written every litigant should have the
right to rely on with implicit confidence for his
protection, there can be doubt but that the
court violated the law in Diminishing the case.
1t expressly says that at any time before the
jury have retired plaintiff may take nonsuit
but shall not thereby prejudice the right of an
adverse party to be heard on his claim for affirm
alive relief. The ''claim for affirmative relief''
tied to any particular conditions. plaintiff
can take his nonsuit, but if there is
claim for affirmative relief by an ad-
heard and determined by the court in that
ought OF to be denied in the face Of express
statute. The facts. when developed before the
the merit of such claim. Then, it seems, this
court in passing on the question raised would
an adverse party in the case asking to be heard
on a claim for affirmative relief? Second, was
that claim prejudiced by the nonsuit?
The peadings clearly show that the state was
seeking affirmative relief in the BY cross
demand on the plaintiff; and the action of the
court in permitting the nonsuit shows that the
state denied the right to have the claim
tried on the facts. Certainly that action preju-
diced the right to have that claim determined,
of having to resort to other remedies or courts
for the relief it sought by its plea therein. The
purpose and efficacy OF such a statute has never
been more strongly demonstrated perhaps than
in this case. For the one time in the history of
the country foreign bondhoders have sought
to recover Judgment in state court upon
a public highway for an enormous amount Of
money. The demand thus set up by them was
met by the state upon the charge that it was in
and created without benefit or consideration to
the corporate property or to the public, but for
a speculative purpose, which, # established.
would impose unjust burdens through corporate
franchises upon the public.
If the Claim were Just and honest and not
fictitious one, then the law afforded ample pro-
lection to the plaintiff, which Texas courts will
always see given. At the time when that issue
could be settled without further delay a nonsuit
was taken: II that is permitted to stand pre-
judice to the states right to have its adverse
claim settled is apparent, for it is reasonable to
suppose that the plaintiff would seek to recover
state might be denied It's right to defend an &C
ton, or perhaps be put to the Inconvenience Of
defending in multiplicity Of suits brought by
the various bondholders in their own individual
separate right.
it may be contended with much force and on
good authority that the withdrawal OF the
pleadings filed by plaintiff was a waiver of all
objections to the pleadings of the state in the
case. and an admission that it had pleaded a
good cause Of action. The issue was sharply
drawn. and it is but natural that plaintiff
would have taken s"judgmeut by default had it
not been for the states defense, The mere
1aCt OF Il nOnsulI HI unAt lunCIuTe, IN the lace
of the allegations made by the state. is tanta-
mount to the confession tb at there was danger
in meeting it. If the defense was well founded
was it such q right edged in the state as could
be prejudiced by any action of the court? II it
was then the nonsuit error. Logically.
this leads to q discussion of the underlying
question in the case, to-wit:
Has the state the right to enter her courts for
the purpose of having bonds that have been il
legally issued by railway company cancelled,
or the right to prevent the comp my from exer-
cising its corporate powers in the payment OF
fictitious debts at the expense Of the public?
1t seems TO be a well settled doctrine that the
rules of construction as to the powers of NUM-
cipal and railway corporations the same,
and that 1.-THE rule that corporation has only
power to do such acts as its charter, considered
IN relation to the general law. authorizes it to
do applies to every class of corporations. r..
r. Co. vs.. Morris ct al, 81 Texas, 692.
In the case OF May VS.. the City Of Detroit, l2
Am. Law Reg, l49, Justice Cooley. rendering
the opinion. held THAT the attorney general
has the right to enjoin in equity the abuse of 8
corporate franchise, as. for instance, the pay
ment of money by municipal corporation on a |
contract made in disregard of its charter And
in further discussing the question he said: ''It
is the right of the state at all times to keep the
grantees Of its franchises within the limits pre-
scribed in the grant, and public policy in gen. |
eral requires that serious departures should not
be overlooked. even though the parties injured |
having an opportunity to act do not com plain; |