The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1896-01-23

PENDANTS that under the provisions of the
act of November 10, 1864, all warrants
received from them, as above recited,
were cancelled as soon as paid in, and
the comptroller issued bonds equivalent
in amount to the amounts so paid in and
bearing q per cent interest, said bonds
being turned over to the special school
| fund and that since then and long prior
I to the institutions of these suits, the State
of Texas upon the maturity of said bonds
paid the full amount thereof, together
with all interest thereon to the aforesaid
special school fund, without in any way
questioning the validity of the same.
By the act of November 10, 1866, the
railroads indebted to the special school
fund were given an extension of time
and by the act Of April 13, 1870, a way
| was provided for them to avoid the sale
of their property for non-payment OF IN
terest On August Is, 1870, the legisla-
ture passed over Governor Davis veto
an act for the relief of the Houston and
Texas Central railway which provided
that said company might exchange other
bonds of it's issuance for those it had
originally given the State to protect its
loan from the special school fund, said
act further providing that the company
should have credit for the sums paid on
account of said loan in State warrants.
In spite of this act, Governor Davis re-
fused to accept the bonds authorized
thereby when rendered.
Some time during the year 1870, A.
| Bledsoe comptroller of the State at that
time, with the approval OF Governor
Davis, assumed to ignore the payments
made in State warrants on their loans by
| railroads indebted to the special school
fund and demanded that they again pay
in specie the amounts paid as aforesaid,
and Governor Davis threatened unless
| this was done to foreclose the lien on the
property of said railroads, and did in fact
| proceed to advertise and sell the property
| of the Galveston, Harrisburg and San
Antonio Railway company. In order TO
avoid such sale the Galveston, Harris
burg and San Antonio Railway company
paid on account of interest from Noyem-
| Der /, 1870, to May /, 1894, 1898, 091.24,
| and the Houston and Texas Central Rail
road company paid on the same account
1915, 356.21, from October 20, 1870, to
November 8, 1893, the several payments
which went toward making up the aggre-
gate being made under protest
| When these companies ceased to pay
| interest last year Attorney General Gull
berson brought suit against them for the
amount of interest and sinking fund re-
naming due on their debt, provided they
are not entitled to credit for the amount
of State warrants paid into the treasury
by them from 1860 to 1864 and for fore
closure of the lein upon the several prop
critics involved.
In the case of the Galveston, Harris
burg and San Antonio railroad the
amount sued for is $416,S24
In the case of the Houston and Texas
| Central it is SAL 1854 on account of its
own Indebtedness and $S6, 655.9O with in
| terest of 6 per cent from May i, 1879,
on account of the Washington County
railroad debt.
On November 16, 1895, Attorney Cen
eral Crane filed a supplemental petition
excepting to defendants answer that they
had liquidated that part of their debt
under controversy with State warrants
under provisions of certain acts of the
legislature, on the ground that said acts
| were invalid, because they authorized the
| liquidation of said debt in paper, which
| was null and void, because said paper
| was issued for the purpose of being cir
culated as money, contrary to the pro-
visions of both the State and Federal con-
stitutions, and furthermore because said
paper was issued in aid to a rebellion
against the government of the United
! States.
The attorney general also maintains
| that the treasurer and comptroller and
other officers of the State government had
no authority to receive payment OF the
special debt in anything but lawful money
of the United States, and that any act
intended to authorize the payment of OBJ
! legations to the special school fund in
treasury warrants, State bonds and Con
federate notes was null and void in that
| it specifically attempted to authorize the
destruction and diversion of a special
fund given to the State of Texas by the
Federal congress for special purposes and
/ by previous act of the legislature set
apart as the special school fund and that
the public schools of Texas had vested
right in said fund, and that the legisla-
ture had no authority to destroy said
fund.
The substance of the answer is as fol-
lows:
The defense of the railroad company
| to the suit of the State is that the al
| legged balance of the school fund loan
! claimed by the State represents the por-
ton of the debt paid by it during the
war under acts of the legislature author
izing payments on account of the school
! fund loans to be made in State warrants
and bonds, provided the railroads re-
ceived the same at par in payment Tor
| freight and passenger fares.
The railroad company pleads that it
! did receive the State warrants used i'll
payment at par for freight and passen-
ger fares; that the warrants thus re-
ceived they rendered to the State in pay
ment of interest on school fund loans;
that this tender was accepted and the
warrants received and Cancelled by the
+ State; that the State cannot, at this date,
and, in equity and good conscience, should
not, repudiate such payments and seek to
recover again what has once been paid
and discharged.
The State replies that the legislation
authorizing payments in treasury war
rants was null and void because passed
while Texas was in rebellion against the
United States; that the treasury war
rants used in payment were null and void
because issued in aid of the war. to fur
nish arms and munitions. to support sol
dicrs in the field. to provide hospitals and
relieve the families of those killed in the
war; and that the warrants used in pay
ment were issued to circulate as money
all in violation of the constitution and
public policy of the United States.
Arguments will be heard in the cases
today.