Court Opinion

ID: 4893468
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:53:40.076457+00
Date Added: 2024-06-11T08:09:50.058725
License: Public Domain

ON MOTION FOR REHEARING.
Gould, Associate Justice.
In disposing of the motion for rehearing, it is proposed to do little more than to state our conclusions, on what we regard as the material points or questions raised in its support. The want of time forbids an attempt to discuss all of the legal positions assumed by counsel for appellee, each in elaborate briefs and printed arguments, characterized by great zeal, industry and ability.
The point is made that those sections of the statute referred to in the opinion as authorizing a railroad company to mortgage its franchise, were repealed by the constitution of 1866. Art. 1, sec. 6; Pasch, Dig., p. 943. In *144the original printed argument of counsel for appellant, filed December 5, 1879, this statute was relied on and cited at length, and it is not remembered that counsel for appellee in their oral arguments asserted its repeal. After the control of the state government was assumed by the military,' under the reconstruction laws of the United States, and from that time down to its incorporation into the Revised Code, there is certainly some reason to believe that this statute was generally regarded, and often acted on, as in force, and to claim that it has repeatedly been treated as in force by the legislature and by this court. Rev. Code, art. 4259 et seq.; 2 Pasch. Dig., arts. 7387-9; Scogin v. Perry, 32 Tex., 21; Good v. Sherman, 37 Tex., 660; Witherspoon v. Tex. & Pac. R. R. Co., 48 Tex., 309; Tyler Tap R. R. Co. v. Driscol, 52 Tex., 17; R. R. Co. v. Henning, 25 Tex., 466. But whether the statute was repealed and so remained, or whether, on the other hand, it should be treated as having been in force after the fall of 1867, is not material to be decided in this case; for in either event, we are of opinion that the power to mortgage the franchise was otherwise sufficiently recognized by the state. In the same sentence of the constitution of 1866 which repeals the act of December, 1857, and immediately following the repealing clause, we find the following: “And the franchise corporate privileges of any incorporate company shall not be sold under judgments, except for the foreclosure of mortgages or hens created in the manner prescribed by law.” In a previous part of the same section the state was secured “by a first lien or mortgage upon the road, rolling stock, depots and franchises of the corporation whose bonds may be guaranteed.” We think that these clauses show that it was the intention of the constitution of 1866 to permit the franchise of a railroad company to be mortgaged, and to be sold under a decree . of foreclosure, or by a trustee empowered to sell.
■ The original opinion proceeds on the idea that the foun*145dation of the liability of a consolidated corporation for the debts and liabilities of the constituent corporations, must rest on agreement, either express or implied. Proceeding on this basis, the court held, in substance, that the act of merger was not passed or accepted in contemplation of any agreement between the two companies, made or to be made, but in contemplation of the fact that the trust sale had divested the Waco & 1ST. E. B. of its road-bed, mortgaged property and franchise, and that the purchaser, being a corporation, needed for that reason, and for that reason only, legislative sanction to authorize it to operate the road. The writer of the opinion may not have been happy in expressing the nature of the rights acquired, or supposed by the legislature and the railroad companies to have been acquired, by the Central through its purchase; but it is believed that, fairly construed, the substance of the opinion is as above stated.
It is urged that the original contracts and the trust sale and purchase were all ultra vires and void] and it seems to be argued that the legislature in passing, and the Central in accepting, the act, must be presumed to have treated all these proceedings as nullities. It is replied, and the position seems to us sound, and supported by the authorities cited by counsel, that though the Central had exceeded its powers in acquiring property, it was a consummated transaction, subject only to be impeached for that reason by the state. But a further reply is, that at the time the act was passed the Central appears to have been in undisputed possession under its contracts and purchase, and there is nothing to indicate that it was treated by the legislature as having acquired no rights thereby. In one instance, at least, the same legislature treated the purchase of a railway at sale and foreclosure of mortgage, by another railway corporation, not as a nullity, but as making the latter the ee owner” of the former, and reciting these facts in the preamble, proceeded to enact that the *146former railroad, is “declared to be, to all intents and purposes in law, part of ” the latter. See act of May 8,1873, Special Laws. It is impossible to understand how the legislature could have passed the act, looking upon the purchase as conferring no rights, either because of the ultra vires nature of the contracts and purchase, or because the contracts were tainted with fraud, or were entered into in anticipation of the absorption of the Waco & N. R. R. by the Central.
It is claimed that the Central controHed the Waco & E". B. B. Company, owning over nine-tenths of its stock, and a majority of the directors of the latter being directors of the Central, and that the act of merger was passed, looking upon the application of the Central as equivalent to the assent of the other company. We think the record shows that the act was not passed in contemplation of any agreement fixing terms of consolidation, and it is therefore not important to inquire whether the Central was in a position to force the assent of those stockholders not interested in the Central. Counsel have made no suggestion how these stockholders were to be disposed of, under their view of the act of merger. We think the reasonable conclusion is that their rights, after the sale, were regarded as valueless, though we certainly do not intend to say that the land donation of the state was or was not embraced in the deed of trust, or that in fact the stockholders had nothing left. An insuperable objection to construing the act of merger as attempting to vest the property of one company in another, is the want of power in the legislature to do this. If the Central be estopped from denying the constitutionality of the act, we still think it highly improbable that the legislature intended to affect property rights by the act.
It is claimed that the original and supplementary contracts show an agreement on the part of the Central to pay off all of the existing liabilities of the Waco & E". R. *147B. That subject received the careful consideration of the court on the original hearing, although! not embodied in the opinion, and our conclusion then was, and now is, that the Central, by its contract, assumed only the “ liabilities created by the Waco & IN". B. B. in the construction of its road after the first contract was made with the Central.33 It is very possible that the Central - thought Shirley’s ' pending suit was groundless and would result in nothing; but still it does not appear that by its contracts, or by the acceptance of the act of merger, it assumed to pay him.
Upon the whole, looking at all the surroundings, we are still of opinion that the act was passed to give the assent of the state to the purchase made by the Central, and to enlarge its corporate rights so as to enable it to operate the Waco & 1ST. B. B.; that the act was not designed to affect, and did not affect, the rights of either stockholders or creditors; that as to creditors, it neither took away any assets from their reach, nor placed new assets within their reach; and that by accepting the conditions of the act the Central did not subject itself to the liabilities of the Waco & U. B. B. On this branch of the case we will only add that no question has been before us as to the rights of a judgment creditor of the latter road, and that we are not aware of having said anything which would preclude such a creditor from any remedy he may be entitled to, or embarrass him in seeking that remedy.
II. On the subject of exemplary damages because of alleged malice in the breach of a contract, we adhere to the views expressed in the opinion. The charge of the court submitted to the juey no issue as to whether or not a tort had been committed, or as to the amount of actual damages to the “character, reputation and standing among business men33 of plaintiff from any alleged tortious act of defendant, established to their satisfaction, but allowed them to give exemplary damages, if there was a *148breach of the contract done and made with a fraudulent or malicious intent. The expression in the charge about an act done by the corporation, is indefinite and amounts to nothing. The question presented to us was on this charge. Was it right? Or, was it wrong? We answered that it was wrong, and notwithstanding the authorities referred to by counsel, we are still of that opinion. The cases cited as to the enlarged measure of actual damages, for a fraudulent failure to comply with a contract to convey land, certainly do not authorize exemplary damages. Oases are also cited where exemplary damages have been allowed in suits against carriers for breach of contract; but evidently on the facts, the action might have sounded in tort, for what amounted to a tort was alleged. With due respect for the elementary authors cited, we are unwilling to follow them in this matter. One of them has declared the allowance of exemplary damages to be a ‘ ‘ departure from the true principles of the law of damages, and of public policy.” Field on Damages, p. 28, note. As we agree with him in this opinion, we are not prepared to go beyond the authorities, and to lead the way in allowing such damages for breaches of contract.
But counsel assert the right to sue in one action for a breach of contract, and for damages for a tort, where both claims grow put of the same transaction, and are so connected that they may conveniently and appropriately be litigated together. Thus qualified, this proposition is believed to be in accordance with the decisions in this state. But we regard the petition of plaintiff, in* so far as it at-' tempts to allege a tort and to recover damages therefor in addition to damages for a breach of contract, as substantially seeking a double recovery for the same wrong. .The real purport of the petition was to claim damages for breach of contract, including profits lost by the breach, and to claim also exemplary damages because of alleged malice in committing the breach.
*149III. In regard to the depositions of Brown and Boyce, we adhere to our opinion that they should have been excluded. They were giving their opinion as contractors and builders, of the cost of clearing, track laying and other work, and it was the right of defendant to have them answer interrogatories calculated to show the extent of their experience and knowledge, and the value of their opinions or estimates. The refusal to answer a material question should not be allowed by the officer taking the depositions, and the mere neglect to answer may prove as injurious to the party questioning.
It is not believed that the authorities require the exclusion of depositions in all cases where the witness has failed to answer every question. Much must be left to the discretion of the court. The rule should not be allowed to he presented to obstruct or retard trials, or to exclude depositions because of a manifest casual failure to answer some unimportant question.
The motion for rehearing is overruled.
Overruled.
[Opinion delivered December 17, 1880.]