Houston Railway Company v. Texas/Opinion of the Court

The supreme court of Texas held in Galveston, H. & S. A. Ry. Co v. State, 89 Tex. 340, 34 S. W. 746, that, conceding that section 6 of article 10 of the constitution of 1869 did not repeal prior laws granting lands in aid of the defined lie § of existing railroad companies, the section did operate to cut off the right to earn lands by the construction of lines not authorized until after the provision took effect. We have just considered that case, and expressed the opinion that the constitutional provision as thus enforced involved no infraction of the constitution of the United States. 18 Sup. Ct. 603. In the present case the state courts have decided that although the Houston & Texas Central Railway Company may have had the right, under legislation prior to the adoption of the constitution of 1869, to construct a road from its main line to Austin, and to earn lands by such construction, yet that the purchase by the company prior to 1869 of the Washington Railroad, running from Hempstead, on the company's main line, to Brenham, in the direction of Austin, should not be treated as making that road part of the line the company was authorized to build; and that the extension from Brenham to Austin must be held to have been built as an independent line, under the act of August 15, 1870, which having been passed while the constitution of 1869 was in force, the company could not acquire any right to the land grant by the construction of roads between the latter points. The question does not arise in respect of lands for the 25 miles from Hempstead to Brenham, but in respect of lands allowed as earned for the distance from Brenham to Austin, for which the certificates were duly issued, and were located, and which have always prior to this suit been recognized as lands of the company, and have been sold as such.

In other words, the state courts have applied to the road from Brenham to Austin the same rule laid down as to new lines authorized to be constructed, for the first time, after the constitution of 1869 was adopted. We cannot concur in this view, but, on the contrary, are of opinion that the constitutional provision as thus enforced impairs the obligation of the contract between the state and the company, and cannot be sustained.

The Houston & Texas Central Railway Company, then styled the 'Galveston & Red River Railway Company,' was authorized by its act of incorporation, not onlt to construct the main line therein specified, but, by its second section, such branches as it should deem expedient; and by the fourteenth section of the special act of February 14, 1852, eight sections of land were granted to the company for every mile of railroad it should construct, no distinction being made between branch and main lines. By section 2 of the special act of February 7, 1853, the company was empowered 'to make and construct simultaneously with the main railway described in the original acts establishing said company, a branch thereof toward the city of Austin.'

The general act of January 30, 1854, granted to all railroad companies constructing a section of 25 miles or more of railroad, 16 sections of land for every mile of road so constructed and put in running order, though by section 12 it was provided that any company then entitled to a grant of 8 sections of land per mile, which should accept the provisions of the act, should not be entitled to receive the grant thereby made for any branch road. This company was then entitled to 8 sections per mile, but the special act of January 23, 1856, supplementary to the several acts incorporating the company, expressly extended the rights, benefits, and privileges of the general act of January 30, 1854, to the company, subject to certain conditions not material to be enumerated, and with the limitation as to branch lines that the company should 'yield all general branching privileges except such as are expressly granted by the provisions of its charter to certain points,' and requiring it to spend on the branch only the money subscribed for the branch, and on the trunk only the money subscribed therefor.

By section 2 of the original act of incorporation, general branching privileges had been conferred; and by section 2 of the special at of February 7, 1853, express authority to construct a branch to the city of Austin. It would seem plain, then, that section 5 of the act of January 23, 1856, distinctly referred to the right to construct this particular branch, and so preserved it that the benefits of the act of January 30, 1854, were extended to that branch and its construction, and no other. In other words, all branching privileges except for the Austin line were yielded in accepting the benefits of the act of 1854, but as to that expressly authorized branch the right to construct it was preserved with the benefits accorded to its construction. The act of February 4, 1858, repeated the assurance of the benefits of the act of 1854.

But it is said that, by the sixth section of the act of 1856, the right to repeal or modify the act of 1854 was reserved, and that, by the second section of the act of 1858, the benefits of any general law inured only so long as such law remained in force. Rights to lands acquired before such repeal or modification would not, however, be affected thereby, nor is it important to specially discuss the operation of the constitution of 1869 in this regard, as the special act of September 21, 1866, made a specific grant to the company of 'sixteen sections of land of six hundred and forty acres each for every mile of road it has constructed or may construct and put in running order in accordance with the provisions of the charter of said company.' We think that this plainly applied to the construction of the Austin line as well as the main line of the company. It applied to all lines constructed by the company in accordance with the provisions of its charter. And the right to construct the Austin line had been specifically conferred by the special act of February 7, 1853. The general branching privileges which the company possessed under its original act of incorporation it had been required to surrender by the act of 1856, except such as were 'expressly granted by the provisions of its charter to certain points,' and Austin was a point to which the company was expressly authorized to build. So that the Austin branch was one of the lines covered by the charter when the act of September 21, 1866, was passed, and the grant thereby made applied to it; and there was no reservation of a right to repeal or modify the act.

This legislation secured the construction of the branch to Austin, the capital of the state, an obvious necessity, and especially as that important point was then without any line of railway whatever.

Counsel for the state contended that the act granted lands for the construction only of the main line, and not of the Austin line. The last clause of the third section of the act was: 'And said railroad company shall construct their road in the line heretofore prescribed by 'An act for the relief of the Houston and Texas Central Railway Company,' approved February 8, 1861.' The line defined in the act referred to was: 'Provided, said railroad shall run on the nearest and most practicable route from its line at or near Horn Hill to Dresden, in Navarro county, and thence to the town of Dallas, or within one and a half miles of said town, and thence to the terminus of Red river, within fifteen miles of Preston.' Sp. Laws 1861, p. 11.

This fixed the route of the main line by Dresden and Dallas to the vicinity of Preston, instead of Coffee's Station. The route of the Austin line had been provided for by the act of February 7, 1853, and there was evidently no occasion to change it.

But it does not follow that, because of this definition of the main line in the third section, the grant in the first section of the act of September 21, 1866, should be confined to that line.

The company already had a grant of 16 sections per mile for its main line under the general act of January 30, 1854, and there was no controversy over that, nor any need of further legislation in that regard when this act was passed. As to the branch line there might bed ispute, and, furthermore, the right to repeal the grant was reserved in the acts of January, 1856, and February, 1858; and it may well be assumed that the object of the act of September 21, 1866, was to remove any doubt on the subject of the grant for the Austin line, and remove the danger of a possible repeal. We are the more constrained to this conclusion by the language of the subsequent general act of November 13, 1866, 'that all tap roads over 25 miles long shall be entitled to the benefits of this act,' which modified the policy as to branch roads indicated in the act of 1854.

We find, then, that the company was granted by the state, prior to the adoption of the constitution of 1869, 16 sections of land per mile for the construction of the Austin line by the special act of January 23, 1856, and by the special act of September 21, 1866; and the rights of the company to the lands granted were preserved by extensions of time, as occasion required, within which to comply with conditions respecting the rate of construction. By the act of September 1, 1856, the failure of the company to complete the second section of its road within one year after the completion of the first section was waived; again, by the act of February 4, 1858, the company was granted further time in which to complete construction; again, by the act of February 8, 1861, it was given until January 30, 1863, to perform the work required of it; and during the war the laws of January 11, 1862, were passed, extending the time until two years after the close of the war, on the condition that the extension should inure to the benefit of the company only in the event that it should restore the rights of the stockholders which had been foreclosed, which condition was complied with by the company. After this, further time was given by the act of September 21, 1866; again by the act of November 13, 1866; and again by the ordinance of December 23, 1868; and finally by section 4 of the special act of August 15, 1870.

Before the constitution of 1869 was adopted, the company had acquired the Washington County Railroad, and the convention which framed that instrument on August 29, 1868, ratified and confirmed the purchase of that road, and declared that the Washington County Railroad was thereby maed and declared to be a branch of the Houston & Texas Central Railroad, to be controlled and managed by the Houston & Texas Central Railway Company, with the right to extend the road from Brenham to Austin by the most eligible route.

The company had completed and had in operation five sections of 25 miles each of its main line, and, by the acquisition of the Washington County Railroad, had in operation that part of the Austin branch extending from the junction of the main line at Hempstead to Brenham directly towards Austin.

Thus, it is seen that the company had been ranted 16 sections of land per mile for the construction of the Austin branch as well as the main line; that it had accepted the grant, and had commenced to earn it, and had actually acquired the right to enrn it, by the construction of an important part of the line which the state by the grant intended to promote, before the adoption or acceptance of the constitution of 1869. The company had not merely organized and commenced the work it was incorporated to carry on, but had completed a large part of it. It had completed 125 miles of main line prior to June 15, 1869, and manifestly had much more in process of construction, for it appears from the record that several additional sections were completed and put in operation soon after that date. It had also acquired and had in operation that part of the Austin branch extending from the junction at Hempstead to Brenham, a distance of 25 miles, originally constructed by the Washington County Railroad Company, and afterwards purchased by this company.

We do not understand the state courts to have decided that the purchase of the Washington County road was ultra vires, but to have held that the construt ion of the line from Brenham to Austin was an independent enterprise, authorized for the first time by the act of August 15, 1870; and, being a new and additional line, no land grant could be claimed for it, because the constitutional provision was then in force.

In our opinion, however, if the Washington County road was lawfully acquired by the Houston & Texas Central Railway in 1868, it became as much a part of the Austin branch as if it had been constructed by the company, and its subsequent completion to Austin placed that part of the line from Brenham to Austin in the same situation as if the entire line from Hempstead to Austin had been in fact so constructed. And this would have been so if the company had built 95 miles from Hempstead towards Austin, and then lawfully obtained 25 miles of existing road to complete the branch. Of course, the company was not entitled to land grant for the 25 miles from Hempstead to Brenham, nor is any such claim made, but that 25 miles became by the purchase a part of the branch with like effect as if originally part of it; and to treat the completion of the branch as a new and independent enterprise we cannot but regard as inadmissible in view of the facts, for this 25 miles had been purchased, was controlled and operated, and existed as a part of the company's Austin branch in fact.

The Houston Company and the Washington Company were both endowed with the capacity to make contracts, and generally to do and perform all such acts as might be necessary and proper for or incident to the fulfillment of their obligations. Act March 11, 1848, § 1 (Sp. Laws 1848, p. 370); Act Feb. 2, 1856, § 2 (Sp. Laws 1856, p. 49). They were both required to afford the public the advantages of a continuous line. Act Feb. 14, 1852, § 9 (Sp. Laws 1852, p. 142); Act Feb. 2, 1856, § 12 (Sp. Laws 1856, p. 49). The acquisition of the Washington road was in accomplishment of the object of securing a line to the capital, and was not in contravention of the general intention of the legislature. The ordinances of the convention in terms ratified the transaction, and reiterated the previous authority to extent to Austin. These ordinances are part of the history of the case, and reference to them, in connection with the alleged scope of the particular provision of the constitution framed by that convention, and submitted to the vote of the people, may not improperly be made. In Quinlan v. Railway Co., 89 Tex. 356, 34 S. W. 738, it was held that a convention called to frame a constitution to be submitted to a popular vote cannot pass ordinances and give them validity without submitting them to the people for ratification as part of the constitution.

These ordinances were not so submitted, and we are not called on to express any opinion as to whether, in view of the anomalous circumstances under which this particular convention met, the previous decisions of the supreme court of the state, or any other considerations, they, or either of them, could be regarded as valid.

For, irrespective of that, the act of August 15, 1870, expressly recognized and ratified the purchase of the Washington Railroad, and the state could not deny the validity of that which it had expressly validated, if otherwise open to question.

In Railroad Co. v. Cowdrey, 11 Wall. 459, referring to a mortgage executed by a railroad company in Texas when there was no statute of that state expressly authorizing railroad companies to mortgage their roads as such, Mr. Justice Bradley, speaking for this court, said: 'Without examining how far the operative effect of a mortgage executed by a railroad company upon its road, works, and franchises may extend per se, without statutory aid, it is sufficient to say that, in our opinion, the legislature of Texas has validated the mortgages, and given them the effect which, by their terms, they were intended to have.'

It appears to us that this purchase comes within the rule thus expressed, and that, if there had originally ben objection, it was technical merely, and removed by the act of 1870.

Now, the latter act authorized no new line, nor made any new grant of lands to which no previous right existed, nor restored lands which had been forfeited. If ground of forfeiture had accrued by reason of failure to complete as rapidly as required, it had not been enforced, and, if outstanding, was waived by the act.

If there had been a failure to construct in time, so that a forfeiture would have been justified, no such forfeiture was declared by any judicial proceeding, or by any legislative action equivalent to office found. Railroad Co. v. McGee, 115 U.S. 469, 6 Sup. Ct. 123; Bybee v. Railroad Co., 139 U.S. 663, 11 Sup. Ct. 641; Galveston, H. & S. A. Ry. Co. v. State, 81 Tex. 572, 17 S. W. 67.

And the executive officers of the state, charged with the administration of the laws granting lands to railroads, and vested with jurisdiction to determine the facts, had ascertained and determined the facts here, and issued the certificates because, in their judgment, the road had been completed in accordance with the law.

No argument was made that any ground of forfeiture could be availed of in the case, nor was any such point ruled by the court of civil appeals, or by the supreme court.

The judgment of the court of civil appeals may have been rested in part on the view that the constitution of 1869 repealed all laws granting lands to railroad companies, regardless of the acceptance of such laws and the construction of the lines of road thereunder.

The supreme court proceeded on the ground that the road from Brenham to Austin was not authorized until after 1869, and fell into the category of a new line, and therefore the company had no right to the land grant.

From what we have said, it will be perceived that we are unable to accede to either of these propositions.

In our opinion, it results from the legislation and the facts that the company had the right to construct the line to Austin, and earn 16 sections per mile by so doing, prior to 1869; that by the acceptance of its charter and the subsequent legislation, and by the completion of an important part of its road before the adoption of the constitution of 1869, the company had acquired a vested right to the land grant; that the purchase of the Washington County road must be regarded as valid, and that thereby that road became part of the Austin line, in operation as such before 1869; that the extension of the branch from Brenham to Austin cannot properly be treated as a new and independent line; and that there, therefore, was a contract between the state and the company in respect of lands earned by the construction thereof.

It follows that section 6 of article 10 of the constitution of Texas, as given effect by the state courts, impairs the obligation of the contract, and deprives the company of its property without due process of law.

Argument was also urged on behalf of defendant in error that the particular lands sued for are situated in what is known as the 'Pacific Reservation,' being a reservation for the benefit of the Texas & Pacific Railway Company, created by a special act of May 2, 1873, and hence that, though the certificates were valid, they were not located, as the law required, on unappropriated public domain.

This question was not determined by either of the appellate tribunals, but, on the contrary, their judgments rested distinctly on the invalidity of the certificates for reasons involving the disposition of federal questions. We must decline to enter on an examination of the controversy now suggested on this point.

The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.