Houston & B. v. Ry. Co. v. Hughes

182 S.W. 23
CourtCourt of Appeals of Texas
DecidedDecember 14, 1915
DocketNo. 7209.
StatusPublished
Cited by8 cases

This text of 182 S.W. 23 (Houston & B. v. Ry. Co. v. Hughes) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houston & B. v. Ry. Co. v. Hughes, 182 S.W. 23 (Tex. Ct. App. 1915).

Opinion

McMEANS, J.

On October 27, 1915, Ed. S. Hughes brought this suit against the Houston & Brazos Valley Railway Company, praying for the immediate appointment of a receiver to take charge of all the properties, rights, and franchises of appellant, and his petition was presented to the honorable judge of the district court of Brazoria county in chambers and in vacation. On the same date, and upon ex parte hearing without notice to the defendant, the judge made an order in said cause appointing II. O. Wooten receiver of the defendant and all its properties, rights, and franchises of every kind, character, and description, directing that all persons in possession of any property of defendant should forthwith deliver the same to the receiver, and restraining all persons from interfering with the possession and use thereof, or with the taking possession of said properties. From this order and judgment, the defendant has appealed.

The appellant in its brief has undertaken to set out the substance of the material allegations in the plaintiff’s petition, as well as the exhibits attached to and made a part, thereof, and, as this seems to have been correctly dono, and as no objection thereto is urged by plaintiff, we adopt the same as our statement of the material allegations of the petition.

(1) The first paragraph merely alleges the residence of the parties. The second paragraph alleges that appellee is the owner of 205 of the first mortgage bonds of appellant of the denomination and par value of $1,-000 each, dated July 1, 1907, payable July 1, 1937, with interest at the rate of 5 per cent, per annum, interest payable semiannually on the 1st day of July and on the 1st day of January of each year, that said bonds are of the aggregate value of $205,000, and that to secure and insure the payment thereof the defendant on July 1, 1907, made, executed, and delivered to Mercantile Trust Company of St. Louis, Mo., as trustee, its deed of trust mortgage upon all of the properties, rights, and franchises of the defendant railway company of every kind, character, and description whatsoever and wheresoever situated. The paragraph further describes said properties more in detail, and the petition refers to the said deed of trust mortgage and incorporates it in the petition. This exhibit is attached to the petition, and will be more particularly referred to in this statement.

(2) The third paragraph of plaintiff’s petition alleges that the bonds are secured by first mortgage lien notes upon the properties of defendant, and that the payment of £he bonds and the interest thereon is dependent upon the earnings and upon the successful operation and maintenance of the railroad and its properties.

(3) The fourth paragraph of the plaintiff’s petition alleges that defendant is insolvent, that its present earnings are not sufficient to pay its operating expenses, and that for the past year or more the operating expenses have exceeded its earnings from $800 to $1,-500 per month, and that plaintiff fears:

“That, if the operation is permitted to be continued by the defendant railway company under its present management, the expenses will continue to exceed the earnings.”

(4) The same paragraph of plaintiff’s petition further alleges that the alleged insolvent condition of defendant is due to the extravagance and mismanagement in the operation of the same, in that it has an excessive number of employes and pays excessive prices for its supplies and materials, and purchases inferior material and uses a great portion of its *25 earnings for the construction of additional facilities not justified by the traffic, in that said facilities are more than ample to take care of the traffic that may be reasonably expected for several years.

(5) The fifth paragraph of plaintiffs petition alleges that defendant has borrowed from time to time large sums of money to meet and pay obligations incurred by it by reason of its extravagance and mismanagement, and that it is indebted for moneys borrowed and advanced to it and material furnished to it, and is without funds with which to pay the same; that said indebtedness is increasing, and defendant cannot now secure further loans and advances to pay the current operating expenses; that the persons who have heretofore been making advances and loans to defendant have advised plaintiff that they will not continue to do so.

(6) The sixth paragraph of plaintiff’s petition reads as follows:

“Plaintiff alleges that he fears, and has reason to believe, that if the properties of said railway company are permitted to remain in the control and operation of its present management that it will be so mismanaged and so extravagantly operated, and not having funds with which to meet same, as hereinbefore alleged, that large debts will accumulate against the properties of said railway company, including debts for wages and personal services, material furnished, and accounts of other railroads accumulate against it, all of which will create a prior lien upon the properties of said railway company, and will accumulate to such an amount as to materially injure, if not totally destroy, the value of plaintiff’s bonds; that said railway company has not heretofore, and is not now, making any effort whatever, on account of the mismanagement and extravagance of the operation thereof, to pay, and has been unable to pay, the interest out of the earnings of said road on said bonds, and has not and is unable to create any sinking fund with which to eventually redeem said outstanding bonds when same mature, and, if they are permitted to continue to manage and operate same, that no provision will or can be made for the payment of said interest, or create a sinking fund for the ultimate redemption of said bonds at maturity, and that, therefore, by reason of the facts herein alleged, unless a receivership is granted herein and the properties of said railway company taken out of the hands of the present management, that plaintiff will suffer irreparable injury; that plaintiff has no adequate remedy at law.”

(7) The seventh paragraph of plaintiff’s petition reads as follows:

“And in this behalf plaintiff further shows to the court that it is necessary and imperative that your honor immediately appoint a receiver to take charge of and operate the properties of the defendant railway company, to prevent the present management from contracting for further additional and unnecessary materials, and thereby further increasing the indebtedness of said company, and impairing and injuring the properties of said company as security to plaintiff’s bonds, and for the further reason that the persons owning the balance of the first mortgage bonds of said company, to wit, $215,000, and upon which default has been made in the payment of the interest due thereon, are nonresidents of the state of Texas, and are threatening to immediately file a petition in another jurisdiction asking that the properties of the defendant company be placed in the hands of a receiver, and in this behalf plaintiff shows that all of the properties of the defendant railway company are located in Brazoria county, Tex., that the greatest number of creditors of said company reside in Brazoria county, Tex., and that the management and operation of the defendant railway company can be • best, most conveniently, and most economically managed and operated by and under the order of this court.”

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Bluebook (online)
182 S.W. 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houston-b-v-ry-co-v-hughes-texapp-1915.