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Opinion of the Court.
this court expended, to be taxed, and that execution issue therefor."
On the first day of February, 1897, the following motion was filed: "Now come the defendants in error in the above entitled cause and move the court to set aside the entry heretofore made in said cause on the 11th day of August, 1896, as the same appears upon page 388 of the records of said court in Record B, page 388, and to enter nunc pro tune in place of said entry an order granting to the appellees in said cause a rehearing, and also that the court set aside the judgment of reversal in said cause on the 18th day of December, 1896, as the same appears upon page 464 of Record B of the minutes and records of said court, and enter in lieu thereof an order affirming the judgment of the court below, and for grounds of said motion the said appellees show to the court that a rehearing was granted in said cause, and said cause re-argued and taken under advisement by the court and afterwards decided by a divided court, two of the members sitting in said cause being in favor of reversal and two in favor of affirmation, which entry in legal effect results in the affirmation of the judgment of the court below.”
This motion was overruled March 1, 1897, in these terms: "This cause having been submitted on motion to amend the record and make an entry nunc pro tunc granting the defendants in error a rehearing on a former day of this term, the court announces its decision by Chief Justice Smith, the associate justices concurring, denying said motion. It is therefore considered and adjudged by the court that the motion to amend the record and to make an entry nunc pro tunc be, and the same hereby is, denied." Thereupon the case was brought to this court on writ of error and also on appeal.
The contention of plaintiff in error is that a rehearing was granted, and that, as the court was equally divided on such alleged rehearing, the judgment of the district court was affirmed. We are of opinion, however, that, in the light of the various orders of the Supreme Court, although that of December 18 was somewhat obscurely worded, a rehearing was not granted, but that the motion for rehearing was permitted to be argued, and as that was heard before four of the VOL. CLXXVII-5
judges of the court and there was an equal division, it was denied. Had this been otherwise, the court would not have unanimously overruled the motion to amend the record so as to make it appear that a rehearing had actually been granted. Moreover counsel agree that under the rules of the court a rehearing could not be granted unless one of the justices who concurred in the judgment so desired, and a majority of the court so determined, and that this was also true of permission to argue such application. It is evident that oral argument was allowed, and it also appears that no justice who concurred in the judgment desired a rehearing, and that a majority of the court did not determine to grant it.
The judgment of reversal therefore stood, and
As it was not a final judgment, the writ of error and the appeal must be dismissed, and it is so ordered.
HOUSTON AND TEXAS CENTRAL RAILROAD COMPANY v. TEXAS.
ERROR TO THE COURT OF CIVIL APPEALS FOR THE THIRD SUPREME JUDICIAL DISTRICT OF THE STATE OF TEXAS.
No. 81. Argued December 13, 14, 15, 1899.-Decided March 26, 1900.
The Federal character of a suit must appear in the plaintiff's own statement of his claim, and where a defence has been interposed, the reply to which brings out matters of a Federal nature, those matters thus brought out by the plaintiff do not form a part of his cause of action.
The treasury warrants in question in this case cannot be said upon the evidence to have violated the Constitution of the United States, or of the State of Texas.
A warrant, drawn by the authorities of a State in payment of an appropriation made by the legislature, payable upon presentation if there be funds in the treasury, and issued to an individual in payment of a debt of the State to him, cannot be properly called a bill of credit, or a treasury warrant intended to circulate as money.
A deliberate intention on the part of a legislative body to violate the organic law of the State under which it exists, and to which the members have sworn obedience, is not to be lightly indulged; and it cannot prop
Statement of the Case.
erly be held that the receipt of the warrants issued in pursuance of legislative authority in Texas, and in payment of an indebtedness due the State from the individual paying them, is an illegal transaction, and amounts in law to no payment whatever.
When a municipality contracts for a municipal improvement, which it is within its power to agree for, and engages to pay for the same in bonds which it is beyond its power to issue, and the work so contracted for is done, the municipality is responsible for it in money as it cannot pay in bonds.
Where the validity of a contract is attacked on the ground of its illegal purpose, that purpose must clearly appear, and it will not be inferred simply because the performance of the contract might result in an aid to an illegal transaction.
On the principles laid down in Baldy v. Hunter, 171 U. S. 388, the contract in this case cannot be held to be unlawful.
When the officers of the State, pursuant to its statutes, received warrants as payment, they acted for the State in carrying out an offer on its part which the State had legal capacity to make and to carry out; and the contract having been fully executed by the company and the State, neither party having chosen to refuse to perform its terms, neither party, as between themselves can thereafter act as if the contract had not been performed.
THIS proceeding was commenced by the State of Texas against the defendant, the Houston and Texas Central Railroad Company, (hereafter called the company,) to recover the amount due on certain bonds issued to the State, and to foreclose the lien which existed upon its property as security for the payment of such bonds. The company is the legal successor of the two companies which received the loans and gave their bonds, and no question of liability arises on that ground. Judgment was given in the trial court for the amount found due, and a lien was declared and a sale of the property of the company ordered. From this judgment the company appealed to the Court of Civil Appeals for the State, where it was modified, and then affirmed. The company brings the case here on writ of error.
The petition of the State by which the proceeding was commenced showed that the predecessors of the plaintiff in error borrowed money from the school fund of the State and gave their bonds therefor. These bonds were not paid according to their tenor and effect, and the legislature therefore, on August 13, 1870, passed a general act for the relief of railroad
Statement of the Case.
companies indebted to the State, by which it was provided that if any company should on the first day of November, 1870, pay six months' interest on the aggregate amount of the loan, which, on the first day of May, 1870, was due from it to the State, and one per centum of the principal, and thereafter should make similar semi-annual payments, the State would not exact any other payments.
(What was the aggregate amount of the loans due on the first of May, 1870, from the two companies of which the present company is the successor, is the question in controversy, and its answer depends upon the validity of certain payments made by the companies to the State in treasury warrants during the Part of the discussion rests upon the meaning and effect of this act, and it is, therefore, given in full in the margin.)1
1 An act for the relief of railroad companies indebted to the State for loans from the Special School Fund.
Whereas, the political disturbances since the year 1860, by unsettling the business of the country, have largely contributed to prevent compliance on the part of railroad companies indebted to the State for loans from the special school fund, with their engagements respecting the payment of the principal and interest of said loans; and,
Whereas, it is desired to relieve said companies from the liability of their railroads to sale consequent upon their non-compliance as aforesaid: Therefore,
SEC. 1. Be it enacted by the Legislature of the State of Texas, That any railroad company indebted to the State for loans from the special school fund may avoid the sale of its railroad for the non-payment of principal or interest by the payment into the treasury of the State, on the first day of November, A. D. 1870, of six months' interest on the aggregate amount due on account of said loans, principal and interest, as said aggregate amount stood on the first day of May, A. D. 1870, and by the payment, in addition, on said first day of November of one per cent. upon said aggregate amount, to be applied toward the sinking fund provided for by existing laws in respect to said loans, and by continuing to pay into the treasury of the State six months' interest, and one per cent, on account of said sinking fund semiannually thereafter, to wit, on the first day of May and November in each year.
SEC. 2. That if any railroad company shall fail to pay any amount required to be paid in section one of this act at the time designated thereby, or within ten days thereafter, then the whole debt of such company, principal and interest, shall become due, and the governor shall proceed without delay to cause the railroad of said company and its franchises and property, so
Statement of the Case.
Subsequently, semi-annual payments of interest and sinking fund were made by or on account of the Washington County Railroad Company, (one of the predecessors of the plaintiff in error,) up to and including the first of May, 1879, but no payment was made on November 1, 1879, or at any time thereafter. Similar payments were made by or on account of the Houston and Texas Central Railway Company (the other of such predecessors) up to and including the first day of May, 1893, but a portion only of the semi-annual interest claimed to be due in November, 1893, was paid, and nothing has been paid since November, 1, 1893. Judgment was prayed for the sums of money stated to be due with interest, for the foreclosure of the lien and for a sale of the property under execution, the proceeds to be applied to the payment of the sum due with interest, and for such other relief as might be necessary.
To this petition the defendant filed an answer, and therein among other things alleged that after the commencement of the civil war the various railroad companies were unable to fulfil their obligations to the State, and therefore the legislature of Texas, on the eleventh day of January, 1862, passed an act for their relief, extending the time of payment of interest and sinking fund amounts until the first of January, 1864.
far as the lien or mortgage of the State covers the same, to be sold, the sale to be in all respects (when not in conflict with this act) conducted according to the provisions of the statute of August 13, A. D. 1856: Provided, however, That in case the governor should (for the protection of the school fund) deem it necessary, he may buy in any road to be sold under this act, in the name of the State: Provided, further, That if the whole principal and interest which may become due as aforesaid, and all costs attending the advertisements and proposed sale, shall be paid before the day of sale, then the proceedings for sale shall be stopped.
SEC. 3. That the State of Texas will not exact of any railroad company not hereafter in default in respect to any of the payments required in this act the payment of the principal of the debt of said company, excepting said payments on account of the sinking fund as aforesaid, but that any company may pay the same in full at any time on thirty days' notice to the governor, and that said lien or mortgage of the State shall not attach to any extension of its existing road hereafter constructed by any of said companies.
SEC. 4. That this act shall take effect from and after its passage.