Petition for a Writ of Certiorari — Texas v. Group of Institutional Investors

IN THE

Supreme Court of the United States

OCTOBER TERM, 1951

416

NO.

STATE OF TEXAS,

3 Petitioner

= vs.

_ GROUP OF _ INSTITUTIONAL INVESTORS HOLDING

_ FIRST AND REFUNDING MORTGAGE 5% BONDS OF

___- MISSOURI PACIFIC RAILROAD COMPANY, ET AL.,

4 Respondents

SE

4

‘eS

Bae)

3

seh

sit

aS

Saw

ref

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE EIGHTH CIR-

CUIT AND BRIEF IN SUPPORT THEREOF.

Prick DANTEL

Attorney General of Texas

C. K. RicHarps

Assistant Attorney General

Counsel for Petitioner

INDEX

SUBJECT INDEX

Pages

Petition for writ of certiorari:

Summary statement of matter involved............ 1-6

Statement as to jurisdiction...................... 6-7

Questions of Federal law which have not been but

which should be settled by this Court............ 7-8

The questions presented..................0000000. 8-9

Reasons relied on for allowance of the writ........ 9-13

POE 6h 04 ewe as CANE G ROC CEES FoR oR eS hkdkeiwen 13-14

Brief in support of petition for certiorari:

rte Oe SOUT III sv iv ha de Veh vcucedccaccics 15

i | ee 15

ee. ee 15-16

Sumenery of arg“umiont. ...... 6. ccc cccccecccces: 16-17

SE doh ecek ont as cet Swhatecie me 17

(1) The power to exercise the right of eminent

domain to secure railroad rights-of-way over

the public lands and highways of a sovereign

State in violation of the Constitution and

laws thereof cannot be granted to a foreign

railroad corporation as a federally delegated

power under the provisions of Section 77 of

We TI BR oes oe cn ks bes knees 17-21

(2) Where easements for railroad rights-of-way

over the public lands and highways of a sov-

ereign State, granted to domestic railroad

companies under the Constitution and laws of

that State, revert to the sovereignty upon the

breach of a condition subsequent, neither the

Interstate Commerce Commission nor the Dis-

trict Court in proceedings for reorganization

of such railroads under the provisions of Sec-

tion 77 of the Bankruptcy Act can authorize

the convéyance of the legal title to or the use

of such easements for rights-of-way to the

reorganized foreign railroad corporation..... 21-26

RENT Ete ENE VARIN A Peri. t) ME 26-27

SII 5 Sak niu wah oes uk ba eee eee 28-31

tone

INDEX—Continued

TABLE OF CASES CITED

REPORTS CITED

Pages

Amaya v. Stanolind Oil & Gas Co., 62 F. Supp. 181,

aff’d. 158 F. 2d 554, cert. den. 331 U.S. 308........ 23

Brightwell v. I. & G. N. R. Co., 121 Tex. 338, 49 S.W.

ee aca os insane beau heen ees 25

Caleasieu Lumber Co. v. Harris, 77 Tex. 18, 13 S.W.

ee ee cain ei ah censor ne 25

California v. Central Pacific R. R. Co., 127 U.S. 1....9, 10, 18

Calloway v. Benton, 336 U.S. 132.................. 6,9, 18

Cherokee Nation v. Kansas R. R. Co., 135 U.S. 641.... 18

oo ee er ee eee 23

East Line & Red River Ry. Co. v. Texas, 75 Tex. 434,

ey ea eae ag dalke sk wun eee waa Kes 25

Evansville & Henderson Traction Co. v. Henderson

A nc nc cdchnedueen sinwaa dbs 18

Fort Worth & D. C. Ry. Co. v. Ammons, 215 S.W.

ee ee AU ola Waa eemne ee een bh kae ne 19

In Missouri Pacific Railroad Company Unification, 166

RE i Slee Ang ea Soe aR eee Raine 3

In Missouri Pacific Railroad Company Unification, 175

EE Nadas ad gen enbe te maes Caan ek eeee es 3

In Re Missouri Pacific Railroad Company, 39 F. Supp.

Saab Gad Ree Re Oke k ewan ceae ens 3

In Re Missouri Pacific Railroad Company, 50 F. Supp.

ee han aa Sate ee aA ee Reed aoe 0% 3

In Re Missouri Pacific Railroad Company, 64 F. Supp.

MD cpiaink aud valk s VEU SEN AR ed en ASN KC adhabewaens 3,4

In Re Missouri Pacific Railroad Company, 93 F. Supp.

Pt (lia ted see et Gen uaabdade eee eine sees 3

International-Great Northern Ry. Co. v. Anderson

County, 174 S.W. 305, aff. 206 U.S. 424............ 3

Interstate Com. Comm. v. Louisville & Nashville R. Co.,

Dt. eh lialicn Nee eke the Gewwakhwdwes hes 26

Kenedy Pasture Co. v. State of Texas, 111 Tex. 200,

EE fc the Geen WES wala aia see nee ones 23

ped RS BERN ae PB Ids ae hae he Bias AGN MED

EEE — rs

INDEX—Continued

Pages

Kynerd v. Hulen, 5 F. 2d 160, 5 Cir., cert. den., 269

BE OD vn ca bccn cdc eecinnaecesusecseecnseres 25

Missouri Pacific Railroad Co. Reorganization, 239

SO civ cadens donscnwnsesdws ceseesnccces 3

Missouri Pacific Railroad Co. Reorganization, 257

oe See eer rt er 4

Missouri Pacific Railroad Co. Reorganization, 257

OP iy A ny Perr ee eee 4

Railway Express Co. v. Virginia, 282 if a | er 5

Right-of-Way Oil Co. v. Gladys City 0. G. & M. C.,

106 Tex. 94, 157 S.W. 737.......-- ee eee eee eee 25

Schwabacher v. United States, 334 U.S. 182.......--- 13

Seaboard Airline Ry. Co. v. Daniel, 333 U.S. 8... . 1G, 1, 37

State v. Jadwin, 85 S.W. 490... .....--- ee cree renee 23

Stearns v. Minnesota, 179 U.S. 223.......-++-++005: 23

St. Louis & S. F. R. Co. v. Foltz, 52 Fed. 627.......... 18

Texas Central Railroad Co. v. Bowman, 97 Tex. 417,

ee err rer eee tet ee eo 24

Texas & New Orleans RR Co. v. Schoenfeld, 136 Tex.

173, 146 S.W. 2d 724.....--. cece cece ee ee eee eens 19

Texas & Pacific RR Co. v. State, 142 Tex. 482, 78 S.W.

2d 580, affirming 52 S.W. 2d 957, cert. den. 296 U.S.

ES eo ey Ser eee ee eee ee ee ee 12, 24

United States v. Texas, 339 U.S. T07.....---- ee eee 23

Western Union Tel. Co. v. Penn. RR Co. 195 U.S. 540.. 18

STATUTES CITED

Constitution of the United States, Art. I, Sec. 8,

0 OE er ee ree eee ee ee ee 10

Constitution of the United States, Art. VI.........-- 8,12

Constitution of the United States, Amendment V...... 8,12

Constitution of the United States, Amendment X..... 8,12

Constitution of Texas, Art. X, Sec. 1......------+-55 22

Constitution of Texas, Art. X, Sec. 2.......---+++++-5 22

Constitution of Texas, Art. X, Sec? 6.......-----+++- 22, 25

U.S.C.A., Title 11, Sec. 47(c)...... RE Seana a a wiageha ee 6

U.S.C.A., Title 11, Sec. 205..........ee eee ee reece 6,9

pa BOE RIE oe Hace Ge

BEM. cag BA

a Ree I te EEL I ae

INDEX—Continued

US.C.A., Title 28, See. 1254 (1).............0.000.

aA SUN SI Dek exe wensccdesscdbaceaauas

Revised Civil Statutes of Texas (Vernon's Civil Stat-

utes (1948 Ed.) Vol. 1)

ee eh dae ak Cae eee ee eee ha eee 11, 25

RL A ae a Pe ee 11, 25

gt a Se ae ne Up PRPS yeh 22, 25

ass cb waka tk Rade & ROEM LACES ee 25

ae Ura ox aes EN Oe Pea ea Rie eee ee 20

EN Gard och gic oe suain as Kae aera 20

ES ea aa 4 a hh Wee eh Mea ea ae wk Oe eS 22

Ernie as oWAS KG shed ASO E Re ROS 20

a hd at eta ae ula hele eaeaew 20, 22

EE err re reer rT ree eee 20, 22

EE ech ree hs a kbs te deuce een sed ticks 20

I i i i a a i 12, 22, 25

ST <ee ea wateh baa koe ke sdek dba dee anes 22

9 U. S. Statutes at Large, 108...................05. 23

Acts Ist Tex. Leg., 1846, 155..................05.- 23

Gammel’s Laws of Texas, 1200..................... 12, 23

8 Opinions of Attorney General of United States, 333. . 23

em ter hee

, , — sso

IN THE

Supreme Court of the United States

OCTOBER TERM, 1951

NO.

STATE OF TEXAS,

Petitioner

vs.

GROUP OF INSTITUTIONAL INVESTORS HOLDING

FIRST AND REFUNDING MORTGAGE 5‘. BONDS OF

MISSOURI PACIFIC RAILROAD COMPANY, ET AL.,

Respondents

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE EIGHTH CIR-

CUIT AND BRIEF IN SUPPORT THEREOF.

To the Honorable Supreme Court of the United States

and the Honorable Chicf Justice and Associate Jus-

tices of Said Court:

The Petitioner, the State of Texas, respectfully

shows to this Honorable Court:

I.

SUMMARY STATEMENT OF THE MATTER

INVOLVED

This is an appeal by the State of Texas from Order

No. 3571 of the United States Distriet Court for the

Eastern District of Missouri, entered October 3, 1950,

in Cause No, 6935, In the Matter of Missouri Pacific

a an

Railroad Company, Debtor, approving that part of

the Plan of Reorganization of the principal debtor

which provides that the properties of the Lniternation-

al-Great Northern Railroad Company and 13. other

subsidiary railroad company debtors, all chartered wn-

der the laws of the State of Texas, shall be merged or

consolidated by transfer of the assets and properties

of all such companies to a new or reorganized com-

pany, not incorporated under the laws of the State of

Texas, which transfer may be effected by a merger,

consolidation, transfer of assets, and or any other

; means approved by the Reorganization Managers.

; (DR 28692-28693. ) '

4

4

This proceeding was originally instituted by the

i principal debtor on Mareh 31, 1933. Thereafter, the |

; 14 Texas subsidiary railroad company debtors filed |

similar petitions therein. The system Plan of Reor-

ganization, as approved, was submitted by the Inter-

state Commerce Commission on August 2, 1949 in its

4th Supplemental Report, and, after further hearing,

in its 5th Supplemental Report and order of Decem-

ber 29, 149. (DR 28459-28760.) The plan contem-

plates the reorganization of these companies as a sin-

gle new system company with a provision for the

separate reorganization of the International-Great

Northern Railroad Company if that should be neces:

sary. The opinion of the Distriet Court upon the aap

ete pal ina Laden ae

‘Abbreviations referring to Record are: DR refers to that

part of Vol. 52 of the District Court Record, Cause No. 6935,

containing the 4th and 5th Supplemental Reports and 5th

Supplemental Order of the Interstate Commerce Commission

in Finance Docket No. 9918; TR refers to the printed record

in Appeal No. 14,256 in the Court of Appeals; R refers to the

printed record in Appeals Nos. 14,264-14,274 in the Court of

: Appeals; and CR refers to the record of proceedings in the

Court of Appeals.

proved plan, which is reported in 93 F. Supp. 832,

referred to the Court’s previous opinions concerning

earlier plans of reorganization of the same railroads

reported in 39 FB. Supp. 436, in 50°F. Supp. 936, and

in 64 Ff. Supp. 64, which opinions set forth the rela-

tions of the Missouri Pacific Railroad Company to its

subsidiaries, the course of the reorganization proceed-

ings, and the questions, contentions, and rulings.

In approving the first plan of rcorganization which

was submitted to the District Court in 1940, and bas-

ing its findings in part on its previous findings in

Missouri: Pacific Railroad Company Unification, 166

LC.C. 154 (1930) and 175 LC.C. 26 (1931), the Inter-

state Commerce Commission held that there should be

an entire merger and consolidation of all system prop-

erties, including the International-Great Northern

Railroad Company and the 13 other Texas subsidiary

railroad companies. (Missouri Pacific Railroad Co.

Reorganization, 239 LCL. 7, 82-87.)

In approving the plan on June 20, 1941, the District

Court found that the plan was defective insofar as it

required consolidation and merger of the propertie-

of all of the Texas debtor companies in the absenee of

some modification of the deeree in the suit stvled 7.

G.N. Railway Company ve Anderson County, et al.,

(Tex, Civ. App. 1914), 174 S.W. 325, affirmed 206

US. 424. (39 FL Supp. 486, 448, 449.) The plan, as

modified and approved by the Court, was appealed to

the Court of Appeals for the Eighth Cireuit and by

it remanded on May 8, 1943 to the District Court and

by the Distriet Court referred back to the Interstate

Commerce Commission for further proceedings. (50

F. Supp. 936, 937, 943. )

a

eae em

After receiving the plan of reorganization back from

the Court, the Interstate Commerce Commission held

hearings and in its order of October 9, 1944 (Missouri

Pacific Railroad Co. Reorganization, 257 LC.C. 479

and 257 L.C.C. 745) ultimately approved, with certain

alterations, a plan known as the *‘compromise’” plan,

which was still substantially the plan as to consolida-

tion or merger of the subsidiary debtors previously

approved by the District Court in 1941.

After having been approved by the District Court,

(ln re Missouri Pacific Railroad, 64 F. Supp. 64, 68),

the ‘compromise’? plan was returned to the Interstate

Commerce Commission because the Commission filed

with the Circuit Court of Appeals a memorandum

indicating that the proposed plan had become obsolete

beeause of substantial debt retirements and large ac-

cumulations of cash which had resulted from war carn-

ings. (TR 88.)

On October 28, 1948, the Interstate Commerce Com-

mission issued the 4th Supplemental Report in’ Fi-

nance Docket No. 9918, proposed by Ralph H. Jewell,

ixaminer, which recommended that the protest of the

State of Texas be rejected except as to its objection to

the consolidation of the properties of the Internation-

al-Great Northern Railroad Company with the reor-

ganized company, the recommendation being that in

this respect there be no modification of the provisions

of the previous plan. (TR 8-11.) On December 6, 1948,

the State of Texas filed its exceptions to the proposed

report, specifically excepting to the dissolution and

merger or consolidation of the subsidiary railroad com-

pany debtors forming part of the Missouri Pacific

System which were incorporated under the laws of the

State of Texas and operating in Texas in intrastate

=

ecommerce, contending (1) that under the Constitution

and laws of the State of Texas no foreign railroad

carrier can receive a permit from the State to operate

within the State in intrastate commerce; (2) that the

legal principles in Seaboard Airline Railway Receiv-

ership (261 L.C.C., 689, 718) are not applicable in that

the provisions of the Constitution and laws of South

Carolina are not the same as the provisions of the

Constitution and laws of Texas; (3) that the decision

in the South Carolina case is not controlling in the

present proceedings because such proceedings were

under Section 5 of the Interstate Commerce Act, as

amended, and not under Section 77 of the Bankruptcy

Act; (4) that the proposed consolidation or merger is

an attempt to set aside or overrule the principles of

law enunciated by the United States Supreme Court

in Railway Express Company v. Virginia, 282 U.S.

440; and (5) that the proposed merger constitutes a

violation of the Fifth and Tenth Amendments to the

Constitution of the United States insofar as it at-

tempts to authorize the use of the public highways of

the State of Texas by the reorganized company as a

foreign corporation or to grant to the reorganized

company the title to and the right te use the rights-

of-way acquired by condemnation proceedings by each

of the 14 Texas subsidiary railroad debtors under the

laws of the State of Texas. (TR 11-15.)

On August 2, 1949, the Interstate Commerce Com-

mission issued its 4th Supplemental Report and Order

in Finance Docket No. 9918, in which it specifically

overruled the contentions of the State of Texas, Nos.

1 to 4, inclusive, supra; did not discuss or specifically

rule upon contention No. 5, supra, and reaffirmed with-

out modification the finding concerning separate in-

ron

FRCL

poe

Pais, ou

corporation of the Pnternational-Great Northern Rail-

road Company contained in its previous plan. CDR

YSOTS-28018.) Commissioner Splawn filed a separate

opinion coneurring in part with the majority opinion

hut dissenting vigorously as to the findings of the mia-

jority on the contentions of the State of Texas. (DR

PSOU-2SO5. )

On December YO, 1919, the Tnterstate Commerce

Comunission entered its oth Supplemental Report and

Order in Finance Doeket No. 99718, and again over-

ruled the contentions of the State of Texas (DR 28647-

YSHon), Commissioner Splawn dissenting (DR 28685).

On Mareh 27, 1990, the Distriet Court proceeded to

hear oral argument on the objections of the State of

Texas CPR 65-85), and on July 29, 1950, rendered its

opinion overruling each and every objection of the

State of Texas (TR 111, 116).

On August 14, 1950, the United States Court. of

Appeals for the Eighth Circuit affirmed the judgment

of the trial court. (CR 14-36.)

Il.

STATEMENT AS TO JURISDICTION

(1) The date of the judgment of the Court of Ap-

peals, Mighth Circuit, sought to be reviewed is August

14, 1948 (CR 14), and the opinion of the Court (CR

14-36) is reported in 191 BF. 2d 265,

(2) The Court of Appeals has decided an important

question of general law in conflict with the decision

of this Court in Calloway v. Benton, 336 U.S. 132, in

the construction of the provisions of Section 77 of the

Bankruptey Act (11 U.S.CLA., See. 205), and Section

ee ee ee

—_ om

5 of the Interstate Commerce Act (49 ULS.CLA., See.

5) relating to the granting of Federal powers to a

reorganized railroad corporation operating in inter-

state commerce.

(3) The jurisdiction of this Court is invoked under

the provisions of Section 24(¢) of the Bankruptey

Act (11 U.S.CLA,, See. 47(¢) ) and Section 1254(1) of

the Judicial Code, Acts of June 25, 1948 (28 U.S.CLA,,

Sec. 1254(1) ).

III.

QUESTIONS OF FEDERAL LAW WHICH HAVE

NOT BEEN BUT SHOULD BE SETTLED

BY THIS COURT

(1) The Court of Appeals decided that in proceed-

ings under Section 77 of the Bankruptey Act the In-

terstate Commerce Commission could grant the right

to exercise the power of eminent domain to a reorgan-

ized foreign railroad corporation engaged in interstate

commerce in a State where the exercise of such power

by a foreign railroad company was prohibited by its

Constitution and laws. This holding by the Court of

Appeals is contrary to the express provisions of See-

tion 77 of the Bankruptey Act (11 U.S.C.A., See. 205),

and is an important question of Federal law which

has not been but should be decided by this Court.

(2) The Court of Appeals decided that the transfer

to the reorganized foreign railroad compeuy of the

title to and the use of the easements for rights-of-way

over public lands and highways belonging to and the

property of the State of Texas, acquired by the Texas

railroad company subsidiary debtors under the Con-

stitution and laws of Texas, would constitute a valid

and legal transfer of such title under the provisions

APE RETTT ON

ASSEN PT URDU FER SH

—_ oe

of the Plan of Reorganization. This holding by the

Court of Appeals is directly contrary to and in vivla-

tion of the Treaty of Annexation of the State of Texas

with the United States and therefore violates Article

V1 of, as well as the Fifth and Tenth Amendments

to, the Constitution of the United States in that it

attempts to deprive a sovereign State of the title to

its public lands, reserved to it by treaty, without due

process of law. This is an important question of Fed-

eral law which has not been and should be decided

by this Court.

IV.

THE QUESTIONS PRESENTED

The following questions are presented for decision:

(1) Whether Section 77(f) of the Bankrutpey Act

delegates to the Interstate Commerce Commission or

the District Court, in railroad reorganization proceed-

ings, the power to vest in a foreign railroad corpora-

tion the right of eminent domain over lands, public

or private, situated in a State where, under the Con-

stitution and laws thereof, such foreign railroad cor-

poration is prohibited from exercising the right of

eminent domain;

(2) Whether a plan of reorganization under See-

tion 77(b) (5) of the Bankruptey Act which authorizes

transfer of the title to easements for rights-of-way

over public lands held by subsidiary railroad company

debtors, which revert to the sovereignty upon the

breach of a condition subsequent, can convey the legal

title to and the right to use such rights-of-way to a

reorganized foreign railroad company which is pro-

hibited by the Constitution and laws of a State from

ae

obtaining a permit to engage in intrastate business

therein.

V.

REASONS RELIED ON FOR ALLOWANCE OF

THE WRIT

(1) In holding that the orders of the Interstate

Commerce Commission which have been approved by

the Court simply constitute an exercise of Federal!

power conferred upon the Commission by Federal stat-

ute, the Court of Appeals has decided a question of

Federal law in a way that is untenable and is in direet

conflict with the decision of this Court in Calloway v.

Benton, 336 US. 132, in the construction of the pro-

Visions of Section 77 of the Bankruptey Act (11 U.S.

C.A., See. 205), and Section 5 of the Interstate Com-

merce Act (49 U.S.C.A., See. 9), relating to the grant-

ing of Federal powers to a reorganized railroad cor-

poration operating in interstate commerce. This hold-

ing by the Court of Appeals is also in direct conflict

with the decision of this Court in California v. Central

Pacific Railroad Company, 127 U.S. 1, and other de-

cisions of the Supreme Court of the United States.

In Calloway +. Benton, 336 U.S. 132, 140 (1949),

this Court held, in part:

“The Commission preferred, instead, to earry

out the consolidation under the authority of $77

(b)(5) of the Bankruptey Act, which provides

that the plan of reorganization may inelude ‘the

merger or consolidation of the debtor with an-

other corporation, or corporations.” That power

flows from a different source than the power over

consolidations under the Interstate Commerce

i

*Italics throughout are supplied unless otherwise indicated.

—

Inasmuch as the proceedings herein are under See-

tion 77 of the Bankruptcy Act (TR 86), the powers of

the Interstate Commerce Commission and the District

Court to order mergers or consolidations are derived

solely from that part of Section 8, Article 1 of the

Constitution of the United States which gives the Con-

gress power to establish uniform laws on the subject

of bankruptcy throughout the United States, and nol

the provision giving Congress the power to regulate

commerce among the several States.

In Seaboard Airline Co. v. Daniel, 833 U.S. 118,

126 (1947), this Court held that the power of eminent

domain is granted to the new company as a federally

conferred power under Section 5(11) of the Interstate

Commerce Act, stating:

‘*. . These federally conferred powers can be

exercised in the same manner as though they had

been granted to a federally created corporation.

See California v. Central Pacific R. Co., 127 US.

1, 38, 40-45. Here, just as a federally created rail-

road corporation could for federal purposes oper-

ate in South Carolina, so can this Virginia cor-

poration exercise its federally granted power to

operate in this State.”

In California v. Central Pacific R. Co., 127 U.S. 1,

40 (1887), this Court held that under the power to

regulate commerce among the several States the Con-

gress could delegate the power to exercise the right of

eminent domain to a private corporation, adding that

“the right of eminent domain can only be exercised

by virtue of a legislative grant.”

The Court of Appeals decided that the Federal pow-

er conferred upon the Interstate Commerce Commis-

sion and the District Court under Section 77(b) (5)

F —11—

and (f) was sufficiently broad to vest the power of

eminent domain in a foreign railroad corporation

which cannot exercise such power in the State of Tex-

as, since it is prohibited by the Constitution and laws

thereof from obtaining a permit to engage in intra-

state business therein.’ The Court of Appeals seems

to have relied upon the ruling by this Court in Sea-

board Airline Co. v. Daniel, supra, Which involved a

grant of such power under Section 5(11) of the Inter-

state Commerce Act, as authority to delegate federally

controlled powers to the reorganized railroad corpora-

tion under Section 77 of the 3ankruptey Act (OR 29-

25).

In the absence of congressional legislation delegat-

ing such federally controlled power to the new com-

pany under the plan of reorganization authorized by

the Bankruptey Act with the approval of the Inter-

state Commerce Commission and the District Court,

it is clear that the power of the District Court under

the provisions of Section 7T7(f) of the Bankruptey

Act does not have such extra-judicial or extra-terri-

torial scope as to authorize the hew company to exer-

cise the power of eminent domain in Texas where the

State of Texas has granted no such right or authority.

(2) In holding that the plan of reorganization pro-

vides adequate means for its execution by authorizing

the transfer of the title to easements for rights-of-way

over publie lands held by the Texas subsidiary rail-

road company debtors, the Court of Appeals has de-

cided a question of both Federal and State law in a

way that is untenable and is contrary to and in viola-

tion of the Treaty of Annexation of the State of Texas,

_ ‘Articles 1529, 1538, Vernon’s Texas Statutes (1948 Edi-

tion). (App. 31.)

— wn

with the United States (2 Gammel’s Laws of Texas,

1200, 1225, 1228), whereby Texas reserved all of its

publie lands, and therefore violates Article VI of the

Constitution of the United States, as well as the Fifth

and Tenth Amendments to the Constitution of the

United States, in that such holding attempts to de-

prive a sovereign State of the title to its public lands

reserved to it by treaty without due process of law.

In the case of Te.ras & Pacific Ry. Co. v. State, 142

Tex. 482, 78 S.W. 2d 580 (1935), certiorari denied,

296 U.S. 581 (1935), it was held that railroad com-

panies acquiring rights-of-way over the publie lands

of the State of Texas acquired only easements as pro-

vided in Article 6359, Texas Civil Statutes (App. 30).

Under the provisions of Article 6339 such easements

for rights-of-way remain the property of a railroad

corporation chartered under the laws of Texas only

during the time it maintains that status by complying

with the Constitution and laws of the State of Texas.

Although Article 6339 provides that such rights-of-

way shall not be lost by forfeiture or expiration of

the charter, they only remain subject to an extension

of the charter or the grant of a new ch rter over the

same way without a new condemnation. Manifestly,

the transfer of the title to such rights-of-way to the

reorganized foreign corporation is not an extension

of the charter of the Texas subsidiary railroad com-

pany debtor nor is the acquisition thereof by the reor-

ganized foreign railroad corporation comprehended

within the ‘‘grant of a new charter over the same way

without a new condemnation,”’ since the reorganized

railroad corporation is not organized under the laws

of Texas and cannot receive a permit to engage in

intrastate commerce in Texas,

: RES

RES oe hk RIED NORE By des RYDEN Rope

—13—

Conceding that under the provisions of Section 77

(f) of the Bankruptcy Act the Plan of Reorganiza-

tion shall be put into effect notwithstanding the laws

of the State of Texas to the contrary, nevertheless the

legality of the title to and the right to use the rights-

of-way acquired by Texas railroad corporations over

publie lands or highways of the State is a question of

law for interpretation and decision by the highest

Court of the State of Texas, and neither the Inter-

state Commerce Commission op the District Court

could be given plenary jurisdiction to interpret and

apply such State law. Sehwabacher ". United States,

334 U.S. 182, 190, 198 (1948).

Although this specific question of law was twice

urged before the Interstate Commerce Commission

(TR 14-15, 19), again presented to the District Court

(TR 83-85), and to the Court of Appeals (TR 131-

132), nevertheless the Interstate Commerce Commis-

sion, the District Court, and the Court of Appeals

each failed to rule specifically upon such point of

error, thus presenting a substantial and important

question, involving both Federal] and State law, which

should be decided by this Court if the Plan of Reor-

ganization is to provide effective means for its ex-

ecution.

WHEREFORE, Petitioner respectfully prays that

a writ of certiorari be issued under the Seal of this

Honorable Court and directed to the Court of Appeals

for the Eighth Circuit, directing that Court to certify

and send to this Court for its review and determina-

tion, on the day to be named therein, a transcript of

the record of the proceedings herein; that the judg-

ment of said Court of Appeals be reversed insofar as

it provides for the consolidation or merger of the Texas

=

‘allroad subsidiary debtors with the reorganized c¢om-

pany, and that your Petitioner have such other and

further relief in the premises as this Honorable Court

may deem mete and just.

Respectfully submitted

STATE OF TEXAS, Petitioner

By Prick DANIEL

Aftorney General of Te.ras

By ©. K. Ricuarps

Assistant Attorney General

Address:

State Capitol

Austin, Texas

eR Maher S.

A eae oe Pai UE I em Es ate be cote

—

IN THE

Supreme Court of the United States

OCTOBER TERM, 1951

NO.

STATE OF TEXAS,

Petitioner

vs.

GROUP OF INSTITUTIONAL INVESTORS HOLDING

FIRST AND REFUNDING MORTGAGE 5% BONDS OF

MISSOURI PACIFIC RAILROAD COMPANY, ET AL.,

Respondents

BRIEF IN SUPPORT OF PETITION FOR CERTIORARI

I.

Opinion of Court Below

The opinion of the Court of Appeals (CR 14-36)

is reported in 191 F, 2d 265.

Il.

Preliminary Statement

The Summary Statement of the Matter Involved,

Statement as to Jurisdiction, and Statement of Ques-

tions Presented appear in the foregoing Petition for

Certiorari (ante, pages 1 to 14), and are adopted

Without repetition.

Ill.

Specification of Errors

(1) The Court of Appeals erred in holding that the

provisions of Section 77 of the Bankritpey Act dele-

—

vated to the Interstate Commerce Commission and the

District Court authority to vest the power of eminent

domain in a foreign railroad corporation engaged in

interstate Commerce in a State where, under its Con-

stitution and laws, the exercise of such power was

prohibited.

(2) The Court of Appeals erred in holding that the

Plan of Reorganization approved by the Interstate

Commerce Commission and the Distriet Court) pro-

vided adequate means for its execution insofar as it

authorized the transfer of the title to and the use of

asements for rights-of-way over public lands and

highways acquired by subsidiary railroad company

debtors chartered under the laws of the State of Texas,

to the reorganized foreign railroad company which is

prohibited by the Constitution and laws of Texas from

obtaining a permit to engage in intrastate business

therein, since upon such transfer the title to and the

right to use such easements would revert to the sov-

ereign upon the breach of a eondition subsequent.

IV.

SUMMARY OF ARGUMENT

(1) The power to exercise the right of eminent do-

main to secure railroad rights-of-way over the public

lands and highways of a sovereign State in violation

of the Constitution and laws thereof cannot be granted

to a foreign railroad corporation as a federally dele-

gated power under the provisions of Section 77 of the

Bankruptey Act.

(2) Where easements for railroad rights-of-way

over the public lands and highways of a sovereign

State, granted to domestic railroad companies under

a

”

—_ 17

the Constitution and laws of that State, revert ty the

sovereignty upon the breach of a condition subsequent,

neither the Interstate Commerce Commission nor the

Distriet Court in proceedings for reorganization of

such railroads under the provisions of Section 77 of

the Bankruptey Act can authorize the conveyance of

the legal title to or the use of such easements for rights-

of-way to the reorganized foreign railroad corporation.

V.

ARGUMENT

(1) The power to exercise the right of eminent

domain to secure railroad rights-of-way over the pub-

lic lands and highways of a sovereign State in vio-

lation of the Constitution and laws thereof cannot

be granted to a foreign railroad corporation as a

federally delegated power under the provisions of

Section 77 of the Bankruptcy Act.

The Court of Appeals, in affirming the power of the

Interstate Commerce Commission to delegate the pow-

er of eminent domain to the reorganized company

over the lands, public and private, in the State of

Texas, relies upon the decision of this Court in Sea-

board Airline R. Co. v. Daniel, 333 U.S. 118 (1948),

Which holds that the federally conferred powers grant-

ed by Section 5(11) of the Interstate Commerce Act

may be exercised by the reorganized corporation in

the same manner as though they had been granted to

a federally created corporation. Petitioner contends

that Section 77 of the Bankruptey Act does not eon-

fer the Federal power of eminent domain upon the

reorganized corporation, either by specifie grant or by

implication.

— oe

Section 77 of the Bankruptey Act authorizes the

transfer of any interest in or control of all or any

part of the property of the debtor to another corpora-

tion by merger or consolidation (See. 77(b) (5), the

laws of any State to the contrary notwithstanding

(See. 77(f) ). This is the sole authority granted to the

Interstate Commerce Commission and the District

Court under the powers delegated by the Congress in

matters of bankruptey. Such delegated powers are

wholly distinct from the powers delegated by the Con-

gress to regulate commerce. Calloway v. Benton, 336

U.S. 132, 140 (1949).

The power to exercise eminent domain in the regu-

lation of ecommerce in the several States is inherent

in the United States, but such power may be specif-

ically delegated by the Congress to a private corpora-

tion. Cherokee Nation v. Kansas R.R. Co., 135 US.

641, 656 (1893) ; California v. Central Pacific RR. Co.,

127 U.S. 1, 39, 40 (1887). In the absence of such spe-

cifie statutory delegation a foreign railroad eorpora-

tion is without power to exercise the right of eminent

domain in a State wherein the exercise of such power

is prohibited or where such power has been withheld.

Evansville & Henderson Traction Co. v. Henderson

Bridge Co., 141 Fed. 51 (C.C.A. 6th Cir. 1905); St.

Louis & S. FP. R. Co. 1. Foltz, 52 Fed. 627 (C.C.W.D.

Ark., 1892).

In Western Union Telegraph Co. v. Penn. R.R. Co.,

195 U.S. 540, 569 (1904), this Court held:

‘‘But in the act of July, 1866, there is not a

word which provides for condemnation or com-

pensation. The rule that when a right is given all

the means of exercising it are given does not, as

we have seen, apply to the extent contended for

J ER pigiaeaRe ED tarciec

—19—

by the Telegraph Company. The exercise of the

power of eminent domain is against common right.

It subverts the usual attributes of the ownership

of property. It must, therefore, be given in express

terms or by necessary implication, and this was

the reasoning in the Pensacola case and applied

directly to the act of 1866. We may repeat the

language of the court: ‘If private property is re-

quired it must, so far as the present legislation

is concerned, be vbtained by private arrangement

with its owner. No compulsory proceedings are

authorized.’ ”’

It has long been settled law in Texas that a railroad

company must be legally incorporated in Teras before

it may exercise power of eminent domain delegated

to it by the sovereign. When such railroad company

ceases to comply with the Constitution and laws of

Texas by failing to maintain its corporate existence

therein, it may not avail itself of the power of eminent

domain, since such legislative delegation of authority

is granted only to railroad corporations whieh are

chartered by and in compliance with the Constitution

and laws of Texas. Teras d& New Orleans RR. Co. v.

Schoenfeld, 136 Tex. 173, 176, 146 S.W. 2d 724 (1949),

and authorities therein cited; Fort Worth & D.C. Ry.

Co. v. Ammons, 215 S.W. 2d 407, 410 (Tex. Civ. App.

1948, error ref.).

The Court of Appeals held that the plan of reor-

ganization which authorized the merger or couselida-

tion of the 14 Texas debtors with the new company

would result in economy of operation, would be in

the public interest, and an ad vantage to all debtors,

and, stated that such findings were supported by ma-

terial and substantial evidence. (CR 22-23.) Conced-

Ing, drguendo only, that such factual findings were

eee |

ee

ot? 2

eee eee eee

—

based upon substantial evidence, Petitioner contends

that the reorganized corporation, not being incorpo-

rated in the State of Texas and therefore being de-

prived of the right of eminent domain, could not con-

struct and operate spur or industrial tracks under the

provisions of Article 6316a, Texas Civil Statutes (App.

29) or enter upon any lands, either publicly or pri-

vately owned, in order to make a survey for the pur-

pose of constructing such tracks under the provisions

of Article 6518 (App. 29) or to construct its road

across, along or upon any stream of water, water-

course, street or highway, under the provisions of Ar-

ticles 6520 and 6531 (App. 29, 30). Being without the

power of cminent domain, when the new company de-

sired to avail itself of any of the rights just enumer-

ated, it would have to enter into contracts with the

State of Texas or its various political subdivisions,

or with private persons, to accomplish its needs. It

could not avail itself of the provisions of Article 6336

(App. 30) which provide that whenever a railroad

corporation shall be unable to agree with an owner

for the purchase of real estate or material thereon

required for the transaction of its business, such cor-

poration may acquire such property by condemnation.

This Court may take judicial notice that condemna-

tion proceedings are resorted to by municipal or pri-

vate corporations vested with the power of eminent

domain, only when they have been unable to enter into

‘arm's length’? contracts with the seller because the

“asking”? price of the land or material is greatly in

excess of the actual market value thereof, Bearing this

in mind, Petitioner contends that to so deprive the

new company of the advantages heretofore enjoyed by

its 14 Texas subsidiary companies, who have been and

— de Sede Gd a ROGERK S CGN SEY

BR Ee Silke

RR Te oe aaa

et.) Eo

still are complying with the Constitution and laws of

the State of Texas, would not be in accord with the

national transportation policy or be in the public in-

terest and, in addition, would constitute a burden up-

on the new company in the management and operation

of an efficient transportation system in the national

interest.

Being deprived of the advantages which it presently

enjoys under its present system operation as the ‘** Mis-

souri Pacific Lines,’? the new company would be at a

distinct disadvantage to continue such operation in

competition with other major railroad systems now

operating in the State of Texas in compliance with its

Constitution and laws. Neither the Interstate Com-

merce Commission, the District Court, nor the Court

of Appeals specifically passed upon this contention of

the State of Texas, but, each erroneously assumed that

the question had been finally disposed of by the ruling

of this Court in Seaboard Airline R. Co. v. Daniel,

supra.

Petitioner urges that being deprived of the power

of eminent domain in the State of Texas, the merger

or consolidation of the Texas subsidiary debtors with

the reorganized company would not result in economy

of operations or be in the public interest or of advan-

tage to all the debtors, as a matter of law, and there-

fore the Plan of Reorganization is defective insofar

as it provides for the merger or consolidation of the

Texas subsidiary debtors with the new company.

(2) Where easements for railroad rights-of-way

over the public lands and highways of a sovereign

State, granted to domestic railroad companies under

the Constitution and laws of that State, revert to the

sovereignty upon the breach of a condition subse-

SA LR ALL IT L LLL LLL OL ALE ELDER LAL LE LLL ALLEL IT Wc i OND dad a

— 22 —

quent, neither the Interstate Commerce Commission

nor the District Court in proceedings for reorgan-

ization of such railroads under the provisions of Sec-

tion 77 of the Bankruptcy Act can authorize the con-

veyance of the legal title to or the use of such ease-

ments for rights-of-way to the reorganized foreign

railroad corporation.

Railroads in Texas are declared to be public high-

ways by the provisions of Article X, Section 2 of the

Constitution of Texas. (App. 28.) The 14 railroad com-

pany subsidiary debtors, chartered under the laws of

the State of Texas to operate their lines of railway in

intrastate commerce, secured the easements for rights-

of-way over the public lands and highways of the

State of Texas under the provisions of Articles 6317,

6320, 6351, 6339, and 6340, Texas Civil Statutes (App.

29, 30, 31).

In connection with the granting of the charters to

the Texas railroad company debtors and the aequisi-

tion by such debtors of the easements for rights-of-

way and other easements authorized by the Constitu-

tion and laws of the State of Texas, such authoriza-

tions or grants were and are limited to railroad com-

panies incorporated under the laws of the State of

Texas which own, operate, and maintain their lines of

railway in compliance with the Constitution and laws

of Texas and not in violation thereof. (Art. X, Sees.

1, 3, 6, Texas Constitution; Art. 6260, Texas Civil Stat-

utes) (App. 28).

When the Republic of Texas was annexed to the

United States by treaty under the joint resolutions of

the Congress of the United States, approved June 23,

FNM RIN eye tae o

=

1845, the State of Texas retained all of the vacant and

unappropriated lands lying within its limits.‘

By a Joint Resolution passed April 29, 1846, the

First Legislature of the State of Texas declared,

“That the exclusive right to the jurisdiction over the

soil included in the limits of the late Republic of Texas

was acquired by the valor of the people thereof, and

was by them vested in the government of said Repub-

lie; that sueh erclusive right is now vested in and

belongs to the State... .’? (Acts of the First Legisla-

ture, 1846, p. 155.)

Not only did Texas retain her public lands, but like-

wise the power of eminent domain, except where grant-

ed to the United States by State statute. In an opinion

by the Attorney General of the United States it was

held that the Federal Government had no power to

condemn land in Texas for military purposes and that

“The eminent domain of the Mexiean Republic in

Texas passed to the Republie and State of Texas and

never vested in the United States’. 8 Opinions of

Attorney General of United States 333 (Opinion by

Hon. Cale C. Cushing of Massachusetts).’

It is settled law in Texas that railroad companies

acquiring rights-of-way over the publie lands of the

‘2 Gammel’s Laws of Texas 1200: 9 U.S. Statutes at Large,

108; See United States v. Texas, 339 U.S. 707, 714 (1950):

Amaya v. Stanolind Oil & Gas Co., 62 F. Supp. 181 (1945),

aff'd 158 F. 2d 554 (C.C.A. 5th 1946), cert. den. 331 U.S. 808

(1947), reh’g den. 331 U.S. 867 (1947): State ». Jadwin, &5

S.W. 490 (Tex. Civ. App. 1904, error ref.). Compare Stearns

v. Minnesota, 179 U.S. 223 (1900).

“Since the United States owns no public lands in Texas, an

attempted grant of public lands therein by the United States

would be a nullity. Coffee v. Grover, 123 U.S. 1 (1887);

Kenedy Pasture Co. v. State of Texas, 111 Tex. 200, 231 S.W.

683 (1921).

NA Az is pRB RA NAR OR BORG De RE ie 4 - LINER NAT ch OM < in now

ef

©

—24—

State of Texas acquire only easements which are not

lost by forfeiture or expiration of the charter of the

railroad corporation, but remain subject to an exten-

sion of the charter or the grant of a new charter over

the same right of way without a new condemnation.

In Teras & Pacific Railway Co. v. State, 52 S.W. 2d

957, 960 (Tex. Civ. App. 1952), aff’d, 124 Tex. 482,

78 S.W. 2d 580 (1935), cert. den. 296 U.S. 581 (1935),

it was held:

“.. Without further discussion of the matter

we think it is clear that, when appellant railroad

company undertook the construction of its road

over the public lands of the state in 1881, it did

so subject to the laws of the state then in force

relating thereto. The fact that it was chartered by

the United States did not relieve it from such

regulation so far as the state’s publie lands or

police power were concerned. We conclude, there-

fore, that under the pleadings and the agreed

statement of facts appellant does not have a fee-

simple title to its right of way over the lands in

question.”’

In Texas Central Railroad Company v. Bowman,

97 Tex. 417, 423, 79 S.W. 295 (1904), the Court held:

“The right granted to any company is only the

use of a narrow strip of land of which the fee is

not acquired by the railroad company but remains

in the State subject to its disposal; and the right

of the railroad company is held subject to all con-

ditions and limitations which by law attach to

such property.”’

Petitioner contends that the easements for rights-

of-way granted to the Texas railroad company debtors

are permissive grants or franchises which inure to the

benefit of the railroad companies only as long as they

RIA ALY STAID IA Hei CRIB AS

= oo

maintain their status as Texas corporations in com-

pliance with the Constitution and laws of the State of

Texas. The right to use the easements over public

lands and highways of the State, acquired by the Texas

railroad companies, would be terminated by an at-

tempted transfer of such easements to a foreign rail-

road corporation which is prohibited by the Constitu-

tion and laws of the State of Texas from engaging in

intrastate commerce within the State of Texas." Such

rights-of-way are granted by the State over the publie

lands of Texas as a matter of publie poliey, without

compensation, and are not evidenced by any muni-

ments of title emanating from the State of Texas,

except in rare instances where such Texas railroad

companies were Incorporated under special charters

by special Aets of the Legislature. The casements for

rights-of-way are not forfeited by the forfeiture or

expiration of the charter of the railroad corporation,

but remain subject to the extension of the charter or

the grant of a new charter by the State of Texas over

the same right-of-way. (Art. 6839, Texas Civil Stat-

utes, App. 30)*

Since the title to and the disposition of the public

lands of Texas have been vested in the sovereign State

"Art. X, Sec. 6, Constitution of Texas (App. 28); Arts. 1529,

1538, 6260, 6287, Texas Civil Statutes (App. 31, 28);

East Line & Red River Ry. Co. v. Texas, 79 Tex. 434, 12 S.W.

690 (1889) ; International & G. N. Ry. Co. v. Anderson Coun-

‘eS ae 305 (Tex. Civ. App. 1915, error ref.), aff’d 206

_ ‘Railroad rights-of-way acquired by condemnation proceed-

Ings are easements only. Calcasieu Lumber Company v. Har-

ris, T7 Tex. 18, 13 S.W. 453 (1890); Brightiwell v. 1.G.N.R.

Co., 121 Tex. 338, 49 S.W. 2d 437 (1932); Right-of-Way Oil

Co. v. Gladys City O. G. & M. Co., 106 Tex. 94, 157 S.W. 737

(1913) ; Kynerd v. Hulen, 5 F. 2d 160 (5th Cir. 1925), cert.

den. 269 U.S. 560.

RRS ae AG A aE NI Mite BOD da

—_

of Texas prior to and since it became one of the States

of these United States, the Interstate Commerce Com-

mission and the District Court are wholly without any

authority, express or implied, under the provisions of

Section 77 of the Bankruptcy Act, to authorize the

transfer of the title to and the right to use the ease-

ments for rights-of-way acquired by the 14 Texas sub-

sidiary debtors over the public lands belonging to and

part of the State of Texas, to the reorganized foreig |

railroad corporation which is prohibited by the Con-

stitution and laws of the State of Texas from engaging

in any commerce other than interstate within the State

of Texas. Insofar as the Plan of Reorganization at-

tempts to authorize transfer of the rights-of-way over

publie lands of the State of Texas now held by the 14

Texas subsidiary railroad company debtors to the re-

organized company, it violates Article VI of, and the

Fifth and Tenth Amendments to, the Constitution of

the United States and is manifestly arbitrary and

void. Interstate Commerce Commission v. Louisville

cd Nashville RR. Co., 227 U.S. 88, 91, 92 (1912). Hence

the Plan of Reorganization does not provide adequate

means for its execution.

It is respectfully submitted that this case is one

calling for the exercise by this Court of its supervisory

powers by granting a writ of certiorari and thereafter

reviewing and reversing the decision of the Court of

Appeals for the Eighth Circuit, which affirmed the

judgment of the District Court confirming the Plan

eget SETA

— soe

of Reorganization of the Missouri Pacific Railroad

Company, Debtor.

STATE OF TrExas, Petitioner

By Price DANieEL

Attorney General of Teras

By C.K. Rich arps

Assistant Attorney General

Counsel for Petitioner

5 Sh Gl A GT MERU SOMA! Eg USS ER MERON LEE LIN SY SLED DLA EA PS ABD WH SSEX wa Sti a |

a

APPENDIX

THE TEXAS CONSTITUTION AND STATUTES

Pertinent provisions of the Constitution and laws

of the State of Texas are as follows :*

Article X, Constitution of Texas.

‘See. 1. Gin part) Any railroad corporation

or association, organized under the law for the

purpose, shall have the right to construct and

operate a railroad between any points within this

State, and to connect at the State line with rail-

roads of other states... .’’ (Page LV)

See. 2. (in part) Railroads heretofore con-

structed or which may hereafter be constructed

in this state are hereby declared public highways,

and railroad companies, common carriers.

(Page LV)

‘See. 6. No railroad company organized un-

der the laws of this State, shall consolidate by

private or judicial sale or otherwise with any rail-

road company organized under the laws of any

other State or of the United States.”’ (Page LVI)

Applicable provisions of Title 112, Railroads, of the

Revised Civil Statutes of Texas, 1925, are:

‘Art. 6260. No corporation, except one char-

tered under the laws of Texas, shall be authorized

or permitted to construct any railways within

State.’’ (Page 1774)

‘Art. 6287. The public office of a railroad cor-

poration shall be considered the domicile of such

corporation.’’ (Page 1777)

“Art. 6816. Any railroad corporation — shall

have the right to construct and operate a railroad

*All page references are to Vernon’s Texas Statutes (1948

Edition), Vol. 1.

it ele AGE Ts PN he

a.)

between any points within this State, and to con-

nect at the State line with railroads of other

States.’’? (Page 1779)

“Art. 6316a. Every railroad company owning,

leasing or operating a line of railroad in this State

shall have authority and power to construct and

operate spur or industrial tracks designed to reach

or serve industries or industrial enterprises, such

as mills, mines, rock quarries, rock deposits, gravel

pits, gravel deposits, smelters, warehouses and

other manufacturing or industrial enterprises,

over which regular scheduled passenger or freight

service will not be performed and for transporta-

tion over which only a switching charge, if any,

will be made, together with all necessary side-

tracks and subsidiary or accessory spur tracks,

aud shall have power and authority under the

General Laws of this State relating to railroads

to condenm property for rights of way for any

and all such tracks hereby authorized.”’ (Page

1779)

“Art. 6317. Every such corporation (rail-

road) shall have the right of way for its line of

road through and over any lands belonging to this

State, and to use any earth, timber, stone or other

material upon any such land necessary to the con-

struction and operation of its road through or

over said land.’’ (Page 1779) (Parenthetical in-

sertion ours)

“Art. 6318. Every railroad corporation shall

have. the right to cause such examination and sur-

vey for its proposed railway to be made as may be

necessary to the selection of the most advanta-

geous route, and for such purpose may enter upon

the lands or waters of any person or corporation,

but subject to responsibility for all damages that

may be occasioned thereby.’’ (Page 1779)

“Art. 63820. Such corporation shall have the

right to construct its road across, along, or upon

Pea AAG SPL WOR TST SS a,

—

any stream of water, water course, street, high-

way, plank road, turnpike, or canal when the route

of said railway shall intersect or touch; but such

corporation shall restore the stream, water course,

street, highway, plank road, turnpike, or canal

thus intersected or touched, to its former state,

or to such state as not to unnecessarily impair its

usefulness, and shall keep such crossing in re-

pair.’’ (Page 1779)

“Art. 6831. In case of the construction of any

railway along the highways, plank roads, turn-

pikes, or canals, suc +h railroad corporation shall

either first obtain the consent of the lawful author-

ities having control or jurisdiction of the same or

condemn the same under the provisions of law.”

(Page 1780)

“Art. 6336. (in part) If any railroad corpo-

ration shall at any time be unable to agree with

the owner for the purchase of any real estate, or

material thereon, required for the purpose of its

incorporation or the transaction of its business,

for its depots, station buildings, machine and re-

pair shops, for the construction of reservoirs for

the water supply, or for the right of way, or for

a new or additional right of way, for Paes: or

relocation of road bed, to shorten the line, or any

part ping cy or to reduce its grades, or any of

them, or for double tracking its railroad or con-

structing and operating its tracks, which is here-

by authorized and pe mitted, or for any other

lawful purpose connected with or necessary to the

building, operating or running its read, such cor-

poration may ac quire such property by condemmna-

tion thereof... .’’ (Page 1780)

“Art. 6339. The right of way secured by con-

demnation to any railway company in this State

shall not be construed to include the fee simple

estate in lands, either public or private, nor shall

the same be lost by forfeiture or expiration of the

SEN DEEN Tita RP a RIERA

" picatieas a

charter, but shall remain subject to an extension

of the charter or the grant of a new charter over

the same way without a new condemnation.”

(Page 1781)

“Art. 6340. The right of way is hereby re-

served to any railroad company incorporated by

the laws of this State, to the extent of one hundred

feet on each side of said road, or roads that cross

over or extend through any lands granted, or that

may be granted to any railroad company by the

Legislature, with the right to take from the lands

so granted such stone, timber and earth as such

road may need in the construction of its line of

road.”’ (Page 1781)

Se

Applicable provisions of Title 32, Corporations, of

the Revised Civil Statutes of Texas, 1925, are:

‘Art. 1529. Any corporation for pecuniary

profit, except as hereinafter provided, organized

or ereated under the laws of any other State, or

of any territory of the United States, or of any

municipality of such State or territory, or of any

foreign government, sovereignty or municipality,

desiring to transact or solicit business in Texas or

to establish a general or special office in this State,

shall file with the Secretary of State a duly cer-

tified copy of its articles of incorporation; and

thereupon such official shall issue to such corpora-

tion a permit to transact business in this State

for a period of ten vears from the date of so filing

such articles of incorporation. If such corporation

is created for more than one purpose, the permit

may be limited to one or more purposes.’’ (Page

543)

“Article 1538. (in part) The provisions of

this chapter shall not apply to corporations cre-

ated for the purpose of constructing, building,

operating or maintaining any railway,...’’? (Page

544)

———o7O