Appellee sued appellant for damages alleged to have accrued to him by reason of the depreciation in value of town lots *12 and lands in and near tlie town of Wash-burn, in Armstrong county, Tex., the depreciation arising from the act of appellant in taking up its rails and discontinuing its road between Panhandle, in Oarson county, and Washburn, and the construction of its road direct from Panhandle to Amarillo, leaving Washburn six miles off its line. It was alleged that in 1887 R. E. Montgomery was in possession of four sections of land, numbers 62, 63, 98, and 99, which lay in such contiguity to each other as to substantially form a square, and a right of way was granted the Pt. Worth & Denver Railway Company across said sections together with a depot ground about the center of the square, and also there was donated to the said railway company about 100 acres out of said square, the consideration being that the railway company would establish on said land its depot, which was done and the station called Washburn, that afterwards the Panhandle Railway Company was incorporated to build a railroad from a point at or near Wash-burn, in a northeasterly direction to Panhandle, the charter thereof providing that it would establish and maintain its principal offices at Washburn, that said railway company entered into an agreement with Montgomery by which in consideration of the grant of right of way and depot grounds, it agreed to forever maintain its road, depot, and principal offices at Washburn; that the right of way and depot grounds were taken possession of, the road was constructed, and the depot established, and the same were used and occupied until the same was purchased by appellant under and by authority of an act of the Twenty-Sixth Legislature, in 1899 (Acts 20th Leg. c. 25), and the same was taken possession of by appellant and operated as a part of its line until about April, 1898, when appellant wrongfully and willfully took up and removed its tracks from Panhandle to Washburn, and ceased to operate that part of its line, and permanently abandoned and discontinued the same. By the pleadings appellant was charged with knowledge of the contract of the Panhandle Railroad, but disregarded the rights of appellee which were obtained by his purchase on December 1, 1906, by all of the four sections of land owned at that time by Montgomery, together with all the covenants, rights, privileges and appurtenances belonging or appertaining to the same, that when Montgomery laid off and platted the town of Washburn he included about 600 acres, consisting of about 5,000 lots, and published a map and plat which showed the donations to the Panhandle Railway Company, and that it was re-platted by appellee, who owned 1,603 acres of land out of the four sections, in addition to 5,388 lots as shown by the map of Wash-burn ; that said lots were worth, prior to the removal of the railroad, $30 each, and the acreage property $40 an acre, but by the removal the lots were reduced in value to $15 each and the acreage property to $20 an acre, the total depreciation being $112,970.
Appellant answered by general and special demurrers, general denial, and special pleas, which gave a history of the default of the Panhandle Railway Company in the payment of certain bonds, the foreclosure of a mortgage, a sale of the road and its properties and franchises to Edward Welder, and his sale on January 1, 1900, to appellant by virtue of the authority of an act of March, 1899, of the Legislature of Texas. It was further answered that by an act of the Legislature,, of date March 26, -1907, appellant had been, authorized to take up and abandon its track and road from Washburn to Panhandle, and1 a plea of limitations was also filed.
The salient facts are: That sections 62, 63, 98, and 99 are located near the northwest corner of Armstrong county, and form a square, 62 being the northwest quarter, 63 the northeast quarter, 98 the southeast quarter and 99 the southwest quarter of the square. The Pt. Worth & Denver Railway Company’s line enters the square near the northeast corner of 98, runs across the southwest corner of 63 and across the south half of 62. The Panhandle road ran in a southwesterly direction from Panhandle across section 63 a short distance into section 98 where it formed a junction, at Washburn, with the Pt. Worth & Denver City Railway Company’s line. R. E. Montgomery on February 10, 1888, acquired title to 98, except 40 acres, on May 3, 1890, obtained title to sections 63 and 99. Montgomery on December 31, 1891, conveyed to the Pt. Worth & Denver City Railway Company a right of way 200 feet wide across sections 62, 63 and 98, the consideration being two dollars, and on May 7, 1897, he conveyed all of sections 63, 98, and 99 not previously conveyed to the Panhandle Townsite Company, and that company, through Montgomery as its president, on December 1, 1906, conveyed to appellee, James Logue, for a recited consideration of $9,000 cash and three notes for $9,000, all of section 98 not previously sold, except the east one-half of the south-east quarter, 80 acres, and all of section 99, that had not been sold as lots and blocks, and all of section 63 that had not been sold as lots and blocks, and except “any right which the Pt. Worth and Denver City Railway Company or the Southern Kansas Railway Company of Texas may have to their right of way through said land.’' The Panhandle Railway Company was chartered in 1887 by R. E. Montgomery and others, and the charter provided that the principal business office should be maintained at Washburn. The road was constructed as hereinbefore indicated across section 63 from Washburn to Panhandle, and on July 1, 1889, the company executed and delivered to the Central Trust Company of New York a mortgage or trust deed on all of its properties and franchises, to secure the payment of certain bonds, and having made default in payment» *13 in 1898 a suit was instituted by the Trust Company, in the Circuit Court of the United States for the Northern District of Texas, and judgment was rendered and the lien regularly foreclosed on the property described in the mortgage, and the same was regularly sold to Edward Wilder and the sale confirmed by the court. On December 5, 1898, the deed to Wilder was executed by Thomas P. Martin, Special Master in Chancery appointed by the federal court. While the property was held by Wilder the Legislature of Texas passed an act authorizing appellant to purchase the road and to operate it as a part of its line. Acting under that legislative authority, on January 1, 1900, Wilder conveyed the Panhandle Railway to appellant. The general offices of appellant were first located at Ft. Worth, were then legally removed to Panhandle City, Carson county, Tex., then on November 9, 1899, it moved its general offices to Amarillo in Potter county, Tex. The Legislature of Texas, in 1907, authorized appellant to abandon its track between Panhandle and Washburn, and to build its line southwest to Amarillo. Before the latter line was constructed appellant had run its trains to Washburn and thence to Amarillo over the line of the Ft. Worth & Denver City Railway Company. In the act authorizing the abandonment of the line between Panhandle and Washburn it was provided: “The enactment of this law .shall not preclude any person, who may have a legal cause of action against the said Southern Kansas Railway Company for damages, if any, occasioned by reason of taking up and destruction of said track, from prosecuting said cause of action in the proper courts having jurisdiction thereof.” In 1908 appellant, having constructed its direct line from Panhandle to Amarillo, tore up its track between Panhandle and Washburn and abandoned its right of way. Appellee bought the land in 1906, after he knew that appellant intended to tear up its track and abandon the road.
Montgomery swore that there was an agreement between the officers of the Santa Fé Railway Company, of which appellant is a part, and officers of the Ft. Worth & Denver City Railway Company, that the latter should build the Panhandle Railroad and that it should be turned over to the Santa Fé Road as soon as it could pay for the road. He stated that he did not remember the names of the officers of the Santa Fé that made the agreement, but thought that it was Strong, president, or Robinson, engineer, and that Mr. Manvell, who succeeded Strong as presi•dent of the Santa Fé, recognized it. The un-controverted testimony of five witnesses ■showed that the Atchison, Topeka & Santa Fé Railroad property was sold at foreclosure sale on December 10, 1895; that a new company was chartered on December 12, 1895, and took the property and began business on January 1, 1896; that since the reorganization Ripley has at all times been its president, and that Strong, iManvell and Robinson have never had any official connection with the reorganized company, and that none of the officials of the new company ever knew or heard of the agreement testified to by Montgomery.
Montgomery swore that he donated depot grounds and right of way — about 154 acres— to the Ft. Worth & Denver and the Panhandle Roads and “the consideration was the building, establishment, and maintenance of both railways, with their depots and stations on my land, both companies taking possession' of the land so donated and using it as they desired for railway purposes.” He made a deed to the land donated to the Ft. Worth & Denver Road, but gave no deed to the Panhandle Road. I-Ie further testified: “I was one of the incorporators of the Panhandle Railway and a stockholder and director of the company, and its charter provided that its railway should be built over my land, its depot erected, located, and maintained thereon, and that its principal office should'be and remain there forever, and that was the understanding and agreement between us. I can’t tell what officers I had this agreement with as to the establishment and maintenance of the general offices of the building of the road, ov the establishment of its station and depot on my land, but think it was with the president, who, I think was J. P. Smith, Morgan Jones, and probably some of the other officers of the company named in the charter, but I do know that my agreement with them was that this road, with its depot, station, and principal place of business should remain on the land that I donated forever, and I would not have donated this land for any other purpose, except a permanent one.” J. P. Smith was dead at time of the trial, but Morgan Jones swore: “There was no understanding or agreement with any one with respect to the location of the general offices of said company at Washburn, the place named in said charter. The law requires the general offices to be located at a place on the line of its railroad, and we selected that point on the line for the reason that it was the junction point with the Ft. Worth & Denver Oity Railway. My recollection is that there was no discussion among the stockholders or directors with respect to the location of the general offices of said company at Washburn. I determined that that was the place to locate them and had the charter drawn that way. The Panhandle Railway Company, its board of directors or myself never entered into a contract with R. E. Montgomery, or any one else, by which it was agreed to establish and forever maintain the line of railway of the Panhandle Railway Company and depot of said company, or the general offices of said company, or any of them, at Washburn, in Armstrong county, Tex. I have heretofore stated that no such agreement was ever made, as referred to herein. I have heretofore stated that *14 there was no agreement between either the Panhandle Railway Company or any of its directors or stockholders with R. E. Montgomery, in which it was agreed that the general offices of the company should be perpetually maintained at Washburn. I have never heard of such an agreement until I heard of it being asserted in this case that such an agreement existed. The board of directors of the Panhandle Railway Company was composed of the persons named in the charter; my recollection is that I was president of said company at that time. If I was not, I was first vice president and general manager, and was in charge of the property. I never did make or enter into any such agreement or understanding with R. E. Montgomery. If J. P. Smith, or any other officer or director of the company entered into such an agreement, it was unknown to me. Mr. Smith was really only a nominal director, and had no authority to make such an agreement. No one other than the board of directors of said company had the authority, under the charter and by-laws of the Panhandle Railway Company, to have made such an agreement. No officer or officers aside from the board of directors had the authority to make such a contract with ISfontgomery, or any one else. J. P. Smith was not vested with authority to make such a contract.” The board of directors at the time the agreement with Montgomery was claimed to have been made consisted of Morgan Jones, K. M. Van Zandt, J. P. Smith, A. B. Smith, R. E. Montgomery, J. M. O’Neall, David Felsen-held, Henry Walters, A. J. Mayer, and J. T. Granger. Of the number the two Smiths and Eelsenheld were dead at time of the trial; O’Neall resided in California; Walters and Mayer in New York City; and Granger in Washington City; and only Van Zandt, Jones, and Montgomery testified in the case. The two former flatly contradicted the latter as to any agreement as to the permanent location of the right of way and depot grounds. The charter required the principal office of the Panhandle Road to be located at Wash-burn, but of course the charter did not require, as stated by Montgomery, that the road should be built over his land and the depot erected thereon and that they should be and remain there forever. The only evidence of such agreement was the unsupported testimony of Montgomery that he had at some time, with some person or persons, made such an agreement. Of the two persons named by him with whom he thinks to have made the contract, one is dead and the other emphatically denies ever having heard of such an agreement.
With whom was the contract made which Montgomery entered into? Montgomery does not know, for he says: “I can’t tell what officers I had this agreement with, as to the establishment and maintenance of the general offices, or the building of the road, or the establishment of its station and depot on my land. * * * I do not remember who was present at the time of the making of this agreement, but think it was made by Morgan Jones or Peter Smith and in the presence of E. E. Bissell, the chief engineer who built the Ft. Worth & Denver & Panhandle Railway.” And yet upon that uncertain testimony, which was absolutely contradicted by every one who testified about it, a contract is found to have existed with a railroad corporation, upon the breach of which is justified a verdict and judgment for $44,592. No effort was made to show that the corporation had authorized the making of the contract with Montgomery, and if some person had been authorized it was not proved that Montgomery contracted with that party.
If it had been clearly shown that an officer of the railroad corporation entered into the contract with Montgomery, although without authority on the part of the corporation, it might have been held to the contract if it had appeared that the board of directors knew the facts, made no objection to the contract, and acted upon it and received the benefits arising from it. Railway v.
It is the contention of appellee that if Montgomery was wrong as to how the right of way was acquired across his land that appellant should explain it, forgetting that appel-lee was the plaintiff in the case, and the burden of establishing the allegation that a certain contract was entered into by the Panhandle Railway Company rested upon him, and no duty devolved upon appellant except to meet the case made by him. It is not “wholly immaterial” either with whom Montgomery made the contract, for in order to bind appellant the party who contracted with Montgomery must have been authorized by the corporation to make the contract, and the mere fact that it received and used the right of way and depot grounds, could not make it responsible for a contract of which it had no knowledge, which bound it to forever run its road in a certain place and keep its depot on a certain spot. The evidence tends to show that Montgomery was acting as a promoter, and appellee insists that as the Panhandle Railway Company accepted the benefits of the contract, it was bound by it, and cites as his authority Railway v. Granger,
We deem it unnecessary to discuss the different assignments of error, but because no contract was proved upon which to base the judgment for damages, it is reversed and judgment here rendered that appellee take nothing by his suit and pay all costs in tins behalf expended.