stated in the annual report of the Rock Is-The Chicago, Rock Island, & Gulf land road, June 30, 1904: Railway 386.92 "On page 9 of said report, under the head of 'Property' and 'Franchises,' occur the following: "During the year expenditures were made for construction of extensions and completion of system lines as follows: Fort Worth, Texas, to Dallas, Texas .... .. $111,371 55 Yarnall, Texas, to Amarillo, Texas "Consolidation of Texas Lines. "The legislature of the state of Texas, by an act passed March 27th, 1903, authorized the sale of the railroads and properties of the Chicago, Rock Island, & Texas Railway Company, extending from the Red river to Fort Worth, Texas, with a branch from Bridgeport, Texas, to Graham, Texas; the Chicago, Rock Island, & Mexico Railway Company, extending from the Texas-Oklahoma line, near Texhoma, to the Texas-New Jacksboro, Texas, to Graham, Mexico line at Bravo; and the ChoctawOklahoma & Texas Railroad Company, extending the Texas-Oklahoma line near Texola, Texas, to Amarillo, Texas, to the Chicago, Rock Island, & Gulf Railway Company, which had constructed a line of railroad from Dallas, Texas, to Fort Worth, Texas, where it connected with the line first named above. "In accordance with the authority granted, the properties referred to were, by appropriate corporate action, deeded to the Chicago, Rock Island, & Gulf Railway Company on December 1, 1903. "This consolidation permits the properties in question to be operated by one management instead of four separate sets of officials, as heretofore, resulting in economy of operation and greater efficiency in service. "In stating the assets and liabilities of the companies forming the system, the holdings of the Chicago, Rock Island, & Pacific Railway Company in the bonds and capital stock of auxiliary lines, together with loans between system companies, have been eliminated from the liabilities, and a like reauction made in the value of the assets; the figures as stated, therefore, represent the value of the assets and the real liability without duplication." Plaintins also introduced in evidence the twenty-fourth annual report of the Pacific company for the year ending June 30, 1904, in which it is set forth: "They have included therein operations and affairs of the operated lines and auxil iary companies forming the 'Rock Island system.' "In order to make exhibits comparative the figures for the last preceding year have been restated to meet changed conditions due to the including in this report the operation of the auxiliary companies. Texas Red River to Fort Worth, Texas Texola (Texas state line) to 108,615 64 32,138 96 28,013 04 9,646 03 2,328 30 "In addition to the expenditures during the year as above, there has been transferred to property account sundry amounts expended prior to July 1st, 1903, for construction of new lines and shops, and purchase of equipment, which have been heretofore stated in the system assets as 'Advances for Construction and Equipment,' the property represented by such amounts having been deeded to the Chicago, Rock Island, & Pacific Railway Company or the Chicago, Rock Island, & Gulf Railway Company, $23,169. 83. "There has also been transferred to this account the expenditures made prior to July 1st, 1903, for the purchase of shares of capital stock of the Burlington, Cedar Rapids, & Northern Railway Company and the Rock Island & Peoria Railway Company, also cost of stock of the Choctaw, Oklahoma, & Gulf Railroad Company in excess of its par value and the value of bonds of the Chicago, Rock Island, & Texas Railway Company, owned by the Chicago, Rock Island, & Pacific Railway Company, the value of said property appearing upon balance sheets shown in prior year's report as 'Stocks and Bonds of Constituent Companies,' $16,446,009.73. "On page 11 of said report, under the heading 'New Lines Open for Operation,' the following statements are made, viz.: "Additions have been made to the operated system-mileage since the last report as follows: "By the Chicago, Rock Island, & Gulf Railway Company, Fort Worth, Texas, to "These lines, tnus forming the Rock Is- Dallas, Texas, 33.26 miles, opened for operaland system, are the following: tion in December, 1903. "Yarnall, Texas, to end of track west of Amarillo, Texas, 18.40 miles, opened for operation in November, 1903. "Corrections in measurements, Red River to Fort Worth, Texas, .83 miles. "Operated system mileage was decreased 18.22 miles between Yarnall, Texas, and Amarillo, Texas. "Fort Worth, Texas, to Dallas, Texas.This line was completed and the line opened for operation by the Chicago, Rock Island, & Gulf Railway Company, December 1st, 1903. It is 33.26 miles in length, connecting with the line of the former the Chicago, Rock Island, & Texas Railway Company at Fort Worth, and extending to Dallas, where, by an agreement with the Gulf, Colorado, & Santa Fé Railway Company, it has the joint use of the latter company's terminal facilities. "The opening of this line gives the Gulf company direct entrance into Dallas, enabling it to compete for the traffic of that important commercial center. [The list shows that of the 754 shares subscribed, 745 were held by one of the attorneys of the Pacific company, and of the other nine shares, three were held by other employees of that road.] "Under the charter of the Chicago, Rock Island, & Texas Railway Company, it was authorized to construct a line of road from the north boundary line of Texas at a point in Montague county in a southerly direction through Montague, Wise, and Parker counties; the charter, being afterward amended, authorized the construction into Tarrant county. This charter authorized the issuance of first-mortgage bonds amounting to $15,000 per mile for construction and not exceeding $5,000 per mile for equipment, "When the Chicago, Rock Island, & Pacific Railway Company constructed its line to a "On page 12 of said report is the follow-point near the north bank of the Red river, ing statement, viz.: System Mileage Under Construction. By the Chicago, Rock Island, & Gulf Railway Company: ... Amarillo, Texas, to Texas-New Mexico boundary 69.87 "Amarillo, Texas, to Tucumcari, New Mexico. The grading for a considerable portion of this line has been done from Amarillo westward. "It was deemed advisable, however, to suspend active construction until such time as the business outlook would warrant the expenditure necessary to complete." Upon the hearing counsel made an agreed statement of facts, as follows: "The Chicago, Rock Island, & Pacific Railway Company is a consolidated corporation, chartered under the laws of Illinois and Iowa. It has been an existing railroad corporation for over twenty years. In June In June of the year 1892, and for some years prior to that time, the said railway company owned and operated a line of railway from the city of Chicago, in a southwesterly direction through the states of Illinois, Iowa, Missouri, and Kansas to Minco, Indian territory. During the year 1892 this company extended its line from Minco, Indian territory, in a southerly direction to the north boundary line of Texas in Montague county. "The Chicago, Rock Island, & Texas Railway Company was a corporation organized under the laws of Texas on the 15th day of July, 1892. It had an authorized capital stock of $3,000,000 in shares of $100 each, of which 754 shares were subscribed for at the time of its organization. Below is a list of the names of the stockholders and the number of shares of capital stock of this company subscribed for by each, at its original organization. north of Montague county, construction work stopped for a period of time. The Chicago, Rock Island, & Texas Railway Company began the construction of its line at the north line of the state in Montague county some time after the Chicago, Rock Island, & Pacific Railway Company stopped work at a point north of Red river. After construction work began on the Chicago, Rock Island, & Texas Railway Company south of Red river, the Chicago, Rock Island, & Pacific Railway Company constructed its line from the point where work had stopped north of Red river, to a connection with the Chicago, Rock Island, & Texas Railway Company at the state line. The Texas company finished the construction of its line into Forth Worth in the latter part of 1893. Some of the same contractors who constructed the Chicago, Rock Island, & Pacific Railway from Minco south to Red river also took contracts for work on the Texas line. "On the 2d day of January, 1893, after the Chicago, Rock Island, & Texas Railway Company had constructed and was operating its line as far south as Bowie, Texas, it entered into an agreement with the Chicago, Rock Island, & Pacific Railway Company, a true copy of which is hereto attached and marked 'Exhibit A' for identification. This agreement went into effect immediately after it was executed, and was acted upon and observed by said companies until the 14th day of April, 1903, when the same was canceled under authority of the board of directors of each company by a written agreement, a true copy of which is hereto attached, marked 'Exhibit B' for identification. [Exhibits A and B are not printed, as they are the contract and cancelation thereof, both made before the present case arose.] "After the Chicago, Rock Island, & Texas Railway Company had constructed its line, | from its organization until the 8th day of it issued first-mortgage bonds to the ex- November, 1900, during all of which time he tent of $15,000 per mile thereon, and these was one of the general attorneys of the bonds were purchased by the Chicago, Rock Chicago, Rock Island, & Pacific Railway Island, & Pacific Railway Company, for Company. which it paid the Texas line 100 cents on the dollar. The Chicago, Rock Island, & Texas line cost a large sum of money in excess of the amounts for which it issued bonds, which additional cost was paid by application of money subscribed by the stockholders and by borrowing from the Chicago, Rock Island, & Pacific Railway Company, which money so borrowed has long since been returned with interest. "At the time the Chicago, Rock Island, & Pacific Railway Company constructed its line to Red River there was no town or city at that particular point, but there were towns and cities south, east, and west of there in the state of Texas, and a railroad line, being a part of the Missouri, Kansas, & Texas Railway of Texas, 9 miles south of that point. "The Chicago, Rock Island, & Texas Railway Company never issued or sold any equipment bonds, but before it was sold out under special act of the legislature to the Chicago, Rock Island, & Gulf Railway Company, it had purchased and was the owner of between one thousand and twelve hundred freight cars of various kinds. During the time it had no equipment of its own, it rented rolling stock from various railway companies, but principally from the Chicago, Rock Island, & Pacific Railway Company, and paid therefor prices prevailing between other lines of railway in the state of Texas. "After the Chicago, Rock Island, & Texas Railway Company constructed its line into Forth Worth from Bowie, and after the execution of the contract between it and the Chicago, Rock Island, & Pacific Railway Company, of date of January 2d, 1893, the most of the passenger and freight trains running over its line from Red River to Fort Worth and from Fort Worth to Red River were operated beyond its lines as the trains of the Chicago, Rock Island, & Pacific Railway Company. The employees operating these trains were under the control of and paid by the Chicago, Rock Island, & Texas Railway Company while working on its line, and they were also under the control of and paid by the Chicago, Rock Island, & Pacific Railway Company while on its line. The equipment in the various trains went as far north as the business justified, some of the passenger equipment going as far as Chicago, and some to Kansas City, while the freight equipment stopped at points beginning at Chickasha, and from there north wherever the freight was destined. The passenger equipment coming south stopped at Fort Worth, and the freight equipment, where the freight was handled in car-load lots, went to destination, wherever that might be. "When the Chicago, Rock Island, & Texas Railway Company was first organized its general offices were located at Bowie, Montague county, Texas, and remained there for some time, until the charter was amended removing them to Fort Worth. The first general officers elected by the Chicago, Rock Island, & Texas Railway Company, and their residences, were as follows: M. A. Low, Topeka, Kansas, president; J. C. McCabe, Bowie, Texas, general freight agent, and H. F. Weber, Bowie, Texas, vice president, superintendent, secretary, and treasurer. All these men, prior to the time they were elected officials of the Chicago, Rock Island, & Texas Railway Company had been employed in some capacity by the Chicago, Rock Island, & Pacific Railway Company. In 1893 S. B. Hovey was elected vice president of the Texas company and remained the vice president and superintendent of the Chicago, Rock Island, & Texas Railway Company from that date until it was sold out under an act of the legislature in 1903. Mr. M. E. Sebree, who was served with citation in this case, was, for a number of years and until "Whenever necessary the Texas company the date of its sale, trainmaster of the Chi- would operate a local train to handle freight cago, Rock Island, & Texas Railway Com- between Fort Worth and Red River, but as pany and assistant trainmaster of the Chi- a general rule the through service maincago, Rock Island, & Pacific Railway Com-tained took care of this business. It operatpany, with jurisdiction on that line up to ed a local freight and passenger train beChickasha, Indian territory. Prior to the tween Bridgeport and Jacksboro and aftertime he was employed by the Chicago, Rock ward to Graham from the time that branch Island, & Texas Railway Company he had was built until it was sold out, which was been employed by the Chicago, Rock Island, several years. On the through freight trains & Pacific Railway Company as brakeman, the run made by the crews was from Fort conductor, etc. M. A. Low, of Topeka, Kan-Worth to Chickasha and on the through passas, remained the President of the Chicago, senger train the run made by the crews was Rock Island, & Texas Railway Company from Fort Worth to Caldwell, Kansas, these crews being handled and paid as above set | Gulf Railway Company now owns and opforth. Outside the Pullman cars, which erates 386 miles of road, all of which is lowere in each passenger train, nearly all the passenger equipment used by the Chicago, Rock Island, & Texas Railway Company belonged to the Chicago, Rock Island, & Pacific Railway Company, for which it paid rental, as provided for under the terms of the contract herein first referred to. "Defendant's witness will testify that the Texas company paid no part of the cost of operating the Chicago, Rock Island, & Pacific Railway, nor did the Pacific company pay any part of the cost of the operation of the Chicago, Rock Island, & Texas Railway, nor did either of them participate in the earnings of the other. The relationship between the companies is fully disclosed by the terms of the contract dated January 2d, 1893, which was observed up to the time of its cancelation. "The passenger conductors, brakemen, and train guards wear regular train uniforms and on the lapel of the coat are the words 'Rock Island,' and on the cap is the word 'Conductor,' 'Brakeman' or 'Porter.' Any member of these train crews, while working on the line of the Texas company, may be discharged by the proper officer of that company; and while working on the line of the Pacific company may be discharged by the proper officer of that company. Either company, of course, employs additional men employs additional men when needed. "At the time the contract of January 2d, 1893, was canceled, the Chicago, Rock Island, & Texas Railway Company was operating about 140 miles of road, and the Chicago, Rock Island, & Pacific was operating about 3,300 miles. For a considerable time after the Chicago, Rock Island, & Texas Railway Company was Company was built into Fort Worth it employed and maintained at its Fort Worth office a train despatcher, who gave orders for the movement of trains over its line, but as a matter of economy this was abolished, and the Texas company paid a part of the salary of the train despatcher located at Chickasha to give orders for the movement of trains over its rails. "On the 22d day of September, 1903, the Chicago, Rock Island, & Texas Railway Company, under authority of a special act of the legislature known as Senate Bill No. 161, was purchased and absorbed by the Chicago, Rock Island, & Gulf Railway Company, and since that time has ceased to exist as a railroad or do any business as such. "At the time the Gulf company purchased the Texas company it had constructed and was operating a line of road from Fort Worth in Tarrant county to Dallas in Dallas county. The Chicago, Rock Island, & cated inside of the state of Texas. It does not own any railroad outside the state of Texas. It owns at the present time about 1,600 cars, including ballast, refrigerator, and cattle cars, twenty locomotives, and eight cabooses, but does not own any passenger equipment other than the Pullman cars which are used in each of its passenger trains; it rents its passenger equipment from the Chicago, Rock Island, & Pacific Railway Company, and pays therefor current rental charged by connecting lines in Texas. The train crews on both the through passenger and freight trains are handled in the same way that they were when the line into Fort Worth was operated by the Chicago, Rock Island, & Texas Railway Company, but the Chicago, Rock Island, & Gulf Railway Company is now operating in many places local trains between local points in Texas. "The following is a list of stockholders and the amount of stock of the Chicago, Rock Island, & Gulf Railway Company owned by each. [The list is not printed, as the record discloses that, except directors' shares, the stock is held for the Chicago, Rock Island, & Pacific Railway Company.] "The Chicago, Rock Island, & Gulf Railway Company is operating under a lease that part of the line of the Chicago, Rock Island, & Pacific Railway Company which begins at the north boundary line of the state of Texas, extending northward to the town of Terral, Indian territory, a distance of about one and one-sixth miles. "Blank passes, properly signed by different railroads, including the Chicago, Rock Island, & Pacific, Texas & Pacific, Houston & Texas Central, and other lines, are sometimes placed with S. B. Hovey, and when so placed he has the permission of such line to fill in the names of parties and countersign the pass, and when so countersigned such pass is recognized by the line over which it is issued. The local ticket agents of the Chicago, Rock Island, & Gulf Railway Company sell coupons tickets over the Chicago, Rock Island, & Pacific Railway Company's line and nearly all other lines in the United States, which tickets are duly honored by the respective roads over which they read. The Chicago, Rock Island, & Gulf Railway Company operates only one passenger train each way daily between Fort Worth and Dallas, while it operates two trains each way from Fort Worth north. It operates also only a local freight service between Fort Worth and Dallas, but no through freight service. Proper officials of the Chicago, Rock Island, & Gulf Railway | Gulf Railway Company does not now and Company and of the Chicago, Rock Island, & Pacific Railway Company exchange reports with each other as to the amount of exchange business done. "No dividends were ever paid on the stock of the Chicago, Rock Island, & Texas Railway Company, and none have been paid on that of the Chicago, Rock Island, & Gulf Railway Company. The net earnings of the Chicago, Rock Island, & Texas Railway Company were put into betterments and improvements, and the same is the case with the Chicago, Rock Island, & Gulf. "In 1897 L. G. Hastings, then secretary of the Chicago, Rock Island, & Texas Railway Company, reported to the Interstate Commerce Commission that the Chicago, Rock Island, & Texas Railway Company was controlled by the Chicago, Rock Island, & Pacific Railway Company, through the ownership of a majority of its bonds. In 1899 he reported it as controlled by the Pacific company, through its ownership of a majority of its capital stock. "On the 2d day of August, 1904, M. E. Sebree, who resides in Fort Worth, Texas, was trainmaster of the Chicago, Rock Island, & Gulf Railway Company, and was also assistant trainmaster of the Chicago, Rock Island, & Pacific Railway Company between the north line of Texas and Chickasha, Indian territory. He is paid by the Gulf company for the work he does for it and by the Pacific company for the work he does for it. S. B. Hovey is vice president and superintendent of the Chicago, Rock Island, & Gulf Railway Company, and will testify that he is not connected with, nor does he perform any service for, any other railroad. "After making certain changes and addition, the Chicago, Rock Island, & Gulf Railway Company adopted the book of rules issued by the Chicago, Rock Island, & Pacific Railway Company for the control of the operation of its line, and such rules are now in force. The cars and engines belonging to the Chicago, Rock Island, & Gulf Railway Company, when in need of repairs, have the work done at its shops at Fort Worth and Dalhart, if the cars and engines are convenient to these two points; otherwise, the work is done at some other convenient place, either on or off the line of the Chicago, Rock Island, & Pacific Railway Company, wherever the cars or engines may be at the time the repairs are needed. "On the 2d day of August, 1904, the Chicago, Rock Island, & Gulf Railway Company had a different president and altogether different executive officers from any of the lines above listed as included in the Rock Island system. The Chicago, Rock Island, & never has paid any part of the salary of any officer of the Chicago, Rock Island, & Pacific Railway Company, or of any of the lines named as constituting the Rock Island sys| tem. "Before the Chicago, Rock Island, & Gulf Railway Company purchased the Chicago, Rock Island, & Texas Railway Company, the Chicago, Rock Island, & Mexico Railway Company and the Choctaw, Oklahoma, & Texas Railroad Company, M. E. Sebree was trainmaster of the Chicago, Rock Island, & Texas Railway Company, and division trainmaster of the Chicago, Rock Island, & Pacific Railway Company, with jurisdiction to Chickasha, Indian territory. Since the purchase by the Gulf company of the abovenamed Texas lines Mr. Sebree's jurisdiction extends over what were the Chicago, Rock Island, & Mexico Railway Company and the Choctaw, Oklahoma, & Texas Railroad Company; otherwise there has been no change in his employment or jurisdiction for the past five to ten years. "The Chicago, Rock Island, & Gulf Railway Company pays a portion of the salary of a joint train despatcher located at Chickasha, Indian territory, under the same character of arrangement which existed between the Chicago, Rock Island, & Texas Railway Company and the Chicago, Rock Island, & Pacific Railway Company. This train despatcher, in giving orders for the handling of trains on the Chicago, Rock Island, & Gulf Railway Company, is subject to the control, direction, and supervision of the executive officers of the Chicago, Rock Island, & Gulf Railway Company as if exclusively employed by it. "The rails of the Chicago, Rock Island, & Gulf Railway Company on the line running from Fort Worth north connects at the state line with the rails of the Chicago, Rock Island, & Pacific Railway Company. The point of connection is somewhere near the middle of Red river on a bridge. At this particular point there is no town, station, or turnout, and the trains going in either direction do not stop at said point. It was not possible to build a town or station at the exact point of connection." It was further stipulated as to Thomas, the conductor, and Turpin, the ticket agent, after they were served with process, as follows: A. L. Thomas "was, at the date of said service, and is now, and has for many years been, a conductor running on and handling passenger trains for the defendant, the Chicago, Rock Island, & Pacific Railway Company, the Chicago, Rock Island, & Texas Railway Company, and later on the Chicago, |
