The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-01-12
AN IMPORTANT DECISION.
JUDGE GRESHAM DECIDES THE TA-
NOUS vANDALIA CASE.
This Suit Involved Over cal, 800. 900,
And by the Decision the Lease Of
the Terre Haute Declared To Be
Valid.

CHICAGO, ILL.,, Jan. II, Judge Gresham,
in the United States Circuit Court, this af-
ternoon, rendered decislonin the famous
Vandalia case. The courtroom was filed
with railroad magnates, aud the lawyers OF
national reputation were present, engaged
in the litigation from time to time. The
decision afiirms the validity Of the lease to
the TcTe Haute company. The case was
brought by the st. Louis, Vandalia &
Terre Haute Railroad company::against the
Terre Haute & Indianapolis Railroad COM
pany to declare lease executed by a
board Of directors OF the former road to
the latter corporation null and void. The
question involved over $2l 100000.
The bill of the copplainants holds forth
that the St. Louis, Vandalia q Terre Haute
Railroad company was incorporated by
the Illinois Legislature in 1865, and the
act was amended in 1867, and by no terms
in the acts was it authorized TO lease the
railroad. The defendant was incorporated
by the Indiana Legislature in 1S47, under
the name of the Terre Haute & Richmond
Railroad company, and in 1865 il changed
its name to the Terre Haute d Indianapo-
lis Railroad company. 1t was not author
lied by its incorporation acts to accept or
execute lease. In 1867, in order TO
complete the st. Louis, Vandalia q Terre
llaute railroad, mortgage on all the
equipments Of the road was given to jos.
T. Thomas, and bonds were issued to the
amount OF Sl,900,0O0, payable in thirty
years, with interest at per cent. In
1868 other mortgages were given TO Jos. L.
Thomas and Chauncey Rose, and more
bonds were issued TO the amount OF 81
GOO, 900, payable under the same condi-
lions. None OF these bonds OF 81, 500, 900
have ever been paid, and the provisions
for a sinking fund have been disobeyed.
February /, 1868, date prior TO the COM
pletion OF the road, the then board OF di-
rectors executed what the complainants
call "a pretended lease" to the Terre
liaute x indianapolis road for 900 years,
by which the lessee was TO get 90 per
cent. OF the gross receipts from all the
traffic which went over the leased line, the
remaining 80 per cent. TO 20 toward paying
the mortgage bonds OF the 81. Louis, Van
dalia x Terre Haute line II this IS per
cent. was not found TO be sufficient TO pay
the interest on the mortgage bonds and
sinking fund, along with the taxes and
costs OF maintaining the organization, the
lessee was TO advance the necessary
amounts and account for IL from the yearly
receipts. January ~, 1869, the Terre
iiaute roads share In the profits was in
creased TO 20 per cent, instead OF 65, and
the provisions made that in case the cost OF
maintaining the road should be less than
20 per cent the excess should be paid over
to the st. Louis, Vandalia & Terre Ilaute
company.
At this time the law in Illinois, made so In
1865, was that no railroad company, which
was incorporated within the State, should
consolidate with another road outside the
State without the written consent OF all
the stockholders resident within the State,
and II such lease was executed il should
be null and void. At that time there were
fifty-nine stockholders in Illinois, none OF
whom, II is claimed by complainant, ever
gave written consent 10 the lease. July /,
1870, the defendant took possession under
the lease, claiming all rights, and duringits
occupancy received over SCI, 10000.
The complainant demands by lis bill that
all profits from the use OF It's line should
he accounted for by the Tcrre Haute road,
and that all OF II should be restored above
reasonable disbursements for the main.
tcnance OF the road. In addition the 81.
Louis and vandalla line demands payment
for 30 much Of Its property M has passed
out Of the possession Of the Tcrre llautc
line. II Is thus claimed that the lease IL
null and void, and that even supposinp
that Il had been good In law, the lessee
has not lived up TO the agreement, because
Il has not handed over any Of the profits
TO the stockholders OF the 81. Louis, Van.
dalia x Terre lIaute, which should be in
the neighborhood Of $500, 600, and which
ought TO go 10 tho payment Of the mort.
gage bonds
The demurrer Of the Terc Haute road
iirst declared that the bill, in the firsi
place, had no equity; second, that II any
injury had been done there Mas a remedy
at law; third, that Il was TOO late to make
any fuss about II now after having neglect.
ed II 10 long; fourth. that the bill was toe
multifarious, because Il sought TO compel
a cancellation Of the agreement and yet
wanted Il enforced, and asked an account.
ing by the defendant ~ a supposed trus.
tee; fifth, that IL was contradictory and
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