The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-01-12
THE LEASEOFTHE VANDALIA
Judge Gresham Finally Gives Decision
in an Important Railroad Suit.
The Validity of the Yandalia Lease by the
Terre Haute & Indianapolis Railway At
firmed-Local, State and General Notes.

CHICAGO. Jan. I1-Judge Gresham, in the
United States Circuit Court this afternoon,
rendered a decision in the famous Vandalia case
The courtroom was filed with railroad mag
mates, and lawyers of national reputation were
present, who have been engaged in the l1tiga-
ton from time to time. The decision afirms
the validity of the lease to the
rerre Haute s. Indianapolis company. The
case was brought by the ST. Louis, Vandalia &c
Terre Haute Railroad Company against the
Terre Haate g. Indianapolis Railroad Company,
to declare a lease executed by board of direc-
tors of the former road to the latter cor
porAtion null and void. The question
involves over SCI. 600, 900. The bill OF
the compliments holds forth that the
st. Louis, vandalia & Terre Haute Railroad
Company incorporated by the Illinois Legis-
lature in 1865. and the act was amended in 1867,
and by no terms in the act was it authorized to
lease the railroad. The defendant was incorpor-
ated by the Indiana Legislature in 1947, under
the name of the Terre Haute & Richmond Rail-
road Company, and in 1866 it changed it's name
to the Terre Haute g. Indianapolis Railroad
Company. 1t not authorized by it's incorpor-
alton acts to accept execute leases In 1867,
in order to complete the St Louis, Vandaia g.
Terre Haute railway, mortgage all the
equipments of the road was given TO Joseph r.
Thomas, and bonds were issued to the amount Of
d goo, 900, payable in thirty years, with interest
ut z per cent. In 1868 other mortgages
given to Joseph T. Thomas and Chauncey Rose,
and more bonds were issued to the amount OF
az, SOC. 900, payable under the same conditions.
None Of these bonds of 81. 500 900 have ever been
paid, and the provisions for q sinking fund have
been disobeyed. Feb. !, 1868, date prior to
the completion of the road, the then
board of directors executed what the
complainants call "a pretended lease"
to the Terre Haute 81 Indianapolis
road for ninety nine years, by which the lessee
was to get 65 per cent. of the gross receipts from
all the traffic which went over the leased line,
the remaining 80 per cent: to go toward paying
the mortgage bonds of the St Louis, Vandalia
81 Terre Haute line. If this 80 per cent.
not found to be sucientto pay the interest on the
mortgage bonds and sinking fund, along with
the taxes and cosss of maintaining the orRanza-
tion. the lessee was to advance the necessary
amount and account or.it from the yearly re-
ceipts. Jan. IL, 1869, the Terre Haute roads
share in the profits was increased to 20
per cent, instead of Go, and the pro-
maintaining the road should be less than
40 per cent, the excess should be paid over to
the St Louis. Vandalia 81 Terre Haute COM
pany. AT this time the law of Illinois. made so
in 1865, was that railroad company which
was Incorporated within the State should con-
solidate with another road outside the State
without the written consent of all the stockhold-
ers resident within the State. and if such
lease executed it should be null and void.
At that time there were ffty-nine stockholders
in Illinois, none of whom, it is claimed by com
plainant. ever gave written consent to the lease.
July i, 1870, the defendant took possession
under the lease. claiming all rights. and during
It's occupancy received over $4,000. 900.
The complainant demands by its bill that all
profit from the use of it's line should be account
ed for by the Terre Haute road, and that all of
IL should be restored above reasonable disburse-
menrs for the maintenance of the road. In ad-
dition, the ST. Louis a. Vandalia line demands
payment for much of its property has
passed out of the possession Of the Terre Haato
line. 1t is thus claimed that the lease is null
and void, and that, even surprising that it had
been good in law the lessee has not lived up to
the agreement, because it has not handed over
any of the profits to the stockholders of the St
Louis, Vandalia & Terre Haute which
should be in the neighborhood of $500, 900,
and which ought to GO to the payment of
the mortgage bonds. The demurrer of the
Terre Haute road, firstly, declared that the bill
In the first place had no equity second. that if
any injury had been done there was a remedy at
law; third, that 1T was too late to make any fuss
about it now after having neglected it so long;
fourth that the bill too multifarious be-
cause 1t sought to compel cancellation of the
agreement and yet wanted it enforced. and
asked accounting by the defendant as a sup
posed trustee; fifth, that it was contradictory
and inconsistent.