The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-06-04
THE VANDALIA HEARING
ARGUMENT ON DEMURRER IN THE
SUIT FILED by THE STATE.
Contentious Made by r.. o. Hawkins,
Ex-Judge II. s. Taylor, John G. Will
iams and S. o. Pickens.

Argument of the demurrer of the defend
ant in the suit of the State of Indiana
against the Terre Haute 81 Indianapolis
Railroad Company was begun in Room 3,
Superior Court, yesterday before Judges
McMaster, Carter and Harvey. The argu-
ment will continue to-day.
The suit is to recover money from the
corporation alleged to be due the school
fund The State asks that an accounting
be had under the direction of the court
and that decree be rendered in favor of
the plaintiff for s., 900. The attorney gem
eral is assisted by r. O. Hawkins, ex-
Judge r. S. Taylor, of Fort Wayne, and
Ferdinand Winter. The railway corporation
is represented by Samuel o. Pickens, John
G.. Williams and Lawrence Maxwell, of
Cincinnati
The argument was opened by Mr.. Pick
ems, who recited briefly the allegations of
the complaint. He devoted some time to
the special construction of Sections
%, % and "a of the original act
of 1S47, the act under which the
railway companies operates its lines The
most important of these sections the at.
torney quoted as follows: THAT when the
aggregate amount of dividends declared
shall amount to the full sum invested and
10 per centum per annum thereon, the Leg
islature may SO regulate the tolls and
freights that not more than 10 per centum
per annum shall be divided on the capital
employed and the surplus profits, if any
after paying the expenses, and reserving
such proportion as may be necessary for
future contingencies, shall be paid over to
the treasurer of state for the use of COM
mon schools but the corporation shall not
be compelled by law to reduce the tolls and
freights so that dividend of is per centum
per annum cannot be made, and it shall
be the duty of the corporation to furnish
the Legislature, if required with a correct
statement of the amount of expenditures
and the amount of profits after deducting
all expenses, which statement shall be
made under the oath of the officer whose
duty it shall be to make the same"
Mr.. Ptckens made the general statement
that under the provisions of the company's
charter no claim could have arisen in favor
OF the State for or account of the school
fund until the Legislature should regulate
the tolls and freights and there having
been no such regulation during the exist
ence of the charter every dollar Of tolls
and freights charged and collected by the
company as between the company and the
State and the school fund vested in and
belonged absolutely to the company. In
view of the history of the State. at the
time of the granting of defendants char
ter" said he, sit is perfectly clear from
the terms of the charter that the chief OBJ
it was to secure the construction Of a rail-
road across the State from east to west
through the state capital. That was the
era of internal improvements under leglsla-
tive charters The acts of the General As
sembly of those years are full of charters
to construct turnpikes, plank roads, canals
and railroads. The increase of the school
fund was not the object of the charter
That was merely a possible incident of the
main object and depending upon the action
of the Legislature. The twenty-second sec
ton gives the corporation absolute power
to charge and receive such tolls and
freights as it pleases, limited only by, the
interest of the company, and it is author
lied to pay in dividends to the stockhold-
ers all the moneys received from tolls. aft
er deducting expenses. The company was
required to keep an account of receipts and
expenditures and to furnish a sworn state
ment thereof TO the Legislature if required
in order that the Legislature might deter
mine whether the contingency had arrived
when it could regulate the tolls.
LEGISLATURE4A AND TOLLS
at is not the corporation that is re-
quired by the terms of the charter to regu-
late the tolls and freights so that not more
than Is per centum per annum shall be di-
vided on the capital employed. 1t may raise
and lower the tolls and freights as it
pleases, limited only by its self-interest. 1t
is to the Legislature that the power to reg
ulate the tolls and freights is reserved and
the time when it may do so is when the
aggregate amount of dividends declared
shall amount to the full sum invested and
10 per centum per annum thereon and the
Legislature is to ascertain if this time has
arrived by the sworn statement of the ex-
of the twenty-third section it
had the power TO require the
reasonable and fair construction of the
terms of this charter, we submit, precludes
the view that Section % is in and of itself
a. limitation upon, the profits
cOnDanV
ton of the surplus earnings in excess of
the amount of that limitation to the school
the theory that by the terms of the char
ter some action by the Legislature regu-
lating the tolls and freights was necessary
before the State could claim TO recover
money for the school fund. But 1t is claimed
that certain alleged fraudulent acts of the
corporation is sufficient excuse for non
action by the Legislature. The State will
not be allowed to plead as an excuse for
not regulating the tolls and freights that
the defendant fraudulently manipulated its
finances and concealed from the Legisla-
ture the true sum invested in the road and
bribed and seduced the Legislature and
committees thereof to nonacuon. The Leg
islature by the twenty-third section re-
served the power to require the corpora
ton to furnish the Legislature with a cor
rect sworn statement of the amount of eX-
penditureS and the amount of profits after
deducting al expenses. This statement was
never required. This court will not inquire
into the charge of bribery of the Legisla-
ture and committees
ute of 1852 provides that all railroad COM
panies then existing under special charters
may accept the provisions of that statute
On Jan. II, 1873, the defendant accepted
the provisions of this statute. It's special
charter was thereby surrendered and alb
rogated and put an end to. And the State
had no power to add to and take from
that charter by subsequent legislation so as
to affect the rights and liabilities of the
corporation. Therefore the several acts of
1897 were void and of no effect as to the
rights and liabilities of the defendant BY
the act of 1913 the section of the charter
reserving to the State the right to alter or
amend the charter was repealed. This was
a surrender by the State of all right to
amend the charter by subsequent legisla-
ton except the right to regulate the tolls
and freights under the provision of Section
%. Therefore the several acts of 1897 pur-
porting to amend or affect the charter We're
void and of no effect.
Attorney Pickens gave three reasons for
his contention that the several acts of 1897
purporting to affect or amend the charter
of 1S47 are unconstitutional and void. First
because their enforcement by this proceed
ing would impair the obligation of a con-
tract by divesting rights of property ac-
quired and vested under the terms of de-
PENDANTS charter. Second, because their
enforcement would take private property
for public use without just compensation
Third because their enforcement would de-
prive the defendant of it's property without
due process of law. Quoting from the Con-
stitution of the United States the attor-
ney said: THE contracts of a state are
as much within the restraints imposed by
the Constitution as if they were made by