The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-04-20

1T was, of course. the natural and I'M
avoidable result of some of these corporate
transactions. which were perfectly legiti-
mate in themselves. to delay the contin-
gency upon which the liability of the cor
poration to the State depended. But in the
absence OF any proof of actual or positive
fraud the part of the corporation, 1t
cannot be held that the contingency was
improperly delayed. fraudulent intent
on the part of the officers and directors
of the corporation is not inferable from
the mere fact that a delay OF that contin-
gency was one of the results of the proper
discharge of their legitimate functions and
duties. The presumption is In favor OF
the bona fides of their acts in this respect
as well in other respects, and it is
supported by contemporaneous declara-
tons in their official reports Any delay
the contingency itself as it was fixed by
the Legislature and Incorporated in the
body of the contract.
THE STATES CONTENTION.
The State contended upon the argument
before me that it was the duty Of the cor
poration TO hasten and accelerate in every
possible way the arrival of that contin-
gency; TO make it happen sooner than ii
would otherwise happen in the natural
and ordinary course of events. and as
| much sooner as possible; and that in the
performance of that duty it might have
| charged exorbitant tolls and freights and
| declared and paid enormous dividends
which might have been Immediately in
| vested in the capital stock; and that 1t
\ thereupon might have Immediately in
creased the capital stock for the purpose
/ OF furnishing an opportunity Tor the IN
| vestment of these dividends, etc. But am
| wholly unable to discover either in the
| charter or elsewhere any warrant OF law
| for that contention, or the extraordinary
devices which it seems TO require. The
| terms of the contract do not impose any
| such duty on the corporation. They do
not become operative as contract until
| that contingency has arrived friedman VS..
| Aetna Insurance Co, 40 Wis, 1881 When
| the contract was made IT included a grant
| for which there is a special consideration
| as well as the general consideration or
| the public benefit. The special considera-
| ton for the grant is a conditional prom
| Use The condition of that promise Is that
on the happening of an event which is
| described in the contract the corporation
4 shall pay the State a sum OF money III
| that event never happens the corporation
| is not required to pay the State anything
| The happening of that event Is expressly
| made by the contract a condition prece-
| dent to the liability of the corporation on
| it's promise. Until that event happens
| there is not any contractual oDngation on
| the part of the corporation which is en-
| forceable in a court Of law or equity I'M
| less the condition has been rendered In
| poration AS the duty of Fastening or
| acceerating the time when the contract
| becomes operative must inevitably exist
before that time arrives it is evident that
| such a duty could not have been imposed
| by the contract itself.
| IF the corporation is chargeable with
| such a duty in the present case II is
| chargeable Herewith upon theory whlch
1 overthrows the whole contract. In urging
| that the corporation is chargeable with
! such duty the State assumes that, under
| the contract, the happening of the event
| which is the condition of the promise by
/ the corporation is dependent on Its Will
\ and pleasure and that the will and pleasure
| of the corporation are controiled py a duty
which ii owes the State independently
| of the contract But if the happening or
| that event is susceptible of being advanced
| at the will and pleasure OF the corpora
| tion under the contract, it is equally sus-
| ceptible of being delayed at the will and
| pleasure of the corporation; and III the
| condition of the promise is dependent on
| the will and pleasure OF the promisor IL Is
/ a promise to pay sum of money at its
| own will and pleasure. which is not con-
| ditional promise an effective promise
| of any sort; and the grant. which does not
| expire until the promise takes erect, would
| become perpetual as well as irrevocable-
| IF there was any duty which the cor
| poration owed the State, independently OF
| the special contract, it must have grown
| sovereign and its creature which, according
| to Mr.. Justice Story, in Dartmouth Col
| lege VS. Woodward. supra, is implied
on the part of the grantees, In consld-
! Grafton of the charter, that they will per-
| form the duties and exercise the author
| tiles conferred by it, But the present suit
is not upon that contract and is not an
| appropriate remedy for a breach or duty
| under it, The proper remedy Tor any
| breach of duty under that general con-
| tract is a proceeding i'm the nature OF
quo warranto, and the corporation is not
| collaterally assailable for such breach
| of duty in the present suit which is upon
| the special contract only.
| "An incident of that contingency was the
tlatin of TOLL nd
/ one of the charges in the complaint tnat
| these and other corporate acts were also
| for the fraudulent purpose. of preventing
| such regulation. There is not any PROOF or
| that charge and, on the contrary II seems
| TO me that there are some facts which form
| a part of the history of the times, and are
within the judicial knowledge of the court
| which are entirely inconsistent with the
| verify of that and other like charges. An
| examination of the statutes of Indiana i'm
| mediately before and after, and at the time
| the special charter I'm this case was en-
| acted, shows that there were numerous
| other special charters of like tenor and ef-
feet enacted by the Legislature. instead
| OF realizing or endeavorlng 10 reallze any
| thing for the common schools under the
| provisions of these charters. the Legisla-
| ture by general act for the incorporation
of railroad companies, which was passed IN
| 1852 and went into effect in 1853 and was
quite as liberal in its terms as the special
charters. furnished full and free oppOr-
| tunity the corporations that had been
organized under them to relieve themselves
| of all pecuniary liability to the State for
the benefit of the common schools by the
| mere abandonment of the special charters
| for the general charter. There never has
| been any regulation of tolls and freights by
| the State, and, since the adoption of our
| present Constitution, a regulation of them
| could have been made only by a general
| law, and an exemption from such general
| regulation has therefore been practically
| worthless. If the contention of the State
| were adopted it would be necessary to hold
| that the corporation has been seeking to
| avoid by its fraudulent conduct pecuniary
| liability for nearly three millions of dollars
| which ii might have legally avoided in 1858
| before any part of 1t accrued, or at any
| time since; and that it has resorted to
/ such fraudulent conduct in order to retain
| privilege which every other railroad cor
| poration in the State has actually enjoyed
| for nothing. 1t does not appear that the
| corporation availed itself of its privilege
by charging higher tolls and freghts than
4 other railroad corporations even If 1t could
| have done so without a transgression of
| memorable laws of trade and commerce
| that would have beer injurious to its inter
| ests; or that IL enjoyed any other benefits
| of its special exemption from a potential
| regulation of it's tolls and freights than
| such were enjoyed by every other rail-
| road corporation In the State. My previous
der that portion OF the complaint which
| acts or omissions for the purpose of delay
| ing the contingency upon which its liability
| TO the State depends, makes il unnecessary
| for me to enlarge any further upon these
matters; and i further find and report that
| the State has not shown any legal or equit-