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


tions under which IT might be held and
owned by them individually, without the
pecuniary equivalent that would have been
required upon a mere increase of the capt.
tai stock The stock dividends of S2ll, 800
and 1916 100 were. therefore, dividends with
in the spirit as well as the letter of the
contract, and are, accordingly, included oy
me in the aggregate OF dividends that were
declared by the corporation.
ION the other hand. the State insisted
that the sum of Sill, 1S7.4S which was paid
by the corporation as a Federal tax on It's
dividends should be added to them and in
cluded in the aggregate of dividends on
the ground that IL was a liability of the
stockholders which was paid by the cor
poration for them. But after several d.
vided and conflicting opinions the Supreme
Court oil the United States unanimously
held in Railroad Company VS.. Collectors.
etc, 100 L. s.. $50, and held since I'm United
States VS. Erie Railway Company, loo L.
s.. 327 and Memphis & Charleston Rail-
road Company VS.. United States, los L. s.,
22S that the federal tax on the dividends
of a corporation is liability of the cor
poration itself and not liability of its
stockholders and the amount of the fed
eral tax as aforesaid is accordingly ex
cluded from the aggregate OF dividends
herein In accordance with these views L
find and report that the aggregate amount
of dividends which had been declared on
the completion of the railroad and at the
time when the corporation surrendered its
special charter on Jan. IL. 1873, was $.3i1,-
-.
amount TO the full sum invested with 10
per centum per annum thereon; and
further find and report that the aggregate
amount of dividends declared by the cor
poration did not at any time between the
date of the special charter and Jan. IL, 1873,
amount to the full sum invested with 10
per centum per annum thereon, as more
fully appears from the tables hereto an
neXed.
Another condition of the promise by the
corporation was that IL would pay such
amount of the surplus profits, If any, as
remained after reserving such proportion
as may be necessary for future contin-
gencies. If balance remained the STATE
might recover it; If none remained there
could not be a recovery by the State. The
existence of such balance is a condition
precedent to the right of recovery II Is
a part of the plaintiffs case to prove the
happening of an event, or state OF Cir
cumstances. which is fixed by the con-
tract as condition precedent, and 1t is
not excused from doing so by the mode
in which the books of the corporation were
kept II Burns's r. s., 1894, Section 373;
Watson VS., Deeds, Ind. App. rs; Johnson
VS.. Bucklen. 9 Ind. App. 154; Scouton vs.
Eislord Johns, IS; Bush VS.. Barnard, s
Johns, 407l There is an entire failure Of
proof on that point.
EVIDENCE BY THE STATE.
Evidence was introduced by the State
TO show that the corporation invested mon
ey in government bonds: that II purchased
stock in other corporations that 1T pur-
chased It's own stock; that its purchase Of
it's own stock was made at an exorbitant
price and for illegitimate purpose; that
stock was improperly issued: that stock
dividends were illegally declared; that it
made donations OF money to the volunteer
fund and an agricultural society. Some OF
these transactions were ultra wires; others
were not. But as IL does not appear that
these transactions of the corporation were
had and done with the fraudulent purpose
of evadng a liability to the State, or pre-
venting or delaying the contingency on
which that liability depends; or that there
is or ever has been any such privity OF re-
lation between the parties as would en-
title the State to challenge those transac-
tons of the corporation In the present
suit: or that, If they were successfully
challenged ii would change the result, a
further consideration of them. or finding
thereon is deemed unnecessary.
ION the hearing before me the corpora
ton offered in evidence under its answer
of former adjudication certified tran
script of the record and proceedings of
the owen Circuit Court and other items
of proof which are mentioned in my re-
port of the evidence and they were ex-
cluded by me in accordance with the rul-
ingS and opinions of the Superior Court.
In accordance Herewith I refused to adj
NIT all the evidence of a former adjudica-
ton, except such as is contained in a GER
titled transcript of the record and pro-
ceedings of the Superior Court of Marion
county in the suit of the State Of Indiana
on the relation of the attorney general
against the Terre Haute & Indianapolis
Railroad Company, as the same appears in
my report of the evidence, and on that
evidence / find n fact and as a con-
clusion of law from the same that the
Judgment in that case is not a bar to the
present suit. AS conclusion of law from
all the facts which / have found and re-
ported herein, and upon the whole case,
md he plc init &c MT
entitled to recover from the defendant any
sum whatever.