The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-05-19
EEL RIVER ROAD CASE
LEASE GIVEN TO THE WABASH COM
PANY NULL AND VOID.
An Important Decision by the SUI
preme. COurt-Eel River Com
pany's Charter Forfeited.

Il
affirming the opinion of the Howard Cir
cult Court, to the effect that the Eel River
Railroad Company had forfeited its char
ter by abandoning the operation Of the
road. and that the lease given by the Eel
River company to the Wabash Railroad
Company was null and void.
In so far as is known by the attorneys
of this city the decision is the first that
has been given by any court in the United
States, and as consequence will prove of
great interest, more especially to those in
terested in corporations or the operation
of franchises. The present case was an &C
ton by the State on relation of the prose-
cutting attorney of Cass county, to for
felt the corporate franchises OF the Eel
River Railroad Company, and to restrain
the Wabash Railroad Company from oper-
ating the Eel River companys line be-
tween Logansport and the town Of Butler,
De Kalb county.
About twenty-five years ago the Eel
River company built railroad ninety-four
miles long, extending from Logansport to
Butler. The line was built to compete with
the road owned by the Wabash company.
which runs west from Toledo to Logans-
port The townships through which the
road was built gave over 100000 toward
its construction. The road, which was pre-
sumably built as a competing line. a few
years after it's construction was leased to
the Wabash company for term of ninety
nine years, with the privilege Of per-
petual renewal. Only a few trains were
run over the road by the Wabash company
and the road and tracks were gradually
permitted to become out of repair.
SHOPS REMOVED.
The Wabash company finally built road
from Chill to Peru and removed its round
house and shops from Logansport to the
latter city. After that it ran trains on the
Eel River Railroad to Peru, almost entire
ly abandoning the use of twenty-five miles
of the road between Chill and Logansport.
1t was shown to the court that from the
time the Wabash company gained control
of the Eel River road it was only used as
q feeder to the main line of the Wabash
company. 1t was shown also that the Eel
River road had no representation In inui-
ana, its officers living in Boston After
hearing testimony to the effect that the Eel
River road was the natural competitor "a
the Wabash road for business, the CIRCUIT
Court of Howard county decided that the
Eel River company had forfeited Its char-
ter and that its franchises were forever
annulled and the corporation dlssoiVeo, anu anu
that the Wabash company be ousted from
the enjoyment of those franchises under its
lease A receiver was appointed for the Eel
River company. On appeal 1t was objected
that the court had never acquired Julio
diction of the Eel River company because
1t had moved its general offices from Lo-
gansport before the suit was brought IL
was shown that the only officeS the COM
pany had was in Boston, and the only busl-
ness transacted there was to divide the
rent paid by the Wabash company for the
use of the Eel River road.
Judge Bowling, who wrote the opinion
of the court, said that as long as the Eel
River company made any effort to carry
out the purposes of its organization py
operating its road, its general offices, ana
therefore, its residence, was In Cass county.
He said that being domestic corporation
4 was bound to have a residence In the
State, and could not lose its residence In
Cass county unless it had gained a resi-
dence somewhere else, which II had not
done. He said that a domestic corpora
ton owed it as a duty TO the State to main
tain a place of residence, at which 1t may
be called upon to show cause why its fran
chise should not be seized and the cor
loration dissolved.
Judge Downing enumerated the illegal
acts of which the company was alleged TO
have been guilty, and declared such acts
on the part of corporation TO be Tor
Didden by pubic pOllcy. he SdlQ tnat the
fact that the lease made by one defendant
company to the other was not authorized
by the statute, and that its execution and
consequent abandonment of its railroad by
the Eel River Railroad Company were
against public policy. and that the Wabash
Railroad Company had destroyed a large
part of the road and used the rest so that
It could not serve its original purpose as
competing line justified the court in con-
clusively presuming that an injury to the
public resulted from such unlawful acts.
All these acts, in connection with the at
tempted migration of the Eel River Rail-
road Company from the State were suf-
ficient in law, he said, to sustain judg-
merit of custer and dissolution OF the COR
poration.
ATTORNEY GENERAL TALKS.
Attorney General Taylor. in speaking OF
the decision yesterday, said that it's effect
would be to require railroad companies
to hereafter operate the roads for which
they have franchises, and also that 1t will
prevent any railroad company from maxi
ing a perpetual lease or even lease for
a term of years of all it's property and fran
chises. However" said he, 'it will not
prevent one railroad from permitting the
trains of another railroad to run over a
portion or all of its tracks. This is mat
ter that is very common and very properly
allowed in Indiana" Mr.. Taylor said the
decision would not prevent the Wabash
from operating its trains over the Eel River
road, but IL would require the future own
crs of the Eel River road to keep IL in OPP
Grafton. in other words" said Mr.. Tay-
lor, mo corporation, be il a railroad COM
pany or otherwise. can become a tramp
company, leave Indiana and have its Offices
elsewhere, turn over all its property and
franchises TO another corporation and
thereafter expect to live as an Indiana COR
poration."
The decision will not affect the people
along the line OF the Eel River road, TO-
they will have railroad In full operation
just the same. but IL will very materially
effect the stockholders in the East. who
have done nothing but accept dividends
on their stuck refusing To onerafe their