The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-11-26
Hawkins & Smith, Ferdinand Winter
and Robert s. Taylor VIII Di-
vide About SI5O,OOO.
CHARTER OF 1s47 UPHELD
ROAD MUST PAY THE STATE ITS
SURPLUS PROFITS.
Opinion Written by Judge Hadley Ex.
haustiveIy Reviews Legal Battle
Opinion I'm Detail.

After desperately-fought legal battle
covering a period of more than a quarter
of century the State has won its suit
against the Vandalia Railroad. The cor
poration, by the decision of the Supreme
Court rendered yesterday, must pay into
the treasury of Indiana a sum amounting
to more than one million dollars in princi-
| pal and interest which the court finds Is
due the State by the act OF 1s47, which pro-
vided that after the stockholders should
receive as dividends amount equal TO
the sum invested and 10 per cent. per
annum. the Legislature might then regu-
late the tolls, and all net profits thereafter.
above sum sufficient to pay an annual
dividend to the stockholders OF Is per cent.
should go to the school fund.
The Vandalia must pay a judgment OF
s3l3,S5 with interest at per cent. Princi-
pal and interest, the judgment amounts to
S1.02S14S. OF this amount William A.
ketcham, attorney general from 1895 TO
1899, will receive, according TO an act OF
the Legislature which was passed before
his last term of olsce expired. 10 per cent.
or $102 Sl4.30. Heavy fees will also be paid
to three law firms which assisted the ex-
attorney general in prosecuting the suit
against the Vandalia. The same act of
the Legislature authorized the attorney
general to pay not exceeding Is
per cent. of any judgment in
addition to the 10 per cent. re-
served for his own fee. The firms OF
Hawkins & Smith and Ferdinand Winter.
of Indianapolis. and Robert S. Taylor, OF
Fort Wayne, will each receive 5 per cent.
Of this amount. 1t is supposed. and the fee
of each firm will be approximately $4,000
The exact amount which will 60 TO the
State for the school fund. providing the
decision is rot reversed by the Supreme
Court of the United States on appeal, is
s771, ,107.
Contract NOT KEPT.
The litigation over the claim made by the
State that the road should pay into the
treasury a sum representing accrued profits
above the amount specified in the act of
1S47 began in 1872, when the prosecuting at
torney of Putnam county began quo war
ranto proceedings. The suit was shifted to
Owen county and dragged for a few years.
and in 1875 the railroad and the State agreed
that suit should be brought in the Marion
county Superior Court to determine wheth-
er any money was due the State. Under
this agreement the attorney general
I
money due the school fund and to recover
money paid to the railroad company for
transporting troops and munitions OF war.
The Vandslia entered demurrers on the
ground of insufficient facts. and the demur-
rers were sustained. Next the case went
to the Supreme Court and the Marion su-
perior Court was sustained on the ground
of irregularity and insufficiency of record
The case rested for few years. and then
the fight was taken by the State into the
Legislature. A law was framed which re-
quired the company to account to the Leg
islature according TO the charter. The
amounts spent In construction and opera
tion from 1s47 to 1873. with the profits
earned in that time, were required to be
shown. Another act of the same year re-
Quired the company to make an account
ing for the common schools, and gave the
attorney general authority to bring suit
against the company because Of its failure
to account The victory in the Legislature
was only WOO by the state after series
of failures. The Vandalia paid no attention
to the legislative enactment, and I'm April.
1897, the attorney general sued the Wanda
lia in the Marion county Superior Court.
The demurrers of the company were not
sustained, and Its 1nal answer was also
thrown out.
Then the case was given TO Noble c.
Butler, master commissioner. who heard
the evidence and prepared report to the
court. After exceptions had been filed by
both sides the issue was settled In the Su-
perior Court by a decision I'm favor OF the
State for Judgment of ssl3sO5. The suit
brought was for 100000
END OF THE BATTLE.
The final step in the battle was taken by
the Vandalia when II appealed TO the Su-
preme Court, the appeal being known a
the Terre Haute & Indianapolis Railroad
Company VS.. State rel. William =.
Ketcham, attorney general
The opinion handed down yesterday by
the Supreme Court was written by Judge
Hadley and Is exhaustive and voluminOus.
Forty-nine pages. typewriter. cover the
law, the evidence. the comments and the de-
cision proper. A concurring and dissenting
opinion was handed down by Judge Jordan.
holding that the federal taxes paid by the
road should have been deducted from the
amount recovered. He says also that III tho
Legislature of 1897 attempted TO increase
the liabilities Of the company or In any
way TO change the obligations under the
charter of 1S47 IL is invalid. The rights OF
the parties 10 the agreement must be deter
mined under the contract OF 1s47. Judge
Jordan holds. the same IL no legislation
had been enacted in 1897.
The decision OF the court. finding for the
State, is based largely upon the construc-
tion of that section of the contract of lSs7
upon which suit was brought by the State.
The section Is as follows:
That when the aggregate amount OF div
idends declared shall amount 10 the full
sum invested and 10 per centum per annum
thereon, the Legislature may so regulate
the tolls and freights that not more than
Is per centum per annum shall be divided
on the capital employed. and the surplus
profits. II any after paying the expenses
and receiving (reserving) such proportion
as may be necessary for future contingen-
cies, shall be paid over 10 the treasurer OF
the state for the use Of common schools.
but the corporation shall not be compelled
by law 10 reduce the tolls and freights 80
that a dividend of Is per centum per anntm
cannot be made: and IL shall be the duty OF
the corporation TO furnish the Legislature
IL required with correct statement OF the
amount of expenditures and the amount a