Court Opinion

ID: 6974928
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:09:17.625848+00
Date Added: 2024-06-11T16:08:56.869251
License: Public Domain

Mr. Justice Hand, specially concurring: I concur in the opinion of Mr. Justice Carter (concurred in by Justices Cartwright and Dunn) except in so far as it holds that the semi-annual statements filed by the appellee prior to the year 1905 with the Governor are stated and settled accounts which are binding upon the appellant, and back of which the State cannot go, in the accounting held to be proper between the State and the railroad company, upon the remandment of this cause. As to that part of the opinion I do not concur but most respectfully dissent. In my opinion the Governor, in “verifying and ascertaining the accuracy” of the accounts filed with him by the railroad company, does not exercise judicial powers, but acts, in so doing, only as the agent of the State, and that the- Governor’s powers, as such ag'ent of the State, are limited to a verification and ascertainment of the accuracy of the accounts filed with him by the railroad company; that while he may call for books and papers and may examine witnesses for the purpose of informing himself as to the accuracy of the accounts filed with him by the railroad company, he has no power to go outside of the accounts filed and bind the State, by adjudicating upon and determining matters adversely to the State which have never been submitted to him by the railroad company and which are not included within the scope and purview, of the accounts presented by the railroad company and submitted to him for examination. (Kinney v. People, 3 Scam. 357.) The powers of the Governor in this particular are contained in the following provision of the charter of the railroad company: “For the purpose of ascertaining the proceeds, receipts or income aforesaid, an accurate account shall be kept by said company, a copy whereof shall be furnished to the Governor of the State of Illinois,” and for the “purpose of verifying and ascertaining- the accuracy of such account, full power is hereby vested in the Governor,” etc. The opinion (concurred in by Justices Carter, Cartwright and Dunn,) holds that a quasi fiduciary relation exists between the railroad company and the State; that the knowledge of the amount of the gross earnings of the railroad company rests entirely in the railroad company, and that the duty is cast upon the railroad company to file with the Governor a true and correct account of its gross earnings. With this holding I fully agree, but, after such holding has. been made, for the court to then hold that after the railroad company has filed its accounts the Governor may not rely upon their truthfulness but that it is his duty to investigate their truthfulness and accuracy, and if he fails to malee such, investigation, or if he does make such investigation and fails to discover their untruthfulness, the State is bound, not only by what the accounts show upon, their face, but by other matters which have been concealed from the. Governor or have been omitted from the accounts, is, to my mind, illogical, and inconsistent with the view that the duty rests upon the railroad company to furnish to the Governor a truthful and accurate account of its gross earnings. If, however, it is correct to hold, as does the majority opinion, (which is concurred in -by all the justices other than myself,) that the accounts filed prior to 1905 are accounts stated and binding upon the State, then I insist that all the accounts filed by the railroad company prior to that date are impeached upon the face of this record, and that they may rightfully be opened up and the State allowed to recover seven percentum upon all Items omitted by the railroad company in making up said account's. An account stated amounts only to prima facie evidence that a settlement has been had between the parties to the accounting and a balance struck, and the account may be opened up for fraud or mistake or by showing that any existing item was not incorporated into the account at the time the account was stated and the balance struck. (Kinney v. People, supra; Beebe v. Smith, 194 Ill. 634.) It is averred in the bill, and admitted by the demurrer, that millions of dollars earned on inter-State business, for dray-age, for free use of the charter lines, from eating houses and in the dining car service, for newspaper advertising, rebates, etc., have not been included in the accounts filed by the railroad company with the Governor, and the majority opinion holds that the railroad company should have included these numerous items in its accounts filed with the Governor. The copies of.the accounts incorporated in the majority opinion show upon their face that all these items have been, from the beginning, omitted from the accounts filed with the Governor by the railroad company. These items having been omitted and it being conceded that the railroad company owes to the State seven percentum of the aggregate of these items, which, as a whole, amount to a vast sum, I am unable to understand the force of any course of reasoning which bars the State from the right to recover the specified percentum admittedly due it upon the aggregate of these items. The only attempt to justify the holding of the majority opinion in this particular is, that the averments of the bill as to these omitted items are not sufficiently specific, and that the omitted items do not, in law, constitute separate items. As to the first point, the averments of the bill, I think, are certain and specific. To demonstrate this, I challenge attention to the averment with reference to the item of' eating houses and dining car service, which is in the following language: “That during the period from October 31, 1877, to October 31,-1906, the defendant owned and conducted various eating houses, restaurants and hotels upon and along its said charter lines for the use and accommodation of the patrons of its said charter lines, and which said eating houses, restaurants and hotels were conducted by the defendant in connection with the operation of its said charter lines, and during all of said time the defendant received'from the patrons of said eating houses, hotels and restaurants, each year, large sums of money, the exact amount of which is to your orator unknown; that during the- period last aforesaid the defendant operated on its said charter lines certain dining cars for the purpose of furnishing to the patrons of its charter lines meals, food and drink, and during each year of the period last aforesaid received therefor large sums' of money, the exact amount of which is to your orator unknown, but your orator is informed and believes, and therefore charges the fact to be, that during the period last aforesaid the said defendant' received from the operation of its said eating houses, restaurants, hotels and dining cars divers sums of money, amounting in all to, to-wit, the sum of $1,500,000; that such sums were a part of the total or gross proceeds, receipts or income derived from said charter lines, and it was the duty of the defendant to report the same to the Governor of your orator as part of the proceeds, receipts or income of said charter lines, yet your orator says that the defendant, for the purpose of cheating and defrauding your orator and of minimizing and reducing the amount of such gross or total proceeds, receipts or income of said charter lines, fraudulently failed and neglected to report the said sums so received by it as aforesaid, . and each of them, to the Governor of your orator, and that the defendant has never paid to your orator, or into the treasury of your orator, any percentum upon said sums, nor any of them, so fraudulently omitted by the defendant from its semi-annual statements heretofore made to the Governor of your orator; and so your orator says that the defendant is still indebted .to your orator, on account thereof, in the sum of seven percentum on the said sum of $1,500,000.” And the averments of the bill with reference to the other designated omitted items are equally specific. As to the second contention, the items of earnings from drayage, eating houses and dining car service, newspaper advertising, etc., form just as definite a basis upon which to base an accounting as do the items stated in the accounts filed, as will appear from the copies of the accounts incorporated in the majority opinion. It has never been the view of the railroad company that these omitted items were incorporated in the accounts filed by it with the Governor, but it has been, and is now, its claim that it was not required by law to incorporate these several omitted items into its accounts. For the reasons stated I cannot agree to that part of justice Carter’s opinion which holds that by the failure of the railroad company to file full, accurate and truthful accounts, and the approval or non-approval of such accounts by the Governor, the vast amount of revenue due the State from the railroad company upon these omitted items has been lost to the' State. The majority opinion holds the State is entitled to seven percentum of the railroad company’s earnings from these several omitted items, and it appears from the opinion that such percentum has not been paid. I am unable to accede to the view that the doctrine of accounts stated applies, as between the State and the railroad company, to the accounts filed by the railroad company with the Governor, and think that the railroad company should be required in this suit to show that it has from the beginning fully and fairly accounted to and paid over to the State seven percentum upon its gross or total receipts or income for the entire time fixed by its charter for the payment of such percentum upon its gross earnings.