Cluthe v. Evansville, Mt. C.&N. Ry. Co.

• Decision Date: 22 June 1911
• Docket Number: No. 21,729.,21,729.
• Citation: 95 N.E. 543,176 Ind. 162
• Court: Indiana Supreme Court
• Parties: CLUTHE et al. v. EVANSVILLE, MT. C. & N. RY. CO.

176 Ind. 162

95 N.E. 543

CLUTHE et al.

v.EVANSVILLE, MT. C. & N. RY. CO.

No. 21,729.

Supreme Court of Indiana.

June 22, 1911.

Appeal from Supreme Court, Vanderburgh County; Alexander Gilchrist, Judge.

Condemnation proceedings by the Evansville, Mt. Carmel & Northern Railway Company against William B. Cluthe and others. From an order overruling a demurrer to objections interposed, objectors appeal. Affirmed.

William Reister and Harry C. Dodson, for appellants. Frank Littleton, Walker & Walker, and Duncan C. Givens, for appellee.

MYERS, J.

Appellee, an alleged corporation of the state of Indiana, instituted an action to condemn certain described lands for its uses as a steam railway, under the eminent domain act of 1905 (Burns 1908, § 929 et seq.). Appellants filed objections, five in number, but have presented here only the fifth, which is as follows: “That the plaintiff has no right to exercise the power of eminent domain for the use sought, for the reason that articles of incorporation, by and through which plaintiff incorporated under the laws of this state, were filed in the office of the Secretary of State, in the state of Indiana, on the 1st day of August, 1906, and that the plaintiff did not within three years after its incorporation begin the construction of its road, and expend thereon 5 per cent. of the amount of its capital, and therefore its act of incorporation is void.” A demurrer was sustained as to each ground of objection, and appellants appeal.

Their appeal is grounded upon section 5318, Burns 1908, of the general railroad act, reading as follows: “If any such corporation shall not, within three years after its incorporation, begin the construction of its road, and expend thereon five per cent. of the amount of its capital and finish the road and put it in full operation in ten years thereafter its act of incorporation shall become void.” Upon the theory that the act is self-executing, and that the failure to comply with that section, ipso facto, operates to annul the incorporation, whilst appellee contends that the forfeiture can only arise from a judicial sentence, at the instance of the state, and that, as the objection does not allege that judicial forfeiture had been declared, the objection was not well taken. It is true that it has been held that such statutes are self-executing. Two notable cases are In re Brooklyn, etc., Co., 72 N. Y. 245, and Brooklyn v. Brooklyn, 78 N. Y. 524, but a later case in that state (New York, etc., Co. v. Smith, 148 N. Y. 540, 42 N. E. 1088) marks the distinction, and the rule in that and most of the states, as does Day v. O. & L. Co., 107 N. Y. 129, 13 N. E. 765, that such clauses as are embodied in section 5318, supra, render the charter voidable at the instance of the state. The distinction is not clearly drawn in New York v. Smith, supra, between conditions subsequent and limitations of the life of corporations, though the court refused to extend the doctrine of the cases in 72 and 78 New York. To the same effect are Briggs v. Cape Cod Co., 137 Mass. 71, disapproving Crease v. Babcock, 23 Pick. (Mass.) 334, 34 Am. Dec. 61, the former opinion being approved in Bybee v. Oregon, etc., Co., 139 U. S. 663, 11 Sup. Ct. 641, 35 L. Ed. 305, which also disapproves the 72 and 78 New York cases, and Oakland v. Oakland, etc., Co., 45 Cal. 365, 13 Am. Rep. 181. See, also, Utah v. Utah, etc., Co. (C. C.) 110 Fed. 879, where the language is very similar to that of the statute before us; Frost v. Frostburg Co., 24 How. 278, 16 L. Ed. 637; Atchafalaya Bank v. Dawson, 13 La. 497; La Grange, etc., Co. v. Rainey, 7 Cold. (Tenn.) 420;Brown v. Wyandotte Co., 68 Ark. 134, 56 S. W. 862;Young v. Webster, 75 Iowa, 140, 39 N. W. 234; Attorney General v. Superior, etc., Co., 93 Wis. 604, 67 N. W. 1138; N. Y. etc., Co. v. N. Y., etc., Co., 52 Conn. 274; Bloch v. O'Conner, 129 Ala. 528, 29 South. 925.

Cases such as In re Brooklyn Bridge, supra, Brooklyn Co. v. Brooklyn, supra, Oakland v. Oakland, etc., Co., supra, Commonwealth v. Lykens, etc., Co., 110 Pa. 391, 2 Atl. 635,Ford v. Kansas City, etc., Co., 52 Mo. App. 439, and others, may be distinguished on the ground that there is a distinction between a condition subsequent, by reason of the failure of which dissolution may be forced at the...