State, ex rel. Ketcham v. Terre Haute & Indianapolis Railroad Company

• Court: Indiana Supreme Court
• Writing for the Court: Montgomery, J.
• Citation: State, ex rel. Ketcham v. Terre Haute & Indianapolis Railroad Company, 77 N.E. 1077, 166 Ind. 580 (Ind. 1906)
• Decision Date: 29 May 1906
• Docket Number: 20,660
• Parties: State, ex rel. Ketcham, v. Terre Haute & Indianapolis Railroad Company

77 N.E. 1077

166 Ind. 580

State, ex rel. Ketcham, v. Terre Haute & Indianapolis Railroad Company

No. 20,660

Supreme Court of Indiana

May 29, 1906

From Superior Court of Marion County (54,555); Vinson Carter Judge.

Suit by the State of Indiana, on the relation of William A. Ketcham as Attorney-General, against the Terre Haute &amp Indianapolis Railroad Company. From a decree for defendant plaintiff appeals.

Affirmed.

William A. Ketcham, Roscoe O. Hawkins, Robert S. Taylor and Ferdinand Winter, for appellant.

John G. Williams, S. O. Pickens and Lawrence Maxwell, Jr., for appellee.

Montgomery, J. Gillett and Monks, JJ., Concur in result Hadley, J., not Voting.

OPINION

Montgomery, J.

This suit was brought by the State, on the relation of its Attorney-General, against appellee, for an accounting and to recover, for the use of the common school fund, the net profits in excess of fifteen per cent per annum on the true cost of the construction of appellee's railroad, from the date when the total net earnings equaled such cost with ten per cent on the same added to January 17, 1873. A judgment for $ 913,905 in favor of the State was affirmed by this court. Terre Haute, etc., R. Co. v. State, ex rel. (1902), 159 Ind. 438, 65 N.E. 401. Upon a writ of error this judgment was reversed by the Supreme Court of the United States. Terre Haute, etc., R. Co. v. Indiana (1903), 194 U.S. 579, 24 S.Ct. 767, 48 L.Ed. 1124.

The cause was duly certified to the trial court with a mandate for further proceedings not inconsistent with the decision of the Supreme Court of the United States. Appellant thereupon filed an amended complaint, to which appellee demurred for want of facts. This demurrer was sustained, and appellant declining to plead further judgment was entered in favor of appellee. The correctness of that ruling is the only question presented for our decision.

The judgment of the Federal Supreme Court so far as it construed the statutes involved and determined the rights of the parties is binding upon us. The opinion of that court declares that the right, in the contingency named, reserved by the State to regulate tolls, and to apportion profits between the company and the school fund, was not mandatory but merely permissive and discretionary, and the asserted liability to account for excessive profits was not absolute, but dependent upon prior legislative action. That court among other things said: "The corporation was allowed to make and to distribute or retain such earnings as it could, subject to the power of the state in certain events to require it to pay over extra profits, or to sell its stock. But which, and whether the State would make either demand, was left undecided, and until the State elected the whole earnings of the company were its own. It follows that when the company surrendered its charter in 1873, there having been no attempt by the State to regulate tolls before that time, the company was free from liability or the possibility of demand."

The basis of the cause of action, as pleaded in the amended complaint, is the same as in the original complaint. The Supreme Court of the United States having held that a regulation of tolls and a requirement that the excess, after such regulation, should be paid over for the use of the common schools was, by the contract when properly construed, a condition precedent to any right of recovery, and that the legislative acts of 1897 relating to this subject were invalid, to avoid the effect of this holding the amended complaint charges that the requisite legislative regulation and apportionment prior to January 17, 1873, was prevented by the publication of false reports, and by the fraudulent and corrupt acts of appellee in bribing a member of the senate and three members of the house during the session of the General Assembly of 1869.

It is conceded by appellant's learned counsel that the enactment of appropriate legislation is a condition precedent to the recovery of the money now demanded; but it is argued that appellee, by its fraudulent and corrupt acts, having prevented performance of such condition on the part of the State, performance will be excused to the end that appellee may not be permitted to profit by its own wrong. The principle that an evildoer cannot take advantage of his own wrong and profit thereby, when properly invoked, is universally applied and one of the most salutary known to the courts. Broom's Legal Maxims, *275; Riggs v. Palmer (1889), 115 N.Y. 506, 22 N.E. 188, 5 L. R. A. 340, 12 Am. St. 819; Ritter v. Mutual Life Ins. Co. (1898), 169 U.S. 139, 156, 18 S.Ct. 300, 42 L.Ed. 693; Bond v. Hopkins (1802), 1 Sch. & Lef. 413; Attorney-General v. Ansted (1844), 12 M. & W. 520; Singleton v. Williamson (1861), 7 H. & N. 410; Wonderly v. LaFayette County (1899), 150 Mo. 635, 51 S.W. 745, 45 L. R. A. 386, 73 Am. St. 474; Graver v. Faurot (1896), 76 F. 257, 22 C. C. A. 156; Pulteney v. Warren (1801), 6 Ves. 73; Angle v. Chicago, etc., R. Co. (1894), 151 U.S. 1, 14 S.Ct. 240, 38 L.Ed. 55.

If appellant's right of recovery were absolute and for a specific or definitely ascertainable sum, and the only obstacle to the maintenance of the suit were the want of a timely demand, the omission of which was due to the...