Terre Haute & Indianapolis R. Co. v. Ketcham, 194 U.S. 579 (1904)

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Terre Haute & Indianapolis Railroad Company

v. Indiana ex Rel. Ketcham
No. 264

Argued April 29, May 2, 1904
»Decided May 31, 1904
194 U.S. 579

ERROR TO THE SUPREME COURT

OF THE STATE OF INDIANA

Syllabus

Where the. state court has sustained a result which cannot be reached except on what this Court deems a wrong construction of the charter without relying on unconstitutional legislation, this Court cannot decline jurisdiction on writ of error because the state court apparently relied more on the untenable construction than on the unconstitutional statute.

A provision in a charter of a railroad company that the legislature may so regulate tolls that not more than a certain percentage be divided as profits to the stockholders and the surplus shall be paid over to the state treasurer for the use of schools, held in this case to be permissive, and not mandatory, and that, until the state acted or made a demand, the railroad company could act as it saw fit as to its entire earnings.

When, therefore, the company surrendered its original charter and accepted a new one without any such provision, and there had up to that time been no attempt on the part of the state to regulate tolls nor any demand made for surplus earnings, the company was free from liability under the original charter, and subsequent legislation attempting to amend its charter or the general railroad law would not affect its rights.

The facts are stated in the opinion of the Court.