Turnpike Companies - Montgomery InGenWeb Project

State vs. Crawfordsville & Shannondale Turnpike Co. State Ex rel. Howard vs. Crawfordsville & Shannondale Turnpike Co Filed June 9, 1885 Corporation – Consolidation with another – Judicial Annulment – Legal Effect. A turnpike road corporation which attempted a consolidation with a similar corporation, which consolidation was subsequently held by the courts illegal and void, did not cease to be a corporation and forfeit its corporate property and franchises, because it did not, during the attempted consolidation, and before the same was declared illegl and void, keep up its separate organization and separately exercise its corporate franchises. Appeal from Montgomery Circuit Court FM Howard & Tompson, Herod & Thompson for appellant Kennedy & Kennedy, Paul & Humphries & EC Snyder for appellee. Howk, J. This is an information in the nature of a quo warranto, in the name of the state on the relation of Frank M. Howard, prosecuting attorney of the 22nd judicial circuit, as plaintiff, against the Crawfordsville & Shannondale Turnpike Company, as defendant. The cause was put at issue and tried by the court, and, at the defendant’s request, the court made a special finding of the facts and stated its conclusion of law thereon. Over the exception of the plaintiff’s relator of the court’s conclusion of law, judgment was rendered thereon for the defendant. In this court the only error relied upon by the plaintiff’s relator for the reversal of the judgment below is that the trial court erred I its conclusion of law upon its special finding of facts.

The court found the facts of this case to be substantially as follows: On the 31st day of August 1865 there were organized under the statue the Crawfordsville & Darlington Turnpike Company and the Crawfordsville & Shannondale Turnpike Company, each of which companies were valid and legal corporations, with articles of association in due form, which articles of association of each of such companies were duly filed in the recorder’s office of Montgomery County, wherein such companies were organized. Each company organized, elected the proper officers and obtained the consent of the board of commissioners of such county to construct its line of road upon the public highway described in its articles of association, which had been a public highway for 50 years continuously. Each corporation built its road. The Crawfordsville & Darlington Turnpike Company built six miles of road at an expense of $10,000 and the Crawfordsville & Shannondale Turnpike Company built 7 miles or road, at an expense of $12,000. After such roads were completed, towit on November 19, 1866, the two corporations, by order of the board of directors of each corporation, attempted to consolidate themselves, and to assume the name of the Crawfordsville & Shannondale Consolidated Turnpike Company. The board of directors of each company agreed to such attempted consolidation, and so did all the stockholders of the two old corporations. The stockholders and directors of the old corporations had never issued any certificates of stock. After the resolution was passed for the consolidation of the two corporations, the attempted consolidated turnpike company elected officers, and took possession of the roads, and operated them, collected tolls, and exercised all the rights of a corporation, and issued its bonds to the amount of $6,300 the debt of the two old corporations; and such consolidated company held and operated such roads from the 19th day of November 1866 until the 16th day of November, 1878. During all such time, such roads were held by such attempted organization, statements were filed and taxed paid, tolls collected and the debts partly paid, and the roads were operated under such assumed corporate name.

On the 16th day of November, 1878, such attempted organization, the Crawfordsville & Shannondale Consolidated Turnpike Company, joined in articles of association with the Crawfordsville & Fredericksburg Turnpike Company (a duly and legally organized turnpike company of such county, which owned a road therein), and formed an attempted organization by the name of Crawfordsville & Eastern Turnpike Company, under which name all of such roads were operated and all the certificates of stock in the old companies were surrendered and canceled, and, in lieu thereof, the attempted Crawfordsville & Easter Turnpike Company issued other certificates. The attempted organization, the Crawfordsville & Eastern Turnpike Company, operated and held possession of such roads, had a board of directors, president and secretary and assumed to act as a corporation, collected tolls, contracted and was contracted with, sued and was sued, and continued to act as a corporation until August 1882, when the members of such organization and its board of directors held a meeting and abandoned such organization. On the 9th day of May, 1879, the state of Indiana, on the relation of George W. Collings, Esq, then prosecuting attorney of the 22nd judicial circuit, filed an information in the nature of a quo warranto against the persons who were then claiming to be the officers, directors, and stockholders of such attempted corporation, the C&ETC, which persons were the same persons claiming to be the officers, directors, and stockholders of the aforesaid C&D and C&S Turnpike companies; and such cause was tried in the Montgomery Circuit Court and judgment was there rendered therein in favor of such defendants and against the plaintiff’s relator, and the relator appealed therefrom to the supreme court of this state, where such judgment was in all things reversed, and the opinion and judgment of the supreme court are reported under the title of State ex rel. Collings, Pros. Atty; v. Beck, 81 Ind. 500. Thereafter, such cause was against submitted for trial to the Montgomery Circuit Court on the 15th day of September 1882 and it was then and there found, adjudged and decreed by such court and the defendants therein were guilty as charged and were not a corporation under the name of the Crawfordsville & Eastern Turnpike Company, and that such pretended corporation was not legally organized, and there was no such corporation, and such defendants were enjoined from exercising any franchises as such corporation; that such corporation was illegal and void; and that such relator recover his costs of such defendants; which judgment and decree still remained in full force.

In August, 1882, the Crawfordsville & Darlington Turnpike Company, the Crawfordsville & Shannondale Turnpike Company and the Crawfordsville & Fredricksburg Turnpike Company each assumed control and elected officers and a full board of directors for each company, and each corporation took possession of the road originally held by it, and has since held possession and exercised full control over such road, collected toll, built bridges and graveled the roadway. When the Crawfordsville & Eastern Turnpike Company was dissolved, the stockholders in the original corporations, or the assignees of the original stockholders, by agreement divided up the interest claimed by each, and took such interest in the original corporations. From the time of the organization of the Crawfordsville & Shannondale Consolidated Turnpike Company down to August 1882, the original corporation did not elect officer,s nor hold any meetings, nor keep any books, nor make any debts, but they allowed all acts to be done by such consolidated turnpike company until the formation of the Crawfordsville * Eastern Turnpike Company. In making such attempted consolidation, the officers, stockholders and agents acted under advice of counsel. The defendant in tis cause was one of such original corporations. By the different attempted consolidations the defendant herein, under the advice of counsel, intended and attempted to put its roads under on management. The road mentioned in the complaint herein, and the other road connected with it, which were controlled by the Crawfordsville & Shannondale Consolidated Turnpike Co, intersected each other. Some of the stockholders were such in both original companies, and the consolidation was attempted to put both their roads under one management.

From the _ day of _____ 1867, the defendant herein suffered and permitted such pretended corporations, the C&SCT and the C&ETC to occupy and control the line of road mentioned in the complaint herein and to erect toll gates and collect tolls from travelers thereon, and to appropriate all the proceeds thereof to the use of such attempted corporations. Since August 1882, the defendant herein has had toll gates erected across and over such highway and has compelled travelers to pay tolls for traveling thereon, which toll gates are obstructions to the travel on and free use of such public highway. Such line of road is a road largely traveled by citizens of Montgomery County in going to and returning from the large and populous city of Crawfordsville. As its conclusion of law upon the above found facts, “the court now finds for the defendant.” … Signed Wm. P. Britton, Judge