Around 1838, the state of Michigan started to build the Southern Railroad, running from Monroe, Michigan, on Lake Erie, west to New Buffalo, Michigan, on Lake Michigan. The first section, from Monroe, west to Petersburg, Michigan, opened in 1839. Extensions opened in 1840, to Adrian, and 1843, to Hillsdale, Michigan. On May 9, 1846, the partially completed line was sold to the Michigan Southern Rail Road, which changed the planned western terminal to Chicago, using the charter of the Northern Indiana Railroad. The grading that had been done was not used, as the grade was too steep, and instead the original Buffalo and Mississippi Railroad charter was used west of La Porte. The Michigan Southern leased the Erie and Kalamazoo on August 1, 1849, giving it a branch to Toledo, and a connection to planned railroads to the east.
Due to lobbying by the Michigan Central Railroad, a competitor of the Michigan Southern, the latter's charter prevented it from going within two miles of the Indiana state line east of Constantine, Michigan. However, the most practical route went closer than two miles, west of White Pigeon, Michigan. To allow for this, Judge Stanfield, of South Bend, Indiana, bought the right-of-way from White Pigeon to the state line, and leased it to the railroad company for about 10 years, until the charter was modified to allow the company to own it.