WISCONSIN Any public service corporation as herein defined, or any agent, director, or officer thereof, who shall directly or indirectly, issue or cause to be issued, any stocks, certificates of stock, bonds, notes, or other evidences of indebtedness, con3403 trary to the provisions of this act, or who shall apply the proceeds from the sale thereof to any purposes other than that specified in the certificate of the commission, as herein provided, shall forfeit and pay into the state treasury not less than $500 nor more than $10,000 for each offense. Laws 1911, ch. 593, sec. 1753-17.

Each and every director, president, secretary, or other official or agent of any such public service corporation, who shall make any false statement to secure the issue of any stock, certificates of stock, bond, note, or other evidence of indebtedness, or who shall by false statement knowingly made, procure of the commission the making of the certificate herein provided, or 3404 issue with knowledge of such fraud, negotiate, or cause to be negotiated any such bond or other issue, in violation of these statutes, shall be guilty of a felony and upon conviction thereof, shall be punished by a fine of not less than $500, or by imprisonment in the state prison for a term of not less than one nor more than ten years, or by both such fine and imprisonment in the discretion of the court. Same, sec. 1753-18.

CHAPTER XIII

Intercorporate Relations

SCOPE NOTE

This chapter includes grants of power authorizing commissions to supervise the relations of utilities between themselves with regard to finance and organization. Provisions of general corporation law regulating intercorporate relations have been excluded. For provisions regulating competition between utilities by limiting the exercise of franchise privileges, see ch. xi, on franchises. For provisions incidentally involving questions of leases, consolidations and reorganizations, see ch. xii, on stock and bond issues. For provisions dealing with through routes, joint rates and the apportionment thereof between connecting carriers, street railway transfers, and physical connection of telephone and telegraph companies, see ch. iv, on establishment and change of rates. For provisions prescribing publicity for leases, contracts and arrangements between utilities, see ch. v, on publicity of rates. For provisions dealing with the duty to provide equipment and render service as between utilities, and for those dealing with the joint use of facilities, see ch. vii, on service. For provisions prescribing general procedure to be followed in the exercise of commission authority, see ch.. xiv, on commission procedure and practice. For provisions prescribing general rules of enforcement and judicial review, see ch. xv, on enforcement. For general statement of scope and method, see introduction.

ANALYSIS

A. Assignment, lease, mortgage, sale or transfer of franchises and other

property..

B.

Purchase and sale of stocks or bonds of public utilities. C. Authority of public utilities to consolidate ...

908

915

920

A. ASSIGNMENT, LEASE, MORTGAGE, SALE OR TRANSFER OF FRANCHISES AND OTHER PROPERTY.

ARIZONA, CALIFORNIA

No railroad, street railroad, pipe line, gas, electrical, telephone, telegraph or water corporation shall henceforth sell, lease, assign, mortgage or otherwise dispose of or encumber the whole or any part of its railroad, street railroad, line, plant or system, necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor by any means whatsoever, direct or indirect, merge or consolidate its railroad, street railroad, line, plant or system, or franchises or permits or any part thereof, with any other public utility,' without having first secured from the commission an order authorizing it so to do. Every such sale, lease, assignment, mortgage, disposition, encumbrance, merger or consolidation made other than in accordance with the order of the commission authorizing the same shall be void. The permission 3405 and approval of the commission to the exercise of a franchise or permit under section 50 of this act, or the sale, lease, assignment, mortgage or other disposition or encumbrance of a franchise or permit under this section shall not be construed to revive or validate any lapsed or invalid franchise or permit, or to enlarge or add to the powers or privileges contained in the grant of any franchise or permit, or to waive any forfeiture. Nothing in this subsection contained shall be construed to prevent the sale, lease or other disposition by any public utility' of a class designated in this subsection of property which is not necessary or useful in the performance of its duties to the public, and any sale of its property by such public utility1 shall be conclusively presumed to have been of property which is not useful or necessary in the performance of its duties to the public, as to any purchaser of such property in good faith for value. Ariz.-Sess. Laws 1912, ch. 90, sec. 51(a); Cal.—Stats. 1911, 1st. ex. sess., ch. 14, sec. 51(a).

CONNECTICUT

Any company may make lawful contracts with any other company with whose railroad its tracks may 3406 connect or intersect, in relation to its business or property, and

1" Public service corporation," in Arizona.

may take a lease of the property or franchise of, or lease its property or franchises to any such company. Gen. Stats. 1902, sec. 3702.

KANSAS

No franchise granted to a common carrier or public utility governed by the provisions of this act shall be assigned, transferred or leased, nor shall any contract or agree3407 ment with reference to or affecting such franchise or right thereunder be valid or of any force or effect whatsoever, unless the assignment, transfer, lease, contract or agreement shall have been approved by commission. Laws 1911, ch. 238, sec. 36.

MARYLAND No franchise, nor any right to or under any franchise to own or operate a railroad or street railroad, shall be assigned, transferred or leased, nor shall any contract, or agreement with reference to or affecting any such franchise or right be valid or of any force or effect whatsoever, unless the assignment, transfer, lease, contract or agreement shall have been approved by 3408 the commission. The permission and approval of the commission to the exercise of a franchise under this section, or to the assignment, transfer or lease of a franchise under this section, shall not be construed to revive or validate any lapsed or invalid franchise, or to enlarge or add to the powers and privileges contained in the grant of any franchise or to waive any forfeiture. Laws 1910, ch. 180, sec. 26.

No gas or electrical corporation shall transfer or lease its franchise, works or system, or any part of such franchise, works or system to any other person or corporation or contract for the operation of its works and system, without the written consent of the commission. The permission and approval of the com3409 mission to the exercise of a franchise under this act, or to the

assignment, transfer or lease of a franchise under this section. shall not be construed to revive or validate any lapsed or invalid franchise or to enlarge or add to the powers and privileges contained in the grant of any franchise or to waive any forfeiture. Same, sec. 35.

MASSACHUSETTS A lease or purchase and sale of the franchise. and property of a railroad corporation, or street railway company, and a consolidation of two or more railroad corporations, or street railway companies, or a contract that either corporation shall perform all the transportation upon and over the road of the other, whether authorized by general laws or a special act, shall not be valid or binding until the terms thereof shall, after public

notice and a hearing, have been approved by the railroad commission, and a certificate signed by said commission, setting forth 3410 the vote of approval, shall have been filed in the office of the secretary of the commonwealth. Said board shall announce its decision within 30 days after the final hearing upon the application of any railroad corporation or street railway company for permission to lease or sell to, consolidate with or purchase the franchise and other property of, any other railroad corporation or street railway company, or to contract with any other railroad corporation or street railway company that either corporation shall perform all the transportation upon and over the road of the other. Acts 1906, ch. 463, pt. i, sec. 67, as amended by Acts 1907, ch. 585.

Two railroad corporations, which are incorporated under the laws of this commonwealth, and whose railroads enter upon or connect with each other, may contract that either corporation shall perform all the transportation upon and over the railroad of the other; and any such corporation may lease its railroad to any other such corporation; but the facilities for travel and business on either of the railroads of said corporations shall not thereby be diminished. Such leases shall be upon such terms as the directors agree, and as majority in interest of the stockholders of both corporations at meetings called for the purpose approve, subject to the provisions of section 67 of part I of this act. The income arising from such contracts or leases shall be subject to the provisions of law relative to the right of 3411 the commonwealth to purchase the railroads of the railroad corporations or to reduce their tolls, in the same manner as that arising from the use of the railroads. Copies of such contracts or leases shall be deposited with the railroad commission, and full statement of the facts shall be set forth in the next annual return of such corporations. The provisions of this section shall not authorize a lease or contract between two railroad corporations, each of which has a terminus in the city of Boston. The railroads of two railroad corporations shall be considered to enter upon or connect with each other, within the meaning of this section, if one of such railroads enters upon, connects with, or intersects a railroad leased to the other or operated by it under a contract as herein authorized. Acts 1906, ch. 463, pt. ii, sec. 209, as amended by Acts 1907, ch. 585, sec. 8.

Two street railway companies, incorporated under the laws of this commonwealth, whose railways connect with or intersect