SECTION TWENTY-SEVEN.

St. Louis, Wichita & Western Ry. Co. v. Ritz, 30 Kan. 30.

Lessor not liable for work done on road by lessee's order.

Action by Ritz & Putnam against the St. Louis, Wichita & Western Railway Company, a Kansas corporation, for supplies furnished to persons alleged to have been its contractors, said defendant having neglected to take the statutory bond for the protection of plaintiffs.

Facts were, in the main, that the defendant leased all of its railway to the St. Louis & San Francisco Railway Company, a Missouri corporation; the latter company gave a contract to Harding & Gilmore for building twenty-five miles of the former's road; in fact the former company never did any work on its line, but it was done for it under contract by the latter company. Both companies had the same officers; but this did not unite, consolidate or cause both to be one and the same, nor did the fact that the founder of the former company organized it as mere matter of speculation, and sold all of its stock to other persons or corporations, wipe out or obliterate the corporation. Hence, the special findings of the jury and the charge of the court, holding both companies to be one and

nox v. Harrison, 88 Mo. 491-95; Bulline v. Smith, 73 Mo. 151-59-62 and authorities cited. Price v. Railroad, 72 Mo. 414; Bank v. Armstrong, 62 Mo. 59 and cases cited; Walnier v. Railroad, 71 Mo. 514; Edens v. Railroad. 72 Mo. 212; Light v. Railroad, 89 Mo. 106; Kenney v. Railroad, 70 Mo. 252; Ely v. Railroad, 77 Mo. 34; Abbott v. Railroad, 70 Mo. 668; Fuller v. Edwards, 18 Mo. App. 677; Scott v. Robards, 67 Mo. 289-92-93; Smith v. Railroad, 37 Mo. 287-93. Plaintiff having based his action on failure to observe a particular duty, must state in his petition the facts giving rise to such duty. Field v. Railroad, 76 Mo. 614-6; Moke's Van Sanford's Pl. (3d Ed.), 219; Buffalo v. Halliway, 7 N. Y. 493; Lease v.

White, 15 Iowa 187; Nickerson v.
Hydraulic Co., 46 Conn. 24.

Plaintiff's citations :

Allegation that defendant did the injury is sufficient, though it was really done by the other company's engine running over the road under oral permission of defendant's officers. Singleton v. Railroad, 70 Ga. 464; Railroad v. Whipple, 22 Ill. 105; Railroad v. Dunbar, 20 Ill. 623; Railroad v. Baron, 5 Wall, 90: Railroad v. Brown, 17 Wall. 445; Railroad v. Winans, 17 How. 31; Railroad v. Campbell, 86 Ill. 443; Freeman v. Railroad, 7 Am. & Eng. R. R. Cases 410, and elaborate note citing many authorities; Wise v. Railroad, 85 Mo. 178.

the same, and that the supplies can be considered as having been furnished to defendant's contractors, were erroneous; they were separate and distinct corporations created by different states; the latter was not the agent of the former, and the said contractors were not contractors with the former.

SECTION TWENTY-EIGHT.

Sundry instances.

Although a lease is made with legislative consent, still the lessor is liable for injuries to the lessee's passenger. The statute says the lease shall not release lessor from any duty or liability; one of these is to compensate persons injured in the operation of the road. Quested v. Newburyport Horse Ry. 127 Mass. 204.

Lessor is liable for goods by it received to be carried by its lessee, a foreign corporation; to hold otherwise would enable lessor to divest itself of its public duties undertaken as the consideration upon which it received its charter. Langley v. Boston, etc., R. Co., 10 Gray 103.

On a lease without statutory consent the lessor is liable for lessee's neglect causing injuries at defective highway crossing. Freeman v. Minn., etc., R. Co., 28 Minn. 443.

The lessor is liable for injury to lessee's passenger: Fisher v. W. V. & P. R. Co. (W. V.), 19 S. E. 578; Abbott v. Johnson, 80 N. Y. 27. Is not liable: Mahoney v. Ry. Co., 63 Me. 68. Road not fenced, lessor liable for horse killed by lessee: Whitney v. Atlantic, etc., Co., 44 Me. 362. Liable for fire set by lessee's engine: Steams v. Atlantic, etc., Co., 48 Me. 117. Not liable to lessee's passenger for injury caused by defect in track: Murch v. Concord, R. R. Co., 29 N. H. 35. Lessor is liable for injuries to lessee's passenger by defect in track: Central, etc., Co. v. Phinazee (Ga.), 21 S. E. 66, citing R. R. Co. v. Mayes, 49 Ga. 355; Singleton v. R. R. Co., 70 Ga. 464; R. R. Co. v. Liddell, 85 Ga. 482; 11 S. E. 853; or for mismanagement causing collision: Booknight v. C., C. & A. R. Co. (S. C.), 19 S. E. 915; or for assault by lessor's conductor though he be under lessee's hire and control: C. & O. R. Co. v. Osborne (Ky ), 30 S. W. R. 21.

The lessor and lessee companies are jointly liable for injuries done by the lessee. Pennsylvania Co. v. Ellett, 132

Ill. 654.

It would secm as though a constituent can be still subjected to insolvency proceedings even after consolidation; such proceedings are found sustained against a constituent company upon allegation that it is organized under the laws of Connecticut and has its office in Middleton. (No mention is made prior to the appeal of a consolidation having taken place.) Platt v. N. Y., etc., R. R. Co., 26 Conn. 544.

When a road is in the hands of trustees exercising all the corporate functions, they are regarded as agents of the corporation and the latter is liable for freight lost. Grand Tower Manf., etc., Co. v. Ullman, 89 Ill. 244.

The constituent company preserves its continuance for some purposes, as, for instance, to execute an assignment of a patent right contracted for prior to the consolidation. This is one of the "demands" that the constituent must answer to by terms of the statute. Edison Electric L. Co. v. New Haven Electric Co., 35 Fed. Rep. 233.

A suit pending against it for a death claim does not abate by reason of a consolidation. Evans v. Interstate Rapid T. Ry. Co., 106 Mo. 594; 17 S. W. 489.

Nor does defendant's change of corporate name have any effect on a pending suit. Welfley v. Shenandoah I. L. M. & M. Co., 83 Va. 768; 3 S. E. 376.

The statute declaring that a consolidation shall not cause a suit to abate shows the legislative intent to preserve the corporate existence; it is more than a rule of practice and hence will be respected in the federal courts. The corporate existence may be prolonged for special purposes. Citing Banking Co. v. Ga., 92 U. S. 665; Bank v. Colby, 21 Wall. 614; Edison E. L. Co. v. Westinghouse, 34 Fed. 232.

Original company is not liable for damage done on road. after its sale under foreclosure and possession taken. Western R. Co. v. Davis, 66 Ala. 578.

CHAPTER XIV.

LIABILITIES OF THE SUCCEEDING CORPORATION.

The liabilities of the succeeding corporation are determinable by the constitution and laws as they stand at the time of the creation of such successor, and not by the laws existing at the creation of the constituent or predecessor corporation; determinable also by the constitution and laws of the state under which the consolidation is created, although some of the constituents are creatures of other states.

The succeeding corporation (when not a purchaser), obtaining all of the property, is held, impliedly as well as by terms of statute, to have assumed all of the debts, as also liabilities for torts of the preceding corporations; such liability must, however, be enforced by a direct proceeding against it, giving it a day in court, and not by mere substitution in a judgment obtained against the predecessor.

Corporations owing duties to the public, as, for instance, owners of railroads, are not released by transferring the discharge of the same to others, although such others may also be liable; the various relations of lessor and lessee are herein considered with reference to injuries occasioned by the one or the other, either ex contractu or ex delicto.

The succeeding corporation, when a purchaser upon a new consideration, and not merely a successor in interest of the former corporation, takes the property free from every demand, except specific liens, or equities of which it had notice; obtaining property and paying for it in stock of the succeeding corporation is not a purchase upon consideration, but a mere substitution of interests.

Even the purchaser upon consideration takes the property charged with the duties imposed by the charter under which it was obtained, as also those imposed by law, but not those arising from the merely personal contracts of the preceding corporation.

SECTION ONE.

Shields v. Ohio, 95 U. S. 319.

Consolidated corporation bound by restrictions as to rates of fare existing at time of consolidation, though same were not obligatory on the constituents.

The Junction Railroad Company was incorporated in Ohio March 2, 1846, by act of the legislature. The eleventh section empowered the company to charge such rates as it might deem reasonable. The Toledo, Norwalk & Cleveland Company was incorporated March 7, 1850, amended January 20, 1851; the twelfth section of the amendatory act declared that in case the Junction company should become consolidated with it, the consolidated company might assume the name of Cleveland & Toledo Railroad Company and in such event be governed by sections 9, 10, 11, 15 and 17 of the Junction company's act, and, in other respects, by the act incorporating the Toledo, Norwalk & Cleveland Company.

The general act of March 3, 1851, relates to the consolidation. of railroad companies, stating the details of the process and that such new company shall possess all the powers, rights and franchises of the consolidating companies. The constitution took effect September 1, 1851, reserving the right to alter or repeal the corporation laws.

June 15, 1853, the aforesaid companies consolidated under the said acts of January 20, 1851, and March 3, 1851.

The act of April 10, 1856, authorizes Ohio companies to consolidate with those of other states, and provides that such consolidated companies shall be deemed and taken to be one corporation; the old stock shall be extinguished, a board of directors of the consolidated company shall be elected, new stock created and issued to the parties entitled; those refusing to receive it were to be paid the highest market price of the old; the new corporation may be sued as any other.

The consolidated road last mentioned was subsequently consolidated with another, thus forming the Lake Shore Railway Company, which in turn consolidated with still another and formed the Lake Shore & Michigan Southern Railway Company, April 6, 18C9.