§ 535. § 537. Introductory. § 536. Express legislative authority requisite to valid consolidation. § 538. § 539. The manner of effecting consolidation under the New York § 541. § 542. Of condemnation and sale of stock of dissenting shareholders. § 543. The effect of consolidation-(a.) Upon the existence of the origi- § 544, (b.) Upon by-laws, rules and regulations-The English statute. § 545. § 548. (f.) Upon pending litigation. § 549. The same subject continued-The New York and English statutes. § 550. (g.) Upon choses in action. § 551. Provisions of the English statute concerning contracts for the purchase of land. $552. Provisions of the English statute concerning the records of the dissolved company. § 553. (h.) Upon the rights, privileges and immunities of the original companies. § 554. The same subject, continued and illustrated. -§ 555. 556. (i.) Upon exemption from taxation. j.) Upon the obligations of the original companies to the public and to individuals. § 557. The same subject, continued-Continuing obligations and personal obligations. § 558. Provisions of the English statute concerning the completion of works begun by the dissolved company. § 561. The same subject, continued-Extent of the liability of the consolidated company. § 562. § 5C3. 564. § 555. § 566. The consolidated company not a purchaser without notice. (m.) Upon the jurisdiction of the several States. Statutory authority requisite to validity of lease. § 567. Lessees of railways authorized to acquire the stock and absorb the lessors-The New York statute. Of the effect of lease upon liability for torts. § 570. Of the effect of an unauthorized lease upon liability for torts. § 571. Of the recovery of rent upon an ultra vires lease. § 572. Of sale. § 535. Introductory.-There has been considerable discussion as to the meaning of the words consolidation, merger and amalgamation. The only practical object, however, of these discussions seems to be, in ascertaining whether the existence of one or both of the original companies is extinguished or continued, and in determining other questions respecting the legal relations arising from the modification or dissolution of the corporate being.' These questions, however, turn mainly upon the wording of the statutes or charters, whereby the change is authorized. "In general, it may be said that by a consolidation, merger, or amalgamation, either two corporations are dissolved and a new one formed therefrom, or one is dissolved and its property and franchises are taken up by another."2. The word "amalgamation" is peculiarly English; and it is said that "nobody really knows what 'amalgamation' means.' It would seem, how ever, to involve, (1) a destruction, either actually by dissolution, or substantially by abeyance, of the entity of the original or transforming corporations; (2) a transfer of corporate rights and liabilities out and out, present and contingent, a transfer, in short, of the legal corporate persona; (3) a transmutation of the members of the former corporation into members of the latter; (4) a novation of the rights of creditors of the former corporation, so that their rights and claims against it are gone, and, instead, the latter corporation is their debtor. Although it has been said by an eminent authority that the word "amalgamation" as used in the English law has a wider meaning than "consolidation" has in America; that the word "consolidation” would be inapplicable to a union of two or more companies in such a way that one of the original corporations only was continued in existence while the others were merged or absorbed into it; and that an absorption of one company by another, according to some of the decisions, would be an amalgamation in England, but not a consolidation in America; it will nevertheless be found upon examination of many of the American cases cited in the following sections, that the word "consolidation" is frequently used in this country with respect to just such an absorption of one company by another, as is denoted by the English term "amalgamation." Accordingly, the word "consolidation' will be used in this chapter to denote any conjunct'on or union of the stock, property or franchises of two or more corporations, whereby the conduct of their affairs is permanently, or for a long period of time, placed under cne management, wheth er the agreement between them be by lease, sale, or other form of contract, and whether its effect be the dissolution of neither of the companies, or whether one of them be dissolved and its existence be merged in the corporate being of the other, or whether it result in the dissolution of both companies and the creation of a new corporation out of such portions of the original companies as enter into the new. In pleading consolidation, it is sufficient to state that the constituent companies, naming them, were authorized by law to consolidate, and that having done so, they have become one corporation under a certain name.' 1 Cook on Stock & Stockh. § 665. 2 Cook on Stock & Stockh. § €63. 3 Dongan's Case, 28 Law T. N. S. 60. 4 Green's Brice's Ultra Vires, p. 606; In re Bank of Hindostan, 2 Hem. & M. €65. 5 Green's Brice's Ultra Vires (2nd ed.), 631. 6 In a recent well-considered case, construing the Nebraska Constitution (art. xi, § 3,) which declares, that "no railroad corporation or telegraph company shall consolidate its stock, property, franchises or earnings, in whole or in part," with parallel or competing lines, it was held that the word "consolidate" was used in the sense of "join" or "unite,” and that the law was not to be evaded by the substitution of a lease f ra deel of conveyance: State v. Atchison etc. R. R. Co. 4 Ry & Corp. I aw J. 83. 91. But a temporary co-operation under one management is not a consolidation: Archer v Terre Haute etc. R. R. Co. 102 11. 592; S. C 7 Am. & Eng. R. R. Cas. 219; and a mere alliance with respect to traffic does not amount to an amalgamation: Shrewsbury etc. R'y Co. v. Stour Valley R'y Co. 2 De Gex, M. & G. 866; Midland Great Western R'y Co. v. Leech, 3 H. L. Cas. 872. That "consolidation" may be effected by the sale of the stock of one company to another, see Hill v. Nisbet, 193 Ind. 31. Another case declares consolidation to be "a surrender of the old charters by the companies, the acceptance thereof by the legislature, and the new formation of a new corporation, out of such portions of the old as cater into he new": State v. Bailey, 16 Ind. 46, 51; 7) Am. Dec. 4^5, citing Lauman v. Lebanon Valley R. R. Co. 30 Pa. St. 42; 72 Am. Dec. 685. Cf. M Mahon v. Morrison, 16 Ind. 172; 7) Am. Dec. 418. See Clearwater v. Meredith, 1 Wall. 25, 40. 7 Collins v. Chicago etc. R. R. Co. 14 Wis. 492. § 536. Express legislative authority requisite to valid consolidation. -Express legislative authority is requisite to enable corporations to effect 2 a valid consolidation.' Corporations are not such "persons" as are authorized to form other corporations. Nor can one corporation occupy the relation of "employer" to another.3 Railway companies, being chartered to perform public duties, cannot evade their obligations to the public by a transfer of their franchises, either by lease, sale, or consolidation, without express legislative sanction.1 Authority granted by statute to one corporation, however, to consolidate with "any other" company, is an implied grant of authority to any other to enter into the consolidation, unless for some reason it be incapable of so doing. The requisite legislative sanction may be given either by charter or by a special enabling act, or by a general law of the State. But general statutes anthorizing the consolidation of corporations are not retroactive, and do not apply to companies chartered prior to their enactment. An authorized consolida ion may be, however, cured by special subsequent enactment." 5 1 Pearce v. Madison etc. R. R. 21 How. 442; Clearwater v. Meredith, 1 Wall. 25; New York etc. Canal Co. v. Felton Bank, 7 Wend. 415; State v. Maine Central R. R. Co. 66 Me. 488; Bishop v. Brainerd, 28 Conn. 289; Lauman v. Lebanon Valley R. R. Co. 30 Pa. St. 42; 72 Am. Dec. 685; State v. Bailey, 16 Ind. 46; 79 Am. Dec. 405. Cf. Black v. Delaware etc. Canal Co. 24 N. J. Eq. 455; In re Era Assurance Soc. 30 Law J. Eq. 137. 2 Factors' etc. Ins. Co. v. New Harbor Protection Co. 37 La. An. 233. 3 Dukes v. Love, 97 Ind. 341. 4 Thomas v. The Railroad Co. 110 U. S. 71; Pearce v. Madison etc. R. R. Co. 21 How. 441; Pullan v. Cincinnati etc. R. R. Co 4 Biss. 35; Mowrey v. Indianapolis etc. R. R. Co. 4 Biss. 78; American Union Tel. Co. v. Union Pacific R'y Co. 1 Macrary, 108; Troy etc. R. R. Co. v. Boston etc. R. R. Co. 86 N. Y. 107; Abbott v. Johnston etc. Horse R. R. Co. 80 N. Y. 27; 36 Am. Rep. 572; Middlesex etc. R. R. Co. v. Boston etc. R. R. Co. 115 Mass. 347; Richardson v. Sibley, 11 Allen, 65; 87 Am. Dec. 700; Commonwealth v. Smith, 10 Allen, 448; 87 Am. Dec. 672; Black v. Delaware etc. Canal Co. 24 N. J. Eq. 456; Stewart's Appeal, 56 Pa. St. 413; Wood v. Bedford etc. R R. Co. 8 Phila. 94; State v. Sherman, 22 Ohio St. 411, 4-8; Tippecanoe County v. Lafayette etc. R. R. Co. 50 Ind. 85; Peoria etc. R'y Co. v. Coal Valley Manuf. Co. 68 Ill. 489. Ex parte Williamson, Law R. 5 Ch. 339; East Anglian R'y Co. v. Eastern Counties Ry Co. 11 Com. B. |