775; Chambers v. Manchester etc. R'y Co. 5 Best & Smith, 539; Winch v. Birkenhead etc. R'y Co. 5 De Gex & S. 562; McGregor v. Dover etc. R'y, 17 Jur. 21; London etc. R'y Co. v. London etc. R'y Co. 5 Jur. N. S. 801.

5 In re Prospect Park (tc. R. R. Co. 67 N. Y. 371.

6 Hatcher v. Toledo etc. R. R. Co. 62 Ill. 477, 480.

7 Mead v. New York etc. R. R. Co. 45 Conn. 199: Bishop v. Brainerd, 28 Conn. 289; McAuley v. Columbus etc. R'y Co. 83 Ill. 352.

§ 537. Public policy adverse to consolidation of competing railways.-The public policy of most of the American commonwealths is adverse to the consolidation of parallel or competing railways.' In New York it is enac ed that no companies or corporations of that State whose railroads run on parallel or competing lines shall be authorized by the act to merge or consolidate." Prohibitions against "consolidation" are used in the broadest sense, as an absolute inhibition of any joining or uniting of stock, property, franchises or earnings, in whole or in part, by companies owning parallel or competing lines. In statutes providing for the consolidation of railways which are "constructed so as to permit the passage of burden or passenger cars over any two or more such roads continuously without break of gauge or interruption," the word "continuously" is construed to be restrictive, and exclusive of parallel or competing lines.* With respect to connecting or intersecting railways, however, so located as not to be natural competitors for the business of the same district of country, there is generally no principle of public policy rendering their consolidation invalid.5 The public policy of the State of New York, as manifested by numerous acts of the legislature, has always been not only to afford the fullest scope for the consolidation and reorganization of non-com.

peting railroads and railroad corporations, but also for the transfer of the use of such roads and their franchises by one corporation to another. When corporations are allowed by law to consolidate, public policy does not oppose the organization of a corporation with the ulterior purpose of consolidating with another."

1 State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 83.

2 N. Y. Laws of 1869, ch. 917, § 9.

3 State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 86, 91, construing Neb. Const art. xi, § 3. In the foregoing case, the prohibition was held to extend to leases of parallel or competing lines. Acc. State v. Vanderbilt, 37 Ohio St. 590.

4 State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 68, 89, c.ting State v. Vanderbilt, 37 Ohio St. 590, construing a similar statute in Ohio, where it was held that two roads running parallel and near each other for sixty miles, had no authority to consolidate.

5 Woodruff v. Erie etc. R'y. Co. 93 N. Y. 615; State v. Vanderbilt, 37 Ohio St. 590; State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 86; Hill v. Nisbet, 100 Ind. 311.

6 Woodruff v. Erie R'y Co. 93 N. Y. 603, 615.

7 Hill v. Nisbet, 100 Ind. 311.

§ 538. The New York statute authorizing consolidation-General provisions.-In any case where two or more railroad companies shall have been, or shall hereafter be, organized under the laws of New York, the whole of whose lines, as located by them, respectively, form one continuous and connecting line of road, they are authorized by the statute to consolidate their road, stock, franchises and property, according to the existing laws of the State relating to the consolidation of railroad companies; and any such consolidated company may thereupon construct or finish the construction of that continuous line of railroad, and operate it subject to all provisions of law applicable to railroad corporations organiz.d

under the laws, so far as not inconsistent with the act; but it is provided that this act shall not in any manner affect the existing laws regulating the rate of fare on any railroad.' It is further provided that suits may be brought and maintained against the new corporation in the courts of the State, for all causes of action, in the same manner as against other railroad corporations therein;* and the General Railroad Act of the States is made applicable to the new corporations formed under the consolidation act.*

1 N. Y. Laws of 1875, ch. 108, § 1, as amended by N. Y. Laws of 1883, ch. 387.

2 N. Y. Laws of 1869, ch. 917, § 5.

3 N. Y. Laws of 1850, ch. 140.

4 N. Y. Laws of 1869, ch. 917, § &

§ 539. The manner of effecting consolidation under the New York statute.-The New York statute authorizing the consolidation of certain railroads, provides that the directors of the companies proposing to consolidate may enter into a joint agreement under the corporate seal of each company, for the consolidation of those companies and railroads, and prescribing the terms and conditions thereof;1 that this agreement shall be submitted to the stockholders of each of the companies at a meeting thereof, called separately, for the purpose of taking the agreement into consideration; that due notice of the time and place of holling the meeting, and the object thereof, shall be given by each company to its stockholders, by written or printed notices addressed to each of the persons in whose names the capital stock of the company stands on the books thereof, and delivered

to those persons respectively, or sent to them by mail when their post-office address is known to tho company, at least thirty days before the time of holding the meeting, and also by a general notice published daily, for at least four weeks, in some newspaper printed in the city, town or county where the company has its principal office or place of business; that at the meeting of the stockholders the agreement of the directors shall be considered, and a vote by ballot taken for its adoption or rejection, each share entitling the holder thereof to one vote, the ballots to be cast in person or by proxy; and if two-thirds of all the votes of all the stockholders shall be for the adoption of the agreement, then the fact shall be certified upon the agreement by the secretaries of the respective companies, under the corporate seal; and that the agreement so adopted, or a certified copy thereof, shall be filed in the office of the secretary of State, and shall from thence be deemed and taken to be the agreement and act of consolidation of those companies. The act further provides, that upon making and perfecting the agreement and act of consolidation as therein before provided, and filing the same or a copy thereof in the office of the secretary of State as aforesaid, the corporations, parties thereto, shall be deemed and taken to be one corporation by the name provided in the agreement and act; but that the act of consolidation shall not release the new corporation from any of the restrictions, disabilities or duties of the several corporations so consolidated.5 A copy of that agreement and act of consolidation, duly certified by the secretary of State, under his

official seal, shall be evidence in all courts and places of the existence of the new corporation, and that the foregoing provisions of this act have been fully observed and complied with. The p:ovisions of this act do not apply to street railroads.'

1 N. Y. Laws of 1869, ch. 917, § 2, as amended by N. Y. Laws of 1830, ch. 94.

2 N. Y. Laws of 1869, ch. 917, § 2, as amended by N. Y. Laws of 1830, ch. 94.

3 N. Y. Laws of 1859, ch. 917, § 2, as amended by N. Y. Laws of 1880, ch. 94.

4 N. Y. Laws of 1869, ch. 917, § 2, as amended by N. Y. Laws of 1880, ch. 94.

5 N. Y. Laws of 1869, ch. 917, § 2.

6 N. Y. Laws of 1869, ch. 917, § 2, as amended by N. Y. Laws of 1880, ch. 94.

7 N. Y. Laws of 1869, ch. 917, § 3.

§ 540. The rights of dissenting shareholders. A consolidation or sale of the corporate property, not expressly authorized by statute, is ultra vires, and may be set aside or enjoined at the instance of a single dissenting shareholder,' upon the general principle that no majority, however large, has a right to divert one cent of the joint capital to any purpose not consistent with, and growing out of, the original fundamental joint intention. To sell the road, to abandon the contemplated investment and embark in another scheme, whether entirely different or only more extensive than the one originally contemplated in the charter, is clearly contrary to the rights of the individual stockholders." Those who, in such a matter as this, act without the acquiescence of all the stockholders, do so at their peril, and must take the consequences if their act be undone at the instance of dissentient stockholders.3 In a leading case it has been said, that in conferring the authority to consolidate, the