legislature never intended to compel a dissenting stockholder to transfer his interest because a majority of the stockholders consented to the consolidation, and that even if the legislature had manifested an obvious purpose to do so, the act would have been illegal, for it would have impaired the obligation of a contract. Where, however, an existing statute or the charter of the corporation expressly authorizes a lease or sale, purchaser.; of stock are presumed to have bought in contemplation of a possible transfer of the property, and a majority vote of the stockholders is sufficient to authorize a sale or lease upon the most disadvanta geous terms, dissenting stockholders having no redress, unless fraud can be proven. When a consolidation is effected wrongfully, and against the protest of a shareholder who has partially paid up his shares, the consolidated company is liable to him for the value of them." When an unauthorized consolidation is annulled, the shareholders of the consolidated corporation may recover the amounts paid in by them. The holders of stock in the original companies are not ipso facto stockholders in the consolidated company, but only have the right to become so by surrendering their old shares.8 1 Clearwater v. Meredith, 1 Wall. 40; Mowray v. Indianapolis etc. R. R. Co. 4 Biss. 78; Cass v. Manchester etc. Co. 9 Fed. Rep. 640 Case of Atlantic etc. R. R. Co. 3 Hughes, 320; 4 Hughes N. S. 151; Gardner v. Hamilton etc. Ins. Co. 33 N. Y. 421; Blatchford v. Ross, 31 Barb. 42; Stevens v. Davison, 18 Gratt. 819; 98 Am Dec. 692; South Georgia etc. R. R. Co. v. Ayers, 36 Ga. 230; International etc. R. R. Co. v. Bremond, 53 Texas, 96; Hamilton etc. Ins. Co. v. Hobart, 2 Gray, 543; Boston ctc. R. R. Co. v. New England etc. R. R. Co. 13 R. I. 260; Stevers v. Rutland etc R. R. Co. 29 Vt. 545; Terhune v. Midland R. R. Co. 38 N. J. Eq. 423; New Jersey Midland R'y Co. v. Strait, 33 N. J. 325; Black v. Delaware etc. Canal Co. 24 N. J. Eq. 455, reversing 22 N. J. Eq. 130; Zabriskie v. Hackensack etc. R. R. Co. 18 N. J. Eq. 178; 90 Am. Dec. 617; Kean v. Johnson, 9 N. J. Eq. 401; Tippecanoe County v. Lafayette etc. R. R. Co. 50 Ind. 85; Tuttle v. Michigan etc. R. R. Co. 35 Mich. 247; Clinch BEACH ON RAILWAYS-56 v. Financial Corporation, Law R. 5 Eq. 401; In re Empire Assurance Co. Law R. 41. q. 341; Winch v. Birkenhead etc. R'y Co. 5 De Gex & S. 562; McDonnell v. Grand Canal Co. 3 Ir. Ch. N. S. 578; Bryson v. Warwick etc. Co. 1 Sinale & G. 447; Charlton v. Newcastle etc. R'y Co. 5 Jur. N. S. 1093; Dongan's Case, 28 Law T. N. 8. 60. But see Lauman v. Lebanon Valley R R. Co. 3) Pa. St. 42; 72 Am. Dec. 635; State v. Bailey, 16 Ind 40; 73 Am. Dec. 4.5. Cf. Mills v. Central R. R. Co. 41 N. J. Eq. 1; Trask v. Peekskill etc. Works, 6 Hun, 236. 2 Kean v. Johnson, 9 N. J. Eq. 401, 407. 3 Milla v. Central R. R. Co. 41 N. J. Eq. 1, 13. Cf. Canada Southern R'y Co. v. Gebhard, 109 U. S. 527; Middleton v. Boston etc. R. R. Co. 53 Conn. 351; Gates v. Boston etc. R. R. Co. 53 Conn. 333. 4 Clearwater v. Meredith, 1 Wall. 25, 39. Acc. Knoxville v. Knoxville etc. R. R. Co. 22 Fed. Rep. 758. Cf. March v. Eastern R. R. Co. 43 N. II. 515; 8. C. 40 N. H. 548; 77 Am. Dec. 732. 5 Bates County v. Winters, 112 U. S. 325; Nugent v. Supervisors, 19 Wall, 241; Woodruff v. Erie R'y Co. 93 N. Y. 609; Troy etc. R. R. Co. v. Boston etc. R R. Co. 86 N. Y. 107; Abbott v. Johnstown etc. R. R. Co. 80 N. Y. 27; 36 Am. Rep. 572; Middletown v. Boston etc. R. R. Co. 53 Conn. 351; Gates v. Boston etc. R. R. Co. 53 Conn. 333, where the requisite majority was three-fourths; Bish v. Johnson, 21 Ind. 239; Sparrow v. Evansville etc. R. R. Co. 7 Ind. 369; Niantic Savings Bank v. Town of Douglas, 5 Bradw. 579; Simpson v. Denison, 10 Hare, 51, 56; Cook on Stock & Stockh. § 670. 6 Taylor on Corporations, § 536; International etc. R. R. Co. v. Bremond, 53 Tex. 96. 7 In re Bank of Hindustan, Law R. 16 Eq. 417. 8 Wood's Railway Law, 1686, citing Philadelphia etc. R. R. Co. v. Cata wissa R. R. Co. 53 Pa. St. 20; McCray v. Junction R. R. Co. 9 Ind. 358. But see Cork etc. R'y Co. v. Paterson, 18 Com. B. 414. 1 § 541. Of condemnation and sale of stock of dissenting shareholders.-It is not within the power of courts of law or equity to decree that the stock of shareholders dissenting from a plan of consolidation shall be condemned, appraised and sold, for the purpose of quieting factious opposition 1 But the legislature may, by virtue of the State's sovereign power of eminent domain, which extends not only to real, but also to personal pro e ty, provide, in the statute authorizing consolidation, lease, or sale, that dissenting shareholders' stock shall be appraised and condemned.' Such statutes, however, are strictly construed, and accordingly it has been decided that authority to condemn for the purpose of consolidation is no warrant for such proceedings against a shareholder dissenting from a lease.3 1 Mills v. Central R. R. Co. 41 N. J. Eq. 1. 2 Black v. Delaware etc. Canal Co. 21 N. J. Eq. 455, reversing 22 N. J. Eq. 130, under the act of March 17, 1870; Cook on Stock & Stockh. $671. Cf. Trask v. Peekskill etc. Works, 6 Hun, 236; N. Y. Laws of 1867, ch. 960; Lauman v. Lebanon Valley R. R. Co. 30 Pa. St. 42; 72 Am. Dec. 685. 3 Mills v. Central R. R. Co. 41 N. J. Eq. 1. 542. Whether corporate creditors may enjoin a consolidation.-As a general rule corporate creditors have no standing in court to object to the consolidation of the debtor company with other corporations, for their claims remain a lien upon the property of the company after consolidation as before, and since they are in no wise constrained to relinquish their liens and accept in lieu thereof the personal liability of the new company. It would seem, however, that when the consolidation evidently imperils the security of corporate creditors, and no provision is made for the payment of the debts of the original companies, the creditors may prevent the consolidation, at least until their rights have been secured.2 1 Powell v. North Missouri R. R. Co. 42 Mo. 63. Thus, of course, a mortgage lien may be enforced against property covered by it, after the consolidation: Eaton etc. R. R. Co. v. Hunt, 20 Ind. 457. See Racine etc. R. R. Co. v. Farmer's Loan and Trust Co. 49 Ill. 331; 95 Am. Dec. 595. Likewise, a maritime lien on a vessel remains after the consolidation of the corporation owning the vessel: The Key City, 14 Wall, 653; In re Manches.er etc. Assoc. Law R. 9 Eq. 643; In re India etc. Assurance Co. Law R. 7 Ch. 651; Griffith's Case, Law R. 6 Ch. 374; In re Family Endowment Soc. Law R. 5 Ch. 118. 2 Booth v. Bunce, 33 N. Y. 139; 18 Am. Dec. 372; Barclay v. Quicksilver Mining Co. 9 Abb. Pr. N. S. 2.3. Cf. Kelly v. Mariposa Co. 4 Hun, 632. § 543. The effect of consolidation-(a.) Upon the existence of the original companies.-The effect of a consolidation is generally a dissolution of the original corporations, and at the same instant the creation of a new corporation, with property, powers, liabilities, and stockholders, derived from those passing out of existence1 Consolidation does not necessarily, however, work a dissolution of both or of either of the original companies. It may be that the consolidation of two corporations, or amalgamation, as it is called in England, if full and complete, may work a dissolution of them both, and its effect may be the creation of a new corporation. Whether such be the effect or not, must depend upon the statute under which the consolidation takes place, and upon the intention therein manifested. If, in the statute, there be no words of grant of corporate powers, it is difficult to see how a new corporation is created. If it is, it must be by implication; and it is an unbending rule that a grant of corporate existence is never implied. In the construction of a statute every presumption is against it. There are numerous cases where a consolidated company has been held liable for the debts of the old companies; and where it has been held to possess the rights of the old companies; but this does not necessarily imply a surrender of all the old charters. Even when for all other purposes the original corporations have been dissolved by a consolidation, there remains a qualified existence for the purpose of winding up its affairs.® 1 Pullman Palace Car Co. v. Missouri Pacific R'y Co. 115 U. S. 587, 504; Louisvil.e ctc. R. R. Co. v. Palmes, 109 U. S. 244; Railroad Co. v. Georgia, 9U S. 359, 331; Railroad Co. v. Maine, 96 U. S. 499, 58; Shields v. Ohio, £5 U. S 319, 320; Philadelphia etc. R. R. Co. v. Maryland, 10 How. 376, 33; Ridgway Township v. Griswold, 1 McCrary, 151; Clearwater v. Meredith, 1 Wall. 25, 40, 42; Lightner v. Boston etc. R. R. Co. 1 Low. 338; In tianola R. R. Co. v. Fryer, 56 Tex. 609, 616; Cheraw etc. R. R. Co. v. Commissioners, 83 N. C. 519; Meyer v. Johnston, 53 Ala. 237; S. C 61 Ala, 603; Miller v. Lancaster, 5 Cold. 514; Columbus etc. R. R. Co. v. Powell, 40 Ind. 37; Indianapolis etc. R. R. Co. v. Jones, 29 Ind. 465; 95 Am. Dea. 654; Eaton etc. R. R. Co. v. Hunt, 20 Ind. 457; State v. Bailey, 16 Ind. 46; 79 Am. Dec. 405; Cooper v. Corbin, 105 Ill. 224; Racine et. R. R. Co. v. Farmers' Loan & Trust Co. 49 Ill. 331; 95 Am. Dec. 595. 2 The existence of one company may be merged into that of the other, in which case the latter is not dissolved: Central R. R. etc. Co. v. Georgia, 92 U. S. 635; Philadelphia etc. R. R. Co. v. Maryland, 10 How. 376. 3 Railroad Co. v. Georgia, 93 U. S. 359, 362; Lightner v. Boston etc. R. R. Co. 1 Low, 335, 340. 4 Central R. R. etc. Co. v. Georgia, 92 U. S. 665, 670. Acc. Wabash etc. R'y Co. v. Ham, 114 U. S. 587, 595; Railroad Co. v. Georgia, 98 U. S. 359. 5 Central R. R. etc. Co. v. Georgia, 92 U. S. 665, 670. 6 Edison Electric Light Co. v. New Haven Electric Light Co. 35 Fed. Rep. 233. § 544. (b). Upon by-laws, rules and regulations -The English statute.-In England it is enacted by the Railways' Clauses Act of 1863, that all resolutions of any general meeting of the board of directors, or of any committee of the company dissolved by the amalgamation, shall, so far as applicable, remain in force, and apply to the amalgamated corporation, its directors, officers and servants, until duly revoked or altered by it. And another sec tion of the same act provides that all the by-laws, rules and regulations of the dissolved company, relating to the management, use or control of its undertaking, shall, notwithstanding the dissolution, continue to be in force, and applicable to the undertaking, and shall and may be enforced by and available to the amalgamated company in its own name, as well for the recovery of penalties as for all other purposes, as if the same respectively had been originally made by the amalgamated company, until the expiration of twelve months after the time of amalgamation, or until other by-laws, rules and regulations are duly made by the amalgamated company in their stead.2 1 23 & 27 Vict. ch. 92, § 51. |