there is a concourse of creditors of the original companies, it is held in Virginia that they shall not be required to levy execution, each against those portions only of the property originally belonging to the companies respectively indebted to them; but that they may sell the whole consolidated property and apportion the proceeds among themselves; the court in this case saying, "if cut up into parcels and sold by divisions it would lose its great value as a continuous line of road."" For, it was reasoned, the fact that the particular separate division on which the mortgage rests is sold at the same time and together with other divisions of the road, is in no manner a violation of the contract of the mortgagee. With respect to evidence in actions against the amalgamated company, it is enacted in England that all books and documents which would have been evidence in respect of any matter for or against the dissolved company, shall be admitted as evidence in respect of the same, or the like matter, for or against the amalgamated company.

1 Columbus etc. R. R. Co. v. Skidmore, 69 Ill. 566.

8

2 Whipple v. Union Pacific R. R. Co. 28 Kan. 474 (an action for personal injuries).

3 Warren v. Mobile etc. R. R. Co. 49 Ala. 582.

4 Taylor on Corporations, 665; Indianola R. R. Co. v. Fryer, 56 Tex. 609. Cf. Houston etc. R. R. Co. v. Shirley, 54 Tex. 125; People v. Empire

etc. Ins. Co. 92 N. Y. 105.

5 Ketcham v. Madison etc. R. R. Co. 20 Ind. 26.

6 Gilbert v. Washington City etc. R. R. Co. 33 Gratt. 585, 611.

7 Gilbert v. Washington City etc. R. R. Co. 33 Gratt. 586, 611. 8 26 & 27 Vict. ch. 92, § 50.

§ 564. (m.) Upon the jurisdiction of the several States. A corporation cannot be created by the co-operating legislation of two States so as to be the same legal entity in both States; and where

hes

ed &

T.

two States have each created a corporation with the same name, for the same purposes, and composed of the same natural persons, it must, nevertheless, be considered as a distinct corporation in each State.1 A corporation may have a two-fold organization, and be, so far as its relation to one State is concerned, both foreign and domestic. It may have a corporate entity in each State, yet, in. its general character, be of a bifold organization. Accordingly, none of the States can impair the rights vested in the companies composing the con-solidated corporation. No one of the States can, for example, impose a tax on the whole property of the consolidated company, when one of them was originally exempt from taxation, unless the removal of the exemption was a condition of allowing the consolidation; and generally, in all other respects, the component parts of a consolidated company continue subject to the laws and jurisdiction of the respective States wherein they lie and from which they originally received their charters. Thus, each of the original companies continues subject to the insolvency laws of the State of its creation, and to statutes regulating charges for transportation, and to the jurisdiction of the courts of the State with respect to the appointment of receivers. When, however, the two corporations have the same name, the same stockholders, a unity of stock and of interest, an action against one of them will bring all the parties necessary for the complete settlement of a controversy, before the court, and its decrees will be binding upon them. But a State is not to be deprived of its jurisdiction over a corporation created

8

5

by it, in actions brought by its citizens against it under it3 new name, by a removal of the cause to the federal court upon the motion of one of the consolidating companies created by another State."

1 Racine etc. R. R. Cɔ v. Farmer's Loan and Trust Co. 49 Ill. 331, 348; $5 Am. Dec. 5.5. Acc. Burger v. Grand Rapids etc. R. R. Co. 22 Fed. Rep. 561; Colglazier v. Lou.sville cte. 1'y Co. 22 Fed. Rep. 568.

2 Burger v. Grand Rapids etc. R. R. Co. 22 Fed. Rep. 561; Colglazier v Louisville etc. R. R. Co. 22 Fed. Rep. 58; Ohio etc. R. R. Co. v. Wheeler, 1 Black, 2.6; State v. Northern Central Ry Co. 17 Md. 193; Sprague v. Hartford etc. R. R. Co. 5 R. I. 233; McGregor v. Erie R'y Co. 35 U. S. 115; State v. Metz, 32 N. J. 193.

3 Chesapeake etc. R. R. Co. v. Virginia, 94 U. S. 718; Branch v. Charleston, 92 U. S. 677; Philadelphia etc. R. R. Co. v. Maryland, 1) How. 376; Delaware R. R. Co. v. Cox, 18 Wall. 206; State v. Commissioner of Railroad Taxation, 37 N. J. 243; Wood's Railway Law, 1685.

4 Graham v. Boston etc. R. R. Co. 118 U. S. 161; S. C. 14 Fed. Rep. 753; Stone v. Farmers' Loan & Trust Co. 116 U. S. 307; Stone v. Illinois Central R. R. Co. 113 U. S. 3:7; Farnum v. Blackstone Canal Co. 1 Sum. 46; Eaton et. R. R. Co. v. Hunt, 20 Ind. 457; Chicago etc. R. R. Co. v. Moffitt. 75 Ill. 524; Racine etc. R. R. Co. v. Farmer's Loan & Trust Co. 49 Ill. 331; 95 Am. Dec. 535.

5 Platt v. New York etc. R. R. Co. 26 Conn. 544, 571.

6 Stone v. Farmers' Loan & Trust Co. 116 U. S. 307.

7 In re United States Rolling Stock Co. 55 How. Pr. 286; Taylor v. Atlantic etc. R. R. Co. 55 How. Pr. 286; Ellis v. Boston etc. R. R. Co. 107 Mass. 1; Richardson v. Vermont etc. R. R. Co. 44 Vt. 613.

8 Paine v. Lake Erie etc. R. R. Co. 31 Ind. 347.

9 Chicago etc. R. R. Co. v. Lake Shore etc. R'y Co. 5 Fed. Rep. 19.

2

§ 565. Of lease.-Charter or statutory authority to consolidate does not confer power to lease.1 Conditions in statutes authorizing railway companies to lease their roads must be fully complied with, otherwise the lease will be invalid. Thus, when an act authorizes a lease of the company's property to another company upon the certificate of the board of trade being obtained, no lease can be valid before the certificate has been obtained, and mere references in subsequent acts of Parliament to an agreement for a lease which has been entered into will not make the agreement valid. A lease of railway property should contain all usual and

proper covenants on the part of the lessee for maintaining the railway, or the portion thereof comprised in the lease, in good and efficient repair and working condition during the continuance thereof, and for so leaving it at the expiration of the term thereby granted, and such other provisions, conditions, covenants, and agreements as are usually inserted in lea es of like nature.* Where the power to make a lease is vested in the shareholders of the company, the directors cannot radically modify its terms and conditions. Dissenting shareholders may restrain an unauthorized lease."

5

1 Mills v. Central R. R. Co. 41 N. J. Eq. 1, 7. See Archer v. Terre Haute etc. R. R. Co. 102 Ill. 493; S. C. 7 Am. & Eng. R. R. Cas. 249.

2 Peters v. Lincoln etc. R. R. Co. 14 Fed. Rep. 319; Kent Coast R'y Co. v. London etc. R'y Co. Law R. 3 Ch. App. Cas. 656; Wood's Railway Law, 1686.

3 Kent Coast R'y Co. v. London etc. R'y Co. Law R. 3 Ch. App. Cas. 656; Browne & Theobald's Railway Law, 317.

4 8 Vict. ch. 20, § 112.

5 Metropolitan Elevated R'y Co. v. Manhattan Elevated R'y Co. (N. Y. 1884) 14 Abb. N. Cas. 103 235; S. C. 15 Am. & Eng. R. R. Cas. 1, 51. See, also, Harkness v. Manhattan Elevated R'y Co. N. Y. Daily Reg. Oct. 8, 1886. Of. People v. Metropolitan Elevated R'y Co. 26 Hun, 84.

6 Pond v. Vermont etc. R. R. Co. 12 Blatchf. 280; Tippecanoe County v. Lafayette etc. R. R. Co. 50 Ind. 85.

2

§ 566. Statutory authority requisite to validity of lease.-Although a railway company may lease its property and road, where not prohibited by statute or some principle of public policy, it may not lease its franchises without special legislative authority. In a recent well-considered case it was said, that unless expressly authorized by its charter or by legislative enactment, a railway company cannot, by lease or by other contract, turn over to another company for a long period of time its road and the appurtenances thereto, the use of its franchises and the exercise of its powers; nor

can any other railroad company, without similar authority, make a contract to receive the road, franchises and property of another railway.3 A lease or sale of franchises unauthorized by charter or statute, is not only an ultra vires act with respect to dissenting shareholders of the company, but it is also such an excess of its corporate powers as renders the company liable to forfeiture of charter at the instance of the State.5

1 Pittsburg etc. R. R. Co. v. Columbus etc. R. R. Co. 8 Biss. 456.

2 Thomas v. The Railroad Co. 101 U. S. 71; Abbott v. Johnstown, etc. R. R. Co. 80 N. Y. 27; 36 Am. Rep. 572: Troy etc. R. R. Co. v. Boston etc. R. R. Co. 85 N. Y. 107 Woodruff v. Erie R. R. Co. 25 Hun, 246; Pittsburg etc. R. R. Co. v. Bedford etc. R. R. Co. 81 Pa. St. Suppl. 104; Archer v. Terre Haute etc. R. R. Co. 102 Ill. 493; Hinckley v. Gildersleeve, 19 Grant (U. C.), 212; Attorney-General v. Niagara Falls etc. Co. 20 Grant, (U. C.) 34.

3 State v. Atchison etc. R. R. Co. 24 Neb. 143, 4 R'y & Corp. Law J. 86, 91, citing Railroad Co. v. Railroad Co. 118 U. S. 234; and Thomas v. The Railroad, 101 U. S. 71. Acc. East Anglian R'y Co. v. Eastern Counties Ry Co. 11 Com. B. 775; S. C. 21 Law J. Čom. P. 23; Great Northern R'y Co. v. Eastern Counties R'y Co. 9 Hare, 306; Beman v. Rufford, 1 Sim. N. S. 550. See further, upon the power of a corporation to acquire by lease or sale the franchises of another company: Pennsylvania Co. v. St. Louis R. R. Co. 113 U. S. 290; Gere v. New York Central R. R. Co. 19 Abb. N. Cas. 193; Mills v. Central R. R. Co. 41 N. J. 1; S. C. 25 Am. Law Reg. 610; Woodruf v. Dubuque etc. R. R. Co. (U. S. Cir. Ct. 1887) 19 Abb. N. Cas. 437, and note. In England it is enacted that no railway company shall grant or accept a lease or transfer of any railway unless under a distinct provision of an act specifying the parties: 8 & 9 Vict. ch. 96.

6 Pennsylvania R. R. Co. v. St. Louis etc. R'y Co. 118 U. S. 290; Thomas v. The Railroad Co. 101 U S. 71; Troy etc. R. R. Co. v. Boston etc. R'y Co. 86 N. Y. 107; Abbott v. Johnstown etc. R. R. Co. 80 N. Y. 27; 36 Am. Rep. 572; People v. Albany etc. R. R. Co. 77 N. Y. 232.

§ 567. Lessees of railways authorized to acquire the stock and absorb their lessors-The New York statute.-In New York, any railway company or its successor, created under the laws of that State, and being the lessor of the road of any other railway company, is railway company, is authorized by statute to take a surrender or transfer of the capital stock of the shareholders, or any of them, in the corporation whose road is held under lease,