nately as the same with each, of the old ones, or, more ex-. plicitly, that, although the new corporation is a new person, for the acquisition of new rights, or the making of new contracts, the old corporations shall not be altogether ended, but shall continue under the new name, so far as to preserve all their existing obligations unchanged. Compton v. Wabash, St. L. & P. R. Co., 45 Ohio St. 592, 618, 33 Am. & Eng. R. Cas. 56. If that is made a condition of the consolidation, the consolidating companies do remain in existence to that extent. There is no greater legal difficulty in continuing the liability upon a contract to exchange stock for the bonds than there is for continuing it upon one to pay money for them. In neither case does the legislature say, in terms, that the old corporation shall be taken to remain in existence for this purpose; but, if it requires the end, it implies the means. Quando aliquid mandatur mandatur et omne per quod pervenitur ad illud. See Broughton v. Pensacola, 93 U. S. 266, 269, 270; Atlantic Nat. Bank v. Harris, 118 Mass. 147, 151; Coffey v. National Bank, 46 Mo. 140, 143; Board of Administrators 2. New Orleans Gas Light Co., 40 La. Ann. 382, 22 Am. & Eng. Corp. Cas. 569.

To our mind, the only really debatable point is not what the legislatures of New Hampshire and Massachusetts could do as against the consolidating companies, but what they did in fact; that is, what is the true construction of the words of the New Hampshire statute of 1883, chap. 239, and of our statute of 1883, chap. 129? Atlantic & G. R. Co. v. Georgia, 98 U. S. 359, 362; Central R. & Banking Co. v. Georgia, 92 U. S. 665, 670. Upon that point we always have recognized that different minds might form different opinions. To justify our own, it is unnecessary to repeat the very sweeping language of the statute which seems to be as broad as could have been used had the legislatures had this particular obligation in mind. The question is not whether words, on their face insufficient, should be stretched by construction to embrace the obligation in the bonds. It is whether the words "all the obliga tions, debts, and liabilities," "all claims and contracts," etc., shall be cut down upon some extrinsic reason.

We find no such reason. On the contrary, every extrinsic fact is in favor of giving its natural meaning to the laboriously comprehensive language of the acts. The road of the obligor was let to the Worcester & Nashua Railroad before it was built, by authority of statute. The statute which authorized the issue of these bonds, and required them to be convertible into stock, also required the Worcester & Nashua railroad to guaranty them; and it did so. It paid the interest upon them directly to the bondholders, and its lease was changed so as

to require it to do so. Afterwards it brought about an exchange of the original bonds for others, at a lower rate of interest, but otherwise like the old ones, and mortgaged its road as additional security for them. In 1875 the Worcester & Nashua Railroad was authorized to purchase the bonds and stock of the obligor, providing for the continued exchange of stock for bonds on presentation. Finally the last step was taken of authorizing a consolidation on terms of perfect equality, which was carried out. Under the existing relations of the companies, it was little more than a formal act. In view of the fact that every step taken was in pursuance of special legislation, it is not to be believed that the most important obligations which there were outstanding were forgotten, or were not contemplated. It is probable that this particular feature of them, which had been protected in 1875, was before the mind of the legislature. The effect of consolidation-if, as we must assume, the terms prescribed and assented to were just-was simply to bring together two groups of shares, of equal value. Justice to the bondholders forbade allowing the Nashua & Rochester Railroad to extinguish itself to their detriment. No injustice was done to stockholders by continuing its existence under the altered name. We must decide, a second time, that, for the purpose of continuing the obligation of these bonds in existence according to their tenor, the defendant is the Nashua & Rochester Railroad Company.

The reasoning which has led us to the conclusion that the defendant is bound to make good the contract of the Nashua & Rochester Railroad to exchange its stock for bonds, and the fact that the Nashua & Rochester stock, if delivered, would have been exchangeable at once for the defendant's stock, share for share, lead us to the further conclusion that the defendant was bound to deliver its own stock, and that the demand was sufficient.

Exceptions overruled.

Liability of Consolidated Company on Debts and Contracts of Constituent Corporations.-See Louisville, N. A. & C. R. Co. v. Boney (Ind.), 39 Am. & Eng. R. Cas. 168, note 176, 229; John Hancock Mut. L. Ins. Co. v. Worcester, N. & R. R. Co. (Mass.), 39 Id. 227.

Exchange of Stock for Bonds-Exercise of Option-Reasonable Time-Notice. In Catlin v. Green, 120 N. Y. 441, it was heldt hat the fact that no notice was given to holders of corporate stock to exercise an option given them by contract to exchange their stock for mortgage bonds, will not excuse stockholders who have been guilty of laches in exercising the option, where no such notice was required by the contract. Stockholders who have neg'lected to exercise an option to exchange their stock for mortgage bonds of another corporation within a reasonable time, where there is no express limitation as to time, and until the stock has become worthless and the assets and property of the corporation have passed into the hands of a re

ceiver, thus making performance impossible, will be held to have abandoned and waived all right to elect to have such stock exchanged for bonds. The court said: "The trial court found that the plaintiff and the previous owners of the stock were chargeable with laches in the exercise of the option given under the agreement to convert the stock into bonds, and had thereby abandoned and waived all right to elect to have such stock exchanged for bonds, and that the tender and demand was not made within a reasonable time after the right to elect under the agreement to convert the stock into bonds had accrued. This finding appears to conform to the rule that where an option to be exercised, or a condition to be performed, is not limited by the agreement, such option must be acted upon and the condition performed or abandoned within a reasonable time, and this is well sustained by authority. Fitzpatrick v. Woodruff, 96 N. Y. 561-565; Wooster v. Sage, 67 N. Y. 68: Johnston v. Trask, 40 Hun (N. Y.), 415, 116 N. Y. 136-143; Vyse v. Wakefield, 6 Mees. & W. 442-451. The appellant contends that the doctrine of estoppel lies at the foundation of the law as to waiver, that while one party has time and opportunity to comply with a condition precedent, if the other party does or says anything to put him off his guard, and induce him to believe that the condition is waived or that strict compliance will not be insisted on, he is afterwards estopped from claiming non-performance of the condition. This we may concede. But what has the defendant done or said that has put the plaintiff or the former owners of the stock off their guard, or induced them to believe that strict compliance would not be insisted upon? Our attention is called to no such word or act of the defendant, and in our examination of the case we fail to discover any. It is further contended that no notice was given by the defendant to the plaintiff or former owners of the stock to exercise the option, or that it would be deemed abandoned. Very true, but no such notice was required by the provisions of the contract, or by any rule of law to which our attention has been called. It appears from the testimony that the stock issued to the Brooklyn, Winfield & Newton Railway Company for its lease was soon thereafter, and before the mortgage bonds had been issued, indorsed by its treasurer in blank, and transferred to other parties. The transfer, however, was never entered upon the books of the company, so that the defendant or the officers of the North Second Street & Middle Village Railway Company had no means of knowing who were the holders of the stock. The plaintiff or the prior owners of the stock had the right, within a reasonable time after the mortgage bonds had been issued, to present their stock at the company's office, and have it exchanged for bonds. But this option should have been exercised within a reasonable time. The holding of the stock for upwards of nine years until it had become worthless and the company insolvent, and until its property and assets had passed into the hands of a receiver, thus making performance impossible, amounts to gross laches and a waiver of the right to exercise the option and demand performance."

POLHEMUS

ย.

FITCHBURG R. Co.

(123 New York 502.)

Consolidation-Action Against New Company on Mortgage Bonds-Con⚫ struction of Statute.-New York Laws, 1869, chap. 917, § 5, providing for the consolidation of corporations, provides that "all debts and liabilities incurred by either corporation, except mortgages, shall thenceforth attach to such new corporation and be enforced against it and its property." Held, that by the excepting of mortgages from the liabilities of the new company, the bonds themselves secured by the mortgage are not also excepted, and an action may be maintained against the new company on the bonds and coupons of one of the constituent corporations.

RUGER, C. J., EARL and FINCH, JJ., dissenting.

APPEAL from the Supreme Court, General Term, Second Department.

Action to recover upon certain due and unpaid interest coupons. Defendant appeals from a judgment of the General Term affirming a judgment for the plaintiff recovered below. John H. Peck, for appellant.

Charles E. Patterson, John B. Gale, and George L. Nichols, Jr., for respondent.

GRAY, J.-The plaintiff, being the holder of bonds of the Troy & Boston Railroad Company, has sued the defendant to recover upon certain due and unpaid interest Case stated. coupons, upon the ground that by the consolidation of his compnay with the Fitchburg Company the obligation of meeting that liability was assumed by this defendant, as the new corporation, by force of the act of consolidation. The defense to the suit is that by the terms of the statute authorizing the consolidation the defendant is exempted from such a liability. The defense is purely a technical one, and, if allowed to prevail, will have the result, obviously enough, of depriving the various holders Nature of of these bonds of valuable property rights, which they had every reason to believe themselves secure in for the bonds represented an obligation of the Troy & Boston company to pay upon the principal, annually, 7 per cent. interest until the day of their maturity. As a matter of familiar knowlege to all, such a form of security, for the payment of which, according to its tenor, all the obligor's fran

defense.

chises, properties, and revenues were mortgaged, would induce the investment of their moneys by all who desired a well secured corporate obligation, bearing the highest legal rate of interest, and having a long period of existence. From the reading of the consolidation plan, as developed by the agreement of the companies, it is plain enough that a leading principle is to alter the obligation represented by these bonds, so that no more than 4 per cent. interest should be paid by the new company on that particular amount of indebtedness. It is also quite evident from this plan that the stockholders will gain materially by the difference in the interest payments, and will receive from the proceeds of the Troy & Boston property in this consolidation an amount of stock measured by the saving of interest.

-Statute.

The question for us to decide is whether this scheme is sanctioned by the statute, and if under its cover, the bondholders can be deprived of those rights and remedies which they had previously enjoyed. The consolidation Consolidation is under and subject to the statute, and if it is open to such a construction as the appellant claims, it is difficult to see how a great wrong is not permitted. By an act of the legislature, passed in 1869, (Laws, chap. 917,) the consolidation of railroads was authorized in certain cases, of which this is one. By its third section the parties to the agreement of consolidation are created one corporation. By its fourth section all the rights, privileges, exemptions, and franchises of each corporation, and all of its property, real, personal, and mixed, its debts and other things in action, are vested in the new corporation. Its fifth section reads as follows, viz.: "85. The rights of all creditors of, and all liens upon, the property of either of said corporations, parties to said agreement and act, shall be preserved unimpaired, and the respective corporations shall be deemed to continue in existence to preserve the same, and all debts and liabilities incurred by either of said corporations, except mortgages, shall thenceforth attach to such new corporation, and be enforced against it and its property to the same extent as if said debts or liabilities had been incurred or contracted by it." The defense here is based on certain words in that section, and the argument is, in effect, that by the excepting of mortgages from the liabilities, which are made to attach to the new corporation, the bonds themselves, to which the mortgage was a collateral security, are also excepted. This seems to be somewhat startling as a proposition, whether we view it in the light which a usual and correct use of the English language affords, or whether we view it in connection with the legal fact that by the con

Statute does

not except bonds.