authorizing it. The new company may, of course, mortgage the entire property acquired by consolidation."

341. Public rights and duties of the new company.The new company must perform all the public obligations of the old, as for instance, the obligations of a common carrier,' and the purchasing or consolidated company becomes subject to restrictions upon charges for transportation, as to that part of its traffic which is conducted over the purchased road." This is provided by a statute in New York, which declares that nothing in this act contained shall be so construed as to allow the consolidated company to charge a higher rate of fare per passenger per mile upon any part or portion of the consolidated line, than is now allowed by law to be charged by each existing company respectively. And in England the same tolls are to be calculated and imposed at such rate as if the amalgamated railways had originally formed one line." As though in consideration for undertaking the above duties, the consolidated company acquires the public rights of the original companies, including even that of eminent domain." And it may therefore continue condemnation proceedings for the acquisition of right of way begun by the original corporations. But under the laws of Alabama the power of a railroad company to acquire land in aid of the construction of its road will not pass to a consolidated corporation of which it forms a part, unless its line, when completed according to its charter, will form a continuous track with those of the other constituents of the consolidated corporation, so as to admit of the passage of trains without break or interruption; the code providing that railroad companies whose tracks, when completed, admit the continuous passage of cars, without break

1 Charlotte &c. R. Co. v. Gibbes, N. Y. Laws of 1875, ch. 108, § 1, as (1388) 27 S. C. 385. amended by N. Y. Laws of 1883, ch.

2 Mead v. New York &c. R. Co., 387. 45 Conn. 199.

3 Peoria &c. R. Co. v. Coal Val. Min. Co., 68 Ill. 489.

4 Campbell v. Marietta &c. R. Co., 23 Ohio St. 168. Cf. Daniels v. St. Louis &c. R. Co., 62 Mo. 43.

5 N. Y. Laws of 1869, ch. 917, § 7;

68 Vic. ch. 20, § 91.

7 South Carolina R. Co. v. Blake,

9 Rich. 228, 233.

8 Kip v. New York &c. R. Co., 67 N. Y. 227; Toledo &c. Ry. Co. v. Dunlap, 47 Mich. 456.

or interruption, may consolidate themselves into one corporation, which shall possess all the powers, rights, and franchises of its constituent members. Appropriations made to one of the original companies are payable to the new. And an exemption from jury duty enjoyed by the officers of the old companies, vests in those of the new.'

§ 342. Right of the new company to the property of the old ones. Where one corporation goes entirely out of existence by being consolidated or merged into another, and no arrangements are made respecting the property and liabilities of the extinguished corporation, the one newly created will be entitled to all the property. The New York "Business Corporation Law" of 1890, provides that upon the consolidation and organization of the new corporation, all and singular the rights, privileges, franchises and interests of every kind belonging to or enjoyed by the corporations so, consolidated, and every species of property, real, personal and mixed, and things in action thereunto belonging, mentioned in such agreement of consolidation, shall be deemed to be transferred and vested in, and may be enjoyed by such new corporation, without any other deed or transfer; and such new corporation shall hold and enjoy the same and all rights of property, privileges, franchises and interests in the same manner and to the same extent as if the several corporations so consolidated had continued to retain the title and transact the business of such corporations, and the title to real and personal estate and rights and privileges acquired and enjoyed by either of the corporations shall not revert or be impaired by such consolidation, or anything relating thereto. In a recent Ala

1 Georgia Pac. Ry. Co. v. Gaines, (Ala. 1890) 7 So. Rep. 382; following Georgia Pac. R. Co. v. Wilks, (1889) 86 Ala. 479.

2 Scott v. Hansheer, 94 Ind. 1.

3 Zimmer v. State, 30 Ark. 677. See also, Fisher v. New York &c. R. Co., 46 N. Y. 644.

4 Thompson v. Abbott, 61 Mo. 176. 5 N. Y. Laws, 1890, c. 567, § 16. The English Railways Clauses Act of 1863, enacts that, "except as may be otherwise provided in the special

act, all debts and money due from or to the dissolved company, or any persons on their behalf, shall be payable and paid by or to the amalgamated company, (26 & 27 Vic. ch. 92, § 40); that all tolls, rates, duties and money due or payable by virtue of any act relating to the dissolved company from or to that company shall be due and payable from or to the amalgamated company, and shall be recoverable from or by the amalgamated company, by the same

bama case, a railroad company was incorporated, and its existence was limited to fifty years. A person conveyed a strip of land of the usual width to the company, on which the tracks were afterwards laid; the habendum clause limiting the term to fifty years, or so long as the charter of said company might continue. The act of incorporation was afterward amended so as to permit the State to purchase the company's property at the end of the fifty years, and if no such election was then made the charter was to be continued for ten years, with a like option at each recurrence of that period. Still later, the same grantor conveyed the land, including said strip, together with the reversion therein, to plaintiff's ancestor. All the rights of the railroad company became vested in the defendant corporation by judicial sale. The original act incorporating the railroad company authorized condemnation of land in case the company and the owner could not agree on the price thereof. The identical company ceased to own or use the land in controversy, but it had been continually used for railroad purposes by the successors in title of the first company. That company was never judicially dissolved, though it ceased to do business. Upon this state of facts it was decided that the estate was not termi

ways and means and subject to the same conditions as the same would or might have been recoverable from or by the dissolved company if the amalgamating act had not been passed, (26 & 27 Vic. ch. 92, § 40); that all deeds, conveyances, grants, assignments, leases, purchases, sales, mortgages, bonds, covenants, and securities which before the amalgamation have been executed, made or entered into by, with, to, or in relation to the dissolved company or the directors thereof, and which are in force at the time of amalgamation, and all obligations and liabilities which before the amalgamation have been incurred by or to, or which but for the amalgamation might or would have arisen in relation to, the dissolved company, or the directors thereof, shall be as

valid and of as full effect in favor of, against, or in relation to the amalgamated company, as if the same had been executed, made, or entered into by, with, or to, or in relation to, or had been incurred by or to or had arisen in relation to, the amalgamated company by name, (26 & 27 Vic. ch. 92, § 41); that all causes and rights of action or suit accrued before the time of amalgamation, and then in any manner enforceable by, for, or against the dissolved company shall be and remain as good, valid, and effectual for or against the amalgamated company as they would or might have been for or against the dissolved company affected thereby, if the amalgamating act had not been passed," (26 & 27 Vic. ch. 92, § 42).

nated by the lapse of the fifty years, or by the fact that the company had ceased to do business, as the continuance of the charter referred to in the deed meant the continuance of the chartered rights or privileges, which still existed, though exercised by another body corporate. Where two or more companies are consolidated the new one may enforce the rights of the old ones. All the choses in action of the old companies are transferred to the newly created company and may be enforced by it in its own name,3 and only in its own name. Thus the new corporation may lawfully use a patented axle box which both the old corporations had been licensed to use. The stockholders of a defendant company voted to consolidate its business with a tannery owned by the plaintiffs in another State. That vote was carried out to the extent of transferring the personal property of the foreign tannery to the defendant corporation, but not the realty. Upon cession of business and an accounting, it was held that whether the purchase of real property in another State was within the powers of the company or not, it should account for the actual value of the personalty it received."

§ 343. Liability of the new company. The extent of the liability of the new company is at least equal to the property derived by it from each of its constituent parts. For the property of the constituent companies passes. into the hands of the new company, as a taker with notice, charged with the payment of the debts of the old company. And equity will scrutinize with jealousy any arrangement among corporations 1 Davis v. Memphis &c. R. Co., 7 Harrison v. Arkansas &c. R. (1889) 87 Ala. 633. Co., 4 McCrary, 264; Brum v. MerUniversity of Vermont v. Baxter, chants' &c. Ins. Co., 16 Fed. Rep. 42 Vt. 99.

3 Cumberland College v. Ish, 22 Cal. 641; Miller v. Lancaster, 5 Coldw. 514; University of Vermont v. Baxter, 42 Vt. 99.

Indianola R. Co. v. Fryer, 56 Tex. 609; University of Vermont &c. v. Baxter, 42 Vt. 99.

5 Lightner v. Boston &c. R. Co., 1 Low. 338.

8

140; Hibernia Ins. Co. v. St. Louis &c. Transportation Co., 13 Fed. ep. 516; Prouty v. Lake Shore &c. Ry. Co., 52 N. Y. 363; Booth v. Bunce, 33 N. Y. 139; s. c. 88 Am. Dec. 372; Barclay v. Quicksilver Mining Co., 9 Abb. Pr. N. S. 283. Cf. Kelly v. Mariposa &c. Co., 4 Hun, 632.

8 Brum v. Merchants' Mutual Ins. Co., 16 Fed. Rep. 140; Hibernia In

Moore v. Swanton Tanning Co., surance Co. v. St. Louis &c. Transp. (1888) 60 Vt. 459. Co., 3 McCrary, 398. Cf. Bent v.

whereby the assets of an insolvent corporation, which are a trust fund for its creditors, are turned over to another corporation, frittered away or otherwise diverted from the creditors who have the equitable charge upon it.' Conversely, however, where it is not otherwise provided, by the enabling act or the contract of consolidation, the new company is not liable upon the debts of the original corporations except so far as the property derived from each may suffice to satisfy their respective creditors. The assets of the old companies may be followed in equity, as trust funds, into the hands of the new, and the new company takes with notice of the trust. But as a mortgage foreclosure cuts off the antecedent general indebtedness of the mortgagor, such debts will not follow. the property where the consolidation takes place subsequently to such a foreclosure. And so it has been held that a mortgage given by the consolidated company upon all the property under its control, is superior to the claims of the unsecured creditors of the company from which that property was derived. The consolidated company may be expressly required, however, to assume all the debts of its constituent parts; without regard to the sufficiency of the property derived from them to satisfy the claims. The New York "Business Corporation Law" of 1890 enacts that the rights of creditors of any corporation that shall be so consolidated shall not in any manner be impaired, nor any liability or obligation for the payment of any money due or to become due to any person or persons, or any claim or demand for any cause existing against any such corporation or against any stockholder thereof be released or impaired by any such consolidation; but such new corporation shall suc

Hart, 73 Mo. 641, affirming s. c. 10 Finney, 14 Gratt. 338; Montgomery Mo. App. 143. &c. R. Co. v. Branch, 59 Ala. 139;

1 Patton v. Tribilcock, 91 U. S. 47; The Key City, 14 Wall. 653; Powell Alexander v. Relfe, 74 Mo. 495. v. North Missouri R. Co., 42 Mo. 63. 4 Houston &c. R. Co. v. Shirley, 54 Tex. 125.

2 Prouty v. Lake Shore &c. R. Co., 52 N. Y. 363; Shackleford v. Mississippi Central R. Co., 52 Miss. 159. Cf. Indianola R. Co. v. Fryer, 56 Tex. 609; Houston &c. R. Co. v. Shirley, 54 Tex. 125.

3 Harrison v. Arkansas Valley R. Co., 4 McCrary, 264; Barksdale v.

5 Tysen v. Wabash R. Co., 15 Fed. Rep. 763.

6 Warren v. Mobile &c. R. Co., 49 Ala. 582; Western Union R. Co. v. Smith, 75 Ill. 496.