Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/422

 § 415.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. 4. SUCCESSION. Succession; consolidation; dissolu- tion, § 414. Succession, wherein differing from consolidation, § 415. Property passes subject to restric- tions, § 416. Successor assumes position of former corporation, § 417. Special exemptions may not pass, §418. § 414. There are certain transactions or proceedings by which the legal relations subsisting in respect of a corporate sion ; con- enterprise are affected radically or even as a whole ; dissohi- 0n; the first, a sort of succession, where the rights, fran- tion. chises, and property of a corporation are acquired by an individual or by another corporation ; * the second, a con- solidation, where two or more corporations are united; the third, a dissolution, where a final liquidation of the legal rela- tions subsisting in respect of a corporate enterprise takes place. The three proceedings have much in common, indeed run into each other. A consolidation rarely occurs without a succession as well as a dissolution. Succession, the simplest of these pro- ceedings, may be considered first. 2 § 415. What is here called a succession takes place when the Succession, property and franchises of a corporation are bought, for instance on the foreclosure of a mortgage. 3 A succession differs from a consolidation in this respect, among others, that the purchaser acquiring the prop- erty and franchises of the corporation, does not become re- sponsible for its liabilities already accrued ; 4 while, on the other wherein differing from con- solidation was filed. Houston and T. C. R'y Co. v. Shirley, 111 U. S. 358. Under the Federal acts of 1887 and 1888 a corporation incorporated in one state only cannot be compelled to answer in a Circuit Court of the United States held in another state in which it has a usual place of business, to a civil suit at law or in equity brought by a citizen of a different state. Shaw v. Quincy M'g Co., 145 U. S. 444. 1 For the rights of creditors when the property of an insolvent corpo- 402 ration is transferred, say to another corporation composed of the same shareholders, see §§ 657, 667, 708. 2 For the power of a corporation to transfer its franchises, see §§ 131, 132, 304. 3 For the right of a corporation to mortgage its franchises, see § 304. A power in the corporation to mort- gage or transfer its franchises is as- sumed for the purposes of the present discussion. 4 Hoard v. Chesapeake & O. Ry., 123 U. S. 222; Wright v. Milwaukee,