Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/430

 § 426.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. obligations incurred by either of the former companies. 1 Ac- cordingly, the new corporation may be held liable for the torts of the consolidating companies committed before con- solidation. 2 § 42G. Evidently the consolidated company, by the statutes allowing or ratifying the consolidation, may be made to assume all the liabilities of the former companies to their creditors, 3 or the terms of the consolidation and the statutes authorizing it may expressly or by implication prevent such liability from arising. 4 In the absence of provision, however, by which the consolidated corporation is made to assume or is kept free from such liabilities, it has been held that where two or more rail- road corporations are consolidated, the consolidated company, so far as the creditors of one of the original companies are concerned, is a successor of that particular company only in respect of the property formerly belonging to it ; and in re- spect of the properties of the other companies, the consolidated company is a new and independent compaii}', on which such creditors have no claim upon their original contracts, but only by virtue of its assumption of the obligations of the old com- panies. 5 1 Board of Administrators v. Gas Light Co., 40 La. Ann. 382. See Berry o. K. C, etc., R. R. Co., 52 Kan. 774; Carutliers v. Kas. City R. R. Co., 59 Kas. 629; Greene v. Woodland Ave. St. R. Co., 62 Oh. St. 67; Lincoln St. Ry. Co. v. Lincoln, 61 Neb. 109. 2 Chicago, R. I. and Pac. R. R. Co. v. Moffatt, 75 111. 524; Coggin v. Cen- tral R. R. Co., 62 Ga. 685; Texas and P. R. R. Co. v. Murphy, 46 Tex. 356; Louisville, N. A., etc., Ry. Co. v. Boney, 117 Ind. 501. See Colum- bus, Chicago, etc., Ry. Co. v. Skid- more, C)9 111. 566; Indianola R. R. Co. v. Fryer, 50 Tex. 609; compare Hous- ton, etc., R. R. Co. v. Shirley, 54 Tex. 125; St. Louis and S. F. R. R. v. Marker, 41 Ark. 542. 8 See Western Un. R. R. Co. v. Smith, 75 111. 49G; Warren v. Mobile, 410 etc., R. R. Co., 49 Ala. 582; John Hancock Ins. Co. v. Railroad Co., 149 Mass. 214; e. g., the consolidated company may have to carry out a contract to exchange stock for bonds made by one of the consolidating companies, and so may have to de- liver its own stock. Day v. Wor- cester, etc., R. R. Co., 151 Mass. 302. 4 Shaw v. Norfolk county R. R. Co., 8 Allen (Mass.), 407; Whipple v. Union Pac. Ry. Co., 28 Kan. 474. 5 Prouty v. Lake Shore, etc., R. R. Co., 52 N. Y. 363. Similarly, in re- gard to the officers of the consoli- dated company, in so far as the trust devolves upon them of managing the property of the old company, they are the successors of its officers and bound by proceedings against them. Prouty v. Lake Shore, etc., R. R. Co., supra.