Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/686

 § 668.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XI. pending, the consolidated company must be substituted in the action or in some way properly brought into court, before a judgment against it can be taken. 1 § 667. When there has been no consolidation of a debtor corporation with another, the creditors of the former ^rporation w ^ ^ ave n0 right to enforce their claims personalty succeeding against the latter merely because it has acquired the corporation, assets of the former, 2 unless the succeeding corpora- tion is merely a continuance of the old one or a revival of it under a new charter. 3 Moreover, that the name, and the major part of the shareholders and officers, of the old corporation were the same as those of the new, does not estab- lish conclusively that the latter is a mere continuance of the former. 4 " To ascertain whether a charter creates a new corporation, or merely continues the existence of an old one, we must look to its terms, and give them a construction con- sistent with the legislative intent and the intent of the corpo- rators." 5 § 668. To allow an insolvent corporation to make an assignment of its property, giving preferences to a portion of its creditors over the others, is unjust, as well as utterly repugnant to the doctrine that cor- porate property is a trust fund, on the credit of which persons contract with the corporation. If such property constitutes Insolvent assign- ments. 1 Selma, etc., R. R. Co. v. Harbin, 40 Ga. 706. Compare Ketcham v. Madison, etc., R. R. Co., 20Ind. 260. 2 Bellows v. Hallowell, etc., B'k, 2 Mason, 31; Wyman v. Same, 14 Mass. 58; Bruffett v. Gt. Western R. R. Co., 25 111. 353. See § 415. But creditors may under some circumstances fol- low the property of their debtor cor- poration. See § 657. 3 Mayor, etc., of Colchester v. Sea- ber, 3 Burr. 1S66; see Broughton v. Pensacola, 93 U. S. 266; Montgom- ery Web Co. v. Dienelt, 133 Pa. St. 585 ; and § 657. Thus, when a state bank is reor- ganized iuto a national bank, under provisions of the National Banking Act, the national bank is liable for 666 I the obligations of the state bank. Coffey v. National Bank, 46 Mo. 140. Compare State v. National Bank, 33 Md. 75. A corporation is not liable for the debts of a firm, though the members of the firm constitute the shareholders, and the firm assets have been transferred to the corpo- ration. McLellan v. Detroit File Works, 56 Mich. 579. See Georgia Co. v. Castleberry, 43 Ga. 187. 4 See cases in last note but one. 5 Story, J., in Bellows v. Hallowell B'k, 2 Mason, 31, 44. See, also, Mil- ler v. English, 21 N. J. Law, 317; People v. Marshall, 1 Gilman (111.), 672; Goulding v. Clark, 34 N. H. 148.