ceed to and be held liable to pay and discharge all such debts and liabilities of each of the corporations consolidated in the same manner as if such new corporation had itself incurred the obligation or liability to pay such debt or damages; and the stockholders or the respective corporations consolidated shall continue, subject to all the liabilities, claims and demands existing against them as such, at or before the consolidation; and no action or proceeding then pending before any court or tribunal in which any corporation that may be so consolidated is a party, or in which any such stockholder is a party, shall abate or be discontinued by reason of such consolidation, but may be prosecuted to final judgment, as though no consolidation had been entered into; or such new corporation may be substituted as a party in place of any corporation so consolidated, by order of the court in which such action or proceeding may be pending. Without a statute, however, and unless otherwise provided in the statute authorizing a consolidation or by the terms of agreement between the companies, the consolidated corporation assumes all the liabilities of the companies composing it, and they may be enforced by proceedings against the new company.2 IN. Y. Laws 1890, c. 567, § 17. 2 Harrison v. Union Pacific R. Co., 13 Fed. Rep. 522; s. c. 15 Fed. Rep. 563; Tysen v. Wabash R. Co., 11 Biss. 510; Western R. Co. v. Davis, 66 Ala. 578; Sappington v. Little Rock &c. Ry. Co. 37 Ark. 23; Slattery v. St. Louis &c. Transp. Co., 91 Mo. 217; s. c. 60 Am. Rep. 245; Thompson v. Abbott, 61 Mo. 176; Miller v. Lancaster, 5 Coldw. 514, 520; Columbus &c. Ry. Co. v. Powell, 40 Ind. 37; Indianapolis &c. R. Co. v. Jones, 29 Ind. 465; Columbus &c. R. Co. v. Skidmore, 69 Ill. 566; s. c. 95 Am. Dec. 654; Caley v. Coburg &c. R. Co., 14 Grant. (U. C.) 531. See Houston &c. R. Co. v. Shirley, 54 Tex. 125; Warren v. Mobile &c. R. Co., 49 Ala. 582. But see Shaw v. Norfolk County R. Co., 16 Gray, 407. Cf. Chase v. Vanderbilt, 5 Jones & Sp. 334. But it is held in the case of railroads that a statute providing that in case of the consolidation of two or more companies, the new corporation shall be liable for all the debts of each company entering into the arrangement, applies only to companies which may thereafter consolidate. Wood's Ry. Law, 1682; Hatcher v. Toledo &c. R. Co., 62 Ill. 477. And it is held also that where two railroads are consolidated, as far as one of the creditors of one of the original companies is concerned, the consolidated company is the successor of the old company, but in respect to the properties of the other companies it is a new and independent company, and such a creditor has no claim against it upon the original contract, but only by virtue of its assumption of the obligation of the old companies. Boardman v. Lake Shore &c. Ry. 344. The same subject continued.- Liabilities of the old companies may be enforced by direct actions against the new;' therefore where a railroad company, after the execution of promissory notes, is consolidated with another company, and the newly formed company assumes a new name, it may be sued by the name thus assumed, and it will be estopped from denying the name by which it is sued. The statutes of consolidation generally provide that the old companies shall be deemed to continue in existence for the purpose of preserving remedies, and there are judicial decisions which support this theory where the statute does not expressly so provide. And even where the consolidating statute provides simply that the president of the new company "shall be held in law, as to service of process, as the president of " each of the constituent companies, an unliquidated claim, as, for example, for personal injuries, may be made the basis of an action against the consolidated company in the first instance. But of course where two or more railroad corporations are consolidated, and the new corporation thus formed assumes the debts and obligations of the original companies, the official representatives individually of the new organization are not necessary or proper parties to enforce a liability of one of the old companies. If the plaintiff has a cause of action, it is against the new corporation alone, and not against its individual directors Co., 84 N. Y. 157, 181; Chase v. 1 Western &c. R. Co. v. Smith, 75 Ill. 496; Warren v. Mobile &c. R. Co., 49 Ala. 582; Pullman Car Co. v. Missouri Pacific R. Co., 115 U. S. 581; Louisville &c. R. Co. v. Boney, 117 Ind. 501; Thompson v. Abbott, 61 Mo. 176. According to some opinionsthe remedy is in equity; but the better opinion is that a direct action at law will lie upon an implied assumpsit. Warren v. Mobile &c. R. Co., 49 Ala. 582. In one case it was held that the new company could not be substituted in place of the old, after a referee had reported in favor of judgment against the old, merely for the purpose of having the judgment entered against it in form, the court reasoning that in some way it was entitled to make a separate defense. Prouty v. Lake Shore &c. R. Co., 52 N. Y. 363, 368; "Consolidation of Corporations," by S. D. Thompson, (1890) 31 Cent. L. J. 4. 2 Columbus &c. Ry. Co. v. Skidmore, 69 Ill. 566. 3 S. D. Thompson in 31 Cent. L. J. 4; State v. Maine Central R. Co., 66 Me. 488, 500. 4 Warren v. Mobile &c. R. Co., 49 Ala. 582. and officers. And it has been held that after a railroad company has consolidated with another as authorized by their charters, and confirmed by legislation conferring all rights, powers and privileges belonging to either on the new corporation, liabilities of either of the old companies can be enforced only against the new corporation. A case different from the general rule has decided that, when the articles of consolida tion provide that the constituent companies shall continue in existence for the purpose of adjusting all claims against them, an unliquidated claim against one of the old companies must be adjudicated in an action against the latter before it can be enforced against the new corporation,3 § 345. Proof of consolidation.- A defendant corporation can not be held liable for the debts and liabilities of another corporation, without a consolidation that has been authorized and has actually taken place. The existence of a statute authorizing it does not of course prove the fact, since action under the statute is necessary, and whether this has taken place can not be judicially known by the courts. The plaintiff must, therefore, make proof of the fact of consolidation, unless it is admitted; and it has been held that it may be admitted by the appearance of the consolidated company as a defendant to an action brought against the old company. Solemn admissions made by one of the constituent companies in a judicial proceeding, may be evidence against the consolidated company. In making proof of consolidation it has been held that a plaintiff is aided by the rule of estoppel which operates against corporations in other cases, prohibiting them from denying their corporate existence. The statutes generally 1 Chase v. Vanderbilt, 62 N. Y. 307. 2 Taylor on Corporations, 665; Indianola R. Co. v. Fryer, 56 Tex. 609. Cf. Houston &c. R. Co. v. Shirley, 54 Tex. 125; People v. Empire &c. Ins. Co., 92 N. Y. 105. 3 Whipple v. Union Pacific R. Co., 28 Kan. 474 (an action for personal injuries). Louis Ct. App. No. 4440, not yet reported, but cited by S. D. Thompson, judge of that court, in 31 Cent. L. J. 4 Philadelphia &c. R. Co. v. Howard, 13 How. 307, 333. 7 Columbus &c. R. Co. v. Skidmore, 69 Ill. 566. This is very doubtful, however, unless the corpo ration has done something which 4 Southgate v. Atlantic &c. R. Co.. creates an estoppe!, the doing of (1875) 61 Mo. 90. which is proved. S. D. Thompson 5 Kinion v. St. Louis &c. R. Co., St. in 31 Cent. L. J. 4. provide that copies of the articles of consolidation, filed with the Secretary of State, shall be proof of the fact in all courts; and this it is supposed would be the rule without an express statute. In pleading consolidation, it is sufficient to state that the constituent companies, naming them, were authorized by law to consolidate, and that, having done so, they have become one corporation under a certain name. For in averring the fact of consolidation, the steps which have led up to it need not be stated.' § 346. Pending suits. It has been said that a pending suit may proceed to judgment against the old corporation, just as a suit against a feme sole may proceed to judgment against her after marriage. For the legislature has no power to authorize it, nor can the corporation act under legislative sanction, so as to defeat or prejudice the rights of plaintiffs in pending suits against it. As to such actions the corporation exists for the purpose of judgment; for as to them it has not lost its individuality or identity. For no act of a defendant can defeat the right of a plaintiff." Actions pending against the old company, therefore, do not abate. Even in case of a dissolution of its corporate existence, the existence of the defendant company continues for the purpose of the suit. For consolidation does not extinguish the liabil ity of old companies upon suits which were commenced prior to their amalgamation, even though the consolidation may be 1 Columbus &c. R. Co. v. Skid- Swartwout v. Michigan Air Line R. more, 69 Ill. 566. Co., 24 Mich. 389, 394; Shackelford 2 Collins v. Chicago &c. R. Co., v. Mississippi Central R. Co., 52 14 Wis. 492. Miss. 159; East Tennessee &c. R. Co. v. Evans, 6 Heisk. 607. Cf. Prouty v. Lake Shore &c. Ry. Co., 52 N. Y. 363. 3 Collins v. Chicago &c. R. Co., 14 Wis. 492. Cf. Hobart v. Chapelle, 14 Ind. 601; Commonwealth v. Atlantic &c. R. Co., 53 Pa. St. 9, 19. 4 Shackelford v. Mississippi &c. R. Co., 52 Miss. 15); Roosevelt v. Dale, 2 Cow. 581. 7 East Tennessee &c. R. Co. v. Evans, 6 Heisk. 607; Shackelford v. Mississippi Central R. Co., 52 Miss. 159; Baltimore &c. R. Co. v. Mus Shackelford v. Mississippi &c. R. selman, 2 Grant Cas. (Pa.) 348; BrufCo., 52 Miss. 159. fet v. Great Western R. Co., 25 Ill. 353, 357. 6 Baltimore &c. R. Co. v. Musselman, 2 Grant Cas. 348; Hanna v. Cincinnati &c. R. Co., 20 Ind. 30; 8 Baltimore &c. R. Co. v. Musselman, 2 Grant, 348; Prouty v. Lake accompanied by a change of name of the company engaged in the litigation.' It is not necessary that the plaintiff should take any notice thereof. He is entitled to judgment against the corporation by its former name.2 $347. Judgment against the new company. But although actions against the old companies may be prosecuted to judgment against the new company without new process,' still to obtain a judgment against the consolidated company itself, it must be substituted as defendant. Judgment against the consolidated company on claims against one of the original corporations, may be enforced by levy of execution upon the property of the latter, notwithstanding its dissolution. And the fact that the particular separate division on which a mortgage rests is sold at the same time and together with other consolidated divisions of the road, is in no manner a violation of the contract of the mortgagee. For where there is a con course of creditors of the original companies, they are not to be required to levy execution, each against those portions only of the property originally belonging to the companies respectively indebted to them; but that they may sell the whole consolidated property and apportion the proceeds among themselves, because, if cut up into parcels and sold by divisions, it would lose its great value as a continuous line of road. If there has been an attempted, though void consolidation, which has been judicially dissolved, but while it remained de facto a judgment has been recovered against the consolidated com Shore &c. R. Co., 52 N. Y. 363; Shackelford v. Mississippi &c. R. Co., 52 Miss. 159. 1 East Tennessee &c. R. Co. v. Evans, 6 Heisk. 607. 2 Shackelford v. Mississippi &c. R. Co., 52 Miss. 159. 3 Indianapolis &c. R. Co. v. Jones, 29 Ind. 465; Kinion v. Kansas City &c. R. Co., St. Louis Ct. of App. No. 4440, not yet reported, but cited by S. D. Thompson, judge of that court, in 31 Cent. L. J. 4. But the Su preme Court of Georgia has held that new process is necessary to bring in the consolidated company. Selma &c. R. Co. v. Harbin, 40 Ga. 706. 4 Prouty v. Lake Shore &c. Ry. Co., 52 N. Y. 363; Selma &c. R. Co. v. Harbin, 40 Ga. 706. Cf. Ketcham v. Madison &c. R. Co., 20 Ind. 260. 5 Ketcham v. Madison &c. R. Co., 20 Ind. 260. 6 Gilbert v. Washington City &c. R. Co., 33 Gratt. 586, 611. |