The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-04-12

farm ana II CneIe 70 . 49, - .saS,r,nd Ia
the same property 1t cannot ae agyanes :.t q 3
w. a., ,nnrtSave. or have any thing but
sacnndary lien on the property TBssis tn
casa submitted 10 u.s. and we incline Io sn,bn
n will stand even Ia Virginta.-fetS Z o'h
Journal of Commerce. :, !.
DISPUTES oftener than otherwise Tesuis
from misapprehensions as to what the dis-
putan,s mean. Wegdo not wish to engage
in a controversy Of this sort. AL thas VIZ
mean to say Is that as man cannot gee siu
Of bis debts by going into a firm, so cor. .
noration cannot set rid Of Its debts oy oe.ne
consolidated with other corporations. IL ~.
Jo,,,sd, of Commerce means that ia',oas s
corporation in the case supposed couio no'u
the bonds until due, we agree, with IL. nu1
If it means to say that 1t could thus inairee.'y
eyade and avoid the payment OF us Deus,
we say again that we arc not ready 10 AUNT NJ
that such is the law in Virginia. i
The Journal Of Commerce says that in the
case we supposed "A, B & G could under
a fist mortgage hold the farm so mortgaged
Gin their own hands," Not go, we reply.
Suppose it were A's farm that had the two
mortgages upon it. and that he afterwards
became member Of the firm Of A, B G,
which firm should take an assignment of the
first mortgage. Let the first mortgage De
for 900, 1000 and the second for 900, the
property being worth $4,000 at auc-
ton and saleable for this sum. Now,
the new firm might decline to foreciose
its mortgage and thus compel the farm to
be sold subject to the first mortgage; but on
the debt which the second mortgage was
intended to secure nothing would be real
ICED, because the property would sell for
only $50, 900, the amount secured by the first
mortgage. But what then? Why a would
have an interest of $40, 1000 in the property
thus sold, and the person whose debt was
intended to be secured by the second mort.
gage would Immediately proceed to subject
AS interest in the new firm to sale to pay
the debt of $4,000, and would thus prevent
A from taking money due on the second
mortgage and buying into firm in order to
save this money from the operation of that
mortgage. If the debt were thus satisfied,
the firm might continue business. But If A
proved to be bankrupt, the firm would be
dissolved by the fact of the bankruptcy OF
one of the partners. They certainly could
not hold thelands as firm and not pay AS
debt. Are we not right thus farP
Now, as to the difference between these
three persons and three corporations con-
so!dated into one. A railroad corporation
consolidated with two others is no longer q
corporation of itself. 1t is dead. 1t has
ceased to exist. 1t cannot be reached by
process, nor resurrected. It is as il it had
never been. 1t has no franchise, no property
of any sort. 1t is Gf the dead may be pau
pers) pauper. 1t is nothing. 1t is less
than nothing. So it can never be circum-
stanced as A would be in the case supposed.
1t could not be sued after its death-that Is,
after consolidation-and made to surrender
its interest in the, new frm-that is to say,
in the consolidated company. We take II,
then, that the cases are not exactly similar !;
and that the new railroad corpo ration would
find itself mistaken if it calculated that the
courts would allow the debtor railroad-com-
pany to do what A, being living person,
and accessible by process and compellable TO
surrender his property to his creditors,
might safely be allowed to do, but which the
company, having given up its life, could
not be safely allowed to do since the ere.
ditor would thereby be detrauded.
If the Journal Of Commerce thinks that
the dead railroad company could be sued
and be made to surrender its one-third Of
the property acquired under the assignment
of the first mortgage, we shall not object.
Because we are merely combating the idea
that corporation can get rid of its second
mortgage debt by being consolidated with
other corporations and in its new character
purchasing lien upon its own property.
The Journal Of Commerce, as we under
stand it, would give the second creditor not
"the same security" he had originally, but
would deprive him of all security. 1t would
allow the debtor corporation to merge its
existence into that of another corporation,
and thus to eyade altogether the payment OF
the debt secured by the second mortgage.
We still think that our courts would find
some way to prevent this sort of fraud.
.,-Fs