Court Opinion

ID: 7002021
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:43:47.995029+00
Date Added: 2024-06-11T16:09:57.123575
License: Public Domain

Me. Justice Bigelow delivered the opinion of the court. On looking for the statute on which this action is assumed to be based, we are informed by counsel for appellee that it is found in section 7 of the act providing for the consolidation of corporations. (See Hurd’s Revised Statutes of 1897, p. 432.) The section reads as follows: “ Such change of name, place of business, enlargement or change of object for which such corporation was formed, increase or decrease of capital stock, or increase or decrease of number of directors, managers or trustees, or consolidation of one corporation with another, shall not affect suits pending in which such corporation or corporations shall be parties, nor shall such changes affect causes of action, nor the rights of persons in any particular; nor shall suits brought against such corporation by its former name, be abated for that cause.” This section has, in our opinion, no relation to the stock of a corporation, but relates only to the rights and liabilities of the consolidating companies — that is, to the credits due them, and the liabilities incurred by them. Counsel says: “We concede that a provision in a charter authorizing consolidation is a part of the contract between the stockholders, and enables two-thirds to effect a consolidation without the consent of the other third, but that is a different thing from the confiscation of the shares by means of this power.” It is not perceived what is meant by the latter part of the sentence. If two-thirds of the stockholders of each of the two constituent companies could legally consolidate the stock and franchises of the companies in one company, as counsel admits they could do, it is not easy to see that any legal wrong could thereby have been committed upon any stockholder in either company. But as to the innuendo that appellee’s stock has been confiscated by the consolidation of the company which issued it, with the Alton Railway, Gas & Electric Company, it is sufficient to say, that the declaration is entirely silent as to any wrong done appellee by the consolidation. There is no averment in the declaration that the value of appellee’s stock in the Alton Railway and Illuminating Company was any less after than it was before the consolidation. Nor is there any averment that the stock proposed to be issued by the consolidated' company to appellee in lieu of his stock in the constituent company was or would be worth any less than the stock of the constituent company which issued it. If appellee, at and before the consolidation, could have maintained a suit against the Alton Railway and Illuminating Company for the value of his stock, then this suit was properly brought, and the declaration should be held good and sufficient in law, otherwise it must be held insufficient. Not even the counsel who brought the suit attempt to claim that a suit could have been maintained against the constituent company, and he would be a bold man indeed who would even attempt to argue in favor of such a claim. The claim of counsel for appellee that by the consolidation the stock of the consolidated company was watered, is shown by his own declaration to be without any foundation. If the law under which the constituent companies were chartered had not provided that the companies might consolidate in the manner in which they have become consolidated, another and different question would have presented itself for consideration; but as the matter is now presented, none of the authorities cited by counsel for appellee have any controlling force in the case. To hold that this action can be maintained, would be to practically nullify the law providing for the consolidation of corporations. The court erred in overruling appellant’s demurrer to appellee’s declaration, and in rendering judgment against appellant, and for these errors the judgment is reversed, with instructions to the Circuit Court to sustain the demurrer.