by subsequent act, provided that the respective roads might consolidate with each other. Accordingly, the two roads were consolidated by the act of each in writing, and one president and one board of directors were chosen. Held, that the two corporations became one, and that the concurrent legislative action to that end by the two states was proper and valid. Wilmer v. Atlantic & Richmond Air Line R'y Co., 2 Woods, 411.

$1798. Persons purchasing a railroad left part of the price unpaid, and subsequently procured themselves to be incorporated as a railway company. Held, that they held the road subject to the vendor's lien, and that their subsequent consolidation with another company did not affect the validity of the lien. North Carolina R'y Co. v. Drew, 3 Woods, 698.

§ 1799. The consolidation of two railway companies extinguishes, unless otherwise provided, the two constituent companies and makes both one new company. (Citing Clearwater v. Meredith, 1 Wall., 25; Tomlinson v. Branch, 15 Wall., 460.) Ridgway Township v. Griswold.,* 1 McC., 151.

§ 1800. The act of the legislature of Indiana authorizing railway merger and consolidation is an enabling act, permissive and not mandatory. Clearwater v. Meredith, 1 Wall., 40.

§ 1801. The effect of railway consolidation in Indiana is a dissolution of the companies amalgamated, and at the same instant the creation of a new corporation with property, liabilities and stockholders derived from those passing out of existence. Ibid.

§ 1802. For the purpose of promoting the consolidation of certain Illinois railway corporations with similar corporations in Wisconsin, the legislature of the latter state passed an enabling act, and provided, in so doing, that if such consolidation was perfected the consolidated company should be subject to the laws of the state of Wisconsin and the state of Illinois, respectively, and should have the same privileges as though the consolidation had not taken place, provided that the laws of Illinois should have no force in Wisconsin. The same act further provided that the consolidated company should have all the rights, privileges and franchises conferred on the said companies by the laws of the states of Illinois and Wisconsin, respectively, the same, and not otherwise, as though the consolidation had not taken place. The consolidation having taken place upon these terms, it was held that Wisconsin was permitted to legislate for the consolidated company in that state precisely the same as it would for its own original companies, if no consolidation had taken place. Peik v. Chicago, etc., R'y Co., 4 Otto, 164.

§ 1803. It seems that under the act of Missouri of March 24, 1970, enacting that "any two or more railroad companies in this state, existing under general or special laws, and owning railroads constructed wholly or in part, which, when completed and connected, will form, in the whole or in the main, one continuous line of railroad, are hereby authorized to consolidate," does not require that each of the companies should own a road constructed wholly or in part. Washburn v. Cass County, 3 Dill., 251.

§ 1804.

rights of new company.- Where two or more railway companies amalgamate or consolidate their respective roads under authority of law, the new or consolidated company succeeds to and possesses all the franchises, rights, privileges and immunities of the several companies of which it was formed. (Citing Zimmer v. State, 30 Ark., 677; Robertson v. City of Rockford, 21 Ill., 451; Nugent v. Supervisors, 19 Wall., 241.) Lewis v. City of Clarendon, 5 Dill., 334; Branch v. Atlantic & G. R. Co., 3 Woods, 481 ($ 901-907).

§ 1805. Two railroad companies were consolidated under an act which declared that the new corporation should have, hold and enjoy all the powers, rights, privileges, franchises, claims, demands and estates which at the time of such union were held and enjoyed by either of the original companies. It was held that the new corporation might lawfully use a patented axle box which both the old companies had a license to use. Lightner v. Boston & Albany R. Co., 1 Low., 238.

§ 1806. Upon consolidation of two railway companies it is presumed that the railways united will be held with the same rights, privileges and burdens originally attaching thereto. Tomlinson v. Branch, 15 Wall., 460.

§ 1807. When several companies are consolidated, whatever privileges and advantages either of the former companies possessed shall in like manner be held and possessed by the new company to the extent of the road which the former companies had respectively occupied before the consolidation; that it shall stand in their place and possess the power, rights and privileges they had severally enjoyed in the portions of road which had previously belonged to them. (Affirming Phila., W. & B. R. Co. v. Maryland, 10 How., 376.) Ibid.

§ 1898. — as to rates of charges. Under a general act, authorizing the consolidation of railroad companies, which declares that “such new corporation shall possess all the powers, rights and franchises conferred on such two or more corporations by the several acts incorporating the same, or relating thereto, respectively, and shall be subject to all the duties imposed by such acts, so far as the same may be consistent with the provisions of this act." and under an act authorizing the consolidation of railroad companies of the state with those of

other states, which enacts that such consolidated companies, respectively, "shall be deemed and taken to be one corporation, possessing within the state all the rights, privileges and franchises, and subject to all the restrictions, liabilities and duties of such corporations of this state so consolidated;" and under a constitutional provision that no special privileges shall ever be granted that may not be revoked or repealed, and no special act shall be passed conferring corporate powers, and that corporations may be formed under general laws, which laws may be altered or repealed,— it is held that several corporations consolidated in pursuance thereof are completely dissolved and created into a new corporation, and one of the original companies, organized before the adoption of the above constitutional provisions, cannot claim to be exempt from legislative interference in its rates of charges, because its original charter imposed no limitation on its rates. Shields v. Ohio, 5 Otto, 319.

§ 1809. effect as to taxation. Where two companies possessing certain exemptions as to taxation were consolidated, held, that their exemption from taxation became subject to new legislation, which was not unconstitutional as impairing the charter of the company. Railroad Co. v. Georgia, 8 Otto, 359.

§ 1810. Two railway companies, exempt by their charters from certain taxation, were consolidated. Held, that the consolidation dissolved them and created a new company holding a new charter subject to the law of the state authorizing the legislature to change, modify or destroy it at will. Ibid.

§ 1811. Where an act authorizing the consolidation or union of several railway companies declares that the consolidated or united companies shall possess all the rights and privileges which each of the companies enjoyed under its charter before the consolidation, the consolidated company acquires no greater immunity from taxation than was enjoyed by each of the companies respectively before the consolidation. Property exempt still remains exempt, and property taxable remains taxable still. Chesapeake, etc., R. Co. v. Virginia, 4 Otto, 718. § 1812. Under the law of New York permitting the consolidation of the New York Central and Hudson River Railroads the consolidated companies were liable for an income tax due from one of the companies at the time of the consolidation. Bailey v. Railroad Co., 22 Wall., 629.

§ 1813. When a corporation, by a consolidation with others, disables itself from performing duties upon which depend an immunity from taxation, it is presumed to have waived such immunity. Railroad Co. v. Maine, 6 Otto, 499 (§§ 1334–37).

§ 1814. The act of a legislature enacted that railroad company A. and railroad company B. should be thereby authorized and empowered to unite and consolidate the stock of the two companies, and all the rights, privileges, immunities, property and franchises belonging or attaching to said companies under the name and charter of company B. in such manner that each and every owner and holder of shares of the capital stock of company A. should be entitled to and receive an equal number of shares of the capital stock of the consolidated companies. But provided that nothing therein contained should relieve or discharge either of said companies from any contract theretofore entered into, but that all such contracts should be assumed by and binding on company B., and all benefits and rights under the same should accrue to and vest in the last mentioned company; and provided further, that the capital stock of company B. should not exceed its authorized stock and the authorized stock of A. added. It provided, also, that the stockholders of A., upon surrender of their certificates, should receive certificates in B., entitling them to the same rights and privileges and benefits as attached to the then holders of stock in said companies or either of them. There being no express surrender of charters or new grants of corporate powers, it was held that this act did not work a surrender of the charter of company B.; and that the property of B. having been exempt from taxation above a certain per cent., so much of the joint property was, after the consolidation, still exempt and subject to no higher tax by the state; and the property of A. not having been exempt by contract with the state from any taxation, the state might tax that part of the joint property at higher rates than theretofore. Central Railroad, etc., Co. v. Georgia, 2 Otto, 665; Southwestern R. Co. v. Georgia, 2 Otto, 676, n.

§ 1815. Where two railroad companies had become practically amalgamated by an exchange of their stock by the stockholders of company A. for a corresponding amount in company B., and an act of the legislature afterwards legalized this transaction by declaring that whenever the written consent of all the stockholders of A. should have been obtained, said A. should be merged in B., and thereupon and thereafter all the rights, privileges and property belonging to A. should be vested in B., and B. should be liable for all the debts and contracts of A., and that the stock and property of B. should be subject to the same liens and charges to which the stock and property of A. might be liable, and in the same relative order in which the liens and charges then stood, the court held that the property of A., having been taxable, and the property of B. exempt from taxation by contract with the state, B.'s exemption could not be extended to include the property received from A., and the property

formerly belonging to A. was still taxable in the hands of B. Tomlinson v. Branch, 15 Wall., 460; Branch v. City of Charleston, 2 Otto, 677.

§ 1816. Union Pacific Railroad.- Under an act of congress, giving to the proper circuit court of the United States jurisdiction to compel by mandamus the Union Pacific Railroad Company to operate its road as required by law, and under a further act providing that if any agent or officer, authorized to construct the aforesaid road, who shall refuse to operate and use the road or telegraph lines under his contre as one continuous line, and without discrimination of any kind, shall be deemed guilty of a misdemeanor, it is held that, assuming that some portion of the road is within the district of Iowa, and that it is not being operated according to law, process served in that district upon the chief officer of the company, or upon any officer who may be indicted, if he fails to do his duty in this respect, will give the court jurisdiction. United States v. Union Pac. R. Co., 3 Dill., 524. See §§ 1531-35, 1547. § 1817. And it is held that private persons can institute proceedings to compel the company to perform its public duty without the sanction of the attorney-general. Hall v. Union Pacific R. Co., 3 Dill., 515.

§ 1818. The act of congress incorporating the Union Pacific Railroad Company is entitled "An act to aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and to secure the government the use of the same for postal, military and other purposes." 3." This act fixed the amount of the capital stock and shares, and declared that the "stockholders should constitute said body politic and corporate." The government has no stock in the road, though it has five directors, not stockholders, against fifteen company directors. The act grants the company the right of way through the public lands; and, "for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy transportation of the mails, troops, munitions of war and the public stores thereon," makes it an extensive grant of lands. And for the same purposes the United States agreed to, and did, issue its bonds to the company to the amount of $16,000 per mile, which bonds were made to constitute a first mortgage on all the property of the company. This was changed by a subsequent act, and the company authorized to issue first mortgage bonds, and the lien of the bonds of the United States was made subordinate to the bonds of the company, with the exception relating to the transportation of dispatches, troops, mails, etc., for the government. These grants to the company were declared to be made upon condition: (1) That the company shall pay the bonds of the United States at maturity; (2) shall keep their line and road in repair and use; (3) transport mails, troops, etc., giving the government the preference. Another section provided that if the road, when finished, should be permitted to remain out of repair for any unreasonable time, congress should put the same in repair and use, and reimburse the government for the expenditures thus caused, from the income of the road. Another section of the incorporating act provided that congress might regulate the fares and add to, alter, amend or repeal the act, in order to better accomplish the object of the act, to wit: to promote the public interest and welfare by the construction of said railroad and telegraph line; and to secure to the government the use and benefits of the same for postal, military and other purposes. It is held that this corporation is not an instrument of the federal government in such a sense as exempts it, by implication, from the taxing power of the states through which its road may be located. Union Pac. R. Co. v. Lincoln Co., 1 Dill., 314.

§ 1819. It having been developed that the directors and officers of the Union Pacific Railway Company and others had made contracts on behalf of the railroad which were fraudulent, in that such directors, officers and other persons received for themselves stocks, bonds and other property which should have been paid to the company, congress passed an act authorizing the attorney-general of the United States to bring suit against such directors, officers and other persons. Held, that congress might, by such act, make all of such directors, officers and persons parties defendants to such suit, although ordinarily this would be a misjoinder of parties; that the actions against such persons, although several and distinct in their nature, might by such act be authorized to be joined in one suit. That such act might direct decrees to be entered and enforced against any one or more of the parties defendant, without waiting for the final termination of the cause against the other parties; that congress might authorize that judicial process in such suit should run and be served outside of the district in which such suit was brought; and it might further authorize representatives of deceased directors, officers and other persons defendant, to be sued out of the district or state wherein they were appointed such representatives; and that none of these departures from the usual rules of judicial procedure were beyond the power of congress or rendered the proceeding authorized unlawful. United States v. Union Pac. R. Co.,* 11 Blatch.. 385.

§ 18-0. it having been developed that directors, officers and other persons of the Union Pacific Railroad Company had defrauded it of various properties, congress passed an act directing a suit to be instituted in the name of the United States against such officers, direct

ors and other persons. Held, that if it were true that these officers, directors, etc., had defrauded their corporation, or its stockholders, as alleged, the money or property out of which they had defrauded such corporation belonged to it, and was payable to it; that an action against such persons could only be brought by such corporation, or, in case of its refusal so to do, by a stockholder therein; that it was not within the power of the United States government to institute a suit on its own behalf, or on behalf of the stockholders or of the corporation itself, against such fraudulent directors, officers and other persons, notwithstanding the United States was a creditor of the corporation, its debt not being matured nor its payment at maturity imperiled. Ibid.

§ 1821. For the purpose of fixing rates of fare upon the Union Pacific Railroad, congress may direct an examination into the cost of building and running a railroad, and in an action, with proper allegations, may cite the corporation to a discovery upon that subject and for that purpose. Ibid.

§ 1822. The United States can file a bill for the purpose of securing the application of five per cent. of the net earnings of the Union Pacific Railroad Company in payment of the interest or principal of subsidy bonds issued to that company by the United States. Ibid. § 1823. The gifts of lands and bonds by the United States to the Union Pacific Railroad Company not gifts in trust, but absolute and without condition, and not to warrant the United States in instituting a suit in its own name and upon its own behalf against fraudulent directors and officers of that company, to recover from them the proceeds of their fraud. Ibid.

§ 1824. Redress for alleged fraudulent acts on the part of directors or managers of a railroad corporation can only be obtained by a suit brought by the corporation or its stockholders. Ibid.

§ 1825. The United States may institute a suit to have the charter of the Union Pacific Railroad Company declared forfeited, and a receiver of its assets appointed. Ibid.

1826. The Union Pacific Railroad Company has power to charge tolls for passage over its bridge between Omaha and Council Bluffs. United States v. Union Pacific R. Co.,* 4 Dill.,

479.

§ 1827. Authority to build its railroad to the western boundary of Iowa empowered the Union Pacific Railroad Company to build a bridge between Omaha and Council Bluffs. Ibid. § 1825. The Union Pacific Railroad Company was authorized and required to construct its road to the western boundary of Iowa, by which was meant, not the imaginary boundary of the state of Iowa, in the middle of the Missouri river, but the actual western boundary of Iowa formed by the bank of the Missouri river. Hence, the railroad company's bridge between Omaha and Council Bluffs, with its tracks thereon, formed part of its road, and the company was held compellable by mandamus to run its trains over such bridge into Council Bluffs, without obliging passengers to take "transfer cars at an extra price between that city and Omaha. Ibid.

§ 1829. Net earnings are the gross receipts of a railway less the expenses of operating the road to earn such receipts. St. John v. Erie R'y Co.,* 10 Blatch., 271. See §§ 1536-40, 1542–44. § 1830. Various roads.- Where the original charter of the Kansas Pacific Railroad Company of July 1, 1862, gives the United States government the right to recover five per cent. of its net income on the completion of the road, an action lies on behalf of the government to recover such proportion of the net earnings from such company. United States v. Kansas Pac. R'y Co.,* 4 Dill., 367.

§ 1831. Under the charter of the city of Baltimore and that of the Baltimore & Ohio Railway Company, the city of Baltimore possesses no power to appoint additional directors to represent an increase of stock derived by it from advance on stock it already held in such railroad company. City of Wheeling v. Mayor of Baltimore,* 1 Hughes, 90.

§ 1832. The St. Paul & Pacific Railroad Company is not the same corporation as the Minnesota & Pacific Railroad Company, and consequently is not liable to an action at law on coupons issued by the latter corporation. In such a suit, equities of creditors of the former corporation in respect of property received by it from the state cannot be considered. Hopkins v. St. Paul & Pac. R. Co.,* 2 Dill., 396.

§ 1833. The fact that grants of land were made by congress to the state of Wisconsin cannot change the rights of the Chicago & Northwestern Railway Company or of its creditors. If that state has not performed the trust it must answer to the United States. Piek v. Chicago & N. W. R'y Co.,* 6 Biss., 177.

§ 1834. Where net earnings are absorbed by interest accruing on first mortgage bonds of the Sioux City & Pacific Railroad Company, held, that the government could not claim five per cent. of such earnings which would otherwise be applicable to its subsidy. United States v. Sioux City & Pac. R. Co.,* 9 Otto, 491.

§ 1835. In so far as the completion of its road affects the application of five per cent. of

its net earnings to payment of the principal and interest of certain subsidy bonds, held, that the same rulings apply to the Central Pacific Railroad as were made in a similar case against the Union Pacific Railroad. United States v. Central Pac. R. Co.,* 9 Otto, 449.

§ 1836. The Central Pacific Railroad Company did not become liable to pay five per cent. of its net earnings annually upon certain subsidy bonds issued by the government and interest thereon until October 1, 1874, the date of the completion of the railroad and its acceptance by the president of the United States. United States v. Central Pac. R. Co.,* 4 Saw., 341.

§ 1837. Under the act of April 18, 1853, the Pittsburg & Connellsville Railroad Company have a right to make their road to the Maryland line and to connect there with any road authorized by the state of Maryland. Baltimore v. Connellsville, etc., R'y Co.,* 6 Phil., 191. § 1838. The M..nesota Central Railroad Company was a lawful corporation, whose rights of way passed to the Milwaukee & St. Paul Railroad Company as its successor. Secombe v. Milwaukee & St. Paul R'y Co., 2 Dill., 471.

.

§ 1839. The Southern Pacific Railroad Company, a corporation of California, was authorized by its charter to build a road from San Diego to San Francisco, through certain counties named. Subsequently, congress authorized this company "to connect with the Atlantic & Pacific Railroad .. at such point near the boundary line of the state of California as they shall deem most suitable for a railroad to San Francisco." Held, that this left to the Southern Pacific Company the designation of the point of connection and the line also, which latter need not be the line, nor run through the counties, named in the charter granted to the Southern Pacific Company and lying between San Diego and San Francisco; that the Southern Pacific Company had a right to locate its land grant along the line it should so designate. Southern Pacific R. Co. v. Orton, 6 Saw., 177.

§ 1840. Fact case - Florida improvement fund.—The state of Florida created an internal improvement fund of about twenty million acres of land. This fund was vested in trustees. These trustees were authorized to pledge the fund for the payment of interest on the bonds of certain railroads in Florida. The act authorizing such a pledge of bonds provided that the railroad companies should pay the interest on such bonds and one per cent. per annum as a sinking fund; in case of failure of the railroad companies to pay such interest or sinking fund, the trustees were authorized to take possession of the railroad and sell it and apply the proceeds to the purchase and canceling of the outstanding bonds issued by the defaulting railroad company, or to incorporate such proceeds with the sinking fund. Purchasers at such sale were required to continue to contribute to the sinking fund until all the outstanding bonds should be discharged, under penalty of the annulment of the contract of purchase and forfeiture of the purchase money paid in. Default being made in the payment of interest and sinking fund, the trustees sold the railroad for an amount equal to the principal of the outstanding guarantied bonds. The purchasers were allowed the privilege of paying the purchase money by delivering the bonds at their par value, and nearly $1,000,000 of them were thus surrendered and canceled, but a balance of about $472,000 remained unpaid, having been formally settled by giving the trustees a check for that amount, which was never paid. Held, that by this sale of the trustees the lien of the bondholders was destroyed; that the lien of the bonds represented by the $472,000 became merged in a vendor's lien, of which the purchasers at such trustees' sale and the companies claiming under them had notice. State of Florida v. Anderson,* 1 Otto, 667.

§ 1841. The state of Florida loaned its credit to the extent of $4,000,000 of bonds to the railway company, holding the railroad under the trustees' sale. This loan of credit was secured by the bonds of the railway company, which bonds were secured by a statutory lien upon the railway; the balance of the purchase money accruing on the trustees' sale still remaining unpaid, and the railway company having also failed to pay the interest on their bonds delivered in exchange for the state credit as aforesaid, suit was instituted by the state of Florida and the trustees of the internal improvement fund against the company in the circuit court of Duval county, Florida, to recover by a sale of the railroad the said balance of purchase money which was claimed to be a lien thereon. Anderson and other holders of the bonds represented by the $472,000 balance were not made parties to this suit because their interest was not then deemed adverse to that of the state. One Holland was also not made a party, because at that time he claimed no interest in the property. The Duval county court appointed a receiver to take possession of the railroad and secure its receipts and earnings, whereupon Anderson and his associates filed a bill against the railroad company to enforce the lien of their bonds upon the road, and the railroad company consented to a decree declaring the bonds a first lien on the railroad and directing it to be sold to pay the same. Holland commenced a suit against the railroad company for services, recovered a judgment for over $60,000, issued execution thereon, under which the marshal advertised and sold the railroad to Holland for $20,000. Other litigation was had, the result of which was that the receiver appointed at the instance of the state, by the circuit court of Duval county, was dispossessed