said application of the New Era Printing Company, a corporation, be, and the same is granted, and that its name be, and the same is hereby changed to Belvidere Printing Company. Dated

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day of

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190.....

Judge of said Court.

CHAPTER XXI.

Consolidation of Corporations.

172. Of the Principles Involved in and Results Attained by Consolidation.

173. Of the Proceedings to Consolidate.

174. Rights of Creditors upon Consolidation Further Con

sidered.

$172. Of the Principles Involved in, and Results Attained By, Consolidation.

The new corporation formed by a consolidation of two or more subsisting corporations may claim existence and may exist for the full period allowed to corporations generally by the statutes of the State where the consolidation is effected. Its term of existence is not curtailed by the fact that any constituent corporation was created for a shorter period, or that part of its original term of existence had expired. 1

The authorities to the effect that upon a consolidation the resulting entity is a entity is a new corporation are numerous, emanating from the courts of many States.

In a certain sense, the consolidation of two or more corporations works a dissolution of both. It transfers their existence into that of the new corporation and suspends all their rights and powers as distinct entities.

But the fiction of continuing corporate existence preserves the rights of creditors who have commenced

actions at law, at least to the extent that such actions do not abate, though it may be necessary, in order to bind the property of the corporation forme! by the consolidation to substitute it as a party defendant. 2

Nor can a consolidation be given the effect to deprive creditors of their recourse against the original corporation debtor. The new corporation receives its property charged with a trust which courts will enforce upon equitable principles. 3

In a majority of the States are found statutes authorizing the consolidation of two or more railroad corporations, and, in a few, the power to consolidate is conferred upon certain other classes of corporations. The method, as well as the rights and powers of the new corporation thus created are defined by the same statutes in more or less detail. The procedure thus prescribed must be strictly pursued, as well to the end that the new corporate organization be free from defects as that creditors and stockholders of the original corporations may be bound by it.

Without exception, the consent of a proportion of the stockholders of each consolidating corporation must be previously obtained, usually two-thirds, but in some States, three-fourths; in others the consent of a bare majority suffices.

The directors may, preliminarily to calling upon the stockholders to act, carry on the negotiations, formulate all the plans and agree upon all the terms of the consolidation. It would usually be impracticable for the stockholders to do this. Their rights. are fully protected if the scheme of consolidation be

laid before them at a meeting, or in writing, in all its details, and they be thus given an oppuortunity to understand just what is proposed.

Under statutory authority for two or more railroad companies, two or more turnpike companies, two or more mining companies, etc., to consolidate, there can be no consolidation of those belonging to different classes.

But the procedure is almost or quite the same, no mater what class includes the consolidating companies; and the procedure and forms for the consolidation of railroad companies which follows are easily adaptable, whatever the class which it is desired to consolidate.

$173. Of the Proceedings to Consolidate.

We will suppose that the Directors of the Market Street Railway Company have negotiated with the Directors of the Chestnut Street Railway Company and the High Street Railway Company, all incorporated under general laws of the same State, and the three Boards have come to an oral agreement to consolidate the three corporations, and upon all the terms of the consolidation, and there is an understanding between the Boards with the requisite proportion of stockholders of each corporation. The next step is to place the whole matter in proper and legal form and to consummate the new corporate creation to result from the consolidation.

With the above explanation, the following forms will be understood:

Form 145.

RESOLUTION OF CONSOLIDATION TO BE PASSED BY EACH BOARD OF DIRECTORS.

Whereas, the Market Street Railway Company, the Chestnut Railway Company, and the High Street Railway Company desire, and have proposed, to consolidate and amalgamate their respective capital stocks, debts, properties, assets and franchises of each other, and of this company.

And Whereas, it is the sense of this Board that such consolidation and amalgamation will be mutually advantageous.

And Whereas, the respective Boards of Directors of said corporations have proposed such consolidation and amalgamation of their capital stocks, debts, properties, assets and franchises, with each other and with this company, upon the terms following, to wit:

First. That the said consolidation and amalgamation shall be made at once and that the name and style of said consolidation and amalgamated corporation shall be the "Market Street Railway Company;" that it shall continue in existence for a period of fifty years from the date of the articles of consolidation, amalgamation and incorporation.

Second. That the several capital stocks, debts, properties, assets and franchises held, owned or possessed by each of said corporations shall be vested in said consolidated and amalgamated corporation, the Market Street Railway Company, as fully as the same are now severally held and enjoyed by them respectively, subject, however, to all the conditions, stipulations, contracts, liens, claims and charges thereon, and to all debts and obligations of said respective corporations and said consolidated and amalgamated corporations shall fully complete, carry out and perform all valid conditions, stipulations and contracts heretofore made by, and shall pay and discharge all liens, claims and charges heretofore created or suffered by, any of said corporations on their respective properties, and shall pay and discharge all