Meyer v. Johnston & Stewart

64 Ala. 603

• Court: Supreme Court of Alabama
• Decided: December 15, 1879
• Status: Published

Opinion

MANNING, J.

When this cause was here before (53 Ala. 813 et seq.), it was unanimously decided, that the Alabama and Tennessee Rivers Railroad Company did not become dissolved and defunct by the consolidation with it of the Georgia and Alabama Railroad Company and the Dalton and Jacksonville Railroad Company, corporations of the State of Georgia, but continued to exist, with privileges enlarged, and resources increased, perhaps, under the new name of the Selma, Rome, and Dalton Railroad Company. This decision was founded upon the record, as it then was. After the cause went back, an amendment of the pleadings was made in the Chancery Court, and additional evidence introduced, for the purpose of renewing the contention upon that point, with a record inteuded to present more fully the facts supposed to relate thereto ; and upon the second hearing there, the chancellor ruled again, that the charters of all three of the original corporations had been surrendered, and were vacated, by their union into one, and a new and independent corporation created in their stead. This subject is, therefore, brought up for consideration again; and the statute requires us to give judgment in a cause, when before us a second time, even though the facts remain unchanged, according to the opinion we may then have of the rights of the parties, without being bound by that pronounced on a previous hearing.

On examining the new evidence, we do not perceive that it materially changes the situation and condition, previously inferred, of the Georgia companies, at the time of their consolidation with the Alabama and Tennessee Rivers Railroad Company of Alabama. True, it is proved that those companies had chosen and surveyed the routes for their respective railroads; that the Georgia and Alabama Railroad Company had acquired some real estate in Rome, worth about $4,000 in August, 1866, when the agreement to consolidate w'as made; and that up to the time when they discontinued work in 1861, each had graded, or done the greater part of the grading of thirteen or fourteen miles along the routes they had respectively selected. Of which work, Mr. Barney, the engineer, testified, that in 1866, “ in most instances, the grades were badly washed, overgrown with trees and bushes, and were otherwise of comparatively little value.” The greater part, however, of the route on which this work was done, was taken for, and applied to the use of the Selma, Rome and Dalton railroad, as were also the piers of a destroyed bridge of one of the companies, over the Etowah river, and some other masonry. All the money and- means derived from the stockholders of the Georgia companies, including the proceeds of bonds issued to the amount of $25,000 by Eloyd county, Georgia, to one of them, were expended ; and the work above-mentioned and the real estate in Rome, with some rights of way to a small extent, for their roads, alone remained to those companies, as the result of, and to represent all the money, and means available as money, which they had received from any and every source. They also owed debts to a considerable amount.

In 1866, they owned no personal property whatever, not even horses, mules, or implements to work with ; not a foot of railroad had been completed; and no money was due to either company, except from stockholders upon the shares of capital subscribed, which had been only partially called in, or paid up, to an extent, perhaps, of about one-fourth of their subscriptions. Whether any more payments upon these shares would then be called for or not, depended upon the will of the stockholders themselves; and after the great changes produced by the war, and when the companies were without employees, or implements of any kind, or money in their treasuries, a majority of the corporators might be very unwilling to resume labors which had been discontinued in 186., and the greater part of which would have to be done over again. Whatever may have been the desire or design of certain individuals among them, no action appears to have been taken on behalf of either of the Georgia companies ; no symptom of corporate life exhibited,' during the latter years of the war, or after it, until, in the early part of 1866, Mr. Lapsley, at one time president, and then a director of the Alabama and Tennessee Rivers Railroad Company, by its appointment, went to Georgia to ascertain what could be done toward obtaining, through the co-operation of the Georgia companies, the right and authority to extend and complete the railroad of his company, through that State, to Dalton, over the routes which had been selected by them. Then, the persons who had been elected directors, at the last preceding conventions of the stockholders of those companies in 1861 or 1862, for the term of one year, without express authority from charters, or any other source, to serve longer, came together, to confer as the boards of directors of their respective companies, with Mr. Lapsley, on the subject of his mission ; and it was, as he testifies, in accordance with his advice to one of these boards, and “ for the purpose,’’ among other things, “ of curing defects in the organization of the company, that may have been caused by non-action of the said company during the war,” that the act of Georgia of February 14th, 1866, relating to the Georgia and Alabama Railroad Company, was procured to be passed. Doubtless, it was also upon the like advice, that, eight days afterwards, February 23d, 1866, the similar act of the same State, relating to the Dalton and Jacksonville Railroad Company, was enacted.

These statutes, referring to the obstruction of business caused by the war, authorized a majority of the persons last elected directors of these companies respectively, to meet together, and act as such, and to assemble the stockholders of each, for the election of new directors, in conventions to be held at times and places to be specified in the notices required to be issued therefor. And the statutes furthermore, besides other provisions, empowered the companies, through their respective board's of directors, to unite and consolidate “ the roads, and stock, and franchises” of each, with those of the other, and with those of any other company in Georgia or any adjacent State, “ to suck extent, and on such terms, as may be agreed on by and with the company or companies entering into agreement with them.” What the stockholders of those companies, when assembled in the conventions thus provided for, resolved to do, or would have done by themselves alone, we are not informed; but the boards of directors they elected, while stipulating in the contract of consolidation, of the 8th of August in the same year, that their constituents should have stock in the consolidated company, to the amount which they had before that time paid to their own, respectively, also took care to provide that they should not be required to pay any thing more upon their unexhausted subscriptions, to the consolidated company; and it is proved that no one of them ever did pay one dollar more.

We have said nothing of the lots and unimproved real estate at Dalton, which Moore, one of the trustees in the deed, valued at from $10,000 to 20,000, and White, the secretary of the Dalton and Jacksonville Company, valued at $200,-000. They were subject to the trusts of the deed of a corporation called the “ Dalton City Company,” executed in August, 1859, to assist in the construction of the railroad of the former of these companies. Which deed provided, that for one-half of the proceeds of said property, that should from time to time be paid by the trustees to the railroad company, it must issue its certificates of stock at par, and for the other half its thirty-year bonds, bearing an annual interest of seven per-cent., and convertible into stock at par, to the Dalton City Company ; and further, that the trustees should not, at any time, without consent of the grantor, sell or dispose of more of said property than would be then required to raise the same proportion or per-centage of the estimated value of the whole thereof, as should be exacted of “ other stockholders,” upon the amounts of their subscriptions. This land company, therefore, was in the category of the subscribers for stock. Of its contributions, as of those of the other stockholders of the railroad company, nothing remained in 1866, except the grading done before and in 1861, and the right of way in some undefined portions of the route. The land company, like the rest, for the sum it had paid into the railróad company, obtained under the contract of August, 1866, its certificates of stock in the consolidated company, and its release from all further payments; of which it never afterwards made any.

Certainly, we can not say, upon evidence like this, that the attitude and condition of these Georgia railroad companies were so much better than they appeared to us to be on the former appeal, as materially to affect the argument concerning the effect and result .of their consolidation with the Alabama company. Nor do we think this argument is either strengthened or weakened, on one side or the other, by the production of the several enactments of this State before 1866, made to create and encourage other corporations to build railroads from Jacksonville, or Gadsden, in Alabama, to Dalton, or other places in Georgia, or between other points or places. By none of these was any such work performed. The evidence only shows a prevailing opinion that such a connection was desirable. Nothing though, or next to nothing, was done to effect it, until the Alabama and Tennessee Rivers Railroad Company obtained the right to extend its railroad on from Jacksonville toward Dalton, with the purpose of completing it through Georgia to that place, if authorized by Georgia to do so, and entered into negotiations with the companies before named, in order to obtain such authority.

In our former opinion, we perhaps intimated, that this change of direction, from a railroad yet to be built, which should connect Gadsden with the Tennessee river at Guntersville, to a railroad already built connecting Dalton with the same Tennessee river at Chattanooga, did not seem to us a radical departure from the original object for which the Alabama and Tennessee Rivers Railroad Company was incorporated. Against this view, complainants’ counsel express strongly their dissent. “ The object,” they say, “ of this great enterprise, which was thus fostered by the State in so many ways, was not to connect the town of Selma with the town of Guntersville : it was vastly greater and farther reaching than this. It was not alone to connect the waters of the Alabama river with the waters of the Tennessee..... The State designed, by this Trunk Line, to form a railroad link in a great water-line of communication, extending from the Gulf of Mexico to the headwaters of the Mississippi river. From its southern terminus at Selma, communication was to be had, through the navigable waters of the Alabama river, to the Gulf of Mexico; and from its northern terminus at Guntersville, unbroken communication was to be secured, through the navigable waters of the Tennessee, the Ohio, and the Mississippi rivers, with the Mississippi valley, and with the cities and markets, and the grain and meat-producing regions of the great North-West.” If that was indeed the achievement then meditated — if the intention was, by this railroad, to bring the commerce of that vast and opulent region through this State, by way of Selma and the Alabama river, to the Gulf of Mexico, whence it could go to all the parts of the world; even this magnificent scheme could be more easily accomplished, by way of Dalton and Chattanooga, and the railroads extending thence to the rivers and cities of the great North-West, than by way of Gadsden and Guntersville. For no available unbroken line of water-communication with the great Mississippi valley beyond was then possible, or supposed to be practicable in the future, to and from Guntersville, over the obstructions below that town, caused by the Muscle Shoals in the Tennessee river. The proceeds of 400,000 acres of valuable land had been expended, before that railroad company was incorporated, toward executing the design of making a navigable canal around the many miles of these rocky shoals; but so small was the effect produced, in comparison with the hugeness of the obstacle, that the project was abandoned, as oue not to be realized, and was never afterwards, in that day or generation, resumed.

It may be, though, as we suppose, that the object proposed in the building of this railroad was the less ambitious one of drawing into the interior of, and through Alabama, a large part of the trade of the rich valley at the northern end of this State, above the Muscle Shoals, and of the fertile lands extending thence away up into East Tennessee above Knoxville; to which place, and often beyond it, the Tennessee river and its large tributaries were navigable •; and if this were the object of the enterprise, certainly it was not ignored by the continuation of the railroad straight on to Dalton, instead of turning it off, as first intended, at right angles, to go to, and terminate at Gadsden, on the Coosa river.

2. No advantage can result from a further examination of the new evidence on this branch of the subject. Since it was obtained, complainants’ counsel do not themselves appear to place much reliance upon that evidence. Certainly, it imparts but little, if any, force to the elaborate argument in which they vehemently controvert, upon the same evidence then before us, our former conclusion upon this point; a controversy which the statute authorizes them to wage again in this court, but not in any forum of inferior jurisdiction. The observations we have made, concerning the new evidence, were made in deference mainly to the learned chancellor, and. to the impression it produced upon his mind. For, it was in consequence of the effect which, in his opinion, was due to the new matter brought into the case since the former appeal, as he himself declares, and as our respect for him would have induced us to presume, that he has undertaken to render a decree in opposition to the judgment heretofore pronounced by this court. We can not question the sincerity of that declaration. For the learned chancellor well knows, that, however justifiable it may be to discuss the views, and oppose the conclusions of an appellate tribunal, any where else, it is wholly inconsistent with official duty and propriety, that this should be done in a judicial opinion in the same cause, by a magistrate or court whose decision therein has been reviewed and overruled. In every well-ordered state, there must be subordination and obedience to legitimate authority. These are the prime exigencies of civil society. Judicial supremacy in Alabama is vested in her Supreme Court only. This is the institution designed and designated by the constitution itself, for the correction of the errors of other jurisdictions; and no magistrate, or body of magistrates, of any of such subordinate tribunals, can assume to perform that function of superior judicial power, in regard to or upon the judgments and decrees of this court, or refuse to obey them, and carry them into effect, in cases within his or their cognizance for that purpose, without usurping authority, setting law at defiance, and, perhaps, a violation of official oaths. It is only when a case is materially changed, as the chancellor thought this was, by new matter legitimately brought into it after the judgment of the Supreme Court therein has been rendered, that such judgment ceases to be binding upon the tribunal to which the cause has been remanded.

3. In their very elaborate and able reargument of this topic, complainants’ counsel have fallen into some serious errors. They set out with the assumption, which the chancellor also adopts, that the question whether the Alabama and Tennessee Rivers Railroad Company continued to exist under the name of the Selma, Rome, and Dalton Railroad Company, did not arise for our decision upon the pleadings in the record formerly here; because, they say, complainants alleged, and defendants admitted, the consolidation of the three companies into one, to which the latter name was given. But, first, it was not thereby agreed, as we shall see more distinctly hereafter, that this consolidated company was not the Alabama and Tennessee Rivers Railroad Company, with enlarged rights and powers, under a new name ; and, secondly, if there had been an agreement of that kind in the bill and answers, yet the contracts, proceedings, and statutes, by which the consolidation was accomplished, were so fully set forth, and proved as facts, that their effect, the legal results they produced, were judicial questions, which the courts must needs consider. In a litigation involving the nature and obligations of an institution like this railroad company, and in which the interests concerned, public and private, are so many, various, and important, it is not within the province of counsel or their clients to determine by agreement among themselves — but an office incumbent on the judges, to ascertain and declare — the relations, rights, and duties which the law makes, consequent upon the acts and transactions set forth and established.

4 Another and more serious error, inasmuch as it constitutes the foundation of almost the entire argument on this point, of complainants’ counsel, is the assumption, that the words, consolidation, consolidate, and consolidated, have “ a fixed, definite, accepted, and judicial meaning,” and “adjudged constructionaccording to which, they are “inapplicable to a union of two or more companies, in such a way that one of the original corporations only was continued in existence, while the others were merged or absorbed in itand “ that the dissolution of all the old corporations, and the creation of a new one, are essential to consolidation,” according to “ the American view ” of the subject. Possessed by the conviction, as the chancellor also seems to have been, that this was the long-established and invariable meaning of the terms consolidation and consolidated, counsel erect upon the narrow basis afforded by the frequent use of these words (more convenient than any other), in the agreement of the 8th of August, 1866, and in the legislative acts of the same year, relating thereto, almost the entire superstructure of their argument, the substance of which is shown by the following extracts :

“ Now, for many years prior to the passage of these enabling and ratifying acts by the legislatures of Georgia and Alabama, the term consolidation, when applied to railroad corporations, had, by judicial construction, obtained a fixed, definite meaning; a meaning so well settled, and so general, as to be known as the ‘American doctrine/ . . . When, therefore, the two legislatures, and the parties to the contract, carefully excluding all others, selecte'd, used, and repeated these precise terms, the conclusion is irresistible,” that they were intended to be used in the sense so fixed, defined, and established. The legislatures ‘ enacted not only the terms themselves, but their adjudged construction.’ The effect and result, therefore, of the contract here authorized, made, and ratified, was a dissolution of the three corporations named, and, at the same instant, the creation of a new corporation, with property, liabilities, and stockholders, derived from those passing out of existence.”

The latter portion of the last foregoing sentence is a quotation from the opinion, in McMahon v. Morrison (16 Ind. 172), of the Supreme Court of Indiana, in 1861, repeated in the Supreme Court of the United States in 1863, to express briefly the effect of proceedings had in a particular instance, under a statute of Indiana, whereby three railroad corporations were, by two successive agreements, united, “ under the acts and terms of consolidation,” into one. The language of the statute was: “ Such railroad companies are authorized to merge and consolidate the stock of the respective companies, into one joint stock, company of the hoo railroads thus connected.” Clearwater v. Meredith, 1 Wallace, 26. Here was the authority to them to consolidate. What the agreements of the parties were, “ the acts and terms of consolidation,” the reports of these cases do not show. They relate, however, to the same undiscussed, and, therefore, we presume, unambiguous transactions. And the Federal court was governed, according to its rule, by the decision of the Supreme Court of the State, in respect to an incorporation under its statute laws. It is this Indiana case, on which the learned editor of Brice’s Ultra Vires, Mr. Green, from whose notes to that work complainants’ counsel and the chancellor quote the preceding definitions, founds his suggestion, that this may be regarded as the “American view ” of the meaning of consolidation, when used in reference to railroad companies. But it was nearly ten years after the agreement of the 8th of August, 1866, and the acts relating thereto, of Georgia and Alabama, were enacted, that this edition of Brice’s Ultra Vires was published with the notes of Mr. Green ; and we are not aware that, before that time, the doctrine so much insisted on, as conclusive in this case, "was ever promulgated by any body.

The learned editor’s notes were appended to his author’s chapters on the subject of what is called, in England, the “ amalgamation ” of corporations; which seems to us, in this country, a singular application of that word. In its origin and use, it is peculiarly technical. It pertains especially to the arts, and belongs to the language of physical science; and inasmuch as, by amalgamation, as ordinarily understood, a material product results, which, by transfusion into it of the properties and qualities of the two or more material things from whose union it proceeds, partakes of the nature of each, and is yet unlike either, it is not surprising that English judges have had trouble in perceiving the appropriateness of the word, to not a few of the cases of united corporations that have come before them. When parties and parliament, in providing for the union of two or more corporations, passed by familiar words, that were not inapplicable, and have a broader meaning — such as combination, conjunction, association, union, coalition, consolidation — and selected, as expressive of their purposes, so technical a term as “ amalgamation,” judges felt constrained to preserve, as far as possible, its original and peculiar signification in this new application of it to legal subjects.

Said Page Wood, V. C., in the Empire Assurance Company, ex parte Bagshaw (L. R. 4 Eq. 341, 347): “It is difficult to say what the word ‘amalgamate’ means. I confess, at this moment, I have not the least conception of what the full legal effect of the word is. We do not find it in any law-dictionary, or expounded by any competent authority.” — Ultra Vires, 510. So, in another case, the same vice-chancellor said : “I do not find any where any technical definition of the term ‘ amalgamate,’ and I have some difficulty in getting at its exact meaning.....Mr. Jessel says, it consists in making two companies into one; but that is scarcely sufficient. ... I should rather assume an amalgamation to be where both companies agree to abandon their respective articles of association, and to register themselves under new articles, as one body. That would be a new company, formed by the coalition or amalgamation of the two old companies.” — In re Bank of Hindustan, Higgs' case, 2 H. & M. 666; Green’s Brice’s Ultra Vires, 509-10, note.

Correct as this view seems to be, the English courts have not succeeded in confining to such instances even the word “ amalgamation.” And certainly Mr. Green is mistaken, in supposing that the broad, untechnical term, consolidation, commonly used on similar occasions in this country, has been restricted by our American courts to like cases of a particular character, and contracted to a narrower meaning here, than is affixed to “amalgamation” in Westminster Hall.

One of the cases referred to, in support of that position, is Lauman v. Lebanon Valley R. R. Co. (30 Penn. St. 42), decided in 1858; but it is an authority to the contrary. An act of the legislature of Pennsylvania, of May 5th, 1857, made it “lawful for the Lebanon Yalley Railroad Company to merge its corporate rights, powers, and privileges, into the Philadelphia and Reading Railroad Company, so that, by virtue of this act, the tioo companies may be consolidated into one, and so that ali the property, rights, franchises, and privileges, now by law vested in the said Lebanon Yalley Railroad Company, may be' transferred to, and vested in the said Philadelphia and Reading Railroad Company,” &c.; and section 2 provides, that “said consolidation and merger shall be made” by articles of agreement between the directors and managers of the two, which must be ratified by the stockholders, certified by the secretaries, and filed in the office of the secretary of State; “ whereupon, the said agreement shall be deemed and taken to be the agreement and act of consolidation of said companies.” The title to this statute was as follows: “ An act providing for the consolidation of the Lebanon Yalley Railroad Company and the Philadelphia and Reading Railroad Company.” — Penn. Laws of 1857, No. 455. The opinion of the court, by Lowrie, C. J., begins thus : “ The Lebanon Yalley Railroad Company proposes to enter into a contract of consolidation with the Philadelphia and Reading Railroad Company, and an act of assembly, passed last year, authorizes them to do so.” “ What will be the effect of this consolidation of these two companies, as authorized and proposed ? 1. The Reading company will extend its chartered rights, privileges and duties, from Reading to Harrisburg, while still preserving its name, and therefore its legal identity. . . 3. . . The Lebanon company loses its actual identity, abandons its name, and therefore its legal identity and its corporate existence, and can no longer claim any legal recognition. This is called a merger of the Lebanon corporation into the other; but such a merger is a dissolution, destroying the actual identity of both, while the legal identity of one of them is preserved ; as where a life-estate is merged in a fee-simple, one being destroyed, and the other enlarged by the operation.” — Pp. 44-5. Obviously, therefore, neither the legislature, nor the Supreme Court of Pennsylvania, considered that “ consolidation loould be inapplicable to a union of two or more companies in such a way that one of the original corporations only was continued in existence, while the others were merged in, or absorbed by it;” or, as the same idea is otherwise. expressed, “ that the dissolution of all the old corporations, and the creation of a neio one, are essential to consolidation.”

Nor did the Supreme Court of Indiana -entertain or intend to express that idea in McMahon v. Morrison, supra. This is not only deducible from the opinion in that case, but is evident from the opinion in Eaton & Hamilton R. R. Co. v. Hunt (20 Ind. 457), of the same court, delivered only two years afterwards,by the same judge (Perkins, C. J.). “Legislative acts of Ohio and Indiana authorized the Eaton and Hamilton [of Ohio | and the Richmond and Miami [of Indiana] railroad companies, to consolidate, on such terms as might, be agreed upon,” says the learned judge. Accordingly, a contract was entered into (p. 461), which declares: “First, these companies, their capital stock, their roads, debts, dues, rights in action, franchises, interests, and property of every kind, are merged, united, and consolidated into one jointstoch company, one road, one interest, and one property, upon the terms following. . . . Second, the corporate name, franchises, rights, immunities, and organization of the Eaton and Hamilton Railroad Company shall be preserved, and remain intact, and the said consolidated company shall be known by, and its business transacted in that name; in every sense, as if this consolidation had not taken place,” <fcc. There does not appear to have been any ratifying statute.

Throughout the opinion, the transaction is spoken of as a consolidation, ; although, as the judge says, it “appears that, by the act of consolidation, the exact existence of the Ohio company is continued, while that of the Indiana company is extinguished, after all its property is transferred to the Ohio company.” In this case, the agreement of the parties, not the statute, is spoken of, as “ the act of consolidation as, in the others, the agreements are spoken of as “ the act and terms of consolidation,” and “ the agreement and act of consolidation,” respectively.

In regard to the meaning of these terms, we will cite only one case more, that of The Central Railroad and Banking Company of Georgia v. The State of Georgia, 92 U. S. 665. A statute of that State authorized “the Macon and Western Eailroad Company, and the Central Eailroad and Banking Company of Georgia, ... to unite and consolidate the ■stocks of the said two companies, and all the rights, privileges, immunities, property, and franchises, belonging or attaching to said companies, under thename and charter of the said ‘The Central Eaüroad and Banking Company of Georgia,’ in such manner that each and every owner and holder of shares of the capital stock of the Macon and Western Eailroad Company shall be entitled to, and receive an equal number of shares of the capital stock of the consolidated company provided, that nothing therein should “ discharge either of said' companies ” from any of its contracts, but that they should all “ he assumed by, and be binding on the Central Eailroad and Banking Company of Georgia,” <fcc.

It was insisted there, as well as here, and doubtless upon the supposed peculiar force of the words “ unite and consolidate,” and “ consolidated companies,” and “union and consolidation ” (which are also in the act), that the statute contemplated a surrender by the original corporations of their charters, and the creation of a new corporation, which should receive the name of one of those passing out of existence, and “ the grant to it of a new charter, or a regranb of the old.” (P. 670). Else why, it was probably urged, as it is here, if the consolidated company is no other than the original Central Eailroad Company, with enlarged property and privileges derived from the other company, is there no mention of the words merger, or absorption, or selling out, in the statute, and why is that company made to commit “the absurdity of assuming its own debts and liabilities ?” But the Supreme Court of the United States unanimously decided against that view. Its opinion repudiates the theory, that of necessity, and ex vi termini, a new corporation must be produced by the consolidation of two or more previously existing ones; and its judgment is in accordance with the rulings in the cases before referred to, and not in conflict, we believe, with any other that is reported.

We do not remember that there was any other than this recent decision of the Supreme Court of the United States which attracted the attention of the chancellor and counsel, as at variance with their theory or doctrine; and though they elaborately pointed out the differences between that case and the present, they evidently did not yield assent to the opinion in the former. They cling, on the contrary, to the definitions with which they set out, as established by the “ adjudged construction ” of “ adjudicated termsand so dominating had their ideas of these become, as to urge them into another serious error.

One of the chief pillars of their argument is, that the Georgia companies had no authority from the legislature of their State to enter into an union, by which one of the contracting corporations should survive another, or the others, and continue to exist, with the stockholders, property, and rights of the latter, as its stockholders, property and rights ; but that, however advantageous this might be to all concerned, or however much insisted on, yet the existing corporations must all perish, and a new one be brought into being as the consolidated corporation, though to be endowed only and exactly as such survivor might have been. In emphatic language, counsel say : “ “ There is no word, term, or expression, in those enabling acts, in their charters, or in any act of the legislature of Georgia relating to these companies, that tends to authorize any such sale, transfer, merger, or absorption that is, to put it in words which will not delude, to authorize a union of the rights, property and effects of one or more of the original corporations, with those of another, coupled with a provision that the stockholders of the former should become and be stockholders of the latter also. Alluding to the statutes, counsel proceed: “ The terms used, and the only ones used, are these : that said companies ‘ are hereby authorized and empowered .... to unite and consolidate their road, stock and franchises, with the road, stock and franchises (of each other), and any other railroad company of this or any adjacent State.’ ” Here they stop. Nothing but the conviction that “ the dissolution of all the old corporations, and the creation of a new one, are essential to consolidation,” and that the terms, “ unite and consolidate,” no matter how qualified, necessarily import this, could have prevented counsel from seeing any thing material in the words immediately following those they cite, and therefore from quoting the sentence to the end. If they had done so, it would appear that the corporations referred to were authorized, by the statutes of Georgia, “ to unite and consolidate their road, stock and franchises,” with those of each other, and those of any other company of that or any adjacent State, “to such extent, and on such terms, as may be agreed on, by and tuith the company or companies entering into agreement with them ;” and it could have been only because fully prepossessed by the same conviction, that the chancellor, in pursuing the same line of argument, although he sets forth this additional clause, concedes to it no effect, and makes on it no comment whatever.

Tet, as we before have seen, it was under laws similar in phraseology, but less emphatic, perhaps, that the same court and judge of Indiana, on whose brief opinion, in another case, the interpretation we have discussed was made chiefly to depend, upheld, as a consolidation, a union between two railroad corporations of different States, by which, while one of them was extinguished, the other acquired, according to the agreement of the parties, its rights and privileges, and became in part the property of its stockholders. “ Legislative acts of Ohio and Indiana,” says the Chief-Justice who delivered the opinion, authorized these “ railroad companies to consolidate upon such terms as might be agreed upon.” That was the authority for their union. What their agreement was, has been shown heretofore. Their right to enter into it, under the statute, was thought so clear, that it was not made the subject of argument.

Doubtless, other similar cases might be found, if sought for. But, if our minds be disabused of the error previously combatted, authorities of this kind are not needed. This proposition, we think, is plainly established. When the rights, franchises, and effects of two or more corporations, are, by legal authority and agreement of the parties, combined and united into one whole, and committed to a single corporation, the stockholders of which -are composed of those (so far as they choose to become such) of the companies thus agreeing, this is in law, and according to common understanding, a consolidation of such companies; whether such single corporation, called the consolidated company, be a new one then created, or one of the original companies, continuing in existence with only larger rights, capacities and property. Acceptance of this as correct, makes it easy to understand, that authority given to consolidate, “ to such extent, and on such terms, as the parties may agree upon,” confers the power to constitute one of the original companies the consolidated company. And the 11th article of the contract with A. D. Breed, made several months after the passage of the enabling acts of Georgia, leaves little room to doubt that these were understood by the parties concerned, as conferring this power.

The authority being granted, the inquiry is then reduced to this : Whether, by the articles of agreement in this case, and the statutes ratifying them, the consolidated company is a new corporation, or the Alabama and Tennessee Rivers Railroad Company, with rights and property enlarged, under a new name.

On this question we must refer to what was said in . our former opinion in this cause. — 58 Ala. 313 et seq. The further observations we shall make, will relate chiefly to the language of the agreement and statutes, and be made in response to the criticisms of the same by counsel and the chancellor. We premise, however, that a consolidation of corporations, though accompanied by a transfer of property, is quite different from a mere sale, and might at that day have involved, especially when to be effected under the laws of two different States, very embarrassing considerations. There were no established forms for instruments to be used for such a purpose. It had been said, also, in judicial opinions, one from the Supreme Court of the United States, that two States could not jointly create, or unite in'creating, one and the same corporation; and it was not until 1870 that this doctrine was overturned, in Railroad Company v. Harris, 12 Wallace. It is to be observed, too, that the enabling statutes do not themselves undertake to create a new corporation.

Let us look now to the contract of consolidation. The first three short articles, and the 5th, very naturally set forth, first, the agreement to consolidate the three companies into one, which shall possess the combined rights, property, and privileges of them all, and be composed of the stockholders of all, to the extent of their several payments, and be responsible for the debts of all. These four artioles are almost the exact equivalent of the first article, above set forth, of the similar agreement in Eaton & H. R. R. Co. v. Hunt, supra (20 Ind. 460), and of the first article in that of the Philadelphia, Wilmington & Baltimore R. R. Co. v. Maryland (10 How. 383). But the parties did not go on, as in the latter case (intending to create a new corporation) they did, to frame a charter of incorporation for a new company, by prescribing the number of its shares of stock and the amount of each, — when, where, and how such new company should be organized; what its name should be; the number of its directors, or other officers; how they should be appointed, and the powers they should possess; or any of the other provisions necessary in a charter of incorporation, that relate to the interior structure and action of a body politic, and give it vitality and individuality as such. Nothing in these four articles, of this contract of consolidation, decides, or was intended to decide, under what charter cf incorporation the company should be organized and operate, or, therefore, what particular institution, or body politic, should possess, employ and exercise the rights, property and franchises thus combined, and be the consolidated company.

This is first provided for in the 4th article, as follows: “ The president and board of directors of the Alabama and Tennessee Eivers Eailroad Company shall have and exercise full power and control over all tlie property of all of said companies, hereby made the property of the consolidated company, and . . , shall cause the railroad, which. is noio completed from Selma to Blue Mountain, to be extended and completed from Blue Mountain, by way of Borne, to Dalton, over the best and most practicable route ; and to enable them to do so, and to liquidate the debts of said company, the said president and directors are hereby authorized to issue bonds, and execute a mortgage os mortgages on any part or all of the property and franchises of all of said companies, including the road-bed and right of way from Selma to Dalton.”

Possession and control of the common property and interests are hereby unreservedly conferred; and the duty is imposed of carrying on the great work, to accomplish which the consolidation was effected, not temporarily, but to completion, all the power which the constituent companies themselves had, or could grant, being conferred to insure its execution. And no where else in the agreement, is the duty or authority to build and complete the road to Dalton, or, consequently, the franchises necessary for its accomplishment, transferred or given to any other company, whether by a description of it as the consolidated company, or by any other designation.

Language could have been used, which more directly and explicitly would have constituted the Alabama company the consolidated company. Perhaps, this was prevented by doubts existing as to the proper manner of effecting it, under the acts of two separate States, and by the impression that the original corporations ought, as existing, individual entities, jointly to engage to abide- by and confirm whatever the consolidated company, or the Alabama company as the consolidated company, might do in the premises, until the authority should be perfected and perpetuated by ratification. But, however that may be, it is clear from this article, and the 6th. and 7th (to be considered next), that the intent of the parties was to invest the Alabama and Tennessee Rivers Railroad Company with all the property, powers and franchises, to be possessed and exercised by the consolidated company, for the performance of its functions. It was the consolidated company, or there was none.

The 6th article declares : “All acts, contracts, and obligations, done and made, or assumed, by and under the authority of the president and directors of the Alabama and Tennessee Rivers Railroad Company, and all such acts, contracts and obligations, hereafter done, made or assumed, by or under the authority of said president and directors, shall be valid and binding on all of said companies hereby consolidated into one.” This appears to be a reiteration of what had, in effect, been declared in the 4th article, and to have been written under the influence of the same doubts and impressions, with the view of establishing beyond cavil the authority of the Alabama corporation to act for “ all of said companies [thereby! consolidated into one,” as in fact that one.

The learned chancellor and counsel have ingeniously and elaborately argued, that the provisions of this and the 4th article relate only to an ad-interim arrangement, or administration ; and this, by the president and board of directors of the Alabama company, as special agents, and not by the company itself. In regard to the latter point, such an interpretation is but “ a sticking in the bark.” Behind those officers is the company they represent, which elected them such, and to which only they report and are responsible ; and as it is only through and by them that it could act in its corporate character, we must understand the company as here itself referred to. In the 10th article it is declared, by its full original statutory name, to be “ the acting and controlling company.” The subject of an ad-interim arrangement is brought up again, and will then be further considered.

The 7th article provides : “That at the next annual meeting of the stockholders of the Alabama and Tennessee Rivers Railroad Company, all the stockholders of each one of said companies shall have a right to vote, either in person or by proxy, according to the amount of his or her stock.” And the evidence shows that, at that time, stockholders of the Georgia companies came to Selma, where the office of the Alabama company was, and took part with those of the Alabama company, all acting together, in the election of directors at that meeting. This was in May, 1867, the time for the regular annual meeting of that company. — Depositions of Thos. A. Walker, Edward White, D. J. Printup. What else was done at that important meeting, and by the board of directors before and shortly afterwards, was, of course, entered on the minutes of the proceedings; which, if produced, ought to throw light on the subject. But we have nothing from the Selma, Eome, and Dalton Eailroad Company, or its officers, who, on this branch of the controversy, are on the side of complainants, to show what those proceedings were. Doubtless, they were entered in the old book of the minutes of the Alabama and Tennessee Eivers Eailroad Company 3 which book, and others, were consumed when the office of the Selma, Eome, and Dalton Eailroad Company, in Selma, was destroyed by fire, April 29th, 1870. The testimony of Chapman, its secretary and treasurer, is express, that this book was among those then burned. “ The current books of the Selma, Eome, and Dalton Eailroad Company,” opened, of course, after the adoption of that name, and after that convention of stockholders, in May, 1867, less than three years before, were all saved; and among these, doubtless, the book of minutes of its subsequent proceedings. What the first entries in it were, and when made, does not appear.

Complainants’ counsel say of this 7th article : “ This was, also, an ad-interim arrangement, and, at first glance, appears confused and confusing.” They explain the article, after this manner ; “ Some time must elapse before the new corporate name could be obtained^ and a new corporate organization be perfected. Meanwhile, it was essential that organization should be kept up, by the annual convention of stockholders of such companies, prescribed by law ; and that the stockholders of all three companies should now meet together’, for the transaction of the business, in which all were now interested.....The parties, therefore, provided, that such a convention should be held ‘ at the next annual meet"» ing of the stockholders of the Alabama and Tennessee Eivers Eailroad Company.’ ... It was a special provision, for the one meeting of all the stockholders of the three companies, which would have to be held in the interval, before the new corporate name could be obtained, and the new corporate organization perfected.” This is the conclusion to which the chancellor also comes.

The error of this argument is manifest. Neither was there in fact, nor was it expected there would be, any such interval between the date of the contract of consolidation, August, 1866, and the time when “ the new corporate name could be obtained,” as to afford room in the meantime for this imagj inary preliminary convention, of which counsel speak, and which was never held. It was well known that, according to law, the legislatures of Alabama and Georgia would severally convene, as they did, in the following November, only a little more than three months afterwards; while the “next annual meeting ” of the stockholders of any of these companies would not be held until the subsequent spring or summer.* That of the Alabama and Tennessee Rivers Railroad Company came on in May, 1867; long before which time, Georgia in December, 1866, and Alabama early in February, 1867, had ratified the consolidation, and authorized the adoption of the name, “ The Selma, Rome and Dalton Railroad Company,” and the charter, with all its amendments, of the Alabama and Tennessee Rivers Railroad Company.

Hereupon, according to the theory of an ad-interim administration, there would have been a bad state of affairs. The ratification being accomplished, and a name given, the original companies, by virtue of their own act, would all be dissolved, and become extinct. Yet, they would also, before dying, have pre-arranged that their successor should not come into being until some months after their decease, when the next annual meeting of the stockholders of one of the dissolved companies, if then existing, should regularly be held. Was it their intention to leave their immense property without any owner in the meantime ?

The intelligent president and directors of these railroad companies, and their counsellors, did not intend to, and did not, enter into any such agreement of consolidation as this. They had committed the conduct to completion of their great enterprise to the corporation which had constructed, and was in possession of the 135 miles of railroad then built, and nearly all of the other property at that time acquired or available. They had done all they supposed they could do, towards confirming its authority and giving efficiency to its operations, as the consolidated company ; and understanding that the stockholders of the two other companies were now, or, upon ratification by the legislatures, would be stockholders of the Alabama company, which was then also to receive a less unwieldy and more suitable name, but agreeing not to interfere with the action of its elected officers, during its current business year, they took care to provide, by article 7, that “ at the next annual meeting” of the stockholders of this company, “ The Alabama and Tennessee Rivers Railroad Company,” the community of interests and rights which the stockholders of all the companies had therein should be recognized, by their being assembled together to participate in the proceedings of, and vote all alike and equally as, the stockholders of this company. Regarding it as the consolidated company, and that, by reason of its being so, the members of all the constituent companies were equally its members and corporators, nothing could be more natural than the provision made by this article. There is, then, nothing “confused or .confusing ” about it. It becomes so, only when applied to a theory different from that in compliance with which it was adopted.

The 8th article is as follows : “ Each of the parties to this contract and agreement shall ask of the legislatures of their respective States the enactment of a law, giving one name to all of said companies hereby consolidated under authority from each of said States.” • The entire object of this article, and a whole article is devoted to it, is to obtain a name given by laws of both the States, that should be significant of the union of the three companies. They evidently did not want to be called “ The Alabama and Tennessee Rivers Railroad Company.” They were intent on having what, in the 10th article, is twice called “ a common name,” and in this article “ one name to all of said companies hereby consolidated.” And that finally adopted embraces the names of the three towns or cities which were, severally, the seats or homes of the three constituent companies — Selma, Rome, and Dalton. They do not in this, or any other article, provide, or say any thing about obtaining a charter of incorporation for the consolidated company. Why is this ?

A charter is necessary to the creation of a new corporation; and the charter of a railroad corporation grants franchises of two kinds. The first object and office of such an instrument is to confer on natural persons the capacity and privilege, as individual shareholders or corporators, of being associated together, and constituted into one- organism, a body politic, whereby they may cooperate in accomplishing the objects for which it is created, without individual liability for its acts or contracts, and with power of succession in the membership. To this end, such charters, ordinarily, prescribe their rights, responsibilities and powers as corporators; the shares into which the capital, if it be a business corporation, shall be divided ; how the company shall be organized; what number of directors, trustees, managers, or other officers they shall have; how these shall be appointed or elected ; what portion of the authority and powers of the corporation they shall be invested with, and in what manner it shall be exercised. We speak now of things pertaining to the interior action and structural organization of the corporation, by which it becomes in law a capable artificial person. This artificial person, as such, is enabled to own and dispose of property, and transact business; and if it be a railroad corporation, important rights, privileges and franchises are granted to it, which belong to it in its corporate character, not to the corporators composing it. Thus, the State, in the exertion of its right of eminent domain, authorizes it to build, own, and operate a railroad through a prescribed part of its territory, or between particular places ; to acquire therefor a right of way, according to law, over the lands of citizens and private persons, against their will; and to exact and take tolls and fares for transportation of persons and property; and these rights and franchises, like the visible property belonging to it as a corporation, being separable from its personality, and transferable, may, by consent of the State, be united and consolidated with the like rights, franchises, and property of another railroad corporation, so that those of both, or of more than two, shall become vested in a single one. And that is what was done in this case, by authority of Georgia and Alabama.

But there might be such irreconcilable differences or incongruity in those provisions of their several charters which relate to the rights and liabilities of the corporators themselves, respecting the manner of their being organized, their rights as voters, the numbers, modes of appointing, and extent of the powers of their officers, — things relating to their organization, or conditions upon which their incorporation was made to depend, — as that the inclusion or consolidation of those of each of the charters into one, for a single new consolidated company, would make the corporate body thereby created so misshapen and helpless as to be wholly incapable of the functions it was designed to perform. Things directly inconsistent might become essential parts of the same constitutional instrument.

Take one instance for illustration ; (and in some other respects the charters of these companies were unlike). Under the charter of the Alabama company, individual corporators were not made liable for the debts of the corporation, beyond the amount of the unpaid portions of their shares of the capital stock. In one of the Georgia charters, is this section : “ The private property of each stockholder shall be liable for the payment of the debts of the company, in proportion to the amount of stock owned a clause under which stockholders who had promptly paid the amounts of their several subscriptions, might, if the undertaking failed, be compelled to pay three, five, or ten times more, according to the condition and involvement of the company at the time of failure. It is not necessary to enlarge on the consequences of forming a company with such an impracticable constitution. We can not suppose that they were not apparent to the presidents, directors, and legal advisers of the parties to the agreement of consolidation; and if, as is contended, a new corporation was intended to be and was created by that act, one which had no previous existence, then, since to create it a corporation, it must have a charter which, in such a case as this, no other being provided, must consist of those of the three constituent companies with all their contrariant provisions united into one, the parties concerned would never have contented themselves with engaging, by article 8, to procure only a name and nothing else for their new corporation. They would have been earnest to obtain a new charter for it also. And why were they not ? ' Certainly, because they thought their intention sufficiently declared in previous articles, that the consolidated property, powers and franchises of the three, were to be exercised by and vested in a living company that then was, and long before had been, organized and in operation, under a charter with which they were entirely satisfied, except the name it gave. And they justly thought that the new name desired should be prescribed and recognized in the laws of both of the States in which the railroad was to be built, and by which severally the rights and franchises to be exercised had been granted to corporations differently designated.

Article 10 runs thus : “ Until a common name shall be lawfully given, under which the franchises of each of said companies shall be united, the Alabama and Tennessee Bivers Bailroad Company shall be the acting and controlling company ; and the organization of the other companies may be continued until then, for the purpose only of preserving and enabling the acting and controlling company to exercise the franchises hereby consolidated or united with the franchises of said acting and controlling company, and all the contracts and obligations which may be entered into or made for said consolidated company, shall be done, until a common name shall be lawfully given as aforesaid, in the name and in accordance with the franchises of the Alabama and Tennessee Bivers Bailroad Company.”

This article is so vaguely worded as to afford apparently some support for the theory, derived from the word “ until,” of an ad-interim administration. The chief purpose, though, of the article, seems to have been, by further assurances, to create confidence in and confirm the authority of the Alabama and Tennessee Bivers Bailroad Company to exercise all the rights and powers previously belonging to each of the companies separately; and as provision had been made by article 8 for a change of its "name by statutes,- — doubtless, the same by which it was expected that its new authority and powers would be ratified — it was apparently thought proper to declare expressly that, “ until ” this was done, all that this company, “ the acting and controlling company,” might do, in the prosecution of the common enterprise, in its awn original name, should be as binding and valid, as if done after-wards, in the new name to be given. And in support, to that time, of this authority, “ the organization of the oilier companies,” was to be continued, “ for the purpose only of preserving and enabling the acting and controlling company to exercise the franchises hereby consolidated or united with the franchises of said acting and controlling company.” It is plainly indicated that this acting and controlling company, with whose franchises those of the others were thereby consolidated, was expected to survive those others; and that the franchises of which they Avere now deprived, were to be preserved and perpetuated as portions of its faculties, rights and powers.

The word “ acting,” in the connection in which it is used above, does not signify, as argued, that this company was to be the “ agent ” merely, and for a time, of the other companies. An agent is not, in reference to his principals, the “ controlling ” person, but the reverse. “ Acting ” is used in the sense of operating. This was the operating and controlling company.

Nor does the consolidation of the franchises of the other companies “ with ” its franchises, as expressed in this article, mean, as in many instances it might, no more than a consolidation of its franchises with theirs — that is, simply a union of all, as insisted on. The language and context plainly import that the Georgia companies were so divested of their rights and poAvers, as to leave no reason why they should be any longer continued in existence; while, evidently, it was intended that the Alabama company should possess both theirs and its own, and “ exercise ” them, too, in causing “the railroad which [was then] completed from Selma to Blue Mountain, to be extended and completed from Blue Mountain, by way of Borne, to Dalton.” This office and work, devolved on it by the 4th article of the contract of consolidation, are not transferred to any other company. Nor were the franchises which were “ consolidated with ” its franchises, to enable it to perform the functions of the consolidated company, separated therefrom, to be disposed of otherwise, or its authority or powers in the least impaired, by any thing in the 10th or any other article of that contract.

In fine, while it appears that all the consolidated rights, property and franchises of the Constituent corporations, were united in the Alabama company, with the intent that it should employ and exercise them in execution of the purposes for which they were conferred, and that the stockholders of the other companies should become stockholders in it, and those companies be dissolved; it is also clear that no new corporation was created, or sought to be created, by the contract we have examined, to take the place of the Alabama and Tennessee Rivers Railroad Company, as the consolidated company. If, says the Supreme Court of the United States, “ there be no words of grant of corporate powers, it is difficult to see how a new corporation is created. If it is, it must be by implication ; and it is an unbending rule, that a grant of corporate existence is never implied.” — Central Railroad v. Georgia, 92 U. S. 670. Many franchises may be, and are granted, by charters that'do not incorporate the grantees. They are not charters of incorporation.

6. We have now reviewed all the articles in the contract of consolidation deemed material in this discussion. The companies being authorized by law “ to unite and consolidate their roads, stocks and franchises, , . . on such terms, and to such extent ” as they might agree upon, and having entered into and adopted the agreement we have been considering ; what did the legislatures of the two States then do? They enacted (the State of Georgia first), “ that the consolidation of ” the two Georgia companies, designating them by their full names, “ with the Alabama and Tennessee Rivers Railroad Company of the State of Alabama, so as to form one consolidated railroad company for the construction and use of a railroad to be constructed from Blue Mountain, in the State of Alabama, as a continuation of the Alabama and Tennessee Rivers Railroad, by way of Rome, to Dalton, in the State of Georgia ” [using substantially the language of the 4th article of the contract], “be, and the same is hereby, ratified and approved; and the consolidated company, acting by its board of directors, shall be, and is hereby, authorized and enipowered to adopt the corporate name and style of the Selma, Rome, and Dalton Railroad Company, and to adopt as its charter the charter of the said Alabama and Tennessee Rivers Railroad Company, as now existing, with all the amendments thereto.” The latter provision was probably deemed especially proper in the act of. Georgia, as a declaration of her express consent that franchises granted by that State to companies of her own might be vested in and enjoyed by a company incorporated and organized under statutes of Alabama.

What, then, was ratified? “The consolidation of” the Georgia companies with the'Alabama and Tennessee Rivers Railroad Company, in the language of the statute of this State, “ as agreed on by and between said companies.” Observe, also, that it is “ the board of directors” of the consolidated company, to whom authority is given to adopt the name mentioned and the charter of the Alabama company. This means, of course, a consolidated company already existing and organized; for none other could have a board of directors. But no new corporation had been brought into existence. Is it supposed that a board of directors was to be self-created, and then to adopt a name and'charter for, and after-wards to build up, under' itself, a corporation which must exist before it could have, or the persons so acting could be its board of directors? Certainly no other company could have been thus referred to, in this grant of authority to adopt a name and charter, but the Alabama and Tennessee Rivers Railroad Company. And very probably, if we had the minutes of the proceedings of its board of directors of that day, it would be found, that, almost immediately after the passage of these laws, that board formally discarded the old name of the company, and adopted the title, “The Selma, Rome, and Dalton Railroad Company,” before the convention of its stockholders in that year’s “ annual meeting,” and that the company went right on transacting business as before, without any other than this nominal change.

The adoption of a new name, a circumstance not uncommon, did not, of course, abolish the corporation ; and “ the gift of new powers to a corporation,” says the Supreme Court of the United States, “ has never been thought to destroy its identity, much less to change it into a new being. Such a gift is not a grant of corporate existence. It assumes corporate life already existing. ’ — Central R. R. Co. v. Georgia, supra. Uunquestionably this is true in the present instance.

However a consolidation of one corporation with another may affect prior executory contracts, and absolve a stockholder of either Irom obligation to continue that relation, or a guarantor of stock, or a person who had agreed to lend money for its bonds, from his contract, upon the principle of the plea, non veni in hanc conventionem — that he did not engage to do what is now required of him; such decisions do not touch the case and questions now presented. And if, in relation to an existing railroad corporation of one State, with whose franchises those granted by another State to other companies have been consolidated, the ratifying statutes, intended to be identical, of the two consenting States, in conferring upon it, “ through its board of directors,” authority to adopt a designated name, go on further to say, “ and to adopt, as its charter, the charter ” it had already received from the State which created it; this may be considered as a grant of authority to such company, or requirement of it, by both States concurrently, to proceed in the exercise of its enlarged powers under the charter of its incorporation. True, the provision may have been unnecessary, and the enactments ¡¡be inexpertly framed. But we can not give to them any other reasonable interpretation, than that they ratify and validate an agreement that the Alabama company shall possess and exercise the combined franchises of the three companies, “for the construction and use” of a railroad, as a continuation of” that of the Alabama company, “ by way of Rome, to Dalton in the State of Georgia.”

This conclusion is confirmed by other circumstances. The proceedings to consolidate were in progress, from near the beginning, to the end of the year 1866. After the negotiations of Lapsley with the Georgia companies, the acts authorizing the consolidation were passed; and later still, in May of the same year, “ the Breed contract ” was entered into. By it, Mr. A. D. Breed took upon himself the burden and expense of extending and completing the railroad from Blue Mountain, to which place it had then been built, about one hundred miles further, to Dalton, in Georgia; he agreeing to do so with no other security than that to be afforded by the road itself, and its appurtenances, and the lands and other property of the Alabama and Tennessee Rivers Railroad Company, indebted as it was. And that'contract, as shown in our former opinion, was expressly based on the expectation, that “ the chartered rights and privileges ” — nothing else was wanted — of the Georgia companies, would “be transferred to, and vested in ” the Alabama company; one of them having signified to it “ a perfect willingness to enter into any arrangement” it desired, “for a consolidated and continuous line of railway from Selma to Dalton, under the ownership and control of the party of the first part,” the Alabama company; and pursuing that purpose, in the preamble to the contract of consolidation, the object of the three companies is declared to be, “ to unite together into one company, so as to complete and own and use one continuous railroad, from Selma, by way of Rome, to Dalton, under the authority and control of one set of officers;” an object which the 4th article particularly, and the 7th, were designed to accomplish.

Of the debts of the Alabama company, no fear was then entertained. The completed road and its other property, it was believed, would be worth more than those debts and the future cost would amount to. The contract with Mr. Breed proves this, by other than the 11th article. For undertaking, as before mentioned, to extend and complete the railroad to Dalton, without any other security for reimbursement of the great expense than liens upon the road, and other property and franchises of the company, he expressly agreed that those liens should be “ subject and subordinate to existing liens, and to liens which may he created for the security of bonds of the party of the first part, ” the Alabama and Tennessee Rivers Railroad Company, “ which may be hereafter issued in extinguishment of present mortgage-bonds, . or to discharge any, debt having a lien on property of ” the company, And when this contract was confirmed, in September, 1867, it having been agreed that mortgage-bonds to the amount of $5,000,000, and the mortgage to secure them, under which the complainants make claim, should be executed, bearing date the first day of the following month (October, 1867), to aid Mr. Breed in his undertaking; it was further stipulated between him and the company, then called the Selma, Rome, and Dalton Railroad Company, that the lien thereby created upon every thing it then had, or should after-wards acquire, its road and appurtenances, its lands, its franchises, and every thing else it could mortgage, should have priority of his liens under the contract of May, 1866. And it being doubtful whether, according to that contract, any of the proceeds of those bonds could be used in extinguishing debts not secured by, or creating liens, it was then, in September, 1867, covenanted that, out of the proceeds of $2,000,000 of those bonds, set apart to secure payment of antecedent debts, the company might pay debts not secured by liens, as well as those that were so secured. And notice of the existence of debts of the company, and of the liability of its property to pay them, was carefully embodied in the trust deed of October, 1867, to complainants.

7. The more thorough investigation we have now made, in consideration of the large interests involved, and the ability and earnestness with which the views we heretofore expressed on this question have been controverted, only confirms us in the conclusion we then pronounced, that the Selma, Rome, and Dalton Railroad Company is the Alabama and Tennessee Rivers Railroad Company, under a new name. This identity could not be affected by any deeds executed, or other transactions engaged in, by the board of directors, or any other officers of the company, in September, 1867, or at any other time, founded on the assumption, or indicating an opinion, that the company for which they were acting was a new corporation. The chancellor’s decision upon this point will, therefore, be reversed.

8. In respect of the liability of the railroad and its appurtenances from Selma to the State line of Georgia, including the rolling-stock of the company, to the mortgage trust deed of 1852, of which appellant Meyer is now trustee,-we adhere to the views expressed in the opinions delivered upon the hearing and application for a re-hearing, upon the former appeal. It is not necessary that we should discuss that question further. The ruling of the chancellor will be modified accordingly, so as to declare the property indicated, to the extent mentioned, subject to the lien of that trust deed.

9. Nor is our opinion changed in regard to the claim made for the beneficiaries of that deed, — -that it covers the portions of the public lands which were granted by Congress to the State of Alabama, and by the State, in 1858, to the company, in trust to be used as specified, to aid building the railroad. Not only were those lands not within the scope and operation of that trust deed of 1852, but the specific trusts upon which the grant was made would have prevented them from becoming subject to the deed. So much of the chancellor’s decree as relates to this matter is not erroneous.

10. The cars and locomotives called “ the Breed rolliDgstock,” were purchased or manufactured by Mr. Breed, and used by him on the railroad while it was in his possession under the lease to him embodied in “ the Breed contract; ” and we do not think the title to them had passed to the railroad company, when, in August, or September, 1870, he transferred them to the New York Guaranty and Indemnity Company. It was a provision of the Breed contract, that when Mr. Breed should return the railroad and other property received by him under the lease, a schedule should be made of the items and their appraised values, to be compared with the same as set forth in the similar schedule made when he received the property; and it was further agreed that, “in the second schedule, all property that may be returned, of like kind with that leased and set forth in the first schedule, will be listed and valuedand the difference between the amounts of these values, if against the railroad company, was to be settled, as a part of its debt to Mr. Breed, by the delivery to him of securities of a kind specified in the contract. Mr. Breed was, also, according to the same instrument, entitled to keep and use the railroad and its appurtenances, and appropriate its revenues to the payment of its debt to him, until it was reduced to $500,000; which reduction was never made. The company owed him about $4,000,000, when, in the autumn of 1870, he turned over to it, and surrendered his right to keep and operate, the completed road ; and before doing so, he expressly reserved, with the consent of the company, his title to this new rolling-stock, and they agreed to hire it from him, with a knowledge that he intended to transfer his interest in it to the guaranty company for the repayment of money it had advanced to aid him. The railroad company, also, afterwards hired this stock from the guaranty company, agreeing at the same time to buy it from that company, on terms which it never complied with. The conditions, therefore, never existed, upon which title to this rolling-stock was to be vested in the railroad company, and the property to become subject to the mortgage trust deed of 185'i. The chancellor’s order, overruling the contrary finding of the register, was correct, and is affirmed.

11. The payments made by authority of the chancellor, to an amount between $8,000 and $9,000, to other railroad companies, of moneys due to and previously received for them, according to a necessary usage in the business of connecting railroads, was approved by this court on the former appeal. “ To withhold the payment of these moneys,” it was then said, “ from the corporations for which they were collected, would have been a breach of trust; and probably it would have been resented, by the refusal of those companies to keep up business relations with the defendant company, or the receivers; without which relations, the business and receipts from the road would have been greatly diminished and in support of our approval wm cited a ruling of Mr. Justice Bradley, on the circuit, in Cowdrey v. Galveston R. R. Co., 2 Woods, which allowed a rebate of freights for the purpose of obtaining custom. It may be, as contended, that the authority is not directly in point. But we think the principle upon which it was founded, is applicable in this case. It was manifestly important to the economical management of the railroad, with a view to preserve its value, and prevent the loss of its business, that good faith should be kept, in a trust of this kind, with those companies, by and over whose roads passengers and goods were transmitted to and from this railroad. The chancellor’s ruling on this point is, therefore, again approved.