Cook v. Detroit, Grand Haven & M. Ry. Co.
| Decision Date | 21 April 1880 |
| Citation | 5 N.W. 390,43 Mich. 349 |
| Parties | COOK v. DETROIT, GRAND HAVEN & MILWAUKEE RAILWAY COMPANY. |
| Court | Michigan Supreme Court |
The Detroit, Grand Haven & Milwaukee Railroad Company did not, by organizing and filing the statutory declaration in accordance with section 2373, Comp.Laws, become responsible for the prior unsecured debts of the Detroit & Milwaukee Railroad Company.
Error to superior court of Detroit.
Alfred Russell, for plaintiff in error.
G.V.N Lothrop, for defendant in error.
Plaintiff sued defendant on a debt due him from the Detroit & Milwaukee Railroad Company, and based his claim of recovery on the ground that the defendant company is in law the same corporation as his debtor, and bound to pay all its debts. The debt consists of a judgment rendered February 26, 1875 for $5,000.
On the fourth day of September, 1878, Samuel Barker and six other persons purchased the franchises and property of the Detroit & Milwaukee Railroad Company, so far as the same were mortgaged by certain mortgages executed in 1855, 1856, 1860 and 1863, by the Detroit & Milwaukee Railway Company and the Detroit & Milwaukee Railroad Company, the purchase being made on foreclosure proceedings, in which a decree of sale was made by the circuit court for the county of Wayne. The Detroit & Milwaukee Railroad Company was a reorganization on a former foreclosure sale under a similar mortgage against the Detroit & Milwaukee Railway Company.
After their purchase, and on the 26th day of October, 1878, these purchasers executed a statutory declaration in accordance with the statute of 1859, (Comp.Laws, � 2373,) whereby they declared their purpose of continuing to perform the duties, and enjoying the franchises and immunities of the said railway corporation, and that they had provided the means for continuing and performing the duties and enjoying the franchises and immunities, and had provided suitable equipments for running and operating the road, and performing the duties incumbent on said corporation, and that the name by which they desired the said corporation to be called is the Detroit, Grand Haven & Milwaukee Railway Company. It was further declared that the purchasers had transferred to said corporation its railway track and appurtenances, and all the equipments necessary to run the same and perform its duties. This declaration was duly filed with the secretary of state, and notice given to the attorney general, as required by law. This conveyance was dated on the same day, and covered all the property and franchises.
The court below held that the corporation thus invested with these rights and franchises was not responsible for the debts of the Detroit & Milwaukee Railroad Company existing before the foreclosure.
It is claimed by plaintiff that, by the method adopted by the purchasers to complete their organization, they continued the original corporation in force with all its former obligations.
The statute of 1859, entitled "An act in relation to mortgages against--preferred stock in--and the delivery of goods by railway companies," (Laws 1859, p. 252,) was passed to provide for the preservation of railway mortgages of the franchises of the mortgaging corporations. Until this law was passed there was no positive statute providing directly how mortgage sales should be made effective. Mortgages had been authorized of railroads, which necessarily involved the right which could alone make them of any value, but the interests of purchasers were left to be worked out by implication; and, whether perfect or not, would necessarily give rise to some disputes as to their precise quality and extent. This statute provides that if the railway track and its appurtenances of any railway corporation are sold on foreclosure, the purchasers, if they provide suitable equipments for running the road, and performing the duties incumbent on it by law, and transfer to it again its track and appurtenances and necessary equipments, and make the declaration therein provided, (which is, in substance, like the...
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