Day v. Worcester, N. & R.R. Co.

• Decision Date: 05 March 1890
• Citation: 151 Mass. 302,23 N.E. 824
• Parties: DAY et al. v. WORCESTER, N. & R.R. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

151 Mass. 302

23 N.E. 824

DAY et al. v. WORCESTER, N. & R.R. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

March 5, 1890

COUNSEL

George O. Shattuck and Wm. A. Monroe, for plaintiffs.

Richard Olney, for defendants.

OPINION

HOLMES J.

This is an action against a corporation formed by the consolidation of the Nashua & Rochester Railroad and the Worcester & Nashua Railroad, to recover damages for a refusal to issue stock in exchange for bonds of the former road in accordance with a provision in the bonds. The facts are the same as in John Hancock Mut. Life Ins. Co. v. Worcester, N. & R.R. Co., 149 Mass. 214, 21 N.E. 364, except that it now appears affirmatively that the consolidation actually was carried out on the footing of equality between the shares of both the old corporations and the shares of the new one, as was contemplated by the statute authorizing it, a point which was doubtful before, (149 Mass. 219, 220, 21 N.E. 364,) and except that the demand was for stock in the new corporation alone.

The argument of the defendant has not been addressed to the technical sufficiency of the demand, but to showing that the former decision should be reconsidered. We do not accede to the argument; but, as there seems to have been some misapprehension of the meaning of the judgment in the former case, we shall add something to what was said there, in the hope of making plainer our point of view.

For the purpose of the decision, we assume that the bonds did not import a contract by the Nashua & Rochester Railroad Company to continue in existence until they were satisfied that the contract in the bonds to exchange them for stock was only binding so long as the Nashua & Rochester Railroad Company was in existence, and that the legislature did not attempt to enlarge or change the liability created by the bonds. Therefore, we do not stop to consider how the defendant can complain of the act under which it has come into existence and which was voluntarily accepted by its constituent companies. Water-Supply Co. v. Braintree, 146 Mass. 482, 486 16 N.E. 420; New Bedford R. Co. v. Old Colony R. Co., 120 Mass. 397; Pitkin v. Springfield, 112 Mass. 509.

The argument for the defendants tacitly assumes that the Nashua & Rochester Railroad Company has ceased to exist, to all intents and purposes, and concludes that therefore there is no longer an obligation to deliver stock for the bonds,--a conclusion which would follow by the premise which we have conceded. But the very point decided in the Case of John Hancock Insurance Company was that, by the true construction of the consolidating act, the Nashua & Rochester Railroad Company has not ceased to exist, but that for the present purposes the defendant is that company, with a different name.

Assuming, for the moment, that this construction is correct, there can be no question of the power of the legislature to authorize a consolidation upon those terms. A change of name, an acquisition of new property and rights, or both together, do not necessarily make a change of person. To add another illustration to those suggested formerly: If the legislature authorizes one railroad, which has issued bonds like the present, to buy the franchises, property, and stock of another, and to issue new stock of its own to an equal amount, with an express proviso that the identity of the purchasing road shall remain unchanged, and thereupon the purchase is made, we conceive that there can be no doubt that the purchasing road is still bound to deliver stock for bonds, as before. If the bondholder could not complain of the increased issue, (Pratt v. Telephone Co., 141 Mass. 225, 5 N.E. 307,) it is very certain that the company could not, and least of all on the ground that it was no longer the same company. Banking Co. v. Georgia, 92 U.S. 665. See New Bedford R. Co. v. Old Colony R. Co., 120 Mass. 397, 400.

In the case supposed, the identity of the purchasing road remains unchanged for all purposes. But the law is equally familiar with the preservation of identity for a particular purpose when in other respects it is changed. More than that, it is familiar with an identification of natural persons, which, of course, is wholly feigned, for the preservation and transmission of rights and duties. The heir "is the same person as his ancestor." Oates v. Frith, Hob. 130; Bain v. Cooper, 1 Dowl. (N.S.) 11, 14. Executors "represent the person of the testator." St. 9 Edw. III. St. 1, c. 3; Co. Litt. § 337; Coghil v. Feelove, 3 Mod. 326; Bain v. Cooper, ubi supra. Administrators "represent the estate" of their intestate. North v. Butts, 2 Dyer, 139b, 140a.

Even assigns got the benefit of a warranty to which they were not parties by an attenuated form of the same notion. Norcross v. James, 140 Mass. 188, 189, 2 N.E. 946. Similar illustrations are referred to in Compton v. Railway Co., 45 Ohio St. 592, 616, 16 N.E. 110, and 18 N.E. 380.

When two corporations are consolidated, no doubt, for most purposes, they cease to exist; and the new corporation is a distinct person in the eye of the law, although it is their "legal successor." Graham v. Railroad Co., 118 U.S. 161, 180, 6 S.Ct. 1009. But no fiction is necessary so far as the legislature sees fit to say that the new corporation shall be regarded as the same with one, or even alternately as the same with each, of the old ones, or, more explicitly, that, although the new corporation is a new person, for the acquisition of new rights, or the making of new contracts, the old corporations shall not be altogether ended, but shall continue under the new name, so far as to preserve all their existing obligations unchanged. Compton...