John Hancock Mut. Life Ins. Co. v. Worcester, N. & R.R. Co.
| Decision Date | 10 May 1889 |
| Citation | 21 N.E. 364,149 Mass. 214 |
| Parties | JOHN HANCOCK MUT. LIFE INS. CO. v. WORCESTER, N. & R.R. CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
May 10 1889
HEADNOTES
Geo O. Shattuck and F.L. Hayes, for plaintiff.
R Olney, for defendant.
The plaintiff is the holder of bonds which were issued by the Nashua & Rochester Railroad and guarantied by the Worcester & Nashua Railroad, and which gave the holder the right to convert them into stock of the former corporation, at par, at any time after the completion of its road,--all by the express authority of special statute. The road has been completed, and since then the two railroad corporations have been consolidated under a statute authorizing it. The statute subjects the new corporation to all the contracts of the old in terms to be stated. The plaintiff has made a demand upon the new corporation, which has been refused, and the question is whether it can recover damages for the refusal, or whether its right to convert the bonds into stock was ended, or at least limited in point of time, by the consolidation. It is argued that the contract to exchange stock for bonds depended on the continued existence of the contracting corporation the stock of which was to be delivered, and that the bonds cannot be taken to have bound the Nashua & Rochester Railroad to continue in existence. We have no occasion to controvert these or any other general propositions advanced for the defendant. Neither do we lay down any general propositions in deciding for the plaintiff. We deal only with this particular consolidation. When these bonds were issued, the obligor's road was under a long lease to the Worcester & Nashua Railroad. The latter was required by statute to guaranty the bonds. It paid the interest directly to the bondholders, and after a time it mortgaged its road, as a further security. Soon after the bonds were issued, the Worcester & Nashua road was authorized to buy the bonds and stock of the Nashua & Rochester Railroad, with a proviso requiring the former to exchange the stock of the latter for its bonds on presentation. Subsequently the consolidation was authorized, and was carried through. The parties in uniting may not have dealt on a footing of perfect equality, as a dividend of 3 per cent. per annum was paid the stockholders in the old corporations from the dates of the last dividends declared to the time of the union. The dates of the last dividends declared by the two corporations are said to have been different. But the legislature contemplated equality. It dealt with the shares in both of the old corporations as exactly equal to the shares in the new. These were to be exchanged share for...
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