the state constitution. Such legislation, even where it affects interstate roads, is not unconstitutional as an improper interference with interstate commerce.56 A constitutional or statutory prohibition of consolidation of railroads owning parallel or competing lines does not apply to street railway companies.57

The question then arises as to what are parallel and what are competing lines. It is to be noted, in the first place, that these prohibitions generally are of parallel "or" competing lines rather than parallel "and" competing lines.58 Parallel lines are not necessarily competing lines,59 nor lines equidistant from each other,60 but are lines running between the same two points or localities.61 As to whether lines are competing lines, within such a prohibition,62 it has been held that if two lines have only one point in common, they are not competing lines,63 although there is authority to the contrary.64 The word "competing" means a road ready and complete for operation.65 For further and a more detailed discussion of this subject, reference should be to standard textbooks on the law of

railroads.

Fed. 933; Venner v. New York Cent. & H. River R. Co., 177 N. Y. App. Div. 296, 164 N. Y. Supp. 626.

Does not apply to consolidation of terminal railroads. Spencer v. Seaboard Air Line R. Co., 137 N. C. 107, 1 L. R. A. (N. S.) 604, 49 S. E. 96. Lease of parallel or competing lines, see § 1238, supra.

56 Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. Ed. 849, aff 'g 97 Ky. 675, 31 S. W. 476.

57 Venner v. Chicago City R. Co., 258 Ill. 523, 544, 101 N. E. 949; State v. Lincoln Traction Co., 90 Neb. 535, 134 N. W. 278; Gyger v. Philadelphia City Passenger Ry. Co., 136 Pa. St. 96, 9 L. R. A. 369, 20 Atl. 399.

58 Com. v. Louisville & N. R. Co., 144 Ky. 324, Ann. Cas. 1913 A 633, 138 S. W. 291.

59 Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. Ed. 849.

60 Com. v. Louisville & N. R. Co., 144 Ky. 324, Ann. Cas. 1913 A 633 with note, 138 S. W. 291.

61 Parallel railroads are those running in one general direction, travers

ing the same section of country, and running within a few miles of each cther throughout their respective routes. State v. Montana R. Co., 21 Mont. 221, 45 L. R. A. 271 with note, 53 Pac. 623.

62 See Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. Ed. 849; Dady v. Georgia & A. Ry., 112 Fed. 838; Kimball v. Atchison, T. & S. F. R. Co., 46 Fed. 888; Illinois State Trust Co. v. St. Louis, I. M. & S. R. Co., 217 Ill. 504, 75 N. E. 562; v. Louisville & N. R. Co., 148 Ky. 94, 146 S. W. 767; Com. v. Louisville & N. R. Co., 144 Ky. 324, Ann. Cas. 1913 A 633, 138 S. W. 291.

Com.

63 East Line & R. River Ry. Co. V. State, 75 Tex. 434, 12 S. W. 69O. Railroad lines are not com peting ones because of their contiguity intersection at a terminal

or

point. Smith v. Cleveland, C., C. & St. L R. Co., 170 Ind. 382, 81 N. E. 501. 64 State v. Montana R. Co., 21 Mont. 221, 45 L. R. A. 271, 53 Pac. 623.

65 Mannington v. Hocking Valley Ry. Co., 183 Fed. 133.

§ 4682. Imposing conditions on power to consolidate. The legislature, in granting the power to consolidate, may impose conditions,66 and by consolidating under such authority the company impliedly consents to such conditions so as to be bound thereby.67

§ 4683. Effect of invalidity of statute authorizing consolidation. Consolidation under a statute which is invalid as applied to the constituent companies is inoperative and void.68 If there is no valid statute authorizing a consolidation, there is not even a de facto consolidated corporation.69

§ 4684. Withdrawal or impairment of authority. While the fact that a consolidation has been made and carried into effect would undoubtedly preclude the legislature from repealing the right to consolidate as vested in the charter of a constituent company, so as to affect such consolidation,70 yet it is settled that charter power to consolidate may be repealed, so long as it has not been acted upon, without thereby impairing the obligation of any contract.71

66 Ashley v. Ryan, 153 U. S. 436, 38 L. Ed. 773, aff 'g 49 Ohio St. 504, 31 N. E. 721; Illinois Grand Trunk R. Co. v. Cook, 29 Ill. 237.

To my mind," said the federal court, the state, in the exercise of its legislative power, untrammeled by constitutional inhibition, may grant, withdraw, or refuse to corporations created by it the power of consolidation upon such terms and conditions and under such restrictions and limitations as it may see fit.' Jones v. Missouri-Edison Elec. Co., 135 Fed. 153, rev'd on other grounds 144 Fed.

765.

67 Ashley v. Ryan, 153 U. S. 436, 38 L. Ed. 773; Mobile, J. & K. C. R. Co. v. State, 89 Miss. 724, 122 Am. St. Rep. 295, 41 So. 259.

68 Boor v. Tolman, 113 Ill. App. 322. 69 See § 4788, infra, and see § 280, supra.

70 See St. Louis, I. M. & S. R. Co. v. Berry, 113 U. S. 465, 475, 28 L. Ed. 1055.

When a statute authorizing the consolidation of corporations is repealed

be

by the legislature (assuming that the repeal is within its power as to existing corporations), proceedings to consolidate cannot afterwards commenced. But the repeal cannot affect consolidations perfected prior thereto. Nor can it prevent completion of a consolidation commenced prior thereto, where there is a provision saving acts done or rights which have accrued. Where two corporations, having authority to consolidate under a statute, enter into an agreement to consolidate, as provided by the statute, call a stockholders' meeting to ratify the agreement, and serve and begin the publication of the required notices, before the statute is repealed, they may complete the consolidation afterwards, where the repealing act provides that it shall not affect or impair any act done or right accruing, accrued or acquired prior thereto. Cameron v. New York & M. V. Water Co., 133 N. Y. 336, 31 N. E. 104, aff 'g 62 Hun 269, 16 N. Y. Supp. 757.

71 Pearsall v. Great Northern R. Co.,

The legislature may withdraw the general power to consolidate, conferred upon a railroad corporation by its charter or a general law, to such an extent as to prohibit consolidation with parallel or competing lines, if the right to alter, amend or repeal the charter has been reserved,72 and also even where no such power has been reserved,73 since, even in the absence of such a reservation, such a limitation of the power to consolidate is within the police power of the state.74

§ 4685. Consent of stockholders. Consolidation cannot be effected merely by the action of the boards of directors but must be consented to by at least a majority of the stockholders.75 Statements often found in the decisions and textbooks that a lawful consolidation cannot be effected without the consent of all the stockholders are apt to be misleading without further explanation. In fact, the rule is well settled that if the charter of a corporation, or a general law in force at the time of its formation, expressly allows the corporation to consolidate, the provision enters into and forms a part of the contracts between the corporation and the stockholders, and such a consolidation as is contemplated by the statute may afterwards be effected by a majority of the stockholders, or the per cent fixed by the charter or statute, against the dissent of the minority; 76

161 U. S. 646, 40 L. Ed. 838, rev'g 73 Fed. 933. Contra, Zimmer v. State, 30 Ark. 677.

Permission by the state to consolidate is not a contract but a mere license. Adams v. Yazoo & M. Val. R. Co., 77 Miss. 194, 60 L. R. A. 33, 28 So. 956, 24 So. 200, 317.

72 Central Railroad & Banking Co. v. State, 54 Ga. 401.

73 Pearsall v. Great Northern R. Co., 161 U. S. 646, 40 L. Ed. 838, 849, rev 'g 73 Fed. 933.

74 Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. Ed. 849.

75 Mowrey v. Indianapolis & C. R. Co., 4 Biss. 78, Fed. Cas. No. 9,891, and see § 1997, supra.

76 Sprague v. Illinois River R. Co., 19 Ill. 174; Norton v. Union Traction Co. of Indiana, 183 Ind. 666, 681, Ann. Cas. 1918 A 156, 110 N. E. 113; Bish v. Johnson, 21 Ind. 299; Sparrow v.

Evansville & C. R. Co., 7 Ind. 369.

A legal consolidation is binding on minority stockholders who do not consent thereto. Bonner v. Terre Haute & I. R. Co., 151 Fed. 985.

Where the per cent is not fixed by statute, a majority vote is sufficient to authorize a consolidation authorized by a statute in existence when the constituent companies were cre ated. Dady v. Georgia & A. Ry., 112 Fed. 838, 843; Norton v. Union Traction Co. of Indiana, 183 Ind. 666, Ann. Cas. 1918 A 156, 110 N. E. 113.

Under a statute granting to a railroad corporation power to sell its road or consolidate with another, the ma jority stockholders may control in making a sale. Hinds & Adams Counties v. Natchez, J. & C. R. Co., 85 Miss. 599, 107 Am. St. Rep. 305, 38

So. 189.

"The relation of a stockholder to

and one who purchases corporate stock after the passage of an act authorizing consolidation is bound by a consolidation effected by a vote of the per cent of stockholders fixed by the statute.77 On the other hand, if, at the time a corporation is created, there is no constitutional or charter provision or statute authorizing a consolidation, and there is no reservation of the right to amend or repeal the charter, then a consolidation cannot be effected without the consent of all the stockholders of the constituent corporations, since to allow a subsequent consolidation statute to have this effect would impair the obligation of the contracts between the corporation and the dissenting stockholders.78 And even when the legislature has reserved the power to alter, amend or repeal the charter of the corporation, it has been held that all the stockholders must consent to a consolidation if the consolidation works a radical change in the character or objects of the corporation,79

his corporation, to its officers and to his co-stockholders, is one of contract and of confidence. By the acceptance of his shares of stock he agrees to assume the liabilities and to discharge the duties imposed upon a stockholder by the law. The statutes, the charter and the by-laws of the corporation, as well as the settled law of the land at the time he takes his stock, are read into, and become a part of his agreement. The provision of the statutes of Missouri that a manufacturing corporation might be consolidated with another corporation whose objects and business were of the same nature, upon the consent of threefifths of the owners of its stock, was a part of the agreement of the complainant and a consolidation made by the officers and the owners of the requisite stock of his corporation by the faithful exercise of the powers thus granted was neither void in itself nor voidable at his option, because it was but the performance of the agreement which he made with them."' Jones V. Missouri-Edison Elec. Co., 144 Fed. 765, 770.

77 Mayfield v. Alton Ry., Gas & Electric Co., 198 Ill. 528, 65 N. E. 100, aff'g 100 Ill. App. 614.

78 United States. Clearwater V. Meredith, 1 Wall. 25, 17 L. Ed. 604; Mowrey v. Indianapolis & C. R. Co., 4 Biss. 78, Fed. Cas. No. 9,891.

Indiana. State v. Bailey, 16 Ind. 46, 79 Am. Dec. 405.

Kentucky. Botts v. Simpsonville & B. C. Turnpike Road Co., 88 Ky. 54, 2 L. R. A. 594, 10 S. W. 134.

Pennsylvania. Lauman v. Lebanon Valley R. Co., 30 Pa. St. 42, 72 Am. Dec. 685.

Wisconsin. Kenosha, R. & R. I. R. Co. v. Marsh, 17 Wis. 13.

Where the right to repeal or amend corporate charters has not been reserved, the legislature may not consolidate two corporations irrespective of the dissent of minority stockholders. The exercise of such power would be in violation of the doctrine of the Dartmouth College case. Spencer v. Seaboard Air Line R. Co., 137 N. C. 107, 119, 1 L. R. A. (N. S.) 604, 49 S. E. 96.

See, in this connection, Chap. 57,

supra.

79 Kenosha, R. & R. I. R. Co. v. Marsh, 17 Wis. 13.

As to the effect of a reserved right to alter, amend or repeal the charter, see Chap. 57, supra.

although the general rule is that reserved power to alter or amend the charter permits a consolidation as authorized by a subsequent statute without the assent of all the stockholders.80 So a constitutional provision that any corporation which shall thereafter accept or effect any amendment or extension of its charter shall be conclusively presumed to have thereby surrendered every non-repealable feature of its charter, and to have thereby agreed to be subject to future legislation, applies to legislation enacted after the creation of a corporation authorizing consolidation on a majority vote of the stockholders.81

In some states, it has been held that, under the power of eminent domain, the legislature may, when the public good so requires, authorize consolidation of a corporation against the dissent of stockholders, provided it makes provision for just compensation to them for their shares, whenever the corporation is of such a character that the legislature may delegate the power of eminent domain, which limits the rule to quasi public corporations.82

80 Pennsylvania College Cases, 13 Wall. (U. S.) 190, 20 L. Ed. 550; Bishop v. Brainerd, 28 Conn. 289; Hanna v. Cincinnati & Ft. W. R. Co., 20 Ind. 30; Hale v. Cheshire R. Co., 161 Mass. 443, 37 N. E. 307. See also note in 52 L. R. A. 369, 384. But see Mowrey v. Indianapolis & C. R. Co., 4 Biss. 78, Fed. Cas. No. 9,891; Botts v. Simpsonville & B. C. Turnpike Road Co., 88 Ky. 54, 2 L. R. A. 594, 10 S. W. 134.

Power reserved to amend or repeal corporate charters includes legislative power to authorize the consolidation of corporations as against dissenting stockholders, even though no consolidation was allowable at the time the corporation was created. Colby v. Equitable Trust Co., 124 N. Y. App. Div. 262, 108 N. Y. Supp. 978.

to alter, amend or repeal corporate charters. Winfree v. Riverside Cotton Mills Co., 113 Va. 717, 75 S. E. 309.

81 Winfree V. Riverside Cotton Mills Co., 113 Va. 717, 75 S. E. 309.

82 Black v. Delaware & R. Canal Co., 24 N. J. Eq. 455; Spencer v. Seaboard Air Line R. Co., 137 N. C. 107, 1 L. R. A. (N. S.) 604 with note, 49 S. E. 96, quoting Noyes, Intercorporate Relations, 51.

In discussing the means whereby railroad corporations can be authorized by the legislature to make a valid consolidation, although the cor porations existed and the stock had been issued prior to such enactment, and at a time when no constitutional or statutory provision reserved to the state the right to repeal or amend corporate charters, the court said: "The legislature in the exercise of its powers confers upon the majority of the stockholders the power to solidate with the other constituent companies and accept in consideration therefor such number of shares in the new or consolidated corporation

The fact that a company was incorporated before the passage of the statute permitting a consolidation on a vote of the majority of stockholders does not preclude a consolidation thereunder and without a unanimous vote of the stockholders, where the power has been reserved by the state

con