[1] It has been frequently determined by Imanded for the character of shipment as the federal courts, as well as this court, specified in the schedule of rates filed with since the passage of the Interstate Commerce the Commission, and the fact that a mistake Act, that both shipper and carrier are bound had been made in the naming of that rate by by the schedule of rates in the report filed the agent at Hot Springs cannot relieve eiwith the Commission, and that to charge any ther party from the obligation imposed upon less rate, whether through mistake or other- them to perform their respective duties in wise, would be giving a preferential one, the premises. Having the right, as well as and therefore illegal and void. Chesapeake being under a legal duty, to collect the bal& Ohio Ry. Co. v. Maysville Brick Co., 132 ance due on the shipment of $85.80, the deKy. 643, 116 S. W. 1183; Illinois Central fendant Louisville & Nashville Railroad R. R. Co. v. Henderson Elevator Co., 138 Company had a lien upon the shipment for Ky. 220, 127 S. W. 779; Id., 226 U. S. 441, that balance, and it could decline to deliver 33 Sup. Ct. 176, 57 L. Ed. 290; Louisville & the horses until it was paid. Boggs & RusNashville R. R. Co. v. Coquillard Wagon sell v. Martin, 13 B. Mon. 239; Thomas v. Works, 147 Ky. 530, 144 S. W. 1080; Louis- Frankfort & C. Railroad Co., 116 Ky., 879, ville & Nashville R. R. Co. v. Allen, 152 Ky. 76 S. W. 1093, 25 Ky. Law. Rep. 1051; 10 145, 153 S. W. 198; Gulf, Colorado & Santa Corpus Juris, p. 460; and a number of the Fé Ry. Co. v. Hefley, 158 U. S. 98, 15 Sup. cases supra. This being the condition of the Ct. 802, 39 L. Ed. 910; Texas & Pacific Ry. law, the defendants were clearly within their Co. v. Mugg, 202 U. S. 242, 26 Sup. Ct. 628, legal right in declining to deliver the ship50 L. Ed. 1011; Texas & Pacific Ry. Co. v. Abi- ment until the balance of the freight bill was dene Cotton Oil Co., 204 U. S. 426, 27 Sup. Ct. paid. Indeed, if they had not collected that 350, 51 L. Ed. 553, 9 Ann. Cas. 1075; Texas bill they would have subjected themselves & Pacific Ry. Co. v. Cisco Oil Mill, 204 U. to a penalty for discrimination, and they S. 449, 27 Sup. Ct. 358, 51 L. Ed. 562; Kansas were not bound to part with possession of the City Southern Ry. Co. v. Albers Commission shipment and thereby release their lien by Co., 223 U. S. 573, 32 Sup. Ct. 316, 56 L. Ed. accepting the promise or other obligation of 556; Illinois Central Railroad Co. v. Hender- the plaintiff to subsequently pay it. son Co., 226 U. S. 441; 33 Sup. Ct. 176, 57 L. Ed. 290: Kansas Southern Ry. Co. v. Carl, 227 U. S. 639, 33 Sup. Ct. 391, 57 L. Ed. 683; Pennsylvania R. R. Co. v. International Coal Co., 230 U. S. 187, 197, 33 Sup. Ct. 893, 57 L. Ed. 1446, Ann. Cas. 1915A, 315; Boston & Maine R. R. Co. v. Hooker, 233 U. S. 97, 110-113, 34 Sup. Ct. 526, 58 L. Ed. 868, L. R. A. 1915B, 450, Ann. Cas. 1915D, 593; George N. Pierce Co. v. Wells Fargo & Co., 236 U. S. 278, 284, 35 Sup. Ct. 351, 59 L. Ed. 576; Louisville & Nashville Railroad Co. v. Maxwell, 237 U. S. 94, 35 Sup. Ct. 494, 59 L. Ed. 853, L. R. A. 1915E, 665; and Southern Railway v. Prescott, 240 U. S. 632, 36 Sup. Ct. 469, 60 L. Ed. 836.

[2, 3] The failure to post a copy of the rate in the stations of the carrier will not relieve its binding effect upon each of the parties to the contract of shipment. Texas & Pacific Ry. Co. v. Mugg; Boston & Maine Railroad Co. v. Hooker; Louisville & Nashville Railroad Co. v. Allen, supra; and Chicago & Alton Railroad Co. v. Kirby, 225 U. S. 155, 32 Sup. Ct. 648, 56 L. Ed. 1033, Ann. Cas. 1914A, 501. Neither is it necessary for the shipper to have knowledge at the time of the shipment of the rate fixed in the schedule filed with the Commission, since he will conclusively be presumed to have such knowledge arising from the filing of the schedule with the Commission. Kansas Southern Ry. Co. v. Carl, and Louisville & Nashville Railroad v. Maxwell, supra.

[4] From these authorities it is clearly established that in this case it was the duty of the carrier to collect, and the duty of the shipper (plaintiff) to pay, the freight de

It is insisted, however, that under the rule laid down in Hutchinson on Carriers, vol. 2, § 646, and the case of Kelly v. Adams Express Co., 134 Ky. 208, 119 S. W. 747, it was the duty of the defendant Louisville & Nashville Railroad Company, after being informed that the horse Bookie was sick, to do for him that which might reasonably be expected of a prudent and careful person, even to the extent of incurring expenses in relieving, looking after, and caring for him by taking him from the car and putting him in a place where he could have been more conveniently treated and better cared for. But under the facts of this case the doctrine of the authorities relied on has no application, for it does not contemplate an injury growing out of the failure of the shipper to perform some legal duty as is the case here. It was within the power of plaintiff to obtain immediate possession of his horses and to unload them at once upon their arrival by paying the balance of the freight due. He had an agent and representative present who had come from Hot Springs, Ark., to Louisville, Ky., with the horses. And the fact, if it be a fact, that such agent did not have the money to make the payment at the time furnishes no excuse. It was plaintiff's duty to furnish him the money, since plaintiff was presumed to know what the legal rate was, and to know that it would be unlawful for the shipment to be delivered to him or his agent without the payment of that legal rate. But counsel for plaintiff in his brief says:

"If the defendants, by the negligent and erwhile being straightened out, resulted in delay roneous quotation, produced a situation which, to which the death of this animal may be fair

ly and reasonably attributed, we are aware of | was paid on that date to the Commonwealth no principle on which they can escape liability." Company, with the understanding and agreeThe trouble with this contention is that it ment that it should be immediately distributignores the presumed knowledge of plaintiff ed among the then existing stockholders of with reference to the rate, and it assumes the Commonwealth Company, and pursuant that he was privileged to take all the time he to this agreement the purchase money was desired to "straighten out" the situation, immediately distributed among the stockholdwhen it was his legal duty, as we have seen, ers of the Commonwealth Company, and their to pay the balance of the freight, which, if shares of stock thus purchased and paid for done, would have immediately "straightened were placed in the hands of a trustee for the out" the situation so that no delay in the un- benefit of the Kentucky Company. It was loading of the shipment would have resulted. further agreed, as a part of the transaction, It was therefore plaintiff's fault that the that a board of directors for the Commonstock was kept in the car from the time of wealth Company should at once be chosen by its arrival on the afternoon of April 13th un- the Kentucky Company, and that they should til the next day. Since this is the only dere- continue in office until the Commonwealth liction charged against either of the defend- Company transferred and conveyed its propants in the petition, and since this, as we erty to the Kentucky Company. Pursuant have found, was justifiable, there was no oth- to this agreement, a board of directors, er course open to the lower court but to give friendly to and really named by the Kentucky the peremptory instruction complained of. Company, was elected by the stockholders of Wherefore the judgment must be, and it is, the Commonwealth Company, or by the trusaffirmed. tee into whose custody the stock had been placed. On December 8, 1899, the Commonwealth Company, or rather the directors that had been selected in the manner stated, executed a deed conveying to the Kentucky Company all the property, rights, and privileges of the Commonwealth Company, pursuant to the contract of sale and purchase made in March, 1899, but, in the meanwhile, the distillery plant of the Commonwealth Company was operated by the Kentucky Company in the same manner that it had been prior to March, 1899.

(181 Ky. 90)

KENTUCKY DISTILLERS' & WARE-
HOUSE CO. v. WEBB'S EX'R.

(Court of Appeals of Kentucky. June 11, 1918.) 1. CORPORATIONS 590(3) PURCHASE OF OTHER CORPORATIONS LIABILITY FOR DEBTS.

If one corporation purchases the property of another, it is not liable to the other's creditors for its debts.

2. CORPORATIONS 590(3) PURCHASE OF OTHER CORPORATIONS.

Where two corporations agreed that, on payment by one of them of a specified sum to be distributed to the other's stockholders, the stock should be delivered in escrow, and held until a board of directors chosen by the purchasing corporation for the selling corporation turned over the assets to the purchasing corporation, the sale was of the stock belonging to the stockholders, and not the assets of the corporation, and the purchasing corporation, having given no consideration to the selling corporation for its assets, was liable to a judgment creditor of the selling corporation.

Appeal from Circuit Court, Fayette County. Action by the executors of Hettie R. Webb, deceased, against the Kentucky Distillers' & Warehouse Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Wm. Marshall Bullitt, Bruce & Bullitt, and Keith L. Bullitt, all of Louisville, for appellant. J. P. Johnston and S. S. Yantis, both of Lexington, for appellee.

In August, 1899, the appellee, Hettie R. Webb's executor, filed a suit against the Commonwealth Company to recover damages sustained by a nuisance committed by it during the five years preceding August, 1899, and in October, 1901, there was a judgment in favor of the executor against the Commonfavor of the executor against the Commonwealth Company for $2,500. Execution issued on this judgment against the Commonwealth Company, which was returned "No property found," and thereafter the executor brought this suit against the Kentucky Company to recover from it the amount of the judgment. The lower court decided in favor of the executor, and the Kentucky Company prosecutes this appeal.

[1] Counsel for the executor admit that if the Kentucky Company, for a bona fide consideration paid to the Commonwealth Company, or, in other words, $85,000, had purCARROLL, J. In this case there is no evi- chased from the Commonwealth Company dence, and the only pleadings are a petition its property in March, 1899, it would not have and the answer; apparently counsel on both been liable for the debts of the Commonsides agree as to the facts, but differ as to wealth Company; and about this there can be the conclusion to be drawn from them. The no doubt, because a corporation has exactly facts, as we understand them, are as follows: the same right to sell its property as a natuOn March 16, 1899, the Kentucky Company, ral person has, and the purchaser of the propa corporation, purchased from the Common- erty of a corporation occupies towards the wealth Company a corporation, its distillery creditors of the selling corporation exactly and all the rights and privileges appertaining the same attitude as the purchaser from an thereto for the sum of $85,000, which sum individual would occupy toward the creditors

of the individual. But it is contended on be- among its stockholders, as the directors had half of the executor:

"That the transaction referred to was not a purchase by the Kentucky Company of the assets of the Commonwealth Company; that the Kentucky Company paid no consideration to the Commonwealth Company, which became an asset for the payment of its creditors; but, on the other hand, the $85,000 paid by the Kentucky Company was in fact paid to the stock-ny any obligations or liabilities that would holders of the Commonwealth Company, because it was agreed by the parties to the transaction 'that immediately upon the payment thereof the same should be immediately distributed' among the then existing stockholders of the Commonwealth Company, and that, in return for the $85.000 so paid to the stockholders, the Kentucky Company acquired the control and became the beneficial owner of the stock of the Commonwealth Company, and as such owner continued the corporate existence of the Commonwealth Company, and operated its plant until it saw fit to cause all the assets of the Commonwealth Company to be conveyed to it for no other consideration than the $85,000 paid by it to the stockholders, thus stripping the Commonwealth Company of all of its assets without paying plaintiff's debt, and leaving it a mere shell."

the assets and property of the Commonwealth Company, not, however, by virtue of a purchase from the Commonwealth Company as a corporate entity, but by virtue of its purchase of all the shares of stock issued by it. If it had paid $85,000 to the Commonwealth Company as a corporate entity, this $85,000 would have been a part of the assets of the Commonwealth Company, and be subject to the payment of its debts; but, when it paid to the stockholders of the Commonwealth Company $85,000 for their stock, nothing was added to the assets of the Commonwealth Company as a corporation by this payment. The Commonwealth Company was no better off than it was before the $85,000 was paid. The Kentucky Company, by the transaction, merely became the owner of the stock in the Commonwealth Company, and by virtue of this ownership was enabled to, and did, in December, 1899, have conveyed to it, without any consideration then or at any time paid to the Commonwealth Company as a corporation, the assets and property of the Commonwealth Company.

& Catlettsburg Street Railway Company, conveying to the Camden Interstate Railway Company all of its property and franchises in consideration of $1. After this deed was made, the stock of the Camden Interstate Railway Company was delivered to the stockholders of the Ashland & Catlettsburg Street Railway Company who had not sold to Camden share for share as had been agreed. In holding the Camden Interstate Railway Company liable for the judgment that Lee had obtained against the Ashland Street Railway Company, the court said:

"The sum of the transaction was that Camden either owned in his own right all the stock of the street railway company by way of purchase, or controlled it under contracts by which the stockholders agreed to take stock in the new company for the stock which they held in the old, and, while he thus controlled all the stock in the street railway company, he caused that company to deed all of its property and franchises to the Camden Interstate Railway Company, and thus the stockholders in the street railway company became stockholders in the interstate railway company. In this way the stockholders in the street railway company put all of their property and franchises in the hands of the interstate railway company, and became stockholders in that company in lieu of the street railway company. By this means the interstate railway company swallowed up or absorbed the street railway company. While there was no stipulation in the deed that the new company should answer for the liabilities of the old, the law will not allow the stockholders in a corporation thus to change the name in which their property is held and defeat the claims of creditors. The rule is that, where one corporation goes entirely out of existence by being merged into another, the liabilities of the old corporation are enforceable against the new one, just as if no change had been made.

It is true that the $85,000 was paid to the Commonwealth Company as a corporation, but it was paid with the distinct agreement that it should be immediately distributed among the stockholders, and it was so immediately distributed. This being so, we fail to see that it makes any difference that the money was paid directly to the corporation, in place of being paid directly to the stockholders, as the substantial effect of the transaction was exactly the same as if the $85,000 had been distributed by the Kentucky Company among the stockholders of the Com-controlling the stock of the old company, transmonwealth Company in place of being paid to the Commonwealth Company for immediate distribution by it of the sum paid to its stockholders.

* *The. sum of it here was that Camden,

ferred its property to the new, and issued the stock in the new to take the place of that in the stock of the old company; it was simply an the old company. This was not a purchase of absorption of the old company into the new, and the new became answerable for all the liabiliwill not be heard now to say that the assets of that company were worthless, or that the stock, which was selling at 50 or 60 cents on the $1, was of no value.”

Having determined that this is the prop-ties of the old company, which it absorbed, and er construction of the facts, there is little difficulty about the law of the case. A case presenting facts quite analogous to the facts in this case, and in which the purchasing corporation was held liable for the debts of the selling corporation is Camden Interstate Railway Company v. Lee, 84 S. W. 332, 27 Ky. Law Rep. 75. In that case Lee brought suit against the Ashland & Catlettsburg Street Railway Company to recover damages for injuries sustained by him, in which suit he recovered a judgment for $1,000, upon which execution issued and was returned "No property found." While this suit was pending, J. N. Camden bought a controlling interest in the stock of the railway company, and made an arrangement with the other stockholders by which they agreed to take stock in the Camden Interstate Railway Company share for share for the stock they held in the Ashland & Catlettsburg Street Railway Company. All the stock in the street railway company being thus controlled

Another case in which a purchasing corporation was held liable is Harbison-Walker Refractories Co. v. McFarland, Adm'r, 156 Ky. 44, 160 S. W. 798. The administrator of McFarland had a judgment against the Harbison & Walker Company, Southern Department, in 1908, and an execution having been returned "no property found" he brought suit against the Harbison-Walker Refractories Company, seeking to compel it to pay the judgment. It further appears that the Refractories Company issued its stock to the stockholders of the Harbison & Walker Company in lieu of the stock they owned in that company, and thereby secured a conveyance of all the property and assets of the Harbison & Walker Company, leaving the Harbison & Walker Company without any assets or property out of which debts against it could