127 Ga. 392 | Ga. | 1907
(After stating the foregoing facts.)
Some of the authorities say that where provision has not been made for paying existing debts and liabilities of one of the constituent companies, the consolidated company is liable “at least to the extent of the assets of the absorbed corporation.” This term of expression was used in the Tompkins case, supra, and was based on a quotation from 1 Thompson on Corporations, § 375, in which it is said: “Where several corporations are united in qne, and the .property of the old companies is vested in the new, the latter is liable in equity for the debts of the former, at least to the extent of the property received from them; and if it is also liable at law, the legal remedy is not exclusive.” This mode of expression has been quite extensively copied, and I should hesitate to criticise even indirectly so able and learned a writer as Judge Thompson, and some-of the able judges who have adopted a similar formula of words. But what is the exact meaning of the expression that the consolidated company is liable for the debts or torts of its constituent companies, “at least to the extent of the property received from them?” The use of'the qualifying words “at least” shows that this was not intended as limiting entirely the liability. Those words indicate a minimum of liability. And where it is so carefully stated that this is the minimum, it can hardly be contended, with reason, that it was also the maximum. If the consolidated company is liable “at least” to this extent, how far is it liable at most? It will be noticed also that the learned author immediately follows the statement referred to by adding: “and if it is also liable at law, the legal remedy is not exclusive,” thus indicating the view that there might be a legal remedy as well as an equitable one. This section, which was a statement of the result of certain authorities, should be construed in the light of the other sections already referred to, and of the statement at the close of section 373, where, after discussing the decision in Smith v. Chesapeake etc. Co., 14 Peters (U. S.), 45, 47, the author adds: “Modern holdings would, it is believed, on the general implications of the law, allow a party standing in such & position as the complainant in this case did, to bring a direct action against the consolidated company, and recover a judgment in personam.” Viewed in the light of the various sections and of the authorities from which they are derived, some of which affirm the
The provision in our statute authorizing a consolidation “upon such terms as may be agreed upon” was construed in Tompkins v. Augusta Southern R. Co., supra, and was held not to authorize “an agreement between two companies, the effect of which would be to transfer to one of them all the property and franchises, and to invest it with all the rights, privileges and immunities of the other, free from all the liabilities, duties and obligations which the latter company owed to private individuals or to the public at large.” In the case of Hawkins v. Central R. Co., 119 Ga. 159, supra, the distinction between a sale of property by one corporation to another and a merger is pointed out. The case now under consideration is one of consolidation and merger, not of sale.
Judgment affirmed.