Houston & T. C. R. R. Co. v. Shirley

Citations

• 54 Tex. 125
• 1880 Tex. LEXIS 136

Syllabus

<p>1. Railway company—Contract — Consolidation.—Pending a suit begun by appellee against the Waco & N. W. Railway Company, July 16, 1870, the Houston & Texas C. R. R. Co. entered into a contract with the former road to aid in its construction. For a debt thus contracted the Waco & M. W. R. R. Co. was sold under a deed of trust given to the Houston & T. C. R. R., and the latter road, at the sale in February, 1873, became the purchaser of the property and franchises of the Waco & N. W. R. R. Afterwards, in May, 1873, an act of the legislature was passed for the merger of the two roads, making the sold-out road a part of the purchasing road. Afterwards, in January, 1877, the Houston & T. C. R. R. was made a party defendant, charging that the contract between the roads was illegal, fraudulent and ultra vires, and seeking to make the purchasing road liable for the debts of the Waco & 1ST. W. R. R. Held—</p> <p>1. Ordinarily, a consolidated corporation, for the purpose of answering for the liabilities of the old corporations, is deemed the same as each of its constituents, and may be sued under its new name for their debts as if no change had been made in the name or organization of the original corporation; but this rule is restricted to voluntary consolidations.</p> <p>3. The foundation of the liability of a consolidated corporation for the debts and liabilities of the constituent corporations must rest on agreement, either express or implied.</p> <p>3. The act of merger was not passed by the legislature, or accepted in contemplation of an agreement between the companies, but because the trust sale had divested the Waco & N. W. R. R. Co. of all its property and franchises, and that the purchaser, being a corporation, needed for that reason only, legislative sanction to authorize it to operate the road.</p> <p>4. If the Houston & T. O. R. R. Oo. exceeded its powers in acquiring the property, it was a consummated transaction and could be impeached, if at all, for that rea