solidation of particular corporations, such as railroads, street railroads, banks, or the like.23 When a statute authorizes the consolidation of particular corporations only, or of corporations of a particular class only, it does not apply to other corporations, or corporations of a different class. A statute authorizing corporations theretofore organized to consolidate does not authorize the consolidation of corporations afterwards organized.24 If it merely permits "manufacturing" companies 25 to consolidate, it is held that this permits a consolidation of electric light. companies 26 but not of ice companies merely collecting and selling natural ice.27 Generally, an act authorizing railroad companies to consolidate applies to and includes street railroads,28 unless there is something to show an intention to exclude them.29 Special statutes often authorize and govern the consolidation or merger of railroad companies,30 companies operating street rail 23 For partial list of statutes, compiled in 1900, see note in 52 L. R. A. 369, 374. 24 Shelbyville & R. Turnpike Co. v. Barnes, 42 Ind. 498. 25 What are manufacturing companies, see § 88, supra. 26 Beggs v. Edison Elec. Illuminating Co., 96 Ala. 295, 38 Am. St. Rep. 94, 11 So. 381. 27 People v. Knickerbocker Ice Co., 99 N. Y. 181, 1 N. E. 669. 28 In re Washington St., A. & P. R. Co., 115 N. Y. 442, 22 N. E. 356, aff'g 52 Hun (N. Y.) 311, 5 N. Y. Supp. 355. 29 Philadelphia v. Thirteenth & F. Streets Co., 1 Leg. Gaz. Rep. (Pa.) 163. 30 Bonner v. Terre Haute & I. R. Co., 151 Fed. 985, construing Indiana statute as not confined to intersecting roads; Dady v. Georgia & A. Ry., 112 Fed. 838, Georgia statute; National Bank of Wilmington & Brandywine v. Wilmington, N. C. & S. R. Co., 9 Del. Ch. 258, 81 Atl. 70; Bohmer v. Haffen, 161 N. Y. 390, 55 N. E. 1047, aff'g 35 N. Y. App. Div. 381, 54 N. Y. Supp. 1030. Often the power to consolidate is conferred only upon lines whose roads form a connecting and continuous line. Hancock v. Louisville & N. R. Co., 145 U. S. 409, 36 L. Ed. 755; Livingston County v. First Nat. Bank of Portsmouth, 128 U. S. 102, 32 L. Ed. 359; Central Railroad & Banking Co. v. Macon, 43 Ga. 605, 646; State v. Atchison & N. R. Co., 24 Neb. 143, 8 Am. St. Rep. 164, 38 N. W. 43; Wallace v. Long Island R. Co., 12 Hun (N. Y.) 460. What are connecting and continuous lines, which are authorized to consolidate, has often been before the courts for determination. Georgia Pac. Ry. Co. v. Gaines, 88 Ala. 377, 7 So. 382; Raff v. Darrow, 184 Ind. 353, 111 N. E. 189; Smith v. Cleveland, C., C. & St. L. R. Co., 170 Ind. 382, 81 N. E. 501; Black v. Delaware & R. Canal Co., 22 N. J. Eq. 130; State v. Vanderbilt, 37 Ohio St. 590. According to the weight of authority, an act authorizing the consolidation of railroad companies owning connecting lines, or whose roads are so located as to permit passage of cars continuously over each other's lines, does not authorize consolidation of companies whose roads are connected by leased lines only. State v. roads,31 gas companies,32 banking,33 trust,34 and insurance companies,35 building and loan associations,36 and the like. So there are special statutes in some states as to consolidation, applicable only to membership corporations.37 Vanderbilt, 37 Ohio St. 590; East Line & R. River Ry. Co. v. State, 75 Tex. 434, 12 S. W. 690. Compare Black v. Delaware & R. Canal Co., 22 N. J. Eq. 130. Such a statute does not apply to corporations owning and operating competing or parallel roads. State v. Atchison & N. R. Co., 24 Neb. 143, 158, 8 Am. St. Rep. 164, 38 N. W. 43; State v. Vanderbilt, 37 Ohio St. 590. See Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. Ed. 849. Statutes authorizing railroad companies having a continuous line to consolidate include companies whose line is continuous by means of intervening railroad bridge owned by another company. New York Cent. & H. River R. Co. v. Yonkers, 103 N. Y. Supp. 252. Parallel § 4681, infra. or competing lines, see 31 Raff v. Darrow, 184 Ind. 353, 111 N. E. 189; New Jersey & H. River R. Co. v. American Electrical Works, 82 N. J. L. 391, 81 Atl. 989, aff'g 81 N. J. L. 34, 78 Atl. 670; In re Trenton St. Ry. Co. (N. J. Eq.), 47 Atl. 819. Whether street railway company was actually engaged in operating" its road, so as to be entitled to consolidate, see Norton v. Union Traction Co. of Indiana, 183 Ind. 666, Ann. Cas. 1918 A 156, 110 N. E. 113, followed in Raff v. Darrow, 184 Ind. 353, 111 N. E. 189. "Operating" company, as term is used in statute authorizing such companies to consolidate, refers to the road rather than the corporation. Norton v. Union Traction Co. of Indiana, 183 Ind. 666, Ann. Cas. 1918 A 156, 110 N. E. 113. A street railroad company organized under the general railroad act may, it seems, consolidate with another street railway company. In re Trenton St. Ry. Co. (N. J. Eq.), 47 Atl. 819. 32 People v. People's Gaslight & Coke Co., 205 Ill. 482, 98 Am. St. Rep. 244, 68 N. E. 950; Attorney General v. Consolidated Gas Co., 124 N. Y. App. Div. 401, 108 N. Y. Supp. 823. Legislative authority to buy stock in other corporations, or to merge corporate rights with those of other corporations, was held to authorize a consolidation of a gas light company, a heating company, and an electric company, the three operating in the same territory. Motter v. Kennett Tp. Elec. Co., 212 Pa. 613, 62 Atl. 104. 33 Colby v. Equitable Trust Co., 124 N. Y. App. Div. 262, 108 N. Y. Supp. 978; Bank of Long Island v. Young, 101 N. Y. App. Div. 88, 91 N. Y. Supp. 849. The National Bank Act authorizes consolidation of national banks. Bonnet v. First Nat. Bank, 24 Tex. Civ. App. 613, 60 S. W. 325. 34 Colby v. Equitable Trust Co., 124 N. Y. App. Div. 262, 108 N. Y. Supp. The consolidation of religious corporations is also often expressly provided for by statute; 38 but in all matters ecclesiastical the decision of the ecclesiastical tribunals is generally held to be binding on the courts.39 This question is considered more in detail in works relating to religious societies, which should be consulted. § 4678. Statutory prohibitions-In general. Constitutional and statutory prohibitions of certain consolidations exist in many of the states, including prohibitions of consolidation of parallel and competing companies, 40 or of rival or competing companies in general. So a consolidation may be invalid because in violation of federal or state anti-trust laws.42 However, a consolidation of gas companies is not necessarily invalid as creating a monopoly.43 In some states, the consolidation of foreign and domestic corpora tions, or at least certain classes of such corporations, is expressly forbidden.44 No. 39, Order Sons of Italy, Inc., 166 38 See Sharp v. Bonham, 213 Fed. 660; Helm v. Zarecor, 213 Fed. 648; Hayes v. Manning, 263 Mo. 1, 172 S. W. 897; Westminster Presbyterian Church of West Twenty-Third St. v. Trustees of Presbytery of New York, 211 N. Y. 214, 105 N. E. 199. 39 First Presbyterian Church of Lincoln v. First Cumberland Presbyterian Church of Lincoln, 245 Ill. 74, 19 Ann. Cas. 275, 91 N. E. 761; Ramsey v. Hicks, 174 Ind. 428, 30 L. R. A. (N. S.) 665, with note, 92 N. E. 164, 91 N. E. 344; Brown v. Clark, 102 Tex. 323, 24 L. R. A. (N. S.) 670, 116 S. W. 360. The construction placed upon the provisions of the discipline of the Methodist Episcopal Church by the bishops and ecclesiastical authorities thereof is that two or more churches may be consolidated into one by the bishop presiding at an annual conference, and the trustees thereof succeed the trustees of the constituent churches. This course of procedure is the recognized practice of the church. In the case at bar three churches were so united, two of them unincorporated and one incorporated. The action of VII Priv. Corp.-63 the bishop in consolidating them was held binding on the courts. Trustees of Trinity M. E. Church of Norwich v. Harris, 73 Conn. 216, 50 L. R. A. 636, 47 Atl. 116. 40 See § 4681, infra. For list of constitutional and statutory provisions (compiled in 1900) forbidding consolidation of parallel and competing companies, see note in 52 L. R. A. 369, 373, 376. 41 Watson v. Harlem Nav. Co., 52 How. Pr. (N. Y.) 348. The consolidation of corporations engaged in the same general line of business is not necessarily against public policy, or prohibited by a statute providing that no stock corporation shall combine" with any other corporation for the prevention of competition. Cameron v. New York & M. V. Water Co., 62 Hun (N. Y.) 269, 16 N. Y. Supp. 757, 133 N. Y. 336, 31 N. E. 104. 42 See supra, chapter on Monopolies. 43 In re Consolidated Gas Co. of New York, 56 N. Y. Misc. 49, 106 N. Y. Supp. 407, aff'd 124 N. Y. App. Div. 401, 108 N. Y. Supp. 823. 44 See, generally, § 4814 et seq., in fra. Whether statutes forbidding "consolidation" of corporations, such as railroad companies, under certain circumstances, as where they are parallel and competing roads, extends to a mere sale or lease, has already been noted.45 § 4679. A of Limitation as to number of constituent companies. statute in terms authorizing the consolidation of "two" corporations into a new corporation does not mean that no greater number corporations than two can consolidate, but authorizes, by intend ment, the consolidation of two or more corporations.46 So a statute authorizing the consolidation of "any two corporations" etc., per mits a consolidation although one of the constituent companies is self a consolidated corporation.47 A proviso in a statute that no more than two corporations "then existing" shall be consolidated into one does not, of course, prevent the consolidation of more than two corporations thereafter organized.48 it. § 4680. Right to combine as limited to corporations of the same or a similar nature. In New Jersey, the right to consolidate is limited by statute to corporations organized to carry on "any kind of business of the same or a similar nature"; and it is held thereunder that the nature of the business is to be determined by reference to the charter or certificate of incorporation,49 and that attempted consolidation of the United States Leather Company, whose primary object was to manufacture and sell leather, lumber an 48 Chicago & W. I. R. Co. v. Heidenreich, 254 Ill. 231, 235, Ann, Cas. 1913 C 266, 98 N. E. 567. To same effect, see Barrows v. People's Gaslight & Coke Co., 75 Fed. 794. 49 Colgate v. United States Leather Co., 75 N. J. Eq. 229, 19 Ann. Cas. 1262, 72 Atl. 126. "It is not the business in fact carried on, but the business for which the two are organized, that determines under section 104 the right to merge. American Malt Corporation v. Board of Public Utility Com'rs, 86 N. J. L. and belting, with the Central Leather Company, whose charter gave it much more extensive powers than those of the former company, was unauthorized.50 In other words, under this statute, a corporation. whose charter confers on it more extensive primary powers than does the charter of the other company cannot be consolidated with it.51 However, it is held under such statute that it is immaterial that one corporation has the added charter power to purchase and hold stock in the other company, especially where that power to hold stock in another company is also conferred upon corporations generally by a statute, and it is immaterial that one company is a holding company.52 In New York, under the Memberships Corporations Law authorizing the consolidation of corporations incorporated "for kindred purposes," it is held that a Y. W. C. A. may be consolidated with a nonsectarian association whose objects, as stated in its charter, are "the amelioration of the condition and the promotion of the interests of young women. 153 The construction put on a Louisiana statute of this class is set forth in the note below.54 § 4681. - Parallel or competing lines. The legislature may, and in most of the states has, prohibited the consolidation of parallel or competing lines,55 and in some states the prohibition is contained in 50 Colgate v. United States Leather Co., 75 N. J. Eq. 229, 19 Ann. Cas. 1262, 72 Atl. 126. 51 Copeland v. United Shoe Machinery Co., 84 N. J. Eq. 276, 94 Atl. 404. "The acts authorizing consolidation neither permit nor contemplate that a change of the objects of incorporation is to be accomplished by means of a consolidation agreement," which would be the result if a company having lesser powers should be merged into a company having greater powers. Colgate v. United States Leather Co., supra. V. 52 American Malt Corporation Board of Public Utility Com'rs, 86 N. J. L. 668, 92 Atl. 362. 53 But in a dissenting opinion by Justice Howard, he contends that a nonsectarian body cannot be said to be kindred to a sectarian association, and relies upon a provision in the agreement of consolidation that membership in some protestant evangelical church shall be a qualification for membership. In re Young Women's Ass'n City of Troy, 169 N. Y. App. Div. 734, 155 N. Y. Supp. 838. 54 A statute of Louisiana authorizing the consolidation of business or manufacturing corporations whose objects and business are of the same nature was held not to authorize the consolidation of two corporations, the life of one of which was to terminate at the commencement of the life of the other. New Orleans Gaslight Co. v. Louisiana Light & Heat Producing & Manufacturing Co., 11 Fed. 277. But the contrary was held on appeal in 115 U. S. 650, 29 L. Ed. 516. 55 Pearsall v. Great Northern R. Co., 161 U. S. 646, 40 L. Ed. 838, rev'g 73 |