statute has been passed permitting or regulating consolidation of a domestic with a foreign corporation. A common provision as to consolidation of railroad companies is as follows: "If any railroad, telegraph, telephone, express, or other corporation or company organized under any of the laws of this State, shall consolidate by sale or otherwise with any railroad, telegraph, telephone, express or other corporation organized under any of the laws of any other State or Territory, or of the United States, the same shall not thereby become a foreign corporation, but the courts of this State shall retain jurisdiction over that part of the corporate property within the limits of the State in all matters that may arise as if said consolidation had not taken place.'

11 87

In New York is this provision:

"Any domestic stock corporation and any foreign stock corporation authorized to do business in this State lawfully owning all the stock of any other stock corporation organized for or engaged in business similar or incidental to that of the possessor corporation may file in the office of the Secretary of State, under its common seal, a certificate of such ownership, and of the resolution of its board of directors to merge such other corporation, and thereupon it shall acquire and become and be possessed of all the estate, property, rights and privileges and franchises of such other corporation, and they shall vest in and be held and enjoyed by it as fully and entirely and without change or diminution as the same were before held and enjoyed by such other corporation, and be managed and controlled by the board of directors of such possessor corporation, and in its name, but without prejudice to any liabilities of such other corporation or the rights of any creditors. thereof." 88

And the Virginia statute is as follows: "Except [in the case

1903, ch. 121, §§ 44, 45; N. Y. Bus. Corp. L. § 8, amended 1901, ch. 520; Pa. 1901, Act No. 216; Utah Rev. Stat. § 340; Wyo. Const. Art. 10, § 8. 87 Colo. Stat. § 609; Mo. Const. Art. 12; Mont. Civ. Code, § 524. 88 N. Y. Stock Corp. L. § 58, amended 1902, ch. 98.

of railroads and telegraph companies] any corporation organized, or to be organized, under any law, or laws, of this State may merge or consolidate into a single corporation with any other corporation organized for the purpose of carrying on the same or a similar business under the laws of this or any other State of the United States, which said consolidated corporation shall, upon the payment of a proper charter fee, thereby become a domestic corporation of this State and be subject to its laws, and to the jurisdiction of its courts, and may be either one of said merging or consolidating corporations, or a new corporation to be formed by means of such merger or consolidation, so that by virtue of this act, and the proceedings had pursuant thereto, such corporations shall be consolidated and merged, so that all the property, rights, franchises, and privileges by law vested in such corporation so merged or consolidated shall be transferred to and vested in the corporation into which such consolidation or merger shall be made."

The directors of the corporations enter into an agreement settling the terms of the consolidation. This is submitted to a meeting, duly notified, of the stockholders of each corporation, and if accepted by a majority of the stock of each corporation a certificate to that effect shall be filed with the Secretary of the Commonwealth. A dissatisfied stockholder giving notice within three months shall be given the value of his stock the day before the vote. Upon perfecting the merger, the several corporations shall be taken to be one corporation.89

§ 785. Statutory provisions for holding corporations. Authority is given in a few States to hold the stock of a foreign corporation and thus control its action.

"Any corporation may purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bonds, securities or evidences of indebtedness created by any other corporation or corporations

89 Va. Corp. Supp. ch. 5, §§ 40-42.

of this or any other state, and while owner of such stock may exercise all the rights, powers and privileges of ownership, including the right to vote thereon." 90 Similar provisions may

be found in New York."1

In Georgia and New York this power is restricted as follows: "The general assembly of this State shall have no power to authorize any corporation to buy shares or stock in any other corporation in this State, or elsewhere, or to make any contract or agreement whatever with any such corporation which may have the effect or be intended to have the effect to defeat or lessen competition in their respective businesses, or to encourage monopoly; and all such contracts and agreements shall be illegal and void." 92

"No domestic stock corporation and no foreign corporation doing business in this State shall combine with any other corporation or person for the creation of a monopoly or the unlawful restraint of trade or for the prevention of competition in any necessary of life." 93

This latter provision is common; and that or similar provisions are in force in several of the States where consolidation with foreign corporations is permitted.94

90 Me. Rev. Stat. ch. 47, § 51; N. J. Corp. Supp. § 51; Pa. 1901, Act No. 298.

91 N. Y. Stock Corp. L. § 40, as amended 1902, ch. 601; ante, § 373.

92 Ga. Const. Art. 4, § 2, par. 4.

93 N. Y. Stock Corp. L. § 7.

94 Colo. Const. Art. 15, § 5; Me. Rev. Stat. ch. 47, § 53; Mo. 1899, pp. 316, 318; Mont. Const. Art. 15, § 20.

CHAPTER XXXII.

RECEIVERS OF FOREIGN CORPORATIONS.

§ 791. A receiver may be appointed | § 798. Competition of foreign re

for a foreign corporation.

792. Receiver for corporation char

tered in two States.

793. Recognition of foreign receiver.

794. Authorities forbidding suit by

foreign receiver. 795. Authorities permitting suit

by foreign receiver. 796. Competition of foreign receiver and domestic creditors.

797. Competition of foreign receiver and foreign creditors.

ceiver and creditors from
his own State.

799. Statutory successor may com-
pete with creditors.
800. Foreign receiver claiming as
assignee.

801. Foreign receiver claiming as

legally entitled.

802. Suit against foreign receiver. 803. Remedy where receiver not allowed to sue.

804. Administration of assets by ancillary receivers.

§ 791. A receiver may be appointed for a foreign corporation. While, as has been seen, 1 a court of equity will not interfere with the internal affairs of a foreign corporation, it will nevertheless in a proper case appoint a receiver for its property within the jurisdiction, who will be ancillary to a receiver already appointed in the State of charter, if such appointment has been made. The receiver so appointed will have the

1 Chapter XIII.

2 Williams v. Hintermeister, 26 Fed. 889; Failey v. Talbee, 55 Fed. 892; Shinney v. North American S. L. & B. Co., 97 Fed. 9; Holbrook v. Ford, 153 Ill. 633, 39 N. E. 1091; Buswell v. Order of Iron Hall, 161 Mass. 224, 36 N. E. 1065; National Trust Co. v. Miller, 33 N. J. Eq. 155; Tinkham v. Borst, 31 Barb. (N. Y.) 407 (but see Day v. United States C. S. Co., 2 Duer [N. Y.], 608); Murray v. Vanderbilt, 39 Barb. (N. Y.) 140; De Bemer v. Drew, 57 Barb. (N. Y.) 438; Popper v. Supreme Council, 61 App. Div. 405, 70 N. Y. S. 637; Hallenborg v. Greene, 66 App. Div. 590, 73 N. Y. S. 403; Hall v. Holland House Co., 12 Misc. 55, 33 N. Y. S. 50; Houlditch v. Donegal,

same powers that are given to the receiver of a domestic corporation. A receiver may be appointed for a single fund within the State, belonging to the corporation, which is shown to be in danger. The appointment not involving suit by the corporation, the fact that the corporation has not complied with the State law before doing business will not prevent the appointment.5

6

In this as in all cases of appointment of receiver, the appointment is entirely within the discretion of the court, and may be refused; even insolvency is not necessarily cause for appointing a receiver. Thus where there were no domestic creditors, so that the principal receiver would be allowed to take the assets, the court refused to appoint an ancillary receiver, since the only effect of doing so would be to increase the expenses.8

The jurisdiction to appoint a receiver is in rem, and depends

8 Bligh (N. s.), 301; In re Commercial Bank, 33 Ch. D. 174; In re English S. & A. Bank, [1893] 3 Ch. 385; In re Federal Bank, W. N. [1893] 46; In re Marshall, 22 Rettie (Scotch Ct. Sess. 4th Ser.), 697; In re Natal C. & D. C. Station, 20 Natal L. R. 153; In re Oriental Bank, 10 Vict. L. R. (Eq.) 154. In Rhode Island under a statute it was held that a receiver could not be appointed for a foreign corporation; Stafford v. American Mills Co., 13 R. I. 310; Pierce v. Crompton, 13 R. I. 312. But it has since been held that the statute applied to principal receivers only, and that the court under its common-law power could appoint an ancillary receiver for a foreign corporation. Evans v. Pease, 21 R. I. 187, 42 Atl. 506.

3 National Trust Co. v. Miller, 33 N. J. Eq. 155.

4 Redmond v. Hoge, 3 Hun (N. Y.), 171; Mosher v. Order of Iron Hall, 88 Hun, 394, 34 N. Y. S. 816; Hallenborg v. Greene, 66 App. Div. 590, 73 N. Y. S. 403.

5 Williams v. Hintermeister, 26 Fed. 889.

• Farmers' L. & T. Co. v. Chicago & A. R. R., 27 Fed. 146; Richardson v. Clinton W. T. Co., 181 Mass. 580, 64 N. E. 400; Irwin v. Granite S. P. Assoc., 56 N. J. Eq. 244, 38 Atl. 680; Mabon v. Ongley Electric Co., 156 N. Y. 196, 50 N. E. 805; Barclay v. Talman, 4 Edw. (N. Y.) 123; Hamilton v. Accessory Transit Co., 26 Barb. (N. Y.) 46; Phillips v. Sonora Copper Co., 90 App. Div. 140, 86 N. Y. S. 200; Borton v. Brines-Chase Co., 175 Pa. 209, 34 Atl. 597.

7 Farmers' L. & T. Co. v. Chicago & A. R. R., supra; Leary v. Columbia R. & P. S. Co., 82 Fed. 775; Stockley v. Thomas, 89 Md. 663, 43 Atl. 766. 8 Mabon v. Ongley Electric Co., supra,