Central Railroad & Banking Company v. Georgia - 92 U.S. 665 (1875)
U.S. Supreme Court
Central Railroad & Banking Company v. Georgia, 92 U.S. 665 (1875)
Central Railroad & Banking Company v. Georgia
92 U.S. 665
1. The consolidation of two companies does not necessarily work a dissolution of both and the creation of a new corporation. Whether such be its effect depends upon the legislative intent manifested in the statute under which the consolidation takes place.
2. An act of the legislature authorized two railroad companies (C. and M.) to unite and consolidate their stocks and all their rights, privileges, immunities, property, and franchises under the name and charter of C. in such manner that each owner of shares of the stock of M. should be entitled to receive an equal number of the shares of the stock of the consolidated companies. The act also declared that all contracts of both companies should be assumed by and be binding upon C., that its capital should not exceed their aggregate capital, and that all their benefits and rights should accrue to it. It was further enacted that upon the union and consolidation, each stockholder of M. should be entitled to receive a certificate for a like number of shares of the stock of C. upon his surrender of his certificate of stock in M. Held that consolidation under this act was not a surrender of the existing charters of the two companies, and that it did not work the extinction of C., nor the creation of a new company. Held further that the consolidated company continued to possess all the rights and immunities which were conferred upon each company by its original charter.
3. Exemption from liability to any greater tax than one-half of one percentum of its net annual income having been conferred upon C. by its charter, held that it is not in the power of the legislature to impose an increased tax after the consolidation was effected. Held further that inasmuch as M. possessed no such immunity under its charter, the power of the legislature to tax its franchises, property, and income, remained unimpaired after its Consolidation with C.
4. The purpose and effect of the consolidating act were to provide for a merger of M. into C., and to vest in the latter the rights and immunities of the former, not to enlarge them. Therefore, M. having held its franchises and property subject to taxation, C., succeeding to the ownership, held them alike subject.