A bill praying that a reorganization of a railroad company be set aside and a new plan formulated, and for a receiver, was dis missed, it appearing that the plaintiff had her representative on the new board and had attempted to buy more of the new issue of bonds, although it was alleged that the new company was illegally organized, which fact was, however, known to the plaintiff ; Matthews v. Murchison, 15 Fed. 691.
Where a reorganization of an English mining company, whose property was all in the United States, was carried on in England by the voluntary act of the Eng lish stockholders and not by the British courts, and was found to hate been in fla grant violation and disregard of the rights of the American stockholders, it was held that no principle of international comity required that it should be sustained ; Brown v. Silver Mines, 55 Fed. 7.
In Memphis & L. R. R. Co. v. R. Com'rs, 112 U. S. 609, 5 Sup. Ct. 299, 28 L. Ed. 837, it was held that a mortgage on a charter of a corporation made in the exercise of a pow er given by a statute, confers no right upon purchasers at a foreclosure sale to exist as the same corporation ; if it confers any right of corporate existence upon them, it is only a right to reorganize as a corporation, sub ject to the laws existing at the time of the reorganization. The court said : "The real transaction, in legal effect, is nothing more or less, and nothing other, than a surrender or abandonment of the old charter by the corporators, and a grant de novo of a similar charter to the so-called transferees or pur chasers." In Pennsylvania, under the act of April, 1861, the sale of a railroad creates the pur chaser a body corporate, with all the rights, etc., of the old corporation. Irregularities in the organization are not necessarily fatal to the being of the new corporation, and will, at the most, enable the commonwealth to retake the franchise. It cannot be said
that the franchises do not exist ; Com. v. Ry., 52 Pa. 506.
Where foreclosure was brought on a rail road mortgage containing the usual clause that the trustee on request of a majority of the bondholders should bid at the sale, and reorganize on their account, it was held that the agreement enured equally for the benefit of the bondholders, and that each held his interest subject to the controlling power giv en to the majority ; that, upon proper request from the bondholders, the court might di rect the trustee to bid at the sale the amount of the principal and interest due on the first mortgage bonds and to proceed to execute the trust; Sage v. R. Co., 99 U. S. 334, 25 L. Ed. 394.
The pendency of a reorganization plan for the preservation of an entire railroad system may sometimes be reason for refus ing temporarily an application on the part of the trustees of a divisional mortgage to be put in possession of the property cov ered by the mortgage to them ; Short, Ry. Bonds 854.
In reorganization proceedings it is not necessary that notice of the terms of the plan nor of the legal proceedings be given to the stockholders in order to bar their rights if they do not assent ; In re Eureka Basin W. & Mfg. Co., 96 N. Y. 49.
A reorganized corporation, to whom a re ceiver had turned over the assets of the in solvent company, succeeds to the rights of its predecessor including the claimed right to re form a deed ; Williams v. American Ass'n, 197 Fed. 500, 118 C. C. A. 1.
See MERGER; MORTGAGE; NEWSPAPER; RAILROAD; RECEIVER; LEASE; VOTING TRUST.