488 HARVARD LAW REVIEW. the laws of that or of any adjoining State whose roads connect upon the State line or elsewhere may join and unite their roads and merge and consolidate their stock upon such terms as may be mutually agreed upon in accordance with the laws of the adjoining State with whose railroads connections are thus formed.^ This last phrase does not adopt the law of adjoining States, but is construed as requiring that the terms of the agreement of con- solidation be not in conflict with the laws of those States.^ The laws of Indiana, like those of Illinois, do not authorize a domestic company to sell or lease its property to a foreign corpora- tion. The question that presents itself, therefore, is whether a purchase of an Indiana road can be effected by an Illinois corpora- tion in such a way that it will be regarded in Illinois as a purchase and not a consolidation, and in Indiana as a consolidation and not a sale. It is said that all the requirements of this situation are met when the two companies make an agreement, by which the Indiana road transfers all its property to the Illinois corporation and passes out of, existence, while the Illinois company, in consideration for this conveyance, issues its stock directly to the Indiana stockhold- ers. Consolidations often take the form of purchase and sale,^ and it is not necessary that both constituent companies should continue to exist. Sometimes consolidation is made by dissolving both companies, or by dissolving either one, while preserving the other company and issuing its shares to stockholders in the dissolved company.* It appears, therefore, that the use of the word " consolidation " in the Indiana statutes does not alone require that when consolida- tion is made, the constituent companies shall all continue their existence. This apparently is the understanding of the courts of Indiana. In Jessen v. Commissioners of Lake County,^ the court said:
- ' Under our statute providing for the consolidation of railroad
companies, the consolidation is the result of contract between such 1 Act of February 23, 1853, amended March 8, 1897. Burns, Annotated Stat, of In- diana, § 5257. '^ Bradford v. Railway Co., 142 Ind. 383.
- Thompson, Corporations, i, § 324 ; Lauman v. Lebanon Valley R. R. Co., 30 Pa.
St. 46 ; Racine, etc. R. R. Co. v. Farmers' L. & T. Co., 49 111. 331.
- Morawatz, Corporations, § 942.
- 6 95 Ind. 567-577-
