UPSET PRICES IN CORPORATE REORGANIZATION 505 through the "X" construction corporation, but the result and the reasoning give an unexpected scope to an after-acquired clause. So, too, the Supreme Court of Maine ^ has held that bonds issued by the "A" railroad corporation, secured by a deed of trust con- . taining an after-acquired clause, will prevail over the bond issue of the succeeding "B" corporation which built part of the road, and over the bond issue of the "C" corporation, which succeeded the "A" and "B" corporations, even as to broad-gaug^ rolling stock purchased by the "C" corporation to be used after the narrow gauge "A" roadway had been replaced by a broad gauge line« The problems arising from an after-acquired clause are often rendered well nigh insoluble when there is doubt if additions to and extensions of, the original property, are integral parts of the property as described in the underlying mortgage, or entirely new properties not within the contemplation of the after-acquired clause of the first mortgage. The decisive factor in such a situa- tion, in the case of a public utility, would seem to be the extent of the franchise of the original company. The intent of the parties to the mortgage as to the precise property to be covered by the after-acquired clause would, it seems, be determined by the obliga- tion of the mortgagor to extend its service under its franchise. The Supreme Court of the United States has been called upon to define the extent of a gas company's franchise with considerable nicety.^ Unless this guide of the profession of service by the corporation is accepted, it would seem difl&cult to ascertain just what property, other than replacements, the parties to the mortgage intended to include in the effect of the after-acquired clause; in the case of a private corporation, obviously, this guide is lacking. Again, the doctrine of accession, where one company adds pipes or rails to the existing system of the old company, or the questions resulting from the erection of buildings or structures by the consolidated
- 2 Hamlin v. Jerrard, 72 Me. 62, 68 (1881).
^ This same rule was adopted in Nat. Bank of Wilmington & Brandywine v. Wil- mington Ry. Co., 81 Atl. 70, 73 (Delaware, 1911). See language apparently c<w/ra, Hinchman v. Point Defiance Ry. Co., 14 Wash. 171 , 44 Pac. 867, 872 (1896) . See also Pull- man's Palace Car Co. v. Mo. Pac. Ry. Co., 115 U. S. 587, 594 (1885); Diggs v. Fidelity & Deposit Co., 112 Md. 50, 75 Atl. 517, 524 (1910); New York Security & Trust Co. v. Louisville Eastern & St. Louis Consol. R. Co., 102 Fed. 382, 393 (1900); Harris v. Youngstown Bridge Co., 90 Fed. 322, 332 (1898).
- Russell V. Sebastian, 233 U. S. 195, 208 (1914)-
