Clark v. Detroit Curling Club , 298 Mich. 339 ( 1941 )

I concur in the opinion of Mr. Justice WIEST. There was no merger or consolidation of the old corporation with the new corporation.

In Pingree v. Railroad Co., 118 Mich. 314, 338 (53 L.R.A. 274), we adopted the following definition of the term "consolidation":

" 'The term "consolidation" is an elastic one, and may include a union of two or more corporations into a new one, with a different name, with or without extinguishing the constituent corporations, or the merger of two or more corporations into another existing corporation under the name of the latter.' " 2 Elliott on Railroads, § 335.

And in Shadford v. Railway, 130 Mich. 300, 306, we again defined the term:

" 'The word "consolidation" is used to denote any conjunction or union of the stock, property, or franchises of two or more corporations, whereby the conduct of their affairs is permanently, or for a long period of time, placed under one management, whether the agreement between them be by lease, sale, or other form of contract, and whether its effect be the dissolution of neither of the companies, or whether one of them be dissolved and its existence be merged in the corporate being of the other, or whether it result in the dissolution of both companies, and the creation of a new corporation out of such portions of the original companies as enter into the new.' 1 Beach, Private Corporation, § 326."

In order that there be a merger or consolidation, there must be two or more distinct and existing corporations which unite to form one unit. In the case at bar, there was but one existing corporation, which precludes the possibility of merger or consolidation.

It is next urged that there was an assumption of liability by defendant, and plaintiff relies upon Garey v. Kelvinator Corp.,279 Mich. 174, where it is said:

" 'Where a corporation purchased the assets of another and expressly agreed to pay its debts, the creditors of the latter may sue such purchasing corporation on the contract as a contract made for their benefit.' "

The above rule is correct, but in the instant case, the facts are not within its scope.

Plaintiff also urges that defendant company was estopped to deny its liability to plaintiff. We are not in accord with this claim.

In Engel v. State Mutual Rodded Fire Ins. Co., 281 Mich. 520, we reaffirmed the rule stated in Kole v. Lampen, 191 Mich. 156:

"It is a familiar rule of law that an estoppel arises when one by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts."

The record in this case does not substantiate the claim that plaintiff acted upon and relied on the representation made by defendant when it listed the bonded indebtedness of the old corporation in its annual reports for the years 1933 and 1934 as a liability. Plaintiff has mistaken his remedy and may not recover in this case.

The judgment is reversed, with costs to defendant.

BOYLES, J. concurred with SHARPE, C.J. McALLISTER, J., took no part in this decision.