40-812. Extension of lines; purchase of property and franchise of another railroad company; sale of property; limitations; consolidations; exceptions

A. Any railroad corporation operating in this state may extend its line of railroad into or through any other state or foreign country, and may purchase or lease the property of any railroad company incorporated under the laws of this state, or of any other state or foreign country, with all the rights, privileges or franchises pertaining thereto, or may buy the stocks and bonds, or either, of any such company.

B. Any railroad company of this state may, with the consent of the holders of two-thirds of its capital stock given by a vote at a meeting or consented to in writing, sell or lease its railroad, franchises and appurtenances to any other railroad corporation.

C. No purchase or lease under this section shall be entered into unless the railroad purchased or leased, or the railroad company whose stock is purchased, shall, when constructed, form a branch of, or a continuous line with the railroad of the purchasing company, either by direct connection therewith, or through an intermediate line or lines, constructed or to be constructed, which the first railroad company owns, leases or has the right by contract or otherwise to use or operate, provided that:

1. Upon the purchase of any railroad the corporation purchasing it shall assume all the liabilities and obligations existing at the time of the purchase against the railroad purchased.

2. When a railroad is purchased under or by virtue of a sale under an execution, or by virtue of a decree of any court, the purchase shall be subject to obligations provided for by the judgment or decree, and no other, and at the judicial sale a railroad corporation incorporated in any state may be the purchaser.

C. Railroad corporations may consolidate their capital stock, properties, liabilities, and assets of every kind upon terms and in any manner agreed upon by their respective boards of directors. No consolidation shall take effect until it has been ratified and confirmed in writing by stockholders of the respective corporations representing three-fourths of the subscribed capital stock of the respective corporations. In case of consolidation, articles of incorporation and consolidation shall be prepared, setting forth:

1. The name of the new corporation.

2. The purpose for which it is formed.

3. The place where its principal business is to be transacted.

4. The term for which it is to exist, whether permanent or for a stated term of years.

5. The number of its directors, which shall not be less than five nor more than thirteen, and the names and residences of the persons appointed to act as directors until their successors are elected and qualified.

6. The amount of its capital stock, which shall not exceed the amount actually required for the purposes of the new corporation, as estimated by competent engineers, and the number of shares into which it is divided.

7. The amount of stock actually subscribed, and by whom.

8. The termini of its road and branches.

9. The estimated length of its road and branches.

10. That at least ten per cent of its subscribed capital stock has been paid in.

11. The names of the constituent corporations and the terms and conditions of consolidation in full.

D. The articles of incorporation and consolidation shall be signed and countersigned by the presidents and secretaries of the constituent corporations and sealed with their corporate seals. There shall be annexed thereto memoranda of the ratification and confirmation thereof by the stockholders of each corporation, signed by stockholders representing at least three-fourths of the capital stock of the respective corporations. The articles shall be filed and recorded as other railroad corporation articles, and thereupon the constituent corporations named therein shall become extinct, and the new corporation shall succeed to all their capital stock and properties and be entitled to possess, enjoy and enforce them as fully and completely as either constituent might have done had no consolidation taken place, and shall be subrogated to all contracts and liabilities of the constituent corporations.

E. This section shall not apply to competing lines of railroads starting from and terminating at the same points within this state.