St. Louis, Iron Mountain & Southern Railway Co. v. Batesville & Winerva Telephone Co.

Hill, C. J., (after stating the facts). The question is .whether the limitation of this action is one year under section 6588, Kirby’s Digest. There might be a question' of some interest as to whether, if said section is not applicable, the limitation of this action would be the three-year statute, under the first paragraph of section 5064, of the five-year statute under, section 5069, or the five-year statute under section 5074. But that is not important for the action was commenced within less than three years of the purchase by the St. Louis, Iron Mountain & Southern Railway Company of the White River Railway Company, and, the limitation against the White River Railway Company having been arrested by suit progressing to judgment, therefore the action was not barred under any statute unless by the one year provided in section 6588. A purchasing company becomes bound for the liability of the selling company by statute, or by the terms of the purchase, or as trustee to discharge claims against it, or in all of these ways. See 23 Am. & Eng. Enc. of Law, 773, 775, and instances in notes; Organ v. Memphis & L. R. Rd. Co., 51 Ark. 235; Ratcliff v. Adler, 71 Ark. 269. On March 20, 1889, the Legislature passed an act to regulate the purchase and consolidations of railroads. Kirby’s Digest, § § 6587, 6588. The first section broadly made the purchasing company liable for the debt, liabilities and obligations of the purchased company. These debts, liabilities and obligations would be barred according to the respective acts applicable to them. The next section then gives a privilege to the purchasing company to shorten the period of limitation by giving notice to all persons or corporations having claims against it under the act to present the same within 'twelve months or they would be barred. The question is, whether the notice therein referred to is actual or constructive, the statute itself being susceptible of either construction. It is common knowledge that railroad companies • keep a complete and detailed system of books, and 'have a department looking after claims that are incurred by or asserted against them. The purchasing company would therefore have means of knowing of all the liabilities of every kind of the purchased company, so far as was known by it, and could obtain, at least approximately, definite information of' the debts and liabilities it was assuming. The purchasing company can then shorten .the limitation against it by giving notice to persons having claims against the purchased company, and in che ordinary run of affairs would have the information necessary to do so. This is a valuable privilege, and with notice of it the creditors of-the purchased company cannot be injured by it. If constructive notice put the statute in operation, the creditors of the purchased company would have to be searching the county records or the record in the Secretary of State’s office to find transfers, in order to prevent the ordinary period for assertion of claims being shortened by some sale of which they had no knowledge. “A statute is to be construed so that it may have a reasonable effect, agreeably to the intention of the Legislature.” Wilson v. Biscoe, 11 Ark. 44. The reasonable effect to be given this statute -is to require that the notice be actual, and not merely constructive, to bring it into operation. This construction gives a fair statute, operating harshly upon no one, and it is to' be presumed that such was the intention of the Legislature. This is consonant to the rule of construction that short statutes of limitation are construed strictly. It is argued that the facts and circumstances of this case were sufficient to have amounted to actual notice. The case is tried here on the facts found by the chancellor, as all the evidence was not preserved; and the chancellor found that the plaintiff did not receive actual notice of the sale to the St. Louis, Iron Mountain & Southern Railway Company l^y the White River Railway Company. Judgments affirmed. Mr. Justice Hart, having presided in the chancery court, was disqualified and did not participate herein.