The following opinion was filed March 9,- 1920:
Siebecker, J.The action is brought to foreclose the trust deed given to secure payment of the bonds of the Sheboygan-Elkhart Lake Railway & Electric Company and to charge the property of the Milwaukee & Fox River Valley Railzvay Company with the debts of the former company, upon the grounds that the latter company acquired the property of the former under an arrangement between the companies whereby the latter assumed and is in equity obligated to pay the debts of the former. An accounting is demanded to establish the amount of the alleged liability of the latter company to the former under the facts of the case, and it is demanded that foreclosure be decreed of this trust deed and the judgment be made effective against the latter company and that its property be subjected to the claims of the plaintiff and that he be awarded appropriate relief to enforce satisfaction of his judgment against the companies.
It is contended that the court erred in ordering that Brick-bauer and Dassow, who claimed to own bonds secured by the trust deed sought to be foreclosed by the plaintiff, be made parties defendant. These persons were interested as bondholders under the same security by which plaintiff is secured, and their rights and security as such bondholders are involved and will be affected by this litigation. Their right to relief upon their bonds and their interests thus involved are appropriate subjects for inquiry and determination in connection with those of the plaintiff. It is considered that the court properly made them parties to the action for the purpose of a complete determination of the rights of all the parties to the property involved in this foreclosure action.
*334It is strenuously contended that the court erred in omitting to find that the Sheboygan-Elkhart Lake Railway & Electric Company went out of existence and practically became merged in the Milwaukee & Fox River Valley Railway Company, and that the latter company thereby became . answerable for all the liabilities of the former, including the bonded indebtedness involved in this action. An examination of the record fails to disclose facts showing that the old company went out of existence or that it became consolidated or merged with the new company. These companies maintained an independent existence and no steps were taken to effect a merger of the old company with the new one. There are no facts shown which indicate that the new company is a successor corporation within the equitable principle relied upon by the plaintiff. The facts are plain that whatever property of the old company was transferred to the new company was pursuant to authority'conferred by each of the companies on their officers to negotiate for a sale and a transfer 6f the properties from the one to the other. This result the court and referee found as a fact, and the evidence sustains this conclusion. It is claimed and urged that the sale and transfer of the property of the old company to the new company was upon the condition that the new company pay all of the debts of the old company, including the old company’s indebtedness evidenced by its bonds, which had been issued and sold by it for a valuable' consideration. The documentary evidence adduced to show that each company passed resolutions to effectuate a sale and transfer of all the property of the old company to the new company upon the condition that such transfer carried with it the obligation by the new company to pay all of the old company’s indebtedness, is not clear upon this point. The terms of the various resolutions, when applied to the transactions involved, in the light of the rights, interests, and title the old. company had in and to the- properties affected thereby, show that the parties had no express under*335standing or agreement to the effect that the new company was to assume and obligate itself to pay all of the old company’s indebtedness. The claim that the new company assumed such obligation is also negatived by the facts showing that the old company had no title to a considerable portion of the property which the old company claims was so transferred.
Much of its acquired right of way which it is claimed was so transferred had become forfeited, as was its franchise for occupying the streets of Plymouth, which the plaintiff now claims constitutes a very substantial part of the con-, sideration upon which the «bond issue here involved was based. We are persuaded, upon study of the facts and circumstances disclosed by the record, that the referee and trial court are sustained in their conclusion that the transactions between the officers of the two companies pertaining to the transfers of property from the old company to‘the new company do not establish an agreement to the effect that the new company assumed, in consideration of the sale' and transfer of the old company’s property, to pay all of the old company’s debts, including the obligation evidenced by the bonds involved in this litigation. The referee’s findings of fact as modified and supplemented by the trial court cannot be held to be against the clear preponderance of the evidence on this issue, and they must be affirmed.
It is considered that the court correctly adjudicated and^ declared the rights of Dassow and George Brickbauer as owners of the bonds secured by the trust deed in question and properly awarded them judgment for recovery of such part of the surplus as may remain of the $1,125 to be applied in satisfaction of the judgment as their proportionate ownership of the outstanding bonds bears to that amount.
' It is contended that the court grievously erred in finding the value of the property of the new company acquired by purchase from the old company. The evidence on this sub*336ject is voluminous, involving many items and numerous transactions, and cannot be repeated here. An attentive and exhaustive examination of it has led us to the conclusion that the values found by the referee are amply sustained by the evidence and cannot be disturbed.
An exception is. urged to the court’s ruling denying plaintiff recovery of his costs and disbursements. The trial court held that, since the plaintiff’s claims in the trial court to the effect that neither Dassow nor George Brickbauer was entitled to any relief in the action his claim of the value of the property sold and transferred from the old company to the new company was grossly in excess of the actual value as found by the referee, and, his claim to a lien on all the new company’s property not being well founded, constituted good grounds to deny him recovery, of his costs and disbursements. This ruling of the trial court omits consideration of the necessity of plaintiff’s prosecuting the action to obtain the enforcement of his rights and claims to the extent awarded him. His complaint presents a substantial and legitimate basis for prosecuting this- action, and it appears his rights were denied him and that he was compelled to enforce them through this litigation. Under these circumstances we consider that the trial.court erred in exercising its discretion on plaintiff’s rights to recover his costs and disbursements in this.action. -It is considered that p-laintiff is entitled to recover them.
The amount of plaintiff’s costs and disbursements has not been ascertained, hence the judgment must be reversed and the cause remanded to the circuit court with direction to permit the plaintiff to have his costs and disbursements taxed and allowed and inserted in the judgment in his favor. In all other respects the judgment is correct, and the court is directed to award the same, relief to the parties to the action as is awarded in the judgment appealed from, except that the plaintiff recover his costs and disbursements.
*337By the Court. — The judgment is reversed, and the cause' remanded to the circuit court with direction to award judgment as indicated in the opinion.
A motion for a rehearing was denied, with $25 costs, on May 4, 1920.