did that which he was not bound to do; for he certainly had jurisdiction, and might have decided upon the validity of the bonds. But he directed that to be tried at law, where all the objections may be raised upon the pleadings in the same manner as here; and considering that, in matters of this nature, both courts of law and equity have jurisdiction exercised upon the same principles, I do not see any occasion to vary the decree."

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SECTION VII.

Contracts of the Promoters enforced in Equity.

1-3. Case of Edwards v. Grand Junction Railway.

§ 8. 1. Edwards v. The Grand Junction Railway,1 is an application to a court of equity to enforce such a contract against a railway company, whose charter was obtained, by means of the quieting opposition in parliament, in conformity to the contract. The trustees of a turnpike road were opposing in parliament the grant to the defendants, unless their rights were guaranteed in such grant. The promoters of defendants' charter, and the trustees of the turnpike road, came to an agreement in regard to the proper indemnity to be inserted in the act, but to save delay it was secured by way of contract, on the part of the promoters, providing for a renewal of the covenants, on the part of the company, in a brief time specified, after it should go into operation. The controversy in the present case was with reference to the width of a bridge, by which the railway proposed to convey the turnpike road over their track. The contract stipulated that such viaducts should be of the same width as the road at that point, which was fifty feet. The charter only required them to be of the width of fifteen feet, and the company having declined to assume the contract of the promoters, were proceeding to build the bridges thirty feet wide only. The bill prayed an injunction, which was granted by the vice-chancellor, and confirmed by the chancellor, who held that an agreement to withdraw or withhold opposition to a bill in parliament is not illegal; and a court of 1 1 My. & Cr. 650.

equity will enforce a contract founded upon such a consideration; and that an incorporated company will be bound by the agreement of its individual members, acting, before incorporation, on its behalf, if the company had received the full benefit of the consideration, for which the agreement stipulated, in its behalf. The opinion of the Lord Chancellor will best show the grounds of the decision. "But then the railway company contend, that they, being now a corporation, are not bound by anything which may have passed, or by any contract which may have been entered into by the projectors of the company before their actual incorporation.

2. "If this proposition could be supported, it would be of extensive consequence at this time, when so much property becomes. every year subjected to the power of the many incorporated companies. The objection rests upon grounds purely technical, and those applicable only to actions at law. It is said that the company cannot be sued upon this contract, and that Moss entered into a contract, in his own name, to get the company, when incorporated, to enter into the proposed contract. It cannot be denied, however, that the act of Moss was the act of the projectors of the railway; it is, therefore, the agreement of the parties who were seeking an act of incorporation, that, when incorporated, certain things should be done by them. But the question is, not whether there be any binding contract at law, but whether this court will permit the company to use their powers under the act, in direct opposition to the arrangement made with the trustees prior to the act, upon the faith of which they were permitted to obtain such powers. If the company and the projectors cannot be identified, still, it is clear that the company have succeeded to, and are now in possession of, all that the projectors had before; they are entitled to all their rights, and subject to all their liabilities. If any one had individually projected such a scheme, and in prosecution of it had entered into arrangements, and then had sold and resigned all his interest in it to another, there would be no legal obligation between those who had dealt with the original projector and such purchaser; but in this court it would be otherwise. So here as the company stand in the place of the projectors, they cannot repudiate any arrangements

into which such projectors had entered. They cannot exercise the powers given by parliament to such projectors, in their corporate capacity, and at the same time refuse to comply with those terms, upon the faith of which all opposition to their obtaining such powers was withheld. The case of The East London Water Works Company v. Bailey, 4 Bing. 283, was cited to prove that, save in certain excepted cases, the agent of a corporation must, in order to bind the corporation, be authorized by a power of attorney; but it does not therefore follow that corporations are not to be affected by equities, whether created by contract or otherwise, affecting those to whose position they succeed, and affecting rights and property over which they claim to exercise control. What right have the company to meddle with the road at all? The powers under the act give them the right; but before that right was so conferred, it had been agreed that the right should only be used in a particular manner. Can the company exercise the right without regard to such an agreement? I am clearly of opinion that they cannot; and having before expressed my opinion that the contract is sufficiently proved, it follows that the injunction granted by the vice-chancellor is in my opinion proper, and that this motion to dissolve it must be refused with costs."

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3. "The case of The Vauxhall Bridge Company v. Earl Spencer, 2 Mad. 356, Jac. 64 (4 Cond. Cha. Rep. 28), was cited for the trustees; and it certainly is a strong authority in favor of their claim; Lord Eldon having in that case expressed an opinion, that the withdrawing opposition to a bill in parliament might be a good consideration for a contract, and having recognized the right of an incorporated company to connect itself with a contract made by the projectors of the company, before the act of incorporation. On the other hand Dance v. Girdler, 1 Bos. & Pull. N. R. 34, was cited for the railway company; but that was an attempt to make a surety liable beyond his contract; and Sir James Mansfield, in his judgment in that case, relied much upon the want of identity between the society with whom the contract was made and the corporation; and the question there was as to a legal liability, not as to an equitable right. It was contended for the railway company that, to enforce this

equity would be unjust towards the shareholders of the company who had no notice of the arrangement. To this two obvious answers may be made; first, that the court cannot recognize any party interested in the corporation, but must look to the rights and liabilities of the corporation itself; and, secondly, that there is nothing in the effect of the injunction inconsistent with the provisions of the act; for although the act provides that bridges shall not be less than fifteen feet in width, it does not provide that they shall not be made wider. The company might under this act clearly agree that this or any other bridge should be fifty feet wide."

SECTION VIII.

Contracts of the Promoters binding upon the Company at Law.

1-3. Case of Howden v. Simpson.

§ 9. 1. We have next in order of time the important case of Simpson v. Lord Howden,1 before the Master of the Rolls, and the Lord Chancellor on appeal, where it is held, that equity will not interfere to decree the surrender of an illegal contract, where the illegality appears upon the face of the contract, the remedy at law being adequate. We have then the same case, at law, before the Queen's Bench,2 and decided, on full argument, where it is held, that a contract to pay Lord Howden £5,000, in consideration of his withdrawing opposition to a bill for incorporating "The York & North Midland Railway Company," he being a peer in *parliament, and owning estates in the vicinity of the proposed line, was illegal, being a fraud upon the legislature. This decision was subsequently reversed in the Exchequer Chamber. The case being the leading case upon the subject, at law

1 1 Railway Cases, 326 (1837); 1 Keen, 583; 3 Mylne & Cr. 97. 2 10 Ad. & Ellis, 793.

3 The case was reversed mainly on the ground that the plea did not allege that the parties, at the time of entering into the contract, intended to keep it secret from the legislature. 10 Ad. & Ellis, 793; 1 Railw. C. 347. But the Exchequer Chamber held that the agreement on the face of it was valid, and that the plaintiff was not bound to communicate to the legislature the bargain he had made with the company, and that a member of the legislature could make any

certainly, may require a more extended statement. The agreement under seal, between the plaintiff and defendant, (the case now standing, Howden v. Simpson,) recited that a company had been formed for making a railway; that defendants were proprietors; that a bill had been introduced into parliament, according to which the line would pass through plaintiff's estates and near his mansion, and that he was a dissentient, and opposed the passing of the bill; that defendants had proposed that, if he would withdraw his opposition, and assent to the railway, they would endeavor to deviate the proposed line: and plaintiff agreed that, on condition of the stipulations in the agreement being performed, he did thereby withdraw his opposition and give his assent; and defendants covenanted that, in case the then bill should be passed in the then session, they would, in six months after it received the royal assent, pay plaintiff £5,000 as compensation for the damage which his residence and estates would sustain from the railway passing according to the deviated line, exclusive of and without prejudice to further compensation to plaintiff, in the event of the deviated line not being ultimately adopted, and without prejudice to such further compensation for any damage as in the agreement after mentioned.

2. Plaintiff declared in debt, and averred that he withdrew his opposition to the bill, which passed into a law in the then session, that six months had since elapsed, but that defendants had not paid the £5,000.

3. * Plea, that the railway, at the time of making the agreement, and according to the act, was intended to pass through the lands of divers individuals; that the agreement was made privately and secretly by the parties thereto, without the consent or knowledge of the said individuals, and was concealed from them continually until the act was passed, and was not disclosed terms for the sale of his land, and compensation for injury to his comforts and property, which it is lawful for a private individual to make. The judgment of the Exchequer Chamber was affirmed in the House of Lords, on full argument, before the Chancellor, Lord Lyndhurst, Lord Brougham, and in the presence of the two chief justices, and ten of the judges. 3 Railw. Cas. 294. But Lord Campbell adhered to his former opinion that the contract must have been held illegal, if it had appeared that it was an element in the contract that it should be kept secret, and not communicated to parliament.