of very questionable policy, * and courts would more incline to give the contract, when consistent with the words used, such a involves also the question of the expiration of the time. I have already referred to authority to show that expiration of time in a case of this sort amounts to nothing, where, as in this case, it is the fault of the company itself that the time has been allowed to expire. They have thought proper to allow the time to expire. Their conduct, upon this correspondence, admits of no excuse. With full knowledge of all they intended to do, they are told the deeds are ready to be examined with the abstracts; they make an appointment to go down, without raising a word of. complaint, to examine the abstracts with the deeds. They break that appointment. They make no other appointment. They are told that the vendor has vacated the possession of the property, and that it is at their disposal, and that he has sought another residence, as he must necessarily have done, and then they serve a formal notice, telling him they will have nothing to do with the contract; that they do not want the property, and do not mean to make the line. What has mutuality to do with it? There are many cases where the court has not looked to the doctrine of mutuality as it ought to have done, and has inferred a contract against a party where that party could not have sufficiently enforced a contract against any one else. Those are cases of great hardship; but here I must look at this contract at the time the act of parliament was passed, and at the time it was entered into. Where then is there any want of mutuality? Could not the company, within an hour after the act passed, have enforced the contract against Mr. Hawkes? Nobody disputes or doubts it. Where there is the want of mutuality, it is not because a man, subsequently to the contract, chooses to introduce impediments to the performance of the contract on his own part, but it is where it is impossible to do that which he had contracted for; and he cannot, therefore, turn round against the man with whom he has contracted, and throw upon that man the loss. Who is to bear the loss in this case? The company say the loss is to fall upon Mr. Hawkes. Who is to blame? The company; not Mr. Hawkes. The company, therefore, modestly desire, in consequence of their own act, in breaking this agreement as they have done, and rejecting the line after they had obtained authority to make it, throwing up the line and endeavoring to repudiate their solemn contract, that the whole loss and burden is to be thrown on the party who is not to blame. Fortunately the law, justice, and equity of the case are agreed. There is nothing to prevent my enforcing the contract in the case.

"Then certain other cases were cited, as showing I ought not to interfere to enforce performance of the contract. Gage v. The Newmarket Railway Company, 21 Law J. Rep. (N. s.) Q. B. 398; s. c. 14 Eng. L. & Eq. 57, was one. That seems also to turn on the conditional agreement. There was an agreement there, that the company, before they entered on the land which they might require, should pay, and it was considered there was no absolute agreement to pay. No doubt, the Lord Chief Justice said, if there had been a covenant to pay, or a covenant to pay a sum as a sum in gross, that the court would have treated it as void. The case was not before the court; but they

construction, that it shall be the * purchase of a pecuniary interest, or indemnification for a pecuniary loss, which are legitimate evidently considered it within the other cases, where they had held that the company could not bind itself beyond its powers. It required great consideration how far that doctrine should be carried. I dare say it will be necessary that it should be ultimately carried elsewhere before it can be finally decided. It is a great and serious question how far these companies can be allowed to enter into contracts solemnly under their seal, and then turn round upon the parties and say they have exceeded their powers, and, consequently, will not perform their contract. Then in the other case of Gooday v. The Colchester and Stour Valley Railway Company, 19 Law Times, 334; s. c. 15 Eng. L. & Eq. 596, there was no agreement binding upon the company.

"I can find no authority upon the subject, (and I have looked carefully through everything which has been cited, and I postponed disposing of the case in order that I might have that opportunity,) to shake the opinion I entertained when the agreement was closed, that this is a very clear case for specific performance. I am very glad that the law turns out to be consistent with the equity of the case; and, therefore, I dismiss this appeal, and with costs."

This case was affirmed in the House of Lords, 35 Eng. L. & Eq. 8, and elaborate opinions delivered, by the Lord Chancellor Cranworth, Lord Campbell, and Lord St. Leonards. The case is obviously put somewhat upon the ground of the peculiar state of facts involved. 1. It is a contract under the seal of an existing company, and not the contract of the projectors of a contemplated company merely. 2. Although the contract had respect to an extension of the existing line, by means of a branch line, which, as to the existing shareholders, the company had no right to construct, and even with the consent of the legislature could not construct, with funds of the existing company, yet nothing of this seems to have been known to Mr. Hawkes. He does not seem to have been made aware of any purpose of the company to do any act beyond their powers, or in conflict with the rights of the shareholders.

These several points are thus stated in the notes of the case :

Where an act creating a railway company, or giving new powers to an existing company, authorizes the purchase of lands for extraordinary purposes, a person who agrees to sell his land to the company is not bound to see that it is strictly required for such purposes; if he does not know of any intention to misapply the funds of the company, but acts bona fide in the matter, he may enforce performance of the contract.

Semble, That where the directors of a railway company, wanting part of a property, purchase more of it than is required, though that may become a question between them and the shareholders, they cannot on that account avoid the contract with the seller.

Promoters of a company to make a line of railway, or persons standing in a similar situation, as directors of an existing company, applying to parliament for authority to make a new line, may lawfully enter into a contract for land that will be necessary for the proposed line should the bill pass, and when it has

subjects of bargain and sale, than to * regard it, as the purchase of good-will, or the price of converting ill-will unto favor, which passed, such contract will be valid, and may be enforced. The mere want of legal power to make the contract at the moment of entering into it, will not affect its validity afterwards. Secus, where the act itself is illegal, and parliament is to be asked to legalize it.

Where a contract for the purchase of land is made by the projectors of a proposed line of railway, though an action at law may be maintained upon the contract, a court of equity will not, simply on that account, refuse its interference to compel specific performance.

Under the first head the following suggestions of Lord Chancellor Cranworth are of interest: "A railway company cannot devote any part of its funds to an object not within the scope of its original constitution, how beneficial soever that object might seem likely to prove.

“Thus in Colman v. The Eastern Counties Railway Company, 10 Beav. 1; 4 Railw. C. 513; Lord Langdale, at the instance of a shareholder, restrained the company and its directors from applying any part of their funds in assisting a company which had been formed for establishing a steam communication between Harwich and the northern ports of Europe. The directors of the railway company thought that such an application of a part of their funds would be likely materially to promote the interests of their shareholders, by encouraging and increasing the traffic on their line. But Lord Langdale, though admitting that such an expenditure might very likely conduce to the interest of the railway company, yet restrained the directors by injunction from so applying any part of their funds, on the ground that they had no right to expend the money of the company on any project not directly within the terms of its incorporation.

"In Salomons v. Laing, 12 Beav. 339, the same learned judge restrained the directors of the South Coast Railway Company from applying any part of the funds of that company in the purchase of shares of another company (the Portsmouth), by which purchase the defendants hoped to benefit the company of which they were directors. The court held that the defendants had no right to deal with the funds in a manner not authorized by their act.

"The same principle was recognized and acted upon by Sir James Wigram and Lord Cottenham in Bagshawe v. The Eastern Union Railway Company, 6 Railw. C. 152. There the legislature had authorized the defendants to raise, by way of additional shares, two sums of £200,000 and £100,000, the former for the purpose of enabling them to construct a branch line to Harwich, and the latter for enabling them to purchase and complete a cross line to Hadleigh. The plaintiff had purchased scrip certificates for shares in these undertakings, or one of them, on which all calls had been paid, and he stated by his bill, that the directors, though the whole of the two sums, £200,000 and £100,000 had been raised, yet had abandoned the intention of constructing the Harwich line, and were about to apply the sums so raised to the completing of their line from Ipswich to Norwich. The bill prayed, amongst other things, a general account of all sums so applied, that the directors might be decreed personally to make

are certainly not regarded ordinarily as the just basis of contracts.2

them good, and for an injunction to restrain any further similar application of any part of the said two sums of £200,000 and £100,000. To this bill there was a general demurrer, but it was overruled, first by Sir James Wigram, and afterwards, on appeal, by Lord Cottenham; the ground of the decision there, as in the other cases, being that the directors had no right to expend any part of the sums raised for a special purpose upon any other object than that for which they were so raised.

"In all these cases, the discussion was raised by shareholders calling in question the misapplication or intended misapplication of the corporate funds by the directors. But the doctrine has been acted on in the courts of common law to the extent of holding that a contract, even under the seal of a company, cannot in general be enforced, if its object is to cause the corporate property to be diverted to purposes not within the scope of the act of incorporation. Thus, in the case of The East Anglian Railway Company v. The Eastern Counties Railway Company, 11 C. B. 803; s. c. 7 Eng. L. & Eq. 505, the Court of Common Pleas, after an elaborate argument, held that no action could be maintained against the defendants on a covenant into which they had entered for payment to the plaintiffs of the costs incurred in applications to parliament, made at the instance of the defendants, for obtaining from the legislature powers which the defendants considered it desirable for their interests that the plaintiffs should possess. The Chief Justice, in delivering the judgment of the court, says, (11 C. B. 809; s. c. 7 Eng. L. & Eq. 510,) The statute incorporating the defendants' company, gives no authority respecting the bills in parliament promoted by the plaintiffs, and we are therefore bound to say, that any contract relating to such bills is not justified by the act of parliament, is not within the scope of the authority of the company as a corporation, and is therefore void.' "This case was afterwards recognized and acted on by the Exchequer Chamber, in the case of MacGregor v. The Official Manager of the Deal & Dover Railway Company, 18 Q. B. 618; s. c. 16 Eng. L. & Eq. 180. It must, therefore, be now considered as a well-settled doctrine, that a company, incorporated by act of parliament for a special purpose, cannot devote any part of its funds to objects unauthorized by the terms of its incorporation, however desirable such an application may appear to be.

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"I have referred to these cases, and there are others to the same effect, for the purpose of showing how firmly the law on this subject is established, and of guarding myself against being supposed to throw any doubt upon it. But I do not think that the present case comes within the principle on which these deci

Gage v. Newmarket Railway Co. 7 Railw. C. 168; s. c. 14 Eng. L. & Eq. 57; Porcher v. Gardner, 14 Jur. 43; 19 L. J. 63; 8 C. B. 461; Shelford on Railways, 402. See also Cumberland Valley Railway Co. v. Baab, 9 Watts, 458; Hawkes v. Eastern Counties Railway Co., 7 Railw. Cases, 219; s. c. 4 Eng. L. & Eq. 91.

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2. * But in many cases these provisional contracts have been enforced, notwithstanding the projected works have been abansions have rested. The making of the Wisbeach & Spalding Branch was not treated by the legislature as a new and independent object to be carried into execution by distinct funds raised for that special purpose. The power to make the new line was, according to the construction I put on the act, merely an addition to the powers conferred by the former acts. So that after the Wisbeach & Spalding act came into operation, the rights and powers of the company were to be regarded as if they had originally been powers, to make the new line and to raise the additional capital. The new works were to be considered as having formed part of the original undertaking, and the new shares were to be considered as part of the general capital. From the time, therefore, when the Wisbeach & Spalding bill received the royal assent, (and until that happened there was no binding contract,) the directors had just the same right to apply their funds to the purchase of land for the purposes of the new line, as, before the passing of that act, they had for the purchasing of land for the original line. This consideration, therefore, seems to me clearly to distinguish the present case from all those cases cited in the argument. The contract here was to apply the funds of the company to a purchase within the scope of its incorporation, and not to any purposes foreign to it, and I see no objection, therefore, to the contract on this first ground.

“But it was argued, secondly, that even supposing the contract not to be open to objection on the ground of its being an attempt to appropriate the company's funds to an object foreign to their original purposes, still, that it could not be supported, inasmuch as it was an agreement to purchase, for the new railway, lands not wanted for the purpose of making it. The directors had originally desired to obtain powers to make a straight cut from their new line to join the Ambergate, Nottingham, & Boston Railway, and for that purpose it would have been essential to them to possess the plaintiff's land, but they failed in their object of obtaining power to form this straight cut, and then there was not, it was said, any necessity for them to get possession of the plaintiff's land. A small portion only of it, about an acre and a half, is within the line of deviation, and it was argued that a contract to purchase the whole, (nearly six acres,) was a contract ultra vires, inasmuch as the company could only purchase what was really necessary or proper for the construction of the line. But the answer to this and argument appeared to me satisfactory. The contract was not necessarily, on the face of it, ultra vires. If the land in question was really wanted by the appellants for what are called extraordinary purposes, they were authorized to purchase it. Besides the line of deviation actually cuts the respondent's house in two, and in such circumstances the appellants had no right to take a part without taking the whole, if the plaintiff required them to do so; and it is a reasonable inference that the contract to purchase the whole was made because, wanting what was within the limits of deviation, the directors knew that they could not stop short with what was within those limits. Be that, however, as it may, there was nothing to show the respondent that his land was not wanted for the