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the working of the same railway or works; but the West London Railway Company shall have no control whatever over the working or management by the London and Birmingham (Northwestern) Railway Company of the West London Railway or works. It was held:

That in order to perform their covenant to work efficiently, the defendants were not bound under all circumstances to work the line for passenger traffic; but that, if as much gross proceeds could be obtained by efficiently working the railway for goods only, as for passengers only, or for both passengers and goods, the covenant was well performed, Platt, B., Martin, B., not concurring.

That the agreement of February, 1837, with the Great Western Railway Company, was, by virtue of the provisions in the leasing act, and the lease itself, transferred to the defendants, the lessees; and, consequently, that they had power to compel the Great Western Railway Company to stop trains on their line, pursuant to the provisions of that agreement. That, although the defendants had power to stop the Great Western trains, they were not bound to exercise it, necessarily, as a part of the efficient working of the line demised; and that they were not bound necessarily to work the demised line in connection with the trains on the Great Western Railway.

That there was no covenant in the lease to bind the defendants to work the demised line in connection with either or both their own or the Great Western Railway; but that it would be. for the jury to say whether or not they could practically work the line efficiently, without some connection with one or other of those railways.

That, for the purpose of considering the liability of the defendants, they were not to be treated by the jury as if they were lessees of a separate and independent line, having no control over the other two railways; but that the covenant to work the demised line efficiently, must be construed with a reference to the subject-matter, and the character of the defendants.

That the obligation of the defendants under their covenant, was not limited, as decided by the court below, to the indemnification of the plaintiffs from the obligations cast upon them by their acts of incorporation. The court say, in substance:-

If this railway had been leased to a simple individual, or company, without any connection with any other railway, and leased alone, the measure of efficient working, we cannot help thinking, * would be very different from what would be required from a company whose line was connected with it, who had the entire control over their own line, and were armed with a power of adding to the traffic of the railway, by the control possessed over another line, and whose capabilities and powers in this respect were reasons which disposed parliament to permit the lease to be made to them.

It is difficult, indeed almost impossible, to define the precise nature and degree of efficient working which such a company ought to apply, under this covenant; not so difficult to say that it ought to be different and greater than would be required from a company or an individual who had nothing but the railway leased. They could only be required to supply convenient accommodation and attendance for the receipt, and sufficient means of carriage, of such goods and passengers as might be offered at one terminus, or any intermediate station, to be carried to the other terminus, or some other intermediate station; and this, however small the gross receipt might be.

But that would be too small a measure of efficient working, in the case of these defendants, who have the power of supplying more goods and passengers themselves by facilitating the transit of both from Holsden to the Kensington Terminus, or Great Western Station, or by increased facilities for receiving them at the Kensington Terminus, by arrangements within their power, without any serious injury to their own concern.

They are certainly not bound to make a sacrifice of their own concerns for the purpose of efficiently working this line so as to produce the greatest profit to the plaintiffs and themselves.

The covenant must have a reasonable construction in this respect. But they are, we think, bound to do more than a lessee of merely the railway in question would do, unconnected with any other.

2. It seems to be regarded as settled that the persons or corporation who come into the use of a railway company's powers and privileges, are liable for their own acts while continuing

such use, and also for the continuance permissively of any wrong which had been perpetrated by such company upon land-owners or others, by means of permanent erections, which still remain in the use of their successors.2 Thus it has been held that the lessees of a railway are liable to a penalty, under the statute, for not having a bell upon their engines, and not ringing it, as required by the statute. But the lessees of a railway are not liable for the acts of the servants of the lessors.1

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SECTION V.

Contracts between different Companies regulating the Traffic.

1. Such contracts generally held valid and | 2. Arrangements to avoid competition valid. binding.

§ 146. 1. It seems in general to have been considered, that contracts between different connecting companies, with a boná fide view to regulate traffic, in a reasonable and just manner, were legal and binding.1 But when it is considered that these

2 In regard to the construction of contracts between different companies for the mutual use of each other's line, or the line of one road by the other, tolls, &c., see The Lancashire & Yorkshire Railw. v. The East L. Railw., 8 Eng. L. & Eq. 564; s. c. reversed in Exchequer Ch., 25 Eng. L. & Eq. 465; and affirmed H. Lords, 36 Eng. L. & Eq. 34. It was held in a late Scotch case, on appeal in the House of Lords, that under an act of parliament requiring one company to accept a lease of and operate the other's road, so soon as it was in readiness, the lessees were bound to accept any reasonable portion of the road, so soon as completed, it being such a portion as might be worked with advantage. Edinburgh & G. Railw. v. Stirling & D. Railw., 22 Law T. 26; Brown v. The Cayuga & Susquehanna Railw., 2 Kernan, 486.

3 Linfield v. Old Colony Railw., 10 Cush. 562.

* Walford on Railways, 184, citing two cases not reported.

1 Shrewsbury & Birm. Railw. v. London & N. W. Railw., 9 Eng. L. & Eq. 394. Lord Campbell says here, That if the object of the contract were to create a monopoly, and to deprive the public of all benefit of competition, it might be illegal, but an agreement that one company shall not interfere or compete with the other, is no more illegal than a contract by which one tradesman or mechanic agrees not to continue his business in a particular place. Same case in Chancery, before Lord Cottenham, 2 Mac. & Gordon, 324, where a similar view is taken of the legality of the contract. Lord Langdale, M. R., in Colman v. The Eastern Counties Railw., 4 Railw. C., 513.

companies have to a very great extent a monopoly of the traffic and travel of the country, the power to regulate fares and freight by arrangement between the different companies is certainly one very susceptible of abuse. But there is ordinarily very little danger that they will willingly incur the serious reprobation of public opinion. And it has sometimes been doubted whether contracts, whereby one railway company seeks to assume the entire business of other companies, affording them a guaranty in regard to stock and profits, or either, could be regarded as coming within the fair * interpretation of the English general statutes, allowing one company to contract for running upon the track of other companies, for tolls, and so could be held valid by the courts of that country, either in law or equity.2 But some of the later cases seem to sustain such contracts.3

2. There is no principle of public policy which renders void a traffic arrangement between two lines of railway for the purpose of avoiding competition. And if the arrangement embrace the division of the net earnings of both companies in certain definite proportions, the court will not interfere upon the ground that one company may not adventure its profits upon the chances of the earnings of another company. And it is no valid objection that such division is based upon the experience of the result of past traffic.1

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SECTION VI.

What is requisite to constitute a perpetual Contract between different Railway Companies.

§ 147. Where in the charter of a railway company a right is reserved to the legislature to allow other railways to connect with the former, upon such terms as shall be reasonable, complying with the established regulations of such company upon the subject, and in pursuance of such reservation a junction is made by a second railway company with the first, which, in faith 2 Simpson v. Denison, 13 Eng. L. & Eq. 359.

3 Ante, § 142.

Hare v. London & N. W. Railw., 2 Johns. & H. 80; s. c. 7 Jur. N. S. 1145; post, § 148.

of such connection, proceeds to make expensive and permanent arrangements for the accommodation of the enlarged business thus brought upon its track, it was held, that this imposed no obligation upon the second company to continue this connection permanently. And also that the second company might lawfully obtain an extension of their own road, so as to do their own business,,without continuing the connection.1

SECTION VII.

Contracts by Railways ultra vires, and Illegal.

1. Contracts to make erections not authorized by their charter.

2. Contracts to indemnify other companies against expense.

3. Contracts to divide profits.

4. Illustration of the doctrine ultra vires.
5. How far railways may accept bills of ex-
change. Railway companies not empow-
ered to make bills and notes except from
necessity.

6. Contracts ultra vires cannot be specifi-
cally enforced against the directors.

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§ 148. 1. It has been considered, that a contract by a railway company with the corporation of a city, by which the company bind themselves to erect a bridge and other accessory works across a river, at a point where, by their charter, they are not authorized to pass, and to do this by a definite time, and in default to pay one thousand pounds, as liquidated damages, such works being, without an act of parliament, a nuisance, is an illegal contract, and equally so notwithstanding a stipulation that the company shall in the mean time exert themselves to obtain an act authorizing the erections.1

2. And where the chairman of the Southeastern Railway Company promised the managing committee of a proposed railway company, that in consideration of their not abandoning their project, but pursuing it in parliament, the Southeastern

1 Boston & Lowell Railw. v. The Boston & Maine Railw., 5 Cush. 375.

1 The Mayor of Norwich v. The Norfolk Railw., 30 Eng. L. & Eq. 120.

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