SECTION VII.

Damages. Specific Performance.

1. Damages, difference between contract price 2. Equity will decree specific performance of aud price at time of delivery. contract for sale of shares.

§ 38. 1. The damages which either party is entitled to recover, is the difference between the contract price and the market price, at the time for delivery, or, in some cases, a reasonable time after, which is allowed either party for resale or repurchase.1

*2. And a court of equity will decree a specific performance of a contract to transfer railway shares, but not for the transfer of stock in the funds, as any one may always obtain that in the market, but railway stock is not always obtainable.2 This sub

1 Barned v. Hamilton, 2 Railw. C. 624; Humble v. Mitchell, 11 Ad. & El. 205; s. c. 2 Railw. C. 70; Shaw v. Holland, 15 M. & W. 136. But the purchaser is not entitled to recover any advance in the market price of such shares, after a reasonable time for repurchase. Tempest v. Kilner, 2 C. B. 300; s. c. 3 C. B. 249. See also Pott v. Flather, 5 Railw. C. 85; Williams v. Archer, id. 289; s. c. 5 C. B. 318. But a broker is not entitled to commissions unless he complete the sale, but may be entitled to reimbursement of actual expenses. Durkee v. Vermont Central Railway, 29 Vt. 127. In a recent case in the Common Pleas, Loder v. Kekule, 3 C. B. N. S. 128; s. c. 30 Law Times, 64, it was decided, in regard to the subject of damages for breach of contract, by delivery of an inferior article, that if the article was one that could be immediately sold in the market, the rule was, the difference between the market value of the article delivered and that contracted for. But where the article cannot be immediately resold, as where the resale is delayed by the defendant, the measure of damages is the difference between the value of the article contracted for, at the time and place of delivery, and the amount made by the resale, within a reasonable time of the delivery of the article. See also Rand v. White Mountain Railw. 40 N. H. 79. It is here said that such a contract creates no debt, attachable by process of foreign attachment, but is merely a claim for unliquidated damages. And see Hager v. Reed, 11 Ohio N. S. 626, where the general question of the enforcement of contracts to transfer stock is considered, and the effect of judgment for the price without an actual transfer or an order of court therefor.

2 Duncuft v. Albrecht, 12 Simons, 189; Shaw v. Fisher, 2 De G. & S. 11; s. c. 5 Railw. C. 461. Leach v. Fobes, 11 Gray 506. There has been the most controversy in the English courts of equity as bearing upon the question of decreeing specific performance of contracts to transfer shares in joint-stock companies, upon the point of the sufficiency of the proof. See Parish v. Parish, 32 Beav. 207; Bermingham v. Sheridan, 33 Beav. 660; s. c. 10 Jur. N. S. 415.

ject has recently been discussed in the English Court of Chancery Appeal, and the same rule declared, which is stated above. But in that case the plaintiff failed to obtain a decree, for the reason that he had already conveyed the stock to the defendant's vendee, in ignorance that the defendant was the real purchaser; and the matter having lain by for a whole year, it now seemed impossible to say that the plaintiff had made, or could make, good title to the stock, which is always an insuperable barrier to a decree for specific performance. The latest case upon the subject in the English Court of Chancery Appeal holds, that an agreement to accept a transfer of railway shares, on which nothing had been paid, was not nudum pactum, but a contract which may be specifically enforced in equity. Lord Chelmsford, chancellor, in delivering his judgment, quotes with approbation the words of the Vice-Chancellor of England, in Duncuft v. Albrecht. "There is not any kind of analogy," said that learned judge, " between a quantity of three per cent, or any other stock of that description, (which is always to be had by any person who chooses to apply for it in the market,) and a certain number of railway shares of a particular description, which railway shares are limited in number, and which are not always to be had in the market." We regard this as the latest authoritative declaration of the English equity courts upon the subject. So it was held, that a court of equity will decree a specific performance against a railway company of a contract to take land and pay a stipulated price.5

3 Shaw v. Fisher, 5 De G. M. & G. 596; Sullivan v. Tuck, 1 Md. Ch. Dec. 59, id. 112; McGowin v. Remington, 12 Penn. St. 56. See, also, upon the subject of specific performance in courts of equity, Adams, Eq. (ed. 1859), 77-91, and cases cited; Carpenter v. Ins. Co., 4 Sandf. Ch. 408; Lowry v. Muldrow, 8 Rich. Eq. 241.

Cheale v. Kenward, 3 De G. & J. 27. There has been a similar decision by the Supreme Court of Massachusetts. Leach v. Fobes, 11 Gray, 506; s. P. Todd v. Taft, 7 Allen, 371.

Inge v. Birmingham W. & S. V. Railway Co., 3 De G. M. & G. 658; s. c. 23 Eng. L. & Eq. 601; post, § 213. So also in their favor, Old Colony Railw v. Evans, 6 Gray, 25.

*SECTION VIII.

Specific Performance.

1. Specific performance decreed against the vendee.

2. This was denied in the early cases.

3.

Owner of original shares may transfer them.

4. Will not decree specific performance where not in the power of the party.

§ 39. 1. It is considered, under the English statutes, that the purchaser of shares in a railway is bound to execute the assignment on his part, procure himself to be registered, pay all calls intervening the assignment and the registration of his name as a shareholder, and indemnify the seller against future calls, and upon a bill filed for that purpose, it was so decreed.1

2. But in some of the earlier cases, very similar in principle, the Court of Chancery declined to interfere, and the opinion is very distinctly intimated, that the law implied no undertaking on the part of the purchaser of railway shares, to assume the position and burdens of the seller.2

*3. In the case of Jackson v. Cocker a query is started by the

66

1 Wynne v. Price, 3 De G. & S. 310; s. c. 5 Railw. C. 465; Shaw v. Fisher, 2 De G. & S. 11; s. c. 5 De G., M. & G. 596. These cases were decided by V. C. Knight Bruce, and are obviously somewhat at variance with the principles assumed in Humble v. Langston, 7 M. & W. 517. The learned judge here seems to have felt a just indignation that any defence should have been attempted in such a case. "The defence," said he, was without apology or excuse." And this same learned judge, in the case of Jacques v. Chambers, 2 Coll C. C. 435; 4 Railw. C. 499, held, that where a testator, at the time of his death, was possessed of fifty original shares, and seventy purchased shares in a railway, calls upon which had not all been made, by his will gave thirty whole shares in such railway to trustees, for the benefit of a married woman for life, without power of anticipation, and thirty shares to B., and twenty-five original and five purchased shares having been allotted by the executors to each of the legatees, the testator's estate was liable to pay the calls upon the shares, and a sum to pay the unpaid calls was ordered to be placed to a separate account, and laid out, and the income meanwhile paid to those entitled to the general residue. This case is decided upon the authority of Blount v. Hipkins, 7 Simons, 43, 51, which it is here said, "as it regards both sets of shares, cannot be substantially distinguished from Jacques v. Chambers." See also Duncuft v. Albrecht, 12 Simons, 189. But, as before said, it is well settled, that courts of equity in England will not decree specific performance of a contract to sell public stocks, which may always be had in the market. Nulbrown v. Thornton, 10 Vesey, 159. 2 Jackson v. Cocker, 2 Railw. C. 368; s. c. 4 Beavan, 59.

Master of the Rolls, upon the authority of Josephs v. Pebrer, 3 B. & C. 639, whether a contract by which the original subscribers of shares in a railway stipulate to be relieved from their undertaking, and to substitute another party in their place, is to be regarded as legal? But the case referred to was decided upon the ground that the concern then in question was illegal in itself, within the English statute,3 as having transferable shares, and affecting to act as a body corporate, without authority by charter or act of parliament.

4. The Court of Chancery will not decree specific performance against a railway company which promised to allot shares to the plaintiff, especially where it appears such shares have been given to others. A court of equity will never, it seems, decree specific performance against a party, where it is not in his power to perform, although such incapacity be the result of his own fault. But will, in such case, leave the other party to his remedy at law, by way of damages, which is all the redress that remains.5

36 Geo. 1. c. 18.

5

* Columbine v. Chichester, 2 Phillips, C. C. 27.

Greenaway v. Adams, 12 Vesey, 395, 400; Varick v. Edwards, 11 Paige, 289. In the case of Miller v. The Illinois Central Railw. & Robert & George Schuyler, 24 Barb. 312, it was held, that where the company, by their treasurer, gave a receipt to the Schuylers for $7,500, to be repaid with interest on demand, or received in payment of ten dollars on a share of stock, to be issued to them or their assigns, when the directors shall authorize the issue of more stock, this only gave the holder of such receipt an option to take the shares or the money, and that he could not claim to be a holder of stock, or to have any right thereto, until he had given notice of his election to take stock. And where the holder of this receipt had assigned it as collateral security to the plaintiff, with an agreement that he should have 300 of the shares, but no notice of any interest of plaintiff had been given the company, and the company made a new issue beyond what was necessary, and after the 7,500 shares had been issued to Robert Schuyler, and the 300 shares set apart by him for plaintiff, but the 300 shares were not transferred to plaintiff till after the second new issue, nor had the plaintiff knowledge of it at the time he accepted the 300 shares: It was held that the plaintiff had no claim against the company to allot him the proportion of the new issue of shares, which the 300 shares were entitled to receive, they having no notice of his equitable ownership of the 300 shares. And that although certain information came to the president, while acting in some other capacity, that some contract had been made, by which the Schuylers were to transfer a portion of the stock to the plaintiff, yet as this was not given or understood as notice to the company, or to him as president, it could not affect the company. And that the surrender of the receipt with certain indorsements, showing plaintiff's interest, after the resolution to issue the stock, fixing the mode of distribution, could not bind them to allot shares to the plaintiff upon the 300 shares.

*SECTION IX.

Trustee entitled to Indemnity against future Calls.

1. Trustee entitled to indemnity, on general | 5. Mortgagees liable, as stockholders, for the

§ 40. 1. It seems to be regarded as the general rule of chancery law, that the trustee of property is entitled to indemnity, for expenses bona fide incurred, in the management and preservation of the trust-fund, or estate, either out of the property, as a personal duty, from the cestui que trust in most cases.1

2. We apprehend there is no good reason why this principle should not receive a general application to the case of shares in a railway company, held as security for a debt, by way of mortgage or pledge. And it would seem, that no serious question could ever have arisen upon the subject, but for the strange inconsistencies into which the English courts and judges have been led, by attempting, for so long a period, to maintain the doctrine laid down in Humble v. Langston,2 but which is now effectually overruled, in the tribunal of last resort.3

3. But we shall refer briefly to the decisions, upon this point, in regard to railway shares and stock, in other similar companies. *It was held, by Wigram, Vice-Chancellor, that where there was

1 Murray v. De Rottenham, 6 Johns. Ch. 52, 67; Green v. Winter, 1 Johns. Ch. 27; Watts v. Watts, 2 M'Cord, Ch. 82; Myers v. Myers, 2 M'Cord, Ch. 264; McMillan v. Scott, 1 Monroe, 151; Morton v. Barrett, 22 Maine, 257; Draper v. Gordon, 4 Sandf. Ch. 210; Egbert v. Brooks, 3 Harring. 110; Methodist Episcopal Church v. Jacques, 1 Johns. Ch. 450; Story on Bailments, §§ 306, 306 a, 357, 358.

27 M. & W. 517.

3 Walker v. Bartlett, 18 C. B. 845.

Phene v. Gillan, 5 Hare, 1. In this case, it was held, that where the mortgagor is entitled to claim a retransfer of shares, standing on the register of shares, in the name of the mortgagee, the debt being paid off, he is entitled to take proceedings to compel such retransfer on the books of the company, in the name of the mortgagee, giving the proper indemnity for costs. And either the company or the directors, who have prevented the shares from being transferred, are proper parties to the bill, and, it would seem, necessary parties.

H