SECTION VI.

Contracts between the Promoters and Opposers of a Bill for the Charter of a Railway.

1. English cases numerous.

2-5. Lord Eldon's opinion, in case of Vauxhall Bridge Co.

§ 7. 1. The cases in the English books upon the subject of contracts between the promoters of railway projects in parliament and those who have counter interests, and who are ready to persist in opposition to such projects unless they can secure some compromise with the promoters, are considerably numerous, and involve a question of no inconsiderable importance. We shall therefore examine them somewhat in detail.

2. One of the earliest cases upon this subject1 was decided by the Lord Chancellor, Cottenham, upon full argument, and great consideration, as early as 1836. But as this case professes to rest mainly upon a leading opinion of Lord Chancellor Eldon,2 upon a somewhat analogous subject, it may not be improper here to give the substance of that decision.

3. The application to parliament for the plaintiffs' company, if granted, it was conceded, would injuriously affect the tolls upon another bridge not far distant. The proprietors of this bridge were opposing the plaintiffs' grant before the parliamentary committee, with a view to secure some indemnity against * such loss, to be specially provided for by the plaintiffs' act, upon condition that the plaintiffs should open their bridge for the public travel. The promoters of the plaintiffs' grant and the proprietors of the rival bridge had come to an agreement in regard to the extent of the indemnity, and upon naming it to the committee, with a view to have it inserted in the act, one member of the committee objected to such course, as calculated to sanction improper influences upon public legislation. The promoters of the new bridge then proposed to the proprietors of the rival one to give them security for the proposed indemnity, by way of bond with surety which should quiet their opposition, and the bill pass. This was acceded to and the securities given, and the bill passed accordingly. The opinion

1 Edwards v. The Grand Junction Railway, 1 Mylne & Cr. 650.

2

* Vauxhall Bridge Co. v. The Earl of Spencer, Jacob, 64 (1821).

of Lord Eldon is an affirmance of the decision of the Vice-Chancellor, retaining the bill till the matter should be tried at law.3 But the intimations of the Chancellor indicate certainly that he regarded the contract as perfectly valid, and the bill was afterwards dismissed by consent. Lord Eldon said, "in the view I take of the case, it will not be an obstacle to the plaintiffs that they do not come with clean hands, for it is settled, that if a transaction be objectionable, on grounds of public policy, the parties to it may be relieved; the relief not being given for their sake, but for the sake of the public. Thus it is in the case of marriage brocage bonds. The principle was much discussed in the case of Neville v. Wilkinson, where Mr. Neville being about to marry, inquiry was made by the lady's father to what extent he was indebted. Wilkinson, who was applied to at the desire of Neville, concealed a demand which he had against him; after the marriage he attempted to recover it, and a bill was filed to restrain him. I remember arguing it with obstinacy, but Lord Thurlow thought that, having made a misrepresentation, a court of equity must hold him to it, and that, although the plaintiff was a particeps criminis; so it was held in the case of Shirley v. Ferrers,5 in the Exchequer.

4. "It is argued that this was a fraud upon the legislature, but I think it would be going a great way to say so, for non

constat, if it had been pushed to the extent of taking the opinion of the house, that it might not have passed the bill in its former shape. It cannot be said that the agreement is contrary to legislative policy, because one member of the committee makes an objection, which is not sanctioned or known by the house at large. Indeed, such things are constantly done, and with the knowledge of the house; for they are in the habit of saying, with respect to these private acts, that though they will not of themselves pass them into laws, yet they will if the parties can agree; and matters sometimes are permitted to stand over to give an opportunity of coming to a settlement.

5. "It is then said, that the money was to be paid out of the funds of the Vauxhall Bridge Company, which by the act were devoted to other purposes. The proprietors of Battersea Bridge, however, say that they have nothing to do with the funds of the

3

s. c. 2 Mad. 356.

5 Cited 11 Vesey, 536.

4

1 Br. C. C. 543.

company; that they have contracted with a number of independent persons, to whom they look for the payment of the bonds; and if the obligors agree with the company to pay the bonds with their money, what have the obligees to do with that unless by antecedent contract? They had no demand in law or equity against the company. If, then, the Vauxhall proprietors choose to sanction what the legislature has not directed, namely, the indemnifying the persons who have become obligors in the bonds, that is one thing; if they have not, then the individual officers who have paid the money over in discharge of the bonds ought not to have paid it, and may now be called on to pay it back; as between them and the company, the money must be considered as being still in their hands. If the transaction is to be considered merely as between the obligors and the obligees, the latter not refusing the money from whatever hands it came, but not entangling themselves in any contracts between the obligors and the company, then the obligees would not be affected by those contracts. But if so, still the case depends upon the validity of the bonds; for I think the Vauxhall Bridge Company may with propriety say, if the money was paid in consequence of an arrangement for the discharge of the bonds, and if the bonds were bad, that then it may be called back. When the cause was heard by the Vice-Chancellor, he 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."

*

SECTION VII.

Contracts of the Promoters enforced in Equity.

1-8. 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.

1 My. & Cr. 650.

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 * 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 any thing 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."

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