Page images
PDF
EPUB

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

1 Railway Cases, 326 (1837); 1 Keen, 583; 3 Mylne & Cr. 97. 210 Ad. & Ellis, 793.

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.3 The case being the leading case upon the subject, at law* 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,

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 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; s. c. 9 Cl. & Fin. 61. 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.

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 * to, or known in parliament, and was concealed from the legislature during the passing of the act; and that plaintiff at the time of passing the act and still, was a peer of parliament.

SECTION IX.

What Contracts between the Promoters of Railways and Others will be enforced, either in Law or Equity, against the Contracting Parties or the Company.

1. Contract to take land of opposing party. | 2. Contract prejudicial to the public.

§ 10. 1. Since the decision of Howden v. Simpson, in the Exchequer Chamber, and the House of Lords (1842), the English courts seem to have acquiesced in the principles there established, until a very recent period. The validity of such a contract is recognized, in regard to the company purchasing the interest of the lessee of lands near the line of the proposed railway.1 And where the promoters of one railway entered into an agreement with a land-owner on the proposed line to take his land at a specified price (20,0007.), by which he was induced to withdraw opposition; and the promoters of a rival line, who proposed also to pass through the same land, had petitioned for a charter, and the merits of the two projects were, under the sanction of the committee of the House of Commons, referred to arbitration, and the solicitors of the two bills agreed, that the adopted line should take the engagements entered into with the land-owners, by the rejected line, it was held, that the second company prevailing, were bound, as a condition of entering upon the lands of plaintiff, to fulfil the terms of the agreement with the first company.2

1 Doo v. The London and Croydon Railway, 1 Railw. C. 257; s. c. 3 Jur. 258. 2 Stanley v. The Chester and Birkenhead Railw. 1 Railw. C. 58; 9 Simons, 264.

2. And where one railway company was prohibited from opening their line for traffic, until they had built a branch railway, connecting their line with that of another company, it was held, that a court of equity was bound to enforce the * prohibition, on motion of the other company, though the probable result would be, to cause inconvenience to the public, and not to benefit the other company.3

SECTION X.

Courts of Equity will enforce Contracts with the Promoters.

1. Bona fide contract not evading statute, n. 3. Statement of English cases.

valid.

§ 11. 1. The English courts of equity do not hesitate to restrain railways from proceeding to take land under their compulsory powers, where the proprietor of the estates had surceased opposition to the bill, by an arrangement with the projectors, by which they stipulated that the company should pay a certain sum, which it had declined to do. This was done notwithstanding the proprietor was a peer of parliament, and notwithstanding the tender of an undertaking, on the part of the company, not to enter upon the land until the further order of the court, and notwithstanding the time, within which the company, by their charter, were authorized to take land would have expired, before the hearing of the cause. And although this case is questioned by some writers,2 the learned Lord Chancellor St. Leonards said the cases establish the proposition, that a bona fide contract of this sort, not evading the act of parliament, but enabling the company to assist its views, and carry the act into effect, was valid, without reference to the reasonableness of the amount agreed to be paid.3

3 Cromford and High P. Railway v. Stockport, D. & W. Bridge Railway, 24 Beav. 74; s. c. 29 Law Times, 245.

1 Lord Petre v. Eastern Counties Railway Co., 1 Railw. C. 462.

Shelford, 400.

3 Hawkes v. Eastern Counties Railway Co., 1 De G. M. & G. 737; s. c. 15 Eng. L. & Eq. 358; s. c. before the Vice-Chancellor, 3 De G. & S. 314; s. c. 4 Eng. L. & Eq. 91, where it is considered that a railway company, having agreed to purchase an estate, although moved to do so for the quieting of opposition to a bill before parliament to enable them to extend a branch

*SECTION XI.

Such Contracts enforced where the Railway is abandoned.

1. Where a certain sum is to be paid to quiet 2. Merely provisional contracts not always opposition. enforced.

§ 12. 1. It has sometimes been held, that an absolute agreement made, by the promoters of a railway, to pay one a certain

in a certain direction, which was subsequently abandoned, were nevertheless bound to perform their agreement with the owner of the estate. See also Shelford on Railways, 400. The case of Hawkes v. The Eastern Counties Railway Co. came before the Lord Chancellor, St. Leonards, on appeal from the Vice-Chancellor in 1852, where the whole subject of the legality and bind ing character of this class of contracts is learnedly discussed, as well as the propriety of decreeing specific performances, and most of the cases elaborately and learnedly reviewed and compared. The conclusion to which that eminent judge arrives is, that even in a case where the company were not able to carry their project into full effect, but had abandoned it, they were nevertheless bound specifically to perform contracts of this kind, and that it was no objection to decreeing specific performance, that it would involve the necessity of paying the price of the land out of the general funds of the company, which had been raised for provisional purposes merely, and with no view of ultimately purchasing land and building the road; and that the land could be of no use to the company under present circumstances. One can scarcely fail to perceive in this case, that a principle, perhaps sound and just under some circumstances, is here pushed quite to its extreme verge. Damages at law might have been the more proper disposition of all interests concerned.

[ocr errors]

The opinion of the Lord Chancellor is a masterly exposition of the view which he adopts. After disposing of the preliminary questions he proceeds: "In the case of Webb v. The Direct London and Portsmouth Railway, 1 De G. M. & G. 521; s. c. 9 Eng. L. & Eq. 249, there was originally a decree for specific performance, and after the decision in this case was made, the court having relied on that case, that decision was reversed. Now it appears to me that that case was reversed upon the uncertainty of the contract; and if it was reversed upon any other ground, I should have required further time before I could accede to the doctrine that a company entering into such a contract as this is, could, upon any grounds of supposed illegality, get rid of the contract. If, as in some of these cases, several of which have been cited, the contract is so worded that it really depends upon this, that the company are not to pay unless they require the land; that is, they are to pay when they take the land, which assumes that they are not to pay unless they do take the land, that may be considered a conditional contract. I have nothing to say to such cases; but where, as in this case, it is an absolute and unqualified contract to take the land, I should certainly hold that no subsequent conduct on the part of the company could relieve them from the obligation they were bound by at the time they entered into it. The act of parliament having

« PreviousContinue »