THE LAW OF RAILWAYS: EMBRACING CORPORATIONS, EMINENT DOMAIN, CONTRACTS, . COMMON CARRIERS OF GOODS AND' PAS- SENGERS, CONSTITUTIONAL LAW, INVESTMENTS, &c, &c. ISAAC F. REDFIELD, LL. D., Ml CHIEF JUSTICE OF VERMONT. THIRD EDITION, GREATLY ENLARGED, VOL. I. BOSTON: LITTLE, BROWN, AND COMPANY 1867. T R2475r IS67 Vol * 1 Entered according to Act of Congress, in the year 1857, by Isaac F. Redfield, in the Clerk's Office of the District Court of the District of Massachusetts. Entered according to Act of Congress, in the year 1858, by Isaac F. Redfield, in the Clerk's Office of the District Court of the District of Massachusetts. Entered according to Act of Congress, in the year 1867, by Isaac F. Redfield, in the Clerk's Office of the District Court of the District of Massachusetts. University Press: Welch, Bigelow, & Co., Cambridge. PREFACE TO THE THIRD EDITION. The present edition has been prepared with special reference to making it acceptable in its scope and char- acter to the practising lawyer in all the numerous de- partments of the profession here touched. It will be found on examination that, by nearly doubling the ex- tent of the work, many new and important topics have been brought under consideration, and many others made more complete. The important subjects of Cor- porations and Common Carriers are here treated in a manner as complete as practicable, perhaps, within the limited space devoted to them. We believe these topics in particular will be found to be here presented in a manner to afford great assistance, both to learners and practitioners. In addition to these leading topics, there are numerous others here discussed in a manner more or less at length, according to circumstances, but always with a view to give, both the student and the practitioner, the greatest possible aid in coming directly at what he is required to know and to use in the active business of the profession. Among these are Contracts, Eminent Domain, Mandamus, Certiorari, Quo Warranto, Equity Jurisdiction, Indictment of Corporations, Taxation, Constitutional Questions, Rail- iv- preface to the third edition. way Investments, Dividends, Police, and Amalgamation of Railways, and some others. Our highest effort has been to produce a book use- ful and acceptable to- the profession, and thoroughly re- liable. I. F. K. Boston, January, 1867. PREFACE TO THE SECOND EDITION. The short time which has intervened, since the first publication of the work, has not afforded as much oppor- tunity for thorough revision as was anticipated at that time. But all has been done which the time would allow. All the decisions which have since appeared, both in England and America, and they are more numerous and important than could have been anticipated, in so short a period, have been carefully collated, and every point de- cided inserted in its appropriate place in the work. And where the subject was deemed of special interest to the profession and the public, the leading views maintained, in some of the most thoroughly reasoned opinions, have been inserted. These extracts are chiefly confined to the subjects of railway investments, and the rights of attach- ing and levying creditors of railway companies ; and while they do not add many pages, do add, it is believed, very considerably to the value of the work. The present edition is more complete and more cor- rect in some particulars than the former one, and is not enlarged to an inconvenient size. It is commended, with renewed assurances of the most sincere gratitude for past favors to the patronage of a profession proverbially lib- eralized by its learning, and made indulgent by its prac- tical wisdom, and the extent and variety of its attain- ments. I. F. R. Windsor, Vt., May 26, 1858. PREFACE. This work was undertaken with the purpose of supply- ing, what seemed to the writer a want, if not a neces- sity, to the profession in this country ; a book upon the law of railways, which should present, within reasonable compass, and in a properly digested form, the whole law upon the subject, both English and American. No trea- tise had attempted this. And the attempt has confirmed the expectation, that the accomplishment of such an un- dertaking would be attended with labor and perplexity. It seems desirable that such a work should present every case which has been decided in both countries, in such a form as to make the point of decision plain and obvious, and at the same time not convert a treatise into a mere digest. A mere treatise, too, upon the principles involved in the several departments of the law brought under discussion in such a work, would be of little bene- fit except to the student. This, too, will be found in the approved treatises already published upon these several subjects. On the other hand, a digest of the cases upon any plan, however comprehensive or philosophical might be the analysis, would appear an unsatisfactory labor when we have already so much of the kind. It is the endeavor of this undertaking to combine the two in such a manner as to render the work intelligible, and interesting as an exposition of the principles in- volved ; and at the same time present a thorough analy- Till PREFACE. sis and digest of all the important cases upon the subject, in such a manner as to enable the reader at once to know the result of all the decisions upon the several top- ics discussed. The plan of the work is mainly new, and the effort has been to render it natural, simple, and comprehensive. The manner of arranging the heads to the several sub- divisions has been adopted chiefly with a view to enable the -profession to find at once whatever the work con- tains upon any topic or question. How far the design of the author has been accom- plished, he submits to the indulgent judgment of his pro- fessional brethren who have hitherto shown him so much forbearance. In justice to himself, perhaps it should be here mentioned, that the work has been prepared under some disadvantages, from the constant pressure of official duties which could not be required to accommodate them- selves, in any respect, to the demands of this subordinate labor. It has thus happened, that, although a considera- ble time has elapsed since the work was seriously taken in hand, it has of necessity been done, to a great extent, at such intervals, more or less extensive, as circumstances would allow the writer to command, and always in haste. If some mistakes should be discovered, therefore, and some graver faults even, it is hoped that the profession will bear with them ; with the assurance that, if the work should be found of sufficient importance to require an- other edition, they will be corrected ; and that, if no such demand should be made, the work has probably received as much labor as it deserves. I. F. R. Windsor, Vt., November 20, 1857. ANALYSIS OF THE CONTENTS. 0^=* The citations to other portions of the work are thus expressed, § — pi. n. — . and the §§ are placed in the inner margin of the pages, for convenience of reference. The original paging is preserved in this edition at the bottom pf the page. CHAPTER I. INTRODUCTION. PAGH 1. Origin of railways in England 1 2. First built upon one's own land, or by special license from the owner 1, 2 3. Questions in regard to private railways ...... 2 4. Railways in America, public grants ...... 3 5. Use of steam-power on railways ........ 3 6. The franchise of a railway not necessarily corporate nor unassignable 4 CHAPTER II. PUBLIC RAILWAYS AS CORPORATIONS. — PRELIMINARY ASSOCIATIONS. SECTION I. MODE OF INSTITUTING RAILWAY PROJECTS. 1. Subscribers' Associations in England . . . . . . 5 2. Subscribers bound by subsequent charter . . . . . 5, 6 3. Issue and registry of scrip certificates ...... 6 4. Original subscriber liable to unregistered purchaser ... 6 5. Holders of scrip entitled to registry 6, 7 6. Preliminary associations not common in this country ... 7 7. Petitioners for incorporation file plan and surveys . . . . 7, 8 8. Present English statutes 8 9. Preliminary associations may be registered ..... 8 10. Not now held responsible as partners in England .... 8 ^SECTION II. CONTRACTS OF THE PROMOTERS NOT BINDING AT LAW UPON THE COMPANY. 1. In this country promoters only bind themselves and their associates . 9, 10 2. Contracts of promoters not enforcible by company . . . . 10, 11 3. But by consenting to a decree in equity setting up the contract, the company will be held to have adopted it 11 X ANALYSIS OF THE CONTENTS. SECTION in. SUBSCRIBERS TO THE PRELIMINARY ASSOCIATION INTER 8ESE. 1. Liability for acts of directors limited by terms of subscription . . 11, 12 2. Association not binding until preliminaries are complied with . 1 2 3. Contracts, how far controlled by oral representations of directors . 1 2 4. Subscribers not excused by directors from paying calls . 12 5. Not liable for expenses except by terms of agreement . . . 13 6. Deeds of association generally make provision .... 13 7. One who obtains shares without executing the deed not bound to contribute 13 n. 11. No relation of general partnership subsists between subscribers 13-15 SECTION IV. CONTRACTS OF THE PROMOTERS ADOPTED BY THE COMPANY. 1. Liability may be transferred with assent of creditors . . .14-16 n. 3. Powers of provisional company to contract limited by statute . 16 SECTION V. HOW CONTRACTS OF THE PROMOTERS MAY BE ADOPTED BY THE COMPANY. Cannot assume the benefit without the burden 16,17 SECTION VI. CONTRACTS BETWEEN THE PROMOTERS AND OPPOSERS OF A BILL FOR THE CHARTER OF A RAILWAY. 1 . English cases numerous 17 2-5. Lord Eldon's opinion in the case of Vauxhall Bridge Co. . . 1 7 - 20 SECTION VII. CONTRACTS OF THE PROMOTERS ENFORCED IN EQUITY. 1-3. Case of Edwards v. Grand Junction Railway . . . .20-23 section vni. CONTRACTS OF THE PROMOTERS BINDING UPON THE COMPANY AT LAW. 1-3. Case of Howden v. Simpson 23-25 SECTION IX. WHAT CONTRACT8 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 . . . . . . 25 2. Contract prejudicial to the public 25, 26 SECTION X. COURTS OF EQUITY WILL ENFORCE C0NTRACT8 WITH THE PROMOTERS. 1. Bonafi.de contract, not evading statute, valid 26 n. 3. Statement of English cases 26-37 ANALYSIS OF THE CONTENTS. XI SECTION XI. SUCH CONTRACTS ENFORCED WHERE THE RAILWAY IS ABANDONED. 1. Where a certain sum is to be paid to quiet opposition . . .27-33 2. Merely provisional contracts not always enforced . . . 34-39 SECTION XII. PRACTICE OP COURTS OF EQUITY IN DECREEING SPECIFIC PERFORMANCE. 1. Mutual arrangements protected in chancery . . . ' . .39,40 2. But decisions are conflicting. In cases of doubtful right, plaintiff is remitted to common-law remedies 40, 4 1 n. 2. Statement of cases 40-44 SECTION XIII. SPECIFIC PERFORMANCE IN COURTS OF EQUITY. Object of courts to compel good faith when a definite contract is made, 42-44 SECTION XIV. COURTS OF EQUITY WILL RESTRAIN A PARTY FROM OPPOSITION OR PETITION IN PARLIAMENT. Such cases not common in practice 45 SECTION XV. CONTRACTS TO WITHDRAW OPPOSITION TO RAILWAY PROJECTS AND TO KEEP THIS SECRET, AGAINST SOUND POLICY, AND SEEM TO BE ILLEGAL. 1. Principle of foregoing decisions obscure 46 2. Not adopted in this country unless terms inserted in charter . . 46, 47 3. Recent change of views in English courts 47,48 3-5. Statement of late case in which principle of Edwards v. Grand Junction Railway is doubted 47, 48 6. Act of incorporation should not be varied by oral testimony . . 48 7. Contracts to quiet opposition not favored in this country . . 48, 49 n. 5. Recent English and American decisions 49, 50 CHAPTER IE. RAILWAYS AS CORPORATIONS. SECTION I. ORIGIN AND DIFFERENT CLASSES OF CORPORATIONS. 1. The existence of corporations dates very early . . . . 51 2. The different kinds of corporations, sole and aggregate . . 51,52 3. This work treats principally of aggregate joint stock corporations . 52 4. Corporations are either ecclesiastical or lay 52, 53 5. So they are divided into eleemosynary and civil corporations . . 53 6. Corporations are public or private 53 7. Private corporations where stock is private property ... 53 Xll ANALYSIS OF THE CONTENTS. 8. Public corporations where stock is owned and management retained by the State 53, 54 9. It does not affect the private character of a corporation that the State or the United States own a portion of the stock . . . 55, 56 SECTION II. HOW CORPORATIONS ARE CREATED. 1. Corporations created by grant of the sovereignty. This may be proved by implication or by presumption ..... 56, 57 2. The sovereignty may establish corporations by general act, or by delegation or procuration . . . . . . . .57 3. Different forms of defining a corporation . . . . . . 57 4. The corporate action of corporations restricted to State creating them 57, 58 5. It may act by its directors and agents in other States . . . 58,' 59 n. 10. But cannot properly transfer its entire business to another place 58 6. A college located at one place cannot establish a branch at another 59 SECTION III. THE CONSTITUTION OF CORPORATIONS. 1. Definitions of the different sense of the term constitution, as applied to corporations 2. How corporations may be composed or constituted n. 1. The question illustrated more in detail . . . . . .< 3. Distinction of legislative, electoral, and administrative assemblies not essential ........... 4. Corporation can only act by its name. Subject discussed . 5. Any deviation from the name allowed, if the substance and sense be preserved . . . . . . . . ... 6. Courts of equity will not restrain corporations from applying for enlarged powers ......... 7. Change of constitution. Effect of change of name . . . . 8. Courts of equity will enjoin a new corporation from assuming the name of one of established credit 59 . 60 60 60 . 60 61 61, 62 62 . 62 CHAPTER IV. PROCEEDINGS UNDER THE CHARTER. SECTION I. ORGANIZATION OF THE COMPANY 1. Conditions precedent must be performed . 2. Stock must all be subscribed, ordinarily 3. Charter, location of road, condition precedent 4. Colorable subscriptions binding at law . 5. Conditions subsequent, how enforced 6. Stock distributed according to charter . 7. Commissioners must all act 8. Defect of organization must be plead . 9. Question cannot be raised collaterally 10. Records of company, evidence 11. Membership how maintained . 12. By subscription and transfer of shares . 13. Offers to take shares not enforced in equity maybe withdrawn 63 . 64 64 64, 65 65 . 65 65 . 66 66 . 67 68 . 68 68 ANALYSIS OF THE CONTENTS. Xlli SECTION II. ACCEPTANCE OF CHARTER, OR OF MODIFICATION OF IT. 1. New or altered charter must be formally accepted . . . .69 2. Subscription for stock sometimes sufficient . . . . . 6[» 3. Inoperative unless done as required . . . . . . .69 4. Assent to beneficial grant presumed 69 5. Matter of presumption and inference 70 6. Organization or acceptance of charter may be shown by parol . . 70 7. Corporators assenting are bound . . . . . . .70 8. Charter subject to recall until accepted . . . • . . 70 SECTION III. ORDINARY POWERS. CONTROL OF MAJORITY. 1. Ordinary franchises of railways 71 3. Majority control, unless restrained ....... 71, 72 4. Cannot change organic law . . . . . . . . .72 5. Except in the prescribed mode . . . . . . . 72 6. Cannot accept amended charter . 72, 73 7. Or dissolve corporation . . . . . . . . . 73 8. May obtain enlarged powers ........ 73 9. Courts of equity will not restrain the use of their funds for that purpose 74 10. But will, if to convert canal into railway 74 11. Right to interfere lost by acquiescence 74 12. Acquiescence of one plaintiff, fatal 74, 75 13. Railway a public trust 75 14. Suit maintained by rival interest ...... 75, 76 15. Court will not generally interfere in behalf of minority to prevent affairs of company being wound up 76 SECTION IV. MEETINGS OF COMPANY. 1. Meetings special and general . . , 77 2. Special, must be notified as required . . . . . . 7 7 3. Special and important matters, named in notice . . . . 77, 78 4. Notice of general meetings need not name business 78 5. Adjourned meeting, still the same 78, 79 6. Company acts by meetings, by directors, by agents . . . . 79 7. Courts presume meetings held at proper place ..... 79 8. Every stockholder may vote, but not by proxy . . . . 79 SECTION V. ELECTION OF DIRECTORS. 1. Should be at general meeting, or upon special notice . . . .80 2. Shareholders may restrain their authority ..... 80, 81 3. Company bound by act of directors, de facto . . . . .81 4. Act of officer de facto binds third persons 82 SECTION VI. MEETINGS OF DIRECTORS. 1. All should be notified to attend 82 XIV ANALYSIS OF THE CONTENTS. 2. Adjourned meeting still the same 83 3. Board not required to be kept full 83 4. Usurpations tried by shareholders or courts 83 5. Usage often will excuse irregularities ...... 83, 84 6. Decisions of majority valid ........ 84 n. 8. Records of proceedings evidence . . . . 84, 85 7. A quorum must be present where the authority of a quorum is neces- sary 85 SECTION VII. QUALIFICATION OF DIRECTORS. 1. One cannot be a contractor and director 85 2. May be their banker and director 86 3. May be director by virtue of stock mortgaged 86 4. Bankruptcy or absence will not vacate office 86 5. Company compelled to fill vacancies in board 86 CHAPTER V. PREROGATIVE FRANCHISES. 1. Control of internal communication, in a state, a prerogative franchise 87 2. Such a grant confers powers pertaining exclusively to sovereignty, as taking tolls, and the right of eminent domain . . . . 87 CHAPTER VI. BY-LAWS AND STATUTES. SECTION I. POWER OF MAKING BY-LAWS OR STATUTES. 1. May control conduct of passengers 88 2. Must be reasonable and not against law 88, 89 3. Power may be implied, where not express 89 4. Not required to be in any particular form unless by special provision 89, 90 £6. Model code of by-laws framed by board of trade in England . . 90 7. Company may demand higher fare, if paid in cars . . . .91 8. Public statutes control by-laws 91, 92 9. Cannot impose penalty 92 10. Cannot refuse to be responsible for baggage 92 11. Members of corporation affected with notice of binding rules . . 93 SECTION II. BY-LAWS REGULATING THE USE OF STATIONS AND GROUNDS. 1. May exclude persons without business 93 2. May regulate the conduct of others 93 ANALYSIS OF THE CONTENTS. XV 3. Superintendent may expel for violation of rules . . . .93,94 4. Probable cause will justify ......... 94 5. In civil suit must prove violation of rules 94 6. In England companies required to provide for accommodation of passengers 95, 96 7. Court will not interfere to compel through trains, unless required by the public convenience . . . • • • . .96 8. Railway freight-station not exempt from process of search-warrant 96, 97 SECTION in. BY-LAWS AS TO PASSENGERS. 1. By-laws as statutes 97 2. As mere rules, or regulations 97,98 3. Requiring larger fares, for shorter distances . . . • 98 4. Requiring passengers to go through in same train . . . 99-101 5. Arrest of passenger, by company's servants 101 7. Company liable for act of servant 102 8. By-law must be published 102, 103 9. Excluding merchandise from passenger trains 103 10. Discrimination between fares paid in cars, and at stations . 103, 104 11. Liability for excess of force 105 12. Office de facto may enforce rules of company .... 105 13. Company cannot enforce rule against passengers when in fault themselves 105 CHAPTER VII CAPITAL STOCK. « SECTION L LIMITATIONS. 1. General rights of shareholders 106 2. Capital stock not the limit of property 106 3. Cannot mortgage, unless on special license of the legislature . 106, 107 SECTION II. CONDITIONS PRECEDENT, WHICH THE PUBLIC AUTHORITIES MAY ENFORCE. 1. Stock, if limited, must all be subscribed 107 2. Payments at time of subscription 107,108 SECTION III. SHARES PERSONAL ESTATE. 1. Railway shares personal estate at common law . . . .108,109 2. Not an interest growing out of land, or goods, wares, and merchandise 109 3. Early cases treated such shares as real estate .... 109, 110 XVI ANALYSIS OF THE CONTENTS. CHAPTER VIII. TRANSFER OF SHARES. SECTION I. RESTRICTIONS UPON TRANSFER. 1. Express provisions of charter to be observed Ill 2. If not made exclusive, held directory merely . . . . 112,113 3. Unusual and inconvenient restrictions void 113,114 4. But a lien upon stock for the indebtedness of the owner is valid 114, 115 5. Such lien is not implied 116 6. Where transfer is wrongfully refused, vendee may recover value of the company 117 SECTION II. CONTRACTS TO TRANSFER STOCK. 1. Transfer under English statutes. Registered companies 2. Contracts to transfer stock valid, where bond fide . 3. Vendor must have the stock, when due' n. 3. Vendor must procure the consent of directors, where requisite 4. Force of usages of stock exchange ..... 5. Company will reform the registry at its peril .... 6. 10. Company may compel one to accept shares on contract 7. Stock standing in joint names belongs to survivors . 8. Mode and effect of correcting registry .... 9. If the company vary the contract, specific performance denied 10. Closing contracts by offer and acceptance .... 11. Form of transfer. Two may join in one transfer . . 117, 118 118, 119 119 e . 118 . 119, 120 . 120 . 120, 121 120 . 120, 121 121 121 121 SECTION III. INTERVENING CALLS OR ASSESSMENTS. 1 . Vendor must pay calls, if that is requisite to pass title 2. Generally it is matter of construction, and inference n. 2. Calls paid by vendor after executing transfer . . 122 122 122, 123 SECTION IV. TRANSFER BY DEED IN BLANK. 1 and 2. Blank transfer formerly held invalid in England 3 and 4. Rule different in America .... 123, 121 124 SECTION V. SALE OF SPURIOUS SHARES. 1. Vendor, who acts bond fide, must refund money . . . .125 3. No implied warranty in such case, which will entitle the vendee to special damage 126 4. Rule of the stock-exchange, made after the sale, not binding upon parties . .126 n. 1. Discussion of the extent of the implied warranty . . 125, 126 ANALYSIS OF THE CONTENTS. XV11 SECTION VI. READINESS TO PERFORM. — CUSTOM AND USAGE. 1. Vendor must be ready and offer to convey . . . . .127 2. Vendee must be ready to pay price . . . . . . 127 3. General custom and local usage. The party taking the initiative must prepare the writings ....... 127, 130 n. 3. Oral evidence to explain memoranda of contract . . 127 — 129 • SECTION VII. DAMAGES. — SPECIFIC PERFORMANCE. 1. Damages, difference between contract price and price at time of de- livery 130 2. Equity will decree specific performance of contract for sale of shares 131 SECTION VIII. SPECIFIC PERFORMANCE. 1. Specific performance decreed against the vendee . . . . 132 2. This was denied in the early cases 132 3. Owner of original shares may transfer them 133 4. Will not decree specific performance where not in the power of the party 133 SECTION IX. TRUSTEE ENTITLED TO INDEMNITY AGAINST FUTURE CALLS. 1. Trustee entitled to indemnity, on general principles . . . 134 2. English courts hesitated in regard to railway shares . . . .134 3 and 4. Cases reviewed ........ 134, 135 5. Mortgagees liable, as stockholders, for the debts of the company 135, 136 6. The ostensible owner must respond to all responsibilities . 137, 138 SECTION X. FRAUDULENT PRACTICES TO RAISE THE PRICE OF SHARES. 1. Courts of equity will vacate sales so procured . . . . 138, 139 2. Necessary parties 139-141 3 and 4. Dividends declared when none are earned will vacate sales and subject directors to indictment 141 5. Equity will not interfere where vendor acted bond fide, unless the shares were valueless ....... 141, 142 6. Managers of company liable in tort to party injured . . .142 7 and n. 10. Purchasing shares in another company considered 142, 143 8. Bona fide purchaser acquires rights ....... 143 SECTION XL LIABILITY OF COMPANY FOR NOT REGISTERING TRANSFERS. 1. The company liable to action 143, 144 2. May be compelled to record transfers by mandamus . 144 3. But not compellable to record mortgages of shares . . 144, 145 VOL. I. b XV111 ANALYSIS OF THE CONTENTS. 4. Grounds of denying mandamus ....... 145 5. Bill in equity most appropriate remedy .... 145, 146 6. Rule of damages 146 SECTION XII. WHEN CALLS BECOME PERFECTED. 1. Calls are made when the sum is assessed, notice may be given after- wards . * 146, 147 2 and 3. Directors the proper authority to make calls . . . .147 4. The manner of giving notice and of proof 148 section xni. TRANSFER BY DEATH, INSOLVENCY, OR MARRIAGE. 1. Mandamus lies to compel the registry of successor . . . 148,149 2 and 3. In case of death personal representative liable to calls . . 149 4. Notice requisite to perfect the title of mortgagee .... 149 5. Stock in trust goes to new trustees 150 6. Assignees of insolvents not liable for the debts of the company . .150 SECTION XIV. LEGATEES OF SHARES. 1. Entitled to election, interest, and new shares . . . 150, 151 2. Shares owned at date of will pass, although converted into consoli- dated stock .... 151 3. Consolidated stock subsequently acquired will not pass . . . 151 SECTION XV. SHARES IN TRUST. 1 and 2. Company may safely deal with registered owner . . 151, 152 3. But equity will protect the rights of cestuis que trust . . . 152 SECTION XVI. THE EXTENT OF TRANSFER REQUISITE TO EXEMPT FROM CLAIM OF CREDITORS. 1. How transfer of stock perfected as to creditors .... 152, 153 2. Reasonable time allowed to record transfer . . . . . 153 3 and 4. In some of the states no record required .... 153, 154 n. 3. Question further considered . . . . . . . 153 CHAPTER IX. ASSESSMENTS OR CALLS.' SECTION I. PARTY LIABLE FOR CALLS. 1. The party upon the register liable for calls 155 2. Bankrupts remain liable for calls 155, 156 3. Cestuis que trust not liable for calls, in law or equity . . 156 ANALYSIS OF THJE CONTENTS. XIX 4. Trustee compelled to pay .for shares 157 5. One on registry may show his name improperly placed there . .157 SECTION II. COLORABLE SUBSCRIPTIONS. 1. Colorable subscriptions valid ....... 157, 158 2. Directors may be compelled to register them . . . . 158, 159 3. Oral evidence to vary the written subscription inadmissible . 159, 160 4. Register evidence, although not made in the time prescribed . .160 5. Confidential subscriptions void 160 SECTION III. MODE OF ENFORCING PAYMENT. 1. Subscription to indefinite stock raises no implied promise to pay the amount assessed . . . . . . . . .161,162 2. If shares are definite, subscription implies a promise to pay assess- ments. Right of forfeiture a cumulative remedy . . 162, 16 3. Whether issuing new stock will bar a suit against subscriber, quctre 164,. 165 4. It would seem not 165 5. But the requirements of the charter and general laws of the state must be strictly pursued in declaring forfeiture of stock . .166 6. Notice of sale must name place 166, 167 7. Validity of calls not affected by misconduct of directors in other matters . • -,. .167 8. Proceedings must be regular at date . . . . . 167 9. Acquiescence will estop the party, often . . . .. .. .167 10. Forfeiture of shares . . . . . . . . . 167 11. Irregular calls must be declared void before others can be made to supply the place , . 167, 168 SECTION IV. CREDITORS MAY COMPEL PAYMENT OF SUBSCRIPTION.-,. 1. Company compelled to collect of subscribers by mandamus . . 168 2, 3, and 4. Amount due from subscribers a trust fund for the benefit of creditors . . . 168, 169 5. If a state own the stock it will be the same . . . . . 169 6 and 7. A diversion of the funds from creditors is a violation of con- tract on the part of the company, and a state law authorizing it invalid . . . . . . . . . . .. .169 8 and 9. The general doctrine above stated found in many American ■ cases . .. .. 169 10. Judgment creditors may bring bill in equity . . >> .170 11. Promoters of railways liable, as partners, for expenses of procuring charter . . .. . . . . . . »170 SECTION V. CONDITIONS PRECEDENT TO MAKING CAT. I ..- 1. Conditions precedent must be performed before calls . . .171 2. But collateral or subsequent conditions not . . ' . . 171-175 XX ANALYSIS OF THE CONTENTS. 3. Definite capital must all be subscribed before calls . . . 175, 176 4. It is the same where defined by the company as in the charter . 1 76 5. Conditional subscriptions not to be reckoned .... 176,177 6. Legislature cannot repeal conditions precedent . . . 177,178 7. Limit of assessments cannot be exceeded for any purpose . . 1 78 8. Where charter fails to limit stock, corporation may . . . 178 9. Alteration in charter reducing amount of stock . . . . .178 SECTION VI. CALLS MAY BE MADE PAYABLE BY INSTALMENTS. . 179 SECTION VII. PARTY LIABLE FOR CALLS. 1. Subscribers liable to calls 180 2 and 6. What constitutes subscription to a capital stock . . 180, 182 3. How a purchaser of stock becomes liable to the company . 180,181 4. One may so conduct as to estop him from denying his liability . .181 5. The register of the company evidence of membership . . 181,182 6. Subscriptions must be made in conformity to charter . . . .182 7. Transferee liable for calls. Subscriber also in same cases . . 182 8. Original books of subscription primary evidence .... 182 9. If lost, secondary evidence admissible ...... 183 10. What acts will constitute one a shareholder 183 11. May take and negotiate or enforce notes for subscriptions . . 183 12. But note fraudulently obtained not enforceable 183 SECTION VIII. RELEASE FROM LIABILITY FOR CALLS. 1 and 2. Where the transfer of shares, without registry, will relieve the proprietor from calls ........ 183,184 3. Where shares are forfeited by express condition, subscriber no longer liable for calls . 184, 185 4. Dues cannot be enforced which accrue upon shares after they were agreed to be cancelled . 185 SECTION IX. DEFENCES TO ACTIONS FOR CALLS. 1. Informality in organization of company insufficient . . . 185,186 2. Slight acquiescence estops the party in some cases . . . . 186 3 and 4. Default in first payment insufficient ..... 187, 188 5. Company and subscriber may waive that condition . . 188, 189 6. Contract for stock, to be paid in other stock . . . . .190 7 and 8. Infancy. Statute of limitations and bankruptcy . . 190-192 9. One commissioner can give no valid assurance to the route . .192 10. What representations matters of opinion 192 SECTION X. FUNDAMENTAL ALTERATION OF CHARTER. 1. Will release the subscribers to stock . . . . . . .193 2. Railway company cannot purchase steamboats . . . 193,194 ANALYSIS OF THE CONTENTS. XXI 3, 7. Majority may bind company to alterations, not fundamental 194-197,199 4. Directors cannot use the funds for purposes foreign to the organiza- tion .197 5, 9. But where the legislature or the directors make legal alterations n the charter, or the location of the road, it will not release sub- scribers 197,198,200 6. But if subscriptions are made upon condition of a particular location, it must be complied with 198,199 8, 9. Consideration of subscription, being location of road, must be sub- stantially performed . . 199, 200 10. Express conditions must be performed ...... 200 11. How far alterations may be made without releasing subscribers 201, 202 12. It may be done where such power is reserved in the charter . . 202 13. Personal representative liable to same extent as subscriber . . 202 14. Money subscriptions not released by subsequent ones in land . . 202 15. Corporation cannot emigrate into another state, even by legislative permission 202 SECTION XI. SUBSCRIPTIONS BEFORE DATE OF CHARTER. 1. Subscriptions before date of charter good 203 2. Subscriptions upon condition not performed .... 203 - 205 n. 4. Where the condition is performed 204, 205 3. Subscription by a stranger to induce company to build station . 205 4. Subscription on condition, an offer merely 205 5. Conditional subscription takes effect upon performance of the condi- tion . . ... . 206 6. How far commissioners may annex conditions to subscription . . 206 7. Such conditions void, if fraudulent as to company .... 206 SECTION XII. SUBSCRIPTION UPON SPECIAL TERMS. 1. Subscriptions not payable in money . 207 2. Subscriptions at a discount, not binding 207 n. 2. Contracts to release subscriptions not binding . . • 207,208 3. Subscriptions after organization 208, 209 4. President may accept conditional subscriptions 209 5. Recent case in Alabama 209 6. True rule to be deduced from all the cases 209 7. Important case on par values ....... 210 8. Difficulty of maintaining them ... .... 210 9. Sad effects of opposite course on commercial fair dealing . 210,211 10. Can a corporation stipulate to pay interest on stocks . . . .211 11. Such a certificate of stock is not thereby rendered inoperative for legitimate purposes 211, 212 SECTION XIII. EQUITABLE RELIEF FROM SUBSCRIPTIONS OBTAINED BY FRAUD. 1. Substantial misrepresentations in obtaining subscriptions will avoid them 212 2. But for circumstantial misconduct of the directors, in the matter, they alone are liable 213 3. Directors cannot make profit for themselves 213 XXII ANALYSIS OF TOE CONTENTS. SECTION XIV. FORFEITURE OF SHARES. — RELIEF IN EQUITY. 1. Requirements of charter and statutes must be strictly pursued . 214 2. If not, equity will set aside the forfeiture ...... 214 3. Must credit the stock at full market value 214 4. Provisions of English statutes ........ 215 5. Evidence must be express, that all requisite steps were pursued . 215 SECTION XV. SIGHT OF' CORPORATORS AND OTHERS TO INSPECT BOOKS OF COMPANY. 1. May inspect and take minutes from books 215 2. Discussion of the extent to which such books are evidence . 215,216 3. For what purposes such books are important as evidence . . .216 4. This will not embrace the books of proceedings of directors . 216, 217 5. Party claiming to be shareholder may inspect register . . . 21 7 6. Allowed when suit or proceedings pending . . . ■ . . 217 7. Party may have aid in the inspection . . . . . .217 CHAPTER X. RIGHT OF WAY BY GRANT. SECTION I. OBTAINING LANDS BY EXPRESS CONSENT. 1. Leave, granted by English statute 218 2. Persons under disability . . . . . . . . 218 218, 219 219 . 219 219 . 220 220. 221 . 221 221. 222 . 222 222 3. and n. 2. Money to take the place of the land 4. Consent to pass railway ..... 5. Duty of railway in all cases .... 6. License to build railway. Extent of duration 7. Company bound by conditions in deed 8. Parol license good till revoked 9. Sale of road no abandonment .... 10. Deed conveys incidents ; not explainable 11. One cannot derogate from compulsory grant 1 2. But this does not apply to accidental incidents 13. Case in N. Y. Court of Appeals somewhat at variance with the pre- ceding cases ........... 222 14. A municipal corporation may be bound by implied contract in the grant of land, so as not to be at liberty to recede from it . 222, 223 SECTION II. SPECIFIC PERFORMANCE IN EQUITY. 1. Contracts before and after date of charter 224 2. Contracts where all the terms not defined . . . . . 224 3. Contracts for land, umpire to fix price ..... 224, 225 4. Where mandamus also lies . . . . . . . 225 ■ 5. Contracts not signed by company ....... 225 6. Where terms are uncertain ........ 225 •7. Contracts giving the company an option . . . . 225, 226 8. Contracts not understood by both parties 226 ANALYSIS OF THE CONTENTS. XX111 9. Order in regard to construction of highways may be enforced at the suit of the municipality 226 - 228 10. The courts sometimes decline to decree specific performance on the ground of public convenience . . • • • • . 2*8 11. No decree of specific performance when contract vague and un- certain 228 CHAPTER XL EMINENT DOMAIN. SECTION I. GENERAL PRINCIPLES. 1. Definition of the right 2. Intercommunication ...••• 3. Necessary attribute of sovereignty 4. Antiquity of its recognition 5. Limitations upon its exercise .... 6. Resides principally in the states .... 7. Duty of making compensation .... 8. Navigable waters • 9. 10, and 11. Its exercise in rivers, above tide- water . 229 229 . 230 230, 231 . 231 231 . 231 232 . 232 SECTION II. TAKING LANDS IN INVITUM. 1. Legislative grant requisite 2. Compensation- must be made 3. Consequential damages . 4. Extent of each liability 5. These grants strictly construed 6. Limitation of the power to take lands 7. Interference of courts of equity 8. Rule of construction in American courts 9. Strict, but reasonable construction . 10. Rights acquired by company 11. Limited by the grant . x l 2. Late decision of House of Lords 233 . 234 234 . 234 234. 235 235. 236 236 . 237 237 . 238 238 238, 239 SECTION III. CONDITIONS PRECEDENT. 1. Conditions precedent must be complied with , 23 ^ 2. That must be alleged in petition 239 > 24 ^ 3. When title vests in company • 24 ^ 4. Filing the location in the land office is notice to subsequent purchasers 240 5. After damages are assessed and confirmed by the court the owner is entitled to execution 240 ' of i 6. If the company use the land ....-••• 241 7. Subscriptions payable in land without compensation, a court of equity will enforce payment 241 XXIV ANALYSIS OF THE CONTENTS. SECTION IV. PRELIMINARY SURVEYS. 1. May be made without compensation 241 2. Company not trespasser . . . . . . . . .242 3. For what purposes company may enter upon lands . . . 242 4. Company liable for materials 242, 243 5. Right to take materials 243 6 and 7. Location of survey 243,244* SECTION V. POWER TO TAKE TEMPORARY POSSESSION OF PUBLIC AND PRIVATE WAYS. 244 SECTION VI. LAND FOR ORDINARY AND EXTRAORDINARY USES. 1. By English statute may take land for all necessary uses 2. Companies have the same power here 3. So also of companies connecting at state lines . 244 - 246 246 246, 247 SECTION VII. TITLE ACQUIRED BY COMPANY. 1. Company have only right of way . 2. Can take nothing from soil except for construction 3. Deed in fee-simple to company 4. For what uses may take land 5. Right to cross railway, extent of . 6. Conflicting rights in different companies . 7. 8. Rule in the American states 9. Right to use streets of a city 10. Law not the same in all the states . 11. Rule in Massachusetts .... 12. 13. Land reverts to the owner 14. True rule stated .... 15. Conditions must be performed 16. Further assurance of title . 1 7. Condemnation cannot be impeached 18. Where public acquire fee, it will never revert to grantor 247 247, 248 248,249 249, 250 250 . 250 250, 251 . 252 252 . 253 253,254 . 254 254 . 254 254, 255 . 255 SECTION VIII. CORPORATE FRANCHISES CONDEMNED. 1. Road franchise may be taken. 2. Compensation must be made 3. Railway franchise may be taken 4. Rule denned .... 5. Constitutional restrictions 6. Not well denned 7. Must be exclusive, in terms . 8. Legislative discretion 9. Highways and railways compared 10. Extent of eminent domain .... 11. Exclusiveness of the grant, a subordinate franchise 255, 256 . 256 256 256,257 257 . 257 257,258 . 258 258 . 258 259 12. Legislature cannot create a franchise, above the reach of eminent domain 259 13. Legislature may apply streets in city to any public use . . 260 - 262 ANALYSIS OF THE CONTENTS. XXY SECTION IX. COMPENSATION. — MODE OF ESTIMATING. 1. General inquiry simple ........ 262 2. Remote damage and benefits not to be considered .... 262 3. General rule of estimating compensation .... . 262,263 4. Prospective damages assessed . . . ... . • . 263 5. In some states value " in money " is required ..... 264 6 and 7. Damage and benefits cannot be considered in such cases 264, 265 8. Rule of the English statute 266,267 9. Farm accommodations . . . . . . . . . 267 10. Benefits and damage, if required, must be stated . . . 267,268 n. 13. Course of the trial in estimating land damages . . . 268,269 11. Items of damages not indispensable to be stated . .... 269 12. In contracts for land statutory privileges must be stated to be secured 269 13. Questions of doubt referred to experts ...... 269 14. Special provisions as to crossing streets only permissive . . . 269 15. In an award of farm accomodations time of the essence of the award 269 SECTION X. MODE OF PROCEDURE 1. Legislature may prescribe .... 2. Must be upon proper notice . 3. Formal exceptions waived, by appearance . 4. Unless exception is upon record 5. Proper parties, those in interest . 6. Title may be examined .... 7. Plaintiffs must show joint interest 8. Jury may find facts and refer title to the cour 9. Land must be described in verdict 10. Distinct finding on each claim 11. Different interests ..... 12. What evidence competent 13. Proof of value of land ... 14. Opinion of witnesses .... 15. Testimony of experts .... 16. Matters incapable of description 17. Costs 18. Expenses 19. Commissioners' fees . 20. Appellant failing must pay costs 21. Competency of jurors . 22. Power of court to revise proceedings 23. Debt will not lie on conditional report 24. Excessive damages, ground of setting aside verdict Note. Other matters of practice ..... 25. No effort to agree required in order to give jurisdiction . 270 270,271 . 271 271 . 271 271,272 . 272 272 . 272 273 . 273 273 273. 274 274. 275 . 275 276 277,278 278 . 278 278 . 278 279 . 279 279 279, 280 280 SECTION XI. THE TIME COMPENSATION TO BE MADE. 1. Opinions conflicting 281 2. Chancellor Kent's definition 281 3. That of the Code Napoleon 281,282 4. Most state constitutions require it to be concurrent with the taking . 282 XXVI ANALYSIS OF THE CONTENTS. 5. English cases do not require this 283, 284 6. Adequate legal remedy sufficient 284, 285 7. Where required, payment is requisite to vest the title . . 285, 286 8. Some states hold that no compensation is requisite . . . 286 SECTION XII. APPRAISAL INCLUDES CONSEQUENTIAL DAMAGES. 1. Consequential damage barred ........ 287 2. Such as damage, by blasting rock 287 3. But not where other land is used unnecessarily . ' . . . 288, 289 4. But loss by fires, obstruction of access, and cutting off springs is barred 289, 290 5. Loss by flowing land, not barred ....... 290 6. Damages, from not building upon the plan contemplated, are barred 290, 291 7. Special statutory remedies reach such damages ..... 291 8. Exposure of land to fires 291, 292 9. No action lies for damages sustained by the use of a railway . . 293 SECTION XIII. ACTION FOR CONSEQUENTIAL DAMAGES. 1. Statute remedy for lands " injuriously affected" . .... 294 2. Without statute not liable to action 294 3. Are liable for negligence in construction or use . . . 295, 296 4. Statute remedy exclusive 296 5. Minerals reserved . . . . . . . . • .297 6. Damages for taking land of railway for highway . . . . 297 7. Compensation for minerals, when recoverable . . . . .297 SECTION XIV. RIGHT TO OCCUPY HIGHWAY. 1. Decisions conflicting 298 2. First, held that owners of the fee were entitled to additional damages ......*.... 299 3. Principle seems to require this 300 - 302 4. Many cases take a different view ...... 303 - 306 5. Legislatures may and should require such additional compensation 306, 307 6. Courts of equity will not enjoin railways from occupying streets of a city . . . 307 7. Some of the states require such compensation . . . 308,309 n. 11. All do not. But the English courts, principle, and many of the state courts, do require it, as matter of right . . 309 - 311 8. Recent decision upon the right to occupy the highway . • 310 - 315 1. The decisions in the state of New York require compensation to the owner of the fee ....... 311,312 2. Distinction between streets of cities and highways in the country . 312 3. Legislature may control existing railways . . . . .312 4. In Ohio the owner of the fee may claim indemnity against ad- ditional injury 312, 313 5. True distinction, whether the use is the same . . . . 313 6. The present inclination seems to be to require additional com- pensation for laying street railway in highway . . . .313 7. Cases in the opposite direction. Judge Ellsworth's opinion 313, 314 ANALYSIS OF THE CONTENTS. XXV11 8. Explanation of the apparent confusion 314 9. Where permanent erections made in street, compensation must be made 314 10. Rights of land-owners as to obstructing railway . . . 314, 315 11 & n. 23. Recent cases in New York, property rights of the com- pany 315-317 1. The interest demands reasonable protection 317 2. The legislature have power to impose a permanent burden upon streets ......... 317, 318 3. But this is not to be assumed as matter of construction . . .318 4. Decisions not uniform. Generally held that street railway fran- chise exists in the easement for the highway. Analogy of steam roads .......... 318 5. Street railways do not increase the servitude of the highway 318, 319 6. Must always be regarded and treated as a portion of the highway . 319 7. The estate or franchise of street railways exclusive as to passenger traffic . . . . . . . . .319 8. 9. This point further illustrated 319,320 10. How far the legislature may effect the exclusiveness of this franchise 320 11. Where compensation is required, no abridgment of right implied 320 12. The franchise and property must remain subject to legislative and municipal control ....... 320, 321 13. Some states allow additional land-damages for change of grade of the street 321 14. This not demandable, unless the change is required for some- thing in addition to highway, or unless given by special statute 321,322 15-19. Summary of the argument under this head . . . 322 SECTION XV. CONFLICTING RIGHTS LN DIFFERENT COMPANIES. 1. Railway company subservient to another, can only take of the other land enough for its track . . . . . . . 323 2'. Where no apparent conflict in route first located acquires su- perior right .......... 323 SECTION XVI. EIGHT TO BUILD OVER NAVIGABLE WATERS. 1. Legislature may grant the right .... 2. Riparian proprietor owns only to the water . 3. His rights in the water subservient to public use 4. Legislative grant paramount, except the national rights 5. State interest in flats where tide ebbs and flows 6. Rights of adjoining owners in Massachusetts 7. Railway grant to place of shipping .... 8. Principal grant carries its incidents 9. Grant of a harbor includes necessary erections . 10, 11. Large rivers held navigable in this country 12. Land being cut off from wharves is " injuriously affected" 13. Paramount rights of Congress infringed creates a nuisance Party specially injured may have action .... 14. Case in New Hampshire ....... 15. Obstruction, if illegal, per se a nuisance 324 325 325 326 327- -330 330 330 330 330 331 331 331 332 332 332 333 XXV111 ANALYSIS OF THE CONTENTS. SECTION XVII. OltSTRUCTION OF STREAMS BY COMPANY'S WORKS. Cannot divort stream without compensation .... Company liable for defective construction .... So also if they use defective works, built by others . . . Company liable to action, where mandamus will not lie Company liable for defective works, done according to their plans G. When a railway " cuts off" wharves from the navigation . 333 333 . 333 334 . 334 334, 335 SECTION XVIII. OBSTRUCTION OF PRIVATE WAYS. 1. Obstruction of private way matter of fact, need not be illegal . . 335 2. Farm road on one's own land not private way . . . 335, 336 3. But railway may lawfully pass along public street . . . 336 SECTION XIX. STATUTE REMEDY EXCLUSIVE. 1. Remedy for land taken, exclusively under the statute . . . 336 2. But if company do not pursue statute are liable as trespassers. Liable for negligence also 337, 338 3. Courts of equity often interfere by injunction ..... 338 4. Important case in the House of Lords ..... 338, 339 5. Right at law must be first established 339 6. Where statute remedy fails, common-law remedy exists . . . 339 7. The general rule adhered to in America ..... 339, 340 8. Company adopting works responsible for amount awarded for land damages 340 SECTION XX. LANDS INJURIOUSLY AFFECTED. 1. Obstruction of way, loss of custom ..... 2. Equity will not enjoin legal right ..... 3. Liable for building railway, so as to cut off wharf . 4. Not liable for crossing highway on level .... 5. English statute only includes damages by construction 6. Equity will not enjoin a doubtful claim .... 7. Damages, unforeseen at the time of the appraisal, maybe recov ered in England ........ 8. Injuries to ferry and towing-path compensated . 9. 10. Remote injuries not within the statute .... 11. Damages compensated, under statute of Massachusetts 12. Damages not compensated, as being too remote 13. For negligence in construction, remedy at common law 14. Or neglect to repair ........ 15. Recovery under the statute, &c. ..... 16. Possession by railway, notice of extent of title 1 7. Railways have right to exclusive possession of roadway 340, 341 341, 342 342 342 342 342, 343 343 343, 344 344 . 345 345 345, 346 346 346 346 , 347 ANALYSIS OF THE CONTENTS. XXIX SECTION XXI. DIFFERENT ESTATES PROTECTED. 1. Tenant's good-will and chance of renewal protected . . 347, 348 2. Tenants entitled to compensation for change of location . . 348 3. Church property in England, how estimated ..... 348 4. Tenant not entitled to sue as owner of private way . . . 348 5. Heir should sue for compensation 348, 349 6. Lessor and lessee both entitled to compensation . . . . 349 7. Right of way, from necessity, protected ...... 349 8. Mill-owner entitled to action for obstructing water . . . 349 9. Occupier of land entitled to compensation .... 349, 350 10. Tenant, without power of alienation, forfeits his estate by license to company ........... 350 11. Damages not transferable by deed of land after they accrue . . 350 SECTION XXII. ARBITRATION. 1. Attorney, without express power, may refer disputed claim . . 350 2. Award binding unless objected to in court 351 SECTION XXIII. STATUTE OF LIMITATIONS. 1. General limitation of actions applies to land claim . . . 351 2. Filing petition will not save bar 351, 352 3. Acquiescence of forty years by land-owner, effect of 352 4. The estoppel will take effect if the use is clearly adverse . . .352 CHAPTER XII. REMEDIES BY LAND-OWNERS UNDER THE ENGLISH! STATUTE. SECTION I. COMPANY BOUND TO PURCHASE THE WHOLE OF A HOUSE, ETC. 1. The company to take the accessories with the house . . . 353 2. But the owner has an election in regard to that . . . 353, 354 3. A deposit of the appraised value means the value of all the company are bound to take ......... 354 4. Company bound to take all of which they take part, and pay special damage besides • . . 354, 355 5. Where the company desire part, not compellable to take whole, un- less they persist in taking part ....... 355 6. Land separated from house by highway not part of premises . 355, 356 SECTION II. THE COMPANY COMPELLABLE TO TAKE INTERSECTED LANDS, AND THE OWNER TO SELL. 1. When less than half an acre remains on either side, company must buy • 356 2. Owner must sell, where land of less value than railroad crossing 356, 357 3 and 4. Word " town," how construed 357 XXX ANALYSIS OF THE CONTENTS. SECTION III. EFFECT OF NOTICE TO TREAT FOR THE PURCHASE OF LAND. 1. Important question under statute of limitations .... 357 2. Company compelled to summon jury . ...... 35 7 3. Ejectment not maintainable against company .... 358 4. Powers to purchase or enter, how saved . . . . . 358, 359 5. Subsequent purchasers affected by notice to treat as the inception of title . . . . . . ... . . .359 6. But the notice may be withdrawn before anything is done under it 359 7. Not indispensable to declare the use, or that it is for station, and an- other company to participate in use 359 SECTION IV. REQUISITES OF THE NOTICE TO TREAT. 1. Notice to treat must, in terms or by reference, accurately describe land 360 2. After notice to treat company compellable to purchase. Company cannot retract after giving notice to treat ..... 360 3. New notices given for additional lands ..... 360, 361 4. Power to take land not lost by former unwarranted attempt . . 361 5. Lands may be taken for branch railway . . . . • .361 6. Effect of notice in case of a public park ...... 3J1 SECTION V. THE NOTICE MAY BE WAIVED BY THE PARTY ENTERING INTO THE NEGOTIATION. 1. Notice must be set forth in proceedings 361 2. Agreement to waive operates as an estoppel .... 361,362 3. Certiorari denied where party has suffered no injury .... 362 SECTION VI. TITLE OF THE CLAIMANT MUST BE DISTINCTLY STATED. 1. Claimant's reply to notice should be clear and accurate . . . 362 2. Award bad which does not state claimant's interest . . . 362, 363 3. Where lands are held by a receiver or commission for a lunatic. Expression "fee simple in possession " ..... 363 n. 3. Analogous American cases ■ . . . ... • 363, 364 SECTION VII. THE CLAIM OF THE LAND-OWNER MUST CORRESPOND WITH THE NOTICE. 364 CHAPTER XIII. ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. SECTION I. LANDS TAKEN OR INJURIOUSLY AFFECTED WITHOUT HAVING PREVIOUSLY MADE COM- PENSATION TO THE PARTIES. 1. No entry under English statutes without previous compensation, ex- cept for preliminary survey > 365 ANALYSIS OF THE CONTENTS. XXXI 2. Legal remedies against company offending . ' . . . . 365 3. What acts constitute taking possession under statute .... 366 4. Company may enter with land-owner's consent after agreement for arbitration .......... 366 5. Bond may be given in certain cases ...... 366,367 SECTION II. THE PROCEEDINGS REQUISITE TO ENABLE THE COMPANY TO ENTER (TON LAND. 1. Provisional valuation under English statutes ..... 368 2. Irregularities in proceedings ........ 368 3. Penalty for irregular entry upon lands ..... 368, 369 4. Entry after verdict estimating damages, but before judgment . . 369 5. Mode of assessing damages provided in charter not superseded by sub- sequent general railway act . . . . . . . 369 SECTION III. MODE OF OBTAINING COMPENSATION UNDER THE STATUTE FOR LANDS TAKEN OR IN- JURIOUSLY AFFECTED, WHERE NO COMPENSATION IS OFFERED. 1. Claimant may elect arbitration or jury trial ..... 369 2. Method of procedure . 369,370 SECTION IV. THE ONUS OF CARRYING FORWARD PROCEEDINGS. 1. Rests upon claimant after company have taken possession . . .370 2. Miscellaneous provisions ....... 370,371 3. Proceedings cannot be had unless actual possession is taken, or in- jury done ............ 371 SECTION V. EQUITY WILL NOT INTERFERE BY INJUNCTION, BECAUSE LANDS ARE BEING INJURIOUSLY AFFECTED, WITHOUT NOTICE TO TREAT, OR PREVIOUS COMPENSATION. 1. Claimant must wait until works are completed .... 371,372 2. Even if appearance of land will be greatly altered . . . . 372 3. How far equity interferes where legal claim of party is denied . .372 4. Where a special mode of compensation has been agreed upon . 372 SECTION VI. SHERIFF'S JURY OR ARBITRATOR CANNOT DETERMINE THE QUESTION OF RIGHT IN THE CLAIMANT, BUT ONLY THE AMOUNT OF DAMAGES. 1. Later English decisions sustain this view 373 2 and 3. Statement of recent case 373,374 4. In most American states assessment, is final . . . . .374 5. Plaintiff will recover damages assessed, if he suffered any legal in- jury .... 374 SECTION VII. THE EXTENT OF COMPENSATION TO LAND-OWNERS, AND OTHER INCIDENTS BY THE ENGLISH STATUTES. 1. Liberal compensation allowed 375 2. Decisions under English statutes . . . . . . 375,376 XXXli ANALYSIS OF THE CONTENTS. 3. Limit of period for estimating damages . . . . . .376 4. Whether claim for damages passes to the devisee or executor . . 376 5. Vendor generally entitled to damages accruing during his time . .376 SECTION VIII. EIGHT TO TEMPORARY USE OF LAND TO ENABLE COMPANY TO MAKE ERECTIONS UPON OTHER LANDS. 1. Right to pass another railway by a bridge gives temporary use of their land, but no right to build abutments upon it . . . 377 2. Ri. Union 296 Duke v. Cahawba Nav. Co. 66 of Norfolk v. Tennant 372 Dun v. Charleston 336 Duncan v. Chamberlain 150 v. Hodges 124 v. Luntley 112 v. Railroad Co. 524 Duncuft v. Albrecht 109, 131, 132 Dunham v. Trustees of Rochester 233 Dunn v. City of Charlestown 219 v. North Missouri Railw. 445 Dunston v. Imperial Gas Co. 410, 570 Durham & Sunderland R. v. Walker 2, 3 Durkee v. Vermont Central Railw. 131 Dutchess Cotton Manufacturing Co. v. Davis 163 Duvergier v. Fellows 111 Duxbury v. Vermont Central Railw. 535 Dyer v. Jones 412 v. Walker & Howard 68 Dynen v. Leach 521 E. E. & W. I. Docks & B. J. Railw. v. Gattke 296. 336, 340, 372 Eakin v. Raub 282 Eakright v. L. & N. I. Railw. 66, 174 Eales v. Cumberland Black Lead Co. 15 Earl of Lindsay v. Great Northern Railw. 44 Earle v. Hall 508 East Anglian Railw. v. Eastern Counties Railw. 28, 33, 44, 197, 615 East Lancashire Railw. v. Hatters- ley 433 v. L. & Yorksh. Railw. 592 East London Water Works Co. v. Bailey 22 East Pascagoula Hotel Co. v. West 66, 108 East Penn. Railw. v. Hiester 275 v. Hottenstine 275 East Tennessee & Ga. Railw. v. St. John 549 East Wh. M. M. Co. in re 145 Easton v. Little Miami Railw. 504 Eastern Counties Railw. ex parte 367 v. Broom 102 Eastham v. Blackburn Railw. 280 Eastwood i\ Bain 564 Edgerly v. Emerson 84 Edinboro' & Dundee Railw. v. Leven 360 Edinburgh & G. Railw. v. Stirling &D. Railw. 612 Edinburgh, L. & N. H. Railw. v. Ilibblewhite 165, 214 Edinburgh, Perth, & Dundee Railw. v. Philip 39, 49 Edwards v. Grand Junction Railw. 1 7, 20, 35, 48 v. Great Western Railw. 448 v. Union Bank of Florida 511 Egbert v. Brooks 134 Elder v. Bemis 508 Elderton v. Emmens 586 Electric Tel. Co. in re 156 v. Bunn 156 Ellicottville Plank-Road v. Buffalo 301 Elliott, in re 381 v. Fairhaven & Westville Railw. 314 v. Northeastern Railw. 344 v. South Devon Railw. 357 Ellis v. Coleman 617 v. Essex Bridge Co. 114 v. London & Southwestern Railw. 467 v. Marshall 69, 195 v. Sheffield Gas Consumers' Co. 507 v. Swanzey 300 Ellison v. Mobile & Ohio Railw. 1 74 Elsworth v. Cole 119 El wood v. Bullock 88 Elysville v. O'Kisco 163 Enfield Toll Bridge v. Hartford & N. H. Railw. 237, 258 Embury v. Conner 219, 230 Emmerson's Case 143 Enthoven v. Hayle 124 Eppes v. M. G. & T. Railw. 209 Erie & Northeastern Railw. v. Casey 253 Ernest v. Croysdell 617 v. Nichols 558 Essex Bridge Co. v. Tuttle 164 Etty v. Bridges 150 Eustis v. Parker 54 Evans v. Haefner 248, 285 Evansville Railw. v. Cochran 264 Evansville & C. Railw. v. Cochran 484 v. Fitzpatrick 264, 4S4 lviii TABLE OF CASES. Evansville & Crawfordsville Railw. v. Dick 234, 252, 311 Everhart v. West Chester & Phila- delphia Railw. 184,187,199 Eversfield v. Midsussex Railw. 245, 389 Eward v. Lawrenceburg & Upper Miss. Railw. 516 F. F. Street, Matter of 263 Falconer v. Campbell 69 Faley v. Hill 422 Falls v. Belfast & B. Railw. 356 Farlow, ex parte 347 Farmers' Bank of Maryland v. Iglehart 114 Farnum v. Blaekstone Canal Co. 58 Farrow v. Vansittart 2 Farwell v. Boston & Worcester Railw. 520, 525, 530, 532 Faulkner v. Hebard 198 Faunce v. Burke 408 Faviell v. Eastern Counties Railw. 350 Fawcett v. York & North M. Railw. 470 v. Whitehouse 578 Fearnley v. Morley 447 Featherstonbaugh v. Porcelain Co. 566 Fenton v. Trent & Mersey Nav. Co. 344 Fenwick v. Bell 554 Feoffees of Heriot's Hospital v. Gib- son 385 Ferguson v. Brighton & S. C. Railw. 355 Ferris v. Van Buskirk 491 Fewings v. Tisdal 587 Ffooks v. London & S. W. Railw. 74, 75 Field v. Field 84 v. Lelean 120 v. Newport, Ab. & Hereford Railw. 447 v. Vermont & Mass. Railw. 271 Filder v. L. Brighton & South Coast Railw. 515, 585 Finlay v. Bristol & Exeter Railw. 597 Finnie v. Glasgow & S. W. Railw. 449 First Parish in Sutton v. Cole 61 Fiser v. Miss. & Tenn. Railw. 108 Fish v. Dodge 508 Fisher v. Essex Bank 153 v. Evansville & Crawfords- ville Railw. 201 v. Price 119 Fishmongers' Co. v. Robertson 596 Fitch v. N. H. M. L. & Stonington Railw. 595 Fitchburg Railw. v. Boston & Maine Railw. 221, 271, 273, 330, 342 v. Charlestown M. Fire Ins. Co. 456 v. Gage 662 v. Grand Junction Railw. & Depot Co. 405 Fitzpatrick v. New Albany & Sa- lem Railw. 527 Flagg v. Lowber 580 Flamank, ex parte 219 Fletcher v. Auburn & Syracuse Railw. 284, 299, 302 v. Boston & Maine Railw. 591 v. Great Western Railw. 297 v. Rylands 458 Flower v. London, Br. & S. Coast Railw. 236 Fooks v. Wilts., Somerset, & Wey- mouth Railw. 365 Foote v. City of Cincinnati 102 Ford v. Ch. & N. W. Railw. 284, 313 Forrest v. Manchester, S. & L. Railw. 558 Forster v. Cumberland Valley Railw. 351 Fort Edward, &c. Plank-Road Co. v. Payne 1 70 Forward v. Hampshire & Hampden Canal Co. 257 Fosberry v. Waterford & Limerick Railw. 404 Foster v. Bank of England 217 v. Essex Bank 194, 511, 516 v. Oxford W. & W. R. 85 v. Walter 61 Fowler v. Kennebec & Portland Railw. 408 Fox v. Northern Liberties 511 v. State of Ohio 231 Franklin v. Southeastern Railw. 632 Bridge Co. v. Wood 3 Glass Co. v. Alexander 161 v. White 161 Franklyn v. Lamond 125 Fraser v. Whalley 565 Frazier v. Pennsylvania Railw. 521, 531 Freedle v. North Carolina Railw. 274 Freeman v. Winchester 163, 164 Fry's Ex'r. v. Lex. & Big S. Railw. 107, 165, 198, 199, 392 Fuller v. Dame 578 Furniss v. Hudson River Railw. 289, 398 Fyler v. Fyler 149 TABLE OF CASES. lix (I. Gage v. Newmarket Railw. 30, 33, 37 Gahagan v. Boston & Lowell Railw. 551, 553 Galena & Chicago Railw. v. Griffin 480, 497 v. Jacobs 550 v. Loorais 548 v. Yarwood 553 Galloway v. Mayor & Commonalty of London & Metropolitan Railw. 238 Galvanized Iron Co. v. Westoby 13 Ganett v. Salisbury & Dorset Junc- tion Railw. 433 Gardiner v. Boston & Worcester Railw. 308 v. Smith 491,492 Gardner v. Charing-Cross Railw. 359 v. Newburgh 229, 282, 283, 333 Garrick v. Taylor 120 Garris v. Portsmouth & Roanoke Railw. 468 Garrison v. Memphis Ins. Co. , 456 Gaskell v. Chambers 571 Gawthern v. Stockport, Desley, & W. Railw. 323 Gayle v. Cahawba R. 163 Gebhart v. Junction Railw. 162 Gerhard v. Bates 142 Getty v. Hudson River Railw. 326 Gibbons v. Ogden 328 Gibbs v. Trustees of Liverpool Docks 606 Gibson v. East India Co. 410 Giesy v. Cincinnati, Wil. & Zanesv. Railw. 251, 264 Gifford v. New Jersey Railw. 196 Gilbert v. Cooper 6 v. Havermeyer 349 Giles v. Hurt 165 v. Taff Vale Railw. 515 Gillet v. Moody 170 Gillinwater v. Mad. & Ind. Railw. 239, 527, 541 Gilman v. Hall 412 Gilpin v. Howell 110 Gilshannon v. Stony Brook Railw. 523, 532, 541 Gittings v. Mayhew 11 Glamorganshire Canal Co. v. Blake- more 391 Glass Co. v. Dewey 162 Gleason v. Briggs 544 Glover v. London & Northwestern Railw. 515 Glover v. North Staffordshire Railw. 234, 294, 372 v. Powell 329 Goddard v. Hodges 13 v. Pratt 1 1 Goffi;. Great Northern Railw. 518 Gold v. Vermont Central Railw. 278 Gold Mining Co. ex parte 585 Gooday v. Colchester & Stour Valley Railw. 17,31,44 Goodman v. Pocock 585 Goodrich v. Eastern Railw. 332 v. Reynolds 183 Goodtitle v. Kibbe 231 Goodwin v. Union Screw Co. 573 Gorman v. Pacific Railw. 469, 473 Goshen Turnpike Co. v. Hurtin 163 Gould v. Hudson River Railw. 232, 310, 325 Governor & Company of Copper Miners v. Fox 596, 598, 600, 601 Governor & Company of Plate Manufacturers v. Meredith 306 Grady, ex parte 145, 618 Graff v. City of Baltimore 286 Graff's Ex'r. v. Pittsburg & Steu- benville Railw. 117, 182 Graham, ex parte 68 v. Birkenhead 74 Grand J. & Depot Co. v. County Commissioners 323 Grand Junction Railw. v. White 485 Grannahan v. Hannibal & St. Jo- seph Railw. 446 Grant v. Mechanics' Bank of Phil- adelphia 115 Gratz v. Redd 164 Gravenstine's Appeal 74 Gray v. Coffin 150 v. Hook 578 v. Liverpool & Bury Railw. 47, 219,234 v. Monongahela Navigation Co. 195 v. Portland Bank .63 Grayble v. York & Gettysburg Turnpike Co. 187, 188 Grays v. Lynchb. & Salem Turn- pike Co. 67, 164 Great Falls & Conway Railw. v. Copp 178 Great Luxembourg Railw. v. Mag- nay 583 Great North of England, Clarence & Hartlepool Junction Railw. v. Clarence Railw. 377 Great North of England Railw. v. Biddulph 7, 147 lx TABLE OF CASES. Great Northern Railw. ex parte 367 v. Eastern Counties Railw. 588 r. Harrison 437 v. Kennedy 165 v. S. Yorks. Railw. 449 Great Western Railw. v. Bacon 480 v. Birmingham & Ox- ford June. Railw. 40, 592 v. Decatur 308 v. Geddis 481 v. Goodman 102 v. Helm 479 v. Metropolitan Co. 143 v. Morthland 480 v. Oxford, Worcester, & Wolverhampton Railw. 622 v. Rushout 83, 592 v. Thompson 486 Greathed v. S. W. & Dorchester Railw. 6 Green v. Boody 248 v. Miller 84 v. Morris & Essex Railw. 267, 280 v. Murray 130 v. Seymour 69 v. Winter 134 Greenaway v. Adams 133 Greene v. Dennis 3 Greenville & Columbia R. v. Cath- cart 164 v. Coleman 197, 200 v. Nunnarnaker 268 v. Partlow 262, 263 v. Smith 163 v. Woodsides 188 Greenwood v. Wilton Railw. 271 Gregory v. Patchett 618 Grizewood v. Blane ' 119 Groux & C. Co. v. Cooper 62 Guest v. Homfray 226 Gunn v. London & Lancashire Ass. Co. 16, 584 H. H. & P. Plank-Road Co. v. Bryan 187, 209 H. B. Coal Co. v. Teague 167 Hackett v. Boston, Cone. & Mont. Railw. 277 Haddon v. Ayers 584 Hager v. Reed 131 Hagerstown Turnpike Co. v. Creeger 3 Ilaight v. City of Keokuk 312 Haines v. Taylor 339 Haldeman v. Penn. Railw. 255 Hale v. Union Mutual Fire Ins. Co. 511 Hall v. Chaffee 227 v. Norfolk Estuary Co. 112,130 v. Pickering 516 v. Power 93, 94 v. Selma & Tenn. Railw. 188 v. U. S. Insurance Co. 114, 182 v. Vt. & Mass. Railw. 43, 570, 571 Halloran v. N. Y &. Harlem Railw. 466 Halstead v. Mayor of New York 233 Hambro v. Hull & London Fire Ins. Co. 564 Hamden v. New Haven & North- ampton Co. 535 Hamilton v. Annapolis & Elk Ridge Railw. 255, 282 v. New York & Harlem Railw. 307 v. Newcastle & Danville Railw. 569 v. Smith 8 Avenue, Matter of 261 Plank-Road v. Rice 197, 203 Hammack v. White 464 Hammon v. Southeastern Railw. 453 Hanna v. Cin. & F. W. Railw. 198 Hannibal & St. Joseph Railw. v. Higgins 538 v. Rowland ^ 279 Hannuic v. Goldner 118, 127 Harborough v. Shardlow 286 Harby v. E. & W. I. Docks & B. J. Railw. 396 Hard, Adm'r. v. Vt. & Canada Railw. 523, 532 Harding v. Goodlet 219 Hare v. London & N. W. Railw. 120, 613 v. Waring 127 Hargreaves v. Lancaster & Preston J. Railw. 43 v. Parsons 109 Harlaem Canal Co. v. Seixas 164 Harrington v. Du Chastel 578 Harris, ex parte 1 20 v. Roof 579 Harrisburg v. Crangle 283 Harrison v. Heathorn 9 v. Lexington & Ohio Railw. 221 Hart v. Mayor of Albany 233 v. Western Railw. 456 Hartford & N. H. Railw. v. Boor- man 155, 184 v. Croswell 193, 194 TABLE OF CASES. Ixi Hartford & N. H. Railw. v. Ken- nedy 163 Hartly v. Ilarman 587 Harvard Branch Bank v. Rand 278 Harvey v. Lackawanna & Bloomsb. Railw. 266, 347 v. Lloyd 273, 364 v. Thomas 369 Hasking v. Phillips 367 Haslett's Executors v. Wotker- spoon 15 Haswell v. Vermont Central Railw. 367 Hatch v. Vermont Central Railw. 234, 265, 294, 306, 333, 343 Hattersley v. Shelburne 50, 618 Hawkes v. Eastern Counties Railw. 26, 33, 35, 37 Hawkins, ex parte 376 Hawley v. Baltimore & Ohio Railw. 520,531 Hawthorne v. Newcastle-upon-Tyne & N. Shields Railw. 422 Hay v. Cohoes Company 287, 511 Hayden v. Cabot 535 v. Noyes 89 Hayes v. Shackford 243 v. Western Railw. 520, 523 Hayne v. Beauchamp 65, 108 Haynes v. Palmer 185 v. Thomas 310 Hayward v. Mayor of New York 253 Hazen v. Boston & Maine Railw. 243, 253, 516 Healey v. Story 568 Heane v. Rogers 10 Heart v. State Bank 110, 116 Heaston v. Cincinnati & F. W. R. 66, 67 v. Cincinnati & C. Railw. 147, 149 Heathcote v. North Staffordshire Railw. 45 Hedges v. Metropolitan Railw. 359 Hemingway v. Fernandes 2 Hennessey v. Farrell 409 Henry v. Alleghany & Pittsb. Bridge Co. 294, 306 v. Dubuque & Pacific Railw. 252,266, 275, 285, 485, 489 i'. Rut. & Bur. Railw. 571 v. Vermilion Railw. 158, 170, 187, 207 v. Vermont Central Railw. 296 Henderson & Nashville Railw. v. Leavell 172 Henderson v. Australian Royal Mail Steam Nav. Co. 598 Henderson v. Mayor of New Or- leans 282 v. Railw. 160, 621 Hentz v. Long Island Railw. 307 Herbein v. The Railroad 277 Herkimer M. & H. Co. v. Small 163 Herrick v. Vermont Central Railw. 411,416, 423, 431 Herring v. Wil. & R. Railw. 548 Hersey v. Merrimac Mutual Fire Insurance Co. 276 Hertford v. Boore 226 Hester v. Memphis & Charleston Railw. 201 Hetherington v. Hayden 249 Hewitt v. Price 119 Hewson v. London & S. W. Railw. 355 Hibbard v. New York & Erie Railw. 100, 102 Hibble white v. McMorine 118,119, 124, 127 Hibernia Turnpike Co. v. Hender- son 187 Hickock v. Pittsburgh 233 Hicks v. Launceston. 68 Higgins v. Livingstone 570 Highland Turnpike Co. v. McKean 67, 107, 187 Hightower v. Thornton 163, 170 Higley v. Lancaster & Y. Railw. 358 Hilcoat v . Archbishops of Canter- bury & York 348 Hill v. Great N. Railw. 358 v. Manchester Waterworks Co. 575 v. Mohawk & H. Railw. 254 v. South Staffordshire Railw. 597 v. Western Vermont Railw. 249 Hilles v. Parish 58 Hilliard v. Goold 92, 103, 105, 557 v. Richardson 508 Hilton v. Giraud 109 Hitchcock v. Danbury & Norwalk Railw. 393 v. Giddings 142 Hoagland v. Bell 157 v. Cin. & F. W. Railw. 162 Hoare, ex parte 138,617 Hobbitt v. London & N. W. Railw. 506 Hochster v. De Latour 412 Hodges v. Rut. & Bur. Railw. 571 Hodgkinson v. National Live Stock Ins. Co. 583 Hodson v. Davies 129 Hogg v. Zanesville Canal Co. 326 Holcomb v. N. H. D. B. Co. 84 Holden v. Rut. & Bur. Railw. 492, 493 Hole v. Barlow 339 lxii TABLE OF CASES. Hole v. Sittingbourne & Shecrness Eailw. 633 Holliday v. St. Leonard's Shore- ditch 606 Hollister v. Union Co. 296 Holmes v. Gilliland 67 v. Higgins 13 Homersham v. Wolverhampton Waterworks 412, 597 Honner v. Illinois Central Railw. 520, 531 Hooker v. N. H. & N. Y. Railw. 290, 296 v. N. H. & Northampton Co. 333 v. Utica & Minden Turn- pike 251 Hop & Malt Company 139 Hopkins v. Prescott 578 Horn v. Atlantic & St. Lawrence Railw. 467, 491 Hornaday v. Ind. & 111. Central Railw. 202 Horner's Estate, in re 219 Horton v. Westminster Improve- ment Comm. 575 Hortsman v. Lexington & Cov. Railw. 220 Hotchkiss v. Auburn & Rochester Railw. 271 Housatonic Railw. v. Waterbury 469 Howard v. Wilmington & Susque- hannah Railw. 408 Howden v. Simpson 24, 25 Howe v. Starkweather 110 Hubbard v. Chappel 664 v. Russell 334 Huddersfield Canal Co. v. Buckley 165, 182, 184 Hudson v. Carman 66, 67, 85 & Delaware Canal Co. v. N. Y. & Erie Railw. 258 River Railw. v. Outwater 284, 369 Hueston v. Eaton & H. Railw. 338 Hugh v. N. O. & C. Railw. 526 Hughes v. Chester & Holyhead Railw. 400 v. Parker 43 v. Providence & Worces- ter Railw. 300, 398 Hull Co. v. Wellesley 15, 167 Humble v. Langston 113, 122, 123, 127, 132,134,135,136,137 v. Mitchell 109, 130 Humfrey v. Dale 128 Hunt v. Adams 124 v. Gunn 15 Hunt v. Shrewsbury & Chester Railw. 195 v. Test 579 Hurd v. Rut. & Bur. Railw. 489 Hutchins, Adm'r. v. State Bank 110 Hutchinson v. Manchester, Bury, & Rossendale Railw. 369 v. York & Newcastle Railw. 507 v. York, Newcastle & Berwick R. 520, 531 Hutton v. London & S. W. Railw. 218, 372 Huyett v. PhiL & Read. Railw. 289, 455 Hyam, ex parte 156 Hyatt v. Whipple 67 I. 111. Central Railw. v. Buckner 546 Ulidge v. Goodwin 631 Illinois & Michigan Canal i\ Chica- go & R. I. Railw. 261 Illinois & Wisconsin Railw. v. Van Horn 274, 277 Blinois Central Railw. v. Davney 515 v. Dickerson 498 v. Goodwin 480 v. Phelps 480, 498 v. Reedy 500, 553 v. Swearingen 480, 496,498 v. United States 231, 499 Illinois Grand T. Railw. v. Cook 392 Illinois River Railw. v. Beers 194 v. Casey 73 v. Zimmer 73 Imlay v. Union Branch Railw. 309 Imperial Gas Light Co. v. Broad- bent 338, 339 Mercantile Credit Asso- ciation, in re 76 Ind., &c. Railw. v. Elliott 501, 502 v. Meek 493 v. Moore 501 v. Snelling 501 v. Wright 497 Ind. & Cin. Railw. v. Guard 498 v. Jewett 85 v. Kercheval 493 v. Kinney 499 v. McKinney 498 v. Oestel 497 Ind. & Cincin. Railw. v. Caldwell 466 Ind. & Madison Railw. v. Solomon 604 Ind. Central Railw. v. Hunter 263, 265 v. Leamon 496 TABLE OF CASES. lxiii Ind., Pittsb. & Cleve. Railw. v. Tritt 497 Indian. Railw. v. Gapen 493 Indiana & Ebensburg Turnpike Co. v. Phillips 195 Indiana, &c. Railw. v. Fisher 494 v., Kercheval 494 Indiana Central Railw. v. Moore 498 v. Oakes 271, 338 Indianapolis Railw. v. Adkins 498 v. Klein 523, 531 v. Love 523, 531 v. SpaiT 478 v. Williams 478 Indianapolis & C. Railw. v. Kin- ney 468 v. Meek 504 v. Townsend 493 v. Wharton 479 Inge v. Birmingham 131 Inglis v. Great Northern Railw. 165, 572 Ins. Co. v. Smith 116 Irish Peat Co. v. Phillips 15 Irvin v. Turnpike Co. 198, 257 Irvine v. Swann 194 i?. Turnpike Co. 194 v. Walker 194 Isbell v. N. Y. & N. H. Railw. 501, 503, 548, 631, 632 Isham v. Ben. Iron Co. 110 Jackson v. Cocker 111, 132, 133 v. Lamphire 237 v. North Wales Railw. 431 v. Rutland & Burlington Railw. 251,466,499 Jacob v. Louisville 264 Jacobs v. Peterborough & Shirley Railw. 225 Jacques v. Chambers 132, 149, 150 James v. Portsmouth & Concord Railw. 442 v. Woodruff 144 River & Kanawha Co. v. Turner 263 Jameson v. Ware 440 Janesville v. Milw. & Miss. Railw. 313 Jarrett v. Kennedy 12 Jefferson Railw. v. Applegate 493 v. Dougherty 493 Jencks v. Coleman 101 Jenkins v. Union Turnpike Co. 187 Jennings v. Broughton 212 Jennings v. Great Western Railw. 105 Jewell v. Stead 395 Joel v. Morrison 514 Johns v. Johns 110 Johnson, ex parte 557 v. A. & St. L. Railw. 290 v. Anderson 300 v. Bank of United States 124 v. Hudson River Railw. 545 v. Shrewsbury & B. Railw. 589 v. Wabash & M. V. Railw. 205 Johnston v. S. W. R. R. Bank 65 Joliet & N. I. Railw. v. Jones 461 Jones v. Bird 607 v. Chamberlain 443 v. Mersey Board 606 V. Waltham 535 Josephs v. Pebrer 133 Joy v. Jackson & Michigan Plank- Road Co. 70 Jubb v. Hull Dock Co. 348 Judson v. New York & New Haven Railw. 400 Junction Railw. v. Reeve 205,576 K. K. P. & R. Railw. v. Marsh Kartright v. Buffalo Commercial Bank Kean v. Johnson Keech v. Bait. & Wash 392 144 73 Railw. 67, 477, 628 520 490, 491 277 Keegan v. Western Railw Keith v. Cheshire Railw. Kellogg v. Krauser Kelly v. Mayor of New York 507 Kemp v. London & Br. Railw. 360 Kerns v. O'Reilley 416 Kennard v. Burton 547 Kennebec & Portland Railw. v. Kendall 164 v. Waters 159 Kennedy v. Colton 205 Kennett Nav. Co. v. Withington 337 Kennett's Petition 295 Kenosha, Rockford, & Rock Island Railw. v. Marsh 198 Kent v. New York Central Railw. 446, 587 Keppell v. Bailey 2 Kerr, Matter of 259 Kerridge v. Hesse 9 Kerwhacker v. C. C. & C. Railw. 490, 548, 631 Ixiv TABLE OF CASES. Kerwin, ex parte 124 Kid well v. Bait. & Ohio Railw. 416, 417 Kidwelly Canal Co. v. Raby 7, 203 Kimball V. Cocheco Railw. 349 v. Kennebec & Portland Railw. 280 v. White Water Valley Canal 336 Kin"- v. Boston & Worcester Railw. 520 v. Bristol Dock Co. 344 v. Chipping Norton 109 v. Commissioners of Manches- ter 360 v. Commissioners of Thames & Isis 344 v. Commissioners under Lon- don Dock Acts 376 v.Elliott 64,108,190 v. Great Mario w 84 v. Hungerford Market Co. 360 v. Langhorn 77, 82 v. Leeds & Selby Railw. 344 v. London Dock Co. 344 v. Pagham 306 v. Pasmore 69 i'. Pease 454 V Pedley 508 v. Theodorick 77 v . Whitaker 84 v. Winwick 84 v. Witham Nav. Co. 376 v. Wycombe Railw. 305, 359 Kirk v. Bell 563 v. Guardians of Bromley Union 411 Kish v. Venezuela Railw. 566 Klein v. Alton & Sangamon Railw. 163, 188 Knapp t'. L. C. & Dover Railw. 358 Knight v. Abert 467 v. Barber 109 v. Carrolton Railw. 391 v. Fox 506 v. Toledo & Wabash Railw. 498 Knorr v. Germantown Valley Railw. 336 Koch v. Dauphin 252 Kramer v. Cleve. & Pittsb. Railw. 274 Kyle v. Auburn & Roch. Railw. 291, 483 L. & Y. Railw. v. Evans 343, 372 Lackland v. North Missouri Railw. 314 Lade v. Shepherd 303 Lafayette & Ind. Railw. v. Shriner 468, 469, 492, 499 Lafayette Plank-Road Co. v. New Albany, &c. Railw. 289, 293, 346 Laird v. Birkenhead Railw. 227 Lake v. Butler 395 v. Duke of Argyll 14 Lake Erie, &c. Railw. v. Eckler 446 Lake Ontario, A. & N. Y. Railw. u. Mason 147, 190 Lamert v. Heath 128 LAmoureux v. Gould 204 Lamprell v. Billericay Union 597, 599 600, 601 Lancashire & Y. Railw. v. Evans 343 v. East L. Railw. 612 Lancaster & Carlisle Railw. v. Ma- ryport & Carlisle Railw. 323 Lancaster Canal Co. v. Parnaby 603 Lane, ex parte 145, 573 Langley v. Boston & Maine Railw. 592 Langlois v. Buffalo & Rochester Railw. 492, 523 Lauderbrun v. Duffy 289 Laugham v. Great Northern Railw. 368, 372 Laugher v. Pointer 506, 508 Lawrence v. Great N. Railw. 289, 334, 343 v. Knowles 127 Lawrenceburg & Upper Miss. Railw. v. Montgomery 541 Lawton v. Fitchburg Railw. 485 Leach v, Fobes 131 Lead Mining Co. v. Merryweather 585 Leame v. Bray 515 Leavitt v. Towle 300 Lebanon v. Olcott 337 Lee v. Milner 375 Leech v. Caldwell 416 Leeds & T. Railw. v. Fearnley 191 Lefever v. Lefever 139 Legg v. Belfast & Bellamy Railw. 350 Lehigh Valley Railw. v. Lazarus 292 v. Trone 289, 331 Leigh v. Hind 394 Lemmex v. Vermont Central Railw. 290 Leominster Canal Co. v. Shrews- bury & Hereford Railw. 593 Leonardsville Bank v. Willard 67 Lesher v. Wabash Nav. Co. 243, 247 Levering v. Railway Co. 240 Lewey's Island RaUw. v. Bolton 166 Lewis v. Billing 6 v. Robertson 108 v. Smith 14 TABLE OF CASES. lxv Lewis v. Wilm. & Manchester Railw. 350 Lewiston v. County Commissioners 243 v. Junction Railw. 337 Lexington & Ohio Railw. v. Ap- plegate 307 Lexington & Ohio Railw. v. Orms- by 225 Lexington & West Cambridge Railw. v. Chandler 163,166,175, 186 v. Staples 167 Lichfield v. Simpson 338 Lincoln v. Saratoga & Schenecta- dy Railw. 273 Lincoln & K. Bank v. Richardson Lind v. Isle of Wight Ferry Lindsay v. Commissioners Lindus v. Melrose Linfield v. Old Colony Railw. 195 358 286 568 544, 612 Lister v. Labley 283 Little v. Newport, A. & H. Railw. 243, 389 Little Miami Railw. v. Collett 264 v. Naylor 265, 391 v. Stevens 523, 531 Littleton Manufacturing Co. v. Parker 176 Livermore v. Jamaica 265, 274 Livingston v. Lynch 194 v. Mayor of New York 300 Lloyd v. Mayor of New York Loch v. Venables 514 151 Loder v. Kekule 131 Lodge No. 1 v. Lodge No. 1 73 Logan v. Courtown 186 Lond., B. & S. C. Railw. v. L. & S W. & Portsmouth Railw. 589 Londesborough, ex parte London & B. Railw. v. Fairclough 12 118, 125, 165 v. Grand Junction Canal Co. 338, 377 v. Winter 602 London & Blackwall Railw. v. Board of Works 280 r. Letts 344 London & Brighton Railw. v. Wil- son 185 London & M. W. Railw. v. McMi- chael 179 London & N. W. Railw. v. Ack- royd v. Bradley 342 v. Skerton 223 372 404 vol. i. e London cSc N. W. Railw. v. Smith 372 London & S. W. Railw., ex parte Stevens 367 v. Southeastern Railw. 589 London Dock Co. v. Knebell 41 v. Sinnott 602 London Grand J. Railw. v. Free- man 155, 181 v. Graham 6, 155, 181 London Insurance v. London & Westminster Insurance Co. 62 Londonderry & Coleraine Railw. 146 Long Island Railw., Matter of 81, 92, 155,487 Lord v. Wormwood 500 Lord-Belhaven's Case 561 Lord James Stuart v. London & Northwestern Railw. 28, 36, 39, 40 Lord Petre v. Eastern Counties Railw. 26, 48 Lord Shrewsbury v. North Staf- fordshire Railw. 16 Lorymer v. Smith 118 Lou. & Frankfort Railw. v. Ballard 477,504 Louisville, Cincinnati, & Charleston Railw. v. Letson 72 Louisville & Frankfort Railw. v. Milton 469, 486 Louisville & Nashville Branch Turn- pike Co. v. Nashville & Ken- tucky Turnpike Co. 381 Louisville & Nashville Railw. v. Collins 527 v. Thompson 220, 263 Louisville Railw. v. Chappel 286 Lovering v. Railw. 254 Low v. Conn. & Pass. Railw. 43 v. Galena & Chicago Union Railw. 245 Lowber v. Mayor of New York 580 Lowe v. E. & K. Railw. 206 v. London & N. W. Railw. 439, 597 Lowell v. Boston & Lowell Railw. 507, 516, 535 Ludlow v. New York & Harlem Railw. 221 Lund, ex parte 156 v. Midland Railw. 236 Lunt v. London & N. W. Railw. 552 Lycoming County v. Gamble 450 Lyman v. Boston & Worcester Railw. 455 v. Norwich University 551 Lyndsay v. Conn. & Pass. Rivers Railw. 4 73,4 74 Lyon v. Jerome 243, 282 lxvi TABLE OF CASES. M. M. & M. Railw. v. Hodge 5G9 M. & M. Savings Co. v. O. F. Hall Ass. 572 Macedon & Bristol Plank-Road v. Lapliam 204 Macedon Plank-Road v. Lapham 197 MacGregor v. Dover & Deal Railw. 28, 33,44, 197 Macham v. Fitchburg Railw. 364 Mackey v. New York Central Railw. 546 Maclaren v. Stainton 151 Macon v. Macon & Western Railw. 238 Macon & Western Railw. v. Davis 472, 545 v. McConnell 346 Mad. & Ind. Railw. v. Kane 489 Maddick v. Marshall 14 Madison & I. Railw. v. Bacon 520, 531 Magetti v. N. York & Harlem Railw. 536 Mahon v. Utica & Sch. Railw. 299 Maltby v. N. W. Va. Railw. 166 Manchester & Lawrence Railw. v. Fisk 449 Manchester & Leeds Railw. v. Reginam 405 Manchester, Sh. & Lincolnshire Railw. v. Great Northern Railw. 250 v. Wallis 467,499 Mangles v. Grand Collier Dock Co. 155, 158, 187 Manley v. St. Helen's Canal & Railw. Co. 533 Mann v. Cooke 155, 163, 207 v. Currie 155, 163, 182 v. Great S. & W. Railw. 267, 336, 490 v. Pentz 158,163,170,184 Manning v. Commissioners under W.I. Dock Act 376 v. Eastern Counties Railw. 376 Manser v. N. & E. Railw. 338 Mansfield & Sandusky Railw. v. Yeeder 416 March v. C. & P. Railw. 333 Marine Bank of Chicago v. Ogden 409 Markham v. Brown 94 Markwell, ex parte 13 Marlborough Man. Co. v. Smith 114, 116, 557 Marquis of Salisbury v. Great Northern Railw. 311, 358 Marriage v. Eastern Counties Railw. 356 Marsh v. N. Y. & Erie Railw. 469 Marshall v. Bait. & Ohio Railw. 578 v. Queensborough 576 v. Stuart 525 Martin, ex parte 282 Mason v. Brooklyn & Newtown Railw. 393 v. Kennebec & Portland Railw. ■ 289, 336 Mass. Iron Co. v. Hooper 116 Masterton v. Mayor of Brooklyn 413 Maudslay, ex parte 13 Maund v. Monmouthshire Canal Co. 513 Maunsell v. M. Great Western (Ire- land) Railw. 50, 617 May v. Burdett 460 Mayor v. Randolph 306 Mayor and Burgesses of Lynn Regis 61 Mayor, &c. of City of New York v. Second Avenue Railw. 222 Mayor, &c. of Pittsburg v. Penn. Railw. 255 Mayor of Ludlow v. Charlton 410, 596,599,600 Mayor of Lynn v. Denton 216 Mayor of New York v. Bailey 507 v. Furze 334 Mayor of Norwich v. Norfolk Railw. 36, 614 Mavor of Southampton v. Graves 215 McAllister v. Ind. & Cin. Railw. 1 73 McArdle v. Irish Iodine Co. 600 McAulay v. Western Vermont Railw. 285 McCall v. Byram Manuf. Co. 58 v. Chamberlain 478 McClasky v. Grand Rapids & Ind. Railw. 162 McCluer v. Manchester & Law- rence Railw. 591 McClusky v. Cromwell 446 McCool v. Galena & Chicago Union Railw. 504 McCormack v. Terre Haute & Richmond Railw. 337 McCormick v. Lafayette 283 McCready v. Railw. Co. 455 McCullough v. Annapolis & Elk Ridge 85 McCullough v. Maryland 56 McDaniels v. Flower Brook Man. Co. 79 McDougall v. Jersey Imperial Ho- tel Co. 64, 143 McDowell v. N. Y. Central Railw. 495 TABLE OF CASES. lxvii McElroy v. Nashua & Lowell Railw. 603 McEwen v. Woods 128 McFarland v. Orange & Newark Horse-Car Railw. " 393 McGatrick v. Wason 526 McGinity v. Mayor of New York 606 McGregor v. Official Manager of Deal & Dover Railw. 615 Mclntire v. State 263 Mcintosh v. Great Western Railw. 432 v. Midland Counties Railw. 422 McKinley v. Ohio, &c. Railw. 497 McLaughlin v. Charlotte &. S. C. Railw. 306, 336 McLaughlin v. D. & M. Railw. 68, 211 v. Pry or 516 McMahan v. Morrison 198 McMahon v. Cincinnati Railw. 265 McManus v. Carmichael 331 v. Crickett 511,512 McMasters v. Commonwealth 265 McMichael v. London & N. W. Railw. 191 McMillan v. Maysville & Lexing- ton Railw. 164, 172 McMillan v. Railroad Co. 520 McMillan v. Saratoga & Wash. Railw. . 492, 521, 526 McMillan v. Scott 134 McRae v. Russell 188 McRee v. Wilmington & Raleigh Railw. 258 Meacham v. Fitchburg Railw. 262 Mead v. Keeler 67, 574 Meason's Estate 109 Meikel v. German Savings Fund Society 663 Mellen v. Western Railw. 333 Mellors v. Shaw 521, 531 Memphis & Charleston Railw. v. Payne 285 Memphis & Charlotte Railw. v. Bibb 475 Memphis Railw. v. Wilcox 427 Mercer v. McWilliams 242, 283 v. Whall 268 Mercer County v. Pittsburg & Erie Railw. 443 Merrihew v. Milwaukie & Mississip- pi Railw. 103 Merrill v. Ithaca & Osweso Railw. 444 Merritt v. Northern Railw. 220 Mersey Docks & Harbor Board v. Penhallow 606 Met. Railw. v. Woodhouse 358 Metcalfe v. Hetherington 606 Methodist Episcopal Church v. Jacques 134 Mexican & South Am. Co. in re 156 Meyer v. North Missouri Railw. 478 Michigan, &c. Railw. v. Shannon 494 Micklethwait v. Winter 266 Middlesex Turnpike Co. v. Lock 194 v. Swan 162 Middletown Bank v. Magi 11 114 Midland Counties Railw. v. Oswin 219, 376 v. Gordon 5, 7, 155 Midland Railw. v. Day kin 467 Miers v. Z. & M. T. Co. 1 70 Mifflin v. Harrisburg, Portsmouth, M. & L. Railw. 306 Mil. & Miss. Railw. v. Eble 489 Milburn v. City of Cedar Rapids 312 Miles v. Bough 148,572 Milhau v. Sharp 234, 307 Mill-Dam Co. v. Dane 197 Miller v. Auburn & Syracuse Railw. 220, 299 Miller v. Ewer 58 v. Illinois Central Railw. & Schuyler 133 Miller v. Pittsburg & Connellsville Railw. 175, 208 Miller v. Second Jefferson Build- ing Association 185 Milligan v . Wedge 506 Milner v. Field 435 Milnes v. Gerry 224, 435 Milnor v. Georgia Railw. & Bank- ing Co. 416 i'. New Jersey Railw. 261 v. Railway Companies 326 Milwaukie & Miss. Railw. v. Eble 265, 485 Mims v. Macon & W. Railw. 363 Miners' Bank v. United States 56 Minor v. Mechanics' Bank of Alex- andria 63 Minot v. Curtis 61 Miss. & Mo. Railw. v. Byington 255 Miss. & Tenn. Railw. v. Harris 108 Miss. O. & R. Railw. v. Cross 392 Mitchell v. Alestree 453 v. Crassweller 515 v. Newhall 128 v. Rockland 567 v. Rome Railw. 188, 194 Mixer's Case, in re, Royal British Bank 565 Mohawk & Hudson Railw., Matter of 82 Ixviii TABLE OF CASES. Mohawk Bridge Co. v. Utica & Sch. Railw. 258 Mold v. Wheatcraft 227, 352 Monchet v. G. W. Railw. 372 Money v. Maclcod 578 Moneypenny v. Hartland 9 Monkland & Kir. Railw. v'. Dixon 378 Monmouth Canal Co. v. Harford 3 Monongahela Navigation Co. v. Coons 232, 234, 294 Montgomery & West Point Railw. v. Varner 274 Monypenny v. Monypenny, 41 Moore v. Great Southern & West- - ern Railw. 341 v. Hudson River Railw. 439,424 v. New Albany & Salem Railw. 199 Moorhead v. Little Miami Railw. 237, 391 Morgan v. Birnie 417 v. King 332 v. New York & Albany Railw. 1 70 Morris & Essex Railw. v. Blair 323 v. Newark 296, 307 Morris Canal & Banking Co. v. Ryerson 346 v. Townsend 87 Morrison v. Steam Nav. Co. 548 Morse, Petitioner 267 v. Auburn & Syracuse Railw. 515, 632 v. Rut. & Bur. Railw. 499 Morss v. Boston & Maine Railw. 489 Mortimer v. Mc Callan 119 v. South Wales Railw. 374 Morton v. Barrett 134 Moshier v. Utica & Sch. Railw. 474 Mount Washington Road Co., Mat- ter of 265 Mowatt, ex parte 1 2 v. Londesborough 12 Mozley v. Alston 86, 592 Mumma v. Potomac Co. 1 70 Munger v. Tonawanda Railw. 252, 254, 500 Munn v. Barnum 127 Munt v. Shrewsbury & Chester Railw. 197 Murch v. Concord Railw. 590, 604 Murphy v. City of Chicago 223, 537 Murray v. De Rottenham 134 v. Railroad Co. 398, 472, 554 v. South Car. Railw. 520, 530 Mutual Savings Bank v. Meriden Agency Co. 576 Myers v. Myers 134 v. Peristal 109 N. N. B. & C. L. Co. v. Muggeridge, 120, 565 N. C. Railw. v. Leach 159 N. Hampshire Central Railw. v. Johnson 1 75 N. O. & C. Railw. v. Second Mu- nicipality of New Orleans 391 N. Penn. Railw. v. Rehman 248 N. Y. & N. H. Railw. v. Ketchum 571 Narragansett Bank v. Atlantic Silk Co. 216 Nashville & C. Railw. v. Cowardin 392 Nashville & Ch. Railw. v. Peacock 492 Nashville Railw. v. Cowardin 247 v. Dickerson 263 Nason v. Woonsocket Union Railw. 291 Nathan v. Whitlock 169, 170 Natusch v. Irving 194, 195 Neal v. Pittsburgh . & Connelsville Railw. 241 Nellis v. New York Central Railw. 450 Nelson v. Eaton 576 v. Vt. & Canada Railw. 590 Nesbitt v. L. C. & C. Railw. 413, 417 Neuse River Nav. Co. v. Commis- sioners of Newbern 210 Neville v. Wilkinson 18, 46 Nevins v. Henderson 14 Nevitt v. Bank of Port Gibson 1 70 New Albany, &c. Railw. v. Higman 296 v. Huff 296 v. McNamara 468 v. Pace 496 New Albany & Salem Railw. v. Conelly 337 v. Maiden 496 v. Pickens 164 v. Tilton 496 New Albany Railw. v. O'Daily 314 New Bedford Turnpike Co. v. Adams 161 New Haurpshire Central Railw. v. Johnson 164 New Jersey Railw. v. Suydan 268 New London v. Brainard 237 New Orleans & O. Railw. v. Lea 217 New Orleans, &c. Railw. v. Harris 72 New Orleans, Jackson, &c. Railw. v. Harris 72 New River Co. v. Johnson 341 New York & Erie Railw. v. Skin- ner 470, 486, 488, 489, 500 v. Young 247 New York Central Railw. hi re 254 v. Marvin 280 TABLE OF CASES. lxix New York Exchange Co. v.DeWolf 160 Newbury v. Conn. & "Pass. Rivers Railw. 535 Newburyport Bridge Co. v. Story 162 Newcastle, &c. Turnpike Co. v. North Staffordshire Railw. 404 Newcastle & R. Railw. v. P. & Ind. Railw. 256 Newport Mech. Co. v. Starbird 61 Newry & Enniskillen Railw. v. Coombe 192 v. Edmunds 147, 157 Newry W. R. Railw. v. Moss 156 Newton v. Belcher 10 v. Liddiard 10 Niagara Falls & Lake Ontario Railw. v. Hotchkiss 238 Nicholson v. New York & New Haven Railw. 269, 300, 308 Nicklin v. Williams 551 Nicol, ex parte, in re Royal British Bank 141 Nicol v. N. Y. & Erie Railw. 252, 254 Nixon v. Brownlow 193 v. Taff Yale Railw. 412, 422 Norris v. Androscoggin Railw. 475 v. Cooper 8 v. Irish Land Co. 149 v. Vermont Central Railw. 220, 405 North American Colonial Associa- tion of Ireland v. Bentley 146 North British Railw. v. Tod 384 North Carolina Railw. v. Leach 192, 201 North Eastern Railw. v. Elliott 222, 297, 298 North Mo. Railw. v. Gott 236, 280 v. Lackland 236 v. Winkler 172 North Penn. Railw. v. Rehman 499 v. Robinson 632 North Shields Quay Co. v. David- son 158 North Staffordshire Railw. v. Dale 399 v. Landon 363 v. Wood 364 North W. Railw. v. McMichael 191 Northam B. & Roads Co. v. Lon- don & Southampton Railw. 397 Northeastern Railw. v. Payne 391 v. Sineath486,489 Northern Ind. Railw. v. Martin 493 Northern Railw. v. Concord & Claremont Railw. 230, 260 v. Miller 163, 197 v. Page 100 Northop v. Newtown & Bridge- port Turnpike Co. 116 Northumberland v. At. St. Law. Railw. 546 Northwestern Railw. v. Martin 422 Norton v. Valentine 334 Norwich & Lowestoft Navigation Co. v. Theobald 108,176 Norwich & Worcester Railw. v. Cahill 410 v. Killingley 399 Noyes v. Rutland & Burlington Railw. 510, 601 Noyes v. Smith 526, 531, 532 v. Spaulding 113, 119 Nowell v. Andover & R. Railw. 568 Nulbrown v. Thornton 132 Nutter v. Lexington & West Cam- bridge Railw. 175 (.). Oakes v. Oakes 151 O'Brien v. Phil., Wil., & Bait. Railw. 547, 550 O'Connor v. Pittsburgh 306 v. Spaight 422 O'Donald v. E. Ind. & CI. Railw. 663 Ogdensb., Rome, & C. Railw. v. Frost 64, 163 Ogle v. Graham 124 O'Hara v. Lexington Railw. 282 Ohio, &c. Railw. v. Ridge 54 Ohio & Miss. Railw. v. Dunbar 590 v. Ind. & Cin. Railw. 589, 619 v. Irwin 479 v. Jones • 499 v. Meisenhiemer 499 v. Mucklins 541 v. Quier 494 v. Taylor 479 Ohio & Pennsylvania Railw. v. Wallace 268 Old Colony Railw. v. Evans 131 Old Colony & F. R. Railw. v. Coun- ty of Plymouth 400 Oldtown & Lincoln Railw. v. Vea- zie 177 O'Neal v. King 176 Oriental I. Steam Co. v. Briggs 68, 121 Ormond v. Holland 522, 531 Orono v. Wedgeworth 67 Orpen, ex parte 115 Orr v. Bank of United States 102 v. Bigelow 118 v. Gl.A. & M.J. J. Railw. 167,571 Osborne v. Bank of U. States 56, 195 Oswego Falls Bridge Co. v. Fish 237 Overmyer v. Williams 250 lxx TABLE OF CASES. Overton v. Freeman 506 Owen v. Purely 70 v. Van Uster 569 O wings v. Speed 215 Oxford Turnpike Co. v. Bunnell 116 Oxford, Worcester, & Wolverhamp- ton Railw. v. South Staffordshire Railw. 250 P. & K. Railw. v. Dunn 165 P. W. Co. v. Brown 64 Pacific Railw. v. Chrystal 264 v. Hughs 199 v. Renshaw 199 Pack v. Mayor of New York 507 Palmer v. Lawrence 163 Palmer & Hungerford Market, Mat- ter of 347 Palmer Co. v. Ferrill 265 Parish v. Parish 131 Parker v. Adams 545 v. Boston & Maine Railw. 271, 273, 291, 382, 535 v. Bristol & Exeter Railw. 448 v. Great Western Railw. 448 v. Perkius 225 v. Rensselaer & Saratoga Railw. 590 v. Thomas 173,174 Parkes v. Great Western Railw. 419 Parks v. Boston 263, 349 Parmelee v. Oswego & Syracuse Railw. 363 Parnabv v. Lancaster Canal Co. 603, 606 Parrott v. Eyre 570 Parsons v. Howe 243 Paterson Gas Light Co. v. Brady 518 Patten v. Northern Central Railw. 293 Paulding v. London & N. W. Railw. 439 Paxton v. Popham 574 Peachy v. Rowland 506 Peake v. Wabash Railw. 1 75 Pearce v. M. & I. & P. & I. Railw. 559 v. Wycombe Railw. 387 Peavey v. Calais Railw. 235, 330 Peck v. North Staffordshire Railw. 457 Penn. Railw. v. Duquesne Bor- ough 404 v. Heister 279 v. Keiffer 278 v. McClure 279 Pennsylvania r. Wheeling Bridge Co.* 326, 332 Pennsylvania Railw. v. Common- wealth ' 450 Pennsylvania Railw. v. Kelly 630 v. McCloskey632 v. Porter 240 Penobscot & Kennebec Railw. v. Dunn 158,177 Penobscot Railw. v. Dummer. 165, 175, 177 v. White 85, 106, 175,567 People v. Batchelor 78, 79 v. Benton 415 v. Caryl 92 t;. First Judge of Columbia 278 v. Hayden 284 v. J. & M. Plank-Road Co. 450 v. Jillson 92 v.Kerr 261,311 v. Mayor of Brooklyn 230, 264, 265 v. Michigan Southern Rail- way 284 v. New York & Harlem Railw. 223, 316 v. N. Y. Central Railw 548 v. Rensselaer & Saratoga Railw. 326 v. St. Louis 326 v. Third Avenue Railw. 315 v. Throop 215 v. Troy House Co. 64 v. Trustees of Geneva Col- lege 59 v. Vanderbilt 333 v. White 251, 253, 261 Peoria & Oquawka Railw. v. Elt- ing 165,199 Perkins v. Eastern Railw. 499, 500 v. Hart 587 Perrine v. Ches. & Del. Canal Co. 237 Perry v. Marsh 526 Perth Amboy Steamboat Co. v. Parker 66 Peru Railw. v. Haskett 493 Peters v. St. Louis & I. M. Railw. 446, 587 Pettibone v. La Crosse & Milwau- kie Railw. 340 Pfeifer v. Sheboygan & Fond du Lac Railw. 340 Phil. & Germ. Railw. v. Wilt 467, 514 Phil. & Reading Railw. v. Derby 514,541 Phil., Germantown, & N. Railw. v. Wilt 102, 511 Philadelphia & Reading Railw. v. Philadelphia 261 v. Yeiser 284, 289 TABLE OF CASES. lxxi Philadelphia & Trenton Railw. 234, 294, 299 Philad. & West Chester Railw. v. Hickman 187, 207 Philadelphia Railw. v. Trimble 272 Philadelphia, Wilmington, & Balti- more Railw. v. Cowell 212 Philadelphia, Wilmington, & Balti- more Railw. v. Howard 422, 602 Philadelphia, Wilmington, & Balti- more Railw. 17. Quigley 517, 567 Philadelphia, Wilmington, & Balti- more Railw. v. Trimble 485 Phillips v. Veazie 535 Phelps v. Lyle 86 Phene v. Gillan 135 Phoenix Life Assurance Co. 156 Pickard v. Smith 606 Pier v. Final 99 Piggott v. Eastern Counties Railw. 452 Pinkerton v. Manchester & Law- rence Railw. 146, 153 Pinkettu. Wright 151 Piscataqua Bridge v. New Hamp- shire Bridge 259, 260 Piscataqua Ferry Co. v. Jones 108, 163, 174, 187 Pittsburgh v. Scott 284 Pittsburgh & Connellsville Railw. v. Clarke 153 Pittsburgh & Connellsville Railw. v. Stewart 208 Pittsburg & Steubenville Railw. v. Clark 114 Pittsburg & Steubenville Railw. v. Hall 273 Pittsfield & North Adams Railw. v. Foster 271, 280 Planche v. Colburn 412 Plank-Road v. Buff. & P. Railw. 251 v. Buffalo, &c. Railw. 283 v. Payne 163 Plant v. Long Island Railw. 299, 306 Planters' & Merchants' Bank v. Leavens 110 Plate Glass Ins. Co. v. Sunley 185 Plum v. Morris Canal & Bank. Co. 306 Plymouth Railw. v. Colwell 249, 393 Pochelu v. Kemper 663 Poler v. New York Central Railw. 473, 491 Pollard v. Hagan 231 Pollock v. Stables 127 Polly v. S. &W. RniV. 241 Pomroy v. Chi. & Mi!w. Railw. 313 Pontchartrain Railw. v. Lafayette & Pont. Railw. 392 Poole v. Middleton 121 Porcher v. Gardner 33 Port of London Assurance Com- pany's Case 81 Porter v. Androscoggin . & Ken. R. 602 v. Buckfield Branch Railw. 414 Portland, Saco, & Portsmouth Railw. v. Graham 166, 186 Pott v. Flather 131 Potts v. Thames Haven Dock & Railw. Co. 41 Pottstown Gas Co. v. Murphy 289 Powell v. Han. &. St. Jos. Railw. 478 Powers v. Bears 279, 284, 338 Powles v. Page 557 Poynder v. Great N. Railw. 242, 36 7, 368 Pratt v. Atlantic & St. Lawrence Railw. 457 Prendergrast v. Turton 214 Presbyterian Society v. Auburn & Roch. Railw. 299, 302, 303, 305 Preston v. Dub. & Pacific Railw. 248 v. Eastern Counties Railw. 334 v. Grand Collier Dock Co. 158 v. Liverpool & M. Railw. 1 7, 35, 40, 49 v. Liverpool, Manchester, & N. Railw. 49 Price v. Grand Rapids & I. R. Co. 162 v. Powell 554 v. Price 109 Priestley v. Foulds 404 v. Fowler 520, 525, 530 v. Manchester & Leeds Railw. 338, 377 Proprietors of Locks & Canals v. Nashua & Lowell Railw. 272, 293, 345 Proprietors of Quincy Canal v. Newcomb 300 Protyman v. Ind. & Cin. Railw. 234, 252, 311 Providence Bank v. Billings 57, 237 Provost & Fellows of Eton College v. Great Western Railw. 44 Pulling v. London, Chatham, & Dover Railw. 355 Pulsford v. Richards 212 Pym v. Great Northern Railw. 632 Q. Quarman v. Burnett 506, 508 Queen v. Birmingham & Gloucester Railw. 511 v. Birmingham & Oxford J. Railw. 357 Ixxii TABLE OF CASES. Queen v. Commissioners of Woods & Forests, ex parte Budge 361 Queen v. Eastern Counties Railw. 233, 234 v. Great North of England Railw. 513 v. London & G. Railw. 354 v. London & S. W. Railw. 355 v. L. & Southampton R. 348 v. North Union Railw. 343 Quicke, ex parte 358 Quimby v. Vermont Central Railw. 484, 486, 550, 553, 554, 631 Quiner v. Marblehead Ins. Co. 113 R. R. & G. Railw. v. Davis 54, 286 Radcliff v. Mayor of Brooklyn 294, 310, 334 Railsback v. Liberty & Abington Turnpike Co. 66, 198 Railstone v. York, Newcastle, & B. Railw. 372 Railway, ex parte 301 " v. Beyer 273 v. Bucher . 272 v. Davis 251 v. Gilson 263 i;. Hammell 347 v. Johnson 278 v. Lagarde 264 v Norton 549 v. Skinner 470, 471 Railw. Co. v. Gilson 268 v. Graham 165 v. Richards 97 v. Roderigues % 159, 165, 203 v. Skinner 486 v. Washington 291 Ramsden v. Dyson 220 v. Manchester, S. J. & A. Railw. 281, 299, 354 Ranch v. Lloyd & Hill 549 Rand v. Townshend • 376 w. White Mountains Railw. 131 Randall v. Cheshire Turnpike Co. 606 Randleson v. Murray 508 Ranger v. Great Western Railw. 388, 406, 407, 415, 419, 422 Ranken v. E. & W. I. & B. J. Railw. 367 Rapson v. Cubitt 506 Rathbone v. Tioga Nav. Co. 220, 249, 410 Reaveley, ex parte 192 Redmond v. Dickerson 577 Reedie v. London & N. W. Railw. 506, 508 Reese & Fisher v. Bank of Com- merce 115 Reg. v. Frere 98 v. General Cemetery Co. 121 v. Grimshaw 83 v. Lundie 89 v. Mariquita Mining Co. 217 v. Mid. Counties & Sh. Junc- tion Railw. 145 v. Registrar 61 v. Saddlers' Co. 89,217 v. South Wales Railw. 250 v. Victoria Park Co. 168 v. Waterford & L. Railw. 245 v. Wing 113 Regina v. Ambergate & C. Railw. 360 v. Birmingham & Glouces- ter Railw. 405 v. Caledonia Railw. 388 v. Commissioners of Norfolk 593 v. Committee for South Holland Drainage 362 v. Cottle 357 v. E. & W. I. Docks & Birm. J. Railw. 396, 397 v. Eastern Counties Railw. 296, 341, 344, 375, 405 v. Ely 404 v . Fisher 344 v. General Cemetery Co. 145 v. L. & Greenw. Railw. 353 v. Liverpool, Manchester, & Newcastle upon Tyne Railw. 144 v. London & Birmingham Railw. 405 v. London & Northwestern Railw. 373 v. Londonderry & Cole- raine Railw. 147 v. Manchester & Leeds Railw. 362 v. Met. Board of Works 341 v. Met. Comm. of Sewers 373 v. Musson 324 v. North Midland Railw. 344 17. Rigby 405 v. Russell 403 t7. Saffron-Walden Railw. 395 v. Sharpe 405 17. Sheriff of Middlesex 353 v. Southeastern Railw., in re Penny 345 v. Train 402 v. Trustees of Swansea Harbor 362 TABLE OF CASES. lxxiii Regina v. United Kingdom Tele- graph Co. 401 v. York & N. M. Railw. 3G0, 483 Reitenbaugh v. Chester Valley Railw. 239, 265, 268 Rensselaer & Sar. Railw., Matter of 486, 489 Rensselaer & W. PI. Rd. Co. v. Barton 165 Renthrop v. Bang 251 Reuter v. Electric Telegraph Co. 601 Revere v. Boston Copper Co. 73, 194 Rex v. Amery 69 v. Bagshaw 361 v. Coin St. Aldwins 84 v. Commissioners of Nene Out- fall 347 v. Doncaster 78 v. Faversham 77 v. Hungerford Market 347, 348 v. Inhabitants of Kent 404 v. Inhabitants of Lindsay 404 v. Kerrison 404 v. Liverpool & Manchester Railw. 348 v. Martin 67 v. May 77 v. Mayor of Liverpool 361 v. Medley 517 v. Morris 405 v. Mott 126 v. Nottingham Old Water Works 376 v. Severn R. 3 v. Trustees of Norwich Roads 361 v. Vice-Ch. of Cambridge 69 v. Worcester Canal Co. 144, 149 v. Wright 402, 403 Rexford v. Knight 253, 283 Reynolds v. Dunkirk & State Line Railw. 227 Rice vi Courtis 153 v. Dublin & Wicklow Railw. 396 v. Turnpike Co. 264 Rich v. Basterfield 508 Richard v. La Crosse & Milwaukee Railw. 472 Richards v. Sacramento Valley Railw. 489 v. Scarborough Public Market Co. 390 Richardson, ex parte 15 v. Southeastern Railw. 371 v. Vermont Central Railw. 306 Richmond v. Sacramento Valley Railw. 479 Richmond & Petersburgh Railw. v. Jones 471 Richmond Railw. v. Louisa Railw. 256 Ricker v. Fairbanks 416 Ricket v. Met. Railw. Co. 346 Ricketts v. E. & W. I. Docks & B. J. Railw. 466, 500 Ridley v. Plymouth Banking Co. 558, 573 Ripley v. Sampson 162 River Dunn Nav. Co. v. N. Mid- land Railw. 195 Robbins v. Milwaukee & Horicon Railw. 263, 350 Robinson v. New York & Erie Railw. 296 Roberts v. Button 568, 569 v. Great Western Railw. 493 v. Ohio & Mobile Railw. 179 v. Price 82 v. Read 551 v. Smith 526 Rochester & Syracuse Railw. v. Budlong 263, 273, 277, 279 Roch. White Lead Co. v. Rochester 334 Roe v. Birkenhead, Lancashire, & Cheshire Junction Railw. 101 Rogers, ex parte 72 v. Bradshaw 257, 282, 283, 299 v. Huntingdon 115 v. Huntingdon Bank 114 v. Kennebec & Portland Railw. 296, 325 v. Newburyport Railw. 492, 503 Roman v. Fry. 108, 114 Rood v. New York & Erie Railw. 455 Rose v. Story 630 v. Truax 579 Rosenthal v. Madison PI. Rd. Co. 61 Rosevelt v. Brown 136, 155 Ross v. Adams 350 v. Boston & Worcester Railw. 45 7 v. E. T. & E. Railw. 281 v. Elizabethtown & Somer- ville Railw. 270, 273 v. Lafayette & Ind. Railw. 1 79 v. Madison 514 Rouch v. Great Western Railw. 422 Rounds v. Mumford. 306 Rowe v. Shilson 405 Roxbury v. Boston & Prov. Railw. 227 Royal British Bank, in re Brock wall's Case 212 Mixer's Case 565 • v. Turquand 574, 575 Royal Exchange Insurance Co. v. Moore 126 Rubottom v. McClure 283 lxxiv TABLE OF CASES. Ruck v. Williams Rundle v. Delaware & Raritan Canal Co. Runyan v. Lessee of Coster Russell v. Hudson River Railw. Rust v. Low 251, Rut. & Bur. Railw. v. Procter Ryan v. Cumberland Valley Railw. Ryder v. Alton & Sangamon Railw. 606 54 58 523 499 559 520, 531 163, 180 S. Carolina Railw. v. Blake 245 S. T. & A. Railw. in re 346 Sabin v. Bank of Woodstock 153 v. Vermont Central Railw. 287, 289 Sacramento Railw. v. Moffatt 349 Sacramento Valley Railw. v. Mof- fatt 484 Sadd v. Maldon, W. & Br. Railw. 361, 389 Sagory v. Dubois 163 Salem Mill-Dam Co. v. Ropes 15, 107, 152, 175 Salomons v. Laing 32, 558, 561 Sampson v. Bowdoinham Steam- Mill Co. 81 San Antonio v. Lewis 410 Sanders v. Guardians of St. Neot's Union 596, 600 Sanderson v. Cockermoutli & Washington Railw. 224 Sands v. Sanders 147, 148 Sargent v. Franklin Ins. Co. 113, 114, 116, 144 v. Webster 84 Sater v. B. & Mt. PI. Railw. 263 Saunders, ex parte 145 Savings Bank v. Davis 77 Sawyer v. Northfield 535 v. Rut. & Bur. Railw. 590, 604 Sayles v. Blane 123, 155 Sayre v. Louisville Union Benevo- lent Association 88 v. North W. Turnpike Co. 56 Scadding v. Lorant 79 Scaggs v. Bait. & Wash. Railw. 466, 575 Schuler v. Northern L. Railw. 255 Schurmeier v. St. Paul & P. Railw. 266 Schuylkill Co. v. Thoburn 263 Schofield v. School District 195 Scott v. Avery 434 v. Corporation of Liverpool 416 v. Eagle Fire Co. 80 Scott v. London Dock Co. 464 v. Oakely 50 v. W. & R. Railw. 466, 474 Scottish Northeastern Railw. v. Stewart 38, 50, 615 Scudder v. Woodbridge 524, 526, 531 Sea, Fire & Life Assurance Soci- ety, Matter of 1 70 Searle v. Lachawanna Railw. 293 Seaver v. Boston & Maine R. 531, 555 Seddon v. Connell 140 Selma & Tenn. R. v. Tipton 65, 188, 203 Selma Railw. v. Tipton 164 Semmes v. Mayor of Columbus 582 Semple v. London & Birmingham Railw. 247 Seneca Railw. v. Auburn & Roch. Railw. 307 Seneca Road Co. v. Aub. & Roch. Railw. 294, 299 Senior v. Met. Railw. 346 Serendat v. Saisse 509 Sewell v. Lancaster Bank 115 Seymour v. Maddox 522, 531 v. Sturgess 162 Shamakin Valley Railw. v. Liver- more 249 Shand v. Henderson 338 Sharp v. Great Western Railw. 437 Sharrod v. London &N. W. Railw. 466, 514 Shaw v. Boston & Worcester Railw. 545, 552 v. Fisher 131, 132 v. Holland 130 v. Rowley 122 Shears v. Jacobs 564 Sheffield, A. & M. Railw. v. Wood- cock 6, 9, 85, 118, 181 Sheldon v. Hudson River Railw. 455 Shepardson v. M. & B. Railw. . 284 Sherman v. Mayor of New York 417 v. New York Central R. 602 v. Roch. & Sy. Railw. 514, 520 v. Vermont Central R. 411 Shirley v. Ferrers 18, 46 Shoemaker u. Goshen Turnpike Co. 210 Shoenberger v. Mulhollan 273, 364 Shorter v. Smith 261 Shortridge v. Bosanquet 112 Shrewsbury & Birmingham Railw. v. London & Northwestern R. 35, 589, 593, 602, 612, 615 v. London & N. W. & Shrop- shire Union Railw. 589, 590 Shrunk v. Schuvlkill NaT. Co. 232, 306 Shurtz v. S. & T. Railw. 64, 65 TABLE OF CASES. lxxv Sigfried v. Levan 124 Sills v. Brown 554, 555 Simpson v. Denison, 447, 558, 613 v. Lancaster & Carlisle Railw. 361 v. Lord Ilowden 23, 36 v. So. Staff Waterworks Co. 235 v. Westminster Palace Hotel Co. 584 Sims v. Commercial Ilailw. 360 Sinclair v. Pearson 514 Sirrell v. Derbyshire, Staffordshire, & Wor. J. Railw. 570 Sixth Avenue Railw. v. Kerr 315 Skerratt v. North Staffordshire Railw. 483 Skip v. Eastern Counties Railw. 520, 523, 536 Slater, ex parte 156 v. Emerson 409 Slaymaker v. Gettysburg Bank 110 Sleath v. Wilson 514 Small v. Herkimer M. & H. Co. 164 Smart v. Guardians of the Poor of Westham Union 597 v. Railway 284 Smith v. Allison 392 v. Birmingham Gas Co. 515 v. Boston 300 v. Crocker 124 v. Eastern Railw. 467 v. Helmer 284 v. Hull Glass Co. 574 v. Ind. ■& Bl. Railw. 179 v. Law 79 v. Maryland 326 v. McAdams 284 v. New York & Harlem Railw. 522, 604 v. Pelah 453 v. Reese River Silver Min- ing Co. 139 Smyth v. Darley 82 Snodgrass v. Gavit 435 Snowden v. Davis 448 Society of Practical Knowledge v. Abbott 108 Solomons v. Lang 143 Som. & Ken. Railw. v. Cushing 1 78 Somerset Canal Co. v. Harcourt 352 Somerville & E. Railw. v. Doughty 263, 268 Soper v. Buffalo & Roch. Railw. 557 South Bay Meadow Dam Co. v. Gray 106, 164, 199 South Carolina Railw. ex parte, 391 u.Blake 352, 391 South Essex Gas Light & Coke Co. in re 584 South Staffordshire Railw. v. Burn- side 156 v. Hall 372 South Wales Railw. ex parte 367, 483 South Yorkshire Railw. v. Great Northern Railw. 589 South Yorkshire & River Dun Co. v. Great Northern Railw. 589, 616 Southampton Bridge & I. Co. v. Local Board of Health 606 Southeastern Railw. v. Brodgen 422 v. European & Am. Tel. Co. 401,514 v. Queen 397 Southmayd v. Russ 114 Southwestern Railw. v. Coward 370 Southwick v. Estes 510 Spackmann, ex parte 145, 561 v. Lattimore 15 Sparks v. Liverpool Waterworks 214 Sparling v. Parker 109 Sparrow v. Evansville & Craw- fordsville Railw. 201 v. Oxford, &c. Railw. 235, 353, 354, 358 Spartanburgh & Union Railw. v. De Graffenreid . 201 Spear v. Crawford 163 v. Richardson 277 Spear & Carlton v. Newell 587 Spooner v. McConnell 326 Spottiswoode's Case 14 Springfield v. Conn. River Railw. 237, 243,257,299, 305 Spry v. Emperor 448 Squire v. Campbell 385 St. George v. Reddington 383 St. James's - Club, in re 13 St. John v. St. John 46 St. Louis & C. Railw. v. Dalby 104 St. Mary's Church 60, 72 St. Thomas Hospital v. Charing Cross Railw. 355 Stacy v. Vermont Central Railw. 240, 286 Stahl v. Berger 124 Stainbank v. Fernley 138 Stamps v. Bir., Wolv., & Stour Val- ley Railw. 360, 367 Standish v. Mayor of Liverpool 366 Stanhope's Case 561 Stanley v. Chester & Birkenhead Railw. 25 Stanley v. Stanley 136 Stanton v. Wilson 203 Stark, ex parte 572 lxxvi TABLE OF CASES. Starr v. Child 300 State v. B. & O. Railw. 235 v. B. C. & M. Railw. 621 i'. Bank of Louisiana 80 v. Boston, Concord, & Mon- treal Railw. 87, 246 v. Comm. of Mansfield 392 v. Dawson 70, 286 v. Digby 263 v. Franklin Bank 110 v. Garretson 286 v. Gorharn 536 v. Great Works Mill. & Man. Co. 515 v. Hessenkamf 315 v. Miller 265 v. Morris & Essex Railw. 511 v. Norwalk & Danbury Turn- pike Co. 391 V. Overton 97, 99 v. Rives 230, 254 v. Ross 105 v. Thompson 100 v. Tudor 79 v. Vermont Central Railw. 513 v. Wheeling Bridge Co. 326 v. Wilmington & Manch. Railw. 594 State Fire Ins. Co. 618 State of Maryland v. Baltimore & Ohio Railw. 625 Stearns v. Old Colony & Fall River Railw. 493 Steel v. Southeastern Railw. 506 v. Southwestern Railw. 334 Steele v. Harmer 576 v. Midland Railw. 356 Steigenberger v. Carr 10 Stein v. Ind., &c. Association 663 Stephen v. Smith 92 Stephens v. De Medina 127 Stetson v. Faxon 300 Stevens v. Rutland & Burlington Railw. 194 Stevens v. South Devon Railw. 75, 592, 621 Stewart v. Anglo- California Gold Mining Co. 214 Stewart v. Cauty 127, 130 v. Hamilton College 203 v. Raymond Railw. 285, 364 Stewart's Estate, in re 219 Stikeman v. Dawson 192 Stiles v. Western Railw. 411 Stockbridge v. West Stockbridge 3 Stockton v. Frey 627 Stockton & Darlington Railw. v. Brown 236, 389 45 66 395 164 243 Stockton & Hartlepool Railw. v. Leeds & Thirsk & Clarence Railws. Stoddard v. Onondaga Annual Conference Stokes v. Grissell v. Lebanon & Sparta Turn pike Co. Stone v. Cambridge v. Commercial Railw. 338, 353, 360 Stoneham Branch Railw. v. Gould 166,175 Stormfeltz v. Manor Turnpike Co. 237 Straffon's Executors, ex parte 112 Strang v. Beloit & M. Railw. 273, 279 Strapley v. London & N. W. Railw. Strasburg Railw. v. Echternacht Stratford & M. Railw. v. Stratton 537 41 176, 179 183, 569 120 Straus v. Eagle Ins. Co. Stray v. Russell Strong v. Ellsworth 10 Stubbs v. Lister 214 Stucke v. Milw. & Miss. Railw. 489 Sturges v. Knapp 583 Sturtevant v. Milw., Wat., & B. Railw. 338 Sullivan v. Philadelphia & R. Railw. 487 Sunbury & Erie Railw. v. Hum- mell 291 Susquehannah Canal Co. v. Wright 232 Sutton v. Clark -306, 464, 607 v. Louisville 265 v. Tatham 128 Sutton Harbor Improvement Co. v. Hitchins 372 Suydam v. Moore 467, 548 Swan v. North British Australasian Co. 14 Swansea Vale Railw. v. Budd 217 Swatara Railw. v. Brune 190 Symonds v. City of Cincinnati 230, 262, 263 T. Taff-Vale Railway v. Nixon 422 Talmadge v. Rensselaer & Sarato- ga Railw. 469 Tanner v. Tanner 150 Tar River Nav. Co. v. Neal 164 Tarrant v. Webb 521, 531 Tate v. Ohio & Miss. Railw. 310 Tattersall r. Groote 434 Taunton v. Royal Ins. Co. 618 TABLE OF CASES. lxxvii Taunton & South Boston Turnpike Co. v. Whiting 162 Tawney v. Lynn & Ely llailw. 300 Tayler v. Great Indian Peninsula Railw. 146 Taylor v. Briggs 631 v. Clemson 233, 390 v. County Commissioners 271 v. Fletcher 183 v. Griswold 79 v. Hughes 113 v. Southeastern Railw. 454 v. St. Louis 306 v. Stray 129 v. York & N. M. Railw. in re 363 Tempest v. Kilner 109, 131 Tennant v. Goldwin 461, 464 Terre Haute, &c. Railw. v. Smith 496 Terry v. New York Central Railw. 468 Tew v. Harris 381 Thames Haven Dock & Railw. Co. v. Hall . 81, 351 v. Rose 81, 83, 86 Thames Steamboat Co. v. Housa- tonic Railw. 515 Thames Tunnel v. Sheldon 116, 180 Thayer v. St. Louis, Alton, &c. Railw. 497 Thayer v. Vermont Central Railw. 411, 412 Thicknesse v. Lancaster Canal Co. 375 Thigpen v. Miss. Central Railw. 1 74 Thomas v. Winchester 604 Thompson v. Charnock 434 v. Grand Gulf Railw. 281, 285 v. New Orleans & Car- rolton Railw. 508 v. New York & H. Railw. 237 v. Thompson 109 v. West SomersetRailw. 310 Thorne v. Taw Vale Railw. 3 Thorpe v. Hughes 187 v. Rut. & Bur. Railw. 54, 258 Thurnell v. Balbirnie 435 Tilleard, in re 50 Tillet v. Charing-Cross Company 224, 228 Tillotson v. Hudson River Railw. 335 Timmons v. Central Ohio Railw. 527 Tinsman v. Belvidere Delaware Railw. 296 Tippetts v. Walker 109 Toledo, &c. Railw. v. Fowler 497 Toledo & Wabash Railw. v. Daniels 497 v. Thomas 496, 501 Toledo Bank v. Bond 56, 237 Tombs v. Rochester & Syracuse Railw. 491 Tomlinson v. Man. & Birm. Railw. 235 v. Tomlinson 109 Tonawanda Railw. v. Munger 468, 500 Tooke, ex parte 146 Toomey v. London, Br. & So. Coast Railw. 604 Tower v. Prov. & Wor. Railw. 468, 501 Towns v. Cheshire Railw. 466, 500 Townsend v. Ash 109 Townshend v. Susquehannah T.Co. 606 Tracy v. Yates 188 Tremain v. Cohoes Company 287 Trenton ^Water Power Co. v. Chambers 269 Troup, in re 617 Trow v. Vermont Central Railw. 470, 548,631 Troy v. Cheshire Railw. 299, 337 Troy & Boston Railw. v. Lee 263, 268 v. Northern Turnpike Co. 268, 273, 280, 295 v. Tibbitts 153, 189, 203, 204 v. Warren 203 Troy & Greenfield Railw. v. New- ton 177 Troy & Rutland Railw. v. Kerr 164, 189, 589 Troy T. Co. v. McChesney 163 Trueman v. Loder 129 Trustees of the Presbyterian Soci- ety in Waterloo v. Auburn & Rochester Railw. 54 Trustees Swansea Harbor, in re 383 Tuckahoe Canal Co. v. Tuckahoe Railw. 237 Tucker v. Seaman's Aid Society 61 Tunney v. Midland Railw. 527 Tuohey v. Great S. & W. Railw. 341 Turner v. Sheffield & R. Railw. 288, 338 Turnpike Co. v. Hosmer 391 v. Wallace 56 Turnpike Road v. Brosi 349 Tyrrell v. Woolley 568 U. U. S. v. Arredondo 237 v. New Bedford Bridge Co. 326 Underhill v. New York & Harlem Railw. 473 v. Saratoga and Wash. Railw. 221 Underwood v. Bedford & Cam- bridge Railw. 354 lxxviii TABLE OF CASES. Underwood v. Hart 411 Uniou Bank v. Knapp 216 v. Laird 114 Union Bank of Tennessee v. State 110 Union Locks & Canal Co. v. Towne 193 United States v. Railway Bridge Co. 231, 332 v. Robeson 432 v. Vaughan 114 United States Bank v. Dandridge 410 v. Harris 249, 253 v. Planters' Bank of Georgia 60 Unity Ins. Co. v. Cram 67 Untbank v. Henry County Tjirnp. Co. 166 Upfill's Case 13,165 Upton v. Soutb Reading Railw. 262, 274 Utica & Schenectady Railw. v. Brinkerhoff 171,204 Utica Bank v. Hillard 216 Vail v. Morris & Essex Railw. 270, 272, 279 Van Wickle v. Railw. 240, 270, 279 Vandegrift v. Railw. 515 v. Rediker 469, 500, 508 Vanderbilt v. Rensselaer & Sar. Railw. 484 Vanderbilt v. Richmond T. Co. 514 Vanderkar v. Rensselaer & Sar. Railw. 500 Vanderwerker v. Vermont Cen- tral Railw. 411 Varick v. Edwards 133 Varillat v. N. O. & Car. Railw. 552 Varrick v. Smith 230 Vaughan v. Tafl'-Vale Railw. 454 Vauxhall Bridge Co. v. Earl of Spencer 17,22,46 Vawter v. Ohio & Miss. Railw. 192 Veazie v. Mayo 223, 312 v. Penobscot Railw. 313, 399 Vermont Central Railw. v. Baxter 243, 247, 590 v. Burlington 392 v. Clares 203 v. Hills 222 Vicksburg & Jackson Railw. v. Pat- ton 469 Vicksburg, Shreveport, & Texas Railw. v. McKean 155, 172, 187, 189 Victory v. Fitzpatrick 337 Vilas v. Milw. & Miss. Railw. 223, 340 Vinal v. Dorchester 535 Violet v. Simpson 551 Visscher v. Hudson River Railw. 369 Von Schmidt v. Huntington 73 Vose v. Grant 170 Vt. & Canada Railw. v. Vt. Cen- tral Railw. 235 W. W. & L. Railw. v. Kearney 404 W. & P. Railw. v. Washington 279 W. N. W. Co. v. Hawksford 15 "Wadhams v. Lackawanna & Blooms. Railw. 285 Wainwright v. Ramsden 348 Waitman, ex parte 150 Waldo v. Chicago, St. Paul, & Fond du Lac Railw. 234 v. Martin 578 Waldron v. Portland, S - . & P. . Railw. 468 v. Rensselaer & Sar. Railw. 467 Walker, ez parte, 150, 584 v. Bartlett 123, 134, 136 v. Boiling 526 v. Boston & Maine Railw. 232, 268, 271,329 v. Devereaux 65, 158 v. Eastern Counties Railw. 224 v. London & Bl. Railw. 360 v. Milne 109 v. Mobile & Ohio Railw. 1 74 Wallingford Manufacturing Co. v. Fox 11 Walstab v. Spottiswoode 12 Ward v. Griswoldville Manuf. Co. 163 v. Londesborough 12 v. Southeastern Railw. 120 Ware v. Grand Junction Water Co. 73, 194 v. Regents' Canal Co. 290, 344, 382 Waring v. Manch., Sheffield, & L. Railw. 422 Warner v. Mower 78 Warren v. State 313 Warren Railw. v. State 399 Warring v. Williams 124 Water Power Co. v. Chamber 227 v. Chambers 220 Waterford, Wexford, & W. Railw. v. Dalbiac 1 76 v. Pidcock 185 Waterman v. Conn. & Pass. Riv. Railw. 296, 346 TABLE OF CASES. lxxix Waterman v. Troy & Greenfield Railw. 208 1 Waters v. Moss 478 v. Quimby 518 Watkinsr. Great Northern Railw. 244, 336, 338 Watson v. Reid 226 Watts v. Salter 12, 13 v. Watts 134 Webb v. Direct London & Ports- mouth Railw. 27, 28, 36, 39, 40 v. Man. & Leeds Railw. 235, 242,361, 555 Webber v. Eastern Railw. 275 Weeden v. Lake Erie & Mad River Railw. 208 Welcome v. Leeds 537 Weld v. London & Southwestern Railw. 9, 358, 394 Welland Railw. v. Berrie 168 Welles v. Cowles 109 Wells v. Howell 499 v. Som. & Ken. Railw. 233 West Cornwall R. v. Mowatt 155 West London Railw. v. London & N. W. Railw. 608 West Philadelphia Canal Co. v. Innes 182, 184 West River Bridge v. Dix 256, 259 Western Maryland Railw. v. Ow- ings 338 Western Railw. v. Babcock 226 Weston v. Bennett 410 v. Foster 251 Westropp v. Solomon 126 Wetmore v. Story 307 Weyant v. N. Y. & Harlem Railw. 526 Whaalan v. M. R. & Lake Erie Railw. 523, 531 Wheeler v. Roch. & Sy. Railw. 252, 291,485 Wheelock v. Moulton 11, 110 v. Yonng & Pratt 243 Whipple v. Walpole 276 Whitaker v. Boston & Maine Railw. 546 Whitcomb v. Vermont Central Railw. 219, 296 White v. Boston & Prov. Railw. 337 v. Charlotte & S. C. Railw. 262 v. Concord Railw. 277, 486 v. Fitchburg Railw. 274 v. South Shore Railw. 291 v. Vermont & Mass. Railw. 125 White Mountain Railw. v. East- man 85, 155, 158, 177 White River Turnpike Co. v. Ver- mont Central Railw. 256, 299 Whitefield v. Southeast Railw. 517 Whitehouse v. Fellowes 606 Whiteman v. Wilm. & Sus. Railw. 511 Whitfield v. Southeastern Railw. 567 Whitfield v. Zelnor 408 v. Boston & Maine Railw. 220, 266 Whitney v. At. & St. L. Railw. 490 Whittier v. Portland & Ken. R. 296 Whitwell v. Warner 16, 556 Wiggett v. Fox 525, 532 Wiggin v. Free Will Baptist So- ciety 77 Wight v. Selby Railw. 187 v. Shelby Railw. 159, 186 Wigmore v. Jay 520, 531 Wiley & Moor 124 Wilkins v. Roebuck 564 Wilkinson v. Anglo- California Gold Co. 144 v.Lloyd 111,118,130 Willard v. Newbury 533 AVillcocks, ex parte 84 Willey u. Southeastern Railw. 367 Williams v. Addroscoggin & Ken- nebec Railw. 409 v. Archer 131 v. Chester & Holyhead Railw. 410 v. Great Western Railw. 92 v. Hartford & New Ha- ven Railw. 239 v. Jones 633 v. Michigan Central R. 468 469, 500 v. Natural Bridge Co. 300 v. New Albany & Salem Railw. 492 v. New York Central Railw. 230,290,300,307, 489 v. Pigott 14 v. South Wales Railw. 361 v. St. George's Harbor Co. 11, 45 v. Wilcox 402 Williamson v. New York Central Railw. 310 Willing v. Baltimore Railw. 279 Wills v. Bridge 121,124 v. Murray 78, 83 Willyard v. Hamilton 283 Wilmington & Manchester Railw. v. Saunders 70 Wilmington & Raleigh Railw. v. Robeson 172 Wilmot v. Corporation of Coven- try 576 lxxx TABLE OF CASES. "Wilson v. iEtna Insurance Co. 435 v. Anderson 3 v. Blackbird Creek Co. 328 v. Blackbird Creek Marsh Co. 326 v. Cunningham 3, 551, 631 v. Goodman 570 v. Keating 157 v. Miers 568 v. Railway Co. 472 v. West Hartlepool Railw. Co. 566, 602 v. "Wilson 86 v. York & Md. Railw. 418 Win. & St. Peters R. v. Denman 266 Winch v. Birkenhead, L. & C. R. 592 Winona v. St. Peter Railw. 263 AVinter v. Muscogee Railw. 193, 197 "Winterbottom v. Wright 604 Witherley v. Regent's Canal Co. 632 Witmer v. Schlatter 16 Witter v. Miss. O. & R. Railw. 392 "Wolfe v. Covington & Lexington Railw. 295, 299 "Wolverhampton N. "W. Co. v. Hawksford 160 Wood v. Auburn & Roch. Railw. 563 v. Duke of Argyll 10 v. Dummer 169 v. Epsom & L. Railw. 359 v. McCann 579 v. North Staffordshire Railw. 405 v. Stourbridge Railw. 346 v. Vermont Central Railw. 443 Woodfin v. Insurance Co. 93 Woodfolk ». Nashv. & C. Railw. 261, 264, 265 Woodman v. Joiner 633 Wooley v. Constant 124 Woolson v. Northern Railw. 499 Worcester & Nashua Railw. v. Hinds 175 Worcester Turnpike v. Willard 162 Works v. Junction Railw. 332 Worrall v. Judson 136 Worsley v. South Devon Railw. 358 Worthington v. Bait. & Ohio Railw. 627 Wright v. Coster 306 v. Gossett 494 v. Ind. &c. Railw. 501 v. N. Y. Central Railw. 521, 531, 532 v. Petrie 170 v. Scott 330 v. Wai-ren 149 , v. Wilcox 511 Wyatt v. Great W. Railw. 538, 632 Wycombe Railw. v. Donnington Hospital 226 Wyman v. Lexington & West Cambridge Railw. 274, 382 v. Penn. & Ken. Railw. 496 Wynn v. Alford 548 v. Shropshire Union Railw. & Canal 621 Wynne v. Price 132, 136 Wynstanley v. Lee 339 Wyrley Nav. v. Bradley 297 Yarborough v. Bank of England 511 York & Cumberland R. v. Pratt 175 York & Maryland Line Railw. v. Winans 590 Young v. Harrison 283 v. N. Y. Central Railw. 507 v. Yarmouth 535 Zabriskie v. C. C. & C. Railw. 67, 78, 557, 563 v. Jerse) r City & Bergen Railw. 314 Zack v. Penn. Railw. 268 Zimmerman v. Union Canal Co. 232, 284, 306 THE LAW OF RAILWAYS. CHAPTER I. INTRODUCTION. 1. Origin of railways in England. 2. First built upon one's own land, or by special license from the owner. 3. Questions in regard to private railways. 4. Railways in America, public grants. 5. Use of steam power on railways. 6. The franchise of a railway not necessarily corporate, nor unassignable. § 1. 1. Although some of the Roman roads, like the Appian Way, were a somewhat near approach to the modern railway, being formed into a continuous plane surface, by means of blocks of stone fitted closely together, yet they were, in the principle of construction and operation, essentially different from railways. The idea of a distinct track, for the wheels of carriages, does not seem to have been reduced to practice until late in the seventeenth century. In 1676, some account is given of the transportation of coals near Newcastle, upon the river Tyne, upon* a very imperfect railway, by means of rude carriages, whose wheels ran upon some kind of rails of timber. 1 About one hundred years afterwards, an iron railway is said to have been constructed and put in operation at the colliery near Sheffield. From this time they were put into very extensive use, for conveying coal, stone, and other like substances, short distances, in order to reach navigable waters, and sometimes near the cities, where large quantities of stone were requisite for building purposes. 2. These railways, built chiefly by the owners of coal-mines 1 Roger North's Life of Lord Keeper North, vol. 2, p. 281 ; Ency. Americana, Art. Railway, vol. 10, p. 478. 1 1 2 INTRODUCTION. § 1. and stone-quarries, either upon their own land or by special license, called way-leave, upon the land of others, had become numerous * long before the application of steam power to rail- way transportation. 3. Some few questions in regard to the use of these railways, or tramways, at common law, have arisen in the English courts. 2 But as no such railways exist in this country, it would scarcely be expected we should here more than allude to such cases. 3 2 Walford on Railways, 2; Keppell v. Bailey, 2 My. & K. 517; Hemingway v. Fernandes, 13 Simons, 228. These cases seem to establish the rule, that a covenant to erect a railway across the land of another, and to use the same exclusively for a given transportation, is binding upon the assignees of the interest. But a mere covenant to use an adjoining railway, and pay a specified toll, does not run with the land then used by the covenanter, and from which he derives the material transported. Id. 3 Walford, 3-10. The points chiefly discussed in the reported cases in refer- ence to private railways and railways at common law, are : — 1. That these way-leaves, or reservations, by which one man has the right to build a railway upon the land of others, or in the rightful occupation of others, are not to be limited to the kind of railway in use at the date of the reservation or grant, but will justify the building of a railway, suitable and convenient for the use for which the reservation or grant is made, and with all such needful or useful improvements, as the progress and improvements of art and science will enable the grantee to avail himself of. Dand v. Kingscote, 2 Railw. C. 27; s. c. 6 M. & W. 174. Hence it was considered that such railways might, upon the general application of steam power to railways, adopt that as an improve- ment, coming fairly within the contemplated use of their grant or reservation, although wholly unknown at the date of their grant. Bishop v. North, 3 Railw. C. 459. 2. That this will not justify the grantee of a way-leave for a railway, for a special purpose, to erect one for general purposes of transporting merchandise and passengers. Dand v. Kingscote, 2. Railw. C. 27 ; Farrow v. Vansittart, 1 Railw. C. 602; Durham & Sunderland R. v. Walker, 3 Railw. C. 36. In this last case, which was a decision of the Exchequer Chamber, the way-leave was retained by the landloi-d in leasing the land, and the court say, it is not an ex- ception, for it is not parcel of the thing granted, and it is not a reservation, as it did not issue out of the thing granted, but it is an easement, newly created, by way of grant, from the lessee. And that it was to be presumed the deed was executed by both parties, lessor and lessee. But it was held, that where, by a canal act, (32 Geo. 3,c. 100, § 54,) the pro- prietors of coal-mines, within certain parishes, are empowered to make railways to convey coal over the land of others, by paying or tendering satisfaction, that this power was not limited to such persons as were the proprietors, at the date 2* § 1. INTRODUCTION. 3 *4. All railways and other similar corporations in this coun- try exist, or are presumed to have originally existed, by means of an express grant from the legislative power of the state or sovereignty. 4 5. The first use of locomotive engines upon railways for pur- poses of general transportation does not date further back than October, 1829 ; and all the railways in this country, with one or two exceptions, have been built since that date. 5 of the act, but extended to subsequent proprietors. Bishop v. North, 3 Railw. C. 459. 3. That if the railway was such a railway as the company, at the time when it was made, might lawfully make, for the purposes for which, when made, they might lawfully use it, the plaintiff, as reversioner, had no ground of complaint, by reason of the intention of the company to use it for other purposes, for which they had no right to use it, until such intentions were actually carried into effect. Durham & Sunderland R. v. Walker, 3 Railw. C. 36. But where other parties have acquired the right to use a railway originally erected by private enterprise and for private purposes, the English courts at an early day restrained the owners of the railway by mandamus from taking up their track, and required them to maintain it in proper condition for public use. Rex v. Severn R. 2 B. & Aid. 646. But see Thome v. Taw Vale R. 13 Beavan, 10. 4. That such way-leaves, for the erection and use of railways upon the land of others, may exist by express contract ; by presumption or prescription ; from necessity, as accessory to other grants ; and by acquiescence, short of the limit of prescription. Barnard v. Wallis, 2 Railw. C. 162; Monmouth Canal Co. v. Harford, 1 C. M. & R. 614. These railways, at common law and by contract, impose certain burdens upon the proprietors, as the payment of rent sometimes for the use of the land, tenant's damages, and the keeping their roads in repair, so as not to do damage to the occupiers of the adjoining lands. Wilson v. Anderson, 1 Car. & K. 544 ; Wal- ford, supra. 4 2 Kent, Comm. 276, 277; Stockbridge v. West Stockbridge, 12 Mass. R. 400; Hagerstown Turnpike Co. v. Creeger, 5 Har. & J. 122 ; Greene v. Dennis, 6 Conn. R. 292, 302, Hosmer Ch. J. ; Franklin Bridge Co. v. Wood, 14 Ga. R. 80. But from the case of Wilson v. Cunningham, 3 California R. 241, it seems that the municipal authorities of San Francisco did assume to grant a private railway within the limits of the city. The court held the proprietor liable for the slight- est negligence in its use, whereby third parties were injured. Post, § 250. 5 The celebrated trial of locomotive engines upon the Liverpool and Man- chester Railway, for the purpose of determining the relative advantage of stationary and locomotive power upon such roads, and which resulted in favor of the latter, was had in October, 1829. The Quincy Railway, for the trans- portation of granite solely, by horse power, was constructed about two years 3* 4 INTRODUCTION. § 1. 6. There is nothing in the prerogative right of maintaining and operating a railway and taking tolls thereon which is ne- cessarily of a corporate character, or which might not, with per- fect propriety, belong to, or be exercised by, natural persons, or which in its nature may not be regarded as assignable. 6 before this. But the Boston and Lowell Railway, one of the first railways in this country for general transportation of passengers and merchandise by the use of steam power and locomotive engines was incorporated in June, 1830. And railways for purposes of general traffic were constructed about the same date in most of the older States, and very soon throughout the country. 6 Bennett, J., in Bank of Middlebury v. Edgerton, 30 Vt. B. 182. §2. PRELIMINARY ASSOCIATIONS. "CHAPTER II. PUBLIC RAILWAYS AS CORPORATIONS. PRELIMINARY ASSOCIATIONS. SECTION I. Mode of instituting' Railway Projects. 1 . Subscribers' associations in England. 2. Subscribers bound by subsequent charter. 3. Issue and registry of scrip certificates. 4. Original subscriber liable to unregistered purchaser. 5. Holders of scrip entitled to registry. 6. Preliminary associations not common in this country. 7. Petitioners for incorporation file plans and surveys. 8. Present English statutes. 9. Preliminary associations may be regis- tered. 10. Not now held responsible as partners in England. § 2. 1. The mode of instituting railway enterprises, in Eng- land, is more formal, and essentially different, from that adopted in most of the American States. There the promoters usually associate, under two provisional deeds, the one called a " Subscri- bers' Agreement," and the other a " Subscription, or Parliamen- tary Contract," which are expected only to serve as the basis of a temporary organization, till the charter is obtained. This is specifically and often in detail, to some extent, provided for, in the subscribers' agreement. A board of provisional directors is provided, to carry forward the enterprise, whose powers are de- fined in the subscribers' agreement, or deed of association, and whose acts will not bind the members, unless strictly within the powers conferred by the deed. 2. Under this form of association the subscribers are bound, by the act obtained, if within the powers conferred by the deed, even where it involves the purchase of canal, and other pro- perty, by the company. 1 And courts of equity often interfere to restrain the * provisional directors from exceeding their 1 Midland Great Western Railway v. Gordon, 16 M. & W. 804. *631, 632 6 PRELIMINARY ASSOCIATIONS. § 2. powers under the deed, 2 or misapplying the funds, or delaying payment of the debts of the association. 3 3. The provisional directors usually issue scrip certificates, which pass from hand to hand, by delivery merely, and after the charter is obtained, the scrip-holders are registered, as share- holders in the company, and thereby become entitled to all the rights, and subject to all the liabilities of the shareholders. 4 4. And if the original subscriber sell the scrip to one who omits to have his name registered as a shareholder, by reason of which the original subscriber cause his name to be registered, and sell the shares again, he will be held to account for the avails of the second sale, as a trustee for the first purchaser. 5 5. But the company are not obliged to accept of the holders of scrip, as shareholders, in discharge of the original subscri- bers, it has been said, but may insist upon registering the origi- nal subscribers to the deed of association, to whose aid it may be presumed the promoters looked in undertaking the enter- prise, which by their act of incorporation they are morally, and in some cases legally, bound to carry forward. 6 But the Eng- lish decisions, upon the whole, hardly seem to justify this prop- osition. The subscriber cannot abandon the- obligation at 2 Gilbert v. Cooper, 4 Railw. C. 396. All parties concerned must be made parties to the bill, even shareholders of whom it is alleged a rival company pro- pose to purchase shares, to destroy the independence of one of the companies, connected with the common enterprise. Greathed v. S. W. & Dorchester Railway, 4 Railw. C. 213. 3 Lewis v. Billing, 4 Railw. C. 414 ; Bagshawe v. Eastern Union Railway, 6 Railw. C. 152; s. C. 7 Hare, 114; Bryson v. Warwick & Birmingham Canal Co. 23 Eng. L. & Eq. & R. 91. In this last case, the railway company being only provisionally registered, expended £10,000 in the purchase of the stock of the defendants. The railway finally failing to go into operation, in the process of winding up, one of the shareholders was allowed to, institute proceedings in equity, on behalf of himself and others, being shareholders, to compel defend- ants to refund the money, and the court held the contract illegal, and compelled the defendants to refund the money received under it. 4 Post,§ 47; Birmingham, B & Th. J. Railway v. Locke, 1 Q. B. 256; London Grand J. Railway, v. Graham, id. 271 ; The Cheltenham & G. W. U. Railway v. Daniel, 2 Railw. C. 728 ; Sheffield & A. &. M. Railway v. Wood- cock, 2 Railw. C. 522. 5 Beckitt v. Bilbrough, 19 Law J. 522 ; 8 Hare, 188. * Hodges on Railways, 97. § 2. MODE OF INSTITUTING RAILWAY PROJECTS. 7 will. 7 But if the scrip is * transferable, by delivery, it would be strange if the holder was not entitled to be registered, as a shareholder, the same as the assignee of a fully registered share in the stock. And for the company, after having issued scrip certificates, in a form calculated to invite purchases, and when they were aware of the use constantly made of such scrip, to refuse to register the names of the holders, as shareholders, and members of the company, would amount to little less than express fraud. Hence we conclude they have no right to de- cline accepting such scrip-holder, as a shareholder. 8 But where false scrip had been issued, beyond the amount allowed in the charter, and the full number of shares allowed by the charter already registered, it was held the company could not, upon that ground, refuse to register the shares of such as had purchased the genuine scrip. 9 But we shall have occasion to say more upon this subject elsewhere. 10 6. By the laws of some of the States a given number of per- sons associating, in a prescribed form, for particular purposes, as religious, manufacturing, and banking purposes, and often for any lawful purpose, are declared to be a corporation. In such cases no application to the legislature is required. But generally, railways in this country have obtained special acts of incorporation. There is, in most of the States, no provision for any preliminary association, and these enterprises are, for the most part, carried forward, by individuals, or partnerships, and questions arising, in regard to the binding force of the acts of the promoters, either upon, or towards the corporation, must depend upon the general principles of the law of contract. 11 7. By the general law of some of the States the petitioners are required to furnish surveys of the proposed route, properly delin- eated upon charts, # by competent engineers, with estimates, and other information requisite for the full understanding of the subject. And these profiles and plans are required, where the 7 Kidwelly Canal Co. v. Raby, 2 Price 93 ; Great North of Eng. Railway v. Biddulph, 2 Railw. C. 401, where the question is raised, but not determined. 8 Midland G. W. Railway v. Gordon, 5 Railw. C. 76. 9 Daly v. Thompson, 10 M. & W. 309. 10 Post, § 39, 47. 11 Angell & Ames on Corporations, § 86-94. 8 PRELIMINARY ASSOCIATIONS. § 2. petition is granted, to be deposited in some public office, for in- spection and preservation. 12 8. Since the publication of the former edition, the mode of procedure in obtaining parliamentary powers for railways, in England, has been considerably changed. The former laws have been repealed, and the whole consolidated into one stat- ute, 13 called " The Companies' Act, 1862," which applies to other companies as well as railways. 9. The usual course now is for the preliminary association to register itself as a preliminary company under the Act of 1862, for the purpose of obtaining a special Act of Parliament. This is effected by the promoters signing a memorandum of associa- tion, in which the powers of the company are specially limited to certain acts or purposes. 10. If the association be not registered under the statute so as to constitute it a corporation with limited powers, there may be danger that the individual members, who are active in pro- moting the enterprise, may incur the responsibility of general partners. 14 But in England, it seems now settled that the pro- moters of railways are not, ordinarily, to be held responsible, as partners, for the acts of each other. 15 12 Laws of Mass. 1833, ch. 176 ; 2 Railroad Laws & Ch. 616 ; Id. 657 : Laws of Mass. 1848, ch. 140; Laws of Rhode Island, 1836 ; 2 Rail. Laws & Ch. 838 ; Laws of Conn. 1849, ch. 37 ; Id. 1153; Rev. Statutes of Maine, ch. 81, § 1 ; 1 Rail. Laws & Ch. 305. Similar provisions exist in many of the other States. But they are very general, and ordinarily the plans furnished are so imper- fectly made, as not to afford much protection to land-owners. And a compli- ance with these requirements not being, in any sense indispensable to the validity of special acts, they are probably not very strenuously enforced by legislative committees, especially in cases where opposition is not made to the new incorporation, which is not very common, unless the project interferes with some rival work. 13 25 & 26 Vict. c. 89. 14 Hodges on Railways, (ed. 1865,) 2. 15 Hamilton v. Smith, 5 Jur. N. S. 32; Post, § 4, n. 11 ; Norris v. Cooper, 3 H. Lds. Cas. 161. Statutes 27 & 28 Vict. c. 121, facilitates, in certain cases, the obtaining of powers for the construction of railways. The act may be cited as "The Railways Construction Facilities Act, 1864." The recital to the pre- amble moderates the cases to which the act is to apply ; it recites that it is ex- pedient to facilitate the making of branch and other lines of railway, and de- viations of existing railways,, and of railways in course of construction, and also §3. CONTRACTS OF PROMOTERS NOT BINDING. *SECTION II. Contracts of the Promoters not binding at law upon the company. 1 . In this country promoters only bind them- selves and associates. 2. Contracts of promoters not enforceable by company. 3. But by consenting to a decree in equity setting up the contract, the company will be held to have adopted it. § 3. 1. The promoters of railways, in this country, where the law makes no provision for the preliminary association becom- ing a corporation, can only bind themselves and their associates, at most, by their contracts. 1 The promoters are in no sense the execution of new works connected with, or for the purposes of, existing railways ; and that the object aforesaid would be promoted, if, where all land- owners and other parties beneficially interested are consenting to the making of a railway, or the execution of a work, the persons desirous of making or execut- ing the same were enabled to obtain power to do so, on complying with the con- ditions of the general Act of Parliament, without being obliged to procure a special act. The promoters having contracted for the purchase of all the lands required for the railway, they are empowered to apply for a certificate from the Board of Trade, in the same manner, and subject to the same incidents, as ob- taining a certificate under the Railways Companies' Powers Act. The lines and works of a railway are sufficiently shown on the plans depos- ited by a black line, with dotted lines on each side, to mark the limits of devia- tion. Weld v. London and South Western Railway Co., 9 Jur. N. S. 510, S. C. 11 W. R. 448. Where the deposited plans and sections specify the span and height of a bridge by which a railway is to be carried over a turnpike road, the company will not, in the construction of the bridge, be allowed to deviate from the plans and sections. Attorney-General v. Tewkesbury and Great Malvern Railway Company, 9 Jur. N. S. 951 ; s. c. 8 L. T. N. S. 682. 1 Moneypenny v. Hartland, 1 C. and P. 352. Abbott, Ch. J., said: "Before an act passes for such a work as this, the surveyor and other persons employed on it look to the committee, or body of adventurers, who firs't employ them." S. p. Kerridge v. Hesse, 9 C. & P. 200; Doubleday v. Muskett, 7 Bing. 110. And one who attends the meetings of such preliminary association, and takes part, will ordinarily be precluded from denying his liability as a partner. Har- rison v. Heathorn, 6 Man. & Gr. 81 ; Sheffield, Ash. and M. Railway v. Wood- cock, 7 M. and W. 574. J£ the defendants have suffered themselves to be held out as partners in the enterprise, and engaged in carrying it forward, and *634 10 PRELIMINARY ASSOCIATIONS. § 8. identical *with the corporation, nor do they represent thern, in any relation of agency, and their contracts could of course only bind the company, so far as they should be subsequently adopted by it, as their successors ; much in the same mode and to the same extent, and under the same restrictions and limita- tions, as the contracts of one partnership bind a succeeding part- nership in the same house. 2. But a contract by a joint-stock association, that each mem- ber shall pay all assessments made against him, cannot be enforced, by a corporation subsequently created, and to which, others have performed service for the association, upon their credit, they are liable. Wood v. The Duke of Argyll, 6 Man. & Gr. 928 ; Steigenberger v. Carr, 3 id. 191. But express proof is required of authority from the partners, or of a necessity to draw bills, in the conduct of the business, to justify the directors in drawing bills on the credit of the association. Dickinson v. Valpy, 10 B. & C. 128. From the foregoing cases, and Bell v. Francis, 9 C. & P. 66, and some others, it would seem, that the directors and managing committee are always liable for services rendered such associations, on their employment and credit, and that such other members of the association are liable also, as the terms of the association, or their own active agency in the employment of ser- vants and agents, fairly justify such employees in looking to for compensation Post, §4, n. 11. In regard to admissions made by provisional committee-men, and others, who have taken part in instituting railway projects, some allowance is made in the English courts, for probable mistakes and misapprehensions, by those not well acquainted with the liabilities of such persons. Newton v. Belcher, 6 Railw. C. 38; s. c. 12 Q. B. 921. And where others have not acted upon such admis- sions, the party has been allowed to show that they were made under mistake, either of law, or fact, and if so, the party has been held not to have incurred any additional liability thereby. Newton v. Liddiard, 6 Railw. C. 42 ; s. c. 12 Q. B. 925. The rule laid down by Bailey, J., in Heane v. Rogers, 9 B. & C. 577, upon this subject, is here expressly recognized by Lord Denman, Ch. J. " The general doctrine laid down in Heane v. Rogers, that the party is at liberty to prove that his admissions were mistaken, or untrue, and is not estopped, or con- cluded by them, unless another person has been induced by them to alter his condition, is applicable to mistakes, in respect of legal liability, as well as in respect of fact." And this estoppel, it was held in the principal case, only extends to parties and privies, to the particular transaction in which the admis- sion was made, and that third parties, having no interest in it, either originally or by derivation, can claim no benefit from it. This is in accordance with the established principles of the law of evidence, at the present time. See the opinion of the court in Strong v. Ellsworth, 26 Vt. R. 366. *635 § 4. SUBSCRIBERS TO PRELIMINARY ASSOCIATION. 11 in pursuance of the original articles of association, the funds and all the effects of the former company have been trans- ferred. 2 Nor is the act of all the corporators even, the act of the corporation, unless done in the mode prescribed by the charter and general laws of the state. 3 Nor can an incorporated com- pany sustain an action at law, upon a bond executed to a pre- liminary association, by the name of the individuals and their successors, as the governors of the Society of Musicians, for the faithful accounting of A. B., their collector, to them and their successors, governors, &c, the company being subsequently in- corporated. 4 3. But the company, by consenting to a decree against them, upon a bill to enforce a contract with the promoters, by which they stipulated to withdraw opposition in parliament, upon con- dition that the company, when it came into operation, should take the land of the opposers of the bill at a specified price, and pay all the costs and expenses of the opposition until the time of the compromise, were held to have adopted the agreement, whether it would have been otherwise binding upon them or not. 5 SECTION III. Subscribers to the Preliminary Association inter sese. 1. Liability for acts of directors limited by 5. Not liable for expenses except by terms of terms of subscription. agreement. 2. Association not binding until prelimina- 6. Deeds of association generally make pro- ries are complied with. vision. 3. Contracts, how far controlled by oral rep- ! 7. One who obtains shares, without executing resentations of directors. the deed, not bound to contribute. 4. Subscribers not excused by directors from n. 11. No relation of general partnership paying calls. subsists between subscribers. § 4. 1. The project for a railway being set on foot by a pro- 2 Wallingford Manufacturing Co. v. Fox, 12 Vt. R. 304 ; Goddard v. Pratt, 16 Pick. 412, where it is held, the original copartners are still liable, upon contracts made with third parties, ignorant of the dissolution by the effect of the incorpo- ration, the company having carried on business in the name of the partnership. 3 AVheelock v. Moulton, 15 Vt. R. 519. 4 Dance v. Girdler, 4 Bos. & P. 34. See Gittings v. Mayhew, 6 Md. R. 113. 5 Williams v. St. George's Harbor Co., 2 De G. & J. 547 ; s. c. 4 Jur. N. S. 1066. 12 PRELIMINARY ASSOCIATIONS. § 4. visional committee of directors or managers, the subscribers may insist * upon the terms of subscription. The subscribers are not bound by any special undertaking of the directors, or any portion of them, beyond or aside of the powers conferred by the terms of the deed or contract of association. 1 2. And the association is not binding, until the provisions by which it is, by its own terms, to become complete, are complied with. If before that the scheme be abandoned, the provisional subscribers, or allottees, may recover back their deposits of the provisional committee, in an action for money had and received. 2 So, too, if one is induced to accept of shares in the provisional company, by fraudulent representations, he may recover back the whole of his deposits. 3 3. But if one actually become a subscriber, he is bound by the terms of subscription, without reference to prior oral repre- sentations, and must bear a portion of the expense incurred, if the subscription so provide. 4 But if the directors, in such pro- visional company, in order to induce subscriptions, promise the subscriber, that in the event of no charter being obtained, he shall be repaid his entire deposit, this contract is binding upon them, and may be enforced by action, notwithstanding^ the sub- scriber's agreement authorized the directors to expend the oney in the mode they did. 6 4. But the contract of the directors will not excuse the sub- scriber from paying calls, if the terms of the subscriber's agree- ment require it. 6 The contract of the directors in such case, and the deed of association, are wholly independent of each other, and neither will control the other. 7 1 Londesborough ex parte, 27 Eng. L. & Eq. 292 ; Ex parte Mowatt, 1 Drewry, 247. 2 Walstab v. Spottiswoode, 4 Railway C. 321. 3 Jarrettv. Kennedy, 6 C. B. 319. 4 Watts v. Salter, 10 C. B. 477. And if one subscribe the agreement and parliamentary contract, he will be liable, although he have not received the shares allotted to him or paid the deposits. Ex parte Bowen, 21 Eng. L. & Eq. 422. 5 Mowatt v. Londesborough, 25 Eng. L. & Eq. 25 ; s. c. in error, 28 Eng. L. & Eq. 119 ; Ward v. Same, 22 Eng. L. & Eq. 402. 5 Ex parte Mowatt, 1 Drewry, 247. T Dover & Deal Railway, ex parte Mowatt, 19 Eng. L. & Eq. 127. *636 § 4. SUBSCRIBERS TO PRELIMINARY ASSOCIATION. 13 5. But it has been held, that persons, by taking shares in a projected railway, do not bind themselves to pay any expense incurred, unless it is so provided in the preliminary contracts of association, or the expense is incurred with their sanction and upon their credit. 8 And *even where such shareholder consents to act on the provisional committee, it will not render him liable, as a contributory, to the expense of the company. 9 6. But in general, the form of the deeds of association is such, that if one takes shares without reservation, he is to be regarded as a contributory to the expense, 10 and especially where he acts as one of the provisional committee, and also accepts shares alloted to him. 10 7. But one who has obtained shares in a projected railway company, but without executing the deed of settlement, or any deed referring to it, was held not liable to contribute to the expense incurred, in attempting to put the company in opera- tion, 11 and especially if the acceptance of the shares is condi- tional, upon the full amount of the capital of the company being subscribed, which was never done. 11 8 Maudslay ex parte, 1 Eng. L. & Eq. 6 1 . 9 Carmichael ex parte, 1 Eng. L. & Eq. 66 ; Clarke ex parte, id. 69. 10 Burton ex parte, 13 Eng. L. & Eq. 435 ; Markwell ex parte, 13 Eng. L. & Eq. 456; UpfilPs case, 1 Eng. L. & Eq. 13; Watts v. Salter, 12 Eng. L. & Eq. 482. See also St. James's Club in re, 13 Eng. L. & Eq. 589, as to the effect of proof, of the subscriber being present "when a resolution is passed. 11 The Galvanized Iron Co. v. Westoby, 14 Eng. L. & Eq. 386. It was formerly considered, that all persons engaged in obtaining a bill in parliament for building a railway, were partners in the undertaking, and for that reason a subscriber, who acted as their surveyor, could not maintain an action for work and labor, done by him in that character, against all or any one of the subscribers. Holmes v. Higgins, 1 B. & C. 74. See also Goddard v. Hodges, 1 C. & M. 33. But it is now regarded as well settled, in all the courts in Westminster Hall, that there subsists between the subscribers to such an enterprise no relation of general partnership whatever, and no power to bind each other for expenses incurred in carrying forward the enterprise. Each binds himself only by his own acts and declarations, unless he acts by virtue of some authority conferred by the deeds of association. Parke, Baron, in Bright v. Hutton, 3 H. L. Cases, 341, 368. And an agreement, aside of the deed of association, that one of the promoters shall indemnify another, is held valid. Connop v. Levy, 5 Railway C. 124; s. c. 11 Q. B. 769. But a general indemnity against costs will only ex- *637 * 14 PRELIMINARY ASSOCIATIONS. § 5. * SECTION IV. Contracts of the Promoters adopted by the Company. 1. Liability may be transferred icith assent of\ n. 3. Powers of provisional company to con- creditors. I tract limited by statute. § 5. 1. The company when fully incorporated may assume the liabilities of the preliminary association, incurred in obtaining tend to costs in suits lawfully brought. Lewis v. Smith, 2 Shelford, Bennett's ed. 1030. And in regard to liability, for expenses incurred in carrying forward railway projects, it often happens, that one who has been active may thereby make him- self liable to tradesmen and others who have performed service in behalf of the enterprise, upon the expectation he would see them paid. In Lake v. Duke of Argyll, 6 Q. B. 477, 479, Denman, Ch. J., said : " But when persons meet to pre- pare the measures necessary for calling the society into existence, attendance on such meeting, and concurrence in such measures, may be strong evidence, that any individual there present, and taking part in the proceedings, held himself out as a paymaster to all who executed their orders ; and though not liable as a mem- ber or shareholder, yet his declared intention to become the president, or a member, in whatever event, or to take a share under any conditions, may be material evidence to show that he authorized contracts with those whose ser- vices were required by what may be called the constituent body." But a charge to the jury, that before surveyors, in such case, could recover of the provisional committee, they must be satisfied that defendants did, by them- selves or their agent, employ the plaintiff to do the work, or that, being informed of their having done it, on their credit, by the employment of some one not au- thorized, they consented to be held liable, was affirmed in the Exchequer Chamber. Kevins v. Henderson, 5 Railway C. 684 ; "Williams v. Pigott, 5 Railway C. 544. See also Spottiswoode's case, 39 Eng. L. & Eq. 520. Since the publication of the second edition, the English courts have made nu- merous decisions bearing upon the general subject discussed in this note. In Maddick v. Marshall, 10 Jur. N. S. 1201, the defendant was employed by the parties in interest to act as provisional director in connection with others, under the assurance from the solicitor of such parties, that they were safe and would incur no personal responsibility ; and the directors thereupon appointed the prin- cipal party in interest secretary, and passed a resolution to advertise, which resolution was signed by the defendant as director. The plaintiff upon taking the order was shown the resolution certified by the defendant as authority for the order. The court held this testimony for the jury, tending to show a per- sonal undertaking by defendant, and that they could not disturb a verdict against him. See also Swan v. The North British Australasian Co., 8 Jur. N. S. 940, as to what acts will create an estoppel in such cases. *»638 § 5. CONTRACTS OF PROMOTERS ADOPTED. 15 the special act, or as is sometimes the case, where the associa- tion make an assignment of their property. 1 But even an express provision in the charter, that the company shall be Under the English statute, all the subscribers are constituted directors until they designate who shall act in that capacity, and have authority to appoint one of their number to an office in the company. Eales v. The Cumberland Black Lead Mine Co. 7 Jur. N. S. 169. It seems to be considered essential, in order to fix the liability of a subscriber to the articles of association on that ground alone, that the subscription should be in his own handwriting and not by procuration merely. Richardson ex parte, 4 Law T. N. S. 589. The company are not bound to give notice of the ai- lotment of shares in order to bind the subscriber to take them. It is his duty to take notice of the allotment, and to make payment of all future dues fixed by law or the terms of the contract. Bloxam ex parte, 10 Jur. N. S. 814. But in order to render the allottee liable to pay calls on shares they should be specifi- cally numbered and appropriated by number. Irish Peat Co. v. Phillips, 7 Jur. N. S. 413 ; s. c. affirmed 7 Jur. N. S. 1189, 1 B. & S. 598. But semble he may be estopped to deny his membership. So too it was considered in this case, that in order to bind an associate to pay future calls, it was essential that he should have subscribed the deed of association. The provision of the English statute as to the period within which the register of shareholders shall be made and sealed is regarded as directory, so far as the liability of shareholders is concerned, and they will not be exonerated from re- sponsibility by a failure of the company to comply with the direction. W. N. W. Co. v. Hawksford, 11 C. B. N. S. 456 ; 8 Jur. N. S. 844 in Exchequer Chamber. The company, when fully incorporated, may sue in their own name upon calls made by the directors of the preliminary incorporation. Hull Co. v. Wel- lesley, 6H.&N. 38. A registered shareholder in a company, which was afterwai'ds incorporated with a new company, is entitied to be regarded as a shareholder in the new company, if the act of incorporation so provide, although he may not have exchanged his certificate for shares in the old company for those in the new com- pany. Spackman v. Lattimore, 3 Giff. 16 ; 8. C. 7 Jur. N. S. 179. It was fur- ther decided in this case, that the subscribers could not charge their own sub- scriptions against the company as money advanced for their benefit. Where a subscriber has paid for the expenses of the promoters all that the terms of association required, he cannot be charged further, because he made the payment without taxation. Croskey v. Bank of Wales, 4 Gif. 314. The property in shares vests in the subscriber upon the execution of the deed and complete registration of the company, and the delivery of scrip certificates is not requisite to vesting the shares, but they are to be regarded merely as the indicia of property. Hunt v. Gunn, 3 F. & F. 223. 1 Haslett's Ex'rs v. Wotherspoon, 1 Strob. Eq. 209 ; Salem Mill Dam Co. v. Ropes, 6 Pick. 23. 16 PRELIMINARY ASSOCIATIONS. § 6. solely liable for the debts of the association, will not exonerate the association unless by the consent of the creditors. 2 But when the company assume the debts of the association, by the assent of their creditors, they will be relieved. 3 SECTION V. How contracts of the Promoters may be adopted by the company. Cannot assume the benefit without the burden. § 6. Wherever a third party enters into a contract with the promoters of a railway, which is intended to enure to the ueneht 2 Witiner v. Schlatter, 2 Rawle, 359. 3 Whitwell v. Warner, 20 Vt. R. 425. But by the English statutes com- panies provisionally registered are not allowed to make any contract, not indis- pensable to carrying forward the project to full registration. And where the directors of such a company contracted for plans, sections, and books of refer- ence, to the value of £3,000, it was held a violation of the statute and illegal, and that no recovery could be had upon it. Bull v. Chapman, 20 Eng. L. Eq. 488; 7 & 8 Vict. ch. 110. A contract made between the projector and the directors of a company pro- visionally registered, but not in terms made conditional on the completion of the company, is not binding upon the subsequently completely registered company, although ratified and confirmed by the deed of settlement. Gunn v. London and Lancashire Assurance Co., 12 C. B. N. S. 694. The promoters of a railway company agreed with the tenant for life of setded estates to pay him £20,000 for obtaining his support to their scheme. This agreement was afterwards adopted by the provisional committee of a sec- ond company, which stood in place of the first. The second company's bill passed, and an indenture was made under the company's seal, by which, on the ground of doubts as to the absolute right of the tenant for life to the £20,000, the company was to retain the sum and pay interest on it. Interest was paid for some years, but at length the company refused to make any further payment. Upon a bill by a subsequent tenant for life of the estates to have the company's liability declared, and obtain payment of the £20,000 for the benefit of the settled estate : Held that the contract was ultra vires, and could not be en- forced. Held also that this was not withim the meaning of the Companies' Clauses Consolidation Act, sec. 65, as being in respect of "costs incurred in obtaining the special act, and incident thereto." Lord Shrewsbury v. North Staffordshire R. R. C, V. C. Kindersley; 12 Jurist N. S. 63. § 7. CONTRACTS BETWEEN PROMOTERS AND OPPOSERS. 17 of the company, and they take the benefit of the contract, they will be bound to perform it, upon the familiar principle that one * who adopts the benefit of an act, which another volunteers to perform in his name and on his behalf, is bound to take the burden with the benefit. 1 SECTION VI. Contracts between the Promoters and, Opposers of a BUI for the Charter of a Railway. 1 . English cases numerous. 12-5. Lord Eldon's opinion, in case of Vaux- I hall Bridge Co. § 7. 1. The cases in the English books upon the subject of contracts between the promoters of railway projects in parlia- ment 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 numer- ous, and involve a question of no inconsiderable importance. We shall therefore examine them somewhat in detail. 2. One of the earliest cases upon this subject J was decided by the Lord Chancellor, Cottenham, upon full argument, and great consideration, as early as 1836. But as this case pro- fesses to rest mainly upon a leading opinion of Lord Chancellor Melon, 2 upon, a somewhat analogous subject, it may not be im- proper here to give the substance of that decision. 3. The application to parliament for the plaintiff's 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 plaintiff's grant before the parliamen- tary committee, with a view to secure some indemnity against 1 Gooday v. The Colchester & Stour Valley Railway, 15 Eng. L. & Eq. 596; Preston v. Liverpool & M. Railway, 7 Eng. L. & Eq. 124; Edwards v. Grand Junction Railway, 1 Mylne & Cr. 650. The cases in support of this general proposition are very numerous, and will be more fully examined in the next section. 1 Edwards v. The Grand Junction Railway, 1 Mylne & Cr. 650. 2 Vauxhall Bridge Co. v. The Earl of Spencer, Jacob, 64 (1821). 2 *639 18 PRELIMINARY ASSOCIATIONS. § 7 such loss, to be specially provided for by the plaintiff's act, upon condition that the plaintiffs should open their bridge for the public travel. The promoters of the plaintiff's 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 of Lord Eldon is an affirmance of the decision of the Vice-Chancellor, retaining the bill till the matter should be tried at law. 8 But the intima- tions 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 objec- tionable, 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, 4 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 at- tempted 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 3 s. c. 2 Mad. 35G. 4 1 Br. C. C. 543. 5 Cited 11 Vesey, 53G. *640 § 7. CONTRACTS BETWEEN PROMOTERS AND OPPOSERS. 19 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 leg- islative 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 company ; that they have contracted with a num- ber 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 pro- prietors 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 indi- vidual 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 trans- action 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 de- pends 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 *641 20 PRELIMINARY ASSOCIATIONS. § 8. 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, 1-3. Case of Edwards v. Grand Junction Railway. § 8. 1. Edwards v. The Grand Junction Railway, 1 is an appli- cation 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. 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 trus- tees 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 com- pany, 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 1 1 My. & Cr. G50. *642 § 8. CONTRACTS ENFORCED IN EQUITY. 21 equity will enforce a contract founded upon such a consideration ; and that an incorporated company will he bound hy the agree- ment 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 anything which may have passed, or by any contract which may have been en- tered into by the projectors of the company before their actual incorporation. 2. " If this proposition could be supported, it would be of ex- tensive 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 en- tered 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 project- ors of the railway ; it is, therefore, the agreement of the parties who were seeking an act of incorporation, that, when incorpo- rated, certain things should * be done by them. But the ques- tion 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 pro- jectors 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 *643 22 PRELIMINARY ASSOCIATIONS. § 8. into which such projectors had entered. They cannot exercise the powers given by parliament to such projectors, in their cor- porate capacity, and at the same time refuse to comply with those terms, upon the faith of which all opposition to their ob- taining such powers was withheld. The case of The East Lon- don Water Works Company v. Bailey, 4 Bing. 283, was cited to prove that, save in certain excepted cases, the agent of a corpo- ration must, in order to bind the corporation, be authorized by a power of attorney ; but it does not therefore follow that corpora- tions are not to be affected by equities, whether created by con- tract or otherwise, affecting those to whose position they succeed, and affecting rights and property over which they claim to exer- cise 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 com- pany 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 Spen- cer, 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 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 itsejf with a con- tract made by the projectors of the company, before the act of incorporation. On the other hand Dance v. Girdler, 1 Bos. & Full. X. 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 *644 § 9. CONTRACTS OF PROMOTERS BIND THE COMPANY. 23 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, be- fore the Queen's Bench, 2 and decided, on full argument, where it is held, that a contract to pay Lord Howden £5,000, in consid- eration of 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 Cham- ber. 3 The case being the leading case upon the subject, at law 1 1 Railway Cases, 326 (1837) ; 1 Keen, 583; 3 Mylne & Cr. 97. 2 10 Ad. & Ellis, 793. 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 Ex- chequer 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 *645 24 PRELIMINARY ASSOCIATIONS. § 9 certainly, may require a more extended statement. The agree- ment 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 pro- prietors ; that a bill had been introduced into parliament, ac- cording to which the line would pass through plaintiffs estates and near his mansion, and that he was a dissentient, and op- posed 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 devi- ated line, exclusive of and without prejudice to further com- pensation to plaintiff, in the event of the deviated line not being ultimately adopted, and without prejudice to such further compen- sation 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, 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 agree- ment, 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 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 P^xchequer 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. 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. *646 § 10. CONTRACTS OF PROMOTERS ENFORCED. 25 to, or known in parliament, and was concealed from the legisla- ture 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 Con- tracting Parties, or the Company. 1. Contract to take land of opposing party. | 2. Contract prejudicial to the public. § 10. 1. Since the decison of Howden v. Simpson, in the Ex- chequer Chamber, and the House of Lords (1842), the English courts seem to have acquiesced in the principles there estab- lished, until a very recent period. The validity of such a con- tract is recognized, in regard to the company purchasing the interest of the lessee of lands near the line of the proposed rail- way. 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 (20,000/.), by which he was induced to withdraw opposition ; and the promoters of a rival line, who pro- posed also to pass through the same land, had petitioned for a charter, and the merits of the two projects were, under the sanc- tion 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 2. And where one railway company was prohibited from opening their line for traffic, until they had built a branch rail- way, * connecting their line with that of another company, it was held, that a court of equity was bound to enforce the pro- 1 Doo v. The London and Croydon Railway, 1 Railw. C. 257. * Stanley v. The Chester and Birkenhead Railw. 1 Railw. C. 58 ; 9 Simons, 264. *647 26 PRELIMINARY ASSOCIATIONS. § 11 hibition, 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 re- strain railways from proceeding to take land under their com- pulsory 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 notwithstand- ing 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. 1 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, 29 Law Times, 245. 1 Lord Petre v. Eastern Counties Railway Co., 1 Railw. C. 462. 2 Shelford, 400. 8 Hawkes v. Eastern Counties Railway Co., 15 Eng. L. & Eq. 358; s. c. before the Vice-Chancellor, 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 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 § 12. CONTKACTS ENFORCED IF RAILWAY ABANDONED. 27 ♦SECTION XI. Such Contracts enforced where the Railway is abandoned. 1. Where a certain sum is to be paid to i 2. Merely provisional contracts not always quiet opposition. enforced. § 12. 1. It has sometimes been held, that an absolute agree- ment made, by the promoters of a railway, to pay one a certain 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 binding 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 de- creeing 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 purchas- ing land and building the road ; and that the land could be of no use to the com- pany 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. 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, 9 Eng. L. & Eq. 249, there was originally a decree for specific performance, and after the de- cision 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 subse- quent conduct on the part of the company could relieve them from the obliga- tion they were bound by at the time they entered into it. The act of parlia- *648 28 PRELIMINARY ASSOCIATIONS. § 12. sum to * quiet opposition, is valid, notwithstanding the contem- plated work is never carried forward, and the injury to the op- ment having passed, this was as good a contract as a man ever entered into. I must look at it at the time when it was executed, — at all events, at the time the act passed. It contemplated the act passing, and the act did pass exactly in the terms pointed out in the agreement. Well, then, it is a valid contract. Suppose, as was observed in argument very properly, suppose this agreement had been entered into after the passing of the act, would any man at the bar say that was a contract not to be executed ? Looking at the authorities which have concluded that question, why should it not be as binding, being entered into before the act passed, as it must be admitted it would have been if executed immediately after the act passed ? There is no magic in these things. The good faith, the truth, and the honesty of the transaction is to be looked at, — there is no rule of law in it. If, therefore, Webb v. The Direct London and Portsmouth Railway Company is considered to decide anything adverse to the decision in this case, I should support the decision of this case, as far as my au- thority went. With great deference to others, I should support this decision certainly at the expense of the contrary view, that is, contrary to the view taken on that appeal, if that were to be so ; but I apprehend it turned on the uncer- tainty of the contract. In Lord James Stuart v. The London and Northwestern Railway Company, the Master of the Rolls there decreed a specific performance, upon the authority of Webb v. The Direct London and Portsmouth Railway Company, before it was reversed. It was said that the reversal of that therefore displaced his authority. That also was reversed. There again were two ques- tions : first, a question whether there was any concluded agreement, — any binding agreement, — anything amounting to a positive contract; and next, there was great delay. Those cases were relied upon, and I can only repeat that I am not saying either of those decisions was not a proper decision, and I am not called upon to say that ; but I say, if they are to be considered in oppo- sition to a specific performance in a case like that before me, that I should totally disagree with them. It is a new view of the doctrine of this court, and it is a view which could not be supported consistently with the many authorities which exist on this subject. " Then it is argued with great force and insisted upon that there is illegality here, because the company is applying its funds to purposes not authorized by the act of parliament. Now, for that several cases were quoted. MacGregor v. The Dover and Deal Railway Company, 17 Jur. 21 ; s. c. 16 Eng. L. & Eq. 180 ; East Anglian Railway Company v. Eastern Counties Railway, 21 Law J. Rep. (n. s.) C. P. 23 ; s. c. 7 Eng. L. & Eq. 505 ; and the case of Bagshawe v. The Eastern Union Railway Company, 2 Hall & Tw. 201 ; s. c. 2 Mac. & Gor. 389. Those were all cases in which the company were really going be- yond their powers ; and one cannot but lament to see great companies like these, with an attorney always at their command, with every means of consult- ing counsel daily if they think proper, and which they resort to sufficiently, and with enormous capital, entering into a contract, with a full knowledge of all *649 § 12. CONTRACTS ENFORCED IF RAILWAY ABANDONED. 29 poser, which the * contract of quietus assumes, is never sus- tained. 1 But such a contract is certainly based upon'a principle their powers, and with legal advice constantly at command, turning round upon the party with whom they have contracted, and endeavoring to evade the con- tract upon the ground that the contract they entered into is beyond their powers and absolutely illegal on the face of it. One cannot but regret that these companies should resort to so unseemly a defence in courts of justice. I do trust we shall not hear of many more of these cases, but that these companies will take care that in entering into contracts with individuals who are not so well protected, they do. not go beyond their powers, and one cannot but feel that they do not enter into a contract of this sort, if it be illegal, without being per- fectly aware of its illegality. Nothing can be more indecent than for a great company to come into a court of justice, and to say that a contract — a solemn contract which they have entered into — is void on the ground of its not being within their powers, not from any subsequent accident, not from any mistake or misapprehension, but because they thought fit to enter into it and meant to have the benefit of it, if it turned out for their benefit, and to take advantage of the illegality in case the contract should prove onerous and they should desire to get rid of it. Such highly dishonorable conduct I trust we shall not often see in courts of justice. " Now, these cases last referred to it is not proper for me to find fault with. They are cases in which it appears that the company did enter into engage- ments clearly beyond their powers, and the parties contracting with them must be supposed to have known that. It has been decided that they cannot be en- forced, and I have nothing to say against those decisions ; but this case does not fall within those decisions. There is nothing that has been stated to me of any sort or kind excepting this : That a Mr. Duncan, in part of his evidence, refers to the intention of the parties to form a junction with the Ambergate line, and in that way going right through the plaintiff's property, they being unable other- wise to get at the point which they proposed to get at by the curvilinear diverg- ing line, which parliament rejected. Then they say, it is a fraud on the act of parliament. There is no such thing in the contract, — no such thing in the answer. . This court has not permitted any evidence to be given on a point of defence that was not raised in the answer ; because if it had been raised, Mr. Hawkes could have shown there was no foundation for it. I believe there is no foundation. I believe that the company had in view that they might, by this short cut through Mr. Hawkes's property, get to a certain point ; but Mr. Hawkes had nothing to do with that. The act provided for taking this property for the very purpose authorized by the act of parliament itself. The cases, therefore, do not touch this question at all, and, consequently, I am not embar- rassed by their authority. " Then it is said, there is no mutuality; and, therefore, that the company could not enforce it, because they have no means of carrying the railway on ; and that 1 Bland v. Crowley, 6 Railw. C. 75G ; 6 Exch. 522. *650 30 PRELIMINARY ASSOCIATIONS. § 12. 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 ex- pire. 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 suffi- ciently 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 con- tract 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 noth- ing 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 Com- pany, 21 Law J. Rep. (x. 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 agree- ment there, that the company, before they entered on the land which they mi flit require, should pay, and it was considered there was no absolute agree- ment to pay. No doubt, the Lord Chief Justice said, if there had boon 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 *G51 §12. CONTRACTS ENFORCED IF 'RAILWAY ABANDONED. 31 construction, that it shall be the * purchase of a pecuniary inter- est, or indemnification for a pecuniary loss, which are legitimate evidently considered it within the other cases, where they had held that the com- pany 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 Val- ley 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 enter- tained 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 Cranicorth, 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 com- pany 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 legis- lature could not construct, with funds of the existing company, yet nothino- 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 en- force 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 ques- tion 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 *652 32 PRELIMINARY ASSOCIATIONS. § 12. 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 parlia- ment is to be asked to legalize it. Where a contract for the purchase of land is made by the projectors of a pro- posed line of railway, though an action at law may be maintained upon the con- tract, 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 Colmanu. 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 com- pany 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 in- creasing 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 *653 § 12. CONTRACTS BY PROMOTERS FOR LAND. 33 are certainly not regarded ordinarily as the just basis of con- tracts. 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 after- wards, 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 ques- tion 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 di- verted 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 de- fendants' company, gives no authority respecting the bills in parliament pro- moted 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 Cham- ber, 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, incorpo- rated by act of parliament for a special pm-pose, cannot devote any part of its funds to objects unauthorized by the terms of its incorporation, however desir- able such an application may appear to be. " 1 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- 2 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; Ilawkes v. Eastern Counties Railway Co., 7 Railw. Cases, 219; s. c. 4 Eng. L. &Eq. 91. 3 34 PRELIMINARY ASSOCIATIONS. § 12. 2. * But in many cases these provisional contracts have been enforced, notwithstanding the projected works have been aban- sions have rested. The making of the Wisbeach & Spalding Branch was not treated by the legislature as anew 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 addi- tion 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 consid- ered as part of the general capital. From the time, therefore, when the Wis- beach & 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 con- tract 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 de- sired 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 plaintiffs land, but they failed in their ob- ject 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 plaintiffs land. A .-mall 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 con- tract 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 argument appeared to me satisfactory. The contract was not necessarily, and 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 *654 § 12. CONTRACTS BY PROMOTERS FOR LAND. 35 doned. 3 * But where the contract is a mere arrangement to purchase land at a specified price, for the purpose of building legitimate objects of the company, and in such a case it cannot be permitted to the directors to allege that the contract ivas invalid as being beyond (heir powers ; for as argued at the bar, it could be no answer to an action for iron rails bargained and sold, that the contract had been entered into, not in order to obtain rails for the use of the line, but in order to keep them in hand for the purpose of a future use, on a speculation that iron was likely to rise in value. I consider, therefore, that this second objection is as untenable as the first." In regard to the second point adverted to in the notes of this case, Lord ( 'ampbell made some comments, which seem to us of very considerable weight as applicable to the general subject involved : " During the argument there was much discussion on the question how far such a company is bound by contracts entered into by the promoters of the act of parliament by which the com- pany is constituted. That question really does not properly arise here ; but I think it right to guard myself against the peril of being, supposed to acquiesce in the doctrine contended for by the respondent's counsel, that there is complete identity between the promoters of the act and the company, and that as soon as the act has received the royal assent, a bill in equity might be filed against the company for specific performance of any contracts respecting land into which the promoters had entered. If the company should adopt the con- tract and have the full benefit of it, I think the company would be bound by it in equity, and therefore I approve of the decision in Edwards v. Grand Junc- tion Canal Company, 1 Myl. & Cr. 650; 1 Railw. C. 173 ; although the language of Lord Cottenham in that case may require qualification and must be taken with reference to the facts with which he was dealing. But it seems to me that the extension contended for of the principle on which that case, and several similar cases which have followed it, rest, is quite unreasonable, and would lead to very mischievous consequences. " Here then is a contract admitted to be under the common seal of the com- pany. The appellants make an idle allegation that the seal Avas affixed without the sanction of a majority of the members of the company, but no fraud is im- puted to Mr. Hawkes. The directors have repeatedly recognized the validity of the contract, and in an action at law upon it, under a plea of non est fac- tum, they could have had no defence, though, if they could allege and prove that Mr. Hawkes was guilty of illegality in entering into it, the action would be barred. " But dismissing the charge that he was bargaining for the application of the funds of the company to a line to be made without the authority of parliament, 3 Shrewsbury & Birmingham Railway Co. v. London & Northwestern Rail- way Co., 20 L. J. Ch. 90; s. c. 14 Jur. 921 : 1 Eng. L. & Eq. 122; Hawkes I?. Eastern Counties Railway Co., 20 L. J. 243 ; s. c. 4 Eng. L. & Eq. 91 ; Preston v. Liverpool, Manchester, & Newcastle-upon-Tyne Junction Railway Co., 1 Simons (n. s.) 586 ; 7 Railway C. 1 ; 7 Eng. L. & Eq. R. 124. *655 36 PRELIMINARY ASSOCIATIONS. § 12. the railway, and the * quieting of opposition does not enter into the consideration, the company are not bound to pay over the the contract is merely the ordinary contract between a company meaning to apply to parliament for authority to extend a line of railway, and the owners of the land through which the extended line is meant to pass, to be carried into effect if the solicited act of parliament be obtained. The shareholders of the company might if they pleased object to their funds being applied to defraying the expense of soliciting the bill, but if they remain quiet it may fairly be in- ferred that they all approve of the extension ; and when the bill to authorize the extension has received the royal assent, no shareholder can any longer complain. According to the manner in which such bills are usually framed, the extended line becomes part of the concern to be managed by the company for the profit of the body of shareholders, power being given to the company to increase the capital, or by some means to provide the money necessary to complete the ex- tended line. Since the case of Simpson v. Lord Howden, 9 CI. & Fin. 61, it is impossible to contend that an agreement by a land-owner to withdraw opposition to a bill for a railway intended to pass through his property is not a good and valuable consideration. I adhere to the doctrine laid down in a passage quoted from my judgment in the case of the Mayor of Norwich v. The Norfolk Railway Company, 4 Ell. & Bl. 397; s. C. 30 Eng. L. & Eq. 120; but that referred to doing something which was positively criminal and indictable, the obstruction of a navigable river by building a bridge across it. This cannot lawfully be done in the hope that an act of parliament may be obtained to legalize it. But where no offence is to be committed against the public, and there is a mere want of authority for a transaction among private individuals or commercial com- panies, which authority can only be obtained by act of parliament, no objection whatever can be successfully made to the parties entering into an agreement for completing the transaction when the necessary authority is so obtained." In regard to decreeing specific performance of contracts of this character, the Lord Chancellor makes some pertinent remarks : " The third point made in sup- port of this appeal was, that even taking the contract to have been a good and valid contract, into which the company might lawfully enter, still, the case was one in which a court of equity ought not to interfere, but ought to leave the plaintiff to assert his legal rights by action. It was argued that the court has frequently acted on this principle in suits where a vendor has been seeking, as in this case, to enforce against a railway company the specific performance of a contract for the purchase of land, when the time within which the line was to be made had expired. And reference was in particular made to two cases decided by Lord Justice Knight Bruce and myself, when I held the office of Lord Justice. I allude to the cases of Webb v. The Direct London and Ports- mouth Railway Company, 1 De G. Mac. & G. 521 ; s. c. 9 Eng. L. & Eq. 249, and Stuart v. The London & Northwestern Railway Company, 1 De G. Mac. & G. 721 ; s. c. 11 Eng. L. & Eq. 112. " In the former of these cases (the particulars of which his lordship fully stated) the court proceeded on two grounds. In the fii-st place, the terms in *656 § 12. CONTRACTS BY PROMOTERS FOR LAND. 37 money, unless they enter * upon some portion of the land, and under such circumstances an absolute covenant to pay the money, by the company, would be ultra vires and void. 4 which the deed was framed were such as to lead the court strongly to the con- clusion that the whole contract was meant to be conditional on the line being formed, and that if it should be (as in fact it was) abandoned by its projectors, then all the provisions of the agreement were to fall to the ground ; a construc- tion, I may observe, which receives great support from the subsequent case of Gage v. The Newmarket Railway Company, 18 Q. B. 457; s. c. 14 Eng. L. & Eq. 57. But independently of that difficulty the case appeared to be one in which a court of equity ought not to interfere in favor of the plaintiff, for that, by any such interference, we should be doing injustice in the attempt to add to the legal remedy. The injury which the plaintiff sustained by the non- performance of the contract was this : though he was left with the whole of his land untouched, he lost all claim to the £4,500, and might, perhaps, have sus- tained damage consequent on his having been for five years liable to have any portion of it, not exceeding eight acres, taken by the company for the purpose of the railway. That ious evidently a case for compensation by action for damages and not for relief by way of specif c performance. Indeed, I hardly know how a decree for specific performance could have been there enforced, for no particular eight acres had been contracted for, and the company had no power to select eight acres, except for the purpose of making the railway, the power to make which had long since ceased. On these grounds the court refused to interfere, leaving the plaintiff to the legal remedy on his covenant. " I have thought it necessary to explain the grounds on which the decision in these two cases rested, for the purpose of showing that they are not at variance with the decision now under appeal. Here there is no uncertainty as to the subject-matter of the purchase. The vendor did not sleep on his rights, and wait until it was impossible for the purchaser to make the line. On the con- trary, from the very day on which the contract was to be completed, he insisted on its performance, having shortly before that time quitted possession of the property, and within less than five months afterwards he filed his bill. It is true that the directors, after the filing of the bill, allowed the time to pass within which they were bound to complete the line. But the plaintiff is not to blame for that. He did not, either actively or passively, mislead the defendants, and it would be impossible to hold that he is not entitled to the relief he asks, without going to the length of saying that no vendor of an estate, contracting to sell to a railway company, can ever have a decree for a specific performance if the com- pany should see fit afterwards to abandon the undertaking, with a view to which the contract was made." 4 Gage v. The Newmarket Railway, 14 Eng. L. & Eq. 57. In this case, the views of Lord Campbell, in delivering the opinion of the court, do not seem to be altogether reconcilable with those expressed by the Lord Chancellor, in Hawkes v. The Eastern Counties Railway, but as they seem to us more consist- ent with the views maintained in this country, upon analogous subjects, and those * 657 138 PRELIMINARY ASSOCIATIONS. § 12. In an important case 5 before the House of Lords, the doctrine of the former cases is assumed to have established the proposition, which we anticipate may probably find more favor in the English courts when the outward pressure of circumstances shall, by lapse of time, be removed, we here adopt them. Lord Campbell, Ch. J. : " We are of opinion, that the defend- ants are entitled to our judgment. Taking the deed as set out on oyer, we think thai there is no breach well assigned upon it. The covenant there (without say- ing anything as the declaration does about ' reasonable time ' ) is merely in these words : ' That in the event of the bill hereinbefore mentioned being passed in the present session of parliament, the said company shall, before they shall enter upon any part of the lands of the said Sir Thomas Rokewood Gage, in the said county of Suffolk, pay to the said Sir T. R. Gage, his heirs and assigns, the sum of £4,900 purchase-money, for any portion of his lands not exceeding forty- three acres, which the said company may, under the powers of their act, require and take for the purposes of their undertaking ; that in addition to purchase- money as aforesaid, the said company shall pay to the said Sir T. R Gage, his heirs and assigns, before they shall enter upon any part of the said land, the sum of £7,100 as a landlord's compensation for the damage arising to his estate by the severance thereof, in respect of the lands, not exceeding forty-three acres, to be taken by them.' The question we have to determine is whether the company, never having entered upon any part of the plaintiff's lands, he is now entitled to sue for these two sums, or either of them? The £4,900 is declared to be the purchase-money for the land to be required and taken ; and the only time of payment mentioned is before the company enter on the land. Therefore, if no land is required or taken, and the company never enter on any part of the land, there seems great difficulty in saying that there has been a breach of covenant in not paying the money. So the £7,100 is declared to be a compensation for the severance of the land taken from the rest of the plaintiff's land, and the same time of payment is defined. But there has been no severance to be compen- sated, and the time for payment has not arrived. The deed does not bargain for a sum of money to be paid absolutely by the company to the plaintiff, as a con- sideration for his withdrawing his opposition to the bill, but provides a peculiar mode of estimating the value of the land to be taken, and of the compensation to be made for severance-damage, instead of the modes pointed out by the general acts upon this subject. We therefore do not think that the company can be considered as having absolutely covenanted to pay £12,000 to the plaintiff, in a reasonable time after the passing of the act. If this deed could bear such a con- struction, we should have thought it so far tdtra vires and void. Here the rail- way company are the covenanters ; and if the present action lies, the capital paid up by the shareholders must be answerable for the damages to be recovered. We consider that this would be a misappropriation of the funds of the company, which the directors could not lawfully make. All the cases relied upon by the 5 The Scottish Northeastern Railway v. Stewart, 5 Jur. N. S. 607 ; 3 Macq. H. Lds. Cas. 382. §13. SPECIFIC PERFORMANCE IN COURTS OF EQUITY. 39 that the acts of parliament to railway companies, empowering them to build railways, are enabling and not obligatory in their nature. And it was here considered that, upon a contract whereby the company, before obtaining their act, executed a de- benture bond in the sum of <£ 14,500 to one of the land-owners, as the sum to be paid him before breaking ground, taking a counter obligation to repay the sum if the bill should not pass ; and, having obtained their act, but never exercised its powers or built their road, it must be held that, upon the fair construction of the whole transaction with reference to the more recent view taken by the courts of the law applicable to such contracts, that the money stipulated was not due the land-owner except upon the company breaking ground for the purpose of constructing their works. ♦SECTION XII, Practice of Courts of Equity in decreeing Specific Performance. 1. Mutual arrangements protected in Chan- cery. 2. But decisions are conflicting. In cases of doubtful right plaintiff is remitted to common-late remedies. . 2. Statement of cases. § 13. 1. The English courts of chancery have, in many in- stances, enforced specific performance of contracts, between dif- ferent lines * of railways, fixing mutual arrangements, in refer- plaintiff 's counsel are clearly distinguished from the present, except Webb v. The London & Portsmouth Railway Company, before Vice-Chancellor Turner. Notwithstanding our high respect for that learned judge, we cannot concur in the reasons for his decision ; and although it has not been expressly overturned, its authority was greatly shaken when it came before the Lords Justices of Appeal. We do not feel it necessary to give any opinion upon the case of Bland v. Crow- ley, in which the learned judges of the Court of Exchequer were divided, as the deed there discussed varies materially from the present. Nor would it be proper to give any opinion upon Stuart v. The London & Northwestern Railway Com- pany, as we learn that when it came before the Lords Justices of Appeal, it was sent by them to be decided in a court of law. We are happy to think that the question in this case being on the record, it may be brought before a court of error." See § 16, and notes. The same principle was further enforced and illustrated, in a recent case, in the House of Lords. Edinburgh, Perth, & Dun- dee Railway v. Philip, 28 Law Times, 345, 39 Eng. L. & Eq. 41. *658, 659 40 PRELIMINARY ASSOCIATIONS. § 13. ence to their future operations, even where acts of parliament were necessary to carry such contracts into full effect, and some- times after a change of circumstances, materially affecting the interest of the parties concerned. And those courts have often enforced an injunction, in cases of this kind, where interests of great magnitude were concerned, even where the right of the plaintiff was questionable, upon the ground that things were required to be kept in a safe train, until the rights of the respec- tive parties could be definitely determined. 1 2. But the practice of the English courts of equity, in regard to this subject, resting chiefly in discretion, as might be expected, is very uncertain, and the cases not easily reconcilable. In many cases, where the right of the plaintiff is doubtful, the injunction to stay the progress of the road till the contract was performed has been denied, and the party remitted to pursue his rights in a court of law. 2 The latter course would seem to be most consist- 1 Great Western Railway Co. v. The Birmingham & Oxford Junction Rail- way Co. and others, 2 Phillips, Ch. Cases, 597. The remarks of Coltenham, Lord Chancellor, in this last case, are very pointed, in defence of the practice, in the English courts of equity, of enforcing contracts, made by the projectors of railways, against the company itself, after it comes into operation. 2 Webb v. Direct London & Portsmouth Railway Co., 9 Eng. L. & Eq. 249. When the same case was before the Vice-Chancellor, Turner, he seemed to re- gard the plaintiff as entitled to specific performance, but the Lords Justices, upon appeal, entertained no doubt that the party should be remitted to his rights in a court of law. See Preston v. Liverpool, Manchester, & Newcastle Junction Railway Co., 1' Simons (n. s.) 586 ; s. c. 7 Eng. L. & Eq. 124. The Court of Appeal, in a similar case, Lord J. Stuart v. London and Northwestern Railway Co., 7 Railw. C. 44; 11 Eng. L. & Eq. 112, put their refusal to decree specific performance, upon the grounds, that the party, if he had any right, could obtain complete redress at law, and that, after the abandonment of the project, or material departures from it, it would be impossible for the railway to hold the land to any beneficial purpose, after paying the money, and that therefore the principle of mutuality wholly failed. The Lord Chancellor, St. Leonards, seemed also to be of opinion, that the only ground upon which the decision, in Webb v. London and Portsmouth Railway Company, 9 Eng. L. & Eq. 249, could be vindicated, was the want of mutuality. But it would seem, that this whole class of cases, where contracts have been made to take land, either at a given price per acre or for a gross sum, or to pay a sum of money for the damage to an estate in gross, by reason of a railway coming in a certain line, either across or near the premises of the obligee, should be regarded as con- ditional, unless the contrary appeared, in express terms, or by the strongest § 13. SPECIFIC PERFORMANCE IN COURTS OF EQUITY. 41 ent with * the ordinary proceedings of courts of equity, in appli- cations for specific performance. implication. Any other view of these parliamentary contracts, as they are de- nominated, gives them very much the air of wagering policies or legislative gambling ! See also upon this subject, Potts v. The Thames Haven Dock & Railw. Company, 15 Jur. 1004; s. c. 7 Eng. L. & Eq. 262, where it is held, that in pursuing a claim for specific performance of an agreement of a railway company to purchase land of trustees, that the persons beneficially interested in the land were not necessary parties to the proceeding. A query is suggested, whether a specific performance could be decreed, there having been no valua- tion of the land, and in this case there had been great delay on the part of the company, owing to their pecuniary embarrassment, but after considerable dis- cussion, it was agreed to give the company further time, and the claim was ordered to stand over. It has been held, that where a private company leased land, with a clause of re-entry and were subsequently incorporated, with an express provision in their charter that all contracts made before the act of in- corporation shall be binding upon the corporation, and they have the same rights as if these contracts were entered into with them, that they might maintain ejectment for the land. London Dock Co. v. Knebell, 2 M. & Rob. 66. The case of Strasburg Railway Co. v. Echternacht, 21 Penn. St. 220, was this: — Several persons signed a paper agreeing that if the Strasburg Railway should be incorporated with certain privileges, they would subscribe the number of shares set opposite their names respectively, and the charter was obtained with the privileges in question, but the defendant, who was one of the subscribers above mentioned, refused to take the stock, and it was held, that the promise was without consideration, and therefore not a contract, but a mere naked expression of intention, which equity will not enforce by specific performance, and that if it was a binding agreement it should be enforced at law. Leave has sometimes been given by courts of equity to oppose a bill in parlia- ment, unless certain compromises between the projectors and landholders on the proposed line should be effected. Davis v. Combermere, 3 Railw. C. 506 ; Monypenny v. Monypenny, 4 Railw. C. 226. It is said, in a late English work upon the subject, Hodges on Railways, 16^, that it is well settled, that agreements made with railway companies by land- holders to sell their lands, and to withdraw or withhold opposition to a bill in parliament, are not illegal. See also Capper v. The Earl of Lindsey, 3 House of Lords Cases, 293 ; s. c. 14 Eng. L. & Eq. 9. This case was first argued in the Court of Exchequer, and subsequently in the Exchequer Chamber, on error, and finally in the House of Lords in the year 1851. The case is not found in any of the English treatises on railways, except Hodges, and as it was long discussed at the bar, and thoroughly examined by almost all the judges in the House of Lords, it ought perhaps to be regarded as the final determination of the English courts upon the subject. The question of legality seems to have been taken for granted here. This case was A, a landholder, through whose es- tate a part of the projected railway was to pass, became a party to a deed with *660 42 PRELIMINARY ASSOCIATIONS. § 14. *SECTION XIII. Specific Performance in Courts of Equity. # Object of courts to compel good faith, when a definite contract is made. § 14. But the courts of equity have been mainly influenced by what they esteem the policy of enforcing these parliamentary the projectors of the railway, by which he covenanted to withdraw his opposition to their bill and to oppose a rival bill ; and they covenanted to pay him a certain sum of money in case their bill should pass within six months from the date of the deed. It was then provided that, if the bill of these projectors did not pass within six months from the date of the payment, either party might put an end to the agreement by notice. The deed then contained a covenant on the part of the projectors, by which they agreed, if the two companies should be amal- gamated, to pay a certain sum within three months after such amalgamation. The deed was dated 16th March, 1846. The two companies were amalgamated in June, 1846 ; but no bill ever passed at the instance of these projectors alone. In November, 1846, the projectors gave notice to put an end to the agreement. The action was based upon that clause in the agreement by which the projectors were to pay a sum of money in case of the amalgamation of the companies. The defendants pleaded that their bill had never passed into a law ; that at the end of six months they had given notice to put an end to the agreement, and that they had never taken the plaintiff's land. The Court of Exchequer held the plea to be a good answer to the action. This judgment was reversed in the Exchequer Chamber, and the latter judgment affirmed in the House of Lords. In the House of Lords the question was submitted to all the common-law judges, who gave a unanimous opinion, by Parke, B., in favor of the plaintiff, and this opinion was adopted by the House without dissent. The learned judge said, in conclusion, " The right to payment does not depend upon the fact of making a part of the railway by the amalgamated company on the plaintiff's estate, or taking, or using, or doing any injury to the plaintiff's land ; the right to it depends simply upon the efflux of three months' time after the Amalgamation Act." Although this construction seems at first blush somewhat narrow, and one side of the main purpose of the agreement, it must, we think, be regarded as the only just and legitimate view. The contract did not so much contemplate the taking of any portion of plaintiff's land, or any estimable definite injury to his estate, as the privilege of doing so, if that should become desirable, and the quieting of the defendants' lawful opposition to, or control of, the enterprise, in consequence of his pecuniary interest in the same. It was the purchase, at a fixed price, of the privilege or option to deal with plaintiff's estate, as one favoring the project, and ultimately to place the projected line in such position, with reference to the estate, as they should find most advantageous to themselves. And as they had ' *661 § 14. SPECIFIC PERFORMANCE IN COURTS OF EQUITY. 43 contracts, for the arrangement of conflicting interests, in regard to such projected railways. And they have declined to interfere, by injunction, where no such contract had been definitely made, 1 enjoyed what they bargained for, it was clearly due that they should pay the stipulated price of their purchase. There is a recent case in New Hampshire, Low v. Conn. & Pass. Railroad Co., 45 New II. R. 370, where the question of the right of those who have rendered extensive services in promoting the subscription to the stock of a corporation, to recover compensation of the corporation for time and money so expended, is extensively and ably discussed. It is here said that where, after the charter and before the organization of a corporation, services are rendered which are necessary to complete that organ- ization, and after it has been perfected the corporation elect to take the benefit of such services, knowing that they were rendered with the understanding that compensation would be made, it will be held liable therefor, upon the ground that it must 'take the benefit with the burden. It was here considered that the grantees in a charter are the sole members of the corporation until associates are admitted by them, and they may act as the corporation without admitting any others. Hughes v. Parker, 19 N. H. R. 181. But to effect any binding contract or corporate act, the concurrence of at least a majority of such grantees is requisite ; but that the sole power of deter- mining by what measures and by what agency the organization shall be effected rests with the grantees, a majority of whose votes will govern. This case seems to have gone mainly upon the authority of Hall v. Vt. & Mass. Railroad Co., 28 Vt. R. 401. But we question whether the principle of compensation is not in fact carried in both cases to the utmost verge of good policy. In the case of Low v. The Railway Co., the plaintiff was allowed to recover the value of a horse which he delivered to one of the efficient promoters of the enterprise upon a sort of wager, that if the road ever reached the town of Bradford in Vermont, the place of the plaintiff's residence, this promoter should have his, the plaintiff's, best horse. And, of course, as a gentleman of honor, when the road reached the point indicated, the horse was delivered. It is true that the court sent the case back to have the jury find the fact, that this pro- moter performed efficient service for the company in effecting its organization, and that the company adopted such service by taking the benefits of it, and that the horse was no more than a reasonable compensation for such service. Notwithstanding our own participation in the decision of Hall v. Vt. & Mass. Railroad, we would now feel that the rule there adopted in regard to charging service, rendered in effecting the organization of the company, to the corpora- tion, is one of too great laxity, and too susceptible of abuse to afford a safe guide in these lax times, when every possible avenue to corruption is sure to find some one desperate enough to enter. There should at least be proof that the service was performed under an expectation of compensation, and that the corporation 1 Hargreaves v. Lancaster & Preston J. Railway Company, 1 Railw. Cas. 416. 44 PRELIMINARY ASSOCIATIONS. § 14. notwithstanding such representations on the part of the pro- moters, as misled the agents of the land-owner. Thus showing, very explicitly, that the main ground upon which the English courts of equity have proceeded, in decreeing specific perform- ance, and enforcing it by injunction, has been, to compel good faith on the part of such incorporations, in carrying into effect any contracts on their part. For, it is said by the English courts having obtained advantages, in consequence of the contracts and assurances of the agents employed, in the projects, it would tend to destroy all confidence in any such arrangement, if they were not enforced, which would be * of evil example and tend to great practical inconvenience. But where the parties stand upon their legal rights, as secured in the act of incorporation, a court of equity will not interfere. 2 In a late case these provisional con- tracts seem to be regarded as conditional, depending, ordinarily, for their obligation, as against the corporation, upon their having done anything under their charter which the agreement enabled, them to do, so as thereby to have received the benefits of it. 3 expressly promised payment. And in the Earl of Lindsay v. The Great North- ern Railway Co., 19 Eng. L. & Eq. 87, before V. C. Wood, it is said, " that the agreement is legal in itself, is now settled, by authority." In this case, which was a contract that the trains should stop at a particular station, the court decreed a specific performance, giving the companies time to make the necessary arrange- ments, before making the decree absolute. But one railway company cannot bind itself to defray the expense of an ap- plication to parliament by another company, for the establishment of another line of railway, expected incidentally to benefit the first company. Such con- tract is beyond the ordinary scope of the powers of a railway company, and consequently illegal, and such a covenant cannot be enforced in a court of law, however beneficial to the covenanter the objects of the covenant, if carried out, might be. East Anglian Railway Company v. The Eastern Counties Railway Company, 7 Eng. L. & Eq. 505 ; McGregor v. The Deal & Dover Railway Company, 16 Id. 180; Post, §§56, 187. 2 Aldred v. North Midland Railway Company, 1 Railw. Cas. 404 ; Provost and Fellows of Eton College v. Great Western Railway Company, 1 Railw. Cas. 200. 8 Gooday v. Colchester & Stour Valley Railway Company, 15 Eng. L. & Eq. 596. In this case the Master of the Rolls said : " Since the act was obtained, nothing has been done nor any step taken to construct the railway. There is no distinct evidence indeed that the railway has been abandoned, but no money has been paid, no land taken, nor any movement made towards carrying on the scheme, and the compulsory powers of the act have never ceased. Under these * 662 § 15. EQUITY CONTROLS PROCEEDINGS IN PARLIAMENT. 45 SECTION XIV. Courts of Equity will restrain a Party from Opposition or Peti- tion in Parliament. Such cases not common in practice. § 15. It is held in the English courts of equity altogether com- petent, and within their appropriate jurisdiction, to restrain a party from opposing a bill in parliament, by petition, if a proper case is made out, and by parity of reason from pursuing a peti- tion in favor of an act of parliament. 1 But such cases are not common * in practice, and dependent upon peculiar circum- stances. As where proceedings in parliament are in violation of express covenants, or for some other reason, in bad faith, and where damages, at law, are no adequate compensation. These cases are therefore determined much upon the same grounds as other cases of specific performance, and come properly under consideration in this connection. circumstances, I cannot say that the company has adopted the agreement, or is bound by its terms ; and therefore I do not think I can compel them to admit the contract in an action at law." Very recently, in Williams v. The St. George's Harbor Company, 30 Law Times 84 ; s. c. 2 De G. & J . 547, it was held by the Master of the Rolls, that an agreement entered into by the pro- moters of a company before incorporation, is not binding on the company when incorporated, unless they subsequently do some act amounting to an adoption of it. This seems now to be the settled doctrine in the English courts. Ante, § 3, p. 636. 1 The Stockton & Hartlepool Railway Company v. The Leeds & Thirsk and The Clarence Railway Companies, 5 Railw. Cas. 691. In this case the injunc- tion was granted by the Vice-Chancellor of England, Shadwell, but the order discharged, by the Lord Chancellor, Cottenham, on the ground that no proper case for the interference of a court of equity was made out, but distinctly affirm- ing the jurisdiction. The Lord Chancellor says : " This court, therefore, if it see a proper case, connected with private property or interest, has just the same jurisdiction to restrain a party from petitioning against a bill in parliament as if he were bringing an action at law, or asserting any other right connected with the enjoyment of the property or interest which he claims." Heathcote v. The North Staffordshire Railway Company, 6 Railw. Cas. 358. In this last case it was held by the Lord Chancellor, that a contract to make a railway is not one of which a court of equity will compel the specific performance, but will leave the parties to their legal rights. *663 46 PRELIMINARY ASSOCIATIONS. § 16. SECTION XV. .Contracts to withdraw opposition to Railway Projects, and to keep this secret, against sound policy and would seem to be illegal. 1. Principle of foregoing decisions obscure. I 6. Act of incorporation should not be varied 2. Not adopted in this country unless terms by oral testimony. inserted in charter. 7. Contracts to quiet opposition not favored 3. Recent change of views in English courts. in this country. 3-5. Statement of late case in which prin- n. 5. Recent English and American deci- ciple of Edwards v. Grand Junction Rail- I sions. way is doubted. § 16. 1. The principle of the foregoing decisions, upon the subject of specific performance of contracts with the promoters of railway projects being enforced in courts of equity against the company, is, to say the least of it, somewhat obscure. Re- garded as illegal contracts, it does not seem very apparent how they can, with much show of consistency, be specifically enforced in a court of equity. Ordinarily such contracts are not the sub- ject of an action for their enforcement, in any court. That there may be extreme cases, where one has gained an unconscion- able advantage by enticing a less-experienced person into parti- cipation in an illegal transaction, that a court of equity will compel the successful party to relinquish the fruits of the fraud, may be true. But the general proposition laid down, by Lord Eldon, upon this subject in the Vauxhall Bridge case, 1 does not seem to gain much support from the case cited by him. 2 2. It seems to us impossible to justify such contracts, beyond the * mere sale of a definite pecuniary interest. And even that, 1 Ante, § 7, Jacob, 64. " Neville v. Wilkinson, 1 Brown, C. C 543. The principle of this case, if we comprehend it, is a familiar one. It is that one who has represented to a creditor of his debtor, or to the father of the intended wife of his debtor, that his debt did not exceed a specified sum, shall not be allowed to enforce against such debtor any larger sum, the marriage having taken place in confidence of such representation. This representation was made, indeed by connivance, between the husband and his creditor, to deceive his wife's father. But so far as the creditor is concerned, the decision seems to rest upon the familiar principle of an estoppel in pais. Shirley v. Ferrers, cited in St. John v. St. John, 11 Vesey, 536. *664 § 16. CONTRACTS AGAINST SOUND POLICY. 47 it would seem, should be secured by the insertion of definite pro- visions in the charter. We cannot find that any attempt has been made, in this country, to enforce against a corporation a contract made with the promoters to quiet opposition in the legislature. That it is often charged, that such and similar contracts are made by the promoters of railway projects with the friends of rival projects, and other opposers, and with the members of the legislature even, and large sums of money dis- bursed in fulfilment of such contracts, which is expected to be refunded by the company, and which is so refunded sometimes, is undeniable. But we apprehend, there is in this country but one opinion in regard to the legality and decency of such con- tracts, and that those who expect to profit by them have far too much sagacity to trust their redress to the judicial tribunals of the country. But that turnpike and bridge companies, and ex- isting railways, whose profits are to be seriously affected by the establishment of new railways, and land-owners, whose property is to be affected by such railways, may properly stipulate for reasonable indemnity, as the price of withdrawing opposition, there can be, we apprehend, no question. But it seems to us, that the only proper mode of securing this indemnity is, by the insertion of special clauses in the charter of the new company. There can be no question in regard to the duty of courts of equity, in a proper case for their interference, to enforce an in- demnity secured by the act. 3 3. We infer from the late decision of the House of Lords up- on this subject, that the views of the courts, in that country, are already undergoing some change upon this subject. In the case of Caledonian and Dumbartonshire Junction Railway v. Helens- burgh Harbor Trustees, 4 the facts were that the magistrates of Helensburgh agreed with the provisional committee of a pro- jected railway company to allow the company certain privileges of taking land in the town, and laying rails for a side track to the harbor of H., the company to pay all the expenses of enlarg- ing the harbor, and of obtaining an act of parliament for that purpose. The Harbor Act was obtained, and also the Railway 3 Gray v. The Liverpool & Bury Railway, 4 Railw. C. 235 ; Ante, § 181. 4 Before the House of Lords in June, 1856 ; Law Rep. Oct. 1856, 350 ; S. c. 2 Macq. Ii. of L. 391 ; s. c. 39 Eng. L. & Eq. 28. 48 PRELIMINARY ASSOCIATIONS. § 16. Act. In the latter there was no provision authorizing, or refer- ring to, the previous * agreement, and the railway company re- fused to perform their part, and did not claim performance of the other part. 4. On a bill for specific performance, brought by the harbor trustees, held, reversing the decision of the court of session, that specific performance could not be decreed, because the railway company had no power to make a harbor, which would be en- tirely beside the object of their incorporation. 5. It is said by the Lord Chancellor, and by Lord Brougham, " It seems that Edwards v. The Grand Junction Railway, 1 Railw. C. 173, and Lord Petre v. The Eastern Counties Railway, Id. 462, and other similar cases, which have followed them, are un- supported in principle, but these cases are distinguished from the present, by the nature of the contracts sought to be enforced, which were matters within the scope of the respective charters. The custom sometimes adopted by committees in parliament of omitting special clauses from acts of incorporation, on the agree- ment of the promoters that the objects proposed to be attained by these clauses should be carried out, appears to be illegal, and improper." 6. It seems very obvious, that, if these clauses can be foisted into the act of incorporation, by oral testimony, at the will of interested parties, it is exposing the operation of the act to all the inconveniencies and inconsistencies which might be expected to follow from subjecting written contracts to the same mode of exposition. Sound views and true policy seem to us to re- quire a strict adherence to the act of the legislature, as in other cases. 7. And it is very questionable, whether, in this country, the contract to sell a definite pecuniary interest, — as land which is required for the construction of the road, or turnpike and canal property, the value of which is to be seriously affected by the railway going into operation, — at a price agreed, made with the promoters of the railway, but not inserted in the act, and which is not unreasonable, can be enforced against the company. It is certain, we think, that a contract going altogether beyond this, and stipulating large sums, beyond the supposed value of any *665 § 16. CONTRACTS AGAINST SOUND POLICY. 49 pecuniary interest to be secured, and for the obvious purpose of quieting opposition, or securing favor and support, could not be enforced here, even against the contracting parties, and much less against the company, or at all events that it ought not to be. 5 6 And in the more recent cases upon this subject very little countenance is given to the doctrine of the earlier English cases, which held the contracts of the * promoters of railways binding upon the company, upon the slightest grounds of adoption, and often by the most forced constructions. In the case of Preston v. Liverpool, Manchester & N. Railway, 35 Eng. L. & Eq. 92, although the case is professedly decided upon the construction of the particular contract, yet it is not difficult to perceive, in the very sensible reasons assigned for the construc- tion adopted, a manifest disposition to abandon the former ground assumed by the courts upon this subject. The point is thus stated in the note to this latter case : " II. & Y. projectors of a railway company entered into a treaty with the plaintiff (a land-owner), whereby the latter agreed not to oppose their bill in parliament, and an agreement was executed by them, as the executive directors of the railway company, by which the company, upon its incorporation, was to pay to the plaintiff £1,000 for land of which he was the freeholder, and which was required for the purpose of making the railway, and £4,000 for residential damage." There were other stipulations in regard to tunnelling a portion of plaintiff's property, and erecting a station upon another portion. The company was incorporated, but not being able to raise sufficient funds, no attempt was made to construct the railway, and the money subscribed was returned to the shareholders. " Held that the contract was conditional, upon the making of the railway, and therefore that, the plaintiff was not entitled to moneys payable thereunder. And qurere, whether a company can be considered as the suc- cessors or assignees of the projectors, so as to come into existence subject to their contracts." See Ed. P. & Dundee Railw. v. Philip, in Ho. L. 28 Law T. 345. S. C. 39 Eng. L. & Eq. 41. There are numerous English cases upon this point since the date of the second edition of this work. In Aldham v. Brown, 2 El. & El. 398, in Exchequer Chamber, the extent of the responsibility of a subscriber to the preliminary as- sociation is extensively discussed upon an extended and somewhat refined state of pleadings. The result may be briefly stated as amounting to nothing more than that such subscriber is responsible for his ratable proportion of the provi- sional expenses, whether the scheme is finally abandoned or not. Where a deposit of eight per cent upon the estimated cost of a railway is paid into court, in compliance with the parliamentary orders upon filing petitions for certain railways, the proportion of such deposit will be paid out of court to the party duly representing the petitioners, upon any of the railway projects being abandoned. Aberystwith Eailw. in re 7 Jur. N. S. 510. But upon the question being brought to the attention of the Lords Justices, id. 564, it was doubted whether the statute allowed the money to be repaid merely upon the withdrawal VOL. I. 4 * 666 50 PRELIMINARY ASSOCIATIONS. § 16. of the petition, and no order was made. But upon principle it -would seem there could be no difference between the cases named specifically in the stat- ute for repayment of the money, that of -withdrawal of the petition, and such as denial of the petition or refusal to allow the party to proceed. See Dart- mouth & Torbay Railw. Co., in re 9 Weekly Rep. 609 V. C. K. It is no ob- jection that the requisite parliamentary deposit is made from borrowed funds. Scott v. Oakely, 10 Jur. N. S. 431, 648. And a court of equity will enforce any agreement made with the lender to compel the repayment of such deposit, ib. But an agreement by an existing railway to contribute towards the deposit required to promote the grant of other lines, is held ultra vires. So also is an agreement by an existing railway to take shares in the projected company, or to establish traffic regulations with reference to future extensions. But such an agreement will not be ultra vires where its validity is expressly made dependent upon the sanction of parliament. Maunsell v. M. Great Western (Ireland) Railw. Co., 1 H. & M. 130 ; s. c. 9 Jur. N. S. 660. See Scottish N. E. Railw. v. Stewart, 3 Macq. H. L. Cas. 382. But where the company stipulate to do acts ultra vires, there is no implication that this stipulation shall be held conditional upon the company having or being able to obtain legislative authority to do them. And if the acts so stipulated to be done are component parts of an entire agreement embracing other matters within the powers of the company, an injunction will be granted against carry- ing any portion of the agreement into effect. Hattersley v. Shelburne (Earl), 7 Law T. N. S. 650. Where six different lines of railway, forming one general scheme, were pro- moted by the same persons, but subsequently four of them abandoned, and an act obtained authorizing the construction of the other two, by which it was pro- vided that the expenses, costs, and charges of obtaining and passing the act, and incidental and preparatory thereto, should be paid -fey the incorporated com- pany ; it was held the costs and expenses connected with the abandoned lines were properly chargeable on the company. Tilleard, in re 9 Jur. N. S. 1217. $ 17. ORIGIN AND DIFFERENT CLASSES OF CORPORATIONS. 51 * CHAPTER III. RAILWAYS AS CORPORATIONS. •SECTION I. Origin and Different Classes of Corporations. The. existence of corporations dates very early. The different kinds of corporations. Sole and aggregate. This work treats chiefly of aggregate joint-stock corporations. Corporations are either ecclesiastical or lay. 6. Corporations are public or private. 7. Private corporations, where stock is pri- vate property. 8. Public corporations, where stock is owned and the management retained by the state. 9. It does not affect the private character of a corporation that the state or the 5. So they are divided into eleemosynary and J United States own a portion of the civil corix>rations. stock. § 17. 1. The idea of corporate action, i. e. by means of mere legal entities, or creations of the law, seems to have existed from a very early day in the history of civilization. They seem to have been allowed by the laws of Solon, and by those of the Twelve Tables ; and may very probably have existed at a still earlier period. 1 2. There have existed various kinds of corporations, distin- guished sometimes by the form of the association or the nature of the organization, and sometimes by the character of the work to which the corporate body was devoted. Thus corporations, in the English law, are either sole or aggregate. By the former is understood corporations existing in a single individual, as the rector of a church, or the judge of a particular court, as the judge of probate in whose name securities are taken and to be prose- cuted, or any other official name, as the treasurer of a town, county, &c, in all which cases the single individual, maintain- 1 1 Kent, Comm. 524, 8th Table, allowed societies or private companies to make their own by-laws, not being inconsistent with the public law. See also 2 Kent, Comm. 268, note ; Dig. Rom. Civ. Law, 47, 22, 4. *4, 5 52 RAILWAYS AS CORPORATIONS. ' § 17 ing for the time the particular official relation, constitutes the quasi corporation. Aggregate corporations are when the body consists of more than one member, whether such members are shareholders, as in the case of a mere business corporation, or are composed of different subdivisions of the entire corporation ; as the mayor, aldermen, and common council of a city or other municipality. 2 3. The corporations with which we are chiefly concerned, and which will be mainly considered in the following work, are ag- gregate business corporations, with a joint-stock capital, such as banks, railways, manufacturing and other similar organizations. 4. But, as almost all kinds of corporations have in some sense analogous powers and functions, it will not be practicable to dis- cuss the law applicable to one class without at the same time to some extent considering the law applicable to all other classes of corporations. It may be proper therefore to mention here, that aggregate corporations may be ecclesiastical or lay, i. e. their functions may have reference exclusively to religious mat- ters, as a parish or church, whereby they are appropriately desig- nated, as ecclesiastical or religious bodies ; or they may have reference only to secular matters, whereby they are more appro- priately denominated lay corporations. The distinction is how- ever sometimes not easily determined, since the business and func- tions of a corporation may approach so nearly the one or the other as not inappropriately to be classed among either. Thus " Co. Litt. 8 b, 250 a ; 2 Kent, Cormn. 273, 274. We have taken no time to discuss the nature or importance of sole corporations, since very few exist in the American states, and where any such do exist, it is so enacted by express statute, in order to secure perpetual succession and transmission of rights and duties, without encumbering the succession and transmission with those formalities, which would always prove laborious and sometimes difficult ; and by reason thereof, there would constantly arise embarrassing questions, which, by declaring the office a perpetual corporation, is wisely saved. In many of the cases already alluded to, and others which might be named, as to those individuals who sustain the official character of sole corporations, it is not deemed important that the statute conferring such functions should de- clare them corporations, or to possess corporate rights and duties. All that is required is, that it should be provided that contracts made to them may be sued in the name of their official successors, or that in any other form .such individ- ual should be declared by his official name to have the power to contract for the benefit of himself and his successors perpetually. § 17- ORIGIN AND DIFFERENT CLASSES OF CORPORATIONS. 53 the English Universities of Oxford and Cambridge are now re- garded as merely lay or civil corporations, although at one time they were, with propriety, classed among ecclesiastical corpora- tions. 3 5. Corporations, too, are divided into eleemosynary, or such as disburse only charity and subsist for that purpose only, — such as schools, colleges, and hospitals, — and those which are mere civil or political bodies intrusted with certain rights or duties, and required to perform certain functions, more or less connected with the polity of the state or nation, — such as towns, counties, school districts, or railways, banks, and manufacturing, or merely business corporations. G. Corporations are either public or private. Public corpora- tions embrace all the municipal subdivisions of the state ; such as counties, towns and cities, and school districts, and other similar organizations. Private corporations include all aggre- gate, joint-stock, incorporated companies, whoso capital stock is owned by private persons. But such joint-stock corporations as possess no shares not owned by the state or nation are also re- garded as public corporations, the same as the municipalities of the state. The law in regard to railways was thus stated in the former edition of this work. 7. Railways in this country, although common carriers of freight and passengers, and in some sense regarded as public works, are ordinarily private corporations.' 1 By private corpora- tions nothing more is implied, than that the stock is owned by private persons. 8. If the stock is owned exclusively by the state, the corpo- ration is a public one. And such public corporations are under the control of the legislature, the same as municipal corporations, and ordinarily acquire no such vested rights of property as are 3 Angell & Ames, § 40 ; 1 Bl. Comm. 471. 4 There is no necessity for these public functions being confined to aggregate corporations, as is the universal practice in this country. The same franchises and immunities might be conferred upon any private person, at the election of the legislature, as was done by the legislature of New York upon Fulton and Livingston, in regard to steamboat navigation, which grant was held valid but for the United States Constitution. And whoever was the grantee, the same rights, duties, and liabilities would result from the grant, whether to a natural person or to a corporation. Ante, § 1, pi. 6. 54 RAILWAYS AS CORPORATIONS. § 17, beyond the control of legislative authority. 6 The American cases going to confirm this proposition, and to show that railways are private corporations, are numerous. 7 9 Dartmouth College v. Woodward, 4 Wlieaton, 518, 668 ; 2 Kent, Comm. 7th ed. (275) 305 and notes. If the question were entirely new, it might be re- garded as admitting of some doubt, perhaps, how far the American states could with propriety undertake such extensive public works, whose benefit enures almost exclusively to private emolument and advantage. But the practice is now pretty firmly established. And there seems to be no proper tribunal to determine such questions between the states and the citizens. Public opinion is the only practical arbiter in such cases. And that is so much under the con- trol of interested parties, ordinarily, that its admonitions are not likely to be much dreaded by those who exercise the state patronage. 7 Donnaher v. State of Mississippi, 8 Smedes & M. 649, 661. By the court, in Trustees of the Presbyt. Society of Waterloo v. Auburn & Rochester Railw., 3 Hill, 570 ; Dartmouth Coll. v. Woodward, 1 New II. R. Ill, 116 ; Eustis v. Parker, 1 New H. R. 273 ; Dearborn v. Boston, C. & Montreal Railw. Co., 4 Foster, 179, 190; Ohio, &c. Railroad Co. v. Ridge, 5 Blackf. 78; Bonaparte v. Camden & Amboy R.,,1 Baldwin's C. C. 205, 222 ; Bundle v. Delaware & Raritan Canal Co., 1 Wallace, Jr. 275 ; R. & G. R. v. Davis, 2 Dev. & Batt. 451 ; Thorpe v. R. & B. R. 27 Vt. R. 140. This last case discusses at some length the right of legislative control over private corporations, whose functions are essentially public, like those of banks and railways. The importance of such control, within reasonable limits and under proper restrictions, both to the public interest and that of these corporations, will be obvious when we consider the magnitude of the interests committed to such corporations, and the vast amount of capital invested in such enterprises. We make no account of the banking capital of the country, most of which is occupied in business more or less connected with railway traffic. But the capital and business of rail- ways is almost incalculable. The length of railway in the United Kingdom of Great Britain and Ireland in 1857, was 8,635 miles, and the cost, in round numbers, £311,000,000 sterling, being more than one and one half billion of dollars. The amount invested in this country was about half as much in 1851, and the number of miles in opera- tion nearly twice as great, and almost as much more then in progress, a large por- tion of which is now complete (1857). When it is considered that these private corporations, possessing such vast capital, have engrossed almost the entire travel and traffic of the country, and that their powers and functions come in daily con- tact with the material interests of almost every citizen of this great empire, the importance of their being subjected to a wise and just supervision can scarcely be overestimated. This can only be permanently secured by wise and prudent legislation. And to be of much security to public interests, it must be by general acts, as it is in many of the states, and in England, since 1845. It is worthy of remark, we think, that while in the United states a large proportion of the cap- ital invested in railways has proved hitherto wholly unproductive, and much of it has already proved a hopeless loss, and a very small proportion of the whole § 17. ORIGIN AND DIFFERENT CLASSES OF CORPORATIONS. 55 * 9. It does not alter the character of a private corporation, that the state or the United States own a portion of the stock. 8 can be said to have been at all remunerative, in Great Britain the whole amount of their loan and preference stock, secured virtually by way of mortgage, has produced, upon an average, more than five per cent, and the ordinary stock has produced an average dividend of more than three per cent ; and in France rail- ways have proved still more productive, making average dividends throughout the empire, for the year 1857, of nine per cent upon the whole investment, some as high as sixteen per cent, and one, the Lyons and Marseilles line, twenty-three per cent. It is difficult to account for the difference in results, without suspect- ing something wrong somewhere. Since the former edition of this work, con- siderable advance has been made in railway enterprise throughout the world. Railways have become so nearly a military necessity, in order to enable any nation of considerable power and prominence in relative national position to maintain its due weight and importance, that very extensive, and in some in- stances vast works of that kind have been accomplished, mainly upon that ground. The experience of the national government during the late civil war has removed all question of the right of that government to charter and construct, or aid in the construction of extensive and independent lines throughout the country for military and mail purposes alone. It is stated that the present length of railway line in the United States is about 32,000 miles, at an average cost of $ 40,000 per mile, equal to $ 1,280,000,000 in all, and there is every reason to believe the Atlantic and Pacific coasts will speedily be united by railway. The advance in Great Britain and Ireland has been very great since the first edition of this work, but probably not in the same proportion as here. The number of miles of railway now in operation in France is about 8,000, at a cost of nearly $ 1,300,000,000, and producing, according to the late returns of the Minister of Public Works, a net income or dividend of nearly nine per cent. This is the sanie rate of income produced by the French railways in 1858, as stated above. The average income from railway investment in Great Britain and Ireland is probably not above half that sum ; and in the United States it is perhaps even below that. But our country is so immensely extensive, and easy and rapid intercommunication between all portions of the empire so much a state necessity, that it might naturally be expected that for a long time considerable portions of the line should remain unproductive in a pecuniary point of light. There have been great changes in the policy of railway construction and man- agement since this work first appeared, and mainly in the right direction. Reckless and destructive railway management is now, we trust, becoming the rare exception in this country, although there is still, no doubt, great room for improvement. There is probably no other country in the world where it is so difficult to bring the employees and others connected in various relations with railway management, to understand and appreciate the indispensable importance of bringing everything to the unbending control of a single will. This is not only indispensable for success, but equally for security. 8 Bank of the United States v. The Planters' Bank of Georgia, 9 Wheaton, * 6 56 RAILWAYS AS CORPORATIONS. § 17 a. But a turnpike company or other corporation, managed exclu- sively by state officers, and at the expense and for the benefit of the state at large, is a public corporation. 9 SECTION II. How Corporations are created. 1. Corporations created by grant of the sov- ereignty. This may be proved, by im- plication or by presumption. 2. The sovereignty may establish corporations by general act, or delegation or procura- tion. 3. Different forms of defining a corpora- tion. 4. TJie corporate action of corporations re- stricted to state creating them. 5. It may act by its directors and agents in other states. n. 10. But cannot properly transfer its entire business to another state. 6. A college located at one place cannot es- tablish a branch at another. § 17 a. 1. Strictly speaking, corporations can only be created by the authority of the sovereignty, either state or national. 1 Hence, the ordinary mode of creating joint stock business cor- porations is by charter, by way of legislative act of the several states. But as, in some cases, the record of such charters may not have been preserved, and in other cases, the grant of cor- porate powers may have been by way of implication rather than express legislative act, the courts have allowed corporations to prove their corporate character and capacity, by evidence that such character and capacity is reasonably, or necessarily, im- 904 ; Miners' Bank v. United States, 1 Greene (Iowa), 553 ; Turnpike Co. v. Wallace, 8 Watts, 316. Bardstown & Lou. Railway v. Metcalfe, 4 Met. (Ky.) 199. 9 Sayre v. North W. Turnpike Co., 10 Leigh, 454. But see Toledo Bank v. Bond, 1 Ohio State Reports, 622, 657. Opinion of Slorrs, J. in Bradley v. New Y. & New H. R. 21 Conn. R. 294, 304, 305. 1 As the national sovereignty is limited to the subjects and powers enumerated in the Constitution, and such implied powers as are requisite to the successful exercise of those expressly granted ; and as no general power to create corpora- tions is expressly given, the construction of the court of last resort upon these questions, established at an early day, is, that Congress can charter only such corporations as are fairly to be esteemed necessary to the successful accomplish- ment of its delegated powers and functions. McCullough v. Maryland, 4 Wheaton, 316; Ooborne v. Bauk of United States, 9 "Wheaton, 733. § 17«. nOW CORPORATIONS ARE CREATED. 57 plied from other legislative action; 2 or else, that its existence is fairly to be presumed from the long continuance of its unques- tioned exercise. 3 2. The legislature may create corporations by general acts of incorporation, as they are called, whereby a given number of persons, by forming an association in a prescribed form, shall be- come possessed of corporate powers, for certain defined objects and purposes. This is common, in many of the states, as to ec- clesiastical and charitable, or benevolent associations, and not unfrequcntly as to banking, railway, and other business corpora- tions. And although at one time questioned, it seems now conceded, that the sovereign authority may grant to any one the power to erect corporations to an indefinite extent, upon the maxim: Qui facit per alium facit per se . This power is given to the Chancellor of the University of Oxford, 4 and exists in many other forms. 3. A corporation is denned by Lord Holt, Ch. J., 5 as an ens civile, a corpus polilicum, a persona politico,, a collegium, an univcrsitas, a jus habendi et agendi. A corporation is well de- fined, as to the general sense of the term, by Chief Justice Mar- shall f as " an artificial being, invisible, intangible, and existing only in contemplation of law." It is, in fact, the mere creature or creation of the law. Endowed by its charter with the capacity of performing certain functions, and having no rights, and pos- sessing no powers, except those conferred by the sovereignty by which it was created. 4. It is upon this ground, that it has been declared, upon the most unquestionable basis, both of principle and authority, that a " corporation can have no legal existence out of the bounda- ries of the sovereignty by which it is created." 7 " It exists 2 Conservators of the Tone v. Ash, 10 B. & Cr. 349. 3 Dillingham v. Snow, 5 Mass. 547 ; 2 Kent, Conim. 277 ; 1 Bl. Coram. 473. 4 Bl. Coram. 474. 6 Anonymous, 3 Salk. 102. 6 Dart. College v. Woodward, 4 Wheat. 518. The same learned judge, in another place, Providence Bank v. Billings, 4 Pet. U. S. 514, thus comments upon the purposes of acts of incorporation. " The great object of an incorporation is, to bestow the character and properties of individuality on a collective and changing body of men." 7 Taney, Ch. J. in Bank of Augusta v. Earle, 13 Pet. U. S. 519, 588. 58 RAILWAYS AS CORPORATIONS. §17 a. only in contemplation of law, and by force of the law ; and where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty." And the same thing, substantially, is repeated in another case 8 by Mr. Justice Thompson. 5. There seems to be no question but the corporation may act, by its directors, agents, and servants, beyond the limits of the sovereignty by which it was created, 9 but its first meeting, and all its subsequent meetings, in order to bind absent and dissent- ing members, should, it would seem, be held within the limits and jurisdiction of the sovereignty creating the corporation. 10 But in a very recent case in New Jersey, Hilles v. Parrish, 11 the general rule is reaffirmed, that a corporation can hold no meet- 8 Runyan v [Lessee of Coster, 14 Pet. 122, 131. The same doctrine is main- tained in other American cases, Miller i>. Ewer, 27 Me. R. 509 ; Farnum v. Blackstone Canal Co., 1 Sumner, 46 ; Day v. Newark India Rubber Co., 1 Blatchf. C. C. 628. 9 McCall v. Byram Manuf. Co., 6 Conn. R. 428. It was held in this case, that the directors of a manufacturing corporation might legally hold a meeting, out of the state, for the purpose of making the appointment of secretary of the corporation, and the appointment would not be rendered invalid thereby, or by the fact that the person appointed had his permanent residence without the state. 10 Miller v. Ewer, 27 Me. R. 509. The law seems so entirely well settled, that corporations, created by one sovereignty, cannot so transfer their locality as legally to exist and act in their organic corporate capacity in another sover- eignty, that it appears very singular that such multitudes of speculative joint- stock corporations, deriving their charters from the legislature of a state, should attempt to transfer their entire local action to another sovereignty and jurisdic- tion. For there is no principle better settled than that the locality of a business corporation is determined by that of its principal business office. And there are, unquestionably, hundreds of business corporations chartered by the legislature of one state having their principal and only business office in other states. This is done doubtless by holding the stockholders' meetings in the states where the charter was obtained, and appointing a board of directors with full powers, and then carrying forward the business of the company through the agency of the board of directors, with a by-law for filling vacancies in the board by the action of the directors themselves. But that seems scarcely less than an evasion. And although it may be held binding upon the members of the com- pany so long as acquiesced in by thSm, it might at any time be enjoined by proper proceedings in equity. 11 1 McCarter, 380. §176. THE CONSTITUTION OF CORPORATIONS. 59 ing and transact no corporate business, except within the state from which they derive their charter. And it was here further held, that a resolution of the directors, held out of the state where the corporation was created, for the purpose of transfer- ring stock to some of their own number, was wholly inopera- tive. But the court declined to enjoin those holding under such title from voting at the . election of corporate officers, until all parties could be heard upon the question of title. 6. But a college of learning, established in a particular place, has no power to establish a branch, for one of its departments or faculties, at a different place. It was accordingly held, that Geneva College, at Geneva, N. Y., could not establish a medical school in the city of New York. 12 SECTION III. T/ie Constitution of Corporations. 1. Definitions of the different sense of the term " constitution," as applied to cor- porations. 2. How corporations may be composed or constituted. n. 1. The question illustrated more in detail. 3. Distinction of legislative, electoral, and administrative assemblies not essential. 4. Corporation can only act by its name. Subject discussed. 5. Any deviation from the name allowed, if the substance and sense be preserved. 6. Courts of equity will not restrain cor- porations from applying for enlarged power. 7. Change of constitution. Effect of change of name. 8. Courts of equity will enjoin a new corpo- ration from assuming the name of one of established credit. § 17 b. 1. The term " constitution," as applied to corporations, is susceptible of being used in very different senses. It may im- ply nothing more than the charter or formal grant of corporate organization and powers by the sovereignty, or it may be applied to certain fundamental principles, declared by the corporators themselves, as the unalterable basis of the organization of the body ; or, if not wholly unalterable, not to be altered, except by the adoption and concurrence of certain formalities, not likely to occur, except in regard to changes of very obvious necessity; or the term may be used to signify the members or different bodies of which the corporation is composed. 1S People v. Trustees of Geneva College, 5 Wendell, 211. 60 RAILWAYS AS CORPORATIONS. § 17 b. 2. A corporation may be composed of natural persons, acting in their separate and individual capacity ; or it may be composed of different bodies of natural persons, acting in separate assemblies ; or it may be composed of separate and distinct corporations. 1 3. Some writers have distinguished the meetings or assemblies of aggregate corporations into three kinds, — legislative, elector- al, and administrative. But this is a distinction with reference to the different officers, or duties of the same assembly, or meet- ing, and is consequently of no practical importance to be main- tained or discussed. 2 4. A corporation must be constituted by some corporate name, and can only act by such name. 3 A corporation by prescription may have several names, but by charter it can have, it is said, but one name for the same purpose and at the same time. For, although it may have a new charter by a new name, it thereby loses the old name. 4 1 Joint-stock business corporations are, for the most part, composed of natural persons. But as membership in such corporations grows out of the ownership of shares, it may exist in other corporations, who subscribe for or purchase shares ; or the shares may be in part owned by the sovereignty, either state or national. Bank of the United States v. The Planters' Bank of Georgia, 9 Wheaton, 904 ; Bank of South Carolina v. Gibbs, 3 McCord. 377. But as said by Mr. Chief Justice Marshall, in Bank of the United States v. The Planters' Bank, supra, " As a member of a corporation, a government never exercises its sovereignty. It acts merely as a corporator, and exercises no other power in the management of the affairs of the corporation than are expressly given by the incorporating act." A familiar instance of corporations, composed of different associations of natural persons, forming component parts of the corporation, will be found in the organization of municipalities, 1 Kyd. 36. So also the corporation may be composed of a denned number of persons of a particular class. As in the case of St. Mary's Church in the city of Philadelphia, 7 S. & R. 517. And a corporation is sometimes constituted of several subordinate corporations combined. As in the case of the Dean and Canons of the English Cathedrals, 2 Burn's Eccl. Law, Tit. Monasteries, 542. The same is also true of the cor- porations of the English Universities, which are composed of the subordinate corporations of the different Colleges and Halls. 1 Kyd. 36. Some English towns and cities are composed of several subordinate corporations. And a freeman of the city of London must first become a freeman of some of the Trades' incorpora- tions. Angell & Ames, § 96. 2 1 Kyd. 399 ; Angell & Ames, § 98. s College of Physicians v. Salmon, 3 Salk. 102. 4 Anonymous, 3 Salk. 102. But some writers have said that if the charter of §17Z>. THE CONSTITUTION OF CORPORATIONS. Gl 5. But it sometimes becomes an important and decisive con- sideration, how far a departure from the strict corporate name can be allowed without the violation or disregard of established principles. It was early decided, 5 that in contracts by or to cor- porations, it is sufficient if the name be substantially preserved. It is not requisite ut idem nomen syllabis be preserved, but only in re et sensu. The precise words of the name are not indispen- sable. It is sufficient if the substance and the sense be preserved. And in a case in New Hampshire, it was held not essential, in naming a corporation, that the same words should be used in the same order, provided the description was sufficient to identify the body. 6 And this rule obtains generally, in all the cases upon the subject, both* English and American. If the name used to describe the corporation does not describe any other person, natural or corporate, and is sufficient to show that the particu- lar corporation was intended, it will be sufficient." 6. The constitutions and powers of all corporations must necessarily depend upon the law of the state where the same was created. And in the English courts of equity it is not the prac- tice to interfere to restrain the majority of the shareholders from applying to parliament for enlarged powers. And the same rule is there adopted as to foreign corporations, whose shareholders a corporation allow them to act by different names for the same purpose, there is no good reason why they may not. 1 Kyd. 230. And in Minot v. Curtis, 7 Mass. 441, it is said a parish may be known by several corporate names. The point is not important, since few corporations make any claim to an alias dictus, and where that is claimed there will commonly be no difficulty in determining how far the claim can be justified or maintained. There is no pretence of the capacity of a corporation to change its own name at will. Serious inconvenience might be expected to result from any such facility of change of name being con- ceded to corporations. Reg. v. Registrar, 10 Q. B. 839. But the legislature may change the name of a corporation, and this will not effect its rights, its identity being shown. Rosenthal v. Madison P. R. Co., 10 Ind. R. 358. 5 Mayor and Burgesses of Lynne Regis. 10 Co. Rep. 11 Jac. I. 122 . 8 Newport Mech. Co. v. Starbird, 10 N. H. R. 123. 7 First Parish in Sutton v. Cole, 3 Pick. 232 ; Tucker v. Seaman's Aid So- ciety, 7 Met. 188; Attorney-General v. Corporation of Rye, 7 Taunt. 546; Foster v. Walter, Cro. Eliz. 106 ; Domestic & Foreign Missionary Society's Appeal, 30 Penn. St. R. 425 ; Button v. American Tract Society, 23 Vt. R. 336 ; Redfield on Wills, Pt. 1, §40, and cases cited.' 62 RAILWAYS AS CORPORATIONS. § 176. principally reside in England, and where the principal business is transacted in that country. 8 7. The English courts of equity hold a very strict hand over joint-stock companies incorporated by act of parliament, both in regard to the exercise of their powers and the application of their funds. 9 Where the name of a corporation is altered by act of the legislature, with a provision that it shall not have the effect to prejudice any right or remedy in favor of the company pre- viously existing, it was held to save the remedy against a surety upon a bond for faithful service of an employee. 10 8. An application was made in a somewhat recent case, 11 for an injunction against the defendant's adoption and use of the plaintiff's name, or one so similar as to lead the public to sup- pose they were the same institution, upon the ground that this would tend to deprive them of the just benefits of the long period of conducting their business upon terms and in a mode most ac- ceptable to the public. The application was based upon the same grounds that have induced courts of equity to interfere to protect parties from the fraudulent use of established trade- marks, inasmuch as it tends to a double fraud, — in depriving the parties, first giving character to such mark, of the legitimate fruits of their industry ; and also in that it induces the public to suppose they are obtaining the original article of the original proprietor, when in fact they are not. 12 The court, Vice-Chan- cellor Stuart, intimated no doubt of the propriety of granting the relief, upon the ground claimed in the bill, but denied the injunction upon the ground that no such case was made out at the hearing. But a company cannot by user acquire an exclu- sive right to use, in its title of incorporation, a term descriptive merely of the locality where the business is carried on ; and the court will not restrain the use of such general term by a new company, although it appear that the former company may have been prejudiced by the similarity of name. 13 8 Bill v. Sierra Nevada L. W. Co., 6 Jur. N. S. 184. Attorney-General v. Great N. Railw., 1 Drew. & Sm. 154. 4JNot 10 Groux & C. Co. v. Cooper, 8 C. B. N. S. 800. 11 The London Insurance v. The London & Westminster Insurance Corpora- tion, 9 Jur. N. S. 843. 12 2 Story Eq. Jur. § 951, et seq, in the late edition of 1866. 13 Colonial Life Ass. Co. v. Home & Col. Life Ass. Co., 10 Jur. N. S. 967. §18. ORGANIZATION OF THE COMPANY. 63 ♦CHAPTER IV. PROCEEDINGS UNDER THE CHARTER. SECTION I. Organization of the Company. 1. Conditions precedent must be performed. 2. Stock must all be subscribed, ordinarily. 3. Charter, location of road, condition prece- dent. 4. Colorable subscriptions binding at law. 5. Conditions subsequent, how enforced. 6. Stock distributed according to charier. 7. Commissioners must all act. 8. Defect of organisation must be plead. 9. Question cannot be raised collaterally. 10. Records of company, evidence. 11. j\Jembership, how maintained. 12. By subscription and transfer of shares. 13. Offers to take shares not enforced in equity, may be withdrawn. § 18. 1. To give the corporation organic life, the mode pointed out in the charter must ordinarily be strictly pursued. Condi- tions precedent must be fairly complied with. 1 Thus, where a given amount of capital stock is required to be subscribed or paid in before the corporation goes into operation, this is to be regarded as an indispensable condition precedent. 2 But if the charter is in the alternative, so that the stock shall not be less than one sum or greater than another, the company may go into operation with the less amount of stock, and subsequently in- crease it to the larger. 2 1 Angell & Ames on Cor. ch. 3, § 95- 112 ; 2 Kent, Comm. 293 et seq. 2 Post, § 51, and cases cited. Bend v. Susquehanna" Bridge, 6 liar. & Johns. 128 ; Gray v. Portland Bank, 3 Mass. R. 3G4 ; Minor v. The Mechanics' Bank of Alexandria, 1 Peters, (U. S.) 46. Opinion of Story, J. And where a cor- poration is formed, or attempted to be formed, under general statutes, the in- choate proceedings do not ripen into a corporation, until all the requirements of the statute; even the filing of the articles in the office of the Secretary of State, are complied with. And until this is done, the subscription of any one to the articles is a mere proposition to take the number of shares specified, of the cap- ital stock of the company thereafter to be formed, and not a binding promise to pay. The obligation is merely inchoate and can never become of any force, *7 6-1 PROCEEDINGS UNDER THE CHARTER. § 18. 2. And where business corporations are created, with a defi- nite capital, it is regarded as equivalent to an express condition that the whole stock shall be subscribed before the company can go into full operation ; and, in the case of banks, it must be paid in specie, in the absence of all provision to the contrary, before they can properly go into operation. 3 * 3. In some cases it is a condition of the charter, or of the subscriptions to the stock, that the track of a railway shall touch certain points, or that it shall not approach within certain dis- tances of other lines of travel. This class of conditions, so far as they can practically be denominated conditions precedent, must be strictly complied with, before the company can properly go into operation so as to make calls. 4. But it has been held, that colorable subscriptions to stock, in order to comply with the requisites of the charter, are not to be regarded as absolutely void. They are binding upon the subscribers themselves. And they are binding upon the other subscribers unless, upon their first discovery, they take steps to stay the further proceedings of the corporation, which may be unless the corporation goes into effect in the mode pointed out in the statute. And until that time, the subscriber may revoke the offer, and if the articles are in his possession or control, erase his name. Burt v. Farrar, 24 Barb. 518. * King v. Elliott, 5 Sm. & Mar. 428 ; Post, § 51. But a requirement in the charter of a railway company, that S 1,000 per mile shall be subscribed, and ten per cent paid thereon in good faith, does not require ten per cent to be paid by each subscriber, in order to the performance of the condition. It is a sufficient compliance with such requirement, if that proportion on the whole subscription be paid. Ogdensb., Rome, & Clay. R. v. Frost, 21 Barb. 541. But under the late English Statutes corporations are allowed to organize, and make calls to some extent, before all the capital is subscribed. Or. P. W. Co. v. Brown, 9 Jur. N. S. 578 ; S. C. 2 H. & C. G3. But in America the rule that all the stock must be subscribed before the company can go into operation is strenuously ad- hered to. Shurtz v. The S. & T. Railw. Co., 9 Mich. 2G9. And upon gen- eral principles it seems not to be held indispensable in England that all the stock be subscribed, either to enable the corporation to go into operation, or even to borrow money on mortgage. McDougall v. The Jersey Imperial Hotel Co., 10 Jur. N. S. 1043. But in America the entire capital stock must be subscribed and paid in money, and it will not be sufficient to pay it in the equivalent for money, to the acceptance of the shareholders or directors, unless the charter or general laws of the State so provide. The People v. The Troy House Co., 44 Barb. G25. *8 § 18. ORGANIZATION OF THE COMPANY. G5 done in a court of equity. If there has been unreasonable delay in opposing the action of the corporators, upon the faith of such subscriptions, or if matters have progressed so far, before the discovery of the true character of the subscriptions, by the par- ties liable to be injuriously affected by them, as to render it diffi- cult to restore the parties to their former rights, the corporation will still be allowed to proceed, notwithstanding the fraud upon the charter. 4 5. Conditions subsequent in railway charters, by which is to be understood such acts as they are required to perform after their organization, will ordinarily form the foundation of an action at law, in favor of the party injured ; or they may be specifically enforced in courts of equity, in cases proper for their interference in that mode ; or, if the charter expressly so provide, proceedings, by way of scire facias, to avoid the charter may be taken. 5 6. Where a statute declares certain persons by name, and such other persons, as shall hereafter become stockholders, a cor- poration, * the distribution of the stock, in the mode pointed out in the statute, is a condition precedent to the existence of the corporation. 6 4 "Walker v. Devereaux, 4 Paige, 229. The entire ground of chancery jurisdiction in regard to the conduct of commissioners or corporations in mak- ing colorable subscriptions of stock is here very fully discussed by the learned Chancellor. And the conclusion arrived at seems the only practicable one, that colorable subscriptions or fraudulent distribution of stock will not de- feat the legality of the organization of the corporation, unless the thing is ar- rested in limine. Johnston v. S. W. B. B. Bank, 3 Strob. Eq. 263 ; Selnia & Tenn. E. v. Tipton, 5 Alabama E. 787; Hayne v. Beauchamp, 5 Sm. & M. 515. The decision of the commissioners is conclusive upon the company and shareholders at law certainly. Crocker v. Crane, 21 Wendell, 211. And where the charter, or act of association, names commissioners to take up sub- scriptions, they alone have jurisdiction of the matter, and subscriptions taken up by volunteers are not binding upon the subscribers unless adopted by the commissioners. Shurtz v. The S. & T. E. E. Co., 9 Mich. E. 269. 5 2 Kent, Comm. 305 and notes. 6 Crocker v. Crane, 21 "Wendell, 211 ; s. c. 2 Am. Eailw. C. 484. Where the statute names a large number of persons, and enacts that they, or any three of them may act as commissioners, either the whole number or any three may act at the election of the individuals. No particular form of words is re- quired to create the grant of a corporation. The grant of power to perform corporate acts implies the grant of corporate powers. Comm. v. West Chester Eailw. Co., 3 Grant Cas. 200. VOL. i. 5 *9 66 PROCEEDINGS UNDER THE CHARTER. § 18. 7. Where the charter of a railway company appoints a certain number of commissioners, to receive subscriptions and distribute the stock, in such manner as they shall deem most conducive to the interests of the company, making no provision in regard to a quorum, all must be present, to consult, when they distribute the stock, although a majority may decide, this being a judicial act. Receiving subscriptions is a merely ministerial act, and may be performed by a number less than a majority. 6 If the organization of a corporation is regular upon its face, and the legislature have recognized it as such subsequent to it having gone into operation, it becomes ipso facto a legal corporation. 7 8. Questions in regard to the organization, or existence of the corporation, can only be raised ordinarily upen an express plea, either in abatement or in bar, denying its existence. 8 9. But all the cases concur in the proposition, that the exist- ence of the corporation, the legality of its charter, and the ques- tion of its forfeiture, cannot be inquired into, in any collateral proceeding, as in a suit between the company and its debtors, or others, against whom it has legal claims. 9 7 Black River & Utica Railw. v. Barnard, 31 Barb. 258. 8 Boston Type and Stereotype Foundry v. Spooner, 5 Vt. R. 93, and cases cited ; Railsback v. Liberty & Abington Turnp. Co., 2 Carter, 656. But some cases seem to require such proof to establish the contract. Stoddard v. The Onondaga Annual Conference, 12 Barb. 573 ; Heaston v. Cincinnati & F. W. R., 16 Ind. R. 275. A party who executes his promissory note to a company by its corporate name is estopped to deny its corporate existence. East Pascagoula Hotel Co. v. West, 13 La. Ann. 541. s. p. Black River Railw. v. Clarke, 25 N. Y. 280. But in an action by a corporation upon a judgment, the defendant is estopped to plead that no such corporation exists, even if he propose to prove its dissolution after the date of the judgment. He should plead such matter specially. Perth Amboy Steamboat Co. v. Parker, 2 Phila. 67. But see An- derson v. Kerns Draining Co., 14 Ind. R. 199. 9 Duke v. Cahawba Nav. Co., 16 Alabama R. 372; Post, § 242, note 6. But in an action against a stockholder for the debt of the company under the stat- ute, the existence and organization of the company must be proved; and judg- ment against the company is not evidence against the stockholder. Hudson v. Carman, 20 Law Rep. 216 ; s. c. 41 Me. R. 84 ; C. P. & A. Railw. v. City of Erie, 27 Penn. St. 380. See also Eakright v. L. & N. I. Railw., 13 Ind. R. 404. The subscription to the stock of a corporation estops the subscriber to deny the corporate existence, nor canthe subscriber plead in defence of such sub- scription that other subscribers, by means of secret fraudulent agreements, were promised shares upon terms different from those specified in the agree- § 18. ORGANIZATION OF THE COMPANY. 67 10. The records of the corporation are primd facie, but not indispensable evidence, of its organization and subsequent pro- ceedings. 10 But the authenticity of the books, as the records of the corporation, must be shown by the testimony of the proper officer entitled to their custody, or that of some other person cog- nizant of the fact. 11 ment, since such fraudulent arrangements are of no validity, and cannot avail the parties on whose behalf they are made. Anderson v. N. & R. Railw., 12 Ind. R. 37G. 10 Ang. & Am. § 513; Grays v. Lynchb. & Salem T. Co., 4 Rand. 578; Bun- combe T. Co. v. McCarson, 1 Dev. & Bat. 306 ; Greenl. Ev. § 492 ; Rex v. Mar- tin, 2 Camp. 100; Hudson v. Carman, 20 Law Rep. 216; s. c. 41 Me. R. 84. All that a corporation is called upon to prove, to establish its existence in a litigation with individuals dealing with it, is its charter and user under it. This constitutes it a corporation de facto, and this is sufficient, in ordinary suits, between the corporation and its debtors. The validity of its corporate exist- ence can only be tested by proceedings in behalf of the people. Mead v. Keeler, 24 Barb. 20. Between the company and strangers, the records of the company will ordinarily be held conclusive against them in regard to such matters as it is their duty to perform, in the manner detailed in the records. Zabriskie v. C. C. & C. Railw., 10 Am. Railw. Times, No. 15. s. c. affirmed, 23 How. 381. Heaston v. Cincinnati, &c. Co., 16 Ind. R. 275. See, upon the general question T)f proof and presumption of the organization of corporations, Leonardsville Bank v. Willard, 25 N. Y. 574; Belfast and Angelica Plank Road Co. v. Chamberlain, 32 N. Y. 651 ; Buffalo & Allegany Railw. v. Cary, 26 N. Y. 75. Where the statute under which an incorporation is formed in another state, required, that before the corporation should commence business it should cause its articles of association to be published in a prescribed form, it was held that it might be regarded as sufficiently incorporated for the bringing of an action without the publication ; and that the general reputation and notoriety of the fact that such corporation was doing business in that capacity, coupled with the fact that the contract sued upon was made payable to them, was sufficient evidence of the corporate existence. Holmes v. Gilliland, 41 Barb. 568. See Unity Ins. Co. v. Cram, 43 N. H. R. 636, where the rule of construction is somewhat more strict. There seems to be no rule of practice better settled than that where the de- fendant, in a suit brought by a corporation, pleads the general issue, he thereby concedes the right of the plaintiff to sue in his corporate capacity. Orono v. Wedgeworth, 44 Me. R. 49. The members of a mutual insurance company can- not dispute the corporate existence in a suit upon thp premium notes in favor of a receiver appointed to wind up the concerns of the company. Hyatt v. "Whip- ple, 37 Barb. 595. Misnomer of corporations must be plead in abatement or it will be regarded as waived. Keech v. Bait. & Wash. Railw., 17 Md. R. 32. 11 Highland Turnp. Co. v. McKean, 10 Johns. 154. See Breedlove v. M. &c. Railw. Co., 12 Ind. R. 114. 68 PROCEEDINGS UNDER THE CHARTER. § 18. 11. Questions sometimes arise as to what constitutes member- ship in a corporation. This has to be determined, in most aggregate corporations, by the just construction and fair import of the charter and by-laws of the body. The usage of the corpo- ration and of other similar bodies will be of controlling force in determining such questions. But the power of maintaining, in some mode, a supply of members of the body, is incident to all corporations, as indispensable to its continued existence. 12 12. But in joint-stock business corporations, like banks and railways, and other similar companies, membership is originally constituted by subscription to the shares in the capital stock ; and it is subsequently continued by the transfer of such shares, in conformity with the charter and by-laws of the company, and no election by or assent on the part of the corporation is re- quisite, unless made so by the charter or by-laws. 13. Serious questions often arise in regard to the allotment and acceptance of shares. Courts of equity have sometimes de- clined to interfere to carry into effect specifically, contracts with the promoters to accept shares in the company when it should be fully organized. 13 But we apprehend the rule is generally otherwise, as we have stated elsewhere. 14 And one who has made the requisite deposit and made the formal application to the company for an allotment of shares, is still at liberty to with- draw the application at any time before it is accepted or any al- lotment made. 15 12 Hicks v. Launceston, 1 Roll. Ab. 513, 514 ; s. c. 8 East, 272 in n. See also 2 Kent, Cormn. 294. It is not competent for the defendant, in an action in favor of a corporation, to plead that the company has committed acts working a for- feiture of its corporate franchises. That can only be determined by a suit on behalf of the public, brought expressly to try that question, Comm. v. Morris, 1 Phil. 411; Coil v. Pittsburg Female College, 40 Penn. St. 439; Dyer v. Walker & Howard, Id. 157. Membership in the corporation is not affected by the certificate of shares containing a promise to pay interest till a certain time. McLaughlin v. D. & M. R. Co., 8 Mich. R. 100. 13 Oriental I. St. Co. v. Briggs, 4 L. Times, N. S. 578. But this case was af- firmed by the Lord Chancellor, on the ground that there was no valid or com- plete contract. 5 L. Times, N. S. 47 7. 14 Post, § 34, pi. G. 15 Graham ex parte, 7 Jur. N. S. 981. §19. MODIFICATION AND, ACCEPTANCE OF THE CHARTER. 69 *SECTION II. Acceptance of Charter, or of Modification of it. 1. Neio or altered charter must be formally \ 5. Matter of presumption and inference accepted. 2. Subscription for stock sometimes sufficient. 3. Inoperative unless done as required. 4. Assent to beneficial grant presumed. 6. Organization or acceptance of charter may be shown by parol. 7. Corporators assenting are bound. 8. Charter subject to recall until accepted. § 19. 1. It is requisite to the binding effect of every legislative charter (or modification of such charter) of a joint-stock com- pany, that it should be accepted by the corporators. 1 This ques- tion more commonly arises, in regard to the modification of a charter, or the granting of a new charter, the company in either case, whether under the old or the new charter, going forward to all appearance much the same as before. In such case, it has usually been regarded as important to show some definite act of at least a majority of the corporation. 2 2. The question of acceptance becomes of importance often, where a partnership, or some of its members, obtain an act of incorporation. But ordinarily, in the first instance, the assent of the stockholders, or corporators, is sufficiently indicated by the mere subscription to the stock. 3. Where a statute in relation to a corporation required ac- ceptance, in a prescribed form, and that is not complied with, the corporation can derive no advantage from the act. 3 4. It has been held, that grants beneficial to corporations may be presumed to have been accepted by them, the same as in the case of natural persons. 4 1 The King v. Pasmore, 3 T. R. 200, 240 ; Ellis v. Marshall, 2 Mass. R. 269 ; This is a charter to certain persons by name, for the purpose of making a street, and subjecting them to assessment for the expense, and it was held not to bind a person named in the act, unless he assented to it. 2 Wilmot, J., in Rex v. Vice Ch. of Cambridge, 3 Bur. 1647; Rex v. Am- ery, 1 T. R. 575; Falconer v. Campbell, 2 McLean, 195. 3 Green v. Seymour, 3 Sand. Ch. 285. 1 Charles River Bridge v. Warren Bridge, 7 Pick. 344, by Parler, Ch. J., and Wilde, J. *10 70 PROCEEDINGS UNDER THE CHARTER. § 19. 5. And in the majority of instances, perhaps, the acceptance is * rather to he inferred from the course of conduct of the com- pany than from any express act. 5 6. It may always be proved by oral testimony, as may also the organization of the company ordinarily. 6 7. In a recent case in Ohio, where an amendment of the charter of a bank was passed by the legislature giving the bank certain immunities and privileges, upon the assent of all the stockholders in writing, filed with the auditor of state, to become personally responsible for the liability of the company in the manner prescribed in the act, it was held, that although all the stockholders did not subscribe the required written declaration, yet if the bank had enjoyed the benefits secured by the amend- ment, neither those stockholders who did subscribe it, or the bank itself, can deny the acceptance of the amendment, as against the claims of third persons. 7 8. And where the constitution of the state is so altered as to prohibit the grant of special acts of incorporation, it was held that such an act granted before the new constitution took effect, and which had not been accepted by the corporators, could not be accepted thereafter ; as the grant of a charter to those who had not applied for it, until it was accepted, remained a mere offer, and might be withdrawn at the pleasure of the grantors. 8 But where any amendment of the charter of a corporation was fully accepted by the shareholders before the new constitution took effect, it cannot be affected by any of the provisions there- of: and what shall amount to such acceptance is matter of fact, depending upon the construction of the facts proved. 9 6 Bank of U. S. v. Dandridge, 12 Wheat. 64, opinion of Story, J., and oases cited. 6 Coffin v. Collins, 17 Maine R. 440; Bank of Manchester v. Allen, 11 Yt. R. 302; Angell & Ames. Corp. §81-87; Dartmouth College v. Woodward, 4 Wheat. 688 ; Wilmington & Manchester R. v. Saunders, 3 Jones, 126. 7 Owen v. Purdy, 12 Ohio N. S. 73. And a legislative permission to a plank road company to mortgage its corporate property is an amendment which may be accepted by the vote of the majority. And the same is true of all amend- ments calculated merely to facilitate the attainment of the existing objects and purposes of the corporation. Joy v. Jackson & Michigan Plank Road Co., 11 Mich. R. 155. 8 State v. Dawson, 16 Ind. R. 40. 9 s. c. 22 Ind. Rep. 272. *11 §20. ORDINARY CORPORATE POWERS. 71 SECTION III. Ordinary powers. — Control of majority. 1 . Ordinary franchises of railways. 3. Majority control, unless restrained. 4. Cannot change organic law. 5. Except in the prescribed mode. 6. Cannot accept amended charter. 7. Or dissolve corporation. 8. May obtain enlarged powers. 9. Courts of equity will not restrain the use of their funds for that purpose. 10. But will, if to convert caned into railway. 1 1 . Right to interfere lost by acquiescence. 12. Acquiescence of one plaintiff, fatal. 13. Railway a public trust. 14. Suit maintained by rival interest. §20. 1. The ordinary powers of a railway company are the same as those pertaining to other joint-stock aggregate corpora- tions, unless restricted by the express provisions of their charter, or by the general laws of the state. These are perpetual succes- sion, the power to contract, to sue and be sued by the corporate name, to hold land for the purposes of the incorporation, to have a common seal, and to make its own by-laws or statutes, not in- consistent with the charter, or the laws of the state. 1 And it may be proper to say, that it is implied in the grant of all busi- ness corporations, that they possess the power to acquire and convey such property, both real and personal, as shall be found reasonably necessary and convenient, for carrying into success- ful operation the purposes of their incorporation. And when there is no limitation upon this power, in the act of incorpora- tion, it can only be limited by writ of mandamus or injunction, out of chancery, at the suit of the attorney-general, or by some other proceeding on the part of the people. Until some such public interference, the title of the corporation will be good. 2. The right of the majority of a joint-stock company, whether a copartnership or a corporation, to control the minority, is a consideration of vital importance, and will be more extensively discussed hereafter. 2 3. There can be no doubt the general principle of the right of the majority to control the minority, in all the operations of the 1 Watford, 69 ; 1 Black. Comm. 475, 476 ; 2 Kent, Coinm. 277 ; where the power of amotion of members for just cause is added. 2 Post, § 56, 212. 72 PROCEEDINGS UNDER THE CHARTER. § 20. company, within the legitimate range of its organic law, is im- plied in the very fact .of its creation, whether expressly conferred or not. 3 * 4. And perhaps it is equally implied in the fundamental compact, that the majority have no power to change the organic law of the association, except in conformity to some express provision therein contained. 5. This principle lies at the foundation of all the political or- ganizations in this country, which, in theory certainly, are not liable to be changed by the will of the majority, except in the mode pointed out in the constitution of the state or sovereignty. And corporations are not subject to the ultimate right of revolu- tion, which is claimed to exist in the state, and which may be exercised by the law of force, which is a kind of necessity, to which all submit, when there is no open way of escape. This could have no application to a commercial company, whose movements are as much under the control of the courts of jus- tice as those of a natural person. 6. And in this country it has been held, that the acceptance by the majority of a corporation of an amendatory act, does not bind the minority. 4 An amendment to the charter of a corpora- s Louisville, Cincinnati, & Charleston Railw. v. Letson, 2 Howard (U. S.), 497 ; s. c. 15 Curtis, Cond. 193. The very definition of a corporation, that it is an artificial being composed of different members, and existing and acting as an abstraction, and having its habitation where its functions are performed, presup- poses that it must act in conformity with its fundamental law, which is according to the combined results of its members, or the will of the majority. But this will cannot change its fundamental law without changing the identity of the ar- tificial being, to which we apply the name of the corporation. See also St. Mary's Church, 7 S. & R. 517 ; New Orleans, Jackson, &c. Railroad v. Harris, 27 Miss. R. 517 ; Ex parte Rogers, 7 Cowen, 526, which holds, that if the char- ter requires a certain number to be present, in order to the performance of a particular act, it is requisite that the number remain till the act is complete, and if one depart before, although wrongfully, it will defeat the proceedings. 4 New Orleans, &c. Railroad v. Harris, 27 Miss. R. 517. But this rule will be understood with some limitations. If it be an amendment within the ordina- ry range of the original charter, giving increased facilities for the accomplish- ment of the same objects, it may be accepted by the majority, so as to bind the whole company. But if it be a fundamental alteration of the constitution of the company, it must have either the express or implied assent of all the corporators, to make it binding. Post, pi. 8 ; § 56, pi. 3, 7. *12 § 20. ORDINARY CORPORATE POWERS. 73 tion, to become binding, must either have been applied for in pur- suance of a vote of the stockholders, or else have been accepted by such one ; or it must have been acted under for such a length of time as to raise a reasonable presumption of knowledge in the shareholders and subsequent acquiescence. 5 7. And a contract of a manufacturing corporation to employ the plaintiff, a stockholder, during the time for which the corpo- ration is established, that being indefinite, is not released by a majority of the company voting to dissolve the corporation and wind up its concerns, discharging the plaintiff from his employ- ment, and transferring the property to trustees, to pay the debts and distribute the surplus among the stockholders, and giving notice to the executive department of the state, that they claimed no further interest in their act of incorporation. * 8. But the English cases seem to suppose, that it is incident to every business corporation to obtain such extension and en- largement of its corporate powers, as the course of trade, and enterprise, and altered circumstances, shall render necessary or desirable, not altogether inconsistent with its original creation. 7 5 Illinois River Railway v. Zirmner, 20 111. R. 654 ; Same v. Casey, ib. 6 Revere v. Boston Copper Co., 15 Pick. 351. This case, although put main- ly upon the ground of plaintiff's rights being independent of the law of the asso- ciation, yet incidentally involves the right of the majority of the corporators to change its constitutional law. See also Von Schmidt v. Huntington, 1 Cal. 55, and Kean v. Johnson, 1 Stockton, Ch. 401, where it is held, that where the charter is granted for a limited time, it must continue in operation till the term expires, unless, perhaps, in case of serious loss, or with the consent of all the cor- porators, and others having any legal interest in the question. The same rule was recently declared in Louisiana. Lodge No. I. v. Lodge No. I., 16 La. Ann. 53. And it was here considered, that a resolution passed by the majority of the members of a corporation donating all the property of the company to a new corporation of which the members voting are also members, and the delivery of the same to such corporation in pursunance of such resolution, is void. 7 Ware v. Grand Junction Waterworks, 2 Russ. & My. 470 ; (13 Eng. Ch. Rep. 126.) Lord Brougham seems here to suppose, that the right of petition to parliament, for enlargement of powers, is an implied incident of all business cor- porations, by which the subscribers are bound, unless some express prohibition is inserted in their charter. But the more common implication in this country certainly is, that the original shareholders are not bound by any such alteration, unless such power exists, in terms, in the original charter. *13 74 PROCEEDINGS UNDER THE CHARTER. § 20. 0. Hence it was held that a court of equity will not, at the instance of a shareholder, restrain a joint-stock incorporated company, whose acts of incorporation prescribe its constitution and objects, from applying, in its corporate capacity, to parlia- ment, and from using its corporate seal and resources, to obtain the sanction of the legislature, to the remodelling its constitu- tion, or to a material extension and alteration of its objects and powers. 7 10. In one case where the purpose of the company was to apply to parliament for leave to convert part of its canal into a railway, the vice-chancellor granted the injunction against apply- ing any of its existing funds to the proposed object. 8 This is the more common view of the subject in this country, and to a great extent in England. 9 11. But this right of the minority of the shareholders to inter- fere, by way of injunction, to restrain the majority from obtain- ing permission to alter the constitution of the corporation, may undoubtedly be lost by acquiescence. 10 Thus where the share- * holders knew of the purpose of the directors to apply the funds of the company to the construction of part only of the road, to the abandonment of the remainder, and remained passive for eighteen months, while the directors were applying large sums to the completion of this part only, the court refused to interfere by injunction. 10 12. And if one of the shareholders, who has acquiesced in 8 CunlhTv. Manchester & Bolton Canal Co., 2 Russ. & My. 480, in note. But it is here stated, that a few days afterwards, one Maudsley filed a bill against the same company and for a similar object. The cause was heard on its merits, and the suit dismissed with costs. Any act beyond the scope of the constitution of the company requires the consent of all the members. Burmester v. Norris, 8 Eng. L. & Eq. 487. 9 Post, §§ 50, 181, 212. 10 Graham v. Birkenhead, &c. Railway, 6 Eng. L. & Eq. 132; Beman v. Rufford, Id. 106. Lord Cranworth says: " This court will not allow any of the shareholders to say, that they are not interested in preventing the law of their company from being violated." Ffooks v. London & S. W. R. 19 Eng. L. & Eq. 7. But one creditor of a corporation cannot, by injunction, restrain an- other creditor of the same grade from obtaining prior payment by virtue of an execution issued upon a prior judgment. Gravenstine's Appeal, 49 Penn. St. 310. *14 § 20. ORDINARY CORPORATE POWERS. 75 the diversion of the funds, be joined in the suit with others who have not, no relief can be afforded. 31 And there can bo no doubt of the soundness of this principle, although the effect of its application may be to produce a funda- mental alteration of the constitution of a corporation, and thus to enable them to do what they had no power before to do. But this is only applying to the case the principle of implied consent of all the shareholders, resulting from silence, which is all that is requisite in any case, to legalize the alteration of the charter of a private corporation. 13. It is said in a late case by an eminent equity judge, Vice- Chancellor Stuart : 12 " Although, generally speaking " — " there can be no doubt of the soundness of the principle, that the di- rectors and the majority of the company may be restrained from employing money, subscribed for one purpose, for another, how- ever advantageous," — " and although this is the law as to joint- stock companies, unincorporated and unconnected with public duties or interests, it has not been applied to corporate com- panies for a public undertaking, involving public interests and public duties under the sanction of parliament ; in such cases the court of chancery has permitted the use of the corporate seal, and the moneys of the company, to obtain the sanction of parlia- ment to purposes materially altering the interests of the share- holders, according to the contract inter se. This was done in the case of Stevens v. South Devon Railway Company-." 13 The learned judge therefore concludes, that, although the principle first stated by him may apply to the case of public railway com- panies in general, " it must be taken to be subject to many qual- ifications, and requiring much caution and consideration " in its application. * 14. The same learned judge further adds, upon the impor- tant subject of such proceeding being taken by one in the interest of a rival company : " It has been suggested that this suit is con- stituted to serve the purposes of another set of shareholders. If 11 Ffooks v. London & S. W. R. 19 Eng. L. & Eq. 7, opinion of Stuart, V. C. and cases cited. 12 Ffooks v. London & S. W. R. supra. 13 13 Beavan, 48 ; 8. c. 12 Eng. L. & Eq. 229 ; s. c. 9 Hare, 313. * 15 76 PROCEEDINGS UNDER THE CHARTER. § 20. it had been established that the real object of seeking this injunc- tion had been to serve the interests of a rival company, I should have considered that a circumstance of great importance in de- termining the rights of the plaintiffs to any relief. No doubt it has been held in several cases, that the mere fact that the plain- tiffs are shareholders in a rival company is no reason for the court in a proper case refusing its aid, to prevent the violation of contracts. But when the fact is established, that, under the pretence of serving the interest of one company, the shareholders in a rival company, by purchasing shares for the purpose of liti- gation, can make this court the instrument of defeating or injur- ing the company into which they so intrude themselves, in order to raise questions and disputes on matters as to which all the other members of the company may be agreed, I cannot consider that in such a case it is the province of this court ordinarily to interfere. In questions on the law of contracts, where there is a discretionary jurisdiction in this court, circumstances affecting the condition of the contracting parties, and the origin and situ- ation of their rights in relation to the subject-matter of the con- tract, deserve great consideration. 15. But in a recent English case 14 it was determined by Vice- Chancellor Wood, that the court will not, upon the application of the minority of the members of a corporation, interfere with a resolution of the company voluntarily to wind up its concerns, unless the resolution was obtained by fraud, or by overbearing conduct, or by improper influences. 14 Re The Imperial Mercantile Credit Association, 12 Jur. N. S. 736. § 21. MEETINGS OF COMPANY. 77 SECTION IV. Meetings of Company. 1 . Meetings, special and general. j 6. Company acts by meetings, by directors, by 2. Special, must be notified as required. 3. Special and important matters, named in notice. 4. Notice of general meetings need not name business. 5. Adjourned meeting, still the same. agents. 7. Courts presume meetings held at proper place. 8. Every shareholder may vote, but not by proxy. § 21. 1. By the English statutes meetings of railway com- panies are distinguished as " ordinary " and " extraordinary." That distinction, in this country, is expressed by the term, gen- eral and special. Ordinary meetings are the annual and semi-an- nual meetings of the company, and such others as are held at stated times and for defined objects, according to the provisions of the charter and by-laws ; and extraordinary meetings are such as are held by special call of the directors, or other officer, whose duty it is made * to call meetings of the company, in certain contingencies usually defined by the statutes. 1 2. Notice of special meetings must be issued in conformity to the charter and statutes of the corporation, and, where no special provision exists, must be given personally to every mem- ber. 2 8. Notice of special meetings should ordinarily specify the general purpose and object of the call. But it is said this is not indispensable, when it is for the transaction of ordinary business, and that giving security for the debt of a bank, by mortgage of its real estate, is of this character. 3 But where the business is 1 8 & 9 Vict. c. 16, § 66. 2 Wiggin v. Freewill Baptist Society, 8 Met. 301. This view seems to be countenanced by Lord Kenyan, in Rex v. Faversharn, 8 T. R. 352 ; Rex v. May, 5 Burrow, 2681 ; The King v. Langhorn, 4 Ad. & Ellis, 538. See, also, cases cited in the argument of this case. But all the cases agree, that if the members attend even without notice, it is sufficient. The King v. Theodorick, 8 East, 5-13, A meeting may be general for most purposes, and also special for a particular purpose ; Cutbill v. Kingdom, 1 Exch. 494. 3 Savings Bank v. Davis, 8 Conn. R. 191. *16 78 PROCEEDINGS UNDER THE CHARTER. § 21. unusual and important, as the election or amotion of an officer, the making of by-laws, or other matter affecting the vital in- terests and fundamental operations of the corporation, and on a day not appointed for the transaction of business of this character, or of all business of the corporation, the notice must state the business, or the action upon it will be held illegal and void. 4 4. But, as a general rule, if may be safely affirmed, perhaps, that in regard to general meetings of the company, which are for the transaction of all business, no notice of the particular business to be done is necessary. 5 And all the members of the corporation are presumed to have notice of their stated meetings and are bound by the proceedings at such meetings ; but there is no presumption that they know what is done at such meetings, so as to affect them with notice of anything done there contemplating future action at any other time than the stated meetings. 6 5. The adjournment of a general meeting is not a special meeting, but the mere continuance of the general meeting, and requires no notice of the business to be transacted. 5 But if the adjourned meeting be for the transaction of any other business than the mere completion of the unfinished busi- ness of the stated or special meeting, as the case may be ; and more especially, where the business is of a character which could 4 Rex v. Doncaster, 2 Burrow, 738 ; Angell & Ames, § 488-496. In the ease of Zabriskie t>. C. C. & C. Railw., before the District Court for the North- ern District of Ohio, 10 Am. Railw. Times, No. 15, s. c. affirmed 23 How. (U. S.) 381 ; this subject is discussed by Mr. Justice McLean, and he concludes, that where the question to be determined by the company was the guaranty of the bonds of a connecting railway to a large amount, under the statute of the state, which required the consent of a meeting of the shareholders, in which two thirds of the capital stock should be represented, it was indispensable that the call for the meeting should state the business to be transacted, and should be given long enough before the time of the meeting to enable the remotest share- holders in the country to obtain notice and be able to attend, or communicate with their agents, or proxies, and also to enable the resident agents of foreign share- holders to communicate with the owners. This seems but a just and reasonable limitation upon the power of corporations, in regard to special meetings. 6 Warner v. Mower, 11 Vt. R. 385 ; Vv T ills v. Murray, 4 Exch. 843. The People v. Batchelor, 22 N. Y. Court of Appeals, 128. § 21. MEETINGS OF COMPANY. 79 not have been legally transacted at the former meeting, it will not afford any warrant for its legality, that it is done at an ad- journed meeting from one legally constituted originally. 7 But the publicity and general notoriety of a transaction may be suffi- cient ground for presuming knowledge of the appointment of one to a corporate office, even to the extent of subjecting such corpo- rator to a penalty for non-acceptance. 8 6. By the English statutes, railways may act in either of three modes : First, By the general assembly of the shareholders, which, as between them and the directors and other agents' of the company, has supreme control of its affairs : Second, By its directors : Third, By its duly constituted agents. 9 The same gen- eral principle is applicable in this country, and at common law. 7. And where the by-laws require the meetings of the com- pany * to be held at a particular place, as the counting-house of the company, and the record, or evidence, does not show that the meetings were held at a different place, it will be presumed they were held at. the place designated. 10 8. Every shareholder is, ordinarily, entitled to participate in the meetings of members of the corporation duly called, and to vote upon all his shares, according to the mode prescribed in the charter and by-laws of the company, and in conformity with the general laws of the state. But it seems not well settled whether a by-law of the corporation will bo sufficient to entitle the mem- bers to vote by proxy, and whether some legislative sanction is not requisite to that effect. 11 But where the charter provided that " each person being present at an election shall be entitled to vote," it was held to mean actual presence, and votes by proxy were properly excluded. 12 7 People v. Batchelor, 22 N. Y. R. 128; Scadding v. Lorant, 5 Eng. L. & Eq. 16. See Smith v. Law, 21 N. Y. Court of Appeals, 296. 8 City of London v. Vanacre, 5 Mod. 438. 9 Walford on Railways, 70. 10 MeDaniels v. Flower Brook Man. Co., 22 Vt. R. 274. 11 State v. Tudor, 5 Day, 329 ; where, in mere business corporations, it was considered that a by-law was sufficient to give the power tp vote by proxy. But in Taylor v. Griswold, 2 Green, 222, the contrary opinion is maintained. See also, 2 Kent, Comm. 294. There seems no question that in public, and elee- mosynary corporations the members must attend in person. 1S Broom v. Comm, 2 Phila. R. 156. *17 80 PROCEEDINGS UNDER THE CHARTER. § 22. SECTION V. Election of Directors. 1 . Should be at general meeting, or upon spe- I 3. Company bound by act. of directors, de cial notice. facto. 2. Shareholders may restrain their authority. | 4. Act of officer de facto, binds third persons. § 22. 1. The election of directors is regarded as more impor- tant to the interests of the company than most other business, inasmuch as, when duly elected, they hold office for a consider- able term, and have all the powers of the corporation in regard to the transaction of its ordinary business, unless specially re- strained. They should, therefore, be elected at the regular meet- ings of the company, and even vacancies should not properly be filled at special meetings, unless special notice of that partic- ular business had been given according to the laws of the com- pany, which include its charter and statutes, and the general laws of the state applicable to the subject. 2. The shareholders may, in a proper assembly, pass statutes, general or special, which shall control the directors, as between them and the company. 1 Where the by-laws of the company 1 But where the charter vests the control of the concerns of the company in a select board or body, the shareholders at large have no right to interfere with the doings of these, their charter agents. Commonwealth v. Trustees of St. Ma- ry's Church, 6 Serg. & R. 508 ; Dana v. Bank of the United States, 5 Watts & Serg. 223, 247 ; Conro v. Port Henry Iron Co., 12 Barb. 27. And courts are always reluctant to interfere with the conduct of directors of a corporation, even at the instance of a majority of the shareholders, and ordinarily will not, when such directors have acted in good faith. State v. The Bank of Louisiana, 6 La. R. 745. But in Scott v. Eagle Fire Co., 7 Paige, 198, it was held, that the directors of a joint-stock corporation may be compelled to divide the actual surplus profits of the company among its stockholders from time to time, if they neglect or re- fuse to do so, without any reasonable cause. But if they abuse their power to make dividends of surplus profits, by dividing the unearned premiums received by them, without leaving a sufficient fund, exclusive of the capital stock, to sat- isfy the probable losses upon risks assumed by the company, it seems they will be personally liable to such creditors of the company, if, in consequence of ex- traordinary losses, the company should become insolvent so as to be unable to pay its debts. § 22. ELECTION OF DIRECTORS. 81 * require notice of the meeting for electing directors, but do not specify the time or mode of such notice, it must be given accord- ing to the requirements of the general statutes of the state upon the subject. 2 3. But the company cannot object that its directors, who have acted as such, were not elected at a meeting properly notified. 3 Nor can the validity of the acts of the directors be collaterally called in question on the ground of irregularity in the notice of the meeting at which they were elected. 4 Where the charter fixes the number of directors, and vacancies occur, the act of the board is not thereby invalidated, provided a quorum still remains. 5 8 Matter of Long Island Railroad, 19 Wend. 37 ; s. c. 2 Am. Railw. C. 453. 3 Sampson v. Bowdoinham Steam Mill Co., 36 Maine, R. 78. Where persons have acted as directors of a railway company, the court will not summarily in- quire into the validity of their appointment. Tindal, C. J., said : " If the share- holders allow parties to act as directors, it may be they have no right to turn round in a court of justice and say, that such parties were not properly elect- ed." The Thames Haven Dock & R. Co. v. Hall, 5 Man. & Gr. 274 - 286. In a late case, Port of London Assurance Company's case, 35 Eng. L. & Eq. 1 78, one registered insurance company agreed to sell its business to another regis- tered insurance company, and a deed of assignment was accordingly executed, whereby the latter company covenanted to indemnify the former against all claims. After the business had been carried on for some time by the purchasing company, that company failed, and both companies were wound up under the Winding-up Acts. On the official manager of the selling company tendering a proof against the purchasing company, in respect of claims satisfied by the sell- ing company, one part of the deed of assignment was produced having affixed to it the seal of the purchasing company, but another part, alleged to have been executed by the selling company, was not forthcoming. Held, first, that after what had taken place, it was unnecessary to determine whether the selling company had executed the purchase-deed, or whether its directors had exceeded their powers in making the sale. Secondly, that where a purchaser has enjoyed the subject-matter of a con- tract, every presumption must be made in favor of its validity. Thirdly, that if all the proceedings on the part of the directors of the pur- chasing company, with reference to the purchase, had not been in strict accord- ance with their own deed of settlement, still, if the contract with the other com- pany was the means of the purchasing company coming into existence, they could not act in contravention of that contract. 4 Chamberlain v. Painesville & Hudson Railw. Co., 15 Ohio N. S. 225. 6 Walford on Railw. 71, 72 ; Thames Haven R. v. Rose, 4 M. & G. 552. VOL, i. 6 *18 82 PROCEEDINGS UNDER THE CHARTER. §23. 4. An election of directors will not be set aside, because tbe inspectors of the election were not sworn as required by the statute. This statute is merely directory, and, so far as third persons are concerned, it is sufficient that the inspectors were elected and entered upon the duties of the office, and became officers de facto. 6 *SECTION VI. Meetings of Directors. 1 . All should be notified to attend. 2. Adjourned meeting still the same. 3. Board not required to be kept full. 4. Usurpations tried by shareholders or courts. 5. Usage will often excuse irregularities. 6. Decisions of majority valid. n. 8. Records of proceedings, evidence. § 23. 1. As a general rule, where corporate powers are vested in certain members, whether the whole body of the shareholders, the directors, or a committee, and the general laws of the state, the charter of the company, or the corporate statutes, contain no directions in regard to assembling the body, it is requisite to give due legal notice to each member. Accordingly, when by the rules of a friendly society the power of electing officers was vested in a committee of eleven, at a meeting of the committee, where ten of the members were present, the eleventh not having received notice, and the defendant was removed from the office of treasurer, and the plaintiff appointed in his stead by a major- ity of votes, it was held that the election was void, although the absent committee-man had, for a considerable period, absented himself from the meetings, and intimated an intention not to attend any more, and although the defendant himself had de- manded a poll at the election, and was now objecting to its validity. 1 6 Matter of Mohawk & Hudson R., 19 Wend. 135 ; s.'c. 2 Am. Eailw. C. 460. 1 Roberts v. Price, 4 C. B. 231. In the com-se of the argument, Cresstcell, J. referred to The King v. Langhorn, 4 Ad. & Ellis, 538, and in giving his opinion said : " This case seems to me directly applicable." In a late case in the House of Lords, Smyth v. Darley, 2 H. L. Cases, 789, 803, it is said : " The election being by a definite body, on a day, of which, till summons, the electors had no notice, they were all entitled to be specially summoned ; and if there were any omission *19 § 23. MEETINGS OF DIRECTORS. 83 ■ 2. But an adjourned general meeting of directors, which is provided for by the general regulations of the board, and is for the transaction of the general business of the company, requires no special notice of either time or place, or of the business to be transacted. 2 * 3. But where the charter of a railway provides that its busi- ness shall be carried on under the management of twelve direc- tors, to be elected in a particular mode, pointed out, and that where vacancies shall occur it shall be lawful for the remaining directors to fill them, it was held that this provision did not require that the board should be always full ; but was merely directory, as to tho mode of filling vacancies. 3 4. Where it is complained that the existing board of directors have usurped their places in violation of the wishes of the ma- jority of the shareholders, the question should be referred to a meeting of such shareholders, 4 or it may be tried upon a quo warranto? 5. But in practice, in this country, it is believed that most of the routine business of railway and other joint-stock commercial companies is transacted through the agency of sub-committees of the board of directors, and that, where the voice of the board is taken, it is more commonly done without any formal assembly of the board. And long-established usage as to particular com- panies, in regard to the mode of conducting an election, has been held of binding force in regard to such company. 6 And to summon any of them, unless they all happened to be present, or unless those not summoned were beyond summoning distance, as, for instance, 'abroad, there could not be a good electoral assembly ; and even an unanimous election by those who did attend, would be void." Post, § 211 ; Great Western R. v. Rush- out, 10 Eng. L. & Eq. 72. 2 Ante, § 21. Wills v. Murray, 4 Exch. 843. But see Reg. v. Grimshaw, 10 Q. B. 747. 3 Thames Haven Dock and Railway Co. v. Rose, 4 Man. & Gr. 552 ; ante, § 21 ; Wills v. Murray, 4 Exch. 843. 4 Post, §211. & Post, §204. 6 Attorney-General v. Davy, cited 1 Vesey, sen. 419. It would savor of bad faith to allow the business of the company to be transacted in a particular mode, and then t© attempt to repudiate the acts of their agents, because the transac- tion proved disadvantageous, when they were in a condition to take the benefit of it if it proved successful. *20 84 PROCEEDINGS UNDER THE CHARTER. § 23. the same course of reasoning might induce courts to sanction a practice, which had become universal from its great convenience, although not strictly in accordance with the principles of the decided cases upon analogous subjects, or the results of a priori reasoning. 6. The decision of a majority of the board of directors is usually regarded as binding upon the company ; and the assem- bling of a majority will be treated as a legal quorum for the transaction of business, unless the charter or by-laws contain some specific provision upon the subject ; 7 and notice to the ab- sent * directors will be presumed unless the contrary appears. The general rule upon this subject is, that the act of a majority of a body of public officers is binding ; but that if they be of private appointment, all must act, and, in general, all must con- cur, unless there is some provision to accept the decision of a majority. In this respect, railway directors come under the former head certainly. The proper distinction upon the general subject seems to be, that where the matter is of public concern, and of an executive or ministerial character, the act of the ma- jority of the board will suffice, although the others are not con- sulted. But where the function is judicial, involving a deter- mination of some definite question, the whole body must be assembled and act together. If the matter is of public concern, the decision of a majority will bind ; but in private concerns, as arbitrations, all must concur. 8 7 Cram v. Bangor House, 3 Fairfield, 354 ; Sargent v. Webster, 13 Met. 497 ; 2 Kent, Comm. 293 and notes ; The King v. Whitaker, 9 B. & C. 648 ; Com- monwealth v. Canal Commissioners, 9 Watts, 466 ; Ex parte Willcocks, 7 Cowen, 402 ; Field v. Field, 9 Wend. 394, 403, where it is held, that in regard to the body of the stockholders, any number who attend is a quorum for doing busi- ness, if the others be properly summoned. But as to the directors, it is requi- site that a majority attend. 2 Kent, Comm. 293 ; Cahill v. Kalamazoo Ins. Co., 2 Doug. (Mich.) R. 124; Holcomb v. N. H. D. B. Co., 1 Stockton, Ch. 457. 8 Green v. Miller, 6 Johns. 39 ; The King v. Great Marlow, 2 East, 244 ; Battye v. Gresley, 8 East, 319 ; Rex v. Coin St. Aldwins, Burr. Settl. Cas. 136 ; The King v. Winwick, 8 T. R. 454. But it has never been held that the entire board of directors must assemble ; it is enough if all be summoned, and a major- ity attend. See note 7. Edgerly v. Emerson, 3 Foster, 555. # If the doings of directors are not recorded, they may be proved by parol. lb. The president *21 §24. QUALIFICATION OF DIRECTORS. 85 7. But where the authority of a quorum of directors is re- quired for the execution of a bond, it must be given at a formal meeting, whereat the members of the quorum are all present at once. 9 *SECTION VII. Qualification of Directors. 1 . One cannot be a contractor and director. 2. May be their banker and director. 3. May be director by virtue of stock mort- 4. Bankruptcy or absence will not vacate office. 5. Company compelled to Jill vacancies in board. §24. 1. By the Companies' Clauses Consolidation Act, 1 it is provided, that no person interested in any contract with the com- pany shall be a director, and no director shall be capable of being interested in any contract with the company ; and if any director, subsequent to his election, shall be concerned in any such contract, the office of director shall become vacant, and he shall cease to act as such. Under this statute it was held, that, if a director enters into a contract with the company, the con- tract is not thereby rendered void, but the office of director is vacated. 2 has a right to vote upon all questions to be determined by the president and di- rectors. McCullough v. Annapolis & Elk Ridge R. 4 Gill, 58. The records of the clerk of a railway company, of the proceedings of the di- rectors, in making calls, may be used as evidence by the company in suits for calls, against one who subscribed for shares, and was one of the grantees of the charter and a director at the time of making such calls, and who had exercised the rights of a shareholder froin the first. White Mountain R. v. Eastman, 34 N. H. R. 124. As to the effect of the records of the doings of the corporation kept by their own officer, being evidence, but not indispensable evidence of such facts, when proved by third parties, see Hudson v. Carman, 41 Me. R. 84 ; Coffin v. Collins, 17 Id. 440 ; Penobscot Railw. v. White, 41 Me. R. 512. See, also, Ind. & Cin. R. v. Jewett, 16 Ind. R. 273. 9 D'Arcy v. Tamar, K. & C. Railw. 12 Jur. N. S. 548. 1 8 & 9 Vict. c. 16. 2 Foster v. Oxford W. & W. R. 14 Eng. L. & Eq. 306. This case is dis- cussed in a later case in the House of Lords. Aberdeen Railway v. Blakie, 23 Law Times, 315. *22 86 PROCEEDINGS UNDER THE CHARTER. § 24. 2. But it has been held, that being a member of a banking company, who were the bankers and treasurers of the railway, and who, as such, received and gave receipts for calls, and paid checks drawn by the directors, will not disqualify one from act- ing as director, but that this clause only applied to such con- tracts as were made with the company in the prosecution of its enterprise. 3 3. Where the qualification of a director consisted in owning a certain number of the shares, the qualification is not lost by a mortgage of the shares. 4 4. Neither the bankruptcy nor absence of a director, and vol- untarily ceasing to act as such, will put an end to his character of director, unless it be so provided in the deed of settlement. 5 5. If shareholders are dissatisfied with the board of directors not being full, that may be a ground of applying for a manda- mus to compel the company to complete the number. 6 3 Sheffield, Ash. & Man. Railw. v. Woodcock, 7 M. & W. 574 ; s. c. 2 Railw. C. 522. 4 dimming v. Prescott, 2 Y. & Coll. Eq. Exch. 488. 6 Phelps v. Lyle, 10 Ad. & Ellis, 113. But if one abscond from his creditors the office is thereby vacated. Wilson v. Wilson, 6 Scott, 540. * Thames Haven Dock & Railway v. Rose, 3 Railw. C. 177, s. c. 4 Man. & Gr. 552. Maule, J. Mozley v. Alstoa,- 1 Phillips, 790. By the Lord Chan- cellor. § 25. PREROGATIVE FRANCHISES. 87 ^CHAPTER V. PREROGATIVE FRANCHISES. 1. Control of internal communication in a state a prerogative franchise. Such a grant confers powers pertaining exclusively to sovereignty, as taking tolls, and the right of eminent domain. §25. 1. Railways possess also many extraordinary powers or franchises which partake more or less of the quality of sover- eignty, and which it is not competent for the legislature even to delegate to ordinary corporations. These are sometimes called the prerogative franchises of the corporation. They exist in banks, which practically supply the currency of the country, or its representative, and railways, which have already engrossed the chief business of internal communication in this country, and almost throughout the civilized world. And both currency and internal communication between different portions of a state are exclusively the prerogatives of sovereignty. 2. In saying that it is not competent for the legislature to con- fer prerogative franchises upon all corporations, nothing more is intended than that these prerogative franchises do not appertain to all the operations of business, and must therefore of necessity be limited to those persons, whether natural or artificial, which are occupied in matters of a sovereign or prerogative character, and which thus render an equivalent for the franchises conferred. 1 This subject will be discussed more in detail under the titles of Tolls and Eminent Domain. 1 State v. Boston, Concord, & Montreal R. Co. 25 Vt. R. 433, 442, 443. But the right to build and use a railway, and take tolls or fares, is a franchise of the pre- rogative character, which no person can legally exercise without some special grant of the legislature. But it is competent for the legislature to confer this franchise upon a foreign corporation, so as to enable it to take land for the pur- pose of constructing a public improvement in the state. Morris Canal & Bank- ing Co. v. Townsend, 24 Barb. 658. And what title shall be acquired by such foreign corporation, and whether the proposed amendment will be likely to prove beneficial to the citizens of the state, is a question solely within the dis- cretion of the legislature. lb. *23 BY-LAWS AND STATUTES. § 26. ^CHAPTER VI. BY-LAWS AND STATUTES. SECTION I. Power of making By-Laws or Statutes. 1 . May control conduct of passengers. 2. Must be reasonable and not against law. 3. Power may be implied, where not express. 4. Not required to be in any particular form 7. Company may demand higher fare if paid in cars. 8. Public statutes control by-laws. 9. Cannot impose penalty. unless by special provision. 10. Cannot refuse to be responsible for bag- 6. Model code of by-laws framed by board of gage, trade in England. § 26. 1. It is incident to all corporations to enact by-laws or statutes for the control of its officers and agents, and to regulate the conduct of its business generally. And in the case of rail- ways this includes the regulation of the conduct of passengers and others who are in any way connected with them in business, although not their agents. 2. This power is subject to some necessary limitations. Such by-laws must not infringe the charter of the company or the laws of the state, must not be unreasonable, and must be within the range of the general powers of the corporation. 1 And the ques- tion, whether reasonable or not, is to be determined by the jury under instructions from the court, being a mixed question of law and fact. 2 But in a recent case in New Jersey 3 it was de- 1 Elwood v. Bullock, 6 Q. B. 383 ; Calder Navigation Co. v. Pilling, 14 M. & W. 76 ; Child v. Hudson Bay Co., 2 Peere Wms. 207 ; Angell & Ames, c. 10 ; 2 Kent, Comm. 29G ; Davis v. Meeting H. in Lowell, 8 Met. 321. In a recent case in Kentucky it is said the power of a corporation to make by-laws is limited by the nature of the corporation and the laws of the country. It can make no rule contrary to law, good morals, or public policy. Sayre v. Louisville Union Benevolent Association, 1 Duvall, 143. 2 Day v. Owen, 5 Mich. R. 520. 3 Ayres v. Morris & Essex Railw. Co., 5 Dutcher, 393. *24 § 26. POWER OF MAKING BY-LAWS OR STATUTES. 89 cided that the question whether the regulation of a corporation affecting third persons is reasonable is a question of fact ; but the validity of a by-law of a corporation, which affects only its members, is a question of law to be determined by the court. The general powers of business corporations to enact by-laws was extensively and learnedly discussed in a somewhat recent case which passed through the Queen's Bench, the Exchequer Chamber, and was finally determined in the House of Lords. 4 The case turned mainly upon the reasonableness of the by-law, which excluded any person who had become bankrupt or noto- riously insolvent from becoming one of the governing body of the company. The provision of the by-law was held entirely reasonable ; but that having admitted the party to the office, he could not be removed without formal proceeding upon notice and hearing. And where one part of a by-law is reasonable it may stand, although connected with another part which is not reasonable. 5 3. By-laws in violation of common right are void. The power to make by-laws is usually given in express terms in the charter. And where such power to make by-laws is given in the charter upon certain subjects to a limited extent, this has been regarded as * an implied prohibition beyond the limits expressed, upon the familiar maxim Expressum facit cessare taciturn. 1 4. By-laws, unless by the express provisions of the charter or general statutes of the state, are not, in this country, required to be enacted or promulgated in any particular form, but only to be enacted at some legal meeting of the corporation. But in Eng- land it is generally considered requisite that by-laws be made under the common seal of the corporation, and that in regard to railways, by-laws affecting those who are not officers or servants 4 Reg. v. Saddlers' Company, G Jur. N. S. 1113 ; s. c. 7 id. 138 ; s. c. 9 id. 1081 ; s. c. 4 B. & S. 1059 ; s. c. 10 Ho. Lds. Cas. 404. 5 Reg. v. Lundie, 8 Jur. N. S. G40. 6 Hayden v. Noyes, 5 Conn. R. 391 ; Adley v. The Whitstable Co., 17 Vesey, 315; Clark's case, 5 Coke, 64. When the penalty of a by -law. is imprison- ment, it is void as against Magna Charta. But such power may be given by statute. 7 Child v. Hudson B. Co., 2 Peere Wms. 207. * 25 00 BY-LAWS AND STATUTES. § 26. of the company should have the approval of the Board of Trade or Railway Commissioners. 8 5. By many of the special railway charters in England, and by the Companies' Clauses Consolidation Act of 1845, it is pro- vided that railway companies may make by-laws under their com- mon seal " for the purpose of regulating the conduct of the offi- cers and servants of the company, and for the due management of the affairs of the company in all respects whatever." And they have power to enforce such by-laws, by penalty, and by im- prisonment for the collection of such penalty. But a by-law re- quiring a passenger, not producing or delivering up his ticket, to pay fare from the place of the departure of the train, was held not to be a by-law, imposing a penalty, and therefore not justify- ing the imprisonment of such passenger. 9 6. The statute requires a copy of such by-laws to be furnished every officer and servant of the company, liable to be affected thereby. The code of by-laws framed by the Board of Trade in England for the regulation of travel by railway, and generally adopted there, is certainly very judicious ; and if some similar one could be adopted and enforced here, it would accomplish very much towards security, sobriety, and comfort, in railway travelling, and tend to exempt the companies from much annoy- ance and very often from loss. 10 8 Walford, 249 ; Hodges, 552, 553. 9 Chilton v. London & Croydon R., 16 M. & W. 212 ; s. c. 5 Railw. C. 4. Parke, B. says : " This is not the case of a penalty, but the mere demand of a fare. Any passenger who does not, at the end of his journey, produce his ticket, may have broken his contract with the company, and be liable to pay his full tare from the most remote terminus. But this is not a penalty or forfeiture, under section 163, giving a right to arrest for non-payment of a penalty or forfeiture." See, also, the opinion of Rolfe, B., from which it appears that the by-law was considered valid. 10 Hodges, 453. " 1. No passenger will be allowed to take his seat in or upon any of the company's carriages, or to travel therein upon the said railway, with- out having first booked his place and paid his fare. Each passenger booking his place will be furnished with a ticket, which he is to show when required by the guard in charge of the train, and to deliver up before leaving the company's premises, upon demand, to the guard or other servant of the company duly au- thorized to collect tickets. Each passenger not producing or delivering up his ticket will be required to pay the fare from the place whence the train original- ly started. § 26. POWER OF MAKING BY-LAWS OR STATUTES. 91 * 7. In a recent case in Vermont, it was held, that railway com- panies have the power to make and enforce all reasonable regu- lations in regard to the conduct of passengers, and to discrimi- nate between fares paid in the cars and at the stations, and to remove all persons from their cars who persist in disregarding such regulations, in a reasonable manner and proper place, al- though between stations. 8. But this may be controlled as to existing railways even, by * general legislation of the state. And where a statute gave all railways the power to remove those who violated any of the by- " 2. Passengers at the road stations will only be booked conditionally, that is to say, in case there should be room in the train for which they are booked ; in case there shall not be room for all the passengers booked, those booked for the longest distance shall have the preference ; and those booked for the same dis- tance shall have priority according to the order in* -which they are booked. " 3. Every person attempting to defraud the company, by riding in or upon any of the company's carriages, without having previously paid his fare, or by riding in or upon a carriage of a higher class than that for which he has booked his place, or by continuing his journey in or upon any of the company's carriages beyond the destination for which he has paid his fare, or by attempting in any other manner whatever to evade the payment of his fare, is hereby subjected to a penalty not exceeding forty shillings. " 4. Smoking is strictly prohibited both in and upon the carriages, and in the company's stations. Every person smoking in a carriage is hereby subjected to a penalty not exceeding forty shillings ; and every person persisting in smoking in a carriage or station, after being warned to desist, shall, in addition to incur- ring a penalty not exceeding forty shillings, be immediately, or, if travelling, at the first opportunity, removed from the company's premises, and forfeit his fare. " 5. Any person found in the company's carriages or stations in a state of in- toxication, or committing any nuisance, or otherwise wilfully interfering with the comfort of other passengers, and every person obstructing any of the company's officers in the discharge of their duty, is hereby subjected to a penalty not ex- ceeding forty shillings, and shall immediately, or, if travelling, at the first oppor- tunity, be removed from the company's premises and forfeit his fare. " 6. Any passenger cutting the linings, removing or defacing the number- plates, breaking the windows, or otherwise wilfully damaging or injuring any of the company's carriages, shall forfeit and pay a sum not exceeding £ 5 in addi- tion to the amount of damage done." " Note. — Persons wilfully obstructing the company's officers, in cases where personal safety is concerned, are liable, under the 3 & 4 Vict. c. 97, section 16, to be apprehended and fined £5, with two months' imprisonment in default of payment." * 26, 27 92 BY-LAWS AND STATUTES. § 26. laws or regulations of the company from their cars, at the regu- lar stations, this was held to carry an implied prohibition from removing such persons at other points. 11 And where one refuses to pay fare, and the train is stopped for the purpose of putting him off the train, at a dwelling-house, as by the statute of New York is allowed, the right of the conductor is not affected by a subsequent offer to pay fare. 12 So, too, one may be ejected from the cars by the conductor for disorderly conduct, and in justifi- cation, it is competent to prove any improper conduct during the entire passage, and this cannot be controverted by general evi- dence of the good reputation of the person for sobriety. And one may be expelled, also, for refusing to surrender his ticket to the conductor on request, in conformity with the general regula- tions of the company. 13 9. But it has been held, that a general power to make by-laws for the regulation of the use of a canal, will not justify the pro- prietors in closing the navigation of the canal on Sundays, 14 nor in making by-laws subjecting the shares to forfeiture for nonpay- ment of calls, unless that power is expressly given by the charter or by statute. 15 10. And a by-law declaring that the company would not be responsible for a passenger's baggage, unless booked and the car- riage paid, is bad, as inconsistent with the general law, allowing railway passengers to carry a certain amount and kind of bag- gage. 16 11 Stephen v. Smith, 29 Vt. R. 160 ; Chicago, Burlington & Quincy R. v. Parks, 18 111. R. 460. See late case in New Hampshire, in ■which it is held, railways may lawfully discriminate between fare paid in the cars and at the stations. Hilliard u. Goold, 34 N. H. R. 230, Post, § 28, n. 17. Post, § 160. 12 People v. Jillson, 3 Parker, C. R. 234. 13 People v. Caryl, 3 Parker, C. R. 326. 11 Calder Nav. Co. v. Pilling, 14 M. & W. 76 ; s. c. 3 Railw. C. 735. But it is questionable whether this case is maintainable, in this country, upon any such grounds. 13 Matter of Long Island Railw. 19 Wend. 37 ; s. c. 2 Am. Railw. C. 453. 10 Williams v. Great Western Railway, 28 Eng. L. & Eq. 439. But it seems somewhat questionable, whether the principle of this decision can ulti- mately be maintained. It seems to be no unreasonable abridgment of the right of a passenger to carry a certain weight and kind of baggage, to require it to be booked and carriage paid. § 27. BY-LAWS REGULATING STATIONS AND GROUNDS. 93 11. The members of a joint-stock company are affected by all binding statutes of the corporation from the time of their enact- ment, without any formal notice of their existence. And all persons legally affected by such statutes, rules, or by-laws of the corporation, must conform to their requirements from the time they become aware of their existence. 17 SECTION II. By-Laws regulating' the use of stations and grounds. 1. Mai/ exclude persons without business. ! 4. Probable cause will justify. 2. May regulate the conduct of others. 5. In civil suit must prove violation of 3. Superintendent may expel for violation of \ rules. rules. §27. 1. Questions have sometimes been made, in regard to the right of railway companies to exclude persons from their grounds, who had no business to transact there, connected with the * company, or to establish regulations or by-laws to govern the conduct of such persons as had occasion to come there, and to exclude others. But, upon the whole, there seems little ground to question the right. 1 2. A railway corporation has authority to make and carry into effect reasonable regulations for the conduct of all persons using the railway, or resorting to its depots, without prescribing such regulations by formal by-laws ; and the superintendent of a rail- way station, appointed by the corporation, has the same author- ity, by delegation. 3. Such superintendent may exclude from the stations and grounds persons who persist in violating the reasonable regula- tions prescribed for their conduct, and thereby annoy passengers, or interrupt the officers and servants of the company in the dis- charge of their duty. Thus, where the entrance of innkeepers and their servants into a railway station to solicit passengers to 17 Woodfin v. Ins. Co., 6 Jones' Law, 558. 1 Barker v. Midland Railw. 36 Eng. L. & Eq. 253 ; Commonwealth v. Power, 7 Met. 596 ; s. c. 1 Am. Railw. C. 389 ; Hall v. Power, 12 Met. 482. *28 04 BY-LAWS AND STATUTES. § 27. go to their houses, produces such effect, they may he excluded from coming within the station ; and if, after notice of a regula- tion to that effect, they attempt to violate it, and after notice to leave, refuse to do so, they may he forcibly expelled by the ser- vants of the company, using no unnecessary force. 4. And where an innkeeper had been accustomed to annoy passengers in this manner, and had been informed by the super- intendent of the station that he must do so no more, but still continued the practice, and afterwards obtains a ticket for a pas- sage in the cars, with the bona fide intention of entering the cars as a passenger, and goes into the station on his way to the cars, and the superintendent, believing he had entered for his usual purpose, orders him to go out, and he does not exhibit his ticket, nor give notice of his real intention, but pushes forward towards •the cars, and the superintendent, and his assistants remove him from the station, using no unnecessary force, the removal is jus- tifiable, 2 and not an indictable offence. 2 5. But the superintendent cannot remove a person from the station and grounds of the company, merely because such per- son, in the judgment of the superintendent, and without proof of the fact, violated the regulations of the company, or conducted himself * offensively towards the superintendent. 3 And it was said if such person is removed for an alleged violation of the regulations of the company, and it finally is shown that he did not in fact violate any of such regulations, he may recover dam- ages of the superintendent of the station by whose order he was removed, notwithstanding such superintendent acted in good faith. 3 And in such case, it is not competent to show that the plaintiff had been guilty of former violations of other regula- tions of the company. 3 2 Commonwealth v. Power, 7 Met. 596 ; Markhani v. Brown, 8 N. Hamp. R. 523. 3 Hall v. Power, 12 Met. 482, s. c. 1 Am. Railw. C. 410. There is an appar- ent discrepancy in the manner of stating the point of the decision of this case, and that of The Commonwealth v. Power, 7 Met. 596, in regard to defend- ant bein<* justified, if he acted in good faith, upon probable cause, which does not seem to be warranted, by any recognized distinction, between a civil suit, for damages, and a public prosecution for assault and battery, but the court evi- dently intend no distinction in the cases. The law is well stated, by Shaw, Ch. *29 § 27. BY-LAWS REGULATING STATIONS AND GROUNDS. 95 6. Under the English statute of 17 & 18 Vic., requiring among other things that the superior courts of Westminster J., in the former ease, 7 Met. 602 : " We are therefore of opinion, that upon the evidence detailed in the judge's report, the jury should be instructed in a man- ner somewhat as follows: That if Power had been placed in charge of the depot bj r the corporation, as superintendent, he had all the authority of the corpora- tion, both as owners and occupiers of real estate, and also as carriers of passen- gers, incident to the duty of control and management : That this power and au- thority of the corporation extended to the reasonable regulation of the conduct of all persons using the railroad, or having occasion to resort to the depots, for any purpose : That this power was properly to be executed by a superintendent, adapting his rules and regulations to the circumstances of the particular depot under his charge ; and that it was not necessary that such regulations should be prescribed by by-laws of the corporation : That the opening of depots and plat- forms for the sale of tickets, for the assembling of persons going to take passage, or landing from the cars, amounts in law to a license to all persons, prima facie, to enter the depot, and that such entry is not a trespass; but that it is a license conditional, subject to reasonable and useful regulations ; and, on non-compli- ance with such regulations, the license is revocable, and may be revoked either as to an individual, or as to a class of individuals, by actual or constructive no- tice to that effect : That if the platform, as part of the depot, is appropriated to and connected with the entrance of passengers into the cars, and the exit of passengers from the cars, and for the accommodation of their baggage, and if the soliciting of passengers to take lodgings in particular public-houses, by the keepers of them or their servants, is a purpose not directly connected with the carriage of passengers by the railroad, on their entrance into or exit from cars; that if, when urged with earnestness and importunity, it is an annoyance of pas- sengers, and interruption to their proper business of taking or leaving their seats in the cars, and procuring or directing the disposition of their baggage ; or if the presence of such persons, for such a purpose, is a hinderance and interruption to the officers and servants of the corporation, in the performance of their re- spective and proper duties to the corporation, as passenger-carriers; then the prohibition of such persons from entering upon the platform, is a reasonable and proper regulation, and a person who, after actual or constructive notice of such regulation, violates or attempts to violate it, thereby loses his license to enter the depot ; that such license as to him may be revoked ; and if, upon notice to quit the depot, he refuses so to do, he may be removed therefrom by the superintend- ent and the persons employed by him ; and if they use no more force than is necessary for that purpose, such use of force is not an assault and battery, but is justifiable : that as to the circumstances of the present case, if the superin- tendent had issued a circular, giving notice to all innkeepers and landlords that he had prohibited them from entering the depot to solicit persons to go to their respective houses as guests, and if this notice came to Hall, and he afterwards, and after special notice to him personally, had attempted to violate this prohi- bition, and solicit passengers : and if, upon the particular occasion, he gave no 96 BY-LAWS AND STATUTES. § 27 Hall shall enforce the duty of railway companies in regard to their traffic in goods and passenger transportation, it was held a proper ground for granting a rule to show cause why an injunction should not issue, that at one of the stations of the company, where an important junction with other roads occurred, no covered place was provided for the accommodation of the passen- gers. 4 But the English Railway Traffic Act does not justify the courts in requiring the companies to make the same charges, or to afford the same facilities in regard to return tickets of a particular class, on one of their branches, which they do upon others. 4 To constitute inequality of charge, it must be for pass- ing over the same line, or the same part of the line. 4 7. To justify the courts in interfering to require the compa- nies constituting a continuous line to run through trains, it must be shown that public convenience requires it, and that it can reasonably be done. 5 And they will not interfere in such cases where there is another route where through tickets may be ob- tained, although somewhat longer, no additional cost or serious loss of time being thereby incurred, and there being no general complaint of public inconvenience on that account. 5 8. A railway freight station or warehouse kept by a railway company for the storage of goods transported by them, is not notice of coming for any other purpose ; and if the defendant Power met him on his way to the platform, told him he must not go there, laid his hands on him, and ordered him to leave the depot, without any inquiry as to the purposes of Hall, and Hall made no reply, but pressed forward and attempted to reach the platform, in spite of the efforts of Power ; this was strong prima facie evidence that he was going there with intent to solicit passengers, in violation of the no- tice and revocation of license ; and that if he gave no notice of his intention to enter the car as a passenger, and of his right to do so ; and if Power believed that his intention was to violate a subsisting reasonable regulation ; then he and his assistants were justified in forcibly removing him from the depot : That if Hall gave no notice of his .having a ticket, of his intention and purpose to enter the cars as a passenger, and of his right to do so, and that Power had no notice of it, then Hall could not justify his conduct, and make Power a wrongdoer, by proving the possession of such a ticket, or of his intent to go in the cars to Rich- mond, as a passenger ; and that he was to be considered as standing on the same footing as if he had not possessed such ticket." 4 Caterham Railw. Co. r. London & Br. Railw. Co., 40 Eng. L. & Eq. 259. s. c. 1 C. B. (X. S.) 410. 6 Barret v. Great Northern Railw., 1 C. B. (N. S.), 423. §28. BY-LAWS AS TO PASSENGERS. 97 exempt from the process of search warrant under the statute against keeping and sale of spirituous liquors ; nor is it necessary that such warrant should be executed during the usual business hours, or that the officer should consult the person who has charge of the station. ♦SECTION III. By-Laws as to Passengers. 1 . By-laws as statutes. 2. As mere rules, or regulations. 3. Requiring larger fares, for shorter dis- tances. 4. Requiring passengers to go through in same train. 5. Arrest of passenger, by company's ser- vants. 7. Company liable for act of servant. 8. By-law must be published. 9. Excluding merchandise from passenger- trains. 10. Discrimination between fares paid in cars and at stations. 1 1 . Liability for excess of force. 12. Officer de facto may enforce rules of company. 13. Company cannot enforce rule against pas- senger, when in fault themselves. § 28. 1. A distinction is sometimes made between by-laws, and orders, or regulations, the former being supposed, in strict- ness of language, to have reference exclusively to the govern- ment of their own members, and of their corporate officers. 1 And it is true that such other ordinances, as any owner of the buildings and grounds, * about a railway station, employed in car- rying passengers, might find it convenient to establish, are cer- tainly not what is ordinarily understood by the by-laws, or statutes, of the corporation. 2. But in the English cases they are both called by-laws. 2 6 And. Railw. Co. v. Richards, 41 Me. R. 233. 1 Shaw, Ch. J., in Commonwealth v. Power, 7 Met. 601. 2 Chilton v. The London & Croydon Rail., 5 Railw. C. 4. It would seem from the opinion of Parke, B., that the by-law was regarded as valid, but as imper- fect, in not subjecting the passenger to a penalty in terms. The other judges doubted whether the act was intended to give the company power to imprison the plaintiff", or any one, except for some offence against the act. But all seemed to concur in the opinion that the passenger was bound to comply with the regu- lation, or submit to the alternative. State v. Overton, 4 Zab. 435. VOL. I. 7 *30, 31 98 BY-LAWS AND STATUTES. § 28. Thus, a by-law, that each passenger, on booking his place, should be furnished with a ticket, to be delivered up before leaving the company's premises, and that each passenger, not producing or delivering up his ticket, should be required to pay fare from the place whence the train originally started, was held not to be a by-law imposing a penalty. 2 And that therefore the non-produc- tion of the ticket, with which a passenger had been furnished, and his refusal to pay fare from the place whence the train started, did not justify his arrest, but only rendered him liable to pay fare from the place whence the train started. 3. But in a late English case, 3 where the company had made a legal by-law, that any passenger, who should enter a carriage of the company, without first having paid his fare, should be subjected to a penalty not exceeding 405., a passenger, desiring to go to Diss station, where the fare was Is. , procured a ticket for Norwich, a more distant station on the line, but where the fare was but 55. , in consequence of competition, and entered the carriage accordingly, and at Diss offered to surrender his ticket, but refused to pay the difference in fare, he was prosecuted for the penalty, and a majority of the Court of Queen's Bench held he was not liable, on the ground that he had paid his fare before entering the carriage. Lord Campbell said, " I cautiously ab- stain from expressing any opinion, as to the power of the com- pany to make special regulations, or by-laws, so as to enforce larger fares, for shorter distances." " Had not Frere, within the meaning of the by-law, paid his fare, before he entered the carriage ? I think he had. He had paid the full fare from Col- chester to Norwich, all that was required of him ; and he cannot be said to be a person who had entered the company's carriage without payment of fare." i 3 Reg. v. Frere, 29 Eng. L. & Eq. 143. * But the argument of Lord Campbell on this point does not seem altogether satisfactory. Whether the passenger had paid his fare depended upon the va- lidity of the by-law, and could not be fairly determined upon any other basis, it would seem. Frere had paid fare to Norwich, but had not paid fare to Diss, unless the by-law was void ; so that the validity of the by-law did seem to be necessarily involved in the decision. And the decision of the court, although not professing to do so, did virtually disregard it. For if the by-law was valid, Frere had no more paid his fare than if he had taken a ticket to a station short § 28. BY-LAWS AS TO PASSENGERS. 99 * 4. It has been held that a regulation requiring passengers to go through, in the same train, and that if one do not, requiring fare for the remainder of the route is valid. 5 of his destination. And if the by-law meant anything sensible, it could only mean, having paid fare to his destination. Any other construction looks like an evasion. ' 5 Cheney v. Boston & Maine Railw., 11 Met. 121 ; s. c. 1 Am. Railw. C. COL In this case the passenger, when he bought his ticket, did not know of the regu- lation, but was informed of it in the cars, and his money offered to be refunded, deducting what he had travelled ; but he refused to make the arrangement, and demanded his ticket, in exchange for the check which had been given him, marked " good for this trip only." He stopped by the way, and went on the same day in the next train ; and when he presented his check, it was refused, and fare demanded, which he was obliged to pay. The court held the passen- ger could not recover the money of the company, and that it made no difference whether the plaintiff were aware of the regulation or not, at the time he pur- chased his ticket. He was bound to inform himself, or accept of the ticket, for what it entitled him to demand, by the rules of the company. This subject is a good deal discussed in a late case in New Jersey, and a sim- ilar result arrived at. It is there said that the company may discriminate between way and through fare, unless prohibited by law. State v. Overton, 4 Zab. 434. In Pier v. Finel, 24 Barb. 514, where a person was put off the cars of a railway company for refusal to pay fare, having, and offering to the conductor, a ticket of the company, dated a few days before, and marked " good for this trip only," but unmutilated, it being the practice of the conductors upon that road, where a ticket had been used, to give it a mark ; it was held that the ticket was prima facie evidence that the holder had paid the regular fare for it, and of his right to be transported, at some time, between the places specified, on some passenger train ; and if unmutilated, the presumption was, that it had never been used, and that it imposed upon the company the duty to so transport the holder. It was also held that the indorsement, " good for this trip only," had reference to no particular trip, or any particular time, but only to some one continuous trip. That the passenger might demand a passage, as well on a subsequent day as the one upon which the ticket bore date, and was issued. This decision seems to us not precisely to meet the whole question involved in the case, that is, whether such a regulation, as was claimed to be evidenced by the ticket and the indorsement, was a valid and binding regulation. There can be no doubt such a regulation exists, upon many of the roads, in this coun- try, and that such a ticket is understood, by the community generally, as en- titling the holder only to a passage on that day, at most, if not in the very next train. We very readily perceive that the form of the ticket is susceptible of the con- struction put upon it by the court. But as we are satisfied that is not the un- derstanding of those who issue such tickets, or of those who buy them, as a gen- eral thing, we should have been gratified to- see the main question grappled with. *32 100 BY-LAWS AND STATUTES. § 28. And where the ticket was marked " good only two days after date," it was held to be evidence of a contract to that effect We do not intend to intimate any question of the general soundness of the views expressed in this case, upon what we regard as the true construction of the ticket. We are inclined to think they are sound. For it seems to us to be con- trary to the first principles of justice and equity, that if the passenger is, for suf- ficient cause, delayed, or hindered from going, according to his expectation, at the time he pays his fare, that he should thereby lose all benefit of the payment when he does desire to go. The company may not be bound to refund the money, but they certainly are bound, upon general principles, to allow the hold- er of the ticket the benefit of his unused portion of it, deducting, of course, any loss, or inconvenience to them, by reason of the contract not being carried into effect, according to its terms. And any regulation of the company, which should deprive the passenger of this benefit, would operate a forfeiture, which no court of justice will favor, where the passenger is not in fault. It seems, in principle, to be controlled by the rule of law applied to work done upon the company's road, but not according to the contract, and which, nevertheless, the company are benefited by, to a certain extent. In such cases the company must pay for the work, at its value to them, that is, deducting all losses, in consequence of it not being done as stipulated. Post, § 113, pi. 4. So, also, if the passenger refuse to surrender his ticket in exchange for the conductor's check, according to the regulations of the company, and at any point of the route leave the cars, without surrendering his ticket, he is liable to pay fare for the distance he rode, or upon his refusal to surrender his ticket, or to pay fare, the conductor is justified in expelling him from the cars. Northern Rail- road v. Page, 22 Barb. 130. But passengers are not obliged to surrender their tickets without having a check in exchange by which they may be able to show that they have paid fare. State v. Thompson, 20 New H. R. 250. In Hibbard v. New York & Erie Railway, 1 Smith, 455, New York Court of Appeals, it was held, that a regulation, made by a railway company, requiring passengers to ex- hibit their tickets whenever requested by the conductor, and directing those who refused to do so to be expelled from the cars, was reasonable and valid, and that passengers were bound to conform to it, and forfeited all right to be carried further by refusal to do so. And it was further held, that the binding force of such a regulation was matter of law to be decided by the court, and that under such a regulation, where a passenger refused, on request, to exhibit his ticket a second time, the train having in the mean time passed a station, it was error in the court to charge the jury, that the passenger was bound to exhibit his ticket, when reasonably requested, and that if the conductor knew he had paid his fare he had no right to expel him from the cars. It is intimated in this case, that one who has thus forfeited his right, cannot regain it by exhibiting his ticket after the train is stopped for the purpose of putting him off. And also, that the company would not be liable if the conductor put a wrong construction upon the regulation, and thus wrongfully expelled a passenger, or if he were guilty of an excess of force. But see § 169, post. § 28. BY-LAWS AS TO PASSENGERS. 101 between the railway and the purchaser, and to be of no force after the expiration of the term. 6 And where the regulations of the company allow the conductors, by making a memorandum on a ticket, to permit the passenger to stay over and pass upon another train, and one stayed over without procuring such mem- orandum, it was held that another conductor, to whom he pre- sented his ticket in attempting to pass at a subsequent time, was justified in demanding fare, and putting the passenger off the train upon his refusal to pay. 7 5. In one case, 8 where the plaintiff, upon the information of the station-clerk that he might return at a given hour upon an * excursion ticket, purchased such ticket and took the train named by such clerk to return, but the train did not pass through ; and at the place where it stopped the station-clerk de- manded 2s. 6d. more, saying he should not have taken that train, payment being refused, the superintendent took the plaintiff into custody. The plaintiff's attorney having written the secretary of the company, asking compensation, he requested to be furnished with the date of the transaction, and promised to make inquiries. He also stated verbally that it was an awkward business, and the blame would fall upon the station-clerk who gave the plaintiff the false information, and offered to return the 2s. Qd. It was held that, as there was no evidence of the authority of the defendants to make the arrest, and none of their having expressly or im- pliedly authorized or ratified it, it must be regarded as the mere tortious act of the servant, for which he alone was responsible. 6 Boston & Lowell Railway Co. v. Proctor, 1 Allen, 2G7. 7 Beebe v. Ayres, 28 Barb. 275.- 8 Roe v. Birkenhead, Lancashire, and Cheshire Junction Railw., 7 Eng. L. & Eq. 546 ; s. c. 6 Railw. C. 795. And it has been held that a steamboat proprie- tor might exclude one from his boat, while employed in carrying passengers, if such person was the agent of a rival line of stages to that which, by contract with the proprietor, carried in connection with his boats, the plaintiff's object being, at the time, to solicit passengers to go by the rival line of stages ; and the jury having found that the contract was bond fide and reasonable, and not en- tered into for the purpose of an oppressive monopoly, and that the regulation excluding plaintiff was ' necessary in order to carry the contract into effect. Jencks v. Coleman, 2 Sumner, 221. But a contract not to carry passengers coming by a particular line will not excuse the carrier from carrying such pas- senger. Bennet v. Dutton, 10 N. H. R. 481. *33 102 BY-LAWS AND STATUTES. § 28. 6. But in a somewhat similar case, 9 in the Exchequer Cham- ber, -where the plaintiff below had been taken into custody by a railway inspector of the defendants, charged with having no ticket, refusing to pay fare, intoxication, and assaulting the in- spector, at the hearing before the magistrate, the solicitor of the company attended to conduct the proceedings ; and it was held that such attendance was no ratification by the company, it not appearing that the facts were known to the company. These cases afford more latitude for corporations to escape from lia- bility for the acts of their agents and servants, while employed in the prosecution of their business, than is common in this country. 10 7. But there are many cases in this country where it has been held that trespass will not lie against a corporation for the act of their agents ; n but this is not the prevailing rule here, where the servant acts within the apparent scope of his authori- ty, and where his acts would bind the principal, being a natural person. 8. An English railway company 12 having power by statute to * make by-laws which were to be painted upon a board and hung up at the stations, and to be binding upon all parties, made, among others, a by-law that " first-class passengers shall be allowed one hundred and twelve pounds, and second-class pas- sengers fifty-six pounds luggage each, and that the company will not be responsible for the care of the same unless booked and paid for accordingly." It did not appear that the plaintiff knew of the by-law, or that it had been posted up as required. The plaintiff became a passenger, and gave his luggage to the ser- 9 The Eastern Counties Railway v. Broom, 2 Eng. L. & Eq. 406 ; s. c. 6 Railw. C. 743. 10 Post, § 225 and notes. See, also, post, § 160, 169. And in Coppin v. Braithwaite, 8 Jurist, 875, it is said to have been ruled by Rolfe, B., at Nisi Prius, that a carrier having received a pickpocket as a passenger on board his vessel, and taken his fare, he cannot put him on shore at any intermediate place, so long as he is guilty of no impropriety. 11 Philadelphia G. & N. Railw. Co. v. Wilt, 4 Wharton, 143 ; s. c. 2 Am. Railw. C. 251 ; Orr v. Bank of U. States, 1 Ohio, 36 ; Foote v. City of Cincin- nati, 9 Ohio, 31. Per Comstock and Brown, JJ., in Hibbard v. N. Y. & Erie KauV. Co., 15 N. Y. Court of App. 455. 12 Great Western R. v. Goodman, 1 1 Eng. L. & Eq. 546. *34 § 28. BY-LAWS AS TO PASSENGERS. 103 vants of the company, and it had been stolen. It was held that the company were liable, unless they showed the by-law hung up at the stations, as required by the statute, or else brought home to the knowledge of the plaintiff. 9. A by-law excluding merchandise from the passenger-trains, and confining its transportation to the freight-trains, was held reasonable. The company are not bound to carry a passenger daily upon his paying fare, when his trunk, or trunks, contain merchandise, money, and other valuable matter known as " ex- press matter." 13 10. In a very recent case u in Connecticut, it was held, by a divided court, that where a railway company established and gave notice of a discrimination of five cents between fares paid in the cars and at the stations, the regulation was valid, and that where a passenger refused to pay the additional five cents in the cars, the conductor might lawfully put him out of the cars, using no unnecessary force. Upon the trial of an action for such expulsion, it was held that the plaintiff was not entitled to re- cover upon proof, that he went to the ticket-office of the com- pany a reasonable time before the train left, to procure a ticket ; that the office was closed, and so remained till the train departed, and that he so informed the conductor, before his expulsion from the cars. 13 Merrihew v. Milwaukie & Mississippi R. 5 Law Reg. 364. 14 Crocker v. New London, Willimantic & Palmer Railw., 24 Conn. R. 249. The court were so nearly equally divided in the decision of this case, that it can- not be regarded as much authority, in itself. The leading propositions in the text were maintained, by the Chief Justice and one other judge, and dissented from by two other judges. The only point of doubt seems to be the duty of the company, in making such discrimination, to give reasonable opportunity to passengers to obtain tickets, at the lowest rate of fare, which seems just and reasonable, and in accordance, we believe, with the generally received opinion upon the subject, and the one we should have been inclined to adopt. In Hilliard v. Goold, 34 N. H. R. 230, it was held, that a uniform discrimination between fares paid in the cars, and at the stations, not exceeding five cents, was reasonable and legal, and a passenger who had not procured a ticket, and refused to pay the additional five cents de- manded of him, for fare paid in the cars, was liable to be expelled. Chicago, Burlington, & Quincy Railw. v. Parks, 18 Illinois R. 460. And it is here held that where the passenger only pays from station to station, the additional five cents may be required at each payment. 104 BY-LAWS AND STATUTES. § 28. * The following propositions are maintained in the opinion of the court : — 1. That the defendants, as common carriers, were under no legal obligation to furnish tickets, or to carry passengers for less than the sum demanded, if the fare was paid in the cars. 2. That the plaintiff's claim rested solely upon the assump- tion, that the defendants had undertaken to carry for the less sum, on certain conditions, which they had themselves defeated. 3. That the regulation did not constitute a contract, but a mere proposal, which they might suspend, or withdraw at any time. 4. That such proposal was withdrawn by closing the defend- ant's office, and the retirement of their agent therefrom. 5. The proposition being withdrawn, the parties were in the same condition as before it was made ; the defendants continu- ing common carriers were bound to carry the plaintiff for the usual fare, paid in the cars, and not otherwise. 6. That the plaintiff, refusing to pay such fare, was properly removed from the cars. It was further held by all the judges that if the plaintiff was wrongfully removed from the cars, he might lawfully re-enter them, and if in attempting to do so he received the injury com- plained of, he was entitled to recover, unless he was himself guilty of some want of care, which produced, or essentially con- tributed to produce, the injury. But if the expulsion was lawful, or if the plaintiff was guilty of want of care, as stated, he could not recover. The majority of the court also held, that if any of the defend- ant's employees, which the conductor called to his aid, in putting and keeping the plaintiff off the cars, intentionally kicked the plaintiff in his face, without the knowledge or direction of the conductor, the defendants are not liable for the act, in trespass. But the more reasonable view in regard to the mode of enforcing a discrimination between fares paid in the cars and at the sta- tions is, that such a regulation, however proper in itself, cannot legally be enforced by the company unless they have afforded every proper and reasonable facility to the passenger for procur- ing his ticket at the station. 15 15 St. Louis & C. Railw. v. Dalby, 19 111. R. 353. *35 § 28. BY-LAWS AS TO PASSENGERS. 105 11. There is no question upon general principles, in an action, or indictment, against the conductor of a railway train, for un- lawfully expelling a passenger, where the evidence shows a right to make the expulsion, the conductor may nevertheless become liable for the manner of doing it. This is a question to be de- termined by the jury, and cannot ordinarily be decided by the court, as matter of law. If there be an excess of force, or it be applied in an unreasonable and improper manner, the conductor is liable for such excess, to respond in damages, to the party, and also to public prosecution, for a breach of the peace. 16 12. The authority of the conductor of a railway train, or of any other servant of the company, to enforce their regulations, does not depend upon the formal mode of his appointment, but upon the fact of his being employed at the time in the particular office. 16 13. In a late English case, 17 where the railway company had established a by-law requiring all passengers to purchase tickets before entering the cars, and to show the tickets when required so to do, and to deliver them up, on request, before leaving the company's premises, and the plaintiff took tickets for himself and three boys, and three horses, by a certain train, which was' af- terwards divided by the company's servants into two parts, one being composed of passenger carriages and the other of horse boxes ; and the plaintiff retained all the tickets and travelled by the first-mentioned portion of the train, so that the boys, who were left to go in the other portion of the train, were unable to produce their tickets when requested, and were accordingly ex- cluded by the company's servants from entering the horse boxes; it was held a breach of contract by the company, for which they were responsible. 16 HiUiard v. Goold, 34 New H. R. 230. State v. Ross, 2 Dutcher, 224. In this last case the principal evidence of excess was, that the conductor kicked a passenger who, in a state of intoxication, persisted in attempting to get upon the train, and the court held the conviction proper. 17 Jennings v. Great Western Railw. Co., 12 Jur. N. S. 331. 106 CAPITAL STOCK. — LIMITATIONS. §29. *CHAPTER VII. CAPITAL STOCK. SECTION I. Limitations. 1. General rights of shareholders. I 3. Cannot mortgage, unless on special license 2. Capital stock not the limit of property. of the legislature. § 29. 1. All joint-stock companies are allowed to raise a cer- tain amount, and sometimes an indefinite amount of capital, by the subscription of the members ; the corporation, in fact, gener- ally consisting of the contributors of stock, and their assignees, which is divided into shares, transferable according to the by- laws and charter of the corporation, entitling the owner, for the time being, to the rights of voting, either in person or by proxy, as a general thing, and to a participation in the profits of the enterprise. 1 2. The capital stock of a corporation is not necessarily the limit of its property. 2 It is not uncommon for charters of stock companies to contain restrictions and limitations in regard to their right or capacity to hold real estate, and sometimes even in regard to personal estate. 3. But railway companies, being created for the purpose of carrying into effect a definite enterprise, must almost of necessity have the power to issue sufficient stock to accomplish the under- taking, or to raise the requisite funds in some other mode, as by loan and mortgage. And where the stock is limited, and often where it is not, these corporations have been compelled, either to abandon the enterprise, or to resort to loans and mortgages, which * being in some sense a desperate mode of raising funds, as long as the company have power to issue stock, could only be 1 Walford on Railways, 252 ; Penobscot Railw. v. White, 41 Me. R 512. 2 Barry v. Merchants' Exchange Co., 1 Sandford's Ch. 280 ; South Bay Meadow-Dam Co. v. Gray, 30 Maine R. 547. *36,37 § 30. CONDITIONS WHICH PUBLIC AUTHORITIES MAY ENFORCE. 107 justified, ordinarily, by a strict and fatal necessity, and by permis- sion of the legislature, as is generally considered. 3 SECTION II. Conditions Precedent, which the Public Authorities may enforce. 1. Stock, if limited, must all be subscribed. \ 2. Payments at time of subscription. § 30. 1. If, by the charter, the stock of the company is divided into a certain number of shares, that number cannot be changed by act of the company. 1 And if the charter either expressly or by legal intendment require, that a certain number of shares be subscribed before any assessment is laid, no valid assessment can be laid until that number be bond fide subscribed, and if it is attempted the company may be dissolved. 2 2. And where the general law of the state, or the particular charter, requires a given proportion of subscriptions to be paid in at the time of subscription, this condition must be complied with, or the subscriptions will not fulfil the condition precedent. 3 3 Post, § 181, 234, 235. 1 Salem Mill-Dam Co. v. Ropes, 6 Pick. 23. 2 Salem Mill-Dam Co. v. Ropes, 6 Pick. 23 ; Central Turnpike Co. v. Valen- tine, 10 Pick. 142. Where the capital stock consists of a given number of shares of given amount, no valid assessment for the general purposes of the en- terprise can be made until the whole number of shares is subscribed ; and if any of the subscriptions be made upon conditions precedent, it must be shown that such conditions have been waived or performed. 10 Pick. 142. But assess- ments to defray the expenses of the incorporation, organization, and preliminary examination, similar to those under the provisional companies in England, have been allowed to be made before the stock of the company is all subscribed. 6 Pick. 23. And in a suit upon subscriptions to stock in a corporation, where by the charter a given amount of stock is required to be subscribed before the cor- poration can go into operation, it is necessary to allege the latter fact, and the omission will be ground of error, although the question is not raised at the trial. Fry's exr. v. Lex. & Big S. Railw., 2 Met. (Ky.) 314. 3 Highland Turnpike Co. v. M'Kean, 11 Johns. 98, 1 Caines's Cas. 85. But see post, § 51, where it will appear, that although the public, or the other shareholders, may insist upon the payment, in money, of the sums required by the charter to be paid at the time of subscription, this is a condition which can- not be taken advantage of by the subscriber, as between himself and the compa- 108 CAPITAL STOCK. §31. Where * the charter of a railway company provided that the whole capital stock should be subscribed, before any of the pow- ers and provisions of the charter should be put in force, and the company niade a call upon the shares before the subscriptions were completed, and commenced an action after they were so, it was held the action could not be maintained, the completion of the subscription being necessary to enable the company to make the call. 4 SECTION III. Shares Personal Estate. 1 . Railway shares personal estate at common law. 2. Not an interest growing out of land, or goods, wares, and merchandise. 3. Early cases treated such shares as real estate. § 31. 1. The shares of railway companies are now almost universally regarded as personal estate. The English statute so declares them. Hence the transfer of such shares is not required to be in writing, nor are they regarded as coming within the acts of mortmain. 1 This has been repeatedly decided in regard ny, in an action for calls. And it has been held, that the stock subscriptions to a railway, with banking privileges, cannot be paid in bills of the company, but must all be paid in specie. King v. Elliott, 5 Sm. & M. 428. The charter in this case required $ 20 paid in specie at the time of subscription. Subscriptions in the name of infants, unless some one is responsible for payment of calls, are not a compliance with the charter. Roman v. Fry, 5 J. J. Marshall, 634. But if the corporation acquiesce in such subscriptions, they cannot afterwards object. Creed v. Lancaster Bank, 1 Ohio St. R. 1. See Beach v. Smith, 28 Barb. 254. See, also, East Pascagoula Hotel Co. v. West, 13 La. Ann. 545 ; Piscata- qua Ferry Co. v. Jones, 39 N. H. R. 491 ; Fiser v. Miss. & Tenn. Railw., 32 Miss. R. 359 ; Hayne v. Beauchamp, 5 Sm. & Mar. 515, 537 ; Lewis v. Robert- son, 13 Id. 558 ; Barrington v. Miss. Central Railw., 32 Miss. R. 763 ; Miss. & Tenn. Railw. v. Harris, 36 Miss. R. 17. 4 Norwich and Lowestoft Navigation Co. v. Theobald, 1 M. & M. 151. It is not competent for all the shareholders to reduce the amount of the capital stock, by mutual consent, below that fixed in the charter. If that is attempted, it will be enjoined upon a bill brought by the company against the shareholders and projectors. Society of Practical Knowledge v. Abbott, 2 Beavan, 559. 1 Ashton v. Lord Longdale, 4 Eng. L. & Eq. 80. This case extends the *38 § 31. SHARES PERSONAL ESTATE. 109 to shares of canal and dock companies, and bonds secured by an assignment of the rates. 2 Such shares may be sold by parol where the contract is executory. 3 *And it would seem that the same view would prevail in the English courts, even where there is no statutory declaration that the shares shall be deemed per- sonal estate. 3 2. And the sale of foreign railway shares standing in the name of another person, and a guarantee that such person shall deliver, need not be in writing, either as having respect to an interest growing out of land, or as an undertaking for another, the un- dertaking being original and not collateral. 4 Railway shares are neither an interest in land, nor goods, wares, and merchan- dise, within the statute of frauds. 5 3. Some of the early English cases treated the shares of incor- porated companies as real estate, where the interest grew out of the use or improvement of real estate, 6 and a similar view is taken in some of the American states. 7 But the settled rule upon the subject now, both in England and this country, is that before stated. 8 This has often been decided in recent analogous same rule to the debentures of such companies. Neither is railway scrip with- in the Mortmain Act. But mortgages given by a railway company of the un- dertaking and tolls may be within the act. So also shares in a bank secured by mortgages. Myers v. Perigal, 16 Simons, 533; The King v. Chipping Norton, 5 East, 239. 2 Sparling v. Parker, 9 Beavan, 450 ; Thompson v. Thompson, 1 Coll. C. C. 381 ; Hilton v. Giraud, 1 De G. & S. 183; Walker v. Milne, 11 Beavan, 507. But see Tomlinson v. Tomlinson, 9 Id. 459. 3 Bradley v. Holdsworth, 3 M. & W. 422 ; Bligh v. Brent, 2 Y. & Coll. 268, 294. This is an elaborate case establishing the proposition that the shares in a corporation, whose works are real estate, are nevertheless personal estate, and this upon general principles Of the common law. i Hargreaves v. Parsons, 13 M. & W. 561. 5 Humble v. Mitchell, 2 Railw. C. 70; s. c. 11 Ad. & Ellis, 205. See also Duncuft v. Albrecht, 12 Simons, 189; Tempest v. Kilner, 3 C. B. 249; Knight v. Barber, 16 M. & W. Q6. 6 Drybutter v. Bartholomew, 2 Peere Wins. 127; Townsend v. Ash, 3 Atk. 336 ; Buckerridge v. Ingram, 2 Vesey, jr. 652. 7 Welles v. Cowles, 2 Conn. R. 56 7. See also Cape Sable Company's case, 3 Bland's Ch. 606, 670; Binney's case, 2 Id. 99 ; Price v. Price, 6 Dana, 107; Meason's Estate, 4 Watts, 341. 8 Walford, 254; Ante, § 31, and cases cited in notes 1, 2, 3, and 4; Tippets v. Walker, 4 Mass. B. 595, 596, opinion of Parsons, Ch. J. Speaking of a *39 110 CAPITAL STOCK. § 31. cases. The foe of land being in the corporation, vests no inter- est of the nature of real estate in the separate shareholders. 9 turnpike company, he says: "When the road is made, the corporation is enti- tled to demand and receive a toll of travellers for the use of it, in trust for the members of the corporation, in proportion to their respective shares. The property of every member is the right to receive a proportional part of the tolls, which is considered as personal estate." In Howe v. Starkweather, 1 7 Mass. R. 240, 243, Parker, Ch. J. says : " Shares in a turnpike or other incorporated company, are not chattels. They have more resemblance to choses in action, being merely evidence of property." In 1 Greenleaf's Cruise, 39, 40, the subject is very fully and fairly presented, and the following conclusion arrived at, in regard to the state of the law in the United States : " Latterly it has been thought that railway shares were more properly to be regarded as personal estate." The same view is held in Bank of Waltham v. Waltham, 10 Met. 334 ; Hutch- ins, Adm'r, v. The State Bank, 12 Met. 421; Denton v. Livingston, 9 Johns. 96, 100; Planters' & Merchants' Bank v. Leavens, 4 Alabama R. 753; Union Bank of Tennessee v. The State, 9 Yerger, 490; Brightwell v. Mallory, 10 Id. 196; Heart v. State Bank, 2 Dev. Ch. Ill ; State v. Franklin Bank, 10 Ohio, 91, 97; Slaymaker * v. Gettysburg Bank, 10 Penn. St., 373; Gilpin v. Howell, 5 Penn. St., 41, 57; Johns v. Johns, 1 Ohio St. R. 350; Arnold v. Ruggles, 1 Rhode Island Rep. 165. A distinction has sometimes been attempted between the shares of a bank or manufacturing corporation, and a turnpike or railway, in regard to their partak- ing of the realty. But the slightest examination will satisfy us that there is no substantial ground for any such distinction. The one may be more intimately connected, in its existence or operation, with real estate, but both must have some connection, more or less intimate, and in both the shareholders have no title to the land, that residing altogether in the corporation, while the shares are merely a ri^ht to the ultimate profits of the company, and are as really and unquestionably choses in action as promissory notes, bills of exchange, or bonds and mortgages, of natural or corporate persons. Wheelock v. Moulton, 15 Verm. R. 519; Isham v. Ben. Iron Co. 19 Verm. R. 230. See also Johns v. Johns, supra. 9 Ackland v. Lewis, 1 K. & G. 334, Registration cases. *40 §32. RESTRICTIONS UPON TRANSFER. Ill CHAPTER VIII TRANSFER OF SHARES. SECTION I. Restrictions upon Transfer. 1 . Express provisions of charter to be ob- served. 2. If not made exclusive, held directory merely. 3. Unusual and inconvenient restrictions void. 4. But a lien upon stock for the indebtedness of the owner is valid. 5. But such lien is not implied. 6. Where transfer is ivrongfully refused, ven- dee may recover value of the company. § 32. 1. We cannot here attempt to show in detail all the in- cidents of the transfer of stock in railway companies. It is trans- ferable much the same as other personal property, excepting only that any express provision of the charter upon that subject must be regarded as of paramount obligation. 1 1 Strictly speaking, perhaps no shares in any joint enterprise are transferable so as to introduce the assignee into the association, as a member, unless it be joint-stock companies and corporations, formed in pursuance of legislative au- thority. And in the case of legislative incorporations, the shares are transfer- able only under the charter, and according to its terms. Duvergier v. Fellows, 5 Bing. 248, 267, opinion of Best, Ch. J. A mere partnership cannot be so constituted, as to release the assignor of a share from all liability to third per- sons, and introduce the assignee at once, and completely, into his place. Blun- dell v. Winsor, 8 Simons, 601, opinion of Shad-well, V. C. ; Jackson v. Cocker, 4 Beavan, 59, 63. In the English courts it has been held, that where the charter of a corpora- tion or the deed of settlement required the assent of the directors to complete the title of the purchaser of shares, that it was the duty of the seller to procure this assent, in order to comply with his contract to convey. Wilkinson v. Lloyd, 7 Q. B. 27; Bosanquet v. Shortridge, 4 Exch. 699. And all corporations may, in self-defence, require all calls made upon their stock to be paid, before they will substitute the name of the purchaser of shares upon their books, for the original subscriber, as after this substitution they have no longer any claim upon such subscriber, and it would be liable to defeat many public enterprises of moment, and after large expenditures had been incurred, if the subscribers could, at will, relieve themselves from all liability to pay calls, *41 112 TRANSFER OF SIIARES. § 32. * 2. In many cases, however, where the charter only provides a mode of transfer, and does not declare this mode exclusive of by transferring their shares to irresponsible persons. Hall v. Norfolk Estuary- Co., 8 Eng. L. & Eq. 351. But the assignee of a share may always insist upon becoming a member upon paying all calls. Questions of some difficulty often arise between shareholders and the com- pany, in regard to an informal transfer having been confirmed by acquiescence. In Shortridge v. Bosanquet, 17 Eng. L. & Eq. 331, and in ex parte Bagge, 4 Eng. L. & Eq. 72, it is held that if the entry of the transfer is made upon the books of the company, and especially where the company have dealt with the shareholder claiming under the transfer, they cannot treat the transaction as void, for any want of form in the transfer, though in a matter specially required by the charter and not immaterial, but which their own irregularities had ren- dered it impossible to observe. And where the secretary of a joint-stock com- pany fraudulently transferred shares, and the proprietor of the shares treated the transaction as being valid against the transferree, but filed a bill against the company for damages, it was held he was not entitled to relief. Duncan v. Luntley, 2 McN. & Gord. 30 ; s. C. 2 Hall & Twells, 78. In ex parte Straffon's Executors, 10 Eng. L. & Eq. 275, the lord chancel- lor, St. Leonards, thus characterizes these transactions, which, although informal in some respects, are constantly acquiesced in by both parties, until there comes some crisis in the affairs of the company, perhaps, or the transferree becomes insolvent. " There would be no safety for mankind in dealings of this kind, ex- tensive as they are, with so much money embarked in them, if the courts had ever held, as they never have held, that every minute circumstance must be obeyed, which the directors themselves ought to have obeyed ; but if they disre- gard them, if the shareholders do not call them to account for doing so, if a course of action has been adopted in the particular company, without complaint, although they may have arrived at making a man a shareholder, by what I should call a short cut, instead of going through all the necessary formalities, they may be perfectly good as between parties thus dealing with the directors, and the directors themselves, so as to bind them." And in Bargate v. Shortridge, 31 Eng. L. & Eq. 44 (May, 1855), in the House of Lords, upon elaborate argument and great consideration, it seems to have been definitively settled in England, that where the deed of a joint-stock company required the certificate of consent of three directors to the transfer of the shares of the company, and in practice this had never been given, but, for ten years, transfers had continually been made upon the verbal assent of the managing director upon the spot, and about nine tenths of the original shares had been transferred in this manner, and S. having transferred his shares in the same mode to T., and his name having been entered upon the books of the com- pany, they could not afterwards refuse to regard T. as a member. And in such case, where the directors afterwards cancelled the name of T. in their share register-book, on the ground that the consent of the directors was wanting, it was held that S. had ceased to be a member of the company, and *42 § 32. RESTRICTIONS UPON TRANSFER. 113 all others, the provision has been regarded as merely directory, and * not indispensable to the vesting of title in the assignee. And this has generally been so regarded, where the express provisions, in relation to the transfer of shares, exist only in the by-laws of the corporation. 3. And any unusual restriction in the by-laws of a corporation upon the transfer of stock, as that it shall be made only upon the books of the corporation, in person, or by attorney, and with the consent of the president, or other officers of the corporation, has been regarded as void, as an unreasonable restraint upon trade, 2 was entitled to an injunction against a scire facias prayed out against him by a creditor of the company, as a shareholder. It was said by Lord St. Leonards, who delivered the leading opinion : " Where the directors of a company do acts in a matter in which they have no authority, such acts are altogether null and void. But where the acts are within their power and duty, and are either omitted or improperly done, and thereby third parties are damaged, neither a court of law nor of equity will allow the com- pany to take advantage of their neglect." This, it seems to us, is a sound distinction, and one which will have an impor- tant bearing upon the fraudulent over-issue of stock by the directors of a com- pany whose capital is limited, and all issued and in the hands of boiia fide own- ers. This is the same case in 4 Exch. 699. See also Taylor v. Hughes, 2 Jones & La Touche, 24 ; Humble v. Langston, 2 Railw. C. 533 ; Ex parte Cockburn, 1 Eng. L. & Eq. 139. But where' the charter, or the general law, requires all debts of the owner to be paid the company before transfer of shares, the company are not bound to accept a transfer otherwise made. Reg. v. Wing, 33 Eng. L. & Eq. 80. 2 Sargent v. Franklin Ins. Co., 8 Pick. 90 ; Quiner v. Marblehead Ins. Co., 10 Mass. R. 476 ; Noyes v. Spalding, 27 Vt. R. 421 ; Bates v. New York Ins. Co., 3 Johns. Cas. 238 ; Chouteau Spring Co. v. Harris, 20 Missouri R. 382. In this last case the charter of the company provided that the stock might be " transferred on the books of the company," and the company were authorized " to regulate the transfer of stock," by by-laws. And a provision in the charter authorized the company, in certain cases, to make assessments of stockholders beyond their shares of stock. It was held that no such assessment could be made on a party, after he had ceased to be a member, by a transfer of his stock. That the power " to regulate the transfer " did not include the power to restrain transfers, or to prescribe to whom they might be made, but merely to prescribe the formalities to be observed in making them, and that the company could not prevent a party from selling his stock, even to an insolvent person. That an assignment " upon the books of the company " was sufficient to effect a change of ownership, without taking out a new certificate in the name of the VOL. I. 8 *43 114 TRANSFER OF SHARES. § 32. unless as a provision to secure the indebtedness of shareholders. * In such case it is sometimes said the assignee need only make his right known to the company, and require the transfer entered upon the books, and his title becomes perfected. 3 4. But if the former owner was indebted to the corporation, and the charter required all such indebtedness to be liquidated, before transfer of stock, such indebtedness will remain a lien upon the stock, in the hands of the assignee. 4 And where the assignee ; and that any transfer in writing was valid against the company, if, being notified, they refused to allow it to be made according to their by-laws. And in Dauchy v. Brown, 24 Vt. R. 197, which was an action against stock- holders, upon the proper debt of the corporation, where the charter provided, that the persons and property of the corporation shall be holden to pay its debts, and that any execution, which should issue against the corporation, might be levied upon the person or property of any individual thereof, it was held, that the stockholders were only liable, in default of the corporation, and that judg- ment should first be recovered against the corporation, and the statute remedy strictly pursued. See, also, in regard to the remedy against stockholders, who are by statute made personally liable, Southmayd v. Russ, 3 Conn. R. 52 ; Middle- town Bank v. Magill, 5 Conn. R. 28 ; Child v. Coffin, 1 7 Mass. R. 64 ; Roman v. Fry, 5 J. J. Marshall, 634. s Sargent v. Franklin Ins. Co., 8 Pick. 90 ; United States v. Vaughan, 3 Bin- ney, 394 ; Ellis v. Essex Bridge Co., 2 Pick. 243 ; Chester Glass Co. v. Dewey, 16 Mass. R. 94 ; Agricultural Bank v. Burr, 11 Shepley, 256 ; Same v. Wilson, id. 273. 4 Union Bank v. Laird, 2 Wheaton, 390 ; Bank of Utica v. Smalley, 2 Co wen, 770 ; Rogers v. Huntingdon Bank, 12 Serg. & R. 77 ; Downer v. Bank of Zanesville, Wright, 477 ; Farmers' Bank of Maryland v. Iglehart, 6 Gill, 50 ; Hall v. U. S. Insurance Co., 5 Gill, 484. See Angell & Ames, § 355 and note. In Marlborough M. Co. v. Smith, 2 Conn. R. 579, it was said the transfer of shares to constitute the assignee a stockholder must be in strict con- formity to the charter and by-laws. And in the recent case of Pittsburg & Steubenville Railw. v. Clark, 9 Am. Railway Times, 51, Ch. J. Lewis goes into an elaborate review of the cases to show, that under the Pennsylvania statutes, which provide, that no transfer of shares shall be made while the holder remains indebted to the company, except by consent of the board of directors, and no transfer shall discharge any liabilities before incurred, that both the stock and the holder remain liable for all calls due before the transfer, and that the original subscriber, who promised to pay fifty dollars on a share, is indebted to the com- pany, before calls made, within the meaning of the statute ; and even where the transfer is made with the consent of the directors, will remain liable until all calls are paid, notwithstanding the statute subjects the transferee also to a like liability. The following extract from the opinion of the learned judge places the points decided in a clear light : " Is an original subscriber, who has bound *44 § 32. RESTRICTIONS UPON TRANSFER. 115 charter of the company requires the payment of all sums due before registering a transfer, this will embrace all calls made and which are payable at the date of the transfer. 5 himself in writing to pay fifty dollars per share, but who has only paid five dol- lars per share on his subscription, ' indebted ' to the company within the mean- ing of the act ? Why should this question receive a negative answer ? His en- gagement to pay money is as much a debt as any other engagement for the pay- ment of money. A debt may be contracted for stock in a railroad company as readily as for anything else. It is true that the debt is payable by instalments when required from time to time by the directors. But it is none the less a debt on that account. It is debitum in presenti solcendum in futuro. It is a present debt payable at some future day. It is well settled that the lien given by stat- ute to a corporation, upon the shares of stockholders ' indebted' to it, extends to all debts, whether payable presently or at a future time, except where the stat- ute limits the lien to debts actually due and payable, and that a stockholder in- debted to the corporation, although the debt may not be due, cannot transfer his stock without the consent of the corporation. Rogers v. Huntingdon, 12 S. & R. 77 ; Grant v. Mechanics' Bank of Philadelphia, 15 S. & R. 140 ; Sewell v. Lancaster Bank, 1 7 S. & R. 285. It is very clear that the defendants, at the 5 Orpen ex parte, 9 Jur. N. S. 615. This question is elaborately discussed in a recent case in Maryland, with the following results : — The charter of a bank provided that its shares of stock shall be transferable upon the books of the corporation only according to such rules as shall be estab- lished by the president and directors ; but all debts actually due and payable to the corporation by a stockholder, requesting a transfer, must be satisfied before such transfer shall be made, unless the president and directors shall direct to the contrary. Held, 1. That this lien on the stock is not waived by the form of a certificate for stock declaring that the stockholder " is entitled to shares of stock transfer- able only at said bank personally or by attorney on surrender of this certificate." 2. The assignee of a stockholder takes the equitable assignment subject to the rights of the bank against the stockholder, under its charter, of which he is bound to take notice. 3. This lien attaches to balances due the bank by the stockholder, for over- drafts on checks, but not to notes or bills on which the stockholder may be a party, as maker or endorser, and not due at the time the transfer is demanded. 4. The words " debts actually due and payable," imply more than mere in- debtedness ; the indebtedness contemplated is only a debitum solvendum in pre- senti, not in futuro. 5. Where an assignee demands a transfer, but refuses to pay the debts then due the bank by the stockholder, and afterwards makes a second demand, when other notes of the stockholder had become due and payable, he cannot obtain a transfer without paying all the debts due at the time of the last demand. Reese & Fisher v. Bank of Commerce, 14 Md. R. 271. 116 TRANSFER OF SHARES. § 32. 5. A corporation has no implied lien upon stock for the lia- bilities of the stockholders to the company. 6 time of the alleged transfer of their stock, were ' indebted ' to the company to an amount nearly equal to the whole of their subscription. They had, therefore, no ri'dit whatever to transfer their stock without the consent of the board of direc- tors. It is true that as between them and the purchaser, if the latter thought proper to contract for a contingent or uncertain interest, the transfer might be good for some purposes. 8 Pick. 90 ; 9 Pick. 202 ; 2 Cowen, 770. But it passes no title to the stock, and confers no ' privileges, immunities, or franchises ' what- ever upon the purchaser. The consent of the board of directors is of itself the originating act in the change of title, and does not merely operate to perfect the conveyance previously begun. Marlborough Man. Co. v. Smith, 2 Conn. R. 579 ; Northop v. Newtown & Bridgeport Turnpike Co., 3. Conn. R. 544 ; Ox- ford Turnpike Co. v. Bunnell, 6 Conn. R. 552. So long as the stock remains unpaid, the corporation has a right to refuse to receive new members in place of the original adventurers. Until the stock is fully paid up, and the stockholders otherwise free from debt to the company, they have no right whatever to intro- duce strangers into the company in their places. A right which depends upon the consent of others is no right at all. The transfer to Mr. Stanton was, there- fore, of itself, a nullity. An attempt was made to give it vitality by parol evi- dence, from which the consent of the board of directors was to be inferred by the jury. But there is no evidence tending to show that the question was ever pre- sented to the consideration of the board, or that any action was taken by the board in regard to the transfer. In ordinary business transactions between a corporation and strangers, the authority of agents and the existence of contracts may be implied from acquiescence and other circumstances. So where the as- sent of the board is required by a by-law only, the execution of the by-law may be modified by the practice of the corporation. Ins. Co. v. Smith, 1 Jones, 126. But when the act of incorporation grants a power, the mode prescribed by the statute for its exercise must be strictly pursued. 5 Barb. S. C. R. 613, 614 ; 2 Cranch, 127. The question here is whether one member of a corporation has been legally substituted for another. The title of the original stockholder was established by written evidence, and could have no legal existence with- out it. Thames Tunnel v. Sheldon, 6 B. & C. 341. The title of the substitute must be shown by evidence of the same character. It is the duty of the direc- tors to keep minutes of their proceedings, and the proper evidence of their as- 6 Mass. Iron Co. v. Hooper, 7 Cush. 183 ; Heart v. State Bank, 2 Dev. Ch. Ill ; Sargent v. Franklin Ins. Co., 8 Pick. 90, and cases cited supra, note 2. But dividends due and unpaid may be said to be a fund, in the hands of the corporation, which they are not obliged to pay to the assignee of the stock, until their debts from the assignor are liquidated. Dividends are strictly due only to the assignor, and would not probably pass by a mere sale of the stock, unless there were some special ground for giving the transfer of the stock that operation. §33. CONTRACTS TO TRANSFER STOCK. 117 6. And when the company wrongfully refuse to record trans- fers of shares on their books, the vendee may recover the price of such shares, the company having caused them to be sold, as the property of the vendor. 6 ♦SECTION II. Contracts to transfer Stock. 1. Transfer under English statutes. Regis- tered companies. 2. Contracts to transfer stock valid, where bona, fide. 3. Vendor must have the stock, when due. n. 3. Vendor must procure the consent of di- rectors, where requisite. 4. Force of usages of stock-exchange. 5. Company will reform their registry at its peril. 6. 1 0. Company may compel one to accept shares on contract. 7. Stock standing in joint names belongs to survivors. 8. Mode and effect of correcting registry. 9. If the company vary the contract, spe- cific performance will be denied. 10. Closing contracts by offer and acceptance. 11. Form of transfer. Two may join in one transfer. § 33. 1. Questions often arise in regard to transfers of stock sent to a transfer is a recorded resolution adopted when the board was in session. Where the transfer is made by a director, it ought further to appear that the res- olution of assent was carried without his vote. If the resolution was adopted and entered on the minutes, the loss or destruction of the entry might be sup- plied by parol proof. But in no other case can parol evidence be received to show that an assignee has been admitted as a member of the corporation in the place of the assignor. There was no legal evidence of the assent of the board of directors to the transfer, and therefore no legal evidence of a valid transfer of the stock. If there had been, we do not see how the defendants can claim to be discharged by it from ' liabilities ' previously incurred. Their subscription to the stock of the company created a liability to be called upon for payment in such instalments as the directors required. Conceding that it was not an obligation for present payment, and supposing, for a moment, that it was not strictly a debt, it was certainly a ' liability,' which is a word of more extensive signification than ' debt.' The act of assembly is express in its direction that a transfer, even with the assent of the board, shall not have the effect of discharging any liabilities or penalties heretofore incurred by the owner of the stock. We see no reason for restricting this proviso to ' liabilities ' which had become due and payable before the transfer. It is sufficient to bring a ' liability ' within the proviso that it had been ' incurred ' by the owner before the transfer. It is not necessary that it should also have become due and payable." The same principle was reaffirmed in Graff's Exr. v. Pittsburg & Steubenville Railw., 11 Am. Railway Times, No. 14. *45 118 TRANSFER OF SHARES. § 33. in incorporated companies, as to the quantity of interest con- veyed, the title of the person making the conveyance, and many other incidents. The English statutes in regard to the regis- tration of railway companies are not intended to affect the prop- erty in the shares, 1 and a transfer is valid, although made before the registration. 2 2. It would seem, too, that a contract to transfer stock in rail- way companies, at a future time, which the party neither has, nor is about to have, but expects to purchase in the market, for the purpose of fulfilling his undertaking, is nevertheless a valid contract, and not illegal, or against the policy of the law, 3 and that the intimation of Lord Tenterdenf that such contracts were illegal, and not to be encouraged by the law or its ministers, is 1 The London & Brighton Railw. Co. v. Fairclough, 2 Railw. Cases, 544 ; s. c. 2 M. & G. 674. s The Sheffield, Ashton-under-Lyne, & Manchester Railw. Co. v. Woodcock, 2 Railw. Cases, 522 ; s. c. 7 M. & W. 574. 3 Hibblewhite v. M'Morine, 5 M. & W. 462. Mr. Walford, in his treatise, 256 and note, intimates, that the law of France regards this class of contracts as ille- gal, and cites Hannuic v. Goldner, 11 M. & W. 849, in confirmation. But the case does not expressly decide the point. That was pleaded, and the court held the plea bad, as amounting to the general issue, and the party had leave to amend. Perhaps it is charitable, both to the pleader and to the country, to sup- pose such is the law there, as Mr. "Walford seems to have done. But where the deed of settlement requires the assent of the directors to a transfer of shares, and the vendor did not obtain it, and in the mean time the price of shares fell in the market, held the vendee might recover back his money. Wilkinson v. Lloyd, 7 Q. B. 27. But where the plaintiffs covenanted to subscribe for stock in a railway, and pay ten per cent, thereon, and then transfer it to defendant, who agreed thereupon to pay the residue and save the plaintiffs harmless, and the plaintiffs subscribed for the stock and paid the ten per cent. ; but the by- laws of the company provided for the transfer of the stock on the books of the company only after the payment of thirty per cent, of its amount, unless by the consent of the directors, which they refused to give, in this case, and the plain- tiffs tendered the defendant an instrument whereby they assigned and trans- ferred the stock and constituted him their attorney to transfer the same on the books of the company, which was refused as not being a compliance with the contract : It was held, in an action to recover damages for the breach of the contract, that the plaintiffs had complied with their covenant, and might recover not the difference between the value of the stock at the time of refusal, and the sum due upon the subscription, but the whole sum due and interest. Orr v. Bigelow, 4 Kernan, 556. 4 In Bryan v. Lewis; Ry. & M. 386, and in Lorymer v. Smith, 1 B. & C. 1. § 33. CONTRACTS TO TRANSFER STOCK. 119 not to be regarded, at this time, as sound law, however good sense, or good morality, it may seem to be. 3. It is clearly not a stock-jobbing transaction within the Eng- * lish statute. 5 But to the performance of such a contract it seems • to be requisite, that the seller should bond fide procure the stock, by the time appointed for the transfer. 6 4. The English reports, both in law and equity, and especially the more recent ones, abound in cases more or less affecting trans- fers of shares on the stock-exchange, and the practice and law governing transactions between brokers. These rules are allowed to have great weight in fixing the construction and effect of con- tracts made through the instrumentality of brokers. In the sale of shares in companies requiring the consent of the directors or of the company itself to the transfer, it is not understood, accord- ing to these rules, that the vendor or his broker undertakes to procure that consent, and if he does all that is requisite to effect a transfer of the equitable interest of the property, and 5 Hewitt v. Price, 4 M. & G. 355 ; Mortimer v. M'Callan, 6M.&W. 58. 6 Hibblewhite v. M'Morine, 2 Railw. C. 51 -66 ; s. c. 6 M. & W. 200. The com- ments of Isham, J., in Noyes v. Spaulding, 27 Vt. R. 420, 429, may be regarded, perhaps, as giving the present state of the English law upon this subject. " Con- tracts for the sale of stock of this character on time are valid at common law, and can be enforced by action. The statute 7 Geo. 2, ch. 8, made perpetual by 10 Geo. 2, ch. 8, has rendered some contracts of that character illegal. Tbey are rendered void so far as the public stocks of that country are concerned, when the seller had no stock at the time of making the contract, and none was ever intended to be transferred by the parties, but their intention was to pay the dif- ference merely that may exist between the market value of the stock at the time of the transfer, and the price agreed to be paid. Such contracts are rendered void by that statute, and are treated as wagering contracts; 'the seller virtually bet- ting that the stock will fall, the buyer that it will rise.' Chitty on Bills, 112, note (w). It has been held, that railroad stock is not within the act. Hewitt v. Price, 4 M. & G. 355; s. c. 3 Railw. C. 175; Fisher v. Price, 11 Beav. 194. In the case of Mortimer v. M'Callan, 6 M. & W. 70, Lord Abinger observed, ' that the act was made for the purpose of preventing what is declared to be illegal trafficking in the funds by selling fictitious stock merely by way of differ- ences ; but it never was intended to affect bond fide sales of stock.' Elsworth v. Cole, 2 M. & W. 31 ; 2 Kent, Comm. 468, note (b). In the case of Grize- wood v. Blane, 20 Eng. L. & Eq. 290, it was held, that a colorable contract for the sale of railroad shares, where no transfer is intended, but merely ' differ- ences] amounting to the rise or fall of the market, is gaming within the 8 and 9 Vict. ch. 109, § 18; s. c. 11 Common Bench, 538." *46 120 TRANSFER OF SHARES. § 33. there is no obstruction to the vendee in obtaining the registration of such transfer, by taking the prescribed steps, the transfer will be regarded as complete. 7 5. Where the company assume to erase transfers from their books on the alleged ground that they are merely colorable, ,and ■ made for the purpose of injuriously affecting the interest of the company or others, they assume the burden of showing such to be the facts ; and the transferees will be entitled to a mandamus to compel the company to restore their names to the registry as the proprietors. 8 6. It is competent for the company to maintain a bill in equity against one upon an agreement to accept shares, although no writ- ing has been signed by the defendant according to the statute re- quiring the acceptance to be in writing. The contract may be enforced, as an agreement to «do what the statute requires, and the decree will settle the question whether the defendant or some other one is the lawful holder of the shares in question. 9 7. Where stock is allowed to stand in the joint names of two persons, they will be regarded as joint tenants, unless something is shown to the contrary, and the company may treat the sur- vivor as the owner of the whole. 10 8. A court will not interfere to compel a joint-stock company to correct their registry by removing one name and inserting another while an action at law is pending in regard to the same matter. 11 Where the registry is altered under a misapprehen- sion as to the genuineness of a transfer it will not have the effect to transfer the shares. 12 Specific performance of a contract to 7 Stray v. Russell, 5 Jur. N. S. 1295; s. c. affirmed in Exch. Chamb. 6 Id. 168. See also Field v. Lelean, 6 H. & N. 617, where a custom of the stock ex- change in regard to a particular class of shares, not to deliver them on contracts of sale until the payment of the price, was held operative. 8 Ward v. South Eastern Railw., 6 Jur. N. S. 890. 9 N. B. & Canada L. Co. v. Muggeridge, 4 Drew. 686 ; Bog Lead Co. v. Montague, 10 C. B. N. S. 481 ; s. c. 8-Jur. N. S. 310. 10 Garrick v. Taylor, 3 Law T. N. S. 460. And this will be so, notwithstand- ing, by the rules of the bank, there was to be no benefit of survivorship, it ap- pearing to have been the purpose of the deceased to have her share go to the survivor. Garrick v. Taylor, 29 Beav. 79 ; 7 Jur. N. S. 116, affirmed by Lords Justices, 10 W. R. 49. 11 Harris ex parte, 29 Law J. Exch. 364 ; s. c. 5 H. & N. 809. 18 Hare v. London & N. W. Railw., 1 Johns. Eng. Ch. 722. § 33. CONTRACTS TO TRANSFER STOCK. 121 sell shares will be decreed in equity, notwithstanding the consti- tution of the company provide that no shares shall be transferred except in such mode as the board shall approve, and the board refuse to give its consent to the transfer. 13 9. If the company in their notice of allotment annex a condi- tion which they have no power to do, it will be regarded as such a variation of the contract that a court of equity will not inter- fere to decree specific performance of the original contract. As when the company in such notice require the allottee to sign the deed of settlement on pain of forfeiture of the shares, when the constitution of the company gave no such power. 14 10. The learned judge, Lord Chancellor Westbury, here dis- cusses the general questions involved, and concludes, that in general the court will specifically enforce a contract to accept of shares in a joint-stock company. His lordship explains much at length his own views of the true modus operandi in effecting con- tracts by means of written offers and acceptance, and concludes, very justly, we think, that one who attempts to enforce such a contract must show that the acceptance on his part was prompt, simple, and unqualified ; and that where new conditions are made in the acceptance the contract will not be regarded as closed un- til assent is given by the other party, either expressly or by fair implication, to such conditions. 11. The transfer of shares intended to be recorded on the books of the company should contain nothing but the transfer of the title. And where there are shares in different companies transferred between the same parties at the same time, it will be more convenient to have a separate transfer for each company. 15 But as to the mere conveyance of title between the parties, one conveyance is sufficient. And it is held even that two different owners may join in one conveyance to the same person. 16 13 Poole v. Middleton, 7 Jur. N. S. 1262. 14 Oriental I. Steam Co. v. Briggs, 8 Jur. N. S. 201. 15 Lord Campbell, Ch. J., in Reg. v. General Cemetery Co., 6 E. & B. 415, 419 ; Copeland v. North Eastern R. Co'., Id. 277. 16 Wills v. Bridge, 4 Excb. 193. 122 TRANSFER OF SHARES. § 34. SECTION III. Intervening Calls, or Assessments. 1 . Vendor must pay calls, if that is requisite to pass title. 2. Generally it is matter of construction, and inference. n. 2. Calls paid by vendor after executing transfer. §34. 1. It has been said, too, that the contractor to transfer stock must see to it that all calls are met, up to the time of the transfer, as in general the charters of such companies, or their by-laws, prohibit the transfer of stock while calls remain unpaid. 1 But we have seen that this is a provision for the protection of the * company, and in which they alone are interested, and which will not ordinarily avoid a sale, between other parties, otherwise valid. 2. And it would seem that the question, upon which party the duty to pay future calls shall rest, is one of construction, in the absence of express stipulation ; at all events, one of intention. It may perhaps be safe to say that the sale of stock, in the pres- ent tense, ordinarily implies that it is free from incumbrance of any kind, unless there is some exception or qualification in the contract. And that may be the common presumption, in regard to contracts to deliver stock, in future. But in the latter case the presumption is not, by any means, of so conclusive a character as in the former, and sometimes, in such cases, it has been held not incumbent upon the seller to pay intervening calls. 2 1 Walford, 256, 257. 2 Shaw v. Rowley, 5 Railw. C. 47. In this case it was held no impediment to the seller's readiness to convey the shares, that he had not paid an intervening call, as he might do it at the moment of executing the transfer, and the court say the call was ultimately to be paid by the purchaser. In Humble v. Langston, 2 Railw. C. 533, it is decided, that upon the sale and transfer of the shares, where the purchaser's name is not substituted, on the reg- ister of the company, for that of the seller, but the stock still standing in his name, he is thereby subjected to the payment of future calls, he cannot recover the money of the purchaser, because there is no implied contract to that effect, resulting from the transaction. This is certainly a most remarkable decision, and *47 § 35. TRANSFER BY DEED IN BLANK. 123 *SECTION IV. Transfer by Deed in Blank. 1, 2. Blank transfer formerly held invalid in I 3. Rule different in America. England. § 35. 1. Ordinarily the transfer of stock, or a contract to trans- fer, is not required to be in any particular form. All that is it is something of a task to be able to read the opinion of the court, by which this result is reached, with tolerable patience. The conclusion is certainly not fortified either by reason or analogy. And in the Cheltenham & Great W. Union Railw. Co.. v. Daniel, 2 Railw. C. 728, it is decided, that the purchaser of shares may, by way of estoppel in pais, be made liable for calls, before his name is actually substituted for that of the seller upon the register of shares. If so, both parties are liable for the calls, and the seller, while his name remains upon the register, is the mere surety of the purchaser, as to future calls. And what is a more natural or necessary conclu- sion in the mind of any one having the common sense of justice, than to imply, that while the purchaser suffers the seller's name to remain upon the register, and liable to the payment of calls, through his neglect, he does impliedly prom- ise to indemnify him against all loss on that account ? See Burnett v. Lynch, 5 B. & C. 589. But the case of Humble v. Langston is reaffirmed in the subsequent case of Sayles v. Blane, 6 Railw. C. 79. These cases can only be accounted for, upon the principle of discouraging blank unregistered transfers, which have the effect to evade the stamp duties. Shelford, 108, and Report on Railw. 1839, No. 517, p. 4. Since writing the above the late case of Walker v. Bartlett, 3G Eng. L. & Eq. 368, has come to hand, where a blank transfer seems to be regarded as per- fectly valid, and that the transfer in this mode does impose upon the vendee the duty of paying calls upon the shares, while they remain his property. We may be allowed to say, that this result of the English decisions, upon this subject, is not altogether without gratification, as the former decisions had so effectually mystified the subject, that it seemed not improbable that the difficulty of com- prehending them might very likely be ultimately found with ourselves, rather than at the door of the eminent jurists, who have so long clung to the now ac- knowledged inconsistency of Humble v. Langston, which pertinacity in error, as a general thing, is far more uncommon in Westminster Hall than with courts of less experience. Men of the learning and experience of the English judges, generally feel that they can afford to acknowledge their common share of human fallibility, without serious prejudice. *48 124 TRANSFER OF SHARES. § 35. requisite, is, the same as in any other contract, the meeting of the minds of the parties. But in some cases the shares are, by the express requirements of the charter, made transferable only, by deed executed by both parties to the transfer. 2. And in such case it was considered, that a deed executed by the seller, with a blank for the name of the transferee, was no compliance with the statute. 1 The opinion of the court seems to rest upon the early cases, in which it is held that the party cannot effectually execute a deed, leaving such important blanks as the name of the grantee, or obligee, while it is considered that less important ones, like the date, etc., may be supplied, after the execution, by permission of the party executing the same. This seems to have been the undoubted rule of the English law, from the authorities cited, in the last case. 3. But it seems to be rather technical than substantial, and to found itself either in the policy of the stamp duties, or the supe- rior force and sacredness of contracts by deed, both of which have little importance in this country. And the prevailing cur- rent of American authority, and the practical instincts, and business experience and sense of our people are undoubtedly otherwise. * 4. There is no good reason why one should not be as much bound by a deed executed blank, and filled according to his directions, as by a blank acceptance or indorsement, of a bill, or note, and accordingly we find a large number of decisions of the American courts leading in that direction. 2 1 Hibblewhite v. M'Morine, 2 Railw. C. 51 ; s. c. 6 M. & W. 200. It is consid- ered that two or more several owners of shares may join in one deed to convey their shares. Wills v. Bridge, 4 Exch. 193; Enthoven v. Hayle, 9 Eng. L. & Eq. 434. See ante, § 34, n. 2. 2 Stahl v. Berger, 10 S. & R. 170; Sigfried v. Levan, 6 Id. 308; Wiley v. Moor, 17 Id. 438; Ogle v. Graham, 2 Penn. R. 132; Woolley v. Constant, 4 Johns. 54, 60; Ex parte Kerwin, 8 Cow. 118; Boardman v. Gore et al., 15 Mass. R. 331. And the following certainly incline in the same direction. Smith v. Crocker, 5 Mass. R. 538, and the opinion of Parsons, Ch. J. ; Hunt v. Adams, 6 Id. 519 ; Warring v. Williams, 8 Pick. 326; Adams v.. Frye, 3 Met. 103; Bank of Commonwealth v. Curry*, 2 Dana, 142; Bank v. McChord, 4 Id. 191 ; Johnson v. Bank of the U. States, 2 B. Monroe, 310; Camden Bank v. Halls, 2 Green, 583 ; Duncan v. Hodges, 4 M'Cord, 239. *49 §36. SALE OF SPURIOUS SHARES. 125 SECTION V Sale of spurious Shares. 1. Vendor, icho acts bona fide, must refund money. 3. No implied warrant;/ in such case, which will entitle the vendee to special damage. 4. Rule of the stock-exchange, made after the sale, not binding upon parties. n. 1. Discussion of the extent of implied war- ranty. § 36. 1. Where one employed a share-broker to sell in the market what purported to be scrip or certificates of shares in a projected railway company, which subsequently proved to have been forged, and the broker paid the price at which he sold them to the defendant, but being called upon by the purchaser to make good the loss, repaid the money, and a further sum, accord- ing to a * resolution of the committee of the stock-exchange, as to the value of genuine shares in the same railway company, which resolution was passed after the sale of the spurious shares. The defendant declining to pay this further sum, the broker brought an action, claiming to recover, as upon a warranty, that the shares were genuine, with a count for money paid. 1 , In the London & Brighton Rallw. Co. v. Fairclough, 2 Railw. C. 544, the deed of transfer where one name was first inserted, as transferree, and subse- quently that erased, and another inserted, and the deed re-executed, by the vendor, was held void, because it had not been restamped. Post, § 239, 241. An auctioneer, who sells shares at public auction without disclosing the name of his principal, makes himself personally responsible for the fulfilment of the contract of sale. Franklyn v. Lamond, 4 C. B. 637 ; Hodges on Railways, 119. But where one borrowed money, and deposited certificates of railway shares, with blank assignments upon them, as security, and the blanks were not filled up till the shareholder' became bankrupt, it was held that the depositary had a lien upon the shares, for money advanced by him, or paid on calls upon the shares. Dobson sx parte, 2 Mont. 3 D. & De G. 685. And railway bonds issued with the name of the obligee blank, were held negotiable in that form, although not in terms negotiable ; and that any holder for value, before the blanks were filled, might maintain an action in his own name against the company. Chapin v. Vermont & Mass. Railw., 8 Gray, 575. See, also, White v. Vt. & Mass. Railw.,' 21 How. (U. S.) 575. \ Hodges, 4th ed. (1865). This writer thus defines the rule. "If a share- broker, directed to buy shares, buys what is ordinarily bought and sold in the stock-market as shares, he has fulfilled his commission, and cannot be made re- *50 126 TRANSFER OF SHARES. § 36. 2. Upon the latter count the defendant paid into court the money received upon the original sale, with interest. 3. It was held, the plaintiff could not recover upon the ground of the warranty, there being no promise, express or implied, that the certificates were genuine ; and that under the other count he could only recover the money paid defendant. 4. It was also held, that the resolution of the committee of the stock-exchange, made after the transaction was completed, how- ever it might bind the members of that body, could not affect the defendant. 2 sponsible for tlie fraud or misconduct of parties, who may have issued the shares ■without authority. There is no warranty or undertaking, on the part of the broker employed to buy shares or scrip, that the article which merely passes through his hands is anything more than what it purports on its face to be, and what it is generally understood to be in the market. Addison on Cont. 5th ed. 191. But if a broker sell stock-shares or debentures for an undisclosed princi- pal, and sign the sold note, he is responsible for any loss sustained by the pur- chaser, through the fraud of the undisclosed principal, although the purchaser knew that he was dealing with a broker. Royal Exchange Insurance Co. v. Moore, 11 Weekly Rep. 592. We know of no good reason why the vendor of shares in a joint-stock com- pany should not be held responsible for the genuineness of the article the same as any other vendor. It may not follow that either of the brokers of the con- tracting parties could be so held, since, in general, they act merely in a repre- sentative capacity. But the ultimate vendor must be responsible upon an implied warranty to that extent. And as was held, in the last case cited, if the broker withholds the name of his principal he thereby assumes that responsibil- ity, personally. 2 Westropp v. Solomon, 8 C. B. 345. We think it probable that the cases, in this country, would be regarded as favoring the view, that upon a sale of this kind there is an implied warranty that the article is what it purports to be, and, consequently, that the seller is liable to pay its value in the market at the time its spuriousness is discovered. Post, § 235. It would seem that in England it is an indictable offence for persons to conspire to fabricate shares, in addition to the limited number of shares of which a company consists, in order to sell them as good shares, notwithstand- ing any imperfection in the original formation of the company. Rex v. Mott, 2 C. &P. 521 ; Post,§ 37, n. 3. §37. READINESS TO PERFORM. — CUSTOM AND USAGE. 127 SECTION VI. Readiness to perform.. — Custom and Usage. 1 . Vendor must be ready and offer to convey. 2. Vendee must be ready to pay price. 3. General custom and local usage. 4. The party taking the initiative must pre- pare the writings. n. 3. Oral evidence to explain memoranda of contract. § 37. 1. The obligation resting upon the vendor of railway shares is to have, at the time specified in the contract for deliv- ery, a good title to the requisite number of shares, and to mani- fest his readiness to convey, which is usually done by tendering the proper conveyance. But this is not necessary. Any other mode of showing readiness is sufficient. 1 * 2. The corresponding obligations upon the vendee are readi- ness to receive the proper conveyance, at the specified time and place, and to pay the price, and it would seem to prepare a proper conveyance, and tender the same for execution, upon hav- ing a good title made out. 2 3. But the incidents of such contracts are liable to be con- trolled by general and local customs, and usages of trade, the same as other similar contracts. 3 Hence any general known 1 Humble v. Langston, 2 Railw. C. 533; Hannuic v. Goldner, 11 M. & W. 849 ; Hare v. Waring, 3 M. & W. 362 ; Hibblewhite v. M'Morine, 2 Railw. C. 51. In Munn v. Barnum, 24 Barb. 283, it is held that mere readiness to transfer is sufficient in such cases, and that an actual transfer is never requisite, where the purchaser declines to pay the price. s Lawrence v. Knowles, 5 Bing. (N. C.) 399; Stephens v. De Medina, 4 Ad. & Ellis (n. s.), 422; Bowlby v. Bell, 4 Railw. C. 692. 3 Stewart v. Cauty, 2 Railw. C. 616; 8 M. & W. 160. And one who em- ploys a share-broker, at a particular place, to purchase shares, is bound by a usage, affecting the broker, at that particular place. As where the plaintiff, a share-broker in Leeds, bought for defendant ten railway shares to be paid for on delivery. The defendant not being ready to pay the money, the vendor made a resale, at a less price, and called upon the plaintiff for the difference, which he paid without communicating with defendant, all which was done ac- cording to the custom of the Leeds stock-exchange. It was held the plaintiff might recover of defendant the difference, in an action for money paid. Pol- lock v. Stables, 5 Railw. C. 352; s. c. 12 Q. B. 765. *51 128 TRANSFER OF SIIARES. § 37. usage of those negotiating similar business, and which may be fairly presumed to have been known to the parties, or which And where shares had been purchased by a stock-broker, upon which a call had been made, but not then due, by* the rules of the stock-exchange it was the duty of the vendee to pay the call, the vendor having paid it, to enable him to convey, the broker paid the amount to him, and it was held he might recover it of the vendee, as money paid for his use. Bayley v. Wilkins, 7 C. B. 886. And it would seem the party is bound by such usage, though not cognizant of it. Parke and Rolfe, BB., in Bayliffe v. Butterworth, 5 Railw. C. 283 ; Sutton v. Tatham, 10 A. & E. 27. And whei'e the broker could not obtain the certificate of shares for some months, on account of the delay in having them registered by the company, and in the mean time a call was made which he paid, the person for whom he pur- chased having, from time to time, urged the forwarding of the scrip without de- lay, it was held that he could not repudiate the contract, and recover the money advanced to the broker to pay the price of the purchase. McEwen v. Woods, 11 Q. B. 13; 5 Railw. C. 335. And where the defendant gave the plaintiff, a broker on the stock-exchange, an order to purchase for him fifty shares in a foreign railway company, at a time when no shares of the company were in the market, or had in fact issued, but letters of allotment were then, according to the evidence of persons on the stock- exchange, commonly bought and sold as shares, and the plaintiff bought for the defendant a letter of allotment of fifty shares, it was held that a jury might well find that this was a good execution of the order. Mitchell v. Newhall, 15 M. & W. 308; s. c. 4 Railw. C. 300. And where the broker bought scrip certificates, which were sold in the mar- ket, as " Kentish Coast Railway Scrip," and were signed by the secretary of the company, but which were afterwards repudiated by the directors, as having been issued by the secretary, without authority, in an action to recover back from the broker the price paid him by the plaintiff for the scrip, and his commissions, on the ground of it not being genuine, it was held that the proper question for the jury was, whether what the plaintiff intended to buy was not that which went in the market as " Kentish Coast Railway Scrip," there being no other form of that scrip in the market at the time. Lamert v. Heath, 15 M. & W. 486 ; s. C. 4 Railw. C. 302; Ante, § 36. The remarks of Lord Campbell, Ch. J., in the very late case of Humfrey v. Dale, 7 El. & Bl. 266, 20 Law Rep. 227, in regard to the necessity of relax- in<* the rule of the admissibility of oral evidence to explain the import of com- mercial terms and memoranda in written contracts between merchants and business men, are certainly worthy of his lordship's eminent reputation for wis- dom and learning : — " The only remaining question is, having stated a purchase for a third person as principal, is there evidence on which they themselves can be made liable ? Now neither collateral evidence, nor the evidence of a usage of trade, is receiv- able to prove anything which contradicts the terms of a written contract ; but § 37. READINESS TO PERFORM. — CUSTOM AND USAGE. 129 ought to have been, and any local custom, or usage of trade, which was in fact known to both parties, is regarded as if incor- porated into the contract, the parties being presumed to have contracted with reference to it. 3 * But it may be questionable, perhaps, whether the custom in regard to sales of stock, in this country, would require the purchaser to be * at the sole expense of preparing the proper conveyance. It is safe, perhaps, to say, that the party tendering a conveyance, or he who demands it, in practice, ordinarily causes the instrument, required to be exe- subject to this condition both may be received for certain purposes. Here the plaintiff did not seek, by the evidence of usage, to contradict what the tenor of the note primarily imports, namely, that this was a contract which the defend- ants made as brokers. The evidence, indeed, is based on this. But the plain- tiff seeks to show that, according to the usage of the trade, and as those con- cerned in the trade understand the words used, they imported something more ; namely, that if the buying broker did not disclose the name of his principal, it mia;ht become a contract with him, if the seller pleased. The principle on which evidence is admissible is, that the parties have not set down on paper the whole of their contract in all its terms, but those only which were necessary to be determined in the particula»case by specific agreement, and which of course might vary infinitely, leaving to implication and tacit understanding all those general and unvarying incidents which an uniform usage would annex, and ac- cording to which they must in reason be understood to contract, unless they ex- pressly exclude them. To fall within the exception, therefore, of repugnancy, the incident must be such as, if expressed in the written conti-act, would make it insensible or inconsistent. Brown v. Byrne, 3 Ell. & Bl. 703. [After allud- ing to several cases, especially Trueman v. Loder, 11 Ad. & Ell. 589, in which case is found a dictum adverse to admissibility of this evidence, the learned judge continued :] We may refer to Hodson v. Davies, 2 Camp. 530, not as a legal decision opposed to Trueman v. Loder, — for Lord Denman, in his judgment in the latter case, showed that it could not be supposed to carry with it the weight of Lord Ettenborough's decision, — but because both cases, we think, disclose how entirely the minds of lawyers are under a different bias from that which, in spite of them, will always influence the practice of traders which creates the usage of trade. Lawyers desire certainty, and would have a written contract expi-ess all its 1,erms, and desire that no parol evidence beyond it should be re- ceivable ; but merchants and traders, with a multiplicity of contracts preparing on them, and meeting each other daily, desire to write little, and leave unwrit- ten what they take for granted in every contract. It is the business of courts reasonably to shape these rules of evidence so as to make them suitable to the habits of mankind, and such as are not likely to exclude the actual facts of the dealings between parties, when they are to determine on the controversies which grow out of them. The rule to enter a nonsuit must be discharged." See Taylor v. Stray, 29 Law Times, 95 ; s. c. 2 C. B. N. S. 175. VOL. I. 9 * 52, 53 130 TRANSFER OF SHARES. § 38. cuted, to be prepared in the one case and executed in the other. But less will often suffice, where the other party refuses to pro- ceed. 4 *SECTION VII. Damages. — Specific Performance. 1 . Damages, difference between contract price I 2. Equity will decree specific performance of and 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 4 Walford, 262, note, where it is said, " It would seem, that if the vendor fails to make out a title, this dispenses with a tender of conveyance." But if stock is to be delivered on demand, it is necessary to show an actual request to deliver, in order to sustain an action for non-delivery. Green v. Murray, 6 Jur. 728. Where the contract is to deliver stock in a reasonable time, or no time being specified, which the law regards as in a reasonable time, or on or before a day named, it is presumed each party is entitled to the whole time in which to perform. Stewart v. Cauty, 2 Kailw. C. 616 ; s. c. 8 M. & W. 160. It seems that where the deed of settlement required the consent of the directors to the validity of the transfer of shares, it is incumbent upon the vendor to ob- tain such consent ; and where the transfer was duly made, executed, and de- livered, and the money for the price paid, but the directors refused to give their assent, it was held the purchaser might recover back the money paid, and that the return of the transfer was collateral to the contract of purchase, and not a condition precedent to the plaintiffs right to recover. Wilkinson v. Lloyd, 7 Q. B. 27. And where the charter of the company, or the statute, prohibits the transfer of the shares while calls remain due, it has been held that a deed of transfer made, while calls remained unpaid, was altogether null and void, so that the company may refuse to register such a transfer, although the calls have been subsequently paid. It is said it would be necessary to re-execute the deed, after the payment of the calls, before the company could be compelled to register it. Hodges, 121, 122. But it has been said, that if a deed be delivered as an escrow in such case, to take effect when the calls are paid, it may be good. Palteson, J., in Hall v. Norfolk Estuary Co., 8 Eng. L. & Eq. 351. 1 Barned v. Hamilton, 2 Railw. C. 624 ; Humble v. Mitchell, 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 re- *54 §38. DAMAGES. — SPECIFIC PERFORMANCE. 131 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 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. 3 purchase. 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 Railroad, 29 Vt. R. 127. In a recent case in the Common Pleas, Loder v. Kekule, 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 con- tracted 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 be- tween 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 Mountains Railw., 40 N. H. R. 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 St. 626, where the general question of the enforcement of con- tracts 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, 5 Railw. C. 461. Leach v. Fobes, Sup. J. Ct. Mass. 1859. There has been the most controversy in the English courts of equity as bearing upon the question of decreeing spe- cific 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 ; Birmingham v. Sheridan, 10 Jur. N. S. 415. 3 Inge v. Birmingham W. & S. V. Railway Co., 23 Eng. L. & Eq. 601 ; post, § 213. So also in their favor, Old Colony Railw. v. Evans, 6 Gray, 25. 132 TRANSFER OF SHARES. §39 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 assign- ment 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 1 Wynne v. Price, 5 Eailw. C. 465 ; Shaw v. Fisher, id. 461. 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, 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 Eng- land 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. *55 § 39. SPECIFIC PERFORMANCE. 133 3. In the case of Jackson v. Cocker, a query is started by the 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 under- taking, 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/jWithout 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. 4 A court of equity will never, it seems, decree specific performance against a party, where it is not in his power to per- form, 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 3 6 Geo. 1. c. 18. 4 Columbine v. Chichester, 2 Phillips, C. C. 27. 5 Greenaway v. Adams, 12 Vesey, 395, 400; Variok 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 treas- urer, 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 enti- tled to receive, they having no notice of his equitable ownership of the 300 shares. And that although certain information came to the president, while act- ing in some other capacity, that some contract had been made, by which the *56 134 TRANSFER OF SHARES. §40. SECTION IX. Trustee entitled to Indemnity against future Calls. 1. Trustee entitled to indemnity, on general •principles. 2. English courts hesitated in regard to rail- way shares. 3. 4. Cases reviewed. 5. Mortgagees liable, as stockholders, for the debts of the company. 6. The ostensible owner must respond to all responsibilities. §40. 1. It seems to be regarded as the general rule of chancery law, that the trustee of property is entitled to indemnity, for ex- penses bond fide incurred, in the management and preservation of the trust-fund, or estate, either out of the property, or as a per- sonal 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 mort- gage or pledge. And it would seem, that no serious question could ever have arisen upon the subject, but for the strange in- consistencies 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. 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. 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 R. 257 ; Draper v. Gordon, 4 Sand. Ch. 210; Egbert v. Brooks, 3 Harring. 110; Methodist Episcopal Church v. Jacques, 1 Johns. Ch. 450; Story on Bail- ments, § 306, 306 a, 357, 358. 4 7M. &W. 517. 3 Walker v. Bartlett, 36 Eng. Law & Eq. 368. § 40. INDEMNITY AGAINST FUTURE CALLS. 135 * It was hold, by Wig-ra?n, Vice-Chancellor, 4 that where there was a contract for retransfer, claimed by the mortgagor, or found, in express terms, in the contract of pledge, or mortgage, or inferable from circumstances, that this was sufficient ground for implying a contract, by the mortgagor, to indemnify the mortgagee, against liability to the creditors of the company, for debts incurred, while his name remained upon the register of shares, as owner, and a decree was made accordingly. 4. The same learned judge, in the same case, considered, that where the mortgage was made simply as an absolute transfer, subject to redemption, and nothing had passed, binding the mort- gagor to take a retransfer to the shares, the mortgagor was not bound to indemnify the mortgagee against debts incurred after the transfer made in the mortgage, and before the mortgage debt was paid off. But it is here maintained, that the mortgagee has not in such case any right, at law, against the mortgagor, as to payments, which he has been compelled to make, while he re- mained the ostensible owner of the shares, even where a contract for retransfer is shown. But a late English writer upon this sub- ject 5 seems to incline to the opinion that, in such case, an action of trespass on the case might be maintained, against the pur- chaser of shares, who fails to cause his name to be registered as owner, or to indemnify the seller against liabilities after the sale. And the same principle will apply to the mortgagee, after the debt is paid. But all these refinements must now, we think, be regarded as effectually abrogated, by the virtual abandonment, by the English courts, of the rule laid down in Humble v. Lang- ston, and the recognition of the contrary doctrine. 5. It has been held, in this country, that, where B. being in- debted, transferred shares to his creditors, as security, with the power of sale, and upon condition that the shares should be 4 Phene v. Gillan, 5 Hare, 1. In this case, it was held, that where the mort- gagor 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 pro- ceedings 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. 5 Hodges, 122. *57 136 TRANSFER OF SHARES. § 40. returned or accounted for, whenever the debt should be paid, the debt being paid off, and an informal power of retransfer * given the mortgagee, and subsequently a more formal one, the mortgagees were to be regarded as stockholders, until the actual retransfer of the shares, and as such liable to the creditors of the company, under the charter. 6 As the case of Humble v. Langston is not in terms overruled, although it is in principle, we think, we here insert the substance of the opinion of the court in Walker v. Bartlett, as showing the present state of the English law on the subject. 7 6 Adderly v. Storm & Bailey, 6 Hill, 624. Bronson, J., argues the liability of the mortgagees to the creditors of the company, while their names remained on the books of the eompany, as absolute shareholders, on the ground that " they might receive dividends, vote at elections, and enjoy all the rights pertaining to the ownership of the property, and with the privileges they must take the bur- dens of a stockholder." A query is here started whether a retransfer to the mortgagor of the shares, upon the payment of the debt, might not release the mortgagee. " The assignment, as between the parties to it, would have passed the legal interest in the stock." But are the creditors of the company bound to look beyond the register of shares? Kosevelt v. Brown, 1 Kernan, 148 ; Wor- rall v. Judson, 5 Barb. 210; Stanley v. Stanley, 13 Shepley, 191. In Ad- derly v. Storm, it is intimated, that a fraudulent transfer of stock by a solvent owner to an insolvent party, for the purpose of avoiding liability to the credit- ors of the company, might not avail the party, even at law. 7 " The case of Wynne v. Price, 3 De G. & S. 310, shows that in equity the plaintiff would be entitled, under the circumstances of the present case, to in- demnity ; but it was contended for the defendant, that, however the case might be in equity, there was no contract for indemnity to be implied by law ; and the case of Humble v. Langston, 7 M. & W. 517, was relied upon as a direct authority against the plaintiff upon this point ; and the Court of Common Pleas, in the judgment appealed against, considered that it was bound by that deci- sion, though it was intimated that but for that express decision their own judg- ment might have been different. It must be admitted that, in principle, no substantial difference can be taken between that case and the present, except this, — that in Humble v. Langston, the plaintiff claimed to be indemnified by the defendant against all future calls, even though made after the defendant had himself transferred the shares to other persons; and the Court of Ex- chequer, at the end of the judgment, observes, that if there were any analogy in principle between the case of Burnett v. Lynch and that before the court, the defendant's implied promise would only be to indemnify against such calls as should be made while he was beneficially interested, whereas the plaintiff Humble claimed an indemnity against calls made after the defendant had parted with his interest. This, no doubt, is a very important distinction ; and though the *58 §40. INDEMNITY AGAINST FUTURE CALLS. 137 6. It seems most unquestionable that a trustee may be made liable for assessments or calls upon the shares standing in his Court of Exchequer expresses an opinion that there was no contract of indem- nity at all, it adverts to the difference between a claim to indemnify during the time the defendant is beneficially interested, and a claim to be indemnified after he has ceased to be interested. The circumstances of the present case are, therefore, distinguishable from those in Humble v. Langston, and it consequently is not so direct an authority against the plaintiff's claim in the present case, as at first sight it might appear to be. *"It seems to us, therefore, that the circumstances of this case bring it di- rectly within the principle upon which Burnett v. Lynch was decided. In the present case, the defendant entered into no express agreement to pay calls or indemnify, but he accepted the only transfer the plaintiff could give, and which invested him with full power to become the registered owner of the shares when he pleased. That transfer expressed that the transferee took them subject to the same rules as those under which the plaintiff held them, one of which was, that the registered owner should pay the calls. It could hardly have been the intention of the parties, that if the defendant, for his own benefit, omitted to make a perfect transfer, by registration in the company's books, the plaintiff should still continue to pay the calls ; and if that was not the intention, was it not understood between them that the defendant should save the plaintiff harm- less from any calls made during the time when he was virtually owner of the shares? " In Burnett v. Lynch, a lease had been granted to Burnett, in which he cov- enanted to pay the rent and repair the premises ; his executors assigned the lease to Lynch, subject to the performance of the covenant, but without any express covenant or contract by him that he would pay the rent or perform the covenant. The executors were called upon by the landlord, and obliged to pay damages for not repairing, according to the covenant, during the time Lynch was assignee ; the executors brought an action on the case against Lynch, founded on a breach of duty in not repairing. In giving judgment for the plaintiffs, Abbott, Ch. J., says, 'It is true, the defendant entered into no express covenant or contract that he would pay the rent or perform the covenants ; but he accepted the assignment subject to the performance of the covenants; and we are to consider whether any action will lie against him. If we should Bold that no action will lie against him, the consequence will follow, that a man hav- ing taken an estate from another, subject to the payment of rent and perform- ance of covenants, and having thereby induced an undertaking in the other that he would pay the rent and perform the. covenants, will be allowed to cast that burden upon the other person. Reason and common sense show that that never could be intended.' He then goes on to say, that though an action on the case would lie, there might also be an action of assumpsit. " With the distinction of circumstances to which we have already adverted between this case and that of Humble v. Langston, we think that the principle upon which the case of Burnett v. Lynch was decided, is directly applicable to *59 138 TRANSFER OF SHARES. § 41. name, beyond the amount of the trust property. 8 And the transferee of shares, having taken upon himself the position and attitude of owner, cannot be allowed to excuse himself from responsibility by pleading irregularity in transfers, and it makes no difference in this respect whether he hold as trustee or ben- eficially. *SECTION X. Fraudulent Practices to raise the Price of Shares. 1 . Courts of equity will vacate sales so pro- 1 acted bona fide, unless the shares were cured. valueless. 2. Necessary parties. | 6. Managers of company liable in tort to par- 3, 4. Dividends declared when none are earned will vacate sales, and subject directors to indictment. 5. Equity will not interfere where vendor ty injured. * 7 and n. 10. Purchasing shares in another company considered. § 41. 1. All fraudulent practices, either of the shareholders, or directors, resorted to for the purpose of raising the price of shares in the market, where sales have been induced in faith of the truth of such representations, will be relieved against in a court of equity. 1 As where the directors of a joint-stock company, in the present case, and that the plaintiff is entitled to make the rule absolute to set aside the nonsuit, and enter a verdict upon the first count of the declaration, and so much of the pleas as may be applicable to that count." 8 Hoare ex parte, 2 Johns. & Hem. 229 ; s. c. 8 Jur. N. S. 713. 1 Stainbank v. Fernley, 9 Simons, 556. And in a very recent case, the plaintiff, a director in a bank, who had been such from its organization, who usu- ally attended the meetings, and was actually present and took part in the pro- ceedings of the board of directors when the last dividend was declared, having purchased from the cashier of the institution twenty shares of the capital stock, brought an action to have such contract rescinded, and to recover back the money paid, on the ground of false representations and concealments by the cashier as to the value of the stock and the condition of the bank at the time of the purchase : Held, that the plaintiff was not estopped from setting up his actual ignorance of the condition of the bank at the time of the sale. That although the purchaser was a director of the bank, having the means or knowledge, he was not in the particular transaction chargeable with notice of the condition of the bank. That if he was actually ignorant of its condition, the fraudulent vendor *C0 § 41. PRACTICES TO RAISE THE PRICE OF STOCK. 139 order to sell their shares to advantage, represented in their re- ports, and by their agents, that the affairs of the company were in a very prosperous state, and declared large dividends, at a time when the affairs of the company were greatly embarrassed. 2. A person who had been induced, by these means, to pur- chase shares of one of the directors, filed a bill against that director, praying to be paid his purchase-money and offering to retransfer the shares ; a demurrer for want of equity, and be- cause all the other partners in the transaction ought to have been made parties, was overruled. But where a bill was filed against the public officer of a jount-stock bank, charging a simi- would be equally responsible to him for the deceit as to any stranger to the in- stitution. That it was not a case in which the plaintiff was legally bound to know the truth or falsity of the vendor's representations. Held, also, that the evidence in such action plainly showing that at the time of the alleged sale and transfer of the stock, on the 29th August, 1857, the bank was, by the application of all the ordinary tests, sound, solvent, and prosperous, and the stock worth all that the defendant had represented it to be, the plaintiff could not be allowed to show the contrary by introducing in evidence what pur- ported to be a certified copy of proceedings had in November, 1857, on the pe- tition of certain stockholders for the re-establishment of the bank. Lefever v. Lefever, 30 N. Y. R. 27. In the very recent case of Smith v. The Reese River Silver M. Co., 12 Jur. N. S. 616 (April, 1866), where a person was induced to take shares in a com- pany on the faith of a statement in the prospectus, as to the nature of the prop- erty contracted to be purchased, which statement the promoters had no ground for believing to be true, and which turned out to be untrue, Sir W. Page Wood, V. C, held, he was entitled to an injunction restraining the company from enforcing calls against him, notwithstanding the articles of association to which the prospectus referred would have informed the purchaser that the state- ment in the prospectus was not justified. The learned judge said : " He is not bound to call at the office for the mere purpose of ascertaining whether the rep- resentations are false or not. He was entitled to rely upon the representations made to him as being true to the knowledge of the directors." But the party who claims to be injured by such fraudulent practices of direc- tors and other agents of corporations must bring his action for relief at the ear- liest pi'acticable opportunity after having learned the probable fact of such fraud- ulent practices. Clarke v. Dickson, 1 El. Bl. & El. 148, s. c. 5 Jur. N. S. 1029 ; Hop & Malt Company, 12 Jur. N. S. 322. One who purchases upon the facts stated in a prospectus must be held to have notice of facts stated in other docu- ments expressly referred to unless there is special grounds for presuming the contrary. lb. 140 TRANSFER OF SHARES. § 41. lar fraud, through the fradulent representations of the directors, in their reports, as to the prosperous state of the company's affairs, and that the plantiff had thereby been induced to pur- chase five hundred shares in the bank, and praying that the sale might be declared void as between him and the company, and that they might be decreed to repay the purchase-money, it was held, that as the litigation was between one member of the part- nership and the other members, the public officer was improperly made a party, as representing the company, and a demurrer was allowed. 2 But in a late case before the Court of Appeal in Chancery, it was decided that the directors of a railway company are in the position of trustees, and if the purchaser has not by his own conduct affected his rights, the company cannot, as against him, retain money acquired from a fraudulent sale of their property to him, through the false representations of their directors. But the court held that the plaintiff was not entitled to a decree against the directors, but was entitled to a decree against the company for his money and interest. 3 And it seems to be settled, by the decision of the House of Lords, that in England and in Scotland, for any fraudulent act done by the directors, without the range of the powers of the com- pany, whereby third persons suffer damage, they are personally liable to an action ; but for all such acts within the power of the body of the shareholders to sanction, although the directors might not Jiave been justified in what they were doing, there could be no right of action. 4 And a director cannot screen himself from responsibility for any imposition which is brought upon others by means of the cir- 2 Seddon v. Connell, 10 Simons, 58. It was further held, in this case (10 Si- mons, 79), that it is not competent for the party in such case to file a bill against the company and some of the directors, praying, that if he is not entitled to re- lief against the company, he may have it against the directors, and that such a bill is demurrable, on the ground that the .prayer for relief should be absolute, for relief against the directors, in order to maintain the bill against them. But it is not necessary to make all the parties to a fraud defendants in a bill for relief. 8 Conybeare v. New Brunswick & Canada llailw. & Land Company, 6 Jur. N. S. 518. 4 Davidson v. Tulloch, 6 Jur. N. S. 543. § 41. PRACTICES TO RAISE TEE PRICE OF STOCK. 141 dilation of a prospectus through his instrumentality, upon the ground that the document is capable of a construction by which it may be regarded as true. It is for the jury to say whether that is the natural sense. 5 And it is not necessary that there should have been any direct communication between the plain- tiff and defendant in order to subject the defendant to an action for false representation. If the defendant authorized the circu- lation of the prospectus before the public, containing false repre- sentations, by which the plaintiff was misled, it is the same as if the defendant had made such representations to him personally. 5 And the fact that other inducements were also held out to plain- tiff by other parties by which he was partially influenced, will not excuse the defendant. 5 But the representation of an officer of the company as to the effect of deeds, which it forms no part of his duty to expound, will not release the party executing the deed from his liabil- ity.s * 3. The declaring of dividends by the directors, where none have been earned, if done by them for the purpose of fictitiously enhancing the price of shares, for their own benefit, is regarded as such a fraud as will relieve a party who has purchased shares in faith of such facts, at prices greatly beyond their value, 7 and the transfer of the shares will be set aside. 4. In this case, 7 Lords Campbell and Brougham concurred in saying : " Dividends are supposed to be paid out of profits only, and where directors order a dividend to be paid, when no such profits have been made, without expressly saying so, a gross fraud is practised, and the directors are not only civilly liable to those whom they have deceived and injured, but are guilty of conspiracy, for which they are liable to be prosecuted and pun- ished." 5. Where both parties labored under the same delusion in regard to the value of stock, relief could not be granted, of course, on the ground of fraud in the sale, and a court of equity 6 Clark v. Dickson, 5 Jur. N. S. 1029. See also Nicol ex parte, in re Royal British Bank, 5 Jur. N. S. 205. 6 Athenaeum Life Ins. Co. in re Sheffield, 5 Jur. N. S. 216; s. c. Johnson, Eng. Ch. 451. 7 Burnes v. Pennell, 2 House of Lords' Cases, 497. *61 142 TRANSFER OF SHARES. § 41. will not ordinarily interfere to set aside a sale, on the ground of mutual misapprehension as to the state and condition of the subject-matter, unless in extreme cases, as where that is sold as valuable which is wholly valueless, or does not exist. 8 To con- stitute a fraud in such cases, it is requisite, ordinarily, that the parties should have been upon unequal footing in regard to their means of access to the knowledge of the true state of the com- pany's funds and property, and that the party gaining the advan- tage in the bargain should, in some way, participate in giving currency to the false estimate of its condition, beyond the mere fact of repeating the report of the directors, where both parties have equal means of judging of its correctness. 6. It seems to be regarded as settled law, that in case of such false representations to raise the price of stocks, and damage thereby sustained, the suffering party may maintain an action of tort against the party making the false representation, although it were not made directly to such injured party, there being no necessity for any privity between the parties to support an action of tort, for a false representation. But, where the action is ex * contractu or quasi ex contractu, some privity is indispensable to the maintenance of the action. 9 7. It has recently been decided that a bond fide sale and transfer of property of one company to another, in consideration of shares in the one company being transferred to the other, is not such a return of capital as would be a contravention of the English statute, which is in confirmation of the general rule of law, prohibiting, the conversion by corporations of capital into income, and thus virtually reducing the stock of the company be- low the requirements of the charter ; and on the other hand giving 8 1 Story's Eq. Jur. § 142 ; Hitchcock v. Giddings, 4 Price, 135, 141 ; 2 Kent, Comm. 469. 9 Gerhard v. Bates, 20 Eng. L. & Eq. 129. In this case the defendant was one of the promoters and managing directors of a joint-stock company, and, in offering the shares for sale, had guarantied a certain semi-annual dividend to all who should purchase, but without any other communication with the plaintiff personally, but the plaintiff purchased upon the faith of such general guaranty or representation ; and it was held that he could not maintain an action upon the guaranty, but that he might recover in tort, as for a fraudulent representa- tion. Post,§ 175, 187. *62 * §42. LIABILITY OF COMPANY FOR NOT REGISTERING. 143 the shares of the company a false value in the market by reason of fictitious dividends. 10 8. But the bond fide purchaser of shares fraudulently issued acquires the same right as other shareholders, unless he buys after the company is in the process of liquidation ; and even in that case he may come in for his equal proportion of the assets, by proving that he bought of one who was a bona fide holder be- fore the company was subjected to the process of being wound up. 11 But a bond fide sale of shares in a company, entered into after the presentation, but before the first advertisement for wind- ing up the company, both vendor and purchaser, being ignorant that such a petition was pending, was held valid to have passed the title. 12 SECTION XI. Liability of Company for not registering Transfers. 1. Tlie company liable to action. 2. May be compelled to record transfers by mandamus. 3. But not compellable to record mortgages of shares. 4. Grounds of denying mandamus. 5. Bill in equity most appropriate remedy. 6. Rule of damages. • § 42. 1. It seems to be settled in England, that an action will 10 Cardiff C. & C. Co. in re Norton, 11 W. Rep. 1007. See also McDou- gall v. Jersey Imp. H. Co., 10 Jur. N. S. 1043. This point of one company taking shares in another company is discussed, to some extent, in the Court of Chancery Appeal in the recent case of Great Western Railw. Co. v. Metropol- itan Co., 9 Jur. N. S. 562. There can be no doubt, as a general rule, this will not be allowed, unless by the express sanction of legislative permission. And it was here considered, that such an express sanction will not be construed to ex- tend to additional shares, issued by the same company, and expressly required to be allotted to the existing shareholders. Vice- Chancellor Wood, when the case was before him, cited the case of Solomons v. Lang, 12 Beav. 377, as establish- ing the right of the defendant in the suit, to raise the question of the plaintiff's right to take these additional shares, beyond the amount which the special leg- islative permission authorized. The case of the Attorney-General v. The Great Northern Railw. Co., 6 Jur. N. S. 1006, is also cited by the learned judge as analogous to the case then before him. 11 Barnard v. Bagshaw, 1 H. & M. 69. 12 Emmerson's case, 12 Jur. N. S. 494. 144 TRANSFER OF SIIAEES. § 42. lie against a joint-stock company, who neglect or refuse, upon proper request, to register shares and deliver new certificates, after the deed of transfer has been sent to the secretary. Dam- ages may be recovered, it seems, by reason of such refusal of the company, whereby the party is deprived of the right to attend and vote at the meetings of the company, and especially where calls are made upon the shares, and in consequence of nonpay- ment the shares are declared forfeited and sold. 1 * 2. There can be no question probably, in this country, that where the company refuse, on reasonable request, to make the proper entry upon their books of the transfer of shares, whereby the owner is liable to be deprived of any legal right, or pecuniary advantage, the company may be compelled to do their duty, in the premises, by writ of mandamus. 3. But it has been held, that the company are not bound to register trust-deeds, or mortgages, and especially such as contain other property, or the stock of other companies. The mandamus was refused in such a case, in the Queen's Bench, so late as 1 Hodges on Railways, 123; Catchpole v. Ambergate Railw. Co., 1 Ellis & Black. Ill ; 16 Eng. L. & Eq. 163. See also Wilkinson v. Anglo California Gold Co., 12 Eng. L. & Eq. 444. In regard to the right to sustain a writ of mandamus in England, to compel such transfer, upon the books of the company, see Rex v. Worcester Canal Co., 1 M. & R. 529 ; Regina v. Liverpool, Man- chester, & Newcastle-upon-Tyne Railw. Co., 11 Eng. L. & Eq. 408; Sargent v. Franklin Insurance Co., 8 Pick. 90. So also an action on the case will lie for not transferring stock. The rule of damages, where the stock has been sold, as the property of the vendor, is the value of the shares at the time of the re- fusal, 8 Pick. 90, or it has sometimes been held, the highest value, between the time of refusal and the commencement of the action. Kartright v. Buffalo Commercial Bank, 20 Wend. 91 ; s. c. 22 Wend. 348. And some cases ex- tend it even to the time of trial. But see ante, § 36, 38. Where stock in a railway is purchased and registered in the name of a mar- ried woman, out of her earnings, she and her husband may sue jointly for divi- dends, and if she sue alone, it is only ground of abatement. Dalton v. Midland Railw. Co., 20 Eng. L. & Eq. 273. Stock cannot be transferred so as to pass the title after the dissolution of the corporation, the shareholders being then only entitled to a share in the assets. James v. Woodruff, 2 Denio, 574. Where a company have registered a transfer, which is alleged to be a forgery, and are threatened with a suit from both the transferrer and transferee, the court will not grant an interpleader. Dalton v. Midland Railw. Co., 22 Eng. L. & Eq. 452. *63 § 42. LIABILITY OF COMPANY FOR NOT REGISTERING. 145 May, 1856, and upon the ground, as stated, by Lord Campbell, Ch. J., that " if the company were bound to register this deed, they must become the custodians of it, and must incur great responsibility as to its safe custody, and that therefore conven- ience requires that they should only be bound to register mere transfers, passing the legal title, and showing who is the legal owner of the shares." 2 4. But a mandamus to compel the registry of the transfer of shares in a railway company to an infant, 3 was denied. And the court of equity declined to interfere to compel the registry of the transfer of shares when the company are denied the oppor- tunity of inspecting the certificates by their directors. 4 5. The more effectual, and at present the more usual, remedy against corporations for refusing to allow the transfer of stock upon their books into the name of the real owner is by bill in equity. And in one case, where the party whose stock had been allowed by the bank to be transferred into the names of those who had purchased it under forged powers of attorney sought redress by an action at law, the court said, " We cannot do justice to this plaintiff unless we hold that the stocks are still his," and therefore denied the action for the value of the stocks, but allowed a 1 Regina v. General Cemetery Co., 36 Eng. L. & Eq. 126. * Reg. v. Mid. Counties & Sh. Junction Railw. Co., 9 Law T. N. S. 151. But the practice of compelling the registry of transfers, by mandamus, seems •well established, even where they are not of a character to induce the most fa- vorable consideration, as where it was a transfer to a pauper to enable the trans- ferror to get rid of liability, it being intended to be out and out, with no secret trust for the transferror. Reg. v. Same, Id. 151. The transfer of shares for special purposes is so frequent, and the motives and occasions, are so various, that it could not be expected to give an abstract of all the cases. As a general rule, one who understandingly consents to have shares transferred in his name upon the public registry of shares, must be content to assume all the responsi- bility towards the public and the other shareholders not connusant of the special contract, which any other shareholder would incur. But as between the compa- ny and the purchaser there may be special grounds of relief. Coleman ex parte, 1 De G. J. & Sm. 495 ; Grady ex parte, Id. 488 ; Barrett ex parte, 10 Jur. N. S. 711 ; Saunders ex parte, Id. 246. Any transaction of this kind will not be disturbed, after considerable lapse of time. Spackman ex parte, 10 Jur. N. S. 911 ; Lane ex parte, Id. 25 ; Spackman ex parte, reversed, 11 Jur. N. S. 207. * East Wh. M. M. Co. in re, 33 Beav. 119. vol. i. 10 146 TRANSFER OF SHARES. §43. recovery for the dividends which had been declared after the transfer. 6. And there is the same difficulty in compensating the pur- chaser of stocks, where a transfer on the books has been denied in an action at law. In some cases this has been attempted to be done by allowing the party to recover the highest market price of the stock between the refusal to transfer and the trial. But the only rule at all analogous to settled principle seems to be that the corporation shall pay the value of the stock at the date of their refusal to transfer it, as that is the time when the corporation became in default, and when by said default the stock, as between the parties, became theirs. 5 The question of the effect of forged and fradulent transfers is very ably discussed by the court of Chancery Appeal in Tayler v. Great Indian Peninsular Kail- way. 6 SECTION XII, When Calls become Perfected. 1 . Calls are made when the sum is assessed, notice may be given afterwards. 2, 3. Directors the proper authority to make calls. 4. The manner of giving notice and of proof. § 43. 1. The English statute of 1845, called the Companies Clauses Consolidation Act, requires all calls to be paid before any valid transfer can be made. Under this statute, and similar provisions in special charters, it has often been made a question, when a call "may be said to be made. It seems to be considered that the word call, in this connection, may refer to the resolution * of the directors, by which a certain sum is required to be paid to the company, by the shareholders, 1 or secondly to the notice to 5 Pinkerton v. M. & L. Railw., 1 Am. Law Reg. N. S. 96 ; s. c. 42 N. H. R. 424. 6 5 Jur. N. S. 1087 ; s. c. 4 De G. & J. 559. See post, § 193, pi. 12. And see Building Association v. Sendemeyer, 50 Penn. St. 6 7. 1 Ex parte Tooke, In re The Londonderry and Coleraine Railw. Co., 6 Railw. C. 1 (1849) ; North American Colonial Association of Ireland v. Bentley, 19 L. J. (Q. B.) 427 ; 15 Jur. 187. A resolution of the ttbard of directors requiring the stockholders to pay an in- *64 § 43. WHEN CALLS BECOME PERFECTED. 147 the shareholders of the assessment, and the time and place at which they will be required to make payment, and the amount to be paid. But it seems finally to be settled, that the company are not obliged to regard any transfer, made after the resolution of the directors, making the assessment, which need not specify the time of payment, but that may be determined, by a subse- quent act of the board. 2 2. It seems the directors, and not the company, are the proper parties to make calls, under the English statutes. 3. This seems to have been decided upon the general ground of the authority of the directors. 3 stalment of ten per cent every thirty days, on all cash subscriptions, until the whole is paid, and that due notice thereof be given, is admissible evidence of calls for the whole subscription. It was here considered that the words " month,'' and " thirty days," used in different portions of the act, must be considered of the same import. Heaston v. Cincinnati & C. R. R., 16 Ind. R. 275 ; Sands v. Sanders, 2G N. Y. R. 239. 2 Great North of England Railw. Co. v. Biddulph, 2 Railw. C. 401 ; s. c. 7 M. & W. 243 ; Newry and Enniskillen Railw. Co. v. Edmunds, 5 Railw. C. 275 ; s. c. 2 Exch. 118, 122. Parke, B., in The Ambergate, &c, and Eastern Junc- tion Railw. Co. v. Mitchell, 6 Railw. C. 235 ; s. c. 4 Exch. 540 ; Regina v. Lon- donderry & Coleraine Railw. Co., 13 Q. B. 998. Unless there is something in the subscription, or the charter and by-laws of the company requiring notice of calls, or making the subscription payable upon calls, it is said in Lake Ontario A. & N. Y. R. v. Mason, 16 N. Y. Court of Appeals, 451, that it is not indispensable that notice of calls should be given the subscribers before suit. But this seems contrary to the general course of decision upon the point, and somewhat at variance with the idea of a call, or assessment upon subscriptions to stock. And such seems to be the general understanding of the rule in the American courts. But these questions will depend very much upon the special provisions of the statutes, in the different states, by which the matter is controlled, and somewhat upon the special terms of the contract of subscription. Heaston v. Cincinnati & C. R. R., 16 Ind. R. 275. Thus, in the present case it was held the general railroad law of Indiana did require notice and a personal demand before proceeding to forfeit the stock, but not before suit to recover instalments ; that as to calls the statute required the subscribers to take notice of the action of the directors. It is further said, that where the articles of association or the preliminary articles of subscription, or both combined, contain an undertaking to pay the amount subscribed on certain terms and conditions, an action will lie to enforce the stip- ulations upon proof of the subscription and the performance of the conditions. 3 Ambergate, N. & B. & Eastern Junction Railw. Co. v. Mitchell, 4 Exch. 540. Pollock, Ch. B. " The next objection is, that the directors made these 148 TRANSFER OF SHARES. § 44. 4. The question of what shall amount to a good call, and how the same may be shown in court, is considerably examined in Miles v. Bough. 4 It is here decided, that no person could be sued for nonpayment of a call till he had received due notice thereof, although the statute did not require notice in express terms : that an order to pay the money at a given broker's was a good call ; that in the declaration it was sufficient to allege that the calls were made and the defendant duly notified, with- out further specification of particulars ; and that the jury may infer sufficient notice from the fact of an express promise to pay, notwithstanding it appeared that a defective notice had been sent, unless it appeared that was the only notice given, when the case must be decided upon the sufficiency of the notice in fact given. SECTION XIII. Transfer by Death, Insolvency, or Marriage. 1 . Mandamus lies to compel the registry of I 4. Notice requisite to perfect the title of mart- successor. 9 a 9 ee - 3. In case of death, personal representative 5. Stock in trust goes to new trustees. liable to calls. 6. Assignees of insolvents not liable for the debts of the company. § 44. 1. The title to shares in a railway is liable to transfer by the death, bankruptcy, or insolvency of the proprietor, or by * marriage of the female owner of such shares. In such case the English statute requires a declaration of the change of owner- ship, to be filed with the secretary of the company, and the name of the new owner is thereupon requiried to be entered upon the calls ; but they were competent to do so, as they may do all things, except such as are to be done by the shareholders at a general meeting ; and there is noth- ing in the act which makes it necessary that the company should make calls at a general meeting." Parke, B. " The directors may exercise all the powers of the company ex- cept those which are to be exercised by the company at their general meeting, and the power of making calls is not such a power as is required to be so ex- ercised." 4 3 Q. B. 845. Defective notice by publication is not aided by personal notice of a shorter time. Sands v. Sanders, 26 N. Y. R. 239. *65 §44. TRANSFER BY DEATH, INSOLVENCY, OR MARRIAGE. 149 register of shareholders. A mandamus will lie to compel the clerk to make the proper entry in such case. 1 2. These incidents are so much controlled by local laws, in different jurisdictions, that it would scarcely comport with our object to state more than the general principles affecting them. In most of the United States all property, (especially personal estate, as railway shares,) in the first instance, upon the decease of the proprietor, vests in his personal representative, in trust, first for the payment of debts, and afterwards for legatees, or in default of tliem, the heirs of such proprietor. 3. And so far as regards voting upon such shares, the title of the executor or administrator will ordinarily be sufficient. Before the name of the executor or administrator is entered upon the books of the company, as a shareholder, the estate only could be held liable for calls probably, and perhaps the same rule of liabil- ity would obtain after that. 2 But in general where shares in a joint-stock company are bequeathed specifically, the legatee takes them subject to all future calls. 3 But where the payment of future calls is indispensable to bring the shares into the state in which the testator regarded them in his will, such calls should be paid by the estate. 4 4. In case of death or insolvency, the title of a mortgagee first notified to the company, will commonly have priority. 5 Notice to the company is necessary to perfect the title of a mortgagee, in case of bankruptcy or insolvency. 6 1 Rex v. Worcester Canal Company, 1 M. & R. 529. 2 Fyler v. Fyler, 2 Raihv. C. 873, s. c. 3 Beav. 550 ; Jacques v. Chambers, 4 Railw. C. 499. But the administrator or other personal representative of a de- ceased shareholder, may, under the recent English statute, the Common-law Procedure, maintain an action against the company for refusal to register his name, as successor, to the title to the shares, and after having recovered damages, he is entitled to a mandamus to compel the company to register his name. He is also entitled to the prerogative writ of mandamus in such cases at common law. Norris v. The Irish Land Co., 30 Law Times, 132. 8 Blount v. Hipkins, 7 Sim. 43, 51 ; Jacques v. Chambers, 2 Coll. 435 ; Clive v. Clive, Kay, 600; Wright v. Warren, 4 De G. & Sm. 367 ; Adams v. Ferick, 26 Beav. 384. 4 Armstrong v. Burnet, 20 Beav. 384. 5 Cumming v. Prescott, 2 Yo. & Coll. Eq. Exch. 488. 6 But where all parties are partners, notice will sometimes be implied. Ex 150 TRANSFER OF SHARES, §45. 5. As to the title of the bankrupt, all shares standing upon the register of the company in his name will be regarded as under his control, order, and disposition, and will, under the English statutes, go to the assignees. 7 But stock in any incorporated company standing in the name of the bankrupt, as trustee, is to be transferred by the assignee to the name of new trustees, and a court of chancery will so order. 8 6. The assignees of an insolvent estate, a portion of whose assets consists of shares in a manufacturing corporation, are not * liable under special statutes, making shareholders liable for the debts of the corporation. That is a provision of positive law, and is to be construed strictly. 9 SECTION XIV. Legatees of Shares. 1 . Entitled to election, interest, and new shares. 2. Sfiares owned at date of will pass, although converted into consolidated stock. 3. Consolidated stock subsequently acquired will not pass. § 45. 1. Legatees of railway shares have the election out of which class of shares their legacy shall be paid, when there is more than one class of the same description found in the will. And they are entitled to the income of the shares, after the death of the testator, and to receive any advantage, by way of new shares resulting from the ownership of the shares. 1 But a specific legatee of shares is not entitled to a bonus on such shares, declared after the decease of the testator, but arising out of moneys due the company from the testator, and which parte Waitman, 2 Mont. & Ayr. 364 ; Duncan v. Chamberlayne, 11 Simons, 123 ; Etty ?;. Bridges, 2 Yo. & Coll. 486. 7 Shelford, 118-121. 8 Ex parte Walker, 1 9 Law J. Bank. 3. 9 Gray v. Coffin, 9 Cush. 192. 1 Jacques v. Chambers, 4 Railw. C. 205 ; Tanner v. Tanner, 5 Railw. C. 184 ; S. C. 11 Beav. 69. And it is held in this last case, that upon a bequest of rail- way shares and all right, title, and interest therein, money paid beyond the calls will pass to the legatee. *66 §46. SHARES IN TRUST. 151 claim was compromised by his executors, but such bonus belongs to the general fund of personal estate. 2 And such legatee must bear the calls which are made after the testator's death, unless there is something in the will to show a different intent. 3 2. A bequest of the testator's railway shares, of which he should be possessed at his decease, was held to pass such rail- way shares specifically named in the will as the testator had at the date of his will, although subsequently converted into con- solidated stock of the same company, by a resolution of the company. 3. But that other consolidated stock of the same company, owned by testator at his decease, did not pass under the will, the same having been purchased after the execution of his will. 4 SECTION XV. Shares in Trust. 1,2. Company may safely deal with regis- 1 3. But equity will protect the rights of cestais tered owner. que trust. § 46. 1. By the English statute, railway companies are not bound to see to the execution of trusts in the disbursement of * their dividends, but are at liberty to treat the person in whose name the shares are registered as the absolute owner. It would seem that in case of the bankruptcy of a shareholder in a joint- stock company, a court of equity will sometimes protect trust funds, although registered in the name of the bankrupt, both from the claim of the assignee and the company, who have made advances to the nominal owner, upon the faith of his be- ing the true owner, but without any pledge of the stock. 1 a Maclaren v. Stainton, 6 Jur. N. S. 360 ; Loch v. Venables, 6 Jur. N. S. 238. 3 Day v. Day, 6 Jur. N. S. 365. * Oakes v. Oakes, 9 Hare, 666. 1 Pinkett v. Wright, 2 Hare, 120. This is a very elaborate opinion of the learned Vice-Chancellor Wigram, upon the subject of protecting the interest of cestuis que trust in the stock*of a banking company, standing in the name of a *67 152 TRANSFER OF SHARES. § 46 a. 2. In general, in this country, it is believed railway companies will be protected in dealing bond fide with the person in whose name shares are registered on the books of the company, as the absolute owner, notwithstanding any knowledge they may have of the equitable interest of third parties. 3. But there can be no question, a court of equity will always protect the interest of a cestui qui trust, when it can be done without the violation of prior or superior equities, which have bond fide attached. SECTION XVI. The extent of Transfer requisite to exempt from claim of Creditors. 1. Bow transfer of stock perfected as to j 3, 4. In some of the states no record required. creditors. n. 3. Question further considered. 2. Reasonable time allowed to record transfer. I § 46. a. 1. The question of what constitutes a valid transfer of shares in a joint-stock corporation, so as to exempt them from attachment and levy by creditors of the transferror, is considerably discussed in a recent case in New Hampshire by a judge of large experience, and the result reached, that upon a pledge of stock in a railway corporation in New Hampshire, there should be such delivery as the nature of the thing is capable of, and to be good against a subsequent attaching creditor the pledgee must be clothed with all the usual muniments and indicia of ownership ; that by the laws of New Hampshire, a record of the ownership of trustee who had become bankrupt. The trustee was also the proprietor of shares in his own right, all standing in his name, without anything on the books of the company to distinguish which were trust funds. It was held that the trustee must be presumed to have pledged such stock as belonged to himself and not that of his cestuis que trust, and that shares which stood in the name of the trustee at the time of the bankruptcy, and thencefor- ward remained in his name, might fairly be presumed to be identical with those in which the trust funds were invested, the number of shares being the same. Notice to the company is indispensable to create an equitable mortgage of railway shares. Ex parte Boulton v. Skelehley, 29«Law Times, 71. §46(2. TRANSFER EXEMPT FROM CREDITORS. 153 shares must be kept, by domestic corporations, within the state, and by officers resident there ; and that on the transfer of stock the delivery will not be complete, as to creditors, until an entry is made upon such stock-record, or it be sent to the office for that purpose, and the omission thus to perfect the delivery will be prima facie, and if unexplained conclusive evidence of a secret trust, and therefore, as matter of law, fraudulent and void as to creditors. 1 2. But in the case last cited it is said that when 2 the transfer is made at a distance from the office and the old certificate sur- rendered and a new one given by a transfer agent residing in a neighboring state, proof that the proper evidence of such transfer was sent by the earliest mail to the keeper of the stock record to be duly entered, although not received until an attachment had intervened, would be a sufficient explanation of the want of delivery and the transfer would be good against the creditor. Any unreasonable delay in perfecting the record title to such shares leaves them liable to the claims of creditors. 3. But where the charter of the company or the general laws of the state contain any specific restriction or requirement in re- gard to the transfer of shares, it must be complied with or the title will not pass. 2 4. In a recent case in New Jersey, 3 it seems to be considered that nothing more is required to make an effectual transfer of stock in a bank, even as against creditors, than an assignment of 1 Pinkerton v. Manchester & Lawrence Railw., 1 Am. Law Reg. N. S. 96 ; s. C. 42, N. H. R. 424. 8 Fisher v. Essex Bank, 5 Gray, 373 ; Sabin v. Bank of Woodstock, 21 Vt. R. 362 ; Pittsburgh & Connellsville R. Co. v. Clarke, 29 Penn. St. 146. 3 Broadway Bank v. McElrath, 2 Beasley, 24. We think it proper to say, that there is considerable difference in the decisions of the different states as to the point of time from which the transfer of equitable titles is to be reckoned, as between purchasers for value and creditors. It is generally considered that the transfer takes effect from the date of notice to the trustee, who holds the legal title, subject to all equities, and these do not attach ordinarily until after notice brought home to the trustee. Some of the states regard the equitable rights of the purchaser as dating from the period of the actual purchase, provided notice to the trustee be given within reasonable time after. We have discussed the question and the cases, to some extent, in Rice v. Courtis, 32 Vt. R. 460 ; 1 Story Eq. Ju. 400 b, Redf. Ed. 154 TRANSFER OF SHARES. § 46 a. the certificates and a delivery to the assignee, and that this will be regarded as effectual against an attaching creditor without notice, even where the charter of the company declares the stock personal estate, and provides that " it shall be transferable upon the books of the corporation," and also, " that books of transfer of stock shall be kept, and shall be evidence of the ownership of said stock in all elections and other matters submitted to the de- cision of the stockholders." §47. PARTY LIABLE FOR CALLS. 155 ♦CHAPTER IX ASSESSMENTS OR CALLS. SECTION I. Party liable for Calls. 1 . Tlie party upon the register liahlefor calls. 2. Bankrupts remain liable for calls. 3. Cestuis que trust not liable for calls in law or equity. 4. Trustee compelled to pay for shares. 5. One on registry may show his name im- properly placed there. § 47. 1. It seems to be settled law that the registered owner of railway shares is liable for all calls thereon, so long as his name remains upon the register. 1 The effect of the transfer of railway scrip is only to convey an equitable interest in the shares, with the right to have the shares formally assigned to him, and his name entered upon the register as a shareholder. 1 2. In case of bankruptcy, the bankrupt remains liable for all calls, unless the names of the assignees are registered on the books of the company, as this is not regarded as a debt 1 Midland Great Western Railw. Co. v. Gordon, 5 Railw. C. 76 ; s. c. 16 M. & W. 804 ; Mangles v. Grand Collier Dock Co., 2 Railw. C. 359 ; Sayles v. Blane, 6 Railw. C. 79 ; West Cornwall R. v. Mowatt, 15 Q. B. 521. In this case it was said, even if the transaction by which the title to the stock and the reg- istry of defendant's name were made, were illegal, it could not avail him in an action for calls. See post, § 236. Long Island R. Co., 19 Wend. 37 ; Mann v. Currie, 2 Barb. 294 ; Hartford & N. H. R. v. Boorman, 12 Conn. R. 530; Mann v. Cooke, 20 Conn.R. 178;Rose- velt v. Brown, 1 Kernan, 148. The registry-book of shareholders is prima facie evidence of the liability of those whose names appear upon it, td calls, although irregularly kept. Birmingham R. v. Locke, 1 Q. B. 256 ; London Grand J. R. v. Freeman, 2 M. & G. 606 ; Same v. Graham, 1 Q. B. 271 ; Aylesbury R. v. Thomson, 2 Railw. C. 668. This last case holds that the purchaser of shares is only liable for calls made after his name is upon the register. The company may, by its charter, and probably by a by-law, provide that the original sub- scriber shall be holden for all calls, or until a certain amount is paid in. Vicks- burg, Shreveport, & Texas Railw. v. McKeen, 14 La. Ann. 724. *68 15P> ASSESSMENTS OR CALLS. § 47. payable in future, and which may be proved under the commis- sion. 2 * 3. The trustee of shares, whose name appears upon the books of the company, is alone liable for calls, and the company have no remedy in equity for calls against the cestui que trust? But if a shareholder when the company is in extremis makes a colorable transfer to an irresponsible person, it will not be held to relieve him from liability to contribute. 4 But in the absence of fraud or mala fides the cestui que trust cannot be sub- jected to a call, although he may be compelled to indemnify his trustee. 5 But it seems finally to be settled in the English Court of Chancery, that a shareholder may transfer his shares in an abortive company, where such shares pass by delivery to an in- solvent person, for the purpose of getting rid of liability to con- tribute to its responsibilities, provided the transaction be a real one, and not a false or hollow contrivance. 6 But where the trans- action exhibits no motive except escape from the liability of the company, and especially where it transpires after the company is publicly declared insolvent, it will be regarded as merely color- able and not valid. 7 But where the holder of shares threatened to put the company into insolvency unless the directors would find some one to purchase his shares and give him an indemnity, which was done twelve months before the company became in- solvent, it was held to be a valid transfer. 8 Trustees under a will are properly made contributories. 9 2 South Staffordshire R. v. Burnside, 2 Eng. L. & Eq. 418; s. c. 5 Exch. 129; 6 Kailw. C. 611. 3 The Newry, W. & K. R. v. Moss, 4 Eng. L. & Eq. 34 ; s. c. 14 Beav. 64. But where, in winding up the affairs of a company, the name of one of the members, who had obtained his certificate since the expenses were incurred, was placed among the contributories, it was held he was not liable. Chappie's case, 17 Eng. L. & Eq. 516 ; s. c. 5 De Gex & S. 400. * Lund ex parte, 27 Beav. 465 ; Hyam ex parte, 6 Jur. N. S. 181 ; s. c. 1 De G. F. & J. 75. See also De Pass's case, 4 De G. & J. 544 ; Chinnock ex parte, 1 Johns. Eng. Ch. 714. Post, § 242. 6 Electric Tel. Co. v. Bunn, 6 Jur. N. S. 1223. 6 Mexican & South Am. Co. in re, 2 De G. F. & J. 302 ; Slater ex parte, 12 Jur. N. S. 242. 7 Electric TeV Co. in re, 30 Beav. 143. 8 Phoenix Life Assurance Co., 7 Law T. N. S. 267. Drummond ex parte, 2 Gif. 189 ; s. C. 6 Jur. N. S. 908. *69 §48. COLORABLE SUBSCRIPTIONS. 157 4. The trustee, into whose name the cestui que trust had caused shares to be transferred by deed, reciting that the price of the same had been paid to the vendor, who executed the deed, may nevertheless be compelled to make good such price to the vendor, if it were not in fact paid, although he accepted the transfer in the belief that it had been paid. 10 5. Notwithstanding the defendant's name appear upon the register of shares, he will be permitted, in a suit for calls, to show that it was illegally placed there, and without his authori- ty ; but a purchaser of shares, or even an original subscriber, cannot be sued for calls, under the English statute, until his name is placed on the registry. 11 But one's name appearing upon the books of the company as a shareholder is primd facie evidence of the fact, in an action against such person to enforce against him the personal responsibility of a stockholder for the debts of the company. 12 And in such an action the judgment against the corporation is prima facie evidence of its indebted- ness as against the stockholder. 12 SECTION II. Colorable Subscriptions. 1. Colorable subscriptions valid. 2. Directors may be compelled to register them. 3. Oral evidence to vary the written subscrip- tion inadmissible. 4. Register evidence although not made in the time presa-ibed. 5. Confidential subscriptions void. § 48. 1. Equity will not restrain a railway company from en- forcing calls, by action at law, upon the ground that one of the conditions of the charter, requiring a certain amount of subscrip- tions of stock before the incorporation took effect, had not been complied with, but that a fraud upon the provision had been practised by means of colorable subscriptions. The Court of Chancery regards colorable subscriptions, made in the course of 10 Wilson v. Keating, 27 Beav. 121. 11 Hodges on Railways, 101, 4th ed. Newry & Inniskillen Railw. v. Edmunds, 2 Exch. 118. 12 Hoagland v. Bell, 36 Barb. 57. 158 ASSESSMENTS OR CALLS. § 48. getting a bill through the House of Lords, (to comply with one of the standing rules of that house, requiring three fourths of the requisite outlay to be subscribed before the bill passes,) to be binding upon the directors and managers, who make the same, and that they are in fact valid and binding subscriptions, although such subscriptions were made with the purpose of being subse- quently cancelled, and had never been registered upon the books of the company, or any calls made upon them. 2. It is within the proper range of the powers of a court of equity to compel the directors to register such shares and enforce the payment of calls upon them. 1 In a recent case 2 where this subject came under discussion in 1 Preston v. Grand Collier Dock Co., 2 Railw. C. 335 ; Mangles v. The Same, id. 359. The principle of these cases is very distinctly recognized in the case of Blodgett v. Morrill, 20 Vt. R. 500, and it lies at the foundation of all fair dealing, that one is bound by his own representations, upon which he had purposely in- duced others to act, although at the time he did not intend to be himself bound by them, but expected, through favor, to be relieved from their performance. See also Henry v. Vermilion R. Co., 17 Ohio, 187. But if one obtain shares in a distribution by commissioners by fraud, he may be compelled, in equity, to surrender them to other subscribers, to whom they would have been awarded but for such fraud. Walker v. Devereaux, 4 Paige, 229. A subscription to the stock of a railway made in the common form upon the books of the company, the subscriber at time of subscription taking the following writing, signed by the clerk of the company, by order of the directors : — " In consideration that Ebenezer E will subscribe for thirty shares in the White Mountains Railway, said company agree to release him from twenty-five of said shares, or such portion of said twenty-five shares, as he may within one year elect to withdraw from his subscription, and if he has been assessed, and has paid anything on said shares, that he elects to be released from, that these payments shall be allowed him, on the shares that he retains, and that the treasurer shall regulate his stock accounts and assessments accordingly," is a valid subscription for the thirty shares, it having been understood, at the time of making the sub- scription, between the subscriber and the directors, that the same was to be held out to the public, as a bonafi.de subscription for the thirty shares, and no disclos- ure made of the writing given to the subscriber. It was held that the agreement to release the subscriber was a fraud upon other subscribers, and void, and the subscription may be enforced. White Mountains Railw. v. Eastman, 34 New II. R. 124; Downie v. White, 12 Wise. 17G. See also Conn. & Pass. Rivers R. v. Bailey, 24 Vt. R. 465 ; Mann. v. Pentz, 2 Sand. Ch. 257 ; Penobscot & Kennebec R. v. Dunn, 39 Maine R. 601. 2 North Shields Quay Co. v. Davidson, 4 Kay & J. 688. § 48. COLORABLE SUBSCRIPTIONS. 159 equity, it was held that where the provisional directors, in the process of carrying a bill through parliament, proposed to the contractor that he should have the contract for the company's works, provided he would accept payment partly in shares, the number to be settled by the company's engineer; but con- tracted for him to sign for a sufficient number of shares to make up the amount required by the standing orders of parliament, which was 630 of X10 each, which he accordingly subscribed and the bill passed ; but when the contract was closed he was to take but 800 shares, the scheme being abandoned before the works were commenced, it was held that the arrangement made by the directors with the contractor was ultra vires ; and if not a fraud upon the orders of parliament it was void as against such subscribers as were not privy to it ; and that the circumstance of the contractor having subscribed the deed last but one, and the last subscriber being privy to the arrangement, did not alter the rights of those subscribers who were not privy to it ; and that the contractor was liable, as a contributory, for the entire number of shares for which he signed the deed. * 3. Oral evidence is inadmissible to vary the terms of a sub- scription to the stock of a railway unless it tend to show fraud or mistake. 3 But where the subscriber is really misled, and induced to subscribe for stock, upon the representation of a state of facts 3 Wight v. Shelby Railw., 16 B, Monroe, 5; Blodgett v. Morrill, 20 Vt. R. 509 ; Kennebec & Portland R. v. Waters, 34 Maine R. 369. But mere mistake, or misapprehension of the facts, by the subscriber, is no ground of relief unless it amount to fraud and imposition, brought about by some agent of the company. Hence where one subscribed for shares in a railway, under the mistaken belief that he might forfeit his stock at will, and be no further liable, he was held liable, notwithstanding this belief was the result of assurances made by the person taking the subscription at the time of its being made, that such were the terms of sub- scription secured by the charter, such assurances being founded in mistake, and not wilfully false. Railroad Company v. Roderigues, 10 Rich. (S. C.) 278; N. C. Railw. v. Leach, 4 Jones Law, 340. It is here said, that one of the commissioners, hi taking subscriptions to the stock of a railway company, has no right to give any assurances as to the line of location which will be adopted. And if the location is different from that provided in the charter of the company, the party may lose the right to object to paying his subscriptions on that ground, unless he resort to mandamus or injunction, at the earliest convenient time. Booker ex parte, 18 Ark. R. 338; Brownlee v. Ohio, Ind. & El. Railw., 18 Ind. R. 68. * 70 160 ASSESSMENTS OR CALLS. § 48. in regard to the time of completing the road, or its location made by those who take up the subscription, and in good faith, and upon proper inquiry, and the exercise of reasonable discretion, believed by the subscriber, and which constitutes the prevailing motive and consideration for the subscription, and which proves false, it would seem that the contract of subscription should be held void, both in law and equity. 4 4. When the statute requires the registry of shares to be made within a limited time, such requirement is regarded as merely directory, and the registry, although not made within the pre- scribed time, will still be competent evidence, and to the same extent as if made within the time required. 5 5. Where subscriptions are made under an agreement that they are not to be binding unless a specified sum is subscribed, it is essential that there should be no conditions as to the liability of any of the subscribers not applicable to all. Confidential sub- scriptions made for the purpose of making up the required sum are a fraud upon the other subscribers ; and should not be treated as valid subscriptions. Where by deducting such confidential subscriptions the required sum is not subscribed the contract of subscription does not become operative, so as to bind the sub- scribers. Parol evidence is admissible to show that certain of the subscriptions were confidential in character and therefore fraudulent. 6 4 Henderson v. Railway Company, 17 Texas R. 560. 5 Wolverhampton N. W. Co. v. Hawksford, 7 C. B. N. S. 795 ; 6 Jur. N. S. 632. Affirmed in Exch. Chamber, 10 W. Rep. 153, 11 C. B. N. S. 456, 8 Jur. N. S. 844. 6 New York Exchange Co. v. De Wolf, 31 N. Y. 273. §49. MODE OF ENFORCING PAYMENT. 161 SECTION III. Mode of enforcing Payment. 1. Subscription to indefinite stock, raises no implied promise to pay the amount as- sessed. 2. If shares are definite, subscription implies a promise to pay assessj?ients. Right of forfeiture a cumidative remedy. 3. WJiether issuing new stock will bar a suit against subscriber, quozre. 4. It would seem not. 5. But the requirements of the charter and general laws of the state, must be strict- ly pursued in declaring forfeiture of stock. 6. Notice of scde must name place. 7. Validity of cedls not affected by miscon- duct of directors in other matters. 8. Proceedings must be regular at date. 9. Acquiescence will estop the party, often. 10. Forfeiture of shares. 1 1 . Irregular calls must be declared void, be- fore others can be made to supply the place. § 49. 1. The company may resort to all the modes of enforc- ing payment of calls which are given them by their charter, or the general laws of the state, unless these remedies are given in the alternative. But the principal conflict in the cases seems to arise upon the point of maintaining a distinct action at law for the amount assessed. Many of the early turnpike and manu- facturing companies, in this country, did not create any definite, or distinct * capital stock, to consist of shares of a definite amount, in currency, but only constituted the subscribers a body corporate, leaving them to raise their capital stock, in any mode which their by-laws should prescribe. And in some such cases, the charter, or general laws of the state, gave the company power to assess the subscribers according to the number of shares held by each. But the amount of the shares was not limited. The assessments might be extended indefinitely, according to the necessities of the company. In such cases, where the only remedy given, by the deed of subscription, the charter and by-laws, or the general laws of the state, was a forfeiture of the shares, the courts gen- erally held, that the subscriber was not liable to an action in personam for the amount of calls. 1 And this seems to us alto- 1 Franklin Glass Co. v. White, 14 Mass. R. 286 ; Andover Turnpike Co. v. Gould, 6 Mass. R. 40 ; Same v. Hay, 7 id. 102 ; New Bedford Turnpike Co. v. Adams, 8 id. 138 ; Bangor House Proprietary v. Hinckley, 3 Fairfield, 385,388 ; Franklin Glass Co. v. Alexander, 2 New Hamp. R. 380. But where there VOL. I. 11 * 71 162 ASSESSMENTS OR CALLS. §49. gether reasonable and just. For if a subscription to an indefi- nite stock created a personal obligation to pay all assessments made by the company upon such stock, it would be equivalent to a personal liability of the stockholders for the debts and liabil- ities of the company ; as we shall see, hereafter, that the directors of a corporation may be compelled, by writ of mandamus, to make calls upon the stock, for the purpose of paying the debts of the company. 2 2. But where the stock of the company is defined in their char- ter, and is divided into shares of a definite amount in money, a ■was an express promise to pay assessments, or facts from which such an under- taking was inferable, it was always held, even in this class of cases, that an action will lie. Taunton & South Boston Turnpike Co. v. Whiting, 10 Mass. R. 327 ; Bangor Bridge Co. v. McMahon, 1 Fairfield, 478. But a subscriber to the stock of a turnpike company, who promised to pay assessments, when afterwards the course of the road was altered by law, was held thereby exonerated. Middlesex Turnpike Co. v. Swan, 10 Mass. R. 384. The citation of cases to these points might be increased indefinitely, but it is deemed useless, as these propositions have never been questioned. "Worcester Turnpike v. Willard, 5 Mass. 80. The following cases will be found to confirm the cases cited above. Chester Glass Co. v. Dewey, 16 Mass. R. 94 ; Newburyport Bridge Co. v. Story, 6 Pick. 45 ; Salem Mill-Dam Co. v. Ropes, 6 Pick. 23 ; Ripley v. Sampson, 10 id. 371 ; Cutler v. Middlesex Factory Co., 14 id. 483. This general question of the responsibility, assumed by those who consent to become shareholders in a cor- poration, where the shares are not fully paid up, is considerably discussed, by Allen, J., in a recent case in the N. Y. Court of Appeals, where the facts being peculiar, it was held the shareholder incurred no obligation to pay the balance due upon the shares if he elected to abandon it. Seymour v. Sturgess, 26 N. Y. R. 134. But there is no implication of duty to pay the amount of a subscription to the stock of a railway company, especially where the terms of subscription declare payment to be made in such instalments as shall be required by the board of directors, unless the declaration and proof show that an instalment had been required by the directors. Gebhart v. Junction Railw. Co., 12 Ind. R. 484 ; McClasky v. Grand Rapids & Ind. Railw. Co., 16 Ind. R. 96. Where by the charter of an eleemosynary corporation subscriptions were allowed to be taken, and the subscriber, by securing the amount and paying the interest promptly, was entitled to save the payment of the principal, it was held this was matter of indulgence to the subscriber, to which he could only entitle himself by proving his compliance with the conditions upon which the indulgence was granted. Denny v. North W. Christian University, 16 Ind. R. 220. The undertaking of subscribers to a joint-stock will be held several and not joint, without express words. Price v. Grand Rapids & I. R. Co., 18 Ind. R. 137. The law by which a corporation exists and acts forms part of the contract of subscription. Hoag- land v. Cin. & F. W. R. Co., 18 Ind. R. 452. 2 Post, § 50. §49. MODE OF ENFORCING PAYMENT. 16o subscription for shares is justly regarded as equivalent to a prom- ise to pay calls, as they shall be legally made, to the amount of the shares. This may now be regarded as settled, both in this country and in England, and that the power given the company to forfeit and sell the shares, in cases where the shareholders fail to * pay calls, is not an exclusive but a cumulative remedy, unless the charter, or general laws of the state, provide that no other remedy shall be resorted to by the company. 3 3 Hartford & New Haven Railway Co. v. Kennedy, 12 Conn. R. 499. In this case it was held, that, from the relation of stockholder and company thus created, a promise was implied to pay instalments, that the clause authorizing a sale of the stock was merely cumulative ; and that, whether the company resorted to it or not, the personal remedy against the stockholder remained the same. The same points are confirmed by the same court, in Mann v. Cooke, 20 Conn. R. 1 78. And in Danbury Railw. Co. v. Wilson, 22 Conn. R. 435, the defendant was held liable for calls upon a subscription to the stock of a company whose charter had expired, and been revived by the active agency of defendant. See also Dayton ». Borst, 31 N. Y. R. 435 ; Piscataqua Ferry Co. v. Jones, 39 N. H. R. 491. All the cases, with slight exceptions, hold, that where the subscription is of such a character as to give a personal remedy against the subscriber, in the absence of all other specific redress, the mere fact that the company have the power to forfeit the shares for non-payment of calls, will not defeat the rio-ht to enforce the payment of calls by action. Goshen Turnpike Co. v. Hurtin, 9 Johns. 217 ; Dutchess Cotton Manufacturing Co. v. Davis, 14 Johns. 238; Troy T. Co. v. McChesney, 21 Wend. 296; Northern R. v. Miller, 10 Barb. 260; Plank Road Co. v. Payne, 17 Barb. 567. In this last case it was held to be matter of intention and construction, whether the remedies were concurrent and cumulative, or in the alternative. And in Troy and Boston R. v. Tibbitts, 18 Barb. 297, it is said to be well settled, that the obligation of actual payment is created, by a subscription to a capital stock, unless plainly excluded by the terms of the subscription, and that the forfeiture is a cumulative remedy. 0»- densburg R. & C. Railway v. Frost, 21 Barb. 541. See also Herkimer M. & H. Co. v. Small, 21 Wend, 273 ; s. c. 2 Hill, 127 ; Sagory v. Dubois, 3 Sand. Ch. 466 ; Mann v. Currie, 2 Barb. 294; Mann v. Pentz, 2 Sand. Ch. 257 ; Ward v. Griswold- ville Manuf. Co., 16 Conn. R. 593 ; Lexington & West Cambridge R. v. Chandler, 13 Met. 311 ; Klein v. Alton & Sangamon R. 13 Illinois, R. 514 ; Ryder v. Same, id. 516 ; Gayle v. Cahawba R. 8 Ala. R. 586 ; Beene v. Cahawba & M. R. 3 id. 660 ; Spear v. Crawford, 14 Wend. 20 ; Palmer v. Lawrence, 3 Sand. Sup. Ct. R. 161, where Duer,J., says the law must now be considered as settled, " that the ob- ligation of actual payment is created in all cases, by a subscription to a capital stock, unless the terms of subscription are such as plainly to exclude it." Elysville v. O'Kisco, 5 Miller, 152 ; Greenville & Columbia R. v. Smith, 6 Rich. 91 ; Char- lotte & S. C. R. R. Co. v. Blakely, 3 Strob. 245 ; Banet v. Alton & Sangamon R, 13 Illinois R. 504, 514 ; Hightower v. Thornton, 8 Georgia R. 486 ; Freeman i\Win- *72 164 ASSESSMENTS OR CALLS. §49. * 3. The question in the English cases seems to be, whether, after the forfeiture of the shares, and a confirmation of the same Chester, 10 Sm. & M. 577 ; Tar River Nav. Co. v. Neal, 3 Hawks, 520 ; Gratz v. Redd, 4 B. Mon. 1 78 ; Selma R. v. Tipton, 5 Ala. R. 787 ; Troy & R. R. v. Kerr, 1 7 Barb. 581. Where the statute gives an election to the company either to for- feit the shares for non-payment of calls, or to sue and collect the amount of the shareholder, it was held that no notice of such election was necessary to be given before suit brought. New Albany & Salem R. v. Pickens, 5 Ind. R. 247. The terms of the charter must be pursued where they provide specifically for the redress for non-payment of calls. As if the shareholder is made liable only for deficiency after forfeiture and sale of the stock. Grays v. Turnpike Co., 4 Rand. 578 ; Essex Bridge Co. v. Tuttle, 2 Verm. R. 393. But some of the American cases seem to hold, that a corporation has no power to enforce the payment of calls, against a subscriber for stock, unless upon an express promise, or some express statutory power, and that a subscription for the stock is not ecmivalent to an express promise to pay calls thereon to the amount of the shares. Kennebec & Port- land R. v. Kendall, 31 Maine R. 470. But this class of cases is not numerous, and is, we think, unsound. See also Allen v. Montgomery R., 11 Ala. R. 437. It has been held, that after the forfeiture is declared, the company cannot longer hold the subscriber liable. Small v. Herkimer M. & H. Co., 2 Comst. 330. So if the company omit to exercise their power of forfeiture, as the successive defaults occur, until all the calls are made, it thereby loses its remedy by sale. Stokes v. The Lebanon & Sparta Turnpike Co., 6 Humph. 241. See also Harlaem Canal Co. v. Seixas, 2 Hall, 504 ; Delaware Canal Co. v. Sansom, 1 Binney, 70. The fact that the commissioners have by the charter an opinion to reject sub- scriptions for stock, does not make them less binding, unless they are so rejected. Connecticut & Passumpsic R. R. v. Bailey, 24 Verm. R. 465. An agreement made at the time of subscription inconsistent with its terms, and resting in oral evidence merely, cannot be received to defeat the subscription. 24 Verm. R. 465, s. c. In a late case in Kentucky this subject is very elaborately discussed by the counsel, and, as it seems to us, very wisely and very justly disposed of by the court. McMillan v. Maysville & Lexington Railway Co., 15 B. Monroe, 218. It was there held, that subscriptions to the stock of a railway company, like other contracts, should receive such construction as will carry into effect the probable intention of the parties. That the stock subscribed was to be the means by which the road should be constructed, and hence, that a subscription for stock, on con- dition that the road should be so " located and constructed as to make the town of Carlisle a point," imposed upon the subscribers the duty to pay, upon the loca- tion of the road in that place, and that the construction of the road was not a condition precedent to the right to recover for calls on the stock. See also New Hampshire Central R. v. Johnson, 10 Foster, 390 ; South Bay Meadow Dam Co. v. Gray, 30 Maine R. 547 ; Greenville & Columbia R. v. Cathcart, 4 Rich. 89 ; Danbury & Xorwalk R. v. "Wilson, 22 Conn. R. 435. An agreement to take and fill shares in a railway company, is an agreement to pay the assessments legally made. Bangor Bridge Co. v. McMahon, 10 Maine R. 478 ; Buckfield Br. R. v. *73 § 49. MODE OF ENFORCING PAYMENT. 165 by the company, and the issuing of new stock in lieu of the for- feited shares, the subscriber is still liable for any deficiency. The cases all regard him as liable, under the English statutes, to a personal action, until the confirmation of the forfeiture of his stock. 4 * 4. But in a late case, in the House of Lords, 5 it seems to have been settled, upon great consideration, that where the charter or general statutes give the right to forfeit the shares, or to collect the amount of the shareholder, and the forfeiture, sale, and can- cellation of the shares, does not produce the requisite amount, the company may issue new shares for the deficiency, and at the same time maintain an action for it, against the former owner. Irish, 39 id. 44 ; P. & K. R. v. Dunn, id. 587 ; Penobscot P. v. Dummer, 40 Maine R. 172; White Mountains Railw. v. Eastman, 34 N. H. R. 124. So, too, an agreement to take shares before the act of incorporation is obtained, creates an implied duty to pay calls duly made thereon. Buffalo & N. Y. City Railw. v. Dudley, 4 Kernan, 336. The general subject is discussed somewhat at large in this case, and the results arrived at confirm the doctrines laid down in the text. Rensselaer & W. PI. Rd. Co. v. Barton, 16 N. Y. Court of Appeals, 457. The same rule is mentioned in Fry's Exrs. ?>. Lex. & Big. S. Railw., 2 Met. (Ky.) 314, where the question of the extent of implied obligation assumed by subscription to the capital stock of a corporation is very fully and fairly illus- trated. 4 Great Northern R. v. Kennedy, 4 Exch. 417. So the allottees of shares in a projected railway company are made liable for a proportionate share of the expense. Up fill's case, 1 Eng. L. & Eq. 13 ; The Direct Shrewsbury & Leices- ter Railway Co., in re, 7 id. 28 ; London & B. R. v. Fairclough, 2 M. & G. 674 ; Edinburgh L. & N. H. R. v. Hebblewhite, 2 Railw. C. 237 ; Birmingham, Bristol & Th. J. R. v. Locke, 2 Railw. C. 867; Railway Co. v. Graham, 1 Ad. & Ellis (n. s.), 271 ; Huddersfield Canal Co. v. Buckley, 7 T. R, 36. It has been held, that a shareholder cannot absolve himself from calls by paying the directors a sum of money for his discharge, even though the money be accepted, and the shares transferred. Bennett ex parte, 27 Eng. L. & Eq. 5 72. See also § 4, ante. 6 Inglis v. Great Northern R., 16 Eng. L. & Eq. 55. See also Peoria & Oquawka R. v. Elting, 17 111. R. 429 ; Cross v. Mill Co., 17 111. R. 54. But where the deed of* settlement gave the right to forfeit the shares at once, or to enforce the payment, if they should think fit, it was held, that a judgment for the amount due is a bar to any subsequent forfeiture. Giles v. Hutt, 3 Exch. 18. And where the charter of the company provided, that the shares of a de- linquent shareholder " shall be liable to forfeiture, and the company may declare the same forfeited and vested in the company," it was held the option, in de- claring such forfeiture, was in the company, and not in the shareholders. Rail- way Company v. Rodrigues, 10 Rich. (S. C.) 278. *74 1G6 ASSESSMENTS OR CALLS. § 49. 5. It seems to be well settled, that to entitle the company to sue for calls, the provisions of their charter, and of the general laws of the state, must be strictly pursued. And if the shares have been forfeited and sold without pursuing all the require- ments, in such case provided, no action will lie to recover the balance of the subscription. 6 And if the shares be sold for the non-payment of several assessments, one of which is illegal, the corporation cannot recover the remainder of the subscription. 7 But where the by-laws of the company prescribe a specific mode of notice to the delinquent, of the time and place of sale, through the mail, this is not to be regarded as exclusive, but other notice which reaches the party in time will be sufficient. 8 But in a recent case 9 the law in regard to proceedings in forfeit- ure of shares is held very strictly. It is here considered that no- tice must be given in the precise time and in the exact form re- quired by statute, and that the sale must in all respects correspond precisely with the requirements of the provisons of the law. The rule is carried so far here that posting notice in a public place was held no sufficient compliance with the law requiring it to be in a " conspicuous " place ; and it was here considered that sub- scriptions to preferred stock could not be reckoned to make up the requisite amount of capital to enable the corporation to go into operation. 6. But notice that shares in a railway corporation will be sold 6 Portland, Saco, & Portsmouth Railw. v. Graham, 11 Met. 1. 7 Stoneham Branch R. Co. v. Gould, 2 Gray, 277. 8 Lexington & West Cambridge Railw. v. Chandler, 13 Met, 311. And where the charter required notice of the instalment three weeks prior to the same be- coming due, it was held prima facie evidence of compliance by producing the publication, and oral evidence of* its being repeated the requisite number of times, without producing all the papers. Unthank v. Henry County Turnp. Co., 6 Porter (Ind.), 125. And in a later case, Anderson v. The Ohio & Miss. Railw. Co., 14 Ind. R. 169, where the charter limited the amount of calls to ten per cent per annum upon subscriptions to stock, and ten per cent had been paid, a call was held sufficient without specifying the place of payment or the per cent to be paid, only five remaining within the power of the directors to call for, and the notice fixing the time and place of payment. Lewey's Island Railw. v. Bolton, 48 Me. R. 451. The rules of law as to what is requisite to constitute a valid subscription to a stock in a railway com- pany and to justify calls, are much considered in the recent case of Maltby v. N. W. Va. Railw., 10 Md. R. 422. §49. MODE OF ENFORCING PAYMENT. 167 for nonpayment of assessments on a day fixed, and by an auc- tioneer named, who is and has long been an auctioneer in the place at which the notice bears date is insufficient if it do not name the place of sale. 10 7. The validity of calls cannot be called in question upon the ground that the directors making the same are acting in the interest and for the benefit of a rival company, and have in consequence unnecessarily retarded the construction of the company's works. 11 But the directors must be duly appoint- ed. 12 8. And the proceedings in making the calls must have been substantially in conformity with the charter and by-laws of the company and the general laws of the state at the time of making the same. Any subsequent ratification by the directors of an in- formal call will only give it effect from the date of the ratifica- tion. 13 9. A subscriber who has executed the deed of settlement, pur- chased shares and received dividends upon the same, is not at liberty to object to their validity upon the ground that the com- pany were by the deed of settlement authorized to issue shares for £ 100, and these were issued as half shares at £ 50 ; this ac- quiescence estops him from doing so. 14 10. It seems that unless the constitution of the corporation or the general laws of the state contain a provision justifying a forfeiture of shares, it is not competent for the majority of the shareholders by prospective resolution to establish a regulation whereby the shares shall be forfeited upon failure to comply with the requirements of such resolution. 15 11. It is no valid reason for making more calls than are justi- fied by the constitution and laws affecting the question, that some of the calls were not regularly made and were therefore void, and were not paid by the defendant. It should appear that 10 Lexington & West Cambridge Railway v. Staples, 5 Gray, 520. 11 Orr v. Gl. A. & M. J. Railw., 6 Jur. N. S. 877. 12 H. B. Coal Co. v. Teague, 5H.&N. 151 ; s. c. 6 Jur. N. S. 275. 13 Cornwall G. C. M. Co. v. Bennett, 5 H. & N. 423 ; s. c. 6 Jur. N. S. 539 ; Anglo California G. M. Co. v. Lewis, 6 Jur. N. S. 1376. 14 Hull Flax & Cotton Co. v. Wellesley, 6 H. & N. 38. 15 Barton's case, 4 De Gex & J. 46. 168 ASSESSMENTS OR CALLS. §50 such irregular calls had been declared void, otherwise the direc- tors may have secured most of the money demanded by them. 16 ♦SECTION IV. Creditors may compel Payment of Subscriptions. 1. Company compelled to collect of subscribers by mandamus. 2-4. Amount due from subscribers, a trust- fund for the benefit of creditors. 5. If a state own the stock it will be the same. 6, 7. A diversion of the funds from creditors is a violation of contract on the part of the company, and a state law authorizing it invalid. 8, 9. The general doctrine above stated found in many American cases. 10. Judgment creditors may bring bill in equity. 1 1 . Promoters of railways liable, as partners, for expenses of procuring charter. §50. 1. By the present English statute, the creditors of a company may recover their judgment debts, against shareholders, who have not paid the full amount of their shares to the extent of the deficiency. 1 Before this statute, it was considered that a writ of mandamus would lie, to compel the company to make and enforce calls against delinquents. 2 2. In this country this question has arisen, not unfrequently, in the case of insolvent companies, no such provision existing in most of the states as that of the English statute just referred to. 3. This subject is very extensively examined, and considered, by the national tribunal of last resort, in a case of much impor- tance and delicacy, 3 and the following results arrived at : — 4. On the dissolution of a corporation, its effects are a trust- fund, for the payment of its creditors, who may follow them, 16 Welland Kailw. v. Berrie, 6 H. & N. 416. 1 8 cSc 9 Vict. c. 16, §§ 36, 37. 2 Walford, 277; Hodges, 106, n. («) ; Reg. v. Victoria Park Co., 1 Q. B. 288, where the opinion of the court very clearly intimates, that the writ of man- damus will lie, to compel the company to enforce the payment of calls, where it appears that judgments against the company remain unsatisfied for want of as- sets. But, under the circumstances of this case, it was not deemed requisite to issue the writ. 3 Curran v. State of Arkansas, 15 How. 304. *75 § 50. CREDITORS MAY COMPEL PAYMENT OF SUBSCRIPTIONS. 169 into the hands of any one, not a bond fide creditor, or purchaser without notice ; and a state law, which deprives creditors of this right, and appropriates the property to other uses, impairs the obligation of their contracts, and is invalid. 5. The fact, that a state is the sole owner of the stock in a banking corporation, does not affect the rights of the creditors. 6. The capital stock of a company is a fund set apart by its charter for the payment of its debts, which amounts to a con- tract, * with those who shall become its creditors, that the fund shall not be withdrawn and appropriated to the use of the owner, or owners, of the capital stock. 7. A law, which deprives creditors of a corporation of all legal remedy against its property, impairs the obligation of its con- tracts, and is invalid. 8. These propositions, with the exception of the constitutional question, in regard to the impairing of an assumed or implied contract with the creditors of the corporation, are all fully sus- tained by numerous decisions of the highest authority in this country. 9. Thus in a case before Mr. Justice Story, in the Circuit Court, 4 it was held, that the capital stock of a corporation is a trust-fund, for the payment of its debts, and being so, it may, upon general principles -of equity law, be followed into other hands, so long as it can be traced, unless the holder show a par- amount title. 5 And in cases where the capital stock or assets of a corporation have been distributed to the stockholders with- out providing for the payment of its debts, a court of equity will allow the creditors to sustain a bill against the shareholders, to compel contribution to the payment of the debts of the company, to the extent of funds obtained by them, whether directly from the company, or through some substitution of useless securities for those which were good. 6 4 "Wood v. Dummer, 3 Mason, 308. 5 Adair v. Shaw, 1 Sch. & L. 243, 261. See Dayton v. Borst, 31 N. Y. R. 435. 6 Nathan v. Whitlock, 9 Paige, 152 ; s. c. 3d Edwards's Ch. 215. But it has been held, that the distribution of the capital stock among the shareholders, be- fore the debts of the company are paid, and leaving no funds for that purpose, will not render the shareholders liable to an action of tort, at the suit of the creditors of the company, there being no such privity as will lay the foundation *76 170 ASSESSMENTS OR CALLS. § 50. * 10. Where a corporation have abandoned all proceedings under their charter, from insolvency, and still owe debts, the sub- scriptions to the capital stock not being all paid, a judgment creditor may proceed, in equity, against the delinquent share- owners, there being no longer any mode by which calls upon the stock may be enforced, under the provisions of the charter, or by action at law, in favor of the company. 7 11. It is held by the English statutes, in regard to fully registered companies, which never go into full operation, but have to be closed under the winding-up acts, that a shareholder, who has paid up the full amount of his shares, is still liable to pay the necessary calls, to defray the expenses of winding up the company, the subscribers to such joint-stock companies, under the statute, being held liable to the same extent as partners. 8 of an action at law, even in states where no court of chancery existed. Yose v. Grant, 15 Mass. R. 505. In equity the suit may be in the name of the receiver, Nathan v. Whitlock, 9 Paige, 152, or in the name of a creditor, suing on behalf of himself and others, standing in the same relation. Mann v. Pentz, 3 Comst. 415, 422. And all the shareholders, who have not paid their subscriptions, should be made parties to the bill, and compelled to contribute proportionally. lb. The same principle is recognized in numerous other cases. Muinma v. The Potomac Co., 8 Pet. 281 ; Wright v. Petrie, 1 Sm. & M. Ch. 282, 319 ; Nevitt v. Bank of Port Gibson, 6 Sm. & M. 513; Hightower v. Thornton, 8 Georgia R. 486; Fort Edward, &c. Plank Road Co., v. Payne, 17 Barb. 567; Gillet v. Moody, 3 Comst. 479. This case is where the bank, of which the plaintiff was receiver, had transferred specie funds to defendant, in exchange for his own stock in the bank. The transaction was held illegal, and the defendant was compelled to refund, for the benefit of the creditors of the bank. And where the subsci'iber to a bank, which became insolvent, assigned all his interest in the bank, it was held not to exonerate him from liability to assessments upon his subscription, to pay debts due from the bank, although contracted subsequent to the assignment. Dayton v. Borst, 7 Bosw. 115. See also Morgan v. New York & Albany R. 10 Paige, 290. 7 Henry v. The Yermilion & Ashland Railw., 17 Ohio R. 187. See also Miers v. Z. & M. T. Co., 11 Ohio R. 273 ; s. C. 13 Ohio R. 197. And where the com- pany retains its organization, and officers, it may be compelled, by writ of man- damus, to enforce calls against the shareholders, to the extent of their liability, as well as to perform other duties. Commonwealth v. Mayor of Lancaster, 5 Watts, 152. 8 Matter of the Sea, Fire, and Life Assurance Society, 23 Eng. L. & Eq. 422. The form of proceeding and the extent of responsibility is extensively consid- ered, as to delinquent subscribers to an insolvent corporation, in Adler v. Milw. Patent Brick Co., 13 Wise. R. 57. * 77 §51. CONDITIONS PRECEDENT TO MAKING CALLS. 171 SECTION V. Conditions precedent to making- Calls. 1. Conditions precedent must be performed before calls. 2. But collateral, or subsequent conditions not. 3. Definite capital must all be subscribed be- fore calls. 4. It is the same where defined by the com- pany, as in the charter. 5. Conditional subscriptions not to be reck- oned. 6. Legislature cannot repeal conditions prece- dent. 7. Limit of assessments cannot be exceeded for any purpose. 8. Where charter fails tolimit stock, corpora- tion miry. 9. Alteration in charter reducing amount of stock. § 51. 1. Conditions precedent must be complied with, before any binding calls can be made. Anything, which, by the ex- press provisions of the charter, or the general laws of the state, is made a condition to be performed on the part of the company, or its agents, before and as the foundation of the right to make calls, upon the subscriptions to the stock ; or where the thing is required to be done, before calls shall be made, and is an impor- tant element in the consideration of the agreement to take stock in the * company, it should ordinarily be regarded as a condition precedent. 2. But where the matter to be done is rather incidental to the main design, and only affects the enterprise collaterally, it will commonly be regarded as merely directory to the company, or at most as a concurrent or subsequent condition, to be enforced by independent proceedings, and in the performance of which time is not indispensable. 1 1 Carlisle v. Cahawba & Marion Railway Co., 4 Ala. R. 70; Ante, § 18; Ba- net v. Alton & Sangamon Railway Co., 13 111. R. 504; Utica & Schenectady Railway Co. v. Brinkerhoff, 21 Wend. 139. This last case is an action upon a special undertaking to pay land damages, on condition the company would lo- cate their road so as to terminate at a particular place, which the company alleged they had done, and defendant was held not liable, for want of mutual- ity, the company not being bound by the contract. Cooke v. Oxley, 3 T. R. G53. But it admits of some question, we think, whether the case of 21 Wend. 139, comes fairly within the principle upon which it was decided. The case of Cooke v. Oxley, which has been sometimes questioned, is an obvious case of want of consideration on the part of defendant, it being a mere naked refusal *78 172 ASSESSMENTS OR CALLS. § 51. And where the company voted to issue six hundred additional shares and to allow each stockholder to take one new share for of goods, for a fixed time, the plaintiff in the mean time having an election, to take them or not. This class of cases is numerous and sound, resting upon the mere want of consideration. Burnet v. M. Bisco, 4 Johns. 235. But where such an option is given upon consideration, or as a standing offer, and in the mean time the other party proceeds to perform the contract on his part, it is as binding in this form as in any other. And it was so held, in the case of the Cumberland Valley Railway Co. v. Baab, 9 Watts, 458. In this case the inhab- itants of one portion of Harrisburg made a subscription to induce the company to cross the river at a particular point, and to build their depot upon a particu- lar street, which being done, the subscribers were held liable to pay their sub- scriptions to the company, and, as we think, upon the most obvious and satisfac- tory grounds. In Henderson & Nashville Railway Co. v. Leavell, 16 B. Monr. 358, it was held, that a subscription to the stock of a railway, conditioned that the road should pass through a certain town, and the money subscribed should be ex- pended in a certain county, was a valid subscription. The Court, Stimpson, J., say : " The stock in this case is not conditional, although the defendant has, in the act of subscribing for it, brought the company under certain obligations to him, in relation to it, with which they are bound to comply. Such stipulations are not incompatible with sound policy, or with any of the provisions of the charter. They do not render the subscription void, but operate, as it was in- tended they should, for the benefit of the stockholder. But even if the sub- scription had been made, upon the express condition that the money should not be paid until certain acts were done by the company, when these acts were done, the stock would then be unconditional, and the subscribers would then be compelled to pay it, as was held in McMillan v. Maysville & Lexington Railway Co., 15 B. Monr. 218." If a subscrijjtion for stock be conditioned, that the sub- scriber may withdraw his subscription, at his election, if the whole stock is not taken, at a given time, and the defendant pay part of his subscription after that date, he is liable for the balance, unless he show the failure of the condition, and his own election, in a reasonable time after, to withdraw. Wilmington & Ra- leigh Railway Co. v. Robeson, 5 Iredell, 391. On a subscription to stock in a railway upon condition the road should " pass " on a certain route through a cer- tain county, it is not a condition precedent to the right to demand payment, that the road should be actually constructed upon that line ; it is sufficient if the road be permanently located there. North Missouri R. Co. v. Winkler, 29 Mo. R. 318; A. & N. L. Railw. Co. v. Smith, 15 Ohio St. 328. See also Vicksburg, Shreveport, and Texas Railw. v. McKean, 12 La. Ann. 638. There is a recent case in Vermont. Conn. & Pass. Railw. Co. v. Baxter, 32 Vt. R. 805, where the court seem to hold, that where the subscription defined the route of the proposed railway, that the representations of the agent who carried about" the paper, that the written words really defined one particular route, and not another, the subscribers themselves being equally connusant of §51. CONDITIONS PRECEDENT TO MAKING CALLS. 173 every two held by lrim, if lie subscribed for the same, paid a cer- tain sum and gave his note for the balance, before a day named ; the facts with the agent, was binding upon the company, and would preclude them from recovering calls upon such subscription, provided the road were not in fact located upon the particular route indicated by the agent, although in fact so located as to comply with the conditions of the written subscription, and although the agent in expressing the opinion he did, acted in perfect good faith. The case is not one of sufficient importance to require much discussion, but it may be well to bear in mind, what seems to have escaped the apprehension of the court for the moment, that the point ruled as stated in the marginal note and in the opinion of the court, seems to be adopting the oral representations of the agent, made at the time of the subscription, as part of the written contract of subscription. The charge of the court below puts the case upon the ground, that the subscriber is bound by the legal construction of his written subscription, and that he cannot escape such responsibility by showing that those who acted on behalf of the company maintained a different opinion, unless that was done fraudulently, with a view to deceive the defendant. We understood that to be the law at the time, and we cannot fairly say that we understand it differently now. In Chamberlain v. Painesville & Hudson R. Co., 15 Ohio N. S. 225, it was decided that where a subscription was made for a given number of shares of stock in a railway company, payable at such times, and in such instalments, a3 the directors may prescribe, provided the road is " permanently located " on a given route, and that a " freight house and depot be built" at a point named : — 1. That on the permanent location of the road in accordance with the terms proposed, the subscription became absolute. 2. That the provision in relation to the erection of the buildings must be regarded as a stipulation merely, and its performance could not be reasonably considered a condition precedent to the right to collect the amount of the subscription. 3. The giving by a subscriber, of his note for the balance of his subscription, and taking, therefor, from the company, a receipt, stipulating, that when paid, the amount of the note should be applied on his stock, was prima facie a waiver of conditions precedent. But this is denied in a recent case, Pai-ker v. Thomas, 19 Ind. R. 213. And in McAllister v. The Ind. & Cin. Railw. Co., 15 Ind. R. 11, a question similar to the one stated in Conn. & Pass. Railw. Co. v. Baxter, supra, arose and received a far more just and reasonable determination. The plaintiff made an unconditional subscription to the stock of the plaintiff's company, and paid the amount and took and retained his certificate without offering to surrender the same. But at the time of the subscription the company promised that a branch of their line should come to Milford, the place of the plaintiff's resi- dence, which had not been done. The suit was brought to recover the money paid. Held, that the parol promise to construct the branch to Milford, could not be proven as part of the written contract of subscription ; and hence the money paid could not be recovered on the ground of a breach of contract. 2. A recovery could not be had on the ground of fraud : the parol promise and 174 ASSESSMENTS OR CALLS. § 51. it was held there was no implied condition that the whole six hundred shares should be issued, and the failure to do so was representation being, under the circumstances, no more than the expression of an existing intention to make the branch. 3. Under the circumstances the company was not liable to repay the money. See also Andrews v. Ohio & Miss. Railw. Co., 14 Ind. R. 169; Eakright v. L. & N. Ind. Railw., 13 Ind. R. 404, where the question of controlling written subscriptions by oral declarations of those who solicit them, as to the probable route of the road, is further discussed and placed upon the true ground, that such representations can have no effect, unless upon the ground of fraud. See also Parker v. Thomas, 19 Ind. R. 213 ; Cunningham v. E. & K. Railw. Co., 2 Head, 23; Brownlee v. O., Ind. & 111. Railw. 18 Ind. R. 68. There are some cases which go the length of saying that as the directors of a railway company have no power to give any binding assurance as to the route which shall be finally adopted, it being their duty to place it where, in their ultimate judgment, the public good requires, it is the folly of any subscriber to rely upon any such representation, and that even where it could be shown that such representations were fraudulently made, to induce subscriptions, and had the purposed effect, the subscriptions could not be avoided on that ground. Ellison v. Mobile & Ohio Railw., 36 Miss. R. 572; Walker v. Same, 34 Id. 245. See also Piscataqua Ferry Co. v. Jones, 39 N. H. R. 491. The verbal prom- ise of the agent who takes up subscriptions for a railway, that the time of pay- ment shall be delayed beyond the time named in the charter, and which in- duces the subscriptions, is not binding upon the company. Thigpen v. Miss. Central Railw., 32 Miss. R. 347. One subscribed, in 1853, for twenty shares of the stock of the P. & C. R. R. Co., on the express condition that the company " should locate and construct their railway along the route contemplated by the Meyer's Mill Plank Road Co., for their road," paid one instalment, part of the second, but delayed the payment of the balance, as the calls were made, until the company, before the road was constructed along the route mentioned, suspended operations, after which pay- ment was refused on the ground that, though the road had been located by the company, they had not constructed it, according to the condition in the subscrip- tion. In an action brought by the company, it was Held, 1. That the promise of subscription being precedent to that of construction, upon the part of the company, the defendant could not insist upon performance by the railroad com- pany, while he refused performance on his part, and that the road having been located as stipulated, and completed so far as the means of the company would allow, it was a compliance with the condition, and the company were entitled to recover. 2. That the condition in the contract of subscription was not a condi- tion precedent, and did not require the completion of the road before payment could be required, but only that when located and constructed it should occupy the route designated, the undertaking being on the part of the subscriber, to pay, as calls should be made by the directors, and on the part of the company to locate as stipulated, and construct as fast as their means would allow. § 51. CONDITIONS PRECEDENT TO MAKING CALLS. 175 no ground for allowing an action to be maintained for the money- paid, or any defence to the notes given for the balance. 2 * 3. It is an essential condition to making calls, in those com- panies where the number of shares and the amount of capital is fixed, that the whole stock shall be subscribed before any calls can lawfully be made. 3 And if calls are made before the requi- site stock is subscribed, although the subscription is completed 3. That the suspension of operations made by the directors long after the pay- ments upon defendants stock had been due, was not a defence in an action brought against him for the unpaid balance thereon. Miller v. Pittsburg & Connellsville Kailw., 40 Penn. St. 237. It was held in one case that where the charter required subscriptions by re- sponsible persons of a certain proportion of the estimated cost of the work be- fore entering upon the construction, that it was not necessary for the company to show compliance with this requirement in order to enforce calls. Nor does the right to make calls depend upon the extent or nature of the indebtedness of the company ; nor can a subscriber defend against calls by showing that a portion of the requisite amount of subscriptions to bind the defendant were made by persons of no actual or reputed pecuniary responsibility, unless he also show that they were not made or taken in good faith. Penobscot Railw. v. White, 41 Me. 512. And the bad faith cannot be shown by the declarations of the subscribers, made long after making such subscriptions. lb. And where the charter of a corporation requires that one thousand shares shall be sub- scribed before the organization of the company, the decision of the majority of the subscribers that this condition has been complied with, and the actual organ- ization of the company in pursuance of the decision is binding upon the minor- ity, lb. This will not preclude the minority from defending on the ground that the proceedings of the majority were in bad faith. a Nutter v. Lexington & West Cambridge Railw., 6 Gray, 85. 8 Stoneham Branch Railway Co. v. Gould, 2 Gray, 277; Salem Mill-Dam Co. v. Ropes, 6 Pick. 23 ; s. c. 9 Pick. 187 ; Cabot & West Springfield Bridge Co. v. Chapin, 6 Cush. 50 ; Worcester & Nashua Railway Co. v. Hinds, 8 Cush. 110; Lexington & West Cambridge Railway Co. v. Chandler, 13 Met. 311 ; N. Hampshire Central Railway Co. v. Johnson, 10 Foster, 390. But a subscriber for shares in a railway company is liable for calls, although by a subsequent amendment of the charter of the company the capital stock is limited to four thousand shares, and that number has not been subscribed, there being no such condition, either in the charter of the company, or the terms of subscription, at the time of subscribing. York & Cumberland Railway v. Pratt, 40 Maine R. 447. But the number of shares required by the charter must be subscribed, as stated in the text. Penobscot Railway v. Duinmer, 40 Maine R. 172. But the records of the company are evidence of such fact. lb. Same v. White, 20 Law Rep. 689 ; s. c. 41 Maine R. 512 ; Peake v. Wabash Railw., 18 Dlinois R. 88. *79 176 ASSESSMENTS OR CALLS. § 51. before action brought, no recovery can be had. 4 But it has been held, that the general provision in the charter of a railway act, that so soon as 1,500,000/. shall have been subscribed, it shall be lawful for the company to put in force all the powers of the act, authorizing the construction of the railway, and of the acts there- in recited, being the general railway acts, did not require such subscription to be made before making calls, but only before ex- ercising compulsory powers of taking land. 5 4. And where the charter provides that the members might divide the capital stock into as many shares as they might think proper, and by a written agreement the subscribers fixed the capital stock at $50,000, divided into 500 shares of f 100 each, and only one hundred and thirty-eight shares had been sub- scribed, it was held no assessment for the general purposes of the corporation could be made. 6 * 5. And where the charter of a railway company requires their stock to consist of not less than a given number of shares, assessments cannot be made before the required number is taken. And in such case conditional subscriptions are not to be reck- oned, even where the condition is acceded to by the company, if the subscriber still repudiates the subscription, on the ground that the condition is not fully performed by the contract drawn up in form. And the plea of the general issue, is no such ad- 4 Norwich & Lowestoft Navigation Co. v. Theobold, 1 Moody & M. 151; Stratford & M. Railway Co. v. Stratton, 2 B. & Ad. 518. And see Atlantic Cotton Mills v. Abbott, 9 Cush. 423, where a condition in a subscription for stock, that the capital stock of the company should not be less than $1,500,000, was held a condition precedent to making calls. 5 Waterford, Wexford, & W. Railway Co. v. Dalbiac, 6 Railw. C. 753 ; 8. c. 4 Eng. L. & Eq. 455. But the American cases will not justify such a con- struction. It would here be held a condition precedent to tlje right to make calls, or even to maintain a corporate existence, probably. 6 Littleton Manufacturing Co. v. Parker, 14 N. Hamp. R. 543 ; Contoocook Valley Railway Co. v. Barker, 32 N. Hamp. R. (1 Fogg, R.) 363. Where the condition of a bond given for the amount of a railway subscription was, tbat the same should be paid when the road was " completed " to a certain village, it was held that the condition was performed when the road was made to the suburbs of the village, in such a manner, as to allow daily trains on it, carrying all the freight and passengers that offer, although some portion of the work was only temporary. O'Neal v. King, 3 Jones, 517; Chapman v. Mad River & Lake Erie Railway Co., 6 Ohio St. 119. *80 § 51. CONDITIONS PRECEDENT TO MAKING CALLS. 177 mission of the existence of the company, as to preclude subscrib- ers from contesting the amount of subscriptions, to enable the company to make calls. 7 6. And where the charter originally required 11,000 shares to be the minimum, and when less than 10,000 were subscribed, the company was organized, and the subscriptions accepted, and assessments* made, and afterwards, by an act of the legislature, accepted by the corporation, the minimum was reduced to 8,000 shares, in an action to recover assessments, made on defendant's shares, before and after such alteration of the charter, it was held : 1. That the minimum was a condition precedent, to be ful- filled by the corporation, before the subscribers were liable to assessments. 2. That the alteration of the charter will not affect prior sub- scribers. 3. Nor will the defendant be estopped from relying upon this 7 Oldtown & Lincoln Railw. Co. v. Veazie, 39 Maine R. 571. Any condi- tion the subscriber sees fit to annex to his subscription must be complied with before the subscriber is liable to assessments. Penobscot & Kennebec Railw. Co. v. Dunn, 39 Maine R. 587. A condition, that not more than five dollars on a share shall be assessed at one time, is not violated by two or more assessments being made at one time, if only five dollars is required to be paid at one time. lb. Penobscot Railw. v. Dumnier, 40 Maine R. 172. And the same principle already stated, that where the conditions of a subscription required seventy-five per cent of the estimated cost of any section of the road to be subscribed, by responsible ■persons, before its construction should be commenced, if the subscriptions were obtained in good faith, assessments will be valid, although some of the subscriptions to make up the amount, prove worthless, is here also maintained. lb. And where the charter of the company requires that the capital stock be not less than five hundred, nor more than ten thousand shares, of $100 each, and authorizes the directors to assess upon five hundred shares, as soon as subscribed, and from time to time to enlarge the capital to the maximum amount named in the charter, all the shares to be equally assessed, it is not necessary for the com- pany to define their capital, within the prescribed limits, before making calls. White Mountains Railw. v. Eastman, 34 N. H. R. 124. It is doubtful if the directors of a railway have power to release subscribers to stock, but at all events, where the release is optional with the subscriber, he must make his election to be released, and in a reasonable time. Penobscot & Ken. Railw. v. Dunn, 39 Maine R. 587. See also Troy & Greenfield Railw. v. Newton, 8 Gray, 596. VOL. I. 12 178 ASSESSMENTS OR CALLS. § 51. condition, by having acted as a shareholder and officer in the corporation, and contributed towards the expenses of the com- pany. 4. That corporators, by any acts or declarations, cannot re- lieve the corporation from its obligation, to possess the capital stock, required by its charter. 8 7. Where the charter of a railway company provided for assess- ments by the directors of the company upon the shares of the stock, as they might deem expedient and necessary in the execu- tion and progress of the work, provided " that no assessment shall be laid upon any share in said corporation of a greater amount than one hundred dollars in the whole, * * * and if a greater amount of money shall be necessary to complete said road it shall be raised by creating new shares," it was held that the charter limited the amount of all the assessments to one hundred dollars on a share, and that assessments beyond that sum, made for the purpose of paying the debts of the company, were illegal. 8 8. "Where the charter of a railway company fails to fix the number of shares of the capital stock, it must be presumed to have been the purpose of the legislature that the corporation should limit the number. And this must be done before any valid assessments can be made. In such case, if the number fixed exceed the number subscribed, the company may change the number ; but the assessments must be made upon the whole number, and if an assessment be made before the number ulti- mately fixed is subscribed, it will be irregular and void. A sub- scriber who has paid one assessment is not thereby precluded from insisting upon this irregularity in defence to others. 9 9. Where the charter of a railway company as originally grant- ed limited the amount of stock at a point which the subscription never reached, but by a subsequent alteration of the charter the amount of the capital stock was reduced, and after the subscrip- tions reached that amount the company was duly organized, it was held that the alteration in the charter did not release prior subscribers. 10 8 Great Falls & Conway R. Co. v. Copp, 38 N. H. R. 124. 9 Som. & Ken. R. Co. v. Cushing, 45 Me. R. 524. 10 Bedford Railw. Co. v. Bowser, 48 Penn. St. 29. § 52. CALLS MAY BE MADE PAYABLE BY INSTALMENTS. 179 *SECTION VI. Calls may be made payable by Instalments. § 52. It was at one time considered that calls made payable by instalments were invalid. 1 But it seems now to be settled that such mode of making calls, where the directors of the com- pany have an unlimited discretion, as to the time and mode of requiring payments of the subscriptions, is unobjectionable. 2 But where the subscription contains a provision, that payment shall be made, at such times and places as should thereafter be directed by the directors, and shall be applied to the construction of the road, it was held, that the subscription did not become payable, until the directors, at a regular meeting, had fixed the time and place of payment. 3 But it is further held, in this case, that it is not necessary to give notice to the subscribers of the time and place of payment. 3 This point in the decision seems not altogether in accordance with the usual practice in such cases, or the general course of decision in regard to calls, which upon general principles must be notified to subscribers before an action can be maintained. But where the subscription is made payable in instalments of ten per cent every sixty days as the work progresses, it is not important that any formal call or demand be made. 4 Where the charter gives the corporation power to collect sub- scriptions to the capital stock by such instalments as the presi- dent and directors shall deem proper, they may make contracts with subscribers for the payment of subscriptions in any reason- able instalments, as to time and place, and if such condition were ultra vires, it would render the whole contract void, and not the condition merely. 5 1 Ambergate, N. & Boston & E. J. R. v. Coulthard, 6 Railw. C. 218 ; Stratford & M. R. v. Stratton, 2 B. & Ad. 518. 2 London & M. W. R v. M'Michael, 4 Eng. L. & Eq. 459 ; Ambergate R. v. Norcliffe, 4 Eng. L. & Eq. 461 ; Birkenhead, L. & Ch. R. v. Webster, 6 Railw. C. 498. 3 Ross v. Lafayette & Ind. Railw., 6 Porter (Ind.), 297. 4 Breedlove v. M. & F. Railw., 1 2 Ind. R. 1 14 ; Smith v. Ind. & 111. Railw., Id. 61. s Roberts v. Ohio & Mobile Railw. 32 Mississippi R. 373. *81 180 ASSESSMENTS OR CALLS. §53. SECTION VII. Party liable for Calls. 1 . Subscribers liable to calls. 2. 6. What constitutes subscription to a capi- tal stock. 3. How a ptirchaser of stock becomes liable to the company. 4. One may so conduct as to estop him from denying his liability. 5. The register of the company evidence of membership. 6. Subscriptions must be made in conformity to charter. 7. Transferee liable for calls. Subscriber also in some cases. 8. Original, books of subscription primary evidence. 9. // lost secondary evidence admissible. 10. What acts will constitute one a share- holder. 11. May take and negotiate or enforce notes for subscriptions. 12. But note fraudulently obtained not en- forceable. § 53. 1. All the original subscribers to the stock in a railway company are usually made liable to calls, by the charter of the company, or by general statute. * 2. Some question has arisen in the English courts, as to what * is necessary to constitute one a subscriber. In an early case l upon this subject, it was held, that the word " subscriber," in the act of parliament constituting the company, applied only to those who had stipulated that they would make payment, and not to all those who had advanced money ; and that one, who was named in the recital of the act, as one of the original pro- prietors, and who had paid a deposit on eight shares, but who had not signed any contract, was not a subscriber within the meaning of the act, and not liable to be sued by the directors for calls on the remainder of such shares. 3. This is the generally received opinion upon that subject, in this country. In one case, 2 a plea to an action to recover calls on stock subscribed, that another person had agreed to take the stock, and that the commissioners had counted this stock to such other person, is insufficient. The signature of the first subscriber should have been erased, and that of the other substituted, or something done to hold the latter liable. A subscriber for stock 1 Thames Tunnel Company v. Sheldon, 6 B. & C. 341. 5 Ryder v. Alton & Sangamon R., 13 HI. R. 516. *82 §53. PARTY LIABLE FOR CALLS. 181 cannot subrogate another person to his obligation, without a substitution of his name upon the books of the company, or some other equivalent act recognized by the charter and by-laws of the company. 4. But the principal difficulty, in regard to liability for calls, arises, where there have been transfers, and the name of the transferee not entered upon the books of the company. For whenever the name of the vendee of shares is transferred to the register of shareholders, the cases all agree that the vendor is exonerated, (unless there is some express provision of law, by which the liability of the original subscriber still continues,) and the vendee becomes liable for future calls. 3 And the vendee having made such representation to the company, as to induce them to enter his name upon the register of shares, is estopped to deny the validity of the transfer. 4 And even where the party has represented himself to the company as the owner of shares, and sent in scrip certificates, which had been purchased by him, claiming to be registered as a proprietor, in respect thereof, and had received from the company receipts therefor, with a notice that they would be exchanged for sealed certificates on demand, he was held estopped * to deny his liability for calls, although his name had not been entered upon the register of shareholders, or any memorial of transfer entered, as required by the act. 5 And where one has paid calls on shares, or attended meetings of the company, as the proprietor of shares, he is estopped to deny such membership. 6 5. The holders of scrip certificates are properly entered as proprietors of shares before the passing of the act, although they have neither signed the parliamentary contract, nor been original subscribers ; and the register-book of shareholders, which is re- 3 Sheffield & Ashton-under-Lyne & Man. R. v. Woodcock, 2 Railw. C. 522 ; s. c. 7 M. & W. 574; London & Grand J. R. v. Freeman, 2 Railw. C. 468; s. c. 2 M. & G. 606 ; post, § 54. 4 Sheffield, Ash. & M. R. v. Woodcock, supra ; London & Grand J. R. Free- man, supra. 5 Cheltenham & Great Western Union R. v. Daniel, and Same v. Medina, 2 Railw. C. 728. And this being matter of estoppel in pais, may be used in evidence, in answer to the defence, without beiug pleaded. 6 London & Grand J. R. v. Graham, 2 Railw. C.,870; s. c. 1 Q. B. 271. *8S 182 ASSESSMENTS OR CALLS. § 53. quired by the statute to be kept, in a prescribed form, by the company, though irregularly kept, is prima facie evidence who are proprietors. 7 6. The subscription for stock, to be valid, must be made in conformity with the act. So that where it was required to be made in such form as to bind the subscriber and his heirs, it was deemed requisite to be made under seal. 8 But such a provision is of no force in this country, simple contracts being of the same force as against heirs as specialties. 7. If by the act of incorporation the shares are made assign- able without restriction, and no express provision exists in re- gard to the party liable for calls, it would seem to follow, upon the general principles of the law of contract, that the proprietor of the share, for the time being, is liable for calls. And where certain formalities are requisite, in the transfer of shares, and these have been complied with on the part of the transferee, or waived by the company at his request, his liability to calls then attaches. 9 The liability of the original subscriber often con- tinues, at the election of the company, after that against the vendee attaches, but when the company consent to accept the name of the transferee, that of the subscriber, or former pro- prietor, ceases. 10 8. It seems to be regarded as settled law, that the best evi- dence of an original subscription to the capital stock of a rail- way company is the production of the original subscription book, or the book of records of the company on which the subscrip- tions were made. 11 T Birmingham, Boston & Th. J. R. v. Locke, 2 Railw. C. 867; s. c. 1 Q. B. 256. 8 Cromford & High Peak R. v. Lacey, 3 Y. & Jer. 80. See ante, § 18, n. 2. ' Huddersfield Canal Co. v. Buckley, 7 T. R. 36 ; Aylesbury R. v. Mount, 5 Scott, New R. 127; West Philadelphia Canal Co. v. Innes, 3 Whart. 198; Mann v. Currie, 2 Barb. Sup. Ct. 294 ; Hall v. U. S. Insurance Co., 5 Gill, 484 ; Bend v. Susquehannah Bridge Co., 6 liar. & J. 1 28 ; Angell & Ames, ch. 15, § 534. 10 Post, § 54. 11 Graff's executor v. Pittsburg & Steubenville Railw. Co., 11 Am. Railw. Times, No. 14. These subscriptions are, in fact, sometimes made upon different books, and then brought together upon one book, for the purpose of permanent preservation. But it would seem there should be evidence of the original sub- scription. § 54. RELEASE FROM LIABILITY FOR CALLS. 183 9. But where the books are shown not to be in the proper place of deposit and custody, and no trace can be found of their present existence elsewhere, secondary evidence is admissible. And the court decide the question of loss, as a preliminary one to the admission of the secondary evidence. 11 10. One who accepts a subscription made by another on his behalf, and pays the calls made thereon and receives a certificate of ownership, is responsible as a shareholder ; and it makes no difference that his name does not appear upon the transfer books or the alphabetical list of stockholders as a transferee of stock. And one may become a shareholder without receiving a certifi- cate of stock. 12 11. It seems clear that railway companies may accept prom- issory notes in payment of subscriptions, and either negotiate or enforce them by suit. 13 The questions of pleading and evidence which may be raided in suits upon such notes are extensively discussed in the case last cited. 12. And where the subscription to railway stock is dependent upon the condition that no calls shall be made until work should be begun upon a particular section of the road, and the subscriber was induced to execute his note for the amount upon the representation of the agents of the company that work had been so commenced, when in fact it had not, the not ? cannot be enforced. 14 *SECTION VIII. Release from liability for Calls. 1, 2. Wliere the transfer of shares, without registry, will relieve the proprietor from calls. 3. Where shares are forfeited, by express con- dition, subscriber no longer liable for calls. 4. Dues cannot be enforced which accrue upon shares after they were agreed to be can- celled. 54. 1. One may relieve himself of his liability for calls, by 12 Burr v. Wilcox, 6 Bosw. 198. 13 Goodrich v. Reynolds, 31 HI. R. 490. See also Straus v. Eagle Ins. Co., 5 Ohio St. 59. " Taylor v. Fletcher, 15 Ind. R. 80. *84 184 ASSESSMENTS OR CALLS. § 54. the transfer of his shares, and the substitution of the name of his assignee for his own upon the books of the company. But un- til this change upon the books of the company is made, they are nt liberty to hold the original subscriber liable, if they so elect. 1 But where the act of incorporation of a joint-stock company de- clared the shares should be vested in subscribers, their executors and assigns, with power to the subscribers to assign their shares, and a committee, to be appointed under the act, were authorized to make calls upon the proprietors of shares, it was held, that an original subscriber, who had transferred his shares, was no longer liable to calls. 2 2. But this case is determined upon the express provisions of the charter of the company. The general rule, in England, at present, under their consolidated acts, is undoubtedly as stated above. And we see no good reason why it should not equally apply in this country. It would seem to be the only mode of securing the ultimate payment of calls. But some of the cases seem to assume, that the mere transfer of the shares in the mar- ket does exonerate the subscriber from the payment of future calls. But this depends chiefly upon the provisions of special charters, and the general laws of the state, applicable to the subject. 3 * 3. Where shares are allotted to one upon the express con- dition to be forfeited if a certain deposit is not paid in a certain time, and nothing more is done by the allottee, he is not liable 1 Ante, §47, and cases there cited. In Everhart v. West Chester and Phila- delphia Railw., 28 Penn. St. 339, it is said that a transfer of stock, made for the purpose of exonerating a subscriber, without the consent of the company, is not a valid defence to an action against him for the purchase-money of the shares subscribed. Ante, § 32. 2 Huddersfield Canal Company v. Buckley, 7 T. R. 36, 42. 8 In West Philadelphia Canal Co. v. Innes, 3 Wharton, 198, it was held, that where the proprietor of shares of the plaintiff's stock transferred them upon the books of the company, after calls were made, but before they fell due, that the transferee was liable for such calls, although he had never received certificates, or given notice of the acceptance of the transfer. And it was held to make no difference, that the transfer was from an original subscriber, without considera- tion, and that the holder is nevertheless liable for unpaid calls. Mann v. Pentz, 2 Sand. Ch. 258; Hartford & New H. R. v. Boorman, 12 Conn. R. 530 ; Ayles- bury R. v. Mount, 5 Scott, New R. 127. *85 §55. DEFENCES TO ACTIONS FOR CALLS. 185 for calls, although the company have entered his name upon the register of shares as a shareholder. 4 4. Where the corporation resolve to release subscribers and to cancel their stock upon making certain payments, which are made and the sto«k cancelled, the company cannot enforce any dues on such shares which subsequently accrue, 5 since the former arrangement amounted to an accord and satisfaction of all claim on the part of the company. But if the company thereby mate- rially lessened the remedy of creditors, they might possibly in- terfere. SECTION IX. Defences to actions for Calls. 1. Informality in organization of company insufficient. 2. Slight acquiescence estops the party in some cases. 3. 4. Default in first payment insufficient. 5. Company and subscriber may waive that condition. 6. Contract for stock, to be paid in other stock. 7, 8. Infancy. Statute of limitations and bankruptcy. 9. One commissioner can give no valid as- surance as to the route. 10. What representations matters of opinion. § 55. 1. It is certainly not competent for a subscriber, when sued for calls, to go, in his defence, into every minute deviation from the express requirements of the charter, in the organization and proceedings of the company. Any member of the associa- tion, who intends to hold the company to the observance of those matters which are merely formal, should be watchful, and inter- pose an effectual barrier to their further progress, at the earliest opportunity, by mandamus, or injunction out of chancery, or other appropriate mode. 1 In cases of this kind often, where vast 4 Waterford, Wexford, Wicklow, & D. R. v. Pidcock, 18 Eng. L. & Eq. 517. 8. c. 17 Jur. 26 ; s. c. 22 Law J. Rep. (n. s.) Exch. 146 ; s. C. 8 Exch. R. 279. Where the company accept a conveyance of shares to themselves, it will ex- onorate the owner from calls. But a sale to another company of all the ef- fects of the company, will not release the shareholders from calls already made. Plate Glass Insurance Co. v. Sunley, 29 Law Times, 277. 5 Miller v. Second Jefferson Building Association, 50 Penn. St. 32. And where the company accept another in the place of the original subscriber, the latter is wholly released. Haynes v. Palmer, 13 Louis. Ann. 240. 1 The London & Brighton Railw. Co. v. Wilson, 6 Bing. N. C. 135. This case 186 ASSESSMENTS OR CALLS. § 55. expense has been incurred, and important interests are at stake, courts will incline to conclude a member of the association, by the briefest acquiescence, in any such immaterial irregularity, and often, in regard to those, which, if urged in season, might have been regarded as of more serious moment. In one case, 1 Tindalj Ch. J., says, in regard to the offer of a plea, that the money sued for, being the amount of a call, was * intended for other purposes than those warranted by the act, " It seems to me it was never intended, nor ought it to be allowed, that so general a question as that should be litigated, in the question, whether a call is due from an individual subscriber." And it was held no sufficient ground of enjoining the directors from making calls, that the proceedings had been such as to amount to an abandonment of the enterprise, as it was possible that there were still legal obligations to answer. 2 And where the directors were authorized to limit the number of shares, but could not proceed with the road until two hundred and fifty shares were "subscribed, and after that number were taken they resolved to close the books, it was held that this vote was equiv- alent to a vote fixing the number of shares, and that the com- pany might therefore proceed to make and enforce calls, under the statute, and to collect the deficiency remaining, after the sale of forfeited stock. 3 2. But where the statute prescribes the terms on which shares may be sold, it must be strictly followed, or the sale will be void, as where the prescribed notice is not given. 4 And it would seem, that the courts are reluctant to admit defences to ac- tions for calls, upon the ground of informality in the proceedings of the company, or even of alleged fraud, where there has been any considerable acquiescence on the part of the shareholder. 5 decides, that a plea, that the company had made deviations in their line, and that the money sued for was needed only in regard to such deviations, could not be entertained or regarded as a proper inquiry in an action for calls upon shares ; and so also of a plea, that fewer shares had been allotted than the act required. Walford, 279 ; Wight v. Shelby Railway, 16 B. Monr. 5. 2 Logan v. Courtown, 5 Eng. L. & Eq. 171. 8 Lexington & West Cambridge R. v. Chandler, 13 Met. 311. 4 Portland, Saco, & Portsmouth R. v. Graham, 11 Met. 1. 6 Walford, 278, 279; Cromford & High P. R. v. Lacey, 3 Y. & Jer. 80; *86 § 55. DEFENCES TO ACTIONS FOR CALLS. 187 3. It seems to have been held, in some cases, that a subscriber for stock may defend against an action for calls, upon the ground that he did not pay the amount required by the charter to be paid down at the time of subscription. 6 4. But it is questionable how far one can be allowed to plead his own non-performance of a condition in discharge of his un- dertaking. And a different view seems to have obtained to some extent. 7 It has been held the stockholder cannot object, that he * has not complied with the charter, after having voted at the election of officers, or otherwise acted as a shareholder. 8 And so also where the subscription is made, while defendant held the books of the company and acted as commissioner. 9 And pay- Mangles v. Grand Collier Dock Co., 2 Railw. C. 359 ; Thorpe v. Hughes, 3 Mylne & Cr. 742. 6 Highland Tump. Co. v. McKean, 11 Johns. 98; Jenkins v. Union Turnp. Co., 1 Caines's Cas. in Error, 86 ; Hibernia Turnpike Co. v. Henderson, 8 S. & R. 219; Charlotte & C. R. v. Blakely, 3 Strob. 245. T Henry v. The Vermilion R. 17 Ohio R. 187. A similar rule is recognizecf in Louisiana, in the case of Vicks. S. & Texas Railw. v. McKean, 12 La. Ann. 638. 8 Clark v. Monongahela Nav. Co., 10 Watts, 364. Nor can a subscriber, after having transferred his stock to another, thus treating it as a valid security, object, in the trial of a suit against him on the original subscription, that the same was originally invalid, by reason of the non-payment of the sums requisite to give it validity, at the time of making the subscription. Everhart v. West Chester & Ph. Railw., 28 Penn. St. 339. And where commissioners were appointed, by an act of the legislature, and were authorized to receive subscriptions for the purpose of constructing a rail- way, no subscription to be valid unless five dollars was paid upon each share at the time of subscribing ; the act providing that when a certain number of shares shall have been so subscribed, and the same certified under the oath of the commissioners to the governor, he should issue letters-patent, incorporating the subscribers, and such as should thereafter subscribe, and this was done, and the company duly organized, it was held : That the act imposed no restriction upon the corporation after it was organ- ized, in regard to the payment of the five dollars at the time of subscription. That the condition, that subscriptions should not be valid till a certain amount Avas subscribed, was one which the parties had a right to annex to the contract of subscription, and as such, was valid, and the subscriptions could not be en- forced till the condition was performed. Philadelphia & West Chester Railw. v. Hickman, 28 Penn. St. 318. See also Black River & Utica Railw. Co. v. Clarke, 25 N. Y. R. 208 ; H. & P. Plank Road Co. v. Bryan, 6 Jones Law, 82 ; Piscataqua Ferry Co. v. Jones, 39 N. H. R. 491. 8 Highland Turnp. Co. v. McKean, 11 Johns. 98; Grayble v. The York #87 188 ASSESSMENTS. OR CALLS. § 55. ment before the books are closed, has been held sufficient to bind the subscriber. 10 So also if the sum have been collected by- suit. 11 And a promissory note has been held good payment, where the charter required cash on the first instalment, at the time of subscription. 12 And, by parity of reason, if the subscrip- tion binds the subscriber to pay for the stock taken, in conform- ity to the requisitions of the charter, which is the more generally received notion upon the subject at present, we do not well com- prehend why the subscription itself may not be regarded as effectual, to create the subscriber a stockholder, and as much a compliance with the condition to pay, as giving a promissory note. In either case, the company obtain but a right of action for the money, and if the party can be allowed to urge his own default in defence, it is perhaps no compliance with the charter. But upon the ground that, so far as the subscriber is concerned, the company may waive this condition, upon what is equivalent to payment, it ought also to be equally held, that when the sub- scriber has obtained such a waiver, for his own ease, he shall be estopped to deny, that it was so far a compliance with the char- ter as to render the contract binding. 5. And upon the other hand, the company having consented to accept the subscriber's promise, instead of money, for the first instalment, cannot defeat his right to be regarded as a stock- holder, on account of his not complying with a condition which they have expressly waived. It would seem, that under these circumstances, the immediate parties to the contract could not obtain any advantage over each other, by reason of the waiver, by mutual consent, of strict performance of such condition. But that the objection must come properly from some other quarter, either the * public, or the other shareholders. But possibly the cases decided upon this subject do not justify any such relaxa- & Gettysburg Turnp. Co., 10 Serg. & Rawle, 269. So also if one act as a stockholder in the organization of the company. Greenville & Columbia Railw. v. Woodsides, 5 Rich. 145. 10 Klein v. Alton & Sangamon Railw., 13 111. R. 514. 11 Hall v. Selma & Ten. Railw., 6 Alabama, 741. 12 McRae v. Russell, 12 Ired. 224 ; Selma & Ten. Railw. v. Tipton, 5 Ala- bama, 787; Tracy v. Yates, 18 Barb. 152; Greenville & Columbia Railw. v. Woodsides, 5 Rich. 145 ; Mitchell v. Rome Railw., 17 Georgia R. 574. *S8 §55. DEFENCES TO ACTIONS FOR CALLS. 189 tion, even between the parties to the immediate contract of sub- scription. Upon general principles, applicable to the subject, as educed from the law of contracts, we see no objection to the waiver of such a condition on behalf of the company. And if there be any objection upon other grounds, it is not for the ben- efit of the subscriber. 13 13 It has been held that the misstatement of the length of the road, in the articles of association, if there be no fraud ; or the lease, or sale, of the fran- chises of the corporation to another company, which is void ; or the neglect to make the whole road, even without legislative sanction, will not exonerate a subscriber from paying calls. Troy & Rutland Railw. v. Kerr, 17 Barb. 581. But where a preliminary subscription is required, it must be absolute and not dependent upon conditions. Troy & Boston Railw. v. Tibbits, 18 Barb. 297. But a condition that provides for interest, by way of dividends, to paying sub- scribers, until the full completion of the road, at the expense of subscribers who do not pay, or one that imposes a limitation upon the directors in calling in stock, is void as being against good policy. lb. In a recent case in Kentucky, Wight v. Selby Railw., 16 B. Monr. 5 (1855), it was held, that a subscription to stock, in a railway, is not rendered invalid by reason of the subscriber's failure to pay a small sum required by the charter to be paid upon each share when he subscribed. Simpson, J. " It was their duty to pay it, at the time the stock was subscribed, but they should not be allowed to take advantage of their own wrong, and release themselves from their whole obligation, by a failure to perform part of it." This seems to us a sound view of the subject, and the only one, which is consistent with the general principles of the law of contract, as applicable to the question. In a still more recent case, S. subscribed for $ 500 of stock in a railway com- pany upon the understanding that the first ten per cent, required by law to be paid in cash upon subscribing should be paid by his services in securing subscrip- tions and right of way. He subsequently presented an account against the com- pany for services, from which it appeared, that at the date of the subscription the company was indebted to him in an amount greater than the cash payment re- quired, in which account he applied and credited $ 50 for ten per cent, upon his subscription, and $ 50 for the first call made thereon. The account was allowed by the company and the balance paid by S. . Held, that this was a sufficient com- pliance with the statute in respect to the payment of the first ten per cent., and made the subscription obligatory upon S. Beach v. Smith, 30 N. Y. R. 116. See also Vicksburg, Sh. and Texas R. Co. v. McKean, 12 La. Ann. 638. In this case it is further held, to be no valid defence to a, subscription to the stock of a railway, that it was delivered as an escrow to one of the commission- ers appointed to receive subscriptions. It should have been delivered to a third person, to become effectual as an escrow. Such subscribers are presumed to know the conditions of the charter under which the subscription is taken, and that if they desire to make their subscriptions conditional, it must be so ex- 190 ASSESSMENTS OR CALLS. § 55. * 6. An agreement to take stock and pay in the stock of a canal company, and an offer of the canal stock, will not make the party liable to pay money. 14 7. Infancy is a good defence, if the person be an infant at the pressed in the written terms of subscription, and that it is not competent to de- liver a written contract, as an escrow, to the party himself. For, to admit oral evidence of such a condition, in the delivery of a written contract to the party benefited thereby, is a practical abandonment of the rule of evidence, that such testimony is incompetent to control a written contract. It has been held, that it is not competent for the" commissioners to accept the check of a subscriber in payment of the amount required by the charter to be paid at the time of subscription, but that specie, or its equivalent, must be de- manded. Crocker v. Crane, 21 Wend. 211 ; s. c. 2 Am. Railw. C. 484. But this is at variance with the general course of decision, unless in regard to banks, where the charter expressly requires the payment to be in specie. King v. Elliott, 5 Sm. & M. 428. And where the charter of a railway company was made to depend upon the condition of the company expending $ 50,000 in two years, and completing the road in four years from the date of the grant, and the company having failed in the first part of the condition, but having obtained subscriptions to their stock to a large amount, and the defendant being one of the subscribers, the company having organized, and chosen directors, the defendant being one of them, the legislature revived and renewed the charter, and extended the time for the per- formance of such condition ; and subsequently to this, a meeting of the stock- holders was called by the commissioners, in which the defendant took part, ad- ditional directors being appointed, and at a meeting of the directors, the defend- ant being present, a call was made upon the subscriptions, it was held that this amounted to an acceptance of the renewal of the charter, and was such a rec- ognition of the former organization of the company, as to amount to a sufficient organization under the new charter, and the defendant was held to be estopped by his conduct from denying the regularity of these proceedings, and to be lia- ble to pay calls on his stock. Danbury & Norwalk Railw. v. Wilson, 22 Conn. R. 435. Where the general railway law, under which a company is organized, re- quires a payment of ten per cent upon each subscription before the filing of the articles of association with the secretary of state, it is sufficient, if the cash pay- ments, by whomsoever made, amount in the aggregate to ten per cent, upon $1,000 for each mile of the road proposed to be constructed. Lake Ontario, A. & New York Railw. v. Mason, 16 N. Y. Court of Appeals, 451. And the subscription to stock before the incorporation of the company, is obligatory upon the company, although the subscriber make no cash payment whatever, the right of membership thereby acquired being a sufficient consideration for the subscription. lb. 14 Swatara Railw. v. Brune, 6 Gill, 41. *89 §55. DEFENCES TO ACTIONS FOR CALLS. 191 time of suit brought, or if he repudiate the subscription within a reasonable time after coming of full age. 15 By the general provisions of the English statute, all persons may become share- holders, there being no exception, in terms, in favor of infants ; and if one be registered while an infant, and suffer his name to remain on the registry after he becomes of full age, he is liable for calls, whether made while he was an infant, or afterwards. 16 16 North W. Raihv. v. MeMichael, 5 Exch. 114; Birkenhead Railw. v. Pit- cher, 5 Exch. 121 ; s. c. 6 Railw. C. 622. The party should also deny hav- ing derived any advantage from the shares, or offer to restore them. N. W. Railw. v. MeMichael, 5 Exch. 114; Leeds & T. Railw. v. Fearnley, 4 Exch. 26; Dublin & W. Railw. v. Black, 16 Eng. L. & Eq. 556; s. c. 8 Exch. 181. See also Deposit & G. Life Assur. Co. v. Ayscough, 6 E. & B. 761. 10 Cork & Bandon Railw. v. Cazenove, 10 Q. B. 935. But it would seem that infants are not comprehended, by the general terms of the English statute. Birkenhead &c. Railw. v. Pilcher, supra. It has been said that an infant shareholder, or subscriber, in a railway com- pany, is in the same situation as in regard to real estate, or any other valuable property, which he may have purchased and received a conveyance of. If, upon coming of age, he disclaim the contract, and restore the thing, with all ad- vantages arising from it, his liability is terminated, and he cannot be made lia- ble for calls. Parke, B., in Birkenhead & C. Railw. v. Pilcher, 6 Railw. C. 625. The infant is not regarded as merely assuming an executory undertaking, which is void on the face of it, but in the nature of a purchaser of what is pre- sumed to be valuable to him. Where, therefore, there is nothing but the simple fact of infancy pleaded to an action for calls, it is insufficient. lb. It would seem that the plea should contain averments, showing the disadvantageous nature of the contract to the infant, his repudiation of the contract, and restitution of all benefits decreed under it, on coming of full age, or that he is still an infant, and is ready to do so, upon coming of full age. MeMichael v. London & N. W. Railw., 6 Railw. C. 618; Birkenhead & C. Railw. v. Pilcher, 6 Railw. C. 564, 662. The mere plea of infancy is an immaterial plea, and issue being joined thereon, and found for defendant, the plaintiff is still entitled to judgment veredicto non ob- stante, lb. The plea must show that the infant avoids the contract of subscription, on his coming of full age. Leeds and Thirsk Railw. v. Fearnley, 5 Railw. C. 644 ; s. c. 4 Exch. 26. And the appearance by attorney is not equivalent to an averment that the defendant is of full age. lb. But where the plea alleged, that the defendant became the holder of shares, by reason of his having contracted and subscribed for them, and not otherwise ; and that at the time of his so contracting or subscribing, and also at the time of making the calls, he was an infant ; and that while he was an infant he repudi- ated the contract and subscription, and gave notice to the plaintiffs that he held 192 ASSESSMENTS OR CALLS. § 55. It seems to be * doubted by the English courts whether the stat- ute of limitations as to simple contracts applies to an action for calls, that being a liability imposed by statute, and so to be re- garded as a specialty. 17 8. Bankruptcy is a good defence for calls made after the cer- tificate of bankruptcy issues, but to meet liabilities incurred before. 18 9. One of the commissioners appointed with five others at a given place to take subscriptions to a railway, has no right in doing so to give any assurance as to the line of location that would be adopted by the road. 19 10. And where the subscription is made upon condition of the road going in a particular route, the plaintiff may show that the defendant owned land upon that route. And any representations of the agents taking the subscriptions, as to the ultimate value of the stock, will be regarded as matters of opinion merely upon which the subscriber had no right to rely. 20 the shares at their disposal ; it was held a good prima facie bar ; and that if the defendant, after he came of full age, disaffirmed his repudiation, or if he become liable, by enjoyment of the profits, those facts should be replied. Newry & En- niskillen Railw. v. Coombe, 3 Exch. 565 ; s. c. 5 Railw. C. 633. Where shares were sold to an infant, and were duly transferred to him, on the declaration of the vendor that he was of full age, and the father of such infant, by a deed, reciting that he had purchased on behalf of the son, and cove- nanting that he, on coming of age, would execute the deed, and pay all calls, and that the father would indemnify the company against all costs, by reason of the son being an infant, it was held that the father was a contributory. Ex parte Reaveley, 1 De G. & S. 550. See also Stikeman v. Dawson, 4 Railw. C. 585 ; s. c. 1 Deg. & S. 90. 17 Cork & B. Railw. v. Goode, 24 Eng. L. & Eq. 245. 18 Chappie's case, 17 Eng. L. & Eq. 516 ; s. c. 5 De G. & Sm. 400. 19 North Carolina Railw. v. Leach, 4 Jones Law, 340. 20 Vawter v. Ohio & Miss. R. Co., 14 Ind. R. 174. *90 § 56. FUNDAMENTAL ALTERATION OF CHARTER. 193 ♦SECTION X. Fundamental alteration of Charter. 1. Will release the subscribers to stock. 2. Railway company cannot purchase steam- boats. 3. 7. Majority may bind company to altera- tions, not fundamental. 4. Directors cannot use the funds for purposes foreign to the organization. 5. 9. But where the legislature or the directors make legal alterations in the charter, or the location of the road, it will not re- lease subscribers. 6. But if subscriptions are made upon con- 8, 9. Consideration of subscription, being location of road, must be substantially performed. 10. Express conditions must be performed. 1 1 . How far alterations may be made without releasing subscribers. 12. It may be done where such power is re- served in the charter. 13. Personal representative liable to same ex- tent as subscriber. 14. Money subscriptions not released by sub- sequent ones in land. dition of a particular location, it must j 15. Corporation cannot emigrate into another be complied with. state even by legislative permission. § 56. 1. There can be no doubt, that subscribers to the stock of a railway company are released from their obligation to pay calls by a fundamental alteration of the charter. This is so un- deniable, and so familiar a principle, in the general law of part- nership, as not to require confirmation here. We shall briefly advert to the points decided in some of the more prominent cases, in regard to incorporated companies. The general doc- trine applicable to the subject is very perspicuously stated by Woodbury, J., in an early case in New Hampshire. 1 " Every owner of shares expects, and stipulates, with the other owners, as a corporate body, to pay them his proportion of the expenses, which a majority may please to incur, in the prosecution of the particular objects of the corporation. To make a valid change in this special contract, as in any other, the consent of both par- ties is indispensable." 2. In an important case 2 where it appeared that after calls fell 1 Union Locks & Canal Co. v. Towne, 1 N. Harnp. K. 44. But where the origi- nal charter or preliminary contract provides for modifications, the subscribers are still bound by all such as come fairly within the power. Cork & Youghal Railroad v. Patterson, 37 Eng. L. & Eq. 398; post, § 254, n. 6; Nixon v. Brownlow, 30 Law Times, 74. s. c. 3 H. & N. 686. 2 Hartford & New Haven Railw. v. Croswell, 5 Hill, 383. In Winter v. Mus- cogee Railw., 11 Ga. R. 438, the charter was so altered as to allow the road VOL. i. 13 *91 194 ASSESSMENTS OR CALLS. § 56. due, but before suit brought, the company, being incorporated for the purpose of building a railway, procured an additional special * act, by which they were authorized to purchase steam- boats : it was held, that a subscriber, not having assented to the alteration, was absolved from his obligation to pay calls. 3. In a very elaborate opinion of Bennett, Chancellor, 3 upon this subject, the following propositions are established : — to stop short of its original terminus and pass in a different route, and subscrib- ers to the stock were held thereby released, unless they assented to the altera- tion. But where one gave his note for the first instalment, and his stock was forfeited, for non-payment of calls, he is not relieved from payment of his note by a material alteration of the charter. Mitchell v. Eome Railw., 17 Ga. R. 574. But any modification of the charter which affects merely the detail of proceedings in making and enforcing calls will not release subscribers to the stock, when such modification has been accepted by the corporation. Illinois River Railw. Co. v. Beers, 27 Rlinois R. 185. 3 Stevens v. Rutland & Burlington Railw., 29 Vt. R. 545. The opin- ion at length is a valuable commentary upon this important subject. In this opinion the learned chancellor maintains, — 1. That by the implied contract, among the proprietors of all joint-stock un- dertakings, there is a tacit inhibition against applying the funds, for any purpose beside the general scope of the original enterprise, and that this applies to cor- porations, equally with commei'cial partnerships. Natusch v. Irving, Gow on Part. App. 567. And that courts of equity will restrain a corporation from thus misapplying its funds by injunction. Ware v. Grand Junction "Water Co., 2 Rus- sell & Mylne, 461. And that this will be done upon the application of those shareholders who dissent. And in some instances will restrain the company from applying to the legislature for an enlargement of their powers. Cunliff v. Manchester & Bolton Canal Co., 13 Eng. Cond. Ch. 131 ; s. c. 2 Russell & My. 470, 475 ; Livingston v. Lynch, 4 Johns. Ch. 573. 2. That if the proposed alteration is only auxiliary to the main design of the original organization, it will not be enjoined ; but if it be fundamental, it will be. That a variation in the course of a turnpike-road has been regarded as a fundamental alteration in the charter, Middlesex Turnpike Co. v. Lock, 8 Mass. R. 268, and, as such, to exonerate subscribers to the stock of the original com- pany. [But Irvine v. The Trunpike Co., 2 Penn. R. 466, holds it will not have that effect.] And that in such cases it will make no difference, that the sub- scriber was a director in the company, and joined in the petition to the legisla- ture for the alteration. Same v. Swann, 10 Mass. R. 384 ; Same v. Walker, 10 Mass. R. 390. The learned chancellor regarded the case of Revere v. The Boston Copper Co., which was cited, by the counsel for the defendants, as making rather against his purpose. 15 Pick. 351,363. The case of Hartford & New Haven Railw. v. Croswell, 5 Hill, 383, 385, is relied upon, as having defined a fundamental *92 § 56. FUNDAMENTAL ALTERATION OF CHARTER. 195 * 1. That a majority of a joint-stock company cannot use the joint property except within the legitimate scope of their charter, alteration of the charter of a corporationin, the language of Ch. J. Nelson, to be one " by which a new and different business is superadded to that originally contemplated." 3. No one can be made a member of a joint-stock corporation without his con- sent. Ellis v. Marshall, 2 Mass. R. 2G9 ; nor can he be compelled to remain a member of such company after its fundamental organization is altered by act of the legislature. But an act of the legislature allowing a navigation company to raise their dam above the poiht of the original charter limit, is in furtherance of the original grant, and will not exonerate the subscribers. Gray v. Mononga- hela Navigation Co., 2 Watts & Serg. 156. And an alteration in the number of votes, to be cast by stockholders, if it impair the obligation of the contract re- sulting from the grant, is void, and so cannot release the subscribers. Osborn v. Bank of United States, 9 Wheat. 738. But any statute which has the force to effect an alteration in the structure of the corporation, will release subscribers. Indiana & Ebensburg Tump. Co. v. Phillips, 2 Penn. R. 184. 4. That statutes extending the term of a corporation, for closing up its busi- ness, on petition of the directors, have no proper bearing upon the question. Lincoln & K. Bank v. Richardson, 1 Greenl. 79; Foster v. The Essex Bank, 16 Mass. R. 245. 5. That it is no fatal objection to the application that it is made at the insti- gation of a rival enterprise. Coleman v. Eastern Counties Railw., 10 Beavan, 1. [But see ante, § 20.] 6. That an existing railway company will be restrained in equity from apply- ing its present funds to extend their line, or improve the navigation of a river connected with their line, or for obtaining an act of the legislature, authorizing them to do so. Hunt v. Shrewsbury & Chester Railw., 3 Eng. L. & Eq. 144 ; Coleman v. Eastern Co.'s Railw., 10 Beavan, 1. 7. That members of an existing company cannot be compelled to surrender their interest to the company, or to others, and retire, in order to enable them to change the character of the enterprise. Lord Eldon, Chancellor, in Natusch v. Irving, supra. 8. In favor of the importance and necessity of having this constant super- vision exercised over joint-stock companies, in order to keep them within the range of their legitimate functions, the learned chancellor thus concludes : — " Where it is clearly shown that a corporation is about to exceed its powers, and to apply their funds or credit to some object beyond their authority, it would, if the purpose of the corporation was carried out, constitute a breach of trust ; a court of equity cannot refuse to give relief by injunction. Agar v. The Regent's Canal Co., Cooper's Eq. 77 ; The River Dun Navigation Co. v. North Midland Railw. Co., 1 Railw. C. 153, 154. The last case was before the Lord Chancellor, and he uses this language : ' If these companies go beyond the pow- ers which the legislature has given them, and, in a mistaken exercise of those *93 19G ASSESSMENTS OR CALLS. § 56. * and if they attempt to do so equity will restrain them. 2. The shareholders are bound by such modifications of the charter as are not fundamental, but merely auxiliary to the main design. 3. If a majority of a railway company obtain an alteration of their charter, which is fundamental, as to enable them to build an extension of their road, any shareholder who has not assented powers, interfere with the property of individuals, this court is bound to inter- fere ; and that was Lord Eldon's ground in Agar v. The Regent's Canal Co.' The lord chancellor further adds : ' I am not at liberty (even if I were in the least disposed, which I am not) to withhold the jurisdiction of this court, as ex- ercised in the case of Agar v. The Regent's Canal Co.' In that case Lord Eldon proceeded simply on the ground that it was necessary to exercise this jurisdic- tion of chancery, for the purpose of keeping these companies within the powers which the acts give them. And it is added : ' And a most wholesome exercise of the jurisdiction it is ; because, great as the powers necessarily are, to enable the companies to carry into effect works of this magnitude, it would be most prejudicial to the interests of all persons with whose property they interfere, if there was not a jurisdiction continually open, and ready to exercise its power to keep them within their legitimate limits.' "The injunction must, therefore, be allowed ; but only so far as to restrain the defendants, until the further order of the chancellor, from applying the pres- ent funds of the corporation, or their income from their present road, either di- rectly or indirectly, to the purpose of building said extension in said road, or to pay land damages and other expenses which may be contingent upon the build- ino 1 of it ; and also from using or pledging, directly or indirectly, the credit of the corporation in effecting the object of the extension ; and at the same time, the company will be left at liberty to build the extension with any new funds which they may see fit to obtain for that specific object." See also Gifford v. New Jersey Railw., 2 Stockton's Ch. 171, where this subject is examined some- what at length by the chancellor, and the conclusion arrived at, that it is com- petent for a court «f equity to interfere in the management and application of the funds of a corporation, at the instance of a single stockholder ; that the leg- islature may give additional power from time to time to corporations, and that such acts are binding, unless they conflict with vested rights, or impair the ob- ligation of contracts. That a stockholder in an existing corporation has a vest- ed rifht in any exclusive privilege of the corporation which tends to enhance the value of its stock, and that he would not be bound by any act of the legisla- ture tending to produce such effect, without his consent ; but that such consent •will be inferred from long acquiescence, which is equivalent to express consent. In Scofield v. School District, 27 Conn. R. 499, it was held by a divided court, that one inhabitant of a school district might obtain an injunction against the corporation denying them the power to use their school-house for the pur- poses of religious meetings and Sunday schools, which is certainly carrying the doctrine to the very verge of absurdity. Post, § 174, n. 7. *94 § 56. FUNDAMENTAL ALTERATION OF CHARTER. 197 to the act, may restrain the company, by injunction, from apply- ing the funds of the original organization to the extension. 4. In a late case before the Master of the Rolls, 4 it was held, that directors have no right to enter into or to pledge the funds of the company in support of any project not pointed out by their act, although such project may tend to increase the traffic upon the railway, and may be assented to by the majority of the shareholders, and the object of such project may not be against public policy. And that acquiescence by shareholders in a pro- ject for ever so long time, affords no presumption of its legality. And in a late case in this country it is held, that the subscriber having acted as director of the corporation, and as such having participated in the proceedings to effect the alteration, will not make him liable for calls, upon his original subscription. 5 5. But it is no defence to an action for calls, that the directors have altered the location of the road, if by the charter they had the discretion to do so. 6 And if the charter contain a provision that the legislature may alter or amend the same, the exercise of this power will not absolve the shareholders from their liability to pay calls. 7 And all subscriptions to stocks, and all contracts 4 Colman v. Eastern Counties Raihv., 4 Railw. C. 513. See also Munt v. Shrewsbury & Chester Railw., 3 Eng. L. & Eq. 144 ; East Anglian Railw. v. Eastern Counties Railw., 7 Eng. L. & Eq. 505 ; MacGregor v. Deal & Dover Railw., 16 Eng. L. & Eq. 180; Danbury & Norwalk Railw. v. Wilson, 22 Conn. R. 435 ; Mill-Dam Co. v. Dane, 30 Maine, R. 347 ; post, § 235 ; Winter v. Muscogee Railw., 11 Ga. R. 438 ; Hamilton Plank Road v. Rice, 7 Barb. 157 ; Commonwealth v. Cullen, 1 Harris, 133 ; 3 Woodbury & Minot, 105. 5 Macedon Plank Road Co.?;. Lapham, 18 Barb. 312. But see Greenville & Columbia Railw. v. Coleman, 5 Rich. 118. 6 Colvin v. The Turnpike Co., 2 Carter, 511 ; Id. 656. Nor is it a defence to an action for calls, that the name of the company, or the length and termini of the road, have been materially altered. Del. & Atlantic Railw. v. Irick, 3 Zab. 321. 7 Northern Railw. v. Miller, 10 Barb. 260; Pacific Railw. v. Renshaw, 18 Missouri R. 210. And where a subscription is made to the capital stock of a rail- way, while an act of the legislature exists, allowing the consolidation of such com- pany with another, the fact that such consolidation is subsequently made affords no ground for avoiding the subscription. Bish v. Johnson, 21 Ind. R. 299. And if, from the articles of association of the company, it is obvious that con- solidation with another company was one of the leading purposes of the incor- poration, the fact of such consolidation, after the date of a subscription, will be 198 ASSESSMENTS OR CALLS. § 56. for the * purchase of stock, to be delivered at a future day, must be understood to be made subject to the exercise of all the legal powers of the directors and of the legislature, and an illegal ex- ercise of power by either will, it has sometimes been said, bind no one, and should exonerate no one from his just obligations. 8 6. But where subscriptions are made upon the express con- dition that the road shall go in a particular place, the perform- ance of such condition is commonly regarded as indispensable to the liability of the subscribers, the same as in other contracts. 9 But an alteration in the line of the road, which does not affect the interest of the subscriber, will not absolve him from his sub- scription. 10 And when the subscription was made upon condition that the road be located upon a given line, and providing that such loca- no defence against its enforcement, even when the statute authorizing the consoli- dation is subsequent to the date of the subscription. Hanna v. Cin. & F. W. Railw., 20 Ind. R. 30. The consolidation of two corporations does not effect the dissolution of either, so as to work the abatement of pending actions. Baltimore & Susq. Railw. v. Musselman, 2 Grant Cas. 348. But see McMahan v. Morrison, 16 Ind. R. 172 contra. For many purposes the liabilities of the original com- panies remain, as before the consolidation, Central Railw. Co. v. Bunn, 3 Stockt. Ch. 336. It is here decided, that where the original company and a new com- pany formed by the mortgagees after sale of the road bear the same name and have the same president, a suit to enforce a claim contracted before the sale, served upon the president, cannot go to judgment against the new company, nor will a court of equity allow a general judgment, at law, to be taken. The plain- tiff must elect to take judgment, in terms, against the original company. This seems to be a very judicious course, but one for which courts of equity will afford no precedent. The order should have been made, most obviously, in the court of law. 8 Irvin v. Turnpike Co., 2 Penn. R. 466 ; Conn. & Pas. Rivers Railw. v. Bailey, 24 Vt. R. 479. Faulkner v. Hebard, 26 Vt. R. 452 ; Fry's Exr. v. Lex. & Big S. Railw., 2 Met. (Ky.) 314. 9 See cases under notes 2 & 3, supra ; and also Railsback v. Liberty & Abing- ton Turnp. Co., 2 Carter (Ind.) 656. And in Kenosha, Rockford, and Rock Island R. Co. v. Marsh, 17 AViscons. R. 13, it was held, that where the legisla- ture had the general power to repeal or alter acts of incorporation, and accord- ingly allowed an existing company, chartered to carry a railway over a given line, and whose subscriptions had been taken with that view, to change their route very essentially, that the subscribers were thereby released from their obligation to pay calls. 10 Banet v. Alton & Sangamon Railw., 13 HI. R. 504; Danbury & Norwalk Railw. v. Wilson, 22 Conn. R. 435. *95 § 56. FUNDAMENTAL ALTERATION OF CHARTER. 199 tion should be sufficiently evinced by an order of the board of directors accepting such subscription upon the condition named, it was held sufficient to bind the subscriber, that the road had been in fact located and built upon the line designated, and that this was known to him, although there had been no formal action of the board accepting the subscription. 11 7. And an alteration in the charter, which consists only of an increase of the corporate powers, or of a different organization of the corporate body, leaving it with lawful power to execute, what may be regarded as substantially the original object of its crea- tion, will not exonerate subscribers to the stock of the company. 12 So too where the general laws of the state provide that all acts of incorporation may be altered, amended, or repealed by the legislature, it is no defence to a subscription for stock, that subsequently the legislature increased the liability of the stock- holders. 13 8. And notwithstanding much apparent conflict in the cases, upon this subject, it will be found to be the general result of the best considered cases, that the alteration, either in the charter of the company, or the line of the road, to exonerate the subscriber for stock, must be one which removes the prevailing motive for the subscription, or else materially and fundamentally alters the responsibilities and duties of the company, and in a manner not 11 Moore v. New Albany & Salem Railw. Co., 15 Ind. R. 78. 12 Pacific Railw. v. Hughs, 22 Missouri R. 291 ; Peoria & Oquawka Railw. v. Elting, 17 111. R. 429. In Everhart v. West Chester and Philadelphia Railw., 28 Penn. St. 339, the subscribers for stock were held not released by such a change in the charter of the company as enabled them to issue preferred stock, to enable them to raise the means of making and equipping the road in the man- ner originally contemplated. It was considered that such an amendment of the charter was merely ancillary to the main design, and might be accepted by a majority of the stockholders and thus become binding upon all ; that it is im- plied in every subscription for the stock in a railway company, that they may resort to the ordinary and legal means for accomplishing the object proposed by the charter. It is here said, that an alteration of the charter, which superadds an entirely new enterprise, will release subscriptions to the stock. See also Fry's Exr. v. Lex & Big. S. Railw., 2 Met. (Ky.) 314. 13 South Bay Meadow Dam Co. v. Gray, 30 Maine R. 547. Buffalo & New Y. City Railw. v. Dudley, 4 Kernan, 336. 200 ASSESSMENTS OR CALLS. § 56. provided for, or contemplated, either in the charter itself or the general laws of the state. 14 * 9. Where a town or city stipulate with a railway company for adequate consideration to terminate their route, at a point beneficial to such town or city, this will not preclude the com- pany from forming connections with other routes, by land or water, at the same point. 15 10. And where the plaintiff made it a condition of his sub- scription to the capital stock of a railway, that it should pass through some portion of the counties of Monroe and Ontario, and the road was so located as not to touch either of those counties, it was held, that he was released from his subscription. 16 14 But in the Greenville & Columbia Railw. v. Coleman, 5 Rich. 118, where the charter gave the stockholders the right to designate the route they preferred, and if any stockholder was dissatisfied with the route selected, the right to with- draw his subscription, " provided, at the time of subscribing, he designated the route he desires to be selected," and one subscribed, without designating the route he preferred, under an assurance from one, who was soliciting subscrip- tions, that he might pay $ 5 on $ 100, and be free from liability as to the resi- due, it was held, that he was liable, as a stockholder, without the right to with- draw. But some of the American cases do not seem to recognize any alteration in the route of the road, even one which renders it practically a different enter- prise, as a defence to subscriptions for stock. Central Plank Road Co. v. Clemens, 16 Mo. R. 359. But in Champion v. Memphis & Charleston R. Co., 35 Miss. R. 692, it was decided, that when the route on which a railroad is to be located is prescribed by its charter, a subsequent material deviation from the route therein prescribed will release the stockholders who had previously subscribed, and who did not consent to the deviation. It is not every deviation in the location of a railroad from the route prescribed in the charter which will release non-assenting stockholders, and it is impracti- cable to lay down any general rule to serve as a guide in determining the ques- tion of the materiality of the deviation. Each case must be determined by its own particular circumstances ; and hence, where a stockholder resists the col- lection of his subscription for stock, upon the ground of a deviation from the route prescribed by the charter, he ought to set out in his plea such deviation clearly and distinctly, so that its materiality can be determined. A plea by a stockholder in a railroad company, setting up a deviation from the route prescribed by the charter as a defence to a suit, to enforce his subscription for stock, which describes the deviation as follows : " That said road was not con- structed in accordance with the requirements of the charter," is bad for uncer- tainty. 15 Baltimore & Ohio Railw. v. Wheeling, 13 Grattan, 40. 18 Buffalo, Corning, & N. Y. Railw. v. Pottle, 23 Barb. 21. And where a *96 § 56. FUNDAMENTAL ALTERATION OF CHARTER. 201 11. Where the articles of incorporation of a railway company restrict calls upon subscriptions to twenty per cent in one year, party, who was not a stockholder, executed a promissory note to a railway com- pany, promising to pay them $ 200, in consideration that they would locate their depot in block 94, in Indianapolis, to be paid when the company should commence the construction of their depot, and the line of the company's road extended from Terre Haute, through Indianapolis, to Richmond, a distance of 150 miles, at the date of the note, but by subsequent act of the legislature, was divided, at Indian- apolis, and the portion between Indianapolis and Richmond, being about one half, was given to another company, which built their depot in another portion of Indianapolis, the former company only constructing a freight depot, on block 94, it was Held, that by the alteration of the charter of the Terre Haute and Richmond Railway Company, and the acceptance thereof by the company, the company became substantially a different corporation, and were unable to perform the condition upon which the note was to become payable, and that the circum- stance, that the depot located on block 94 was of some advantage to the plain- tiff in error, was of no importance. But an amalgamation of two railway companies, effected subsequent to the date of a subscription to the stock of one of them, but which had been author- ized by an act of the legislature prior to that time, will not release the subscrip- tion. And it is of no importance, that the consolidation took place without the knowledge of the subscriber. Sparrow v. Evansville & Crawfordsville Railway, 7 Porter (Ind.), 369. The subscription of stock to an amalgamated company is a sufficient consent to the amalgamation. And such consent by the stockholders seems to be* re- garded as requisite to the power of the legislature to amalgamate existing rail- way companies. Fisher v. Evansville & Crawfordsville Railway, 7 Porter (Ind.), 407. Where one of the stockholders of a railway company agreed with the company to subscribe and take a given number of shares in the capital stock, if the company would adopt a particular route, there being two under considera- tion, and the company in consequence adopted that route, it was held that the party was bound by his contract to take and pay for the number of shares he had thus agreed to subscribe. Spartanburgh & Union Railw. v. De Graffenreid, 12 Rich. 675. But where in such a case, by a subsequent amendment of the charter, the route in consideration of which the subscription was made was abandoned, and another adopted, the subscriptions were held to be thereby avoided. Hester v. Memphis & Charleston Railw., 32 Miss. R. 378. But one who makes an absolute subscription to a railway, cannot avoid it by proving a parol condition upon which it was made, not complied with, unless he show that fraud also existed in the contract. North Carolina Railw. v. Leach, 4 Jones Law, 340. One of the commissioners, there being five, has no power to give any binding assurance as to the location. lb. If the party have any remedy in such case by mandamus or injunction, where the directors locate the road differently from the requirements of the charter, and omit to resort to it at once, he is bound by such acquiescence. lb. 202 ASSESSMENTS OR CALLS. § 56. and ten per cent at one time, and also provide that said articles may at any time be changed by the unanimous consent of the board of directors, it is competent for the board to so change the mode of making calls, as to require them to be made not exceed- ing five per cent a month, and such change in the articles as to the mode of making calls will be binding upon previous subscrip- tions. 17 12. And in a somewhat recent case 18 it was held, where the legislature had reserved, in the charter of a corporation, the power to modify or repeal the same, that members of the corpo- ration hold their shares subject to such liability as may attach in consequence of the extension or renewal of the charter, although obtained without their consent. 13. And it was also here considered, that the estate of an in- testate shareholder suceeded to the personal responsibility of the deceased in the corporation, and this will render the adminis- trator liable for the debts of the corporation contracted after the decease of the intestate, to the same extent the deceased would have been if still living ; and that the stockholder or his personal representative can only relieve himself from responsibility by a bond fide and absolute sale of the stock. 14. A railway company do not release money-subscriptions by accepting large land-subscriptions at a subsequent date. 19 15. And a railway corporation, chartered in one state to con- struct and operate a road within that state, cannot emigrate into another state, even where that state had given legislative permission to act therein. And after having transferred its business office into another state, where it performed all its cor- porate functions, it is not competent for it to make valid calls in such other state upon subscriptions taken in the place of its creation. 20 17 Burlington & Mo. River R. Co. v. White, 5 Clarke, 409. 18 Bailey v. Hollister, 26 N. Y. R. 112. But it is here suggested, that after the charter of a corporation has expired, there is no power to revive it, by any agency less than the consent of all the corporators. 19 Hornaday v. Ind. & 111. Central Railw., 9 Ind. R. 263. 30 Aspinwall v. Ohio & Mississippi R. Co., 20 Ind. R. 492. §57. SUBSCRIPTIONS BEFORE DATE OF CHARTER. 203 ♦SECTION XI. Subscriptions before date of Charter. 1 . Subscriptions before date of charter good. 2. Subscriptions upon condition not performed. n. 4. Where the condition is performed. 3. Subscription by a stranger to induce com- pany to build station. 4. Subscription on condition, an offer merely. 5. Conditional subscription takes effect upon performance of the condition. G. How far cotnmissiouers may annex con- ditions to subscription. 7. Such conditions void, if fraudulent as to company. § 57. 1. It has been held that one who subscribes before the act of incorporation is obtained, and, by parity of reason, before the organization of the company, although after the act of incor- poration, is holden to the corporation, to pay the amount of his subscription. . And a suit is sustainable, in their name, upon any securities given in the name of the association, or of the commissioners for organizing the company, and equally upon the subscription itself in the name of the corporation. 1 And it is not competent for one, who is a subscriber to such an enter- prise, to withdraw his name while the act of incorporation is going through the legislature. 2 2. But an informal subscription, which is never carried through the steps necessary to constitute the subscribers mem- bers of the company, has been held inoperative, as no compli- 1 Kidwelly Canal Co. v. Raby, 2 Price, Exch. R. 93 ; Selma & Tenn. Railw. Co. v. Tipton, 5 Alabama R. 786 ; Vermont Central Railw. Co. v. Clayes, 21 Vt. R. 30 ; Delaware and Atlantic Railw. v. Iriek, 3 Zab. 321. In the last case the very point ruled, is, whether the company were proper plaintiffs, in an action to enforce calls against one who signed the commissioners' paper for shares before the organization. Held, the commissioners were to be regarded as agents of the company. See also Troy and Boston Railw. v. Tib- bits, 18 Barb. 297; Stanton v. Wilson, 2 Hill, 153; Troy & Boston Railw. v. Warren, 18 Barb. 310 ; Hamilton Plank Road Co. v. Rice, 7 Barb. 157 ; Stewart v. Hamilton College, 2 Denio, 417 ; Danbury & N. Railw. v. Wilson, 22 Conn. R. 435. So also a subscription to the capital stock of a railway, made on the solici- tation of one who was not a commissioner, but who felt an interest in the road, and volunteered to take up subscriptions to its stock, was held valid in a very recent case. Railroad Company v. Rodrigues, 10 Rich. (S. C.) 278. 2 Kidwelly Canal Co. v. Raby, 2 Price, Exch. 93 ; Brownlee v. Ohio, Ind. & 111. Railw. Co., 18 Ind. R. 68. *97 204 ASSESSMENTS OR CALLS. § 57. ance with the act. 3 And a subscription, upon condition that the road is built through certain specified localities, the company at the time not assuming to build the road through those places, will not, it has been held, make the subscriber liable to an action for calls, even if the condition be ultimately performed by the company. 4 But one * might perhaps raise some question, ' Troy & Boston Railw. v. Tibbits, 18 Barb. 298. * Macedon & Bristol Plank E. v. Laphani, 18 Barb. 313. In this case it seems to have been decided that such a subscription is not good, as a subscription for stock, not upon the ground mainly that it was conditional and so against pub- lic policy, or from want of mutuality, but upon the ground of an extension of the road and an increase of the capital stock. But see also Utica & Sch. Bailw. v. Brinckerhoff, 21 Wend. 139, where such a decision is made. But the cur- rent of authority, both English and American, is almost exclusively in a counter direction. It is impossible, upon any fair ground of construction, to consider such a subscription, where the road is located in a given line, in faith, and in fulfilment of the condition, as a mere offer, unaccepted. It is a proffer, a proposal, accepted, and as much binding as any other possible consideration. But if it were to be regarded as a mere offer, standing open, upon every principle of reason and law, when accepted, according to its terms, it is binding as a contract and no longer revocable, and the only case, of much weight, which ever attempted to maintain the opposite view, that of Cooke v. Oxley, 3 T. R. 653, has been regarded as overruled upon that point for many years. See L'Amoreux v. Gould, 3 Sel- den, 349 ; Conn. & Passumpsic Rivers Railw. v. Bailey, 24 Vt. R. 478. In the case of Boston & Maine Railw. v. Bartlett, 3 Cush. 224, the subject is very justly illustrated by Mr. Justice Fletcher : " In the present case, though the writing signed by the defendants was but an offer, and an offer which might be revoked, yet, while it remained in force and unrevoked, it was a continuing offer during the time limited for acceptance ; and, during the whole of that time, it was an offer every instant, but as soon as it was accepted it ceased to be an offer merely, and then ripened into a contract. The counsel for the defendants is most surely in the right, in saying that the writing when made was without consideration, and did not, therefore, form a contract. It was then but an offer to contract ; and the parties making the offer most undoubtedly might have with- drawn it at any time before acceptance. " But when the offer was accepted, the minds of the parties met, and the con- tract was complete. There was then the meeting of the minds of the parties, which constitutes and is the definition of a contract. The acceptance by the plaintiffs constituted a sufficient legal consideration for the engagement on the part of the defendants. There was then nothing wanting in order to perfect a valid contract on the part of the defendants. It was precisely as if the parties had met at the time of the acceptance, and the offer had then been made and accepted, and the bargain completed at once. " A different doctrine, however, prevails in France, and Scotland, and IIol- *98 § 57. SUBSCRIPTIONS BEFORE DATE OF CHARTER. 205 whether, upon general principles, such a subscription ought not to be binding, as a standing * offer accepted and acted upon by the company, which is sufficient consideration for the promise. 5 3. And even where a mere stranger subscribes to a railway company, with others, in order to induce the company to build a station house and improve the roads to it, and to aid the com- pany in such work, and the company perform the condition on their part, the subscription is upon sufficient consideration, and may be enforced against the subscribers. 6 4. And a subscription to the stock of a railway company, con- ditioned to be void unless the company would accept the convey- ance of a specific tract of land at a given price, is a mere offer to invest the land in shares, and until accepted by the company is of no validity. 7 land. It is there held, that whenever an offer is made, granting to a party a certain time within which he is to be entitled to decide whether he will accept it or not, the party making such offer is not at liberty to withdraw it before the lapse of the appointed time. There are certainly very strong reasons in support of this doctrine. Highly respectable authors regard it as inconsistent with the plain principles of equity, that a person who has been induced to rely on such an engagement should have no remedy in case of disappointment. But, whether wisely and equitably or not, the common law unyieldingly insists upon a consid- eration, or a paper with a seal attached. " The authorities, both English and American, in support of this view of the subject, are very numerous and decisive ; but it is not deemed to be needful or expedient to refer particularly to them, as they are collected and commented on in several reports as well as in the text-books. The case of Cooke v. Oxley, 3 T. R. 653, in which a different doctrine was held, has occasioned considerable discussion, and, in one or two instances, has probably influenced the decision. That case has been supposed to be inaccurately reported, and that in fact there was in that case no acceptance. But, however that may be, if the case has not been directly overruled, it has certainly in later cases been entirely disregarded, and cannot now be considered as of any authority. " As, therefore, in the present case, the bill sets out a proposal in writing, and an acceptance and an offer to perform, on the part of the plaintiffs, within the time limited, and while the offer was in full force, all which is admitted by the demurrer, so that a valid contract in writing is shown to exist, the demurrer must be overruled." 5 See this subject more fully discussed in §§ 51, 55, ante. See, also, Johnson v. Wabash & M. V. Railw., 16 Ind. R. 389. 8 Kennedy v. Colton, 28 Barb. 59. 7 Junction Railroad Company v. Reeve, 15 Ind. R. 236. *99 20G ASSESSMENTS OR CALLS. § 57. 5. A subscription upon the performance of a condition be- comes absolute upon such performance. The subscription takes effect from that time ; the first instalment required to be paid at the time of subscription then becomes due and payable, and the subscriber liable to assessment for the remainder. 8 6. There is a recent case, 9 wherein propositions are declared which seem at variance with the general rule, that subscriptions dependent upon conditions are not effectual until such conditions are complied with. It was here held, that commissioners ap- pointed to receive subscriptions to the stock of a projected rail- way company are so far limited in their authority that they have no power to attach conditions to subscriptions received by them, and where they do so the act is not binding upon the company, and that after the organization of the corporation, the directors have no power to assume the subscriptions upon the conditions named, i. e. that the company assume the payment of the sub- scriptions and release the subscribers. 7. But we apprehend that if this decision is maintainable upon recognized rules of law, it must be because the whole scheme of such a subscription evidences a covert fraud upon the contem- plated corporation, and that the act of the directors is but one step in fulfilment of the scheme, as the case shows the action of the first board of directors was immediately repealed upon the coming in of a new board, and the court held it competent to show what took place at the time of passing the first resolutions with a view to establish the fraudulent purpose. 8 Ashtabula & New L. Railw. v. Smith, 15 Ohio N. S. 328. 9 Bedford Railw. Co. v. Bowser, 48 Perm. St. 29. See, also, Lowe v. E. & K. Railw., 1 Head, 659. §58. SUBSCRIPTIONS UPON SPECIAL TERMS. 207 SECTION XII Subscription upon Special Terms. 1 . Subscriptio7is not pat/able, in money. 2. Subscriptions at^ a discount, not binding. n. 2. Contracts to release subscriptions not binding. 3. Subscriptions after organization. 4. President may accept conditional subscrip- tions. 5. Recent case in Alabama. 6. True rule to be deduced from all the cases. 7. Important case on par values. 8. Difficidty of maintaining them. 9. Sad effects of opposite course on com- mercial fair dealing. 10. Can a corporation stipulate to pay in- terest on stocks ? 1 1 . Such a certificate, of stock is not thereby rendered inoperative for legitimate pur- poses. §58. 1. It is well settled, that a railway, or other joint-stock company, cannot receive subscriptions to their stock, payable at less sums, or in other commodities, than that which is demanded of other subscribers. Hence subscriptions, payable in store- pay, or otherwise than in money, will be held a fraud upon the other subscribers, and payment enforced in money. 1 2. So too in a case where subscriptions to stock of such a company are, by the agents of the company, agreed to be re- ceived at a discount, below the par value of the shares, it will be regarded as a fraud upon the other shareholders, and not binding upon the company. 2 \_Henry v. Vermilion & Ashland Railw. Co., 17 Ohio R.»187. But in a re- cent case, Philadelphia & West Chester Railw. v. Hickman, 28 Penn. St. 318, it is said the company may compromise subscriptions for slock, which are doubtful, upon receiving part payment ; or may receive payment in labor or materials, or in damages which the company is liable to pay, or in any other liability of the corporation. The certificates of stock in this case were issued to the contractors, in part payment of work done by them upon the road ; to others, in part pay- ment for a locomotive, for sleepers, for land-damages, and for cars. We do not understand how there can be any valid objection to receiving payment for sub- scriptions to the capital stock of a railway company in this mode, if the shares, so disposed of, are intended to be reckoned at their fair cash value, at the time of the contract being entered into. It is certain, contracts of this kind have been very generally recognized by the courts as valid, and no fraud upon the other subscribers. 3 Mann v. Cooke, 20 Conn. R. 1 78. In this case the defendant subscribed for forty shares in the capital stock of a railway company, upon condition that 208 ASSESSMENTS OR CALLS. § 58. 3. In a recent case in Pennsylvania, 3 it is said that subscrip- tions made to the capital stock of a corporation before its organ- all future calls should be paid, as required, or the shares should become the prop- erty of the company. He thereupon received certificates of ownership of the forty shares, the special terms of his subscription not being known to the other subscribers. Sometime afterwards, the company being largely indebted, and insolvent, and the greater part of the instalments on its stock being unpaid, the president made an arrangement with defendant that he should immediately pay the instalments on twenty shares of his stock, in full, and he was thereupon to be discharged from all liability on the other twenty shares. Defendant complied with these terms, and the money paid went for the benefit of the company. The plaintiff' was appointed receiver of the effects of the company, and brought this bill in equity to obtain payment of the balance due upon the other twenty shares, and it was held : — 1 . That the subscription for the stock was in legal effect the same as an ordi- nary subscription for stock, without condition. 2. Tha,t the arrangement made with the president of the company was void, as a fraud upon stockholders and creditors. 3. That the company, being created for public purposes, could not receive subscriptions under a private arrangement at less than the par value of the stock, as this would deprive the company of so much of its available means, and thus operate as a fraud upon all parties interested. But where one paid for stock in a railway company, under a secret agreement with the commissioner of contracts that he might receive land of the company at a future day, and pay in the stock certificate, and the company declined to ratify the contract, it was held the subscriber was released from his portion of the contract, and might recover the money he paid for the stock of the compa- ny. Weeden v. Lake Erie & Mad River Railway, 14 Ohio, 563. But in the case of the Cincinnati, Indiana, & Chicago Railw. v. Clarkson, 7 Ind. R. 595, it seems to be considered, that the company are bound by a contract to compen- sate a solicitor of subscriptions to the capital stock, payable in land, but no ques- tion is made in regard to the validity of the subscriptions. The solicitors were ordered by the directors to accept such subscriptions, and were to have two per cent on all which were accepted by the company, and the contract was held binding upon the company. An agreement by a railway company, that a sub- scriber for stock may pay the full amount, or any part of his subscription, and receive " interest thereon until the road goes into operation," does not oblige the company to pay interest before the road goes into operation. Waterman v. Troy & Greenfield Railway, 8 Gray, 433. See, also, Buffalo & N. Y. City Railw. v. Dudley, 4 Kernan, 33G. Ante, § 54, pi. 4. An agreement to pay interest upon stock " as soon as paid," means fully paid. Miller v. Pittsburg & Connellsville Railw., 40 Penn. St. 237. 8 Pittsburg & Connellsville Railw. v. Stewart, 41 Penn. St. 54. The question of the presumptive effect of the conduct of a subscriber after the organization of § 58. SUBSCRIPTIONS UPON SPECIAL TERMS. 209 ization, must always be payable in money only. But after the organization, the company may stipulate with the subscriber for payment in any other mode, and can only enforce the contract according to its terms ; and the act of the president of the com- pany in accepting conditional subscriptions is binding upon the company. 4. It is also held in the same case, 3 that the fact the subscriber makes part payment in money before call, will not estop him from setting up the special contract in defence of an after call. 5. But in a somewhat recent case in Alabama, 4 it was held that a subscription to the capital stock of a railway company, in express terms made payable in work, in grading the line, to be taken at the public or private letting and performed to the ac- ceptance of the company's engineer, could not be enforced against the subscriber until he had had reasonable opportunity to perform the contract in the manner specified by its terms. But if, after that, the defendant failed on his part to perform it, he was liable to pay the amount in money. It is here said that the subscriber must take notice of the published lettings of the work. 6. The cases may seem conflicting upon this point ; but the true principle seems to be, that the corporation can only enforce the contract of subscription according to its terms, and of this the subscriber cannot complain, or resist successfully the en- forcement of his subscription. But so far as the creditors of the company are interested in the matter, they may hold the di- rectors responsible for having received the amount of the capital stock in money. And as to the duty of the directors, they can- not, in strictness and fairness, receive subscriptions payable in any- thing but money ; nor can they launch the company until the whole capital stock is subscribed in money. And any fraud or evasion in this particular will render the directors responsible for the debts of the company, as in equity and fair dealing it should. the company, in attending and taking part in the meetings of the company, upon the proper construction of any special contract with the company, is here considerably discussed. 4 Eppes v. M. G. & T. Railw. 35 Alabama R., 33 ; H. & P. Plank R. Co. v. Bryan, 6 Jones Law, 82. VOL. i. 14 210 ASSESSMENTS OR CALLS. § 58. 7. There is a very sensible case 5 in North Carolina bearing upon this question. The legislature had authorized the town of Newborn to take stock in a company for improving the naviga- tion of the river Neuse, by which the business of the town was expected to be advanced. The town was, by the act, authorized to pay for the stock subscribed by them with their bonds, to be issued and sold on certain terms, but the amount of bonds issued was restricted to the amount of the stock subscribed, and it was held, that as the corporation could not, except by legislative sanc- tion, accept anything but money in payment of stock, and could not issue stock at any rate below par, that the bonds could not be sold below par ; and that, to a mandamus to compel the town to pay for stock thus subscribed, it must be regarded as a suffi- cient return, that the authorities of the municipality had pre- pared and executed the bonds, and had offered the same for sale by public advertisement, and had diligently endeavored otherwise to effect a sale of the same on the terms prescribed by the statute, and had not been able to sell the same. 8. This case unquestionably puts these perplexing inquiries upon the true basis, that is, of fair dealing, or no dealing at all. But we apprehend that railway contractors and builders would regard it as placing the matter in a very impracticable light. And we are not prepared to say how far the courts will feel justified in departing from the strict letter of the law in these particulars, out of deference to the speculative tendencies of the age. 9. It is certain that corporate stocks, from the first, are now always more or less a matter of speculation in the market ; and the same is true of all municipal bonds issued in aid of enter- prises affecting the interests of such corporations. And, in fact, no one ever dreams of demanding strictly par values, in dealing either with the bonds or the stock, and we do not suppose it can now ever be brought back to the strictly par basis. There is, too, 5 Neuse River Nav. Co. v. Commissioners of Newbern, 7 Jones Law, 275. But in Shoemaker v. Goshen Turnpike Co. 14 Ohio N. S. 569, from the mere per- mission in the statute to submit the question of subscription to the voters of a township, the court implied the power to issue bonds in payment of such sub- scription in the usual negotiable form, and to negotiate them to the company at par, in payment for the stock subscribed. § 58. SUBSCRIPTIONS UPON SPECIAL TERMS. 211 another great embarrassment in the way of return to par values. We have, in fact, no par basis to which to return. Until a specie basis is reached, everything is at the mercy of speculators and monopolists. This is, no doubt, a very melancholy state of affairs to have a great commercial country in. But, so long as commercial men endure it, and the government submits to it, we do not see how the courts can remedy it. But it is certainly refreshing to see courts struggling to resist in every way in their power such a fearful tide of evil. In our humble judgment, unless some mode of escape is found, speculation and monopoly will eat out all honesty and fair dealing in all commercial trans- actions, and the country will in its commerce become a band of legalized plunderers upon each other. The monopoly in flour and grain and some of the other staples of the country is scarcely less than that at the present time. 10. There seems to be some question whether a corporation can stipulate to pay interest upon its stock certificates from the first, without regard to the earnings of the company. It is cer- tain such a stipulation is at variance with the ordinary duties of corporations, and will not therefore come within the range of the implied authority of the directors of the company. But in one case, 6 it seems to have been considered, that the stockholders might so ratify such a stipulation as to render it binding upon the company. But we should very seriously question if any such power is implied from the general grant of corporate power for ordinary business purposes, like that of railways. It would seem to require a special delegation of authority by the legisla- ture, and in that form it is nothing else but a device for borrow- ing money, in advance of launching the corporation upon its legitimate functions. 11. The case last cited 6 decided that such a stipulation, super- added to a certificate of stock, will not defeat its original effect of making the holder a member of the corporation ; and that if certificates of stock be so issued by the directors, it will be re- garded as a sufficient ratification of them by the corporation that 8 McLaughlin v. Detroit & Milw. Railw. Co. 8 Mich. R. 100. It seems scarcely allowable to treat the vote of the majority as a ratification of an act of the directors beneficial to the minority, and at the same time not binding upon the minority except by their own consent. 212 ASSESSMENTS OR CALLS. §59. at a stockholders' meeting a majority voted to pay such interest in the bonds of the company ; but the holders are not thereby compellable to accept payment in that mode, unless they assented to the vote. *SECTION XIII. Equitable Relief from Subscriptions obtained by Fraud. 1. Substantial misrepresentations in obtaining subscriptions toil! avoid them. 2. But for circumstantial misconduct of the directors, in the matter, they alone are liable. 3. Directors cannot make profit for themselves. § 59. 1. The directors of a railway company, who make repre- sentations on behalf of the company to induce persons to sub- scribe for the stock, so far represent the company in the transac- tion, that if they induce such subscription by a substantial fraud, the contract will be set aside in a court of equity. 1 The proper inquiry in such case is, " Whether the prospectus, so issued, contains such * representations, or such suppression of existing facts, as, if the real truth had been stated, it is reasonable to be- lieve the plaintiff would not have entered into the contract, that is, that he would not have taken the shares allotted to him, and those which he purchased." 2 1 Sir John Romilhj, M. R., in Pulsford v. Richards, 19 Eng. L. & Eq. 387, 392. The prospectus issued in such cases is to be regarded as a representation. And where one is induced to take shares in a joint-stock company, through the false and fraudulent representations of the directors, he is not liable to calls for the purpose of paying the expenses of the company. The Royal British Bank, Brockwall's case, 29 Law Times, 375. And where one of the directors of a company put the name of an extensive stockholder in the company, who resided in a foreign country, to a new sub- scription for forty additional shares, without consultation with such person, upon the belief that he would ratify the act, and, upon being informed of such act, he made no objection for the period of nearly seven years, during which time the company had applied the dividends upon his stock in payment of such subscrip- tion, having no intimation of any dissent upon his part, it was held the subscrip- tion thereby became binding, and that the party could not recover such divi- dends of the company. Philadelphia, Wilmington, & Baltimore Railw. v. Cowell, 28 Penn. St. 329. - Pulsford v. Richards, 19 Eng. L. & Eq. 392; Jennings v. Broughton, 19 Eng. L. & Eq. 420. One, to entitle himself to be relieved from his subscrip- * 100, 101 § 59. SUBSCRIPTIONS OBTAINED BY FRAUD. 213 2. But the omission to state in a prospectus the number of shares taken by the directors, or other persons, in their interest, is no such fraud as will enable a subscriber to avoid his subscrip- tion. 2 The fact that the directors of the company had entered into a contract with one, as general superintendent of construc- tion, for four per centum upon the expenditure ; and that this was an exorbitant compensation, and was, in fact, intended to compensate such person for his services, in obtaining the charter, and that this is not stated in the prospectus, is no such suppres- sion as will exonerate subscribers for stock. "There was not the suppression of a fact, that affected the intrinsic value of the un- dertaking. That value depended upon the line of the projected railway, the population, the commercial wealth, the traffic of the places through which it passed, the difficulties of the construc- tion, and the cost of the land required. Extravagance in the formation of a line of* railway is a question of liability of the individual directors to the shareholders, but not a ground for an- nulling the contract between them." 2 3. But the learned judge here suggests, with great propriety, that if the directors have made contracts, in the course of the performance of their duties, from which advantage is expected to arise to themselves, or to others, for their benefit, mediately or immediately, they may, in a court of equity, be made to stand in the place of trustees to the shareholders. 3 tion, must show that he acted upon the false representations of the directors in a matter of fact material to the value of the enterprise, and not upon the mere speculation of the directors, or upon his own exaggerated expectations of the prospective success and value of the undertaking. See, also, upon this general subject, the remarks of the Master of the Rolls, p. 427. * Post,§ 179. 214 ASSESSMENTS OR CALLS. §60. ♦SECTION XIV. Forfeiture of Shares. — Relief in Equity. 1 . Requirements of charter and statutes must be strictly pursued. 2. If not, equity will set aside the forfeiture. 3. Must credit the stock at full market value. 4. Provisions of English statutes. 5. Evidence must be express, that all requisite steps were pursued. §60. 1. The company, in enforcing the payment of calls by forfeiture of the stock, must strictly pursue the mode pointed out in their charter and the general laws of the state. This is a rule of universal application to the subject of forfeitures, and one which the courts will rigidly enforce, and more especially where the forfeiture is one of the prescribed remedies, given to the party, and against which equity does not relieve, when fairly exercised. 1 2. But as the company, in such case, ordinarily stand in both relations of vendor and vendee, their conduct, in regard to fair- ness, will be rigidly scrutinized, and the forfeiture set aside in courts of equity, upon evidence of slight departure from perfect fairness. 3. Hence where the company declared the stock cancelled, and credited the value at a less sum than the actual market price at the time, but more than it would probably have sold for if that number of shares had been thrown at once into the market, the court set aside the forfeiture, on the ground that the company were bound to allow the highest market price which could be obtained, without speculating on what might be the effect of throwing a large number of shares into the market. 2 1 Sparks v. Liverpool Water-Works, 13 Vesey, 428 ; Prendergast v. Turton, 1 Younge & Coll. N. R. 98, 110-112. This case is put mainly upon the ground of delay and acquiescence, but there is little doubt it would have been maintained, upon the general ground stated in the text. See Edinburgh, Leith, & N. H. Railw. v. Hibblewhite, 6 M. & W. 707 ; s. c. 2 Railw. C. 237. But where the deed of settlement of a joint-stock company provides for a for- feiture of the shares without notice to the subscriber, the forfeiture determines the title without notice. Stewart v. Anglo-California Gold Mining Co., 14 Eng. L. & Eq. 51. * Stubbs v. Lister, 1 Y. & Coll. N. C. 81. *102 §60a. RIGHT TO INSPECT BOOKS OF COMPANY. 215 4. By the English statute the company are not allowed to forfeit a larger number of shares than will produce the defi- ciency required. 3 And upon payment to the company of the amount of arrears of * calls, interest, and expenses, before such forfeited shares are sold by them, the shares revert to the former owner. 3 5. The evidence of the company having pursued the require- ments of their act, in declaring the forfeiture, must be express and not conjectural. 4 SECTION XV. Right of Corporators and Others to inspect Books of Company. 1. May inspect and take minutes from books. 2. Discussion of the extent to which such books are evidence. 3. For what purposes such books are impor- tant as evidence. 4. This will not embrace the books of pro- ceedings of directors. 5. Party claiming to be shareholder may in- spect register. 6. Allowed when suit or proceedings pending. 7. Party may have aid in the inspection. § 60 a. 1. It seems to be conceded as a well-settled rule of law, that the shareholders or corporators in a joint-stock corpora- tion are entitled, as matter of right, to inspect and take minutes from the books of the company, at all reasonable times, 1 as they are the best evidence of the facts there registered, and equally the property of all the proprietors. 2 And the board of directors of the company have no power to exclude any member from the exercise of this right, even upon the ground that he is unfriendly to the interests of the company. 3 2. But it seems to be now settled that strangers cannot ob- tain the inspection of such books, even by application to the court, their contents being regarded as private memoranda, in no sense possessing any public character, 4 notwithstanding a 3 8 & 9 Vict. ch. 16, §§ 34, 35. 4 Cockerell v. Van Dieman's Land Co., 36 Eng. L. & Eq. 405. 1 Angell & Ames on Corp., § 681. * Owings v. Speed, 5 Wheaton, 420, 424. 3 People v. Throop, 12 Wend. 183 ; Cotheal v. Brouer, 1 Seld. 562. 4 Mayor of Southampton v. Graves, 8 T. R. 590. *103 216 ASSESSMENTS OR CALLS. § 60 «. contrary practice obtained 5 for a time. It may sometimes have been assumed, that the books of private corporations possessed a higher quality of evidence than is the fact. We do not appre- hend that they are in any sense indispensable primary evidence of the facts there recorded ; as a general thing, as to the organi- zation of the company and the choice of officers, all that is requisite will be to prove, de facto, the organization of the company and the exercise of such offices by the persons named. Where it is requisite that an authority be given by the majority vote of the company, it may most conveniently be shown by the record, and perhaps in such a case the records of the corporation may fairly be considered the best proof of the facts, if in the power of the party, as if the corporation itself were called to prove such vote. But any party not entitled to the custody of the papers can only prove their contents, unless the corporation is the opposing party, in which case he may give notice to pro- duce the books, and, in default, may prove the contents by sec- ondary evidence. It has been decided that the clerk of the com- pany cannot be compelled to produce the books on a subpoena duces tecum. 6 3. It has been held that a bank depositor has the right, under proper circumstances and in a reasonable manner, to inspect the books of the bank. 7 'In practice it is not one time in ten where the record books of a corporation are even referred to in court, unless to fix a date or the precise form of a vote upon which a power is made to depend. But the registry of shareholders may be properly regarded as the primary evidence of membership, but by no means indispensable or conclusive. 8 4. Where the deed of settlement under which a corporation is registered contained a provision " that the books wherein the proceedings of the company are recorded shall be kept at the principal office of the company, and shall be open to the inspec- tion of the shareholders," it was held that the clause gave share- 6 Mayor of Lynn v. Denton, 1 T. R. 689, and cases cited. 8 Utica Bank v. Hillard, 5 Cow. 419 ; Narragansett Bank v. Atlantic Silk Co., 3 Met. 282. 7 Union Bank v. Knapp, 3 Pick. 96. 8 We refer to -what we have before said upon the subject. Ante, § 18, pi. 10- 13 ; § 23, n. 7. § 60 a. RIGHT TO INSPECT BOOKS OF COMPANY. 217 holders power only to inspect the books of minutes of proceed- ings of the general meetings, and not of the minutes of the proceedings of the directors. 9 5. In a somewhat recent English case 10 it was held, that a party whose claim to be a shareholder is disputed by the com- pany may, in an action brought against the company, inspect any entries in the register which relate to the matter in dispute. 6. And in a still more recent case, where one of the members of the corporation was in controversy with the company in re- gard to his right to act as one of the governing body, which right depended upon an inspection of the records of the company in order to determine its usages, the court granted permission to inspect the books. 11 But it is here said this will not be done unless there is a suit or some proceedings pending. 7. And in the inspection of all documents, by order of the Court of Chancery, the party in whose favor the order is made has the right to have such aid in the inspection, either by coun- sel, interpreters, or experts, as will make the inspection avail- able to him. 12 9 Reg. v. Mariquita Mining Co., 1 El. & El. 289. 10 Foster v. The Bank of England, 8 Q. B. 689. 11 Reg. v. Saddlers' Co., 10 W. R. 87. At Chambers Crompion, J. 12 Swansea Vale Railw. Co. v. Budd, 12 Jur. N. S. 561. As to the effect of the certificate of the clerk of a corporation under its seal, see New Orleans & O. R. Co. v. Lea, 12 Louis. Ann. 388. 218 RIGHT OF WAY BY GRANT. §61. CHAPTER X RIGHT OF WAY BY GRANT. SECTION I. Obtaining Lands by express Consent. 1. Leave granted by English statute. 2. Persons tinder disability. 3. n. 2. Money to take the place of the land. 4. Consent to pass railway. 5. Duty of railway in all cases. 6. License to build railway. Extent of du- ration. 7. Company bound by conditions in deed. 8. Parol license good, till revoked. 9. Sale of road no abandonment. 10. Deed conveys incidents ; not explainable. 11. One cannot derogate from compulsory grant. 12. But this does not apply to accidental in- cidents. 13. Case in New York Court of Appeals somewhat at variance with the pre- ceding cases. 14. A municipal corporation may be bound by implied contract in the grant of land so as not to be at liberty to recede from it. § 61. 1. The English statute 1 enables railway companies to purchase, by contract with the owners, " all estates or interests (in any lands) of what kind soever," if the same, or the right of way over them, be requisite for their purposes. 2. And by another section of the same statute such companies are empowered to purchase such lands of persons legally inca- pacitated to convey the title, under other circumstances, as guar- dians of infants, committees of lunatics, trustees of charitable or other uses, tenants in tail, or for life, married women, seized in their own right, or entitled to dower, executors or administra- tors, and all parties, entitled, for the time being, to the receipt of the rents and profits. 2 1 8 & 9 Vict. ch. 18, § 6. s Hutton v. The London & South W. Railw., 7 Hare, 264. Some sugges- tions are here made by Vice-Chancellor Wigram in regard to the time within ■which it is requisite to make compensation in the several modes of taking lands. The principal question decided is, that in regard to lands, injuriously affected by railway works upon other lands, it is not requisite to make compensation in ad- vance. But where lands are purchased from persons under disability, the course of devolution of the property is not thereby changed, but the money paid in *104 § 61. OBTAINING LANDS BY EXPRESS CONSENT. 219 * 3. The valuation in this latter class of cases is to be made by disinterested persons, and the price paid into the bank for the benefit of the parties interested. 4. And where a railway act provided, in terms, that nothing therein should authorize the company to do any damage or prejudice to the lands, estate, or property of any corporation or person whatsoever, without the consent in writing of the owner and occupier, it was held they could not pass the line of another railway without their consent, although the withholding of such consent should frustrate the purpose of the grant. 3 5. In this country most of the railway charters contain a power to the company to acquire lands, by agreement with the owner. In such case it has been held the rights of the company are the same as where they take their land under their compul- sory powers. 4 And they are bound to the same care in con- structing their road. 4 6. And where the railway have the power to take five rods, through the whole course of their line, and a land-owner deeds them the full right to locate, construct, and repair, and forever maintain and use their road over his land, if, in laying the drains or ditches through the land, it becomes necessary to go beyond the limits of the five rods, in order to guard against the effect of a stream to be passed, the company may lawfully do so under the grant. 5 compensation is to take the place of the land and to be treated as real estate. Midland Counties Railw. v. Oswin, 3 Railw. C. 497; Ex parte Flamank, 1 Simons (n. s.) 260; In re Horner's Estate, 13 Eng. L. & Eq. 531 ; In re Stew- art's Estate, 13 Eng. L. & Eq. 533. 3 Clarence Railw. v. Great North of England Railw., 4 Queen's Bench, 45 ; Gray v. The Liverpool & Bury Railw., 4 Railw. C. 235. 4 Whitcomb v. Vermont Central Railw., 25 Vt. R. 49, 69. This right to acquire lands, by contract with the owners, is, by implication, if not expressly, limited to the necessities of the company, we presume, the same as taking lands in invitum, and cannot be extended to any private use. But if the owner of the land consent to the use, the constitutional objection is removed, and the right to hold the land is a question between the company and the public, probably. Dunn v. City of Charleston, Harper, 189 ; Harding v. Goodlet, 3 Yerg. 41 ; 11 Wend. 149 ; Embury v. Conner, 3 Comstock, 516. 5 Babcock v. The Western Railw., 9 Met. 553. But a contract with the owner of land, for leave to build the road through his land, and staking out the track through the land, is no such occupation as will be notice of the right of *105 220 RIGHT OF WAY BY GRANT. § 61. * 7. In case of a deed to a railway company of land, on which to construct their road, the assent of the company will be pre- sumed, and they are bound by the conditions of the grant, as that the road shall be so constructed as not to interfere with buildings on the land. 6 8. An oral permission to take and use land for a railway is a . bar to the recovery of damages for such use, until the permission is revoked. 7 In a very late case before the House of Lords, 8 a very important, and as it seems to us reasonable and just quali- fication is annexed to the familiar doctrine of implied assent to the appropriation of land to a permanent use by the owner standing by and not objecting. It is here ruled, " If a stranger builds upon the land of A., supposing it to be his own, and»A. remains wilfully passive, equity will not allow him to profit by the mistake ; but if the stranger knows that the land upon which the company against a subsequent mortgagee. Merritt v. Northern Railw., 12 Barb. 605. But the payment by the company of the price of the land, and changing their route in faith of the title, might give them an equity superior to that of a subsequent mortgagee. lb. The deed of one tenant in common is a good release of his claim for damages, although it convey no right as against his co-tenant. Draper v. Williams, 2 Mich. R. 536. But an agreement to sell land to a railway company, and a tender of the price by the company, creates no title in them. Whitman v. Boston & Maine Raihv., 3 Allen, 133. 6 Rathbone v. Tioga Navigation Co., 2 Watts & Serg. 74. And the rights and duties of the company, in such case, are precisely the same as if the land had been condemned, by proceedings in invitum, under the statute. Norris v. Vt. Central Railw., 28 Vt. R. 99. Such grant carries the incidents neces- sary to its enjoyment. And if it becomes necessary, in constructing the road, to make a deep cut, that may be done, and the company are not bound to pro- tect the banks of the excavation by a wall. Hortsman v. Lexington & Cov. Railw., 18 B. Mon. 218. See also Louisville & Nash. R. v. Thompson, 18 B. Mon. 735. 7 Miller v. Auburn & Syracuse Railroad, 6 Hill, 61. And such license, when executed, by the construction of the work, is not allowed to be revoked. The only relief the party is entitled to is compensation for his land. Water Power v. Chambers, 1 Slock. Ch. 471. And it was held in a somewhat recent English case, Corby v. Hill, 31 Law Times, 181, that where the owner of land had given oral permission to one for a private way, he could not obstruct, or give permis- sion to others to obstruct, such way ; and that where a third person, by permis- sion of the landowner, placed building materials in the way, whereby an in- jury accrued to the person having the way, he might sue for such injury. 8 Ramsden v. Dyson, 12 Jur. N. S. 506. *106 § 61. OBTAINING LANDS BY EXPRESS CONSENT. 221 he is building belongs to A., then A. may assert his legal rights and take the benefit of the expenditure. And a tenant building upon his landlord's land, in the absence of such special circum- stances, acquires no right against him at the expiration of the tenancy. But a mere license to build works connected with a railway, the damages to be settled with a person named, or " on equitable terms hereafter," does not amount to any definite agreement. 9 9. Where land is conveyed, for the use of a railway, upon condition that it shall revert to the owner upon the abandon- ment of the road, and the road was sold, under a mortgage, to the state, and by the state and by new companies chartered for that purpose completed, it was held, that the grantor was not entitled to hold the land. 10 10. Where land was conveyed to a railway company, for the purpose of constructing their road, on which was a tenement, and to this water was conveyed by an aqueduct from another portion * of the land of the defendant, and the price of the land was fixed by the commissioners, the defendant at the time claiming the right to withdraw the water, and this not being objected to by the president and engineer of the company, who were present at the time it was held, that the deed containing 9 Fitchburg Railw. v. Boston & Maine Railw„ 3 Cusb. 58. 10 Harrison v. Lexington & Obio Railw., 9 B. Mon. 470. So, too, if land is conveyed on condition tbat an embankment (water-tight) over a brook crossing tbe land sball be erected by tbe grantors, and that tbe embankment, or dam, with tbe floodgates or sluices therein might be used for hydraulic purposes by the grantors, their heirs, and assigns, the grantees not to be liable to the grantors for any damage they might sustain by a break in such dam, unless the same should happen through the gross neglect or wilful misfeasance of the grantees, but that the grantees should repair the dam forthwith, it was held to be a con- dition subsequent, the failure to perform which would give the grantors, or their heirs, a right of re-entry at their election. But it was further said, that the con- veyance of the estate by the grantees defeated the condition, and that the assignee had no remedy upon it. Underbill v. Saratoga & Wash. Railw. 20 Barb. 455. And such conditions may be waived by the party in whose favor they are made, as in a grant of land for a railway track, the road to be com- pleted by a day named, or the deed to be void, which was not done ; but the grantor continued to treat the company as having the right to use the land for the purposes of the grant, and it was held a waiver of the condition. Ludlow v. New York & Harlem Railw., 12 Barb. 440. *107 222 RIGHT OF WAY BY GRANT. § 61. no exception in regard to the water, the company acquired the right to its use, in the manner it had been before used, and the defendant was liable to an action for diverting it, 11 and the in- tention of the parties could not be determined by extraneous evidence. 11. So, also, the principle that a grantor, knowing the pur- pose for which his deed is accepted, cannot derogate from his own grant, applies to the case of a compulsory conveyance, un- der legislative authority, and the act is sufficient notice to the grantor of the purposes of the conveyance. But this rule will not apply to any accidental state of facts, existing at the time of the grant, as the support resulting from an excavation being filled with water at the time, so as to entitle the grantee to insist upon its continuance. 12. And accordingly, where a railway took the land above a mine for the support of the abutments of a bridge, the mine leav- ing been abandoned for forty years and full of water, it was held they could not insist upon having the water remain in the pit, as a support to the earth, but that they were entitled to be pro- tected from damage likely to result from working the mine. 12 13. If a railway have power to take land by consent of the owner, an oral consent is sufficient. 13 And if the company take land and put it to their use without the consent of the owner, or any other proceeding under their powers, it is a trespass, but can only be sued by the person then owning the land, and not by his grantee. 13 But this case was reversed upon error, and it was decided, somewhat at variance with the present English rule, that such a license, coupled with an interest, was still revocable at the option of the licensor. But the final conclusion of the court of error, that " consent," in such an act, meant the effec- tual consent of the law expressed with due formality, seems al- together the more reasonable ground upon which to place the case. 14. The New York Court of Appeals 14 held that municipal 11 Vermont Central Railw. v. Hills, 23 Vt. R. 681. 12 North Eastern Railw. Co. v. Elliott, 6 Jur. N. S. 817. 13 Central Railw. Co. v. Hitfield, 5 Dutcher, 206 ; s. c. in error, Id. 571. 14 Mayor &c, of the City of New York v. The Second Avenue Railw., 32 N. Y. Repts. 261 ; s. c. 34 Barb. 41, where the case was similarly ruled. § 61. OBTAINING LANDS BY EXPRESS CONSENT. 223 corporations, as to their rights and powers over lands owned by the corporation, were to be viewed the same as any other owner of land, and that their acts and resolutions in regard to the use of such lands by others were not to be regarded as either of a legislative or governmental character ; and that although such corporations have no power as a party to make contracts which shall control or embarrass their legislative powers and duties, yet, as these legislative duties, or powers, only extend to regula- tions of police and internal government, and not to the mere imposition of a sum of money for revenue purposes, consequently an ordinance imposing a license duty upon city cars, for revenue purposes only, is not an ordinance for police and internal gov- ernment, and the imposition of an annual tax upon a city pas- senger railway, in derogation of its rights, as defined by a spe- cific agreement between the city and the railway company, for purpose of revenue merely, is unlawful and void. 15 15 The terms of this contract appear more fully where the case is reported in Barbour. It prescribed the regulations to which the company should be liable, requiring no further license, and reserving no power to require one thereafter. This was held to preclude the city authority from making the imposition de- manded. It would seem, the case might have been decided, in conformity with the dissenting opinion of Mr. Justice Ingraham, in the court below, without any great violence to principle. See also Branson v. Philadelphia, 47 Penn. St. 329; Veazie v. Mayo, 45 Me. R. 560 ; People v. New York & Harlem R. Co., 45 Barb. 73 ; Vilas v. Mil. & Miss. R. Co., 15 Wise. R. 233. A grant of land to the use of a highway seems to be regarded as giving the municipal authorities the same rights in regard to its use as where the land is condemned for that pur- pose. Murphy v. The City of Chicago, 29 111. R. 279. The grant to a railway company of a right to build a tunnel will not preclude the owner of the land from digging minerals under the tunnel, in conformity with the general railway acts, London & N. W. Railw. Co. v. Ackroyd, 8 Jur. N. S. 911. 224 RIGHT OF WAY BY GRANT. §62. SECTION II. Specific Performance in Equity. 1 . Contracts before and after date of charter. 2. Contracts where all the terms not defined. 3. Contracts for land, umpire to fix price. 4. Where mandamus also lies. 5. Contracts not signed by company. 6. Where terms are uncertain. 7. Contracts (jiving the company an option. 8. Contracts not understood by both parties. 9. Order in regard to construction of high- ways may be enforced at the suit of the municipality. 10. Tlie courts sometimes decline to decree spe- cific performance on the ground of pub- lic convenience. 11. No decree of specific performance when contract vague and uncertain. § 62. 1. There can be no doubt courts of equity will decree specific performance of contracts for land, made by consent of the owners, as well after the act of parliament as before. 1 2. If the agreement contains provisions for farm-crossings, fences, and cattle-guards, either express or implied, the master will be directed to make the proper inquiry, and any decree for specific performance should provide minutely for all such inci- dents. 2 But, upon general principles, if the agreement provide that the price of land is to be fixed by an arbitrator or umpire, it has generally been held that a suit for specific performance is not maintainable. 3 3. But if the arbitrator have acted and fixed the price, 4 and by parity of reason, if the umpire is named, and ready to act, there * being no power of revocation, a court of equity may decree spe- cific performance. Hence in the case above, 1 the Vice-Chancel- lor held, that, as the contract was to take the land on the terms prescribed in the act of parliament, the court had the means of applying those terms, so as to get at the price, and might there- 1 Ante, § 13, et. seq ; Walker v. The Eastern Counties Railw. Co., 5 Kailw. C. 469; s. c. 6 Hare, 594. 2 Sanderson v. Cockermouth & "Washington Railw. Co., 19 Law Jour. Ch. 503 ; 11 Beavan, 497. 3 Milnes v. Gerry, 14 Vesey, 400. But in this case the umpire was not agreed upon, and the court held they could not appoint one. But the Master of the Rolls held that an agreement to sell, at a fair valuation, may be executed. See Tillet v. Charing Cross Company, 5 Jur. X. S. 994. 4 Brown v. Bellows, 4 Pick. 179. *108 § 62. SPECIFIC PERFORMANCE IN EQUITY. 225 fore require the party to put them in motion, and then, in its discretion, decree specific performance. 4. And the consideration, that possibly the party might pro- ceed by mandamus, will not deprive him of this remedy in equity, unless the act specially provides the remedy by man- damus. 5 5. But if the company take a bond of a land-owner, to convey so much land as they shall require, and subsequently appropriate the land, but decline accepting a deed and paying the price, equity will not decree specific performance of the contract, the bond not being signed by the company. 6 But in such a case specific performance will be decreed against the party signing the bond upon refusal. 7 6. A contract to sell a railway company " the land they take " from a specified lot of land, at twenty cents a foot, " for each and every foot so taken by said company," imports a taking by the company, under their compulsory powers, and will not be specifically enforced until so taken by the company. And if the terms of a contract are doubtful, a court of equity will not decree specific performance. 8 7. Where one contracts with a railway company, under seal, to permit them to construct their road over his land, in either one of two routes, and to convey the land after the road shall be definitively located, with a condition that the deed shall be void, when the road shall cease, or be discontinued, if the com- pany take the land and build their road upon it, specific perform- ance will be decreed, although the company did not expressly bind themselves to * take the land, or pay for it. And where the company had been in the use of the land for their road three or s Hodges on Railways, 189. « Jacobs v. Peterborough & Shirley Railw., 8 Cush. 223. 7 Parker v. Perkins, 8 Cush. 318. 8 Boston & Maine Railw. v. Babcock, 3 Cush. 228 ; s. c. 1 Am. Railw. C. 561. But under a contract with a railway company, giving them all the land they desired, not exceeding four poles in width, upon which to construct their road, " provided said road shall not run farther north of my southwest corner than ten feet, and not farther south of my northeast corner than 140 feet," it was held the company had a right to 66 feet through the whole land, and were only re- stricted in relation to the distance the road went from the corners name Lexington & Ohio Railw. v. Ormsby, 7 Dana, 276. VOL. i. 15 * 109 226 RIGHT OF WAY BY GRANTS. § 62. four years, it was held no such unreasonable delay as to bar the relief sought. The party cannot excuse himself by showing, that, from his own notions, or the representations of the company, or of third persons, he was induced to believe that a different route would have been adopted by the company, or that there was an inadequacy in the price stipulated, unless it be so gross as to amount to presumptive evidence of fraud or mistake. 9 8. But it is a good defence, in such case, that the party was led into a mistake, without any gross laches on his part, by an uncertainty or obscurity in the descriptive part of the agree- ment, so that it applied to a different subject-matter from that which he understood at the time, or that the bargain was hard, unequal, or oppressive, and would operate in a manner different from that which was in the contemplation of the parties when it was executed. But in such case the burden of proof is upon the defendant, to show mistake or misrepresentation. 3 In a recent English case 10 before the Court of Chancery Ap- peal, after elaborate argument, the Lord Justice Knight Bruce, an equity judge of the most extended learning and experience,, thus states the rule upon this point. This court will not enforce specific performance of a contract, where the defendant proves that he understood it in a sense different from the plaintiff, even although the plaintiff's construction may be the plain meaning of the contract. 9. Where the county commissioners made order in regard to the mode of construction of a railway, in crossing a highway, it was held, that the mayor and aldermen of a city, or the select- men of a town, are the only proper parties to a bill for specific performance, and that the land-owners, over which the railway J Western Railw. v. Babcock, 6 Met. 346 ; s. c. 1 Am. Railw. C. 365. The de- livery of a deed to the agent of a corporation, in such case, is sufficient. And where the party, in disregard of his contract, had obtained an assessment of damages for the land, under the statute, his liability upon the contract is, to the difference between the apprisal and the stipulated price in the contract. Unreasonable delay is ordinarily a bar to specific performance in a court of equity. Guest v. Homfray, 5 Vesey, 818 ; Hertford v. Boore, Aston v. Same, 5 Vesey, 719 ; AVatson v. Reid, 1 Russ. & My. 236 ; 2 Story's Eq. Jur. §§ 771, 777, and cases cited. 10 Wycombe Railw. Co. v. Donnington Hospital, 12 Jur. N. S. 347. § 62. SPECIFIC PERFORMANCE IN EQUITY. 227 passes, are not to be joined in the bill. 11 But where the order required the highway * to be so raised as to pass over the rail- way, at a place named, but without denning the height to which 11 Brainard v. Conn. River Railw., 7 Cusb. 50G. In Roxbury v. Boston & Prov. Railw., 6 Cusb. 424, it was also beld the commissioners must make sucb order specific, and not in the alternative, and that laches, in regard to such or- der, will not defeat the claim for a decree for specific performance, where pub- lic security is essentially concerned. And courts of equity have held a parol license to erect public works, and the works erected in faith of it, irrevocable, and the company entitled to hold the land upon making compensation, and have virtually decreed specific perform- ance. Water Power Co. v. Chamber, 1 Stockton, Ch. 471. See also Hall v. Chaffee, 13 Vt. R. 150; Boston & Maine Railw. v. Bartlett, 3 Cush. 224. But it was held that an action for the price of land, will not lie upon a parol contract of sale, where there had been no conveyance of the land, although the company had taken possession and paid part of the price. Reynolds v. Dunkirk & State Line Railw., 17 Barb. 612. This is undoubtedly according to the generally recognized rule upon the subject, in those states where the Statute of Frauds is in force. In the recent case of Laird v. Birkenhead Railw., 6 Jur. N. S. 140 ; s. c. 1 Johns. Eng. Ch. 500, the question of an estoppel in fact becoming so fixed upon a railway company by acquiescence as to be enforced by a court of equity, is largely discussed by Vice Chancellor Wood, and placed upon higher and sounder grounds, as it seems to us, than in most of the earlier cases. The leading facts were, that the plaintiff, by agreement with the company, without writing, had built a tunnel through their land, in order to facilitate access to his own busi- ness, and had laid rails upon the work, and had been in the use of the same for two years, paying tolls as agreed between the parties. The company now claimed that the plaintiff was merely a tenant at will, and subject to their ab- solute dictation as to the right to use and the terms upon which he could use the works, and gave notice in writing of the immediate and absolute termination of the contract, and in pursuance of such notice removed the rails and perma- nently erected a board across the passage. The learned judge overruled the demurrer, and said " it must be inferred, from the nature of the transaction, and after all this expense, that it was not to be determined by three months' notice The necessary inference is, that it is to be the right of user, as long as the plaintiff is the owner of the yard, and it would be a most unreasonable proposition to say that the company should have the power of determining it at three months' notice I consider that a contract has been made out upon the face of the bill," and it was further con- sidered, that, aside from the actual use, a court of equity would have decreed specific performance upon reasonable terms ; but after the use for a consider- able term on the basis of an unsigned memorandum, the court will regard that as evidence of the ultimate agreement of the parties. S. P. Mold v. Wheatcroft, 27 Beav. 510. * 110 228 EIGHT OF WAY BY GRANT. § 62. it should be raised, the grade, the nature of the structure, or the time within which it should be made, it was held too indefinite to justify a decree for specific performance. 12 10. The Master of the Rolls, Lord Romilly, in Raphael v. The Thames Valley Railway, 13 held, that in deciding whether specific performance should be enforced against a railway company, the court must have regard to the interests of the public, and there- fore, when a bridge had not been constructed in conformity with an agreement with a land-owner, but the injury to the land- owner was small, and the railway had since been opened for traf- fic, and the relief, if granted, would have necessitated an inter- ference with the traffic, the court refused to compel specific per- formance. 11. And it has been very recently declared by the English courts of equity, that where a contract is vague and so uncer- tain that no compensation could be awarded, a decree for spe- cific performance could not be made. 14 a City of Roxbury v. Boston & Providence Railw., 2 Gray, 460. 13 12 Jur. N. S. 656. 14 Tillett v. Charing Cross Co., 5 Jur. N. S. 994. §63. GENERAL PRINCIPLES. 229 ♦CHAPTER XI EMINENT DOMAIN. SECTION I. General Principles. 1. Definition of the right. 2. Intercommunication. 3. Necessary attribute of sovereignty. 4. Antiquity of its recognition. 5. Limitations upon its exercise. 6. Resides principally in the states. 7. Duty of making compensation. 8. Navigable waters. 9. 10, 11. Its exercise in rivers, above tide- water. § 63. 1. This title is very little found in the English books, and scarcely in the English dictionaries. But with us, it has been adopted from the writers on national and civil law, upon the continent of Europe, 1 and is perhaps better understood than almost any other form of expression, for the same idea. It is defined to be that dominium eminens, or superior right, which of necessity resides in the sovereign power, in all governments, to apply private property to public use, in those great public emer- gencies which can reasonably be met in no other way. 2. It is a distinct right from that of public domain, which is the land belonging to the sovereign. This is a superior right which the sovereign possesses in all property of the citizen or subject, whether real or personal, and whether the title were originally derived from the sovereign or not. One of the chief occasions for the exercise of this right is, in creating the neces- sary facilities for intercommunication, which in this country is now very generally known by the name of Internal Improve- ment. This extends to the construction of highways (of which turnpikes and railways are, in some respects, but different modes of construction and maintenance), canals, ferries, wharves, basins, and some others. 2 1 Vattel, B. 1, ch. 20, § 244 ; Code Napoleon, B. 2, tit. 2, 545 ; 1 Black. Comm. 139 ; Gardner v. Newburgh, 2 Johns. Ch. 162 ; 2 Dallas, 310. s 3 Kent, Comm. 339 el seq. and notes ; Beekman v. Saratoga & Sch. Railw., * 111 230 EMINENT DOMAIN. § 63. * 3. This is a right in the sovereignty, which seems indispen- sable to the maintenance of civil government, and which seems to be rather a necessary attribute of the sovereign power in a state, than any reserved right in the grant of property to the sub- ject or citizen. 4. It seems to have been accurately denned, and distinctly recognized, in the Roman empire, in the days of Augustus, and his immediate successors, although from considerations of policy 3 Paige, 45, 73 ; 12 Pick. 467 ; 23 Id. 327 ; 3 Selden, 314. This right, as some of the above cases show, extends to numerous matters not named in the text. It would be out of place here to enter into the discussion of the general subject. The indispensable prerequisites to the exercise of the right will ap- pear, as far as they apply to the subject, in the following sections. That railways are but improved highways, and are of such public use as to justify the exercise of the right of eminent domain, by the sovereign, in their construction, is now almost universally conceded. Williams v. N. Y. Central Railw., 18 Barb. 222, 246 ; State v. Rives, 5 Ired. 29 7 ; Northern Railw. v. Concord & Claremont Railw., 7 Foster, 183 ; Bloodgood v. M. & H. Railw., 18 Wend. 9 ; s. c. 14 Wendell, 51 ; 1 Bald. C. C. Reports, 205. See also 3 Paige, 73; 3 Seld. 314. It seems to be well settled, that the legislature have no power to take the property of the citizens for any but a public use ; but that a railway is such use. Bradley v. N. Y. & N. H. Railw., 21 Conn. R. 294; Symonds v. The City of Cincinnati, 14 Ohio R. 147; Embury v. Conner, 3 Comst. 511. But this is a power essentially different from that of taxation, in regard to which there is no constitutional restriction, and no guaranty for its just exercise, except in the discretion of the legislature. The People v. Mayor of Brooklyn, 4 Comst. 419 ; Cincinnati, W. & Z. Railw. v. Clinton Co. Comm. 1 Ohio N. S. 77. The legislature must decide, in the first instance, when the right of eminent domain may be exercised, but this is subject to the revision of the courts, so far as the uses to which the property is applied, are concerned. 2 Kent, Comm. 340. But as to the particular instance, the decision of the legislature, and of the commissioners appointed to exercise the power, is ordinarily final and not revis- able in the courts of law. Varrick v. Smith, 5 Paige, 137 ; Armington v. Bar- net, 15 Vt. R. 745. And the legislature may restrain the owners of property, in its use, when in their opinion the public good requires it, without compensation, as this is not the exercise of the right of eminent domain. Commonwealth v. Tewksbury, 11 Met. 55 ; Coates v. Mayor of New York, 7 Cowen, 585. But see Clark v. Mayor of Syracuse, 13 Barb. 32. The following case recognizes the general right stated in the text. Donnaher v. The State, 8 Sin. & M. 649. * 112 § 63. GENERAL PRINCIPLES. 231 and personal influence and esteem, they did not always choose to exercise the right, to demolish the dwellings of the inhabit- ants, either in the construction of public roads or aqueducts, or ornamental columns, but to purchase the right of way. 5. But in the states of Europe 3 and in the written constitu- tion * of the United States, and in those of most of the American states, an express limitation of the exercise of the right makes it dependent upon compensation to the owner. But this pro- vision in the United States constitution is intended only as a limitation upon the exercise of that power, by the government of the United States. 3 6. And it would seem, that notwithstanding this right of sov- ereignty may reside in the United States, as the paramount sov- ereign, so far as the territories are concerned, in reference to internal communication, by highways and railways, and notwith- standing the ownership of the soil of a portion of the lands, by the United States, in many of the states, as well as territories, still, when any of the territories are admitted into the Union, as independent states, the general rights of eminent domain are vested exclusively in the state sovereignty. 4 7. The duty to make compensation for property, taken for pub- lic use, is regarded, by the most enlightened jurists, as founded in the fundamental principles of natural right and justice, and as lying at the basis of all wise and just government, indepen- dent of all written constitutions or positive law. 5 3 Barron v. Baltimore, 7 Peters, 243 ; Fox v. The State of Ohio, 5 How. 410, 434, 435. 4 Pollard 87. Hagan, 3 How. 212; Goodtitle v. Kibbe, 9 How. 471 ; Doe v. Beebe, 13 How. 25 ; United States v. Railw. Bridge Co., 6 McLean, 517. In the Court of Claims recently, in the case of The Illinois Central Railw. v. United States, 20 Law Rep. 630, it was held, that the abandonment of a military reserve, which had become useless for military purposes, causes it to fall back into the general mass of public lands, and that a state, by virtue of its right of eminent domain, may authorize the construction of railways through land owned but not occupied by the United States. And the United States being in pos- session of land owned by the plaintiffs, and which was necessary to carry out the objects of their charter, it was held, that a payment made by the plaintiffs, to ob- tain possession thereof, was made under duress, and might be recovered. s Spencer, Ch. J., in Bradshaw v. Rogers, 20 Johns. 103 ; 2 Kent, Comm. 339, and note and cases cited, from the leading continental jurists. * 113 232 EMINENT DOMAIN. § 63. 8. But the public have a right, by the legislature, through the proper functionaries, to regulate the use of navigable waters, and the erection of a bridge, with or without a draw, by the authority of the legislature, is the regulation of a public right, and not the deprivation of a private right, which can be made the ground of an action, even where private loss is thereby produced, nor is it the taking of private property for public use which will entitle the owner to compensation. 9. And where a ford-way was destroyed, by the erection of a dam across a river, in the construction of a canal, or other public work, under legislative grant, the river being a public highway, although * not strictly navigable, in the common-law sense, (which only included such rivers, as were affected by tide-water,) it was held the owner of the ford-way could recover no compensation from the state, or their grantees, the act being but a reasonable exercise of the right to improve the navigation of the stream, as a public highway." 10. Neither can the owner of a fishery, which sustains dam- age or destruction by the building of a dam- to improve the navigation of a river above tide-water, under grant from the state, sustain an action against the grantees. 8 So also in regard to the loss of the use of a spring, by deepening the channel of such a stream, by legislative grant. 9 11. Nor is the owner of a dam, erected by legislative grant upon a navigable river, and which was afterwards cut off by a canal, granted by the same authority, entitled to recover dam- ages. 10 6 Davidson v. Boston & Maine Railw., 3 Cush. 91 ; Gould v. Hudson River Railw., 12 Barb. 616 ; s. c. 2 Selden, 522. Nor have the state any such right in flats, where the tide ebbs and flows, as to require a railway company to pay them damages for the right of passage. Walker v. Boston & Maine Railw., 3 Cush. 1 ; s. c. 1 Am. Railw. C. 462. 7 Zimmerman v. Union Canal Co., 1 Watts & S. 346. 8 Shrunk v. Schuylkill Navigation Co., 14 Serg. & Rawle, 71. 9 Commonwealth v. Ritcher, 1 Penn. R. 467. 10 Susquehannah Canal Co. v. Wright, 9 Watts & Serg. 9 ; Monongahela Navigation Co. v. Coons, 6 Id. 10J. * 114 §64. TAKING LANDS IN INVITUM. 233 SECTION II. Taking Lands in invitum. 1 . Legislative grant requisite. 2. Compensation must be made. 3. Consequential damages. 4. Extent of such liability. 5. 77ic.se grants strictly construed. 6. Limitation of the power to take lands. 7. Interference of courts of equity. 8. Rule of construction in American courts. 9. Strict, but reasonable construction. 1 0. Rights acquired by company. 1 1 . Limited by the grant. 1 2. Late decision of the House of Lords. § 64. 1. In England railways can take lands by compulsion, only in conformity to the terms of their charters, and the gen- eral laws denning their powers. 1 And in this country a railway company or other corporation must show, not only the express warrant of the legislature 2 (which it must for all its acts) for taking * the land of others for their own uses, but also that the legislature, in giving such warrant, conformed to the constitu- tions of the states, in most of which it is expressly required that compensation should be made for all lands taken. And upon this subject, the circumspection of the English courts, in requir- ing damage and loss to the land-owners to be fairly met, is shown very fully by the language of Lord Denman, Ch. J., in The Queen v. The Eastern Counties Railway. 3 1 Taylor v. Clemson, 3 Railw. C. 65. Tindal, Ch. J., here said, " This au- thority to take land, if exercised adversely, and not by consent, is undoubtedly an authority to be carried into effect, by means unknown to the common law." And in Barnard v. Wallis, 2 Railw. C. 177, the Master of the Rolls declares, that aside from the provisions of the act of parliament, the owner of one rod of land may insist upon his own terms, to the utter overthrow of the most impor- tant public work. " The price of his consent must be Determined by himself." All kinds of property and estate are subject to this right of eminent domain, and a dwelling-house, so long regarded as the inviolable sanctuary of the owner or occupant, forms no exception. Wells v. Som. & Ken. Railw. Co., 47 Me. R. 345. 2 Hickok v. Pittsburgh, 15 Barb. 435; 4 Barb. 127; Halstead v. Mayor, &c. of New York, 3 Comst. 430; Hart v. Mayor of Albany, 9 Wend. 571, 588; 2 Denio, 110; Dunham v. Trustees of Rochester, 5 Cowen, 462. 3 2 Railw. C. 736, 752. It has been repeatedly decided that the corporate authorities of a city have no power to confer upon any person, natural or cor- porate, the franchise of operating a railway. Such a grant for an indefinite *llo 234 EMINENT DOMAIN. § 64. 2. " Wc think it not unfit to premise, that when such large powers are intrusted to a company to carry their works into execution, without the consent of the owners and occupiers of the land, it is reasonable and just that any injury to property which can be shown to arise from the prosecution of those works should be fairly compensated for to the party sustaining it." 3. In the English statute, too, railway companies are made liable to pay damage to the owner of all lands " injuriously af- fected " by any of their works. Such a provision does not exist in many of the American states, and consequently no liability is imposed for merely consequential damages to lands, no part of which is taken. 4 4. Under the English statute, giving damage where lands are " injuriously affected," railways have been held liable for all acts, which, if done without legislative grant, would constitute a nuisance, and by which a particular party incurs special dam- age. 5 5. These grants, being in derogation of common right, are to receive a reasonably strict and guarded construction. 6 The period is void as a perpetuity. Such powers are held by the city for the public benefit, and cannot be abrogated or delegated. And such a grant being not an act of municipal legislation merely, but a contract which, if valid, it could not revoke or limit, and which is consequently void as a perpetuity. Milhau v. Sharp, 27 N. Y. R. 611 ; post, § 76, p. 54 7. 4 Hatch v. Vermont Central Railw., 25 Vt. R. 49 ; Philadelphia & Trenton Railw., 6 Whart. 25; Monongahela Nav. Co. v. Coon, 6 Watts & Serg. 101. See also Protzman v. Ind. & Cin. Railw., 9 Ind. R. 467; Evansville & Craw- fordsville Railw. v. Dick, Id. 433. 5 Queen v. Eastern Co.'s Railw., 2 Q. B. 347; Glover v. North Stafford- shire Railw., 5 Eng. L. & Eq. 335. 6 Gray v. Liverpool & Bury Railw., 4 Railw. C. 235 - 240. Hence under a general grant of power to take land for the track of a railway, with sidings and branches to the towns along the line, the company have no power to take land for a temporary track during the period of constructing the main line. Currier v. Marietta & Cin. Railw. Co., 11 Ohio N. S. 228. Nor can a railway compa- ny, under their general powers, take lands at a distance from their line not in- tended to be used in its construction. Waldo v. Chicago, St. Paul & Fond du Lac Railw. Co., 14 Wise. R. 575. Nor can a railway company take land com- pulsorily for the purpose of erecting a manufactory of railway cars, or dwell- ings to be rented to the employes of the company. But they may take land • for the purpose of storing wood and lumber used on the road, or brought there § 64. TAKING LANDS IN INVITUM. 235 Master of the Rolls, in this last case, says, " In these cases it is always to be borne in mind, that the acts of parliament are acts of sovereign and imperial power, operating in the most harsh shape in which that power can be applied in civil matters, — solicited, as they are, by individuals, for the purpose of private speculation and individual benefit." And in another case 7 the rule of construction is thus laid down : — * 6. " These powers extend no further than expressly stated in the act, except where they are necessarily and properly ac- quired for the purposes which the act has sanctioned." This last category, as here observed, is often a most perplexing one, in regard to its true extent and just limits. And doubtful grants are to be construed most favorably towards those who seek to defend their property from invasion. 8 And a railway, having an option between different routes, can only take lands on that route which they ultimately adopt ; and if they contract for land upon the other routes, cannot be compelled to take it. 9 The time for exercise of these compulsory powers, by the Eng- lish statutes, is limited to three years, 10 except for improvements for transportation upon it. And when land is taken for a legitimate purpose, the decision of the locating officers of the company is conclusive as to the ex- tent required for that purpose, unless the quantity so taken is clearly beyond any just necessity. Vt. & Canada R. v. Vt. Cent. R., 34 Vt. R. 2. 7 Colman v. The Eastern Counties Railw., 4 Railw. C. 513, 524; State v. B. & O. Railw., 6 Gill. 363 ; Simpson v. So. Staff. Waterworks Co., 11 Jur. N. S. 453. And in a recent case in Kentucky, the rule is thus stated : The rules of construction which apply to charters delegating sovereign power to corporations do not depend upon the question whether the corporation is a private or a pub- lic one, but on the character of the powers conferred, and the purposes of the organization. The power of a railroad or other private corporation to take pri- vate projierty for its use, being a delegation of sovereign power, must be con- strued as it would be if delegated to a municipal corporation. And the powers of private and public corporations, with respect to their property, are governed by the same principles, and, in the absence of express provisions of law, depend upon the purposes for which the corporation was formed. Bardstown & Lou. R. R. Co. v. Metcalfe, 4 Met. (Ky.) 199. 8 Sparrow v. Oxford, W. and W. Railw., 12 Eng. L. & Eq. 249; Shelford on Railways, 233. 9 Tomlinson v. Man. & Birm. Railw., 2 Railw. C. id?; Webb v. Man. & Leeds Railw., 1 Railw. C. 576. 10 Such a limitation is held obligatory wherever it exists. Peavey v. Calais Railw., 30 Maine R. 498; s. c. 1 Am. Railw. C. 147. *116 236 EMINENT DOMAIN. § 64. necessary for the public safety, in conformity with the certificate of the Board of Trade. It was decided by the House of Lords, reversing the judgment of the Lords Justices, but affirming that of the Vice-Chancellor, that where the legislature authorizes a railway company to take, for their purposes, any lands described in their act, it constitutes them the sole judges as to whether they will or will not take those lands, provided that they take them bond fide, with the purpose of using them for the purposes authorized by the legis- lature, and not for any sinister or collateral purposei 1 And that a court of equity cannot interfere, even upon the decision of an engineer, to curtail the power of the company, in regard to the quantity of land sought to be obtained by it, so long as it acts in good faith. But in a later case 12 it was said that the House of Lords, in the case of Stockton & Co. v. Brown, did not decide that the company, by its engineer, had an unlimited dis- cretion to take any land which the engineer would make affi- davit the company required for use in the construction of their works, without stating what works ; but that it must appear to what use they proposed to put the lands, and if that came fairly within the range of their powers, the company could not be con- trolled in the bond fide exercise of its discretion as to the mode of constructing their works, within the powers confided to them by the legislature. The company will not be restrained from tak- ing land for the purpose of depositing waste upon, although not confident of requiring it for any other purpose connected with the construction. 13 7. As a general rule in the English courts of equity, if the construction of a railway charter be doubtful, they will remit the party to a court of law to settle the right, in the mean time so exercising the power of granting temporary injunctions as will best conduce to the preservation of the ultimate interests of all parties. 14 11 Stockton & Darlington Railw. Co. v. Brown, 6 Jur. N. S. 1168 ; s. c. 9 Ho. L. C. 246 ; North Missouri Railw. v. Lackland, 25 Mo. R. 515 ; Same v. Gott, Id. 540. 12 Flower v. Lond*wi Br. & S. Coast Railw. Co., 11 Jur. N. S. 406. 13 Lund v. Midland Railw. Co., 34 L. J. Ch. 276. 14 Clarence Railw. v. Great North of England, C. & H. J. Railw., 2 Railw. C. 763. But the practice of courts of equity in this respect, is by no means uni- form. See post, chap, xxviii. § 64. TAKING LANDS IN INVITUM. 237 8. Similar rules of construction have prevailed in the courts of this country. The language of Ch. J. Taney, in the leading case upon this subject, in the national tribunal of last resort, is very explicit. " It would present a singular spectacle, if, while the courts of England are restraining within the strictest limits the spirit of monopoly and exclusive privilege in nature of mo- nopoly, and confining corporations to the privileges plainly given to them in their charter, the courts of this country should be found enlarging these privileges by implication." 15 And in commenting upon the former decisions of that court, upon this subject, the same learned judge here says, " the .principle is rec- ognized, that in grants by the public nothing passes by implica- tion." 16 And other cases * are here referred to in the same court, in support of the same view. 17 9. But it is not to be inferred that the courts in this country, or in England, intend to disregard the general scope and purpose of the grant, or reasonable implications, resulting from attending circumstances. But if doubts still remain, they are to be solved against the powers claimed. 18 15 Charles River Bridge v. Warren Bridge, 11 Pet. 420. 15 U. S. v. Arredondo, 6 Pet. 691, 738. 17 Jackson v. Lamphire, 3 Pet. 280; Beaty v. Knowler, 4 Pet. 152, 168; Prov- idence Bank v. Billings & Pittman, 4 Pet. 514. And that court not only ad- heres to the same view still, but may have carried it, in some instances, to the extreme of excluding all implied powers. See also upon this subject, Common- wealth v. Erie & Northeast Railw., 27 Penn. St. 339; and Bradley v. New York & New Haven Railw., 21 Conn. R. 294. 18 Perrine v. Ches. & Del. Canal Co., 9 How. 172; Enfield Toll Bridge v. Hartford & N. H. Railw., 17 Conn. R. 454; Springfield v. Conn. River Railw., 4 Cush. 63; 30 Maine R. 498; 9 Met. 553; 1 Zab. 442; 3 Zab. 510; 21 Penn. St. 9; 15 111. R. 20. The following cases will be found to confirm the general views of the text. Tuckahoe Canal Co. v. Tuckahoe Railw., 11 Leigh, 42; Greenleaf's Cruise, Vol. 2, 67, 68; Thompson v. N. Y. & H. Railw., 3 Sand. Ch. 625; Oswego Falls Bridge Co. v. Fish, 1 Barb. Ch. 547; Moorhead v. Little Miami Railw., 17 Ohio R. 340; Stormfeltz v. Manor Turnpike Co., 13 Penn. St. 555; Toledo Bank v. Bond, 1 Ohio N. S. 636; Cincinnati Coll. v. State, 17 Ohio R. 110; Cam. & Amboy R. v. Briggs, 2 Zab. 623; Carr v. Georgia Railw. & Banking Co. 1 Kelly, 524 ; 7 Ga. R. 221 ; New London v. Brainard, 22 Conn. R. 552 ; Bradley v. N. Y. & N. H. Railw., 21 Conn. R. 294 ; 9 Ga. R. 475 ; Barrett v. Stockton & D. Railw., 2 M. & G. 134. * 117 238 EMINENT DOMAIN. § G4 10. But where the right of the company to appropriate the land is perfected under the statute, they may enter upon it without any process for that purpose, and the resistance of the owner is unlawful, and he may be restrained by injunction, but that is unnecessary. The statute is a warrant to the company. 19 11. But a grant to a railway to carry passengers and mer- chandise from A. to M., does not authorize them to transport merchandise from their depot in the city of M. about the city, or to other points, for the accommodation of customers. 20 12. There has been considerable discussion in the English courts, within the last few years, in regard to many recent stat- utes there, for the improvement of markets and streets in the metropolis or districts adjoining, through the agency of "the municipal corporations. And while the courts there, and espe- cially the House of Lords, in a very recent case, 21 adhere stren- uously to the former rule, in regard to private corporations, that they can only take lands compulsorily, for the needful purposes of the works which they are authorized by the legislature to con- struct ; on the other hand, they hold that it is competent and proper, under parliamentary powers granted for that purpose, to allow municipal corporations to reimburse the expense of any improvements which they are authorized to carry forward, in their streets and squares or markets, by taking the lands adjoin- ing such improvements, at the price of their value before such improvements, and selling them at the advanced prices caused by such improvements. And it was held that the municipality having, before the act passed, contracted for the sale of such of the lands so to be taken as they should not require for the purpose of the public improvement, did not disqualify them from exercising the discretion reposed in them by the act, as to how much land they would take. This rule of law in regard to the proper mode of reimbursing the expense of great public im- provements is not very different from that which has been ex- tensively in use in America under the name of betterment acts, whereby the expense is assessed upon the adjoining property 19 Niagara Falls & Lake Ontario Railw. v. Hotchkiss, 16 Barb. 270. 50 Macon v. Macon & Western Railw., 7 Ga. R. 221. 81 Galloway v. The Mayor & Commonalty of London and the Metropolitan Railw. Co., et vice versa, 12 Jur. N. S. 7-17. (1866.) §G5. CONDITIONS PRECEDENT. 239 owners, upon some seheme of equalization, presumptively appor- tioning the loss and benefit equitably. 22 *SECTION III. Conditions Precedent. 1 . Conditions precedent must be complied with. 2. That must be alleged in petition. 3. When title vests in company. 4. Filing the location in the land office is no- tice, to subsequent purchasers. 5. After damages arc assessed and confirmed by the court the owner is entitled to exe- cution. 6. If the company use the land. 7. Subscriptions payable in land without com- pensation, a court of equity will enforce payment. § 65. 1. It has been held that a railway company must com- ply witli all the conditions in its charter, or the general laws of the state, requisite to enable it to go forward in its construction, before it acquires any right to take land by compulsion. In England one of these conditions in the general law is, that stock, to the amount of the estimated cost of the entire work, shall be subscribed. And where the charter or the general laws of the state gave the right to take land for the road-way only upon the legislature having approved of the route and termini of the line, it was held the company could not proceed to condemn lands for that purpose until this approval was made. 1 2. And where the act of the legislature, under which a rail- way was empowered to take lands, required the company to ap- ply to the owner, and endeavor to agree with him as to the compensation, unless the owner be absent or legally incapaci- tated, they have no right to petition for viewers until that is done. 2 The petition should allege the fact that they cannot agree with the owner. 2 22 Post, § 229, and cases cited in n. 22, 23. 1 Gillinwater v. The Mississippi & A. Railw. Co., 13 111. R. 1. 2 Reitenbaugh v. Chester Valley Railw., 21 Penn. St. 100. But where the company have the right to lay their road, not exceeding six rods in width, and have fixed the centre line of the same, they may apply for the appointment of appraisers, and determine the width of the road, any time before the appraisal. Williams v. Hartford & New Haven Railw., 13 Conn. R. 110. But slight, if indeed any evidence of this failure to agree with the land-owner is required, where the claimant appears and makes no objection on that ground. Doughty * 118 240 EMINENT DOMAIN. § 65. The right of such companies to take land is held in some states to depend upon the legal sufficiency and validity of the certificate and public record of organization ; and it was held the company must show these prerequisites to be strictly in con- formity with the requirements of the law. 3 3. WherC the charter of a railway company provides that the title of land condemned for the use of the company shall vest in the company, upon the payment of the amount of the valuation, no title vests until such payment. 4 In a late case, 5 the law upon * this subject is thus summed up : Where the charter of the com- pany provides, that after the appraisal of land, for their use, u vpun the payment of the same,'''' or deposit, (as the case may be,) the company shall be deemed to be seized and possessed of all such lands, " they must pay or deposit the money before any such right accrues." " The payment or deposit of the money awarded is a condition precedent to the right of the company to enter upon the land for the purposes of construction, and without compliance with it they may be enjoined by a court of equity, or prosecuted in trespass at law, for so doing. The right of the land-owner to the damages awarded is a correlative right to that of the company to the land. If the company has no vested right to the land, the land-owner has none to the price to be paid." 4. And where the charter contained the usual power to take land, it was held, that after laying out their road and filing the location in the land office, the company had acquired a right of entry, which subsequent purchasers were bound to respect. 6 5. And where the road has been laid and the damages as- v. Somerville & Eastern Railw., 1 Zab. (N. Jersey), 442. And the petition may be amended where this averment is omitted. Pennsylvania Railw. v. Por- ter, 29 Penn. St. 165. 3 Atlantic, &c. Railw. v. Sullivant, 5 Ohio N. S. 276. 4 Baltimore & Susquehanna Railw. v. Nesbit, 10 How. (U. S.) 395. See also Compton v. Suscmehanna Railw., 3 Bland, 386, 391 ; Van Wickle v. Railw., 2 Green, 162; Stacy v. Vermont Central Railw., 27 Vt. R. 39; Levering v. Railw. Co., 8 Watts & Serg. 459. And upon payment of the compen- sation assessed by commissioners, and taking possession afterward, the title of the company is perfected, as against the party to the proceedings. Bath River Navigation Co. v. "Willis, 2 Railw. C. 7. 6 Stacy v. Vermont Central Railw., 27 Vt. R. 39. • Davis i?. E. T. & Ga. Railw., 1 Sneed, 94. * 119 §189i. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 241 7. In a recent case in New York 4 it is held, that where the parties have agreed that the communications between them shall be by telegraph, this in effect is a warranty by each party that his communications to the other shall be received ; and a com- munication by telegraph is only initiated when it is delivered to the operator: it is completed when it comes to the party for whom it is designed. 8. It is here said, that the rules of law applied to contracts made by correspondence by mail are not applicable to communi- cations by telegraph. But it seems to us that the same rules will in the main apply. For in both cases the party taking the risk of transmission will be the same, and the consequences of mistake or failure will ordinarily fall upon the same party in both modes of communication. But this case seems to hold that where inquiry is first to be made for the original, it depends upon which party is responsible for the transmission across the line, or in other words, whose a^ent the telegraph is. The first communication in a transaction, if it is all negotiated across the wires, will only be effective in the form in which it reaches ils desti- nation. In such case inquiry should first be made for the very despatch delivered. In default of that, its contents may be shown by the next best proof. " If the course of business is, as in the cities, to preserve copies of all messages received in books kept for that purpose, a copy might readily be obtained which would ordinarily be regarded as better proof than the mere recollection of a witness. And according to the early English and the American practice, the party is bound to produce a copy of the original (that being lost) when in his power, and have a sufficient time before the trial to enable him to do so ; 1 Greenleaf Ev. sec. 84 and note. And perhaps if no copy of such message is preserved, but the original message ordered to be sent is preserved, that should be produced, although this were not strictly the original in the case, the letter delivered, which was the original, being lost. " But where the party to whom the communication is made is to take the risk of transmission, the message delivered to the operator is the original, and that is to be produced, or the nearest approach to it by way of copy or otherwise." 4 Trevor v. "Wood, 41 Barb. 255. The rule in regard to contracts by cor- respondence through the mail is well settled. Where one makes an offer and requires a reply by mail, the contract is closed the moment the reply is mailed, or deposited in the authorized place of deposit for letters in the post-office or elsewhere. Vassar v. Camp, 1 Kernan, 441 ; Tayloe v. Merchants' Ins. Co., 9 How. 390. But these and all similar cases go upon the ground that the per- son making the offer, directs, by implication, that the reply to his proposition shall be made through the mail, and that when it is so accepted the contract shall be considered as closed. That is said almost in terms in Tayloe v. Mer- chants' Ins. Co., supra, and clearly implied in the terms of the offer in Vassar vol. n. 16 242 TELEGRAPH COMPANIES. §1895. there is a distinction between the two modes of communication, in that the post-office, being a public institution, is not the agent of cither party, but is alone responsible for the transmission of letters, while the telegraph is the agent of the party employing it. But we do not comprehend the existence of any such dis- tinction. Both are the agents of the party employing them, and such party is responsible for the safe transmission of messages by either. This is well illustrated by the transmission of money by mail. If the debtor assumes to send the amount of his debt by mail, without instructions from his creditor to do so, he as- sumes the risk of safe delivery, and consequently makes the post- office his agent throughout the transit. But if the creditor directs the money sent by mail, it becomes his agent for the purpose, and the risk is his, and the debt paid the moment the money is placed in the post-office, whether it ever reaches the creditor or not. 9. Where one employs a special agent, who is not the regular operator, to transmit a message across the wires, he takes the responsibility of correct transmission, whether such would have been the case or not, if he had employed the usual agencies of telegraphic communication. 5 And where such message had ref- erence to responsibility for the act of another, the sender will be bound to the extent of what his agent transmits, whether he so v. Camp, supra. And in the latter case it is declared by the court, that the party making the offer may make it a condition that the proposed contract shall not be obligatory upon him until he receives notice of its acceptance, or unless he receives such notice in a specified time. But where nothing is said, it is the fair implication that one making an offer through the mail expects a re- ply in the same way ; and unless he annexes some express condition to his offer, he must, as a reasonable man, expect to be bound by it, if accepted in the mode indicated by the terms of the offer. Unless this rule of construction were adopted, it would become impossible ever to have a contract closed, as both parties, at all times having the locus penitential, might exercise it upon the receipt of the reply, or before. And we think in all reason that one who sends an offer by telegraph, asking a replv, is bound, the moment the reply is delivered by the same communication by which the offer is transmitted. One who sends a proposition by telegraph, and asks a reply, must, in all reason and fairness, expect it will be understood, a reply by telegraph; and if so, it is difficult to perceive any difference between correspondence by mail and by telegraph in effecting a contract. 5 Dunnin" v. Roberts, 35 Barb. 4G3. §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 243 intended or not. And a message so sent will be the same as if sent by himself, and will be regarded as a memorandum in writ- ing, under the statute of frauds, to the extent of the words sent. 10. The general question of the party assuming the responsi- bility of the transmission of messages by telegraph is illustrated by some of the cases incidentally, in allowing the party to whom the message is sent to maintain an action for damages, on the ground that he had been misled and had thereby suffered loss, where it might have been claimed, that if the party sending the message were bound by it, in the form in which it reached the person to whom it was addressed, he would have been benefited rather than damnified, inasmuch as he would by the error have secured a much larger sale than he would otherwise have done. 6 But we think the true distinction, in regard to the party entitled to bring the action, where any default in transmitting a message by a telegraph company arises, must rest upon the distinction which everywhere obtains in actions on the case. 1. That the contracting party may maintain the action on the ground of breach of contract, as well as for any breach of duty, as public servants. 2. Those who are injured by their neglect of duty, as public servants offering to serve faithfully all who may have any interest or connection with their operations, may have an action on the ground of a virtual tort in failing to perform this general duty of faithful and careful servants. This seems to us to be well illustrated by the case last cited. The sender of the message might have maintained an action to recover all the damage he sustained by an over order being sent to his corre- spondent. On the other hand the correspondent was not obliged to forward the two hundred bouquets and collect pay for them of the man who never intended to order them. He was not obliged to accept such man as his debtor, but might recover all his dam- ages, if he so elected, of the party whose default and negligence caused them. 6 New York & Washington Printing Telegraph Co. v. Dryburg, 35 Penn. St. 298. In this case the message was for two hand bouquets ; the operator not read- ing the word " hand " correctly, but calling it "hund," added " red," making the order for " two hundred bouquets." The florist procured a large quantity of expensive flowers, which the party giving the order refused to accept, and he brought his action against the telegraph company for the damage, and it was sustained. 244 TELEGRAPH COMPANIES. § 189 &- 11. We must state briefly the points which have been decided in other cases. It was early decided, that where the party send- ing a message signs a paper handed him by the company at the time, upon which is written or printed a notice that messages of consequence ought to be repeated from the station to which they are addressed, and that a higher rate is charged for repeated messages, and that the company will not be responsible for mis- takes in unrepeated messages ; he will be bound by the notice, the limitation being regarded as reasonable, and if not, it is at least such a limitation as the defendants may properly annex to all their undertakings. 7 12. A similar condition is contained in most of the bills upon which messages are required to be written by those desiring to send them by American telegraph companies. And so far as we know, the courts have in this country followed the English deci- sion already referred to. In the last case cited a query is made how far the company in such case will be responsible for gross neglect. We think there ought to be no doubt in regard to the responsibility of the company in such cases for even ordinary neglect. And the whole extent to which such a condition should be held to qualify the responsibility of the company, is that it will not be held absolutely responsible, as insurers of the accuracy of transmitting messages, unless repeated and paid for as such. 13. This is the only ground upon which such a company could be held responsible as insurers, as this is the only mode in which perfect certainty of accuracy can be secured. And if the sender desires to secure perfect accuracy, he should so state, and pay accordingly, as it seems to us. This construction will reconcile the cases and the conflicting dicta in regard to the prop- osition how far telegraph companies are to be regarded as com- mon carriers. 8 T M' Andrew v. The Electric Telegraph Co., 33 Eng. L. &. Eq. 180; s. c. 17 Com. B. 3. s Thus in the case cited in n. 7 the company are spoken of by Jervis, Ch. J. as " carriers," and therefore "entitled to annex any reasonable condition to their responsibility as insurers. And in Parks v. Alta California Telegraph Co., 13 Cal. R. 422, it is expressly decided that telegraph companies are common carriers , While in Birney v. New York & Washington Tel. Co., 18 Md. R. 341, the company is held responsible for all reasonable diligence to transmit the message correctly, but is not regarded as a common carrier, but performing a service for others ac- §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 245 14. The rule of responsibility of telegraph companies seems to be as correctly laid down in a late case in Kentucky as in any cording to its established rules, and that such rules, if known to the employer, or if he has the means of knowing them from part of the contract and under- taking of the company, bind him. But it is here held, that the exception as to the company's responsibility for unrepeated messages will not excuse the compa- ny, where the operator forgot the message and made no effort to transmit it. And in N. Y. & Washington Printing Tel. Co. v. Dryburg, 35 Penn. St. 298, it is also declared, that telegraph companies are not responsible as common car- riers and insurers of the correct transmission of their messages, but their re- sponsibility is similar to that of common carriers, and if they negligently or wilfully violate their duty of sending the very message ordered to be sent, they are responsible in damages to the party injured. The corporation, it is here said, is liable in tort for the misconduct of its agent, although not appointed un- der the seal of the corporation, if the act be done in the ordinary course of his service or duty. And even when the sender did not pay for repeating the mes- sage according to the standing rules of the company duly published, this will afford no excuse for the company, where the operator added to the message left an important matter, making it read differently, and, in fact, to be an entirely dif- ferent message. These cases, and some others might perhaps be quoted of the same character, sufficiently evince the animus of the rule of law upon the point of the responsi- bility of telegraph companies. 1. If they annex no conditions to their undertaking, they will be expected.to do it in the same careful and faithful manner that other careful and skilful men in that department do such business. 2. If a message is left and paid for as a single transmission, the sender, or those interested in the sending, will be expected to assume what risk necessarily attends such transmissions after diligent and faithful effort to accomplish the duty. 3. As there is but one sure test of the accuracy of messages being sent, that is, by repeating them, one who desires to secure that, or where business is of such importance as to make that desirable and reasonable, will be expected to so inform the company and pay for the insurance. 4. This rule is so obviously just and reasonable, that we believe it forms a standing and undeviating rule of all the telegraph companies here and else- where, and is so notorious, that all persons sending messages may fairly be pre- sumed connusant of its existence and will be bound by it. There are some few early cases not falling precisely within these rules per- haps, but they are not of much weight. In the Courts of Common Pleas, Ohio, in the case of Brown v. Lake Erie Telegraph Co., 1 Am. Law. Reg. 685, it was decided at a jury trial, that telegraph companies are responsible for all mistakes or errors in the transmission of messages by them unless from causes beyond their control. 246 TELEGRAPH COMPANIES. § 189 ft. other. 9 It was here held, that one who sends a message under the knowledge of the ordinary notice, limiting the responsibility 9 Camp v. Western Union Telegraph Co., 1 Met. (Ky.) 164. This case is supported by many of the cases before referred to, and by some others more or less directly. Thus in New York, Albany, & Buffalo Tel. Co. v. De Rutte, N. Y. Com. Pleas, 5 Am. Law Reg. x. s. 407, the same rule is laid down with the quali- fication, that knowledge of this limitation of responsibility by the company must be brought home to the sender. But this knowledge will be presumed in many cases, as, where the sender signs a bill containing such notes, he will be presumed to have knowledge of its contents, as that was within his power and becomes consequently his duty. So also where such a condition from its innate fitness may be presumed to suggest itself to all persons as the only ground upon which such companies could safely undertake for the perfect accuracy of the transmis- sion of messages, or by which it could be secured by any one, it will be the duty of the sender and equally of the receiver to see that his message is or has been repeated, or else to understand that he assumes the necessary hazard in regard to possible inaccuracies in all unrepealed Messages. And where such a practice becomes universal in the business of telegraphing, its notoriety will affect all with presumptive notice, since all men who allow themselves to have anything to do with any general business are bound to inform themselves in regard to those rules affecting the transaction of the business, which, by common consent of all connected with it, are of such reasonableness and necessity as to have become of universal acceptance. And as all persons any way connected with any busi- ness are bound to understand its universal or elementary principles, so they will be presumed to do so. This rule of construction is of such universal applica'- tion, that, in the construction of written contracts, it is always assumed that both parties understand these universal and elementary laws of the business forming the groundwork or subject-matter of the contract, and that they intend to contract with reference to these laws and in subordination to them, unless where the express terms of the contract are in irreconcilable conflict with these laws. In such cases only can it fairly be assumed by courts that the parties intended to contract, in disregard and in defiance of the universal laws of the business. These principles are somewhat considered, and, as we think, substantially con- firmed by the following well-considered case. A telegraph company furnished to the public printed blanks upon which per- sons wishing to send messages were to write the same. These blanks contained a printed heading, in which the company stated the conditions upon which it would transmit messages ; provided a method of guarding against errors or delays in the transmission or delivery of messages by a repetition thereof; and declared that it was agreed by the ccjmpany and the signer, that without such repetition the liability of the company for such error or delay should be limited to the amount paid for the transmission, unless the message was specially insured. After the blank date and before the space for the message were these words, " Send the following message subject to the above conditions and agreement." Held, That such a printed blank before being filled up was a general proposi- §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 247 of the company for unrepeatcd messages, as already stated, is presumed to assent to its binding obligation, as it is both reason- able and just, and such as the company had the right to prescribe as the price and measure of its responsibility, and that a party acting under it, who does not have his message repeated, will be regarded as sending the same at his own risk, and the company will not be liable for damages resulting from a mistake not occa- sioned by negligence or want of skill in the agents of the com- pany. 15. In the case of the New York, Albany, and Buffalo Tele- graph Company 9 it was decided, in regard to messages going beyond the line of the first company, that where the first com- pany takes the compensation for the entire distance, it thereby engages for the due delivery of the message at its destination, unless it expressly limits its responsibility to its own route, or the circumstances are such as clearly to indicate that such was the understanding of the parties. It is here said the telegraph tion to the public of the terms and conditions upon which messages would be sent and the company become liable in case of error or accident. That by writing a message under such a heading, and signing and delivering it for transmission, the sender accepted the proposition, and it became an agree- ' ment binding upon the company only according to its specified terms and con- ditions. And that the legal consequence was not varied by the fact that the sender of the message had not read the printed conditions and agreement there subscribed. That such an omission Avould be gross negligence, which he. would not be al- lowed to set up to establish a liability against the company which was expressly stipulated against. Against such a claim the principle of estoppel in pais applies in full force. Telegraph companies are not common carriers. The two kinds of business have but a mere fanciful resemblance and cannot be subjected to the same legal rules and liabilities. But even if they were common carriers, their right to lim- it their liability by express contract is well settled. The plaintiffs delivered to the defendant, for transmission from Palmyra to their correspondents in N. Y., a message directing the purchase of " $ 700 in gold," written under such printed blank as above described, and signed by them without ordering the message to be repeated or providing for its being in- sured. Through the error of some of the defendant's operators the message as delivered to the correspondents required them to purchase $ 7000 instead of the smaller sum ; in consequence of which error the plaintiff suffered serious loss. Held, that they could not recover the amount of the company. Breese v. United States Tel. Co., 45 Barb. 274. 248 TELEGRAPn COMPANIES. §1895 company arc not strictly common carriers, but their responsi- bility is analogous and to be measured by the application of analogous principles, but not always to the same extent. We see no reason why the responsibility of the first company for the entire route may not fairly be measured by the same analogies as that of common carriers of passengers, which will be found sufficiently discussed in another place. There is a well-consid- ered case in Upper Canada bearing upon this point, but decided by a divided court, but it would seem that the opinion of the majority of the court followed the analogies applicable to passen- ger-carriers more closely than that of the dissenting judge. 10 16. There has been considerable discussion in the courts in regard to the proper rule of damages, in case of the default of 10 Defendants owned a telegraph extending to Buffalo only, but in their printed handbills they advertised their line as " connecting with all the princi- pal jcities and towns in Canada and the United States"; and they received the charge for transmission to places beyond their line. The plaintiff had some flour in the hands of N., his agent at N. Y., and about 3 P. M., on the 23d Nov., delivered to the defendants, at Hamilton, the following message addressed to N., paying the charge to N. Y. : "Am disposed to realize — sell 1,500 bar- rels." At the time of delivering the message nothing was said as to its impor- tance, or the necessity for immediate despatch, and, owing to the defendants' line being out of order, it was not sent till after five on the following afternoon, — * being Saturday. The defendants' operator received it at Buffalo, and on the same day delivered it at the office of the American Company, paying their charge. It was not received by the plaintiff's agent in N. Y. until after busi- ness hours, on the 26th, and in the mean time the price of flour had fallen ma- terially. The agent, therefore, did not sell, but held the flour until the end of December, and as the market had continued to fall, it then realized nearly $ 5 a barrel less than could have been obtained on the 23d or 24th. In an action against defendants for negligence in transmitting and delivering the message at N. Y., the jury found for defendants, and on motion for a new trial, Held That the verdict must stand, for the only negligence shown was in delivering the message at New York, and if defendants were liable for that they would not be answerable for loss caused by a fall in the market, but under the evidence for nominal damages only. Per Robinson, C. J., and McLean, J. — Defendants, under the facts proved, could not be held liable for delay beyond their own line, but were bound only to transmit the message to Buffalo, and hand it to the American Co. there, pay- ing the charge to New York. Per Burns, J. — That the defendants were liable as upon an undertaking to transmit the message to New York and deliver it there. Stevenson v. The Montreal Tel. Co., 16 Upper Canada, 530. §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 249 telegraph companies in sending messages correctly. It has been claimed, that, by reason of the ignorance of the company, in most instances, of the importance of messages sent along their line, there is no properly defined rule of damages, and no meas- ure of the diligence or responsibility of the company, and no standard by which they could properly measure their charges so as to include the proper premium for insurance. 11 17. But we do not apprehend there will really be any diffi- culty in such companies securing themselves against all reason- able hazard, by the use of suitable caution in assuring them- selves at the time of receiving a message that they understand the correct reading of it. For after that it is always in their power to know with absolute certainty whether it is correctly transmitted, by having it repeated back. And as we have be- fore said, if the sender do not choose to be at this expense he will then assume all risk of the transmission, so that in cither case all the company really require to render their business en- tirely safe, is, to be sure they understand the message left with them, which is not attended with any necessary uncertainty. 18. The rule of damages then will be a plain one. The com- pany must make good the loss resulting directly from any de- fault on their part. We see no reason why the ordinary rule should not be applied to cases of this character, as that the party injured by a breach of contract is entitled to recover all his damages, including gains prevented as well as losses sus- tained, provided they are certain and such as might naturally be expected to follow the breach. 12 It is here said, that it is only uncertain and contingent profits which the law excludes, and not such as, being the immediate and necessary result of the breach of contract, may be fairly supposed to have entered into the contemplation of the parties when they made it, and are ca- pable of being definitely ascertained by reference to established market rates. This same rule of damages has been applied, in the State of New York, to cases of failure to send messages by tele- graph companies according to their duty and undertaking. 13 11 Opinion of Jervis, C. J., in Me Andrew v. The Eleetric Tel. Co., 33 Eng. L. & Eq. 180, 185 ; s. c. 17 Com. B. 3. 12 Griffin v. Colver, 1G N. Y. R. 489. 13 Landsberger v. Magnetic Tel. Co., 32 Barb. 530. 250 TELEGRAPH COMPANIES. §1896. 19. We do not apprehend there is any valid objection to the application of this rule of damages to the case of telegraph com- panies, on the ground of the secrecy and reserve with which such correspondence is commonly conducted, and that conse- quently the companies have not in most cases any sufficient data to form any just appreciation of the extent of the responsibility. The rule is not based so much upon what is supposed to have been the actual expectation of the parties, as what it ought to have been under the circumstances, if their minds had been drawn towards the contingency of a failure in performance. And if one or both the parties choose to enter into the contract, in such ignorance of the facts as not to have been capable at the time of estimating the real extent of the responsibility assumed, that can be no sufficient ground to exonerate him from the full extent of responsibility attaching to the contract. The rule of responsibility is the same for all who freely enter into the same contract, whether fully or correctly informed of the extent of the obligation or not, provided they are not misled by the opposite party. 20. There is one point decided in a somewhat early case 14 upon this subject, which seems to us exceedingly reasonable ; that if, when the party sending a message for the purchase of goods, learns that by mistake the amount ordered has been en- larged in the transmission of the message, and in consequence his agent has purchased many times more than he directed, he still retains the whole amount purchased, he cannot recover any loss which accrues beyond what would have been experienced upon an immediate sale ; and if he sends the commodity to an- other market for purposes of speculation, with the intention of taking to himself the profits, if any should arise, and in the event of loss visiting it upon the company, he cannot recover for any loss sustained. For, by adopting the purchase in that mode, he makes the act of the company in transmitting the message enlarged, his own, and he cannot accept the excess purchased both for himself and the company at the same time. He must elect at the time, whether to regard the excess of the order as purchased for himself or the company, and dispose of it accord- 14 Washington & New Orleans Tel. Co. v. Hobson, 15 Gratt. 122. §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 251 ingly. The points decided in the last case cited will repay re- peating here, as they have a very sensible bearing upon ques- tions of damage arising in this class of actions. 15 15 In an action against a telegraph company for damages sustained by the plaintiffs by the alteration of a message sent on their line, wherein- an order to the plaintiffs' factors in Mobile to buy 500 bales of cotton was altered to 2,500, but not charging negligence in the company, an instruction that the defendants are not responsible as common carriers, but only as general agents, for such gross negligence as in law amounts to fraud, is not authorized by the pleadings, and properly refused. In such case the factors having bought 2078 bales of cotton before the mistake in the message was ascertained, if the company is liable to the plaintiffs for the damages resulting from the alteration of the message, the commissions of the factors upon the purchase of the cotton are a part of the damages for which the company is liable, and the plaintiffs are not bound to accept any offer of the company to pay the damages which excludes these commissions. In such case if the company is liable to the plaintiffs for damages arising from the alteration of the message, the measure of these damages is what was lost on the sale at Mobile of the excess of the cotton above that ordered, or, if not sold there, what would have been the loss on the sale of the cotton at Mobile in the condition and circumstances in which it was when the mistake was ascertained ; including in such loss all the proper costs and charges thereon. When the mistake was ascertained, a part of the cotton was on board a ship to be sent to Liverpool; a part was under a contract of affreightment to the same place, but not on board. The whole should have been sold as it was at Mobile ; the plaintiffs having sent it to Liverpool and sold it there, the loss to the company must not be increased by this act of the plaintiffs, but must be based upon an estimate of what it would have sold for, — a part on shipboard, and a part under contract of affreightment. If the plaintiffs sent the cotton to Liverpool for purposes of speculation, with the intention of taking to themselves the profits, if there were any, and, in the event of a loss, visiting the loss upon the company, they are not entitled to re- cover for any loss sustained upon it. But if the plaintiffs sent the cotton to Liverpool, not with a purpose of taking the profits, if any, but only indemnify themselves out of the proceeds to the extent of the cost and the obligations incurred by them, they do not thereby lose their right to recover from the company the damages which they would have sustained if the cotton had been sold at Mobile. The plaintiffs, if they intended to hold the company responsible for the excess of the cotton purchased, should, as soon as they were apprized of the purchase, have notified the company of such intention ; should have made a tender of such excess to the company on the condition of its paying the price and all the charges incident to the purchase ; and also, that, in case of its refusal to accept said tender and comply with its conditions, they would proceed to sell such excess at Mobile, and after crediting said company with the net profits, would 252 TELEGRAPH COMPANIES. §1896. 21. There are some manuscript cases bearing upon the ques- tion of damages in actions against telegraph companies for de- fault in transmitting messages, which it may be well to state. 16 In the former of these cases it is said to have been held, that where a merchant in New York ordered a message sent, " Stop sewing pedal braid till I see you," and it was delivered, " Keep sewing," &c, and from the error a large quantity of braid was manufactured into unfashionable shape, which the merchant re- ceived and disposed of in the best manner, that he was entitled to recover the whole loss sustained in consequence of the error. And the same rule was adopted in the case secondly cited above. 16 22. Where the statute imposes a penalty for refusing to send a message across the line of the company, to be received by the person contracting, it was held that, where one directed a mes- sage sent by one company to a point beyond their own line, and the first company, at the end of their line, tendered the message to the next company on the line for transmission, which was re- fused, such person was not the person contracting or offering to contract with the second company ; but that the action to re- look to it for the difference between the amount of such proceeds and the cost of the excess, including all proper charges. And upon the failure of the com- pany after notice to accede to their offer, they should have proceeded accord- ingly. Washington & N. O. Tel. Co. v. Hobson & Son, 15 Gratt. 122. 10 Lockwood v. Independent Line of Tel. Co., New York Com. Pleas, Nov. 18G5, before Judge Daly, a judge of learning and experience, and whose de- cisions always have weight when authoritatively reported. There is a case reported in 1 Upper Canada Law Journal, N. S. 24 7, as decided in the Common Pleas, New York, by the name of Rittenhouse v. The Independent Line of Telegraph, where it was said to have been held that a telegraph company is not excused from liability for an erroneous transmission of a message, by the fact that its meaning was unintelligible to the company, so long as the words were plain. It is also here reported to have been held, that, when an order is sent by telegraph for the purchase of one article, and by a blunder of the operator the despatch is made to read as an order for another, the company must make good any difference between the price paid for the article actually ordered, if purchased as soon as the error is discovered, and the price at which it could have been purchased when the despatch was received. But the company is not liable for a loss upon a resale of the article under the er- roneous despatch, unless the company has had fair notice of such resale. Leo- nerd & Burton v. N. Y., Albany, & Buff. Tel. Co., fifth Dist. Sup. Court. § 1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 253 cover the penalty should have been in the name of the first com- pany. 17 23. In England, and in many of the American states, tele- graph companies are required to serve all who desire it, on such reasonable terms as shall be prescribed by the company for the regulation of their business, making no discrimination or prefer- ence in favor of or against any one. But it was held, that where one contracted with a telegraph company to collect public intel- ligence and send it over their line exclusively ; the company to pay him fifty per cent, of the charge of transmission for collect- 17 Thurn v. Alta Tel. Co., 15 Cal. R. 472. The case is thus stated at length: Where a telegraph company fails to transmit a message upon compliance, by the person contracting with it, with the conditions required by § 154 of the act of 1850 (370), an action for the penalty given by the act lies in favor of such person. The sum to be recovered is a penalty for the breach of the duty to transmit the message, and the act is, in this section, a penal law, to be strictly construed. Under the above section the person entitled to recover the penalty is the party who contracts, or offers to contract, for the transmission of the despatch. He may probably do this by his agent or servant, but when the contract is made by a party as agent of another, in order to give a right of action to the principal, the fact of agency must be shown. Proof as follows : '' I am Superintendent of the California State Telegraph Company, and operator in their office at San Francisco. July 2nd, Plaintiff came to our office and delivered a message, to be transmitted to Jackson, and paid for transmitting it there. The message was, ' Alta Express Co., Jackson. If you have package for me, forward immediately. Signed, C. Thurn.' In the margin of the message sent were the words ' F. July 2nd.' Few words passed when the message was delivered ; no express agreement that the Cal. State Telegraph Company should forward the message to Sacramento, and employ the Alta California Telegraph Company to transmit it from there to Jackson. He must have known that we could not send it to Jackson, as we had no line there. I think there was something said about sending it by the defendants' line from Sacramento." C. Thurn, the plaintiff, sues the Alta Cal. Telegraph Co. for the penalty under the 154th section of the act of 1850 (370). Held, that under these facts he is not the person making or offering to make the contract, within the meaning of the act, and cannot recover ; that the only con- tract proven is a contract by the State Telegraph Company to send the message or have it sent ; and a contract on its part to contract on its own account with the Alta Telegraph Co. to send the message. If the message in this case had not been transmitted, plaintiff might have held the State Telegraph Co. responsible. Thurn v. Alta Telegraph Co., 15 Cal. R. 472. 254 TELEGRAPH COMPANIES. § 189 b. ing it, or in other words, to transmit it for half price ; it was held that this was no violation of the English statute, requiring companies to do business for all, " without favor or preference," it being regarded by the court as a legitimate mode of compen- sating the party for collecting the intelligence, and for bringing custom to the company. 18 And it has also been decided, that the statutory prohibition against disclosing the secrets of the office or communicating messages, does not extend to a disclosure as a witness in a court of justice. 10 The wonder is that any one should ever have supposed that such a disclosure could incur a penalty under the statute. 24. There are some few other points, of rather a miscellaneous character, which have been decided in regard to the rights, du- ties, and liabilities of telegraph companies, which we shall state very briefly. 1. We have already noticed some cases bearing upon the rel- ative rights, pertaining to highways and telegraph companies, under the subject of Eminent Domain and Highways. It seems to be settled in England, that placing telegraph posts in the highway without legislative authority, will be ordinarily treated as a nuisance, unless placed in some position inaccessible to or- dinary travellers, even when not placed in the travelled or cen- tral portion of the highway. 20 So, also, when a telegraph com- pany without any parliamentary powers laid down their wires in tubes under a highway, an information and bill was filed, complaining of this as a nuisance to the public, and an invasion of the rights of the adjacent land-owner. But the court refused to grant an injunction until the rights of the parties had been established at law. 21 2. And where telegraph companies are allowed by legislative grant to lay down their lines along a highway, they are still bound to see that no injury happens to passers along the high- way, from the defective or imperfect condition of the instru- 18 Reuter v. Electric Tel. Co., Ellis & Bl. 341. 19 Ilenisler v. Freedman, 2 Parsons, 274. 20 Reg. i>. United Kingdom E. Telegraph Co., 9 Cox, C. C. 174 ; s. c. 6 L. T. N. S. 378 ; s. c. 31 L. J. N. S., Magistrates cases ; ante, § 109. 21 Attorney-General v. The United Kingdom Electric Telegraph Co., 30 Beav. 287 ; s. c 8 Jur. N. S. 583. §1896. THEIR RIGHTS, DUTIES, AND RESPONSIBILITIES. 255 ments used by them, whether posts or wires. 22 It was here de- cided, that in such cases the company will be responsible for damages to an individual, caused by the erection of the telegraph along the highway, if improperly made, or if suffered to fall down and be out of repair, although the travelled part of the way is not thereby obstructed. In this case the plaintiff was a passenger upon a stage coach, which was upset by coming in contact with the wires of the company, in consequence of the decay and swaying over of the posts and the lowering of the wires thereby, although not across the travelled part of the highway. 3. In one case 23 the plaintiffs were the owners of a telegraph cable lying at the bottom of the sea between England and France. The defendants were aliens, and their ships, while sailing upon the high seas, more than three miles from the English coast, lowered an anchor and injured the cable. It was held that the court would presume that the masters of the ship knew of the existence and situation of submarine cables, and that a duty was thereby cast upon all masters of ships to manage their vessels so carefully and skilfully as to avoid (if possible, by the exercise of reasonable precaution) injuring these cables. 4. The extent of the duty of maintaining secrecy among the operatives and employees of the telegraph companies whose em- ployment brings them acquainted with the contents of messages sent or received, is of great importance. This is in many of the states secured by the imposition of penalties for disclosure. But we apprehend that no security will be available in any such sense as to render this mode of communication safe and comfortable, unless it be cither the religious sense of duty, or at the least a sense of moral honesty and honor, which should lead one to speak the truth and to keep the truth, when that be- comes a duty. 24 There can be no question of the duty of the 22 Dickey v. Maine Tel. Co., 4G Me. R. 483 ; s. c. 8 Am. Law Reg. 358. 23 Submarine Tel. Co. v. Dickson, 15 C. B. N. S. 750; s. c. 10 Jur. N. S. 211. 24 It has been observed of late that women are more generally employed in telegraph offices than formerly, and especially on the other side of the Atlantic. This has been attributed to the higher sense of truth and honor among that sex than the other. The same thing leads many to employ women as cashiers in places where it is impossible to place any check upon them. The same reason 25G TELEGRAPH COMPANIES. § 189&. most inviolable secrecy in regard to all messages sent or re- ceived by telegraph companies. And unless this can be secured it will very essentially abridge the extent of "their business. There is a duty in all employments to keep the secrets of the business, but more especially in one where such extensive cor- respondence is conducted.' 25 5. There is one decision in regard to these companies by the Supreme Court of Nova Scotia 20 which has more bearing upon the question of currency than any other. By the terms of the lease of the plaintiffs' line to the defendants payments are to be made for rent in " dollars and cents of United States cur- rency." A question arose whether the treasury notes, made lawful money in the United States by subsequent act of Con- gress, could be regarded as coming fairly within the terms of the lease, the value of the United States currency being thereby greatly depreciated. The court held that notes were not a legal tender on the lease for rent. This decision unquestionably meets the equity and justice of the case, but whether it meets the law is, perhaps, more questionable. We have come to re- gard that act as entirely within the constitutional powers of Con- gress, although a most awfnl experiment to visit upon a com- mercial country like our own, and one which foreign courts would look upon as altogether inadmissible under the circum- stances in which it was adopted. But if its adoption was doubt- ful, its continuance seems more so, after the emergency which called it into existence has passed away. has been assigned for employing women in highly responsible places in the Treas- ury department since the manufacture of so much of the currency of the country there. This is not the place to discuss questions of that character. 25 In Tipping v. Clark, 2 Hare, 393, Wt'gram, Vice-Chancellor, said, that every clerk employed in a merchant's counting-house is under an implied contract that he will not make public that which he learns in the execution of his duty as clerk. See also Prof. Dwight's excellent article on the law of this subject. 4 Am. Law Keg. 193, 206, and cases cited on this point. We desire here to make our acknowledgments for great assistance from that article in preparing our own chapter on the topic. 26 The Nova Scotia Tel. Co. v. Am. Tel. Co., 4 Am. Law Reg. N. S. 3C5. § 70. CORPORATE FRANCHISES CONDEMNED. 257 for the legislature, under the right of eminent domain, to grant authority to a railway corporation, to take a highway longitudi- nally in the construction of their road. The power of eminent domain is a high prerogative of sovereignty, founded upon pub- lic exigency, according to the maxim, Sains reipublicce lex su- premo, est, to which all minor considerations must yield, and which can only be limited by such exigency. The grant of land for one public use must yield to that of another more urgent." 8 5. The great question of the inviolability of corporate fran- chises, which we shall have occason to discuss more at large hereafter, 9 is, no doubt, to a certain extent, involved here. For, upon general principles of legislative authority, there could be no question that a corporation, which is the mere creature of the legislature, might be, at once and unconditionally, extinguished, by repeal of the charter. This is confessedly within the power of the legislative authority of the British parliament ; and the legislative authority of the parliament of Great Britain is no more extensive than that of the * legislatures of the American states, aside from restrictions contained in the constitutions of the United States, and of the several states. 10 6. The only limitation upon this power over private copora- tions, in most of the states, perhaps in all, is found in that pro- vision of the United States constitution which prohibits the legislatures of the several states from passing any law impairing the obligation of contracts. And the proper limits of this re- striction, in regard to corporations, is not altogether well de- fined, in the different opinions of the several judges of the supreme national tribunal upon this subject ; nor is there any- thing approaching unanimity among them. 7. But it may perhaps be regarded as settled, for the time at least, that where exclusive privileges are conferred upon private 8 Springfield v. Conn. River Railw., 4 Cush. 63. See also upon the general subject, Chesapeake & Ohio Canal Co. v. Baltimore & Ohio Railw., 4 Gill & Johns. 1 ; Forward v. Hampshire & Hampden Canal Co., 22 Pick. 462, where the prior company is held bound by acquiescence in the transfer of its franchises to another company. Irvin v. Turnpike Co., 2 Penn. R. 466 ; Rogers v. Brad- shaw, 20 Johns. 735 ; Backus v. Lebanon, 11 N. H. R. 19. • Post, § 231. 10 Dartmouth College v. Woodward, 4 Wheat. 518. vol. i. 17 * 131 258 EMINENT DOMAIN. § 70. corporations, by express words, or necessary implication, the grant is irrevocable and inviolable. But that the grant of any privilege or franchise carries no implied exclusion, of similar privileges and franchises being conferred upon other persons, natural or corporate. 11 8. The legislature may in all instances determine, when and where the public necessities require additional facilities, of a similar or analogous character, where the former grant is not exclusive. 11 9. And in some cases of exclusive and perpetual grants, for common highways or bridges, it has been held, that this did not preclude the legislature from granting railways and railway bridges within the limits of the former grant. 12 In the last case referred to, the court held, that a perpetual grant of a toll- bridge across the Cape Fear River, which in terms subjected all persons to a penalty for transporting persons or property across that river in any other manner, within six miles of the plaintiff's bridge, would not subject the defendants' company to the penalty for carrying persons and property across the river, upon their road, by means of a bridge erected within the six miles ; that the grant was intended to be exclusive only, as to all modes of travel and * transportation then known, but not to exclude all improvements thereon, in all future time. 13 10. But the exclusive character of a corporate grant will not preclude the power to take the franchise, upon making compen- sation, under the right of eminent domain, the stipulation in the charter, that the grant shall be exclusive of all others, being sub- ject to the same law of other property, whether in possession or action ; all which is confessedly subject to the exercise of the right of eminent domain, by the sovereign. 11 11 Charles River Bridge v. Warren Bridge, 11 Pet. 420; Thorpe v. Rut. & Bur. Railw., 27 Vt. R. 140 ; Boston & Lowell Railw. v. Salem & Lowell Railw., 2 Gray, 1 ; Mohawk Bridge Co. v. Utica & Seh. Railw., 6 Paige, 554 ; Hudson & Delaware Canal Co. v. New York & Erie Railw., 9 Paige, 323. 13 McRee v. "Wilmington & Raleigh Railw., 2 Jones Law, 18G. But see En- field Bridge Co. v. Hartford & New H. Railw., 17 Conn. R. 40, 454. 13 But this distinction is certainly not attempted to be maintained, jn the ma- jority of the cases upon this subject, either in England or in this country. Post, § 231 et seq. 14 Enfield Toll Bridge Co. v. Hartford & New Haven Railw., 17 Conn. R. * 132 § 70. CORPORATE FRANCHISES CONDEMNED. 259 11. It has sometimes been characterized, as a refinement or an invasion, to identify the covenant, in the charter of a private corporation, that the grant shall be exclusive of all others, with the charter itself, and thus subject it to the law of eminent do- main. But it seems to us entirely a sound view, in all cases where the whole franchise of the corporation is proposed to be taken, and that the charge of refinement is rather to be laid at the door of such as attempt to raise a distinction between the exclusiveness of the grant and the grant itself, in order to pre- serve the inviolability of the former, which is the lesser and sub- ordinate franchise, when the latter, and paramount, and vital franchise of a corporation is confessedly subject to the law of eminent domain. 15 12. It is intimated in West River Bridge Company v. Dix, by Woodbury, J., that if the charter of the corporation contained an express stipulation against the exercise of the right of emi- nent domain upon the corporation, this might secure the fran- chise. But this is certainly not the prevailing opinion. 16 40 and 454. This doctrine has been so repeatedly asserted in all the courts of the country, that it seems scarcely requisite to multiply references. And the right to take the franchise of another corporation, by parity of reason, carries the right to impair another franchise to any extent, upon making indemnity. Matter of Kerr. 42 Barb. 119. 15 West River Bridge Co. v. Dix, 16 Vt. R. 446 ; s. c. 6 Howard (U. S.), 507,539, Opinion of Woodbury, J. : who argues that it is difficult to compre- hend why the exclusiveness of the grant to a private coloration should, upon principle, be any more inviolable by legislative authority than any other part of the corporate franchise. It is only as property that it is valuable, or that it is protected at all. And all property is, in cases of proper necessity, subject to the law of eminent domain. It is very questionable whether this law should be held to extend to those portions of public works which may always be obtained in the market, and where, by consequence, there is no practical necessity. 18 In regard to the right of eminent domain, it seems now to be conceded, that no legislature, upon any consideration or pretence whatever, can deprive a fu- ture legislature of its exercise, in the absolute annihilation of corporate fran- chises, upon just and adequate compensation. In Backus v. Lebanon, 11 N. Hamp. R. 19, Parker, Ch. J., says : "Had the charter contained an express stipulation, that the property of the corporation should never be taken, in the exercise of the power of eminent domain, the question would at once have arisen, whether it was competent for any legislature to make a contract of that char- acter ; whether any legislature has authority, by contract, to lay restrictions upon this power." And reference is here made to Piscataqua Bridge v. New 260 EMINENT DOMAIN. § 70. 13. The fee of the streets of a city, where it has been ac- quired by the municipality under the right of eminent domain, Hampshire Bridge, 7 N. Hamp. R. 35, 69, as containing the views of the court upon the subject. See also Brewster v. Hough, 10 N. Hamp. R. 138 ; Northern Railw. v. Concord & Claremont Railw., 7 Foster, 183, 195. The remarks of the late Professor Greenleaf, in his addition of Cruise, vol. 2, tit. 27, § 29, in note, p. 67, 68, upon this important subject, seem altogether worthy of commendation, and their insertion here will require no apology. " But in regard to the position, that the grant of the franchise of a ferry, bridge, turn- pike, or railroad, is in its nature exclusive, so that the state cannot interfere with it by the creation of another similar franchise, tending, materially to impair its value, it is with great deference submitted, that an important distinction should be observed between those powers of government which are essential attributes of sovereignty, indispensable to be always preserved in full vigor, such as the power to create revenues for public purposes, to provide for the common defence, to provide safe and convenient ways for the public necessity and convenience, and to take private property for public uses, and the like, and those powers which are not thus essential, such as the power to alienate the lands and other property of the state, and to make contracts of service, or of purchase and sale, or the like. Powers of the former class are essential to the constitution of so- ciety, as without them no political community can well exist ; and necessity re- quires that they should continue unimpaired. They are intrusted to the legis- lature to be exercised, not to be bartered away ; and it is indispensable that each legislature should assemble with the same measure of sovereign power which was held by its predecessors. Any act of the legislature, disabling itself from the future exercise of powers intrusted to it for the public good, must be void, be- ing in effect a covenant to desert its paramount duty to the whole people. It is therefore deemed not competent for a legislature to covenant, that it will not under any circumstances open another avenue for the public travel within cer- tain limits, or a certain term of time ; such covenant being an alienation of sov- ereign powers and a violation of public duty. " But if, in order to provide suitable public ways, the state has availed itself of private capital, and secured its reimbursement by the grant of a charter of incor- poration, with the right to take tolls for a limited period ; and the public necessity should afterwards require the creation of another way, the opening of which would diminish the profits of the first, and so prevent the corporators from receiv- ing the compensation intended to be secured to them ; the state, thus sacrificing the private property of the corporation for public uses, would unquestionably be bound, as a sacred moral duty, to make full indemnity therefor in some other mode. " All those grants of franchises, therefore, which are in derogation of the es- sential attributes of sovereignty above mentioned, are to be construed strictly ; and nothing is to be taken by implication. It was on this ground that the case of the Warren Bridge was decided. The legislature had granted a charter for the building of the Charles River Bridge, with the right of receiving tolls, and § 70. CORPORATE FRANCHISES CONDEMNED. 261 becomes a public trust for general public purposes, and is under the unqualified control of the legislature, and any legislative ap- propriation of it to public use is not be regarded as the appro- priation of private property, so as to require compensation to the city or municipality to render it constitutional. 17 The mere pos- sibility of reverter to the original owner, or his heirs or grant- upwards of forty years afterwards, the public exigency requiring another and free avenue between the same places, an act was passed authorizing the erection of the Warren Bridge, a few rods from the former, the opening of which, as a natural consequence, reduced the tolls of the former to a very small amount. And this act was held to be not unconstitutional. Charles River Bridge v. Warren Bridge, 11 Peters, 420, cited, and its reasoning affirmed, in Butler v. Pennsyl- vania, 10 How. (S. C.) 402 (1850) ; Woodfolk v. Nashville, &e. Railw. Co., 1 Am. L. Reg. 520. [See also Matter of Hamilton Avenue, 14 Barb. Sup. Ct 405 ; Illinois and Michigan Canal v. Chicago and R. I. Railw. Co., 14 111. R. 314 ; Rundle v. The Delaware and R. Canal Co., 14 How. (U. S.) 80; 13 lb. 71 ; 10 lb. 511, 541 ; Shorter v. Smith, 9 Ga. R. 517.] " The learned chancellor Kent, in a note appended to the case of 11 Pet. 420, deeply regrets that decision, concurring in the opinion of Mr. Justice Story, who dissented from it. But against the weight of the opinion of this great judge may be placed that of the late Chief Justice Marshall, the writer having been in- formed, as a fact within the personal knowledge of the informant, that the chief justice held the charter of Warren Bridge constitutional, upon the first argument of the cause ; and that it was on account of this division of the bench that a sec- ond argument was ordered, which he did not live to hear. And it is worthy of notice, in this connection, that Mr. Justice Story, in delivering his dissenting opinion in the same term, in the case of Briscoe v. The Bank of the Common- wealth of Kentucky, 11 Pet. 328, supports it by referring to a similar opinion held by the late chief justice, upon the former argument of that cause ; while in the case of Warren Bridge no such support is invoked ; doubtless for the reason that it could not be had. " The state being bound in good faith, as already stated, to make full and com- plete indemnity to individuals, whose private rights, in the exercise of its eminent domain, it has been obliged to sacrifice for the general good, the question is re- duced to the mode of compensation ; whether actual payment of the damages must precede or accompany the act of the state ; or wdiether the individual ought to have at least a compulsory remedy at law ; or whether the pledge of public faith is a sufficient security. On this subject various opinions are held. See 2 Kent, Comm. 338-440, and note (c) on p. 339, 5th ed. ; 11 Pet. 471,472, G42, 643; The People v. White, 4 Law Rep. (n. s.) 177." See also, to the same effect, the opinion of Mr. Justice Grier, of the United States Circuit Court, in Milnor v. The New J. Railw., 6 Law Reg. G, 7 ; and Crosby v. Hanover, 20 Law Rep. G4G ; s. c. 36 N. H. R. 404. 17 People v. Kerr, 27 N. Y. R. 188. See arso Philadelphia & Reading Railw. v. City of Philadelphia, 47 Penn. St. 325. 262 EMINENT DOMAIN. §71. ees, is not regarded in such cases as any appreciable interest re- quiring to be compensated. 17 *SECTION ij{ Compensation. — Mode of Estimating. 1. General inquiry simple. 2. Remote damage and benefits not to be con- sidered. 3. General rule of estimating compensation. 4. Prospective damages assessed. 5. In some states value "in money" is re- quired. 6. 7. Damage and benefits cannot be consid- ered in such cases. 8. Rule of the English statute. 9. Farm accommodations. 10. Benefits and damage, if required, must be stated. n. 10. Course of the trial in estimating land damages. 1 1 . Items of damages not indispensable to be stated. 12. In contracts for land statutory privileges must be stated to be secured. 13. Questions of doubt referred to experts. 14. Special provisions as to crossing streets only permissive. 15. In an award of farm accommodations time of the essence of the award. §71. 1. The inquiry in regard to what compensation shall be made, for land taken for public works, would, on the face of it, * seem to be a very simple one. One would naturally suppose the value of the land taken or the damage sustained, to be the fair * measure of compensation, and that there could be no seri- ous difficulty in ascertaining the amount. 2. But in consequence of numerous ingenious speculations in regard to possible advantages and disadvantages arising from the public works, for which lands are taken, the whole subject has become, in this country especially, involved in more or less uncertainty. All the cases seem to concur in excluding mere general and public benefit, in which the owner of land shares in common with the rest of the inhabitants of the vicinity, from being taken into consideration in estimating compensation. 3. It has been said, the appraisers are not to go into conjec- tural and speculative estimations of consequential damages, 1 but 1 Meacharn v. Fitchburg Railw., 4 Cusb. 291 ; Upton v. South Reading Branch Railw. Co., 8 Cusli. GOO; Albany N. Railw. Co. v. Lansing, 1G Barb. 68 ; Canandaigua & N. Railw. v. Payne, 16 Barb. 273 ; Greenville & C. Railw. Co. v. Partlow, 5 Rich. 428; White v. Charlotte & S. C. Railw. Co., G Rich. 47; A. & S. Railw. Co. v. Carpenter, 14 Illinois R. 190; Syrnonds v. The *133-135 §71. COMPENSATION. — MODE OF ESTIMATING. 263 confine themselves to estimating the value of the land taken to the owner. This is most readily and fairly ascertained, by de- termining the value of the whole land, without the railway, and of the portion remaining after the railway is built. The differ- ence is the true compensation to which the party is entitled. 2 * 4. But the appraisers are to assess all the damages, present and prospective, to which the party will ever be entitled, by the prudent construction and operation of the road. 3 City of Cincinnati, 14 Ohio R. 147; Brown v. Cincinnati, Id. 541; Mclntire v. State, 5 Blackford, 384 ; State v. Digby, 5 Blackf. 543; James River & Kan- awha Co. v. Turner, 9 Leigh, 313; Schuylkill Co. v. Thoburn, 7 Serg. & R. 411. A jury may take into the account, in estimating the damages, the effect the construction of the railway will have in diminishing deposits of sediment, which had been made by a river, in high water flowing upon the land and greatly enriching it. Concord Railw. v. Greeley, 3 Foster, 237. And the de- terioration of the adjacent parts of the same land, (but which are not taken,) either for agriculture, or sale for building lots ; by risk from fire, care of family and stock, inconvenience caused by embankments, excavations, and obstructions to the free use of buildings, is to be taken into the account, in estimating dam- ages. Somerville & E. Railw. v. Doughty, 2 Zab. 495. The increase or de- crease in the price of the remaining land, and the expense of fencing, are to be taken into the account, in assessing compensation. Greenville & Columbia Railw. v. Partlow, 5 Rich. 428. The value of the land taken, considering its re- lation to the land from which it is severed, is to be given, and such further sum as the incidental injury to the land not taken, from the construction of the road, exceeds the incidental benefits. Nashville Railw. v. Dickerson, 17 B. Mon. 173, 180. Louisville & Nash. Railw. v. Thompson, 18 Id. 735. 2 Troy & Boston Railw. v. Lee, 13 Barb. 169, 171; Matter of F Street, 17 Wend. 649; Canal Co. v. Archer, 9 Gill & J. 480; Parks v. City of Boston, 15 Pick. 198 ; Somerville Railw. v. Doughty. 2 Zab. 495. But no account is to be taken, in estimating land damages, of the benefit the railway may have been to other property of the plaintiff, disconnected with that taken. Railw. v. Gil- son, 8 Watts, 243 ; but see Columbus, P. & I. Railw. v. Simpson, 4 Law Re<*. 696 ; s. C. 5 Ohio St. 251 ; Rochester & Sy. Railw. v. Budlong, 6 How. Pr. 467 ; Sater v. B. & Mt. PI. Railw., 1 Clarke, 386. The value of the land, at the time of trial, or at any time subsequent to the construction of the work, cannot be referred to in determining the benefits conferred upon that portion of the land not taken. Ind. Central R. v. Hunter, 8 Ind. R. 74. 3 Dearborn v. Boston, Concord, & Montreal Railw. Co., 4 Foster, 179. Clark v. Yt. & Canada Railw., 28 Vt. R. 103. The expense of fencing is to be in- cluded in the estimate of land damages. Winona & St. Peter Railw. Co. v. Denman, 10 Minn. R. 267. The matter of estimating land damages to the owner of a farm, a portion of which is taken for the construction of a railway, is *136 264 EMINENT DOMAIN. § 71- 5. Some of the state constitutions in terms provide, that com- pensation for private property, taken for public use, shall be made " in money," and many eminent jurists have strenuously maintained that compensation, to the extent of the value of the land taken, must always be made in money, and that no deduc- tion can be made, on account of any advantage which is likely to accrue to other property of the owner, by reason of the public work, for which the property is taken. 4 Such accidental advan- tages to the portion of land not taken as drainage by means of cuts in the soil from grading the railway cannot be taken into account. 6 6. In a late case in Vermont the court held, that taking land for a public highway is not appropriating it to public use, within the meaning of the constitution of that state, which requires compensation in such cases to be made " in money," but that this provision only applies, where the fee of the land is taken ; and that where an easement only is taken for the purpose of a highway, and the remaining land is worth more than the whole discussed very much in detail and with a very considerate regard to the equita- ble interests of all parties in the case of Robbins v. Milw. & Hor. Railw. Co., 6 Wis. R. 636. Damages done to mill property in lessening the advantages of the water-power, present and prospective, should be taken into the account in estimating land damages. Dorian v. E. Br. & Waynesburg Railw. Co. 46 Penn. St. 520. 4 2 Kent, Comm. 7th ed. 394 and note ; Jacob v. The City of Louisville, 9 Dana, 114 ; The People v. The Mayor of Brooklyn, 6 Barb. (S. C.) 209. But this last case was subsequently reversed in the Court of Appeals. 4 Comst. 419; Rice v. Turnpike Co., 7 Dana, 81; Woodfolk v. N. & C. Railw., 2 Swan, 422. In this case, it was said, benefits to the remaining land may be set off against injury, but the party cannot be compelled to apply such benefits towards the price of his land. Railway v. Lagarde, 10 Louis. Ann. 150. Under such a provision in the constitution of Ohio, it was held, that in assessing damages, the jury had no right to take into consideration the fact, that the value of the land had been increased by the proposal, or construction of the work. Giesy v. Cin. Wil. & Zanesv. Railw., 4 Ohio St. 308. General benefits resulting from the erection of a railway, to all who own property in the vicinity, are not to be taken into the account, in estimating land damages; and it was doubted if special bene- fits, accruing to the remainder of the land, could be so taken into account. Lit- tle Miami Railw. v. Collett, 6 Ohio State, 182. Pacific Railw. v. Chrystal, 25 Mo. R. 544. 5 Evansville and C. Railw. v. Fitzpatrick, 10 Ind. R. 120; Same v. Cochran, Id. 560. § 71. COMPENSATION. — MODE OF ESTIMATING. 265 was before the laying out of the road, the party is entitled to no compensation. 6 * 7. This is certainly not in conformity with the general course of decision upon this subject. It is the only case, proba- bly, where an attempt is made to escape from such a constitu- tional provision, in this manner. Some will doubtless regard it as too refined to be sound. And if it is true, as is sometimes claimed, that the legislature had no right to resume the fee of land for highways and railways, such a constitutional provision, with such a construction, would have little application to the taking of land for such uses. 7 6 Livermore v. Jamaica, 23 Vt. R. 361. This case has been questioned. 1 Bennett's Shelford on Railways, 441. See also Reitenbaugh v. Chester Valley Railw., 21 Penn. St. 100. Contra, McMahon v. Cincinnati Railw., 5 Ind. R. 413 ; 3 Id. 543. Benefits arising to the owner of the land " by the construction of the road " held not to have reference to the whole work, but to that particu- lar portion which runs through the party's land. Milwaukee & Mis. R. v. Eble, 4 Chand. 72. An act which provides for setting off the advantages to other land against the value of the land taken, is not, on that account, unconstitu- tional. McMasters v. Commonwealth, 3 Watts, 292. But it has very often been held, that such accidental advantages, especially where they are not pecu- liar to the particular land-owner, cannot be set off against the specific value of the land taken. State v. Miller, 3 Zab. 383 ; Woodfolk v. Nash. & Ch. Railw., 2 Swan, 422; Hill v. M. & H. Railw., 5 Denio, 206; Keasy v. Louisville, 4 Dana, 154; Sutton v. Louisville, 5 Dana, 28 ; People v. Mayor of B., 6 Barb. 209. But many cases hold the contrary. People v. Mayor of Brooklyn, 4 Comst. 419, where s. c. 6 Barb. 209, is reversed; Rexford v. Knight, 15 Barb. 627. But where profits are to be taken into the account, the title to have them considered obtains, at the time the servitude is located. Palmer Co. v. Ferrill, 17 Pick. 58. Benefits by increase of business and population, markets, schools, stores, and other like improvements, cannot be considered, in estimating damages, for flowing land, by a mill-dam. lb. In a recent case in New Hampshire, petition of the Mount Washington Road Company, 35 N. H. R. 134, it was decided, that in assessing damages for land taken for a turnpike, or free highway, compensation is to be given for the actual value of the land taken, without regard to any speculative advantages or dis- advantages to the owner from the making of the highway. See Cushman v. Smith, 34 Maine R. 247. But in Indiana Central Railw. v. Hunter, 8 Ind. R. 74, the same rule is adopted, as in the case first cited in this note. 7 Hatch v. Vermont Central Railw. Co., 25 Vt. R. 49; Reitenbaugh v. Chester Valley Railw., 21 Penn. St. 100. Contra, Little Miami Railw. v. Nay- lor, 2 Ohio R. N. S. 235. And in a case in Mississippi, Brown v. Beatty, 34 Miss. R. 227, where the constitution required " compensation first to be made " for land *137 266 EMINENT DOMAIN. § 71. 8. The English statute provides, that, in estimating compensa- tion for land damages " regard shall be had not only to the land taken, but also to damage, by reason of severance from other lands, or otherwise injuriously affecting such lands." There are, too, in the English statute, provisions for compensation to sun- dry subordinate interests in lands, as to lessees for years, and to tenants from year to year. And also in regard to mines. The company are not entitled to mines or minerals under lands, ex- cept such parts as shall be necessary to use in the construction of the road, unless expressly purchased. It has been held that stone got from quarries are * minerals, 8 and that mines are quar- ries, or places where anything is dug. 9 By the English statute, taken, it was held the provision secured to the owner the right to receive the cash value in money, and, in addition, full indemnity for all damages by means of severance, and that no enhanced value of the portion of land not taken could be taken into the account. See also Branson v. Philadelphia, 47 Penn. St. 329. Henry v. Dubuque & Pacific Railw. Co., 10 Iowa, 540. It is said in one case, what is very nearly a truism, that corporate existence and the right of eminent domain can only be derived from legislative grant, and that both must be shown to justify taking lands compulsorily, and also compliance with all conditions of the grant, Atkinson v. Marietta & Cin. Railw. Co., 15 Ohio St. 21. Post, § 76. The dedication of land to the use of a street will not authorize the legislature to appropriate it to the use of a railroad track without compensation to the owner, and if this is attempted it may be restrained by injunction. Schurmeier v. St. Paul & P. Railw., 10 Minn. R. 82. And in Whitman v. Boston & Maine Railw., 3 Allen, 133, it was decided that if, by means of the location of a railway over a part of a lot of land, and the filling up of a canal in which the owner had a privilege, the value of the lot was so enhanced that what remained was worth more than the entire lot was before, the owner had no claim for damages, — proof of all the business done upon land is not competent to show its value. lb. 8 Micklethwait v. Winter, 5 Eng. L. & Eq. 526. 9 Hodges on Railways, 238, note (y). The more common mode of estimating land damages unquestionably is, to give the company the specific benefit caused to land, a portion of which is taken, in the enhancing the value of the same, and only to allow the land-owner such a sum as will leave him as well off" in regard to the particular land as if the works had not been built, or his land taken. This is done by giving the land-owner a sum equal to the difference between what the whole land would have sold for before the road was built, and what the remainder will sell for after the construction. Harvey v. Lack. & Bloomsburg Railw., 47 Penn. St. 428. But this rule will, in many cases, prove entirely in- adequate and unsatisfactory, and where it has been adopted it may be regarded as only extending to other cases of a very similar character. Win. & St. Peters' Railw., v. Denman, 10 Minn. R. 267. *138 § 71. COMPENSATION. — MODE OF ESTIMATING. 267 the company may remove or displace gas or water pipes, making compensation to all parties injured. 9. And where commissioners appraise the damages upon the basis of the railway making and maintaining certain works for the accommodation of the land-owner, as a culvert and waste- way, etc., it was held this portion of the award was not void, but if acquiesced in by the company, and the land taken, and com- pensation made upon that basis, they thereby become bound by its provisions. 10 But where it was referred to arbitration to esti- mate the damages caused to the plaintiff, and the company by the express terms of its charter was bound to make suitable crossings for the accommodation of land-owners through whose land the right of way was taken, and the land-owner told the agents of the company, at the hearing before the arbitrators, that he should require a crossing to be provided for his conven- ience ; and the agents claimed that the arbitrators had nothing to do with this matter, and that claim was acquiesced in by the arbitrators and the parties, and the award only embraced the damage to the land, and subsequently the land-owner was in- duced to convey to the company the right of way, without an- nexing a condition binding the company to maintain a crossing for his accommodation ; upon the assurance of the counsel of the company that such deed would not affect his right to claim a crossing, it was held, upon a bill to reform the deed and to establish his right to the crossing, that he was entitled to the relief sought, and an injunction was granted accordingly. 11 But where a private way crossed the line of railway obliquely, and the award of land damages only indicated the point at which the company were to supply a crossing, it was held a sufficient compliance with the obligation of the company to give a crossing at right angles, although this did not connect with the termini of the road or afford any access to it. 12 10. In some of the states in this country, the advantages and disadvantages of taking land for a railway are required to be stated in the report of appraisal, and the omission to make such 10 Morse, Petitioner, 18 Pick. 443. 11 Green v. Morris & Essex Eaihv. Co., 1 Beasley, 165. 12 Mann v. Great S. & W. Railw. Co., 9 Ir. Corn. L. Rep. 105. 2G8 EMINENT DOMAIN. § 71. specific statement was held a fatal omission. 13 So too, where additional * expense of fencing is allowed in improved land, the report must specify that fact. 14 13 Ohio & Pennsylvania Railw. v. Wallace, 14 Penn. St. 245 ; Reitenbaugh v. Chester Valley Railw., 21 Penn. St. 100; R. R. Co. v. Gilson, 8 Watts, 243; Zack v. Penn. Railw. Co., 25 Penn. St. 394. But it has been held, in some cases, where the advantages resulting to the land-owner were to be taken into the ac- count, that the value of the land need not be stated separately from the damage, in an award of arbitrators, but only the amount of the whole injury. At all events, such amendments will be allowed, as to cure such defects. Greenville & Columbia Railw. v. Nunnamaker, 4 Rich. 107. Questions have sometimes been made, in regard to which party, in proceedings of this character, is entitled to go forward, in the proofs and argument. Upon principle, and in analogy to similar proceedings upon other subjects, we think there can be little doubt this right is with the land-owner, in the proceedings be- fore the jury and the commissioners or arbitrators, where he is to all intents actor. But after having obtained an award, it has been more usual, in practice, to allow the excepting party to go forward. 1 Greenleaf's Ev. §§ 76, 77 ; Con- necticut River Railw. v. Clapp, 1 Cush. 559 ; s. c. 1 Am. Railw. C. 450 ; Mercer v. Whall, 5 Q. B. 447. But see Albany N. Railw. Co. v. Lansing, 16 Barb. 68, where the court say, " The commissioners have the right and power to exercise their own dis- cretion in reference to the order that they take in appraising the land. They may view the land first and hear the proofs and allegations afterwards, or vice versa. So whether one party or the other should first be heard is for them to determine. Having decided that the railway corporation might open and close the hearing, the defendant was concluded by their decision, as also would their decision have been conclusive on the company had the same privilege been awarded to the owner of the land." But where the error in the exercise of this discretion does manifest wrong, at nisi prius, the verdict will be set aside for this reason alone in the full bench. 1 Greenleaf's Ev. 104 and note, § 76. But awards of land damages have been set aside for excessive damages. Somer- ville & Easton Railw. v. Doughty, 2 Zab. 495. But this subject was somewhat considered in Troy & Boston Railw. v. Lee, 13 Barb. 169; Same v. Northern Turnpike Co., 16 Barb. 100 ; and it was held that such award should not be set aside, unless it appeared that the commissioners erred in the principles by which their judgment should be guided, or were clearly mistaken in the application of correct principles. This is putting them much upon the same ground as awards in other cases. And in Walker v. Boston & Maine Railw., 3 Cush. 1, it was held, that the common pleas, to whom the verdict of a sheriff's jury is to be returned, and who may set the same aside, for any good cause, were justified in doing so, for irregularity in impanelling the jury ; or in the conduct of the jury ; or in the instructions given the jury by the sheriff; or for facts affecting the 14 New Jersey Railw. v. Suydam, 2 Harrison, 25. * 139 § 71. COMPENSATION. — MODE OF ESTIMATING. 269 11. But in general there is no discrimination made in the report estimating damages for taking land for public works, be- tween the value of the land appropriated and the incidental injury from severance and otherwise ; and unless specially re- quired by the charter of the company or some other legislative act, such discrimination does not seem indispensable to the validity of the report, but would unquestionably, in the major- ity of cases, tend to render the report more satisfactory. 15 12. In contracts between railway companies and land-owners, in regard to farm accommodations, if the company desire to re- tain any special distinction conferred by statute, they must incor- porate the statute, either in terms or by reference, into the con- tract. Otherwise the company will be held strictly to the terms of the contract as applied to the subject-matter. 16 13. Where there is any controversy in regard to the mode of crossing highways and turnpikes by railway companies, the court will refer the matter to men of experience and skill in such questions. 17 • 14. A permission in a railway charter to cross a street or highway by a level crossing, by making a bridge over the street for the accommodation of foot passengers, is not peremptory upon the company. They may still be permitted to cross the street otherwise than on a level on their undertaking to abide by any order the court might make as to damagcs. ls 15. Where land is sold to a railway company upon condition of furnishing such farm accommodations as the land-owner should notify to the company within one month, time is regarded as of the essence of the condition, and if notice is not given within the time limited the court will neither order the company to make such accommodations as are demanded, or even such as are proper. 19 purity, honesty, or impartiality of the verdict ; such as tampering with the jury or other misconduct of the party; or any irregularity or misconduct of the jurors. But in a court of error the verdict can only be set aside for error appearing of record. But see § 72, post ; Nicholson v. New York & New Haven Kailw., 22 Conn. R. 74. 15 Trenton Water Power Co. v. Chambers, 2 Beasley, 199. ,s Clarke v. M. Sh. & L. Railw. Co., 1 Johns. & H. 631. 17 Atty.-Genl. v. Dorset Railw. Co., 3 Law T. N. S. 608. 18 Dover Harbor v. L. C. & Dover Railw. Co., 7 Jur. N. S. 453. 19 Darnley v. London, Chatham, & Dover Railw. Co., 11 Jur. N. S. 520 ; s. c. 9 Id. 148, where the Vice-Chancellor decided otherwise. 270 EMINENT DOMAIN. §72. SECTION X. Mode of Procedure. Legislature may prescribe. Must be upon proper notice. Formal exceptions waived, by appearance. Unless exception is upon record. Proper parties, those in interest. Title may be examined. Plaintiffs must show joint interest. Jury may find facts and refer title to the court. Land must be described in verdict. Distinct finding on each claim. Different interests. What evidence competent. Proof of value of land. . Opinion of witnesses. 15. Testimony of experts. 16. Matters incajiable of description. 17. Costs. 18. Expenses. 19. Commissioners' fees. 20. Appellant failing must pay costs. 21. Competency of jurors. 22. Power of court to revise proceedings. 23. Debt will not lie on conditiomd report. 24. Excessive damages ground of setting aside verdict. Note. Other matters of practice. 25. JYo effort to agree required in order to give jurisdiction. § 72. 1. It seems to be universally admitted, that where the organic law of the state does not prescribe the mode of proced- ure, in estimating land damages, for the use of a railway com- pany, or other public work, it is competent for the legislature to prescribe * the mode, and that the mode, so prescribed, must be strictly followed. 1 2. Thus, it has been held, that notice in writing to the owner of the land to be taken, its situation and quantity, must be given. 2 But the form of the notice, or whether signed by the company, or by the commissioners, is not important. 3 And it is requisite, not only that proper notice should be given, but that it should appear upon the face of the proceedings that the partic- ular notice required, by the statute, was given. 4 But in gen- eral, we apprehend, if it appears upon the proceedings that 1 Bonaparte v. C. & A. Railw., Bald. C. C. R. 205 ; Bloodgood v. M. & H. Railw., 14 Wend. 51 ; s. c. 18 Id. 9 ; s. c. 2 Am. Railw. C. 415. 2 Vail v. Morris & Essex Railw., 1 Zab. 189. But the notice to appoint com- missioners need not describe the land, it is held in other cases. Doughty v. Somerville & Easton Railw., Id. 442. 3 Ross v. Elizabethtown & Somerville Railw., Spencer, 230. 4 Van Wickle v. Railw. Co., 2 Green, 162. See also Bennet v. Railw., Id. 145. * 140 § 72. MODE OF PROCEDURE. 271 notice was given to the land-owner, it might, upon general prin- ciples, be presumed it was the notice required. 3. But merely formal exceptions to the mode of procedure, and the competency of the triers, in such cases, must be taken at the earliest opportunity, where there is an appearance, or they will be regarded as waived. 5 4. And after appeal, it should appear by the record that merely formal exceptions were made in th* proceedings below, and overruled, or they cannot be revised. 5 So, too, where the party, excepting to proceedings before commissioners, applies for a jury to revise the assessment of damages, it will be regarded as a waiver of the exceptions. 5 He should have applied for a certi- orari, if he intended to revise the case upon his exceptions. 5 5. In regard to the proper parties to such proceedings, almost infinite variety of questions will arise. The only general rule which can be laid down, perhaps, is, that those having an in- terest in the question, may become parties plaintiff, or be made parties defendant, according to the character and quality of the interest. 6 *6. In the English courts, it has been held, that these sum- mary tribunals for estimating land damages are not to inquire into the title of the claimants. 7 But in some cases, in this coun- try, it has been held, that the claimant's title to the land is a 5 Fitchburg Railw. v. Boston & Maine Railw., 3 Cush. R. 58 ; s. c. 1 Am. Raihv. C. 508 ; Walker v. Boston & Maine Railw., 3 Cush. 1 ; Pittsfield & North Adams Railw. v. Foster, 1 Cush. 480 ; Field v. Vermont & Massachusetts Railw., 4 Cush. 150; Taylors. County Commissioners, 13 Met. 449; Porter v. County Commissioners, id., 4 79; Meacham v. Fitchburg Railw., 4 Cush. 291; Davis v. Charles River Branch Railw., 11 Cush. 506. Fitchburg Railw. v. Boston & Maine Railw., 3 Cush. 58 ; Ashby v. East- ern Raihv., 5 Met. 368; Greenwood v. Wilton Railw., 3 Foster, 261 ; Parker v. Boston & Maine Railw., 3 Cush. 107 ; Mason v. Railw., 31 Me. R. 215 ; A. & St. L. Railw. Co. v. Cumberland Co. Comm., 51 Me. R. 36. And it seems to be re- garded as indispensable that parties under disability should be properly repre- sented in the proceedings the same as in other suits. Hotchkiss v. Auburn & Rochester Railw., 36 Barb. 600. But where a demand and tender of the value of land required, together with other legal damages, is required before instituting eompulsor)- proceedings, the requirement cannot apply to the case of an infant, whose rights will be sacred till of full age. Indiana Central Railw. Co. v. Oakes, 20 Ind. R. 9. 7 Post, § 98. * 141 272 EMINENT DOMAIN. § 72. proper subject of inquiry, before the jury, in estimating dam- ages. 8 And where the commissioners refuse to allow the peti- tioner damages, on account of his not being the owner of the land, this is such a final decision as may be revised by a jury, and the Supreme Court will allow a mandamus, if that is denied. 9 7. Parties who join must show a joint interest in the land, but this need not always be shown by deed. Oral evidence is sometimes admissible, where one owns the fee, and others have a joint interest, in consequence of erections, and the jury may properly pass upon the title, as matter of fact. 10 8. But the jury are not bound to decide upon conflicting titles, but may report the facts, without determining the own- er. 11 And it has been held that the jury are not bound to find a special verdict, in regard to the title of the claimant, or where there are conflicting claims, but may do so with propriety. 12 9. The jury should describe the land with intelligible bounda- ries. 13 8 Directors, &c. v. Railw., 7 Watts & Serg. 236. Allyn v. Prov. W. & B. Railw., 4 Rhode Is. R. 457. 9 Carpenter v. County Commissioners of Bristol, 21 Pick. 258. The trustee and not the cestui que trust is the proper party to such proceeding. Davis v. Charles River Branch Railw., 11 Cush. 506. The title of the petitioner may be inquired into, either on the return of the petition or of the report. Church v. Northern Central Railw. Co., 45 Penn. St. 339. The mode of proceeding on certiorari and in other rights is here discussed. 10 Ashby v. Eastern Railw., 5 Met. 368. 11 Matter of Anthony Street, 19 Wend. 678. So, too, where one owns the fee, and another has a bond for a deed, the condition of which is not yet performed, they may join. Proprietors of Locks and Canals v. Nashua & Lowell Railw., 10 Cush. 385. 12 Davidson v. Boston & Maine Railw., 3 Cush. 91 ; 1 Am. Railw., C. 534. The sheriff is bound to give the jury definite instructions, in regard to the effect of a conveyance. Id. 13 Vail v. Morris & Essex Railw., 1 Zab. 189. But see Philadelphia Railroad v. Trimble, 4 Whart. 4 7. The jury are not to include in their estimate the ex- pense of farm accommodations, which it is the duty of the railway to furnish. Id. But if this be done, and the party have judgment on the verdict, he is bound to make the erections. Curtis v. Vermont Central Railw., 23 Vt. R. 613. One tenant in common cannot proceed in his own name to have the damages done, by a railway, to the common land, assessed, even where he has authority from his co-tenant to do so. Railw. v. Bucher, 7 Watts, 33. But if the petition be signed by the lessee and the agent of the owner of mines, § 72. MODE OF PROCEDURE. 273 * 10. Where the claim for damages consists of several items, it is more conducive to a final disposition of the case to state the finding upon each item. In such case any objectionable item may be remitted or deducted without the necessity of a rehearing. 14 11. But where the petition alleges several distinct causes of damage, and a general verdict is rendered, if one or more of the causes is insufficient, it will not be presumed the jury gave any damages, on such insufficient claims, in the absence of any in- structions by the sheriff in relation to them. 15 But it is not ne- cessary to apportion the damages to several joint-owners, and a tenant for life may take proceedings to obtain damages done to his estate by the construction of a railway, without joining the remainder-man. 16 12. The character of the proof admitted to enable the triers to learn the value of land is so various, that it is not easy to fix any undeviating rule upon the subject. It seems to have been the intention of the courts to allow only strictly legal evidence to be received, such as would be admissible in the trial of simi- lar questions before a jury in ordinary cases. 17 13. It has been allowed to show what price the company had paid by voluntary purchase for land adjoining, but in the same case it was held not competent to inquire of adjoining land-own- ers, who were farmers, and had occasionally bought and sold this is a sufficient representation of the interest. Harvey v. Lloyd, 3 Penn. St. 331. See also Shoenberger v. Mulhollan, 8 Penn. St. 13'4. See also Cleveland & Toledo Railw. v. Prentice, 13 Ohio St. 373 ; Strang v. Beloit & M. Railw. Co., 16 Wise. R. 635. It is here said that the description, by way of an approx- imating diagram, may be sufficient without an actual survey. 14 Fitchburg Railw. v. Boston & Maine Railw., 3 Cush. 58 ; S.C.I Am. Railw. C. 508. ,& Parker v. Boston & Maine Railw., 3 Cush. 107. 16 Railroad r.Boyer, 13 Penn. St. 497 ; Directors of Poor v. Railw., 7 Watts & Serg. 236 ; Pittsburgh & Steuben Railw. v. Hall, 25 Penn. St. 336. In one case it was said to be the duty of the commissioners to assess damages to joint owners, jointly. Ross v. Elizabethtown & Somerville Railw., Spencer, 230. See also Colcough v. Nashville & N. W. Railw. Co., 2 Head. 171. 17 Troy & Boston Railw. v. Northern Turnpike Co., 16 Barb. 100 ; Johnson, J., in Rochester & Syracuse Railw. v. Budlong, 6 How. Pr. 467 ; Lincoln v. Saratoga & Schenectady Railw., 23 Wend. 425, 432. vol. I. 18 * 142 274 EMINENT DOMAIN. § 72. land, what was the value of their own land adjoining. 18 Nor is it competent to show for what price one had contracted to buy land adjoining. 19 Nor can the claimant prove, what the com- pany have offered him for the land; 20 nor what the company have been * compelled to pay for land adjoining, which was taken compulsorily. 21 14. And it has been held that witnesses cannot be allowed to give their opinion of the value of the land or materials taken. 22 18 Wyman v. Lexington & "West Cambridge Railw., 13 Met. 316. 19 Chapin v. Boston & Providence Railw., 6 Cush. 422. 20 Upton v. South Reading Railw., 8 Cush., 600. 21 White v. Fitchburg Railw., 4 Cush. 440. Only such damages as are pecu- liar to the owner of the land taken, and not those which are common to all land in the vicinity, can be considered. Freedle v. North Carolina Railw., 4 Jones Law, 89. It has been held that the benefits resulting to the land-owner from the construction of the road are to be deducted, in estimating damages for land taken for a railway ; and that consequently a statute providing for such deduc- tion is not thereby rendered unconstitutional. C. P. & Ind. Railw. v. Simpson, 5 Ohio St. 251. But as the constitution of this state expressly required that compensation to the land-owner should be made in all cases when land is taken for public use in money, it seems scarcely consistent to say that the benefits to the land-owner can in all cases be deducted, since in some cases the benefits to the particular piece of land, a portion of which is taken, might more than com- pensate for that which is taken, thus leaving nothing to be compensated "in money." The force of this embarrassment was felt by the court in a highway case in Vermont, where the constitution requires, that "whenever private property is taken for public use, the owner ought to receive an equivalent in money." The court escaped from the embarrassment here by a device, which some might pos- sibly regard as more ingenious than ingenuous, by saying, that as the constitu- tion only applied to property " taken for public use," this could not reach cases where only an easement in property was taken. The court might, with almost equal propriety, have said, that the provision of the constitution " ought to re- ceive," being in the optative mood, did not imply an imperative duty, as few per- sons expect to obtain by process of law all which they "ought to receive." Livermore v. Jamaica, 23 Vt. R. 361, Bedfield, J. dissenting, snb silentio. Ante, § 71, pi. 6. See also C. & P. Railw. v. Ball, 5 Ohio St. 568 ; Kramer v. Clev. 6 Pittsb. Railw., Id. 140. 22 Montgomery & West Point Railw. v. Varner, 19 Ala. R. 185 ; Concord Railw. v. Greely, 3 Foster, 237; Buffum v. New York & Boston Railw., 4 Rh. I. R. 221 ; Cleve. & Pittsb. Railw. v. Ball, 5 Ohio St. 568. But the wit- ness may give an opinion as to the value of the whole land, both before and after the location of the road. lb. And so also in Illinois & Wisconsin Railw. v. Van Horn, 18 111. R. 257. See also Dorian v. E. Br. & Way. Railw. Co., 46 *143 § 72. MODE OP PROCEDURE. 275 This inquiry leads to the discussion of the general question, of what matters may be proved, by the opinion of witnesses who are not possessed of any peculiar knowledge, skill, or experience upon the subject. 15. And it must be admitted the cases are not altogether rec- oncilable upon the subject. Experts are admitted to express their opinions, not only upon their own observation, but upon testimony given in court, by other witnesses, and where the tes- timony is conflicting, upon a hypothetical state of facts. 23 The testimony of such witnesses is intended to serve a double pur- pose, that of instruction to the jury upon the general question involved, and elucidation of the particular question to be consid- ered by them. 23 The resort to the assistance and instruction of persons skilled in particular departments of art or science is constantly adverted to, as of great advantage in enabling the triers to properly comprehend those subjects out of the range of general knowledge, or the particular studies of judges, or jurors, in some of the best-considered English cases, within the last few years. 24 But the testimony of scientific witnesses will not estab- lish facts in conflict with the axiomatic principles of science and philosophy, or those which contradict the evidence of the senses, or of consciousness. 24 Penn. St. 520. In a late case in Pennsylvania (East Penn. Railw. Co. v. Hiester, 40 Penn. St. 53), it is said that the only proper test of the value of land so taken is the opinion of witnesses as to the value of the land taken, in view of its location and productiveness, its market value, or the general selling price of land in the neighborhood. And this seems to us exceedingly sensible and free from refinement or conceit. See also Same v. Hottenstine, 47 Penn. St. 28. 23 1 Greenleaf Ev. § 440. Thus the testimony of persons employed in making insurance of buildings against fire, may, in actions against railways for conse- quential damages to buildings, by the near approach of the track, express their opinion of the effect thereby produced upon the rent, or the rate of insurance of such buildings. Webber v. Eastern Railw., 2 Met. 147. See also Henry v. Dubuque & Pacific Railw., 2 Clarke, 288. And in the case of Brown v. Prov- idence, Warren, & Bristol Railw., 5 Gray, 35, it was held, that the company could not show that liquors were sold, or to be sold, upon land, as a part of the inducement to pay so high a rent, or that it was "contemplated" having a station near the point ; such testimony being too indefinite and remote. 24 Broadbent v. Imperial Gas Co., 7 De G. M. & G. 436, 466, opinion of Lord Chancellor Cranworth. 276 EMINENT DOMAIN. § 72. 16. But there is certainly a very considerable number of subjects, in regard to which the jury are supposed to be well in- structed, and altogether capable of forming correct opinions, and in regard to which the testimony of experts is not competent, or not requisite, but which it is more or less difficult for the wit- nesses to describe accurately, so as to place them fully before the minds of the jury, as they exist in the minds of the witnesses. Among these are inquiries in regard to the extent of one's prop- erty, solvency, health, affection, or antipathy, character, sanity, and some others. In such cases the witnesses' knowledge is chiefly matter of opinion, and it is impossible to enumerate each particular fact. Of this character seem to us to be questions in regard to the quality and value of property. One may enume- rate some of the leading facts upon * which such an opinion is based ; but after all, the testimony, as to facts, is excessively mea- gre, without the opinion of the witness, either upon the very subject of inquiry, or some one as near it as can be supposed. Hence in those courts where the opinion of witnesses, in regard to the value of property, real or personal, is not admitted, it leads to sundry shifts and evasions, in the course of the exami- nation of witnesses upon that subject, which, while it is not a little embarrassing in itself, at the same time illustrates the in- consistency, not to say absurdity, of the rule. 25 85 Opinion of the court in Concord Railw. v. Greely, 3 Fost. 237. " A wit- ness may state what was the cost of property of a particular description at a given place, in order to ascertain the value of property of a similar description. Whipple v. Walpole, 10 N. H. R. 130. But evidence of the price for which the corporation offered to sell a tract adjoining Greely's, and how much they re- fused to take for it, is certainly of doubtful competency. We have held at this term, in the case of Hersey v. The Merrimack County Mutual Fire Insurance Company, in Merrimack county, that what the owner of a piece of real estate said he would sell the same for, was competent evidence against him, as tending to show its value. But that was a statement in regard to the value of the land itself, while the evidence admitted here was going one step further ; it was a statement in regard to other lands ; and it is quite questionable whether it could have any legitimate tendency to prove the value of Greely's land. " On questions of science, skill, or trade, or others of a like kind, experts may not only testify to facts, but are permitted to state their opinions. 1 Greenl. Ev. § 440. But upon subjects of general knowledge, which are understood by men in general, and which a jury are presumed to be familiar with, witnesses must * 344 § 72. MODE OF PROCEDURE. 277 17. In regard to costs, in such proceedings, the more general rule is not to allow them, unless specifically given by statute. 26 testify as to facts alone, and the jury must form their opinions. In such cases, the testimony of witnesses, as experts merely, is not admissible." If an inquiry arose in regard to the value of a cargo of Hour, it would cer- tainly sound strange to hear witnesses testify what precisely similar flour is worth, and at the same time be gravely told, that they were studiously to avoid expressing any opinion of the value of this very flour, which they had seen and examined, and in regard to which the whole testimony was received. Yet such is, from necessity, the course resorted to, under the rule. The more general course is, we think, to receive the opinion of witnesses, acquainted with the property and the state of the market, as to the value of the particular property in question. White v. Concord Railw., 10 Foster, 188. But in New Hamp- shire, in a late case, it is held that the opinion of witnesses, in regard to apparent health, is competent to be given ; and this seems to be yielding the main point of exclusion before insisted upon. Spear v. Richardson, 34 N. H. R. 428. In this same case the opinion of witnesses, whether a horse was sound, or had a particular disease, the heaves, was excluded because the witness was not shown to be an expert. We are not surprised that the judge regarded the distinction as " somewhat nice." And in Currier v. Boston & M. Railw., 34 N. H. R. 498, it was held that a witness could give an opinion in regard to the occurrence of hardpan in an excavation ; and in Hackett v. Boston, Con. & Mont. R., 35 N. H. R. 390, it was held that a witness might express an opinion in regard to distances, dimensions, and qualities. See also Roch. & Sy. Railw. v. Budlong, 6 How. Pr. 467. And in Illinois & Wisconsin Railw. v. Yon Horn, 18 Illinois R. 257, it is held that it is proper to have the opinion of witnesses in regard to the value of city lots, " as they have no stated value." Skinner, J. said : "To describe to a jury a piece of ground, however minutely, with its supposed adaptations to use, advantages and disadvantages, and demand of them, upon this information alone, a verdict as to its value, would be merely farcical ; and this, indeed, is all that can be done to enable them to arrive at a conclusion as to the value, unless the witnesses are allowed to state their judgment or opinion, together with the facts upon which such opinion is founded. Butler v. Mehrling, 15 111. R. 488 ; Kel- logg v. Krauser, 14 Serg. & Rawle, 137." In Cleve. & Pittsb. Railw. v. Ball, 5 Ohio St. 568, it is said, witnesses may be allowed to express an opinion as to the value of the land taken, but not as to the extent of damages which the land- owner will sustain by the appropriation of the land to public use, that being the very question to be settled by the triers. This seems to us placing the matter upon its proper basis. One must have had experience in regard to the particu- lar point, as laying a railway over a wharf, in order to give an opinion of the extent of the injury caused thereby, and it is not sufficient that he may have had experience and skill in other matters pertaining to the building and opera- 26 Herbein v. The Railroad, 9 Watts, 272. 278 EMINENT DOMAIN. § 72. But where the statute provides for an assessment of land dam- ages, by a jury, at the suit of the party aggrieved, the costs to be paid * by the company, this was held not to include the fees of witnesses examined by the jury, on the part of the claimant. 27 18. But the terms " costs and expenses incurred," were held to include the costs of witnesses, and of summoning the viewers. 28 19. If the act makes no provision for compensation to the commissioners, they have no power to order the company to pay the cost of their expenses and services. 29 20. But where the party whose costs are rightfully denied in the Court of Common Pleas, appeals upon that question, and the judgment is affirmed, he must pay costs to the other party, con- sequent upon the appeal. 30 21. It is no objection to the competency of a juror, in this class of cases, that he had been an appraiser of damages upon another railway, in the same county, or that he is a stockholder in another railway which had long before acquired the lands necessary for its use. 81 tion of railways. Boston & "Worcester Railw. v. Old Colony & F. R. Railw., 3 Allen, 142. The court in this case declined to set aside the verdict for land damages, because testimony of the sale of upland at a considerable distance from the wharf, and of the price paid four months before the time of making the location, was received, and also of the number of trains passing over the land taken, and of the number of vessels and amount of lumber, wood, and coal, &c, coming to the wharf. 27 Railroad v. Johnson, 2 Wharton, 275. 88 Penn. Railroad v. Keiffer, 22 Penn. St. 356 ; Chicago & Mont. Railw. v. Bull, 20 Illinois R. 218. 89 At. & St. L. Railroad v. The Commissioners, 28 Maine R. 112. 30 Harvard Branch Railw. v. Rand, 8 Cush. 218 ; Commonwealth v. Bos- ton & Maine Railw., 3 Cush, 56. But see § 71, note 10, ante, in regard to the course of proceeding, in estimating land damages. Where the statute gives an appeal, in estimating land damages, to a court of common-law jurisdiction, and does not prescribe the mode of trying the appeal, it will be tried by com- missioners, that being the usual course of trying cases of that class, in common- law courts. And a statute requiring parties to be allowed a trial by jury, in all cases proper for a jury, will not alter the mode of trying such appeals. Gold v. Vt. Central Railw., 19 Vt. R. 478. 31 People v. First Judge of Columbia, 2 Hill (N. Y.), 398. The tribunal for assessing land damages should be free from interest or bias in order to meet *145 § 72. MODE OP PROCEDURE. 279 22. Courts do not generally possess the power to revise the assessment of land damages, by a jury or other tribunal ap- pointed by them for that purpose, upon its merits, and set it aside, upon the mere ground of inadequacy, or excess of damages. 32 23. Where commissioners assessed land damages at a sum named, and stated further, that the plaintiff was to receive an additional sum in a certain contingency, and the report became matter of record, it was held that debt will not lie, for the addi- tional sum, upon averring the happening of the contingency. 33 * 24. Where the statute gave the court a discretion, to accept and confirm the inquest of land damages, or order a new inquest, " if justice shall seem to require it," it was held they might set aside the report for mere excess of damages, and that the Su- preme Court might do the same, when the proceedings are brought up by certiorari.^ the constitutional requirement for just compensation. Powers v. Bears, 12 Wis. R. 213. But see Strang v. Beloit & M. Railw. Co., 16 Wis. R. 635. 32 Willing v. Baltimore Railw., 5 Whart. 460. As to what is good cause for setting aside the report of commissioners, see Bennet v. Railw., 2 Green, 145; Van Wickle v. Same, Id. 162 ; R. & S. Railw. v. Budlong, 6 How. Pr. 467. In Missouri, when the report of commissioners is set aside, the court must ap- point a new board. Hannibal & St. Joseph Railw. Co. v. Rowland, 29 Mo. R. 337. But this rule will not apply where the report is recommitted to the same board, with instructions to pursue a different rule in estimating damages. lb. 33 W. & P. Railroad Co. v. Washington, 1 Robinson (Va.) , 67. See also Dim- ick v. Brooks, 21 Vt. R. 569. 34 Pennsylvania Railw. v. Heister, 8 Penn. St., 445 ; Same v. McClure, R>. ; Same v. Riley, lb. ; Same cases, 2 Am. Railw. C. 337. OTHER MATTERS OF PRACTICE, IN REGARD TO ASSESSING LAND DAMAGES. All the commissioners must be present and act, in all matters of a judicial character. Crocker?;. Crane, 21 Wend. 211. In regard to the mode of select- ing and impanelling jui'ies, for assessing land damages against railways, the fol- lowing cases may be referred to: — Penn. Railw. v. Heister, 8 Penn. St., 445, which decides, that where the statute requires the sheriff to summon the jury, it is irregular for him to select them from a list prepared by his deputy. And Vail v. Morris & Essex Railw., 1 Zab. 189, where it is held, that commissioners appointed to value the land of E. V. upon one route, adopted by the company, cannot appraise the land of the same person, when the company adopt a differ- ent route, across the land. In regard to the right of appeal, which is given in terms to the party aggrieved, *146 280 EMINENT DOMAIN. § 72. 25. It does not seem important, where the statute in terms allows either party to take compulsory proceeding to assess land damages upon the parties failing to agree, that there shall have been any previous attempt to agree, in order to give jurisdiction to the courts to assess the amount of such compensation. 35 it has been held to extend to the railway company, as well as the land-owner. Kimball v. Kennebec & Portland Railw., 35 Maine R. 255. No appeal lies from the order of the Supreme Court, confirming the report of commissioners on the appraisal of land damages, for land taken under the gen- eral railway act. The act provides for no such appeal to the Court of Appeals, and the remedy, in the act, is intended to be exclusive. And besides, the Su- preme Court exercise a discretion, to some extent, in confirming such reports, and appeals will not, upon general principles, lie to revise such adjudications. New York Central Railw. v. Marvin, 1 Kernan, 276 ; Troy & Boston Railw. v. Northern Turnpike Co. 16 Barb. 100. Where the special act of a railway company required them to give the land- owner ten days 1 notice of the time when a jury would be drawn to assess dam- ages, it was held that a strict compliance with this requirement was indispensa- ble to give jurisdiction, and that the objection was not waived by appearance before the officer at the time the jury were drawn, and objecting to the regu- larity of the proceedings, without stating the grounds, or by appearing before the jury, when they met to appraise the damages, and objecting to one of them, who was set aside. Cruger v. The Hudson River Railw., 2 Kernan, 190. Mere informalities in the summons, which do not mislead the company, will not avoid the proceeding. Eastham v. Blackburn Railw., 25 Eng. L. & Eq. 498. It is not important that the award should specify the finding upon the sepa- rate items of claim. In re Bradshaw, 12 Q. B. 562. Where the special act of a railway company prescribes a different mode of procedure, in condemning land, from that required by a general law of the state, subsequently passed, the company may pursue the course prescribed by their special act. Cla'rkson v. Hudson River Railw., 2 Kernan, 304. But it seems to be here considered, that the company may adopt the course prescribed by the general act, if they so elect. And upon general principles it would seem that they should do so, unless there is something in the general act by which the existing railways are at liberty to proceed under their charters. This is the ground of the decision in the last case. North Mo. Railw. v. Gott, 25 Mo. R. 540. Where the company's special act vests specific and special powers in them, for the benefit of the public (as to build stations of given dimensions larger than the general act provides), it is not controlled by subsequent general acts. London & Blackwall Railw. v. Board of Works, 28 Law Times, 140, Decem- ber, 1856. In regard to the mode of proceeding in such cases, see Coster v. N. J. Railw. & Tr. Co., 4 Zab., 730 ; Green v. Morris & Essex Railw., Id. 486 ; Pittsfield & North Adams Railw. v. Foster, 1 Cush. 480. 35 Bigelow v. Miss. Central & Tenn. Railw. Co. 2 Head, 624. ^ § 73. THE TIME COMPENSATION TO BE MADE. 281 *SECTION XI. The Time Compensation to be made. 1. Opinions conflicting. I 6. Adequate legal remedy sufficient. 2. Chancellor Kent's definition. 7. Where required, payment is requisite to 3. That of the Code Napoleon. vest the title. 4. Most state constitutions require it to be concurrent with the taking. 5. English cases do not require this. 8. Some states hold that no compensation is requisite. § 73. 1. In general, railway acts require compensation to be made, before the company take permanent possession of the land. 1 And it has even been made a question, in this country, whether the legislature could give a railway company authority to take permanent possession of lands, required for their use, previous to making or tendering or depositing, in conformity with their charter or the general law, compensation for the same. 2 2. The profound and sensible author of the Commentaries on American Law 3 thus states the rule upon this subject: "The * settled and fundamental doctrine is, that government has no right to take private property, for public purposes, without giv- ing just compensation ; and it seems to be necessarily implied, that the indemnity should, in cases which will admit of it, be previously and equitably ascertained, and be ready for reception, concurrently, in point of time, with the actual exercise of the right of eminent domain." 3. The language of the Code Napoleon 4 is specific upon this point : " No one can be compelled to give up his property ex- 1 Lands Clauses Consolidation Act, 8 Vict. c. 18, § 84, et seq. ; Ramsden v. Manchester & S. J. & A. Railw., 5 Railw. C. 552. In such cases courts of equity will enjoin the company from taking possession until compensation is made, unless the owner consent. Ross v. E. T. & S. Railw., 1 Green's Ch. 422. 2 Thompson v. Grand Gulf Railw. Co., 4 Howard, Miss. R. 240. The constitu- tion of this state, however, requires a previous compensation to be made. See also Cushman v. Smith, 34 Maine R. 247. 3 2 Kent, Comm. 340 (7th ed.), 393, and note. The Milwaukee & M. Railw. Co. v. Eble, 4 Chandler (Wis.), 72 ; Cushman v. Smith, 34 Maine R. 247. 4 Code Napoleon, Book II. Title II. 545. * 147, 148 282 EMINENT DOMAIN. § 73. cept for the public good, and for a just and previous indemnity." A similar provision existed in the Roman civil law. 4. It is embodied, in different forms of language, into the written constitutions of most of the American states, but not generally, in terms requiring the indemnity concurrently with the appropriation. But practically that view has generally pre- vailed in the courts. 5 5 Lyon v. Jerome, 26 Wend. 485, 497; Opinion of Sutherland, J., Case v. Thompson, 6 Wend. 634. In this case it was held, that it was not indispensa- ble to the opening of a road over the land of an individual, that the price should be paid, or assessed even, before the opening of the road. And in Bonaparte v. C. & A. Railw. Co., 1 Bald. C. C. 205, 216, it was held, that a law taking private property without providing for compensation was not void, for it was said, that may be done by a subsequent law. But the appropriation was enjoined, in that ease, till compensation should be made. See also Gardner v. The Village of Newburgh, 2 Johns. Ch. 162 ; Henderson v. The Mayor, &c. of New Orleans, 5 Miller's Louis. 416; Rogers v. Bradshaw, 20 Johns. 735; Duncan, J., in Ea- kin v. Raub, 12 Serg. & R. 330, 366, 372; O'Hara v. Lexington Railw., 1 Dana, 232; Hamilton v. Annapolis & Elkridge Railw. C. 1 Md. Ch. 107 ; Mar- tin, ex parte, 8 Eng. (Ark.) 198. In Bloodgood v. The Mohawk & Hudson Railw. Co., 14 Wend. 51, it is held that this constitutional requirement merely contemplates a legal provision for compensation, and not that such property shall be actually paid for before taken. In Boynton v. The Peterboro 1 and Shirley Railw. Co., 4 Cush. 467; 1 Am. Railw. C. 595, Shaw, Ch. J. says, " The right to damages for land taken for public use accrues and takes effect at the time of taking, though it may be ascertained and declared afterwards. That time in the case of railroads, prima facie, and in the absence of other proof, is the time of the filing of the location." Charlestown Branch Railw. v. Middle- sex, 7 Metcalf, 78 ; s. c. 1 Am. Railw. C. 383 ; Davidson v. Boston & Maine Railw., 3 Cush. 91. In Massachusetts the remedy is limited to three years by statute, and the time begins from the filing of the location. Charlestown Branch Railw. v. County Commissioners of Middlesex, 7 Met. 78 ; s. c. 1 Am. Railw. C. 383. So where a corporation, after locating a railway over a wharf more than sixty feet, and filing the location with the county commissioners, agreed with the owners of the wharf to extend the road sixty feet on and over the same before a certain day, and the owners, in consideration, agreed to demand no damages for the extension, and the road was constructed according to the location filed before the agreement, Held, that this was not an agreement not to extend the road more than sixty feet, and that the owners of the wharf were not thereby entitled to apply, after three years from the filing of the location, for an estimate of the damages caused by an extension of the road more than sixty feet over the wharf. lb. By the New York statute of 1851, railway companies have no right to enter upon, occupy, or cross a turnpike or plank road without consent of the owners, except on condition of § 73. THE TIME COMPENSATION TO BE MADE. 283 * 5. It was held in one case, 6 where the act of parliament gave the right to take lands for the purpose of building a turnpike- first making compensation for damages to such turnpike or plank road com- pany. Plank Road Co. v. Buffalo, &c. Railw. Co., 20 Barb. 644. Shaw, Ch. J., in Boston & Providence Railw. Corporation v. Midland Railw. Co., 1 Gray, 340, 360, says: "The effect of the location is to bind the land described to that servitude, and to conclude the land-owner and all parties hav- ing derivative interests in it from denying the title of the company to their easement in it. We think, therefore, that the filing of the location is the taking of the land. It is upon that the owner is forthwith entitled to compensation, it is that act which gives the easement to the corporation and the right to have damages to the owner of the land." See, also, Drake v. Hudson River Railw., 7 Barb. 508, 552. In those states, where the constitutions contain express provisions requiring a previous compensation to the right to appropriate the land, as in Pennsylvania, Wisconsin, Kentucky, and Mississippi, the decisions upon this point would not be much guide, in regard to the general rule, in the absence of any express pro- vision of the kind. But see Harrisburg v. Crangle, 3 Watts & Serg. 460. And in some of the states, even where a concurrent right to compensation, with the appropriation of the land, is recognized, it seems to be considered by some that a statute, authorizing the appropriation of land for public uses, and which makes no provision for compensation, is not on that account unconstitu- tional. Opinion of the Chancellor in Rogers v. Bradshaw, 20 Johns. 735. But the prevailing opinion, even in New York, seems to be, that the statute should provide some available remedy for adequate compensation, and that un- less that is done, the act, if not positively unconstitutional, is so defective, that no proceedings should be suffered under it, until compensation is secured, and that a court of equity should interfere. Gardner v. Newburgh, 2 Johns. Ch. 162 ; Rexford v. Knight, 1 Kernan, 308 ; Willyard v. Hamilton, 7 Ham. 449 ; Rubottom v. McClure, 4 Blackf. 505 ; McCormick v. Lafayette, Smith, (Indi- ana), 83; Mercer v. McWilliams, Wright, 132. Some cases have made a distinction (in regard to the necessity of a previous- ly ascertained compensation being made and so situated as to be capable of being made available to the owner of land, concurrently with its appropriation to pub- lic use) between ordinary cases and that class of cases where the property is put to the use of the state directly, and that in such cases it is not indispensable. Young v. Harrison, 6 Geo. 130. And the grant of the right to bridge a navigable river, or arm of the sea, or to obstruct the flow and reflow of the tide upon the flats of private persons, al- 6 Lister v. Lobley, 7 Ad. & Ellis, 124, Lord Denman says : " The amount of compensation cannot generally be ascertained till the work is done. The effect of the words in question is that they shall not do it without being liable to make compensation." It seems to have been supposed here, that if the company did not make compensation they might be compelled to do so by mandamus. * 149 284 EMINENT DOMAIN. § 73. road, * making, or tendering satisfaction, that this need not be done before, or at the time of entering upon or taking the lands. 6. But this subject was largely discussed, in an early case in New York, 7 and finally determined, by the court of errors rcvers- though it may abridge their beneficial use, is not such an invasion of private property as to entitle the party to compensation. It is but the regulation of public rights, and if private persons thereby suffer damage, it is damnum absque injuria. Davidson v. Boston & Maine Railw., 3 Cush. 91. See, also, upon the subject generally, Zimmerman v. Union Canal Co., 1 Watts & S. 346; Phila- delphia & Reading Railw. v. Yeiser, 8 Penn. St. 366 ; 2 Am. Raihv. C. 325 ; Commonwealth v. Fisher, 1 Penn. R. 462, and ante, § 63. But it is very generally held, that in the absence of all express provision by statute in regard to the time when compensation shall be made, the party is at all events entitled to have it ascertained and ready for his acceptance, concur- rently with the actual appropriation of the estate to public use, and that he is not obliged to wait till the work is completed. People v. Hayden, 6 Hill (N. Y.), 359; Baker v. Johnson, 2 Hill, 342. But no right to compensation vests in the land-owner till the acceptance and confirmation of the appraisal by the proper tribunal, under any statutory pro- visions, in most of the American states, and until that, the company may change the location of their road, and abandon proceedings pending against land-owner, on the first surveyed route, by paying costs already assessed. Hudson River Railw. v. Outwater, 3 Sand. Sup. Ct. 689. And where the statute of the state provides that no valuation of property taken for railway and canal purposes need be made before taking possession of the same, in those cases where the property is not obscured, so that its value cannot be judged of, it was held there should be no unreasonable delay in having the valuation made. Compton v. Susquehannah Railw., 3 Bland. Ch. 386. 7 Bloodgood v. M. & H. Railw. Co., 14 Wend. 51 ; s. c. 18 Id. 9, 59. See, also, upon this subject, Fletcher v. Auburn & Syracuse Railw., 25 Wend. 462; Smith v. Helmer, 7 Barb. 416 ; Pittsburgh v. Scott, 1 Penn. St. 309 ; People v. Michigan Southern Railw., 3 Gibbs, 496. In this case it is said the party who makes no application for compensation for many years should be regarded as having waived all claim. Id. p. 506. See, also, Smith v. McAdam, 3 Gibbs, 506. And where the statute provided for depositing the value of the land taken before entry upon it, it was held this was a provision for the security of the land-owner, and might be waived by him ; and if so, and entry was made by the company without making the deposit, he might recover the assessment in an action of debt. Smart v. Railway, 20 N. H. R. 233. But in one case it was held indis- pensable to the validity of the power, that the party, whose land was taken, should have something more than a right of action for the value of his land. Shepardson v. M. & B. Railw., 6 Wisconsin R. 605. See Powers v. Bears, 12 Id. 213 ; Ford v. Ch. & X. W. Railw. Co., 14 Id. 609. And by the construction of the statute of Maine, a railway corporation, as soon as their track is located, may take immediate possession, and the land-owner, *150 § 73. THE TIME COMPENSATION TO BE MADE. 285 ing the judgment of the court below, that if provision was made for compensation in the act, giving power to take the lands, it was not indispensable that the amount should be actually ascer- tained and paid before the appropriation of the property. 7. In Mississippi it is required, by the constitution of the state, that the compensation be paid before the right to iise the land is * vested. 8 So also in Georgia the title does not vest in the corn- failing to agree with the company, as to the amount of damages, may apply to the courts to have the same assessed, and thereupon the company are required to pay or give security for the same, and their right of possession is suspended until the requirement is complied with ; but no action of trespass lies in such cases. Davis v. Russell, 47 Me. R. 443. Where by statute a bond is required to be filed by the company to secure damages to the land-owner, upon failure of the parties to agree upon the amount, such bond extends to all the lawful dam- age caused to the owner by the construction of the company's works ; and the fact of it being approved and ordered to be filed is presumptive proof that the parties had failed to agree. Wadhams v. Lackawanna & Blooms. Railw. Co., Penn. St. 303. But in most of the states the assessment of the damages due to the land-owner, and the payment, tender, or deposit of the same, is held a condition precedent to the right of entry upon the land, and the company entering before this will, prima facie, be regarded as trespassers. Memphis & Charleston Railw. Co. v. Payne, 37 Miss. R. 700 ; Henry v. Dubuque & Pacific Railw., 10 Iowa R. 540 ; Evans v. Haefner, 29 Mo. R. 141 ; Burns v. Dodge, 9 Wise. R. 458. In McAulay v. Western Vermont Railw. Co., 33 Vt. R. 311, it was decided that the payment of land damages was a condition precedent to the acquiring of title by a railroad company of lands taken for their road. But that where the land- owner acquiesces in the occupation of his land for the construction of a railway without prepayment of land damages, upon a contract or understanding for future payment by the company, and the road is constructed and put in op- eration, he cannot afterwards, on failure to obtain payment, maintain trespass or ejectment for the land. And whether, under such circumstances, he would still retain an equitable lien on the land, seems doubtful. The mere prosecution of a controversy by the land-owner with the company, before commissioners or on appeal, as to the amount of the damages, is not such a prohibition of the tak- ing of the land by the company without prepayment of land damages as is neces- sary to enable the land-owner to maintain trespass or ejectment for the land after the road is put in operation. Nor will notice to the laborers on the railway em- ployed by the contractor be considered as sufficient to entitle the land-owner to maintain trespass or ejectment against the company, the company not being affected by such notice. 8 Stewart v. Raymond Railw. Co., 7 Smedes & M. 568. See also Thomp- son v. Grand Gulf Railw., 3 Howard (Miss.), 240. * 151 286 EMINENT DOMAIN. § 73. pany until the ascertained compensation is paid or tendered. 9 A similar decision was made by the Supreme Court of the United States, 10 where the charter of the company provided that the pay- ment, or tender, of the valuation, should vest the estate in the company, as fully as if it had been conveyed. And a similar decision was also made by the Supreme Court of Vermont. 11 8. In one case in North Carolina, 12 it was held that compensa- tion need not be made prior to appropriating land for public use. The constitution of the state is said to contain no prohibition against taking private property for public use, without compen- sation. And the same is true of the constitution of South Caro- lina. And the latter state held 13 that private property might be taken without compensation. But this decision is certainly at variance with the generally received notions upon that subject, since the period of the Roman Empire. 9 Doe v. The Georgia Railw. Banking Co., 1 Kelly, 524. 10 Baltimore & Susquehanna Railw. Co. v. Nesbit, 10 How. 395. 11 Stacey v. Vermont Central Railw. Co. 27 Vt. R. 39. The opinion of Isliam, J., in this case, will show the correlative rights of the company and land-owner, and by what act the right of each becomes perfected. Where the statute re- quires the company to contract in writing, it is not competent to show title in any other mode, unless by formal conveyance. Harborough v. Shardlow, 2 Railw. C. 253 ; 7 M. & W. 87. In Graff v. The City of Baltimore, 10 Md. R. 544, it was held, under a statute for enabling the city to supply pure water, and to take land upon valuation by a jury, and compensation to the owners, and that where " such valuation is paid, or tendered, to the owner or owners" of the property, it " shall entitle the city to the use, estate, and interest in the same, thus valued, as fully as if it had been conveyed by the owners" ; that the city is not bound by the mere inquisition and judgment thereon, but could right- fully abandon the location ; and that payment, or tender, under the statute, was indispensable to the vesting of the title. But it was held, that the city may be made liable, in another form of proceeding, to the land-owner, for any loss or damage, he may have sustained, by reason of the conduct of the municipal au- thority in the premises. 12 R. & G. Railw. Co. v. Davis, 2 Dev. & Bat. 451. But in New Jersey it was held that the supervisors, in laying out roads, are bound to award damages to land-owners, with their return, or the whole proceeding is illegal and void. State v. Garretson, 3 Zab. 388. 13 State v. Dawson, 3 Hill (S. C), 100. In this case Mr. Justice Richard- son dissents from the decision of the court, and it is generally allowed that his opinion contains the better law. His argument, in the language of the author of the Commentaries, vol. 2, ubi supra, "was very elaborate and powerful." See Louisville Railw. Co. v. Chappell, 1 Rice, 383 ; Lindsay v. The Commissioners, 2 Bay, 38. § 74. APPRAISAL INCLUDES CONSEQUENTIAL DAMAGES. 287 ♦SECTION XII. Appraisal includes Consequential Damages. 1. Consequential damage barred. 2. Such as damage, by blasting rock. 3. But not where other land is used unneces- sarily. 4. But loss by fires, obstruction of access, and cutting off' springs is barred. 5. Loss by flowing land not barred. 6. Damages, from not building upon the plan contemplated, are barred. 7. Special statutory remedies reach such dam- ages. 8. Exposure of land to fires. 9. No action lies for damage sustained by the use of a railway. § 74. 1. It is requisite that the tribunal appraising land dam- ages, for lands condemned for railways, should take into consid- eration all such incidental loss, inconvenience, and damage, as may reasonably be expected to result from the construction and use of the road, in a legal and proper manner. And as all tribu- nals, having jurisdiction of any particular subject-matter, are presumed to take into consideration all the elements legally con- stituting their judgments, such incidental loss and damage will be barred, by the appraisal, whether in fact included in the esti- mate or not. 2. Hence damage done by the contractors to the remaining land, by blasting rocks, in the course of construction, has been held to be barred, as included in the estimated compensation for the land taken. 1 1 Dodge v. The County Commissioners, 3 Met. 380 ; Sabin v. Vermont Cen- tral Railw., 25 Vt. R. 363; Dearborns. Boston, Concord, & Montreal Railw., 4 Foster, 179, 187. But in Hay v. Cohoes Company, 2 Comst. 159, the de- fendants, a corporation, dug a canal upon their own land, for the purposes au- thorized by their own charter. In so doing it was necessary to blast rocks, and the fragments were thrown against and injured the plaintiff's dwelling, upon land adjoining, and it was held the defendants were liable to a special ac- tion for the injury, although no negligence or want of skill was alleged or proved : and in Tremain v. Cohoes Company, 2 Comst. 163, a precisely similar action, it was held that evidence to show the work done in the most careful man- ner was inadmissible, there being no claim for exemplary damages. But there is probably an essential difference between the case of a railway, in the construction of which blasting rocks is almost indispensable, and that of a manufacturing company, or other proprietor, who may find it convenient to blast *152 288 EMINENT DOMAIN. § 74. * 3. But it was held that this did not preclude the land-owner from recovering damages for using land adjoining the land taken rocks upon his premises, to increase their utility or beauty. But for doing what the act does not authorize, or doing what it does authorize, improperly, a rail- way company is liable to an action. Turnery. Sheffield & R. Railw., 10 M. & W. 425. In Carman v. Steubenville & Ind. Railw., 4 Ohio St. 399, it seems to be taken for granted, that throwing fragments of rock, by blasting, upon the land of adjoining proprietors, is an actionable injury, and as in this case it was done by the contractor in the performance of his contract, in the manner stipulated, the company were held liable. The result of the cases would seem to be, that where the damage done, by blasting rocks, or in any similar mode, in the course of the construction of a rail- way, is done to land, a portion of which is taken by the company under compul- sory powers, this damage will not lay the foundation of an action, in any form, as it should be taken into account in estimating the compensation to the land-owner for the portion of land taken. Brown v. Prov. Warren, & Bristol Railw., 5 Gray, 35. And if not included in the appraisal, it is nevertheless barred. Dodge V. County Commissioners, supra. But if the damage is done to land, no part of which is taken, and where no land of the same owner is taken, it may be recovered, under the statute, if pro- vision is made for giving compensation for consequential damage, or where lands are " injuriously affected. 1 ' But if the statute contain no such provision, the only remedy will be by a general action. And in this view many of the cases cited above seem to assume, that blasting rocks, by an ordinary proprietor of land, is a nuisance to adjoining proprietors if so conducted as to do them serious damage. And this is the ground upon which the case of Carman v. Steubenville & Ind. Railw. is decided, without much examination of this point, indeed, and by a di- vided court. But if a railway is not liable for necessary consequential damage, unless the statute gives a remedy {j)ost, § 75) , it may perhaps be questioned how far a recovery could be maintained, in a general action for damage done by blasting rocks, as that is confessedly within the range of their powers. See opin- ion of Shaw, Ch. J., in Dodge v. County Commissioners, 3 Met. 380 : " An au- thority to construct any public work carries with it an authority to use the ap- propriate means. An authority to make a railway is an authority to reduce the line of the road to a level, and for that purpose to make cuts, as well through ledges of rock as through banks of earth. In a remote and detached place, where due precaution can be taken to prevent danger to persons, blasting by gunpowder is a reasonable and appropriate mode of executing such a work ; and, if due precautions are taken to prevent unnecessary damage, is a justifiable mode. It follows that the necessary damage occasioned thereby to a dwelling-house or other building, which cannot be removed out of the way of such danger, is one of the natural and unavoidable consequences of executing the work, and within the provisions of the statute. " Of course, this reasoning will not apply to damages occasioned by careless- *153 §74. APPRAISAL INCLUDES CONSEQUENTIAL DAMAGES. 2'89 * for a cart-way, where six rods were allowed to be taken by the company throughout the line of the road, which would give ample space for cart-ways upon the land taken. 2 But it was held, in another case, that the company were not liable for en- tering upon the adjoining lands, and occupying the same with temporary dwellings, stables, and blacksmith shops, provided no more was taken than was necessary for that purpose. 3 4. So it is settled that the appraisal of land damages is a bar to claims for injuries by fire, from the engines obstructing access to buildings, exposing persons or cattle to injury, and many such risks. 4 And it will make no difference, that the damages were aiot known to the appraisers, or capable of anticipation at the time of assessing land damages ; 5 as where a spring of water is cut off by an excavation for the bed of a railway fifteen feet be- tvess or Regligep.ce in executing suck a work. Such careless or negligent act would be a tort, for which an action at law would lie against kirn who commits. or 'him wko commands it. But where all due precautions are taken, and dam- age is still necessarily done to fixed property, it alike is within the letter and the equity of the statute, and the county commissioners have authority to assess the -damages. This court are therefore of opinion, that an alternative writ of man- damus be awarded to the county commissioners, to assess the petitioners' dam- ages, or return their reasons for not doing so." See also Pottstown Gas Co. V' Murphy, 39 Penn. St 257. 2 Sabin v. Vermont Central Railw., 25 Vt. R. 363. * Lauderbrun v. Duffy, 2 Penn. St. 398. But it seems questionable whether this case can be maintained as a general rule. But if a party is entitled to compensation for injuries of this kind, as where his lands adjoining the railway, and no part of which is taken, are injuriously af- fected, as by blasting rocks, his only remedy is under the statute. Dodge v. County Commissioners, 3 Met. 380. 4 Phila. & Reading Railw. v. Yeiser, 8 Penn. St. 366 • s. c. 2 Am. Railw. C. 325; Aldrich v. Cheshire Railw., 1 Foster, 359 ; s. c. 1 Am. Railw. C. 206 ; Mason v. Kennebec & Port. Railw., 31 Maine, R. 215. See also Furniss v. Hudson River Railw., 5 Sand. 551 ; Huyett v. Phil. & Read. Railw., 23 Penn. St. 373 ; wife, §§ 71, 72. See also Lafayette Plank Road Co. v. New Albany &c. Railw. Co., 13 Ind. R. 90. 5 Aldrich v. Cheshire Railw., supra. But see Lawrence v. Great Northern Railw., 4 Eng. L. & Eq. 265. So, also, where the company's works cut off a spring of water, below high- water mark, on a navigable river, it was held the riparian owner was entitled to claim damages of them on that account, in a proceeding under the statute. Le- high Valley Railw. v. Trone, 28 Penn. St. 206, VOL. I. 19 *154 290 EMINENT DOMAIN. § 74. low the surface, from which the plaintiff's buildings had been supplied with water. 5. But it was held, that where, in the construction of a canal, with waste weirs, erected by direction, and under the inspection of the commissioners appointed to designate the route of the canal, with all the works connected therewith, and to appraise damages, the waste water, after flowing over the land of adjoin- ing proprietors, flowed upon the land of the plantiff, and thereby greatly injured it, that he was entitled to recover damages. 6 But the occasional flow of land by water caused by public works is to be estimated as part of the damages under the English statute. 7 6. And where the appraisal of land damages is reduced below ° Hooker v. New Haven & Northampton Co., 14 Conn. R. 14G ; s. c. 15 Conn. R. 312. But in such case, the owner of property overflowed by water, through the defective construction of a railway, is bound to use reasonable care, skill, and diligence, adapted to the occasion, to arrest the injury, and if he do not, not- withstanding the first fault was on the part of the company, he must be regarded as himself the cause of all damage, which he might have prevented by the use of such care, diligence, and skill. Chase v. The N. Y. Central Railw., 24 Barb. 273. The same rule was adopted by a special referee, in Lemmex v. Vermont Central Railw., in regard to damage to wool, by being exposed to rain at one of the company's stations, through the fault of the agents of the company, whei'e the owner did not remove it, as soon after he obtained knowledge of its condition, or take as effective measures to arrest the injury as he reasonably should have done. It was held the company were only liable for such damage as necessarily resulted from their own fault, and beyond that the plaintiff must be regarded as the cause of his own loss. See also post, § 180. The assessment of compensation for land taken for a railway covers all damages, whether foreseen or not, and whether actually estimated or not, which result from the proper construction of the road. But the company are liable to an action for damages resulting to any one from the defective construction of their road In the present case the plaintiff's meadows were injured, in conse- quence of the insufficient culverts in the defendant's road, there being no im- pediment to the construction of proper ones. Suitable bridges and culverts to convey the water across the railway, at or near the places where it naturally flows, are necessary to the proper construction of the road, except where they cannot be made, or where the expense of making them is greatly disproportionate to the interests to be preserved by them. Johnson v. At. & St. Law. Railw., 35 N. H. R. 569. 7 Ware v. Regent's Canal Co., 3 Dc G. & J. 212. § 74. APPRAISAL INCLUDES CONSEQUENTIAL DAMAGES. 291 what it otherwise would have been, by the representations of the agents of the company that the road would be constructed in a particular manner, made at the time of the appraisal to the com- missioners, and which representations are not fulfilled in the actual * construction of the road, whereby the plaintiff sustained serious loss and injury, it was held, that the adjudication of the commissioners was a merger of all previous negotiations upon the subject, and that no action could be maintained for con- structing the railway contrary to such representations, provided it was done in a prudent and proper manner. 8 7. But where no part of the plaintiff's land is taken, and the statute gives all parties suffering damage by the construction of railways the right to recover, as in England, and some of the American states, and the water is drawn off from plaintiff's well upon lands adjoining the railway, he may recover. 9 So, too, may the proprietor of a mill-pond recover damages, sustained by the construction of a railway across the same, although the dam were authorized by the legislature, upon a navigable river; and in constructing it, the conditions of the act were not complied with. 10 8. But it has been held that the appraisers are not to estimate increased damages to a land-owner in consequence of the ex- posure of the remaining land to fires by the company's engines. 11 8 Butman v. Vt. C. Railw. Co., 27 Vt. R. 500. See also Railw. Co. v. Washing- ton, 1 Rob. G7 ; B. & S. Railroad Co. v. Coinpton, 2 Gill, 20, 28 ; ante, § 71 ; Kyle v. Auburn & Roch. Railw., 2 Barb. Ch. 489. But see Wheeler v. Roch. & Sy. Railw., 12 Barb. 227, where it is held that a railway company will be enjoined from building a road-crossing at a different place from that named at the time damages were assessed. But it has been held, that it was competent for the company to show, by experts, the necessity of putting a culvert through an em- bankment, at a particular point, in order to preserve the work, as an answer to a claim for damages on account of the prospective obstruction of the water, and setting it back upon the land at that point, by the embankment. But it should be shown that such culvert is absolutely indispensable, before any deduction can be made on that account, unless the company are in some legal way bound to make it. The company are not estopped from proving this necessity because the plat of the location of the road does not indicate a culvert at that point. Nason v. Woonsocket Union Railw., 4 Rhode Island R. 377. Post, § 93. 9 Parker v. Boston & Maine Railw., 3 Cush. 107.^ 10 White v. South Shore Railw., 6 Cush. 412. 11 Sunbury & Erie Railw. v. Hummel, 27 Penn. St. 99, Lewis, Ch. J., and *155 292 EMINENT DOMAIN. § 74. Nor can any common-law action be sustained for such damage unless where actual loss intervenes through the negligence of the company. 11 Black, J., dissenting. The general current of authority seems to ns with the minority of the. court. And in Lehigh Valley Railw. v. Lazarus, 28 Penn. St. 203, the case of Yeizer, 8 Penn. St. 366, ante, n. 4, is regarded, by the reporter of that state, as overruled. But in an action of trespass against a railway com- pany for constructing their road through plaintiff's land, and thereby prevent- ing his cattle thriving, this latter injury is not so remote a consequence of the act charged that it may not be made a ground of claiming damage, when spe- cially alleged in the declaration. Baltimore & Ohio R. v. Thomson, 10 Md. 11. 76. If we understand the ground assumed by the court in Pennsylvania, at the pres- ent time, it is, that an injury to buildings, standing near the line of a railway, by fire from the companies' engines, when properly constructed and prudently man- aged, is too remote and uncertain to form an element in estimating damages to the land-owner, either when part of the land is taken, or the statute provides for damages to all persons "injuriously affected" by the company's works. We are entirely conscious of the embarrassment attending all attempts to define the class of injuries, which do, or which do not, come within the rule of legal conse- quential injuries, by the construction or operation of railways. But it seems important to distinguish between a railway, as one of the legitimate uses to which the proprietor of land might put it, for the purpose of private transporta- tion, and upon which he might no doubt use locomotive steam engines, and the use of such engines upon a public railway. In the former case the land-owner would not be liable to an adjoining pro- prietor except for want of care, skill, or prudence in the construction or use of his engines. The same would probably be true of a public company, if the legislature did not subject them to any consequential damage resulting from the nature of their business. But where they are, as in England, and many of the American states, made liable, either as part of the price of land taken, or as a distinct ground of claim, to all consequential damage caused to the land-owner, both by the construction and operation of their road or either of them, in a prudent and proper manner, it seems difficult to escape the conclusion, that the exposure of property along the line of a railway to loss by fires communicated by the company's engines, is one of the most direct sources of consequential in- jury which can be imagined. It is more direct and substantial than that from noise, dirt, dust, smoke, and vibration of the soil, all which, under circumstances, have been held proper elements of damage to be considered. Perhaps none of them are absolutely grounds of giving damage in all cases. That depends very much upon the nearness of the track to the land. And other circumstances may perhaps deserve consideration, in many cases. But where the track passes directly through lands, near* where buildings are already erected, it is difficult to conjecture upon what ground it could be claimed, that the increased exposure to fire was not a serious detriment to the owner. It is certain it must very seri- § 74. APPRAISAL INCLUDES CONSEQUENTIAL DAMAGES. 293 9. In a recent English ease 12 it was held, after extended argu- ment and careful consideration, that the owner of a house situ- ated close to a railway, and which suffers depreciation in value from vibration and smoke, not caused by any negligent user of the railway, but being the inevitable result of the ordinary user, has no right to compensation under the English statute, or by distinct action at law. The case is put upon the ground that the legislature having legalized the use of locomotive steam engines by railway companies, adjoining proprietors must sub- mit to the inevitable consequences of a lawful business, however inconvenient it may become ; and can sustain no action for damages any more than for the exercise of any other legal busi- ness which might depreciate the value of property in the neigh- borhood. The English statutes are construed to give compensa- tion only for injuries sustained by construction and not by the use of a railway. ously enhance the rate of insurance, and proportionally diminish the value of the rent, and of the buildings. As was said by Shaw, C. J., Proprietors of Locks & Canals v. Nashua & Lowell Railw., 10 Cush. 385, it is incumbent upon one who claims damage on this ground, to show that the company's track ran so near his buildings " as to cause imminent and appreciable danger by fire." When it is under- taken to be decided, as a question of law, that in no case is danger from fire, by the proper use of the company's engines, to be considered in estimating land damages, it is certainly contrary to the general course of decisions upon the subject, if not to the very principle upon which such companies have been subjected to such damages as they cause to land-owners, beyond what accrues from the ordinary use of lands for building and agricultural purposes. These decisions in Pennsylvania are still maintained there, and the rule has been ap- plied to the case of buildings where the owner is compelled to pay a higher rate of insurance in consequence of the proximity of the railway. Patten v. Northern Central Railw., 33 Penn. St. 426. It is here maintained that any claim for damages in consequence of the mere intrusion of noise and bustle upon one's seclusion is essentially anti-social, and at war with the fundamental laws of so- ciety, which we should not be inclined to question. And as to all mere conjec- tural or contingent advantages and disadvantages, it may well be said they are too remote to form an element in estimating land damages. Searle v. Lacka- wanna Railw., 33 Penn. St. 57. But we cannot admit that either of these rules has any just application to exposure to fire from the company's engines, where the danger is certain and inevitable. Post, § 82. 12 Brand v. Hammersmith & City Railw. Co., 12 Jur. N. S. 336. See also Lafayette Plank-Road Co. v. New Albany Railw. Co., 13 Ind. R. 90. 294 EMINENT DOMAIN. §75. SECTION XIII. Action for Consequential Damages. 1. Statute remedy for lands " injuriously af- fected." 2. Without statute not liable to action. 3. Are liable for negligence in construction, or use. 4. Statute remedy exclusive. 5. Minerals reserved. 6. Damages for taking land of railway for highway. 7. Compensation for minerals, when recover- able. §75. 1. The liability of railways for consequential damage to the adjoining land-owners must depend upon the provisions in * their charters, and the general laws of the state. In England railway companies are, by express statute, 1 made liable to the owners of all lands " injuriously affected " by their railways. And under this statute it has been determined, that if the com- pany do any act, which would be an actionable injury, without the protection of the special act of the legislature, they are liable under the statute. 2 So that there, any act of a railway company amounting to a nuisance in a private person, and causing special damage to any particular land-owner, is good ground of claiming damages under this section of the statute. 3 2. But in the absence of all statutory provision upon the sub- ject, railways are not liable for necessary consequential damages to land-owners, no portion of whose land is taken, where they construct and operate their roads in a skilful and prudent man- ner. 4 1 8 and 9 Vict. c. 8, § 68. a Glover v. The North Staffordshire Railw. Co., 5 Eng. L. & Eq. 335; post, §82. 3 Hatch v. Vt. Central Railw. Co., 25 Vt. II. 49. See § 82, post. 4 Monongahela Nav. Co. v. Coons, 6 Watts & S. 101 ; Radcliff v. The Mayor of Brooklyn, 4 Comstock, 195; Phil. & Trenton Railw. Co., 6 Wharton, 25; Seneca Road Co. v. Aub. & Roch. Railw. Co., 5 Hill (N. Y.), 170; Hatch v. Vt. Central Railw., 25 Vt. R. 49 ; Richardson v. Vt. Central Railw. Co., 25 Vt. R. 465. There are many other cases confirming the same general view stated in the text. Henry v. Pittsburgh & Allegheny Bridge Co., 8 Watts & Serg. 85 ; Ca- nandaigua & Niagara Railw. v. Payne, 16 Barb. 273, where it is held, that in- *156 § 75. ACTION FOR CONSEQUENTIAL DAMAGES. 295 * 3. But if the railways are guilty of imprudence, or want of skill, either in the construction or use of their road, they are jury to a mill upon another Jot of the same landowner, in consequence of the construction and operation of the railway, is a matter with which the commis- sioners have nothing to do in estimating damages for land. So in Troy & Boston Railw. v. Northern Turnpike, 1G Barb. 100, it was held that the con- sideration that the business of a turnpike, which claimed damage, would be diminished by the construction of the railway along the same line of travel, should be disregarded in estimating damage to such turnpike. " Every public improvement," say the court, " must affect some property favorably, and some unfavorably, from the necessity of the case. When this effect is merely conse- quential the injury is damnum absque injuria. Though their property has un- doubtedly depi'eciated by the construction of the railway, yet the turnpike com- pany enjoy all the rights and privileges secured to them by their charter, and no vested rights have been violated." Nor is one entitled to damage, in consequence of a highway being laid upon his line, thus compelling him to maintain the whole fence. Kennett's Petition, 4 Foster, 139. In Albany Northern Railw. i\ Lansing, 16 Barb. 68, it is said, " The commissioners, in estimating the damages, should not allow consequential and prospective damages." In Plant v. Long Island Railw., 10 Barb. 26, it is held not to be an illegal use of a street to allow a railway track to be laid upon it, and that the temporary inconvenience to which the adjoining proprietors are subject while the work of excavation and tunnelling is going on is damnum absque injuria. So also in re- gard to the grade of a street having been altered, by a railway, by consent of the common council of the city of Albany, who by statute were required to assess damages to any freeholder injured thereby, and who had done so in this case, it was held that no action could be maintained against the railway. Chapman v. Albany & Sch. Railw., 10 Barb. 360; Adams v. Saratoga & Wash. Railw., 11 Barb. 414. And in a late case in Kentucky, Wolfe r. Covington & Lexington Railw., 15 B. Monr. 404, it was held, the municipal authority of a city might lawfully alter the grade of a street, for any public purpose, without incurring any respon- sibility to the adjacent landholders, and might authorize the passage of a railway through the city, along the streets, and give them the power to so alter the grade of the streets, as should be requisite for that purpose, this being done at the ex- pense of the company, and by paying damage to such adjacent proprietors as should be entitled to them. But one, who urged the laying of the road in that place, on the ground that it would benefit him, and who was thereby benefited, cannot recover damages of the company, upon the maxim, " volenti non Jit inju- ria." A railway, when so authorized, " is not a purprestuj-e, or encroachment upon the public property or rights." And where a railway company erect a fence upon land which they own in fee, for the purpose of keeping the snow off their road, they are not liable for damages sustained by the owner of land upon the opposite side of the fence, by *157 29£ EMINENT DOMAIN. § 75. liable to any one suffering special damage thereby, 5 as in need- lessly diverting watercourses and streams, and not properly re- storing them, 5 whereby lands are overflowed or injured. 5 4. And the remedy given by statute for taking or injuriously affecting lands is exclusive of all remedies, at common law, by action, or bill in equity, unless provided otherwise in the statute.'* the accumulation of snow, occasioned by the fence. Carson v. Western Railw., Mass. Sup. Court, 20 Law Rep. 350 ; &. c. 8- Gray, 423. See also Morris & Essex Railw. v. Newark, 2 Stock. Ch. 352. And where the act complained of is the construction of an embankment, by a railway company, at the month of a navigable creek, in which the plaintiff has a prescriptive right ©f storing, landing, and rafting lumber, for the use of his saw-mill, whereby the free flow of the water is obstracted r and the plaintiff thereby deprived of the full enjoyment of his privilege, the injury is regarded as the direct and immediate consequence of the act of the company, and they are liable for the damages thereby sustained. Tinsinan v. The Belvidere Dela- ware Railw. Co., 2 Dutcher, 148. See also Rogers v. Kennebec & Portland Railw., 35 Me. R. 319; Burton v. Philadelphia W. & B. Railw., 4 Harr. 252; Hollister v. Union Co., 9 Conn. R. 436 ; Whittier v. Portland & Kennebec Railw., 38 Maine R. 26. s Whitcomb v. Vt. Central Railw. Co., 25 Vt. R. 69; Hooker v. N. H. & N. Y. Railw. Co., 14 Conn. R. 146; post, § 79. And tbere is the same liability although the lands are not situate upon the stream. Brown a. Cayuga & Sus- quehannah Railw., 2 Kernan, 486. A party is liable to an action for diverting- the water from a spring, which ran in a well-defined channel into a stream supplying a mill, at the suit of the mill- owner, notwithstanding he had permission from the owner of the land where the spring arose. Alitor if the spring spread out upon the land, having no channel. As the land-owner might drain bis land, so be may give permission to others to. do so. Dudden v. The Union, 1 Hurlstone & Norman, 627. See also Brown v. Illius, 27 Conn. R. 84 ; Robinson v. New York & Erie Railw., 27 Barb. 512; Waterman v. Conn. & Pass. Riv. Railw., 30 Vt. 610; Henry v. Vermont Cen- tral Railw., Id. 638. But in this last case it was decided that the effect ©f erecting a bridge in a stream upon the course of the current below was so far incapable of being known or guarded against, that there was no duty imposed upon railway companies to guard against an injury to land-owners below by a change of the current. See, also, New Albany & C. Railw. Co. v. Higman, 18 Ind. R. 77; Same v. Huff, 19 Id. 315 ; Colcough v. Nashville & N. W. Railw. Co., 2 Head, 171. * Regina v. Eastern Counties Railw., 3 Railw. C. 466. But in this case the act expressly provided, that the verdict and judgment should be conclusive and binding, which most railway acts do not ; but it seems questionable if this will make any difference. E. & W. I. Docks, &c. v. Gattke, 3 Eng. L. & Eq. 59 ; post, § 81. § 75. ACTION FOR CONSEQUENTIAL DAMAGES. 297 5. But in a late English case, 7 the House of Lords held, that a * railway company which had been condemned to pay for land, the owner reserving the minerals, were not liable to the land- owner, by reason of his inability to work a mine which he had discovered under the railway. The Lord Chancellor said, " The conveyance of the surface of land gives to the grantor an implied right of support, sufficient for the object contemplated, from the soil of the grantor, adjacent as well as subjacent." 6. And it has been held, that in estimating damages to a rail- way in consequence of laying a highway across land occupied by them, it is not proper to take into account the probable in- crease of business to the company in consequence. 8 7. And where the company take land, but decline to purchase the minerals after notice from the owner of his intention to work them, pursuant to the English statute, the company is not entitled to the subjacent or adjacent support of the minerals. And where the company gave notice, under the statute, that the working of the mines was likely to injure the railway, the owner was held entitled to recover compensation which had been assessed under the statute. 9 7 Caledonia Railw. v. Sprot, House of Lords, 39 Eng. L. & Eq. 16. But in Bradley v. New York & New H. Railw., 21 Conn. R. 294, where the defend- ants' charter gave them power to take land, and made them liable for all dam- ages to any person or persons, and they excavated an adjoining lot to plaintiff's, so as to weaken the foundations of his house, and erected an embankment in the highway opposite his house, so as to obscure the light, and render it otherwise unfit for use, it was held, that this did not constitute a taking of plaintiff's land, but that defendants were liable to consequential damage under their charter. But in the early case of the Wyrley Nav. v. Bradley, 7 East, 368, it is con- sidered that, where the act of parliament reserved the right to dig coal to the proprietor of mines, unless the company, on notice, elected to purchase and make compensation, where the canal was damaged by the near approach of the mine, after such notice, and no compensation made, the coal-owner was not liable, although it is there said to be otherwise in case of a house, undermined by digging on the soil of the grantor. But this case seems to turn upon the reservation in the grant. 8 Boston & Maine Railw. v. County of Middlesex, 1 Allen, 324. The reser- vation in a deed of land to a railway company of the right to make a crossing over the land, creates an easement in the land, but does not extend such ease- ment across the other lands of the company. lb. 9 Fletcher v. Great Western Railw., 4 H. & N. 242. And in North Eastern ♦158 298 EMINENT DOMAIN. §76. SECTION XIV. Right to occupy Highway. 1 . Decisions conflicting. 2. First held that owners of the fee were en- titled to additional damages. 3. Principle seems to require this. 4. Many cases take a different view. 5. Legislatures may and should require such additional compensation. 6. Courts of equity ivill not enjoin railways from occupying streets of a city. 7. Some of the states require such compensa- tion. n. 11. All do not. But the English courts, principle, and many of the state courts, do require it, as matter of right. 8. Recent decisions upon the rigid to occupy the highway. 1. The decisions in the state of New York require compensation to the owner of the fee. 2. Distinction between streets of cities and highways in the country. 3. Legislature may control existing rail- ways. 4. In Ohio the owner of the fee may claim indemnity against additional injury. 5. True distinction, whether the use is the same. 6. The present inclination seems to be to require additional compensation for laying street railway in highway. 7. Cases in the opposite direction. Judge Ellsworth's opinion. 8. Explanation of the apparent confusion. 9. Where permanent erections made in street, compensation must be made. 10. Rights of land-owners as to obstructing railway. 1 1 - 23. Recent cases in New York. § 76. 1. The decisions are contradictory, in regard to the right of a railway company to lay its track along a common highway, without making additional compensation to land-owners adjoin- ing such highway, and who, in the country, commonly own to the middle of the highway. Railw. Co. v. Elliott, 1 J. & H. 145 ; s. c. 6 Jur. N. S. 817, it was held that the general principle, that a vendor of land sold for a particular use cannot dero- gate from his own grant by doing anything to prevent the land sold from being put to that use, applies to sales to railways under compulsory powers. But it was here said that this principle will not compel the vendor of land to perpet- uate anything upon the portion of the land retained by him, which is merely accidental, though existing and of long standing at the date of the sale. Hence, where a railway company took land for a bridge in a mining district, where a shaft had been sunk many years before, but the working of the miues abandoned and the shaft filled with water for a long time before the taking the land, it was held that the land-owner was not precluded from draining the water and work- ing the mine, although the effect must be to lessen the support of the bridge to some extent, by withdrawing the hydrostatic pressure upon the roof of the mine, and the consequent support of the superincumbent strata of earth. § 76. RIGHT TO OCCUPY HIGHWAY. 299 2. Iii some of the early cases, upon this subject, it seems to have been considered, that, under such circumstances, the land- owners were entitled to additional compensation, when the land was converted from a common carriage-way to a railway. 1 1 Trustees of the Presbyterian Society in "Waterloo v. The Auburn & Roches- ter Railw. Co., 3 Hill (N. Y.), 5G7. The case of Fletcher v. Auburn & Syra- cuse Railw. Co., 25 Wend. 462, might have been put upon the same ground, but is not. The ground assumed is, that the land-owners are entitled to consequential damage, in consequence of the new use to which the land is put, which amounts to nearly the same thing. Philadelphia & Trenton Railw., 6 Wharton, 25 ; Miller v. The Auburn & Syracuse Railw. Co., 6 Hill (N. Y.), 61 ; Mahon v. Utica & Schenectady Railw., Lalor's Supp. to Hill & Denio, 156. And in Ramsden v. The Manchester South Junction & Alt. Railw., 1 Exch. 723, the Court of Exchequer expressly decide, that a railway company has no right even to tunnel under a highway, without making previous compensation to the land- owner. Seneca Road v. Auburn Railw., 5 Hill, 170; Troy v. Cheshire Railw. Co. 3 Foster, 83. But a distinction is taken between the property of adjoining land-owners in the highway or street in cities, and in the country. In the former it has been held that the fee of the streets is under the sole control of the municipal authorities, and that it is no perversion of the legitimate use of the streets to allow a railway company to lay their track upon them. Plant v. Long Island Railw. 10 Barb. 26; Adams v. Saratoga & Washington Railw., 11 Barb. 414 ; Chapman v. Albany & Schenectady Railw., 10 Barb. 360; Drake v. Hudson River Railw., 7 Barb. 508; Applegate v. Lexington & Ohio Railw., 8 Dana, 289 ; Wolfe v. Covington & Lexington Railw., 15 B. Monr. 404. In Williams v. New York Central Railw., 18 Barb. 222, 246, the court say: " A railroad is only an improved highway, and the use of a street, by a railway, is one of the modes of enjoying a public easement." But see this case reversed, post. A general power to pass highways in the construction of a canal, or railway, has been held to include turnpikes also. Rogers v. Bradshaw, 20 Johns. 735; White River Turnpike Co. v. Vermont Central Railw., 21 Vt. R. 590. But the grant of a railway from one terminus to another, without prescribing its precise course and direction, does not, prima facie, confer power to lay out the railway upon and along an existing highway. But it is competent for the legis- lature to grant such authority, either by express words, or necessary implication ; and such implication may result, either from the language of the act, or from its being shown, from an application of the act to the subject-matter, that the rail- way cannot, by reasonable intendment, be laid in any other line. Springfield v. Connecticut River Railw., 4 Cush. 63 ; s. c. 1 Am. Railw. C. 572. But in general, the adjoining owner of land to a highway is entitled to additional compensa- tion, where it is put to a different and more dangerous use. And towns have an interest in highways and bridges, which will enable them to maintain an action upon the case for their obstruction or destruction, and the conversion of the materials. Troy v. Cheshire Railw., 3 Foster, 83. But the town is not liable to pay damages assessed, by the selectmen, in laying out a highway, at 300 EMINENT DOMAIN. § 76. * 3. There is certainly great reason in this view, inasmuch as the land-owner's entire damage is to be assessed, at once, and it the request of a railway company, made necessary to supply the place of one taken by the company for their track. Ellis v. Swanzey, 6 Foster, 26G. In general, it may be stated as the settled doctrine of most of the states, that the owner of land, bounded upon a highway, owns to the centre of the way. ■ Buck v. Squiers, 22 Vt. R. 484, 495. The general rule as to monuments, re- ferred to in deeds of land, undoubtedly is, that the centre of such monuments is intended, whether it be stake, stones, tree, rock, or a highway, or stream. It is undoubtedly more a rule of policy than of intention, and as such, to answer its end, should be applied in every case, unless a clearly defined intention to the contrary be made to appear. 3 Kent, Comm. 433; Chatham v. Brainerd, 11 Conn. R. 60; Champlin v. Pendleton, 13 Conn. R. 23; Livingston v. Mayor of New York, 8 Wend. 85, 106 ; Starr v. Child, 20 Wend. 149 ; s. c. 4 Hill, 369 ; Canal Comm". v. People, 5 Wend. 423; s. c. 13 Wend. 355; Johnson v. Ander- son, 18 Me. R. 76 ; Bucknam v. Bucknam, 3 Fairfield, 463 ; Leavitt v. Towle, 8 N. Hamp. R. 96 ; Dovaston v. Payne, 2 Smith's Leading Cases, 90, and notes by Wallace & Hare ; Nicholson v. New York & New Haven Railw., 22 Conn. R. 74. But the owner of the fee of land, over which a highway passes, cannot main- tain a bill in equity, to enforce an order of commissioners, as to the manner of constructing a railway, where it crosses the highway, but the same should be brought by the principal executive officers of the town or city. Brainard v. Conn. River Railw., 7 Cush. 506. The court say : " It is only where the owner suffers some special damage, differing in kind from that which is common to others, that a personal remedy accrues to him, and certainly no rule of law rests on a wiser or more sound policy. Were it otherwise, suits might be multiplied to an indefinite extent, so as to create a public evil, in many cases, much greater than that which was sought to be redressed." Stetson v. Faxon, 19 Pick. 147; Proprietors of Quincy Canal v. Newcomb, 7 Met. 276 ; Smith v. Boston, 7 Cush. 254 ; Hughes v. Providence & Worcester Railw. Co., 2 Rhode Island R. 493. In Williams v. Natural Bridge Plank Road Co., 21 Missouri R. 580, it is held, that the grant of the right of locating a plank-road upon a county road, does not exclude the idea that the owner of the soil over which the road passes should have compensation for any injury he may sustain by converting a county road into a plank-road. This case is put, by the court, upon the ground, that the plank-road is an additional burden upon the soil, and that for this the land- owner is as much entitled to compensation as if his land had originally been taken for the purpose of the plank-road, and that to deny all redress in such case is a virtual violation of that article of the constitution giving compensation to the owner of property taken for public use. This is undoubtedly the rule of the English law, and of reason and justice, and we should rejoice to see it prevail more extensively in this country. The American courts seem to have been sometimes led astray upon this subject by the fallacy, that a railway is merely an improved highway, which for many pur- *159 § 76. RIGHT TO OCCUPY HIGHWAY. 301 could * never be done understandingly, unless the use to which it were to be put were known to the assessors. And it is obvious, poses it is, but not for all, any more than a canal. See also Railroad, ex parte, 2 Rich. 434. And the New York statute, giving railways the right to pass upon, or over turnpikes, plank-roads, rivers, &c, by restoring such ways, rivers, &c, so as not unnecessarily to have impaired their usefulness, was construed not to preclude a plank-road from recovering of the railway all damages sustained by them in a common action for damages, under the code, the company having entered upon the plank-road without causing damages to be assessed under the statute. Ellicottville Plank-Road v. Buffalo, &c. Railw., 20 Barb. 644. As the New York Court of Appeals have changed the rule upon this subject, in that state, since the body of this work was through the press, in the former edition, and only a note of the case was inserted at the close of that edition, we deem it proper here to present the opinion at length. Williams v. New York Central Railw., 1G Smith (N. Y. Ct. of App.), 97. The point decided is, that the dedication of land to the use of the public as a highway does not authorize it being taken by a railway company for their track, without compensation to the owner of the fee, although done by the consent of the legislature, and of the municipal au- thorities. Selden, J. — " This is a suit in equity, the object of which is to obtain a per- petual injunction, restraining the defendants from continuing to use and occupy with their railway a portion of a certain highway or street in the village of Syracuse, known as Washington street, and to recover damages for past occu- pation. " Washington street was gratuitously dedicated to the use of the public by the plaintiff and others, through whose land it was laid, and the Utica and Sy- racuse Railroad Company, to the rights and liabilities of which the defendants have succeeded, constructed their railway upon it without making any compen- sation to the plaintiff, and without his consent. At the time the track was laid, the plaintiff was the owner of a large number of lots fronting upon the street, a portion of which he has since sold, with a reservation of his claim against the railway company for damages, and a portion of which he still owns. The dam- ages which have accrued both upon the sold and unsold portions of the premi- ses are claimed in this suit. " The defendants, in justification of their occupation of the street, show that the charter of the Utica and Syracuse Railroad, Session Laws of 1836, p. 819, § 11, declares that their road might ' intersect ' and be built upon any highway, and that this right is confirmed by the general railway act of 1850. " They also show the express consent of the municipal authority of the city of Syracuse to such occupation. The principal question, therefore, and the only one which I deem it necessary to consider, is, whether the state and municipal authorities combined could confer upon the railway company the right to con- struct their road upon this street without obtaining the consent of, or making compensation to, the plaintiff. *160 302 EMINENT DOMAIN. § 76. that it would ordinarily be attended with far more damage to the remaining land to have a railway than a common highway laid across it. " If the railway encroaches in any degree upon the plaintiff's proprietary rights, then it is clear that the constitutional inhibition, which forbids the taking of private property for public use "without just compensation," applies to the case. "It is conceded that, by the dedication, the public acquired no more than the ordinary easement, or a right to use the premises as a highway, and that the plaintiff continues the owner in fee in respect to the unsold lots to the centre of the street, subject only to this easement. But it is contended that the taking and use of the street by the railway company does not encroach upon the reserved rights of the plaintiff, because the use of a street for the purposes of a railway is only " one of the modes of enjoying the public ease- ment." .... [After examining various cases, which, the learned judge said, " may be con- sidered as settling that a railway in a populous town is not a nuisance per se, and that when the railway company has acquired the title to the land upon which its road is located, such company being in the exercise of a lawful right, is not liable, unless guilty of some misconduct or negligence, for any consequen- tial injuries which may result to others from the operation and use of its road ; but they decide nothing whatever in regard to the question to be considered in this case," — he proceeded:] " There is also another class of cases in which, al- though the injury complained of is to the corporeal rights of the plaintiff, yet, being merely consequential, and no direct trespass or unauthorized intrusion upon the plaintiff's property being alleged, the question under consideration here could not arise. Such are the cases of Fletcher v. The Auburn and Syra- cuse Railroad Co., 25 Wend. 464, and Chapman v. Albany and Schenectady Railroad Co., 10 Barb. 360." In these and the like cases, the title of the com- pany to the ground on which its road is built, is not disputed. It is unnecessary, therefore, to notice them further here. " We come then to the consideration of the cases which do bear, with more or less weight, upon the question to be decided, and upon which, so far as author- ity is concerned, its decision must mainly depend. The first among these cases, in the order of time as well as of importance, is that of The Presbyterian Soci- ety of Waterloo v. The Auburn and Rochester Railroad Co., 3 Hill, 56 7. The declaration was in trespass for entering upon the plaintiff's premises, digging up the soil, and constructing their railway track vipon it. The defence was, that the locus in quo was a public highway, and that the charter Of the company ex- pressly authorized it to construct its road upon and across any highway. The point, therefore, was presented in the most direct manner possible, and the de- fence most emphatically overruled. The language of Chief Justice JVelson is most pertinent and forcible. He says : ' But the plaintiffs were not divested of the fee of the land by the laying out of a highway ; nor did the public thus ac- quire any greater interest therein than a right of way, with the powers and privi- § 76. RIGHT TO OCCUPY HIGHWAY. 303 * 4. If the rule of estimating damages, according to the money value of the land taken, were adopted, there would be more leges incident to that right, such as digging the soil and using the timber and other materials found within the limits of the road in a reasonable manner, for the purpose of making and repairing the same, subject to this easement, and this only. The rights and interests of the owners of the fee remained unim- paired. " ' It is quite clear, therefore, even if the true construction of the eleventh sec- tion accords with the view taken by the counsel for the defendants, that the leg- islature had no'power to authorize the company to enter upon and appropriate the land in question for purposes other than those to which it had been origin- ally dedicated in pursuance of the highway act, without first providing a just compensation therefor.' " It was argued in that case, as in this, that using the road for a railway was only a different mode of exercising the right which had been acquired by the people ; that the use was virtually the same, that of accommodating the travel- ling public. But the argument met with no favor from the court. Judge Nel- son says : ' It was said on the argument, that the highway is only used by the defendant for the purposes originally designed, — the accommodation of the pub- lic, and for this compensation has already been made. This argument ini. The Hull & Selby Railw., 2 Railw. C. 279, a similar decision is made under the English statute. • Fitchburg Railw. v. Boston & Maine Railw. 3 Cush. 58 ; s. c. 1 Am. Railw. C. 508 ; Ante, § 75. 7 Caledonian Railw. v. Ogilvy. 29 Eng. L. & Eq. 22. 8 Law Times, February, 1857, p. 329, not yet reported in this country. • The London & N. W. Railw. Co. v. Bradley, 6 Railw. C. 551. * 177 § 82. LANDS INJURIOUSLY AFFECTED. 343 situated near a tunnel on the company's road, claimed damages, because the vibration caused by the trains prevented him keep- ing his beer in the cellar in a fit state for his customers, and the value of the house was thereby lessened, being rendered unfit for a public-house ; and the plaintiffs moved for an injunction to restrain the defendant from proceeding to assess damages under the statute ; the Lord Chancellor denied the motion, upon the ground that the remedy at law was altogether adequate. But his lordship intimated a very decided opinion, that no such damages could be recovered. He says, " Whether an action will lie on behalf of a man who sustains a private injury, by the exer- cise of parliamentary powers, done judiciously and cautiously, is not an easy question, or rather it is not easy to come to the con- clusion that an action will lie. I entertain a decided opinion, (probably however erroneous,) that no such action will lie." 10 7. And where the plaintiff's damages for land taken by the company, and by severance and otherwise, were determined by an arbitrator, 11 but from the road being built across certain flats, with insufficient openings, the waters became dammed up and injured the plaintiff's remaining lands, it was held, he was en- titled to recover " as for an unforeseen injury, arising- from the manner in which the railway was constructed." But it is here said, " The * company might, by erecting their works with proper caution, have avoided the injury." It seems this is the only ground of an action. 8. In a doubtful case the court issued an alternative manda- mus and required a return of the facts. 12 So, too, a party whose 10 Hatch v. Vermont Central Railw. Co., 25 Vt. R. 49 ; s. c. 28 Id. 142. 11 Lawrence v. Great N. Railw. Co., 6 Railw. C. 65G ; s. c. 4 Eng. L. & Eq. 265 ; ante, § 79, n. 6 ; § 74, n. 7 ; L. & Y. Railw. v. Evans, 19 Eng. L. & Eq. 295. Under most of the American statutes, the damages, as well prospective as pres- ent, must be assessed at once, and no recovery can be had for unforeseen in- jury, more than in any case of a recovery of damages for a tort. But in the case of Lancashire & Y. Railw. v. Evans, it is obvious, from the elaborate review of the case by the Master of the Rolls, that the English courts now regard the land-owner as entitled to make new claims, from time to time, as they occur, for any injurious consequence of the construction of the works. For any unlawful act, in the construction or use of the works, an action at common law is the proper remedy. 12 Queen v. The North Union Railw. Co., 1 Railw. C. 729. *178 344 EMINENT DOMAIN. § 82. ferry has been materially lessened in value, by obstructing ac- cess to it, may recover damages of the company under the stat- ute. 13 So, too, if a towing-path be obstructed, or the navigation diverted from it, the owner under a similar statute may have compensation. 14 So, too, an occasional flooding of lands, caused by a proper execution of parliamentary powers, is within the remedy given by statute. 15 9. Some questions under this head have arisen, in regard to mines and minerals, not of sufficient importance to be stated in detail. 16 Where the damage resulted from the company turning a brook, the court ordered a mandamus. 17 But brewers, accus- tomed to take water from a public river, are not entitled to re- ceive compensation when the waters were deteriorated by the works of a dock company. 18 10. It was held that a tithe-owner is not entitled to compen- sation unless the act contain an indemnity in his favor. 19 The interest of a tithe-owner is too remote and incidental to be the subject of general indemnity. It often forms the basis of special statutory provisions for indemnity. 13 In re Cooling, 19 Law J. Q. B. 25; s. c. Hodges on Railways, 277. It is said here that a ferry is different from a public-house, whose custom is said to be injured by obstructing the travel and access to the house, by cutting through thoroughfares leading to it, which, it has been held, is no ground of claiming damage under a similar statute. The King v. The London Dock Co., 5 Ad. & Ell. 163. But this case is considered as overruled by Reg. v. The Eastern Counties Railw. Co., 2 Q. B. 347; Chamberlain v. East End of London & Crys. Pal. Railw. Co., 8 Jur. N. S. 935. 14 The King v. Commis. of Thames & Isis, 5 Ad. & Ell. 804. 15 Ware v. Regents Canal Co., 3 De G. & Jones, 212. 16 Fenton v. Trent & Mersey Nav. Co., 9 M. & W. 203 ; Cromford Canal Co. v. Cutts, 5 Railw. C. 442 ; The King v. Leeds & Selby Railw. Co., 3 Ad. & Ell. 683. 17 Reg. v. North Midland Railw. Co., 2 Railw. C. 1. 18 The King v. Bristol Dock Co., 12 East, 429. But where mines below the company's works are injured in consequence of the negligent or imperfect mode of constructing or maintaining the company's structures and cuttings, the person so injured may maintain a common-law action against the company. Bagnall v. Lon- don & N. W. Railw., 7 H. & N. 423. Affirmed in Exchequer Chamber, 31 Law J. 480. See also Reg. v. Fisher, 3 B. & S. 191 ; s. c. 9 Jur. N. S. 571 ; Elliot v. Northeastern Railw. Co., 9 Jur. N. S. 555 ; s. c. 10 Ho. Lords Cas. 333. 19 Rex. v. The Commissioners of Nene Outfall, 9 B. & C. 875; London & Blackwall Railw. Co. v. Letts, 3 H. L. Cases, 470 ; Hodges on Railways, 289, n. (m) ; 8 Eng. L. & Eq. 1. § 82. LANDS INJURIOUSLY AFFECTED. 345 11. Iii a recent well-considered case, the rule in regard to what damage is to be included under the terms " lands injuri- ously affected," or equivalent terms, is thus laid down : " All direct * damage to real estate by passing over it, or part of it, or which affects the estate directly, although it does not pass over it, as by a deep cut or high embankment, so near lands or buildings as to prevent or diminish the use of them, by endan- gering the fall of buildings, the caving of earth, the draining of wells, the diversion of water-courses," by the proper erection and maintenance of the company's works. " Also, as being of like character, blasting a ledge of rocks so near houses or build- ings as to cause damage ; running a track so near as to cause imminent and appreciable danger by fire ; obliterating or ob- structing private ways leading to houses or buildings," — all these and some others, doubtless, are included. 12. " But that no damage can be assessed for losses arising directly or indirectly from the diversion of travel, the loss of custom to turnpikes, canals, bridges, taverns, coach companies, and the like ; nor for the inconveniences which the community may suffer in common, from a somewhat less convenient and beneficial use of public and private ways, from the rapid and dangerous crossings of the public highways, arising from the usual and ordinary action of railroads, and railroad trains, and their natural incidents." 20 13. It is held also in this case, that no damages can be assessed under the statute, for cutting through a watercourse in making an embankment without making a culvert, whereby the water is made to flow back and injure the plaintiff's land, at a distance 20 Proprietors of Locks & Canals v. Nashua & Lowell Railw., 10 Cush. 385. Shaw, Ch. J. (391, 392). Nor is the party, whose lands lie near a railway line, entitled to compensation, for being injuriously affected, by persons in the trains overlooking the grounds, thus rendering them less comfortable and secluded, for the walks of the family and visitors. Nor can the party claim compensation for vibration of the ground caused by the use of the road, the statute only extending to damages caused by the construction of the works. Reg. v. Southeastern Railw., in re Penny, 7 Ellis & Black. 660, ante pi. 5. But actual injury dur- ing the construction of a railway, by vibration caused by the ballast trains, is to be compensated ; but by Campbell, Ch. J., it is said such vibration caused by running trains after the road is completed will merit a different consideration. lb. See also Croft v. London & N. W. Railw. Co., 3 B. & S. 436. * 179 346 EMINENT DOMAIN. § 82. from the railway, no part of which is taken, the remedy being by action at common law. 20 14. And where the company, by consent of the land-owner, enters upon the land and makes the requisite erections, which are subsequently conveyed to them with the land by the land-own- ers, it was held such grantor is not estopped from claiming dam- ages resulting from want of proper care and skill in constructing the works, or from neglect to keep them in repair. 21 15. The rule of the English courts that damages can only be recovered for injuriously affecting land, where but for the stat- ute the act complained of would be just ground of action at com- mon law, does not apply where part of the land is taken and damages are sought, not only for the part taken but for the rest of the land being injuriously affected, either by severance or otherwise. 22 And it was here held that the owner of a mill was entitled to have damages assessed to him for the increased ex- posure of the same to fire by the passage of the company's trains. But loss of trade caused by the operations of the company dur- ing the construction of their works is not damages for which the party is entitled to compensation. 23 But a person may claim damages on the ground of being injuriously affected on account of the obstruction or diversion of a public way by the construc- tion of the works of a railway. 24 16. The owners of land adjoining a railway track are affected with presumptive notice of the rights of the company from long use, the same as in regard to other owners in possession. 25 And equity will enjoin an adjoining owner to a railway track against making erections which will interfere with the company repair- ing its track. 26 21 MQrris Canal & Banking Company v. Ryerson, 3 Dutcher, 457 ; Water- man v. Conn. & Pass. Riv. Railw., 30 Vt. R. G10 ; Lafayette Plank Road Co. v. New Albany, &c. Railw., 13 Ind. R. 90. 22 S. T. & A. Railw. Co., in re, 10 Jur. N. S. 614. 23 Senior v. Met. Railw. Co., 2 H. & C. 258, Cameron v. Charing-Cross Railw. Co., 16 C. B. N. S. 430 ; overruled in Exch. Ch., Ricket v. Same Co., 13 W. R. 455, where the proposition of the text is established. 24 Wood v. Stourbridge Railw. Co., 1G C. B. N. S. 222. See also Boothby v. Androscoggin & K. Railw. Co., 51 Me. R. 318. 25 Macon & Western Railw. Co. v. McConnell, 27 Ga. R. 481. 26 Cunningham v. Rome Railw. Co., 27 Ga. R. 499. §83. DIFFERENT ESTATES PROTECTED. 347 17. It seems scarcely needful to repeat what has heen so often declared by the courts, that railways have the exclusive right to possession of their roadway, and to exclude all intrusions there- on, whether from persons or structures. 27 ♦SECTION XXI. Different Estates protected. 1. Tenant's good-will and chance of renewal protected. 2. Tenants entitled to compensation for change of location. 3. Church property in England, how esti- mated. 4. Tenant not entitled to sue, as owner of pri- vate way. 5. Heir should sue for compensation. 6. Lessor and lessee both entitled to com- pensation. 7. Right of wag, from necessity, protected. 8. Mill-owner entitled to action for obstruct- ing water. 9. Occupier of land entitled to compensa- tion. 10. Tenant, ivtthout power of alienation, forfeits his estate, by license to com- pany. 11. Damages not transferable by deed of land, after they accrue. § 83. 1. The English statute provides for the protection of the interests of lessees in certain cases. 1 And lessees from year to year have recovered, for the good-will of the premises, which would have been valuable as between the tenant and a pur- chaser, although it was not a legal interest as against the land- lord. 2 But not when the tenancy was from year to year, de- terminable at three months' notice, with a stipulation against underletting without leave. 2 So, too, an under-tenant is entitled to compensation for good-will. 3 But in a lease for fourteen years, with covenant to yield up the premises at the end of the term, with all fixtures and improvements, where the company suffered the lease to expire and then turned out the tenant, held that he was entitled to compensation for good-will and the chance of 57 Railw. Co. v. Hummell, 44 Penn. St. 375; Harvey v. Lackawanna & B. Railw. Co., 47 Id. 428. 1 8 & 9 Vict, c. 18, §§ 119 to 122, and 8 & 9 Vict. c. 20, § 43. 2 Ex parte Farlow, 2 B. & Ad. 341 ; The Matter of Palmer v. Hungerford Market, 9 Ad. & Ellis, 463. 3 Rex v. The Hungerford Market, 4 B. & Ad. 592. *180 348 EMINENT DOMAIN. § 83. beneficial renewal, but not for improvements, but nevertheless these might be considered by the jury in estimating the chance of beneficial renewal. 4 2. The loss which a brewer sustained by having to give up his business till he could procure other premises, suitable for carrying it on, was held a proper subject of compensation under a similar statute. 5 Where the act required tenants from year to year to give up premises to the company, upon six months' notice to quit, * without reference to the time when their term began, but allowed them compensation, if required to leave be- fore their term expired, it was held, that when the six months' notice required the tenant to leave at the end of his term, he was not entitled to compensation. 6 But where a tenant gives up premises under a six months' notice from a railway com- pany, when he is entitled to compensation, without demanding it of the company, he is still bound to pay full rent to his land- lord. 7 3. Church property in England is estimated with reference to the cost of a new site and similar erections, to be fixed by agreement between the company and the diocesan and arch- bishop of the province. But after this appropriation of the site of a church to secular purposes, the rector is entitled to have his interest in the premises connected therewith estimated at its value for secular uses. 8 4. Where the charter of a company imposed a penalty upon them for any obstruction or interruption of a road, and in the case of a private road gave the right to recover the penalty to the owner of the road, it was held, that the tenant of the farm over which the road passed could not sue for the penalty. 9 5. Where land of a deceased person is taken for a railway, 4 Rex v. The Hungerford Market, 4 B. & Ad. 592. But the ease of Rex v. Liv. & Manchester Railw., 4 Ad. & Ellis, 650, seems to treat a similar estate as absolutely gone, at the end of the term, and the company bound to make no compensation. 5 Jubb v. Hull Dock Co., 9 Ad. & Ellis (x. s.), Q. B. 443. 6 The Queen v. London & Southampton Raihv. Co., 1 Railw. C. 717. 7 AYainwright v. Ramsden, 1 Railw. C. 714. 8 Hilcoat v. The Archbishops of Canterbury & York, 10 C. B. 327. 9 Collinson v. Newcastle & Darlington Railw., 1 Car. & Kir. 546. * 181 § 83. DIFFERENT ESTATES PROTECTED. 349 the heir and not the administrator is entitled to the damages for such taking, and to prosecute for the recovery thereof, al- though the administrator had previously represented the estate insolvent, and afterwards obtained a license to sell the real es- tate for the payment of debts. 10 6. And a tenant, whose lease began before, and who was in possession at the time an injury was done, is entitled to recover damages for an injury sustained by him, in building a turn- pike road. 11 But the lessor and lessee are each entitled to recover compensation for the damage sustained by them respec- tively. 12 7. And where the plaintiff had no access to his land except over the land of his grantor, it was held, that he had a way, by * necessity, across such land, and that he was entitled to main- tain an action against a railway company for obstructing it. 13 8. So also where the free flow of water from a saw-mill is obstructed by the erection of a railway bridge below the mill, the company are liable to the owner of the mill in an action of tort. 14 But they are not liable for any increased expense thereby occasioned to the mill-owner, in getting logs up the stream to his mill, whether the stream be navigable for boats and rafts, or not. 14 9. Where the statute gives remedy against all persons inter- ested, the occupant of land is liable to be effected by the proceed- ings, and a similar construction will prevail where the remedy is given to all interested. 15 It seems indispensable to the asserting of any valid claim for land damages that the claimant prove the character and extent 10 Boynton v. Peterboro & Shirley Railw., 4 Cush. 467. 11 Turnpike Road v. Brosi, 22 Perm. St. 29. 12 Parks v. City of Boston, 15 Pick. 198. See also Burbridge v. New Albany & S. Railw., 9 Ind. R. 546. 13 Kimball v. The Cocheco Railw., 7 Fost. 448. 14 Blood v. Nashua & Lowell Railw., 2 Gray, 137. 15 Gilbert v. Haverrneyer, 2 Sand. 506. The term " owner" in a statute requir- ing compensation by railway companies for land taken by them includes every person having any title to or interest in the land, capable of being injured by the construction of the road, and extends to the interest of a lessee or termor. Bait. & Ohio Railw. v. Thompson, 10 Md. R. 76; Lewis v. Railw., 11 Rich. 91; Sacramento Railw. v. Moffatt, 7 Cal. R. 577. *182 350 EMINENT DOMAIN. § 84. of his title. 16 And it is here said that possession alone will not be regarded as ground of presumption of title in fee. And where the entire fee in the land is condemned to the use of the railway, and the money paid into court, it must be apportioned to the several owners of different interests in the land, as nearly as possible, as if it were the land itself. And the same result will follow where a permanent right of way is given in any form to a perpetual corporation. 17 10. And where a tenant, who held the land for a term of years, with a strict clause against alienation or subletting, assigned a small portion to a railway, for a temporary purpose, the company not dealing with the landlord, or giving him any compensation for the use of the land, it was held, that he was entitled to main- tain ejectment against the company, and his tenant, for the for- feiture incurred by this subletting. 18 11. And the damages assessed are payable to the owner of the land at the date of the adjudication, and do not pass by deed to a subsequent purchaser. 19 And where the company gave notice to treat for land to a tenant at will, and were allowed to take pos- session and complete their line, a person who had subsequently purchased an undivided ^portion of the land was not allowed to maintain a bill to restrain the company from the use of the land. 20 SECTION XXII. Arbitration. 1. Attorney, without express power, may re- I 2. Award binding, unless objected to in ftr disputed claim. court. § 84. 1. It was held that an attorney, who had no authority under seal, either to defend or refer suits, might nevertheless make a valid reference of a disputed claim against the company, under a judge's order. 1 15 Robbins v. Milw. & Horricon Railw. Co., 6 Wise. R. 636. 17 Ross v. Adams, 4 Dutcher, 160. 18 Legg v. Belfast & Bellamy Railw., 1 Irish Law (x. s.), 124, n. 10 Lewis v. Wilm. & Manchester Railw., 11 Rich. Law, 91. 40 Carnochan v. Norwich & Spalding Railw., 26 Beav. 169. 1 Faviell v. The Eastern Counties Railw., 2 Exch. 344. It is held generally, §85. ARBITRATION. — STATUTE OF LIMITATIONS. 351 * 2. And if the company object that the arbitrator awarded upon matters not submitted, he should have applied to the court to revoke the submission, or set aside the award, upon its return into court ; but not having done so, the claim being set up and entertained by the arbitrator, the award is binding. 1 The same principles would probably obtain in the American courts. SECTION XXIII. Statute of Limitations. 1. General limilation of actions applies to kind claim. 2. Filing petition will not save bar. 3. Acquiescence of forty years by land-owner, effect of. 4. The estoppel xvill take effect if the use is clearly adverse. § 85. 1. Where neither the general statutes or the special act contain any specific limitation, in regard to claims upon railway companies for land damages, it has been held that the general statute of limitation of actions, for claims of a similar character, will apply. And where the claim was for an injury to an island, caused by the erection of a railway bridge, and to the award of the viewers, the company plead actio non infra sex annos, the plea was held good. 1 2. And where the statute provides, that no process to recover compensation for land or property taken by a railway shall " be sustained, unless made within three years from the time of taking the same," a mere filing of an application with the clerk of the county commissioners, without bringing it to the notice of the commissioners, or any action of theirs thereon until the three years have elapsed, will not save the bar of the statute. 2 in the English courts, that an attorney should be appointed under seal to prose- cute and defend suits, on the part of corporations. Thames Haven Dock & Railw. Co. v. Hall, 5 Man. & G. 274 ; Arnold v. The Mayor of Poole, 4 Id. 860. But when, by the incorporation of a railway company, the directors were em- powered to appoint and displace any of the officers of the company, the appoint- ment of an attorney, by the company, need not be under seal. See post, § 141. 1 Forster v. The Cumberland Valley Railw., 23 Penn. St. 371. 2 Charles lliver Railw. v. County Commissioners of Norfolk, 7 Gray, 389. *183 352 EMINENT DOMAIN. § 85. Tho land-owner may also traverse the right of the company to take the land, either originally, for the location and construction of their road, on the ground that it does not come within their line, or the line of deviation from the prescribed route, or that they have not taken the proper preliminary steps, or for any other cause ; or, * when the company propose to change their route, or to enlarge their accommodation works, on the ground of having made their exclusive election in one case, or the want of necessity in the other. 3 3. Where the land-owner had allowed the company, upon an appraisal in the alternative stating both the value of the land and of the annual use, to occupy the same for the purposes of a canal, for more than forty years, paying an annual sum about the same which had been awarded, the award being defective in law, in that no person had been made a party to the proceeding who was authorized to represent the land-owner, who was an in- fant, as it was held that this was no ground of presuming a con- tract on the part of the land-owner to convey the land in fee in consideration of a rent charge. 4 But it was held that an eject- ment on the part of the land-owner, and the erection of a bridge by him, ought to be restrained by injunction, on the ground of acquiescence, the company undertaking to put in force their par- liamentary powers which had not expired, and thus obtain the land. 4. But in another case, where the party had, by contract with the original land-owner, used the land of others for more than fifty years, first for a tram-way and subsequently for a railway in a different place across the same land, it was held that the pres- ent land-owner was concluded by the agreement, and that the change of one place for another would not defeat the estoppel. 5 All the party can claim is, to have damages under the statute. 5 » South Carolina Railw. v. Blake, 9 Rich. 228 ; ante, § 72; post,§ 105, n. 14. 4 Somerset Canal Co. v. Harcourt, 2 De G. & J. 596. 6 Mold v. Wheatcroft, 29 Law J. Ch. ch. 11 ; s. c. 27 Beav. 510. *184 § 86. COMPANY BOUND TO PURCHASE WHOLE OF HOUSE, ETC. 353 CHAPTER XII. REMEDIES BY LAND-OWNERS UNDER THE ENGLISH STATUTE. SECTION I. Company bound to purchase the whole of a House, etc. 1. The company to take the accessories ivith the house. 2. But the owner has an election in regard to that. 3. A deposit of the appraised value means the value of all the company are bound to take. 4. Company bound to take all of which they take part, and pay special damage be- sides. 5. Where company desire part, not compella- ble to take whole unless they persist in taking part. 6. Land separated from house by highway not part of premises. § 86. 1. By the English statute, 1 railway companies are bound to purchase the whole of a house and lands adjoining, if required, when they give notice to take part ; and also if the house or the principal portion of it be within fifty feet of the railway, and deteriorated by it. The act includes house, garden, yard, ware- house, building, or manufactory ; but it was considered that this did not extend to a lumber-yard. 2 Under a similar provis- ion, in a special charter, it was held, that the company were not bound to take the entire premises, where the principal dwelling- house only was within the prescribed limit. 3 2. It has been considered that this statute gave an option to the land-owner, whether the company should take the whole or part of the house, so situated. 4 And in this last case it was 1 8 & 9 Vict. ch. 18, § 92. 2 Stone v. Commercial Raihv., 9 Simons, 621 ; s. c. 1 Railw. C. 375; Reg. v. Sheriff of Middlesex, 3 Railw. C. 396. 8 Reg. v. L. & Greenw. Railw. Co., 3 Railw. C. 138. 4 Sparrow v. The Oxford, Worcester, & Wolverhampton Railw. 13 Eng. L. & Eq. 33. By Lord Cramcorth and Sir Knight Bruce, L. J. See also Barker v. N. Staffordshire Railw., 5 Railw. C. 401, 419, where Lord Cotlenham, Chancellor, intimates an opinion, that certain parcels of land (and a brine-pit and steam- engine upon one of them) adjoining salt-works, are not a part of the manufac- VOL. I. 23 *667 354 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 86. held, that * a narrow strip of land adjoining an iron and tin- plate factory, which had been used as a place of deposit for rub- bish, and over which, a person had a right of way, was such a part of the manufactury, that the company were bound to take the whole. 4 3. And the statute requiring a deposit of the appraised value of the land taken by a railway company, before entering upon the same, imports the value of the whole premises, in all cases where the company give notice of requiring part and the owner elects, according to the terms of the statute, that they shall take the whole. 5 4. Where three adjoining houses had gardens laid out from the plat of land upon which they were built for the accommoda- tory. But his lordship gives a very satisfactory reason for denying the aid of the court, viz., " That a party having known his rights, and having had his claim, in respect of them, disposed of [upon the original bill, and by leave of court then filing a supplemental bill], if he then raises a new ground of equity, does not present his case in a form to entitle him to ask for the extraordinary interposition of this court." In Sparrow v. The Oxford, &c. Railw. Co., 13 Eng. L. & Eq. 33, Lord Cranworth, L. J., made some very significant suggestions in regard to the rights of land-owners to compensation. " The only remaining question," said his lord- ship, " is one which has been raised now for the first time, namely, that if they cannot take the land, they are now entitled to burrow under it, as it were to make a tunnel, which they say they are able and willing to do, without taking or touching any part of the surface. It was argued in this way, ' Suppose the manufactory were at the top of a hill, and you were burrowing under it, at the distance of a thousand feet, are they then taking part of the manufactory ?' I do not feel myself called upon to answer that question, but if I were, I rather believe you are, on the principle of the maxim, Cujus est solum, ejus est usque ad inferos. Do you mean to say, that if you are an inch below the surface, you would not be taking any part of the manufactory ? I am inclined to think that however deep below [the tunnel was made,] it would be within the enactment. If that has been a casus omissus, I think it ought to be construed in a way most favorable to those who are seeking to defend their property from invasion." In the case of Ramsden v. The Manchester S. Junction Railw., 1 Exch. 723, it •was determined, that a railway company could not tunnel, even a highway, with- out first making compensation to the owner of the freehold, under the Land Clauses Act. The company are not bound to take property more than fifty feet from the centre line of the road, unless it is incapable of separation. Queen v. London & G. Railw., 3 Ad. & Ell. (n. s.) 166. * Underwood v. The Bedford & Cambridge Railw., 7 Jur. N. S. 941 ; Dadson v. East Kent Railw. lb. *668 § 86. COMPANY BOUND TO PURCHASE WHOLE OF HOUSE, ETC. 355 tion of each, and a railway company propose to take a strip o land from the gardens attached to two of the houses upon the side most remote from the houses, and the owner elected to have the company take the houses, which they declined to do, but took the land ; the company were held ' liable to purchase the whole of the two houses, the gardens being part of the houses to which they were attached, and that they were also liable to make compensation for any injury sustained in respect of the other house. 6 5. It has also been determined, that the railway, after giving notice to purchase part of a house, &c, and being required by the owner to take the whole, cannot be compelled by manda- mus to take the whole, as the act of parliament imposes no such obligation. The statute is intended to protect the owner from being compelled to sell a part, but does not compel a company, wanting a part only, to take the whole, if they chose to waive their claim altogether, and the . mandamus having claimed the whole, could not go for a part only. 7 6. The plaintiff was an owner in fee of a house on one side of 9 Cole v. Crystal Palace Railw., 5 Jur. N. S. 1114 ; s. c. 27 Beav. 242. The term " house " in the statute includes all that would pass by the same word in an ordinary conveyance. Hewson v- London & S. W. Railw. Co., 8 W. It. 467; Ferguson v. Brighton & S. C. Railw., 9 L. T. N. S. 134 ; s. c. 30 Beav. 100. It will therefore embrace all of a series of gardens connected by a gravel walk pass- ing through the walls of the different gardens. lb. See King v. Wycombe Railw., 6 Jur. N. S. 239 ; s. c. 28 Beav. 104. A hospital may compel a railway company to take the whole of the hospital if they insist upon takino- one wine used for the same purposes as the rest of the building, although connected only by a wall. St. Thomas Hospital v. Charing-Cross Railw. Co., 7 Jur. N. S. 256. Houses in the course of construction come within the statute. Alexander v. Crystal Palace Railw., 8 Jur. N. S. 833 ; s. c. 30 Beav. 556. See also Chambers v. London, Chatham, & Dover Railw., 8 L. Times, N. S. 235. Land used for purposes of pas- time, as archery and dancing, but chiefly as a pasture for cows, although impor- tant to the enjoyment of the house, is not so a part of the same premises as to require the company to take it with the house or the house with that. Pullin"- v. London, Chatham, & Dover Railw. Co., 10 Jur. N. S. 665 ; s. c. 33 Beav. 644. 7 Queen v. The London & S. W. Railw. Co., 5 Railw. C. 669. The remark of Lord Denman, in closing his opinion in this case, is applicable to similar cases everywhere. " We have to lament the waste of time that has occurred, from the obscurity thrown about the case by the superfluous matter foisted into the record." 356 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 87. a high road, -where he had resided for a great number of years. Some years ago he purchased six acres of land on the other side of the road, upon part of which there were built three houses. Two of the houses were let to tenants, the third house was occu- pied by the plaintiff's groom, and other servants, the rest of the land which lay beyond the houses was used by the plaintiff for pasturing his cows, horses, &c. The plaintiff alleged that the six acres were indispensable to the enjoyment of the houses by him. A railway wanting part of the six acres which lay about 250 yards from the plaintiff's house, the plaintiff sought to com- pel the company to take the house also, on the ground that the land formed part of his house, within the 92d section of the Act. But the motion for injunction having been denied by the Vice-Chancellor, Wood, his judgment was affirmed in the Court of Chancery Appeal, Lord Justice Knight Bruce dubitante. 8 ♦SECTION II. The Company compellable to take intersected Lands, and the Owner to sell. » 1 . When less than half an acre remains on 2. Owner must sell where land of less value either side, company must buy. than railroad crossing. 3, 4. Word " town " how construed. §87. 1. By the 93d section of the English statute the com- pany is compellable to take lands, not in a town, or built upon, which are so intersected by the works as to leave either on one or both sides a less quantity of land than half a statute acre. 2. And by section 94, if the quantity of land left on either side of the works a is of less value than a railway crossing, and the owner have not other lands adjoining, and require the promo- • Steele v. Midland Railw., 12 Jur. N. S. 218. 1 8 and 9 Vict. ch. 18, § 93 and 94 ; Falls v. Belfast & B. Railw., 11 Irish L. R. 184. This statute does not apply to lands in a town or built upon. Marriage v. The Eastern Go's. R. and the London & B. Railw., 30 Law Times, 264 ; s. C. 9 Ho. Lds. 32, where the judgment of the Excheq. Ch. 2 H. & N. 649 is reversed, and the statute held to apply to all intersected lands, whether in a town or not. *669 § 88. NOTICE TO TREAT FOR PURCHASE OF LAND. 357 ters to make the crossing, the owner may he compelled to sell the land. 3. It was held, that the term " town," in a turnpike act, im- ported a " collection of houses," and that the extent of the town was to be determined by the popular sense of the term, and to include all that might fairly be said to dwell together. 2 4. And in another case, it is said, that the term includes all the houses, which are continuous, and that this includes all open spaces occupied, as mere accessories to such houses. 3 SECTION III. Effect of Notice to Treat for the purchase of Land. 1. Important question under statute of limita- 5. Subsequent purchasers affected by notice tions. to treat as the inception of title. 2. Company compelled to summon jury. 3. Ejectment not maintainable against com- pany. 4. Powers to purchase or enter, how saved. 6. But the notice may be withdrawn before anything is done under it. 7. Not indispensable to declare the use, or that it is for station, and another company to participate in use. § 88. 1. Inasmuch as the time for taking land, by the English statute, is limited to three years, an important question has arisen there, in regard to the effect of instituting proceedings, by giving notice to treat, within the time limited, although not in season to have the matter brought to a close before its expi- ration. 2. This having been done, and the land-owner having inti- mated his desire that a jury should be summoned, but the com- pany taking no further steps, the question was whether a writ of mandamus would lie, after the prescribed period had elapsed, to compel *the company to proceed to summon a jury. It was de- termined in the affirmative. 1 2 Reg. v. Cottle, 3 Eng. L. & Eq. 474 ; s. c. 1G Q. B. 412. 3 Elliott v. South Devon Railw., 2 Exch. 725. 1 The Queen v. Birmingham & Oxford Junction Railw., 6 Railw. C. C28 ; Birmingham & Oxford June. Railw. Co. v. Regina, 4 Eng. L. & Eq. 276, where the judgment of the Q. B. was fully affirmed in the Exchequer Chamber. The court say, " The notice to treat is an inchoate purchase, and after that has been *670 358 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 88. 3. So, too, where the company have taken possession of land, by depositing the value of the land in the Bank of England, and executing a bond to the party to secure payment, subject to future proceedings, as they may do, and where the company took no further steps to ascertain the sum to be paid by them, as compensation, until the time limited for exercising their com- pulsory powers had expired, it was held, that having rightfully entered upon the land before the expiration of the prescribed period, an ejectment could not be maintained against them after that period. The proper remedy for the land-owner is by writ of mandamus. 2 4. So, too, if they have made the deposit, and given a bond for the payment of the price, under this same section, 3 a day be- given, in due time, it is competent for the land-owner to compel the completion of the purchase." But where an annuitant, having power to enter upon land and distrain for his security, was served with notice by a railway company of their intention to purchase, and the company subsequently purchased the prop- erty of a prior mortgagee, who had a power of sale, it was held the annuitant could not, in equity, compel the company to pay the owners of the annuity, he alleging no fraud or other improper conduct on the part of the company. Hill v. Great N. R., 27 Eng. L. & Eq. 198, reversing the decision of one of the vice- chancellors in s. c. 23 Eng. L. & Eq. 5G5. See also Met. Railw. Co. v. Wood- house, 11 Jur. N. S. 296. If the land-owner lie by an unreasonable time, he cannot maintain mandamus, or where the company abandon their notice to take part of land upon the owner serving notice to take the whole. Quicke ex parte, 13 YV. R. 924. 2 Doe d. Armistead v. The N. Staffordshire Railw., 4 Eng. L. & Eq. 216. The expression " deviation," which appears in the acts of parliament and in the Eng- lish cases, is here determined to import the distance from the line of railway upon the parliamentary plans which are the basis of the charter, and one hun- dred yards " deviation " is commonly allowed, in the acts. Worsley v. The South Devon Railw. Co., Id. 223. See also Lind v. Isle of Wight Ferry Co., 7 L. T. N. S. 416. The courts will restrain the company within the limits of deviation allowed by the act, even where the plans deposited contain no limitation. Hig- ley v. Lan. & Y. Railw. Co., 4 Gr. 352. The line of deviation controls the right rather than the delineations on the plan. Weld v. So. Western Railw. Co., 32 Beav. 340; Knapp v. L. C. & Dover Railw., 2 H. & C. 212. 3 The Marquis of Salisbury v. The Great Northern Railw. Co., 10 Eng. L. & Eq. 344. The position is here distinctly assumed, that after the notice to treat the parties stand in the relation of vendor and purchaser, and the company are not at liberty to recede. All the after proceedings are merely for the purpose of ascertaining the price of the land. Sparrow v. Oxford & Worcester Railw. Co., 9 Hare, 436; 12 Eng. L. & Eq. 249. § 88. NOTICE TO TREAT FOR PURCHASE OF LAND. 359 fore the efflux of the time limited, although they had not en- tered upon the land, their powers to purchase or enter upon the lands are saved. 3 5. And where a railway company gave notice to a tenant at will to take part of the lands, and the company was allowed to take possession and complete their line, and afterwards a person, who had, subsequently to the notice, purchased one ninth of the land, filed a bill merely praying an injunction to restrain the railway company from entering upon, continuing in possession of, or otherwise interfering with the land, the bill was dismissed with costs. 4 6. But it seems to be considered that mere notice by a rail- way company of an intention to take land, may be withdrawn if done before the company have taken possession of the land, or done anything in pursuance of the notice. 5 And this is espe- cially true where the land consists of a house and appurtenances, and the notice only extends to taking a part of the land, and the owner requires the company to take the whole land with all the buildings. 7. It is no objection to a notice to take land for the use of a railway company that it does not declare the use for which it is proposed to be taken ; nor will it affect the title of the company that it is taken for a station for the joint use of that and another company, which latter company could not have taken the land for their own use alone. 6 4 Carnochan v. Norwich & Spalding R. Co., 26 Beav. 169. But a notice to treat, in order to become the inception of title, must be followed up within a reasonable time, or it will be regarded as abandoned. Hedges v. The Metro- politan Railw. Co., 6 Jur. N. S. 1275. 5 King v. The Wycombe Railw. Co., 6 Jur. N. S. 239 ; s. c. 28 Beav. 104 ; Gardner v. Charing-Cross Railw. Co., 2 J. & H. 248; B.C. 8 Jur. N. S. 151. Where the company agree verbally to take the whole of a house and land, that is a valid waiver of notice under the statute, and will be enforced in equity. Binney v. Hammersmith & City Railw. Co., 9 Jur. N. S. 773. Tenant coming into possession of land after notice to treat, and before proceedings taken, is en- titled to renewal of notice, so as to make him party. Carter v. Great Eastern R. Co., 9 Jur. N. S. 618. 6 Wood v. Epsom & L. Railw. Co., 8 C. B. N. S. 731. 360 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 89. ♦SECTION IV. Requisites of the Notice to Treat. 1. Notice to treat must, in terms or by refer- ence, accurately describe land. 2. After notice to treat company compellable to purchase. Company cannot retract after giving notice to treat. 3. New notices given for additional lands. 4. Power to take land not lost by former un- warranted attempt. 5. Lands may be taken for branch railway. 6. Effect of notice in case of a public park. § 89. 1. As by the English statute the notice to treat is made the act of purchase, it is of the first importance that it should describe the lands accurately. But even where the notice was indefinite, if it be accompanied with a plan which shows the very land proposed to be taken, it will be sufficient; 1 or reference may be made to the parliamentary plan. 1 The company can only claim to use what their notice and the annexed plan shows clearly was submitted to the appraisers to value. 2 2. It was held long ago in the English courts, under similar statutes for taking land by compulsion, that the notice to treat constituted the act of purchase, and that after giving it there remained no longer to the company any power to retract, and they will be compelled by mandamus to complete the purchase. 3 3. And where the company had given notice to take twenty perches of land, they cannot subsequently give notice to restrict the land to one perch. 4 But the company, having issued one notice, may issue a second, requiring additional lands. 5 They 1 Sims v. The Commercial Railw., 1 Railw. C. 431 ; Hodges on Railways, 197. 2 Kemp v. The London & Br. Railw. Co., 1 Railw. C. 495. s The King v. Hungerford Market Co., 4 B. & Ad. 327; Same v. Commis- sioners of Manchester, Id. 332, n. ; Doo v. The London & Cr. Railw., 1 Railw. C. 257 ; Burkinshaw v. Birm. & Ox. June. Railw. Co., 5 Exch. 475 ; s. c. 4 Eng. L. & Eq. 489 ; Ed. & Dundee Railw. Co. v. Leven, 1 Macq. House of Lords Cases, 284; Stone v. The Commercial Railw. Co., 1 Railw. C. 3 75. When variance from notice will not vitiate precept, see Walker v. The London & Bl. Railw. Co., 3 Ad. & Ellis (n. s.), Q. B. 744 ; Reg. v. York & North Midland R. Co., 1 EI. & Bl. 178-858 ; Reg. v. Ambergate & C. R. Co., Id. 372. See ante, § 88, and notes. 4 Tawney v. Lynn & Ely Railw. Co., 4 Railw. C. 615. * Stamps v. Bir. Wolv. & Stour Valley Railw., 6 Railw. C. 123 ; s. c. 7 Hare, 251. * 671 § 90. NOTICE MAY BE WAIVED. 361 are at liberty, by new notices from time to time, to take such additional lands as the progress of the work shows will be requisite. 4. Nor will the company be deprived of the power to take land for the necessary use of the works, when the emergency arises, by having previously attempted to take it for other pur- poses not warranted by their act. 6 * 5. And the company, having opened their main line for travel, but not completed the stations and works, are at liberty to take any lands within the limits of deviation for a branch railway. 7 6. But it was held, that where the Commissioners of Woods and Forests gave notice of taking lands for a public park, as they were acting in a public capacity, the notice given by them did not constitute a quasi contract, enforcible by mandamus. 8 SECTION V. The Notice may be Waived, by the Party entering into Negotiation. 1. Notice must be set forth in proceedings. 3. Certiorari denied icfcre party has suffered 2. Agreement to waive operates as estoppel. no injury. § 90. 1. It is a general rule, in regard to all summary and inferior jurisdictions, that the basis of their jurisdiction must appear upon the face of the proceedings. 1 Hence in proceedings to take land in iiivUum, under a notice to treat, the notice being regarded as essential to the jurisdiction, it has more generally been held indispensable to the jurisdiction that it should be set forth upon the proceedings. 1 2. But where the land-owner enters into negotiation with the * Webb v. Manchester & Leeds Railw., 1 Railw. C. 576 ; Simpson v. Lancaster & Carlisle Railw., 4 Railw. C. 625 ; Williams v. South Wales Railw. Co., 13 Jur. 443 ; s. c. 3 De G. & S. 354. 7 Sadd v. The Maldon, W. & Braintree Railw. Co., 2 Eng. L. & Eq. 410. 8 Queen v. The Comm. of Woods & Forests (Ex parte Budge), 15 Ad. & Ellis (n. s.), 761. 1 Rex v. Bagshaw, 7 T. R. 363 ; Rex v. Mayor of Liverpool, 4 Burrow, 2244 ; Rex v. Trustees of the Norwich Roads, 5 Ad. & Ellis, 563. *672 362 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 91. company, and agrees to waive the notice, he is afterwards es- topped from taking the objection, that he never received notice.' 2 And it was held, that the party whose duty it was to give the notice, and who was shown by the returns to have appeared be- fore the jury, cannot object to the inquisition upon the ground that it did not disclose a proper notice to treat. 3 3. In another case, where application was made to the King's Bench to issue a certiorari, to bring up and quash an inquisi- tion for land damages in a railway case, on the ground of some alleged defect, the court say, the granting the writ is matter of discretion, though there are fatal defects on the face of the pro- ceedings which it is sought to bring up ; and that it is almost an invariable rule * to deny the writ, where it appears the party has suffered no injury or has assented to the proceedings below. 4 SECTION VI. Title of K the Claimant must be distinctly stated. 1 . Claimant's reply to notice should be clear I 3. Where lands are held by receiver or com- and accurate. mission for a lunatic. Expression "fee- 2. Award bad, irhicndoes not state claimant's simple in possession." interest. \ n. 3. Analogous American cases. § 91. 1. Iii reply to a notice to treat, the claimant may state the particulars of his claim and proceed to treat. In this case the statement should give a clear description of the claimant's interest in the land, as a defect here is liable to affect the valid- ity of the after proceedings. 2. In one case where the claimant's answer to the notice to treat stated that, as trustees under a will, they claimed an estate in copyhold, and a certain sum as compensation for their inter- est in the lands, and appointed an arbitrator, and the other party appointing one, and an umpire being agreed upon, he awarded a certain sum as the value to be paid to the trustees, " for the purchase of the fee-simple, in possession, free from all incum- 2 Reg. v. The Committee for the South Holland Drainage, 8 Ad. & Ellis, 429. 3 Reg. v. The Trustees of Swansea Harbor, 8 Ad. & Ellis, 439. 4 Reg. v. The Manchester & Leeds Railw. Co., 8 Ad. & Ellis, 413. * 673 § 91. TITLE OF THE CLAIMANT MUST BE DISTINCTLY STATED. 363 brances" ; the company applying to set aside the award, upon the ground that other persons claimed an interest in the lands, the court held the award bad, for not finding the interest of the claimants in the land, or that they had a fee-simple which it appraised. But the court did not set the award aside, but left the company to dispute it, when it should be attempted to be enforced. 1 3. If the lands are in possession of a receiver, or the commit- tee of a lunatic, a special application should be made to the Court of Chancery. 2 The claimant cannot object that the award describes the land as a fee-simple in possession, whereas, the land is in possession of a tenant. Lord Denman, Ch. J., in giving judgment says, " The answer is that such assumption, if really made, is in favor of the claimant, and therefore no matter of complaint for him. But it does not pppear clearly that any such assumption * was made. The expression ' fee-simple in posses- sion,' in the claim, is used in contradistinction to fee-simple in reversion or remainder." 3 1 The North Staffordshire Railw. Co. v. Landor, 2 Exch. 235. * hi re Taylor and York N. Midland Railw., 6 Railw. Cas. 741. In this case the Lord Chancellor said, " All the Avorld ought to be aware, that the sanction of the Lord Chancellor is necessary to be obtained in the first instance, in cases like the present." * Bradshaw and the East & W. I. Docks and Birmingham J. Railw. Co., 12 Ad. & Ellis (n. s.), 562. The vendor of land to a railway company does not waive his lien for damages by accepting a certificate of deposit made by the cashier of the company for the purchase-money, the money not being paid when called for. Mims v. Macon & W. Railw. Co., 3 Kelly, 333. Where a company received a grant of certain salt mines, subject to a condition which they did not comply with, but retained the lands for a different purpose, and afterwards, when the period for performing the condition had expired, a general grant of all unoccupied salt lands in the state, necessary to use, for constructing a railway, was made to a railway company, who proceeded and occupied the lands above-named, it was held that the first grantors had no interest or title enabling them to maintain an action for damages. " They had the lands set apart to their use, for making salt, and had no right to enter upon and occupy them for any other purpose," are the words of the court. Parmelee v. Oswego & Syracuse R. R. Co., 7 Barb. 599. The statute of Pennsylvania gives the right to construct lateral railways over intervening lands, to the owner of lands, mills, quarries, coal, or other mines, lime-kilns, or other real estate, in the vicinity of any railway, canal, or slack- water navigation. It was held, that one who was in possession of the land, on *674 364 REMEDIES BY LAND-OWNERS UNDER ENGLISH STATUTE. § 92. ♦SECTION VII. The Claim of the Land-owner must correspond with the Notice. § 92. In one case the claim of the land-owner described more land than the notice to treat, being intersected land, less than one half acre, which the company are bound to take if so re- quired. But the claim did not properly designate the portion which, it was claimed, the company should take under their notice, and that which they were required to take, as intersected land. The umpire received evidence as to the value of the inter- sected land, and awarded one entire sum as compensation for the whole. Held that the award was bad, there being no valid submission as to intersected lands. 1 which a coal-mine was, at the commencement of the proceeding to recover land damages, and who had erected a two-story dwelling-house upon the land, was an owner of the coal-mine, within the act. Shoenberger v. Mulhollan, 8 Penn. St. 134. It is sufficient in such case that the petition be signed by the lessee and agent of the owner. Harvey v. Lloyd, 3 Penn. St. 331. It is considered necessary that the mortgagee of land should become a party to the proceedings for condemning or granting land to a railway, in order to give good title to the company. Stewart v. Raymond Railw., 7 S. & Mar. 568. Or that he should give his consent, in writing, in the case, to the proceeding taken by the mortgagor. Meachamr. Fitchburg Railw., 4 Cush. 291 ; s. c. 1 Am. Railw. Cas. 584. But the mortgagor may recover the full amount of damage, without regard to mortgages. Breed v. Eastern Railw., 5 Gray, 470. Where the state held land for a state prison, and granted the charter of a railway, in the usual form, authorizing the company to locate their road, so that it might pass over the land of the state, so held, but without any expression in the act of a design to aid the company in their undertaking, it was held the state might recover damages for the land taken. The court say, " The inquiry relates solely to the property of the Commonwealth, which it holds in fee in its capacity as a body politic. It appears to us the question is purely one of inten- tion." " We think if the legislature had intended to aid the enterprise by an appropriation of money, land, or other means, — such aid being unusual, — the purpose to do so would have been in some way expressed." Commonwealth v. Boston & Maine Railw., 3 Cush. 25; s. c. 1 Am. Railw. Cas. 482, 496, 497. 1 The N. Staffordshire R. Co. v. Wood, 2 Excheq. 244. *675 §98. LANDS TAKEN OR INJURIOUSLY AFFECTED. 365 *CHAPTER XIII. ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. SECTION I. Lands taken or Injurious/// Affected, without havim made Compensation to the Parties. previously 1. No entry under English statutes without previous compensation, except for pre- liminary survey. 2. Legal remedies against company offend- ing. 3. What acts constitute talcing possession un- der statute. 4. Company may enter with land-owner's consent after agreement for arbitration. 5. Bond may be given in certain cases. § 93. 1. The eighty-fourth section of the English statute, The Lands Clauses, &c, provides, that no entry shall be made upon any lands by the company until compensation shall have been made under the act, or deposited in the Bank of England, except for the purpose of preliminary surveys, and probing or boring to ascertain the nature of the soil, which may be done by giving notice, not more than fourteen days or less than three days, and making compensation for any damage thereby occa- sioned to the owners or occupiers of such lands. 2. It has been considered that if the company enter upon lands without complying with the requisitions of the statute, they are liable in trespass or ejectment. 1 And in some cases an injunction will be granted. But where the company entered to make preliminary surveys, without giving the requisite notice, the court refused to order the injunction, but reserved the ques- tion of costs. 2 1 Doe d. Hutchinson v. The Manchester, Bury, and Rosendale Railw., 14 M. &W. 687. 2 Fooks v. The Wilts, Somerset, and Weymouth Railw. Co., 5 Hare, 199; s. c. 4 Railw. C. 210. In this case the injunction was denied, chiefly upon the ground that the alleged trespass was complete before the application. The court intimate that if the company should attempt to proceed further it might be proper to restrain them by injunction. The point of the company being in the wrong, is distinctly recognized by the court •676 366 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 93. 3. And where the entry was regularly made upon the land, for * preliminary surveys, and afterwards the contractors, with- out the knowledge of the corporation, but with the consent of the occupying tenants, brought some of their wagons and rails and other implements upon the land, but did not commence the works or do any damage, and this was without the assent of the owner, and his agent thereupon filed a bill to obtain an injunc- tion against taking possession of the lands until they had com- plied with the statute, the Vice-Chancellor said, that although the company were bound by the acts of their contractors, the acts done were not a taking possession within the meaning of the statute, and that the bill was improperly filed. 3 4. But where the company agreed with the land-owner that the question of compensation should be settled by arbitration, and thereupon entered upon the land, by consent of the owner, and the arbitrator made an award, which became the subject of dispute, and the owner thereupon gave the company notice to quit, and brought ejectment, it was held he could not recover, although the company had not tendered the money awarded, or a conveyance, but that the owner's remedy was to proceed upon the award. 4 The notice to quit under the circumstances did not make the company trespassers. 5. By the eighty-fifth section, if the company find it necessary to enter upon land, for the purpose of carrying forward their works, before the amount of compensation can be settled, they may deposit in the bank the amount claimed, or in other cases the appraisal, and also give the party a bond with surety, to be approved by two justices in a penal sum equal to the amount so deposited conditioned for the payment, or deposit of the amount finally fixed as the ultimate value and interest thereon, and then take possession of the land and proceed with their works. The company can obtain their money so soon as the condition of the bond has been complied with. But the vendor must join in the petition for the money to be paid the company, or else it must * Standish v. Mayor of Liverpool, 1 Drewry, 1 ; s. c. 15 Eng. L. & Eq. 255. 4 Doe d. Hudson v. The Leeds and Bradford Railw. Co., 6 Eng. L. & Eq. 283. The decision here goes chiefly upon the ground of the consent of the land-owner to the entry of the company, and to refer the compensation to an arbitrator. * 677 § 93. LANDS TAKEN OR INJURIOUSLY AFFECTED. 367 be shown that he has been served with a copy of the petition. 6 It *does not invalidate the bond, if it bear date before the date of the valuation. 6 8 Ex parte South Wales Railw. Co., G llailw. C. 151. But in ex parte The Eastern Counties llailw. Co., 5 Railw. C. 210, the money was ordered to be paid to the company upon affidavits showing the claim settled. The land-owner has no lien upon the money deposited for costs, but the company are entitled to the money upon payment of the sum finally settled for the value of the land. The Great Northern Railw. Co. ex parte, 5 Railw. Cases, 269; London & South W. R. ex parte Stevens, 5 Railw. C. 437. The bond must be given in the very terms of the statute. Ilosking v. Phil- lips, 3 Exch. 168, opinion of Parke, B. And it will make no difference that the obligee is a gainer by the deviation from the statute. Poynder v. G. N. Railw. Co., 5 Railw. C. 196. But where the company choose to treat for the claimants' title only, it is suf- ficient if the bond follow the statute, so far as it applies to that particular case. Willey v. Southeastern Railw. Co., 6 Railw. Cas. 100. Opinion of Lord Chan- cellor, 107, 108. If the company enter by consent of the tenant, and do perma- nent damage to the land, the owner may nevertheless obtain an injunction and compel them to make a deposit and give a bond as required by the statute. Armstrong v. Waterford & Limerick Railw. Co., 10 Irish Eq. 60. If there is a mortgage upon land, the company must treat with the mortgagee, or provide for the expense of reinvestment for his benefit, or their entry will be regarded as unlawful. Ranken v. East and West India Docks & Bir. J. Railw., 12 Beavan, 298; 19 L. J. Ch. 153. Under the general statutes, in many of the American states, where there are conflicting claims to the land required by a railway company, the company are required to make application to the Court of Chancery, and deposit the money, in bank, subject to the final order of that court. In such case it has been con- sidered that the company had no interest in the controversy, after depositing the money for the price of the land. Haswell v. Vermont Central Railw., 23 Vt. R. 228. • Stamps v. Birmingham, Wolverhampton, & Stour Valley Railw., 6 Railw. C. 123. * 678 3G8 ENTRY UPON LANDS BEFORE CONPENSATION IS ASSESSED. § 94. SECTION II. The proceedings requisite to enable the Company to enter vpon Land. 1. Provisional valuation under English stat- 4. Entry after verdict estimating damages, utes. but before judgment. 2. Irregularities in proceedings. 5. Mode of assessing damages provided in 3. Penalty for irregular entry upon lands. charter not superseded by subsequent gen- I eral railway act. § 94. 1. In some cases specified in the English statute, it is necessary to have a provisional valuation of land, by a surveyor appointed by two justices, to determine the amount of the secu- rity to be given before the entry of the company upon the land. Where in such cases the justices appointed a surveyor, who had all along acted for the company, to appraise the value, it was held no sufficient reason to interfere, by injunction, but the court reprobated such a practice. The court also declined to interfere, by injunction, on the ground that the sureties on the bond were the company's solicitors, and were upon similar bonds to a large amount. 1 * 2. In the same case it was considered that depositing money and executing a bond to tenants in common, in their joint names, was irregular. 1 It was held that the proceedings under the 85th section of the English act, to obtain possession of the land before the amount of compensation is settled, may be ex parte, and altogether without notice. 2 3. The English statute subjects the company to a penalty for entering upon lands before taking the steps required by the 1 Langham v. Great Northern Railw. Co., 5 Raihv. C. 265, 266. This case was in favor of five plaintiffs, three tenants in common, and two devisees in trust for the sale of the lands, and it was queried, whether there was not a misjoinder. s Bridges v. The Wilts, Somerset, and Weymouth Railw. Co., 4 Railw. C. 622. This is a decision of the Lord Chancellor affirming that of the Vice- Chancellor of England. Poynder v. The Great N. Railw. Co., 5 Railw. C. 196. In this case the bond was held to be informal', for being made to be performed " on de- mand," the Lord Chancellor refused a perpetual injunction, but" allowed it till the bond was corrected. *679 § 95. OBTAINING COMPENSATION WHERE NONE OFFERED. 369 statute, but provides, that the penalty shall not attach to any company, who have bond fide done what they deemed to be a compliance with the statute. 3 4. If one enter upon lands after verdict estimating damages, but before judgment on the verdict, he is liable in trespass, but only for the actual injury, and not for vindictive or exemplary damages. 4 5. It has often been made a question in this country, where the charter of a railway provides one mode of assessing land damages, and a subsequent general railway act provides a differ- ent mode, which the company are bound to pursue. It has been held the company might still pursue the course pointed out in their charter. 5 *SECTION III. Mode of obtaining 1 Compensation under the Statute, for Lands taken, or injuriously affected, where no Compensation is of- fered. 1. Claimant may elect arbitration or jury I 2. Method of procedure, trial. § 95. 1. Where land is taken by the company, or injuriously affected by their works, and no compensation has been offered by the company, the claimant may, where the amount exceeds fifty pounds, have the same assessed, either by arbitrators or a jury, at his election. 2. If he desire to have the same settled by arbitration, he shall give notice to the company of his claim, stating his interest in the land and the amount he demands, and unless the com- pany within twenty-one days enter into a written agreement to 3 Hutchinson v. The Manchester, Bury, and Rossendale Railw. Co., 15 M. & W. 314. Pollock, Ch. B., thus lays down the rule of construction of this statute : " A penal enactment ought to be strictly construed, but a proviso, which has the effect of saving parties from the consequences of a penal enactment, should be liberally construed." 1 Harvey v. Thomas, 10 Watts, 63. 6 Visscher v. Hudson River Railw., 15 Barbour, 37; Hudson River Railw. v. Outwater, 3 Sand. Sup. Ct. 689 ; ante, § 72, n. at the end. VOL. I. 24 *680 370 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 96. pa) r the amount claimed, the same shall be settled by arbitration, in the manner pointed out in the statute ; or, if the party desire to have the same settled by a jury, he shall so state in his notice of claim, and unless the company agree to pay the sum claimed, in the manner stated above, they shall within twenty-one days issue their warrant to the sheriff to summon a jury to settle the same, in the manner pointed out in the act, and in default there- of they shall be liable to pay the amount claimed, to be recov- ered in the superior courts. 1 SECTION IV, T/ie Onus of carrying forward Proceedings. 1. Rests upon claimant after company have taken possession. 2. Miscellaneous provisions. 3. Proceedings cannot be had unless actual possession is taken or injury done. § 96. 1. It has been held, under the English statutes, that after the company have taken possession of land, either by right or by wrong, the onus of taking the initiative steps to have the purchase-money or compensation assessed, lies upon the claim- ant. 1 It was * considered in this case, that the remedy under the 68th section 2 applied to all cases where the company took possession of the land under the 85th section. 3 2. But if questions in equity are pending, they must be dis- posed of before the common-law remedy can be pursued. 4 This was a case where the determination of the matters pending in equity was necessary to enable the parties to know what was to be submitted to the assessors. 4 In proceedings under the 68th 1 8 & 9 Vict. ch. 18, § 68. 1 Adams v. The London & Blackball Railw. Co., 6 Railw. C. 271, 282. The opinion of the Lord Ch. on appeal. It was also considered, in this case, that if the company failed to perform their duties in the proceedings, the more appro- priate remedy was by mandamus, and not by application to the courts of equity tor decree of specific performance. 2 See ante, § 95. * See ante, §§ 93, 94. Doe d. Armistead v. North Staffordshire Railw. Co., 4 Eng. L. & Eq. 216. 4 Southwestern Railw. Co. v. Coward, 5 Railw. C. 703. *681 § 97. EQUITY WILL NOT INTERFERE BY INJUNCTION, ETC. 371 section, it is not necessary for the company to give the claimant notice of their issuing a warrant to the sheriff to summon a jury, ten days before they issue it, as is required in proceedings under the other sections. 5 It was held, that if the claimant recover a larger sum than was offered by the company, he is entitled to recover costs under section 68, as well as under other sections. 5 3. It is considered that the land must be actually taken, or actually injuriously affected by the company, before the claimant can take proceedings under section 68. Hence if the company give notice of their intention to take lands, but do not afterwards actually take possession or injuriously affect them, the claimant can only proceed by mandamus. It has been decided that the claimant in such case cannot make a demand of a certain sum, and then recover it, if the company do not issue their warrant to the sheriff. 6 ♦SECTION V. Equity will not interfere, by Injunction, because Lands are being Injuriously Affected, loithout notice to treat, or previous com pensation. 1 . Claimant must wait until works are com- 3. How Jar equity interferes where legal pitted. claim of party is denied. 2. Even if appearance of land will be great- 4. Where a special mode of compensation ly altered. has been agreed upon. § 97. 1. It is said courts of equity will not interfere by in- junction, because lands are being injuriously affected .by the company's works, and no notice to treat or previous compensa- tion has been made, if it appears the company are only exercis- ing their statutory powers. The claimant should allow the 1 Railstone v. The York, Newcastle, & B. Railw. Co., 15 Ad. & Ellis (n. s.), 404. This case is somewhat questioned in Richardson v. Southeastern Railw., C Eng. L. & Eq. 426. But in this same case, in error, in the Exchequer Chamber, 9 Eng. L. & Eq. 464, the question as to costs is affirmed, and the court say, it is not necessary to say whether they consider the case of Railstone v. The York, N. & B. Railw. Co. sound or not, as it does not necessarily affect the question before the court. 8 Burkinshaw v. Bir. & Oxford J. Railw. Co., 5 Excheq. 475. *682 372 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 97. works to be completed, and then take his remedy under the statute. 1 2. It was objected, in one case, that the company would be likely to greatly alter the appearance of the land which they had entered upon, and that a jury could not understandingly assess the value after the damages were sustained, but the court said it was no ground for the interference of a court of equity. 2 3. The courts in England hold, that in this class of claims it is proper to wait till the full extent of the injury is known. 3 And equity will not enjoin the party from proceeding under the statute, in a case where it is alleged that he has no legal claim under the statute, 4 as in such case the company may defend against the award, and this seems to be the course finally deter- mined. But some actions at law have been brought and sus- tained to try the right, by order of the courts of equity. 5 4. So, too, where the bill alleges that the party has upon con- sideration agreed to receive compensation in a particular mode, equity will enjoin him from taking proceedings under the statute. 6 1 8 & 9 Vict. ch. 18, § 68. 1 Laugharn v. Great Northern Railw., 5 Railw. C. 263. The counsel for de- fendant not called to answer this portion of plaintiff's argument. 8 Hutton v. The London & Southw. Railw. Co., 7 Hare, 259. 4 East '& West India Docks & Bir. J. Railw. Co. v. Gattke, 3 Eng. L. & Eq. 59; South Staffordshire Railw. Co. v. Hall, Id. 105. In this last case, the opinion of Lord Cranworth seems to overrule that of Lord Cotlenham in The London & N. W. Railw. Co. v. Smith, 5 Railw. C. 716. The Sutton Harbor Improvement Co. v. Hitchins, 9 Eng. L. & Eq. 41 ; The London & N. W. Railw. Co. v. Bradley, 6 Railw. C. 551. See also Monchet v. G. W. Railw. Co., 1 Railw. C. 567. But see the case of L. & Y. Railw. v. Evans, 19 Eng. L. & Eq. 295, where the case of L. & N. W. Railw. v. Smith is still further ques- tioned. 8 Glover v. The North Staffordshire Railw. Co., 5 Eng. L. & Eq. 335. 9 Duke of Norfolk v. Tennant, 10 Eng. L. & Eq. 237. §98. CANNOT DETERMINE TITLE ; ONLY DAMAGES. 373 ♦SECTION VI. Sheriff's Jury, or Arbitrator, cannot determine the Question of Right in the Claimant, but only the amount of Damages. 1. Later English decisions sustain this view. 2, 3. Statement of recent case. 4. In most American states assessment is final. 5. Plaintiff" will recover damages assessed if he suffered any legal injury. § 98. 1. There has been some contrariety of opinion among the English judges in regard to the right of the company, before the sheriff's jury, to raise the question of the claimant's right to recover any compensation, under the sixty-eighth section, where lands are taken or alleged to be injuriously affected by the works of the company ; and whether the jury can go into any inquiry beyond that of the value of the claimant's interest in the land. The latest decisions upon this point hold, that the jury is con- fined to the question of the amount of compensation. 1 2. In the very latest English case upon this subject, 2 the judges of the Court of Queen's Bench differed in opinion, and delivered opinions seriatim. Coleridge, J., and Lord Campbell, Ch. J., and Wightman, J., holding, that the jury had nothing before them but the quantum of damages, and that whether the company declined to issue their warrant to the sheriff, or did issue it in both cases, the right to recover any damage on ac- count of a claim for the injuriously affecting of land, was to be tried upon the action, to recover the amount assessed, in the courts. The proceedings under the statute were held, by the majority of the court, to be merely for the purpose of fixing the amount of the claim. If, indeed, the company stood still upon the question of right, they were liable, in the event of the claim- ant's recovery, for the full amount of the claim made ; but if they proceeded to a hearing before the arbitrator or a jury, whichever course the claimant should elect, they might not only contest the amount there, but the right of any recovery in the action which the claimant was compelled to bring, to obtain ex- 1 Regina v. Metropolitan Comm. of Sewers, 18 Eng. L. & Eq. 213. 2 Regina v. The London & Northwestern Railw. Co., 25 Eng. L. & Eq. 37. *683 374 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 98. edition against the company, but that it was improper to go into any inquiry before the arbitrator or the jury, in regard to the right to recover anything, inasmuch as this tended improperly to embarrass the mind of the triers in regard to the damages. And in this case, where the jury went into the question of right, and determined the claimant had no right, but added, if he had such right his claim * should be valued at £150, the majority of the court determined that the former part of the verdict could not be rejected, and let the verdict stand as a good finding of the sum named, which last point seems rather too refined for common apprehension, even after reading attentively the elab- orate opinion of the majority of the court by Coleridge, J. 3. Mr. Justice Erie dissented from the principal decision of the court, and held the verdict good in all respects. But this case must be regarded as settling the question of the right of the jury to pass upon the claim beyond its mere amount, at least under the English statutes. 4. In most of the American states the assessment of land damages, by whatever tribunal, becomes final, unless appealed from, and execution issues without resort to a future action, or, if an action is necessary upon awards of arbitrators, this will not justify a re-examination of the case, either upon the question of title, or amount of damages. But in some of the states, the proceedings are similar to those above named in the English courts. 3 5. And under the English statutes, where the claim is for in- juriously affecting land, the plaintiff must recover the entire amount of damages assessed to him for land taken by a railway, unless the defendant's pleas show that he had no right to recov- er 4 to any extent. 3 Ante, § 72. 4 Mortimer v. South Wales Railw. Co., 5 Jur. N. S. 784 ; s. c. 1 Ellis & Ellis, 375. *684 §99. EXTENT OF COMPENSATION TO LAND-OWNERS. i75 SECTION VII. The extent of Compensation to Land-owners , and other Incidents by the English Statutes. 1 . Liberal compensation allowed. 2. Decisions under English statutes." 3. Limit of period for estimating dam- ages. 4. Whether claim for damages passes to the devise", or executor. 5. Vendor generally entitled to damages ac- cruing during his time. § 99. 1. In one of the early cases 1 upon this subject, Lord Denman, Ch. J. said, we think it not unfit to premise, " that where such large powers are intrusted to a company to carry their works through so great an extent of country, without the consent of the owners and occupiers of land through which they are to pass, it is reasonable and just that any injury to property, which can be shown to arise from the prosecution of those works, should be fairly compensated to the party sustaining it." But this must be received under some limitations. For it is suppos- able, that possible remote injuries may accrue to property, of a general and public character, which it was never intended to compensate. 2. Some points arising under the English statute may be here referred to. It was held, that where the powers conferred upon a * canal company were unlimited as to time, no limitation as to their exercise could be assigned, so as to require their exer- cise within a reasonable time, 2 and, consequently, that the works might be resumed at any period. 2 Future damages to accrue to land-owners cannot be estimated properly 3 until after the completion of the works. 3 The compensation when given, fixes 1 Reg. v. Eastern Counties Railw., 2 Ad. & Ellis (Q. B.), 347. 2 Thicknesse v. The Lancaster Canal Co., 4 M. & W. 472. Lord Abinger, Ch. B. intimates an opinion here, that possibly, after a long delay of the com- pany to proceed with their works, and the erection of fences and buildings, by the land-owners, in faith of the abandonment of the works by the company, a court of equity might restrain the company from completing their enterprise, notwithstanding the grant of power to do so, by parliament ; but a court of law could do no such thing, p. 490, 491. 3 Lee v. Milner, 2 M. & W. 824. *G85 376 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 99. the rights of the parties, upon the basis of its estimation, as, if the estimation is had upon the footing of an entire severance of the land, the land-owner has no right to cross the track. 4 And where this did not sufficiently appear, by the record of the ver- dict, that not having been made, held that parol evidence might be given of the rinding, and of the grounds upon which it pro- ceeded. 4 3. Where consequential damages to" existing works, by the erection of new ones, are required to be compensated, the period for estimation is limited to the yearly value of the works, ante- cedent to the passing of the act. 5 4. The devisee is entitled to claim consequential damages and not the executor. 6 But where one contracted to sell freehold estates and died before the money was paid ; under the London Bridge Improvement Act, it was held the money should go to the executor. 7 But the cases are not uniform upon this subject, and the usual course seems to be, that the money for consequen- tial damage goes to the party interested in the inheritance, or else is divided according to the interest of the several estates. 8 In one case it was held, that the vendee was entitled to compen- sation, which * accrued during the time of the vendor's title, but not liquidated till after the conveyance. 9 5. But in general the vendor is entitled to land damages ac- cruing during his time, although not collected, and often where the works are not completed till after the conveyance. 10 The presumption is, if the jury assess compensation to one person, that it is only for his interest in the premises. 11 * Manning v. The Eastern Counties Railw., 12 M. & W. 237. But unless it appeared by the record upon what basis the assessment was made, it seems questionable, -whether, upon general principles, oral evidence is admissible to show that basis. Ante, § 74, n. 7. 6 Manning v. The Commissioner undg^r the W. I. Dock Act, 9 East, 165. • The King v. The Comm. under London Dock Acts, 12 East, 477. I Ex parte Hawkins, 3 Railw. C. 505, and note. No other party seems to have had a counter interest in this case. 6 The Midland Counties Railw. Co. v. Oswin, 3 Railw. C. 497; Danforth v. Smith, 23 Vt. R. 247. » King v. Witham Nav. Co., 3 B. & Aid. 454. 10 Rand v. Townshend, 26 Vt. R. 670. II Rex v. Nottingham Old Waterworks, 6 Ad. & Ellis, 355. *686 § 100. TEMPORARY USE OF LAND FOR CONSTRUCTION. 377 SECTION VIII. Right to temporary use of Land to enable the Company to make Erections upon other Lands. 1 . Right to pass another railway by a bridge gives temporary use of their land, but no right to build abutments upon it. gives right of building a temporary bridge. 3. And if thus erected bona fide may be used 2. Right to construct a bridge across a canal for other purposes. § 100. 1. Where one railway act gives the company power to pass another railway, by means of a bridge, provided the width between the abutments of the bridge is not less than twenty-six feet, and at the points where the bridge is to be built, the land of the second company is forty-seven feet wide, the first company have no right to build the abutments of their bridge upon the land of the second company, but having purchased ad- joining land for that purpose, they have a right at law to the temporary use of the land of the second company, for the pur- pose of building, and this right was in effect secured to the first company by an injunction out of chancery. 1 2. So, too, where a railway company had permission to carry their road over a canal, by means of a bridge of a given descrip- tion, it was held that they might, as incident to the right of erecting the bridge, make a temporary bridge over the canal, supported partly on piles driven into the bed of the canal, to enable them to transport earth across the canal to build the necessary embankment, in the construction of the permanent bridge. 2 3. And such a temporary bridge having been erected for the bond *fide purpose of building the permanent bridge, might also be used for other purposes, for which alone it could not have been erected. 3 1 Great North of England, Clarence & Hartlepool Junction Railw. v. The Clarence Railw., 1 Collyer, 507. 2 London & Birmingham Railw. v. Grand Junction Canal Co., 1 Railw. Cas. 224. s Priestley v. The Manchester & Leeds Railw., 2 Railw. C. 134. *687 378 ENTRY UPON LANDS BEFORE COMPENSATION IS ASSESSED. § 101. SECTION IX. Reservations to Land-owners to build private Railway across public Railway. § 101. Where the special act of a railway company provided, that nothing in the act contained shall prevent any owner or occupier of any ground through which the railway may pass from carrying, at his or their own expense, any railway, or other road, any cut, or canal which he or they may lawfully make in their own land, across the said main railway, within the lands of such owner or occupier, it was held, that this provision was not confined to the owners or occupiers of such land, at the time, but was intended to apply to all future time, so long as such principal railway shall continue, and extended to all persons owning or occupying lands adjoining the railway, upon opposite sides, whenever the title was acquired, even where they pur- chased the land upon opposite sides at different times. 1 1 Monkland & Kir. Railw. v. Dixon, 3 Railw. C. 273. The Court here (H. of L.) denied an interdict against such owner or occupier prolonging his rail- way for the benefit of any persons with whom he might make an agreement for that purpose. §102. BY JUSTICES OF THE PEACE. 379 •CHAPTER XIV. THE MODE OF ASSESSING COMPENSATION UNDER THE ENGLISH STATUTES. SECTION I. By Justices of the Peace. 1 . Where compensation claimed does not ex- ceed £ 50. 2. Mode of enforcing award. 3. Value of land and injury accruing from severance to be considered. § 102. 1. By the English statute, where the compensation claimed shall not exceed £ 50, the same is to be settled by two justices. So, also, as to damages claimed for lands injuriously affected. So, too, if the company enter upon any private road or way. And justices may fix the compensation, in certain cases, for the temporary use of land. And the compensation to tenants for a year, or from year to year. They may apportion the rent, too, where the whole land is not taken. In some of these cases their jurisdiction extends beyond £50. 2. The mode of enforcing payment of money awarded by such justices, is to obtain an order, which may be enforced by distress, upon the goods and chattels of the party liable. The certiorari is taken away in such cases, but an order of such jus- tices may still be brought up, to be quashed, for want of juris- diction. 1 3. The justices are to take into consideration the value of the land, and any injury which may accrue from severance. 1 See the subject discussed post, §§202, 203. *688 380 MODE OF ASSESSING COMPENSATION. § 103, 104. *SECTION II. By Surveyors. § 103. The assessment of compensation by surveyors, under the English statutes, is merely provisional in most cases, as where the party is out of the kingdom, or cannot be found, two justices are required to nominate an able practical surveyor, who is, under certain solemnities, required to make a valuation of the land taken or injuriously affected, the amount of which the company are required to deposit in the bank, before proceeding with the works. And if such party be dissatisfied with the sum thus deposited, he may, before applying to Chancery for the money, require the question to be submitted to arbitration, as in other cases of disputed compensation. Surveyors are re- quired to assess damages for severance of land, the same as jus- tices of the peace. 1 SECTION III. By Arbitration. 1. May be claimed in cases exceeding juris- diction of justices of the peace. 2. How made compulsory. 3. What form of notice is sufficient. n. 5. Analogous American cases. 4. Arbitrator's power limited to award of pe- cuniary compensation. 5. Where land-owner gives no notice, company may treat it as case of disputed compen- sation. 6. Similar rule under Massachusetts statute regarding alteration of highways. 7. And land-owners may recover without wait- ing for selectmen to act. 8. Company estopped in such case from de- nying that road was constructed by their servants. Embankments part of the rail- way. 9. Finality of award. 10. May employ experts. Damages em- braced. 1 1 . Construction of general award. § 104. 1. By the English statutes, if the amount of compen- sation claimed exceed the jurisdiction of two justices, any party claiming compensation may compel an arbitration, by taking 1 Hodges on Railways, 250, 251, 252. ♦689 § 104. BY ARBITRATION. 381 the requisite steps in due time. Unless both parties concur in the same arbitrator, each party, upon the request of the other, is required to name one. The appointment of the arbitrator is to be under the hand of the party, and delivered to the arbitra- tor, and is to be deemed a submission by such party. Such submission is irrevocable, even by the death of the party. 2. "If either party neglect, for fourteen days, after request by the other party to name an arbitrator, one may be named by the other party, who shall decide the controversy. If either party name an arbitrator who is incompetent, the other party must retire from the arbitration, or he will be bound by his ac- quiescence. 1 The secretary of a railway company, by the Eng- lish statutes, would seem to * have power to bind the company, by signing the submission, whether the arbitration is compulsory or not.' 2 3. It was held that the appointment of an arbitrator or referee implied the notification of such appointment to the other party within the time limited in the submission, or the doings of such referee were void. 3 And not only so, but the notice must be explicit. It is not sufficient to say, " Take notice, that it is my intention to nominate S. M.," notwithstanding it was added, " if the company fail to appoint, I the said T. B. will appoint S. M. to act on behalf of both parties." 4 And in this case it is said, it would seem that the appointment by the claimant of an arbitrator to act for both parties, is not valid, unless he has previously appointed an arbitrator, on his part, and notified such appointment to the company. There should be two separate appointments, although it may be of the same person, it is here suggested. 5 1 In re Eliott, 2 Dp G. & Sm. 1 7. * Collins v. South Staffordshire Raihv. Co., 21 Law J. (Ex.), 247; s. c. 12 Eng. L. & Eq. 5G5. 3 Tewt). Harris, 11 Q. B. 7. 4 Bradley v. London & N. W. Railw. Co., 5 Exch. 769. 6 But where both parties petition for a jury to revise the damages, one war- rant is sufficient. Davidson v. Boston & Maine Railw., 3 Cush. 91. And if two warrants are issued, the sheriff should execute, and return them as one. Id. And where there are several applications, which by statute are to be determined by one jury, the proper mode is to issue but one warrant to the sheriff, but if *G90 382 MODE OF ASSESSING COMPENSATION. § 104. 4. The arbitrator has no power beyond the awarding of a pecuniary compensation for the land taken by the company, and cannot direct what right of way shall remain in the tenant to the portion of land not taken. 6 Nor can he apportion the rent to the tenant. 6 5. If the land-owner gives no notice of claim, in reply to the notice to treat, the company may treat it as a case of disputed compensation. 7 If the compensation claimed be less than 50/., it may be settled by two justices. But if more than 50/. be claimed, or offered, and the claimant desire to have it settled by arbitra- tion, it is at his option, and he must give notice of such desire before the company issue their warrant to the sheriff to summon a jury to assess the compensation, which they may do in ten days after giving the claimant notice that they shall do so, unless in the mean time he elect to have the matter settled by arbitra- tion. 7 * 6. And under the Massachusetts statute, giving railways the right to alter highways, upon giving notice to the selectmen of the towns where such highways are situated, and conforming to their requirements, or the decision of the county commissioners, in regard to the alteration of the highway, it was held, that if the selectmen give no notice to the company, as to what alterations they require, the presumption is, that they require none, but leave the whole matter to the company. 7. And to entitle adjoining land-owners to recover damages of the railway under the statute of Massachusetts, it is not neces- sary that the selectmen should have acted in the premises. The remedy in such case is not by an action against the town, but by proceedings under the statute against the company. 8 8. In such case the company are estopped to deny, that the construction of their road, as in fact made, was done by their servants in compliance with the requirement of the charter. 8 And embankments made by them for the purpose of carrying several warrants issue irregularly, yet if the officer summon a single jury, who hear and determine each case, their verdicts will not be set aside for such irregularity. Wyman v. Lexington & West Cambridge Railw. 13 Met. 316. 6 Ware v. Regent's Canal Co., 25 Eng. L. & Eq. 444. ' 8 & 9 Vict. ch. 18, §§ 21, 22, 23, 38. 8 Parker v. Boston & Maine Railw., 3 Cush. 107. *691 § 104. BY ARBITRATION. 383 a highway over the railway, are to be regarded as a part of the railway. 8 9. By a submission to arbitration it was provided that the arbitrator should determine what sum should be paid for the purchase of land, and what " other, if any, sum for severance dam- age, and the arbitrator after reciting " the submission, and that he had considered the matters so referred to him, awarded a certain sum to be paid for the purchase of the land, without saying any- thing about severance-damage. It was held that the award was final and good, that the arbitrator by his silence negatived any right to compensation on account of severance-damage. 9 10. A submission to arbitration under the English statute for assessing land damages is not revoked by the death of the land- owner. 10 It was here considered that the award was valid al- though not made within the statute period of three months ; that the arbitrator may employ an expert and consult men of science, if necessary; that the right to compensation extends to any land injured by the severance of that which was taken, or by the works which the company is authorized to construct, and may include damages likely to be caused to the tenants of the land- owner. The right to compensation depends on cause and effect, and not on " proximity or distance." 11. The award of a gross sum for damages for drainage which lessened a waterpower upon which a mill had been erected, was held presumptively to apply to the damage to the mill, and not to the unemployed waterpower, which might be available for the proprietor of the other side of the river. 11 9 In re Swansea Harbor Trustees, 6 Jur. N. S. 979. 10 Caledonia Railw. Co. v. Lockhart, 6 Jur. N. S. 1311, in the House of Lords. 11 St. George v. Reddington, 10 Ir. Ch. 176. 384 CONSTRUCTION OF RAILWAYS. §105. ♦CHAPTER XV. CONSTRUCTION OF RAILWAYS. SECTION I Line of Railway. — Right of Deviation. 1 . Manner of defining the route in English charters. 2. Question invoiced stated. 3. Plans only binding, when and for the pur- pose referred to in the act. 4. Contractor bound by deviation, unless he object. 5. Courts of equity will not enforce contract against public security. 6. Right to construct accessory ivories. 7 8. Company may take lands designated, in their discretion. 9. Equity cannot enforce contract not incor- porated into the act. 10. Right of deviation lost by election. 11. Railway between tivo towns, extent of grant. 12. Grant of land for railway includes ac- cessories. 13. Route designated need not be followed literally. 14. Terminus being a toivn, is not extended, as the town extends. 15. Party accepting compensation waives in- formality. 16. Powers limited in time expire with limit- ation. 17. Construction of charter as to extent of route. 18. Map may be made to yield to other grounds of construction. 19\ Power to change location must be exercised before construction. 20. Binding force of plans made part of charter. § 105. 1. The English railway acts are granted altogether, after full surveys of the route and with reference to definite plans of the engineers, which, when referred to generally in the act thus become so far a part of it as to be binding upon the company to the extent of determining the datum line, and the line of railway measured with reference to that datum line ; and the level of the railway, with reference to the datum line ; but not the surface levels, unless expressly so provided in the act. 1 1 North British Railw. v. Tod, 4 Railw. C. 449. This was an appeal from the judgment of the Court of Sessions in Scotland. The opinions of Lord Lynd- hurst Chancellor, and of Lord Campbell, Ch. J., certainly exhibit the rule of the English law upon this subject very fully and very ably. Lord Lyndhurst says : " Now as to the effect of plans exhibited previous to the contract being made or previous to the act of parliament being obtained, it does seem, from cases which have occurred, both in Scotland and this country, that the rule of *186 § 105. LINE OF RAILWAY. — RIGHT OF DEVIATION. 385 * 2. The question in this last case l was. in regard to the right to intersect an approach, leading to a mansion-house, at a dif- the courts in this country, and in the other, is no longer a matter of any doubt or dispute. If a contract or an act of parliament refer to a plan, to the extent that the act refers to the plan, and for the purpose for which the act or contract refers to the plan, undoubtedly it is part of the contract or part of the act. As to that there is no dispute. A contract, or an act of parliament, either does not refer to a plan at all, or it refers to it for particular purposes. It has been con- tended, both in Scotland and in England, that the defendant in the suit, or those who claim the benefit of the provisions of an act of parliament, previous to this enactment being made, or the contract being concluded, have repre- sented that the works are to be carried on in a particular mode, upon a plan shown previous to the powers being obtained under the act, or the contract be- ing concluded, and that the party obtaining the act, or obtaining the contract, is bound by such representation. There was a case very much considered in Scot- land, the case of The Feoffees of Heriot's Hospital v. Gibson, 2 Dowl. 301; and several cases have occurred in the courts of equity in this country. It was my fortune to have to consider the matter very minutely in the case of Squire v. Campbell, 1 My. & Cr. 459, in which I thought it my duty to review all the cases that had occurred in the one country and in the other, for the purpose, if possi- ble, of establishing a rule which might be a guide on future occasions when sim- ilar cases should occur ; and I found that, certainly, what had been very much the opinion of the profession in this country, namely, that the parties were bound by the exhibition of such plans, had met with a very wholesome correc- tion by the doctrine laid down by Lord Eldon, and Lord Redesdale, in the case of Heriot's Hospital, decided by this House. Under the authority of that case, in which the point was very distinctly raised, and deliberately decided upon, I came to the conclusion that there was no ground for equitable interposition. Now, my Lords, not relying upon the authority of Squire v. Campbell, but rely- ing, as we are bound to do, upon the case of The Feoffees of Heriot's Hospital, I consider that to be the rule to which the courts of this country, and the Court of Sessions in Scotland, and this House, must hereafter adhere. Taking that, then, to be the rule in examining the facts of this case, and the act of parlia- ment upon which the question turns, we are not to look at what was represented upon the plan, except so far as its representation is incorporated in, and made part of, the act of parliament ; and the real question, therefore, turns upon this, whether the acts of parliament do or do not make the datum line, and line of railway with reference to that datum line, the subject-matter of these enact- ments, and the rule by which the rights of the parties are to be regulated, or whether it also includes the surfaces which, in this instance, accidentally, no doubt, had been very much misrepresented upon the plan. "I say, then, that a case does arise upon these provisions of the act, in which the plan indeed is referred to, but is, in the terms of the act of parliament, re- ferred to only for the purpose of ascertaining the line of the railway, with refer- ence to the datum line. It is not referred to with reference to any surface leTel. VOL. i. 25 *187 386 CONSTRUCTION OF RAILWAYS. § 105. ferent * level from that laid down in the parliamentary plans, in which it appeared as a cutting of fifteen feet, and the way raised The plan, therefore, is entirely out of the enactment, and is not to be looked at for the purpose of construing the enactment as to any part of it, except so far as it is referred to and incorporated in the act. Arriving at that construction of the rule upon the provisions of the two acts to which I have referred, and applying it to the principle which has been established in the cases I have men- tioned, we have no difficulty in coming to the conclusion, that the application of that principle will necessarily lead to the construction of the clauses to which I have referred. The plan is binding, to the extent of determining the datum line, and the line of railway measured with reference to that datum line, but not with reference to the surface levels of the land, because the act does not apply it for that purpose, but cautiously confines the enactment to the other plans to which I have referred. " Acting, therefore, upon the principle so established, and with reference to the construction, or what I conceive to be the construction, to be put upon these sections, although we cannot but greatly lament the hardships which, in all prob- ability, these circumstances have imposed upon the respondent, in having his land interfered with in a manner which he did not at all anticipate ; yet, when we are called upon to consider whether the Court of Sessions is correct or not, we are bound to look to see what are the powers which these acts vest in the company ; and for the reason I have explained, I come to the conclusion that the company have not exceeded those powers, and do not propose to exceed those powers, in the plans that they have formed, and that the Court of Sessions has been in error in granting the interdict." Lord Campbell. — "I acknowledge that I come to the conclusion at which I have arrived with very great reluctance. It seems to me to be a case of very great hardship upon the respondent. But when we come to consider what the law upon the subject is, I feel bound to concur in the opinion which has been expressed. What is the legal construction of the act of parliament ? Does the company, or does it not, propose to exceed the powers which the acts of parlia- ment confer upon it ? Now it is admitted, that if the deviation is to be calcu- lated from the datum line alone, they (the company) do not propose, either vertically or laterally, to exceed the powers of deviation which are conferred upon them. Well, then, that raises the question whether those powers of devi- ation are to be calculated from the datum line alone, or whether the surface- level is to be taken into consideration, and my opinion is, that the act does refer everything to the datum line. I think it is evident that the 11th section clearly makes the datum line alone that which is to be regarded. The word 'levels,' in the plural number, really does not at all include the surface-levels. It means merely the levels of the datum line, which point out the course the railway is to go. If that be so, the company do not propose to do anything that they are not authorized to do, according to the letter of the act of parliament. " There certainly was a representation made here on the part of the company, when they proposed to bring in the act, by which they intimated that, at that *198 § 105. LINE OF RAILWAY. — RIGHT OF DEVIATION. 387 upon a * bridge two feet. The owner of the house, it seems, had opposed the railway being carried through his avenue, but, rely- ing upon the representations contained in the plan and sections, was induced to abstain from opposing the bill. The line of deviation is marked upon the plan, and is by the act limited to ten yards in passing through villages, and one hundred yards in the open country. 3. In this case it was decided, that the plans were only bind- ing upon the company to the extent to which they were referred to in the act, and that it made no difference that the deposited plans were so incorrect as altogether to mislead the owner of the time, the intention was that the railway should be fifteen feet four inches below the surface of the respondent's property at the point of intersection ; and that the bridge by which his approach should pass over the railway, would not be more than three feet. But this was entirely an intimation, on the part of the company, that such was their intention. An act of parliament of this sort has, by Lord Eldon and all other judges who have considered the subject, been con- sidered as a contract. Well, then, what took place was a negotiation, — it was not a contract. We must disregard it, and we must look to see what the con- tract was. The contract is to be gathered from the words of the act of parlia- ment ; and that brings us to the question that I first considered, what is the construction of the act of parliament ? That act of parliament must be con- sidered as overruling and doing away with everything that had taken place prior to the time when the act passed, and renders the representation or proposal of the company, pending the act, of no avail. Many cases have occurred in the courts of common law in which it has been held, that everything that takes place before a written contract is signed is entirely to be disregarded in construing the contract. Now, if the respondent had been cautious, he would have done what I would strongly recommend to all gentlemen hereafter to do, under sim- ilar circumstances, which is, to have a special clause introduced into the act of parliament to protect their rights." See also Beardmer v. The London & N. Western Railw., 5 Railw. C. 728. The same rule obtaius in this country. Boston & Pro v. Railw. v. Midland Railw., 1 Gray, 340 ; Commonwealth v. Fitchburg Railw. 8 Cush. 240. It seems that the deviation of five feet, which, by the 11th section of the Railways Clauses Act of 1845, is allowed in regard to levels, is to be reckoned with reference to the level of the datum line, and not with reference to the surface-levels delineated on the plans. And any greater deviation in regard to levels, which may be obtained, under certain conditions, in certain emergencies, is subject to the discretion of the Railway Commissioners ; and at the suit of land-owners, affected by such deviation, beyond the limits allowed by the act, the Court of Chancery will re- strain the company from proceeding until they obtain the judgment of such com- missioners. Pearce v. Wycombe Railw., 19 Eng. L. & Eq. 122. *189 388 CONSTRUCTION OF RAILWAYS. § 105. lands, in reference to the manner in- which his property would be affected by the railway works. The plans not being referred to in the act, or only referred to, as in the present case, to determine the datum line with reference to lateral deviation, could not con- trol beyond the matter of lateral deviation. 4. This subject is incidentally connected with the performance of construction contracts. But it has been held, that where the company deviate from the intended line of the road, even beyond what was permitted by their act, with the consent of the land- owner, and the contractor never objected to the deviation, but continued to receive certificates of estimates, and payments, in * precisely the same mode in which he would have received them had the deviation not taken place, that it did not affect his lia- bility upon the contract. 2 5. A reference, in the special act, to the deposited plans, for one purpose, does not make them binding for all purposes. 3 So too, where, by the general acts, a railway company has power to pass highways and other roads, by bridges, or excavation, in their discretion, but their special act gives them power to pass them on a level, this will not compel them to do so ; they may still exercise the power conferred by the general acts. And a special agreement with land-owners, that they will pass such roads on a level, being a contract in derogation of public right, inasmuch as the public security is greatly jeoparded thereby, will not be specifically enforced in a court of equity. 4 6. The extent of deviation is to be measured from the line delineated upon the plans to the actual medium filum of the rail- way as constructed, and the fact of the embankments extending beyond that distance is no violation of the right of deviation * Ranger v. The Great Western Railw., 27 Eng. L. & Eq. 35. 8 Reg. v. Caledonia Railw., 3 Eng. L. & Eq. 285. Where there is a power given for deviation in the construction, which would render some portion of the delineated surveys impracticable, it must be taken, as of necessity, that the legislature intended the omission of such particulars as became impracticable in a given contingency allowed by the act. * Braynton v. The London & North W. Railw., 4 Railw. C. 553. But the Lord Chancellor, upon appeal, considered that the agreement only extended to the land to be purchased, and that it contained nothing intended to limit the powers given to the company by the general acts. *190 §105. LINE OF RAILWAY. — RIGHT OF DEVIATION. 389 allowed in the act. 5 Where a tunnel is marked upon the plans referred to in the act, it must be made in the exact position in- dicated, and the general right of deviation does not apply. 6 But the company may take lands within the line of deviation for a branch railway. 7 Under an act allowing land to be " taken when necessary for making and maintaining the said railway and works," it was held that the company might take lands for forming or enlarging stations, or places for carriages to collect and wait till trains are ready to start ; and the Lord Chancellor said, in one case, 8 " The * term railway, by itself, includes all works authorized to be constructed ; and for the purpose of con- structing the railway, the company are authorized to construct such stations and other works as they may think proper." 7. And it would seem that, where lands are designated by numbers on the plans, although not altogether within the line of deviation, they may be taken by the company when necessary for stations. 9 And it has recently been decided in the House of Lords, that where the legislature authorized a railway company to take, for the purpose of their undertaking, any lands specially described in the act, it constitutes them the judges as to whether they will or will not take those lands, provided they take them bond fide, with the object of using them for the purposes authorized by the legis- lature, and not for any sinister or collateral purpose. 10 And 6 Doe d. Payne v. The Bristol & Exeter Railw., 2 Railw. C. 75 ; s. c. 6 M. & W. 320; Doe d. Armistead v. The North Staffordshire Railw., 4 Eng. L. & Eq. 216. 6 Little v. The Newport, Ab. & Hereford Railw., 14 Eng. L. & Eq. 309. 7 Sadd v. The Maldon, Witham & B. Railw., 2 Eng. L. & Eq. 410. 8 Cother v. Midland Railw., 2 Phillips, 469. 9 Crawford v. Chester & Holyhead Railw., 11 Jur. 917; 1 Shelford, Bennet's ed. 617. But the deviation is not authorized for the purpose of taking materials alone. Bentinck v. Norfolk Estuary, 32 Law Times, 29. 10 Stockton & Darlington Railw. Co. v. Brown, 6 Jur. N. S. 1168. But a railway cannot take the fee of land for the purpose of supplying soil to build an embankment. Eversfield v. Midsussex Railw., 1 Gif. 153 ; s. c. affirmed, 5 Jur. N. S. 776 ; s. c. 3 De G. & J. 286. Nor can land be taken within the range of the powers conceded by the act, except for the exclusive purpose of the works named in the act, and if any subsidiary object is embraced in the pur- pose of taking, as to give a more convenient road for an ordinary land-owner, who was to pay part of the expense, the company will be restrained by injunc- tion. Dodd v. Salisbury & Yeoville Railw. Co., 1 GifT. 158 ; 5 Jur. N. S. 782. •191 390 CONSTRUCTION OF RAILWAYS. § 105. after referring the question, as to the propriety or right to take the land, to an engineer, who decided against the company and in favor of the land-owner, the court ultimately held that neither the opinion of the engineer nor of the court could curtail the power of the company in respect to the quantity of land which the company, bond fide acting under its statutory powers, sought to obtain. 8. And where, by a special act, a company were empowered to erect a market house on land described in the deposited plans, it was held, that as the land of the plaintiff was described in the plans, and as therefore it might be wanted, the company were authorized to take it, and that the company were to be regarded as the proper judges of what lands were necessary for the works. 11 9. The trustees of a turnpike-road agreed to assent to a bill in parliament for the formation of a railway, on the condition that the railway should pass over the road at a sufficient elevation, and the road be not lowered, or otherwise prejudiced. It was held that this modified assent, not being embodied into any agreement between the trustees and company, or incorporated into the act, afforded no equitable ground for restraining the company from the exercise of all their powers under their act ; that the company were authorized to sink the original surface of a turnpike-road to gain the requisite elevation for the arch of a bridge to carry the railway over the road, notwithstanding the effect might be to render the road liable to be occasionally flooded. 12 Any omission, misstatement, or erroneous descrip- tion in the parliamentary plans referred to in the act, may be corrected on application to two justices, in the mode prescribed in the act. 13 10. By statute, in some of the states, a railway company who file the location of their road in the requisite office, are allowed to deviate, to any extent consistent with their charter, in the course of construction. 14 But it has been held, that after once 11 Richards v. The Scarborough Public Market Co., 23 Eng. L. & Eq. 343. 12 Aldred v. The North Midland Railw., 1 Railw. C. 404. 13 Taylor v. Clemson, 3 Raihv. C. 65, shows the mode of procedure in such cases. 14 The Boston & Providence Railw. v. The Midland Railw., 1 Gray, 340. The charter gave the company power to construct their road in five mile sec- §105. LINE OF RAILWAY. — RIGHT OF DEVIATION. 391 locating * their road, their power to re-locate, and, for that pur- pose to occupy the land of another or the public street, ceases. 15 11. It has been held, that a grant to a railway company to con- struct their road between two towns, gave them implied authority to construct a branch to communicate with a depot and turn-table, on a street in one of the towns (New Orleans) off the direct line. 16 12. The grant to take land implies power to take buildings. 17 And a grant to take land for the company's road implies the right to take land for all the necessary works of the company, * tions, but not to begin the work within a prescribed distance of one terminus, or until all of its stock was taken by responsible persons, and one hundred and forty thousand dollars paid into the treasury, it was held, that this restriction, in regard to the subscription and payment of stock, did not fix a limitation upon the company in regard to building their whole road net in sections. The courts, in interpreting an act of incorporation, will not examine what took place while it was passing through the legislature. Bank of Pennsylvania v. The Commonwealth, 19 Penn. St. 144. And in Commonwealth v. Fitchburg Railw. 8 Cush. 240, it was held, that the petitions to the legislature upon which the act was granted were inadmissible upon the question of the construction of the act, in regard to the course and direction of the line of the road. 15 Little Miami Railw. v. Naylor, 2 Ohio St. 235. And an authority to change the location of the line, during the work, does not imply power to change it after the road is complete. Moorhead v. Little Miami Railw., 17 Ohio, 340. The same view is maintained by Lord Eldon, Ch., in Blakemore v. Glamorganshire Canal Co., 1 My. & K. 154. But a different rule seems to be intimated in S. C. Railw. ex parte, 2 Rich 434. But see Canal Co. v. Blakemore, 1 CI. & Fin. 262 ; State v. Norwalk & Danbury Turnpike Co., 10 Conn. R. 157; Turnpike Co. v. Hosmer, 12 Conn. R. 364 ; Louisville & Nashville. Branch Turnpike Co. v. Nash- ville & Kentucky Turnpike Co., 2 Swan, 282, where the proposition of the text is maintained. But in South Carolina Railw. v. Blake, 9 Rich. 229, it is held, that a railway company have the same power to acquire land, either by grant or by compulsory proceedings, for the purpose of varying, altering, and repairing their road, as for the original purpose of locating and constructing it. But that the company are not the final arbiters in determining the exigency for taking the land. The petition of the company for taking the land should allege in detail the necessity for taking it, and the land-owner may traverse these allega- tions, and in that case this is tried as a preliminary question. 15 Knight v. Carrolton Railw., 9 Louis. Ann. 284 ; N. O. & C. Railw. v. Sec- ond Munic. of New Orleans, 1 Id. 128. But where by the charter of a railway they were authorized to construct their road " from Charleston " to certain other points, it was held that this gave them no authority to enter the city, but that the boundary of the city was the terminus a quo. Northeast Railw. v. Payne, 8 Rich. 177. " Brocket v. Railway, 14 Penn. St. 241. *192 392 CONSTRUCTION OF RAILWAYS. § 105. such as depots, car and engine houses, tanks, repairing shops, houses for switch and bridge tenders, and coal and wood yards, but not for * the erection of houses for servants, car and engine factories, coal-mines, etc. 18 13. And a charter allowing the company to extend their line to a certain point, " thence running through Acton, Sudbury, Stow, Marlborough," &c, does not oblige the company to locate their road through these towns, in the order named in the charter. And a location of the road from Acton through Stow to Sud- bury, and thence through Stow again to Marlborough, was held to be a sufficient compliance with the grant. 19 14. If the charter of a railway limit the line of construction, by the boundaries of a borough, and the boundaries of such borough are subsequently extended, that will not alter the right of the company in regard to the location of their road. 20 And an exclusive grant for a railway within certain limits, denned at one terminus by a city, is to be restrained to the limits of the city at the date of the grant. 21 15. A party whose land was taken by a railway company for the purposes of their road, and the damages assessed and de- J8 State v. Comm. of Mansfield, 3 Zab. 510; Vt. Cent. Railw. v. Burlington, 28 Vt. R. 193 ; Nashville & C. Railw. v. Cowardin, 11 Humph. 348. 19 Commonwealth v. The Fitchburg Raihv., 8 Cush. 240. See also Brigham v. Agricultural Branch Railw., 1 Allen, 366. It seems agreed that slight devia- ations from the route prescribed in the charter will not release the stockholders from the obligation of their subscriptions ; but that any substantial deviation will have that effect. The precise line of distinction between the two classes of cases must be left to the construction of the courts in each particular case. The stockholders may enjoin the company in the course of construction from making an essential deviation, and after the road is completed, the company may, by scire facias, be called to account for not building upon the route indicated in their charter. But where all interested acquiesce in the route adopted, until their road is completed, it will require a very clear case to induce the courts to interfere. The following cases bear upon the general question : Ashtabula & N. L. Railw. v. Smith, 15 Ohio St. 328; Champion v. Memphis & C. Railw. Co., 35 Miss. R. 692 ; Fry v. Le*. & Big S. Railw. Co., 2 Met. (Ky.) 314 ; Aurora v. West, 22 Ind. R. 88 ; Smith v. Allison, 23 id. 366 ; Miss. O. & R. Railw. v. Cross, 20 Ark. R. 443 ; Witter v. same Co., Id. 463 ; Illinois Grand T. Railw. v. Cook, 29 111. R. 237. See also K. R. & R Railw. v. Marsh, 1 7 Wise. R. 13. 30 Commonwealth v. Erie & North East Railw., 27 Penn. St. 339. n Pontchartrain Railw. v. Lafayette & Pont. Railw., 10 Louis. Ann. 741 *193 § 105. LINE OF RAILWAY. — RIGHT OF DEVIATION. 393 posited for, and accepted by him, with full knowledge of all the proceedings and of any defect therein, and who allowed the com- pany to occupy the land and make improvements thereon, with- out remonstrance, for two years, and who then brought an action of trespass against the company, on the ground that their pro- ceedings were irregular and void, was held to have waived all right to object to them on that ground. 22 16. And where the company by charter had power to take land for engine and water stations, within five years from the date of their grant, it was held they could not exercise such powers after the expiration of the time limited, although operating their line by horse power during that time they had not required the ex- ercise of such powers on that account. 23 17. A charter to construct a railway, " to commence at some convenient point in the city of Brooklyn, and to terminate at Newtown, Queen's county, — to be located in King's and Queen's counties, and its length to be about twenty-five miles " ; there being both a town and village of the name of Newtown, and the boundary of the town being also the boundary of the city of Brook- lyn, it was held, that the natural and only consistent construction was, to regard Newtown as the village of that name, and thus ex- tend the railway through a portion of both counties named, and not restrict it to the limits of the city of Brooklyn. 24 18. It is here declared, that where the charter, as applied to the route indicated, defines a precise line, that line becomes as binding upon the company as if it formed a portion of the charter itself; and that where a map is filed in conformity with the charter, which does not embrace the entire route indicated by the charter as applied to the subject-matter, in order to recon- cile the apparent conflict, the map may be regarded as intended to give only a portion of the route ; or in case of irreconcilable con- flict, the map must yield to the express provisions of the charter. 24 The distinction between the application of terms to indicate the route of a railway and to define its termimi, is considerably dis- cussed in a late case in New Jersey. 25 52 Hitchcock v. Danbury & Norwalk Railw., 25 Conn. R. 51 G. M Plymouth Railw. Co. v. Colwell, 39 Penn. St. 337. 54 Mason v. Brooklyn & Newtown Railw. Co., 35 Barb. 373. 15 McFarland v. Orange & Newark Horse-Car Railw. Co., 2 Beasley, 1 7. 394 CONSTRUCTION OF RAILWAYS. §106. 19. A power to change the location of a railway, on account of the difficulty of construction and other causes, may be exercised at any time before the construction is finished at the particular point.- 20. The lines and works of a railway are sufficiently indicated by black lines upon the plan, and dotted lines around them to mark the limits of deviation. 27 And where the deposited plans and sections specify the span and height of a bridge by which the railway is to be carried over a turnpike road, the company will not, in the construction of the bridge, be allowed to deviate from the plans and sections. 28 SECTION II. Distance, hoio measured. 1 . This is affected by subject-matter. 2. Contracts to build railway, by rate per mile. 3. General rule to measure by straight line. 4. Same rule in regard to turnpike-roads. § 106. 1. Questions of some perplexity sometimes arise in re- gard to the mode of measuring distance, in a statute or contract. The import of terms defining distance will be sometimes con- trolled by the context, or the subject-matter. In one case, 1 where the assignor of the lease of a public-house in London covenanted that he would not keep a public-house within half a mile from the * premises assigned, it was held that the dis- tance should be computed by the nearest way of access. 2. And contracts to be paid for constructing a turnpike, or railway, a given price by the mile, would, ordinarily, no doubt, require an admeasurement upon the line of the road. It was held, in a late case in Vermont, that in such cases the con- tractor is not entitled to compute the length of track, and thus * 5 Atkinson v. Mar. & Cin. Raihv. Co., 15 Ohio St. 21. 27 Weld v. London & S. W. Raihv., 9 Jur. N. S. 510. M Atty.-General v. Tewksbury & Great Malvern Raihv. Co., 9 Jur. N. S. 951. 1 Leigh v. Hind, 9 B. & C. 774 ; s. c. 17 Eng. Comm. L. R. 495. But Parke, J., was of a different opinion, and said : " I should have thought that the proper mode of measuring the distance would be to take a straight line from house to house, in common parlance, as the crow flies." *194 § 106. DISTANCE, HOW MEASURED. 395 include turnouts and side-tracks. 2 But tins might not exclude branch lines extending any considerable distance from the main track. 3. But, in general, the English courts have chosen to adhere to the rule laid down by Parke, J., in Leigh v. Hind, that dis- tance is to be measured in a direct line, through a horizontal plane. Thus, in settlement cases, where the pauper laws pro- vide that no person shall retain a settlement gained by possess- ing an estate or interest in a parish for a longer time than he shall inhabit " within ten miles thereof," it was held, that the dis- tance was to be measured in a direct line from the residence to the nearest point of the parish. 3 And the twenty miles within which the parties are required to reside, in certain cases affecting the jurisdiction of the county courts, by the recent statute, 9 & 10 Vict. c. 95, § 128, is to be computed in a direct line, without reference to the course of travel. 4 4. And where a turnpike act provided, that no toll-gate should be erected nor any toll taken, within three miles of B., and the road did not extend to B., but connected with another turnpike which did, and also a public road, made since the act was passed, it was held, that the three miles should be measured " in a straight line on a horizontal plane, and not along any of the roads." 5 5. And where the rate of fare is fixed by the mile, and no provision made for fractions of a mile, the company can only * Barker v. Troy & Rutland Railw., 27 Vt. R. 766. 3 Regina v. Saffron-Walden Railw., 9 Q. B. 76. * Stokes -v. Grissell, 25 Eng. L. & Eq. 336 ; Lake v. Butler, 30 Eng. L. & Eq. 264. 6 Jewell v. Stead, 36 Eng. L. &. Eq. 114. Lord Campbell, Ch. J., said: " I am of opinion that the distance is to be measured by a straight line upon a horizontal plane." Lake v, Butler, supra, lays this down as a general rule. Lord Campbell, Ch. J. : "I think we ought to adopt that mode which is most convenient and most certain. If the distance is to be measured by the nearest mode of communication, uncertainty will be introduced, whether it may be by foot way, or bridle way, or carriage way ; and in some cases the distance must be travelled by all the three modes ; and in others by a tidal river, in which case the distance would vary, at different times of the day ; also the distance by car- riage road might be shortened, or lengthened, by a new road being made. But if the other mode of calculation is adopted, no uncertainty will arise." 396 CONSTRUCTION OF RAILWAYS. §107. charge the prescribed tariff for the full mile traversed. 6 But the English statute 7 provides specially for fractions of a mile. ♦SECTION III. Mode of Construction, to be done with least Damage. 3. Works interfered with, to be restored, for all uses. 1 . Does not extend to form of the road, but the mode of construction. 2. Special provisions of act not controlled by this general one. § 107. 1. It has been held, that the general provisions of the Railways Clauses Consolidation Act, that in the exercise of their powers, the company shall do as little damage as possible, and shall make satisfaction, to all parties interested, for all damages sustained by them, does not extend to the form of constructing the railway. It does not apply to what is done, but to the man- ner of doing. 2. Hence, if by other sections of the statute or special act the company are required to build bridges in a particular form, they may still do so, notwithstanding it may cause more damage to the owners of land than to build them in some other form. 1 3. And where, in a parliamentary contract between the pro- moters of a railway and the proprietors of a ropery, it was stip- ulated that the railway should be so constructed, that when finished the level of the ropery should not be altered, nor the surface of the ropery in the least diminished, it was held the company were bound to restore the surface, so as to be available for all purposes to which it might have been applied before the construction of the railway, and not for the purposes of the ropery only. 2 • Rice v. Dublin & Wicklow Railw., 8 Ir. Com. Law, 160. 7 21 & 22 Vic. C. 75 S. 1. 1 Regina v. The East & W. I. Docks and B. J. R., 22 Eng. L. & Eq. 113. 1 Harby v. The East & W. I. Docks and B. J. R., 1 De G. M. & G. 290. * 195 § 108. MODE OF CROSSING HIGHWAYS. 397 * SECTION IV. Mode of crossing' Highways. 1. English statutes require it should not be at 10. Grant to build railways across main line grade. implies rigid to use them as common 2. Or if so, that gates should be erected and j carriers. tended. 11. Railway responsible for injury by Jailing 3. And if near a station, railway train not I into culvert when covered by snow. 12. The right to lay line across railway car- ries light to lay as many tracks as art convenient for the business. 13. Damages for laying highway across rail- way. 14. Laying highway across railway at grade. Company not estopped iy contract with former owner of land. to exceed four miles an hour. 4. Cannot alter course of highway. 6. Mandamus does not lie where company have an election. 7. Railway cannot alter highway to avoid building bridge. 8. Extent of repair of bridge over railway. 9. Permission to connect branches with main line not revocable. § 108. 1. By the general English statutes upon the subject of railways, it is provided, " that if the line of the railway pass any turnpike-road, or public highway, then, (except when otherwise provided by the special act,) either such road shall be carried over the railway, or the railway shall be carried over such road, by means of a bridge." 1 2. And by § 47 it is provided*, that whenever the railway does pass any such road, upon a level, the company shall maintain gates, at every such crossing, either across the highway, or the railway, in the discretion of the railway commissioners, and em- ploy suitable persons to tend the same, who are required to keep them constanty shut, except when some one is actually passing the highway, or railway, as the case may be. 2 3. And where a railway passes a highway near a station, on 1 Railway Clauses Consolidation Act, § 46. Mandamus requiring the com- pany to carry their road over a highway, by means of a bridge, when that was the only mode in which it could be done, according to the level of the line of the railway at the time, was held bad. Southeastern Railw. v. The Queen, 20 L. J. 428. 5 A road on which toll-gates are erected and tolls taken is a turnpike road. The Northam, B. & Roads Co. v. London & Southampton Railw., 6 M. & W. 428 ; 1 Railw. C. 653 ; Regina v. E. & W. I. Docks Railw. Co., 22 Eng. L. & Eq. 113. *196 398 CONSTRUCTION OF RAILWAYS. § 108. a level, the trains are required to slacken their speed, so as not to pass the same at any greater speed than four miles an hour. 3 4. The right to raise or lower highways, in the construction of a railway, does not authorize the company to change the course of the highway, even with the consent of the town council, and for * so doing the company were held liable to persons who had sustained special damage thereby. 4 5. The right to use " highways " in the construction of plank roads, contained in a general law, does not extend to military roads constructed by the United States, while the state was a territory, 5 but the legislature may grant such right, by the charter of the company. 6. And where a mandamus 6 recited that the railway, which defendants were empowered to make, crossed a certain public highway, not on a level, by means of a trench, twenty feet deep, and sixty-five feet wide, through and along which the railway had been carried, and the highway thereby cut through and rendered wholly impassable for passengers and carriages ; and that a reasonable time had elapsed for defendants to cause the highway to be carried over the railway, by means of a bridge, in the manner pointed out in the statute," and commanded de- fendants to carry the highway over the railway, by means of a bridge, in conformity with the statute, particularly specifying the mode, it was held, that it not being otherwise specially provided in the company's charter, they had, by the general act, an option to carry the highway over the railway, or the railway over the highway, by a bridge ; and that the option was not determined by the facts alleged in the writ, and the judgment of the Ex- 3 § 48. Some similar provisions, in regard to the construction of railways in this country, seem almost indispensable to the public security. But the rage for cheap railways is so great, that nothing of the kind could be effected, we fear, at present. 4 Hughes v. Providence & Wor. Railw., 2 R. I. R. 493. It is the duty of a railway company not to obstruct public roads, where they intersect the railway- track, either by stopping a train or otherwise ; and the company must take the consequences of all such obstructions. Murray v. Railw. Company, 10 Rich. (S. C.) 227. 6 Attorney-General v. Detroit & Erie Plank-Road Co., 2 Mich. R. 138. • Regina v. The Southeastern Railw., 6 Eng. L. & Eq. 214. ' 8 and 9 Vict. c. 20. * 107 § 108. MODE OF CROSSING HIGHWAYS. 399 chequer, awarding the writ, was accordingly reversed in the Queen's Bench. 7. Where the charter of a railway authorized them, by con- sent of the commissioners, to alter a highway whenever it became necessary in order to build the railway in the best place, and required the company to maintain all bridges made necessary to carry the highway over the railway : It was held that the com- pany had no power to alter the course of the highway in order to avoid the expense of building a bridge ; and that the old high- way was still subsisting, notwithstanding the attempt thus to lay out a substitute. 8 8. And where a railway company, under their statutory powers, in England, carry a highway over their road by means of a bridge, the company is bound to keep both the bridge and the road and all the approaches thereto in repair, and such repair includes not only the structure of the bridge, but the superstructure, and every- thing requisite to put the highway in fit condition for safe use. 9 9. Where the proprietors of land, through which a railway company were empowered to take the right of way, had the right to lay branch railways upon the lands adjoining, and to connect them at proper points with the main line, so as not to endanger the safety of persons travelling as passengers upon the railway, and in case of difference in regard to any of these points, the same to be determined by two justices of the peace ; but the company were not required to admit any such branch to connect with their line, at any place where they should have erected any station or other building ; it was held that the consent of the company to unite with the line at a station was not in the nature of a license and could not be revoked. 10 10. And where the owners or occupiers of adjoining land had the right to build railways, and to cross the line of the principal railway, without being liable to toll or tonnage, it was held the 8 Norwich & Worcester Railw. v. Killingly, 25 Conn. R. 402. Nor have the company any right under such a power to materially and essentially change the route of a highway, that being a power resting solely in the discretion of the municipal authorities. Warren Railw. Co. v. State, 5 Dutcher, 393. See also Veasie v. Penobscot Railw. Co., 49 Me. R. 119. 9 North Staffordshire Railw. Co. v. Dale, 8 Ellis & Bl. 835. 10 Bell v. Midland Railw. Co., 3 De G. & Jones, 673. 400 CONSTRUCTION OF RAILWAYS. § 108. owners of such railways might use them as common carriers of freight and passengers. 11 11. In crossing highways, railway companies will be responsi- ble to any person injured by leaving a culvert, made to prevent water accumulating, in such a condition that when covered by snow he fell into it, being unable to see in. 12 12. A railway corporation having acquired the right to lay its line across a highway, may lay and maintain as many tracks as are essential to the convenient transaction of its business. 13 13. A railway corporation is entitled to damages for land taken by laying a public highway across its line, and for the expense of maintaining signs and cattle guards at the crossing, and of flooring the same and keeping it in repair ; but not for any in- creased liability to accidents, for increased expense of ringing the bell, or for its liability to be ordered by the county commissioners to build a bridge for the highway over the track. And in assess- ing damages, in such a case, no supposed benefits from an in- crease of travel on the railway can be set off against the com- pany. 14 14. Under the revised statutes of Massachusetts, town or city authorities have no power to lay a highway across a railway, at grade, and the company is not estopped from objecting thereto by any agreement with the former owners of the land in regard to the right of way to be used by them at the point where the high- way is laid. 15 Nor can such authorities, under the general statutes of that state, lay out a way across any portion of the land, not exceeding five rods in width, which has been taken by a railway company for their line, unless permission has been granted by the county commissioners. 16 11 Hughes i>. Chester & Holyhead Railw. Co., 8 Jur. N. S. 221. ,a Judson v. N. Y. & N. Haven Railw. Co., 29 Conn. R. 434. 15 Commonwealth v. Hartford & New Haven Railw., 14 Gray, 379. 14 Old Colony & F. R. Railw. v. County of Plymouth, 14 Gray, 155. 15 Boston & Maine Railw. v. City of Lawrence, 2 Allen, 107. 18 Commonwealth v. Haverhill, 7 Allen, 523. § 109. RIGHTS OF TELEGRAPH COMPANIES. 401 SECTION V. Rights of Telegraph Companies. 1. Right to " pass directly across a railway," j 3. Erecting posts in highway a nuisance, does not justify boring under it. even if sufficient space remain. 2. Exposition of the terms "under" and j n. 4. Opinion of Crompton, J. " across." j § 109. 1. Where a telegraph company had by their act the power to pass under highways, but to pass " directly but not otherwise across any railway or canal," and a railway was laid upon the level of a highway, in accordance with their special act, it was * held that the telegraph company could carry their works under the highway at the point where it was intersected by the railway. 1 But the telegraph company, attempting to pass under the railway in such a manner as to disturb their works, was held liable in trespass. 2 2. Parke, B., in giving judgment, said: "Across seems there- fore different from under, and the power to carry ' across ' does not enable them to go under. It may be that this prohibition would not apply, if the railway were carried over a highway, at a great height, for then the highway and railway might be con- sidered independent of each other." 3. In a recent English case 3 it was decided, that a telegraph company, which erected posts in any portion of the highway, al- though not in the travelled portion of it, whereby the way is rendered in any respect less commodious to the public than be- fore, is guilty of committing a nuisance at common law ; and the fact that the jury find that a sufficient space for the public use remained unobstructed, will not afford any justification, unless the act is done by legislative permission. 4 1 Southeastern Railw. v. European & Am. Tel. Co., 24 Eng. L. & Eq. 513. 8 Post, §§ 164, 130, 143. * Reg. v. United Kingdom Electric Telegraph Company, 9 Cox, C. C. 1 74 ; 3 F. &F. 73, 8 Jur. N. S. 1153. 4 The case is of so much importance that we have ventured to insert the leading opinion on the final hearing in full bench. Crompton, J. " The defendants were indicted for erecting their posts on a hi^h VOL. I. 26 * 198 402 CONSTRUCTION OF RAILWAYS. § 109. road, so as to obstruct the public in the use thereof, and we determined before giv- ing judgment to hear the case of Regina v. Train, thinking it possible that the same question might there arise, or that something, at all events, throwing light upon it might be elicited during its progress. Having heard that case, there is nothing to prevent our giving judgment without further delay. My brother Martin laid down two propositions, and the question is, whether either of them constitutes a misdirection. The first of these propositions was as follows : ' In the case of an ordinary highway, although it may be of a varying and unequal width, run- ning between fences, one on each side, the right of passage or way prima facie, and, unless there be evidence to the contrary, extends to the whole space be- tween the fences ; and the public are entitled to the use of the entire of it as the highway, and are not confined to the part which may be metalled or kept in order for the more convenient use of carriages and foot passengers.' Now, this seems to us a very proper direction. It is urged by Mr. O'Malley that this rul- ing is not applicable to a place where there is a considerable portion of green- sward on either side of the metalled road, which either the owner of the ad- joining freehold or the lord of the manor would be entitled, if he thought proper, to enclose. This is the first of two objections taken on behalf of the defendants. But it seems to me that my brother Martin carefully guards against that. He says, that prima facie the space between the fences is to be taken as the highway ; and this seems to be in accordance with the judgment of Lord Tenterden, C. J., in Rex v. Wright, 3 B. & Ad. 681, where he says: 'I am strongly of opinion, when I see a space of fifty or sixty feet through which a road passes, between enclosures set out under an act of Parliament, that, unless the contrary be shown, the public are entitled to the whole of that space, though, perhaps, from economy, the whole may never have been kept in repair.' The same principle is involved in the decision in Williams v. Wilcox, and my brother Martin seems to have laid down the law in unison with these cases. He says, * that prima facie, and in absence of evidence to the contrary, the public are entitled to the right of passage over the whole, and are not confined to that part which is metalled for the better convenience of travellers and traffic' Mr. O'Malley was unable, when invited, to say to what definite portion of the road' metalled, or otherwise, he held the public to be entitled. He, however, contended that the posts might have been erected on what was in fact no part of the highway, such as a rock, or something of that kind, which might occupy part of the space between the fences, but over or across which no road could possibly exist. But this would not be a part of the highway any more than a house similarly placed, built before the dedication of the road. We think, therefore, on the first point, the direction of the learned judge was correct, and that the right of the public extends over the entire highway. •• The second proposition laid down by the learned judge is a wider one, and it remains to be seen whether it amounts to a misdirection. It is, ' that a perma- nent obstruction erected on a highway, placed there without lawful authority, which renders the way less commodious than before to the public, is an unlawful act, and a public nuisance at common law ; and that if the jury believed that the defendants placed, for the purposes of profit to themselves, posts, with the § 109. RIGHT OF TELEGRAPH COMPANIES. 403 object and intention of keeping them permanently there, in order to make a telegraphic communication between distant places, and did permanently keep them there, and the posts were of such size and dimensions and solidity as to obstruct and prevent the passage of carriages, and horses, or foot passengers upon the parts of the highway where they stood, the jury ought to find the de- fendants guilty upon this indictment ; and that the circumstance that the posts were not placed upon the hard or metalled part of the highway, or upon a foot- path artificially formed upon it, or that the jury might think that sufficient space for the public traffic remained, are immaterial circumstances as regards the legal right, and do not affect the right of the crown to the verdict.' This ap- pears to us also to be substantially a proper direction, inasmuch as the real question is, whether there was a practical, as distinguished by myself in Regina v. Russell, from a mathematical nuisance. My brother Martin appears dis- tinctly to have raised that point, by saying that the posts must be of such size, dimensions, and solidity as to obstruct and prevent the passage of carriages and horses and foot passengers at all. In Regina v. Russell, the jury found there was no practical obstruction ; but where there is a practical obstruction on a highway, by which the public are prevented from using it, that is a nui- sance according to all definitions of the word, and it makes no difference whether or not enough be still left unobstructed for the use of the public ; or whether the obstruction is placed on that part of the road which is neither metalled nor repaired for the purpose of traffic. In Rex v. Wright, Lord Tenterden laid it down that the public are entitled to the entire space on either side of the high- way, as he says, for the benefit of air and sun. We must take it now that the jury found the defendants guilty upon these facts, and that the posts were of such size and solidity as to create an obstruction, and amount to a nuisance. It was further objected by Mr. O'Malley that certain of the posts appeared actually to have stood upon parts of the road which were inaccessible to travel- lers ; but supposing this to be the case, it would be no use to the company to have these few isolated posts left standing at different spots along the line of road ; and if they wished to keep them, they should have contended at the trial that some of these posts did not come within the rule laid down by the learned judge. We thifik, therefore, that with respect to these few posts, which may possibly have excepted from the rule, it would be useless to grant a rule," 404 CONSTRUCTION OF RAILWAYS. §110. SECTION VI. Duty in regard to substituted Works. 1 . Bound to repair bridge substituted for ford, or to can// highway over railway. 2. The same rale has been applied to drains, substituted for others. 3. Hie extent of this duty as applied to bridge and approaches. § 110. 1. Where a public company, as a navigation company, under the powers conferred by the legislature, destroyed a ford and substituted a bridge, it was held, that they were liable to keep the bridge in repair. 1 So, too, where such company cut through a highway, rendering a bridge necessary to carry the highway over the cut, the company are bound to keep such bridge in repair. 2 2. So, where a navigation company had power to use a public drain, by substituting another, or others, it was held that the company were bound to keep in repair the substituted drains, as well as make them. 3 3. Under the English statute, 4 where the company carried the highway, by means of a bridge, over the railway, it is bound to maintain the bridge ; and all the approaches thereto in repair, and such repair includes not only the structure of the bridge, and the approaches, but the metalling of the road on both. 5 But this will not include the road beyond where it may properly be regarded as forming an approach to the bridge. 6 1 Rex v. Inhabitants of Kent, 13 East, 220; Rex v. Inhabitants of Lindsey, 14 East, 317. 2 Rex v. Kerrison, 3 M. & Sel. 526. This duty may be enforced by indict- ment. Regina v. Ely, 19 L. J. (M. C.) 223. And the same obligation rests upon the assignees of the company. Penn. Railw. Co. v. Duquesne Borough, 46 Penn. St. 223. 8 Priestly v. Foulds, 2 Railw. C 422; 2 Man. & Gr. 175. 4 8 and 9 Vict, c. 20. 6 Newcastle, &c. Turnpike Co. v. North Staf. Railw. 5 H. & N. 160. 6 W. & L. Railw. v. Kearney, 12 Ir. Com. L. 224 ; Fosberry v. Waterford & Limerick Railw., 13 Ir. Com. Law, 494; London & North Western Railw. Co. v. Skerton, 5 B. & S. 559. § 111. NATURE OF WORKS. — MODE OF CONSTRUCTION. 405 ♦SECTION VII. Construction of Charter in regard to Nature of Works, and Mode of Construction. § 111. There are some cases in regard to the construction of railway works, and their requisite dimensions, which have come under the consideration of the courts, and where the decisions are of little precedent, for other cases, not altogether analogous, and on that account scarcely deserving an extended analysis, but which nevertheless we scarcely feel justified in wholly omitting here. 1 1 Attorney-General v. London & Southampton Railw., 1 Railw. C. 302. This case is in regard to the width of a road under a railway bridge. Manchester & Leeds Railw. v. Reg. (in error), 3 Railw. C. 633. The footpaths are not to be regarded as any part of the requisite width of the bridge. Reg. v. Rigby, 6 Railw. C. 479; Reg. v. London & Birmingham Railw., 1 Railw. C. 317. This is a case in regard to the width of a bridge over a highway. Reg. v. Birming- ham & Gloucester Railw., 2 Railw. C. 694, which is a case in regard to the width of the approaches to a bridge across a railway. Reg. v. Eastern Counties Railw., 3 Railw. C. 22, as to the right to lower a street, in order to obtain the requisite height under a bridge, notwithstanding the provisions of the local paving act. Reg. v. Sharpe, 3 Railw. C. 33, as to the right to erect a bridge at a different angle from the former road. Where a special act required a company to strengthen a bridge described in the act, held that they might, nevertheless, pull down the old bridge and build a new one. Wood v. North Staffordshire Railw., 1 McNagh. & G. 278; Rex v. Morris, 1 B. & Ad. 441, as to making a railway on a turnpike road. A turnpike road, having power to take tolls upon any way leading out of their road, may demand tolls of passengers crossing their road upon a railway granted subsequently. Rowe v. Shilson, 4 B. & Ad. 726. Where a railway company, in the course of construction, turned a stream of water, which by their charter they might do, restoring it to its former state, as near as practicable, and the new channel was properly guarded, as far as could be perceived, at the time of turning it, it was held, that the company were not obliged thereafter to watch the operation of the water and take precautions to prevent its encroaching upon the adjoining lands. Norris v. Vt. C. Railw., 28 Vt. R. 99. See also Fitchburg Railw. v. Grand Junction Railw. & Depot Co., 4 Allen, 198, where a question in regard to apportioning the expense of a work done by the plaintiff, for the mutual benefit of the parties, in conformity with statutory provisions, is considered, and numerous exceptions on the part of the * 199 406 CONSTRUCTION OF RAILWAYS. §112. SECTION VIII. Terms of Contract. — Money Penalties. — Excuse for Non- Performance. 1 . Contracts for construction assume unusual forms. 2. Estimates made by engineer. 3. Money penalties, liquidated damages. Full performance. 4. Excuses for non-performance. 5. Penalty not incurred, unless upon strictest construction. 6, 7. Contractor not entitled to anything for part-performance. n. 2. Proper construction of the terms used in these contracts. 8. Contract for additional compensation must be strictly performed. § 112. 1. As the time within which such works are to be accomplished is often limited in the act, and as the manner in which the * work is done, is of the greatest possible importance to the public safety, the law sanctions contracts for such under- takings, in forms not only unusual, but which might not be strictly binding perhaps in the case of ordinary contracts. For instance, it is not uncommon for the contract to impose penal- ties upon the contractor for slight deviations from the terms of agreement, and to secure to the company the absolute right to put an end to the contract, whenever they or their engineer are dissatisfied with the mode in which the work is done, or the progress made in it. 2. And it is almost universal, in these contracts in this coun- try, to refer the quality and quantity of the work done, and the consequent amount of payments, to be made from time to time, to the absolute determination of an engineer employed by the company. 1 3. The penalties which these contracts provide, either abso- lutely, or in the discretion of the company's engineer, for delay defendant are overruled by the court. The most important of these exceptions, and which the court regarded as no sufficient ground of defence, are : that the commissioner appointed under the statute, in supervising the work and appor- tioning the cost, conducted with partiality towards the plaintiff, and under their undue influence ; and that the value of the defendant's property and franchise was diminished by the work, and those of the plaintiff increased thereby. 1 Ranger v. Great Western Railw., 1 Railw. C. 1 ; s. c. 3 Id. 298 ; ante, § 105. ♦200 § 112. PENALTIES. — EXCUSE FOR NON-PERFORMANCE. 407 in the work, are to be regarded, commonly, in the nature of liquidated damages. 2 To entitle the party to recover for work 8 Ranger v. Great Western Railw., 27 Eng. L. & Eq. 61. In regard to the penalties given by the contract, it is said here by the Lord Chancellor : " All the circumstances which have been relied on in the different reported cases, as distinguishing liquidated damages from penalty, are to be found here. The injury to be guarded against was one incapable of exact calculation. The sum to be paid is not the same for every default, for that which should occasion small as for that which should cause great inconvenience, but one increasing as the inconvenience would become more and more pressing; and, finally, the pay- ments are themselves secured by the penalty of a bond ; and this is hardly con- sistent with the notion that the payments secured were themselves only penal sums to secure something else. For these reasons, I think it clear that these payments, though called penalties, are in truth liquidated damages, agreed on by the parties, and which the company might set off against the demand of the appellant upon them under the contract. But then the appellant contends that the company never had a title to recover these penalties, because the delays in respect of which they claimed were produced by the harassing and vexatious conduct of the respondents themselves, or their agents. It is sufficient on this head to say, that the appellant, in my judgment, wholly fails to make out, in point of fact, the proposition for which he contends. The only penalties actually deducted are 200/. for five weeks' delay in completing the headings of tunnels 1 and 3 in contract 1 B, and 20/. for delay in the works of the Avon bridge. There is no doubt but that these sums were due, unless the appellant could re- lieve himself by showing that the delay had been forced on him by the companv itself. The evidence altogether fails to satisfy me of this." Where, in a contract between the original contractors for building a railway and the sub-contractors, it was provided, that the work should be subject to the supervision and control of the engineer of the company, and that he should make monthly estimates, four fifths of which " value " should be paid to the sub- contractors ; and when the work was completed, a final estimate ; the monthly and final estimates as to the quantity, character, and value of the work done, should be conclusive between the parties ; and that if the contractor should not truly comply with his part of the agreement, or in case it should appear to the engineer that the work did not progress with sufficient speed, the other party was to have power to annul the contract ; and the unpaid portion of the road was to be forfeited by the sub-contractor and become the property of the other party ; Held, that the award of the engineer declaring the work forfeited, was con- clusive, and binding on the sub-contractor; that the action of the sub-contractor upon the contract was in affirmance of the contract, and that he could not therefore impeach its stipulations. That the term " value," as used in the contract, was to be distinguished from the term " price," fixed for the different classes of work, and that the engineer, in making monthly estimates, had a right to deduct from the amount of work 408 CONSTRUCTION OF RAILWAYS. § 112. done upon * construction contracts, he must show, either that he has performed the labor according to the contract, or that the other party has waived strict performance, or hindered it. 3 4. But the party may excuse full performance by showing that he was prevented by an injunction out of Chancery at the suit of a third party. 4 Or, that the parties had entered into a new contract for the same work, upon different terms. 5 5. Where the work was suspended at the request of the com- pany, with the view to a new location, the company agreeing to pay the plaintiff $ 750 by way of damages, if the work should not be resumed within two years, and, if it was, the plaintiff to proceed with the work at the prices stipulated, upon those sec- tions not altered ; the route being altered as to some of the sections, upon * which the defendants resumed within the two years, employing others to do the work, without giving notice to plaintiff; held, that the plaintiff could not recover the damages agreed, as the work was resumed within the two years, but that the plaintiff was entitled to damages for not being employed to do the work. 6 6. Where, by the terms of the contract, a proportion of the sum earned is to be paid monthly, and the remainder reserved, done sufficient to bring it to the average of all the work to be done, and is not bound to allow the sub-contractor the price stipulated in the contract, for work of this description. If the company withheld unjustly funds due the sub-contractor, they could not fairly take advantage of the forfeiture declared for want of prosecution of the work. But the retention of the 20 per cent, in case of forfeiture, is intended as the measure of reparation for the failure to perform the w.ork according to the contract, and not as a mere penalty. The payment after the forfeiture, by one of the original contractors, of the hands who had been employed on the works by the sub-contractor, and furnish- ing money to carry on the work, is not a waiver of the forfeiture, especially if he was then ignorant that the work had been forfeited. Faunce v. Burke, 16 Penn. St. 469. 3 Andrews v. The City of Portland, 35 Me. R. 475. And it was held here, that part payment, under the contract, after the contractor had failed in strict performance, was no waiver, unless the failure was known to the employer at the time of payment. 4 Whitfield v. Zellnor, 24 Miss. R. 663. 5 Howard v. The Wilmington & Susquehannah Railw., 1 Gill, 311. • Fowler v. Kennebec & Portland Railw., 31 Me. R. 197. *2GT, 202 t §113. EXECUTION. — EXTRA WORK. DEVIATIONS. 409 as security for the fulfilment of the contract, it was held, that nothing was due till the day of payment, which could be at- tached by trustee process. 7 7. And where, in such case, the company have the power to determine the contract, and the reserved fund is thereby to be forfeited, and the company do so, after the contractor has worked one month and part of another, and has received the proportion of payment for the first month, it was held nothing was due to the contractor. 8 8. Where a railway company, after making a contract for the construction of its road, became embarrassed and was unable to make payments to the contractor, and the president, who was a stockholder, and extensively interested in the success of the en- terprise, made an additional agreement with the contractor that he would give him his notes to the amount of $ 10,000, if the work were completed by a day named, it was held, that he was not liable upon the agreement unless the contractor performed his part of the agreement by the day named. The notes were, by the terms of the agreement, to go in part payment of what was due from the company, and the new agreement was not to affect the subsisting contract with the company. 9 SECTION IX. Form of Execution. — Extra Work. — Deviations. 1. No particular form of contract requisite generally. 2 But the express requirements of the charter must be complied with. 3. Extra work cannot be recovered of the com- pany, unless done upon the terms speci- fied in contract. 4. If the company have the benefit of work are liable. § 113. 1. No particular form of contract is requisite to bind the company, unless where the charter expressly requires it. 1 7 Williams v. Androscoggin & Kennebec Railw., 36 Me. R. 201. 8 Hennessey v. Farrell, 4 Cush. 267. 9 Slater v. Emerson, 19 How. (U. S.) 224. 1 Post, §§ 164, 130, 143. Corporations cannot enter into partnerships, but two or more corporations may become jointly bound by the same contract. Marine Bank of Chicago v. Ogden, 29 111. R. 248. 410 CONSTRUCTION OF RAILWAYS. § 113. And although there seems still to be a failing effort in the Eng- lish courts to maintain the necessity of the contracts of corpora- tions being under seal, 2 it is certain that the important business transactions of * daily occurrence, in both that country and here, where no such formality is resorted to by business corporations, in matters of contract, and where to look for any such solem- nity would be little less than absurd, almost of necessity drive the courts of England to disregard the old rule of requiring the contracts of corporations to be made under the corporate seal. 6 2. But when the charter of the corporation requires any par- ticular form of authenticating their contracts, it cannot be dis- pensed with. And where, by the charter of a railway company, the directors were authorized to use the common seal, and all contracts in writing, relating to the affairs of the company, and signed by any three of the directors, were to be binding on the company ; and the company entered into a contract, not under seal, by their secretary, to complete certain works, and, after part performance, the contractor was dismissed by the company, it was held he could not recover the value of the work done. 3 2 Mayor of Ludlow v. Charlton, 6 M. & W. 815. But see Beverly v. Lincoln Gas Light & Coke Co., 6 Adol. & Ellis, 829 ; Dunston v. The Imperial Gas. Co., 3 B. & Ad. 125. Tindal, Ch. J., in Gibson v. East India Co.,[5 Bing. (N. C.) 262, by which it seems that the English courts except from the operation of the rule only such transactions of business corporations as could not reasonably be ex- pected to be done under seal. But see Bank of Columbia v. Patterson, 7 Cranch, 299, and 2 Kent, Comm. 289, 291, and notes, where it is said the old rule is con- demned, and English and American cases cited and commented upon. Post, § 143 ; United States Bank v. Dandridge, 12 Wheat. 64 ; Bank of the Metropo- lis v. Guttschlick, 14 Pet. 19 ; Norwich & "Worcester Railw. v. Cahill, 18 Conn. R. 484 ; San Antonio v. Lewis, 9 Texas R. 69. See, also, Weston v. Bennett, 12 Barbour, 196 ; Rathbone v. Tioga Navigation Co., 2 Watts & Serg. 74. 3 £%gh3 v. The London & Blackwall Railw., 6 Railw. C. 590. It is said here that a contract, to be binding on a corporation when not under seal, must be one of necessity, or of too frequent occurrence, or too trivial, to be made under seal. In a recent case in the Court of Exchequer, Williams v. Chester & Holy- head Railw., 5 Eng. L. & Eq. 497, Martin, B., thus comments upon the rule of evidence in regard to implied contracts of corporations. " Persons dealing with these companies should always bear in mind, that such companies are a corpora- tion, a body essentially different from an ordinary partnership or firm, for all purposes of contracts, and especially in respect of evidence against them on legal trials ; and should insist upon these contracts being by deed under the seal of the company, or signed by directors in the manner prescribed by the act of par- *203 § 113. EXECUTION. — EXTRA WORK. — DEVIATIONS. 411 * 3. But where the contract contains express provisions that no allowance shall be made against the company for extra work, unless directed in writing under the hand of the engineer or some other person designated, or unless some other requisite formality be complied with, the party who performs extra work, upon the assurance of any agent of the company that it will be allowed by the company, without the requisite formality, must look to the agent for compensation, and cannot recover of the company, either at law or in equity. 4 So, under the English General Company Acts, where the directors are authorized to contract on the part of the company, although not in writing, when such contracts would, if entered into by private persons, be binding in that form, three directors being a quorum for that purpose, it was held, that the mere fact that extra work was done with the approbation of the company's engineer, the special con- liament. There is no safety or security for any one dealing with such a body, on any other footing. The same observation also applies in respect of any vari- ation or alteration in a contract which has been made." But see post, § 143, and cases cited. And where the assistant engineer upon a railway, having charge of the construction of a section of the road, becoming dissatisfied with the contractor, dismissed him, and assumed the work himself, agreeing with the workmen to see them paid, it was held his subsequent decla- rations could not be admitted, to charge the company for supplies furnished the contractors, on the ground that they were not made in the course of the per- formance of his duty as agent of the company. Stiles v. The JVestern Railw., 8 Met. 44 ; s. c. 1 Am. Railw. C. 397. See also Underwood v. Hart, 23 Vt. R. 120, where the subject of the admissions of agents is discussed, and the cases revised. If a contract under seal be enlarged by parol and subsequently performed, or if the terms of the contract under seal be varied by parol, the proper remedy is by an action of assumpsit. Sherman v. Vermont Central Railw., 24 Vt. R. 347 ; Barker v. Troy & Rutland Railw., 27 Vt. R. 774. In Childs v. The Somerset and Kennebec Railw. in the Circuit Court of the United States, before Mr. Justice Curtis, 20 Law Rep. 561, it was held, that where the plaintiff, by special contract, agreed to build certain bridges and depots for the defendant corpora- tion, for which he was to be paid partly in cash and partly in shares of their cap- ital stock, and in the progress of the enterprise it became necessary to do much extra work, and furnish materials not provided for in the special contract ; that the plaintiff was entitled to recover the whole value of the extra work and ma- terials thus furnished in money, upon an implied assumpsit, and that the agree- ment to take pay in shares did not extend to this part of the work. * Kirk v. The Guardians of the Bromley Union, 2 Phil. 640 ; Thayer v. The Vermont Central Railw., 24 Vt. R. 440; Herrick v. Same, 27 Vt. R. 673 ; Vanderwerker v. Same, 27 Vt. R. 125, 130. *204 412 CONSTRUCTION OF RAILWAYS. § 114. tract requiring written directions for all the work, had no ten- dency to prove a contract binding the company. 5 4. In one very well-considered case 6 upon the subject of extra work, not authorized in the manner specified in the contract, it is said by the Vice-Chancellor : " From what I have been in- formed of the course taken at law in these cases, it is this : If, in an action by a contractor, it appears that the company have the benefit of the work, done with their knowledge, the court of law does not allow the company to take the benefit of that work without paying for it, although in covenant (or any action upon the contract) the contractor cannot recover." This may be in accordance with the general rules of law applicable to the sub- ject. 7 *SECTION X. If one Parly repudiate the Contract, the other may sue presently. — Inevitable Accident. 1. Part}) repudiating excuses the other. I 3. President cannot bind the company. 2. New contract valid. \ 4. Effect of inevitable accident. § 114. 1. Questions often arise in regard to the right of a par- ty to sue for damages before the time for payment arrives, and be- fore he has fully performed on his part. But it seems now to be well settled, that where one party absolutely repudiates the con- tract on his part, he thereby exonerates the other from further per- formance, and exposes himself presently to an action for damages. 1 6 Homersham v. Wolverhampton Waterworks Co., 6 Railw. C. 790. Pollock, Ch. B., said : " The company is not bound by the mere order of the engineer, or by the contract with one director." 6 Nixon v. Taff Vale Railw., 7 Hare, 136. But see post, § 130, 143. T Dyer v. Jones, 8 Vt. R. 205 ; Gilman v. Hall, 11 Id. 511. But, in many cases, the work is done by a sub-contractor, and enures to the benefit of the original contractor, as in Thayer v. Vermont Central Railw., 24 Vt, R. 440, and would not therefore give any right of action against the company, although in one sense they may put the work to their own use, and so may be said to have the benefit of it, to some extent. 1 Cort v. The Ambergate, Not. B. & E. J. Railw., 6 Eng. L. & Eq. 230 ; Blanche v. Colburn, 8 Bing. 14 ; Hochster v. De Latour, 20 Eng. L. & Eq. 157. But in an action to recover damages on such contract, the jury are not to go into conjectured profits resulting from a sub-contract very much below what the plaintiff was to be paid, but only the difference between the contract price and *205 §114. REPUDIATION. — INEVITABLE ACCIDENT. 413 2. Where the contract is unconditionally repudiated by one party, before it is fully performed, it is competent for the other to stipulate for its performance, upon different terms, no doubt. And such stipulation, although not under seal, would probably be regarded as made upon a valid and sufficient consideration ; and if made by an agent of the former party to the contract, but who had not authority to bind his principal to such contract, it would nevertheless be binding upon the agent and other party contracting, and would not be required to be in writing, as it would be an original and not a collateral undertaking. 3. But it has been held, that after a railway company has entered into a written contract, for the performance of certain work, the promise of its president to allow additional compensa- tion to the contractors, for the same work, is without considera- tion and not binding upon the company. 2 4. A very singular question arose in a late English case. 3 The plaintiff agreed to make and erect on premises, under the control of the defendants, certain machinery, and the latter were to provide all necessary brick work, &c. Before the works were completed the buildings in which the work was to be done were destroyed by fire. It was held the plaintiffs were entitled to re- cover for the work already done by them before the fire, and that it was an implied term of the contract that the defendant should provide the buildings in which the work was to be done, and enable the plaintiffs to do their part of the work and there- fore that the defendant was not relieved by the occurrence of the fire ; as a party who contracts to do a thing is bound to carry out his engagement, or to make compensation, notwithstanding he is prevented by inevitable accident. the value of doing the work, at the time of the breach, can be given. Masterton v. Mayor of Brooklyn, 7 Hill, 61. - Colcock v. Louisville Railw., 1 Strobhart, 329 ; Nesbitt v. L. C. & C. Kailw., 2 Speers, S. C. R. 697. The controversy here is in regard to hard pan excava- tion. And as the plaintiff contracted to do all the work on the road, and to con- struct the road-bed, and his contract only provided for earth and rock excava- tion, he is bound to accept his estimates under the contract, and especially, after having done so, he cannot claim extra compensation for excavating hard pan, even if he show that, by usage, " earth " has a technical meaning, and does not include hard pan. 3 Appleby v. Meyers, 12 Jur. N. S. 500. 414 CONSTRUCTION OF RAILWAYS. § 115. *SECTION XI. Decisions of Referees and Arbitrators in regard to Construction Contracts. 1 . Award valid if substantially correct. \ 2. Court ivill not set aside award, where it does substantial justice. § 115. 1. The general rule of law, in regard to the decisions of arbitrators and referees, by which they have been held bind- ing upon the parties, although not made strictly according to the technical rules of law, if understandingly made, and exempt from fraud or partiality, has been sometimes applied to contracts for construction of railway works, the settlement of which has been determined by an umpire. As where the contract reserved the right to the company to alter the gradients of the road, and to substitute piling for embankment without extra allowance. These alterations were made, and thus increased the expense to the contractors. The final settlement being made by referees, to whom " all matters in dispute, with the contract as a basis of settlement,"' were referred, and they having allowed the contrac- tor compensation for this increased expense, it was held to be within the power conferred upon the referees. 1 2. So, too, where the contract specified a price for earth exca- vation, and another for rock excavation, but nothing was said of " hard pan," a good deal of which occurred in the course of the work, which was admitted to be more expensive then the ordi- nary earth excavation. The whole subject was referred, and the plaintiff claimed in his specification thirty cents per yard for excavating hard pan, and the referees allowed him fifty cents on trial. The defendants objected to the allowance, being more than the claim. But the court said, where the testimony was received without objection, and showed the party entitled to re- 1 Porter v. Buckfield Branch Railw., 32 Maine R. 539. In this case the con- tract provided for payment of a portion of the price of the work in the stock of the company, and the arbitrators directed, that the same proportion of their award should be paid by issuing certificates of stock, and the award was held valid in this particular also. *206 § 116. DECISIONS OF COMPANY'S ENGINEERS. 415 'cover, beyond his specification, the court will not set aside the report, or grant a new * trial, where it is apparent the party has not recovered more than what he is fairly entitled to. 2 SECTION XII. Decisions of Company's Engineers. * 1. Estimates for advances, mere approxima- tions, under English practice. 2. But where the engineer's estimates are final, can only be set aside for partiality or mistake. 3. Contractor bound by practical construction of the contract. 4. Estimates do not conclude matters, not re- ferred. 5. If contractor consent to accept pay in de- preciated orders, he is bound by it. 6. Right of appeal lost by acquiescence. 7. Engineer cannot delegate his authority. 8. Arbitrator must notify parties, and act bona fide. § 116. 1. The English contracts for railway construction gen- erally contain a provision for referring the final settlement with the contractor to an indifferent board of arbitrators, or one se- lected by the parties respectively, with the umpirage of a third party in case of disagreement. 1 Under such contracts the pro- vision in regard to monthly or semi-monthly estimates is such, that they are understood to be mere approximations, and it is only equivalent to a provision, that the company shall advance, from time to time as the work progresses, a stipulated propor- tion of the work, which they shall, by their engineer, adjudge to be done. All that is requisite" to the validity of such estimates is, that they were made bond fide, and with the intention of act- ing according to the exigency of the contract. 1 2 Du Bois v. Delaware & Hudson Canal Co., 12 Wend. 334. 1 Ranger v. Great Western Railw., 27 Eng. L. & Eq. 35, 46. So where in a canal contract it is provided, that the engineer " shall in all cases determine the amount or quality of the several kinds of work " to be done, and the compensation therefor, and either party had the right to compel an in- different reference, where they felt aggrieved by the decision of the engineer, " to investigate and determine all questions that may arise relating to compensa- tion for work done under this contract " ; it was held, this umpirage only ex- tended to the final account of the engineer. People v. Benton, 7 Barb. 209. Under a contract where the company stipulated to pay the contractor ninety per cent of work done, according to the engineer's estimate ; and the engineer had the right to declare the contract abandoned, and in that event the ten per *207 416 CONSTRUCTION OF RAILWAYS. § 116. 2. But where the contract contains provisions referring the estimate of the quantity and quality of the work absolutely to the determination of the company's engineer, or any particular party, and provides, as is not uncommori in this country, that his decision shall be final, no relief from his determination can ordinarily be obtained, even in a court of equity, unless upon the ground of * partiality, or obvious mistake, which latter is held to apply rather to the quantity, than the quality of the work, this being purely matter of judgment and discretion, and which was intended to be concluded by the opinion of the ar- bitrator. 2 But in a recent English case 3 before Vice-Chancellor Stuart, where in a building contract the corporation reserved the power to determine the contract, which they afterwards exercised, and it was stipulated that any dispute or difference which might arise between the contracting parties should be referred to and settled by the engineer, that it should not be competent for either party to except at law or equity to his determination, and that without the certificate of the engi- neer no money should be paid to the plaintiffs"; it appearing that the engineer had never refused to discharge his duty ac- cording to the contract, and had nothing to disqualify him to act, and was ready and willing to proceed and determine all cent, became forfeited, and the engineer did so declare ; it was held that this did not absolve the company from the payment of the ninety per cent, upon the work done by the contractor, before the contract was declared abandoned. Ricker v. Fairbanks, 40 Maine R. 43. 2 Herrick v. The Vermont Central Railw., 27 Vt. R. 673; Kidwell v. Bait. & Ohio Railw., infra; Alton Railw. v. Northcott, 15 111. R. 49. In this case it was held that the estimate of the umpire will not bind the parties, if based on an erroneous view of the contract. So a court of equity may correct the mistakes of the engineer, although the contract stipulates that his decision shall be final. Mansfield & Sandusky Railw. v. Veeder, 17 Ohio R. 385. So, too, where the engineer proved to be a stock- holder in the company. Milnor v. The Georgia R. & Banking Co., 4 Ga. R. 385. And in Kerns v. O'Reilley, Leg. Int. Aug. 31, 1866, it was decided that the award of an engineer between contractor and sub-contractor is final. And in Leech v Caldwell, id. Nov. 16, 1866, it was held, that where the sub-contractor covenanted to abide the decision of the engineer of the work in any dispute arising on the contract, the alleged fraud of the engineer did not ofTset the covenant. * Scott v. Corporation of Liverpool, 31 Law Times, 147, 1858. *208 § 116. DECISIONS OF COMPANY'S ENGINEERS. 417 matters at issue between the parties, it was held that there was no ground for the equitable interference of the court. 3. If the contractor acquiesce in a particular construction of his contract, and allow his estimates, from time to time, to be made upon such basis, he will be bound by it thereafter. 4 • 4. Where the contract specifies a price for rock excavation, and another for ordinary earth excavation, and in the course of the work a large quantity of hard pan was excavated, for which no provision was made in the contract, and the othe„r party con- ceded that compensation was due, beyond the price fixed in the contract for ordinary earth excavation, it was decided that the contractor might recover upon a quantum meruit count. And where the contract also provided that the engineer should finally determine all questions necessary to the final adjustment of the contract, this did not render the engineer's estimate conclusive, as to the sum to be paid for excavating hard pan. 5 These points are both decided, mainly, it is presumed, upon the concession of the defendant, that the hard pan excavation was a matter alto- gether outside of the contract. Otherwise it might seem diffi- cult to maintain their entire consistency with other decided cases. 6 5. Where the contract gives the engineer power to stop the work, when the means of carrying it forward fail, and he in- formed the contractor it could not proceed unless he would re- ceive his monthly pay in orders, which were at a discount, and the * contractor consents to receive them, he is not entitled to recover of the company the amount of such depreciation. 7 6. And although the contractor, by the contract, had the power to refuse to abide by the final estimates of the engineer, 4 Kidwell v. The Baltimore & Ohio Railw., 11 Grattan, 676. See also Com- monwealth v. Clarkson, 3 Penn. St., 277. 5 Dubois v. Delaware & Hudson Canal Co., 12 Wend. 334 ; s. c. 15 Id. 87. See s. c. 4 Wend. 285. But see ante, § 114; Nesbitt v. L. C. &c. Railw., 2 Speers, 697, where hard pan seems to be regarded as earth excavation, unless there is some special provision in the contract for estimating it otherwise. 6 Morgan v. Birnie, 9 Bing. 672. See also Sherman v. The Mayor of New York, 1 Comst. 316, 320. T Kidwell v. The Baltimore & Ohio Railw., 11 Grattan, 676. See also Com- monwealth v. Clarkson, 3 Penn. St., 277, upon the general subject of the conclu- siveness of the engineer's estimate. VOL. I. 27 *209 418 CONSTRUCTION OF RAILWAYS. §117. yet if he submitted to him his charges for the work done, and made no objection to his making up the final estimate, he is bound thereby. 7 7. Where in a contract for work upon a railway it was stipu- lated that the work should be measured by defendant's engineer or agent, which should be final and conclusive, it was held that such person could not delegate his authority, but that it was indispensable that he should himself make the admeasurement. But in making the admeasurement, it is not necessary that he should give previous notice to the parties to enable them to be present. 8 8. But if such agent is to make an estimate of certain ex- penses to be allowed the plaintiff, and he proceeds to do so, in the absence of plaintiff and without notice to him, he will not be bound by the estimate. But such estimate will not be af- fected by the inadequacy of the amount, or that the usual means were not resorted to for ascertaining facts, if the umpire act bond fide, which is a fact to be determined by the jury. 8 SECTION XIII. Relief in Equity from Decisions of Company's Engineers. 1 . Facts of an important case stated. 2. Claim of contractor in the bill. 3. Bill sustained. Amendment alleging mis- take in estimates. 4. Relief only to be had in equity. 5. Proof of fraud must be very clear. 6. Engineer being shareholder, not valid ob- jection. 7. Decision of engineer conclusive as to qual- ity of work, but not as to quantity. 8. Neio contract condonation of old claims. 9. Account ordered after company had com- pleted work. 10. Money penalties cannot be relieved against unless for fraud. n. 1. Review of the cases upon this subject. 11. Engineers' estimates not conclusive unless so agreed. Contractor, whose work surrendered by supplemental contract, entitled to full compensation. Direction of umpire binding on contract- ing parties, and dispenses with certifi- cate of full performance. 12 13 117. 1. In consequence of the peculiar stringency of the terms of contracts for railway construction, applications for re- 8 Wilson v. York & Md. Railw. Co., 11 Gill & Johns. 58. Gross negligence is not fraud, but is evidence to be considered by the jury. Id. § 117. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 419 lief in * equity have not been unfrequent. In one case 1 it was agreed by the contract that every fortnight the engineer of the 1 Ranger v. Great Western Railw., 1 Railw. C. 1 ; s. c. 13 Sim. 368. And where by the contract the work was to be done to the satisfaction of the engineer of the defendants, and suit was brought without obtaining the judgment of the engineer, held, that it could not be maintained. Parkes v. The Great Western Railw., 3 Railw. C. 1 7. This case is also found in 3 Railw. C. 298, and in 27 Eng. Law & Eq. 35. This case came before the House of Lords, on appeal for final determination, May 26, 1854, just ten years after the decision in the Vice-Chancellor's court. The judgment was in the main affirmed, but in form was reversed, and sent back to the Court of Chancery, for an account to be taken between the parties, accord- ing to their respective rights, as established by the final decision. The case, as it appeared on the final hearing, is deserving of a more extended notice. The following is the statement of the case, and the points ruled in the House of Lords. In a contract between R. and a railway company for the performance by R. of a portion of the line of railway, after reciting that R. agreed to secure the due performance of his contract, by his bond in the penal sum of £4,000, conditioned for the payment to the company of certain fixed sums for every week in which the work should not be completed according to the contract, the penalty in each successive week to increase in a fixed proportion, it was witnessed, amongst other things, that in case R. should become insolvent, &c, or should, from any cause whatsoever (not the act of the company), not proceed in the works to the satis- faction of the company, the company might give to R. a notice in writing requir- ing him to proceed with the said works, and in case R. should for seven days after such notice make default in commencing or regularly proceeding with the said works, it should be lawful for the company to employ other persons to complete the works, and pay them out of the money which should be then remaining due to R. on account of his contract ; and that the moneys previously paid to R. on account of any works should be considered as the full value, and be taken by him as in full payment and satisfaction for all works done by him ; and that all moneys which either then or thereafter would have been payable to R. together with all the tools and materials then being upon the works, should, upon such default as aforesaid, become and be in all respects considered as the absolute property of the company ; and that if such moneys, tools, and materials should not be sufficient to pay for the completion of the works, then R. should make good such deficiency on demand. It was then further witnessed, and the company covenanted to pay to R. for the completion of the works the sum of £63,028 16s., in the following manner, namely, every fourteen days four fifth parts of the whole value of the said works which shall have been actually per- formed during the preceding fourteen days, until there should be a reserved fund of £4,000, and then every fourteen days to pay the full value of such works, such value to be estimated by the principal engineer or his assistant, having reference as well to the prices in the schedule (as to extra work) as to the entire cost *210 420 CONSTRUCTION OF RAILWAYS. § 117. * company should ascertain the value of the work d®ne, accord- ing to its quality and relative proportion to the whole work ; the of the whole works ; and at the expiration of one calendar month after the com- pletion of the entire works, to pay one moiety of the £4,000 so retained in the hands of the company, and at the expiration of one year and a month, the re- maining moiety of the £4,000. And it was lastly agreed, that during the progress of the works, the decision of the principal engineer for the time being of the company, with respect to the amount, state, condition, &c, or any other matter or thing whatsoever relating to the same, shall be final, and without appeal ; but in case of dispute, after the completion of the contract, as to any matter of charge or account between the company and R., such dispute shall be finally settled by the arbitration of the said engineer on the part of the company, and an engineer appointed by R. on his part, or if they disagree, by an arbitrator to be named by them. After R. had proceeded to a very considerable extent to- wards the completion of his contract, the company, being dissatisfied with the progress of the works, gave the notice to R. mentioned in the contract, and after seven days they took possession of the works, and of all the tools and materials thereon, and completed the works by other parties. R. filed his bill, setting up a case of fraud against the company in concealing the nature of the strata through which cuttings and tunnels were to be made, and insisting that he was entitled to be paid for those works at fair prices, regardless of the contract ; that the fortnightly certificates of the value of the works given by B., the engineer of the company, were void, and not binding upon him, in consequence of B. being a shareholder in the company ; that he was entitled to be relieved against certain money penalties which had been charged against him in the engineer's certifi- cates ; that the company were not justified in taking possession of the works, tools, and materials ; and that he was entitled to have an account taken of the value of the works done, on the footing that there were no contracts, or that they were abandoned ; and that the company might be debited with the value of the engines, tools, materials, articles, and things of which the company took possession. Held, first, that no case of fraud had been made out. But, semble, that although a corporation cannot be guilty of fraud, yet if their agents employed in carrying out a trading speculation be guilty of fraud, the corporation will be liable. Per the Lord Chancellor. Secondly, that the principle which prevents a person being a judge in his own cause (Dimes v. The Grand Junction Canal Co. T 17 Jur. 73; s. c. 16 Eng. L. & Eq. 63), does not apply to the case of the engineer of a railway company holding shares in that company, who, according to the terms of a contract be- tween the company and a contractor, was, during the progress of the works, to give periodical certificates of the value of the works done, but which, on the completion of the contract, were not final. Thirdly, that tha money penalties had been properly charged against R., they being, upon the proper construction of the contract, not penalties, but liquidated damages. Fourthly, that even assuming that the company were not justified in taking *211 § 117. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 421 contractor * to receive eighty per centum, the remainder being reserved to enforce the completion of the works. That if the possession of the works, tools, and materials, after the notice given, R. was not entitled to treat the contract as not existing, or as abandoned. R.'s right would have been by action for damages, and the seizure by the company formed no ground for such equitable relief as was asked. Fifthly, that, upon the true construction of the contract, the company did not, according to their contention, upon taking possession of the works and plant after notice, become absolute owners of the tools and materials, &c. ; this whole provision is to be regarded, not in the nature of a penalty, but as mere machinery for enabling the company to complete the works at the cost of R., and the com- pany are bound to account for the value of the tools and materials, in settling their accounts with him, which accounts were decreed to be taken on the footing of the contract. In regard to the competency of the engineer, the learned chancellor said : " When it is stipulated that certain questions shall be decided by the engineer appointed by the company, that is, in fact, a stipulation that they shall be decided by the company. It is obvious that there never was any intention of leaving to third persons the decision of questions arising during the progress of the works. The company reserved the decision for itself, acting, however, as from the nature of things it must act, by an agent, and that agent was, for this purpose, the engineer. His decisions were, in fact, their decisions. The contract did not hold out, or pretend to hold out, to the appellant, that he was to look to the engineer in any other character than as the impersonation of the company. In fact, the contract treats his acts and their acts, for many pur- poses, as equivalent, or rather identical. I am, therefore, of opinion, that the principle on which the doctrines as to a judge rest, wholly fails as to its applica- tion to this case. The company's engineer was not intended to be an impartial judge, but the organ of one of the contracting parties. The company stipulated that their engineer for the time being, whosoever he might be, should be the per- son to decide disputes pending the progress of the works, and the appellant, by assenting to that stipulation, put it out of his power to object, on the ground of what has been called the " unindifferency " of the person by whose decision he agreed to be bound. It is to be observed, that the person to decide was not a particular individual, in whom, notwithstanding his relation to the company, the contractor might have so much confidence as to agree to be bound by his awards, but any one from time to time the company might choose to select as their engineer. The appellant alleges that he did not know the fact that Mr. Brunei was a shareholder until more than two years after the works had been begun. " But he must have known that the company had it in their power to appoint another engineer in Mr. Brunei's place, who might hold shares, or that Mr. Brunei himself might purchase shares. Without the intervention of the engi- neer, the contract was, as it were, paralyzed ; nothing could be done under it ; and it surely can hardly be argued that a person appointed engineer could, by purchasing shares, render the contract practically inoperative." *212 422 CONSTRUCTION OF RAILWAYS. § 117- engineer should * not be satisfied with the worts, the company should be enabled, after notice given to the contractor, and his It is regarded as questionable, how far a contract, vesting the property of the contractor in the company, in the event of his insolvency merely, could be maintained, as consistent with the English bankrupt and insolvent laws. Rouch v. The Great W. Railw., 2 Railw. C. 505. But this objection may be obviated by the company stipulating for a lien merely ; a right to use the tools and ma- terials of the contractor in the completion of the work, according to and in ful- filment of his contract. Hawthorn v. Newcastle-upon-Tyne & N. Shield Railw., 2 Railw. C. 299. It is said in one case, by a very learned equity judge, Lord Redesdale (O'Connor v. Spaight, 1 Sch. & Lef. 309), that where an account has become, so complicated that a court of law would be incompetent to examine it, upon a trial at Nisi Prius, with all necessary accuracy, a court of equity will, upon that ground alone, take cognizance of the case. But a court of equity will not ordinarily interfere in any such case, and especially when the party applying has been guilty of laches. Northwestern Railw. v. Martin, 2 Phill. 758. See also Taff-Vale Railw. v. Nixon, 1 H. L. Cas. Ill ; Faley v. Hill, 2 Id. 45, 46. See also Nixon v. Taff-Vale Railw., 7 Hare, 136. It is questionable, we think, whether any such distinct ground of exclusive equity jurisdiction, in matters of account, as the complicated nature of the transactions can be maintained, but there is -little doubt this would be regarded as an important consideration in guiding the discretion of that court, in assuming such jurisdiction, in any par- ticular case pending in a court of law. But sometimes where the contractor claims the right to appropriate payments, made generally, to a different contract from that upon which the company desire it to apply, it becomes necessary to draw the whole into a court of equity. Southeastern Railw. v. Brogden, 14 Jur. 795 ; s. c. 3 McN. & G. 8. See upon the general subject Waring v. The Manch. & Sheffield & L. Railw., 7 Hare, 482. An important case, upon a contract for railway construction, finally determined in the national tribunal of last resort, upon elaborate argument and great consideration, and which involved most of the subjects involved in the case of Ranger v. the Great Western Railw.,' may be regarded, perhaps, as bearing something of the same relation to cases in this country upon that subject which the English case does to cases of that kind in the English courts. This is the case of Philadelphia, AVilmington, & Baltimore Railw. v. Howard, 13 How. 307 ; s. c. 1 Am. Railw C. 70. It came into the United States Supreme Court by writ of error to the Circuit Court of the United States for the District of Maryland. The facts in the case are complicated, and the points involved numerous. It will only be necessary to state the facts, in connection with the several points decided. The points bearing upon this subject are : — In such contract the covenant to finish the work by a time named on the one part, and to pay monthly on the other part, are distinct and independent cove- nants. And a right to annul the contract, on the part of the company, at any time, did not include a right to forfeit the earnings of the other party for work done prior to the time when the contract was annulled. *213 § 117. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 423 default in complying * for seven days to take possession of the works, thereupon the plant and materials of the contractor, and A covenant to execute the work, according to a certain schedule, which mentioned that it was to be done according to the directions of the engi- neer, bound the company to pay for work done according to his directions, although not strictly in conformity with a profile showing the original proximate estimates. And when the contract was to place the waste earth where ordered by the engineer, it was the duty of the engineer to provide a convenient place, and if he failed to do so the other party is entitled to damages. Where the contract authorized the company to retain, until the completion of the contract, fifteen per cent, of the earnings of the contractor, by way of indemnity from loss, by any failure to perform the contract by the contractor, it was held this was not to be regarded as a forfeiture, and that the company, if they terminated the contract, were bound to pay the contractor any amount which they had so retained, unless the jury were satisfied the company had sus- tained loss by the default, negligence, or misconduct of the contractor, which should be deducted. Where the contractor was delayed in the progress of the work, by an injunc- tion out of Chancery, he is entitled to no damages, unless the jury find that the company did not use reasonable diligence in obtaining a dissolution of the in- junction. If a railway company, having the power reserved to them of annulling a contract for construction, " when, in their opinion, it is not in due progress of execution," or the contractor is " irregular or negligent," it was held, that if they exercised this power for the purpose of having the work done cheaper, or of oppressing and injuring the contractor, he was entitled to recover damages for any loss of profit he might have sustained, and of the reasons which influenced the company, the jury were to be judges. And in Herrick v. Vermont Central Railw., 27 Vt. R. 673, the following points were decided upon this subject : — A stipulation in a contract for the construction, in part, of a railway, that " the engineer shall be the sole judge of the quality and quantity of the work, and from his decision there shall be no appeal," is binding upon the parties, and constitutes the engineer an arbitrator or umpire between them. Such a stipulation imposes upon the party by whom the engineers are to be employed, the duty of employing for' such engineers competent, upright, and trustworthy persons, and to see to it that they perform the service expected of them at a proper time and in a proper manner. Such a stipulation, when construed with reference to its subject-matter, and the ordinary course of business, does not require the estimates to be made or verified by the chief engineer, but has reference as well to the assistant, or res- ident engineer, by whom such estimates are usually made. If payment for the work performed is dependent upon and to be made ac- cording to the engineer's estimates, as to its amount, and the employing party *2U 424 CONSTRUCTION OF RAILWAYS. § 117. all the work done and not paid for, and the reserved fund to be forfeited to the company. performs its duty in reference to the employment of suitable engineers, &c, the obligation to pay will not arise until such estimates are made. But if no estimates are made, through the neglect or fault of the engineer, or of the party who employs him, the other party could probably recover, at law, for the work performed by him, without any engineer's estimate of it. A contract providing for monthly estimates of the contractor's work, accord- ing to which he is to be paid, imports an accurate measurement and final esti- mate for each month, and not such a one as is merely approximate or conjec- tural. A court of equity has jurisdiction of a claim to be paid for a larger amount of work done under such a contract than was estimated by the engineer, where the under-estimate was occasioned either by mistake or fraud. The Vermont Central Railway Co. contracted with B. for the construction of their railway, and B. contracted with the plaintiff for the construction of a part of it. In both contracts there was such a provision in reference to the conclu- siveness of the engineer's estimates. Held, that there was no privity of contract between the plaintiff and the Vermont Central Railway Co., and that he could not recover of them for work not estimated by the engineer, by reason only of a mistake, which they had not, either directly or indirectly, caused or connived at ; and that their indebtedness to B. for the same work for which he was in- debted to the plaintiff, did not constitute a fund against which the plaintiff had a claim. But if there was any connivance on the part of the Vermont Central Railway Co., or their agents, in bringing about the under-estimates complained of, even if it was without the design ultimately to defraud, but only as a temporary ex- pedient for present relief, the plaintiff would be entitled to recover of them the loss which he sustained by reason thereof. The plaintiff claimed in his bill, that he had been under-estimated a given amount, for the payment of which he instituted the present suit ; by the report of the Master, the amount not estimated was found to be more than twice that amount. Held, that the plaintiff should be limited to the amount claimed in his bill. The report of a Master in Chancery upon the taking of an account, should contain a succinct statement of all the points made by counsel, and the facts found by him upon each point. The testimony given viva voce before a Master in Chancery, in taking an ac- count, or a copy of it, should be returned to the court, with his report. The Master should also state the account, at length, and all the facts found by him, so that they will be intelligible, without reference to the testimony. In a contract for railway construction, where the parties by a subsequent con- tract stipulated for the completing of the work by a day named, for the additional price of £15,000, and a further stipulation that the contractor should pay the company £300 for each day's delay beyond the time specified, the company to § 117. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 425 *2. The company having taken the forfeiture under the con- tract, the plaintiff filed his bill, insisting that the engineer had under-estimated the work £30,000, and that no forfeiture had been incurred by him, and praying that the company might elect to permit the plaintiff to complete the works, or that the con- tract might be considered at an end, and in either case an ac- count between the parties might be taken. 3. The Lord Chancellor held, that the facts alleged do entitle the plaintiff to relief in equity. The plaintiff amended his bill, *and alleged that the most expensive masonry had been paid for only at the price of inferior work, and claimed large sums in that respect, and also alleged fraud against the company, in the contracts and in the certificates. 4. It was held, that the investigations as to the sufficiency of the payments made could only be made in a court of equity. 5. That the evidence in support of an allegation of fraud must be very clear, and that it is not enough to show that the state- ments of the company as to the nature of the work, gave imper- fect information, but it must also be shown that the contractor could not with reasonable diligence have acquired all necessary information. 6. The fact of the engineer being a shareholder in the com- pany is not enough to avoid his decision, as the contractor might have ascertained this fact. The character of an engineer is of more value to him than his interest as a shareholder. 7. That the decision of the engineer as to the quality of the work is conclusive, but not as to the quantity. The question of measurement and calculation will be entertained and decided by a court of equity. furnish the rails and chairs, blocks, &c, to complete the same, by the day specified. The work was not finished for twenty-four days after the time specified, and the rails, chairs, blocks, &c, were not furnished to complete it sooner. The court held the covenants independent of each other, and the contractor bound to deduct the stipulated forfeiture, notwithstanding the default of the company. Mcintosh v. Midland Counties Railw., 14 M. & W. 548 ; s. c. 3 Railw. C. 730. The rule of law that covenants, which are not the entire consideration for each other, will ordinarily be construed as independent, unless there is something in the transaction which shows the parties regarded them as dependent, is certainly carried further in this case than reason and justice would seem to justify. We think this case would not be followed in this country. *215, 216 426 CONSTRUCTION OF RAILWAYS. § 117. 8. That where the parties have entered into new contracts, it will be considered a condonation of old injuries, unless, at the time of making the new contract, the plaintiff insisted upon his adverse claims, the parties being at liberty to proceed at law. 9. After the works were completed by the company the court ordered an account taken, directing special inquiries as to the amount and kind of work done. 10. It was held that stipulations in regard to penalties in these contracts are binding upon the parties, and no relief against them will be afforded in equity unless fraud be shown. And that, where it had been agreed that a written contract should form part of an unwritten one, this will include stipula- tions as to forfeiture. 1 11. In one case in Pennsylvania 2 it was decided that the esti- mates and decisions of the engineer of a railway company are conclusive in disputes with contractors, only where such is the positive stipulation of the contract ; that in every other case the correctness of such estimates are to be tested by evidence, and in an action against the company by a contractor to recover a balance claimed to be due for work, it is correct to instruct the jury to rely on the engineer's final estimates unless shown to be erroneous. 12. In such a contract, where a supplemental contract was made by the company, assuming the work, and agreeing to pay the contractor for what work he had done, and reserving no claim for damages, either on account of the suspension of the work or its not being completed, it was held that the contractor was entitled to compensation according to the stipulations of the supplemental contract, without any deductions on account of suspension of or not completing the work, and that the work done and agreed to be compensated must be estimated at what it was worth, and the contractor's claim could not be restricted to what would be coming to him under the final estimates of the engineer ; nor could the company claim any deductions on ac- count of loss incurred in completing the work. 2 13. And where the plaintiff stipulated to perform the work of shifting the track of a railway, under the direction and to the 2 Memphis Railw. Co. v. Wilcox, 48 Penn. St. 161. § 118. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 427 satisfaction of the city surveyor, whose certificate that the work had been so performed was to entitle him to payment, it was held, that where the surveyor directed that the work should not be done beyond a certain point, that was a valid excuse for not obtaining his certificate of performance beyond that point. 3 •SECTION XIV. Frauds in Contracts for Construction. 1. Relievable in equity upon general princi- ples. 2. Statement of leading cases upon this subject. 3. Where no definite contract closed, no relief can be granted. § 118. 1. It is well known that courts of equity will relieve against fraud practised by the agents of railways, in building- contracts, the same as in other cases of fraud. But the impor- tance and peculiar nature of these contracts will justify a brief note of the cases decided upon the subject. 2. The most important case in the English books upon this subject, is that of Ranger v. The Great Western Railway, which we have just referred to upon another point. 1 And the state- 3 Devlin v. Second Avenue Railw. Co., 44 Barb. 81. 1 1 Railw. C. 1 ; s. c. 3 Railw. C. 298. On appeal in the House of Lords, 27 Eng. L. & Eq. 35, 41. In regard to fraud, on the part of railway companies, in building-contracts, the Lord Chancellor said : " The first ground on which the appellant rests his title to relief is, that he was induced to enter into the contract by the fraud of the company ; that the sum at which he agreed to do the works was far below what he would have required had he known the real nature of the soil through which the tunnels were to be made ; but on this point he had been misled by the fraudulent contrivance of the respondents. The case made by the bill on this head is, that there being on the line of the road to be made for the railway in the neighborhood of Bristol three kinds of stone, sandstone, Dunns or Dunn stone, and Pennant or Hanham stone, of which the first (that is, sandstone) is comparatively soft and easy to work, whereas the other two kinds (particu- larly the latter) are hard and difficult to work, the company acting through Mr. Brunei, their engineer, fraudulently contrived to make the appellant believe that the cuttings would be through the softer material (sandstone), and not through Dunns or Pennant stone, whereas the fact was, as they well knew, that the line was chiefly through the harder sorts of stone. The bill represents, that, for the purpose of enabling persons desirous of contracting to make the road along the line included in the contract described as 1 B, to tender for the same, it was * 217 428 CONSTRUCTION OF RAILWAYS. § 118. mcnt *of that case, in the House of Lords, by the Lord Chan- cellor Cranworth, is a better commentary than elsewhere exists, necessary that in different parts of that portion of the intended line pits should be sunk, called ' trial pits,' in order that the nature of the strata might be pre- viously known ; and accordingly that the respondents did sink ten such pits, but that eight of them were only sunk to the depth of a few feet, and were, therefore, of little or no use in showing what would be the nature of the soil at the level of the line of the railway, which was at a very considerable depth below the surface ; and the other two were sunk respectively to depths of 78 and 55 feet only, at points where the intended line of road was in one case 112 feet and in the other 97 feet below the surface, so that these two pits did not reach the level of the railway, in one case by 34 feet, and in the other by 42 feet. The bill further alleges that the soil dug out of all of the said pits was laid on the surface near the mouth, and showed apparently a substratum of sandstone, the workmen employed to sink the pits having by directions from the company ceased to dig when they reached the hard stone, except that out of the bottom of one of the deep pits some Dunn stone was taken, but which had crumbled away when exposed to the air. " The bill then goes on to charge, in substance, that the company, with knowl- edge that the cuttings would have to be made through the harder sorts of stone, caused notice to be given by advertisement, that they were ready to receive tenders according to certain printed forms circulated for the purpose, and the nature of the works to be done was to be ascertained from a specification deposited in their office at Bristol. The specification described the works for which the tender was to be made. The printed form of tender contained an undertaking by the party tendering, not only that he would do the contract works at a speci- fied sum, but also that he would do any extra works, and make any alterations in or additions to the original works which might be deemed expedient in the course of their progress, on being paid for the same according to certain rates set out in a schedule of prices annexed to the tender. The different heads under which charges were to be made by the contractor, in respect of such extra or altered works were all printed as part of the form of tender, and the party tendering was to write against each such head the price at which he would agree to be bound to do the same works of the nature there referred to. Amongst the works so to be done was the excavating clay, shell, and sandstone, but there was no mention in the schedule of any other stone. Neither Dunn stone nor Pennant are referred to by name ; and the suggestion of the bill is, that the omission of any mention of Dunn or Pennant stone was a contrivance, or part of a contrivance, for the purpose of leading the persons tendering, to suppose that they might make their calculations on the footing of there being no hard stone to be cut through, — a supposition which would be confirmed by the trial pits, out of which no hard stone had been dug, except the small portion of Dunn stone from one of the pits, which, as I have already stated, crumbled away when exposed to the air. " The appellant was resident in London, and in order to enable him to make ^iis tender, he sent down to Bristol an agent, Thomas Lloyd, whom he represents as a competent judge in such matters, to examine the line of the proposed works, * 218 § 118. EQUITABLE RELIEF FROM DECISION OF ENGINEERS. 429 upon this * subject. The general subject of fraud in railway- companies, in * regard to building contracts, is somewhat con- sidered in a late case in the Supreme Court of Vermont. 2 so as to enable him to form a correct judgment as to what would be a fair amount to be tendered. The bill states that Lloyd accordingly proceeded to Bristol in the month of March, 1836, surveyed the line and inspected the trial pits, and that, reasonably supposing the two principal pits to have been sunk to the level, and not finding amongst the excavated material accumulated on the surface any thing but soft or loose stone — no Pennant or Hanham stone — he concluded that there would be no cutting through hard stone ; and the sum tendered was calcu- lated on that basis. It was, according to the bill, impossible for Lloyd to get down to or near the bottom of the two principal trial pits, in consequence of their being nearly filled up with rubbish and water before he examined them. The appellant, therefore, contends that he was imposed upon as to the nature of the work he had to perform, and so agreed to do it on terms to which, but for the de- ception practised upon him, he would not have consented. The question on this part of the case is one of fact. Is it established that any imposition was practised on the appellant to induce him to enter into the contract ? For if there was, he was clearly entitled to relief, — whether precisely that which he asks for is another question. Strictly speaking, a corporation cannot of itself be guilty of fraud ; but where a corporation is formed for the purpose of carrying on a trading or other speculation for profit, such as forming a railway, these objects can only be accom- plished through the agency of individuals ; and there can be no doubt that if the agents employed conduct themselves fraudulently, so that, if they had been acting for private employers, the persons for whom they were acting would have been affected by their fraud, the same principles must prevail where the principal under whom the agent acts is a corporation. The question, therefore, on this part of the case is, whether the directors, or the engineers, or agents, whom they employed, were guilty of the fraudulent misrepresentations alleged by the bill. I am clearly of opinion that no such case is made out. [His lordship here stated the nature of the evidence on this point, and continued] : — " Two engineers, Mr. Frere and Mr. Babbage, both say that the appellant had ample opportunity, by means of the trial pits and cuttings, of ascertaining the nature of the soil and strata ; and the circumstances of the case satisfy me that this must be true. The work to be done was of a laborious, difficult, and expen- sive character. The notices calling for tenders had been circulated for many weeks, and even months, and would naturally excite the attention of contractors of eminence, who would be drawn to the spot. I cannot attribute to the company the fraudulent intention imputed to them — an intention as absurd as it would have been fraudulent — of meaning to mislead those who should apply to make tenders for the work, when they must have felt that the success of such a fraud must entirely depend on the very improbable chance, that those who should be attracted by the notices would omit to make inquiry into the nature of the soil * Herrick v. The Vermont Central Railw., 27 Vt. K. 673. * 219, 220 430 CONSTRUCTION OF RAILWAYS. § 118. * 3. But it is clear that where no binding and complete con- tract has bfecn entered into by the company, although the ten- they would have to excavate. The work was not one of a trifling nature ; one of the persons who made a tender demanded above £100,000. The tenders were, in the first instance, to be made before the 1st March, 1836 ; and until nearly a fortnight after that date the two principal trial pits had been open, and free from water, so that there was nothing to prevent any contractor from himself ascer- taining to what depth it had been cut, and what was the soil at the bottom ; and though by the 12th March a great deal of water had entered, and so partially choked the two principal pits, yet Mr. Frere says the company and their engi- neers were always ready to facilitate the appellant's investigation as to the nature of the soil and strata. " The appellant, in his bill, assumes that sandstone and Pennant stone are two different kinds of stone, but this is not the conclusion at which, on the evidence, I arrive. ' Pennant stone,' says Mr. Brunei, ' is a species of sandstone, and the only species in the neighborhood of Bristol of suffi ient hardness to be used for bridges, or other strong masonry.' And Mr. Frere says that it is extensively used in Bristol, and is the hardest sort of sandstone found in that neighborhood, except the Brandon Hill stone. Dunn stone, according to the same witness, is merely a local term for a particular variety of shale, and is frequently found in cuttings along with sandstone. This explanation fully justifies the language of the tenders, without supposing that the materials to be excavated and removed were there mentioned by the company for any purpose of deception. The soil to be removed was sufficiently designated as consisting of clay, shale, and sand- stone, the latter term comprehending all sandstone, hard as well as soft ; that is, Pennant or Hanham stone (which is in truth only Pennant stone found at Han- ham), as well as ordinary sandstone. In the contract 2 B, the expression occurs, ' compact gray sandstone, commonly called Hanham stone.' It was for the appel- lant, before he made a tender, to satisfy himself as to the probable hardness of the sandstone to be removed, which, after all, could never be ascertained beforehand with perfect certainty. By examining the trial pits and cuttings, and making in- quiries of the engineers, he might have ascertained the depth to which the pits had been sunk, and the nature of the soil through which they had penetrated, and at which they had arrived. The cuttings, according to the evidence of Mr. Frere, exhibited sandstone, Pennant, and Dunn stone ; and the old quarry in Fox's Wood showed Pennant. " In these circumstances, I think it is impossible to believe that there was any- thinw like contrivance to mislead the appellant or any other contractor; and it is clear that the appellant, if there was no fraud, was bound to satisfy himself on the subject ; for the specification of the proposed works, submitted to him before the tender was made, expressly stipulates that the contractor must satisfy himself of the nature of the soil, and of all matters which can in any way influence his con- tract. This, though of course it would not absolve the company from the conse- quences of any fraudulent contrivances to mislead, yet certainly, in the absence of fraud, threw on the appellant the obligation of judging for himself. I must *221 § 118. FRAUDS IN CONTRACTS FOR CONSTRUCTION. 431 ders made by a contractor have been accepted by their engineer, authorized to act on their behalf, and the contractor has incurred expense upon the faith of having the contract, in preparation to fulfil it, there being certain alternatives in the tender, which had not been decided upon, and the whole thing being given up and no specific contract made under the seal of the company, that equity can grant no relief. 3 For if there was no contract equity could not create one, and if there was a valid contract the rem- edy at law is adequate. further add, that I cannot believe the appellant to have been really mistaken as to the nature of the soil, except, possibly, that the proportion of hard stone was greater than he had imagined he should find. I come to this conclusion from the fact, that the specification, which was submitted to him before he made the tender, provides for the construction of the Avon bridge, and other masonry, bv means of the stone to be obtained from the cuttings. Now, Mr. Brunei says that Pen- nant is the only sandstone in the neighborhood of Bristol of sufficient hardness to be used for masonry. The appellant either did know or might have known this when he made his tender, and it is surely impossible for him, in the face of such a clause in the specification, to say that he did not know there would be any beds of Pennant stone — that is, of stone capable of being used for masonry — to be excavated or removed. It is not unworthy of observation, that Mr. Stanton, one of the persons who made a tender, in his schedule of prices as to the sum which he would require for working sandstone, obviously points to the difference which might exist in the expense of removing sandstone of different qualities ; and he did not, like the appellant and the other persons who made tenders, offer one fixed uniform sum for sandstone of every quality, but he required for moving &c. sandstone from open cuttings, Is. Ad. to 2s. 2d., and from tunnels, 2s. dd. to 4s. 6d. ; from Avhich, I think, it may be fairly inferred that he understood the words ' sandstone ' used in the schedule to include stone of different degrees of hard- ness; some more expensive to work, some less so. To all these considerations must be added, that the appellant did not, so far as there is any evidence on the subject, make any remonstrance as to the supposed deception or mistake during the progress of the works, nor until after the relation between the parties had been entirely determined." 8 Jackson v. The North Wales Railw., 6 Railw. C. 112. 432 CONSTRUCTION OF RAILWAYS. §119. SECTION XV. Engineer'' s Estimate wanting throvgh Fault of Company, 1 . In such case contractor may maintain bill in equity. 2. Grounds of equitable interference. 3. After company terminate contract, con- tractor will be enjoined from interference. And same rule sometimes extends to com- pany. 4. Stipulation requiring engineer's estimate, not void. 5. Not the same as an agreement, that all dis- putes shall be decided by arbitration. 6. Engineer's estimate proper condition piece- dent. 7. Same as sale of goods, at the valuation of third party. 8. The result of all the English cases seems to be, that only the question of damages properly referable to the engineer. 9. The rule in this respect different, in this country. § 119. 1. Where, by the terms of a railway construction con- tract, executed under the seals of the parties, the work is to be paid for, from time to time, upon the estimate and approval of the company's principal engineer, and the amount and quality of the work finally to be determined, in the same mode, no ac- tion, either at law or in equity,' can be maintained until such estimate and approval is obtained, unless it is prevented by the fault of the company. But where no such engineer is furnished by the company, or where through their connivance he neglects to act, the * contractor is not without remedy, in equity. 1 Lord Chancellor Cottenham, in affirming this decision, 2 says: — 2. " It is true that the specification and contract constitute a relationship between the plaintiffs and the defendants, which, if correctly acted upon, would have given to the plaintiffs a legal right, and a legal right only, to the benefits they claimed by this bill. But if the facts stated m the bill are such as, if true, de- prive the plaintiffs of the means of enforcing, such legal rights, and if those facts have arisen from the conduct of the defend- ants, or of their agent so recognized by the specification and contract, and now used for the fraudulent purpose of defeating 1 Mcintosh v. The Great Western Railw., 2 De G. & S. 758. This is the decision of the Vice-Chancellor, which came before the Lord Chancellor, as mentioned in note 2. 1 Mcintosh v. The Great Western Railw., 2 Hall & T. t 250 ; s. c. 2 Mac. & G. 74. *222 §119. ENGINEER'S ESTIMATES. 433 the plaintiff's claim altogether, the defendants cannot resist the plaintiff's claim in equity upon the ground that their remedy is only at law ; nor is it any answer to show that, if the plaintiffs cannot get at law what they contracted for, they may obtain compensation in damages. It is no answer to a bill for specific performance that the plaintiff may bring an action for damages for a breach of the contract, or in a proper case of a bill for dis- covery of some specific chattels that damages may be recovered in trover, — the language of pleading is not that the plaintiff has no remedy, but no adequate remedy save in a court of equity. It is therefore no answer in the present case for the defendants to urge, that if they or their agent have been neglectful of what they undertook to do, by which the plaintiffs have suffered, they may be liable in damage to the plaintiffs. They contracted for a specific thing, and are not bound to take that, or something in lieu of it, if such other thing be not what this court considers as a fair equivalent. I do not therefore consider that any answer is given to the plaintiffs' right to file a bill in this court by show- ing that the ground upon which they seek their right so to do, namely, the being barred of their legal remedy by the conduct of the defendants, may subject them to damages at law." 3. And where disputes arose between the contractor and the company, each charging default upon the other's part, and claim- ing the right to occupy the works, and the workmen of both coming in collision, upon the line of the road, and the comple- tion and opening of the road being delayed in consequence, the court, on the application of the company, restrained the con- tractor from * continuing on the line or interfering with the operations of the company, but directed an account of what was due the contractor, without regard to the former certificates of the company's engineer, and an issue to try whether the com- pany were justified in removing the contractor, reserving all claims for loss and compensation till the final hearing. 3 And in a very recent case, 4 by the terms of the contract it was provided, that if the contractor made default the company might themselves complete the line, and that the plant, &c. upon the 8 East Lancashire Railw. v. Hattersley, 8 Hare, 72. 4 Ganett v. Salisbury & Dorset Junction Railw., 12 Jur., N. S. 495. VOL. I. 28 *223 434 CONSTRUCTION OF RAILWAYS. § 119. line belonging to the contractor should become the property of the company, and be set off against the debts, if any, due from him to the company, and that the contractor should not hinder the company from using the same. Default having been made by the contractor, the company completed the line and were pro- ceeding to remove the plant, &c. An arbitration was pending to decide the question of amount between the contractor and the company. It was held that the company must be enjoined from removing the plant before award given. Lord Romilly, M. R., here suggests that the company have no right to take the plant until it appears that the contractor is in- debted to them ; but we should have said that under such a con- tract the fair construction is that the company may take and use the plant in completing the line, making themselves debtor to the contractor for the same. The purpose of such a stipulation presumptively is, that the work may not be interrupted by the change of hands from the contractor to the company. But after the road is completed, so far as the contract extended, and the company had made no use of the plant, the view suggested by his lordship seems entirely just and reasonable. 4. The question of the right to recover at all at law, without procuring the engineer's estimate, where that is made a condi- tion precedent in the contract, has been of late considerably dis- cussed in the English courts, and especially in the important case before the House of Lords, in July, 1856 ; 5 and the result arrived at seems to be, that such a clause in a contract, in regard to the basis of recovery, is not equivalent to a stipulation that no action shall be brought, or that the case shall not come before the courts of law or equity, which has long since been deter- mined to be repugnant and void. 6 5. The distinction is somewhat refined, and difficult of exact definition, but it seems to us not altogether without foundation. A stipulation, that no action shall ever be brought upon a con- tract, or, what is equivalent, that all disputes under it shall be referred to arbitration, is a repugnancy, which if carried out lit- erally must render the contract itself, as a mode of legal redress, s Scott v. Avery, 36 Eng. L. & Eq. 1. * Thompson v. Charnock, 8 Term, 139. See also Tattersall v. Groote, 2 B. & P. 131. § 119. ENGINEER'S ESTIMATES. 435 wholly idle. And it is only in this view that contracts are to be considered by the courts. 6. But a stipulation that the liability under a contract or covenant shall not accrue, except upon the basis of certain pre- viously ascertained facts, where the contract contains provisions for ascertaining them, by the action of either party, without the concurrence of the other, is no more than a limitation upon the right of action, as that no action shall be brought until after one year, or unless commenced within six months, 7 which have been held valid. And even where the concurrence of both parties is requisite and the performance of the condition fails through the refusal of one, it probably is the same as to the other as if per- formed. 7. Hence a contract to purchase goods at the valuation of N. and M., cannot be made the foundation of an action, without obtaining the valuation stipulated, or showing that the other party hindered it. 8 And in some cases it has been held, that if the obtaining of the estimate is withheld or defeated by the fraud of * the other party, that no action at law will lie, the only remedy being by a special action for the fraud, or in equity, per- haps. 9 8. This subject is very elaborately discussed by the judges, before the House of Lords, in the case of Scott v. Avery, 5 and it is remarkable how wide a difference of opinion was found to exist, upon a question which might seem at first blush so simple. Of the nine judges who gave formal opinions, three were op- 7 Wilson v. iEtna Ins. Co., 27 Vt. T&. 99, and cases there cited. 8 Thurnell v. Balbirnie, 2 M. & W. 786 ; Milnes v. Gery, 14 Vesey, 400. ' Milner v. Field, 5 Exch. 829. But in a later case in the same court it is said that the award must be obtained, or it must be shown that it is no longer practicable to obtain it. Brown v. Overbury, 34 Eng. L. & Eq. 610. This rule, with the qualification that the defendant by his own act or refusal had rendered the performance of the condition impracticable, is now, in this country certainly, held such an excuse as will enable the party to sue in a court of law. United States v. Robeson, 9 Peters, Sup. Ct. 319, 326. And in a very late case in Pennsylvania, Snodgrass v. Gavit, 28 Penn. St. 221, Mr. Justice Woodward assumes it as the unquestionable rule, in that state, that " where parties stipulate that disputes, whether actual or prospective, shall be submitted to the arbitra- ment of a particular individual, or tribunal, they are bound by their contract, and cannot seek redress elsewhere." ♦ 224 436 CONSTRUCTION OF RAILWAYS. § 119. posed to allowing any force whatever to such a stipulation. And of the other six, four held that only the question of dam- ages can properly be made to depend, as a condition precedent, upon the award of an arbitrator, while two held that the award may be made to include all matters of dispute growing out of the contract, which it seems to us must be regarded as equiva- lent to saying that no action at law or in equity shall be brought to determine any controversy growing out of the contract, which all the judges agree is a void stipulation. We therefore feel compelled to adopt the view that upon principle, and the fair balance of authority, such a stipulation, in regard to estimating labor or damages, under a contract for construction, is valid, and may be treated as a condition precedent, but that beyond that, the present inclination of the English courts is to hold that it is repugnant to sound policy, and subversive of the legal obli- gation of the contract, as being equivalent to a stipulation that no action at law shall be brought upon the contract, but only upon the award, if not paid. 9. But the balance of authority in this country seems to be in favor of allowing such a condition precedent, in this class of contracts, to extend to the quality of the work, as well as the quantity, and to the question, whether the work is progressing with sufficient rapidity, and whether the company, on that ac- count, are justified in putting an end to the contract. 9 It seems reasonable to us, on many grounds, that contracts of this mag- nitude and character should receive a somewhat different inter- pretation in this respect from that which is applied to the ordi- nary commercial transactions of the country, as has been held in regard to pecuniary penalties. 10 * We should not therefore feel justified in intimating any desire to see the American cases on this subject qualified. 10 Ante,§ 116, 117. *225 §120. CONTRACTS FOR MATERIALS AND MACHINERY. 437 SECTION XVI. Contracts for Materials and Machinery. 1. Manufacturer not liable for latent defect in materials. 2. Contract for railway sleepers, terms stated. 3. Construction of such contract. 4. Party may waive stipulation in contract, by acquiescence. 5. Company liable for materials, accepted and used. § 120. 1. In a contract for fire engines, it was stipulated that the engines and tender should be subject to the performance of one thousand miles, with proper loads, the manufacturers to be liable for any breakage which may occur through defect of ma- terials or workmanship, but not where it occurs from collision, neglect, or mismanagement of the company's servants, or any other cause, except the two first-named. The trial to take place within one month from the day on which any engine is reported ready to start, in default of which the manufacturers to be re- leased from all responsibility. It was specially agreed the fire- boxes should be of copper, 7-10ths of an inch thick. One of the engines, so supplied, performed the thousand miles according to the contract, but some months after the fire-box burst, when it was discovered that the copper was reduced to 3-16ths of an inch in thickness, it being conceded it was originally of the thickness required by the contract. In an action for the price of the engine, which by the contract was to be paid upon the satisfactory completion of the trial, it was held the defendants could not give evidence of such defect in the copper, no fraud being alleged, and that, by the terms of the contract, the three months' trial having been satisfactory, released the manufactu- rers from all responsibility in respect of bad materials and work- manship. 1 2. In a contract for railway sleepers, 2 it was stipulated that the plaintiff below should supply the defendant below with 350,000 sleepers, the contract before having recited that the de- 1 Sharp v. The Great Western Railw., 2 Railw. C 722 ; s. c. 9 M. &. W. 7. 4 The Great Northern Railw. v. Harrison, 14 Eng. L. & Eq. 189, in the Ex- chequer Chamber, from the C. P. ; s. c. 8 Eng. L. &. Eq. 469. 438 CONSTRUCTION OF RAILWAYS. § 120. fendants were desirous of being supplied with that number of railway * sleepers. The contract specified that the plaintiffs were willing to supply them according to a specification and tender, which stated that the number of sleepers required was 350,000, that one half would have to be delivered in 1847, and the remainder by midsummer, 1848 ; and the contract also con- tained a covenant to supply the sleepers within the time speci- fied, " as, and when, and in such quantities, and in such man- ner," as the engineer of the company by orders in writing, " from time to time or at any time, within the time limited by the specification, should require." The deed also contained a provision, that the engineer might vary the time of delivery, that the company should retain in their hands <£ 2,000 as security for the performance of the contract, and should pay it over within two months after the sleepers had been delivered, and that the contract might be determined upon the default or bank- ruptcy of the plaintiffs. 3. It was held that there was an implied covenant on the part of the company to take the whole number of 350,000 sleepers. That an order by the engineer was a condition precedent to any delivery of the sleepers by the plaintiffs ; That the company were bound to cause such order to be given within the time limited by the specification ; That although the engineer had power to alter the time for the delivery of the sleepers, such power was to be exercised within the period limited by the specification ; That the engineer, as to matters in which he had a discretion, e. g. as to varying the time of delivery of the sleep- ers, stood in the position of arbitrator between 'the parties, but as to giving the order for the delivery he was a mere agent of the company ; The only legitimate rule of construction is to as- certain the meaning from the language used in the instrument, coupled with such facts as are admissible in evidence, to aid its explanation. — Per Parke, B. 4. It has been held, also, in a contract with a railway com- pany to deliver iron, " near the months of July and August," and the delivery continuing till the 25th of October, and the company not objecting to receive it, that they were bound by the *226 § 121. PAYMENTS IN STOCK OF THE COMPANY. 439 terms of the contract, one of which was that they were to give their note for each parcel of iron as it was shipped. 3 *5. So, too, under the English statute, 4 which provides that the directors of a railway company may contract by parol, on behalf of the company, where private persons may make a valid parol contract, it was held, where the agent of the company agreed by parol with the plaintiff to purchase of him a quantity of railway sleepers upon certain terms, the sleepers being de- livered and used by the company, that they were liable. 5 SECTION XVII. Contracts to Pay in the Stock of the Company. 1. Breach of such contract generally entitles \ 3. Cash portion overpaid, will only reduce the party to recover the nominal value of stock portion dollar for dollar. stock. n. 2. Lawful incumbrance on company' s prop- 2. But if the party have not strictly performed erty, will not excuse contractor from ae- on his part, can only recover market value. I cepting stock. § 121. 1. In many contracts for construction, the whole or a portion of the price is stipulated to be paid in the stock of the company, as the work progresses, at certain stages, or when it is completed. The time, place, and mode of payment in such cases, will be the same ordinarily as in other contracts for pay- ment of stock. If the company refuse or neglect to deliver the stock or the proper certificates when it becomes due, upon proper request or opportunity, they are generally liable, it is considered, as in other cases of failure to perform contracts, for a certain amount or value, in collateral articles expressed in currency. 1 3 Bailey v. the Western Vermont Railw., 18 Barb. 112. It was also held, here, that the refusal of the company to give their notes, as stipulated, excused the plaintiff from delivering or tendering the remainder of the iron, until the com- pany should tender their notes, and entitled plaintiff to sue presently. 4 8 and 9 Vict. c. 16. 5 Paulding v. London & North W. Railw., 22 Eng. L. & Eq. 560. The con- tract was made by the engineer's clerk, who was also clerk of the company, but there was evidence of the assent of the committee. Lowe v. London & North W. Railw., 14 Eng. L. & Eq. 18. 1 Moore v. Hudson River Railw., 12 Barb. 156. It was held, in this case, that where a portion of the price of construction was payable in stock, at par, *227 440 CONSTRUCTION OF RAILWAYS. § 121. 2. But it was held, that where the plaintiff recovered a bal- ance due on equitable grounds, and not on the ground of strict and full performance of the contract, he was precluded on like equitable * grounds from recovering more for the stock portion of the contract than its market value at the commencement of the action. 2 within thirty days after the completion of the contract, the company were not bound to make any tender of the stock, as in case of contracts for specific articles. But that it was a payment in depreciated currency, and no tender necessary. In a recent English case, Re Alexandra Park Co., 12 Jur. N. S. 482, where the contractor stipulated to accept a portion of his pay in stock, at the election of the company, it was held he was not bound by such an election after the company was ordered to be wound up as insolvent, as the shares thereby become extinguished. 2 Barker v. T. & R. Railw., 27 Vt. R. 766. In this case the court say : "If the defendants have, upon reasonable request, declined paying the amount due, in their stock, as stipulated, it would seem but reasonable they should pay the amount in money. " 1. This is the general rule in regard to contracts payable in collateral arti- cles, estimated in currency, and not delivered. " 2. The stock of a corporation is but a certificate of such a sum being due the bearer. And when the party stipulated to pay in his own paper, if he re- fuse, suit may be brought immediately, although the paper was to have been on time, if given. But it was never supposed the party could reduce the recov- ery, by showing his paper depreciated in the market. This would be virtually giving the difference to the other stockholders. This would be the rule which should be applied if defendants are wilfully in fault. If it were the stock of another company, no doubt, all which could be recovered is the value of the stock in the market. Certainly, this is the general rule in regard to stock. And, perhaps, that rule should be applied to the stock of the defendants, if it appears they have not wilfully and unreasonably refused to deliver the stock. Ante, § 38. " But the recovery here is not allowed upon strictly legal grounds, upon the strict and literal performance of the contract on the part of the plaintiffs. It is rather upon equitable grounds that any recovery and apportionment of the contract is allowed for anything less than full performance. By the terms of the contract the defendants had a right to retain the tenth part reserved until full performance. And, although it has not been regarded as a strict condition precedent in some of the cases (Danville Bridge Co. v. Pomeroy, 15 Penn. St. 151), still it is a stipulation in the contract, for the full performance of which the defendants had the right to insist, and for doing which they are not to be themselves regarded as in fault. The defendants, too, were justified in refusing to pay any deficiency in the work at the time of the demand ; so that while we excuse the plaintiffs from full performance of their contract, as a strict condi- *228 § 121. PAYMENTS IN STOCK OF THE COMPANY. 441 *3. So, too, where the work is to be paid partly in stock and partly in money, if the money part be overpaid, even by doing a tion precedent, and allow them to recover to the extent of what they had done, on the equitable ground that they had in good faith attempted to fulfil their undertaking, and supposed they had done so, and only failed by mistake and misapprehension, which should not, under the contract, defeat the recovery in toto, but only subject it to an equitable deduction for all damage sustained by defendants, it seems to us that it should form a part of this equity to the defend- ants, not to be required to pay more for this stock, even if it were their own, than it was in fact worth, or could have been made to benefit the plaintiffs. " As we now hold, the plaintiffs were, at the time of the demand, entitled to recover, upon equitable grounds, a sum less than the whole price. But they demanded the whole price, and the defendants refused. The demand itself was unreasonable. Is it certain a reasonable one would have met a similar fate ? It has been held the demand must be reasonable, to render the refusal unreasonable. Jameson v. Ware, 6 Vt. R. 610. As, therefore, the refusal of defendants seems to have been not altogether without good excuse, and in allowing an equitable recovery, in a case like the present, one of the first re- quirements seems to be, that no injustice shall be thereby visited upon defend- ants, it would almost necessarily follow that we should not suffer the plaintiffs to recover more for the work really done by them than they could possibly have realized if they had been paid at the time, according to the contract. And, as we set up a basis of recovery upon equitable grounds, and one not contemplated in the contract, we should not visit the defendants with a judgment which will make them worse off than if they had been allowed to pay the sum found to be due upon this equitable basis, after it is declared, according to the stipulations of the original contract. If this view is sound and equitable, and we see no reason to doubt it, the plaintiffs, as to the stock portion of their judgment, are entitled to the highest price the stock bore after the suit was commenced, and before the final judgment, or, if they choose, the court will strike out that por- tion of the amount reported, and require the certificates of stock still to be de- livered ; and if defendants refuse, on reasonable request, enter up judgment for the full amount." But if the contractor perform extra work he is entitled to recover for that, in money, upon an implied promise, notwithstanding by his contract he was to accept part of his pay in stock for all work done under the contract. Childs v. Som. & Ken. Railw., Cir. Ct. U. S. Maine District, May 1, 1857. 20 Law Rep. 561. In the case of Cleveland & Pittsburgh Railw. v. Kelley, 5 Ohio St. 180, it is held, that where one fourth of the amount due the contractors is to be taken in the stock of the company, and the company refuse to deliver the stock on request, they "are only liable for the market value of the stock at the time it should have been delivered. The court profess to base their opinion upon the ground that in contracts of this character there is not under- stood to be any election reserved by the company to pay either in their stock, or in money, but that it is an absolute undertaking to deliver so much stock as shall, at its par value, be equal to one fourth the amount due the contractor. *229 442 CONSTRUCTION OF RAILWAYS. § 121. portion of the work, which the party reserved the right to do in order to hasten the work, it will only reduce the stock payment It docs not readily occur to us how this relieves the question from the apparent violation of principle, in allowing the company to refuse to give certificates of their own stock which they have contracted to do, and at the same time pay less than its par value. It is, in ordinary cases, equitable, no doubt, and always where the refusal is upon the ground that nothing is due the contractor. Ante, § 121, n. 2. [• The point of the decision is thus summed up by Mr. Justice Swan. " For these reasons we are of the opinion that no such election was contemplated by either of the parties when the contract was entered into ; that the law relating to trade notes and contracts of a like kind, has no application to the agreement between these parties ; that it was an exchange of work for stock, in which monetary terms were necessarily used, not for the purpose of expressing real values, but as the only mode of expressing quantities and proportions ; that the fourth to be taken in stock was not a money indebtedness, but a stock indebtedness ; and, consequently, that the company could derive no benefit from the increased value of the stock, and could suffer no loss by its depreciation ; the damages which the contractors suffered from the non-delivery of the stock being its mar- ket value." See also Boody v. Rut. & Bur. Railw. (Cir. Ct. U. S.), 24 Vt. R. 660. In this case it was held, that the defendants having given their creditors a mortgage upon their road, after the contract with the plaintiff, did not excuse him from accept- ing the stipulated proportion of the payments in stock. Nor can the contractors, in such case, refuse to receive the stock, because the legislature, in the mean time, altered the charter of the company, by which the capital stock and debt of the company were increased ; nor because the com- pany voted not to pay interest on the stock, in money, as they had before done, it not appearing that the value of the stock had been affected by either. Moore v. Hudson River Railw., 12 Barb. 156. And where the company, in settlement with a contractor, agreed to pay him a certain amount, in stock, or the bonds of the company, at his election, the company retaining the same as security for certain liabilities on account of the contractor, and gave the contractor a certificate of such stock, with an agree- ment indorsed, to exchange it for bonds, at his election, and the certificates were then returned to them, as their indemnity ; it was held, that the company were bound to deliver the bonds, notwithstanding the treasurer had entered the shares in the books of the company as the property of the contractor, and they had in consequence been sold upon execution against him. Jones v. Portsmouth & Concord Railw., 32 N. H. R. 544. A contractor who agrees to take a portion of his pay in the bonds of the com- pany, has no such interest in any question, in regard to their validity, as will prevent a court of equity from enjoining those of a county, which had been delivered to the company without a proper compliance with the conditions of the statute, under which the subscription was made, the contractor having had §122. TIME AND MODE OF PAYMENT. 443 dollar for dollar, and not according to the market value of the stock at the time. 3 ♦SECTION XVIII. Time and Mode of Payment. 1. No time specified, payment due only when work completed. 2. Stock payments 7iiusl ordinarily be de- manded. 3. But if company pay monthly, such usage qualifies contract. 4. Contract to build wall by cubic yard, im- plies measurement in the wall. § 122. 1. Where no time of payment is specified in terms in the written contract between the parties for the construction of a portion of a railway, it was held, that looking to the contract alone the contractor could not call for payment, either of the cash or stock portion of the contract, until a complete perform- ance of the contract on his part. 1 Or, upon the most favorable construction, until some distinct portion of the work, for which the contract fixed a specific price, was accomplished. 1 2. In regard to the stock portion of the payments, a special demand was necessary before the contractor can maintain an action for it. 1 3. But where it appeared that the company were accustomed to make monthly payments to their contractors, upon the esti- mates of the engineer, at the end of each month, and that they had so dealt with the plaintiff, it was held that this must be con- sidered the rule of payment under the contract, established by mutual consent and binding upon the parties. 1 4. A contract to build "riprap" wall for fifty cents a cubic yard, in the absence of proof of any general usage or uniform custom which could control the mode of measurement, was held to imply payment by the cubic yard after the wall was con- structed. 2 knowledge of the facts from the first. Mercer County v. Pittsburgh & Erie Railw., 27 Penn. St. 389. 3 Jones & Dow v. Chamberlain, 30 Vt. R. 196. 1 Boody v. Rut. & Bur. Railw., 24 Vt. R. 660 (U. S. Cir. Ct.). 1 Wood v. Vermont Central Railw., 24 Vt. R. 608. *230 444 CONSTRUCTION OF RAILWAYS. §123, 123 a. ♦SECTION XIX. Remedy on Contracts for Railway Construction. 1. Recovery on general counts. | 2. Amount and proof governed by contract. § 123. 1. It is a familiar principle of law, applicable to con- tracts for the performance of work and labor, that if the work is done so that nothing more remains but payment, there is no necessity of declaring specially upon the contract, but the recov- ery may be had under the general counts ; and it will make no difference in this respect that it was not done within the time prescribed by the contract, if the work has been accepted by the other party, or the time for performance extended by such party, or the work has been done upon some permanent property of the other party, as in the case of building a railway. 1 2. But ordinarily the contract will govern as to price and other incidents, so far as it can be traced. But where the party for whom the labor is performed wilfully hinders and obstructs the progress of the work, it has been held he was liable, as upon a quantum meruit. 1 But in such case the party must prove the performance of the labor, by such proof as would be competent in an action on the special contract, and cannot treat the deal- ing as if it had been matter of account from the first. 1 SECTION XX. 3Iechanic , s Lien. 1. Such lien cannot exist in regard to a rail- I 2. Opinion of Scott, J. way. § 123 a. 1. It has been considered that although a public rail- way may come within the literal import of the terms used in a statute, to secure material-men and laborers, by what is denom- inated a mechanic's lien upon " buildings or other improve- 1 Merrill v. Ithaca & Owego Railw., 16 Wendell, 586 ; s. c. 2 Am. Railw. C. 421. *231 § 123 b. REMEDIES OF LABORERS AND SUB-CONTRACTORS. 445 ments," yet that the public have such an interest in puhlic works of this character, that it cannot reasonably be presumed that such terms were intended to include the bridges and cul- verts upon the line of a public railway. 1 2. The language of Scott, J., shows the ground of the deci- sion. " Although railway companies in some respects resemble private corporations, yet, as they are organized for the public benefit, the state takes a deep interest in them and regards them as matters of public concern. The establishment of this railway is regarded as a public work, established by public authority, intended for the public use and benefit." The learned judge argues, that such a lien to be effectual must be liable to defeat the object of the work, and therefore, and as the legislature have provided a specific remedy for laborers, it is not to be supposed that a mechanic's lien also exists in regard to the structures on the works. SECTION XXI. Remedies on behalf of Laborers and Sub-contractors. 1. Sub-contractors not bound by stipulations of contractor. 2. Laborers on public works have a claim against the company. 3. But a sub-contractor cannot go against the proprietor of the works, although laborer employed by him may. § 123 6. 1. A sub-contractor who has completed his work to the acceptance of the engineers appointed to pass upon its suffi- ciency, is entitled to recover of the contractor the sum retained upon his estimates, as security for the completion of the work, notwithstanding any deficiency in the performance of the con- tractor, whereby he is himself unable to recover such deficiency of the company. 1 2. By statute in many of the states, the workmen upon a rail- way, although in the employment of the contractor, have a claim for any arrears of wages, not exceeding a certain period, upon the company, and this provision has been held to extend equally 1 Dunn v. North Missouri Railw., 24 Mo. R. 493. 1 Blair v. Corby, 29 Mo. R. 480, 486. 446 CONSTRUCTION OF RAILWAYS. §1236. to workmen employed by sub-contractors. 2 And the provisions of this statute being only a matter of general police, will be equally binding upon all railway companies, whether chartered before or after the passing of the statute. 2 3. But the sub-contractor himself cannot pass by his imme- diate employees and maintain an action against the principal proprietor of the work. 3 5 Grannahan v. Hannibal & St. Joseph Railw. Co., 30 Mo. R. 546. See also McClusky v. Cromwell, 1. Kern. 593; Kent v. N. Y. Cent. Railw., 2 Id. 628; Peters v. St. Louis & Iron M. Railw. Co., 23 Mo. R. 107. 3 Branin v. Conn. & Pass. Railw. Co., 31 Vermont R. 214 ; Lake Erie, &c. Railw. Co. v. Eckler, 13 Ind. R. 67. See Boswell v. Townsend, 37 Barb. 205. §124. EXCESSIVE TOLLS, FARE, AND FREIGHT. 447 CHAPTER XVI EXCESSIVE TOLLS, FARE, AND FREIGHT. 1. English companies created sometimes, for maintaining road only. 2. Where excessive tolls taken may be re- covered back. 3. So also may excessive fare and freight. 4. By English statute, packed parcels must be rated hi mass. 5. Nature of railway traffic requires unity of management and control. 6. Tolls upon railways almost unknown here. Fare and freight often limited. 7. Guaranty of certain profit on investment lawful. 8. Restriction of freight to certain rate pet ton, extends to whole line. 9. Need net declare for tolls. 0. Mode of establishing and requisite proof 1. A provision in a railway cl tarter for the payment of a certain tonnage to the state is only a mode of taxation. Where a company is allowed to take tolls on sections of their road this makes each section a distinct work. 13, 14. Discussion of cases in New York in regard to the difference between fares taken in the cars and at the stations. 12 § 124. 1. By the English statutes, companies are created who own the railway, stations, &c, merely, and who are empowered to demand certain tolls of other persons, or companies, for the use of such road. 2. In such cases, if illegal tolls are demanded and paid, the excess may be recovered back, as money had and received, to the use of the person paying it, upon the general principles of law applicable to the subject of tolls, and the demand and receipt of excessive tolls. 1 Where the English statute 2 gave the company the right, where any person should fail to pay the toll due upon any carriage, to detain and sell the same, it was held incumbent upon the com- pany first to demand the sum due for toll, and that this was a condition precedent to the right to sell under the statute. 3 It was also considered here that a charge for transporting carriages back is not a toll, but something which may be compensated by special agreement between the parties ; and if it be demanded as 1 Fearnley v. Morley, 5 B. & C. 25. See also this subject very extensively examined in Centre Turnpike Co. v. Smith, 12 Vt. K. 212 ; post, § 143. Tolls are a payment for passing along the line of the railway, and should be received with reference to the number of carriages passing. Simpson v. Denison, 13 Eng. L. & Eq. 359. * 8 and 9 Vict. c. 20, § 97. 1 Field v. Newport, Ab. & Hereford Railw., 3 H. & N. 409. *355 448 EXCESSIVE TOLLS, FARE, AND FREIGHT. § 124. part of the toll, being an illegal claim, as such, it vitiates the entire demand and renders it illegal. 3. And the same rule has been extended to the recovery of money overpaid upon an exorbitant and illegal demand of freight or fare by railways. And the recovery may be had, although the person paying it did not tender any specific sum, as due, and although a portion of the overcharge was on account of what was claimed to be due another company. 4 *4. And under the English statutes, packed parcels of the same class are required to be rated in mass. 5 5. Most of the business upon public railways, in this country, and in England, at the present time, is almost of necessity trans- acted by the companies themselves. The very nature of the business seems to require absolute unity in the management and control of the traffic, and especially in this country, where a large proportion of the roads are operated upon a single track, requiring the utmost watchfulness and circumspection to avoid collisions. We suppose the idea of operating a railway, with large traffic, in England, upon a single track, would be regard- ed as too glaring an absurdity to be seriously entertained. But in this country it is rather the rule than the exception, and many of the continental railways in Europe have only a single track. 6. The matter of tolls upon railways is a thing almost un- known in this country, and very little practised anywhere at present. But the English special acts, and the American rail- way charters, very often fix the maximum of freight and fare which it shall be lawful for the company to receive, and if tolls are allowed to be taken of other companies or persons, these also are limited. 4 Parker v. The Bristol & Exeter Railw. Co., 6 Railw. C. 776. See also Snow- den v. Davis, 1 Taunt. 359; Atlee v. Backhouse, 3 M. & W. 633; and Spry v. Emperor, 6 M. & W. 639, where the general subject is discussed. In Parker v. The Great Western Railw. Co., 3 Railw. C. 563, the very point is decided. Crouch v. London & N. W. Railw. Co., 2 Car. & K. 789 ; Crouch v. Great Northern Railw., 25 Eng. L. & Eq. 449. 5 Parker v. The Great Western Railw. Co., 8 Eng. L. & Eq. 426. This sub- ject of overcharge and the right to recover back the excess, is extensively dis- cussed in this case, and in the case of Edwards, Assignee of Edwards, v. The Great Western Railw. Co., 8 Eng. L. & Eq. 447; Crouch v. Great Northern Railw. Co., 25 Eng. L. & Eq. 449. *356 § 124. EXCESSIVE TOLLS, FARE, AND FREIGHT. 449 7. A guaranty of a certain amount of profit to a company, by other companies, in consideration of the right to use the track of such company, is lawful. 6 8. The restriction in the charter of the Camden & Amboy Railway of freight to eight cents per ton per mile, extends to the whole distance of the line of said company, although some of it is by water, and includes the auxiliary roads through New Brunswick and Trenton. 7 9. In an action to recover tolls due to a railway it is not ne- cessary to describe the dues as tolls. Any description which sufficiently indentifies the nature of the service for which com- pensation is demanded, is all that is required. 8 10. Freights upon a railway may be established by the direc- tors, or by their agents ; and their assent will be presumed, if nothing appear to the contrary. 8 And where the directors are required to establish freights, and they do establish a printed tariff, that is to be regarded as the original ; and where copies of such tariff are required to be posted at the depots or stations of the company, that affords sufficient excuse for the absence of such copies to justify the admission of secondary evidence. 8 11. A provision in the charter of a railway company that it shall pay a certain tonnage to the state upon all freight trans- ported by it, is only a mode of taxation, and is not in conflict with any provision of the United States constitution securing to Congress the exclusive power of regulating commerce with foreign nations and among the states, and prohibiting the states, without the Consent of congress, from levying duties on imports and exports. The company by accepting the charter containing such a provision virtually made an express contract to perform 6 Great N. Railw. v. S. Yorkshire Railw., 25 Eng. L. & Eq. 482. 7 Camden & Amboy Railw. v. Briggs, 1 N. J. (Zab.) 406. Where one company leased its line to another, at a certain rate, for all min- erals transported, among other commodities, it was held, that the owners of minerals transported upon such line, could not, by injunction, compel the les- sees to transport minerals upon the same terms on which they agreed with the other company, by way of compensation to them, the latter being a rent merely, and not a rate of toll or freight. Finnie v. Glasgow & Southwestern Railw. Co., 30 Law Times, 26. Manchester & Lawrence Railw. v. Fisk, 33 New H. R. 297. VOL. I. 29 450 EXCESSIVE TOLLS, FARES, AND FREIGHT. § 124. it, and have no just cause of complaint, treating the provision either as a law or a contract. 9 12. And a provision in the charter of a railway company or other road company, that it may demand tolls upon any particu- lar portion of its road as soon as completed and in operation, has been construed to create such portion a distinct public work, not liable to be affected by failure to complete the remainder of the work embraced in the same charter. But if the work is not done in a proper manner, that will be a cause of forfeiture not cured by the provision allowing tolls to be levied upon distinct portions of the entire line. 10 But it is here left in doubt whether such defect in construction will operate to forfeit the entire road or only those sections where such defects occur. 13. We have discussed the question of railway companies making a discrimination between fares paid in the cars and at their stations. 11 Under the New York statute, which allows of this discrimination only where the company keep their ticket office open, it was held the company could only make that discrimina- tion in the cases specified in the statute, and not in other cases, even if the passenger took the cars after midnight, the company being required to keep the ticket office open only until 9 o'clock, P. M. 12 14. This question is still further discussed in a later case ; 13 but the questions turned chiefly upon the construction of the statute in force there, requiring the company to keep all their ticket offices open one hour before the trains start, except between 9, P. M., and 5, A. M., when they are only required to do so at Utica and other principal offices, and which also enacts, that if any person shall, at any station where a ticket office is kept open, enter the cars as a passenger, without having first purchased a ticket, it shall be lawful for the company to require five cents extra fare of such person ; and it was decided that the extra fare 9 Pennsylvania Railw. v. The Commonwealth, 3 Grants' Cas. 128. As to the right to tax shares in a corporation for county purposes, see Lycoming County v. Gamble, 47 Penn. St., 106. 10 The People v. J. & M. Plank-Road Co., 9 Mich. R. 285. 11 Ante, § 28. 12 Chase v. N. Y. Central R. Co., 26 N. Y. R. 523. 13 Nellis v. N. Y. Central R. Co., 30 N. Y. R. 505. § 124. EXCESSIVE TOLLS, FARES, AND FREIGHT. 451 could only be demanded where the company kept a ticket office open. And it will make no difference that the passenger entered the cars at an hour when the ticket offices were required to be kept open, if such was not the fact. It was also held, that the company, by so demanding and receiving the five cents extra fare when not entitled to receive it, became liable to the penalty of $50, under the statute, for taking more fare than allowed by law. 452 LIABILITY FOR FIRES BY ENGINES. §125. ♦CHAPTER XVII LIABILITY FOR FIRES, COMMUNICATED BY COMPANY'S ENGINES. 1. Fact of fires being communicated evidence of negligence. 2. This was at one time questioned in Eng- land. 3. Opinion of Tindal, Ch. J., upon this point. 4. English companies feel bound to use pre- cautions against fire. 5. Rule of evidence, in this country, more fa- vorable to companies. 6. But the company are liable for damage by fire through want of care on their part. 7. One is not precluded from recovery, by placing buildings in an exposed situa- tion. 8. Where insurers pay damages on insured 10 11 property, may have action against com- pany. 9. Where, company made liable for injury to all property, are allowed to insure. Construction of statutes making compa- nies liable for loss by fires. Extent of responsibility of insurer of goods carried. 12. Railways responsible for engines which do not consume smoke. 13. Construction of Massachusetts statute and mode of trial. 14. 15. For what acts railway companies may become responsible without any actual negligence. § 125. 1. In the English courts it seems to have been settled, as early as the year 1846, 1 upon great consideration, that the fact of premises being fired by sparks emitted from a passing engine, is primd facie evidence of negligence on the part of the com- pany, rendering it incumbent upon them to show that some pre- cautions had been adopted by them reasonably calculated to prevent such accidents. 2. In an earlier case, where the facts were reported, by the judge, at Nisi Prius, for the opinion of the full court, that a stack of beans near the track of the railway was fired and consumed by sparks from the company's engine, of the ordinary construc- tion, and used in the ordinary mode, the court said the facts reported did not show, necessarily, either negligence or no neg- ligence. That was a question for the jury. 2 3. But the court in the case of Piggott v. Eastern Co.'s Rail- way, went much further. Tindal, Ch. J., said : " The defendants are a company intrusted by the legislature with an agent of an extremely dangerous and unruly character, for their own private 1 Piggott v. Eastern Counties Railw. Co., 3 C. B. 229. a Aldridge v. Great Western Railw., 3 M. & G. 515 ; 2 Railw. C. 852. *357 § 125. LIABILITY FOR FIRES BY ENGINES. 453 and particular advantage ; and the law requires of them, that they shall, in the exercise of the rights and powers so conferred upon them, adopt such precautions as may reasonably prevent damage * to the property of third persons, through or near which their railway passes. The evidence in this case was abundantly sufficient to show, that the injury of which the plaintiff com- plains was caused by the emission of sparks or particles of ignited coke, coming from one of the defendants' engines ; and there was no proof of any precaution adopted by the company to avoid such a mischance. I therefore think the jury came to a right Conclusion, in finding that the company were guilty of negligence, and that the injury complained of was the result of such negligence. There are many old authorities to sustain this view ; for instance, the case of Mitchil v. Alestree, 1 Vent. 295, for an injury resulting to the plaintiff from the defendant's riding an unruly horse in Lincoln's Inn Fields ; that of Bayntine v. Sharp, 1 Lutw. 90, for permitting a mad bull to be at large ; and that of Smith v. Pelah, 2 Stra. 1264, for allowing a dog, known to be accustomed to bite, to go about unmuzzled. The precau- tions suggested by the witnesses called for the plaintiff in this case, may be compared to the muzzle in the case last referred to. The case of Beaulien v. Finglam, in the Year-Books, P. 2, H. 4, fol. 18, pi. 5, comes near to this. There, the defendant was charged, in case, for so negligently keeping his fire as to occasion the destruction of the plaintiff's property adjoining. The duty there alleged was, — ' quare, cum secundum leg-em et consuetudi- nem regni nostri Anglice hactenus obtentam, quod quilibet de eodem regno ignem suum salvo et secure custodiat, et custodire teneatur, ne per ignem suum damnum aliquod vicinis suis eveniat.' " 4. The principle of this case seems to have been acquiesced in by the railways in England, 3 and such precautions used, as 3 Hammon v. Southeastern Railw. Co., Maidstone Spring Assizes, 1845, before Lord Denma?i, Ch. J., for the destruction of farm buildings, including a thatched barn, by sparks emitted from the defendants' engines in passing along the line of their railway. There was evidence of the fire being so caused, and that defend- ants' engines had no wire guard, or perforated plate, to prevent the escape of the sparks, although both were in use before that time. There was evidence in this case that it was principally where the engines were overtasked that they *358 454 LIABILITY FOR FIRES BY ENGINES. § 125. to secure the engines against emitting sparks. In this last case it was held proper evidence to go to the jury that the company's * engines had before, in passing along the line, emitted sparks, a sufficient distance to have done the injury in the present case, as a means of ascertaining the possibility of the building being fired in the manner alleged. The testimony in this case showed, that the danger of emitting sparks is very much increased by , overtasking the engine, and that it may be altogether avoided by shutting off the steam in passing a place where there is danger from sparks, or that the danger may be guarded against by mechanical precautions. The subject has been a great deal discussed in more recent English cases. 4 In this case it was held by Bramwell B., at the jury trial, and his views seem to have been sustained by the court of exchequer, that the mere fact of the company using fire as a means of locomotion, from which occasional fires will be com- municated, even with the utmost care to prevent it, made them responsible for damage caused thereby. But in the exchequer chamber the judges seem to have been agreed, that the legisla- ture having legalized this mode of locomotion, it could not sub- ject the company, while pursuing a legal business, in a legal mode, to damage thereby caused to others, unless through some degree of neglect. If the company resort to all known precau- tions against fire they are not liable. 5. But in this country it must be confessed the rule of the liability of railways for damage done by fire communicated by their engines, is more favorable to the companies than in Eng- land. It seems to have been assumed, in this country, that the were liable to emit sparks. His Lordship directed the jury that it lay upon the plaintiff to establish negligence ; they were to consider that the plaintiff might have saved all hazard by tiling his barn, and also whether the train was driven too fast. The plaintiff had a verdict, and the court subsequently refused a new trial. Taylor v. Same Co. was tried at same term, with similar proof and the same result. Walford on Railways, 183, 184, and notes. 4 Vaughn v. Taff-Vale Railw., 3 H. & N. 743 ; s. c. in Exchequer Chamber, 6 Jur. N. S. 899. See also The King v. Pease, 4 B. & Ad. 30, upon which the last case is decided in Exchequer Chamber. In reference to the decision in the Court of Exchequer, we said in our last edition it was going further than any just principle would allow, unless the defendant's business is regarded as un- lawful. Post, pi. 14, 15, and note. *359 § 125. LIABILITY FOR FIRES BY ENGINES. 455 business of railways being lawful, no presumption of negligence arises from the fact of fire being communicated by their en- gines. 5 But after other probable modes of accounting for the fire have been disproved, the onus is on the company to prove that the fire was not communicated by their engines of the train passing at the time. 6 6. In this country it has been held, that proof that sparks have upon other occasions been emitted and caused fires along the line of the road, is not admissible, either to show that defend- ants' engine caused the damage, or to rebut defendants' proof of care and diligence in using their engines." But the testimony seems to have been received in other cases. 8 All the cases upon this subject hold railways bound to the exercise of care, skill, and diligence, to prevent fires being communicated in this mode, and make them liable in case of damage through their negli- gence. 9 7. And one is not precluded from recovery in such cases, by having placed his buildings or other property in an exposed posi- tion. 10 8. And where the railway companies are made liable for all * damage in this way, as they are in Massachusetts, and some of the other states, by statute, if one whose property is insured suf- fer loss in this way, and the insurers pay him his entire loss, 5 Rood v. N. Y. & Erie Railw., 18 Barb. SO ; Lyman v. Boston & W. Railw., 4 Cush. 288 ; Burroughs v. The Housatonic Railw., 15 Conn. R. 124. In this case the court compare the injury to that of fire communicated by sparks from the chimney of a dwelling-house. Where the statute recpuires the company to show that the fire occurred " without any negligence on their part," it was held sufficient to show that their engines were properly constructed, in good order, and had the usual apparatus for preventing the escape of sparks, and were managed by discreet persons. B. & S. R. v. Woodruff, 4 Maryland, 242. 6 Sheldon v. Hudson River R., 4 Kernan, 218. 7 Baltimore & Susquehannah Railw. v. Woodruff, 4 Maryland R. 242. 8 McCready v. The Railw. Co., 2 Strob. 358. Sheldon v. Hudson River Railw., 4 Kernan, 218 ; s. c. 29 Barb. 226. 9 15 Conn. R. 124 ; Huyett v. Phil. & R. Railw., 23 Penn. St. 373. The jury are to determine the question of negligence. Id. The company are bound to use more care in regard to fires in a very dry time, or where property is very much exposed. Id. 10 Coop v. Champ. Trans. Co., 1 Denio, 91, 99, 101. *360 456 LIABILITY FOR FIRES BY ENGINES. § 125. they may recover in his name against the company. 11 And it was decided in one case that the insurer might recover of the carriers in the name of the consignor, on whose behalf the policy was effected, after having paid the amount of the loss to the con- signor. 12 We cannot forbear to add that the interference of the legisla- tures upon this subject, in many of the American states, seems to us an indication of the public sense, in favor of placing the risk in such cases upon the party in whose power it lies most to prevent such injuries occurring. There seems to us both justice and policy in the English rule upon the subject. 9. By statute in some of the states, as we have seen, railways are made liable for any injury to " buildings or other property of any person — by fire communicated," by their locomotive en- gines, and it is sometimes specially provided that railways shall have an insurable interest in such property. But it has been held that such statutory liability only extends to property of a permanent nature, and upon which an insurance may be ef- fected ; and that for injuries of this kind to other property the company will only be responsible for negligence, unskilfulness, or imprudence in running and conducting their engines. 13 11 Hart v. The Western Railw., 13 Met. 99. And under such a statute, where the sparks from the engine communicated fire to a shop, and the wind drove the sparks from the shop sixty feet across the street, and set fire to a house, it was held that this second fire must be regarded as " communicated " by the com- pany's engine, within the statute. Id. In a contract of insurance in favor of a railway company, upon " cars of all descriptions " — " on the line of their road and in actual use," where, in answer to the inquiry " where the property was situated," the company reply, " from Boston to Fitchburg and branches this side of Fitchburg " ; and the cars of the plaintiff's company loaded with ice, standing upon a track belonging to the proprietors of a wharf where the ice was unloaded, but communicating with the track of the Fitchburg road, were burned by a fire communicated from the wharf, it was held to come within the contract, and the insurance company were held liable. Fitch- burg Railw. v. Charlestown Mutual Ins. Co., 7 Gray, 64. 12 Burnside v. Steamboat Company, 10 Rich. (S. C.) 113 ; Garrison v. Memphis Ins. Co., 19 How. (U. S.) 312. 13 Chapman v. Atlantic & St. Lawrence Railw., 37 Maine R. 92. This is an action for the loss of cedar posts, piled upon land adjoining the railway, by the consent of the owner of the land, and set on fire by a spark from the defendants' engine, and they were held not liable under the statute. § 125. LIABILITY FOR FIRES BY ENGINES. 457 10. And where by statute railway companies are made lia- ble for all damages caused to property so near the road as to be exposed by fire from their engines, it was held to ex- tend to all property subject to insurance, and to include grow- ing trees. 14 11. Many of the English railway companies make it a condi- tion that certain goods shall be insured and declared, or else they will not be responsible for any loss which may occur in re- gard to them. Such a condition seems reasonable, and it is so treated by the English courts. But to be any protection to the companies it must assume that the insurers are bound to make good any loss, as well for the benefit of the assured as for that of the company, and that the company are not responsible to the insurer unless perhaps for neglect of duty as a faithful bailee. 15 12. The English statute 16 subjects railway companies to a penalty for each day they use an engine upon their roads so constructed as not to consume its own smoke. But it has been held that this only refers to the construction of the engine when under proper management, and that the penalty is not in- curred by an engine emitting smoke instead of consuming it in consequence of bad management and not of defective construc- tion. 17 13. The Massachusetts statute, making railway companies re- sponsible for loss by fire communicated by their engines, and giving them an insurable interest in the property exposed to fire in that mode, was held to embrace personal property, although the company had no knowledge or reasonable cause to believe that such property was situated where it might be so injured. 18 And in the trial of an action for such injury, where it was claimed that no burning sparks could reach far enough to com- municate the fire, it is competent to show tlmt the same engine, 14 Pratt v. Atlantic & St. Lawrence Railw., 42 Maine R. 579. 15 Peck v. North Staffordshire Railw., Ellis B. & Ellis, 956. 19 8 & 9 Vic. ch. 20, § 114. 17 Manchester, Sheffield, & Lincolnshire Railw. v. Wood, 29 Law J. 29 ; s. c. 1 L. T. N. S. 31 ; s. c. 2 Bl. & El. 344. 18 Ross v. Boston & Worcester Railw., 6 Allen, 87. The company should use precautions to prevent fire escaping from their engines or they will be respon- sible for consequences, Bass v. Chicago, Bur. & Quincy Railw. Co., 28 111. R. 9. 458 LIABILITY FOR FIRES BY ENGINES. § 125. using similar fuel, emitted sparks reaching a greater distance. 18 And where it was attempted to show that similar engines did not on other roads emit sparks reaching that distance, it is com- petent to prove that such engines on other roads have emitted sparks which did communicate fire at that distance. 18 In such an action, where the question of plaintiff's want of due care depended upon the consideration of the dryness of the season, the strength and direction of the wind, and the condition of the plaintiff's buildings, it is proper to submit to the jury, under general in- structions, whether the plaintiff exercised due care or not, and if this is done no exception lies to a refusal to instruct the jury that " if the season was dry, and the wind was from the railway and strong, and the plaintiff knew those facts and left a door of a shed open towards the railway, and combustible materials within the shed, and that contributed to the fire, it is evidence of negligence on his part, which should preclude his recovery." 18 14. A question of considerable practical importance has re- cently been determined by the Court of Exchequer Chamber in England, which may be thought sometimes to have a bearing upon the conduct of railways. The proposition there maintained is, that if a person bring on his own land anything, which, if it escape, may prove injurious to his neighbor's property, such as a large body of water, he is liable to make compensation for any injury that may accrue from its escape out of his land ; and it is no excuse, if it do escape and cause damage to his neighbor, that the injury was caused without any default or negligence on his part. 19 19 Fletcher v. Bylands, 12 Jur. N. S. 603; s. c. 11 Id. 714. The learned judge, in giving the opinion, said : "It appears from the statement in the case that the plaintiff was damaged by his property being flooded by water, which, without any fault on his part, broke out of a reservoir constructed on the defend- ants' land by the defendants' orders, and maintained by the defendants. " It appears from the statement in the twelfth paragraph of the case, that the coal under the defendants' land had, at some remote period, been worked out, but that this was unknown at the time when the defendants gave directions to erect the reservoir ; the water in the reservoir would not have escaped from the defendants' land, and no mischief would have been done to the plaintiff but for this latent defect in the defendants' subsoil ; and it further appears, from the seventeenth and eighteenth paragraphs, that the defendants selected competent engineers and contractors to make their reservoir, and themselves personally con- § 125. LIABILITY FOR FIRES BY ENGINES. 459 15. The carefully considered judgment of the full court of Exchequer Chamber by Blackburn, J., contains so many points tinued in total ignorance of what we have called the latent defect in the subsoil, but that those persons employed by them, in the course of the work, became aware of the existence of ancient shafts filled up with soil, though they did not know or suspect that they were shafts communicating with old workings. It is found that the defendants personally were free from all blame, but that, in fact, proper care and skill was not used by the persons employed by them to provide for the sufficiency of the reservoir in reference to these shafts. The consequence was, that when the reservoir was filled, the water burst into the shafts and flowed down through them into the old workings, and thence into the plaintiff's mine, and there did the mischief. " The plaintiff, though free from all blame on his part, must bear the loss, unless he can establish that it was the consequence of some default for which the defend- ants are responsible. The question of law, therefore, arises, what is the obliga- tion which the law casts upon a person who, like the defendants, lawfully brings on his own land something which, though harmless whilst it remains there, will naturally do mischief if it escape out of his land ? It is agreed on all hands, that he must take care to keep in that which he has brought on the land and keeps there, in order that it may not escape and damage his neighbors ; but the ques- tion arises, whether the duty which the law casts upon him under such circum- stances is an absolute duty to keep it in at his peril, or is, as the majority of the Court of Exchequer have thought, merely a duty to take all reasonable and prudent precautions in order to keep it in, and no more. If the first be the law, the person who has brought on his land and kept there something dangerous, and failed to keep it in, is responsible for all the natural consequences of its escape. If the second be the limit of his duty, he would not be answerable except on proof of negligence, and consequently would not be answerable for escape arising from any latent defect which ordinary prudence and skill could not detect. " Supposing the second to be the correct view of the law, a further question arises subsidiary to the first, namely, whether the defendants are not so far identified with the contractors, whom they employed, as to be responsible for the consequences of their want of care and skill in making the reservoir in fact insufficient with reference to the old shafts, of the existence of which they were aware, though they had not ascertained where the shafts led to. " We think that the rule of law is, that the person who, for his own purposes, brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and that if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by shoAving that the escape was the consequence of vis major, or the act of God ; but, as nothing of the sort exists here, it is un- necessary to inquire what excuse would be sufficient. The general rule, as above stated, seems on principle just. The person, whose grass or corn is eaten down by the escaping cattle of his neighbor, or whose mine is flooded by the water 4G0 LIABILITY FOR FIRES BY ENGINES. § 125. bearing upon questions which are liable to arise in the course of the construction and operation of railways, that we have deemed from his neighbors' reservoir, or whose cellar is invaded by the filth of his neigh- bor's privy, or whose habitation is made unhealthy by the fumes and noisome vapors of his neighbor's alkali works, is damnified without any fault of his own ; and it seems but reasonable and just that the neighbor, who has brought something on his own property which was not naturally there, harmless to others so long as it is confined to his own property, but which he knows to be mischievous if it gets on his neighbor's, should be obliged to make good the damage which ensues if he does not succeed in confining it to his own property. But for his act in bringing it there no mischief could have accrued, and it seems but just that he should at his peril keep it there, so that no mischief may accrue or answer for the natural and antici- pated consequences. And, upon authority, this we think is established to be the law, whether the things so brought be beasts, or water, or filth, or stenches. " The case that has most commonly occurred, and which is most frequently to be found in the books, is as to the obligation of the owner of cattle which he has brought on his land, to prevent their escaping and doing mischief. The law as to them seems to be perfectly settled from early times. The owner must keep them in at his peril, or he will be answerable for the natural consequences of their escape ; that is, with regard to tame beasts, in the grass they eat and trample upon, though not for any injury to the person of others, for our ancestors have settled, that it is not the general nature of horses to kick or bulls to gore ; but, if the owner knows that the beast has a vicious propensity to attack man, he will be answerable for that too. " As early as the Year Book, 20 Edw. 4, 11, pi. 10, Brian, C. J., lays down the doctrine in terms very much resembling those used by Lord Holt, in Tenant v. Goldwin, which will be referred to afterwards. It was trespass with cattle. Plea, that the defendant's land adjoined a place where the defendant had com- mon ; that the cattle strayed from the common, and the defendant drove them back as soon as he could. It was held a bad plea. Brian, C. J., says : ' It be- hoves him to use his common so that he shall do no hurt to another man ; and if the land on which he has common be not inclosed, it behoves him to keep the beast in the common, and out of the land of any other.' He adds, when it was proposed to amend, by pleading that they were driven out of the com- mon by dogs, that although that might give a right of action against the master of the dogs, it was no defence to the action of trespass by the per- son on whose land the cattle went. In the recent case of Cox v. Bur- bid<*e, Williams, J., says : ' I apprehend the general rule of law to be per- fectly plain. If I am the owner of an animal, in which, by law, the right of property can exist, I am bound to take care that it does not stray into the land of my neighbor ; and I am liable for any trespass it may commit, and for the ordinary consequences of the trespass. Whether or not the escape of the animal is due to my negligence is altogether immaterial.' So in the case of May f. Burdett (9 Q. B. 101 ; 10 Jur. 692), the court, after an elaborate examination of the old precedents and authorities, came to the conclusion, that " a person § 125. LIABILITY FOR FIRES BY ENGINES. 461 it might afford valuable matter for the profession. 19 The opinion will also point out very clearly for what matters railway compa- keeping a mischievous animal, with knowledge of its propensities, is bound to keep it secure at his peril." And Lord Hale (1 Hale's P. C. 430) states, that where one keeps a beast, knowing its nature is such that the natural consequence of its being loose is, that it will harm men, the owner must at his peril keep him up safe from doing hurt ; for though he use his diligence to keep it up, if it escape and do harm, the owner is liable to answer damages ; though, as he proceeds to show, he will not be liable criminally, without proof of want of care. In these latter authorities, the point under consideration was damage to the person, and what was decided was, that where it was known that hurt to the person was the natural consequence of the animal being loose, the owner should be responsible in damages for such hurt ; though where it was not known to be so the owner was not responsible for such damages ; but where the damage is, like eating grass, or other ordinary ingredients in damage feasant, the natural consequence of the escape, the rule as to keeping in the animal is the same. In Com. Dig. ' Droit,' M. 2, it is said : ' That if the owner of 200 acres, in a common moor, enfeoffs B. of 50 acres, B. ought to inclose, at his peril, to prevent damage by his cattle to the other, 150 acres. For if his cattle escape thither, they may be distrained damage feasant. So, the owner of the 150 acres ought to prevent his cattle from doing damage to the 50 acres at his peril.' The authority cited is Dy. 372 b., where the decision was, that the cattle might be distrained; the inference from that decision, that the owner was bound to keep in his cattle at his peril, is, we think, legitimate ; and we have the high authority of Comyns for saying that such is the law. In the note to F. N. B. 128, which is attributed to Lord Hale, it is said : ' If A. & B. have lands adjoining, where there is no in- closure, the one shall have trespass against the other on an escape of their beasts respectively (Dy. 372, Kastal Ent. 621, 20 Edw. 4, 10), although wild dogs, &c. drive the cattle of the one into the lands of the other.' No case is known to us on which, in replevin, it has ever been attempted to plead in bar to an avowry for distress damage feasant, that the cattle had escaped without any negligence on the part of the plaintiff; and surely, if that would have been a good plea in bar, the facts must often have been such as would have supported it. The au- thorities, and the absence of any authority to the contrary, justify Williams, J., in saying, as he does, in Cox v. Burbidge, that the law is clear, that in actions for damage occasioned by animals that have not been kept in by their owners, it is quite immaterial whether the escape is by negligence or not. " As has been already said, there does not appear to be any difference in principle between the extent of the duty cast on him who brings cattle on his land to keep them in, and the extent of the duty imposed on him who brings on his land water, filth, or stenches, or any other thing which will, if it escape, nat- urally do damage, to prevent their escaping and injuring his neighbor ; and the case of Tenant v. Goldwin is an express authority that the duty is the same, and is to keep them in at his peril. " As Martin, B., in his judgment below, appears not to have understood the 462 LIABILITY FOR FIRES BY ENGINES. § 125. nics and others are or are not to be held responsible, if there is no actual negligence on their part. case in the same manner as we do, it is proper to examine it in some detail. It •was a motion in arrest of judgment after judgment by default, and therefore all that was well pleaded in the declaration was admitted to be true. The declara- tion is set out at full length in the report in 6 Mod. 311. It alleged that the plaintiff had a cellar which lay contiguous to a messuage of the defendant, ' and used (solebat) to be separated, and fenced from a privy house of office, parcel of the said messuage of the defendant, by a thick and close wall, which belongs to the said messuage of the defendant, and by the defendant, of right, ought to have been repaired (jure debuit reparari),' yet he did not repair it, and, for want of repair, filth flowed into the plaintiff's cellar. "The case is reported by Salkeld, who argued it, in 6 Mod., and by Lord Raymond, whose report is the fullest. The objection taken was, that there was nothing to show that the defendant was under any obligation to repair the wall, — that, it was said, not being a charge of common right, and the allegation, that the wall de jure debuit reparari by the defendant, 'being an inference of law which did not arise from the facts alleged. Salkeld argued, that this general mode of stating the right was sufficient in a declaration, and also that the duty aliened did of common right result from the facts stated. It is not now material to inquire whether he was or was not right on the pleading point. All three reports concur in saying that Lord Holt, during the argument, intimated an opinion against him on that, but that after consideration the court gave judg- ment for him on the second ground. " In the report 6 Mod., it was stated, ' And at another day, per totam curiam, the declaration is good ; for there is a sufficient cause of action appearing on it, but not upon the word " solebat." If the defendant has a house of office inclosed with a wall which is his, he is of common right bound to use it so as not to annoy another The reason here is, that one must use his own, so as thereby not to hurt another ; and, as of common right one is bound to keep his cattle from trespassing on his neighbor, so he is bound to use anything that is his, so as not to hurt another by such user Suppose one sells a piece of pasture lying open to another piece of pasture which the vendor has, the vendee is bound to keep his cattle from running into the vendor's piece ; so of dung or anything else.' There is an evident allusion to the same case in Dyer, as is referred to in Com. Dig., ' Droit' (M. 2). Lord Raymond, in his report (2 Ld. Raym. 1089), says : ' The last day of term, Holt, C. J., delivered the opinion of the court that the declaration was sufficient. He said that upon the face of the declara- tion there appeared a sufficient cause of action to entitle the plaintiS" to have his judgment ; that they did not go upon the solebat or the jure debuit reparari, as if it were enough to say that the plaintiff had a house and the defendant had a wall, and he ought to repair the wall ; but if the defendant has a house of office, and the wall which separates the house of office from the plaintiff's house is all the defendant's, he is of common right bound to repair it The reason of this case is upon this account, that every one must so use § 125. LIABILITY FOR FIRES BY ENGINES. 463 his own as not to do damage to another ; and as every man is bound so to look to his cattle as to keep them out of his neighbor's ground, so that he may receive no damage ; so he must keep in the filth of his house of office, so that it may not flow in upon and damnify his neighbor So if a man has two pieces of pasture which lie open to one another, and sells one piece, the vendee must keep in his cattle, so as they shall not trespass upon the vendor. So a man shall not lay his dung so high as to damage his neighbor ; and the reason of these cases is, because every man must so use his own as not to damnify another.' Salkeld, who had been counsel in the case, reports the judgment much more con- cisely, but to the same effect. He says : ' The reason he gave for his judgment was because it was the defendant's wall and the defendant's filth ; and he was bound of common right to keep his wall so as his filth might not damnify his neighbor ; and that it was a trespass on his neighbor, as if his beast should escape, or one should make a great heap on the border of his ground, and it should tumble and roll down upon his neighbor's, .... he must repair the wall of his house of office ; for he whose dirt it is must keep it that it may not tres- pass.' It is worth noticing how completely the reason of Lord Holt corresponds with that of Brian, C. J., in the cases already cited in 20 Edw. 4. Martin, B., in the court below, says, that he thinks this was a case without difficulty, because the defendant had, by letting judgment go by default, admitted his liability to repair the wall, and that he cannot see how it is an authority for any case in which no such liability is admitted. But a perusal of the report will show that it was because Lord Holt and his colleagues thought (no matter for this purpose whether rightly or wrongly) that the liability was not admitted that they took so much trouble to consider what liability the law would raise from the admitted facts ; and it does, therefore, seem to us to be a very weighty authority in sup- port of the position, that he who brings and keeps anything, no matter whether beasts, or filth, or clean water, or a heap of earth, or dung, on his premises, must at his peril prevent it from getting on his neighbor's, or make good all the damage which is the .natural consequence of its doing so. No case has been found in which the question as to the liability for noxious vapors escaping from a man's work by inevitable accident has been discussed, but the following case will illus- trate it. Some years ago several actions were brought against the occupiers of some alkali works at Liverpool, for the damage alleged to be caused by the chlorine fumes of their works. The defendants proved that they, at great ex- pense, erected contrivances by which the fumes of chlorine were condensed, and sold as muriatic acid ; and they called a great body of scientific evidence to prove that this apparatus was so perfect that no fumes possibly could escape from the defendant's chimneys. On this evidence, it was pressed upon the jury that the plaintiff's damage must have been due to some of the numerous other chimneys in the neighborhood ; the jury, however, being satisfied that the mischief was occasioned by chlorine, drew the conclusion that it had escaped from the defend- ants' works somehow, and in each case found for the plaintiff. No attempt was made to disturb these verdicts, on the ground that the defendants had taken every precaution which prudence or skill could suggest to keep those fumes in, and that they could not be responsible unless negligence were shown ; yet if the 464 LIABILITY FOR FIRES BY ENGINES. § 125. law be as laid down by the majority of the Court of Exchequer, it would have been a very obvious defence. If it had been raised, the answer would probably have been that the uniform course of pleading in actions on such nuisances is to say that the defendant caused the noisome vapors to arise on his premises, and suffered them to come on the plaintiff's, without stating there was any want of care or skill in the defendant ; and that the case of Tenant v. Goldwin showed that this was founded on the general rule of law, that he whose stuff it is must keep it that it may not trespass. There is no difference in this respect between chlorine and water ; both will, if they escape, do damage, — the one by scorch- ing and the other by drowning ; and he who brings them there, must at his peril see that they do not escape and do that mischief. What is said by Gibbs, C. J., in Sutton v. Clarke, though not necessary for the decision of the case, shows that that very learned judge took the same view of the law that was taken by Lord Holt. But it was further said by Martin, B., that when damage is done to per- sonal property, or even to the person, by collision, either upon land or at sea, there must be negligence in the party doing the damage, to render him legally responsible, and this is no doubt true ; and, as was pointed out by Mr. Mellish during his argument before us, this is not confined to cases of collision, for there are many cases in which proof of negligence is essential ; as, for instance, where an unruly horse gets on the footpath of a public street, and kicks a passenger (Hammack v. White) ; or where a person in a dock is struck by the falling of a bale of cotton which the defendants' servants are lowering (Scott v. The London Dock Company), and many other similar cases may be found. But we think these cases distinguishable from the present. Traffic* on the highways, whether by land or sea, cannot be conducted without exposing those whose persons or property are near it to some inevitable risk ; and that being so, those who go on the highway, or have their property adjacent to it, may be held to do so subject to their taking upon themselves the risk of suffering from that inevitable danger ; and persons who, by the license of the owner, pass near to warehouses where goods are being raised or lowered, certainly do so subject to the inevitable risk of accident. In neither case, therefore, can they recover without proof of want of care or skill occasioning the accident ; and it is believed, that all the cases in which inevitable accident has been held an excuse for what prima facie was a trespass, can be explained on the same principle, viz. that the circum- stances were such as to show that the plaintiff had taken the risk upon himself. But there is no ground for saying that the plaintiff here took upon himself any risk arising from the uses to which the defendants should choose to apply their land. He neither knew what there might be, nor could he in any way control the defendants or hinder their building what reservoirs they liked, and storing up in them what water they pleased, so long as the defendants succeeded in preventing the water which they there brought from interfering with the plaintiff's property. " The view which we take of the first point renders it unnecessary to consider whether the defendants would or would not be responsible for the want of care and skill in the persons employed by them, under the circumstances stated in this case. " We are of opinion that the plaintiff is entitled to recover ; but as we have § 126., INJURIES TO DOMESTIC ANIMALS. 465 *CHAPTER XVIII. INJURIES TO DOMESTIC ANIMALS. 1 . Company not liable unless bound to la <}> the animals off the track. 2. Some cases go even further, in favor of the company. 3. Not liable where the animals were wrong- fully abroad. 4. Not liable for injury to animals, on land where company not bound to fence. 5. Where company bound to fence are prima facie liable for injury to cattle. 6. But if owner is in fault, company not liable. 7. In such case company only liable for gross neglect or wilful injury. 8. Owner cannot recover, if he suffer his cattle to go at large near a railway. 9. Company not liable in such case, unless they might have avoided the injury. Where company are required to keep gates closed, are liable to any party in- jured by omission. Opinion of Gibson, Justice, on this subject. 12. 17. Not liable for consequences of the proper use of their engines. 13. Questions of negligence ordinarily to be determined by jury. 14. But this is true only where the testimony leaves the question doubtful. 10 11 15. Actions may be maintained sometimes, for remote consequences oj' negligence. 16-18. Especially where a statutory duty is neglected by company. 19. Tlte question of negligence is one for the jury. 20. One who suffers an animal to go at large can only recover for gross neglect. 21. Testimony of experts receivable as to management of engines. 22. One who suffers cattle to go at large must take the risk. 23. 77ie company owe a primary duty to pas- sengers, $-c. 24. In Maryland company liable xmless for unavoidable accident. 25. In Indiana common-law rule prevails. 26. In Missouri, modified by statute. 27. In California cattle may lawfully be suf- fered to go at large. 28. 29. Abstract of late cases in Illinois. 30. The weight of evidence and of presump- tion. 31. Company not liable except for negligence. 32. Company must use all statutory and other precautions. § 126. 1. The decisions upon the subject of injuries to domes- tic animals by railways are very numerous, but may be reduced to a comparatively few principles. Where the owner of the ani- mals is unable to show that as against the railway they were properly upon the track, or, in other words, that it was through the fault of the company that they were enabled to come upon not heard any argument as to the amount, we are not able to give judgment for what damages. The parties, probably, will empower their counsel to agree on the amount of damages ; should they differ on the principle, the case may be mentioned again. Judgment for the plaintiff." VOL. I. 30 *361 466 INJURIES TO DOMESTIC ANIMALS. § 126 the road, the company are not in general liable, unless, after they discovered the animals, they might, by the exercise of proper care and prudence, have prevented the injury. The fact of killing an animal of value by the company's en- gines, is not primd facie evidence of negligence on their part. 1 A distinction is here taken by the court between injuries to per- manent property situated along the line of the railway, as injury to buildings by fires communicated by the company's engines, and damage to cattle which are constantly changing place, there being more evidence of fault on the part of the company from the mere occurrence of the injury in the former than in the lat- ter case. 2 2. Most of the better considered cases certainly adopt this view of the subject, and some perhaps go even further in favor of exempting the company from liability, where they were not originally in fault, and the animals were exposed to the injury through the fault of the owner, mediately or immediately. 3. For instance, if the animal escape into the highway, and thus get upon the track of the railway where it intersects with the highway, and is killed, the company are not liable. 3 And if the * animals are trespassing upon a field, and stray from the field, upon the track of the railway, through defect of fences, which the company are bound to maintain, as against the owner of the field, and are killed, the company are not liable, either at common law or under the English statute, 4 or upon the ground that the defendant exercised a dangerous trade. The obligation to make and maintain fences, both at common law and under the statute, applies only as against the owners or occupiers of the adjoining close. 5 1 Scott v. W. & R. Railw., 4 Jones Law, 432. a See note 1, and also Ind. & Cincin. Railw. v. Caldwell, 9 Ind. R. 397. * Towns v. Cheshire Railw., 1 Foster, 363 ; Sharrod v. London and N. W. Railw., 4 Exch. 580. Halloran v. New Y. & Harlem Railw., 2 E. D. Smith, 257. In Maryland it was held that a statute for the protection of animals and stock did not include negro slaves. Scaggs v. Bait. & Wash. Railw., 10 Md. R. 268. 4 8 & 8 Vict. ch. 20, § 68. 5 Ricketts v. The East and West India Docks and Birrn. J. Railw., 12 Eng. L. & Eq. 520. The same point is ruled in the following cases. Jackson v. Rut. & Bur. Railw., 25 Vt. R. 150. See also cases referred to in §§ 166, 167. And *362 § 126. INJURIES TO DOMESTIC ANIMALS. 467 4. So where the statute requires railways to fence their road, where the same passes through " inclosed or improved lands," if injury happen to another's cattle through want of fences, upon common or uninclosed land, it is not legally imputable to the negligence of the company. 6 5. But if the railway are bound to maintain fences, as against the owner of the cattle, and they come upon the road through defect of such fences, and are injured, the company are, in gen- eral, liable without further proof of negligence. 7 it was held, Man. Sh. & Lincolnshire Railw. v. Wallis, 25 Eng. L. & Eq. 373, that a railway are not bound to fence against cattle straying upon a highway running along the railway, and that they are not liable for an injury sustained by cattle in getting from such highway upon the railway, through a defect of the fences maintained by the company ; although the cattle strayed upon the high- way without any fault of the owner. Brooks v. N. Y. & Erie Railw., 13 Barb. 594. But in the Midland Railw. v. Daykin, 33 Eng. L. & Eq. 19?, it was held, that where a colt strayed from a field, upon a public road, abutting upon which was a yard not fenced from a railway, the gate of which was, through the neglect of the company's servants, left open, and, while the colt was being driven back to the field by the servants of the owner, it escaped into the yard, and thence upon the railway, where it was killed by a passing train, the company were liable. Jervis, Ch. J., says : " I can see no room to doubt that that was a lawful use of the highway." But in Ellis v. London & Southwestern Railw., 2 H. & N. 424, where a railway company constructed their road across a public footway, in such a manner that no security against injury to passers fc on the way was afforded within the provisions of the English statute, 8 & 9 Yic. ch. 20, §§ 46, 61, 68, by means of a bridge or stile, but the company erected high gates which obstructed the footway and gave the key to plaintiff's servant, which had been lost and the gates left open, without notice to the railway company, whereby the plaintiff's colts escaped from his lands adjoining, and came upon the railway and were killed by a passing train, the jury having found that the plaintiff, by his own negligence and that of his servants had contributed to the accident, it was held he could not recover, notwithstanding the omission of duty by the com- pany. 6 Perkins v. Eastern Railw. and the Boston & M. Railw., 29 Maine R. 307. And if by the common usage cattle have the right to run updh uninclosed land, the owner incurs the risk of all accidents. Knight v. Abert, 6 Barr, 4 72; Phil. & Germ. Railw. v. Wilt, 4 Whart. 143. 7 Suydam v. Moore, 8 Barb. 358 ; AValdron v. Rensselaer & Sar. Railw., 8 Barb. 390 ; Horn v. Atlantic & St. Lawrence Railw., 35 N. H. R. 169 ; s. c. 36 Id. 440 ; Smith v. Eastern Railw., 35 N. H. R. 356. But where the cattle come upon the railway, at a point not proper to be fenced, as at the intersection of a highway, or at a mill yard, the company are not liable for injury to them, unless 468 INJURIES TO DOMESTIC ANIMALS. § 126. 6. But where the statute imposes the duty of building fence upon the railway, they may lawfully stipulate with the land-own- ers * to maintain it, and if such land-owner suffer his cattle to be where they may come upon the railway without building the fence, he cannot recover of the company. 8 So, too, if the plain- tiff leave down the bars at a cattle crossing, whereby his cattle go upon the railway and are killed, he cannot recover. 9 7. And where the cattle go upon a railway through defect of fences, which the owner is bound to maintain, and suffer dam- age, the owner has no claim upon the company, unless, perhaps, for what has sometimes been denominated gross negligence, or wilful injury, 10 for in such cases the cattle are regarded as tres- passers, 10 and the owner the cause of the injury sustained, unless the railway might have prevented it. But where there was no reasonable ground to suppose that the portion of fence which it was the duty of the company to build would have protected the animals, and the owner was shown to have been guilty of negligence in not taking care of them, it was the plaintiff prove some fault on the part of the company's servants, besides the want of fences. Indianapolis & C. R. v. Kinney, 8 Ind. R. 402 ; Lafayette & Ind. Railw. v. Shriner, 6 Ind. R. 141. 8 Tower v. Prov. & Wor. Railw., 2 Rhode Island R. 404, 411; Clark v. Sy. & Utica Railw., ^L Barb. 112; C. H. & D. Railw. v. Waterson, 4 Ohio St. 424. So, also, where the duty of maintaining the fences along the railway is upon the land-owner, and it is burned down by fire, communicated by the com- pany's engines, and he suffers his fields to remain unfenced, whereby bis cattle go upon the track, and are killed, he cannot recover. If the company are in fault, and liable to damages in regard to the fire, this does not oblige them to rebuild the fence, nor will it justify the plaintiff in suffering his fields to remain unfenced except at his own peril. Terry v. New York Central Railw., 22 Barb. 574. 9 Waldron v. Portland, S. & P. Railw., 35 Maine R. 422. 10 Tonawanda Railw. v. Munger, 5 Denio, 255 ; s. c. 4 Conist. 349 ; Clark v. Syracuse & Utica Railw., 1 1 Barb. 112; Williams v. Mich. Central Railw., 2 Mich. R. 259. In 'this case the horses were wrongfully upon the railway, and the court say " they (the company) cannot be held liable for any accidental in- jury which may have occurred, unless the lawful right of running the train was exercised without a proper degree of care and precaution, or in an unreasonable or unlawful manner." See also Garris v. Portsmouth & Roanoke Railw., 2 Ired. 324; C. H. & D. Railw. v. Waterson, 4 Ohio St. 424; C. C. & C. Railw. v. Elliott, 4 Ohio St. 474; New Albany, &c. Railw. v. McNamara, 11 Ind. R. 543. *363 § 126. INJURIES TO DOMESTIC ANIMALS. 469 held there could be no recovery, since his negligence was the direct and proximate cause of the injury. 11 8. And it was held to be gross negligence for the owner of cattle to suffer them to go at large, in the vicinity of a railway, whether the same was fenced or not. 12 9. It has been held not to be sufficient in such cases to charge the company, to show that they were running at an unreason- able rate of speed, or without proper care in other respects. 13 The only question in such case is, we apprehend, whether the company, after discovering the peril of the animals, might have so conducted as to haveNprevented the injury. 13 The same rule obtains, which does in actions for personal injuries, where there is fault in both parties. This subject is extensively discussed in Vicksburg and Jack- son Railway v. Patton, 14 and the doctrine enunciated, that the owner of domestic animals not of a dangerous character, may lawfully suffer them to depasture upon the uninclosed commons, and if they wander upon the premises of others not inclosed, the owner of the animals is not liable for any damage in conse- quence. But a railway, crossing such common, has the same right to its unobstructed use as the owner of cattle, and they may law- 11 Joliet & Northern Ind. Railw. v. Jones, 20 Illinois R. 221. 12 Marsh v. N. Y. & Erie Railw., 14 Barb. 364 ; Talmadge v. Rennsselaer & Saratoga Railw., 13 Barb. 493 ; Louisville & Frankfort Railw. v. Milton, 14 B. Monroe, 75. This is where the plaintiff below suffered the company to build a railway through his field without stipulating that they should fence the track, and his cattle running upon the track while depasturing in the field were killed, and the court held the company are not liable, " unless the injury could have been avoided with reasonable care." But in Housatonic Railw. v. Waterbury, 23 Conn. R. 101, it was held that in such case the company hold their easement subject to the land-owner's right to cross and recross, to and from the different sections of his farm, provided the right is reasonably exercised, and that the land-owner is not chargeable with negligence in letting his cattle run on his land unfenced, unless he knew they were accustomed to keep near the track, thus im- posing a duty of watchfulness on both parties. 13 Vandergrift v. Rediker, 2 N. J. R. (Zab.) 185; Clark v. Sy. & Utica Railw., 11 Barb. 112; Williams v. Mich. Central Railw., 2 Mich. R. 259; Lafayette & Ind. Railw. v. Shriner, 6 Porter (Ind.), 141. Here it is held the company are liable for gross negligence, even where the cattle are wrongfully upon the road. 14 31 Miss. R. 156 ; Gorman v. Pacific Railw., 26 Mo. R. 441. *364 470 INJURIES TO DOMESTIC ANIMALS. § 126. fully run their cars at all times, and at all lawful rates of speed ; but if their own track be uninclosed and cattle liable to wander upon it, the company should have proper regard to so running their trains as not to injure them. And if cattle are injured through any default of the company, it is liable. It is the duty of the company to keep their engines in good repair, and to have a sufficient number of servants to manage their trains with safety ; and if through any default in any of these duties the cattle of another are injured, it will be liable. It was held in this case, contrary to the general course of practice, that it may be proved that the general character of the engineer in charge of the train was that of a reckless and un- trustworthy agent. And it is here said that the company are liable to exemplary damages for such an injury occurring through the gross negligence or wanton misconduct of its agents ; both of which propositions seem not entirely reconcilable with the gen- eral course of decision. 10. And it has been held that where the statute, in general terms, requires railways to keep gates at road-crossings con- stantly closed, that one whose horses leaped from his field into the highway, and then strayed upon the railway, by reason of the gates not being kept constantly closed, and were killed, might recover of the company. 15 In such case it was held, that as to the company the horses were lawfully on the highway, as the provision in the statute in regard to keeping the gates shut was intended for the protection of all cattle, horses, &c, passing along the highway, whether strayed there or not, unless perhaps when voluntarily suffered to run at large in the highway. And the duty of keeping cattle-guards at road-crossings has been considered to extend to the protection of all animals in the street, and to be a duty which the railway owe the public generally, and not merely the owners of cattle driven along the highway, which, in strictness, is the only condition in which cattle are rightfully in the highway, at common law. 16 15 Fawcett v. York & North M. Railw., 2 Eng. L. & Eq. 289. But it is a question for the jury, under the circumstances, whether they believe the gates were left open by the fault of the company's servants or the tort of a stranger. Walford, 179, citing two Nisi Prius cases (1842), (1845). 1S Trow v. The Vermont Central Railw., 24 Vt. R. 487. And in Railroad v. § 126. INJURIES TO DOMESTIC ANIMALS. 471 11. Iii the New York & Erie Railway v. Skinner, 17 Gibson, J., lays * down the rule in the broadest terms, that railways, in- Skinner, 19 Penn. St. 298, it is said, that if cattle are suffered to go at large, and are killed or injured on a railway, the owner has no remedy against the company, and may himself be made liable for damage done by them to the company ; and it is unimportant whether the owner knew ee Carman v. Stubenville and Ind. Railw., 4 Ohio St. 399 ; Thompson v. New Orleans & Carrollton Railw., 1 Louis. Ann. 178 ; s. c. 4 Id. 262 ; s. c. 10 Id. 403. *379 § 129. CONTRACTORS AND THEIR AGENTS. 509 effecting the same, or a similar separation of the instances in which the employer is or is not liable. 7. The true ground of the distinction being, after all, not the form of the employment, or the rule of compensation, but whether the work was done under the immediate control and direction of the employer, so that the operatives were his servants, and not the servants of another, who was himself the undertaker for ac- complishing the work, and having a separate, and independent, and irresponsible control of the operatives, bringing the question again to the same point, the difference between a contractor and a servant. 7 8. In a recent case before the Privy Council, where the owner of land employed Indian laborers in the Mauritius, at so much per acre, to clear it, which they did, partly by lighting a fire so negligently that sparks were carried by the wind upon the land of another, and there burned down his house, it was held, upon the ground that the owner of the land retained control of the work, and made constant interference in the conduct of it, that lie was responsible for the negligence of the workmen, as the re- lation of master and servant, or superior and subordinate, con- tinued. 8 7 In the case of Blackwell v. Wiswall, 24 Barb. 355, is an elaborate opinion by Harris, J., which was affirmed by the full court, which holds that the only ground upon which one man can be made responsible for the wrongful acts of another is, that he should have controlled the conduct of such person. And that the person who is made liable for the acts of another must stand in the relation of superior. Hence one who had obtained the exclusive right of a ferry, and who suffered another to operate it for his own benefit, as lessee, is not responsible for any in- jury inflicted upon passengers, through the negligence or unskilfulness of the servants of the .lessee, who conduct the ferry, and it would make no difference if the lessee had been himself conducting the ferry, at the time the injury accrued. And if it were true that the grantee of the ferry was guilty of a breach of duty, in making the lease, it will not entitle any one to sue on that account, un- less he has sustained injury resulting from the act of leasing directly, and not incidentally merely. 8 Serendat v. Saisse, 12 Jur. N. S. 301. The case was governed by the rule laid down in the Code Napoleon, but that is not essentially different from the rule of the English law upon the subject. 510 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 130. *SECTION II. Liability of the Company for the Acts of their Agents ana Servants. 1. Courts manifest disposition to give such agents a liberal discretion. 2. Company liable for torts committed by agents in discharge of their duties. 3. May be liable for wilful act of servant in the range of his employment. 4. Some of the cases hold it necessary to show the assent of the company. n. 6. Cases upon this subject reviewed. 5. Most of the cases adhere to the principle of respondeat superior. m 6. But it seems not to have been considered that the company is present. 7. The cases seem to regard the company as always absent. 8. In cases where the company owe a special duty, the act of the servant is always that of the company. 9. It seems more just and reasonable to re- gard the company as always present in the person of their agent. 1 0. What shall amount to ratification of the act of an agent by a corporation diffi- cult to define. 1 1. How corporations may be held responsible for the publication of a libel. The powers of a corporation are such only as are conferred by charter. False certificate of capital being paid in money. 14. Gas company not bound to supply gas to all who require it. 1 5. Company may become responsible for false imprisonment. 12 13 § 130. 1. The extent of the liability of railways for the acts of their servants and agents, both negative and positive, seems not very fully settled in many of its incidents. But the disposition of the courts has been to give such agents and servants a large and liberal discretion, and hold the companies liable for all their acts, within the most extensive range of their charter powers. 1 1 Derby v. Phil. & Read. Railw., 14 Howard, 468, 483 ; Noyes v. Rutland & Burlington Railw., 27 Vt. R. 110. We may suppose the officers and ser- vants of railways to take exorbitant fare and freight, to refuse to permit passen- gers to have tickets at the fixed rate, or to destroy the life of animals, or of per- sons, by recklessness, or wantonness, in the discharge of their appropriate duties, and it would be strange if the company were liable in the former case, on account of their special duty as common carriers, and not in the latter, because they owed no duty to the public in that respect. Alabama & Tenn. Rivers Railw. v. Kidd, 29 Alabama R. 221. But it has been held to make no difference, in regard to the liability of the company for the act of their servant, while acting in the due course of his employment, that he did not follow their instructions, either general or special. Derby v. Phil. & Read. Railw., 14 How. (U. S.) 468, 483. See also Southwick v. Estes, 7 Cush. 385. *380 § 130. LIABILITIES IN REGARD TO AGENTS AND SERVANTS. 511 2. This seems the only construction which will be safe or just, or indeed practicable. It has long been settled, that cor- porations are liable for torts committed by their agents, in the discharge of the business of their employment, and within the proper range of such employment. 2 * 3. But it has been claimed sometimes, that a corporation is not liable for the wilful wrong of its agents or servants. 3 This opinion seems to rest upon those cases which have maintained that the master, whether a natural pernso or a corporation, is never liable for the wilful act of his servant. 4 Without stopping here to discuss the soundness of the general principle, as appli- cable to the relation of master and servant, it must be conceded, we think, that it is not applicable to the case of corporations, and especially such as railways. In regard to such corpora- tions, it seems to us altogether an inadmissible proposition, to excuse them for every act of their servants and agents which is done, or claimed to have been done, positively and wilfully, and which results in an injury to some other party, or proves to be illegal, unless directed or ratified by the corporation. Some of the cases seem to disregard any such ground of exemption for the corporation. 5 4. But in some cases it has been held, that the corporation is not liable for the wilful act of its agents, unless done with the assent of the corporation, seeming to imply that if the servant pursue his own whim or caprice, and act upon his own im- pulses, the act is his, and not that of the corporation. 6 2 Yarborough v. The Bank of England, 16 East, 6; Queen v. Birmingham, & Gloucester Railw., 3 Ad. & Ell. (N. S.) 223 ; Hay v. Cahoes Co., 3 Barb. 42 ; 2 Aiken's Vt. R. 255, 429 ; Bloodgood v. M. & H. Railw. 18 Wend. 9 ; Dater v. Troy T. & Railw., 2 Hill, 629 ; Chestnut Hill Turnpike Co. v. Rutter, 4 S. & R. 16. They are bound by estoppels in pais. Hale v. Union Mutual Fire Ins. Co., 32 New H. R. 295. 3 Foster v. The Essex Bank, 17 Mass. R. 479, 510 ; State v. Morris & Essex Railw., 3 Zab. 360, 367. * M'Manus v. Crickett, 1 East, 106; Croft v. Allison, 4 B. & Aid. 590; Wright v. Wilcox, 19 Wend. 343. 5 Edwards v. The Union Bank of Florida, 1 Florida R. 136 ; Whiteman v. Wilmington & Sus. Railw., 2 Harr. 514. 6 Phil. Germantown & N. Railway v. Wilt, 4 Whart. 143; Fox v. The Northern Liberties, 3 W. & S. R. 103. It has always seemed to us, that the *381 512 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. §130. * 5. Most of the cases, upon the subject of the liability of rail- ways, for the acts of their officers, agents and servants, have at- whole class of cases, which hold that the master is not liable for the wilful acts of his servant, has grown up under a misconception of the case of M'Manus v. Crickett, 1 East, 106, for they all profess to base themselves upon that case. That case we apprehend was never intended to decide more than that the master is not liable, in trespass, for the wilful act of the servant. Lord Kenyon, Ch. J., in delivering his opinion in that case, with which the court concur, ex- pressly says, speaking of actions on the case, brought against the master, where the servant negligently did a wrong, in the course of his employment for the master : — " The form of these actions shows, that where the servant is, in point of law, a trespasser, the master is not liable, as such, though liable to make compensation for the damage consequential from his employing of an unskilful or negligent servant." ' " The act of the master is the employment of the servant." This reasoning certainly applies with the same force to that class of cases where the act of the servant is both direct and wilful, as where it is only negli- gent. The master is not liable in either case, perhaps, so much for having im- pliedly authorized the act, as for having employed an unfaithful servant, who did the injury, in the course of his employment. And whether done negligently or wilfully, seems to be of no possible moment, as to the liability of the master, the only inquiry being whether it was done in the course of the servant's employ- ment. And the argument, that when the servant acts wilfully, he ipso facto leaves the employment of the master, and if he is driving a coach-and-six, or a locomotive and train of cars, thereby acquires a special property in the things, and is, pro hac vice, the owner, and doing his own business, may sound plausible enough, perhaps, but we confess it seems to us unsound, although quoted from so ancient a date as Rolle's Abridgment, and adopted by so distinguished a judge as Lord Kenyon. The truth is the whole argument is only a specious fallacy ; and whether Lord Kenyon intended really to -eay, that rfc action will lie against the master in such case, or only to say, what the case required, that the master is not liable in tres- pass, it is very obvious the proper distinction, in regard to the master's liability, cannot be made to depend upon the question of the intention of the servant. The master has nothing to do, either way, with the purpose and intention of his servants. It is with their acts that he is to be affected, and if these come within the range of their employment, the master is liable, whether the act be a misfeasance, or a nonfeasance, an omission or commission, carelessly or purposely done. It will happen, doubtless, that when the master is under a positive duty to keep or carry things safely, as a bailee, or to carry persons safely, that while he will be liable tor the mere nonfeasance of the servant, the servant will not be liable to the same party for such nonfeasance, there being no privity between the ser- vant and such party, no duty owing to such person from the servant. But in such case the servant will be liable for his positive wrongs, and wilful acts of in- *382 § 13t). LIABILITIES IN REGARD TO AGENTS AND SERVANTS. 513 * tempted to carry out the analogy of principal and agent, or jury, and the master is also liable for these latter acts, but not in trespass, as the servant is ordinarily, but in case. And so, where the servant goes out of his employment, and does a wrong, as committing an assault by his own hands upon a stranger, or stealing goods, or any other act wholly disconnected with his employment, the master is not liable. This is the view taken of this subject by Judge Reeve. Dom. Rel. 358, 359, 360, and it is, we think, the only consistent and rational one, and the one which must ultimately prevail. It is virtually adopted, in regard to corporations, in England. Queen v. Great North of England Railway, 9 Q. B. 315 (1846). Lord Denman, Ch. J., said : " It is as easy to charge one person, or a body corporate, with erecting a bar across a public road, as with the non-repair of it, and they may as well be com- pelled to pay a fine for the act as the omission. State v. Vermont Central Railw., 27 Vt. R. 103 ; Maund v. The Monmouthshire Canal Co., 4 M. & G. 452, where it is held, that trespass will lie against a corporation for the act of its servant. This is familiar law in the American courts. And it is not deemed of any importance that the agent should act by any particular form of appointment ; and it would be strange if the liability of the corporation could be made to de- pend upon the intention of the agent. This distinction is not claimed to be of any importance where the comj^any owe a duty, as carriers of freight or passengers, for there the corporation are lia- ble for all the acts of their servants; but for the acts of their servants in regard to strangers, it has been claimed there is no liability where the servant acts wilfully, unless the corporation direct or affirm the act of the servant. And to this we may assent, in a qualified sense. The corporation does virtu- ally assent to all the acts of its agents and servants, done in the regular course of their employment. A railway or any business corporation exists and acts only by its agents and servants, and by putting them into their places, or suffering them to occupy them, the company consent to be bound by their acts. Thus, a conductor or engineer of a railway, while he acts with the instruments which the company put into his hands to be used on their behalf, upon the line of their road, is acting instead of the corporation, and his acts will bind the corporation, whether done negligently or cautiously, heedlessly or purposely. It would present a remarkable anomaly upon this subject, to hold the company liable for cattle killed carelessly upon their track, but not liable when it was done purposely by the engineer, or other servants of the company. It is proba- bly true, that if the engineer should kill cattle, in any way wholly disconnected with his employment, either upon the land of the company, or others, the com- pany could not be made liable ; but if the engineer should destroy them wilfully, by rushing the engine upon them, the company would be liable undoubtedly, if any one were, of which there can be little question. So the company might not be liable if the engineer should drive the engine upon another road and there do damage, when his employment extended to no such transaction. VOL. I. 33 *383 514 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. J 130. master * and servant, as between natural persons, and to apply strictly the principle of respondeat superior. 1 The case of The Southeastern Railw. v. The European & Am. Telegraph Co., 24 Eng. L. & Eq. 513 (1854), seems to have adopted, in principle, the view for which we contend. The act here complained of was, boring under the rail- way, and it was held the company had no right to do so, and that they were liable, in trespass, for this unauthorized act of their servants. See also Sinclair v. Pearson, 7 New H. R., 219, 227, opinion of Parker, Ch. J.; Phil. & Reading Railw. v. Derby, 14 How. 468, 483, Grier, J. ; Case of The Druid, 1 Wm. Rob. 391, opinion of Dr. Lushinglon, reviewing the cases. And we do not very well see why the railway is not liable to the very same action which the servant would be, because his act is the act of the corporation, within the range of his employment, as running over sheep upon the track, in Sharrod v. London & N. W. Railw., 4 Eng. L. & Eq. 401, where it is held the action must be case. The distinction between this case and that of The Southeastern Railw. v. The European & Am. Telegraph Co. is not very obvious, unless we suppose in the latter case a vote of the corpoi'ation, which is highly improbable. See Phil. Railw. Co. v. Wilt, 4 Whart. 143, where it is said the action should be case, and that trespass will not lie unless the act is done by the command or with the assent of the corporation, which never occurs. Corpora- tions do not vote such acts. A vote of a corporation that their engineers should run their engines over cattle would be an anomaly. In Sleath v. Wilson, 9 C. & P. 607, where a servant had been driving his mas- ter's carriage, and being directed to return to the stable, or while that was his duty, in the ordinary course of his employment, he went out of his way with the carriage, to do some errand of his own, and drove against a person negligently ; it was held that the master was liable, this being the act of the servant, in the course of his employment, because the injury was done with the master's horses and carriage, which he put into the servant's hands. But here the servant was far more obviously going aside of his employment, than in the supposed cases of his assuming to do a wilful wrong in the direct course of his ordinary employment. This case certainly cannot stand with the argument of the court, 1 East, 106, And yet is confirmed by other cases. Joel v. Morrison, 6 C. & P. 501. Any different view of this subject will, it seems to us, in principle, bring us back to the earlier theory of the relation of corporations to their servants ; that corpora- tions are not liable for torts, committed by their servants„they having no au- thority to bind the corporation by unlawful acts. T Sherman v. Rochester, &c. Railw., 15 Barbour, 574, 577 ; Vanderbilt v. Richmond T. Co., 2 Comst. 479. In this last case, it was held the company were not liable for the trespass committed by its servants, although directed so to do by the president and general agent of the company, he having no authority to command an unlawful act. The same rule is laid down in Lloyd v. Mayor of New York, 1 Selden, 369 ; Ross v. Madison, 1 Carter (Ind.), 281. *384 § 130. LIABILITIES IN REGARD TO AGENTS AND SERVANTS. 515 6. But they seem to have lost sight of, or not sufficiently to have considered, one peculiarity of this mode of transportation of freight and passengers, that the superior is virtually always present, in the person of any of the employees, within the range of the employment, as much so as is practicable in such cases. And this consideration, in regard to natural persons, is held sufficient, * to make the superior always liable for the act of the subordinate, whether done negligently or wilfully. 8 There is an elaborate case in 20 Maine R. 41, State v. Great Works Mill & Manu. Co. taking precisely the old view of the liability of corporations for the acts of their servants, where the act proves unlawful. But most of the later cases hold the company liable for the torts of their agents, done in the course of the agency. But the company are not liable for injuries to persons or property through the recklessness and want of common care and prudence of such persons, or prop- erty, as where a slave lay down to sleep upon the track of a railway, and was run over by a train of cars, it not being possible to discover such slave above twenty feet, on account of the grass upon the track. Felder v. Railw. Co., 2 McMullan, 403. See also Mitchell v. Crassweller, 16 Eng. L. & Eq. 448; Leame v. Bray, 3 East, 593; Claflin v. Wilcox, 18 Vt. R. 605, where the principles involved in this inquiry are examined. Smith v. Birmingham Gas Co., 1 Ad. & Ell. 526. In two cases in Vol. 24 Conn" R. Crocker v. New London, W. & P. Railw., 249, and Thames Steamboat Co. v. -Housatonic Railw., 40, the general proposition is maintained, that railway companies are not liable for acts done without the command of the agent, having the superior control in that department of the company's business, at the time, and out of the range of the particular employ- ment of the servant doing the act. This seems to us a sound and just proposi- tion. See also Giles v. Taflf Vale Railw., 2 Ell. & Bl. 822 ; Glover v. London & North W. Railw., 5 Exch. 66. It is said, in Illinois Central Railw. v. Downey, 18 111. R. 259, that case cannot be maintained against a corporation for injuries wilfully and intentionally com- mitted by its servants, and not occasioned in the course of their employment in the pursuit of their regular business. The judge, in laying down the proposition, seems to found himself upon the form of the action. But if any action will lie against a corporation for the wilful misconduct of its agents, we do not see why it may not be the same ordinarily brought against natural persons for similar injuries. But the proposition laid down in the case is not entirely clear or per- spicuous. The act of a servant may be in the direct course of his employment and business, and still be wilful, and that was the very case before the court, if the act was done wilfully. 8 Morse v. The Auburn & Sy. Railw. Co., 10 Barb 621 ; Vandegrift v. Railw., 2 N. J. R. 185, 188. See also Burton v. Philadelphia, &c. Railw., 4 Harring. (Del.) 252. *385 516 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 130. 7. And although the cases seem to treat the superior as always absent, in the case of injuries done by railways, it is submitted, that the more just and reasonable rule is, to regard the principal as always present, when the servant acts within the range of his employment. 9 8. This distinction is of no importance in regard to the liabil- ity of railways, as carriers of freight and passengers, for then the law makes the company liable absolutely in one case and in the other, as far as care and diligence can effect security. Those cases, therefore, which have excused corporations as bailees of goods for hire, when they were purloined by their servants, it would seem are necessarily wrong. 10 9. But, as railways are, like other corporations, mere entities of the law, inappreciable to sense, we do not see why this ab- straction should not be regarded as always existing and present in the discharge of its functions. It is indeed a mere fiction, whether we regard the company as present or absent. And it seems more just and reasonable, that the fiction should not be resorted to, to excuse just responsibility. It is certain we never require proof of any organic action of the corporation, to con- stitute railways carriers of freight and passengers. All that is required is the fact of their assuming such offices, to create the liability. So, too, for the most part, in regard to injuries to strangers and mere torts, it is not expected that any proof will be given of any express authority to the servant or employee to do the particular act. 11 9 Chandler v. Broughton, 1 Crompton & M. 29. In this case it is held, that if the master is present, although passive, he is liable for the wilful act of his servant. M'Laughlin v. Pryor, 1 Car. & M. 354. 10 Foster v. The Essex Bank, 17 Mass. 479, 510. Trespass will lie against a railway company. Crawfordsville Railw. v. Wright, 5 Ind. R. 252. 11 Lowell v. Boston & Lowell Railw., 23 Pick. 24. Numerous cases upon the subject of the liability of railways show this practically. Where the company begins to run trains before condemning the land to their use, it is seldom that the act of running them is traceable directly to the corporation, except as the act of the employees. This is always done by design, and never any doubt was entertained that the company are liable, and in trespass, to the land-owner, which could not be the case upon the strict analogies referred to in note (6), unless the corporation were regarded as present, and assenting to the act. Ha- zen v. Boston & Maine Railw., 2 Gray, 574; Eward v. Lawrenceburg & Upper Mis. Railw., 7 Porter (Ind.), 711 ; Hall v. Pickering, 40 Maine R. 548. § 180. LIABILITIES IN REGARD TO AGENTS AND SERVANTS. 517 10. What shall amount to a ratification of the acts of its agent by the stockholders of the corporation, so as to give an authority not expressly conferred, or one not intended to have been conferred^ or even where the formal act of the corporation was a denial of the authority, has been a good deal discussed, and is not, perhaps, susceptible of a specific definition. The question is discussed and the authorities examined in Cumber- land Coal Company v. Sherman. 12 11. And it seems to be settled, both in this country and in England, that a -corporation may become responsible for the publication of a libel. In the English case, 13 a railway company were held responsible for telegraphing along their line, that the plaintiffs, who were bankers, had stopped payment. Lord Camp- bell said : The allegation of malice " may be proved by showing that the publication of a libel took place by order of the defend- ants, and was therefore wrongful, although the defendants held no ill will to the plaintiffs, and did not mean to injure them." And the leading American case 14 decides that a railway may be liable for a libel published and circulated in their reports, wherein they represented the plaintiff as an incompetent me- The rule laid down upon this subject by Lord Denman, Ch. J., in a case which, although a trial at Nisi Prius, seems to have been examined and acquiesced in by all the judges of K. B., Rex v. Medley, 6 C. & P. 292, certainly exhibits the sagacity and wisdom of its author. That is the case of an indictment against the directors of a gas company for the act of the company's superintendent and engineer, in conveying the refuse gas into a great public river, whereby the fish are destroyed, and the water rendered unfit for use, &c, thereby creating a public nuisance. No distinction is attempted, or could fairly be made here between the liability of the company and that of the directors. The court held the directors liable for an act done by their superintendent and engineer, under a general authority to manage the works, though they were personally ignorant of the particular plan adopted, and though such plan was a departure from the original and understood method, which the directors had no reason to suppose was discontinued. The learned judge uses this significant language, which fully justifies all we contend for : " It seems to me both common sense and law, that if persons, for their own advantage, employ servants to conduct works, they must be answer- able for whatj is done by those servants." 12 30 Barb. 553. 13 Whitefield v. Southeast. Railw. Co.; Ellis Blackb. v. Ellis, 115. 14 Philadelphia, Wil. & Bait. Railw. v. Quigley, 21 How. (U. S.) 202. 518 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 130. clianic and builder of bridges, station-houses, and other struct- ures, and wanting in all requisite capacity and skill for such employment. The court held that, in the absence of express malice or bad faith, the report to the stockholders is a privileged communication, but the privilege does not extend to the pub- lication of the report and evidence in a book for distribution among the persons belonging to the corporation and others, and so far as the corporation authorized the publication in the form employed they are responsible in damages. 12. It is well settled, that corporations have* no powers except such as are conferred by their charters, or incidentally requisite to carry into effect the purposes of their charters. Hence it was held, that a charter to build a road to the top of a mountain and take tolls thereon, does not warrant the company in purchasing horses and carriages and establishing a stage route. Nor does an additional act for erecting and leasing buildings for the ac- commodation of the business of the company or others on the road have that effect. And an agent can do no act not within the corporate powers, nor can the corporation ratify any such act. 15 13. Where the statute requires the directors of a corporation to certify the fact of the capital stock being paid into the treas- ury in cash, and this is done, when in fact the payment was made in property of uncertain value, such certificate is false, and the directors responsible for the debts of the company under the statute, imposing that penalty for making a false certificate in that respect. 16 14. A gas company, chartered for the purpose of lighting the streets and buildings of a town, is not obliged to supply gas to all persons having buildings on the line of their pipes, upon being tendered reasonable compensation. 17 15. In one case 18 it is said the company are responsible for a false imprisonment committed by its agents, and no authority under seal is requisite ; but there must be evidence justifying the jury in finding that the company's servants who did the act 16 Downing v. Mount Washington Road Co., 40 N. H. R. 230. 16 Waters v. Quimby, 3 Dutcher, 198. 17 Paterson Gas Light Co. v. Brady, 3 Dutcher, 245. 18 Goff v. Great Northern Railw. Co., 7 Jur. N. S. 286. § 130. LIABILITIES IN REGARD TO AGENTS AND SERVANTS. 519 had authority from the company to do so. In this case the plaintiff had been taken into custody by the servants of the company, and by direction of the superintendent of the line, carried before a magistrate, and charged with an attempt to travel in one of the company's carriages without having first paid his fare and procured a ticket. The fact was, he had paid his fare and procured a ticket and mislaid it at home, and, by mistake, taken another ticket accidentally laid in the same place. He explained the transaction to the company's servants, and declined to pay fare again, because he had not the means, but offered to pawn some of the tools of his trade which he had with him. The court held, that, as some one must have authority to act for the company in such emergencies, the superintendent of the line must be regarded as having that authority. The jury gave a verdict for the plaintiff for <£50 damages, and the court declined to interfere on the ground that they were excessive. The wonder is that any one should have had any hesitation in regard to the acts of the agents who thus acted in matters rep- resenting the company. It should be considered in all cases, that where a servant of any corporation does any act coming fairly within the scope of the business intrusted to him, it must be held binding upon the company. 520 LIABILITY FOR ACTS OF AGENTS AND SUB- AGENTS. § 131. ♦SECTION III. Injuries to Servants, by neglect of Fellow -Servants, and use of Machinery. 1 . In general no such cause of action exists against company. 2. But if there is any fault in employing unsuitable servants, or machinery, are liable. 3. But not liable far deficiency of help or for not fencing road. 4. Has been questioned whether rule applies to servants of different grades. 5. Rule not adopted in some states. Case of slaves. Scotland. 6. No implied contract, by ship-owners, that ship is seaworthy. 7. But rule does not apply where servant has no connection with the particular work. n. 9. Cases reviewed in England, Scotland, and America. 8. Recent English case illustrating the Eng- lish doctrine. 9. Statement of the law in Kentucky and review of the subject. 10. Subject reviewed by Chief Justice Shaw. § 131. 1. It seems to be now perfectly well settled in Eng- land, and mostly in this country, that a servant, who is injured by the negligence or misconduct of his fellow-servant, can main- tain no action against the master for such injury. 1 * 2. But it seems to be conceded, that if there be any fault in the selection of the other servants, or in continuing them in their places, after they have proved incompetent, perhaps, or in the employing unsafe machinery, the master will be answerable for all injury to his servants, in consequence. 2 1 Priestly v. Fowler, 3M.&W.1; Hutchinson v. York, Newcastle & Berwick Railw., 5 Exch. 343 ; Wigmore v. Jay, 5 Exch. 354; Skip v. Eastern Counties Railw., 24 Eng. L. & Eq. 396 (1853) ; Farwell v. Bos. & W. RaiLw., 4 Met. 49 ; Murray v. South C. Railw., 1 McMullan, 385 ; Brown v. Maxwell, 6 Hill (N. Y.), 592 ; Coon v. Sy. & Utica Railw., 6 Barb. 231 ; s. c. 1 Selden, 492 ; Hayes v. Western Railw., 3 Cush. 270 ; Sherman v. Roch. & Sy. Railw., 15 Barb. 574; McMillan v. Railroad Co., 20 Barb. 449 ; Honner v. The Illinois Central Railw., 15 111. R. 550; Ryan v. Cumberland Valley Railw., 23 Penn. St. 384 ; King v. Boston & Worcester Railw., 9 Cush. 112; Madison & I. Railw. v. Bacon, 6 Porter (Ind.), 205. The same rule prevails in Virginia. Hawley v. Baltimore & Ohio Railw., 6 Am. Law Reg. 352. - Shaw, Ch. J., 4 Met. 49, 57 ; Keegan v. Western Railw., 4 Selden, 175. But it makes no difference in regard to the liability of the company that the person came into the service voluntarily, to assist the servants of the company in a particular emergency, and was killed by the negligence of some of the ser- *386, 387 §131. INJURIES BY FELLOW-SERVANTS. 521 In Frazier v. The Pennsylvania Railway Company, 3 it was held, that if the company knowingly or carelessly employ a rash or in- competent conductor, whereby the brakeman on the train is in- jured, the company are responsible for the injury; that the act of the agent of the company having charge of employing such agents or servants, and of dismissing them for incompetency, is vants. Degg v. Mid. Railw. Co., 1 H. & N. 773. It is said, McMillan v. Sara- toga & Wash. R. 20 Barb. 449, that the servant, in order to entitle himself to recover for injuries from defective machinery, must prove actual notice of such defects in the master. But culpable negligence is sufficient, undoubtedly, and that is such as, under the circumstances, a prudent man would not be guilty of. Post, note 10, § 170. But if the servant knew of the defects, and did not in- form the master, or if the defects were known to both master and servant, and the servant makes no objection to continue the service, he probably could not recover of the master for any damage in consequence. But if the master know of the defect, and direct the servant to continue the service, in a prescribed man- ner, he is responsible for the consequences. Mellors v. Shaw, 7 Jur. N. S. 845. Where the defendants were joint owners and workers of a coal-mine, and one of their employees was injured by a defect in the machinery, and it appeared that one of the defendants personally interfered in the management of the colliery, and the jury found that defendant guilty of personal negligence, it was held sufficient to implicate both defendants, as they must be presumed to have known that improper machinery was being employed. Ashworth v. Stanwix, 30 L. J. Q. B. 183. But see Wright v. N. Y. Central Railw., 28 Barb. 80. Post, n. 9. And if the master use reasonable precautions and efforts to procure safe and skilful servants, but, without fault, happen to have one in his employ through whose incompetency damage occurs to a fellow-servant, the master is not liable. Tarrant v. Webb, 37 Eng. L. & Eq. 281. In Dynen v. Leach, 26 Law J. N. S., Exch. 221 (April, 1857), it was decided, that where an injury happens to a servant in the use of machinery, in the course of his employment, of the nature of which he is as much aware as his master, and the use of which is the proxi- mate cause of the injury, the servant cannot recover, nor, if death ensues, can his personal representative recover of the master, there being no evidence of any personal negligence on his part, conducing to the injury. Nor does it vary the case that the master has in use in his works an engine, or machine, less safe than some other which is in general use, or that there was another and safer mode of doing the business, which had been discarded by his orders. And in Assop v. Yates, 30 Law Times, 290 (in January, 1858), it was held, that if the servant knew of the exposure, and consented to continue the service, and suffered damage, he could not recover of the master for any negligence which might have contributed to the result. 3 38 Penn. St. 104 ; Wright v. N. Y. Central Railw. Co., 28 Barb. 80 ; Carle v. B. & P. Canal & R. R. Co., 43 Me. R. 269. 522 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. §131. the act of the company ; but the company are not responsible for such injury, unless they were in fault in employing or continu- ing the conductor in their service ; that the character of such conductor for skill and faithfulness may be shown by general reputation. The master is not in general bound to use any special precautions to secure the servant from injury in regard to matters equally within the knowledge of both. 4 But the master is liable for all injuries accruing to his servants from his own personal negligence ; and this may consist in personal in- terference in the particular matter causing the injury, or by negligently retaining incompetent servants, producing the in- jury. 5 But a railway company is liable in damages for an injury resulting to any person lawfully using its road, from its neglect to introduce any improvement in its machinery or apparatus, which is known to have been tested, and found materially to contribute to safety, and the adoption of which is within its power so as to be reasonably practicable. 6 But in another case, 7 in an action by a servant against his master for injuries sus- tained by the explosion of a steam-boiler used in his business, the plaintiff introduced evidence without objection, that there was no such fusible safety-plug on the boiler as was required by statute ; and the presiding judge excluded evidence of a custom among engineers not to use such a plug, and instructed the jury that if the defendant knowingly used the boiler without the plug, and the want of it caused the accident, the plaintiff was entitled to recover, and refused to instruct them that if the defendant used all the appliances for safety that were ordinarily used in such establishments, he was not liable, although he did not use the fusible plug required by statute, and it was held the defendant had no ground of exception. It is here declared by the court that ordinary care must be measured by the character and risks and exposures of the business, and the degree of care required is higher when life or limb is endangered, or a large amount of property is involved, than in other cases. 8 4 Seymour v. Maddox, 16 Q. B. 326. 5 Ormond v. Holland, 1 El. Bl. & El. 102. 6 Smith v. N. Y. & Harlem Railw. Co., 19 N. Y. R. 127. 7 Cayzer v. Taylor, 10 Gray, 274. 8 Post, common carriers of passengers. See also Briggs v. Taylor, 28 Vt. R. 80, 184. § 131. INJURIES BY FELLOW-SERVANTS. 523 3. But the company are not liable because there was a defi- ciency of help at that point. 9 And a neglect in the company to fence their road, whereby the engine was thrown from the track, by coming in contact with cattle thus enabled to come upon the road, and a servant of the company so injured that he died, will not render them liable. 10 4. But it has been questioned whether the rule has any just application to servants in different grades, who are subordinated the one to the other. 11 But as the ground upon which the rule is * attempted to be maintained is one of policy chiefly, that it is better to throw the hazard upon those in whose power it is to guard against it, it seems very questionable how far any such distinction is maintainable. It has been attempted in a good many cases, but does not seem to have met with favor. 5. And the rule itself has been denied in some cases, in this country, after very elaborate consideration. 12 And it has been 9 Skip v. Eastern Counties Railw., 24 Eng. L. & Eq. 396 ; Hayes v. Western Railw., 3 Cush. 270. 10 Langlois v. Buf. & Roch. R. 19 Barb. 364. 11 Gardiner, J., in Coon v. Sy. & Utica Railroad Co., 1 Seld. 492 ; s. c. 6 Barb. 231. But in Gillshannon v. Stony Brook Railw., 10 Cush. 228, it was held to make no difference that the servants were not in a common employment. This was the case of a laborer riding upon a gravel train to the place of his em- ployment, and injured by the negligence of those in charge of the train. 12 Little Miami Railw. v. Stevens, 20 Ohio R. 415 ; C. C. & C. Railroad Co. v. Keary, 3 Ohio St. 202. These cases are placed mainly upon the ground of the person injured being in a subordinate position. It was held the rule did not apply to day laborers upon a railway, who were not under any obligation to renew their work from day to day, where one, after completing his day's work, was injured through the negligence of the conductor of one of the company's trains, upon which he was returning home, free of charge, but as part of the contract upon which he worked. Russell v. Hudson River R., 5 Duer, 39. And in Whaalan v. M. R. & Lake Erie Railw., 8 Ohio St. 249, it was held that where one of the employees of a railway, engaged in making repairs upon its track, was injured by the neglect of a foreman upon one of the trains, there was no such subordination in regard to their duty as to justify any departure from the general rule of excusing the master. See also Indianapolis Railw. v. Love, 10 Ind. R. 554 ; Same v. Klein, 11 Ind. R. 38. In Hard, Adm'r. v. Vt. & Canada Railw., 32 Vt. R. 473, the plaintiff's intestate, who was an engineer on the defendant's road, was killed by the explosion of a locomotive engine which he was running, which occurred by the neglect of the company's master-mechanic in not keeping the machine in repair. It was his duty to superintend and direct *388 524 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 131. held not to apply to the case of slaves, 13 especially where the em- ployer stipulated not to employ them about the engines and cars, unless for necessary purposes of carrying to places where their services were needed, and they were carried beyond that point, and killed in jumping from the cars. 14 The court of Sessions in Scotland, too, seems to have dissented from the English rule upon this subject. 15 the repairs upon the engines. The directors of the company were not guilty of any neglect in furnishing the road, in the first instance, with suitable machinery and competent employees, and they were ignorant of any defect in this engine. The company were held not responsible for the death of plaintiff's intestate, on the ground that under the circumstances the injury must be considered as oc- curring from the neglect of a fellow-servant, employed in the same common business. 13 Scudder v. "YVoodbridge, 1 Kelly, 195. 14 Duncan v. Railroad Co., 2 Richardson, 613. 15 Dixon v. Ranken, 1 Am. Railw. C. 569. The remarks of Lord Cochburn are pointed and pertinent. " The English decisions certainly seem to determine that in England, where a person is injured by the culpable negligence of a ser- vant, that servant's master is liable in reparation, provided the injured person was one of the public, but that he is not responsible if the person so injured happened to be a fellow-workman of the delincpient servant. It is said, as an illustration of this, that if a coachman kills a stranger by improper driving, the employer of the coachman is liable, but that he is not liable if the coachman only kills the footman. If this be the law of England, I speak of it with all due respect, it most certainly is not the law of Scotland. I defy any industry to produce a single decision or dictum, or institutional indication, or any trace of any authority to this effect, or of this tendency, from the whole range of our law. If any such idea exists in our system, it has, as yet, lurked undetected. It has never been directly condemned, because it has never been stated." After citing numerous cases in their Reports, where the question was involved but not raised, his lordship continues : " The new rule seemed to be recommended to us, not only on account of the respect due to the foreign tribunal, — the weight of which we all acknowledge, — but also on account of its own inherent justice. This last recommendation fails with me, because I think that the justice of the thing is exactly in the opposite direction. I have rarely come upon any prin- ciple that seems less reconcilable with legal reason. I can conceive some reasoning for exempting the employer from liability altogether, but not one for exempting him only when those who act for him injure one of themselves. It rather seems to me that these are the very persons who have the strongest claim upon him for reparation, because they incur danger on his account, and certainly are not understood by our law to come under any engagement to take these risks on themselves." But the English cases certainly do regard the servant as impliedly stipulating § 131. INJURIES BY FELLOW-SERVANTS. 525 * 6. But it has been held, that there is no implied obligation on the part of a ship-owner towards a seaman, who agrees to to run these risks when he enters into the service. The remarks of the learned judge above ought not perhaps to be regarded as of any inherent weight here, beyond the mere force of the argument, and it is always to be regretted that any difference of decision should exist among the tribunals of the different states upon a subject of so much practical moment. The great preponderance of authority in this country is undoubtedly in favor of the English rule ; but we could not forbear to state, that we have always had similar difficulties to those stated by his lordship, in regard to the justice or policy of the rule. When these cases go by appeal to the House of Lords, they are determined according to the rule of die Scottish law. Marshall v. Stewart, 33 Eng. L. & Eq. 1. Opinion of Cranicorth, Chancellor. But see the very lucid and convincing argument of Shaw, Ch. J., in Farwell v. Boston & Wor. Railw., 4 Met. 49, 56 ; s. c. 1 Am. R. C. 339 ; and the most in- genious attempt at reductio ad absurdum upon the subject by Lord Abinger, Ch. B., in Priestly v. Fowler, 3 M. & W. 1, 6, 7, where the learned Ch. B., among other ingenious speculations, supposes some fearful consequences might follow if the master were to be held liable for the negligence of the chambermaid in put- ting the servant into wet sheets ! If a man should receive damage in any way by his own foolhardiness, even where a fellow-servant was concerned in producing the result, he could not recover of any one upon the most obvious grounds. Some discretion and re- serve are no doubt requisite in the application of the rule of the servant's right to recover for the default of his fellow-servant, but whether the difficulty of its application will fairly justify its abandonment, would seem somewhat question- able, if the thing were res Integra, which it certainly is not, either in the English or American law. In a recent English case, in the Court of Exchequer, January, 1856, 36 Eng. L. & Eq. 486, Wiggett v. Fox et al., the court adhere to the rule laid down in former English cases upon this subject, reiterating the same reasons, with the qualification, that if there were any reason for holding that the persons whose act caused the injury were not persons of ordinary skill and care, the case would be different, there being an implied obligation upon the master not to employ such persons. With this qualification there seems to be no serious objection to the English rule of law upon this subject. Bassett v. Norwich & Nashua Railw., Superior Court of Conn. 19 Law Rep. 551. In a case in the Court of Sessions in Scotland, so late as January, 1857, the court repelled a plea, founded on the claim that the master is not liable to a servant for the negligence of a fellow-servant. The Lord Justice Clerk took occasion to remark, that the master's liability rested upon the broad prin- ciple, that an employer being liable to third parties for injuries caused by his servants, a fortiori he is liable to the servant for injury caused by another ser- vant. *389 526 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 131. serve * on board, that the ship is seaworthy, and in the absence of any express warranty to that effect, or of any knowledge of the defect, or any personal blame on the part of the ship-owner, the seaman cannot maintain an action, by reason of the ship be- coming leaky, and his being obliged to undergo extra labor. 16 7. But a carpenter employed by a railway company to build one of their bridges, and who took passage in their cars, by their directions, to go to a certain point for the purpose of loading timber to be used in building the bridge, and who was injured But for injury to servants through obvious or known defects of machinery in the use of the master, the cases all agree that he is liable. McGatrick v. Wa- son, 4 Ohio St. 566. In the Exchequer Chamber, so late as May, 1857, in Roberts v. Smith, 29 Law Times, 169, it was held, that where the master directs the conduct of the servant, he is liable for any injury resulting therefrom for the other servants. See also Weyant v. N. Y. & Harlem R. 3 Duer, 360. It has been held in some cases, Scudder v. Woodbridge, 1 Ga. 195, that the rule that the master is not liable for an injury to one servant, inflicted by the want of care or skill in a fellow-servant, does not apply to the case of slaves, on account of their want of freedom in action and choice in continuing the ser- vice when it becomes perilous. But if an exception could be founded upon any such basis, it would extend to all the subordinate relations of service, as has some- times been attempted. But where the injury resulted from the habitual negli- gence of the engineer of a boat, whereby the slaves perished, by the bursting of a boiler, the master of the boat is liable, and the same rule applies to the case of freemen. Walker v. Boiling, 22 Alab. R. 294 ; Cook v. Parham, 24 Alab. R. 21. The court here were equally divided upon the question, whether the general rule upon this subject applied to the case of a slave hired on a steamboat. But this court subsequently held, on general principles, that where one em- ploys a mechanic to repair a building which is in a ruinous state, but this is not known to the workmen and not disclosed to the contractor, the employer is lia- ble for all injury sustained by the contractor or his subordinates, being slaves in this case, by reason of the peril to which they are thus fraudulently exposed, but that he will not be held so liable if he inform the contractor of the peril to which he is exposed. Perry v. Marsh, 25 Alab. R. 659. 16 Couch v. Steel, 24 Eng. L. & Eq. 7 7. But if the master might have known the exposure of the servant, but for his own want of ordinary care, as in the use of a defective locomotive engine, which exploded and injured the servant, through defective construction, the master is liable for the injury. Noyes v. Smith, 28 Vt. R. 59. But where the danger is known to the servant and not communicated to the superior, or master, he cannot recover for any injury he may sustain in consequence. McMillan v. Saratoga & Wash. R. 20 Barb. 449 ; Hubgh v. N. O. & C. Railw., 6 Louis. An. 495. *390 § 131. INJURIES BY FELLOW-SERVANTS. 527 in the course of the passage by the negligent conduct of the train, is entitled to recover of the company, the plaintiff having no particular connection with the conduct of the business in which he was injured. 17 8. The English courts still maintain their former stand, that all the servants of the same company engaged in carrying for- ward the common enterprise, although in different departments, widely separated, or strictly subordinated to others, are to be re- garded as fellow-servants, bound by the terms of their employ- ment to run the hazard of any negligence or wrong-doing which may be committed by any of the number, so far as it operates to their detriment. This is strikingly illustrated in a recent case in the Common Pleas, ls where it was held that one employed to pick up stones from off the defendant's line, and who, while returning in the evening after his work was over in a train driven by the defendant's servants, was injured by a col- lision, caused by the negligence of those who had charge of the train, it being one of the terms of the contract of hiring that he should return in the defendant's train, could not recover dam- ages of the company, as he and the person guilty of the negligence resulting in the injury were fellow-servants, engaged in a com- mon employment, within the meaning of the rtlle of law applica- ble to the case. 9. This whole question is very elaborately reviewed in a recent case in Kentucky, 19 which we shall here repeat, together with our own comments at the time upon the several propositions embraced in the opinion, at the risk of some repetition, perhaps. Where an employee upon a railway is injured by the negli- gence of the engineer of the company, and is himself guilty only of such neglect and want of care as would not have exposed him 17 Gillenwater v. Mad. & Ind. Railw. 5 Ind. R. 340. And where laborers upon a railway were transported to and from their labor and meals upon the gravel trains of the company, which they were employed in loading and unload- ing, but had no agency in managing, and in such transportation, by the gross negligence and unskilfulness of the engineer were injured, it was held the com- pany were liable. Fitzpatrick v. New Albany and Salem Railw., 7 Porter (Ind.), 436. But not where the servant is in fault in attempting to get upon the train when in motion. Timmons v. The Central Ohio Railw., 6 Ohio St. 105. 18 Tunney v. Midland Railw. Co., 12 Jur. N. S. 691. 18 Louisville & Nashville Railw. v. Collins, 5 Am. Law Reg. N. S. 265. 528 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 131. to the injury but for the gross neglect of the engineer, and when the engineer might with ordinary care have avoided the injury, he is not precluded from maintining his action. What is gross neglect in the engineer may be determined by the court, as a question of law, where there is no controversy in regard to the facts. In regard to those acts of a corporation which require care, diligence, and judgment, and which it performs through the instrumentality of general superintending agents, the corporation itself is to be regarded as always present supervising the action of its agents. The rule of law, that the master is not responsible to one of his servants for an injury inflicted through the neglect of a fel- low-servant, is not adopted, to the full extent of the English de- cisions, in the state of Kentucky. The rule is there regarded as anomalous, inconsistent with principle, analogy, and public policy, and unsupported by any good or consistent reason. • In regard to all servants of the company acting in a subordi- nate sphere, the one class to another, and receiving injuries while in the performance of duties, under the command of a superior, whose authority they have no right to disobey or disregard, it is the same precisely as if the injury were inflicted by the act of the company ; and if there is any want of care and skill in the superior, such as his position and duty reasonably demand, the company are responsible. In such cases there is no implied undertaking on the part of the servant to risk the consequences of the misconduct of the agent of the company under whose authority he acted, and through whose negligence he received the injury. Servants so situated, in distinct grades of superiority and sub- ordination, are not to be considered as " fellow-servants," or " in the same service " ; but rather in the light of strangers to each other's duties and responsibilities ; and the subordinate may recover of the company for any injury sustained by reason of the ordinary neglect of the superior. But if the subordinate is himself guilty of any want of ordi- nary care, whereby he is more exposed to the injury, he cannot recover, unless the superior was guilty of wilful misconduct or § 131. INJURIES BY FELLOW-SERVANTS. 529 gross neglect, but for which he might have avoided inflicting the injury, notwithstanding the negligence of the other party. Where, therefore, an engineer, while upon his engine, ordered a common laborer to do some needed work under the engine, in fastening bolts or screws belonging to it ; and such workman, while lying upon his back in the performance of the service, had both his legs cut off, by the movement of the engine forward and backward, through the gross neglect or wilful misconduct of such engineer, the company arc responsible for the injury, not- withstanding there might have been some want of ordinary care on the part of the subordinate, contributing to some extent to the injury, but not necessitating it, except through the gross misconduct of the superior. Per Robertson, C. J. — We do not consider that the rule, exempt- ing the company from responsibility for injuries inflicted upon their servants through the want of ordinary care in other servants of the company, extends beyond those who are strictly " fellow- servants " in the same grade of employment, and where one is not subject to the order or control of the others. Beyond this the company is responsible for the consequences of the misconduct of superiors towards inferiors in its service, the same as towards strangers. 20 40 We have presented a very extended syllabus of the foregoing ease, em- bracing all the points upon which the opinion of the court is given, without regard to their being directly and necessarily involved in the decision of the cause. And notwithstanding the avowed willingness of the learned judge to disre- gard the general current of authority upon the point, and the apparent spirit of freedom with which he deals with the decisions in other states and countries, — notwithstanding all this, and more that might be fairly said as to the fearlessness and disregard of self with which the opinion abounds, which is not altogether common in dealing with the opinions of such men as Lord Abinger and Chief Justice Shaw, and a host of others scarcely less eminent in their field of service; notwithstanding all this, which has rather surprised us, we must confess, at the same time that we could not but regard it as a refreshing exception to the pro- verbial subserviency of opinion to precedent and analogy, we have nevertheless felt compelled to the conclusion that the opinion is altogether and entirely sound in its principles, and maintained with very uncommon ability in its logic as well as its illustrations, both of which seem altogether unexceptionable. But we must warn those members of the profession who are not altogether aware of the extent of the decisions in the opposite direction, that they embrace VOL. i. 34 530 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 131. 10. The question is again reviewed by the same learned judge who gave the widely admired opinion in Farwell v. Boston & a very large number of the best-considered English cases, and an equal number, almost, in the American states, including all, as far as we know, with the ex- ception of Ohio, and Georgia, and now Kentucky. And the decisions in these latter states are all attempted to be placed upon peculiar grounds, thereby vir- tually confessing the soundness of the general rule, that one cannot recover of his employer for an injury inflicted through the want of care in a fellow-servant, employed in the same department of the master's business, and under the same general control. This is declared by the learned judge in the case last cited. The opinion in the case would have been far more satisfactory if the learned judge could have devoted more labor and time to the matter. If a careful re- view of the preceding cases, with the reasoning of the judges could have been presented in the very carefully prepared opinion, it could not have failed to be more valuable. Discussion of a broad principle is much less expensive to the author, and far less satisfactory, as a general thing, to the profession, than a careful review of the cases. We should not expect our readers would here listen to such an attempt on our part, since it must occupy considerable space, and would be merely profes- sional, instead of being clothed with the weight of judicial authority. But we have noticed with gratification, more for the justice of the view than because we had before contended for the same, that the learned judge declares most unequivocally, in the principal case, that the corporation is to be regarded as constructively present in all acts performed by its general agents within the 6Cope of their authority, i. e. within the range of their ordinary employment. The consequences of mistake or misapprehension, upon this point, have led many courts into conclusions greatly at variance with the common instincts of reason and humanity, and have tended to interpose an unwarrantable shield between the conduct of railway employees and the just responsibility of the company. We trust that the reasonableness and justice of this construction will at no distant day induce its universal adoption. See ante, § 130, pi. 6, 7, 8, 9, and notes, and cases cited. In regard to the leading point involved in the principal case, how far a servant is entitled to recover of the master for an injury inflicted by the negligence or want of skill of a fellow-servant, the doctrine of exemption was first established in the Court of Exchequer, in Priestly v. Fowler, 3 M. & W. 1, which was decided at Michaelmas Term, 1837. The same rule was adopted in this country by the Supreme Judicial Court of Massachusetts, in Farwell v. The Boston & Worcester Railroad Corporation, 4 Met. 49, at the March Term, 1842, supported by one of the ablest and most unexceptionable opinions ever delivered from the American Bench, — an opinion which has commanded the admiration of the entire profes- sion, both Bench and Bar, in England as well as in America; and which has been more extensively adopted and formally incorporated into the opinions of the English courts than perhaps any other opinion of an American judge. This opinion was in fact preceded by that of Murray v. The South Carolina Railw. § 131. INJURIES BY FELLOW-SERVANTS. 531 Maine Railway, in a later case, 21 and the following propositions maintained. A carpenter employed by the day by a railroad Co., 1 McMullan, 385, in the same direction ; but the former has been regarded as the leading American case. These leading opinions, in the different countries, have been followed by a multitude of cases reaching down to the present time, most of them occupied in the discussion of what were claimed to be exceptional cases. In England, we may, among a multitude of others, refer to Hutchinson v. York, Newcastle & Berwick Railw., 5 Exch. 343 ; Wigmore v. Jay, Id. 354 ; Skip v. Eastern Coun- ties Railw., 24 Eng. L. & Eq. 396 ; Degg v. Midland Railw., 1 Hurlst. & N. 773 ; Tarrant v. Webb, 37 Eng. L. & Eq. 281 ; Mellors v. Shaw, 7 Jur. N. S. 845; Seymour v. Maddox, 16, Q. B. 326; Ormond v. Holland, 1 El., Bl. & Ellis, 102. In the American states the decisions are considerably numerous where the general principle of the foregoing decisions has been acted upon, or recog- nized, but we shall not refer to more than will be requisite to show how far the rule prevails in different states. It is adopted in Brown v. Maxwell, 6 Hill (N. Y.), 592; Coon v. Syracuse & Utica Railw., 6 Barb. 231 ; s. c. 1 Selden, 492, and numerous other New- York cases cited, ante, § 131. See also Honner v. 111. Central Railw., 15 111. R. 550 ; Ryan v. Cumberland Valley Railw., 23 Penn. St. 384 ; Madison & Indianapolis Railw. v. Bacon, 6 Porter (Ind.), 205; Hawley v. Baltimore & Ohio Railw., 6 Am. Law Reg. 352; Frazier v. Pennsylvania Railw. Co., 38 Penn. St. 104; Wright v. New York Central Railw., 28 Barb. 80 ; Carle v. B. & P. Canal & Railw. Co., 43 Maine R. 269 ; Noyes v. Smith, 28 Vt. R. 59; Indianapolis Railw. v. Love, 10 Indiana R. 554; Same v. Klein, 11 Id. 38. The general principle is adopted in all the other states where the question has arisen ; for although in Ohio, in the cases of Little Miami Railw. Co. v. Stevens, 20 Ohio R. 415, and C. C. & C. Railw. Co. v. Keary, 3 Ohio St. 201, the com- panies are held responsible for the injury, the decisions are placed upon the ground, that the persons injured were in subordinate positions. And in Scudder v. Wood bridge, 1 Kelly, 195, it was held the rule did not excuse the master for injury thus caused to slaves, mainly upon the same ground of their dependent and subordinate positions. And the principal case is placed upon the same ground. And in the more recent case of Whaalan v. Mad R. & Lake Erie Railw. Co., 8 Ohio, N. S. 249, it was held, that where one of the trackmen was injured by neglect of the fireman upon one of the trains, there was no such subordination of position as to take the case out of the general rule, and the case was decided in favor of the company ; thus maintaining the soundness of the general rule in that state by its latest decision. It is safe, therefore, to state, that all the cases, both English and American, maintain the general rule to the extent of those who are strictly " fellow-ser- vants " in the same department of service. And where this is not the fact, but the employees are so far removed from each other that the one is bound to obey 21 Seaver v. Boston & M. Railw. Co., 14 Gray, 466. 582 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 131. corporation to work on the line of their road, and carried on the cars to the place of such work without paying fare, cannot main- tain an action against the corporation for injuries received while being so carried, by the negligence of the engineer employed by them for that service, or by a hidden defect in the axle, the failure to discover which, if discoverable, was occasioned by the negli- gence of servants of the corporation, whose duty it was to examine and keep in repair the cars, engines, and axles. In such a case, if the company exercised reasonable care in providing and using the machinery, in the use of which the plaintiff was so injured, they are not responsible for the injury. the directions of the other, so that the superior may be fairly regarded as rep- resenting the master, we think it more consonant with reason and justice to treat the matter as not coming within the principle of the rule. Tin's is so de- clared by Gardiner, J., in Coon v. Syracuse & Utica Railroad Co., 1 Selden, 492. But this qualification is denied by Shaw, C. J., in Farwell v. Boston & Worcester Railw., 4 Met. 49, 60, 61, unless the departments of service are so far independ- ent as to have no privity with each other, not being under the control of a com- mon master. And it was so decided in Gillshannon v. Stony Brook Railw. Co., 10 Cush. '228. And it seems finally to be settled upon authority, that it is suf- ficient to bring the case within the rule, that the servants are employed in the same common service, as in running a railway, or working a mine. Wright v. New York Central Railw., 25 N. Y. Ct. App. 562, 564, by Allen, J. The ques- tion is whether they are under the same general control. Abraham v. Reynolds, 5 H. & N. 142; Hard, Adm'r. v. Vermont & Canada Railroad, 32 Vt. R. 473. And there is no question that the master is responsible for any want of skill or care in employing competent and trustworthy servants, and in sufficient num- bers ; and in furnishing safe and suitable machinery for the work in hand, unless the servants, knowing, or having the means of knowing, of the deficiency in fur- nishing proper help or machinery, consent to continue in the employment. And the neglect or want of skill of the master's general agent employed in procuring help and machinery, is the act of the master ; Hard v. Vermont & Canada Railw. Co., supra; Wiggett v. Fox, 36 Eng. L. & Eq. 486 ; Noyes v. Smith, 28 Vt. R. 59. Indeed this exception is recognized in most of the preceding cases. Many of the late cases upon the question have turned upon this point, the general rule having been regarded as settled beyond question for many years. We are not disposed to question the extent of the exceptions to the general rule ; and pos- sibly any greater extension in that direction might essentially impair the general benefit to be derived from it. But we would be content to treat all the subordi- nates who were under the control of a superior as entitled to hold such superior as representing the master, and the master as responsible for his incompetency or misconduct. We should regard this as a more salutary rule, upon the whole, than the present one, but the general current of authority seems greatly in the opposite direction. §131a. INJURIES BY FELLOW-SERVANTS. 533 § 131 a. The following points, decided by a court of ability, and the opinion in which the several propositions were very care- fully illustrated, with our own comments upon them, as pub- lished in the American Law Register, 1 appear to us proper to be repeated here, as the clearest exposition of our own views upon the questions involved which we could give. 1. Where a passenger is injured on a rail- way the prima facie presumption is, that it resulted from the want of due care on the part of the company. 2. But, nevertheless, it is competent to prove the damage occurred without their fault. 3. One who rides upon a free, pass, or in the baggage-car, is not thereby deprived of his remedy against the company for in- juries received through their want of due care, provided he was at the time a pas- senger and without fault on his own part. The following propositions were declared by the Supreme Court of Missouri, in the case of Hannibal and St. Joseph Rail- road Company v. Hattie Higgins, by Eliza Higgins, her guar- dian : 1 — 1. The statute of Missouri giving a remedy to the representa- tives of a passenger killed upon a railway train, goes upon the same, principle which before obtained in regard to injuries to passengers, that such injury or death primd facie results from want of due care in the company. 2. The presumption is not conclusive under the statute, but may be rebutted by evidence of the cause of the injury. One who had been in the employment of the company as an engineer and brakeman, until his train was discontinued a few days pre- vious, and who had not been settled with or discharged, although not actually under pay at the time, and who signalled the train to take him up, and who took his seat in the baggage-car with the other employees of the company, and paid no fare and was not expected to, although at the time in pursuit of other employ- ment, cannot be considered a passenger. If he would secure the immunities and rights of a passenger, he should have paid his fare and taken a seat in the passenger-car. 3. It will not deprive of his remedy a passenger who comes upon the train in that character, and is so received, that he is allowed as matter of courtesy to pass free, or to ride with the employees of the road in the baggage-car. But a passenger who 1 Vol. V.N. S., 715-721. 534 LIABILITY FOE ACTS OF AGENTS AND SUB-AGENTS. § 131 leaves the passenger carriages to go upon the platforms or into the baggage-car, unless compelled to do so for want of proper accommodations in the passenger carriages, or else by permission of the conductor of the train, must be regarded as depriving himself of the ordinary remedies against the company for injuries received, unless upon proof that his change of position did not conduce to the injury. 2 2 Holmes, J. — The plaintiff below, an infant and only child of Thomas G. Higgins, who was killed while riding in a baggage-car on the Hannibal and St. Joseph Railroad, on the 16th day of September, 1861, brings this suit; the wid- ow having failed to sue within six months to recover the $5,000, which are given by the second section of the act concerning damages (Rev. Stat. 1855, p. 64 7), where any passenger shall die from an injury resulting from or occa- sioned by any defect or insufficiency in any railroad. The petition is evidently framed upon that act, though the statute is not named or referred to by any express words. It contained two counts: one founded upon the second section, and the other upon the third section of the act. The verdict was for the plaintiff upon the first count, and for the defendant upon the second count; and the damages were assessed at % 5,000. The de- fendant's motion for a new trial was overruled. The case came up by appeal, and stands here upon the first count only. The clause of the act on which this first count is founded relates exclusively to passengers, and to the cases of injury and death occasioned by 'some defect or insufficiency in the railroad. This statute makes the mere fact of an injury and death resulting from a cause of this nature, a prima facie case of negligence and liability on the part of the defendant, as a presumption of law. It is not a conclusive presumption, but disputable by proof that such defect or insufficiency was not the result of negligence, nor does it preclude ' any other defence of a different nature. The act is to be interpreted and construed with reference to the state of the law as it stood before its passage. By the general principles of law, which were applicable to common carriers of passengers and to persons standing in that relation, the fact of an injury to a passenger, occasioned by a defective railroad car or coach, or by a defect in any part of the machinery, makes a prima facie case of negligence against the defendant sufficient to shift the burden of proof: and by that law carriers of passengers were held respon- sible for the utmost degree of care and diligence, and were liable for the slight- est neglect. This act is evidently based upon the same principles : it is confined by its terms strictly to passengers and to injuries arising from cases of that pe- culiar nature only ; and it must receive a construction in accordance with these principles. Viewed in this light, it is clear that the intent of this clause of the act was to provide greater security for the lives and safety of the passengers as such, and to enable the representatives of a deceased passenger to pursue the §131 a. INJURIES BY FELLOW-SERVANTS. 535 remedy given by the act ; and no other class of persons is intended within ita purview. The first question here presented is, whether the deceased person was a pas- senger within the meaning of the act. The evidence shows he had been in the employ of the company as an engineer and brakeman for several years, with some intermission ; that for several months previous to the accident, and down to the 4th day of September, 1861, when his train was stopped by guerillas, he had been continually on duty as a brakeman ; and that, about that time, the in- terruptions occasioned by actual hostilities in that neighborhood had caused the train on which he was employed to cease running for a time ; and that for sev- eral days before the day of his death he had not been in actual service upon any train, but his name still remained on the roll of the company's employees as before. He had never been paid off and discharged ; his account was unset- tled ; there were arrears still due him at the time of his decease. It appears brakemen were paid monthly, but at the rate of so much per day for as many days as they actually worked during the month. These facts would all go to show that his employment still continued, and that his relations to the company was still that of an employee. On the morn- ing of the accident he signalled the train to stop, and take him up where he was ; he took his place on the baggage-car among other employees ; he appears to have treated himself as an employee, and was treated by the conductor as an employee who was passing from one point to another on the road in the usual manner. He engaged no passage, took no seat in any passenger-car, paid no fare, and evidently did not expect to pay any ; and none was exacted from him. He did not claim to be a passenger, nor was he treated otherwise than as an employee by the conductor. Upon a careful examination of the evidence on this point, we think it tended to prove that he was an employee, and not a passen- ger within the purview of this act, and that under all the circumstances the con- ductor had a right to presume he was travelling as an employee of the com- pany merely. Such being the relation of the parties, the mere circumstances that he had been off duty as a brakeman for some days, or that he was then passing on his own private errand, and not immediately engaged on the business of the com- pany or in running that very train, cannot be allowed to make any difference : Gilshannon v. Stony Brook Railw. Co., 10 Cush. 228. The conductor, knowing nim only as an employee, was not bound to inquire into his particular errand ; and though informed, by a casual conversation with him in the baggage-car, that he was looking for some temporary employment so as not to lose time, he still might be justified as treating him as an employee who had the privilege of free passage on the train as such. Under such circumstances it was his business, if he claimed to be a passenger, to engage or take a seat in the passenger-coach, or at least in some way to make it known to the conductor that he claimed to be travelling in the character of a passenger. Where a director was invited by the president to pass over the road as a pas- senger, without paying fare ; Philadelphia and Reading Railroad Co. v. Derby, 14 How. (U. S.) 468 ; where a man was taken up by the engineer of a gravel- 536 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. §131 a. train, to be carried as a passenger, paying fare as the practice had been, and was allowed to go from the tender to the gravel-car : Lawrenceburg & Upper Mississippi Railroad Co. i\ Montgomery, 7 Ind. R. 474 ; and where a man who had been a work-hand on the road, but had left the service of the company two weeks before the accident, because they did not pay him, got upon the train to be carried as a passenger: Ohio and Mississippi Railroad Co. v. Muhlins, 30 111. R. 9 ; and where a house-carpenter was employed to build a bridge, and was sent by the company on their cars to another place to assist in loading timber for the bridge : Gillenwater v. Madison and Indiana Railroad Co., 5 Ind. R. 340 ; the injured person was held to be clothed with all the right and character of a passenger and a stranger ; and that he was not to be considered as standing on the same footing as ordinary employees and fellow-servants of the company. If this party had been invited to go in the train as passenger, or had taken a seat in the passenger-car, or had been taken on board the train in the character of a passenger, and the conductor had merely waived his right to demand fare as an act of liberality or courtesy, and had then allowed him to pass into the baggage-car to ride there, the case would have been quite different, and might have fallen within the reasoning and the principles of these adjudicated cases. The benefit of this act was plainly intended for those only who stand, strictly speaking, in the relation of passengers, and between whom and the carrier there exists the privity of contract, with or without fare actually paid, and the pecu- liar responsibilities which are implied in that relation and depend wholly upon it. Where the relation is properly that of master and servant only, this partic- ular clause of the act has no application. We think this matter was not fairly nor correctly laid before the jury by the instructions of the court below. Again, even if the deceased party would be considered as having been in any proper sense a passenger, there would not be the least doubt that he himself neglected all precautions and voluntarily placed himself in a position which he knew to be the most dangerous on the train for passengers. A baggage-car is certainly no place for a passenger, and as such the proof shows he had no busi- ness to be there at all. We are aware that it had been held in some cases, that if a passenger, who is travelling as such, is allowed to go into the baggage-car or into a part of the baggage-car which is used as a post-office, where passen- gers are sometimes permitted to be, as in Carrol v. New York and New Haven Railroad Co , 1 Duer, 571, and while there an accident and injury occur, by reason of negligence on the part of the company, and under such circumstances that his being in that place cannot be said to have materially contributed to produce the accident or injury, the defendant would still be held liable. In many cases of this kind, it might be difficult to determine whose negligence had been the real cause of the injury. But any question of this nature is removed from our consideration in thi* case by force of another statute which finds an apt and just application here. By the 64th section of the Act concerning Railroad Associations, Rev. Stat. 1855, p. 430, approved one day only after the act in question, it is expressly pro- vided as follows : — " In case any passenger on any railroad shall be injured while on the platform §131a. INJURIES BY FELLOW-SERVANTS. 537 of a car, or in any baggage, wood, or freight-car, in violation of the printed reg- ulations of the company, posted up at the time in a conspicuous place inside of its passenger-cars, then in the train, such company shall not be liable for the in- jury. Provided, said company at the time furnish room inside its passenger- cars sufficient for the proper accommodation of its passengers." This provision is by the 57th section of the same act made applicable to all existing railroads in this State : Ibid., p. 43S. Under this section the exemption of the company is made to depend upon a violation by the passenger of the printed regulation hung up in the passenger-cars only. They are not required to be posted up in a baggage-car : it is presumed that no j)assenger -will ever be found there. There was evidence in the case tending to prove that the provis- ion of the statute had been complied with on the part of the defendant ; but the printed forms used had been changed since that time, and no copy of the for- mer cards had been found, and on proof made of the loss of them secondary evidence was offered to prove their contents. This evidence was excluded as irrelevant and having no bearing upon the case. In the view we have taken of this statute the evidence was certainly very material and should have been admitted. It is true such notice would have given this party no information, for the reason he did not go in the passenger-car ; the evidence tended to show that he was in tact well acquainted with these regulations; and this consideration, so far from weighing anything in his favor, would rather tend to strengthen the inference that he was not a passenger at all. This statute proceeds again upon the general principles of law in relation to contributory negligence, and it sup- poses that a passenger who has had the warning of this notice, and yet has placed himself in a situation so dangerous as a baggage-car, is to be considered as contributing by his own negligence to produce the injury, and therefore that the company is not to be held liable in such cases. We think that the first and second instructions asked for by defendant should have been given, and that the fifth, sixth, and seventh instructions asked for by plaintiff should have been refused. It is not deemed necessary more particu- larly to notice the other instructions. The judgment is reversed and the cause remanded. The other judges concur. The foregoing opinion seems to us to present several interesting practical points, in a very judicious and sensible light. It is sometimes difficult to deter- mine, with exact precision, when a person ceases to be an employee of the road and becomes a passenger. There is perhaps no fairer test than the one pre- sented in this case, to allow his own claim and conduct at the time, and the ac- quiescence of the company, to determine that question. At the time, one who has recently been in the employment of the company has a motive to claim the privileges of the employment, by passing without the payment of fare. And if he claims the privilege, and it is acceded to by the officers of the company, there is great injustice in allowing the person at the same time to hold the com- pany up to the higher responsibility which it owes to passengers, from whom it derives revenue. It should therefore be made to appear, that one who passes in the character of an employee of the road was really a passenger, before he 538 LIABILITY FOE ACTS OF AGENTS AND SUB-AGENTS. § 132. *SECTION IV. Injuries by defects in Highways caused by Company's Works. 1 . Liable for injuries caused by leaving streets | 7. Bound to keep highways in repair. in insecure condition. I 8. Municipalities not responsible for injuries 2. Municipalities liable primarily to travellers i by such grant, suffering injury. | 9. Canal company not excused from main- 3. They may recover indem n ity of the company, 4. Towns liable to indictment. Company lia- ble to mandamus or action. 5. Construction of a grant to use streets of a city. 6. Such grant does not give the public any right to use the tracks. taining farm accommodations by rail- way interference. 10 Railway track crossing private way. 11. One being wrong-doer in opening compa- ny's gates cannot recover. § 132. 1. Where a public company has the right, by law, of taking up the pavement of the street, the workmen they employ are bound to use such care and caution in doing the work as will protect the king's subjects, themselves using reasonable care, from injury. And if they so lay the stones as to give such an appearance of security as would induce a careful person, using reasonable caution, to tread upon them, as safe, when in fact they are not so, the company will be answerable in damages for any injury such person may sustain in consequence. 1 And in a more recent case, 2 a canal and railway company, as early as the 28 Geo. 2., had acquired the right, by act of parlia- ment, to construct a canal and take tolls thereon, and had built the same across an ancient highway near St. Helens, a small village, and had made a swivel bridge across the canal for the passage of the highway ; and by subsequent acts, reciting the can fairly be allowed to demand the indemnity -which passengers may by law require. If the person assumes one character for advantage, and the company accede to the claim, he ought not to be allowed the benefits of any other char- acter, unless it is very clear such was his real position, and that this was under- stood by the company. The effect of free passes, and of the passenger being out of his place in the carriages, is very fairly presented, as it seems to us, in the foregoing opinion, and the principal cases are referred to upon all the points. 1 Drew v. The New River Co., 6 Carr. & P. 754. 2 Manley v. The St. Helens Canal & Railw. Co., 2 H. & N. 840. *391 § 132. DEFECTS IN HIGHWAYS CAUSED BY COMPANY'S WORKS. 539 existence of such works, all persons were to have free liberty with boats to navigate the canal for the transportation of goods, and penalties were imposed upon such persons as should leave open the drawbridges. The company maintained the works and received a toll from all others using them. A boatman having opened the swivel bridge, to allow his boat to pass through, in the night time, a person walking along the road fell into the canal and was drowned, just as the boat was coming up. When the bridge was open the highway was wholly unfenced. Two lamps had formerly been kept burning, of which one had been removed and the other was out of repair at the time. The jury found that the deceased was drowned by reason of the neglect of reasonable precautions on the part of the canal company, without any fault on his own part. Held that the defendants, having a beneficial interest in the tolls, were liable to an action, the same as any owner of private property would be for a nuisance arising therefrom. That the bridge being in the possession of defendants, the action was prop- erly brought against them and not against the boatman. That the passing the subsequent acts, recognizing the existence of the bridge, was not a legislative declaration of its sufficiency. It was further held, that even if the bridge had been sufficient at the time of its erection, it was the duty of the company so to alter and improve its structure, from time to time, as at all times to maintain a bridge sufficient, with reference to the existing state of circumstances, and that the jury were warranted in con- sidering the bridge, in the state in which it was, insufficient. 2. But it has been held, that where such companies, having the power, by law, to cut through and alter highways, either temporarily or permanently, do it in such a manner as to leave them unsafe for travellers, who in consequence sustain injury without fault on their part, that the towns or cities in which such highways or public streets are situated are primarily lia- ble 3 for all such injuries. 3 Willard v. Newbury, 22 Vt. R. 458 ; Batty v. Duxbury, 24 Yt. R. 155 ; Currier v. Lowell, 16 Pick. 170; Buffalo v. Holloway, 14 Barb. 101. In this last case an opinion is intimated, that a contractor for such works is not liable to make such precautionary erections as may be requisite to guard the public against injury, no such provision being found in his contract. But is not that a 540 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 132. * 3. And it is also true that such towns or cities may claim an indemnity against the railway companies who are first in fault, and in such action recover not only the damages but the costs paid by them, and which were incurred in the reasonable and necessary defence of actions brought against them on account of the defects in such company's works. 4 And where the injury did not accrue for more than six years, it was held that the railway was still liable to indemnify the town, notwithstanding the bar of the statute of limitations, reek- duty which every one owes the public in all works which he undertakes ? In Barber v. Essex, 27 Vt. R. 62, the following points are decided : An old high- way, which a railway proposes to use for its track, is not considered as discon- tinued till the company have provided a substitute, or unless effected by some other definite legal act, or by an abandonment by legal authority, or nonuser. Towns are responsible to the public for the safe condition of their highways, and cannot excuse themselves from the performance of the duty by showing that a railway company, proceeding under their charter, had caused the defects com- plained of. The towns are bound to watchfulness upon this subject, and theirs being a primary responsibilty, they cannot shift it upon the railway, whose re- sponsibility is secondary in regard to travellers and the public generally. The towns have their remedy over against the company. See, also, to same effect, Phillips v. Veazie, 40 Maine R. 96. The obligation upon the towns to make highways safe and convenient for travellers continues when they are crossed by railways at grade, except so far as the necessary use of the crossing by the rail- way may prevent it, and subject to such specific directions as may be given by the county commissioners. Davis v. Leominster, 1 Allen, 182. But towns are not liable for obstructions caused by telegraph poles which they have no right to remove. Young v. Yarmouth, 9 Gray, 386. The railway is also responsible for all unlawful obstructions of the highway. Parker v. Boston & Maine Railw. Co., 3 Cush. 107. But where the duty of maintaining a bridge is imposed ex- clusively upon the railway, the town is not responsible for any defects in the same. Sawyer v. Northfield, 7 Cush. 490. See, also, Jones v. Waltham, 4 Cush. 299 ; Vinal v. Dorchester, 7 Gray, 421. 1 Lowell v. Boston & Lowell Railw., 23 Pick. 24 ; Newbury v. Conn. & Pas. Rivers Railw., 25 Vt. R. 3 77. The recovery in these cases is allowed upon the ground, that the wrong is altogether upon the part of the company, and the town, standing primarily liable to the public for the sufficiency of the highways, and being virtual guarantors against the negligence of the railway company, may therefore recover of them an indemnity, not only for the damages they are compelled to pay, but also the costs and expenses incurred by them in defend- ing bona fide against suits brought against them for the default of the company. Duxbury v. Vt. C. Railw., 2G Vt. R. 751, 752, 753 ; Hayden v. Cabot, 17 Mass. R. 168 ; Hamden v. New Hav. & Northamp. Co., 27 Conn. R. 158. *392 § 132. DEFECTS IN HIGHWAYS CAUSED BY COMPANY'S WORKS. 541 oning the cause of action as accruing at the date of the neglect ; and that it did not exonerate the company guilty of the neglect, that they had leased their road to another company who were operating it at the time the injury occurred. 5 4. And where the statute provides that railways " shall main- tain and keep in repair all bridges, with their abutments, which they shall construct for the purpose of enabling their road to pass over or under any road, canal, highway, or other way," and the company omitted to perform the duty in the manner re- quired for the public safety, it was held that the town, within which the road lay, were liable to indictment for not keeping it in safe repair, and that they may compel the railway company to make all such repairs as may be necessary, by writ of man- damus ; or if they have been obliged to make expenditures therein, may reimburse themselves by an action on the case against the company. 6 5. And where a railway company were authorized by the leg- islature to construct and operate their road through the streets of a city, and the city government have assented to the location and construction upon a designated route, on certain conditions, it was held that the municipal authority had no power by reso- lution to annul or impair the grant to the company on account of its failure to complete the road within the time limited in the conditions annexed to their assent." And that such condition was not to be regarded as precedent to the vesting of the estate or franchise, but only a condition subsequent upon the non-per- formance of which the grantor might elect to defeat it, but that nothing short of a judicial determination would operate to divest the interest of the company. 7 6. Where a railway has been laid upon a public street, it does not thereby become public property, in such a sense as to en- title the public at large or other railway companies to use the 5 Hamden v. New H. & North. Co. & N. Y. & N. H. Railw., 27 Conn. R. 158. But where the company have the right to lay their rails in the street, they are not responsible for any injury resulting therefrom to others, unless they have been in fault either in laying them down or in keeping them safe. Ma- getti v. New York & Harlem Railw., 3 E. D. Smith, 98 : post, § 225, pi. 7. 6 State v. Gorham, 37 Maine R. 451. 1 Brooklyn Central Railw. v. Brooklyn City Railw., 32 Barb. 358. 542 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 132. track for the passage of carriages constructed for such use. 7 Nor will the permission of the municipal authorities for that purpose give any such right. 7 7. Where a railway company is required to construct its road so as not to obstruct the safe and convenient use of the highway, this is a continuing obligation requiring the company to so main- tain their road as to leave the highway safe and convenient for public use ; but this will not exonerate the towns from their primary responsibility. 8 8. Cities or towns are not liable for damages resulting from the proper exercise of authority in permitting railway tracks to be laid in the streets, or in raising the grade of streets, unless they exceed their lawful authority in this respect. 9 And it is here said to be a legitimate use of a street to allow a railway track to be laid in it. 9. Where a canal company had constructed a bridge as part of the farm accommodations of an adjoining land-owner which the company were bound to maintain, and a railway company by subsequent legislative grant had laid its track along the line of the canal, and in consequence had been compelled to alter the construction of the bridge so as to render it more expensive to maintain the same, it was held the canal company were not thereby exonerated from maintaining the bridge, but were liable to the land-owner the same as before the alteration by the rail- way company, notwithstanding any liability which might rest upon the railway company. 10 10. Where a railway crossed on a level a considerably fre- quented footpath, and there was no servant of the company at the crossing to warn persons of the approach of the trains, the view being somewhat obstructed by the pier of the bridge, but a person before reaching the track could see nearly three hundred yards either way along the line, and the plaintiff's wife, while crossing the line at the spot was run over and killed, it was held that the fact of the company not keeping a servant at the cross- ing to warn persons of the approach of trains, was not evidence of negligence to go to the jury. 11 8 Wellcome v. Leeds, 51 Me. E. 313. 9 Murphy v. City of Chicago, 29 111. R. 279. 10 Ammermon v. Wyoming Land Co., 40 Penn. St. 256. 11 Stapley v. London, Brighton &c, Railw. Co., 11 Jur. N. S. 954. § 132. DEFECTS IN HIGHWAYS CAUSED BY COMPANY'S WORKS. 543 11. And where it was made, by statute, the duty of a railway company to maintain gates at all level crossings of highways, and to have persons to open and shut them when any one wished to pass, but at all other times they were to be kept shut, and a per- son coming along the highway when no servant of the company was present, as he should have been, to open and shut the gates, the plaintiff having waited a reasonable time opened the gates himself in order that he might be able to proceed on his journey, and in doing so was injured by the closing of the gates, which were so constructed as to fall back into their places with their own weight, it was held the action would not lie, one judge dis- senting. 12 This case was decided mainly upon the ground that by the act of parliament requiring the gates to be kept closed, except when opened by the servants of the company, it amounted to a virtual prohibition of any one crossing the railway at any other time, and if the plaintiff found no servant of the company to open the gate, it was his duty to wait until he could find one, and seek his remedy for the delay against the company ; and being a wrong-doer in opening the gate, he could not recover of the company for any injury he thereby sustained. 12 Wyatt v. Great Western Railw. Co., 11 Jur. N. S. 825. 544 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 133. ♦SECTION V. Liability for Injury in the Nature of Torts. 1. Eailivay crossings upon a level always' 6. Not liable for injury to cattle trespassing, dangerous. unless guilty of ivilful wrong. 2. Company not excused by use of the signals \ 7 General definitions of company's duty. required by statute. 8. Action accrues from the accruing of the 3. Party cannot recover if his own act con- tributed to injury. 4. But company liable still if they might have avoided the injury. 5. If company omit proper signals, not liable, unless thed produce the injury. injury. 9. Where injury is wanton, jury may gh-e exemplary damages. 1 0. One ivho follows direction of gate-keeper excused. § 133. 1. We have discussed the subject of this chapter, in general, in former sections. 1 We shall here refer to some cases, where railway companies have been held liable for injuries to persons, in no way connected with them by contract or duty. The subject of railway crossings, 2 on a level with the highway, has been before alluded to, as one demanding the grave consider- ation of the legislatures of the several states. It causes always a most painful sense of peril, especially where there is any consid- erable travel upon the highway, and is followed by many painful scenes of mutilation and death, under circumstances more dis- tressing, if possible, than even the accidents, so destructive some- times to railway passengers. 2. In a case 3 where the plaintiff was injured at a railway crossing, by the collision of an engine, it was held that where the statute required, at such points, certain specified signals, the compliance with the requirements of the statute will not excuse 1 Ante, § 130, post, 177. 5 Ante, § 108. 3 Bradley v. Boston & Maine Railw., 2 Cush. 539. Some distinction is made by the judge, in trying this case, between those cases of negligence which occur in long-established modes of business, and the case of the management of rail- way trains ; that in the former case usage, if uniform and acquiesced in by the public, may amount to a rule of law ; but not in a business so recent as the management of railway trains. This view seems to be sanctioned by the Su- preme Court in revising the case. See, also, Gleason v. Briggs, 28 Vt. R. 185 ; Linfield v. Old Colony Railway, 10 Cush. 562. *393 §133. LIABILITIES FOR INJURIES IN THE NATURE OF TORTS. 545 the company from the use of care and prudence in other re- spects. That it is not necessarily enough to excuse the company, that they pursued the usual course adopted by engineers in such cases. The question of negligence is one of fact, in such cases, to be * submitted to the jury, under all the circumstances of the case, and to be determined by them, upon their view of what prudence and skill required. 3. But when the statute requires certain precautions against accidents, and its requirements are disregarded, the party suffer- ing damage is not entitled to recover, if he was himself guilty of negligence which contributed to the damage. 4 And where the 4 Parker v. Adams, 12 Met. 415 ; post, § 177; Macon & W. Railw. v. Davis, 18 Georgia R. 679, where the question of negligence in the conductors of a rail- way train in passing a road-crossing, is held to be one of fact depending upon the circumstances of each particular case. Dascomb v. Buffalo & State Line Railw., 27 Barb. 221. But the omission of any statute duty by railway com- panies at the time and place where an accident occurs is prima facie evidence of liability. Aug. & Sav. Railw. v. McElmurry, 24 Ga. R. 75. In Johnson v. Hudson River Railw., 6 Duer, 633, where the plaintiff's husband was killed in the streets of the city of New York by one of defendants' freight cars in the night time, it being very dark, and the company using neither lights nor bells to guard against accident; it was held, that although the law required of defendants only ordinary care towards the deceased, it must be measured by the degree of injury against which such care is to be exercised, which, under the circum- stances, was so extreme as to justify the court in telling the jury that defend- ants were required to use every precaution in their power to ensure the safety of persons passing ; and that if lights or bells would have contributed to that end, they were culpable for not using them ; and that in this form the question of negligence was properly submitted to the jury as one of fact. It was also held that the deceased was only bound to the exercise of ordinary care, and that his being found upon the track was not sufficient ground to pre- clude the recovery. In an important case, Shaw v. Boston &Worcester Railw., 8 Gray, 45, the subject of injuries at railway and highway intersections is a good deal discussed. Post, § 1 79, pi. 9 & n. It is here decided that the record of the county commissioners stat- ing that in their opinion no flagman at the crossing was necessary, is not competent to show due care on the part of the company in omitting that precaution. The court said it was the duty of the judge in charging the jury in regard to the pre- cautions required to be taken by a railway company at a highway crossing, to dis- tinguish between such circumstances as could have been reasonably anticipated, and such as would have required extraordinary precautions, but were of so ex- traordinary a character as not to have been anticipated. It was also held a fatal variance that the proof showed the injury to to have occurred some rods VOL. I. 35 *394 546 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 133 plaintiff's farm was intersected by the line of a railway, and he, with a wagon and one horse, having his son and a servant with him, drove upon a trot directly over the track at a public cross- ing, without taking the slightest precaution to ascertain whether a locomotive was coming, it was held that he was guilty of great carelessness, and that he could not recover for any damage there- by sustained, and that it was immaterial whether the train was on time or not. It was also held, that the question of negligence, in a case of this character where the testimony was all one way, was one of law to be decided by the court, and could not be left to the jury. 5 The company are bound to maintain a sign-board and other precautions, required by statute at railroad crossings, at the place where an open travelled street in a city intersects the railway, although the street has not been so laid out and es- tablished by the municipal authorities as to make the city respon- sible for damages occasioned by defects therein, such passage being a " travelled route " within the meaning of the statute. 6 But it has been held, that the company is not liable for not con- structing an under pass for the accommodation of the public travel, on a way which was not laid out agreeably to the statute, or been in use by the public twenty years. 7 It is such negli- gence for a deaf man to drive an unmanageable horse across a railway track when a train is approaching, that he cannot re- cover for any damage sustained. He should wait and avoid ex- posure. 8 out of the highway where the plaintiff's horse drew the carriage by reason of being frightened by defendants' locomotive engine, the declaration charging it to have occurred while travelling in the highway, and the declaration cannot be amended after verdict so as to cure the variance. Also that the degree of care required of the company and travellers, at a railway and highway crossing, is the same, being that which men of ordinary capacity would exercise under like cir- cumstances. The fact that a collision occurred at a railway crossing, and that the plaintiff was in no fault, is not proof that the defendant was in fault. * Dascomb v. Buffalo & State Line Railw., 27 Barb. 221 ; Mackey v. New York Central Railw., 27 Barb. 528. It would seem to be the duty of one about to pass a railway to exercise watchfulness to know that a train is not approach- ing, lb. 8 Whitaker v. Boston & Maine Railw., 7 Gray, 98. But later statutes adopt a different phraseology. T Northumberland v. At. & St. Law. R. Co., 35 N. H. R. 574. 8 111. Cent. R. Co. v. Buckner, 28 111. R 299. § 133. LIABILITIES FOR INJURIES IN THE NATURE OF TORTS. 547 4. If the plaintiff's negligence did not contribute to his injury, it will not preclude his recovering for the consequences of defend- ant's wrong. 9 If the wrong on the part of the defendant is so 9 Kennard v. Burton, 25 Maine R. 39. In the newspaper report of a recent trial in the Supreme Court of Pennsylvania, the court are reported to have charged the jury, as matter of law, that " a person about to cross a railway track [with a team] is in duty bound to stop and look in both directions, and listen be- fore crossing." It has recently been decided by the full bench Supreme Court in Massachusetts, ante, n. 4, that it is not competent for the judge to lay down any definite rule, as to the duty of the company, in regard to proper precautions in crossing highways ; that the circumstances attending such crossings are so in- finitely diversified that it must be left to the jury to determine what is proper care and diligence in each particular case. This we apprehend is the true rule upon that subject, both as to the company and travellers upon the highway, and that it will finally prevail, notwithstanding occasional attempts to simplify the matter by definitions. The Pennsylvania case referred to is that of O'Brien v. Philadelphia, Wilmington, & Baltimore Railw., 10 Am. Railw. T. No. 10, 13. The following extracts from the charge to the jury may serve to explain the views of the court. But if the jury find 'that the company were not faultless, that they did or omitted anything that would constitute negligence as I have defined it, the next inquiry will relate to the conduct of the plaintiff. He was a carter, and the same general principles apply to him as to the de- fendants. He was bound to pursue his business with all that regard to the safety of himself and others which prudent men commonly employ in like occupations. Did he demean himself in that manner? In answer to the 6th and 7th points on the part of the defendants, I instruct the jury that a carter, or any man hav- ing charge of a team, but who is about to cross a railroad at grade on which locomotives run, is bound to stop and listen, and look in both directions, before he permits his team to set foot within the rails, and omission to do so is negli- gence on his part. This rule of law is demanded by a due regard to the safety of life and property, both his own and that which is passing on the railroad. From the diagram in evidence it is perfectly apparent that the plaintiff' could have seen the approaching train if he had looked. If he saw it, it was extreme rashness in him to allow his lead horse to advance so far, and if he did not see it, it must have been because he did not look. I state the general rule, but whether it is applicable to the plaintiff in the cir- cumstances which surrounded him is for the jury. A few yards on his right, some witnesses think seventy, there was a gravel train, with a locomotive at- tached, standing on one of the tracks, and liable to start any moment, and on his left, according to his witnesses, was the omnibus in close proximity to the crossing. Now, for these circumstances the plaintiff was in no wise responsible, and the question is, whether they constituted any excuse for his not looking up the road. In Brooks v. Buffalo & Niagara Falls Railw., 25 Barb. 600, it is said if one cross 5-18 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 133. wanton and gross as to imply a willingness to inflict the injury, plaintiff may recover, notwithstanding his own ordinary neglect. 10 And this is always to be attributed to defendant, if he might have avoided injuring plaintiff, notwithstanding his own negli- gence. So, too, if the neglect on the part of the plaintiff is not the proximate cause of the injury, it will not preclude a re- covery. 11 5. If a railway wholly omit to give the proper signal at a road- crossing, they are not necessarily liable for injury to one crossing at that moment, whose team took fright and injury ensued. It should be shown that the omission had some tendency to pro- duce the loss. 12 The statute requiring railway companies to make signals in all cases of crossing highways, applies to cross- ings above or below the grade of the highway, as well as to those at grade. 13 6. A conductor was held not liable for running the engine over an animal trespassing upon the track, unless he acted wilfully. 14 So, too, where the train passed over slaves asleep upon the track, the company were held not liable. 15 a railway at grade with a team, where the danger may easily be seen by looking for it, and especially where he drives upon the railway track and there stops, looking in an opposite direction from an approaching train till it strikes him, he is guilty of such negligence as will preclude a recovery. 10 Wynn v. Allard, 5 Watts & Serg. 524; Kerwhaker v. C. C. & Cincinnati Railw., 3 Ohio State, 172, 188. 11 Trow v. Vermont Central Railw., 24 Vt. R. 487; Isbell v. N. Y. & N. H. Railw. Co., 27 Conn. R. 393 ; Chicago & R. I. Railw. v. Still, 19 Illinois R. 499. 12 Galena & Ch. Railw. v. Loomis, 1 3 Illinois R. 548. A railway is not liable for an injury which happens in crossing a railway, in consequence of the station- ary cars of the company, upon their track, obstructing the view of the plaintiff in his approach to the road. Burton v. The Railw. Co., 4 Harr. 252. See .also Morrison v. Steam Nav. Co., 20 Eng. L. & Eq. 267, 455. 13 People v. New York Central Railw., 25 Barb. 199. 14 Vandegrift v. Rediker, 2 Zab. 185. But where the act is wrongful, the action may be against both the engineer and fireman. Suydam v. Moore, 8 Barb. 358. 15 Herring v. Wil. & R. Railw., 10 Iredell, 402. In this case, it is held that the conductor might not be chargeable with the same degree of culpability in driving his train over a rational creature, or one who seemed to be such, and in the exercise of his faculties, as in doing the same when the obstruction was a brute animal. And in the case of running over a person asleep, or a deaf mute, or an insane person, some indulgence is, doubtless, to be extended, inas- much as the peculiar state of the person might not be readily discoverable by § 133. LIABILITIES FOR INJURIES IN THE NATURE OF TORTS. 549 * 7. The duty required of railways towards those who are, at the time, in the exercise of their legal rights, is the possession of those in charge of the train, if not they would have a right to calculate that they would conduct like other rational beings, and step off the track as the engine approaches. But in East Tennessee & Ga. Railw. v. St. John, 5 Sneed. 524, it was held that the company were responsible for killing a slave asleep on the track, which might have been seen by the conductor a quarter of a mile, but which was mistaken for the garments of the laborers, and no signal given in consequence. The practice of allowing persons to walk upon a railway track is a vicious one, and one which would not be tolerated in any state or country where the railways are under proper surveillance and police. But as it now is in many parts of this country, an engineer will find some person upon his track every mile, and, in some places, every few rods. If he were required to check the train at every such occurrence, it would become an intolerable grievance. If men will insist upon anything so absurd as to be permitted to walk upon a railway track at will, they must expect that those who are bereft of sense, but preserve the form of humanity, when they chance to come into the same peril, will perish ; not so much from their own infirmities, as from the absurd practices of those who have no such infirmities. And their destruction is not so much attributable, perhaps, to the fault of the railways, as to the bad taste, and lawlessness of public opinion, in making such absurd demands upon the indulgence of railways. And, if it be urged that the companies might enforce their rights, and keep people off their tracks, it would be found, we fear, upon trial, that such arguments are unsound. The companies, probably, could not enforce such a regulation, in many parts of the country, without exciting a perplexing and painful prejudice, to such an ex- tent as to endanger the safety of their business. The only effectual remedy will be found in making the act punishable by fine and imprisonment, as is done in England and some of the American states, and in a strict enforcement of the law upon all offenders. Every one can see that, if sane persons were excluded from the railway, the sight of a person upon the track would at once arrest the attention of conductors of trains, and there would be little danger comparatively of their destruction, whereas now, persons bereft of sense are almost sure to be run over. Persons are so frequently upon the track that the conductors have no alterna- tive but to push their trains upon them. For such persons are, not unfrequently, so reckless, that, if they could alarm engineers, they would be found trying such experiments every hour. One who was engaged in sawing wood upon the track of a railway by direc- tion of the superintendent of the company, and is injured by the engine of another company, lawfully upon the track, cannot recover of the latter company, although their engineer was guilty of carelessness, being himself also in fault. Railroad v. Norton, 24 Penn. St. 465. In Ranch v. Lloyd & Hill, 31 Penn. St. 358, it was decided, that where the state owned the railway, and its regula- tions were prescribed by the canal commissioners, and the state supplied the *395 550 LIABILITY FOR ACTS OF AGENTS AND SUB- AGENTS. § 138. the most approved machinery, and such care, diligence, and skill, in using it, as skilful, prudent, and discreet persons would be ex- pected to put forth, having a proper regard to the interests of the company, the demands of the public, and the interests of those having property along the road, exposed to fire, and to injury in * other modes. 16 They are, at least, bound to exercise as much care as if they owned the property along the line, i. e. what would be regarded as the duty of a prudent owner under all the circumstances. 17 It has been held that the company, when their motive power, and allowed persons to use their cars, furnishing a conductor, that such conductor is the responsible person in charge of the train throughout its entire route. That the agencies provided for him, whether of steam, or horse power, become his agencies, and the ultimate responsibility in regard to their proper conduct, so far as strangers are concerned, rests upon him and upon the owners of the train, whose servant he is. And that where it was the practice to have cars pass over a portion of the road by the force of gravity, and after arriving at a given point, to be drawn by horse power to the storehouses, and the conductor left them standing across the usual crossing of the highway and went to his breakfast, and during his absence a lad, seven years old, attempted to crawl under the cars, in returning from an errand on which he had been sent, and by means of the starting of the train by the horse power, furnished by a stable-keeper, by contract with the state, and driven by the proprietors' drivers, was seriously injured, it was considered that the conductor and his employers were responsible for the injury. It was also decided that where cars were so left standing in the highway un- necessarily, it is not a question to be submitted to the jury, whether they con- stitute an unlawful obstruction. As matter of law, such obstruction, if it could be avoided, is unlawful. In such a case, no greater care and prudence is required to be exercised by such -child than is reasonable to expect of one of such tender years. See Galena & Ch. Railw. v. Jacobs, 20 111. R. 4 78. 16 Baltimore & Susq. Railw. v. Woodruff, 4 Maryland R. 242, 257. 17 Quimby v. Vermont Central Railw., 23 Vt. R. 387. And where one was injured by the company's train, at a road-crossing, by collision between the com- pany's locomotive and the carriage in which the plaintiff was riding, it was held, that the carelessness of the driver of the carriage cannot be shown by common reputation. Nor can the occupation of the plaintiff, and his means of earning support, be shown, with a view to enhance the damages for such an injury, un- less specially averred in the declaration. Baldwin v. Western Railw., 4 Gray, 333. In O'Brien v. Philadelphia, Wilmington & Baltimore Railw., 10 Am. Railw. Times, No. 13, where plaintiff was injured at a railway crossing a high- way, by collision with his team, Mr. Justice Woodward, of the Pennsylvania Supreme Court, charged the jury, that the plaintiff was only entitled to com- *396 § 133. LIABILITIES FOR INJURIES IN THE NATURE OF TORTS. 551 road passes the thoroughfares of a city, are bound to use extraor- dinary care not to injure persons in the streets. 18 8. The general rule, in regard to the time of the accruing of the action is, that when the act or omission causes direct and immediate injury, the action accrues from the time of doing the act, hut where the act is injurious only from its consequences, as by undermining a house or wall, or causing water to flow back at certain seasons of high tide or high water, the cause of action accrues only from the consequential injury. 19 In the case of Backhouse v. Bonomi, 20 it was held that no cause of action accrued from defendant's excavation in his own land, until it caused damage to the plaintiff's; and the case of Nicklin v. Wil- liams, 21 as far as it conflicts with this, was held not maintainable. The cases were examined very thoroughly in the course of the discussion of this case before the Queen's Bench, which held that the cause of action accrued from the act of defendant, and in the Exchequer Chamber, where that judgment was reversed, and finally in the House of Lords, where the judgment of the Ex- chequer Chamber was affirmed. The law on this point may now be considered settled in the English courts. Where the issue is in regard to the prudent use of a highway by the company, it is not competent to give evidence of the mode of using the same by the company at other times. 22 9. As a general rule, in the English practice, and in most of the states of the Union, in actions for torts, where the defend- ant's conduct has been wanton, or the result of malice, the jury pensatory damages, there being no pretence of any intentional wrong, or flagrant rashness, on the part of the agents of the company. 18 Wilson v. Cunningham, 3 Cal. R. 241. 19 Roberts v. Read, 16 East, 215. Where the act complained of was mali- ciously opposing plaintiff's discharge as an insolvent, and the act was more than six years before action brought, but the consequent imprisonment continued within the six years, it was held the cause of action was barred. Violet v. Simp- son, 30 Law Times, 114, Nov. 1857. The admissions of the corporators, or of the president, are not sufficient to remove the bar of the statute of limitations, in favor of a private corporation. Lyman v. Norwich University, 28 Vt. R. 560. 20 7 Jur. N. S. 809 ; s. c. 5 Jur. N. S. 1345 ; 4 Id. 1182. 21 10 Exch. 259. 22 Gahagan v. Boston & Lowell Railw., 1 Allen, 187. 552 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 134. are allowed to give damages of an exemplary character, and the term vindictive even is sometimes used. 23 But this is ques- tioned by some writers, and in many cases. 24 10. Where a level crossing over a railway is protected by a gate, established by the company and tended by one of its ser- vants, in conformity with the law, those having occasion to cross the track, and who are injured by an attempt to cross when the gatekeeper assures them the line is clear, may recover such dam- ages of the company. It is the implied duty of the gatekeeper to know when trains are due, and to give correct information in that respect, and not open the gate for passage across the track unless he knows no duly advertised train is due. And if a train not advertised to the gatekeeper, or at a time not advertised to him, is allowed to pass, whereby injury accrues to those having just occasion to pass the track, it is the fault of the company. 25 SECTION VI. Misconduct of Railway Operatives shoivn by Experts. 1. The management of a train of cars is so far matter of science and art, that it is proper to receive the testimony of experts. 2. In cases of alleged torts company not bound to exculpate. 3. So, too, the plaintiff is not bound to pro- | testimony of experts duce testimony from experts. 4. The jury are the final judges in such cases. But omission to produce testi- mony of experts will often require expla- nation. n. 6. General rules of law in regard to the § 134. 1. The conduct of a railway train is not strictly matter of science perhaps. Its laws are not so far denned, and so ex- empt *from variation, as to be capable of perfect knowledge, like 43 Sedgwick on Dam. 38, 98, 454 ; ante, § 131, 154. In the case of Shaw v. Boston & Worcester Railw., ante, n. 4, where the plaintiff's husband was killed, by the same collision, and she was shown to have had a family of young children, and to be without sufficient property for their support, it was held to be error in the court not to charge the jury, when specially requested so to do, that these facts could not be considered by them in estimating damages. 24 Appendix to Sedgwick on Dam. 609 ; Varillat v. N. Orleans & Car. Railw., 10 Louisiana Ann. 88. 55 Lunt v. London & N. W. R. Co., 12 Jur. N. S. 409. *397 § 184. MISCONDUCT OF OPERATIVES SHOWN BY EXPERTS. 553 those of botany and geology, and other similar sciences, or even those of medicine and surgery perhaps, whose laws are subject to more variation. 1 But they are nevertheless so far matters of skill and experience, and are so little understood by the com- munity generally, that the testimony of inexperienced persons in regard to the conduct of a train, on a particular occasion, or under particular circumstances, would be worthy of very little reliance. They might doubtless testify in regard to what they saw, and what appeared to be the conduct of the operatives, but thosp skilled in such matters might, as experts in other cases are allowed to do, express an opinion in regard to the conduct of the train, as shown by the other witnesses, and how far it was ac- cording to the rules of careful and prudent management, and what more might, or should have been done, consistently with the safety of the train, in the particular emergency. 2 But where the plaintiff, who claimed damages on account of the misconduct of a flagman at a railway crossing, had attempted to prove that he was a careless and intemperate person, it was held that the company might show that he was careful, attentive and temper- ate, and that these facts might be proved by those who had seen his conduct, and need not be shown by experts. 3 2. But a railway company, when sued for misconduct, are not bound, in the first instance, ordinarily, to show, by the testimony of experts, that they were guilty of no mismanagement. But in the case of an injury to passengers, the rule is otherwise. 4 3. And it has been said, that one who brings an action against a railway, founded upon negligence and misconduct, is not bound, in opening his case, to show, that by the laws and prac- tice of railway companies there was mismanagement in the par- 1 Quimby v. Vermont Central Railw., 23 Vt. R. 394, 395. 8 Illinois Central Railw. v. Reedy, 17 Rlinois R. 580, 583. Caton, J. " The burden of proof is on the plaintiff', and it is for him to show, by facts and circum- stances, and by those acquainted with the management of trains, who could speak understandingly on the subject, that it was practicable and easy to have avoided the collision, and that, in not doing so, those in charge of the train were guilty of that measure of carelessness, or wilful misconduct, which the law requires to establish the liability." 3 Gahagan v. Boston & Lowell Railw., 1 Allen, 187. Post, § 176 ; Galena & Chicago Railw. v. Yarwood, 17 Illinois R. 509. 554 LIABILITY FOR ACTS OF AGENTS AND SUB-AGENTS. § 134 ticular case. If he sees fit to trust that question to the good sense of the jury, he may. 5 4. But it is obvious, that in cases of this kind, although the jury are ultimately to determine, upon such light as they can obtain, and will be governed a good deal by general principles of reason, based upon experience, and that the testimony of wit- nesses, unskilled in the particular craft, will doubtless have a considerable influence in establishing certain remote principles, by which all men must be governed, in extreme cases, neverthe- less, in that numerous class of cases, in courts of justice, which have to be determined * upon a nice estimate and balance of con- flicting testimony, the opinion of experienced men, in the par- ticular business, must be of very controlling influence. And it is very well understood, that generally, the fact that such evidence is not produced, unless the omission is explained, will tend to raise a presumption against the party. 6 6 Quimby v. Vermont Central Railw., 23 Vt. R. 394, 395. 8 Murray v. Railroad Company, 10 Rich. (S. C.) 227. As we find few cases in the books bearing upon this general question, in regard to railways, we may refer to analogous subjects where the question has arisen. Nautical men may testify their opinion, whether, upon the facts proved by the plaintiff", the col- lision of two ships could have been avoided, by proper care on the part of defend- ants' servants. Fenwick v. Bell, 1 C. & K. 312. So, too, in regard to the proper stowage of a cargo. Price v. Powell, 3 Comst. 322. So a master, engineer, and builder of steamboats, may testify his opinion, upon the facts proved, as to the manner of a collision. The Clippers. Logan, 18 Ohio R. 375 ; Sills v. Brown, 9 C. &P. 601. It has been held, that even experts may not be called to express an opinion, whether there was misconduct in the particular case on trial, as that is the prov- ince of the jury, but that they may express their opinion upon a precisely simi- lar case, hypothetically stated, which seems to be a very nice distinction, and which is combated in a very sensible note to Fenwick v. Bell, 47 Eng. Com. Law R. 312. The opinion of Lord Ellenborough, in Beckwith v. Sydebotham, 1 Camp. 11G, 117, that where there is a matter of skill or science to be decided, the jury may be assisted by the opinion of those peculiarly acquainted with it, from their professions and pursuits, seems to us more just and wise. We have always regarded the testimony of experts, as a sort of education of the jury upon subjects in regard to which they are not presumed to be properly instructed. The distinction we make upon the subjects, where we allow the testimony of experts, and where we do not, shows this. The nearer the testi- mony comes to the very case in hand the more pertinent and useful. And the finesse of keeping the very case out of sight by name, but describing it by alle- *398 § 134. MISCONDUCT OF OPERATIVES SHOWN BY EXPERTS. 555 gory, in asking the opinion of the experts, is scarcely equalled by the device of certain species of birds, who imagine themselves invisible to others because they are so to themselves. It is not unlike asking a witness in regard to the genuine- ness of handwriting, in dispute before a jury, and which is to be determined by them, and this is always allowed without question. And in all such questions, there is likely to be so much disagreement among the experts, as to leave the jury a sufficient duty to perform. But the more common practice is according to the rule in Sills v. Brown. In an action against a railway company for carrying their road through plain- tiffs pasture, throwing down his fences, and scattering, frightening, and injuring his cattle, it was held that an experienced grazier is competent to testify as an expert in regard to the state of cattle and to causes affecting their weight and health on a supposed state of facts. But that such person could not express an opinion upon the facts proved in the particular case, on the point to be deter- mined by the jury. Baltimore & Ohio Railw. v. Thompson, 10 Md. R. 76. y In Webb v. Manchester & Leeds Railw., 1 Railw. C. 576, a point involving questions of practical science being in dispute, and the testimony conflicting, it was referred to an engineer for his opinion, and his conclusion, in regard to the facts, adopted and made the basis of the order of court. In the case of Seaver v. Boston & Maine Railw. Co., 14 Gray, 466, after several experts called by the plaintiff had testified, upon a statement of facts and circumstances of the acci- dent, what in their opinion threw the cars from the tracks, the defendants were permitted to ask a machinist who had been connected for many years with rail- roads, and with the running of cars and engines upon them, and who was in the cars at the time of the accident, and saw the occurrence and all the attending circumstances, what in his opinion threw the cars from the track, and it was held no ground of exception. We had occasion, in our book on Wills, pt. 1, § 15, pp. 135 - 159, to examine the subject of the testimony of experts upon the question of mental soundness in all its bearings. Many of the principles there laid down, and especially the course of practice, will apply to the general bearing of this class of testimony in other cases. 556 RAILWAY DIRECTORS. §135. ♦CHAPTER XXI RAILWAY DIRECTORS. SECTION I. Extent of the Authority of Railway Directors. 1 . Notice to one director, if express, sufficient. 2. Applications to the legislature for enlarged poivers, and sale of company 's ivories, re- quire consent of shareholders. 3. Constitutional requisites must be strictly followed. 4. Directors, or shareholders, cannot alter the fundamental business of the company. 5. Inherent diffiadty of defining the proper limits of railway enterprise. n. 7. Opinion of Lord Langdale, and review of cases, on this subject. 6. An act ultra vires can only be confirmed by actual and not by constructive assent. 7. The directors of a trading company may give bills of sale hi security for debts con- tracted by them. 8. Directors cannot bind company except in conformity with charter. 9. Company cannot retain money obtained by fraud of directors. 10. But it must appear the plaintiff was mis- led without his own fault. 11. Company, by adoptiny act of directors, are liable to make recompense. 12. A prospectus and report should contain the whole truth. 13. Directors cannot issue shares to procure votes and control corporation. 14. What will amount to fraud in thereports of the company. 15. Directors responsible for fraudulent acts and representations. 1 6. Extent of power of directors. § 135. 1. We have before stated, in general terms, the power of the directors of the company to bind them. 1 The board of directors ordinarily may do any act, in the general range of its business, which the company can do, unless restrained by the charter and by-laws. 2 Notice to one of a board of directors, in 1 Ante, § 113; Post, § 164. 2 Whitwell, Bond & Co. v. Warner, 20 Vt. R. 425. But the general agent of such a company, who performs the daily routine of the business of the compa- ny, cannot bind them beyond the scope of his ordinary duties. Hence the law- agent of a joint-stock insurance company cannot bind the company by his false representations as to the state of its finances. Burnes v. Pennell, 2 H. L. Cas., Clark & F. (n. s.) 497. But where the directors of the company make such false representations as to the state of the finances of the company to enhance the price of stocks, they are liable to an action at the suit of the person de- ceived, or to criminal prosecution ; and transfers of stock, made upon the faith *399 § 135. EXTENT OF THEIR AUTHORITY. 557 the same transaction, or express notice, is, in general, notice to the company. But the fact that one of a firm is a director in a banking company, but takes no active part in the business of the ' bank, is no notice *to such bank of the dissolution of such part- nership, or the retiring of one of its partners. 8 2. But it is said the directors of a corporation have no author- ity, without a vote of the shareholders, to apply to the legislature for an enlargement of the corporate powers. 4 And it was held, that the managing directors of a joint-stock company, who had power to lease the works of the company, could not, in the lease, give an option to the lessee, to purchase, or not, at a price fixed, the entire works of the company, at any time within twenty years, and that such a contract must be ratified by every member of the company to become binding upon them. 5 8. And where the deed of a joint-stock company enables the majority to bind the company, by a resolution passed in a certain manner, these formalities must be strictly complied with, or the minority will not be bound by the act. 6 of such representations, will be set aside in equity. Id. Lord Campbell said, it •was not necessary the representation should have been made personally to the plaintiff. See, also, Soper v. Buffalo & Roch. Railw., 19 Barb. 310. But where the charter of a railway company, or the general laws of the state, require the ratification of a particular contract, by a meeting of the sharehold- ers, held in a prescribed manner, such contract, assumed by the directors only, does not bind the company, and a court of equity will not hesitate to enjoin its performance by the company at the suit of any dissenting shareholder. Zabris- kic v. C. C. & C. Railw., 10 Am. Railw. Times, No. 15. Where a tariff of fares of freight and passengers upon a railway are estab- lished and pflsted up by the president of the company, and are acted upon in transacting the business of the company without objection, the consent of the corporation will be presumed. Hilliard v. Goold, 34 New H. R. 230. 3 Powles v. Page, 3 C. B. 16. But the secretary of a railway company can- not bind the company by admissions. Bell $. London & N. W. Railw., '21 En^. L. & Eq. 5G6. Nor can the directors bind the company by their declarations, unless connected with their acts, as part of the res gestce. Soper v. Buffalo & Roch. Railw., 19 Barb. 310. Notice of process to two directors of a canal company is good notice to the company, and will bind it, although never communicated to the board. Boyd v. Chesapeake & Ohio Canal Co., 17 Md. R. 195. 4 Marlborough Manufacturing Co. t\ Smith, 2 Conn. R. 579. B Clay v. Rufford, 19 Eng. L. & Eq. 350. 8 Ex parte Johnson, 31 Eng. L. & Eq. 430. One railway company cannot, *400 558 RAILWAY DIRECTORS. § 135. 4. So, too, where the directors, or even a majority of the share- holders, assume to enter into a contract, beyond the legitimate scope of the objects and purpose of the incorporation, the con- tract is not binding upon the company, and any shareholder may restrain such parties, by injunction out of Chancery, from applying the funds of the company to such purpose, however beneficial it may promise to become to the interests of the company. This is a subject of vast concern to the public, considering the large amount of capital invested in railways, and the uncontrollable dis- position which seems almost everywhere to exist, in the utmost good faith, no doubt, to improve the business of such companies, by extending the lines of communication, and even by the'virtual purchase of other extensive works, more or less nearly connected, either in fact, or in apprehension, with the proper business of the company. In a late English case (1861), before the Master of the Rolls, it was held, that where a railway company were re- quired by their charter to keep up a ferry accommodation be- tween certain points, and for that purpose were obliged to have a much larger number of steamboats on certain days than upon ordinary occasions, they were not acting ultra vires in employing the steamboats for excursions to a point beyond the ferry and back, when not required for the purposes of the ferry. 7 The learned judge thus defined the powers of railway companies. After saying that if every shareholder but one assented, the com- pany could not carry on a trade perfectly distinct from that for without the permission of parliament, purchase stock in other railway companies. Salomons v. Laing, G Railway C. 289. In the case of Ernest v. Nichols, 30 Law Times, 45, decided in the House of Lords, in August, 1857, the subject of the power of the directors of a joint- stock company to bind the company, is discussed very much at length, and the conclusion reached, as in some former cases (Ridley v. Plymouth, &c. Co., 2 Exch. 711, and some others), that the directors could execute no bind- ing contract on behalf of the company, except in strict conformity to the deed of settlement by which the company was constituted : and that it was no excuse for the other contracting party to say he was ignorant of the provisions of that deed. It was his folly to contract with a director or directors, under such ignorance, and he must be content to look to those with whom he con- tracted. ' Forrest v. Manchester S. & L. Railw., 7 Jur. N. S. 749 ; s. C. affirmed in Court of Chancery Appeal, id. 887, but upon the ground that the suit was illu- sory, and not in fact the suit of the plaintiff, but of a rival company. § 135. EXTENT OF THEIR AUTHORITY. 559 which they were constituted ; " it is impossible," said the Master of the Rolls, " for them to set up a brewery, — they cannot carry on a trade such as managing a packet company." " And if this were the case of a railway company embarking in the formation of a packet company, for the purpose of carrying passengers be- tween two places, or even for the mere purpose of making excur- sions, I should be of opinion it was not justified. But I am of opinion, that no capital of the company is embarked expressly and solely for the purpose of making excursion trips." And in the Supreme Court of the United States 8 it has been decided, that the separate railway corporations had no right to consolidate their roads into one, and put them under one man- agement, which seems to us a very questionable proposition, to say the least, since such a combination of management is obvi- ously the only thing which will be adequate to produce the kind and degree of concentration of effort and management in the carrying forward of railway enterprises in this country, which will make them either remunerative or useful to the public. And as there is no national supervision of these vast interests, we must find it either in the discretion of railway directors and managers, or in some new constitutional provisions in the national government, adequate to the exigency. But the proposition that such companies cannot establish a steamboat line in connection with their business, and that their joint notes given for the pur- chase of boats cannot be enforced, is unquestionable. 8 5. There can be no doubt the courts of equity hold some right- ful control over these speculative schemes and enterprises. But * they lie so deeply entrenched, in the general spirit of the age, and receive so much countenance and sympathy from kindred enterprises, in almost all the departments of business, that it often becomes extremely difficult, if not impossible, to fix any well-defined and practicable limits to the operations of railway companies, that shall not allow them, on the one hand, the power of indefinite extension, and overwhelming absorption of kindred enterprises, or which will not be regarded, on the other, as a de- nial of fair liberty and free scope to carry out the just objects of 8 Pearce v. M. & I. & P. & I. Railw., 21 How. 441. But see Rut. & Bur- Railw. v. Proctor, 29 Vt. R. 93, 95. *401 560 RAILWAY DIRECTORS. § 135. their creation. We have thought that we could not afford a more just and unexceptionable commentary upon this difficult and important subject, than in the language of one of the most sober, discreet, and learned of the English equity judges, Lord Lang-dale, M. R. 9 9 Colman v. The Eastern Counties Railw. Co., 4 Ilailw. C. 513. The man- aging directors of a railway company, with the view of increasing the traffic on their .line, entered into a contract with a steam-packet company, that they would guarantee the proprietors of the steam-packet company a minimum dividend of £ 5 per cent, on their paid-up capital until the company should be dissolved, and that, upon a dissolution, the whole paid-up capital should be returned to the shareholders in exchange for a transfer of the assets and properties of the steam- packet company. One of the shareholders filed a bill on behalf of himself and all other share- holders who should contribute, except the directors, against the company and the directors, and obtained an injunction, ex parte, to restrain the completion of the contract : — Held, on motion to dissolve the injunction, that an objection for want of par- ties to a suit so framed was not sustainable. That directors have no right to enter into or to pledge the funds of the company in support of any project not pointed out by their act, although such project may tend to increase the traffic- upon the railway, and may be assented to by the majority of the shareholders, and the object of such project may not be against public policy. That acquies- cence by shareholders in a project for however long a period, affords no pre- sumption that such project is legal. That an objection stated by affidavit and remaining unanswered, that the plaintiff was proceeding at the instigation and request of a rival company, did not deprive him of his right to an injunction, and the motion to dissolve the in- junction was refused, with costs. The learned judge said : " To look upon a railway company in the light of a common partnership, and as subject to no greater vigilance than common part- nerships may be, would, I think, be greatly to mistake the functions which they perform, and the powers of interference which they exercise with the public and private rights of all individuals in this realm. We are to look upon those powers as given to them in consideration of a benefit, which, notwithstanding all other sacrifices, is on the whole hoped to be obtained by the public ; but the public interest being to protect the private rights of all individuals, and to save them from liabilities beyond those which the powers given by the several acts necessarily occasion, those private rights must always be carefully looked to. " I am clearly of opinion, that the powers given by an act of parliament like that which is now in question, extend no further than expressly stated in the act, except where they are necessarily and properly acquired for the purposes which the act has sanctioned. How far those powers may extend which are necessarily or conveniently to be exercised for the purposes intended by the act, § 135. EXTENT OF THEIR AUTHORITY. 561 6. In a recent English case, 10 it was declared by the Court of Chancery that the directors of the company were restricted, as to will very often be a subject of great difficulty. We cannot always ascertain what they are ; ample powers arc given for the purpose of constructing the rail- way ; ample powers are given for the purpose of maintaining the railway ; am- ple powers are also given for the purpose of doing all those tilings which are re- quired for the proper use of the railway ; but I apprehend that it has nowhere been stated that railway companies have power to enter into transactions of all sorts and to any extent. Indeed it is admitted, and very properly admitted, that they have not a right to enter into new trades and new businesses not pointed out by the act; but it is contended that they have a right to pledge the funds of the company, without any limit, for the encouragement of other transactions, however various and extensive, provided only they profess that the object of the liability occasioned to their own shareholders by such encourage- ment is to increase the traffic upon the railway, and thereby the profit to the shareholders. Surely that has nowhere been stated ; there is no authority for anything of that kind. What has been stated is, that these things to a small extent have frequently been done since the establishment of railways. Be it so; but unless what has been done can be proved to be in conformity with the powers given by the special acts of parliament, they do not, in my opinion, furnish any authority whatever. To suppose that the acquiescence of railway shareholders, for the last fifteen years, in any transaction conducted by a railway company, is any evidence whatever of their having a lawful right to enter into it, is, I think, wholly to forget the frenzy in which the country has been for the last fifteen or sixteen years, or thereabout. There is no project, however wild, which has not been encouraged by some one or more of these companies. There is no project, however wild, which the shareholders, or the persons liable in respect of those companies, have not acquiesced in, from one cause or another, either from cupidity and the hope of gaining extraordinary profits beyond their first anticipations, or from terror of entering into a contest with persons so powerful. In the absence of legal decisions, I look upon the acquiescence of shareholders in these transactions as affording no ground whatever for the presumption that they may be in themselves legal." The case was afterwards mentioned to the court, on behalf of the defendants, when his lordship stated, that the injunction was only meant to refer to the guaranty proposed to be given, and the case made by the bill; but was not in- tended to affect any arrangement which the directors might enter into with any steam-packet company respecting the rates and tolls to be charged on the rail- way. In Salomons v. Laing, the same learned judge said (6 Railw. C. 301) : "A railway company, incorporated by act of parliament, is bound to apply all the 10 Stanhope's case, 12 Jur. N. S. 79, reversing the decision of the Master of the Rolls in s. C. 11 Jur. N. S. 872 ; Lord Belhaven's case, 11 Jur. N. S. 572, is here denied, and Spackman's case, Id. 207, approved. vol. 1. 36 562 RAILWAY DIRECTORS. § 135. the extent of their authority to bind the members, by the terms of the deed of settlement or charter, or fundamental constitution moneys and property of the company for the purposes directed and provided for by the act of parliament, and not for any other purpose whatever. When the expenses are paid, and the public purposes directed and provided for by the act of parliament, — which, in truth, was the motive and inducement for granting the extraordinary powers given by all these acts of parliament, — when these purposes are fully performed, any surplus which may remain after setting apart the sum to answer contingencies, may, if not applied in enlarging, improving, or repairing the works, be divided among the shareholders. The dividends, which belong to the shareholders, and are divisible among them, may be applied by them severally as their own property, but the company itself, or the directors, or any number of the shareholders assembled at a meeting or otherwise, have no right to dispose of the shares of the general dividend, which belong to the particular shareholder, in any manner contrary to the will, or without the consent or authority of that particular shareholder. Any applica- tion of or dealing with the capital, or any part of the capital, or any funds or money of the company, which may come under the control or management of the directors or governing body of the company, in any manner not distinctly authorized by the act of parliament, is in my opinion an illegal application or dealing; and without meaning to say that it is or could be practicable for indi- vidual shareholders to interfere on every occasion, however small, of alleged misapplication of particular sums, I am of opinion that if, as in this case, the directors are proceeding upon an illegal principle, and for purposes not au- thorized by the act of parliament, to involve the company, or the shareholders of the company, or any of them, in liabilities to which the shareholders, or any of the shareholders, never consented, relief may and ought to be given in this court ; and that the mere circumstance of the Brighton company having ob- tained, as it is not disputed they did lawfully obtain, a certain number of shares in the Portsmouth company, is not a reason why the company should be enabled or permitted to purchase more shares, and thereby increase the risks to which parliament permitted the shareholders to be exposed by the shares which may have become vested in them by the Amalgamation Act, or any reason why the directors should be permitted to divert so much of the funds of the company as they think proper, or indeed any portion of those funds, for the support of an- other company having distinct objects, and meant to be applied to purposes different from those in consideration of which alone those powers were granted to them." Ante, § 5G. Where the statute prohibits the directors of a company from being concerned, directly or indirectly, in building its road, a contract be- tween the company and two of its directors, for that purpose, is absolutely void. Barton v. Port Jackson, &c. Plank Road Co., 17 Barb. 397. The deed of a joint-stock banking company contained provisions, that the directors should be not fewer than five or more than seven ; that three, or more, should constitute a board, and be competent to transact all ordinary business, and that the directors should have power to compromise debts. Agents might § 135. EXTENT OF THEIR AUTHORITY. 563 of the company ; and that any arrangement ultra vires of the di- rectors, by which, in consideration of a money payment by a shareholder desiring to retire, they declared his shares forfeited, is not, nor can any lapse of time render it, binding on the gen- eral body of the shareholders, unless it is shown, not only that the latter might have been, but also that they actually were, fully aware of the transaction. This seems to us to be placing the question of ratification of an act ultra vires upon its only safe and salutary basis. There should always be either express or be appointed by the directors to accept or draw bills, without reference to the directors. The number of directors became reduced to four, and three executed a deed, compromising a large debt due the company, taking from the debtor a mining concern, and covenanting to indemnify him against certain bills of ex- change. In an action on this covenant, held that it did not bind the company, not be- ing ordinary business, and no number of directors less than five being competent to transact it. And query, whether a board of three directors could transact even ordinary business, unless when the board consisted of five only. Kirk v. Bell, 12 Eng. L. & Eq. 385. But where a series of contracts have been openly made by the officers of a corporation, within the knowledge of the corporators, who have acquiesced in and derived benefit from them, the contracts are binding upon the corporation, although not expressly authorized in its charter. And if it be a municipal cor- poration it is bound to pay whatever is due, by taxes, if it has no other means. Alleghany City v. McClurkan, 14 Penn. St. 81. So also where, by consent of the board of directors, a general agent was em- ployed in making contracts for the purchase of the right of way, and were in the habit of agreeing upon the price, by submission to arbitrators, and the awards had been paid in such cases by the company's financial officers, under a general resolution to pay the amount these agents directed, it was held that such agent, and another agent employed to assist in the same service, had power to submit the question of price, in such cases, to arbitrators, and their award was binding upon the company. And it is not requisite that the contract of submission should be under the seal of the company in such case, nor will it be avoided by the agent attaching a seal to its execution, by himself. Wood v. The Auburn & Roch. Railw., 4 Seld. 160. But the fact that the directors have exe- cuted some ten or twelve similar contracts, and that such contracts had been published in the annual reports, and distributed to the stockholders without ob- jection, although evidence of acquiescence on their part is not evidence of the enlargement of the charter powers of the company, so as to bind the company, as between them and the primary parties entering into the contract with them. McLean, J., in Zabriskie v. C. C. & C. Railw., 10 Am. Railway Times, No. 15. Ante, § 56. 564 RAILWAY DIRECTORS. § 135. presumptive evidence of actual and unconstrained acquiescence entirely satisfactory to the court, in order to bind a principal by any act of his agent, beyond the proper limits of the authority delegated to him. This is a principle of universal acceptance and application in the law of agency. 7. One of the latest English cases n declares, that the power of the directors to give a bill of sale, as security for debts, is inci- dent to all trading corporations, although it be not expressly conferred by the articles of association, or the constitution of the company. Mr. Ch. Justice Erie said, " The fact that the com- pany carries on a trade is a sufficient answer to the first objection. Every trading company must have the power of giving security for the debts which it contracts." 8. Where power is given in the charter of a corporation or in the deed of settlement, for the directors to confirm any contract made by provisional directors, or any persons acting as directors of the company in its formation, the directors alone have power to confirm such contracts by deed. 12 But the directors have no power to make any contract under seal binding upon the corpo- ration, if the formalities prescribed by its constitution have not been complied with. 13 9. The directors being but the servants or trustees of the company, it cannot, as before stated, retain money obtained from one by the fraudulent sale by the directors of the company prop- erty, unless the purchaser has by his own misconduct precluded himself from redress. 14 It was here held, that directors are not justified in using reports to induce a sale of property, which were true at the time they were made, if not true at the time they are so used. 10. But the last case was reversed in the House of Lords, and the decree of Vice-Chancellor Stuart 16 affirmed with costs, — his 11 Shears v. Jacobs, 12 Jur. N. S. 785. 12 Wilkins v. Roebuck, 4 Drew. 281. 13 Hambro iT Hull & London Fire Ins. Co., 3 H. & N. 789. See, also, East- wood v. Bain, Id. 738 ; Bryon v. Met. Saloon Omnibus Co., 3 De G. & J. 123 ; Baker ex parte, 6 Jur. N. S. 240. 14 Conybeare v. New B. & Canada Railw. Co., 6 Jur. N. S. 518 ; ante, § 41, pi. 2. 15 6 Jur. N. S. 164. § 135. EXTENT OF THEIR AUTHORITY. 565 honor not having awarded costs, — on the same grounds mainly which the Vice-Chancellor had assumed : that as no specific rep- resentations had been made by the company, and no specific in- quiry by the plaintiff, his case failed on that point ; and inasmuch as he completed the purchase after being informed of the facts as to defect of title, he could not complain of any previous misrep- resentation. 16 11. But it was declared in the House of Lords, 16 that if reports are made to the stockholders of a company by their directors, and adopted by them at one of their appointed meetings, and af- terwards circulated in their published reports, they are binding upon the company. And if erroneous statements in such reports can be clearly shown to have been the proximate and immediate cause of shares having been bought from the company by any individuals, a court of equity will not permit the company to re- tain the benefit of the contract. 12. But when a company issues a prospectus, a person con- tracting to take shares on the faith of it, has the right to claim, not only that he shall not be misled by any statements actually false, but that he shall be correctly informed by it of all the facts, the knowledge of which might reasonably have deterred him from entering into the contract. 17 But the false representation of an officer is not that of the company, even if made at the office. 18 But to become the act of the company it must be contained in a report of the company adopted at a regular meeting. 18 13. The directors of a railway company are not justified in acting on an old resolution authorizing the issue of shares, after the purpose for which the issue was authorized has ceased to be available ; 19 nor in issuing shares, supposing them to possess the power, for the express purpose of procuring votes to influence a 16 8 Jur. N. S. 575. See here Lord Chelmsford's strictures upon the loose mode of stating fraud. See Royal British Bank in re Mixer's case, 4 De G. & J. 575. See, also, Cullen v. Thompson, in the House of Lords, where all the officers of a company participating in a fraudulent representation are held liable, although but part signed the report. 9 Jur. N. S. 85. 17 N. B. & C. Railw. & Land Co. v. Muggeridge, 1 Drew. & Sm. 3G3 ; s. c. 7 Jur.N. S. 132. 18 Royal British Bank in re, 3 L. T. N. S. 843. M Fraser v. Whalley, 2 H. & M. 10. 566 RAILWAY DIRECTORS. § 135. coming general meeting. 19 An injunction will be issued to re- strain such action of the directors, it not being a question of the internal management of the company, but an attempt to prevent such management being legitimately carried on. 14. In a trial 20 before Martin, B., where it appeared that the profits of the company had been studiously misrepresented by the manner of keeping the books, and a large apparent profit on the year preceding the report presented, by not bringing all the cost of material forward into the account of the year in which it was consumed, it was held that any error in the mere mode of keeping the accounts would not be evidence of fraudulent repre- sentation, but the falsification of facts and figures was so, as against any of the officers of the company who were aware of the issue of the prospectus, and had aided or connived at the mode in which it was made up. 15. It was also held in the last case, that as the statute re- quired the dividend to be declared by the directors, though with the sanction of the shareholders, if to tne knowledge of the direc- tors and officers of the company such dividend so declared by the directors was paid otherwise than out of profits, they are re- sponsible for it, and for the circulation of any declaration of it, acted upon by innocent shareholders. 16. Directors may ratify any contract made on tlieir behalf which they have power to make themselves. 21 And where the constitution of the corporation gives to the directors, with the sanction of an extraordinary meeting of the shareholders, by a majority of two thirds, power to do any act which might be done with the consent of all the shareholders, the directors may lease the entire business of the company in that mode. 22 20 Bale v. Clelland, 4 F. & F. 117 ; Kisch v. Venezuela Railw. Co., 11 Jur. !N. S. 646. The question of fraud by means of inducing a shareholder to buy his shares upon a misapprehension of the true condition of the company, is one of fact, to be judged of by the jury upon a consideration of all the facts, and is mainly one of intent. Cleveland Iron Co. v. Stephenson, 2 F. & F. 428. 21 Wilson v. West Hartlepool Harbor & Railway Co., 11 Jur. N. S. 124. " Featherstonhaugh v. Porcelain Co., 11 Jur. N. S. 994. § 136. WHEN THEY BECOME PERSONALLY RESPONSIBLE. 567 •SECTION II. When Directors become Personally Liable. 1. Not liable personally, for any lawful act done as directors. 4. Extent of powtrs affected often by usage and course of busiriess. 2. But are liable ujxin express undertaking | 5. But if contract is beyond the power of to be personally holden. company, or not in usual form, directors 3. Are liable personally, if they assume to go personally liable. beyond their powers. 6. Statement of case illustrating last point. § 136. 1. The English statute enacts, what was the common law indeed, that no director should become personally liable by * reason of any contract made, or any act done, on behalf of the company, within the scope of the authority conferred by the statutes * of the legislature and the company, or, as it is ex- pressed, " by reason of any lawful act done by them." Corpo- rations are not, in general, responsible for the unlawful or unauthorized acts of their officers. 1 But the corporation may be held responsible for the publication of a libel, by its agents and servants in the due course of the business of the company, as where the company were the owners, and by their agents man- aged the electric telegraph along their line, and sent a despatch to the effect that the plaintiff's bank " had stopped payment," which proved not to be the fact. This despatch was sent for their own protection, in order to insure their agents against taking bills on such bank. But the message went beyond what was necessary for that purpose, and thus made the company responsible as for a voluntary publication. It would have an- swered all purposes to have directed their agents not to take the bills without assigning any reason. 2 So, too, in Philadelphia, Wilmington and Baltimore Railway v. Quigley, 3 it was decided, 1 Mitchell v. Rockland, 41 Me. R. 363. Commissioners to accept subscrip- tions for a corporation, who are by the charter required to give notice of the time and place of opening the books, may give such notice by a majority of their number. Penobscot Railw. v. White, 41 Me. R. 512. 2 Whitfield v. South Eastern Railw., 1 Ellis, B. & Ellis, 115; s. c. 4 Jur. N. S. 688. 3 21 How. (U. S.) 202. * 402 -404 568 RAILWAY DIRECTORS.' § 136. that a railway may become liable for publishing and circulating among its members a statement of the report of the directors, and the evidence on which it is based, although the report itself, when made to the stockholders in good faith, and for their infor- mation upon matters affecting their interest, would be regarded as a privileged communication. 2. But directors have been held liable, in many cases, per- sonally, where the debt was that of the company, and where it so appeared upon the face of the contract. As upon a promissory note, which was expressed, "jointly and severally we promise to pay," " value received for and on behalf of the Wesleyan News- paper Association. S. & W., Directors." 4 But it is ordinarily a question of * intention, whether the directors are personally liable if they act within the powers conferred by the company. 5 3. But where the directors of a railway assume to do an act exceeding their power, as accepting bills of exchange, which * Healey v. Story, 3 Exch. 3. Alderson, B., said the terms, jointly and severally, imported a personal undertaking, inasmuch as they could properly have no application to the company. But see Roberts v. Button, 14 Vt. R. 195, and the cases cited, where the subject is examined more at length than space will here allow. Dewers v. Pike, Murphy & Hurl. 131. But in the case of Lindus i'. Melrose, 31 Law Times, 36, before the Court of Exchequer Chamber (February, 1858), it was held that a promissory note expressed, " For value re- ceived we jointly promise to pay," and signed by three of the directors of a joint- stock company, and countersigned by the secretary, and expressed to have been on account of stock of the company, did not bind the signers personally, but im- ported, on its face, a contract on behalf of the company. 6 Tyrrell v. Woolley, 1 Man. & Gr. 809 ; Burrell v. Jones, 3 B. & Aid. 47. . In a somewhat recent case, Davidson v. Tulloch, 6 Jur. N. S. 543, before the House of Lords, it was determined, that an action may be maintained against the directors of a company in respect of any transactions which the body of the share- holders could not sanction, but in respect of any transaction which they might sanction, although the directors might not have been justified in what they were doing there can be no right of action. And directors are not liable for defect of authority to make a conveyance of property, the sale of which they had negotiated, but the actual sale being broken off by an objection of the vendee's solicitor, that the directors had not the requisite authority. Wilson v. Miers, 10 C. B. N. S. 348. See also Nowell v. Andover & R. Railw. Co., 3 Gif. 112 ; s. c. 7 Jur. N. S. 839. The company are not liable to make good any loss sustained through the false representations of their officers, although incidently benefited thereby, unless they entered into the scheme for the purpose of such gain. Barry v. Croskey, 2 Johns. & H. 1. *405 § 136. WHEN THEY BECOME PERSONALLY RESPONSIBLE. 569 does not come within the ordinary business of railways, they will be personally liable. 6 4. But the business of railways is so much extended in this country, as borrowers of money, carriers, and contractors, in vari- ous ways, that it is not easy to determine, except from each par- ticular case, how far the directors may draw or indorse bills, or, indeed, what particular acts they may or may not do. In a recent case the question of the extent of corporate pow- ers is considerably discussed, 7 and it was held that the exercise of such powers must be conferred by their charters, but that it is the duty of courts to give the charters such a construction as to effect the leading purposes of the grant where that can be done consistently with the grant ; and that business corporations have the power to make such contracts and in such forms as are re- quisite to accomplish the purposes of the grant, having regard to any special limitations contained in such grants, and that promissory notes or bills made or received by such corporations are prima facie valid, but that it is competent to show that the transactions out of which they arise are not within the powers of the corporation and thus defeat their operation. In another case 8 it was held, that primd facie a railway cqmpany had power to execute promissory notes for its legal indebtedness, and that it could do this only by its agents ; that no written or sealed authority to the agent was requisite ; nor that the contract should be under seal unless specially so required by the charter; that it was not important to prove the consideration, as the law will make the same implications in favor of the note of a corpo- ration as in other cases. 5. By the construction of the English statutes, if a trustee or director of any public work made a contract for any matter not provided for in the special acts of the company or by the general statutes, applicable to the subject, or in a different form from 6 Owen & Van Uster, 10 C. B. 318 ; Roberts v. Button, 14 Vt. R. 195. 7 Straus v. Eagle Insurance Co., 5 Ohio St. 59. 8 Hamilton v. Newcastle & Danville Railw., 9 Ind. R. 359 ; M. &. M. Railw. t;. Hodge, Id. 1G3. In Massachusetts it was held that the only remedy under the late statute for a corporate debt, against an officer of the corporation, was in equity. Bond v. Morse, 9 Allen, 471. 570 RAILWAY DIRECTORS. §137. that so provided, he is taken to have intended to become person- ally responsible. 9 6. Thus where a check on the company's bankers, for pay- ment to a third party of the company's money, was drawn by three directors in the name of the company, but the document was signed by them in their own names, and countersigned by the secretary of the company, adding to his name " Secretary," and a stamp bearing the name of the company was affixed, but the three directors did not appear, on the face of the check, to be directors or to sign as such, it was held that it did not pur- port to be the check of the company, and was not binding on them. 10 *SECTION III. Compe?isation for Service of Directors. 1. In England, directors of raihcays are enti- tled to compensation for services. 2. But the company may grant an annuity to a disabled officer. 3. In this country are entitled to compensation, in conformity to the order of the board. 4. Some American cases follow the English rule. 5. Official bonds strictly limited to term for which executed. § 137. 1. In England, in the absence of contract or usage, from which one might be inferred, directors of railways and other corporations are not entitled to compensation for services as directors. This is regarded as an office, and so an honorary service. And a resolution of the board of directors that com- pensation should be allowed for certain specified services, not being under seal, so as to amount to a by-law, will not entitle such director to sue the company for compensation for such service. 1 9 Parrott v. Eyre, 10 Bing. 283 ; Wilson v. Goodman, 4 Hare, 54, 62 ; Higgins v. Livingstone, 4 Dow, P. C. 341. 10 Serrell v. Derbyshire, Staffordshire & Wor. J. Raihv., 19 Law J. 371 ; s. c. 9 C. B. 811. It would seem, that without much latitude of construction this case might have been otherwise ruled, and been more satisfactory. 1 Dunston v. The Imp. Gas L. Co., 3 B. & Ad. 125. But see Hall v. The Vt. & Mass. R., 28 Vt. R. 401. The rule of law in that respect is different in this country, a resolution of the board of directors having the same force, whether *406 § 137. COMPENSATION FOR SERVICE OF DIRECTORS. 571 2. But it would seem, that where the company voted an an- nuity to a disabled officer, in the nature of a retiring pension, and the directors, by deed, in the name of the company, made a formal grant in conformity with the vote, that the contract is binding upon the company, although no power is expressly given by their charter to grant annuities. 2 3. Railway directors in this country are generally allowed compensation, but cannot recover it beyond the rate fixed by the general resolutions of the board. 3 And where a director acts as a member of the executive committee of the board, or in selling the bonds of the company, his service is to be regarded as in his capacity of director, and the amount of compensation is limited to that allowed directors. 3 4. Some of the American states adopt the English rule that railway directors cannot recover compensation for services ren- dered in obtaining subscriptions to the capital stock of the com- pany, before its organization ; or for any other services, unless they are most unquestionably beyond the range of their official duties. 4 And it is here, determined that it would make no dif- ference that the services were rendered under an expectation and an understanding among those engaged in the enterprise that the services should be compensated by the company after its organization. And from the technical embarrassment of hold- under seal or not. Post, § 1G4, ante, § 130. See also Gaskell v. Chambers, 5 Jur. N. S. 52 ; s. C. 26 Beav. 3G0. In this case the directors transferred the busi- ness of the company to another company, and received from the latter a large sum for compensation, and withheld the particulars from their members. It was held they were trustees of the money for the members, and the directors were ordered to pay it into conrt. But the directors are not the servants of the individual share- holders, and therefore such an one who feels aggrieved must seek redress through the company for any misconduct of the directors. Orr v. Glasgow, A. & M. J. R. Co., 6 Jur. N. S. 877. 2 Clarke v. Imp. G. L. Co., 4 B. & Ad. 315. 3 Hodges v. Rut. & Burlington Railw., 29 Vt. R. But where a director per- forms services for the company, disconnected with his office, he is not restricted, in regard to compensation, by any resolution of the board, in regard to the com- pensation to be made the directors. Henry v. Rut. & Bur. Railw., 27 Vt. R. 485. In another case it was held, that railway directors, as a general rule, are not entitled to compensation for their personal services, unless rendered under some express contract. Hall v. Vermont & Mass. Railw., 28 Vt. R. 401. * N. Y. & N. H. Railw. Co. v. Ketchum, 27 Conn. R. 170; post, § 140. 572 RAILWAY DIRECTORS. §138. ing the company bound by any such arrangements before its ex- istence, the policy of the law is wholly opposed to them. 4 We think this by far the most salutary rule upon the subject. 5. It is scarcely necessary to state that official bonds for faith- ful administration by officers of corporations are to be limited strictly to the term for which such officer is elected. And if the office is annual, and the officer continued from year to year, without the renewal of the bond, and the officer's annual ac- count is passed from year to year, until finally a defect occur at a remote period from that covered by the bond, there is no in- demnity to be obtained under the bond. 5 *SECTION IV. Records of the Proceedings of Directors. 1. English statutes require minutes of pro- ceedings of directors and make it evi- dence. 2. Presumptions in favor of their containing all that passed. 3. Company ivill ratify unauthorized act of directors by acquiescence. § 138. 1. The English general statutes require the directors to keep minutes of all appointments, contracts, orders, and pro- ceedings of the directors and committees, in books kept for that purpose, and these, duly made, are receivable as evidence, with- out further authentication. But this is held not to exclude other evidence of such transactions. 1 2. As against the company and the members present at a particular meeting, the minutes of the directors will be held primd facie correct. 2 And where the proceedings of the min- utes of the meeting are imperfect, it will be presumed that everything was brought before the meeting which it was requi- 5 M. & M. Savings Co. v. O. F. Hall Ass., 48 Penn. St. 446. 1 Inglis v. The Great Northern Kailw., 16 Eng. L. & Eq. 55. Lord St. Leonards said, in the House of Lords : " But independently of the evidence fur- nished by the books, the due appointment was proved by a witness, and his evidence was admissible evidence, for the act confers a privilege, but does not exclude other evidence of the fact. Miles v. Bough, 3 Q. B. 845. 2 Ex parte Stark, 10 Jur. N. S. 790. *407 §139. AUTHORITY TO BORROW MONEY, ETC. 573 site to bring before them to have the action of the company valid. 3 3. The legality of the proceedings of directors in purchasing shares of the company for the company, which required the sanction of a general meeting, will be presumed either from lapse of time and no dissent on the part of the shareholders, or from the proceedings of the general meeting at which the mat- ter would naturally have been acted upon not being forthcom- ing, as it was the duty of the company to keep regular minutes of such meeting. 3 And it was also here held that the company, by transferring such shares, thereby confirmed the validity of the transfer to them. 3 So also by paying an annuity the price of such shares. 3 SECTION V. Authority of Directors to borrow Money, and buy Goods. 1. Authority of directors to bind company, express or implied. 2. General agent will bind company within scope of his duties. Directors presumed to asse>it to his contracts. 3. Contracts under seal of company prima facie bind them. A. Strangers must take notice of general want of authority in directors, but not of mere informalities. 5. Cannot subscribe for stock of other com- panies. 6. May borrow money if requisite. 7. How far directors may bind company by accepting land in payment of subscrip- tion. § 139. 1. Joint-stock companies, under many of the English statutes, 1 are held bound by contracts made by a competent board of directors, though not under seal, and not made in strict compliance with the acts. 2 But those who seek to bind 3 Ex parte Lane, 1 De G. J. & Sm. 504, s. c. 10 Jur. N. S. 25. 1 7 & 8 Vict. eh. 110. 2 Ridley v. Plymouth Banking Co., 2 Exch. 711. Where one has the actual charge and management of the business of a corporation, with the knowledge of the directors, the company will be bound by his contracts, made on their behalf, within the apparent scope of the business thus intrusted to him. Goodwin v. Union Screw Co., 34 N. H. R. 378 ; Chicago, Burlington, & Quincy Railw. v. Coleman, 1 8 Illinois R. 297. In this case it is held, the admission of the president of the company in regard to the authority and acts of a sub-agent will bind the company. 574 RAILWAY DIRECTORS. § 139. such companies, on contracts made with the directors, must show their authority to bind the company, either by the terms of the deed of settlement, or that the body of the shareholders authorized these persons to act on their behalf. A ratification by a competent board of directors will bind the company. 2 2. The general rule upon this subject, in regard to goods and money which is obtained by agents, ostensibly clothed with * competent authority, and which actually goes to the use of the company, seems to be that the company is holden. Thus where a joint-stock manufacturing company, having a board of direc- tors, with authority to appoint officers and delegate their au- thority, purchased goods through the general manager of the company, or his deputy, or the secretary, all of whom were duly appointed, and when the goods were delivered on the company's premises, and used for their purposes, they were held liable, on the ground that the manager had authority to give such orders, in the absence of any express provision to the contrary. And it was held that, as to the other, the directors must be taken to have known that the goods had been furnished and used, and that, therefore, the company was liable to pay for them. 3 3. A contract under the seal of the company is primd facie binding upon them. In such case it is not enough, in order to defeat a recovery upon the contract, to show an excess of au- thority on the part of the directors, who made the contract. 4 The 3 Smith v. Hull Glass Co., 9 Eng. L. & Eq. 442. And where the general a^ent of a manufacturing company directed the clerk to issue a promissory note in the name of the company, and it was shown that the note was in the form customarily used by the company, in other similar cases, and which they had always recognized, it was held to be sufficient proof of the execution of the note by the company to go to the jury, and to warrant them in finding that the com- pany had adopted, by usage, the signature of their agent as their own, and in- tended to be bound by it. Mead v. Keeler, 24 Barb. 20. Such company may borrow money for its legitimate business, and bind itself by a written obligation for its repayment. lb. See also Curtis v. Leavitt, 15 New York Court of Ap- peals, 9, where this subject is discussed. 4 Royal British Bank v. Turquand, 32 Eng. L. & Eq. 273. Lord Ch. J. Campbell said, in giving judgment : " A good plea must allege facts to establish illegality, as was done in Collins v. Blantern, 2 Willes, 347, and Paxton v. Pop- ham, 9 East, 408. A mere excess of authority by the directors, we think of itself would not amount to a defence. The bond being under the seal of the company, the gist of the defence must be illegality. If the directors had ex- *408 § 139. AUTHORITY TO BORROW MONEY, ETC. 575 defence must establish such an excess of authority as was known to the other * party, or such as may be presumed to have been so known, and thus virtually establish mala Jides, both on the part of the directors and the other contracting party. 4 4. The case of Royal British Bank v. Turquand, just referred to, was affirmed in the Exchequer Chamber, 5 in which a some- what important distinction seems to be made between a general want of authority in the directors to do the act in question in any case, and a mere want of authority in the particular in- stance, for want of the requisite formalities on the part of the company, they being bound in the latter and not in the former case. Jervis, Ch. J., in giving judgment said, " Parties dealing with these joint-stock companies, through the directors, are bound to read the deed or statute limiting the directors' author- ity, but they are not bound to do more. The plaintiffs, there- fore, assuming them to have read this deed, would have found, ceeded their authority, to the prejudice of the shareholders, by executing the bond, and this had been known to the obligees, illegality, we think, would have been shown. The obligor's in executing, and the obligees in accepting the bond, might be considered as combining together to injure the shareholders. The two parties would have been in pari delicto, and the action could not have been main- tained. In such circumstances potior est condito defendentis. But without the scienter and without prejudice to the shareholders, or any others whatsoever, ille- gality is not established against the obligees. If no illegality is shown as against the party with whom the company contract under the seal of the company, ex- cess of authority is a matter only between the directors and the shareholders." And again, " The plaintiffs have bond fide advanced their money for the use of the company, giving credit to the representations of the directors that they had authority to execute the bond, and the money which they advanced, and which they now seek to recover, must be taken to have been applied in the business of the company, and for the benefit of the shareholders." " The case of Hill v. Man- chester Waterworks Co., 2 B. & Ad. 544, is an instance of such a bond being up- held, the pleas not disclosing any fraud or injury done to the shareholders of the company, and the case of Horton v. Westminster Improvement Commiss., 14 Eng. L. & Eq. 378, Avas decided on the same principle." Agar v. Athenaeum Life Assurance Co., 30 Law Times, 302, is decided on the authority of R. British Bank v. Turquand, infra, n. 5. A release purporting to be under the corporate seal, and signed by the president of the company, and exhibited by them in court, as their act, would operate as an estoppel upon the company, in any suit between the party as to whom the release was given and the company. Scaggs v. Baltimore & Wash. Railw., 10 Md. R. 268. 6 36 Eng. L. & Eq. 142. *409 57G RAILWAY DIRECTORS. § 189. not a prohibition to borrow, but a permission to borrow, on cer- tain things being done. They have, in my opinion, a right to infer, that the company which put forward their directors to issue a bond of this sort, have had such a meeting, and such a resolution passed, as are requisite to authorize the directors in so doing." This rule has been extended to negotiable paper drawn in the name of the company by the directors, beyond the scope of their powers to bind the company, 6 even while in the hands of a bond fide holder. 5. It was held that a joint-stock business company had no power to take stock in a savings bank, and that a loan effected by that means could only be enforced to the extent of the money actually received by the company over and above the amount retained upon the subscription. 7 6. There seems to be no question made of the general right of corporations, both public and private, to borrow money, so far as their legal functions may require it. The rule has recently been extended to insurance companies. 8 But it was once doubted whether this could be done except under the corporate seal. 9 But the cases now show that no such thing is requisite. 10 7. It is made a question in a recent case 11 how far the propo- sition by one to subscribe to the stock of the company, payable in certain specified lands at a given price, may be lawfully ac- cepted by the directors of the company, and whether the same should not be made by a special agent appointed for that pur- pose. But it was held clearly that the separate consent of sev- eral members of the board, not shown to constitute a quorum, did not create an acceptance binding upon the company. 6 Post, § 239, pi. 5. 7 Mutual Savings Bank v. Meriden Agency Co., 24 Conn. R. 159. See also post, § 211, note 3. 8 Nelson v. Eaton, 26 N. Y. R. 410. 9 Wilmot v. Corporation of Coventry, 1 Younge & Coll. Exchequer, 518. 10 Marshall v. Queenborough, 1 Simons & Stu. 520. See cases before referred to in this section. And it was held that the directors of a company incorporated for making a cemetery could not raise money, by indorsing and accepting bills, for the purposes of the undertaking. Steele v. Harmer, 14 M. & W. 831. The same principle is recognized in the earlier cases. Broughton r. Manchester Waterworks, 3 B. & Aid. 1. ; Clarke v. Imperial Gas-Light Co., 4 B. & Ad. 315. 11 Junction R. Co. v. Reeve, 15 Ind. R. 236. § 140. MUST SERVE INTEREST OF COMPANY. 577 ♦SECTION VI. Duty of Railway Directors to serve the Interests of Company. 1 . General duty of such office defined. 2. Claim for secret service and influence with directors. 3. Opinion of Justice Hoffman upon the legality of such contracts. n. 3. Cases reviewed upon the subject of secret services. 4. Directors cannot buy of themselves for the company. What amounts to ratifica- tion. 6. Purchase of shares to buy peace. 7. Director may loan money to company. 8. Director de facto sufficient. 9. Hotel company may lease premises to others. 10. Director cannot recover for work done for company; 11. Contract of projector not binding on com- pany. 12. Director cannot act where interested. 5. The point further illustrated. Authority I 13. Court will not act on petition of member of directors. who is a mere puppet for others. § 140. 1. The general duty of railway directors is stated, somewhat in detail, in another part of this work. 1 It is an im- portant and public trust, and whether undertaken for compen- sation or gratuitously, imposes a duty of faithfulness, diligence, and truthfulness in the discharge of its functions, in proportion to its difficulty and responsibility. 2. An important case, involving incidentally the duty of rail- way directors, arose recently, in the Superior Court of the city of New York. 2 The plaintiff claimed pay for labor and services, in procuring for the defendants the contract for the construction and equipment of the Ohio and Mississippi Railway, from Cincinnati to St. Louis. The mode of his performing this service seems to have been through one Clement, who knew nothing of defend- ants, but who acted upon the plaintiff's recommendation of them, and, for the agreed compensation of -$10,000, secretly influenced the directors of the railway, by personal solicitation, to give the contract to the defendants. 3. Mr. Justice Hoffman, in giving judgment, makes some sug- gestions, upon the general subject, well worthy of our notice. " Undoubtedly this was the employment of Clement, for a bribe, 1 § 211, n. 6, post. 2 Davidson v. Seymour et al. General Term, April, 1857, Law Reporter, July, 1857, p. 159; Redmond v. Diekerson, 1 Stockton, Ch. 507. VOL. I. 37 *410 0< RAILWAY DIRECTORS. § 140- to use personal influence with the directors, to secure a lucra- tive contract for one, of whose capacity and responsibility he was entirely ignorant. He was to use this secretly, and with individuals. " The directors of this great railroad scheme, if they stood not in the capacity of public officers, owing a duty to the state, yet were trustees of the stockholders of the road, and owed the best efforts of industry, integrity, and economy to them. " No one can deny, that a stipulation for any personal advan- tage or profit, which might attend and influence the discharge of their * trust to the stockholders, would be a violation of duty ; and no engagement given to them, or contracts made with them, for that object, could bear the scrutiny of the law. " If, again, one of their officers, if Mitchell, for example, em- powered to negotiate and finally to settle the contract with Sey- mour, had received an obligation for the payment of a sum of money for his services, it could never have been enforced." The learned justice cited and commented upon the following cases in support of the principle which would avoid such agreements ; 3 3 Gray v. Hook, 4 Comst. 449 ; Waldo v. Martin, 4 Barn. & Cress. 319 ; s. c. 2 Carr. & Payne, 1; Harrington v. du Chastel, 2 Swanston, 167; Hopkins v. Prescott, 4 Com. Ben. 578 ; Money v. Macleod, 2 Simons & Stuart, 301 ; Marshall v. Balti- more and Ohio Railroad Co., 16 Howard (U. S.), 314, 325; Fuller v. Dame, 18 Pick. 472. Lord Chancellor Eldon says, in regard to one acting as the agent of others, and who secured a large sum to himself, without the knowledge of those on whose behalf he acted, " It is impossible for this court to sanction such a pro- ceeding." Fawcett v. Whitehouse, 1 Russ. & M. 132. Mr. Shelford, the learned author of the Treatise on Railways, thus lays down the rule, in regard to the duty of the directors of a railway company, pp. 193, 194. " The employment of a director is of a mixed nature, partaking of the .nature of a public office If some directors are guilty of a gross non-attend- .ance, and leave the management entirely to others, they may be guilty, by these •means, of the breaches of trust which are committed by others. By accepting a trust of this sort, persons are obliged to execute it with fidelity and reasonable diligence, and it is no excuse that they had no benefit from it, and that it was .merely honorary Supine and gross negligences of duty will amount to a breach of trust." Charitable Corporation v. Sutton, 2 Atk. 400. The same principle, in regard to the effect of the service being gratuitous, is found in the celebrated case of Coggs v. Bernard, 1 Salk. 26. In Marshall v. Baltimore and Ohio Railw., supra, Mr. Justice Grier made some very pertinent remarks, in regard to the duty of courts of justice, in enforcing against railway companies *411 §140. MUST SERVE INTEREST OF COMPANY. 579 and continued : " I am led to the conclusion, that it would be impossible to allow Clement to sustain an action upon the agree- contraets for obtaining legislative grants, by extraordinary efforts and influences, secretly exercised. This was an action to recover $ 50,000 for secret service, in getting a bill through the legislature of Virginia, giving the company the right to carry their road through the state. The learned judge said : " All persons whose interests may in any way be affected by any public or private act of the legislature, have an undoubted right to urge their claims and arguments, either in person or by counsel professing to act for them, before legislative committees, as well as in courts of justice. But where persons act as counsel or agents, or in any representative capacity, it is due to those before whom they plead or solicit, that they should honestly appear in their true characters, so that their arguments and representations, openly and candidly made, may receive their just weight and consideration. A hired advocate or agent, assuming to act in a different character, is practising deceit on the legislature. Advice or information flowing from the unbiased judgment of disinterested persons, will naturally be received with more confidence and be less scrupulously examined than where the recom- mendations are known to be the result of pecuniary interest, or the arguments prompted and pressed by hope of a large contingent reward, and the agent ' stimulated to active partisanship by the strong lure of high profit.' Any at- tempts to deceive persons intrusted with the high functions of legislation, by secret combinations, or to create or bring into operation undue influences of any kind, have all the injurious effects of a direct fraud on the public. " Legislators should act with a single eye to the true interest of the whole people, and courts of justice can give no countenance to the use of means, which may subject them to be misled by the pertinacious importunity and indirect in- fluences of interested and unscrupulous agents or solicitors. "Influences secretly urged under false and covert pretences must necessarily operate deleteriously on legislative action, whether it be employed to obtain the passage of private or public acts. Bribes, in the shape of high contingent com- pensation, must necessarily lead to the use of improper means and the exercise of undue influence. Their necessary consequence is the demoralization of the agent who covenants for them ; he is soon brought to believe that any means which will produce so beneficial a result to himself are ' proper means,' and that a share of these profits may have the same effect of quickening the perceptions and warming the zeal of influential or ' careless ' members in favor of his bill. The use of such means and such agents will have the effect to subject the state governments to the combined capital of wealthy corporations, and produce uni- versal corruption, commencing with the representative and ending with the elector. Speculators in legislation, public and private, a compact corps of venal solicitors, vending their secret influences, will infest the capital of the Union, and of every state, till corruption shall become the normal condition of the body politic, and it will be said of us as of Rome, — ' omne Romce venale.' " The following cases take a similar view. Wood v. McCann, 6 Dana, 366 ; Hunt v. Test, 8 Alab. R. 713 ; Harris v. Roof, 10 Barb. 489 ; Rose v. Truax, 21 *412 580 RAILWAY DIRECTORS. § 140. ment with him. * There was in it most of the elements of a vicious contract, which have avoided similar obligations in the Barb. 361. The enormity of such transactions, in some quarters, if* universal and concurrent general opinion may be regarded as authentic, is truly appalling to any just sentiment of confidence in official fairness, and responsible relation to public trusts. It is probable that the virus of the disease lies deeper in the fountains of the common moral sentiment than we have generally supposed. We feel no disposition to join in a general outcry upon the subject. For we do not believe, as a general thing, that such evils are likely to be cured by any formal criticisms, either in the abstract or in particular cases, whether it come from the bench or the press. The difficulty is one which, for its cure, demands sterner remedies. The perpetrators of such enormities are quite too apt to con- sider, that because they have been made the victims of some severe strictures, in high places perhaps, they have expiated their guilt, and perhaps earned an indulgence for the future ; and so rush at once into a deeper chasm of iniquity, just as soon as another tempting occasion presents. And it is not uncommon, that the administrators of the law, even in such cases, after having administered a somewhat scathing rebuke to the perpetrators of such crimes, begin to feel compunctious visitings, and terminate the drama, which was introduced with such a high-sounding announcement, by the infliction of a most insignificant penalty, which renders both the law and its ministers more or less objects of contempt. The true method undoubtedly, in such cases, if we desire to make the law, as it should be, a just and unaffected terror to evil-doers, is to say little, but do justice. Let the judgments of the courts, rather than the comments of the judges, testify to the sense of abhorrence of such crimes. These philippics from the bench generally are very justly regarded, not only by the people at large, but by the culprits themselves, as a kind of apology for the sentence, and thus destroy half its good effect. And if the other half is deducted by the judge, on account of the plainness and the honesty of the rebuke which he has already administered to the offender, very little remains. But the exposition of the subject, in an important case in the City of New York, is so instructive, that we venture to repeat it here. In re Robert W. Lowber v. The Mayor, Aldermen, and Commonalty of the City of New York ; and In re A. C. Flagg, Comptroller, and others, tax-payers, v. Lowber. The wist of these cross-actions is, that by collusion with certain of the city authorities, Lowber was to receive $ 200,000 for a piece of land for a market on the East River. The arrangement was made by consenting to a judgment of court on the report of a referee. Comptroller Flagg, upon hearing of this judgment, took measures for obtaining a stay of proceedings. In giving judgment on this mo- tion, Roosevelt, J., said : — " The decision of the general term of the superior court, it may be said, was not pronounced, and of course was not known till some months after the title in this case was passed, and even some weeks after the judgment in the present action was entered. But the fact, while it affords matter of vindication to the *413 § 140. MUST SERVE INTEREST OF COMPANY. 581 leading cases cited. There * was secrecy, individual application, a concealed promise of compensation, and utter ignorance and corporation counsel, is at the same time, of itself, a sufficient reason, under the circumstances, for opening the judgment, — a reason, as it seems to me, not only sufficient, but controlling, leaving in any just view of the subject no alterna- tive. To say that the citizens, in such a case, are to hazard more than a half million of dollars, the probable cost of land and market, and that there is no relief, would be monstrous. The proposition shocks all our notions of law and judicial proceedings, and especially when broached in a court having, by the constitution, general jurisdiction in law and equity." " ' As matter of law,' (says the counsel of the city in his second point), ' I deny that the corporation can be ordered by this, or any court, to defend a suit.' The counsel seems to forget that if the corporation (by which he means the aldermen and other officers of the corporation) cannot be ordered to defend a suit, the corporators may be permitted to do it for them ; and that if the court cannot compel the corporation to resist an unjust claim, it can refuse to permit its records to be used as the machinery for enforcing it. " If this were not so, of what avail would be the legislative restrictions on the power of contracting debts and on the power of exercising extensive functions ? All the property of the city, and all its revenues, past, present, and prospective, from taxation or otherwise, might be disposed of without appeal, by a single act of mortgage or conveyance, clothed in the form of a concerted judgment — a judgment, at the most, nominally defended, but really confessed — and of which, as in this case, the court itself, without its knowledge, might be made to figure as the innocent author. " As matter of law, I deny that the court can be made, and thus in effect ' ordered,' by the boards of direction, by whatever name called, of this or any corporation, thus to lend its aid to violate the law and ruin the corporators. Nor is it true either, that the corporation counsel, in the defence of suits in this court, brought against the city, is subject to the absolute orders of the two boards, and ' only responsible ' to them. Although, in the loose language of ordinary discourse, the aldermen and assistant aldermen are commonly called ' the corporation,' they are in fact only its legislative, as distinguished from its executive, organs. The corporation of the city, as we have seen, consists of the whole body of the citizens. The citizens are the quasi stockholders. The ' charter officers,' whether legislative or executive, including the ' head of the law depart- ment,' are merely the agents and trustees of the citizens, and all ultimately re- sponsible to them. It is an error on the part of the corporation counsel to as- sume, as he does in his third point, that he is ' responsible only to his client,' and that the client is the common council, as distinguished from the ' com- monalty.' His office is the direct gift of the people, made elective for the express purpose of putting an end to the subserviency previously supposed to exist, and of creating a check or counterpoise in its stead. Nor is this'all ; the corporation counsel, when conducting the prosecution or defence of a suit in court, is an officer of the court, and as such, and like any other attorney in like *414 582 RAILWAY DIRECTORS. § 140. recklessness as to the competency of the party whose cause he was promoting, and whose reward he was to receive. There is the difference, that these directors were servants of an organi- zation inferior to that of a state, yet acting in a very spacious sphere, and representing an extensive body of constituents. The difference between their * position and that of legislators, upon a question like this, appears to me but shadowy. " If, then, the claim of Clement would be promptly rejected, does the present plaintiff stand in a better position ? His orig- inal employment might have been consistent with an open, avowed agency, an intent or instructions to make it known, and thus be free from all objections. But we are left in ignorance of what the terms of such original agreement were, — how far they extended. All is indefinite, except merely an employment. He engages Clement, and here again, that employment may have been perfectly free from censure on the plaintiff's part. But upon the best consideration we can give, we cannot separate the act of Clement from the acts of the plaintiff. There is a legal identity far the purposes of this action. The plaintiff must be held to have employed Clement to do what he did do, or to have been bound to superintend his proceedings, and free them from what was illegal. It is impossible to permit him to profit by the misdeeds of his own agents, however ignorant and exempt from case, responsible to the court. Although subject, within certain limits, to the legally authorized resolutions of the common council, when acting in his general character of ' counsel to the corporation,' when acting as an attorney of the court he is subject to the rules and regulations of the court, and with this in- timation will, I have no doubt, be ' perfectly prepared [see his communication] to perform any duty which such a result, or the office he holds, may devolve upon him.' " An order will, therefore, be entered (first submitting a draft to the court for settlement), directing that the judgment and execution be set aside, as also the answer, reference, and report ; and that a new answer, to be prepared by the counsel to the corporation, and approved by the comptroller, be filed and served in twenty days from the date of this order, unless the comptroller, within the said twenty days, should elect, as he may, officially, and as a tax-payer and cor- porator, on behalf of himself and others, to file an original bill of complaint, set- ting forth such matters and making such parties, and praying such relief in the premises as he may be advised." See also Semmes v. Mayor, &c. of Columbus, 19 Ga. R. 471. Ante, § 176. *415 § 140. MUST SERVE INTEREST OF COMPANY. 583 them himself. His ignorance, when knowledge was a duty, becomes equivalent to a fault." 4. The directors of a corporation, created for business purposes and profit, are trustees for the shareholders, and owe them all the duties and responsibilities which attach to other trustees and agents. If, therefore, a director enter into a contract for the company, he can derive no personal benefit from it. 4 Accord- ingly, where the company had furnished the director with a large sum of money, to enable hiih to purchase the concession of another company in regard to their line, and he purchased it, as it turned out, of himself, being the concealed owner of it, it was held that the transaction could not stand, but the company must adopt or repudiate it altogether. But the company having sold the concession during the pendency of a suit impeaching the transaction, it was held they could have no relief, either as to the application of the money or otherwise. 5 5. And where the directors of an insurance company had pur- chased the stock of one of the board, and allowed him to retire from his position both as director and shareholder, and had used the funds of the company to compensate him for his shares, it was held that this was such an irregularity as could not be con- firmed and legalized by a meeting of the shareholders even, un- less the deed of settlement under which the company was formed provided for its being so ratified, or for its transaction by the di- rectors. 6 And it was held, that in such case a bill in equity, filed by certain shareholders on behalf of themselves and the others against the company and the directors, praying that the directors might be decreed to restore to the company the funds so diverted by them, was maintainable. 6 6. It seems to be regarded as a valid contract between the different directors of a corporation, by which one portion pur- chase the interest of another portion, to enable them to retire with a view to heal dissensions in the board ; and the fact that the money is paid by the company's bankers and refunded by a 4 Great Luxembourg Raihv. v. Maguay, 25 Beavan, 586 ; s. c. .4 Jur. N. S. 839. 4 See also Sturges v. Knapp, 31 Vt. R. 1. 5 Hodgkinson v. National Live Stock Ins. Co., 5 Jur. N. S. 478, 969 ; s. c. 26 Beav. 473. 584 RAILWAY DIRECTORS. § 140. resale of the shares thus purchased, will not render the contract invalid. 7 7. But where by a constitutional provision of a corporation the director's office was vacated, if he participated in the profits of any contract with the company, but the company were empow- ered to borrow money on the director's own individual responsi- bility, or on other securities, it was held that a director, lend- ing his own money to the company at a large interest, was not thereby disqualified from being a director. 8 8. A director who acts as such by sitting at the board and executing works for the company, will be treated as such so far as his claim against the company is concerned, although he was not properly appointed. 9 9. It is not ultra vires for a hotel company to lease part of their premises to a business company, with the condition that the first company shall have the exclusive privilege of supplying the por- tion so leased with all provisions, wines and liquors. 10 10. Under the English statute 11 it is an answer to a claim for compensation for works of the company executed by the plaintiff, that he was at the time of entering into the contract interested therein, and it makes no difference that the consideration was executed, and the company had had the benefit of the contract. 12 11. A contract made between the projector of a corporation and the directors of the company thereafter created, which is not in terms made conditional on the completion of the company, is not under the English statute binding upon the company when fully established. 13 12. A rule of the constitution of the company, whereby a di- rector is prohibited from voting upon any matter in which he is interested, will not preclude him from voting as a shareholder at 7 Haddon v. Ayers, 5 Jur. N. S. 408. 8 Bluck v. Mullalue, 5 Jur. N. S. 1018; s. c. 27 Beav. 398. 8 South Essex Gas Light & Coke Co., in re 20 L. J. Ch. 43. 10 Simpson v. Westminster Palace Hotel Co., 6 Jur. N. S. 985 ; s. c. 2 De G. F. & J. 141 ; s. c. 8 Ho. Lds. Cas. 712. 11 7 & 8 Vic. c. 110, § 29. 12 Stears v. South Essex Gas Light & Coke Co., 9 C. B. N. S. 180; s. c. 7 Jur. N. S. 447. See also Walker ex parte, 8 De G. M. & G. 607. 13 Gunn v. London & Lancashire Ass. Co., 12 C B. N. S. 694. §141. EMPLOYEES DISMISSED. RULE OF DAMAGES. 585 a general meeting. 14 But the resolution of a board of directors, of which the creditor is a member, acknowledging the existence of a debt barred by the statute of limitations, will not operate to remove such bar, if indeed any resolution of the board will bind the company to that extent. 15 • 13. Although it is the unquestionable right of every member of the company to restrain the unlawful acts of the directors, still when it appears that the plaintiff is a mere puppet in the hands of others not members of the company, who indemnify him against the costs of the suit, the court will not interfere by inter- locutory injunction, 10 SECTION VII. Right to dismiss Employees. — Rule of Damages, when done wrongfully. 1. Some cases hold, that if wrongfully dis- missed may recover salary. 2. English courts do not favor this view. Case stated by English judges. 3. The American cases have sometimes taken the sa7ne view. 4. Where the contract provides for a term of wages, after dismissal, it is to be regarded as liquidated damages. 5. Statute remedy, in favor of laborers of contractors, extends to laborers of sub- contractors. § 141. 1. Where a railway company dismiss a servant, super- intendent, or other employee, without just cause, it seems to be considered, in some cases, that they are primd facie liable for the salary, for the full term of the employment. 1 This proposition has been often made by judges, and seems to have been acqui- esced in, by the profession, to a very great extent, but in a late English case, 2 * where the subject is examined with great thor- 14 Lead Mining Co. v. Merry weather, 10 Jur. N. S. 1231 ; s. c. 2 H. & M. 254. 15 Gold Mining Co., ex parte, 10 L. T. N. S. 229. 15 Filder v. L. Brighton & South Coast Railw. Co., 1 H. & M. 489. 1 Costigan v. The Mohawk & Hudson Railw., 2 Denio, 609. ! Goodman v. Pocock, 15 Q. B. 576. This is the case where a clerk, dismissed in the middle of the quarter, brought an action for the wrongful dismissal, on the special contract, and, in the trial of the action, the jury were instructed that they should not, in assessing damages, take into account the services rendered by plaintiff in the broken quarter, for which he had received no pay. The plaintiff then brought this action for those services, and here the court held, that those *416 586 RAILWAY DIRECTORS. § 1-41. ouglmcss, the opinion of the judges certainly seems to incline to a different result. Patteson, J., said : — 2. " I am not aware that this precise point has been raised in any case." .... " Mr. Smith, 2 L. Cases, 20 says, ' that a clerk, servant, or *agent, wrongfully dismissed, has his election of three remedies. 1. He may bring a special action for his master's breach of contract, in dismissing him. 2. He may wait till the termination of the period for which he was hired, and may then perhaps sue for his whole wages, in indebitatus assumpsit, relying on the doctrine of constructive service. Gandell v. Pontigny, 4 Ca,mp. 375. 3. He may treat the contract as rescinded, and may immediately sue upon a quantum meruit, for the work he actually performed. Planche v. Colburn, 8 Bing. 14.' I think Mr. Smith has very properly expressed himself with hesitation, as to the second of the above propositions ; it seems to me a doubtful point." Lord Campbell, Ch. J., and Coleridge, J., both agree that the party, dismissed without cause, may bring indebitatus assumpsit, for the service actually performed, or may sue for the breach of the contract in dismissing plaintiff, but cannot do both. And Erie, J., lays down the rule very distinctly, and, as it seems to us, upon the only sound and sensible basis. " The plaintiff had the option, either to treat the contract as rescinded, and to sue for his actual service, or to sue on the contract for the wrongful dismissal As to the other option, referred to by Mr. Smith, I think that the servant cannot wait till the expira- tion of the period for which he was hired, and then sue for his whole wages, on the ground of a constructive service, after dis- missal. I think the true measure of damages is the loss sus- tained at the time of dismissal. The servant after dismissal may and ought to make the best of his time, and he may have an opportunity of turning it to advantage. I should not say any- thing that might seem to doubt Mr. Smith's very learned note, if my opinion on this point were not fortified by the authority of the Court of Exchequer Chamber, in Elderton v. Emmens, 6 Com. B. 160." services should have been taken into account in assessing damages in the former action, and that no recovery could be had in this action, on account of the former recovery. § 141. EMPLOYEES DISMISSED. — RULE OF DAMAGES. 587 * 3. The cases 3 in this country have sometimes taken a simi- lar view of the rule of damages, in such cases, and the rule must, we think, ultimately prevail everywhere. 4 4. Where the contract specifies the time for which the party employed shall be entitled to wages after notice of dismissal, that is to be regarded as stipulated damages for the breach of the contract. 5 But even this cannot be recovered under the indebi- tatus count, for work and labor. 6 5. Where the statute provides, that the laborers of contractors upon a railway may give notice to the company of their wages remaining unpaid, in certain contingencies, and thus charge the company, the provision was held to extend to laborers and work- men of sub-contractors. 7 * Algeo v. Algeo, 10 Serg. & Rawle, 235 ; Donaldson v. Fuller, 3 Id. 505 ; Perkins v. Hart, 11 Wheaton, 237. 4 Spear & Carlton v. Newell, Sup. Ct. Vt., not reported. In this case the plaintiff sued for the price of rags and other materials furnished, to supply a paper-mill of defendant, under special contract. The materials were, at one time, unfit for use, on account of latent defects, for which by the contract the plaintiffs were liable. The defendant claimed the rule of damages should be the rent of the mill and the expense of supplying workmen until good materials were furnished. But the court held, that it was the duty of the defendant to make the best of the case, on his part, and that he could only recover such damages as intervened, before he had opportunity to supply himself with proper materials for use. 6 Hartley v. Harman, 11 Ad. & Ellis, 798. 6 Fewings v. Tisdal, 1 Exch. 295. 7 Kent v. New York Central Railw., 2 Kernan, 628. Peters v. St. Louis & Iron Mountain Railw., 24 Mo. R. 58G. Where the statute in such case makes the company liable for thirty days' labor of the workmen, it is not indispensable that the labor should have been performed in thirty consecutive days, to entitle them to compensation against the company. Such claims may be sued in the name of an assignee, under the new code of Missouri. lb. Post, § 232, n. 5. *417 588 ARRANGEMENTS BETWEEN COMPANIES. §142. ♦CHAPTER XXII. ARRANGEMENTS BETWEEN DIFFERENT COMPANIES. SECTION I Leases, and similar Contracts, require the Assent of Legislature. 1 . By English statutes one company may pass over road of another, but contract binding. 2. But cannot transfer duty of one company to another, without legislative grant. 3. Original company liable to public, after such lease. But lessee not excused. 4. Courts of eqxdty enjoin companies from leasing, without legislative consent. 5. But such contracts, made by legislative grants, are to be carried into effect. 6. Majority of company may obtain enlarged powers, with new funds. 7. So the majority may defend against pro- ceedings in legislature. 8. Legislative sanction will not render valid contracts ultra vires. 9. Railway company cannot assume duties of ferry, without legislative grant. 10. The grant to a railway of the implied right to establish a ferry over a public river directly beyond the terminus of its road, does not extend the fesponsibility of the company to the ferry. 11. Such a ferry may become an encroachment upon another by carrying passengers gratuitously. 12. The grant to a railway of a ferry in ex- press terms will not authorize them to carry anything except passengers and freight passing over their line. § 142. 1. The English statute 1 gives special permission to one company to contract with other companies for the right of passage over their track. And this has been construed, to give the right to contract for the privileges ordinarily attaching to such passage, of stopping at the stations, and taking up and putting down passengers and freight. 2 The parties will be bound by the terms of the contract, notwithstanding the ninety- second section of the act, which gives all companies and persons the right to use railways upon the payment of the tolls demand- able. 3 1 8 and 9 Vict. ch. 20, § 87. 2 Simpson v. Denison, 16 Jurist, 828 ; 2 Shel., Ben. ed. 694; 13 Eng. L. & Eq. 359. 3 Great Northern Kailw. v. Eastern Co. Railw., 9 Hare, 306 ; 2 Shel., Ben. ed. 696 ; 12 Eng. L. &. Eq. 224. *418 § 142. LEASES, ETC, REQUIRE CONSENT OF LEGISLATURE. 589 2. But an agreement between railway companies, without the authority of the legislature, transferring the powers of one com- pany to the other, is against good policy, and a court of equity * will not lend its aid to carry such contract into effect. 4 But it has been held, that a contract, by which one railway gives another the right of passage, upon the guaranty of a certain per cent profit upon their stock and all other investments, is a payment of tolls within the statute. 5 It seems to be considered, by the English courts, that one railway leasing its entire use to another company does not come within this section of the general statute, and as the public thereby lose the security of the first company, for care and diligence, in the discharge of its public duties, the contract, unless made in pursuance of an act of the legislature, or ratified by such act, is illegal, as against public policy. 6 At all events a court of equity may properly de- cline to lend its aid in enforcing a specific performance of such contract. 7 4 Same case, 12 Eng. L. & Eq. 244 ; South Yorkshire Railw. v. Great N. Raihv., 19 Eng. L. & Eq. 513 ; Johnson v. Shrewsbury & B. Railw., Id. 584 ; Lond. B. & South Coast R. v. L. & S. W. R. & Portsm. R., 5 Jur. N. S. 801. Where the subject is extensively examined by the Lord Chancellor, and the cases commented upon. In a recent case before the Superior Court of Cincinnati, Ohio & Miss. Railw. v. Ind. & Cin. Railw., the question of the right of a railway, chartered by one state to contract with the railways of other states for permanent privileges in running cars upon such railways, is extensively considered and denied by Storer, J. The case illustrates very forcibly the demand which obvi- ously exists for making all lines of railway extending into different states na- tional agencies rather than mere state institutions. For military and postal purposes railways are far more national than banks, and as means of intercom- munication equally so. 5 The South Yorkshire R. & R. D. v. Great Northern Railw., 22 Eng. L. & Eq. 531 ; s. c. in Exchequer Ch. 25 Eng. L. & Eq. 482. One company having made a beneficial contract with another company in regard to traffic, may, with a lease of itself, transfer the benefit of this contract. London & S. W. Railw. v. South E. Railw., 20 Eng. L. & Eq. 41 7. 6 Johnson v. The Shrewsbury & Birmingham Railw., 19 Eng. L. & Eq. 584 ; Troy & Rut. Railw. v. Kerr, 17 Barb. 581. This doctrine is reaffirmed in the House of Lords in Shrewsbury & B. Railw. v. L. & N. W. R., in May, 1857, 29 Law Times, 186. 7 South Yorkshire & River Dun Co. v. Great N. Railw., 19 Eng. L. & Eq. 513 ; Johnson v. Shrewsbury & Birmingham R., 19 Eng. L. & Eq. 584 ; Shrewsbury *419 590 ARRANGEMENTS BETWEEN COMPANIES. § 142. 3. But even where such contracts have been made, by permis- sion of the legislature, it has been held, in this country, that the company leasing itself does not thereby escape all responsibility to the public. But that the public generally may still look to the original company, as to all its obligations and duties, which grow out of its relations to the public, and are created by charter and the general laws of the state, and are independent of con- tract or privity between the party injured and the railway. 8 But there seems no good reason to excuse the company, assum- ing to act as common carriers, by virtue of the lease of another company's road, from the ordinary responsibility of common & Birm. Railw. v. London & N. "W. & Shropshire Union Railw., 21 Eng. L. & Eq. 319 ; s. c. 1 Eng. L. & Eq. 122. But see cases ante, n. 5 ; post, § 185. 8 Nelson v. The Vermont & Canada Railw., 26 Vt. R. 717. But it is, perhaps, worthy of consideration, in regard to this case, that the effect of legislative con- sent to the lease is not made a point or decided in this case. Sawyer v. The Rut. & Burl. Railw., 27 Vt. R. 370. And in Parker v. Rensselaer & Saratoga Railw., 16 Barb. 315, where the. defendants were running upon the Saratoga & Sche. Railw. by virtue of a contract, and the plaintiff's cow was killed through defect of cattle-guards, which it was the duty of the Saratoga & Sche. Railw. to main- tain, it was held the defendants were not liable, the neglect being attributable to the Saratoga & Sche. company. Perhaps the only question in regard to the soundness of this decision is, whether both companies are not chargeable with negligence, the one for suffering the road to be used, and the other for using it in that condition. This is the view taken of the law in Clement v. Canfield, 28 Vt. R. 302 ; ante, § 169. Ohio & Miss. Railw. v. Dunbar, 20 111. R. 623. But in the York & Maryland Line Railw. v. Winans, 1 7 How. 30, it is decided, that where a railway is chartered by one state, and all its stock owned and the road operated by a corporation erected and existing in another state, the first corporation is nevertheless liable to the patentee of an improvement in railway cars for the use of his patent, cars of that construction having been procured and used upon the road by the corporation owning the stock of such company. Campbell, J., said, " The corporation cannot absolve itself from the performance of its obligations, without the consent of the legislature." But one company giving permission to another to use a part of their track, do not thereby become bound to keep the track in such repair as to be safe for use. Nor do such company thereby assume any obligation towards the passengers carried thereon by such other company. Murch v. Concord Railw., 9 Foster, 9 ; post, § 183. See also Briggs v. Ferrell, 12 Ired. 1. And in Vermont Central Railw. v. Baxter, 22 Vt. R. 365, the company are held liable for the acts of the cont-ator in the exercise of the right of eminent domain, in obtaining materials for constructing the road. § 142. LEASES, ETC., REQUIRE CONSENT OF LEGISLATURE. 591 carriers for the transportation across the portion of the route held by lease, on the ground of the responsibility of the company owning and leasing the road, even when the loss occurred from the default of the latter company in not performing the stipula- tions in their lease. 9 Nor can the lessees of a railway excuse themselves from responsibility in such cases on the ground that their lease is void, being taken without the sanction of the legis- lature. 9 And a railway company is always responsible for an injury oc- casioned by want of proper care and prudence on the part of its servants, in the management of a train which is under their ex- clusive care, management and control, although belonging to another company. 10 But if such injury is occasioned by the negligence of another company, whose car, for the purpose of being loaded by the plaintiff, has been placed upon a side track of defendant's which is in constant use by other roads, that other company is bound to use reasonable care to prevent a collision, and if it fails to do so, whereby the plaintiff receives an injury, he cannot recover of the company whose cars caused the collis- ion. 10 And if such injury results from the negligence of another company, which has a joint right with the defendants to use de- fendant's track, under a lease, and which is running trains over defendant's road on its own account, the defendants are not responsible. 10 There can be no question of the liability of the company leas- ing another line of railway, whether within or beyond the limits of the state where the first company exists, for all acts and omis- sions whereby injury accrues to other parties, while so operating such other line, as lessees, to the same extent and in the same manner precisely as if such injury had occurred upon the line of the first company. And it seems to be the inclination of the American courts to hold this in regard even to those companies who have assumed to operate the roads of other companies, whether temporarily or permanently, and whether by express legislative sanction or not. 11 This subject is very extensively discussed in the case last referred to, and the views presented, 9 McCluer v. Manchester & Lawrence Railw., 13 Gray, 124. 10 Fletcher v. Boston & Maine Railw., 1 Allen, 9. 11 Bissell v. Mich. So. & N. Ind. Railw., 22 N. Y. Court of Appeals, 258. 592 ARRANGEMENTS BETWEEN COMPANIES. § 142. although differing somewhat from those hitherto adopted by the English courts, certainly have very much to commend them to favorable consideration. But the original company will be re- sponsible even for the safe delivery of goods carried over the line, where it is leased to a corporation out of the state. 12 * 4. The English courts have in some instances evon restrained railway companies from carrying contracts of leasing into effect, without the authority of the legislature. 13 5. But such contracts being legal, and not inconsistent with the policy of the acts of parliament, are to have a reasonable construction ; and where, by the creation of new companies and other facilities, the business is very largely increased, the parties are still to abide by the fair construction of the original contract, as applicable to the altered circumstances. 14 6. There is no doubt of the right of a railway company in England to apply to the legislature for enlarged powers, even for the power to become amalgamated with other companies, so as to make one consolidated company. And contracts between the different companies, for this purpose, have been there recognized, and enforced, in courts of equity. 15 And while the courts of equity will * enjoin the companies from applying their funds to pay the expenses of such parliamentary proceedings, they will not enjoin them from obtaining additional powers, by legislative acts, when other parties volunteer to furnish the requisite funds. 16 And there seems to be no question made, in the English courts, of the power of parliament to extend the line of a railway, or to consolidate existing companies, and that the shareholders are bound, by the acceptance of such legislative provisions, by a majority of the company, or by contracts to procure such powers by act of parliament. 17 12 Langley v. Boston & Maine Railw., 10 Gray, 103. 13 Winch v. Birkenhead, L. & C. Railw., 13 Eng. L. & Eq. 506 ; Beman v. Rufford, 1 Simons (x. 8.) 550; s. c. 6 Eng. L. & Eq. 106. 14 East Lancashire Railw. v. The L. & Yorkshire Railw., 25 Eng. L. & Eq. 465. 15 Mozley v. Alston, 1 Phillips, 790, where Lord Cottenham said : " There is scarce a railway in the kingdom that does not come to parliament for extension of powers." 16 Stevens v. South Devon Railw., 2 Eng. L. & Eq. 138 ; Great Western Railw. v. Rushout, 10 Eng. L. & Eq. 72; post, § 252. 17 Great Western Railw. v. Birm. & Oxford Junction Railw., 5 Railw. C. 241. *420, 421 § 142. LEASES, ETC., REQUIRE CONSENT OF LEGISLATURE. 593 7. And it has accordingly been held, that a public company, as the commissioners of sewers for a county, might impose a rate to defray the expense of opposing a bill, in parliament, which threatened to affect the interests of the company unfavorably, the same as they might to defray the expense of litigation in court. 18 Lord * Campbell said : " Our determination rests upon the ground that this opposition was clearly bond fide , and clearly prudent." 8. In a very recent case, in Vice-Chancellor Wood's court, 19 The Lord Chancellor says, that to nullify, in a court of equity, all contracts made upon the faith of obtaining the consent of the legislature to carry them into effect, would be " to nullify many family agreements, and all contracts by persons pro- jecting new companies." Shrewsbury & Birm. Railw. v. London & N. W. Itailw., 9 Eng. L. & Eq. 394. And it has been held, in an important case in the Circuit Court of the United States, Columbus, Piqua. & Ind. Railw. v. Indianapolis & Bellefontaine Railw., 5 McLean, 450, that an agreement between two railway companies to build their roads from certain cities, to meet at a given place, and that the charges for trans- portation shall be regulated by both companies, and also the meeting of the cars, and the through freight cars, is a valid contract, and will be enforced by injunc- tion in equity. That to fix the charge for the transportation of passengers and freight, is the exercise of the corporate franchise of each company, and an agree- ment that both companies shall regulate this is no abandonment or transfer of the franchise of either. 18 Reg. v. Commissioners of Norfolk, 15 Q. B. 549. The ground upon which the decisions in England and America, which hold the franchises of corporations not to be assignable except by consent of the legislature, rest, is mainly the same as that upon which it has been held in this country, that such franchises are be- yond legislative control, namely, that the charter constitutes a contract between the sovereignty and the corporation, on the one part, for the grant of certain privileges and immunities, and upon the other for the performance of certain duties and functions, which are deemed an equivalent or consideration. And this feature is of peculiar force in the case of that class of corporations upon which the legislature have conferred important public duties and functions, as railways and banks, and some others. The state confers upon a railway some of its most essential powers of sovereignty, that of eminent domain, and of a virtual monopoly in transportation of freight and passengers, and in return therefor stipulates for the faithful performance of these duties by the corporation. The corporation have no more right, in equity and justice, to transfer their obli- gations to other companies, or to natural persons, than the state have to with- draw them altogether. Either would be regarded as an abuse of the powers conferred, or an impairing of the just obligation of the contract resulting from the grant, and its acceptance. 19 . Leominster Canal Co. v. Shrewsbury & Hereford Railw., 29 Law Time? VOL. I. 38 *422 594 ARRANGEMENTS BETWEEN COMPANIES. § 142. the defendants entered into an agreement to purchase plain- tiffs' property, there being at the time no legislative permis- sion either to buy or sell such property. Subsequently such permission was obtained, and steps taken by the defendants, under the act, to carry the contract into effect, but they ulti- mately refused to complete their purchase, on the ground that the original agreement was not under the seal of the corpora- tion, nor signed by two of their directors. The plaintiffs then filed a bill for specific performance, and it was held, that the bill mus"t be dismissed, on the ground that the contract was origi- nally ultra vires, not being made dependent upon obtaining the consent of the legislature. It is also said, that the contract would not be binding upon the company, unless made under their common seal, that being required in the defendants' spe- cial act, and if it were binding, that mandamus is the more ap- propriate remedy. 9. A railway company cannot acquire the franchise, so as to be bound to perform the duty of an existing ferry, without the authority of the legislature, given either expressly, or by neces- sary implication. 20 10. And the grant to a railway company, having its terminus at the bank of the river Hudson, opposite the city of Albany, of power to connect its terminus upon one side of the river with a depot upon the opposite bank ; though it does, by implication, give the right to establish a ferry, does not make it a part of the railway, so that passengers crossing the river may be regarded as carried under the general railway franchise. 11. And where the grant of such a ferry was restricted, by express condition, to the transportation of freight and persons carried by the railway, and their servants and employees, it was held that the company, by constantly carrying other persons gra- tuitously across their ferry, were guilty of an infringement of the 342, August, 1857. The learned judge concludes his opinion in this case in a manner very creditable to his sense of fair dealing and good faith in the conduct of railway directors : " I cannot, however, but feel that solicitors acting for rail- way companies, like that of the defendants, must be in a most painful position ■when they are unable to rely (as here they cannot) upon the good faith or even the common honesty of directors." *> Battle, J., in State v. Wilmington & Manch. Railw., Barber, 234. §143. WHAT CONTRACTS MUST BE UNDER SEAL. 595 franchise of a pre-existing ferry, the same as if such persons were carried for toll. 21 12. And the grant in express terms of a ferry as a portion of the line of a railway, will not empower the railway company to use the ferry for any other purpose than the transportation of the freight and passengers of the company. 22 •SECTION II. Necessity of Contracts of Corporations being under Seal. 1 . The English courts manifest great reluc- tance to abandon the former rule of law on this subject. n. 2. Extended review of the English and some of the American cases. 2. Reference to later decisions. § 143. 1. The apparent hesitation among the English courts and text-writers x to accept the acknowledged rule of the Ameri- can courts, that a corporation may as well contract, by mere words, without writing, or by implication of law, or by vote, or by writing, without seal, as a natural person ; in short, that in the case of a contract, by a corporation, a seal is of no more neces- sity or significance than in the case of a contract by a natural person, would seem to justify some reference here to the present state of the English law upon the subject. 2 81 Aikin v. The Western Railw., 20 New York Court of Appeals, 370. 22 Fitch v. N. H. N. L. & Stonington Railw. Co., 30 Conn. R. 38. 1 Hodges on Railways, 59, 60, 61, and notes. 3 It would seem a very obvious view of the question, that if a seal is not, as was at one time claimed, indispensable to the authentication of a corporate con- tract ; if, in short, it can be dispensed with in any case, it becomes merely a matter of reason and discretion, or more properly, perhaps, of intention and convenience, in order to show the definite act of the company, and when it shall be required, or when a contract shall be said to be complete without it, is rather a question of usage than an unbending rule of law. Beverley v. Lincoln Gas Light & Coke Co., 6 Ad. & Ell. 829, is the case.of gas-meters ordered for the use of the company by one of the committee, taken on trial, and not returned in a reasonable time, and the company held liable. This is the earliest case in the English books where the courts in that country made any formal departure from the old rule, and it was here held, that a corporation aggregate is liable in assumpsit for goods sold and delivered. Patteson, J., refers to the American authorities upon the subject, and says : " It is well-known that the ancient rule *423 596 ARRANGEMENTS BETWEEN COMPANIES. § 143. 2. The English courts in many recent cases seem to have ap- plied the general rule of presumption, by which the conduct of of the common law, that a corporation aggregate could speak and act only by its common seal, has been almost entirely superseded, in practice, by the courts of the United States." And after stating the greater facilities here for advance- ment in jurisprudence, the learned judge enters a formal disclaimer against " the right or the wish to innovate on the law upon any ground of inconven- ience, however strongly made out"; "but when we have," says the learned judge, " to deal with a rule established in a very different state of society, at a time when corporations were comparatively few in number, and upon which it was very early found necessary to ingraft many exceptions, we think we are justified in treating it with some degree of strictness, and are called upon not to recede from the principle of any relaxation in it, which we find to have been established by previous decisions." And this seems to form the basis of the sub- sequent decisions of the English courts upon the subject. The decisions have evinced an effort to preserve the rule, and at the same time to invent and ingraft such a number of exceptions upon it as really to meet all the inconvenience or absurdity which could fairly be objected against the old rule. But in settling the exceptions, the decisions have not always commended themselves as consist- ent either with reason or with each other. Thus affording another striking illustration of the folly of attempting to maintain an absurd rule, by multiplying exceptions, every one of which was based upon a principle of reason, which, if carried to its legitimate results, would subvert the rule itself. This was in 1837, in the K. B., and established the exception to the old rule of executed contracts for goods sold and used by the company in the business for which it was created. The next year the same court held, that a corporation might also maintain an action upon an executory contract not under seal. Church v. The Imperial Gas- Light & Coke Co., 6 Ad. & Ell. 846. This was upon a contract to take gas of the company, which the defendant' below declined to receive. In 1843 a case arose in the C. P. Fishmonger's Co. v. Robertson, 5 M. &. G. 131. This was an action upon a contract to pay the plaintiffs l,O0OZ. to withdraw their opposition to a bill in parliament, and to promote its passage into a law, the parties being mutually interested in the same, and alleging performance of the contract on the part of the plaintiff. The subject was very much considered, and an elab- orate opinion delivered by Tindal, Ch. J., and it was decided, that the contract having been executed on the part of the corporation, and the defendants having received the full consideration, were bound by the contract, and that the con- tract was not void as against public policy. See also Arnold v. The Mayor of Poole, 4 Man. & Gr. 860 (1842) to the same effect, where it is held, that no municipal corporation but that of London can appoint an attorney except under the corporate seal. Mayor of Ludlow v. Charlton, 6 M. & W. 815 (1840). But the court of Q. B., in 1846 (Sanders v. St. Neot's Union, 8 Q. B. 810), held, that if work be done for a corporation, and adopted by them for purposes connected with the incorporation, although not under seal, they are liable for it. The case of the Governor & Company of Copper Miners v. Fox, 3 Eng. L. & Eq. § 143. WHAT CONTRACTS MUST BE UNDER SEAL. 597 natural persons is to be judged of, to corporations. Thus 3 it was held, that where a company has stood by and seen works per- 420 (1851), holds that the plaintiffs could not sue upon a mutual contract, be- cause the plaintiff's portion of it, not being under seal, and being for the deliv- ery of iron rails, and the plaintiffs being incorporated for dealing in copper, not coming within the proper business of the company, as a trading company, they were not bound by it, and by consequence the defendants were not. This case admits the exception from the old rule of all contracts pertaining to the proper business of the incorporation, and then attempts a distinction between dealing in iron and copper ! — a distinction which, if it be of any force, would show that the contract, being ultra vires, would not bind the company in any form. The next case (Homersham v. Wolverhampton Waterworks, 6 Railw. C, 790, ante, § 113), in the order of time, is for extra work, under a contract, which was done in express violation of the provisions of the general contract, in regard to extra work, and was not authorized, in the manner required in relation to contracts, by the company's charter. It seems to have been correctly enough decided, upon either ground, that no recovery could be had. Ante, § 113, and cases cited. Lamprell v. Billericay Union, 3 Exch. 283 (1849). But Cope v. Thames Haven Dock & Railw. Co., 3 Exch. 841, seems to be an express decision affirming the general necessity of the corporate seal to bind the company (1849). So also Diggle v. The London & Blackwall Railw., 5 Exch. 442, is of the same charac- ter, being for extra work performed in express violation of the general contract ; and there are some other cases of this kind in the English Reports. But the next case in the order of time, involving the general question, is Fin- lay v. Bristol & Exeter Railw., 9 Eng. L. & Eq. 483, and here it was held, that although a corporation was liable for use and occupation, on a parole demise, it is only liable for the actual occupation, and a continuous occupation, for sev- eral years, will not render the corporation tenants from year to year. In Clark v. The Guardians of the Cuckfield Union, 11 Eng. L. & Eq. 442, the cases are all elaborately reviewed by Wightman, J., and the conclusion arrived at, that whenever the purposes for which a corporation is created render it necessary that work should be done, or goods supplied, to carry such purposes into effect, and such work is done, or such goods supplied, and accepted by the corporation, and the whole consideration for payment is executed, the corporation cannot re- fuse to pay, upon the ground that the contract was not under seal; and the case of Lamprell v. Billericay Union, 3 Exch. 283, is seriously questioned. In Lowe v. The London & N. W. Railw., 14 Eng. L. & Eq. 18, it is held, that where a railway have taken possession of land, and occupied it, by the permission of the owner, for the purposes of their incorporation, that they are liable to be sued in assumpsit, for use and occupation, notwithstanding they have not entered into a contract under their common seal. But in the case of Smart v. The Guardians of the Poor of West Ham Union, 30 Eng. L. & Eq. 560 (1855), the question came before the Court of Exchequer, and the judges manifested a firm deter- 3 Hill v. South Staffordshire Railw. Co., 11 Jur. N. S. 192. 598 ARRANGEMENTS BETWEEN COMPANIES. § 143. formed, it will be held to have assented to them, as much as if it had been a natural person. But the principle that a company ruination to adhere strictly to the old rule. Parke, B., says : " With respect to the case of Clavk v. The Guardians of the Cuckfield Union, I must say that I am not satisfied with the observations of my brother Wightman, for if that case be correctly decided,-the effect would be to overrule several previous decisions of this court." And Alderson, B., says : " We must adhere to former decisions, till overruled by a court of error." But in the case of the Australian Royal Mail Co. v. Marzetti, in June, 1855, in the Court of Exchequer, 32 Eng. L. & Eq. 572, Pollock; Ch. B., says, in re- gard to a contract not under seal : " The principle applicable to corporations is, that in respect of small matters, where it would be absurd and inconvenient to require them to put their seals to contracts, in those cases they may contract without seal," also " in respect of matters for which it was created." " These principles," adds the learned chief baron, " are founded on justice, public con- venience, and sound sense," and he might have said, perhaps, with equal pro- priety, will finally be found virtually to include all the legitimate business of corporations. For it is impossible to make any sensible distinction, between the proper business of a corporation, as appears upon the face of their charter, and that which is purely incidental or ancillary to the proper business of the corpora- tion. And this is conceded by Lord Campbell, in the Governor & Company of Copper Miners v. Fox, when refining upon the very elemental distinction be- tween a trade in iron and copper. And if we allow corporations to bind themselves, without seal, in all the busi- ness created by their charter, and in all that is incidental thereto, we shall have few cases remaining. The only remaining case, directly upon the subject, which has yet reached us, is that of Henderson v. The Australian Royal Mail Steam Nav. Co., 32 Eng. L. & Eq. 167 (June, 1855), where the defendants, a company incorporated for the purpose of carrying the mails, passengers, and cargo, between Great Britain and the Cape of Good Hope and Australia, and for that purpose to construct and maintain steam and other vessels, and to do all such matters as might be in- cidental to such undertaking, entered into a contract with the plaintiff to go out to Sydney and bring home a sloop belonging to the company which was unsea- worthy, and it was held, that the action might be maintained, for the service performed under the contract, although the contract was not under seal. The opinion of the judges at length will afford the safest commentary upon the present state of the English law upon the subject, and will present a very in- structive contrast with the quiet, and perfectly settled, and satisfactory state of the law here upon the same subject, from having, as we believe, more wisely, abandoned a rule which grew out of an uncultivated state of society, and which had a very limited application, when adopted, and which is found, in practice, utterly inconsistent with the views of business men, in all commercial countries, at the present day. Wightman, J. : " I am of opinion that our judgment should be for the plaintiff. § 143. WHAT CONTRACTS MUST BE UNDER SEAL. 599 is not bound by a deed of agreement entered into by its direc- tors or trustees for and on behalf of the company, which is not This is an action against the Australian Royal Mail Steam Navigation Company, which is a company constituted expressly for the purpose of carrying on a trade by vessels; it is incorporated 'for the purpose of undertaking the establishment and maintenance of a communication, by means of steam navigation, or other- wise, and the carrying of the royal mails, passengers, and cargo, between Great Britain and Ireland, and the Cape of Good Hope and Australasia,' and for that purpose it must maintain and employ many vessels. Can it be doubted that amongst the ordinary operations of the company there would arise a necessity for employing persons to navigate or bring home vessels which met with accidents abroad ? The words of the contract, as set out in the declaration, show an em- ployment directly within the .scope of the objects for which the company was incorporated. " It is true there is a conflict of authorities which it is difficult to reconcile. Two or three cases in the Court of Exchequer, Lamprell v. The Billericay Union, 3 Exch. 283, and the Mayor of Ludlow v. Charlton, 6 M. & W. 815, and Arnold v. The Mayor of Poole, 4 Man. & Gr. 8G0, in the Court of Common Pleas, appear to militate against the view taken by this court. But those deci- sions proceded upon a principle adapted to municipal corporations, which are created for other objects than trade; and the Court of Exchequer applied that principle to modern trading companies, which are of an entirely different character. " In early times there was a great relaxation of the rule which required that the contracts of corporations should be -under seal, and that relaxation has been gradually extended. At first the relaxation was made only in those cases men- tioned by Mr. Lush, when the subject-matter of the contract was of small moment and frequent occurrence, which in the case of municipal corporations might be the only exceptions necessary. But in the later cases there was a further re- laxation, especially in the case of corporations created by charter for trading purposes, and other like corporations. The general result of the cases men- tioned in Clark r. The Guardians of the Cuckfield Union, 16 Jur. 686 ; s. c. 11 Eng. L. & Eq. 442, is, that in the case of trading corporations, wherever the contract relates and is essential to the purpose for which the company was in- corporated, it may be enforced, though not under seal. In deciding that case, I reviewed all the cases, and adhere to the opinion which I then expressed, that in such a case as the present, where the contract is essentially necessary to the objects of the company, and directly within the scope of their charter, it may be enforced, though made by parol." Erie, J. : "I am of opinion that the contract is binding on the corporation, though not under seal, on the ground that it is directly within the scope of the company's charter. " The authorities are apparently conflicting, but none conflict with the princi- ple laid down by my brother Wujhtman, in which I concur. In Beverley v. The Lincoln Gas Light and Coke Company, 6 Ad. & Ell. 829, the supply of gas was 600 ARRANGEMENTS BETWEEN COMPANIES. § 143. under the seal of the company, 4 is still adhered to by the Eng- lish and Irish courts. And to this extent the rule may not be directly incident to the purpose for which the company was incorporated. So also in Church v. The Imperial Gas Light & Coke Company, 6 Ad. & Ell. 846 ; and in Sanders v. The Guardians of the St. Neot's Union, 8 Q. B. 810; and in the elaborate judgment of Wightman, J., in Clark v. The Guardians of the Cuckfield Union, 16 Jur. 686 ; s. c. 11 Eng. L. & Eq. 442, it was assumed that the matter was within the scope of the company's charter. " The judgment delivered by Lord Campbell, Ch. J., for this court, in the Copper Miners' Company v. Fox, 16 Q. B. 229 ; s. c. 3 Eng. L. & Eq. 420, enunciated the principle. The principle affirmed by this series of cases does not conflict with the two leading cases in the Court of Exchequer, which were cases of municipal corporations. Neither building, which was the matter in the Mayor of Ludlow v. Charlton, 6 M. & W. 815, nor litigation, which was the matter in Arnold v. The Mayor of Poole, 4 Man. & Gr. 860, was incidental directly to the purposes for which the corporations of those towns were con- stituted. " The other cases to which I adverted were corporations for trading purposes, and it is difficult to reconcile them. In Lamprell v. The Guardians of the Bil- lericay Union, 3 Exch. 283, the action related to the building a workhouse, with which the defendants were, as a corporation, connected. Diggle v. The London & Blackwall Railw., 5 Exch. 442, is that which to the greatest degree conflicts, unless it can be distinguished or explained on the ground that it was a unique contract ; if it cannot, I do not agree to it ; and in this conflict of authorities I adhere to those who oppose it. " The notion that a set of contracts shall have their validity depending on the frequency and insignificancy of the subject-matter is of such extreme pernicious- ness, that I do not think that it can be adhered to, and must be considered as ap- plicable only to municipal corporations. It has been so held as to contracts for servants, but I do not think that it was meant to be said that the contract was valid if the matter was of small importance, and invalid if the matter was of great importance ; and indeed, in the case of trading companies, which it is allowed may draw and accept bills of exchange not under seal, it is obvious that insig- nificancy is no element ; neither is the frequency or rarity of the contract an element. The nature of the contract and the subject-matter of it must be the principle which governs the question whether it is valid, though not under seal. It would be pernicious to the law of the country, that under the semblance of a contract parties should obtain goods or services, and not be compellable to pay for them. The Court of Exchequer had an opinion that it would be important that the rule should be certain ; but their resort to the rule, that the contract in all cases, with the above-mentioned exceptions, should be under seal, cannot be acted upon." Crompton, J. " I concur in the principle now adopted by my brothers Wight- 4 McArdle v. Irish Iodine Co., 15 Ir. Com. Law, 146. § 143. WHAT CONTRACTS MUST BE UNDER SEAL. 601 objectionable. But there are many American cases, where the construction in favor of the responsibility of the company for the man and Erie. It is desirable that in the case of trading corporations there should be a relaxation of the rule, that the contract of corporations should be under seal, where the contract is for the purpose of carrying on their trade. That principle was supported in The Copper Miners Company v. Fox, 16 Q. B. 229 ; s. c. 3 Eng. L. & Eq. 420, and Clark v. The Guardians of the Cuckfield Union, 16 Jur. 686 ; s. c. 11 Eng. L. & Eq. 442 ; and it is an important prin- ciple, and may be the governing principle in these cases ; and but for the two cases in the Court of Exchequer, I should think that the appointment of the plaintiff in this case did not require a seal. I cannot, however, distinguish this from Lamprell v. The Guardians of the Billericay Union, 3 Exch. 283, and Diggle v. The London & Blackwall Railw. Company, 5 Exch. 442 ; and if the judgment of the court depended upon me, I might defer to them, at the same time wishing the other principle to prevail. I cannot disguise from myself that we are deciding against the cases in the Court of Exchequer, and the rule which that court adopted. But I agree with what my brothers have said ; and I will add, that those cases created considerable surprise at the time " And in a still more recent case, Reuter v. The Electric Telegraph Co., 37 Eng. L. & Eq. 189 (May, 1856), in the Court of Queen's Bench, the defendants had made a contract, under their corporate seal, with the plaintiff, to transmit all his messages, and all he could collect, for a commission not exceeding £500, or less than £300 per annum, and while this contract was in existence, the chairman of the company entered into a parol agreement with the plaintiff, to pay him at the increased rate of £50 per cent., in consideration of the plaintiff's further services in collecting public intelligence and sending it by the company's telegraph. These additional services were found to be beneficial to the com- pany, and this agreement Was entered upon the minutes of the company, and the plaintiff had received £300 for services in pursuance of it. The deed of settlement provided, that all contracts, where the consideration exceeds £50, should be signed by three directors. It was held, that the parol contract having been acted upon, and ratified by the company, was binding upon them. De Grave v. The Mayor of Monmouth, is a case of ratification, 4 C. &P. 111. And in Bill v. The Darenth Valley Railw., 37 Eng. L. & Eq. 539, the Court of Exchequer held, that one who had served the company, as secretary, might recover compensation for his services, although the remuneration to be paid him had not been fixed, at a general meeting of the company, as required by the English statute. That was held to determine the duty of the directors towards the company, and not to limit the liability of the company to third parties, which is the view taken of the subject here. Noyes v. Rut. & Burling. Railw., 27 Vt. R. 110-113; ante, § 136, n. 5. But it has been held, that if a corporation contract through an agent, who at- taches a seal to his execution of the contract on their behalf, it thereby becomes the deed of the company, although the seal was not their common seal, and an 602 ARRANGEMENTS BETWEEN COMPANIES. § 143. act of the directors, even in executing a contract under seal, without using the specific seal of the corporation, is more forci- ble, the directors for the time being held to have adopted the seal used as the corporate seal, the same as any number of nat- ural persons may adopt the same seal. But this latitude of con- struction in regard to the seal of a corporation is common in this action of assumpsit cannot be maintained upon it. Porter v. Androscoggin & Kennebec Raihv., 37 Maine R. 349. But it must be executed in the name of the company. Sherman v. New York Central Railw., 22 Barb. 239. If, in an action of assumpsit, upon a contract, purporting to be executed by a railway company, the company claim that it was executed under their seal, and that therefore an action of assumpsit will not lie upon it, and prevail, upon this ground, they are estopped to deny, in a subsequent action of covenant, upon the same contract, that the seal attached to the contract is the seal of the com- pany. Philadelphia, Wilmington & Baltimore Railw. v. Howard, 13 Howard, 307. But the English courts do not hold the corporation absolutely bound by con- tracts under their common seal, thus reducing the question to one of authority, in fact, to enter into the contract. Shrewsbury & Birmingham Railw. v. Lon- don & N. W. Railw. ; House of Lords, May, 1857, 29 Law Times, 186. In The London Docks Co. v. Sinnott, 30 Law Times, 164, (Nov. 1857), the Court of King's Bench maintain the general rule that " corporations aggregate can only be bound by contracts under the seal of the corporation." Lord Camp- bell, Ch. J., in giving judgment, enumerates the following exceptions to the gen- eral rule, mercantile contracts, contracts with customers, and such as do not ad- mit of being executed under seal, as bills of exchange. But in some English cases, decided since the publication of the second edition of this work, it seems to be conceded that corporations may be as much bound by the contracts of their agents as natural persons. Thus in Wilson v. The West Hartlepool Railw. Co., 10 Jur. N. S. 1064, it was held that when a company, through their directors, hold out to the world that a person is their agent for a particular pur- pose, they cannot afterwards dispute acts done by him, within the scope of such countenanced agency. And accordingly where the general manager of a rail- way company had in several instances entered into contracts for the sale of the company's lands, which contracts had been adopted by the company, and he entered into a contract with the plaintiff for the sale to him of a portion of their land, and in pursuance of the terms of the contract the company's servants laid down a branch line of railway, and the plaintiff removed machinery and other effects to the land, and no act was done by the company to lead the plaintiff to believe that the contract had been entered into without authority ; but they subsequently repudiated the authority of the manager and refused to convey the land to the plaintiff, upon bill for specific performance ; it was held that the case fell within the principle of the London & Birmingham Railw. Co. v. Win- ter, Cr. & Ph. 57, and specific performance was decreed. § 144. DUTY OF COMPANIES TO PASSENGERS AND OTHERS. 603 country, it being generally held indispensable to bind the com- pany by deed that their corporate seal should be used. *SECTION III. Duty of the respective Companies to Passengers and Others. 1. Company bound to keep road safe. Act 6. This rule extends to railways, where per- of other companies no excuse. sons are rightfully upon them. 2. Some cases hold that passengers can only n. 3. Cases, as to the necessity of privity of sue the company carrying them. 3. Passenger curriers bound to make landing- places safe. 4. But those who ride upon freight trains, by favor, can only require such security as is usual upon such trains. 6. Owners of all property bound to keep it in state, not to expose others to injury. contract existing, reviewed. 7. One who keeps open public works is bound to keep them safe for use. 8. Corporations presumptively responsible to the sa7ne extent as natural persons iti the same situation. § 144. 1. A public company, like a canal or railway, who are allowed to take tolls, owe a duty to the public to remove all ob- * structions in the canal or upon the railway, although not caused by themselves or their servants, but by those who are lawfully in * the use of the canal or railway, or by mere stran- gers. 1 Nor can a * railway company excuse themselves from lia- bility for injury to passengers carried over any part of their road, by showing that the * particular neglect was that of a servant em- ployed and paid by a connecting road as a switchman at the junction of two railways. 2 * 2. But it was held that a passenger, who suffered an injury in attempting to get upon the cars of one company while using 1 Parnaby v. Lancaster Canal Co., 11 Ad. & Ell. 223 ; and Lancaster Canal Co. v. Parnaby, Id. 230. See post, § 145, pi. 7, 8, and note. * McElroy v. Nashua & Lowell Bailw., 4 Cush. 400. Shaio, Ch. J., here says : " The switch in question, in the careless and negligent management of which the damage occurred, was a part of defendants' road, over which they must necessarily carry all their passengers, and although provided for, and at- tended by a servant of the Concord company, at their expense, yet it was still a part of the Nashua & Lowell Railroad, and it was within the scope of their duty to see that the switch was rightly constructed, and attended, and managed, be- fore they were justified in carrying passengers over it." *424-429 604 ARRANGEMENTS BETWEEN COMPANIES. § 144. the road of another company, by contract with such company, through a defect in the construction of the road of the latter company, could not maintain an action against them, there be- ing no privity of * contract between the plaintiff' and such com- pany ; the remedy being in such case against the company who were carrying the plaintiff as a passenger. 3 3 Murch v. The Concord Railw., 9 Foster, 9; Winterbottom v. Wright, 10 M. & W. 109. But a railway company owe a public duty, independent of all privity of contract, to keep their public works in such a state of repair, and so watched and tended as to insure the safety of all who are lawfully upon them, either by their direct permission or mediately through contract with other parties. Sawyer v. Rutland & Bur. Raijw., 27 Vt. R. 377. This is here thus stated by Ishani, J. : " That duty is imposed upon the defendants at common law, and it arises not from any contract of the parties, but from the acceptance of their charter, and from the character of the services they have assumed to perform. The obligation to perform that duty is coextensive with the lawful use of the road, and is required as a matter of public security and safety." The same principle is maintained in Smith v. New York & Harlem Railw. Co., 19 N. Y. R. 127, where it was decided that a switch-tender, employed by a rail- way company on a portion of its road upon which it permits another company to run trains, is not a servant of the latter ; and an engineer of the latter, in- jured by the negligence of such switch-tender, may maintain an action against the company employing him. But where animals were killed by the train of one company, while rightfully upon the track of another company, it was held that the company owning the road was responsible for the damage. Ind. & Mad- ison. Railw. v. Solomon, 23 Ind. R. 534. So an apothecary, who sold a deadly poison labelled as a harmless medicine, was held directly liable to all persons injured thereby, in consequence of the false label, without fault on their part. The liability of the apothecary arises, not out of any contract or privity between him and the person injured, but out of the duty which the law imposes upon all, to avoid acts in their nature dangerous to the lives of others. He is liable, there- fore, though the poisonous drug, with such label, may have passed through many intermediate sales before it reaches the hands of the person injured, upon the same principle that one who suffers a dangerous animal to go at large, is respon- sible for the consequences. Thomas v. Winchester, 2 Seld. 397. In Toomey v. London Br. & South C. Railw., 3 C. B. (N. S.) 146, the plaintiff mistook a door at a railway station, and passing through it, instead of another, fell down a flight of steps and was hurt. There was a light over the door which he intended to pass through, and a printed notice showing the purpose of it. There was also an inscription over the other, but no light. The defendant could not read. There was no evidence that the steps were more than ordi- narily dangei*ous. Held that the company were not liable. But a railway company is bound to fence a station so that the public may not be misled, by seeing a place unfenced, into injuring themselves by passing that way, being the *430 § 144. DUTY OF COMPANIES TO PASSENGERS AND OTHERS. 605 3. And while the cases recognize the duty in such companies as carry passengers, either, upon their own road or that of other companies, by permission or lease, to make the approaches to such road safe, at all points where freight or passengers are usually received, this duty does not exist in regard to a passen- ger who, out of special favor, is allowed to get upon the train at an unusual place for receiving passengers. 3 4. And one who, by favor, is allowed to travel upon a freight- car, contrary to the usual custom of the company, is bound to be satisfied with such facilities and accommodations as usually exist upon freight trains, as railway companies are not to be regarded as common carriers of passengers upon their freight trains, unless they make it an habitual business. 3 5. It has been held that natural persons, who assume no pub- lic duties, are liable, if they suffer their property to remain in a dangerous condition ; as that the occupier of land is bound to fence off a hole or area upon it which adjoins or is so close to a highway that it may be dangerous to passers-by, if left un- guarded. 4 shortest to the station. Where a passenger, in waiting for a train, had gone to a public house for refreshments, the porter showing him the way with his lantern, and hearing the bell ring started out for the station, and mistaking the light of the engine for that of the station crossed an open space direct, and was injured by falling into a hole three feet deep, it was held the company were liable. Bur- gess v. Great Western Railw., 6 C. B. N. S. 923. Nor is a railway company liable for an injury through the defect of a crane which they had furnished to enable the consignee of heavy goods to unlade them from the cars, although such crane was known to them to be inadequate for the use for which it was furnished, the party injured having been employed to assist the consignee, and thereby lost his life. The case is put upon the ground of want of privity, it being admitted that the company would, in such case, have been liable to the party to whom they furnished the crane, if he or his ordinary servants had sustained injury in its prudent and lawful use. But the party here was called in for the occasion. Blakemore v. the Bristol & Exe- ter Railw., 31 Law Times, 12. It seems to us the principle of want of privity is here misapplied. This is a clear case of tort and not of contract, and the party injured, although called in for the occasion, was pro hac vice a servant of the borrower, and it was the same as if the borrower himself had been injured. The furnishing the instrument had express and direct reference to its use by the consignee and his servants, extraordinary as well as ordinary. 4 Barnes v. Ward, 2 Carr. & K. 661. 606 ARRANGEMENTS BETWEEN COMPANIES. § 144. 6. The same rule has often been extended to turnpike roads 5 * and to plank roads, where the statute made no provision for the liability of the company. 6 And the same rule has been ex- tended generally to railway companies in this country, without question, so far as persons are rightfully in the use of the same. 7 It was held that the owner of a car which was in the use of an- other party, upon a railway, by contract between him and the company, and suffered an injury by reason of the bad state of the railway, might maintain an action against the company. 7 7. This principle, or an extension of it, has been a good deal discussed in a very late case in the House of Lords. 8 The plain- 8 Randall v. Cheshire Turnpike Co., 6 N. H. R. 147 ; Townshend v. Susque- hannah T. Co., 6 Johns. 90. 8 Davis v. Lamoille County Plank Road, 27 Vt. R. 602. In the very recent ease of Gibbs v. Trustees of the Liverpool Docks, 31 Law Times, 22 (Feb., 1858), it was held, in the Exchequer Chamber, reversing the judgment of the Court of Exchequer, that it is the duty of those receiving tolls, whether as trustees or otherwise, not to allow a dock to remain open for public use, when they know that it is in such a state that it cannot be used without danger, citing Parnaby v. Lancaster Canal Co., 11 Ad. & Ell. 223, and distin- guishing the case from Metcalfe v. Hetherington, 11 Exch. 257. But it seems the party is never liable in such case, unless he knew or might have known of the defect but for his own neglect of duty. McGinity ». Mayor of New York, 5 Duer, 674. See post, n. 8. T Cumberland Valley Railw. v. Hughs, 11 Penn. St. 141. 8 The Mersey Docks & Harbor Board v. Penhallow. 12 Jur. N. S. 571 (1866). The recent cases bearing upon the general question of the responsibility of one party for negligence in his own business} which incidentally operates to produce injury to another, and which are here discussed by court or counsel, are the following: Metcalfe v. Hetherington, 5 H. & N 719; Coe v. Wise, 10 Jur. N. S. 1019; Holliday v. St. Leonard's, Shoreditch, 8 Jur. N. S. 79; s. c. 11 C. B. N. S. 192; Pickard v. Smith, 10 C. B. N. S. 470; Southampton & I. Bridge Co. v. The Local Board of Health, 8 Ellis & Bl. 801 ; Ruck v. Williams, 3 H. 6 N. 308; Whitehouse v. Fellowes, 10 C. B. N. S. 765; Brownlow v. The Metropolitan Board, 8 Jur. N. S. 891 ; s. c. 13 C. B. N. S. 768 ; Jones v. The Mersey Board, 11 Jur. N. S. 746. There is obviously considerable conflict in the decisions bearing upon the general question involved. The result of the discussion in the latest case before the court of last resort in England, supra, seems to be, that the statute is the only and sufficient warrant for creating any such public work as a railway, harbor, or canal. But the responsibility of those to whom the power is given, depends upon the provisions and construction of the statute ; that it is unimportant whether the grantee of the power be a natural or corporate person, the respon- *431 § 144. DUTY OF COMPANIES TO PASSENGERS AND OTHERS. 607 tiffs, a corporation, were empowered by act of parliament to make and maintain docks /or the use of the public, and to take tolls from persons using them. The corporation did not, nor did its individual members, derive any emolument from the tolls, but was bound to apply them in maintaining the docks, and in paying a debt contracted in making them. The corpora- tion had the usual powers of appointing water-bailiffs, harbor- masters, and servants, by whose hands the duties of superin- tendence were carried out. A ship, in entering one of the docks, struck against a bank of mud left at its entrance, of the existence of which the corporation was either aware, or negli- gently ignorant. The ship and cargo being both injured, sepa- rate actions were brought by the respective owners. It was held, affirming the judgment of the Exchequer Chamber, 9 that as long as the docks were open for the use of the public, the corporation were bound, whether they received the tolls for pri- vate or fiduciary purposes, to take care that the docks were navigable without danger, and consequently that they were lia- ble in damages. 8. It was here held, that in construing statutes creating bodies corporate, such as the plaintiffs, the legislature must be consid- ered, unless the contrary appears, to intend that the corporate body shall have the same liabilities and duties as are imposed by the general law upon private persons doing the same things. sibility in either ease will be the same ; that in the absence of all special statutory provision to the contrary, the builders of such works, and those who operate the same for their own benefit, or that of others, are bound to see that they are con- structed with reasonable care and skill, and maintained in the same manner. It was at one time supposed the grantee of such a power might excuse himself from all responsibility by showing good faith and diligence in the discharge of the public duty imposed by the grant of the power. Sutton v. Clarke, 6 Taunt. 29, where Chief Justice Gibbs said : " He has done all that was incumbent on him, having used his best skill and diligence." But it has since been held that this is not enough, and that the grantees of such a power are bound to conduct them- selves in a skilful manner, and to do all that any skilful person could reasonably be required to do in such a case. Jones v. Bird, 5 B. & A. 837. s 3 H. & Norm. 164, 4 Jur. N. S. 636. 608 ARRANGEMENTS BETWEEN COMPANIES. § 145. t SECTION IV, Extent of the Powers and Duties of Lessees of Railways. 1. Statement of the points in an important 2. Lessees of railways liable for their own English case. acts, and for many acts of lessors. § 145. 1. A very elaborate and important case upon the rela- tive rights and duties of the lessors and lessees of railways came before the court of C. B. in June, 1851, and the Exchequer Chamber in January, 1853. The importance and difficulty of the subject, and the few cases upon that subject which have yet arisen, will justify an extended notice of the points decided in the court of last resort. 1 In 1836 a company (afterwards called the West London Railway Company) was incorporated by act of Parliament for the making of a railway from the Kensington Canal to join the London and Birmingham (afterwards called the London and Northwestern) and the Great Western Rail- ways at a place called Holsden Green, and certain duties were by the act cast upon the company ; and, amongst other things, it was provided that, if the railway should be abandoned, or should, after its completion, cease for the space of three years to be used as a railway, the land taken by the company for the purposes of the act should revert to the owners of the adjoining land. In February, 1837, the West London Railway Company en- tered into an agreement with the Great Western Railway Com- pany, under which the last-mentioned company bound them- selves to * stop certain of their trains at a point where their rail- way intersected the West London Railway, for the purpose of transferring passengers and goods from one railway to the other, and to stop their trains for the purpose of meeting correspond- ing trains of that company, in the manner particularly detailed in the deed. In 1840, another act, 3 & 4 Vict. c. 105, passed, giving further powers to the West London Railway Company ; the thirty-fourth section, reciting the agreement of February, 1837, regulated the 1 The West London Railw. v. The London & N. W. Railw., 18 Eng. L. & Eq. 481. *432 § 145. POWERS AND DUTIES OF LESSEES. 609 mode of crossing, until the plaintiffs' railway should be com- pleted ; the thirty-sixth section saved the plaintiffs' right under that agreement ; and the thirty-seventh section provided, that if the plaintiffs' line was abandoned, or ceased to be used as a rail- way for three years after its completion, then, on payment or tender to them by the Great Western Railway Company of the purchase-money of the piece of land where the railways crossed, the said land should vest in the Great Western Railway Com- pany. By a subsequent act (8 & 9 Yict. c. 156), reciting that " it had been found that the said West London Railway [which it appeared in evidence had been worked with passenger trains as well as with goods trains] could not be worked, as a separate and independent undertaking, with advantage to the proprietors thereof, but that the same might be advantageously worked and used in connection with the said London and Birmingham Rail- way and the said Great Western Railway, or either of them, by both or either of the companies to whom the said last-mentioned railways belonged ; that the West London Railway Company were therefore desirous of letting the said railway on lease to the London and Birmingham Railway Company ; and that the last- mentioned company were willing to accept such lease, subject to certain terms and conditions which had been mutually agreed on between the said two companies," — the West London Rail- way Company was authorized to lease to the London and Northwestern Railway Company their railway, and all their rights, powers, and privileges in relation thereto, — subject to the provisions of the act, and to the performance of the condi- tions to be mentioned in such lease. By the lease, which was afterwards executed in pursuance of this act, the London and Northwestern Railway Company cove- nanted, amongst other things, that they would " at their own expense, during the continuance of the lease, efficiently work and repair the railway and works thereby demised, and indem- nify the West London Railway Company against all liabilities, loss, charges and expenses, claims and demands, whether in- curred or * sustained in consequence of any want of repair, or in consequence of not working, or in any manner connected with VOL. i. 39 *433 610 ARRANGEMENTS BETWEEN COMPANIES. § 145. the working of the same railway or works ; but the West Lon- don Railway Company shall have no control whatever over the working or management by the London and Birmingham (North- western) 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, — Piatt, B., Martin, B., not concurring. That the agreement of February, 1837, with the Great West- ern 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 defend- ants 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 defend- ants, 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 indemni- fication of the plaintiffs from the obligations cast upon them by their acts of incorporation. The court say, in substance : — § 145. POWERS AND DUTIES OF LESSEES. 611 If this railway had been leased to a simple individual, or com- pany, 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 ac- commodation 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 supply- ing 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 les- see of merely the railway in question would do, unconnected with any other. 2. It seems to be regarded as settled that the persons or cor- poration who come into the use of a railway company's powers and privileges, are liable for their own acts while continuing *434 612 ARRANGEMENTS BETWEEN COMPANIES. § 146. 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. 3 But the lessees of a railway are not liable for the acts of the servants of the lessors. 4 SECTION V. Contracts between different Companies regulating the Traffic. 1. Such contracts generally held valid and I 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 bond fide view to regulate traffic, in a reasonable and just manner, were legal and binding. 1 But when it is considered that these 8 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. 4 "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 me- chanic 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. *435 § 147. WHAT CONSTITUTES A PERPETUAL CONTEACT. 613 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 com- ing within the fair * interpretation of the English general stat- utes, 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 pur- pose 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. 4 And it is no valid objec- tion that such division is based upon the experience of the result of past traffic. 4 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, com- plying 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 s Simpson v. Denison, 13 Eng. L. & Eq. 359. 3 Ante, § 142. 4 Hare v. London & N. W. Railw., 2 Johns. & H. 80 ; s. c. 7 Jur. N. S. 1145 ; post, § 148. ♦436 614 ARRANGEMENTS BETWEEN COMPANIES. §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 law- fully 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 bij 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 einpoiv- ered to make bills and notes except from necessity. 6. Contracts ultra vires cannot be specifi- cally enforced against the directors. 7 . Money unlawfully borrowed company must refund. 8. How far acts ultra vires confirmed by acquiescence. 9. Company not restrained from making unlawful payments on the ground of policy. 10. Decision rests on no safe grounds. 11. It seems too much like paying black mail to buy peace. § 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 rail- way 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. *437 § 148. CONTRACTS ULTRA VIRES. 615 Railway Company would, in case of their bill being rejected, insure the company, of which they were the managing commit- tee, against all loss, and would pay all expenses incurred by them in endeavoring to obtain the act ; and the Southeastern Railway Company were authorized, by their acts, to apply their funds in certain ways, not including this : it was held 2 that the agreement was void, as it was an agreement made by contract- ing parties (who must be presumed to know the powers of the defendants' company, by their acts of parliament, which are pub- lic acts) that the company should do an act which was illegal, contrary to public policy and the provisions of the statutes. 3 3. And a contract by which one railway agrees to give up to another railway a part of its profits, in consideration of securing a portion of the profits of the other company, is illegal, and ultra vires. 4 4. The rule laid down upon this subject by a distinguished English judge, on a recent occasion in the House of Lords, 5 is perhaps as fair and full a definition of the doctrine as can be made. " There can be no doubt that a corporation is fully ca- pable of binding itself by any contract under its common seal in England, and without it in Scotland, except where the statutes by which it is located or regulated expressly or by necessary implica- tion prohibits such contracts between the parties. Primd facie all its contracts are valid, it lies on those who impeach any contract to make out that it is avoided. This is the doctrine of ultra vires, and it is no doubt sound law, though the application of it to the facts of each particular case has not always been satisfactory to my mind." His lordship here declares that it would not be ultra vires for a company wishing to alter one of its branches, and about to apply to parliament for authority to do so, to enter 8 McGregor v. The Official Manager of the Deal & Dover Railw., 16 Eng. L. & Eq. 180, in Exchequer Chamber. See also East Anglian Railways Co. v. Eastern Counties Railw., 7 Eng. L. & Eq. 505, where the same question, in effect, is determined. Ante, § 16. 3 Ante, § 56, n. 3. 4 Shrewsbury & Birmingham Railw. v. London & Northwestern Railw., House of Lords, May, 1857; 29 Law Times, 186. 6 Lord Wensleydale, in the Scottish Northeastern Railw. Company v. Stewart, 5 Jur. N. S. 607. 616 ARRANGEMENTS BETWEEN COMPANIES. § 148. into a contract for land which would be necessary for the pur- pose if they should obtain the act. 5. The question how far a railway company, without special grant of power for that purpose, may accept bills of exchange, is very carefully examined and thoroughly discussed, both by court and counsel, in a recent English case. 6 It seems to be there con- 8 Bateman v. Mid- Wales Railw. Company, 12 Jur. N. S. 453. The language of Crompton, J., in Chambers v. Manchester & Milford Railw. Co., 10 Jur. N. S. 700, seems to place the question upon its true basis. " The law as laid down by Parke, B., in the South Yorkshire Railw. & River Dun Company v. The Great Northern Railw. Company, does not appear to be questioned, and seems to be applicable to the present case. ' Corporations, which are creations of the law, are, when the seal is properly affixed, bound just as individuals are by their own contracts, and as much as all the members of a partnership would be by contract in which all concurred.' This is un- doubtedly true of corporations generally ; but as Mr. Lush has observed, rail- way corporations are the creatures of an act of parliament ; and the question is, how far provision has been made for conferring upon them borrowing powers, which are said to have been exercised in the present case. ' But,' proceeds Parke, B., ' where a corporation is created by act of parliament for particular purposes, with special powers, then indeed another question arises ; their deed, though under their corporate seal, and that regularly affixed, does not bind them, if it appear by the express provisions of the statute creating the corpora- tion, or by necessary and reasonable inference from its enactments, that the deed was ultra vires, — that is, that the legislature meant that such a deed should not be made.' This, as it appears to me, touches the very question before us, and, moreover, seems to convey the notion that directors of a railway company are of the nature of special rather than general agents of the company they represent. They have the custody of the seal of the company, but they have not the power to affix it to instruments which the legislature has declared to be ultra vires ; and should this be done, the company are not bound." .... " These bonds, therefore, seem in effect to amount to an account stated, and a promise to pay, under seal ; and, so long as they are used for the purpose for which they were originally intended, it may be that there is nothing objection- able in them. But here the bonds are issued by the directors for the purpose of raising money to discharge liabilities into which the plaintiff has entered on be- half of the company, of which he was chairman ; and this is, to say the least of it, an indirect mode of borrowing, and beyond the powers conferred upon the company under their act. The point was also put to us upon the argument whether the prohibition to borrow was to be held to extend to the raising of small sums for the immediate necessities of a newly started company ; and to this, we think, it was well answered, that if once a company be permitted to overdraw one hundred pounds, there would be no impediment to their doing so to any extent to which their credit would reach. I am therefore of opinion that § 148. CONTRACTS ULTRA VIRES. 617 sidered, that unless the corporation is a trading company, as the Bank of England or the East India Company, there is no pre- sumptive power to accept bills of exchange. In the case of rail- way corporations, created for a special purpose, there is no pre- sumptive power either to borrow money, or to issue or accept bills of exchange for the purpose of negotiation in the market. The rule is thus stated by one of the judges in the case last cited, speaking of trading corporations. " Such a corporation may, in some cases, bind itself by promissory notes and bills of exchange But a corporation will not have these extraordi- nary powers, unless the nature of the business in which it is en- gaged raises a necessary implication of their existence." 6. Contracts ultra vires, entered into by the directors, and which are not binding upon the company, cannot be specifically enforced against the directors, nor can the directors be decreed by the court to make good their representations. 7 7. A corporation having no power to lend, made a loan to a company having no power to borrow. The borrowers were aware of those facts. They bought a canal with the money ; but that was set aside, and the purchase-money ordered to be refunded. The loaning company sought a refunding of the money loaned by them, with the interest, out of the refunded purchase-money. It was held they were entitled to a decree accordingly. 8 But the lender of money to a company having no power to borrow, can- not compel the company to refund the money, unless it has been bond fide applied to the purposes of the company. 9 8. Where part of a contract only is ultra vires of the company, a court of equity will restrain that portion only. lor Where there these bonds are void, and that the plaintiff is not entitled to recover upon them." 7 Ellis v. Coleman, 25 Barb. 662. 8 Ernest v. Croysdell, 6 Jur. N. S. 740. 9 Troup in re, 29 Beav. 353 ; Hoare ex parte, 30 Id. 225. 10 Maunsell v. Midland Great Western (Ireland) Railw. Co., 1 H. & M. 130 ; s. c. 9 Jur. N. S. 660. It was here held, that an agreement to contribute to the parliamentary deposit recmired on bills promoted by another company is ultra vires. So is an agreement to take shares in the future extension of another company. So also is an agreement to make traffic regulations applicable to future extensions. But no such agreement is ultra vires if its validity is ex- pressly made dependent upon the sanction of parliament. But where part of 618 ARRANGEMENTS BETWEEN COMPANIES. § 148. is a defect of capacity in the company to do the act, the power cannot be created by the express agreement of the shareholders ; nor can it be presumed from any extent of acquiescence. But where only certain formalities are required to the valid execution of the act, as the consent of a general meeting, that will be pre- sumed from acquiescence. 11 But where dissentient members 12 were allowed to retire by the resolution of a general meeting, it was held the other members could not be allowed to question its regularity and validity, after an acquiescence of twenty years, although ultra vires. 9. Directors of an insurance company offered to pay losses caused by the explosion of gunpowder, although expressly ex- cepted from the risks assumed by the policy, at the same time not admitting any legal liability to do so. On a bill by a share- holder to restrain the directors from doing so, it appearing that it was usual and advantageous for companies to do so, although not strictly responsible for the loss : held, that this was a mode of carrying on the business with which the court could not in- terfere. 13 10. This is a most remarkable decision, but more remarkable for the reasons and grounds upon which it is placed. The fact that the unlawful payments proposed to be made were prudent and politic, is nothing more than may be urged in favor of all proposed illegal diversion of the funds of a company. It is al- ways proposed thereby to advance the interests of the company, and consequently the dividends to the shareholders. It is im- possible to suppose that any such principle can ultimately main- tain its ground in the English courts of equity. 11. The subsequent cases seem to feel that all secure ground to rest upon is taken from under them. It is said in one case 14 an entire arrangement between two companies, the parts of which are depend- ent upon each other, are illegal, or ultra vires, a court of equity will restrain the execution of every portion of the arrangement. Hattersley v. Shelburne, 7 Law T. N. S. 650. 11 British Provident Life Ins. Co., ex parte Grady, 9 Jur. N. S. 631. 12 Brotherhood in re, 31 Beav. 365. A restriction upon the liability of the shareholders for bills drawn by the company will not effect the responsibility of the company. State Fire Ins. Co., 8 L. T. N. S. 146. 13 Taunton v. Royal Ins. Co., 2 H. & M. 135 ; s. c. 10 Jur. N. S. 291. 14 Gregory v. Patchett, 10 Jur. N. S. 1118. § 148«. CONTRACTS ULTRA VIRES. 619 that in matters strictly relating to the internal management of the company, even though not strictly within the terms of the constitution of the company, the court will not interfere. But it is here added, if the matters complained of are plainly beyond the powers of the company, and are inconsistent with the objects for which the company was constituted, the court will interfere, at the instance of the minority, to prevent the act complained of from being carried out. If this is intelligible to others, or rec- oncilable with good sense and good law, it certainly passes our comprehension, and we can only say that we should not expect it to be long maintained anywhere. It is nothing more or less than paying black mail to buy peace, and if public companies can do that with funds they hold in trust, it may be as well for courts of equity not to attempt to define what they may or may not do. § 148 a. The following points, decided by a court of learning and experience, in regard to the rights of railway corporations in one state to enter into permanent arrangements with similar corporations in other states, with our own comments upon it, as published in the American Law Register, 1 we deem of suffi- cient importance as illustrating some of the doctrines discussed in the preceding section, to be here repeated. The opinion of Judge Store?', at length, will be found in the American Law Register, 2 and will repay careful reading. 1. Tlie power of a receiver to sue in the name i 3. Statement of the contract and ground of of the corporation. Foreign railway corporation acquired no prerogative rights by leasing a portion of the track of a domestic railway. holding it void, as being ultra vires. Further reasons why such contract cannot be specif 'catty performed here. 3. Comments upon the preceding proposi- tions. Superior Court of Cincinnati. Ohio and Mississippi Railroad Company v. Indianapolis and Cincinnati Railroad Company. 1. A receiver appointed by the Circuit Court of the United States for the Southern District of Ohio, to take possession of a railroad and its effects, may sue in this court, upon a contract made by that corporation in the corporate name of the railroad, without disclosing in the petition his own name as receiver. 1 Vol. 5, N. S., 733. 8 Vol. 5, N. S., 733-744. 620 ARRANGEMENTS BETWEEN COMPANIES. § 148 a. 2. A foreign corporation, having no charter from the state of Ohio, authorizing it to construct and operate a railroad in this state, cannot, by a transfer of a portion of a railroad already con- structed in the state by legal authority, acquire a right to use and operate such railroads within this state. 3. The plaintiffs, being authorized to construct and operate a railroad from Cincinnati to Vincennes, and the defendants, be- ing authorized to construct and operate a railroad from Indian- apolis to Lawrenceburg, of a different gauge, entered into a contract whereby the defendants, in consideration of being al- lowed to lay a third rail on the road of the plaintiffs, to furnish motive power for hauling the cars of the defendants on that part of the road, agreed, among other things, to lend to the plaintiffs $30,000, for the purpose of erecting a depot for the plaintiffs in Cincinnati, to become the property of the plaintiffs at the expi- ration of the contract ; to form no connections at or beyond Lawrenceburg prejudicial to the plaintiffs ; and to give the plain- tiffs exclusive control of the employees of the defendants while on the road of the plaintiffs. Held, on the construction of the charters of the plaintiffs and defendants, that such contract was beyond the competency of the contracting parties, and was void. 4. The contract also provided, that the defendants should have the use of a depot and certain grounds in Cincinnati for unloading goods and lumber, for thirty years. Held, that this created an easement in the land, and was, in connection with the laying and keeping up the third rail, in substance a lease, which the plaintiffs had no authority to make, and that it being for more than three years, was also invalid under the statute of frauds, for the want of legal acknowledgment. Held, als/>, that the defendants having as a foreign corporation no right to accept a lease of a railroad in Ohio, the plaintiffs could not have had a specific performance of the agreement, the remedies of the par- ties not being mutual. 3 3 We can see no good ground to question the soundness of the foregoing opinion ; but it seems to us that the case exhibits in a strong light the embar- rassments constantly resulting from having railway corporations restricted in their corporate functions to the limits of state lines. It would certainly seem that there is far more necessity and propriety in having all the railway corpora- tions in the country possess a national character, than there is in giving the § 149. COMPANIES EXONERATED FROM CONTRACTS. 621 SECTION VIII. Companies exonerated from Contracts, by Act of the Legislature. § 149. It seems to be conceded that a railway company may plead a subsequent act of the legislature, in bar of the perform- ance * of their covenant or contract. But it will afford no bar, unless the act either expressly, or by clear implication, renders the duty of the contract unlawful or comes in conflict with it. 1 same character to all the banks of the country, which has been already practi- cally effected by means of discriminating taxation. There is every reason to regard railways as national institutions, in almost every sense in which they possess a public character, or perform public service, with the single exception of intercommunication, which is mainly of local and state concern. 1. As one of the wonderful advancements of military operations in modern times, by which railways have wrought a complete change in the conduct of war, and have become an indispensable necessity, they are entirely of a national character, so much so as to exclude all state control in times of war or civil commotion. 2. In regard to postal communication, which has been regarded as exclusively of a national character, since the early and palmy days of the Persian monarchy, where public posts are said to have originated, railways must also be regarded as an indispensable necessity. For if we admit the right of state control over all or any considerable portion of the railways in the country, it will place all postal communication at the mercy and good will of state authority, which any one must see is wholly inadmissible. We discussed the rights of railway corporations in regard to acquiring land and other prerogative rights in adjoining states, without the action of the legislature, in a case in Vermont, many years since, when we came to the con- clusion that no such prerogative rights could be acquired out of the state of the charter, except by legislative act. State v. B. C. & M. Railw., 25 Vt. R. 433. This will not preclude such corporations from acquiring the title of land out of the state, by voluntary contract, or entering into any other contract, of the ordinary character of contracts between natural persons, but it will not justify taking land compulsorily, or operating a railway and taking tolls, &c. 1 Wynn v. The Shropshire Union Railw. & Canal, 5 Exch. 420; Stevens v. South Devon Railw., 12 Eng. L. & Eq. 229. But where one was induced to give lands to a railway company, or subscribe for stock, and the essential in- ducement to make the contract was that the company should construct their road within some definite time, the extension of time for the construction of the road, by act of the legislature, will not exonerate the company from their obli- gation to such person. Henderson v. Railw. Company, 1 7 Texas R. 560. *438 622 ARRANGEMENTS BETWEEN COMPANIES. §150. SECTION IX, Width of Gauge. — Junction with other Roads. 1 . Where the act requires broad gauge, does not prohibit mixed gauge. 2. Permission to unite with other road, signi- fies a road de facto. 3. Equity will sometimes enjoin company against changing gauge. Contract to make gauge of the companies the same, although contrary to law of state, at its date, may be legalized by statute. § 150. 1. Where the company's special act required them to lay down a railway of such gauge and construction as to be worked in connection with another company named (the broad gauge), a court of equity declined to interfere, by injunction, when the company were laying down part of the line with double tracks of the mixed gauge, there being no prohibition in the act against such a construction, the broad gauge being all which was required by the act. 1 2. Where the act of incorporation gav.e the company the right to construct a road in a particular line, and also required them to purchase a former railway along the same route, and gave them the right to connect " their road with any road legally authorized to come within the limits of the city of Erie," it was held that this right extended equally to the road purchased or built by them, and that they had the right to connect with any other railway in the actual use of another company in Erie, without inquiry whether such company were in the legal use of their franchises at the time or not. That is a question which cannot be inquired into in this collateral manner. 2 3. Where two railway companies agree to operate their roads in connection, between certain points, if one of the companies * changes its gauge, so as to break up the connection contem- plated, an injunction will be granted to enforce the contract. 3 1 Great Western Railw. v. Oxford, Worcester, & Wolverhampton Railw., 10 Eng. L. & Eq. 297. 2 Cleveland, Painsville, & Ashtabula Railw. v. The City of Erie, 27 Penn. St. 380. 3 Columbus, Piqua, & Ind. Railw. v. Ind. & Belief. Railw., 5 McLean's C. C. R. 450. *439 § 150. WIDTH OF GAUGE. — JUNCTION OF -RAILWAYS. 623 4. A contract entered into by railway companies to make the gauge of both the companies the same, is not illegal, although this be contrary to the law of one of the states, if the contract appear to have been made with reference to an alteration of the powers of the company, in that respect, and that such alteration was procured before any part of the track was laid. 3 NOTES. Note I. to § 133, ante, p. 544. The following very important case we have deemed of sufficient importance to insert here at length : — The State of Maryland v. The Baltimore and Ohio Railroad Company. The Baltimore and Ohio Railroad Company v. The State of Maryland. Distinction between Passengers and Strangers. — Railway companies owe a higher degree of watchfulness and care to those sustaining the relation of pas- sengers, than to mere strangers having no fiduciary relations with the company. Distinction further defined. — In the former case the utmost care and skill is required, in order to avoid injuries 5 but in the latter case, only such as skilful, prudent, and discreet persons, having the management of such business in such a neighborhood, would naturally be expected to put forth. Negligence of Plaintiff . — The plaintiff cannot recover for an injury resulting from the negligence of the defendant, if, notwithstanding such negligence, he might have avoided the injury by the exercise of care and prudence on his part, or if his own want of such care and prudence, or that of the party injured, in any way contributed directly to the injury. Damages. — In a case where the mother is to be compensated for the injury or loss consequent upon the death of her infant child, the shock or suffering of feeling is not to be taken into the account, but only the pecuniary loss, and that is not to be extended beyond the minority of the child. The Baltimore and Ohio Railroad Company were the owners of a track on Locust Point, in the City of Baltimore, and used a locomotive for the regulation of the trains, picking up empty cars and uniting them to be sent out on the main track. On the occasion in question, a train had been formed in this manner, consisting of many cars, and was being backed at a very slow speed round a curve, on which were houses that prevented the engineman from seeing the back of the train or the end of the car. Two boys, playing in the neighborhood, who saw the train in motion, ran to get a ride on the last car, catching hold of the bumper, and with their feet on the brake car. A jolt threw one off, and he was killed, while the other was badly injured, losing a part of one hand. It •was in proof that these boys had again and again been driven from the cars on other occasions, and their parents informed of their conduct. It was admitted that there was no employee of the company on the end car, and that the en- gineman and conductor did not know of the accident till some time after it happened. VOL. 1. 40 626 NOTES. The opinion of the court was delivered by Bowie, C. J. — These are cross-appeals in an action instituted, under the first and second sections of Article 65 of the Code, by the state for the use of a wid- owed mother, whose son was killed under the circumstances detailed in the bill of exceptions. After evidence was offered by both parties, a series of prayers was submitted by each, all of which were rejected, and other instructions given by the court instead thereof. To which rejection, and the instructions given, the plaintiffs and defendants severally excepted. The counsel of the defendants having filed in these causes a declaration in writing, that, in the event of an affirmance of the judgment as against the plain- tiffs on their appeal in the first case, the defendants will abandon their excep- tions, it is proper first to inquire whether the appellants have been aggrieved by the action of the court below. The General Assembly of this state, in the year 1852, finding the common-law maxim, " Personal actions die with the person," unsuited to the circumstances and condition of the people, enacted a law entitled " An act to compensate the families of persons killed by the wrongful act, neglect, or default of another per- son." To make its design more obvious, the fourth section provides, " the word person shall apply to bodies politic and corporate," and " all corporations shall be responsible, under this act, for the wrongful acts, neglect, or default of all agents employed by them." The material provisions of this act, as well as its title, are derived from the 9th and 10th Victoria, and are embodied in Art. 65 (tit. Negligence) of the Code. The object of the several series of prayers was : 1st. To furnish the jury with a standard of the care and diligence, required by law of the defendants, to ex- empt them from liability for damages for the injury incurred. 2d. To prescribe the care necessary to be exercised by the deceased to entitle his next of kin to recover. 3d. To define the measure of damages. The appellants' first prayer required the defendants, under the circumstances therein predicated, " to exercise the utmost care and diligence to prevent acci- dents endangering the life or lives of the people or inhabitants of the said city." The second held, that the defendants were bound to use all the means and measures of precaution that the highest prudence would suggest, and which it was in their power to employ, and if the use of a guard, or look-out, at the head or in the rear of said cars * * * was a measure by which such accidents would probably be avoided, the omission was culpable negligence. The appellants' third prayer affirms that the jury, in the estimate of damages, should take into consideration the expense to which the plaintiff was subjected in consequence of the accident, and the loss resulting therefrom, not only to the present time, but also the probable pi-ospcctive loss and expense, &c, and that, in estimating the said loss and damage, the jury are not limited to the actual pecuniary loss provided in said case. The propositions laid down by. the court, in the first instructions, are : — NOTES. 627 That the defendants, in the movement and management of their cars and en- gines, were bound to exercise the utmost care and diligence which it was within their means and power to employ, to prevent accidents, and injuring or endan- gering the life or lives of the people ; and if the jury find that the child of the plaintiff's cestui que use was run over and killed by the defendants' cars, as de- scribed by the witnesses, and that, if the defendants, in the use and manage- ment of their cars and engines, had exercised the highest degree of care and dili- gence " which it was within their means and power to employ," the said accident could have been prevented, then the plaintiff is entitled to recover in the ac- tion ; but although the jury may find that the said accident could have been prevented by the use of such care and diligence on the part of the defendants, yet the plaintiff is entitled to recover if the jury believe the accident could have been avoided by the exercise of that degree of care, by the said child, which was, under all the circumstances, to be naturally and reasonably expected from one of said boy's age and intelligence. The degree of care and diligence imposed by law on the defendants, in the instruction given by the court, is as high as that required by the appellants' prayers ; the degree is the " utmost care and diligence," the " highest it was within their means and power to employ " ; the only material difference is, that one of the appellant's prayers asked the court to instruct the jury specifically, " that if the use of a guard or look-out, at the head, or in the rear of said cars, was a measure by which such accidents would probably be avoided, the omission was culpable negligence." The general terms used by the court embraced all the particulars specified by the prayer of the appellant qualified by the words, " it was within their means and power to employ." The jury were at liberty to find, under the instruction given, and perhaps did find, that the absence of the guard constituted the want of the " highest care and diligence within the means and power of the defendants," and therefore rendered their verdict in favor of the plaintiff. The liability of the defendants in this case did not depend upon their obliga- tions as carriers of passengers, in which character they are bound " to use the utmost care and diligence which human foresight can use." Stockton v. Frey, 4 Gill, 406, 422, 423 ; Worthington v. Baltimore and Ohio Railroad Co. (in this court not yet reported). But their liability, if any, arises upon a statute which limits the action to such wrongful act, neglect, or default, " as would (if death had not ensued) have entitled the party injured to maintain an action and re- cover damages in respect thereof." Vide Code, art. 65, § 1. The party injured not being a passenger, the defendants were not required to exercise that degree of vigilance which the law required toward those with whom there is a relation of trust and confidence, or bailment between the parties. " Towards the one, the liability of the latter springs from a contract express or implied, and upheld by an adequate consideration. Towards the other, he is under no obligation but that of justice and humanity. While en- gaged in their lawful business both are bound to use a degree of caution suited to the exigences of the case." 8 Barb. 378. In an analogous case, this court said : Railroad companies should use " such 628 NOTES. care and diligence in using the locomotive upon the road, as would be exercised by skilful, prudent, and discreet persons, having the control and management of the engine, regarding their duty to the company, the demands of the public, and the interests of those having property, and having a proper desire to avoid injuring property along the road." This was said in a case of injury to proper- ty, but is cited with approbation by Redfield as applicable to persons. Redfield on Railways, 345, 4 Md. R. 257. The court's instruction did not close with the definition of the degree of care and diligence on the part of defendants, but proceeded to inform the jury, al- though the accident could have been prevented by the exercise of such care and diligence by the defendants, yet the plaintiff is not entitled to recover, if the jury believe the accident could have been avoided by the exercise of such care by the child as might, under all the circumstances, have been reasonably expected from one of his age and intelligence. In other words, if there was neglect or default on the part of the boy, or the absence of that prudence which boys of like age and capacity usually exhibit, the defendants were not liable, al- though, by the exercise of extraordinary care on their part the accident might have been prevented. This ruling is in conformity with all the text-writers, and the great majority of adjudged cases. Redfield on Railways, § 179 ; 2 Car. & R. 730 ; 8 C. B. 115. It is objected on the part of the plaintiff below, the appellant in this case, that the court's first instruction was erroneous, in instructing the jury, the action could not be maintained " if the jury believed the accident could have been avoided by the exercise of that degree of care by the said child, which was, under all the circumstances, to be naturally and reasonably expected from one of his age and intelligence." Whereas the court should have told the jury the plain- tiffs could not recover if the jury found " there was a want of that degree of care on the part of the said child which, under the circumstances, was naturally and reasonably to be expected in one of his age and intelligence." The question of the " want of" or absence of such care, should have been left to the jury rather than the exercise of such care. It is difficult, if not impossible, to perceive the differ- ence between the two propositions. In the court's instructions the proposition is stated affirmatively ; in the appellant's objection it is negatively. The jury were to find whether there was or was not due care on the part of the deceased. They are told by the court, " if they believed the accident could have been avoided by the exercise of that degree of care," &c, the plaintiff could not re- cover. The appellant insists that not the exercise, but the want of care (which is the non-exercise of care), is the criterion. The principle of the common law, that a plaintiff cannot recover for injuries to which his own negligence directly contributed, is admitted, and it seems to us it was clearly expressed by the court in the instruction given, as far as the conduct of the deceased child was con- cerned. In the case of Baltimore and Ohio Railroad Co. v. Lamborn, 12 Md. R. 257, 261, and Keech's Case, 17 Id. 32, 46, the rule of the common law, that the plaintiff could not recover for injuries to which his own negligence directly con- tributed, was held to apply to actions brought on the statutes therein referred to, and the instructions affirmed by the court in those cases, submitted to the jury NOTES. 629 the question of negligence on the part of the plaintiff, as well as on the part of the defendant. The same policy would require the plaintiff to show, in actions for injuries resulting in death, that neither the party injured, nor the parties for whose use the action was brought, had contributed, by neglect or want of care, to the ca- lamity complained of. This omission in the instruction given enured to the ad- vantage of the appellant, and cannot be taken advantage of on her appeal. The objection raised by the plaintiff to the court's second instruction involves the measure of damages. In the language of the brief, " it was erroneous, 1st. Because it ignores the mental sufferings of the mother suing for damages sustained by the loss of the child, and confines her claim to pecuniary damages." 2d. Because it limits the pecuniary loss of the mother, the cestui que use, " to the minority of the child, and deprives the jury of the right to award her dam- ages for the pecuniary loss she would reasonably sustain in her advanced life for want of the labor and services of the son, even after he reached his majority. The rule should have been to allow what they considered a reasonable compen- sation." In the absence of any interpretation of this act by our own courts, we must compare and weigh the reasoning of the authorities cited, in which similar acts have been construed by other tribunals. First in order are the decisions in England upon the act called Lord Camp- beWs Act, Redfield, § 179. The observations of Coleridge, J., in the case of Blake, Adm'r. v. The Midland Railw., 10 Eng. L. & Eq. 437, cited by Redfield in his notes, are very strong in support of the instructions given by the court below in this case, confining the jury to the pecuniary damage sustained by the plaintiff. He says : " Our only safe course is to look at the language the legis- lature has employed. The title of the acts is for compensating families of per- sons, &c, not for solacing their wounded feelings." .... By the terms of the act, quoting the second section, " the measure of damages is not the loss or suf- fering of the deceased, but the injury resulting from his death, to his family." This language seems more appropriate to a loss of which some estimate may be made, than an indefinite sum, independent of all pecuniary estimate, to sooth the feelings, and the division of the amount strongly tends to the same conclu- sion. As we have before intimated, the title and language of the Act of Assembly of this state are most literally the same with those of the English statute. The former contains, also, the provisions for distributing the damages among the surviving members of the deceased family, on which the learned judge relies for adopting the principle of compensation for damages which may be estimated in money. The American cases, arising upon acts varying in language, necessarily lead, as observed by Judge Redfield, to a diversity of decisions. We have no better guide than the construction of a statute originating in the same policy, and ex- pressed in the same words by enlightened jurists, distinguished for their inde- pendence and jealous regard for the rights of suitors. It is assumed by the learned author just mentioned, as the conclusion of the 630 NOTES. best-considered cases in this country, that mental anguish, which is the natural result of the injury, may be taken into the estimate of the damages to the party injured. The connection in which this assumption is made, might lead to the inference that it applied to actions brought by survivors for injuries done to their deceased ancestor, relative or next of kin ; but upon reference to the authorities cited, it will be that the plaintiffs in those cases were the persons sustaining the bodily harm, and in estimating their damages their mental suffering constituted an element of compensation. 1 Cush. 451 ; 10 Barb. 623. To have instructed the jury to allow " what they considered a reasonable compensation," would, in the language of the Supreme Court of Pennsylvania, " be giving the jury discretionary power, without stint or limit, highly dangerous to the rights of the defendant, and leaving them without any rule whatever." Rose v. Story, 1 Barr. 190, 197. In the case of the Pennsylvania Railroad Co. v. Kelly, 7 Casey, 372, the same learned court say: " Generally speaking, the influence of the court, in this class of cases, should be expected to restrain those excesses into which juries are apt to run Wild verdicts are frequently rendered. And the tendency, in modern times, undoubtedly is to excessive damages, especially where they are to be assessed against corporations." Ibid. 379; The Pennsylvania Railroad Co. v. Rebe et ux, 33 Penn. St. 318, 330. The last objection to the second instruction granted, is that it limits the mother to compensation for loss of her son during his minority only. To submit to a jury the value of a life, without limit as to years, would have been to leave them to speculate upon its duration without any basis of calcula- tion. The law entitles the mother to the services of her child during his minority only (the father being dead) ; beyond this, the chances of survivorship, his ability or willingness to support her, are matters of conjecture too vague to enter into an estimate of damages merely compensatory. According to the appellant's theory, the mother and the son are supposed to live on together to an indefinite age ; the one craving for sympathy and support, the other rendering reverence, obedience and protection. Such pictures of filial piety are inestimable moral examples, beautiful to contemplate, but the law has no standard by which to measure their loss. This court, being of opinion that the several instructions granted by the court below were as favorable to the plaintiff (appellant) as she was entitled to, and that she was not prejudiced by the rejection of the prayers submitted on her part, finds no error in the rulings of the court below, in the first appeal, and will affirm the judgment. Judgment affirmed. The first proposition maintained in this case is very obvious upon principle as well as the decided cases. Where such an amount of passenger traffic as is now done by railways is confided to agents operating by means of so powerful and dangerous an element as steam, no state or country could fairly justify any rule or responsibility except that of the utmost practicable watchfulness, skill, and ability. And no doubt these considerations, connected with the nature and ex- NOTES. 631 tent of the business of railways, will justify a demand that their business shall be so conducted as to give fair and just opportunity for the conduct of other legitimate business, more or less interfering with that of the company, with rea- sonable security. The rule, as stated in some of the earlier cases, in regard to railways, is that they should be so conducted, with reference to other business interests, that all may have proper scope and reasonable opportunity to escape detriment ; the same as if the company owned both interests, and desired the success of both. Quimby v. Vermont Central Railw. Co., 23 Vt. R. 387. This rule, as we have often attempted to show, will apply with great stringency to any business which is more than commonly liable to destroy life or property. Prudent men always measure their care and diligence by the exigencies of the business and the occasion. Hence it was held, in an early case in California (Wilson v. Cunningham, 3 Cal. R. 241), that where the track of a railway in- tersects the thoroughfares of a city the companies are bound to exercise extraor- dinary care not to injure persons in the streets. Accordingly, in the present case, it is probably true, as suggested by the court, that where a company push a train of cars backwards through the streets of a city, they would be bound to have a servant so stationed that he could look out for persons or property exposed to injury, and who could either himself stop the train or give signal to some one for that purpose in time to prevent collision and damage. But this is not a question of law altogether, and would ordinarily have to be passed upon by the jury. We have discussed this general question of diligence and negligence, both as to the principles involved and the cases bearing upon it, in Taylor v. Briggs, 28 Vt. R. 180, more in detail than would be proper here. In regard to the effect of general negligence in the party to whom the injury occurs, remotely exposing him to the injury, but forming no part of the proxi- mate cause of the same, the cases are numerous, and at the present day reason- ably concurrent in the result, that unless the want of due care on the part of the party injured, or of those responsible for the conduct of such part, con- tributed directly to the production of the injury, the other party will be respon- sible, provided his negligence was the efficient cause of the injury, and, with the exercise of proper care, he might have avoided inflicting it, notwithstanding the general want of proper watchfulness by the party injured. The cases are too numerous upon this to be quoted in detail. Davies v. Mann, 10. M. & W. 546 ; Illidge v. Goodwin, 5 C. & P. 190, are the leading English cases. The Ameri- can cases will be found, in almost all the states, to have maintained the same view. Trow v. Vermont Central Railw. Co., 24 Vt. R. 487 ; Isbell v. N. Y. & N. H. R. R. Co., 27 Conn. R. 393 ; Kerwhacker v. C. C. & C. R. R. Co., 3 Ohio St. 172; C. C. & C. R. R. Co. v. Elliott, 4 Id. 474. The rule is very broadly stated in New Haven Steamboat & Transportation Co. v. Vanderbilt, 16 Conn. R. 421. And it seems that the fact that the person or property, as cattle, are trespass- ing at the time the injury occurs, will not subject them to damage without re- dress, provided there is no such wrong on the part of the person, or of the owner of the property, as to contribute directly to the injury, so that the other party 632 NOTES. might not, with ordinary care, have avoided it. Isbell v. N. Y. & N. H. R. R. Co., supra ; Daley v. Norwich & Worcester R. R. Co., 26 Conn. R. 591 ; Brown v. Lynn, 31 Penn. St. 510; C. C. & C. R. R. Co. v. Terry, 8 Ohio St., 570. But where the negligence of the party injured, in any manner or to any ex- tent, contributed directly to the production of the injury, however slightly, there can be no recovery. Witherly v. Regent's Canal Co., 12 C. B. N. S. 2 ; s. c. 3 F. & F. 61. So in a very late English case, where the party finding the gates at a crossing negligently closed in the night time, after every exertion to find some servant of the company to open them, necessarily opened the gates him- self in order to pursue his journey, and where, without any fault on his part, the gate swung back by its own weight and struck the horse, which became unmanageable, whereby the plaintiff was thrown out of the carriage and in- jured, it was held he could not recover, inasmuch as he had no right to open the gates himself, and the injury was produced by his own wrongful act in doing so. Wyatt v. Great Western Railw. Co., 11 Jur. N. S. 825. The question of damages is one in regard to which, for a time, the cases seemed to vacillate somewhat upon the point whether the manner of the inflic- tion of the injury and the shock to the feelings of those near relatives for whose benefit the action was brought, could be taken into the account. It seems very clear that where the suit is for the benefit of the very person sustaining the in- jury, there could be no question that any shock or injury to his feelings, any mental suffering, which was the direct consequence of the injury, should be considered in estimating damages. Such suffering is a part of the necessary labor to be borne by the party injured, in consequence of the injury. Canning v. Williamstown, 1 Cush. 451 ; Morse v. Auburn & Syr. Railw. Co., 10 Barb. 621. But in estimating damages to other parties, affected incidentally by the death of the party injured, it seems now pretty generally conceded, that no account of wounded feelings can be taken. And this, upon the whole, seems but just and reasonable. For there would be no uniformity in cases of this kind if the jury were allowed to go into considerations so remote and uncertain. Penn. Railw. Co. v. McCloskey, 23 Penn. St. 526. So in North Penn. Railw. Co. v. Robinson, 44 Penn. St. 175, it is said the value of the life lost, estimated by a pecuniary standard, is what is to be recovered. There is one qualification in regard to the extent to which damages were allowed to be given by the jury in the principal case which has not generally been adverted to, and which seems to us somewhat liable to misconstruction. We refer to the restriction limiting prospective damages to the minority of the child. It has been decided that a father may recover pecuniary damages for the death of a son twenty-seven years of age, unmarried, and who has been accustomed to make occasional presents to his parents. Dalton v. South Eastern Railw. Co., 4 C. B. N. S. 296. And it was here held, as it has often been in other cases, that the jury could not give damages by way of compensating the father for the expenses of his son's funeral or for procuring family mourning. So also Franklin v. South Eastern Railw. Co., 3 H. & N. 211 ; Blake v. Midland Railw. Co., 18 Q. B. 93. It was lately held in the Exchequer Chamber (Pym v. Great Northern Railw. Co., 10 Jur. N. S. 199), that where, in consequence of NOTES. 633 the death of the father, his income was, by direction of his will, unequally dis- tributed among his widow and children, the eldest son taking most of it, that damages might be recovered for the benefit of the whole class on that ground, some of the children being thereby deprived of an expected support, had the life of the father continued. In the very late English case of Boulter v. Web- ster, 13 W. R. 289, the Court of Queen's Bench adhered to the rule that no dam- ages could be awarded to the parent by reason of the death of his child, on account of the expenses of the funeral. Note II. to § 129, ante, p. 506. LIABILITY FOR ACT OF THE AGENT OR SERVANT OF THE CONTRACTOR. Where one gratuitously permits another to use a shed to do a piece of car- penter work, it is a revocable license, and has no analogy to a badment of personal property, and the only duty imposed upon such person is that he should not be guilty of negligence in the use of the shed. Therefore, where a servant of such person, in the course of the work, dropped a match with which he had lighted his pipe, and thereby set fire to the shed, it was held the defendant was not liable for the damage, notwithstanding the jury found it occurred from the negligent act of the defendant's workman. But if the negligence of the work- man had been in a matter within the range of his employment, the defendant would have been responsible. Williams v. Jones, 3 H. & C. 602; s. c. 11 Jur. N. S. 843 ; Woodman v. Joiner, 10 Jur. N. S. 852 ; Bartlett v. Baker, 34 L. J. Exch. 8 ; s. c. 3 H. & C. 153 ; Blake v. Thirst, 2 H. & C. 20. Where a railway company was empowered by act of parliament to build a bridge across a navigable river, but were to do it so as not to detain vessels longer than while persons and teams ready to cross the bridge were passing over, dur- ing the construction of the work by a contractor, by some defect of construction the bridge could not be raised, and the plaintiff's vessel was detained, it was held the company were responsible. Hole v. Sittingbourne & Sheerness Railw., 6 H. & N. 488. A person employing another to do a lawful act, is presumed, in the absence of evidence to the contrary, to employ him to do it in a lawful and reasonable manner ; and therefore, unless the parties stand in the position of master and servant, the employer is not responsible for damages occasioned by the negligent mode in which the work is done. Butler v. Hunter, 7 H. & N. 826, S. P. 634 STREET RAILWAYS. Note III. to § 76, ante, p. 298. 1. Question of jurisdiction of the subject- matter of controversy. 2. The right of way, where different companies run upon the same track. 3. The mode of estimating compensation, where one street railway company use the track of another company. As passenger railways now exist in most of the cities and large towns in the country, and the question will often arise in regard to compensation to be paid by one company for the use of the track of another company, we have in- serted our report in an important case in Massachusetts, which was acquiesced in by the parties, and made the basis of adjustment between them without an appeal to the court on exceptions. Some other questions are also discussed briefly. The Broadway Railroad Company v. The Metropolitan Railroad Company. I. The petitioners claimed from the first, and throughout the hearing, that neither the court nor the commissioners had any legitimate jurisdiction of the matters at issue between the parties, and demanded of the commissioners a formal report of our determination upon that question. This exception to the jurisdiction is based mainly upon the terms upon which the Metropolitan Rail- road Company were, by the City of Boston, allowed to lay their track, so as to complete the circuit (as it is familiarly called), the compensation for the use of which is now in question. This order was obtained in pursuance of the petition of the Metropolitan Railroad Company, with the consent and concurrence of the Broadway Railroad Company, and in consummation of an arrangement between those who represented the respective companies before the legislature, and for the purpose of compromising the controversy then going forward between them, before the legislature, in regard to the right to build and use this circuit. It was arranged that the Metropolitan Company should take such addition to their charter as was requisite for the purpose, and go forward and obtain the location of their track upon this circuit, and construct the same, with the ex- pectation and understanding between those who thus represented the interests of the two companies, that the Broadway Company would be allowed to run their cars upon the circuit upon such terms as might be agreed upon between the parties, or settled by the proper tribunals, in case of disagreement. Nothing was said at this time by either party, in regard to the subject of toll or compen- sation to the Metropolitan Company for such use of their track. Upon the granting of the order by the city government for the location of the track upon this circuit the following condition was annexed to such order : " This location is granted under the further express proviso and condition, that the Board of Aldermen reserve the right to permit the Middlesex Railroad Com- pany and any other horse railroad company to run cars over the track, so located by authority of this order, for such compensation to be paid to the Metropolitan Railroad Company, and upon such terms and conditions as the Board of Alder- men for the time being shall prescribe." INSTRUCTION OF TRACKS. — RIGHT OF WAY. 635 After the Metropolitan Company had laid their track and completed the cir- cuit, they permitted the Broadway Company to enter upon and use it, without any compensation for the use being agreed upon by the parties, or fixed by the Board of Aldermen ; and without any distinct claim of that kind being made by the Metropolitan Company at the time such use began, except what is to be in- ferred from the conversation which passed between the agents of the two com- panies, with reference to the subject just before the use began. The lessee of the Broadway Company " asked the president of the Metropoli- tan Company what they were going to charge them ? " He said " it was a new thing ; wait and see what damage " ; " did not know what " ; " did not know as it would be any "; and two directors of that company, upon being inquired of upon the subject, "said the same." " But never told them they could run for noth- ing " ; said " it was a new experiment." The use of this circuit began on the 5th day of September, 1861, by the Broadway Company, and they were formally notified in February, 1862, that they would be expected to pay for the use, or as the witness said, " to pay damage, ' " and that some arrangement " (in regard to the subject) " must be fixed." From this and other matters passing between the companies and their agents, both before, at the time, and after such use began, the commissioners are satisfied that it was intended by both parties, at the time, to leave the matter of compensation for future adjustment. The commissioners did not consider that any, or all, the preceding exceptions could have the effect to defeat the general jurisdiction of this Court in the matter, and proceeded with the hearing. II. The petitioners next requested the commissioners to determine the mode of crossing at the intersection of the tracks at Beach Street and Harrison Av- enue ; and to decide which company shall have the preference in the right of way at such crossing, or which shall wait for the other, when both have cars ar- riving at the crossing near the same time. It appeared that the Broadway Com- pany had thus far conceded the right of way to the Metropolitan Company upon their own track ; and the commissioners consider this to be reasonable and just, and report that it should be continued. III. The petitioners urged before the commissioners, that some order should be made by them in regard to the conductors of the Metropolitan Company stopping at the office of the Company in Tremont Street each trip to settle their fares. It was claimed that there had sometimes been mismanagement and unnecessary delay in regard to this matter. But, at present, the delay on this account has been reduced to one minute or less each trip, which seemed to be as short a time as could fairly be insisted upon, if the thing is to be regarded as allowable. , The commissioners being aware of the embarrassments attending the account- ability of persons receiving money in the mode it is received by these conduct- ors, and of the liability of the company to suffer loss, unless the settlements are required to be prompt and frequent, have not been able to devise any scheme in regard to the mode of conducting the same, which they were prepared to rec- ommend as a substitute for the one now practised. And as this mode of settle- ment with conductors seems to have been adopted by the company after mature 636 STREET RAILWAYS. deliberation, and to be regarded by them as indispensable to their reasonable security against loss ; and especially as it is now conducted with the view of producing the least possible delay and inconvenience to the other companies using the same track ; the commissioners did not feel prepared to recommend its discontinuance, notwithstanding its liability to be so conducted as to produce serious inconvenience to others using the same track, as it was claimed had sometimes been the case. We have come to this conclusion partly upon the ground that, as we view the matter, the rights of the company owning the track are paramount, and should be first secured, as far as they can be, without un- reasonable and unjust restraint upon othe^ companies using the same track ; and that in cases where there is a necessity that the convenience of one com- pany should give way, and the inconvenience to either company will be nearly equal, it should fall upon other companies rather than upon that which owns the track. We consider that other companies should not be allowed to use the track of the company building and owning it, unless in a manner and to an ex-. tent consistent with the reasonable freedom of the latter in the conduct of its own operations. If we are mistaken in this view, and the rights of both com- panies are precisely equal in all respects, in regard to the use of the track upon this circuit, it is very possible some scheme may be devised whereby this delay may be obviated. If the Metropolitan Company were required to keep this office for settlement with conductors upon some other portions of their track, where the cars of other companies did not run, it is obvious the cause of com- plaint would be removed. This has occurred to us as the simplest mode of effecting that object ; but we have not deemed the inconvenience sufficiently serious to require any order by us at this time. IV. In regard to the matter of compensation claimed by the Metropolitan Company for the use of their track by the Broadway Company, the views pre- sented by the parties were extremely diverse. We shall only present them to such an extent as to enable the Court to pass upon them understandingly. 1. The Broadway Company claimed that there is no compensation to be al- lowed in such cases, since all persons have equal right to the use of the high- way, and may with impunity fit their carriages so as to run upon the rails laid by any other person, natural or artificial, within the limits and along the line of the highway. This claim was based, a good deal, upon the assumption that the carriages of other horse railroad companies, running upon the track of the Metropolitan Company, injured them far less than the injury resulting from carriages not running upon their track, and less than would result from the Broadway Company earring their passengers along the same line in omnibuses. The Commissioners were satisfied this assumption is altogether well founded, so far as the facts are concerned, but were not prepared to adopt the legal conclu- sions involved in this view of the case. 2. The Broadway Company claimed that the Metropolitan Company was pre- cluded from all claim for compensation, in this mode, on the ground that under the first location of the Broadway Company, in Summer and Winter Streets, they had the right to enter upon the track of the Metropolitan Company and to use the same, and no compensation for such use could be enforced against them COMPENSATION FOR USE OF OTHER TRACKS. 637 except under some order of the mayor and aldermen of the city. But it being conceded that this location had been vacated by the judgment of the Supreme Judicial Court, and that the Broadway Company had subsequently obtained an amendment of their charter, enabling them to unite •with the Metropolitan Company's track, and to use the same, and the compensation for such use, it was expressly provided in such amendment, should be settled in this mode ; and also for other reasons the Commissioners were of opinion that this claim was not well founded, and overruled the same. 3. The Metropolitan Company presented their claim for compensation, in many different forms, in order, as far as practicable, to enable the Court to pass upon the same understanding^ ; and because the matter is now one chiefly of new impression, and where as yet no rule of compensation has been established by the decision of the courts or the usages of business. We shall indicate these claims briefly. (1.) The Metropolitan Company claimed that in estimating compensation to them for the use of their track by the Broadway Company, the Commissioners should ascertain the net profits made by that Company during the period in question, and then average it upon the whole track over which their cars passed, and give the Metropolitan Company the proportion earned upon their track, as the just compensation for its use. Upon this mode of estimation they claimed $8,290.71. (2 ) The Metropolitan Company also claimed that the Commissioners should estimate the compensation for such use, by allowing them the net earnings per mile run upon their track by the Broadway Company, which they claimed was seven cents ; and should add thereto four cents per mile run upon their track, as the just rate of compensation for ordinary expenses and deterioration, and five cents per mile run for making and repairing pavements, making in all six- teen cents per mile run by the Broadway Company upon the track of the Met- ropolitan Company, which, as they claimed, would give them $9,899.36. (3.) The Metropolitan Company also claimed that the Commissioners should estimate the compensation to them by taking into account the net earnings of the whole line run by the Broadway Company, and divide such net earnings upon the whole line in proportion to the cost of each portion of the road run by the cars of the Broadway Company, adding thereto the expenses incurred by the Metropolitan Company upon this circuit, or the just proportion of such ex- pense which fell to the use of the Broadway Company. Upon this hypothesis they claimed $12,044.05. These different views will appear more in detail upon the exhibits of the Metropolitan Company, and with slight modifications which we have not stated, and which may be referred to, marked D. No. 10, D. No. 11. The Commissioners were not prepared to adopt and recommend either of the views above stated as urged on the part of the Metropolitan Company, because they did not regard them as based upon any rate of compensation bearing any just proportion, either to the value or to the expense of the use of the track to the respective parties. 4. A good deal of testimony was given on the part of the Metropolitan Com- 638 STREET RAILWAYS. pany with a view to induce the Commissioners to fix some toll or rate of com- pensation in proportion to the extent of the track used. This was based mainly upon the rent paid different horse-railroad companies, leading into Boston, by the lessees. But the Commissioners were not satisfied that any essential aid in estimating this compensation could be derived from this source. The rent paid by the lessees of horse railroad companies is usually a gross sum for a given extent of track. The rate of such rent is liable to be affected by so many and important considerations peculiar to each line of roads, that it seemed impossi- ble to make the rent paid upon one road much guide for any other. It is pos- sible that in the course of years some approximation towards an ordinary rent per mile of track, or per mile run, may be arrived at. But it is very obvious nothing of the kind has yet been attained, and it seems to us very questionable whether it ever can be. 5. The Metropolitan Company attempted to show, from the analogies in re- gard to the use of the tracks of steam railways, by other companies, and the rates of compensation, some data which might aid the Commissioners in arriving at a correct estimate of compensation in the present case. But the Commis- sioners failed to perceive any satisfactory ground whereby these analogies could be made to apply to the present case. The motive power upon steam railways being such that it requires, for safety and success, to be under the control of a single agency, it does not admit of allowing such companies, to any great extent, to run their engines and cars over other lines than their own. Hence, where passengers or freight are carried by one road for other connecting lines, it is done, most commonly, by means of their own motive power, and an allowance is made for the use of cars, and conductors in some instances, and for patronage possibly. But the rate is seldom fixed for the use of the track alone. It is more commonly determined by a division of fare and freight, in such proportion as shall seem just in the particular case, and with reference to circumstances, many of which are not of general application to other cases, so that very little aid is to be obtained often, even in regard to a case upon steam railways, from the rule adopted in others, much less in regard to the rate of compensation for the use of the track of street railways. The commissioners, after a good deal of time spent in the hearing, and a very careful examination of all the testimony given before us, and of all the views presented by the parties and their counsel, came to the conclusion that the proper mode of estimating compensation in this case, was to ascertain the cost of the track used, and of superintendence ; the expense of the repairs and tend- in^, and the probable deterioration, and the expense of clearing track, and the extent of use, and to require all parties concerned in such use to contribute ratably towards the expense of maintaining such track. We had no doubt the company building the track must be regarded as having a property in it. And although it may not be a matter altogether free from em- barrassment, to give a satisfactory definition of the precise nature of the rights and interest of such company in their track in all respects, it is nevertheless clear to the minds of the commissioners, from the decisions already made in this commonwealth, and in other states, that such track must be regarded as in the COMPENSATION FOR USE OF OTHER TRACKS. 639 nature of private property, and that it cannot be fairly considered, as in any just sense, devoted by the makers to public uses. Hence we do not understand that it is competent for any person, natural or corporate, at his mere will, to ap- propriate the track of a horse railway company to his own private use and con- venience, by adapting his carriage to such use for that purpose ; if that were established it would go far towai'ds the recognition of the claim of the Broadway Company, that no compensation could justly be awarded by the commissioners in the present case. But the commissioners regard the track and its accessories, although laid in the public highway, as constituting an important estate in the company to which it belongs. And where it is built or maintained for the con- venience and use of two or more companies, it is obvious, as it seems to us, that no more simple, natural, or just mode of estimating compensation for its use can be suggested than to divide the expense necessarily incurred in its maintenance and use, according to the use. In the present case we have found some difficulty in determining the neces- sary expense of maintaining this circuit in such a manner as to make it alto- gether satisfactory to our own minds. The principal difficulty has arisen in regard to the expense incurred by the Metropolitan Company in complying with the conditions annexed by the city government to the location of their track in this circuit in regard to paving and improving the streets through which it passes. This company were by these conditions required to pave the entire street for long distances, and to contribute large sums towards the expense of widening streets, and the company were compelled to comply with such condi- tions, without questioning either their legality or their reasonableness, since the municipal authorities unquestionably had an absolute and irresponsible discre- tion in regard to the terms upon which they would suffer the track to be laid or continued in such streets, and it was not therefore material to inquire how far their requirements were legal or not, as they could at any moment require the track to be removed unless all the conditions they saw fit to name were strictly and promptly complied with. But it was claimed by the Broadway Company that these requirements were a kind of official extortion, which being wholly without warrant of law, could not justly be taken into the account of the legitimate expense of maintaining the track of this circuit. But the commissioners were not sufficiently satisfied of this to feel justified in excluding it from the estimate of the cost of maintain- ing the track in this circuit. And whatever might be thought of its entire legality, there could be but one opinion in regard to its necessity, since no tribunal could possibly control the action of the municipal authorities in regard to the subject. There can be no doubt that such arbitrary exactions are very liable to abuse, and are therefore naturally calculated to excite in the public mind the suspicion of such abuse. And where a railway company is allowed to lay its track in the street, upon the condition of assuming the burden of paving the entire street as far as the track extends, or for large portions of it, and of paying large sums to- wards the improvement of the streets, by widening or otherwise, through which the track runs, it has no doubt somewhat the appearance of going beyond the 640 STREET RAILWAYS. mere remedying the inconvenience caused by its own works, and some views may be taken in regard to it which give it the appearance of being the price of the grant. But courts and their instruments are bound, we suppose, to view such transactions, with a charitable disposition to maintain and justify them upon allowable grounds. And in this view it seemed to the commissioners that there was no satisfactory proof in the case that these burdens were not imposed in good faith, and that they might not justly be regarded as rendered necessary, in some sense, and to some extent, in consequence of the privilege granted to these companies to use their cars through these streets. And as it was certainly a burden which the Metropolitan Company could not escape, as before stated ; and as the privilege accorded to these companies is one of a very burdensome and offensive character, so far as other public travel is concerned ; and one which would not be likely to meet with much indulgence from the public, if it were not for the very great accommodation thus afforded to a class of persons who do not use the public streets, with carriages, to any great extent in other modes, it seemed to us that the companies using this circuit could not justly require to be exempted from their proportionate contribution towards this expense. And the last consideration adverted to might justly seem to require the city authorities to be watchful that such privileges were not given these companies except upon the condition that they indemnify fully against all expense fairly attributable, either directly or indirectly, to their peculiar use of the street. And so far as it may fairly be considered doubtful whether the burdens imposed upon the Metropolitan Company are not fair and legitimate, the commissioners are bound to regard them as being so. We have therefore included this expenditure in the estimate of the cost of the track along this circuit, and have taken the expense of maintaining the pavement into ac- count, in estimating the expense of maintaining the track. We call the cost of building the track in this circuit, ac- cording to the requirements of the charter, . . $ 21,000 00 Expense of paving and other business imposed, . 24,04.7 96 Cost of curves and engineering, 1,150 00 846,197 96 Interest upon capital thus invested, . . . . $ 2,770 97 Snow expenses, by estimation, 1,200 00 Repairs of track, 750 00 Depreciation of track 750 00 Repairs and deterioration of paving .... 2,000 00 Policeman, trackman, and guarder, and contingent ex- penses of tending track, 1,500 00 Allowance to company for general supervision, including proportion of salaries, law expenses, and other matters not susceptible of clear definition, but which will inevi- tably occur in numerous ways, 3,000 00 $11,970 97 COMPENSATION FOR USE OF OTHER TRACKS. 641 One fifth of this sum, we think, should be paid by the Broadway Company annually to the Metropolitan Company, beginning from the date of the petition in this case, $ 2,394.19. And if the commissioners have any jurisdiction to de- termine the rate of compensation before the date of the petition, which from a hasty examination would not seem to be the case, we should fix the same rate of compensation in proportion to the time from the first entry of the Broadway Company upon the track of the Metropolitan Company, which was on the 15th a day of September, 1861. We have allowed nothing for counsel fees in estimating the cost of this circuit, because we regarded such expense as chiefly the result of the controversy be- tween the companies, and presume that similar expenses were incurred by both companies, and after the controversy had been compromised by mutual conces- sions, we judged it to be fairly within the spirit of the compromise that the ex- penses of the controversy should not be brought into the future dealings of the parties, but should set off against each other. Some claim was made by the Metropolitan Company on account of their greater exposure to claims for damages occurring along this circuit to persons or their vehicles, in consequence of the streets being more crowded by the frequent passing of teams, resulting from the use of the track here by so many companies. But the commissioners did not make any separate allowance on this account, be- cause it was extremely difficult of estimation, and did not seem to rest upon any sufficient legal basis. For if injuries complained of resulted from the negligence of one company or the other, or their servants, it should fall, and must fall, if the claim were enforced by legal steps, upon the company in default. And if such claims were not founded upon any legal default of any party, they could not be regarded as legal claims, and the settlement of them being a voluntary payment in order to buy peace, could not form the basis of a legal claim against any one. But the commissioners had no doubt the Metropolitan Company would be pre- sented with some claims of this character every year, which they might choose to pay rather than contest them, and which it might be prudent to meet in this mode, and that the expense thus incurred might be increased to some, extent by reason of the use of this circuit by so many companies. We could only meet this, if in any mode, by a pretty liberal compensation for general supervision, which we have allowed. In this we thought it just to take into account the fact that the company owning the line, used in common by other lines, neces-* sarily must be subjected to many outgoes, not fairly attributable to any specific duty, or breach of duty, and which nevertheless must be met, and should be compensated in some way by those who have the common use, and consequently contribute their share in bringing those outgoes upon the primary company. The Commissioners had under consideration the question of the diversion of passengers from the Metropolitan Company by the Broadway Company being allowed to run their cars upon this circuit, and which passengers would other- wise naturally go upon the Metropolitan Company's cars. We had no doubt such diversion took place to a considerable extent. But we were not prepared to say that the Metropolitan Company could require the loss thus sustained to be included in the estimate of compensation for the use of their track. We VOL. I. 41 642 STREET RAILWAYS. thought it could not be thus included, and if we were wrong in our view, there should be added to the estimated compensation at least $ 300 annually. The Commissioners considered that the Broadway Company had acquired the legal right to take up and carry passengers from any one point to any other point upon their whole route, including this circuit. This view of the case suggested to the Commissioners in ordinary cases, where one company is allowed to drive its carriages over the track of another company by means of its own motive power, whether upon steam or horse railways, the necessity of providing against any diversion of the natural and legitimate busi- ness of the company owning the track. This is effected more readily upon steam than upon horse railways ; and the company exposed to loss has a more obvious check upon the other. In the case of horse railways, where passengers are taken up and set down at every point upon the line, and where the public accommodation would seem to require that every company passing along the line should be allowed to do this, it will be more difficult to keep the amount, and the company exposed to loss has no natural check upon the other. The Commissioners suppose it was not the intention of the legislature to al- low foreign companies entering upon the track of those companies owning and maintaining it, to divert the business primarily and legitimately belonging to such company. But as the circuit in question seems to be the natural outlet of a considerable number of horse railroad companies centring in Boston, and the use of it seems necessary to enable such companies to accomplish satisfactorily the proper busi- ness for which they were incorporated, the Commissioners regarded it more in the nature of an investment for the common benefit of all these companies, than in ordinary cases. In the common case of one company being allowed to run its cars over the road of another, it would seem requisite, in order to effect per- fect justice between them, that the company owning the track should be indem- nified for any diversion of its own legitimate business ; and we submit whether or no it should be so in the present case. We have thought that the increasing interest in Street Railways would justify the insertion at this place of a large portion of our carefully prepared report to the legislature of Massachusetts on that subject. The subjects of the commission discussed in detail. 1. Until perfection is reached, the exact relations of the municipalities and street railways cannot be strictly defined. Scope is required for development and growth. 2. We do not regard the interests of towns and cities as opposed to that of street railways. 3. Caution required to be used in regard to concessioiis of public right. 4. Reserve in regard to concessions to private interests of great magnitude and success, ex- cusable. Tins may be done, in excess. Primary control of streets, and idtimate con- trol, if practicable, should remain with municipalities. 5. Relations of street railways to each other, and to the use of streets by other vehicles, frc. ( 1 . ) Rule of compensation where one road uses the track of another, without doing any competing business. (2.) The best mode of accommodating other travel to street railways. (3.) The gauge of street railways and other carriages, should be the same. RELATIONS TO TOWNS AND CITIES. 643 (4.) Paving street and three feet on each side, fully indemnifies the cities and towns, in ordinary cases. (5.) Railways should not be allowed in street, unless room for two tracks, and for car- riages to stand, and others pass on either side. (6.) Street railways should be restricted ivithin these reasonable limits, in laying new tracks. Improvements suggested in Boston. 6. Further discussion of the use of tracks by different companies. (1.) Branch lines should account for the net prof ts of all business done by them exclu- sively upon the trunk line. (2.) To exclude the branch line from the trunk might put it too much in the* power of the latter. (3.) Not practicable to require trunk roads to draw the cars of branch lines over their own road, in all cases. (4.) The rights of trunk and branch lines, upon sound principles of construction. (5.) The mode of estimating compensation in such cases, recommended by us, will cure the desire to multiply trips. 1. The relations of street railways to other travel , further discussed. 8. The propriety of consolidating street railways in Boston, discussed and doubted. 9. Omnibuses cannot, properly, be excluded from streets where street cars are allowed. 10. The subject of removing ice and snow from the streets discussed. 1 1 . Tlie motive power of street railways. Dummy engines. (1.) The examination of these engines. Their use not fully tested. (2.) They will be exceedingly useful in rural and suburban districts. (3.) They occupy but small space, ascend steep grades with ease, and possess great power. (4.) They will be likely to come into general use in light and short passenger traffic, both on. steam and street railways. 12. Commutation tickets. Best regulated by the companies. Change recommended. We shall now give our views upon all the subjects submitted to our consideration, in the Resolve providing for our appoint- ment, in the order in which they occur in the Resolve. 1. In regard to " the relation of street railways to the cities and towns in which the same are located " very much may be said ; and at the same time it has not appeared to us judicious to attempt to define these relations, and the consequent rights and obligations, with much strictness, by any new legislative pro- visions. It has become an axiom in regard to all the intimate relations of life and business, that in proportion to the closeness of the relation was the demand for flexibility and expansiveness in the rules, or laws, under which the relation was attempted to be maintained, if we would secure reasonable freedom and com- fort in the continuance of the relation ; and especially where we intend to give room and scope for development and growth in the future. When we feel sure that any system has reached the point of perfection, so that there is no further demand for space 644 STREET RAILWAYS- for development or growth, it will be practicable to define the obligations and duties of the related parties with perfect accu- racy ; but, until that point is reached, there will be large demand for modification and experiment, and this will always require lat- itude and liberality in the terms and in the construction of the laws which we apply to the subject. 2. It was very much urged upon our consideration by the dif- ferent railway companies which came before us, that some mode should be devised for making the street railways in some degree independent of the exactions and control of the cities and towns through which they passed. There seemed to be a feeling as if the municipal authorities had an interest, in some sense, antag- onistic to that of the street railways within their limits ; so that when the interests of the latter were submitted to the judgment of the former, it was equivalent to being tried by an adversary party. We have no question that this feeling is very sincerely entertained by many of the officers of the street railway com- panies, and there may have been more or less reason for the feel- ing in the past relations and experiences of these two interests, since all such matters are more likely to assume the form of antagonism, in the incipient stages of the growth of a new enter- prise, than after its form and demands have become more fully developed, and consequently better understood. But we have not been able to comprehend why the municipal boards of the towns and cities stand in any position of interest opposed to street railways, more than to any other, as extensive and important interests within their limits. 3. It is undoubtedly true that the more exclusive the interest and occupancy which any class of carriages shall require or de- mand in the streets, the more needful it will become, and the more natural, that those who have the charge of repairing and clearing the streets should exercise watchfulness and circumspec- tion, lest encroachments should imperceptibly be suffered to grow up in regard to other travel. So also the larger and more influ- ential an interest becomes, and the greater number of persons who are interested in its continuance and extension, the more difficult it will be to retrace any step of indulgence once con- ceded to such interest ; and consequently there will exist the greater need of caution in regard to making concessions to it, RELATIONS TO TOWNS AND CITIES. 645 lest acquiescence and forbearance, which were intended as mere courtesies or accommodation at first, might subsequently be urged as the basis of rights. Hence the municipal authorities may sometimes feel compelled, no doubt, to exercise a more rigorous oversight, and a more minute inspection and pertinacious spirit of insisting, in regard to small matters, in the use of the streets by railways, than in regard to any other mode of use. 4. And we suppose it is too well understood to require repe- tition here, that all private interests become more and more aggressive upon public interest in proportion to the magnitude and success of such interests; and hence the .municipalities, without intending any unjust discrimination, may very naturally have manifested extraordinary reluctance to yield to the demands of the street railway companies ; and in granting them locations and other necessary privileges in the streets, they may have at- tached such limitations and conditions as seemed to the companies unreasonably onerous, without really having intended any in- justice. And we are bound also to say, both from the testimony before us and the common experience upon the subject, that there have no doubt occurred some instances where unjust and unrea- sonable exactions have been made upon these railway companies by way of exorbitant services in return for grants, which, if not exactly matter of course, and to be conceded without limitation or reserve, should certainly have been conceded upon much more favorable terms, if conceded at all. And from what we have seen and learned, in regard to matters of this character, we should expect that such instances of abuse would be likely to occur oc- casionally in the future ; as it is matter of common experience with the majority of men, and especially those who are in posi- tions, where the favorable opinion of the multitude is in the nature of an estate, very valuable and desirable to be secured, that there will be much less anxiety about giving offence or the color of complaint to any person, natural or corporate, which is not in condition to retaliate the affront, than if it were otherwise. Hence we have included among the additional legislative pro- visions which we have recommended, such safeguards against all such possible abuse as seemed to us most likely to secure the street railway companies in the future against all injustice, with- out intending to restrict the primary control of the municipal 646 STREET RAILWAYS. authorities over the streets and highways within their limits. This primary control of the use of the streets and highways by every species of vehicle, seems to us altogether indispensable in the municipal authorities, in order to secure the efficient admin- istration of the police in such places ; and it has also appeared to us, that it would be liable to create too much embarrassment and delay in such administration, if appeals were allowed in every instance from any order made by the municipal authority upon such street railways. We have endeavored to preserve the proper medium. 5. " The relations of street railways to each other, and to the use of the streets by ordinary vehicles, and the whole matter of the conveyance of passengers through the streets by horse-cars and omnibuses," form the next department of our commission ; and this it will be convenient to consider under separate divisions. (1.) " The relations of connecting street railways to each other." This is an important and, as it has seemed to us, a somewhat difficult problem. There is no great difficulty iu re- gard to street railways converging to a common centre, and where there is no direct competition in the different lines of travel to- wards that central point. In such cases where it becomes neces- sary or convenient, in order to reach the common centre of traffic, for one company to use the track of another company for a greater or less distance, within such limits as not to create a competing business, it should always be granted by the legislature upon condition of making reasonable compensation. The obvious rule of equitable compensation in all such cases seems to be the pay- ment of interest upon a portion of the capital invested in the track proportionable to the use, and a proportional part of the expense of supervision and repair, and of the deterioration of the same. This seems to us more just, and more strictly following out the analogies of the property and the public rights than either of the other possible rates of compensation, i. e. by paying a sum equal to the injury done the track by the use, or by paying ac- cording to the benefit derived from the use. (2.) We come to this conclusion because we regard street railway tracks, by whomsoever built, as in the nature of a com- mon highway. And although the first company to whom such a grant is made by the legislative authority unquestionably ac- COMPENSATION FOR USING TRACK OF OTHER COMPANY. 647 quires a franchise of a corporate character in this mode of trans- portation, and an exclusive franchise to some extent, this exclu- sive franchise only extends to the use of the tracks in this precise manner, i. e. for transporting passengers in cars for hire or toll. It seems certain that such grants are not intended to exclude ordinary vehicles from using the rails longitudinally for the pur- pose of passage, or to exclude ordinary vehicles from being so made or altered as to conform to the gauge of the tracks, so as to run the wheels of such carriages upon the tram of the rails. In some of the cities in other states the gauge of the street railways was originally fixed at such a width as to invite the ordinary travel in carriages into the same lines with the cars used by the company. And where the streets are of sufficient width to allow of two railway tracks, and it becomes necessary to allow a rail- way to occupy such street at all, it would unquestionably conduce very much to the quiet and good order of the travel in such street to invite all the travel, in each direction, into a single cur- rent upon each of the tracks of the railway, in the same direction as the cars pass. This is done by force of city ordinances in some of the cities, and is found very useful ; and in some of the states it is effected by special statute. (3.) This brings up the question of the gauge of street rail- ways as compared with the width of ordinary carriages. And it seems to us that if the question were new it could not fail to meet the approbation of all, to require the gauge of street rail- ways to conform to that of ordinary carriages, as has been done in some states. But this would now be impracticable in this Commonwealth without great loss and expense to the companies whose tracks are laid. Carriages may be conformed to the rail- way gauge, but that might be a detriment to the carriages. We must probably now be content to let it follow the natural course of interest and convenience. We have not embraced in the bill reported by us any provision upon the subject. But wherever the carriages and railways in the streets can be brought to the same gauge, and two tracks instead of one be laid in the same street, we should regard it as the most judicious arrangement which could be made for the accommodation of street railways. Under such an arrangement it does not seem to us that the street railways, by maintaining that portion of the street covered by 648 STREET RAILWAYS. their tracks and a reasonable distance on either side, three feet perhaps, could prove much detriment to the streets. It has ap- peared to us that, under such an arrangement, they would be likely to prove more a benefit than a burden to the cities and towns where they exist. The bill reported embraces a provision of this character. (4.) And we have n6 question that, where a single track is laid in a street of sufficient width to allow of carriages passing on either side, without coming so near the curb-stones as to inter- fere with carriages remaining stationary along the sidewalks, the obstruction would be but slight, unless the street was very much thronged. In such cases it is probable the paving of the portion of the street occupied by the track, and three feet on each side, would be a full compensation for the privilege, and might even leave the municipalities in better pecuniary condition than if no such track had been laid. (5.) We have been forcibly impressed with the absurdity of allowing a railway track in a street, so narrow, that there is not sufficient room for a carriage upon either side to stand comfort- ably, which is sometimes done, as was shown before us. And we have felt, that where it could be done, the street railway tracks, in the cities and populous towns, should be restricted to those streets which are of sufficient width to allow of two tracks, in the manner already explained ; and that no railway track should be allowed in any street not of sufficient width to allow the passage of carriages upon either side, without interfering with carriages standing near the sidewalks ; or if allowed, it should only be done as matter of strict necessity, and to the least possible extent. (6.) If the tracks of street railways are restricted within these reasonable limits, it does not appear to us that they will produce any such obstruction to the orderly progress of other travel, as to become a just occasion of complaint. But where they are allowed in streets narrower than already intimated, we feel confident they must prove a considerable obstruction to other travel. And while we deem it expedient to leave the primary power of location with the municipal authority, and without restriction, we should cer- tainly regret to see street railways laid in the crowded and nar- row thoroughfares of any of the towns or cities of the Common- wealth. We believe that if the railway tracks and the omnibus RESTRICTIONS IN LAYING TRACKS IN STREETS. 649 lines could be removed from the lower end of Washington Street, in the city of Boston, it would prove a great convenience and comfort to the other travel there, both in carriages and on foot. We are not able to say that this is now practicable, without too serious an embarrassment in regard to street railway and omnibus travel. But if the thing had been considered early enough, we believe it might have been effected, without any such inconven- ience to that travel as ought to be regarded as any ground of complaint. It seems to us better that such public modes of con- veyance should be kept out of the most crowded thoroughfares, and especially the street railways, which cannot be made to pass except upon an inflexible line. It ought not, and need not be regarded, as any just ground of complaint, that passengers cannot always be taken up and set down, at the precise point where they most desire it. There must be some limitation upon these public accommodations, by way of passenger transportation, short of the wishes of those most nearly concerned, or it would compel the surrender of the entire streets, and all the travelling transporta- tion, to this particular species, which of course will not be ex- pected. These things must be made to accommodate themselves to existing necessities, and it need not be required, to push a railway car into the most public places of concourse, in order to tempt passengers to embark upon it. If the railway is of sub- stantial accommodation to an important course of travel, and its line passes within reasonable distance of the ultimate destination of such travel, there need be no anxiety about securing all the travel which really demands any such accommodation. And we believe the great anxiety to push the lines of street railways into the very centres of public concourse, arises a good deal from an apprehension of competition, either from omnibuses, or other railways, unless that is done. But the conveniences and comfort of omnibus travelling are not such as to operate as a serious com- petition against the far greater comforts and conveniences of street railways, except in particular cases, and to a very limited extent, and where, for some reason, they are able to give a special advantage in some other particular. 6. " The relation of connecting street railways to each other," has been anticipated, so far as different lines converge to a com- mon centre, and where one road desires to use the track of 650 STREET RAILWAYS. another company only to the extent of reaching that centre with its own traffic, without doing, in any sense or to any extent, a competing business. Beyond this, it is rather a perplexing prob- lem to define with clearness and certainty the best rule for the use of one railway company's track by another company. It seems to be indispensable to allow the traffic of one company to pass over the track of all intervening roads in order to reach its ultimate and legitimate destination. If this were not done, it would leave the traffic of the branch roads so entirely at the mercy of the trunk lines, as to give them the power, and the motive, to make an unequal discrimination in their own favor. And to such an extent would this be liable, and likely, to be car- ried, that it must seriously, if not fatally, affect the interests of such branch lines. So that all the witnesses before us, in the interests of branch railways, concurred in the opinion that the right to run their cars upon the track of the trunk roads was indispensable to the reasonable security of their rights. But this necessity only extends to the transporting of such passengers as these branch roads take up or set down upon their own lines, and would not naturally extend to that portion of the traffic which is strictly limited to the trunk line, i. e. where it begins and ends upon that line. We think that traffic which comes so near the line of the trunk as to be attracted to it, without the existence of the branch; but which nevertheless comes upon the branch before it reaches the trunk, and also that which goes from the trunk line, but is destined to points beyond the trunk, and upon the branch, must be regarded as the legitimate traffic of the branch, and which it may properly transport upon the trunk, without in- curring the imputation of carrying on a competing business. To this extent we have already indicated our views in regard to the propriety of allowing the branch lines to use the trunk lines, and the basis upon which compensation should be allowed for such use. (1.) But beyond this we have found it difficult to define with exact precision any general rule. It is certain that no branch line should be granted or built, where it is expected to maintain itself, to any considerable extent, by the profits arising from the traffic on the trunk road. The doing of such business is a matter wholly incidental to, and not to be taken into the account, in MODE OF ESTIMATING USE OF OTHER TRACKS. 651 determining the necessity or propriety of creating a branch rail- way. All the traffic upon the trunk, both from the fair construc- tion of the grant, and the nature of the case, legitimately belongs to the trunk line, unless, as before stated, it either comes from, or is destined to, some point upon the branch. As to all the traffic which begins and ends upon the trunk, the branch is an intruder when it attempts to engross it, or indeed to do any part of it, with any view to profit. So far as this portion of the traffic is concerned, the branch roads should account to the company owning the trunk line, for all net profits above the fair cost of transportation. And we have recommended a provision to that effect. (2.) It was made a question before us, whether one street railway should ever be allowed to run its cars over the track of another company, where a competing business existed to any considerable extent, and it was attempted to be likened to the case of one steam railway driving its engines and cars over the track of another company, which is now prohibited by statute in this Commonwealth. But the cases are by no means similar. There is no such danger of injury to the passengers, and there is no such claim to exclusive property and use of the track, as in the case of steam railways. (3.) We have no doubt that the business of one street railway which required to pass over the line of another company, might be sufficiently accommodated, by allowing the latter company to attach its own motive power to the car of the first company, and thus draw it over, performing such traffic upon its own road as it could conveniently do, at the same time. And we have not been able to perceive any good reason why the traffic upon branch lines may not, ordinarily, be sufficiently accommodated in this manner. But as the rates of compensation in that mode of effecting the object would be very difficult to fix, either with reference to distance or number of passengers, or the use of such car for other passengers, thus necessitating an agreement of the parties or a reference to commissioners, we have deemed it more just and prudent to leave the matter open. Unless some statute law could be enacted containing such specific provisions as to obviate the necessity of any arrangement between the parties, or reference to commissioners, it has seemed to us that it would be 652 STREET RAILWAYS. leaving the parties in a more equal relation, and with more pros- pect of an amicable arrangement among themselves, without call- ing in the assistance of commissioners, not to restrict them to a single mode of passage over the trunk road, but to leave both modes open. There is no doubt a liability to very serious embarrassment, where two lines are allowed to do a competing business upon the same track. We have reflected upon some expedient to cure, or relieve, this evil. It might be done by prohibiting the company, entering upon the line of another company, from taking up pas- sengers not intended to pass over any portion of their own line ; but this would produce more or less embarrassment among those who might desire to become passengers, without understanding precisely the class of cars to which they legitimately belonged. And this embarrassment would be likely to exist, continually, to some extent. (4.) It is claimed, by those interested, in different directions, upon this question ; first, that when the legislature grant to one street railway company the right to run upon the track of another company, there is no implication of the right to transport passen- gers, whose transit begins and ends upon the latter company's track ; and, secondly, that they may do any portion of the busi- ness upon the track of the second company, the same as if they owned the track. It has seemed to us that the grant to one street railway company to run upon the track of another company, must imply the right to carry all passengers who choose to embark upon its cars ; but, as we have before said, we cannot regard the traffic which is limited exclusively to the trunk line as legiti- mately belonging to the branch company, for their own advan- tage. We think the net profits of such business, as before stated, legitimately belong to the company owning the track. This distinction may seem nice to some, and so is the whole subject. And we have not been able to find any other scheme whereby the public convenience and the rights of the parties can be properly accommodated to each other. For it cannot be ex- pected that, if the branch road is allowed to take passengers at all upon the line of the trunk road, it should be required to dis- criminate between such as desire to pass beyond the limits of the trunk road, and which will therefore legitimately belong to them, MODE OF ESTIMATING USE OF OTHER TRACKS. 653 and such as do not desire to so pass beyond the extent of the trunk road, and which therefore does not legitimately belong to them. And we cannot believe there can be any fair question but the branch line may and should be permitted to take up all pas- sengers intended to pass over any portion of their own route, although coming from the line of the other company. And if so, they must either take all who desire to come upon their cars, or else they must ascertain the extent of their proposed transit, before they allow them to come upon their cars, which would be a somewhat embarrassing mode of conducting the traffic upon street railways, and one which it would not be reasonable to adopt, as matter of construction merely. If then we allow the branch companies, having grants for passing over the trunk com- pany's line, to do the business legitimately belonging to the latter company, in order to afford reasonable accommodation to the public, and so as not to produce confusion in the manner of con- ducting the traffic, we should nevertheless secure to the trunk road the net profits of their own legitimate traffic, as seems to us most unquestionable. (5.) It has been suggested by some, that where a branch line is permitted to carry its traffic over the trunk road, thus necessi- tating a certain number of trips daily, for the accommodation of the long travel, and enabling the branch road to perform without embarrassment a portion of the local traffic upon the trunk road, that the frequency of the trips run by the trunk road might, and should, be proportionally diminished. We have no doubt some- thing of this kind might be advantageously done, in such cases, and that it would become the general mode of transacting the business upon the line, and be for the mutual interest and accom- modation of all parties concerned, if the mode of compensation for the use of the track were required to be estimated upon the basis herein before indicated. Upon any other basis of estimat- ing such compensation we should fear that in running cars of different companies over the same tracks, upon a route suffi- ciently extensive to create a competing business, there would always grow up a perplexing state of conflict. That was certainly the result of the testimony before us ; but we believe the provi- sions recommended by us in regard to compensation would cure this evil to a great extent. 654 STREET RAILWAYS. 7. The relations of street railways " to the use of the streets by ordinary vehicles" has been already sufficiently discussed perhaps. It is certain that street railways have become so much a necessity that they must be continued ; and although we believe they do produce a considerable obstruction to the comfortable passage of other vehicles in the streets, and especially where such streets are narrow and very much thronged, we nevertheless can- not believe that any wiser or safer course can be adopted than that hitherto in operation, of leaving it to the municipal boards to regulate and accommodate the matter as they best can. In the testimony given before us it was indeed stated by one gentleman, that in consequence of the great facilities offered by the street railways for cheap and comfortable transportation of passengers, many persons are induced to ride to their own detriment, and when it would be far better for them to walk than to ride free of charge, and we have no doubt this may be true, to some extent. But that is certainly not true of the largest proportion of the passenger traffic upon street railways. They are unquestionably, in the main, a very great convenience and accommodation to large masses of people of the middling classes, in respect of property, and which could not be afforded to the same extent in any other mode, and we know of no process of eliminating the evil from the good, any more in regard to this subject than many others. But we think the legislature, and the municipal authorities, can- not be too cautious in regard to multiplying these grants, or loca- tions, where they are intended to accommodate substantially the same business already provided for. There is always, in such matters, a certain reasonable limit, beyond which competition leads both to the destruction of the competing interests, and the neglect and disregard of public accommodation, and which should by all means be avoided. The number of vehicles passing at dif- ferent points in Boston, and the proportion of which are cars and omnibuses, will appear in the table appended to this Report. 8. And this leads us to advert to another question which was considerably pressed upon our consideration, — that of encourag- ing the consolidation of all, or nearly all, the street railways leading into Boston. This is a subject upon which a good deal may be said, with reason and justice, upon both sides, and we are not prepared to say that any certain and infallible rule can CONSOLIDATION, OMNIBUSES, ETC. 655 be laid down in regard to it. As a general rule, in railway enterprises of magnitude, the more interests can be combined the better, both for the public and the companies, both interests being nearly identical. But this proposition can only be admit- ted with this qualification, that the conduct and management of the traffic should be suitably restrained by legislative safeguards. There is always more danger of an overgrown monopoly becom- ing dangerous to other interests of a rival character, just in pro- portion to its magnitude, and the absorbing and overwhelming nature of its influence upon the other vital forces of society. And this is said without intending to impute any lower or dif- ferent motives, as the governing principle of action, in such extensive combinations of power, than in those of more moderate proportions ; all that is meant, is, that dangerous tendencies com- monly increase, in the compound ratio of their magnitude and continuance. It is sometimes observed, too, that such combinations of power in the seat of a great metropolis, where the other agencies of social and civil life and progress naturally centre, are more dan- gerous, and more insidious, in their overshadowing influence, than where it is more extended in its range, and consequently more liable to be checked and interrupted by counter or conflict- ing interests and influences. From all these considerations, and others which we have no time to name, we conclude, that while in the infancy of such enterprises there will generally be too much of a tendency to minute subdivision of conflicting interests, there commonly grows up, as they become popular and permanent, too great a tendency towards consolidation. This seems to us more objectionable in regard to street railways, whose property is attached to the easement of the public highway, than in those public works whose franchise attaches to an easement vested in the grantees. In New York, Brooklyn, and Philadelphia the street railway companies are very numerous ; and, in most re- spects, we regard this as more desirable, in regard to street railways, than too extensive consolidation. 9. The general power in our commission to examine " into the whole matter of the conveyance of passengers through the streets by horse-cars and omnibuses," will embrace a question raised by the counsel before us, whether we might not with pro- 656 STREET RAILWAYS. priety recommend the exclusion of omnibuses from all the streets where railway tracks were laid. If this were done, by a legis- lative enactment, it might become difficult to satisfy the carriers by these different modes of conveyance, in regard to the streets which each should occupy ; and thus be liable to lead to constant bickering and contention upon the subject. It would undoubt- edly be wise, if practicable, to exclude both these classes of vehicles from the most crowded thoroughfares, unless they were of such width as to accommodate all the travel without obstruc- tion or confusion. But the omnibuses, while they injure the streets more than any other class of vehicles, being of great weight and driven with considerable rapidity, do not obstruct the other travel in narrow and crowded streets so much as the horse-cars, for reasons already indicated. It would, therefore, be an invidious and unjust discrimination, to exclude the omni- buses from the streets most frequented by passengers, while the cars were allowed to pass there. It seems to us impossible to define, by legislation, any general rule upon the subject. We think it should be left to the discretion of the municipal authori- ties. 10. In regard to " the manner of using street railway tracks in the winter," and clearing them of ice and snow, we have not deemed it important, or safe, to recommend any additional legis- lative provisions. That is a subject, where prompt action and summary powers, in the municipal boards, are more indispensa- ble than in regard to any other matter connected with the subject. And although there is some liability to have the companies visited with hasty and injudicious orders in this respect, thus exposing them to considerable inconvenience and loss, at times, and possibly, in some cases, to a needless extent ; it did not ap- pear to us that there could be much temptation in such cases to exercise bad faith or injustice towards the railway companies, by the municipal boards ; and as the interest involved is not one of great magnitude, and we could not obtain much confidence that any legislative provision, or any other recommendation from us, could be of much avail towards remedying any possible evils which might arise in the case, we deemed it wise to leave the matter as it is. There was some testimony before us tending to show, that in REMOVING OBSTRUCTIONS IN WINTER. 657 some cases, the municipal boards had permitted the railway com- panies to have the entire duty of removing the ice and snow from the street, so that it did not interfere with the travel in ordinary vehicles, and that this had proved useful to the public and eco- nomical to the companies. And it seemed to us not improbable that some such arrangement might be advantageously adopted in many instances, and that it ultimately would be, if found the most beneficial which could be devised. We think this matter, like many others of a kindred character, will be likely, ulti- mately, to regulate itself, by the exercise of judicious supervision on the part of the municipal boards, in a much better manner than it can be done by specific legislative provisions, until .at least there has been time for more perfect experience, in order to reach the best modes of action. 11. In regard to " the motive power to be employed," we have before intimated, that we had extensive opportunities, during our visit in New York, Philadelphia, and other places, to witness* the operation of steam as a motive power, in what are called the dummy engines, upon street railways. We should not probably satisfy the desires or expectations of those most nearly concerned, unless we gave our views upon the subject more in detail than what would seem necessary, out of regard merely to the limited extent of the specific recommendations ultimately made by us, upon this particular question. (1.) We examined the operation of one of these engines in New York, and one in Philadelphia, and one in Hoboken, New Jersey, and rode after each of them for considerable distances, and we received a good deal of testimony upon the subject from reliable sources. This kind of motive power is now in operation in the immediate vicinity of Boston, and we need not describe the mode of its operation in detail. It is unquestionably a some- what more economical means of locomotion than that of horse- power, and we make no question that it will ultimately come into very extensive use in various ways. The thing is, at present, somewhat in its infancy, although invented some years since by Mr. Long, the patentee, who is an ingenious, learned, and experi- enced machinist, having maintained with universal acceptance a high position in the engineer corps attached to the navy, and who vol. i. 42 *249 658 STREET RAILWAYS. has expended much time and labor in bringing the machine now in nse to the greatest attainable perfection. But it would not be wonderful if still greater advance should be made in that direc- tion, and perhaps, ultimately, of such a character as greatly to affect the extent of the use of the present heavy locomotive en- gines upon steam railways. (2.) It has seemed to us most unquestionable, that these dummy engines would very soon be brought into general use upon the street railways in rural and surburban districts. They seemed, upon repeated experiments in stopping and starting, to be even more completely under the easy control of the engineer than an ordinary two-horse team is under that of the driver. There would be no difficulty in this respect, in running these engines in any portion of the most crowded thoroughfares of the cities. But we apprehend there will be other embarrass- ments in their use, in such places, which will prevent it for a considerable time to come. There is something, apparently, in the noiseless mode of the approach of these engines, which has thus far rendered them frightful to horses, — almost or quite as much so as the common locomotive steam-engine. And from the same cause we should apprehend they would be likely to produce accidents. Persons would, we fear, be constantly liable to injury before being made aware of their approach in the streets, when very much crowded. From these considerations and some others, perhaps, we should be apprehensive it might be a considerable time before these en- gines would become of common use in the crowded streets in our cities. But these views and opinions are merely conjectural, and may not be justified by future experience. (3.) They occupy but small space, and possess great power in ascending steep grades to the extent of three or four hundred feet in the mile. They will readily propel upon favorable grades, such as are required upon the steam roads, two or more passenger cars with from seventy-five to one hundred and fifty or more pas- sengers, at the rate of from twelve to twenty miles an hour. We have intended to make all our statements in regard to the use and power of these engines with caution, so as to be sure and not exceed the facts. (4.) From all we saw and heard we came to the conclusion COMMUTATION TICKETS, 659 that the public mind was already prepared to afford these dummy engines a fair opportunity to prove their claims to public confi- dence. And it seems to us not improbable that, at no very re- mote day, these engines will be the most economical motive power in all the short and light passenger traffic upon steam railways, and will come into general use on street railways, unless it be in crowded thoroughfares. 12. In regard to " the systems of commutation tickets to be adopted," there was a good deal said and testified before us, and much conflict of opinion ; and no mode has occurred to us where- by we could hope to reconcile these conflicting opinions. It is probable a good deal of this contrariety of opinion results from the fact that this matter of commutation tickets, or checks given upon one road to enable passengers to pass over the line of an- other company, will affect the different companies very differently. And no doubt much of it is attributable to the novelty of the experiment and the little opportunity which has thus far been given for settling the basis of a system upon the subject. The project which was enacted at the last session of your honorable body upon this subject, was a good deal complained of as being imperfect, unequal in some respects, and, above all, too compli- cated ; and, as was urged by some, not clearly and readily under- stood by the conductors and subordinate employees of the different companies, thereby creating a good deal of uncertainty and per- plexity to the companies and frequent disappointments and severe complaints from passengers. There probably is some foundation for these complaints. But we were satisfied there had not been a very earnest effort to make the thing work in the best possible manner, especially among those who were not expecting to be specially benefited by the system. We believe the present sys- tem might be made to operate well enough, and without any very considerable embarrassment to companies beyond what is always, more or less, incident to all changes in the mode of collecting fares, and especially changes rendering the system more complex. We think it specially desirable to keep the mode of collecting fares upon street passenger conveyances as simple as possible. We are not by any means confident that the system would not be improved, both for the companies and the public, by a perfectly uniform fare, payable always in the same mode and with no com- GGO STREET RAILWAYS. mutation whatever, thus abolishing the use of tickets sold below the prices of single fares. This is believed to be the wisest sys- tem for street railways by many experienced persons. But it is one of those matters of detail which can best be regulated by the companies themselves, their own interest and that of the public being nearly identical, although operating in different directions, — the one desiring to reducg single fares, and the other to in- crease the general aggregate of traffic in such a manner as to increase the net profits. It does not seem to vis there is much demand for any system of commutation or exchange tickets upon street railways. The true theory is, in our judgment, to allow the lowest living com- pensation for a given distance, and then require the passengers to assume the loss resulting from special accommodation within the range of the route. This special accommodation is most fre- quently demanded, by way of subdivision of the trip. It would no doubt afford great accommodation to passengers if they could be allowed to subdivide the trip indefinitely. In a single trip within the limits of the city of Boston, without passing over the same track more than once, it might, no doubt, be convenient for some passengers to ride in ten different cars, in some extreme cases, and, in numerous cases, in three or four different cars. It is evident, therefore, that no system could be lived under which should allow the passenger to change cars at will, with no increase of fare. If there is to be, as it is evident there must be, some additional fare paid for each change of cars, there will always be some uncertainty in regard to the precise amount which should be required in order to compensate the expense. It will be very difficult to fix upon any general rule which shall be sure to afford full compensation short of requiring an additional fare for each change. And we think, as the change of cars is solely for the accommodation of the passengers, there should always be com- pensation for it, and that all doubts should be resolved against the party for whose benefit they are caused. It seems to us, therefore, both on the score of justice and simplicity, that if we were to take the matter entirely new we should leave it upon the basis of requiring an additional fare for every additional passage, unless and until the companies found it for their advantage, in order to give the public accommodation demanded in the most COMMUTATION TICKETS. GG1 acceptable manner, to devise some scheme of compromise in re- gard to checks for different lines, believing that it would be sure ultimately to be done in the best manner in that way. But since a statute has been enacted upon this subject with the apparent concurrence of those interested, we have felt reluctant to recom- mend its entire repeal until it has been fairly and fully tried, and we do not consider this has yet been done. If we were to recom- mend any modification of the existing provisions upon the sub- ject, we should desire to substitute for them a general provision, that any passenger desiring to pass from any one point in any city or town to any other point in the same city or town, where the passage could not be effected in a single car, but might, by means of different cars, whether of the same or different companies, such persons should be allowed, by paying the highest fare re- quired for a passage in any portion of such town or city, and one cent in addition for each check, to receive checks entitling him or her to the immediate completion of such continuous passage in any car running within the limits .of such town or city, with the provision that, if such passenger should attempt to use such checks for any other purpose or at any other time, he or she should be liable to the same penalties as in other cases of evasion of lawful fare. This will be an accommodation beyond the actual compensation, but as the matter is hereby simplified very much, and as it could not be attended with serious loss to the company, and might increase the traffic to some extent, by affording greater accommodation, we should prefer this form of commutation to any other which has occurred to us, if we were to recommend any change. This mode is not liable to the same abuse as that now in force. We have inserted a section in the bill to this effect. 662 NOTES. Note IV. to § 124, ante, p. 447. A provision in the charter of a R. R. corporation that proprie- tors of certain wharves and lands should have the right to con- struct upon such wharves and lands railroads connecting with the main road, and of entering upon that road with their cars and vehicles, " and that the owners and conductors of said cars and vehicles shall be liable to pay the same and no other rates of toll, and be subject to the same rules, regulations, and provisions as the owners and conductors of other cars and vehicles travel- ling upon said main road," does not, since the passage of the Stat, of 1845, c. 191, regulating and limiting the rights of con- necting roads to use a railroad, give the proprietors of those wharves and lands the right to have goods transported in the cars of the corporation owning the railroad at the same rates and no higher than those charged to others for the same and similar kinds of goods. A railroad corporation is not obliged as a common carrier to transport goods and merchandise for all persons at the same rates. In an action to recover for transporting merchandise over a railroad, in the absence of a special contract, evidence is admissi- ble that the plaintiffs raised their charges without giving notice thereof to the defendant, and without his knowing that they were different from what he had been accustomed to pay. Fitch- burg Railroad Company v. Gage, 12 Gray, 393. NOTES. 663 Note V. to § 17, ante, p. 53. A promissory note payable to a person by name, adding treas- urer, &c, naming a railway corporation, must be regarded as payable to the person named and not to the corporation. 1 But such a note, given for a conditional subscription of stock, must be regarded as a waiver of the condition, and, if executed some time after the date of the subscription, cannot be construed as part of the contract of subscription. 2 A corporation, after having claimed and exercised corporate powers for a considerable time, will be estopped from denying its corporate existence. 3 It is said in some cases, that if the cor- poration contracts by a style which is usual in creating corpora- tions, and which discloses the names of no natural persons, that the corporate existence will be implied and need not be averred. 4 But in general such a proposition would not be regarded as maintainable in suits, either in favor or against a corporation ; it should be described as such in the declaration, with its central place of doing business. It has been held, that where defendants, sued as a corporation, rely upon the fact that the corporate existence has ceased before the institution of the suit, it must be pleaded in abatement and not in bar of the action. But in general the want of corporate existence and power may be shown at any time before judgment, upon proper notice and special plea. 5 A party who has sued a corporation and recovered judgment against them by a particu- lar name, is afterwards estopped from denying the corporate existence. 6 But this seems not altogether in accordance with the requirement that estoppels be mutual, unless the judgment 1 Chadsey v. McCreery, 27 111. R 253. 2 O'Donald v. E. Ind. & CI. Railw. Co., 14 Ind. R 259. 8 Callender v. Painesville & H! R R Co., 11 Ohio St. 516 ; The Atlantic & Ohio R R v. Sullivant, 5 Ohio St. 276. See also Ashtabula & New L. R R Co. v. Smith, 15 Ohio St. 328. 4 Stein v. Ind. &c., Association, 18 Ind. R 237. s Meikel v The German Savings Fund Society, &c., 16 Ind. R 181. 6 Pochelu v. Kemper, 14 Louis. Ann. 308. 664 NOTES. were between the same parties. Such an estoppel would there- fore only operate as between the plaintiff in the former suit and the corporation. The cases are very numerous where it has been held that a party who gives a written contract to a corporation by a particu- lar name is estopped to deny the existence and name of such corporation. 7 And in all cases of the plea of nul tiel corporation, proof of a corporation in fact will be sufficient. 7 7 Hubbard v. Chappel, 14 Ind. R. 601. END OF VOL. I. f* & LS Cambridge : Printed by Welch, Bigelow, & Co. UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 838 219 4