1851. THE EAST ANGLIAN v. THE EASTERN thorises the Company to raise money (sect. 3), which "shall (a) 3 B. & Ald. 1. (b) Ante, Vol. 4, p. 513; 10 Beav. 1. (c) Ante, Vol. 6, p. 289; 12 Beav. 352. (d) Ante, Vol. 6, p. 152; 2Mac. & G. 389. (e) Ante, p. 48. 1851. THE EAST ANGLIAN difference in this case.] He cited on this point The Great Northern Railway Company v. The Eastern Counties Railway Company (a), Munt v. The Shrewsbury and Chester Railway Company (b), Rex v. Kilderby (c). If the agreement is void the plaintiffs cannot recover at all, even for RAILWAY CO. the costs of soliciting bills. v. THE EASTERN COUNTIES Bramwell, in reply, cited The Queen v. The Great North of England Railway Company (d), Nicholls v. Stretton (e). Cur. adv. vult. JERVIS, C. J., now delivered the judgment of the Court. -The question for the opinion of the Court is, whether, upon this record, the plaintiffs can maintain their action; and we are of opinion that they cannot, and that the defendants are entitled to our judgment. The defendants are incorporated by the statute 6 & 7 Will. 4, c. cvi., the first section of which enacts, that certain persons shall be united into a Company for making and maintaining the Railway mentioned in that section, and other works by that Act authorised, and for other purposes in that Act declar ed, and for that purpose shall be one body corporate, by the name and style of "The Eastern Counties Railway Company," and have perpetual succession and a common seal. The third section empowers the Company to raise a sum of money for making and maintaining the said Railway and other works authorised by the Act; and the fifth section directs the money so raised to be expended towards making and maintaining the said Railway and other works, and in otherwise carrying the Act into execution. The money to be raised on mortgage is to be applied in the same way (section 246); and the profits of the Company, after defraying the expenses of making, maintaining, and working the said Railway, are to be accounted for and divided amongst the proprietors of the undertaking (sections 170, 171). 1851. THE v. THE EASTERN This Act is a public Act, accessible to all and supposed to be known to all; and the plaintiffs must therefore be presumed to have dealt with the defendants with a full RAILWAY CO. knowledge of their respective rights, whatever those rights may be. It is clear that the defendants have a limited authority only, and are a corporation only for the purpose of making and maintaining the Railway sanctioned by the Act, and that their funds can only be applied for the purposes directed and provided for by the statute. Indeed, it is not contended that a Company so constituted can engage in new trades not contemplated by their Act; but it is said, that they may embark in other undertakings, however various, provided the object of the directors be to increase the profit of their own Railway. This, in truth, is the same proposition in another form; for if the Company cannot carry on a new trade because it is not contemplated by the Act, they cannot embark in other undertakings not sanctioned by their Act, merely because they hope the speculation may ultimately increase the profit of the shareholders. They cannot engage in a new trade, because they are a corporation only for the purpose of making and maintaining the Eastern Counties Railway. What additional power do they acquire, from the fact that the undertaking may in some way benefit their line? Whatever be their object or prospect of success, they are still but a corporation for the purpose only of making and maintaining the Eastern Counties Railway; and if they cannot embark in new trades because they have only a limited authority, for the same reason they can do nothing not authorised by their Act, and not within the scope of their authority. Every proprietor, when he takes shares, has a right to expect that the conditions upon which the Act was obtained will be performed; and it is no sufficient answer to a shareholder expecting his dividend, that the money has 1851. THE RAILWAY Co. v. been expended upon an undertaking which at some remote period may be highly beneficial to the line. The public EAST ANGLIAN also has an interest in the proper administration of the powers conferred by the Act. The comfort and safety of the line may be seriously impaired if the money supposed to be necessary and destined by Parliament for the maintenance of the Railway be expended in other undertakings not contemplated when the Act was obtained, and not expressly sanctioned by the legislature. THE EASTERN The cases in equity which have been cited proceeded upon this view of the subject, and were decided, not because the particular act restrained by injunction was a breach of trust, but because it was not within the scope of the directors' authority, was not justified by the statute, and was therefore illegal. In Colman v. The Eastern Counties Railway Company (a), the Master of the Rolls says, "It has been very properly admitted that Railway Companies have no right to enter into new trades or businesses not pointed out by their Acts; but it has been contended, that they have a right to pledge, without limit, the funds of the Company in the encouragement of other transactions, however various and extensive, provided the object of that liability is to increase the traffic upon the Railway, and thereby to increase the profit to the shareholders. There is, however, no authority for any thing of that kind." So, in Salomons v. Laing (b), he says, "A Railway Company, incorporated by Act of Parliament, is bound to apply all the monies and property of the Company for the purposes directed and provided for by the Act, and for no other purpose whatsoever." The same principle was adopted by the Lord Chancellor in the case of Bagshawe v. The Eastern Union Railway Company (c), by Lord Cranworth in the case of Beman v. Rufford (d), and, as we are told, by Vice (a) Ante, Vol. 4, p. 513; 10 Beav. 1. (b) Ante, Vol. 6, p. 289; 12 Beav. 352. (c) Ante. Vol. 6, p. 152; 2Mac. & G. 389. (d) Ante, p. 48. 1851. THE V. THE EASTERN Chancellor Turner in the case of The Great Northern Railway Company v. The Eastern Counties Railway Company(a). In the last two cases, the learned Judges treated ques- RAILWAY CO. tions similar to the present as purely legal questions, and therefore directed cases to be stated for the opinion of a Court of law; but, at the same time, expressed their opinion RAILWAY CO. that the contracts were illegal, and therefore void. If the contract is illegal, as being contrary to the Act of Parliament, it is unnecessary to consider the effect of dissenting shareholders; for, if the Company is a corporation only for a limited purpose, and a contract like that under discussion is not within their authority, the assent of all the shareholders to such a contract, though it may make them all personally liable to perform such contract, would not bind them in their corporate capacity, or render liable their corporate funds. But it is said, that it does not sufficiently appear upon this record that the bills in Parliament, and for which the defendants covenanted to pay the costs, were not connected with the defendants' Railway. If Railway Companies could embark in undertakings collateral to their main line, merely because the main line might in the result be benefited, there would be much in this objection; but, upon the view which we have above expressed, the objection cannot prevail. We know that each of the four litigant Companies has a separate Act of Parliament; we know that the statute incorporating the defendants' Company gives no authority respecting the bills promoted 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. For these reasons we are of opinion that there ought to be judgment for the defendants. Judgment for the defendants. (a) 21 L. J., Ch., 837. |