the case of The Stratford and Moreton Railway Company v. Stratton (p), a company were empowered to carry on certain works, and the committee were authorised to make calls for money upon the proprietors, not exceeding 101. per share, from time to time, as they should find necessary, so that no calls should be made at the interval of less than two months from each other. None of the powers of the act were to be put in force till 33,500l. were subscribed. The committee began the works before that sum was subscribed, and made a single order, calling on the proprietors for several payments of 107. each, to be made at intervals of two months. A subsequent act recited, that the capital, 33,500, had not been subscribed, but that the company had proceeded in the works, incurred debts, &c., and that a certain sum was due from defaulters in the payment of calls; it provided for carrying on the works and for making further calls, and it enacted, that the powers, &c. of the former act (except where expressly altered) should remain vested in the company, though the 33,500l. had not been subscribed. Upon these facts, Lord Tenterden, C. J., said, "I think these calls were not regular according to the statute. By the act the calls are to be made at intervals, and the committee are to judge, from time to time, of the necessity of making them. Here several are made at once, to an amount which may, probably, not become necessary in the time over which they extend; and if so, the residue must be lodged at a bankers', or placed elsewhere, at the peril of the proprietors. I think it was not the intention of the act that they should be exposed to this hazard. But it is contended that the subsequent statute recognises these calls as valid. That statute takes notice, in the recital, that the whole sum of 33,500l., mentioned in the former act, has not been raised;

(p) 2 B. & Ad. 518.

and, at the same time, that a part of the works has been completed. So far it clearly ratifies what has been done. But it does not appear that the Legislature was informed in what manner the calls were made. They would suppose that what was done had been done rightly. It is a strained construction to infer, from such expressions as appear in the recital of this statute, that the Legislature sanctioned what it does not appear they even knew. The argument on the ground of estoppel might have applied if any person had been led astray by the conduct of the defendant (q), but he is, in fact, one of a committee who have made certain calls not warranted by law, and in part paid them. Whoever has paid those calls might have known that he was not obliged to do so: his paying them was his own fault; and no person has a right to allege that he was misled by the act of the defendant." So, in another case (r), where the special act provided that the whole of the capital should be subscribed before the powers and provisions of the act should be put in force, and the company made a call on the shares before the subscriptions were completed, and commenced an action to recover the call so made after the whole capital was subscribed, it was decided that the completion of the subscription list was necessary to enable the company to make the call, and that the action was not maintain

able(s).

6. With respect to the forfeiture of shares, the stat. 8 Vict. c. 16, enacts, that, if any shareholder fail to pay any call payable by him, the directors may, if the call is not paid within two months after it becomes due, declare

(9) See Cromford Railway Co. v. Lacey, 3 Y. & Jer. 86.

(r) The Norwich and Lowestoffe Navigation Company v. Theobald,

1 M. & M. 151.

(8) For forms of pleadings, see Appendix.

the share forfeited; and that whether the company have sued for the call or not(s). (Id., s. 29, post, App., 91). But before a share can be declared to be forfeited, the directors must give twenty-one days' notice to the shareholder; such notice to be sent as is prescribed in the act (t). (Id., s. 30, post, App., 91). Nor does the declaration of forfeiture take effect until it has been confirmed at a general meeting of the company; and such general meeting may direct the forfeited share to be sold, or otherwise disposed of (u). (Id., s. 31, post, App., 91). Forfeited shares may be sold by public auction or private contract. (Id., s. 32, post, App., 92). A good title to the purchaser of a forfeited share may be made in the manner prescribed in the act. (Id., s. 33, post, App., 92). The company may not sell more shares belonging to a defaulter than are sufficient to pay the calls due, and interest and expenses; and the overplus, if any, must be paid to the defaulter. (Id., s. 34, post, App., 92). And if the calls, interest, and expenses are paid by the defaulter before

(8) Certain directors of a company subscribed the parliamentary contract for a large number of shares, for the purpose of complying with the standing orders in Parliament, and signed a memorandum that they held them in trust for the company, but never registered themselves as shareholders after the bill passed, or paid any deposit on the shares; and the directors having afterwards taken proceedings to declare a bonâ fide shareholder's shares forfeited, for non-payment of a third call on the shares held by him, the shareholder filed his bill for relief, and prayed that the directors might be restrained from declaring his shares to be forfeited. The Vice-Chancellor held, that, upon the face of the bill, there was a plain equity for the plaintiff to be relieved, and that the directors

could not partially call upon some shareholders to pay calls, and not call upon others. Preston v. The Grand Collier Dock Company, 2 Railway Cases, 335; 11 Sim. 327.

(t) When equity will not relieve a shareholder whose shares have been forfeited for non-payment of calls, although the omission to pay the calls arose from accidental circumstances, see Sparks v. Liverpool Waterworks Company, 13 Ves. 428; and see Burdett v. Rawson, 9 Jur. 341.

(u) If it is necessary to plead that shares have been forfeited, the plea will be bad, unless it avers that the forfeiture was confirmed at a general meeting of the company. The Edinburgh, Leith, and Newhaven Railway Company v. Hebblewhite, 6 M. & W. 707.

the sale of the share, the share reverts to him. (Id., s. 35, post, App., 92).

be

row money.

7. The company may, subject to the restrictions in the 7. Powers to borspecial act, and by order of a general meeting, borrow money on mortgage or bond, and may mortgage the undertaking and the future calls on the shareholders. (Id., s. 38, post, App., 93). If any mortgage or bond be paid off, it may re-borrowed. (Id., s. 39, post, App., 93). If, by the special act, money cannot be borrowed until a definite portion of capital is subscribed, or if the authority of a general meeting is necessary, the certificate of a justice is sufficient evidence of the first, and a signed copy of the order of a general meeting is sufficient evidence of the second fact. (Id., s. 40, post, App., 93). Mortgages and bonds must be by deed. duly stamped, and forms are given in the act (x). (Id., s. 41, post, App., 93). Mortgagees or obligees are not preferred by reason of the priority of their mortgages or bonds, or of the meeting at which they were authorised. (Id., ss. 42, 44, post, App., 93, 94). Although future calls on shares are mortgaged, the company may, nevertheless, receive and apply such calls. (Id., s. 43, post, App., 93). A register of mortgages and bonds must be kept by the secretary; and all shareholders, mortgagees, and bond creditors may, at all reasonable times, peruse the same. (Id., s. 45, post, App., 94). Mortgages and bond debts may be transferred by deed, and a form is given in the act; (Id., s. 46, post, App., 94); and the transfer must be registered with the secretary, otherwise the company are not responsible to the transferee. (Id., 8. 47, post, App., 94). The interest on mortgages and bonds must be paid in preference to any dividends payable to the shareholders; (Id., s. 48, post, App., 94); and no interest is transferable except by deed. (Id., s. 49, post, App., 94).

(x) See the forms, post, App., 115, 116.

The company may fix a time in the mortgage or bond for the re-payment of the money, and at the period so fixed it becomes payable. (Id., s. 50, post, App., 94). If no time be fixed, either party may give the other six months' notice, provided twelve months have elapsed from the date of the instrument. The mode of giving notice is prescribed in the act. (Id., s. 51, post, App., 94). After the expiration of six months' notice, given by the company, all further interest ceases to be payable. (Id., s. 52, post, App., 95). If, by the special act, the mortgagees are empowered to enforce payment by the appointment of a receiver, then, if interest be unpaid for thirty days, or the principal for six months, the mortgagee, without prejudice to his right to sue at law or equity, may require that a receiver be appointed. (Id., s. 53, post, App., 95). . An application for a receiver must be made to two justices, who, by order, may appoint some person to receive the whole or a competent part of the tolls or sums liable to the payment, until the principal or interest due has been recovered. (Id., s. 54, post, App., 95). The books of account of the company are at all times open to mortgagees and bond creditors. (Id., s. 55, post, App., 96).

It is important to consider the effect of the statute 8 Vict. c. 16, with reference to the recovery of money lent to railway companies on mortgage or bond. If the special act authorises the appointment of a receiver, then, under the provisions of the 54th section, a speedy remedy is given to mortgagees, enabling them to recover the principal and interest due on the mortgage; but this remedy can in no case be extended to bond creditors. In the absence of this power to appoint a receiver (y), it becomes necessary to ascertain what other remedies may be resorted to. And,

(y) This power to appoint a receiver was given by only twenty-two, out of sixty-eight railway acts passed

8 & 9 Vict. See Biggs's Collection of Special Railway Acts.