Agreements between Railway Companies.

397

Contracts made under this section should be carefully framed so 8 & 9 VICT. C. 20.

as to prevent the application of the principle laid down in several Working ar of the cases cited below, that terms which may be construed into rangements must a delegation of the powers conferred by Parliament upon a rail- not amount to way company, vitiate any working arrangement containing such delegation of

terms.

powers.

It has been held that although a railway company are not bound Company bound to be carriers, (see note to preceding section, and the Railway and to work the railway. Canal Traffic Act, 1854, cited supra,) they are bound to work the railway (Winch v. Birkenhead Railway Co., 5 De G. & Sm. 562; 7 R. C. 384.)

And an agreement by which a railway company are to work the Agreement to line of another company, is not an agreement within s. 87: (Simpson v. Denison, 10 Hare, 51; 7 R. C. 403.)

work line of another.

line for a term

An agreement that a railway company should work another rail- Agreement to way for ninety-nine years, using the plant and rolling-stock of the work another latter, was held to amount to a delegation of powers within the of years. principle mentioned above, and therefore illegal upon the construction of s. 87, which gives a limited power to a company to run a portion of its traffic, where necessary, for the purposes of such traffic, over another line, but does not authorise an agreement, which in effect was not distinguishable from an agreement for a lease, to enter into which the sanction of Parliament was necessary: (Winch v. Birkenhead Railway Co., 5 De G. & Sm. 562; 7 R. C. 384.) As to the power of the company or its directors to apply the funds of the company to obtain acts of Parliament, see the notes to ss. 65 and 90 of the Companies Clauses Act, 1845, ante.

In like manner a contract entered into by a railway company with two other companies, who were to work the whole undertaking for twenty-one years, the first-mentioned company to find the stock and plant, was held to be a delegation of powers and invalid : (Beman v. Rufford, 1 Sim. N. S. 550; 7 R. C. 48.)

interfere to assist

The Court of Chancery will not interfere in cases where an agree- Court will not ment operates as a delegation of powers without any sanction by operation of inParliament, where its interference would assist the objects of the valid agreement. parties to such an agreement: (Great Northern Railway Co. v. Eastern Counties Railway Co., 9 Hare, 306; 7 R. C. 643; 21 L. J. (Ch.) 837.)

There are several cases, however, in which the most various and conflicting decisions have been given upon the question of the validity of particular working agreements, by the several judges before whom they were argued.

case.

Absence of mutuality.

Thus, where the effect of an agreement was, as stated by V.-C. Shrewsbury and Wood in a subsequent case, (see Hare v. London and North-Western Birmingham Railway Co., infra,) to constitute a complete partnership in every Agreement consense, because the whole profits over the specified line were to be stituting a partdivided in fixed proportions, there being also an absence of mutuality nership. in point of duration of the agreement as it affected two of the companies, and the agreement being in fact a contrivance to evade the Contrivance to consequences of a failure to obtain certain leasing powers, it was evade necessity nevertheless held by Lord Cottenham and the Court of Queen's for act of ParliaBench, out of seven equity and seven common law judges who heard the case, that the agreement was not invalid: (Shrewsbury and

ment.

8 & 9 VIOT. C. 20. Birmingham Railway Co. v. London and North-Western Railway Co., 3 MN. & G. 70; 4 De G. M. & G. 115; 7 R. C. 531; 20 L. J. (Ch.) 90: 17 Q. B. 652; 6 H. L. 113.)

Hare v. London and North-West

And, upon the authority of the Shrewsbury and Birmingham ern Railway Co. Case, V.-C. Wood, considering that upon the whole the authorities who expressed opinions in that case treated the agreement upon which the question turned as not illegal, held that certain companies, owning distinct groups of lines, were justified in coming to a bona fide arrangement by which, having calculated the probable amount of traffic which would in the ordinary way flow over the one or the other route, they agreed for a certain period of years to take this calculated proportion as the basis of their arrangement: (Hare v. London and North-Western Railway Co., 2 J. & H. 80; 30 L. J. (Ch.) 817.)

Agreement as to

proposed line

illegal.

But in a later case which arose upon the same agreement as that future traffic of in Hare v. London and North Western Railway Co., it was held by Sir R. T. Kindersley, V.-C., that it was ultra vires of directors to enter into a contract fixing and regulating the future traffic which might be carried upon a line of railway which the company might thereafter be empowered to construct, and the profits of such traffic, so as to give to another railway company an interest in such traffic and profits: (Midland Railway Co. v. London and North-Western Railway Co., L. R. 2 Eq. 524.)

Tolls.

The following agreement entered into between two railway companies was held, in an action upon the deed for tolls for the use of plaintiffs' line, legally valid under this section, and not objectionable as being ultra vires; that the defendants' company might for twenty-one years, from the 13th July 1851, pass over the railways of the plaintiffs, and have free use of their works and conveniences, with engines and waggons for the purpose of carrying coal; that such passage should be had and made on payment of the tolls, and under the following restrictions and conditions, viz., when the quantity of coal carried over any part of the plaintiffs' railways to the defendants' railway, and thence to certain specified places, should not amount to 125,000 tons in the space of six calendar months, commencing 1st July or 1st January, and ending 31st December or 30th June, during the said term of twenty-one years, then the defendants would pay to the plaintiffs such toll for such passage for such period of six calendar months as would, with any clear profit which might be made by the plaintiffs before the same period, after payment of all annual and half-yearly charges for interest and outgoings, and all expenses of management or otherwise, be sufficient to enable the plaintiff's to pay such dividends as might become payable in respect of any guaranteed or preference stock of the plaintiffs' already issued or hereafter to be issued with the consent of the defendants, and also a clear net dividend at the rate of £3 per cent. per annum, for such period of six calendar months, upon the ordinary capital stock for the time being of the plaintiffs; and when the quantity of coal for any such period of six calendar months should exceed 125,000 tons and not 150,000 tons, such sum as would make up in manner before mentioned the demand upon the preference stock, and £3, 5s. per cent. upon the ordinary stock; and when the quantity of coal during the like period of six

Contracts between Companies-Tolls.

399

calendar months should exceed 150,000 tons and not 175,000 tons, 8 & 9 VICT. C. 20. such sum as would make up in like manner the dividend upon the preference stock and £3, 10s. per cent. upon the ordinary stock, and so on progressively up to the carriage of upwards of 400,000 tons during any such period of six calendar months, in which case the defendants were to pay the plaintiffs such sum as, together with the clear profits made by the plaintiffs during the same period, would pay the dividends upon the preference stock and £6 per cent. upon the ordinary stock. The deed then went on to provide with respect to the calculations of the number of tons, &c., and that if the payment made by the defendants for any period of six months once made up £4, 10s. per cent. upon the ordinary stock of the plaintiffs, it should never otherwise recede: (Great Northern Railway Co. v. South Yorkshire and River Dun Co., 9 Exch. 55, 642; 7 R. C. 744, 771.)

"

(b) The meaning of the word "toll" in this section seems to be Meaning of a payment of money, the consideration of which is the passage of "tolls." passengers, carriages, or goods on the railway, though the payment be not limited to any single sum for each passenger, &c., and although there be variations in the rate of payment: (See the judgment of the Exchequer Chamber in Great Northern Railway Co. v. South Yorkshire and River Dun Railway Co., ubi supra.) And the Court of Chancery refused to restrain the payment of a dividend by the plaintiffs until the sums due upon the agreement were provided for: (Ibid., 3 De G. M. & G. 576. And see East Anglian Railway Co. v. Eastern Counties Railway Co., 21 L. J. (C. P.) 23; M'Gregor v. Deal and Dover Railway Co., 22 L. J. (Q. B.) 69.)

It has been further held with respect to the meaning of the word "tolls" that a payment, under an agreement, of such an amount as would, after answering all expenses and liabilities, furnish a dividend of four per cent. is not a payment of "tolls" within this section : (Simpson v. Denison, 10 Hare, 51; 7 R. C. 403.)

a reason for set

It was observed by Vice-Chancellor Wood in Hare v. London and Prevention of North-Western Railway Co., that an allegation that injury would be competition not caused to the public by the prevention of competition, in conse- ting aside traffic quence of working agreements between several companies, is not agreement. sufficient to invalidate such agreements, (2 J. & H. 103 ;) and that an intention to prevent such competition as would be ruinous to the companies, and not tending to the benefit of the public, is a good ground for holding such agreements to be valid (See also Midland Railway Co. v. London and North-Western Railway Co., L. R. 2 Eq. 524.)

دو

A contract entered into between two directors of each of two Duration of railway companies, and signed by them, for the mutual right of agreements. running their engines, &c., on the two lines respectively, but without granting such right to the " successors of either company, was held to be a permanent right, and not a mere licence: (Great Northern Railway Co. v. Manchester, Sheffield, &c., Railway Co., 5 De G. & Sm. 138.)

One of the terms of a traffic agreement being that the plaintiffs Acquiescence. should complete a proposed line, four years' acquiescence in the non-completion of it was held to disentitle the defendants from

8 & 9 VICT. c. 20. obstructing the plaintiffs in using their line: (Great Northern Railway Co. v. Lancashire and Yorkshire Railway Co., 1 Sm. & G. 81.)

Amalgamation.

Effect of s. 92 on

ments.

See as to amalgamation, Part V. of the Railways Clauses Act, 1863, post.

As to the effect of an agreement for amalgamation upon a traffic arrangement previously entered into, see London, Chatham, and Dover Railway Co. v. South-Eastern Railway Co., 2 W. N. 249.

The 92d section of this act, which declares that railways are to working agree- be free as public highways upon payment of tolls, is not to be construed so as to give validity to traffic agreements whereby a delegation of powers is effected; for agreements are to be construed upon their provisions, and cannot have a wider effect by virtue of the provisions of the act: (Great Northern Railway Co. v. Eastern Counties Railway Co., 9 Hare, 306; 21 L. J. (Ch.) 837.)

Variations imported into agreement.

Joint use of stations.

Reference to arbitration.

Reference to

termine trans

And an agreement, in itself valid, is not to be construed, by importing variations into its terms, so as to restrict one of the parties to it further than its express terms allow: (Greathed v. London and South-Western, &c., Railway Co., 4 R. C. 213.)

Where an agreement for working the through traffic had been entered into between two companies, and one of them afterwards, treating such agreement as invalid, entered into another and independent agreement, inconsistent with the original agreement, with a third company, it was held that there was a bona fide question as to the validity of the first agreement, and that the Court, having regard to the balance of inconvenience and benefit, would not interfere at the instance of the company who treated it as illegal : (Shrewsbury and Chester v. Shrewsbury and Birmingham Railway Co., i Sim. N. S. 410.)

Where two railway companies agree to use a station jointly, it seems that it would be in the power of the Court of Chancery to prescribe rules for the use of the station, and to direct a partition and the appointment of a receiver, unless there be a provision for reference to arbitration, in which case the Court will not interfere until such reference has been made: (Shrewsbury, &c., Railway Co. v. Chester, &c., Railway Co., 14 L. T. 217, 433.)

As to the power of arbitators to regulate the transmission of arbitration to de- traffic, where the special act prescribes a reference to arbitration to mission of traffic. determine disputes, see Eastern Union Railway Co. v. Eastern Counties Railway Co., 2 El. & Bl. 530.

Competition in use of station.

Contracts not to affect persons not parties thereto.

It does not appear to be unlawful for one of two companies to enter into competition with the other, by providing omnibuses to carry passengers from the station: (Shrewsbury, &c., Railway Co. v. Stour Valley Railway Co., 2 De G. M. & G. 866.) And see further as to the joint use of stations, Midland Railway Co. v. Ambergate Railway Co., 10 Hare, 359; and as to the terms which arbitrators may impose with regard to the joint use of stations, see Eastern Union Railway Co. v. Eastern Counties Railway Co., 2 El. & Bl. 530.

LXXXVIII. Provided always, That no such contract as aforesaid shall in any manner alter, affect, increase, or

Liability of Company as Carriers.

401

diminish any of the tolls which the respective companies, 8 & 9 VICT. C. 20. parties to such contracts, shall for the time being be respectively authorised and entitled to demand or receive from any person or any other company, but that all other persons and companies shall, notwithstanding any such contract, be entitled to the use and benefit of any of the said railways, upon the same terms and conditions, and on payment of the same tolls, as they would have been in case no such contract had been entered into.

be liable to a

greater extent

carriers.

LXXXIX. Nothing in this or the special act contained Company not to shall extend to charge or make liable the company further or in any other case than where, according to the laws of than common the realm, stage-coach proprietors and common carriers would be liable, nor shall extend in any degree to deprive the company of any protection or privilege which common carriers as stage-coach proprietors may be entitled to; but, on the contrary, the company shall at all times be entitled to the benefit of every such protection and privilege.

LIABILITY OF COMPANY AS CARRIERS OF PASSENGERS.

of company as

as carriers of

The liability of railway companies as carriers of passengers differs Distinction bematerially from their liability as carriers of goods. As carriers of tween liability goods-See post, p. 418, et seq]-they are insurers against all carriers of injuries, except such as result from the act of God or the king's passengers and enemies; but as carriers of passengers their obligation is only to goods. use all due care and diligence to ensure the safety of passengers, and they are responsible for those injuries only which result from Responsible only negligence on the part of themselves or their servants: (Story on caused by negli Bailments, p. 620; Aston v. Heaven, 2 Esp. 533; Christie v. Griggs, gence. 2 Camp. 79; Crofts v. Waterhouse, 3 Bing. 319.),

for injuries

from mere occur

It was at one time thought unnecessary, in order to make the com- Negligence not pany liable, to prove that the injury was caused by their negligence, now presumed as that would be presumed prima facie from the occurrence of the rence of injury. injury (Christie v. Griggs, ubi supra; Sharp v. Grey, 9 Bing, 457; Carpue v. London and Brighton Railway Co, 5 Q. B. 747;) and in some cases this is still so where res ipsa loquitur, as where the injury arises from a collision of different trains on the same line: (See per Pollock, C. B., Bird v. Great Northern Railway Co., 28 L. J. (Ex.) 3; cf. Byrne v. Boudle, 33 L. J. (Ex.) 13; and Scott v. London Dock Co., 13 W. R. 99.)

But, except in such a case as that last referred to, the contrary doctrine seems now to be well established: (Bird v. Great Northern Railway Co., ubi supra; Toomey v. London, Brighton, and South Coast Railway Co., 3 C. B. N. S. 146; 27 L. J. (C. P.) 39; Cornman v. Eastern Counties Railway Co., 4 H. & N. 781; 29 L. J. (Ex.) 94; Martin v. Great Northern Railway Co., 16 C. B. 179.)