pursuers, are barred from pleading want of title in the pursuers, or failure of the pursuers to make timeous rejection."

The defenders pleaded, inter alia—“(1) No title to sue. (2) The pursuers' statements are irrelevant, and insufficient to support the conclusions of the summons." Upon 7th June 1894 the Lord Ordinary (Low) allowed a proof.

66

"Opinion. The defenders maintain that their first plea-in-law of no title to sue should be sustained, and the action thrown out without any inquiry. They argued that the contract, for breach of which damages are sought, being made by Messrs Darley & Butler before the Tinnevelly Sugar Refining Company was incorporated, that company cannot sue upon the contract, even although it was made for behoof of the company when it should come into existence, and that the concurrence of Darley & Butler cannot aid the company, because that firm not having sustained the loss for which reparation is sought have no interest and could not themselves have sued the action.

"It seems to be clear that a company incorporated under the Companies Acts is not bound by a contract made for it or on its behalf before incorporation, unless after incorporation it has so acted as to make the contract its own. Further, it appears to be settled in England that a company after incorporation cannot ratify a contract entered into on its behalf before incorporation, because ratification (in the strict sense) refers to an act previously done for the person ratifying, and cannot apply to an act done before that person came into existence.

"The case chiefly relied upon by the defenders was the Northumberland Avenue Hotel Company, 33 Ch. Div. 16. In that case the plaintiff sued the liquidator of the hotel company for damages for breach of a contract entered into between him and one acting as trustee for the intended company before its incorporation. The plaintiff had a lease from the Board of Works of certain lands upon condition that he should erect certain buildings within a specified time. The contract with the trustee for the intended company was for a sub-lease of the lands at a higher rent than that which the plaintiff was under obligation to pay to the Board of Works, the company being bound to erect the buildings stipulated for in the plaintiff's lease. The articles of association of the company provided that the contract should be adopted and carried into effect. After being registered, the company entered into possession of the lands, spent large sums of money upon them, made payments to the plaintiff to account of rent, and passed certain resolutions, with the assent of the plaintiff, modifying the contract which had been made with him. The company went into liquidation, and the Board of Works cancelled the lease to the plaintiff, and resumed possession of the lands, apparently because the company had not erected the buildings stipulated for within the specified time.

The Court of Appeal held that the

plaintiff had no claim for damages (1) because the contract being made before the company was in existence was not binding upon it, and was incapable of ratification by the company after incorporation; and (2) because the acts of the company were not evidence of a fresh agreement having been entered into between it and the plaintiff, having been done under the erroneous belief that the contract was binding on the company.

"That judgment goes very far, because it was clear that the company had, as far as it possibly could, recognised and taken advantage of the contract. The ground of judgment was that to give the plaintiff a claim against the company it was necessary that the latter should have made a new contract with him upon the same terms as the original contract, and that the facts showed that they had not done so, but had proceeded upon the erroneous belief that the original contract was binding upon the company. The footing, therefore, on which the company took possession of the lands, and otherwise recognised the contract, was essential to the judgment. If it had been proved that the directors knew that the original agreement was not binding on the company, it may well be that the judgment would have been different, and that the Court would in that case have held that the actings of the company were evidence of an agreement between them and the plaintiff.

"The decision, therefore, apart from the peculiar circumstances of the case, does not appear to me to go further than to affirm that an action will not lie against a company if it is only rested upon a contract with the company itself. But I know of no authority for saying that such a contract must be a formal contract. I apprehend that it is sufficient if the actings of parties necessarily lead to the inference that they intended to be, and held themselves out as being binding on each other. If a company by its acts adopts a contract made before its incorporation, takes benefit by the contract, and allows the other contracting party to act upon the footing that the company is bound to him, in terms of the original agreement, I can see no principle upon which the company should not be bound, just as an individual is bound who homologates an informal or defective contract. And there are many authorities in the English law pointing in that direc tion, among which I refer to Touch v. The Metropolitan Railway Warehouse Company, 1871, L. R., 6 Ch. 671; Spiller v. Paris Skating Rink Company, 1878, 7 Ch. D. 368; and Howard v. Patent Ivory Manufacturing Company, 1888, 38 Ch. Ï. 156.

"In this case the averments are that the defenders were from the first told that the machinery which was ordered from them was for the company; that before the machinery was made the company was incorporated; that the machinery when finished was sent by the defenders to Tuticorin, where the company had constructed buildings for it on plans approved

Sugar Co.

17, 1894

by the defenders; that the machinery was fitted up by an engineer sent out by the defenders; that the manager who was to work the machinery for the company was selected by the defenders, and that the price was paid out of the capital of the company. According to these averments the defenders were brought directly into contact with the company as the principals in the transaction. If this had been an action by the defender for payment of the price upon such averments of adoption of the contract by the company, I think that there would have been a relevant case to go to proof; and in like manner when the action is by the company for damages on the ground that the machinery is not fit for the purpose for which it was supplied, I am of opinion that there must be inquiry, so that the precise facts may be ascertained. "I shall therefore allow a proof before answer."

The defenders reclaimed, and argued(1) If all the averments summarised by the Lord Ordinary at the end of his note were proved they would fail to give the pursuers a title to sue. (2) The pursuers' own statements were fatal to their case. That was, as again and again stated, that Darley & Butler were agents for them. But Darley & Butler could not act as agents for an admittedly non-existent principal. (3) The pursuers had failed to set forth anything instructing privity of contract between them and the defenders. The case resembled The Edinburgh United Breweries, Limited v. Molleson (Nicolson's Trustee), March 17, 1893, 20 R. 581, aff. March 9, 1894, L.R., 1894, App. Cas. 96. Here, as there, the concurrence of the original contracting party, not alleged to have suffered in any way, could not improve their position—cf. also Blumer & Company v. Scott & Sons, January 16, 1874, 1 R. 379; and Tully v. Ingram, November 10, 1891, 19 R. 65. (4) Relying on their mistaken position of being Darley & Butler's principal, they had taken no steps to enter into direct contractual relation with the defenders by adopting the contract which would have been necessary-Kelner v. Baxter, 1866, L.R., 2 C.P. 174; in re Express Engineering Company, 1880, L.R., 16 C.D. 125; in re Northumberland Avenue Hotel Company, 1886, L.R., 33, C.D. 16.

Argued for respondents-(1) The cases relied on by the defenders were not in point. The actings of the parties throughout showed that the pursuers had adopted the contract, and that the defenders had negotiated with them throughout as the real parties, on behalf of whom Darley & Butler had originally contracted. (2) Darley & Butler were to be regarded not as agents for a non-existent principal, but as trustees for the company before incorporation-cf. Davenport v. Bishopp, 1843, 2 Yonge & Collyer, 451; Gregory v. Williams, 1817, 3 Merivale, 582. (3) Darley & Butler could, without the defenders' consent, have assigned their contract, there being no delectus persona-British Waggon Co. v. Lea & Co., 1880, L.R., 5 Q.B.D. 149. Here

Darley & Butler were concurrent pursuers. At advising

was

LORD PRESIDENT - The contract for breach of which this action was brought was constituted by a tender and relative acceptance dated respectively 26th November 1889 and 11th July 1890. The contract for the supply of certain machinery and ironwork for a refinery. On the face of the documents the parties to the contract were the defenders on the one hand, and Messrs Darley & Butler of Billiter Square Buildings, London, on the other hand.

The pursuers of this action are the Tinnevelly Sugar Refining Company, Limited, with consent and concurrence of Messrs Darley & Butler, and the said Messrs Darley & Butler for all right and interest they may have in the premises. The fact that Messrs Darley & Butler thus appear, not merely as consenting to the instance of the company but as themselves pursuers, has no practical importance; for in this action of damages no averment is made that that firm has suffered damage. The action is therefore the action of the Tinnevelly Company, Limited.

Now, against this action the defenders' first plea is "No title to sue." As argued to us, this plea means not merely that the pursuers do not possess, but that they have not set forth, any title to sue. The Lord Ordinary has before answer allowed a proof; but the defenders have asked our judgment on the question whether any thing is averred or offered to be proved which would make out the pursuer's title.

The company was registered on 29th July 1890, and accordingly was not in existence at the date of the contract. It is therefore legally impossible that the contract can bind the company, unless the company since its registration has in some way acquired the rights or submitted itself to the obligations of the contract. Accordingly, the defenders are in the right when they say that the question is, do the pursuers set forth on this record anything done by the company itself which has this result? I have carefully examined the condescendence and must answer this question in the negative.

The contract, be it observed, was for certain machinery and ironwork which was to be delivered free alongside vessel in Glasgow Harbour. Now, the pursuers endeavour to bring the company and the defenders into direct relations by saying that the machinery was erected at Tuticorin, which is in India, under the superintendence of an engineer sent out by the defenders. But it was admitted in argument (and is indeed manifest) that the erection of the machinery in India was outside the contract which is now sued on. It is unnecessary to criticise in detail the other averments compendiously stated by the Lord Ordinary, for not one of them nor all taken together tend to show that after the registration of the company any contract relation was constituted between it and the defenders.

The absence of such averments is, in truth, accounted for by the fact that the theory of the pursuers' case is entirely different. They begin by saying that when Darley & Butler contracted with the defenders they were acting, and were known by the defenders to be acting, as agents for the Tinnevelly Company. This is the basis of the pursuers' case. It is in law an untenable position, for Darley & Butler could not be the agents of a nonexistent company. I should infer from the record that the persons acting for the company had not realised this. Accordingly it is quite consistent with the record to suppose that the persons acting for the company were unaware that if the company was to take the place of Darley & Butler, it required-that is to say the shareholders or their executive required-consciously to do so. In place of any such overt action on the part of the company things were allowed to rest on the original contract between Darley & Butler and the defenders, which was erroneously believed to bind the company. I do not pronounce this to bave been the true state of the facts, having no occasion to do so; all I say is that the pursuers' record says nothing to the contrary and much to this effect.

Well, now, the law applicable to such a case seems to be tolerably clear. First of all, where there is no principal, there can be no agent; there having been no Tinnevelly Company at the date of this contract, Darley & Butler were not agents of that company in entering into the contract. The next point is, that in order to bind the company to a contract not incumbent on it, it is necessary that the company should voluntarily so contract; and it is not equivalent to this if the company merely acts as if, contrary to the fact, the contract had from the beginning been obligatory on it.

I have considered, up to this point, solely the position of the company, and have not taken into account the question how far the consent of the defenders would have been necessary to the substitution of the company for Darley & Butler as parties to the contract, I do not find it necessary to enter upon this question, inasmuch as, in my opinion the case of the pursuers is irrelevant, even if regard be had to the consent of the company alone.

I am for finding that the pursuers have not set forth on record any title in the Tinnevelly Sugar Refining Company, Limited, to sue, that there are no relevant averments to support the conclusions in so far as insisted in by Darley & Butler, and dismissing the action.

LORD ADAM, LORD M'LAREN, and LORD KINNEAR concurred.

The Court recalled the Lord Ordinary's interlocutor and dismissed the action.

Counsel for Pursuers and RespondentsJameson-Cooper. Agents-Millar, Rob

son, & M'Lean, W.S.

Tuesday, July 17.

FIRST

LANARKSHIRE

DIVISION.

[Lord Low, Ordinary. AND DUMBARTON

SHIRE RAILWAY COMPANY AND
ANOTHER v. MAIN.

Railway - Accommodation Works - Conflicting Interests of Owner and Occupier of Lands Taken-All Parties not Heard -Reduction of Sheriff's Award-Railway Clauses Act 1845 (8 and 9 Vict, cap. 33), secs. 60, 61-Relevancy,

The Railway Clauses Act 1845, by sec. 60, provides that the company shall make works for the accommodation of the owners and occupiers of lands adjoining the railway; and sec. 61 provides that if any difference arise respecting the kind of accommodation works the same shall be determined by the sheriff.

Held that the difference contemplated might be a difference between owner and occupier, and that averments by an owner to the effect that the Sheriff had considered the claims of the occupier, had along with a civil engineer inspected the ground, where he had heard parties' explanations, without ordering intimation to him and outwith his presence, and had thereafter, although sisting him as a party to the process, refused to allow him to lodge answers or even to give him time to consider his position, were relevant to support an action of reduction of the Sheriff's award.

The Railway Clauses Act 1845 (8 and 9 Vict. cap. 33), by sec. 60, provides-"The company shall make and at all times thereafter maintain the following works for the accommodation of the owners and occupiers of lands adjoining the railway."... and by sec. 61 it provides that "If any difference arise respecting the kind or number of any such accommodation works, or the dimensions or sufficiency thereof, or respecting the maintaining thereof, the same shall be determined by the sheriff or two justices."

In April 1893 Mr George James Fergus son Buchanan of Auchentorlie, Dumbartonshire, arranged with the Lanarkshire and Dumbartonshire Railway Company for payment of compensation for the construction of certain accommodation works rendered necessary by the railway company having taken a portion of his lands under their compulsory powers. There after, Thomas Main, a market gardener at Milton, near Bowling, who held a nineteen years' lease from Whitsunday 1888 of a piece of ground belonging to Mr Buchanan through which the railway passed, claimed certain accommodation works, including an overhead bridge connecting the portions of the garden which were separated by the railway. The company in reply stated objections to supplying the works de

, &c. Rwy.

17, 1894

manded, and averred that the owner would be averse to such being constructed. Mr Main accordingly applied to the Sheriff to determine the question.

The Sheriff Substitute (GEBBIE) appointed Mr William Robertson, C.E., to advise him, and along with him and the representatives of the company and of the occupier of the land visited the ground, and there heard explanations. Upon 7th August 1893, when parties were appointed to address the Sheriff, Mr Fergusson Buchanan craved to be sisted as a party, and to be allowed to lodge written answers, or at least to have time given him to consider his position. The Sheriff-Substitute sisted him, but found it unnecessary that he should lodge answers, refused the delay asked and directed his agent to make any explanations he wished then and there. Thereupon the Sheriff-Substitute took the case to avizandum, and on 9th August pronounced a deliverance ordaining the railway company to construct an under-bridge with the necessary approaches, all as specified.

In September 1893 the Lanarkshire and Dumbartonshire Railway Company and Mr Fergusson Buchanan brought an action against Mr Main for the purpose of having the deliverance of the Sheriff-Substitute reduced.

It was averred "The pursuer Mr Fergusson Buchanan was not called as a party to the application by the defender, and it was only at the final stage after he had become aware of the nature of the proceedings that he sisted himself as a party, and asked the Sheriff to be allowed to lodge written answers to the petition, or at least to have time given to him to consider his position. This was however refused, and he protested against this refusal, and has had no opportunity given to him of stating his objections. . . . Explained further that Mr Fergusson Buchanan's procurator was unable to state his case properly owing to the manner in which the procedure was conducted. . . . The said finding and determination is incompetent and irregular and ought to be set aside. . . . In pronouncing the said finding the Sheriff-Substitute altogether ignored these facts (1) that the proprietor of the land had already arranged with the Railway Company for all the accommodation works rendered necessary on his lands by the construction of the railway; (2) that the proprietor was very strenuously opposed to the accommodation works sought in the application, as well as to those determined by the SheriffSubstitute; (3) that he was refused an opportunity of lodging written answers to the defender's petition, although written statements had already been lodged for the defender and the railway company; (4) that no time was allowed to the proprietor to consider the works proposed so as to adequately discuss the objections to same; (5) that the accommodation works appointed to be executed by said finding were totally unsuited for the ground, and would cost at least £1500, a sum enormously out of all proportion to the magnitude of the

tenant's interest in the land; and (6) that in order to execute the said works the Railway Company would require to deal with the land in a way to which the pursuer Mr Fergusson Buchanan was seriously averse, and in which the defender was not, by virtue of any of the powers contained in his lease, entitled to deal with the land."

They pleaded, inter alia-"The said finding and determination is incompetent and irregular, and ought to be reduced.

(2) because the pursuers the said Railway Company had already arranged with the proprietor of the said land the accommodation works rendered necessary by the construction of the railway; (3) because the pursuer Mr Fergusson Buchanan, after being sisted as a party to the application, was not allowed to lodge a written statement in answer to the application, or allowed time to consider the same so as adequately to state his objections; (4) because the works ordered to be executed are opposed to the wishes and inimical to the interests of the pursuer Mr Buchanan; and (5) because the works ordered are quite unsuited for the ground, and the cost of them excessive."

The defender pleaded, inter alia—“(3) The fixing of accommodation works under the Railways Clauses (Scotland) Act 1845, being an administrative Act entirely in the discretion of the Sheriff, his determination is not subject to any review. (5) The pursuers' averments being irrelevant and insufficient to support the conclusions of the summons, the present action should be dismissed, with expenses. (10) The pursuer Mr Fergusson Buchanan having had ample time to consider his position, and his procurator having been fully heard on his behalf, and his case considered, et separatim, he qua proprietor having no interest to interfere with the accommodation works for the defender, the action so far as he is concerned should be dismissed."

Upon 27th April 1894 the Lord Ordinary (Low) sustained the defender's fifth pleain-law, and dismissed the action.

"Opinion. The finding of the SheriffSubstitute is sought to be reduced upon five grounds, which are stated in the pursuers' pleas-in-law. .

"It is said in the second place that the Railway Company had already arranged with the proprietor of the land the accommodation works rendered necessary by the construction of the railway.

"It is admitted that the Railway Company and the proprietor arranged that the several portions of the land should be connected by a level-crossing, but it is also admitted that the defender was no party to the arrangement. The question therefore is, whether the fact that the owner of the land has agreed to accept certain accommodation works as sufficient, precludes the occupier from demanding that additional works shall be executed?

"It seems to me that that question must be answered in the negative. The accommodation works which a railway company is taken bound by the Railway Clauses Act to execute are such as are necessary for the

323.

"The third ground of reduction is that the pursuer Mr Fergusson Buchanan, the owner of the lands, was not allowed to lodge written answers to the defender's application to the Sheriff, or allowed time to consider the application so as adequately to state his objections

"It was argued for the defender that the pursuer had no title to appear in the proceedings before the Sheriff. I should hesitate to affirm that proposition, because the owner of lands has a clear interest in regard to the nature of proposed accommodation works. I do not however require to express an opinion upon the point, as upon other grounds I am against the pursuers.

"Mr Fergusson Buchanan appeared and asked to be sisted as a party to the process apparently after the Sheriff-Substitute had inspected the ground. The Sheriff-Substitute sisted Mr Buchanan as a party, but found that it was not necessary for him to lodge answers to the petition, and also, Mr Buchanan avers (and, I assume truly), refused to allow him time to consider his position. It is not disputed that the Sheriff-Substitute heard Mr Buchanan's agent, and therefore the ground of reduction which I am now considering is reduced to this, that the Sheriff-Substitute found that it was not necessary for Mr Buchanan to lodge answers and refused to grant delay. These were both matters in my opinion which were within the discretion of the Sheriff-Substitute. If he had refused to sist Mr Buchanan, or to hear him after he had been sisted, the question would have been very different. But having heard Mr Buchanan, I think that it was competent for the Sheriff to determine whether there was any necessity for written pleadings being lodged or for further delay.

"The pursuers plead in the fourth place that the deliverance should be reduced, because the works ordered to be executed are opposed to the wishes and inimical to the interests of Mr Buchanan.

"In what respect the works would be inimical to the interests of Mr Buchanan is not stated on record, but I understand that he considers that an under-bridge with roads sloping down to it for a considerable distance on either side would be prejudicial to the use which he will probably make of the ground after the termination of the defender's lease.

"In considering this ground of reduction I would point out that this Court has nothing to do with the merits of the

17,

Sheriff-Substitute's deliverance. If the matter was properly before the SheriffSubstitute, his judgment as to the character of the accommodation works is final.

"If, therefore, I am right in thinking that the defender was entitled to demand that the company should make such works as were necessary for his accommodation, although they had already made an agree ment with Mr Buchanan, the Sheriff's deliverance cannot be reduced simply because the landlord does not approve of the works ordered, or because it would be better for the landlord's interests in the future that the works necessary for the tenant's protection during the currency of the lease should not be executed. The Sheriff had to consider the existing and not any future use of the lands, and the only question which he had to determine was what works the company were bound to make, and the defender entitled to demand, for the purpose of making good the interruption caused by the railway to the use of the lands as at present occupied.

"Further, it seems to me that Mr Buchanan can no more object to the necessary accommodation works being made, on the ground that they are inimical to his interests, than he could object upon that ground to the railway being formed. Because making of accommodation works which the company may be compelled to make is one of the purposes of their Act for which compulsory powers may be exercised-Beauchamp v. Great Western Railway Company, 3 Ch. 745; Wilkinson v. Hull Railway Company, 20 Ch. Div. 323.

"The last ground of reduction is that the works ordered are quite unsuited for the ground, and the cost of them excessive. It is sufficient to say that that raises a question upon the merits of the Sheriff's deliverance which is not subject to review.

"Upon the whole matter I am of opinion that the pursuers have not stated relevant grounds of reduction, and that the defender is entitled to have the action dismissed."

The pursuers reclaimed, and argued-The case of Corry decided that an occupier had rights as well as an owner, but did not decide that he could have works executed against the wishes of the landlord, and which were plainly detrimental to his interests. A tenant because a couple of acres were taken from him under compulsory powers, could not have permanent works erected which he had no right to under his lease. The suggestion of a permanent under-bridge was extravagant, and yet the Sheriff had declined to hear Mr Buchanan altogether. It was clearly incompetent for the Sheriff to force these works upon the owner of the land without hearing him, and as he had done so his finding fell to be reduced. It was said opportunity had been given to Mr Buchanan's agent to explain his objections, but he could not do so when he knew nothing in detail of what had already passed.

Argued for the 'respondent-This was practically an arbitration-cf. Main v. Lan