undertaking, as a canal, and the event is that that sum is not nearly sufficient, if the owner of an estate through which the legislature has given the speculators the right to carry the canal can show that the persons so authorized are unable to complete their work, and is prompt in his application for relief, grounded on that fact, this court will not permit the further prosecution of the undertaking." This we apprehend would, at the present day, require to be received with considerable allowance.

2. In another case,3 Lord Cottenham thus explains Lord Elaon's decision above: "I apprehend that Lord Eldon must have gone upon this ground, that, where acts of parliament impose certain severe burdens upon individuals, by interfering with their private rights and private property, for the purpose of obtaining some great public good, if the court sees that the undertaking cannot be completed, and that therefore the public cannot derive the benefit which was to be the equivalent for the sacrifice made by the public, the court will protect the individual from being compelled to make the sacrifice, under the circumstances, and until it appears that the public will derive the proposed benefit from it." And even with this qualification, it seems to us that it would be impossible for a court of equity to exercise much control over these enterprises, without virtually assuming a supervision over the doings of the legislature and the business of the country which would be impracticable and invidious. It is obvious this purpose has been virtually abandoned in the English courts of equity.4

Salmon v. Randall, 3 Mylne & Cr. 439.

✦ Blakemore v. The Glamorganshire Canal Navigation, 1 Myl. & K. 154; Gray v. The Liverpool & Bury Railw. Co., 4 Railw. C. 235. In this last case, the company had, to induce the plaintiff to withdraw opposition, consented to incorporate into their act a provision, that the line of the railway should not come within a certain distance of a bridge named, without the plaintiff's consent. Upon examination it turned out that plaintiff owned all the land within the line of deviation, from that point, so that the road could not proceed without the plaintiff's consent. The Master of the Rolls held this could make no difference, even in the construction of the stipulation. The parties must be presumed to have understood the matter, and to have made their contract understandingly, and the court should not defeat it.

See also Lee v. Milner, 2 M. & W. 824, and the remarks of Alderson, B., limiting the right of a court of equity to restrain the company from proceeding to

In the case of Gray v. The Liverpool & Bury Railway, the Lord Chancellor declined to interfere, until the legal right was determined in a court of law, if either party desired it, the injunction standing, in the mean time, to sustain all existing rights.

3. But a court of equity will not interfere, because a railway company do not propose to complete their entire line. The remedy, in such case, if any, is by mandamus. A canal company were restrained by injunction from converting a canal, for erecting which the company were incorporated, into a railway.6 But where the directors of a railway company, with the concurrence of the shareholders, on finding the original undertaking impracticable, proceeded to construct a small portion of the works, which were nearly completed, the court declined to interfere by injunction, at the instance of the minority of shareholders, on the ground of their acquiescence, they having known, or had the means of knowing, the progress of the acts complained of.7

take land, to cases where it is evident they have virtually abandoned the enterprise, and have no longer any serious expectation of accomplishing it, which to us appears the only practicable ground upon which a court of equity could interfere. Thicknesse v. Lancaster Canal Co., 4 M. & W. 472.

The Attorney-General v. The Birmingham & Oxford J. Railw., and other companies, 7 Eng. L. & Eq. 283. See Reg. v. Eastern Counties Railw., 10 Ad. & Ell. 531; Cohen v. Wilkinson, 5 Railw. C. 741. Acts of parliament authorizing companies to make railways are regarded only as enabling acts which give powers, but do not render compulsory or obligatory the exercise of those powScottish Northeastern Railw. v. Stewart, 3 McQ. H. L. Cas. 382. Maudsley v. Manchester Canal Co., Cooper's C. Pr. 510.

ers.

' Graham v. Birkenhead, Lancashire, & Cheshire J. Railw., 2 Mac. & G. 146 ; 2 Hall & T. 450.

*489

SECTION VII.

Equitable Control of the Management of Railway Companies.

1. Courts of equity will not interfere in mat- 10. Bill in equity may be maintained by a ters remediable by shareholders. single stockholder.

2. Will not restrain company from declaring 11. Necessary requisites in form of such a dividend till works are finished.

bill.

3. Will interfere to enforce public duty rather 12. Directors not responsible for purchases than a private one. made on credit of the corporation.

4. Will restrain such companies from divert- 13. Minority may insist upon continuing the

But

§ 211. 1. There have been numerous instances of application to courts of equity to interfere in the control of the management of railway companies, in respect of their internal concerns. as a general rule it is said,1 whenever the acts complained of are capable of being rectified by the shareholders themselves, in the exercise of their corporate powers, equity will not interfere, but leave questions of internal management and regulation to be settled by the shareholders in corporate meeting. And especially is this the case where the act complained of is clearly within the power of the company.3

2

1 Hodges on Railways, 67. See Howe v. Derrel, 43 Barb. 504. Thus, in Orr v. Glasgow, &c. Railw., before the House of Lords, reported in 6 Jur. N. S. 877, it was held that the directors are the servants of the company, not of each individual shareholder; and if a shareholder is aggrieved by their misconduct, his course is to call upon the company to bring the directors to account, and then, that being done, to get relief from the company itself.

2 See Bailey v. Power Street Church, 6 Rhode Island R. 491.

* Brown v. Monmouthshire Railw. and Canal Co., 4 Eng. L. & Eq. 113. But

2. Hence it was held, that equity had no jurisdiction to restrain a railway company from declaring a dividend until their works were all completed, there being no provision in the acts to that effect.3

3. But courts of equity are far more ready, upon a bill properly framed, to interfere to enforce a public duty of a railway company, than a mere private duty.4

where the charter of a railway company provided, that unless certain portions of the work should be completed within a specified time, no dividend should be declared by them until the works were so completed, so far as their ordinary shares were concerned the company were enjoined from making any dividend contrary to the charter. Allen v. Talbot, 30 Law Times, 316 (Feb. 1858). But a railroad company will be restrained, at the information of a relator, from carrying on a trade not authorized by the act constituting it. Attorney-General v. Great Northern Railw., 6 Jur. N. S. 1006. And where the articles of association of a company contained no power to issue preference shares, and the company in general meeting passed a resolution for the issue of some shares with a preferential dividend, the court, upon motion for an injunction by three shareholders, who had notice of but did not attend such general meeting, granted an injunction restraining the issue of such preference shares. Hutton v. Scarborough Cliff Hotel Co., 2 Drew. & Sm. 514.

* In Buck Mountain Coal Co. v. Lehigh Coal & Nav. Co., 50 Penn. St. 91, it was held, that a bill in equity to enforce the performance of a public duty by a corporation, cannot be maintained by a private party, in the absence of any special right or authority. And where the slackwater navigation of the Lehigh Coal and Navigation Company, with dams, locks, and other appliances, were damaged, broken, and swept away by a flood, it was held that a bill in equity could not be maintained by another company to enjoin the said corporation from neglecting to repair and put in operation their navigation; and that the complainants had no right to a decree compensating them for damages sustained in consequence of the non-repair. The court intimate, however, that a bill might probably be maintained in behalf of the Commonwealth by the Attorney-General. Buck Mountain Coal Co. v. Lehigh Coal & Nav. Co., supra. And equity will not interfere by injunction to redress public nuisances, when the object sought can be attained by ordinary legal methods. Jersey City v. Hudson, 2 Beasley, 420.

The court will not grant an injunction to restrain a railway company from charging a carrier otherwise than equally with all other persons. Sutton v. Southeastern Railw., 11 Jur. N. S. 935; s. c. 35 L. J. Exch. 38; but see Baxendale v. North Devon Railw., 3 C. B. N. S. 324. See Jones v. Eastern, &c.

Railw., 3 C. B. N. S. 718; Cooper v. London, &c. Railw., 4 C. B. N. S. 738; Baxendale v. Great Western Railw., 5 C. B. N. S. 309; Nicholson v. Great Western Railw., 5 C. B. N. S. 366.

A railway company will not be allowed to grant to an omnibus proprietor the

4. So, too, as we have seen,5 they very often interfere to restrain companies of this kind from making use of their funds for a purpose wholly aside of the general object of their incorporation, and this will be done at the suit of shareholders, although a' majority may have sanctioned by their votes the act complained of.6

exclusive privilege of carrying passengers between another town and one of its stations. Marriott v. London & Southwestern Railw., 1 C. B. N. S. 499. But a company will not be enjoined from allowing a cab proprietor the exclusive privilege of plying within their station. Beadell in re, 2 C. B. N. S. 509. Even where it is charged that occasional delay and inconvenience are thereby caused to the public. Painter in re, 2 C. B. N. S. 702.

5

Ante, § 56; Bagshaw v. The Eastern Union Railway, 7 Hare, 114. So may one or more shareholders file a bill, on behalf of themselves and others, against any officer who is diverting the funds of the company from their lawful use. Salomons v. Laing, 12 Beavan, 377; 6 Railw. C. 152; Edwards v. Shrewsbury and Bir. Railw., 2 De Gex & S. 537. See also Ill. Grand Trunk Railw. Co. v. Cook, 29 Ill. R. 237. And the directors of a company will be restrained by injunction from improper issue of shares. Fraser v. Whalley, 2 H. & M. 10.

• In the case of Brown v. Monmouthshire Railw., 4 Eng. L. & Eq. 113, Lord Langdale, M. R., after some rather spicy but highly pertinent strictures upon the prominent disposition of these public companies to take advantage of every possible evasion, seemingly to gain time, to the serious damage of their own character for frankness if not for fairness, upon the general merits of the bill, makes the following very prudent and comprehensive exposition of the general subject: "Having given my best attention to this case, and thinking it of very great importance and of some difficulty, I am, on the whole, of opinion that this bill cannot be sustained. The jurisdiction of this court has, in several cases, been very usefully applied in preventing or checking the erroneous conduct of corporations created by act of parliament for public purposes; but it is not settled to what extent, or subject to what particular limitations, the jurisdiction ought to be exercised; and unless parliament should think fit to lay down rules for the guidance of the courts, litigation to a considerable extent must, I am afraid, take place. The class of cases in which this court has often been called upon to interfere, are those which arise out of a combination of acts which are in themselves illegal, and considered as breaches of contract with the public, acts which are breaches of contract, express or implied, with the subscribers to the undertaking, and acts erroneous, or breaches of contract incapable of being rectified by the shareholders themselves in the exercise of their own powers. In almost all cases it is necessary to distinguish two things, which, although they often are, and always ought to be, concurrent, are in themselves distinct, and are very apt to be confounded. There is the duty of the committee, directors, or governing body, to the public, and their duty to the shareholders, whom they represent. In this case, the duty of the company to the public made it impera