shall use its line, paying tolls fixed with reference to the gross receipts, and providing for the carriage of local traffic on certain terms, provided there be no stipulation preventing the first company from exercising its statutory powers, or from entering into similar agreements with other companies or persons. But it may not confer upon another carrier running privileges over its road so extensive as practically to amount to a surrender of its franchises. The English Railway Clauses Act of 1845 authorizes contracts between railway companies for the passage of rolling-stock over each other's lines, and enacts that "for the purpose aforesaid, it shall be lawful for the respective parties to enter into any contract for the division or apportionment of the tolls to be taken upon their respective railways," with the proviso, however, that no such contract shall in any manner affect, increase, or diminish any of the toils which the respective companies, parties to the contract, shall for the time being be respectively authorized and entitled to demand or receive from any per on 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 payments of the same tolls as they would have been in case no such contract had been entered into.1

1 Midland R'y Co. v. Great Western R'y Co, 8 Ch. 841; Great Northern R'y Co. v. Manchester etc. R'y Co. 5 Law T. N. S. 667; Browne & Theobald's Railway Law, 237.

2 State v. Hartford etc. R. R. Co. 29 Conn. 538; Ohio etc. R. R. Co. v. Indianapolis etc. R. R. Co. 5 Am. Law Reg. N. S. 733; Attorney-General

3 8 Vict. ch. 20, § 87.

V. Great Eastern R'y Co. 11 Ch. Div. 449; Gardner v. London etc. R'y Co.
Law R. 2 Ch. 212; Johnson v. Shrewsbury etc. R'y Co. 3 De Gex, M. &
G. 914.

4 8 Vict. ch. 20, § 88.

§ 532. Of the compensation for running privileges. A provision that the receipts from through traffic shall be apportioned between the companies according to their mileage, with an allowance for working expenses, is valid;' or the tolls payable may be calculated on a graduated system. Thus, an agreement giving one company power to carry coals over the line of the other was held good, where the consideration agreed upon was that if less than a certain amount of coals should be carried during any six months, such tolls should be paid as would enable the company to pay three per cent. on their paid-up capital, less the clear profits they might make in the same six months, the sum to be paid being increased according to the amount of coals carried up to 400,000 tons, and that if the advance in quantity should raise the dividend to £4 10s. per cent., the toll should never fall below the sum which would enable that dividend to be paid. 2 But if the consideration amounts to a guaranty by the running company of the dividends upon the share capital of the other, irrespective of the amount of traffic carried, the agreement is beyond the corporate powers.* Thus, an agreement under which one company is to carry the whole traffic of the other company in consideration of such toll as will, when added to the net profits of the second company, make up its dividend to a certain amount, is not valid.1 Ā company may agree with dock-owners, in consideration of the use of the docks, to pay tolls as well

on goods carried on their line and shipped at those docks as on goods to carried and shipped at other docks in connection with the railway.5

1 Llanelly etc. Co. v. London etc. R'y Co. Law R. 7 H. L. 550.

2 Prowne & Theobald's Railway Law, 288; Great Northern R'y Co. v. South Yorshire R'y etc. Co. 9 Ex. 55, 612.

3 Simpson v. Dennison, 10 Hare, 51; 16 Jur. 830; Browne & Theobald's Railway Law, 288.

4 Simpson v. Dennison, 10 Hare, 51; 16 Jur. 830; Browne & Theobald's Railway Law, 288.

5 Taff Vale R'y Co. v. Macnabb, Law R. 6 H. L. 169. "Such an agreement does not prima facie extend to goods carried along a line constructel after the date of the agreement and leased to the company": Browne & Theobald's Railway Law, 288, citing Taff Vale R'y Co. v. Macnabb, Law R. 6 H. L. 169.

"If

§ 533. No estoppel with respect to illegal acts. The doctrine of estoppel cannot be applied to bind a corporation to a contract forbidden by law.1 a statute expressly forbids a corporation to make a certain contract, the contract is void, even though not expressly declared to be so, and is incapable of ratification; and that the contract is void as unlawful may be plea 'ed by any one to an action founded directly and exclusively on the contract;' unless, (1) the statute expressly states what the consequences of violating it shall be, and those consequences are other than that the contract shall be void; or, (2) unless the statutory prohibition was evidently imposed for the protection of a certain class of persons, who alone may take advantage of it; or, (3) unless to adjudge the contract void and incapable of forming the basis of a right of action would clearly frustrate the evident purposes of the prohibition itself."5 So, also, when a statutory prohibition is not express, but arises only by implication from the charter or enabling statute of the corporation, the contract will not be held void

4

when such a construction would defeat the intention of the statute."

1 In re Comstock, 3 Sawy. 218; Kent v. Quicksilver Mining Co. 78 N. Y. 159, 185; Ogdensburgh etc. R. R. Co. v. Vermont etc. R. R. Co. 4 Hun, 268.

2 Taylor on Corporations, § 297; In re Jaycox, 12 Blatchf. 209; New York etc. Co. v. Helmer, 77 N. Y. 64; Utica Ins. Co. v. Scott, 19 Johns, 1.

3 Taylor on Corporations, § 299, citing Pratt v. Short, 79 N. Y. 437, 445, 35 Am. Rep 531, which hardly seems, however, to support the learned author's proposition, inasmuch as the statute in that case declared that the notes or securities should be void; Lister v. Howard Bank, 33 Md. 553; and Robinson v. Bland, 2 Burr. 1077.

4 Taylor on Corporations, § 300, citing Beecher v. Marquette etc. Co. 45 Mich. 103, 108; Green v. Kemp. 13 Mass. 515; 7 Am. Dec. 169. Cf. Jo'rson v. Underhill, 52 N. Y. 203: Greenpoint Sugar Co. v Whitin, 69 N. Y. 328.

5 Taylor on Corporations, § 301, citing Gold Mining Co. v. National Bank, 96 U. S. 640; Duncomb v. New York etc. R. R. Co. 84 N. Y. 190; Union etc. Manuf. Co. v. Rocky Mountains National Bank, 2 Colo. 213; Allen v. First National Bank, 23 Ohio St. 97; Farmington Savings Bank v. Fl. 71 Me. 49; Lester v. Howard Bank, 33 Md. 558; Richmond Bank v. Robinson, 42 Me. 589.

G Taylor on Corporations, § 302; National Bank v. Whitney, 103 U. S. 99, reversing Crocker v. Whitney, 71 N. Y. 161; National Bank v. Matthews, 98 U. S. 621, 626 et seq.; Oldham v. First National Bank, 85 N. C. 240; The rnton v. National Exchange Bank, 71 Mo. 221; Graham v. National Bank, 32 N. J. Eq. 804; Winton v. Little, 94 Pa. St. 64.

§ 534. Proceedings by the attorney-general. Proceedings cannot be maintained by the attorneygeneral to restrain a corporation from doing ultra vires acts which are acquiesced in by all the shareholders, and are not injurious to the rights of creditors, unless they be shown to be illegal, that is, in contravention of some statute, or mala per se, cr against public policy; as, for example, where a railroad is acquiring a monopoly of the coal trade of a certain district, or in cases of public nuisance such as affect or endanger the public safety or convenience and require immediate judicial interposition." Otherwise the proper proceeding is by quo warranto to oust the corporation from its franchises 4

1 Attorney-General v. Tudor Ice Co. 104 Mass. 237; 6 Am. Rep. 227, and authorities there reviewed at length; United States v. Union Pacific BEACH ON RAILWAYS-55

R. R. Co. 98 U. S. 569; Attorney-General v. Utica Ins. Co. 2 Johns. Ch. 371, and authorities there reviewed; Attorney-General v. Great Eastern R'y Co. 11 Ch. Div. 449; Attorney-General v. Cockermouth Local Board, 18 Eq. 172. See 11 Ch. Div. 470; Attorney-General v. Reynolds, 1 Eq. Cas. Abr. (3d ed.) 131; Browne & Theobald's Railway Law, 97. Contra, Hare v. London etc. R'y Co. 2 Johns. & H. 80, 111; Liverpool v. Chorley Water Works Co. 2 De Gex, M. & G. 852, 860; Ware v. Regent's Canal Co. 3 De Gtx & J. 212, 228; which, however, are declared mere dicta in Attorney-General v. Tudor Ice Co. 104 Mass. 227; 6 Am. Rep. 227.

2 Attorney-General v. Great Northern R'y Co. 1 Drew. & S. 154.

3 District-Attorney v. Lynn etc. R. R. Co. 16 Gray, 242; AttorneyGeneral v. Cambridge, 16 Gray, 553; Attorney-General v. Boston Wharf Co. 12 Gray, 553; Rowe Granite Co. v. Bridge Co. 21 Pick. 344, 347; AttorneyGeneral v. Shrewsbury Bridge Co. 21 Ch. Div. 752; Browne & Theobald's Railway Law, 97.

4 People v. Utica Ins. Co. 15 Johns. (N. Y.) 358; Attorney-General v. Tudor Ice Co. 104 Mass. 236; 6 Am. Rep. 227.