Gray v Chaplin
| Jurisdiction | England & Wales |
| Judgment Date | 02 June 1826 |
| Date | 02 June 1826 |
| Court | High Court of Chancery |
English Reports Citation: 38 E.R. 283
HIGH COURT OF CHANCERY
[126] gray v. chaplin. May 23, 24, 30, June 2, 182G. The commissioners of a canal make an agreement for letting the tolls, not warranted by the act under which they derive their authority, and prejudicial to an interest expressly reserved by the act to the public : this agreement is acquiesced in for forty-seven years, without complaint on the part of any of the shareholders, and, during that period, the lessee remains in undisturbed possession of the tolls : the Court will not, at the suit of shareholders, disturb his possession by the appointment of a receiver. Semble. After such acquiescence, it is not competent to shareholders, in respect of their private interest, to impeach the agreement. Semble. Though the public interest could not be bound by the agreement, nor by the acquiescence of the shareholders and commissioners, it is not competent to shareholders to impeach that agreement in respect of such public interest. How far the defective constitution of a suit, as to parties, is an objection to the appointment of a receiver. The act of parliament, passed in 1703, under which the Louth Canal was made, empowered the commissioners of that navigation to levy tolls not exceeding certain specified rates, and to grant leases of those tolls for any term not exceeding seven years. The funds thus raised were to be applied, after defraying incidental expenses, in the repayment of the money subscribed or lent for carrying the work into execution: and the act declared, that, "when the money so advanced and lent, or a competent part thereof, shall be paid off, then the commissioners, or any nine or more of them, shall and may, and they are hereby authorised and empowered, with the consent of tho major part of the creditors in value of the said tolls, to reduce the said tolls and duties." About 27,500 was raised, in shares of 100 ; the canal was made ; and liic 284 GRAY V. CHAPLIN 2 BUSS. 127. tolls were fixed, and had ever since remained, at the highest ratea permitted by the act. In 1770, Mr. Charles Chaplin, one of the commissioners, took a lease of the tolls for seven years. That lease expired at Midsummer 1777 ; and, difficulty having been experienced in re-letting them, Mr. Charles Chaplin offered to take a lease of the canal for ninety-nine years, on certain terms. The commissioners accepted his proposal; and, on the '27th of October 1777, the following [127] memorandum of agreement between him and them was entered on their proceedings :- " Whereas public notice hath been twice given in the public newspapers, and at the several market towns mentioned in and pursuant to the directions of the act, that a meeting would be lield for letting the tolls of the river for seven years, and no one appearing at either of the said meetings to take the same ; and whereas, at a subsequent adjourned meeting for that purpose, held on the 12th day of August last, Mr. Chaplin proposed to advance all the money necessary for the repairs of the river, and to keep the same in good and sufficient repair, subject to the order and directions of the commissioners for the time being for that purpose, and to keep down the interest on all the money borrowed, by paying to every subscriber interest after the rate of 5 per cent, per annum, by half-yearly payments, and to pay all officers' salaries, and all other expences attending the said works, provided the commissioners invest him with proper powers, and assign the benefit of the tolls for a term of 99 years, and agree to join with Mr. Chaplin in obtaining an act of parliament at his expence for confirming the agreement, whenever thereto by him required, which proposal was approved of and accepted by the greatest jiart of the subscribers at the meeting, and hath since been approved of and accepted by all the other subscribers, except Messrs. Alexander and Frishney Gunniss, and Mr. John Shaw ; It is hereby ordered and agreed, for the good of the said navigation, and as the only method for raising the money necessary to put the same into proper and effectual repair, that the canal or cut, and the navigation thereof, subject to the orders of the commissioners as above mentioned respecting the same, together with all the tolls arising from the said navigation, and all the estate and interest of the said commissioners therein and [128] thereto, shall be vested in the said Mr. Chaplin, his executors, administrators, and assigns, for a term of ninety-nine years, to commence from.the '24th day of June then last; and Mr. Chaplin hereby agrees on his part to accept the trust, and to do all the works which shall be ordered to be done by the commissioners as above mentioned, for the support of the navigation, and from time to time to pay all the interest of the money borrowed, at the rate of i per cent, per annum, by half-yearly payments, every Midsummer and Christmas, with officers' salaries, &c. tc. And it is further ordered, that nine commissioners be appointed to enter into an agreement with Mr. Chaplin, in writing, to carry the said order into execution." There was no other agreement in. writing ; no formal lease was made, nor was any act of parliament obtained ; but, froiu that time, Charles Chaplin, and those who claimed under him, had been in the uninterrupted receipt of the tolls, had paid the interest, and had had the entire management of the canal. Charles Chaplin died in 1795. The bill alleged, that, after all his debts and legacies were paid, a large residue, comprising, among other things, his interest in the Loitth canal, and more than sufficient to answer what might be coming due from Charles Chaplin on account of the tolls received by him, remained in the handa of his executors, and was by them assigned and transferred to Thomas Chaplin, his residuary legatee ; and that Thomas Chaplin died in 1804, having bequeathed all his estate and interest in the Louth navigation to Francis Chaplin and George Chaplin, and appointed them his executors. The bill was filed by two persons, holders, by assignment, of certain shares in the Louth navigation, on [129] behalf of themselves and all the other shareholders, except the Defendants, against Francis Chaplin, George. Chaplin, and the acting commissioners. It alleged, that the sums derived from the tolls had, for a long series of years, been more than sufficient to pay the outgoings and the interest of the debt; that, if the surplus had been applied as it ought to have been, in the diminution of the capital of the debt, the whole of the debt charged upon the canal would have been by this time paid off, so that the tolls might have been reduced, and the benefit of the navigation given to the public at a cheaper rate ; and that 2RUSS. 130. ORAY V. CHAPLIN 285 the commissioners had neglected to carry the purposes of the act into execution, and had permitted the Chaplins to apply the surplus tolls to their own use. ft prayed, that the agreement and the assignment (if any was made) might bo declared to be void as an absolute assignment, and to stand as a security only for payment of the interest of the shares, and of the expences of the canal, and then of the principal of the shares ; that an account might he taken of the tolls received by Charles Chaplin, Thomas Chaplin, and the Defendants Francis Chaplin and ({gorge Chaplin, and of the sums expended by them in paying the interest of the shares and in repairing the canal ; that, if any balance should appear to be in the hands of George Chaphn or Francis Chaplin, it might be paid over to such persons as the Court should direct; and that a receiver might be appointed to collect the tolls. A demurrer to the bill was over-ruled by the Vice-Chancellor. (See 2 Sim. & Stu. 267.) Francis Chaplin and George Chaplin stated by their answers, that, in 1777, the canal being in a, very ruinous [130] condition, and, surveyors having reported that it would be necessary to expend 7000 in repairing it, the commissioners found themselves unable either to raise the money by loan or to let the tolls ; that, with a view to the public benefit, Mr. Charles Chaplin, who had always been a zealous promoter of the undertaking, made the proposal mentioned in the bill, which, after much deliberation, and repeated meetings of the commissioners, was accepted and approved of on behalf of all the shareholders ; that Mr. Charles Chaplin, at the same time, applied to the trustees of his marriage-settlement to advance him, on the security of the canal, the 7000 which would be wanted for the necessary repairs ; that the trustees were advised by counsel, that such a security on the canal would be valid, if the proprietors would execute a deed, expressing their consent to the acceptance of Mr. Cliaplin's...
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