The Directors, Company, of the Eastern Counties Railway Company, - Appellants; Henry Hawkes, - Respondent
| Jurisdiction | England & Wales |
| Judgment Date | 11 July 1855 |
| Date | 11 July 1855 |
| Court | House of Lords |
English Reports Citation: 10 E.R. 928
House of Lords
Mews' Dig. iii. 1019; viii. 1307, 1308; S.C. 24 L.J. Ch. 601; 3 W.R. 609; 7 Rail. Cas. 188. On point as to (1) bon fide vendors' right to enforce specific performance, see Green v. Nixon, 1858, 23 Beav. 530; In re Contract Corporation, 1869, L.R. 8 Eq. 14; Royal British Bank v. Turquand, 1855, 1856, 5 E. and B. 248; 6 ib. 327; and Bargate v. Shortridge, 5 H.L.C. 327; (2) liability of corporation for acts of promoters, see Caledonian and Dumbartonshire Junction Ry. Co. v. Helensburgh (Magistrates of), 1855, 2 Macq. 395; Shrewsbury (Earl of) v. North Staffordshire Ry. Co., 1865, L.R. 1 Eq. 593; Mann v. Edinburgh Northern Tramways Co. (1893), A.C. 69; cf. also Taylor v. Chichester, etc., Ry. Co., 1867-70, L.R. 2 Ex. 367; L.R. 4 H.L. 642; Ashbury Ry. Co. v. Riche, 1875, L.R. 7 H.L. 693; A.-G. v. Great Eastern Ry. Co., 1879, 11 Ch. D. 487.
Railway - Specific Performance - Defective Title.
[331] THE DIRECTORS, &c., OF THE EASTERN COUNTIES RAILWAY COMPANY,-Appellants; HENRY HAWKES,-Respondent [June 14, 15, 21, 22, July 11, 1855]. [Mews' Dig. iii. 1019; viii. 1307, 1308; S.C. 24 L.J. Ch. 601; 3 W.R. 609; 7 Rail. Cas. 188. On point as to (1) bond fide vendors' right to enforce specific performance, see Green v. Nixon, 1858, 23 Beav. 530; In re Contract Corporation, 1869, L.R. 8 Eq. 14; Royal British Bank v. Turquand, 1855, 1856, 5 E. and B. 248; 6 ib. 327; and Bargate v. Shortridge, 5 H.L.C. 327; (2) liability of corporation for acts of promoters, see Caledonian and Dumbartonshire Junction Ry. Co. v. Helensburgh (Magistrates of), 1855, 2 Macq. 395; Shrewsbury (Earl of) v. North Staffordshire Ry. Co., 1865, L.R. 1 Eq. 593; Mann v. Edinburgh Northern Tramways Co. (1893), A.C. 69; cf. also Taylor v. Chichester, etc., Ry. Co., 1867-70, L.R. 2 Ex. 367; L.R. 4 H.L. 642; Ashbury Ry. Co. v. Riche, 1875, L.R. 7 H.L. 693; A.-G. v. Great Eastern Ry. Co., 1879, 11 Ch. D. 487.] Railway-Specific Performance-Defective Title. Where an Act creating a railway company, or giving new powers to an existing company, authorises the purchase of lands for extraordinary purposes, a person who agrees to sell his land to the company is not bound to see that it is strictly required for such purposes: if he does not know of any intention to misapply the funds of the Company, but acts bona fide in the matter, he may enforce performance of the contract. Promoters of a company proposing to make a line of railway, or persons standing in a similar situation, as directors of an existing company applying to Parliament for authority to make a new line, may lawfully enter into a contract for land that will be necessary for the purposed line should the bill pass, and when it has passed, such contract will be valid, and may be enforced. The mere want of legal power to make the contract at the moment of entering into it, will not affect its validity afterwards. Secus where the act is itself illegal, and Parliament is to be asked to legalize it. Where a contract for the purchase of land is made by the projectors of a proposed line of railway, though an action at law may be maintained upon the contract, a Court of Equity will not, simply on that account, refuse its interference to compel specific performance. In a contract for the sale of land for the purposes of a projected railway, the vendor was described as having, so far as regarded one part of the land, no more than a mere life estate, and the projectors of the railway undertook to obtain from Parliament powers to enable him to make a good title: Held, that where they did not fulfil this stipulation, or but for their own default the title might have been perfected, they could not set up his deficiency of title as an answer to a bill for specific performance: But (per Lord Campbell) though an individual vendee may consent to accept a defective title, it is doubtful whether the directors of a railway company, acting on behalf of the proprietors, can do so. Semble, that where the directors of a railway company, wanting part of a property, purchase more of it than is required, though that may become a question between them and the shareholders, they cannot on that account avoid the contract with the seller. 928 EASTERN COUNTIES RY. CO. V. HAWKES [1855] V H.L.C., 332 [332] This was an appeal brought, by the Directors of The Eastern Counties Railway Company against a decree pronounced in favour of the Respondent in a suit which he had instituted under the following circumstances. The Eastern Counties Railway Company had been incorporated by an Act 6 and 7 Will. 4, c. cvi., for the purpose of making a line of railway from London to Norwich. In the year 1847 the directors of that company applied to Parliament for the purpose of obtaining powers to construct a branch railway from Wisbeach to join the Great Northern Railway at Spalding. This projected line was called throughout the proceedings the " curvilinear diverging line." Plans and sections of this proposed line were deposited in the usual manner, showing its intended course. It appeared from these plans, and from the limits of deviation marked on them, that the line would pass very near the Respondent's property, of which the Appellants proposed to take a considerable portion, including a part of his mansion-house and conservatories. The Respondent presented a petition in opposition to the bill. The Appellants, in order to induce him to withdraw his opposition, entered into an agreement with him, sealed with the seal of the company, by which they agreed to purchase his premises for 8000, to be paid within eighteen months after the bill should pass, and to pay him a further sum of 5000 as a compensation for his compulsory eviction from his property, and all the costs of making out a title. The agreement recited that the Respondent was only tenant for life of part of the property, and the Appellants undertook to obtain all necessary powers to enable him to make out a good title to that which they agreed to purchase; and it further stipulated, that in the event of the proposed railway being made in such a manner as to form a junction with the Ambergate, Nottingham, and Boston Railway at [333] Spalding (which proposed line was called the " direct diverging line"), the Appellants would make certain sidings for the accommodation of the Respondent's mill, the approaches to which would otherwise be interrupted. The Respondent, in consideration of this agreement, withdrew his opposition to the bill, which in July 1847 passed the Legislature (10 and 11 Viet. c. ccxxxv). In its provisions the Railway Clauses Consolidation Act and the Lands Clauses Consolidation Act were expressly included, and the Appellants were empowered to purchase land, not exceeding thirty acres, for extraordinary purposes. The powers for the compulsory purchase of land were limited to three years from the time of passing the Act; and it was provided, that in case the railway thereby authorised should not be completed within five years from the passing of the Act, the powers of the company should cease. The Appellants were authorised to raise, by the creation of new shares, 250,000 for these purposes, and these new shares were to be considered part of the general capital of the Eastern Counties Railway Company. The Act, however, expressly prohibited the making of the branch line (the " direct diverging line ") proposed, for the purpose of joining the Spalding branch of the Ambergate line. In March 1848 the Respondent delivered his abstracts of title, and in the autumn of that year he quitted his mansion at Spalding, gave due notice thereof to the company, and removed to Upton Hall, in the county of Nottingham. In November 1848, the solicitor to the company wrote to say that the Appellants thought of abandoning the Wisbeach and Spalding Railway, and proposed that the Respondent should keep his property, and receive compensation. The Respondent insisted on the completion of the contract, and after much correspondence (in the course of which it appeared that the refusal of [334] powers to make the direct diverging line led to the abandonment of the whole scheme), he, on the 4th of June 1849, filed his bill in the Court of Chancery, in which he set forth the facts above stated, and prayed for a decree for specific performance. The Appellants put in an answer, in which they alleged that their object in treating with the Respondent for the purchase of the property was, that they might be enabled to construct a line called " a direct diverging line," which line had not been sanctioned by their Act; that the property was not required by them for the line which had been sanctioned, and that consequently their agreement to purchase was invalid; that the bill as described in the agreement did not pass; that the Respondent had no power to sell, and the Appellants were incapable of purchasing and holding the messuage and land in question; that he was unable to make a, good title to it; that they had 110 funds applicable to the purchase of it; that the two sums of 8000 and 5000 were H.L. x. 929 30 VH.L.C., 336 EASTERN COUNTIES RY. CO. V. HAWKES [1855] exorbitant, and were beyond the value of the property, and exceeded fair compensation for personal inconvenience. A replication was filed, and evidence entered into on both sides. The cause came on for hearing before Vice-Chancellor Knight Bruce on the 13Ui March 1850, when his Honor was pleased to order that the contract should be specifically performed, and referred it to the Master to make the usual inquiries as to value, and in doing so to have regard to the contract, and to the clause therein relating to the Respondent } eing only tenant for life, and to the provisions of " The Lands' Clauses Consolidation Act, 1845," and further directions were reserved. The Master made his report on the 26th June 1850...
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