The Shrewsbury and Birmingham Railway Company v The London and North-Western Railway Company
| Jurisdiction | England & Wales |
| Judgment Date | 08 February 1853 |
| Date | 08 February 1853 |
| Court | High Court of Chancery |
English Reports Citation: 51 E.R. 848
ROLLS COURT
S. C. on appeal, 4 De G. M. & G. 115; 43 E. R. 451; 6 H. L. C. 113; 10 E. R. 1237 (with note).
[441] the shrewsbury and birmingham railway company v. the london and north-western railway company. Nm . 15, 16, 17, 18, 23, 24, 1852; Feb. 8, 1853. [See S. C. on appeal, 4 De G. M. & G. 115; 43 E. R. 451; 6 H. L. C. 113; 10 E. R. 1237 (with note).] During a contest before Parliament, two competing railway companies came to an agreement for dividing the profits earned by both, in a given proportion, and for regulating the traffic. Lord Cottenham and the Q. B. held that the arrangement was not invalid, as a fraud upon the public by creating a monopoly, and the 16 BEAV. 442. SHREWSBURY, ETC., ELY. CO. V. LONDON, ETC., ELY. CO. 849 Master of the Rolls considered that Lord Cottenham had decided inferentially, that such a contract was not ultra mres. But, held by L. J. Knight Bruce, that it was a breach of trust, and by L. J. Turner, that it was ultra vires, and contrary to public policy. An Act authorized the Shropshire Union to lease several lines to the North-Western. The Shrewsbury entered into a contract with the North-Western to operate "during any such lease authorized to be granted by the said Act." The Master of the Eolls held, that the contract had no operation until all the lines had been finished; but L. J. Turner differed in opinion. A railway company cannot, in the absence of any authority contained in their Acts of Incorporation, become proprietors of steamboats and carriers of passengers and goods by sea. The Court looks with great disfavour on an objection of illegality of a contract, urged by a party to avoid its performance after he has received the consideration for it. This cause, which, under different forms, has been frequently before the Court (reported 2 Hall & Tw. 257; 2 Macn. & G. 324; 3 Macn. & G. 70; 21 L. J. (Q. B.) 89), now came on for hearing. This bill was filed by the Shrewsbury and Birmingham Railway Company against the London and North-Western Railway Company and the Shropshire Union Railway and Canal Company and two other Defendants, for the purpose of enforcing the due fulfilment, and obtaining the fruits of an agreement, entered into between the above-mentioned railway companies on the 12th October 1847, under the corporate seals of the three companies, for the division of the traffic upon their competing lines. Omitting many lines unnecessary for the elucidation [442] of the principle decided, the following diagram will sufficiently explain the relative position of the companies:- Waluerhampton To London The North-Western passes from London to Liverpool, through Rugby, Birmingham, and Stafford, and the same company had a lease of the Stour Valley line, being the portion from Birmingham to Wolverhampton. The Plaintiff's line (the Shrewsbury) passed from Shrewsbury through Wellington to Wolverhampton. The Shropshire Union passed from Shrewsbury through Wellington to Stafford, and it had three other lines and canals, which it is not necessary to notice. The portion between Shrewsbury and Wellington was common to the two latter companies, and was worked by a joint committee. In 1847 the London and North-Western Railway Company and the Shropshire Union solicited a bill in Parliament, to authorize the London and North-Western Railway Company to take a lease of the undertakings of the Shropshire Union, 850 SHREWSBURY AND BIRMINGHAM RLY. CO. V. 18 BEAV. 3. comprising tbat from Shrewsbury to Stafford. The effect of their succeeding in this application to Parliament is obvious. By obtaining the line [443] from Wellington to Stafford, the North-Western would have the control of the whole traffic between Shrewsbury and London by the circuitous route through Stafford, to the exclusion of the direct route through Wolverhamptou, and it would obtain other similar advantages, which it is unnecessary to refer to. The Plaintiffs, therefore, naturally opposed the bill; and to induce them to withdraw their opposition, an agreement, signed by the agents, was entered into, and acted upon in May 1847. In consequence of the withdrawal of this opposition, the Act passed on the 2d July 1847, authorizing a lease of the undertaking of the Shropshire Union to the London and North-Western Railway Company. The formal instrument under the corporate seals of the companies was afterwards prepared, and was executed on the 12th October 1847. By the first clause of this agreement, the three railway companies covenanted, "during the continuance of any such lease authorized to be granted by the said Act," to keep an account of the traffic from Shrewsbury and Wellington to Rugby, or any place to the south; and of the monies received from that source. By the second, they undertook to furnish each other with half-yearly accounts of these matters; and the monies received in respect of the distance between Shrewsbury and Stafford, and Shrewsbury and Wolverhampton, were to be ascertained and divided, and seven-thirteenths paid to the Plaintiffs and six-thirteenths to the Defendants. By the third, the Defendants undertook, " during the continuance of any such lease," riot to convey anything from Shrewsbury or Wellington, or from any point between those two places, to any point or place on the line of the Plaintiffs' railway or the Birmingham and Stour [444] Valley Railway, nor to use the line by Gnosal and Stafford " to compete for any traffic which properly belonged to the Shrewsbury and Birmingham Railway Company." By the fourth clause, it was stipulated that the contract should not be evaded by any "arrangement, scheme, device or contrivance," and that questions arising upon it should be referred to the arbitration of Robert Stephenson, or in case of his death or absence, to the arbitration of an umpire to be appointed by the Railway Commissioners. By the fifth clause, the Plaintiffs were to have liberty to determine the agreement, by giving six calendar months' notice in writing of their intention so to do. The Plaintiffs' line of railway was opened on the 13th November 1849, and they applied to the Defendants, the railway companies, to keep the accounts above specified, and to deliver abstracts thereof. This was not done; and in the month of December following, the Plaintiffs filed their bill in this cause, praying that the Defendants, the railway companies, might be decreed to perform the matters specified in the contract. The prayer of the bill, in this respect, closely followed the words of the agreement, and prayed likewise for an injunction to restrain the Defendants from carrying passengers, cattle, goods, or other matters or things from Shrewsbury or Wellington, or from any point between those places, to any point or place in the line of the Plaintiffs or the Stour Valley Railway ; and from using the line by Gnosal and Stafford to compete for any traffic which belonged to the Plaintiffs. A demurrer was put in to this bill by the Defendants, which was argued before the late Viee-Cbancellor of England early in 1850, and was allowed by him. This [445] was carried by appeal to Lord Cotteriham, who reversed that decision, and granted an injunction till answer or further order. (2 Hall & Tw. 257; 2 Macn. & G. 324.) On the answer being put in, an application was made, in December 1850, to the Lord Chancellor Truro, to discharge that injunction. (3 Macn. & G. 70.) His Lordship thought that the propriety of granting an injunction could not be determined, till various legal questions, on which the Plaintiffs' equity mainly depended, had been determined at law. He therefore discharged the injunction granted by Lord Cottenham, and gave liberty to the Plaintiffs to bring such action as they might be advised, the Plaintiffs and Defendants mutually undertaking to keep all the required accounts of traffic. The action was brought accordingly, and upon the determination of that action by the judgment of the Queen's Bench in November 1851 (21 L. J. (Q. B.) 89), the motion for an injunction was...
To continue reading
Request your trial
- Pakenham Upper Fruit Company Ltd v Crosby
-
The Directors, etc. of the Shrewsbury and Birmingham Railway Company v The Directors, etc. of the North-Western Railway Company and of the Shropshire Union Railways and Canal Company
...decided that the contract was not ultra vires ; but his Honor held that it had no* operation until all the lines had been finished (16 Beav. 441). The case then came on appeal before the Lords Justices, who held that the contract was ultra vires and ought not to be specifically performed; t......
-
Between The Shrewsbury and Birmingham Railway Company, Plaintiffs; and the London and North-Western Railway Company, the Shropshire Union Railways and Canal Company, George Carr Glyn, and William Cowan, Defendants; and between The London and North-Western Railway Company and The Shropshire Union Railways and Canal Company, Plaintiffs; and The Shrewsbury and Hirmingham Railway Company, Defendants
...and Hirmingham Railway Company Defendants. See S. C. (with note) 2 Mac. & G. 324; 3 Mac. & G. 70; 6 H. L. C. 113; 10 E. R, 1237; 16Beav. 441; 22 L. J. Ch. 682; 17 Jur. 845; 1 W. R. 172; 26 L. J. Ch. 482; 3 Jur. N. S. 775; 17 Q. B. Rep. 652. £115] Between the shrewsbury and birmingham railwa......