Winch v The Birkenhead, Lancashire and Cheshire Junction Railway Company
| Jurisdiction | England & Wales |
| Judgment Date | 31 May 1852 |
| Date | 31 May 1852 |
| Court | High Court of Chancery |
English Reports Citation: 64 E.R. 1243
HIGH COURT OF CHANCERY
S. C. 16 Jur. 1035. See Sevenoaks, Maidstone and Tunbridge Railway Company v. London, Chatham and Dover Railway Company, 1879, 11 Ch. D. 638.
[562] winch v. the birkenhead, lancashire and cheshire junction railway company. May 27, 28, 31, 1852. [S. C. 16 Jur. 1035. See Sevenoaks, Maidstone and Twnbridge Railway Company v. London, Chatham and Dover Railway Company, 1879, 11 Ch. D. 638.] Heads of a proposed agreement were arranged between the directors of two railway companies, by which one company was to allow the other company for ninety-nine years to work the lines, and use the property and plant of the granting company, (1) A foreclosure decree in this shape was first made by the Lord Justice Knight Bruce when he was Vice-Chancellor, in Badcliffe v. Salmon: Keg. Lib. B. 1850, fo. 1295. Previous to that decree every judgment creditor had three months to redeem. This has since been followed by other Judges : see particularly an elaborate decree by the Vice-Chancellor Sir G-. J. Turner, in Long v. Stone, on the 18th of February 1852 : Ex Relat. Mr. Bed well, Eegr. 1244 WINCH V. BIRKENHEAD, LANCASHIRE, AND 5 DE G.& SM. 563. except certain specified lands and buildings, upon certain terms of allowance for working expenses and charges, and the maintenance of works and ways, the property and plant to be restored on the termination of the agreement on terms of profitable return to the granting company; and provision was made for application to Parliament for powers,"if needful. On a bill by a shareholder in the granting company, on behalf of himself and all other the shareholders in that company except the directors, against that company and the other company: Held, first, that the proposed agreement was a delegation of some of the statutory powers of one of the companies to the other, which was contrary to the policy of their Acts, and could neither be granted nor accepted without further powers from Parliament; that it was a contract savouring of illegality, which, at the suit of any shareholder, this Court would restrain; and the Court, on motion, restrained the company from perfecting the agreement. Secondly, that such an agreement is not distinguishable on principle from a lease, to grant which is clearly not within the statutory powers of the granting company. Thirdly, that the 87th section of the Lands Clauses Consolidation Act merely gives to one company, a limited power to run a portion of its traffic, only when it is necessary for the purposes of its own traffic, over the line of another railway company. Fourthly, that an agreement for an application to Parliament for powers necessary to enter into the above terms, and upon a stipulation that they should not be acted upon until the necessary powers should have been obtained, would be lawful, and would not be restrained. Fifthly, that the suit being by one shareholder, on behalf of himself and the other shareholders in the granting company, against that company and the other company proposing to enter into an illegal agreement, without making any directors or other persons parties, seeking an injunction against the granting company to restrain them from perfecting the agreement, was properly framed. This was a bill filed by Henry Winch suing on behalf of himself and all other the shareholders in the Birkenhead, Lancashire and Cheshire Junction Railway Company, against the Birkenhead, Lancashire and Cheshire Junction Railway Company, and the London and North-Western Railway Company, the Great Western Railway Company, and the Shrewsbury and Chester Railway Company. The cause now came on upon a demurrer by the London and North-Western Railway Company for want of equity, and also upon a motion by the Plaintiff for an injunction. The following are the circumstances of the case as they appeared upon the bill and on the affidavits in support of the motion:-An agreement, dated the 15th of October 1851, was entered into between the Great Northern Railway Company, the Shrewsbury and Birmingham Railway Company by their agents, and the Shrewsbury and Chester Railway Company by their agents, in the agreement called " The Associated Companies," of the one part, and the [563] Birkenhead, Lancashire and Cheshire Junction Railway Company, by their agents, of the other part. By this agreement it was stipulated that the associated companies should have the right of conveying traffic over the Birkenhead, Lancashire and Cheshire Junction Railway until an Act should be obtained for the purpose of authorising a lease of that railway to the associated companies, provided such Act could be obtained after two bond fide applications to Parliament in the years 1852 and 1853, the associated companies paying, in respect of the traffic which should pass over any part of either of the lines of the associated companies to or from the Birkenhead, Lancashire and Cheshire Junction Railway, £60 per cent, of the sums which might be received from the rates which they should charge for the conveyance of such traffic; and in respect of other f oods conveyed, as to the carriage of which the Birkenhead, Lancashire and Cheshire unction Railway Company were to give the associated companies certain assistance and advantages, the payment was to be £75 per cent, of the sums to be charged for the traffic by the associated companies. As soon as the Act should be obtained a lease of the Birkenhead Railway was to be completed, and all their property and plant, whether fixed or moveable, excepting only some specified surplus land and 5DEG.&SM.S64. CHESHIRE JUNCTION RAILWAY COMPANY 1245 buildings, were to be transferred to the associated companies; but that agreement was to be held (subject to the Parliamentary powers being obtained) to secure the Birkenhead Railway Company £3 per cent, on the capital of £2,000,000 sterling, as a fixed and guaranteed rent for their line and all the property, plant and revenues of their company, from the 1st of July 1852 until the 30th of June 1854; and after that date £3, 10s. per cent, on the same capital was to become payable for one year until the 30th of June 1855; and afterwards £4 per cent, per annum was to be paid in perpetuity on the same capital; with an option to the Birkenhead Railway Company, at any time after the [564] amalgamation of the three companies, and before the 1st of January 1856, to amalgamate at par their fixed capital of .£2,000,000 sterling with the amalgamated capital of the three companies, in substitution for the fixed rent, provided the Act of Parliament should have conferred upon them such power of amalgamation. An Act of Parliament, to authorise the lease and amalgamation, was to be applied for by the parties bond fide in the session of 1852, and again, in case of need, in the subsequent session of 1853, in order to obtain all requisite powers and authorities for that object; and it was stipulated that neither company should make any arrangements or agreements to do any act which should interfere with or prejudice or be inconsistent with the rights and privileges which were the subject-matter of this agreement, or with the future lease and possession of the Birkenhead, Lancashire and Cheshire Junction Railway. A more formal agreement was to be drawn up and submitted for confirmation by the shareholders of the Birkenhead, Lancashire and Cheshire Junction Railway Company. A meeting of the shareholders of the Birkenhead, Lancashire and Cheshire Junction Railway Company was held on the 1st of November 1851; at which the agreement of the 15th of October 1851 was produced and considered, and resolutions were passed to the following effect:- "Resolved that the memorandum of agreement with the Great Western and Shrewsbury Companies, dated the 13th of October 1851, be confirmed and ratified. " That the directors of the Birkenhead, Lancashire and Chester Junction Railway Company be specially empowered to ratify and confirm, by affixing the common seal of the company to, any extension of agreement with the Great Western and Shrewsbury Railway Companies, in like manner as if such extended agreement had been submitted to a meeting of proprietors of this company." [565] A bill, to enable the Birkenhead, Lancashire and Cheshire Junction Railway Company to lease their line to the Great Western, the Shrewsbury and Birmingham, and the Shrewsbury and Chester Railway Companies, or to the Great Western Railway Company, and to enable the Birkenhead Railway Company to amalgamate with the associated companies, was brought into Parliament, and was before a Committee of the House of Commons for consideration. Owing to a difference between the Birken head Railway Company and the amalgamated companies, a meeting of shareholders of the Birkenhead, Lancashire and Cheshire Junction Railway Company had, by a resolution, required their directors not to proceed with the bill so far as that company was concerned. The bill, however, had not been withdrawn, and...
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