The Express.
London, England, 1851-11-14 00:00:00

Raw intelttgence.

EQUITY COURTS.—YEBTERDAL
Suva' 1118 Loans JUSTICI6I or Arroot.
EUDOSON r. EARL Powis.—lxtuscrioN.

This was an apiald —fro7nan order grantiugVea injunction
made by Lord Langdale in April, 18.50. 'the dehmdants
were the directors of the Shropshire Union Railways and
Canal Company, and the company, by three several acts of
parliament, which received the royal assent in August, 1846,
were empowered to make three distinct railways—the
first from Shrewsbury to Stafford, tho second from
Newtown to Crewe, and the third from Calveley
to Wolverhampton. A fourth act was also passed
in the subsequent session enabling the defendants
to grant, and the London and North Western Railway
company to accept, a lease of these railways when completed
on certain terms. It was declared in this last act that the
Shropshire Union Railways and Canal Company referred
to in the prior acts were and ever had been one and the
same company and nut separate and distinct conipauies.
By the first act the directors were empowered to rum by
shares, ti 09,000/. ; by the second, 1,500,0J0/. ; and by the
third, 1,000,000/. 'the directors proceeded to raise these
sums by the issue of 165,000 shares of 20/. each, on which
they had made certain calls. The third call was
made in Jule, 1840, and thu plaintiff, a shareholder,
nut having paid the call, an action was brought against him
for the amount. The bill, which was tiled by the plaintiff
and all other holders of 201. shares issued under the powers
of the acts of parliament, alleged that the only part of the
three lines which had been constructed was the line be-
tween Shrewsbury and Stafford, which had been opened,
and it stated in substance that the other two lines had been
abandoned by the directors, and that the directors intended
to apply the moneys in their hands and the calls for the
purpose of the completion of the railway from Shrewsbury
to Stafford, and of a branch thereto, and not with
a view to the completion of the entire undertaking of the
Shropshire Union Railways and Canal Company. the bill
sought to restrain the company and directors from applying
any monies of the company, except for the purposes and
with a view to the construction of the whole of the railways
and works authorised by the three acts,and from making and
enforcing calls, except for that purpose. U pen motions made
in April, 1850, Lord Langdale, the,then Master of the Rolls,
granted an injunction restraining the company Irons ex
pending the corporate funds' except in paying the debts of
the company contracted before the date of the notice of
motion, and the current expenses of maintaining and work-
ing the line.
Mr. Rolt and Mr. Speed, in support of the appeal motion,
contended, first, that the plaintiff and those whom he re-
presented had acquiesced in the abandonment of the nuo,
for at least a twelvemonth before the tiling of the bill, and
that they were bound by sucn acquiescence ; secondly, that
the injunction had been granted upon the authority of
" Cohen v. Wilkinson" (I Rale and Twell's Reports, 4430,1
by which it had been determined that directors were
not justified in applying funds raised fur making
a complete line in the construction of a mere trac-
tion of the line ; but that the principle of tli a de-
cision did nut apply to the case of three distinct un-
dertakings authonsed by distinct acts of parliament, one
of which only was to be carried out : and, thirdly, that the
difficulty hail been caused by the plaintiff' and other share-
holders not having paid up their calls.
Mr. Roundell Palmer, in support of the injunction, con-
tended that acquiescence on the part of the plaintiff' had nut
been established; that " Cohen V. Wilkiiisoll" applied to
the case, fur the companies created by the three acts had
been declared by the fourth act to constitute but
one company ; that the fund raised was a general fund,
applicable to the three undertakings, and exceeded the
amount which could be properly raised for the first railway
alone—viz., 800,0001. ; and that it could not be exclusively
applied in the completion of one line of railway. lie also
contended that, as the payment of calls was resisted by the
plaintiff on the ground of the abandonment of part of the
undertaking, and an action for the recovery thereof was
still pending, the plaintiff could not be said to be in default
for non-payment thereof.
Lord J astice Knight Bruce said the effect of the injunc-
tion which had been granted was to prevent the expendi-
ture by the directors of a single shilling of the corporate
funds, except for the payment of debts and liabilities owing
by the company at the date of the notice of motion at the
Rolls, and of the current expenses of maintaining and
working the railway which had been constructed, and the
canals. They were prevented from applying one shilling
either for improving or adding to the works or conVe-
niences upon the railway, or connected with it. The in-
junction, moreover, had been applied for in the absence of
the London and North-Western Railway Cumpany,who had
an important interest inits subject, and who were, in fact, in
possession under a contract in the nature of a lease of the
working of the railway. The concernsof the railway were in
fact represented by a committee appointed partly by the
defendant, and partly by the London and North-Western
Company. The railway from Stafford to Shrewsbury was,
moreover, in active operation, and that operation was not
attempted to be stopped. It was admitted, indeed, by the
plaintiffs, that as things now stood, the working of the
railway must go on. A different contention would, in-
deed, be monstrous; for it successful, the effect would be
that the large amount of property which the shareholders
had embarked in the undertaking must go to mere waste
and destruction. In a case in winch it was admitted
that the railway must go on, mid is which ab-
sent parties had an important interest, an injunc-
tion had been applied for and obtained, having
the effect of preventing the outlay of a single shilling of the
corporate fund in alterations, additions, and improvements
of the railway. It had also been assumed that the case
was identical with that of " Cohen v. Wilkinson ; " inas-
much as the three acts of parliament in effect harmed but
one, and related to one subject matter. It did nut follow
necessarily, however, from that decision, that in a case in
which three separate lines were authorised to be con-
structed, one only of those lines could nut be made. In
the case before him, however, it had been made and was in
operation ; though, even it it had not been made, lie would
not have been satisfied that " Cohen v. Wilkinson "
would have been applicable to the case. from
the facts before the court, moreover, the inference
was unavoidable that the plaintiff had liceu for inure than
twelve months before the filing of the bill cognisant of and
acquiescing in the abandonment of the two lineal. In this
state of things the plaintiff had sought an injunction. The
injunction which he had obtained was an interlocutory
one, and in granting such an injunction the court always
need a discretion according to the circumstances ut the
case, and the balance of mischief which might be occasioned
by the granting or refusing the injunction. The plaintiff's
equity was very doubtful, and even if it were
greater the injury occasioned to his own property as
well as that of his co-shareholders by granting the
injunction would be much greater than by refusing it.
Ho thought, therefore, under all the circumstances, that
the order made by the court below should be discharged,
and the injunction dissolved, without prejudice to any other
application that might hereafter be made, and without pre-
judice to any question. The costs of the proceedings at the
Rolls would be reserved.

Lord Justice Lord Cranworth concurred in the order
which had just been made. As that conclusion had been
arrived at upon grounds differing slightly from those
which had just been given, ho was bound to give
the reasons of his conclusion to the parties. The
Shrewsbury and Stafford line, it appeared, had, prac-
tically speaking, been completed, though not perhaps
absolutely, because it was considered that a certain amount
of expenuiture might be incurred in making the line more
profitable to the shareholders. This had been felt by Lord
Langdale, who therefore had guarded the injunction by •
qualification ; not meaning to restrain eapenditure for
ordinary repain. The necessity of introducing such a
qualification had induced him to think that the order for
en injunction was wrong ; for, on consideration of what
might be included in the qualification, he found the sub-
jects so extensive that the effect might be to nullify the in-
junction. It was impossible, in fact, to say what expenditure
might become necessary. He concurred also with Lord Jus-
tice Bruce in what he had said as to the acquiemencc of the
plaintiff. Finally, although so much had been done in the
°Destruction of the railway, yet there might still remain so
much to be done, before what had already been done could
be rendered perfectly useful, that he thought it would be
an unwise exercise of the discretion usually exercised by
the court upon applications for interlocutory injunctions to
interfere in the present instance with the discretion of the
directors as to what was proper to be done for the interests
of the shareholders. Those ware the grounds upon which
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