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Full text of "A treatise on the railway law of Canada. Embracing constitutional law, the law of corporations, railway securities, eminent domain, contracts, common carriers, negligence, damages, master and servant, text of Dominion and provincial railway acts, etc., forms of proceedings in expropriation"

3(1 resetitch to 

JIt 

of 



OSHAWA AND DISTRICT 
HISTORICAL SOCIETY 



\ 




J2 



.A-IBIBOTT 

ON THE 



RAILWAY LAW OF CANADA. 






A TREATISE 



R1ILIAI LAI OF CANADA. 



EMBRACING 

Constitutional Law. The Law of Corporations. Railway Securities. 
Eminent Domain. Contracts. Common Carriers. Negligence. 
Damages. Master and Servant. Text of Dominion and 
Provincial Railway Acts, etc. Forms of Pro- 
ceedings in Expropriation. 



, Q,_O. 

OF THE MONTREAL BAR, 
Professor of Commercial Law, Me Gill University. 



MONTREAL : 

C. THEORET, LAW BOOKSELLER AND PUBLISHER, 
II and 13 St. James Street. 

1896. 



Entered according to Act of Parliament, in the year 1896, by C. Theoret, 
in the office of the Minister of Agriculture. 




HE 



TO THE! 

HONOURABLE MELBOURNE MacTAGGART TAIT, D.C.L., 

ACTING CHIEF JUSTICE OF THE SUPERIOR COURT FOR 
THE DISTRICT OF MONTREAL, 

In admiration of his great ability and sterling qualities ; and in grateful 

remembrance and acknowledgment of much kindness and 

courtesy, both while associated with him at the 

Bar and after his elevation to the Bench, 

THIS WORK 

Is respectfully dedicated 
By the Author. 



PREFACE. 

The author does not presume to offer this work to the 
public and the profession as a complete treatise on Rail- 
way Law generally, but, as he hopes it may prove to be, 
a useful handbook of the law applicable to railway compa- 
nies in this country ; and he trusts it may supply, in a prac- 
tical and useful form, a want which has been felt for such a 
book. No attempt has been made to reproduce the enor- 
mous mass of English and American jurisprudence in 
railway cases ; nor does the author pretend to give the 
whole jurisprudence of this country, but believes that the 
reader will find in the ensuing pages most of the leading 
cases of authority bearing upon the majority of questions 
affecting railways which have arisen in this country. Re- 
ferences will be found to some American cases which have 
seemed particularly in point, or which illustrate questions 
not authoritatively decided in this country, but generally 
the leading American text-writers have been quoted. A 
freer use has been made of the jurisprudence of the 
English Courts and of English text-writers, either in cases 
arising under English statutes similar to our own, or to ex- 
plain the English law on any given point. References are also 
made to the jurisprudence and text-writers of France ; but 
more sparingly, as the statute law of that country affecting 
railways is in many respects radically different from our 
own. 

The author must crave the indulgence of his professional 
brethren in other provinces than Quebec, if they miss 
many familiar faces in their jurisprudence omitted in this 
work. They must attribute such omissions rather to his 



PREFACE. 

unfamiliarity, as a member of the Quebec Bar, with their 
case law, than to any failure of effort of research on his 
part to ascertain its leading principles. 

The general scheme of the book has been to give, as far 
as possible, in consecutive order and sequence, the princi- 
ples of law, statutory or otherwise, governing railway com- 
panies, in their incorporation and organization, in the 
obtaining of financial means to carry on the undertaking, 
the acquiring of land and rights of way, the construction 
of the road, its operation, and the rights and liabilities 
consequent upon the exercise of their powers and the carry- 
ing on of railway business. In addition, there has been 
printed in an appendix the text of the Railway Act, with 
references in each section to any differences in the various 
Provincial Acts, the sections of the Criminal Code, and 
some special statutes, affecting railways, as well as some 
forms, which it is hoped may prove of use to the practi- 
tioner. 

The author cannot let this book go forth from the 
press without acknowledging his great indebtedness to Mr. 
F. L. Snow, Librarian to the New York Life Insurance 
Company in Montreal, for valuable assistance in collecting 
material for, and in the compiling of, this book ; and to 
Mr. R. T. Heneker, of the Montreal Bar, in kindly giving 
access to his private collection of Railway cases. 

H. A. 
MONTREAL, 29th February, 1896. 



COMTeHTS 



PAGES 

Chapter I. Introductory T 

II. Organization and management of Railway 

Companies ir 

III. Shares and Shareholders , 34 

IV. General Powers 73 

V. Financing of Railway Companies 86 

VI. Receivers 125 

" VII. Eminent Domain 136 

" VIII. Construction of the Railway 218 

" IX. Operation of the Railway 270 

X. Carriers 294 

XI. Negligence 363 

" XII. The Measure of Damage 418 

Appendix, The Railway Acts i to clxxx 

Analytical Index 643 



LIST OF ABBREVIATIONS 

OF 

CANADIAN REPORTS. 



Grant's Chy Upper Canada Chancery Reports. 

U. C. C. P Upper Canada Common Pleas. 

U. C . Q. B Upper Canada Queen's Bench. 

O. R Ontario Reports. 

Ont. P. R Ontario Practice Reports. 

Ont. A. R Ontario Appeal Reports. 

L,. C. R Lower Canada Reports. 

L. C. J Lower Canada Jurist. 

R. L Revue Lggale. 

M. L. R., S. C Montreal Law Reports Superior Court. 

M.L. R.,Q. B " " " Queen's Bench. 

L. N Legal News (Montreal). 

L. C- L. J Lower Canada Law Journal. 

Rev. de Leg Revue de Legislation. 

Q. L. R Quebec Law Reports. 

Q. R., S. C Quebec Official Reports Superior^Court. 

Q. R., Q. B Quebec Official Reports Queen's Bench. 

M. L. D. 6 R Monthly Law Digest & Reporter (Montreal). 

Man Manitoba. 

N. W. T. Rep North West Territories Reports. 

B. C British Columbia. 

Geld &> Oxley ...... . . Nova Scotia Reports. 

Russell and Geldert " " 

N. S 

Pugs New Brunswick Reports. 

N. B 

S. C. R Supreme Court Reports, Canada. 

R, . ..." The Reports " England 



Adams v. Lancashire & York Ry 368 

Addlestone Linoleum Co . re 87 

Albert Cheese Co. v. Leeming 224 

Aldridge v. Great Western Ry 308 

Alexander v. Toronto 6 Nipissing Ry 343 

Allan v. Manitoba & N. W. Ry. Co 130, 132, 135 

" v. City of Montreal 204 

' ' v. Merchants Marine Ins. Co 374 

" v. Mullin 373 

" v. Woodward 361 

Allen v. Hay ward 235 

Alley v. Trenholme 39 

American Bridge Co. v . Heidelback : 105 

Ames v. Trustees of Birkenhead Docks 126, 131, 132 

Anderson v. Duke, etc. , Gold Mine Co ill 

" v.C. P. Ry 268,361, 362 

" v. Fish 316 

Anderson's Case 87 

Anglin v. Nickle 201 

Angus v. Montreal, Portland &= Boston Ry. Co , 16, 17 

Appleyard ex parte 87 

Arbitration between Ontario and Quebec, and Gen. Taylor in re 175 

Arless v. Belmont Manufacturing Co 35, 36 

Armour v. Michigan Ry. Co 29 

Armstrong v. Portage, Westbourne 6 Northern Ry 221 

Arnot's Case 87 

Ashurst v. Mason.... 25 

Ashworth v. Bristol Ry. Co 87 

Athenaeum Life Assr. Soc. in re 1 1 1 

Atkinson?'. G. T. Ry 382 

" v. N. & G. Water Works 366 

Atlantic &= Northwest Ry. Co. v. Bronsden 202 

v. Descarries 175, 203 

v . Dunn 146 

v. Johnson 196 

v. Lavall6e 203, 204 

v. Leeming 188, 212 

v. Prud'homme 212 

v. Trudel 202 

v. Whitfield 203 

v. Wood 2o 

v. Walker 210- 

Attorney Gen. v, Atlantic &* North Western Railway 246 

" v. Grand Trunk Ry 84 

" v. London Tramway Co 1 66, 170 

v. Midland Ry 217 

" v. Mid .-Kent Ry 234 



x THE RAILWAY LAW OF CANADA. 

Attorney Gen. v. M. C. P. Ry. and Trustees of Turnpike Road. . ..82, 253 

Auclair v. Bastien 425 

Auger v. Ontario & Simcoe 6 Lake Huron Ry 268, 402 

Austin v. Guardians of Bethnal Green 222 

Australian Steam Navigation Co. v. Marzetti 222 

Baby v. G. W. Ry. Co 33 

BadgerowT/. G. T. Ry 393 

Bagshaw v. Eastern Union Ry. Co 87 

Bahia 6 San Francisco Ry. C. in re 45 

Bailly v. Richelieu &* Ontario Nav. Co 311 

Baker v. Louisiana Portable Ry 128, 129 

Balkis Consol. Co. v . Tomkinson 45, 46 

Balls'. G. T. Ry 410 

Baltimore, etc., Ry. Co. v. Wilkens 29 

Bank of England v. Hartga .' 49 

" v. Parsons 49 

" v . Lunn 49 

of Montreal v. Sweeny 49 

" -v. Simpson 50 

of Toronto v. McDougall 21 

" i .'. Cobourg, etc., Ry. Co 23,112, 113 

Banque d'Hochelaga v. Garth 36 

" v. M. P. & B. Ry 217, 232 

Jacques Cartier v. Banque, etc., de Montreal 33 

Barham T. Ipswich Dock Commissioners 235 

Barrett v. Pullman Car Co 358 

Barrow's Case 88 

Bartlelt v . West Metrop. Tram. Co 130 

Barry v. Ross 229 

Bate v . Canadian Pacific Ry 297, 361 

Bates v , Great Western Ry 307 

Baxendale v. Bennett 118 

Beal v. South Devon Ry 309 

Beard v. Credit Valley Ry 269 

Beatty v. North West Transportation Co. 21 

Beaudet v. The North Shore Ry. Co i93 } 197 

Beauharnois Jet. Ry. Co. v. Bergevin 77, 145, 216 

" " v. Hainault 145 

Beaumont v. Canadian Pacific Ry . . 306 

Beaver?*. G. T. Ry 283,285, 286 

Beckett v. Midland Ry. Co 179, 180 

Behan v. G. T. Ry 312, 418, 419, 420 

Beliveau ' . Barthe 140 

" v. Clement and Chevrefils 140 

Bell v. City of Quebec 82, 164, 181, 182 

Bender T. Can. Southern Ry 406, 407 

Benner v. Currie 62 

Benning v. All. 6 N. W. Ry. Co 149, 152, 153,156,159,160, 

192, 196, 199, 200 

Benoit v. Benoit 140 

Bergheim v. Great Eastern Ry 349 

Berlinguet v. The Queen 226 

Bernardin v. Municipality of North Dufferin 220 

Bertrand v. The Queen 244 

Bethell v. Clarke 316 

Bettridge v. Great Western Ry. Co 141 



INDEX TO CASES. xi 

Betts v. Williamsburg Ry. Co 155 

Bickford v. Chatham 91 

" v. Grand Jet. Ry 96, 97, too 

Bigaouette v. Noith Shore Ry 179, 184, 193 

Bilbee v. London, Bi ighton ^ S. C. Ry 407 

Birch T. Cropper 70 

Bird's Case 38 

Black v. Baxendale 421 

Blake v.C.P.Ry 384 

Blamires v. L. & Y. Ry 366 

Blanchard v. Windsor & Annapolis Ry 425 

Blanchet v. Charron 148 

Blower v. Great Western Ry 311 

Blumenthal v. Biainard 128 

Blum v. Southern Pullman Car Co 357, 358 

Blyth's Case 88 

Boggs v. Great Western Ry 384 

Booth v. Mclntyre 217 

Boucherville v . G. T. Ry 267 

Bourdeau v. G. T. Ry 388 

Bourdon v. Bernard 82, 249 

Bourgoin v. The M. O. & O. Ry. 192, 195 

Bowenz'. Can. Southern Ry 164, 179 

Bovver v. Peate 235 

Bowie v. Buffalo, Brant & Goderich Ry 319 

Bradburn v. Great Western Ry 425 

Brand v. Hammersmith Ry. Co 85, 166, 167, 168 

' ' v. Schenectady Ry 382 

Brantford, Waterloo 6 Lake Erie Ry. v. Huffman , 230 

Brazier v. Polytechnic Institution 327 

Braugh v. G. T. Ry 307 

Brewster r. Hooker 290 

" v. Mongeau & The Montreal dr 3 Sorel Ry 79, 139, 216 

Brice v . Munro , 53 

Bridge v. G. Jet. Ry. 368 

Bridges v. North London Ry 334, 370 

Briggs v. G. T. Ry 287 

Brigs v. Ry. Co 421, 422 

Bristol 6 Exeter Ry. Co v. Collins 304, 307 

British Bank v. Turquand Ill 

' ' Columbia Saw Mill Co. v. Nettleship 420 

' Farmers Pure Linseed Cake Co 88 

Button v. Great Western Cotton Co 366 

Brodeur v. Corporation of Roxton Falls 164, 180, 181, 248 

Brodie v. Northern Ry 319 

Bronsden et al. v. The City of Ottawa 80 

Brooke v. Toronto Belt Line Ry . . . . 77 

Brown v. Allan 227 

" v. Brockville 6 Ottawa Ry 268 

" v. Can. Pacific Ry .. 322 

" r. Grand Trunk Ry 268 

" . v. Le Maire de Montreal 28 

' ' v. The Ottawa 6 Brockville Ry. Co 32 

" v. The Commissioners for Railways 177 

" v. Toronto 6 Nipissing Ry 256 

Brunell v. C. P . Ry 390, 391 



XII 



THE RAILWAY LAW OF CANADA. 



Brunei v. Montreal & Ottawa Ry. Co 143 

Bruty v. Grand Trunk Ry 344, 346, 347 

Brydges ex parte 28 

Buccleugh, Duke off. Metropolitan Boaid of Works 168, 171 

Buckraaster v. Great Eastern Ry 341 

Buffalo, Brantford & Goderich Ry. Co. v. Parke 64 

Bullw. Bull, 

Bunch v. Great Western Ry . 



201 

352 

Burgess v . Grey 32 

Burke r. Grand Trunk Ry 258, 259 

Burkinshaw v. Nicholls 56, 69, 88 

Burr <-'. Gamble 201 

Burrows v. March 366 

Bury v. Corriveau Silk Mills 27, 33 

Bush in re 205 

Butcher v. London & S. W. Ry 350, 353 

Butler v Manchester, Sheffield Lancashire Ry 285 

Butterfield v. Forrester 368 

Cadwallader v. Grand Trunk Ry 344, 348 

Cahill v. London & North Western Ry 344, 346 

Caledonia Ry. Co. v. Walker's Trustees 82, 165, 178, 179 

Cameron v. Wigle , 140 

Campbell's Case 23 

Campbell v. Grand Trunk Ry 261,297, 46 

" i'. Great Western Ry 402, 406, 407 



*' v. McG.egor 412 

" v. St. Lawrence Sugar Refining Co 390 

Cameron v. Ontario, Huron & Simcoe Ry 2 39> 269 

' ' v. Nystrom 389 

Canada Atlantic Ry. Co. v. Stanton 12 

" " v. City of Ottawa 90 

" " v. Norris 204, 207 

" " v. Mosely 370 

" i\ Moxley 409, 413 

v. Sauve" 417 

Canada Central Ry. v. Murray 26, 27, 32, 220, 224, 230 

" " v. The Queen 90 

Canada Car & Manufacturing Co. v. Harris 42 

Canada Southern Ry. Co. v. Cunningham 199 

v. Clouse 256,257, 259 

v. Erwin , 256 

r. Norval 156, 205 

z'. Phelps 364, 409, 410, 413 

v. Jackson 367, 390, 391 

Canadian Navigalio Co. v. Hayes 345 

Canadian Pacific Ry Co. v. Johnson 329, 331, 332 

' z'. Landry ...'... 242 

v . Pichette 242 

v. Northern Pac. er 3 Manitoba Ry 264 

z 1 . Seminary of Ste. The"rese 190, 2 10 

T'. Major 7, 79 

v. Goyette 331 

v. Pellant 356 

v. Lawson 367, 382 

v . Chateauvert 367, 385 



INDEX TO CASES. xin 

Canadian Pacific Ry. Co. v. Chalifoux 371 

" " i'. Cadieux 374, 375 

. Fleming 380, 383 

" " v. McLaren 413 

" " v. Robinson 425 

Canal Co. v. Archer 186 

Cantin v. The North Shore Ry 139 

Cardinal r 1 . La Cie. du Chemin deFer de Beauharnois 176 

Carleton Branch Ry. v. Grand Southern Co 233 

Carling's Case 88 

Carpenter v. N. Y., N. H. &= H. Ry. Co 357, 359 

Carpue v. L. &= B. Ry 370 

Carron v. Great Western Ry 243 

Casgrain r. Atlantic &* North Western Ry 25 1 

Casey v. C. P. Ry 379, 384, 385 

Caston's Case 55 

Carter v. Molson 33 

Cathedral of Holy Trinity v. The W. O. P. Ry. Co 216 

Cawthra v. Hamilton &* L. E. Ry. Co , 190 

" v. Hamilton dr 3 N- W. Ry .., 215 

Central Vermont Ry. v. Lareau 335 

" " v. Montmagny Insurance Co 417 

Chalifoux v. C. P. Ry 2915, 297, 318, 373, 325, 370, 371 

Chamberlain v. West of Lon. &> Crystal Palace Ry. Co. 178, 180, 187, 238 

Chapman v. Hadson 148 

' ' i'. Great Western Ry 320, 322, 355 

Chappell's Case 44 

Charbonneau v. C. P . Ry 306 

Charitable Corporation v. Sutton 25 

Charlebois v. G. N. W. Cent. Ry. Co 100,101, IO2 

Chassmore v. Richards 183 

Chartierz'. G. T. Ry 306 

Chester v. Man., Sheffield, etc., Ry- 323 

Chewett v. G. W. Ry . 213 

Chicago & Alton Ry. Co. v. Willard 286 

" &= N. W. Ry. v. City of Chicago 257 

Childs v. New Haven dr 3 Northampton Ry 155 

Christie v. Griggs 323, 325 

Christin v. Union Navigation Co 41 

City Bank v. Barrow 166, 275 

" v . Cheney no 

City of Glasgow Union Ry. Co. v. Hunter 167,168, 171 

" of Dublin Steam Packet Co. v. Midland, G. W. Ry 279 

' ' of Montreal v. Labelle 425 

" of Three Rivers v. Lessard 82 

' ' of Toronto v. Leak 200 

Clarke v. London School Board 185 

" z>.G.T.Ry 213 

Clark v. Chambers 366 

Clayes v. Darling 65 

Cliff ?'. Midland Ry 407 

Cobbans. C. P. Ry 282, 297, 301, 310 

Cockburn v. Starnes 55 

" v. Tuttle 55 

" v. Beaudry 42, 59 

Coggs v. Bernard 295 



xiv THE RAILWAY LAW OF CANADA. 

Cohen v. Wilkinson 87 

Cole v. Ryan 44 

Collard v . South Eastern Ry 422 

Collins v. New York Central 6- H. R. Ry 412 

" v. M. L. Commissioners 366 

Colonial Bank v. Williams 50 

Commercial Bank of Canada v. Gr N. W. Ry. Co .. . . . 1 1 i," r 1 19 

Compagnie duCh. deFer Centrals. Legendre 139, ^216 

" des Wagons- Li ts v. Epoux Barthelemy 360 

' ' du Grand Tronc v. Huard 7 

Conger v. G. T. Ry 267 

Connecticut v. Ohio, etc. , Ry. Co 29 

" dr 3 Passumpsic Ry. Co v. Comstock 40 

Connelly v. Great Northern Ry . 311 

Connors i<. G. T. Ry 402 

Conway v. C. P. Ry 399 

Cooley v . Grand Trunk Ry 405 

Cooper v. Young 422 

Coiner v. Bird , . 372 

Cornman v. Eastern Counties Ry 334, 402 

Corporation du Comte d'Ottawa v. Q. M. O dr= O. Ry. Co 15 

" of Parish of St. Liboire z- G. T. Ry 245, 254 

" of Parkdale r. West 77,82,161,178,249, 216 

" of St. Joseph v. Quebec Central Ry , 5 

" of St. Valentin v. Comeau 245 

" of Tingwick v. G. T. Ry 244, 269 

" of Township of Pembroke v. Canada Central Ry 246 

" of County of Welland v. Buffalo & Lake Huron Ry 217 

" of Ottawa v. Montreal, Ottawa & Western Ry 423 

" City of St. Thomas v. Credit Valley Ry 91, 424 

" of Pontiac v. Hon. J. G. Ross 93 

' ' of Town of Barrie v. Northern Ry . Co 81 

" of Roxton Falls v. The South Eastern Ry. Co 164 

" of the City of Quebec v. Quebec Central Ry. Co 96, 1 18 

" of County of Drummond v. South Eastern Ry. Co 102 

" of Lanark and Renfrew v. Cameron no 

Corry v. Londonderry, etc., Ry. Co 70 

Cossette r. Leduc 392 

Cote v. Stadacona Insurance Co 39, 60 

Couch v. Grand Trunk Ry 366 

Grafter v. The Metropolitan Ry 334 

Craig v . Great Western Ry 287 

Crawford v. Cincinnati Ry 286 

Credit Valley Ry. Co. v. G. W. Ry 82, 264 

Crevier v. Ontario & Quebec Ry. Co 258 

Crewson v. G. T. Ry 187, 238, 239 

Crickmer's Case 88 

Crocker v- Old Colony Ry. Co 46 

Croft v. London 6- N . W. R. Co 187, 238, 242 

Crofts v. Waterhouse 323, 327 

Cross v. C. P. Ry 406 

Crowe v. Steeper 399 

Cunningham r. G. T. Ry. Co . 31, 287, 389 

Cure of St. Anne v . Ottawa & Quebec Ry , 198, 200 

Curran v. Grand Trunk Ry 376 

Currie v. Couture 374 



INDEX TO CASES. xv 

Curry v. C. P. R 337 

Curwin v. The Windsor 6 Annapolis Ry. Co 336 

Curtis v. G. T. Ry 283, 426 

Cutting v. Ry. Co 421 

Daly v. Cunningham 150 

Daoust v. La verdure 376 

Dancey v. G. T. Ry , 283, 426 

Daniels v. Directors, etc., of Met. Ry. Co 32, 326 

" v. Potter 366 

" v. Grand Trunk Ry 399 

" v. Hart 121 

Darlaston Local Board v. London 6 N. W. Ry 279 

Darley Main Colliery Co. v. Mitchell 187, 269 

Darnley, Earl of z>. L. C. dr> D. Ry. Co , ... 150 

Davey v. London & S. W. Ry 384 

" v. London &> North Western Ry 380 

Davidson v. Grange 18 

" v. Canadian Shipping Co 348, 357 

Davis v . Gray 128 

Davis v. The Railroad 347 

" v. G. W. Ry 287 

" v. C .P. Ry 399 

Davies v. Mann 368 

Dawson v, Manchester, Sheffield, etc., Ry 323 

" v. Trestler 409 

Day -v. Town of Guelph in re 82, 246, 25 1 

DeBlois v. The Queen 256 

Delano's Case 57 

Delaware, Lack. & West Ry. v. Erie Ry. Co 128 

Deming v. Ry. Co = 421 

Denaby Colliery Co. v. The Manchester, etc., Ry. Co 275 

Denham dr" Co. in re 25, 71 

Delorme v. C. P. Ry 312 

Denison v . Leslie 57 

Denton v . The Great Northern Ry 340 

Desrosiers v. M. P . 6 B . Ry . Co 95 , 113 

Desy v. C. P. Ry 406 

Desroches v. Gauthier 377 , 392 

Desrousseau v. Boston & Maine Ry 385 

Deverill v. G. T. Ry 389 

Devlin v. G. T. Ry 307 

DeWinton v. Mayor of Brecon 127 

Dionne v. C. P. Ry 306 

Dixon v. Evans 55 

Dixon v. Richelieu Nav. Co 362 

' ' v. Richelieu &> Ontario Navigation Co 345 

Dobell v. Ontario Bank 225 

Dodge v. Windsor & Annapolis Ry 422 

Dolrey v. Ont , Simcoe 6 Huron Ry 399 

Dolsen re 140 

Dominion Oil Cloth Co, v. Coallier 377, 390 

Doran v. G. W. Ry 223 

Douglas v. G. T. Ry 399 

Dowes v. Ship 58 

Dresser v . Norwood 33 

Drinkwater v. Deakin 18 

Drummond v. Holland 129 



xvi THE RAILWAY LAW OF CANADA. 

Dublin, Wicklow, etc., Ry. v. Midland G. W. Ry 279 

Dublin, Wicklow, -> Waterford Ry. v. Slattery 369, 370, 381 

Dubuc 'v. Montreal &* Sorel Ry . 259 

Duff v. Great Northern Ry 342 

Duffy v. Thompson 348 

Dukez/. G. W. Ry 283 

Duke of Buccleuch v. Metrop. Board of Works. . ..168, 171, 178, 187, 195 

Dumble v. The Peterborough 6 Lake Chemong Ry. Co 63 

Dunaberg 6 Witipsk Ry. v. Hopkins 227 

Duncan r. C. P. Ry 406, 407 

Dunlop v . Canada Central Ry 140 

" v. Township of York 214 

Dunstan v. Insp. Gas Co 25 

Dussault v. North Shore Ry 415 

Eddy The 322 

Eagle z: Charing Cross Ry. Co 166, 185 

Earl of Darnley z\ London, Chatham & Dover Ry 150, 198 

East and West India Dock &" Birmingham Jet. Ry. v. Gattke 188 

Eastern Townships Bank v. Municipality of Compton .... 112 

Eaton v. European 6 North. Ry. Co 31 

" v. The Railroad Co 331 

Edgar and Wife v. The Northern Ry 334 

Elbinger Actien Gessellschaft v. Armstrong 422 

Ellis v. Sheffield Gas Consumers Co 32, 234 

" v. The Midland Ry , 223, 225 

Erbz/.G. W. Ry 29 

Essex T. Local Board of Acton 168 

Etherington v. Wilson 18 

Evans z\ Atlantic $r N. W. Ry. So, Si, 154, 185 

" v. Coventry 125 

Evershed v. North West Ry 276 

F. Street in re 186 

Fairbanks ?-. O'Halloran 17 

" v. Great Western Ry 249, 253 

Falconer v. The Queen 176 

" z 1 . European 6 North American Ry 369, 402 

Farlinger 6 The Village of Morrisburg in re no 

Faimer v. McNeil 150 

Faucher r. North Shore Ry 386 

Faure Electric Accumulator Co 24 

Featherston r. Cooke 126 

Fellowes v. Ottawa Gas Co 1 15 

Ferrie v. Great Western Ry 289 

Fero 7 f . Buffalo, etc., Ry 412 

Ferris z 1 . Grand Trunk Ry 404 

Field v. Galloway 62 

Firth r p . North Eastern Ry 353 

Fitch v. Newberry 291 

Fitzgerald v. Midland Ry 341 

Fitzherbert r 1 . Mather 33 

Fitzpatrick r. Gieat Western Ry 365 

Flannigan z: C. P. Ry 410 

Fleckner r. U. S. Bank 222 

Fleming and Wife v. Newport Ry 82, 82, 165 

Flitchcrofi's Cse 25 

Florida r. Pullman Car Co 358 



INDEX TO CASES. xvn 

Forbs v. Boston, etc., Ry 420 

Ford v. Metropolitan Ry. Co 185 

' ' v. London 6 South Western Ry 325 

Fordyce v. Kearns 409 

Foreign Gas Co. re 88 

Fosdick v. Schall 135 

Foster 6 Great Western Ry. in re 2 1 1 , 215 

Foucher z p . North Shore Ry 375 

Fouchon v. Ontario &> Quebec Ry 397, 426 

Fountaine v. Carmarthen Ry. Co in 

Fowles v. Great Western Ry 308 

Foy v. London, Brighton 6 S. C. Ry 326 

Francis v. Cockerell 326, 327 

Fraser v. Robertson 67 

Frederick v. Marquette 286 

Freeman v. O. 6 Que. Ry 201 

Fuller r-. Grand Trunk Ry 388 

Fulion v. G. T. Ry 283 

Furness r. Caterham Ry 125 

Gagnon ?'. Forsythe 374 

Gagg -<.'. Vetter 386 

Galbraith v. Walker 150 

Gallin T. London &= N. W. Ry 342, 343 

Gait v. Erie, etc., Ry 101, 130, 217 

Galveston Ry. Co. v. Cowdrey 105, 106 

Gamble T. Great Western Ry 350, 352 

Gardner 7'. London, Chatham &* Dover Ry. Co 101, 127, 130 

Gai rctt f . Salisbury &* Dorset J ct. Ry 226 

Garside v. The Proprietors of the Trent & Mersey Nav. Co 320 

Gaskell v. Chambers 24 

Gauthier v. C. P. Ry 305 

Geauyeau v. G. W. Ry 78 

Geddes?'. The Toronto Street Ry- Co ill, 1 12 

Gee v. Metropolitan Ry 326, 368 

Gei main v. Montreal dr 5 New York Ry 267 

Gibson v. Mu?kett 426 

Gilbert's Case , 44 

Gilley v. Miller 149 

Gillies i>. Great Western Ry 399 

Gillingham v. Dempsey 420 

Gilman v. 111. > Miss. Tel. Co 105, 106 

" v. Robertson 15, 17 

' ' v. Robertson 6 The Royal Can. Ins. Co 15, 67 

Gingras v. Desilets 425 

Glasgow e London Ins. Co. v. C. P. Ry 409 

Glasier v. Rolls... 70 

Glass v. Hope 66 

Glover v. North Staffordshire Ry. Co 185 

Goff v. Great Northern Ky 289 

Goodf-rham & . Toronto &> Nipissing Ry. Co 133, 135 

Goodwin v. Ottawa & Prescott Ry . , 48 

Gordon v. G. T. Ry 307 

Gosselin r G. T. Ry 78 

Government of Newfoundland v. Newfoundland Ry . Co 233 

Grace v. Adams 303 

Graham r. Toronto, Grey &> Bruce Ry 31, -33O 



XVIII 



THE RAILWAY LAW OF CANADA. 



Graham v. Birkenhead Ry 87 

" v. Great Western Ry 387 

Grand Junction Ry . Co. v. Midland Ry. Co 74 

Grand Trunk Ry. Co. v. Corp. of Peterborough 92 

" " v. ex parte 28 

" i>. Corp. of Levis 1 10 

" " v. Credit Valley Ry 138 

" v . Eastern Townships Bank 108 

v. Fitzgerald 30 

v. Miville 82, 83 

v. Webster 46, 424 

v. Bpulanger 336, 367, 371 

v. Fitzgerald 313 

v. Godbout 249, 383 , 384 

v. Gutman 318 

v. Huard 255, 256 

v. Huston 319 

i'. McMillan 305 

v. Miville 242 

v. Mountain , 313, 319 

T-. Sibbald 245, 366,382, 385 

v. Beckett 367, 384, 425 

v. Rosenberger 364, 366, 367, 382, 384 

v. Vogel : 361 

i 1 . Tremayne 366 

v. Wilson 370 

v. Richardson 412 

v. Meegan 415, 416 

v. Jennings 424 

Grant v. Northern Pacific Ry 305 

Great Laxey Gold Mining Co. v. Clagis 1 74 

Great-Luxembourg Ry. Co. v. Magnan 24 

Great Northern Ry. v, Harrison 332 

" " v. Hawcroft 340 

" " ^.Shepherd 345 

Great Western Ry. v. Brown 387 

' " v. Bunch 360, 350 

" v. Braid , 370, 323, 326, 327 

" v. Baby 193, 196 

" v. Chauvin in re 196 

v. Uodds 196 

v. Hunt 194 

v. Laderonte 192 

' &. Miller 190 

v. Rolph 193 

v. Crawford 290 

v. G. T. Ry 279 

b. Willis 314 

v. Sutton 273 

v. McCarthy 300 

Gray v . Johnston 49 

Greenland v. Chaplin 364 

Grebert Borgius 7 r . JN ugent 422 

Grenier v. City of Montieal ' 269 

Grimes r. Harrison 25 

Giiffin T'. Great West. Ry. Co 30, 314. 



INDEX TO CASES. xix 

Grimshaw v. Grand Trunk Ry , 190 

Grote v. Chester & Holyhead Ry 327 

Groulx v. Wilson 292 

Groulx v. C. P. Ry 406 

Guilbault v. McGreevy 226 

Gunn's Case 37 

Gwatkin v. Harrison . . . , 53 

Hackett v. Ry. Co 422 

Hadley v. Baxendale 418 

Halcrow v. Lemesurier 311 

Haley v. Chicago &> North Western Ry 286 

Haldan v. Great Western Ry 337 

Halifax Sugar Refining Co. re 88 

Hall v. McFadden 337. 368 

" v. North Eastern Ry 342 

" v. G. T. Ry 319, 353 

" v. Can. Copper, etc., Co 388 

Hallmark's Case 25 

Hamilton & Port Dover Ry. Co. v. The Gore Bank 27, 33, 223 

' v. Hudson Bay Co 4'9j 4 20 

" v. R. R. Co 422 

" v. McGill 422 

" v. Transit Co 126 

" v. Wilson 201 

" & Brock Road Co. v. Great Western Ry 255 

v. Grand Trunk Ry 307 

Hamlin v. Great Northern Ry , 339, 341 

Hammersmith Ry. Co. v. Brand ,.. 170, 172 

Hammock v. White 402 

Hampton v. Pullman Palace Car Co 358 

Hanlon v. S. B. of H. Ry 366 

Harden v. Phillips 23 

Harew. London 6 N. W. Ry 279 

Harris' Case .... 37 

Harris v. Dry Dock Co 60,63, 66 

" v. Edmonston 297 

" v. Great Western Ry 303 

Harrison v. Mexican Ry. Co 89 

Harrold v. Great Western Ry 334 

Hart v. Jones 297, 314 

" v. Penn. Ry. Co 301 

Harvey v. Harvey 59 

" v. C. P. Ry 333 

Hatton v. M. F. dr> B. Ry. Co 16, 19, 20 

Hawkins v. Bourne 32 

" v. Great Western Ry 311 

Hayes v. M. C. Ry 366 

Heaven v. Fender 363 

Heazle v. Indianapolis Ry 323 

Hebb's Case 37 

Hegeman v. The Railway Co 327 

Henderson v. Stevenson 343 

Hendrie v. Grand Trunk Ry 1 16 

Henry v. C. P. Ry 314 

Hei rick v. Central Vt. Ry 226 

Herring v. Napanee, etc. , Ry . Co 194, 199, 2co 



xx THE RAILWAY LAW OF CANADA. 

Herring r. Melrop ; Board of Works 180, 184 

Hewitt 7'. Ontario ,*Simcoe &" Huron Ry 410 

Hibbard?'. New York &> Erie Ry 286 

Hill &. M. S. Ky 29 

" T/.G.T. Ry 259 

" z: Ontario, Simcoe & Huron Ry 413 

Hillyardr. G. T. Ry 262 

Hirsche r. Sims 68 

Hitchins v. Kilkenny Ry. Co 52 

Hobbs -c'. Lond. 6 S. W. Ry 365, 289, 339, 341 

Hochelaga Bank v. M. P. & B. Ry. Co 102 

Hodgson v. The Earl of Powis 87 

Hodkinson r . London &* N. VV. Ry 321, 353 

Hodges v. The Railway Co 322 

Hogan r. Dorion 29 

" v.G.T.Ry 319, 353, 354 

Hole T\ Sittingbourne, etc., Ry. Co 32 

Hollinger r. C. P. Ry 384 

Holmes r. Moore 355 

Hooier 2'. The Eiie & Huron Ry. Co. in re 190 

Hopkins v. Great North Western Ry. Co 185 

Home z\ Midland Ry. Co 418, 421, 422 

Horseman v. G. T. Ry ; 313 

Hotchkiss v. Hall , 201 

Household Fire Ins. Co. v. Grant 37 

Howard's Case 40 

Howe v. The H. &> N. W. Ry 251, 3*67 

Hoyt v. Quicksilver Mining Co 89 

Hudson z: Midland Ry. Co , 346, 348 

" T<.L.d-N. Ry 383 

Hughes z\ Canada Permanent Invest. Soc 221 

" v. Perci val 235 

" r. McFie 366 

Huntsman v. G. W. Ry 426 

Hurd v. Grand Trunk Ry 401 

Hurdman r. Can. Atl. Ry 39> 393 

Hutchinson r. Guion 314 

" v. C P. Ry 323, 329, 331 

Illidge T. Goodwin 366 

Illinois Central Ry. v. Willenborg 257 

" " v. Copeland 348 

Imperial Hydropathic Hotel Co. v. Hampson 23 

Inderwick T'. Snell 23 

Indianapolis Ry. Co. z 1 . Horst 323, 325 

Ingersoll e The Thamesford Gravel Road Co. v. McCarthy 59 

Ingledew v, Ry. Co 421 

Inman r. Buffalo d-= Lake Huron Ry 319 

Ingalls v. Bills 323, 326 

Ionic, The 348 

Iron Ship Coating Co. v. Blunt 22 

Jack I-. Ontario, Simcoe dr Huron Ry. Union Co 407 

Jackson v. N. C. & St. L. Ry , 364 

" v. Metropolitan Ry 370 

James v. The O. 6- Q. Ry. Co 76, 156, 160 

Jameson v. Midland Ry 418 

Jasmin v. C . P. Ry 263 



INDEX TO CASES. xxi 

Jasmin r. O. 6 Q. Ry 397 

Jeffrey v. Can. Shipping Co 305 

Jenkins T. Wilcock 52, 53 

' i'. Central Ontario Ry 210, 215 

Jennings;: 1 . G. T. Ry 329 

Jerome v. Smith 286 

Jessup v. Grand Trunk Ry 78 

Jodoin v. South East Ry 414 

Johnson v. Toronto, Grey <S Bruce Ry 115 

" v. Lafflin 44 

" T. Lindsay 389 

" v. Montreal Jet- Ry 233 

v. Northern Ry . 384, 385 

Joint Stock Discount Co. v. Brown 25 

Joly i'- Moreau 145 

Jones v. Eastern Townships Mutual Fire Ins. Co 21, 24 

1 v. G. T. Ry 336, 366, 367 

< v. The Queen. 226,227, 228 

' v. Boyce 368 

' v. Laurent 150 

' v. Montreal Cotton Co 40 

' v. Municipality of County of Albert no, 1 1 1 

' v. Prentice 1 50 

' v. Stanstead Ry. Co. 162,164,166,167, 185 

Judah v. City of Montreal 164 

" v. Atlantic &= North Western Ry 203, 215 

Kane r. Montreal Tel. Co 71 

Kansas City Ry. Co. v. Morrison 34 7 

Karnes v. Rochester, etc. , Ry . Co 70 

Kellog f. Chicago &* N. Ry 411 

Kelleit t: G. T. Ry 319, 353, 354 

Kelly v. Ottawa Street Ry 268 

" H. &*St.J. Ry 366 

Kendall v. London 6 S. VV. Ry 310 

Kerr v. Atlantic <&= N. W. Ry 236, 269 

" v. Penn. Ry. Co 410 

Keys v. Quebec Fire Ins. Co 24 

Kingsley v. Lake Shore Ry 359, 360 

Kimberly v. Dick 227 

Kingston &* Pembroke Ry. Co. v. Murphy 77,80,210, 214 

Kirby'sCase 88 

Kirby ?'. Lewis 426 

Kirkland v. Dinsmore 303 

Knapp v. Great Western Ry. Co 187, 238, 241, 269 

Lake superior Navigation Co. i'. Morrison 38 

Lambe v. Montreal 6 Sorel Ry. Co 126 

Lambert r. Corp. of Three Rivers 82, 247 

" v. Neuchaiel Asphalt Co 71 

" T. Grand Trunk Ry 402 

Lambkin v. South East Ry 3 6 5 J 37 I 4 2 S 

Lancashire &* Yorkshire Ry. v. Evans 187, 238 

" " " v. Mayor 6 Corporation of Bury. . .250, 253 

Land Credit Co. of Ireland v. Lord Fernoy 25 

Landry v. North Shore Ry 261 

Langdon v. Robertson 289, 421 

Langevin v. C . P. Ry , . 406 



xxn THE RAILWAY LAW OF CANADA. 

Lapointe v. C.P.Ry 31 

v.G.T.Ry 307 

Lavalle"e r. Atlantic & North Western Ry 204 

Laviolette i>. Thomas 29 

Lavoie v. Drapeau 390 

Lawrence r. Greenwich Fire Ins. Co 126 

" v. Great North Western Ry. Co 174, 187, 238, 240 

Lawson v. Hutchinson 201 

Lea re 212 

Leader r. The Northern Ry 319 

Leaf v. Canadian Shipping Co 291 

Le Barren v. E. B. F. Co 326 

Le Blanche v. The London 6 N- W. Ry 339, 341 

Lee v. Victoria Ry. Co 131, 135 

" v. Neuchatel Asphalt Co .... 71 

' v. G. T. Ry 346 

Leeds Estate Co. v. Shepherd 25 

Leeming T'. Atlantic & North Western Ry 188 

Lefebvre v. City of Quebec 164, 248 

Legge v . The Laurentian Ry 224 

Leigh c'. Smith 30, 314 

LeMay v. C. P. Ry 395, 396 

Lemoine r. City of Montreal ....'. 204 

Leonard v. C. P. Ry 416 

Lesperance v. Great Western Ry 187 

Lever t r . Land Securities Co 71 

Levi z>. Reed 425 

Lewis v. Brady 1 10 

" v. London, Chat. & Dover Ry 334 

z>.G.\V. R 238, 239 

Lincoln Paper Mills Co. z\ St. Catharines 6 Niagara Ry 217 

Livingston z 1 . G. T. Ry 287 

London, Brighton d^ S. C. Ry. v. Truman. 84, 85, 144, 165, 166, 168, 170 

" Celluloid Co. re 87 

" Tilbury & South End Ry. Co. v. Gower's Walk Schools 169 

Louden v. Taxing District 423 

Lord G^raid r. The Lond. 6" North Weste rn Ry 178 

Lord Provost of Glasgow z>. Farie 177 

Lovell v. London, Chat . & Dover Ry. Co 351 

Louisville 6 Nashville Ry. v. Fleming 286 

" etc , Ry. Co. v. Spain 403 

Lyons v. Hoffnung 316 

Lyon v. Fishmongers Co 178, 183 

Lynch v. Nurdin 366, 369 

Lyman v. Peck 184 

MacBeth v. Smart 6 1 

MacDonald v. Presant 200 

" r. Montreal &> New York Ry. Co 47 

'' T'. The Mayor, etc., of St. John 288, 334 

MacFarlane v. Corp. of St. Ce"saire 112 

Macfarlane v Gilmour 389 

MacLean r. The Niagara Falls Park 205 

MacMullen v. Cayley 201 

MacMurrick v. Bond Head Harbor Co 21, 42, 47 

MacRae v. C. P. Ry 272 

MacWillie v. North Shore Ry 166 



INDEX TO CASES. xxm 

Me Arthur v. Northern ^Pacific Jet. Ry. &* Hendrie 81, 268 

McCaffrey v. C. P. Ry 344.348, 353 

McCallum v. G. T. Ry 268 

McCarron i> McGreevy 226, 227, 228 

McCarthy v. Dublin, etc., Ry 285 

McCawley v. Furness Ry. Co 342 

McCracken v. Maclntyre 56 

McCrossen v. G. T. Ry 320 

McDougall v. McGreevy 423 

McFadden v. Missouri P. Ry 303 

McFie v. C. P. Ry 402 

McGibbon v. Northern Ry 411 

McGillw. G. T. Ry 314 

" v. Grand Trunk Ry 421 

McGillivray r. Great Western Ry 187, 238, 239, 243, 269 

McGinney v. C. P. Ry 333, 334 

McGreevy v . Boomer 226 

McGregor v. Currie 62 

Mclntosh v. Commissioners of Court House at Halifax 223 

" T'. Grand Trunk Ry 399 

" v. Great Western Ry 227 

McKay v. Lockhart 319 

McKenna v. N. Y. Cent. & H. R. Ry 401 

McKenziew. C. P. Ry 398 

McKenzie v. Kitti idge 51 

McLaren v. Can. All. Ry 413 

McLauchlin v. G. T. Ry 260, 394, 395 

McLellan v. Grand Trunk Ry 399 

McManus v. Lancashire dr 3 Yorkshire Ry 310 

McMichael v. G. T. Ry 262, 263 

McMillan v. Grand Trunk Ry 307, 308, 355 

" v. Manitoba &* N. W . Ry 260, 402 

" v. Michigan South 6 North Indiana Ry 322 

McPadden v. New York Central Ry 323 

Macrow v. Great Western Ry 344, 346, 347 

Madden v. Cox 93 

Magog Textile 6 Print Co. v. Price 36, 40 

" " v. Dobell 36 

Maguire v. City of Montreal 372 

Malhiot v. Burroughs 210 

Manchester Ry. v. Brown 300 

Mangan v. Atterton 369 

Manitoba Railway Crossings Case 265 

Marcheterre v. O. & Q. Ry . . 267 

Margette v. Williams 423 

Markhaui v. Great Western Ry 405 

Marmora Foundry Co. v. Boswell 66 

" v. Jackson 66 

" v. Murray 66 

Marshall v. Grand Trunk Ry 267 

Mason v. South Norfolk Ry 216 

" v. Grand Trunk Ry 307, 319 

Masterton v. Mayor of Brooklyn 419 

Massawippi Valley Ry. Co. v. Walker 40 

Massey Manufacturing Co. , The in re 14 

Mathews v. Great Northern Ry 89 



xxiv THE RAILWAY LAW OK CANADA. 

Mathieu v. Q. M. dr> O. Ry 186 

Matthews v Hamilton Powder Co 389 

May v. Ont. &> Que. Ry 268 

Mayer v. Grand Trunk Ry 303, 319 

Mayor of Montreal v. Drummond 163, iSl 

Mead v. Township of Etobicoke 249 

Mechanics Society in re 128 

" Whale Fishing Co. v. Kirby 223 

Meek v. Penn. Ry. Co 366 

Meier v. Penn. Ry. Co 323 

Merchants Despatch Co. v. Hately 30?, 309 

Mersey Dock Trustees f. Gibb , 365 

Mersey Docks v. Lucas 70 

Merrill v. Grinnell , 348 

Metropolitan Ry. Co. v, Jackson 364, 365 

Metropolitan Board of Works v. McCarthy 179, 180 

" District Ry. Co. v. Sharpe 21 

Michigan Central Ry. v. Myrick 304 

Midland Ry. Co. v. Young 140, 142 

" " z. Cribble 258 

" " v. Rev. Sir F. L. Robinson 177 

Miller v. Great Western Ry. Co 193 

" v. Grand Trunk Ry 242,384, 385 

' f i'. Great Repub. Ins. Co 44 

" v. Hogg 150 

" v. Rutland & Wash. Ry. Co 120 

Milligan v. Grand Trunk Ry 313 

Mills v. Atlantic dr> N. W. Ry 150, 197 

" v. Northern Ry. of Buenos Ayres 70 

" v. Stewart 67 

Milot v. Perrault 16 

Miner v. Gilmour 182, 183 

Minnesota Co. v. St. Paul Co 108 

" Central Ry. v. McNamara 155 

Mistner r. Mich. Cent. Ry 396 

Mississippi Ry. Co. v. Kennedy ....,, 348 

Mitchell v. Darley Main Colliery Co 235 

Moffatt v. Farquhar 44 

Moffette v. Grand Trunk Ry 368,369,371,380, 382 

Moggy v.C.P. Ry 385, 386 

Moisan -v. Great Western Rv 243 

Molson's Bank v. Stoddart 59 

Mongenais v. Allan 310 

Montreal & Ottawa Ry. Co. v. Bertrand 204 

" " r. Castonguay 204 

Montreal City District Savings Bank <:'. Geddes 71 

' City Pass. Ry. Co. 7 r . Dufresne 3^9, 377 

Montreal & Soiel Ry. Co. v Vincent 210 

" O. 6- O. Ry. Co. v. St. Denis 195 

" U. & O. Ry. v. St. Denis 199, 200 

" Portland &* Boston Ry. v. Banque d'Hochelaga 96, 114 

Moore t'. Central Ontario Ry 190 

" z>. Kirkland 52 

" v. McLaren 44, 45 

' ' v. The Poit Bruce Harbor Co 15 

" v. The Great South & Western Ry. Co 179 



INDEX TO CASES. xxv 

f. Atlantic & N. W. Ry. Co 31, 399 

" v. The Queen 239, 242, 244 

Morrison v. G. T. Ry 96, 102, 126 

v. Rich. dr= Ont. Nav. Co ^52 

v. Phillips & Co 303 

v. City of Montreal 204 

v. Mayor of Montreal 204, 18 1 

v. Davis 411 

Moulson v. Eyre , 149 

Moynaugh v. Angus 184 

Mudford's Claim ; 87 

Muir v. Caledonia Ry. Co 166 

Municipal Corp. of Vestra and Sunnidale v. Realty 43 

Murdock v. Woodson 120 

Murphy v. La Cie. des Remorqueurs du St. Laurent 17 

" v. City of Ottawa 236 

Murray v. Vanderbilt 126 

" z>. Grand Trunk Ry , 292 

" v. S. E. Ry 328 

Muschamp v. Lancashire &* Preston Ry 304 

Mussen v. Canada Atlantic Rv 206 

Myatt v. St . Helen & R.'G. Ry 103 

Mytton v. Midland Ry 308, 344, 348 

Nashville &* Pecatur Ry. v. Jones . . . . 327 

Nasmith't 1 . Dickey 53, 62 

v. Manning 35, 36, 37, 39, 56 

Natchez, etc., Ky. Co. v. McNeil , 326 

National Funds Assurance Co. in re 25 

' c Insurance Co. v. Chevrier 40 

" v. Hatton 41 

" Telephone Co. v. Baker 85 

Nehan v. St. Catharines Ry. Co. 191 

Nelson v. Hudson River Ry , 310 

New Brunswick Ry. Co. v. Vanwart 367 

" " z.'. Armstrong 402 

' ' v. Robins 402 

' v. Robinson 4H) 412 

New Chili Gold Mining Co 88 

New Clydock Sheet <&> Bar Iron Co. in re 105 

Newhaven Loc. Board v. Newhaven School Board 20 

New Orleans Ry. Co. v. Faler , .... 326 

New York Elevated Ry. Co. in re 74 

" Central Sleeping Co. v. Donovan 288 

Nichol v. Canada Southern Ry 32, 187, 238, 239, 241 

NichoPs Case 88 

" v. Great Western Ry 385 

Nitro Phosphate Co. v. L. 6f St. K. Docks Co 365, 366 

Nixon v. Brownlow 59 

" v. Grand Trunk Ry 406 

Nolton z 1 . Railroad Co 329 

Norris v. Canada Atlantic Ry 206, 207 

North Shore Ry . Co. v. Beaudet 149, 192, 193 

" " v. H6pital du Sacre"-Cceur 193 

" " i\ Les Ursulines tie Quebec 153, 192 

fi " v. Pion 162,163,166,179,182, 184 

'< v. McWillie ., 416 



xxvi THE RAILWAY LAW OF CANADA. 

Northern Pac. Ry. Co. v. Grant 314 

Norton v. Eastern Ry 383 

North West Transportation Co. v, Beatty 21 

Norvall v. C. S. Ry 196, 199, 2Co 

Norway Plains Co. v. Boston d- 5 Maine'_Ry 321 

Nott v. Nott 201 

Nova Scotia Central Ry. Co. z>. Halifax Banking Co 121, 122 

O'Brien v. Credit Valley Ry 33 

O'Connell v. Frigon 150 

O'Neill v. Great Western Ry 319 

O'Reagan v. Cunard S. S. Co 303 

O' Rourke v. Great Western Ry 29, 303 

O'Sullivan r. Victoria Ry 389 

Oakbank Oil Co. v. Crum 69 

Oakes v. Turquand 57, 59 

Oaks v . City of Halifax 149 

Oldwright v. Grand Trunk Ry 335 

Oliver v. Great Western Ry 29 

Ontario Maiine Insurance Co. v. Ireland 66 

" Car Co. v. Farwell "07 

" " z 1 . Quebec Central Ry 102 

Ontario d^ Quebec Ry. Co. v. Cure's, etc , de Ste. Anne, etc 149, 198 

" " 7'. Latour 152 

" " r. Philbrick 209 

" " v. Taylor 160 

Ontaiio d- 5 Sault St. Marie Ry, Co. v. C. P. Ry 9, 74, 77 

Ontario Express d^ Tvans. Co. v. Grand Trunk Ry 281 

" Co-operative Stone Cutters Association v. Clarke 224 

Ooregum Mining Co. v. Roper 68 

Osier v. Toronto, Grey &> Bruce Ry I r 4 

Ostell v. Joseph 150 

Ouimet v .Can. Express Co 312 

" v. Henshaw 353 

Overend, Gurney &> Co. z\ Gibb 25 

Owen Sound S.S. Co. v. C. P. Ry. 279 

Pacific Ry. Co. r. Thomas 27 

Packard <. C. P. Ry 345, 362 

Page v. Austin 14, 53, 58 

Paige v. Smith 128 

Paine v. Woods 155 

Paint Z-. The Queen , 158, 175, 177 

Palin r 1 . Reed 355 

Paradis z>. The Queen 212, 1 60, 1 66,' 177, 184 

Parana, The 419 

Parish of St. Liboire v. Grand Trunk Ry 245 

Parish of St. Ce'saire i<. MacFarlane 92 

Parker r. Lewis 25 

" z<. McKenna 24 

" z 1 . Montreal Street Ry 252 

" z 1 . S . E. Ry 303, 344 

Parks 7-. City of Boston 186 

Parsons z'. Jackson .'13 

Partridge z\ Great Western Ry 244 

Patscheider r. Great Western Ry 353 

Patterson r. Davidson 292 

" z\ Great Western Ry 269 



INDEX TO CASES. xxvn 

Patterson v. Buffalo &> Lake Huron Ry , 217 

Peart v. Grand Trunk Ry 383, 384 

Peck v. Harris 184 

tf v . North Staffordshire Ry 298, 303 

Pellant v. C. P. Ry 355> 35 6 

Pellatt's Case 37 

Pembrooke r. Can. Cent. Ry 251 

Pendlebury f . Greenlagh 32 

Pennsylvania Ry. Co. v. Ccnnell 288 

" " 7'. Kerr , 411 

" " v. Barnett 383 

Penny Re , 184 

Penny ex parte 43, 184 

Penton r. Grand Trunk Ry 353, 355 

People r. N. Y. Central, etc., Ry 386 

Periam i<. Dompierre 372 

Perrault v. C. P. Ky 283, 284 

" 7>. Milot 14 

Peterborough Ry. Co. v. Nashua 6 L. Ry. Co 68 

Peters v. Que. Harbour Commissioners 226, 227, 228 

Peto 7'. Welland Canal Co 125, 12 >, . 129 

Phelps f. Lyle 20 

" v. The St. C. & N. Ry. Co 101 

Phil . &> Sunbury Ry. Co. v. Lewis ill 

Phillips 7. C. P. Ry 406 

" 7'. London &> S. W. Ry 425 

Philadelphia & W. B. Ry. Co. v. Stinger 383 

Phips v. London - N. W. Ry 277 

Phelps 7'. London d- 3 N. W. Ry 344, 346, 348 

" v. Great East. Ry 402 

Philbrick 7'. Ont. d^ Que. Ry 212 

Pickard i'. Smith 235 

Pigeon 7-. City of Montreal 267 

Pim v. Municipal Council of County of Ontario 220 

Pion 7'. North Shore Ry. Co 162, 163, 167, 178, 179, 182, 184, 216 

Pittsburg 6 Lake Erie Ry. Co. v. Robinson 155 

" Cincinnati 6 St. L. Ry. Co. 7'. Staley 364 

" 6 Southern Ry. 7'. Taylor 364 

" etc., Ry. Co. 7'. Thompson 323 

Plant v. Grand trunk Ry 389 

Pollock 7>. Eastern Ry. Co 383 

Pontbriand v. Grand Trunk Ry 312 

Pontiac & Pacific Jet. Ry. 7'. Brady 405 

Pontus dit Clement v. Rousseau 377 

Poole 7'. Middleton 43 

Port Dover & Lake Huron Ry. Co. v. Grey 40, 41, 64, 65 

Porter v. Hildebrand 347 

Porter v. New York Central Ry. Co 29 

Port Glasgow & Newark Sailcloth Co. v. Caledonian Ry. Co.... 407, 412 

Potts 7-'. Warwick, etc., Canal Navigation Co 126 

Poudrette v. O. d^ Q. Ry 243 

Pratt 7'. Grand Trunk Ry 306 

Prehn i'. Royal Bank of Liverpool 423 

Prescott 7'. Eastern Ry. Co . 383 

Priestly 7>. Farrell . . . '. 389 

Provencher 7'. C. P. Ry 357, 421 



xxvin THE RAILWAY LAW OF CANADA. 

Provident Life Assr. c^ Investment Co. i-. Wilson 65 

Provincial lnsurar.ce Co. r. Worts 65 

Pryce v. Monmouthshire Ry 282 

Pullman Car Co. v. Sise 357, 360 

" " 7>. Gardner 357 

" " 7'. Lowe 357, 360 

Pulbrook v. Richmond Consol. Mining Co 19 

Pym v. Great Northern Ry 323 

Quebec Cent. Ry. v. Lortie 325, 375, 377 

Quebec Fire Assurance Co. v. St. Louis 414 

Quebec & Richmond Ry. Co. v. Dawson 58, 63 

Quebec Warehouse Co. r. Coiporation Town of Levis 92 

Queen See Regina. 

Rae v. Grand Trunk Ry 397 

Hartleys 1 . L. d- N. W. Ry 368 

Railroad Co. v. Lockwood , , . . 343 

" v. Jones 331 

Railway Publishing Co. re 88 

' ' Sleepers Supply Association in re 65 

" Company* v. Sprague 113 

Co. v. Hale 421 

" v. Reynolds 421 

" 7'. Henry 421 

" v. Kennedy 421 

" 7'. Lehman 422 

Commissioners of Manitoba &> Red River Valley Ry. Co. in 

re 265 

Ralph v. Great Western Ry 288 

Ramsden v. Boston &> Albany Ry. Co , 29 

Ramsgate, etc. , Co. v . Montenore 37 

Ranee's Case .... 71 

Ranger v. Great Western Ry 226, 227 

Raphael i'. 'I hames Valley Co 233 

Rascony v . Union Navigation Co 36 

" Woollen Co. f. Desmarais 39, 63 

Rastick v. Great Western Ry 385 

Ravary v. Ontario d^ Quebec Ry 75 

Ray v. Blair 54 

Reburn v. Ontario &= Quebec Ry 212 

Rector & Churchwarden of St. George's Parish -c. King 210 

Redhead v. Midland Ry 323, 326 

Redfield^. Corporation of Wickham 102.103, 122 

Redmayne ?'. Great Western Ry 418 

Reedie v. Lon. &> N. \V. Ry 235, 366 

Kegina v. Phaneuf 287 

" v. Brownell 386 

v. McLeod 329 

v. McGreevy 228 

7'. Great Western Ry 255 

7'. Grand Trunk Ry 246, 251 

v. Vezina 256, 257 

v . Barry 1 79 

v . Cambrian Ry 185 

v. Carrier 158, 160, 176 

v. Chester 85, 166 

v . Coaks i$ 



INDEX TO CASES. xxix 

Regina v . Eastern Counties Ry . Co 179 

" v. G. T. Ry 82 

" v. Gasharth 22 

" v . Great North Western Ry 184 

" v . Hungerford Market 1 84 

" -v . Lambourne Valley Ry 45, 47 

" v. London Dock Co ,. j 84 

" v . Malcolm 179 

" v. McCurdy 177 

" v . Paradis 184, 2^5 

" v. Poulter 185 

" v. St. Luke's 179 

" v. Tewkesbury 1 8 

" v. Thames & Isis Navigation Co 47 

'* v. Train I 

" v. Vaughan 1 84 

Reist v. Grand Trunk Ry 259 

Renaud v. City of Quebec 24 7, 269 

" v. Great Wes'ern Ry 406 

Rennie v. Northern Ry 307 

Rex v. Pease 85, 1^6 

Rhodes v . Starnes , 26 

Richards v. I.ond., Brighton & S. C. Ry 350 

Richardson v. Can. Pac. Ry 319, 320, 322 

" Spence 6 Co. v. Rountree 344, 361 

Ricket v. Metropolitan Ry 82, 180, 184 

Rigby v. Hewiit . 411 

Richards v. London, Brighton 6 S. C. Ry 1 350, 353, 

Richelieu 6 Ont. Nav. Co. v. St. Jean 388, 390, 392, 393 

Rimmer v. London 6 N. W. Ry 411 

Rishton Local Board v. Lan. York. Ry 277 

Roach v. Can. Pac. Ry , 307 

Roberts v. Great Western Ry 268 

Roberge v. North Shore Ry 232 

Robertson v. Grand Trunk Ry 298 

" v. Halifax Coal Co 383 

Rohichaud v. Can. Pac. Ry 306 

Robinson v . Chartered Bank 43 

" v. C. P. Ry 365 

" v. N. B. Ry 416 

Robson v. Hooker , 344 

" v. N. E. Ry 334 

Rocheleau v. St. Lawrence 6 All. Ry 262, 403 

Rock v. Denis 289, 364, 382 

Rogers v. Great Western Ry 307 

Rogers v . Hersey 36 

Rogers v . Laurin , 40, 54 

Root v. Sleeping Car Co - 358 

Rose v N. E. Ry 334 

Rosevear China Clay Co. Ex parte . ... $16 

Ross v. Can. Agricultural Insurance Co 39, 54 

" v. Converse 64 

" v. Dusablon 56 

" v. Fiset 16, 43, 56 

" v. Langlois 390, 392 

" v. Worthington 43, 56- 



xxx THE RAILWAY LAW OF CANADA. 

Roulx i'. Grani Trunk Ry 399 

Howe 7'. McEwan 292 

Roy 7 p . Champlain &* St. Lawrence Ry 148 

" 7-. Q. M. &C. Ry 74 

" 7'. Grand Trunk Ry 368, 369, 374 

Royal Institution for the Advancement of Learning r. Desriviere* .... 21 

Ruck v. Williams 328 

Rushforth v. Hadfield 292 

Rutherford z p . Grand Trunk Ry . < 293 

Ruthven v. Ruthven 150 

Ryan v. M. &> C. Ry 28 

" 7'. Canada Southern Ry 393 

' 7'. N. Y. Central Ry 410 

Ryder 7'. Woombwell 335 j 3?o 

Ryland 7'. Delisle 60, 61, 62, 63 

' ' 7'. Fletcher 85 

" ' -Ostell 54, 55 

" 7'. Routh 16 

Salter 7'. Utica 6 B. Ry 384. 

Samson v . The Queen 176 

Sanche v . Canadian Pacific Ry ^4, 180 

Sandys ex parte _ 88 

Santa Barbara Mining Co ex parte 49 

Sarault v. Viau 374 

Scarlett v. Great Western Ry . . . . 321 

Scottish Amer. Invest. Co. v. Prettie 213 

Sene'cal v. Hatton 423 

Senesac v. Central Vt. Ry 417 

Seymour v. Sincennes 296, 312 

Scott ?'. Railway Commissioners 175 

" 7'. L. &= St. K. Docks Co 370 

' ' v. Midland Ry 273 

" 7-. Grand Trunk Ry 210 

Seminary of Ste. Thgrese v. C. P. Ry 190 

Senior r. Metropolitan Ry. Co 161 

Serandat v. Saisse 32 

Shakleford's Cas-.; 40 

Sharp 7'. San Paulo Ry 227 

Shattuck v. Stoneham Branch Ky 155 

Shaver v. G. W. Ry 258 

Shaw v. C. P. Ry 361 

" 7'. Ry. Co 422 

'' 7'. Boston &> W. Ry 383 

Sheffield & Manchester Ry. Co. i\ Woodcock 22 

Sheerman 7'. T. G. B 31, 329, 330 

Shelfer r. City of London Electric Light Co. , 168, 170 

Shelton v. Lake Shore & Mich. South Ry 286 

Shephard v . Bristol & Exeter Ry 320 

Sherman v. Toronto, Grey &* Bruce Ry 31 

Shoebrink v. Can. All. Ry 38 2 

Shiopshire Union Rys. <S Canal Co. v. The Queen 47 

Siner e^ Wife v. Great Western Ry 334, 368 

Singleton f. E. C . Ry 369 

Sise 7-. Pullman Car Co 357 

Simoneau 7-. The Queen 239, 242, 244 

Simpson v . Molson's Bank 49 



INI>EX TO CASES. xxxr 

Simpson 7'. Great Western Ry 404 

7>. London & N. W. Ry 422 

" 7'. Ottawa &= Frescott Ry 130 

Sisson 7'. Ry. Co 42 1 

Slater r. Can. Cent. Ry 216 

Slim 7.'- G. N. Ry. Co 30, 314 

Sneesby T. I,ancashire & Yorkshire Ry 366 

Smiths'. All. & N. W. Ry 258 

Smith v . Can. Car Co 43 

7'. L. &> S. W. Ry 366, 410 

v. N. Y. &* H. R. Ry 386 

?' Baker 39', 392, 393 

7'. Darley 22 

?'. Hall Glass Co 32 

?' Lynn : 59, 67 

7'. Port Dover &= Lake Huron Ry 132 

7'. Spencer 39 

Societe" de Construction d'Hochelaga v. Socie~le de Const. Metrop. .21, 33 

Somerville Ry. Co. v. Doughty . 186 

Solway Jet. Ry. v. Caledonian Ry 279 

Soule 7'. Grand Trunk Ey 255 

South of Ireland Co. 7>. Waddle .119. 

" Caroline Ry. Co. r. Tyson 422 

" Wales Ry. Co. v. Wythts 233 

South Eastern Ry. Co. 7'. Gouvrement 150 

Southein Express Co. v. Louisville & Nashua Ry 280 

Spettigue r. Great Western Ry , 307 

St. Catharines v. Niagara Central Ry. v. Barbeau 8 

St. Denis T'. M. 6 O. Ky 199, 200 

" v, M. <S O. Ry 195, 199, 200 

St. John 7'. Erie Ry. Co 69 

St. Lawrence Sugar Ref. Co. v. Campbell 377, 388, 390 

" er* Ottawa Ry. Co. 7'. Lett 425 

St. Louis, etc., Ry. Co. v. Southern Express Co 281 

St. Stephen's Branch Ry. Co. v. Black 66 

Stapley 7'. L. B. 6- S. C. Ry 366 

Standard Fire Ins. Co (Caston's Case) 55 

Stanstead &= Connecticut Ry. Co. v. Brigham 40, 41 

Stanton v. Can. Ail. Ry 226 

Stranton Iron &> Sieel Co , 43 

Starke r/. Burke 128 

Slarnes 7'. Molson 194 

Steam v. Pullman Car Co. ... 357, 359 

Steel 7-. S. E. Ry 235 

Steinhoff v. Corp. of Kent ." 382 

Steinweg 7'. Erie Ry. Co 326- 

Stockpoit Case 174 

Stebbing v. Metropolitan Ry. Co 175. 

Stephen 7'. Banque d'Hochelaga 103 

" 7'. Chauss6 371 

Steven 7'. London Steel Works Co. (Delano's Case) 57 

Stevens v. Davidson 128 

Straits of Canso Mar. Ry. Co. v. The Queen 174 

Stratford 6 Moreton Ry. Co. v. Stratton 64 

Streetsville Plank Road Co. v. Hamilton & Toronto Ry 255 

Stimpson v. The New England & 1 Nova Scotia S.S. Co 352 



XXXIT THE RAILWAY LAW OF CANADA. 

Stokes v. Eastern Counties Ry 323 

" z-. Saltonstall 323 

Stoker t-. Welland Ry 332 

Stubley v. London & N. W. Ry 380, 384 

Studer z<. Buffalo 6 Lake Huron Ry 262 

Sulphur &= Copper Co. v. McElroy 228 

Sutherland r. Great West. Ry 342 

Talley v. Great Western Ry , 349 

Tate v. Port Hope Ry 232 

Tattersall v. Nat. St. Co 314 

Taylor v. Chichester &> Midland Ry. Co 79 

Taylor v. Ont. d^ Que. Ry 212 

Tench v. Great Western Ry 28 

Ttssier r. Grand Trunk Ry 352 

The New World r. King 323 

Therrien r. Mori ice 374 

Thibaucleau v. City Pass. Ry. Co 31 

" v. Moit. St. Ry 289 

Thol T. Henderson 421 

Thomas v. Geldert 283 

Thompson r. The Victoria Ry. Co 113, 114, 115 

T'. Grand Trunk Ry 404, 406 

" T. Great Western Ry 252 

" Midland Ry 341 

Can. Central Ry 217 

Toms v. Corp. of Township of Whitby 289 

' ' r. Township of Whitby 382 

Thornton v. Wash. Savings Bank 125 

Time Tables Publishing Co. (Welton's Case) in re 68 

Tiverton & N. Devon Ry. Co. v. Loosemore 74 

Todd v. Met. Dist. Ry. Co 187, 238 

Toledo Ry. Co. v. Rodriguez .... 27 

" & Can. Southern Ry. Co. i\ Elder 403 

Toltoiny. C. P. Ry 187, 238, 244 

Toomey r. London dr 5 Brighton Ry 402 

Toronto Belt Line Ry. Co- r. West. Can. L. e S. Co 143 

" v. Lauder 9 

" in re 214 

Toronto d-= Lake Huron Ry. v. Crookshank 64 

" Gas Co. i\ Russell 64 

Toronto Ry. Co. v. Grinned 289, 342, 365 

Torpy z'. G.T.R 31, 329, 330 

Torrance r. Allan 303 

" T. The Richelieu Co. 351 

Tower v. The Utica &* Shenectady Ry 35 1 

Townsend r. N. Y. Cent. Ry 286 

Township of Brock v. Toronto d-> Nipissing Ry in, 269 

Trade Aux. Co. r. Vickers 126 

Traversey i\ Gloucester 250 

Tremblay z 1 . Chicago d St. Louis Ry 210 

" v. Tremblay 150 

T raster v. C. P. Ry 312 

Trimble v. Hill 166, 275 

Trottier r. Red River Transp. Co 291 

Troy d- Boston Ry. Co. z-. Lee 186 

Trust d-= Loan Co. of U. C. v. City of Hamilton in, 112 



INDKX TO CASES. xxxm 

Turpin's Case 88 

Tuiquand v. Marshall 25 

Twohey r. Great South & Western Ry. Co 179 

Tyre r. Wilkes 53, 54 

Tyson's Reef. Co. in re Ill 

" v. G. T. Ry 406, 407 

Union Nav. Co. v. Couillard 36 

United States v. New Orleans Ry 106, 107 

Utter v. Great Western Ry 187, 238 

Van Allan v. Grand Trunk Ry 253 

Vanderwerker v. Vt. Cent. Ry 228 

Vanhorn v. G. T. Ry 187, 238, 243, 269 

Vaughan v. Tafif Vale Ry 85, 166, 408, 414 

" v. G. T. Ry 187 

Venezuela Ry. Co. v, Kisch 58 

Vernon v. G. T. Ry 262 

Vezina v. The Queen 174,175,256, 258 

Vickers Express Co. v. C. P. Ry 280, 28 1 

Victorian Ry. Commrs. v. Coultas 289 

Victorian Ry. Commissioners v. Coultas 364 

Vineberg v. Grand Tiunk Ry 321, 353, 355 

Vital v. Tetrault 376 

Vogel v. G. T. Ry 297, 300 

Vulcan Iron Works re . 88 

Wade z>. C. P. Ry -.12 

Wadham v. N. E. Ry 179, 184 

Waite v. N. E. Ry 369 

Wallace v. Great Western Ry. Co 93 

" v. G.T. Ry 187,238,239, 244 

Wallbridge v. Farwell 105, 106, 108, 122, 133 

Walker v. Great Western Ry. Co 27 

Walker v. Old Colony Ry 239 

Walters v. C. P. Ry 319, 321 

Ward's Case 37 

Wai d i'. Great Western Ry 255 

" ?'. Ry. Co.... , 421 

Ware v, Carsley 372 

Warner v. Mower 22 

Warren v. Fake 126 

Warring v. Manchester, Sheffield & Lincoln Ry 227 

Washbourne v. Canada Car Co 222 

Wason Mnfg. Co. v. Levis & Kennebec Ry 102 

Washbuin i< . Milwaukee Ry 155 

Waterous Engine Works v. Corp. of Town of Palmersion 222 

Watkins v. Great Northern Ry. Co 1 88 

Watling v. Oaslter 366 

Watson v. Northern Ry 33 2 > 4 2 5 

Webb T'. Rome, Watertown 6 Ogdensburg Ry 410 

Weed v. Panama Ry 315 

Weetjen v. St. Paul & Pacific Ry 120 

Weirz'.C.P. Ry 384, 385 

Welch v. Baker 12, 52 

" v. Lond. d- N. W. Ry 352 

Welleans v. Can. Southern Ry 413 

Wells v. Kilpin 1 24 

" v. Northern Ry. Co 185 



xxxiv THE RAILWAY LAW OF CANADA. 

Westbourne Cattle Co. v. The Man. &> N. W. Ry 260 

Western's Case 43> 44 

Western Cumberland Iron Co.r. Winnipeg 6 II. B. Ry 117, 118 

White v. City of Montreal 377 

Whitfield v. A. 6 North Western Ry 197, 249 

Whitman v. Western Counties Ry 267, 3 1 3 

Whitman v. W. &> A. Ry. Co 406 

Whitney r. Pullman Car Co 358 

Whitworth r. Gaugain 126 

Wickhamz.'. N. B. & C. A. Ry 103 

Widder v. Buffalo 6 Lake Huron Ry 190, 196, 210 

Wilcox w. Rome, W. <Sr O. Ry 384 

Wilkes v. Gzowski 191 

Williamson v. Giand Trunk Ry 289 

Williams v. Roblin 201 

" i>. Great Western Ry 366 

Williamson's Administrators v. W. C. V. M. G. S. Ry 135 

Williamson v. N. J. Southern Ry 106 

Wilson ex parte. 88 

" v. Graham 140 

" v. Ginty 36,41,54, 55 

" v. Wilson 20 

" r.B.d-O.Ry. 358 

" T. Newpoit Dock Co 368 

" v. Giand Tiunk Ry 372 

" v. Northern Ry 399 

" v. Lancashire & Yorkshire Ry 418, 422 

Wilton v. Northern Ry 384 

Windsor Hotel Co. v. Date 36 

' ' " r. Lewi.; 39, 54 

Winkler v. Great Western Ry 384 

Winnipeg &= Hudson Bay Ry. Co. z p . Mann loo, 1 16, 231 

Witheily r. Rigent Canal Co 368 

Wilheis 7'. The Noilh Kent Ky 328 

Wood T. Htoui bridge Ry 179 

" v. Atlantic o Noith Western Ry. 166, 169, 171, 174, 185, 195, 204 

" *-. S.K. Ry 323, 328 

" v. All fr N. W. Ry 185, 195, 204 

" v. Stourbridge Ry 179 

" Out . &= Que Ry 223, 224 

Woodhill 2'. Gieat Western Ry 31 

Woodruffs. Harris 42 

" r. Corporation Town of Peterborough 54 

" f.G.W.Ry 342 

Woodward v. Allan 346 

Worce>ter Corn Exchange in ;v IH 

Wiighl 7'. Midland Ry 323, 326 

W) alt v. Senecal .... 96, 120 

'' v. Daienth Valley Ky. Co 6l 

" v. Levis & Kenr.ebtc Ry I lo 

Yeomans v. Corporation of Co. of Wellington 165 

York c^ Midland Ry. Co. "<-'. Hudson 24 

" dr 5 North Midland Ry. Co. v. The Queen 259 

Young v. C. P. Ry . Co ; 30, 3 \^ 

Zabiiikie v. Cleveland, Columbus < Ohio Ry. Co no 

Dimmer v. Grand Trunk Ry 7, g 

Zimmer ?'. Grand Trunk Ry 268 






A TREATISE 

OX THE 



Railway Law of Canada. 



CHAPTER I. 



INTRODUCTORY, 



1 . 7 he fra n ch ise. 

2. federal and Provincial Acts. 

3. Who may construct and operate 
railways. 



5. Special and general Acts. 



6. Constructed or to be constntcted 
under the authority of any Act 
passed by the Parliament of 
Canada . 

7. Provincial Legislation may be 



4. Questions of jurisdiction. '' ' 

8. Effect of Sec. 306 of The Kail- 



way Act. 



1. Railways in this country exist exclusively in virtue of legis-The fran* 
lative authority, and are invariably constructed and operated by chise< 
incorporated companies subject to statutory conditions and limit- 
ations. 

It is true that it has been held in England and the United 
States that any individual may construct and operate a railway, 
either upon his own land, or that of others with the owner's con- 
sent; but he does so at his own risk, and is liable not only civilly 
for all damages and annoyance caused to his neighbors by the 
construction and operation of the railway and the noise and 
smoke of trains, etc., but criminally by indictment for creating a 
public nuisance, (i) We must therefore conclude in the lan- 
guage of Crompton, T., in Reginav. Train, (2) that "the 
legal carrying out of such a scheme can only be effected by auth- 
ority of Parliament." In other words, the legislative authority is 
required to protect railway companies from the consequences 

(I) Regina v. Train, 3 F. & F. 22. (2) 3 F. & F. 22. 



2 THE RAILWAY LAW OF CANADA. 

of the doing of that which would otherwise amount to a public 
nuisance. 

In this country then we may safely say that railways can be 
legally constructed and operated only under the authority and 
powers granted by the Legislature. 
Federal and JJ. It may be convenient to point out here what railways come 
under the jurisdiction of the Federal, and what under that of 
the Provincial, Legislatures. 

Companies whose authority to construct and operate a rail- 
way is derived from the Parliament of the Dominion, with the 
exception of government railways, are subject to the provisions 
of the Dominion Railway Act, (i) and all railways which have 
been declared by Act of Parliament to be works for the general 
advantage of Canada, and all railways crossing or connecting 
therewith, are also subject to the provisions of that Act, (2) with 
the exception of those provisions relating to the organization of 
the company, meetings of shareholders, capital stock, payment of 
dividends, etc., and internal economy generally. (3) The Act 
at present in force is that passed in the month of May, 1888, 
known as "The Railway Act, 51 Vic., Chap. 29"; and the 
provisions referred to are contained in sections 32 to 89 respec- 
tively. These provisions may be made applicable to any rail- 
way within the legislative authority of Canada, by order of the 
Governor-in-Council, upon application after public notice in the 
Canada Gazette. (4) Railways which are constructed and oper- 
ated under authority granted by the Legislature of any of the Pro- 
vinces, and which have not been declared by Act of the Federal 
Parliament to be works for the general advantage of Canada, are 
under the control of the Legislatures of the Provinces, and are 
subject to the provisions of the Provincial Acts. It is unneces- 
sary to specify the different railways which are subject to the 
authority of the different Legislatures, but there might be men- 
tioned as instances the Intercolonial Railway, the Grand Trunk 
Railway, and the Canadian Pacific Railway, as having been de- 
clared to be works for the general advantage of Canada, and being 
subject to the legislative authority of the Dominion Parliament ; 

(1) The Railway Act, 51 Vic., c p. 29, sees. 3 and 5. 

(2) The Railway Act, sec. 306. (3) Ibid, sec. 5. 
(4) The Railway Act, sec. 7. 



INTRODUCTORY. 3 

(i) while purely local roads, within the limits of any one Province, 
and which do not connect with or cross such roads as those 
above mentioned, are subject to the authority of the Provincial 
Legislatures. It is provided in addition by sec. 4 of The Railway 
Act, that all provisions of the Act relating to any matter within 
the legislative authority of Canada shall apply to all railways, 
whether otherwise within the legislative authority of the Federal 
Parliament or not. The section specifies as examples all provi- 
sions relating to the crossing and junction of one railway with 
another, offences, and penalties, and statistics. The Provincial 
Railway Acts also contain provisions on these subjects, and there 
would here appear to be a conflict of legislative jurisdiction. It 
is not, however, within the scope of this work to consider at any 
length constitutional questions, except in so far as they may 
arise incidentally in connection with any particular point that 
may need to be discussed. For the present, therefore, it is pro- 
posed to pass over such questions and to consider the Statutes 
under which railways in this country exist and are carried on, 
and where we find a clashing of Federal and Provincial legisla- 
tion, to discuss the constitutional questions as they arise. 

In so far as concerns the incorporation of railway companies, 
their subsequent organization, their powers, their operation and 
their rights and liabilities, the references will be generally con- 
fined to the Dominion Railway Act, which is the most impor 
tant, not only in that its provisions govern most of the railways 
in this country, but inasmuch as Provincial legislation has hither- 
to been framed, generally speaking, on the lines of the Dominion 
Act. References to the Provincial Acts will be limited to those 
points on which they differ in some essential feature from the 
Dominion Act. (2) The first questions to be considered are as 
to who can construct and operate railways, and what the law 
requires should be done by them before they can commence 
construction and operation. 

3. First, as to who may constructor operate a railway. In Who may con- 
this country, as a matter of practice, railways are entirely con- s ct ~ n P e " 
structed and operated by incorporated companies. According 
to the interpretation clause of The Railway Act, the word " com- 

(i) The Ry. Act, sec. 306. (2) For further differences see Appendix. 



4 THE RAILWAY LAW OF CANADA. 

pany " includes any " person " having authority to construct or 
operate a railway ; (i) but a perusal of the Act would lead one 
to believe that the Legislature never intended that any natural 
person should be authorized to construct and operate a railway 
for public business ; though in certain particular instances rail- 
ways may be operated by persons not having corporate powers 
nor special legislative authority, under certain restrictions and 
for a limited period of time. For instance, it is provided by the 
Act that if a railway should be sold under any lawful proceed- 
ing, and purchased by any person or corporation not having 
legislative authority to hold and operate the railway, the pur- 
chaser may operate such railway and collect tolls and fares for 
the carriage of goods and passengers, just as the company pre- 
viously operating it could have done, subject to the restrictions 
and conditions provided by the Act. (2) With this exceptioa it 
may be said that all railways in this country are constructed and 
operated by incorporated companies. 

4. In the Provinces, if the railway is for provincial purposes 
Questions of , , . ,. , , ,. . , ,. . 

jurisdiction. on vi an d is confined to the limits of the Province, the companies 

are incorporated by Act of the Provincial Legislature, and they 
are governed by the provisions of the special Act incorporating 
them, and the general provisions of the Provincial Railway Act, 
in so far as they are not excepted by the special Act. On the 
other hand, railways which connect one Province with any other 
or others of the Provinces, or which extend beyond the limits of 
the Province, are subject to the exclusive jurisdiction of the Do- 
minion Parliament and to the provisions of the Dominion Rail- 
way Act, (3) except in so far as those provisions may be ex- 
cepted by the special Act incorporating the company, and this 
can be done by enacting in the special Act that the sections of 
the general Act proposed to be excepted shall not be incorpor- 
ated in the special Act. Also all railways, which, though wholly 
situate within the Province, are, before or after their construction, 
declared to be for the general advantage of Canada or for the 
advantage of two or more of the Provinces, are subject to the 

(1) Sec. 2 (a >. 

(2) 8605.278-280. There is no such provision contained, however, in the 
Provincial Acts, and the purchaser of a local railway would have to apply 
to the Legislature for authority before he could operate it. 

(3) B. N. A. Act, sees. 91, 92, 10 () 



INTRODUCTORY. 5 

exclusive jurisdiction of the Dominion Parliament, (i) but are 
not subject to sees. 32 to 89 of The Railway Act, unless con- 
structed under the authority of an Act of the Dominion Parlia- 
ment, or unless these sections are made specially applicable to 
the particular railway or company in the manner provided by 
The Railway Act. (2) There here arises an apparent difficulty 
as to the jurisdiction of the Local and Federal Legislatures in the 
case of a local railway declared to be for the general advantage 
of Canada, or crossing or connecting with a railway under the 
Federal authority. Sub-section 10 (c~) of section 92 of the 
B. N. A. Act would seem to bring the two jurisdictions into 
direct collision. A railway company incorporated under a local 
Act, and fora purely local purpose, is within the exclusive juris- 
diction of the local Legislature ; but as soon as the railway is 
declared to be a work for the general advantage of Canada, it 
comes under the Federal jurisdiction. What then becomes of 
the special and general local legislation affecting such railway ? 
In the Dominion Act of 1883, (3) as amended, it was specially 
provided that : " Nothing in this section shall in any way affect 
or render inoperative the provisions of any Act of a local Legis- 
lature heretofore passed, authorizing the construction and run- 
ning of any such railway or branch line " (i.e., railways or branch 
lines crossing or connecting with railways under Dominion au- 
thority), " or any act amending the same ; but hereafter the same 
shall be subject to the legislative authority of the Parliament of 
Canada." Even the Act containing this section was open to 
some doubt on the subject, as seen in the case of Corp. of St. 
Joseph v. Quebec Central Railway. (4) This was the case of 
a local railway brought under Federal jurisdiction by crossing 
the Intercolonial Railway ; and Ramsay, J., held that the provi- 
sions of the local Act of 1880 (Que.) with regard to penalties 
for obstructing highways were not abrogated in the case of this 
railway by the Dominion Act, but remained in force, and ap- 
plied to the railways for which it was framed and of whose char- 
ter it was part. However, this holding may be said to be obiter, 
inasmuch as the point decided by the Court was, that under 
either the Dominion or the Quebec Act, a justice of the peace 

(i) B- N. A. Act, sec. 92, 10 (<:). (2) Sees. 5, 7. 

(3) 46 Vic., ch. 24, sec. 6, ss. 2. (4) n Q. L. R. 193. 



6 THE RAILWAY LAW OF CANADA. 

had jurisdiction to hear and decide a complaint against a railway 
company for obstructing a highway. But in the Revised Statutes 
of Canada and the present Act of 1888, the above subsection 
was changed, and now reads as follows : (i) 

" Every such railway and branch line shall hereafter be sub- 
ject to the legislative authority of the Parliament of Canada ; 
but the provisions of any Act of the Legislature of any Province 
of Canada, passed prior to the 25th May, 1883, relating to any 
such railway or branch line, and in force at that date, shall re- 
main in force so far as they are consistent with any Act of the 
Parliament of Canada passed after that date." 

Special and 5. The effect of this clause in deciding as to what statutory 
general Acts, enactment would apply is open to some doubt in many instances, 
and so far the jurisprudence has not thrown much light upon the 
subject. For instance, it is customary to include in the Act of 
incorporation the whole or a large part of the general Act by 
which the railway will be governed, and unless excepted by the 
special Act the general Act of the Province in which the line is 
to be constructed (if a local work) is made to apply to the railway 
company seeking incorporation, and is expressly declared to form 
part of the special Act and to be construed therewith as form- 
ing one Act. (2) 

Suppose the case of a local railway, incorporated by a Pro- 
vincial Statute, and having the provisions of the Provincial 
Railway Act incorporated in its charter, being declared a rail- 
way for the general advantage of Canada. The difficulty is to 
decide whether and to what extent the provisions of the Provin- 
cial Act would remain in force and apply to such railway. Ac- 
cording to sec. 307 of The Railway Act, such provisions as were 
in force prior to 25th May, 1883, would remain in force so far as 
they would be found to be consistent with any Act of the Domi- 
nion passed after that date. And it would be for the courts to 
decide whether they were consistent or not. 

Again, special provision is made by sec. 6 of The Railway Act, 
that if in any special Act it is provided that any provision of any 
general railway Act, in force at the time of the passing of the 
special Act, is excepted from incorporation therewith, or if the 

(1) Sec. 307 Ry. Act, 1888. 

(2) See Quebec Ry. Act, 1880, ch. 43, sec. 2, sub-sec. 2- 






INTRODUCTORY. j 

application of any such provision is extended, limited, or quali- 
fied, the corresponding provision of The Railway Act shall be 
excepted, extended, limited, or qualified in like manner, (i) 

It would seem from the language of this section that if there 
were no provisions in the present Act corresponding to the thus 
extended, limited, or qualified provisions of the former general 
Act, the latter provisions would stand. But it is to be regretted 
that the language of the statute is not more explicit, 

Cases have arisen before our courts where these questions 
have been discussed or touched upon, with the result that some 
of the light of jurisprudence may be thrown upon the subject. 

For instance, the question recently came before our courts as 
to whether the Grand Trunk Railway Company was obliged to 
construct a farm crossing for each subdivision of a lot of land, 
and the point was raised as to whether the relevant clauses of 
The Railway Clauses Consolidation Act (2) or those of the pre- 
sent Act applied. 

The Grand Trunk Railway Company was incorporated by 16 
Vic. (1852), ch. 37. At that time The Railway Clauses Consolida- 
tion Act (3) was in force, and by section 2 of the Grand Trunk 
Railway Act of Incorporation, it was specially enacted that cer- 
tain sections of The Railway Consolidation Clauses Act should 
be incorporated with the special Act. It was held that the 
relevant sections of the Consolidation Act applied ; (4) but, as 
Bosse, J., remarked, " as the charter required the company to con- 
struct farm crossings, it is unnecessary to discuss the subsequent 
general statutes." (5) 

In Zimmer v. Grand Trunk Railway, (6) the question came 
up in the Divisional Court as to whether, supposing for argument's 
sake that the original " Railway Clauses Consolidation Act " 
had been repealed, the Grand Trunk Railway Act, (7) not hav- 

(1) 15 y the Act incorporating the Can. Pac. Ry Co., 44 Vic., cli. I, 
the provisions of the Conso'idatedRy. Act of 1879 are made applicable to the 
building of the Can. Pac. Ry. Co., in so far as thev are not inconsistent with 
or contrary to the said Act of Incorporation. C. P. R. Co. v. Major, 13 S. C. R. 
233, 9 L. N. 410, 1887. 

(2) 14 & 15 Vic., c. 51. (3) 14 & 15 Vic., c. 51. 

(4) Cie du Grand Tronc z>.Huard, I R. J. Q. 501 (Q. B.). 

(5) Ibid., p. 508. 

(6) 21 O.R. 628, confirmed in appeal, but on .different grounds by 19 
Ont. App. 693. (7) 16 Vic., cap. 37. 



8 THE RAILWAY LAW OF CANADA. 

ing been repealed, those clauses of the Consolidation Act which 
were incorporated in it were not thereby repealed. 

Robertson, J., admitted that as a general rule this contention 
could be upheld, but found in the particular Act a special pro- 
vision whereby Parliament had reserved to itself the right to 
amend or enlarge any of the clauses which by the special Act 
incorporated therewith any of the clauses of the general Act. (i) 
In appeal this point was not decided, but Mr. McCarthy, Q.C., 
and Mr. Nesbitt for the Grand Trunk Railway maintained that 
the Consolidated Statutes of Canada (1859) did not repeal the 
clauses of 14 and 15 Vic., c. 51, but re-enacted them. (2) 

It is somewhat difficult to arrive at a conclusion from the 
foregoing, but the following is suggested by the author : Section 
307 of The Railway Act lays down a general principle, that all 
Acts of Provincial Legislatures relating to the now Dominion 
railways (as we may call them for convenience), enacted prior 
to 1883, are to remain in force so far as they are consistent with 
any Dominion Act passed after that date; but under sees. 5 
and 6, even when the Provincial legislation prior to 1883 does 
conflict with Dominion legislation passed after that date, if such 
Provincial legislation is incorporated in the company's charter, 
the same must prevail as against the provisions of The Railway 
Act. And where the provisions of the Provincial general Act 
have been excepted, extended, limited or qualified by the special 
Act, the corresponding provisions of the Dominion Act shall be 
excepted, extended, limited or qualified in like manner. 

Finally, the whole is subject to any express provisions of the 
special Act. (3) When a company is incorporated by a special 
Act, and there are provisions in the special Act as well as in the 
general Act on the same subject which are inconsistent; if the 
special Act gives in itself a complete rule on the subject, it 
would seem that the expression of that rule amounts to an excep- 
tion of the subject matter of the rule out of the general Act. But 
when the rule given by the special Act applies only to a portion 

(O 21 O. R. 632. 

(2) See C. S. C., ch. 66, sec. 83 ; schedule B, p. 1227. In the revision of 
1886, C. S. C., ch. 66, was preserved, nor was it repealed by the Act of 1888. 
Zimmerz'. G. T. R., 19 O. A. R. 695. 

(3) Sec. 3, and see Re St. Catharines & Niagara Central Ry. Co. v. Bar- 
beau, 15 O. R. 583. 






INTRODUCTORY. 9 

of the subject, the special Act may apply to one portion and the 
general Act to the other. And the probable intention of the 
Legislature is important in considering such a question, (i) 

6. Some doubt has arisen as to the interpretation of the phrase Constructed 

" constructed or to be constructed under the authority of any or to t b f ca ?" 

structed under 
Act passed by the Parliament of Canada, used in sec. 5 of the authority 

the Act. In an Ontario case, (2) a company was incorporated of an y Act 
by the Ontario Legislature, and by an Act of the Dominion Parli- p ar ii am ent of 
arnent the Governor-in-Council was authorized to grant a sub- Canada, 
sidy to the company ; and by another Act of the Dominion Par- 
liament, the company's railway was declared to be a work for 
the general advantage of Canada, and the company was author- 
ized to build a branch line. No further powers of any kind 
were conferred upon the company by the Dominion Parliament. 
It was held that the effect of the declaration, that the work was 
a work for the general advantage of Canada, was to bring it 
under the exclusive legislative authority of the Parliament of 
Canada, but that the Acts of the Ontario Legislature previously 
passed were in no way affected, that the railway in question was 
not one ' constructed or to be constructed under the authority of 
any Act passed by the Parliament of Canada," (3) and therefore 
the sees. 4 to 39 of R. S. C. 109 (corresponding to sees. 32 
to 89 of the present Act) did not apply to it. (4) 

7. As affecting the controversy as to the position of Provincial Provincial 

legislation with regard to railways subsequently coming under legislation 

. . may be con- 
the Federal jurisdiction, it should be noted that provision is firmed. 

made in section 308, whereby the Governor General may, by 
proclamation, confirm such legislation in force before the passing 
of The Railway Act, which then becomes as valid as if it had 
been enacted by the Parliament of Canada. 

8. The practical effect of section 306, declaring the leading Effect ofSec. 
lines of railway to be works for the general advantage of Canada jP a ij^ a J[ ct 
as well as all other lines connecting with or crossing such lines, 

is to bring, with few exceptions, most of the railways in Canada 

(1) Ontario & Sault Ste. Marie Railway Co. v. The Can. Pac. Ry. Co., 14 
O. R . 432, and cases there cited. 

(2) JSeSt. Catharines & Niagara Central Ry. Co. v. Barbeau, 15 O. R. 

583. 

(3) R. S. C., cap. 109, s. 3. 

(4) See also Toronto Belt Line ^.Lauder,i9 O. R. 607, and cases there cited. 



io THE RAILWAY LAW OF CANADA. 

under Federal jurisdiction, and, for financial reasons, it is now 
found advisable to^obtain charters from the Dominion Parlia- 
ment rather than from the^Provincial Legislatures. 



CHAPTER II. 



ORGANIZATION AND MANAGEMENT OF RAILWAY 
COMPANIES. 



INCORPORATION OFFICES OF COM- 
PANY PROVISIONAL DIRECTORS 
AND THEIR POWERS CAPITAL, 

ETC. 

1. Powers -vested in corporations. 

2. Limit of shareholders' 1 liability. 

3. Offices of the company. 

4. Provisional directors and their 
powers . 

5. Moneys deposited to lit with- 
drawn for certain purposes only. 

6. Allocation of stock. 

7. Capital stock and shares, 

8. Application thereof. 

9. first meeting of shareholders. 

10. Notice thereof. 

11. Election of directors . 

12. How capital may be increased. 

13. Votes of shareholders. 

14. Who may hold stock in a rail- 
way company. 

CORPORATE MEETINGS. 

15. Annual meetings and special 
meetings. 

1 6. Proof of proceedings at meetings. 

17. Presumptions. 

1 8. Interference of Court. 

19. Special and general meetings. 

20. Adjourned meeting. 

2 1 . Irregular meetings. 



DIRECTORS. 

22. Election of. 

23. De facto directors. 

24. Qualification. 

25. Vacancies. 

26. President. 

27. Meetings of directors, notice of. 

28. Voting. 

29. Directors subject to shareholders 
and by-laws. 

30. Disability of officers, contractors 
and sureties. 

Powers of directors. 
Their position as tiustees. 
Liability of. 

Liability of company and 
directors. 

35 . Compensation of. 

36. Liability of company for re- 
ports of directors. 

OFFICERS AND AGENTS. 

37. General manager or superin- 
tendent and other officers. 

38. Libel. 

39. Manslaughter. 

40. Conductors. 

41. Station agents . 

42. Contractors, 

43. Agents generally . 

44. Acquiescence, ratification. 

45. Notice. 



1. Section 3 1 of The Railway Act provides that every com- Powers vested 
pany incorporated under special Act shall be a body corporate, 
vested with such corporate powers, privileges and immunities as 



12 



THE RAILWAY LAW OF CANADA. 



Limit of 

shareholders' 

liability. 



Offices of the 
company. 



are necessary to carry into effect the intention and objects of the 
Act and the special Act, and which are incident to such corpora- 
tion or are expressed or included in The Interpretation Act. 

According to The Interpretation Act, (i) corporations have 
power to sue and be sued, contract and be contracted with by their 
corporate name, to have a common seal, and to alter or change the 
same at their pleasure, and to have perpetual succession and hold 
personal property or moveables for the purposes for which the 
corporation is constituted, and to alienate the same at pleasure ; 
and there shall also rest in any majority of the members of the 
corporation the power to bind the others by their acts, and the 
individual members of the corporation are exempted from per- 
sonal liability for its debts or obligations or acts, provided they 
do not violate the provision of The Act incorporating them. 

. The liability of a shareholder toward the creditors of the 
company is limited by section 86 of the Act, to an amount equal 
to the amount unpaid on the stock held by him, and until the 
whole amount of his stock has been paid up ; but such liability- 
does r.ot arise until an action has first been taken by the credi- 
tors against the company, and, execution having issued, is returned 
unsatisfied in whole or in part. 

3. The special Act incorporating a railway company speci- 
fies where the head office (2) shall be situated ; but the Board of 
Directors may establish one or more offices in any other places 
in Canada or elsewhere, (3) but the domicile or residence of the 
company remains at the place fixed by its charter as the site of 
its head office. (4) 



(1) R. S. C., ch. i, sec. 7, No. 43. 

(2) In Welch v. Baker (21 L. C. J. 97, 1876), it was held that man action 
against a shareholder to recover the amount unpaid on his shares, the cause 
of action arose at Montreal, where the company had its principal office, and 
where judgment was rendered for the debt due by the company, and execution 
was also issued, and not at Bedford, where the shareholder subscribed for 
his shares. 

(3) Sec. 32. 

(4) A railway company being a corporation can only have one residence, 
and that its head office. A railway company which has its head office out 
of the Province of Quebec must give security for costs. Canada Atlantic Ry. 
Co. v. Stanton, 11 L. N. 388 (1888), M. L. R., 4 S.C. 160. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 13 

4. The special Act names the persons who are incorporated Provisional 

:tors an 
powers. 



as a company, and appoints certain of them as provisional^^ 01 



directors, of whom the majority form a quorum, and these pro- 
visional directors hold office until the first election of directors, 
and they open stock-books and procure subscriptions of stock 
and receive payments on account of subscriptions. 

5. Such payments are deposited by them in a bank, and Moneys depo- 
these monies cannot be withdrawn, except for the purposes f withdrawn f r 
the railway, or upon the dissolution of the company, for any certain pur- 
cause whatsoever. They also cause plans or surveys of the road poses only> 
to be made, and they allot and apportion the stock among the 
subscribers, (i) 

6- If more than the whole stock has been subscribed, they Allocation of 
allocate and apportion the authorized stock among the sub- st ' 
scribers, as they deem most advantageous and conducive to the 
furtherance of the undertaking. (2) 

7- The capital stock of the company, the amount of which Capital stock 
shall be stated in the special Act, shall be divided into shares of *" 

one hundred dollars each ; 

8. And the money so raised shall be applied, in the first place, Application 
to the payment of all fees, expenses and disbursements for pro- tnereof ' 
curing the passing of the special Act and for making the surveys, 

plans and estimates of the works authorized by the special Act, 
and all the remainder of such money shall be applied to the 
making, equipping and completing and maintaining of the said 
railway and other purposes of the undertaking. (3) 

9. As soon as twenty-five per cent, of the capital has been First meeting 
subscribed, and ten per cent, of the amount subscribed paid up, of snarebold - 
they call a meeting of the shareholders at the head office of the 
company, 

10. Giving four weeks notice of the meeting by advertisement Notice there- 
in the Canada Gazette, and in a local newspaper at the place ofp 

where the head office is situated. 

11. At this first meeting, the shareholders who are qualified Election of 
elect the number of directors fixed by the special Act. (4) directors. 

(i) Sec. 33. (2) Sec. 34. (3) Sec. 35. (4) Sec. 36. 



14 THE RAILWAY LAW OF CANADA. 

How capital \*^ The original stock of the company may be increased, (i) 
increased. w ' ln tne approval of the Governor-in-Council from time to time, 
to any amount, provided that the increase is authorized by a 
vote of the shareholders who hold at least two-thirds of the sub- 
scribed stock, at a meeting called for the purpose after special 
notice as required by the Act. (2) 

Votes of share- ^3 Each shareholder, as in other corporations, has a vote for 
holders. 

(i) Where there is evidence that the original nominal capital was never 
paid in, the directors have no power to increase the stock of the company, 
and as the stock held by the defendant consisted wholly of new unauthorized 
stock, the plaintiffs, execution creditors of the company, whose writ had been 
returned unsatisfied, could not recover by instituting proceedings by way of 
scire facias against the defendant as holder of shares not fully paid up. Page 
v. Austin, 10 S. C. R. 132. 

The directors of an incorporated company, even when the Act authorizes an 
increase of capital, have not the right to order such increase, if it be proved 
that there are sufficient funds in hand, all debts paid, and if such inci'ease be 
ordered simply to secure to the directors the control of the affairs of the com- 
pany. Perrault r. Milot, 12 Q. L. R. 248, Q. B. 

Held, affirming the decision of C. P. Div., Burton, J. A., diss : That the duty 
of the Provincial Secretary in Ontario in issuing the notice of the increase 
of the capital stock in an incorporated company, required to be given under 27 
Vic., c. 23, s. 5, ss. 18, is merely ministerial, and that the requirements of 
the Act being complied with, he has not any discretion in the matter, but must 
issue the notice. 

Held, also, that the power conferred of increasing the capital stock by 
sub.-secs. 1 6, 17 and 18 of sec. 5, is a general power not limited to a single 
occasion ; and Held, that there is nothing in the Act which makes a prior sub- 
scription and payment of the new stock, or a part of it, a requisite to the 
right of the company to have the notice published. In re the Massy Mnfg. 
Co., 13 O. A. R. 446 (Court of Appeals). A company was incorporated under 
27-28 Vic., cap. 23, with power to increase by by-law the capital stock of 
the company so soon as, but not before, the capital was all allotted and paid 
up. The plaintiffs, execution creditors of the company, whose writ had been 
returned unsatisfied, intented proceedings by way of scire facias against the 
defendant as holder of shares of the new increased capital sto ck . 

Held, reversing judgment of the Court below, that the by-law passed by 
the company being ultra vires, the alleged shares of the defendant had not 
any existence in law, and therefore that the plaintiffs failed to establish that 
the defendant was a shareholder within the Statute, and consequently they 
were not entitled to recover. Page et al. v. Austin, 7 O. A. R. I. 

(2) Sec. 37. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 15 

each share held by him, (i) upon which all calls or amounts due 
on the stock have been paid up, (2) and at least ten per cent, 
must be paid up to qualify him. (3) Shareholders may, as in 
other corporations, vote, not only in person but by proxy that 
is, by an authority or power of attorney given in the form or to 
the effect prescribed by the Act to any other person to vote for 
him at any meeting of the shareholders. (4) The Act does not 
require, as in the case of most corporations and as required by 
some special Acts, that the person representing the shareholder 
should himself be a shareholder. 

14. As to who may hold stock in a railway company, all Wno ma y 
. ,..,.,. , , . . . , , . . hold stock in 

individuals of course may do so, and it is provided by the Act a ra ii w ay 

that municipal corporations, provided they are empowered to company, 
do so by the laws of their Province, may also hold stock. (5) 

Under the statutory law of this country, corporations and 
joint stock companies, generally, cannot hold stock in a rail- 
way company, unless specially authorized to do so by their 
charter ; (6) nor can any railway company, with certain named 



(1) Where an election of directors in a joint stock company was clearly 
illegal, the voters having been allowed only one vote, whereas each share 
should have given a vote, but the parties had for more than eight months dis- 
charged the duties, the Court refused to interfere by mandamus for a new 
election. 

Quaere, whether mandamus or quo ivarranto would be the proper remedy. 
Moore -c. Port Bruce Harbour Co., 14 U. C. Q. B. 365. 

In determining an application of a shareholder for an injunction, the Court 
will look to the circumstances of the case, and adopt the course which is most 
to the advantage of the whole body of shareholders. So where a shareholder 
asked for an interim order to restrain persons from voting on certain shares, and 
it appeared that the shares had been held by the defendants for more than a 
year, the injunction was refused, more especially so as the petitioner had a 
remedy by quo warranto if he were wronged by an illegal vote. Gil man v. 
Robertson etal., 7 L. N. 60. 

(2) Sec. 43. (3) Sec. 36. 

(4) Sec. 44. 

The powers of attorney in the hands of the shareholders were deposited 
before the meeting with the secretary, who verified them and granted certifi- 
cates. Held sufficient without verification of p oxies during the meeting. 
Gilman v. Robertson and Royal Canadian Ins. Co., M. L. R., I S. C. 5. 

(5) Sec. 38. The obligation of a municipality to issue debentures in payment 
of a subscription of shares is not to be regarded as equivalent to a mere obligation 
to pay money ; in which case, by C. C. 1077, the damage resulting from delay 
would consist only of interest from the day of default. La Corp de la Cie. 
d'Ottawa v. The Q. M. O. & O. Ry. Co., 26 L. C. J. 148, S. C.; M. L. R., i 
Q. B. 46 ; confirmed in Supreme Court, 14 S- C. R. 193. 

(6) The Companies Act, 1886, 2 R. S. C., ch. 119, sec. 93. 



i6 



THE RAILWAY LAW OF CANADA . 



exceptions, purchase its own stock or acquire of the stock, bonds 
or securities of any other railway company in Canada, unless 
specially authorized to do so by its special Act. (i) And the 
directors are subject to heavy penalties for knowingly permitting 
the funds of the company to be applied in violation of this pro- 
hibition. (2) 

Corporate Meetings. 

Annual meet- jpj T j A t provides for an annual meeting for the election 

ings and spe- . . 

cial meetings, of directors and the transaction of general business, also special 

meetings to be called by the directors, or upon their failure for 
21 days after request to do so, by shareholders representing at 
least one-fourth in value of the subscribed stock. (3) And all 
general meetings, whether annual or special, shall be held at the 
head office of the company. (4) Four weeks notice is required 
to be given of all meetings by advertisements published weekly 
in the Canada Gazette and a local newspaper. (5) 

No special meeting can enter upon any business not set forth 
in the notice upon which it is convened. (6) At annual meetings 
any business incident to the undertaking may be transacted, 
provided it is not such business as is required by the Act or the 
company's charter to be transacted at a special meeting. (7) 

16. By section 45, it is enacted that all matters or things 
proposed or considered at any meeting of the shareholders shall 
be determined by the majority of votes and proxies then present 
and given ; and all decisions and acts of any such majority 
bind the company and are deemed the decisions and acts of the 
company. Also by section 54, the acts of the majority of a 



Proof of pro 
ceedings at 
meetings. 



(i) Sec. 276, see Ross v. Fiset. 8 Q. L. R. 251. (2) Sec. 277. 

(3) The calling of an annual meeting of a railway company is not a duty 
specially appertaining to the office of president, The Railway Act, 42 Vic., 
cap. 9, making it the duty of the directors to call such meeting to be held ; 
and Held, that when directors negleci or omit to perform such duty of calling 
the meeting, the condemnation under C. C. P. 125, for failure to comply, 
will be against the corporation and not against the directors personally. 
Hatton t/."M. P. & B. Ry. Co., M. L. R., i S. C. 69(1884). 

(4) Sec. 40. (5) Sec. 41. IVlilotz'. Perrault, 12 Q. L. R. 193. 

(6) An individual shareholder in a railway company will not be entitled 
to an injunction forbidding a special meeting of the company for the purpose 
of sanctioning a lease of the road to another railway, until a meeting has been 
called at which tVie accounts of the company have been submitted, unless 
fraud by the majority, or corrupt influence have been proved. (Angus v . M. 
P. & B. Ry. Co., 2 L. N. 203, 23 L. C. J. 161 (1878). 

(7) Sec. 42. 






ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 17 

quorum of directors are binding, (i) The power of a majority 
of the shareholders of a company incorporated by Act of Parlia- 
ment is limited only by that act, unless the powers of the major- 
ity are specially restricted in some other way. (2) By section 212, 
copies of minutes of proceedings and resolutions at any such meet- 
ings shall be evidence of such proceedings and resolutions in any 
court, when certified to by the secretary as being true copies 
extracted from the minute book. (3) 

17. It is well settled that when a board of directors of a cor- Presumptions, 
poration, formed for pecuniary profit, orders an act to be done, 

and the act is subsequently performed, its legality cannot after- 
wards be questioned by any stockholder or director, on account 
of the irregularity of the meeting, if he made no objection at the 
time, or afterwards when he had an opportunity to do so. (4) 

18. The Court is very reluctant to interfere with the holding Interference 
of meetings of shareholders, especially when they are called for of Gourt - 
the purpose of investigating and controlling the conduct of the 
managing body ; and the Court will not interfere to restrain such 

a meeting simply because the notice convening it is badly framed, 
and invites the meeting inter alia to pass resolutions which 
would be invalid if passed ; for the meeting might take some 
other legal course, e.g., pass some amended resolution which 
would be valid. (5) 

19. Apart from the business which is required, by The Railway Special and 
Act or the special Act, to be transacted at a special meeting, one S eneral meet- 

in^s 

and the same meeting may be both general and special : general 
for the purpose of transacting the usual business of the company, 
and special for the transaction of some particular business, of 
which special notice may have been given. (6) 

(1) Where the quorum of directors of a railway company was fixed at three, 
by a special statutory provision, and the company was subsequently amalgama- 
ted with another company, and it was provided by the Act of amalgamation that 
the board of directors of the amalgamated company should not be less than five 
nor more than seven directors (without expressly changing or regulating the 
quorum), the original provision making three directors a quorum continued in. 
force. Fairbanks v. O'Halloran, M. L. R., 4 Q. B. 163 (1888). 

(2) Lindley Comp. 315. 

3 As to proof of calls, see page 64 infra, Note 7. 
4) Wood Railway Law, 341. 

(5; Lindley Comp. 304. See also Angus v. M. P. & B. Ry. Co., 2 L. N. 
203 ; 23 L. C. J. 161 (1878) ; Oilman v. Robertson et al., 7 L.N. 60 ; page 
15 sura ; Murphy v. La Cie.,etc., 16 L.C.R. 300. 
(6) Lindley Comp. 308. 

2 



1 8 THE RAILWAY LAW OF CANADA. 

Adjourned *JO. It is a general rule that corporate meetings may be ad- 

journed ; and if a corporate meeting is regularly called, any busi- 
ness that might have been lawfully transacted at the original 
meeting may also be done at the adjourned meeting. But no 
other business can legally be done at an adjourned meeting with- 
out special notice, (i) 

Irregular gl. When by the general or special Act provision is made for 

the holding of annual meetings at a particular time, as the first 
Monday in January, etc., it is treated as directory merely; and if 
held at any another time, although irregular, it does not render the 
elections void, and the directors elected at such meeting can 
bind the corporation by their acts. (2) 

If votes are cast for a candidate who is ineligible for the office 
of director, they will not be thrown away, so as to elect a can- 
didate having a minority of votes, unless the electors casting such 
votes had knowledge of the fact on which the disqualification of 
the candidate for whom they voted rested, and also knew that 
the latter was for that reason disabled by law from holding the 
office. (3) 

Directors. 

"Election of. 2. Section 36 provides for the first election of directors ; sec- 
tion 46, for the annual election. A day is mentioned in the spe- 
cial Act, for the election of directors ; but if such election is not 
held on the day appointed therefor, the directors shall cause 
such election to be held at a special meeting duly called for that 
purpose, within as short a delay as possible after the day so ap- 
pointed. (4) No person shall vote on such subsequent day except 
those who would have been entitled to vote if the meeting had 
been held on the day when it should have been held. (5) 

When the annual meeting did not take place on the day ap- 

(1) Wood Railway Law 341, and note 6 Lindley Comp. 341 . 

(2) Wood Railway Law 349. 

(3) Reg. v. Coaks, 3 E. & B. 248 ; Regina v. Tewkesbury, L. R , 3 Q. B. 
628; Drinkwater v- Deakin, L.R.,9 C.P. 626; Etherington v. Wilson, 
L.R., 20 Eq. 606. (4) Sec. 46. 

(5) Sec. 47. The Court of Chancery has jurisdiction to set aside an election of 
directors by persons who are subscribers nominally and not bonafide. David- 
son v Grange, 4 Grant's Chy. 377. 

A suit to set aside an election of directors of a corporation, on the alleged 
ground of fraud, may be brought by some of the shareholders on behalf of all, 
and need not be in the name of the corporation itself. Ib. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 19 

pointed, in consequence of an injunction suspending the holding 
of such meeting, the injunction being subsequently dissolved, it 
was held, that service of notice upon the president and secretary 
that the injunction had been dissolved, together with a copy of the 
judgment dissolving the injunction, was sufficient to put the com- 
pany into default to call the meeting, and a mandamus might issue 
in the name of a shareholder under article 1022 of the Quebec 
Code of Civil Procedure to compel the company to call the 
meeting, (i) 

2J$. A person who is ineligible to the office of director, or De facto 
whose election was irregular, cannot be a director dejure, yet directors, 
he does by his election become a director de facto, if he enters 
upon the discharge of his duties. Persons dealing with direc- 
tors irregularly elected, without notice of irregularity, and in 
good faith, are entitled to treat them as the agents of the com- 
pany, and to hold the company bound by their acts, as if they 
were duly appointed directors. (2) But as between such direc- 
tors and the shareholders, the irregularity is of greater impor- 
tance, and it has been held that persons de facto, but not de jure, 
directors cannot allot shares, make valid calls or forfeit shares. (3) 

24. No person shall be a director unless he is a shareholder Qualification, 
owning twenty shares of stock absolutely in his own right, and 
has paid all calls due thereon, and is qualified to vote for direc- 
tors at the election at which he is chosen. (4) 

It was held in an English case where the qualification shares 
were to be held by the directors in their own right, that benefi- 
cial ownership was not necessary for such qualification, as where 
the shares were mortgaged. (5) But the emphatic word "abso- 
lutely " used in the above section would seem to exclude an 
interpretation in the sense of this case under our Act. 

In addition to the directors elected by the shareholders, the 
mayor, reeve, or chief officer, etc., of any municipal corporation, 
holding $20,000 of stock in the company, is ex qfficio a director, 
unless special provision for the representation of such corpora- 
tion is made by special Act. (6) 

(1) Hatton v.Montreal, Portland & Boston Ry. Co., M. L.R., I S.C. 69, 

(2) Lindley Comp. 300. (3) Ibid. (4) Sec, 49. 

(5) Pulbrook v- Richmond Consol. Mining Co., 9 Ch. D. 610. 

(6) Sec. 38 ; vide also R. S. Q. 5138, and Appendix, sec. 38. 



20 THE RAILWAY LAW OF CANADA. 

Vacancies. 25. In case of death, absence or resignation of any of the 

directors, others may, unless otherwise prescribed by the by- 
laws, be appointed in their stead by the surviving directors ; but 
if such appointment is not made, such death, absence or resig- 
nation shall not invalidate the acts of the remaining directors. 

(0 

A director who becomes bankrupt or ceases to attend to his 
duties dees not thereby necessarily vacate his office. (2) But if 
the number of continuing members is less than a quorum, which 
section 53 renders requisite for the transaction of any business, 
they cannot fall up a vacancy, which must remain until the next 
annual meeting, (3) as provided by section 40. The by-laws may, 
however, prescribe the manner in which vacancies in the direc- 
torate shall be filled, but the by-laws will have no force until 
sanctioned by the Governor-in- Council. (4) The directors ap- 
pointed remain in office till the next ensuing election. (5) 
President. 26. The directors shall, at their first or at some other meet- 

ing after the election, elect one of their members to be president 
of the company, who shall always, when present, be the chairman 
of and preside at all meetings of the directors, and shall hold his 
office until he ceases to be a director, or until another president 
has been elected in his stead ; and they may, in like manner, 
elect a vice-president, who shall act as chairman in the absence 
of the president. (6) 

Without special authority the president possesses such powers 
as. by usage and necessity, are incident to his office and the 
usual course of business. (7) Section 60 of The Railway Act 
enumerates some of his powers, such as the signing of notes, 
bills and debentures, and other instruments, and the performing 
of all acts which, by the regulations and by-laws of the company, 
or by the special Act, are required to be signed, performed 
and done by the president. In the case of his absence, these 



(1) Sec. 51. 

(2) Phelps v. Lyle, 10 A. & E. 113; and see Wilson v. Wilson, 6 Scott 
540. 

(3) Newhaven Local Board v. Newhaven School Board, 30 Ch. D. 350. 

(4) Sees. 48 & 217. (5) Sec. 50. 

(6) Sec. 52. 

(7) See Hatton v. M. P. & B. Ry. Co., M. L- R., i S. C. 69. 



ORGANIZATION AND MANAGEMENT OF Rv. COMPANIES. 21 

acts can be performed by the vice-president, (i) But unless 
the charter, by-laws, or the board of directors, by resolution, con- 
fer such authority upon him, he has, as president, no more 
authority to bind the corporation by contracts than any other 
director has. (2) Where the president or other officer of a 
corporation assumes to do certain acts for it, for which there is 
no express authority, if the corporation ratines such acts either 
expressly or impliedly, and they are within the scope of its 
authority, it is bound thereby. (3) 

27- When directors have stated meetings, either by virtue of Meetings of 

the charter, by-laws or resolution of the Board as on the first dir( : ctors > 

notice of. 
Monday in each month, etc., no notice of such meetings is re- 

(1) Sec. 60. 

(2) Wood Rys., 436, 437. 

The president, or other principal officer of a corporation, taking a 
mortgage for and in the name of the corporation, does not act as its agent, but 
as principal in the exercise of its corporate power, and may therefore make 
the affidavit of bona fides under C. S. U. C., cap. 45, without authority in 
writing. Bank of Toronto v. McDougall, 15 U. C. C. P. 475; and see MacMur- 
rick . Bond Head Harbour Co., 9 U. C. Q. B. 333. 

(3) So where J. H.B., a director of defendant's company, personally 
owned a vessel, " The United Empire," valued by him at $150,000, and was 
possessed of a majority of the shares of the company, some of which he had 
assigned to others of the defendants in such numbers as qualified them for the 
position of directors of the company. Upon a proposed sale and purchase by 
thecompany of the vessel, the board of directors, including}. H. B., adopted 
resolution approving of the purchase ; and subsequently at a general meeting 
of the shareholders, including J. H. B., and those to whom he had transferred 
portions of his stock, a like resolution was passed, the plaintiffalone dissenting ; 
it was Held, reversing the decision of the Ontario Court of Appeals (i I Ont. 
A . R. 205), that such by law was illegal, and co ild not be ratified by a resolu- 
tion of the shareholders of the company at a meeting subsequently called for 
the purpose of such ratification, which resolution was passed by a small major- 
ity obtained by the votes of the interested director. The N. W. Transportation 
Co. v. Beatty, 12 S.C. R. 598. But in the Privy Council it was held that 
where a voidable contract, fair in its terms and within the powers of the com- 
pany, had been entered into by one of the directors with one of their number 
as sole vendor, such director was entitled to exercise his voting power as a 
shareholder in general meeting to ratify such contract. His doing so could 
not be deemed oppressive by reason of his individually possessing a majority 
of votes acquired in a manner authorized by the constitution of the company. 
The N. W. Transportation Co. v. Beatty, 12 App. Cas. 589. 

The head of a corporation may bind the corporation by any contract from 
which it may derive a benefit. Royal Instn. for Adv. of Learning v. Desrivieres, 
Stuart's Rep. 224, K. B . 

Where a corporation has a knowledge of an act of its president and secre- 
tary which they had not sufficient authority to transact, and it does not repu 
diate such act, the corporation will be bound by it. Socie'te' de Constr. d'H. 
?'. Soc. de Const. Metropolitaine, 4 Dorion Q.B. Rep. 199. 

See also Jones v. E. T. Mut. Ins. Co., M.L. R., 3 S.C. 413; nL. N. 132. 



22 



THE RAILWAY LAW OF CANADA. 



Voting. 



Directors sub 
ject to share- 
holders and 
bv-laws. 



Disability of 
officers, con- 
tractors and 
sureties. 



quired, as they are all bound to take notice of the time and place 
of the holding thereof in the mode provided by the Act. (i) 

38. Each director has but one vote excepting the chairman, 
who in case of an equal division has a casting vote. (2) 

29. The directors are subject to the examination and control 
of the shareholders at their annual meetings, and are also 
subject to all by-laws of the company, and to the orders and 
directions from time to time made or given at the annual or spe- 
cial meetings, but such orders and directions must not be contrary 
to any express directions or provisions of the general or of the 
special Act. (3) 

30. No person who holds any office, place or employment 
in, or who is concerned or interested in any contract under or 
with the company, or is surety for any contractor, is capable 
of being chosen a director, or of holding the office of director; 
nor may any person who is a director of the company enter 
into or be directly or indirectly, for his own use and benefit, 
interested in any contract with the company, other than a contract 
which relates to the purchase of land necessary for the railway, 
or be or become a partner of or surety for any contractor with 
the company. (4) 

A. had been appointed secretary at a salary, and whilst sec- 
retary he was elected a director, and appointed upon a com- 
mittee to exercise certain powers of the directors ; from the time 
of his election he received salary as a committee man, but ceased 
to receive salary as secretary, though he continued to perform all 
the duties of the office. It was held that A. did not hold an 
office un ler the company, so as to disqualify him from being party 
as a director to the making of a call. (5) 

With regard to the nature of the contracts which disqualify 
a person interested in them from being a director, it has been 
held that they must be contracts made with the company in the 
prosecution of its undertaking, and that there is nothing to pre- 
vent a banker of a company from being one of its directors. (6) 

(1) Warner v. Mower, n Vt. 385; Smith v. Darley, 2 H. L. Cas. 789. 
In re Bnt. Sugar Ref. Co., 3 K. & J. 408. 

(2) Sec. 55 ; as to quorum, see supra p. 20. 

. (3) Sec. 56. (4) Sec. 57. 

(5) Iron Ship Coating Co- v. Blunt, L. R., 3 C. P. 485. 

(6) Lindley Comp. 328; Sheffield & Manchester Ry. Co. v. Woodcock, 
7 M. & W. 574; and see Regina v. Gasharth, 5 Q. B.D. 321. 



ORGANIZATION AND MANAGEMENT OK RY. COMPANIES. 23 

It has not yet been decided, when there is no express power 
granted the shareholders in the general or special Act to remove 
directors, whether there is an implied power to do so by resolu- 
tion duly passed at a meeting properly convened for the pur 
pose; but the better opinion seems to be that there is. (i) It has 
been held, however, that if a director is appointed for a definite 
period, he cannot be removed before that period has expired, 
without some special provision in the charter or by-laws. (2) 
Where the shareholders have power to remove a director for 
" any reasonable cause," the shareholders are themselves the 
judges as to what is, and what is not, a reasonable cause for re- 
moval ; and their decision will not be interfered with if they act 
fairly and in good faith. (3) But when there had been a meet- 
ing where some who were not legally directors were present, and 
some who were legally directors were excluded, the Court inter- 
fered only to the extent of deciding that it was not a meeting 
which could discharge the duties of a board. (4) 

31. The directors are required by section 58 of the Act to Powers of 
make by-laws for the stock, property, business and affairs of the c ^ rectors> 
company, and for the appointment of all officers and servants. 

Where the managing director of a railway company had 
issued a large number of debentures to other directors at a dis- 
count of 25 per cent., in satisfaction of their claims against the 
company, the plaintiffs, who had subsequently obtained deben- 
tures of the same class, contended that the said directors could 
only claim the amount actually advanced by them, and that they 
could not, as directors, sell the debentures to themselves at a 
discount ; it was held that inasmuch as the company did not 
complain of the transaction, nor any shareholders, and inasmuch 
as the transaction was not ultra vires, it was not competent for 
the holders of the debentures, such as the plaintiff, were, to im- 
pugn the position of the said directors. (5) Where the directors 



(1) Lindley Comp. 302. 

(2) Lindley Comp. 302. Imperial Hydropathic Hotel Co. v. Hampson, 
23 Ch. D. i. 

(3) Inderwick v. Snell,2 McN. & G. 216. 

(4) Harden . Philipps, 23 Ch. D. 14. 

(5) Bank of Toronto v. Cobourg, etc., Ry. Co., 10 Ont. R. 376. See Cam 
bell's case, 4 Ch. D. 470. 



24 THE RAILWAY LAW OF CANADA. 

of a company abuse their position so as to get an advantage at 
the expense of the company, it is for the corporation or its cor- 
porators to complain, (i) But it has been held thai a stockholder 
can bring an action of account against a corporation, and thereby 
contest the validity of a by-law made by its board of directors. 
(2) The by-laws of a mutual insurance company gave the 
president the management of its concerns and funds, with power 
to act in his own discretion and judgment, in the absence of 
special directions from the directors and it was also his duty to 
sign all notes authorized by the board or by virtue of the by- 
laws ; and was also to act as secretary. Held, that the plaintiff, 
who was the transferee for value given before maturity of a note 
signed on behalf of the company, by the president as president 
and treasurer, and given to the payee in settlement of a valid 
claim against the company, was entitled to recover the amount 
of said note from the company. (3) 

Their position 32. Directors are not only agents, but to a certain extent trus- 
as trustees. tees< ^ j t j s [\ ie \ r duty so to conduct the business of the company 
as to obtain for the benefit of the shareholders the greatest bene- 
fits that can be obtained consistently with the trust reposed in them 
by the shareholders, and with honesty to other people. (5) They 
are bound to account to the company for all profits made by them- 
selves, by their employment of the assets of the company, and for 
all profits made by them at the expense of the company, unless 
they can show that the company, with a full knowledge of the 
facts, has agreed to allow them to retain such profits for their 
own benefit. (6) 

Liability of. 33, Directors are responsible for the loss of the company's 
assets, if that loss is attributable to the employment of the assets 
in a manner and for purposes not warranted by the constitution 



(1) Ibid. 

(2) Keys v. Quebec Fire Ins. Co., Stuart's Rep., 425 K. H. 

(3) Jones v. E.T. Mutual Ins. Co., M. L. R., 3 S.C. 413 ; 1 1 L. N. 132. 

(4) Faure Electric Accumulator Co. ,40 Chy. D. 141 ; Kay, J. 

(5) Lindley Comp. 364; and see Faure Electric Accumulator Co., 40 Ch. 
D. 141 ; York & Midland Ry. Co. v, Hudson, 16 Beav. 485 ; Great Luxem- 
bourg Ry. Co. r. Magnan, 25 Beav. 586. 

(6) Lindley Comp. 365 ; see also 16 Beav. 485 supra Parker v. Mc- 
Kenna, 10 L. R. Ch. 96 ; Gaskell v. Chambers, 26 Beav. 360. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 25 

of the company, (i) Generally speaking, directors have a wide 
discretion ; and although in the absence of proof of mala fides, it 
may be difficult to establish a case of culpable negligence, or 
wilful default, yet if such a case be proved, and loss by the com- 
pany attributable thereto be also proved, the directors will be 
liable to make good such loss. (2) 

But directors are not liable for errors of judgment or honest 
mistakes, when acting within their powers, (3) so much so that 
they have been held not liable for losses occasioned by purchas- 
>ing a business which they knew to be insolvent at the time of the 
purchase. (4) 

Directors must, however, attend to their duties, and not place 
undue reliance on other servants of the company. (5) 

34. Directors who are actually implicated in misapplying the Liability of 
company's money are jointly and severally liable for the "" 



.arising therefrom, and to. entail such liability it is not always 
necessary that they should have taken .an active part in such mis- 
application. (6) 

As to how far the knowledge of his co-directors is the knowledge 
of a director, so as to render him liable for a breach of trust, is a 
question that can scarcely be considered as settled. (7) Mere 
constructive notice, however, is not enough to impose liability. (8) 

35- Directors of companies are generally allowed compensa- Compensation 
tion for their time and attention to the company's business by of - 
express agreement; but where there is no such agreement, they 
cannot, without the sanction of the shareholders, charge the 
company anything for their services. (9) 

(1) See Land Credit Co. of Ireland v. Lord Fernoy, L. R., 8 Eq. 7; 
Grimes v. Harrison, 26 Beav. 435 ; In re. Nat. Funds Assur. Co., 10 Ch. D. 
118 ; Flitchcroft's case, 21 Ch. D. 519; In re. Denham & Co., 25 Ch. D. 
752 ; Leeds Estate etc. Co. v. Shepherd, 36 Ch. 1). 787. 

(2) Lindley Comp. 372 ; Charitable Corp. v. Sutton, 2 Atk. 400 ; Over- 
end, Gurney & Co. v. Gibb, L. R., 5 H. L. 480 ; Evans v. Coventry, 2 Jur. 
N.S. 557 ; Turquand v. Marshall, 4 Ch. 376. 

c. (3) London Financial Association v. Kelk, 26 Ch. D. 107 and 144. 
fff (4) Overend, Gurney & Co. v. Gibb, L. R., 5 H. L. 480 ; and see Par- 
ker v. Lewis, 8 Ch. 1035, as to compromising claims. 

(5) Leeds Estate Co. v. Shepherd, 36 Ch. D. 787. 

(6) Land Credit Co. v. Lord Fernoy, L. R., 8 tq. 7 ; L. R., 5 Ch. 763. 

(7) Joint Stock Discount Co.v Brown, L. R., 8 Eq. 381 ; Ashurst v. Mason, 
L.R., 20 Eq. 225 ; Land Credit Co. v. Lord Fernoy, 8 Eq. 7 ; Turquand 
>.. Marshall* 4 Ch. 385. 

v(8) Hallmark's case, 9 Ch. D. 329. 
(9) Dunstan v. Imperial Gas Co., 3 B. & Ad. 125 ; Lindley Comp. 388. 



26 



THE RAILWAY LAW OF CANADA. 



Liability for 
reports of 
directors. 



36. Section 62 provides that directors shall cause annual state- 
ments to be prepared, showing monies received by the company or 
by the directors or managers, for the use of the company, and all 
charges and expenses attending the erecting, making, supporting, 
maintaining and carrying on of the undertaking and all other 
receipts and expenditures of the company or the directors. 

The reports made and accounts rendered by the directors in 
the course of their duty, though made and issued to the share- 
holders only, as to the state of the affairs of the company, are 
considered the representations of the company, not only to the 
shareholders, but to the public, if they are published and circu- 
lated by the authority of the directors or a general meeting, (i) 

Directors of a company are personally liable for injury 
caused to third parties by the false representations contained in 
a report of the directors to the shareholders ; but the injury 
must be the immediate and not the remote consequence of the 
representation, and it must appear that the false representation 
was made with the intent that it should be acted upon by such 
third person. (2) A shareholder cannot claim damages against 
directors for having been induced to purchase shares, by mis- 
representation, if he has continued to hold them without objec- 
tion long afier he had knowledge, or full means of knowledge, of 
the untruth of the representations on which he bought them. (3) 



Officers and Agents. 

General man- 37- Where the powers and duties of a general manager or 

ageror super- SU p ei j n tendent are not defined, his authority is to be measured 

mtendent and 

other officers, by usage, and what he has been permitted to do by the corpo- 
ration, and the incidents thereof. (4) If it is shown that upon 
several occasions, as well before as after the act with which it is 
sought to charge the corporation, he performed similar acts with 
the approval of the corporation, it is sufficient to establish his 
authority to do the act in question ; and both his appointment 



(i) Rhodes a. Starnes, 22 L.C.J. 113. 
'(2) Ib. ( 3 )Ib. 

(4) Wood Ry. Law 440. As to managing director, see Canada Central, 
Ry. Co. v. Murray, 8 S. C. R. 314. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 27 

and authority may be inferred from his open and approved acts* 
(i) The powers of a general superintendent of a railway 
company are necessarily extensive ; and may be said generally, 
in the absence of express limitation, to clothe him with authority 
to act for the company in all ordinary matters connected with 
the management and operation of the road. In each particular 
his powers must be determined by the facts proven, applying 
the tests above mentioned. (2) A few instances may, however^ 
be given in illustration. (3) 

In England it has been held that the general manager or 
superintendent of a railway has, as incident to his employment, 
authority to bind the company to pay for surgical attendance 
bestowed at his request upon a servant of the company, injured 
by an accident upon its railway. (4) 

It is not competent for the officers of a company, in order to 
avert a seizure of a quantity of iron rails, to sign a letter to a 
bank making the seizure, agreeing that the bank, out of monies 
coming to their hands from certain garnishee proceedings taken 
by the bank, against debtors of the company, might retain '' an 
amount sufficient to fully cover all your solicitor's costs, charges, 
and expenses against you, or against you and us, as between 
attorney and client, or otherwise ; as well as the costs, charges 
and expenses of your bank, of what nature or kind soever, and 
after the payment of such, in the second place, to hold the sur- 
plus, if any, to apply on your executions against us." (5) But it 
is competent for the officers of a company to arrange that such 
bank should proceed to garnish certain debts due the company, 
the costs of which as between attorney and client the railway 
company were to pay. (6) The secretary and accountant have 
no power to accept drafts on behalf of the company, and conse- 



(i) Wood Ry. Law 441 . 

(2j Canada Central Ry. Co. v. Murray, 8 S. C- R- 313- 

(3) Unlawful acts of the managing director of a company destined to 
bring about the ruin of a co-partnership firm do not bind the company or 
make it responsible for damages unless approved or ratified by the com 
pany. Bury v. Corriveau Silk Mills, M. L. R., 3 S. C. 218. 

(4) Walker v- Great Western Ry. Co., L. R., 2 Exch. 228; also in 
United States, Toledo, etc., Ry. Co. v. Rodrigues, 47 111. 188 ; Pacific 
R.R. Co. v. Thomas, 19 Kan. 256. 

(5) Hamilton & Port Dover Ry. Co. v. The Gore Bank, 20 Grant Chy. 
190. (6) Ib. 



2 8 THE RAILWAY LAW OF CANADA. 

quently the monies covered by such drafts may be legally- 
attached by garnishment, notwithstanding such acceptance by 
such unauthorized officers, (i) 

38. Railway companies are liable for libels published by 
their general managers. (2) But where the general manager of 
a railway dismissed a conductor, and caused placards, describ- 
ing his offence and dismissal, to be posted up in the com- 
pany's private offices (in some of which they were seen by 
strangers), and entered in the circular books of the conductors, 
tor the information and warning of the company's employees, 
^ooo in number, the communication to the employees was 
held to be privileged. (3) 

Manslaughter. 39. Where the company's charter or the general Act obliges 
it to perform some duty requisite for the safe working of 
ihe road, and the general manager, having been warned of 
danger which might arise at a certain point, promises to carry 
out the requirements of the la\v, but neglects to do so. whereby 
an accident occurs at that point, he could be indicted for man- 
slaughter ; but where he promised to do that which was not 
required by the charter or general Act, and neglected to carry 
out his promise, in the event of a death resulting from his negli- 
gence, he could not be so indicted. (4) 

There can be no doubt that an engine driver may be indicted 

for manslaughier for causing the death of anyone by omitting to 

lake any of the usual precautions in driving his engine. (5) 

Conductors 4O. As a conductor is invested with authority to control 

and employees. tjj the movements of the train, and is bound to look out for the 

>afety and reasonable comfort of the passengers, exigencies may 

.irise, in which, by virtue of his position, he may make contracts 

which would be binding upon the corporation, where they 

become indispensably necessary for the performance of his 

duties. (6) 

As to the liability of railway companies for the acts of their 



(1) Ryan v. M. & C. Ry. Co. ,4 L. C- J. 38, Q. B., 1859. 

(2) Tench v. Great Western Ry. Co., 33 U- C. Q. B. 8 ; Brown v. Le Maire, 
etc-, de Montreal, 17 L- C. J. 46; Art. 356 C. C- 

(3) Tench v. Great Western Ry. Co-, 33 U. C. Q. B. 8. 

(4) Lxpartf G.T R., Exparte Brydges, iS L. C.J. 141, Q. B., 1874. 

(5) Ib., p. 147. (6) Wood Ry?. 449. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 29 

employees, there is a strong tendency, especially in the United 
States, to restrict the theory that masters are not liable for the 
tortious acts of their servants done beyond the scope of their 
authority ; and railway companies have been held liable, where 
a conductor exacts illegal fare from a passenger, (i) or gives a 
passenger, who pays his fare to him, counterfeit, illegal or 
worthless money in making change, (2) or for an assault upon 
a passenger. (3) And the Quebec courts seem to hold the 
same view of the question. (4) 

41. It has been held, however, by the Supreme Court (5) that Station 
the act of a station agent in issuing a false and fraudulent receipt a = ents - 
for goods never delivered to the company was not an act done 
within the scope of his authority, and the company were, there- 
fore, not liable for the money advanced thereon. And it was 
so held in a previous Ontario case. (6) But it has been held 
in New York State in the case of Armour v. Michigan Ry. Co., 
(7) over-ruling a prior decision, that if a station agent gives a bill 
of lading of goods before they are received, the company is liable 
for money advanced thereon. In a Maryland case, however, it 
was held that the company might show that the agent signed 
the bill fraudulently, and that the goods were never received by 
it. (8) In this country, however, it may be said that the ques- 
tion is determined by the recent statute, 52 Vic. cap. 30, which, 
in providing for the liability of the agent in such cases, would 
appear to impliedly exclude the liability of the company. 

In an action in trover for conversion of cattle killed in an 
accident and sold by the station master, it was held that the 
company were not liable, the sale not being the ordinary duty 
of the station master. (9) 

The company will not be held responsible for freight delivered 



(1) Porter v. New York Central R.R. Co., 34 Barb. (N.Y.) 353. 

(2) Conn. 11. Ohio, etc., R.R. Co., r Grant's Cas. (Penn.) 329. 

(3) Ramsden v. Boston & Albany R.R. Co., 104 Mass. 117. 

(4) Hill v. M. S. Ry. Co., S. C. in Review, Montreal 30 June, 1891 ; and 
see Hogan v. Dorion, 2 Q. B. R. 238; Laviolette r. Thomas, 31 L. C. J. 
197 ; Guenette v. City of Montreal, M. L. R. 4 S. C. 69. 

(5) Erb v. The Great Western Railway Co., 5 S. C. R. 179. 

(6) Oliver v. The Great Western Ry. Co., 28 TJ. C. C. P. 143. 

(7) 65 N. Y. in. 

(S) Baltimore, etc., R.R. Co. v. Wilkens, 44 Md. n. 

(9) O'Rorke v. The Great Western Ry. Co., 23 U. C. Q. B. 427. 



30 THE RAILWAY LAW OF CANADA. 

to one in their employ, but who was not their authorized agent 
for receiving freight. Thus in Griffin v. The Great Western Rail- 
way Co., (i) where a witness swore that he had taken the plain- 
tiff's mare to the station, where a man assisted him to put it into a 
-car, in doing which the accident happened, it was held that there 
was no proof of delivery to defendants. And in a Manitoba 
case, (2) plaintiff sent by another person, S., a box of goods to 
defendant's station to be carried. S. saw several men working 
at defendant's freight shed, and told one of them he had brought 
a box for plaintiff: the man told him "to bring it in and put it 
there," and S. put it where he was told. He got no receipt. The 
box was lost. Plaintiff then went to the station at W., and saw 
the man already referred to, who admitted that he got the box, 
but could not say what he had done with it ; held, that the 
admission of the man whom plainti ff saw was not admissible as 
evidence against the defendants, and as it was the only evidence 
of delivery, the plaintiff should be non-suited. (3) 

Station agents must, from necessity, and from the usual course 
of business, be treated as the representatives of the corporation 
at their respective stations, in the absence of notice to the pub- 
lic of any special limitations upon their authority. Keing 
authorized to receive, receipt for, and bill goods for shipment, 
the public has a right to presume that they have authority to 
bind the corporation by contracts relating thereto. 

Thus an agent can by verbal contract agree to carry petroleum 
in covered cars, with despatch, although he had private instruc- 
tions not to do so. (4) 

-Contractors. 42. The principle is now well established, both in England 
and the United States, although after a long course of conflicting 
decisions in both countries, that the employer of a " contractor " 
is not responsible for the negligence of the contractor or his 
servants, where the work contracted to be done is not of itself 
wrongful or dangerous, or there is no duty incumbent on the 
employer to do the thing himself. (5) 

(i) 15 U. C. Q. B. 507. (2) Young v C. P. R., I Man. 205. 

(3) See also Leigh v. Smith, I C. & P. 638 ; Slim v. The Great Northern 
Ry. Co.,i4C. H. 647. 

(4) Grand Trunk Ry. v. Fitzgerald, 5 S. C. R. 204. 

(5) Smith on Negligence (Amer. Edit, by \Vhittaker, 1888), p. 171-2: 
\Vood, Ry. Law. p. 1008, sec. 284. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 31 

And the rule is the same in the civil law. (i) But this rule 
becomes difficult of application, where the employer of the con- 
tractor interferes with or exercises control over the latter in the 
manner of performing the work. 

Where a railway acted as bankers for the contractors, and 
paid the wages of the workmen, cost of transport to the place 
where they were engaged, etc., it was held that the company were 
the real principals. (2) Plaintiff was a servant in the employ- 
ment of one K., a contractor with defendants for keeping their 
road in repair. In performing these repairs, certain carriages and 
engines, under the management of the defendant's servants, 
were used to transport materials and convey workmen employed 
by K. The plaintiff being one of such workmen, became a 
passenger in one of these carriages to be carried from his place 
of work to his residence, and in this capacity was injured by a 
collision . Held, that defendants were liable. (3) This decision 
would appear at first sight to be contrary to later decisions ; (4) 
but as pointed out in Graham v. Toronto, Grey & Bruce Ry. 
Co., (5) that case differed very materially from these, for there 
it was admitted that in preparing the work necessary for the 
repairs, certain carriages and engines, under the guidance and 
management of defendant's servants, were used for the transport 
of materials and conveyance of the workmen employed by the 
contractor. In the latter cases it was found that the contract 
was to carry materials only, and not passengers, and the con- 
ductor, in permitting the plaintiffs to get upon the train, was 
not acting as defendant's agent. 

A railway company is not responsible for damages occasioned 
by^the negligence of contractors in making the road, where such 
damage was occasioned by doing acts which they were not 
required by their contract to do. (6) Nor for illegal acts of 
contractors, such as trespass or damage upon adjoining lands. (7) 

(1) Sourdat, vol.2, No- 892 et seq. ; Morin v. Atlantic & No rth-West 
Ry. Co., 12 L. N. 89 ; Thibodeau v. City Pass. Ry. Co., 4 R. L. 654. 

(2) Lapointe v. C. P. R., 7 L. N. 29. 

f(3) Torpy v. The G. T. R., 20 U. C. Q. B. 446. 

(4) Sherman v. Toronto, Grey & Bruce Ky. Co., 34 U.C- Q. B. 451 5 
Graham v. Toronto, Grey & Bruce Ry. Co., 23 U. C. C. P- 541 ; Cunningham 
. G. T. R., 31 U. C. Q. B. 350. 

(5) 23 U.C.C. P. 548. 

(6) Woodhill v. The Great Western Ry. Co., 4 U. C- C. P. 449. 

(7) Eaton r. European & Northern Ry. Co., 59 Me. 520 ; 8 Rev. Rep. 430. 



32 THE RAILWAY LAW OF CANADA. 

In Nichol v. The Canada Southern, (i) plaintiff's fences 
were thrown down by the defendants' contractor, and plaintiff 
requested defendants under the statute to fence off their 
line from his land ; there thus arose in this case a statutory duty 
to perform it, and there could be no doubt as to the defendants' 
liability for non performance, whatever their recourse against 
the contractor might be. 

Where the company, by their engineers and other officials,, 
constantly superintend, direct, and control the work while it is 
in progress, they would be responsible for all that the work- 
men did in the course of that work, although they were not the 
workmen of the company. (2) Where a person is authorized by 
Act of Parliament or bound by contract to do particular work, 
he cannot avoid responsibility by contracting with another per- 
son to do that work. (3) The employer would not be responsi- 
ble where a contractor was doing work dangerous if not care- 
fully done, when he had no reason to believe the contractor 
would not be duly careful. (4) Where the contractor does the 
very thing he was engaged to do, and it causes an injury, the 
employer may be made liable. (5) 

. 43. Where persons are in fact employed by directors to transact 

generally. business for a company, the authority of those persons to bind a 
company within the scope of their employment cannot be denied 
by the company, unless : i. their employment was altogether 
beyond the power of the directors ; or unless : 2, the persons 
employed have been appointed irregularly. (6) But where the 
power to appoint an agent fora given purpose exists, irregularity 
in its exercise is immaterial to a person dealing with him 
bona fide, and without notice of the irregularity in his appoint- 
ment. (7) And Maule, J., in Smith v. Hall Glass Co., (8) ex- 



(1) 40 U. C. Q. B. 583. 

(2) Burgess v. Gr:.y, i C. B. 578 ; Serandat v. Saisse, L. R., i P. C. 152 ; 
Pendlebury v- Greenlagh, I Q. B. D. 36- See also Browne v. The Ottawa 
& Brockville Ry. Co., 20 U. C. Q. B. 202. 

(3) Hole v. bittingbou'-ne, etc., Ry. Co., 6 H. & N. 488. 

(4) Daniel r. The Directors, etc- of the Metropolitan R. W. Co., L. R-, 5 

H.L.4S- 

(5) Ellis v. Sheffield Gas Consumers Co., 2 E. & B. 767. 

(6) Hawkin v. Bourne, 8 M. & W. 703 ; Lindley Comp. 159 ; Canada 
Central Ry. Co. v. Murray, S S- C. R. 313. 

(7) Lindley Comp. 159. (8) 8 C. B. 668. 



ORGANIZATION AND MANAGEMENT OF RY. COMPANIES. 35. 

pressed the view which has been adopted by later authorities, 
that a company is bound by the acts of persons who take 
upon themselves, with the knowledge of the directors, to act 
within the limits of their apparent authority ; and that strangers 
dealing bonafide with such persons have a right to assume 
that they have been duly appointed, (i) 

44. A ratification, to be imputable to a company, must be Acquiescence, 
made directly by its shareholders, or indirectly through their ratification, 
agents acting within the limits of their real or apparent authority; 

and in order to establish ratification by the shareholders or their 
agents, it must be shown : i. That the parties alleged to have 
ratified the contract knew what it was ; or having their attention 
drawn to it, did not choose to inquire into it. (2) 2. That they 
have in some way recognized and adopted it. (3) 

If these two essential points are established, there will still 
remain for consideration the question whether the recognition and 
adoption have been in proper form. (4) 

45. Since the case of Fitzherbert v. Mather, (5) it has been Notice, 
an undoubted rule of law that notice to an agent is notice to his 
principal ; but what shall be deemed sufficient, in the case of 
constructive notice to a principal, in order to bind him through 

his agent, has been the source of considerable litigation. 

In England the rule is now that the knowledge of an agent is 
the knowledge of his principal, and his principal is affected 
thereby, whether such knowledge be acquired by the agent in the 
course of his employment or otherwise. (6) 



(1) See Lindley Comp. 160. 

(2) La Banque Jacques Cartier v. La Banque, etc., de Montreal, 13 App. 
Cas- in. 

(3) O'Brien . Credit Valley Ry. Co., 25 U. C. C. P. 275 ; Baby v. The 
Great Western Ry. Co., 13 U. C. Q. B. 291 ; Bury v. Corriveau Silk Mills, 
M. L. R., 3 S. C. 218; Soc. de Construct. d'Hochelaga -c. Soc. de Construe., 
etc., 4 Q. B. R. 199 ; Hamilton & P. D. Ry. Co. v. The Gore Bank, 20 Chy. 
190. 

(4) Lindley Comp. p. 178. (5) I T.R. 15. 

(6) Dresser v. Norwood, 17 C.B., N.S. 466 ; and see Carter v. Molson, 
10 App. Cases, at pp. 68-711. 

3 



CHAPTER III. 



SHARES AND SHAREHOLDERS. 



1. Capital stock. 

2. Increase. 

SUBSCRIPTION. 

3. Before incorporation and or- 
ganization. 

4. After organization. 

5. Conditional. 

6. Payment in supplies, services, 
etc. 

7. Repudiation. 

8. Special subscriptions. 

9. Other cases. 

10. Effect of statutory change . 

TRANSFER. 

11. Shares may be transferred. 

12. When complete. 

13. Form of. 

14. Right to. 

15. Liability of company for frau- 
dulent transfer. 

1 6. Measure of damages for neglect 
to transfer. 

17. Mandamus to compel. 

18. Transmission otherwise than 
by transfer. 

19. Company not bound to see to 
trusts, etc. 

20. Shares " in trust." 

21. Want of authority or power in 
the transferor . 

22. Succession duty unpaid. 

23. Interest on sums paid in ad- 
vance. 

ACTIONS BY CREDITORS AGAINST 
SHAREHOLDERS. 

24. Liability of shareholders . 

25. Execution against the company . 

26. Cause of action in such cases. 

27. How action against shareholder 
should be commenced, 

28. Defences. Payment. 

29. " Cessation of com- 

pany. 



30. Defences. Non-performance of 

conditions. 

31. " Irregu la rities . 

32. " Shares remitted to 

company. 

33. " Shares acquired as 

paid up. 

34. " No notice of allot- 

ment. 

35. Never a shareholder. 

36. ' ' Change of capital. 

37. " Difference between 

memo, of associa- 
tion and prospec- 
tus. 

38. " Ultra vires. 

39. " Fraudulent misre- 

presentations. 

40. " Forfeiture. 

41. " Agency. 
" Transfer- 



42. 
43- 
44- 
45- 
46. 



' ' Defective service. 
" No contract. 
" Set-off. 
CALLS. 

47. Directors may make. 

48. Notices. 

49. Payment. 

50. Payment by note. 

51. Forfeiture for non-payment of 
calls. 

UNISSUED SHARES. 

52. Sale of. 

PAID UP STOCK. 

53. Issue of. 

DIVIDENDS AND INTEREST. 

54. Dividends. 

55. Net profits, what are. 

56. Liability of directors for pay- 
ment of dividends out of capital. 

57. Preference shares. 



SHARES AND SHAREHOLDERS. 



35 



1. The stock of the company is declared by sec. 75 of the Act Capital stock, 
to be personal property ; and is subscribed for in the first instance 

upon the books of the company opened for that purpose by the 
provisional directors under the provisions of sec. 33. The 
amount of the capital stock is fixed by the special Act, and 
must be divided into shares of $100 each, (i) 

2. The original capital stock may be increased from time to Increase, 
time, to any amount, by vote of the holders of two-thirds in value 

of the subscribed stock, at a meeting expressly called by the 
directors for that purpose after 20 days special notice in writing 
to each shareholder. The increase is^subject to the approval of 
the Governor-in-Council. (2) 

Subscription. 

3. It has been strongly contended that there is a difference Subscription 
between subscriptions before the company is in existence and for stock . 
afterwards. The argument may be stated as follows. Before a porati 
company is incorporated, there is an offer on the part of those organization 
wishing to become stock-holders to take shares. It is only, at n e 
the most, a mere proposition to take stock, and not a binding 
promise to take and pay, (3) and certainly does not constitute 

a contract which could be enforced by the party subscribing. 
He could not by his offer oblige the provisional directors* to 
allot any of the shares to him. Even after incorporation a larger 
amount of stock than required might be subscribed for; and 
the power of the provisional directors to reject such applications, 
as they please, is not doubtful. (4) But the question is whether 
this offer, when accepted by the allotment of the stock, would 
become a binding contract upon notice of the allotment to the 
subscriber in proper time. It has been held in Quebec that a 
subscriber to a company to be incorporated, but who never 
subscribed after incorporation, nor received notice of allotment, 



(1) Sec. 35. 

(2) Sec. 37 ; ubi supra p. 14. 

(3) Tessier, J., in Arless v. Belmont Mfg. Co., M. L. R., i Q. B. 340. 
Henry, J., in Nasmith . Manning, 5 S. C- R. 441. 

(4) Sec. 34, ubi supra, p. 13. 



36 THE RAILWAY LAW OF CANADA. 

nor paid calls, is not liable for the stock, (i) And this view has 
been sustained by the Supreme Court. (2) 

Nasmuth v. The question arose in Nasmith v. Manning (3) in this way : 
Manning. Banning made an application to the provisional directors of 
the T. G. & B. Ry. Co., for shares, and signed the stock book, 
which was headed by an agreement by the subscribers to 
become shareholders for the amount set opposite their names, 
and upon allotment by the company they covenanted to pay 
ten per centum of the amount of the said shares and all future 
calls. The company, on the i st July, passed a resolution instruct- 
ing their secretary to issue allotment certificates to each share- 
holder for the amount of shares held by him. The secretary 
prepared them, including one for Manning, and handed them to 
the company's broker to deliver to the shareholders. The 
brokers published a notice, signed by the secretary, in a 
daily paper, notifying subscribers to the capital stock of the 
T. G. &B. Ry. Co., that the first call of ten per cent, on the 
stock was required to be paid immediately to them. The res- 
pondent never called for or received his certificate of allot- 
ment, and never paid the ten per cent., and swore that he had 



(1) Union Nav. Co. v. Couillard,2i L. C. J 71 (Q.B.I877) ; Arless v. Bel- 
mont Mfg. Co., M. L. R., I Q.B. 340 (1885) ; Rascony v. Union Navigation 
Co., 24.L.C. J. 133 (1878) ; but see Windsor Hotel Co. v. Date, 27 L. C. J. 7 
(S. C. 1881). 

(2) Nasmith v. Manning 5 S. C. R. 417 ; Magog Textile & Print Co. v. 
Price, 14 S. C. R. 664 (10 L. N. 331). The same f. Dobell, ib., affirming 
9 L. N. 348, Q. B. ; 12 Q. L. R. 204, Q. B. ; 14 R. L. 600, Q. B. 

A subscription of shares in a company proposed to be incorporated is a 
mere proposition to take stock thereio, and is not binding ; but where the 
subscriber's name has been inserted in the letters patent, even without his 
knowledge or consent, he is liable as regards third parties. Banque d'Hochelaga 
r. Garth, M. L. R , 2 S.C. 201. The latter part of this decision was re- 
versed in the Privy Council, and the letters patent annulled. 15 App. Cas. 414. 

In an action by a judgment creditor of a railway company against the de- 
fendant to recover the amount of the shares which it was alleged ' ' he had sub- 
scribed for," to become a member of the company to the extent of said shares, 
plaintiff produced stock book of company,but failed to prove defendant's signa- 
ture there appearing. Held : that the fact of defendant's name appearing in 
the act incorporating company as one of the provisional directors will not be 
considered as authorizing the court to presume he ever became a subscriber 
of shares, more especially when there is no proof of his having acted as a pro- 
visional director, or that he had attended any of the meetings of the company. 
Rogers u. Kersey, 15 L. C.R. 141 (1864.) See Wilson c. Ginty, 3 O. A. R. 
124. 

(3) 5 S. C. R. 417- 



SHARES AND SHAREHOLDERS. 37 

never had any notice of the allotment having been made to him. 
The Supreme Court held, affirming the Ontario Court of Appeal, 
that the document signed by Manning was only an application 
for shares, and that it was necessary for the appellant to have 
shown notice within a reasonable time of the allotment of shares to 
respondent, and no notice whatever of such allotment had been 
proved. From this judgment, Ritchie, C.J. , and Gwynne, J., 
dissented, Strong,}., was absent, and Taschereau, J., stated that 
he felt great embarrassment in coining to a conclusion, and had 
vacillated a good deal about it. Unfortunately, for the sake of 
precedents, although leave was granted to appeal to the Privy 
Council, the case was settled before coming on for argument. 

4. It is to be noted that the decision in Nasmith v. Manning After organiz- 
only relates to subscriptions before organization of the company. atlon< 
As pointed out by Henry, J., who delivered the principal judgment 
in that case : (i) " We must look at this document from a stand- 
point very different from that we should occupy in the case of a 
subscription to the stock book of a company already in existence. 
A party in the latter case would, after his application for stock 
had been accepted, be called upon to sign the stock list in the 
book of the company kept for that purpose." And further on he 
says : (2) " If the signature of the respondent was to the regular 
stock book of the company after being organized, no allotment 
would require to be shown." 

There is no doubt that in England, the contract for subscription 
of shares is entered into in a somewhat more technical or formal 
manner. An application, in the first instance, is made in 
writing for a specified number of shares, which application is 
held to be a mere offer, and is generally open for acceptance by 
the corporation for only a limited time. (3) If the application be 
accepted, the corporation formally allots to the applicant the 
desired number of shares, and gives him a notice of allotment 
within the time limited, The notice is of the essence of the con- 



(i) At page 441, vol. 5, S. C. R. (2) At page 443. 

(3) Ramsgate, etc.,z/. Montefiore, L. R., I Exch. 109; Hebb's case, L. R., 
4 tq. 9; Gunn's case. L. R., 3 Ch. 40 ; Pellatt's case, L. R., 2 Ch. 527 ; 
Household, etc., Co. v. Grant, L. R., 4 Ex. Div, 216 ; Ward's Case, L, R,, 
10 Eq. 659 ; Harris' Case, L. R,, 7 Ch. 587. 



38 THE RAILWAY LAW OF CANADA. 

tract. So it is well settled in England, that, in order to make 
the contract to take up shares binding, there must be the applic-, 
ation in writing, the allotment of the shares to the applicant, 
and a communication to him of the notice of allotment, (i) 

But the reasoning of the English holdings upon this point pro- 
ceeds entirely from the method of acquiring stock subscriptions 
in vogue in that country. As remarked by Lindley, in his work 
on companies: (2) "Allotment and notice are, in truth, only 
material where there is no agreement without them. In the 
ordinary case of an application for shares, there is no agreement 
in the absence of allotment and notice of it ; but there may well 
be a binding agreement without either of them." 

This is well shown in the English case of Bird, (3) cited by 
Lindley, where the holding reads : " A director of a company 
applied for and subscribed an agreement to take additional 
shares. He was entered upon the register in respect of the addi- 
tional shares, but none were ever actually allotted to him. '1 he 
company being wound up, Held : that his name was properly on 
the register, and ought also to be placed upon the list of contri- 
butaries for such additional shares." 

The difference between the English system and that in vogue 
in this country is clearly pointed out in Lake Superior Nav. Co. 
v. Morrison, by Chief Justice Hagarty, (4) as follows : " If 
there had been applications to the directors for shares, offering 
to take stock, and, as often happened, to an amount exceeding 
the number to be taken, we can easily see how important the 
question of allotment would be. A man may signify his readiness 
to take stock, and desire to have a certain number of shares, and 
unless some shares were allotted to him, it could not be said 
that he was the holder of any shares. In the case before us the 
proceeding was of a totally different character. Parties were can- 
vassed to take stock, and by the act of subscription they actually 
subscribed fora specified number of shares, and expressly bound 
themselves to make payments thereon, as might be required by 
the board of directors. Little over half the capital stock was 
subscribed for, and no question did or could arise from the 



(I) Cook, Stockholder?, sec. 56. (2) p. 761. 

(3) 4 De G. J. & Sm. 200. (4) 22 U. C. C. P., p. 220. 



SHARES AND SHAREHOLDERS. 39 

course adopted, as to any act to be done by the directors to allot 
any number of shares." Again, in Smith v. Spencer (i) it was 
held that the subscription to the stock book of a company was 
sufficient evidence of the party subscribing being a shareholder 
under the definition of that term in the Railway Clauses Con- 
solidation Act, and that it was not necessary that scrip should 
be issued for the stock to constitute such subscriber a share- 
holder. 

This was also the view held by our Court of Review in Rascony 
v. Woollen Co. (2) It was there stated by Loranger, J., that 
allotment is not usual in this country as it is in England. The 
subscription in this case was subsequent to incorporation, and 
Nasmith v. Manning (3) was quoted to show that allotment is 
not essential to constitute a person a subscriber to a company 
already formed. (4) 

The question would seem to depend upon the form of the 
subscription. It is difficult to understand upon what principle 
a binding agreement may not be made to take shares in a com- 
pany, whether organized or not, provided it be clear, precise and 
unequivocal, and contains the usual essentials of a contract. 



(1) 12 U. C. C. P. 277. 

(2) M. L. R., 2 S- C. 382 ; and Alley v. Trenholme, 3 Q. R. (S. C ) 169. 

(3) 58. C. R.4I7. 

(4) Where a person has subscribed for shares in the capital stock of the 
company which is being organized and has assumed the position of shareholder, 
and has paid a portion of the calls made from time to time on the stock, he 
cannot set up alleged irregularities in the organization of the company as a 
valid reason for avoiding payment of the remainder of the calls. Windsor 
Hotel Co. & Lewis et al., 4 L. N. 331 ; 26 L. C. J. 29 (Q. B. 1881) 

Illegal acts on the part of the directors cannot be set up in defence to an 
action for calls by liquidators or assigns representing the creditors of the 
company. Ross et al. v. Can. Agr. Ins. Co., 5 L. N. 23, 1882. 

Appellant was solicited to subscribe for shares, and paid $500, and signed 
his name to a subscription book, the columns of amount of subscription and num- 
ber of shares being at the time left in blank. These columns were afterwards 
filled up for 50 shares by an agent of the company in appellant's presence, 
but without his consent. Appellant then tried to be relieved from the surplus 
shares without success, and later on received a dividend on the paid up capital 
and gave a receipt. 

Upon an action to recover calls on 50 shares at $ loo, alleged to have been 
subscribed. 

Held (reversing Q. B. decision, 6 Q. L. R. 147 (Q. B.) : That the evidence 
showed that the appellant never contracted to take 50 shares, and that the 
receipt given for the dividend on amount paid in was not an admission of the 
liability for a larger sum, and he was not estopped but he was never in fact 
holder of 50 shares. Cote' v. The Stadacona Ins. Co., 6 S. C. R. 193. 



4O THE RAILWAY LAW OK CANADA. 

The question should be determined in each case on the prin- 
ciples which govern ordinary contracts, (i) 

It would be advisable to have subscription forms drawn in. 
precise and unequivocal terms. 

Conditional. 5 Subscription to sto-k in a railway company may be condi- 
tional, (2) but the conditions must be performed before calls can 
be made thereon, (3) although it is not necessary that they 
should be accurately fulfilled ; it is sufficient if they be materially 
carried out. (4) Thus, where defendant subscribed on condition 
that the road be constructed to within ^ of a mile of his 
tannery, it was held that defendant would be liable for calls if 
the road ran so near to his tannery as to substantially fulfill the 
condition. (5) An American railroad company were induced 
to extend their line to the Canadian boundary, on the condition 
that the inhabitants of the neighborhood would contribute their 
subscriptions to a certain quantity of shares in the road. The 
company's part of the condition was held to have been properly 
performed by bringing their line to the boundary in the neigh- 
borhood asked to contribute. And one of the subscribers could 
not escape his liability because the company had not brought 
their terminus to a point where he believed it was to be. The 
company were at liberty to select any convenient spot on the 
boundary line. (6) If an offer is made to take shares condi- 
tionally or upon unusual terms, a clear acceptance of these 
conditions or terms must be proved in order to constitute a bind- 
ing agreement; and the mere fact that the shares have been 
placed in the applicant's name is not sufficient to bind him. (7) 
The conditions must be assented to by those who are com- 
petent to bind the company; (8) they must be expressed in the 
subscription, (9) and must not be a secret qualification. (10) 

(1) Per Ritchie C. J. in Magog Textile Co. v. Price 14 S. C. R. at p. 671. 

(2) Rogers v. I-aurin, 13 L. C. J. 175, Q. B. 1863. 

(3) Massawippi Railway Co. v. Walker, 3 R. L. 450 ; Rogers v. Laurin, 13 
L.C.J. 175 (Q.B. 1863). 

(4) Stanstead Ry. Co. z: Brigham, 17 L. C. R. 54 (S. C. 1866). 

(5) Ibid. 

(6) Conn. & Passumpsic Ry. Co. v. Comstock, i R. L. 589 (Q. B. 1870.). 

(7) Lindley Comp. 17. Shackleford's Case, L. R., I Ch. 567. 

(8) Howard's Case, I Ch. 561 ; National Ins. Co. v. Chevrier, i L. N.59I 

(9) Jones -, Montreal Cotton Co., I L.N. 450, and 24 L. C. J. 108. 
(10) Port Dover & Lake Huron Ry. Co. v. Grey, 36 U. C. Q. B. 426. 



SHARES AND SHAREHOLDERS. 41 

6. The company are not bound by an agreement between a Payment in 
subscriber and those who solicited him to become a shareholder, tilces/etc. 8 * 
that he would pay for his stock in supplies to the company, (i) 

Nor where the agreement is to pay for stock in services ; (2) or 
where the agreement is made with a provisional director, a chief 
promoter of the company, on the condition that the subscriber 
shall receive the contract for building the road. (3) 

7. It is too late for a subscriber to repudiate his subscription Repudiation, 
when he has paid the first instalment and taken an active part, 

both as solicitor and shareholder, in promoting the affairs of the 
company, he being at the time in possession of the facts which 
gave rise to his repudiation. (4) 

8. Shares subscribed to in a special subscription list, and made Special sub- 
payable upon the performance of a certain condition, are payable cn P tlons - 
without the making of regular calls. (5) 

9. An Act of incorporation maybe for two purposes, e.g. : the other cases, 
construction of the line from one point to another, and giving 

the company power to extend the line to another point. In 
such case it is quite competent for the company to receive sub- 
scriptions for stock to be applied to the main line, and the ex- 
tension separately. (6) It is also competent for the parties res- 
pectively subscribing for these stocks to contract with the 
provisional directors, that beyond the usual ten per centum paid 
upon subscription, no other money whatever shall be called 
for, nor any calls be made, until a particular sum shall be sub- 
scribed for the main line, or for the extension line, as the case 
may be. (7) 

10. Where a person subscribes for shares in a company incor- Effect of sta- 
porated for certain specified purposes, and not otherwise, yet if the tutol 7 change, 
shareholders apply to Parliament for extended powers, whereby 

the nature of the business is varied and extended, and, in the 

(1) Christin v. Union Nav. Co., Ram. Dig. 391 (Q. B. 1882). 

(2) Nat. Ins. Co. v. Hat ton, 24 L. C. J. 26 (Q. B. 1879), 2 L. N. 238. 

(3) Wilson v. Ginty, 3 O. A. K. 124. 

(4) Nat. Ins. Co., r. Hatton, 24 L. C. J. 26 (Q. B. 1879), 2 L. N. 238. 

(5) Stanstead & Connecticut Ry. Co. v. Brigham, 17 L. C. R. 54 (S-C. 
.1866) 

(6) Port Dover & Lake Huron Ry. Co. v. Grey, 36 U. C Q. B., p. 438. 

( 7 ) Ibid. 



THE RAILWAY LAW OF CANADA. 



opinion of the subscriber, rendered more hazardous than when 
he first became a member, such Act of Parliament is binding 
upon all shareholders, whether assenting or not to the applica- 
tion to Parliament, (i) 

Transfer. 

Shares may u. Shares in the company may, by the holders thereof, be sold 

be transferred. /,, 

and transferred by instrument in writing, (2) made in dupli- 
cate, one part of which shall be delivered to the directors, to 
be filed and kept for the use of the company, and an entry 
whereof shall be made in a book to be kept for that purpose ; 
and no interest/)r dividend on the shares transferred shall be paid 
to the purchaser until such duplicate is so delivered, filed and 
entered. (3) 

12. The transfer is complete when entered in the stock ledger 
in the name of the transferee, although the acceptance has not 
been signed. And when so entered, a seizure of the shares under 
an execution against the transferor will not be upheld. (4) 

13. Transfers are made in the form provided by sec. 74, except 
in the case of paid-up shares, which may be made in such form 
as the by-laws prescribe, (5) " but no shares shall be transferable 
until all previous calls thereon have been fully paid up, or until 
the said shares have been declared forfeited for the non-payment 
of calls thereon ; and no transfer of less than a whole share 
shall be valid." (6) 

14. Where shares are transferable, (7) and no restriction 

(1) Canada Car & Manufacturing Co. v Harris, 24 U- C. C. P. 380, and 
cases there cited. 

(2) The verbal testimony of the secretary of a railway company, to the 
effect that it appeared by the books of the company that the shares originally 
in the name of the defendant had been transferred before the institution of 
plaintiff's action, who sues as a creditor of the company, to recover the 
amount unpaid on such shares, is insufficient to establish the fact of such 
transfer. Cockburn v. Beaudry, 2 L. C. J. 283 

(3) Sec. 73. (4) Woodruffs. Harris, II U. C. Q. B. 490. 
(5) Sec. 74. (6) Sec. 75. 

(7) Where a company are asked by a transferee to register stock transferred 
to him by another person, the company are justified in refusing to do so in 
respect of such shares as appear only in an entry of credit to the transferor 
of the shares in the ledger, but which are not standing in his name in the 
stock book. MacMurrick v. Bond Head Harbour Co., 9 U. C. (J. B. 333^ 
and see Cockburn v. Beaudry, 2 L. C. J. 283, supra- 



When com- 
plete. 



Form of. 



Right to. 



SHARES AND SHAREHOLDERS. 43 

on the right to transfer them is imposed by the by-laws of 
the company, or by the statute or charter by which it is 
governed, the right to transfer is absolute, and the directors 
cannot prevent a transfer, even if they are bona fide of opinion 
that it is for the interest of the company that they should do so. 
(i). So under the section of a special Act incorporating a 
railway, which section is similar to sec. 73 of the present Rail- 
way Act, it was held that the clerk could not refuse to register a 
transfer of stock from one municipal corporation to another, on 
the ground that no by-law had been passed sanctioning such 
transfer. (2) Even a transfer to a pauper, in order to escape 
from liab lity, is valid, and cannot be prevented. (3) 

But notwithstanding the length the courts have gone in hold- 
ing the right to transfer to be free from all implied restriction, a 
transfer which is fraudulent in the sense of not being a real 
transfer out and out, or a transfer made for fraudulent purposes, 
(4) can be lawfully objected to by the directors. (5) But a 
transfer to avoid future liability or to multiply votes is held not 
to be fraudulent. (6) 

Where, by the Act of incorporation, certain definite restrictions 
are placed on the right to transfer shares, the directors are 
bound strictly by the terms of those restrictions. (7) And 
where the Act requires the consent of the directors to a transfer, 
such power of assenting or dissenting to a transfer is reposed 
in them as trustees, and they must exercise that power accord- 
ingly. (8) 

(1) Lindley Comp. 464. Moffatt v. Farquhar, 7 Ch. D. 591 ; Stranton 
Iron Co., 16 Eq. 559 ; Weston's Case, 4 Ch. 20. A company incorporated 
27-28 Vic., cap. 23, has not power to refuse to allow a transferor snares of 
its stock, without assigning a sufficient reason. Smith v. Can. Car. Co., 6 
P. R. 107. 

(2) Mun.Corp.of Vespra & Sunnidale v. Beatty, 17 U. C. Q. B. 540. 

(3) Lindley Comp. 464. 

(4) A transfer of shares by a stockholder in a joint stock company, which 
is made with the object and has the effect of reducing the capital stock 
of the company, is void, and all resolutions of the directors authorizing such 
transfer are illegal and ultra vires. Ross v. Worthington, 5 L. N. 140. Vide 
also Ross v. Fiset, 8 Q. L. R. 251, p 56, infra. 

(5) Lindley Comp. 465 ; Weston's case, 4 Ch. 20. 

(6) Lindley Comp. 465. (7) Weston's Case, 4 Ch. 20. 

(8) Exparte Penney, 8 Ch. 446 ; Poole v- Middleton, 29 Beav. 646 \ 
Robinson v* Chartered Bank, I Eq. 32- 



44 THE RAILWAY LAW OF CANADA. 

Section 58 of the Act gives the directors power to make 
by-laws for the disposition of the stock, etc. 

In the absence of any provision of the special Act and of any 
by-law regulating this matter, the general law on the subject 
seems to be clear, that ihe powers of directors to refuse or 
permit a transfer of stock can be derived only from express 
authority, and cannot be extended by implication, (i) "Such a 
power," says Judge Dillon in Johnson v. Laflin, (2) "is so 
capable of abuse, and so foreign to all received notions and the 
universal practice and mode of dealing in these stocks, that it 
cannot, in the absence of legislative expression, be held to 
exist." 

In the United States, a transfer of shares in a failing concern, 
made by the transferor with the intention and for the purpose of 
escaping liability as a shareholder, to a person who for any 
cause is incapable of responding in respect of such liability, is 
void both as to creditors of the company and as to other share- 
holders. (3) But, on the other hand, it has been held that if 
the transfer is bonafide, ?nd the transferor is ignorant of the 
insolvency of the transferee, and the company is not insolvent, 
the transfer is effectual, and the transferor is released from liabil- 
ity. (4) 

The English rule goes further, as stated above, and a share- 
holder may transfer his shares to a man of straw for . nominal 
consideration, even although the sole purpose of such a transfer 
be to escape liability. But the transfer must be out and out, 
and not merely colorable and collusive. (5) 

In this country the English rule has been fully adopted. (6) 

In a recent New Brunswick case, (7) it was Ileld : "that 
where a director or other stockholder of the society had, prior 

(1) Weston's Case, 4 Ch. App. 20; Gilbert's Case, 5 Ch. App. 559; 
Chappell's Case, 6 Ch. App. 902; Stranton Iron & Steel Co., 16 Eq. 559; 
Moffatt v- Farquhar, 7 Ch. D. 591. Johnson v. Laflin, 103 U. S. 800. 

(2) 103 U. S. 800. (3) Cook, Stockholders, 263. 

" (4) Miller v- Great Repub. Ins. Co., 50 Mo. 55 ; Cole v. Ryan, 52 Barb. 
1 68. 

(5) Cook, Stockholders, 266, and numerous cases there cited. 

(6) Held: that the insolvency of the assignee was no objection to the trans- 
fer, the only condition to a valid transfer being the payment of all calls. 
Moore et al. v- McLaren, n U. C. C. P. 534 ; see also extract from report 
of same case, infra p. 45 . 

(7) 30 N. B. 628. 



SHARES AND SHAREHOLDERS. 45 

to the application for winding up, transferred shares in the 
society bona fide, such transfer was valid, and the transferor was 
not liable to be placed on the list of contributories, even though 
the transfer was made for the purpose of avoiding his liability 
for calls, with the knowledge that the society was in insolvent 
circumstances, and that the transferee was unable to meet any 
calls that might be made upon him, and although the considera- 
tion for the transfer was merely nominal , or even although he 
paid the tr?nsferce money to induce him to accept the transfer. 1 ' 

There is every reason to suppose that the Supreme Court 
would adopt this view, as the transfer of shares is a subject 
relating to the trade policy of the country, which is very dis- 
tinctly in favor of freedom from restraint. And in a very recent 
House of Lords case, (i) Lord Herschell, quoting Blackburn,. 
J., in in re Bahia & San Francisco Ry. Co., (2) said " that 
when joint stock companies were established, it was a great 
object that the shares should be capable of being easily trans- 
ferred." 

The fact that The Railway Act does not provide for such a 
contingency as we are now debating, excepting in so far as power 
is given to the directors to make by-laws regulating the matter, 
must lead us to the same conclusion as that arrived at by the Su- 
preme Court of New Brunswick in the above case, where it was- 
said: " The liability of shareholders is the entire creation of the 
Legislature, and cannot be any more or less. If it was intended 
that there should be any restriction on the right to transfer, or of 
ceasing to become a stockholder, the Legislature could have im- 
posed it, and they must have known that this could be done, and 
they did not provide for such a case, and it would be simply an 
act of legislation for the Court to attempt to do it." 

Again in Ontario it has been held that the insolvency of the 
assignee of the stock is no ground for vitiating the assignment, 
the only condition precedent for the valid assignment of stock 
being the payment of calls. (3) This case came under The Rail- 
way Clauses Consolidation Act, 14 & 15 Vic.,c. 51, the relevant 

(1) The Balkis Consolidated Co. & Tomkinson, 1893, App. Cas. 396- 

(2) L. R., 3 Q. B. 584. 

(3) Moore v. McLaren, it U. C. C. P. 534 ; and see Reg. . Lambourn 
Valley Ry. Co., 22 Q. B. D. 463 (if" 



4 6 



THE RAILWAY LAW OF CANADA. 



Liability of 
company for 
fraudulent 
transfer. 



Measure of 
damages for 
neglect to 
transfer. 



clauses of which have been re-enacted almost verbatim in the 
present Railway Act. 

Finally, Mr. Wood, in his work on Railways, says : " Directors 
have no right to refuse a transfer because, in their judgment, the 
motives and purposes of the parties are improper, or because the 
transfer may injuriously affect the company, (i) 

15. P., the owner of numbered shares in a joint stock company, 
transferred them to persons who were registered in the company's 
books as proprietors of shares. P. afterwards fraudulently ex- 
ecuted a transfer of the shares for value to T.,who sent the trans- 
fer to the company, and received from them a certificate under 
their common seal, stating that he was the proprietor of the 
shares. T., acting bonafide on the faith of the certificate, sold the 
shares, but the company refused to register the purchaser as 
the proprietor, on the ground that after granting the certificate 
to T. they had discovered that he was not the real owner of the 
shares. It was held that the company were estopped by their cer- 
tificate from denying that T. was the proprietor of the shares, and 
that he was entitled to recover from the company the damages 
which he had in fact sustained owing to their refusal to register 
the purchaser. (2) 

16. An action was brought against a railway company for ne- 
glecting to register a transfer of shares in the books of the company 
which had been transferred by the plaintiff to a creditor as col- 
lateral security, the arrangement being that the creditor should 
sell the shares at the best rate, and after deducting the amount of 
claim, pay ov;-r the balance to the plaintiff; and after repeated 
demands on the company to register such shares, they were finally 
registered and sold ; but in the interim a great depreciation had 
taken place in their value, and plaintiff brought action byway of 
damages for the difference. 

The court held, that the plaintiff was entitled to such action 
and that the measure of damage was the difference between the 
price of the stock at the time of refusal and the price at the time 
of the subsequent registration of stock. (3) 

(1) Ed. 1885, p. 253 ; and see Moreton, J., in Crocker v. Old Colony 
Railroad Co., 30 Alb. L. ]. 495 ; and Cook, Stockholders, 385,395. 

(2) The Balkis Consolidated Co. u. Tomkinson (1893), App. Cas. 396. 
,(3) Grand Trunk Ry. Co. v. Webster ; 6 L. CJ. 178 (Q. B. 1861). 



SHARES AND SHAREHOLDERS. 47 

17. It has been held in a recent English case, (i) that where Mandamus to 
an action for mandamus will lie, the prerogative writ will not be com P e 
allowed to issue to compel transfer of shares. (2) This case seems 
to mark a new departure in this respect, and it will now be seldom 
necessary or proper to apply for a prerogative writ to settle 
disputes between companies and their members. (3) 

In order that a mandamus may lie to compel a company to 
transfer shares, there must be a distinct refusal on the part of the 
company to do so. A refusal in effect, though not in direct 
terms, would be sufficient to give rise to such an action. But no 
rule can be laid down for determining whether there has been a 
refusal or not . (4) 



(1) The Queen ?;. Lambourn Valley Ry. Co-, 22 Q. B. D. 463. 

(2) Where a petition for a mandamus was demanded against a railway 
company, to compel it to make the necessary entries in their books of the sale 
to the petitioner of a number of shares in the capital stock of the company : 

Held to be the duty of a clerk or secretary to enter the names and places 
of residence of the owners of stock in the company, and that the Superior Court 
had jurisdiction to enforce such order under 12 Vic., cap. 41. MacDonald v. 
Montreal & New York Ry. Co., 6 L. C. R. 232 (1856). 

In an action against a Harbour Co., for refusing to register a transfer of 
.stock by one S. to the plaintiff. 

Held : that although S being president of the company might perhaps have 
registered his assignment himself, yet that the refusal of the secretary to do so 
founded a good ground of an action against the company. MacMurrick v. Bond 
Head Harbour Co., 9 U. C. Q. B. 333. 

N. was the banker of a railway company ; he was also one of the directors. 
Under certain business arrangements of the company he was entrusted with 
the possession of certificates which represented shares, and those shares he held 
as trustee for the company. He converted the shares. The conversion was 
discovered. He gave an explanation, replaced the share?, and continued to 
hold the certificates as before, and stood on the register as the apparent owner 
of them. He borrowed money of R., and deposited the certificates with R., 
who held them for some time without having taken any step to be registered 
as the owner of the shares. R.'s widow and executrix applied to be registered 
as the owner ; her application was refused. She moved for a mandamus to 
compel registration ; the Court of Q. B. refused the mandamus. The Ex- 
chequer Chamber reversed that decision, and ordered it to issue. Held : by 
House of Lords, that this was the ordinary case of a trustee abusing his trust ; 
that if R. had made proper inquiries he would have found that H. was only 
a trustee ; that negligence sufficient to affect their equitable title could not 
be imputed to the directors and the company, and consequently the equitable 
title of R. could not prevail against the earlier equitable title of the company. 

By the Lord Chancellor : Whether a transfer of shares in a company can or 
cannot be made without the production of the certificates of the shares is a 
matter entirely within the discretion of the directors. Shropshire Union 
Rys. & Canal Co. v. Regina, L. R;, 7 H. of L. 496. 

(3) Lindley Comp. 603. 

(4) Lord Denman in Reg. v. Thames & Isis Navigation, 8 A. & E. 904. 



48 THE RAILWAY LAW OF CANADA. 

In Ontario, however, it has been held that when several demands 
to transfer the stock were made, and delays and evasive answers 
given, without in direct terms refusing, a mandamus could be 
directed to the company, (i) 

Transmission 18. If any share in the capital stock of the company is trans- 
otherwise than m ittedby the death, bankruptcy or last will, donation or testament, 
by transfer. , . 

or by the intestacy of any shareholder, or by any lawful means 

other than transfer, the person to whom such share is transmitted 
must deposit in the office of the company a statement in writing, 
signed by him, which shall declare the manner of such transmis- 
sion, together with a duly certified copy or probate of such will, 
donation or testament, or sufficient extracts therefrom, and such 
other documents or proof as are necessary, and without such 
proof the person to whom the share is so transmitted, as afore- 
said, shall not be entitled to receive any part of the profits of the 
company, or to vote in respect of any such share as holder 
thereof. (2) 

As to what proofs would be necessary ; if there were a will, in 
Quebec the production of a notarial copy if in notarial form, or 
of a certified copy of the probate if in holograph or English form, 
would be sufficient ; in the other provinces, a certified c opy of 
the probate and letters of administration. 

In the case of intestacy, in Quebec the company might require 
certificates of the death of the shareholder, (3) and the birth of 
the heirs claiming, (4) extracted from the official registers of civil 
status, (5) as well as affidavits or declarations or such other proof 
as might be necessary to establish heirship ; and if the shares 
were to be divided among the heirs, a copy of the deed of parti- 
tion. (6) 

In the other Provinces, in the case of intestacy, a certified 

copy of letters of administration, issued in accordance with the 

law of the particular Province, would seem to be all that would 

be necessary. 

Company not 19. The company is not bound to see to the execution of 

bound to see anv t rus t whether express, implied or constructive, to which any 
to trusts, etc. J ' 

(1) In re. Goodwin & The Ottawa & Prescott Ry. Co., 13 U. C. C. P. 254. 

(2) Sec. 76. (3) C. C. 67. 

(4) C. C. 54. (5) C. C. 42-50. 

(6) C. C. 689-711. 



SHARES AND SHAREHOLDERS. 49 

share or security issued by it is subject, and whether or not the 
company has had notice of the trust, and it may treat the regis- 
tered holder as the absolute owner of any such share or security, 
and, accordingly, shall not be bound to recognize any claim on 
the part of any other person whomsoever, with respect to any such 
share or security, or the dividend or interest payable thereon, (i) 

This section is accompanied with the proviso that nothing 
therein contained shall prevent a person equitably interested in 
any such share or security from procuring the intervention of 
the Court to protect his rights. 

Similar provisions to the above, contained in Acts relating to 
joint stock companies, have been given the fullest effect to both 
in England (2) and in this country (3) in protecting the corpor- 
ation from claims in connection with trusts, whether express or 
implied, to which their shares might be subject. 

If, however, the company were to deal with, for their own bene- 
fit, stock held in trust or subject to a trust of which they had 
notice, they would be obliged to account to the true owner for 
the shares, should it appear that the person from whom they got 
the shares had not authority to deal with it. (4) 

2O. And in such a case where the shares are held by a person shares 
" in trust," these words import an interest in some other person, trust." 
though not in any specified person, and clearly show an infirmity 
or insufficiency in the holder's title ; and are enough to put the 
company upon enquiry. (5) 

But' the contrary would seem to be the rule, and the section 
would have its full force and effect, where the company merely 
allowed a transfer to a third person, and had no pecuniary 
interest in the transaction ; provided always that the transferor 
were not devoid of authority to transfer. 



(1) Sec. 77, as amended by 55-56 Vic., cap. 27. 

(2) Bank of Eng. v. Hartga, 3 Vesey 55 ; Bank of Eng. v. Parsons, 5 
Vesey 665 ; Bank of Eng. v. Lunn, 15 Vesey 583; Gray v. Johnston, L. R., 3 
H. of L. I ; ex parte Santa Barbara Mining Co., 38 W. R. 711 (Coleridge, 
C.J., 1890). 

(3) Simpson v. Molsons Bank, to be reported in Vol. 3 or 4, Q. R. 
(Q. B.) ; confirmed in P. C. 1895 (not yet reported.) 

(4) Bank of Montreal v. Sweeney, 56 L. J. P. C. 79 ; and L. R., 12 App. 
Cas. 617. 

(5) Ibid. 



50 THE RAILWAY LAW OF CANADA. 

Want of au- 21. Where the want of authority is apparent, the company 
eHn the^rans- m 'g nt be held accountable to the true owner. For instance, in 
feror. Quebec, where shares in a bank stood in the name of a tutor to a 

minor, and the bank allowed the transfer to be made by the tutor, 
without the authorization of the Court upon the advice of a 
family council, as required by the laws of that Province, (i) it 
was held that the bank was liable for the value of the shares 
(which had been dissipated and lost), on the ground that the 
tutor had no power to sell. (2) As was said by the Privy 
Council : " When this excess of power is once established, then 
the sale is in fact the sale of a stranger, and as if a stranger 
had sold these shares, and had then by fraud and forgery 
induced the bank to make the transfer of them in their 
books. " (3) 

Succession 22. In this connection it may be doubtful, where a Provincial 

duty unpaid. Legislature has imposed a tax or succession duty upon property 
transmitted by the decease of the owner, and has declared that 
all transfers of stock belonging to the succession shall be void 
and shall pass no title until the tax is paid, whether a company 
allowing a transfer to be made before the tax is paid would not 
be liable to those persons who might suffer thereby. The deci- 
sion of this question would depend largely upon the language of 
the particular statute. 

In the Province of Quebec such a statute was recently passe'd, 
(4) which not only declared that all transfers of property, shares, 
etc., belonging to the succession would be null and void, and 
pass no title, (5) but also lhatno executor, administrator, trustee, 
etc., should consent to or make any such transfer until the tax 
had been paid. (6) 

Applying the reasoning in The Bank of Montreal v. Simpson, 
(7) it would seem that in the case of a company allowing an execu- 
tor to transfer before the tax had been paid, the company would 
be liable to the beneficiaries if the shares or their proceeds were 
dissipated or lost; inasmuch as the sale would be an absolute 



(1) C.C. 297. 

(2) Bank of Montreal v- Simpson, 14 Moore P. C. 417. 

(3) Ibid, p. 445 ; and see Colonial Bank v. Williams, 15 App. Cas. 267. 

(4) 55-56 Vic. Cap. 17. (5) Ibid., sec. R. S. Q. 1191 *. (5) 
(6) Ibid. (7) 14 Moore P. C. 417. 



SHARES AND SHAREHOLDERS. 51 

nullity, and the power of the executor to sell, with which he 
might be clothed under the will, had been taken away by the 
statute, and the sale would be an act in excess of his powers until 
he should have fulfilled the condition precedent of paying the 
tax; just as the tutor's act in selling the shares in the Simpson 
case was held to be in excess of his power because he had not 
fulfilled the condition precedent of obtaining an authorization 
from the Court. 

The question, however, has not yet been judicially passed upon ; 
and in the meantime it would seem a safe and conservative 
course for companies to refuse transfers, where such an act is in 
force, until the succession duty to which their shares may be 
subject has been paid. 

23. Any shareholder who is willing to advance the amount of Interest on 
his shares, or any part of the money due upon his shares, beyond s " ms P aid in 
the sums actually called for, may pay the same to the company, 
and upon the principal moneys so paid in advance, or so much 
thereof as from time to time exceeds the amount of the calls then 
made on the shares in respect to which such advance is made, 
the company may pay such interest, at the lawful rate of interest 
for the time being, as the shareholders who pay such sum in 
advance, and the company, agree upon ; but such interest shall 
not be paid out of the capital subscribed, (i) 

Actions by Creditors against Shareholders. 

24. Every shareholder is individually liable to the creditors Liability of 
of the company for the debts and liabilities of the company, shareholders, 
to any amount equal to the amount unpaid on the stock held by 
him, and until the whole amount of his stock has been paid up ; 

(i) Sec. 85. 

In an action by McK. under the C. S. C., ch. 63, against K. et al., share- 
holders of a joint stock company incorporated under that Act, to recover the 
amount of an unpaid judgment they had obtained against the company, the 
defendants pleaded inter alia that they had paid up their full shares, and there- 
after and before suit had ob'ained and registered a certificate to that effect. 

Held : affirming the judgment of C. P., that under sees. 33, 34 and 35, chap. 
63, as soon as a shareholder has paid up his full shares and has registered, 
although not until after the 30 days mentioned in sec. 35, a certificate to that 
effect, his liability to pay any debts of the company then existing or there- 
after contracted ceases, excepting always debts to employees as specially 
mentioned in sec. 36. McKenzie t>. Kittridge, 4 S. C. R. 368. 



THE RAILWAY LAW OF CANADA. 



Execution 
against the 
company. 



but no such shareholder shall be liable to an action in respect 
of his said liability until an execution at the suit of the creditor 
against the company has been returned unsatisfied in whole or 
in part, (i) 

The word "creditors " used in this section is seen to be plural, 
but it is evident that a single creditor may pursue the remedy 
given by the statute. (2) 

25. With regard to executions against the company, all 
the court requires of the creditor is that he make proof of 
having made reasonable attempts to obtain payment from the 
company, and to discover assets presently available for his 
satisfaction, and that such attempts have been unsuccessful. (3) 
A mere general assertion by a solicitor's clerk, that writs of 
fieri facias have been issued against the company and returned 
nulla bona, is not sufficient. (4) But if attempts have been made 
to discover assets, and these attempts have been fruitless, and a 
writ of fieri Jacias has issued against the company, and been 
returned nulla bona, that will be sufficient until it is shown affir- 
matively that the company has assets ; and even if the company 
has assets which have not been taken into execution, still, if the 
court is satisfied that they are insufficient to satisfy the plaintiff, 
the action would lie. (5) The making of calls by directors is 
not a condition precedent to the creditor's right to recover. (6) 

It has been held to be not necessary that a fieri facias de bonis 
should be returned nulla bona from all the counties through 
which the railway runs. (7) 



Cause of ac- 
tion in such 
cases . 



26. The cause of action arises where the company has its 
principal office and where judgment is rendered for the debt 
due by the company, and execution is issued, and not at the place 
where the stockholder subscribed for his shares, if outside the 
district of the heid office. (8). 



(1) Sec. 86. 

(2) Moore v. Kirkland, 5 U. C. C. P. 452. 

(3) Moore v. Kirkland, 5 U. C. C. P. 452. Lindley Comp. 291. 

(4) Hitchins . The Kilkenny R. R. Co., lo C. B. 160, 15 C. 6.459. 

(5) Lindley Comp. 291. 

(6) Moore v. Kirkland, 5 U. C. C. P. 452. 

(7) Jenkins v, Wilcock, n U. C. C. P. 505. 

(8) Welch t>, Baker, 21 L, C. J. 97, 1876. 



SHARES AND SHAREHOLDERS. 53 

Where an action was brought in Ontario against a shareholder, 
there resident, of a company whose head office was in another 
Province where judgment had been obtained by the plaintiff 
against the company, and execution thereon had been returned 
unsatisfied, it was Held : that the cause of action against the 
shareholder was complete without the return unsatisfied of an 
execution against the company in Ontario, (i) 

27. Before the above case was decided, it seems to have HOW action 
been uncertain in Ontario whether the action against the share- against share- 
holder should be commenced by writ of summons or by writ of be ^mmenced 
scirt facias. In the earlier Ontario cases, the remedy was gen- 
erally enforced by action. (2) But in later cases the proceeding 
is by scire facias. (3) This is the proceeding adopted in England. 
(4) But the language of the English Statutes, relevant to this 
point, differs from ours in that leave must be obtained from the 
judge, in addition to the return of nulla bona, before the action 
can be taken against the shareholder. In the leading Ontario 
case, above mentioned, (5) it was decided that while in such 
cases scire facias was the appropriate form of proceeding against 
a shareholder within the jurisdiction, it does not follow, seeing 
the particular phrasing of the Act, that an action which is not 
scire facias will not lie. 

In Quebec the action is begun by' a writ of summons in the 
ordinary form. 

38. While payment in good faith by a shareholder to judg-r) e f ences . 

ment creditor is, for the purposes of the Act and to the extent of Payment, 
the payment, a good defence to an action by another creditor 
of the company, a merely colourable payment, e.g. to a trustee 
for the defendant, will not avail. (6) 

It was held a good defence in an action by a creditor of the 
company against a municipal corporation, a shareholder in the 

(1) Brice v. Munro, 12 Ont. App. Rep. 453. (1886), and see Jenkins v. 
Wilcock, II U. C. C. P. 505. 

(2) Moore v. Kirkland, 5 U. C. C. P. 452; Jenkins v. Wilcock, II TT. C. 
C. P. 505; Tyre v. Wilkes, 13 U. C. 11.482, 18 U. C. R. 46 and 126. 

(3) Gwatkin r. Harrison, 36 U. C. Q. B. 478; Page v. Austin, 26 U. 
C. C. P. no. 

(4) Ltndley Comp. 290. 

(5) Brice v. Munro, 12 Ont. App. 455. 

(6) Nasmith v. Dickey, 42 U. C. Q. B. 450; 44 Q. B. 414. 



54 THE RAILWAY LAW OP CANADA. 

company, that in pursuance of an agreement at the time of sub- 
scription, the municipal corporation had paid for their stock to 
the contractors of the road as the road progressed, said contrac- 
tors having a 999 years' lease of the road, and having mortgaged 
their lease to trustees to secure payment to such municipalities 
of 6 per cent, on the sums subscribed by them, (i) 

Where in such action the defendant pleaded that, before the 
commencement of the suit, the railway company sued him for the 
same monies, and that after being served with the writ of sum- 
mons in that case, and before declaration in either case, and 
after the commencement of the suit, he paid the company in full ; 
it was held no defence, as it was not averred that such payment 
was made in ignorance of plaintiffs claim. (2) 

Defences. 29. The cessation of a company, by non-performance of the 

Cessation of con( jitions o f its charter within three years, does not extinguish 
Company. 

its liability or that of its stockholders to pay the debts contracted 

during its existence. (3) 

Defences. 3O. Irregularities in the nomination or appointment of direc- 

mance e ofcon- tors w ^ not di scnar ge the liability of the shareholders. (4) Where 

ditions. a subscription is conditional, and the condition has not been 

performed, a judgment creditor of the company has no action 

against the holder of such shares ; (5) unless the condition was 

ultra vires the company or its representative, or where the 

shareholder has made a payment on the shares, or has otherwise 

made himself liable as a shareholder. (6) 

Defendant had signed the stock book of the company for 40 
shares, but he alleged that this was done upon the faith of a 
verbal agreement with a provisional director and chief promoter 
of the company that defendant and another should receive the 
contract for building the road. There was no proof that defen- 
dant had received any formal notice of the allotment of shares, 
but he paid 10 p.c. thereon, because., as he alleged, the provi- 

(1) Woodruff?-. Corp. of Town of Peterborough, 22 U. C. Q. 13. 274. 

(2) Tyre v. Wilkes, 13 U. C. Q. B. 482. 

(3) Ray. Blair, 12 U. C. C. P. 257. 

(4) Ryland r. Ostell, 2 L. C. J. 274 ; Ross r. Can. Agr. Ins. Co., 5 I,. N. 23 ; 
Windsor Hotel Co. v. Lewis, 4 L. N. 331, 26 L. C. J. 29 (Q. B. 1881). 

(5) Rodgersr. Laurin, 13 L.C. J. 175. See subscriptions, conditional, supra. 

(6) Wilson r. Ginty, 3 O, A. R, 124. 



SHARES AND SHAREHOLDERS. 55 

sional director told him that he would not get the contract unless 
he paid it. He also attended a meeting of the shareholders, 
and seconded a resolution granting an allowance to the directors. 
It was held, that the payment of the 10 p. c, made him a 
shareholder, and that he could not repudiate his liability on the 
ground that he had not been awarded the contract, for the pro- 
visional director had no power to bind the company by annexing 
such an agreement to his subscription, (i) 

A shareholder in subscribing for stock gave the manager of 
the company a power of attorney to subscribe for him ten shares, 
such power of attorney containing the words " and I herewith 
enclose lop.c, thereof, etc., etc." The 10 p.c. was not enclosed, 
although the amount was placed to the credit of the share- 
holder on the books of the company. In an action against 
the shareholder by creditors of the company for contribution, he 
pleaded that the sum to his credit was for professional services to 
the company, and that there was an arrangement that his stock 
was to be paid for by such services. The Court held that he 
was bound to contribute. (2) Where a person was requested to 
take shares, and objected on the ground that there was unlimited 
liability, but was afterwards persuaded to contribute, upon the 
assurance that a Bill was to be passed through Parliament to 
limit the shareholders' liability ; and paid the deposit, but after- 
wards refused to pay calls ; and the Bill promised had not been 
passed, but he subsequently agreed to pay a certain call provided 
his name was struck off the list of contributories ; and the company 
was subsequently wound up, and his name put on the list of con- 
tributories ; it was held : that it must be removed therefrom ; 
that the directors had had the power to make a compromise of 
a disputed claim, and this case came .within their power, and 
that power had been bonafide and rightly exercised. (3) 

31. The failure of directors to make calls has been held to Defences. 

be no defence to an action by creditors, (4) nor irregularities Irregularities, 
in the nomination or appointment of directors. (5; 

(1) Wilson v. Ginty, 3 O. A. R. 124. 

(2) In re. Standard Fire Ins. Co. (Caston's case), 12 S C. R. 644. 

(3) Dixon y. Evans, L. R. 5 E. & I. App. 606. 

(4) Cockburn v. Starnes, 2 L. C. J. 114 (S. C. 1857). 

(5) Ryland v. Ostell, 2 L. C. J. 274 ; Cockburn v. Tuttle, 2 L. C. J- 285 
(S- C. 1858). 



THE RAILWAY LAW OF CANADA. 



Defences. 



32. Unless a company is specially authorized by its charter, it 

" cannot reduce its capital nor buy its own shares, nor accept 

a remission of them from the shareholders. Such acts are ultra 

vires, and do not free the shareholders from liability towards 

creditors of the company, (i) 



Defences. 
Shares ac- 
quired as paid- 
up. 



Defences. 
No notice of 
allotment. 



Defences. 
Never a 
shareholder. 



33. Where shares are acquired in good faith as fully paid up, 
without any notice from the transferor that they are not so, the 
holder will not be liable to the creditors of the company for the 
amount unpaid. (2) And if shares are taken in the course of 
business for valuable consideration, the burden of proof lies on 
the person who asserts that he who took the shares had notice that 
they were not actually paid up. (3) 

34. Where the subscription is to a company about to be 
organized, it may be a defence that there was no allotment of 
shares with notice thereof within a reasonable time, to constitute 
the subscriber a shareholder within the meaning of The Rail- 
way Act. (4) 

35. In an action against defendant as a stockholder for unpaid 
stock, it appeared that the defendant signed the stock book, which 
was headed by an express agreement by the subscribers to be- 
come shareholders of the stock for the amount set opposite their 
respective names ; and upon allotment by the company " of my 



(1) Ross i\ Fiset, 8 Q. L. R. 251 ; see also Ross v. Dusablon, 10 Q. L. R. 
74 ; Ross 0. Worthington, 5 L. N. 140, as at p. 43 supra. 

(2) Shares were allotted by resolution of directors among themselves at 
40 per cent, discount, their then supposed value, and scrip issued as fully 
paid up. G. acquired shares under this arrangement, and sold to defendant, 
representing them to be fully paid up. Defendant inquired of the secretary 
of the company, who also informed him that they were fully paid up shares, 
and he accepted them in good faith as such, and about a year later became 
a director of the company. The shares appeared as fully paid up on the trans- 
fer books, but the true state of the case could have been ascertained by refer- 
ence to the Ledger or Journal, whilst on each counterfoil in the share book 
the amount mentioned was : Shares, two at $300 = $600. 

Held (reversing judgment of Court of Appeal for Ontario, I O. A. R. i) : 
that a person purchasing shares in good faith, without notice from an original 
shareholder, under 27 and 28 Vic., ch. 23, as shares fully paid up, is not liable 
to an execution creditor of the company whose execution lias been returned 
nulla bona for the unpaid amount of said shares. McCracken v. Maclntyre, 
i S. C. R. 479. 

(3) Burkinshaw v. Nicolls, 3 App. Cas. 1004. 

(4) Nasmith v. Manning, 5 S. C. R. 417. Vide supra, p. 36. 



SHARES AND SHAREHOLDERS. 57 

or our said respective shares," they covenanted to pay 10 per 
cent, and all future calls. The directors passed a resolution 
directing the secretary to issue allotment certificates. The secre- 
tary prepared certificates, and they were delivered to the com- 
pany's broker to deliver to shareholders. It did not appear 
that the certificate was ever delivered to defendant, or that he 
was ever expressly notified of the allotment, and he never paid 
the 10 per cent. He received notices of calls to which he paid 
no attention. The evidence showed that he did not consider he 
was entitled to any notice, and that he based his belief that he 
was not a shareholder simply on the ground that he had not paid 
the 10 per cent. It was Held (affirming 43 U. C. Q. B. 22) : 
that the evidence was sufficient to prove that knowledge of the 
acceptance of his offer by the company had reached the defen- 
dant, and that he was therefore liable as a shareholder, and that 
it was not ultra vires of the directors to take his subscription 
without receiving the ten per cent, thereon, (i) 

36. Where material change is made in the capital of a com- Defences. 
pany, and there is no acquiescence or laches on the part of the Ch * n 2 e of 
subscriber, he cannot be held liable as a contributory. (2) 

37. Ignorance of differences between the memorandum ofDefences. 
association and prospectus is not a good defence after failure '^^^ 
of the company, where the defendant might have discovered the of association 
difference with proper diligence. (3) ^ d P ros P ec - 

(1) Denison v. Leslie, 3 O. A. R. 5^6. 

(2) Stevens t\ The London Steel Works Co. (Delano's Case), 15 O. R. 
75. In this case one D. signed his name as a subscriber for a. certain number 
of shares at the foot of a prospectus of a proposed company, in which it was 
stated that the capital was to be $75,000. Without D.'s knowledge or acquies- 
cence, the company as afterwards incorporated, had a capital of $150,000. 
In accordance with the terms of the subscription, and before the incorporation 
of the company, D. paid up half the amount of his shares. There was no 
allotment of stock to D., no entry of his name in any stock book, and no acting 
on his part as shareholder. The company being in process of liquidation it 
was claimed that D. was a contributory. 

Held : that the change made in the capital of the company was a material 
one, and there being no acquiescence or laches on D.'s part he was not liable 
as a contributory. 

(3) Oakes v. Turquand, L. R., 2 H. of L. 325. 

In May, 1864, A. published a prospectus of a proposed company, and B. took 
shares in it, and paid the first deposit, and a memorandum of articles of associa- 
tion was registered in June. After inquiry instituted by B. in December, 



58 THE RAILWAY LAW OF CANADA. 

Defences. 3$. A company incorporated with power to increase by by-law 
the capital stock of the company, as soon as but not before the 
original stock was all allotted and paid up, assumed to pass a by- 
law increasing the capital stock before the original amount had 
been paid up. In an action by the creditors against a subscriber 
of the new capital stock, it was Held (reversing the judgment of the 
court below) : that the by-law so passed by the company being 
ultra v/res, the alleged shares of the defendant had not any exis- 
tence in law, and therefore that the plaintiffs had failed to estab- 
lish that the defendant was a shareholder within the statute, (T) 
and consequently they were not entitled to recover. (2) 

Defences. 39. Where by fraudulent misrepresentations of the directors, 

m^srepresenta- or ^7 their fraudulent concealment of facts, a person is drawn into 

tion. a contract to purchase shares in a company, the directors cannot 

enforce the contract against him, and he may rescind it, but he 

must do so within a reasonable time. (3) Nor can the directors 

set up that lie might have known the truth by proper enquiry. (4) 

Defences. 4O. On the i-jth May, rS53, the directors of a company passed 
01 eituie. a res pi u tion, declaring that the shares mentioned in a schedule, 
intended to be annexed, had become forfeited for non-payment 
of a call made on the previous 2ist Jan., and should be sold on 
the 2ist June, unless previously redeemed. The company, had 
not afterwards treated defendant as a shareholder, nor had he 
acted as such. The resolution for the sale of the stock bad not 



1864, he paid a further deposit, and an application was afterwards made by a 
third party to wind up the company. In January, 1865, H. applied for and 
obtained an order to have his name removed from the register of the company, 
upon the ground that the memorandum varied in many respects from the 
prospectus, so as, in fact, to constitute a totally different undertaking, and 
alleged that till December, 1864, he had never known of the two documents. 

Held: that an application by A. to rescind the order for the removal of 
B.'s name had been rightly refused by the Court below. Dowes c. Ship, 
L. R.,3 H. of L. 343. 

(1) 27-28 V., cap. 23. 

(2) Page et al. r. Austin, 7 O. A. R. I. confirmed in Supreme Court, ro 
S. C. R. 132. 

Where an action is brought against a shareholder in an incorporated joint 
stock company, he may plead a non-compliance with its Act of incorporation, 
and that by reason of such non-compliance the company is not legally in 
existence. Que. & Richmond Ry. Co., i L. C. R. 366. 

(3) Oakes r. Turquand, L. R., 2 H. of L. 325. 

(4) Venezuela Ry. Co. p. Kisch, L. R., 2 H. of L. 99. 



SHARES AND SHAREHOLDERS. 59 

been acted on by the company, a statute having passed before 
the day named for sale, making new provisions as to forfeiture or 
abandonment of shares which had not been complied with. It 
was held that the defendant was still liable as a shareholder, (i) 

4:1. In Quebec, under art. 1716 C.C., an agent who subscribes Defences. 
stock in a company in his own name is liable to creditors of the ^ S enc y- 
company as a shareholder, without prejudice to the creditors' 
rights against the principal also. (2) 

4:2. It has been held in Quebec that notwithstanding the Defences. 
transfer by the shareholder of his shares previous to the institution iansfer - 
of the action by the creditor, the latter could recover if the debt 
accrued and became due while the shares were in the shareholder's 
name in the company's books. (3) 

43. But this would seem to be contrary to the general prin- 
ciples regarding the freedom of the right to transfer previously 
enlarged upon, (4) and it would seem more in accordance with 
principle and the language of the Act, to say that the liability 
accrues only when execution against the company is returned 
unsatisfied. (5) 

4:4:. In an action by a creditor against a shareholder of unpaid Defences. 
stock in a company incorporated under 32-33 Vic., ch. 13 D, it 1 ?' 
vas held that a shareholder, under a plea that the judgment was 
obtained by fraud, was entitled to set up a defence that the com- 
pany had not in the original suit been served with process, under 
sec. 50, the person served as secretary not being such officer. (6) 

4:5. Entry of shares in the stock book by the secretary of the Defences. 
company upon a verbal promise of the defendant, but in his 
absence, is not sufficient to charge him. (7) 

Appellant was solicited to subscribe for shares, and paid $500, 
and signed his name to a subscription book, the columns of 



(1) Smith v. Lynn, 3 U. C. Error & Appeal R. 201 (Grant). 

(2) Molson's Bank v. Stoddard, M. L. R., 6 S. C. 18. 

(3) Cockburn v. Beaudry, 2 L.CJ. 283 (S. C. 1858). 

(4) supra p. 42 et seq. 

(5) Nixon f. Brownlow, 3 H. & N. 686. 

(6) Harvey v. Harvey, 9 O. A. R. 91. 

(7) Ingersoll & '\ he Thamesford Gravel Road Co. v, McCarthy, 1 6 U. C. 
Q.B. 162. 



60 THE RAILWAY LAW OF CANADA. 

amount of subscription and number of shares being at the time 
left in blank. These columns were afterwards filled up for 50 
shares by an agent of the company in appellant's presence, but 
without his consent. Appellant then tried to be relieved from 
the surplus shares without success ; and later on received a divi- 
dend on the paid up capital, and gave a receipt. Upon an action 
to recover calls on 50 shares at $100, alleged to have been sub- 
scribed, it was held that the evidence shewed that the appellant 
never contracted to take 50 shares, and that the receipt given for 
the dividend or amount paid in was not an admission of the lia- 
bility for a larger sum, and he was not estopped, b ut he was 
never in fact holder of 50 shares, (i) 

Defences. 46. It is a question as to whether, under the Act, the share- 
Set-off, holder can plead the company's indebtedness to him as a set-off 
against the unpaid balance of his stock, in an action by the 
creditor. In Quebec the question has been considered in the 
case of Ryland v. Delisle, (2) where it was held that, as no calls 
in respect of the unpaid stock held by the defendant had been 
made, the provisions of Arts. 1187-1188 of the Civil Code 
did not apply, and that the compensation (set-off) had not 
taken place between the defendant's indebtedness as a shareholder 
and the company's indebtedness to him. In this case the com- 
pany were indebted to the defendant for salary as president'in a 
sum exceeding the amount of his unpaid stock. But under Art. 
1188 of the Code, the debts, in order to be compensated, must 
be " equally liquidated and demandable." Until calls had been 
made by the directors, and the proper interval of time allowed 
to lapse before they would become due, payment could not have 
been enforced, and therefore the debt was not " demandable." 
On the other hand, the defendant, at the time the creditor brought 
his action, had a right to proceed against the company and recover 
payment of the mm due by them to him for salary ; but the 
company could not have set up as against that action any 
counter-claim which they might have had in respect of his being 
a shareholder. The debts, therefore, did not exist " simulta- 



(1) Cote v. Stadacona Ins. Co., 6 S. C. R. 193. 

(2) 3 L. R. P. C. 17 ; 6 Moore P. C. (N. S.) 225 ; see also Harris v. Dry 
Dock Co., 7 Grant's Chy. 450. infra p. 63. 






SHARES AND SHAREHOLDERS. 61 

neously," and the Privy Council held (i) that the creditor had a 
right to recover from the shareholder everything that was due 
from the shareholder to the company which was not actually 
paid, discharge 1 or extinguished, and that, as there was no com- 
pensation as between the shareholder and the company, there was 
consequently no extinguishment of the debt. (2) 

Decisions under the English law en this point are hardly 
applicable here. The Companies' Acts contain a clause quite 
similar to sec. 86 of The Railway Act ; but in order to do away 
with difficulties, arising through the procedure incident to this 
section, certain clauses were included in the winding up Acts. 
But our winding up Acts do not apply to railway companies, 
while those in England do. 

The case in which this point seems to have been considered 
most seriously in Ontario is that of Macbeth v. Smart, (3) which 
decided that a shareholder, in an action against him by a judg- 
ment creditor of the company, could not set off, in equity, a debt 
due to him by the company before the judgment was recovered. 
This case was very thoroughly considered, and is supported by 
an English case, which holds to the same effect. (4) In that case, 
Cockburn, C. J., said: " What answer is it for the shareholder 
to say : ' The company is indebted to me as well as to you ' ? 
The one party has a judgment against the company ; the other 
a mere right of set-off." And Draper, C. J., in the Macbeth case r 
said: "Admitting, for argument's sake, the equity alleged to arise 
from Macbeth's position and dealings with the company to the 
fullest extent, I cannot understand that it is to prevail over a legal 
right conferred by an express statute." (5) Again, it was par- 
ticularly pointed out in the Privy Council in Rylandv. Delisle, (6) 
that the creditor under the Act is in a different position to that 
of the company. Draper, C. J., who voiced the same idea in 
Macbeth v. Smart, said : "Smart does [not derive the power or 

(1) Per Lord Giffard, 6 Moore N. S. at p. 235. 

(2) Held : that a shareholder of an insolvent railway corporation cannot 
offer a debt due to him by the corporation, whatever may be the character of 
such debt, in compensation to a claim made against him by the creditor of 
the company under C. S. C., cap. 66, 80 ; Ryland v, Routh, I L. C. L. J. 
114 (1868). 

(3) 14 Grant Ch. 298 (1868). 

(4) Wyatt . The Darenth Valley Ry. Co., 2 C. B. N.S. 109. 

(5) 14 Grant Chy. at p. 313. 

(6) 6 Moore N. S. at p. 235. 



62 THE RAILWAY LAW OF CANADA. 

right to have recourse for the payment of his debt to the share- 
holders by or through the company, for the statute does not 
give it to the company, but to their creditors. It is not, there- 
fore, to my apprehension a sound view to treat him on the footing 
of an assignee of the company, deriving his rights only from 
them." (i) The reasoning and principle of Macbeth v. Smart 
were fully adopted by Gwynne, J., then of the Ontario Court of 
Queen's Bench, in the case ofBenner v. Curric, (2) which was a 
still stronger case, for there defendant had himself recovered 
judgment against the company, on which a fieri facias had been 
returned nulla, bona. The court said that the plea formed no 
defence, for the plaintiff was not claiming in right of the company, 
but by virtue of a specific statutory remedy ; and the decision 
of Macbeth v. Smart \f as in principle applicable, notwithstanding 
the fact of defendant having a judgment and execution. Again 
in McGregor v. Currie, (3) Hagarty, C. J., of the Ontario 
Common Pleas adopted the reasoning of both Macbeth v. Smart 
and Benncr v. Currie, and also the Quebec case of Ryland v. 
Dt 'lisle. (4) 

The latest case in which the prior Ontario decisions were 
referred to is that of Field v. Galloway. (5) But the court found 
that it was not necessary to discuss the principles of these deci- 
sions, for this was the case of an insolvent company which had 
made an assignment of all its assets to trustees, and was subject 
to the winding up Acts ; and, further, the Ontario Act, 
governing the company, provided : " that any shareholder may 
plead by way of defence in whole or part any set-off which he 
could setup against the company." Rose,}., however, at the 
trial followed Macbeth v. Smart ; though Wilson, C. J , sitting in 
Banco said : " It is not necessary to discuss upon what principles 
the case of Macbeth v. Smart, and other analogous cases 
referred to, were decided. I am inclined to think it will be 
found that, so far as they may be supposed to rest upon the 
application of the winding up Acts to them, they are not sustain- 



(1) 14 Gr. Chy. at p. 314. 

(2) 36 U. C. Q. B. 411 (1875). 

(3) 26 U, C. C. P. 55 (1876). 

(4) 3 L. R. P. C. 17. 

(5) 5 O- R- 5 02 > anc * sec Nasmith v. Dickey, 44 U. C. Q. B. 414. 



SHARES AND SHAREHOLDERS. 63 

able, although they may be maintainable upon other grounds." 
But the winding up Acts do not apply to railway companies, and 
therefore we must so far consider the Macbeth case and its atten- 
dant cases to be undisputed to the present date. 

Galls. 

47. The directors may, from time to time, make such calls Directors may 
upon the respective shareholders, in respect of the amount of make - 
capital respectively subscribed or owing by them, as they deem 
necessary, (i) The enactment of a by-law to regulate the mode 
in which the calls shall be made is not imperative. Where no by- 
law exists, the calls may be made as prescribed by the directors. (2) 
Where a trading company incorporated by statute becomes in- 
solvent, one of the partners, being also a judgment creditor, is 
entitled to a decree compelling the directors to make calls upon 
the stock of subscribers, notwithstanding a clause in the statute, 
declaring the shares of defaulters should be forfeited, the forfeiture 
being cumulative to all other remedies to which a creditor is 
entitled, (3) that is, so long as the powers granted by the special 
or general Act exist. (4) For example, section 89 of The 
Railway Act limits the time for the commencement and com- 
pletion of the railway ; and provides that, if those limits are 
exceeded, the powers granted by the special or general Act 
shall cease and be null and void as respects so much of the rail- 
way as then remains uncompleted. It would, therefore, appear 
that calls could not be made for the construction of the uncom- 
pleted part of the line where the conditions of section 89 have 
not been complied with. (5) The Legislature can, however, re- 
vive the company's powers in regard to the uncompleted portion 
of the line, by giving them through a special enactment a further 

(1) Sec. 63. 

(2) The Rascony W. & C. Mfg. Co. v. Desmarais, M. L. R., 2 S. C. 381. 
In Review. 

(3) Harris z/. Dry Dock Co., 7 Grant's Chy. 450; see Ryland z>. De- 
lisle, discussed on p. 60 supra. 

(4) Where action is brought against a shareholder in an incorporated joint 
stock company, he may plead a non-compliance with its Act of incorporation, 
and that by reason of such non-compliance the company is not legally in exis- 
tence. The Que. & Richmond Ry. Co. v. Dawson, i L. C. R. 366. 

(5) Durable v. The Peterborough & Lake Chenning R.R. Co., 12 Grant 
Chy. 74. 



64 THE RAILWAY LAW OF CANADA. 

time to execute their undertaking. And their powers can be thus 
revived after lying dormant for years, (i) but the stock first sub- 
scribed cannot be regarded as extinguished for non user. (2) 
Where such amended Act recites that it has been granted upon 
the prayer of the parlies interested in the original Act, it must 
be taken upon the recital as conclusive that each individual inter- 
ested in the original Act was concurring in the passing of the 
amended Act. (3) 

Notices. 48. At least thirty days' notice, by publication in the manner 

indicated by section 41, shall be given of each call. (4) Section 
41 states that a copy of the Gazette containing such notice 
shall, on production thereof, be evidence of the sufficiency of 
such notice. But it has been held (5) that a Gazette of the date 
of 28th May, containing a notice bearing date on the 1 5th of 
March of the same year, is not evidence that notice of the first 
call was given on the latter date ; that is to say, a Gazette 
cannot be considered as giving notice anterior to the date of its 
publication, nor as being evidence of any notice of an earlier date 
than the date of the Gazette itself. The statute under which 
this case was decided (6) is worded similarly to the above corres- 
ponding section of our present Act. (7) 

No call shall be made at a less interval than two months 
from the previous call." (8) Calls made on the ist September, rst 
November, and ist January are not within these requirements. 
(9) The months mentioned in the Act are of course calendar 
months . Between the day on which the call is payable and the 



(1) Toronto & Lake Huron R.R. Co. c. Crookshank, 4 U.C. Q.B., p. 317. 

(2) Ibid., p. 322. 

(3) Ibid. 

(4) Sec. 63. 

(5) Buffalo, Brantford & Goderich Ry. Co. y. Parke, 12 U. C. Q. B.foj. 

(6) 14 & 15 Vic., cap. 51, sec. 16, ss. 24. 

(7) It has been Held : that proof that notices claiming payment of the calls 
sued for were mailed to shareholders was sufficient evidence that such calls 
were mace. Ross v. Converse, 27 L. C. J. 143, Q. B. 1883. 

(8) Sec. 63. 

(9) Buffalo, Brantford & Goderich Ry. Co. v. Parke, 12 U. C. Q. B. 607 
Port DOV.T & Lake Huron Ry. Co. v. Grey, 36 U. C. Q. B. 425 ; Toronto 
Gas Co. v. Russel, 6 U. C. R. 567; Stratford & Moreton Ry. Co. v. Stratton, 
2 B. & Ad. 518. 



SHARES AND SHAREHOLDERS. 65 

date of the next payment there must be a clear interval of two 
calendar months, (i) But directors may make more than one 
call by resolution of the board. 

Provided always that no greater amount be called in any one 
year than is prescribed by the special Act. (2) 

49. Every shareholder shall be liable to pay the amount of the Payment, 
calls so made in respect of the shares held by him to the persons 
and at the times and places from time to time appointed by 
the company or the directors. (3) 

Under an Act which required that stockholders should pay up 
their shares "by such instalments, and at such times and places 
as the directors of the said corporation shall appoint," it was 
held that, when the directors passed a resolution ordering a 
call, but omitted to specify the place of payment, and a notice, 
signed by the managing director "by order," was published, 
and a circular signed by him \vas sent to each shareholder, in 
which the place of payment was named, but there was no meet- 
ing of the directors between the passing of the resolution and 
the day named for payment, in an action for this call, the above 
omission was fatal. (4) 



(1) Ry. Sleepers Supply Co. (in re), 29 Ch. D. 204 ; Clayes v. Darling, 16 
R. L. 649; Port Lover & Lake Huron Ry. Co. v. Grey, 36 U. C. Q. B. 425. 

Plaintiffs, by their Act of incorporation, were authorized to call in the 
stock by instalments, as the directors should appoint, subject to a proviso 
that no instalment shall exceed 10 per cent., or be called for or become pay- 
able in less than 30 days after public notice shall have been given in one or 
more of the several newspapers published in every district where stock may 
be held. 

Held, that the times fixed for the payment of instalments need not be 30 
days apart, but that instalments might be made payable at any time, prov- 
ided no call exceeded 10 per cent., and 30 days intervened between the date 
of notice of the call and the day on which it was payable. 

That no instalment could lawfully be made payable in less than 30 days 
from the day for payment of the next preceding. 

That notice of a call in one district published in a newspaper is sufficient 
to render the shareholders residing in that district liable to pay the call, not- 
withstanding that the notice may not have been published in other districts 
where stock is held. Provincial Insurance Co. v. Worts, 9 Ont. A.R. 56. 

(2) Sec. 63. 

(3) Sec. 65. 

(4) The Provident Life Assurance & Invest. Co. v. Wilson, 25 U.C. Q.B. 
53- 



66 THE RAILWAY LAW OF CANADA. 

Payment by 50. Jt was held in a New Brunswick case, (i) that a railway 
company may take, and recover on, a promissory note given for the 
amount of assessments due by a stockholder on his shares. This 
decision applies a fortiori to existing railways, because in that 
case the company had no express power to make or receive pro- 
missory notes, etc., whereas such power is expressly granted by the 
Dominion Railway Act. (2) 

Forfeiture for fj;j_ t Every person who neglects or refuses to pay a ratable 
^ 111 share of the calls, for the space of two months after the time 
appointed for the payment thereof, shall forfeit to the company 
his shares in the company, and all the profit and benefit 
thereof. (3) 

No advantage shall be taken of the forfeiture, unless the shares 
are declared to be forfeited at a general meeting of the company, 
assembled at any time after such forfeiture has been incurred. 
(4) 



(1) St. Stephens Branch Ry. Co. i: Black, 13 N. B. Rep. 140 ; and see 
Redfield, Vol. i, p. 181, ed. 1888. 

(2) Sec. 98. 

(3) Sec. 80. 

Held in accordance with Court of C. P., that the company were not 
restricted to the remedy by forfeiture, but might sustain an action against a 
shareholder upon calls to stock subscribed. Marmora Foundry Co. v. Jack- 
son. 9 Q. B 509, Ontario; Marmora Foundry Co. v- Murray, i C. P. i', 29, 
Ontario ; Marmora Foundry Co. v. Boswell, I C. P. 175, Ontario. 

A non borrowing member of a building society died intestate; no one 
administered for 3 years, and during interval the shares of society ran in arrear, 
and the society during the interval declared them forfeited, and carried the 
amount to credit of profit and loss account. After the society was supposed 
to have Veen wound up and the assets distributed, letters of administration 
were obtained, and application was made to the society to be admitted as a 
member, and refused. 

Held: i. That the proceedings of the society to forfeit the shares in the 
absence of a legal representative were illegal ; 2. That the plaintiff (adminis- 
trator) was entitled to relief, and that the lapse of time between the attempted 
forfeiture and the procuring of letters of administration was no answer to the 
claim. Glass v. Hope, 14 Grant's Chy. 484 ; in Appeal, 16 Chy. 420. 

See Harris v. Dry Dock Co., 7 Grant's Chy. 450. 

(4) Sec. 81. 

To a declaration for calls under section 10 of plaintiff's charter, 12 Vic. r 
cap. 1 66, defendant pleaded that by non payment of said calls the shares 
became forfeited in pursuance of the statute, and that defendant acquiesced in 
such forfeiture of which plaintiff had notice. Held : bad, for defendant could 
not thus forfeit his shares. Ont. Mar. Ins. Co. v. Ireland, 5 U. C. C. P. 135. 



SHARES AND SHAREHOLDERS. 67 

Every such forfeiture shall be an indemnification to and for 
every shareholder so forfeiting, against all actions, suits, or 
prosecutions whatsoever commenced or prosecuted for any 
breach of contract or other agreement between such shareholder 
and the other shareholders with regard to carrying on the under- 
taking, (i) 

The directors may sell, either by public auction (2) or by pri- 
vate sale, (3) and in such manner and on such terms as to them 
seem meet, any shares so declared to be forfeited, or may 
pledge such shares for the payment of loans or advances made 
or to be made thereon, or for the payment of any sums of 
money borrowed by or advanced to the company. Provided 
that authority for such purpose of the stock be first given at a 
special general meeting of the shareholders called for the 
purpose. (4) 

Although the Act gives to the company power to forfeit 
shares for non-payment, yet this power cannot be exercised for 
the purpose of discharging stock subscribers from liability to 
creditors, in case the company should prove a failure. (5) 

(1) Sec. 82. 

The directors passed a resolution, declaring that the shares mentioned in a 
schedule intended to be annexed (but which was not annexed) to the resolu- 
tion, which had become forfeited by non-payment of a call, should be sold at 
a certain date, unless previously redeemed, and the resolution for sale of the 
stock had not been acted upon by the company ; in an action by a creditor 
against a shareholder on the forfeit list, it was held that the defendant was 
still liable as a shareholder. 

Smith v. Lynn, 3 U. C., E. & A. 201, see p. 59 supra see also Fraser v. 
Robertson, 13 U. C. C. P. 184. 

(2) The shares of certain shareholders being forfeited by default to pay 
the calls due thereon were offered for sale by auction. 

Held : that the omission to state in the notices of sale the amounts which had 
been paid on the shares in question did not affect the validity of the sale. Gil- 
man v. The Royal Can. Ins. Co., M. L. R., I S.C. I. 

(3) Held : (incidentally) that it is not absolutely necessary that forfeited 
shares should be sold by public auction. A sale made in good faith and for 
the advantage of the company will not be disturbed, more especially when 
the person who owned the shares does not complain thereof. Oilman v. 
Robertson et al. & the Royal Can. Ins. Co., M. L. R., I S. C. ir. 

(4) Sec. 83. 

(5) Morawitz Corp., 857 ; Mills v- Stewart, 62 Barb. 444. 



68 THE RAILWAY LAW OF CANADA. 

Unissued Shares. 

Sale of. 52. Section 83 also empowers the directors upon the authority 

of the shareholders to sell or pledge " any unissued shares," in 
the same manner as forfeited stock. The power to issue the 
stock so to be sold is given by the shareholders in a special 
general meeting convened. 

This section would apparently authorize the directors to sell 
forfeited or unissued shares at a discount; but if so sold wrong- 
fully or fraudulently, the directors would be liable in damages 
as for a breach of trust, (i) And the holders of such shares 
would be held liable for their full par value, not only to creditors, 
but on liquidation of the company to the ordinary shareholders 
on adjustment of their rights inter se. (2) 

But even where a statute expressly prohibits corporations from 
selling their shares at a discount, the pledgee of stock can dis- 
pose of it at less than par. (3) 

Paid-up Stock. 

Issue of. 53. The directors may make and issue, as paid up stock, shares 

in the company, whether subscribed for or not, and may allot 
and hand over such stock in payment for right of way, plant, 
rolling stock or materials of any kind, and also for the services 
of contractors and engineers ; and such issue and allotment of 
stock shall be binding on the company, and such stock shall not 
be assessable for calls. (4; 



(1) Hirsche r. Sims P. C. 28 July, 1894 ; 10 Times L. R. 616. 

(2) In re. Time Tables Publishing Co. (Welton's case), 10 T. L. R. 660. 
But see Ooregum Mining Co. r. Roper (1892) App. C. 125. 

(3) Peterborough R. R. Co. v. Nashua & L. R.R. Co., 59 N. 1^.385. 

(4) Sec. 39. And see p. 88 infra. 

A company not registered under the Companies Act issued shares as 
"fully paid up," and also certificates of those shares, describing them as fully 
paid up, and made the annual returns giving them the same description. The 
company entered into a contract with G. to purchase a mill and machinery, 
part payment for which was to be made to G. in " fully paid up shares." They 
were not, in fact, fully paid up, and there was no contract with respect to them 
such as is required by the Companies Act of 1867, 25. G. received the 
shares, and negotiated business with them, and gave B., from whom he had 
purchased property, and who accepted them, a part of purchase money in fully 
paid up shares. B., having bought some property from N., purchase money 
was paid by B. to N. through a solicitor who acted for both B. and N. The 
property in question was then conveyed at B.'s desire irect from N. to G., 



SHARES AND SHAREHOLDERS. 69 

Dividends and Interest. 

54. At the annual meeting of the shareholders of the company, Dividends, 
a dividend may be declared out of the net profits of the under- 
taking, (i) 

Such dividend shall be at and after the rate of so much per 
share (2) upon the several shares held by the shareholders in the 
stock of the company, as such meeting thinks fit to appoint or 
determine. (3) 

55. Net earnings are properly the gross receipts, less the Net profits, 
expenses of operating the road or other business of the corporation. what are> 
Interest on debts is paid out of what thus remains, that is, out 

of the net earnings. Many other liabilities are paid out of the 
net earnings. When all liabilities are paid, either out of the gross 
receipts or out of the net earnings, the remainder is the profit of 
the shareholders, to go towards dividends, which, in that way, 
are paid out of the net earnings. (4) 

and 200 shares held by G. were handed over to N., who, however, s.vore that 
he only received them as trustee for B. N's name was registered as holder of 
the shares on Company's books, and he at once sent a proxy to G. to vote 
at a general meeting, describing himself as a shareholder of the company. 
The certificates of these shares were given to B . himself. The company was 
ordered to be wound up. Held : that, under the circumstances, N. was not 
liable to be placed on the list of contributories in respect to the 200 shares. 
Held, also, that if shares are taken in the course of business for valuable con- 
sideration, on the person who asserts that he who took the shares has notice 
that they were not actually paid up, lies the burden of proof of that notice. 
Burkinshaw v- Nicolls, L. R., 3 App. Cas. 1004, H. L. (E). 

(1) Sec. 69. 

(2) The capital of a company incorporated under the Acts of 1862 and 1867 
consisted of 60,000 shares of I ; 40,000 were fully paid up, and 20,000 to the 
extent of only 53. per share. By the jist Article of Association the directors 
may declare a dividend to b2 paid to the members in proportion to their 
shares. By the definition clauses, the word "capital " was declared to mean 
the capital for the time being of the company, and the woid "shares" the 
shares into which the capital is divided. In a question whether the directors 
could competently recommend a dividend payable to each shareholder in pro- 
portion to the amount paid up on the shares held by him, Held ; affirming 
the decision of the court below, that such a declaration of dividend was in- 
competent, because, upon the true construction of the articles of association 
read with the Act of 1862 and 1867, all the shares wereentitled to participate 
equally in the dividend, without regard to the amount paid up upon each. 
Oakbank Oil Co. . Crum, L. R., 8 App. Cas. 65. 

(3) Sec. 70. 

(4) Blatchfield J., in St. John v. Erie R.R. Co., io Blatch 271. Affirmed in 
the Supreme Court of the United States, 22 Wall (U.S.) 136. 



70 THE RAILWAY LAW OK CANADA. 

The word "liabilities" has been extended to embrace not 
only debts already matured, but those which exist but have not 
matured. Thus, where a corporation had on hand $36,000, its 
floating debt was $1,000, and the funded debt payable in seventeen 
years at 6 per cent, was $75,000 ; the yearly current expenses, in- 
cluding interest on funded debt, was about $10,000, and the cor- 
poration had no immediate need of the surplus on hand, or of its 
earnings, except to pay the current expenses ; in an action by a 
stockholder to compel the corporation to declare a dividend, it 
was held that in such a case the court would not compel the 
directors to declare a dividend; (i) but if the directors, in 
the exercise of their discretion under such a state of facts, should 
declare one, the courts would not restrain its payment upon the 
ground that unmatured debts existed, especially where such debts 
have a considerable period to run, and there are no evidences of 
fraud ; because the directors themselves are the best judges as to 
the state of the business of the corporation and its prospects for 
the future. (2) The above New York case was largely decided 
on the grounds of the American doctrine, that a corporation is 
the trustee of its creditors, but not of its stockholders, and that 
therefore the creditors have a better right to the funds which the 
corporation hold for them in trust. 

The term " net profits " has been held to mean net earnings -after 
deducting current working expenses, without including interest 
on money borrowed, (3) but a better definition is thought to be, 
that which remains after deduction of all charges and every out- 
lay. (4) Profits have also been tersely defined by very high 
authority to be the incomings of a concern after deducting the 
expenses of earning them, (5) and perhaps the clearest and 
most accurate definition is that given by Kekewich, J., in a 
partnership case, (6) namely, that net profits is the sum divisible 

(1) Karnes i;. Rochester, etc., R.R. Co., 4 Abb. Pr. (N. Y.) N. S. 107. 

(2) Wood Ry. Law 167. 

(3) Corry r. Londonderry, etc., Ry. Co., 29 Beav. 263. Brice, ultra vires 
(Green), 195. 

(4) Cook, Stockholders 546. Ed. of 1889. 

(5) Meisey Docks r. Lucas, 8 App. Cas. 903. 

(6) Glasier v. Rolls, L. R. 42 Ch. D. 453 ; and see Birch v. Cropper 14 
App. Cas. 525. As to working out profit and loss account, see Buckley Coy's. 
486 ; and the remarks of the Lord Chancellor in Mills v. Northern Ry. of 
Buenos Ay res, L. R. 5 Ch. 621, 631. 



SHARES AND SHAREHOLDERS. 71 

after discharging or making provision for every outgoing proper- 
ly changeable against the period for which the profits are calcu- 
lated. The power of settling questions of the kind is generally 
entrusted to the directors, with or without the sanction of the 
shareholders ; but under sec. 54 the declaration of dividends in 
the case of railway companies is clearly the act of the share- 
holders, (i) Apart from the limit placed on all powers of 
directors and shareholders by the doctrine of ultra vires, if 
there be a difference of opinion the voice of the majority must 
prevail. (2) 

56. The majority can decide whether a dividend shall be Liability of 
paid before some particular debt is discharged. (3) JUJSSo? 

But this is always subject to the liability of the directors in dividends out 
damages or otherwise for payment of dividends not justified by of ca P ital - 
the profits or out of capital. 

The directors, in their quality of administrators and trustees, 
are responsible to the company, its shareholders and credi- 
tors for all damages directly resulting from the payment of a divi- 
dend which diminishes the capital of the company ; (4) and they 
are also responsible for the loss suffered by third parties, who, 
having nothing to guide them as to the state of the company and 
the value of its shares but the dividends paid, have been induced 
to buy stock at exaggerated prices, through the declaration of fic- 
titious dividends, which, in fact, diminished the capital of the 
company. (5) But shareholders who attended the meetings when 
the dividends were declared, or who were notified to attend but 
did not do so, and who had or could have had communication of 
the statements and reports submitted by the directors would be 
estopped from maintaining an action of damages. (6) 

(1) See Re Denham Co. L. R. 25 Ch. D. 763. 

(2) Lee v. Neuchatel Asphalte Co., 58 L. T. R. 553 ; Ranee's case, 6 Ch. 
App. 104; Lever v. Land Securities Co., 8 Times L. K. 94; Lambert v. Neu- 
chatel Asphalte Co., 30 W. R. 413. 

(3) Lindley Comp. 429. 

(4) Montreal City & District Savings Bank v. Geddes, 19 R. L. at p. 
687 (S.C. Que. 1890). 

(5) Ibid. 

(6) Ibid. An application for an injunction enjoining the directors of a 
company not to declare a special dividend must be preceded by notice, and the 
affidavit in support of the application will be held insufficient if it merely 
alleges information and belief. Kane u. Montreal Telegraph Co., 20 L. C. J. 
120(1876). 



72 THE RAILWAY LAW OF CANADA. 

Preference *^' Unless the contrary is declared by statute, charter, or 

shares. express contract, all shareholders are entitled to equal rights as 

to dividends, arid no class is entitled to any preference or 
priority over any other. Preference shares can only be created 
when the authority to create them is given by statute or charter, 
(i) "Guaranteed" and "preferred stock" stand upon the 
same footing, and are not entitled to a dividend unless it has- 
been earned. (2) 



(1) Lindley Comp. 396. 

(2) Wood Railways, 176. 



CHAPTER IV. 



GENERAL POWERS. 



1. Limitation of time for commen- 
cement and completion of work. 

2. Judicial interpretation of sec. 89. 

3. Power of Lieut. -Govr. to cancel 
charter. 

4. Extraordinary powers. 

5. Surveys. 

6. Maps and plans 

7. Deposit of plan. 

8. Notice of deposit. 

9 . Correction of errors or omissions. 

10. Alterations in plan. 

1 1 . Construction of railway not to be 
proceeded with till plans made 
and deposited. 

12. Further powers. 

13. To receive gifts and bonuses. 

14. To purchase, take and sell lands . 

15. To carry railway across lands. 

1 6. Deviation. 



17. Branch lines . 

18. To fell trees, cross, etc., railways. 

19. To construct works on, across, 
or under railways, streams, high- 
ways, etc . 

20. 7o divert streams and highways . 

21. To make drains, conduits, et: . 

22. To alter position of gas and 
water pipes, etc. 

23. Proviso. 

24. Telegraph and telephone lines. 

25. To make and maintain railway. 

26. To erect buildings, etc. 

27. To exercise powers beyond Inter- 
national boundary. 

28. To sell lands acquired from 
Crown or otherwise. 

29. Proviso as to compensation for 
damages caused by exercise of 
powers . 



1. Before considering in detail the general powers of a railway Limitation of 
company, it may be convenient to point out that under section ^n ce m e n m 
89 of The Railway Act, the construction of the railway must be and comple 
commenced, and fifteen per cent, (i) of the amount of the capi- tlon of work - 
tal stock must be expended, within two years (2) after the pass- 
ing of the Act authorizing its construction ; and if the railway is 
not finished and put in operation within seven years (3) from the 
passing of the Act, the powers granted both under the special 
Act and the general Act are declared to be null and void with 
regard to so much of the railway as remains unconstructed at 
thjt time. 



(1) Ten per cent., Que. Act, R. S. Q. 5176 (3). 

(2) Three years, Que. Act, R. S. Q. 5176 (3). 

(3) Ten, Que. Act, R. S. Q. 5176 (3). 



74 



THE RAILWAY LAW OF CANADA. 



Judicial inter 
pretation of 
section 89. 



Power of 
Lieut. -Govr. 
to cancel 
charter. 



2. It has been held in Quebec that the fact of not having 
expended the amount required within the specified time, nor com- 
menced construction, does not ipso facto operate an extinction 
of the company nor the revocation of its charter, which could 
only be ordered at the suit of the Attorney General, and not on 
an injunction by a private individual, (i) 

And by the House of Lords in an English case, where the 
company's charter provided that if the railway was not completed 
in 5 years its powers should cease, except as to so much as was com- 
pleted, and the company had given notice to a land-owner of its 
intention to take certain property, but did nothing further until 
thirteen days before the expiration of the 5 years, and then, 
under the Lands Clauses Ace, entered on the land, and proceeded 
to construct the railway thereon, it was Held, that whether the 
railway could or could not have been completed within the spe- 
cified time, the entry on the land was lawful, and the company 
could not be restrained by injunction, but were entitled to remain, 
and complete the railway after the expiration of the 5 years. (2) 

3. By a recent Act of the Quebec Legislature (3) the Lieuten- 
ant-Governor has been given power, upon the report of the rail- 
way committee, to cancel the charter of any railway company 

(1) Roy v. La Cie. de Ch. de K. Q. M. & C., n L. N. 359 ; and see, Re 
New York Elevated Ry. Co., 70 N. Y. 327. 

(2) Tiverton v- North Devon Ry. Co. v. Loosemore, 9 App. Cases 480. 
The P. & C. L. Ry. Co. had acquired certain land as part of their 

roadbed In 1865 its charter expired, the road not having been put in 
operation. In 1866 an Act was passed, by which the road was to be sold at 
auction, the Act of incorporation revived, and the time for completing extend- 
ed for 5 years. Within 5 years a conveyance was executed to defendant's 
company, which took possession, but which did not use the land till a short 
time before the suit. In 1872 the C. P. & M. R. & M. Railway filed a 
map and book of reference of a proposed extension of their line, and built 
part of their road, ceasing in 1873. In 1880 they leased to plaintiff company 
the land in question, and this action was to recover hack possession. 

Held, (affirming Court below) That the partial construction of the road 
by the C. P. & M. R. & M. Railway in 1872 was an act of trespass ; that 
the defendant company, under the reviving Act and conveyance in pursuance 
thereof, acquired a title to the land; that the power to sell by order of the 
Court of Chancery was permissive merely ; that the right to the land was not 
forfeited by non-completion of the work on the land within the five years, and 
therefore that the phintiff company should not succeed. Grand Junction 
Ry. Co. v. Midland Ry. Co., 7 O. A. R. 681. As to what will constitute a 
bond fide commencement of construction, see Ont. & Sault Ste. Marie Ry. 
Co. p.C. P. R. Co., 140. R. 432- 

(3) R- S. Q- 5 '83 O) 56 Vic. c. 36, s. 2. 



GENERAL POWERS. 75 

which has not complied with the terms of its charter as to com- 
mencement and completion of the works within the prescribed 
time, or has become insolvent, or is unable to proceed with the 
works, or for any other cause which, in the opinion of the Lieu- 
tenant-Governor, is sufficient to justify such cancellation, (i) 

4. In order that a company may be enabled to construct and Extraordinary 
operate a railway, the Legislature by The Railway Act has given P ov 
extraordinary powers, including the power of eminent domain, 
(2) which powers will be found enumerated in section 90 of the 
Act. (3) 

5. The preliminary steps necessary for the construction of a Surveys, 
railway are the taking of surveys, and the making of plans of the 

road or line of the railway, as authorized by the Act of incor- 
poration ; and in order that the company may be enabled to 
do so> they are authorized by this section of the Act to enter 
upon not only the lands and property of all individuals and 
corporations, but also the property of the Crown, without leave 
or license, and make surveys, examinations, or other necessary 
arrangements for fixing the site of the railway, and determining 
what portion of the lands will be required for the purposes of 
the railway. (4) 

6. Having made the surveys as authorized by the Act, the Maps and 
company are required to make a map or plan of the route of the p 
railway, and a profile showing the variations in level along the 

line and the course and direction of the railway, and also the 
lands which are intended to be taken for the railway. This is 
called the location plan, and the company are required to attach 
to it a book of reference, setting out a general description of the 
properties which they intend to take, and the names of the 
owners or occupants as far as they can be ascertained, and 

(1) The fear of the exercise of such an arbitrary power by the Government 
has caused some Quebec railway companies to place themselves under the 
jurisdiction of the Dom. Act. 

(2) Except. See sec. 119. 

(3) R. S. Q. 5132. 

(4) Sec. 90 (a). 

Damage caused by a preliminary survey is prescribed "in six months under 
sec. 27 of Cap. 109, R. S. C. Ravary v. Ont. & Que. Ry., M, L. R., 5 S. C. 
54. Now one year 51 Vic. Cap. 29, s. 287. 



j6 THE RAILWAY LAW OF CANADA. 

any other details which may be necessary to make the plan 
clearly understood, (i) As a matter of practical working, these 
plans generally show by a distinctive color the extent of pro- 
perty intended to be taken, designating the land of each different 
owner by a separate number for each lot, called the location 
number, and indicating the measurement and superficial con- 
tents ; and the book of reference is a sort of index of the whole. 

Deposit of 7. The plan and book of reference and profile have to be 

deposited in the Department of Railways, (2) and it is there ex- 
amined and certified by the minister (3) or by his deputy ; and 
the company is required to deposit copies in the registry office 
of each district or county through which the railway is to pass of 
such parts of the plan as relate to the locality. (4) 

Notice of 8. Notice must be given in at least one newspaper in each dis- 

trict or county of the deposit. (5) These copies of plans are open 
to public inspection ; (6) and the deposit and notice are declared 
by section 145 to be a general notice to all parties of the lands 
which will be required by the railway ; and the compensation for 
lands taken and damages is ascertained with reference to the 
date of such deposit. (7) 

Correction of 9. Should errors and omissions occur in these plans, and in 



errors or 



the description of the lands or their owners, it is provided that 
omissions. _ _ . . 

any omission, mis-statement or erroneous description of either 

the lands or owners or occupants may be corrected by two justices 
(8) on application after ten days' notice given to the owners of 
the land. (9) The justices have power to certify as to the errors 



(1) Sec. 123. 

(2) Public Works R. S. Q. 5163 (2). 

(3) Commissioner R. S. Q. ib. (4) Sec. 125. 
(5) Sec. 144. (6) Sec. 126. 

(7) Held, (affirming Ferguson,}., 12 O. R. 624, that in ascertaining the 
compensation to be made to a land owner for land expropriated for a railway 
under R. S. C., cap 109, 8, the value of the part taken (as well as the 
increased value of the part not taken, which by subsec. 21 is to be set off) 
must be ascertained with reference to the date of the deposit of the map or 
plan and book of reference under subsec. 14, and therefoie such value should 
include nn increase which may have been caused by or is owin<j to the con- 
templated construction of the railway. James c. Ont. & Que. Hy. Co., 15. 
O. A. R. i (1887). 

(8) Judge of Superior Court, R. S. Q. 5163 (5). (9) Sec. 128. 



GENERAL POWERS. 77 

or omissions, and their certificate is deposited with the registrar 
with whom the plan has already been deposited, and the com- 
pany are authorized to make the railway in accordance with the 
correction contained in the certificate, (i) 

10. Again it may happen that alterations from the original Alterations in 
survey or plan have to be made. In such case the company are ^ an ' 
bound to make a map and profile of these alterations on the same 

scale as the first map, and in the same form and containing the 
same particulars, and (2) deposit it in the same way with the 
registrar of the particular locality affected by the alteration. (3) 

11. These are the preliminary steps to the construction of the Construction 
railway, for until these have been completed, that is to sa y> ceeded wit^ 
until the location plan and book of reference have been made till plans made 
and deposited in the manner already mentioned, the construction and de P sited - 
of the railway cannot be proceeded with, (4) and if alterations 

have to be made in the plan, the construction of that portion of 
the railway affected by the alterations cannot be proceeded with 
until the deposit of the altered plan. (5) If, however, the com- 
pany are authorized to construct their railway in sections, they 
are not bound to file plans of the whole railway before com- 
mencing work on any one section. (6) 

12. Having complied with the provisions of the law as regards Further 
the surveys and plans, the company may now proceed to powers ' 
exercise the further powers given it under the Act for the con- 
struction of the railway, and it is proposed to here indicate, 
generally, the powers which are given to the company, and 
afterwards to explain, in detail where necessary, how they may 

be exercised. 

13. Under section 90 the company may receive voluntary gifts To receive 
of lands or other property for the purposes of the railway, andj> 

(r) Sec. 129. (2) After approved by Legislature, R. S. (^.5163 (7). 

(3) Sec. 130, 

(4) See Corp. of Parkdale v. West, L. R., 12 App. Cas. 602; also the 
Kingston & Pembroke Ry. Co. v. Murphy, 17 S. C. R. 582, 12 L. N. 115. 
See chapter on Eminent Domain. 

(5) Sec. 131. See Beauharnois Junction Ry. v. Bergevin, 17 R. L. 113 
(Q. B. Que., 1889), and Brooke v. Toronto Belt Line Ry. Co., 21 O. R. 
401. 

(6) Ont, & Sault Ste. Marie Ry. Co. v. C. P. R. Co., 14 O. R. 432. 



THE RAILWAY LAW OF CANADA. 



To purchase, 
take and sell 
lands. 



bonuses of money, or bonds, or debentures, or any other benefit 
given for the purpose of assisting in the construction of the 
road or its maintenance and operation ; but the same may be held 
and used only for the purposes of such grants or donations, (i) 

14. They may purchase, take and hold of and from any person, 
any lands or property necessary for the construction or main- 
tenance of the railway, and they are given power to sell or 
dispose of, in any way, so much of the property as is not 
required for the purposes of the railway. (2) 

(1) Par. (J). 

(2) Par. (0- 

The plaintiff conveyed lot 83 to the defendants in 1847, expressing in 
the conveyance that the same had been selected by the company " for the 
purpose of establishing the western terminus of their road thereon," " and 
the execution of which condition constituted the sole consideration for this 
grant." 

When plaintiff made this grant he knew that one H. had conveyed the 
adjoining lot No. 84 on substantially the same conditions. A passenger 
station was built on 83, and a freight house partly on 83 and partly on 84, 
which were used until defendants built a passenger station about l / 2 mile from 
original one. 

On a bill to restrain the removal of the western terminus from the land in 
question to the city of Detroit. 

Held, reversing Spragge, C., that the terminus and depot were not confined 
to buildings alone, but extended to the whole premises necessary for conduct- 
ing the business of a terminus, and that upon the true construction of the deed 
the plaintiff was only entitled to have lot 83 included in the terminus, and had 
no right to have all the buildings or any particular building on lot 83. , 

Held, that, even if the deed were read as requiring the establishment of 
buildings on the lot in question, that duty had been sufficiently complied with 
by their erection. Geauyeau i\ G. W. Ry. Co., 30. A. R. 412. 

The plaintiff agreed with the contractors for the construction of a 
railway to convey to them in fee simple 6 acres, to be increased to 10 if 
necessary, in consideration of their placing the station for the town of Prescott 
thereon. After the road had been surveyed and the station buildings erected 
on the property, the plaintiff executed a conveyance thereof to the contractors, 
which contained a covenant by them to continue and maintain the station on 
those lands from thenceforth ; but the deed was never executed by the grantees. 
The company continued to use such station for about 10 years, when they 
removed it to a distance of one and a half miles. 

Held, reversing the judgment of the Court below (28 Gr. 583), that the 
Act of the company in thus placing and using the station was a substantial 
compliance with the agreement, and that they were not bound to continue 
that station there for all time. Jessup v. G. T. Ry. Co., 7 O. A. R. 128. 

Held, that a promise of sale followed by actual possession was equi- 
valent to an absolute sale, and an hypothecary claim created against the ven- 
dor subsequent to such promise of sale was inoperative as against the property 
sold. Gosselin c. G. T. Ry. Co., 9 L- C. R. 315, Q. B. 

If an agreement to take and pay for land made by the directors cf a rail- 
way company before the passing of an Act, to authorize a work which is the 



GENERAL POWERS. 79 

15. They may construct and carry the railway across the lands To carry rail- 
of any person on the line as located, or within one mile of the wa ^ ac 
located line under the general Act, or at such further distance 

from the line as they may be sanctioned to do by their special 
Act. 

16. Under Quebec Act they cannot deviate even one mile un- Deviation, 
less authorized by the special Act. (i) But under the Dominion 

Act they may change the location of the railway with approval of 
the railway committee, in order to lessen a curve or reduce a 
gradient, or otherwise to benefit the railway, " or for any other 
purpose of public advantage." All the provisions of the Act 
apply to the part so changed. But no company shall extend 
beyond its termini fixed by the special Act. (2) 

subject of that agreement, is valid, its validity will not be affected by the 
fact that a part of such agreement relates to compensation for annoyance, 
which cannot happen if the land itself is not required to be taken. 

And an agreement by which directors bind themselves in the event of their 
Bill passing to take land for the purpose of making the railway, and to pay 
for it within three months after the passing of the bill, is valid, and its stipula- 
tions become enforceable after the passing of the Bill. Taylor v. Chichester & 
Midland Ry. Co., L. R., 4 E. & I. App. 628. 

Occupation of land by the company without the proprietor's formal consent, 
or without the formalities required by the Act, gives to the latter right to an 
opposition afin de distraire. Brewster v. Mongeau, 15 R. L. 67 (Q. B. 
1887), M. L. R., 3 Q. B. 20. 

Where a railway company takes possession of land for the purposes of their 
road, with no other permission from the proprietor than that, if they do so, 
" it will be at their own risk ; " the proprietor may, even after a lapse of 
several years, recover back the land from the company, so long as no indem- 
nity has been paid for it. Brewster v- Mongeau and the M. &. S. Ry. Co. 
31 L. C.J. 115 (Q. B. 1887). 

(1) R. S. Q. 5163(11). 

(2) Sec. 120. The provision contained in section 19 of the Consolidated 
Ry. Act 1879, that no railway company shall have any right to extend its line 
of railway beyond the termini mentioned in the special Act, is inconsistent 
with the power given to the Canadian Pacific Ry. Co., under section 14 of 
their contract to build branch lines from any point within the Dominion, and 
with a declaration in section 15 in the charter, that the main line, branch lines 
and any extensions of the main line thereafter constructed or acquired shall 
constitute the Canadian Pacific Railway Company ; following this holding, it 
was Held, that in the particular case the C. P. R. Co. had a right to build 
their road beyond Port Moody in B, C-, the terminus mentioned in their Act 
of incorporation. Can. Pac. Ry. Co. v- Major, 13 S. C. R. 233 ; 9 L. N. 410, 
1887. 

A company built its line to a terminus mentioned in the charter, and then 
wished to extend it less than a mile in the same direction. The time for 
the completion of the road had not expired, but the company had terminated 
the representation on the board of directors, which by statute was to continue 
during construction, and had claimed and obtained from the city of K. exemp- 
tion from taxation on the ground of completion of the road . 



So THE RAILWAY LAW OF CANADA. 

Branch lines. ^7. Branch lines, not exceeding six miles in length, may be 
constructed for the purpose of connecting any city, town, village, 
manufactuie or mine, quarry, spring or well, with the mainline 
or any branch, or with any railway worked or leased by the 
company, or for the purpose of giving increased facilities to busi- 
ness, (i) 

Before proceeding to locate or construct any such line, more 
than one-quarter of a mile in length, the company must give six 
weeks' public notice, in a newspaper in the county affected, of 
their intention to apply to the railway committee (2) to sanction 
the building and the appropriation of lands therefor under the 
compulsory powers of the company. (3) The company must 
deposit a plan and book of reference in the registry office of the 
places affected ; and the plan must be approved by the railway 
committee after the last publication. The order approving 
limits the time within which such branch line is to be construct- 
ed, not to exceed two years. (4) 

Every such company may, for any such purpose, exercise all 
the powers given to it with respect to its main line, and each and 
every provision of the general and special Acts, which is appli- 



To effect the desired extension, it was sought to expropriate lands which 
were not marked or referred to on the map or plan filed under the statute . 

Held, that the proposed extension was not a deviation within the meaning of 
the statute 42 Vic., cap. 9, sec. S, 1 1 D. That the road authorized was com- 
pleted as shown by the acts of the company, and upon such completion the 
compulsory powers to expropriate ceased ; and per Gwynne, J., that as the time 
limited by the charter for the completion of the road had not expired, the 
company could still file a map or plan shewing the lands in question, and 
acquire the land under sec. 7, subsec. 19, of 42 Vic. cap. 9. Kingston & 
Pembroke Ry. Co. r. Murphy, 17 S. C. R. 582, 12 L. N. 115. 

Where a railway company were authorized to construct their line " from " 
the City of Ottawa to, etc., it was held that they had the right to enter the city 
and construct from a point within its limits. Re Bronsdon et al. & the City of 
Ottawa, i O. R. 415. And so also where the company were authorized to 
construct a railway "by way of" Montreal, etc. Evans v. Atlantic & N. 
W. Ry. Co., S. C. Mont. 23 May, 1887. 

(1) Sec. 121. 

(2) Lieutenant Governor R. S. Q. 5132 (17). 

(3) Sec. 121. 
.(4) Ibid. 



GENERAL POWERS. 8r 

cable to such extension, shall extend and apply to every such 
branch line of railway, (i) 

Under the Quebec Act, branch lines not exceeding 6 miles in 
length may be built from any terminus or station of the railway, 
on obtaining from the local municipality a by-law sanctioning 
the same; but lands cannot be taken for such purpose without 
the consent of the owners. Such branches are not subject to the 
restrictions as to quality and construction of the main line con- 
tained in the charter or general Act. (2) 

18. The company may for the purposes of construction cut To fell trees, 

down any trees within six rods from either side of the railway. (3) cross etc., 

railways. 

19. They may construct the railway across any other railway To construct 

at any point on its route, or cross, intersect, join and unite their works on > 

' J across, or un- 

der railways, 

m Sec 122 streams, high- 

li; sec. 122. 

Under special reference of the disputes between the Nothern Ry. Co. and 
the town of Barrie, as to the construction of a branch line into the town, it 
was Held, that the directions of the arbitrator, as to the conveyance of certain 
lands by the company and a release of their claims as to other lands, were 
authorized, and the latter not objectionable for omitting to state to whom it 
was to be made ; and that as to the amount awarded, if, as contended, the 
corporation could obtain no damages beyond what they had expended in 
procuring the land, it should be assumed no more was given. Corp. of Town 
of Barrie & Northern Ry. Co., 22 U. C. Q. B. 25. 

(2) R. S. Q. 5132 (16). (N. B. This clause is not contained in the Domi- 
nion Act.) 

(3) Sec. 90 (e). Railway companies, in exercising this right, and causing 
damage thereby, may plead that this right forms part of the damages to be 
covered by the compensation awarded to the person whose land is expropri- 
ated, and he has no action to recover any additional amount for the value of 
trees within this limit which may be cut down and removed by the company. 
Evans v. A. & N. W. Ry. Co., M. L. R., 6 S. C. 493. 

The defendant?, a railway company, incorporated under an Act of the Par 
liament of Canada, built their line through land owned by the Crown, but 
which was under a timber license from the Ontario Government. 

The defendants cut down and removed the timber both within and outside 
the six rod limit, mentioned in subsec. 12 of sec. 6 of the R. S. C., cap. 109. 

Held, that under the subsection, the timber cut within the six rods became 
the property of the railway. McArthur v. The Northern & Pacific Junction 
Ry- Co. & Hendrie et al., 15 Ont. R. 733. 

6 



82 THE RAILWAY LAW OF CANADA. 

railway with any other railway, (i) subject to the provisions of 
the Act to which attention will be called later. 

To divert JJO. They may even interfere with other railways, with tram- 

highways, ways, canals, highways, (2) rivers, or streams which the railway 
intersects or touches, to the extent of constructing in or upon 
them, across, or under them, temporary or permanent inclined 
planes, tunnels, embankments, aqueducts, bridges, roads, ways, 
passages, conduits, drains, piers, arches, cuttings and fences, (3) 
provided always, be it understood, that these are necessary for the 
purpose of the railway, and subject to special provisions in cer- 
tain cases. 

In the case of rivers, streams and highways, the company 
may divert or alter, either temporarily or permanently, their 
course, or raise or sink their level, as may be required. (4) 



(1) par. (/). Arbitration as to crossing under sec. 9, subsec. 15, cap. 165 
R. S. O. Appeal therefrom, etc., etc., Vide C. V. Ry. Co. v. G. W. Ry. 
Co., 4 O. A. R. 532. 

(2) See G. T. Ry. v. Miville, 14 L. C. R. 469 (Q. B. 1864), P- 83 
infra. 

A street railway company was authorized to lay its track " along the high- 
ways in the parish of M.," leading into the streets of the city. 

Held, that the company, in laying its track inconveniently close to the 
property on one side of the highway, and thus apparently favoring the pro- 
perty on the other side, had not exceeded its powers, and an action for the 
abatement of the nuisance was dismissed. The Atty. Gen. v. The M. 
C. P. Ry. and The Trustees of the M. Turnpike Roads, I L. N. 580, S. C. 
1878. 

Where works, for the construction of a railway authorized by Statute, 
passing in the street of an incorporated town, injure the property of an 
individual, his action of damages will lie against the railway company and 
not against the municipal corporation. Lambert & The Corporation of 
Three' Riveis, Q. B., Ramsay's Digest 221 ; 10 R. L. 359 Q. B. The City 
of Three Rivers v- Lessard, 10 R. L. 441, Q. B. 

Municipalities alone have the right to sue for removal of obstructions and 
encroachments on the public streets, and individuals have no right of action 
in the premises unless in the case of real and special damage incurred by 
them. Bourdon i\ Bernard et aL, 15 L. C. J. 60, Q. B. 1870. 

(3) Par. (). And see sec. 183 et seq. as to highways ; and Vide Atty. 
Gen. v. The M. C. P. Ry. Co. and The Trustees of the Turnpike roads, 
i L. N. 580. 1878 ; Lambert v. Corp. of Three Rivers, 10 R. L. 359, Q. B ; 
Ramsay's A. C. 221 ; Bell v. The City of Quebec, L. R., 5 App. Cas. 84 ; 
Regina v. G. T. R. Co., 15 U. C. Q. B. 121 ; In re Day & Town of Guelph, 
ibid. 126; The Caledonian Ry. Co. v. Walkers Trustees, L. R., 7 App. 
Cas. 259 ; Fleming v. The Newport Ry. Co., L. R., 8 App. Cas. 265 ; 
Ricket v. Metropolitan Ry. Co., L. R., 2 E. & 1. App. 175 ; Corporation 
of Parkdale v. West, 12 App. Cas. 602. 

(4) Par. (k). 



GENERAL POWERS. 83 

21. Besides taking the lands they may require for the railway, To make 
they have the right to make drains or conduits in or through 

lands adjoining the railway, for the purpose of conveying water 
either to the railway or from it. (i) 

22. And where drains or sewers, or water or gas pipes, or T alt er posi- 
telegraph, telephone or electric light wires or poles, interfere in 

any way with the construction or operation of the railway, the etc. 
company may divert them or alter their position. (2) 

23. Whilst having the right to exercise these powers of Proviso, 
division and alteration with regard to rivers, streams and high- 
ways, and water and gas pipes, drainage, or telegraph, telephone 

or electric light wires or poles, the company are required to 
restore the same as nearly as possible to their former state, or 
at all events to put them in such a state as not to materially 
impair their usefulness. (3) 

24. The powers of the company include also the right to Telegraph 
construct or acquire electric, telegraph and telephone lines for ^ te ep c 
the purposes of its undertaking. (4) Railway companies under 

the Dominion Act have not the power to construct or acquire 
telegraph or telephone lines for commercial business, that is to 
say, for the transmission of messages for the public ; their 
powers in this respect can be exercised only for the purposes of 
the railway, unless specially authorized by the special Act. But 
under the Quebec Act, (5) they have the power to establish 
telegraph lines along the whole extent of the railway, which lines 
may be used by the public generally, under such rules and 
regulations as the company may fix. 



(1) Par. (t). In an action of damages by reason of plaintiff's land being 
overflowed in consequence of neglect of company to keep ditches on each 
side of railway in proper order. 

Held, in appeal, that as the ditches in question had been cut by defen- 
dants to carry off surplus water, and were so cut as to conduct the water 
into a watercourse running through plaintiffs land, which was thereby 
flooded, and damage caused, that defendants were liable notwithstanding 
the rule of law " that he who, in the construction of any work upon his 
property, uses his right without violating any rule of law or of usage or title 
or contrary possession is not held foi the damage resulting therefrom. 
The G. T. Ry. Co. and Miville, 14 L. C. ..469, Q. B. 1864. 

(2) Par. (/). (3) Sec. 91. (4) Sec. 90 (;). 
< 5 ) R. S. Q. 5176. 



THE RAILWAY LAW OF CANADA. 



To make and 
maintain rail- 
way. 



To erect 
buildings, etc. 



To exercise 
powers be- 
yond Inter- 
national 
boundary. 



25. In addition to the powers mentioned, the company are 
authorized, as a matter of course, to make and complete their 
railway, and to alter it and to keep it in repair ; and the railway 
may be worked by any mechanical power, either steam, electri- 
city or the atmosphere, or by animals, or by any combination of 
them, (i) 

26. They may also erect and maintain all the buildings, sta- 
tions, depots, wharves, etc., (2) that are required for the railway, 
and construct the engines, cars and other machinery necessary 
for the working of their railway and the accommodation and use 
of their passengers, freight and business, or acquire the same by 
purchase ; (3) and as a result of the foregoing powers, they are 
further given power to carry passengers and goods on the 
railway, and to fix the time and manner in which they shall be 
carried and the tolls and compensations for such carriage, (4) 
and from time to time alter, repair, or discontinue the before 
mentioned works or any of them, and substitute others in their 
stead. (5) Then comes a wide and general clause empowering 
the company to do all other acts necessary for making, main- 
taining or altering or repairing and using the railway. (6) 

27. In 1890 Parliament extended these powers, so that any 
company operating a railway from any point in Canada to any 
point on the International boundary line may exercise beyond 
such boundary the powers which it may exercise in Canada, in 
so far as they are permitted by the laws in force there. (7) 

(1) Sec. 90 (). 

(2) Vide, London, Brighton & South Coast Ry. Co. r. Truman, L. R.,. 
II App. Cas. 45. 

Under sec. 46 C. 109 R. S. C. railway companies are bound to pay for 
damages caused by the erection of snow-sheds, where the damage is caused to 
the property itself on which the sheds are erected, and diminishes its value. 
Action for such damages can be taken by the owner of the land, although not 
in possession. Sanche v. C. P. R. Co., 16 R. L. 296. 

(3) Par. (/). (4) Par. < (5) Par. (/). 

(6) Par. (g). Where it was alleged that the G. T. Ry. Co. were carrying 
on the business of carters by conveying freight to and from the city ana 
their depot, to the detriment of the public and carters of Montreal. Held, 
the company had power to employ particular carters exclusively for so collect- 
ing and delivering freight, and that this was not a violation of their charter, 
but was essential or at least incidental to their business as common carriers, 
and fell within the meaning of the Act respecting railways (C. S. C., c. 
66, 8), and that an injunction would not lie. The Atty. Gen. v. The G. T^ 
Ry. Co., i6L. C. R. 91. 

(7) 53 Vic., c. 28. 



GENERAL POWERS. 85 

28. And by the same Statute as amended by 55-56 Vic., cap. To sell lands 
27, railway companies were given power to acquire, seller other-^^^ 
wise dispose of lands obtained from the Crown or any corpor- otherwise. 
ation or other party. 

29. Whilst the Legislature has given railway companies these Proviso as to 
extensive powers, it has at the same time endeavored to protect compensation 
the public in every possible way, as we will have occasion to caused by 

point out later: suffice it for the moment to call attention to the exercise P f 

... ... powers. 

general provision contained in the Act, that the company shall, 

in the exercise of their powers, do as little damage as possible, 
and make full compensation Li the manner provided therein, 
and in the special Act, to all parties interested, for all damage 
by them sustained by reason of the exercise of such powers, (i) 
It is not convenient to discuss at this point the meaning 
and extent of this clause. It is sufficient to here point out that 
the compensation which it is provided railway companies shall 
make for damage caused in the exercise of their powers is the 
statutory compensation provided by the Legislature to be 
recovered in the manner thereby fixed. And any further reference 
at the present to this subject may be concluded by the observa- 
tion that, in the opinion of the author, the only remedy of the 
party suffering damage caused by railway companies in the 
lawful and proper exercise of their corporate powers, under 
authority of Parliament, is that provided by Statute ; but for 
damage caused by the fault or negligence of railway companies 
or their servants, in the exercise of these powers, the party 
suffering has his recourse at common law. (2) This is a wide 
subject, which will have to be more fully considered when we 
come to treat in detail of the liability of railway companies for 
damages caused in the exercise of the various powers conferred 
upon them by Statute. 



(i) Sec. 92. 




London & Brighton Ry. Co. . Truman, n App. Cas. at pp. 45 and 61 ; 
National Telephone Co. v Baker, 3 R. 318 ; C. C. 1053-54- 



CHAPTER V. 



FINANCING OF RAILWAY COMPANIES. 



1. Payment of right of way, plant. 

contractors, etc., by issue of paia- 
up stock. 

2. Preferred stock. 
3 Increase of stock. 

4. Subsidies and bonuses . 

5. Issue of promissory notes and 
bills. 

BONDS, DEBENTURES, ETC. 

6. Issue of, authorization of share- 
holders. 

7. Time and plac: of payment. 
Rate of interest. 

8. Form. 

9. Sale and pledge . 

Purpose to be applied to. 

10. Limit of issue must not be ex- 
ceeded. 

1 1 . Re- issue. 

12. Restriction oj powers (now re- 
moved) . 

13. Mortgage deed. 

14. Bonds a fint claim. 

15. Trustees for bondholders. 

1 6. Bondholders mortgagees. 

1 7. Interest. 
Coupons. 

1 8. Bondholders' position . 

19. Powers of bondholders . 

20. Transfer. 

21. Jurisprudence. 

22. Power to borrow and mortgage. 

23. " give lien on railway 
and alienate lands. 

24. Pcwtr to alienate franchise. 



Sale of railway. 

Bonds, a first charge on the 
undertaking, etc. 
Undertaking. 
Tolls and income. 
After acquired property. 
Vendor's lien . 

Rolling stock part of realty ? 
Rails and other supplies. 
Formalities in making and 
issuing bonds waiver. 
Directory requirements as to 
formalities. 
Stolen bonds. 

Pleading want of formality . 
Payee not mentioned. 
D: Ventures negotiable instru- 
ments. 

Coupons and interest thereon. 
Place of piesentment and pay- 
ment. 

Suit upon (.oupo>is. 
Transfer and registration of 
bonds. 
Default. 

" At the next general meeting.' ' 
" Raising' money'* 
" Best terms and conditions.'" 
Distinction between pledge and 
deposit as collat ral stcurit\ . 
Extent of borrowing power 
condition precedent. 
Excessize borrowing power cured 
by subsequent Act . 
Company not restricted to bonds 
alone as security for monies dor- 
rowed. 



FINANCING OF RAILWAY COMPANIES. 87 



TRUSTEES. 



5 1 . Failure to act. 

52. Rights of bondholders to protect 

their interests. 



53. Notice. 

54. Trustees as common carriers . 

55. Who are trustees. 

56. Distinction between mortgage and 
hypothec under the civil and 
common laiv. 



1. Before considering the general powers of railway companies Payment of 
that are to be exercised under the Statute, we must consider "^ ^ ay ' 
what are the financial means of which the company may avail tractois, etc., 

itself in order to obtain the necessary funds for the purpose of the by ' ssue f , 

paid-up stock. 

construction and operation of the road. First of all, there is the 
capital stock, which the directors have the power to call in, in 
the manner already mentioned, (i) The money thus obtained 
can only be used for the payment of the cost of the preliminary 
expenses of the company, the making of surveys, plans and esti- 
mates, and the construction, maintenance, operation and other 
purposes of the railway generally. (2) 

There is also the means provided by sec. 39 for the pay- 
ment for right of way, plant, rolling stock or materials of any 
kind, and the services of engineers and contractors, by the issue 
of paid-up stock. (3) 

(1) Supra, p. 63. 

(2) Sees. 33 and 35. 

Vide Cohen v. Wilkinson, 12 Beav. 138, I Mac. & G. 481 ; Bagshaw v. 
Eastern Union Ry. Co., 7 Hare lit, 2 Mac. & G. 389; Hodgson v- The 
Earl of Powis, 12 Beav. 392, 529 ; Graham v. Birkenhead, etc,, Ry. Co. , 
2 Mac. & G. 146. 

(3) See page 68 supra. An agreement between a person to take, and a 
company to give, fully paid shares, in payment for property or services, is not 
satisfied by the company allotting shares not fully paid up any more than a 
contract for cotton would be satisfied by the company supplying bark. 
(Bowen L. J. , 1887.) Arnot's case, re Barangah Oil Refining Company, 
L. R., 36 Ch. D. 711 ; Anderson's case, 7 Ch. D. 75 ; i Ch. D. 124. 

Thus where directors had agreed to transfer fully paid-up shares into A's 
name as security for an advance, the court held that they had no power to 
put A on the register for part-paid shares. Ashworth v. Bristol Ry. Co., 15 
L. T. R. 561. The company does not fulfill its contract in such a case unless 
it issues fully paid-up shares, which will be recognized as such in law. If it 
omits to make them so by registering a contract, neither the company nor its 
liquidator can enforce the contract. Arnot's case, 36 Ch. D. 702. But see 
re London Celluloid Co., 39 Ch. D. 190. 

The allottee is in such case entitled to repudiate the shares. Re Addlestone 
Linoleum Co., 37 Ch. D. 191 ; Mudford's claim, 14 Ch. D. 634 ; ex-parte 
Appleyard, 1 8 Ch. D. 587. 

Where a company had agreed to pay for a concession in fully paid-up 



THE RAILWAY LAW OF CANADA. 

Preferred JJ. The company may also raise money for the purpose of the 

undertaking, by the issue of what is called preferred stock. 

By preferred stock is generally understood stock upon which 
the dividends, at a certain fixed rate, are guaranteed by the 
company and are paid in preference to the dividends upon the 
common stock, that is to say, that a holder of preferred stock is 
entitled to be paid a dividend at the rate specified, out of the 
net profits of the company, before any holder of common stock 
is entitled to any payment of dividends. In the absence of 

shares, but, on account of the vendor's alleged delay in handing over the 
concession, the company had registered him as a holder of the shares as unpaid, 
the court ordered the register to be rectified, the company to enforce any 
claim it might have against the vendor in the usual way. Ex-parle Wilson, 
re Foreign Gas Co., W. N. 1874, 139. 

A transferee of vendor's shares allotted as fully paid-up (but not in cash or 
under a registered contract) is in no better position than his transferor, and 
will be treated in the winding-up as the holder of unpaid shares, if the com- 
pany has done nothing to mislead the transferee. Crickmer's case, re Carri- 
beau Co., 44 L. J. Ch. 595; affirmed, lo Ch. App. 614. Blyth's case, re 
Heaton Steel & Iron Co., 4 Ch. D. 140. But see re British Farmers' Pure 
Linseed Cake Co., 7 Ch. D. 533, affirmed, 3 App. Cas. 1004, explaining Blyth's 
case. 

If a vendor transfers paid-up shares to a director to qualify him, the director, 
though liable for a breach of trust, cannot be treated as the holder of unpaid 
shares. Carling's case, i Ch. D. 115. 

Where a contract to allot shares as fully paid-up has been registered, the 
registration enures to the benefit of the nominee of the allottee. Kirby's case, 
re Dominion of Canada Plumbago Co., 46 L. T. R. 682; following Carling's 
case. 

If a company has registered an allottee as holder of shares fully paid-up, 
or issued certificates representing the shares as paid-up (though in fact there 
has been no payment in cash or registered contract), it will be estopped by 
such admission, and likewise will the liquidator, as against a transferee without 
notice, from saying that the shares are not paid-up in cash. Nicolls's case, 
re British Farmers' Pure Linseed Cake Co., 7 Ch. D. 533. Affirmed (H. L.) 
sub.nom. Burkinshaw p.Nicolls, 3 App. Cas. 1004; re London Celluloid Co., 
39 Ch. D. 190, 205. 

And this title by estoppel the transferee may pass even to a person who has 
notice that the shares have not been paid-up ; e.g., an officer or solicitor of the 
company. Barrow's case, 14 Ch. U. 432 ; commented on re London Celluloid 
Co., supra ; Turpin's case, W. N. 1870, 77. And see, re A. W. Hall &Co., 
37 Ch. D. 712. 

But the doctrine of Burkinshaw v. Nicolls does not apply where transferee 
can be proved to have had notice, express or constructive, that the shares 
were not in fact paid-up ; the burden of such proof is on the liquidator. Re 
London Celluloid Co., 39 Ch. D. 190; re Halifax Sugar Refining Co., W. N. 
1891, 2, 29 ; re New Chile Gold Mining Co., W. N. 1892, 193. Nor does 
this doctrine apply where the shares are taken not on the faith of the com- 
pany's certificate, but upon representations made by the directors. Re Vulcan 
Iron Works Co., W. N. 1885, 120; ex parte Sandys, re Railway Publishing 
Co., 42 Ch. D. 98. 



FINANCING OF RAILWAY COMPANIES. 89 

special legislative authority, preferred stock cannot be issued 
without the consent or acquiescence of the holders of the 
ordinary or common stock of the company, (i) By consent is 
meant their lawful consent given at a meeting properly called for 
the purpose; but the term " acquiescence" has a much wider 
meaning. It has been held by the courts in New York that a 
holder of common stock, who had not expressly consented to 
the issue of preferred stock, but who had allowed the stock to 
be issued and preferential dividends paid thereon without taking 
action, could not afterwards validly attack the issue of the stock. 
(2) It must be always understood that preferred stock cannot 
be issued beyond the amount of the capital stock, authorized by 
the charter of the company, without special legislative authority 
therefor ; or unless the capital is increased as indicated in the 
next paragraph. 

3. The original capital stock of the company may be Increase of 
increased, with the approval of the Governor in Council, (3) to t< 
any amount, (4) but this increase must be sanctioned by the vote 
of the shareholders holding at least two-thirds of the subscribed 
stock of the company, at a meeting specially called for that 
purpose by the directors, by notice delivered to each shareholder 
personally, or properly directed to him and deposited in the 
post office at least twenty days previous to such meeting, and 
this notice must state the time, place and object of the meeting, 
and the amount of the proposed increase. (5) Of course this 
increase of capital stock may be either in the form of common 
stock or preferred stock, and it is, especially in the United 
States, a favorite method of raising money for the purpose of the 
company, to make such subsequent issue preferred stock. 
Under our Act, it would seem that this increase of capital stock 
is subject purely to the approval of the Governor in Council ; (6) 
but where the increase is allowed, as in many of the States, upon 
the mere sanction of the shareholders, in meeting assembled, it 
has been frequently held that such increase could not be made 

(l) Harrison v. Mexican Ry. Co., L. R. 19 Eq. 358 ; Matthews v. Great 
Northern Ry. Co., 28 L. J. Ch. 375. 
(2) Hoyt v. Quicksilver Mining Co., 17 Hun. 169. 
(3) Not required by Quebec Act. (4) Sec. 37. 
(5) Sec. 37. (6) Ibid. 



90 THE RAILWAY LAW OF CANADA. 

until the whole of the original capital stock had been subscribed 
and paid-up. This would seem to be consonant with logic 
and reason, and it is doubtful whether an increase of stock 
would be authorized by the Governor in Council here, unless it 
was shown that the whole of the original capital stock had been 
subscribed and paid-up, and that it was necessary and proper for 
the purposes of the company to obtain a further amount of 
money by an increase of the stock. 

Subsidies and 4 4 j n addition to this, railways are frequently assisted by 
public money granted by way of subsidies by the Legislature 
by grants of public lands, and by bonuses from municipal cor- 
porations, (i) 



(i) An act of the Legislature of Canada having provided that a railway 
company should be entitled to 4,000,000 acres of the waste lands of the 
Crown on completion of their road, and a proportionate quantity of such lands 
on completion of 20 miles of the line: Held, that a petition of right presented 
to the Lieutenant Governor of Ontario, addressed to Her Majesty, was the 
proper proceeding for the purpose of enforcing the claim of the company 
against the Province. Can. Central Ry.Co. c. The Queen, 20 Gr. Chy. 273. 

A by-law of the defendant corporation, providing for the delivery of 
debentures to a railway represented by the plaintiffs as a bonus to aid them in 
constructing their railway, having been adopted by a vote of the rate-payers, 
was read a second and third time, and passed by the council, but vas neither 
signed nor sealed because a month had not elapsed from its first publication, 
the notice required by 36 Vic., c. 48, s. 231, ss. 3, to be appended to the 
copy of the by-law as published, having stated that the by-law wo.uld be 
taken into consideration after a month. 

Subsequently a motion to read the by-law a second and third time was lost. 
Later on after election of new council it was finally passed, signed and 
sealed. The railway company were bound to begin within three years and 
to finish the road within eight years, which they failed to do within the time. 

Held (affirming 8 O. R. 201) that the plaintiffs were not in a position to 
enforce the delivery of the debentures after the lapse of nine years from the 
passing of the by-law, when a total change of circumstances had taken place, 
and when the period fixed by plaintiff's charter for the completion of the 
railway had expired. Canada Atlantic Ry. Co. i>. The Corporation of the 
city of Ottawa, 12 O. A. R. 234, affirmed in Supreme Court, 12 S. C. R. 365. 

In consideration of the bonus granted by the plaintiffs to the defendants,, 
the latter agreed: (i) To bring their railway from Ingersoll to some point 
on the line of the Southern Railway, not more than % a mile east of the 
present passenger railway station of the Canada Southern R}'. Co. at St. 
Thomas ; and (2) to run all their passenger trains to and from a small 
station on Church street. The defendants performed the first part of the 
agreement, and also the second, as long as the Canada Southern Ry. Co. per- 
mitted the ue of their line from the point of junction to the small station on 
Church street ; but on the refusal of the other company to continue this 
privilege, the defendants discontinued the performance of this part of their 
agreement. 



FINANCING OF RAILWAY COMPANIES. 91 

5. Besides these means of obtaining money, the directors have Issue of pro- 



power to borrow money in various ways. The company, acting ^" 

Held, that this was not a case in which defendants should be directed 
specifically to perform their contract as to the Church street station, but that 
the plaintiffs were entitled to a reference as to damages for breach thereof. 
The Corporation of the city of St. Thomas v. The C. V. R. Co., 15 O. R. 
673, and in Appeal, 12 O. A. R. 273. 

A by-law of the defendant municipality provided that on the completion 
ready for running of the E. &H. Ry.from Chatham to the C. S. Ry. crossing, 
by a named day, and the construction and completion within two years from 
the date of such by-law of the whole track and road, with stations, freight 
sheds, sidings at such crossing and upon the completion of a bridge across the 
Thames, and the complete construction of the road in other respects to the 
satisfaction of the Commissioner of Public Works, and upon the company run- 
ning said road with all necessary accommodations for the public for one week, 
the defendants should forthwith, within 2 years from the day the by-law took 
effect (30th Dec., 1882), deliver to the E. & H. Ry. Co. debentures to the 
amount of $30,000. By an agreement made prior to the passing of the by-law, 
the company covenanted with the defendants amongst other things to run the 
road when completed, and to build a station at or near the corner of Col- 
borne and William streets, and in consideration thereof the defendant agreed 
to submit the by-law. Upon an action by the assignee of the E. & H. Ry. 
Co. to compel delivery of the debentures, the defendants counter-claimed for 
damages for breach of agreement and for a specific performance. The 
engineer named by the commissioner of P. W. granted a certificate as to 
completion of the work. The defendants claimed the right to have con- 
tinuous use of the station "at or near the corner of Colborne and William 
streets " enforced by the Court. 

Held, affirming Cameron, C. J., that the certificate of the engineer estab- 
lished a sufficient performance coupled with the fact that the road had actually 
been run for a week, that the covenants in the agreements were independent, 
and non-compliance would not be a valid defence to the demand ; but that 
under the agreement and by-law the station formed part of the general under- 
taking, and the obligation could not be limited to its mere construction as 
separate from its use, and defendants were entitled to specific performance as 
respects such station; and that there should be reference to asceitain the 
damages of the defendants on their counter-claim. 

Held, also, that any objections to the by-law were cured by its registration 
under 44 Vic., c. 24, 28, no action to set it aside having been taken within 
three months, and that the Statute applied although the debentures had not 
been issued. Bickford v. Chatham, 140. A. R. 32. Affirmed in Supreme 
Court with minor differences, 16 S. C. R. 235. 

A by-law to aid a railway company by $75,000, was introduced into the 
county council of Peterborough. The by-law was read twice only, and was 
subsequently voted on by rate-pa) ers. When the voting took place there 
was no power in the municipality to grant a bonus, but subsequently an 
Act was passed, declaring the by-law as valid as if it had been read a third 
time, and that it should be legal and binding as if passed after the Act. The 
company subsequently notified the council to send the debentures to trustees 
appointed under an Act 34 Vic. (Ont.), c. 48, and the council next year 
formally repudiated all liability under the by-law by notice, and had collected 
no money or made a sinking fund. 

The company until seven years later made no demand for debentures and 
then applied for a mandamus to compel delivery to the trustees. 

Held, that the effect of the Statute passed 34 Vic. (Ont.), c. 48, apart 



92 THE RAILWAY LAW OF CANADA. 

by the president, or vice-president, or any other officer author- 
ized by the by-laws of the company, may become a party to pro- 
missory notes, or bills of exchange, countersigned by the secretary 



from any effect it might have of recognizing the existence of the railway 
company, was not to legalize the by-law in favor of the company, but was 
merely to make it valid as if read a third time, or as if the municipality had 
power to give a bonus to the company, and there being certain defects in the 
by-law not cured by the Statute, the appellants could not recover the bonus 
from defendants. '1 he Grand Junction Ry. Co. v. The Corporation of 
County of Peterborough, 8 S. C. R. 76. Privy Council, judgment maintain- 
ing, but on other grounds. Vide~L,. R., 13 App. Cas. 136. 

Under 44-45 Vic., c. 40, 2 (P. Q.), passed on a petition of the 
Quebec Central Railway Company, after notice given by them asking for an 
amendment of their charter, the town of Levis passed a by-law guaranteeing 
to pay to the Quebec Central Railway Company the whole cost of expropria- 
tion for right of way for the extension of their railway to deep water, over 
and ab~>ve $30.000. The appellants (rate-payers of Levis) applied for and 
obtained an injunction to stay further proceedings on this by-law on the 
ground of illegality. 

The proviso in section 2 of the Act under which the corporation of the town 
of Levis contended that the by-law was authorized is as follows : " Provided 
that within thirty days from the sanction of the present Act the corporation of 
the town of Levis furnishes the said company with its said guarantee and 
obligation to pay all excess over $30,000 of the cost of expropriation for the 
right of way." 

By the Act of incorporation of the town of Levis, no power or authority is 
given to the corporation to give such guarantee. The Statute 44-45 Vic., cap. 
40. was passed 3Oth June, 1881, and the by-law 2yth July following. 

Held (reversing Q. B.), that the Statute in question did not authorize the 
corporation cf Levis to impose burdens upon the municipality which were 
not authorized by their Acts of incorporation or other special legislative 
authority, and therefore the by-law was invalid and injunction sustained. The 
Quebec Warehouse Co. r. the Town of Levis, n S. C. R. 666. 

Held, by Supreme Court affirming judgment of Q. B., that a debenture 
being a negotiable instrument, a railway company that has complied with all 
the conditions precedent stated in the by-law to the issuing and delivery of de- 
bentures granted by a municipality is entitled to s-aid debentures free from any 
declaration on their face of conditions mentioned in the by-law to be performed 
in future, such as the futuie keeping up of the road. Article 962 Municipal 
Code, L. C. Parish of St. Cesaire v. MacFarlane, 14 S. C. R. 738. 

A municipal corporation under authority of by-law issued and handed to 
the Treasurer of the province of Quebec $50,000 of its debentures as a subsidy 
to a railway company, the same to be paid over to the company in the manner 
(and subject to the same conditions) in which the Government provincial 
subsidy was payable under 44-45 Vic., cap. 2, \ 19, when the road was com- 
pleted and in good running order, to the satisfaction of the Lieutenant Governor 
in Council. The debentures were signed by S- M., who was elected warden, 
and took and held possession of the office after W. J. P. had verbally resigned 
the position. 

In an action by the railway company to recover from the Treasurer of the 
Province the $50,000 debentures after the Government bonus had been paid, 
in which action the municipal corporation was mis en cause as a co-defendant, 
the Provincial Treasurer pleaded by demurrer only, which was over-ruled, and 



FINANCING OF RAILWAY COMPANIES. 93 

for amounts not less than $100. (i) Notes and bills of exchange 
so drawn and signed are binding upon the company without the 
necessity of having the seal of the company affixed, and it is 
provided that every such note or bill of exchange shall be pre- 
sumed to have been made with proper authority until the con- 
trary is shown. (2) But the company is of course not author- 
ized to issue any note or bill payable to bearer, or intended to be 
circulated as money or as the note or bill of a bank. (3) 

Bouds, Debeutures, Etc. 

6. The directors may also, under the authority of the share- Issue of, 
holders given at a special general meeting of the shareholders, authorization 
called after due notice as required for any special meeting of the holders, 
company, provided that two-thirds in value of the subscribed 
stock of the company is represented at the meeting by qualified 






the County of Pontiac pleaded general denial and that the debentures were ille- 
gally signed. 

Held, that the debentures signed by the warden de facto were perfectly 
legal. 

"lhat as the Provincial Treasurer had admitted by his pleadings that the 
road had been completed to the satisfaction of the Lieutenant Governor in 
Council, the onus was on the municipal corporation mis en cause to prove that 
the Government had not acted in conformity with the statute. Corporation of 
County of Pontiac v. Hon. J. G. Ross, 17 S. C. R. 406. 

In consideration of a bonus granted by the plaintiffs, the W. G. & B. 
Ry. Co. covenanted: "To erect and maintain a permanent freight and 
passenger station at G." Shortly afterwards the road was leased, with notice 
of this agreement to the defendants, who discontinued G as a regular station, 
merely stopping there when there were any passengers to be let down or 
taken up. 

Held, affirming the decree of Spragge, J., 25 Gr. 86, that the mere 
erection of station buildings was not a fulfillment of the covenant, and that 
the municipality was entitled to have it specifically performed. The corpora- 
tion of the township of Wallace v. The G. W. Ry. Co., 3 O. A. R. 44. 



(i; Sec. 98. 

(2) Ibid. Sec. 5 of 16 Vic., cap. 241, gives power to the Midland Ry. 
Co. to become parlies to bills, and enacis : " Any bill of exchange drawn, 
accepted or endorsed by the president of the company, with the counter- 
signature of the secretary of the company, and under the authority of a quorum 
of a majority of the directors, shall be binding on the company," etc., etc. 
Vide report of case and Act. A bill of Exchange addressed to the President 
Midland Railway, Port Hope, was accepted as follows : "For the Midland 
Railway of Canada. Accepted, H. Read, Secretary; Geo. A. Cox, Presi- 
dent ; " the latter being then the president of the company. Held, affirming 
Q.B. (44 TJ. C. R., 542), That the defendant Cox was personally liable 
(Patterson & Morrison, J. J. A., Diss.). Madden v. Cox, 5 O. A. R. 473. 

(3) Sec. 98. 



94 THE RAILWAY LAW OF CANADA. 

shareholders, (i) issue bonds, debentures, or other securities, 
signed by the president or other presiding officer, and counter- 
signed by the secretary. (2) 

The issue of these bonds is subject to the provisions contained 
in the general Act, and to any special provisions which may be 
contained in the charter of the company. 

Time and 7. They may be made payable at such times and places, and 

place of pay- j n SU( ,j 1 manner} an( j ma y ^Q^ suc \- l ra t e o f interest, not 

Rate of exceeding six per cent., as the directors may think proper. (3) 

interest . 

Form. 8. They are generally issued in printed form, and it is pro- 

vided that the signatures to the bonds or debentures may be 

engraved. (4) 

Sale and 9. These bonds or debentures may be issued, sold or 

, pledged by the directors, at the best price and on the best terms 
Purpose to be r J _ 

applied to. and conditions that they can obtain, for the purpose of 
raising money for the prosecution of the undertaking, (5) but 
none of these debentures may be fora less sum than $100. (6) 

Limit of issue 1O. It must be remembered that if any limit is fixed by the 

must not be S p ec j a i Act, the amount of bonds or debentures to be issued 
exceeded. 

must not be exceeded. (7) 

Re-issue. 11. The power of issuing bonds is not exhausted by 'the 

total authorized issue, but may be exercised from time to time 
upon the bonds constituting such issue being withdrawn or paid 
off and cancelled. (8) 

Restriction of 12. Previous to the passing of 55-56 Vic., cap. 27, the issue 



owers (now Q f ^Q^^ or debentures was prohibited until 20 per cent, of the 
cost had been actually expended on the work ; but by that Act 
this restriction has been removed. 

Mortgage 13. These bonds or debentures are secured by a mortgage 

deed. deed, by which a mortgage and lien may be created upon the 



(1) No restrictions under Quebec Act as to meeting, etc., company may 
borrow and issue bonds, etc., and hypothecate the lands, tolls, etc., of the 
company as security. R. 8. Q. Art. 5132 (n). 

(2) Sec. 93. 

(3) Sec. 93. (4) Ibid. 

(5) Ibid., ss. 2. (6) ]bid., ss. 3. 

(7) Ibid., ss. 4. (8) Ibid.,ss. 4. 



FINANCING OF RAILWAY COMPANIES. 95 

whole of the property, assets, rents and revenues of the company, 
both present and future, as may be described in the deed; (i) 
but the rents and revenues of the railway are subject in the first 
instance to the payment of any penalty imposed for non-com- 
pliance with the requirements of the Act respecting returns to 
the minister, and next to the payment of the working expenses 
of the railway, which payments take precedence of the rights of 
the holders of the bonds. (2) 

By the mortgage deed, any powers, rights and remedies may 
be given to the bondholders or the trustees, not inconsistent 
with the provisions of the Act, or the holders may be restricted 
in the exercise of any power, privilege or remedy granted by the 
Act. (3) 

14. These bonds or debentures so issued constitute a first Bonds a first 
preferential claim and charge upon the property of the company, c aim ' 
and its franchises, tolls, income, rents and revenues, and all 
property of every kind and description after the satisfaction of 
the payments just mentioned. (4) 

lo. By the mortgage deed securing the bonds or debentures, Trustees for 
trustees are appointed, in whose favor, as representing the 
holders, all the property, revenues and franchises of the company 
are mortgaged ; 

16. And each holder of the bonds is deemed to be a mortgagee Bondholders 
pro rata with all the other holders, but no proceedings can be moltgagees ' 

taken by law or under the Act to enforce payment of these 
bonds, or the interest upon them, except throught the trustees 
appointed by the mortgage deed. (5) 

17. The interest on these bonds is generally made payable interest, 
semi-annually, at a fixed date, and detachable coupons are affixed Coupons, 
to the bonds, which are generally made payable to bearer, either 

at the office of the company or more generally at some bank, (6) 

(1) Sec. 94. 

(2) Ibid. (3) Ibid., ss. 2. 
(4) Sec. 95. (5) Ibid., ss. 2. 

(6) Article 1069 of the Civil Code applies to the coupons of bonds, 
and interest runs on such coupons from the dates they respectively fall due, 
without proof that the debtor was put in default otherwise than by the mere 
lapse of time. Desrosiers v. M. P. & B. Ry., 28 L. C. J. I, in Review 1883. 

As to the validity of bonds issued when the conditions imposed on the 



96 THE RAILWAY LAW OF CANADA. 

Bondholders' 18. It will be seen at once that by means of the issue of 
bonds and debentures such as these, the company is given a 
very important means of raising money for the purposes of its 
undertaking ; and the holders of the bonds are secured by the 
mortgage upon the property and franchises of the company ; 
(i) and are put in a better position than the shareholders 
themselves, inasmuch as the holders of the bonds take pre- 
cedence of all other creditors, and the shareholders are only 
entitled to be paid after the creditors' claims have been satisfied. 

Powers of 19, The powers of the holders of the bonds in the case of 

bondholders. ...... . . ,- 

non-payment of principal or interest are, that at the first annual 

general meeting of the company, after default has occurred in 
paying the principal or interest on any of the bonds, and at alt 
subsequent meetings, the holders have the right to vote, and to 
be elected as directors, in the same manner as shareholders 
would, (2) that is to say, that they have the same number of 
votes as shareholders, holding an equivalent amount of stock. 
But these rights, be it observed, cannot be exercised unless it is 
so provided by the mortgage deed, nor unless the bonds or 
debentures have been registered in the name of the holder, in 
the same manner as the shares of the company are registered, 
at least ten days previous to the meeting at which the holder 
claims to excise his right to vote ; (3) but the company 'are 
bound, on demand, to register such bonds, and the bonds are 
thereafter transferable in the same manner as the shares of the 



railway company have not been substantially fulfilled. See The Corporation 
of the City of Quebec v. The Quebec Central Ry. Co., 10 S. C. R. 563. 
Bickford v. Grand Junction Ry. Co., i S. C. R. 696; Cassils Dig. 423. 
infra, p. 97. 



(1) A holder of railway bonds has the right by conservatory process 
to prevent rolling stock which is hypothecated for the payment of the 
bonds from being removed from the road. Wyatt v. Sene'cal, 4 Q. L. R. 
76, also i L. N. 98. 

In an action between a preferential bondholder and the company, the 
Court cannot adjudicate with respect to priority of hypothec or lien of such 
bondholder, nor in such action can the Court declare that the road rolling 
stock, etc., are not susceptible of sale by the sheriff. Morrison v. G. T. Ry. 
Co , 5 L. C. J. 313, S. C. 1861. 

(2) Sec. 96. See The M. P. & B. Ry. Co. & The Hochelaga Bank, 27 
L. C. J. 164, Q. B. 1883. 

(3) Sec. 96, ss. 2. 



FINANCING OF RAILWAY COMPANIES. 97 

capital stock, (i) The bonds so issued by the directors may 
be payable either to order or to bearer. (2) 

20. They are generally made payable to bearer, and in such Transfer, 
case are transferable by delivery, that is to say, transferable from 

hand to hand without endorsement, unless they are registered as 
just mentioned ; but once registered they are only transferable 
by written transfers upon the books of the company in the same 
manner as shares in the capital stock. (3) 

21. Having stated the clauses of the Act with regard to the Jurisprudence, 
powers of the company as to mortaging property, the issue of 

bonds and similar securities, and the rights of the holders under 
the Act, it may be convenient to consider some of the more 
important judicial decisions bearing upon questions which have 
arisen under the Act or similar provisions of other Acts. 



22. An important case involving the power to mortgage, Power to 

borrow an 
mortgage. 



arising under similar provisions of a former Railway Act, is that of c 



Bickford v. Grand Junction Ry. Co. (4) The Grand Junction 
Ry. Co. having statutory authority to borrow money, issue bonds 
or other securities, to hypothecate the lands, tolls, and other pro- 
perty of the company, and to sell or dispose of property re- 
quired for the purposes of the company, entered into an agree- 
ment with a contractor for building its road, by which the con- 
tractor was to receive in payment certain municipal and other 
securities, and the balance in the first mortgage bonds of the 
company, upon the completion of the work. After building a 
portion of the road, the contractor was unable to procure iron 
for it, and the railway company, to enable him to obtain it, made 
a mortgage, to one Buchanan, as trustee, of a portion of its road, 
to secure the payment to the Bank of Montreal of the notes of 
the contractor given for the price of the iron ; providing however, 
that, in case of his failure to pay the notes, the mortgagee's sole 
recourse should be against the property and not against the com- 
pany. The vendors of the iron retained a lien upon it until it 
should be laid upon the track. The contractor, after laying a 



(i) Sec. 96, ss. 2. (2) Sec. 97. 

(3) Sec. 97. (4) i S. C. R. 696. 

7 



98 THE RAILWAY LAW OF CANADA. 

small part of the iron, became insolvent, and a large quantity 
of the iron which had been delivered to him, but which had not 
been laid upon the road, was sold by vendors at a large loss upon 
the price at which the iron was purchased. The holders of the 
mortgage on the railway then sought to enforce it for the value 
of the iron actually laid upon the track, as well as for the loss 
resulting from the re-sale of the iron. The railway company, 
while not objecting to paying the price of the iron actually placed 
upon the road, objected to paying the loss arising from the re- 
sale, and contended that the mortgage was ultra -vires. 

The Court of Appeal of Ontario started with the principle, 
that without express legislative authority a mortgage of the cor- 
porate property of a railway company could not be made; and 
from this deduced the conclusion, that a mortgage, to be effectual, 
must be within the terms of the authority given to create it. The 
only authority this company had to mortgage its property was 
given to secure the repayment of money borrowed for the pur- 
pose of completing or maintaining the road ; whereas the debt 
secured by the mortgage in this case was that of the contractor. 
The mortgage was a pledge, by way of collateral security, that 
the contractor should pay his own debt ; and the Court regarded 
such a mortgage as beyond the power of the company, and inva- 
lid, even if assented to or ratified by every stockholder. The 
court also declared that, inasmuch as the authority given tci the 
company was to mortgage its property, tolls and revenues, the 
company could mortgage only the whole undertaking, and that a 
mortgage of a portion of the line which the company was consti- 
tuted to build was void, (i) 

On appeal from the judgment of the Court of Appeals of Ont- 
ario, the Supreme Court of Canada reversed this judgment and 
held the mortgage valid. (2) The court laid down the propo- 
sition that every corporation has the power to mortgage its pro- 
perty for the purposes of the undertaking, unless this power be 
limited by its charter or by statute ; although such limitation 
may be deduced either from the object of the corporation being 
limited to certain specific things, or from its property being subject 



(1) 23 Grant's Chy. 302. 

(2) I S. C. R. 696. 



FINANCING OF RAILWAY COMPANIES. 99 

to charges or trusts in favor of the public, with which a mortgage 
would be inconsistent, (i) 

The Statutes, however, confer express power to mortgage 
the company's property for the payment of loans and debentures. 
This statutory power to mortgage for a special purpose does not 
restrict the general power of the company incidental to its exist- 
ence to deal with its property by way of mortgage. 

The mortgage, moreover, was within the scope of the powers 
conferred upon the company to construct and work a railway 
and to alienate and to dispose of lands for that purpose. 

" The rails, for the price of which the mortgage was given, 
" were indispensable to enable the company to carry out its 
li undertaking. The company might have purchased them directly 
" from the vendors. It was found more convenient, however, 
' ; to make a contract for the construction of the railway, by 
41 which the contractor undertook to furnish the iron. 

" Having power to give a mortgage to secure the price of rails, 
" it can make no difference that they have given the mortgage as 
" sureties for the contractor, and not as direct purchasers. 
" Indirectly, it is given to secure the price of the rails. 

" Had the mortgage been given for any object foreign to, or 
inconsistent with, the purposes of the incorporation, then, no 
doubt, it would have been ttltra -vires of the company. A 
familiar instance of a railway company exceeding the limits 
of its undertaking is afforded by a well-known case, in which such 
a corporation added to its legitimate business that of a line of 
steamships. Had this mortgage been given in aid or furtherance 
of any similarly unauthorized enterprise, it would, of course, have 
been ultra vires; but it is manifest that such was not the case 
here, and that the sole object of the corporation was to attain the 
end for which it had been created." (2) 

Furthermore, the mortgage cannot be considered wholly void 
when it creates a good charge upon any part of the company's 
property, although it includes franchises and property which may 
be so impressed with a trust in favor of the public that it is beyond 
the power of the company to deal with them. 



(1) Per Strong, J., at p. 730. 

(2) Strong, J., at pp. 732-33. 



TOO THE RAILWAY LAW OF CANADA. 

Conceding, say the court, that the mortgage, if confined to the 
franchise and to the railway and its adjuncts, would have been 
void as being a charge on subjects extra commercium, it does 
not follow that it may not be a good charge on the other lands 
over which the company had power of free disposition, and for 
that reason alone the order of the court below should be re- 
versed, (i) 

Power to give 23. The case of Bickford v. Grand Junction Ry. Co. was 
lien on rail- recently followed in the case of Charlebois v. The Great North 
nate lands. West Central Ry. Co., (2) which decided that it was infra vires of 
a railway company to give a contractor a lien and first charge on 
the part of the railway which he constructed, and that a railway 
company has a general power to give securities for purposes 
within the scope of the power conferred upon the company to 
construct and operate the railway, unless this power is expressly 
negatived in the Act of incorporation, and express power to 
borrow, and give specified securities, will not exclude the general 
power. (3) 

Mr. Jones, in his work on railroad securities, disapproves of 
the judgment in Bickford v. Grand Junction Ry. Co., in that, 
conceding its correctness as applied to the case in hand, it con- 
tains some propositions and reasoning regarding the power of 
railway companies to alienate lands, not in accordance with the 
best English and American authorities. (4) 

But the present Dominion Railway Act (as amended by 53 
Vic., cap. 28, and 55-56 Vic., cap. 27) contains provisions au- 
thorizing a company to alienate, sell, and dispose of the lands 
obtained by them from the Crown, or given to them by any 
corporation or other party, for the construction, mainte- 
nance, accommodation and use of the railway. It is true that 
by section 90, par. (c) of that Act, the power to alienate and 
dispose of lands purchased is lestricted to so much thereof 
as is not necessary for the purposes of the road. But by par. 
(5) added by the amending Acts, the power to sell or otherwise 
dispose of lands obtained either from the Crown, corporations, 
or persons, seems unlimited. 



(i) I S. C. R. at p. 737. (2) 9 Man. I. 

(3) And see Win. & H. B.Co. v. Mann, 7 Man. Si. 

(4) 10. 



FINANCING OF RAILWAY COMPANIES. 101 

However, the above decision goes the length of holding that 
the express power to borrow and to give the securities specified 
by the Statute will not negative or exclude the general power 
the company has to dispose of lands and give other securities 
for purposes within the scope of the powers conferred upon the 
company to construct and operate the railway, (i) 

24:. The right to be a corporation is not of course susceptible p ower to 
of alienation by mortgage or otherwise, and this is recognized in alienate fran 
The Railway Act, under sections 278-280. The franchise men- 
tioned in article 95 means such of the company's franchises or 
privileges as will enable the grantee to have the same use and 
beneficial enjoyment of the property which the company itself 
had. (2) 

The question debated by Strong, J., in Bickford v. Grand 
Junction Ry. Co. (3) as an open one, viz., as to whether a rail- 
way can mortgage or otherwise charge its franchise and under- 
taking, is now set at rest by section 95 of The Railway Act. 

Where the railroad passes into hands of persons not having 
the necessary corporate powers to operate it, special leave must 
be obtained by act of Parliament to do so. (4) 

25. It has been recently held in Ontario, (5) that, so long as Sale of 
a railway is a going concern, bondholders have no right, where railway, 
interest on their bonds is in arrears, to seize, or take, or sell, Or 
foreclose any part of the property of the company. Their 
remedy is by the appointment of a receiver. 

The reasoning in this case was based upon, among others, the 
leading English case of Gardner v. London, Chatham & Dover 
Ry. Co., (6) which appears to rest upon the consideration that, 
inasmuch as Parliament has made no provision for the transfer 
of its statutory powers, privileges, duties and obligations from a 
railway corporation to any other person, whether individual or 



(1) And see Charlebois v. G.N. W. C. Ry. Co., 9 Man., at pp. 12, 13. 

(2) Per Strong, J., in Bickford v. Grand Junction Ry. Co., I S. C. R. 

737-738- 

(3) Supra, p. 99-100. 

(4) Sec 278 et seq ; ubi supra, p. 4. 

(5) Phlepsz/. The St. Catharines & Niagara Central R.R. Co., 190. R. 
501 ; Gait v. Erie, etc., Ry. Co , 14 Grant Chy. 499 . 

(6) L. R., 2Ch. 201. 



102 THE RAILWAY LAW OF CANADA. 

corporate, it would be contrary to the policy of the Legislature, 
as disclosed in the general railway statutes, and in the special 
acts incorporating railway companies, to permit creditors of any 
class to issue execution which would have the effect of destroy- 
ing the undertaking or of preventing its completion. 

However, it would appear by sections 278-280 of our Act, that 
Parliament distinctly contemplated the sale of a railway at the 
suit of a bondholder or under any other lawful proceeding, and 
its subsequent operation by the purchaser under licence from the 
Minister of Railways, or under corporate powers granted by Par- 
liament; and also the closing of the railway, or its being otherwise 
dealt with, as the Railway Committee might determine on the 
purchaser's failure to obtain such powers. 

It is difficult to see, in view of these provisions of the Act, how 
the reasoning upon which the Phelps case was arrived at could 
be sustained. And in Redfield v. Corporation of Wickham (i) 
the Privy Council decided that under the Canadian railway 
statutes a railway may be taken in execution and sold, like 
other immoveables, in ordinary course of law. This decision 
was apparently overlooked in the Phelps case, as pointed out 
by Bain, J., in Charlebois v. G. N. W. C. Ry. Co. (2) 

In Quebec the right to seize and*sell a railway by ordinary 
process of law has always been recognized, (3) and is endorsed 
by the decision o the Privy Council in Redfield ' v. Corporation 
of Wickham ; (4) though this case seems to have turned some- 
what upon the special provisions of the railway company's 
charter. 

The railway may be seized and sold by ordinary process of 
law, even though subsidized by the Provincial Government. (5) 
But held by the Court of Appeals of Quebec, that a railway 
may not be sold in part, and is an indivisible thing, and can 



(1) 33L-J-, P.C. 170. 

(2) 9 Man. ir. 

(3) Morrison v. G. T. R. Co., 5 L. C. J. 313; Corporation of Co. of 
Drummond v. South Eastern Ry. Co., 24 L.C. J. 276; Hochelaga Bk. v. 
M. P. B. Ry. Co., 4 L. N. 333 ; Ontario Car Co. v. Que. Central Ry. Co., 
lo L. N. 12. 

(4) 33 LJ-. P.C. 170. 

(5) WasonMfg.Co.t/.Levis&KennebecRy.Co., 7Q.L.R.33O, S.C.R. 
1880 reversing. 



FINANCING OF RAILWAY COMPANIES. 103 

only be sold as a whole, (i) This decision would not apply 
in the case of the sale of a part of a railway under the Domin- 
ion Act, which distinctly contemplates the sale of any section of 
a railway. (2) 

26. Bonds issued under the present Railway Act are a first Lords, a first 

preferential claim and charge upon the company and its fran- charge on the 

, , , undertaking, 

chise, undertaking, tolls and income, rents and revenues, and real etc 

and personal property at any time acquired. (3) This secures 
everything to the mortgagees but the company's right to be a com- 
pany ; and upon non-fulfillment, by the company, of the terms 
of the deed, the mortgagees can come in under the deed of trust 
and, through the trustees appointed thereunder, take possession 
of and operate the road for their own benefit. (4) For the 
deeds of trust now in general vogue allow the trustees to 
take possession of the road, upon a certain default on the part 
of the company, and operate it, and after a further delay, if 
necessary, to acquire the absolute right to the railway. 

27. While the word " undertaking " used in the section taken The under- 
alone would not pri ma facie include the lands of the company, taking. 

it does not necessarily exclude them. (5) " The word is ambigu- 
ous, and may be construed as meaning the speculation generally, 
or possibly it maybe taken to include the land itself." (6) This 
point is further illustrated by the case of the New Brunswick 
and Canada Atlantic Ry . Cy. (7) By various acts of the 
Imperial and local governments, this company was entitled to 
grants of a large amount of land not connected with or neces- 
sary for the completion of the railway. 

This land the company had taken as a land company, with 
the object of making it a source of profit by sale and otherwise. 
It issued debentures, mortgaging to each holder the undertaking, 
and all monies to arise from the sale of lands and all future calls, 



(1) Stephen v. Banque d'Hochelaga, M. L. R., 2 Q. B. 491. (Q. B. 1886). 

(2) Sec. 278 ; provided it be sold as an integer. (Kedfield v. Corporation 
of Wickham, 33 L. J., P. C. 170). 

(3) Sec. 95. 

(4) Sec. 95, ss. 2. 

(5) Myatt v. St. Helen & R. G. Ry. Co., 2 Q. B. 364. 

(6) Coleridge, J., in same case at p. 374. 

(7) Wickham v. N.B. & C. A. Ry. Co., L. R., i P. C. 64. 



104 THE RAILWAY LAW OF CANADA. 

and all tolls, rolling stock, etc. ; provided, that nothing therein 
contained should be held to limit the power of sale or appro- 
priation by the company of any of its lands, nor constitute 
a charge upon them. Certain judgment creditors of the com- 
pany issued execution against the land of the company, where- 
upon the debenture holders, in order to protect the lands of the 
company and restrain a sale of the lands by the judgment cred- 
itors, instituted a suit in the Supreme Court of New Brunswick, 
and obtained an order appointing a receiver. 

A motion for an injunction having been refused by one of the 
judges, and, upon appeal, again refused by the Supreme Court 
of Judicature of the Province, an appeal was taken to the Privy 
Council, which affirmed the decree of the Provincial Court. 

Lord Chelmsford, delivering the judgment of their Lordships, 
said (i) that the proviso was not inconsistent with the sweeping 
and general terms of the debentures, but merely explanatory of 
them. " It seems clear to their Lordships that the lands not 
being in terms granted by the mortgage debentures, the proviso 
makes the intention of the parties perfectly clear, that no general 
expression used in the grant was intended to comprehend them, 
and therefore that the debenture holders are not entitled to in- 
terfere with the sale of the lands under the execution issued by 
the judgment creditors. But the debenture holders insist, that 
if they cannot stop the sale of the lands, they are entitled under 
the terms of the debentures to all the money arising from such a 
sale. It is quite clear, however, that the sales contemplated by 
the grant are those which are to be made by the company in the 
course of their regular operations. The judgment creditors take 
what belonged to the company, but do not take under them, and 
a sale by the sheriff under an execution i? a sale by law, and 
not by the company. 

' ; It is clear upon the whole case, that the lands of the company 
did not pass to the mortgagees under the debenture, nor are they 
entitled to the proceeds of the forced sales." (2) 

A mortgage of the undertaking and all the real and personal 
estate has been held in England to include all the personal estate 

(1) At p. 79. 

(2) At p. 80. 



FINANCING OF RAILWAY COMPANIES. 105 

then existing, but not personalty subsequently acquired, (i) 
But the Railway Act provides that the bonds, etc., are to be a 
charge upon all the real and personal property, at any time 
acquired. (2) 

28. The earnings of a railway, while it is allowed to remain Tolls and 
in the possession of the company, are not subject to the lien of income - 
the mortgage, although in terms the mortgage covers the tolls of 
the road, if at the same time the mortgage implies that the com- 
pany is to hold possession and receive the earnings of the road 
until the mortgagee takes possession. (3) Thus, where a railway 
company executed to trustees a mortgage of its road, property and 
franchises, "together with the tolls, rents and profits to be had, 
gained or levied therefrom " ; and the mortgage provided that 
after default continued for a certain period, the trustees might 
enter and take possession ; but that until such time the company 
should have the sole right of possession, use and management 
of the mortgaged premises ; the mortgagees subsequently com- 
menced a suit to foreclose the mortgage, but did not take pos- 
session of the property or ask for the appointment of a receiver in 
the suit. Pending the suit, a creditor of the company obtained 
judgment against it, and attached in the hands of an agent of the 
company monies belonging to it received from the sale of 
passenger tickets and for freight charges. A receiver was 
subsequently appointed on behalf of the mortgagees, who also 
claimed the funds attached in the hands of the agent and received 
.by him before the appointment of the receiver. The Supreme 
Court of the United States adjudged that the mortgagees had no 
right to the earnings of the road until they took possession 
through the receiver. (4) 

This point was referred to by Strong, J., in Wallbridge v. 
Far-well. (5) The learned Judge said : " In assenting to the 
judgment of the court dismissing these appeals, I do not by any 
means intend to preclude myself in future, should the question 
be raised in proper form and in an appropriate case from consid- 

(1) New Clydock Sheet & Bar Iron Co. in re, L. R., 6 Eq. 514. 

(2) Sec. 95. (3) Jones, R. R. Securities, 114. 

(4) Oilman v. Ills. & Miss Telegraph Co., 91 U. S. 603 ; see also 
American Badge Co. v. Heidelbach, 94 U. S. 798; Galveston R. R. Co. t>. 

Cowdrey, II Wall. 459. 

(5) 18 S. C. R. I. 



io6 THE RAILWAY LAW OF CANADA. 

ering whether the principle, which is now universally recognized 
in the United States as to the applicability of current earnings to 
current expenses, incurred either whilst or before railway property 
comes under the control of the court, by being placed, at the 
instance of mortgagees, in the hands of a receiver, in preference 
to mortgage creditors whose security has priority of date over the 
obligation thus incurred for working expenses, should be adopted 
by our courts. This doctrine is now finally settled in the 
United States, where railway mortgages exactly resemble those in 
use with us, and which do not at all resemble the securities of 
debenture holders tinder the English system of securities for 
borrowed capital ; and the practice referred to is so pregnant with 
justice, good faith and equity that there may be found strong 
reasons for applying it here when the question arises." (i) 

While the company remains in possession of the road, the right 
to apply enough of the income to operate the road cannot be 
questioned. The amount to be so applied is within the discretion 
of the company. The same discretion extends to the surplus. 
It is for the company to decide what shall be done with it. (2) 

After acquired 29. Section 95 of the Act includes, as subject to the pre- 
ferential claim of the bondholders, property at any time 
acquired, which of course implies that property acquired by the 
railway after the issue of bonds is subject thereto. Generally, 
such mortgage can only attach to such property in the condition 
in which it comes into the mortgagor's hands. 

Thus it has been held that a mechanic's lien for work done 
and materials furnished in building for a railroad company 
docks, wharves and piers, upon a branch road acquired after the 
making of the mortgage, takes precedence of the mortgage. (3) 

Vendor^ lien. 3O. But this rule does not apply to an unpaid vendor's lien 
where the material supplied by the vendor becomes amalga- 
mated with and a part of the whole railway, as in the case of 
rails, and therefore subject to the mortgage. And this is the 
rule both under the Quebec law and the English law. (4) 

(1) At p. 4. 

(2) Oilman . Ills. & Miss. Telegraph Co., 91 U. S. 603. 

(3) Williamson r. N. J. Southern Ry. Co,, 28 N. J. Eq. 277-298, 29 
lb. 311 ; U. S. v. New Orleans R.R. Co., 12 Wall. 362-364. 

(4)Wallbridge v. Farwell, 18 S. C. R. 7; and see Galveston R.R. Co. 
V. Cowdrey, II Wall. 459. 



FINANCING OF RAILWAY COMPANIES. 107 

31. But in the case of rolling stock it becomes a question Rolling stock 

whether such stock forms a part of the realty or not. Under P art f 

realty ? 
the law of Quebec it does, becoming irnmoveable by destination. 

(i) And it has been held by the Supreme Court that the unpaid 
vendor of cars supplied and delivered to the company loses 
his privilege for their price, because they had become immoveable 
by destination, and the railway to which they were attached was 
mortgaged and had passed into the hands of third parties ; and 
that even considered as moveables the rolling stock became 
affected and charged by virtue of the Statute and the mortgage, 
as security to the bondholders with right of priority over all 
other creditors, including the unpaid vendors. (2) 

The Supreme Court of the United States, however, has decided 
that such cars, etc., are loose property, susceptible of separate 
ownership and separate liens; and that such liens, if binding on 
the railway company itself, are unaffected by a prior general 
mortgage given by the company, and paramount thereto. (3) 

But in this country the decision of our Supreme Court would 
seem to have decided the question under our statutory law, at 
least in the Province of Quebec. The bonds in that case were 
issued, and the bondholders' rights declared, under a special 
Act of Parliament, which declared such bonds to be a first lien, 
privilege and mortgage upon the railway, its franchises and all 
its property, tolls and income, profits and improvements and 
renewals thereof. This statute was regarded by Mr. Justice 
Taschereau, who rendered the principal judgment, as setting 
at rest all possible controversy as to the relative rank of the 
unpaid vendor's claim and that of the trustees by enacting that 
the trustees should be first, (4) It was argued for appellant 
that the Statute merely says that the conveyance shall be " a 
first charge," and that this does not mean the first charge. But 
the learned judge thought there was no ground whatever for 
that distinction. The decision would a fortiori apply to any 
railway under the present Act where the language used is 
that " the bonds, etc., shall be taken and considered to be the 



(1) C.C. 379. 

(2) Ontario Car Co. r. Farwell, 18 S. C. R. I. 

(3) U. S. v. New Orleans R.R. Co., 12 Wall. 362. 

(4) 18 S. C. R. at p. 15. 



io8 THE RAILWAY LAW OF CANADA. 

first preferential claim and charge upon the company and the 
franchise, etc., and real and personal property thereof at any 
time acquired." In the Farwell case, however, the trust inden- 
ture authorized the payment by the trustees " of all legal claims 
arising from the operation of the railway, including damages 
caused by accidents and all other charges ; " and it was the 
opinion of Mr. Justice Gwynne that the appellants might be 
entitled to an equitable decree, framed with due regard to the 
other necessary appropriations of the income in accordance with 
the provision of such trust indenture, (i) 

The most intelligent view would seem to regard rolling stock 
as being of the nature of immoveables. 

Jn the Province of Quebec the question is free from doubt, 
rolling stock there being held to be immoveable by destination. 

(2) 

In the United States the question is much debated. But in 
favor of the above contention it may be argued that the right to 
buy and own rolling stock is a franchise, and can only be exer- 
cised as an accessory to the operation of the railway. Any 
buying or selling of cars, engines, and the like, by the company, 
for the mere purpose of speculation, would be unauthorized and 
illegal. Hence the intention of the company to place them 
upon the railway for a permanency, the use to which they are 
destined, the connection between the railway and the cars, and 
the essential relation between them for the purposes of the 
undertaking, all combine to point out the true position of roll- 
ing stock as part of the realty. (3) 

Mr. Jones, in his work on railway securities, says that while 
there are many and strong arguments for holding that rolling 
stock is part of the realty and this view seems to have the sup- 
port of the United States courts the weight of authority in the 
State courts seems to be against that position. He, however, 
favors the view that rolling stock is part of the realty. (4) 

(1) 18 S. C- R. at p. 34. 

(2) C. C. 379. Grand Trunk Railway v. Eastern Townships Bank, 10 
L. C. J. n ; Wallbridge v. Farwell, 18 S. C. R. I. 

(3) And see Minnesota Co. v. St. Paul Co., 2 Wall. 609, note p. 648, 
on rolling stock as a fixture, being an extract from brief of Mr. Carpenter. 

(4) Jones, Railway Securities, 154. 



FINANCING OF RAILWAY COMPANIES. 109 

On the other hand, Mr. Ewell, in his work on fixtures, takes the 
opposite view, (i) 

Many authorities, without holding that engines and cars are 
fixtures, regard them as so indispensable to the operation of a 
railway, that they make a distinction between the rolling stock 
and the other kinds of personal property, in respect to the rule 
that property not in esse cannot be conveyed. The rolling stock 
of a railroad is regarded as so appurtenant to the road, that when 
the company makes a mortgage of its road and franchise, it has 
a present existing interest in the rolling stock to be acquired for 
its use sufficient to uphold a grant of it as incident to the road. 

(') 

The question might be considered from another point of view, 
viz., not as to whether rolling stock is theoretically part of the 
realty, but whether, for the purposes of the particular transaction, 
it should be so regarded or not. Thus, while it might be consi- 
dered to be a part of the realty, as between the mortgagees and 
creditors claiming liens upon it as personal property, it is not 
necessary that it should be considered realty for the purpose of 
taxation, or that it should be considered realty in any other re- 
lation than that existing between the railway company and those 
claiming under it on the one hand, and the mortgagees on the 
other. 

3. A railway company, in order to secure a loan, mortgaged Rails and 
to a municipal corporation their lands, roads, depots, wharves, Olhersupp * 
stations, tolls, revenues and all other property " now or during 
the existence of the said mortgage to be acquired." A quantity 
of iron rails was purchased for the railway, the vendors stipu- 
lating at the time of the sale that the rails should be laid down 
on that particular road. 

The iron was shipped by the vendees, who endorsed the bills of 
lading, to the municipality, who paid the shipping charges, insur- 
ance, and freight duties, etc., out of monies which formed part 
of the advances secured by the mortgage. The iron was seized, 

(1) Ewell, Fixtures, p. 39. 

(2) Jones, 150. 

Under the Code Napoleon, all objects placed by a proprietor on his pro- 
perty for the service and working of the property are immoveable by destina- 
tion. C. N. 524, cp. C. C. 379. 



no THE RAILWAY LAW OP CANADA. 

under an execution against the railway, while in possession of 
the municipality, it being ready to be placed on the road. It 
was held that as the mortgage covered personal as well as real 
property, the words " other property " were not restrained to 
real property, and that under the endorsement of the bill of 
lading to the municipality, who obtained possession of the iron 
by such endorsement, together with the stipulation of the ven- 
dors and the assent thereto of the vendees, the municipality 
acquired the possession and the property in the iron, and it 
became a part of the property mortgaged, (i) 

On the other hand, supplies intended for the maintenance 
and operation of the railway, but not incorporated with it, such 
as sleepers or ties, fastenings, fuel, etc., have been held in the 
Province of Quebec not to be immoveable by destination. (2) 

Formalities m 33 Whatever may be the irregularities in the issue of bonds, 

making and ... , - 

issuing bonds elc -> tne corporation and its members are estopped from pleading 

waiver. the want of any formality prescribed by the Act by previous 
waiver of such formality. (3) 

Thus where bonds issued in disregard of a prescribed 
formality were treated by the company as good, a stockholder 
who had attended n c ings where the bonds were treated as good, 
upon subsequently filing a bil 1 to restrain the company from re- 
deeming the bonds, was held to be estopped from contesting 
their legality, (4) 

L-irectory re- 34. The general rule, that when statutory requirements are 
quirements as IT j ^i 1-1 

to formalities ere?y directory and not imperative, the omission to comply with 

them would not render void the particular acl done under the 
authority of the Statute, would apply to any merely directory 
formalities required by the Act. So it would seem that where 
a Statute required all evidences of de bt issued by a company to 
be signed by the president and treasurer, this would be looked 
upon as directory merely, and the signature of the secretary 
instead of the treasurer would be sufficient. (5) 

(1) Corp. of Lanark & Renfrew c. Cameron, 9 U. C. C. P. 109. 

(2) \Vyatt v Levis & Kennebec K'y. Co., 6 Q. L. R. 213 (S. C. R. 1880). 

(3) See Jones v. Municipality of the County of Albert, 20 N. B. 78 ; 21 
N. B. 200. 

(4) Zabriskee . Cleveland, Columbus & Ohio Ry., 23 How. 381-398. 

(5) City Bank v. Cheney, 15 U. C. Q. B. 400; and see In re Farlinger & 
the Village of Morrisburg, 16 O. R. 722 ; Lewis v. Brady, 17 O. R. 377; 
-Grand Trunk Ry. Co. v. Corporation of Levis, 10 R. L. 612 (Q.B. Que. 1879). 



FINANCING OF RAILWAY COMPANIES. in 

Where a mining company Was empowered to borrow money 
And mortgage its property upon a vote of the stockholders and 
directors, it was held that the company was liable upon a loan 
obtained by the directors without such vote, for the lender was 
justified in assuming that there had been a meeting and vote of 
the shareholders in the manner directed; (i) and likewise with 
the omissions of the preliminaries of corporate meetings, such as 
the publication of notices, or with regulations as to the manner 
of conducting such meetings, or the appointment and election 
of directors. (2) But this is not the case where the irregularity 
is one which appears on the face of the instrument itself ; the 
purchaser is bound to take notice of it. (3) 

A distinction is also to be observed between transactions 
which are within the general scope of a corporation's powers 
without the aid of statutory authority, and those which depend 
altogether upon such authority for their validity. Requirements 
in the case of the former might be regarded as directory merely, 
which in the case of the latter might be regarded as conditions 
precedent to the exercise of the authority, or imperative require- 
ments. 

A defect in the mortgage does not invalidate the mortgage 
debt, but only the security for it ; and a want of power to make 
the mortgage does not affect the obligations of the bonds secured. 
(4) 

35. The fact that a certain municipal debenture had been stolen bonds, 
stolen previously to its being issued has been held to be no bar to 
the claim of a bona fide holder for valuable consideration with- 
out notice. (5) 



(1) Tyson's Reef Co. in re, 3 W. W. & A. B. Cases at law 162 ; Brit. 
Bank v/Turquand, 6 FA. & Bl. 327. 

(2) Township of Brock v. Toronto & Nipissing Ry., 17 Grant Chy. 425; 
Fountaine v- Carmarthen Ry. Co., L. R., 5 Eq. 316; Worcester Corn Ex- 
change in re, 3 D. G.M.&G. 180; Anderson v. Duke, etc., Gold Mine 
Co., I Australian Jurist 161. 

(3) Athenaeum Life Assur. Soc. in re, 4 K. &J. 549; Geddes v. The 
Toronto Street Ry. Co., 14 U. C. C. P. 513; The Commercial Bank of 
Canada v. The Great North Western Ry. Co., 3 Moore P. C. N. S. 313-314. 

(4) Phildelphia & Sunbury R. R. Co. v. Lewis, 33 Pa. St. 33. 

(5) The Trust & Loan Co. of Upper Canada v. The City of Hamilton, 
7 TJ. C. C. P. 98; and see Jones v- Municipality of Albert, 21 N. B. 200. 



112 



THE RAILWAY LAW OF CANADA. 



Pleading 
want of 
formality. 



Payee not 
mentioned. 



Debentures 

negotiable 

instruments. 



36. A plea that such debenture was not issued " under the 
formalities required by law," because the by-law under which 
it was issued did not settle a special rate, and was therefore 
void, was held bad, for not averring distinctly that such deben- 
ture was issued in pursuance of a by-law, and for not pointing 
out wherein it was defective, (i) 

37. Debentures are not void because they are not made payable 
to any particular named individual or company ; as the legal effect 
of such an instrument must be construed to be an undertaking 
to pay the monies therein mentioned to the person to whom it 
was delivered, and who, by the effect of such delivery, became 
the payee in fact. (2) 

38. A debenture as commonly understood, and according to 
the general usage of this country, is a negotiable instrument in 
the nature of a promissory note transferable by endorsement or 
by mere delivery, (3) and therefore cannot bear a condition on 
the face of it, making its validity depend upon obligations to be 
performed in the future, and the party having a right to the deli- 
very of debentures to him is entitled to have them free from such 
conditions. (4) The fact that debentures are under seal does 
not detract from their negotiable character ; and though a statute 
makes them a charge on all the property of the company, with 
aright of foreclosure and sale, this is something superinduced 
upon the security by virtue of the statute. (5) 

The issuing of debentures in blank to be subsequently filled 
in upon delivery by the managing director, who is also secre- 
tary and treasurer, does not invalidate the debentures. The 
strict rules of the common law relating to deeds are not applica- 
ble to such debentures, but rather the rules of the law merchant 
relating to negotiable securities. (6) But even if this were not 
so, the fact that the name of the payee is not filled in until deli- 



(1) The Trust & Loan Co. of Upper Canada v. The City of Hamilton, 
7 U. C. C. P. 98. 

(2) Gecldes v- The Toronto Street Ry. Co., 14 U. C. C. P. 513. 

(3) Eastern Townships Bank v. Municipality of Compton, yR. L. 446. 

(4) MacFarlane v. Corp. St. Cesaire, M. L. R., 2 Q. B. 160, confirmed in 
Supreme Court, 14 S. C. R. 738. 

(5) Bank ol Toronto v. Coburg, etc., Ry. Co., 7 O. R. i . 

(6) Ibid. 



FINANCING OF RAILWAY COMPANIES. 113 

very does not make the debentures void. It would come within 
that class of cases where deeds have been held good, notwith- 
standing an alteration or subsequent addition, because, at the 
time of execution, there was something which could not be as- 
certained, and was therefore to be filled in afterwards. In this 
case, however, there was no execution, which imports delivery 
prior to the time when the name was filled in. (i) 

39. Coupons are simply in effect promissory notes payable Coupons and 

on the very day of their maturity without grace. (2) However i " terest 
. . . . thereon, 

their foims may vary, the interest and legal effect are the same. 

(3) Interest runs on them from the dates on which they re- 
spectively fall due, without the necessity of putting the debtor in 
default j (4) and this is the law in Quebec. (5) 

4:0. It is not necessary that the coupons should be presented plac e of pre- 
for payment at the place named, in order to establish a default 
on the part of the company, if it can be shown that the company 
was never ready to pay them, there or elsewhere. (6) 

As soon as the day on which a coupon becomes due passes 
without payment, it is regarded as dishonored like other com- 
mercial paper remaining unpaid at maturity ; and if thereafter 
transferred, the transferee takes it subject to all equities with 
which it was affected in the hands of the transferor. (7) The 
simple fact that an instalment of interest is overdue and unpaid 
is not sufficient to affect the position of one taking the bonds and 
subsequent coupons, before their maturity for value, as a bona 
fide purchaser. (8) But the presence of overdue and unpaid 
coupons on bonds may be a circumstance which, when coupled 
with other significant indications of invalidity, will prove suffi- 
cient to put a purchaser on inquiry. (9) 



(1) Bank of Toronto v. Coburg, etc., Ry. Co., 7 O. R. I . 

(2) Daniel, Negot. Inst. 1490. 

(3) Ibid , 1493. 

(4) Daniels h:egot. Inst., 1505. 

(5) Desrosiers v. Montreal, Portland & Boston Ry. Co., 28 L. C. J. I. 

(6) Re Thompson and the Victoria Ry. Co., 9 P. R. (Ont.) 119. 

(7) Daniels, 1505. 

(8) Ry. Co. v. Sprague, 103 U. S. 762. 

(9) Parsons v. Jackson, 99 U. S. 434. Explained in Ry. Co. v. Sprague, 
103 U. S. 762. 

8 



ii4 1 HE RAILWAY LAW OF CANADA. 

Suit upon 41. On motion of the owner of bonds with coupons attached, 

the Court will order such of the coupons as are not in litigation 
to be detached by the clerk of the Court and delivered over to 
the party moving, (i) 

Transfer and 4.3. A trustee held certain debentures of a railway company, 
on trust > to secure certain creditors of the company for advances 
made by them, which debentures were to bs handed over to the 
creditors for sale, upon default in payment of the advances. 
The company made default, and the debentures were delivered 
over to the creditors. Held, that the creditors were entitled un- 
der a statute, (2) the relevant section of which was substantially 
the same as sec. 96 of The Railway Act, to be registered as hold- 
ers of the debentures, to enable them to qualify and vote for 
directors. (3) 

Where an Act provided that the secretary should register the 
bonds, it was held that a demand upon the assistant secretary 
was sufficient, where it could be shown that he performed all the 
duties of the secretary's office. (4) 

Under the provisions of sections 96 and 97 requiring registra- 
tion of bonds as a condition precedent to the holder's right to 
vote thereon, questions may arise as to what title should suffice 
to entitle the holder of such bonds to registration. Thus, in one 
case, under a similar act, the secretary refused to register unless 
the intermediate transfers were produced and registered at the 
same time. But it was held that he was bound to do so with- 
out the production or registration of the previous transfers. (5) 
In another case a bank in Ontario received from bankers in 
London a number of bonds, represented by the London bankers 
as belonging to different persons named, and tendered them for 
registration at the railway office, in order that these persons 
might vote thereon. The secretary of the railway company re- 
gistered such of the bonds as stood in the names of the original 
holders, but refused to register the others unless written transfers 



(1) Montreal, Portland & Boston Ry. Co. v. La Banque d'Hochela^a, 
27 L. C. J. 164 (Q. B. Que., 1883). 

(2) 34 Vic., cap. 43 (Ont.), sec. 33. 

(3) Jn re Thompson & the Victoria Ry. Co , 8 Ont. Pract. 423. 

(4) In re Thompson & the Victoria Ry. Co., 9 Ont. Pract. 119. 

(5) In re Osier v. The Toronto, Grey & Bruce Ry. Co., 8 Ont. Pract. 506. 



FINANCING OF RAILWAY COMPANIES. 115 

from the original holders were produced. It was held: that the 
company should register the bonds without such transfers; the 
proof of title in the alleged owners was sufficient ; the issue of 
scrip in London as representing the bonds formed no objec- 
tion, (i) 

These cases arose under a statute which provided that the 
bonds " and any transfers thereof" should be registered before 
voting. These words are not in the present Act, under which the 
company are bound, on demand, to register such bonds, etc., and 
thereafter any transfers thereof. (2) 

If the transferees desire to acquire the right of voting on the 
bonds, all the transfers should be evidenced in such a way as to 
enable the company to register them in the same way as trans- 
fers of shares. (3) The rights of the holder are always subject to 
the provisions of the mortgage deed, (4) one of the most usual 
being that no transfer, except upon the transfer book, shall be 
valid unless the last preceding shall have been to bearer, which 
shall restore transferability to the bond by delivery, but every 
such bond shall continue subject to successive registrations and 
transfers to bearer at the option of each holder. 

4:3. In the case of an application for a mandamus , to compel Default. 
a railway company to register bonds, it was objected that it did 
not appear the company had made default in payment of the in- 
terest, the coupons not being shown to have been presented at 
the place named for payment ; but it was held that the fact of 
the company never having been ready to pay them, there or else- 
where, was a sufficient answer to this objection. (5) 

It is therefore not necessary as a condition precedent to 
recovery, to aver and prove presentment at a particular place, 
and a tender of the surrender of the bonds or a readiness to 
surrender them. (6) 



(1) In re Johnson & The Toronto, Grey & Bruce Ry. Co., 8 Ont. Pract. 
.535- 

(2) Sec. 96, and sup) a p. 42 et seq. 

(3) In re Thompson & the Victoria Ry. Co., 9 P. R. (Ont.) 119. 

(4) Sec. 96, ss. 3. 

(5) Re Thompson & the Victoria Ry. Co., 9 P. R. (Ont.) 119. 
<6) Fellowes v. Ottawa Gas Co., 19 C. P. 174. 



n6 THE RAILWAY LAW OF CANADA. 

" At the next 44. The words " at the next general meeting " used in a statute 

Ing 1 "* " mere 'y indicate the earliest period at which the bondholders may 

vote, and the statute does not require a new registration, in order 

to entitle the bondholder to vote at any subsequent meeting so 

long as the interest remains unpaid, (i) 

Where the exercise of any power given under the general or 
special Act requires the assent thereto of a certain majority of 
the shareholders, present at a meeting specially called for that 
purpose, the word " shareholders " must be interpreted to include 
all who are entitled to vote as shareholders, which includes bond- 
holders. (2) 

" Raising 45. The expression " raising money "used in section 93 sub- 

sec. 2 must be given a liberal construction, so the pledging of 
bonds with a contractor, as security for the price of the construc- 
tion of the railroad, and in default of payment by the company, 
the contractor to take the bonds in payment at so much on the 
dollar, is to be construed as "raising money for the prosecution 
of the undertaking." (3) 

" Best terms 46. And the alternative given to the contractor of taking the 

and condi- bonds in default of payment of the contract at fifty cents in the 
tions. * J 

dollar was considered, in the absence of evidence that more 

favorable terms could have been made, as being a pledging and 
allotting of the bonds upon the best terms and conditions obtain- 
able within the meaning of the section. (4) 

Distinction 47. A distinction has been drawn in a Manitoba case between 
a Paging f bonds and a mere deposit of them as collateral 



Led d 

deposit as security. Defendants purchased certain rails from the plaintiffs, 

collateral giving in payment certain acceptances. It was agreed that " as 
secunty. . 

collateral security for the payment of said acceptances at matur- 

ity, the defendants shall issue, and on production of the respective 
bills of lading shall deposit with the plaintiffs or their bankers 



(1) Hendrie v. Grand Trunk Ry., 2 O. R. 441. (Section 96 provides 
for voting at all subsequent meetings.) 

(2) Hendrie v. Grand Trunk Ry., 2 O. R. 441. 

(3 Winnipeg & Hudson Bay Ry. Co. v. Mann, 7 Man. 81. 
(4) Winnipeg & Hudson Bay Ry. Co. v. Mann, 7 Man. 81 ; and see 
Regent's Canal Iron Works Co., L. R., 3 Ch. D. 43. 



FINANCING OF RAILWAY COMPANIES. 117 

bonds of the defendants to an amount double that of the said 
acceptances." Power of sale in case of default was given. 
After default and recovery of judgment upon the acceptances, 
plaintiffs filed their bill on behalf of all holders of similar bonds 
for a receiver and for sale of the railway. It was held : that 
having regard to the surrounding circumstances, the plaintiffs 
were not pledgees ; and that no obligation arose upon the bonds 
until after their sale by the plaintiffs under their power, (i) 
It may be well to quote the language used by the Court in de- 
livering judgment : " It is not a question of the property in the 
pieces of paper on which the instruments are written, which would 
be originally in the railway company, and of which it might make 
a legal pledge. In the hands of the railway company there was 
no other property in respect of them. It could only be when 
issued to another party, as obligor or promisor in respect thereof, 
that the instruments could take effect as the obligations of the 
railway company, or that there could be said to be any property 
in the obligations to be pledged by a pledge of the papers con- 
taining them." 

" There is then no possibility of treating the transaction as one 
of pledge of the obligations, for, unless the plaintiff company 
became the obligees or promisees so as to possess the legal title to 
the choses in action which the instrument purported to represent, 
there was no obligation or choses in action to be pledged. 

" It is quite competent, however, for the railway company, by 
its officers, to sign and seal such instruments, and deposit them as 
security with a party making advances to it, upon the terms that 
such party should not be holder of them, that they should create 
no obligation to him, but that his only right should be to sell them, 
as the railway company might, and repay himself from the pro- 
ceeds ; he making them, thus, the obligations of the company to 
the purchasers." 

" This, it appears to me, was the very transaction to which the 
parties sought to bind themselves by the agreement set out in the 
bill." 

" At first sight the word ' issue ' seems to imply the complete 
execution and delivery of the instruments to the plaintiff com- 



(i) West Cumberland Iron Co. v. Winnipeg & H. B. Ry. Co., 6 Man. 388. 



n8 



THE RAILWAY LAW OF CANADA. 



Extent of 
borrowing 
power con- 
dition prece- 
dent. 



pany, so as to make them the holders of the obligations thereby 
represented ; but I think that the word may be considered to be 
used in a somewhat less proper sense to signify the preparation, 
signing and sealing of the documents, and the placing of them 
absolutely out of the possession and control of the railway 
company. The word is similarly use 1 by Britt, C. J., in Baven- 
dalev. Bennet (i) in speaking of a blank acceptance handed 
to a party to be filled up and negotiated. In fact, the ' issue ' 
there was less complete as it was without consideration, and 
could be recalled at any time before use of the bill." 

" The word used in the agreement to specify the transmission 
to the plaintiff company is 'deposit.' The instruments were to 
be ' deposited' with that company or its bankers. This is not 
an apt word to denote a completion of the execution by delivery. 
It appears rather to indicate the physical transfer of the pieces of 
paper unaccompanied by the mental intention involved in the 
word ' delivery ' when technically used. I agree with the view of 
my brother Bain, that the word would be properly applied to a 
transaction of pledge, rather than to one of mortgage, which is 
what the plaintiff's bill really assumes this to have been. In 
fact, it represents a bailment rather than a transfer of property or 
creation of an obligation, though often of another kind than the 
naked bailment known as depositum." (2) 

48. A very important point as to the extent of a company's 
borrowing power, and the effect to be given to statutory condi- 
tions limiting such power, arose in the case of the Corporation 
of Quebec v. Quebec Central Railway Co. (3) A railway com- 
pany was authorized by a special Act to issue bonds or deben- 
tures to the extent of ^,"300,000, in three successive issue , each 
of the second and third issues to depend upon the performance 
by the company of certain conditions precedent. The first 
^100,000 were issued at once as authorized. 

The second ^100.000 weie issued when only 43^ miles of 
the railway had been completed, it being one of the conditions 
precedent that 45 miles should be completed and in running order, 
as certified by the Government inspecting engineer. 

(1) L.R., 3 Q B. D. 525- 

(2) I i VVtst Cumberland z>. Winnipeg & II. B. R. K. Co., 6 Man. 394, 
per Killaro J. 

(3) 10 S. C. K. 5*13. 



FINANCING OF RAILWAY COMPANIES. 119 

Before the issue of the third ^"100,000, an Act was passed 
modifying the previous conditions as to that issue, and the pre- 
amble declared that a total length of 45 miles had been com- 
pleted, and a first and second issue each of ^100,000 of the com- 
pany's debentures made. 

This recital was erroneous. The question that arose was 
whether the recital in the preamble of the last act rendered the 
second issue of bonds mentioned therein good and valid and 
binding on the company, although the conditions precedent re- 
quired by the first Act had not been fulfilled. The majority of 
the Court held that it did, Ritchie, C, J., and Strong, J., dissent- 
ing- (0 

49. Where a company had exceeded the borrowing powers Excessive 
given by their original Act of incorporation, yet sufficient bor- borrowin g 
rowing powers had been given by subsequent Acts, and their by subsequent 
exercise sanctioned by the shareholders, the borrowing was not Act - 
ultra vires the authority of the managers and directors. (2) 

5O- Where power is given to a company by its special Act Company not 
to borrow money, and to issue bonds or debentures for neces- restricted to 
sary repayment of any sums so borrowed on certain terms, the as security for 

securities upon which the company has power to borrow are not mome , s bor " 

rowed, 
restricted to bonds or debentures only. Borrowing money by 

advances from a bank, which advances were to be covered by 
monthly bills on the company borrowing, and their available 
traffic receipts would be within such a provision. (3) 

Where an Act makes it lawful to promote the traffic of other 
railways, the company can apply funds borrowed under their 
powers for the maintaining of such railways. (4) 

Trustees. 

51. Notwithstanding the provision of sub. sec. 2 of section 95, failure to act. 
that no action shall be taken to enforce pa} ment of the bonds, 



(1) It should be noted that Fournier and Henry, J. J., held in this case 
that the illegality of the second issue had not been legally proved, as the cer- 
tificate of the engineer that only 43^ miles had been completed was not 
produced. 

(2) The Commercial Bank of Canada v. The Great Western Ry, Co., 3 
Moore N- S. 291;. 

(3) IbH. (4) Ibid. 



THE RAILWAY LAW OF CANADA. 



debentures, etc., or of the interest thereon, except through the 
trustee or trustees appointed under the mortgage deed, it would 
seem that if the trustees should fail or refuse to act, any of the 
bondholders, for themselves and in behalf of the rest, might step 
forward and put in motion the machinery of the law, making 
the trustees parties defendant, (i) otherwise the bondholders 
would be without remedy, except perhaps by mandamus to 
compel the trustees to act. However, this right is generally given 
by the deed, and if so could be validly exercised under section 
96 (53.3). 

Rights of 53. The trustees, acting for the bondholders, have sufficient 

W protect 6 ' authority and interest to enable them to maintain a bill in equity 
their interests, to enjoin an alleged illegal proceeding which will seriously depre- 
ciate the value of the bonds secured. (2) In Quebec it has been 
held that the holder of railway bonds, constituting a privileged 
claim on the moveable property of the Company, may, for the 
protection of his rights, proceed against such property by an 
attachment in revendication in the nature of a saisie cons rva- 
toire. (3) And the bondholders themselves can maintain an 
action to restrain a fraudulent diversion of a portion of property 
mortgaged for their security, when one of the trustees is in col- 
lusion with the company- (4) 



Notice. 



Trustees as 

common 

carriers. 



53. Notice to trustees under an ordinary mortgage deed is 
notice to the holders of the bonds secured by the mortgage. 
Therefore, actual notice to the trustees of a prior equitable mort- 
gage is notice of it to the bondholders, who therefore take their 
bonds subject to the legal consequences of the incumbrance. (5) 
And the fact that the bonds are treated as negotiable, and pass 
from hand to hand like bank bills, does not affect the question 
of the agency of the trustees in reference to the security pro- 
vided by the mortgage. (6) 

51. Trustees in possession of the railway under the provi- 



(1) Jones R. K. Securities, 362. 

(2) Murdock p. Woodson, 2 Dill. 188. 

(3) Wyatt v. Senecal, 4 Q- L. R. 76. 

(4) Weetjen v. St. Paul & Pacific R. R. Co., 4 Hun. 529. 

(5) Miller v. Rutland & Washington R. R. Co., 36 Vt. 452. 

(6) Per Barrett, J., in same case, p. 484. 



FINANCING OF RAILWAY COMPANIES. 121 

sions of the deed have been held liable as common carriers to the 
same extent that the corporation would be liable, (i) 

55. A party having agreed to advance money to a railway Who are 
company for the completion of its road, an agreement was exe- trustees - 
cuted, by which, after a recital that he so agreed, and that a bank 
had undertaken to discount his notes endorsed by the firm of 
which he was a member to procure the money to be advanced, the 
railway company appointed said bank its attorney irrevocable 
(in case the company should fail to pay the advances as agreed) 
to receive the bonds of the company (on which the lender held 
security) from a trust company with which they were deposited, 
and sell them to the best advantage, applying the proceeds as set 
out in the agreement. 

The railway company having failed to repay, as agreed, to 
the party making the loan, the bank obtained the bonds from the 
trust company, and threatened to sell the same. 

The company by its manager wrote to the lender's firm a 
letter, requesting that the sale be not carried out, but that the bank 
should substitute them as the attorneys irrevocable of the com- 
pany for such sale, promising that if that were done, the firm 
should have the sole and absolute right to sell the bonds, the 
proceeds to be applied in a specified manner. The firm agreed 
to this, and extended the time for payment of their claim, and 
made further advances ; and, as authorized by the last mentioned 
.agreement, they re-hypothecated the bonds to the bank on cer- 
tain terms. The company having again made default, the bank 
gave notice that the bonds would be sold. 

In an action by the railway company to restrain such sale, it 
was held that the bank and the firm were respectively first and 
second encumbrancers of the bonds, being to all intents and 
purposes mortgagees, and not trustees, of the company in respect 
thereof, and that there was no rule of equity forbidding the bank 
to sell or the firm to purchase under that sale. (2) 

It was further held that if the firm should purchase at such sale, 
they would become absolute holders of the bonds, which would 



(1) Daniels v. Hart, 118 Mass. 543. 

(2) Nova Scotia Central Ry. Co. r. Halifax Banking Co-, 21 S. C. R. 537. 



122 THE RAILWAY LAW OF CANADA. 

not be liable to be redeemed by the company, (i) It was not 
decided in this case what would be the effect of a trust deed by 
which the railway was vested in trustees for the secuiity of bond- 
holders. But according to the authority of Wallbridge v. Far- 
well^ (2) this fact would make no difference in the rights of the 
parties. When followed by possession in the terms of the trust 
deed the property in the railway vests in the trustees, and the 
interest of the railway company is reduced to a bare right of 
redemption. (3) 

Distinction 56. It may not be out of place at this point to set forth the 
a'Tand" 10 distinguishing features of mortgage under the civil and common 
hypothec law systems. 

under the ^he hypothec of the civil law had its origin in Greece, from 

civil and com- J r * 

monlaw. whence it was adopted by the Romans. It consisted in an 

agreement whereby the debtor pledged his property without 
abandoning the possession, on the condition, however, that in 
case the debt was not paid at maturity he should lose his title 
to the property. (4) 

Under the Quebec civil code (5) hypothec is a real right 
upon immoveables made liable for the fulfillment of an obliga- 
tion, in virtue of which the creditor may cause them to be sold 
in the hands of whomsoever they may be, and have a preference 
upon the proceeds of the sale in order of date as fixed by that 
Code. (6) 

The use in that Province of trust deeds in the English form, 
and the recital in special Acts of the phraseology of the English 
law, has given rise to anomalies such as adjudicated upon in the 
cnse of Wallbridge v. Farwell, (7) 

In that case the statute authorized the conveyance of the 
road to trustees for the purpose of the trust. The deed of 
trust used the word " sold." The judge of the Superior Court 
construed these terms as constituting a pledge of the railway 



(1) Nova Scotia Central Ry. Co. v. Halifax Banking Co., 21 S- C. R- 537. 

(2) 18 S. C. R. 12, Taschereau, J. 

(3) Redfield v. Corpn. Wickham, 13 App. Cas. 473. 

(4) Troplong, Hypotheque, vol. I, No. 7. 

(5) C. C. 2016, and see arts 2040-44. 

(6) 2009, 2047, 2130 C. C. 

(7) IS S. C. R. I. 



FINANCING OK RAILWAY COMPANIES. 123 

to the trustees with this modification, that the trustees could 
permit the company to work the property so long as the 
interest on the bonds was paid. Counsel for the appellant 
before the Supreme Court argued that there was either a pledge, 
or an actual and complete sale of the railway. But Taschereau, 
J., who rendered the principal judgment of the Supreme Court, 
could not see in the deed a contract of pledge. Possession by 
the pledgee is such an essential feature of that contract (i) that 
there could not, in his opinion, exist any such thing as a contract 
of pledge: (2) " It seems tome impossible to see in that deed, 
as interpreted in the light of the Statute of 1880, anything else 
than a hypothecation of this railway in favor of the bondholders, 
not precisely the hypothecation of Article 2016 C. C., but with 
the exceptional right, given by the statute, of the mortgagee to 
enter into possession, in default of payment, after the exercise 
of which right the contract between the parties became one of 
nantissement (pledge), with, of course, droit de retention (Hen), 
till paid, joined to the hypothec. (3) 

Under the system of common law as distinguished from civil 
law, a mortgage is in law an absolute conveyance subject to an 
agreement for a reconveyance on a certain given event. But 
the Court of Chancery allows the debtor, on payment within a 
reasonable time after the debt becomes due, to redeem his estate, 
and this is called his equity of redemption. Equity will not 
suffer any agreement in a mortgage to prevail which will change 
the latter into an absolute conveyance upon any condition or 
event whatever. (4) 

It follows that, as at common law the estate is in the mort- 
gagee, an execution creditor cannot seize the mortgagor's estate 
in the property. His remedy must be in equity, which allows 
him either to redeem the prior incumbrances, or entitles him to 
equitable execution, and consequently to a decree for the 
appointment of a receiver and sale of the property ; but the 
receiver will be appointed without prejudice to the rights of prior 



(1) C. C. 1966-67. 

(2) Citing 10 Q. L. R. 308; 4 Q. L. R. 323 ; 6 Q. L. R. I. 

(3) Taschereau, J., in Wallbridge T. Farwell at p. 12. 

(4) Williams Real Prop., Am. Ed- 1886, p. 421-426 



124 THE RAILWAY LAW OF CANADA. 

incumbrances, and he must not interfere with any prior incum- 
brancer who might be in possession (i) It was doubtless such 
considerations as these, based upon the common law doctrine as 
to mortgages, which led to the decision in the Phelps case (2) 
without sufficient attention being paid to the Railway Acts. 



(1) Wells v. Kilpin, L. R., 18 Eq. 298. 

(2) Supra, p. 101. 



CHAPTER VI. 



RECEIVERS. 



RECEIVERS. 

1. Appointment. 

2. Quebec. 

3. United Slates and England, 

4. Louisiana, 

5. France. 

6. Ontario. 



7 . In what cases appointment will 
be made. 

8. Duties and powers. 

9. Division of income. 

10. Extraordinary outlay. 

1 1. Payment of right of way . 



1. A receiver is a person appointed by a court of equity to Appointment, 
take charge of property in dispute. The order appointing him 
is in the nature of an injunction, or writ of sequestration, pre- 
venting any^disposition of or interference with the property with- 
out the consent of the Court, (i) There seems to have been 
a considerable difference of opinion as to whether courts of 
equity had any general equity jurisdiction over corporations, as 
such, or whether their jurisdiction attached only by virtue of 
such recognized heads of jurisdiction as trusts, injunctions and 
the like. (2) But it is certain that, apart from statutory enact- 
ment, courts of equity will appoint a receiver over corporate 
property in the following cases : i. At the suit of mortgagees 
or of bondholders who have a lien on the corporation property. 
(3) It is considered that where an Act authorizes the mortgage 
of a railway, it also by implication authorizes the appointment of 
a receiver as necessary to give effect to the mortgage. (4) 2. At 
the suit of creditors who have obtained judgment which they are 
unable to collect by levy under common law execution. (5) 
3. At the suit of any creditor or stockholder interested in the 
funds of a mortgaged corporation, where there is a breach of 
duty on the part of the directors and a loss or threatened loss of 



(1) Thornton w. Washington Savings Bank, 76 Va. 433. 

(2) Kerr on Receivers Annotation by Bispham, 2nd Am. ed., p. 80 ; High 
on Receivers (1886), 288. 

(3) Furness . The Caterham Ry. Co., 25 Beav. 614 ; Kerr on Receivers, 
2 Am. ed., p. 81. 

(4) Peto v. Welland Ry. Co., 9 Grant Chy. 457, Esten V. C. 

(5) Evans v. Coventry, 5 D. G. M. & G. 911. 



iz6 THE RAILWAY LAW OF CANADA. 

funds ; (i) or a state of things exist in which the governing body 
are so divided they cannot act together (2) ; or where a corpora- 
tion has practically closed its business. (3) 4. Where a cor- 
poration is dissolved and has no officer to attend to its affairs. (4) 

Quebec. 2. In the Province of Quebec such officers as receivers are 

not recognized ; but by article 1823 of the Civil Code, a seques- 
trator can be appointed by order of the court over moveables or 
immoveables concerning the property or possession of which two 
or more persons are in litigation. 

In an early case it was decided in that Province (5) that 
the court had not power to appoint a sequestrator or receiver 
to the railway ; that the law regarding sequestration of property 
does not extend to the judicial sequestration of the property of 
bodies corporate. This case was carefully considered, but 
since the advent of the Code, which merely crystallizes the old 
law on the subject, numerous French commentators have dis- 
cussed the matter, and a fairly abundant jurisprudence has in- 
terpreted it, with the result that, although at the present day, in 
the Province of Quebec the question may be considered a very 
delicate one, yet in the recent case of Lambe v. The Montreal & 
Sor el Railway Co., (6) it has been held that a sequestrator can 
be appointed to the property of a railway company. And this 
conclusion would seem to be sound. For while under the 
Quebec law a receiver could not be appointed to take over and 
manage the company as a corporation, the Code clearly con- 
templates the sequestration of property in litigation in the inter- 
est of all concerned, and the administration of the property by 
the sequestrator subject to his accounting to the court. (7) 



(1) Potts v. Warwick, etc , Canal Nav. Co., Kay 142; Whitworth v. 
Gaugain, 3 H. 416 ; Ames v. Trustees of Birkenhead Docks, 20 B. 332 ; 
Peto 21. Welland Ry. Co., 9 Grant Chy. 455. 

(2) Featherson v. Cooke, L. R., 16 Eq. 298; Trade Auxiliary Co. v. 
Vickers, ib. 303. 

(3) Warren r Fake. 49 II. I'rac. Rep. 430. 

(4) Hamilton v. Transit Co., 26 Barb. 46 ; Murray v. Vanderbilt, 39 
Barb. 140 ; Lawrence v. Greenwich Fire Ins. Co., I Paige 587. 

(5) Morrison v. Grand Trunk Ry. Co., 5 L.C. J. 313, S. C. 1861, Monk J. 

(6) Decided in 1891, Lut not reported. The Court of Review decided, 
rever.-ing the judgment of Taschereau, J. , of the Superior Court, that a se- 

questrator could be appointed to a railway. 

(7) C. C. 1823-1829 ; and as to dissolved corporations see C. C. 371-3. 



RECEIVERS.' 127 

3. In the United States the jurisdiction in such matters is, as in United States 
England, an equitable one ; yet the majority of decisions there ar)d England, 
have held that the general jurisdiction of equity over corporate 
bodies does not extend to the power of dissolving the corpora- 
tion, or of winding up its affairs and sequestrating the corpor- 
ate property and effects, in the absence of express statutory 
authority, (i) In England the court can appoint a receiver 
at the suit of a mortgagee of tolls, independently of any Act of 
Parliament, on the ground that when an Act of Parliament 
authorizes a mortgage, it authorizes, as incident to it, all neces- 
sary remedies to compel payment, and in the case of tolls a power 
to appoint a receiver. (2) But the receivership does not ex- 
tend to the management of the railway. (3) 

There is that peculiarity in the undertaking of a railway which 
would make it improper for a Court of Chancery to assume the 
management of it at all. Where the legislature, acting for the 
public interest, authorizes the construction and maintenance of a 
railway, both as a highway for the public and as a road on 
which the company will themselves become carriers of pas- 
sengers and goods, it confers powers and imposes duties and 
responsibilities of the largest and most important kind. These 
powers must be executed and these duties discharged by the 
company. They cannot be delegated or transferred. It is 
impossible to suppose that a Court of Chancery can make itself 
or its officers, without any parliamentary authority, the hand to 
execute these powers. It is immaterial that the company do 
not object to, or may even desire, the appointment of a man- 
ager by the court. (4) 

In the United States it has in some cases been held, that even 
in the absence of a statutory enactment, it is competent for a 
Court of Chancery to appoint a receiver to take charge of and 
manage a railroad, where such a course is indispensable to secure 
the rights of the legitimate stockholders, and to prevent a failure 



(1) High on Receivers, 288. 

(2) De Winton v. Mayor of Brecon, 26 Beav. 541 ; Kerr, Receivers, 2nd 
Am. ed., p. 68. 

(3) Gardner r. London, Chatham & Dover Ry. Co., L. R., 2 Ch. App. 
212. 

(4) Per Lord Cairns in Gardner v. Lon., Chatham & Dover Ry. Co., 
L.R., 2 Ch. App. at pp. 212-213. 



128 THE RAILWAY LAW OF CANADA. 

of justice, (i) As was said by Mr. Justice Swayne of the 
United States Supreme Court : (2) " It has become usual to 
clothe such officers with much larger powers than were formerly 
conferred. In some of the States they (receivers) are by statute 
charged with the duty of settling the affairs of certain corporations 
when insolvent, and are authorized to sue in their own names. 
It is not unusual for courts of equity to put them in charge of the 
railroads of companies which have fallen into financial embarrass- 
ment, and to require them to operate such roads until the diffi- 
culties are removed, or such arrangements are made that the 
roads can be sold with the least sacrifice cf the interests of those 
concerned. As regards the Statutes, we see no reason why a 
court of equity, in the exercise of its undoubted authority, may 
not accomplish all the best results intended to be secured by 
such legislation without its aid." 

Louisiana. 4^ j n Louisiana, where the law of sequestration is similar to that 

of the Province of Quebec, it has been held that, under the laws 
and jurisprudence of the State, the courts have no power to 
appoint receivers to railroad companies, and that, as a general 
principle, courts have no jurisdiction to appoint receivers for 
corporations in the absence of express statutory authority. (3) 
But it has been held in that State that the courts have the 
power of appointing receivers to liquidate the affairs of insolvent 
corporations, if there be no other person provided by law to 
effect such liquidation, whenever it is necessary in order to pre- 
serve the interests of all parties concerned. (4) 

This was in the case of an insolvent bank, and, as the corpor- 
ation had ceased to exist, the court said that it was bound, ex 
propria mo/u, to prevent the confusion and dilapidation con- 
sequent upon the abandonment of its affairs produced by the 
inefficiency of the law. The same was held in a later case. (5) 
The courts of Louisiana have carefully refrained from appoint- 



(l) Stevens v. Davidson, 18 Grattan 828; Paige v. Smith, 99 Mass. 
395 ; Blumenthal v. Brainard, 38 Vt. 408 ; Del., Lack. & West. Ry. Co. 
v. The Erie Ry. Co., 6 C. E. Green 298. 

(2) Davis v. Gray, 16 Wall. 219. 

(3) Baker v. Louisiana Portable Ry. Co., 34 La. Ann. 755. 

(4) Starke v. Burke, 5 La. Ann. 740. 

(5) In the matter of the Mechanics Society, 31 La. Ann. 627. 



RECEIVERS. 129 

ing receivers, and the above instances are the only ones where 
such an appointment would be made, (i) 

On the other hand, it has been laid down as a general principle 
in a Quebec case, (2) that the judge has power to order every 
kind of conservatory measure which the interests of the parties 
require ; that this power is indefinite, and confided to the wis- 
dom and discretion of the judge who exercises it ; and that 
article 1823 of the Civil Code is not restrictive, but simply 
indicative of an instance in which a sequestrator can be ordered. 
This is the view of M. Gillouard, the latest French author on 
the law of Seguestre, (3) who thinks that sequestration can be 
ordered even where there is no dispute as to the property in, 
or possession of, the thing sought to be sequestrated. 

5. The French authors do not discuss the question of seques- France, 
tration of bodies corporate. In France, all railways, whether 
constructed or conceded by the State, or by the departments or 
communes, are considered as forming part of the national high- 
ways, and, consequently, of the public domain. 

They are therefore not susceptible of alienation or of expro- 
priation. (4) 

The French authors and jurisprudence therefore are in no 
way applicable, as their system of railway legislation is so 
different from ours. 

6. The case of Peto v. Welland Canal Company (5) brought Ontario, 
up for the first time in Ontario the question as to whether a 
judgment creditor of a railway company, with execution against 

lands of the company lodged in the hands of the sheriff, is 
entitled to the appointment of a receiver of the earnings of the 
road, the profits thereof to be applied in payment of his demand. 
Cases had already been decided in which courts had appointed 
receivers of railways at the instance of mortgagees, it being con- 
sidered that when the Act authorized the mortgage of a railway, 
it also, by implication, authorized the appointment of a receiver 

(1) Baker v. Louisiana Portable Ry. Co., 34 La. Ann. 756. 

(2) Drummond v. Holland, 23 L. C. J. 241. 

(3) Gillouard, Prt D<pot, et Se'questre (1892), No. 175. 

(4) Vigoureux, chemindefet (1886), No. 15. 

(5) 9 Grant Chy. 455. 

9 



130 THE RAILWAY LAW OK CANADA. 

as necessary to give effect to the mortgage. These cases show 
that the appointment of a receiver to a railway is not contrary to 
public policy, and in fact it must be obvious that as a receiver is 
only to receive the surplus, after defraying all the expenses of 
the road, which is all the time managed by the directors of the 
company, the appointment of such an officer cannot be contrary 
to public policy, (i) In this case also the distinction was made 
between a. receiver as such and a receiver with the powers of a 
manager of a road. A receiver, when spoken of under the Ontario 
or English law, is undoubtedly one with very limited powers, 
and not the receiver as meant in the United States, where that 
officer is usually a manager of the railway. 

In an early Ontario case (2) a " manager or receiver " of the 
undertaking was appointed, so states the head note; but accord- 
ing to the report, the petition asked for a " receiver '' of the 
undertaking, and a receiver in Ontario is not a manager. (3) His 
duties are stated to be, in Simpson v. The Ottawa & Prcscott 
Railway Company, (4) to receive the gross receipts of the com- 
pany for the carriage of passengers, freight, mails, etc., and to 
pay the bills for running expenses thereout. And this is the 
sense in which the duties of a receiver in England are inter- 
preted. It was not until the Statute 30 and 31 Vic. (c. 127, s. 
4) that managers could be appointed by the Court of Chancery 
over a railway company. The words used in sec. 4, c. 127, of 
that Act are : " may obtain the appointment of a receiver, and, 
if necessary, of a manager, of the undertaking." 

It was further said in the above case that the management of 
the railway must remain in the hands in which the Legislature has 
placed it. It is no part of the duty of a receiver to interfere 
with it. (5) 



(1) Esten V. C., in same case. 

(2) Gait r. The Erie, etc., Ry. Co., 14 Grant Chy. 499. 

(3) Allan v. Manitoba & N. W. Ry. Co., 14 Can. L. T. 315. 

(4) i Ch. Chamb. 126 ; 10 U. C. L. J. (O. S.) 108. 

(5) A holder of overdue debentures issued by a tramway company incor- 
porated by special Act of Parliament, brought an action to realise his 
security, and moved for the appointment of a receiver and manager. The 
company was stated to be insolvent, but had not been ordered to be wound 
up Held, that a tramway company was not within the principle of Gardner 
v. London, Chat. & Dover Ry. Co. (L.R. 2 Ch. 201), and that the court would 
appoint a manager. Bartlett v. West Metropolitan Tramway Co. (1893) 3Ch.. 



RECEIVERS. 131 

The learned judge also stated the duties of a receiver to be, 
" to watch the expenses of the company ; to remonstrate with its 
officers and servants when, in his judgment, they are needless or 
excessive; and, when due attention is not paid to his represen- 
tations, lo present the matter to this Court ; and this more es- 
pecially if any case should come under his observation of ex- 
penses incurred otherwise than in good faith. He will of course 
have a right to the fullest information, as well from inspection of 
the books as otherwise. "I think all this necessarily flows from 
the nature of his duties. He is called on to pay out monies as 
for expenses properly and necessarily incurred, and he shouli 
to a reasonable extent see that they are such." (i) 

Boyd, C., in Lee v. Victoria Ry. Co. (2) said, speaking of the 
appointment of a receiver: "The management of the road is not 
interfered with, but is left to the board of directors subject to this, 
that the court, through its officer the receiver, retains control of 
the expenditure. The position is anomalous, lo some extent, 
owing to the absence of any power to appoint a manager, which, 
though conferred upon the court in England, is not so here." 

Upon the whole, there would seem to be no reason, even in 
the Province of Quebec, why the courts should not appoint >, 
sequestrator or receiver of the property, tolls, and revenues of a 
railroad, with the view to having the same administered for the 
benefit of the creditors of the company, subject to the rights of 
mortgagees and other prior incumbrancers, and to the right of the 
directors of the company to work and manage the undertaking 
for the necessary purposes of the statute. 

But the appointment of a sequestrator, or receiver, with power 
to manage and carry on the company, would appear, from the 
jurisprudence with regard to receivership in England, the United 
States, and this country, to be incompetent of the courts here in 
the absence of statutory authority. 

7. In the appointment of a receiver the court acts only upon a j n what cases 

proper case being made out for the exercise of its jurisdiction, appointment 

,. ,, L , ,- , , , , . ' . will be made, 

according to well established principles ; and in that sense only 

347 ; 69 L. T. 560. See also Ames u.The Trustees of the Birkenhead Docks, 
20 Beav. 350, where the respective duties of the governing body of the com- 
pany on the one hand, and of the receiver on the other, are defined. And 
see Lee v. Victoria Ry. Co., 29 Grant Chy. m, Boyd Ch. 

(l) I Ch. Chamb., at p. 30. (2) 29 Grant Chy. in. 



132 THE RAILWAY LAW OF CANADA. 

can a receiver be said to be exdebito justicia, whether the appli- 
cation be interlocutory or made at the hearing, whether the ap- 
pointment of a receiver is the sole object of the action or only 
incidental to other relief, and whether the relief is sought at the 
instance of a judgment creditor or of anyone else, (i) 

And the court will not appoint a receiver, by way of equitable 
execution, on the ground that it will do no harm, unless there is 
reason to believe that there is something to be received in which 
the plaintiff can be interested. (2) Trustees of first mortgage bonds 
covering the first division of a railway are entitled to have a 
receiver appointed for that division, upon default of the com- 
pany to pay interest on such bonds, and this independently of the 
prior appointment of another receiver of the whole road by judg- 
ment creditors of the company. Such judgment creditors could 
not have the trustees of the first mortgage bonds made parties 
to their suit, the latter having a lien and charge which were prior 
to the former's claim ; they could only have parties added whose 
claims were subsequent to theirs. (3) 

Duties'and 8. Where a receiver of a railway company was appointed to 
powers. receive " the rents, issues, and profits of the railway," it was held 

that it was his duty to receive the gross receipts of the company 
for the carriage of passengers, freight, mails, etc., and to pay the 
bills for running expenses thereout, and not to receive only the 
surplus after the payment of expenses. 

In the case of a judgment creditor who has secured the ap- 
pointment of a receiver, it is usual for the latter, out of the gross 
revenue received by him, to pay the expenses of the undertaking 
and the interest of the mortgagees, if any, and the balance into 
court. (4) 

Section 94 of the Act provides that the rents and revenues of 
the company shall be subject in the first instance (after payment of 
certain penalties) to the payment of the " working expenditure " 
of the railway. The difficulty is to determine how far debts in- 



(1) Smith v. Port Dover & Lake Huron Ry. Co., 12 Ont. App. 288. 

(2) Smith v. Port Dover & Lake Huron Ry. Co., 12 Ont. App. 288. 

(3) Allan v. Man. & N. W. Ry. Co., Man. Q.B. 1894, 14 Can. L. Times 

l $-3 l 7- 

(4) Ames v. Trustees of the Birkenhead Docks, 20 Beav. 350. 



RECEIVERS. 133 

curred for working expenses before the appointment of a receiver 
would be preferred to the claims of the bondholders. 

In Ontario, where a receiver of a railway had been appointed 
to take the revenues, issues and profits, to pass his account 
periodically, and to pay into court the balance due from him after 
providing for the working expenses and outgoings of the rail- 
way ; the master was directed to take an account of all persons 
entitled to liens, charges or incumbrances, and to settle their 
priorities, and the money to be paid into court was to be paid 
to such persons according to their priorities to be ascertained. 
The court held that the master, in taking the receiver's accounts, 
should hpve allowed debts paid for working expenses which were 
incurred before but not regularly payable until after his appoint- 
ment, but not those already in default at that time, which latter 
were properly payable out of the money to be paid into court 
according to their priority, (i) 

The phrase " ordinary mode of doing business " is interpreted 
as meaning the mode which is most advantageous or convenient, 
and does not include other modes or expedients to which a com- 
pany may be driven by its necessities, and the natural result of 
which is the creation of debts. (2) The term "working ex- 
penses," regarded in the ordinary signification of the words, and 
also in relation to the purpose of keeping the railway going, not- 
withstanding the appointment of a receiver, has been held to in- 
clude only those expenses which are necessary to keep it working, 
and not expenses of by-gone times, by which the present working 
of the road was no more affected than it was by any overdue de- 
benture or coupon. (3) 

In the case of Wallbridge v. Farwell, (4) however, in the Su- 
preme Court, Mr. Justice Strong used the following significant lan- 
guage : " I do not by any means intend to preclude myself in future, 
should the question be raised in proper form and in an appro- 
priate case, from considering whether the principle which is now 
universally recognized in the United States, as to the applicability 
of current earnings to current expenses, incurred either whilst 
or before railway property comes under the control of the court, 



(1) Gooderham v. Tor. & Nipissing Ry. Co., 8 Ont. App. 685, per 
Patterson, J., at p. 694. 

(2) Ibid. (3) Ibid., p. 694. 
(4) 18 Can. S. C. R. I. 



134 THE RAILWAY LAW OF CANADA. 

by being placed, at the instance of mortgagees, in the hands of 
a receiver, in preference to mortgage creditors whose security has 
priority of date over the obligation thus incurred for working 
expenses, should be adopted by our courts. This doctrine is 
now firmly settled in the United States, where railway mortgages 
exactly resemble those in use with us. and which do not at all 
resemble the securities of debenture holders under the English 
system of securities for borrowed capital ; and the practice 
referred to is so pregnant with justice, good faith and equity that 
there may be found strong reasons for applying it here when the 
question arises." There is no doubt that, as stated by the 
learned judge, the principle he advocates is now universally 
recognized in the United States : but in that country the rule has 
been extended to mere contract debts of the railway company, 
such as for labor, materials and supplies, incurred prior to the 
appointment of the receiver, and unsecured by any lien upon the 
property. 

In such cases Mr. High, in his work on receivers, ( i) thinks the 
doctrine is wholly indefeasible upon sound legal reasoning. The 
allowance of such preference plainly impairs the obligation of the 
mortgage contract, and in practice frequently absorbs much of the 
mortgage security. That author thinks, however, that the doc- 
trine is so strongly intrenched in authority in the United States 
that it can no longer be questioned. 

Division of ^- ^ nas Deen forcibly argued that, the duty of the railway 
income. company being to apply its current income to the payment of ob- 

ligations incurred in the daily operation and management of the 
road, before applying such income for the benefit of the mortgage 
bondholders, a diversion of such income, as by payment of 
bonded indebtedness, or by permanent improvement of the 
property for the benefit of the bondholders, would justify the 
courts in restoring to such unsecured creditors from the 
receiver's income what has been improperly diverted by the 
company for the benefit of the bondholders; and that the mort- 
gagee, in accepting his security, is regarded as having impliedly 
agreed that the current debts of the company, incurred in the 

(i) High, 394 a. 



RECEIVERS. 135 

ordinary course of its business, shall be paid out of its receipts 
before he has any claim upon the income, (i) 

On the other hand, it seems to the author (hat the mortgagee 
is entitled to presume that the income of the company has been 
properly applied ; and it would seem hardly just when he comes 
to realize his security that he should find it largely impaired by 
overdue and outstanding debts, taking precedence of his claim on 
the ground that they were incurred for the " working expenditure" 
of the railway ; and these words in the Act would seem to include 
onlythe expenditure necessary to work and carry on the railway, 
and not past due debts ; the author would, therefore, prefer the 
doctrine laid down in Gooderham v. Toronto & Nipissing Ry. Co., 
(2) notwithstanding the very broad language used by the (now 
Chief Justice of the Supreme Court in the dictum above cited. 

10. While it is the duty of the receiver of the gross revenue of Extraordinary 
-a railway, to pay thereout all expenses necessary for the main ten- out ^ a y- 

ance, management and working of the undertaking, he would not 
be warranted in spending the same in any extraordinary outlay ; 
and where an application was made by the receiver to authorize 
the purchase of a large amount of rolling stock, the outlay in 
respect of which would require to be met by anticipating income, 
the court refused to sanction the expenditure. (3) Nor have the 
Court jurisdiction or discretion to order a receiver, who repre- 
sents other interests than those of the first mortgagees of a rail- 
way, to borrow money on the security of the railway and payable 
in priority of all other charges thereon ; such sum to be used in 
paying debts claimed to have been incurred for " working expen- 
diture " under the Act. This could only be done on the appli- 
cation of the first mortgagees. (4) 

11. The payment bj 1 a receiver of a sum of money to the owner Payment of 
of land over which the line ran, for the right of way over his lands, ng wa ^' 
he having threatened to obstruct the passage of the company's 

trains unless paid, is not a payment which could be included in 
the term " working expenses or outgoings." (5) 



(1) Fosdick v. Schall, 99 U. S. 235. Williamsons' Adms v. W. C. V. M. 
& G. S. R. Co., 33 Grattan 624. High on Receivers, 394 c . 

(2) Ubi supra, p. 132. 

(3) Lee v. Victoria Ry. Co., 29 Grant's Chy. 1 10. 

(4) Allan v. Man. & N.W. Ry. Co. (Man. Q.B.), 14 C. L. T. 416. 

(5) Gooderham . Tor. & Nipissing Ry. Co., 28 Grant Chy. 212. 



CHAPTER VII. 



EMINENT DOMAIN. 



1. Crown lands. 

2. Alienation of such lands. 

3. Lands reserved for naval or 
military pur -poses. 

4. Indian reserve land. 

5. Lands oj another railway . 

6. Contracts for purchase of land 
before deposit of map and plait . 

7. Annual rent. 

8. Who may convey lands. 

9. Powers limited in certain cases. 

10. Title of company. 

11. Agreement with proprietors, etc., 
after deposit oj plan. 

12. Land that may betaken with- 
out consent. 

13. Extra land. 

14. Occupying land for construction 
purposes , 

15. Power to take materials for con- 
struction. 

16. Power to reach such material . 

17. Power to purchase whole pro- 
perty where better terms can be 
stcured thereby. 

18. Procedute in case of disagree- 
ment. 

19. Notice. 

20. Arbitrators. 

21. I-irsi Meeting. 

22. Examination of witnesses. 

23. Award final. 

24. Appeal from award* 

25. Arbitrators must act at meeting. 

26. Vacancy among arbitrators. 

The powers of eminent domain granted to railway companies 
under The Railway Act have already been generally stated ; (t) 
it now remains to be considered in what manner and to what 



27. Disqualification of arbitrators. 

28. Arbitrators, how to be gttided in 
making valuationi. 

29. Increased value to remainder of 
land. 

30. Lands injuriously affected by 
the construction of the railway. 

31. Nature of damages that may 
be considered by arbitrators. 

32. Value of land, how estimated. 

33. Access to landways and water- 
ways. 

34. Quebec law and English law on 
the subject compared. 

35. Loss of business. 
36- Injury to business-. 

37. Loss of privacy. 

38. Injury to franchises, ferries. 

39. Injury to easements. 
40 Injury to trees. 

4 1 . Compensation a bar (o all further 

claim. 

42-44. Form of award. 
43. Desisttne ntfi om notice. 

45. Remedies against lh award. 

46. Appeals from award. Practice. 

47. Bringing the arbitration record 
into court. 

48. Grounds of appeal. 

49 . Questions of fa ct. 

50. Principles upon which Courts 
interfere upon questions of fact. 

51 Costs of arbitration. 

52 Interest. 



(I) Supra, p. 73 et seq. 



EMINENT DOMAIN. 137 

extent, and under what limitations and conditions, these powers 
may be exercised. 

Supposing that the company has made and deposited the ne- 
cessary plans, and given the notices required of such deposit, (i) 
how is the company to proceed to obtain the land required to 
construct and maintain the railway ? 

1. First as to Crown lands ; the company cannot take any of Crown lands, 
the lands of the Dominion, without the consent of the Governor 

in council, (2) nor any of the lands belonging to any Province 
without the consent of the Lieutenant Governor ; (3) but with 
such consent, and upon such terms as may be prescribed by 
those executive officers, the company may take and appropriate, 
for the use of its railway and works incidental thereto, but not 
alienate, any of the lands of the Crown lying on their route 
which have not been granted or sold to others, and which are 
necessary for the purposes of the railway. (4) They may also 
take any such part of the public beach or land covered by any 
lake, stream, river or canal, always with such consent, as may be 
necessary for the construction of the railway. (5) 

Whenever such lands are vested in the Crown for any special 
purpose, or subject to any trust, the compensation money which 
the company pays therefor shall be held or applied by the gov- 
ernor in council for the like purpose or trust. (6) 

2. But the company could not, prior to the passing of the Alienation of 
amending Acts 53 Vic., cap. 28, and 55-56 Vic., cap. 27, alienate such lands< 
any part of the Crown lands obtained for the construction or in 

aid of the railway. And even under par. s., added to section 90 
by those Acts, it would seem doubtful whether the company 
could alienate any part of Crown lands taken under section 99. 
The power to alienate under par. s., according to the strict lan- 
guage of the statute, only refers to lands "obtained" from the 
Crown by way of subsidy or otherwise; and, as the prohibition 
to alienate contained in section 99 remains, the legislature would 
appear to have intended to make a distinction in this respect 



(1) Sees. 123 to 135 ; and sec. 144; and supra, p. 76. 

(2) Sec. 99. (3) See appendix, sec. 99. 
(4) Sec. 99. (5) Ibid. 

(6) Ibid. 



138 



THE RAILWAY LAW OF CANADA. 



between lands " obtained" and lands "taken and appropriated" 
under sec. 99. This is the only interpretation which would give 
effect to the contradictory enactments of the two sections; and 
it is not satisfactory, inasmuch as section 99 speaks of compen- 
sation money to be paid for lands taken thereunder ; and cer- 
tainly the taking of lands, with the consent of the Crown, and on 
payment of compensation therefor, would seem to amount to an 
" obtaining " under section 90, par. s. There seems to be here 
an almost irreconcilable conflict. 



Lands 
reserved for 
naval or 
military 
purposes. 



land. 



3. Whenever any part of the Crown lands, which the com- 
pany may require for their railway, are reserved for naval or mili- 
tary purposes, the company must firrt obtain a license under the 
hand and seal of the Governor General. But this license cannot 
be granted until a report has been made, approving of such 
license, by the naval or military authorities in which the lands 
are vested, (i) 

Indian reserve 4- Again, it may be necessary for the railway company to take 
or use a portion of an Indian Reserve. This canmot be done 
without the consent of the Governor in Council; and the com- 
pany must make compensation whenever they take or use any of 
such lands, or when any such are injuriously affected by the con- 
struction of the railway, the same as they would have to do in 
the case of lands belonging to private individuals or corpor- 
ations. (2) 

3. In the construction and operation of the railway it may be- 
come necessary that the company should obtain a right of way 
over lands owned and occupied by another railway company, or 
they may require the use of the tracks, or portions of the tracks, 
or station grounds, or the lands of another railway company ; and 
they are given power under the Act, with the approval of the 
railway committee on application, after notice to the other com- 
pany, to take possession of, use and occupy any lands of such 
other company. The railway committee are empowered to give 
such order in connection therewith as they may think just in the 
public interest ; and all the provisions of the Act with regard to 

(1) Sec. 100. See, as to nature of title to such lands, Grand Trunk Ry. 
J Co. v. Credit Valley Ry. Co., 27 Grant's Chy. 232. 

(2) Sec. 101. 



Lands of 
another 
railway . 



EMINENT DOMAIN. 139 

the taking of land apply to such cases, both as to the power of 
taking lands and to the compensation to be given to the other 
company, (i) ". 

6. Before referring to the extent of land which may be taken Contracts for 
by expropriation, without the consent of the proprietor or in *' w ~ {^before 
vitum, it may be well to point out that the power to acquire land deposit of 
with the consent of the proprietors by voluntary deed or bargain ma P and P lan * 
(2) may be exercised before the deposit of the maps and plans, 

and before the setting out and ascertaining cf the land required 
for the railwa) ; and the contr.icts or agreements for such acqui- 
sition are declared to be binding at the price agreed upon, pro- 
vided that the lands are afterwards set out and ascertained with- 
in one year from the date of the contract or agreement, and even 
though such land has in the meantime become the property of a 
third person ; and possession may be taken and price dealt with 
as if fixed by award of arbitrators, and the agreement is declared 
to be in the place of an award. (3) 

7. In the case cf persons who cannot, in the ordinary course Annual rent, 
of law, sell or alienate lands which have been set out and ascer- 
tained, a fixed annual sum or rent must be agreed upon as an 
equivalent, and if the amount of this rent cannot be agreed 

upon, it is fixed by arbitrators in the manner hereinafter referred 
to, with regard to forced expropriation of property. (4) If any 
such annual rent is agreed upon, or determined, or any part of the 
purchase money remains unpaid, the railway properly, and its 
tolls and revenues, are liable for the payment, in preference to all 
other claims, with the exception of those due to the Govern- 



(i) Sec. 102. (2) Sec. 90 (<:). 

(3) Sec. 141. 

1'he deed of sale for the right of passage does not cover incidental 
damages arising from the works of a railway, unless such damages are 
expressly mentioned in the deed. Cantin r. The N. S- Ry. Co., Q. B., 6 
Sep., 1877, Ram. Digest 591. 

Possession by a railway company of a person's land without his consent, or 
without making him a prior oftier therefor, gives to the latter a recourse by 
petitory action against the company. Cie. de Ch. de Fer Central &. Le- 
gendre, 1 1 Q. L. R. 106, Q. B. 

(4) Sec. 142. See Brewster v. Mongeau & The M. & S. Ry.Co., M. L. 
R. 3Q.B. 20, 10 L. N. 141, 15 R. L. 67, Q. B., 31 L.C.J. 115, Q.B., 1887, 
and Supra p. 79. Note. 



140 THE RAILWAY LAW OF CANADA. 

ment for penalties and the working expenses of the railway, 
provided that the deed creating this charge is duly registered, (i) 

Who may 8. It is provided by the Act that tenants in tail, or for life, 

convey lands. g Uar( jj anS) or tutors, as they are called in Quebec, curators to 
incapable persons, executors, administrators, trustees, and insti- 
tutes under substitutions, and all persons whosoever, not only on 
their own behalf and that of their heirs and successors, but also 
on behalf of those whom they shall represent, whether infants, 
issue unborn, lunatics, idiots, married women, or other persons 
seized, possessed of or interested in any lands, may contract and 
sell to the company the whole or any part of such lands. (2) 
But in case such persons have no right in law to sell the lands, 
they must obtain from a judge, after notice to the parties 
interested, an authorization to sell, and the judge may give such 
orders as are necessary for that purpose, and. if required, an 
order to secure the investment of the purchase money, in 
accordance with the law of the particular Province, .in order to 
secure the interests of the owner. (3) 



(1) Sec. 143. See Brewster ?. Mongeau & The M. & S. Ry. Co., supra, 
p. 79, note. 

(2) Sec. 136. It was held by the Supreme Court, that under the some- 
what similar provisions of C. S C., cap. 66, s.i I, as explained and interpreted 
by 24 Vic., cap. 17, s. i, a tenant for life was authorized to convey the 
interest of the remainder-man, but not to receive payment for the proportion ) 
of the purchase money representing such interest. Midland Ry. Co. v. 
Young, 16 L.N. 284 ; 22 S. C. R. 190, confirming judgment of the Court of 
Appeal, 19 O. A. R. 265; and see Cameron t?. Wigle, 24 Gr. Chy. 8. 

As to sale of infants' estate under former Acts, see Dunlop < Can. 
Central Ry. Co., 45 TJ. C. Q. B. 74. 

(3) Sec. 137. An authorization to a curator to a substitution to sell real 
property affected by a substitution, unaccompanied by a similar authorization 
to a tutor ad hoc to such of the substitutes as are living, but incapable of 
acting, is insufficient. Benoit v. Benoit, 18 L. C. J. 286, S. C. 1874. 

Every alienation or hypothec of theimmoveable property of a minor with- 
out judicial authorization is radically null. Beliveau v. Barthe, 7 R. L. 
453, and see C. C. 297 and R. S.Q., art. 5794. 

An appeal does not lie to the Queen's Bench fiom an order of a judge 
of the Superior Court homologating a family council, and ordering the sale of 
a minor's immoveables. Beliveau v- Cle'ment & Chevrefils, 9 R.L. 664, Q.l>. 

Where land was conveyed to C. D. for life, with remainder to her children, 
and C- D. , during the infancy of the children, agreed to sell and convey to a 
railway company for the purposes of its railway: Held, that C. I)., notwith- 
standing the provisions of sec. 136 of the Railway Act, had no right in law 
to sell ; to get such right an order of a judge under sec. 137 was required ; 
and where the proceeding was entirely for the benefit of the company, 
and no factious opposition was raised by anyone, the company should pay 
the cost of the order as part of the price of the land. Ke Dolsen, 13 P. R. 
84, and see Wilson v. Graham, 13 O. R. 65i. 



EMINENT DOMAIN. 141 

There might seem to be an apparent contradiction between 
this provision and that of sec. 142, which requires a fixed annual 
rent, and not a principal sum, to be paid, in the case of persons 
who have no power to sell in the common course of law. But 
this latter section would appear to apply only to contracts and 
agreements to sell under section 141, made before the deposit of 
the plan, and the setting out and ascertaining of the lands 
required for the railway ; though why this distinction should 
be made is by no means clear. 

9. These powers, in the case of executors who are not Powers 
invested with power over the real property of the testator, 
administrators of persons dying intestate, and ecclesiastical and 
other corporations, and trustees of land for church or school 
purposes, can only be exercised with respect to such lands as are 
actually required for the use and occupation of the railway, (i) 

10. But such a sale or conveyance, once made, or any con- Title of 
tract or agreement to sell, made under these provisions, vests com P ar 
the company with an absolute title to the land, free from all trusts 

and restrictions whatsoever, and the person so selling, or agreeing 
to sell, is indemnified by the Act for whatever he may do under 
its provisions. (2) And it is further provided that the company 
shall not be responsible for the disposition of the purchase mo- 
ney, if paid to the owner of the land or into court for his benefit- 

(3) 

The effect of these sections would appear to be that, while the 

company may obtain a valid conveyance in fee simple from 
persons seized or possessed of lands in a representative or fidu- 
ciary character, such as those mentioned in sections 136 to 138, 
the purchase money must be paid to the real owner, or if he 
cannot be ascertained, or if for any other reason the company 



(1) Sec. 138. The Rector of Woodstock filed a bill against the G. W. Ry. 
Co. for the specific performance of an alleged contract for himself and his 
successors as the consideration for certain rectory land conveyed by the 
plaintiff to the company for railway purposes . 

The Court of Chancery decreed for the plaintiff. 

The Court of Appeals not being satisfied with the evidence of the alleged 
contract, and also deeming the contract to be open to various objections, 
reversed the decree and ordered the bill to be dismissed with costs. Bettridge 
v. The G. W. Ry., 3 U. C., E. & A. R. 58 (Grant). 

(2) Sec. 139. (3) Sec. 140. 



142 THE RAILWAY LAW OF CANADA. 

sees fit, into court for his benefit. And probably the same inter- 
pretation would be given to these sections of the present Act, 
as was given to the provisions of C. S. C., cap. 66, on the same 
subject in Midland Ey. Co. v. Young; (i) where the language 
of the statute was almost in precisely the same terms as the pre- 
sent one. 

As to mortgages, hypothecs and other encumbrances upon 
the property, the question is not without difficulty. In Quebec, 
the mortgagee has only a privilege or preference upon the pro- 
ceeds of the property of his debtor, when it is broug- t to sale by 
process of law ; (2) but the latter is not divested of his property, 
and may alienate it, subject, however, to the hypothec, which 
subsists upon the property notwithstanding the sale. (3) And 
the creditor of the hypothec may take an hypothecary action to 
bring the property to sale in the hands of any third holder, unless 
the latter prefer to pay his claim. (4) In the absence, therefore, 
of any express words in the Act extinguishing hypothecs upon 
lands sold to a railway company under these sections, the com- 
pany would remain subject to the hypothecary action. There 
do not seem to be any such express words. Section 139 merely 
says that the sale shall vest in the company " the fee simple in 
the lands, freed and discharged from all trusts, restrictions and 
limitations " ; which would seem to refer to such as are indicated 
in the preceding sections ; the words certainly do not include 
hypothecs and encumbrances. Section 140 only relieves the 
company from liability for the "disposition" of the purchase 
money when paid to the " owner." The word owner here is not 
to be taken in the sense of the definition given in the interpreta- 
tion clause of the Act [sec. 2, par. (p)], but in its natural and 
ordinary meaning. (5) In Quebec the mortgagor does not cease 
to be the owner of his land, as above pointed out, and when he 
sells is under no obligation to apply the purchase price to the 
extinction of any hypothecs, as the purchaser takes the land 
subject thereto, leaving him only his recourse against the seller. 

In the case of land taken in invitum, a distinction is made by 
the Act. The compensation stands in the place of the lands ; 

(i) 22 S.C.R. 190. (2) C. C. 2016. 

(3) C.C. 2053. (4) C.C. 2058, 2061. 

(5) Young v. Midland Ry. Co., 19 O. A.R. per Osier J. A. at p. 275. 



EMINENT DOMAIN. 143 

and any claim or encumbrance upon the lands is converted into 
a claim upon the compensation, for the amount of which alone 
the company is responsible, saving its recourse against the per- 
son wrongfully receiving the same, (i) So an hypothecary ac- 
tion would not lie against the company in such case, but merely 
a personal action for the amount of the compensation. (2) 

In the Provinces where the principles of the English law 
prevail, the above reasoning would probably not apply ; the 
position of the mortgagor and mortgagee being so radically differ- 
rent, (3) and the mode of enforcing the rights and remedies of the 
mortgagee so dissimilar. In Ontario it has been recently held, 
that where a railway company had fixed and settled the amount 
of compensation to be paid to the mortgagor of certain lands 
taken by the company, the mortgagees were entitled to a manda- 
mus to compel the company to arbitrate as to the compensation 
payable to them in respect of the land mortgaged to them ; inas- 
much as the mortgagor could only deal with his own equity of 
redemption, and did not represent his mortgagees, and was not 
included in the enumeration of persons who, under sec. 13 of R. 
S. O., chap. 170, are enabled to sell or convey lands to the com- 
pany. ^4) 

11. After the deposit of the plan, and after notice has been Agreement 

given in the newspapers as already mentioned, (5) ten days w . 1 ^ P r P" 

i f s \ i r t nctorsj etc. ^ 

having elapsed, (6) the railway company may apply to the a f ter deposit 

owners of lands, or persons empowered to sell, or persons inter- f pl an - 
ested in lands which may suffer damage from the exercise of the 
powers of the railway, for the purpose of acquiring their lands, or 
settling the compensation to be paid for the value of the property, 
or damages. (7) 

12. If an agreement cannot 'be come to, the extent of land Land that 

which can be taken from a proprietor without his consent is limited ma y be taken 

. . ..'". without 

to 33 yards in breadth ; except where the railway is raised consent. 



(1) Sec. 166. 

(2) Brunei . Montreal & Ottawa Ry. Co., Q. R., 3 S. C. 445. 

(3) See supra p. 122. 

(4) In re Toronto Belt Line Ry. Co. & Western Can. L. & S. Co., 95 
C. L.T. 95; 26O.R.4I3. 

(5) Supra, p. 76. 

(6) One month, R. S. Q. (7) Sec. 144. 



144 



THE RAILWAY LAW OF CANADA. 



Extra land. 



Occupying 
land for 
construction 
purposes. 



Power to tak 
materials for 
construction. 



more than 5 feet higher, or cut more than 5 feet lower than the 
surface of the land, or where offsets are to be established, (i) or 
stations, etc., erected, or goods to be delivered, in which cases 
not more than 150 yards in breadth by 650 in length may be 
taken. (2) 

13. If any more land is required for the accommodation of 
the public, or of traffic, or for protection against snow drifts, an 
application must be made and a plan submitted to the Minister, 

(3) and on application after notice supported by affidavit that 
the land is necessary for the purpose, and no other suitable land 
can be obtained at such place on reasonable terms, and with less 
injury to private rights, the Minister may grant the application, 

(4) and after the deposit of the plan, and the giving of the 
Minister's certificate, the company may proceed to take the extra 
extent of land, in the same manner as any other lands. (5) 

14. The company, either for the purpose of constructing or 
repairing its railway, or for the purpose of carrying out the 
requirements of the railway committee, or in the exercise of the 
powers conferred upon it by the railway committee, may enter 
upon any land which is not more than two hundred yards 
distant from the centre of the located line of the railway, and 
may occupy the said land as long as is necessary for the pur- 
poses aforesaid ; but before entering upon any land for the 
purposes aforesaid, the company shall, in case the consent of 
the owner is not obtained, pay into the office of one of the 
Superior Courts of the Province in which the land is situated, 
such sum, with interest thereon for six months, as is, after two 
clear days' notice to the owner of the land, or to the person em- 
powered to convey the same or interested therein, fixed by a 
judge of any one pf such Superior Courts. (6) 

e 15. Whenever stone, gravel, earth, sand or water is required 
for the construction or maintenance of the railway, the company 
may, if it cannot agree with the owner of the land on which the 



(i) Double tracks, R. S. Q. (2) Sec. 103 ; 250 yds., R. S. Q. 
(3) Sees. 106, 107. (4) Sees. 107-109. 

See Lon., Brighton & South Coast Ry. Co.v. Truman, L. R., II App. 
Cas. 45. 

(5) Sees, no, in. (6) Sec. 112. 



EMINENT DOMAIN. 145 

same are situated for the purchase thereof, cause a land surveyor, 
or an engineer, to make a map and description of the property 
so required, and serve a copy thereof, with a notice of arbitra- 
tion, as in the case of acquiring the roadway ; and such pro- 
ceedings may be had by the company, either for the right to the 
fee simple in the land from which the material is taken, or for 
the right to take material at any time it thinks necessary, and 
the notice of arbitration, if arbitration is resorted to, shall state 
the interest and powers required, (i) 

16. Whenever any stone, gravel, earth, sand or water is so Power to 



taken at a distance from the line of the railway, the company ie 



may lay down the necessary sidings, water pipes or conduits 
and tracks, over or through any lands intervening between the 
railway and the land on which such material or water is found, 
whatever is the distance, and all the provisions of the Act, except 
such as relate to the filing of plans and publication of notices, 
shall apply, and the powers thereby granted may be used and 
exercised to obtain the right of way from the railway to the land 
on which such materials are situated ; and such right may be 
acquired for a term of years, or permanently, as the company 
thinks proper ; and these powers may, at all times, be exercised 
and used in all respects, after the railway is constructed, for the 
purpose of repairing and maintaining the railway. (2) 

17. Whenever, for the purpose of securing sufficient land for p wer to 
stations or gravel pits, or for constructing, maintaining and using purchase 
the railway, any land may be taken under the compulsory pro-p erty w here 
visions of the Act, and by purchasing the whole of any lot or better terms 
parcel of land over which the railway is to run, or of which any thereby 
part may be taken under those provisions, the company can 
obtain the same at a more reasonable price or to greater advan- 



(i; Sec. 113. 

Held, that a judge may grant his warrant to put a company in immediate 
possession of land from which material is required to be taken for construction 
purposes Joly v. Moreau, 2 L. N. 284. 

(2) Sec. 114. 

An injunction lies against a railway company which has taken land without 
the formalities required by the Act ; and the writ can be taken at the instance 
of one of the joint proprietors even when the other owner had consented to the 
possession by the company. Beauharnois Junction Co. v. Bergevin, 17 R. Li 
113, Q. B.; Beauharnois Junction Co. z>. Hainault, 17 R. L. 116, Q. B. 



146 



THE RAILWAY LAW OF CANADA. 



Procedure in 
case of disa- 
greement. 



Notice. 



tage than by purchasing the roadway line only, or only such 
part, the company may purchase, hold, use or enjoy the whole of 
such lot or parcel, and also the right of way thereto, if the same 
is separated from the railway, and may sell and convey the same 
or any part thereof, from time to time, as it deems expedient ; 
but the compulsory provisions of the Act do not apply to the 
taking of any portion of such lot or parcel not necessary for 
these purposes, (i) 

18. Any questions which may arise in case of disagreement 
as to the value of the lands to be acquired, or the damages 
which may be caused by the exercise of the powers of the rail- 
way with regard to any lands, are settled in the following manner : 

19. The railway company serves a notice upon the inter- 
ested party, which must contain a description of the lands to 
be taken, or the powers intended to be exercised by the railway 
with regard to the lands (describing the lands with regard to 
which such powers are to be exercised), and a statement of the 
amount which the company is ready to pay as compensation for 
such lands, or for such damages, and the name of a person to 
be appointed as arbitrator (2) of the company, if the offer is not 
accepted. (3) This notice must be accompanied by the certifi- 
cate of a sworn provincial land surveyor or engineer. The sur- 
veyor or engineer, as the case may be, must be a disinterested 
person, and not the arbitrator named in the notice. 

This certificate, signed by the surveyor or engineer, must state 
that the land is required by the railway, or within the limits of 
deviation allowed by the Act ; that he knows the land in ques- 
tion or the amount of damage likely to arise from the exercise of 
the powers ; and that the amount offered by the company is, in 
his opinion, a fair compensation for the land and for the damages. 
(4) This notice, accompanied by the certificate, is served upon 
the party, either personally or at his domicile. If he is absent 
from the county or district in which the lands are situated, or is 



(1) Sec. 115. 

(2) A railway company, in serving an expropriation notice, is merely 
bound to give the name of their arbitrator, without any indication as to his 
residence or occupation. A. & N. W. Ry. Co. v. Dunn, 10 L. N. 26. 

(3) Sec. 146. (4) Sec. 147. 



EMINENT DOMAIN. 147 

unknown, or cannot be found, the company applies to a judge, (i) 
producing the certificate and affidavit of ?ome officer of the com- 
pany, establishing that the peison is absent, or after diligent 
inquiry cannot be found, or that it cannot be ascertained who 
the owner is, and thereupon the judge may order a notice to be 
inserted three times during the course of one month in a news- 
paper published in the district or county in which the land is 
situated, or if there is no newspaper published there, in one 
published in some adjacent district or county. (2) 

The notice having thus been served, either personally or by 
advertisement, the opposite party is bound to give notice to the 
company as to whether he accepts or refuses the offer, and if he 
refuses, he must give the name of his arbitrator; he must do so' 
within ten days of the service on him of the notice, or within one 
month after the publication of the advertisement; and if he does 
'not do so within that delay, the company may apply to a judge, 
who shall upon such application appoint some person to be sole 
arbitrator for fixing the compensation. (3) If, on the other hand, 
the proprietor, or opposite party, as he is called in the Act, 
names his arbitrator, then the company's arbitrator and the pro- 
prietor's arbitrator (as we shall call him hereafter) agree upon a 
third ; and if they cannot agree, the judge, on application of 
either party, after six clear days' notice, appoints a third arbitra- 
tor. (4) 

/JO. These three arbitrators are thus chosen for the purpose Arbitrators, 
of fixing the indemnity, or compensation, as it is called by the 
Act, to the proprietor of the lands taken or damaged by the 
railway. (5) 

It is provided by article 407 of the Civil Code of Quebec that 
no one can be compelled to give up his property, except for 
public utility and in consideration of a just indemnity previously 
paid. This principle will be found underlying the constitution 
of most civilized States, and is one which is fundamental to the 
liberty of the subject. In this country, where the Legislature is 
supreme, and is not shackled in the exercise of its will in such 
matters by any provisions of a written constitution, as in most 



(i) Sec. 148. (2) Sec. 149. (3) Sec. 150. 

(4) Sec. 151. (5) Sec. 152. 



148 THE RAILWAY LAW OF CANADA. 

of the United States, yet, while great powers of eminent domain 
have been given to Railway Companies over the property of pri- 
vate individuals, ample provision has been made for their being 
fully compensated for all loss which they may suffer by the exer- 
cise of such powers, (i) And the Act provides the means, 
through arbitration, by which this compensation is to be ascer- 
tained and determined. It remains to be considered how this 
compensation is to be arrived at, and what kind of damages may 
be assessed by the arbitrators, and what persons are entitled to 
recover compensation under the Act. 

The three arbitrators, or the sole arbitrator, if a sole arbitrator 
has been appointed under the Act, must be sworn before a Jus- 
tice of the Peace, to faithfully and impartially discharge their 
duties; and proceed to ascertain such compensation in such way 
as they, or he, or a majority of them shall deem best. (2) Thus 
a large discretion is given to the arbitrators as to the manner in 
which they shall ascertain the compensation. 

First Meeting. 21. At their first meeting, the arbitrators, or a majority of 
them, are required by the Act to fix a day on or before which 
the award shall be made, and it is provided that if the award is 
not made on or before the day so fixed, or some other day to 
which the time for making it has been prolonged, either by con- 
sent of the parties or by resolution of the arbitrators, then the 
amount offered by the company by their notice of expropriation 
shall be the compensation to be paid. (3) 



(1) Sec. 92. 

(2) Sec. 152. In Lower Canada, notaries have power to receive the re- 
poit of arbitiators to give certified copies of the oath of arbitrators annexed 
thereto, and such power is specially recognized as belonging to them by 
the Statutes 2 Will. IV. cap. 58, and 13 and 14 Vic., cap. 114 (S.C. judgt. 
repotted 4 L. C. R. 189, Reverted). Roy and The Champlain & St. 
Lawrence Ry. Co.,6L.C.R. 277 (Q. B. 1856). 

(3) Sec. 156. 

An award of arbitrators and amiable co>positeurs, not signified on the 
parlies interested until after the delay limited by the agreement for the render- 
ing of the award, is null and void, notwithstanding s-uch award may have 
been rendered within the prescribed time. Chapman v. Hodson, 9 L. C. J. 
112, S. C. 1864. 

That in consequence of default of service of an award within the delay 
fixed by law and by the terms of the compromise, the award was absolutely 
null and of no effect. Blanchet v. Charron, 4 L. C. J. 8 (Q. B. 1842). 

Arbitrators must not only hear the parties, but must decide the matter in 
dispute before the expiration of the rule of reference ; their proceedings are 



EMINENT DOMAIN. 149 

22. The arbitrators must examine on oath or solemn affirma- Examination 
tion, the parties, or such witnesses as may appear before them, of witnesses 
They have power, to administer the oath or affirmation them- 

otherwise void. Gilley v. Miller, i Step. Dig., p. 104, 765, i Rev. de L. 
510. 

Where the parties through their respective attorneys consent to extend the 
time for making an award under a rule of reference, such consent does not 
operate as a new submission, but is an enlargement of the lime under the rule 
and a continuation of the extended period of the authority of the arbitrators, 
and therefore an award made within an extended period is an award made 
under the rule, and is valid and binding. Oaks v. The City of Halifax, 4 S. 
C. R. 64.0, Cass. Dig. 34 (New Edit.;. 

According to the Act 43-44 Que., cap. 43, sec. 9, 22, " a majority of the 
aibitrators at the first meeting after their app>mtment, or the sole arbitrator, 
shall fix a day on or before which the award shall be made. An omission 
to do so will render the award null and void. N. S. Ry Co. v. Beaudet et 
al., ii Q. L. R. 239 et 241, Q. B. 

(N. B. This jadgment was taken to the Supreme Court, where the award 
was upheld, but on a different point ; the question of fixing a day at the first 
meeting does not appear to have been discussed by the Supreme Court. Vide 
II L. N. 35; 15 S. C. R. 44.) 

The Railway Act does not require that the award should show on its face 
that a day has been fixed on or before which the award had to be made, or 
that it was made within the time so fixed ; it is sufficient that it should be 
proved that as a matter of fact such time was fixed and that the award was 
made within the delay. Benning v. The A. & N. W. Ry. Co., M. L. R., 5 
S. C. 136. Affirmed in appeal M. L. R., 6 Q. B. 385, and Supreme Court, 20 
S. C. R. 177. 

Under Ry. Act 1879, 42 Vic., cap. 9, where the arbitrators appointed to 
fix the compensation for a property adjourned to a day subsequent to that 
originally fixed for making the award, without stating in their minutes that 
such adjournment was for the purpose of making an award, and at their sub- 
sequent meeting the three arbitrators and counsel for the parties were present, 
and no objection was made to the regularity of the meeting, such absence of 
objection was held to constitute a tacit ratification of the proceedings up to 
that time. O. & Q. Ry. Co. v. Cure, etc., de St. Anne, M. L. R., 7 Q. 
B. 1 10. 

Cause referred at nisi flri/is, and verdict taken for plaintiff subject to a refer- 
ence, award to be made by a certain day, with power to the arbitrators to 
enlarge the time; they did enlarge it once, but no award was made, and after 
that day was passed, defendant's attorney was asked by plaintiff's attorney 
to consent to a further enlargement, and declined, no application had been 
made to the arbitrators. The Court held they could do nothing more than 
set aside the verdict. Moulson v. Eyre, 5 U. C. Q. B. 470. 

A cause was referred, the award to be made before ist July, with leave to 
the arbitrator to enlarge, but no verdict was taken. He enlarged until 
August 2nd, and after hearing the evidence he adjourned to the 4th, to enable 
defendants to procure their witnesses. 

Neither party attended again, or took any steps to procure a further en- 
largement, and plaintiff gave notice of trial. Defendants pleaded that the order 
of reference was yet in force, but the plaintiff went on and took a verdict, de- 
fendants not appealing. 

Held, that defendants, if they desired the reference to continue, should have 
applied for an enlargement before the verdict, and that by omitting to do so 
they had waived their right ; but under the circumstances the verdict was set 



150 THE RAILWAY LAW OF CANADA. 

selves, (i) It will be observed here, that the Act does not give 

aside without costs upon affidavit of merits. Miller v. Hogg, 2 P. R. 
(Ont ) 299. 

Where a submission is that an award shall be delivered by a certain day, if 
it be ready for delivery by that day it is sufficient. Galbraith v. Walker, E. T., 
2 Viet. Ont Digest, p. 138. 

After expiration of the time limited, arbitrators cannot, without (even if they 
can with) the consent and concurrence of both parties to the submission, 
make a binding award. Ruthven v. Ruthven, 8 U. C. Q. B. 12. 

A verbal consent to an enlargement of the time for making an award is 
sufficient under C. L. P. Act, 171. Jones v. Pientice, 2 Can. L. J. N. S. 
205. 

When there has been an agreement between two parties giving power to 
a third, within a certain time, an award on a matter of difference between 
them, if the award is not made within the specified time, but one of the parties 
not knowing that fact takes it up and pays the charge for it, his doing so will 
not amount to a waiver of the condition as to time, contained in the agree- 
ment. 

Quaere, whether taking up an award known to have been made after the 
limited time would amount to an admission that the arbitrators' authority had 
not expired. Earl of Darnlcy v. London, Chatham & Dover Ry. Co., L. 
R., 2 H. L. 43. 

(i) Sec. 155. 

An award is not null because the witnesses have not been legally sworn. 
Tremblay v Tremblay, 3 L. C. R. 482 (S. C. 185;). 

In an action brought upon an award of arbitrators, the defendant may 
contest the validity of the report which does not set forth that the witnesses 
were heard, by alleging that the arbitrators refused to hear the witnesses, and 
such defendant will be allowed to prove such refusal. Ostell & Joseph, 9 
L. C. R. 440, Q. B. (1857). 

An award of arbitrators under a rule of Court will not be set aside on a 
motion (supported by the affidavit of the defendant), on the ground that the 
award was not accompanied by satisfactory evidence that the trustees or their 
witnesses were legally sworn ; it appearing that the oath was administered 
to the parties and their witnesses by one of the arbitrators. Daly v. Cun- 
ningham, 6 L. C. J- 242, S. C. 1862. 

A report of arbitrators will be set aside and annulled on motion, when it 
appears that a material witness gave evidence before the arbitrators without 
having been legallj sworn. U'Connell v. Frigon, 9 L. C. J. 173 (S. C. 
1865). 

An award that does not state that the parties had been heard before the 
sole arbitrator, or had an opportunity to urge their respective pretentions, was 
held to be defective, and was rejected on motion. Farmer v. McNeil, I 
L. N. 220 ; 22 L. C. J. 76, 1878. 

Where arbitrators appointed to value a property proceeded upon an 
erroneous basis in law, and refused to admit the best evidence of value, an 
interested paity may obtain a writ of -mandamus against the arbitrators to 
compel them to admit the evidence. Jones v. Laurent, 8 L. N. 341 ; M. L. 
R., i S. C. 438, 1885. 

See S. E. Ky. Co. z>. Gouvrement, 15 R. L. 258 (Q B. 1887). 

The fact that the arbitrators and the witnesses were sworn may lie estab- 
lished by the declaration in the award itself, setting forth that they were 
sworn, more particularly where no objection was made at the time by the 
arbitrator who represented the patty objecting to the validity of the award. 
Mills r. The A. & N. W. Ry. Co., M. L. R., 4 S. C. 303. 



EMINENT DOMAIN. 151 

any power to arbitrators, or to the parties, to summon witnesses 
or to compel witnesses to attend before the arbitrators ; it is 
only those witnesses who voluntarily appear before them whom 
they must examine. 

The evidence of the witnesses is required to be taken in 
writing as depositions, and the arbitrators are required, on 
the request of either party, to transmit the depositions of 
the witnesses, with all papers and exhibits referred to and 
connected with the proceedings, except the award itself, to the 
clerk of the court, (i) Under the Quebec Act, and under the 
Railway Act anterior to the one now in force, there was no such 
provision as this ; it was not required that the evidence of wit- 
nesses should be taken in writing, nor that the arbitrators should 
transmit any papers or notes of evidence to the court. 

There may be a seeming contradiction between the provisions 
of section 152, giving the arbitrators power to ascertain the 
compensation in such way as they may deem best, and those of 
155, which require them to examine the parties and witnesses 
under oath. The language of section 152, so far as referred to, 
is identical with the language of the corresponding section in the 
Act preceding the one now in force, and in adding section 155, 
which was put in for the purpose of bringing before the court, 
upon an appeal from the award, the evidence taken, the effect of 
the two sections was apparently not considered ; but we must 
construe them to mean that while the arbitrators must take the 
evidence of the parties, if offered, and the evidence of any wit- 
nesses produced before them, they shall, with the assistance of 
such evidence, ascertain the compensation as they may deem 
best. 

23. It is provided by section 152 that the award of the arbi- Award final 
trators, or the majority of them, shall be final and conclusive, 

except as afterwards provided. 

24. This refers to the provisions of section 1 6 1, which gives Appeal from 
an appeal, upon any question of law or fact, to the Superior award. 
Court, with the proviso that this right of appeal shall not affect 

the existing law or practice in any Province as to setting aside 
awards. The questions touching this appeal and the setting 
aside of awards will be considered later. (2) 

(i) Sec. 155, ss. 2. (2) Post. p. 202. 



'52 



THE RAILWAY LAW OF CANADA. 



Arbitrators 
must act at 
meeting. 



Vacancy 

among 

arbitrators. 



Disqualifica- 
tion of 
arbitrators. 



25. The award of the arbitrators cannot be made, nor can 
any official act be done by a majority, except at a meeting of 
which each of the arbitrators has received at least two clear days' 
notice, or to which some meeting at which the absent arbitrator 
had been present had been adjourned. No notice is required 
by the Act to be given to either of the parties of any meeting of 
the arbitrators; the notice to the arbitrators appointed by the 
party is held to be sufficient, (i) 

20. If any vacancy should occur amongst the arbitrators 
named by the parties before the award is rendered, by reason of 
the death of either of them, or by reason of one of them refusing 
or failing to act, within a reasonable time, another arbitrator 
may be appointed by either of the parties in place of his 
arbitrator; (2) or if it is the office of the sole arbitrator or 
the third arbitrator which is rendered vacant, by the above 
mentioned causes, or through disqualification, his place is 
supplied either by agreement between the two arbitrators as to a 
third arbitrator, or by a person named by the judge, as provided 
in the case of original appointment. And no recommencement 
or repetition of the previous proceedings is required. (3) It has 
been held, under this section, that the judge has no power to 
appoint an arbitrator for either party, or to replace the arbitra- 
tor of either party who has resigned. (4) 

27. As to the disqualification of arbitrators, it is provided by 
section 159, that the person named as valuator or sole arbitrator 
shall not be disqualified, unless he is personally interested in the 
amount of the compensation, even though he is professionally 
employed by either party, has previously expressed an opinion 
as to the amount of the compensation, or even though he is 
related to the proprietor or to any shareholder in the com- 
pany. And it has been held that the fact that the third 
arbitrator represented the company, after the award in other 
similar proceedings, forms no legal ground of disqualification. 
(5) No objection to the sole arbitrator, or to the third 
arbitrator appointed by a judge, can be made after his ap- 



(I) Sec. 152. (2) Sec. 157. (3) Ibid. 

(4) Ont. & Que. Ry. Co. v. Latour, M.L.R..4S.C. 84 (S.C. Que. 

(5) Benning z/. A. & N.W. Ry. Co., M.L.R., 5 S.C. 136 & 6 Q.B. 385. 



EMINKNT DOMAIN. 153 

pointment; and any cause of disqualification must be urged 
"before the judge at the time of the application for appointment, 
and the question is there and then decided summarily by the 
judge, (i) Should the disqualification be pronounced, another 
person may be appointed by a judge upon application of either 
party. (2) As to the arbitrators appointed by the parties, any 
cause of disqualification must be urged before the appointment 
of the third arbitrator ; and the judge determines the question 
summarily on the application of either party after two days' 
notice to the other. (3) This section does not provide what 
shall or shall not be valid grounds of disqualification of an arbi- 
trator appointed by the parties, as sec. 159 does in the case of an 
arbitrator appointed by the judge. But the provisions of that sec- 
tion should a fortiori apply. It has been held that the rendering 
of services, as a notary, to one of the parties would not disqua- 
lify such notary from acting as arbitrator for such party ; (4) 
and in the Supreme Court, that, as the evidence showed that the 
arbitrator was not in the continuous employ of the parties expro- 
priated, but merely acted for them, from time to time, in his 
professional capacity as a notary, and not in any other capacity, 
he was not disqualified. (5) 

The party expropriated cannot object to the arbitrator named 
by the company, on the ground of his relationship to the sur- 
veyor whose certificate accompanied the offer made by the 
company, nor on the ground of alleged inexperience. (6) 

In case of the disqualification of an arbitrator appointed by 
either party, the party who proposed the disqualified arbitrator 
shall be held not to have appointed an arbitrator, (7) and the 
consequence would appear to be that the arbitration should be 
proceeded with by a sole arbitrator appointed by the judge on the 
application of the company. (8) The Act might be clearer on 
this point ; but there is certainly no provision for the appoint- 
ment by the party of an arbitrator to replace one disqualified, the 

(i) Sec. 159. (2) Sec 157. (3) Sec. 160. 

(4) The North Shore Ry. Co. v. Les L'rsulines de Quebec, Ramsay's 
Digest 60 (Q. B. Que. 1884). 

(5) Cassels Dig., p ^6 (S C. of C., 5th March, 1885). 

(6) Benning v. A. & N. W. Ry. Co., M L. R., 5 S. C. 136. and 6 Q. 
B. 385. 

(7) Sec. 160. (8) Sec- 150. 



THE RAILWAY LAW OF CANADA. 



Arbitrators, 
how to be 
guided in 
making 
valuations. 



Increased 
value to 
remainder of 
land. 



only provision for thus filling a vacancy being in the case of the 
death or failure to act of one or other of the arbitrators named 
by the parties, (i) 

28. We shall now consider on what grounds as to compen- 
sation the arbitrators are to base their award. 

The arbitrators, in fixing the compensation to be paid to a pro- 
prietor any part of whose land has been taken by the company,. 
are bound to consider both the value of the land taken and the 
damages which may be caused to the remainder of the property 
by the exercise of the powers of the railway. (2) 

29. They are bound to take into consideration the increased 
value that may be given to the remainder of any land, a portion 
of which is taken by the road, by reason of the passage of the 
railway through or over the same, or of the construction of the 
railway, and are bound to set off this increased value, if any,. 
against any inconvenience, loss or damage that may be sustained 
by reason of the company taking possession of and using the pro- 
perty. (3) This provision of the Act would appear at first sight 
to be almost a contradiction in terms, for if loss or damage is sus- 
tained on account of the company using a portion of the property, 
it is hard to see how the remainder so damaged could be 
increased in value; but the intention of the Act is to provide for 
a case where, though the proprietor may suffer a certain amount 
of inconvenience and loss, for instance by the severance of one 
portion of his farm from another, yet the remainder of his land 
may be increased in actual market value by reason of the railway 
being constructed there. In such a case the increased value is 
set off against the loss and inconvenience. 

(1) Sec. 157. 

(2) Sees. 144, 146, 152. The amount awarded for the right of way for a 
railway company is compensation under sees. 146, 147, 152 of The Railway 
Act, 51 Vic., cap. 29, not only for the land taken by the railway, but also for 
the damages likely to be occasioned to the proprietor during the construction 
of the railway. Evans v. A. & N. W. Ry. Co., M. L. R., 6 S.C. 493. Rail- 
way companies have the right under The Railway Act to fell and remove 
trees which stand within six rods of the railway, and the damage which may 
result from the exercise of this right forms pait of the damages to be covered 
by the compensation awarded to the person whose land is expropriated, and 
he has no action to recover any additional amount for the value of trees within 
this limit which maybe cut down and removed by the lailway company. 



(3) Stc - 



EMINENT DOMAIN. 155 

It has been held in the United States that this increase in 
value must be a special benefit or increase peculiar to the prop- 
erty in question, and not a general increase in value common to- 
all the properties in the neighborhood, (i) It is often the 
case that the construction of a railway in a particular locality 
will increase the value of land generally within a certain radius, 
and this increase, it has been held, cannot be set off against 
the loss or damage caused to the property of any particular 
proprietor ; (2) but, under the language of our Act, it would 
seem as if such increase in value could be set off and must 
be set off by the arbitrators. The language is general, cover- 
ing all increase in value that may be given to any lands- 
through or over which the railway will pass, by reason of the pas- 
sage of the railway, or by reason of the construction of the rail- 
way. Of course, particular properties might be especially bene- 
fited or increased in value by the construction of the railway, 
that is, by the works in connection with its building, which might 
have a beneficial effect upon the property; as, for instance, giving 
the land better drainage; but the passage of the railway could 
not benefit one particular property without benefiting and 
increasing in value those in its immediate neighborhood, in a 
greater or less proportion; and, therefore, under the language of 
the Act, which requires the arbitrators to set off the increased 
value caused by the passage of the railway, it appears to be 
impossible to say that they must not take into consideration a 
general increase of value benefiting properties in general in the 
vicinity of the road. It would indeed be inequitable to hold that 
while the construction and passage of a railway through or over 
a property might largely increase its value, yet the railway com- 
pany would be compelled to pay damages for the inconvenience 
caused to the proprietor, without any consideration being taken 
of the increase in value to his land. In other words, the proprie- 
tor would not only benefit by the increased value of his pro- 



(1) Lewis, Eminent Domain, # 471 ; Mills, $# 152, 153. 

(2) Ibid; and see Belts v. Williamsburgh, 15 Barb. 255 ; and as to what 
are and are not special benefits, see Shattuck v. Stoneham Branch R. R. Co., 
6 Allen (Mass.) 115 ; Pittsburgh & Lake Erie Ry. Co. v. Kobinson, 95 Pa. St. 
426 ; Washburn S- Milwaukee & L. W. R. R. Co., 59 Wis. 364 ; Minn. Cen- 
tral R. R. Co. v. Macnamara, 13 Minn. 468 ; Paine v. Woods, 108 Mass. 
160 ; Childs v. New Haven & Northampton R. R. Co., 133 Mass. 253. 



156 THE RAILWAY LAW OK CANADA. 

iperty, in common with his neighbors, whose lands were not taken, 
and who yet might suffer inconvenience from the passage of the 
railway for which they could not recover indemnity, but he 
would also receive indemnity for the particular inconvenience or 
loss which he might suffer. 

It frequently happens that while the expropriated party may 
suffer damages through the inconvenience he is put to by the 
passage of the railway through his land, yet the remainder of his 
land is increased in value, along with the properties in the vicinity, 
by the mere presence of the railway. In the case of Benning 
v. The Atlantic & North West Railway Company, (i) the 
Court of Appeals in Quebec, confirming the decision of the 
Superior Court, held that such increase of value might be taken 
into consideration and set off against the damages. 

This case was taken to the Supreme Court, where the judgment 
was confirmed. (2) In that Court, though, the point was not spe- 
cially dwelt upon ; the Court held that the arbitrators had acted 
in good faith and fairness in considering the value of the property 
before the railway passed through it and its value after the rail- 
way had been constructed, and upheld the award. 

In Ontario, one of the judges of the Court of Appeals there has 
held, in a case of James v. The Ontario & Quebec Railway 
Co., (3) that what was intended by a similar section in a pre- 
vious Act (4) is a direct and peculiar benefit accruing to the par- 
ticular land in question, and not the general benefit to all land 
owners resulting from the construction of the railway. This may 
be looked upon as an obiter dictum, it having been unne- 
cessary for the decision of the particular case; and the other 
judges refused to pass upon the point, the Chief Justice (Hagar- 
tv > C. J.) saying that the question involved the consideration of 
several decisions of Ontario Courts, and that he would prefer to 
leave it open till it should arise. (5) In a previous Ontaiiocase, 
{6) the principle had been recognized thai when the act pro- 
posed to be done gives increased value to the land, such 
increased value must be allowed. The dictum of Judge Burton 



(i) M. L. R., 6 Q. B. 385. (2) 20 S. C. R. 177. 

(3) 15 O. A. R. i. (4) R. S. C., cap. 109, sec. 8, par 2i. 

(5) 15 O. A. R. at p. 13. 

(6) In re Can. Southern Ry. Co & Noivall, 41 U. C. Q. B. 195. 



EMINENT DOMAIN. 157 

in the James case may have been influenced by the opinion 
which he seems to have held, that the increase in value might be 
set off against the value of the land taken, as well as against the 
damages, (i) This opinion could not be sustained under sec. 
153 of the present Act, which distinctly says that the increased 
value is to be set off against '' the inconvenience, loss or dam- 
age " that may be suffered. And though the same opinion is 
expressed by Mr. Lewis in his work on Eminent Domain, (2) 
it is ably combatted by Mr. Mills, (3) who says that the fairest 
rule is to set off the benefits against disadvantages, only allowing 
the owner to recover any excess of disadvantages over benefits ;. 
but not allowing the excess of benfits to reduce the claim for the 
actual value of the land and materials taken. If the increased 
value could be set off against the land taken, it would be unjust, 
as Mr. Lewis argues (4) that one person should be obliged to 
pay for general advantages by a contribution of land, while his 
neighbor, whose property is not taken, enjoys the same advan- 
tages without price. But where, as under our Act, there is no 
contribution of land, the full value of the land taken being paid 
by the railway company, (5) there could be no injustice in set- 
ting off, against the damages suffered by the proprietor, the 
increased value of the remainder of his lands, even though such 
increase in value were a general one and common to the lands in 
the neighborhood. 

This question has been considered in two cases in the Exche- 
quer Court arising under the provisions of the Government Rail- 
ways Act, 1 88 1. (6) 

Sec. 1 6 of that Act reads as follows : 

" The arbitrators shall consider the advantage as well as the dis- 
advantage of any railway, as respects the land or real estate of 
any person through which the same passes, or to which it is con- 
tiguous, or as regards any claim for compensation for damages 
caused thereby ; and the arbitrators shall, in assessing the value 
of any land or property taken for the purposes of any railway, or 
in estimating the amount of damages to be paid by the depart- 



(i) 15 O- A. R. at p. 3. (2) p. 606. 

(3) Mills' Eminent Domain, 158. (4) Lewis, 471. 

(5) Post p. 160. (6) 44 Vic., cap. 25, 



158 THE RAILWAY LAW OF CANADA. 

ment to any person, take into consideration the advantages ac- 
crued or likely to accrue to such person or his estate as well as 
the injury or damages occasioned by such work." 

Commenting on this section, Mr. Justice Burbridge, in the case 
of The Queenv. Carricre^ said : (i) " The language of this pro- 
vision is apparently large enough to include not only the special 
and direct'benents arising from the position of a property on the 
line of a railway, but also the general benefit not arising there- 
from, but from the facilities and advantages caused by the rail- 
way which affect all the estates in the neighborhood equally, and 
which are shared in common with such estates. I apprehend, 
however, that the narrower is the true construction of the provi- 
sion, and that the advantages accrued or likely to accrue should 
be limited to those which are special and direct, (2) and, in a 
case like the one under consideration, to such as arise from 
increased conveniences for carrying on business, because of the 
opportunity of connecting the property with the railway by tracks 
and sidings." And, in a subsequent case of Paint v. Ihe Queen, 
the same learned judge expressed himself as follows : (3) " It is 
not denied that the property as a whole is benefited by the con- 
struction of the railway. On this point the witnesses, speaking 
generally, agree. But it is said that the advantages accruing 
therefrom are common, at least, to all the owners of lots in the 
town of Guernsey, and therefore ought not to be considered for 
the purpose of cutting down the damages to which the claimant 
would otherwise be entitled. It is true, I think, that the enhance- 
ment in value resulting from the construction and proposed 
operation of the railway is common to all the property in the 
town, but such benefits may, nevertheless, fall within the rule as 
to special, as contra-distinguished from general, advantages. (4) 
Here, again, I think that the unity of the estate should be regard- 
ed. The claimant is the founder of the town. He still owns or 
is interested in more than two-thirds of the lots into which he has 
divided it. The Government makes it the terminus ot the Cape 
Breton Railway, and constructs, within its limits, stations, freight- 



Ci) 2 Exchq. Rep. at pp. 45-6, 

(2) Quoting Sutherland on Damages, Vol. Ill, pp. 452-3-4. 

(3) 2 Excheq. Rep. at pp. 155-6. 

(4) Sutherland on Damages, Vol. III., p. 454. 



EMINENT DOMAIN. 159 

sheds, round-houses, wharves and all the works usually found at 
a terminus. That certainly is an advantage, and I think a spe- 
cial advantage to the claimant and to the property. If the Act 
to which I have referred does not apply to such a case, it would, 
I think, be difficult to suggest a case to which it would apply." 

This last judgment was confirmed on Appeal to the Supreme 
Court, (i) 

In both these cases, it will be observed, the judge in the 
Exchequer Court allowed the set-off of advantages special to the 
property, but was of the opinion that if the advantages had been 
general (which it was held they were not) then no set-off would 
be allowed. This latter opinion, which was hardly necessary for 
the decision of the ca?e as the set-off was allowed, would be sup- 
portable on the argument of Mr. Lewis above referred to, (2) 
inasmuch as the section of the Act cited appears to contem- 
plate the set-off of advantages against the value of the land, and 
therefore the party expropriated would be in the position of 
paying for these advantages by a contribution of land. For 
the arbitrators are directed, in assessing " the value of the land " 
or the damages to be paid, to take into consideration the advan- 
tages accrued, or likely to accrue, as well as the injury or damage. 
However, the learned judge in the Exchequer Court seems to 
have construed this clause, (3) as allowing a set-off only against 
damages. If this construction be correct and applicable to the 
Railway Act, then these decisions conflict with that of JBenningv. 
The A. & N. W. Ry. Co. (4) already referred to. 

In view of these conflicting decisions, and until we have a final 
holding by the Supreme Court, the true interpretation to be 
placed upon this section of The Railway Act may be said to be 
doubtful. 

In the event of its being allowed, the increased value must be 
set off against any damage which may be caused to the property, 
and not against the value of the land. (5) For instance, should 
the arbitrators find there was no damage, loss or inconvenience 
to the property caused by the railway, and that the proprietor 



(i) 18 S. C. R. 718^ (2) Supra p. 157. 

(3) 2 Exchq. Rep. at p. 47 and at pp. 155-6. 

(4) M. L. R., 6 Q. B. 385 ; 20 S. C. R. 177. 

(5) Sec. 153, and see Mills Eminent Domain, 158. 



160 THE RAILWAY LAW OK CANADA. 

was only entitled to the actual value of the land taken, they 
would not be justified in setting off any increase in value in the 
remainder of the land against the value fixed for the land taken 
itself. It has been authoritatively held, that the true method of 
fixing the compensation is to take the value of the whole pro- 
perty as it was at the time of the deposit of the plan, for that is 
the date with reference to which the compensation is to be fixed, 
and ascertain the value of the remainder of the land, after the 
passage of the railway, and the difference is the compensation to 
be paid to the proprietor, (i) This seems to be an eminently 
fair and equitable method of ascertaining the compensation, and 
immediately does away with the many difficult questions which 
have arisen as to the different grounds of damage which may be 
considered by the arbitrators in fixing the compensation. 

Take the instance of a farm of 100 acres. If the arbitrator? 
can fairly say that this farm was worth $10,000 at the time of the 
deposit of the plan, and that, the railway company having taken 
two acres in superficies out of it, the remainder is only worth 
$9,400, they at once arrive at a fair compensation to the proprie- 
tor, by taking the difference of $600, or whatever difference they 
may find to exist in the value of the farm. This principle, how- 
ever, is subject to one qualification, namely, that they must 
always pay the proprietor the actual value of the land taken. (2) 
It might happen that the construction of the railway would in- 
crease the value of the remainder of the propeity, even to such an 
extent that the remaining portion would be worth more than the 
whole property as it originally stood, yet the arbitrators must 
award the proprietor the full value of the piece of land taken,but 
in such a case they would not be authorized to give him anything 
for damages resulting from inconvenience, etc. If this rule, with 
the qualification mentioned, were generally adopted, it would 
avoid the difficulty under section 153 as to the setting off of the 
increased value ; for the arbitrators would simply look at the 
difference in value between the whole property as it originally 
stood, and the remainder of it after being mutilated by the rail- 
way company. (3) 

(i) Benning v. A. & N. W. Ry. Co., 20 S. C- R. 177 ; The Queen v. 
Carrier, 2 Exch. Rep. at pp. 44-45; Ont. & Que. Ry. Co. v. Taylor, 6. 
O. R. 348 ; James v. O. & Q. Ry. Co., 12 O. R. 624 ; 15 Ont. A. R. I ; Par- 
adise. The Queen, I Exch. Rep. , per Taschereau J., at pp. 222-23. 

(2) Supra, p. 157. (3) O. & Q. Ry. Co. o. Taylor, 6 O. R. at p. 348. 



EMINENT DOMAIN. 161 

In England there is no provision in the Imperial Acts similar 
to that contained in sec. 153 of our Act, nor any provision 
allowing benefits or advantages to be set-off against the value of 
the land or damages. In the case of Senior v. The Metropolitan 
Railway, (i) such a set off was claimed, but refused by the court, 
on the ground that the value of the land must be paid for, irres- 
pective of any benefit that might accrue to the remainder by the 
construction of the railway. It was thus put by Wilde B. : (2) 
" I desire to protest against the idea that in assessing compen- 
" sation a railway company can claim a set-off by reason of a 
" benefit their works may have done the neighborhood. No 
" doubt a railway does improve a neighborhood, and everybody 
" is entitled to the advantage of that improvement ; but if any 
" individual has a portion of his land taken, he is entitled to be 
" paid for it." This is in accord with the principle above stated, 
that in any event the value of the land taken must be paid ; but 
is not applicable to a case where it is sought to set off the en- 
hanced value of the remaining land against damages under our 
Act. 

3O. In arriving at their award, the arbitrators have the right Lands 
to take into consideration, in the language of the Act, " the in- 
" convenience, loss or damage that may be suffered or sustained the construe- 
" by reason of the company taking possession of or using tbe 
" lands." (3) 

In England, statutory compensation is given to the owner 
of lands "injuriously affected by the construction of the rail- 
way," to use the language of the English Act. (4) And it 
has bee.i held by the Privy Council, in The Corporation of Park 
dale v. West, (5) that the Consolidated Ry. Act of 1879 places 



(I) 32 L. J. Ex. (N. S.)225- (2) Ibid. at p. 230. 

(3) Sec. 153. (4) 8 Vic., Cap. 20, sees. 6 and 16. 

(5) 12 App. Cas. 602. 

By 46 Vic., ch. 45, provision was made for the construction of a subway 
as a means of crossing certain railways entering Toronto, part of which had 
to be constructed within the city, and within the municipality of Parkdale ; 
the city and village could not agree upon terms, so the latter united with 
the railways in obtaining an order-in -council under 46 Vic., cap. 24, author- 
izing the companies to execute the work, and by agreement the village 
authorities agreed to do the work for the railway company. 

In an action against the village by proprietors in the city and village on 

II 



162 THE RAILWAY LAW OF CANADA. 

on the same footing, as far as expropriation proceedings are con- 
cerned, the taking of land and the interference with rights over 
land ; and includes provisions for compensation in respect of land 
injuriously affected though not actually taken ; and that the pay- 
ment of compensation by the railway company is a condition pre- 
cedent to its right of interfering with the possession of land or 
the rights of individuals. This case was followed by that of Pion 
v. The N. S. Ry. Co., (i) where, under the Quebec Railway Act 
of 1880, the Privy Council held that an owner of land which is 



account of damage caused to their properties by the mode of executing the 
work, whereby their access to a street was interfered with ; 

Held, reversing judgment of Court below, that the work was not done by 
the municipality under the special Act, nor merely as agent of the railway 
companies, and the municipality was liable as a wrongdoer. West v. The 
Corporation of the Village of Parkdale, 12 S.C.R. 250. 

In the Privy Council : 

Held, that an order of the railway committee under sec. 4 of the Domi- 
nion Act, 46 Vic., cap. 24, does not of itself, and apart from the provisions of 
law thereby made applicable to the case of land required for the proper car- 
rying out of the requirements of the railway committee, authorize or em- 
power the railway company on whom the order is made, to take any person's 
land, or to interfere with any person's right. 

Held, that such provisions of law include all the provisions contained in 
the Consolidated Railway Act, 1879, under the headings of " Plans and Sur- 
veys,'' and " Lands and their Valuation," which are applicable to the case ; 
the taking of land and the inteiference with rights over land being placed 
on the same footing in that Act. 

Where a railway company, acting under an order of the railway commit- 
tee, did not deposit a plan or book of reference relating to the alterations 
required by such order. 

Held, that it was not entitled to commence operations. 

Held, further, that under the Act of 1879, the payment of compensation 
by the railway company is a condition precedent to its right of interfering 
with the possession of land or the rights of individuals. 

(Distinguishing Jones v. Stanstead Ry. Co., L. R., 4 P.C. 98) Corp. 
of Parkdale v. West, 12 App. Cas. 602. 



(i) 12 L.N. 395 ; 14 App. Cas. 612. 

Held, that a railway company, authorized by Parliament to construct its 
line along the bank of a navigable river, is not liable in damage to neighbor- 
ing proprietors, whose access to the river has thus been cut off. North Shore 
Ry. Co. v. Pion, 4 Dorion Q. B. R. 358 ; 9 L. N. 218 ; 12 Q, L. R. 205, 
Q.B. 

But Held, by Supreme Court (reversing), that a riparian proprietor and 
owner on a navigable river is entitled to damages against a railway company, 
although no land is taken from him, for the obstruction and interrupted 
access between his property and the navigable waters of the river, viz/, for 
the injury and diminution in value thereby occasioned to his property ; and 
that the railway company in the present case, not having complied with 
the provisions of 43-44 Vic., cap. 43, sec. 7, 3 and 5, Que., the appellant's 



EMINENT DOMAIN. 163 

injuriously affected by the construction of the railway is entitled 
to statutory compensation ; and in default of the company pro- 
ceeding, in the manner provided by the Act, to have the damage 

remedy by action at law was admissible. Pion v. North Shore Railway 
Co., 14 S.C.R. 677. 

And Held, by the Privy Council, that the respondents, as riparian pro- 
prietors, had the same rights of acces et sortie as they would have had if the 
river had not been navigable ; that the obstruction to such rights without 
parliamentary authority was an actionable wrong, but the substituted open- 
ings were no answer to a claim for indemnity; there is no distinc-ion in 
principle between riparian rights on the banks of navigable or tidal rivers 
and on those non navigable. In the former case, however, there must be no 
interference with the public right of navigation, and in order to give rise to 
riparian rights the land must be in actual daily contact with the stream 
laterally or vertically. Lyon v. Fishmongers Co., followed, i Appeal Cas. 
662, and held applicable to every country in which the same general law 
of riparian rights prevails unless excluded by some positive general rule 
or binding authority of the lex loci. 

Held, that under the Quebec Consolidation Railway Act, 1880, sec. 9, no 
authority is given to a railway company to exercise its powers in construct- 
ing its works, in such a manner as to inflict substantial damage upon land 
not taken without compensation. 

Held, further, that as the appellants had not taken the necessary steps 
under the Act of 1880, to vest in them the power to exercise the right or do 
the things for which compensation would have been due under the Act, an 
action by the respondent would lie for damages, and the removal of the ob- 
struction ; in which if the obstruction were not ordered to be removed, 
damages as for a permanent injury to the land could be recovered. North 
Shore Ry. Co. v. Pion, L.R., 14 App. Cas. 612. 

Damage to rights of house owners, such as droit cT acces to streets, does 
not constitute expropriation and gives no right to preliminary indemnity. 
In France, the depreciation caused to a house by stopping one end of the 
street on which it fronts is not an interference with a servitude ; nor stand- 
ing alone such direct and immediate damage as will give title to indemnity ; 
and semble, the law of the Province of Quebec is identical. Mayor of Mont- 
real & Drummond, 22 L.C.J. I, Q.B. ; L.R., I App. Cas. 384 ; Ramsay's 
Digest 1004. 

The lands in question were lots 3, 4 and 6 Clinton avenue, in the town of 
Niagara Falls. The defendants had taken, for the purposes of their railway, 
a small part of lot 3, and the plaintiff claimed damages for the injury caused 
to that lot and lots 4 and 6, by lowering the street in front of these lots, so 
as to enable the railway to be carried over the highway, and which was 
done in such a manner as to obstruct the plaintiff's access to his land. 

Held, affirming the judgment of the Court below : I. That upon the evi- 
dence the sum paid for the part of lot No. 3 actually taken included any 
damage to that lot but not to lots Nos. 4 and 6. 

2. l hat the claim as to lots 4 and 6 was in respect of land injuriously 
affected by the exercise of the powers of the railway company within the 
meaning of the Con. Ry. Act, 1879, sec. 9, 10 and 12 D. 

Held, that under that Act or under the Con. Stat. of Can., cap. 66, as ap- 
plied to these defendants by their special Act, compensation was recover- 
able. 

Held, also, that there was nothing to exonerate the defendants in the 
fact that they had obtained leave from the municipality for doing as they 



1 64 THE RAILWAY LAW OF CANADA. 

assessed, he may claim it by action. In both these cases it is to 



had done, and that the Court could compel an arbitration to which the 
plaintiff was entitled under the Act. Eowen v. Can. Southern Ry. Co., 14 
O. A. R. i. 

To maintain an action of damages against a railway company, because of 
the running of the railway over a highway adjoining plaintiff's residence, and, 
as alleged, obstructing his ingress and egress, it is necessary for the plaintiff to 
prove that the immediate access to the premisfs was affected, and that he 
sustained damage particular to himself, and differing in kind from, and beyond 
that of, the rest of the public. 

That the municipal authorities, having tolerated the laying and using of the 
railway as a public highway in the municipality, may be thereby estopped from 
urging that the use of the same was unauthorized by them. Brodeur r. The 
Corporation of Roxton Falls and The S.E. Ry. Co., n R L. 447 (1882). 

Where appellant, the owner of several houses bordering on a street, thiough 
which a railway was authorized to pass both by statute and by resolution of 
the city council, sued the corporation for damages suffered on account of the 
construction and working of the railway ; it was held that the appellant had 
no right of action against the corporation, for if the corporation gave the 
authorization in compliance with the statute, there was complete justification 
of the Acts complained of ; the corporation, moreover, only gave the company 
liberty to choose one of the streels, and although the council were subsequently 
informed of the choice made, and asked to take steps to legalize the line, they 
took no further action. 

The recourse of the appellant, if any be had, was not against the corpora 
ticn but against the owners of the railway. Lefebvre v. The City of Quebec, 
Supreme Court, Cassel's Digest \Tj (New Edit.). 

Where the Legislature had granted a corporation leave to construct a 
bridge over a river in the Province of Quebec, it was held, that in order to 
recover damages for such construction it is necessary to prove that it obstruct- 
ed the riparian proprietor's free ingress and egress to the liver, and that in 
respect of obstruction to navigation, actual and special damage must be 
proved. Bell v. Corporation of Quebec, L. R., 5 App.Cas.84, 7 Q.L.R. 103. 
Privy Council. 

The privilege of erecting a toll bridge over a river does not confer any right 
of property in the waters of that river, which are part of the public domain. 

The proprietor of such a bridge cannot demand the demolition of works 
erected upon a public river under authority of law, such as a bridge built by a 
lailway company to cross passengers and carriages, even if used to convey 
them for gain or hire, contrary to a clause in his charter, his recourse being 
limited to the indemnity prescribed in his chatter, and in default of payment 
thereof, a prohibition of all transport over the railway bridge will be granted. 
Jones v. The Stanstead, etc., Ry. Co., 17 L.C. R. 81. 

But Held, by the Judicial Commit'.ee of the Privy Council, that assuming 
the plaintiff, by \irtue of his special Act, to be entitled to compensation, yet 
his action failed inasmuch as giving notice to treat for compensation was 
not a condition precedent to the company's right to exercise their powers, 
and theiefore that the company were not wrongdoers. L.R., 4 P. C. App.gS. 

Corporations in using the power conferred on them of expropriating are 
bound to use diligence, and consequently they are liable for the damages 
suffered by the expropriated proprietor by reason of unnecessary delays. 
Judah v, The City of Montreal, 2 R.C. 470, Q.B. 

Held, affirming the judgment of Gwynne, J., 43 U. C. R. 522, that when 
a municipality raises a highway in such manner as to cut off ingress and egress 
to and from property abutting thereon, the owners of such property are entitled 



EMINENT DOMAIN. 165 

be observed that the damage complained of was caused by the 

to compensation under 36 Vic., c. 48, s. 373 (Ont.). Yeomans v. The Cor- 
poration of Co. of Wellington, 4 O. A. R. 301. 

Trustees were possessed of a mill, 90 yards from an important thoroughfare 
in Glasgow, having parallel accesses on the level from two sides of the mill to 
the thoroughfare. A railway company by their special Act cut off entirely one 
access, substituting therefor a deviated road over a bridge with steep gradients, 
and the other access they diverted and made it less convenient. But none of the 
operations were carried on e\' adcerso the premises. The railway company's 
powers were contained in the 6th section of the Scotch Railway Clauses Act 
of 1845 (similar to the English Act), and which provided that " the railway 
company shall make to the owners and occ'ipiers of and all other parties in- 
terested in, any lands taken, or injuriously affected by the construction thereof, 
full compensation for the value of the lands so taken, and for all damages 
sustained by such owners, etc." 

Held, affirming the decision of the Court below, that though an agreement 
entered into between the parties when the bill was before Pa-liament, 
whereby the trustees were induced to withdraw their opposition, provided their 
claim to compenation (should their lands be injuriously affected) should not 
be barred by reason of the company not taking any of that land, gave no right 
to compensation, the trustees were entitled to it under the Railways and Lands 
Clauses Con. (Scotland) Acts 1845. Per I-rd Selbourne, L. C. The 
obstruction of access to a private property by a public road need not be ex 
adverse, but it must be proximate and not remote or indefinite to entitle the 
owner of that property to compensation for the loss of it and it is a question 
whether a mere change of gradient alone would be a proper subject for com- 
pensation. The Caledonian Railway Co.?;. Walker's Trustees, L. R., 7 A. C. 

259- 

A's predecessor in title obtained a feu contract from a superior, a build- 
ing lot situate at the south side of an estate. The plan of the estate shewed it 
divided into fcuing lots with streets running east and west, and one street 24 
feet wide connecting the turnpike road on the north to another road on the 
south, and forming one side of A's feu. The lot was disposed "together 
with free ish and entry thereto by the streets laid down on the said plan, but 
in so far only as the same may be opened and not altered in virtue of the 
reserved power after mentioned." The reserved power was that "the 
superior should have full power and liberty to vary and alter said plan or 
streets or roads thereon, in so far as regards the ground not already fenced." 

A railway company took a piece of land running fiom east to west through 
the estate, and in executing their works cut off all access for carriages by the 
street marked on the plan running from south to north 24 feet wide. 

None of A's land was taken. A claimed compensation in respect that his 
lands were injuriously affected under sec. 6 of the Railway Clauses (Scotland) 
Act 1845. 

Held, that A was not entitled to compensation, because : I, the access in 
question had not been opened in the sense meant in hii feu contract before 
the statutory notice ; and 2, there was no obligation in the feu contract cast 
upon the superior to pursue his feaing scheme and give the feuers at some 
future time access along any of the roads or streets marked on the plan. Also, 
when there is an implied obligation by the feuer to prosecute his feuing 
scheme for the benefit of the feuers, they have a vested interest de future in 
the roads and streets shewn on the feuing plan sufficient to sustain a claim 
for compensation under the Railway Clauses Consolidation (Scotland) Act 
1845. Fleming d^ Wife v. The Newport Railway Co., L. R., 8 App. Cas. 265. 

See London, Brighton & South Coast Ry. Co. v. Truman, L. R , 1 1 App. 
Cas. 45. 



1 66 THE RAILWAY LAW OF CANADA. 

construction of the work. In the one case the owner's access to 
a street was cut off, in the other his access to a river. 

In the instances cited, however, their Lordships were careful 
to confine the right to recover damages to those cases where 
lands were injuriously affected by the construction of the railway 
as distinct from its operation. That is to say, the lands, or some 
real right appertaining to the lands, must be affected by the 
actual construction of the work, such, for instance, as by the 
making of a cutting or the construction of an embankment ob- 
structing the proprietor's access and egress to and from his pro- 
perty ; (i) or by the interruption of view, or the deprivation of 
light and air and access to a building. (2) But damages resulting 
from the operation of the road would not be admitted where no 
land is taken or used and no real right affected ; such as the 
inconvenience which an adjoining proprietor might suffer from 
the noise and smoke and vibration caused by the passing of 
trains. These are inconveniences which aie necessarily conse- 
quent upon the exercise of the powers conferred upon the railway 
by Statute, and which individuals, upon whose lands or real 
rights the railway company does not encroach, must suffer in 
common with the general public, in a greater or less degree, as 
their properly may be more or less distant from the railway. (3) 
The provisions of the English Act are not so different from 
ours, but that the decision of the Courts there would have great 
weight in this country ; (4) and several decisions have been given 
there which should be specially referred to in this connection. 

In the case of Brand v. The Hammersmith Ry. Co., (5) 
it was held by the House of Lords that a proprietor, no 



(1) See cases cited in Note (i), p. 162. 

(2) Kagle v. Charing Cross Ry. Co., L. R., 2 C. P., p. 638. 

(3) R e g- v. Chester (Stcckpoit case), 33 L. J. Q. B. 251 ; Rex r. Pease, 
4 B. & Ad. 30 ; Vaugan v. TaffVale Ry. Co., 5 H. & N. 679; Brand r. 
Hammersmith Ry. Co., L. R., 4 H. L. 171 ; Lon. & Brighton Ry. Co. v. 
Truman, II A. C. 45 ; MacWillie v. North Shore Ry. Co.,M. L. R., 5 Q. B. 
per Cimon J. , at p. 130 ; Jones v. Stanstead Ry. Co., L. R., 4 P. C. App. 98; 
Muir v. Caled. Ry. Co, 17 R. 48, ser. 1026; Atty. Genl. v. Metropolitan 
Tramways Co. (C. A. 1893), 9 R. 598. 

(4) N. S. Ry. Co. v. lion, 14 App. Cas. 612, supra p. 163 ; Wood v. A. & 
N. W. Ry. Co., Q. R , 2 Q. B. at pp. 344 and 354 ; Paradis v- The Queen, I 
Exch. Rep. per Taschereau J., at p. 193 ; Trimble v. Hill, 5 App. Cas. 342 ; 
City Bank v. Barrow, 5 App. Cas. 664. 

(5) L. R., 4 H. 1 . 171 ; supra, note 3. 



EMINENT DOMAIN. 167 

part of whose land was taken for the purposes of the railway, 
could not recover statutory compensation for damage or annoy- 
ance arising from vibration, and the smoke and noise of passing 
trains, even though the value of his property had been actually 
depreciated thereby ; and that no statutory compensation 
having been provided for such damages, there was no right of 
action at common law to recover them. This principle, of course, 
would only be applied where there was no fault or negligence 
on the part 'of the company in the operation and construction of its 
railway. As has already been pointed out, where the company 
acts in the operation of its railway within the powers given to it by 
the Legislature, and without negligence, they are not liable for any 
loss or damage which they may occasion thereby to the general 
public, unless statutory compensation is expressly provided, (i) 
In the case of Jones v. The Stanstead Railway, (2) which was a 
railway constructed under 14 and 15 Vic., cap. 51 [containing a 
clause (sec. 4) corresponding to sec. 92 of the present Railway 
Act], the plaintiff claimed damages for loss of tolls on a bridge 
which he had constructed across the Richelieu River at St. Johns, 
P.Q., consequent upon the building of a bridge by the railway 
company a short distance from his own. There the Privy Coun- 
cil held that the damage sought to be recovered was too remote, 
not being " a necessary, patent, and obvious consequence of the 
construction of the work." But in the case of Fion v. The North 
Shore Railway Company, (3) already referred to, their Lordships 
said that the case of Jones v. The Stanstead Ry. Co. might 
well have been decided upon the same principle as Brand 
v. The Hammersmith Ry. Co., viz., that this was a damage 
resulting to a proprietor, no part of whose land was 
taken, because of the use of the railway under the powers given 
to the company by Parliament. In the case of The City of 
Glasgow Ry. Co. v. Hunter, (4) where a part of a proprie- 
tor's land was taken by the railway, and another section 
of the road passed in rear of the same property, over a street or 
lane, the House of Lords held that anticipated damage from the 



(1) Supra p. 1 66. 

(2) 4 P. C. Ap;>. 120 ; 8 Moore N. S. 312. 

(3) 14 App. Cas. 612. (4) L. R., 2 S. C. App. 78. 



i68 THE RAILWAY LAW OF CANADA. 

noise and smoke of the trains passing over the section of the 
railway in rear of the property would not appear to be a proper 
subject of compensation under the Statute. But in a later case 
of the Duke of Bite clench v. The Metropolitan Board of Works, 
(i) Lord ( helmsford, who had sat also in the case of The City 
of Glasgow Ry. Co. v. Hunttr, said that he saw no reason 
why compensation might not be given for actual deterior- 
ation in the value of property occasioned by the smoke, noise 
and vibration of passing trains, where a portion of the land so 
affected had been taken by the railway company ; but this was 
not a case of the taking of land by a railway company, but of 
the taking of land for the construction of the Thames embank- 
ment, and a highway thereon, by the Metropolitan Board of 
Works ; and his Lordship was not quite accurate in stating that 
in both the cases of Brand v. The Hammersmith Ry. 
Co. and The City of Glasgow Ry. Co. v. Hunter, no portion of 
the proprietor's land had been taken ; for in the latter case, 
according to the report, there was certainly a portion of the 
land taken by the railway company, though the damage com- 
plained of was not caused by the operation of the railway 
upon the part taken, but upon a section of the same road 
passing in rear of the property. However, in the case of 
Essex v. 2 he Local Board of Acton, (2) the House of Lords, in 
1889, definitively and finally decided that where part of land is 
taken, the proprietor is entitled to compensation for depreciation 
of the remaining land, caused by the use to which the land taken 
is put ; although proprietors of adjoining lands, of which no por- 
tion is taken, cannot recover. Though this was not the case of 
a railway, and though a distinction may be drawn between a 
railway and other works permitted by legislative authority, (3) 

(i) L. R., 5 II. L. 418. (2) 14 App. C. 153. 

(3) "The Railway Acts, treated as a well-known and recognized class of 
legislation, were expressly and carefully distinguished from the permissive 
character of the legislation which your Lordships were then construing 
(referring to Metropolitan District Asylum v. Hill, 6 App. Cas. 193). Broadly 
stated, the distinction taken amounted to this, that a smallpox hospital might 
be built and maintained if it could be done without creating a nuisance, 
whereas the Railway Acts were assumed to establish thj proposition that the 
railway might be made and used whether a nuisance were created or not." 
Per Lord Halsbury, L. C., in Lon. & Brighton Ry. Co. v. Truman, u App. 
Cas. at p. 53 ; and see Shelfer v. City of London Electric Light Co., 12 R.g6. 



EMINENT DOMAIN. 169 

we may take it that it is now practically settled law, that a pro- 
prietor, a portion of whose land is taken by the railway, is en- 
titled to compensation for actual deterioration in value of the 
remainder of the property caused by the operation of the rail- 
way, (i) This has now been decided by the Quebec Court of 
appeals in Wood v. A. & N. W. Ry. Co. (2) 

In that case, after a careful review of the jurisprudence in 
England, it was held that it is now the settled jurisprudence of 
the English courts that in cases where a portion of the pro- 
prietor's land has actually been taken for railway purposes, so as 
to compel or authorize the adoption of the statutory provisions 
for determination of the amount of compensation, the jury are 
authorized to take into consideration an estimation of damages 
or depreciation resulting from the use of the railway as distin- 
guished from its construction. And Hall J., in rendeiing the 
judgment of the Court, after pointing out that the principles laid 
down by both the old and modern French authors are in the 
same sense, but that in France they have no general Railway Act 
corresponding with ours, and iheir method of determining com- 
pensation before the "Conseils de Prefecture" differs so much 
from our own that no precise authorities can be cited from that 
jurisprudence, said that a comparison of the English and Can- 
adian Acts would show no intended diminution or curtailment of 
the liability of the railway company toward the land owner under 
the Canadian Act as compared with the English one ; and that 
in his opinion that liability is if anything enlarged under section 
89 of our Act, which says, that for all damages caused by the 
Act in the exercise of the powers conferred upon them, they shall 
make full compensation, in the manner herein provided. (3) 
The learned judge went on say that whatever may be the liability 
of a railway company for damages to an adjoining proprietor, 
none of whose land has been taken, there can be no doubt that 
where land or real rights have been actually expropriated the 
company is bound to compensate the proprietor, not only for the 
land actually taken but for the direct damage to his remaining 



(1) See Lon , Tilbury & South End Ry. Co. v. Gower's Walks Schools, 
. R., 24Q.B. 3 26. 

(2) Que. R., 2 Q. B. 335. 

(3) Que. R., 2 Q. B., at pp. 352-354. 



1 70 THE RAILWAY LAW OF CANADA. 

land, resulting either from construction and severance, or from 
the use of the railway line and the operation of the traffic ser- 
vice; and the learned judge went on to say : " This is but the 
" adoption of the general principle that no one can use his own 
" property or rights to the detriment of his neighbor, even if the 
" exercise of his right be under the authority of an Act of Parlia- 
" ment." (i) This last proposition is directly contrary to the 
principles laid down by the English courts in the cases already 
referred to, and now firmly established by the very recent cases 
of The London v. Brighton Ry. Co. v. Trutnqn, (2) and The 
Attorney General v. London Tramways Co., (3) to which refer- 
ence has already been made. That is to say, if the learned 
judge meant by this proposition that a railway company, in the 
proper exercise of its statutory powers, could not, without being 
liable in damages, use its property or rights to the detriment of a 
neighboring proprietor, none of whose land or real rights had 
been expropriated by the railway company. The principle seems 
to be too firmly established in England to admit of doubt, 
that where the railway company does not expropriate or make 
use of the land of an adjoining proprietor, and does not interfere 
with any real right appertaining to such property, the proprietor 
cannot recover compensation, either under the statutes or the- 
common law, for damages caused by the use or operation of the 
railway, on the plain ground that what the legislature has 
declared to be a right the courts cannot hold to be a wrong. (4) 



i) Q. R., 2 Q. B. at p. 355. (2) 1 1 App. Cas. 53. 

(3) (Court of Appeals 1893.) 9 R - 598. 

(4) Per Blackburn J. in Hammersmith Ry. Co. f. Brand, L, R., 4 H. L. 
at p. 197 ; and see Shelfer v. City of London Electric Light Co., 12 R., per 
Lord Halsbury, at p. 108; and cases cited in note (3), p. 166. 

The Railway Clauses Consolidation Act and the Land Clauses Act do 
not contain any provisions under which a person whose land has not been- 
taken for the purposes of a railway can recover statutory compensation 
from the railway company in respect of damage or annoyance arising from 
vibration occasioned (without negligence) by the passing of trains after the 
railway is brought into use, even though the value of the property has been 
actually depreciated thereby. 

The right of action for such damages is taken away. Hammersmith, etc. 
Ry. v. Brand, I . R., 4 H. L. 171. 

Though compensation may not be granted to a person annoyed by the 
smoke and vibration occasioned by trains passing along a railway constructed 
under the authority of an Act of Parliament where no part of his land 
had been taken, compensation may be given for deterioration in the value 



EMINENT DOMAIN. 171 

A careful examination of the various sections of our Railway 
Act would lead one to the conclusion that no compensation is 
intended to be given, for damages caused by the operation of the 
railway, to the proprietor of a neighboring property, where no 
part of such property has been expropriated or interfered with ; 
but that such compensation would be due to a proprietor, even 
though no part of his land was taken from him, if the company 
made any use of any part of his land or interfered with any real 
right appertaining thereto, such, for instance, as a right of way 
or passage, (r) 

As already pointed out, section 92 provides that the company 
shall make compensation in the manner provided by the general 
and the special Act to all parties interested for all damage 
sustained by reason of the exercise of their powers ; but the 
only manner provided for making such compensation is that con- 



occasionecl in a similar manner, where a part of his land has been taken 
for the construction of a work authorized by an Act. 

In this question of compensation may be considered his particular and 
individual use of that in which he had no proprietary right, such as the shore 
of a tidal river, and where B was riparian proprietor, having a right to 
the undisturbed flow of the river along the whole frontage of his property, 
he was entitled to damages for being deprived of that right. Duke of 
Buccleuch v. Metropolitan Board of Works, L. R., 5 H. L. 418. 

Where several pieces of ground owned by the same person are, though 
not adjoining, so near to each other and so situated that the possession and 
control of each gives an enhanced value to all of them, they are lands held 
together within the meaning of the Lands Clauses Consolidation Act 1845, 
49 to 63, so that if one piece is compulsorily taken and converted to uses 
which depreciate the value of the rest, the owner has a right to compensation 
for the depreciation. Cowper Essex v. The Local Board for Acton, L. R., 
14 App. Cas. 153. 

No claim can be made in respect of a damage for which the claimant 
would not have had an action supposing the Railway Act had never been 
passed. The damage must be done by the construction of the works, and 
not afterwards when the works have been completed. 

Held (reversing), that statutory compensation cannot be claimed by 
reason of the noise and smoke of trains, whether part of the claimant's land 
be taken or not, anticipated damage from the noise and smoke of trains does 
not appear to be a proper subject of estimate of compensation under the 
Railway Statutes. 

Ihe Legislature having given the promoters no power to annoy the occu- 
piers of neighboring property with smoke, an injury from this cause is not 
the subject of compensation but a ground of action. A man may have a 
right of action and a right of indictment where he cannot claim statutory 
compensation. City of Glasgow Linion Ry. Co. v. Hunter, L. R., 2 Sc. 
App. 78. 



(i) Wood v. A. & N. W. Ry. Co., Q. R., 2 Q. B. 335. 



i7 2 THE RAILWAY LAW OF CANADA. 

tained in sections 136 to 172 inclusive, which sections are con- 
tained in that portion of the Act headed " Lands and their 
Valuation." 

Section 144 provides for making compensation by agreement, 
with the owners of the lands, which may suffer damage from the 
taking of materials or the exercise of any of the powers granted 
for the railway. But these lands, as has already been pointed 
out, are to be shown upon the location plan and book of refer- 
ence of Uie railway. Certainly it would not appear that the 
company are bound to show on such plan any land which they 
did not intend to take or use or interfere with in some way in 
the construction of the road. Then the provisions with regard 
to compulsory expropriation require that the party to be expro- 
priated shall be served with a notice containing a description of 
the lands to be taken, or " of the powers intended to be exer- 
cised with regard to any lands, and describing the knds ; " (i) 
and the compensation which the arbitrators are authorized to 
grant is for the taking of the lands, or the damages caused by 
the exercise of the company's powers with regard to the lands, 
as described in this notice. As was said by Lord Chelmsford, 
in Hammei smith Ry. Co. v. Brand: (2) " To say that the use 
" of the railway after its construction is one of the powers 
' vested in the company in regard to the lands, conveys to my 
41 mind no intelligible meaning." 

It can hardly be contended that the railway company could 
be compelled to give notice to a proprietor of land, which was 
not in any way touched or interfered with by the construction of 
the railway, that they intended to exercise with regard to such 
land the power of running and operating their railway in its 
vicinity, and that they were willing to pay a certain sum as 
compensation for the damage which might be caused to his land 
by the opera* ion of the road, such, for instance, as those caused 
by the smoke and noise of passing trains. 

It would be impossible, in the first place, to accurately deter- 
mine at what distance from the railway lands would be inju- 
riously affected by such causes, and, in the second place, to 
estimate the extent of the injury and the amount of compensa- 
tion which should be given in any particular case. 



i) Sec. i ;6. (2) L. R., 4. H. L. 171. 



EMINENT DOMAIN. 173 

The public generally, having property within sight, and 
hearing of a railway, must suffer inconvenience, more or less in 
degree but the same in kind, as they may happen to be more or 
less distant from the railway, caused by the smoke and noise of 
passing trains. But there does not seem to be provided by the 
Act any manner in which such persons should be compensated. 
And section 153 would seem to point in the same direction, inas- 
much as it refers only to such inconvenience, loss or damage as 
might be sustained by reason of a company taking possession of 
or using lands. 

A reference to section 101 would also seem to confirm this 
view. There provision is made for compensation in the case of 
the taking of Indian lands injuriously affected by the construc- 
tion of the railway, the language of the section being as fol- 
lows : " When any portion of such lands is taken possession of, 
" used or occupied by any company, or when the sarre is in- 
" juriously affected by the construction of any railway, compen- 
" salion shall be made therefor as in other cases.'' 

It does not sef.m reasonable to suppose that the legisla- 
ture intended to make a distinction, as to the compensation to be 
given, between the case of Indian lands injuriously affected by 
the railway and any other lands. And as it is provided by that 
section that in the case of Indian lands compensation shall only 
be made for lands taken 'and lands injuriously affected by the 
" construction " of the railway, and that such compensation should 
be made therefor " as in other cases," it would seem a fair in- 
ference that in other cases compensation was intended to be 
given only where the lands were injuriously affected by the con- 
struction of the railway, as distinguished from its operation, that 
is, where no land is actually taken ; unless it can be shown that 
special piovision is made in other cases for lands injuriously 
affected by the operation of the railway, and such would not 
seem to be the case. 

31- As to what kind of damage it is within the powers of the Nature of 
arbitrators to allow in assessing the compensation apart from the damages that 
value of the land taken, it may be said that as a general rule they ay -~| e . (t b 
may take into consideration any direct, tangible and appreciable arbitrators, 
injury or damage, particularly affecting the property in question 



174 THE RAILWAY LAW OF CANADA. 

which can reasonably be foreseen, (i) As instances, might be 
mentioned, the injury caused to a farm, or such like property, by 
the severance of one portion from another, as where a railway 
crosses a farm property, separating the farm buildings from the 
house or from some other part of the farm, increasing the diffi- 
culties of access frcm one portion of the farm to another; and 
the inconvenience caused by the necessity of crossing the railway 
with carts, horses and cattle ; and the trouble and loss of time in 
having to open and close the gates on each occasion. Again, 
the manner in which a railway crosses a particular property 
may cause loss, as, for instance, if it cuts through the property 
in a diagonal line, instead of at right angles, thus cutting up 
fields or lots, and rendering them unavailable or less available 
for the purposes for which they were intended. 

The danger arising from sudden emerging of trains from 
a snowshed without warning, having the effect of frightening 
horses, etc.. is a subject of compensation. (2) Also damage result- 
ng from an increased risk of fire. (3) So held, where the plain- 
tiffs were owners of a waterside property, upon which they oper- 
ated two marine railways. A portion of this property was 
expropriated for the right of way of a Government railway, the 
latter being situated in such close proximity to the plaintiff's 
works, that the works, as well as ships in course of repair upon 
them, would be in danger of taking fire from locomotives when 
the Government railway was put in operation. In consequence 
of this increased risk from fire, it was shewn that plaintiffs would 
have to pay higher rates of insurance upon their works than they 
had hitherto paid, and that ships might be deterred from using 
the marine railway. For these causes it was held compensation 
was properly allowed. (4) But the possible damage to bush 
land from greater exposure to winds and storms, and the greater 
liability to injury by fire., by reason of the working of the railway, 



(1) Wood v. A. &N. W. Ry. Co., Q. R., 2 Q. 6.335 ! Lawrence v. G. 
N. W. Ry. Co., 16 Q. B. 643; and see Great Laxey Mining Co. v. Clagis, 
4 App. Cas. 115. 

(2) Vezina v. The Queen, 2 Exch. n. Confirmed in Supreme Court, 17 
S. C. R. i. 

(3) Straits of Canseau Marine Ry. Co. v. The Queen, 2 Ex. 113 ; and see 
Stockport case, 33 L. J. Q. B. 251. 

(4) Straits of Canseau Marine Ry. Co. v. The Queen, 2 Ex. 113. 



EMINENT DOMAIN. 175 

are contingencies too remote to be considered in estimating the 
amount of compensation where, there are no buildings to be 
endangered, (i) And danger to persons and animals should not 
be included. (2) 

In assessing damages, regard should be had to the prospec- 
tive capabilities of the property arising from its situation and 
character. (3) But while the remote probability that land 
would become available for building purposes upon the extension 
of the limits of an adjoining town may add something to the 
value which the property would otherwise have had, compensation 
should not be based upon any supposed value of the land for 
building purposes at the time of the expropriation. (4) But held 
in England, that where agricultural land, which might have 
become valuable for building, is severed, so as to be useless for 
building, this depreciation may be taken into consideration. (5) 
Where lands possess a certain value for building purposes at the 
time of the expropriation, but that value cannot be ascertained 
from the actual sale of any lot or part thereof, the sales of similar 
and similarly situated properties constitute the best test of such 
value. (6) 

32. The value of the land to be estimated is the value it has Value of 
in the hands of the owner, subject to such restrictions as there lan . d how 
may exist upon its use, and not the value it will have in the hands 6 
of the company freed from all restrictions. (7) And this value 
must be the value at the time of the expropriation. (8) Where 
claimant sought to recover damages in respect of a portion of his 
farm as a gravel pit, but failed to show that it had a value quoad 



(1) In re Arbitration between Ont. & Que. Ry. Co. and Gen. Taylor, 6 O. 

R. 338. 

(2) Re Scott v. Railway Commisrs., 6 Man. 194 ; A. & N. W. Ry. Co. v. 
Descarie, 21 R. I.. 194. 

(3) Paint v. The Queen, 2 Ex. R. 149. Confirmed by Supreme Court, 18 S. 
C. R. 718 ; but see Re Nicholson v. Ry. Commrs., 7 Man. 400. 

(4) Kearney v. The Queen, 2 Ex. 21. Supreme Court, 3Oth April, 1889. 
Cassels Dig. 313. 

(5) Reg. v. Brown, L. R., 2 Q-. B. 630. 

(6) Falconer v. The Queen, 2 Ex. R. 82. 

(7) Stibbing v. Metropolitan Ry. Co., L. R., 6 Q. B. 37 ; Paint v. 
The Queen, 2 Ex. R. 149. 

(8) Vezina v. The Queen, 2 Ex. R. n ; and see sec. 145 Ry. Act. 



176 THE RAILWAY LAW OF CANADA. 

hoc at the time of the taking, the Court declined to assess its 
value otheiwise than as farm land, (i) 

Where certain land remaining to the owner was not appre- 
ciably affected in respect of the value it had to him for the pur- 
poses of occupation, the damages were ascertained and assessed 
in respect of its depreciation in market value. (2) 

Although the claimant has the right to sell his property, 
and should, therefore, be indemnified in respect of any loss which 
in consequence of the expropriation he nvghtmake on such sale,, 
he is not bound to sell, and may reasonably prefer to keep his 
property for the purposes of his business ; and in that case should 
be indemnified for any depreciation in its value to him for the 
purposes for which he has been accustomed, and still desires, to- 
use it. (3) The nature of the title to the land is also a criterion 
of its value. (4) 

Where the claimant, for the purpose of effecting a settlement 
without litigation, had offered to settle his claim for a sum 
very much below that demanded in his pleading?, the Court, while 
declining to limit the damages to the amount of such offer, relied 
upon it as a sufficient ground for not adopting the extravagant 
estimates made by claimant's witnesse?. (5) 

Where a wharf in course of construction, and materials to 
be used in completing it, had been taken by the Crown, the 
Court allowed the claimants a sum representing the value of the 
wharf as it stood, together with that of the materials ; and to this 
amount added a reasonable sum for the superintendence of the 
work by the builder, who was one of the claimants, for the use 
of the money advanced, and for the risks incurred by him during 
the construction thereof, in other w.ords, a sum to cover a fair 
profit to the builder on the works so far as completed. (6) 

In assessing damages where land has been expropriated, the 
unity of the estate must be considered ; and if by the severance 
of one of several lots, so situated that the possession and control 
of each give an enhanced value to them all, the remainder is 



(I) Ibid. (2) Ibid. 

(3) Reg- v - Carrier, 2 Ex. R. 36. (4) Ibid. 

(5) Falconer r. The Queen, 2 Ex. R. 82 ; and see Cardinal v. La Cie. de 
Ch. de Fer de Beauharnois, 20 R. L. 648. 

(6) Samson v. The Queen, 2 Ex. R. 94. 



EMINENT DOMAIN. 177 

depreciated in value, such depreciation is a substantive ground 
for compensation, (t) 

It was said by Taschereau J. in Paradis v. 1 he Queen, (2) that 
it is not merely the depreciation in the actual market value of the 
land that a claimant has to be indemnified for, it is the depre- 
ciation in such value as it had to him that should be the basis of 
compensation. Also, that the valuation of a property appearing 
upon the municipal assessment roll does not constitute a test of 
the actual value upon which compensation should be based, 
where such valuation is made arbitrarily and without consider- 
ation of the trade carried on upon "the property or the profits 
derivable therefrom. 

In a case of expropriation, the claimant is not obliged to prove 
by costly tests or experiments the mineral contents of his land. 
(3) Where, however, such tests or experiments have not been 
resorted to, the Court or jury must find the facts as best it can 
from the indications and probabilities as disclosed by the evi- 
dence. (4) 

(1) Paint v. The Queen, 2 Ex. R. 149. 

(2) I Ex. R. 191. 

(3) Brown v. The Commissioners for Railways, 15 App. Cas. 240. 

(4) Regina v. McCurdy, 2 Ex. R. 211. "No company shall, without 
the authority of the Railway Committee, locate the line of its proposed rail- 
way, or any branch thereof, so as to obstruct or interfere with or injuriously 
affect the working of, or the access or adit to, any mine then open or for 
opening which preparations are, at the time of such location, being lawfully 
and openly made." Sec. 119. 

The "mines of coal, ironstone and other minerals," which sec. 77 of the 
Railway Clauses Act 1845 except out of the conveyance of the railway com- 
pany, and the "mines and minerals " under the railway, or within the specified 
distance which sec. 78 empowers the owner to give notice of his intention to 
work, include not only beds and seams of minerals got by underground working, 
but also such as can only be worked and according to the custom of the district 
would be properly worked by open or surface operations. 

So Held, by Lords Herschell and Watson (Lord MacNaughton dissenting, and 
retaining the opinion expressed in Lord Provost of Glasgow v. Farie, 13 
App. Cas. 657^. M dland Ry. Co. et al. v. Rev. Sir F. L. Robinson, 15 App. 
Cas. 19. 

That to justify an owner giving such a notice, it is not necessary that he 
should intend to work the minerals himself, but there must be a real and botta 
fide desire to work either by himself or by his lessees or licensees. Ibid. 

Limestone is a mineral within the meaning of the above sections . Ibid. 

This case raised a question concerning land taken with portions of mineral 
under it by the railway company as to the owner's right to compensation in 
respect of his inability to get the coal under or near the railway. Lord Gerard 
was the owner of land near Wigan having coal and other minerals under it 
through which the railway ran. The company gave notice lo take not only 

12 



1 78 THE RAILWAY LAW OF CANADA. 

Finally, in assessing the value of lands taken or injuriously 
affected by a public work, the owner should be allowed a liberal 
not a bare indemnity. 

Access to 33. The owner of land fronting upon a highway, whether it 

landways and j g a j an( j wa y or a waterway, has a right of access to the highway, 

and is entitled to compensation if his access is cut off. (i) So a 

person whose land abuts on the foreshore is entitled to corn- 



surface land but also the minerals under it, except seams of coal which ran 
under parts of the land, and were not then worked. Lord Gerard claimed under 
these notices to be entitled to receive present compensation in consequence o f 
being bound in law to leave unworked large quantities of coal, either subjacent 
or adjacent, in order to afford necessary support to the other strata, and 
because it was impossible to work it without taking away part of the land and 
minerals sold to the company. The effect of this claim would have been to 
make the company pay at once, not only the price of the land taken, but also 
for all the subjacent and adjacent coal, and the ground of the claim was that 
the company were not only taking tlie land, but also the minerals under it. 
It was contended on behalf of Lord Gerard that the railway running through 
the land, and the company having taken not only the land under the railway, 
but the minerals under the land (except the coal), the owner was unable to 
work his coal on either side up to or near the railway, because so working 
would interfere with the minerals under the railway. The matter had gone to 
arbitration under the Lands Clauses Act 1845, and evidence had been received 
by the arbitrator to support the claims thus set up by Lord Gerard. The 
company had thereupon obtained a rule nisi, allowing them to revoke their 
submission, on the ground that these claims were not maintainable, and that 
though, if Lord Gerard sustained any injury or increased expense in working 
his coa! in consequence of the railway, he might set up a future claim for 
compensation, there was no ground for entertaining the claims now to enhance 
the price to be paid for the land and minerals. The court thought the conten- 
tion of Lord Gerard was not well founded, and that his rights were governed 
by section 77 and the following sections in the Railway Clauses Act 1845. 
Those sections applied not only to cases where no mines or minerals were 
taken, but in every case in which mines or minerals were taken, and they were 
applicable to a case where a company had purchased with the land certain 
subjacent minerals, but had left others to the land owner. There was nothing 
in the Act to confine it to cases of the purchase of surface land only. The 
claims not being, therefore, maintainable, and the evidence offered not being 
admissible, the rule giving the railway company leave to revoke the submis- 
sion would be made absolute with costs, the company undertaking not to revoke 
unless the arbitrator continued to receive the evidence objected to. Lord 
Gerard v. The London & North Western Railway Co., Times Law Rep., 
Vol. X, p. 657 ; confirmed in appeal, ibid. Vol. XI , p. 170. 



(i) Lyon v. Fishmongers Co., I App. Cas. 662 ; Chamberlain v. West 
End of London & Crystal Palace Ry. Co., 31 L. J. Q. B. 201, 32 L. J. 
Q. B. 173 ; Caledonian Ry. Co. v. Walker's Trustees, 7 App. Cas. 259 ; 
Duke of Buccleugh v. Met. Board of Works, 5 H. L. 418; Pion v. North 
Shore Ry. Co., 14 App. Cas. 612 ; [Corp. of Parkdale z r . West, 12 App. 
Cas. 602. 



EMINENT DOMAIN. 179 

pensation if his access to the sea or a navigable river is cut 
off. (i) 

And in the same way the right to compensation arises, if by 
lowering or raising the highway the access is impeded, or 
additional fences or earthworks become necessary ; (2) also the 
construction of a railway along the sidewalk contiguous to lands 
whereby access to such lands is interfered with, and the frontage 
of the property destroyed for the uses for which it is held. (3) 

Where the right, in respect of which the owner claims com- 
pensation, is a public right, common to himself and the public 
generally, the following rule may be laid down to determine the 
right to compensation. Where the right is entirely taken away, 
or so interfered with as to reduce or depreciate the market value 
of the property apart from the uses to which any particular owner 
may put the property, there is a right to compensation. (4) 

Thus, for instance, if the access to a house is cut off by the 
blocking up of a road giving access to the house, this is a clear 
injury to the house as a property. (5) So where a house fronting 
on a highway is depreciated in value by the narrowing of the 
road, a right to compensation arises. (6) 

But where, by the construction of the railway, the use of a street 
as a highway is merely rendered less convenient, with consequent 
personal inconvenience, or damage to trade, of persons living on 
the street, the owner or occupants of property abutting on the 
street are not entitled to compensation ; on the ground that the 



(1) A riparian proprietor on a navigable river is entitled to damages 
against a railway company, for any obstruction to his rights of acces et sor- 
tie ; and such obstruction without Parliamentary authority is an actionable 
wrong. Pion v. N. S. Ry. Co., 14 A pp. Gas. 612 followed ; Bigaouette v. 
North Shore Ry. Co., 17 S. C. R. 363 ; and see Bowen v. Can. Southern Ry 
Co., 14 O. A. R. i. 

(2) Regina v. St. Luke's, L. R., 7 Q. B. 148 ; Moore v. Great S & W 
Ry. Co., 10 Ir. C. L. 46 ; Twohey v. G. S. & W. Ry. Co., lo Ir. C. L. 98 j 
Reg. v. Eastern Counties Ry. Co., 2 Q. B. 347. 

(3) Reg. v. Barry, 2 Ex. 333 ; Reg. v. Malcolm, 2 Ex. 357. 

(4) Metropolitan Board of Works v. McCarthy, L. R., 7 H. L. 243 ; Wad- 
ham v. N. E. Ry, Co. ( 14 Q. B. D. 747. 

t 16 ib. 257. 

(5) Caledonian Ry. Co. v. Walker's Trustees, 7 App. Cas. 259. 

(6) Beckett v. Midland Ry. Co., L. R., 3 C. P. 82 ; Metropolitan Board 
of Works v. McCarthy, L. R., 7 H. L. 243 ; Wood v. Stourbridge Ry. Co. 
16 C. B., N. S., 222. 



i8o THE RAILWAY LAW OF CANADA. 

inconvenience is one which they suffer in common with, though 
to a greater degree than, the public generally, (r) 

A temporary obstruction of a highway, for the purpose of a 
public work, does not entitle the owner of property on the high- 
way to' compensation. (2) 

34. The law of Quebec allows to the owners of houses adjoining 
streets rights over them, which, if not servitudes, are in the nature 
of servitudes. Such are the rights d'acces et de sortie des rues 
ou dugouts. 

(i) Brodeur i-. Corpn. of Roxton Falls, II R. L. 447. 

R. was occupier of a public house situated by the side of a public foot- 
way. A company obtained powers under certain Acts of Parliament (with 
which the provisions of the Lands Clauses Acts and Railway Clauses Acts 
were declared to be incorporated) to make a railway. 

The company obstructed streets leading to this foot -way so as to make 
the access to the public house inconvenient. The obstructions were not 
permanent, and after some time the streets were restored to their original 
condition. 

It was found by the jury that there were no structural damages to the 
premises, but that R. had sustained damage in respect of the interruption of 
his business. 

Held (diss. Lord Westbury), that R. was not entitled under the 68th 
section of the Lands Clauses Act, nor the 6th or the i6th Sections of the 
Railway Clauses Act, to receive compensation for injury to his trade conse- 
quent upon these obstructions. 

Ricket v. The Metropolitan Ry. Co., L. R., 2 H. L. 175. 

Per Lord Westbury: At p. 203. " I entirely concur with the doctrine that 
compensation cannot be claimed by an individual for damage which is sus- 
tained in common by all the subjects of the realm. Thus, if a public highway 
be diverted, or crossed on the level, by a railway, the inconveniences of having 
to wait whilst trains pass is common to all the public ; and the benefit which 
it is considered results to the public from the railway is the only compensation. 
Persons dwelling in the neighborhood may sustain this inconvenience more 
frequently than the rest of the public ; but if the inconvenience is to be re- 
garded as compensated by the public convenience, it cannot be converted into 
a ground of compensation by reason of certain persons having to sustain the 
inconvenience more frequently than the rest of their fellow-subjects. " J 

In order to found a claim to compensation under the 68th section of the 
Lands Clauses Consolidation Act 1845, f r an interest in land, " injuriously 
affected," there must be an injury and damage not temporary but permanent, 
peculiarly affecting the house or land itself in which the person claiming 
compensation has an interest. A mere personal inconvenience, obstruction 
or damage to a man's trade or the good will of his business will not be suffi- 
cient, although any one of them might, but for Act of Parliament which 
authorizes the doing of the thing which causes the injury, have been the 
subject of an action against the person occasioning it. Chamberlain r. The 
West of London Ry. Co. (2 B. & S. 605-617), and Beckett v. The Midland 
Ry. Co. (L. R., 3 C. P. 82), approved. Ricket v. The Metropolitan Ry. 
Co. (L. R., 2 H. L. 175), explained and affirmed. Metropolitan Board of 
Works v. McCarthy, L. R., 7 H. L. 243 ; and see Sanche v. C. P. R. Co, 
16 R. L. 296. 

(2) Herring v. Metropolitan Board of Woiks, 34 L/. J. M. C. 224. 



EMINENT DOMAIN. . 181 

There is a clear distinction in the law of Quebec between 
rights of immediate access from a man's property to a highway, 
and the power to complain of a mere obstruction in it. The 
French law recognizes Adroit cfacces et de sortie" as rights 
belonging to a house in a street. It is evident that this right of 
access is different from the right of passage which the owner has 
in common with the public. 

The right of access to a house is of course essential to its 
enjoyment; and if by reason of alterations in the stieet the 
owner cannot get into or out of it, or is seriously obstructed in 
doing so, he can recover indemnity for the damage he sustains, 
(i) But the stopping of a street at one of its ends only does not 
produce these consequences. (2) 

In Quebec also, a distinction is made between direct damage, 
which gives the sufferer a right to compensation, and indirect 
damage which does not. (3) 

There may be droit d'acces (t de sortie to and from a river or 
stream belonging to riparian land, which, if interfered with, 
would at once give the proprietor a right of action. But this 
right appears to be confined to what it is expressed to be, the 
power of getting from the waierway to and upon the land (and 
the converse) in a free and uninterrupted manner. When this 
right of access is not interfered with, although the navigation of 
the ri^er be somewhat obstructed, the riparian proprietor is not 
entitled to compensation, unless actual and special damages 
peculiar to himself, and different in kind from those suffered by 
the public generally, are proved. (4) 

A distinction is thus drawn between the right of access from 
the river to a riparian frontage, and the right of navigation when 
upon it. When this access is not interrupted, and the waterway 
of the river is open to the riparian land, the question arises 
whether the right of action of the riparian proprietor, for a distant 
obstruction in the river, can be based on higher or other ground 
than would be that of any one of the public using the river and 



(1) Morrison v. Mayor of Montreal, 4 L. N. 25 (Q. R. Que. 1880). 

(2) Mayor of Montreal v. Drummor.d, I App. Cas. 406. 

(3) Ibid. 

(4) Bell v. Corpn. of the City of Quebec, 5 App. Cas. 97-98 ; and vide Bro- 
deur t-. Corpn. of Roxton Falls, 11 R. L. 447. 



182 THE RAILWAY LAW OF CANADA. 

sustaining special damage. The right of access to the waterway 
from riparian land is a private right which the owner of such 
land enjoys qua owner; this right is analogous to the droit 
d'acces et de sortie recognized by the law of Quebec. If the 
English law attributes larger rights than these to riparian pro- 
prietors on navigable rivers, it goes further in this direction than 
the law of Quebec. But it would not seem to. 

Thus, where the construction of a bridge does not interfere 
with the riparian proprietor's right of access to the river, it has 
been held that the latter has no right to compensation, excepting 
he can prove actual and special damages peculiar to himself and 
not suffered by him in common with the rest of the public, and 
that the Quebec and the English law in this respect is the same, 
(i) Whether an obstruction amounts to an interference with a 
riparian proprietor's access to his frontage, which is a private 
right by English as by Quebec law, is a question of fact to be 
determined by the circumstances of each particular case. (2) 

According to Quebec law, the beds of navigable and floatable 
rivers are the property of the Crown. (3) The test as to whether 
a river is navigable or floatable is its possible use for transport 
in some practical and profitable manner, (4) which would in 
Quebec include the floating of logs and timber. 

When the right of navigation on a river is connected with an 
exclusive access to and from a particular wharf, it assumes a 
different character. It ceases to be a right held in common with 
the rest of the public, for other members of the public have no 
access to or from the river at the particular place, and it becomes 
a form of enjoyment of the land and of the river in connection 
with the land, the disturbance of which may be vindicated in dam- 
ages by an action, or restrained by an injunction. (5) It was held 
in Miner v. Gilmoiir (6) that the rights of riparian proprietors in 
non-navigable and non-tidal water-course are the same under the 
English as under the Lower Canada law ; and that by the general 
law applicable to running streams, every riparian proprietor has a 



(1) Bell v. Corpn. of the City of Quebec, 5 App. Cas. 85. 

(2) Ibid. 85. (3) C. C. Ait. 400. 

(4) Bell ?'. Corpn, of Quebec, 5 App. Cas. 85. 

(5) The N. S. Ry. Co. r. Pion, 14 App. Cas. 619. 
CM T2 Moore. P.C.. TII (iScSK 



(6) 12 Moore, P.C., 131 



EMINENT DOMAIN. 183 

right to what may be called the ordinary use of the water flowing 
past his land, for instance, to the reasonable use of the water for 
his domestic purposes, and for his cattle. But, further, he has a 
right to the use of it for any purpose, or what may be deemed the 
extraordinary use of it, provided he does not interfere thereby with 
the rights of other proprietors either above or below him. This 
general principle is, in England, applicable to navigable and tidal 
rivers saving the right of the public to un'obstructed navigation. ( i ) 

The only ground of distinction between a non-navigable river 
and a navigable or tidal river, forming at high water the boundary 
of riparian land, is that in the case of a non-navigable river the 
riparian owner is proprietor of the bed of a river ad medium filum 
aqua, whereas, in the case of a navigable river, it belongs to the 
Crown. The right of a riparian owner to the use of a stream 
does not depend on the use of the soil of the stream. 

The right to the enjoyment of a natural stream of water on 
the surface belongs, ex jure natures, to the proprietor of the ad- 
joining lands, as a natural incident to the right to the soil itself, 
and he is entitled to the benefit of it, as he is to all the other 
natural advantages belonging to the land of which he is the 
owner. He has the right to have it come to him in its natural 
state, in flow, quantity, and quality; and to go from him without 
obstruction upon the same principle that he is entitled to the 
support of his neighbor's soil for his own in its natural state. (2) 

It is necessary for the existence of a riparian right that the 
land should be in contact with the flow of the stream, but it is 
sufficient that this contact should exist daily, in the ordinary and 
regular course of nature, though it may not continue during the 
whole of any day. (3) 

Such land should not be valued as if it had no river frontage, 
or as if the owner had no riparian rights. 

The construction of its road by a railway company upon the 
foreshore of a navigable and tidal river, thereby obstructing by 
means of an embankment extending along the entire length of 
plaintiffs land his access to the water, gives him a right of action, 



(1) Lyon v. Fishmongers Co., I App. Cas. 683. 

(2) Chassmore v. Richards, 7 H. L. Cas. 349. 

(3) Ibid, and Miner v. Gilmour, 12 Moore, P.C., 131. 



1 84 



THE RAILWAY LAW OF CANADA. 



Loss of 
business. 



Injury to 
business. 



Loss of 
privacy . 



Injury to 

franchises, 

ferries. 



even though the company leaves one opening in the embankment 
and another opening just outside the plaintiff's property, (i) 

35. The owner of land is entitled to put it to what uses he 
pleases; no right of compensation therefore arises if a railway 
company, having purchased land, pulls down the houses upon it, 
and thereby destroys the custom of a neighboring shop. (2) 

The owner of a house may pull it down and rebuild it, or rebuild 
the common walls, if he is careful to, do no avoidable injury to 
the adjoining house, and the adjoining owner has no claim to 
compensation for noise, discomfort, loss of trade, etc., provided the 
work be done with care and skill and according to the rules of 
art. (3) 

36. If injury is caused by the railway not to the properly 
as such but merely to the property as used for a particular pur- 
pose, such as a business, or, in other words, to the business 
carried on upon the property, no compensation can be recov- 
ered. (4) 

37. A landowner has no right of action because buildings on 
neighboring lands oveilook his land, and thereby interfere with 
its privacy ; (5) provided that they are built at such distance 
from his land as the law or custom of the locality requires. (6) 

38. It is clear that an actionable injury to an incorporeal 
hereditament, such as a franchise, is a subject matter of com- 
pensation. Thus the obstruction of access to a ferry appurte- 
nant to the claimant's house is matter for compensation. (7) 
A ferry is the exclusive right of taking passengers across a 
stream by means of boats. It is no infringement of a ferry to 



(1) North Shore Ry. r. Pion, 14 App. Cas. 612 ; Bigaouette v. North 
Shore Ry. Co., 17 S. C. R. 363. 

(2) Regina v. London Dock Co., 5 A. & E. 163 ; Regina r . Vaugan, L. R., 
4 Q. B. 190; Faradis v. The Queen, I Ex. R. 191. 

(3) Regina v. Hungerford Market, I A. & E. 668, 676 ; Feck v. Harris, 12 
L. C. R. 355 ; Lyman v. Peck, 12 L. C. R. 368 ; Moynaugh v. Angus, Q. R. 
S. C. not yel reported. 

(4) Rex v. l.on. Dock Co., 5 A. & E. 165 ; Rickett v. Metropolitan 
Ry. Co., L. R., 2 H. L. 175 ; Herring v. Metropolitan Board of Works, 34 
L. J. M. C. 224; Wadham z ,. N. E. Ry. Co., 14 Q. B. D. 747. . 

(5) Re Penny, 7 E. & B. 660 ; Sirey (V.) 80, 2, 308. 

(6) C. C. 534-538. 

(7) Regina v. G. N. W. Ry. Co., 14 Q. B. 25. 



EMINENT DOMAIN. 185 

provide fresh means of passage for a new kind of traffic. Thus 
a railway bridge, though in the line of a ferry, inasmuch as it 
does not connect the highways connected by the ferry, but pro- 
vides means of transit for the traffic brought along the railway, 
is no infringement of the ferry. And if the use of the railway 
bridge is allowed to foot passengers free of toll, to enable them 
to get to and from the station of the company, the case is within 
the same principle, (i) 

39. Any interference with an easement or servitude appurte- injury to 
nant to land entitles the owner to compensation. This has easements, 
been decided with reference to a private right of way and to an 
easement of light (2) and to a subway. (3) And such inter- 
ference would seem to open the door to compensation for all 
damages to the land to which the servitude or easement is 
attached, it being looked upon as being an expropriation of a 

.real right. (4) 

40. In addition to the grounds of damage already specified, injury to 
the arbitrators have the right to take into consideration the value trees - 
of trees upon the property taken or those which may be dam- 
aged by the exercise of the powers of the company. Fruit 
trees, or trees valuable for other reasons, may be valued, and 

their value taken into consideration by the arbitrators as an 
element in arriving at the compensation to be paid to the pro- 
prietor. It has so been held by the Courts of the Province of 
Quebec in several cases arising under the Railway Acts, (5) but 
it may be strongly doubted whether the arbitrators have the 
right to give the value of the trees, in addition to the full value 
of the land, for in most cases the full value of the land would 
include the trees growing upon it. For instance, applying the 



(1) Hopkins v. G N. \V. Ry. Co., L. R., 2 Q. B. D. 224, over-ruling 
Reg. v. Cambrian Ry. Co., L. R., 6 Q. B. 422; and see Jones v. Stanstead 
Ry. Co., 4 P. C. App. p. 98. 

(2) Glover v. Noith Staffordshire Ry. Co., 16 Q. B. 912 ; Eagle v. 
Charing Cross Ry. Co , L. R., 2 C. P. 638 ; Clarke v. London School 
Board, 9 Ch. 120 ; Ford v. Metropolitan Ry. Co., 17 Q. B. D. 12 ; Regina 
v. Poulter, 56 L. J. Q. B. 581 ; Wood v. A. & N. W. Ry. Co., Que. R., 
2 Q. B. 335. 

(3) Wells v. The Northern Ry. Co., 14 O R. 594. 

(4) Wood v. A. & N. W. Ry. Co., Que. R., 2 Q. B 335. 

(5) See Evans v. Att. & N. West Ry. Co.'s M. L. R., 6 S. C. 493. 



1 86 THE RAILWAY LAW OF CANADA. 

rule which is now recognized as the proper one, that the amoiint 
of compensation should be equivalent to the difference between 
the value of the whole property at the date of the deposit of the 
plan and the value of the portion remaining from that taken by 
the Railway Company, (i) naturally the value of the whole 
would be governed by the state of cultivation in which it was at 
that time, including the value of the trees upon it. In other 
words, the value of the property may or may not be increased 
by the trees growing upon it ; and if the above mentioned rule 
were adopted by the arbitrators, they would consider the addi- 
tional value of the trees growing upon the property, and their 
value would be included in the valuation put upon the land. It 
may be said, in general terms, that the value of the land ought 
to include the value of the trees growing upon it, and therefore 
the arbitrators ought to include that value in arriving at their 
award, and it would be paying the proprietor twice to give him 
the value of the land and an additional sum for the value of 
each particular tree growing thereon. 

It would be different in the case of crops growing upon the 
property which the construction of the railway would destroy 
before they could be reaped ; in such a case the proprietor 
would be entitled to receive, in addition to the actual value of 
the land, the price of the crop which he would have been enabled 
to realize if the railway had not destroyed the crop. It has 
also been held by the Court of Appeals in Quebec, that the arbi- 
trators may allow compensation for loss of land on each side of 
railway rendered unfit for cultivation. (2) 

Compensation 41. The instances given are sufficient to show the general 

a bar to all grounds upon which compensation by the arbitrators should be 

im ' based, and it may be laid down that once this compensation 

has been assessed by the arbitrators and accepted by the pro- 



(1) Supra p. 160. Compensation by a railway company is most readily and 
fairly ascertained by determining the value ot the land without the railway, 
and of the portion remaining after the railway is built. The difference is the 
compensation to which the party is entitled. Troy & Boston Ry. Co. v. 
Lee, 13 Barb. 169, 171, in re F Street, 17 Wend. 649 ; Canal Co. v. Archer, 
9 Gill & J. 480; Parks v. City of Boston, 15 Pick 198 ; Somerville Ry. 
Co. v. Doughty, 2 Znb 495. 

(2) Matlutu i'. Q M. & O. Ry. Co., 15 Q L. R. 300. Confirmed in 
Supreme Court, 19 S. C. R. 426. 



EMINENT DOMAIN. 187 

prietor, he has no further claim against the company by action 
for any damages which may rise from the exeicise of the com- 
pany's powers, provided that they are exeicised in a careful and 
proper manner, and without negligence, even though special 
damages may result from the exercise of these powers which 
were not considered by the arbitrators. So long as it was with- 
in the jurisdiction of the arbitrators to assess such damages, the 
proprietor would be precluded from afterwards taking an action 
to recover damages which could be reasonably foreseen as 
resulting from a proper and careful exercise of the powers of the 
railway. In other words, the arbitrators are presumed to have 
awarded compensation to the proprietor for all damage they 
could reasonably foresee as the possible result of the lawful 
and proper execution of the works by the railway company, 
under the powers conferred upon them by Parliament, and the 
proprietor is presumed to have placed before the arbitrators 
all the possible grounds of damage which he might suffer by 
such exercise of the company's powers ; and he would be 
estopped and precluded from afterwards taking an action to- 
recover further damages resulting from such exercise of their 
powers beyond those included in the award, (i) 

As it was said by Baron Cleasby in Buccleuch v. Met. Bd. of 
Works : " The award cannot be explained, or varied, or extend- 
" ed, by extrinsic evidence of the intention of the person making 
" it ; " (2) and by Lord Blackburn in the Exchequer Chamber : 
"Though the judgment of a limited tribunal is not final on a 
" question of jurisdiction, yet if that tribunal has jurisd : ction,, 
" the decision of a point within its jurisdiction, whether on the 



(1) Duke of Buccleuch v. Metropolitan Board of Works, L. R., 5 H. L, 
418; Crofts L. & N. W. Ry. Co., 32 L. J. Q. B. 113 3 B. & 8.436 ; 
Todd v. Met. Dist. Ry.Co., 19 W. R. 720; Dar.ey Main Colliery Co. v. 
Mitchell, II App. Cas. 127 ; and see per Erie, C. J.,in Chamberlain v. West 
of London & Crystal Palace Ry. Co., 2 B. & S. 617-638 ; and also Knapp 
v. G. W. R. Co., 6U. C. C. P. 187; Vanhornz>. G.T.R. Co., gU.C.C.P. 
264 ; Lesperance v G. W. R. Co., 14 U. C. Q. B. 187 ; Wallace v. G.T.R. 
Co., 16 U. C. Q. B. 551; Utter v. G. W. R. Co., 17 U. C. Q. B. 392; 
McGillivray v. G. W. R. Co., 25 U. C. Q. B. 69 ; Crewson v. G. T. R. Co., 
27 U. C. Q. B. 68 ; Nichol v. Can. Southern Ry. Co., 40 U C. Q . B. 583 ; 
Tolton v. C. P. R. Co , 22 O. R 204 ; and Lan. & York Ry. Co. v. Evans,. 
15 Beav. 322 ; Lawrence v. Great Northern Ry. Co., 16 Q. B. 643. 

(2) L. R.,sH. L. 434. 



i88 THE RAILWAY LAW OF CANADA. 

" law or the fact, cannot be received except in a Court having 

" jurisdiction to sit as a Court of Appeal from that decision 

" Now, in cases where an award is good on the face of it, but 
" the arbitrator has made a mistake either of law or fact, if that 
" mistake had been as to a matter within the arbitrator's author- 
" ity, then, inasmuch as there is no Court of Appeal from the 
" arbitrator, the mistake cannot be remedied, nor can the Court, 
" even in the exercise of its equitable jurisdiction, set aside the 
" award, unless it can be shewn that there was misconduct or 
" some other equitable ground of interference. But if the mis- 
" take has been as to the extent or nature of the arbitrator's 
" authority, leading him to exceed it, then, ... the award may be 
" impeached as being made without jurisdiction." (i) 

Under our Act the party would have an appeal to the Courts 
upon any question of law or fact, such appeal to be decided 
upon the evidence taken before the arbitrators. (2) 

To summarize, it may be said that, apart from this right of 
appeal, where a proprietor's lands have been taken under the 
authority of the Act, and his damages have been assessed by 
the arbitrators, he cannot afterwards recover by action any 
damages caused by the exercise of the company's powers which 
it was within the jurisdiction of the arbitrators to give compen- 
sation for, and which they could reasonably foresee, unless they 
arise from a negligent or improper exercise of those powers, 
inasmuch as such damages are deemed to be covered by the 
award. (3) 

In a recent case, however, (4) these principles were departed 
from by the Court of Appeals of Quebec, where it was held that 
a proprietor might recover, by action, interest on the amount of 
an award from the date of the taking possession of his land by 
the railway company, though it was admitted by the Court that the 
awarding of such interest was within the jurisdiction of the arbi- 
trators. In face of the decision of the highest Court in England, 



(i) L. R., 5 Ex. at pp. 231-232. 
O) Sec. 161. 

(3) Ubi supra p. 186, and as to statutory remedy being exclusive and not 
merely cumulative, see East & West India Dock & Birmingham Junction 
Ry. Co. v Gattke, 3 Mac. & Gor. 155, 3 Eng. L. & Eq. 59 ; Watkins v. 
~Great Northern Ry. Co., 16 Q. B. 961, 6 Eng. L. & Eq. 179. 

(4) A. & N. W. Ry. Co. v. Learning, Que. R., 3 Q. B. 165. 



EMINENT DOMAIN. 189. 

it is difficult to see how this decision can be supported in prin- 
ciple. The awarding of interest upon the value of the land, as com- 
pensation to the proprietor for the damage resulting to him from 
his being deprived of the use of it from the time the company 
took possession, was clearly within the jurisdiction of the arbi- 
trators, and the damage could not only be foreseen, but was 
patent. While the proprietor might upon appeal under section 
161 have had the award increased by the amount of the interest, 
representing the loss of enjoyment of his land, it would seem 
clear, upon the principle laid down in the cases cited, that he 
could not maintain an action to recover it in excess of the 
amount of the award. 

4:2. The form in which the award is to be made is not specified Form of 
in the Act, except in so far that it is required by section i6i, award - 
that it shall stale clearly the sum awarded, and the lands or 
other property, right or thing for which such sum is to be the 
compensation ; 

43. But before considering the form of the award and tie Desistment 
essentials to its validity and on what grounds it may b.- from notice, 
attacked, it may be well to point out that the company have the 
power of desisting from and abandoning the notice of ex- 
propriation, and all proceedings had under it in certain specified 
cases under section 158 of the Act. It is there provided that in 
any case where the notice improperly describes the land or mate- 
rials intended lo be taken, or where the Company decides not to 
take the land or materials mentioned in the notice, it may abandon 
the notice and all proceedings thereunder ; but in such case the 
company is liable to the proprietor notified for all damages or 
costs incurred by him in consequence of the notice and abandon- 
ment. After such desistment the company may give a new notice, 
to the same proprietor or any other proprietor, for other lands or 
material, or for the same lands or materials differently described. 
Under the conditions of the previously existing Act, (i) the cases 
in which such abandonment might be made were not specified; 
it was simply provided that the company might abandon the 



(i) R. S C., cap. 109, s. 8, 26 ; the provisions of the present Provincial 
Acts are similar to those of the old Federal Act, see Appendix, sec. 158. 



i go THE RAILWAY LAW OF CANADA. 

notice, and give a new notice as already mentioned. It was 
held, under the old Act, by the Quebec Court of Appeals, in the 
case of 7 he Seminary of Ste. Therese v. C. P. Ry. Co., that 
once the company had given notice of expropriation, and had 
taken possession of the lands, they could not discontinue the 
proceedings, even on payment of the damages incurred. 

This decision was practically confirmed by the Supreme 
Court, (i) though not expressly, for the Court there decided 
that there was no appeal to that Court ; but some of the judges 
expressed themselves as strongly of the view adopted by the 
Court of Appeals, namely, that once the notice of expropriation 
had been given and the company had taken possession of the 
lands, they could not retreat from that position, but must take 
the lands and make such compensation as the arbitrators might 
assess, in other words, that the abandonment must take place 
while the notice is still a notice, and before the intention- has 
been exercised by taking the lands. 

The same view was taken in an early Ontario case. (2) In 
later cases, however, it was held that the company could desist 
from their notice at any stage of the arbitration proceedings 
before the award was rendered ; (3) but that, having once desist- 
ed and given a new notice, the company could not desist from 
the second notice after the arbitration proceedings had begun. 
(4) But where the land owner had objected to two successive 
notices of expropriation, on the ground that the company had 
no right to take any part of his land, and the company desisted 
from both notices, and gave a third from which also they 
desisted, it was held that the company had not exhausted their 
powers of desistment, and that the land owner could not validly 
object to the abandonment of proceedings which he had pre- 
viously contended the company had no power to take. (5) It 
has also been held in Ontario that a new notice must be given 
with the desistment, and that without it the old notice remains 
in force to uphold an award under it. (6) 

(1) T2 L. N. 338, S. C. R. 1889, 16 S. C. R. 606. 

(2) G. W. R. Co. v. Miller, 12 U. C. Q. B. 654. 

(3) Grimshaw v. G. T. R. Co., 15 U . C. Q. B. 224 and 19 Q. B. 493 ; 
Cawthra et al. v. Hamilton and L. E. Ry. Co., 35 Q. 'B. 581. 

(4) Moore^. Central Ont. Ry. Co., 2 O. R. 647. 

(5) Re Hooper & The Erie & Huron Ry. Co., 12 P. R. 408. 

(6) Widder v. Buffalo & Lake Huron Ry. Co., 24 U. C. Q. B. 222. 



EMINENT DOMAIN. 191 

Under the Act as it stands to-day, however, it would appear 
that the company could abandon their notice, and in the lan- 
guage of the Act " all proceedings thereunder," at any time, in 
the cases specified, even after possession had been'taken. 

The Company's engineers or surveyors may often make mis- 
takes in the description of the lands in the notice given to the 
proprietor, or in the laying out of the line, and it would seem 
unjust in such a case that the company could not have the power 
to desist from their expropriation proceedings, when they discov- 
ered the mistake, which might be only after they had begun 
work. 

In such cases it would appear that under the Act as it now 
stands, the . company would be entitled to desist from their 
notice, and the proceedings had under it at any time. The lan- 
guage of the Act is now broader than it was before, inasmuch as 
it includes not only the abandonment of the notice but of all 
proceedings had thereunder; and it would therefore seem to 
give the company the right to* desist from the expropriation of 
any land, and to take other land in its place, either from the 
same proprietors or others, at any stage of the proceedings, (i) 
At the same time, it must always be remembered that the com- 
pany must pay for their mistakes, and are liable to the proprietor 
for all damages and costs which they have caused either by the 
giving of the notice or the execution of its works, or any pro- 
ceedings which may have been taken under the notice. 

These damages and costs may be of various kinds. If the 
company has commenced operations upon the land, and made 
excavations, or built embankments, or done other work upon 
the property which would disfigure it or damage it in any way, 
they must pay for such damages, if they abandon the property 
or any part of it ; (2) and it might be that even though they had 
done no works upon the property, yet if, by the deposit of the 
plan and giving the notice, they had prevented the proprietor 
from using the land, or from selling or otherwise disposing of it, 
he would be entitled to any damage which he could prove result- 
ing therefrom. 



(1) See Nehan v. St. Catharines & N. C. Ry. Co., 16 O. R. 459. 

(2) Wilkesx'. Gzowski, 13 U. C. Q. B. 308. 



192 THE RAILWAY LAW OF CANADA. 

Form of 44. To return to the form of the award, it must of necessity be 

award. m vvriting, (i) and it should be signed by the three arbitrators or 

by the majority of the arbitrators, at a meeting held at a time 
and place of which the three arbitrators had at least two clear 
days notice, or which had been fixed at a previous meeting (2) 
when the three arbitrators were present. 

According to section 161 of the Act, (3) as already pointed 
out, the award must state clearly the sum awarded and the lands 
or other property, right or thing for which such sum is to be the 
compensation, but the person to whom the same is to be paid 
need not be named in the award. 

The award must be final ; (4) the compensation must consist 
of a fixed or capital sum of money, and not of future periodical 
payments dependent upon future events, such as the completion 
of a certain work. Such an award would be void for uncertainty. 

(5) 

The lands or the right or thing for which the compensation is 
awarded must be not only clearly but correctly described in the 
award, and the award must show in a clear and precise manner 
that the lands are those described in the notice of expropriation, 
without its being necessary to have recourse to extrinsic proof 
to establish that fact. (6) But where arbitrators have valued 
the land as a whole, and not at so much by the admeasurement, 
an error in the extent will not invalidate the award. (7) And 
where the notice of expropriation and the award both described 
the lands expropriated as lot number i, on the plan of the railway 
company deposited according to law, but in another part of the 
notice the lands were described as part of a cadastral lot No. 
2345, and in the award as forming part of the lots 2344 and 2345, 
it was held by the Supreme Court that there was no uncertainty, 
as the wording of the notice and the award was sufficient in 



(1) In the Province of Quebec it should be in notarial form, C. C. P., 
art. 1352 ; and see Benning v. A. d^ N. W. Ry. Co., M.L. R., 5 S. C. 136, 
6Q.13. 385. 

(2) Sec. 152. 

(3) Supra p. 189. 

(4) G. W. R. Co. v. Laderonte, I P. R. (Ont.) 243. 

(5) Bourgouin v. M. O. & O. Ry. Co., 23 L. C. J. 96, 5 App. Cases 381. 

(6) N. S. Ry. Co. v. Beaudet, n Q. L. R. 239. 

(7) N. S. Ry. Co. v. Ursulines of Quebec, Ram. Dig., 60 Q. B. 



EMINENT DOMAIN. 193 

itself to describe the property intended to be expropriated and 
for the taking of which the compensation was awarded, (i ) 

In another Quebec case it was held that when the award is 
obscure, and does not indicate sufficiently whether the lands for 
which the compensation was awarded are the same as those des- 
cribed on the railway company's plan, the Court can demand 
explanations of the award, but cannot change nor modify the 
conclusion to which the arbitrators have come. (2) The sound- 
ness of this decision may be doubted in view of the decision of 
the Court of Appeals of Quebec in the case of the North Shore 
Railway Co. v. Beaudett above referred to. (3) Where there is 
an adequate and sufficient description with convenientcertainty of 
the land intended to be valued and of the land actually valued, 
such award cannot afterwards be set aside on the ground that 
there is variation between the description of the land in the notice 
of expropriation and in the award, (4) and it is not necessary 
to set out the lands by metes and bounds. (5) 

As to what the award should and should not contain, some 
very clear and pertinent suggestions were made by the late Chief 
Justice Robinson in the Ontario case of Great Western Ry. Co. 
v. Baby, (6) where that learned judge said : " It should be clearly 
" expressed in the first place that the sum awarded is given for 
" the value of the lands and tenements or private privileges pro- 
" posed to be purchased, (and) or the amount of damages which 
" the claimant is entitled to receive in consequence of the in- 
" tended railroad in and upon his lands (as the case may be) ; and 
" that the award should either be silent in regard to any other 
" matter on which the Statute gives any authority to the arbitra- 
" tors to give a direction, or that, if the estimate has been in- 
" fluenced by anything which the company has engaged to do in 
" order to lessen the inconvenience, it should be plainly expressed 
" that the company have undertaken to do it, and the particular 
" thing should be so denned as to leave no uncertainty and no 



(1) Beaudett. N. S. Ry. Co., 15 S. C. R. 44. 

(2) N. S. Ry Co. v. 1'Hopital du Sacr Cceur, 15 R. L. 599, Q. B. 

(3) iiQ.L. R., 239. 

(4) Bigaouette v. The N. S. Ry. Co., 17 S. C. R. 363, and see Miller r.. 
G. W. Ry. Co., 13 U. C. Q. B. 582. 

(5) G. W. R. Co. v. Rolph, i P. R. 50. 

(6) 12 W. C. Q. B. 106. 



194 THE RAILWAY LAW OF CANADA. 

" room for future litigation about what is to be done or allowed 
" by the company, and at what particular point in their work 
"and in what manner it is to be done. It would be better, too, 
" that an undertaking under the seal of the company, securing 
" the advantage or privilege in precise terms, should be taken, 
" and if they will not give such undertaking, there shall be no 
" allowance made for such proposed advantages or privileges in 
" estimating the value or damages to be paid by the company." 

The wisdom of the suggestion of the learned judge as to un- 
dertakings by the company is illustrated by several Ontario 
cases. For instance, where the evidence before the arbitrators 
had been closed, the construction committee of the railway com- 
pany wrote a letter, addressed to the party to be expropriated, 
agreeing to certain things whereby the damage to his property 
would be lessened, and this letter was communicated to the com- 
pany's arbitrator and the umpire, but not to the* party expro- 
priated himself until the award was rendered, which contained 
recitals of the benefits proposed by this letter, and assessed the 
compensation at the sum originally offered by the company. The 
award was held bad. (i) 

Again, where the arbitrators stated in their award that " we 
"have taken it for granted in making this award that the said 
" C. H. shall have the right to cross the railway track from one 
" part of his property to another," the award was held not to be 
sufficiently definite or certain. (2) For the same reason, an 
award containing a reservaiion in the following words, " preserving 
to Dods the right to cross the railway line from one portion of 
the said land to the other," was held bad, as far at least as the 
reservation was concerned, on the ground that such an absolute 
reservation was unauthorized, and if not was so indefinite as to 
be invalid. 

Remedies 45. Ail appeal lies from the award under section 161, where 

against t >-' the amount exceeds $400 to a Superior Court of the Province in 

which the lands are situated, upon any question of law or fact ', 

questions of fact to be decided upon the evidence taken before 



(1) Herring v. Napanee etc. Ry. Co., 5 O. R. 349. 

(2) G. W. Ry. Co. v. Hunt, 12 U. C. Q. B. 124; and see Starnes v. 
Molson, 29 L. C. J. 278. 



EMINENT DOMAIN. 195 

the arbitrators as in a case of original jurisdiction. This right 
of appeal, however, does not affect the existing law or practice 
in any province as to setting aside awards, (i) Under this sec- 
tion it would appear that where there is clearly an error of law 
or fact on the part of the arbitrators apparent on the face of the 
award, or so appearing from the evidence and documents of 
record, an appeal would lie, and where the arbitrators have ex- 
ceeded their jurisdiction and taken into consideration matters 
which they had no right to consider in assessing the amount of 
the compensation, or have neglected to take into consideration 
matters within their jurisdiction. But if these facts could only 
be established by extrinsic evidence outside of the award or of 
the record, the proper recourse would seem to be by an action 
to set aside the award, as also where the award contains nulli- 
ties in itself, or the arbitrators have not complied with the require- 
ments of the Act. (2) Where the arbitrators have omitted some 
ground of damage within their jurisdiction, it would seem that 
the proper course would be by appeal, and it is doubtful whether 
an action to set aside would lie in such case, and as to whether 
the arbitrators could be examined in such an action to establish 
such omission. (3) Where, however, the arbitrators have 
awarded a sum as a part of the compensation for a matter with- 
out their jurisdiction, they may be examined to establish the 
fact. (4) 

Where the amount of the compensation is alone in question, 
the proper remedy would be by way of appeal, and not by 
action ; and it has been held by the Privy Council, that in an 
action to set aside the award, the Court will not look at the amount 
of the compensation, so long as in fixing that amount the arbi- 
trators were acting within their jurisdiction. (5) But the 
Superior Court of Quebec, in a later case, while holding that 
when all the requirements of the law have been observed, the 
award is final and conclusive, and the amount of the compensa- 



(1) Ibid, par. 4. 

(2) But see M. O. & O. Ry. Co. v. St. Denis, Que. R., 2 Q. B. 532. 

(3) Duke of Buccleuch v. Met. Brd. of Works, L. R., 5 H. L. 418; 
Wood v. A. & N. W. Ry. Co., Que. R., 2 Q. B. 333. 

"(4) Duke of Buccleuch v. Met. Brd. of Works, supra . 
(5) Bourgoin v, M. O. & O. Ry. Co., 5 App. Cases 381. 



196 THE RAILWAY LAW OF CANADA. 

tion entirely within the discretion of the arbitrators, and in the 
absence of fraud or other particulars not subject to icview by the 
Court, nevertheless held, that inadequacy in the sum awarded 
may be such as in itself to constitute proof of legal fraud on the 
part of the arbitrators, and in such case the Court may annul and 
set aside the award by reason of such fraud ; but to justify such 
action by the Court, the sum awarded must be so grossly and 
scandalously inadequate as to shock the sense of justice, (i) 

It may be observed with regard to this case, that the holding 
referred to was a dictum of the learned judge not necessary for 
the decision of the case, inasmuch as the award was maintained. 
While it may be that such scandalous inadequacy or gross exag- 
geration in the amount of an award as to amount to a presump- 
tion of fraud may justify the Court in setting it aside, (2) the pi oof 
would have to be of the strongest, (3) and it may be well doubted 
whether anything short of actual fraud would justify the Court 
in so doing. (4) The more proper recourse would now seem to 
be by an appeal upon the evidence taken before the arbitrators. 

There are many grounds on which awards may be set aside 
by action besides those which have been already referred to. 
Section 161 provides that the award shall not be invalidated by 
reason of any want of form or other technical objection if the re- 
quirements of the Act have been substantially complied with. As 
to what are the requirements of the Act which must be com- 
plied with on pain of nullity, in the first place the arbitrators must 
be properly appointed, and though the method of the appointment 
of the arbitrators could be shown by any legal proof outside of the 
award, it is better that the method of their appointment should be 
shown upon the face of the award. In the case of Atlantic & N. 
W. JRy. Co. v.Johnson, (5) the judge refused to grant an order 
for the payment of money in accordance with the award, where it 
was not stated on its face in what manner the third arbitrator 
had been appointed. 



(1) Benning v. The A. & N. W. Ry. Co., M. L. R., 5 S. C. 136, 6 Q. B. 

3S5- 

(2) Norvall v. C. S. Ry. Co., 5 O. A. R. 13 ; G. W. R. Co. v. Baby. 
12 U. C. Q. B. 106 ; G. W. R. Co. v. Dodds, ibid. 133. 

(3) In re G. W. R. Co. & Chauvin, I P. R. (Ont.) 288; Widder v, Buf- 
falo & Lake Huron Ry, Co., 24 U. C. Q. B 520, and 27 Q. B. 425. 

(4) Ibid. (5) 10 L. N. 228. 



EMINENT DOMAIN. 197 

Then the arbitrators and the witnesses must be sworn ; and 
it is better that this also should be stated in the award, for it has 
been held that such statement on the face of the award makes 
sufficient proof of the fact of their having been sworn ; (i) 
though if it does not so appear by the award itself, the fact of 
their having been sworn can be established by any other valid 
proof. The omission to swear the arbitrators, this being one 
of the requirements of the Act, will invalidate the award. (2) 
The evidence must be taken down in writing, and as this is a 
requirement of the Act, failure to do so would be a ground for 
invalidating the award. (3) The award must be rendered within 
the time fixed by the arbitrators, and it is provided in the Act, 
as already pointed out, (4) that if it is not rendered on the day 
fix-d, or on some other day to which the time for making it has 
been extended, either by consent of the parties or by resolution 
of the arbitrators, the amount offered by the company is to be 
the compensation paid. This provision of the Act is express, 
and it appears to be inevitable that an award rendered after the 
delay had expired would be a nullity, and would be set aside on 
action, and the amount offered by the company declared by 
the Court to be the only amount to which the proprietor would 
be entitled. The Act further requires that this day should be 
fixed at the first meeting of the arbitrators after their appoint- 
ment, and an award was set aside by the Court of Appeals in the 
case of Beaudet v. The North Shore Ry. Co., (5) where the arbi- 
trators had failed to fix a day at their first meeting. The judg- 
ment, however, went on other grounds also, holding that the 
property was not clearly described, and that the award was un- 
certain. The case went to the Supreme Court, where the award 
was restored, the Court holding that the property was sufficiently 
described for the purposes of identification, and that there was 
no uncertainty. (6) It does not appear from the report what was 
the decision of the Supreme Court on the other point, but it 



(1) Mills v, A. & N. W. Ry. Co., M. L. R., 4 S. C. 302. 

(2) Whiifieki v. A. & N. W. Ry. Co., 33 L. C. J. 25, 

(3) The evidence may be taken by stenography if required by either 
party, 54-55 Vic., cap. 51. 

(4) Sec. 156, and supra, p 148. 

(5) iiQ.L. R.239. (6) 158. C.R. 44. 



198 THE RAILWAY LAW OF CANADA. 

must have been adverse to the holding of the Court of Appeals, 
as otherwise the award could not have been upheld. Probably the 
Court looked upon this provision of the Act as merely directory 
and not imperative, and that the provision had been substantially 
complied with by the arbitrators having fixed a day at a subse- 
quent meeting to the first meeting. This would appear to be a 
correct view to take of the matter. It is a mere matter of form 
whether the arbitrators fix a delay at their first meeting or at 
some subsequent meeting, and where tht parties have proceeded 
with a knowledge of the fact, no doubt they would be estopped 
from raising this want of form in an action to set aside. 

The delay for rendering the award may be prolonged either 
by the consent of the parties or by resolution of the arbitra- 
tors, (i) As to the manner of extending the delay, it has been 
held by the Superior Court of Quebec in the case of The Ctire, 
etc., of St. Anne v. The O. & Q. Ry. Co., (2) and confirmed in 
Appeal, (3) that where an award has been rendered long after 
the day fixed at the first meeting of arbitrators, and though there 
was no written consent of the parties and no resolution of the 
arbitrators fixing another day, yet the consent would be pre- 
sumed from the fact that meetings had been regularly adjourned 
from time to time, and notice of such adjournment given to the 
company's arbitrator. This case would appear to be of doubtful 
authority, inasmuch as the consent of the party could only be 
presumed where he knew that the day fixed had been passed, 
and there was no evidence in this case to show that the com- 
pany had any knowledge of what day had been fixed for the ren- 
dering of the award, and as a matter of fact, it appeared that 
they were not represented at the first meeting, when the day was 
determined on by the arbitrators. It would be different in the 
case of a submission in writing, signed by the parties, in which 
the delay for rendering the award was fixed. If the parties con- 
tinued after that date to bring up witnesses, attend the meetings of 
the arbitrators, etc., this might imply a consent to the extension 
of the delay, (4) or a recognition that the arbitrators' authority 
had not expired. 



(I) Sec. 156. (2) M. L. R., 5 S. C. 51. 

(3) M. L. R., 7 Q. B. no. 

(4) See Earl of Darnley r. Lon., Chat. & Dover Ry. Co., L. R., 2 H. of 
L-43- 



EMINENT DOMAIN. 



199 



Both parties are entitled to the opinion of the arbitrators, on 
one side or the other, up to the moment that the award is ren- 
dered, (i) The Act very particularly provides that the award 
shall not be rendered without two days' notice to all the arbitra- 
tors. This provision of the Act is in accordance with the princi- 
ple that each party is entitled to the opinion, and the counsel 
and advice, of each arbitrator, up to the moment the award is 
rendered ; and an award rendered in the absence of one of the 
arbitrators, without such notice to him, would be bad. (2) 

The award in the province of Quebec is, under the provisions 
of the Code of Civil Procedure, (3) generally made before a 
notary ; and even though the three arbitrators may have agreed 
upon the amount of the award among themselves, still, either 
party being entitled to have the advice and opinion of all the 
arbitrators up to the moment that the formal award is made 
before the notary, if the award is so made without the notice 
required by the Act, it might be properly set aside by the courts. 

For instance, the three arbitrators, after having heard the evi- 
dence on both sides, and having examined the property and 
deliberated, cannot agree unanimously, but two of them are 
agreed to award a certain amount. The third arbitrator does not 
agree, but differs in opinion from his brother arbitrators, and, 
after discussion, the two arbitrators agree to award a certain 
amount. It is necessary for a valid award that the arbitrators 
should meet in a notary's office, and make a formal award, assess- 
ing the damage at the amount they have agreed upon. The dis- 
senting arbitrator is entitled to a notice of that meeting, that is to 
say, the notice required by the Act of two days ; and even though 
he may have said to his brother arbitrators that he could not 
agree with them, and even though they two after discussion had 
settled the amount of the award, still the opposite party would be 
entitled to his opinion up to the moment that the formal award 
was actually signed, because he might by argument or otherwise 



(1) Herring v. Napanee, T. & Q. l\y. Co., 5 O. R. 349; Norvall v. 
Can. Southern Ry. Co., 9 A. R. (Ont.) 310. 

(2) Can. Southern Ry. Co. v. Cunningham et al., CassePs Dig. 34; St. 
Denis i\ M. & O. Ry. Co., M. L. R , 6 S. C. 484 ; confirmed in Appeal 
Que. R, 2Q. B. 532. 

(3) C. C. i'., Art. 1352; Benning v. A. & N. W. Ry. Co., M. L. R., 6 
Q. B. 3 8 S . 



200 THE RAILWAY LAW OF CANADA. 

change the opinion of the other arbitrators, and the party whom 
he represented would be entitled to the benefit of his opinion, 
(i) The principle has been very strongly upheld in Ontario. 
It has been invariably held there that both parties to the arbi- 
tration are entitled to the benefit of the opinion of each arbitra- 
tor up to the moment that the award is rendered. (2) And in 
the case of Norvall v. Canada Southern Ry. Co., (3) the doc- 
trine was carried to the furthest extent. The arbitrator for the 
party complaining against the award had, in that case, refused to 
attend a meeting for the purpose of signing a formal award : 
that is to say, all the parties having met after hearing the 
evidence, etc., and it being found that this arbitrator could not 
agree with the others, and two of them having come to an agree- 
ment as to the amount to be awarded, it was suggested that they 
should meet and render a formal award ; thereupon the dissent- 
ing arbitrator stated that he would not meet them again, that it 
was impossible for him to come to any agreement, and that 
there was no practical object to bs served by meeting again, and 
he declined to meet the two arbitrators thereafter. The 
other two arbitrators rendered their award without having given 
notice to the third of the day on which the formal award was to 
be rendered ; and it was held that inasmuch as The Railway Act 
required that notice must be given to the dissenting arbitrator, 
in order to give validity to the decision of the majority, the 



(1) St. Dents v. M. & O. Ry. Co., Que. R., 2 Q. B. 532. But see Cure' 
of Ste. Anne v, O. & Q. Ry. Co., M. L. R., 7 Q. B. no, where it was held 
that, where the amount of compensation was entered in the minutes of the 
arbitrators, and on a subsequent day the award was made out in notarial form 
and signed by two of the arbitr.itors, the third not being present o: notified, 
this did not invalidate the award previously made and entered in fie minutes. 
This decision is in conflict with that of the same Court previously rendered in 
Banning r. A. & N. \V. Ry. Co., M. L. R., 6 Q. B. 385, wherein it wasdis- 
tinctly held that the notarial award, and not that entered in the minutes, is 
the true award ; and with the subsequent decision in St. Dents v. M. & O. 
Ry. Co. (supra), that the person selecting an arbitrator is entitled to all the 
benefit which results from his presence, in correcting errors of fact and pre- 
senting by argument the merits of the claim, and that the formal award ren- 
dered before a notary in the absence of one arbitrator without notice to him 
was n.ill. 

(2) Herring T. Nap. T. & Q. Ry. Co., 5 O. R. 349; Norvall v. Can. 
Southern Ry. Co., 9 A. R. 310; City of Toronto v. Leak, 23 Q. B. 223 ; 
MacDonald^. Presant, 16 Q. B. 84. 

(3) 9 A. R. 3'- 



EMINENT DOMAIN. 201 

Court, in the presence of such a direct and absolute provision of 
the Statute, must annul the award, (i) 

Where, however, there has been a proper adjournment, the 
absence of one of the arbitrators at the adjourned meeting would 
not invalidate the award. (2) So where the argument closed on 
a certain day, and the arbitrators adjourned to the next day, 
when after discussion one of them refused to concur with the 
others as to the amount of compensation, and withdrew, and the 
other two then signed the award, and three days afterwards 
acknowledged it in the presence of a witness, it was held that the 
award was valid both under the statute and at common law. (3) 

The grounds stated hitherto have been practically matters of 
form, though formalities required by the Act to be observed ; but 
there may be grounds urged which are personal to those who 
have rendered the award. The arbitrators themselves, the 
judges who assess the amount of compensation, may be recused 
on proper grounds. Grounds of disqualification against an 
arbitrator could not be urged upon an action to set aside an 
award, because, under the Act, these grounds must be urged 
before the appointment of the third arbitrator, or in the case of 
a third arbitrator, at the time of his appointment by the judge. 
(4) But if it could be shown that, at a subsequent stage of the pro- 
ceedings, any of the arbitrators had been influenced by improper 
motives, it would be a good ground for setting aside the award* 
The party aggrieved by an unjust award cannot be deprived of 
his right to have it set aside if he can show unfair conduct or 
partiality, (5) fraud, collusion with the opposite party, undue in- 
fluence, or incapacity on the part of the arbitrators. (6) And in 
fact, in practice, these have been the grounds upon which many 
awards hive been contested, whether well founded or not; but 
there is no doubt that if the fact could be established, that even 



(1) See also Anglin -v. Nickle, 30 U. C. C. P. 87; Nott v. Nolt, 5 O. 
R. 283. 

(2) Freeman v. O. & Q. Ry. Co., 6 O. R. 413. 

(3) Freeman v. O. & Q. Ry. Co., 6 O. R. 4(3. 

(4) Sec. 1 60, supra p. 153. 

(5) Hamilton v. Wilsm, 40.8. 1 6. In re McMullen & Cayley,2 U. C. 
Q. B. 175 ; Bull & Bull, 6 U. C. Q. B. 357; Hotckiss & Hall, 7 L. J. 
N. S. 320; Burr v. Gamble, 4 Grant's Chy. 626. 

(6) Williams v. Roblin, 2 Ont. P. R. 234 ; Lawson v. Hutchinson, 19 
Grant's Chy. 84. 



2O2 



THE RAILWAY LAW OF CANADA. 



award. 



Practice. 



one of the arbitrators, whether the arbitrator of the successful 
party or of the losing party, had been so incapacitated, by 
drink or otherwise, as not to be capable of giving an independent 
and sensible proper opinion, or had been influenced in any way, 
or even had accepted refreshments of any kind from any of the 
parties, it would be a ground for setting aside the award, (i) 
Appeals from 46- With regard to the right of appeal given under The 
Railway Act by section 1 6 1, paragraph 3 provides that the pro- 
ceedings upon such an appeal shall be as nearly as may be the 
same as upon an appeal from a decision of an inferior court to 
the Superior Court, subject to any rules or orders which may be 
made from time to time by the Courts. No rules of practice affect- 
ing such appeals have as yet been passed by our judges, so far 
as the author is aware. But in the Province of Quebec the 
practice adoped from the existing procedure in cases of appeals 
to the Superior Courts from Courts of inferior jurisdiction has 
been generally followed, and may be now considered as establish- 
ed. That practice is to apply to the court by a petition, setting 
forth briefly the appointment of arbitrators, the award, including 
a short description of the property or right expropriated, and the 
reasons or grounds upon which the appeal is asked for. Notice 
of this petition is generally given to the opposite party, though it 
is not essential, and a writ is then issued, and the proceedings 
go on summarily, before a judge of the Superior Court. 

The practice in Ontario is by simple notice of motion, which is 
proceeded with summarily, without the issue of a summons, and 
without a written answer. 

47. In order to bring the papers before the Court, the arbi- 
trators are required, at the request of either party, to transmit to 
the clerk of the Superior Court, by registered letter, the deposi- 
tions taken before them, together with all exhibits and papers 
connected with the arbitration, except the award itself. (2) If they 
should fail to do so, a writ of mandamus or certiorari would 
doubtless lie to compel them to bring the papers before the 
Court ; but the usual practice is to make the arbitrators parties 
{mis en cause}, and they are thus subject to the orders of the 

(I) A. &N. W. Ry. Co v. Bronsden, 1893, Q- R -> 2 Q- B - 47- A 
similar judgment was tendered ihe same day in an action by the same appel- 
lant against Trudel respon lent. 

(>} Sec. 155, s<. 2. 



Bringing the 
arbitration 
record into 
court. 



EMINENT DOMAIN. 203 

Court in the case. In Ontario they may be ordered to produce 
the paper on motion. 

48. As to the grounds upon which an appeal may be taken, Grounds of 
of course if it can be shown that the arbitrators have been led a PP ea 
into error on a question of law, their award could be set aside 
entirely, or modified as the case might require. For instance, if 

they had erroneously awarded a specific sum for damages, 
which the Court found they had no jurisdiction or right by law 
to assess, the award might be reduced by that amount, and judg- 
ment entered up for the balance, if any, appearing by the award ; 
or if, on the contrary, they had refused to allow compensation to 
which the party expropriated was entitled, the Couit might 
increase the amount accordingly. 

49. But the Court has not only power to decide questions of Questions 
law, but to decide the facts upon the evidence taken before the of facts, 
arbitrators, " as in a case of original jurisdiction." 

50. There has been a considerable amount of doubt as to the Principles 
principle which should govern courts in adjudicating upon ques- "P on whicl1 
tions of fact upon these appeals, especially as to the grounds interfere upon 
on which the courts would interfere with the discretion of the questions of 

f ICt 

arbitrators as to the amount of the award, either in reducing or 
increasing it. In several instances, the judges of the Superior 
Court in Quebec have increased the amount of the award on 
such appeals by the proprietor, purely on the ground that the 
figures given by the witnesses, as being in their opinion the true 
amount of compensation, showed a greater amount than that 
which the arbitrators had awarded, (i) And in one case, the 
judge went so far as to take an average of the amounts sworn to 
by the different witnesses for each side, and arriving at his judg- 
ment by this rule of thumb, as it were, increased the amount of 
the award by over $20, coo. (2) This method for it cannot be 
called a .principle was, however, strongly condemned by the 
Court of Appeals, (3) where the principle was laid down that the 

(1) Atl. ,j- N. W. Ky. Co. v. Lavallce, S. C. M., 8th Apl., 1889. Award 
increased from $7,420 to $8,460. Reversed in Appeal, and award restored ; 
Q. B., ijth January, 1891. Atl. ,j- N. W. Ry. Co. v. Zoc Descarries, S. C. M., 
1st Sept., 1891. Award reduced from $8,000 to $5,600. Atl. ,j- N. W. Ky. 
Co. v. Whitfield, S. C., 131)1 Sept., 1890. Award increased from $2,600 to 
$5,000. Reversed in Appeal, and award restored ; Q. B., 22nd Dec., 1893. 

(2) Judah v. A. & N. W. Ry. Co., 20 R. L. 527 (3) Ibid. 



204 THE RAILWAY LAW OF CANADA. 

courts should not substitute their judgment for that of the arbi- 
trators, except in cases where they were shown to have fallen 
into gross error, (i) and the Court restored the original award of 
some $30,000. In another case of Lavallee v. The A, & N. W. 
Ry. Co., (2) where both parties had appealed from the award, 
and the Superior Court had increased the amount of the award 
upon the proprietor's appeal, the Court of Appeals again res- 
tored the award. Judge Bosse, in delivering the judgment of 
the Court, said that while a careful perusal of the evidence led 
him to the opinion that the amount of the award was about $1300 
in excess of what he himself would have given, there was not 
sufficient error shown to justify the Court in interfering with the 
discretion of the arbitrators. He pointed out that the arbitrators 
were persons chosen for their special knowledge and experience 
in such matters, and that they had the advantage not only of 
hearing the witnesses, and seeing the manner in which their tes- 
timony was given, but also of examining the property and the 
neighborhood, which facts, in his opinion, put them in a better 
position to decide on the amount of the award than the Courts. 
(3) A number of cases have since been decided by the Quebec 
Court of Appeals, (4) and the principle to be deduced from them 
appears to be that, on an appeal, the Court will not interfere 
with the discretion of the arbitrators unless gross error in law cr 
in fact is shown, and that to disregard the award of the arbitra- 
tors " it would be necessary to prove that they had been influ- 
enced by improper motives, or that the evidence should show 
conclusively that they had made an error, and that the award 
was unfairly and certainly too low, or unjustly and undoubtedly 
too high." (5) In so holding, the Courts have followed the Privy 
Council in the case of Morrison v. City of Montreal. (6) That 
was a case where the proprietor, who had been expropriated, 
took an action under the Statute governing expropriations by the 
city, (7) to have the amount of an award, which had been fixed 

(1) And see Lemoine v . City of Montreal, Allan v. City of Montreal, 
Supreme Court, 3 1st May, 1894, 23 S. C. R. 390. 

(2) Q. B. Que., 17 January, 1891. (3) Ibid. 

(4) M. & O. Ry. Co. v. Bertrand, Q. R., 2 Q. B. 203 ; M. & O. Ry. Co. 
v. Castonguay, Q. R-, 2 Q. B. 207; Can. All. Ry. Co. v Norris, Q. R., 2 
Q .B. 222 ; Wood v. A. & N. W. Ry. Co., Q. R., 2 Q. B. 335. 

(5) Per Wuriele J., in M.& O. Ry. Co. v. Bertrand, Q. R., 2 Q. B., at p. 205. 

(6) 3 App. Cas. 148. (7) 35 Vic., cap. 32. 



EMINENT DOMAIN. 205 

by the commissioners under the Statute, increased. The Statute 
provided in effect that such an action could be taken to increase 
the amount of the award where there was "error" on the part 
of the commissioners. The judge of the Superior Court nearly 
doubled the amount of the award, and went upon the ground 
that he was absolutely bound by the evidence adduced on the 
action taken by the proprietor, for in that proceeding, the evi- 
dence taken before the commissioners did not come before the 
Court, but. only the evidence taken in the action, (i) The Court 
of Appeals reversed the judgment, and the Privy Council con- 
firmed the judgment of the Court of Appeals, holding that the 
discretion of the commissioners should not be interfered 
with, unless gross error was proved, and it was necessary 
that the plaintiff in such an action should clearly prove 
the error complained of. (2) That case was under a 
Statute quite dissimilar from the one under consideration, 
but the principle adopted by the Quebec Court of Appeals 
on appeals under The Railway Act would appear to be the 
same. In Ontario, where this right of appeal has existed 
under a precisely similar clause of a Provincial Act (3) for 
many years, the courts have laid down a definite and decided 
rule to be followed in such appeals. They have said that the 
intention of the Statute was not to make the judge appealed to 
a substitute for the arbitrators; and that the amount awarded 
by the arbitrators should not be increased or reduced, on the 
weight of evidence merely, except in the cases where the Court 
would increase or reduce the verdict of a jury : that is to say, if 
the amount awarded should be so small or so excessive as to 
make it evident that the jurors must have been influenced by 
improper motives or led into error. (4) The cases in which 
the verdict of a jury would be set aside by the Courts are prac- 
tically the same under the Quebec law and the English law, and 
the rule, that the same principle should be applied to an award 
of arbitrators as that which would be applied to the verdict of a 
jury, would seem to be a proper and safe rule, were it not for 

(i) Ibid at p. 157. (2) 3 App. Cas. 148. 

(3) 38 Vic., cap. 15 Ont. ; R. S. O. (1877), cap. 165. 

(4) In re Can. Southern Ry. Co. & Norvall, 41 U. C. Q. B. 195 ; and 
see in re MacLean and The Niagara Falls Park, 14 Ont. A. R. 20 ; in re 
Bush, 14 Ont. A. R. 73 ; and the Queen v. Paradis, 16 S. C. R. 716. 



206 THE RAILWAY LAW OF CANADA. 

the language of the Act, which says that the Court shall decide 
questions of fact upon the evidence taken before the arbitrators 
as in a case of original jurisdiction. The inference to be drawn 
from this language would appear to be that, upon such an ap- 
peal, it is not a question of the Court substituting its discretion 
for that of the arbitrators, but that the Court must examine and 
weigh the evidence, and decide upon that evidence whether the 
facts proved justified the award or otherwise, and adjudge 
accordingly. It has already been held by our Courts in a 
number of cases already cited, (i) that awards might be set 
aside by action for grossly excessive or inadequate compensation, 
but only in extreme cases. The intention of the legislature in 
giving a right of appeal on questions of fact seems to have been 
to grant a larger remedy against awards of arbitrators under the 
Act, than previously existed by way of action to set aside the 
award. The effect of the interpretation placed up'on this section 
of the Act by the Courts in the cases before cited would tend 
to nullify its provisions, and place the party appealing in almost 
the same position as though the remedy was limited to that 
already existing by an action to set aside the award. The 
remedy by way of appeal under the Statute would be little if at 
all greater than that previously existing at common law. How- 
ever, the Privy Council would seem to have affirmed the prin- 
ciples laid down by the Quebec Court of Appeals in the case of 
Norris v. The Canada Atlantic Ry. Co. (2) On an appeal to 
their Lordships in this case, the judgment of the Court of Appeals 
was confirmed. (3) But a careful examination of the judgment 
of their Lordships in this case will show that the holding of the 
Court of Appeals is not correctly stated. Sir Richard Couch in 
delivering their Lordships' judgment said : "The Court of Queen's 
" Bench went fully into the matter, and laying down what they 
'* considered to be the proper test of the value of the property, 
" arrived at the conclusion that the award ought to stand. Their 
" Lordships entirely agree in the judgment of the Court of 
" Queen's Bench." (4) It is tiue that the Court of Appeals 
examined the evidence taken before the arbitrators, but the 



(i) Supra p. 204. (2) Que. R., 2 Q. B. 222. 

(3) Mussen i 1 . Can. Atlantic Ry. Co , 17 L. N. 179. (4) 17 L. N. 180. 



EMINENT DOMAIN. 207 

principle on which they went, to quote the language of Hall J. 
in rendering the judgment of the Court, was as follows : " The 
" experts selected and appointed in this -case appear to have 
'' been men of more than ordinary experience. No insinuation 
'' is made on either side against their probity and disinterested- 
%i ness. They must be presumed to have taken into considera- 
" tion every reason and argument pro and con which were 
" adduced before the Court below, and which have been sub- 
" mitted to us, and while a Court has clearly the right under 
" The Railway Act, to reconsider the evidence and to vary the 
" decision of the experts or a majority of them, this power was 
" clearly intended as a check only upon possible fraud, acci- 
" dental eiror, or gross incompetence, and never to be exercised 
" unless in correction of an award, which earned upon its face 
" unmistakable evidence of serious injustice." (i) 

After discussing the evidence the learned judge proceeded as 
follows : " While we cannot assert that the amount awarded by 
<' them is the precise conclusion, less or more, to which we would 
" have arrived had it fallen to us to make the preliminary valua- 
" tion of these damages, we do not feel certain that any other 
" result would have more accurately represented the real depreci- 
" ation which the property has sustained by this expropriation." 
(2) This can hardly be said to be a decision upon the evidence 
by the Court as in a case of original jurisdiction as provided by 
the Act. The formal judgment of the Court reads as follows : 
" Considering that it is not proved that in the award there is 
" error, doth dismiss the appeal." (3) The Court thus seems 
to have followed the decision of the Privy Council in the Mor- 
rison case (4) under a different statute where it was necessary 
that error should be proved by evidence adduced before the 
Appellate Court, and where the evidence taken before the arbi- 
trators was not before the Court. The Lordships of the Privy 
Council, however, evidently did not look with favor upon ap- 
peals in such cases as was said by Sir Richard Couch. " They 
" think, looking to the fact, that this was the decision originally 
" of a majority of arbitrators, who were said in the judgment of 

(1) Can. Atlantic Ry. Co. z>. Norris, Que. R., 2 Q. B. at p. 226. 

(2) Ibid, p. 229. (3) Ibid, p. 229. 
(4) 3 App. Cas. 148. 



208 THE RAILWAY LAW OF CANADA. 

" the Court of Queen's Bench to have been experts, and to 
" have been men of more than ordinary business experience, and 
" looking further to the fact that the arbitrators had the advan- 
" tage of seeing and hearing the witnesses who were examined 
" before them,, that an appeal from a decision given in such 
" circumstances, upon a question which was merely one of value, 
" is one which should be discouraged." (i) 

Since the decision of this case, the question as to the true inter- 
pretation to be placed upon this section of the Act has been 
finally decided by the Privy Council, after full argument, in the 
case of The Atlantic & North West Ry. Co. v. Wood. (2) This 
appeal was argued solely upon the ground, that under the Statute 
the Court below should have examined and weighed the evi- 
dence, and decided upon it whether the amount awarded was 
justified ; and that the Court had failed to do so, and had pro- 
ceeded upon the principles previously laid down by them in 
the Norris case. Their Lordships held that the Court below 
had sufficiently complied with the Statute. Lord Shand in 
delivering the judgment said : " The Court dealt with the 
" award as one which it was their province to review on the 
" facts as appearing on the evidence adduced before the arbi- 
" trators, and in so doing in the opinion of their Lordships they 
" acted rightly and in accordance with the statute. It would 
" be a strained and unreasonable reading of the words of the 
" statute, ' as in a case of original jurisdiction,' to hold that the 
" evidence was to be taken up and considered as if it had been 
" adduced before the Court itself in the first instance and not 
'* before the arbitrators, and entirely to disregard the judgment 
" of the arbitrators and the reasoning in support of it. Such a 
" reading of the statute would really make the Court the arbi- 
" trators and the sole arbitrators in every arbitration in which 
" an appeal on questions of fact was brought against an arbi- 
" trator's award. It appears to their Lordships that this was 
" not the intention of the Legislature, and that what was intend- 
" ed by the statute was not that the Court should thus entirely 
" supersede and take the place of the arbitrators, but that they 
" should examine into the justice of the award given by them 

(1) Per Sir R. Couch, 17 L. N. 180. 

(2) 18 L. N. 140, II R. 26. 



EMINENT DOMAIN. . 209 

" on ils merits, on the facts as well as the law. Previously to 
" this enactment the Court had power only to approve of or set 
" aside the award of arbitrators. This might often cause much 
" expense and inconvenience in renewed proceedings before 
" the arbitrators, and the purpose of the Legislature seems to 
" have been to enable the Court to avoid this, by giving power 
" to make or rather to reform the award by correcting any 
" erroneous view which the arbitrators might have taken of 
" the evidence ; that, in short, they should review the judgment 
" of the arbitrators as they would that of a subordinate Court, 
" in a case of original jurisdiction, where review is provided 
" for." (i) 

51. The effect of the award as to costs depends upon the Costs of arbi- 
amount ofthe compensation awarded as compared with the amount trat i n - 
offered by the company. If the amount awarded is greater than 
that offered by the company, the company must pay the costs, but 
otherwise they must be paid by the proprietor, that is to say, if 
the amount is equal to or less than the amount offered. In the 
latter case, the costs may be deducted from the amount of com- 
pensation awarded. (2) 

Notwithstanding the apparently clear provisions of the Act on 
this point, a serious question as to its interpretation was raised 
in an Ontario case. 

On the day that the arbitrators met, the railway company exe- 
cuted an agreement for a crossing over the proprietor's land, in 
addition tothe money payment, and it appeared that the arbitrators 
took the matter of the crossing into consideration in making their 
award. The amount of the award was less than the sum offered 
by the company, and both parties claimed to be entitled to the 
costs of the arbitration, the company because the award was 
less than their offer, and the owner because the value of the 
crossing should be added to the sum awarded, which would 
make it greater than the offer. It was held that under the cir- 
cumstances neither party was entitled to costs. (3) 



(1) 18 L.N. at p. 145, ii R. May at p. 31. 

(2) Sec. 154. 

(3) Ontario & Quebec Ry. Co. T-. Philbrick, 12 S.C.R. 288; 50. R. 674. 

14 



210 THE RAILWAY LAW OF CANADA. 

The amount of the costs, if not agreed upon between the parties, 
may be taxed by the judge, (i) These costs include the fees of 
the witnesses, the arbitrators, (2) and of the counsel representing 
the parties before them, and are practically within the discretion 
of the judge, and the decision of the judge in such a case cannot 
be appealed from. He is a persona design at a under the .Act, and 
consequently there is no appeal from his decision. (3) 

The Courts have refused to allow special fees to witnesses for 
the time expended in examining the property prior to giving 
their testimony, or preparing a report for the benefit of the party 
in whose favor they were to give testimony. (4) The arbitrators 
themselves seem lo have no power under the Act to award costs 
in favor of either party. They can only assess the compensation 
and damages to which the proprietor is entitled ; and awards 
giving costs to either party have been held to be bad in that 
respect, but may be abandoned as to the part awarding costs, 
and remain valid as to the compensation. (5) The costs are to 
be taxed by the judge, according to the amount of compensation 



(1) Sec. 154. 

(2) Arbitrators' fees may be referred to the master for taxation. Scott v. 
G. T. K., 3 Ont. P. R. 276. 

(3) The taxation of a bill of costs by a judge in chambers under the author- 
ity of The Quebec Railway Act is not subject to revision by another judge 
sitting in bane. Mailhiot et al. v. Burroughs, I L. N. 291 ; 22 L. C. J. loo. 
1878. 

A judge of the Superior Court may, in his discretion, allow fees to counsel 
on an arbitration to fix the indemnity to be paid for lands taken by a railway 
company conducted under the provisions of The Quebec Railway Act, 43-44 
Vic., cap. 43, 9, and there is no power in the Court to revise such taxation. 
The Montreal & Sorel Ry. Co. r-. Vincent et al., Q. B., Nov. 24, 1884; 
M. L R, 4 Q. B. 404; and see Jenkins r. Central Ontario Ry. Co., 4 
O. R. 593 ; Can. Pac. Ry. Co. v. Seminary of Ste. Tr.erese, 16 S. C. R. 606; 
and In re Kingston & Pembroke Ry. Co. v. Murphy, II Ont. P. R. 304. 

(4) Atlantic & N. W. Ry. Co. v. Walker, No. 216 S. C. M. 2oth April, 



(5) Held, no objeciion to award that arbitrators awarded costs, for if un- 
authorized it was separable from the rest of the award. Widder v. Buffalo 
& Lake Huron Ry. Co., 24 U. C. Q. B. 520. 

The assessment of costs by arbitrators named under the provisions of the 
Statutes does not vitiate their report. Tremblay r. The C. & St- L. Ry. Co., 
5 L. C. R. 219, Q.B. 

Arbitrators, in addition to other findings, awarded the plaintiff all the costs 
of reference and award. 

Held, that part of the second award directing payment of the costs of the 
reference and award was bad, but might be abandoned. Rector and Church- 
wardens of St. George's Parish i\ King, 2 S. C. R. 143. 



EMINENT DOMAIN. 211 

awarded by the arbitrators, and they have no discretion in the 
matter whatsoever. No provision is made for the recovery of 
costs, but only for their taxation. The Courts will therefore 
refuse to make an order for payment of such costs, the remedy 
being by action of debt on the statutes, (i) 

52. Questions have arisen as to interest upon the amount of Interest, 
the compensation, and have excited some discussion in our Courts. 
It has been urged with great force that where the company 
took property which was producing fruits or revenue, it was 
bound to pay interest on the value of the property from the date 
of the taking of possession. And the principle involved in this 
contention cannot be doubted, for it has often been held that 
where a party agrees to sell a property producing revenue, and a 
price is agreed upon, the buyer is bound to pay interest from 
the date of his taking possession of the property, even though the 
actual deed of sale for the price agreed upon is not executed 
until a later date. It has been therefore urged that the proprietor 
is entitled to interest upon the amount of the award from at least 
the date of taking possession, if not from the date of the deposit 
of the plan, which, as has been already pointed out, is the date 
fixed by the act with regard to which the compensation is to be 
assessed. And in cases where the company had paid money in- 
to Court, in order to obtain possession of the property before the 
rendering of the award in the manner provided by the act, (2) 



Where the Land Clauses Consolidation Act contained special provisions 
respecting claims for compensation for lands affected by the works of a rail- 
way, and directed that (except in certain special cases) compensation should 
be awarded with costs, and where the special Act declared that the provisions 
of the general Act were, "except where expressly varied by the special Act," 
incorporated with it ; and where the general Act provided that the compen- 
sation awarded might be recovered with costs, but the special Act contained 
no specific directions as to the award and costs, and where the arbitrator in 
awarding compensation said nothing about costs, Held, that the claimant 
was entitled to costs. 

Held, also, that the right to costs was entirely independent of the taxation 
of them, and an action could be maintained for the costs, although the amount 
of such costs had not been previously settled or ascertained, and consequently 
an order for the taxation made by the learned judge on giving his judgment 
for the plaintiff was a valid order. Metropolitan District Ry. Co. v. Sharpe, 
L. R., 5 App. Cas. 425. 

(1) In re Foster and G. W. Ry. Co., 32 U. C. Q. B. 503. 

(2) Sec. 164. 



212 THE RAILWAY LAW OF CANADA. 

on several occasions the Courts have allowed interest to the pro- 
prietor, upon the amount of the award from the date of taking 
possession, (i) This would not seem to be in accordance 
with sound principle, inasmuch as the amount of the award in- 
cludes not only the value of the land taken, but the damages to 
the remaining portion of the land, of which the proprietor had 
not been deprived of the use, and which were not due or owing 
by the company until they had been assessed. In any event, 
the proprietor would only be entitled to interest upon the value 
of the land, and that only from the date at which he had been 
deprived of the use or enjoyment of it ; and the answer to the 
claim of the proprietor to receive such interest in addition to the 
amount of the award would be that this deprivation of use and en- 
joyment was a damage consequent upon the exercise of the powers 
of the railway, which the arbitrators had power to assess, and which 
they must have been presumed to have assessed by their award. 
(2) The question has now been finally decided by the Court ot 
Appeals in the case of Reburn v. The Ontario & Quebec 
Railway Company, (3) confirming the judgment of Mr. 
Justice Tait in the Superior Court. (4) That learned judge 
held, upon an action by the proprietor to recover interest in ad- 
dition to the amount of the award from the date of the deposit 
of the plan, that it being within the scope of the powers of the 
arbitrators to award interest for any loss of enjoyment which the 
proprietor might have suffered, it must be presumed that the 
arbitrators had taken this into consideration, and that the pro- 
prietor could not go back of the award and claim interest which 
was really part of the damages which the arbitrators had power 
to assess ; and his judgment was unanimously confirmed by the 
Court of Appeals. 

Award as a ** ^ ^ s provided by section 162 of the Act, that upon pay- 
title to the ment or tender of the amount of the compensation awarded or 
agreed upon, the award itself or the agreement shall vest in the 

(1) A. & N. W. Ry. Co. T. Prudhomme, M. L. R., 2 S . C. 21 : re Phil- 
brick r. Ont. & Que'. Ry. Co., II Ont. P. R. 373; re Taylor r-. Ont. 
& Que. Ry. Co., ibid, 371 ; re Lea, 21 C. L. J. 154. 

(2) Paradisr'. The Queen, i Ex. (Can.) 191. 

(3) M. L. R., 6 Q- B- 381 ; and see A. & N; W. Ry. Co. r . Leeming, 
Q. R., 3 Q. B. 165. 

(4) M. L. R., 5 S. C. 211. 



EMINENT DOMAIN. 



213 



company the power to take possession of the lands, or to exercise 
the powers upon the lands which the company have specified in 
their notice, or which the proprietor has agreed that they should 
exercise. In the case of resistance by the proprietor, the company, 
on application to a judge, may obtain a warrant to the sheriff or to 
a bailiff to put the company in possession, in spite of any resistance 
or opposition. The compensation fixed by the award stands 
instead of the lands under sec. 166 of the Act, and any claims 
upon the property, such as mortgages or hypothecs, are converted 
into a claim upon the money awarded, and the company are only 
responsible if they pay any part of the award to any person not 
entitled to receive it, saving their recourse against such person. ( i) 

In Ontario it has been held that this section applies only where 
the compensation has been actually ascertained and paid into 
Court. (2) 

A railway company had, under a warrant of a County Court 
judge, taken possession of a portion of mortgaged lands, and 
had constructed their railway thereon, and an arbitration had 
been held between the company and the mortgagors ; but at the 
time of the bringing of an action by the mortgagees, the award, 
though made, had not been taken up by either party. The 
mortgagees (plaintiffs) had received no notice of, and had taken 
no part in the arbitration proceedings, and had not given any 
consent to the taking of the possession. The plaintiffs brought 
an action against the railway company and the owners for fore- 
closure, offering in their claim to take the compensation awarded, 
and release the lands in the possession of the railway company. 
In the first Court, Sir Thomas Gait, C.J., gave the usual judg- 
ment for redemption or foreclosure as against the mortgagor, 
but dismissed the action as against the railway company, hold- 
ing that as to them it was in effect an action in ejectment, and 
that any claim to the lands was by force of subsection 25 of 
section 20 of The Railway Act of Ontario, R. S. O., ch. 170 
(section 166, The Railway Act), converted into a claim against 
the compensation. In the Court of Appeals, however, this 
judgment was reversed. (3) 

(1) See supra p. 143. 

(2) Scottish Amer. Investment Co. v. Prettie, 20 Ont. A. R. 398 ; but see 
Clarke v. Grand Trunk Ry. Co., 35 U.C. Q. B. 57 ; Chewett v. Great 
Western Ry. Co., 26 U. C. C. P. 118. 

(3) Scottish American Investment Co. v. Prettie, 2o Ont. A. R. 398. 



214 T HE RAILWAY LAW OF CANADA. 

Osier, J.A., for the Court, said: " The incumbrancer is, in my 
opinion, in such case entitled to proceed upon his mortgage in 
the usual way. It cannot be said that the compensation has 
already been ascertained, and until that has been done, it appears 
to me that subsection 25 of section 20 R. S. O., cli. 170, cannot 
be invoked by the company against the incumbrancer. The 
company always have it in their power to bring it into operation 
by proceeding with their arbitration and taking up the award. 
Sub-section 23 then enables them to defend themselves against 
further proceedings by the incumbrancer, by paying the amount 
awarded ' to the party entitled to the same,' who is by sub-section 
25 the incumbrancer to the amount of his claim. 

" It is not for the latter to take up the award, paying the 
arbitrator's charges which he would probably have no right to 
recover back from anyone, but it is for the company to entitle 
themselves to possession, or to defend themselves from further 
proceedings, by ascertaining and paying the amount of compen- 
sation. 

" When the award has been taken up, the incumbrancer 
is no doubt entitled to recover the amount from the railway 
company (Dunlop v. Township of York} ; (i) but until that has 
been done, it is difficult to see what remedy the investment 
company would have if they are not entitled to enforce their 
mortgage 

" The appeal should therefore be allowed, and an order made 
declaring that the plaintiffs are entitled to the* usual judgment in 
a mortgage action, but that upon payment of the amount awarded, 
the lands in occupation of the company should be released from 
their mortgage." (2) 

In order to provide a means by which the company should be 
enabled to avoid any case of this kind, it is provided by the Act 
(3) that if there is any reason to fear any such claims upon the 
property, or if the proprietor refuses to execute a deed of sale or 
give a guarantee against such claims, or if the persons entitled to 
payment cannot be found, or in fact if, for any other reason, the 



(1) 16 Grant Ch. 216. 

(2) 2jOnt. A. K. at p. 402; arid see In n Toronto Belt Line Ry. Co. and 
Western Can. L. & S. Co., 26 O. R. 413. 

(3) Sees. 167-170 ; and see sec. 140. 



EMINENT DOMAIN. 215 

company think it advisable, (i) they may pay the amount of the 
award into court with interest for six months, that is to say, 
for six months from the date of the award, with a copy of the 
award. On such deposit, the award is equivalent to a title to the 
property in favor of the company; and thereupon proceedings are 
taken for the confirmation of the title in the same way as in any 
other such case, with the only difference that in the notice which 
the prothonotary or clerk of the court is required to give, he 
must state that the title of the company is under the Railway 
Act, and call upon all persons to file their claims, and then the 
claims are settled by the court. A judgment of confirmation 
being rendered on these proceedings, the company is given a per- 
fect title to the land, clear of all claims of any kind whatsoever, 
including not only mortgages, hypothecs and encumbrances of 
every description, but also of dower not yet opened ; and the 
court is given power to make such order for the payment and 
distribution of the money as it may see fit amongst the parties 
entitled to it. The court has power to order the payment of 
costs either by the company or any other person, as it may see fit. 
As to interest, if the judgment is obtained in less than six months 
from the payment of the amount of the award into court, a propor- 
tionate amount is returned to the company, and if from any fault 
or neglect of the company it is not obtained within that period, the 
company must pay in to the prothonotary the interest for such 
further period as is right, according to the order of the court. (2) 
As has been pointed out, upon payment into Court of the amount 
of the award, the company can take possession at once; but even 
before the rendering of the award, the company can obtain pos- 
session under sec. 163 upon a warrant granted by the judge, upon 
affidavit sufficient to satisfy him that immediate possession of the 
property is necessary to carry on some part of the works of the 
railway with which the company is ready to proceed at once, (3) 

(1) As to what would constitute a sufficient reason, see Cawthra v. Hamil- 
ton & N. W. Ry. Co., 41 U. C. Q. B. 187. 

(2) As to further interest see Judah w. A. & N. W. Ry. 23 S. C. R. 231 ; 
and in re Foster and Gt. W. Ry. Co., 32 U. C. Q. B. 503. 

(3) It must be clearly established that the company has an indisputable 
right to acquire the land by compulsory proceedings ; and that there is some 
urgent and substantial need for immediate action. In re Kingston & Pem- 
troke Ry.Co. and Murphy, n Ont. P. R. 304. There is no remedy by way 
of appeal from the order of a judge under this section, unless the company is 
seeking to attain an object collateral only to that for which it was incorporated. 
Ibid, and Jenkins v. Central Ont. Ry. Co., 4 O. R. 593. 



216 THE RAILWAY LAW OF CANADA. 

and this warrant may be granted not only for land which is to be 
taken for the actual construction of the railway thereon, but for 
any land which is required for the exercise of any of the powers 
of the railway, such as the obtaining of material for its construc- 
tion, etc. But this provisional warrant of possession can only be 
obtained on certain conditions. Under sec. 164, ten days' pre- 
vious notice must be given to the proprietor, or the person inter- 
ested in the property, and security must be given by the company 
to the satisfaction of the judge, by the deposit in a bank specified 
by the judge, to the joint credit of the company and the person 
interested, of an amount larger than the judge's estimate of the 
probable compensation, and not less than one-half more than the 
amount offered by the company by their notice. 

These provisions of the Act are in accordance with the prin- 
ciple generally recognized in civilized countries, that no indivi- 
dual can be deprived of his property, except for purposes of 
public utility, and upon previous payment of indemnity. Under 
the Act, a railway company cannot take possession of any per- 
son's property, without either paying the amount of compensation 
agreed upon, or fixed by an award of arbitrators, or without 
paying in to a bank, as security, under an order of the judge, an 
amount amply sufficient to cover the indemnity which may be 
finally fixed or agreed upon. This principle has been so far 
upheld by our Courts that it has been frequently decided that, if a 
railway company take a property for the construction of its road, 
without having given compensation or security as provided by 
the Act, the company cannot only be sued by the proprietor for 
compensation (i) or by possessory action to obtain possession 
of the property taken, and to compel the company to vacate, 
but the company may be restrained by injunction from operating 
its railway across such property. (2) These decisions are merely 

(1) Parkdale v. West, 12 App. Cas. 602 ; Pion r. N. S. Ry.Co., 14 App. 
Cas. 612 ; Mason r . South Norfolk Ry. Co., 19 O R. 132. 

(2) Brevvster r, Mongeon, M. L. R. 3 Q. B., 20 ; Beauharnois June, Ry. r. 
Bergevin, 17 R. L. 113; Cathedral of the Holy Trinity v. West. Ont. Pac. 
Ry.Co., 14 O. R. 246 ; Cie.de Ch. de Ker Central ?'. Legendre, II Q. L.R. 
i of>, Q. B. If, however, an award has been made, but the amount has not 
been paid or put into Court, the proprietor is not entitled to an injunction nor 
to an order for possesMon, but to a judgment declaring him to have a vendor's 
lien on the property, with such provisions as aie necessary to realize by means 
of a sale. Slater r. Can. Central Ry. Co., 25 Gr. Lh. 363 ; Lincoln Paper 



EMINENT DOMAIN. 217 

in accordance with the principle that a railway company, in 
exercising the powers of eminent domain granted by the Legisla- 
ture, must conform strictly to the conditions imposed by Parlia- 
ment, and that every individual whose rights of property are 
invaded by the railway company in excess of those powers, is 
entitled to redress at the hands of the Courts. 

Mills Co.v. St. Catharines & Niagara Ry. Co, iq O. R. 106 ; and see Gait 
v Erie & Niagara Ry. Co., 19 U. C. C. P. 357 ; Paterson v. Buffalo & 
Lake Huron Ry. Co., 17 Gr. Ch. 521 ; Thompson r. Can. Central Ry. Co., 
3 O.R. 136 ; Banque d'Hochelaga v. M. P. & B. Ry. Co., M. L. R.,1 S. C. 
150 ; confirmed in appeal, igth January, 1884. As to Crown lands, see Atty. 
Genl. v. Midland Ry. Co., 30. R. 511; Corp. of County of Wellandz'. 
Buffalo & Lake Huron Ky. Co., 30 U.C. Q. B. 147 ; Booth v. Mclntyre, 
31 U. C. C.P. 183. 



CHAPTER VIII. 



CONSTRUCTION OF THE RAILWAY. 



CONTRACTS FOR CONSTRUCTION. 

1. Generally, 

2. Form of Necessity of seal, etc. 

3. Conditions and stipulations . 

4. Construction of particular con- 

tracts Evidence- Quality of 
work Claim for increased 
price. 

5. Bond Condition Mutuality. 

6. Evidence of contract Ratifica- 

tion Question for the jury. 

7. Ratification of contract Repudi- 

ation of part. 

8. Condition precedent Independent 

agreement. 

9. Contractor purchaser of land for 

construction Title. 

10. Apportionment Land grant 

Subsidy. 

11. Specific performance. 

LliBILITY OF COMPANY FOR ACTS 
OF CONTRACTORS. 



DAMAGE CAUSED BY CONSTRUCTION 
OF RAILWAY. 

1 . Interference ivith ditches and 

water-courses. 

2. Surface water. 

3. Quebec Law. 

4. Obstruction and diversion of 

water-courses . 

5. Navigable waters, 

6. Subsequent purchaser of land. 

7. Duty of the Crown. 

HIGHWAYS. 

1. Interference with. 

2. Approval of Railway Committee. 

3. Bridges connecting Highways. 

4. Signboards. 

FARM CROSSINGS. 
BRIDGES, TUNNELS, ETC. 
FENCES AND CATTLE GUARDS. 
' INTERSECTION OF RAILWAYS. 

PRESCRIPTION OR LIMITATION OF 
ACTIONS. 



Contracts for Construction. 

'Generally. 1. Railways are generally constructed in this country under 

contracts made with contractors for the whole, or different parts 
of the works. Sometimes, though comparatively seldom, the work 
is done by the company under the supervision of their engineers 
and a manager of construction. It is under the first mentioned 
system that most of the questions calling for judicial interpreta- 
tion have arisen. 

.Form of 2. No special form of contract is necessary, unless there is 

necessity of express provision in the charter or by-laws as to the form. There 
-seal, etc. 



CONSTRUCTION OF THE RAILWAY. 219 

is much divergence of opinion as to the necessity for contracts 
being executed under the seal of the company, in order to be 
valid and binding upon the company. While it is usual to affix 
the company's seal, it is by no means clear that it is essential to 
the validity of the contract, especially in this country. 

The undoubted rule of the early common law was that a 
corporation aggregate must, in general, contract by deed, and 
could not bind itself by parol. As regarded municipal and 
ecclesiastical corporations, exceptions to the above rule were from 
very early times allowed in order that they might be enabled, 
without the formality of sealing, to transact matters of minor 
importance and of daily occurrence. 

As regards trading corporations, the exceptions to the rules 
at common law have gradually and largely extended ; " for the 
doctrine now is," says Mr. Broom (i) writing in 1869, "that 
a body corporate, established for the purpose of trading, may 
make all such contracts as are of ordinary occurrence in that 
trade, irrespective of the magnitude of the particular transac- 
tion without the formality of a seal, and that the seal is required 
only in matters of unusual and extraordinary character, which 
are not likely to arise in the routine of business." (2) 

In the United States the rule has almost, if not entirely, dis- 
appeared. (3) 

Mr. Dillon in his work on Municipal Corporations (4) states 
the law thus : " The modern rule is that corporations may be 
bound by contracts not under seal, and the circumstances under 
which they will be bound have been stated by Story, J., in 
terms which have been approved by the courts in nearly every 
State in the Union. Whenever a corporation is acting within 
the scope of the legitimate purposes of its institution, all parol 
contracts made by its authorized agents are express promises of 
the corporation. (5) This is practically the view adopted by 
our Supreme Court in the case of Bernardin v. Municip- 



(1) Broom, Common Law, p. 563. 

(2) Citing South of Ireland Co. v. Waddle L. R., 3 C. P., 463, 469, 
474, where the cases are considered. 

(3) Parson's Contracts (1892), Vol. I, p. 139, I Redfield, 113. 

(4) 4th Edn., 192. 

(5) Also Cook on Stockholders and Corp. Law (1889), 721. 



220 THE RAILWAY LAW OF CANADA. 

ality of North nnffcrin. (i) But this case only settled the point 
in so far as it relates to executed contracts, the difference be- 
tween executory and executed contracts being recognized. Lord 
Justice Lindley, in his late work upon the law of companies. (2) 
treats this distinction as exploded, stating " a distinction was at 
one time supposed to exist between executed and executory con- 
tracts ; but except where the equitable doctrines of part perform- 
ance are applicable, a corporation is no more bound by a con- 
tract not under its seal, of which it has had the benefit, than it is 
by a similar contract which has not been acted upon by either 
party." Gwynne, J., in the Bernardin case states it as his opinion 
that it is sound law to hold that the principle contended for in 
that case applies both to executory and executed contracts, and 
that such is the sense of the best English cases. Patterson. J., 
in the same case, (3) said : " The question, whether an executory 
contract made by the council of one of these municipalities, not 
under the corporate seal, can be enforced against the corpora- 
tion, should, I think, be considered as an open question. It is 
not necessary now to decide it because this contract is executed. 
It has not for. the same reason been fully argued. I therefore 
say no more with regard to the point than that there is room 
for argument on both sides of the question." 

The law in this country upon the point in question, so far as 
it relates to executed contracts, must be regarded as having, 
from the earliest days, departed from the English doctrine, and 
approached that of the United States. In Pirn v. the Municipal 
Council of the County of Ontario, (4) a case involving exactly 
the same point as the Bernardin case, Chancellor Blake remarked 
that " the present state of the law upon the subject is a reproach 
to the administration of justice in England* It may be that the 
evil calls for legislative interference ; but if the legislature will 
neither declare the law nor alter it, courts of justice are bound 
to place their decisions upon some principle intelligible to the 
public and sufficient for their guidance ; '' he then proceeds to 
review the English cases, noting the divergence of opinions, and 



(1) 19 S. C. R. 581, and see Canada Central Ry. Co. r. Murray, 8 S. C. R. 

333- 

(2) p. 226. (3) p. 635. 
(4) 9 U. C. C. P. 302. 



CONSTRUCTION OF THE RAILWAY. 221 

ends by adopting the view concurred in by the courts of Ontario 
for the last thirty years, and finally upheld by the Supreme Court 
in the Bernardin case. In the course of his judgment the learned 
chancellor made the following argument: "It is now well 
settled that corporations aggregate are liable in tort, although 
there has been nothing under the common seal authorizing the 
agent or adopting his acts ; again, when land has been used and 
occupied by a corporation, the law implies a promise to pay a 
reasonable compensation : and when money has been wrongfully 
received, assumpsit for money had and received may be main- 
tained. Now, if trover and trespass may be maintained under the 
circumstances to which I have alluded, and if the law implies a 
contract when land has been used, or moneys wrongfully re- 
ceived, it is difficult to understand why the same principle should 
not be applied wherever the contract being legal has been 
executed, and the corporation has received all that it could have 
demanded if there had been a contract under the corporate seal. 
The argument seems to me, I must confess, conclusive." But 
the learned chancellor, it will be noted, draws a distinction be- 
tween executed and executory contracts. It is noticeable that 
Canadian cases, holding that the corporate seal is not necessary 
to the enforcement of an executed contract, proceed chiefly upon 
the equitable ground that the corporation, having received 
the benefit of the contract, they are estopped from repudiating it, 
and not upon the general ground that the seal is no longer a 
necessary formality of corporate contracts. As to executory con- 
tracts, the question, as stated by Patterson, J., in the Bernardin 
case, is an open one. 

In this connection it was held in a Manitoba case (i) that 
the engagement by a railway company of a civil engineer was not 
binding upon the corporation, not being under the corporate seal. 
In this case it was admitted, in accordance with the English 
authorities, that an inferior servant can be retained by parol, 
but that it was clear the plaintiff in this case could not be called 
an inferior servant. 

In an Ontario case (2) it was held that a clerk hired for a 



(1) Armstrongs. Portage, Westbourne & North West Ry. Co., i Man. 
344 (1884), Q. B. 

(2) Hughes v. The Canada Permanent Investment, etc., Soc., 39 U. C. 
Q. B. 221. 



222 THE RAILWAY LAW OF CANADA. 

year at $800 per annum could not sue for dismissal within the 
year for the same reason as the above. 

These, and another Ontario case not reported, (i) were all 
based upon the English decision of Austin v. The Guardians of 
Bethnal Green, (2) where it was held that poor law guardians 
are not bound by an unsealed agreement engaging a clerk. But 
it is surely erroneous to apply the case of this class of corporations 
to that of modern commercial corporations and railway com- 
panies ; and in this country, the above decision, holding that the 
hiring of a clerk at $800 per annum must be under the corporate 
seal, would at this date be wholly untenable, and even impos- 
sible. 

Probably the future rule adopted in this country will be that 
adopted by Pollock, B., in The Australian Steam Navigation Co. 
v. Marzetti, (3) and approved by Gwynne, J., in the Bernardin 
case, viz.: " It is now perfectly established, by a series of 
authorities, that corporations may, with respect to those matters 
for which they are expressly created, deal without seal. 
This principle is founded on justice and public convenience, 
and in accordance with common sense." The same view was 
taken in the United States in the case of Fleckner v. United 
States Bank, (4) where it was urged that a corporation could not 
authorize any act to be done by an agent by a mere vote of the 
directors, but only by an appointment under its corporate seal. 
But the court declared that such a doctrine, whatever may have 
been its original correctness as applied to common-law corpora- 
tions, had " no application to modern corporations created by 
statutes, whose charters contemplate the business of the cor- 
poration to be transacted by a special body or board of directors ; 
and the acts of such a body or board, evidenced by a written 
vote, are as completely binding upon the corporation and as 
complete authority to their agents, as the utmost solemn acts 
done under the corporate seal." 

In the recent Supreme Court case of The Water ous Engine 
Works Company v. The Corporation of the Town of Palmers- 



(1) Washbourne z 1 . The Canada Car Co., referred to in a note at p. 299 
of the former case. 

(2) L. R. 9 C. P. 91. (3) ii Ex. 228. 

(4) 8 Wheat. (U. S.) 338, 357. 



CONSTRUCTION OF THE RAILWAY. 223 

ton, (i) the Bernardin case was distinguished; but Patterson, J., 
stated that the general doctrine touching the mode in which a 
corporation can be bound by contract was not really in question. 

Conformably to the above views, it has been held in Ontario 
(2) that a railway can appoint an agent to negotiate for and 
obtain municipal aid by a resolution of the board of directors, 
without the formality of a by-law or seal of the company. Also 
in The Hamilton & Port Dover Ry. Co. v. The Gore Sank, (3) 
it was held that a railway company, being indebted to a bank, 
the officers of the company had authority to arrange with the 
bank, that the latter had authority to garnish certain debts due 
to the company, without a resolution of the board of directors, 
and that the same need not be under the corporate seal; on the 
other hand it was held in an early Ontario case, (4) that an agree- 
ment made by a railway company, through their attorney, to com- 
promise a suit instituted by plaintiff, on certain terms, was not 
binding upon the company in the absence of the corporate seal. 
But it was held in a New Brunswick case, (5) that notice by 
a company's solicitor to the sureties on a bond, conditioned 
for the 6delity of a clerk in the company's employ, to the effect 
that the clerk had made default, did not require to be under the 
seal of the company, neither did the solicitor's appointment. 

Also in Nova Scotia, that where work is done within the ordin- 
ary range of duties of a corporation, a contract under seal is not 
required. (6) In an Ontario appeal case, it was held that a ver- 
bal contract made between a railway company and a person to 
manage one of their steamers need not be under seal. (7) 

But where an agent was hired by a railway company to obtain 
bonuses from municipalities, and the only evidence of the hiring 
was a letter written by one of the directors, stating that at a meet- 
ing of the board he was directed to make arrangements with the 
plaintiff to proceed forthwith, and it was shown that the presi- 
dent had recognized and adopted his services, and partially paid 

(1) 21 S. C. R. 556. 

(2) Wood v. The Ontario & Quebec Ry. Co., 24 U. C. C. P. 334. 

(3) 20 Grant Chy. 190. 

(4) Doran v. The Great Western Ry. Co., 14 U. C. Q.B. 403. 

(5) The Mechanics' Whale Fishing Co. v. Kirby, I All. 223. 

(6) Mclntosh re Commissioners of the Court House at Halifax, 20 N. S. 430. 

(7) Ellis v. The Midland Ry. Co., 7 Ont. App. 464. 



224 T HE RAILWAY LAW OF CANADA. 

therefor; it was held that this was not a sufficient proof of the 
plaintiffs engagement, or of the acceptance of his services by 
the company, (i) In Quebec, however, the engagement by a 
railway company of a civil engineer, for carrying out the works 
of a railway, is held to be a commercial contract, and may be 
proved by parol. (2) In Canada Central Railway Co. v. Mur- 
ray (3) a contract for fencing made with the Company's managing 
director was held valid although not under seal. And amongst 
other decisions holding a seal to be unnecessary may be cited 
the following Ontario cases. To a declaration alleging that the 
plaintiffs entered into an agreement with the defendants to per- 
form certain stone work, which they partly performed, and 
averring as a breach that the defendants had prevented them from 
carrying out and completing the work, whereby, etc., the defen- 
dants pleaded the plaintiffs were an association incorporated 
under R. S. O. (1877), c. 158, and that the agreement was not 
under the plaintiff's seal, it was held, on demurrer, that the plain- 
tiffs being a trading corporation, enough was not shown to make 
the absence of a seal fatal to the validity of the agreement. (4) 

In another case the plaintiffs were a company incorporated 
under C. S. C., c. 63, and 24 Viet., c. 19, for the manufacture 
and sale of cheese, etc. On the loth August, 1878, a written 
agreement was entered into between one C., the plaintiffs' secre- 
tary and salesman, and one M., on behalf, as was stated, of the 
plaintiffs and defendants respectively, and which was signed by 
C. and M. for the sale of the whole of the plaintiffs' July cheese, 
as also of their August, September and October cheese, at prices 
named : it was held, that the plaintiffs being a trading corporation, 
and the contract one specially relating to the objects and pur- 
poses of the company, it was binding upon them, though not 
under seal. (5) 

And it has also been held that a contract made verbally by the 
president of a company with the plaintiff, engaging him for 

(1) Wood v. The Ontario & Quebec Ry. Co., 24 U. C. C. P. 334. 

(2) Legge I 1 . Trie Laurentian Ry. Co., 3 L. X. 23. 

(3) 8 Can. S. C. R. 313. 

(4) Ontario Co-operative Stonecutters' Association v. Clarke, 31 U. C. C 
P. 280. 

(5) Albert Cheese Co. v. Leeming, 31 U.C.C.P. 272. 



CONSTRUCTION OF THE RAILWAY. 225 

41 the season " as master to manage a steamer, might be binding, 
and that non-suit for want of a corporate seal was properly set 
aside, (i) In a later case the facts were stated that D., on the 
suggestion of R. and the Bank of O., that he should purchase 
certain lumber held by the bank as security for advances made 
to R., required a guarantee from the bank that the lumber should 
be satisfactorily culled and any deficiency paid for by the bank. 
The directors thereupon resolved to submit the lumber to a 
culler, and if he reported satisfactorily to give the guarantee. 
Their local agent, however, with the approbation of their head 
manager, without previously employing a culler to report, gave a 
guarantee in writing, but not under seal, "on behalf of the bank," 
that the lumber should be satisfactorily culled previous to ship- 
ment : It was held, that no seal was required; and if the Bank 
wished to repudiate it, they should repay the mo ney paid to them 
by D. for the lumber. (2) 

However much the jurisprudence may differ in the various 
cases which have been given as illustrations, it would seem to 
be sound law, and in accordance with common sense, to say that 
contracts for the construction of the railway, entered into for the 
carrying out of the very purposes of the company's charter, would 
be binding upon the company even if not under the corporate 
seal, when executed by an authorized officer : provided always 
of course that they contain no provisions or stipulations ultra 
vires of the company. 

3. It is customary to insert in construction contracts, condi- Conditions 
tions and stipulations which in ordinary contracts would perhaps ? stl P ula ~ 
be looked upon as unusually harsh and severe. For instance, 
such as the imposition of penalties upon the contractor for the 
slightest deviation from the strict letter of the contract ; the 
stipulation that the company should have the right to take the 
work from the contractor, whenever their engineers should decide 
that" the work was not progressing with sufficient rapidity or in 
a proper manner, or to put on an extra force of laborers if the 



(i) Ellis v. Midland Ry. Co. ,7 Ont. A. R. 464. 
<2) Dobell v. Ontario Bank, 3 O. R. 299. 

15 



226 THE RAILWAY LAW OF CANADA. 

number employed by the contractor is deemed insufficient, (i) 
And it is a most usual condition to make the company's engineers 
the sole and final judges of the quality and quantity of work per- 
formed, and the periodical payments to be made, and the amount 
to be paid upon the final estimate when the work is completed. 

(2) It is ordinarily provided in most contracts that approximate 
estimates shall be made monthly, or at fixed periods, and that 
the company will make payments in accordance therewith as the 
work progresses, subject to adjustment upon the final estimate 

(3) But, unless so provided, a contract calling for monthly 
estimates imports an accurate measurement and final estimate 
for each month, and not one that is merely approximate. (4) 



(i) Ranger v. Great Western Ry. Co., 5 H. of L. Cas. 72 ; Jones . 
The Queen, 7 Can. S C. M. 570. 

A clause, providing that the employer may determine the contract and 
forfeit the plant, etc., if the works are not proceeded with at the rate of progress 
required by the engineer, can, it would seem, only be put in force during the 
time limited for the completion of the woik. 

A provision authorizing the employer, in the event of default by the contractor 
to use the plant and materials, does not make the plant and materials the pro- 
perty of the employer. Garrett v. Salisbury & Donet Junct. Ry. Co, L. 
R., 2 Eq. 358. And where Government commissioners had the power, under 
the terms of a contract, the work not having been completed within the time 
stipulated, or in accordance with the contract, to take the contract out of 
the hands of the contractors and charge them with the extra cost of completing 
the same, the contractors' plant should not be forfeited, but should be returned 
to them in its then condition, or in such condition as it should be by a reasonable 
use and care cf it during the progress of the work to completion. Berlinguet 
v. The Queen, 13 Can. S. C. R. 28. 

Where a contractor fails to carry out the terms of the contiact within the 
time stated therein, the company can hand the undertaking over to another, 
without incurring any responsibility toward the fir-t contractor. Stanton v. 
Can. Atl. Ry. Co., 21 R. L. 168 (Q. B). Where a contract for the con- 
struction of part of a road stimulates that the price, at so much per foot, shall 
be payable monthly, according to the engineer's certificate, and no lump sum 
is s-tated for the whole work, the contractors can claim payment for their work 
and materials supplied, even where they have not completed the entire con- 
tract, if they have not been consulted as to the execution or resolution of the 
contract, .or their j ermission has not been asked to have the work continued 
at their expense, but on the contrary the proprietor continued and completed 
the undertaking, and used the materials prepared by the contractor. McGreevy 
i'. Boomer, 9 R. L. 587 (Q. B.). Affirmed by Supreme Court, Cassel's Dig., 
2nd Edit., p. 140. 

(2) Jones v. The Queen, 7 S. C. R. 570 ; McCarron v. McGreevy, 13 S. 
C. R. 3/8 ; Reg. v. McGreevy, 18 S. C. R. 371 ; Guilbault T. McGreevy, 
18 S. C. R. 609 ; Peters v . The Quebec Harbor Commissioners, 19 S. C R. 
685. 

(3) Ibid. 

(4) Herrick v. Central 'Vermont Ry. Co., 27 Vt. 673. 



CONSTRUCTION OF THE RAILWAY. 227 

Where the work is to be done to the satisfaction of the engineer r 
upon whose approval payment is to be made, the contractor 
can recover neither upon the contract nor in an action for work 
done until the engineer Jias certified his approval, (i) Where 
the certificate of the engineer as to the work done and the sums 
payable is to be final, it cannot be impeached, except on the 
ground of fraud, and no action can be maintained until the certi- 
ficate is given. (2) If the engineer's certificate is made con- 
clusive, it is binding on both parties to the contract, and no 
complaint can be made by the company for defects discovered after 
it has been given. (3) In cases where the person who is made 
sole judge of the performance of ihe contract is in the permanent 
employ of the company, it will be more difficult for the contractor 
to make out a case of unfairness, than in the case of a contract 
with a private person where an engineer or other professional 
man is employed simply for the particular work. In the former 
case the contractor has agreed to accept as judge a person whom 
he knows may be biased; in the latter case no such knowledge 
can be imputed to him. Thus where the person whose certificate 
is required is the engineer of the compmy, ihe fact that the 
engineer is also a shareholder in the company does not disqualify 
him. (4) On the other hand, when it is shown that the engineer 
is the agent of a private employer, and has entered into an 
agreement with him that the work shall be done for a certain 
sum, including his commission, this is sufficient fraud to entitle 
the contractor to disregard his decision. (5) A contract under 
seal between a company and a contractor to do certain works for a 
certain sum cannot be varied by a mere verbal agreement between 
the engineer of the company and the contractor. (6) Where 
the contract provides that no additions shall be made without a 



(1) Jones v. The Queen, 7 S. C. R. 570; McCarron v. McGreevy, 13 
S. C. R. 378 ; Peters v. Quebec Harbor Commissioners, 19 S. C. R. 685. 

(2) Ib. and Sharpe v. San Paulo R.y. Co., 8 Ch. 597 ; and see Brown v. 
Allan, Supreme Ct., 23 June, 188:, Cassel's Digest, 2nd Edit. p. 147. 

(3) Ib. and Dunaberg & Witipsk Ry. Co. v. Hopkins, 36 L. T. N. S. 

733- 

(4) Ranger v. Great West. Ry. Co.. 5 H. L. Cas. 72. 

(5) Kimberly v. Dick, 13 Eq. I ; Mclntosh v. Gt. W. Ry. Co., 2 H. & 
T. 250 ; Waring v Manchester, Sheffield & Lincoln Ry. Co., 7 H. 482, 2 H. 
& T. 239. 

(6) Sharp v. San Paulo Ry. Co., 8 Ch. 597. 



228 



THE RAILWAY LAW OF CANADA. 



Construction 
of particular 
contracts 
evidence 
quality of 
work claim 
for increased 
price. 



written order from the employer's engineer, the engineer's certi- 
ficate certifying that extra work has been done is not an order 
within the meaning of the contract, (i) 

A provision in a contract, that no claim shall be made or 
allowed for extra work, " unless the same shall have been done 
in pursuance of written contracts or orders signed by the 
engineer," and that all claims for work done under such written 
contracts or orders shall be presented for settlement within a 
given time, will bar a recovery for any extra work not sup- 
ported by the directions, in writing, of the engineer, or presented 
for allowance within the time specified. (2) 

This rule is not varied by the fact, that previous to doing the 
extra work, directed by the engineer, the contractors were 
assured by the local or assistant engineer, who communicated 
the direction from his chief, that they would receive extra com- 
pensation therefor; it appearing that said assistant had no 
authority to bind the company by any such promise. (3) And 
this rule is all the stronger in the case of government contracts. 

(4) The power given to the engineer, to determine all points 
jn dispute by his final certificate, does not give him the right to 
deduct any sum from the bulk sum contract price on account of 
an alleged difference between the quantity of work to be done, 
as stated in ths specifications, and the quantity actually done. 

(5) The engineer's certificate must be obtained within a 
reasonable time, and where a contractor had not taken any steps 
to obtain it until six years after the superintendent had left his 
employer, the failure to produce such certificate was sufficient 
ground for dismissing his action. (6) 

4.' The plaintiffs, Barry & Smeaton, were sub-contractors for 
the mason work on a portion of the line of the Grand Trunk 
Railway Company, for constructing which Ross & McRae, the 
defendants, had the contract. In a conversation between the 



(1) Sulphur & Copper Co. r. McElroy, 3 App. Cas. 1040. 

(2) Vandenverker r. Vermont Cent Ry. Co., 27 Vt. 130. 

(3) Vandenverker v. Vermont Cent. Ry. Co., 27 Vt. 130. 

(4) Jones v. The Queen, 7 S. C. R. 615 ; The Queen v. McGreevy, 18 
S. C. K. 372. 

(5) Peters i\ The Quebec Harbor Commissioners, 19 S. C. R. 685. 

(6) McCarron r. McGreevy, 13 S. C. R. 379. 



CONSTRUCTION OF THE RAILWAY. 229 

plaintiff Smeaton and the defendant McRae, before the work 
was begun, Smeaton was given to understand that the standard 
of the second class masonry to be built by plaintiff was to be 
equal to that on the " Loop Line," another part of the Grand 
Trunk system, and shortly after McRae wrote to plaintiffs, in- 
structing them to go on with the work "according to the plans 
and specifications furnished by the company." 

The plaintiffs had completed a portion of their work, when they 
were informed by the engineer in charge that the quality of 
second class masonry was to be of a higher standard than they 
had supposed, which would increase the cost of construction 
from twenty-five to thirty per cent., whereupon they refused to 
proceed until McRae, who was present at the time, said to them, 
" go on and finish the work as you are told by the engineers, and 
you will be paid for it." They thereupon pulled down what was 
built, and proceeded according to the directions of the engineer. 
When the work was nearly done, McRae tried to withdraw his 
offer to pay the increased price, but renewed it on the sub- 
contractors threatening to stop. After completion of the work, 
payment of the extra price was refused. Upon an action therefor, 
it was held that the conversation between McRae and Smeaton 
prior to the commencement of the woik, as detailed in the 
evidence, justified the sub-contractors in believing that the 
standard of quality was to be that of the Loop Line; that the 
promise to pay the increased price was in settlement of a bona 
fide dispute, which was a good consideration for such promise, (i) 

5. H. tendered for the construction of a line of railway pur- Bond condi- 
stiant to an advertisement for tenders, and his offer was condition- a j; ty 
ally accepted. At the same time H. executed a bond reciting the 
fact of the tender and conditions, within four days, to pro- 
vide two acceptable sureties, and deposit 5 per cent, of the amount 
of his tender in the Bank of Montreal, and also to execute all 
necessary agreements for the commencement and completion of 
the work by specified dates, and the prosecution thereof until 
completed. These conditions were not performed, and the con- 
tract was eventually given to other persons. In an action against 
H. on the bond it was held that the agreement made by the bond 

(I) Barry v. Ross, 19 S. C. R. 360. 



230 THE RAILWAY LAW OK CANADA. 

was unilateral; that the railway company was under no obliga- 
tion to accept the sureties offered or to give H. the contract ; 
that the bond and the agreement for the construction of the 
work were to be contemporaneous acts, and as no such agree- 
ment was entered into, H. was not liable on the bond, (i) 

Evidence of 6. The plaintiffs entered into a contract with one F. to build a 
ratification ^" ence f r a railway. F. controlled nine-tenths of the stock, and 
Question for publicly appeared to be, and was understood to be, and acted as, 
managing d rector or manager of the company, although he was at 
one time contractor for the building of the whole road. Plaintiffs 
built the fence, and the railroad had the benefit thereof. The 
company repudiated the contract. In an action by the plaintiff 
to recover thereon, certain questions were submitted by the trial 
judge to the jury, who found that the plaintiffs, when they con- 
tracted, considered they were contracting with the company 
through F., and that there was no evidence that the company 
repudiated the contract till the action was brought, and that the 
payments made were as money which the company owed, not 
money which they were paying to be charged to F., and a general 
verdict was found for the plaintiffs for the amount of the con- 
tract. The Supreme Court held (Ritchie, C. J.,and Taschereau, 
J., dissenting), that it was properly left to the jury to decide 
whether the work performed, of which the railway company 
received the benefit, was contracted for by the company through 
the instrumentality of F., or whether they adopted and ratified 
the contract ; and that the verdict could not be set aside on the 
ground of being against the weight of evidence. (2) 

Ratification of 7 The president of a railway company, purporting to act on 

contract Re- ]j ena ]f o f tne company, entered into a contract with certain 

pudiation of . 

part. contractors for the construction of forty miles of road. By the 

contract, bonds to double the amount of the moneys to be 
secured were to be deposited in a bank, to secure to the con- 
tractors payment of a portion of the price of the construction 
of the railroad. The president afterwards agreed that, in default 
of payment within a limited time, the contractors should take 



(1) Brantford, Waterloo & Lake Erie Ry. Co. v. Huffman, 19 S- C. R. 336. 

(2) Canada Central v. Murray. 8 S. C. R. 313. 



CONSTRUCTION OF THE RAILWAY. 231 

the bonds in payment at fifty cents on the dollar. Two years 
after the bonds were delivered to the contractors, the company 
filed a bill repudiating the contract, and asking that the bonds be 
declared null and void. It appeared that the defendants had 
obtained a judgment at law against plaintiffs for a large amount 
on the contract, in which action the company had set up as a 
defence that the contractors had accepted the bonds in payment, 
that the plaintiffs had begun an action then pending on the con- 
tract against defendants, claiming damages for non-completion 
of work, that an Act of Parliament had been passed in the 
interest of the company, which recited the construction and 
completion of the work, and that during two years no steps had 
been taken to repudiate the contract or to question the presi- 
dent's authority, and that the company had taken possession of 
and the benefit of the work. 

The Court held that the company must be taken to have rati- 
fied the contract, and that they could not take the benefit of a 
part of the contract and repudiate it as to another part, (i) 

8. In an action where the plaintiffs alleged that they had agreed Condition 

to complete the ballasting of a certain portion of defendant's precedent 
. . , , Independent 

railway, provided the company should furnish cash to meet the agreement. 

monthly estimates of the engineer, and that the plaintiffs had 
commenced, and were ready to complete the work, but defendants 
wrongfully prevented and discharged them, and it was pleaded 
in defence, that by the same agreement it was provided, that where- 
as plaintiffs had leased said railway from defendants, by lease 
bearing even date with the agreement , in which it was provided 
that ^30,000 should be expended by defendants on the com- 
pletion of the road before the rents should be payable, and 
whereas defendants were unable to raise the ^30,000, it was 
therefore agreed that the plaintiffs should work the road, free of 
any charge for the use of it, and should expend the surplus earn- 
ings on the completion thereof, the amount so expended to be 
taken as part of the ^30,000; that the lease so made was for the 
express purpose of enabling the plaintiffs to work the road, and 
raising thereby enough to enable defendants to pay them for the 



(i) Winnipeg & Hudson's Bay Ry. Co. v. Mann, 7 Man. 81. 



232 THE RAILWAY LAW OP CANADA. 

work contracted to be done by them ; that the plaintiffs, although 
they had the free use of the road, refused to work it, and aban- 
doned the same, whereby they forfeited the contract, and defend- 
anis therefore prevented them from proceeding with the work; 
it was held on demurrer that the plea was bad, the agreements 
being independent, (i) 

Contractor 9. Where the contractor purchases in his own name the lands 
tends foTcon- rec l u i re d for constructing the railway upon, and gives a clear 
struction receipt to the company for value received, for all materials sup- 
payment re- pjj e( j an( j work done for them, he must be presumed to have been 
paid the price of such lands ; he cannot therefore revendicate 
them, although he never gave the company any formal title for 
the lands. (2) 

The title to land purchased by the contractors in the com-- 
pany's name for construction of the road is in the company. (3) 
And where the contractor acquires the land on his own account 
and in his own name, and the road has been constructed thereon, 
he cannot, in the case of a seizure against the company, be put 
in possession again without allowing the company or their 
creditors to withdraw the materials of the road, or himself pay- 
ing their value, where such materials have been laid by his per- 
mission, and have been paid for partly out of the government 
subsidy and partly with the company's money and that of their 
creditors. (4) 

But when the contractor purchases in his own name the lands 
on which the road is built, at his own expense, and when finished 
gives a clear receipt to the company for value received for all 
materials supplied to and .work done for them, he is presumed to 
have been paid for the price of lands, and cannot revendicate 
them, although he never gave the company any formal title to 
them. (5) 

Apportion- 1O. By contract embodied in a statute, the plaintiff company 

ment land covenanted to complete a railway in five years, and thereafter 
grant sub- 

sid y- (I) Tate v. Port Hope, etc., Ry. Co., 17 U. C. Q. B. 354. 

(2) Roberge v. North Shore Ry. Co., 34 L. C. J. 315 (Q. B.). 

(3) Banque d'Hochelaga v. M. P. & B. Ry. Co., M. L. R , I S. C. 150. 

(4) Bnnque d'Hochelaga . M. P. & B. Ry. Co., confirmed in appeal, igth 
Jan., 1884. 

(5) Roberge v. La Cie. da Ch. de Fer da Nord, 34 L. C. J. 315. 






CONSTRUCTION OF THE RAILWAY. 233 

to maintain and operate the same. In consideration thereof the 
Government covenanted: (ist) "to pay the company upon the 
construction and continuous operation of the line an annual sub- 
sidy for thirty-five years, such subsidy " to attach in proportionate 
parts, and form part of the assets of the company as and when 
each five-mile section is completed and operated ; " (2nd) to grant 
to the company in fee simple 5000 acres of land for each one 
mile of railway completed, on completion of each section of five 
miles. 

It appeared that the company completed a portion of the line, 
and received from the government, on completion of each five- 
mile section, the specified grant of land, and certain half-yearly 
payments in respect of the proportionate part of the subsidy 
which was deemed by the parties to attach thereto ; thereafter 
the contract was broken by the company, and the government 
refused further payments. In a suit by the company and its 
assignees of a division of the railway and of the rights relating 
thereto, it was held, that on the true construction of the con- 
tract each claim to a grant of land was complete from the time 
when the section which had earned it was complete ; that on the 
completion of each section a proportionate part of the subsidy 
became payable for the specified term, but subject to the con- 
dition of continuous efficient operation, (i) 

11. The Court will not enforce specific performance of an Specific per- 
executory contract involving continuous Acts. (2) Thus, formance. 
specific performance of a contract to construct a railway entered 
into between a company and a contractor will not, as a rule, be 
enforced, the remedy by damages in such a case is complete. (3) 

It is no answer, however, to an action for specific performance 
of an agreement to carry out certain works in a particular way, 
where damages are not an adequate compensation, that the pub- 
lic will be put to inconvenience by delay in the traffic while the 
works are being carried out. .(4) Nor is it an answer in such a 

(1) Government of Newfoundland v. Newfoundland Ry. Co., 13 App. Cas. 
199. 

(2) S. Wales Ry. Co. v. Wythes, i K. & J. 186 ; The Carleton Branch 
Ry. Co. v. The Gran J Southern Co., 21 N. B. 340 ; and Johnson v. Mont- 
real, etc, Junction Ry. Co., 22 Grant Chy. 290. 

(3) lb. 

(4) Raphael v. Thames Valley Ry. Co., L. R., 2 Ch. 147. 



234 THE RAILWAY LAW OF CANADA. 

case that the works agreed upon cannot be carried out without 
taking lands which the company have no power to take. The 
company will be directed to perform the agreement, and, if they 
fail to do so, they will ba compelled to close their line. (O 

Liability of Company for Acts of Contractors. 

The question of the nature and extent of the company's lia- 
bility for the acts of contractors employed by them in the con- 
struction of the railway has already been touched upon. (2) But 
it may be further dwelt upon here with advantage. The com- 
pany's liability would seem to depend upon ( r ) whether the act 
causing damage is a natural consequence of the work which the 
contractor is employed to do ; (2 ) or, not being so, is the result 
of negligence on the part of the contractor or his servants, or of 
the doing of something outside of the contract, or which he was 
not called upon to perform ; and (3 ) whether the employer ex- 
ercised a direct control and supervision over the manner of the 
performance of the work causing the damige. In the first and 
third cases, if the facts establish the affirmative of the proposition, 
the company would be liable, in the second they would not. (3) 

The following cases illustrate the various phases of the ques- 
tion. The leading case is that of Ellis v. The Sheffield Gas Con. 
sumeri Cj., (4) where Lord Campbell, C. J., thus expressed 
himself : 

" I am clearly of opinion that if a contractor does the thing 
which he is employed to do, the employer is responsible for that 
thing, as if he did it himself. I perfectly approve of the cases 
which have been cited. In those cases the contractor was em- 
ployed to do a thing perfectly lawful, the relation of master and 
servant did not subsist between the employer and those actually 
doing the work, and therefore the employer was not liable for 
their negligence ; he was not answerable for anything beyond what 
he employed the contractor to do, and that being lawful, he was 
not liable at all. But in the present case, the defendants had no 
right to break up the streets at all ; they employed contractors 

(1) Atty Gen. v. Mid. Kent Ry. Co., L. R., 3 Ch. loo- 

(2) Supra, pp. 30-32. 

(3) Supra, pp. 30-32. 

(4) 2 Ellis & Bi. 766. 



CONSTRUCTION OF THE RAILWAY. 235 

to break up the streets, and in so doing, to heap up earth and 
stones so as to be a public nuisance, and it was in consequence 
of this being done by their orders that the plaintiff sustained dam- 
ages. It would be monstrous if a party causing another to do a 
thing were exempt from liability for that act, merely because 
there was a contract between him and the person immediately 
causing the act to be done." (i) 

Again in Bower v. Peate, (2) Lord J. Cockburn, C. J., said : 

" A man who orders a work to be executed, * 
* from which in the natural course of things 

injurious consequences to his neighbor must be expected to 
arise, unless means are adopted by which such consequences may 
be prevented, is bound to see to the doing of that which is neces- 
sary to prevent the mischief, and cannot relieve himself of his 
responsibility by employing someone else whether it be the 
contractor employed to do the work from which the danger arises, 
or some independent person to do what is necessary to prevent 
the act he has ordered to be done from becoming wrongful." (3) 

This statement of the law is, as observed by Lord Blackburn 
in Hughes v. Percival, (4) rather broadly put, and could not be 
universally applied, but would fit most cases of such a nature 
arising under railway contracts. The holding in the latter case 
was that the law casts a duty upon a person carrying on opera- 
tions involving risk to others, to see that reasonable care and 
skill are exercised in those operations, and that such a person's 
responsibility could not be got rid of by delegating the perform- 
ance to a third person. (5) 

The rule was well put by Williams, J., in the case of Pickard 
v. Sm't'i, (6) as follows : " Unquestionably no one can be made 
liable for an act or breach of duty unless it be traceable to him- 
self or his servant or servants, in the course of his or their em- 
ployment; consequently, if an independent contractor is employed 



(i) 2 Ellis & Bl. at p. 769. 
(2)L. R., i Q. B. D. 321. 
(3) L. R., i Q. B. D. at p. 326. 
Gl) 8 App. Cas. 443. 

(5) Ibid., and see Barham v. Ipswich Dock Commrs., 54 L. T. 23. 

(6) 10 C. B. (N. S.) 480 ; and see Steel v. S. E. Ry. Co., 16 C. B. 550 ; 
Reedie v, Lon. & N. W. Ry. Co., 4 Exch. 244 ; Allen v. Hayvvard, 7 Q. B. 
960 ; Mitchell v. Darley Main Colliery Co., L. R., 14 Q. B. D. 125. 



236 THE RAILWAY LAW OF CANADA. 

to do a lawful act, and in the course of the work he, or his ser- 
vants, commit some casual act of wrong, or negligence, the 
employer is not answerable 

11 That rule is, however, inapplicable to cases in which the act 
which occasions the injury is one which the contractor was em- 
ployed to do ; nor by a parity of reasoning to cases in which the 
contractor is entrusted with the performance of the duty incum- 
bent upon his employer, and neglects its fulfillment whereby an 
injury is occasioned." 

The nature and extent of the control and superintendence 
which the employer exercises over the contractor is always a 
question of fact ; and to entail liability upon the former must be 
shewn to have extended, not only over the general character of 
the work, but directly to the manner or method of the doing of 
the act causing the injury, (i) For instance, where a corporation 
employed a contractor to lay down sewer pipes in streets, and 
an employee of the contracter was killed by the caving in of the 
walls of a sewer owing to insufficient shoring, it was held that 
though the corporation exercised a general superintendence over 
the work through their inspector, they were not liable, as the 
evidence did not show that the corporation had by their inspec- 
tor so interfered with the conduct of the work by the deceased 
as to assume personal control over him. (2) 

Another forcible illustration is afforded by the case of Kcrr v. 
Atlantic & North West Ry. Co. (3) There a contractor was 
employed to build a portion of the railway, at a fixed price of 
so much per yard for filling, excavations, etc., the work to be 
done under the superintendence of the company's engineers, in 
accordance with their directions, with the usual stipulations as 
to the right of the company to take away the work from the con- 
tractor, put on an extra force of men, etc. The contractor was 
to furnish all materials and plant, and was allowed no extra 
remuneration for long hauls; the company, however, were bound to 
furnish borrow-pits if required, and to exercise their statutory 
powers to expropriate land and rights of way for that purpose, 

(1) Supra, pp. 30-32. 

(2) Murphy v. Ciiy of Ottawa, 13 O. R. 334. 

(3) Q. R., Q. B. (confirmed in the Supreme Court), Dec., 1895. Not >' et 
reported in either Court. 



CONSTRUCTION OF THE RAILWAY. 237 

if called upon by the contractor so to do. The contractor, by 
an independent agreement, obtained the right to excavate mate- 
rial from the land of a neighboring proprietor. In the course 
of excavation he destroyed a right of way to which the land 
excavated was subject in favor of the plaintiff, who sued the com- 
pany in damages. The latter were held not liable, on the ground 
that they could exerciss no control over the contractor as to the 
place where he chose to obtain his material or the manner of his 
obtaining it, but only as to the quality of the material supplied, 
and could not interfere to prevent him obtaining suitable material 
wherever he pleased. 

The determination of the whole question seems to depend upon 
the application to the facts of each case of the maxim, " quifacit 
per alium facit per se." It has to be decided whether the person 
causing the damage is the agent, servant, or employee of another, 
or is one for whose acts that other is responsible. This is the 
law in Quebec ; (i) and the commentators on the Code Napo- 
leon in France make practically the same distinctions as we find 
in the English jurisprudence. With that exactness which charac- 
terizes the French text-writers, we find the distinction clearly 
drawn between the "proprietor " who engages a "contractor," 
and the " employer " (commettanf) who hires a servant {prepose). 
Thus we find Demolombe (2) defining the last named as 
" Quiconque est employe par un autre a des soins, a des occupa- 
" tions, a des travaux interieurs ou exterieurs, tel que commis, 
" surveillant, ouvrier, voiturier, journalier, mecanicien, compa- 
" gnon, tons ceux enfin qui se trouvent vers le commettant dans 
" une situation subordonnee de ce genre." 

And the same writer, after stating that the proprietor would 
not be a " commettant " according to the law, if he entrusted 
the execution of the works to the contractor " a prix forfait" 
without reserving any control, adds, that it would be otherwise 
if the person who has ordered the works has reserved to himself 
oversight and control, for, in such a case, he has taken the 
position of " commettant" and the contractor or- workmen 
would become his " prepose" (3) 

(1) C. C. 1054- 

(2) Tome 31, No. 669. 

(3) Tome 31, No. 623. 



Interference 
with ditches 
and water- 
courses. 



238 THE RAILWAY LAW OF CANADA. 

Dalloz adopts the same view, and states that the proprietor 
who reserves control and direction over the works which he has 
entrusted to the contractor is a " commettant" and, as such, 
responsible, under the article of the Code. He says : 

" Mais la responsabilite a laquelle 1'article 1394 soumet les 
" commettants ne depend pas de ce qu'ils ont choisi leursprepo- 
" ses, mais suppose en outre qu'ils ont le droit de leurdonner des 
" ordres et des instructions sur la maniere de remplir les fonc- 
<f tions auxquelles ils les emploient, autorite sans laquelle il n'y 
" apasde veritable commettant.'' (i) 

Damage caused by Construction of Railway. 

1. It has been already pointed out that damages must be 
assessed, once for all, in respect of injuries which were foreseen 
or ought to have been foreseen as likely to result from the works 
of a railway company to lands taken or injuriously affected. 
If the damage that occurs is greater than was anticipated, no 
compensation can be subsequently claimed, nor can action be 
maintained in respect of it. (2) 

This applies generally to cases of overflow of drains and water- 
courses. (3) 

But the compensation awarded does not, in the absence of ex- 
press agreement, include all contingent and possible damage which 
may arise from the construction of the works, bat cannot be fore- 
seen at the date of the award. (4) 

The above statement of the law is, of course, based on the sup- 



(1) Dalloz vo. Responsabilite", No. 611, Vide, Manuel des Edtiments, 
Torne I, p. 8 ; and pp. 352 and 367. 

(2) Supra ch. 7, sec 41 ; and see Croft v. London & North-West Ry. Co., 
3 B. & S. 436 ; Todd v. Metropolitan District Ry. Co., 24 L. T. N. S. 435 ; 
Chamberlain v. West of London & Crystal Palace Ry. Co., 2 B. & S, 
617, 638. 

(3) Knapp v. The Great Western Ry. Co., 6 U. C. C. P. 187 ; L'Esper^ 
ance v. The Great Westein Ry. Co., 14 U. C. Q. B. 187 ; Vanhorn v. The 
Grand Trunk Ry. Co., 9 U. C. C. P. 264;McGillivray v. Great Western Ry. 
Co., 25 U. CR. 69 ; Utters. Great Western Ry. Co.jiyU. C. Q. B. 392; 
Nichol v. The Canada Southern Ry. Co., 40 U. C. Q. B. 583 ; Tolton v. 
Can. Pac. Ry., 22 O. R. 204 ; Wallaces. The Grand Trunk Ry. Co., 16 
U. C. Q. B. 551 ; Crewson v. The Grand Trunk Ry. Co., 27 U. C. Q. B. 68. 

(4) Lawrence v. Great Northern Ry. Co., 16 Q t 6.643; Lancashire & 
Yorkshire Ry. Co. v. Evans, 15 Beav. 322. 



CONSTRUCTION or THE RAILWAY. 239 

position that the construction of the works is carried on in a law- 
ful and proper manner, and not negligently. 

2. By the common law, no rights can be claimed, jure naturae, Surface water. 
in the flow of surface water, and its detention, expulsion or 
diversion is not an actionable injury, even when injury results to 
others, (i) A railway corporation duly authorized by law has no 
other or different rights regarding surface water or superficially 
percolating waters, and if its road-bed obstructs or diverts the 
natural flow of such waters, no right of action, by the common 
law, arises to adjoining owners of land, the presumption being 
that the damages to which they are en titled were included in the 
compensation assessed. (2) 

But where the overflow is caused by a negligent or unlawful 
construction of the railway, recovery can be had by action at law 
and not by arbitration under the Act. If, on the other hand, the 
damage which has been sustained could have been foreseen, and 
is the natural and necessary result of the construction of the 
work authorized by statute, the remedy would be by arbitration 
under the Act. (3) 

It is difficult to determine what constitutes under the Railway 
Acts an actionable negligence in such cases. In an Ontario case, 
where the plaintiff was allowed an action for damages against the 
company for obstructing the drainage of his land, such damages 
seem to have been allowed on the presumption that the company 
had, by the terms under which the lands were acquired, rendered 
it incumbent upon them to construct a culvert to carry away the 
accumulated or other waters, and that such culvert being insuffi- 
cient for the purpose, its inefficiency was evidence of negligent 
construction. (4) The language used by Draper, C. J., in this 
case was as follows : ''It must have been foreseen that the em- 



1 i) Gould on Waters, 263. 

(2) Walker v. Old Colony Railroad Co., 103 Mass. lo ; Nichol v. The Can- 
ada Southern Ry. Co., 40 U- C. Q. 13. 583 ; commenting on and distinguish- 
ing McGillivray v . Great Western Ry. Co., 25 U. C. Q. B. 69 ; Crewson 
v. The Grand Trunk Ry. Co., 27 U. C. Q. B. 68 ; L'Esperance v. Great 
Western Ry. Co., 14 U- C- Q. B. 173. 

(3) Addison on Torts, 763 ; Simoneau v. The Queen, 2 Ex. (Can.) 391 ; 
Morin v . The Queen, 20 S. C. R. 515 (confirming 2 Ex. 390), and see Wal- 
laces. G. T. R. Co., 16 U. C. Q. B. 551 ; Cameron v. Ont., Simcoe & 
Huron Ry. Co., 14 U. C. Q- B. 612. 

(4) McGillivray v. The Great Western Ry. Co., 25 TJ.C.Q.B. at p. 74. 



240 THE RAILWAY LAW OF CANADA. 

bankment, without any culvert, would prevent such natural or 
artificial drainage , and if the defendants acquired the land on 
which to place the embankment without condition or reservation 
of any kind, the decisions show this would have barred the 
plaintiff's claim. The defendants offer no evidence of the terms 
on which they acquired the lands, but we have the fact that they 
did construct a culvert, which, after the verdict, we must take to 
be insufficient ; and we think we must also assume that in some 
way it had become obligatory on the defendants to construct it, 
and that the drainage of the lot was the object proposed ; or it 
may be perhaps more properly stated, that preventing dam- 
age to the land, by stopping the escape of surface water, was the 
object and the duty cast on the defendants. The fact that the 
defendants have recently made another culvert in a different part 
of the embankment strengthens this conclusion." (i.) 

It will be noticed that the Railway Act does not provide for 
the case of surface water as it does for the restoration of water- 
courses or streams under section 91. The most that can be 
said in favor of the contention, that railway companies are to 
provide for the proper drainage of surface water, is to be found 
in section 92, where they are enjoined to do the necessary works 
with as little damage as possible. 

This was the state of affairs that existed in the leading case of 
Lawrence v. The Great Northern Railway Co., (2) the special 
statute governing the defendants in that case only requiring them 
to make openings when the railway crossed any public drains, 
embankments, or works made in any drainage district, but was 
silent as to flood waters. 

The plaintiffs had already been compensated for all injury 
and damage done to the estate by severance or otherwise. The 
railway, construe! ed in conformity with its Act of Parliament, 
was carried along an embankment upon low lands lying between 
a river and plaintiff's land. The low lands were separated from 
plaintiff's land by a bank, which, before the railway embankment 
was placed there, was sufficient to protect his land from the 
flood-waters of the river ; but, in consequence of the construc- 



(1) Ib. P . 74. 

(2) 16 Q. B. 643, 6 Eng. Ry. Cas. 495. 



CONSTRUCTION OF THE RAILWAY. 241 

tion of the railway embankment, the flood-waters were unable 
to spread themselves over the low lands as formerly, and flowed 
over the bank on to his land. The Court held that as the com- 
pany might, by proper precautions, have prevented the injury 
sustained by the plaintiff, an action on the case was maintainable ; 
and the compensation previously had could not be held to em- 
brace contingent and possible damages which might arise after- 
wards by the works of the company at other places, and which 
could not be foreseen by the arbitrator. 

It is to be noticed, that the Court in this case also decided 
that the road was negligently constructed, because the company, 
by executing their works with proper precaution, might have 
avoided the injury to the plaintiff ; and the want of such caution 
was sufficient to sustain the action. It was only on such grounds 
that the Court could have held that the remedy was by action, 
for had the company been acting lawfully in every respect, and 
not negligently, the remedy, if any, must have been by arbitra- 
tion under the Railway Acts, (i) 

No doubt the above case was one where the method of con- 
structing the road might be clearly said to be in derogation of 
the principles of the English Railway Act, and of section 92 of 
our Railway Act, which require that the company's powers shall 
be exercised so as to commit as little damage as possible. The 
company had clear notice of the flooding of the land by the 
presence of the embankment previously erected to exclude the 
waters from plaintiff's land, and would certainly know that the 
construction of their embankment would, without a proper out- 
let for the waters, unduly confine them. (2) 

It is further pointed out in some of the Ontario cases, that one 
of the most important grounds of the above decision was that 
the damage complained of was occasioned by an act of the 
railway company at a place not on plaintiffs land, and with 
which the plaintiff had nothing to do, and was not concerned in- 
{3) This is also the American doctrine : that damages esti- 

(1) See judgment of Wilson, J., in Nichol . Canada Southern Ry. Co. ,40 
U. C. Q. B., at page 594. 

(2) See also I. Redfield on Railways, 82, s. 7. 

(3) See judgment of Draper, C. J., in Knapp v. The Great Western Ry. 
Co , 6 U. C. C. P., at p. 192 ; also of Burns, J., in L'Esperance v. Great 
Western Ry. Co., 14 U. C. R., at p. 176. 

16 



242 THE RAILWAY LAW or CANADA. 

mated in the assessment are those resulting from the construction 
of the road on the land taken from the owner, but cannot include 
damages resulting from construction on the land of others, (i) 
When, however, the character and extent of a contingent future 
injury is capable of being ascertained, the amount of compensa- 
tion should be ascertained once for all. (2) In Ontario it has 
been held that railway companies are not subject to the provi- 
sions of "The Ditches and Watercourses Act" (R. S. O., ch. 
199, 1877) ; (3) and in any event, that such Acts could not be 
made applicable to railways under the jurisdiction of the Do- 
minion Parliament. (4) 

Quebec Law. 3. By the law of Quebec, lands on a lower level are subject to 
receive such waters as flow naturally and without the agency of 
man, from those on a higher level, (5) and the owner of the 
lower land can do nothing to prevent this flow, nor can the 
owner of the higher level do anything to aggravate it. (6) If 
a railway company in that province does not use or exercise its 
powers in such a way as to drain the lands through which its rail- 
way runs as effectually as they had been drained by the old water- 
courses before the construction of the railway, it must make 
compensation or pay damages. (7) But when the injury occa- 
sioned to the plaintiff is one that could have been foreseen at the 
time when part of his farm was taken for the purposes of the 
railway, the company is discharged from making further com- 
pensation by the acquittance given to the company of all dam- 
ages resulting from such expropriation. (8) 

In a case where plaintiff's farm was at the bottom of a slope r 
and the railway ditches, which crossed his boundary ditches and 
those of the neighboring proprietors, collected the water for 
about a mi'e and a half, and discharged it upon his property, sa 

(1) Mills Eminent Domain, 217. 

(2) Croft v. London, etc., Ry. Co., 32 L. ]. (Q. B.) 113. 

(3) Miller v. G. T. R. Co., 45 U. C. Q. B. 222. 

(4) Per Hagarty, C. J., at p. 225. 

(5) C. C. 501. 

(6) C. C. 502. 

(7) Grand Trunk Ry. Co. v. Miville, 14 L. C. R. 469; Can. Pac. Ry^ 
Co. v. Pichette, 31 L. C. J. 36 (Q.B.) ; Can. Pac. Ry. v. Landry, U R. L. 
590. 

(8) Simoneau v. The Queen, 2 Ex. (Can ) 391 ; Morin v. The Queen, 20 
S. C. R. 515. 



CON. C TRUCTION OF THE RAILWAY. 243 

that, in consequence, he was obliged, either to suffer his land to 
be overflowed, or to accept the burden of maintaining ditches 
sufficient to carry off the water so collected and discharged; and 
the flooding did not occur until five or six years after the con- 
struction of the railway, and the flooding was not in consequence 
of any defect or want of repair in the railway ditches or culverts, 
but because the boundary ditches were not kept open and in 
good order ; it was held that what had happened could have been 
foreseen, for it was obvious that the ditches on each side of the 
railway would collect water and discharge it in the manner 
mentioned, (i) 

4:t When the surface water is drained off land by means of artifi- Obstruction 
cial drains, the company are now bound, (sec. 91) upon acquiring of water- 151 
lands for construction purposes, to restore such drains in the courses, 
same manner as water-courses, properly so called, to their former 
usefulness. Any agreements, therefore, in regard to transfers 
of land ro railway companies under the Railway Act will neces- 
sarily be made under the assumption that the company will not 
impair the drainage capacity of the remaining portion of land. 

If, owing to the construction of the road, the remaining 
portion of land is flooded, by the inability of the surface water to 
find egress through the drains, then, if the construction was 
negligent in the light of sec. 91, compensation could be recovered 
in an action for damages against the company. (2) Where an 
injunction was taken to restrain a railway from interfering with 
the plaintiff's water power and his mills by constructing an 
embankment across his mill dam, it was held : that as the railway 
works were actually constructed before the writ was served, the 
injunction was not well taken, and that the plaintiff, having 
allowed the question of his alleged damage to be submitted to 
arbitration before serving his injunction, he thereby waived his 
right to an injunction. (3) 



(1) Ib. 

(2) Vanhorn v. The Grand Trunk Ry. Co., iSU.C.R. 356; gU.C.C.P. 
264 ; McGillivray v. The Great Western Ry. Co., 25 U. C. Q. B. 69 ; Moison 
v. The Great Western Ry . Co. , 14 U. C. R. 109 ; Carron v. The Great Western 
Ry. Co., 14 U. C. R. 192 ; Addison on Torts 763. 

(3) Poudrette v. O. & Q. Ry. Co., u L. N. 130. 



244 



THE RAILWAY LAW OF CANADA. 



5. In the erection of bridges the company are not to impede the 
free navigation of any river, stream or canal, (i) Before any 
bridge is built over navigable waters, the plan of the bridge and 
the proposed site of the work must be submitted to the Railway 
Committee for their approval. (2) The opening of swing bridges 
or draw bridges over rivers or canals is also subject to the regu- 
lation prescribed from time to time by the governor in council, 
(3) also the height of bridges above the surface of the water 
crossed. (4) The governor in council may also require the 
substitution of one form of bridge for another. (5) 

6. The subsequent purchaser of land adjoining a railway cannot 
recover for damages to such land arising by reason of the 
construction of the railway, where the former proprietor had 
been compensated for all damages occasioned thereto by the 
railway passing over and across his lands, (6) excepting when 
the injury is of an extraordinary or unusual nature. But it 
appears that where a railway company diverts a water-course with- 
out authority, and afterwards makes compensation therefor to 
the then owner of the land, the plaintiffs predecessor in title, the 
equitable easement thereby created in favor of the company is 
not valid against the registered deed of the plaintiff, a bond fide 
purchaser for value without actual notice ; the diversion being 
wrongful as against the plaintiff. (7) 

7. The Crown is under no obligation to repair or keep open the 
boundary ditches between farms crossed by the Intercolonial 
Railway in the Province of Quebec. (8) 



(1) Sec. 178. 

In a case where the Corporation of Tingwick sued the G. T. Ry. Co. for 
damages caused to a bridge they had built over a river by the swelling of 
the river in consequence of defendants' bridge, it was Held : that damages 
were due, including the cost of rebuilding plaintiffs' bridge, but only such 
damages as were suffered within a year previous to date of action. Corp. of 
Tingwick v. G. T. R. Co., 3 Q. L. R. in (Q. B. 1877). 

(2) Sec. 181. 

(3) Sec. 179. 

(4) Sec. 179. 

(5) Sec. 182. 

(6) Wallace v. The Grand Trunk Ry. Co., 16 U. C. R. 551; Part- 
ridge -v. The Great Western Ry. Co., 8 U. C. C. P. 97. 

(7) Tolton v. Can. Pac. Ry. Co., 22 O. R. 204. 

(8) Bertrand v. The Queen, 2 Ex. (Can.) 285 ; Simoneau v. The Queen, 
2 Ex. (Can.) 391 ; Morin v. The Queen, 2 Ex. (Can.) 396, 20 Can. S. C. 
R. 515. 






CONSTRUCTION OF THE RAILWAY. 245 

Highways. 

1. Sections 183 to 190 contain regulations affecting highway interference 
crossings. By sec. 186 the inclination of the ascent or descent, with, 
as the case may be, of any approach by which any roadway is 
carried over or under the railway or across it at rail level, must 
not be greater than one foot of rise or fall for every twenty feet 
of the horizontal length of such approach, unless the Railway 
Committee directs otherwise. 

The descent, even of the one foot in twenty, must be a gradual 
and not an abrupt one. Where the railway has excavated a portion 
of the highway for the purposes of the railway, leaving the railway 
at a certain point of the highway two feet six inches below its 
level, the company will be liable for injuries resulting from the 
dangerous condition of the highway to persons lawfully using it. 

CO 

By the present Railway Act, the crossing of railways upon, 
along, or across streets or other public highways, is now under 
the jurisdiction of the Railway Committee. 

The authority vested in the Railway Committee by sections 
ii and 14 of the Act, with respect to highways and streets over 
and through lands of a railway company, can only be exercised 
upon an application or complaint made to it. in the absence of 
any complaint or application, the general power of a Municipal 
council, in the Province of Quebec, to order and lay out roads, 
is not restricted, and its proceedings are valid. (2) 

Where a projected public road within a municipality runs 
across land of a railway company, it is necessary to obtain the 
consent of the railway company, or the authorization of the Rail- 
way Committee, to the laying out of such road, when the land 
intersected by the road is actually used or required for the 
working of the railway. (3) 

Under the old Railway Acts, such jurisdiction belonged to the 
municipal authorities. In such cases it has been held that 
where a railway company constructed their railway along a high- 
way in a municipailty, the council whereof were not formally 

(1) Grand Trunk Ry. v. Sibbald, 20 S. C. R. 259. 

(2) Corp. de St. Valentin v. Comeau, Q. R., 3 Q. B. 104. 

(3) Ib. ; and see Parish of St. Liboire v. G. T. R Co., 16 L. C. R. 198. 



246 THE RAILWAY LAW OF CANADA. 

applied to for leave, but subsequently passed a resolution notify- 
ing the railway company to fill up the ditch existing on both sides 
of the railway, and to put down proper crossings, the corporation 
had thereby admitted that the railway company were lawfully in 
occupation of the highway, and could not afterwards object, (i) 

Also that the leave of the municipal authorities, required before 
a railway could be carried along an existing highway, may be 
granted at any time whether before, during, or after construction 
of the railway, and need not necessarily be given by by-law. 
And a Municipal Act, enacting that the powers of township 
councils shall be exercised by by-law, must be construed as 
referring only to the exercise of powers of the council under the 
Municipal Act, and not to powers which may be exercised under 
a special Act passed for other purposes or by another legis- 
lature. (2) 

The corporation having stood by while the railway was con- 
structed, and subsequently for upwards of five years, while it was 
in operation, and having also, by resolution, procured further 
expenditure by the company, were held to be bound by 
acquiescence, and could not maintain an action for the removal 
of the railway from the street. A corporation may be bound by 
acquiescence as an individual may. (3) 

The principle lhat the permission of the municipal authorities 
to a railway company, to build along and upon a street, and even 
occupy the whole of it, may be granted by mere resolution, or 
even inferred from their acts or acquiescence, and that such 
permission relieves the railway company fom liability for 
obstructing the street, has been recognized in Ontario for many 
years. (4) And the Privy Council, in a recent Quebec case, 
(5) has refused to interfere with this judicial interpretation of a 
clause re-enacted time and again in the Railway Acts of this 
country. In the case referred to, the railway company occupied 

(1) Corp. Township of Pembroke v. The Canada Central Ry. Co., 3 O. R. 

503-' 

(2) Corp. Township of Pembroke v. The Canada Central Ry. Co., 3 O. R. 

503- 

(3) 1- 

(4) Regina v. G. T. R. Co., 15 U. C. Q. B. 121; in re Day and the Town 
of Guelph, 15 U. C. Q.B. 126. 

(5) Atty. Genl. (Casgrain) v. Atl. & N. W. Ry. Co., II R. May (confirm- 
ing the judgment of the Quebec Court of Appeals, Q. R. 2 Q. B. 305). 



CONSTRUCTION OF THE RAILWAY. 247 

the whole of an alleged public street with their works. On a 
suit by the Attorney General at the instance of a private relator, 
to re-open the street, it was held that inasmuch as by plans, 
submitted to and approved by the Municipal Council, it was 
shewn that this street would be closed by the works, there was a 
virtual permission granted by the council to close the street, and 
that the company were acting within their powers, though not 
expressly authorized by either by-law or resolution to close the 
street. 

The Courts have been frequently called upon to decide ques- 
tions arising in actions of damages by proprietors whose pro- 
perty abutted upon streets or highways along which a railway 
was carried under this provision of the former Acts. In the case 
of Lambert v. Corporation of Three Rivers, (j) the Quebec 
Court of Appeals decided that where the works for the con- 
struction of a railway authorized by statute, passing in the street 
of a town, injure the property of an individual, his action for 
damages would lie against the railway company, and not against 
the corporation. In another case of the City of Three Rivers v. 
Louis Lessard, (2) the same court re-affirmed this principle, hold- 
ing that a municipal corporation is not responsible for damages 
caused to a property by works constructed in a street by a rail- 
way company authorized by statute to make such works ; and 
if the works cause damage, they should be claimed from the com- 
pany and not from the corporation. Again, in a case of Renaud 
v. City of Quebec, (3) it was held that the location and con- 
struction of a railway, and the passage of its trains in one of the 
streets of Quebec, was a use to which the street had not been 
destined to be put, and that the corporation could not, without 
being authorized by a special act, permit such construction nor 
the passage of trains, and the corporation, by authorizing such 
construction and passage of trains, committed an illegal act, and 
rendered itself jointly and severally liable with the railway for 
damages to the abutting proprietors. This case could only be 
supported, on the ground that the city had not given the neces- 
sary permission as required by the statute (16 Vic., cap. 100). But 

(1) 10 R. L. 359. 

(2) 10 R. L. 441. 

(3) 8 Q. L. R. 102. Reversed in Appeal. See Ramsay's Digest, p. 214. 



248 THE RAILWAY LAW OF CANADA. 

in the Supreme Court, in the case of Lefebvre v. City of Quebec y 
(i) it was held that where the owner of several house sabutting on 
a street, through which a railway was authorized to pass both by 
statute and resolution of the city council, took action against the 
city corporation for damages suffered on account of the con- 
struction and operation of the railway, the owner had no right of 
action against the corporation. The reasons given being that if 
the corporation gave the authority in compliance with the statute, 
there was a complete justification of the acts complained of. In 
that case, the corporation merely gave the railway company 
liberty to choose one of the streets in the town ; and although 
they were subsequently informed of the choice made by the com- 
pany, and asked to take steps to legalize the line, they took no 
further action. Under these circumstances, it was held that the 
recourse of the abutting proprietor, if any he had, was not against 
the city corporation, but against the railway company. 

As has been already pointed out, the damages which a pro- 
prietor may recover from a railway company acting within its 
powers must be the result of a loss peculiar to himself, and 
differing in kind from that suffered by the community generally, 
and this principle has been applied to the case of loss or 
inconvenience suffered by a proprietor owning land abutting 
upon a street through which the railway has been permitted 
to run. In the case of Brodeur v. the Corporation of Roxton 
Falls and the South Eastern Railway Company, (2) it 
was held that in order to maintain an action of damages 
against a railway company because of the running of the railway 
over a public highway adjoining the residence of the plaintiff, 
and obstructing his egress and ingress, it is necessary for the 
plaintiff to prove that the immediate access to his premises is 
affected, and that he has sustained damages particular to himself 
and differing in kind from that of the public. That is to say, 
that if his access is not cut off by the railway, but that he merely 
suffered inconvenience not different in kind, though greater in 
degi ee, than other proprietors along the street, he would not be 
entitled to compensation. This principle was re-affirmed in the 



(1) Cassel's Dig. 176. 

(2) II R. L. 447. 



CONSTRUCTION OF THE RAILWAY. 249 

case of Whit field against the A. & N. W. Railway, (i) where 
the plaintiff, a proprietor of land abutting on a street in the town 
of Iberville, sought to restrain the railway company, by injunc- 
tion, from constructing and operating its railway along the street 
in front of his property. The injunction was refused, upon the 
same ground as that stated in Brodeur's case, namely, that the 
damage which the plaintiff claimed to have suffered resulted from 
an inconvenience which was the same in kind as that suffered by 
the other proprietors along the street and the inhabitants of the 
town generally, and was not one which was a subject of com- 
pensation under the Act, and that therefore the railway company 
was not bound to pay compensation before proceeding with its 
work. (2) The case would be otherwise, had the railway com- 
pany caused particular and special damage to the property of the 
proprietor, as was held by Privy Council in the town of Parkdale 
v. -West, (3) where the railway company lowered the level of the 
street so as to immediately and directly affect the access to the 
plaintiff's property. In the Brodeur case, it was also held that the 
municipality, having tolerated the laying and using of the railway 
along the street in question, would be thereby estoppe::! from 
urging that its construction and use was unauthorized by them. 
Notwithstanding any liability which may be cast by statute 
upon a railway company, to maintain and repair a bridge and 
its approaches by means of which a highway is carried over their 
railway (4) such highway is still a public highway, and as such 
comes within the provisions of a Municipal Act requiring every 
public road, street, bridge and highway to be kept in repair by 
the municipal corporation, who are not absolved from liability for 
default by the liability, if any, of the railway company. (5) 

Where a public load or highway is carried over the rail- 
way by a bridge, it has been held, and may be now considered 
as settled, that the railway company is bound to keep the road- 
way upon the bridge in repafr, the roadway being considered as 



(1) S. C. 1888, 33 L. C. J. 24. 

(2) And see Bourdon v. Bernard, 15 L. C. J. 60 (Q. B. 1870). 

(3) 12 App. Cas. 602. 

(4) As to liability of Ry. Co., see Fairbanks v. Great Western Ry. Co., 
35 U. C. Q. B. 523, and G. T. R. v. Godbout, 6 Q. L. R. 63. 

(5) Meads/. Township of Etobicoke, 18 O. R. 438. 



250 THE RAILWAY LAW OF CANADA. 

part of the bridge which the railway company would be bound to 
keep in repair. This was held in England in the case of the 
Lancashire & Yorkshire Ry. Co. v. The Mayor and Corporation 
of Bury, (i) by the House of Lords confirming the decision of 
the Court of Appeal. Arguing from analogy, it would seem that 
if the highway were carried under the railway by means of a sub- 
way or tunnel, thri portion of the roadway beneath the embank- 
ment of the railway would also have to be kept in repair by the 
railway company ; and in either case, the railway company would 
be liable for any damage caused to any person using such road- 
way, on such bridge or in such tunnel, by reason of its not being 
in proper state of repair. The result of such a decision as that 
of the House of Lords in the Lancashire & Yorkshire Ry. Co. 
might be very far reaching. For instance, where a railway is 
carried for a considerable distance under the streets of a town, 
and the portions cf the street thus tunneled under are supported 
by archways or bridges upon which the streets are supported, it 
might be a serious question as to whether the railway company 
would not be liab'e for any damage caused by these portions of 
the streets being out of repair, and whether there would not be 
an obligation upon them to keep these portions of the streets in 
proper order. 

Where an act provides that the approaches for 100 feet to and 
next adjoining each end of all bridges shall be kept up and main- 
tained, it was held, that the word " approaches " means all such 
artificial structures as may be reasonably necessary and conven- 
ient for the purpose of enabling the public to pass from th road 
on to the bridge and from the bridge on to the road, and does 
not include the highway to the distance of 100 feet from each 
end of the bridge, at all events, unless the artificial structures 
extend so far. (2) 

The Act provides that the railway shall not be carried 
along an existing highway, but shall merely cross the same 
in the line of the railway, unless leave therefor has been 
obtained from the railway committee, and that no obstruction of 
such highway with the works shall be made without turning the 



(1) 14 App. Gas. 417. 

(2) Traversy v. Gloucester, 15 O. R. 214. 



CONSTRUCTION OF THE RAILWAY. 251 

highway so as to leave an open and good passage for carriages, 
and on completion of the works, replacing the highway, (i) 

It is evident that the provisions of this clause as to obstruc- 
tion of ' such highway " must refer to the case of the railway 
crossing a highway, and not being carried along it, by permission 
of the railway committee. For in certain cases, which may easily 
be imagined (and some have actually occurred), the construction 
of the railway along a highway would result in the complete or par- 
tial blocking of the highway, and even in its being entirely ab- 
sorbed by the railway ; which would, of course, make it impossible 
to "replace" the highway. This interpretation has been placed 
upon similar provisions of the previous Railway Acts, (2) which 
differed only from the present Act in that the leave of the proper 
local or municipal authority had to be obtained instead of that 
of the railway committee. From a very early period in the history 
of railway legislation in this country this interpretation has been 
adopted, (3) and the legislature, with a presumed knowledge of 
the judicial interpretation placed upon these provisions, has 
never altered their phraseology, except as above indicated, though 
frequently amending the Act in other respects. In a very recent 
case (4) the Privy Council refused to interfere with the judicial 
interpretation thus placed upon these clauses ; and held that a 
railway company was acting within its powers in entirely closing 
a city street, by constructing its embankment along it with the 
permission of the city council. 

This permission need not necessarily be by by-law, (5) nor 
even by formal resolution ; it may be implied from the acts of the 
municipality, such as the approval of the railway company's 
plans, or allowing the works to be completed and used, without 
protest. (6) 

(1) Sec. 183. 

(2) R. S. C., cap. 109, s. 12 ; and acts consolidated thereby. 

(3) Regina v. G. T. R. Co , 15 U. C. Q. B. 121 ; in re Day v. The Town 
of Guelph, ibid. 126 ; and see Howe v. The H. & N. W. Ry. Co., 3 Ont. A. 

(4) Casgrain v. A. & N. W. Ry. Co., u R. May. 

(5) Regina v. G. T. R. Co., 15 U. C. Q. B. 121 ; inre Day v. The Town 
of Goelph, ibid. 126. 

(6) Casgrain v. A. & N. W. Ry. Co., n R. May.; Pembroke v. Can. Cen- 
tral Ry. Co., 3 O. R. 503. 



252 THE RAILWAY LAW OK CANADA. 

After completion of the work of crossing a highway, the same 
must be replaced, and no obstruction of the highway shall be 
made ; but so long as the rails do not rise above or sink below 
the line of the highway more than one inch, they are not deemed 
an obstruction, (i) If an accident occurs at the crossing by a run- 
away, and the wagon is broken at the crossing, if the rails pro- 
trude more than one inch, this is not prima facie evidence of 
negligence on the part of the railway company, but it is a ques- 
tion for the jury to determine whether such projection of the 
rails was the cause of the accident or not. (2) 

The general principle to be applied to cases of railways con- 
structed across or along highways is that the company is not liable 
so long as the railway is properly constructed in accordance with 
the provisions of the Act, and without negligence. This is the 
same principle which has been already frequently mentioned, and 
its application comes up in so many different cases and under such 
varied circumstances as to make it necessary to keep it always in 
mind. For instance, referring to the particular instance of a railway 
constructed along or across a highway, the damage caused to 
persons or vehicles by striking against the rails, and being upset 
or damaged thereby, would not be recoverable from a railway 
company, provided that the rails were laid in accordance with the 
provisions of the Act. This doctrine was recognized by the 
Quebec Court of Appeals, and confirmed by the Supreme 
Court, in a case of Parker v. The Montreal Street Railway 
Co. (3) where the driver of a vehicle was injured by the 
upsetting of his wagon in consequence of coming in contact 
with one of the rails laid by the company in one of the 
streets in Monteal. The charter of the company and the 
by-laws of the city authorized the railway to be laid with rails 
of a particular pattern, which were not to exceed the level of the 
street by more than one inch, and both Courts recognized the 
principle that if the rails had been laid in accordance with such 
by-law, the company would not be responsible for the damage 
resulting from the accident ; but the Supreme Court decided, as 
a matter of fact, that the rails had not been so laid, and that the 

(1) Sees. 183, 184. 

(2) Thompson v. The Great Western Ry. Co., 24 U. C. C. P. 429. 

(3) 7 L. N. 194, Cassel's Dig., p. 731. 



CONSTRUCTION OF THE RAILWAY. 253 

weight of the evidence showed that the height of the rails exceeded 
the statutory limit. 

Another application of this principle may be instanced. A 
street railway company was authorized to lay its track " along 
the highways in the parish of M." leading into the streets of the 
city. It was held, thai the company in laying its track incon- 
veniently close to the property on one side of the highway, and 
thus apparently favoring the property on the other side, had not 
exceeded its powers, and an action for the abatement of the 
nuisance was dismissed, (i) 

In the line of a ditch formerly running at the side of 
the highway, and several feet within the limits of the highway, a 
railway company constructed an open culvert of square timber 
about five feet deep and seven feet wide. A person walking along 
the road fell into the culvert and was injured. The Court held, 
that the company were liable for not restoring the highway to 
its former state or in a sufficient manner not to impair its use- 
fulness. (2) 

Provisions are made by sections 185 and 186 as to the dimen- 
sions of bridges carrying the railway over highways and the 
inclination of the roadway beneath such bridges, and of the ap- 
proaches, whether the roadway is carried over, across or under 
the railway, and as to the proportion of the cost of providing 
for the fencing of such approaches and bridges to be determined 
by the Railway Committee. (3) 

2. In any event, the construction of the railway along or across Approval of 

any street is subject to the condition precedent of the company's Railwa y 

; . . , , -. . . . . , Committee, 

submitting a plan and profile of the proposed construction for 

the approval of the Railway Committee. And in the case of 
railways constructed before the Act, the Committee may require 



(1) The Atty. Genl. v. The M. C. P. Ry. & The Trustees of M. Turnpike 
Roads, i L. N. 580, S. C. Que., 1878. 

(2) Fairbanks v. Great Western Ry. Co., 35 U. C. Q. B. 523. 

(3) Where a railway crosses a highway, and the road is carried over the 
railway by means of a bridge, the railway company are bound to keep in 
repair the roadway upon the bridge ; such roadway being part of the bridge 
which the company are to maintain. Lan. & Y. Railway Co.v. Mayor, etc., 
of Bury, 14 App. Cas. 417 (affirming the Court of Appeals) ; and see Van 
Allen v. G. T. R. Co., 29 U. C. Q. B. 436. 



254 THE RAILWAY LAW OF CANADA. 

such plan and profile to be submitted within such time as they 
may direct, (i) 

The Committee have power to determine the conditions upon 
which the construction of the works shall be permitted, or upon 
which the use of the works shall be continued in the case of 
existing railways, in order to remove or diminish the danger 
which might rise from the position of the railway with regard to 
the highway. (2) And the Committee may make such orders as 
they deem just and reasonable as to works and their execution, 
and the apportionment of the cost. (3) 

These provisions would appear to apply only to highways 
existing at the time uf the construction of the railway, and if 
any highway or street is afterwards opened by a municipality, 
which is intended to cross the line of the railway, special 
application would have to be made to the Railway Committee 
to decide the question as to whether the railway company were 
bound to make provision for such crossing either on the level or 
by means of a bridge or subway. The municipal corporation 
could not compel the railway company, except by order of the 
Railway Committee, to allow them to construct a road or high- 
way across the railway, or any ditch or sewer, water, gas or 
other pipes. (4) Previous to the present Act, it would seem 
that no such works could be constructed across, over or through 
any lands of the Company. It was so decided in Quebec in the 
case of The Corporation of the Parish of St. Lib o ire v. The 
Grand Trunk Railway Co. (5) as long ago as 1865. There the 
municipality, after the railway had been constructed, opened a 
new road, and by their proces-verbal, provided that it should 
cross the railway at a certain point. On the company refusing 
to construct a bridge to carry the road across the railway, they 
took action to compel them to do so ; it was held by the Court 
of Queen's Bench, confirming the judgment of the Court below, 
that the municipality had no right to impose on the railway any 
obligation of performing works in relation to public roads, inde- 
pendent of those required by the railway itself. 



(I) Sec. 187. (2) Ibid. 

(3) sec. 188. (4) sec. ii (?). 

(5) 16 L. C. R. 198, i L. C. L. J. 54. 



CONSTRUCTION OF THE RAILWAY. 255 

3. The company are not necessarily guilty of a nuisance be- Bridges con- 
cause their bridge, which connects two highways, is not of equal ^yg ng g " 
width with the street, (i) When the railway passes through a 

public highway by a cutting below the level, and the company fail 
to connect such highway by a bridge within a reasonable time, the 
remedy in such case is by indictment or information ; an indi- 
vidual cannot maintain an action in such a case. (2) But where 
a corporation had, by their labor and capital, made a plank road, 
and were in consequence entitled under an Act of Parliament 
to receive tolls upon it, their interest in the road was held to be 
apeculiarone and distinct from the common interest which they 
would have in it as persons entitled to use it for the purpose of 
travelling, and they could therefore maintain an action of dam- 
ages against a railway company for neglecting to make, within a 
reasonable time, a proper bridge over their railway where it 
crossed the plaintiff's road. (3) 

4. Section 190 enjoins the erection of signboards at every high- Signboards, 
way crossed, and regulates the manner in which it shall be done. 

It has happened chat horses becoming frightened at objects on 
the track have collided with these sign-posts and caused acci- 
dents. In such case the company are not liable, provided they 
place them in a reasonably proper manner, with a due regard to 
all the surrounding circumstances. (4) The posts would not 
necessarily be an indictable nuisance. (5) 

Farm Crossings. 

Under sec. 191 of the Act, railway companies are bound to 
construct farm crossings for persons across whose lands the rail- 
way is carried, convenient and proper for the crossing of the 
railway by farmers' implements, carts and other vehicles. 

It was decided in the Quebec case of The Grand Trunk Ry.Co. 
v. JTuard, in appeal, (6) that the Grand Trunk Railway Co. were 

(1) Reg. v. Great Western Railway Co., 12 U. C. Q. B. 250. 

(2) Ward v. Great Western Railway Co., 13 U. C. Q. B. 315. 

(3) Streetsville Plank Road Co. v. Hamilton & Toronto Railway Co., 
13 U. C. Q. B. 600. Hamilton & Brock Road Co. v. Great Western 
Railway Co., 17 U. C. Q. B. 567. 

(4) Soule v, G. T. R. Co., 21 U. C. C. P. 308. 

(5) Ibid. 

(6) Q. R., I Q. B. 501. 



256 THE RAILWAY LAW OF CANADA. 

governed, in the matter of crossings, by the Railway Clauses Act 
of 14 and 15 Vic., ch. 51, which was incorporated in its charter, 
1 6 Vic., ch. 37, and that by that Act it was undoubtedly incum- 
bent uoon the company to construct farm crossings, the court 
deciding that such crossings must be made for each lot of land 
traversed, whether or not such lots were subdivisions of lands 
originally expropriated. 

It was also there held that the compensation made at the time 
of the expropriation of the original lots of land could not be re- 
garded as covering indemnity for lack of crossings upon future 
subdivisions of the lots. In the absence of an express agreement 
to that effect railway companies are not compelled to construct 
farm crossings unless required to do so by statute, (i) But it is 
now well settled that where the statutes, as in this country, pro- 
vide for such crossings, the proprietor of lands severed by the 
railway is entitled to the necessary crossings reasonably sufficient 
for the beneficial enjoyment of his property, the nature and 
number of such crossings to be determined by the court or upon 
a reference. (2) But where the cost of a subway or undercross- 
ing would be entirely disproportionate to its value and the 
value of the property, the company would not be compelled to 
construct. (3) The language of the present Act is different from 
that of the several Acts under which the cases of Canada Southern 
Railway Company v. Clause, (4) The Queen v. Vezina, (5) and 
Brown v. The Toronto & Nipissing Railway Company (6) were 
decided ; and the reasoning in those cases, as to the obligation 
of the railway company to construct crossings in the event of 
a future sub-division of the land after the construction of the 
railway, would hardly seem to apply to cases under the present 
Act. The decision in the case of 2 he Grand Trunk Ry. Co. v. 
, (7) recognizes the existence of such an obligation though 



(1) See DeBlois v. The Queen, I P. E. I. Reports 434. Mills Em. 
Domain, 213 ; Vezina v. The Queen, 17 S. C. R. I. 

(2) Can. Southern Ry. Co. v. Clouse, 13 S. C. R. 139 ; Can. Southern 
Ry. Co. v. Erwin, 13 S. C. R. 162. 

(3) Ibid. 

(4) Supra. 

(5) 17 S. C. R. i. 

(6) 26 U. C. C. P. 206. 

(7) Q. R.,iQ. B. 501. 



CONSTRUCTION OF THE RAILWAY. 257 

under another Act ; as would also the decision in the Canada 
Southern case, (i) while The Queen v. Vezina would seem to 
deny it. But in the latter case the Court held that there was 
no statutory obligation to construct farm crossings over govern- 
ment railways. While an argument in favor of the latter view 
may be founded upon the use of the word "carried " in section 
191, as implying the progress of construction of the railway 
across the lands, and that the obligation of the company being 
confined to making crossings for those persons only across whose 
lands the railway is carried, there is no such obligation towards 
a person acquiring land on both sides of the railway after it has 
been constructed, because the railway would not be carried over 
his land, yet the section seems equally susceptible of the more 
liberal and equitable construction that all persons whose lands are 
severed by the railway, whether acquiring the lands in their origi- 
nal state or as subdivided after the construction of the railway, 
should be entitled to such crossings as would enable them to have 
the beneficial enjoyment of their lands on both sides of the 
railway. 

The question has given rise to much controversy in the United 
States, where, under the constitution, no person's property could 
be taken from him, except for purposes of public utility and upon 
payment of indemnity. (2) The latest decision holds that there 
is no " taking " in such a case, so as to bring it within the mean- 
ing of the constitution. (3) In the Illinois Central Ry. Co. v. 
Willenborg, (4) it was held that the statutory regulations in regard 
to fencing railway tracks, and the construction of farm crossings 
for the use of adjoining land owners, are police regulations, in the 
strict sense of those terms, and apply with equal force to corpor- 
ations whose tracks are already built as well as those thereafter 
constructed. 

According to this holding, the Railway Act of 1888 would 
apply, in respect to the construction of crossings, to all railroads 
previously constructed, even to those which were previously not 



(1) 13 S. C. R. 139, 162. 

(2) Cf. Que., C. C. 407. 

(3) Chicago & N. W. Ry. Co. v. City of Chicago ; Supreme Court of Illi- 
nois, 1892 ; 24 Chicago Legal News 186. 

(4) 117 111.203. 



258 THE RAILWAY LAW OK CANADA. 

required by their charters or general act to construct crossings. 
The Act of 1888 would in fact be retroactive. 

In the Quebec statute the provision is that " farm crossings 
shall be made and maintained by the company upon the appli- 
cation of any owner of land, present or future, on each such 
land." (j) Patterson J. in Vezina v. The Queen characterizes 
this enactment as somewhat vague, and that the English version 
is not a very happy translation of the French. (2) 

Where the company are bound to construct crossings, they 
must be made within a reasonable time after the commencement 
of construction at the point required, and during the period of 
construction. Where, during a period of two years, the company 
had failed to connect the severed portions of the plaintiffs' lands, 
it was held that the damages suffered by the latter in conse- 
quence could not be regarded as compensated for by the original 
indemnity which released the company of "all claims and de- 
mands whatsoever that they (the plaintiffs) might have against 
the said company for the loss of occupation of the premises in 
question, and generally of all rights and privileges resulting in 
their favor, with respect to the portion of said farm required by 
said company for their railway." (3) 

But it would appear that in Quebec, at least, no damages could 
accrue where no time for z t i cting the crossing is mentioned 
in the deed of sale, until the company are put in default ; and 
that when no damages are proved to have been suffered by plain- 
tiff after the company has been put in default, an action of dam- 
ages will be dismissed. (4) Where, however, the statute alone is 
relied upon for a crossing, it has been held in Ontario that the 
company are bound to construct it without unreasonable delay, 
and without request on the part of the Ind owner. (5) 

The land owner has not an arbitrary right to prescribe the place 
where the crossing is to be located, neither have the company an 



(1) 43-44 Vic., ch. 43, s. 16. 

(2) 17 S. C. R., p. 27. As to abandonment of right to a crossing by sale 
of land on one side of the railway, see Midland Ky. v. Gribble, 12 R., Nov. 

P '(l 7 )' Smith v. Atl. & N. W. Ry. Co , M. L. R., 5 S. C. 149- 

(4) Crevier v. The Ontario & Quebec Ry. Co., 35 L. C. J. 58 In On- 
tario see Shaver v. Great Western Ry. Co., 6 U. C. C. P. 321. 

(5) Burke v. The Grand Trunk Ry. Co., 6 U. C. C. P. 484. 



CONSTRUCTION OF THE RAILWAY. 259 

arbitrary right to fix the place without any legard to its conven- 
ience or usefulness to the land owner, (i) The company are 
perhaps generally the best judges of the most suitable location 
for a crossing, for, as said by Jervis C. J., in York & North Mid- 
land Ry. Co. v. The Queen, (2) " By leaving the exercise of the 
powers to the option of the company, the legislature adopts the 
safest check upon abuse, self-interest." 

Farm crossings include passages across and upon the railway 
itself, a bridge over, or a tunnel under the railway ; (3) unless 
the latter would be disproportionate in cost to the value of the 
lands. (4) 

A mandamus will not lie to compel a railway company to per- 
form a statutory obligation, such as the obligation to construct 
crossings, there being an adequate remedy by ordinary action. (5) 

Bridges, Tunnels; Etc. 

Sec. 192 regulates the headway to be maintained between the 
tops of freight cars and the overhead structure of bridges, 
tunnels, etc., through which the railway passes, viz., 7 ft. clean 
And by sub-section 2, no higher cars are to be used until bridges 
are raised to correspond with the increased height of the cars. 
Where a railway company raise a municipal bridge passing over 
their railway and also the approaches thereto, as required to do 
by sub-section 4, of section 192, without obtaining the consent 
of the municipality or the owner, they are liable to the adjoining 
proprietor for the damage sustained by him by reason of the 
increased height of the highway as it approaches the bridge. 

(6) 

The Governor in Council may exempt companies from the 
operation of this section (192) where air-brakes are used, or 
otherwise. (7) Trains may only run over a bridge, when such 
bridge is constructed and maintained with safe-guards approved 

(1) Burke v. G. T. R., 6 U C.'.'. I'. 488 ; in re Reist v. Grand Trunk 
Ry. Co., 12 U. C. Q. B. 675 ; ibid. 6 U. C. C. P. 423. 

(2) i E. & B. 865. 

(3) Burke v. G. T. R,, 6 U. C. C. P. 488 ; Reist v. G. T. R, ib. 423. 

(4) Canada Southern Ry.z'. Clouse, 13 S. C. R. 140. 

(5) Dubuc v. Montreal & Sorel Ry. Co., 7 L. N. 5 ; C. R. Que. 1883. 

(6) Hill v. G. T. R., 12 L. N. 57, S. C. Que. 1888. 

(7) Sub-sec. 5. 



260 THE RAILWAY LAW OF CANADA. 

by the Minister of Railways, (i) six months delay being given to 
conform to these requirements in the case of bridges already con- 
structed. (2) 

Where a railway company take over another railway under an 
agreement to be in force twenty-eight years, and at the time of 
taking over the latter is in default under section 193, and an 
accident happens, in consequence, to a conductor, the company 
operating the road over the leased line are not liable, as they are 
not the owners of the bridge causing the accident, (3) the statute 
enacting that " such bridge shall be constructed, recon- 
structed or repaired at the cost of the company, or of the munici- 
pality or other owner of the bridge." (4) 

Trains must stop before passing a swing bridge. (5) And 
this section is amended by 55-56 Vic., c. 27, by making an excep- 
tion in the case of interlocking switches at such bridges. 

Fences and Catties Guards. 

The liability of a railway company to fence arises by statute 
only. There is no common law liability to fence, either as res- 
pects the highway or as respects adjoining proprietors. (6) 

The obligation to fence the railway under the present Act is 
confined to the cases where the railway runs through a town- 
ship, the municipal corporation for which has been duly organ- 
ized, and which has been surveyed and subdivided into lots for 
settlement in whole or in part, with a proviso as to New Bruns- 
wick, Nova Scotia, and Prince Edward Island, for the protection 
of improved or occupied lots of land, wherever a county muni- 
cipality has not been subdivided into local municipalities. (7) 

There is a curious omission here as to the Province of Quebec, 
where there are many counties completely settled and organized 
which are not divided into townships, and where the municipal 



(1) Sec. 193. 

(2) Ibid. 

(3) McLauchlin v. Gran 1 Trunk Ry. Co., 12 O. R. 418. 

(4) Ry. Act, sec. 192, sub-sec. 3. 

(5) Sec. 255. 

(6) I Redfield, p. 491 ; Pierce,4Oi; Wood, p. 1543; McMillan v. Man. 
& N. W. Ry. Co., 4 Man. 220; \Yestbourne Cattle Company v. The 
Manitoba & N. W. Ry. Co., 6 Man. 553. 

(7) Sec. 194. 



CONSTRUCTION OK THE RAILWAY. 261 

laws clearly distinguish between a township and a parish muni- 
cipality. The point was taken in a Quebec case, where the rail- 
way ran through a parish municipality in a county where there 
were no townships, that this section could not apply, and that 
the liability of the railway company for failure to fence must be 
governed by the provincial and municipal laws. But the courts 
refused to entertain the distinction sought to be made, and de- 
termined the company's liability under the section of the Dom- 
inion Act. (i) The whole section is loosely drawn, and unsatis- 
factory. Why the provision in favor of occupied or improved 
lands in counties where there are no local municipalities should 
be applicable to the Lower Provinces, and not to the other Pro- 
vinces, is difficult to understand. Under the former Railway Acts 
the obligation to fence was dependent upon the company being 
required so to do by the proprietors of the adjoining lands, (2) 
but was not confined to lands in organized townships. And 
though the obligation may be considered broader in a way 
under the present Act, as being an obligation to fence off the 
railway, generally, as to the whole public, and not merely as 
to any adjoining proprietor who may demand the fence; yet it 
is not really so, as an adjoining proprietor, even of an improved 
and cultivated piece of land, is deprived of the right to have his 
property fenced from the railway, unless he resides in an organ- 
ized township, or in the Lower Provinces. 

The intention of the amendment to the Act was doubtless to 
widen the responsibility of railway companies in cases of cattle 
getting upon the track from adjoining lands, and being killed or 
injured by passing trains. But notwithstanding this amendment, 
and the amendments to the sub-sections governing the com- 
pany's liability in such cases, the current of jurisprudence has 
been almost unchanged on this question, as will be seen on 
reference to the chapter on this question. (3) 

The fences to be constructed must be of the height and 
strength of an ordinary division fence, (4) with gates, or bars, or 

(1) Campbell v. G. T. R. Co., Q.R. 3, Q.B. 570. 

(2) R. S.C., cap. 109, sec. . 

(3) ln f ra P- I 3- 

(4) A fence jijppnposed of 4 strands of barbed wire only 3^ feet high, 
with posts 12 to 14 feet apart, is insufficient. Landry v. North Shore Ry. 
Co., 9 L. N. 5. 



262 THE RAILWAY LAW OF CANADA. 

sliding or hurdle gates of sufficient width, with proper fastenings, 
at farm crossings, (i) and cattle guards at highway crossings, 
suitable and sufficient to prevent cattle and other animals from 
getting on the railway. (2) 

Under section 197, as amended by 55-56 Vic., cap. 27, at 
every level crossing the fences on both sides of the crossing and 
of the track must be turned in to the cattle guards, so as to 
allow the safe passage of trains. 

It has been held, under the Ontario statute, 46 Vic. , c. 1 8, s. 490, 
sub-sections 15-16, which seemed to sanction barbed wire fences, 
and empowered municipalities to provide against injury result" 
ing from them, that when constructed by a railway company 
upon an ordinary country road along the line of their railway, 
they could not be treated as a nuisance, no by-law of the locality 
in which the accident complained of in this case having been 
passed respecting fences of the kind. (3) 

The obligation to maintain fences on each side of the track 
involves the duty of a continuous watchful inspection, and the 
company must take notice of their state at all times. (4) They 
are not entitled to notice of their being out of repair. (5) 

By section 198, gates at farm crossings are to be kept closed 
by the persons for whose use they are furnished. And section 
199 provides penalties for wilfully leaving them open, or taking 
down any part of the fence ; besides imposing liability for 
damages thereby caused. (6) But where the fastenings of such 
gates are deficient, and in consequence cattle stray on to the 
track and are killed, the plaint iff cannot be deemed to have adopt- 
ed them as sufficient, by reason of his frequent use of them, (7) 
and section 198 does not render it any less the duty of the com- 
pany to provide and maintain proper fastenings for gates, as 



(1) Hurdle gates merely held in position by their own weight, without 
pins or other fastenings, are not in compliance with the statute. Vernon v. 
G. T. R. Co., 9 L. i\. 203 ; M. L. K., 2 S. C. 181. 

(2) Sec. 194. 

(3) Hillyard v. Grand Trunk Ry. Co , 8 O. R. 583. 

(4) Studer v. Buffalo & Lake Huron Ry. Co., 25 U. C. Q. B. 160. 

(5) Ibld - 

(6) Apart from this provision of the statute, see Wood, p. 1544 ; Pierce, 
402 ; i Redfield, 128; and Rocheleau v. St. Lawrence & Atlantic Ry. Co , 
2 L. C. R. 337. 

(7) McMichael v. Grand Trunk Ry. Co., 12 O. R. 547. 



CONSTRUCTION OF THE RAILWAY. 263 

they are bound to do by section 194. (i) The company are 
only excepted from liability for accidents so long as the gates, 
having been properly constructed in the first place, are properly 
maintained. (2) 

It would appear that section 198, when it applies, imposes no 
greater responsibility upon the land owners to keep the gates 
closed than in respect of their own use of them. (3) But where 
a proprietor allows a private road across his land, and the gate 
opening from it to the railway to be used by the public, he is 
responsible for the acts of persons using the road, and the rail- 
way company is not responsible for the killing of animals getting 
on to the railway through the gate being in bad condition owing 
to such bad use. (4) 

Intersection of Railways. 

By section 173 of the Act of 1888, the crossing of one railway 
by another can only be made with the approval of the Railway 
Committee, and this section has been amended by c. 27 of 
56 Vic. to include street railways of all kinds. In oiher respects, 
such as ordering necessary apparatus to be adopted, (5 ) appor- 
tioning expenses of carrying out such orders, when the com- 
panies interested fail to agree (6) the Railway Committee have 
jurisdiction. 

Section 257, requiring that an officer shall be stationed at every 
point where t\vo railroads cross each other at rail line, has been 
amended by 56 Vic., c. 27, to provide for the case of street rail- 
ways crossing the railway track, and in such case the conductor, 
before crossing, must go forward and ascertain whether the track 
to be crossed is clear. 

All trains are to stop one minute before crossing the track of 
another railway, unless when at the crossing an interlocking 
switch and signal system or other device, which has the approval 
of the Railway Committee, is in use. (7) 



(1) McMichael v. Grand Trunk Ry. Co., 12 O. R. 547. 

(2) Sec. 196. 

(3) McMichael v. G. T. R., 12 O. R., p. 556, opinion of Armour, J. 

(4) Jasmin v. C.P.Ry. Co., 6 L. N. 163. 

(5) Sec. 175. (6) Sec. 176. 

(7) Sec. 258, amended by 56 Vic., cap. 27. 



264 THE RAILWAY LAW OK CANADA. 

Where railways under provincial charters intersect with Domi- 
nion railways, such provincial railways are under Dominion 
jurisdiction in respect of all matters affecting such crossing or 
junction, (i) And by sec. 4 of The Railway Act, it is provided 
that all the provisions of the Act relating to railway crossings 

and junctions. apply to all persons, companies and railways, 

whether otherwise within the legislative authority of Parliament 
or not. 

Now, it will be noticed that section 3 of The Railway Act ex- 
cepts government railways from its operation, but section 4 
makes no such exception in regard to or mention of government, 
railways ; and it has been held in Canadian P acific Railway Com- 
pany v. Northern Pacific & Manitoba Railway Company, (2) 
that whether a provincial railway is constructed as a public pro- 
vincial work, or as the work of an incorporated company, the 
Dominion Parliament has power to provide that such railway 
shall not cross or make a junction with a Dominion railway with- 
out first making application to the Railway Committee of the 
Privy Council of Canada. It is not sufficient merely to make 
the application, but the consent of the Railway Committee must 
also be obtained. (3) 

It would appear that application must also be made to the 
Provincial Commissioner of Public Works as well as the Domi- 
nion Railway Committee. (4) 

The decision of the Railway Committee upon all questions sub- 
mitted to them under the Act is final (5), but they may review, 
or rescind, or vary any decision or order previously made. (6) 
Besides the means provided by way of penalty of enforcing their 
decisions or orders, it is provided by section 17 of the Act that 
any of their decisions or orders may be made an order of the 
Exchequer Court or of any Superior Court of the Provinces, and 
can be enforced as any rule or order of the Court could ordinarily 
be. In order to come to their decision, the Committee have 
power to make an inquiry and to enforce the attendance of wit- 

(i) Sec. 177. (2) 5 Man. 301. (3) 5 Man. 301. 

(4) Credit Valley Ry. Co. v. Great Western Ry. Co., 25 Grant's Chy. 507 ; 
and see Can. Pac. Ry. v. North. Pac. & Man. Ry. Co., 5 Man. at page 313- 
314. 

(5) Sec. 21. (6) Sec. 18. 



CONSTRUCTION OF THE RAILWAY. 265 

nesses before them, and to compel them to give evidence and 
produce books, papers, etc.; (i) and the Committee or the 
Minister of Railways may appoint any person to make an inquiry 
and report upon any questions submitted to them, and the person 
so appointed, whether an engineer, commissioner or otherwise, 
has also the same power to compel the attendance of witnesses, 
and the giving of evidence, etc. (2) If the Committee think 
fit, they may, upon the request of any party upon security being 
given for costs, etc., state a case for the opinion of the Supreme 
Court, upon any question which the Committee may think in- 
volves a point of law. (3) And the Supreme Court is bound to 
determine any question of law so submitted, and give their 
opinion to the Committee. (4) While the decision of the Rail- 
way Committee is declared final, it is also provided by section 
2i, that any party aggrieved by any decision or order of the Com- 
mittee may petition the Governor-in-Council, who may in his 
discretion rescind, change or vary such order as he deems just 
and proper. Although it is not likely that the whole council 
would, without grave cause being shown, advise the Governor to 
rescind an order of a Committee composed of certain of its mem- 
bers, still, no doubt the object of this provision of the Act is to 
give either party an opportunity of having the opinion of the 
whole of the Privy Council upon the questions submitted. 

The right of reference to the Supreme Court on a question of 
law has very seldom been exercised ; but one striking instance 
of it may be mentioned of the celebrated Manitoba Railway 
Crossings case. (5) There the Railway Commissioner of Man- 
itoba was authorized by a local statute to construct a railway 
from Winnipeg northwards, crossing the main line of the C. P. Ry. 
The latter company contested the right to cross its railway, and 
on an application being made to the Railway Committee, the 
point was raised that such a line connecting with or crossing 
its main line could not be constructed under the Provincial Act, 
as it was a work under the exclusive jurisdiction of the Parlia- 



(I) Sec. 13. (2) Sees. 12 and 13. 

(3) Sec. 19. (4) Sec. 20. 

(5) On an application by the Railway Commissioner of Manitoba, with 
reference to the Red River Valley Ry. Co., dated loth Sept., 1888, Cassel's 
Dig. 487. 



266 THE RAILWAY LAW OF CANADA. 

ment of Canada, and that the Act of the Legislature of Manitoba 
authorizing the construction of the local railway was unconstitu- 
tional. The Railway Committee granted a icference to the 
Supreme Court upon this question of law, and the Court gave 
the opinion that the Act of the local Legislature was constitu- 
tional, and within the powers of that body, and that the crossing 
could be legally made. As is usual on such reference, the 
Supreme Court gave no reasons for their opinion, and it is 
therefore impossible to say upon what grounds it was based ; but 
the question at issue was partly a constitutional one, and partly 
one depending upon the construction of the special Act incor- 
porating the C. P. R. Co. 

Prescription or Limitation of Actions. 

There has been much controversy and divergence of opinion 
relative to sec. 287 of the Railway Act and corresponding sections 
of Provincial Acts. Under this section all actions or suits for 
indemnity for any damages or injury, sustained "by reason of 
the railway," must be commenced within on; year next after the 
time when such supposed damage is sustained, or if there is con- 
tinuation of damage, within one year next after the doing or 
committing of such damage ceases, and not afterwards. It also 
provides that the Company may plead the general issue, and give 
this Act, and the special Act, and the special matter in evidence 
at any trial to be had thereon, and may prove that the same was 
done in pursuance of and by the authority of the Act or of the 
special Act. 

It has been urged on the one hand that the words of this sec- 
tion are so general in their terms as to include every species of 
damage or injury which might be caused either by the construc- 
tion or the operation of the railway, and equally strenuously 
urged on the other hand, that the intention of the legislature was 
to confine the limitation to cases of damages or injury resulting 
from the construction of the railway itself, limiting the meaning 
of the words " by reason of the railway " to their narrowest 
sense, that is to say, damages caused by reason of the railway 
and not by the running of the trains upon it. In Ontario, the 
wider interpretation has been adopted by the highest courts in 



CONS7 RUCTION OF THE RAILWAY. 267 

that province, and actions for injuries to person and property sus- 
tained as a result of the working of the railway have been held 
to be subject to the limitation imposed by this section ; while in 
the Province of Quebec the jurisprudence seems to be inclined 
in the opposite direction, namely, to confine the meaning of the 
section, and similar section?, to cases of damage caused by the 
railway itself, that is, by the construction of the railway and 
works in connection therewith, (i) The latter view has been 
sustained in the Supreme Court, in the case of McWillie v. 
The Grand Trunk Railwiy Co., (2) where, in an action taken 
against the company for damages caused to buildings by fire 
communicated by sparks from the locomotive, the company 
pleaded the statutory limitation, and it was held by the Quebec 
Court of Appeals, and maintained by the Supreme Court, that the 
limitation did not apply in such a case, the loss being caused by 
negligence in the operating and running of the trains, and the 
intention of the statute being to fix a limitation upon the com- 
pany's liability only in case where the loss occurred by reason of 
the railway without negligence. 

It was stated by Gwynne, J., in the last mentioned case, (3) 
that the language of the last part of the section shows thit what 
is meant is damage done by the railway itself, and not by reason 
of the default or neglect of the company owning the railway, or 
of a company having running powers over it, by reason of in- 
sufficiency in the construction of the engines used, or of negli- 
gence in the manner of running them upon the railway. 

The vaiious holdings of the Ontario courts as well as some of 
the other provinces may be illustrated by the following cases : 

'1 he careless handling of machinery by railway servants, result- 
ing in damage thereto, is not " damage or injury sustained by 
reason of the railway ;" (4) but injuries .received through a 
collision are. (5) Any damage done through negligence upon 

(1) Marshall v. G. T. R. Co., i L. C.J. 6; Boucherville v. G. T. U. Co., 
I L. C.J. 179 ; Germain v. Montreal & New York Ry. Co., 6 L. C. R. 
172 ; Pigeon v. City of Montreal, 9 L. C. R. 334, 3 L. C. J. 294 ; Marche- 
terre v. O. & Q. Ry. Co., M. L. R., 4 S. C. 397. 

(2) M. L. R., 5 Q. B. 122, 13 L. N. 217, 17 S. C. R. 511. 

(3) 17 S. C. R.,at p. 514. 

(4) Whitman v. Western Counties Ry. Co., 5 Russ. & Geld. 405, Nova 
Scotia, 1884. 

(5) Conger v. G. T. R , Com. Pleas. Div., 13 O. R. 160, 1887. 



268 THE RAILWAY LAW OF CANADA. 

a railway in the carriage of passengers and the like is damage 
done "by reason of the railway." (i) Where defendants had 
negligently allowed dry wood to accumulate on the railway, which 
took fire from sparks dropped from defendants' locomotives, such 
was held to be damage sustained by reason of the railway. (2) 
Where the defendants neglected their statutory duty to construct 
fences, whereby cattle got on the line of their railway, and from 
thence on to the plaintiff's land, doing damage there, such damage 
was held to be damage by reason of the railway. (3) The railway 
limitation clauses do not apply to damages arising from the loss 
of baggage ; they apply only to actions for damages occasioned 
by the company in the execution of the powers given, or 
assumed by them to be given, for enabling them to maintain 
their railway. (4) Where the plaintiff, who was lawfully on the 
street, was obliged, through the careless driving of a street car, 
to save himself by jumping into a drain, and was hurt ; it was held, 
that the injury was sustained by " reason of the railway." (5) 
Such limitation clauses protect the railway company in an action 
for a collision at a railway crossing by which the plaintiff was in- 
jured, and which was caused by the neglect to ring the bell or 
sound the whistle on the locomotive. (6) Where a railroad 
company enter lands and cut down trees for the purpose of 
making their roadway, without previously assessing and paying 
compensation, they are not thereby barred from the protection 
of the limitation clause in the Railway Act. (7) 

Since the decision of the McWillie case, however, it has been 
recently held by the Ontario Court of Appeal, (8) that where a 
person was killed by a fall from a bridge, part of a highway, 
which crossed the defendant's line, and had been negligently 
allowed by them to be out of repair, this was not " damage sus- 



(1) May v.O. & Q. Ry. Co., Q. B. D. 1885, 10 O. R. 70. 

(2) McCallumw. G.T.K., 31 U. C. Q.B. 527. 

(3) Brown v. G. T. R., 24 U.C.Q.B. 350. 

(4) Anderson v. C. P. R., 17 O. R. 747, confirmed in Appeal, 17 O. A. 
R. 480 ; Roberts v. Great Western Ry. Co., 13 U. C. Q. B. 615, followed. 

(5) Kelly v. Ottawa Street Ry. Co., 3 O. A. R. 616 (1879). Following 
Auger v. Ontario, etc., Ry. Co., 9 U. C. C. P. 164 ; Brown v. Brockville 
& Ottawa Ry. Co., 20 U. C. Q. B. 202. 

(6) Il>. and see May v. Ont. & Que. Ry. Co., 10 O. R. 70, 

(7) McArthur v. Northern Pacific Junctio i Ry. Co., 17 Ont. App.86. 

(8) Zimmer v. Grand Trunk Ry. Co., 1892, 19 O. A. R. 693. 



CONSTRUCTION OF THE RAILWAY. 269 

tained by reason of the railway," and that the limitation clauses 
of the Railway Act, sec. 287, did not apply. 

The true view would seem to be that the limitation should 
only apply in cases where the damage is strictly by reason of 
the railway, within the literal meaning of those words ; on the 
principle that all short limitations, being exceptions to the general 
or common law, should be interpreted strictly against those in 
whose favor they are made, and that in all cases of injury caused 
by negligence in the working or operation of the railway, the 
right to recover damages should be governed by the limitations 
or prescriptions established in ordinary cases of negligence. 

As to continuation of damages, the Supreme Court has recent- 
ly held, that where a railway company entered upon the land of 
an adjoining proprietor, and, by the making of excavations there- 
on, destroyed a right of way over the land in favor of a third 
party, the latter' s right of action was extinguished by the lapse 
of one year from the date when the work of excavation ceased, 
(i) This decision would seem to conflict with previous holdings 
of the Ontario Courts in the cases of The Township of Brock v. 
Toronto & Nipissing Railway Company ; (2) and Beard v. 
Credit Valley Railway Company ; (3) where it was held, that 
a similar section of the Ontario Act did not apply to the case of a 
railway company wrongfully taking earth from the plaintiff's land. 

Where there is a continuance of the act causing the damage, 
the courts in Ontario have held that the action can only be 
maintained for the damage accruing during the limited period 
previous to the institution of the action. (4) 



(1) Kerrz/. A. & N. W. Ry. Co., Sup. Ct. 1895 ; and see Barley Main 
Colliery Co. v. Mitchell, 1 1 App. Cas. 127 ; Knappz/. G. W. R. Co., 6 U. C. 
C. P. 187 ; and Grenier v. City of Montreal, 25 L. C. J. 138 (contra} ; 
Renaudz'. City of Quebec, 8 Q.L.R. 102 {contra). 

(2) 37 U. C. Q. B. 372. 

(3) 9 O. R. 616. 

(4) Cameron v. Ont., Simcoe 6 Huron Ry. Co., I4U.C.Q.B. 6l2; 
Patterson v. G. W. R.Co.,8 U. C. C. P. 89 ; Van Home v. G. T. R. Co., 
18 U. C.Q.B. 356 ; McGillivray v. G. W. R. Co., 25 U. C. Q. B. 69 ; and 
in Quebec, see Corp. of Tingwick v. G. T. R. Co., 3 Q. L. R. 1 1 1. 



Opening of 
the railway 
for traffic. 



CHAPTER IX. 

OPERATION OF THE RAILWAY. 

10. Collection of tolls. 

ir. Passengers Payment of fare. 

12. Ejectment for non-payment. 

13. Tickets issued on conditions. 

14. Coupon tickets. 

15. Jurisdiction and cause of action. 

16. Measure of damages for eject- 

ment. 

17. Enforcing payment of tolls for 

carriage of goods. 

1 8. Obligation to carry. 



I. Opening of the railway fir 

traffic. 
z. Railway out of repair. 

3. Liability as carriers before 

opening. 

4. Tolls. 

5. Undue discrimination. 

6. Traffic arrangements. 

7. Facilities to Express Companies. 

8. 1 oils Approval by Governor in 

Council. 

9. Fractions of distance and weight. 



1. Before the railway can be opened for traffic, or for the 
public conveyance of passengers and goods, certain formalities 
are required to be observed under the Act. One month's notice 
in writing of the intention to open the railway for public traffic 
must be given to the Minister, and not until ten days after 
notice in writing is given of the time when the railway, or a 
portion of the railway, will be, in the opinion of the company, 
sufficiently completed for the safe conveyance of passengers 
and ready for inspection ; (i) and the company is liable to a 
penalty of $200 for every day within which the railway or any 
part of it remains open without such notice, and until the notices 
have been given and the time expired. (2) 

On the receipt of the notice, the Minister of Railways is 
bound to direct one or more engineers to examine the railway 
and all its branches, culverts, tunnels and road crossings and 
its works generally, and also all its rolling stock and engines, 
and the Minister has power to stop or postpone the opening of 
the railway, according to the report of the inspecting engineer; 



(i) Sec. 200. 



(2) Sec. 201. 



OPERATION OF THE RAILWAY. 271 

that is to say, if, in his opinion, the opening of the railway would 
be attended with danger to the public, either by reason of the 
works being incomplete or the rolling stock and other establish- 
ment of the railway being insufficient, this, however, only with 
the sanction of the Governor General in Council ; and the 
postponement can only be for one month at a time, but may be 
postponed from time to time, according to the report of the 
engineer after further inspection. It is only after it is shown to 
the Minister that the opening of the road can take place without 
danger to the public that the railway can be opened for public 
traffic, (i) There is also a penalty of $200 imposed on the 
railway company, in the case of their opening their railway for 
traffic contrary to the order of the Minister ; (2) but this order 
is not binding on the company, unless a copy of the report of 
the inspecting engineer is delivered to them with the order. (3) 

2. If any part of the railway is out of repair, such as any bridge Railway out 
embankment, culvert or tunnel, or if any of the rolling stock is 
in such state as to be dangerous to the public, the Minister, on 
receipt of information to that effect, may appoint one or more 
engineers to examine the railway, or the part out of repair, or 
any of the rolling stock, etc., and upon his report, may condemn 
the railway, or the part complained of, or any of the rolling stock, 
and, with the approval of the Governor in Council, may order 
any change or alteration in any part of the railway or the 
substitution of a bridge or viaduct or tunnel, as the case may be, 
or any material for the roadbed ; and the company must, afier 
notice to that effect, make good any defects in their roadbed or 
in their rolling stock which has been so condemned, as required 
by the minister, (4) and these provisions with regard to the road 
being out of repair apply also to the state of repair in which any 
level highway crossing may be. (5) The minister has also 
power, as has the inspecting engineer, to regulate the speed of 
the trains, and the number of trains run on the railway, or any 
part of the railway, until such repairs have been made as he 
thinks prudent ; and in default of complying with any order of 
the minister or inspecting engineer in that behalf, the company 

(i) Sec. 202. (2) Sec. 203. 

(3) Sec. 204. (4) Sec. 205. 

(5) Sees. 206, 207, 208. 



272 



THE RAILWAY LAW OF CANADA. 



Liability as 
carriers 
before 
opening. 



will incur for every act of non-compliance the penalty of $2000. 
(i) And, in fact, the running of trains may be entirely pro- 
hibited over either the whole railway or any part of it, if the 
inspecting engineer thinks it would be dangerous to continue 
the running of trains, until such alterations or repairs are made, 
either in the road bed or the rolling stock ; and he may compel 
compliance on the part of the company by serving them with a 
notice in writing ; and in case of the company disregarding 
such notice, they are liable to a similar penalty of $2000. (2) 
The Governor in Council, however, has always power to modify 
or disallow the order of the inspecting engineer. (3) These 
are the terms and conditions upon which a railway may be 
opened for traffic, and upon which its operation may be carried 
on, and the safety of the public in using the railway is protected 
by these provisions of the Act, so that no railway shall be open 
for traffic, nor, after being opened, shall be continued for traffic, 
without careful inspection by a Government engineer, and with- 
out the approval of the Governor in Council. 

3. And it may be well to point out here that until the railway 
is so open for public traffic, the company are not subject to the 
liabilities of common carriers, unless they have invited the public 
to travel on their road, or have held out their road as open for 
public traffic for the conveyance of either passengers or goods. 
It often happens that in the course of the construction of the 
railway, and before it is open for public traffic, certain persons 
are conveyed over the railway by the company on special terms. 
Such persons, however, cannot hold the railway company liable 
as common carriers, unless it is shown that the railway company 
have undertaken to carry the public generally or their goods. It 
was so held by Mr. Justice Davidson in charging the jury in the 
case of Macrae v. The C. P. Ry. Co., (4) where the railway 
was not yet open for public traffic, but the company was in the 
habit of carrying certain classes of persons on certain special 
terms. The railway there was under construction, and trains 
were run not on any scheduled time, but for the convenience of 
the contractors and of the company itself; and by special per 



( i) Sec. 209. 
(3) Sec. 211. 



(2) Sec. 210. 

(4) M. L. R.,4Q. B. 191. 



OPERATION OF THE RAILWAY. 273 

mission of the superintendent of construction individuals were 
allowed to pass up and down the railway, and even to have their 
goods carried on its trains. The plaintiff there had no such 
special permission to travel on the railway, and having been 
allowed by the conductor of a construction train to travel a cer- 
tain distance, ard being discovered on the train by the superin- 
tendent, was put off with his baggage upon the order of the 
superintendent, and the learned Judge charged the jury that in 
that case the railway company could not be looked upon as com- 
mon carriers, and had the right to make such regulations as they 
chose with regard to the persons and goods that they would 
carry, and if they found that the railway was not open for public 
traffic, the plaintiff had no right as one of the public to travel 
upon the company's trains. 

4. Supposing the railway to be open for public traffic, the com- Tolls, 
pany carry passengers and goods for a certain remuneration, 
which is called by the Act a toll. These tolls, in the absence of 
any special provision in the charter of the company, are fixed 
either by the by-laws of the company or by the directors, if au- 
thorized by the by-laws to do so. (i) 

5. These tolls may be either for the whole extent of the rail- Undue discri- 
way, or for any part of it; but it is provided by the Act that ruination, 
they shall always under the same circumstances be charged equal- 
ly to all persons, and at the same rate, whether per ton, per mile 

or otherwise, in respect of all passengers and goods and railway 
carriages of the same description, and conveyed or propelled by 
a like railway carriage or engine pass-ing over the same portion 
of the line of railway ; and also that no reduction or advance in 
the tolls shall be made, either directly or indirectly, in favor of 
or against any particular company or person travelling upon or 
using the railway. (2) The exact language of the Act is here 



(1) Sec. 223. 

At common law, a earlier was only bound to carry in accordance with his 
profession, and at reasonable rates. He was not bound to charge all his 
customers the same rate, as long as the late charged was reasonable The 
fact that in some cases a lower rate was charged was evidence that the higher 
rate was umeasonable, but it was not more than evidence. Gt. West. Ry. 
Co. v. Sutton, L. R., 4 H. L. 226, 237 ; Scott v. Midland Ry. Co. of Canada, 
33 U. C. Q. B. 580, 595. 

(2) Sec. 224. 

1 8 



274 THE RAILWAY LAW OF CANADA. 

given, for this question of discrimination in tolls is a very difficult 
one. 'I he evident object of the Act is to prevent the railway 
company from favoring any particular person or company in the 
rate of freight that may be charged for the carriage of their 
goods. It must be observed that to constitute a case ot undue 
discrimination, the rate charged must be always under the same 
circumstances; and where the circumstances differ, there is no 
doubt that the railway company would have the right to charge 
a different rate, either for the carriage of goods or of persons. 
For instance, it is well known that railway companies have the 
right to charge different rates of fare in the case of an ordinary 
traveller making a single trip to one point, and in the case of a 
traveller making a return journey to the same point, and back 
again ; and carrying the principle further, it is the invariable prac- 
tice to allow a reduction in rate, or commutation, as it is called, 
in the case of travellers continuously using the same portion of 
the railway during certain seasons or throughout the whole year. 
The circumstances there differing, the company have the right to 
make a reduction in favor of persons who use that portion of the 
railway more frequently than others, in consideration of their 
paying in advance for a number of trips. Again, in the case of 
certain classes of travellers using the railway for the purpose? of 
their trade or business, special rates are allowed them, 
under special conditions, limiting the liability of the railway 
company. These principles are recognized to some extent by 
sec. 225 of the Act, which says that the tolls fixed for large 
quantities or long distances may be proportionately less than the 
tolls fixed for small quantities and for short distances, if such 
tolls are under the same circumstances charged equally to all 
persons, that is to say, that the circumstances always being equal, 
no discrimination shall be made between the persons using the 
railway. There is a special provision of the same section, how- 
ever, governing the quantity, namely, that in respect of quantity, 
no special toll or rate shall be fixed for any quantity less than 
one carload, or at least ten tons. 

It is provided by sec. 232 that no discrimination between 
localities, which it is necessary to make in order to secure traffic 
on account of competition by rail or water, shall be deemed to 
be unjust or partial. It would appear, therefore, that the Act 



OPERATION OF THE RAILWAY. 275 

provides that if there is a competition, either by rail or by water 
between two or more points on the railway, which does not exist 
with regard to other points, discrimination in tolls will be al- 
lowed, on the ground that the circumstances and conditions were 
not alike, with regard to other localities in which such compe- 
tition did not exist. The company is specially prohibited from 
giving any secret special rate to any person, and in order to pro- 
vide against this mode of discrimination, they are prohibited 
from giving any rebate, drawback or concession, and the com- 
panies are bound, on the demand of any other party, to make 
.known any such special rate, rebate or concession given to 
anyone, (i) 

As an illustration as to what would or would not constitute an 
undue discrimination by a railway company in favor of one in- 
dividual as against another, the case of the Denaby Colliery Co. 
v. The Manchester) etc., Ry Co. (2) should be carefully ex- 
amined. This is a most instructive case, and deals with the 
whole question of the interpretation to be placed upon the 
clauses of the English acts which are analogous to our own. The 
decision of the House of Lords in this case would be binding 
upon the Courts in this country, in interpreting the similar clauses 
of our own act, (3) and it is therefore essential, in order to have a 
clear comprehension of the meaning and effect of these clauses, to 
carefully study this case. The points involved are too lengthy to 
be dealt with here in detail, but a short summary of the holding 
of the Court may be given. It was held in the first place that 
the fact that the railway company charged a less proportionate 
rate for coal carried for one colliery over a part of its line than that 
which it charged to another colliery for the carriage of coal over 
a shorter part of its line, did not constitute an undue advantage 
or preference to the first colliery company within the meaning of 
the Act, inasmuch as the goods did not pass " only over the 
same portion of the line of the railway." The language of the 
Act is that tolls shall always, under the same circumstances, be 
charged equally to all persons and at the same rate in respect of 
goods of the same description passing only over the same portion 



(i) Sec. 233. (2) ii App. Cas. 97. 

(3) City Bank v. Barrow, 5 App. Cas. 664 ; Trimble v. Hill, 5 App. Cas. 
342- 



276 THE RAILWAY LAW ov CANADA. 

of the line of railway. The House of Lords has authoritatively 
and finally decided in this case, that the conditions to constitute 
an undue advantage or discrimination must be strictly within the 
language of the Act ; and that though for the same class of goods 
passing over the same portion of the railway, a higher rate of 
freight was charged in the case of goods carried only over that 
portion of the road than in the case of goods carried over a longer 
stretch of the road including that portion, this would not constitute 
a case of undue discrimination, inasmuch as the goods did not pass 
"only over the same portion of the railway." In the same case, 
however, their Lordships pointed out what would constitute an 
undue advantage of discrimination, and incidentally explained the 
meaning to be attached to the words " under the same circum- 
stances." They held that where the railway company charged a 
less rate for coal carried only over the same portion of the railway, 
from the same point of departure to the same place of destination, 
in a case where it was to be shipped by sea to certain ports, than 
it charged in a case where it was not to be shipped to these ports, 
this was an undue discrimination ; and they laid down the prin- 
ciple that wheie the same goods are carried only over the same 
portion of the line of the railway, the railway company are 
bound to charge the same rate of freight to all persons, without 
regard to the ultimate destination of the goods. In other words, 
in order to bring the Company within the meaning of the Act, the 
goods must be the same, and the portion of railway between the 
points of departure and destination must be the same; and the 
circumstance that certain of the goods are to be transhipped 
thence to other ports would not constitute an exception within 
the meaning of the Act. 

Another important case, decided in England by the House 
of Lords, was that of Evershed v. The North Western fiy. 
Co. (i) This case arose under the English Act, 17-18 Vic., which 
contained provisions similar to our Railway Act, by which 
railway companies were forbidden to give any undue preference or 
advantage to any particular person or company in the matter of 
carrying or forwarding freight. The plaintiff had a brewery at a 
place where there were three other breweries. These latter were 



(i) I.. R., 2 Q. 13. D. 254, 3 Q. B. D. 135, 3 App. Cas. 1059. 



OPERATION OF THE RAILWAY. 277 

connected with the railway, whereas plaintiffs brewery was not. 
In order to get away some of the business of the three breweries 
from the Midland Railway, the North Western carried the goods 
of these three breweries to the freight depot, free of charge, and 
still made a profit on the whole transaction ; but they charged the 
plaintiff a rate of freight for the same service, that is to say, taking 
his goods from the brewery to the depot. It was held that this 
was an undue preference within the meaning of the Act, and that 
plaintiff was entitled to recover an amount equal to the cost of 
carting his goods to the depot. 

In determining whether mileage rates charged to one trader on 
a lower scale than another do or do not amount to an undue 
preference, it has been held in England that the Court may take 
into consideration the fact that one of the traders has access to 
a competing line of railway, (i) 

An agreement under which a railway company undertook 
not to allow any coal or coke to be received or deposited at or 
sent from one of their stations, either by railway or otherwise, 
which had not been raised from or manufactured at the collieries 
or coke ovens of a certain estate, was held to amount to an 
undue preference. (2) 

It has been held by the Supreme Court of the United States, 
that it is no defence to a charge of discrimination that the dis- 
crimination was made in consideration of the person unduly 
favored releasing the company from claims for damages. (3) 

6. Railway companies are not only bound to carry goods for Traffic arran- 
the public generally, but they are also bound to give all reasonable g ements - 
facilities to any other railway company for the forwarding and 
delivery of traffic, and for the return of cars and trucks, etc. 
upon which goods or passengers may be carried, and are pro- 
hibited from giving any undue preference or advantage to any 
particular company or with regard to any particular description 
of traffic, and e contra from subjecting any particular company, 
or person or description of traffic to any undue disadvantage ; 

(1) Phipps v. Lon & N. W. Ky. Co. [1892], 2 Q. B. 229 ; 6l L. J. Q. B. 
379 ; 8 Ry. & Can. Traff. Cases 83. 

(2) Rishton Local Board v. Lan. & York Ry. Co., 8 Ry. & Can. Traff. 
Cases 74. 

(3) Union Pacific Ry. Co. v, Goodridge, 13 U. S. 970. 



278 THE RAILWAY LAW OF CANADA. 

and special provision is made in the case where a company is 
working a railway which forms part of a continuous line, or which 
intersects any other railway, or which has any terminus, station 
or wharf near to a like place of accommodation of another rail- 
way. In such case, the company is bound to afford all reason- 
able facilities for forwarding by its railway all traffic coming from 
the other railway without unreasonable delay, and without giving 
any preference or advantage to any particular person, com- 
pany or description of goods. And the company is bound 
in such case to offer no obstruction to the public desirous of 
using their railway as a continuous line of communication, so 
that all reasonable accommodation by means of the railways of 
the several companies may be afforded to the public, (i) Agree- 
ments may be made between railway companies, either in Canada 
or elsewhere, for the regulation and interchange of traffic between 
them, and even for a division or apportionment of tolls, com- 
monly called a pooling of receipts, and in fact generally with 
regard to the management and working of connecting railways 
or of any parts of them ; but this must not be for a term exceed- 
ing twenty-one years. Such agreements or arrangements, how- 
ever, are subject to the consent of two-thirds of the stockholders of 
the contracting companies, and to the approval of the Governor-in- 
Council, (2) which approval can only be granted after two months 
previous notice of the application therefor has been published in 
the Canada Gazette, stating the time and place of the applica- 
tion, so that all persons interested may be heard for or against 
the arrangements. (3) But no such agreement, under sec. 240, 
can be made which contains any condition contrary to the pro- 
visions of that section with regard to the facilities to be afforded 
by one railway to another and to the public generally, which 
would violate those provisions with regard to undue preferences, 
etc. 

It has been held that it was not sufficient that the directors of 
two railway companies communicated an agreement made between 
them as to traffic arrangements to their shareholders by writing, 
and announced it to them at a regular meeting of shareholders, 
who then had full notice thereof, and did not dissent therefrom, 

(i) Sec. 240. (2) Sec. 238. (3) Sec. 239. 



OPERATION OF THE RAILWAY. 279 

but ratified the same ; and though defendant's shareholders, at a 
regular meeting, approved of the sums found as balances struck 
in favor of the plaintiffs on the monthly settlements provided for 
in such agreement, (i) 

It appears that two companies having the same termini may, 
in order to avoid competition, come to an agreement with refer- 
ence to the traffic along existing routes on their lines, with a 
view to distribute such traffic and the revenue derived from it 
between the two companies. (2) 

A traffic agreement to the following effect has been maintained 
and held valid and intra vires of a railway company ; viz. an 
agreement that there should be certain joint rates chargeable to 
passengers and freight by a steamship company and a railway 
company, to be divided in certain proportions, and if it should be 
found that the proportion payable to the steamship company 
did not at the end of the season amount to the sum therein stip- 
ulated, then that the deficiency should be made good by a rebate 
from the share of the railway company ; and, on the other hand, 
if the steamship company received more than the sums men- 
tioned in the agreement, the railway company were entitled to 
a share of the surplus. (3) 

It was also held that sec. 240 does not prevent a railway 
company from guaranteeing all its traffic to a certain steamboat 
company, but that it only applies to railway companies. (4) 

7. In addition to the provisions of the Act prohibiting undue Facilities to 

preference being given to individual shippers or to other rail\va\ Express Com- 

. . . 1,1 ' panics, 

companies, it is provided by sec. 242 that where any company 

gives facilities to an express company, or to any persons carrying 
on that business, it is bound to grant equal facilities on the same 



(1) Great Western Ry. Co. v. G.T.R., 25 U. C. Q. B. 37 ; and see Lindley 
Comp. 181. 

(2) Hare v. L. & N. W. Ry. Co., 2 J. & II. So ; Great Western Ry. 
Co. v. G. T. R., 25 U. C. Q. B. 37. 

(3) Owen Sound R\. Co.v. C. 1'. R., 17 O. R. 691. 

(4) Owen Sound S. S. Co. 'v. C. P. R , 17 O. R. 697, Rose, J., Confirmed 
in Appeal, i7Ont. App. 482; and for recent English cases, see Darlaston 
Local Board v. Lon. & N. W. Ry. Co., q R. 712 ; [1894] 2 Q. B. 694, 8 
Ry. & Can. Traff. Cases 216 ; Solway Junction Ry. Co. v. Caledonian Ry. 
Co., 8 Ry. & Can. TrarT. Cases 177; Dublin, Wicklow, &c., Ry. Co. v. 
Midland G. W. Ry. Co., 8 Ry. & Can. Traff. Cases 39 ; City of Dublin Steam 
Packet Co. v. Midland G. W. Ry. Co , 8 Ry. & Can. Traff. Cases I. 



280 THE RAILWAY LAW OF CANADA. 

terms and conditions to any other express company which asks 
for them. It will be observed that this is only in the case wiiere 
the company has already granted facilities on its line to some 
company or person carrying on the express business, and there 
is nothing in thi Act which would prevent a railway compiny 
from carrying on the express business itself. In the United 
States, however, it has been held that a railway comp my cannot, 
either directly or indirectly, destroy or even tranvnel express 
enterprises, by either excluding express companies from its lines, 
or hindering them with unjust regulations or unfair discrimina- 
tions, nor can it assume to itself the exclusive right of carrv- 
ing on the express business over its o\v i lines, (r) 

In Canada, it would appear that railway companies may refuse 
to enter into any special agreement in the first instance with 
express companies, and if they thought proper could do the great 
bulk, if not all the express business themselves, so far as the 
receipt and delivery of goods and parcels, large or small, raiy be 
concerned. (2) 

In the absence of collusion, the Court will not inquire into the 
reasonableness of the rates charged by a railway company to an 
express company. (3) The nature of the express business is 
such that it requires special accommodation for goods not to be 
treated as ordinary freight, but to be forwarded on fast trains 
with car accommodation to a named extent, and the ordinary 
statutory provisions as to equality cannot be applied. (4) It is 
absolutely necessary that a special bargiin and contract has to 
be madej and no particular bargain can be force'l by law on a 
railway company. 

In the absence of legislation, it must be left to the company 
to decide whether they can provide any, and, if any, what accom- 
modation for express business as distinct from the ordinary 
transmission of freight or passengers. When the railway com- 
pany agree with the first comer, th>y are n>tb:>und to make 
their bargain in the anticipation that other companies will also 
apply. "It by no means follows," said Chief Justice Wait, of 



(i) Southern Express Co. v. Liuisville & Nashville Ry. Co., 4 L. N. 16. 
(l) Vickers v . C- P. R., 13 Ont. App. 210. Hagarty, C. ]. O. 

(3) Vickers v. C. P. R , 13 Oat. App. 210, Hagirty, C. ]. O. 

(4) Vickers v. C. P. R., 13 Ont. App. 219, Hagarty, C. j. O. 



OPERATION OF THE RAILWAY. 281 

the United States Supreme Courl, " that because a railway 
company can serve one express company in one way, it can as 
well serve another company in the same way and still peiform its 

obligations to the public in a satisfactory manner So long as 

the publfc are served to their reasonable satisfaction, it is a 
matter of no importance who serves them." (i) 

In this country, however, it has been held that a railway 
company having granted to one incorporated express company 
the privilege of employing their station agents to act as agents of 
that express company, such agents having, as employees of the 
railway company, the right to use the company's trucks and 
baggage room as places for storing goods, and refused the same 
privilege to another incorporated express company, brought 
themselves within the provisions of the Act. (2) 

All these questions are, however, within the jurisdiction of the 
Railway Committee; (3) and it has been held exclusively so. 
(4) 

8. By sec. 226, the Governor in Council is given power to Tolls Ap- 

make some uniform classification of freight on the report of the P roval ty.th 

Governor in 
Minister; and the company, m fixing or regulating its tolls, must Council. 

conform to .such classification, as he may from time to time pre- 
scribe, except in case of through traffic to or from the United 
States. All tolls are subject to the approval of the Governor in 
Council. The by-law fixing them must be approved by him, and 
they cannot be levied until after his approval, and two weeks 
publication in the Canada Gazette of the by-law and of the Order 
in Council approving of the tolls ; and no company can collect 
any money for services as common carriers except subject to the 
provisions of the Act. (5) Under this section it has been held 
that, where a company sought to escape liability for damage to 
goods through their negligence, on the ground that the shipper 
had agreed to relieve them of liability in consideration of his 
being charged the lower of two alternative freight rates, there was 



(1) St. Louis, etc., R. R. Co. r. Southern Express Co., 117 U. S. I. 

(2) Vickers Express Co. i\ C. P. R., 13 Ont. App. 2lo. 

(3) Sec. II Ry. Act. 

(4) Ontario Express and Transportation Co. v. G. T. R. Co. M. L. R. 7, 
S. C. 308 (S. C. 1891). 

(5) Sec. 227. 



282 THE RAILWAY LAW OF CANADA. 

no freight "lawfully payable" under sec. 246, inasmuch as 
no by-law fixing the rates had been approved by the Governor in 
Council, and, therefore, there was no valid alternative rate, and 
the release was inoperative, (i) 

The Governor in Council has power also to revise the by-laws 
of the company, fixing the tolls, and, in case of revision by Order 
in Council, the tolls substituted by such order are the only ones 
which can be collected, after two publications in the Canada 
Gazeite. (2) 

Fractions of 9. With regard to the charging for tolls, it is provided by sec. 
weight. 22 9 l ' ial anv f ract i n in a distance under a mile is considered as 

a whole mile, and, as to any fraction of a ton in the weight of 
goods, a proportion of the toll is chargeable according to the 
number of quarters of a ton contained in the fraction, and the 
fraction of a quarter of a ton is considered as a whole quarter. 
(3) 

Collection of j[Q 4 The company are bound to post up in their offices in 
every place where tolls are to be collected, a printed list of the 
rates chargeable, whether for passengers or goods. (4) 

These tolls are payable to such persons, and at such places near 
to the railway, and in such manner and under such regulations 
as the by-laws may direct. (5) As to passengers, the tolls are 
ordinarily collected by purchase of tickets at the station of the 
company from which the passenger takes his departure. It is 
frequently the practice that in the event of the passenger not 
buying a ticket before entering the train, he is liable to a further 
charge of ten cents. The right of the company to charge this 
may be doubted, and the practice in the United States is, per- 
haps, more legal and proper, namely, that a passenger buying 
his ticket on the train shall pay an extra ten cents, or some pro- 
portionate sum, which will be refunded to him on his producing 
the ticket or receipt of the conductor at his destination. 

Passengers 11, It is usual that the passenger should purchase his ticket at 
the station, and the only means which the conductor of a train has 

(0 Cobban v. C. P. Ry. Co., 26 O. R. 732. 

(2) Sec. 228. 

(3) See as to construction of similar clause of English Act, Pryce v, 
Monmouthshire Canal & Ry. Co., 4 App. Cas. 197. 

(4) Sec. 230. (5) Sec. 231. 



OPERATION OF THE RAILWAY. 283 

for ascertaining whether a passenger has paid his fare or not is 
by the inspection of his ticket ; but if a passenger has not 
purchased a ticket, he is bound to pay his fare to the conductor 
of the train, and if he refuses to pay his fare, he may be expelled 
from the train by the conductor and the train servants, with his 
baggage, either at any usual stopping place or station, or near 
any dwelling house, at the option of the conductor, who, however, 
must first stop the train, and who must not use any unnecessary 
force, (i) 

12. There has been much litigation in connection with Ejectment for 
this question of the right to eject a passenger for non-payment non ~ paym<:nt ' 
of fare, but it is unnecessary to refer here to more than some of 
the leading decisions of the courts on this point. Our Act has 
practically fixed the cases in which a passenger may be expelled. 
First, it is upon refusal to pay his fare. If the passenger has not 
bought a ticket, or has lost his ticket, it seems to be clear under 
the Act that he must pay his fare, or take the alternative of 
ejectment from the train, (2) though the right to eject has been 
denied in some cases where the passenger had bought a ticket 
and lost it. (3) If he states that he has purchased a ticket, and 
has mislaid it, he must be given a reasonable time within which 
to produce it ; (4) but in all such cases, in the author's opinion, 
so long as the conductor acts within reason, the company could 
not be held liable in damages if the passenger was ejected for 
non-payment of his fare. The only means a conductor has of 
knowing whether the passenger has paid his fare at the station is 
by the production of the ticket, and so long as a reasonable time 
is given to the passenger to produce it, the company should not 
be held liable for damages, if the passenger is ejected from the 
train, even though he had actually paid his fare in the first 
instance at the station and obtained a ticket, for his ejection 

(1) Sec. 248. 

(2) Duke v. G. W. Ry. Co., 14 U. C. Q. B. 377 ; Fulton v. G. T. Ry. 
Co., 17 Q. B. 428 ; Curtis v. G. T. R. Co., 12 C. L'. 89 ; Perrault v. C. P. 
R. Co., 20 R. L. 321. 

(3) Dancey v. G. T. Ry. Co., 19 Ont. A. R. 664 ; Beaver v. G. T. Ry. 
Co., 22 O. R. 667. 

(4) Curtis v. G. T. Ry. Co, 12 U. C. C. P. 89 ; Fulton . G. T. Ry. Co., 
17 Q. B. 428 ; Tnomas v. Geldert, 20 N. B. 95 ; Perraull p. C. P. Ry. Co., 
20 R. L. 321. 



284 THE RAILWAY LAW OF CANADA. 

would be simply the result of his own carelessness in having lost 
or mislaid his ticket. It is the duty of the conductor to see that 
no person travels upon the train without having paid his fare, 
and so long as he acts without harshness and with reasonable 
discretion, there is no reason why the company should be held 
liable for the ejection of a passenger who is unable to produce 
his ticket, and refuses to pay the fare ; for it must be remembered 
that very often dishonest persons endeavor to ride free from one 
station to another of the railway, on the pretence of having lost 
their tickets. 

But the conductor must always act without harshness and 
within reason. He must give the passenger ample time to find 
his ticket, if he claims that he has mislaid it; and he must not 
eject him with any unnecessary violence, and he must not 
put him off the train except at a station or stopping place, or 
near some dwelling house. These principles were recently 
enforced in a case where a passenger who had purchased his 
ticket, but was unable to find it, was ejected at a point distant 
from either a station or dwelling house, (i) In all cases of 
this kind, the courts have been very jealous of the rights of the 
public as against the railway company; but, at the same time, the 
passenger must always be in good faith and within his o\vn rights. 

The cases in which it has been held that a passenger could not 
be lawfully ejected from the train for non-payment of fare, where 
he had purchased a ticket but could not produce it, seem to have 
been decided upon the ground that there was no regulation or 
by-law of the company known to the passenger requiring him 
to produce his ticket on pain of expulsion, and that therefore it 
was no part of the contract of carriage that he should produce 
his ticket as a condition -of being carried to his destination. For 
instance, in a recent case in Ontario, where a passenger had lost 
his ticket and there was no condition 'in his contract with the 
company, and no by-law or regulation of the company under 
sec. 214 requiring its production, it was held that he could not 
be treated as a passenger who refuses to pay his fare, and could 



(i) PerraiiU v. C. P. R. Co., 20 R. L. 321. The Courtthere held that the 
conductor was bound to take into consideration the age and feebleness of the 
passenger, and give him a proportionately longer time to find his ticket. 



OPERATION OF THE RAILWAY. 285 

not lawfully be ejected from the train. (i~) This case was decided 
mainly upon the English case of Btttler v. Manchester, Sheffield 
& Lancash.re Ry. (2) There the ticket issued to the plaintiff 
incorporated by reference a condition published in the defendants' 
time-tables, to the effect that every passenger should show and 
deliver up his ticket when required, and that any passenger 
travelling without a ticket, or failing or refusing to show or deliver 
up his ticket, should be required to pay fare from the station 
from which the train otiginally started. The plaintiff had bought 
his ticket, but lost it, and was therefore unable to produce it 
when required to do so by the guard. On being required to pay 
fare from the station from which the train originally started, he 
refused, and he was thereupon forcibly ejected from the carriage. 
He sued the company for assault, and it was held that the contract 
between him and the company did not by implication authorize 
them to remove him from the carriage, on his failing to produce 
a ticket and refusing to pay fare. This decision, it will be observed, 
was based upon a special contract, which provided that the 
passenger failing to produce his ticket should pay fare from the 
station whence the train had started, but the passenger did not 
contract that in event of his failure to do so, the company would 
have the right to eject him. It is difficult to conceive how this 
decision can be considered as affecting the right of railway 
companies to eject passengers under the provisions of the Railway 
Act in the absence of contract. (3) 

The principle enunciated simply amounts to this, that a rail- 
way company has no right to eject a passenger for non-payment 
of an extra fare imposed by a by-law in default of the production 
of a ticket, unless the by-law, which constitutes the contract 
between the passenger and the company, provides for such 
ejection. The decision does not go so far as to say that the 
company must carry the passenger to his destination without 
payment of any fare. That would be contrary to the common 
law as to carriers, and in direct contravention of sec. 246 of our 
Railway Act, which makes the obligation to carry dependent 



(1) Beaver v. G. T. Ry. Co., 22 O. R. 667. 

(2) L. R, 21 Q. B. 0.207. 

(3) See McCarthy . Dublin, etc., Ry. Co., 18 W. R. 762. In Exch. Cham, 
where light to eject was maintained. 



a86 THE RAILWAY LAW OF CANADA. 

upon the " due payment of the fare lawfully payable therefor." 
If there is not a due payment of the fare, the company is not 
bound to carry the passenger ; and it must follow as a logical 
consequence, apart from the provisions of sec. 248, that the 
officers in charge of the train have a right to refuse to cat ry him, 
and if he insists upon remaining on the train, to eject him. The 
passenger must either pay his fare to the officer in charge of the 
train, or show that he has already paid it to some authorized 
person ; and the only recognized means of proving it is by the 
production of a ticket. If he cannot produce a ticket, the con- 
ductor has no possible means of knowing whether the fare has 
been paid or not ; therefore he would be justified in insisting upon 
payment of the fare, and, in default, of refusing to carry the passen- 
ger further, and of ejecting him. And if the servant of the company 
would be justified in so doing, it is difficult to understand how 
the company could be held liable for his acts, especially as the 
passenger would himself be negligent in losing his ticket, and 
would have his recourse against the company to recover the 
amount of the fare, if he had paid twice. The American author- 
ities all support the right to eject, (i) 

Tickets issued 13. Again, the passenger must have paid his fare within the 
on conditions, meaning of the Act. If a party purchases a ticket on certain condi- 
tions, he must comply with those conditions. For instance, if a 
ticket is declared to be good for a specified time only, the person 
buying such ticket enters into a special contract with the company, 
which is at an end as soon as the term has expired, and the 



(I) Chicago & Alton Ry. Co. v. Willard, 31 111. App. R. 435 ; Hibbard 
v. N. Y. ErieRy.Co., 15 N. Y. 455 ; Crawford v. Cincinnati, <fcc.,Ry. Co., 
26 Ohio 580 ; Shelton v. Lake Shore & Mich. Southern Ry. Co., 29 Ohio 
214; Louisville <fc Nashville Ry. Co. v. Fleming, 18 Am. & Eng. Ry. Cases 
347 ; Frederick v, Marquette, <fec., Ry. Co., 37 Mich. 342 ; Jerome v. Smith, 
48 Vt. 230; Haley v. Chicago & N. W. Ry. Co., 21 Iowa 15 ; Townsend 
e'. N. Y. Central Ky. Co., 56 N. Y. 295. 

The decision in the case of Beaver v. G. T. Ry. Co. has now been 
reversed by the Supreme Court (22 S. C. R. 498), where it was held (Four- 
nier J. dissenting) that the contract between the person buying a ticket and 
the company upon who.-e line it is intended to be used implies that such ticket 
shall be produced and delivered up to the conductor of the train on which 
such person travels, and if he is put off a train for refusing or being unable so 
to produce and deliver it up, the company is not liable to an action for such 
ejectment. The Manchester & Sheffield Railway case was referred to and 
clearly distinguished (per Gwynne, J., at pp. 501-2). 



OPERATION OF THE RAILWAY. 287 

holder of a return ticket attempting to return upon it after the 
expiration of the delay for which the contract was granted may 
be lawfully ejected from the train on lefusal to pay his fare, (i) 

Again, where the plaintiff had offered a return ticket, which, 
according to the terms printed upon it, had expired, and the 
jury had allowed him $100 damages in an action for wrongful 
ejectment, the Court of Appeals of Quebec set aside the verdict, 
on the ground that the railway company were justified in putting 
the plaintiff off the train. (2) 

Another case in which the same principle was maintained, 
that the passenger must conform himself to the conditions on 
which his ticket was sold to him, was that of Livingston v. The 
G. T. Ry. Co., (3) where the Court of Review of Quebec held, 
in 1876, that where a passenger bought a ticket from Montreal 
to Toronto, marked good only for a continuous trip within two 
days from date, and stopped off for some days at Kingston, and 
afterwards attempted to continue his journey on the same ticket, 
the company had a right to eject him from the train in default 
of further payment of fare. 

14. In the United States it has been held that where coupon Coupon 
tickets are issued by one company, giving right of passage over tickets, 
several distinct lines of railway, each coupon is a distinct ticket 
for each road ; and a passenger holding such a ticket has the 
same rights against each company as if ho had purchased a 
separate- ticket for the portion of each roadway traversed ; and 
that where the conductor on any one of the roads covered by 
the coupon tickets refuses to accept a ticket issued by the other 
company as agent for his line, and demands full fare, the pas- 
senger may, if his ticket was issued with authority, pay the fare 
over again, and recover from the company requiring payment as 
for breach of contract ; or he may refuse to pay, and leave the 
train, and sue and recover all resulting damages ; but if he refuses 
to leave the train, he cannot recover damages for being forcibly 
ejected by the conductor, where no more force is used than is 

(1) Reg. v. Phaneuf, 5 L. C. J. 167 ; and see Davis v. G. W. Ry. Co., 20 
U.C. Q. B. 27. 

(2) Cunninghan v. G. T. Ry. Co., 9 L. C. J. 57, II L. C. J. 107. 

(3) 21 L. C. J. 13; and see Craig v. G. W. Ry. Co., 24 U. C. Q.B. 504; 
and Briggs v. G. T. Ry. Co., ibid. 510. 



288 



THE RAILWAY LAW OF CAXADA. 



Jurisdiction 
and cause of 
action. 



absolutely necessary, and the expulsion is not wanton or wilful, 
(i) It may be questioned whether the latter part of this holding 
would be good law in this country, as our Railway Act only gives 
power to the conductor to eject a passenger in the case of his not 
having paid his fare, and it would seem to be clear that if he had 
purchased coupon tickets from a company having authority to 
issue them, and giving him the right to travel over certain roads, 
he would have paid his fare, entitling him to travel over those 
roads, on production of his ticket, and could not be legally 
ejected from the train. 

So it has been held in New Brunswick that, where these 
through tickets are issued in coupon form by mutual arrangement 
between various companies, the production by a passenger of a 
coupon authorizing him to pass over one of these companies' 
lines affords evidence of a contract between him and that com- 
pany for his caniage as a passenger. (2) And if this be good 
law, the conductor would have no right to demand payment of 
fare. 

15. In Quebec it has been held that a corporation, whose prin- 
cipal place of business is in a foreign country, may be served with 
process at any place in the Province of Quebec where it has an 
office for the transaction of business. So, where a foreign cor- 
poration had an office at Montreal for the sale of sleeping-car 
tickets, and the plaintiff, who had bought a ticket from defend- 
ants at New York, for a sleeping-car berth from that city to 
Montreal, brought an action of damages, alleging that he had been 
unlawfully expelled from the sleeping car, it was held that the ser- 
vice of his action at the office of the company in Montreal was a 
sufficient service to give the court at Montreal jurisdiction. 
Further, that although the expulsion took place beyond the 
province line, yet as it continued until the plaintiff reached 
Montreal (lie being forced to ride in a first-class car), the cause 
of action arose within the province. (3) Where a person 
having a return ticket for a passage from one place to another is 
put off the train at an intermediate point, the cause of action 
arises at this latter place, and not where the ticket is issued. (4) 

(1) Peun. Ky. Co. v. Connell, 127 111.419. 

(2) Macdonald v. The Mayor of St. John, 25 N. B. 318. 

(3) New York Central Sleeping Car Co. i\ Donovan, M. L. R.,4 Q. B. 

39 2 - 

(4) Ralph i'. Great Western Ry. Co., 14 Can. L. J. N. S. 172. 



OPERATION OF THE RAILWAY. 289 

16. While the general rule, that damages will only be allowed Measure of 
when they are the direct and natural result of the company's acts, . am *S es * or 
and which could have been reasonably foreseen at the time, and 

that remote damages will not be allowed, (i) has been generally 
applied to cases of ejectment from a train, (2) there is always 
difficulty in determining, upon the facts of each particular case, 
what damages should be allowed, or refused as too remote. In 
a very recent case (3) the Supreme Court, confirming judgments 
of the Ontario Court of Appeal (4) and of the Divisional Court, 
(5) held that illness resulting from exposure to cold, in conse- 
quence of ejectment from a street car, is not too remote a cause 
for damages; and that where the person ejected was properly 
clothed for protection against the severity of the weather, but was 
in a state of perspiration from an altercation with the conductor 
when he left the car, and therefore liable to take cold, the jury 
Avere justified in finding that an attack of rheumatism and bron- 
chitis, which ensued, was the natural and probable result of the 
ejectment, and in awarding damages therefor. This case would 
seem to go very far, and to be in conflict with the principles laid 
down in Hobbs v. London & S. W. Ry Co., (6) upon which case 
one of their Lordships, and the Chief Justice of the Court of 
Appeal (Hagafty, C. J.) based their dissent. 

17. In the case of non-payment of tolls, they may be recovered Enforcing 
by an ordinary suit, in any Court of competent jurisdiction, andP a y ment of 
in the case of goods, they may be detained until payment of r ag s e f a 
tolls. (7) In such case, the goods remain at the risk of the owner, goods. 

(1) Pothier, Obligations, Nos. 159, et seq. ; I Sedgwick on Measure of 
Damages, 67 ; C. C. 1074 ; Victorian Ry. Comnrs. v. Coultas, 13 App. Cas. 
222 ; Rock v. Dtnis, M. L. R., 4 S. C. 134, 356 ; Thibaudeau v. Monti. 
Street Ry. Co., ibid, 400; Toms v. Corporn. of Township of Whitby, 35 
U. C. Q. B. 195 ; Ferric v. G. W. Ry.Co., 15 U. C. Q. B. 513. 

(2) Williamson v. G. T. Ry. Co., 17 U. C. C. P. 615 ; Hobbs v. Lon. & 
S. W. Ry. Co., L. R., lo Q. B. in ; Goff v, Gt. Northern Railway Co., 30 
L.J. Q. B. 148. 

(3) Toronto l\y. Co. i<. Giinsted, 24 S. C. R. 570. 

(4) 24 O. R. 683. (5) 21 Ont. A. R. 578. (6) Supra. 

(7) Sec. 234. In a case where plaintiff contracted with defendants to have 
his goods carried by their line, and through the intermediary of another line 
with which he had a contract for a low rate, to his destination, and the de- 
fendants failed to send the goods by that other line, thereby causing plaintiff 
to pay a higher freight, the defendants pleaded the illegality of the low rate 
contract, but it was held that the contract could not be assumed to be illegal, 
for even if it could not be enforced by plaintiff against the intervening com- 
pany, this would be no defence to the defendants. (Langdon v. Robertson, 
I3O.R.497-) 19 



290 THE RAILWAY LAW OF CANADA. 

(1) and if the tolls are not paid within six weeks, the company- 
may sell the goods and retain the tolls, and all expenses and 
charges out of the proceeds, but are bound to deliver the sur- 
plus or any part of the goods which are not sold, to the owner. 

(2) In the case of goods remaining unclaimed for a year or 
more, the company can sell them, by giving public notice for six 
weeks in the Official Gazette and in any local papers that it 
thinks proper, and out of the proceeds they may retain any 
freight due on the goods or charges or expenses in connection 
therewith ; and if there is any balance remaining, they shall keep 
the same for a period of three months, to be paid over to any 
person entitled thereto ; (3) and if this balance is not claimed iu 
that time, it is to be paid over to the Receiver-General, for the 
public uses of the country until claimed by the owner. (4) 

This right of retention or lien upon goods for freight has 
always been recognized by the law in favor of carriers. From 
the language of the Act, it is evident that this right of lien or 
privilege upon the goods for the payment of freight exists upon 
any part of the goods for the whole amount of freight due for the 
carriage of the whole, that is to say, that the company's lien is 
not a proportionate one, equivalent to the amount of freight due 
upon such part of the goods as may remain in their possession, 
but they may hold any of the goods which remain in their posses- 
sion for the full amount of freight due by the owner of the whole 
quantity carried. This is in accordance with the common law 
with regard to carriers, and has been recognized in one of the 
early cases in the province of Quebec, (5) where it was held that 
a common carrier has a privilege upon every portio.i of the goods 
carried for the payment of the whole freight due by the owner or 
consignee of the goods, and this principle was reaffirmed in the 
late case of the Great Western Railway Company v. Crawford^ 
(6) where the consignee of rails carried by the railway company 
contended, that without a special contract, the company could not 
have a lien beyond what was due on the particular rafts detained, 
the company having delivered the greater part of the consign- 

(i) Sec. 234. (2) Sec. 235. 

(3) Sec. 236. (4) Sec. 237. 

(5) Brewster v. Hooker, 7 L. C. R. 55, J L. C. J. 90. 

(6) 6 Q. L. R. 160. 



OPERATION OF THE RAILWAY. 



291 



ment. It was held that the company had alien upon the portion 
of the goods in their possession for the general balance of freight 
due on the whole cargo, as well as for the charges upon the par- 
ticular goods retained. 

The right of the company to recover freight as common 
carriers may be enforced against both the shipper and the 
consignee who takes delivery of the goods ; and the goods may 
be retained until payment of freight as against the consignee, 
unless he is relieved by special contract. 

To create a valid lien, it is essential that the party through 
whom it is acquired should himself either have the absolute 
ownership of the property, or at least a right to vest it ; there 
must also be an actual or constructive possession by the party 
asserting it, with the express or implied assent of the party 
against whom it is asserted, (i) Where the consignor's contract 
is made with the first carrier alone for the whole distance, all 
succeeding carriers are the agents of the first carrier, and there is 
no priority between them and the consignor or consignee. Where 
the freight is paid in advance to the first carrier, the last carriers 
cannot claim a lien on the goods for advance charges paid by 
them to intermediate carriers from whom they had received them 
and for freight for carriage by their own line. But where the 
freight is not paid in advance, the last carrier may, as agent for 
the first with whom the contract was made, collect the whole 
freight, and assert a lien on the goods, but not for a sum beyond 
that contracted for by the first carrier. (2) 

In a New Brunswick case, which came up under the Govern- 
ment Railway Act, (3) the goods had been replevied, and the 
freight agent put in a special claim. It was contended by counsel 
for plaintiff that the property of the Intercolonial being in the 
Crown, the claim for lien should have been made in the name of 
the Queen or of the superintendent of the railway ; that the 
defendant had no property in the goods ; that he should have 
specified the nature of the claim ; that the claim^being a personal 
claim he had no right to show a lien in any other person. But 



(i; Trottierz/. Red River Transportation Co., Man. Rep. Temp. Woodatp. 
262 ; and see Leaf v. Can. Shipping Co., I L. N. 220. 

(2) Ib. p. 255 ; Htch v. Newberry, I Douglas (Mich.) I. 

(3) R. S. C., p. 581, sec. 33. 



292 THE RAILWAY LAW OF CANADA. 

it was held that none of these objections were sustainable ; that 
the agent under the section of the Act had a special property in 
the goods, and that under Consol. Stats. N.B.,chap. 37, sec. 203, 
the agent could claim a special property in the goods, without 
giving further particulars, (i) 

At common law a carrier has no lien upon goods fora general 
balance of account more than in other cases of lien, and such liens 
are not favored. (2) 

The consignee may be held liable not only for freight on the 
goods, but for demurrage and other like charges, provided that 
it is so specified in the bill of lading, and he claims delivery 
under such bill of lading. If he presents the bill of lading and 
asks delivery of the goods, he is bound to pay the freight due 
thereon before obtaining delivery; and if the bill of lading pro. 
vides for the payment of demurrage, he would have to pay such 
demurrage, if due, in addition to the freight, and the railway 
company would have a lien for the payment of such demurrage, 
as well as for the payment of freight. This has been held in 
many cases of carriers by water, and also in the case of railway 
companies. (3) This lien only exists so long as the goods are not 
delivered. If the railway company delivers the goods, it loses its 
privilege or lien thereon, and has only its recourse against the 
consignee or shipper personally ; but the unloading of the 
goods upon a platform, or the putting them into a warehouse, 
to await their being taken delivery of by the consignee would 
not destroy the company's lien. So long as the goods remain in 
the possession of the company, the lien continues to exist. (4) 

Obligation to 18. It is provided by sec. 246, that all regular trains shall be 
ury- started and run as nearly as practicable at regular hours fixed 

by public notice, and the company is bound to famish sufficient 
accommodation for the transportation of all such passengers 
and goods as are within a reasonable time previous to the hour 
fixed offered for transportation at the place of starting, stations 
and usual stopping places ; and the company is bound to take 



(1) Rowe v. McEwen, 28 N. B. 86. 

(2) Rushforth v. Hadheld, 6 East 519 ; Redfield, Vol. 2, 188, No. 27. 

(3) Murray v. G. T. R. Co., 5 R. L. 746. 

(4) Groulx v. Wilson, Q. R., i S. C. 546 ; Patterson v. Davidson, 2 Rev. 
de Leg. 77. 



OPERATION OF THE RAILWAY. 293 

and carry such passengers or goods on ihe payment of tolls 
lawfully payable therefor, (i) and duly deliver them at the 
place of destination ; and in the case of neglect or refusal by the 
company either to receive or carry to their destination such 
passengers or goods, an action lies by the person aggrieved, and 
the company is not relieved from its liability by any notices or 
conditions, if the damage complained of is the result of negli- 
gence or omissi:m on its part or that of its servants. As a qua- 
lification to these provisions of the Act, we must read those con- 
tained in sees. 253 and 254, which provide in effect that the com- 
pany is not bound to carry goods which, in its judgment, are 
of a dangerous character, such as gun-powder, nitro-glycerine, 
vitriol, and articles of a similar nature, and the company has the 
power to open any packages suspected to contain such dangerous 
articles, and if it elects to carry them, the company is bound to 
put them in cars specially set aside for that purpose, which cars 
must have the words " dangerous explosives " plainly appearing 
in large letters on both sides, and the company is liable to a 
penalty of $500 for neglect to comply with lln's pro.ision of the 
Act. On the other hand, any person sending such goods by the 
railway must distinctly mark their nature on the outside of the 
package, or otherwise give notice in writing to the station-master 
or the employee of the company with whom they are left ; and 
there is a like penalty of $500 for sending such goods without 
giving such notice. This exception with regard to dangerous 
goods provides the only case in which the company can refuse 
to carry any particular class of goods. With this exception they 
are bound to take all goods offered to them at any of their stations, 
and forward them within a reasonable delay, unless some valid 
reason be assigned for refusing to do so ; and that they cannot 
rid themselves of this obligation by a mere notice stating they 
have ceased to carry any particular class of goods. (2) 

(1) As to penalty for exacting extortionate tolls, see sec. 290. 

(2) Rutherford v. G. T. R. Co., 20 L. C. J. II. 



CHAPTER X. 



CARRIERS 



Nature of 
liability. 



CARRIERS OF GOODS. 



1. Nature of liability. 

2. Limitation of liability for ne- 
gligence. 

3. Limitation of liability generally. 

4. Through bills of lading ; liabi- 
lity beyond carrier's line, 

5. Limiting liability beyond line, 

6. Other conditions limiting lia- 
bilitv. 

7. Liability of succeeding car- 
riers. 

8. When contract of carriage 
begins . 

9. Contract of carriage acts of 
agents . 

10. Stoppage in trans itn. 

1 1. Liability after arrival of 
goods. 

12. Liability as warehousemen. 

13. Reasonable time for removal. 

CARRIERS OF PASSENGERS. 



14. Mature of liability. 

15. Degree of care. 

1 6. Latent defects in 
roadbed. 



vehicle or 



17. Insufficiency of roadway, 

1 8. Crown as a carrier . 

19. Degree of care due those who 
are not regular passengers . 

20. Riding in unauthorized 
p'ace. 

21. Ditties of railway servants in 
charge of train. 

22. Alighting fiom trains at 
stations. 

2}. Boarding the train. 

24. Delays in carriage of passen- 
gers. 

25. Limiting liability, 

26. Notice of limitation of liability, 

PASSENGERS' BAGGAGE. 

27. Checks, 

28. Personal baggage. 

29. Unchecked baggage. 

30. When liability begins. 

31. When liability ceases. 

32. Liability of sleeping car com- 
panies. 

33. Limiting liability. 

34. Prescription or limitation of 
actions. 



Carriers of Goods. 

1. It has been pointed out, that the company are bound to re- 
ceive and carry and deliver, with the exceptions mentioned in the 
Act, all goods offered for transportation upon due payment of the 
tolls or freight ; and that an action lies against the company for ne- 
glect or refusal in the premises, and that the company cannot re- 
lieve themselves by any notice, condition or declaration, if the 
damage arises from any negligence or omission of the company 
or it servants, (i) These provisions of the Act are practically 



(i) Supra, p. 292. 



CARRIERS. 295 

in accordance with those of the Quebec Code on the subject of 
carriers. By Art. 1673, they are obliged to receive and convey, 
at the time fixed by public notice, all goods offered for trans- 
portation, unless there is a reasonable and sufficient cause of 
refusal, and are liable for all goods that have been received in 
their cars or delivered to them to be placed on the train, (i) 
Under Art. 1675, they are liable for the loss and damage of things 
entrusted to them, unless they can prove that such loss or dam- 
age was caused by a fortuitous event or irresistible force, or has 
arisen from a defect in the thing itself. Under the provisions of 
this article, the liability of common carriers of goods is prac- 
tically absolute, and under the common law the liability is 
practically the same. (2) They are in effect insurers of the goods 
entrusted to them for carriage, and will not be excused for the 
loss or damage to such things, with the exceptions mentioned. 
As to what constitutes the first exception, that is, a fortuitous 
event or irresistible force, much has been written and said, but 
the English expression " the act of God and the Queen's ene- 
mies " may roughly express it. To constitute a case of either 
fortuitous event or irresistible force, there must ensue the hap- 
pening of an event which cannot be foreseen, and is absolutely 
beyond the control of the carrier, and by this is meant not 
mere accidents, such as the derailing of a train or the occur- 
rence of fire, etc., but something which is beycnd the control of 
man, such, for instance, as a convulsion of nature, earthquake, 
lightning or deluge. The absence of negligence alone will not 
excuse the carrier ; he may have used the greatest possible dili- 
gence and care to avoid every possible cause of accident or loss, 
and yet he will not be excused, unless he can show that it was 
due to something beyond the foresight or control of man. (3) We 
are speaking, now, of the liability of carriers of goods only, for, 
as we will have occasion to point out later and more in detail, the 
liability of carriers of passengers is not so extended, and depends 
upon the absence or presence of negligence, both in Quebec and 



(1) C. C. 1674. 

(2) Coggs v. Bernard, I Smiths L. C. 8th ed., p. 213 ; 2 Redfield 6 ; Angel 
on Carriers, 5th ed., sec. 275 ; Browne on Carriers, 89. 

(3) Chalifpux v. C. P. R. Co., M. L. R., 3 Q. B. 324; 14 R. L. 149, 
and authorities there cited. 



296 THE RAILWAY LAW OF CANADA. 

the other Provinces ; and in Quebec rests upon the principles laid 
down in Art. 1053 of the Civil Code, which makes every one 
responsible for the damage or loss caused by his positive act, 
fault or want of care. 

Carriers are also excused, within the meaning of this ex- 
ception, by what is called the act of the Queen's enemies or 
restraint of princes, that is to say, where the carriage of goods 
is prevented by state of war or siege, as being a state of 
things beyond the control of the carrier. The second exception 
to this liability of the carrier is founded upon the reasonable 
principle that he should not be held liable, where the loss or 
damage has arisen from a defect in the thing itself. For instance, 
if it is a perishable article, and has been carried with due despatch 
and diligence, and yet, from its nature, is destroyed or diminished 
in value, the carrier could not be held liable. A good example 
of this is furnished by the case of Seymour v. Sincennes, (i) 
where it was held that the heating of oats during transit, acceler- 
ating the natural evaporation, was sufficient reason for the 
diminution of the grain in the proportion of three per cent., and 
the carrier sued for failure to deliver the whole quantity of cargo 
as placed on board, was relieved to that extent. Or, again, if loss 
has arisen through the insufficiency of the package in which the 
article is put up, as, for instance, a leaky or defective cask, in which 
liquids are placed, a carrier could not be held responsible for the 
consequent loss. (2) Again, if the things carried be live animals, 
and they perish without fault on the part of the carrier from sick- 
ness or their natural disposition, the carrier would not be 
responsible 

Limitation of ^- ^' s ^ability is absolute, but may be limited by notices or 

liability for conditions, providing always that the company cannot by con- 

negligence. tract re ij eve j tse }f f rom t h e results of its own negligence or 

that of its servants. (3) The same provision will be found in 

Art. 1676 of the Quebec Code, by which it is provided that 

notices by carriers of special conditions limiting their liability are 

binding only upon persons to whom they are made known, and, 

notwithstanding such notice and knowledge, the carriers are 

liable whenever it is proved that the damage was caused by their 

fault or the fault of those for whom they are responsible. 



(i) I R. L. 716. (2) Browne, 104. (3) Sec. 246, sub-sec. 3. 



CARRIERS. 297 

To take these principles in detail: the principle that the rail- 
way companies, as common carriers, are insurers of the goods, 
and cannot exempt themselves from liability for negligence by 
any notices, conditions, or even contract, the jurisprudence has 
been long well settled in this country; though, as to the last 
stated proposition, grave doubts have been expressed in recent 
years, as to its application in all cases, by judges whose opinions 
are entitled to the highest respect, (i) This principle was upheld 
in Quebec as early as 1834, in a case of Hart v. Jones, (2) 
where a judgment, dismissing the plaintiff's action to recover from 
a carrier the value of three crates of earthenware which had been 
entrusted to him in good order, and arrived at their destination in 
a damaged condition, was reversed, and the carrier held liable; 
the Court further holding that if the carrier pretended that fraud 
or concealment had been practised, the burden of proof was upon 
him. And again, in 1859, m tne case f Harris v. Edmonston, 
(3) it was held that a condition in the bill of lading relieving the 
carrier from liability for leakage, breakage, or rust, did not release 
him from the obligation of paying for the loss, when negligence 
was shown. (4) This principle, as to the liability of carriers 
of goods, has been well laid down in the case of Chalifoux v. 
C.P.R. Co. (5) The judgment of Judge Mathieu in that casein 
the Superior Court points out very lucidly the liability of carriers 
of goods (6) though erroneously applying that principle to the 
carriage of passengers, the judgment on that point having been 
subsequently reversed in the Supreme Court. (7) 

The principle was again maintained in the Supreme Court in 
the case of Vogel v. G. T. R. Co. (8) In that case a car was 
hired for the purpose of carrying horses. The shipper signed a 
shipping note, by which he agreed to the condition that he under- 
took all risk of loss, injury, damage, etc., and it was held that 



(1) Vogel v. G. T. Ry. Co., 10 Ont. A. R. 162 ; and per Burton, J. A., 
at p. 173 ; and per Strong, J., in the same case, n S. C. R. at p. 628 ; and 
per Taschereau, J., at p. 638 ; per Cameron, C.J.,in Bate v. C. P. Ry. Co , 
14 O. R. at p. 640 ; and per MacMahon, J., in Cobban v. C. P. Ry. Co. , 26 
O. R. at p. 763. 

(2) Stuart's Rep. 589. (3) 4 L. C, J. 40. 

(4) See also Campbell v. G. T. Ry. Co , 3 R. L. 451 ; and Bedarride 
Ch. de Fer, Vol. 2, No. 426. 

(5) M. L. R., 3 Q. B. 324. (6) 14 R. L. 149. 
(7) 22 Can. S. C. R. 721. (8) 11 S. C. K. 612. 



298 THE RAILWAY LAW OF CANADA. 

the provision of the then Railway Act, similar to sec. 246 of 
our present Act, prohibited the railway company from availing 
themselves of the condition relieving the company from liability 
where ihe horses were injured by a collision occurring through 
ihe negligence of the company's servants. 

In this case, however, there were two dissenting judges, Strong 
& Taschereau, J.J., holding that the words " notice, condition or 
declaration " in the section of the Consolidated Act of 1879, cor " 
responding to sec. 2.16 of the present Act, contemplate a public 
or general notice, etc., and do not prevent the railway company 
from entering into a special contract to protect themselves from 
liability, (i) Mr. Justice Taschereau was very positive in his 
opinion that the section in question does not prohibit the com- 
pany from entering into a special contract with the shipper, 
relieving them from liability for negligence. His Lordship said : 
" Why should parties desirous of making such contracts be de- 
prived of their common law right to do so? ** * * Has the 
Legislature deprived them of that right? It would require ex- 
press words to bring me to the conclusion that it has done so. 
I cannot find them in the statutes." The majority of the-Court 
took the other view, however, and their decision is binding law. 

In a later case (2) the Court held that the provisions of this 
section do not disable a railway company from entering into a 
special contract for the carriage of goods, and limiting its liability 
as to the amount of damages to be recovered for loss or injury 
to such goods arising from negligence. The Court thus drew a 
distinction between the right of a company to relieve itself by 
contract from all liability for negligence, and the right to limit 
the amount of such liability. In this case the plaintiff delivered 
to the railway company for carriage a valuable horse, and signed 
a contract of carriage, in which it was stipulated that the com- 
pany should in no case be responsible for any amount exceeding 
$100 for any horse. The horse was killed by the negligence of 
the company's servanis, and the plaintiff took action for $5000 
as its value. The Divisional Court held that the plaintiffs right 
to recover damages was restricted to the sum of $100. (3) On 

(1) But see Peek r. North Stafford -ihire Ry. Co., 10 H. L. C. 473. 

(2) Robertson v. G. T. Ry. Co., 24 S. C. R. 6u. 

(3) 24 O. R. 75. 



CARRIERS. 299 

appeal the Court' was equally divided, (i) and the judgment 
therefore stood affirmed. It was held by the Chief Justice 
{Hagarty C. J. 0.) that the special limitation having been en- 
tered into in good faith on the declared value of $100, and not 
for the purpose of evading liability, was valid and not in contra- 
vention of sec. 246. And, holding that the rate of carriage was 
clearly fixed as on a declared value of $roo, said: " I think it 
" a very fair and reasonable course for the carriers to contract 
" that they will carry the animal so valued at the named rate. 
'' If the plaintiff had announced that his horse was a racer worth 
" $5000, it is shown that he could not have had it carried without 
" authority from headquarters, fixing a. rate in some degree 
" commensurate with the high value and the consequent risk. "(2) 

* * * "It seems unreasonable to allow a plaintiff to mislead 
" and deceive them by agreeing in writing to restrict their lia- 
" bility as for a horse valued at $100, and thus, and thus only, 
" to undertake its carriage, and then to ask for $5000, or fifty-fold 
" its value." (3) Osier, f.A., agreed with the Chief Justice that 
there is nothing in the Act which forbids a fair agreement between 
the carrier and the shipper limiting the sum for which, in case 
of loss through negligence, the former would be liable, although 
the shipper cannot be forced into such an agreement ; and that 
in the present case the shipper was estopped from contending 
that the horse was of greater value than the amount agreed 
upon, u) 

Maclennan, J. A., while of opinion that an agreeme it limiting 
the amount of damages would be valid, as being in effect a 
pre-ascertainment of the amount; held that the contract in ques- 
tion, having regard to the freight classification made under sec. 
226, did not effect such a limitation. (5) Boyd, C., held that the 
limitation of liability fordanuges arising from negligence was in- 
valid under section 246. After referring to the section of the 
English Railway & Canal Traffic Act, 1854, (6) providing in 
terms for the making of a special signed contract by which liabi- 
lity may be limited, and the omission of any similar provision from 



(I) 21 Ont. A. R. 204. (2) Ibid, at p. 206. 

(3) Ibid, at p. 208. (4) Ibid, at p. 218. 

(5) Ibid. pp. 225-227. t.6) 17 and 18 Vic., cap. 31, sec. 7. 



300 THE RAILWAY LAW OF CANADA. 

our Act, the learned Chancellor went on to refer to the case of 
Great Western Ry. Co. v. McCarthy, (i) in which cattle were 
carried under a special contract at a reduced rate, in considera- 
tion of the company being relieved from all liability for damage 
or delay, unless loss arose through the wilful misconduct of the 
company ; and said : " By this the company were held to be 
" protected by a proper condition, for the shipper had the offer 
"of a just and reasonable alternative. It may be that legisla- 
" tion is needed in Canada to adopt alternative rates; * * * but, 
" assuming that it could be done without, here it does not appear 
" that any option was given to the phimiff ; he was not told of 
" any alternative, nor was there indeed any provision made in 
" Canada for the transportation of high price horses at higher 
" rates on the road. The company had a uniform rate for 
" horses, based, it may be, on some average of weight or value, 
" which was charged and paid as a matter of course. And upon 
" this they impose the condition that limits the scale of damages 
" in case of loss by negligence, which, it appears to me, trans- 
" cends the statutory poweis, and is not made any better because 
" the shipper has signed the writing in which it is embodied. 
" The Canadian Act strikes at this, lest the public be coerced 
" by a practical monopoly ; (see Mane .ester Ry. C<f, v. Brown, 
11 8 App. Cas. at p. 712) in other words, the attempt is made 
" without legislative power to introduce an owner's risk at re- 
" duced rates as the standard, so as to relieve the company from 
" their full risk, which as carriers they would be subjected to 
" by collecting the ordinary or proper rate. Apart from what 
" has been said, it appears to me that the whole scheme of th? 
11 Canadian Act is repugnant to this method." (2) 

In the Supreme Court it was held that the words " shall in 
no case be responsible/' contained in the contract, were suffi- 
ciently general to cover all cases of loss however caused, and 
that the plaintiff could not recover more than $100. The Chief 
Justice (Sir Henry Strong) distinguished Vogel's case, (3) 
pointing out that nothing there decided established that it was 
not competent for a railway company to enter int-> an agreement 
for pre-ascertained damages or for Hmited liability. And, after 



(I) 12 App. Cas. 218. (2) 21 Ont. A. R. at p. 212. 

(3) M S. C. R. 612. 



CARRIERS. 301 

quoting the section of the Act, said : "This is an enactment 
" which should not be extended beyond its literal meaning, and 
" that is plainly confined to the prohibition of any contract re- 
<l lieving the company from liability for negligence. To say that 
" it is to shut out the company from limiting its liability for 
" damages by an agreement fixing a value on goods carried* 
" would be to extend its language by implication to a case which 
" does not appear from any part of the Act itself to have been 
"within the contemplation of the legislature. So far. indeed, 
" from this being so, we may reasonably infer that the Legisla- 
" ture never intended to enact a provision which would mcst 
" assuredly have the result so forcibly pointed out in the judg- 
" ment of the learned Chief Justice of Ontario, viz., that when it 
" was sought to compel the company to carry property of great 
" value for rates which would not cover the equivalent of a fair 
" premium for insuring, we should find the company refusing to 
" carry, and thus, on a calculation of profit and loss, preferring 
" to pay damages for such refusal to incurring a risk without 
" adequate compensation." (i) He also referred to the case of 
Hart v. Pennsylvania Ry. Co., (2) in the Supreme Court of the 
United States, tmd quoted the language of Blackford, J., in deli- 
vering the judgment of the Court, as follows : " It is the law of 
" this court that a common carrier may, by special contract, limit 
" his common law liability, but that he cannot stipulate for 
" exemption from the consequences of his own negligence or 
" that of his servants." (3) Taschereau, J., adopted the rea- 
soning of the Chief Justice of the Court of Appeals ; (4) and 
Sedgewick and King, J. J., concurred with Sir Henry Strong's 
opinion, (5) andGwynne, J. ; distinguished Vogel's case chiefly on 
the ground that since its decision, a new tariff and classification 
of rates had been adopted, ^nd approved by the Governor-in- 
Council under sec. 226 of the Act. (6) 

The effect of these two important cases (5) is to settle the 
law in this country, so that while railway companies may not 
under the Act escape from liability for loss occasioned by delay 



(i) 24 S. C. R. at p. 616. (2) 112 U. 8.331. 

(3) 24 S. C. R., at p. 617. (4) Ib. at p. 618. 

(5) Ib. p. 621. (6) Ib., pp. 618-620. 

(7) And see Cobban v. C. P. Ry. Co., 26 O. R-732. 



302 THE RAILWAY LAW OF CANADA. 

or damage through negligence to goods carried by them, under 
any condition or agreement to the contrary, yet they may by 
special contract limit the amount of loss to be paid, in any rea- 
sonable manner : " an illusory limit or a nominal agreed on 
value would not avail." (i) 

Limitation of 3. It being without doubt that railway companies as carriers 
liability rj -11 c 1-11 i 

generally. ot goods are, in the absence of contract, liable at all events and 

practically as insurers, it remains to be considered in what way 
and to what extent they can limit this liability, apart from the 
question of negligence. In the early history of railway com- 
panies, the means resorted to of limiting their liability was by 
conditions contained in notices posted in their stations and 
offices, and by other means sought to be brought to the knowl- 
edge of the shippers of goods. Where railway -companies have 
attempted to limit their liability by conditions contained in such 
notices, they have always been held to strict proof that such 
conditions have been brought to the actual knowledge of the 
party shipping, and many cases have turned upon the question 
as to whether such knowledge was proved or no t. Nowadays, 
however, the conditions are almost all invariably inserted in 
the bill of lading. The bill of lading is not only a receipt evi- 
dencing the delivery to the railway company of the goods speci- 
fied in it, and the place of destination, but also constitutes a 
contract between the shipper and the carrier, containing the 
terms and conditions upon which they mutually agree that the 
goods shall be carried, and is usually made out in two parts : one 
called the shipping note, being in the form of a request to the 
railway company to receive and carry the goods specified, to a 
certain destination, upon the terms and conditions expressed 
upon its face and back. This shipping note is signed by the 
shipper or his agent. The other part of the bill of lading is the 
receipt, whereby the railway company acknowledges to have 
received the goods, and agrees to carry them to their destination, 
upon the same terms and conditions as appear upon the shipping 
note. The signing of the shipping note and the delivery of the 
receipt to the shipper constitute a contract between them bind- 



(i) Per Hagarty, C. J. O., 21 Ont. O. R.at p. 208. 



CARRIERS. 303 

ing upon both; and it is vain for the shipper af'erwards to con- 
tend that he had not read the conditions, for every man is pre- 
sumed to have agreed to all the conditions contained in the 
document to which he has affixed his signature, (i) This system 
of written contract between the parties does away with all the 
questions which formerly arose as to proof of knowledge of 
conditions on the part of the shipper. The right, of carriers to 
limit their liability by conditions expressed in the bill of lading 
has long been recognized in this country. The leading case in 
Quebec is that of Torrance v. Allan, (2) where the doctrine was 
definitely recognized by our Court of Appeals. The shipper was 
there held bound by a condition in the bill of lading that, in the 
event of the steamship company with which he contracted not 
being able to forward his goods by the first ship, they would be 
forwarded by the next vessel leaving the port, and his action for 
damages for delay in not shipping his goods by the first ship 
was dismissed. The conditions which are contained in these 
bills of lading are as a rule very numerous, and cases under 
varying circumstances are arising every day, and it would be 
impossible here to go into them in detail : it will suffice to give 
the general principles by which the validity of such conditions 
are to be tested. First, as has been pointed out, (3) the com- 
pany cannot relieve itself by such conditions from the result of 
its own negligence, or that of its servants. Secondly, the condi- 
tions must be just and reasonable. (4) So long as no negli- 
gence is shown on the part of the company, they would be 
relieved from liability, should the case come within any condi- 
tion contained in the bill of lading which the court would con- 
sider a just and reasonable one. 

4. As to what is a just and reasonable condition, the mot Through bills 



striking example is that condition by which railway companies f 

(1) Hutchinson on Carriers, 225-229, 237-241 ; Mayers . G. T. Ry. be >'? n< * 
Co., 31 U. C. C. P. 248 ; O'Rourke v. G. W Ry. Co., 23 U. C. Q. B. 427 ; cri 
Parker v. S. E. Ry. Co., L. R., 2 C P. D. 416 ; Harris v. G. W. Ry. Co., 

L. R., i Q. B. D. 515 ; Grace v. Adams, 100 Mass. 505 ; Morrison v. Phil- 
lips, etc., Co., 28 Am. Rep. 599; Kirkland v. Dinsmore, 62 N. Y. 171; 
O'Reagan v. Cunard S. S. Co., 160 Mass. 356; McFadden v. Missouri P. 
Ry. Co., i Am. St. Rep. 121. 

(2) 8 L. C . J. 57. (3) Supra p. 296. 

<4) Peek y. North Staffordshire Ry. Co.j 32 L. J. Q. B. 231, 10 II. L. 
C. 473- 



304 THE RAILWAY LAW OF CANADA. 

have attempted to limit th^ir liability in the carriage of goods 
on what is called a through bill of lading to such loss, damage 
or detention as may occur upon their own line of railway. By 
a through bill of lading is meant one by which the company 
receiving the goods undertakes to forward them to a point 
beyond the limits of its own railway, by means of other carriers, 
whether by land or water. It has been a much vexed question 
as to whether, in the absence of express contract limiting the 
liability of the receiving carrier, the recourse of the shipper is 
against him, or the carrier in whose charge the goods were when 
the loss occurred. The English rule is that the receiving carrier 
is liable, no matter where the loss occurs, that is to say, in the 
absence of conditions limiting his liability. The leading case in 
England is that of Miischamp v. Lancaster & Preston Ry . Co. (i) 
There the shipper delivered to the L. & P. Ry. Co. a parcel of 
goods to be carried to a point which was not upon their line of 
railway, but was a station on another railway which connected 
with theirs. The goods were lost or damaged after having passed 
out of the possession of the Lancaster & Preston Ry., and 
while in the possession of the other railway company. The Court 
held that the contract was one by which the L. & P. Ry. Co. 
undertook to forward the goods to the destination named, and 
that they were liable for the loss which occurred on the other 
railway, who acted merely as their agents in forwarding the goods. 
And the same principle was laid down by the House of Lords, in 
Bristol & Exeter Ry. Co. v. Collins. (2) The American rule is 
the exact opposite ; and it has been definitely held by the 
Supreme Court of the United States in the case of the Michigan 
Central Ry. Co. v. Myrick, (3) that the general doctrine as to 
the transportation by connecting lines of carriers is that each 
carrier, confining itself to its common law liability, is only bound, 
in the absence of special contract, to carry safely over its own 
route and safely deliver to the next connecting carrier. There 
would seem to be reason in this doctrine, as the obligation im- 
posed upon the railway companies by our statutes is only to carry 
over their own railway, and would entail only liability for loss or 



(i) 8 M. & W. 421. (2) 7 H. L. C. 194. 

(3) U. S. Supreme Ct., 1888, 6 L. N. 69. 



CARRIERS. 305 

damage occurring to such goods while upon their railway and in 
charge of their servants. But the English doctrine prevails in 
this country, and can be supported on the ground that, by 
receiving goods addressed to a point beyond the limits of their 
railway, a railway company enters into an implied contract at 
the least to forward and deliver the goods there, and would be 
liable in default for breach of contract, the succeeding carriers 
acting as mere agents to forward the goods, (i) But where the 
carrier receives the goods, an d is paid freight only for carriage 
to the end of his route, the fact that, at the request of the shipper, 
he undertakes to deliver them to another carrier, for further 
transportation, does not make him responsible for the delivery 
of the goods at the place of ultimate destination. (2) 

5. But inasmuch as railway companies are not bound by law or Limiting 

by statute to enter into such contracts, and could not be com- } iabilit y . 

beyond, line 
pelled to forward goods beyond the limits of their own railway, 

they have undoubtedly the right to limit their liability to such 
loss or detention as may occur in the transit of the goods over 
their own line; and the difficulties which have arisen in the 
courts have been over the construction or interpretation to be 
placed upon the conditions by which railway companies have 
attempted to limit their liability in such cases. The ordinary 
form of condition which has been used by railway companies with 
this object has been to the effect that, where goods are destined 
for points beyond the limits of the railway receiving them, the 
company would forward the goods by public carrier or otherwise 
as might be convenient, and that the company's liability should 
cease upon either the delivery of the goods to such connecting 
carrier, or the deposit of the same at the last station of their line, 
and upon notice to the connecting carrier that the same were 
ready for further transportation, and a further condition that the 
company would not be responsible for any goods lost, damaged, 
missent or delayed, where such loss, damage or delay occurred 



(1) Merchants Despatch Co. v. Hately, 14 S. C. R. 573 ; G. T. Ry.Co. v. 
McMillan, 16 S. C. R. 543 ; Gn>nt v. Northern Pacific Ry. Co., 22 O. R. 
645 ; Gautl.ier v.C. 1'. Ky. Co., Que. Q. B., 1893, I M. L. D. & R. 572, 
confiimcd in appeal Q. R. 3 Q. B. 136, and see 2 Pardessus576 ; 2 Bcdarride 
Ch. de Fer 424. 

(2) Jeffrey v. Can. Shipping Co., M. L. R., 7 Q. B. I. 



306 THE RAILWAY LAW OF CANADV. 

after the goods had been delivered at the station nearest to the 
point of destination and beyond their limits. In the Province of 
Quebec this condition has been almost invariably held to relieve 
railway companies from loss or damage resulting from injury or 
delay to goods occurring in the carriage of the goods upon the 
lines of other railway companies than that receiving the goods. 
The leading case is that of Chartier v. G. T. R. Co., (i) where 
goods were delivered to the Grand Trunk Railway Company to 
be carried to a point in the United States, the bill of lading con- 
taining conditions similar to those which have just been men- 
tioned. The goods were carried by the G. T. Ry. to Rouse's 
Point, and there delivered to the Central Vermont Railway Com- 
pany for further carriage to their destination, and were damaged 
in transit on the railway of the latter company. In an action by 
the owner against the G. T. R. Co. for the consequent loss, 
the action was dismissed, upon the ground that the condition 
was a just and reasonable one, and relieved the railway com- 
pany. This decision was followed by a number of others in 
the same sense. (2) 

In a case of Charbonneau v. C. P. A'., (3) however, Mr. Justice 
Gill departed from the previous jurisprudence of the Superior 
Court, and held that the railway company was responsible. There 
the plaintiff had shipped a carload of apples by the C. P. R. 
Co. to London via New York, on a through bill of lading con- 
taining the conditions above mentioned. It was proved that the 
shipper knew that the defendant's line of railway only went as far 
as Brockville, and that at this point the goods would be trans- 
shipped to other connecting carriers, and by them carried to 
New York, and thence by ship to London. The Judge held that 
the company's contract was to carry the goods to New York, 
and that though it was proved that the damage to the apples 
occurred after their arrival at New York, but before their delivery 
to the steamship company, he held that the defendants were 
liable. This judgment, however, was reversed by the Court of 
Appeals, (4) who held that the true meaning of the condition 

(1) 17 L. C.J. 26. 

(2) Pratt v. G. T. R., I L. N. 69 ; Robichaud v. C. P. R. Co., 8 I.. N. 
314 ; Dionne z. C. P. K., M. L. R., i S. C. 168, confirmed in Review 
June 30, 1885 ; Beaumont v. C. P. R., M. L. K. , 5 S. C. 255. 

(3) 19 R. L. 317. (4) Ibid. 



CARRIERS. 307 

was that the defendants were only liable for such damage as 
might occur during the transit of the goods on their own line, and 
the condition being just and reasonable and agreed to by the 
shipper, they were relieved. The question has come up, however, 
before the Supreme Court, and been decided in an Ontario case, 

(1) where the Supreme Court held that similar conditions did not 
relieve the company contracting from loss occurring in the 
transit of the goods to the point of destination, but did relieve 
the company for the loss occurring after their arrival. In that 
case, the G. T. R. Co. undertook to carry certain goods on a 
through bill of lading to Portage La Prairie, a station on the line 
of the C. P. R. The bill of lading contained a condition similar 
in effect to those already cited, providing that the company should 
not be responsible for any loss or " ** damage ** that might 
" happen to goods sent by them, if such loss ** or damage 
" occurred after such goods arrived at the stations or places on 
" their line nearest to the points or places which they were con- 
" signed to, or beyond their said limits." The goods arrived 
safely at Portage La Prairie, and the loss occurred after their 
arrival there but before their delivery to the consignees. The 
Court held that the language of the condition did not relieve the 
company for any loss which might have occurred in the transit. 
This opinion of the court was obiter, as being unnecessary to the 
decision of the case, the loss having occurred after the transit 
had been completed, but is of course entitled to great respect, 
and was arrived at in accordance with the decision ot the House 
of Lords in the case of the Bristol & Exeter Railway v. Collins. 

(2) These two cases will repay careful perusal. They are too 
lengthy to deal with in detail here, but it is well to note that the 
conditions in the Collins case were not the same as those in the 
McMillan case, as was ably pointed out by Judge Strong in the 



(1) McMillans. G. T. R. Co., 15 Ont. A. R. 14, 16 S. C. R. 543; 
see also Rogers v. G. W. Ry. Co., 16 U. C. Q. B. 389 ; Lapointe -v. G. T. 
Ry. Co., 26 Q. B. 479 ; Devlin v. G- T. Ry. Co., 30 Q. B. 537 ; Gordon 
v. G. W. Ry. Co., 34 Q. B. 224 ; Mason v. G. T. Ry. Co., 37 Q. B. 163 ; 
Rennie v. Northern Ry. Co., 27 U. C. C. P. 153 ; Roach v. C. P. Ry. Co., 
I Man. 158 ; and Hamilton v. G. T. Ry. Co., 23 U. C. Q. B. 600 ; Bates 
v. G. W. Ry. Co., 24 Q. B. 544; Spettigue v. G. W. Ry. Co., 15 C. P. 3 15; 
Braugh v. G. T. Ry. Co., 26 Q. B. 479. 

(2) 7 H. L. C. 194. 



308 THE RAILWAY LAW OF CANADA. 

Supreme Court. The House of Lords in effect held that, what- 
ever the railway company may have intended to express by these 
conditions, their language could only be interpreted to limit the 
liability of the company after the delivery of the goods at the 
point of destination. The decision of the Supreme Court is clear, 
however, upon one point, that inasmuch as the railway company 
are not bound by statute or by the common law to carry goods 
beyond the limits of their own line, they can relieve themselves 
by contract from liability for losses occurring beyond such limits, 
and that though such contract is one to carry or forward the 
goods to their ultimate destination, and the connecting carriers 
are only to be looked upon as agents of the contracting company, 
still, conditions may be made which, if properly framed, would 
relieve the contracting company from liability for the losses 
which might occur while the goods were in transit in the hands 
of other carriers. This doctrine has been recognized also in 
England in the case of Aldridge v. Great Western Railway 
Company, (i) where a condition by which the contracting rail- 
way company was relieved from liability for loss occurring to 
goods while in transit over the line of another railway com- 
pany was held to be just and reasonable, and to relieve the 
railway company from loss. 

There was a strong opinion expressed in the MacMillan 
case (2) by Strong and Taschereau, J. J. (Gwynne and Four- 
nier, J. J., diss.), that the loss having occurred after the transit 
was over and the goods delivered, the liability of the company, 
as carriers, had ceased, and the condition reduced the contract 
to one of mere bailment as soon as the goods were delivered, and 
also exempted the company from liability as warehousemen, and 
the goods were from that time in the custody of the company on 
whose line Portage La Prairie was situated, as bailees for the 
shipper. 

The conclusion to be derived from these cases appears to be 
this, that by issuing a through bill of lading to a point beyond 
the limits of its own road, a railway company enters into a con- 
tract to carry or forward the goods to that point, and the other 
carriers over whose line it may be necessary that the goods should 

(1) 33 L. J. C. P. 161 ; and see Fowles v. G. W. Ry. Co., 22 L. J. Ex. 
76 ; and Mytton v . Midland Ry. Co., 28 L. J. Ex. 385. 

(2) I6S.C. R. 543- 



CARRIERS. 309 

pass, in order to reach their destination, must be looked upon as 
the agents of the contracting company, and for failure to deliver 
goods at their destination, or for any loss which may result by 
injury to or detention of the goods while in the course of transit 
over these connecting lines, the contracting company is liable, 
unless by the clear terms and express conditions of the contract 
of carriage it has exempted itself from such liability ; and such a 
condition so exempting a contracting carrier is just and reason- 
able,"and will be given force and effect to by the Courts, (i) 

6. Among the conditions which have been considered by the Other condi- 
Courts valid as relieving railway companies from liability, there fi 
are special conditions necessitated by the nature of the goods 
carried. Certain kinds of merchandise naturally necessitate 
special conditions, and especially is this the case with regard to 
perishable or fragile goods. It has been held in England that a 
condition that fresh fish would only be carried under special 
agreement and by particular trains, and that the company should 
not be held responsible under any circumstances for loss of 
market or other injury arising from delay or detention of trains, 
exposure to weather, storage, etc., or from any causes other than 
gross neglect or fraud, was just and reasonable and binding on 
the shipper. (2) On the other hand, a condition excluding all 
risks whatever of conveyance, loading and unloading, upon the 



(1) The Merchants Dispatch Transportation Co. contracted to carry a quan- 
tity of butter from London, Ont., to England, the butter to be carried from 
London to the Suspension Bridge at Niagara Falls by the Great Western Ry 
Co., thence to New York by the Transportation Co., there to be delivered 
to a steamship company for carriage to England. A clause in the bill of 
lading provided, that if damage was caused to the goods during transit, the 
sole liability was to be on the company having the custody of the goods at 
the time of such damage occurring. The butter was carried to New York, 
and there placed on lighters belonging to the Transportation Company to be 
conveyed to the SS. '' Dorset." Owing to the lighters not being able to get 
alongside the steamer, she sailed without the butter, and it was only forwarded 
five days later by another vessel of the steamship company. In the mean- 
time, the butter was damaged by heat while still in the lighters. It was held 
by the Supreme Court, affirming the judgment of the Ontario Court of Appeals 
(12 Ont. A. R. 201) that the Transportation Company, having made a contract 
for the through carriage of the goods, were liable for the damage, and were 
not relieved under the clause in the bill of lading, as the butter was never 
delivered to the steamship company, but was in the custody of the Trans- 
portation Company when the damage occurred. Merchants Despatch Trans- 
portation Company v, Hitely, 14 S. C. R. 572. 

(2) Beal v. South Devon Ry. Co., n L. T. N. S. 184, 29 L. J. Ex. 441. 



310 THE RAILWAY LAW OF CANADA. 

ground that the company refused to be responsible for any injury 
or damage, however caused, occurring to live stock, was held to 
be unreasonable, (i) 

The same rule has been applied in the State of New York with 
regard to another perishable article plate glass, in the case of 
Nelson v. Hudson River Ry. Co. (2) And the same principle 
has been recognized in the Quebec Courts as to carriers by water 
in the case of Mongenais v. Allan. (3) Plate glass is a very good 
illustration of one kind of perishable goods against loss for which 
railway companies or other carriers have the right to protect 
themselves. Its value is great, and it occupies a large space and 
is very subject to breakage, and carriers generally in this country 
have refused to carry plate glass except upon special conditions, 
either relieving them from liability for breakage, or upon payment 
of an extra rate of freight as insurance. There is nothing in the 
Railway Act which would prevent companies from imposing a 
special rate upon the carriage of such goods, provided that such 
rate be charged equally to all persons under the same circum- 
stances for the same class of goods ; but, of course, any such 
rates would have to be approved by the Governor in Council, 
(4) and, under the recent decisions, (5) would not relieve car- 
riers from liability if breakage should occur from negligence. If 
perishable articles, such as fruits, are damaged by their own 
weight and the inevitable shaking of the carriage, they are injured 
through their own intrinsic qualities. If, through pressure of 
other goods carried with them, or by an extraordinary shock or 
shaking, whether through negligence or not, the carrier is liable. 
Another condition, with regard to defects in the thing itself, or 
the " proper vice," as it is called in England, is that by which 
companies seek to relieve themselves from liability for injury to 
live animals occasioned by their unruliness, kicking, plunging, 
etc. Such a condition has been held to be reasonable and bind- 
ing in England in the case of K<ndal v. London & S. IV. Ry. Co. 



(1) McManus v. Lancashire & Yorkshire Ry. Co., 28 L. J. Ex. 353. 

(2) 48 N. Y. 498. 

(3) Q. R. i, Q. B. i8r. 

(4) Cobban v. C. P. Ry. Co., 26 O. R. 732. 

(5) Sujra, pp. 297 et seq. 



CARRIERS. 311 

(i) That was the case of the carriage of a horse. On arrival, 
he was found to be much cut about, especially about the forelegs 
and fetlock joints. It was admitted that the defendants had 
been guilty of no negligence, and the point involved was whether 
they were liable, as insurers, for the safety of live animals as in 
the case of goods. The jury entered a verdict for the plaintiff, 
but the question of liability was reserved for the full court. The 
opinion of Baron Bramwell clearly expresses the doctrine in such 
cases. He said : " The horse was the immediate cause of its own 
" injuries. It slipped, or fell, or kicked or plunged, or in some way 
"hurt itself. If it did so from no cause other than its inherent 
"propensities, its propervice, defendants are not liable ; but if itso 
" hurt itself from the defendant's negligence or any misfortune hap- 
pening to the train, though not through any negligence of defen- 
" dants, as, for instance, from the horse-box leaving the line 
" through some obstruction maliciously laid upon it, then the 
"defendant would, as insurers, be liable." 

The consignee cannot refuse to receive the goods from the 
carrier because they were damaged, but has his remedy in an 
action of damages. (2) 

Where goods are taken at a cheap rate of carriage, the com- 
pany will not be liable for damages caused by the packing 
being insufficient, and where the goods were wrongly described. 
For instance, where the goods were electrical fittings in china 
and porcelain, and were described as hardware, it was pointed 
out that the company's servants would not handle with the 
same care goods which they understood to be hardware, as 
they would a case of china. (3) In another case, a piano carefully 
packed was handed to the carriers, and it was received by the 
consignee in a damaged condition. It did not appear clear how 
the damage was sustained, and the Court, holding that the burden 
of proof being upon the carriers to show that the damage had not 
occurred through their fault or negligence, which they failed to 



(1) 41 L. J. Exch. 184 ; 26 L. T. N. S. 735 ; and see Blower v. G. W. 
Ry. Co., L. R , 7 C. P. 655. 41 L. J. C. P. 268 ; and Hawkins v. G. W. 
Ry. Co. (I5th Feb., 1895). 

(2) Halcrow v. LeMesurier, 21 Rev. Leg. 28 ; Bailly v. R. & O. Nav. Co., 
20 Rev. Leg. 127. 

(3) Connelly v. The Great Northern Ry. Co., 15 Legal News 365. 



3 I2 



THE RAILWAY LAW OF CANADA. 



Liability of 

succeeding 

carriers. 



do, were liable ; but the dissenting judge thought that as the piano 
was of a new patent type, and contained attached to the wires 
160 weights of one pound each, the express company not 
being informed of its unusual character, could not be supposed 
to handle it with a care beyond that required for an ordinary 
piano, (i) 

Where the company's time-table showed that the time for 
transporting between two places was two hours, a delay of twenty- 
four hours for carriage of fresh meat in summer was held unrea- 
sonable. (2) 

The heating of hay causes an increased evaporation and a 
corresponding shrinkage, and proof of this will exonerate the 
carrier from short delivery. (3) 

7. A carrier who receives goods en route from another carrier, 
and enters them on his way-bills, and collects the freight, is, never- 
theless, not responsible for goods lost by the first carrier. (4) 

Neither is the second carrier responsible for delay in the 
delivery of the goods, caused by an error in the way-bill of a 
preceding carrier, delivered to the succeeding carrier with the 
goods, the way-bill stating the wrong place of destination. (5) 

Where a railway company received from another company a 
sealed car said to contain 150 barrels of flour, and transported it 
to destination, when, on the car being opened, it was found to 
contain only 142 barrels, the Court held that the second carriers, 
not being parties to the original bill of lading, were not bound 
by it, and had fulfilled all their obligations by the delivery of the 
contents of the sealed car. (6) 

In another case, certain bars or bundles of iron came by ship 
from Glasgow to Montreal consigned to the plaintiff at Guelph, 
Ont. His agent gave to the agent of a railway company an 
order to get the goods from the ship, and afterwards received 



(1) Ouimet v. The Canadian Express Co., 32 L. C. J. 319. 

(2) Delormez'. C. P. R., n Leg. News 106 ; and see Pontbriand v. G. T. 
R., M. L. R. 3, S. C. 61. 

(3) Seymour?'. Sincennes. i R. L. 716 ( Q. B. 1869). 

(4) Behan v. G. T. Ry. Co, 17 Q. L. R. 299 ; in this case, defendants 
were condemned to pay the costs of the suit, as the plaintiff w.is misled by 
their way- hills. 

(5) Trester v. C. P. Ry. Co , Q. R., I Q.B. 12. 

(6) Wade v. C. P. Ry. Co., 8 L. N. 348. 



CARRIERS. 313 

from the railway company a receipt specifying the number of bars 
and bundles and the gross weight, with a printed notice on the 
face of the receipt that " rates of weights entered in receipts or 
shipping bills will not be acknowledged." All the iron received 
by the railway company was delivered at Guelph, but there was 
a very considerable deficiency in the weight as stated in the 
receipt. So far as appeared, the iron had not been weighed 
either on being taken from the ship or afterwards. It was held 
that the railway company were not estopped by the statement of 
weight in the receipt, and were not liable for more than they 
actually received from the ship and delivered to the plaintiff, (i) 

8. Again, the question arises, when does the contract of carriage When con- 
begin so as to fix upon the company the responsibility of carriers ? ir . act ? ? r ~ 
The following case may be taken as a good illustration of the 
question. Plaintiff delivered a planing machine to defendants to 
be carried between two stations. In placing it on board a car for 
that purpose, defendants' servants injured the machine by negli- 
gence or want of proper appliances. It was held that defendants 
were liable, notwithstanding the special con tract that the machinery 
was to be carried at the owner's risk. (2) As was said in that case, 
"when the plaintiff placed the planer on the platform, paid the 
freight, and made, tacitly or otherwise, the agreement for carriage 
expressed in the receipt note, an implied contract arose between 
him and the defendant company that the latter would, with reason- 
able care, take the machine and carry it under the terms and 
conditions of the receipt note." (3) " I think it may be 
further said, with good reason, that the limited contract contained 
in the receipt note was made on the assumption that the company 
would provide proper means for putting the planer on their cars, 
and that in this view the decision of G. T.R. v. Fitzgerald (4) 
will apply." (5) The conditions of carriage contained in the 
bill of lading or receipt note do not extend to what occurs before 



(1) Horseman v . G. T. Ry. Co., 31 U. C. Q. B. 535 ; see also Milliganz'. 
G. T. Ry. Co., 17 C. I'. 115. 

(2) Whitman v. W. C. Ry. Co., 5 Russ. & Geld. 405 ; and see G.T. R. 
v. Mountain, 6 L. C. J. 173. 

(3) Whitman v. W. C. Ry. Co., 5 Russ. & Geld, at p. 409. 

(4) 5 S. C. R. 204. 

(5) Whitman v. W. C. Ry. Co-, 5 Russ. & Geld, at p. 409. 



314 "''HE RAILWAY LAW OF CANADA. 

the lading, (i) In another case (2) where the plaintiffs 
shipped lumber by the defendants, loading the car themselves, 
there was a short delivery of the lumber, and no evidence as to 
how the loss occurred, it was held that the defendants were 
liable. But if the defendants could have shown that the 
plaintiffs agreed to do the loading, and loaded the lumber so 
badly, that it was lost through their improper loading, that no 
doubt would make out a defence, unless it could be shown that 
by the use of ordinary care the damage would not have been as 
extensive as it proved to be. (3) 

Contract, of <). Where the only evidence of the contract to carry was that 
of aeent s ^ ie f rernan of the freight department at one of the defendants' 
stations agreed to have certain trees forwarded to a station not 
on the defendants' line, but on one connecting therewith, it was 
held that this was evidence to be submitted to a jury of a con- 
tract to that effect binding the defendants. (4) In another 
case (5) plaintiff sent by another man a box of goods to be for- 
warded on the defendants' line, who, seeing several men working 
at the freight shed, told one of them he had a box to forward. 
The man told him " to bring it and put it in there," which he did. 
He got no receipt. The box was lost. Plaintiff then went to 
the station and saw the man already referred to, who admitted 
he got the box, but could not say what he had done with it. It 
was held that the admission of the man whom plaintiff saw was 
not admissible as evidence against the defendants, and as it was 
the only evidence of delivery, the plaintiff should be non- 
suited. (6) 

The very recent case of Northern Pacific Railway Company 
v. Grant (7) affords a good illustration of the powers of an 
agent to bind the railway company. There one Evans, residing 



(1) Tattersall t/.Nat. St. Co.,L. R., 12 Q. B. D. 297. 

(2) Henry v . C. P. R., I Man. 210. 

(3) Id. & Hutchinson v. Guion, 5 C. B. N. S. 149; Hart v. Jones, Stuart's 
Rep., p. 589. 

(4) McGill v. G. T. R , 19 Ont. A. R. 245. 

(5) Young v. C. P. R., i Man. 205. 

(6) And see Leigh v. Smith, I C. & P. 638 ; Griffin v. The Great 
Western Ry. Co., 15 U. C. Q. B. 507; Slim v. The Great Northern Ry. 
Co., 14 C. B. 647; The Great Western Ry. Co. v. Willis, 18 C.B. N. S. 
748. 

(7) 24 S. C. R. 546; affirming 21 Ont. A. R. 322, 22 O. R. 645. 



CARRIERS. 315 

at Victoria, B.C., being about to purchase goods from a firm of 
Grant & Co. in Ontario, wrote to that firm, at the request of the 
railway company's agent at Victoria, asking them to ship the 
goods via Grand Trunk Railway and Chicago & N. VV., care of 
the Northern Pacific at St. Paul's. The freight agent at Victoria 
forwarded the letter to the freight agent of the latter company at 
Toronto, who sent it Grant & Co., writing them himself as 
follows ; " I enclose you card of advice, and if you will kindly 
" fill it up when you make the shipment and send it to me, I will 
" trace and hurry them through, and advise you of delivery to 
" consignee." Grant & Co. shipped the goods as suggested in 
this letter, deliverable to their own order. It was held that on 
arrival of the goods at St. Pauls, the Northern Pacific were bound 
to accept delivery of them for carriage to British Columbia, and 
to expedite such carriage; that they were in that company's 
care from St. Paul's to British Columbia ; that the agent at 
Toronto had authority to bind the company ; and that the com- 
pany were liable to Grant & Co. for the value of the goods, 
which were improperly delivered to Evans without an order from 
Grant & Co. and not paid for. (i) 

The company will not be excused from liability because the 
disregard of duty on the part of the agent was willful. ^2) In 
determining the liability of the company for the acts of its agents, 
the true inquiry is whether the agent was acting within the scope 
of his employment. If so, his acts bind the company, whether 
willful or negligent. (3) 

1O. The carrier's interest in this question, says Mr. Redfield in 
his work on railways, arises only when he is required by the ven- 
dor, while the goods are still in his possession, to redeliver them to 
him or some one on his account. After such demand, it becomes 
important to the carrier, to determine whether the right to reclaim 
the goods still exists. For if so, and the carrier decline to re- 
deliver them, or deliver them to the vendee, he and all persons 
claiming to detain them against the claim of the vendor become 
liable for the value. (4) The authorities show that the vendor has 

(1) See also as to authority of agents, supra, pp. 29-30. 

(2) Weed v. Panama Railroad Co., 5 Duer 193. 

(3) Redfield, Vol. 2, 182, sec. 3, note 2. 

(4) Redfield, Vol. 2, 186, No. 8-10 ; Campbell v. Jones, 3 L. C. J. 96. 



316 THE RAILWAY LAW OF CANADA. 

aright to stop in transitu until the goods have actaally got home 
into the hands of the purchaser, or of some one who receives 
them in the character of his servant or agent. In order that the 
vendor should have lost that right, the goods must be in the 
hands of the purchaser or of some one who can be treated as his 
servant or agent, and not in the hands of a mere intermediary, (i) 
Tiie law has been very clearly and accurately laid down by the 
Master of the Rolls in the case of Bethell v. Clark, (2) which was 
approved by the Privy Council in Lyons v. ffojffnung. (3) He 
says : " When the goods have not been delivered to the purchaser, 
or to any agent of his to hold for him otherwise than as a carrier, 
but are still in the hands of the carrier as such, and for the pur- 
poses of the transit, then, although such carrier was the pur- 
chaser's agent to accept the delivery so as to pass the property, 
nevertheless, the goods are in transitu and may be stopped." 

And in the same case, Cave, J., said : " When the goods have 
arrived at their destination and have been delivered to the pur- 
chaser or his agent, or when the carrier holds them as warehouse- 
man for the purchaser, and no longer as carrier only, the trans- 
itus is at an end." The doctrine of stoppage in transitu has 
always been construed favorably to the unpaid vendor, (4) and 
on these grounds, we can reconcile the Ontario case of Anderson 
v. Fish (5) with the general statement of the law as given above. 
In this case, the defendants, unpaid vendors of goods, shipped 
them over the Grand Trunk Railway to the vendee at W. When 
the goods arrived, the railway company's agent at W. sent 
an advice note to the vendee, who refused to take it. After this, 
the vendee assigned to the plaintiff for the benefit of his creditors, 
and the plaintiff, as soon as the assignment was delivered to him, 
produced it to the railway company's agent, and claimed the goods, 
offering to pay the freight, but producing no advice note. The 
agent did not refuse to deliver the goods, but stated that, accord- 
ing to the rules of the company, when the person claiming the 
goods was an assignee for the benefit of creditors, his duty 

(1) Per James, L. J., in Ex Partej Rosevear China Clay Co., n Ch. D. 
560 at p. 568. 

(2) L. R., 20 Q. B. D. at p. 617. 

(3) ! 5 App. Cas. 391 (1890). 

(4) Bethell v. Clark, L. R., 20 Q. B. D. 617, Lord Esher, M. R. 

(5) 1 6 O. R. 476. Confirmed in appeal, 17 Ont. A. K. 28. 



CARRIERS. 317 

was to telegraph to the company's solicitor for instructions ; he 
did so telegraph, but before he received an answer, and on the 
same day, the vendors notified him not to deliver the goods to 
the vendee or his assignee, asserting a right to stop them in 
transitu. It was held (Falconbridge, J., dissenting) that the action 
of the railway company's agent in delaying till he received 
instructions from the solicitor was not wrongful ; that the transitus 
was not at an end when the vendors intervened, and the right of 
stoppage was well exercised. 

.11. It has been a much discussed point as to whether railway Liability after 

companies continue to be liable as common carriers after the arrl j 

... goods, 

arrival of the goods at their destination. On arrival of goods, it 

is customary for railway companies to give notice to the con- 
signee or person to whom the goods are addressed, of their \J 
arrival, and that the goods will be stored and will remain at the 
risk of the consignee, unless taken delivery of immediately, (i) 
The principle seems to be generally recognized that the respons- 
ibility of the company as common carriers ceases after the goods \/ 
have arrived at their destination, and a reasonable time has been 
given to the owner to remove them. And that after the expira- 
tion of such reasonable time, their liability|as carriers would cease, 
and that they would thenceforward be liable as warehousemen, ^ 
or bailees for hire or otherwise, as they might or might not charge 
for the storage of goods ; that is to say, that their liability would 
no longer be that of insurers, or a liability at all events, except 
in cases where they would prove that the loss occurred through a 
fortuitous event or irresistible force, but would depend upon 
whether they were guilty of negligence or not. In other words, 
if the owner or consignee of the goods chooses to leave them in 
the possession of the company after their arrival, it is a voluntary 
deposit, and the company would be only held to the diligence 
which is required of depositaries in such cases, that is to say, 
they would be held to the care of a prudent administrator, as it is 
expressed in the Quebec Code. (2) The goods would remain in 
the hands of the company at the risk of the owner or consignee, 
but the company would be liable if they were injured or damaged 
through any want of care or negligence on the part of the com- 

(i) And see Ry. Act, sec. 234. (2) C. C. 1802. 



318 THE RAILWAY LAW OF CANADA. 

pany. The contract of the railway company as common carriers 
of goods ceases on the arrival of the goods, and their only obliga- 
tion thereafter is to exercise reasonable care in preserving them 
until called for ; and if the consignee or owner, after having 
received notice of their arrival, neglects to take delivery within a 
reasonable time, there is no logical reason why the company 
should be held responsible for loss or damage happening to the 
goods without negligence on their part. 

These principles may be illustrated, by the following decisions : 
In the case of the Grand Trunk Ry. v. Gut/nan (i), where 
notice of the arrival of goods had been given by the com- 
pany to the consignees, and that they remained entirely at 
the owner's risk, and that the company would not hold them- 
selves responsible for damage, but if stored, that a certain 
rate of storage would be charged, which storage was paid, 
the Court of Appeal for Quebec held that though the lia- 
bility of the company as common carriers ceased by the arrival 
of the goods, they were still liable for damage as warehousemen 
and bailees for hire, but that the evidence did not show any 
negligence on the part of the railway company. This holding 
was by the majority of the Court, composed of Chief Justice 
Duval and Judges Monk and Stuart, but the minority, composed 
of Judges Badgley and Drummond, held that by law negligence 
was presumed, if damage was shown, and that the onus of proof 
of care was on the company, who had made no proof to rebut 
this presumption. The general principle laid down by the major- 
ity of the Court in this case appears to be undoubtedly correct. 
The only doubtful point is as to whether the burden of proof is 
upon the railway company to negative any presumption of 
negligence, or upon the owner to prove negligence on the part of 
the company. It would appear that the proper doctrine was 
that held by the majority of the Court, for while in the case of an 
accident upon the railway, such as the derailment of a train, 
there is a presumption of negligence which has to be rebutted by 
the company, (2) there would not be the same reason for pre- 
suming negligence in the case of loss or injury to goods when in 



(1) 3 R. L. 452. 

(2) Chalifoux v. C. P. Ry. Co., Cassel's Dig. 749. 22 S. C. R. 721. 



CARRIERS. 319 

their possession as warehousemen. There, their liability would 
depend upon negligence, and the fact, for instance, of the burning 
of the warehouse or station building would hardly constitute a 
presumptive case of negligence. The plaintiff's case depending 
upon the negligence of the company, it would be necessary for him 
to make out at least zprimafacie case, in order to recover. In 
other words, the plaintiff would have to show some fault on the . 
part of the company as warehousemen, in order to maintain his ** 
action, (i) 

In two earlier cases, where actions were taken to recover value 
of goods left at a station to be forwarded, but stored during a 
snow storm, it was held, notwithstanding that the company had 
given notice by public advertisement and otherwise that they 
would not be liable for damage by fire, and notwithstanding 
evidence that plaintiff had read one of said notices, that inasmuch 
as the storage of cotton waste in the building in which goods 
to a very large extent were stored amounted to negligence on 
the part of the company, they must be held liable. (2) 

In an early Ontario case (3) it was held that where goods were 
landed from a ship at the port of destination, and notice of 
arrival given, the liability of the carrier ceased. In Inman v. 
1 he Buffalo & Lake Huron Railway Company, (4) goods were 
shipped from Buffalo to Caledonia for the plaintiffs, who lived at 
Port Dover, 18 miles from the station. Draper, C. J., held 
that the defendants had a right to deliver at Caledonia imme- 
diately after arrival, and, that being the terminus of the transit, 
their duty was fulfilled by placing the goods in a safe place, and 
whatever the responsibility of the company after that might be, 
it was not that of common carriers. Plaintiff had no right, he 



(1) Bowie v. Buffalo, Brantford & Goderich Ry. Co.; 7 U. C. C. P. 191 ; 
O'Neill t/.G. W. Ky. Co., 7 U. C. C. P. 203; Brodie v. Norll em Ry. 
Co., 6 O. R. 180 ; Walters v. C. P. Ry. Co., I North West Ter. 17 ; 
Richardson v. C.P.Ry.Co., 19 O. R. 369 ; Hogan v. G.T.Ry. Co., 2 Q. 
L. R 142 : Kellert v, G. T. Ry. Co., 22 L. C. J. 257. 

(2) G. T. Ry. Co. v. Huston, 3 L. C. J. 269. S. C. Que. ; G. T. Ry. Co. 
v. Mountain, ('> L. C. J. 173, Q. B. Que. 

(3) McKay v. Lockhart, 4 O. S. 407. 

(4) 7 U". C. C. 1'. 325 ; and see Bowies. Buffalo, Brantford & Gcderich 
Ry. Co., 7 U.C. C. I'. 191 ; Masons. G. T. R., 37 U. C. Q. B. 163; Hall 
v. G. T. R., 34 U.C. Q. B. 517 ; O'Neill v. Great Western Ry. Co., 7 U. 
C. C. P. 203 ; Mayer v. G. T. R., 31 U. C. C. P. 248 ; Leader v. The North- 
ern Ry. Co., 3 O. R. 92. 



320 THE RAILWAY LAW OF CANADA. 

said, to continue the defendant's responsibility by delaying for a 
single hour after notice. 

Where, however, it is the practice of the company to deliver 
to the consignees the goods brought by them, and the freight 
charges include cartage, a condition that " the company will 
not be responsible for any goods left until called for, or to order, 
warehoused for the convenience of the parties to whom they 
belong, or by or to whom they are consigned, and that the delivery 
of goods will be considered complete, and the responsibility of 
the company will be considered to terminate, when placed in 
the company's shed or warehouse," would only affect the com- 
pany as carriers, and not relieve them from liability as ware- 
housemen, (i) 

Where the station was some five miles distant from the village 
where the plaintiff's place of business was, it was' held that the 
station was the destination of the goods and not the village ; and 
the railway company's liability as carriers ceased on delivery at 
the station. (2) 

In England it has been held that where cattle arrived on Sunday 
about noon, and because police regulations forbade driving them 
through the streets on that day, the company's servants and a 
servant of the plaintiff's put them in a pen, and when the owner 
came for them on the following morning, two were found dead, the 
liability of the defendants as carriers ceased when they put the 
cattle in the pen. (3) In another case the contract was to carry 
goods from A. to B., to be forwarded to C. The defendants did 
carry the goods from A. to B., and deposited them in their ware- 
house, but before they had an opportunity of forwarding them, 
the goods were burnt. It was held, the defendants were not liable 
as carriers. (4) In Chapman v. The Great Western Railway 
Company, (5) where goods arrived on the i'4th and 25th, and 
were burned on the 27111, and the defendants were held not to be 
liable, Coleridge, J., said: ' Plaintiff cannot, for his own con- 



(1) McCro.-sen v. G. T. R., 23 U. C. C. P. 107. 

(2) Richardson v. C. P. R., 19 O. R. 369. 

(3) Shepherd r. Bristol & Exeter Ky. Co., 37 L J. Ex. Ch. 113. 

(4) Garside v. The Proprietors of the Trent & Mersey Navigation Co., 4 
T. R. 581. 

(5) L.R.,5 Q.B.I). 278. 



CARRIERS. 321 

venience, prolong the heavier liability of the carriers beyond a 
reasonable time." 

In the United States it has been held that the mere landing and 
putting off the goods in their warehouse ends the liability of the 
carriers as such. It is a delivery by the company as carriers to 
themselves as warehousemen, (i) 

12. A question arises as to when the disability of a company to Liability as 
contract away its liability for negligence under sub-sec. 3 of sec. warehouse- 
246 of the Railway Act, ceases that is to say, when are the goods 

to be considered as " discharged " ? It was held in Scarlett v. 
The Great Western Ry. Co., (2) which was governed by a sec- 
tion exactly similar to the above, that this section does not 
extend to all cases in which negligence is charged against the 
railway company, but to cases only of neglect coming within the 
provisions of the ten preceding sub-sections. On these grounds it 
was decided in the recent case of Walters v. C. P. R., (3) that 
a company can restrict its liability "for loss or damage done to 
goods left until called for, and warehoused for the convenience of 
the parties to whom they are consigned.. ... the warehousing 
of all goods to be at the owner's risk and expense," and that 
when the goods were placed in the warehouse they were dis- 
charged within the meaning of the Act. And it was held in this 
case that where the goods began to arrive at their destination at 
about the 5th of May, and some came each day thereafter, until 
the last arrived, at about noon on Sunday, the i2th day of May, 
and a fire occurred about noon on the following day, a reasonable 
time had elapsed to allow the plaintiffs to remove their goods. 
(4) 

13, The consignee must have reasonable time within which to Reasonable 

take away the goods, and that reasonable time begins from notice time ( or re ~ 

moval. 
or knowledge ; what is notice or knowledge turns on the facts in 

each case, the custom of the carrier and the practice of the party 

(1) Norway Plains Co. v. Boston & Me. Ry. Co., I Gray 263. 

(2) 41 U. C. Q. B. 211. 

(3) i North West Territories 17, 1887. 

(4) And see Vineburg v. G. T. R., 13 Ont. App. 93 ; Hodkinson v. The 
London & N. W. Ry. Co., L. R. 14 Q. B. D. 228, where baggage which arrived 
at 4.25 p.m. was called for at 6 o'clock of the same day, but could not be 
found. Held, that the defendants' responsibility as carriers had ceased when 
an opportunity was afforded the plaintiff of taking delivery of his property. 

21 



322 THE RAILWAY LAW OF CANADA. 

or consignee, (i) The American authorities, on the subject 
of notice of arrival, are very conflicting. Judge Cooly, in render- 
ing the opinion of the Court in Me Millan v. Michigan Southern & 
Northern Indiana Railroad Company, (2) says : " I am unable to 
discover any ground which to me is satisfactory, on which a com- 
mon carrier of goods can excuse himself from personal delivery 
to the consignee, except by that which usage has made a substi- 
tute. To require him to give notice when the goods are received, 
so that the consignee may know when to call for them, imposes 
upon him no unreasonable burden." The time in general 
regarded as reasonable would be such as might in reason and 
justice be deemed sufficient for any resident of the vicinity to 
come for the goods with the usual appliances for cartage or dray- 
age to be had under any ordinary circumstances. (3) The carrier's 
liability does not cease until the goods have been placed in a 
position to be handled by the consignee without unreasonable 
inconvenience. (4) Where, however, goods are detained by the 
company for payment of freight, they remain at the risk of the 
owners, (5) 

The question as whether the consignee of goods carried as 
freight or a passenger taking luggage with him has, in a particular 
case, applied for the goods or luggage within a reasonable time 
after their arrival, is a question of fact to be determined in each 
case from circumstances. (6) 

Carriers of Passengers. 

Nature of -^* It has been already pointed out that there is a distinction 

liability. between the liability of railway companies as carriers of passen- 
gers and as carriers of goods. (7) 

As carriers of goods in the absence of special contract, they 
are practically insurers of the things entrusted to them for 
carriage ; but as carriers of passengers,[they are liable for injuries 

(1) Richardson v. C. P. R. , 19 O. R. 369 ; Chapman v. Great Western 
Ry. Co., L. R., 5 Q. B. D. 278. 

(2) 16 Mich. 79. 

(3) Hodges v. The Railroad, 49 N. Y. 223 ; Wade on Notice, 577. 

(4) Hodges v. The Railroad, 49 N. Y. 223 ; The Eddy, 5 Wall 481. 

(5) Ry. Act, sec. 234. 

(6) Brown v. C. P. R., 3 Man. 496. As to passengers' luggage, see infra, 

PP- 35 2 et se 1- 

(7) Supra, pp. 295-296. 



CARRIERS. 



323 



to the person carried, only when they are the result of negligence, 
or want of due care or skill, or reasonable foresight and prudence 
on the part of the carrier. This is the undoubted law in England, 
and in all countries where the English law prevails, (i) 

In France, though it has been contended with much plausi- 
bility that the carrier's liability should a fortiori be as great with 
regard to passengers as with regard to goods, (2) the more recent 
decisions of the Courts there are to the effect that the liability is 
governed not by the Article of the Code Napoleon with regard 
to the carriage of goods, but by Articles 1382 and 1383, corres- 
ponding to Articles 1053 and 1054 of the Quebec Code. (3) And 
this has now been authoritatively decided in this country in the 
Supreme Court, in the case of Chalifoux vs. C. P. Ry. Co. (4) 
In that case the plaintiff was a passenger on a train which was 
thrown off the track by the breaking of a rail, and suffered serious 
injuries. The mere fact of the derailment, according to the 
best authorities, constituted prima facie evidence of negligence, 
"on the part of the railway company, and the onus was upon them 
to rebut this presumption. (5) It was proved that the rails on 



(1) Christie v . Griggs, 2 Camp. 79 ; Pym v. Great Northern Ry. Co., 
2 F. & F. 619 ; Stokes v. Eastern Counties Ry. Co., 2 F. & F. 691 ; Crofts 
v. Waterhouse, II Moore 133, 3 King. 319; Wright TJ. Midland Ry. Co., 
L. R., 8 Ex. 137 ; Readhead v. Midland Ry. Co., L. R., 2 Q. B. 412, 4 Q. 
B. 379 ; McPadden v. N. Y. Central Ry. Co., 44 N. Y. 478 ; Ingalls v. 
Bills, 9 Met. 15 ; Pi'tsburg, etc., Ry. Co. v. Thompson, 56 111. 142 ; Heazle v. 
Indianapolis, etc., Ry. Co., 76 111. 501 ; Meiers. Penn. Ry. Co., 64 Pen n. 
225 ; Stokes v. Saltonstall, 13 Pet. 181 ; Bennet v. Button, 10 N. H. 481 ; 
Indianapolis Ry. Co. v. Horst, 93 U . S. 291 ; Hutchinson on Carriers, 500 ; 
Hutchinson v. C. P. Ry. Co., 17 O. R. 347. 

(2) 31 Demolombe, Nos. 484, 638 ; Troplong, Louage, Nos. 904-906 ; 2 
Sourdat, Nos. 976-77 ; 4 Duvergier, Louage douvrage, No. 317 ; Dalloz, 
Rep. Vo. Commissionnaire, Nos. 299, 301, 338, 409, 414 ; 2 Cotelle, Le"gis- 
lation des Ch. de Fer, No. 203 ; Dalloz, 55-2-86 ; S. V. 60-2-42 ; Cour Imp. 
Paris, 27 Nov. 1886 ; but see 2 Sourdat, Nos. 1058 et seg. ; 2 Be"darride, 
Ch. de Fer, Nos. 437, 440 ; S. V. 1867-2-320. 

(3) Dalloz, 1882-2-163, 1885-1-433. It must be remarked with regard to 
this last case that it is stated in a note that this decision of the highest 
Court in France has been victoriously combated by a Itarned text -writer. 

(4) 22 S. C. R. 721. 

(5) Christie v. Griggs, 2 Camp. 79 ; Dawsonz*. Man., Sheffield, etc., Ry. 
Co., 5 L. T. N. S. 682 ; Buike v. Man., Sheffield, etc., Ry. Co., 22 L. T. N. 
S. 442 ; Stokes v. Saltonstall, 13 Pet. 181 ; The New World v. King, 16 
How. 469 ; G. W. Ry. Co. v. Braid, I Moore N. S. 101 ; Wood v. S. E. 
Ry. Co., 13 R. L. 567. 



324 THE RAILWAY LAW OF CANADA. 

this particular section of the road had been manufactured upon 
specifications prepared by the greatest engineering authority 
with regard to the quality of rails to be used in a cold climate 
subject to sudden changes of temperature ; that the manufacturers 
were of the highest reputation in England; that the rails had 
been there put to the severest tests possible, and were of superior 
quality in every respect ; that they had been again inspected 
and tested on their arrival in this country, and had been laid 
with great care ; that the roadbed was in perfect order, and that 
the piece of track itself had been inspected twice on the same day 
previous to the accident, and for the last time within twenty 
minutes of the breaking of the rail. It was also shown that the 
temperature had been very low for some days previous to the 
accident, and that on the day of the accident it had suddenly 
risen considerably. It was also proved that such a change of 
temperature, resulting in a contraction and sudden expansion of 
the metal, was the most frequent cause of the breaking of rails. 
Judge Mathieu, in the Superior Court, in a very learned judgment, 
held that, notwithstanding that they had clearly absolved them- 
selves from any imputation of negligence, the railway company 
were liable for the injuries to the plaintiff under the provisions of 
Art. 1675 of the Code with regard to carriers, and that they could 
not be excused from such liability unless they proved that the 
accident was caused by cas fortuit or force majeure, and that 
the breaking of the rail by a change of temperature did not 
constitute such a case, but was a thing which could have been 
foreseen, (i) This judgment was confirmed by the Court of 
Appeals, Judge Cross dissenting, (2) but was reversed by the 
Supreme Court, (3) where it was held by the majority of the Court 
(Fournier, J., dissenting) that the railway company could only 
be held liable as carriers of passengers in case of negligence, and 
that whether the onus was upon the plaintiff or defendants, the 
company in this case had clearly rebutted any presumption of 
negligence which might have arisen from the fact of the derail- 
ment having occurred. The dissenting opinion in this case was 
based on the ground that the evidence showed there was a latent 

(1) M. L. R., 2 S. C. 171, 14 R. L. 149. 

(2) 31 L. C. J. 261, M. L. R., 3 Q. B. 324. 

(3) Supra, p. 323. 



CARRIERS. 325 

defect in the rail, and that the liability of the company was the 
same as that imposed upon them as carriers of goods. In the 
Court of Appeal the opinion of the learned Chief Justice (Sir A. 
A. Dorioii) seems to have been founded upon the fact that, in 
his view of the evidence, the rail must have been broken some 
days before the accident, and that the company were therefore 
guilty of negligence in not having replaced the rail. 

In a still more recent Quebec case (i) the question was again 
fully argued before the Supreme Court, and decided in the same 
sense as the Chalifoux case, with the same dissent, reversing 
the judgments of the two courts below. (2) In that case, how- 
ever, the Chief Justice of the Court of Appeals (Sir Alexander 
Lacoste) seems to have based his opinion on thej ground of 
negligence on the part of the company, as will be seen from his 
remarks, as follows : " Le voiturier est tenu d'user de la plus 
" grande vigilance pour proteger ses passagers contre les perils 
" du voyage *** Si, par sa negligence, il commet un voyageur 
" a quelqu'inconvenient, il doit s'attendre que celui-ci prendra 
" les moyens que sa discretion lui suggerera pour se tirer d'em- 
" barras, *** et le voiturier sera responsable de Faccident qui 
" surviendra, a moins qu'il ne prouve que le voyageur a agi avec 
" une imprudence inexcusable." (3) 

The views thus expressed are certainly irreconcilable with the 
doctrine as to carriers of goods, which if applied to passengers 
would make the carrier liable without any question as to his ne- 
gligence. 

15. It was well said by the learned Chief Justice, that the carrier Degree of 
is held to the greatest vigilance in protecting his passengers. care - 
While he is not held to warrant or insure the safety of the passen- 
ger at all events, he is bound to convey him safely, " as far as 
human care and foresight will go." (4) While this does not 
mean that the carrier is bound to use all the means that human 
skill or ingenuity can devise, (5) it implies the exercise of all 



(1) Quebec Central Ry. Co. v. Lortie, 22 S. C. R. 336. 

(2) Que., Q. B., not reported in Quebec reports. 

(3) 22 S. C. R. at p. 345. 

(4) Christie v. Griggs, 2 Camp. 79 ; per Lord Mansfield. 

(5) Indianapolis Ry. Co. v. Horst, 93 U. S. 291 ; Ford v. Lon. & South 
Western Ry. Co., 2 F. & F. 730. 



326 THE RAILWAY LAW OF CANADA. 

reasonable skill and care, (i) and he is bound to use the most 
exact diligence, and is icsponsible for negligence however slight. 
(2) Yet, though the carrier is bound to use all well known 
appliances and machinery, generally used, he is not bound to 
put in practice experimental or untried machinery or methods 
which may have been invented, especially where the cost or 
difficulty of working them would be disproportionate to the 
greater degree of safety to be obtained. (3) 

Latent defects 16. In England many decisions have gone upon the question as 
m db d r to wnetner the carrier is responsible for damages arising from 
latent defects, the general doctrine appearing to be that as the 
liability of the carrier of passengers depends upon his negligence 
or otherwise, he would not be held liable on account of an acci- 
dent arising from a latent defect in some part of the roadbed, 
carriage or machinery which could not be perceived by the most 
careful inspection, provided it were shown that such an inspec- 
tion had been duly made. (4) 

In Redhead v. Midland Railway Company, Lord Blackburn 
went so far as to say that the carrier is bound to supply not a 
perfect vehicle, but one reasonably sufficient for the journey, and 
that it is not enough that every reasonable effort was made to 
secure this result, if in fact the carriage was not sufficient. (5) 
In the Exchequer Chamber, however, it was unanimously held 
the contract of carriage implies no warranty as to the sufficiency 
of the vehicle, but is only to take " due care" of the passenger. 

(6) 

Exceptions to this doctrine, however, have been taken, one 
where the carrier is himself the manufacturer of the carriage or 

(1) Wright v. Midland Ry. Co., L. R., 8 Ex. 137. 

(2) Daniel v. Metropolitan Ry. Co., L. R., 3 C. P. 216, 591 ; and see Foy 
v. Lon., Brighton & South Coast Ry. Co., 18 C. B. N. S. 225 and Gee v. 
Metropolitan Ry. Co., L R., 8 Q. B. 161 

(3) Hutchinson on Carriers, 529-30, and see Steinweg v. Erie Ry. Co., 
43 N. Y. 123 ; New Orleans &c. Ry. Co. v. Faler, 58 Miss. 911 ; Le Barron 
r. E. B.F. Co. ii Allan 312 Natchez &c. Ry. Co. v. McNeil, 61 Miss. 
434- 

(4) Redhead v. Midland Ry. Co., L. R., 2 Q. B. 412, 4 Q. B 379 ; 
Wright v. Midland Ry. Co., L. R., 8 Ex 140 ; and see Francis r. Cockerell, 
L. R., 5 Q. B. .184; Exch. Cham. 501 ; and G. W. Ry. Co. v. Braid, i 
Moore N. S. loi ; Ingalls v. Bills, 9 Met. I ; Hutchinson on i arriers, 506 
507- 

(5) L. R., 2 Q. B-, at p. 412. (6) L. R., 4 Q. B. 379. 



CARRIERS. 327 

the machinery. In such a case it has been generally held that 
the carrier is responsible for such a latent defect or flaw as being 
the result of his own negligence in construction; but, on the 
other hand, where the defect occurs in a portion of the carriage 
or machinery which has been made by the best manufacturers 
with due care or skill, and according to the most approved prin- 
ciples, and subject to proper tests and inspection, it has been 
held that the carrier is not liable for consequent damage or in- 
jury, but is liable if the proper tests and inspection have not 
been made by the manufacturer, where such tests would have 
revealed the defect, even though they might be such tests as 
could not be applied by the carrier himself whose duty is to see 
that the work is properly done by the manufacturer, (i) As it 
was put by Hannen J., in Francis v. Cockerell, (2) "unless the 
"presumed intention of the parties be that the passenger 
" should, in the event of his being injured by the breach of the 
" manufacturer's contract, of which he has no knowledge, be 
"without remedy, the only way in which effect can be given to a 
" different intention is, by supposing that the carrier is to beres- 
" ponsible to the passenger, and to look for his indemnity to the 
" person whom he selected, and whose breach of contract caused 
" the mischief. But not only do we think that, when the reasons 
"of justice and convenience on the one side and on the other 
<'are weighed, the balance inclines in favor of the plaintiff 
" (passenger), but we are also of opinion that the weight of 
"authority is on the plaintiff's side." 

17. The leading case as to the degree of care and skill required Insufficiency 
from railway companies in the construction and maintenance of of roadwa y- 
the roadbed, embankments, etc., is that of GreatWestern Railway 
Company v. Braid (3), decided by the Privy Council on an 
appeal from Ontario (4) in 1863. Their Lordships there held 
that : 

(1) Redhead v. Midland, L. R., 2 Q. B. 412, 4 Q.B. 379 ; Francis v. Coc- 
kerell, L. R., 5 Q. B. 184, Exch. Cham. 501 ; Grote v. Chester & Holy- 
head Ry. Co., 2 Exch. 251 ; Crofts v. Waterhouse, 3 Bing. per Best C. J. at 
p. 321; Brazier v. Polytechnic Institution, I F. & F. per WightmanJ. 
at p. 508; Hegemanz/. The Ry. Co., 13 N. Y. 9 ; Hut chim on on Carriers, 
509-512 ; but see Nashville & Decatur Ry. Co. v, Jones, 9 Heisk. 27. 

( 2 ) L. R., 5 Q. B. at p. 194. 

(3) i Moore N. S. 101. 

(4) 10 U. C. C. P. 137. 



328 THE RAILWAY LAW OF CANADA. 

"Where an injury is alleged to have arisen from the improper 
construction or maintenance of a railway, the fact of one of its 
embankments giving way will amount to prima facie evidence 
of such insufficiency ; and this evidence may become conclusive, 
in the absence of any proof on the part of the company to rebut 
it." (i) 

In an action against a'railway company for damages sustained 
by reason of want of skill in the construction of the railway, the 
fact that the accident was caused by a storm of such an extra- 
ordinary nature, that no experience could have anticipated its 
occurrence, is a circumstance that, as affecting the question of 
negligence in the construction and maintenance of the railway, 
ought to be left by the judge distinctly and pointedly to the 
jury. (2) In this case, their Lordships remarked that the 
difficulty of extracting any principle from decided cases, which 
may be applied with certainty to questions of this description* 
is strongly exemplified by the two judgments of the Court of 
Exchequer in Withers v. The North Kent Railway Co., (3) 
and Ruck v. Williams^ (4) rendered within three weeks of each 
other. (5) 

Their Lordships, however, while disclaiming any attempt to 
lay down any general rule upon the subject, said that the railway 
company ought to have constructed their works in such a manner 
as to have been capable of resisting all the violence of weather 
which, in the climate of Canada, might be expected, though 
perhaps rarely, to occur. (6) 

The rule laid down by their Lordships, however, seems broad 
enough to cover most cases of this nature arising in this country. 

Crown as 18. The Crown is not,liable as a common carrier for the safety 

earner. an( j sure ^y o f passengers using its railways ; and a petition of 

right does not lie against the Crown for injuries resulting from 

the non-feasance or mis-feasance, wrongs, negligence, or omis- 

(1) Per Lord Chelrnsford at p. 116. See also two Quebec cases to same 
effect, Wood v. South East Ry. Co. ; Murray v. South East Ry. Co., 13 R. L. 
567. 

(2) i Moore N. S., 101. 

(3) 27 LJ. N. S., Exch. 417. 

(4) 27 L. J. N. S., Exch. 357. 

(5) i Moore, N. S., per Ld. Chelrnsford, at p 116. 

(6) Per Ld. Chelmsford, at p. 120. 



CARRIERS. 329 

sions of duty of the subordinate officers or agents employed in 
the public service on its railways, (i) 

19. The degree of care due by the carrier to strangers is gov- Degree of care 
erned by the principle that everyone is obliged, upon considera-^" 6 ' t sew ^ 
tions of humanity and justice, to conform his conduct to the lar passengers, 
rights of others, and, in the prosecution of his lawful business, to 
use every reasonable precaution to avoid injuring them. (2) In a 
Quebec case, (3) where a person, by giving a tip or bribe to the 
conductor of a train not intended for the conveyance of ordinary 
passengers, as he had reason to know, induced the conductor of 
such train to permit him to travel t on the train, contrary to the 
regulations of the company, it was held that he travelled at his 
own risk, and if while so travelling, he is injured by a collision, 
he is not entitled to be indemnified by the company for any 
damage to person or property sustained by him. Where the 
defendants are negligent in the manner of running a train, they 
are liable for the death of an express messenger, who, as such> 
was being carried on their train without a ticket or payment of 
fare, but under a contract between the defendants and the express 
company. (4) The deceased was the servant of the express 
company, and was not in any sense engaged in any common 
employment with the servants of the railway company. 

Where the plaintiff was a servant in the employment of a 
contractor with defendants for keeping their road in repair, and, 
in the course of such repairs, plaintiff was transported on the 
defendant's cars under the management of defendant's servants, 
and used to transport materials and convey workmen employed 
by the contractor ; the defendants were held liable to plaintiff 
for injuries negligently caused to him by the collision of the train 
with another. (5) 

(1) The Queen v. McLeod, 8 S. C. R. i. 

(2) Hutchinson Carriers, Ed. 1882, p. 447. 

(3) Canadian Pacific Railway Co. v. Johnson, M. L. R., 6 Q. B. 213 ; and 
see Hutchinson v. C. P. R., 17 O. R. 347. Confirmed in appeal, 16 Ont. 
A. R. 429. 

(4) Jennings v. The Grand Trunk Railway, 15 Ont. A. R. 477. This case 
was confirmed on appeal to the Privy Council on the question of damages, 13 
App. Cas. 800. For the case of a mail carrier, see Nolton v. The Railroad 
Corporation, 15 N. Y. 444. 

(5) Torpy v. The Grand Trunk Railway Co., 20 U. C. Q. B. 446 ; but 
sac Sheerman v. Toronto, Grey & Bruce Ry. Co., 34 U. C. Q. B. 451. 



330 THE RAILWAY LAW OF CANADA. 

Two other cases, similar to the foregoing, were afterwards 
decided in a contrary sense, but the facts differed sufficiently to 
warrant a departure, without in any way disturbing the soundness 
of the first decision. In one of these cases (i) the evidence 
shewed that the defendants were only bound by their contract 
with the contractors to provide an engine and platform cars for 
carrying ballasting and materials for track-laying, to be under the 
charge of their own conductor, engineer and fireman, the con- 
tractors to find the brakeman ; and that it was not necessary for 
defendants to carry the workmen. There was no evidence that 
the defendants consented to the use of the cars by the men, 
further than that the conductor and engine-drivers permitted it. 
In the other case (2) the facts were exactly similar, and it was 
held that the defendants were not liable, for their contract was 
to carry materials only, not passengers, and the conductor, in 
permitting the plaintiff to get upon the train, was not acting as 
defendant's agent. The distinction to be noted between these 
two cases and that of Torpy v. The Grand Trunk Railway 
Company, is, that in that case the contract was for the repairing 
of the line, and not for construction, and the train was entirely 
under the control of the defendants. It might, therefore, be 
readily supposed that, owing to the nature of the contract, the 
workmen would require to be transported from place to place by 
the company's trains. 

Riding in un- 2O. With reference to regulations prohibiting persons from 
place" 2 riding on the platforms of cars or in baggage or freight cars, 
reference should be had to sections 21410 222 of the Act. The first 
section empowers the company to make by-laws, rules or regula- 
tions for the purpose therein mentioned, and amongst others.those 
for the purposes of regulating the travelling upon or the using or 
working of the railway ; and by the following sec. 215, the com- 
pany is given power to prescribe a penalty not exceeding $40 for 
the violation of any by-law or regulation. Such by-laws and regu- 
lations are subject, by sec. 217, to the approval of the Governor 
in Council, without which they have no force or effect. Sec, 
218 provides for the publication of such by-laws or regulations, 

(1) Sheerman v. Toronto, Grey & Bruce, 34 U. C. Q. B. 451. 

(2) Graham v. Toronto, Grey & Bruce, 23 U. C. C. P. 541. 



CARRIERS. 331 

and requires that printed copies should be openly affixed and 
kept affixed to a conspicuous part of every station belonging to 
the company, and so as to give public notice thereof; and in the 
Province of Quebec, it is required that they should be printed 
both in French and English ; and when approved as above men- 
tioned and published, they are binding upon all persons ; and 
by sec. 221, the company is given power in cases where the 
violation or non-observance of any by-law or regulation would be 
attended with danger or annoyance to the company, or hindrance 
to the company in the lawful use of the railway, to summarily 
interfere without prejudice to the penalty. When such by-laws 
or regulations affect the officers or servants of the company, it is 
required by sec. 219 that a printed copy shall be given to every 
officer, servant and employee of the company affected. It would 
appear from consideration of sec. 249, taken in connection 
with those sections referring to by-la\ys and regulations, that a 
passenger riding upon the platform of a passenger car or in a 
baggage or freight car, in violation of any regulation of the com- 
pany, approved of by the Governor General in Council, and 
published in the manner required by the Act, (i) would not be 
entitled to receive compensation if injured, provided that suffi- 
cient accommodation was provided for him in the car. Aside, 
however, from any regulations upon the subject issued by the 
railway company, and properly published, it is always competent 
to show, in defence to an action for bodily injuries, that the party 
injured was knowingly travelling in an unauthorized place; and 
if the passenger wilfully and knowingly puts himself in a place of 
danger, and an accident results to him which would not have 
occurred if he had been riding in the ordinary passenger car, 
there is no doubt he could not recover for the consequent injury. 
(2) To take an extreme case, we might suppose that the passen- 
ger seated himself upon the cow-catcher of the engine ; very 
clearly he would take upon himself the result of any injury result- 
ing to him from riding in such an exposed position. Where the 

(1) Under the Provincial Railway Acts, printed regulations must be posted 
up at the time in a conspicuous place inside the passenger cars forming part of 
the train. (See Appendix CXI.) 

(2) Railroad Co. v. Jones, 95 U. S. 439 ; Eaton v. The Railroad, 57 
N. Y. 382 ; C. P. Ry. Co. c. Johnson, M. L. R.,6Q. B. 213 ; Hutchinson v. 
C. P. Ry. Co., 17 O. R. 347 ; 16 A. R. 429 ; Hutchinson on Carriers, 554. 



332 THE RAILWAY LAW OF CANADA. 

conductor of a freight train, contrary to the rules of the company, 
travelled upon the locomotive while in charge of the train, and 
a collision occurring, he was killed, the company were held not 
liable, (i) 

Where the plaintiff, who was in defendant's train on a passenger 
ticket, went into the baggage car, where passengers frequently 
went to smoke with the permission of the conductor, and was 
injured while in the baggage car by a collision resulting from 
defendant's gross negligence, it was held that he could recover. 
(2) It was also held that sec. 107 Consolidated Statutes 
Canada (reproduced in the present Railway Act) (3) did not 
apply. Although the car was in sense a baggage car, yet the 
compartment in which plaintiff was at the time of the accident 
was used by the express company, the other two compartments 
being used for the post office and the baggage. 

To recover in an action, for damages resulting from injuries 
received while being carried, the injured party must be lawfully 
upon the train ; and if he obtains admission to the train, and is 
carried, under false representations or through fraud on his part, 
or by the use of a ticket or pass unlawfully obtained, he cannot 
recover. (4) 

Duty of Rail- 21. It has been observed (5) that it is not the duty of carriers 
way servants to restrain passengers from injuring themselves j at the same time, 
train. ^ ( ^ * s undoubtedly the duty of conductors and others in charge of 
the train to see to the proper and safe placing of passengers, and 
as far as possible to prevent them from occupying dangerous 
positions on the train. This principle was very strongly brought 
out in a case which came before the Quebec Court of Appeals, 
one of a series of actions brought against the C. P. Ry. Co., 
by a number of workmen who were being carried over the line to 
a point where they were to obtain work. They were not carried 
upon a regular passenger train, but upon a train made up of 
various cars, some empty, some flat cars carrying rails, and some 



(1) Stoker v. The Welland Railway, 13 U. C. C. P. 386. 

(2) Watson v. Northern Ry. Co., 24 U. C. Q. B. 98. 

(3) Sec. 249. 

(4) C. P. Ry. Co. v. Johnson, M. L. R., 6 Q. B. 213 ; Great Northern 
Ry.Co. v. Harrison, 10 Exch. 376; Hutchinson on Carriers, 555. 

(5) Browne on Carriers, 385. 



CARRIERS. 333 

cars loaded with lumber. The Court held that the plaintiffs 
occupied the position of passengers with regard to the railway 
company, as carriers of them. The men were directed to take 
their seats upon the flat cars, but instead of doing so, climbed 
upon the top of the lumber on several cars. The lumber was 
proved to have been staked at the side sufficiently to hold it, but 
at a certain point on the road, where an unusual jerk or jolt 
occurred, the lumber was thrown off through the breaking of 
the stakes, which would not have occurred had it not been for 
the superadded weight of the men and their baggage. The 
company were held liable, upon the ground that the conductor 
and the servants in charge of the train should have exercised 
more supervision over the passengers, and not merely contented 
themselves with originally directing them to take their seats 
upon the empty cars, but were bound to have ordered them out 
of the dangerous position which they took up. (i) This case may 
be of doubtful authority, as one of the learned Judges expressed 
grave doubts ; but it serves as an illustration to show how jeal- 
ously the courts will guard the rights of passengers in such cases. 
There is a duty imposed also upon the railway company to 
protect the passenger from the unlawful acts of other passengers, 
when practicable, and within the power of the company's ser- 
vants. (2) 

22. Platforms are generally considered as convenient accom- Alighting 

modation for passengers to alight at stations. As no law, however, from trains at 

' stations, 
compels railway companies to have them erected at every station, 

they are not held absolutely necessary ; but in their absence, it 
seems that something else should be provided, or such care and 
assistance procured as to insure the safe alighting of passengers 
from the trains. (3) 

So in another case, where the train arrived at the station on a 
dark night, and the station grounds were not lighted, and there 
was no platform on which to alight, but the ground was smooth 
and level, a brakeman came with a lantern, carried out the plain- 

(1) C. P. Ry. Co. v. Goyette, M. L. R., 2 Q. B. 370. 

(2) Hutchinson on Carriers, 548-552. 

(3) Duhuc, J., in McGinney v. C. P. Ry. Co., 7 Man. 153. For a point 
involving the introduction of evidence in such a case see Harvey v. C. P. R., 
3 Man. 266. 



334 THE RAILWAY LAW OK CANADA. 

tiff's valise and assisted her to alight. The lowest step of the car- 
riage was 26 inches from the ground. Before assisting her to alight, 
the brakeman placed the lantern on the ground where it cast a 
light 20 or 30 feet around. In alighting the plaintiff injured her 
knee, and was compelled in consequence to abandon her employ- 
ment as cook. It appeared at the trial that the plaintiffs knee 
had been weak for some time previously, and that she had been 
affected with synovitis in a sub-acute form. She did not tell the 
brakeman of this weakness of the knee. In an action brought 
for this injury it was held that the defendants were not guilty of 
negligence, and that if there was any negligence at all it was 
attributable to the plaintiff in not telling the brakeman of her 
feeble and delicate knee, (i) 

But where, after calling out the name of a. station, a railway 
train was slowed up on approaching and passing it, but was not 
brought to a full stop, and the plaintiff who had purchased a 
ticket for that station received injuries on alighting there, it was 
held, that there was evidence of an invitation to alight, and that 
it was for the jury to say whether she had acted in a reasonably 
prudent and careful manner in availing herself of it. (2) 

In England the doctrine is that if the servants of the company 
ask passengers to alight on arrival of a train at a station, the 
company is liable for injuries sustained in alighting, owing to 
defective accommodation of the place ; but what amounts to an 
invitation to alight depends upon the surrounding facts and 
circumstances. And it has been held that mere stoppage of the 
train and calling out the name of the station is not such an 
invitation ; (3) but, coupled with a lengthened stoppage, would 
amount to an invitation, (4) as may a long stoppage alone. (5) 

In Bridges v. North London Ry. Co.. (6) in the House of 

(1) McGinney v. The Canadian Pac. Ry, Co., 7 Man. 151; and see 
Crafter v. The Metropolitan Co., L. R., I C. P. 300; MacDonald v. 
Mayor, etc., of St. John, 25 N. B. 318 ; Siner & wife v. The Great West- 
ern Ry. Co , L. R., 3 Ex. 150 ; Harrold v- The Great Western Ry. Co., 14 
L. T. N. S. 440 ; Cornman v. The Eastern Counties Ry. Co., 4 H. & 
N. 781. 

(2) Edgar & wife v. Trie Noithern Ry. Co., n Out. App. 452, 

(3) Lewis v. Lon , Chat. & Dover Ky. Co., L. R., 9 Q. B. 66. 

(4) Biidgesw. N. Lon. Ry. Co., L. K., 7 H L. 213 ; Robson v. N. E. 
Ry. Co., 2 L. K., 2 Q. B. D. 85. 

(5) Rose v. N. E. Ry. Co., L. R. 2 Ex. D. 248. 

(6) Bridges v. Directors, etc., of North London Ry. Co., L. R., 7 H. L. 



CARRIERS. 335 

Lords, it was held that the case was one for the consideration of 
the jury. It was laid down in this case as a test for what is or 
is not for the jury, that there is in every case of this kind a 
preliminary question which is one of law, namely, whether there 
is any evidence on which the jury could properly find the question 
for the party on whom the onus of proof lies. If there is not, 
the Judge ought to withdraw the question from the jury, and 
direct a non suit if the onus is on the plaintiff, or direct a 
verdict for the plaintiff if the onus is on the defendant, (i) 
and it follows from this that although the question of negli- 
gence is usually one of pure fact, and therefore for the jury, it is 
the duty of the judge to keep in view a distinct legal definition 
of negligence as applicable to the particular case ; and if the facts 
proved by the plaintiff do not, whatever view can be reasonably 
taken from them, or inference drawn from them by the jurors, 
present an hypothesis which comes within that legal definition, 
then to withdraw them from their consideration. (2) In a 
Quebec case, (3) it was decided that where a passenger buys a 
ticket for a certain station, and the company collect it, they are 
bound to put him off at that station, or be held liable in damages ; 
but where the company have failed to so stop, and the passenger 
jumps from the train while it is in motion, the company will not 
beheld liable for injuries received by the passenger, they being 
solely the result of his own imprudence. 

A railway company is bound to provide for passengers safe 
means of ingress to and egress from its stations. And where a 
passenger, arriving at a station, at night, walked along a platform 
not intended for, but frequently used as, a means of exit, but 
which was not in any way guarded, and after leaving the platform 
fell into an excavation in the company's grounds, and was injured, 
the company were held liable. (4) 

The company is also bound to keep its station and premises in 
proper repair, so as to prevent injuries to passengers ; and a 

(1) Per Pollock B. in Bridges v. Directors, etc., of North London Ry. Co., 
L. R., 7 H. L. at pp. 221-222, quoting from Ryder v. Wombwell, L. R., 4 
Ex. 32, 38. 

(2) Ibid. 

(3) The Central Vermont Ry. Co. v. Lareau, M. L. R., 2 Q. B. 258, 
reversing M. L. R., I S. C. 433. 

(4) Old wright v. G. T. Ry. Co., 22 Ont. A. R. 286. 



336 THE RAILWAY LAW OP CANADA. 

passenger arriving at the station continues to be a passenger for 
a reasonable time until he has left their premises. So, too, a 
person bonafide at the station, for the purpose of taking passage 
upon a train, is a passenger, although he has not in fact purchased 
his ticket, (i) The company is bound, as to its passengers or 
persons upon its premises " by invitation," to see to it that its 
premises are in such a condition, in all respects, that a person, by 
the exercise of ordinary care, can come to and leave them without 
danger ; and this extends to proper and suitable approaches, 
platforms, steps or other devices, as well as suitable lights. (2) 
As illustrating the obligation of the railway company in this 
respect, and the care to be exercised by the passenger, the 
following case may be cited. The approach to a station of the 
Grand Trunk Railway from the highway was by a planked walk 
crossing several tracks, and a train stopping at the station 
sometimes overlapped this walk, making it necessary to pass 
around the rear car to reach the platform. J., intending to 
take a train at this station before daylight, went along the 
walk as his train was coming in, and seeing, apparently, that it 
would overlap, started to go around the rear, when he was struck 
by a shunting engine, and killed. It was the duty of this 
shunting engine to assist in moving the train on a ferry, and it 
came down the adjoining track for that purpose before the train 
had stopped. Its headlight was burning brightly and the bell 
was kept ringing. There was room between the two tracks for a 
person to stand in safety. It was held that the company neglected 
no duty which it owed to the deceased as one of the public. 
(3) And per Strong & Patterson, J.J., that while the public 
were invited to use the planked walk to reach the station, and 
also to use the company's premises, when necessary,to pass around 
a train covering the walk, there was noiimplied warranty that the 
traffic of the road should not proceed in the ordinary way, and 
the company was under no obligation to provide special safe- 
guards for persons attempting to pass around a train in motion. 

(1) Wood, Railway, 1163; Grand Trunk Railway v. Boulanger, I7th 
March, 1886 (Que.), Cassil's Dig., p. 734. 

(2) Wood, Railways, 1164. 

(3) Jones v. The Grand Trunk Ry. Co., 18 S. C. R. 696, affirming Ct. of 
Appeals, Ontario, 16 Out. App. 37 ; see also Curwin v. The Windsor & 
Annapolis Ry. Co., 3 Geld & Oxley 493. 






CARRIERS. 337 

23. While generally an attempt to get on board a train in mo- Boarding the 
tion will be treated as evidence of negligence on the part of the 
passenger, yet instances may exist where it is not so, and the pas- 
senger is justified in making the attempt; but in such cases 
liability arises, if at all, because of the fact that the danger was 
not obvious, or because the agents of the company directed the 
passengers to make the attempt. But even where the agents of 
the company direct the passenger to do so, the company is not 
liable, if it was gross negligence on the part of the passenger to 
make the attempt in^view of all the circumstances; and whether 
it was so or not depends upon the fact whether, under the cir- 
cumstances, the act was obviously dangerous, and that is a 
question for the jury, (i) A passenger, in trying to catch a 
train, ran up and seized hold of the iron railings of one of the 
cars, and holding thereon, ran along the platform at the speed of 
the train with his face towards the car, and, after the train had 
moved a certain distance, in attempting to jump thereon, he 
struck against a baggage truck which was close to the platform, 
and which had been used in taking baggage to the baggage car, 
and was left for a couple of minutes to bring back the baggage 
therefrom. By the concussion he was thrown under the wheels 
of the train, and received an injury. It was held that, under the 
circumstances of the case, the leaving of the truck on the plat- 
form did not constitute negligence on the part of the defendants ; 
but even if it did, the plaintiff, in attempting to get on the train, 
as he did, was guilty of such contributory negligence as would 
prevent his recovering. (2) 

An important case on this point was that of Hall v. McFadden, 
decided in the Supreme Court of Canada. (3) Plaintiff, having 
a first-class ticket from Sussex to Penobsquis by the Intercolonial 
Railway, intended going to Penobsquis (her home) by the mixed 
freight and passenger train, which was due to leave Sussex at 
1.47 p.m. The train on that day was an unusually long one, and 
when the passenger cars were brought to the platform, the engine 
was across the public highway. When the train came in it was 
brought up so that the forward part of the first-class car was 

(1) Wood Rlys., p. 1154 ; Curry v. C. P. R., 17 O. R. 65. 

(2) Haldan v. The Great Western Ry. Co., 30 U. C. C. P. 89. 

(3) 1st May, 1883. Cassel's Dig., p. 724. 

22 



338 THE RAILWAY LAW OF CANADA. 

opposite the platform. It was then about ten minutes after the 
advertised time of departure. Plaintiff was standing on the plat- 
form when the train came in, but did not then get on board. 
The conductor of the train (the defendant) got off the train and 
went to a hotel for dinner. While he was absent the train was, 
without his knowledge, backed down, so that only the second- 
class car remained opposite the platform. The jury found that 
the first-class car did not remain at the platform long enough to 
enable plaintiff to get on board. The defendant, after finishing 
his dinner, came over hastily (being behind time and, therefore, 
in somewhat of a hurry), called "all aboard," glanced down the 
platform, saw no person attempting to get on board, crossed the 
train between two box cars to signal the driver to start (it being 
necessary to cross the train in order to be seen by the driver, 
owing to a curve in the track), and almost immediately the train 
started. The 1 24th regulation for government of the Intercolonial 
Railway prescribes that conductors must not start the train while 
passengers are getting on board, and that they should stand at 
the front end of the first passenger car when giving the signal to 
the driver to start, which was not done in this instance. Plaintiff 
and a lady friend, F., who was going by the same train, were 
standing on the platform, and when they heard the call "all 
aboard," they went towards the car as quickly as they could. 
F. got on all right, but plaintiff, who had a paper box in her 
hand, caught the hand-rail of the car, when she slipped, owing to 
the motion of the train, and was seriously injured. The jury 
found that the call " all aboard " was a notice to passengers to 
get on board. 

The Supreme Court of New Brunswick (i) held, that, although 
the plaintiff's contract was with the Crown, the defendant owed 
to her, as a passenger, a duty to exercise reasonable care, and 
that there was ample evidence of negligence for the jury. On 
appeal to the Supreme Court of Canada, it was held (2) that the 
judgment of the Court below should be affirmed. It was held 
by Ritchie, C. J., that there was no obligation on the part of the 
passengers to go on board the train until it was ready to start, or 



(1) 19 N. B. 340, and 21 N. B. 586. 

(2) Taschereau v. Gwynne, J. J., dissenting. 



CARRIERS. 339 

until invited to do so by the intimation from the conductor 
" all aboard." And by Henry, J., that there was no satisfactory 
proof of contributory negligence on the part of the plaintiff. The 
package she carried was a light one, and such as is often carried 
by passengers with the knowledge and sanction of railway con- 
ductors and managers, and a tacit license is therefore given to 

passengers to carry such with them in the cars 

After the notification "all aboard" is given by a conductor, it is 
his duty to wait a reasonable time for passengers to get their 
places. 

24. The railway company is bound to use every reasonable Delay in 
effort to insure punctuality in the starting and arrival of its carria g e of 
trains, and any unreasonable delay will render the company liable 
in damages to the passenger, to be measured as a rule by the 
inconvenience he thereby suffers, and any additional expenses 
he incurs, within reason, to reach his destination, (i) 

The ruling case in England is that of Le Blanche v. The London 
& North Western Railway Company. (2) There the plaintiff 
contracted in Liverpool for a journey to Scarborough via Leeds, 
having taken a ticket expressed to be subject to conditions in 
the time tables, which were (inter alia] : " Every attention will 
be paid to ensure punctuality as far as is practicable ; but the 
company do not undertake that the trains shall start or arrive at 
the time specified in the bills, nor will they be accountable for 
any loss, inconvenience, or injury which may arise from delays 
or detention." According to the time bills the train which left 
Liverpool at 2 o'clock was to arrive at Leeds at 5 o'clock, and 
a train was to leave Leeds at 5.20, arriving at Scarborough 
7.30. The trains between Leeds and Scarborough were not 
under control of the contracting company. The train, being 
delayed at St. Helen's Junction and Manchester, arrived at 
Leeds at 5.27, after the 5.20 train from Scarborough had left. 
There was another train at 8 p.m. which would arrive at Scar- 
borough at 10 p, m. 

(1) Hobbs v. Lon. & N. W. Ry. Co., L. R., 10 Q. B. m, 44 L. J. Q. 
B. 49 ; Le Blanche v. Lon. & N. W. Ry. Co., L. R., I C. P. D. 286, 45 L. 
J. C. P. 521 ; Hamlin . Great Northern Ry. Co., I H. & N. 408, 26 L. J. 
Ex. 20. 

(2) L, R., i C. P. D. 286, 45 L. J. C. P. 521 (C. A. 1876). 



340 THE RAILWAY LAW OF CANADA. 

The plaintiff ordered a special train to Scarborough at a cost 
of n.ios., and airived there at about 8.45. He brought an 
action in the County Court to recover the n.ios. The judge 
of the County Court gave judgment for the amount claimed. 

This judgment was affirmed by a Divisional Court of the Com- 
mon Pleas division, who held, first : that the facts and documents 
which formed the contract were the taking and granting of the 
ticket, the {time table and the conditions; secondly, that the 
defendants thereby contracted to make every reasonable effort to 
secure punctuality ; thirdly, that although a delay of a few minutes 
would not be evidence of a want of reasonable effort, yet a long 
unusual delay, such as had occurred at St. Helen's Junction and 
at Manchester, was evidence calling upon the company to show 
that it arose in spite of such reasonable effort, and that there was 
evidence that such delay was the cause of the plaintiffs missing 
the corresponding train at Leeds ; fourthly, that the cost of the 
special train was recoverable as damages. 

On appeal, the judgment of the court below was, on the first 
point, affirmed; on the second, affirmed (dissentiente, Cleasby, 
B.) ; on the third, affirmed (dissentiente, Baggallay, J. A.) ; and on 
the fourth, reversed. 

In Dent on v. Great Northern Railway Company, (i) it was 
held that the publication by the defendant's company in their 
time tables of a train on another line was a promise by the 
defendants to a person travelling by their line, and intending t 
go on, that there was such a train as advertised. In Great North- 
ern Railway Company v. Hawcroft, (2) the plaintiff bought a 
ticket which read : " Barnsley to London and back, excursion 
" ticket. To return by the trains advertised for that purpose on 
" any day not beyond 14 days from the date hereof." The plain- 
tiff presented himself on a Saturday within the 14 days at the 
London station in time for the morning return train. He was 
crowded out, and the defendants refused to let him proceed by 
an ordinary train. He had to wait till the evening train which 
took him to Doncaster, from which there was no other service to 
Barnsley on that day. The plaintiff hired a carriage from Don- 



(1) (1856) 5 El. & 151. 860, 25 L. J. Q. B. 129. 

(2) (1852) 21 L. J. Q. B. 178, 



CARRIERS. 341 

caster to Barnsley, and was held entitled to recover the expenses 
incurred. 

In Buckmaster v. Great Eastern Railway Company , (i) the 
plaintiff recovered the cost of a special train and damages for loss 
of market under the following conditions : He was a miller, and 
held a season ticket between Framlington and London, and used 
to go to the Mark Lane corn market twice a week by a train 
which departed at 6.45 a.m., and reached London at 10.40, in 
time for him to catch the market at n. On the occasion in 
question, the train, through negligence of the company's servants, 
was not ready to leave Framlington anywhere near the time 
advertised. He obtained a special train, but nevertheless missed 
the market. 

In Fitzgerald v. Midland Railway Company, (2) it was held 
that where a passenger fails to catch a train on the line of a 
company by reason of the ordinary train being delayed through 
no fault of the company, he is not entitled to have a special. 
In that case flood w as the cause of the delay. In Thompson v. 
Midland Railway Company, (3) a similar decision was given 
where the delay arose from the negligence of other companies. 

The general rule governing such cases would appear to be best 
stated by Brett, J., (4) glossing the language used by Alderson, B., 
in Hamlin v. Great Northern Raihv ay Company, (5) as follows : 
" We think it may properly be said that if the party bound to 
" perform a contract does not perform it, the other party may 
" do so for him as reasonably near as may be, and charge him 
" for the reasonable expense incurred in so doing ; " and by 
Blackburn, J., in Hobbs v. London & South Western Railway 
Company, (6) who there said : " Where there is a contract to 
-' supply a thing, and it is not supplied, the damages are the 
" difference between that which ought to have been supplied, 
" and that which you have to pay for, if it be equally good ; or 
" if the thing is not obtainable, the damages would be the differ- 
" ence between the thing you ought to have had and the best 



(i) (1870) 23 L. T. 471. (2) (1876; 34 L. T. 771. 

(3) (i875) 34 L. T. 34. 

(4) In Le Blanche v. Lon. & N.W. Ry. Co., L.R., I C. P. D. at pp. 302-3. 

(5) i H. & N. 408, 26 L. J. Ex. 20. 

(6) L. R., 10 Q. B. at pp. 119-20. 



342 THE RAILWAY LAW OF CANADA. 

" substitute you can get upon the occasion for the purpose." 
* * * Now, as I have said, what the passenger is entitled to 
" recover is the difference between what he ought to have had 
" and what he did have ; and when he is not able to get a con- 
" veyance at all, but has to make the journey on foot, I don't 
" see how you can have a better rule than that which the learned 
" judge gave to the jury here, namely, that the jury were to see 
" what was the inconvenience to the plaintiffs in having to walk, 
" as they could not get a carriage." 

The learned judge, however, held that no damages could be 
allowed on account of the female plaintiff having caught cold 
while walking home, as being too remote, (i) 

Limiting 25. There is no doubt that in regard to regular passengers the 

liability. company cannot relieve itself by any notice, condition or declara- 
tion, if the damage arises from any negligence or omission of the 
company or of its servants. (2) But the question arises as to 
the company's liability, and its power to limit the same., towards 
those who are travelling under special contract, such as on a free 
pass or at reduced rates, or in some special capacity on the cars. 
In a somewhat early Ontario case, (3) it was held that where a 
person was travelling on a free pass, upon the condition that he 
should assume the risk of accidents and damage, his heirs could 
not recover damages for his being killed by the giving way of a 
bridge over which he was passing in the train. (4) There is 
no doubt that the general tenor of the English law is to the same 
effect, (5) but it has often been held otherwise in the United 
States. (6) 

In Duff v. Great Northern Railway Company, (7) Palles, 
C. B., wished it to be observed that his judgment was based upon 
the fact that the person who actually travelled (as a drover) was 

(1) But see Toronto Ry. Co. v. Giinsled, 24 S. C. R. 570 ; and Thompson, 
Carriers of Passengers, 566. 

(2) Sec. 246, sub.-^ec. 3. 

(3) Sutherland v. The Great Western Ry. Co., 7 U. C. C. P. 409. 

(4) But see Woodruff v. G. W. Ry. Co., 18 U. C. Q. B. 420. 

(5) McCawley v. Furness Ry. Co., L. R., 8 Q. B. 57 ; Duffw. The Great 
Northern Ry. Co., 4 Ir. Law. Rep. 178 ; Gallin v. London & North Western 
Ry. Co., L. R., 10 Q. B. 212 ; Hall v. North Eastern Ry. Co., L. R., 10 Q. 
B.437. 

(6) Fedfield, Vol. 2, p. 236, note c. Hutchinson, 583-^4. 

(7) 4 Ir. Law Rep. 178. 



CARRIERS. 



343 



the person who signed the contract, (i) Had he been a 
different person, the connection of the drover with the contract 
might have involved a question of fact, and this might have been 
for the jury. This passage from the judgment of the learned 
Chief Baron would seem to throw doubt upon the holding in an 
Ontario case (2) involving this point. In this case C. & 
Co., news dealers, made a contract with the defendant com- 
pany whereby they should carry C. & Co., their news boys and 
agents on their trains, the company to be exempted from all 
liability for any injury to the persons or property of said C. 
& Co., their news boys and agents, whether occasioned by 
defendant's negligence or otherwise. Alexander, one of the news 
boys, while lawfully standing upon the platform of one of the 
company's stations, was struck by a piece of timber, which had 
been loaded so carelessly as to project over the platform. As the 
result of his injuries, he died. It was held that the administrator 
could not recover. That deceased must be taken to have accepted 
the terms on which the company agreed to carry him, whether 
aware of its terms or not. Draper, C. J., of appeal, however, dis- 
sented, and, we think, rightly. 

It is to be noticed in this case that the fact of the injury occur- 
ring off the train would not alter the company's liability. Where 
the company can exempt themselves from liability, such exemption 
extends not only during the actual transit on the railway, but 
whilst the passenger is upon any part of the railway company's 
premises. (3) 

36. Mere notices to the passenger are no more effectual for the Notice of 



purpose of limiting the liability of the carrier of passengers than I' 1 . 1 * 1 ' 011 of 
of the carrier of goods ; and where a document is complete on 
the face of it, but having on the back of it something which has 
not been brought to the knowledge of a contracting party, he 
cannot be held to have assented to that which he has not seen 
and of which he knows nothing. (4) The law as to notice of 



(1) But see The Railroad o. Lockwoo-l, 17 Wai 1 . 357. 

(2) Alexander v. Toronto & Nipissing Ry. Co., 33 U. C. Q. B. 474 ; 35 
U.C Q. B. 453 . 

(3) Gallin v. Tlie London & Northwestern Ry. Co., L. R., 10 Q. B. 
212'. 

(4) Henderson y. Stevenson, 2 Sc. App. 470 ; Bate y. C. P. Ry. Co., 18 
S. C. R. 697. 



344 THE RAILWAY LAW OF CANADA. 

conditions on passenger tickets has now been settled by the 
House of Lords in Richardson & Co. v. Rowntree (i) where 
it was held that if in the opinion of the jury a passenger receiving 
a ticket from a shipping company does not see or know that 
there are any conditions thereon, he is not bound by the condi- 
tions. And if he knew there was writing on the ticket, it is a 
question of fact whether he had reasonable notice that the 
writing contained conditions, and he is or is not bound thereby 
according as he has had such notice or not. 

Passengers' Baggage. 

Checks. 27. The next question to be considered is the liability of a 

railway company for baggage carried for passengers, either check- 
ed or unchecked. In the first place, as to checked baggage, it is 
provided bysec. 25oof the Act that checks shall be affixed to every 
parcel of baggage having a handle, loop or fixture of any kind, 
delivered to any agent or servant of the company for carriage, 
and a duplicate of the check must be given to the passenger. 
By sec. 251, if the check is refused, the company is liable to the 
passenger for a penalty of $8.00, recoverable in a civil action, and 
no fare can be collected from the passenger; and if he has paid 
his fare, it must be refunded. By sec. 252, any passenger who 
produces such a check can himself be a witness in any action or 
suit brought by him to prove the value of his baggage not 
delivered. Under the Civil Code of Quebec (2) the passenger 
is entitled to prove the contents and value of any piece of baggage 
delivered by him to a carrier, and lost or damaged. 

Personal 28. But the liability of the carrier in such cases is confined to 

personal baggage, as it is called, and he is not liable for articles 
of extraordinary value, such as large sums of money, gold, silver, 
jewels, precious stones, or articles of unusual value, unless the 
contents of the trunk or package and their value have been 
declared to the carrier before delivery. (3) Applying these 

(1) 6 R. 95 (1894), Parker v. S. E. Ry., L. R., 2 C. P. D. 416 approved. 

(2) C. C. 1677. 

(3) C. C. 1677 ; and see Cadwallader v. G. T. Ry. Co., 9 L. C. R. 169 ; 
and Robson v. Hooker, 3 L. C. J. 86 ; Bruty v. G. T. Ry. Co., 32 U. C. 
Q. B. 66; McCaffrey v. C. P. Ry. Co., i Man. 350; Macrow v. G. W. 
Ry. Co., L. R., 6 Q. B. 612 ; Mytton v. Midland Ry. Co., 28 L. J. Ex. 385 ; 
Phelps v. Lon. & N. W. Ry. Co., 34 L. J. C. P. 259 ; Cahill v. Lon. & N ' 
\V. Ry. Co., 30 L. J. C. P. 289, 31 L. J. C. P. 271. 



CARRIERS. 345 

principles, it is clear, in the first place, that the company will not 
be held liable for loss or injury occurring to any kind of baggage 
which was not personal to the traveller, such, for instance, as 
merchandise contained in a checked trunk. This is undoubted, 
and the doctrine has been extended to the case of commercial 
travellers carrying samples of merchandise in a trunk checked 
as ordinary baggage. This has been decided in Quebec in a 
case of Canadian Navigation Co. v. ffayes, (i) and followed in 
a late case of Packard v. C. P. R. Co. (2) In the latter case, 
the plaintiff was a commercial traveller, carrying samples for his 
firm, and he checked his trunk containing these samples as 
ordinary baggage. The trunk was destroyed by fire in an 
accident which occurred on the railway, and, in an action to 
recover, it was held that the company were not liable in such a 
case, as the articles contained in the trunk were not personal 
baggage. It was strongly contended in that case that the com- 
pany were liable, because the trunk was of a particular character 
known as a commercial traveller's trunk, which would necessarily 
call the attention of the agent or baggage master to the nature of 
its contents, and that having been checked with such knowledge, 
there was an implied contract on the part of the railway com- 
pany to carry it as such. This, however, was held to be of no 
avail, such implied contract not being binding upon the company, 
they being only liable where an express declaration of the con- 
tents and value of the articles was made before the delivery. (3) 
If, however, actual knowledge can be proved on the part of the 
baggage master or other servant of the railway of the nature of 
the goods carried, the fact of his receiving and checking it would 
make the company responsible in case of loss or damage. (4) 
But, to render the company responsible, it is necessary to posi- 
tively show actual knowledge that the articles carried are mer- 
chandise. It is not enough to show, as in the case of Packard v. 
C. P. R. Co., (5) that there was sufficient apparent upon 
the article itself to have directed attention to it, and to have 

(1) 19 L. C. J. 269, M. L. R., c S. C. 64. 

(2) M. L. R. 5 S. C. 64. 

(3) As to samples of merchandise carried under special conditions, see 
Dixon v. Rich. & Ont. Nav. Co., 18 S. C. R. 704. 

(4) Great Northern Ry. Co. v. Shepherd, 21 L. j. Ex. 286. 

(5) Ubi supra. 



346 THE RAILWAY LAW OF CANADA. 

caused the company's employees to have made inquiries, (i) 
This has been held in England in the case of Cahill v. London 
and Northwestern Ry. Co. (2) There, the plaintiff gave to a 
railway porter a box labelled " glass," and it was placed in the 
luggage van. It was lost, and the plaintiff sued to recover the 
value. The box contained merchandise only, and no personal 
baggage. It was contended by the plaintiff that the fact of the 
box being labelled "glass" was enough to indicate to the com- 
pany's servants that it contained merchandise, and that as they 
accepted it as such without further charge, they were liable. The 
action, however, was dismissed, and the remarks of Chief Justice 
Earle, in giving judgment in the Court of Common Pleas, are 
most apposite. " It seems to me," hs said, " that it would be 
introducing a rule most pernicious to public convenience, that a 
railway company, to avoid being fixed with liability which, 
according to their regulations, they do not intend to take, should 
be bound to make inquiries where a package is brought which 
appears likely to contain merchandise, and, if they do not make 
those inquiries, they should be taken to know the contents of 
such package." 

As to what would constitute personal baggage apart from 
merchandise, it may be laid down as a safe rule that all things 
which are general and customary for a passenger to carry for his 
use, and which are suited to his condition in life, would be 
regarded as personal baggage. Whatever a passenger takes with 
him for his personal use and convenience, and that is to be 
judged in relation to his habits or wants as a member of the 
particular class of society to which he belongs, either with a view 
to present necessities or any purpose for which the journey is 
undertaken, is to be regarded as personal baggage. (3) 

in Quebec a carrier has been held responsible for the loss of 
jewellery and such like articles contained in the trunk of a lady 
passenger, and which had been lost during the voyage, they 
being proved to be suitable to her condition in life, though of 
considerable value. (4) 

(1) Lee v. G. T. Ry. Co., 36 U. C. Q. B. 350. 

(2) 30 L. J. C. P. 289, 31 L. J. C. P. 271, 13 C B. N. S. 818. 

(3) Macrow v. G. W. Ry. Co., L. R., 6 Q. B. 612 ; Phelps v. Lon. & N. 
W. Ry. Co., 34 L. J. C. P. 259 ; Hudston v. Midland Ry. Co., 38 L. J. Q. B. 
213 ; Bruty v. G. T. Ry. Co., 32 U. C. Q. B. 66. 

(4) Woodward . Allan, I L. N. 458. 



CARRIERS. 347 

In Ontario, where the passenger, a carpenter by trade, had 
in his box, which was lost, a concertina, a rifle, a revolver, two 
gold chains, a locket, two gold rings, a silver pencil case, a 
sewing machine, and a quantity of tools of his trade, it was held 
that the articles in italics were personal baggage for which the 
carrier was responsible, but that the others were not; Wilson, f., 
however, dissenting as to the concertina, (i) In the United 
States, however, it has been held that a set of tools of reason- 
able worth may be considered part of the personal baggage of 
a carpenter or mechanic. (2) 

On the other hand, it has been held in England that a quantity 
of bedding carried in a trunk, consisting of six pairs of sheets 
and an equal number of blankets and quilts, was not personal 
luggage. This was in the case viMacrow v. Great Western Ry. 
Co, (3) There the plaintiff had given up his residence in Canada, 
and these articles were intended for the use of his household 
when he should have provided himself with a home in London. 
The trunk was lost, and he took action against the railway com- 
pany for the value of these articles. Chief Justice Cockburn said 
in that case that " the term ' ordinary luggage,' being confined 
" to what is personal to the passenger and carried for his use and 
" convenience, it follows that what is carried for the purpose of 
"business, such as merchandise or the like, or for larger or 
" ulterior purposes, such as articles of furniture or household 
" goods, would not come within the description of ordinary 
" luggage, unless accepted as such by the carrier. Now, though 
" we are far from saying that a pair of sheets or the like, taken by 
" a passenger for his own use on a journey, will not be consi- 
" dered as personal luggage, it appears to us that a quantity of 
" articles of this description, intended not for the use of the 
" traveller on the journey but for the use of his household, when 
" permanently settled, cannot be held to be so." 

In another case the pencil sketches of an artist placed in his 
portemanteau were held not to be part of his ordinary baggage, so 



(1) Bruty v. G. T. Ry. Co., 32 U. C. Q. B. 66. 

(2) Porterw. Hildebrand, 14 Perm. St. 129; Kinsas City Ry. Co. v. 
Morrison, 34 Kan. 502 ; Davis v. The Railroad, 10 How. Pr. 330. 

(3) L. R..6Q. B.6i 2 . 



348 THE RAILWAY LAW OF CANADA. 

as to enable them to be conveyed free of charge, (i) Again, title 
deeds of a client, which an attorney may be carrying with him to 
produce in court, would not be considered as personal baggage; 
nor would bank notes to a considerable amount carried in a bag 
to pay the expenses of the trial of a suit. (2) But otherwise, if 
the money is carried to pay travelling expenses not exceeding a 
reasonable amount. (3) It is, however, generally a question of 
fact as to what personal baggage is. 

Articles, which, under certain circumstances, could not be held 
to be personal baggage, might be so considered under different 
circumstances. So where a passenger carried in his bag small 
articles of no great value intended for presents to his friends at 
his destination, they might be considered as personal baggage, 
although not such articles as " travellers usually carry with them 
as part of their baggage." (4) 

In a Manitoba case, (5) it was held that silk dresses, petticoats 
and children's clothing might fairly be held to be personal 
baggage, and perhaps an opera glass. As to the latter class of 
goods, it was held in an early Quebec case, (6) that where the 
traveller is a ship master, common carriers will be held respons- 
ible for a dressing case, and for night glasses and telescopes, 
upon the presumption that he may reasonably have thought they 
would be useful to him in the course of his intended voyage across 
the Atlantic. Again, in the Manitoba case, two suits of gentle- 
man's clothing were held, under the circumstances of the case, 
not to be personal baggage, for the trunk containing them was 
carried as the baggage of the plaintiffs wife. Similarly, women's 
dresses carried in a man's trunk have been held not to be 
personal luggage, for which the carrier would be responsible. (7) 
Window curtains, blankets, cutlery, books, ornaments, etc., are 
not personal luggage. (8) 

(1) Mytton v. Midland Ry. Co., 28 L. J. Ex. 385. 

(2) Phelps v. Lon. & N. W. Ry. Co., 34 L. J. C. P. 259. 

(3) Merrill v. Grinnell, 30 N. Y. 594 ; Daffy v. Thompson, 4 E. D. 
Smith 178; 111. Central Ry. Co. v. Copeland, 24 111. 332. Schouler on 
Bails. &Car., 669. 

(4) Hudston v. Midland Ry. Co., L. R., 4 Q. B. 366 ; The Ionic, 5 Blatchf. 
C. C. 538 ; Davidson v. Can. Shipping Co., 19 R. L. 558, Q. R. I Q. B. 
298 ; Ivatt's Carriers No. 458. 

(5) McCaffrey v. C. P. -R., i Man. 350. 

(6) Cadwallader v. G. T. R., 9 L. C. R. 169. 

(7) Mississippi P. Ry. v. Kennedy, 41 Miss. 671. 
<8) McCaffrey v. C. P. R., I Man. 350. 



CARRIERS. 349 

In estimating the kind, quantity, and value of the baggage 
which is allowed to the passenger, it is fair to take into view 
whence he comes, whither he goes, and what is his occupation and 
social standing, (i) 

29. There is no doubt that the carrier is equally responsible for Unchecked 
unchecked baggage, whether it is put into the baggage car or is ba gg a S e - 
put into the passenger car, unless indeed such baggage is carried 
in the car contrary to the regulations properly published and 
brought to the knowledge of the passenger either actually or by 
presumption of law. The baggage is in the eye of the law in the 
custody of the company, even though carried by the passenger 
himself in the car, and they would be responsible for its loss 
as if it had been checked, though there is a modification of the 
carriers' liability as insurers in such a case. It was held in England, 
in the case of Bergheim v. G. E. R. Co. (2) that the carrier is 
only liable in case of negligence. " The company must be held 
liable as respects those goods as bailees for hire and contractors 
to carry, and therefore liable for loss or injury caused by negligence 
but not otherwise ; the company have in fact the same liability 
with respect to the carriage of those goods as they have with 
respect to the carriage of the passenger himself." (3) The 
doctrine was more correctly stated in a case of Talley v. Great 
Western Ry. Co. (4) per Willes, J., who said : " With respect 
" to articles which are not put in the usual luggage van, and of 
" which the entire control is not given to the carrier, but which 
" are placed in the carriage in which the passenger travel 5 , so 
" that he, and not the company's servant, has de facto the entire 
" control of them, the amount of care and diligence reasonably 
" necessary for their safe conveyance is in fact considerably 
" modified by the circumstance of their being, during that part 
" of the journey in which the passenger might under ordinary 
" circumstances be expected to be in the carriage, intended by 
" both parties to be under his personal inspection and care. 
" There is great force in the argument that when articles are 
" placed, with the assent of the passenger, in the same carriage 
{< with him,and so in fact remain in his own control and possession, 



(i) Schouler Bail. & Car., 671. (2) L."R.,3C.P. D. 22f. 

(3) Per Cotton L. J. at p 225. (4) L. R.,6 C. P. 44. 



350 THE RAILWAY LAW OF CANADA. 

" the wide liability of the common carrier, which is founded on 
" the bailment of the goods to him, and his being entrusted with 
il the entire possession of them, should not attach, because the 
" reasons which are the foundation of the liability do not exist. 
" In such cases, the obligation to take reasonable care seems 
" naturally to arise, so that when loss occurred, it would fall on 
" the company only in the case of negligence in some part of the 
" duty which pertained to them, and that in such a case, it was 
" an implied term in the contract of carriage that, in return for 
< l the convenience of having his luggage at hand, the passenger 
" should during the journey take such care of his own property 
" as might be expected from an ordinarily prudent man, and 
" should not by his own negligence expose it to more than 
11 ordinary risk of luggage carried in a passenger carriage, and 
" that the liability of the company was, under such circumstances, 
" modified by the implied condition that the passenger should 
" use reasonable care, and where the loss was caused by his 
" neglect to do so, and would not have happened without such 
" negligence, the company would not be responsible." (i) 

The opinions expressed in this case, and in those cited in the 
note, have been entirely concurred in by the House of Lords in 
the comparatively recent case of Great Western Railway Co. v. 
Bunch, (2) where the rule is laid down as follows : " A railway 
company accepting passengers' luggage to be carried in a 
carriage with the passenger enter into a contract as common 
carriers, subject to this modification, that, in respect of his inter- 
ference with their exclusive contro 1 of his luggage, the company 
are not liable for any loss or injury occurring during its transit, 
to which the act or default of the passenger has been contri- 
butory." And the reasoning in the Bergheim case (3) was 
disapproved. 

In this country the same rule prevails. In the Ontario case of 
Gamble v. The Great Western Railway Company, (4) Draper 
C. J., held that the only difference caused by the system of check- 



(1) And see Richards v. Lon., Brighton & South Coast Ry. Co., 18 L. J. 
C. I J . 251 ; Butcher v. Lon. & S. W. Ry. Co., 24 L. J. C. P. 137. 

(2) 13 App. Cas. 31, and at pp. 42 and 55. 

(3) Supra, p. 349. . 

(4) 24 U. C. Q. B. 407. 



CARRIERS. 351 

ing, as against the English system, was that the former was to be 
considered as an additional precaution to prevent the baggage 
from being given up to the wrong person, and the laws of this 
country and of England are the same as regards the railway 
company's liability. In the leading American case, (i) where 
the railway company were declared not liable for the loss of 
plaintiffs overcoat which he had taken into the car with him, it 
was pointed out that " the overcoat was not delivered into the 
possession or custody of the defendants, which is essential to 
their liability as carriers." But in this country, as in England, such 
delivery into the possession of the carrier is implied from the 
usual course of dealing in such cases, and Hagarty, J., in the 
Gamble case (2) said : " If defendants ordinarily permit pas- 
sengers to take articles of luggage into the carriage with them, 
making no objection, and not requiring them to surrender it into 
their servants' special charge, it is not easy to see why they should 
not be responsible." (3) 

In a Quebec case (4) it was held that a carrier is not liable 
for the loss or theft of an overcoat carried by a passenger in a 
steamboat, and placed by a passenger on a sofa in the eating 
saloon, while he was taking supper. And Monk, J., drew a dis- 
tinction between this case and the Ontario one quoted above, to 
the effect that in the latter case it was luggage that was lost and 
in this case it was an overcoat, which was a distinction of some 
moment. This was a case where the article, whether to be 
considered as baggage or not, could hardly be considered as 
within the control or under the charge of the carrier, but practi- 
cally entirely in the charge of the owner, and lost through his own 
negligence; though the case turned partly upon the point that 
the coat was not baggage. 

3O. Carriers are not only responsible for articles of baggage when 
received by them on their trains or vehicles, but for articles liability 
delivered to their proper officers or servants for carriage, even 
though, in the case of a railway, never actually placed upon the 
train. (5) So in England, it has been held that a railway company 



(1) Tower v. The Utica & Schenectady Railroad Co., 7 Hill (N.Y.) 47. 

(2) Supra, p. 350. (3) At p. 412. 

(4) Torrance v. The Richelieu Company, lo L. C. J. 335 (1866). 

(5) C. C. 1674; Lovell v. Lon., Chat. & Dover Ry. Co., 45 L. J. Q. B. 
476. 



352 THE RAILWAY LAW OF CANADA. 

is liable for the loss of baggage delivered to a porter who under- 
took to place it upon the train while the passenger was purchasing 
her ticket, and that the porter was a person held out by the rail- 
way company as authorized to receive baggage and other articles 
for transportation, and that the passenger was not personally 
bound to see the luggage placed upon the train ; and it having 
been lost or stolen, the company was liable, (i) 

And in a Quebec case it has been held that where a person in 
the employ of the carrier assumes the charge of baggage deliv- 
ered on board of a vessel, the carrier is liable for such baggage, 
though the person who received the baggage was there merely 
during the temporary absence of the officer whose duty it was to 
receive baggage. (2) And, similarly, where baggage was delivered 
to the company's policeman, at one of their depots, several hours 
before the departure of the train, it was held that the company 
were liable, in the absence of proof that the plaintiff had knowl- 
edge of the company's by-law declaring them not responsible 
for unchecked baggage. (3) 

Checks given for baggage are merely evidence of its having 
been received by the carrier, and its non-delivery, but do not of 
themselves establish the carrier's liability therefor. (4) In a 
Nova Scotia case (5) a passenger sued for the value of her 
trunk, which she alleged had been placed in the hands of the 
company's servants, and a check given her therefor. Defend- 
ants denied receipt of the trunk, and gave evidence that plain- 
tiff had received the check, not from them, but from the cabman 
who had driven her to the wharf. It was held that the case was 
one for a jury only, and not for the Court to decide. Checking 
is only an additional precaution to prevent the baggage being 
given to the wrong persons ; and the company will be liable as 
well for the loss of articles unchecked. (6) 

When 31. The generally recognized principle in England and in the 

liability United States is that the liability of the company ceases upon 
ceases. 

(1) Bunch v. G. W. Ry. Co., 13 App. Cas. 31. 

(2) Monison v. Richelieu & Ont. Nav. Co., 5 L. N. 71, S. C. 1882. 

(3) Tessier v. G. T. R., 3 R. L. 31 ; but see Welch v. Lon. & N. W 
Ry. Co., 34 W. R. 166. 

(4) Wood on Railways. Vol. 3, sec. 403. 

(5) Stimpson v. The New England & Nova Scotia S. S. Co., 3 Geld & 
Oxley 184. 

(6) Gamble v. G. W. Ry. Co., 24 U. C. Q. B. 407. 



CARRIERS. 



353 



the arrival of the train, and the expiration of a reasonable time 
given to the passenger to take delivery of his luggage, (i) The 
contract of the company with the passenger is to carry him and 
his luggage to the point of destination, and there deliver the bag- 
gage to him, and during such transit they are liable as common 
carriers for the safe carriage and delivery of the luggage ; but if 
the passenger, for his own convenience, chooses to leave the 
luggage at the station on the arrival of the train, they become 
merely depositaries, and liable only for negligence as ware- 
housemen or bailees. (2) 

"It is the duty of a railway company to have baggage ready 
for delivery on the platform at the usual place of delivery, until 
the owner, in the exercise of due diligence, can call and receive 
it ; and it is the owner's duty to call for and receive it within a 
reasonable time." (3) Where a passenger, on arriving at his 
destination, deliberately refrained from applying for his baggage 
on being told by his cabman that he could not conveniently take 
it, and on sending for it on the following morning, one of the 
three trunks could not be found ; it was held, on the above 
grounds, that the liability of the railway company as common 
carriers had ceased, and that the only claim (if any) which the 
'plaintiff, under the circumstances, had against the company 
was as warehousemen or bailees. (4) And, in a Manitoba case, 
where goods remained at the station at which a passenger 
alighted, but it did not appear that the railway company had 
charged, or was entitled to charge, for storage, it was held that 
the company were not liable as warehousemen. (5) 

The reasonable time to be given to the passenger for the 
taking away of his luggage would appear to depend upon such 
circumstances as the quantity of luggage, the number of people 
and the facilities afforded. In other words, the passenger must 



(1) 2 Redfield, 171 ; Richards v. Lon., Brighton & South Coast Ry. Co., 
:8 L. J. C. P. 251 ; Butcher v. Lon. & S. W. Ry. Co., 24 L. J. C. P. 137 ; 
Patscheider v. G. W. Ry. Co., L. R.,3 Ex. D. 153 ; Hodkinson r. Lon. & 
N.W. Ry.Co., L.R. nQ.B. D. 228; Fiithz-. N.E. Ry. Co., 36 W. R. 467. 

(2) C. C. 1799, 1802. 

(3) Redfield, Vol. 2, 171, No. 3;citing Ouimet u. Henshaw, 35 Vt. 605. 

(4) Vineberg v. G.T. R., 13 Ont. App.93; and see Penton v. G. T. R., 
28 U. C. Q. B. 367; Hoganz/. G. T. R.. 2 Q. L.R. 142; Hallz/. G. T.R., 
34 U.C. Q. B. 517; Kellertf. G. T. R.,' 22 L. C. J. 257. 

(5) McCaffrey v. C. P. Ry. Co., i Man. 350. 

2 3 



354 THE RAILWAY LAW OF CANADA. 

have time given him to secure a means of conveyance and ob- 
tain possession of his baggage, due regard being had to the 
quantity of baggage, the number of people, the size of the station, 
and so on. If, however, he voluntarily refrains from taking his 
baggage on the arrival of the train, and leaves it in the custody 
of the company, they would not be responsible, except in case 
of negligence. These principles have been generally recognized 
by the Quebec Courts, up to a very recent period. In an early 
case of Hogan v. G. T. Ry. Co. (i) Chief Justice Meredith, one 
of the most learned judges who has ever sat on the Bench of that 
Province, held that where a passenger did not call for his trunk 
on arriving at his destination at ten o'clock in the morning, but 
for his own convenience left it all day and over night in the bag- 
gage room, and it was destroyed by fire early the next morning 
by the accidental burning of the station, the -company were not 
responsible. This decision was followed in a late case of Kellert 
v. G. T. Ry. Co. (2) There the same doctrine was laid down, that 
the responsibility of carriers with regard to travellers' baggage 
ceases when the owner arrives at his destination, and without a 
new contiact between the traveller and the company to prolong 
the responsibility of the latter, the company are not liable for the 
loss of the baggage, this loss being attributable to the negligence 
of the traveller. The liability of common carriers is by the 
Quebec Code (3) assimilated to that of innkeepers, for the safe 
keeping of baggage and personal effects of travellers lodging in 
their houses ; and in similar circumstances to those just men- 
tioned, the Courts have modified the liability of the innkeeper, 
that is to say, that where the relations of innkeeper and guest 
cease to exist, the liability of the innkeeper for baggage left in 
his possession afterwards is assimilated to that existing in the case 
of a voluntary deposit. For instance, where a person comes to 
lodge in a hotel, bringing baggage with him, and on his depart- 
ure leaves his baggage in the hotel in the charge of the inn- 
keeper, and does not return to lodge there, the innkeeper is 
only liable in case of negligence, his responsibility being only to 
exercise the care of a prudent administrator, and not remaining 



(i) 2 Q. L. R. 142. (2) 22 L. C. J. 257. 

(3) C. C. 1672. 



CARRIERS. 355 

liable except in case of negligence, (i) In Ontario, the doctrine 
has been clearly recognized both with regard to railway com- 
panies as carriers of passengers' baggage, and to innkeepers. We 
might instance the case of Penton v. G. T. Ry. Co., (2) where 
a trunk was left by the passenger in charge of the baggageman 
from three o'clock to eight o'clock in the afternoon, and on his 
return was found to be missing. It was held that the company 
were not responsible, as their liability ceased when the trunk was 
placed on the platform, and a reasonable time had elapsed for 
the passenger to remove it. Again, in the late case of Vineberg 
v. G. T. Ry. Co., (3) where the passenger, upon the arrival of 
the train, refrained from applying for his baggage, and on send- 
ing for it the next day, one of his trunks could not be found, it 
was held that the liability of the company as carriers had 
ceased, and that the plaintiff's only claim (if any he had) against 
the company was as warehousemen or bailees. (4) The same 
principle is enunciated with regard to innkeepers in the case of 
Palin v. Reed. (5) There the plaintiff had been for some time 
a guest of the defendant, an innkeeper, and on leaving the inn, 
was allowed to leave a box containing papers, etc., in the bag- 
gage room of the hotel. On returning some days afterwards, the 
'box could not be found. There was no other evidence of ne- 
gligence. It was held that the plaintiff could not recover. 

There would seem to be no difference between the law 
in Ontario and in Quebec in this respect. In a very recent 
case, however, of Pellant v. C. P. R. Co., (6) the Superior 
Court of Quebec departed from this principle, and held 
that there was no difference between the liability of 
railway companies as carriers of passengers' baggage while in 
transit, and their liability as- warehousemen or depositaries after 
its arrival. There the plaintiff, on the arrival of her baggage at 
Montreal, ascertained that it had safely arrived, and allowed it 
to remain in the company's premises for over 24 hours. On 



(1) Holmes v. Moore, 17 L. C. R. 143., 

(2) 28 U. C. Q. B. 367. 

(3) 13 Ont. A. R. 93. 

(4) And see McMillan v. G. T. Ry. Co , 16 S. C. R. 555, per Strong, 
J. ; Chapman v. G. W. Ry. Co., L. R., 5 Q. B. D. 278. 

(5) 10 Ont. A. R. 63. 

(6) M. L. R., 7 S- C. 131. 



356 THE RAILWAY LAW OF CANADA. 

sending for it the following morning, and on production of her 
checks, it was found that one of the trunks was missing. The 
whole of the baggage had been placed in the company's baggage 
room, and was proved to have remained there as unclaimed bag- 
gage until a short time previous to being claimed. The com- 
pany, in order to rebut any presumption of negligence, proved the 
safety of the premises, and that one or more persons were con- 
tinually present in charge of the baggage; that it had not been 
missent to any other place, and could not have been taken away 
by mistake in exchange for other checked baggage, advancing 
the theory that it must have been stolen or taken away, notwith- 
standing all due care and diligence on the part of the company's 
servants. The Judge in the Superior Court held the company 
liable, and his decision might be supported on the ground that 
if, as appeared to be the case, the baggage was taken away dur- 
ing the day, it must have been through some fault or want of 
vigilance on the part of the men in charge of the baggage room; 
but the learned Judge laid down positively the principle that the 
company's liability as carriers existed until the actual delivery of 
the goods, and that the extent of their responsibility was the 
same as depositaries of the goods as it was while they were 
actually in transit on the railway., However, as the learned Judge 
took the view that, as carriers, the company would be excused 
in the event of an accident happening on the line without negli- 
gence on their part, such for instance as a fire,' it cannot be said 
that he applied to the company as depositaries a greater meas- 
ure of responsibility than he would have applied to them as car- 
riers ; in fact, he seems to have held that as carriers of the bag- 
gage, they would only have been liable in the case of negligence. 
This being the learned Judge's view, it might be well said that 
their responsibility as depositaries was not greater than that as 
carriers, but there seems to be little doubt that the jurisprud- 
ence is now well settled that their liability as cairiers does not 
depend upon the question of negligence, but is practically abso- 
lute. This judgment was confirmed in appeal, chiefly on the 
ground that negligence and want of proper care on the part of 
the company's servants in charge of the baggage room was 
proved. (r) 



(j) C. P.Ry. r. Pellant, Q. R. i Q. B. 311. 



CARRIERS. 357 

In a subsequent case it was held by the same judge, that where 
a transatlantic steamship company consented to keep travellers' 
baggage on arrival till examined by the customs officers, and 
placed it in their sheds, the contract of carnage was not ended until 
the examination was completed, and an opportunity given the 
passengers to take away their baggage ; and that the company 
were liable for a trunk 'ost pending the examination, (i) And 
this would be in accordance with the principle that a reasonable 
time must be allowed to take away baggage*. 

Where baggage has been found after suit has been issued, and 
has been accepted by the owner, the railway company is only res- 
ponsible for the taxable costs incurred up to date of delivery. (2) 

32. This subject has given rise to much discussion. A large Liability of 

number of decisions in the United States has resulted in rendering sleeping car 

companies, 
the law there fairly definite. 

In this country there are apparently but two decisions, one in 
the Province of Ontario, (3) the other in the Province of Que- 
bec. (4) 

In the United States the law on the subject is briefly stated 
as follows by the New York Law Journal ' : " While the company 
'is not liable as an insurer, it is bound to furnish sleeping passen- 
gers with reasonable protection against theft, as from the very 
nature of the contract between the parties, it was intended that 
the passengers should not remain capable of protecting them- 
selves." (5) The company is bound to have watch kept the 
entire night. (6) 

The almost universal rule is that sleeping car companies are 
not liable as common carriers, or innkeepers, but only for negli- 
gence, and that the burden is upon the plaintiff to offer some 
proof of negligence in addition to the fact of loss. (7) 



(i) Davidson v. Can. Shipping Co., 19 R. L. 558. Confirmed in appeal 
Q. R. I. Q. B. 298. 

(-2) Provencherr'. C. P. R., M. L. R., 58. C. 9. 

(3) Steam v. The Pullman Car Co., 8 O. R. 171. 

(4) Sise v. The Pullman Palace Car Co., Q. R., i S. C. 9, confirmed by 
the Court of Queen's Bench in Appeal, Pullman Car Co. v. Sise, Q. R., 3 
Q. B. 258. 

(5) Pullman Car Co. v. Gardner, 3 Pennypaker (Penn.) 78 ; Carpenter 
v. N. Y. N. II. &H. R. R. Co., 124 N. Y. 53. 

(6) Ib ; Blum v. Southern Pullman Car Co., 3 Cent. L. J. 591. 

(7) Pullman Palace Car Co. v. Low, 30 Cent. L. J. 245 ; Carpenter v. 
N. Y.N. H. & H. R.R.Co., 124 N. Y. 53. 



358 THE RAILWAY LAW OF CANADA. 

On the question of the measure of damage, it has been held 
that the responsibility extends only to a passenger's clothing and 
personal ornaments, the small articles of luggage usually carried in 
the hand, and a reasonable sum of money for travelling expenses, 
taking into consideration his circumstances in life. It certainly 
would be inequitable to the company to charge it with liability 
for any indefinitely large sum which a man may choose to carry 
with him and place under his pillow, (i) 

The two Missouri cases last cited hold, in addition to the pro- 
positions above laid down, that a passenger who leaves in his 
waistcoat, in his berth, a large sum of money, while he goes to 
the closet at the end of the car, is guilty of contributory negli- 
gence as a matter of law. If a passenger, before retiring, leaves 
his clothing and valuables in an empty berth directly above him, 
which upper berth he has not hired and does not control, it is 
not as a matter of law such contributory negligence as will bar 
recovery. (2) 

The whole gist of the matter in these sleeping car decisions 
is that the contract contemplates the passengers going to sleep, 
and that the company is therefore bound to take precautions to 
protect him from stealthy theft. If the passenger is awake, the 
ordinary rules as to the protection of his own property apply. On 
this point it has been held (3) where a passenger on a parlor 
car got off at a station for refreshments, leaving property on her 
seat which she did not put under the charge of defendant or its 
agents, and the same was stolen during her absence, that she 
was guilty of contributory negligence fatal to her action. 

Other cases have been decided in keeping with the foregoing 
jurisprudence. (4) 

In discussing this question from a practical point of view, it is 
evident that the question, as to whether sleeping car companies 
are or are not liable as common carriers or innkeepers, is not of 
such importance as the determining by the courts of the degree 
of negligence required to render the company responsible. 



(l) Blum r. Southern Pullman Car Co. , 3 Cent. L.J. 591 ; Root v. Sleep- 
ing Car Co., 28 Mo. App. 200 ; Wilson v, B. & O. R. R. Co., "2 Mo. App 
682. 

(2) Florida v, Pullman Car Co., 37 Mo. App. 598. 

(3) Whitney z: Pullman Palace Car Co , 143 Mass. 243. 

(4) Hampton v. Pullman Palace Car Co., 42 Mo. App. 134 ; Banott v. 
Pullman Palace Car Co., 51 Fed. Rep. 796. 



CARRIERS. 359 

For instance, in the Ontario case, (i) which based its deci- 
sion on the American cases, the question turned entirely upon 
the negligence of the company, and as the latter were held not 
to be insurers of the baggage, the burden of proof was upon 
plaintiff to show negligence on the part of the company. This 
he failed to do to the satisfactfon of the judges, as he could not 
prove any specific act of negligence. But in a New York 
case, (2) where the facts were exactly the same, as was appar- 
ently the law applicable to the case, the court said : " The un- 
disputable evidence is that the entire force employed on the 
sleeper, which ran over an important thoroughfare, and made 
frequent stops, was one man (as in the Ontario case) who acted 
as conductor, as porter, and was also engaged for his own profit 
in blackening the shoes of the passengers. Whether this em- 
ployee had that part of the sleeper, which is for the common use 
of passengers and the servants of the corporation, constantly 
in view during the trip is not shown by the evidence, except 
inferentially. These facts affirmatively appear, and in addition 
it may be presumed that he assisted passengers in entering and 
leaving the coach at intermediate stations. The existence of these 
facts was not denied, nor was any explanation of them offered. 
The defendant gave no evidence. Under the circumstances the 
evidence was sufficient to put the defendant to proof of the care 
which it took of the occupants of the sleeper on this trip, and in 
the absence of any explanation on its part it was sufficient to 
require the question, whether the loss was caused by the defen- 
dant's negligence to be submitted to the jury." 

It may be pertinently asked, why, in the United States, are all 
actions for losses in Pullman cars taken against the Pullman Car 
Company instead of the railway ? Is it because the railway 
company, with whom the contract of carriage is always made, 
would not be liable? This cannot be so, for it has been held 
by the Supreme Court of Massachusetts, (3) that if a person, 
who has made a contract with a railroad corporation for his per- 
sonal transportation from one place to another, takes a seat in a 
sleeping car, for which he had bought a ticket, and there loses an 



(1) Steam f. The Pullman Car Co., 8 O. R. 171. 

(2) Carpenter jy. The N. Y. N. H. & H. R. R. Co., 124. N. Y. 53. 

(3) Kinsley f. Lake Shore Railroad, 125 Mass. 54. 



360 THE RAILWAY LAW OK CANADA. 

article of personal baggage, through the negligence of a person 
in charge of the car, and without fault on his own part, it is no 
defence to an action against the corporation that the car was not 
owned by the defendant, but by a third person, who, by a con- 
tract with the defendant, provided conductors and servants ; in 
the absence of evidence, that the plaintiff had knowledge of the 
fact. 

The answer to the question lies in this : that in the United 
States a railroad corporation is not liable as a common carrier 
for an article of personal baggage kept by a passenger exclusively 
within his own control, (i) The contrary, of course, is the 
rule in England. (2) Consequently, actions in the former 
country have invariably been taken against the sleeping car 
company with a view to fixing upon them a special liability as 
innkeepers ; but this contention has only been maintained in 
about one instance. (3) 

We explained in a previous part of this work (4) the rule 
applicable to the common law provinces of this country is that 
laid down in the Great Western Railway Co. v. Bunch. (5) 

Once these views are accepted here, the question as to whether 
sleeping car companies are liable as innkeepers or carriers will 
not have much practi -al interest in actions by passengers for the 
loss of their baggage. 

In Quebec, however, the question as to whether sleeping car 
companies are liable as innkeepers or not takes a different interest, 
for there the term innkeeper must be interpreted according to 
the civii law authorities. The case of Sise v. The I'tiUman 
Palace Car Co. (6) decided that sleeping car companies are 
liable as innkeepers. 

In appeal, the Sis', case was confirmed, but, on the grounds of 
negligence, the Court avoiding the question as to whether tha 
company were innkeepers. (7) In a French case, (8) decided 



(1) See Sttpra,\>. 351, and Kinsley v. Lake Shore Railroad, 125 Mass. 54. 

(2) Great Western Ry. Co. v. Bunch, 13 App. Cas. 31. 

(3) Pullman Palace Car Co. i\ Lowe, Supreme Ct. of Nebraska, Max- 
well. J., 1889, Amer. Law Register, 1890, p. 251. 

(4) Supra, p. 350. (5) Ubisupra. (6) Q. R., I S. C. 9. 

(7) Pullman Car Co r. Sise, Q. R., 3 Q. B. 258. 

(8) Compagnie des Wagons-L'ts v. Epoux Barthelemy, Tribunal Civil de 
la Seine, 14 Mai 1892, translated in I M. L. D. & R. 323. 



CARRIERS. 361 

about the same time as the Sise case was decided in the Superior 
Court, it was held that such companies were not liable as inn- 
keepers ; and it is interesting to note that this case is now before 
the Court of Cassation. The decision of this Court will, no 
doubt, have much weight in moulding the future jurisprudence 
of Quebec on this point. The French case, however, decided 
that the sleeping car company were common carriers, acting in 
concert with the railway company whose lines and traction they 
hired. 

33. There is no doubt that however much railway companies Limiting 
may limit the amount of baggage that travellers may take as such, 
and the sum for which they will be liable thereon, yet the liability 
will be controlled by sub section 3 of sec. 246 of The Railway Act, 
and the decision of G. T. Ry. Co. v.Vogel, (i) but just to what 
extent has not yet been decided by any reported cases, although 
the point was barely touched upon in Shaw v. C. P. R. Co. (2) 
It was there decided that the section of the Act probably intro- 
duces an implied term in contracts to which it is applicable. 

Special conditions on tickets must be brought to the notice of 
the purchasers thereof to bind them. (3) Thus, where the agent 
Obtained the plaintiff's signature, explaining that it was for the 
purpose of identification, but did not read nor explain to her any 
of the conditions, and having sore eyes at the time, she was 
unable to read them herself, it was held that she had not had 
notice of the conditions. (4) And, as to the evidence in such 
cases, it has been held proper to admit a letter written by the 
defendants' baggage agent to the passenger agent, asking whether 
plaintiff's attention had been called to the condition on the ticket> 
and why it had not been signed by her, and the reply thereto, 
stating that the company's rules did not require unlimited first- 
class tickets signed, and that this ticket had been sold at full tariff 
rate. (5) 

The company will not be held liable for loss of baggage where 

(1) ii S. C. R. 613. 

(2) 5 Man. 334. 

(3) Richardson, Spence & Co. r. Rowntree 6 R. 95 (1894); Bate v. C. 
P. R., 18 S. C. R. 697 ; Allan v. Woodward, 22 L. C. J . 315, Q. B. 

(4) Bate v. C. P. R , 18 S. C. R. 697. 

(5) Andersons. C. P. R., 17 O. R. 747. 



362 



THE RAILWAY LAW OF CANADA. 



Prescription 
or limitation 
of actions. 



a commercial traveller, whose ticket was issued at a reduced rate, 
caused trunks to be checked which did not constitute his bag- 
gage proper, but contained samples, the ticket containing the 
condition that in view of the reduced rate the company would 
not hold themselves responsible for loss of goods or merchandise 
carried by the travellers, (i) But where the condition of the ticket 
issued to commercial travellers was "with allowance of 300 Ibs. 
of baggage free, but the baggage must be at the owner's risk 
against all casualties," it was held by the Supreme Court, that 
though the goods lost were in one sense merchandise, they were to 
be treated as the personal baggage of a person in the position of 
the plaintiff travelling with samples in the course of his business ; 
but the company were protected by the condition. (2) 

34. The one year's limitation clause, under sec. 287 of the Act 
does not apply to actions for loss of baggage arising out of con- 
tract, but only to actions for damages occasioned by the com- 
pany in the execution of the powers given, or assumed by them 
to be given, for enabling them to maintain their railway, jfc) () 



(1) Packard v. C. P. Ry. Co., M. L. R., 5 S. C. 64. 

(2) Dixon 7'. Rich. Nav. Co., iSS.C. R. 704, affirming 15 Ont. A. R. 647. 

(3) Andenon v. C. P. Ry. Co., 17 O. R. 747. 



CHAPTER XL 
NEGLIGENCE. 



+s I . Rule in the Provinces other than 

Quebec. 

\/ 2. Illustrations of remote negli- 
gence. 

v/ 3. Subsequently developed injuries. 
^4. Acts of God. 

5, Acts of agents and servants. 
</ 6. Non-performance of statutory 

duty. 
/ 7. Contributory negligence. 

8. Injuries received while avoiding 

danger and inconveniences. 

9. Children, etc. 

i o , Negligence of parents . 

II. Intoxication. 
,J 12. Burden of proof . 
^13. Presumption of negligence. 

14. T 1 ,^? Court and the jury. 

15. 7">fo /#7t' 0/" negligence in the 

Province of Quebec. 



\/l6. Injuries to per sons on the railway 
track . 

17. Obstructing and interrupting 

free use of railway. 

18. Injuries to employees. 
^ 19. Volenti non fit injuria. 

20. Special provisions for the pro- 

tection of employees. 

21. Investigation into accidents. 

22. Cattle injured or killed on the 

railway. 

23. Burden of proof . 

24. Cattle at large on the highway . 

25. By-laius allowing cattle to run 

at large. 

J 26. Damage by fire. 
J 27. Evidence in such cases. 

28, Rule in the Province of Quebec 
as to damage by fire . 



1. As regards the English law of actionable negligence, the R u i e in the 

following definition of that term by Brett, M. R., (i) is submitted Provinces 

other than 
as expressing most completely its essential elements : Quebec. 

" The neglect of the use of ordinary care or skill toward a per- 
son to whom the defendant owes the duty of observing ordinary 
care and skill, by which neglect the plaintiff, without contribu- 
tory negligence on his part, has suffered injury to his person or 
property. " 

It will be seen that in view of this and other definitions to the 
same effect, distinctions as to the various degrees of negligence 
are immaterial. It is indifferent whether the want of care upon 



(i) Heaven v. Fender, L. R. 11 Q. B.U. at p. 507. 



364 THE RAILWAY LAW OF CANADA. 

which the action is based amounts to slight or gross negligence, 
so long as there is an obligation to exercise that care, the want of 
which is the cause of injury, (i) As was said by Lord Cranworth, 
there is " no difference between negligence and gross negligence ; 
it is the same thing, with the addition of a vituperative epi- 
thet." (2) 

But it is also necessary, in order that the negligence should be 
actionable, that it should be the proximate and not the remote 
cause of the injury to the plaintiff. (3) In the case of Victorian 
Railway Commissioners v. Coultas (4) in the Privy Council, it was 
decided that damages for a nervous shock or mental injury 
caused by fright at an impending collision are too remote. (5) 
Pollock, C. B., in Greenland \. Chaplin (6) expressed the view 
that a person is expected to anticipate and guard against all 
reasonable consequences, but that he is not, by the law of 
England, expected to anticipate and guard against that which 
no reasonable man would expect, to occur. 

Illustrations 2. The following are cases in which the negligence proven wa? 

of remote \\t\& not to be the proximate cause of the injury, 
negligence, 

A railway having unlawfully obstructed a highway crossing by 

a train at rest, the plaintiff, in order to avoid the obstruction, 
turned into another street, and there was injured by falling ice. 
(7) The iaii\vay had permitted a derailed and overturned car 
to remain at the side of a highway crossing, and the plaintiff's 
horse was frightened thereby. (8) Where the railway obstructed 
a highway crossing by a -train, and the plaintiff, in avoiding the 
obstruction by driving across the line, at a point where there was 
no public crossing, and, consequently, no planking between the 
rails, was jolted out of his vehicle and thereby injured. (9) Where 

(1) Lord Denman, 2 Q. B. 66 1. 

(2) Kolfe B., u M. &W. 115. 

(3) Lord Bacon, Max. Reg. I ; G. T. Ry. Co.v. Rosenberger, 9 S. C. R. 
311; Metropolitan Ry. Co. r 1 . Jackson, L. R., 3 App. Cas. 198 ; Canada 
Southern Ry. r. Phelps, 14 S. C. R. 132. 

(4) M A PP- Cas - 222 - 

(5) And for the same rale in Quebec, se: Rock v. Denis, M. L. R., 4 

S. C. 134, 16 R. L. 569. 

(6) 5 Ex. 243. 

(7) P. C. & St. L. Ry. Co. v. Slaley, 41 Ohio St. 118. 

(8) P. S. Ry. v. Taylor. 104 Penn St. 306. 

(9) Jackson r. N. C. & St. L. Ry., 13 Lea (Tenn.) 491. 



NEGLIGENCE. 365 

the carriage in which the passenger was riding was overcrowded, 
other persons attempted at a station to force their way into the 
carriage, and the plaintiff having risen to prevent their entrance 
as the train started, in order to save himself from falling, put his 
hand on the edge of the door, where it was caught and crushed 
by the act of the railway's servant in closing the door, in per- 
formance of his duty, (i) Where the railway set down the plain- 
tiff and his wife and children at night in a rain storm, at a station 
several miles distant from that to which it had agreed to carry 
them, and the wife contracted a severe illness from walking in the 
storm. (2) 

3. The general rule is that railway companies are liable for sub- Subsequently 
sequently developed injuries that cannot be proved to have re- . e . v . P ed 
suited from a sufficient independent cause, (3) as, when a 
prematuie confinement and birth of a dead child resulted from 

fright caused to a pregnant female passenger by a collision. (4) 

4. The mere fact that a natural phenomenon has happened Acts of God. 
once, when it does not carry with it or import any probability of 

a recurrence, does not place it out of the operation of the rule of 
law with regard to the act of God. It is not necessary that it 
be unique, that it should happen for the first time. It is enough 
should that it is extraordinary, and such as could not necessarily 
be anticipated. (5) But where there is negligence on the part of 
the railway company conducive to the injury in connection with 
an extraordinary natural phenomenon, the railway company 
would be responsible. (6) 

5. The relation between the railway company and the person Acts of agents 
who has omitted to perform a particular act of care is immaterial and servants - 
where the duty of the company towards the injured person re- 
quired it to be performed for his protection : the liability is deter- 
mined by the fact of the omission. (7) But where the injury is 

(1) Metropolitan Ry. Co. v. Jackson, 3 App. Cas. 193. 

(2) Hobbs v. London & South Western Ry. Co., L. R., 10 Q. B . 1 1 1 ; but 
see Toronto Ry. Co. v . Grinsted, 24 S. C. R. 570. 

(3) Robinsons. C. P. Ry. Co., M. L. R., 2 Q. B. 25. 

(4) Fitzpatrickf. G. W. Ry. Co., 12 U, C. Q. B. 645. 

(5) Per Fry J. in N. P. &O. C. M. Co. v. L. & St. K. Docks Co., 
L. R-.gCh. D. 515. 

(6) Lambkin v. South Eastern Ry. Co., 5 App. Cas. 352. 

(7) Per Blackburn, J., in The Mersey Dock Trustees v. Gibbs, L. R., I 
H. L. 115. 



366 THE RAILWAY LAW OF CANADA. 

caused by an overt act of commission, the liability depends upon 
the relationship of the person committing the wrongful act, and 
the company, and the application of the maxim, quifacitfer 
al turn facit per se. (r) So where a stranger put a fog signal on 
the track, and a passenger was injured by an explosion, the com- 
pany was held not liable. (2) 

But where the proximate cause of the injury is the negligence 
of the railway company, the fact that the negligent act of a 
third party contributed to the injury will not exempt the com- 
pany from responsibility. (3) 

Non-perform- 6. Where there is a duty cast upon a railway company, by 
:e of statu- s t a t u te, the company are responsible for injury directly resulting 
from neglect of such duty : or at least a failure to comply with 
the provisions of the statute, or even of a municipal ordinance, 
is evidence of negligence ; but where the injuries do not directly 
result from neglect of such duty, the company would not be 
responsible merely because of such neglect. (4) 

As illustrating the application of these principles the fol- 
lowing cases may be referred to. At a place which was not a 
station nor a highway crossing, theN. B. Railway Company had a 
siding for loading lumber delivered from a saw mill and piled 
upon a platform. The deceased was at the platform with a 
team for the purpose of taking away some lumber, when a train, 
coming out of a cutting, frightened the horses, which dragged 
the deceased to the main track, where he was killed by the 



(1) Reedie v . L. & N. W. Ry. Co., 4 Ex. 243. 

(2) Jones r. G. T. R., 45 U. C. Q. B. 193. 

(3) Illidge i'. Goodwin, 5 C. & P. 190 ; Lynch v. Nurdin, i Q. B. 29 ; 
Daniels v. Potter, 4 C. & P. 262 ; Hughes v. Macfie, 2 H. & C. 744 ; Col- 
lins v. M. I,. Commrs, L. R.,4C. P. 279 ; Sneesby v. L. & Y. Ry., L. R., I 
D. 42 ; Clark v. Chambers, L. R., 3 Q. B. D 327 ; Smith r. L. & S. W. 
Ry., L. R., 5 C. P. 98 ; Burrows v. March, G. & C. Co., L. R., 5 Ex. 67, 7 
Ex. 96 : Watling e r . Oastter, L. R., 6 Ex. 73. 

(4) Williams v. G. W. Ry., L. R.,9Ex. 157; Hayes 7'. M.C. R. R., in 
U. S. 228 ; Nitro Phosphate Co. v. L. S. & St. K. Co., L. R., 9 Ch. D. 503 ; 
Atkinson v. N. & G. Water Works Co., L. R., 2 Ex. D. 441 ; Hanlon v. S. 
B. H. Ry. Co., 129 Mass. 310 ; Kelley z>. H. & St. J. Ry. Co., 13 Am. & 
Eng. Ry. Cases 638 ; Meek v. Penna. Co., ibid. 643 ; Great Western Ry. 
7. Brown, 3 S. C. R. 159; G. T. R. i'. Rosenberger, 9 S. C. R. 311 ; G. 
T. R. v. Sibbald; G. T. R. v. Tremayne, 20 S. C. R. 259 ; Couch v. 
Steel, 3 E. & B. 402 ; Blamires v. L. & Y. Ry., L. R., 8 Ex. 283 ; Britton 
v. G. W. Cotton Co., L. R., 7 Ex. 130 ; Stapley v. L. B. & S. C. Ry., L. 
R., i Ex. 21. 



NEGLIGENCE. 367 

train. It was held that there was no duty upon the company 
under the statute to ring the bell or sound the whistle, or to 
take special precautions in approaching or passing the siding. 

CO 

As another instance of a similar accident may be mentioned 
the case of Howe v. Hamilton & North Western Ry. Co., 
(2) where the Court of Appeals in Ontario decided that a rail- 
way company was not responsible for an accident caused by a 
horse taking fright at an engine standing near a crossing of a 
public road, where the company had been empowered by the 
corporation to run their railway along the highway, there being 
no proof of negligence on the part of the railway company in 
the management of the locomotive. And the same doctrine 
was upheld in a case in Quebec, (3) where a horse took fright at 
the escape of steam from a locomotive standing on one of the 
wharves at Quebec, and was killed ; the Court holding that the 
escape of steam was without negligence on the part of the driver 
or person in charge of the engine, and was a necessary conse- 
quence of the exercise of the powers of the railway company, and 
the engine being lawfully where it was under the charter of the 
Company, and the permission given by the City Council to con- 
struct and operate the railway at that point. 

But where the railway company had erected posts on their line 
at some distance from a highway crossing and bridge, for the pur- 
pose of indicating that trains should stop there before approach- 
ing the bridge, and a train, instead of stopping at the posts, came 
on to within a few yards of the bridge, and the engine remained 
there blowing off steam, whereby the plaintiff's horses, attempting 
to cross the bridge, were frightened and ran away, the company 
were held liable for the ensuing damage. (4) 



(1) New Brunswick Ry. Co. v. Vanwart, 17 S. C. R. 35 ; and see C. P. 
R. v. Lawson, Supreme Court 1885, Cassels, p. 731 ; G. T. R. v. Boulanger, 
Supreme Court 1 886, Cassels, p. 734 ; G. T. R. v. Beckett, 16 S. C. R. 713 ; 
Can. Southern Ry. Co. v. Jackson, 17 S. C. R. 316 ; Jones v. G. T. R., 18 
S. C. R. 696. 

(2) 3 Ont.A. R. 336. 

(3) C. P. R.Co. v. Chateauvert, 16 R. L. 28. 

(4) C. P. R. Co. v. Lawson, Cass. Dig. 731 ; and see G. T. R. Co. v. 
Ro-enburger, 9 S. C. R. 311. 



368 THE RAILWAY LAW OF CANADA. 

Contributory 7. Where the person injured has contributed to the injury by 
negligence. f a ji ure to exercise ordinary care, to such an extent that the 
accident would not otherwise have happened, the railway 
company would not be held responsible for such injury, (i) 
The obligation to exercise ordinary care by the injured party 
depends upon the particular facts and circumstances of each case. 
So he is not bound to exercise the same degree of care, when 
he has been induced by the action of the company's servants to 
act in a manner he would otherwise not have done, a?, for 
instance, where the railway company have by their servants in- 
vited a passenger to embark on a train when it was not safe to 
so embark. (2) Although negligence upon the part of the plain- 
tiff may have in fact contributed to his injury, the railway com- 
pany will nevertheless be liable, if its servants could by the 
exercise of ordinary care have avoided the injury to the plain- 
tiff. (3) The plaintiff's contributory negligence must, in order to 
bar his recovery, have been a proximate cause of the injury. (4) 
Injuries 8. A railway.company is liable for injuries suffered by a person 

received while m attempting to escape from a situation of apparent peril, in 
danger and which he has been placed by the negligence of the railway com- 
inconvenien- pany, whereby he is forced to adopt one of two perilous alter- 
natives (5) ; as well as for injuries occasioned to a person in 
attempting to avoid a serious inconvenience to him by acting in 
a manner not necessarily dangerous ; (6) but not for injury to a 
person attempting to avoid a slight inconvenience by a rash and 
dangerous action. (7) 

Children, etc. 0. Lunatics, idiots and children are to be held only to the 
exercise of that degree of care and discretion which ought reason- 
ably to be expected of persons of their age and capacity. (8) The 
general rule is that it is a question of fact, under the particular 

(1) ButteifiekU 1 . Forrester, n East 60 ; Bridge r. Grand Junction Ry. Co., 
3 M. & W. 244; Moffette v. G. T. R. Co., 16 L. C. R. 231 ; Roy v. G. T. 
R. Co., M. L. R., i Q. B-. 353. 

(2) Hall 7-. McFadden, Cassel's Digest 724. 

(3) Davies v. Mann, lo M. & W. 546 ; Radlay v. L. & N. W. Ry., i App. 
Cae. 754. 

(4) Witherly r. Regent Canal Co., 12 C. B. N. S. 2. 

(5) Jones i'. Boyce, I Starkie 493; Wilson r. Newport Dock Co., L. R., 
i Ex. 177; Adams r. Lan. & Yorkshire Ry. Co., L. R., 4 C. P. 743. 

(6) Adams r. Lancashire & Yorkshire Ry. Co., L. R., 4 C. P. 739. 

(7) Bramwell, J., in Siner v. G. W. Ry., L. R., 3 Ex. 154; Gee v. 
Metropolitan Ry. Co., L. R., 8 Q. B. 161. 

(8) Lynch r. Nurdin, I Q. B . 29. 



NEGLIGENCE. 369 

circumstances of each case, what amount of reason and discre- 
tion ought to have been exercised by the injured infant ; (i) but 
where the injured person is confessedly of average capacity, and 
an infant only in legal theory, it is a question of law for the court 
and not one of fact for the jury. (2) 

10, When the injured person is an infant of tender years, it is Negligence 
held in the United States that it is for the jury and not for the of P arents - 
court to determine whether or not the contributory negligence 

of the parents or guardians of the infant, in permitting him or 
her to be at large, would defeat the action. (3) The question 
does not seem to have been directly raised in England, neither 
Lynch v. Nurdin, (4) Singleton v. E. C. Ry., (5) Mangan v. 
Atterton, (6) nor Waite v. N. E. Ry., (7) definitely decide 
the question. But in Quebec the parents' negligence has been 
held to preclude recovery of damages. (8) 

11. The fact of the intoxication of the injured person at the time Intoxication, 
of the injury will not only not relieve him from the legal conse- 
quences of his contributory negligence, but also, if his intoxicated 

state contributed to the happening of the injury, will be admiss- 
ible in evidence as proof of contributory negligence. (9) 

4-2. The burden of proof is upon the plaintiff of showing affirm- Burden of 
atively negligence upon the part of the railway. (10) And in regard P roof - 
to contributory negligence, the English rule is, that if the plaintiffs 
case has shown the railway to have been negligent, and the rail- 
way relies upon contributory negligence as a defence, the burden 
is on the railway of proving that contributory negligence, (n) 

(1) Patterson Ry. Accidt. Law, p. 69. 

(2) Ib., pp. 70 71. (3) Patterson, p. 90. (4) r Q. B. 29. 
(5) 7C.B. N. S. 287. (6) L. R., i Ex. 239. (7) El. Bl. & El. 719. 

(8) M. C. P. Ry. Co. r. Dufresne, M. L. R., 7 Q. B. 214. 

(9) Patterson, Rly. Accdt. Law 74, and cases there cited. 

(10) Patterson, 433, Roy r. G.T. R., M. L. R., r Q. B. 353 ; Moffettew. 
G. T. Ry. Co. 16 L. C. R. 231. Falconer v. European & North Amer. Ry. 
Co., i Pug 179. 

(11) Smith on Negligence Patterson 435 ; D. W. & W. Ry. v. Slattery, 
3 App. Cas. 115$. But in Quebec, see Moffette "'. G. T. R}'. Co., 16 L. C. 
R. 231. In Ontario held ; In an action to recover damages for negligence, tried 
with a jury, where contributory negligence is set up as a defence, the onus of 
proof of the two issues is respectively upon the plaintiff and defendant, and 
though the judge may rule negatively that there is no evidence to go to the 
jury on either issue, he cannot declare affirmatively that either is proved. 
The question of proof is for the jury. Morrow v. Can. Pac. Ry. 3 21 Ont. 

A. R. 149. 

24 



370 THE RAILWAY LAW OF CANADA. 

Presumption 13. There is a rebuttable presumption of negligence on the part 
neg igence. ^ ^ ra jj wa y j n tne case o f an injury caused by circumstances 
from which may fairly be inferred a non-performance of duty on 
the part of the railway, (i) 

The Court 14. It is the duty of the judge to determine whether, as to each 

and the jury. j ssue before the jury, competent evidence has been produced, 

which would justify men of reasonable minds in finding a verdict 

in favor of the party upon whom rests the burden of proof in 

that particular issue. (2) 

In Ryder v. Wombwell, (3) Willes, J., said : " There is in 
every case a preliminary question which is one of law, viz. : 
whether there is any evidence on which the jury could properly 
find the question for the party on whom the onus of proof lies. 
If there is not, the judge ought to withdraw the question from 
the jury, and direct a non-suit if the onus is on the plaintiff, or 
direct a verdict for the plaintiff if the onus is on the defendant." 
In Bridges v. N. L. Ry., (4) Pollock, B., said, referring to 
Ryder v. Womb w ell : "This is a clear expression of the rule, 
and it has been generally acquiesced in, and acted upon, and it 
follows from it that, although the question of negligence or no 
negligence is usually one of pure fact, and, therefore, for the 
jury, it is the duty of the judge to keep in view a distinct legal 
definition of negligence as applicable to the particular case, and 
if the facts proved by the plaintiff do not, whatever view can be 
reasonably taken of them, or inference drawn from them by the 
jurors, present a hypothesis which comes within that legal defini- 
tion, then to withdraw them from their consideration." ^Jack- 
son v. Metropolitan Ry., (5) Cairns, L. C., and Lords O'Hagan, 
Blackburn and Gordon concurred in holding that Bridges' case 
did not have the effect attributed to it in the Court below, of 
qualifying the rule in Ryder v. Wombwell, Cairns, L. C., say- 
ing : "The judge has a certain duty to discharge, and the jury 

(1) Patterson 438, Carpue v. L. & B. Ry., 5 Q. B. 747 ; Scott r-. L. & 
St. K. Docks Co., 3 H. & C. 596 ; G. W. Ky. Co. r. Braid, i Moore P. 
C. N. S. 101 ; Chalifoux v. C. P. Ry. Co., 22 S. C. R. 721. 

(2) G. T. R. v. Wilson, Cassel's Dig., p. 723; Can. All. Ry. Co. v. Mo- 
seley, 15 S. C. R. 145. 

(3) L. R., 4 Ex. 32. (4) L. R., 7 II. L. 213. 

(5) 3 A PP- Cas. 193 ; and see Dublin W . & W. Ry. Co. v. Slattery, 3 App. 
Cas. 1155. 



NEGLIGENCE. 371 

" have another and a different duty. The judge has to say 
" whether any facts have been established by evidence from which 
"negligence may be reasonably inferred; the jurors have to say 
" whether from those facts, when submitted to them, negligence 
" ought to be inferred." 

15, In so far as concerns the duty a person owes of observing The law of 

ordinary care and skill in his relations towards others, the law of ne gHgence in 
* ' . the Province 

negligence in the Province of Quebec does not materially differ c f Quebec. 

from the rule prevailing in the other Provinces, (i) 

The diversion between the two systems commences with the 
doctrine of contributory negligence. In the earlier cases, before 
the Code, the English doctrine of contributory negligence was 
fully recognized; but, since the Code has come into force, 
especially of late years, there has been a disposition on the part 
of the Courts to adopt the jurisprudence of the French Courts in 
interpreting the articles of the Code Napoleon on the same sub- 
ject. It must be remarked, however, that there is a distinction 
to be made between Article 1053 of the Quebec Code and Article 
1382 of the Code Napoleon. Article 1053 of the Quebec Code 
reads as follows : 

" Every person capable of discerning right from wrong is 
responsible for the damage caused by his fault to another, whether 
by positive act, imprudence, neglect, or want of skill," whereas, 
in the French Code, the governing words " by his fault " are 
omitted. 

The earliest case of importance in Quebec is that of Moffette v. 
Grand Trunk Ry. Co., (2) decided by the Superior Court in 
Review in 1866. This was a case of injury at a highway crossing. 
The holding there was that the party suing in damages, resulting 
from imputed fault or negligence on the part of the defendant, 
must himself be without any misconduct or fault, and have used 
ordinary care ; and that where an injury has resulted from the 
negligence of both parties, more especially if without any wanton 
or intentional wrong on the part of either, the action will not lie ; 



(i) Stephens v. Chausse, 15 S. . R. 379; G. T. R. v. Boulanger, Cass. 
Dig. 734; C. P. R. Co. v. Chalifoux, Cass. Dig. 749; Lambkin v. South 
Eastern Ry. Co., 5 App. Cas. 352. 

(2) 16 L. C. R. 231. 



372 THE RAILWAY LAW OF CANADA. 

and that, though the defendant is guilty of negligence causing 
damage to the plaintiff, yet, where the plaintiff is guilty of want 
of ordinary care, contributing essentially to the injury, he cannot 
recover; and that the burden of proof is upon the plaintiff to show 
negligence on the part of the defendant and freedom from negli- 
gence on his own part. 

In 1871, it was held in Maguire v. 7he City of Montreal^ (i) 
that a municipal corporation is not responsible for damages 
caused by obstructions left on the street, if the party injured 
could have avoided the obstruction by the exercise of ordinary 
care. And the same principle, that the plaintiff's negligence 
would defeat the action, was recognized by the Superior Court in 
1874. (2) 

In 1877, in Periam v. Dompierre, (3) it was. decided by the 
Court of Appeals that, where the plaintiff, a carter, went to load 
wood at a wharf in the port of Montreal, where a steamer was in 
the act of mooring, and was injured by the snapping of a cable, 
he was guilty of contributory negligence in not avoiding the 
danger which was evident, and in unnecessarily placing himself 
in a position of danger. In a later case, however, where an 
accident arose from a similar cause, the Court of Appeals held 
that the action would lie, inasmuch as the person injured by the 
breaking of the rope had been requested by the ship master to 
cast it off the mooring post, and when injured was standing in a 
position that was necessary for him to occupy to perform that 
act. (4) In this case, however, there was a strong dissent by 
Ramsay and Cross, J. J., on the ground that the party injured 
was guilty of contributory negligence. 

In 1879 it was held by the Court of Review that, in an action 
of damages for injury suffered while walking on a railway track 
near a crossing, the plaintiff, owing to his contributory negli- 
gence, could not recover. (5) This judgment was rendered by 
Mackay, J., who quoted from Sherman and Redfield on Negli- 
gence, as well as Sourdat on Responsabilite. It is to be noted 
that Sourdat, in cases such as these, lays down a doctrine which, 



(I) 3 R. L. 450. (2) Ware v. Carsley, 5 R. L. 238. 

(3) I L- N- 5- 

(4) Corner v. Byrcl, M. L. R., 2 Q. B. 262. 

(5) Wilson v. G. T. Ky. Co., 2 L. N. 45. 



NEGLIGENCE. 373 

to the extent to which it goes, is equivalent to the English rule ; 
thus he says : (r) 

" If the injured party has himself contributed to his injury by 
a personal fault, this is a bar to his action"; but he goes on to 
say : " If it consists only in imprudence, it is but fair that it should 
set off against a like fault committed by the immediate agent of 
the injury." 

The decision in the Wilson case was reversed by the Court of 
Appeals, (2) on the ground that the accident occurred through 
the gross negligence of the company's servants, and this judg- 
ment was confirmed by the Supreme Court. (3) 

In another case, decided in i88r, (4) it was held that while a 
person carrying on a trade is bound to have his premises in a safe 
condition for persons coming there by implied invitation to give 
him their custom, yet he may relieve himself from damages arising 
from the unsafe condition of the premises by showing that there 
was contributory negligence on the other side, without which the 
accident would not have occurred. And, therefore, where a 
valuable horse received an injury while being shod by a farrier, 
and it appeared that the accident was caused by the groom in 
charge of the animal striking him with a whip, the farrier was 
relieved from liability, notwithstanding that the horse was in- 
jured partially through the unsafe condition of the floor of the 
smithy. This decision was based on the ground that the animal 
could not have been injured in the way in which it was, had not 
the groom caused it to plunge by striking it. 

Under the jurisprudence in France, where the doctrine of com- 
parative negligence obtains, it would seem that in such a case 
as this the plaintiff would have been entitled to recover, but the 
damages would have been reduced or compensated to some 
extent by the contributory negligence of the defendant. (5) 
Where, however, the negligence of the plaintiff is gross, and 

(I) I Sourdat 660. (2) 2 Dor., Q. B. R 131. 

(3) Cass. Dig. 722. 

(4) Allan v. Mullin 4 L. N. 387. 

(5) Cass., 20th Aug., 1879 ; S. 80, I, 55 ; D. 80, I, 15 ; Cass., 5th Aug., 
1879; S. 8l, I, 403 ; D. 81, I, 268 ; Cass., 8th Feb., 1875 > S - 75> T > 20 4 > D - 
75, I, 320 ; Paris, 4th Feb., 1870 ; S. 70, 2, 324 ; D. 70, 2, 1 1 1 ; Paris, 2ist 
Dec., 1874 ; D. 76, 2, 72 ; Caen, I7th Mar., l8o ; S. 80, 2, 176; Nancy, 
9th Dec., 1876; Aix, icthjan., 1877; Bordeaux, igth Aug., 1878. 



374 T HE RAILWAY LAW OF CANADA. 

that of the defendant is slight, the former cannot recover even 
in France, (i) 

The French doctrine of comparative negligence seems to have 
been adopted in a Quebec case, decided in the Circuit Court in 
1883, ( 2 ) m which it was held that where a collision occurred 
between two vehicles, and both drivers were in fault, but it ap- 
peared that the accident nevertheless might have been averted by 
ordinary care on the part of one of the drivers who did not stop 
when requested; the latter was held liable in mitigated damages ; 
in this case the plaintiff's contributory negligence consisted in 
violating the rule of the road by driving on the wrong side, but 
it appeared that the defendant could have avoided the accident 
by the use of ordinary care. 

In a subsequent case decided by the Court of Appeals in 1885, 
where the plaintiff was injured on the railway track at a street 
crossing; it was held that he must show that the company were 
guilty of some fault or negligence, whereby the injury was caused ; 
and having attempted to cross, notwithstanding that the warnings 
and signals required by the Act had been given, plaintiff could 
not recover for consequent injury. (3) 

The true rule in such cases, it appears to the author, would 
be to ascertain whether the proximate cause of the injury is due 
to the negligence of the plaintiff or the defendant; and if it be 
ascertained that the proximate cause of the injury is the negli- 
gence of the plaintiff, without the occurrence of which he would 
not have been injured, it is difficult to see how, under Article 1053, 
the defendant could be held liable, even if there was also fault 
upon his part, so long as his fault was not the proximate cause 
of the injury. (4) The rule thus stated would seem to be in 
accordance with the principles deducible from Article 1053 of 
the Civil Code ; and, thus stated, would not seem to differ mate- 
rially from the English doctrine of contributory negligence, 
though that doctrine is not technically known to the Quebec 



(1) Cass., 15111 Nov., 1881 ; Sirey 83, i, 402 ; Larombiere vol. 7, p. 560 ; 
Sourdat, Responsabiliie, No. 660. 

(2) Therrien '. Morrice, 6 L. N. iln. 

C 3 ) Roy v. G. T. R. Co., M. L. R., I Q. B. 353. 

(4) C. P. Ry. Co.?-. Cadieux, M. L. U., 3 Q. 15. 315; Allan v. Mer- 
chants Marine Ins. Co., 18 R. L. 481 ; Cunie f. Couture, 19 R. L. 443 ; 
Sarault r. Viau, n R. L. 217 ; Gagnon r r . Forsyth, 5 R. L. 228. 



NEGLIGENCE. 375 

law. This view has now been adopted by the Supreme Court in 
the case of The Quebec Central Ry. Co. v. Lortie. (i) In this 
case the defense was contributory negligence of plaintiff in 
alighting from the train, and the court sustained the defense. 
(FoTirnier J. Diss). 

As was stated by Ramsay, J., in the Court of Appeals, in 
Faucher v. North Shore Ry . Co., (2) in discussing the difference 
between the Civil and Common Law doctrines, the difference 
between them is not so great as is generally supposed ; as the 
learned judge there said : " In the French jurisprudence they 
" have not precisely in so many words the doctrine of contributory 
" negligence which throws the responsibility on the sufferer, but 
" they have the idea, as will be seen in -the note in Sirey." (3) 
In this case it was held that a line of railway running alongside 
of a street, and not divided by any fence from the street, is not 
a road on which foot passengers are entitled to the same protec- 
tion as if they were walking on the ordinary highway, and a 
person who was injured by falling over some planks lying on the 
track, which he might have avoided by the exercise of ordinary 
care, had no action against the compiny. 

The doctrine contended for is supported by the decision of the 
Court of Appeals in 1887, in a case of the The Canadian Pacific 
Ry. Co. v. Cadieux. (4) The holding there was, that where the 
injury was caused by the negligence of the defendant, and there 
was negligence also on the part of the plaintiff, it is the duty of 
the Court to ascertain the immediate or proximate cause of the 
accident, and to condemn its author to pay the damages suffered 
by the other party. In that case, however, the Chief Justice (Sir 
A. A. Dorion) in delivering judgment said: <; Although the ma- 
" jority of the Court is not disposed to alter the judgment of the 
" Court below " (in plaintiff's favor), " it is my opinion that where 
" both parties are in fault, the damages should be divided bet- 
" ween them; this was the rule of the Roman law, as it is that 
" now followed in France, and is applied in England in Admiralty 



(1) 22 S. C. R. 336, reversing S. C. & Q. B. ; not reported. 

(2) 9 L. N. 75, Q. B. Que. 1886. 

(;) Sirey Codes Annotes, Article 1382 C. N., No. 533 ; and see Sirey 83, 
1,402. 
(4) M. L. R., 3 Q. B. 315. 



376 THE RAILWAY LAW OF CANADA. 

" cases. However, the rule has never been adopted in this coun- 
" try, although I think it is the better rule." 

Notwithstanding this statement by the learned Chief Justice, 
that the French rule of mitigating the damages in cases of com- 
mon fault has never been adopted in this country, it was recog- 
nized in a former case by the Superior Court in 1886, (i) and in 
a later case, (2) decided in 1889 by the Superior Court in Re- 
view. There the plaintiffs husband tried to cross a railway track 
at intersection with the highway ; he was warned by the gate- 
keeper not to cross, but persisted in so doing, the gate was 
closed; it was daylight, the engine bell was ringing, and the 
approaching train could be seen for three-quarters of a mile 
from the point of intersection. The jury found for plaintiff, but 
the Court of Review granted a new trial on the ground that the 
verdict was against the evidence. The trial judge, however, in 
charging the jury, had admitted the principle of mitigated dam- 
ages, and his charge seems to have been approved by the full 
Court. 

In another case in the same year (3) the judges were equally 
divided. In that case the plaintiff was driving in a cart with two 
men, and was leading two horses behind the cart by a rope or 
halter twisted around his thumbs ; two of the defendant's dogs 
rushed out, their barking frightened the horses, with the result 
that part of the plaintiffs thumb was torn off. In the first 
Court, the Judge sitting without a jury found for the plaintiff in 
five hundred dollars damages, the amount being reduced to that 
sum on the ground of his contributory negligence in leading the 
horses in the way in which he did ; but in the Court of Review, 
the judgment was reversed, and the action dismissed, Wurtele, 
J., dissenting. The Court, however, allowed no costs, in order 
to discourage the habit which existed in the country of keeping 
vicious dogs, which flew out at persons passing by. 

In two more recent cases, however, the principle of reducing 
the damages where there is common fault was recognized and 
applied in the Superior Court. In one of these cases, that of 



(1) Daou?t v . Laverdure, 14 R. L. 279. 

(2) Curran v. G. T. Ry. Co., M. L. R., 5 S. C. 251. 

(3) Vital.-. Tareault, 34 I. C.J. 26. 



NEGLIGENCE. 377 

White v. The City of Montreal, (i) the holding was " that a 
municipal corporation cannot escape responsibility for the con- 
dition of a road rendered dangerous by a sudden thaw and sub- 
sequent frost; but where the person injured undertakes to venture 
down a steep hill in winter time without creepers and wearing 
well worn rubbers, such imprudence on his part having contri- 
buted to the accident must go to mitigate the damages." In the 
other case decided in the same year, it was held that, where 
there is common fault on the part of the master and his servant, 
the master is still liable, but the fault of the servant is to be con- 
sidered in determining the quantum of damages. (2) 

The above summary of the jurisprudence in the Province of 
Quebec shows the unsettled state of the law ; and some authori- 
tative decision of the highest Courts is needed to set the question 
at rest. The decision of the Supreme Court in Quebec Central 
Ry. Co. v. Lortie (3) might be regarded as such, but that their 
Lordships, with the exception of the dissenting judge (Fournier 
J.) and Gwynne J. gave no reasons for allowing the appeal, and 
the latter's opinion was based solely on the ground that the 
accident was attributable wholly to the plaintiffs' own negligence. 

However, a recent decision of the Court of Appeals would 
seem to go far in deciding that the negligence of the injured 
party, or of the persons responsible for his acts, might defeat the 
action. (4) It was there held that, where a child two years of age 
accidentally escaped from the surveillance of its mother, and 
straying into the street got in the way of an approaching street 
car, and was run over and killed, the parents could not recover; 
and the Court of Appeals dismissed the action, reversing the 
judgment of the Superior Court. (5) In this case it was proved 
that the child had strayed once or twice before from its mother's 
dwelling into a shop below, and had it not been noticed by per- 
sons in the shop, might have wandered into the street and been 



(1) Q. R., 2 S. C. 342, 1892. 

(2) Pontus dit Clement v. Rousseau, Q. R , I S. C. 263 ; but see Des- 
roches v. Gauthier, 5 L. N. 404 ; St. Lawrence Sugar Refining Co. f. Camp- 
bell, M. L R, i Q. B. 290; Dominion Oil Cloth Co. v. Coallier, M. L. R., 6 
Q.B. 268. 

(3) 22 S. C. R. 336. 

(4) Montreal City Passenger Cy. Co. v. Dufresne, M. L. R., 7 Q. B , 214. 

(5) Ib. reversing M. L. R., 7 S. C. lo. 



378 THE RAILWAY LAW OF CANADA. 

injured, as it eventually was; it was held, that the parents 
should have profited by the warning they had already received, 
and were precluded by their negligence from recovering dam- 
ages by the death of the child. It is true that in this case the 
Court held that there was no negligence on the part of the de- 
fendants ; though there was evidence adduced on the part of 
the plaintiffs that the car was running too fast, and that the 
driver should have seen the child and stopped the car before he 
did ; still, it is difficult to see how the Court could have re- 
versed the judgment of the trial Judge, who found negligence on 
the part of the defendants, except upon the ground of the negli- 
gence of the parents. 

Injuries to !(}. The next question to be taken up is that of the liability of 

persons on the , - ... , 

railway track. rai l wav companies in cases of injuries caused to persons upon 

the railway track injured by passing trains. With regard to this 
class of accidents, attention must be called to the provision of 
the A.ct, which prohibits every person not connected with the 
railway or employed by the company from walking along the 
track except where it is laid across or along a highway, (i) It 
would follow clearly from this, that in the case of a person walk- 
ing upon the track, the company would not be liable in damages 
to him for injuries received by being struck by a train, or to his 
representatives in case of his resulting death, in the absence of 
negligence on the part of persons in charge of the train. It 
would be difficult to conceive of a case of negligence on the part 
of the driver of the engine or other person having control of the 
train in such cases. It would of course be the obvious duty of 
the engineer seeing a person walking upon the track to sound 
the whistle, ring the bell, or make other signal to attract his at- 
tention, but it is doubtful whether the omission to give such 
signals would render the company liable to such a person un- 
lawfully upon the track. If, however, the company's servants in 
charge of the train had failed to comply with any of the require- 
ments of the Act, the company might be held liable in certain 
supposable cases. For instance, it is required by sec. 259, 
that no locomotive shall pass through any thickly peopled por- 
tion of any city, town or village at a speed greater than six miles 

(I) Sec. 273. 



NEGLIGENCE. 379 

an hour, unless the track is properly fenced. This of course 
would mean that the track is fenced on both sides, with proper 
gates at street or highway crossings, and in the case where this 
provision of the Act was disregarded, and it was shown that the 
accident resulted from such disregard of the positive provisions 
of the law, the company might be held liable. Again, by sec. 
260, it is required that trains moving reversely in any city, town 
or village shall have a man on the last car of the train to warn 
persons standing upon or crossing the track of the approaching 
train. A disregard of this provision of the Act would doubtless 
render the company liable in case of an accident resulting in the 
injury of any person on the track, (i) 

The cases which most frequently occur, however, are those of 
accidents at level crossings, where the railway crosses streets or 
highways at rail level. The frequency of such crossings in this 
country has resulted in large numbers of unfortunate accidents, 
nowtithstanding the provisions of the Railway Act intended to 
prevent as far as possible their occurrence. By sec. 256 cf 
the Act, provisions are made for signals to warn travellers on 
the highway of the approach of trains at such crossings. It is 
required that the bell of the engine, which by sec. 244 must 
be of at least thirty pound weight, shall be rung or the whistle 
sounded at the distance of at least eighty rods from every high- 
way crossing, and the bell must be kept ringing or the whistle 
sounding at short intervals until the engine has crossed the high- 
way ; and the same section provides a penalty of eight dollars 
for each neglect to comply with its provisions, and further makes 
the company liable for all damage sustained by any person by 
reason of such neglect. And it is to be noted that one-half of the 
penalty and damages are chargeable to the engineer who neglected 
to sound the whistle or ring the bell, and may be collected from. 
him by the company. Such are the duties cast upon the railway 
company by the Act in order to prevent, as far as possible, 
such accidents from occurring, in addition to the provisions 
of sees. 183 to 191, with reference to the crossing of highways, 
and the powers .given to" the railway committee to take meas- 
ures of precaution with regard to level crossing?. Where the 



(i) See Casey r. C. P. R. Co., 15 O. R. 574. 



380 THE RAILWAY LAW OF CANADA. 

crossing is especially dangerous, the railway committee may, 
if it permits the crossing at a level at all, order the erection of 
gates or the posting of watchmen, or other protection ; but un- 
less the railway committee so orders, the absence of such pro- 
tection would not be an element in deciding upon the liability 
of the railway company; (i) their liability in all such cases 
would depend first upon the question as to whether they or their 
servants were guilty of negligence. 

The omission to comply with the statutory regulations as to 
the giving of signals is always an important element in determin- 
ing the liability in such cases, but there is also a duty cast upon 
the traveller using the highway and crossing the railway, which 
is of great importance in the decision of such cases. A railway 
train cannot be stopped except within a certain distance, accord- 
ing to the velocity at which it is being propelled, whereas the 
traveller on foot or in a vehicle can easily come to a halt in ap- 
proaching a railway crossing. In these cases, it is always the 
old question as to whose fault it is that an accident occurs. If 
a man, either on foot or driving or riding, goes blindly upon a 
railway crossing, without looking either to the right or the left, 
and taking no heed, it would be hard to say that the railway 
company should be liable, should he be struck by a passing 
train. It is the generally accepted principle that the duty cast 
upon the traveller in approaching a railway crossing by the high- 
way is to make use of his senses of sight and hearing, and both, 
to look and listen for an approaching train, that is to say, that 
he is bound to listen for the signals and to look both ways up 
and down the track, to see if a train is approaching ; and if he 
neglects these precautions and goes blindly upon the track, and 
is injured or killed, he himself is the cause of his own misfortune, 
and this as has been held even in the case of the omission to 
give the signals by the engineer in charge of the engine. (2) 
Tnis doctrine was long ago laid down by the Court of Appeals 
for Quebec in the case of Moffette v. Tne Grand Trunk Rail- 
way Company, (3) and has since been recognized in a large 

(1) Per Patterson J. in C. P.Ry. Co. v. Fleming, 22 S. C. R., at p. 44 ; 
Stubley v. Lon. & N. W. Ry. Co., L. R., I Ex. 13, 20. 

(2) Davey v. London & N. VV. Ry. Co., L. R., 12 Q. B. D. 70. 

(3) 16 L. C. R. 231. 



NEGLIGENCE. 381 

number of decisions of our Courts, and is the universally adopted 
doctrine in England and in the United States. It is unnecessary 
to go into a discussion of the numerous reported decisions, 
though some may be given as examples, for every such case de- 
pends upon the slate of facts as disclosed by the evidence, and 
there ate few cases which come before our Courts in which 
greater conflict of evidence will be found than in cases of this 
class. As a rule, a number of witnesses can be brought to swear 
that, though within hearing distance, they did not hear the sig- 
nals required by the statute ; while the engineer and the fireman 
of the train will generally be brought to swear that the signals 
were given. In such a case, according to strict rules of evidence, 
the positive testimony that the signals were given should out- 
weigh the negative evidence of those who did not hear them ;. 
but inasmuch as the engineer is statutorily liable for one-half 
the penalty and damages, little weight is, as a rule, whether 
rightly or wrongly, given by juries or judges to his evidence; 
and a like suspicion is generally cast upon the evidence of the 
fireman, whose special duty it is to ring the bell, as neglect of 
such duty would in most cases lose him his position. If inde- 
pendent evidence can be brought, even of one or two witnesses, 
to the effect that they heard the signals given, there is no doubt 
that the correct rule would be to hold that their affirmative evi- 
dence would outweigh the negative testimony of any number of 
witnesses who had sworn that they had not heard the signals, 
(i) It is evident that the decision of such cases as these depends 
more upon questions of evidence than of law, for the principles 
of law are clear enough and are the same as govern most cases 
of personal injuries, that is to say, that it is purely and simply a 
question as to which party is in fault, according to the weight of 
the evidence. 

As illustrating the practicable application of these principle s,. 
some of the reported cases.may be here referred to. 

In the case of injuries caused by collisions between the com- 
pany's engines and persons crossing the track in carriages or on 
foot at the intersection of highways, each is exercising an equal 



(i) But, as to setting aside the verdict of a jury on tl.ese ground?, see 
Dublin, Wicklovv & \V. Ry. Co. r. Slattery, 3 App. Cas. 1155. 



382 THE RAILWAY LAW OF CANADA. 

legal right independent of any contract or favor extended by 
the one to the other. The duty of each under such conditions 
is to use ordinary care in the exercise of his own right to avoid 
injury to the other. If, notwithstanding such care by both 
parties, an injury happens, it is a misfortune which must be borne 
by the sufferer alone, (i) 

It is not necessary, in order to recover, that the injury should 
have occurred by actual collision with an engine or train cross- 
ing a highway. (2) There need be no impact, (3) provided 
that the injury is the direct and immediate result of the com- 
pany's negligence. So where a horse takes fright at a passing 
engine, and, by reason of the defective state of the highway, 
damage is sustained, the remedy would be against the party by 
whose act or neglect the highway was insecure,- in this case the 
railway company. (4) And where the engineer neglects to ring 
the bell until just upon the crossing, the sudden ringing of 
which frightens the plaintiff's horse, which was not being negli- 
gently managed, the company will be held liable. (5) In another 
case, a little boy was standing on a snowbank on the side of the 
track where it crossed a street. He saw the train approaching, 
and when it came opposite to where he was, it gave a jerk, which 
frightened him and he slipped down on to the track, where he 
was run over by the train and injured. It was held that the 
omission to sound the whistle or ring the bell did not impose any 
liability on the defendants, as it in no way contributed to the 
accident. (6) 

The authority to operate a railroad includes the right to 
make the noises incident to the movement and working of its 
engines, as in the escape of steam and rattling of cars ; and also 



(i) Bender v. Canada Southern Ry. Co.., ^7 U. C. Q. B. 25 ; and see 
Brand v. Schenectady & T. Ry. Co., 8 Barb 368 ; Motfette v. G. 1'. R , 16 
L. C. R. 231. 

(2) G. T. R. v. Sibbald, 20 S. C. R. 259; following G. T. R. r. 
Rosenberger, 9 S. C. R. 311. 

(3) But see Atkinson . G. T. R., 17 Ont. 220; Rock v. Denis, M. L. 
R. 4 S. C. 134, confirmed in review M. L. R. 4 S. C. 356. 

(4) G. T. R. T'. Sibbald, 20 S. C. R. 259 ; and see Toms?'. Township of 
Whitby, 35 U. C. Q. B. 195 ; 37 U. C. Q. B. loo; Steinhoff?'. Corpora- 
tion of Kent, 14 Ont. App. 12. 

(5) G. T. R.r. Rosenberger, 9 S. C. R. 311; C. P. R. v. Lawson, 
Cassel's Dig. 731 (1893). 

(6) Shoebrink r. Can. Atl. Ry. Co., 16 O. R. 515. 



NEGLIGENCE. 383 

to give the usual and proper admonitions of danger, as in the 
sounding of whistles and the ringing of bells. And they are not 
liable for injuries resulting from fright caused by such sounds. 
But if the injury resulting from the fright would not have hap- 
pened but for a breach of duty by the company, it will be liable 
for the injury. Thus if it neglected to give the signals prescribed 
by statute," and thereby the traveller was brought into close 
proximity to the train and his horse became frightened, it is 
liable for the consequences, (i) 

Mr. Justice Patterson, in a lengthy dissenting opinion in the 
case of C. P. Ry. Co. v. Fleming (2) expressed the view that the 
English cases, relating to the degree of care to be exercised by 
railway companies in passing crossings, were not applicable to 
our country, owing to the differences created by our legislation, 
especially as to giving warning by bell or whistle. In the court 
below, it appears that judgment proceeded on the idea that some 
level crossings may be peculiarly dangerous, and that at them the 
statutory signals may be insufficient. But the learned judge, 
dissenting in the Supreme Court, thought that when the company 
had adhered to the requirements of the statute, that was, under 
the circumstances of the case, sufficient. The majority of the 
Court, however, upheld the decision of the Court below, without 
going into detail?. (3) The accident in this case occurred 
at a city crossing ; the arm of the gate which barred the crossing 
was raised at the time, and could not be brought down owing to 
the frost, but the signal man had gone on to the track, and 
seeing plaintiff's approach at a dangerous moment, waved his 
lantern and shouted to him. The plaintiff said he did not see 
the light or hear the bell. The defendants had kept down their 
speed to six miles an hour, and had properly rung the bell. The 
company were nevertheless held liable. 



(1) Pierce, 348 ; Robertson i>. Halifax Coal Co., 20 N. S. 517 ; Norton v. 
Ea-tern R. R. Co., 113 Mass. 366 ; Prescott r. Eastern R. R. Co., 113 
Mass. 370; Shaw v. Boston & W. R. Co., 8 Gray 45 ; Pollock r-. Eastern 
R. Co., 124 Mass. 158; PennR. Co., v. Barnett, 59 Pa. St. 259 ; Phil.W. 
& B. R. Co. r. Stinger, 78 Pa. St. 219 ; Hudson v. L. & N. R. Co., 14 
Bush 303. 

(2) 22 S. C. R. at pp. 43-44 ; and see per Patterson & Rose, J. J., in 
Peart v. G. T. R. Co., 10 Ont. A. R. 191. 

(3) The Quebec case of G. T. R.v. Godbout, 6 Q. L. R. 63, is to the 
same effect. 



384 THE RAILWAY LAW OF CANADA. 

As to the conflict in the American decisions on this point, Mr. 
Patterson in his work, on Railway Accident Law, (i) favors the 
view taken by the dissenting judges in the above case. 

Sec. 256 of the Railway Act applies to shunting in a station 
yard. (2) 

It appears that the rule which has prevailed in the State of 
Pennsylvania, which requires that a person about to cross the 
track must " stop," as well as look, and listen for an approach- 
ing train, is not applicable to our country. The circumstances 
of every case differ from the circumstances of every other case, 
and it is impossible to frame a hard and fast rule applicable to 
every case. (3) The traveller is bound to look not only for 
regular trains and those stated in time tables, but as well for 
extra trains, or any trains beyond time. (4) 

Where the defendants were negligent in not fencing a cross- 
ing, and thereby disregarded a statutory duty, yet if the proxi- 
mate cause of the accident was plaintiff's own negligence, he can- 
not recover. (5) In the following case plaintiff showed negli- 
gence by driving on to the track without looking for the train, 
and while attempting to save his oxen was struck himself. The 
bell used by the defendants was an automatic one, but there was 
evidence that these bells do not always ring when the train is in 
motion, and that it was not ringing at the time of the accident. 
It was held, the Chief Justice doubling, that there was evidence 
of negligence for the jury. (6) In another case, where the 
plaintiff had approached and attempted to cross the track at a 
trot, without looking out, though he could have seen along the 



(1) p. 162, s. 164. 

(2) Hollinger v. C. P. R., 20 Ont. App. 244 ; Casey v. C. P. R., 15 
O. R. 574- 

(3) Armour, C. J., in Hollinger v. C. P. R., 21 O. R. 710. 

(4) Winckler r. Great West. Ry. Co., 18 U. C. C. P. 266 ; Stubley v. 
London, etc., Ry. Co., L. R., i Ex. 13 ; Wilcox v. Rome, W. & O. R, Co., 
39 N. Y. 358 362 ; Salter v. Utica & B. R. R. Co., 75 N. Y. 273. 

(5) Winckler v. Great West. Ry. Co., 18 U. C. C. P. 251. 

(6) Wilton v. Northern W. R. Co., 5 O. R. 490 ; Peart v. G. T. R., lo 
Ont. App. 191 ; G. T. R. v. Godbout, 6Q. L. R. 64 ; and see Davey v. Lon- 
don & S. W. Ry. Co., L. R. 12 Q.B. D. 70 ; Johnson v. Northern Ry. Co., 
34 U. C. Q. B. 439 ; Blake v. C. P. R., 17 O. R. 177 ; Weir v. C. P. R., 
16 Ont. App. 100 ; Miller v. G. T. R. Co., 25 U. C. C. P. 389 ; Boggs r. 
Great West. Ry. Co., 23 U. C. C. P. 573 ; G. T. R. r. Rosenberger, 9 S. 
C. R. 311 ; G. T. Ry. Co. r. Beckett, 16 S. C. R. 713. 



NEGLIGENCE. 385 

line in either direction, it was held he could not recover, the 
defendant's position not being affected by their allowing cars to 
be on a siding, obstructing the view while the train was passing. 
(i) But where a freight car was allowed to remain standing 
for an unreasonable time upon the crossing within the limits of 
the street, the company will be held liable for damage to a 
traveller by reason of his horses becoming frightened and tin 
manageable on account of it. (2) 

It has been questioned whether an engine and tender con- 
stitute a train within sec. 52 of R. S. C., ch. 109, so as to require 
a man to be stationed on the rear thereof to warn persons of their 
approach ; (3) and an attempt appears to have been made to 
cover the point by an amendment to the present Act, (4) which 
does not, however, seem to be broad enough, for though the 
words " engine and tender " have been added, the provision 
still applies only to " ji train of cars moving reversely," with the 
engine and tender in the rear of such train. In all these cases, 
there is something more to be considered than the value of a pair 
of horses, or even than the life of the driver, and that is, the 
safety of passengers lawfully using the railway, whose lives are 
at least of equal value. (5) 

Where a railway company crosses a highway, the duty of the 
company is not merely to provide a crossing upon which the rails 
do not rise more than one inch above or sink one inch below the 
level ; but it is also the company's duty to construct and maintain 
such approaches as may be necessary to enable persons using 
the highway to avail themselves of the crossing. (6) Therefore, 
where a railway company laid a plank 14 feet long outside the 
rail, and did not grade the road up to the plank at one end of it, 
but left the ends of the ties exposed, it was held that the com- 
pany were liable for an accident occurring to the plaintiff's mule, 

(1) Johnson v. Northern Ry Co , 34 U. C. Q. B. 432 ; see also Nicholls 
v. Great West. Ry. Co., 27 U. C.Q.B. 382; see also Rastiick v. Great West. 
Ry. Co., 27 U. C. Q. B. 396; Weir v. C. P. R., i6Ont. App. 100 ; C. P. R. 
Co. v. Chateauvert, 16 R. L. 28 (Q. B.) ; Casey v. C. P. R. Co., 15 O. R. 

574- 

(2) Desrousseau v. Boston & Maine, 34 L. C. J. 252. 

( 3 ) Casey v. L. P. R., 15 O. R. 574. 
4) 55-56 Vic., cap. 27. 

(5) Miller v. G. T. R., 25 U. C. C. P. 396, Hagerty, C. J. 

(6) G. T. R.v. Sibbald,2oS. C. R. 259 ; Moggy v, C. P. R., 3 Man. 209. 

25 



386 



THE RAILWAY LAW OF CANADA. 



by reason of the whiffletree catching upon one of these ties, (i) 
The company having made a crossing of plank 14 feet wide 
should have provided for the grading of the approaches being 
the same width, and not left them sloping off on each side of 
the grading within that width. 

The case of Faucher v. North Shore Ry. Co., (2) decided in 
the Province of Quebec, shows that the jurisprudence of that pro- 
vince is not very clear on this point. The duty of the company 
to use the best system of brakes and other appliances for stopp- 
ing trains is not confined to the carriage of passengers, but ex- 
tends to persons rightfully using or crossing its tracks. (3) 

Obstructing ^7, By sec . 273 no person is to walk on the line of railway, 

and inter- , . , , ... 

rupting free except where same is laid across or along a highway, under a 

use of railway, penalty upon summary conviction not exceeding ten dollars. B., 
without the consent of a railway company, took a trolley or hand- 
car belonging to them, and ran upon the railway for a number of 
miles, at a time when, ordinarily, no train was reasonably to be 
expected to be running upon that part of the road. It was held 
by the Supreme Court of New Brunswick that he was guilty of 
" obstructing and interrupting the free use of the railway" under 
sec. 86 of the Dominion Act, 42 Vic., c. 9, though his doing so 
did not actually interfere with any train. (4) Foot passengers 
are to use foot-bridge if provided, (5) under penalty often dollars 
for offending against this provision. 

Another species of accident is that of collisions occurring at 
the crossing of two railways. There are provisions in the Sta- 
tute intended to prevent, as far as possible, the occurrence of 
such accidents. By sec. 257 it is provided that at every 
point where two railways cross each other at rail level, an offi- 
cer must be stationed, and no train is allowed to pass over 
such crossing until a signal has been given that the way is clear. 
As an additional precaution, by sec. 258, every train or 



(1) Moggy v. C. P.R , 3 Man. 209; see also The People v. N. Y. Cent. & 
H. P. R. Co., 74 N. Y. 302. 

(2) o L. N. 75 (1886), Ramsay J. (Q.B.). 

(3) Smith v, N. Y. & H. R. R. Co., 19 N. Y. 127 ; Gagg v, Velter, 41 
Ind. 228. 

(4) Reg. v. Browneil, 26 N. B. 579. 

(5) Sec 274 Ry. Act. 



NEGLIGENCE. 387 

engine is required to stop for at least one minute before cross- 
ing the track of any ether railway, with the exception that where 
an interlocking switch and signal system or other device is used, 
which, in the opinion of the railway committee, renders it safe 
for engines and trains to pass over the crossing without stopping, 
the committee may give permission in writing to pass without 
stopping, under such regulations as to speed and other matters 
as the committee deems proper; but the order giving such per- 
mission may be modified or revoked at any time. Any failure on 
the part of the railway company to comply with those provisions 
of the Act would undoubtedly render them liable for any loss or 
damage resulting from an accident occurring in consequence. 

It has been held by the Supreme Court, that it is negligent for 
an engineer not to apply the air-brakes at a sufficient distance 
from the crossing to enable the train to be stopped by hand- 
brakes in the case of the air-brakes giving way. (i) In another 
case, defendants' railway crossed the track of another railway on 
the level, and both were bound by statute to stop at least a min- 
ute before crossing, but neither did so. Defendants' line was 
signalled as clear, and their train, in which the plaintiff was a 
passenger, went on without stopping. The other line was sig- 
nalled as not clear, but the train on it ran on, disregarding this 
signal, and struck the defendants' train at the crossing, whereby 
the plaintiff was injured. If either train had pulled up 
about two seconds sooner, the collision would have been avoided. 
It was held that the defendants were liable to the plaintiff, for 
that their neglect to stop the required time was, as far as the 
plaintiff was concerned, a part of the cause of his injury and 
sufficiently proximate. (2) And there seems no doubt that as 
between themselves the negligence of the defendant company in 
not stopping the regulation time before crossing, although the 
line was signalled clear, was not sufficient to clear the other 
company from the results of its negligence, because by the exer- 
cise of care on their part they would have avoided the conse- 
quences of the defendants' neglect or carelessness. (3) 

With reference to railway accidents generally, attention should 

(i) Great Western Railway Company v. Brown, 3 S. C. R. 159. 

(12) Graham v. Great Western Railway Company, 41 U. C. Q. B. 324. 

(3) Ibid. 



388 THE RAILWAY LAW OF CANADA. 

be called to sec. 243 of the Act, providing that passenger 
trains shall be provided with such known apparatus and arrange- 
ments as best afford good and sufficient means of immediate com- 
munication between the conductors and the engine drivers while 
the trains are in motion, and good and sufficient means of apply- 
ing the brakes both to the engine and to the cars, by means of 
steam or otherwise, and of disconnecting the engine or any ot the 
cars from each other, and also the best apparatus and arrange- 
ments for securely fixing the seats or chairs in the cars. And the 
company is subject to the orders of the railway committee with 
reference to such appliances, and may be compelled to alter them 
or supply new ones from time to time. The company are subject 
to a penalty of $200 for every day during which they are in 
default to comply with the provisions of this section, besides their 
liability in damages to all persons who may be- injured in conse- 
quence ; and this, notwithstanding any agreement to the contrary 
made with any such person. 

Injuries to ^ 8. Next, with regard to accidents resulting in injury to em- 

employees, ployees of the company. The general rule, in Quebec at least, 
would seem to be that the company would be liable towards 
employees, on the same principle that they would be liable to 
passengers or other persons not in their employ, unless indeed 
the injury was the necessary result of one of the risks of employ- 
ment which the employee impliedly undertook in entering into 
the service of the company, without there being fault or negligence 
imputable to the company or their officers, for whom they are 
responsible, (i) The Quebec Courts have refused of late years to 
adopt the English doctrine that employers are not responsible 
for injuries to their servants resulting from the fault or negligence 
of fellow-servants in a common employment with them, though in 
earlier cases it was distinctly recognized. (2) The English com- 
mon law doctrine appears to have been, that where a seivant was 
injured through the negligence of a fellow-servant woiking with 
him in the same employment, the master was not responsible, 



(1) Rich. & Ont. Kav. Co. v. St. Jean, M. L. R., i Q.B. 252 ; St. Law- 
rence Supar Refining Co. ?'. Campbell, M. L. R , i Q. B. 290. 

(2) Fuller, v. G. T. R. Co., i L. C. L. J. 68, S. C. R. 1865 ; Bourdeau 
v. G.T. R. Co., 2 L. C. L. J. 186, S. C. 1866 ; Hall r. Can. Copper & 
Sulphur Co., 2 L. N. 245, S. C. R. 1879, confirming. 



NEGLIGENCE. 389 

providing that he had exercised due care in the selection of the 
servant causing the injury, and had not engaged a notoriously 
incompetent man. (i) Nice distinctions have been made in 
England as to what would constitute common employment as 
between different servants working for the same master, and it is 
now regulated there by Statute, the general principle being that 
to constitute common employment, the servants must be em- 
ployed in the same work and of equal grade, and that the 
master would be responsible where inju-y was caused to his ser- 
vant through the negligence or fault of other servants placed in 
authority over him by the master, such asaforeman, superinten- 
dent, or otherwise. And this would seem to be in accordance 
with principle and common sense ; for while, on the one hand, it 
would be hard to say that the master should answer for the con- 
sequences of injury caused by one servant to another working 
together at the same job, where the fault was practically common 
to both, it would be equally unjust to say that the servant should 
have no recourse against his master where he had been injured 
in obeying the orders of a superior placed in authority over him 
by the master. A striking instance might be taken from the case 
of brakemen and other men employed upon a train, injured 
or killed through the fault or neglect of the despatcher ; though 
in some American cases recourse has been denied to employees in 
such circumstances, on the ground that the injury was the result 
of the negligence of a fellow-servant in a common employment 
with them. In the present state of the jurisprudence, the Quebec 
Courts refuse to make any distinction between the case of an 
accident happening to a servant through the negligence of a fellow- 
servant, and an accident happening to a stranger through the 
same agency. The courts have refused to go beyond the length 
of recognizing that the servant entering upon a dangerous occu- 
pation accepts the ordinary risks of it, and cannot recover unless 
he can show negligence on the part of his master, as evidenced 



(i) Priestley v. Farrell, 3 M. & W. i ; Hodges on Railways 66r ; i Red- 
field 386 ; Deverill v. G. T. R. Co., 25 U. C. Q. B. 5 17 ; Plant v. G. T. Ry. 
Co, 27 U. C. Q. B. 78 ; Cunningham v.G.T. Ry. Co., 31 U. C. Q. B. 350; 
O'Sullivan ?'. Victoria Ry. Co-, 44 U. C. Q. B. 128 ; Macfarlane v Gilmour, 
5 O. R. 302 ; Matthews v. Hamilton Powder Co., 14 Ont. A. R. 261 ; 
Johnson v. Lindsay, [1891], App. Cas. 371 ; Cameron v. Nystrom [1893], 
App. Cas. 308. 



390 THE RAILWAY LAW OF CANADA. 

either by the fault of some fellow servant or defects in some 
machinery, material or otherwise, (i) 

" Our law," said Judge Ramsay, in Tne St. Lawrence Sugar 
Refining Co. v. Campbell, (2) "fortunately is unembarrassed by 
any artificial jurisprudence disturbing general principles. An 
employer is liable for any want of care on his part by whi