SALISBURY GOLD-MINING Co. v. HATHORN. in the event of the proposals being accepted. The declaration went on to allege that a motion for the adjournment of the meeting of July 9, 1895, until November 8, 1895, was duly made and seconded, and, if put to the meeting, would have been carried, but that the chairman illegally and improperly declined to put the resolution, claiming that under article 66 of the articles of association of the appellant company no such adjournment could take place without the consent of the chairman, who thereupon put the motion for the confirmation of the provisional agreement specified in the circular, which was lost on a show of hands; but a ballot being demanded, the appellant company have assumed that the confirmation was then carried. The declaration further alleged that all proxies used at the vote by ballot must have been given by shareholders, the majority of whom reside in Europe or elsewhere beyond the borders of the colony, and whose knowledge of the agreement submitted for confirmation must have been derived from the first circular convening the meeting. The plaintiff claimed 1. A declaration that the motion for the adjournment of the meeting should have been submitted to the vote of the shareholders present, and that the action of the chairman in declining to put the motion was wrong and contrary to law. 2. A declaration that the motion if duly put would have been carried. 3. An order of the Court declaring the adjournment of the meeting for a period of four months from the date of the judgment in the action. 4 and 5. That the resolutions which the company purported to pass at the meeting after the chairman refused to put the motion for adjournment should be declared void and invalid and be set aside, and that the company should be interdicted from treating as valid and acting upon any such resolutions. 6. That the company should be interdicted from giving effect to any agreement by which Eckstein & Co. would be allowed to subscribe for 100,000 shares at par in the intended new company, and by which the shareholders of the appellant company would be debarred from subscribing to any portion of such capital contrary to the meaning and intent of provision (c) as above set out. The appellant company excepted to the declaration as shewing no grounds of action in that (a) The adjournment of the meeting in terms of article 66 of the articles of association was at the discretion of the chair man. (b) The provisional agreement put before and dealt with by the meeting was the provisional agreement set out in the notice and in the declaration. (c) It was not alleged in the declaration nor is it the fact that the resolutions against the carrying out of which an interdict was sought were outside the powers of the meeting. (d) There was no averment in the declaration that the plaintiffs would sustain damage or that any of their rights would be infringed by the carrying out of the resolutions. When the case came on for argument before the Supreme Court it was ordered that the defendant company's exceptions to the plaintiffs' declaration should be, and the same were thereby, overruled. This decision was arrived at by Chief Justice Gallwey and Mr. Justice Wragg, Mr. Justice Beaumont dissenting. The Chief Justice and Mr. Justice Wragg expressed the opinion that the construction placed upon the 66th clause of the articles of association by the chairman was incorrect; whilst Mr. Justice Beaumont was of the contrary opinion. The Chief Justice appears to have entertained the view that the refusal to put the motion for adjournment invalidated. the subsequent proceedings. Mr. Justice Wragg, however, reserved his opinion as to the effect of the chairman's action. An application was afterwards made to the Supreme Court for leave to appeal to her Majesty in Council, and the leave prayed for was granted by a majority of the Court, Mr. Justice Wragg dissenting. It was contended before their Lordships that it was not a case in which it was competent for the Court below to grant leave to appeal, inasmuch as the order against which the appeal was brought SALISBURY GOLD-MINING Co. v. HATHORN. was not a final judgment, decision, or sentence, nor was it a rule or order having the effect of a final or definitive sentence. During the discussion of this point before their Lordships it became evident that even if the order appealed against was not a final judgment or an order having the effect of a definitive sentence, a point which had caused a difference of opinion in the Court below, and which was certainly open to doubt, the questions in controversy on the face of the pleadings were of much importance, and that a determination of them might put an end to further litigation. Under the circumstances, therefore, their Lordships thought it right, without occupying further time in the discussion of the preliminary question, to recommend her Majesty to give special leave to appeal. It may well be doubted whether in any view of the case the declaration discloses a good cause of action, but their Lordships think it desirable to pronounce judgment upon the construction of the 66th article, which, it is asserted, justified the course taken by the chairman, without expressing an opinion on the validity of the objection urged, that even if the chairman erred in not putting the motion for adjournment the action could not be sustained. The article is in these terms so far as material: "The chairman may, with the consent of the members present at any meeting, adjourn the same from time to time and from place to place in Pietermaritzburg." Before discussing the language of this article it is important to notice the provisions of the articles which immediately follow. By article 67 it is provided that "Upon all questions a show of hands shall in the first instance be taken, and the question shall be decided by such show of hands unless upon or immediately after such show of hands a ballot be demanded in writing by at least five members personally present entitled to vote, but no ballot shall be allowed on a question of the adjournment of the meeting." The 68th article provides that when the vote is being taken by show of hands each member present shall have one vote only, and proxies as such shall not be admitted to vote. VOL. 66.-P.C. Their Lordships are of opinion that upon the true construction of article 66 the chairman is not bound to adjourn the meeting, even though a majority of those present desire the adjournment. If the intention had been that the majority of the members present should have the right to adjourn the meeting whenever they pleased, their Lordships think the article would have been differently worded. According to the terms of article 66 it is the "chairman" who may adjourn the meeting; it is to be his act, not that of the meeting, or of those present at it. He cannot, it is true, adjourn it of his own mere motion, but the terms in which the members present are given a controlling voice strengthens the view that the adjournment is to be the act of the chairman. It provides for the "consent" of the members present, which implies that the act is not theirs but his. It is said that there is an inherent power in any meeting to determine on an adjournment if it pleases, and that it is the duty of the chairman to put any motion for that purpose made and seconded. Whether this be so or not in a case where no such articles are to be found as those now under consideration, their Lordships do not think it can be so in a case where the articles have expressly prescribed the conditions under which an adjournment may take place. It was contended for the respondents that the construction which the natural meaning of the language used suggests would lead to unreasonable results, and therefore could not have been that intended by those who framed the articles. It is true that it vests in the chairman large powers which might conceivably be used improperly by him; but, on the other hand, if there were no check upon the power of those present at a meeting to adjourn it to a future date, it is equally conceivable that a small minority of the shareholders might seriously prejudice the interests of the company and defy the wishes of the majority of its members. The facts stated in the declaration of the present action will suffice to illustrate this. The meetings are to be held at Pietermaritzburg. Many of the shareholders reside in Europe or elsewhere beyond the borders of the colony. G 1897. SALISBURY GOLD-MINING Co. v. HATHORN. They can vote by proxy and so express their views on any proposed action by the company that may come before a meeting for consideration, but the articles provide that proxies are not to be used on the question of the adjournment of the meeting. This being so, a limited number of members resident in or near Pietermaritzburg might by carrying motions for adjournment defeat proposals which the great majority of the members thought in the interest of their company. It is no doubt possible that a chairman might abuse the power which their Lordships think vested in him; on the other hand, he may use it to protect the rights and interests of those who may be unable to be present. Their Lordships see no sufficient reason, then, for departing from what seems to them to be the plain and natural meaning of the language used. What has been already said is enough to shew that this appeal must succeed; but it may be well to add that in their Lordships' opinion the fact that after the motion for adjournment was rejected by the chairman the confirmation of the provisional agreement was declared carried, can in their opinion afford no ground for complaint. The agreement which was thus confirmed was that specified in the circular convening the meeting, and no gloss of the chairman, even if incorrect, and no statement by him as to what was intended to be done under it, could modify or affect the confirmation of the specified agreement. Their Lordships will humbly advise her Majesty that the appeal should be allowed. The respondents must pay the costs of the appeal and in the Court below. Solicitors--R. S. Taylor, Son & Humbert, for [Reported by J. Eyre Thompson, Esq., RAILWAY(respondents).* Canada-Dominion Railway-Section of Railway within Two Jurisdictions Mortgage of Railway with Power of SaleJurisdiction of Provincial Court to order Sale. By a mortgage-deed the respondent company granted to the appellants the first division of their line, the plant and the revenues, subject to working expenses. Default having been made, appellants brought this suit for a sale and the appointment of a receiver. Part of the first division was within the jurisdiction of Manitoba, and part within that of the North-West Territory:-Held, that, though the whole division was, by the law of Canada, saleable by the mortgagees, the Manitoba Court could neither sell the whole, as part was outside of its jurisdiction, nor disintegrate the division by selling such portion only thereof as was within its jurisdiction; and secondly, that the mortgagees were at liberty to appoint a receiver of the net proceeds of the working of the first division, ascertained by calculating the revenues of the whole line, deducting therefrom the whole of the working expenses, and attributing the due proportion of the sums to the first division. Appeal from a judgment of the full Court of Queen's Bench in Equity for Manitoba, dated February 10, 1896, varying an order made by Killam, J., on April 17, 1895, in a suit brought by the appellants against the respondents. The respondent company was originally incorporated in 1880 by an Act of the province of Manitoba (43 Vict. c. 35), as "The Westbourne and North-Western Railway Co." This Act was amended in 1881 by an Act of the province of Manitoba (44 Vict. c. 41), whereby, inter alia, the name of the company was changed to "The Portage Westbourne and North-Western Railway Co." Under these Acts the railway company had power to construct and operate a line of Coram, Lord Watson, Lord Hobhouse, Lord Macnaghten, Lord Morris, Lord Shand, and Lord Davey. GREY V. MANITOBA AND NORTH-WESTERN RAILWAY. railway and electric telegraph from Portage la Prairie, in the province of Manitoba, to the northern and western boundary of the province, and to build and operate specified branch lines within the province of Manitoba. In the year 1882, by an Act of the Parliament of Canada (45 Vict. c. 80), the respondents' railway was declared to be a work for the general advantage of Canada, becoming thereby, by sub-section 10 of section 92 of the British North America Act, 1867, a Dominion railway, subject to the jurisdiction of the Dominion Parliament. The last-mentioned Act was amended by the Canadian statute 46 Vict. c. 68, passed May 25, 1883, and the name of the company was changed to "The Manitoba and North-Western Railway Co. of Canada." Section 5 of this amending Act limits and defines the borrowing powers of the railway company. After the execution by the respondent railway of various mortgage-deeds, and the issue of bonds, an arrangement was made, in pursuance of which on April 16, 1886, the principal indenture in question in the appeal was entered into between the railway company of the first part, the trustees for the holders of bonds of the first issue of 328,000l., of the second part, and the appellants (who are hereinafter referred to as "the trustees") of the third part, and by this instrument the railway company, for the purpose of securing the 540,000l. of bonds then about to be issued, mortgaged to the trustees the first division or portion of the railway and electric telegraph of the company, extending from Portage la Prairie to a point distant 180 miles, as therein particularly described, with certain exceptions, subject, nevertheless, to the working expenses of the said railway and telegraph, and all rates, taxes, and assessments, and other Government charges; and also all rights, privileges, powers, immunities and exemptions, and all corporate and other franchises then owned, held, and enjoyed by the company, or thereafter to be held or enjoyed or conferred upon it, its successors or assigns, in any way connected with or relating to the said division or portion of the said railway or telegraph constructed and to be constructed, and the reversion and reversions, remainder and remainders thereof. On November 1, 1893, the appellants presented a petition to the Court of Queen's Bench in equity, alleging default under the mortgage in question for the period of three months, and prayed, among other things, to be allowed to enter into possession of the first division of the railway. After various intermediate proceedings, Killam, J., on February 1, 1895, made an order (inter alia) that all necessary enquiries should be made, accounts taken, costs taxed and proceedings had for redemption or sale, and that for these purposes the cause should be referred to the Master. From this decree the company appealed to the Full Court, which on February 10, 1896, pronounced judgment. Taylor, C. J., and Bain, J., were of opinion that the 180 miles, or first division, of the respondent company's railway was a section within the meaning of section 278 of the Dominion of Canada Railway Act, 1888, but that the Court had no jurisdiction to decree a sale of that portion of the first division of the respondent company's railway situated outside the province of Manitoba, and that the appellants were not entitled to have a sale decreed of all or any part of the said first division, in so far as the same consisted of real property. They were also of opinion that the mortgage to the appellants of the said first division was subject to the payment in priority to such mortgage of the working expenses of the entire railway, but they did not see fit to declare the rights of any parties in respect of such priorities after any sale of the said first division. Save as aforesaid, they affirmed the judgment of Killam, J. Dubuc, J., concurred. The questions to be determined on this appeal were as follow, namely: 1. Whether the appellants as mortgagees are entitled to have a sale of the whole of the first division of the respondent company's railway and telegraph. 2. Whether, if the appellants are not entitled to have a sale of the whole of the first division, they are entitled to have a sale of that portion of the first division GREY v. MANITOBA AND NORTH-WESTERN RAILWAY. (being about 170 miles) which is wholly situated within the province of Manitoba. 3. Whether the mortgage of the first division of the respondent company's railway and telegraph to the appellants is subject to the payment in priority of the working expenses of the entire line of railway worked and owned by the respondents (inclusive of the first division) and of all rates, taxes, assessments, and other Government charges charged thereon, or only of the working expenses of the said first division, and the rates, taxes, assessments, and other Government charges charged thereon. Feb. 10, 11, 12.-Blake, Q.C., and Ewart, Q.C. (both of the Colonial Bar) (Sir E. Clarke, Q.C., and A. E. Balfour with them), for the appellants.-The Court in Manitoba had jurisdiction to order a sale of the first section of the railway, even though 9 miles are outside the province, as there is nothing to shew that such sale would be contrary to the law of the adjacent North-West Territory. The Courts of the adjoining territory would give effect to a decree of the Manitoba Court. That a sale is within the jurisdiction is shewn by Redfield v. Wickham Corporation [1888].1 In any case the Manitoba Court had power, under the Dominion of Canada Railway Act (51 Vict. c. 9), to order a sale of the portion within its jurisdiction. Moreover, the power of sale was given by the contract between the parties constituted by the trust deed of April 16, 1886. There might in any case have been a decree in personam, if not in rem, as to which see Palmer's Company Precedents (6th ed.), forms 544, 545, 546; Dicey's Conflict of Laws, p. 217; Portarlington (Lord) v. Soulby [1834] 2; Ewing v. Orr-Ewing [1883].3 That the Court will enforce contracts relating to land situated abroad is shewn in British South Africa Co. v. Companhia de Mocambique [1893], per Lord Herschell, L.C.; Norris v. Chambres [1861].5 (1) 13 App. Cas. 467. (2) 3 Myl. & K. 104. (3) 53 L. J. Ch. 435; 9 App. Cas. 34. (4) 63 L. J. Q.B. 70, 79; [1893] A.C. 602-626. (5) 30 L. J. Ch. 285; 29 Beav. 246; 3 De G. F. & J. 583. [They also cited Cooper v. Cooper [1888] 6 and Harrison v. Harrison [1873].7]] 8 Robinson, Q.C. (of the Colonial Bar), and Swinfen Eady, Q.C. (F. H. Phippen (of the Colonial Bar) with them), for the respondents.—It has been well settled for many years in the Canadian Courts, in accordance with the principles applied in Gardner v. London, Chatham, and Dover Railway [1867], that, apart from statute, upon considerations of public policy, an incumbrancer of a railway cannot enforce his charge by sale or foreclosure. There is, further, no power to enforce a sale of land outside the jurisdiction. A decree to that effect would necessarily be a decree in rem, even if it purported to apply only to purchase-money of such land-Hawthorne, In re [1883]. There is no statutory authority for disintegrating the first section of the railway, and the indenture of April 16, 1886, gives nothing more than a charge on the surplus of profits after payment of all expenses. Blake, Q.C., in reply. March 6.-LORD HOBHOUSE delivered the judgment of their Lordships: The appellants, who were plaintiffs below, contend that they are entitled to a decree for sale of a section of the defendants' line of railway and telegraph. This has been refused by the Court of Queen's Bench in Manitoba, whose decree is under appeal; and the questions before this Board are: First, whether the Court was right in such refusal; and secondly, if it was, whether the plaintiffs are or are not entitled to other relief in this suit. The line in question was commenced under powers conferred by the Manitoba Legislature within that province. In the year 1882 it became a Dominion railway subject to the exclusive jurisdiction of the Dominion Parliament; and Acts of Parliament have been passed for the extension of the line into the North-West Territory beyond the limits of Manitoba. In the years 1882, 1883, and 1885 the company obtained powers to issue mortgage bonds (6) 13 App. Cas. 88. (7) 42 L. J. Ch. 495; L. R. 8 Ch. 342. |