case as I have indicated was established, then the plaintiff company would have been entitled to succeed in accordance with the principle on which the case of Salford (Mayor) v. Lever (1) was decided. But I am not able to hold that such a case has been established on the evidence before me. If I could come to the conclusion that the defendant's original arrangement with Balfour was made in the expectation that Balfour would, by reason of his share in the profit of 6,000l., be induced to persuade one of the companies of which he was a director to buy at an improper price I should have seen my way to hold the defendant liable. But on the evidence before me I am not justified in coming to that conclusion. The defendant says that at the time the arrangement was made he had no idea who the purchasers were likely to be, and, indeed, did not think that Balfour would be able to find a purchaser at the increased price, and I cannot say that this evidence is to be disbelieved. Again, if I could hold that when the defendant ascertained that the plaintiff company was to be the purchaser, or when the contract with the plaintiff company was entered into, or before it was carried out, the defendant had reason to believe that Balfour had concealed from the company or its board the fact of his sharing in the profit, and had thereby induced the directors of the company to enter on its behalf into an improper bargain, I should be prepared to make the defendant liable. But on the evidence before me I cannot so hold. At the times I am now considering Jabez Balfour was of good repute, and was believed by the defendant to be an upright man. I do not see my way to hold as against the defendant that he intentionally or deliberately abstained from communicating to the company or its directors the fact of the arrangement as to the division of the 6,000l. in the belief that the company was not aware of that fact. Under these circumstances the action fails, and, as it is based on a charge of fraud which has not been substantiated, it must be dismissed with costs. Judgment for defendant. Solicitors: Phelps, Sidgwick & Biddle, for the Plaintiff Company. Linklater, Hackwood, Addison & Brown, for the Defendant. C. V. B. PEGGE v. NEATH DISTRICT TRAMWAYS CO. 1895, June 15, 22, 25. NORTH, J. Tramway Company-Public Undertaking-Debenture holders-Appointment of Receiver and Manager—Penalties—Leave to Distrain. Although the Court will not appoint a receiver and manager of a tramway company (Marshall v. South Staffordshire Tramways Co. (1) followed), nevertheless, where such a receiver and manager had been appointed prior to the decision in that case, a road authority (empowered by statute to distrain) was given leave to distrain on the property of the tramway company to recover penalties for the non-repair of the tram lines, even though the purposes for which the undertaking was acquired might be defeated or seriously affected thereby. THE Neath and District Tramways Company was formed in 1873 by a provisional order of the Board of Trade, as provided by the Tramways Act, 1870 (33 & 34 Vict. c. 78), ss. 4 and 8. Section 28 of the Act provided that "The promoters shall, at their own expense, at all times maintain and keep in good condition and repair, with such materials and in such manner as the road authority shall direct, and to their satisfaction, so much of any road whereon any tramway belonging to them is laid as lies between the rails of the tramways and (where two tramways are laid by the same promoters in any road at a distance of not more than 4 feet from each other) the portion of the road between the tramways, and in every case so much of the road as extends 18 inches beyond the rails of and on each side of any such tramway." Section 56 provided that, all tolls, penalties, and charges under the Act, or under any bye-law made in pursuance of the Act, might be recovered and enforced :-In England before two justices of the peace, in manner directed by the Act 11 & 12 Vict. c. 43, and any Act amending the same. The Statute 11 & 12 Vict. c. 43 was amended by the Summary Jurisdiction Act, 1879 (42 & 43 Vict. c. 49). Clause 8 of the provisional order provided that: "The promoters shall at all times maintain and keep in good condition and repair (1) 12 R. June, 57; [1895] 2 Ch. 36; 64 L. J. Ch. 481; 43 W. R. 469. the rails of which any of the tramways shall for the time being consist, and if the promoters at any time fail to comply with this provision or with any of the requirements of the Tramways Act, 1870, they shall be subject to a penalty not exceeding 51. for every day on which such act of omission continues; and such penalty may be recovered as by Clause 56 of the said Act is provided." The provisional order was confirmed by the Tramways Orders Confirmation Act, 1873 (36 & 37 Vict. ch. cxcvii.). In 1875 the company issued debentures, charging "the undertaking, lands, houses, stables, plant, property, and effects, both present and future, of the company." In 1893 the company became financially embarrassed, and in September, 1894, the debenture holders issued a writ in an action asking for the appointment of a receiver and manager of the company's undertaking. On 3 October, 1894, Lord RUSSELL of Killowen, sitting as Vacation Judge, made the order asked for by the debenture holders, and in January, 1895, final judgment in the action was given. On 8 February, 1895, the Council of the County of Glamorgan (the road authority for the district) obtained an order from the magistrates at Petty Sessions, which empowered the Council to recover from the company, by distress and sale of the company's property, penalties to the amount of about 4351. for not maintaining and keeping in good condition and repair the rails of which the company's tramway consisted. The County Council now applied to the Court by summons, asking for leave to enforce the payment of the penalties by distress and sale of the company's property, notwithstanding the appointment by the Court of a receiver and manager in the interest of the debenture holders. Vernon Smith, Q.C., and J. G. Wood, for the County Council: The liability to penalties for not keeping the tramway in working order is a statutory liability. The debenture holders are mortgagees of the undertaking, not of the assets of the company in specie: Gardner v. London, Chatham & Dover Railway (2), Blaker v. Herts (2) L. R. 2 Ch. 201; 36 L. J. Ch. 323; 15 L. T. 494; 15 W. R. 324. & Essex Waterworks Co. (3), Marshall v. South Staffordshire Tramways Co. (1), Robson v. Smith (4). The order appointing the receiver and manager is not binding on the County Council, because they were not parties to the application upon which such order was made. The Act of 1848 (11 & 12 Vict. c. 43) prescribes the mode in which the penalties are to be recovered. The County Council is entitled to distrain and sell the property of the company. No doubt the undertaking may be paralysed thereby, but the Legislature contemplated such a possibility. Ashton Cross, for the debenture holders and the company: In many cases a company has property which may be seized without breaking up its undertaking, e.g., superabundant stores of any kind, and it is on such property that the Legislature intended distress to be levied. In the present case there is no such property. If distress is levied the undertaking will be broken up and the Court ought not to allow that. Until the appointment of a receiver and manager this was only a floating charge, but after appointment the receiver and manager took possession of the undertaking for the benefit of the debenture holders: Legg v. Mathieson (5), Gardner v. London, Chatham & Dover Railway (2). Vernon Smith, Q.C., in reply. NORTH, J.: This is an application by the Council of the County of Glamorgan asking the Court to allow them to distrain on the property of the Neath & District Tramways Company to recover certain penalties, notwithstanding the fact that a receiver and manager has been appointed by the Court. The application is opposed by the debenture holders of the company. The question is, what is the position of the parties? In Gardner v. London, Chatham & Dover Railway (2), a receiver and manager had been appointed. [His Lordship read part of the judgment of Lord CAIRNS (pp. 211, (3) 41 Ch. D. 399; 58 L. J. Ch. 497; 60 L. T. 776; 37 W. R. 601. 212, 217), to the effect that the Court will not appoint a manager of a railway company, and as to the meaning of the term "undertaking" in the mortgage deed of a railway company, and continued] In that case, what was charged, was the "undertaking." In my opinion, what is charged in the present case, is really the undertaking, although specific items are mentioned in the debentures as well as the undertaking of the company. That was the case of a railway company, and the Court has, no doubt, in some cases made a distinction between railway and tramway companies, and has appointed receivers and managers of tramway companies at the instance of debenture holders. But in the recent case of Marshall v. South Staffordshire Tramways Co. (1) the question was raised and the Court of Appeal decided, that the rule laid down in Gardner v. London, Chatham & Dover Railway (2) with regard to railway companies, applied equally to tramway companies. [His Lordship read passages from the judgment of the Court of Appeal in Marshall v. South Staffordshire Tramways Co. (1), (pp. 51, 53, 54 of the Law Reports) and continued: ] Therefore, in the case of a tramway company, a receiver and manager cannot properly be appointed, and the order which has been made in the present case would not be made since the decision of the Court of Appeal in Marshall v. South Staffordshire Tramways Co. (1). But that order has not been appealed from, and the company are, therefore, bound by it. ever, were not parties to it and are not affected by it in so far as it is now necessary for them to obtain the leave of the Court, before they can enforce the order of the magistrates. They are now applying for such leave. I must hold that the debenture holders have acquired no right against the County Council by reason of the appointment of a receiver and manager, and I must give the County Council leave to exercise their right of distress. Both sides have asked me to decide what are the rights of the County Council under the distress. The respondents' counsel argued that the distress could not be enforced, because such enforcement would result in the purposes for which the undertaking has been acquired being defeated or seriously affected, and would cause inconvenience to the public. No doubt, if some of the company's rolling-stock were seized and sold the public would be incon debenture holders and the The County Council, howbound by it; they are only |