VIRES CHAPTER I. ULTRA VIRES IN ITS APPLICATION IN SUITS ON CONTRACT FOR THE RECOVERY OF MONEY. FIRST SELECTED CASE. THE EAST ANGLIAN RAILWAYS COMPANY V. THE EASTERN COUNTIES RAILWAY COMPANY.* A railway company incorporated by act of Parliament, cannot, even with the assent of all its shareholders, legally enter into a contract involving the application of any portion of its funds to purposes foreign from those for which it is incorporated. The defendants were incorporated by an act of Parliament, the first section of which enacted that certain persons should be united into a company for making and maintaining a certain railway and other works by the act authorized, according to the provisions and regulations thereinafter mentioned, and for that purpose should be one body corporate by the name and style of "The Eastern Counties Railway Company," and should have perpetual succession, and a common seal. The third section empowered the company to raise a sum of money "for making and maintaining the said railway, and other works authorized by the act." The fifth section directed that the money so raised should be expended in and towards making and maintaining the said railway, and other works, and in otherwise carrying the act into execution. And by subsequent Reported in 11 C. B., 775; 21 L. J. (N. S.), C. P., 23; 16 Jur., 249; 7 E. L. & Eq., 409 (1852). sections it was provided that the profits, after defraying the expenses of making, maintaining, and working the railway, were to be accounted for and divided amongst the proprietors of the undertaking: Held, That it was not competent to the directors to enter into a contract with another railway company, to take a lease of their line, and to pay the costs incurred by them in the soliciting and promoting of bills in Parliament for the extension and improvement of such other line of railway, even though such extension and improvement would benefit their own company; and that such contract, if entered into, was illegal and void, and could not be enforced in a court of law. Covenant.-The declaration stated, that, theretofore, and before the making of the indenture thereinafter mentioned, and before the commencement of the suit, a certain bill for the construction of certain extensions, branches, and other works therein mentioned to be thereby authorized to be constructed; to-wit, a bill entitled "A bill to enable The Lynn and Ely Railway Company to extend their railway to Bury St. Edmunds," had been and was prepared by and on behalf of The Lynn and Ely Railway Company, and had been and was introduced by and upon the petition of the said last mentioned company into Parliament and into the House of Commons, and at the time of the making of the said indenture was pending in Parliament and in the said House of Commons, and the said Lynn and Ely Railway Company were the promoters thereof. That, theretofore, and before the making of the said indenture, and before the commencement of the suit, a certain other bill for the construction of certain extensions, branches, and other works therein metioned to be thereby authorized to be constructed; to-wit, a bill entitled "A bill to enable The Lynn and Ely Railway Company to extend their railway to Spalding and Holbeach," had been and was prepared by and on behalf of the said Lynn and Ely Railway Company, and had been and was introduced by and upon the petition of the said last mentioned company into Parliament and into the House of Commons, and at the time of the making of the said indenture was pending in Parliament and in the said House of Commons, and the said Lynn and Ely Railway Company were the promoters thereof. That, theretofore, and before the making of the said indenture, and before the commencement of the suit, a certain other bill for the construction of certain exten sions, branches, and other works therein mentioned to be thereby authorized to be constructed; to-wit, a bill entitled "A bill for making deviation in the line of The Lynn and Ely Railway Company, and for forming docks within the borough of King's Lynn," had been and was prepared by and on behalf of the said Lynn and Ely Railway Company, and had been and was introduced by and upon the petition of the last mentioned company into Parliament and into the House of Commons, and at the time of the making of the said indenture was pending in Parliament and in the said House of Commons, and the said Lynn and Ely Railway Company were the promoters thereof. That, theretofore, and before the making of the said indenture, and before the commencement of the suit, a eertain other bill for the construction of certain extensions, branches, and other works therein mentioned and thereby authorized to be constructed; to-wit, a bill entitled "A bill to enable The Lynn and Ely Railway Company to make a navigation from Lynn to Wormegay, all in the county of Norfolk," had been and was prepared by and on behalf of the said Lynn and Ely Railway Company, and had been and was introduced by and upon the petitition of the said last mentioned company into Parliament and into the House of Commons, and at the time of the making of the said indenture was pending in Parliament and in the said House of Commons, and the said Lynn and Ely Railway Company were the promoters thereof. That, afterward, and before the commencement of the suit; to-wit, on the 26th day of February, 1847, by a certain indenture then made between the said Lynn and Ely Railway Company, The Ely and Huntingdon Railway Company, and the Lynn and Dereham Railway Company, of the one part, and the said Eastern Counties Railway Company, of the other part-one part of which said identure, sealed with the common seal of the said last mentioned company, the plaintiffs brought into court, etc.—after reciting that the said Lynn and Ely, Ely and Huntingdon, and Lynn and Dereham Railway companies, had agreed to amalgamate and form one company, under the name or style of "The East Anglian Railways Company," and that a bill was then pending in Parliament to give effect to such agreement; and also that the said Lynn and Ely, Ely and Huntingdon, and Lynn and Dereham Railway Companies had agreed with the said Eastern Counties Railway Company to grant to the said Eastern Counties Railway Company a lease of their several railways, branch railways, and works, for the term and in manner thereinafter mentionedeach of them, the said Lyon and Ely, Ely and Huntingdon, and Lynn and Dereham Railway Companies, for themselves respectively, and for their respective successors and assigns, and so far as the several covenants, clauses and agreements thereinafter contained were or ought to be observed and performed by and on behalf of the said last mentioned companies respectively, and their successors and assigns, did covenant and agree with the said Eastern Counties Railway Company, their successors and assigns; and the said Eastern Counties Railway Company, for themselves, their successors and assigns, and so far as the several covenants, clauses and agreements thereinafter contained were or ought to be observed by and performed on the part of the said Eastern Counties Railway Company, their successors and assigns, did covenant and agree with the said Lynn and Ely, Ely and Huntingdon, and Lynn and Dereham Railway Companies respectively, and each of them, their respective successors and assigns, in manner following; that is to say (amongst other things): 1. That in the said agreement, The East Anglian Railways Company should be taken and considered to mean The Lynn and Ely, Ely and Huntingdon, and Lynn and Dereham Railway Companies, and The East Anglian Railways should be taken to mean the railways, branch railways, and works of said last mentioned companies, except such portion of the proposed line of the Ely and Huntingdon Railway as lies between St. Ives and Ely, and which The East Anglian Railways Company were not to construct. 2. That The East Anglian Railways should be leased to The Eastern Counties Railway Company for the term of 999 years, at such annual rent, and subject to such conditions as were thereinafter mentioned. 3. That the said term of 999 years should commence on the day when The East Anglian Railways should be certified by the commissioners of railways to be completed, and ready for opening. 4. That, for the first year of the said term, the annual rent should be of such |