postponing the completion of the road for a considerable time, and of so managing it that it should be a source of profit in the meantime. I think that this was within the scope of the reservation contained in the general act which declares that the legislature may at any time alter, amend or repeal it, and may amend and repeal any corporation which may be formed under it."

This plainly implies that if the act had abandoned the original project, the subscriber would not have been bound. For the judge had no occasion to make the argument he did to show that the change was within the scope of the power of amendment, if the power was unlimited.

Pierce, in his work on Railroads, p. 98, gives it as the result of the authorities, that even when the power of amending is reserved, it is not unlimited, but "that such a radical change in the company as diverts it from its original purpose" is not binding on a dissenting shareholder. But if the power is not unlimited, where is the limit? By what principles is it to be established? I know of none except those I have already contended for, which base the right upon the implied authority conferred by each one who becomes a member of the corporation, on the majority, to bind him by such changes as may fairly be regarded as incidental to the original project.

The judgment must be affirmed.12

12 Witter v. Mississippi O. & R. R. R. Co., 20 Ark. (1858) 463; Memphis &c. R. Co. v. Sullivan (1876) 57 Ga. 240; Snook v. Georgia Improvement Co. (1889) 83 Ga. 61, 9 S. E. 1104; Shelbyville & R. Turnpike Co. v. Barnes (1873) 42 Ind. 498; Oldtown &c. R. Co. v. Veazie (1855) 39 Maine 571 (semble); First Nat. Bank v. Charlotte (1881) 85 N. Car. 433; Bank of China v. Morse (1901) 168 N. Y. 458, at p. 472, 61 N. E. 774, 56 L. R. A. 139, 85 Am. St. 676. Rutland &c. R. Co. v. Thrall (1863) 35 Vt. 536 (semble), accord. But see Sprague v. Illinois &c. R. Co. (1857) 19 Ill. 174; Terre Haute &c R. Co. v. Earp (1859) 21 Ill. 291.

NUGENT V. THE SUPERVISORS (1873) 19 Wall. (U. S.) 241, 22 L. ed. 83. Held, that a county which subscribed to the stock of a railroad company after its incorporation was not released from obligation to pay the subscription by an amendment of its charter authorizing it to consolidate with another railroad company, the original charter of the railroad company authorizing it to consolidate. Cf. Shelbyville & Rushville Turnpike Co. v. Barnes (1873) 42 Ind. 498.

HARTFORD & NEW HAVEN RAILROAD COMPANY V. CROSWELL (1843) 5 Hill (N. Y.) 383, 40 Am. Dec. 354. The defendant subscribed to the stock of a railroad company after incorporation. Subsequent to the subscription the legislature amended the charter so as to authorize the company to purchase, charter and hold steamships and for that purpose to increase the capital stock. Held, the defendant was released on the ground that the plaintiffs were attempting to enforce a contract into which the defendant never entered.

SCHENECTADY & SARATOGA PLANK R. R. COMPANY V. THATCHER (1854) 11 N. Y. 102. Held, that a stockholder was not released from his subscription by the corporate acceptance of a subsequent legislative act, enacted under the reserve power to amend, increasing the corporate capital and authorizing the construction of a branch railroad. The court said, p. 114: "Everyone who enters into such a company is aware of the reservation of the power, and of the possibility of its exercise, and trusts, as in other matters he must trust, to the wisdom and justice of the legislature that this power will not be abused. In the Hartford and New Haven Railroad Co. v. Croswell

(5 Hill 383) and in the cases there cited as holding the same doctrine, the legislature had reserved no such power, and the cases there involved were held to violate the provision of the constitution of the United States, which forbids the enactment by a state of a law impairing the obligation of contracts." In Buffalo & N. Y. C. R. Co. against Dudley (1856) 14 N. Y. 336, at 355, the court, referring with approval to the preceding case, said: "Under the rule established in that case, no mere addition to or alteration of the charter, however great, would operate to discharge a stockholder from his obligation to the corporation. To work such a discharge the charter must be repealed, or the legislation must be such as to subvert the corporation itself, or at least to destroy its identity. The mere change of name has repeatedly held to not have that effect. (Cited cases omitted.) In other respects the change in this case is not materially greater than in that of the Schenectady & Saratoga Plank Railroad Co. against Thatcher (supra.) It does not become necessary, therefore, to take into consideration the soundness of the principles advanced in the case of the Hartford and New Haven Railroad v. Croswell (5 Hill 383). That case is in direct conflict with several English cases, as well as with some decided in this country; and a portion of its reasoning would, I think, be required to be examined with some care before it is finally adopted." (Cited cases omitted.) As to the scope of the power to amend, see Lord v. Equitable Life Insurance Society (1909) 194 N. Y. 212, 87 N. E. 443 and New York Cent. & H. R. R. Co. v. Williams, (1910) 199 N. Y. 108, 92 N. E. 404, 35 L. R. A. (N. S.) 549, and cases cited, supra note 33, page 111.

CHAPTER IV.

POWERS OF A CORPORATION.

Section 1.-In General.

10 Co. 30 b. That when a corporation is duly created, all other incidents are tacite annexed. And for direct authority in this point in 22 E. 4, Grants 30, it is held by Brian, Chief Justice, and Choke, that corporation is sufficient without the words to implead and to be impleaded, and therefore divers clauses subsequent in the charters are not of necessity, but only declaratory, and might well have been left out. As 1. By the same to have authority, ability and capacity to purchase, but no clause is added that they may alien, etc., and it need not, for it is incident. 2. To sue and be sued, implead and be impleaded. 3. To have a seal, etc., that is also declaratory, for when they are incorporated, they may make or use what seal they will.

ATTORNEY-GENERAL v. MERSEY RAILWAY CO.

1906. L. R. (1907) 1 Ch. Div. 81. 1907. L. R. (1907) A. C. 415.1

APPEAL from a decision of Warrington, J.

The action was brought by the Attorney-General at the relation of the corporation of Birkenhead, and by the corporation, against the Mersey Railway Company, for a declaration that it was beyond the powers of the railway company to carry on the business of omnibus proprietors in the borough of Birkenhead, and for an injunction to restrain them from so doing. The defendant company owned and worked a railway which connected Liverpool and Birkenhead by means of a tunnel under the river Mersey. After passing beneath the river the railway ran into Hamilton Station in Birkenhead and then divided into two branches, one of which went northwest to Park Station and the other southeast to Central Station and then south to Green Lane and Rock Ferry Stations. All these stations were in the borough of Birkenhead. The traffic on their line was mainly a passenger traffic. The corporation owned and worked a ferry across the river Mersey, and they also owned and worked a system of electric tramways in the borough of Birkenhead. These tramways connected the riverside with the distant and more hilly parts of the town, which constituted the residential quarter, and from which a 1 Some of the opinions are omitted.—Eds.

large portion of the passenger traffic of the railway and ferry was alike derived. The corporation ran their cars at intervals of ten minutes, and during the greater part of the day the cars passed the Central Station of the defendant company; but during certain purtions of the day they took an alternative route which led directly to the ferry without passing the defendants' station, and the defendants were thereby placed at a great disadvantage in competing with the corporation for the traffic between Liverpool and Birkenhead. Accordingly, in the autumn of 1905, the defendants applied to the corporation, as the licensing authority, under the Birkenhead Corporation Act, 1881, (44 and 45 Vict., chap. cliii), and the Town Police Clauses Acts, 1847 and 1889, (10 and 11 Vict., chap. 89, and 52 and 53 Vict., chap. 14), to license six motor omnibuses to ply for hire as hackney carriages within the borough. The corporation granted the licenses, but without prejudice to their right to take any further steps in the matter. In December, 1905, the defendant company instituted a service of motor omnibuses in connection with their train service, running every six minutes from 8 a. m. to 7.30 p. m. between their Central Station and the residential portion of the town. These omnibuses picked up passengers along the road or at specific stopping places, and conveyed them to such other places on their route as the passengers might desire, and separate fares were fixed for journeys between intervening stopping places on the line of route. In all cases, however, the complete routes of these omnibuses either commenced or ended at the Central Station. The defendants had no express power under their special acts to run omnibuses in connection with their trains.

WARRINGTON, J., held that it was ultra vires of the defendant company to carry on the business of omnibus proprietors, and granted the injunction.

The railway company appealed.

BUCKLEY, L. J.-We have here to deal with a statutory corporation. The general rule is that a chartered company can do anything which is not by its charter forbidden, but that a statutory corporation can do only that which is by its statute authorized. The chartered corporation is a corporation at common law. The statutory corporation is not. The latter owes its existence wholly to the statute and cannot go beyond the statute which creates it. The statute, however, in many cases defines only the purpose; sometimes it also defines special powers. But, whether in the one case or the other, the statutory corporation is not by the general principle above stated restricted to acts specifically mentioned or referred to in the statute. To ascertain whether any particular act is ultra vires of the statutory corporation or not the main purpose must first be ascertained; then the special powers for effectuating that purpose must be looked for, and then, if the act is not within either the main purpose as described in or the special powers expressly given by the statute, the inquiry remains whether the act is incidental to or consequential upon the main purpose and is a thing reasonably to

be done for effectuating it. To quote Lord Selborne in AttorneyGeneral v. Great Eastern Ry. Co. (2), the doctrine of ultra vires is to be reasonably and not unreasonably understood and applied, and whatever may fairly be regarded as incidental to or consequential upon those things which the legislature has authorized ought not (unless expressly prohibited) to be held by judicial construction to be ultra vires. By way of illustration, let me suppose that the main purpose found in the statute or in the memorandum of association of a statutory company is to establish and carry on an hotel, and that express power is given to buy land at a particular place and to build, and that as to anything further the statute or memorandum of association is silent. It is quite clear law that all such acts as are reasonably necessary for effectuating that purpose are intra vires, such, for instance, as the purchase of furniture, and of linen, of provisions, and of wines and spirits, the hiring of servants, the payment of licenses, the ownership probably of horses and carriages, the maintenance and working of an omnibus which shall attend at the railway station to take intending guests to the hotel and the like. In a large number of cases the maintenance of a garden and pleasure grounds would be intra vires. The legitimate extent of these would depend upon circumstances. The maintenance of tennis lawns or of a bowling green would in many circumstances, be legitimate. Under circumstances such as presently put, a golf links might be intra vires. All these and the like will without express mention be within the company's powers. Then I may instance other acts as to which it would be a question of fact in the case of the particular hotel whether it was such an act as would be reasonably incidental or consequential. If, for instance, the hotel were at Bundoran or Rosapenna or elsewhere in the county Donegal it might be intra vires to lay out and maintain in good order a golf links or to acquire rights of fishing and to own boats and to supply gillies for the purpose of fishing upon the lakes. It may be that in the particular locality custom could only be reasonably expected or obtained by offering those attractions, and they might be as necessary as a smoking-room or a bowling green elsewhere. If the hotel in question were the Savoy Hotel in the Strand or the Great Central Hotel in the Marylebone Road the proposition would cease to be true. So, again, if the hotel were situate in a place inaccessible unless special means of communication were provided—say, at a lovely spot at the end of the Scotch Loch to which there is no road, or at a place to which there is access by a road but which is not served by any coach or mail cart serviceit might be intra vires for that hotel to run a steam launch or a motor car to bring its guests to their destination. It would in such a case be analogous to the omnibus which the hotel in the country town sends to the railway station. The question is in each case a question of fact, Is the particular act as to which it is in question whether it is intra vires an act which in the circumstances of that

(2)-(1880) 5 App. Cas. 473.